Greece:What to Do with Missed the Mark Politics of Pasok and the Democratic Left?

By Con George-Kotzabasis May 3, 2013

The Samaras’ Government, like Atlas on his back, is carrying and attempting to transform and move Greece’s awesome heavy burden of unprecedented economic insolvency, since the ending of the Second-World-War, onto the stage of economic recovery and development. By succeeding in this most difficult enterprise it will also justify the positive, against the negative, economic remedies formulated in the second Memorandum by the European Union (EU), the European Central Bank and the International Monetary Fund, the so called Troika, for the purpose of saving Greece from economic catastrophe, and thus simultaneously enhance the credibility, and indeed, the survival of the EU as an institution of crucial influence and guidance in world affairs.

In this call to national salvation three politically and ideologically disparate parties 0f New Democracy, Pasok, (Panhellenic Socialist Movement) and the Democratic Left (Demar) decided to form a coalition government whose main goal was to keep Greece within the European Union and salvage the country, with the financial help of the latter, from economic bankruptcy that would have devastated the standard of living of the major part of the population and would have brought a proud nation to the status of indigence and economic despair for at least a generation. The two leaders, of Pasok and Demar, Evangelos Venizelos and Fotis Kouvelis, respectively, seeing the prodigious dangers the country was facing, raised their height to these dire circumstances and wisely decided to stand hand in hand with an ideological opponent, that is, the liberal conservative party of New Democracy and its leader Antonis Samaras, for the purpose of saving Greece from this imminent catastrophe. Hence the two leaders of the left put their ideological reputation and the future viability, and, indeed, the existence of their parties at immense risk by their decision to support a government led by Samaras, their erstwhile conservative opponent, and tie themselves and their parties to the fortunes of the latter, that is, whether the Samaras’ government will succeed or not in pulling the country out of the crisis and start the economic development that is so vital in overcoming the terrifying economic difficulties that Greece countenances at the moment.

There are grounds to make one believe that Greece economically and politically might be at a turning point. The Samaras government after succeeding in convincing its European partners, in exceedingly difficult negotiations, to provide the funds Greece needed, to ignite its economy and place the country on the path of development, under less onerous terms of the bailout than the initial ones the Europeans were demanding. This was a great success and a great achievement of the government and demonstrating at the same time its virtuoso skills in the art of negotiations.

The government announced last month that it had beat its budget targets for 2012. Finance Minister Stournaras claimed that the government was close to achieving a primary surplus—the budget surplus before taking into account payments on the debt—this year that would deliver, according to the mutual agreement of the parties, a further package of help from the Euro-zone.  Employment statistics also showed, that within the span of the last two months the number of workers hired exceeded by nearly nine thousand the number of workers dismissed for the first time since the crisis. Furthermore, the recapitalization of the banks was on track and bound to be consummated in the next few weeks and the spigots of liquidity were therefore ready to be opened that would provide the private sector the funds for investment. Last week, the president of the National Bank stated that levels of liquidity are progressively established and 10 billion Euros could flow into the real economy. And already 50% of one thousand of small and large private enterprises announced that they were preparing to start investing within the current year. The internationally renowned telecommunications company Nokia is planning to establish a branch in Athens that would employ hundreds of highly skilled technicians and could become a magnet that would attract other foreign corporate giants to the country and thus by their presence would provide a continuous economic confidence for the country’s future. The Task Force of the European Commission last week issued favourable reports that the Greek economy was about to be re-ignited although it warned the government that small businesses had been dried of funds and their future operations were at risk. Also the credit ratings agency Moody’s estimated that Greece would have a positive rate of growth in 2014, after five years of negative growth.

Thus we see that there are ample encouraging signs that Greece might be at the crucial point of overcoming the crisis. It is most important therefore that the two parties, Pasok and Demar, that support the Samaras government, must first take note of these auspicious indices and that the current measures of the government are putting the country on the axis of economic development, and second, must not jeopardise this favourable situation by rigidly sticking to their parties position on other issues, such as labor relations and on the restructuring of the public sector, which are contrary to the overall current policy of the government and could endanger the economic progress the latter is making in overcoming the crisis.

The coalition partners must become fully aware that their political viability is tied up not with the sacred ideological position these parties hold on a variety of issues, contra the neo-liberal position of New Democracy, and pushing these toward their consummation, at this critical juncture whose primary goal is the salvation of the country, is a most imprudent diversion from the main goal. On the contrary, their political future is tied up with the success of the Samaras government in pulling the country out of the crisis. The electorate will not remember them and will not elect them for being pure to their ideological position but for their pragmatic support of a neo-liberal government that saved Greece from economic oblivion and mass poverty. In the event the Samaras administration fails in this complex immensely difficult and great task would likewise totally discredit and everlastingly condemn and cast to political oblivion both Pasok and Demar for their support of this failed government, no matter how favorable the former have been on other minor issues, in comparison to the major issue, that are dear to the hearts of the many. Their responsibility to the country and to themselves therefore lies in their pragmatic assessment of the policies of the government beyond ideology as to whether they are better placed to extricate the country from the crisis.

It is for this reason that in this process of the Renaissance of Greece, under the wise and strong leadership of Antonis Samaras, the cohesion of these partners in the salvation of the country is of unaccountable importance. Thus for Pasok and the Democratic Left not to miss the mark is to realize that the failure or success, in this uniquely historical venture of saving Greece, will determine their political viability in the future and not their ideological hues on secondary issues.

Professor Varoufakis’s Obsession to Blacken Greece

By Con George-Kotzabasis

 

And a reply from the Professor to my criticism. Note that he claims, his life and his family’s are threatened by “certain mafiosi,” without however adducing any evidence for such a threat. His family actually resides in Australia. Will the “black hand” of this mafiosi reach as far as Australia? This is not to say that there might not be organised “hit-men” connected to business  interests but to aver and insinuate, as the professor does, that they are the armed-squads of the political establishment, and by implication are connected with the Samaras’s government, is not only a malevolent fiction but also intellectually unethical. 

 

Professor Varoufakis, you are spuriously using the so-called “Bankruptocracy in the Greek sector of Bailoutistan” and the populist appellation of “Cleptocracy,” to the obviously current “political establishment,” as the motivation of an‘assassin’ who readies himself to plunge a knife at the back of the Samaras’ administration.

Why this obsession of yours to blacken and calumniate the achievements of the government in extracting from the Troika in the most difficult negotiations the prerequisites that will potentially pull Greece out of the crisis by the sterling performance of Yanis Stournaras under the strong leadership of Antonis Samaras? Why, like an ostrich you put your head in the sand and don’t see the positive assessments   both of European Commissioners and politicians as well as institutions, such as Moodys, of the benign prospect that Greece by the end of 2014 will be on the trajectory of economic development? Why you don’t make a ‘peep’ about this great prospect that Greece has more than a chance to overcome its stupendous economic difficulties in the near future and thus fulfil the hopes of the people that are free from the dire prophesies of pessimistic academics and from the lachrymose political stand of Syriza and the Independent Greeks?

Lastly, your last sentence, to say the least, is sinister and nefarious. It attempts and has the aim to confuse European taxpayers that their money goes to “the Greek sector of “Bailoutistan” and not for saving the country from imminent bankruptcy. You must be proud of your rust-made performance.

Professor Varoufakis says,

Dear Kotzabasis,

I have enjoyed, till now, your quaint defence of your dearest Samaras, Howard, et al, for a simple reason: I do not trust my own ideology as a Left Winger. However, when you seem utterly unperturbed by clear evidence of mafia-like behaviour by those whom you have aligned with, and you respond by essentially defending them, you are stating that you are no longer a fit and proper person to be in communication with me. Until and unless you recant, and express solidarity with those of us (Vaxevanis and myself, for example) whose lives and families are threatened by certain mafiosi, you are banned from this blog. Good riddance Sir.

 

 

What is Needed for a Recycling Mechanism to Start?

A reply to Professor Varoufakis on his proposal of a recycling mechanism from countries with surpluses in his talk to the OECD.

By Con George-Kotzabasis

The working of a recycling mechanism from countries that are in surplus would primarily need the physical stature of Professor Varoufakis, that is, lean efficient competitive economies with no wastage baggage and lean governmental apparatuses. Most economies, however, of southern Europe are in a state of pathological obesity in both regards and thus are being unfavourable turfs for surplus countries to plough their money in them. For the wheels of the recycling mechanism to start therefore, it would be necessary to fundamentally restructure the economies and governments in the former case, on the ethos of a competitive market economy, and on the latter, by removing the destructive policies of government intervention and excessive regulation in the sphere of private enterprise.  Only countries free from the deleterious effects of un-competitiveness and government dirigisme and replete with entrepreneurial dynamism acting within a private enterprise system can be favoured to be the recipients of the manna of the recycling mechanism.

The above argument is reinforced by the two historical examples in Professor Varoufakis’ presentation where he shows that the Americans at the end of the Second World War recycled the major part of their surplus to Germany and Japan, the two countries that were renowned for their economic efficiency and technological feats and operating within the private enterprise system, and the second, when China and the oil producing countries of the Arab peninsula recycled their surpluses to America on the basis of the same principle, that is, of economic prowess and competitiveness. In neither case were these surpluses recycled to “Africanized” economies. Likewise, why European countries, such as Germany, that are in surplus, should recycle the latter to the economically sclerotic countries of the south unless the latter engaged in a radical restructuring of their economies that initially would be followed with a lot of pain as Greece presently shows with the radical changes that are taking place in its economy under the robust and imaginative Samaras government? It is easy to talk about the misanthropy of the elites but what about the misanthropy of those politicians of the left, such as Andreas Papandreou, who for years created a false prosperity for their peoples without telling them of the heavy price and suffering they would have to pay for it and the great crisis that they would be engulfed in?

Can Professor Varoufakis envisage that the great foundational changes that are required, so the recycling river of funds will inundate those countries that are at the bottom pit, can occur without pain? Is the Heracletian profound maxim that out of “great discord rises the greatest harmony” to be negated by the votaries of the “dismal science”?

Guest (Xenos) says,

Incorrect, in every way and on every level.

Per capita, Greece received more than any other country from the Mashall Plan and other forms of financial assistance from the USA. Germany andJapan received the most because (a) they were the largest countries lined up to receive funds, and (b) because they had been decimated by the war. It had nothing to do with your homespun nonsense about “Africanised countries” — whatever you think those might be.

Your speech is nothing more than empty rhetoric and has no relation to historical reality or economic analysis.

Kotzabasis says,

Greece was a special case due to the civil war and the threat of a communist take-over and the fact that America replaced Britain as the plenipotentiary of Greece and its protector from communism. And it goes without saying that part of the reason why funds flowed to Germany and Japan was their devastation. But the major reason was that the Americans wanted to create an engine of economic development in these two regions and that is why they chose Germany and Japan renowned for their past economic prowess. Professor Varoufakis himself in his presentation makes it quite explicit that China invested its surplus in the United States precisely because of the latter’s high competitiveness (M.E).

.

To Greek Academic the European Debt Crisis is an Apparition

This is a short reply to Professor Varoufakis’s lecture in London which was given under the sub-heading “There is no Debt Crisis”.

By Con George-Kotzabasis

In a short time, Professor Varoufakis’s “German hegemon” is found inadequate to solve the European crisis. Now it has to be replaced by the Global hegemon, configured in the super states of the USA, the EU, China and Japan, and activated in a political action that will revivify the Rooseveltian New Deal on a global scale. (Here, I’m anticipating.) This is rear guard action on the part of Professor Varoufakis, since the avant guard action of his Modest Proposal failed to persuade the economics cognoscenti and European leaders to adopt it as a remedy to the EU crisis.

The caption “There is no debt crisis” has the flair of a Maddison Avenue advertisement to attract the crowd to browse a flashy product, like Varoufakis’s lecture similarly in the Greek Community Centre in Australia few months ago, than any economic substance. But even as a unique proposal it has its pit falls. To claim that the faucet of international lending has all of a sudden being turned off for any other reason than the loss of credibility that debtors will no longer be able to pay their debts, is senescent economics in an advanced state. To chase vaingloriously, as Professor Varoufakis does in all his intellectual efforts, uniqueness, is a very precarious venture. But it seems that Varoufakis’s  Narcissistic temperament will once again tempt him to look into the lake of uniqueness and drown.

Union power: The Wings of an Eagle Attached to a Pigeon head

In view of the debilitating strikes that are continuously surging in Greece at this critical moment that the Samaras Government is attempting to pull Greece out of the crisis and put an end to the great sufferings of the people, I’m republishing this essay that was written twelve years ago.

By Con George-Kotzabasis 

The following essay was written on April 2000. It’s republished here on this blog as I think it’s still relevant as unions continue to have a strong grip on the Labor Party. And with a possible impending recession in the US that would inevitably effect the Australian economy, a Rudd victory in the coming election will bring the unions exercising their pernicious behind the times influence on the front benches of a Labor government. And hence exacerbate the peril of the economy of the country in conditions of recession. Lest we forget, it was in the UK in the mid-sixties under Labor governments that ‘trade-union-led “wage push” was the driving force behind inflation and subsequent breakdown of Keynesian policy’. Richard Kahn, one of the closest disciples of Keynes, when he was asked about this breakdown of Keynesian policy, he answered, ‘we never thought the leaders of the trade unions could behave so stupidly’. This stupidity was coined at the time in the term of stagflation, the proud creation of the unions. And this doltishness of the unions is alive and well in our times as it’s still fuelled by the false Marxist doctrine of class struggle. This is the danger that trade unions could inflict to the Australian economy under a Rudd government. As for Rudd’s “education revolution” by providing students with laptops, the mountain has brought forth a mouse. Australia is already among the top nations that provides computers to its students. But on the quintessence of education revolution which has to deal with its human capital, i.e., its teachers, who have to be selected on merit and ability and on their teaching methods, two burning issues on which the education unions will not budge, Rudd remains silent. He also claims that his government will be a government of “fresh ideas and new leadership”. But after his lustful embrace of me tooism of some major liberal policies during the electoral campaign, Rudd pellucidly reveals that his government will not be a government of “new leadership” but a government of mimicry. For John Howard there is still a good chance that the minders of Kevin Rudd, couple days before the real poll, will be telling him that the only bad news is that there is no good news. 

________________________________________

The ascendancy of the Labor Party to the treasury benches in Victoria, has churned in its wake a billow of waves of industrial action by an amalgam of union power that threatens to shipwreck the economic vibrancy of the state. The outcome of such fatuous action by the unions will be to induce a flight of investment capital from Victoria to other states, as current and would-be employers of this state would feel too insecure to invest in an environment of industrial turmoil. This is especially so when the Labor government and its leader Steve Bracks are perceived to be irresolute and too weak-kneed to control and rein in this outdated aggression and belligerence of the unions against employers.

The excessive and irrational demands of the unions for a thirty-six hour working week and a 24 percent increase in wages, which if they were successful in obtaining initially in the construction industry and their inevitable flow into some other industries, would have the ineluctable result of throwing thousands of workers among the ranks of the unemployed. This would be a tragic repetition of what happened in the metal industry in the late 80s as a result of excessive union claims, under the then Federal Secretary of the Metal Trades Union, George Campbell—a political stallion of the Left and presently a Labor Senator who is going to be replaced by another stalwart left-winger Doug Cameron who has indisputable credentials of being in the past a real “communist under the bed”—whom the Treasurer Paul Keating accused of having a necklace of 100,000 dismissed metal workers around his neck.

It’s obvious that the unions are afflicted by an innate inability to learn from their past sloppy errors. And like a recurring malady they are bound to contaminate the economy of the country with the calamitous mistakes of the past. The consequences of a repeated mistake, however, are more tragic than the consequences of an initial one and therefore carry a greater responsibility. An action that is performed for the first time is experimental in regard to its consequences, as no one, without the gifts of Tiresias, can predict or foresee whether its results will be benign or malign.  (Not that the unions could be excused for their first error. There was ample evidence of a global scale at the time, and enough forewarnings by eminent economists, that excessive union claims within the confines of global competition would inexorably lead to the flight of capital from regions these claims were impacting upon, and hence to unemployment.) But an action that is repeated deliberately and wantonly in spite of knowledge of its harmful effects in the past is intellectually malevolent and morally culpable.

Whose Culpability is Greater the Union’s or the Government’s?

Two questions therefore arise. Is the intelligence of unions commensurate with their powers? Or is it the case that union power is more like the wings of an eagle attached to a pigeon head? If the answer to the second question is affirmative, then one further question is posed, i.e., why then was the political wing of the Labor Party, which is now in government and having the expertise of knowing better about the dire economic effects of industrial unrest to the country nonetheless was unwilling to intervene promptly and decisively to block the irrational and pernicious claims of its industrial wing, which as a government of all Victorians—Premier Brack’s slogan—was committed in doing? Furthermore, why was the government’s immediate reaction to blame the Federal government’s industrial legislation for the ongoing industrial unrest instead of doing something that would have stifled the industrial dispute in its initial stages, for which it had prior knowledge, and using the subterfuge of an excuse that it was constrained by the legislation and could do nothing effective toward its resolution? Both the deputy leader of the government John Twaites and the Minister of Industrial Relations Monica Gould, used this feeble argument, when in fact with the return of the Premier from Davos  the latter forced the union involved in the dispute of the Yallourn power station to return back to work by imposing hefty fines upon its members, hence demonstrating that the government had the power to do something effective to resolve the dispute? Wasn’t it rather, the attempt to shift the blame to the federal legislation, a poor ruse, indeed, a camouflage, to cover its lack of will to intervene timely and decisively and derail the union from its “crashing” course? Yet, the belated action was effective, even if it was done halfheartedly. But what other alternative the government had, at the end of its honeymoon with the electorate, other than to send the stalled fire engines out to extinguish the full blown fire, if it was not to be seen, and impugned, in the electorates eyes, as politically effete and incompetent?

This is a basic characteristic, however, and an irreversible syndrome of Labor governments. To intervene in industrial disputes only when political necessity dictates, i.e., only when these disputes have reached a high point with the potential of harming the economy, and hence would be politically damaging. For organizational and ideological reasons Labor governments are not prone to intervene in the wrangles of their comrade-in-arms with employers, but do so only as a last resort.

This general inaction of Labor governments in industrial disputes is a result first, of a common ideology shared with the unions whose core emanates from the principles of socialism, and secondly, from its constitutional organizational structures that tie the political and industrial wings of the Party into a powerful body and into a compact of consensus that determines the functions of each wing. In conference after conference of the Party, the common and often repeated refrain is that Labor occupies the treasury benches only for the purpose of implementing policies which are discussed and ratified in state and federal conferences in whose conception the unions and its sundry representatives, mainly academics, have a major input. The union’s dominance is illustrated not only in the generation and formation of policies (Its architects generally are academics from the Left, whose intellectual frustration is at a boiling point because their ideas and policies cannot pass muster among other academic luminaries, but who do find a paradisiacal outlet for their “time-stopped” ideas, as well as an adulatory audience among their comrades in the unions, who normally cannot separate the wheat from the chaff of these ideas), but also on the conference floor as sixty percent of its delegates must be union representatives according to the Party’s constitution.

The larger and, especially, the more militant unions have such a firm grip in the election of delegates to Party forums, that even ministers and would-be premiers often cannot be elected to these meetings. Many ministers , therefore, who are unable to be elected to conferences on their own authority, resort to “begging” less militant unions to be placed in their delegations as constitutionally the unions have the authority to do so. Hence only as supplicants to the unions are ministers able to participate in conferences. For example, Jim Kennan, the Attorney General in the Cain Government, for many years was a delegate of the Clothing Trades Union. Likewise too, Steven Bracks, the current premier, was a delegate of the same union, who had taken Kennan’s place with the latter’s departure from politics. Other ministers who are not as fortunate to be union delegates attend conferences as visitors and observers without the right to move, or vote for, resolutions of the conference. Hence, ministers and many of their advisers are left out from the formulation and ratification of the Party’s policies. Such is the power and influence of unions in the organizational procedures of the Party, that often they “lock-out” important ministers who are not close to their ideological positions, from the highest policymaking bodies of the Party.

Moreover, the grip of the unions is extended to the pre-selection procedures of the candidates of the Party as well as in the choosing and changes of the parliamentary leadership, both in the state and federal domains. Who can forget for instance the telephone call that Paul Keating made, during his challenge of Bob Hawke, to Wally Curren, secretary of the Meat Workers Union asking him for his support in the coming challenge to Hawke for the leadership of the government? And Curren obliging, by forcing those MP’s from Victoria who owed their position in parliament to his patronage, to vote for Keating? This irritated Bob Hawke so much asking who Wally Curren was pretending thus ironically that he himself who had ousted and replaced Bill Hayden with union support was not cognizant of the influence trade union leaders have in pre-selections. As for the branches of the Party they play a superficial role in the pre-selection of candidates as they too in turn are influenced in their decisions by the organizational power of the unions.

Labor Politicians at the Mercy of Unions

Being therefore at the mercy of unions for their parliamentary positions and for the buttering of their bread, labor politicians, with some exceptions, are cast as toadies of the unions. Only the Federal Executive of the Party can intervene can intervene and save a ministerial or a backbencher’s scalp from the tomahawk of the unions. This occurred when John Halpenny, the Secretary of the Trades Hall Council in Victoria. were placed in the number one position on the senate ticket, with massive union support, in the 1988 federal election, relegating the leader of the Senate, John Button, to the second position. And in the election following the one in 1988, some of the left-wing unions were deliberating whether or not to place Gareth Evans, the Minister of Foreign Affairs, in the second position on the senate ticket. Only some sober heads at the last moment saved the glitterati Minister from the rusty and blood-stained tomahawk of the unions and from posthumous obloquy. (But the power of the Federal Executive is limited, as is illustrated in the present coming election of 2007 in the seat of Coreo, where the current seating member, Gavin O’Connor, is replaced by an assistant secretary of the ACTU (Australian Council of Trade Unions), against the wishes of the Executive.)

It’s for all the above reasons, this congeniality of interests between Labor governments and unions that prevents the former from acting timely and decisively in industrial disputes. And even when they do as a last resort they cannot be impartial in their involvement. The Brack government being captive to the unions has to cater to the latter’s voracious appetite on a number of issues: On the restoration of common law damages for injured workers, which has already being done by passing the relevant legislation in parliament, on the restitution of industrial policy back to the State Government, so the latter can abolish the industrial contracts of the Federal Government, whose aim is to eliminate union dominance in industry negotiations, and to replace them with collective bargaining, hence restoring union coercion and thuggery during negotiations with employers. On these issues and on many others, the Labor government is hamstrung by union power. Whether the former will be able to deliver on these issues will depend on the political climate of the day and on the degree of resonance such a delivery will have upon the electorate.

Steve Brack’s therefore, like a trapeze artist, has to walk on a tight rope whose one end is held by the unions and the other by the community, and perform his balancing act. While gratifying the union claims, with potentially destructive consequences to the economy of the State, at the same time he has to keep its economic robustness, inherited from his liberal predecessor, Jeff Kennet, intact, hence erasing any fears or consternations the community might have about the new industrial course of his government.

It’s with this purpose in mind to win the confidence of Victorians and of some naïve employers that Steve Bracks lately set up a new stage with an old play. His government lacking any originality or lateral thinking in policymaking ransacked the ram shackled spider web storehouse of past Labor policies to bring out the nostrums of “old age”. The summit of “Growing Victoria Together”, chaired by that scion of Labor power, Bob Hawke, was such a nostrum. Imbibing a strong dose of self-deception, Bracks was hopeful that by attracting some old and new celebrities from the industrial club and from business to the summit the public would be hoodwinked and believe that something substantial would come from the coupling of these celebrities. What in fact happened, was that each spokesperson of this divided house of unions and employers, voiced plaintively their complaints and grievances against each other with the result that they were not able to reach an agreement as to how and by what prudent set of actions, they would carry out the growth of Victoria. The rhetorical statement at the end of the summit, spun by the golden threads of the cerebral and literary qualities of Bob Hawke and his wife, respectively, could hardly hide the practical hollowness of the summit. What the latter did was to set up a number of committees to look at a number of issues.  Such as education and training, investment in training, industrial relations, health and wellbeing indicators to measure performance in meeting social goals, infrastructure, the impact of payroll tax on job and wealth creation , and the audit of government services in country communities. It also set up an advisory body to strengthen community input, oblivious of the fact, that while the latter is important it is not a substitute for political leadership. Forgetful also of the fact that the achievement of this laudable “prospectus”, is absolutely dependent on calm industrial relations. And therefore cannot be achieved while the agitated firebrand steam of the unions continues unabated.

Hence, the mountain (the summit) has brought forth a mouse which is at the mercy of the cat’s paws, the unions. Furthermore, as so many of the issues are to be shoved to committees, whose members are deeply divided on the central issue of industrial relations, they are inevitably going to be dealt with in a banal hackneyed manner, since their members will be unable to reach a mutual agreement on the key issue of industrial relations. Hence the summit’s “debris-deliberations” will be proven to be a barren exercise.

The Bracks’ government by its farcical and enervating stand toward the unions and by its populist stand toward the public threatens to throw Victoria into the doldrums as well as empty the coffers of the treasury. This is not a government of substance but a government of images—the images of a dead past. But funeral rites for dead images can be very expensive to the general community, both in terms of tax increases and unemployment.

I rest on my oars: your turn now

A Functional Government is a Prerequisite for Handling the Crisis in Greece

I’m republishing the following short piece that was written on June 20, 2012. As events have shown since then  it was the unity of the tripartite government of New Democracy, Pasok, and the Democratic Left, that was set-up post-election, in regard to the policies to be followed with its negotiations with the European Union that has kept Greece within the union and has given the country a new opportunity to overcome the crisis. There are favorable signs that Greece under the strong and resilient leadership of Antonis Samaras the miracle of an economically resurgent Greece is about to unfold.  

By Con George-Kotzabasis

The present position of Evangelos Venizelos the leader of Pasok that the government to be formed on June 18 must include Syriza in a coalition of other parties so that it can presumably deal more effectively with European leaders in regard to the necessary modifications of the Second Memorandum, is to repeat the stupendous error of the Democratic Left, under the pusillanimous leadership of Fotis Kouvelis, when it too had placed the same pre-condition after the May 6 election. The present profound crisis of Greece needs a functional government with united policies and realistic and decisive leadership that can pull the country out of the crisis and not a government of factions whose deep differences of how to handle the negotiations with the European Union would inevitably lead to intestine fights and to the collapse of such government that would seriously exacerbate the crisis. Thus the pleading for a wider coalition as Venizelos proposes will result with mathematical precision to a dysfunctional government irretrievably incapable of handling the crisis.

The Gravitational Force that Pulled European Nations into a Black Hole

Government intervention always wills the good and works the bad.

By Con George-Kotzabasis

The European Union’s sovereign debt crisis was neither an act of fate nor an act of a free self-dependent man but an act of deluded ideology whose sails were blown by the long-lasting winds of government dirigisme, i.e., intervention, and welfare dependency. Once again it was the work, the social engineering, of the bien pensants in the form of a state directory of planning that would put a floor of security for the masses and protect them from falling into abject economic privation that was always, according to their thinking, the omnipresent and inevitable result of the unjust, harsh, and unequal regime of the capitalist competitive free market. The trouble was that this floor was made out of straw and at the first jump of an economic crisis–whose seeds were planted by government intervention,  loose monetary policy and low interest rates–would open a gaping hole through which this security would disappear and drown in a massive pool of unemployment and poverty.

The Eurozone’s one dimensional foundation of monetary union without banking and fiscal union could not sustain the European edifice in the long run with the differentiating regime of taxes, social benefits, and pensions that existed among its constituent states. The proliferation and prodigality of unsustainable Entitlement Economies, which have been the characteristics of the welfare states of Europe especially in the south, could not have been continued without cracking the economic underpinnings of the Eurozone. Also, the European Central Bank’s enabling of low risk premiums on interest rates of government debt, encouraged Greece, Portugal, Spain, Italy, and Ireland to go on an orgy of borrowing and overspending. The inevitable outcome was a stampede of budget deficits that were unsustainable and the eventual loss of all credibility in the financial markets that the afflicted States would be able to pay back their debts and thus the shutting out of the latter from the global financial lending pool.

Since no private person would hazard to lend money to states lassoed in sovereign debt the only alternative left was for the richest countries in the Eurozone, such as Germany, to become the lenders and continue to finance the former for their economic survival. But such help would be given under very severe terms encapsulated in strict Memoranda to the receiving countries with the stipulation that the latter would adopt and implement stringent austerity measures that would decrease substantially government expenditure, would restructure and reform their economies making them more competitive, and privatizing public enterprises, whose inefficiency and lack of a diligent working ethos can only be sustained by a continuous expensive staple of government subsidies.

These austerity measures, however, whose formulators have been the European Commission, the European Central Bank, and the International Monetary Fund, the so called Troika, are forcefully rejected by the people of those countries who for decades have been inured to the social and economic comforts and benefits engendered by the reckless spending of their governments, and are refusing to accept any cuts to these benefits even when some are aware that the latter can no longer be provided since the governments’ coffers are empty and the convenience of funding these benefits by borrowing, as they have done in the past, is no longer available due to their nation’s sovereign debt. Moreover, these austerity measures initially had not being complemented with policies of economic development and thus led to the worsening of the economic conditions of those countries that adopted them, such as Greece, leading to unprecedented massive unemployment by the closure of large and small business enterprises and to the smashing of the middle class which is the cornerstone of free societies.

This situation is dangerously engendering the fragmentation of social cohesion in those countries and giving rise to political parties of the extreme right and left, coming out of the foam of waves of violent demonstrations that imminently threaten democracy. A latest illustration of this danger are the attacks by petrol bombs and other incendiary devices by hooded youths of anarchists and extreme leftists in Greece against the homes of outspoken journalists, offices of the governing coalition of New Democracy, Pasok, and the Democratic Left, and the burning of Bank’s ATMs. And of particular significance are the attacks on journalists, which are a blatant violation of free speech and a sinister attempt to intimidate them from expressing their opinion about events and criticizing politicians of Syriza, the official opposition, of whom obviously the fire carrying mobs are its ardent supporters.

This will be the tragic legacy of European big government and its ill-considered, indeed, destructive intervention in the processes of the free market that for at least two centuries have delivered prosperity and an unprecedented increase in the standard of living of the masses; as the socialist politicians from Francois Mitterand to Jaques Delors–the architects and enforcers of the European Monetary Union that forced Germany to succumb and pay the price of the unity of west and east Germany as demanded by France–and their present disciples of  etatisme are in the process of killing the goose that laid the golden egg, i.e., the unimpeded free market, and by doing so unconsciously and unwillingly are generating and  unleashing the brutal forces of fascism and leftist directorates of totalitarianism on the landscape of Europe.

To avoid this slide to the hell of totalitarianism only the rise of statesmen who “can act beneath heaven as if they were placed above it” is consummated. The fiscal and balance of payments crisis can only be remedied by substantial cuts in government spending and the euthanasia of big government, and by the privatization of debt ridden public enterprises–that are the last strongholds of obtuse and doctrinaire unions– and by the freeing of private enterprise to pursue profit by competition and entrepreneurial creativity and dynamism, respectively. These ‘bitter’ remedies can only be administered by statesmen of the calibre of Lee Kuan Yew and Antonis Samaras. The latter, indeed, might not only be the progenitor of the Greek Renaissance but also the paradigmatic leader of other European politicians to imitate for their own European Renaissance. The Newtonian apple that will stop the European ‘discord’ that currently threatens the demise of the EU will fall to the gravitational force of such statesmanship.

Hic Rhodus hic salta