As Greece voted, in essence, to leave the Euro, it behooves us to really take a look at who is to blame for the crisis.
Is it the profligate Greeks that borrowed way more than they could ever pay back in order to finance a lazy Mediterranean lifestyle and in hindsight should have never been admitted to the Euro to begin with? Or is it the “predatory lender” Germans who lent them more money than they ever should have? After all, both parties were acting in their self interest—Greeks got to continue their sun-kissed lifestyle, complete with flexible work arrangements, generous leave schemes and early retirement. Germans saw a sweet rate of return on their loans. Who is at fault? With most of these issues, where you stand depends on where you sit.
As a fiscally prudent German, rage against check-bouncing Greeks is palpable. After all, Greece signed on the line that was dotted, couldn’t pay the bills, and now scoffs at the austerity measures attached as conditions to the numerous bailouts it is receiving to keep it afloat. Ingrates. But for the sake of argument, let’s look at this through the lens of folks like Paul Krugman and the rest of the Keynesian fantasy brigade.
They argue that Greece correctly voted no on the bailout conditions and were ready to leave the Euro (essentially skip out on the check) because the austerity measures previously imposed by the troika of creditors, which include the International Monetary Fund (IMF), European Central Bank (ECB), and European Commission, caused the very economic slide that is making further debt service impossible. They would suggest opening the lending spigot further, citing many charts, numbers, and graphs that say that boosting demand will goose the Greek economy and allow for debt service “down the road” once the economy is humming again. Add in a politically attractive message (your mess is not your fault) and Krugman’s shiny Nobel prize (the value of which is greatly diminished in my eyes since it was conferred on President Obama for waking up in the morning and an entire continent because harmony) and you have the Greek position.
Except this has been going on for 5 years. We’re down the road and it isn’t better. Ask Paul Krugman if it were his money, would he continue to personally lend it to Greek Prime Minister Tsipras at this point? No, to truly get at the roots of this problem, look no further than the very alphabet soup of international government agencies trotted out to “manage” things in the first place. ECB, IMF, European Financial Stability Facility (EFSF), European Stability Mechanism (ESM) are all cleverly designed blame-shifting organizations that provide sufficient veneer of expertise and control that allow individuals to divest themselves of personal responsibility and make foolhardy decisions that the rest of us have to clean up.
While we’re at it, let’s look at Greece’s government. No one pays their taxes because they are too high. Try collecting receipts in a black market economy. No one follows the rules because they are too onerous. Just pay off the rent-seeking government official. Government intervention in the Greek economy created this mess over time just as international government intervention in the Greek economy prolonged it. And what did the Greek electorate do? Elected Socialist Syriza to inject itself even further into the economy expecting a different result. The irony that Greece is the birthplace of the modern tragedy/comedy is not lost on the author.
Bottom line, no amount of official oversight and government agencies will ever eliminate what is in essence an individual responsibility and subsequent decision. The politician individually makes a conscious choice to vote yes on free stuff for his constituency. The beneficiary of that stuff individually makes the choice to vote for the person promising the world. The German lender at some point individually made the choice to offer the loan to the Greek who did not understand math. The Greek made the individual choice to sign on the dotted line. The bigger a bureaucracy grows, the more responsibility is diffused throughout, resulting in a system in which no individual is at fault and fingers can be pointed every which way but inward. Remember though, if you are not responsible, you are by definition irresponsible.
My point is toward those that would insist on layers of government and piles of regulations in order to save people from themselves. Please stop helping, you are making it worse.
Greg Archetto is a former State Department and Defense Department official who specializes in security cooperation issues in the Middle East. He has also spent time on Capitol Hill and is now an independent consultant with One World Consortium LLC. You can find more of his writings at www.thereasonablerepublican.com.