The US as the new Greece.

datePosted on 12:33, October 23rd, 2010 by Pablo

Watching the lead up to what will be a major Republican and Tea Party comeback in the upcoming US midterm elections, and having spent an earlier part of the year in Greece, I cannot but help but be struck by the parallels between the two countries. This may seem crazy, but sometimes what is obvious is not necessarily apparent.

The US and Greece are saddled with immense debt, most of it public. Both have extremely large state bureacracies that consume an inordinate amount of the tax base. Both have lived, in their personal and public consumption, way beyond their means over the last two decades, riding the wave of financial sector excess and lving off real estate and other speculative bubbles that did not, in fact, significantly contribute to national productive rates.

In each case immediate past centre-right governments contributed to the false sense of security by allowing the financial sector to operate with considerable degrees of autonomy and lack of oversight, reduced taxes for the wealthiest sectors of the population and corporations, and spent money well in excess of state revenues. In Greece state expenditures went into a bloated welfare system that was designed to prop up living standards that are seen as a birthright of all Greeks; in the US, the excess state spending went into war. In both instances the center-right governments increased state spending and the public deficits that accompanied them. In both cases they were turned out at the polls in the past two years.

Center-left governments replaced the discredited right. They inherited unsustainable deficits that will take years to redress and embarked on economic reform programs that were designed to cut the public deficit and increase economic efficiency over the long term. In Greece this meant slashing the public workforce, decreasing public salaries and welfare benefits while offering a package of tax incentives to small and medium business so that they could innovate, expand and thereby take up the slack produced by reductions in the public workforce.

In the US the economic stimulus program was designed to prop up and revitalise at-risk major industries (the automobile and financial sectors in particular) while providing tax relief for 95 percent of the working population. A national health program was instituted that, even though watered down and more pro-business than pro-consumer and nowhere close to socialised medicine,  provides for minimum health coverage for the majority of the population. Selective regulation on the financial sector was legislated, although this worked more on the margins of the system rather than at its core. Military spending was cut at the corners, and in a number of cases companies that received financial bail-out packages have begun to re-pay their debts.  In effect, although in the US public spending increased over the short term with the stimulus and health care packages, the design is oriented towards lowering the overall public spending bill within five to ten years while maintaining a  disproportionate emphasis on “defense.” That is the American way.

In both instances some or most of the center-right opposition in the legislature supported the economic reform packages of the government, but backtracked when confronted by public reaction. In both cases that backtracking led them to move towards the zealot wing of their popular base. That has consequences.

The reason? In each case there was an immediate, reflexive and largely unthinking  public backlash against the reform measures. Following Greek protest tradition, often violent strikes and demonstrations have engulfed the country from the moment austerity measures were announced. Although the protests are led by unions and other elements of the agitational Left, the real beneficiaries of the crisis are the hard Right, who have seen an opportunity to engage in nationalist-populist demagogery in which “foreign interests,’ illegal migrants, “Communists” and a host of other suspected culprits are blamed for the country’s woes.

In the US attempts at reform have been met by a wave of right wing backlash among the mostly white middle classes, who also blame illegal migrants, “Socialists” and other purported “progressives” as well as atheistic liberal homosexual-enabling secular humanists for the decline of Empire. At public forums many vented their anger by calling for a “revolution” or at least the ovethrow of the Washington elite. Some of them turned up armed to make their point.  They have a movement not unlike the Greek ultra-nationalists. It is called the Tea Party.

What is striking about both hard right wing resurgences is that they stand to gain the most from upcoming elections simply by blaming the governing center left administrations without offering a plausible solution to the problems of the day and near future. Both want to return to something long gone. Both want lower, not more taxes, apparently not understanding that in the case of Greece that national pasttimes of tax avoidance, island vacation homes and reliance on the state for pensions, social security and universal health care are contradictory and incompatible. In the US the pejoratively labeled “Tea Baggers” apparently have not connected the dots between maintaining a massive military apparatus that consumes 6 percent of GDP, is fighting two wars of occupation and at least a dozen small irregular conflicts simultaneously, has a presence in 150 countries and deploys three carrier task forces comprised of 7 ships and 75 aircraft at sea at any one time (no other country can deploy even one), and the need for a substantial tax base. Nor can they see that the party that they support is the one that has the most extensive ties to the Wall Street giants that played loose with their money in the game of financial roulette known as the sub-prime lending market that has now come a cropper. Instead they rail against welfare queens and “illegals” stealing the jobs most Americans disdain.

In both countries the conscious anti-intellectualism of the Right is manifest.  They want simple solutions to complex problems, they want the solutions to benefit them without requiring any sacrifice, and they want it all to happen yesterday. Reflexively ignorant political champions lead the charge and rally the masses in each case.

Most of all, it is historical myopia, an overdeveloped sense of entitlement, the lack of acceptance of responsibility and the shifting of blame that ties the US and Greek public together in their rightwards march. Both cultures prefer to forget the immediate past that led to these tough times and instead focus on a mythical past in which the Nation was strong, proud and united in its demographic homogeneity and cultural mores. Both cultures believe that they are special and especially deserving because fortuitous circumstance determined that they were born Greek or American. Neither culture embraces the notion of individual and collective responsibility as a majority ethos anymore. Instead, the common approach is to blame others for individual failure and collective misfortune.  Both right wing movements have little to offer than hatred for central government elites, current reform policy, bankers of “dubious” persuasion and all the “others” who instigated the entire mess. Mutatis mutandis, there are faint echoes of interwar Europe in all of this.

That may be a basis for victory in any contemporary elections given the circumstances, but it is certainly no blueprint for national regeneration. History has repeatedly shown that national-populist lurches to the right produce more anomie and retrogression than progress. For the latter to occur, people will have to first take individual and collective responsibility about their role in the process of decline. Then they will have to accept the costs of redressing that decline which means that they will need to assume the burden of altered lifestyles no longer easily bought on the back of cheap credit, deficit spending and overinflated notions of national grandeur. They will then have to grin and bear it during the tough times so that their children and grandchildren will prosper under different conditions.

None of that is going to happen anytime soon.

11 Responses to “The US as the new Greece.”

  1. Wayward4now on October 23rd, 2010 at 15:25

    Now that was a brilliant piece! You hit it squarely on the head. Thank you. A Yank in Virginia. Ric

  2. Robin Turner on October 24th, 2010 at 00:24

    Of course in Britain when we hear “Tea Party”, we don’t think “Boston”, we think “Mad Hatter”.

  3. IHStewart on October 24th, 2010 at 11:53

    Brlliant blog. You just nailed. One thing that has occured to me is the candidates that the Tea Party has put up are not that impressive. That might well prove to be the Republican achillies heal and something the Democtats can exploit moving forward. I doubt that the Republican party will be able to impose disipline on them.

  4. DaveW on October 24th, 2010 at 14:14

    I think the republican party not being able to impose discipline on them is one of the main reasons the teabagers want them in (other main reason appears to be wanting barking mad policies)???

  5. Andrew W on October 24th, 2010 at 18:42

    And in countries that had big spending left of center government up until the financial crisis hit that now have right of center governments, exactly the same blame game is being played with exactly the same type of austerity packages being imposed, with the then government – now opposition – condemning the current government policies.

    All incredibly tedious because of its predictability.

  6. IHStewart on October 25th, 2010 at 02:24

    @Dave W I think they are Republicans when it comes to the ticket they seem to be a party with in a party.

    @Andrew if you were aiming at me yes I agree that does seem to be the pattern. But I remember the Triumph Of The Will and see to many similarities to be comfortable about this being just left v. right

  7. Lance on October 25th, 2010 at 12:43

    Brilliant piece Pablo.

    With so much time and energy spent playing the blame game, we see very little in the way of fresh ideas and progressive policy – this is not just limited to Greece and the U.S. it strikes closer to home also.

    Good luck with your new ventures and welcome back to the Waitaks!

  8. StephenR on October 27th, 2010 at 13:34

    Re: spending cuts from the Tea Party lot – I listened to a New Yorker or Economist podcast where one speaker speculated that Tea Party types did not want to do much with Medicare and Medicaid (both of which consume a huge chuck of the budget) as so many of them make use of those programmes. They didn’t mention any data but I suppose it’s predicated on the perception of those followers being on the older side of things.

  9. DeepRed on October 27th, 2010 at 20:59

    Funny how those Tea Baggers who are normally tax tightwads don’t want the same standards applied to themselves, whether it’s gold-plated highways to nowhere or war toys. Welcome to Socialism for the Rich (TM).

    It’s not unlike 3rd-world dictators who build shiny palaces for themselves while the proles starve.

  10. StephenR on October 28th, 2010 at 13:24

    Incidentally an interesting article from Foreign Policy on how the Tea Party is seen from the viewpoint of different countries:
    http://www.foreignpolicy.com/articles/2010/10/26/how_the_world_sees_the_tea_party?page=full

    China sees them as eventually leading to U.S.-China conflict, for example.

  11. Phil Sage (sagenz) on October 29th, 2010 at 00:41

    Pablo – Late to this party. It is indeed an excellent comparison between Greece and US. Obviously I disagree with your lumping the blame for the current mess on the centre right but we both know where we stand on that.

    What is interesting to me is how so many people simply misunderstand the Tea Bag movement. Palin is not its leader but she is making great money riding its wave.

    The Republicans under Bush failed to exercise fiscal discipline. The Democrats have doubled up rather than providing a contrast. If Obama had stopped the stupidity of the great Keynsian economic stimulus program US consumers and investors would not be fearful of the coming reality check in the US and would naturally be opening their wallets.

    In the UK David Cameron’s coalition is providing an excellent example of the kind of policy that would simply make the Tea Party disappear. Honest fiscal discipline that is not targeted at rich or poor but tries to share the discipline across all sectors from the high earners stuck with 50% tax to the welfare claimants being tipped out of a life of disincentive based indolence where it made more sense not to have a job than receiving minimum wage.

    I find it absolutely incredible that US policy makers have learned absolutely NOTHING from the bust after a decade of uncontrolled credit based spending. The answer is apparently – more spending. Seemingly America intends to inflate its way out of its Treasury debts to China and other savers. It needs a does of UK coalition policy.

    The Tea bag movement is composed of people who understand this at a visceral level. You cannot keep on spending and spending and spending. There is a consequence and American entrepreneurial culture needs to be reclaimed from its leaders. Rather than address that it is simpler to focus on the foibles of a few and dismiss the whole as being crazies. I would count myself one if I were American but am currently happy to be living in the UK where sense has prevailed.

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