Hard Landing

Duly Noted

An era of pleasing self-deception is ending.   

An economic collapse, to be followed by a political one, is threatening Europe. The global economy and your share of it might not remain immune. The problem is self-generated. Thereby, the entire, economically industrialized and politically democratic, world’s economic fundamentals are endangered. The trigger is seemingly negligible. Greece is only a small apple in the large basket. Its rot, however, is due to the interrelationships created by the “political class” and regardless of denials, a process that affects all. The crisis managers and the means of those in charge of repairs are dubious quality. Adding more borrowed apples will hardly work. Impolite and unkind observations follow.

1. The Greeks created a coalition government. The purpose is not to rectify but to please the EU. The movers are unqualified to overcome the vicissitudes that they were elected to lay to rest. That is because earlier, they have subscribed to the approach that had caused the crisis. Governing continues to be associated with making presents. The error is not new: those elected to cure ailments are the ones that have created the mess that demands attention. 

Do not conclude that this is only about the Greeks. Their case is only a specific illustration of what is widespread. We need to examine the matter and apply the lessons where they fit. Irreverently it must be added that a “fit” is easily discovered locally wherever you read this. The breakdown of our customary politics as a system is propelled by the inclination of voters to disregard crucial facts. The arsonists are elected to staff the fire fighting brigades in charge of damage control.


2. The openly socialists (Pasok), to moderate the opposition on their left, will implement pasteurized components of what the far left advocates. Included is the “Democratic Left” headed by an ex- “Eurocommunist” in the new coalition. Leftists participate in the fire brigade to broaden the government’s base. This inclusion implies that a genuine will to reform is weak. An analogy arises. It has to do with a Madame in charge of a house advertised as a nunnery. What we really get is an attempt to wipe-off fingerprints and to make, by magic, the visible signs of the burning house invisible. 

The co-governing Left will be an excuse to extort concessions from left-leaning “Europe”. On the surface, Athens asks for “time” to implement long-due reforms. This delay is requested by invoking “solidarity” – loyally not seeing, not hearing, and, above all, not mentioning reality. Any postponement will be used to create new permanencies. This is “lawful”. A French proverb expresses the matter. According to its wisdom, “nothing is more permanent than temporary measures are”. The provisional taxes that were made palatable as such, and which you still pay, illustrate the matter in 3-D. Conclusion: nothing is as durable as a delay sold as “temporary”.


3. To the extent that, as economically commanded, austerity is imposed, society will refuse to bear the burden. “Government by riot” is likely to follow. Besides Greece, Italy, Spain also others are included. The fact-defying election of Hollande confirms and upgrades the allegation. A complicating problem derived from the antecedents is that, regardless of the nominal program of previously governing parties, all participated in creating dangerous precedents and unmanageable expectations.

What could be colloquially described as “bad habits” originate from the illusion that politics can override economics. Elites that were more eager to be elected than to protect the common weal have exploited it. Such chimeras are shared in numerous countries. Greece is only the place at which the nail pierced the balled tire’s tread.

For more than a generation, leaders have assured the led –more properly the “herded”- that rising expectations of comfort coupled to lessening inputs, are not mutually exclusive goals. Seemingly, political support could be endlessly rewarded as the umbilical cord between input and output was overlooked. Anyhow, “nothing could happen” to those whose welfare had the guarantee of a fortune-allocating state. In some parts of the EU and its €-zone, the assumed backing made promises even more plausible. After all, even now we hear that a break up is “impossible”. Therefore, the government guaranteed governing-by-grants and the national government behind it, felt sponsored by the cardinal members of the EU. These latter naturally trusted the Union and a forgiving archangel. Now the bills for the deception are presented. The era of the endless protective covers extended by deficit plagued insulating layers is threadbare. However, after this collective experience, governments find it hard to stop handouts and to ask for the needed sacrifices whose very idea has become inconceivable. 

Thus, with the connivance of politicians, a crisis has been created that cannot be cured with the band-aid of usual politics. What forces might become the beneficiaries of the eventual collapse is worrisome but unclear.


4. Europe is led by a governing class that has staked its political life on the EU, on centralization and the €. To survive, the elites try to save the semblance of their project’s soundness. Therefore, they will make the concessions to Greek demands that they have already rejected "categorically". With that, the naked emperor will gain time and, until discovered, keep his dignity. Whether “more time” will be used as an opportunity is in doubt. Much climbing down from tall flag poles will be needed by the caste whose power rests on making grants. The Germans, led by guilt of the grandfathers, will be asked to hold the hot potato. Here, again, reality will assert itself. Let us assume that a German politician emerges that can survive the attempt to rescue Europe by impoverishing Germans. Those that hope that this is possible overlook a remaining limitation. Earlier, German military might has failed to suppress Europe. Today, the country’s economic means do not suffice to bail out Europe. 


5. Now, proceed and formulate your conclusions. Do so in a hurry; the situation is deteriorating and each day brings developments that had been unimaginable the day before.