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Debt Crises: What a sorry spectacle to watch Greeks rioting in the streets in reaction to austerity measures. As if tantrums can change reality. It's Exhibit A of how socialism infantilizes citizens. The only cure is free markets.
As Greece's legislature heads for a vote Wednesday to cut the size of its government by $40 billion in exchange for the last $17 billion of a $156 billion International Monetary Fund bailout on July 3, the world's television screens are flooded with images of young "indignantes" calling a riotous 48 hour-strike in Athens.
Steeped in socialism for decades, these Greeks see no connection between their economic circumstance and the expanded state that is at the root of their troubles.
The IMF bailout — and a new scheme to extend maturities of bonds to 30 years — will in fact keep the current system in place without providing new avenues for growth. That in turn will merely delay another crash if there's no move toward changing Greece's system.
Like any socialized society on the rocks, Greece needs to reestablish the link between effort and reward. That's the observation of one of Chile's great market reformers, Jose Pinera, who has said that's the key to ending unsustainable welfare states and enacting free market systems that can stand on their own.
With no such reforms in sight, and only an austerity program ahead, it's no surprise Greece's protesters blame bankers, foreigners, the IMF and of course Americans — some even accusing their president, George Papandreou, of being a U.S. embassy stooge.
As childish as these acts are, they show how society is infantilized by socialism, unable to see how its spending affects future prospects.
When government makes every decision for its citizens, it's no wonder citizens forget where money comes from and can no longer make informed connections between what they earn, what they save and what they can legitimately spend.
Maybe it started when Greece joined the European Union and politicians concluded they had a sugar-daddy with endless subsidies to propel them along.
But inside Greece, the connection between work and reward was dissolved too. With the state taking over more than half the labor market, workers used political pressure to get paid more than they earned.
Pensions were also politicized, with the best-connected workers taking home enormous pensions at age 45 while others got less.
With such disconnects, it's no wonder many Greeks would rather turn down the IMF bailout and, wittingly or not, let the whole system crash. Hitting rock bottom would at least force the Greeks to wake up to economic reality. The IMF bailout will only put off that day of reckoning.
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Posted By: Techsleuth(5) on 6/29/2011 | 3:22 AM ET
I have a question for the author. How would you feel about taking a second round of salary reductions plus tax increases to reward foreign bankers who took calculated risks that were wrong? Furthermore many of the protestors are young people who see no future. Never forget that even our great nation, the USA, started with public revolt over taxes to a foreign government that were perceived as unfair by those who had no input into their implementation.
Posted By: pasmurf(15) on 6/28/2011 | 10:55 PM ET
The high tax rates the EU and IMF are wanting to impose are an issue as well as 1.43 per dollar Euro and Trichet may get a stronger Euro with another rate hike. No wonder nobody wants to go to Greece due to the Euro.
Posted By: Runion(375) on 6/28/2011 | 10:51 PM ET
Free Market in Greece! Come on, when's the last time you bought anything made in Greece? They don't mfg anything, # 1 industry is tourism, followed by agriculture and fishin, Over half the work force works for the govt, they get about 2 months off for holiday, they are smaller than the state of Illinois both in land and population, they really don't amount to squat in the grand scheme of things, the whole issue is over blown, the news media needs to find the next gloom and doom sto
Posted By: Leonardo Montenegro(5) on 6/28/2011 | 9:30 PM ET
You really blame socialisism when the country is in bankrupcy because of speculative economic agreements, backfired at investers? it is the same thing that is happening to USA, but you won't believe it right? Here, in Chile, we are having lots of riots over excesive speculation in basic rights of people, and we are nowhere safe from what happened to greek. I don't think there is actually a stable (and "happy") country, on that terms. It will be stupid to give greek authoritie
Posted By: SanfordA(610) on 6/28/2011 | 8:45 PM ET
We need to make the public very aware of the terrible failures the IMF has had over the many years of operation. We need to discuss that high taxes and austerity do not work, but only freedom. We have to realize that the IMF is our enemy.
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