The Peloponnesian Blues, Revisited

The Third Peloponnesian War continues, though this time it’s an economic war, and the enemy against which Athens struggles is not Sparta, but the Franco-German alliance (isn’t it quaint that the 21^st century begins with a de-facto alliance between Germany and France? I guess that’s progress.)  And right now the Greeks are struggling just to stay on their knees.  Wait, you say, Germany and France are partners with Greece, and their friends.  Well they are performing a great masquerade either as enemies or as two of the three stooges performing first aid on the third.

The January 11^th Washington Post reports that in the year since Germany and France united to strong-arm Greece about finance, the Greek unemployment rate has leaped 5.5% to 18.8%; homelessness, crime, suicide and drug use rates have risen; consumer spending has plunged; and the Greek doctors’ union has characterized the extreme shortage of medical supplies as a humanitarian crisis.  It’s worth noting that a 20% unemployment rate is the historical red line for when governments start to fall and democracies crumble.  The Post more modestly describes the situation as “both a dizzying economic plummet and a social crisis.”  The two stooges meanwhile continue their first aid by pressuring the Greeks for more budget cuts, more tax increases and for forcing bond holders to restructure the Greek national debt.  So Greece is singing the Peloponnesian Blues, only louder, as more Greeks are talking withdrawal from the Euro, and the Blues are spreading across southern Europe.

We may be witnessing here a last great death convulsion of the rational market paradigm, for the rational market economists have no workable solution, but probably not.  They will continue to bleed the patient until he is either cured or dead, for rational market economics offers no other alternatives.  Bleeding as a cure, by the way, was how the doctors of George Washington managed to make him die because of a case of pleurisy.  Paradigm changes, though, are slow in coming, so the bleeding goes on.

Meanwhile, the really rational among us are saying, “Wait a minute, bleeding an economy to death, and its people and culture along with it, in order to cure it, makes no sense.  There has to be a better way.”  Which brings us back to the United States.

The bleeders have been busily at work for the past year here in the U.S. also.  They started by rejecting Keynesian economics out of hand as a cure for recession, reasoning that it wouldn’t work (though it had in the 1930’s and hadn’t been tried yet now.)  The only solution was to cut taxes by cutting government programs, all in the name of reducing the deficit.  Programs to increase jobs, thereby raising consumer spending, were declared impractical.  Then when no improvement in the patient occurred, they called for deeper cuts, and so the Greek disease continues.  The possibility that the patient needs a transfusion rather than a bleeding is beyond their comprehension.

It goes back to a comment I made in a post about George Will, that he was counting only costs, not values, and that doing so was like measuring the value of World War II only by the cost of munitions. For democracy does cost.  Not every dollar will be spent for your personal benefit, some will be wasted by sheer human foolishness and cupidity, and some spent for your benefit will be challenged by others. But the value of democracy goes far beyond the dollars spent on it.  What a healthy democracy does is to make up through public programs for the flaws in the private economy.  And there are many.  Without those market interventions via the public sector capitalism becomes the enemy and oppressor, not the ally of democracy.  And democracies rise up against oppressors.

In economic terms the bleeders are seeing money only as a store of value, and have lost sight of it as a medium of exchange.  They need to raise their eyes to the sight of the country that is their home as it could and should become, with a healthy, employed citizenry sharing together the fruits of democracy, work together with others to determine ways to get there, and to calculate the monetary costs of achieving that vision.  Creating jobs, curing the sick, attacking global climate change, ensuring a healthy food supply, all may require more, not less, funding.  But those things, not minimizing taxes and maximizing loopholes, are the true tasks of America.   All the private wealth in the world will not be enough if in the process one's country is lost.