In Greece Political Midgets on a High Wire Act

By Con George-Kotzabasis—November 02, 2011-11-02

Political midgets, a la Papandreou, have chosen to take the risk of the high wire act by this proposal of the referendum. Hoping that the people will vote for the lesser of two evils, i.e., accepting the debt deal as formulated in Brussels last week and rejecting default and departure from the euro zone. At a time when strong leadership is a prerequisite for diminishing the crisis that Greece is facing, Papandreou abdicates his own and passes it to the people through this future referendum. It’s as if the polloi had somehow a better knowledge and understanding of the critical dimensions of the economic situation and could provide a better solution to the crisis than the expertise of the economically and politically savvy.

Once again politicians, who are more concerned of holding power than of the future of their own country, are ready to prostrate themselves before and pay homage to the idol of the Demos. Papandreou facing in Parliament a no-confidence vote and the ousting of his government promptly announced a referendum that would decide the future of the country, hoping that this would allay the anger and opposition of the people against the austerity measures, imposed by the EU, and at the same time put an end to the disarray within his own government that itself stems from the revolt of the people. It’s clever politicking to avoid defeat and save for him the prime ministership. But he is doing this at the expense of the future well being of the country, as it would take years for Greece to recover from the shock of a default if the electorate voted for it, which is highly likely. This is no less than the revisiting of the ‘sinful’ genius of his pere who himself was the preeminent progenitor of the economic ills that Greece is presently plagued with. The fils merely continues , like father like son, the ‘sins’ of his sire in a more acute form and projects them into the future.

World Bank president, Robert Zoellick said that “if voters reject the plan, it’s going to be a mess.” Economists claim that the immediate effects of a default would probably be a 20 percent to 30 percent drop in domestic demand and a fall of 5 to 10 percent of domestic product. Evangelos Venizelos, the Finance Minister, and his deputy broke ranks and opposed the referendum, saying it would jeopardize Greek membership in the euro zone. Ilias Nicolakopoulos, professor of political science and close to the governing socialist party, stated that a “referendum would put the country in danger of blowing everything up.” In contrast, Henry Ergas writing in The Australian, on November 3, 2011, “Greek Vote a Banana Republic Moment,” praises Papandreou for having the “balls” to propose the referendum, and compares him to the gutsy warning of Paul Keating’s “Banana Republic.” He says, that “to call a referendum on the austerity program is hardly irrational. But he adds the caveat, “true, it is a gamble, and a risky one.” Nonetheless, “the best hope of what comes next must lie in securing a genuine popular mandate.”

Regrettably, however, Papandreou’s proposal of a referendum does not rise from his “balls” but from his impotence. Unable to lead and convince the country, as a weak leader, to accept the inevitable “scenario, Greece must face a lengthy period of austerity and structural reform,” Papandreou passes this leadership to the impassioned people to decide whether to accept or not this scenario. Professor Ergas’ quote of Sophocles, “truth is always the strongest argument,” though generally accurate, is misplaced in the context of a long corrupt electorate that the fiscal profligacy of past governments accustomed it to indulge in ‘free suntans’ in sunny Greece. In such circumstances, the only truth that this pampered electorate will accept is the continuation of these free suntans at public expense. And that is why they will vote NO to austerity measures and thus turn the referendum into an ogre for the future economy of Greece.

Fortunately the proposed referendum like the balloon it was fizzled out within twenty four hours. Under external and internal pressure Papandreou reneged his proposal and withdrew it. Tonight (November 4, 2011), he places his fate on the lap of the god, parliament, on a confidence vote. Even if he survives by the smallest margin his prime ministership is foreclosed.      

       

Will America Rise from its "Comatose" State?

I’m republishing the following post, that was written on October 3, 2008,  for the readers of this blog.
By Con George-Kotzabasis

A reply to a very clever American Open Salon

The Global Credit Crunch and the Crisis of Legitimacy-September 30, 2008

By RCMoya612

RCMoya, after your excellent and resplendent analysis I feel, if I captiously quibble about few points, like a bat squeaking in the dark. First, inequality might have “continued its forward march” but I would argue that it did so on a higher level of general economic prosperity in America following the up till now unassailable historical paradigm of capitalism and free markets that has made the poor ‘richer’ in relative terms, as the distinguished economist Amartya Sen has contended.

Secondly, America’s “hectoring and ignoring” has its counterpart in Europe and in other continents whose countries were strong allies of the US during the Cold War but with the collapse of the Soviet Union have reappropriated their independence both geopolitically and culturally and expressing this in their own hectoring and ignoring against America, thus continuing the irreversible law of the political and cultural competition of nation-states.

Thirdly, I would argue that as long as America continues to be the centripetal force attracting the “best and the brightest” to its shores and not stifling the Schumpeterian spirit of entrepreneurship and “creative destruction”, it will be able to rise again even from the ashes of a comatose state and will continue to be in the foreseeable future the paramount power in world affairs.

And fourthly, the rejection by Congress of the funding plan that would have a better chance than none to prevent the economy from collapsing was inevitable in the present political climate where reason cannot compete with populist emotionalism and when a swirl of weak politicians, like Nancy Pelosi, and, indeed, Barak Obama, are its ‘slaves’.  Only by cleaning out these wimp politicians from positions of power will the political narrative reassert its strength and legitimacy.