Austerity Is The New Greek Tragedy
September 25, 2012 - 10:44pm ET
In my previous post this morning, I noted that the U.S. is starting to look a lot like Greece, at least in terms of austerity-driven suicides. This week, Greece's austerian nightmare seems to have metastasized into a full-fledged tragedy. Thousands of Greeks who still have jobs are joining a general strike this week in another attempt to ring down the curtain on the whole show.
No one, it seems, is going to work in Greece this week. Teachers, doctors, lawyers, journalists—even tax collectors—have walked off the job to protest the country’s biting austerity measures. Judges, protesting a 38 percent pay cut, are only hearing cases nearing the statute of limitations. Bus drivers are parked, protesting longer work days and pay freezes. There are limited garbage collectors and few animal-control workers on the job to protest cuts in benefits like pension contributions. Firefighters left their posts Monday, ambulance workers did not work Tuesday, and police officers have warned that may turn a blind eye to what could be chaotic protests as the country’s labor unions and private-sector leaders join the fray on Wednesday for the largest national strike since the June elections that launched Antonis Samaras into a dubious position of power.
While Greeks take to the streets, their coalition cabinet will be holed up working the numbers to try to shave off a whopping €11.5 billion from the 2013-14 budget. Government leaders have been entertaining European Union inspectors all week, trying to prove that they are working diligently to meet the requirements of the €31 billion bailout loan due from the European Central Bank (ECB) and International Monetary Fund (IMF). And Germany’s Der Spiegel broke the news that the “troika”—the European Union, the ECB, and the IMF—won’t release funds that are needed to keep the country from defaulting unless Greece actually doubles those cuts to close an estimated €20 billion budget gap.
...The austerity measures are brutal no matter how much they have to cut to get the aid they so desperately need. Unemployment already hovers at around 25 percent—and nearly 55 percent for those under 29. Since June 2011, nearly 1,000 jobs have been lost every single day. The retirement age will have to be raised from 65 to 67; many workers will have to work a six-day week; the country will have to raise the cost of public transportation and cut public-sector jobs. In a recent poll by MRB, over 90 percent of Greeks feel that the austerity cuts are unfair to the poor. Nearly 80 percent of the population says the country is headed in the wrong direction with austerity cuts.
For ordinary Greeks — particularly those public sector employees who keep Greek society functioning, austerity has been all pain and no gain.
- Unemployment in Greece has hit Depression era levels, and is only likely to get worse.
- Along with the rest of Europe, Greece risks a "lost generation" as young people face a 55% unemployment rate, and little hope for better in the future.
- The old fare no better that the young, as Greek pensioners face looming poverty amid pensions reduced by more than half, increased taxes and the collapse of support networks. Many join the growing ranks of the homeless and destitute. Others, facing the prospect of poverty in their golden years, opt for suicide — as Dimitri Christoulas did.
- Austerity has brought the Greek health care system to its knees, as public health funding is slashed by 25 percent — $12 billion. Doctors and nurses have seen their pay reduced more than a third. Lacking staff, basic equipment, and supplies, hospitals are rationing vital drugs and procedures.
- Greece's financial crisis has led to a surge in intravenous drug use and drug overdoses, as well as increases in prostitution and HIV infections. Meanwhile, programs focused on needle exchange, condom distribution and drug rehab have faced severe cuts under the country's austerity measures.
- Greeks are facing a crime wave in their streets, as the economic crisis put many out of work, austerity measures reduced support services for immigrants, and cuts to the public sector reduced the number of police officers.
Austerity is killing Greece's economy, and taking Greek citizens down with it. Forty percent of Greece's GDP comes from the public sector — represented by the workers going on strike this week. Cuts to the public sector must eventually impact the private sector negatively, as more people are out of work, and can't or don't pay bills.
Is it any surprise that most Greeks are pessimistic about their futures? Should anyone wonder that four in ten Greeks expect life to be worse in five years than it is right now? Chris Jones, writing from the rural Greek island of Samos, sums up the hopelessness austerity has brought to many Greeks.
I am aware that much of the Left elsewhere in the world seems to be full of admiration for the radical currents that run through Greek society and urge their own publics to be inspired by the Greek resistance. Maybe if I lived in Athens I might share some of this optimism. But for Samos and the vast rural reaches of Greece I am not so convinced and feel that too often sympathetic observers of Greek society confuse austerity consciousness and survival with something more grand and progressive. When your income is cut or simply evaporates; when the tax burden cripples the poor and working class; when you see on a daily basis that the rich and wealthy are left free to plunder with impunity; when you see the much vaunted bail outs for Greece providing nothing for the people but everything for the banks.... it is hardly surprising that vast numbers here come to see that they live under a social and economic system which is only for the few.
That's not true of all Greeks, however. Greece's super rich have maintained lavish lifestyles, and low profiles.
Scudding across the turquoise waters of the Argo-Saronic gulf, Ioannis Arnaoutis singled out the pearl-white sands of a little bay. The shore glistened in the midday sun. "It was especially imported from Asia by the owner of the mansion above the bay," said the boatman, one hand on the steering wheel of his water taxi, the other pointing in the direction of the cove. "It's a private beach, which is why there is only one umbrella on it."
Nearly three years into their country's worst crisis in modern times, life goes on as normal for Greece's super-rich. As the sun sets, oligarchs, shipowners, singers and media stars gather at the Poseidonion hotel on the island of Spetses opposite the little bay. They tuck into a menu that includes pasticcio laced with foie gras. Among them is a middle-aged man in a T-shirt proclaiming: "More is less".
Three days before Greeks cast their ballots in a make-or-break election, their country could not be more divided. Here there is no talk of the pain of crisis – the only topic of conversation elsewhere in Greek society. The destitution and despair of Athens is a world away – and for many quite clearly it is best kept that way.
Those "few" that Jones mentioned may very well prefer to avoid talk of the pain austerity is inflicting on the rest of their countrymen. After all, it can still seem a world away if you don't speak of it. But it's not likely to stay that way.
It should at least raise a plucked eyebrow or two among Greece's super rich, when the police warn that they may turn a "blind eye" to increasingly chaotic protests. That alone should be a clue that they are living in what what Robert Reich calls a "tinderbox society."
What's end of the line for austerity? We've gone through despair, desperation, and indifference. The latter feeds the first two, creating what Robert Reich calls "a tinderbox society," as "those collecting capital gains" demand austerity, resulting in "rising frustration over the inability of most people to get ahead. That frustration, Reich notes, is fanning the flames of public anger in Europe, fueling student revolts in Chile, and could plunge China into turmoil.
Where austerity goes, violence and unrest follow. The danger lies in the unpredictable nature of public anger, once ignited. When sparks fly, there's no telling where they catch fire or who will get burned.
It's a combustible concoction wherever it occurs: Increasing productivity, widening inequality, and rising unemployment create tinder-box societies.
Public anger and frustration can ignite in two very different ways. One is toward reforms that more broadly share the productivity gains.
The other is toward demagogues that turn people against one another.
To borrow a line from Bonnie Tyler's 1983 hit single, austerity means "we're living in a powder keg, and giving off sparks.
Except there is no more "we," anymore. As austerity-engineered scarcity makes day-to-day survival, people see their fates as divorced from one another. Solidarity gives way to detachment, an "everyone for him or herself" becomes the general rule, if you want to survive.
In Greece, all the ingredients for a tragic outcome are in place. Public anger is rising, in the face of unyielding austerity measures that demand the most of those who have the least, and almost nothing of those who have the most. Increasing restlessness among Greeks has given rise to "demagogues that turn people against each other," as the Golden Dawn party — a far-right, neo-Nazi political organization — casts its shadow over the Greek populace and its government, having won seven percent of the vote in June's elections. Some Greeks say Golden Dawn speaks to their insecurity under sever austerity. And who could be more insecure than Greece's large population of unemployed, hopeless youth?
The situation seems tailor-made for disastrous outcome — and not just for the Greek middle-class and working class. If not compassion, then self-interest should motive idle rich — whether lounging in private beaches, or sitting in "quiet rooms" at beach-side hotels and not talking about the austerity-driven inequality that's shaking Greece to its foundations — to at least start paying attention. Joseph Stiglitz explained why in Vanity Fair, in May of this year.
From the left, meanwhile, the widening inequality often elicits an appeal for simple justice: why should so few have so much when so many have so little? It’s not hard to see why, in a market-driven age where justice itself is a commodity to be bought and sold, some would dismiss that argument as the stuff of pious sentiment.
Put sentiment aside. There are good reasons why plutocrats should care about inequality anyway—even if they’re thinking only about themselves. The rich do not exist in a vacuum. They need a functioning society around them to sustain their position. Widely unequal societies do not function efficiently and their economies are neither stable nor sustainable. The evidence from history and from around the modern world is unequivocal: there comes a point when inequality spirals into economic dysfunction for the whole society, and when it does, even the rich pay a steep price.
Ordinary Greeks are already paying a steep price for austerity and inequality. When the spark is lit, the bill may yet come due for Greece's own one-percenters.
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