Greece has had its election, and the left-wing Syriza won. In fact, it came just two votes short of an outright majority. This is huge news. And good news. Unless you are the European equivalent of a Villager. In that case, Syriza is just a bunch of “far-left radicals” who won by being “committed to ending years of austerity.” You know: that’s the austerity that has worked so well for Greece and the rest of Europe.
I think that the Very Serious People of Europe who are so upset that Syriza won should hope that the coalition succeeds. Because if the people are failed by Syriza — which has shown itself to be quite reasonable — then the people will turn to a fascist party. The establishment is so used to being able to dictate terms that they are going to be angry about any government that actually stands up for the best interests of its people. The problem is not Syriza but rather these Serious People who think that austerity is just about to work and it only needs another year or two or three or a decade or two. They are the ones who need to change what they think and start looking out for the best interests of the EU as a whole and not the people at the very top of the food chain.
To get an idea of just how bad things have been in Greece, consider the unemployment rate. In 2010, when the austerity demands first started, the unemployment rate was 12.5%. In 2013, after years of crushing austerity that was supposed to “fix” Greece, the unemployment rate was more than double: 27.3%. Last year, it is 25.8% — which I suppose is making the Very Serious People of Europe scream, “It’s working!” It isn’t. Yesterday, Paul Krugman put together a couple of graphs, The Greek Stand-By Arrangement. The stunning one shows Greek government spending (apart from debt maintenance). It has two lines. The blue one is what the power elite of Europe planned for Greece in 2010. But over time, the demands became much bigger. It is very much like bleeding a patient, and when she doesn’t get better, bleeding her some more. And if you think I’m comparing modern economic policy to witch-doctors of the past (and the present), you are right.
Meanwhile, Greek GDP is 20% below the level it was at in 2010. And there is no indication that it is improving. It isn’t surprising that the people of Greece are angry. Any group of people is willing to put up with temporary pain in the name of improving things. The problem here is that the pain doesn’t seem to be temporary and it doesn’t seem to be improving anything. Krugman explained why this continued course of economic bleeding has gone on:
The idea of “expansionary austerity” is that cutting government spending during a recession wouldn’t hurt the economy, even though regular economics indicated that it would. But there was work by a couple of heterodox economists that showed that it would. The mechanism was as simple as it was unbelievable. By cutting government spending, the business community would see that Greece was getting serious. So the businesses would start investing and hiring and there would be a boom. It’s been almost five years and the boom has not come. But the Very Serious People of Europe don’t believe that. Just another course of bleeding and the Greek economy will be saved!
Krugman summed up the current outrageous situation, “The thing is, we now have essentially the same people who so totally misjudged the impacts of austerity lecturing the Greeks on the need to be realistic.” There’s that tired old saying that politicians love to quote about the definition of insanity: doing the same thing and expecting a different result. But it would be wrong to apply that to the power elite of Europe. Because oppressing the Greek people with austerity is working great for the power elite of Europe. Hopefully democracy will work in Greece and Syriza will be able to serve the people and not the Very Serious People of Europe.