by Victor Davis Hanson
NRO’s The Corner
Anyone who has lived in Greece can see why the question of default or a “haircut” is not a matter of if, but when. It is a wonder that crazy things have lasted as long as they have there. The symptoms are well known: Tax evasion is now an art form and a matter of pride; pensions are absurd to the point of caricature; the public sector is self-righteous, bloated, and inefficient; and what little industry there is does not meet European standards of efficiency and productivity.
Greece has a wonderful climate and rich soils, but few vast expanses of agricultural land, and farming has so many built-in cultural and political impediments that vine, tree, grain, or cotton agricultural productivity lags far behind comparable farming in the states, Australia, or western Europe. All this unfolds amid a landscape of a naturally beautiful, but otherwise largely resource-poor country, whose majestic disparate terrain poses enormous problems for communications, transportation, and infrastructure. Tourism, EU membership, and the Olympics all brought scarce capital to the country, but not enough to match a rising entitlement attitude among the public that can in a nanosecond adduce all sorts of complicated and Byzantine arguments why the standard of living in Greece must be roughly comparable to that found in a Germany or Scandinavia — or else.
Even more disturbingly, the ongoing crisis is amid a regional landscape in which an ascendant (and fellow NATO ally) Turkey has decades-long disputes with Greece over Cyprus, territorial claims in the Aegean, and overflights of Greek airspace at precisely the time when budgetary implosions are forcing Greek defense cuts; the country is shrinking and its mountain villages are emptying; its allies in Europe are completely turned off by serial Greek recriminations; and four-decades of cheap anti-Americanism has eroded almost all US goodwill to the country.
Finally, there is no way out except either sudden or gradual default because of the complex mentality of a xenophobic Greek public that assumes expansionary entitlements as an earned birthright and would treat any who would cut them as some sort of existential enemy. That narrative works out to something like a greedy predatory northern European or American bondholder wanting to pile up even more needless profits by enforcing quite unfair and amoral terms of payback on the courageous, brave, and long-suffering Greek collective.
Once a society descends into that mindset, there is little alternative but the get-real shock therapy of default, which, in the Greek case, would return it to something like the early 1970s when I first visited: a nonconvertible, widely fluctuating drachma, a standard of living more akin to the southern Balkans or western Turkey than France or the Netherlands, a vibrant black market in money exchanges, tight controls on the possession of foreign currencies and a curtailment of imported goods, and very little new infrastructure construction or repair.
The Hellenic disease in its lesser forms is spreading here in California, where entitlements have soared, illegal immigrants have vastly increased, and pensions and benefits of public employees have skyrocketed, while investments in infrastructure were largely neglected to fund redistributive payouts — all at a time when the affluent, income-tax-paying, and job-creating minority are leaving the state. The therapeutic California attitude is similar to the Greek in which even the slightest suggestion of cutbacks evokes class-warfare and a litany of sanctimonious reasons why more, not less, public funds are critical for all sorts of victimized categories.
As for now, Californians can enjoy the semblance of 21st-century living thanks to the state’s lingering advantages — the fumes of once-vibrant gas, oil, and timber industries; a highly productive agriculture sector that arose in the 1960s; the Napa Valley explosion of the 1980s; far-seeing investments during the 1950s and 1960s in infrastructure; Silicon Valley; and weather and geography conducive to tourism — and despite, rather than because of, state governance. That the state is dreaming of a new first-stage, multi-billion-dollar high-speed-rail link from Fresno to Corcoran (where Charles Manson resides), while its main north-south “freeways” such as the 99 and 101 are congested, sometimes non-driveable, and have long expanses of two-lane, pot-holed surfaces, with cross traffic instead of on and off ramps, is symptomatic of how hard it would be to save our state.
©2011 Victor Davis Hanson