Greece's socialism catching up

The sovereign debt crisis with Greece has a long history. It isn't just about the Greeks lying about their budget deficit.

The symptoms of Greece's current fiscal crisis tell a story of such inept economic management and performance that few should be surprised. Only those with their heads up the short term goals of financial markets (and so untrained and uninterested in the wider context), the proponents of the Euro, and what appears to be most of the Greek political class (and bureaucracy) didn't notice the progressive bankruptcy of what was the cradle of European civilisation.

The roots of the political culture behind this go back to World War 2 and the Greek Civil War. After the Nazis were pushed out of Greece in 1944, the Greek government in exile faced the communist "Democratic Army of Greece" supported by the Soviet Union through communist Bulgaria, Albania and Yugoslavia.

The subsequent five years of fighting (which played no small part in encouraging Greek emigration to the likes of Australia, New Zealand and the USA) divided Greek society enormously. The communists lost in part because of the split between Tito and Stalin that saw the Greek communists side with Stalin, which spelt an end to Yugoslavia's ample support.

However the cost of the civil war was immense in slowing reconstruction after the previous Nazi occupation. Between the civil war and EEC membership in 1981, Greece was politically divided. The military coup in 1967 was due to some fears of a far-left wing takeover by some forces, that junta was one reason Turkey gave for invading and occupying northern Cyprus in 1975, even though the junta was overthrown some months before.

Greece's governments have been dependent on aid since the end of the civil war. The influence of leftwing politics has been strong, with the communist party coming 4th in 1974 and 1977 and 3rd in 1981 with between 9 and 11% of the vote during this time, with more moderate socialists winning power in 1981. Since then the socialists have won a majority of Greek elections, and the communists have come third in all but one of the elections in that time. In other words, Greece is used to being governed with the principles of big government and socialism. The current Prime Minister, George Papandreaou might consider how his father, Andreas, when he was Prime Minister, ran enormous budget deficits in the 1980s when he was PM. Greece has been living beyond its means for a very long time.

When it joined the then European Economic Community in 1981, it was one of the poorest new members. Its membership ushered in a period of 20 years when it, along with Spain and Portugal, got the bulk of the subsidies for infrastructure and development that the EU now lavishes upon the likes of Romania and Bulgaria. Greece was one of the biggest recipients of Western European aid. This helped to bolster Greece's addiction to debt and budget deficits.

With membership of the Euro this gave Greece a high value currency with low European Central Bank interests rates that it could borrow with. It took advantage of the ability to issue sovereign debt in Euros to continue spending up large.

Now the chickens have come home so to speak.

The current government is starting to face fiscal reality by announcing spending cuts, and of course, on cue in a country beset with socialist attitudes, the public sector is going on strike. It doesn't think it is to blame, yet it might look at how its wages and operations have been getting funded for decades - it's been a lot of borrowed money.

However, Greece's problems are not just about spending too much money. It is about the deliberate lying about its accounts, and the lack of transparency of many areas of public spending. For example, Greece has long claimed its expenditure on defence to be a "state secret". The truth is that to placate the army, and evade a risk of a coup, Greek government have taken a blank cheque approach to defence. The current level of spending might have been justified in the Cold War, when Greece was very much on the front line with Bulgaria on its doorstep (Yugoslavia and Albania were not Soviet aligned from 1948 and 1960 respectively).

The airforce has 33,000 personnel and 477 aircraft, the navy 30,000 personnel and 84 warships, whilst the army has 100,000 personnel. This is similar in number to Israel, although Greece has a smaller population. The Netherlands, another NATO member, with higher population, has only 68,000 active members of the military. 5% of GDP is spent on defence it is estimated.

Furthermore, according to Spiegel Greece rigged its accounts to hide its budget deficit, with help from Goldman Sachs, by excluding some military spending and hospital spending. Similarly, Goldman Sachs participated in off balance sheet lending, by using fictional exchange rates to engage in sovereign debt swaps. These are the actions you'd expect of a tinpot sub-Saharan dictatorship, not an EU member state in the Eurozone. Right?

This sort of behaviour should be punished, the politicians who have been a party to it held up for all to see, but also the snivelling useless public sector managers who have ignored basic practices like double-entry accounting, and have participated in enormous fraud, should be shown up for what they are - the shysters that have borrowed and wasted money on behalf of Greek taxpayers.

However, some of the EU wont want that, because they want to protect the consequences of their own failures.

When the EEC accepted Greece, Spain and Portugal it was about looking forward to countries that had only recently turned their backs on military dictatorship, with the European project to pour mountains of European taxpayers' cash into lifting their incomes to levels commensurate with others in Western Europe. The same happened with the former Warsaw Pact countries, most recently with the inclusion of Bulgaria and Romania, both countries still besotted with corruption, organised crime and distinct paucities of transparency in their government accounts. European taxpayers are plundered to subsidise enormous EU funded infrastructure projects and of course the massively inefficient and environmentally disastrous Common Agricultural Policy.

The single currency across a range of economies with wildly varying levels of wealth and development has been a disaster for the poorer economies, who face a highly valued Euro which makes their relatively lower value commodity exports (and tourism sectors) relatively expensive, whilst now also making their mountains of debt unaffordable. Greece's sovereign debt is barely above junk status. Bear in mind that France and Germany have both run budget deficits beyond the Euro rules, but then they set the rules don't they?

So there are strong expectations of some credit being offered to Greece to avoid a default, it will no doubt be at the expectations of massive reductions in the budget deficit (Greece is claiming to cut the deficit from 12.7% in 2009 to 2.8% in 2012, but none of its plans show any sign of meeting this), which will mean accepting strikes, possibly riots and enormous political cost - the cost Greece should and would have faced in the 1980s and 1990s had it not been propped up by EU aid.

Of course what SHOULD happen is that Greece should default - its foolish creditors, who took a risk on a series of lies should suffer for their foolish decision to take up Greek debt. The Greek government, unable to borrow, will then face confronting the socialism and incompetence that has bankrupted itself. The Euro would rightfully suffer, as it should bear the devaluation of one of its participants failing to meet its obligations.

Allister Heath in City AM puts it plainly:

"Regardless of which plan is agreed upon, a rescue would fill the City with joy in the short-term – but would cause huge damage over time. There should be no bailout: it is high time that countries and investors learn to live with their mistakes."

Unfortunately, when you have the ability to plunder the pockets of future generations through taxation, there isn't much incentive to do that.

That, you see, is when the phrase "taxation is theft" so clearly comes into its own.

Unless the role of the state is constrained so that it cannot ever be used to bail out foolish investments or the governments of liberal democracies that vote themselves bankrupt, the easy option - which politicians never truly even start to face the cost of (what is being voted out when you put people in debt for years?) - will be used and the only loser is the taxpayer.

John Key is being a National PM

The message is rather simple.

If you largely supported what Helen Clark and Labour did in government from 1999-2008, but just want a "cup of tea" for three years, and a few tweaks in the other direction, then National is your party. That's what this government is doing - little different.

If you largely opposed what Helen Clark and Labour did in government from 1999-2008, and want a net reduction in taxation, reduction in the size of the state, then National is NOT your party (and frankly neither are any of the others in Parliament). Only Libertarianz has done that and would do that.

If you want to grow the size of the state, so that it takes more money to spend on "public sector employment" you can choose Labour, "Maori" you can choose Maori Party and "all you can think of" you can choose the Greens.

In fact if you want the state to grow in the areas of telecommunications and roads, you can choose National.

National is a conservative party. It almost never reverses what Labour does.

The Labour Party has set the political, economic and social agenda of New Zealand since 1935.

The National Party, with the exception of trade union membership, has adopted that agenda and sat tight with very few exceptions.

So why would anyone voting National expect any significant change?

Since when does 100% = 50%?

When you read it in the Dominion Post, reporting on proposed bus fare increases in Wellington:

"One option would mean the $1 city-section fare would be replaced by an increased one-zone cash fare of $2.

That would effectively mean inner-city bus passengers were facing a 50 per cent increase in bus fares"

Hmmm, good job paid journalists are out there making sure they double check stories and are so thorough, unlike those rogue bloggers right?

So Kerry Williamson let's learn maths:

$2 = $1 + $1

$1 = 100% of $1

Therefore an increase from $1 to $2 is?

Oh and while you're figuring that one out, how about a real question, such as what is the current proportion of cost recovery from bus fares in Wellington? What is the average subsidy per trip and per km? How many services are commercial (unsubsidised)?

For example, on average 51.5% of public transport costs are recovered from fares, is it planned to increase that, as that is the lowest level for Wellington in a four year period surveyed by NZTA?

In other words, how about some information that doesn't just involve reporting what the Greater Wellington Regional Council says?

The bureaucrats for whom freedom is unknown

I have said before that I despise smoking, I don’t like the smell and I hate walking behind smokers and don’t like walking through them outside buildings. So you might think I’d welcome what the Auckland Regional Public Health Service is calling for as reported in the NZ Herald.

ARPHS (why not say ARS) calls for what is effectively a ban on smoking anywhere but in one’s own home, which looks to me quite simply as the sort of nanny state authoritarian bullying that I thought was voted out in the last election. However, it would be a fair bet that those who “work” for that organisation are unlikely to have much philosophical truck with personal freedom.

The thought process appears alarmingly simple:

People smoke - it is bad for them - it's already illegal to allow smoking at places of employment, retail outlets and on public transport, so let's make it illegal everywhere else, except the home (that would be seen as too far).

Banning something that is bad for people is good. The very idea that perhaps it is morally wrong to do this appears to have not crossed their minds, after all it's for the "greater good" (as is the justification for all limitations on personal freedom). Fascists? Well, they wouldn't think so, they just think they are acting for the interests of others. However, they are treating the public as children. It's only one step removed from treating tobacco like an illegal drug.

So what should the response be to this?

Should it be to ask whether a study has been made as to the health benefits to non-smokers of the measures proposed? If not, why not? Why not come clean about what “public good” there allegedly is, or is there really none at all? I suspect the health benefits to non-smokers are virtually undetectable, after all the emissions from motor vehicles are in greater volumes and significantly more toxic (smokers don't die from a lung full of tobacco smoke, but you wont last long intentionally inhaling petrol exhaust).

Should it be to ask to what extent these measures are likely to reduce smoking? If not, why not? How about noting how effective these measures are at reducing illegal drug use?

Why are you not simply being honest about wanting to criminalise smoking other than in the private home? Or does that just show you up for what you are, as petty fascists wanting to change behaviour by force rather than persuasion?

Or, how about simply asking why the hell they think it is their business what adults do with their bodies on their own property or in public spaces?

Clearly the public health bureaucrats have no clue what private property means, and what private property rights mean, for long ago they surrendered the idea that you can decide whether or not to allow otherwise legal acts on your property.

However, they also seek to control public space. To have people prosecuted for smoking as a way of reducing the propensity to smoke. The idea that there are adults who voluntarily choose to smoke because they like it would bewilder them all.

How can people LIKE harming themselves? Well the joyless do-gooders who think they know best for everyone else can't grasp that not everything everyone does is “good” for them. Some people drink to excess, some people eat to excess and don’t exercise. Some people have unsafe sex. Some people take illegal drugs. Some people participate in dangerous sports.

The proportion of smokers who do not know it is bad for their health will be very low, so it isn't about that. Tobacco smoking has addictive qualities, but plenty give up smoking and the state has used other people's money for some years subsidising methods to do this. So the conclusion is that people smoke because they enjoy it.

People have freedom to choose to smoke or not smoke. Those who do should have that right on their own property or with the permission of property owners. Those who do not like it should prohibit it on their own property and not enter places where it occurs. Public (as in local and central government owned) locations should be places where people can peacefully go about their activities without initiating force against others, that includes smoking.

The only appropriate response to this proposal is incredulity.

It demonstrates the profound need for all policy proposals to government to be subject to a test of whether it enhances or detracts from individual liberty, and whether it represents the initiation of force or defending citizens from initiations of force or fraud. Such a simple test would see such proposals dumped in the inbox of the Labour, Green and Maori Parties who think that individuals are a means to an end, not an end in themselves.

While we're at it, abolishing the Auckland Regional Public Health Service would make a modest contribution to reducing the budget deficit.

Slavery, deceit, racism and the waiting game

Christopher Hitchen's latest article in Slate is on North Korea. - a "nation of racist dwarfs" he says, with good reason.

North Korea is the most odious regime on earth by an incredibly long margin. Iran, Zimbabwe and Turkmenistan are shining lights of freedom, prosperity, rule of law and moderation by comparison. Yet, for some reason, it gets precious little attention from the likes of Amnesty International, the left inclined protest movement (all too keen to care about Gaza, Iraq and Afghanistan) or indeed the international community.

Hitchens notes how much propaganda from North Korea carries racist depictions of Japanese and Americans, akin to the imagery the Nazis produced in the 1930s about Jews (this new book apparently describes the racist dimension of North Korea). North Korea also bemoans the impurity of South Korea, which allows Koreans to breed with foreigners - North Korea forces local women who are pregnant by Chinese to have abortions. Of course nationalism is always an easy refuge for the totalitarian. It was seen vehemently in the Khmer Rouge, it is still seen in China, and was long seen in the Soviet Union. The fraternity of socialism didn't wash when African Marxists visited Maoist China, or indeed North Korea, both countries where black people are both rare and seen as being inferior. The kleptocracies in Africa today accepting Chinese money for minerals don't pause to think about how they see themselves.

North Korea is a slave state, a prison society where the average height is six inches shorter than in South Korea. It is dependent upon shutting the entire population away from comparing their lives with the outside world, except for a clique around the family that runs the place. They enrich themselves enormously by selling minerals, weapons and whatever else the enslaved masses can extract for them at high cost and little benefit. It is a society where the concepts of truth, honesty and openness have been so wholly bastardised that the psychological damage is incalculable.

By what means does one live knowing that when things go wrong, there is no one to complain to, that when injustice is done, it is better to agree with it and support it, than to challenge it. That no one must be fully trusted, and everyone is expected to spy on everyone else. You included are expected to engage in this monument of telling on your fellow citizens for "crimes" that may not have happened, because to fail to do so implicates you, and you may well be the receipt of such accusations.

How do generation after generation live in a constant state of near war, constantly told attack is imminent, as is victory against forces depicted as demons (Japanese, American and South Korean). That the constant sacrifice is due to this perpetual state of war, that never actually happens, except in news reports of fabricated skirmishes and atrocities.

Where does human creativity, innovation and intelligence go when you are raised and taught to treat two men (one dead) as virtual gods, for whom you are to be grateful for everything, and who know everything and are infallible. Whilst all art, culture, literature and indeed industry are dedicated to glorifying them, and in following their guidance. When all learn that everything you create is to be shared and used by all others, and you are to get next to no credit, but meanwhile all around you struggle to eat, stay warm in winter and live in conditions unchanged for decades.

Finally, where is humanity when it is clear that those who challenge, question or are unconventional, simply disappear. Where there is unrestricted power by the state and all its forces to arrest, torture, imprison, kill and intervene in all aspects of daily life. Where whole families including babies are sent to prison camps for alleged political or economic crimes of one, and where you are constantly told you are the luckiest people on earth, and the rest of the world is in chaos, crime ridden and starving. Where compassion and mercy are only ever granted by the two official gods, and going against the unlimited list of rules, laws and taboos deems one an enemy of the state, the party, society and by necessity, neighbours and family. It is long known, for example, that no disabled people are ever seen in the capital Pyongyang. Given the record of similar regimes in treating the disabled, and given this is a state that imprisons small children in gulags, there is nothing it is not willing to engage in.

So to expect change from this regime is absurd, until Kim Jong Il dies and there is a coup to defeat his successor. North Korea will not give up its store of chemical, biological and nuclear weapons, it will not disarm and it will not allow transparent inspection of its nuclear facilities to enable a peace treaty with the USA, until the regime collapses or is dismantled from within.

Military action is futile and excessively dangerous, although it could never win a war against the technology, firepower and capability of South Korea, the US (and Japan if attacked), it could inflict damage on a scale that could take the lives of millions in South Korea and Japan.

It did not attack South Korea during the latter years of the Cold War, because it was so closely aligned to Moscow. Today it does not attack because it fears massive retaliation, of a kind that I would hope President Obama would be unafraid to inflict if North Korea tried.

That fear must be maintained, for a regime that has tolerated the deaths of millions of its citizens, and is willing to treat the remainder like insects. However, in the meantime it deserves to be humiliated and challenged for its treatment of its own citizens as guinea pigs and slaves in ways that would have been familiar to the Nazis and indeed the pre-1945 militarist Japanese.

This should be the number one human rights priority of all those who claim to give a damn about individual dignity, freedom and humanity. Finally, it would be nice if North Korea's useful idiots abroad were humiliated for what they are - supporters of one of the most blood thirsty cruel and dishonest regimes on the planet today. They should be ostracised like Nazi sympathisers, because in truth, they are worse - for the Nazis were defeated in 1945.