Arteriosclerosis: The Tragedy of the Greeks

Arteriosclerosis: The Tragedy of the Greeks

By

Martin L. Cowen III

On May 5, 2010, Greek mobs set Martin Bank in Athens on fire murdering three bank employees, including one pregnant woman. The rioters were protesting cuts in Government benefits mandated in exchange for a multi-billion dollar international bailout of the bankrupt Greek economy.

Most mature, and therefore essentially corrupt societies, have in place thousands of programs, designed to buy votes, which have the effect of paralyzing the economy. Once these programs reach numbers in the thousands, the economy starts to die visibly. We are seeing this effect most dramatically in Greece. The effect is visible in other European socialist democracies like Spain and Italy. We in America are being to experience the paralyzing effects of our Government vote-buying programs. Because we are all the beneficiaries of these vote-buying government programs, most of us are unwilling to support stopping our, or anybody else’s, Government programs. “We want our benefits.”

The Wall Street Journal reported on December 18, 2012, that only 3.7 million people of the total 11 million Greek population have jobs. Greek parents are sending their children to live in charitable children’s homes because the parents cannot afford to feed them. Greece is dying of arteriosclerosis of the economy.

Some vote-buying Government programs are small irritants, like the first here listed. Others are more troublesome like the second. In sum, these programs destroy a free market economy completely. The first is milk price supports. In the news today is talk of the “dairy cliff.” Government price supports for milk expire on January 1, 2013, in the absence of Congressional action. Boohoo! Like all price fixing, and there is a lot of this in American law, milk price supports are just one more vote-buying Government program. The second to be mentioned is minimum wage laws. These laws forbid a willing employee and a willing employer from entering into a contract for work at a rate less than that mandated by the Government. This law is a jobs killing nightmare. With the advent of ObamaCare, the effective minimum wage will spike $2,000 per employee per year (this is the new tax per employee of every subsidized employee). For those who cannot do the math, that is a $1 per hour effective increase in the minimum wage law (there are 2,000 working hours in one year).

Rather than list more of the thousands of programs, let us examine the principle. Almost all legislation is designed primarily to influence the financial condition of one or more special interest groups. Not always for the good. Sometimes competing businesses are killed by the Government as a boon to a more favored special interest group. There is always a rationale for legislation that is addressed to the “pubic good,” but the reason is always the financial interest of a constituency. As we learn the principle, remember that powerful interest groups have been educating us for decades in Government schools to believe only the rationales and to ignore the reasons for Government interference. Be prepared for cognitive dissonance.

Legislation can address any point in the profit-loss statement of a special interest group.

Price

In the case of milk price supports, the variable affected is price. Minimum wage laws are price controls.

Demand

ObamaCare famously is requiring everyone to be insured. The variable affected is demand. Demand for insurance will thus be maximized. For this reason, many insurance companies supported the ObamaCare legislation.

Supply

Import quotas and tariffs limit the importation of certain goods or place a fee on their import. The variable affected is supply. Supply is limited by import quotas and import tariffs. More vivid and controversial examples of supply affects are all licensing laws. Lawyers, doctors, pharmacists, all the way down the list of “professions” to hairdressers are licensed. Licensing reduces the supply of people in the profession, thus sustaining prices. The reason for licensing is a Government imposed monopoly in order to benefit those in the licensed professions. The rationale for licensing is public safety.

Cost

The Transportation Security Agency (TSA) now has a Government monopoly on airport security. The cost of security, normally a cost of doing business, is largely borne by the Government and the taxpayers via a direct tax ($2.50 per boarding) on airplane tickets. The variable affected is cost.

So, legislation can and does affect the economic variables of price, demand, supply, and costs in thousands of ways. (Should you doubt this, post a comment suggesting a Government program you think has some other motive and I will respond.)

We have not been trained to think about Government in this way, for a reason. The reason is the continued Government control of everything. If the voting masses actually understood the way Government works, they might not support this manner of Government. We must have the illusion that the Government is acting for the “public good.” It is the best interests of those in power, the Government and the various special interests, to keep the voting masses in ignorance.

In Greece, the voting masses have their Government programs and they will kill to keep them in place. There are many Americans who, likewise, would kill to keep their Government programs in place. We will see riots in America like those in Greece, tragically.

It is doubtful that any outcome other than Armageddon (Ἁρμαγεδών) is possible for the Greeks. They have no economic education. They have no understanding of free enterprise. They have not learned and probably cannot learn that freedom is the protection of private property (life, liberty and the pursuit of happiness) under the rule of law. The proof is that when their Government programs are threatened they burn banks and kill pregnant girls.

But if the Greeks could be educated in the vocabulary and practice of freedom (which, ironically, the Ancient Greeks invented), the Greeks could recover economically.

The recovery scenario is simple. The problem is that in Greece there are rules and regulations for everything, like price controls, minimum wage laws, licensing laws, and other government enforced monopolies. (Can you imagine starting a taxi cab business in Athens, Greece? Or in NYC for that matter.) They have arteriosclerosis of the economy. Nobody is free to act outside the rules and regulations.

On the other hand, there are priceless assets in Greece for which millions of entrepreneurs would pay dearly. The Greek people (when they are not murdering pregnant girls) are a wonderful, hardworking people. Greek weather is great. Greek landscapes are gorgeous. (Who has not dreamed of taking a Greek island vacation?) Greek monuments are the grandest on the Earth (e.g. the Parthenon on the Acropolis, to mention just one). Tourism alone would support the Greek economy on a grand scale. Every Greek citizen could be rich in a free market economy.

If it were legally and socially possible, the Parthenon could be sold to a tour operator and operated at an enormous profit. Other tourist destinations and activities (inter-island transportation, for example) could be operated by for-profit organizations very efficiently. Given renewed civilized behavior of an educated-for-freedom Greek populace, tourists would come flocking back. Currently, tourists stay away because of the threat of riots, protests, and strikes. The barbarians now dominate Greece.

The only problem in Greece is the corrupt Greek government and a corrupted Greek population uneducated in the vocabulary and practice of freedom. Both problems are intractable and the only outcome is the demise of the Greek government and society: Ἁρμαγεδών.

Arteriosclerosis is a common cause of death for human beings. Economic arteriosclerosis is a common cause of death for human societies.