Tuesday, March 2, 2010

Political Systems Broken in the West

Western countries have always prided themselves on their "Enlightenment" tradition of representative government in contrast to the authoritarian regimes that predominate in much of the rest of the world. Now, you have to wonder whether the Western experiment can survive.

Let's begin with Greece. Greece is simply an icon for all of the rest of the European countries and the US. Greece has entitlements that it cannot afford and over half of Greece's employees work for the government. Their budget deficit is now over 13 percent of GDP and GDP is falling and the deficit is rising. Retirement age is in the 50s and tax fraud is commonplace. The tax fraud is so bad in Greece that it is suggestive that most Greeks have little or no respect for their legal institutions.

So, the Greeks spend money and indulge themselves with money that they do not have. Bondholders, outside of Greece, have been funding this nonsense for years, but are now balking at continuing to do so. Naturally, the Greek government now looks to other countries for a bailout, instead of taking steps on their own to curb the enormous stupidity that passes for social policy in Greece. Greece is a protypical European welfare state. They are a small version of the situation that exists in every single European country.

Greece, of course, is now demanding that other countries bail them out -- Germany is at the top of their list. Germany has insisted that the Greeks take steps to reign in their out-of-control, unfunded, spending habits. So, what is happening? Greece's largest government employee union is now planning a 24 hour strike. The political system in Greece is breaking down. Not willing to stop living off of other people, the Greeks are now threatening to bring down their own economy and their own political system. This is only the beginning. This political breakdown will spread to other countries in Europe and dominate the future of Europe. All of these pampered and protected groups who think they are entitled to free retirements at early ages and free health care are now finding that there is no one left to pay for all of this. There are no squirrels left that are willing to gather acorns in the Spring and Summer for the Greeks to eat in the Winter. So, now it is time to fight it out in a broken political process.

It won't matter. Simple arithmetic tells you that the Greek experiment, like the European experiment, in the welfare state will fail ultimately, for the simple reason that there is no longer any group of folks that will pay for this. This ponzi scheme has run its course, though the political posturing will go on for another decade or two. It will take some time for Europe to realize that the European welfare state model is untenable. Whether Europe will opt for another round of fascism or move toward free markets is an open question and much in doubt. But, the welfare state is entering its death throes, though the final death will take some time.

Meanwhile, the "poat-partisan" Obama Administration is planning to ram down the throats of an unwilling public, a radical restructuring of American health care that will deny coverage and choice, dramatically raise health care costs and put nearly 20 percent of the economy under direct government control. The public is overwhelmingly against this legislation. But, that doesn't matter. The arrogant Administration and their allies in Congress are determined to cram down this unpopular legislation regardless of public opposition. This Chavez-like strategy that Obama is embarked upon shows the dangers of putting an untested, inexperienced team in the White House, that has a condescending view of the average American. Obama and his crowd have nothing but contempt for the opinion of the average American and the average American knows it.

It is doubtful that Obama-Pelosi will get their way, even with their irresponsible assault upon American political institutions and the economy. But, the very effort to do so, shows that the American political system is broken as well. Never has a bill so unpopular been presented to the Congress and never has a President and his political party been so willing to slap the American people in the face. "The public be damned" is an apt description of the operating style of the Obama Administration. They simply do not care what anyone thinks. Chavez doesn't either. No wonder Obama was busily smiling and shaking Chavez's hand early in his administration. They have very similar views. Neither has much respect for free institutions.