Greek Academic Deprecates Bailout of Greece

By Con George-Kotzabasis December 2, 2012

Professor Varoufakis, certainly you may be right but only “figuratively” so, that according the incongruity of the figures you presented, if they are correct, will not lead to a reduction of debt by 40 billion Euros and will not change the fate of Greece in its insolvency. However, outside your numbers, absent in your analysis is the human factor, which obviously you tend nihilistically to underestimate, and indeed, to nullify, in its power to learn from its mistakes and transform things.

Your argument rests on the premise that only you can learn from your errors, as the serial revisions of your ‘Modest Proposal’ have shown since its birth, and that the governing class of the Euro-zone and its technocrats, including the IMF’s, are inherently unable to do so and are fatefully stuck in their continued wrong policies without a ‘smidgeon’ of a chance of contributing toward the resolution of the Greek crisis. The breathing space that Greece has been given by the Troika in this bailout can be used by the decisive, resolute, and imaginative Samaras’ government to create the right conditions by the restructure and privatization of the economy and its efficient operation both in the private and public sphere and hence turn the country into a centripetal force for investment that would rekindle its economy and put Greece on the trajectory of economic development.

Samaras endowed with strong attributes in the intellectual, spiritual, and moral field, has better than a chance to pull Greece out of its present tragic quandary. Indeed, he may turn out to be the Anagennitis (the progenitor) of the Greek Anagennisis (Renaissance), while you will be licking with relish the egg off your face.

In the Thunderous Sky of Greece a Lightning Bolt of Creative Destruction is about to Strike the Country

By Con George-Kotzabasis April 27, 2012
History has shown that at critical moments, in countries of advanced and high culture, men of stupendous ability, imagination, foresight, and fortitude, sprang, like phoenixes from the ashes, to salvage their countries from mortal threats. Themistocles at the battle of Salamis that saved Greece from the barbarian Persian invasion, is one example, the other is Charles Martel, who at the battle of Poitiers stopped the barbarian Muslim invasion from conquering Europe. In our modern contemporaneous times, Greece, on the verge of being devoured and crashed by the ‘hungry fangs’ of default and economic poverty, is just as promptly to be saved by a modern-day Periclean statesman, Antonis Samaras.

In the early 1980’s, with the advent of Andreas Papandreou’s socialist government in power, which proved to be the destructive force that brought Greece to its present catastrophe, that immediately started implementing the serial economic crime of a policy of deficits, the country entered the vicious circle of government spending without economic development. By the early 90’s it was glaringly clear that the debt of the country was reaching astronomical heights that would lead it to the precipice of default and bankruptcy. In 1994, Constantinos Mitsotakis, the former prime minister of Greece, in a prophetic speech in Parliament, predicted that the economically crass and thoughtless policies of Pasok would send Greece as a mendicant to the International Monetary Fund to spare it from pauperism. Andreas Papandreou himself was shocked when at a sober moment glanced at the unfathomable debt that the country was in, as a result of his dirigisme economic policies. It was in his presence when his minister of finance Kostas Simitis remarked, in an accusatory and pungent phrase, that this was “the revenge of the economy.”

The false prosperity that had engulfed Greece turned a sizable part of its population to indulge in the charms and seductions of dolce vita at the expense of government largesse. A whole generation of Greeks had been spoiled and became kaloperasakides (the easy life of prodigally good-timers) under the perpetual munificence of the State. In such a social situation the New Democracy party, though imbued with the precepts of The Austrian School of economics versus Keynesianism, and realising, as its leader Constantinos Mitsotakis did, that the country was approaching in a rapid pace the edge of insolvency, had its hands politically manacled and could not implement decisively and with celerity, and with the necessary degree required, policies of economic restraint that would have prevented the transformation of Greece into a mendicant status, since there did not exist even a small constituency on the political landscape of Greece that would contemplate, least of all accept, policies of austerity. The Greeks had been ‘pathologically’ conditioned to the ‘benefits’ accruing from big government, introduced by Andreas Papandreou, and any attempt to small government by any party in power or any opposition propagating such an idea, could neither hold or win government. Who would give up the ‘free tans’ in sunny Greece that so profusely and generously the State was providing? And who would give up the cushy and loafing jobs in the public sector that the party boys and girls of Pasok and New Democracy were enjoying and relishing? This is the point from which the economic tragedy of Greece had started and would continue to its tragic end.

Thirty years of frivolous public spending brought debt-to-GDP ratio of 120%. Since October 2009 when the son of Andreas Papandreou, George, became prime minister and implemented measures of severe austerity as directed from Brussels in the first memorandum, debt reached 168% of GDP. With the continued recession of the country for the fifth year, Greece lost 16%–18% of its GDP since 2009.
From early 2010 the Opposition leader, Antonis Samaras, few months after his election as leader of the New Democracy party, was warning the Papandreou government of the danger that the austerity measures without economic recovery would lead the country into recession. But his was a lone voice in the wilderness. And for his bold and insightful decision to oppose and vote against the first memorandum replete with the leaden heaviness of austerity that would sink the Greek economy as it did, he was vehemently reprimanded both from within and outside the country. The Economist magazine severely criticised him for his stand against the memorandum but only to lament its critique two years later and concede that Samaras was right. Likewise, Chancellor Merkel and many European ministers with whom Samaras had quarrelled and pointed out to them that austerity measures without rekindling the economy would not resolve Greece’s problem but would make it more abstruse and harder to crack. It took two years for the top brains of Europe to realize that the austerity pills that they were forcing into Greece’s mouth to remedy its ills would have the effect of poisoning its body. (In two years of the severe austerity of the Memorandum, as we indicated above, Greece increased its debt to GDP by a great amount and lost a substantial part of its Gross Domestic Product as enterprises closed and unemployment ravaged the country.) And in turn, like The Economist, admitting that Samaras had won the argument, as all Europeans now are calling for economic recovery and development, supplemented by austerity measures that are necessary, as the way to restore a country’s economic strength.

The May 6 Elections of Greece Crucial for the Future of the Country

The impending election that has been called by the interim government of Lucas Papademos for May 6 is of momentous significance for the future course of the country. Greeks will be called to be partisans of the hard climb to the peak of Mt Olympus from where the sun of hope will rise once again over Greece or be partisans to a free fall in a long twilight of despair. The first is the thunderous call of the New Democracy Party under the Gulliverian and imaginative political leadership of Antonis Samaras, and the second is the deathlike mute call of a congeries of small parties from the left and the right led by Lilliputian politicians. These politically ‘pigmy’ parties, among which is the Communist Party, have no policies of rescuing Greece from its woes, except policies that would lead to the exiting from the European Union and return to the drachma that would lead in turn to the absolute poverty of the country, deliberately drop the curtain on all hope on Greece as their sole aim is to sordidly profit politically by their investment in hopelessness.

The socialist party, Pasok, the main opponent of New Democracy, although on the side of hope, even under the new leadership of Evangelos Venizelos, is totally discredited, as it has been the party that led Greece to its present catastrophe by a bout of unbelievable and unprecedented economic and political mistakes, that Venizelos himself was involved in and responsible, during the last two years that was in government. Moreover, the latest decision of the High Court of Greece to apprehend and charge a former luminary of Pasok and right-hand man of Andreas Papandreou, the founding father of the Panhellenic Socialist Movement, Akes Tsohatzopoulos, his wife and daughter, and some of his relatives, with bribery and corruption and with being the receiver and beneficiary of millions of dollars as paid commissions, during his tenure as minister of defence, from German and Russian companies to which he had authorized major assignments and projects of his department, has indelibly marked Pasok as venally corrupt; particularly when its present leader Venizelos, at the initial investigations of Tsohatzopoulos, with the stentorian voice of the lawyer, that he is, was defending and exculpating from any knave dealings, and with the usual catch-all alibi of the typical politician, that the “accusation against Tsohatzopoulos was politically motivated.” Hence, inconceivable political incompetence and culpability, and unfathomable corruption on the part of Pasok, will be two major themes that will dominate the elections and which will ineluctably lead to new lows in the polls for the socialists.

In this critical economic and political setting that the country is in and the looming threat of the breaking of social cohesion, Samaras is asking the Greek people to give New Democracy the “auto-dynamism,” by a majority of votes in the elections, so he can have his hands untied to govern the country with decisiveness and clear uncompromised policies that would put Greece on the trajectory of economic recovery and development. He argues cogently, that in the present political situation of Greece when consensus about the necessary economic policies among parties of how to regenerate the economy of the country is absent, a coalition government–which is the designated position of Pasok and according to the polls at this moment the desire of a majority of the electorate–will be politically impracticable, and more importantly, would not drag out the country from its peril but would further engulf it into profounder depths; as one could not govern effectively a country in a crisis and gradually bring it out of it by being compelled to make compromises to one’s political partners, but only by a well-defined plan and decisive and prompt action to implement it without compromises, by a leader who has a strong mandate from the electorate.

Samaras believes, and reasonably hopes with the confidence of a statesman, that during the electoral period and closer to election date, there will be a dramatic shift of voters toward polarized positions, once the crucial issues of the country are spelled out clearly and without lies to the people by New Democracy and by foreshadowing the practical economic policies backed by real numbers that would put Greece on the track of economic recovery, there is a great chance that the majority of Greeks will give New Democracy a strong mandate to govern on its own for the benefit of all Greeks and for the salvation of the country.

Samaras contended long ago, that only through a clear strong authorization given to him by a majority of the people he would be able to radically change Greece. For real economic development entails not only good policies and incentives but a transformation in the views and customs of people toward such development. He puts great emphasis on the value of human capital and entrepreneurship as the prerequisites for the economic recovery of the country. That is why he has promised to re-legitimize private enterprise and effort that for many years now has been delegitimized in the country by communist-led unions, to whom profit has been, as always, the devil-incarnate of the capitalist free market.

The present high unemployment of more than 20% Samaras contends, will not be reduced by mere lower labour costs which already have been decreased by 15% in the private sector while the tax burden on the latter has increased by 50% and energy costs by 450%. Even if Greeks worked for free no one would hire them with such high taxes and energy costs. Samaras in his Zappeio III speech few days ago declared that he would cut corporate tax to a flat rate of 15%, sharply cut pay-roll tax, lower personal income-tax to 32% maximum, and reduce taxes substantially on fuel and tourism. This would harden rampant tax evasion and would unleash the creativity of the private sector and hence commence the gradual reduction in unemployment. He also announced, that he would increase the lowest pensions to 700 euros per month–that were reduced drastically by the second Memorandum under the austerity measures–and would increase the endowment of families with many children which would not only correct an injustice inflicted upon these two weak sections of society but would also have favourable economic consequence as they would increase consumer demand, which is so important in rekindling the economy, as both recipients of this government assistance spend their money in consumer goods. He would do these two things without increasing public expenditure and hence worsening the deficit, but by cutting government wastage that is so massive and profligate in the State’s spending. Further, he will provide incentives to private enterprise in areas where Greece has almost unchallengeable comparative advantage, i.e., in the merchant marine sector, ship building, and tourism; and in the production and merchandise of olive oil and other agricultural goods by the local producers themselves, not by foreign ones as is the case presently, whose development in all the above sectors will vitally affect the resurgence of the economy. He also proposes to provide incentives to entrepreneurs to exploit the rich mineral resources of the country and to give priority to find and tap the vast natural gas deposits under the Aegean Sea, by declaring the Greek AOZ (Exclusive Economic Zone) that could transform the export dynamic of Greece. He intends further, to reverse the present dryness of liquidity in the country by proffering amnesty from any legal penalties to those who withdrew their cash holdings from Greek banks during the height of the crisis and deposited them overseas once they bring them back to the country; and also by immediately paying back the 6.5 billion euros that the government owes to domestic enterprises; these two measures would increase the liquidity of the banks and hence their ability to provide loans to the private sector, especially to small businesses, that are the backbone of the country’s economy. Moreover, the re-capitalization of the banks, Samaras argues, will enable them to borrow funds at low interest rates from the European Central Bank, that were set up by it last December, which would be used to put Greece on the track of recovery and economic development.

It is by this method of supply-side economics, as that wunderkind Alders Borg the Swedish Finance Minister illustrated for his own country that Greece’s economy will rise again. The necessary austerity measures stipulated in the new Memorandum that Greece has to implement must be accompanied by the rejuvenated “animal spirits” of private enterprise. Samaras, consistently has been saying for the last two years that “we need a recovery to jump-start the economy,” and in conditions of recession austerity measures cannot stimulate the economy but on the contrary sink it deeper into stagnation.

The vision and plan of Samaras is to plant radical changes on the whole landscape of Greece. In his Zappeio speech he adumbrates constitutional changes that would separate the three branches of government the executive, the legislative, and the judiciary and thus prevent a member of parliament from being a minister, which has been in the past a malignant link of political corruption and has bestowed ‘asylum’ to members of parliament for their malfeasances. He pledges to bring changes to educational institutions that would reclaim the proud heritage of Greece that tragically has been eroded by the cultural relativists of a left coterie of pseudo-intellectuals and led to the disconnection of many young Greeks from their great cultural origins. He also promises to take drastic measures against illegal migrants, whom he calls “unarmed invaders” of Greece that under the soft immigration policies of Pasok they have occupied the main centres of cities, and remove them to provincial hostels until their eventual expulsion. Another important commitment of Samaras is to transform the bon vivant ethos of many Greeks, which up till now its tab has been picked up by the government, into a creatively productive one. On the new green tree planted by New Democracy, the singing cicadas will be replaced by fecund working bees. As Samaras is fully aware that sustainable economic development cannot be accomplished without transformative changes in the thinking and the mores of the people, especially of the younger generation.

Samaras is “framed in the prodigality of nature,” to quote Shakespeare. He is endowed charismatically both with a high intellect and remarkable moral strength along with the will and determination—all the stuff out of which statesmen are made–to change all things in Greece. But whether this lightning bolt of creative destruction will strike Greece or not depends on the strong mandate that he needs from the people. If Greeks do not fail, at this critical juncture, from fulfilling their historical duty to render to New Democracy a majority of seats in Parliament, then Antonis Samaras, in turn, will consummate the cultural political and economic Renaissance of Greece.

Hic Rhodus hic Salta

The Danger of Imitation Defeating Creation

By Con George-Kotzabasis

Knowledge is more poiesis (creative imaginative thinking) than mimesis. Friedrich Nietzsche 

Since the beginning of the Renaissance that emerged from the entrepreneurial, adventurous, and calculating spirit of the burgher and mercantile classes of the city-states of Southern and Northern Europe, all the great scientific discoveries and achievements sprang from an unprecedented uniquely fertile soil that was ploughed by the mental and indomitable spirit of an intellectual elite endowed with the cultural values of their unsurpassably rich Judeo-Greco-Roman heritage. Copernicus’ heliocentric system, Galileo’s “E pur si muove,” and Kepler’s elliptical orbits of the planets, were the invaluable harvest from that scientifically fecund soil. It was the bullish age of originality that no obscurantist cassock could possibly prevent from running toward its highest peaks; and the laws of Nature could not be suspended for the benefit of the Church, to paraphrase the sublime Edward Gibbon. It was this creative originality and fearless spirit of a few that since that time brought to the many throughout these centuries to our own, knowledge and enlightenment followed by a cascade of political freedoms and economic prosperity to the denizens of Western civilization. But while creative originality is the Cinderella of the scientific world no Cinderella is without her ugly sister, and in its case its ugly sibling is imitation.

In our contemporary times of the twenty-first century, all the scientific discoveries and innovations originating in the cradle of entrepreneurial capitalism in their imitating form are at the disposal of, and adopted and used by, a caste of Islamist fanatics whose sole and irreversible goal is the destruction of the West and its Great Satan America. Armed with the earthly scientific gadgets of Silicon Valley, and becoming ever more proficient in their use, the holy warriors of Mohammed are pursuing and implementing their heavenly agenda: The destruction of the infidel West and its replacement with the new Caliphate. And there is no paucity of recruits for this grand goal of the religious fanatics. In an incomparably  demographic outburst of growth the young teeming generation of Muslims under thirty, unable to find useful employment of their increasing social and technical talents in their poverty stricken countries whose natural wealth is sapped by their klepto-oligarchies, are full of envy and hate of their cognate young counterparts in the West who climb the ladder of their professional success to ever higher and higher heights, and who are profusely and meritoriously rewarded that opens to them the doors to an exuberant emulative consumption of goods and services that are beyond the reach of the Arab masses. For aeons Muslims having being educated and nourished by an incomparably proud culture and sanctimoniously blindly believing in a religion that is primus sans pares which vouchsafes only to its believers their entry to paradise, whilst the votaries of all other religions are to be cast into hell fire, have a propensity to see their regressive political, economic, and social status as an outcome of the political and economic dominance of the West, especially of the United States, which hampers and prevents their own development and growth. Hence for the leaders of fanatical Islam it’s not difficult within such a context to persuade vexed, acrimonious, and enraged young Arabs that all their ills issue from the rapacious exploitation of Western capitalism. By making a scapegoat of the infidel west they provide the motif to the disgruntled young Muslims to become terror-fodder for al-Qaeda and its sundry affiliates.

And once this ostensibly technically educated young along with those educated in the religious madrassas join the ranks of the jihadists they are trained to imitate all the military techniques and gadgets, i.e., computers and cell phones, and more ominously the use of weapons of mass destruction (WMD) including nuclear ones all originating from the cognitive fathomless streams and brain power of the ‘Silicons’ of the West. It’s this imitative adoption by the jihadists of the instruments of war that have been invented by western science that makes the holy warriors of Islam, who are hostis humani generis, most dangerous to civilized peoples, especially when these instruments are fanatically used by suicide bombers in pursuit of the seventy-two virgins. In the past asymmetrical power in conventional warfare was the ineluctable warranty that the weaker enemy would be subdued by the stronger. In our contemporary times this indubitable cannon that protected the strong and ensured their victory over a weak foe is reversed. Asymmetrical power used furtively, resolutely, and unconscionably can subdue a stronger power. The Islamist terrorists acting furtively and dressed in civilian clothes have become almost an invincible force. In the near future with the great potential of terrorists acquiring WMD and nuclear ones supplied by rogue states and attacking the metropolises of the West in a form of an encircling and in-depth concerted strategy,  they can paralyse and defeat even a superpower. No serious objective thinking can avoid from coming to this dire conclusion.

 The Presidency of Idealistic Premises

This is why it’s of paramount importance that the leaders of the West and especially of the United States must deal with, and confront, this ominous and incendiary threat unequivocally with all the diplomatic and military means in their disposal and deploy them remorselessly and relentlessly against such implacable and irreconcilable enemy. As in the art of war a sagacious strategist once he recognizes and discerns an intransigent foe he destroys him while he is still weak and does not allow him to become stronger.

Moreover in the case of fanatical Islam the West and the U.S. will be facing in the near future a ‘bacteriological’ enemy of epidemiological proportions if it does not defeat decisively the avant-garde of terror, i.e., al-Qaeda and its various fanatical offshoots, such as al-Sabaab of Somalia, Lashkar-e-Taiba in Pakistan, and the AFPAK Taliban. For if the Obama administration injudiciously decides to wrap-up its military engagement with the Taliban in Afghanistan this will be seen by radical Islam as a definitive defeat of the United States whose corollary will be a monstrously huge increase in Islamist fanaticism and a massive rallying point of its votaries to continue remorselessly their fight against the infidel West and its Great Satan America. It’s in this pool of Islamist success in the field of battle that fanaticism will be nourished and spread like unchecked deleterious bacteria and its host, in the form of suicide bombers, will ultimately threaten the existence of Western civilization.

That is why the United States that is involved in a relentless implacable war with fanatical Islam cannot quit the field of battle until all quite is in the jihadist front of war, until the holy warriors of Islam are defeated decisively. The question however is whether the Obama presidency of idealistic premises, in its attempt to placate and appease its irreconcilable foes by the ‘miraculous’ prowess of diplomacy—which demonstrably both in the Middle East and with Iran has been a total failure– is qualified to deliver this victory in the field of battle.  The omens rather are that President Obama has neither the sagacity, nor mettle and resolution, or inclination, to win this war against the jihadists.

Being an effete ‘Carteresque’ president, he is more prone to settle for an “endgame” of the war in Afghanistan than winning it by increasing the number of troops by forty thousand as requested by his general on the ground Stanley Chrystal. One can presage therefore without letting one’s guard down that President Obama in his coming decision on Afghanistan will reject General McChrystal’s core recommendation by falsely declaiming that the U.S. cannot deploy its sons and daughters and treasury in foreign wars with no end in sight that are not essential and tangential to America’s long term interests. But this will be tragically the legacy of the weak President Obama: By enfeebling American power against irreconcilable enemies he will be putting America’s vital interests at the greatest of risks.