Why Greek History Reminds Me of California and Illinois

From the WSJ, an article on how politicians who tried to point out the unsustainability of Greek finances years ago where not only ignored, but villified and marginalized.  Sort of like in places like California and Illinois.

In the past quarter century, Greece has had a handful of reformist politicians who foresaw the problems that are now threatening the nation with bankruptcy.

Their reform proposals were fought by their colleagues in parliament and savaged by the media and labor unions. They invariably found themselves sidelined....

Tassos Giannitsis is no stranger to this kind of war: His tenure as labor minister was more short lived, and the battles against him even more visceral. Mr. Giannitsis in 2001, again in the Pasok government led by Mr. Simitis, put forward a comprehensive proposal to reform the pension system.

Trade unions, opposition parties and Pasok itself unleashed menace on Mr. Giannitsis.

“Giannitsis was annihilated after his pension-reform proposals. There are few precedents for this kind of universal attack on a politician,” said Loukas Tsoukalis, a prominent economics professor here.

Mr. Giannitsis’s proposals, which would have reduced the pension levels Greeks receive and made the system overall more sustainable given the country’s demographic and labor-force trends, were never taken to parliament.

“From the fridge to the bin!” said the front page of newspaper To Vima on April 28, 2001, as the frozen pension-reform plan was scrapped for good.

“When I told my colleagues in the cabinet about the reforms I was proposing—which mind you were not the toughest available—the attitude I got was that I was spoiling the party,” Mr. Giannitsis said in an interview.

“They were, like, ‘everything is going great right now, why are you bothering us with a problem that may implode in a decade?’”

There are many other examples.



  1. Mole1:

    Clearly this must be wrong. We all know it is governments that take the long view and safeguard our futures while greedy capitalists only look at this year's profits while ignoring long-term issues.

  2. Joe:

    Most states protect pensions under a contract based
    approach. The Federal Constitution’s Contract
    Clause and similar provisions in state constitutions
    prohibit a state from passing any law that impairs
    existing public or private contracts.

    Anti pension reformers have argued that the contract clause of the federal and/or state constitutions prevent changes in future pension benefits for future services.

  3. joe:

    Follow up on my comment - courts have incorrectly treated compensation for future services in form of pension benefits as untouchable.

  4. esoxlucius:

    Illinoian here. We are the worst state in the union. Rauner is a ray of sunshine though. Unfortunately he has the house and senate against him. The unions own this place. The only thing that will change Illinois is our very own "greece episode". Socialism is great until they run out of other people's money.

  5. SamWah:

    Cassandra was doomed to speak truth, and to be ignored (and hated).

  6. SamWah:

    I just read at http://donsurber.blogspot.com/2015/07/greece-wins.html that there's been an agreement to allow the Greeks to dig themselves a bigger hole for Europe to fall into.

  7. Andrew Garland:

    What happens 10 years from now only matters if
    o One plans on being alive at that time
    o One plans on being in office
    o The politician plans on telling the truth about what happened to cause the crisis.

    Ironically, the more that things fall apart, the more that that a majority of the public call for government power. Crises are good things. Spending lots of money and bringing about a crisis is a two'fer. God truly favors the politician.

  8. Matthew Slyfield:

    "Ironically, the more that things fall apart, the more that that a
    majority of the public call for government power. Crises are good
    things. Spending lots of money and bringing about a crisis is a two'fer."

    Until the money runs out and angry mobs wielding pitchforks and torches descend on the politicians.

  9. Andrew Garland:

    I don't have your optimism. Greece has gone broke, yet its public supports its communist government.

    Detroit went broke and is in decay, still supported by its populace. Detroit shows that It Can Happen Here.

    Still, I hope you are right.

  10. Matthew Slyfield:

    Things haven't yet gotten bad enough in Greece. They keep managing to get bailouts from other countries at the last second. When it get's so bad that they can't make pension payments or they have gone off the euro and inflated their currency to the point it is worthless, that is when you start watching for pitchforks and torches. It isn't optimism on my part, I think Greece will get there eventually and blood in the streets is not a good thing.

    As for Detroit, you obviously haven't been paying attention well enough. Supported by it's populace? It's populace is heading for the hills as fast as they can. Go look into the population trends for Detroit, it is losing population at an insane rate. It could literally become the first modern ghost town and it could happen in our lifetime.

  11. Andrew Garland:

    Sorry, I have to keep up with things. I missed the news that Detroit and Greece had decided to throw out their Progressive/Communist governments and install conservatives. This, despite declines over many electon cycles.

    You have corrected me. I no longer think that you are optimistic about political change. You predict reform when Detroit becomes a ghost town or Greece falls into hyperinflated collapse. Yes, that isn't optimistic, and closer to my view.

  12. Matthew Slyfield:

    "I missed the news that Detroit and Greece had decided to throw out their
    Progressive/Communist governments and install conservatives."

    I never claimed that they have. Neither will ever do so peacefully. Greece isn't yet so far gone that blood in the streets is and immediate concern, but at this point I don't see any possibility of them avoiding that fate.

    As for Detroit, they have gone down a different path. The conservatives long ago gave up any hope of rescuing Detroit and simply left. The people who are left are the apathetic, the apolitical, and the hard core Democrats. However, many of the apathetic and apolitical and even some of the hard core Democrats are beginning to see the hand writing on the wall and getting out of town. Detroit will not go down in flames, it will die quietly in it's sleep from blood(population) loss. Last one to leave please turn off the lights.

    ETA: You claim that the government of the city of Detroit is supported by it's populace, Yet how can this be when every census and every other report on Detroit population in the last 50 years shows that it's populace is running away from it as quickly as they can? Do you run from a government you support?