Noman remembers laughing heartily as a young squirt at the lame joke a about Greece being located next to Turkey. The possibility of it sliding out of Europe, however, is no joke as explained by Josef Joffe in this moring's European WSJ.
Greece's problem is not just liquidity, which could be solved by injections from abroad. Rather, Greece's debt crisis is rooted in its economic fundamentals, and nothing short of fundamental reform could improve its long-term prospects under the euro. Here are some telling numbers: While unit-labor costs in Greece have shot up 15 percentage points since 2005, they rose by only five points in Germany. To restore their lost competitiveness, Greeks and their government would have to agree on a new social contract between them, one that demolishes market barriers and privileges, and in particular those that coddle a bloated public sector that makes up 25% of the work force.
But how many societies could bear such a revolution, especially one ordered by foreigners? Last year, facing the prospect of even modest reforms, the Greeks answered with bloody riots to protest the demands of their supposed tormentors abroad. This year, Greeks are doubling down on their bet against their own ability to change, and are cleaning out their bank accounts and dispatching their euros to Switzerland and Britain—or to their own bedrooms, underneath their mattress.
The line about the bloated public sector being reigned in by foreigners reminded Noman of the US. The foreigners in that case are the tea partiers, who, by all media accounts, are some weird and alien presence in the US body politic. What could be stranger than taxpayers who are fed up with Socialist self-dealing to the point of protesting about it? Gasp.
But, we're talking about Greece here, and implicitly about Germany. The cushy Greek lifestyle is lived courtesy of hard-working Germans who are getting tired of footing the bill. Sound familiar?
At least in the German case, Greeks can buy German exports. So, they get something back for their largesse. What do Wisconsin taxpayers get for $106,000 per year school teachers (before medical, pension and early retirement benefits)? They get their children turned into little Trotskyites who worship whatever Democrat happens to be in the White House, and who burn with a passion for "social justice" along the lines of bigger government and higher taxes. Oh, and let's not forget abortion-on-demand, gay marriage, euthanasia and all those other social blessings so precious to lefties, who champion only "freedoms" that turn people into slaves.