ParisTampaBlog

Just as the French last week the Greeks are striking, and definitely not for the first time. The reasons of course are mostly the same as before, in this case the proposed austerity measures of the government, a draft law that would raise the retirement age, reduce monthly payments to pensioners, and facilitate layoffs.

Louisa Gouliamaki/Agence France-Presse — Getty Images
Protesters clashed with riot police during a strike against austerity measures in Athens on Tuesday.

Late Monday the head of the main civil servants’ union, Spyros Papaspyros, said that the Greek people, not just the union members, would never accept the proposed changes. “They violate the law and the Constitution and affect 95 percent of Greeks — there is no way they will pass.”

The two main labor unions, evidently representing some 3 million workers, vehemently oppose the measures. Now the entire population of Greece is hardly more than three times that number, so on the face of it the union workers would seem to represent nearly all the workers — non-working men and women, school children, retirees et al. probably making up most of the remaining 7 million Greeks.

What chance does Papandreou’s government have to lower the budget deficit by cutting worker and retirement benefits when the organizations representing most of the working population will go on demanding continual work stoppages rather than accept the government’s proposals? A snow ball’s chance.

Now the principal money making “industries” of Greece are tourism and shipping. Don’t the workers at least in the tourist industry realize that any strikes will reduce the revenues from tourism? And don’t they all realize that if the shippers are made to pay additional taxes the shippers will probably pick up and operate their ships under the flag of another country?

If there ever were a case of someone, in this case a country, of shooting herself in the foot this must be it.

How has it come to pass, as in Greece, but also in Spain, in France, in California even, that to a large extent, the people seem not to have ever encountered Economics 101, or the knowledge that their own livelihoods, not to mention medical and other benefits, and ultimately retirement checks, will always depend on there being large numbers of entrepreneurs and workers who continue to grow (the tourist services and the shippers, for example) the country’s wealth,…

and that the very first task of everyone, not just the government in response to European Union pressures, ought to be to assure that this goes on happening?

This is the sad tale of our times. The gross national products of too many countries of the developed world are stagnant, or growing too slowly to permit a significant reduction in existing budget deficits, not to mention extend new benefits and services to the rising populations everywhere of the needy and the elderly.

In Greece what will happen when the government cannot fulfill its promise to the European Union, and is unable to reduce its debt, the proposed austerity measures having been rejected by the people? They cannot sell more government paper, nor print more euros.

When the checks stop coming what will the people do? These are interesting times.

But it may also be that Spyros Papaspyros is just an actor in the latest comedy, and that when his bad boy role is played out, the people will go back to work.

Arnold Kling on his blog Econ Log writes:

“There seems to be more awareness now of what I call the two weeds that have grown in Progressive soil: entitlement spending; and compensation of unionized public sector workers. Greece seems to be an object lesson in what can happen if these weeds are left untrimmed for too long.”

I would say “new awareness” on the part of whom? I certainly would like it to be true that there be such new awareness, and in particular on the part of our Congressional and other leaders in Washington, including President Obama.

But I haven’t seen the evidence of it, only heard the voices from the Right, such as that of Kling, and the angry shouts of the Tea Partiers. I haven’t yet heard our leaders in power apply the “object lesson” that is Greece, to California, say, where retired police and firemen in their fifties are being paid annual pensions of hundreds of thousands of dollars.

Also, while agreeing with Kling’s point that entitlements and public sector compensations have gone wild I wouldn’t have called them two “weeds” growing in progressive soil.

Because they’re not weeds. Social security, medicare, medicaid do have value and there are few, if any Americans who now would want to tear them from our ground and discard them as weeds

These government programs are rather much more like those “indeterminate” tomato plants sold in the garden sections of Home Depot, Lowes, and other outlets.

These plants, just as these entitlement programs, if not carefully watched and disciplined, will quickly overrun your entire raised bed garden, crowding out everything else.

In any case that does seem to be what Kling’s “weeds” are now doing to our country’s budget, overunning it, and while doing so restricting our ability to address any of the many other more pressing needs that are out there and confronting us and demanding action.

Here I give you a few bits of wisdom concerning child rearing from a Saturday Essay, The Breeders’ Cup, in the Wall Street Journal of June 19th.

“If you enjoy reading with your children, wonderful. But if you skip the nightly book, you’re not stunting their intelligence, ruining their chances for college or dooming them to a dead-end job.”

“The same goes for watching television, playing sports, eating vegetables, living in the right neighborhood: Your choices have little effect on your kids’ development, so it’s OK to relax.”

“And once you realize that your kids’ future largely rests in their own hands, you can give yourself a guilt-free break.”

And if you’re a grandparent, like I am, I’m sure you’ll join me in saying, “If I had known grandchildren were this much fun I would have had them first.”

So, is the author, Brian Caplan right? Do we really have little or no influence on what our children become? Without going quite as far as he does I would say yes.

The evidence is on his side. What the children become in most cases cannot be attributed to the actions of the parents. Parents, of course, do not believe this and go on being soccer moms and fervid adherents to Sylvan Learning Centers, Kumon, and Suzuki violin lessons.

So if you’re a parent what should you do? Caplan has this right when he says, “If you create a loving and harmonious home for your children, they’ll probably remember it for as long as they live.”

One has trouble, I have trouble understanding General McChrystal’s agreeing to be interviewed by the reporter for Rolling Stone Magazine.

Why? Because the General is our President’s man in charge of the war in Afghanistan, now in its ninth year and without an end in sight. And the President’s man doesn’t do Rolling Stone interviews.

So given the interview one has to wonder if the General, incredible as this may seem, understood his own position and what this meant in regard to his own behavior in public.

First there was his position as the designated leader of our armed forces in Afghanistan. How could he not have understood that a free-wheeling Rolling Stone interview would be anything but detrimental to the war effort, probably reducing his own chances, as the leader of that effort, to succeed?

And then there was his subordinate position in the chain of command to the President. For in spite of his attitude and actions this wasn’t his war.

How could he not have understood, not been aware that the interview would have been seen as a flagrant disregard of not only this President’s, but any President’s authority?

Now during the time of the General’s Rolling Stone Interview Errol Morris was posting daily, five altogether, pieces in the Times, all about what he called the Anosognosic’s Dilemma, the dilemma being that although something may be terribly wrong we may not be aware of it.

The first to use the term (from the Greek  meaning no knowledge of an illness, or “nosos”) was the French-Polish neurologist Joseph Babinski

who in 1914 used it to describe what he saw when patients with a complete paralysis of the left side of the body didn’t know they were paralyzed and even believed they were moving their left hand or leg when they weren’t.

Well it occurred to me while reading Morris that this was how I could make some sense of the General’s behavior. Couldn’t he also be seen as a victim, as suffering from the Anosognosic’s Dilemma?

Just as the hemiplegic would go on “moving” (not moving) his left arm and hand, so the General evidently went on believing that he was leading the war effort for his President even while in the irreverent company of his closest aids and talking simultaneously with them and with the interviewer from Rolling Stone for later publication.

I have to understand what happened as the General not being aware of what he was doing. He certainly acted as if he weren’t, as if he didn’t know that his words and the disrespectful remarks of his staff regarding the civilian authority would be seen as totally irresponsible, totally detrimental to the war effort, and ultimately undoing his own position as the leader of that effort.

In this case the nosos, or illness, was his own ignorance of the meaning of his words and action. Clearly the General had reached the very top of his profession without having learned that the positions awarded him along the way, and in most instances probably having earned them, came with their own code of responsible behavior.

Will he ever again be in a position in which he can demonstrate a new found awareness of that code? His chances in that respect may be no greater than those of the hemiplegic becoming aware of the existence of his own paralysis.

Why did I never hear about this before now? What is it? According to Wickipedia

“The Dunning–Kruger effect is a cognitive bias in which “people reach erroneous conclusions and make unfortunate choices but their incompetence robs them of the metacognitive ability to realize it.”

“Metacognitive,” that’s knowing about knowing. People are not aware, all people, of their incompetence. And with all due respect to Steven Weinberg there is and will be no final theory. We’re destined to continue stumbling along, and some of us while doing so thinking that we’re the smart ones.

Last week BP’s embattled chief executive, Tony Hayward, was criticized for attending a yacht race (while, of course, his oil continued to gush into the Gulf waters).

This week, in the picture below, we see President Obama at Ray’s Hell Burger in Arlington, Va.  enjoying a hamburger and fries with President Dmitri Medvedev of Russia.

While the two presidents chatted, clearly enjoying themselves and the burgers while gently readying themselves for the G-20 Summit meeting this weekend in Toronto, wars in the North Caucasus and Afghanistan continued to rage.

Of the three, the millions of barrels of oil spewing into Gulf waters, the fighting verging onto civil war in Chechnya, Dagestan, Ingushetia, North Ossetia, and the other North Caucasus republics, and in Afghanistan the seemingly inexhaustible Taliban fighters tying down some 100,000 American troops onto bloody, inhospitable lands, while simultaneously  terrorizing the long brutalized (and terrorized) Afghan population, — the oil may well be the least destructive.

In any case the leaders of our world probably do just as well to enjoy themselves, at yacht races and at Ray’s Hell Burger. For there’s probably nothing they can do, no steps they might take, by what, by remaining on the job, —by Tony’s remaining on a BP platform in the Gulf, to improve either these sores of our civilization, or any number of others.

The French are again on strike. Here they are, in Marseilles, protesting, that which, along with cheese and wine production, they do as well or better than anyone else.

And why are they striking? In order to bring down spiraling budget deficits Sarkozy has proposed raising the retirement age from 60 to 62.

The Unions say additional monies for the pension system should not be taken from their present benefits but rather from new charges (taxes?) on those who are still working. Yes, they did say this.

Economists, politicians, President Obama, my next door neighbor, people of all stripes talk about job creation, and how important this is. And it’s true. It is important, especially when nationwide unemployment is at a generational high and people without a job, or without steady employment are losing first their savings and then their homes.

Also, it’s no secret that more people employed means more people with more money to spend, more consumption, more productivity and more government tax revenues.

And it’s probably also true that all together all this might even mean more happiness as things get closer to just how the Declaration would have it, — our being in possession of life, liberty and the pursuit of happiness (read property if you’re a follower of John Locke, and a good job).

However, the mediocrities who frequent the halls of Congress, while they may have their constituents in mind when they talk about job creation, probably have much more in mind their own job security. For a rise in employment numbers means a corresponding rise in government revenues, resulting in their having more tax payer monies to spend, that giving a substantial boost to their own job security.

Not often mentioned in the constant chatter about job creation, especially not alluded to by the politicians, is the fact that any new jobs created result from just one of two processes, the one public and the other private.

Governments are the public source of jobs. Governments create jobs, as in the thirties by the various New Deal work projects, as in more recent times by increasing the numbers of our service men and women sent to wage war in Iraq and Afghanistan, as now and always by adding to the rolls of the present millions of federal, state, and local office workers, and as at the present time by injecting huge amounts of stimulus dollars into the economy intended to fund shovel ready and other federal and state work projects (the latter being the means most often favored and promoted by leftward leaning economists).

In the private sphere individuals can and do create jobs. They may do so either by expanding old or starting new businesses, and in the process producing additional products for market, products that people will want to buy, thereby bringing about additional hiring as greater numbers of workers are needed (somewhere, but not necessarily in this country) to meet the new demand.

Most important, and what is not often mentioned by the politicians including the President, is that the public jobs created produce no new wealth. For all the money going to finance the new positions, —mostly government positions needed to manage and maintain the new and/or expanded government programs— all of this money must either be borrowed or come from the private sphere in the form of new taxes.

This sort of job creation represents not a growth in, only a redistribution of the country’s wealth.

Now this situation is not new. For most of the country’s history this has been the normal and non-threatening way of doing things —the private sphere giving up just enough of its wealth to insure that the government is able to maintain, and when necessary create, the desired government services.

And in fact, as long as the number of people employed by the government was considerably less than the number of people privately employed things went swimmingly.

For most of our history government tax revenues did not represent a significant amount of monies taken (and not without representation) from the people, monies that might have been used for important investments and often job creation in the private sphere.

For most of our history the private economy was both large enough to go on growing itself and thereby creating new wealth as well as subsidizing without risk to itself the costs of government.

But this may no longer be the case. And hence the growing amount of chatter regarding budget deficits and out of control entitlements, the principal cause of the deficits, endangering the lives and livelihoods of future generations by leaving them huge burdens of debt.

Things have gone even further in the European Union. In these countries, many of them, the public or government created and funded positions now outnumber newly created positions in the private sphere. And more and more one looks to government to solve the problem of high unemployment.

That fewer and fewer individuals are accounting for new job creation in the private sphere might not in itself be an impossible situation. For there is no absolute limit to the number of people that one highly inventive and productive individual might support. Witness the “robber barons” of the 19th. century, and the tech giants of our own time.

Also, this is what happens in most families where only one or two members are working and bringing home whatever now-a-days is the bacon, and where the many in the family, as in society at large, eat the bread provided by the few.

The problem arises when the majority who are not growing the country’s wealth band together and use their majority position in respect to numbers not to support and grow the entrepreneurs or job creators who are out there, but to protect their own non-productive positions and entitlements.

We see this today in Greece and France when unproductive majorities demonstrate in the streets and use, or threaten to use their majorities in the polling booths to bring down the governments that try, given the size of their budget deficits, to limit if not take away entitlements, having realized finally, unlike the population, that the private sources of public revenues on which they had always depended were not inexhaustible.

Just the other day the French center-right government of Nicholas Sarkozy proposed raising the retirement age two years, from 60 to 62. That which was, as it seemed to me, a thoroughly reasonable step given the high French debt to GDP ratio and the bleak economic outlook for future GDP growth. And right away we heard that a super majority of French citizens was adamantly (violently) opposed to the proposed government action, placing Sarkozy’s initiative, as well as his government, in jeopardy.

Does all this mean that now most people, in this case in the country France (but we’ve seen that this is also true in any number of other European Union countries) rely principally on the government for their economic well-being? Furthermore, if government subsidies and other benefits and entitlements  represent a growing, now perhaps the largest and certainly the most secure portion of the people’s income, why would the people ever do anything to limit the size of their government that which would bring along with it a reduction in their own benefits?

Let me conclude my comment regarding jobs and job creation with an observation along the same lines by Arthur Brooks from an opinion piece in the Wall Street Journal of June 5th.

Today, the average federal worker earns 77% more than the average private-sector worker,…. To pay for bigger government, the private sector will bear a heavier tax burden far into the future, suppressing the innovation and entrepreneurship that creates growth and real opportunity, not to mention the revenue that pays for everything else in the first place.

If these trends are not reversed, it is hard to see how our culture of free enterprise will not change. More and more Americans, especially younger Americans, will grow accustomed to a system in which the government pays better wages, offers the best job protection, allows the earliest retirement, and guarantees the most lavish pensions. Against such competition, more and more young, would-be entrepreneurs will inevitably choose the safety and comfort of government employment—and do so with all the drive that is generally thought to be “good enough” for that kind of work.

What will happen as our increasing number of state employees confront a shrinking private-sector tax base? Just look to the streets of Athens.