Inequality.org

connecting the dots on a growing divide

Class Warfare in Greece

The right wing in America and abroad never tires of trotting out the accusation of “class warfare” anytime anyone tries to raise taxes on the rich — or even tries to prevent those taxes going down.  Yet despite decades of accusations of “class warfare” taxes on the rich are lower than at anytime since World War II, almost everywhere in the world.  If there’s a class war going on, the rich are surely winning.

Nowhere are the rich prosecuting their class war against the rest of society more ferociously than in Greece.  The pro-rich parties won a wafer-thin majority in the June 2012 elections.  Now they are using their majority to push through so-called “reforms” to decimate services to the poor and working classes.  By a vote of 153-147 the Greek parliament cut the wages of government employees more than 40%, cut government pensions by up to 25%, and increased the retirement age by two years.

Greek conservatives are willing to destroy the Greek economy if that’s what it takes to drive down wages and benefits for the poor and working classes.  The economy has already contracted by 20% since the beginning of the crisis.  Government cutbacks are largely responsible for turning a recession into a national catastrophe.  With more than 25% of its workforce unemployed, Greece is rapidly turning into a poor country.

When one-quarter of the population is out of work, you can only blame the government.

When one person is out of work, you can maybe blame the person.  When one-quarter of the population is out of work, you can only blame the government.  Someone with no background in economics or economic history might argue that austerity is the right response to a recession.  But no one can argue that after four years of austerity what Greece needs is more austerity.

Of course, one day the crisis will pass.  People will go back to work, and Greece will start growing again.  When that day comes, the government will claim that its austerity program generated the ensuing growth, just as the governments of the Baltic states are making such claims today.  That’s plain ridiculous, but it will happen.

It’s predictable because the best way to be sure of growth in the future is to cause a depression today.  If you put 25% of your population out of work, 15% unemployment will seem like an improvement.  Improvement, yes; good policy, no.  Greece needs jobs more than it needs a balanced budget, and if it needs a balanced budget the best way to do it is by taxing the rich, not squeezing the poor.

But the rich don’t like that answer, and for now the rich are in power.  God help the Greeks.  It’s going to get worse — much worse — before it gets better.  Even when things get better, they won’t be anywhere near as good as they would have been had the government pursued sound, pro-people policies.  It’s a class war … and the rich are winning.  They may already have won.

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