Thursday, July 30, 2015

Blaming the Victims -- German Style versus U.S. Style

by Neil H. Buchanan

Today, Verdict published Part Two of my two-column series analyzing the Greek/euro disaster.  Part One, published on Tuesday, was devoted mostly to describing the simple economics of the situation, as well as the baselessness of German claims that "playing by the rules" means never, ever renegotiating debts.  (I was gratified to see that the economist Joseph Stiglitz simultaneously wrote an op-ed for The New York Times which was fully consistent with my analysis, and which made further important arguments.)  My associated Dorf on Law post, also published on Tuesday, further developed the point that many types of debt are (and should be able to be) renegotiated all the time, both as part of formal bankruptcies and in ongoing party-to-party dealings.

Today's Part Two considers three additional issues: (1) the possible (horrifying) consequences -- for Greece, Germany, Europe as a whole, the U.S., and pretty much everyone else -- of the political crisis that Germany's leaders have self-righteously set in motion, (2) the ridiculously unfair treatment of the Greek government by tut-tutting European elites, and (3) the odd notion that somehow the Greek people deserve group blame for the purported failures (exaggerated and irrelevant as they may be) of their government over the decades, and thus that they must all suffer now.  Obviously, I hope that readers here will choose to read those arguments in full, at the links above.

At the end of today's column, I added the following parenthetical: "Note: At the end of Part One of this series of columns, I wrote that as part of today’s column, I would 'explain a disturbing parallel between the moralizing that Europe’s leaders have used to condemn Greece’s people to years of pain and ideologically similar victim-blaming in the United States.' Because of the length of today’s column, I have decided to move that discussion into a blog post today at the Dorf on Law blog."  Here goes.

Almost three years ago, I published a Verdict column in which I explained how the current leadership of the Republican Party can be accurately described as "sociopathic."  I subsequently developed that idea in a number of posts here on Dorf on Law.  (One good example can be found here.)  I did not use the word "sociopathic" loosely, in the manner of too many right-wing pundits who accuse liberals of "treason," or Republican politicians who expand the definition of "communism" to the point where an increase in the capital gains tax is described as tantamount to setting up a gulag.  Instead, I relied on well-established clinical definitions of the concept of sociopathy, using examples to show how the current slate of Republican leaders disturbingly fits into that definition.

Among those examples, one struck me as especially egregious.  Former House Majority Leader Eric Cantor, in budget negotiations during one of the contrived debt ceiling crises, decided to insist on reducing (among many other things) financing for nutrition programs for the poor.  Those nutrition programs, already quite tiny, are aimed specifically at helping children obtain enough food to be able to grow and develop normally.  Even in terms of cold cost-benefit analysis, this is one of the best things that the government could possibly be doing, because early childhood nutrition supports brain development and allows children to grow into mentally and physically healthy adults.

Yet the Republican leadership decided that their line in the sand would be based on the idea that it is essential to take food out of hungry people's mouths.  The only possible argument that I could imagine to support such a cruel approach is that these children will benefit if their parents -- faced with the loss of government-provided nutrition -- will suddenly be motivated enough to find the jobs that they supposedly have been lazily refusing to seek.  This would, presumably, also make poor children better off because they would see adults who set a good example by working rather than "taking."  (But I should note that, in the "takers versus makers" view of the world, even people who have jobs are takers.  But I digress.)

Of course, there have not been enough jobs for people to fill, no matter how motivated they might be.  In addition, many of the jobs that are available pay so little that they cannot support a family.  (The infamous example of Wal-Mart employees being so poor that they qualify for Food Stamps -- which Republicans want to cut or even eliminate -- is only the tip of that iceberg.)  But in any case, what if a child is unlucky enough to be born to parents who, for any of a number of reasons, will not do what is necessary to make up for the lost nutrition assistance that was helping to feed their children?

In this context, then, blaming the victims comes in two parts.  First, the people who cannot get jobs are told that they are losers for not being able to find jobs.  Their plight is their fault.  Second, and even more disturbingly, children whose parents fall into the first category are left to suffer, because of who their parents are.  And those same children, many of whose brain development is harmed by the lack of adequate nutrition during key growing years, are then sent to inadequately funded schools, which is again apparently the fault of their parents for not being able to afford to move to Scarsdale, Wellesley, Chevy Chase, or Winnetka.

On a related note, one of my former students once told me that she ended a friendship during the debate about the Affordable Care Act.  Her friend insisted that the government should not provide health care to anyone, because poor people need to be motivated to get jobs.  My former student pointed out that many people with jobs, even seemingly good jobs, could not get health insurance.  She mentioned in particular her parents, who were both school teachers in religious schools in the South.  Her now-former friend's response: "Well, my parents loved me enough that they took jobs that would allow them to give me good health care."  As I said, end of friendship.

In today's Verdict column, I point out that the German leaders' approach to debt negotiations is that a deal is a deal, no matter how that deal was made, and no matter who is hurt by it.  I included one especially vivid example, referring to an American academic's conversations with some German economists: "Debtors who default, they explained, would simply have to suffer, no matter how rough and even unfair the terms of the loans."

One might describe my argument at that point in the column as simply a long paraphrase of a famous catchphrase from a "Simpsons" character: "Won't somebody please think of the children!"  Essentially, the German argument is that unemployment rates in Greece (and Spain, and Portugal, and ...) in excess of 50% for young people are the necessary consequences of their parents' bad deeds.  Although I disagree with the assertion that the parents engaged in bad deeds (at least, not the vast majority of middle- and lower-class Greeks, who have been the victims of a kleptocratic class that now is fleeing the country with its ill-gotten riches), where does anyone come off saying that a 23-year-old Greek deserves to have no economic future, merely because some older Greeks are trying to renegotiate the country's debt in a way that allows everyone (including Greece's creditors) to be better off?

Apparently, the problem with Greece's young people is that their parents did not love them enough not to borrow money from Germany, or more accurately, not to anticipate that German leaders would unilaterally impose after the fact a dangerously narrow and ahistorical notion of "playing by the rules."

Interestingly, in my research into the ethics of intergenerational justice, I discovered that the German constitution is one of the few governing documents in the world that specifically requires the government to take into account how its policies will affect future generations.  (That provision is apparently a dead letter in practice, but stay with me here.)  Today's German leaders have apparently concluded that the best way to provide a better life for future generations is to make it impossible for the debts owed to German taxpayers ever to be repaid, and to obliterate decades of work by earlier German leaders to rebuild their country's reputation as a responsible and enlightened global leader.  Meanwhile, those Southern Europeans -- and their children -- are left to suffer in a virtual debtors' prison.


Samuel Rickless said...

Hi Neil, I completely understand the points you are making, and I agree with them. But I think there is a dimension of the EU's and the IMF's response to the Greek crisis that didn't come up in the Verdict pieces. I haven't kept up with all your contributions on this topic (my bad), but I'm wondering now what you think about the following.

If you look at the details of the plan that Tsipras has accepted, you see a number of significant reforms, not just to the way taxes are collected, but also to the way in which the economy is run. One reform involves eliminating or restricting the guilds that cause tightness in the labor market. (Note: It is possible to be pro-union and anti-guild.) Another involves reducing the number of jobs in the civil service sector (mostly because there are way too many jobs in that sector relative to the number that a productive economy should be sustaining). Another involves eliminating de facto and/or de jure tenure for many different types of government jobs. Another involves banking reforms that rationalize the way loans are made, thereby reducing the influence of cronyism and corruption. Another involves turning over the ports and airfields to the private sector, which has a proven track record (at least in Europe) of running these operations far more efficiently than the state. Another involves raising the VAT to collect more money from the people (in part because the culture of hiding income is so strong that there is no more effective way to collect taxes than through the equivalent of a sales tax), but the proposal is clear that necessities (food, medications, etc) are subject to far lower VAT rates than other goods.

All of this suggests that, when one gets down to the nitty-gritty, part of the point of the plan is to take the opportunity of debt-dependence to produce substantial and desirable changes in the Greek economy, changes that will make it self-sustaining in the long run and without which we can expect more of the same corruption and cronyism that has infected the way Greeks do business for decades. (Greece ranks high on perceived corruption indices, as I understand.)

So my thought is that the moralism of the Germans and the pleas for democracy from the Greece are really, in the end, so much window-dressing. What is really going on under the hood is much more practical. Does this seem right to you?

Neil H. Buchanan said...

Hi Sam. Thanks for your comments and insights. I'm likely to respond at length in one of my posts this week. I appreciate your engagement with the ideas.