I began writing a response that became too large to send as a reply on Facebook, hence the birth of this blog.
Gross
To put it simply, the article disgusted and angered me. In a nutshell, I think it's a ridiculous and dangerous piece of neoliberal propaganda. Imagine the average reader flipping through Vanity Fair: Like almost everyone else in the world, they know that some sort of global financial crisis and recession is going on, and there are a lot of confusing and often contradictory explanations out there. They've seen headlines about Greece going bankrupt and here is a satisfying and easy to understand explanation: The critical state of Greece's finances is the fault of everyday Greek people, who are corrupt and lazy. Not only is that bullshit, it attempts to mask the fact that Greece's situation is part of a larger crisis of the entire capitalist system.
Like most good propaganda, it contains a smattering of truths and noble principles: The article touches on issues of fairness, collective purpose and freedom which I obviously also subscribe to. He also says some scathing things about Greece and Greeks which I could have written myself:
Many government institutions (the railroads, schools, heath system, etc) are paragons of corruption, inefficiency, and waste. Next, he mentions the culture of bribery, which definitely exists. Tax cheating – again yes, most Greeks under-report their income and try evade other forms of tax with varying degrees of success. Having said that, I'm also prepared to bet that large corporations and the rich do best at this activity. Finally, he talks about the attitudes Greeks take to fellow Greeks: “The hardest thing to do in Greece is to get one Greek to compliment another behind his back”... “Everyone is pretty sure everyone is cheating on his taxes, or bribing politicians, or taking bribes, or lying about the value of his real estate.”... “Lacking faith in one another, they fall back on themselves and their families.”.
So far, so good. The story of the monastery and the monks is interesting, and he chose choose it as his angle because the scandal it caused in Greece came to symbolize the types of behavior he argues caused the crisis. Essentially, his argument is that hospital workers who steal paper towels, other workers with similar attitudes, tax cheating, bribery, and selfish and suspicious attitudes are the explanation of Greece's financial crisis.
Wrong
First, I want to refute several of his points.
In a sleight of hand that would impress the head of the Greek National Statistical Service, he states that Greece's national debt amounts to a quarter-million dollars for each working adult. To create that figure, he takes the national debt (about 400 billion dollars) and then conveniently adds an additional 800 billion in pension obligations. National debt and pension obligations are not the same thing! The issue as to whether or not Greece (or any other country) will default on its debt refers only to the 400 billion dollar figure. Not being able to fulfill future pension payments to its own citizens is a separate issue being faced by many other countries. The author conveniently conflates the two in order to sensationalize his argument in the opening paragraph.
Using the actual figures, I calculated debt per person for both Greece and for the U.S:
US population: 307,000,000. National debt: 13.2 trillion dollars.
U.S. debt per person: about $43,000.
Greek population: 11,200,000. National debt: 405.7 billion dollars
Greek debt per person: about $36,000
Don't get me wrong, I'm not trying to say Greece isn't in trouble. But if debt per capita was the only issue here, Greeks should be writing scathing articles about how Americans don't work hard enough to pay their national debt.
You might be surprised to see who the world's biggest debtors are: Germany, Finland, France, Austria, Norway, Hong Kong, Belgium, Switzerland, the U.K. and several others are ranked ahead of Greece.
Clearly, the author's argument that national debts are generated by character defects is lacking something.
A small aside: whilst reading about trillions of dollars, I found a nice aid to visualizing the amounts of money involved.
Another offensive part of the article points to lazy Greek workers who retire at age 50. There are some excellent sources of information refuting his point, so I'll just link to one rather than copy and paste. The gist is that Greeks on average work more hours than their European counterparts and retire slightly later.
He then goes on to point out that “The average government job pays almost three times the average private-sector job.”. I have no idea where he got that figure from, as he doesn't say. However, the previous link about lazy workers also quotes Eurostat revealing that Greece has the most underpaid private sector employees in the Eurozone, so it wouldn't surprise me if government wages actually were substantially better. Government wages on average are not very high though (although there are definitely scandalous exceptions).
Finally, the article is full of subtle exaggerations, using phrases like “riot-stricken Athens”, “planned riot” and “the collapse of civic life”. It seems to me like painting a picture on a nation of unimaginably hit by its own greed and sloth was higher on the author's agenda than giving a realistic picture of daily life in a country where everyday people who had very little do with creating the crisis are standing up against cuts in already low wages and interventions from institutions like the IMF.
Misleading
I also want to take some quotes from the article and deconstruct them.
“The structure of the Greek economy is collectivist, but the country, in spirit, is the opposite of a collective. Its real structure is every man for himself. Into this system investors had poured hundreds of billions of dollars. And the credit boom had pushed the country over the edge, into total moral collapse.”
How is the structure of the Greek economy collectivist? He doesn't even explain the term. Whatever the structure is, we're now supposed to feel sorry of all the poor investors who like good fathers poured “billions of dollars” (where did he get that figure from?) into this hateful country. Next, he even more boldly proclaims that the resulting “credit boom” (what exactly is he referring to?) pushed Greece into “total moral collapse”. The ridiculous implication is that when Greeks were confronted by the wonderful fruits of foreign investors, their weak moral fiber led to them being overwhelmed by the riches they saw and turned them into greedy immoral animals.
The idea of morals comes up frequently in the article actually. I wish he would elaborate a little more on it. How exactly is Greece past the brink of moral collapse? Are there more murders or divorces or abortions whatever other criterion he's choosing than in the U.S? Is he talking about Christian morals? I thought this was supposed to be an article about economics. If he thinks the global financial system depends on all participants being a moral Christians, I'd say he's missing something.
“For most of the 1980s and 1990s, Greek interest rates had run a full 10 percent higher than German ones, as Greeks were regarded as far less likely to repay a loan. There was no consumer credit in Greece: Greeks didn’t have credit cards. Greeks didn’t usually have mortgage loans either. Of course, Greece wanted to be treated, by the financial markets, like a properly functioning Northern European country. In the late 1990s they saw their chance: get rid of their own currency and adopt the euro.”
Here, the author grabs one fact (interest rates in the 80's and 90's), adds an unrelated one (no consumer credit), mixes it it in with a cynical and derogatory opinion (Greeks wanted to be treated like grown-ups, not backward peasants who didn't know what a credit card was), and then concludes with another slap in the face (they're opportunists who craftily decided to abuse all those other nice European nations to achieve that goal).
What's the big deal about the lack of consumer credit in Greece in the 80s and 90s? Many people argue that Americans' use of credit cards and mortgages is a mass cultural hallucination that allowed people to continue to be good consumers during the post 70s era where real wages flattened out and the cost of living continued to rise. In fact, the current crisis is often described as the “credit crunch” and is deeply connected to consumer credit and mortgages. But now, because it suits the author's smear tactics, he uses the lack of consumer credit in Greece in the 80s and 90s to make Greeks look stupid and backward.
He then extends the insult by suggesting that Greeks looked to their “properly functioning” neighbors and wished that they could be more like them. Germany has recently adopted record austerity measures, as has the U.K. Are they not “properly functioning” countries?
“Oddly enough, the financiers in Greece remain more or less beyond reproach. They never ceased to be anything but sleepy old commercial bankers.”
Sure, the Greek banks didn't go quite as bat-shit crazy as U.S ones. They can't claim credit for inventing derivatives, subprime mortgages, and credit default swaps. But the implication here is that if the banks didn't trigger the crisis, then the only other scapegoats could be the Greeks, their government, or both. There is no mention of the global crisis whatsoever. Also, “sleepy old commercial bankers” is quite a hilarious phrase. As Henry Ford put it earlier last century “It is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.” I wonder on which side of that revolution Mr. Lewis would find himself on.
(Describing the grand monastery) “In the old days, pirates routinely plundered them, and you can see why: it would be almost shameful not to, for a pirate.”
This made me laugh. It's practically a Freudian slip in which he exposes his gut reaction to seeing grandeur and wealth: wanting to greedily grab it. Luckily, he tacks on “for a pirate” to save it at the last minute.
"But this question of whether Greece will repay its debts is really a question of whether Greece will change its culture, and that will happen only if Greeks want to change."
Again, this isn't simply about a country paying off its national debt. Paying off your national debt isn't a sign of a good country. If that were so, the U.S wouldn't have a higher per-capita debt than Greece. Once again, he doesn't miss a chance to paint an incorrect picture and then self-righteously pin the blame on the Greek national character.
"All sorts of things that might be more efficiently done by other people they do themselves; all sorts of interactions with other countries that they might profitably engage in simply do not occur."
This to me seems to be a slightly muddled version of the typical neoliberal line of “The problem is that the markets aren't open enough. More services should be outsourced to outside organizations (no doubt U.S multinationals) that are more efficient.” It's shameful to make general, biased, muddled statements, give no sources, numbers, or examples, and slander an entire people. Is there anything wrong with a country managing its own infrastructure? I'm sure the word “nationalization” gives the author goosebumps. Furthermore, several recent major infrastructure projects (the Athens metro and Attiki Odos highway) were constructed and are operated by German companies.
(talking about the Marfin bank burning) “If there were any justice in the world the Greek bankers would be in the streets marching to protest the morals of the ordinary Greek citizen.”
This is arguably the most disgusting, shameful, and misguided comment in the entire article, and that's saying a lot. Ordinary Greek citizens were outraged at the burning of the bank and the deaths that resulted. A close friend of mine who peacefully participates in all major protests is constantly disappointed and frustrated at the violent actions of a few that overshadow the peaceful presence of the tens of thousands present, as well as endangering their safety (cops often use similar incidents to indiscriminately assault protesters).
Furthermore, the people who lost their lives in the bank were not Greek bankers. They were their employees: Underpaid, and too afraid to go on strike for fear of losing their jobs. Even with most of the country shut down, they were still expected to turn up to work. The idea that bankers should march to protest the loss of the lives of their employees is relatively inoffensive, but to say that bankers should be protesting the morals of the ordinary citizen is nothing short of abhorrent.
Finally, I was intrigued by how the author portrays the IMF as the grown-up voice of reason, although it came as no surprise. The IMF is exactly the institution that furthers the neoliberal economic agenda that the author obviously personally subscribes to. Anyone who doesn't know much about the political and economic disasters (with all their ensuing human misery) that the IMF was wreaked worldwide should read “The Shock Doctrine” by Naomi Klein.
About the Author
So, who exactly is Michael Lewis? Perhaps knowing a little more about the person who wrote this travesty of an article might help explain his psychology and motives. I started with his bio linked on the Greece article.
It mentions a book of his about the 1996 presidential campaign called “Losers”, the introduction of which is available for preview online. It turns out that his insight and participation in politics is thanks to the Republican party: he briefly traveled with Dan Quale (vice president during the George Bush Senior years of 1989-1993) as a campaign journalist in 1992.
Another book of his, "The Blind Side", is "the story of an African American kid living on the streets of Memphis whose life is transformed after he is adopted by white evangelical Christians". How condescending and contrite. No wonder it became a major motion picture.
One of the most telling remarks he made about his visit to Greece is his reply to the question “If you could buy the Acropolis, what would you do with it?” at this Q&A. It astounded me that he actually took the question seriously and then went on to give an typical neoliberal businessman's answer. Nowhere is the insanity of his doctrine more apparent.
I was also amused by his article on the "tragedy" of Cuban baseball players not being able to sell their skills on the free market. If I were to write a reply to the 12 pages of crap he spews on the subject I'd probably end up with a book.
Also, check out his article on the collapse of AIG. In typical conservative style, he attempts to reduce the complex story to a single human scapegoat: "the story may have a villain, whose reign of terror over 400 employees brought the company, the U.S. economy, and the global financial system to their knees". Excuse me? A single man managed to bring the U.S economy and global financial system to its knees? There are only two possibilities here. One, that the statement must be total bullshit, and the real cause for the ensuing havoc is far more complex, probably pointing to deep problems within the capitalist financial system. Two, it could actually be true that a single man was to blame. In that case the question should again be about the system. How is it OK to accept a financial system where one person can cause such damage? It's certainly not a question raised by the article.
In his article “Betting On The Blind Side” he talks about the guy who apparently was one of the first people to notice the subprime mortgage insanity that was inflating the housing bubble. It's actually a fascinating article. Rather than trying to draw attention to what was happening, the guy decided to invent a financial instrument so that he could bet on the eventual failure of the system and make money from it when it inevitably collapsed. He came up with the idea of applying credit default swaps to subprime mortgage bonds. Here, the vitriol and moral self-righteousness that the author expresses so liberally into his article about Greece is strangely absent. He sees nothing wrong with the protagonist's behavior and actually seems to side with him. The way the article is written, the average reader would feel sorry that the guy was ultimately unable to make his billions from the collapse of the subprime mortgage market.
Michael Lewis is also a senior editor and campaign correspondent at The New Republic. Rather than say anything about it, I encourage you to check it out for yourself.
I was also curious to know more about Vanity Fair itself. Vanity Fair is owned by Conde Nast publications, which in turn is owned by Advance Publications, the 46th largest private company in the US. It doesn't take a genius to figure out why they publish articles that further the neoliberal agenda.
Finally, it is interesting to see the types of people who enjoy reading Micheal Lewis' crap. You'll find many websites like this one.
My Two Cents
So, let me now try reframe the situation in Greece.
Michael Lewis' article tries to tell the story of how a nation of corrupt and untrustworthy people cooked up statistics that got them into the euro, and now all the shit they buried has floated to the top. The real question is: why now? If Greece is so morally and economically bankrupt, why didn't this happen years ago? Is it just a coincidence that Greece went into crisis along with the US, Germany, England, Ireland, Portugal, Spain, etc, etc? Of course, the answer is no.
Again, I'm not trying to depend Greece's levels of corruption and imaginative bookkeeping. It's no surprise that the global financial crisis hit Greece hard as a result. But what caused the larger ongoing credit crisis that the article hasn't mentioned a word about?
I quite like this animation from the RSA: . It also briefly mentions Greece and the misconception of the corrupt lazy worker.
For a more specific treatment of Greece, see this article by Michael Hudson.
Finally, check out this article about the possible involvement of U.S financial institutions in the Greek crisis:
Although I could go on at length, I think I'm just going to skip to the conclusion: The Greek crisis is part of a larger crisis of the global capitalist system. Given the degree of corruption in Greece, it should come as no surprise that it was hit harder than many other countries. Furthermore, the root causes of the global crisis point to problems at the very foundations of the capitalist system. It's far easier to blame individuals, institutions, or entire countries than it is to examine this point. To make matters worse, anyone who profits from the system as it stands will use any means available to point blame in other directions. Michael Lewis' smearing of the Greeks is just a particularly nasty example of this.
I'm also always impressed by how completely any neoliberal angle uttetly ignores the issue of class, and this article is no exception. He enjoys lumping all Greeks into one easy-to-smear category. In reality, social, political, and economic life is just as complex and divided along class lines in Greece as anywhere else. Politicians, banks, corporations, insanely rich businessmen, old-money families, and the church compete for power and money while the bulk of the country (a.k.a the working class) wake up in the morning and go actually do the work that creates profits. It's probably inconceivable to the author that everyday people might not be to blame for the crisis. But to start thinking more deeply about the flaws of the system that created the conditions for its own crisis probably wouldn't generate the sort of article that Vanity Fair would want to publish.
There's a nice description of the problem at the heart of the liberal standpoint in the 3rd paragraph of this article: Is a “free market” a market free from fraud and abuse, or a market free for whoever has enough power to exploit people as much as they can?
Finally, it's always interesting to see how the rich have done over the last few years: "The Forbes 400 are worth a combined $1.37 trillion". "Some 217 of the tycoons are now worth more than they were a year ago. Just 84 of the billionaires had a decrease in wealth".
