Monday, June 18, 2012

Analysis of the Greek Elections

The elections in Greece were held over the weekend.  It seemed that everyone was holding their breath, waiting for the outcome of the elections, and in turn the future of Europe.  You can view the election results here.  As you can see, the first place party could not even break 30%.  Not only was there not a clear majority, nobody could even get a third of the votes.

According to this article, nearly 38% abstained from voting.  For such a seemingly important election, that is a rather high number.  This 38% can be translated into NOTA (none of the above).  It was really NOTA that won the election.

The mainstream media and the rest of the establishment seemed fairly pleased with the results.  Their dream of the European Union and a one-world government is not quite dead yet.  They are still holding out hope that Germany will continue to bail out Greece.

While mixed results in an election can mean different things, I don't think these Greek elections being so mixed (with seven candidates receiving at least 4%) is the same as what you would see in the U.S.  In the U.S., there are actually some proponents for smaller government, even if just on certain issues.  Some people like Obama and the Democrats for being less pro-war and better on civil liberties.  Some people like the Republicans for supposedly being better on lower taxes and less spending.  While these things aren't reality and there are many who support the parties for opposite reasons, there are at least some sentiments for smaller government.

In Greece, the voters are looking for a year-round Santa Claus.  They believe in a free lunch and they want it.  The problem at this point is that the chickens have come home to roost.  They can no longer live off of past savings and the current productivity is very weak.  It is a massive Keynesian experiment gone bad, even though it was predictable.  A country cannot expect to thrive with a massive welfare state and high taxes.  When there are people who are 50 years old and retired on a big government pension, you know there is something not right.

The Greek voters are really mad at the politicians right now.  They are not sure who to blame the most at this point.  But it is a large majority of Greek voters who are asking for a free lunch.  They are asking for the impossible.  The politicians can keep making promises, but when they fail to deliver anything, then the people get mad.  As Margaret Thatcher said, the problem with socialism is that eventually you run out of other people's money.  I suppose that can be applied to the Greek welfare mentality.

In the end, this election will mean nothing.  Perhaps the German government will fork out another bailout package one more time.  They are throwing resources down a drain.  Greece is going over a cliff, whether it is this month, next month, or next year.  It is inevitable that Greece will break apart from the euro zone and go back to printing its own money.

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