Tuesday, May 8, 2012

Seismic, My Foot

I'm impressed, somewhat surprised and a bit dismayed that the outcomes of the French and Greek elections are being termed a "seismic shift." It's merely people voting to lessen and/or avoid measure that they find painful. This what democracies do. If given half a chance, many people would vote to retain the benefits to themselves while socializing the costs.

The previous French and Greek administrations suddenly found themselves in a situation where sooner (Greece) or later (France), the world would perceive their debts as growing too large, and that the risk of default was growing. Borrowing money to make investments that will either yield new revenues or lead to reduce costs is all fine and good. Borrowing money that will effectively be consumed, however, is unwise. Part of the reason is that people grow accustomed to the goods and services that are paid for with borrowed money; when you ask them to pay taxes later or to forgo the benefits, they (correctly) perceive a decrease in their standard of living. When enough people have started to complain about this, you can be sure that SOMEONE will run on a platform that promises to reduce or eliminate the pain for cutbacks. And then you wind up with a new administration that not having had to deal with the crisis that the previous one confronted, can simply say that their predecessors did it all wrong, and there's an easy and painless way out. They then promptly kick the can down the road, with the tacit approval of the public, who it either waiting for a miracle to occur, or doesn't care WHO pays the debts - as long as it isn't them.

In electoral politics, this is about as surprising as the sun rising in the East. Hardly Earth-shaking.

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