Mitt Romney, Greece is Not a Punching Bag

Mitt Romney, Greece is Not a Punching Bag

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A Greek-American’s answer to Republican presidential candidate Mitt Romney who wants to save America from going “…down the path toward Greece.”

By Dean Argiris* – Far too often, it seems, when we see others who posses traits that we feel we lack, we have a tendency to mock those individuals. Yesterday, Governor Romney, without knowing the full facts, without knowing the history, decided to use Greece as a punching bag. This so called “road to Greece” has been played up by the Republicans as an inaccurate description of President Obama’s economic policies. The first thing Governor Romney should know about Greeks is that they don’t take to insult kindly.

We all know the stereotypes; sometimes we in the Diaspora community are guilty of perpetuating them. The infinite frappe break, the continuous days laying at the beach rather than being in the office. But the Greek is one of the hardest workers of all European countries. At 43.7 hours per week, he works more hours than a Britton (42.7 hours per week) and definitely more hours than the German (42 hours per week) that dictates austerity. If laziness was a Greek trait, than there wouldn’t be successful Greek Americans in Hollywood, Washington, on Wall Street, and in London.

This crisis has given Greece the unique opportunity to re-brand itself. To show the world that it embraces the “protestant work ethic” even better than the Protestants themselves. In the midst of the chaos and darkness there is only room to harmonize and shine.

When looking at the ten most prosperous countries, Norway, Denmark, Australia, New Zealand, Sweden, Canada, the Netherlands, Finland, Switzerland, and the United States, we find that Greece’s corporate tax rate is comparable. There are only three countries whose tax rates are noticeably more or less than Greece’s. Australia and New Zealand’s corporate tax rate is near 35%, almost 10% higher while Switzerland’s is almost 10% lower. Income taxes aren’t really a barrier for Greek economic recovery.

There definitely are some valid problems with Greece. Tax evasion has created a government that is underfunded and antiquated. Like the United States, the heaviest tax burdens in Greece fall on the small businessman. Typically, large corporations and more affluent professions in Greece have had the benefit of legislation which enables them to reduce their tax burdens. The pyramid, as a result, becomes inverted and collapses.

Greece also has run up large deficits in part due to the inverted tax pyramid but also due to a record 25% unemployment. No jobs means no revenue and no revenue means larger deficits.

Simple services including the administration of justice, in the courts, may take decades. The system, as it exists, creates too much risk for businesses to invest in Greece. Intellectual property theft, for example, could cost businesses millions and damages may be received twenty years down the road. Slow judicial systems also breed corruption and as a result businesses try to avoid entering into deals with the Greek government for fear of being overcharged on contracts.

Redundancies and the absence of an integrated computer system in governmental administration also create unnecessary, additional “red tape” for businesses. All of these, however, are being addressed by the austerity agreements between the IMF, European Central Bank, and the Hellenic Republic. They definitely have the potential to make investing in Greece much easier, in terms of paperwork.

Exports are another issue. The ability of a nation to manufacture or produce its own resources is a critical aspect of national security but it also is a key to economic prosperity. Greece is an old nation and as an old nation, many of its resources have been depleted. Once a large exporter of lumber, nearly all forests have been exhausted. Much of the remaining forests were ravaged by a series of fires in the 2000′s. In 2000, during the final year of the Clinton Administration, First Lady Hillary Clinton joined with A.H.E.P.A (American Hellenic Education Progressive Association) to kick off the “Plant Your Roots” program. This effort was geared toward reforesting Greece through encouraging Greeks throughout the world to donate a tree in memory of their loved ones.

The capitalist economy of Greece mainly produces olive oils, beverages and food. It does export some petroleum and chemicals but many of its trade partners are also struggling nations. China, the US, the UK, and Germany make up a small percentage of the total Greek exports. Raw materials, such as steel, aren’t produced in mass by Greece and since 2007 the overall production has decreased. In general the production of raw materials and mining for Greece’s abundant natural minerals constitutes only a small portion (15%) of it’s entire GDP, indicating a preference of Greece to be predominately service based. The Hellenic Republic, in the final analysis, is symbolic of when a developed nation becomes overdeveloped. To say that it’s because of a generous welfare state is overly simplifying the problems and actually is only a red herring.

The crux of the problem, and the real barrier to Greek prosperity, is the political system. In previous writings, I have discussed the correlation between economic performance and political stability; the less volatile the politics, the more prosperous the economy. While Greece may be the world’s oldest democracy, it is also one of the youngest states. When the empire that Alexander built waned, Greece became a Roman protectorate, a part of its empire. For 1,982 years, from 146 B.C. until 1832 A.D., Greece did not know sovereignty.

The independent Greek nation is only 180 years old but 22 of those years were spent divided in political feuds, often times bloody. Greece had a National Schism, a Civil War, and an oppressive military junta. These tumultuous periods of Greek history were fueled by a putrid vitriol between the political right and political left. Conditions like these, as the IMF has pointed out in a study on the economic impacts of political stability, cripple growth.

While this author resents Greece being used as a punching bag, especially by someone who has an elementary understanding of the issue, if we are going to use Greece as an example, then we need to point out the parallels between the proposed tax policies of the Romney/Ryan ticket and the tax policies of Greece, even those being imposed by austerity. We need to see the Tea Party for what it is, a coalition of extremists who possess a abhorrent disdain for not only Democrats but any Republican that express a belief in compromise. The volatility they created in Washington is similar to the schisms in Athens. It causes business to defer adding to their payrolls.

Greece is an important ally in America’s ongoing war against terror and they tend to have a long memory. Governor Romney’s foreign policy has consistently been one of burning bridges with allies. He did that again last night. He also possibly managed to incite the 3 million Americans of Greek heritage to rally against him. In attempting to score a cheap political point, Governor Romney failed to heed the lesson that so many from Xerxes to Hitler had to learn the hard way. You don’t mess with the Greeks. The Greeks have had a long history of turning no win situations into a fighting chance at survival and they remember every slight.

*Dean Argiris is the founder of Argiris Consulting Group, a political consulting firm. Dean has authored and published commentaries on the Greek financial crisis and advocating a third approach to resolving the debacle.

  • http://www.facebook.com/profile.php?id=1578057040 Sophia Thomopoulos Romano

    Beautiful ! The last sentence made me so proud !

  • http://www.facebook.com/people/Paul-Hatgil/1560999678 Paul Hatgil

    Remember – It was the Greeks that defeated the Fascist in World War II and forcing Hitler to intervene by sending his troops to defeat the Greeks. By doing so, Hitler’s invasion of Russia was stalled resulting in the Nazis war machine being caught in a Russian winter. It can stated that the valiant Greeks saved the allies in WW II.

  • http://www.facebook.com/pattypanayiota.roussis Patty Panayiota Roussis

    EVEN IF I WAS A REPUBLICAN,,,,I WOULD NOT VOTE FOR HIM FOR
    TAKING AND ABUSING GREECE AND THE GREEK PEOPLE!!!! ,,,,AND HE SHOULD KNOW THAT
    THE GREEKS GAVE HIM THIS DEMOCRACY,,,,,

    THIS IS WHAT THE GREEKS SHOULD TAKE A LOOK
    AT…..ROMNEY NOT BEING AWARE OR INFORMED ABOUT GREECE AND ITS FOREIGN POLICIES
    AND ECONOMIC SITUATION,,,VERY IGNORANT….THIS IS WHY THE GREEK SHOULD TAKE A
    CLOSER LOOK,,,,NOT AT DEMOCRATS VS REPUBLICANS,,,BUT THE ISSUES….THIS IS WHY
    THE JEWISH PEOPLE ARE SO PROSPEROUS IN THEIR DOINGS,,,BECAUSE THEY STICK
    TOGETHER ON THEIR ISSUES WITH ISRAEL AND THEIR ISSUES HERE IN THE UNITED
    STATES….THIS IS WHAT DIVIDES THE GREEKS AND WE ARE NOT UNITED AS A
    PEOPLE….LOOK AT THE ISSUES FIRST,,,,ALL THE ISSUES, NOT WHETHER YOU ARE
    REPUBLICAN OR DEMOCRAT…..

    BY
    THE WAY ,,,,, PRESIDENT OBAMA WAS THE CO-SPONSOR FOR THE BILL THAT WENT INTO
    EFFECT FOR THE NAME MAKEDONIA (MACEDONIA) ALONG WITH OLYMPIA SNOW….ROMNEY(aka
    ROBO COP) VOTED AGAINST IT !!!!

  • ubanni123

    Romney has been taking shots at other countries without even stepping into the white house yet, good grief! China, Russia now Greece? Talk about trying to not help diplomatic relations…

  • http://www.facebook.com/matthaios.roussos.3 Matthaios Roussos

    So after you laid down a whole book of how we (the Greeks) suck, where you dissagree with Mitt Romney and how his remarks on Greece do or should insult us?

  • LudwigvMises

    This guy has no idea what he’s talking about. It’s all garbage. But what do you expect? He’s a “political consultant.” His job is to package BS in a nice box and give it to the rest of us.

  • http://www.facebook.com/people/Rick-Mercer/608116492 Rick Mercer

    So in other words your argument is that we should be going down the path towards requiring a bailout the size of our country’s GDP and rioting in the street every time necessary reforms are imposed.

    • http://www.facebook.com/dargiris Dean J. Argiris

      Rick, no the argument is that the problem with Greece is it’s politics. The political climate is too unstable and it’s beginning to happen here in Washington.

      Businesses want predictability, it enables them to make more accurate projections and informed decisions on how to invest their money. You don’t get that when you have a political war going on between Republicans and Democrats (or in the case of Greece, SYRIZA, PASOK, Nea Demokratia, etc). They want to know that when the government changes from Clinton to Bush to Obama, that there will be consistency in regulations and taxes.

      America was prosperous because from 1976 on both Republicans and Democrats agreed on loosening regulations on industry. It was Carter, after all, that signed the first real deregulation into law when Congress sought to deregulate the transportation industry.

      Now in the case of Greece, there are some necessary reforms being imposed on Greece by the IMF and ECB. I have indicated as such in previous pieces . Most of them deal with the streamlining and modernizing of government agencies, including eliminating some of the “double taxes” business have to pay.

      I think the current coalition government that was formed, the “coalition of the center” is a start because they’re are continuing to pursue the policies set in place before the most recent parliamentary elections.

      I don’t believe in black and white thinking. I think there are problems that come with saying you either support deep and extreme cuts or uncontrolled spending. Take the American example, we’ve had reduced tax rates for 12 years now and in those twelve years we’ve had two recessions. One in the early 2000′s and one starting in 2007.

      In fact, if you look at both tax rates and unemployment going as far back to 1911. One will see there is absolutely no correlation between tax rates and employment. There is more of a relation between employment and consistency in policy.

      • http://www.facebook.com/dargiris Dean J. Argiris

        and it should be:

        “I think the current coalition government that was formed, the “coalition of the center” is a start because they’re continuing to pursue the policies set in place before the most recent parliamentary elections.”

      • http://www.facebook.com/people/Ellene-Phufas-Jousma/100001706713834 Ellene Phufas-Jousma

        Everything Obsaa has done has hurt this country.
        Dittoes for his socialist pals in Greece. Why would any
        Thinking person want more unemployment more debt and more misery?

  • Demetri1982

    No greek should support Republicans after Bush betrayed NATO ally Greece by recognizing FYROM in 2004. They claim to be “protectors of Western Civilization”… but don’t even know basics like ancient Macedonians were Greeks. Modern Republicans are nothing like Eisenhower that loved and protected Greece. They are unprincipled mystics. Protectors of nothing but their own greed.

  • Ioannis Kastoras

    ουαο, ποσο απογονοι των αρχαιων Ελληνων ειμαστε? Ποσο ΔΗΜΟΚΡΑΤΕΣ ημαστε? Ειχα γραψει μια εμφανες ανθελληνικη,αλλα καθολου προσβλητικη(δηλάδη χωρις βρισιες και απρεπειες) σκληρη κριτικη για την Ελλαδα, τους Ελληνες και την παιδεια μας, και καποιος administrator το εσβησε..

    …αλλα πανω απο ολα, “οταν εμεις ειχαμε δημοκρατια, οι “αλλοι” ηταν στα δενδρα..

  • ask0

    Really tired of this mans lies and hypocrisy.

    Luckily the Romney tax policy (rich job creators should avoid taxes ) is not made available to the middle classes in america. If he believed the tax burden should be shared equally, you would have Greece.

    He has paid about 10% tax thanks to tax avoidance schemes. He is an opportunist and lacks moral fibre and a back bone.

  • http://www.facebook.com/alice.baker.9615 Alice Baker

    too much made of the comment, i live in Greece, I am of Greek origin, but born in the States, he is not the first nor will he be the last politician or economist in the States or in all the world to make a comment about “Greece going down the tubes”
    …it is part of a horrible example that Greece has set…it’s part of a result of all the wrong that Greece has done in this modern world…nobody is talking about Greece’s past laurels…let’s not do what got Greece into this trouble to begin with…being very ego centric…doing only what’s good for the individual…I have lived her over three decades, community mindedness does not exist here…stop the “belly aching”