The Hypocrisy of the Fiscal Cliff

            Over the past month we have been inundated with moaning’s and ramblings of a so-called ‘Fiscal Cliff,’ approaching in good old ‘Murica. American and Canadian Media outlets as well as pundits left right and center have been explaining to the terrified populace what this means while espousing myriad views on the steps the American Congress needs to take to prevent the American economy from falling off the proverbial cliff. It all sounds very apocalyptic, but the hypocrisy evident in the North American media when discussing this fiscal cliff is absolutely appalling.  

             

            You see, not one American or Canadian large media outlet or any politician has actually told the truth about what the ‘fiscal cliff’ actually is and when you dig into this statement you find the hypocrisy that is plainly evident for the more observant among us.

             

            This hypocrisy my dear readers, is that the fiscal cliff is another word for…………….AUSTERITY. You know that policy that western governments and big business have been pushing on Europe since roughly 2009? Yeah that’s pretty much what the fiscal cliff is. Increased tax rates across the board, slashed spending across the board and many more ‘fun’ add-ons. That is primarily what the ‘fiscal cliff’ is about and exactly what austerity is about.

             

           The reason for this change-up of terms is that austerity evokes the image of a more friendly policy: one that promotes simpler living and less government spending, while the term ‘fiscal cliff’ makes it sound like your economy is going to tumble right off the edge into the economic abyss.

            

            Why the duplicity though? The answer is shockingly simple. The American congress, media and politicians for all their stupidity, have seen what austerity looks like and they want absolutely no part of it. Though they push this on indebted nations such as Greece, Italy et al. when it suits their purposes, they want absolutely nothing to do with austerity when it hits closer to home, hence the term ‘fiscal cliff.’

           

            By utilizing this term and American media effectively controlled the public response in the matter which did many things. First, it had the effect of fostering fear and uncertainty in both the people and the markets. By doing so, this put public opinion directly opposed to austerity (oops, I mean fiscal cliff) and allowed the American Congress, to bypass the questions involved if they had chosen to label it austerity. Secondly, it allowed the American congress to put up a smoke-screen and avoid dealing with the real issues that are prevalent in their economy such as a lack of production, exorbitant military spending, and an inefficient public AND PRIVATE sector. Finally, by avoiding the issues listed above, they were able to focus on the fear created by the ‘fiscal cliff’ and pass legislation that pretty much circumvented anything of note.

           

            Though the Americans would like to convince us there is a difference between the two parties, the reality is that the Democrats and the Republicans are just different sides of the same coin. They are both heavily reliant on corporate donations and are manipulated by various lobby groups. With regards to the ‘fiscal cliff,’ both parties wanted to avoid the sting of austerity; but they only differed in the minutiae which created the veneer of political theatre that allowed for the people to be distracted from the real issues that plague and will continue to plague the United States.

            

           The saddest part of this whole debacle is that the media didn’t dig beyond the surface of the ‘fiscal cliff.’ Instead of focusing on the real issues and presenting people with the problems plaguing America, they instead focused on the drama and bickering in Congress, to the detriment of all. The worst part is the hypocrisy and the double standard on display for all to see. The next time anyone in North America tells Europe to stick to its austerity guns, the Europeans should collectively laugh in their face. Again, it all boils down to the failure of modern journalism and their complacency in the face of political and corporate pressure as well as their reluctance to write and produce things with substance. Instead of misinformation how about information for once instead of hypocrisy, lies and subterfuge. Expect more of the same in 60 days when the debt-ceiling debate comes to the fore.

450 Euros

            Imagine this scenario If you will. You are a fresh engineering graduate, finally entering the working world after 5+ years of tireless study.  You are eager to make your mark on the world. You open that door to the real world and you are shocked at what you find waiting for you; 58% unemployment among your age group and a mandatory starting wage of 450 euros a month.

             

            For many youth under 30 in Greece this is a reality. 

            With the implementation of the Euro in Greece in 2002, Greece was effectively tied to pricing dictated by the wealthier and more affluent Northern European countries.  As opposed to other countries like say, Mexico with their own currency, Greece was forced into following the prices set across Europe. This wasn’t so much of an issue when the Banks were gleefully pumping billions into a system that could not withstand the high costs of borrowing, but now in the midst of the worst recession seen in Greece since the 2^nd World War this is having a serious effect on the population. 

           

           In exchange for one of the myriad bailouts given to the Greek Government, the government has been forced by the troika (EU, IMF, ECB) to implement an entry level wage of 450 euros to any labourer under the age of 30. Remember though, the cost of goods and services are roughly standard across the Eurozone. For example, a Playstation 3 in Germany would cost the exact same amount as a Playstation 3 in Greece. 

            So what does 450 Euros a month get you? Let’s break it down. We will assume you are living on your own, so you will need to rent a small apartment.  First, you will need 200 euros minimum for a small bachelor’s suite measuring between 200 and 315 square feet. Right away you are down to 250 euros for the rest of the month. Let’s assume you have to bus to work as you cannot possibly afford a motorcycle, scooter or a car.  Transit in Greece costs 1.40 euros which you need to pay twice a day to get to and from your job.  This is 2.80 a day which amounts to roughly 84 euros a month.  Let’s be generous and not include weekends. That’s 76 euros a month. We are now down to 174 euros. Electricity prices are outrageous in Greece, (odd considering the abundance of sunshine, wind and other clean forms of energy) so you roughly pay 50 euros a month for electricity. We are now down to 124 euros a month. We’re really stretching it now, so let’s assume you do not pay for heating to save some money.  A loaf of bread at a bakery costs 50 euro cents a day. So that’s 15 euros a month. 109 euros are now left to subsist on. A coffee a day costs 1 euro, that’s 30 euros a month.  We are now down to 79 euros with no nutritional value aside from simple carbohydrates from a single loaf of bread. Food is expensive in Greece as well. 500ml of milk costs about 1.20 euros.  Since we’re barely making ends meet we’ll buy one every two days which equates to 18 euros a month. 61 euros are now left. Assume we can somehow live on 1 euro (you can’t) a day for food and we are now down to 31 euros. Remember, we have no heating, have not spent a penny on clothing and no communications such as internet, a telephone line or a television.  Any of these extras added on, or even an extra euro a day for food will bring you into the red. 

            There is little recourse for the youth of Greece at this point in time under the current system. This wage is static so you will most likely be forced to work for 12-15 (lazy Greeks right) hours a day in order to keep your job. If you don’t like it, the employer can easily fire you as there are thousands of others looking for work. The punch line is that the current clowns in the Greek parliament wax lyrical about how terrible things will get if Greece leaves the Eurozone. Samaras and his cronies like to fear monger and tell people how there will be no oil, no electricity and no health services if Greece were to leave the Eurozone. But I just broke down a very basic cost of living for a young graduate above and there is no money for medications or heating there either.  So we should objectively question the statements made by those in parliament of a potential doomsday scenario were Greece to leave the Eurozone. At least under the drachma the Greeks could control their own destiny. 

            Remember, this is not a fabrication. This is reality. I have lived in Greece and I know and have seen the cost of living there. People are starving and youth unemployment is at 58%. At least in the above scenario, the poor sap has a job. If you take anything out of this article take this. Too many times we see an event happen overseas and we do not take into account the human aspect of it. We throw terms around like socialist, centrist and conservative and attempt to attribute blame while the human cost goes unmentioned. While this is an economic issue spawned from a plethora of issues, the human cost cannot be understated. While bankers, financiers and politicians sit around a table throwing out numbers and useless statistics, people in Greece are slowly starving to death.