Subscribe: RSS Feed | Twitter | Facebook | Email
Home | Contact Us

Victor Davis Hanson on Greece, Germany, Detroit . . .

Posted by Larry Doyle on June 4, 2012 10:09 AM |

What has really changed? Seriously.

From where we were a year, two years, four years ago, what has really changed in the fundamental outlook on our global economic landscape?

People can point to a variety of stopgap measures undertaken by governments and central bankers to stem the tide of deleveraging that dominates our global economy. However, has the psyche of people both in our own nation and others adapted appropriately? I would maintain that the psyche which brought upon our crisis has changed little and perhaps has become even more emboldened. That is not good.

To this end, rather than comment on some daily swings in the market or our economy, I want to highlight a fabulous historical comparative commentary which was shared with me by a number of readers. 

I thank them for bringing this to my attention. I appreciate the historical perspective of the writer, Victor Davis Hanson, and the comparative analysis he provides.

Hanson recently released, Thoughts on the Rhine:

Kehl, Germany — I’ve been making my way downstream the Rhine from Switzerland on the way to Amsterdam, leading a military history tour while observing and talking and listening to Germans and Swiss. I’ve come to a conclusion that those who speak German are sort of like red-staters (socialists though they may be) who view the rest of a failing Europe, or indeed the world at large, the way those in Texas look at California or a Wisconsin governor envisions the Illinois legislature.

For now, Germany’s war guilt, Switzerland’s past neutrality,  fears of what might follow from an EU meltdown, and apprehensions that the successful and wealthy should not rub in their accomplishments given the wages of envy from the less successful all seem to subdue the Germanic speakers. On the topic of the southern Mediterranean con, they shrug and sometimes curse their debtors, but are more confused than enraged, as if they were lucky after all centuries ago not to have been absorbed right away by the bunch below the old Rhine and Danube.

Note that I say “for now,” for human nature is, well, human nature. But as Greece goes, and Spain, Italy, and Portugal totter, and as a rich French socialist from his Mediterranean villa lectures on “fairness,” and as Obama worries that Europe won’t print and borrow enough before November, there will follow an escalating weariness, followed by pique, followed by — who knows what next?

The psyche of Germany

In other words, it is as illogical as it is common for the wayward debtor to blame the thrifty creditor for his dilemma. The Germans now are in the impossible situation of being told they did something wrong by doing things mostly right. They retire too late and caused others to retire too early; they saved too much money so others had to borrow too much; they built too many things that others wanted; they acted too much like parents and so made others too much like children.

Right now the continent’s psychological problem is not that southern Europeans cannot pay the northerners back, but that they are often arguing that they should not have to pay them, as if those who lent are more to blame than those who borrowed. The Germans rightly know that if they were just to write off the debt, such magnanimity would only lead to the same disaster in another five years, as the southern Mediterraneans cited such largess as proof that the Germans were guilty all along of mercantilism and therefore finally evened up with their moral betters. For Germans, this serial blackmail is of course an impossible situation. Would you wish to be lectured by your poorer brother-in-law on why he should not have to pay your $1,000 loan back, as he critiqued your oh-so-conventional workaholic habits?

Again, it would be as if Californians would lecture Texans about why they must give the Golden State $16 billion to solve our current budget shortfall. And then to add insult to injury, we would offer a critique of exactly what is wrong with the Texan go-get-‘em mentality and what is right with the California laid-back lifestyle that spawned one-third of all the nation’s welfare recipients, with the highest paid teachers in America’s near-bottom-rated schools. How long would Texas take that? The answer is about as long as Germany will take that.

Waking up history

As we float downstream and discuss the Roman border forts on the Rhine, the Franco-Prussian War, World War I, World II, and the postwar era, you can see why there arose a NATO, an EU, and a nuclear Britain and France, but not a nuclear Germany. These were all sorts of creative ways to channel German dynamism away from natural expressions of political — and military — influence. Two Germanys, the Cold War, German war guilt, an activist U.S. — all that both by design and by fate worked for nearly seventy years and gave us a prosperous pre-2007 stable Europe. But the noble lies of the EU — that technocrats could reinvent human nature and ensure a continental equality of result, as culture bowed to edicts from Brussels — destroyed the pretenses of the post-Cold War world. The scab is now off, the wound is still raw.

What would be the salvation of Europe? Praise, rather than damnation, for Germany; requests for German advice coupled with thanks for bailouts and promises of reform. In other words, impossible admissions from proud broke peoples that the way they are living is not sustained by the way they are working and organizing their society. How tragic that when the Germans finally learned to channel their talents and energies into pure production and enriched themselves and those around them, it still earned them in the end suspicion and envy, and yes, growing dislike — disarmed, pacifist, and multilateral as they try to be. Reader, you tell me what follows.

Culture is everything. That is a politically incorrect thought that can get you in trouble as much as we suspect it is true.
In other words, government, economics, and social policy are critical, but themselves are driven by the minute-to-minute culture of everyday people. Germans pick up trash; in Athens, Greeks toss it. Germans do not honk; Italians do not not honk. In Libya or Egypt the pedestrian is a target; in Switzerland he is considered perhaps your father or grandmother. A bathroom in Germany is where someone else uses it after you; in Greece or Mexico, it is where you pass on the distaste of using the facility to the sucker who follows you.

I watch fender benders a lot. In northern Europe, addresses and information are exchanged; south of Milan, shouts and empty threats of mayhem follow. When I check out of a German hotel, I know the bill reflects what I bought or used; when I check out of a Greek hotel, I dread all the nonexistent charges to appear, and a “50/50 split the difference” settlement to be offered. Germans like to talk in the abstract and theoretical; with Greeks it is always “egô” in the therapeutic mode. I rent a car in Athens and expect charges for “dents” to appear; in Germany, there are such charges only if there are actual dents. Add all that up — and millions more of such discrepancies repeated millions of times over each hour — and you have one country that creates vast wealth and another that cons to land vast wealth it did not create.

Ah, you say, silly Hanson, Germanic order leads to the symmetrical barracks at Dachau, while “isôs avrio” Greece leads to live and let live. Perhaps, but if true, that paradox is yet an additional reason to work with rather than caricature and shake down Germany.

A final thought as I take in the inexplicable last seventy years along the Rhine. Where is America in all this? Ours was a noble experiment that would take the European legacy, Western civilization, and British law and implant it all in a frontier without the baggage of aristocratic hierarchy, stratified social classes, racial homogeneity, and pernicious doctrinaire ideologies. Instead, we would let the individual loose within the larger contours of the European heritage of government, law, economics, and human freedom.

It worked, and spectacularly so. Without an America there would today be no French Alsace, no German miracle (only a Hitlerian nightmare or a Soviet ghetto). In fact, over the last forty years America worked so well that our academic utopians glimpsed radical equality for all, and then — human nature being human nature, and individual difference being individual difference — did not quite achieve it, Great Society and all. The result was that in their failure they cursed the sins of man as if they were uniquely American — as racist, colonialist, imperialist, homophobic, sexist — even as they wallowed in the material prosperity that comes with free market economics, the rule of law, and political transparency.

So here we are in the age of Obama, as we talk about looking to Asia, redirecting to South America, wanting our own Arab Spring, praising the New Africa — all the while taking for granted the very European traditions that enrich us in our daily lives, which in the abstract we deprecate.

This week I am walking in German cities along the Rhine that were nearly leveled in 1945. Not long ago I visited Detroit, which was booming in 1945. The latter now looks like its own homegrown B-24s bombed it yesterday, the former as if they had been untouched in the war that Germans started. Ponder those interchanged fates, and why and how these respective American and German cities got to where they were in 1945, and then again to where they are now.

And that answer really is all ye need to know.

Hanson nails it. What does America want as its future? Given our level of overall debt, we are a lot closer to the peripheral European states than the fiscal and economic power centered in Germany. Where and when did it all go wrong? When might it change for the better?

Thanks again to those readers who brought this commentary to my attention.

Navigate accordingly.

Larry Doyle

Larry Doyle

ISN’T IT TIME to subscribe to all my work via e-mail, an RSS feed, on Twitter or Facebook?

I have no affiliation or business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

  • Randy

    LOL! although there was a good measure of truth in what was said below.. perhaps Hanson should stick to military histories as he surely can’t consider Texas vs. California as anywhere near the type of comparison he made between Germany and the PIIGS. Having managed the 13 western states for a major bank for several years (including Texas) and having some fairly high placed friends in their local government, they have had their own ongoing budget crisis.. in fact for 2011-2012 their shortfall was even larger than that of California, $27 billion if I remember correctly, and they signed a new budget to cover that shortfall by cutting statewide services and initiating plans to also exhaust their $6 billion rainy day fund, as needed to help plug the giant hole. In fact, if it were not for the energy companies headquartered in the state, they would be giving California a real run for their money at being named the 2nd or 3rd most financially troubled state in the nation. Perhaps Hanson’s Mexifornia research and family farm experiences in California have slanted his opinions on California a bit more negatively than some. But never mind all that, I still much enjoyed the article so thanks for sharing. I can usually count on you to come up with something interesting and in tune with the times.

  • coe

    I found the commentary compelling and spot on…I can relate to the interfamily loan analogy – with the identical issue at hand…we surely are witnessing some of the same concepts of resentful “entitlement” in part of the Occupy Wall Street credo – aren’t we? Look, we can always find a way to debunk the message, but, on balance, I think it strikes the right chord. And the mention of the fall and decline of Detroit surely has something to do with the loss of global competitiveness in the auto industry as well as the toxic implications of a union movement that has gone way too far…

    I am attaching a humorous story a friend sent me…rock on, LD

    young woman was about to finish her first year of college. Like so many others her age, she considered herself to be very liberal, and among other liberal ideals, was very much in favor of higher taxes to support more government programs, in other words redistribution of wealth.

    She was deeply ashamed that her father was a rather staunch conservative, a feeling she openly expressed. Based on the lectures that she had participated in, and the occasional chat with a professor, she felt that her father had for years harbored an evil, selfish desire to keep what he thought should be his.

    One day she was challenging her father on his opposition to higher taxes on the rich and the need for more government programs.

    The self-professed objectivity proclaimed by her professors had to be the truth and she indicated so to her father. He responded by asking how she was doing in school.

    Taken aback, she answered rather haughtily that she had a 4.0 GPA, and let him know that it was tough to maintain, insisting that she was taking a very difficult course load and was constantly studying, which left her no time to go out and party like other people she knew. She didn’t even have time for a boyfriend, and didn’t really have many college friends because she spent all her time studying.

    Her father listened and then asked, “How is your friend Audrey doing?”

    She replied, “Audrey is barely getting by. All she takes are easy classes, she never studies and she barely has a 2.0 GPA. She is so popular on campus; college for her is a blast. She’s always invited to all the parties and lots of times she doesn’t even show up for classes because she’s too hung over.”

    Her wise father asked his daughter, “Why don’t you go to the Dean’s office and ask him to deduct 1.0 off your GPA and give it to your friend who only has a 2.0. That way you will both have a 3.0 GPA and certainly that would be a fair and equal distribution of GPA.”

    The daughter, visibly shocked by her father’s suggestion, angrily fired back, “That’s a crazy idea, how would that be fair! I’ve worked really hard for my grades! I’ve invested a lot of time, and a lot of hard work! Audrey has done next to nothing toward her degree. She played while I worked my tail off!”

    The father slowly smiled, winked and said gently, “Welcome to the conservative side of the fence.”

    If anyone has a better explanation of the difference between conservative and liberal or progressive or neocon I’m all ears.

  • Bill

    I have a sister who has two adult sons, my nephews, who I suspect think me demented for my conservative views. The bulk of my productive life was in the private sector. My sister worked her entire life for one public entity or another, and her sons, as well as one’s wife, are following her lead and will probably make that their life’s ambitioin. When I started working in the private sector, it gave me a wholly new perspective on economics and politics. The problem is the bulk of those in Congress and the government, by definition, have never worked in the private sector, others only minimally.






Recent Posts


ECONOMIC ALL-STARS


Archives