Why American conservatives should root for Greece's crazy socialists

Conservatives in America are talking tough when it comes to the Syriza government in Greece, which just held a smashingly successful referendum rejecting the bailout terms set by the so-called troika of European creditors. "These are radical socialists — reality has never been their main concern," concluded Tom Rogan at National Review. The editors of that magazine described even "respect" for the vote of the Greek people as endorsing "the desire of Greek voters to help themselves to other people's money" and then offering "Greece more money on softer terms."

The conservative view is that Greece lied about its economy to get into the European Union, then lied on the term sheets for loans from stronger European banks. It only has itself to blame for a dysfunctional political culture that has resulted in big public pensions and crummy, corrupt tax collections. And to boot, it is run by delusional left-wingers who want to keep this Mediterranean kleptocracy going at the expense of the good German taxpayers. So why side with the Greeks?

This is just wrong. American conservatives should be able recognize a Tea Party when it happens. And Syriza is just that, a revolt of taxpayers against unbelievably corrupt cronyism in the European Union.

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

Much of the indictment of Greece's political culture is true. It is not Teutonic in its bookkeeping, or in its urge to make people industrious. Its political culture is probably incompatible with a European monetary union. But to be fair, its puny size means this makes little difference. Just as Detroit's woes don't make America a basket-case of the world economy, so Europe could subsidize Greece into infinity.

And there are two sides to a loan. Most of Greece's debt in 2010 was to private banking institutions based in Western Europe with large international profiles. Creditors knew loans to Greece were more risky than loans to Germans, and they did factor that into their deals. But because the crisis in Europe was then continent-wide, it was feared a Greek default could do systemic damage to European financial institutions.

So the solution went roughly like this. All the creditors were made whole, and European public institutions loaned Greece more money, on pain of implementing tax increases and spending cuts. Greece would pay back the European Central Bank, the International Monetary Fund, and a few other European states.

Greek debt was not forgiven, and in fact it has been made worse in the last five years, despite some insufficient creditor haircuts in between. Now that Syriza is actually demanding some debt forgiveness, the economic elites of Western Europe are warning about moral hazard.

That's a sick joke. The creditors are the ones acting without consequence. Essentially, the solution to asset bubbles and debt in Europe has been to abolish risk for multinational banks, by putting all of the debt on the heads of taxpayers in countries along the periphery of the union. In other words, the profits generated by the European Union are internationalized, given to elite bankers no matter how terrible their financial decisions were. The costs of these bad decisions are then nationalized, transferred almost entirely to some insecure country's taxpayers. First it was Ireland, now it's Greece.

American conservatives should see this system for generating elite profits and public liabilities for what it is: a recipe for endless asset bubbles, economic pain, and tax increases in less powerful European nations. It is cronyism that rewards the worst actors in finance, and punishes everyone else. It's everything the Tea Partiers claimed to hate about the Bush bailouts of major American financial institutions.

Conservatives may say that people get the governments they deserve. But the Greeks actually did something that was unthinkable in this country, kicking out both of the major parties that led them into debt-peonage. Syriza was their Tea Party, and like the Tea Party it boasts some grandiose and irresponsible rhetoric, flagrantly breaks Godwin's law, and is generally unruly.

But the European project, as it exists now, deserves nasty Greek intransigence. Its vision of currency and monetary union without fiscal union or any real feeling of fellow-citizenship was bound to be ruinous and undemocratic. And so in this case, I urge my fellow-right leaning friends to root for the crazy socialists. Send Syriza some tri-corner hats.