Greece and the Crisis of the Governing Elite

by Charles Kadlec

Forbes
September 19, 2011

Everyone wants to live at the expense of the state. They forget that the state lives at the expense of everyone.
Frederic Bastiat

Europe’s governing elite – and those who believe in the superiority of government in the management of the economy – is in crisis. Their visions of a more just society and economic security are being shredded by the stark reality that the governments they run are running out of money.

The looming Greek default and the nascent financial crisis in Europe is a symptom of this crisis of the governing elite. At risk is the background consensus that supported the expansion of government to the point that public spending now accounts for roughly half of all economic activity among the 17 nations in the eurozone. A destruction of that consensus would imply a massive loss of power by the elites who for decades have declared that given the power, they could produce an economy with less risk and more fairness than free market capitalism.

The pending failure of the governing elites to deliver on their most basic promises is setting off alarm bells in Washington. Treasury Secretary Timothy Geithner, former Treasury Secretary Larry Summers, and World Bank President Robert Zoellick have admonished the Europeans to move forcefully to resolve the European debt crisis lest it threaten the already meager U.S. economic recovery. Unsaid is the concern that Europe’s failure will tarnish America’s governing elite, providing additional energy to the Tea Party’s call for restoring limited, constitutional government in the U.S.

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