"Bad times, hard times, this is what people keep saying; but let us live well, and times shall be good. We are the times: Such as we are, such are the times."



Thursday, 26 February 2015

GREECE'S 'HUMANITARIAN CRISIS': THE FACT AND THE FICTION

Greece, in brief.

If you're reading this blog then you have no doubt followed the dramatic series of events involving Greece and its creditors that followed the parliamentary election that took place on 25 January 2015. But in case you've not...

With nearly 64% of voters casting a ballot, and 36.3% of those voting for Syriza (the Coalition of the Radical Left), Greece got itself a new government. Surprisingly, Syriza held their noses and entered a coalition with the far(cical) right party, the Independent Greeks, who had barely scraped into parliament after losing more than half of their share of the vote since the 2012 elections. Their victory was hailed by anti-austerity activists and commentators everywhere as an unquestionable mandate to not merely end austerity in Greece, but also reshape Europe while we're at it.

Unfortunately for all of us, when Syriza took their mandate to the bank, announcing that the troika was unwelcome and we demanded debt relief and a lower surplus target, our creditors predictably refused to cash it - an eventuality once derided by our new Prime Minister as having "not one [chance] in a million." What followed was not entirely predictable, but not far from either. First, the ECB made a point of not playing fair and Samaras' trap for Syriza snapped shut, thus combining with Syriza's own uncompromising ways to bring us briefly to the edge of at least a nasty bank run if not Grexit. In this toxic environment, Syriza's bargaining cards, never top trumps to begin with, started to eat into their own hands, like something out of Saw IX.

As the Eurogroup (whose legitimacy we had openly questioned) went into meeting after meeting to resolve the impasse and avert Grexit, we learned that other austerity-ravaged nations most certainly did not have our back, that the Eurogroup itself was possibly not such an august institution after all, with contradictory draft communiques leaking in every direction, and that parts of the German press were, basically, assholes (so where parts of ours). In the end, a 4-month extension to our programme was agreed, to be supervised by the Institutions Formerly Known as the Troika. Despite some commentators decrying the triumph of 'nastiness' over 'democracy', everyone has now gone back to sell the compromise to their respective electorates - our government describing it as Greece taking ownership and control of reforms, and others as Greece bowing to the inevitable and denouncing la revolucion. As I write these lines, our reform proposals have just been submitted to our partners and got a general thumbs up.

In the days leading up to the compromise, Greeks were visibly uplifted by, even proud of, the new government's confrontational style and the personality cult surrounding our new finmin, economist, game theorist and notorious Modest-Proposal-touting econ-blogger Yanis Varoufakis. A sense prevailed that we were finally in the driver's seat,  and were no longer going to be pushed around. Even the regular clashes between Varoufakis and his counterparts as well as the first rounds of Eurogroup madness were treated with a combination of nail-biting euphoria and crass humour that brought to mind the Euro cup knockout rounds of 2004. The inevitable concessions made to the Eurogroup have caused some notable reactions, but I doubt the new Government is in any danger.

This offers me some hope that either Syriza will be able to sell much-needed reforms that other, discredited parties, would have struggled to, or it will educate its voters in realism, compromise and prioritisation in a way that other parties could not. Either way, Greece wins.

Yani say what?

For his share of the negotiations, Varoufakis employed a range of devices of varying validity and tact - from pretty solid ones, such as arguments on the sustainability of our own debt or the under-estimated impact of austerity on Greek GDP and our tax base, to less helpful ones such as declaring other countries insolvent; bringing up German post-war debt relief and the rise of the Neonazi Golden Dawn in Greece, to downright cringeworthy flattery.

But the defining claim of Varoufakis', echoed by many commentators and examined by virtually none, is that Greece needs fiscal slack and/or debt relief in order to deal with a man-made humanitarian crisis caused by years of austerity. Predictably, this phrasing didn't go down well. It was echoed in the now-infamous Moscovici draft but then reportedly struck down by Germany, eventually making no appearance in the 'final' 18/02 Eurogroup communique.

Of course, everyone brings their own biases into this discussion and so do I. But there are definitions of the term out there (see here) and claims of a 'humanitarian crisis' are testable on more or less objective grounds. I promise you that, as with many such mythbusters, the truth is neither on Greece's side nor against us. It's on the side of people everywhere who want to understand and solve problems.

Do-it-yourself Statporn

Where do you start checking claims of a "humanitarian crisis"? Most people start with macro indicators such as unemployment and GDP - and no doubt Greece has suffered enormously on both counts; the Economist's round-up is particularly useful as a starting-point. But even an economic depression does not a humanitarian crisis make (no one calls the Great Depression such a thing, after all). Besides, as of Nov 2014, unemployment had been falling for a full year, and GDP had grown for three quarters before blipping downwards in Q4 ahead of the elections. Whatever it was we'd suffered, the macro figures suggested we were on the mend, despite ongoing austerity. To justify talk of a 'humanitarian crisis', and the policies to address it, you better have facts on the actual hardship experienced by humans on the ground.

Enter EU-SILC, Eurostat's survey of incomes and living conditions, and the source of all poverty-related statistics in the EU member states. I've covered its figures in 2011 and 2012, and a new batch of figures is available for 2013 as we speak (even 2014 in some countries, but not Greece unfortunately). Using EU-SILC, you can explore the most important dimensions of poverty for yourself using the links below:

Food poverty - are you unable to afford meat, fish or pulses every other day?
Financial precarity - are you unable to deal with unexpected expenses?
Fuel poverty - are you unable afford to keep your house warm?
Arrears - are you behind on your bills?
Physical safety - are you confronted by violence, crime or vandalism in your area?
Access to healthcare - are you unable to access the right kind of medical care due to cost?
Even better, access to healthcare by level of activity limitation - this distinguishes between people with serious, ongoing medical problems and those without. Unfortunately the data series ends at 2012.

There are also two measures of  extreme poverty that I'm very keen on:
Multiple deprivation - do you face multiple poverty-related problems at once?
Deprivation, risk of poverty and low work intensity - are you experiencing poverty and have little prospect of working your way out of it?

What the numbers tell us 

This is a lot of data to take in so you need to look at it in an organised way. My preferred method of analysis is to take each type of household in Greece in 2013 (latest SILC data for Greece) and compare it to the equivalent abroad for each category of poverty or hardship. I've particularly isolated two 'live-alikes' for each category and each group - the countries with the percentage closest to Greece's. This helps put our performance into context, and, as you will see if you check for yourselves, the differences are almost always statistically negligible.



What the figures will tell you is that Greece is generally in a bad shape. On most counts, and for most segments of the population, we do worse than at least 20 of the 31 countries for which Eurostat provides comparisons (the EU 27 plus Iceland, Serbia, Switzerland and Norway). By EU standards we have unacceptably high numbers of households in arrears (i.e. behind on their bills, loan payments, rent etc), numbers of people feeling unsafe in their neighbourhoods, and people unable to work their way out of poverty (a small but particularly hard-hit minority). We do better when it comes to financial precarity and food poverty - ranking closer to the EU-average.

Greece is a worse place to be for some. If you're a single woman, or a single parent, Greece is a pretty tough place to be - mostly it feels like Bulgaria or Romania. If you're a young man who can afford to live on your own, it can be pretty OK (most people who were once in your shoes have been forced back into the family home, so you're probably earning well). Incomes and prices aside, life in Greece can feel like living in a recent accession country in many cases.

But I can't help but wonder how these figures justify the suggestion of a 'humanitarian crisis'. Should Bulgaria or Romania get debt relief until they catch up with the rest of Europe? Should the Czech Republic? Perhaps if there is a steep recent trend in Greece threatening to continue into the near future, such claims can be substantiated. I don't believe the trend is strongly upward any more. Stay tuned, as I plan to explore this idea very soon.

[UPDATE TO FOLLOW]

Greece's Shadow Welfare State

Greece’s anti-poverty policies were never much help to begin with. According to the latest data, and the older data too, Greece’s welfare state has for years been the worst in the OECD at tackling poverty – in terms of how much it manages to reduce the risk of poverty per Euro spent. This was all pre-crisis studies - the times when we could afford our welfare state.

Ultimately, families were, and continue to be, Greece's de facto welfare state. Eurostat's groundbreaking work on household resource pooling back in 2013 (working on 2010 data) confirms this - with 82% of Greek households having fully pooled resources, Greece was third only to Malta and Romania in terms of household pooling in the EU. Barely half (54%) of all Greeks have full discretion in what they spend, with only Romanians and Bulgarians reporting less discretion. Income pooling was widespread but also flexible ; in 2010 Greece, fewer than 40% of individuals put all of their income into a shared household pool, while another 14.5% didn't chip in because they had no income.

The analysis by @AristosD in his book, Το αόρατο ρήγμα. goes further - Greek families are risk-diversifying, not merely resource-pooling institutions. At the heart of this function is an Anchor Income that was substantial relative to family outgoings and predictable - a solid pension, for instance, or a good professional job. Around this, the different family members diversify the family's income through a collection of low-wage, flexible work; variable entrepreneurial incomes with a significant upside (including incomes from agriculture); and marginal guaranteed income such as a small pension.

The graph to the right groups EU countries into families based on how similar the household income pooling situation was in the 2010 EU SILC figures. As a rule, the further apart two countries are, the more individuals' access to pooled household funds will differ. This graph will surprise some, because it doesn't fully bear out the core v. periphery, east v west, protestant v. catholic/orthodox narratives. Sure, Greece, Cyprus and Italy are very similar as might be expected. Spain is related to Portugal, though not to the other three peripherals. Ireland is close to the UK, but also to Poland and the Czech Republic, not to mention Bulgaria. Germany is closest to the Netherlands and Denmark, but also to Lithuania and Hungary. This is a deeper, more fundamental order in Europe that we are not exposed to very much these days; Europe's shadow welfare state.

Greece's 'humanitarian' crisis, I think, is first and foremost the loss of the Greek family's ability to balance out its members' loss of income. The tax and welfare system can be tweaked to restore that. And by focusing more resources on the hardest-hit, it really is possible to do more with less.


[TO BE CONTINUED]


Monday, 17 November 2014

The NHS and the sad, contradictory world of UKIP voters


In my previous life as a Twitter gladiator, I was told a number of times, by people who should have known better, that Britain’s UKIP is a libertarian party. Hell, they said to me, even their own Constitution says so.

As a new British citizen and voter I was very eager to vote for a libertarian option, and on the key issue of Europe, I could almost understand UKIP. I've seen my share of Grexit flamewars and believe strongly that the British need their long-overdue referendum on EU membership, as indeed do the Greeks.

That's not to say I want either country to leave the EU. The institutional issue of whether or not the people deserve a vote on a matter of sovereignty is, to me, quite separate from the political issue of whether they should vote yes or no. And anticipating that the people will go for the ‘wrong’ option is the worst possible reason to deny them the choice.

That said, I could never see a libertarian option in the Brexit, pints and fags brigade – or the People’s Army as they now call themselves. The personality-cult vibe, the sheer amount of power concentrated at the hands of its leadership, the borderline illiteracy and nastiness of some of its supporters, were enough to put me off from the outset. That would have been the end of it for me, despite the meteoric rise of the party, first in the polls and then in Google searches as a bewildered commentariat scrambled to keep up.

Unfortunately, as UKIP enters the mainstream of British politics and starts courting a broader demographic, the online debates are becoming louder and more absurd; and the last round regarding the future of the NHS was the last straw for me.

Craven backpedalling

Perhaps inevitably in an ageing society riddled with sticky inequalities, the NHS became a key battleground in the run-up to the Scottish referendum, and is poised to play the same role in the upcoming election. It's a major defence line for Labour, who quickly discovered in Scotland that the NHS can be used against them just as easily as against the Tories. It makes sense, therefore, that UKIP are now being challenged on their health policies as they threaten to poach Labour voters. The Labour attack line is that they want a US-style healthcare system and want to privatise the NHS, and it does rely on some pretty libertarian-sounding comments from Farage:
"Frankly, I would feel more comfortable that my money would return value if I was able to do that through the marketplace o[r] an insurance company than just us trustingly giving £100bn a year to central government and expecting them to organise the healthcare service from cradle to grave for us."
The UKIP response to the above, pathetically, did not make any attempt at a libertarian defence of these statements. In fact, in the recent past it has denounced libertarian thinking on the NHS as ‘Right-wing ultra-libertarianism.’

No, the party’s main defence of Farage’s words, beyond a tu quoque jab at New Labour’s record on privatisation, is that the comments were made ‘two years ago’, and ‘policies develop and change over time’. This is of course true, but two years make for a very quick conversion from a libertarianism strong enough to question the sacred NHS, all the way to paternalism. What exactly happened?

We'll get to that, but let's get one thing straight: UKIP are at ease with much greater contradictions. They have, for example, squared libertarianism with an obsession with the State’s right to determine who can and cannot live or work in the UK, as well as a refusal (also written into its Constitution) to enter any treaty that limits the discretion of the UK government – which presumably includes every free trade agreement ever written. You can read other, more intelligent critiques of their self-description as libertarians here, here, here and here, but please do so after reading this one through to the end.

Bad self-branding and craven backpedalling aside, I think UKIP’s libertarian credentials cannot be demolished or defended by words alone; what politicians say does not actually matter. You have to look deep into what their marginal voters say, because few populist parties, UKIP included, will take a principled stand for anything at the expense of power. It is the profile of the marginal UKIP voter, and their views of the NHS, that has changed so rapidly over two years as the party has reached out to a broader audience. One does not grow into a contender in national politics without screwing over the early faithful, who, in UKIP’s case, may well have included a lot of anti-federalist libertarians like myself.

So in order to test UKIP voters’ views, I’ve collected their responses to a number of YouGov poll results over the last two years, always on subjects other than UKIP itself, and always polls which were not used to report on the UKIP vote itself. I am doing this in order to avoid accusations of bias against YouGov, which I will not be well placed to defend against. The important thing here is that, even if YouGov is biased against including UKIPers in its polls, as they have claimed over time, I don't see how it can simultaneously exclude UKIPers and pick more fruit-cakey UKIPers over more normal ones. 

For nationalised services, but against NHS spending?

Asked to pick from a range of potential priorities for the country in mid-October 2014, Labour voters put Health first; Lib Dems ranked it second, and Conservatives and UKIPers ranked it third. And when challenged to prioritise public spending, NHS Spending was the UKIPers’ last priority, regardless of how their options were presented to them. And of course they recommended the lowest ideal average wage for doctors and nurses out of all the parties.

So on the face of it UKIPers are almost certainly less resistant to at least some NHS cuts than other voters. Part of the reason might be that UKIPpers are the most likely voters to say the NHS doesn’t serve them well, but then they say this about everything; check out their responses.

But are their budgeting priorities based on an opposition to cradle-to-grave healthcare and the nanny state? Not by the looks of it. When asked directly what things the government should have power over, UKIP supporters are clearly in favour of a public-run NHS, and barely a statistical error behind Labour supporters in calling for state control of just about anything. 84% of them believe the NHS should be publicly-run, ahead of all but Labour supporters, and, come to that, 40% of them even believe the government should have the power to dictate the price of groceries.

Or perhaps just National Socialists?

The list of UKIPpers' socialist soundbites goes on and on. 70% of UKIP supporters would rather the railways were nationalised, and for practically the same reasons cited by Labour supporters. When appraising St. Maggie Thatcher’s legacy, UKIP voters were as likely as Labour voters to cite ‘privatising utilities such as BT and British Gas’ as her biggest failures, and more likely than any other party to cite ‘deregulating Banking and the City of London’ as her greatest failure.

And make no mistake, they mean that last bit; they are decidedly against the mobility of capital, especially when it comes to takeovers of British firms, which they oppose more strongly than anyone else; in fact 69% of them would be happy if this were banned by law.

And while UKIPers rail against social engineering through government regulation elsewhere, they are as supportive of quotas for women as any other party apart from Labour; just not of quotas for ethnic minorities, which are clearly based on a very different principle (?).

The UKIPers do draw the line somewhere, though. They are the least likely to want the government to take an active role in housebuilding. They are also, incidentally, the most housing-secure voters out there, and therefore stand to lose the most from falling property prices.

What do they mean by libertarian?

Libertarianism is a pretty niche corner of the political map; it's not popular, frankly. So how did UKIP crash into us?

Well, we know UKIP supporters are the most likely out of the four major parties to agree with the phrase ‘people have a right to keep the money they earn’ as opposed to ‘people have a duty to contribute money to public services.’ They are almost as likely as the Tories to believe the state spends too much on Welfare - although more on this will follow. They are strongly in favour of assisted suicide. They believe that internet access is a human right, as much as anyone else. And they are, on the face of it, opposed to British force projection abroad, more so than other voters; they even want the West to stay out of Russia’s way in the Ukraine.

For some, their first brush with libertarianism may have been opposing the smoking ban, even though half of the UKIP faithful are now in favour of a ban on (less harmful) e-cigarettes. Even more support a ban on flavoured e-cigarettes; perhaps they remind them of shisha pipes?

Anyway, it's a start. But then again I wonder.

Migration and economics aside, I've come across many deeply un-libertarian things that UKIPers believe. Oddly, 25% of them don’t believe the right to life should be protected, perhaps due to a preoccupation with applications of this in a military context, or perhaps due to their support for euthanasia. Like Conservatives, they are much more tolerant than other voters of police power to arrest and detain without charges. And they’re definitely against gay marriage.

Speaking of this, consider their support for businesses denying service to homosexuals on grounds of religious or other persuasion (which I actually agree with). Liberal parties (Labour and Lib Dems) see support peaking when it comes to membership clubs denying service. Conservatives and UKIPers' support peaks when it comes to Bed and Breakfasts). The key ingredient being, I think, sharing a bed.

But it gets weirder. UKIP voters are almost twice as likely as others to want the media to identify people who claim to have been raped; this is actually higher than the percentage of UKIP voters who want the accused to be named (which of course is also not acceptable). I suspect some mens-rightery is at play here.

Coming back to the issue of tax, it’s fascinating that the majority of prospective UKIP voters don’t even think their party is the best placed to get taxation right; and they don’t care. According to their responses, they would much rather pay more tax and get immigration reduced. Similarly, nearly half of them believe NO ONE should be allowed into the UK from the EU regardless of the country's skills needs or economic efficiency. More proof, if any were needed, that UKIP voters don’t intend to use the party as a platform for building a libertarian society – not by a long shot.



Maybe they're Thatcherites?

Many UKIPers see themselves as Thatcherite as opposed to libertarian. A good distinction to make, but also far from an ideal description of the party faithful. Asked to name Britain’s greatest PM, UKIP supporters were more likely to go for Maggie than any other past PM, but they did so by a much smaller margin than the Conservatives.  They were more likely than voters of any other party to pick Churchill – perhaps they too see themselves at war.

To figure out what exactly made UKIPers less rabid Thatcherites than today’s remaining Tories, it’s enough to look at the margin between the two in appraising different aspects of Thatcher's legacy; the biggest difference is in assessments of her economics – with 60% believing Maggie left the UK economically better off, vs. 85% of Tories.

And though UK voters don’t seem to like force projection these days, they were the only party voters who cited ‘winning the Falklands War’ as Thatcher’s overall greatest achievement; a libertarian distinction could be built around the claim that the Falklands War was a defence of British citizens and territory. Quite how the UKIPers thought the UK came to own an archipelago on the other side of the world is beyond me, but their view of libertarianism seems to allow for very substantial initial endowments established through illiberal means, at least when they are in their favour.

Maybe they're victims

While their views on social mobility are very, very close to those of Labour supporters, UKIPers are the voters least likely to believe education affects life opportunities - perhaps they should try it. They are the least likely voters to feel capable of influence in the workplace, which as my readers know, is a very good predictor of job satisfaction; they are also more likely than voters of other parties to feel precariously employed. If this sounds a little left-leaning, then perhaps it is. Remember, 29% of today's UKIP voters would never find the Conservatives appealing as a party.

But were they left behind by the progress or otherwise of the last 20 years? Well they are more likely than even Labour voters to say that the economy was 'always' stacked against people like them. They are twice as likely to think their personal household situation will be worse in a year’s time than even Labour supporters. And they also generally believe the next generation will be worse off - more so that voters of other parties.

As if the world hadn't already been cruel enough to them, they also seem to have the least satisfying love lives. Perhaps Ken Clarke was right after all.

Maybe they've been misled

Disappointment with the world does leave on open to suggestion, but then some UKIPers would believe anything. 10% of them believe that the net number of migrants into Britain is more than 2m a year. 19% of them think more than a million EU migrants are claiming Job Seekers Allowance.

Less credibly, UKIPers are substantially more likely to believe in ghosts, and an analysis of the 2010 vote suggests that ghost-believers have generally flooded into UKIP and out of other parties.

What we do know is that they're more susceptible to dog-whistle politics. In a recent poll, YouGov tested two different versions of the Government’s personal tax statements – one with the Government’s own crude (and inflated) measure of ‘Welfare’ and one with the Institute of Fiscal Studies’ more economically literate (and more conservative) measure. The UKIPers' share of people who thought welfare spending was ‘much too high’ went up by 79% on the Government’s version of the figures, vs. 67% for the electorate as a whole.

The bottom line

Whatever the party's past, today's UKIP supporters, I think, are openly nationalist and closet socialists. Their mistrust of state intervention comes not from a preference for freedom and personal responsibility, or any concept of economic efficiency, but from mistrust of what they see as institutions infiltrated by a hostile agenda.

The UKIP supporter questions the legitimacy of policy and institutions, because they believe that both are working against the British people. But they openly welcome state intervention in other arenas where institutions still appear to them to be working towards their own goals, or where they can recall institutions of the ‘clean’ past that could still be reinstated. Hence, for example, UKIPers’ gut instinct to defund the NHS may well stem from their belief that the NHS has been subverted in order to subsidise at best jobs for the boys and girls, and at worst the weakening of the British population and the colonisation of Britain by unsavoury, mongrel races (yes many UKIPers think this way).

Maybe they're right, now and again.

Say what you will of the UKIPers, but they do have one message that resonates. On matters of economic governance and human rights the electorate is far less liberal than the parties of Westminster, and both sides know this is the case. Interestingly, the majority of UK voters believe that ‘a political class [are] clubbing together, using their mates in the media and doing anything they can to stop the UKIP charge.’ Only Lib Dem voters disagree on balance, and even 42% of those agree.

Westminster parties believe that by making a convincing economic case for something they can win people over, but on the subject of Europe and immigration the electorate would happily take a fair amount of economic hardship in exchange for getting their way. This is inconceivable to our political elite, and that's why they can't stop UKIP, for the time being. This is how they almost lost Scotland, after all. The only thing the establishment can do for now is wait until, in pursuit of power, UKIP compromises and mainstreams itself enough for its visceral message to start ringing hollow. But the disruption we could suffer in the meantime is immense.