Quiz for the day: what do Greece, New York State and the U.S. Virgin Islands have in common? Answer: All three face enormous short- and long-term financial problems that are recognized by their leaders, while their populations remain in a state of denial.
In addition, there are other similarities, despite the huge differences in size. The populations of all three places have strong senses of entitlement to various things. In Greece, people feel entitled to not work hard, to not pay taxes and to get a pension when the reach their mid-fifties. In New York State, many people feel entitled to have a hospital on their corner, and state workers feel entitled to pensions that are similar to those in Greece. In the territory, people feel entitled to a government job where they do not have to work very hard, and get lots of days off and a pension.
These three also share two other negative qualities that are likely to haunt them in the future. The first is deep social divisions. In Greece these are political, in New York State they are geographic and political, and in the U.S. Virgin Islands the tensions are racial and inter-island.
The second negative quality that is related to these divisions is widespread corruption, which in each place has produced a political class that is unto itself and represents only narrow constituencies that drain public resources while producing little of value.
In good times, you can slide by with these kinds of conditions. But in hard times, and especially in a prolonged period of austerity, many chickens are going to come home to roost. In periods of recession or depression, the ugliest voices of division and selfishness typically become the loudest. And they find a bigger audience of people looking for someone to blame for their situation. In the age of talk radio and cable television news, these voices of division have a bigger megaphone than ever.
The U.S. Virgin Islands will face major challenges in the near future. The biggest will be to make its public sector-driven economy work better for the people of the territory. It will not be easy. It is one thing to have a large public sector. But, as in Greece, it is quite another thing to have that sector be largely unproductive and unable to provide basic services at an acceptable level.
It is very interesting to talk to Greek Americans about the situation in Greece. The Greeks face a harsh future, but there is very little sympathy for them in this country or elsewhere. As Greek Americans point out, we came to the United States, worked very hard and paid our taxes. In Greece we are seen as being foolish. Why not live in Greece? Little work, a pension, a good life. This is not a picture likely to stir compassion in the hearts of others.
If Virgin Islanders need outside help, it is going to be very difficult to explain all of the strange holidays and the fact that so many people get so little done. The only hope will be that nobody notices. I wouldn’t count on that in the current environment. Expect a compassion shortage here as well.
At the heart of the matter are choices. In most places today, the choices amount to what gets cut. That is a really bad option in the U.S. Virgin Islands because there will be big and very negative “ripple effects.”
The standard choice, the “default position,” in most places is to not choose at all, to maintain the illusion that if we do nothing, it will all go away. But time is an enemy. The longer the delays, the worse the choices.
Different places have different ways of saying “no.” The Greeks riot. In New York State, highly organized interest groups buy or threaten their way to having their group left alone. Screw someone else. In the territory, everyone just digs in their heels and takes the position that no change — except “more” — is ever possible.
But change is coming. It is a just question of who will control it. If the answer to every proposed adjustment is either “no” or stick it to that other guy, the change is going to be controlled by outside forces. This is what is happening in Greece, and it is what happened in New York City 35 years ago. The conversation is not pretty: "You don’t like these choices and these cuts? Tough. You had your chance."
"But don’t you care what we think?"
The best possible path for the territory is pretty clearly marked, although there is no guarantee of success. The territory needs a large public sector as the engine of its economy. What it definitely does not need is a non-productive public sector that produces poor-quality public services at a high cost.
There is a vision of a brighter future. It includes far better schools, reduced fear of crime and an environment that everyone can be proud of. It does not include large numbers of people doing little work or being put out when they have to perform some function. Standards in that better future cannot be defined by the lowest common denominator.