Under the Hellas boardwalk

Austerity measures drag Europe ever backwards.A public sector bloated by corruption and cronyism, practices for which Greece has been ridiculed, can also be found in what might be considered more financially-developed countries. New Jersey and Greece are more similar than you might think.

We have all heard about Greece's problems revealed by the financial crisis in 2008 and amplified by the ongoing eurozone currency crisis, from debt-to-GDP ratios and routine tax evasion to restricted access to certain professions and industries. All of these add to the view many have of Greece as effectively a third-world country. However, you might be surprised to find out that some seemingly very "Greek" practices are more widespread than otherwise assumed.

Many sources report that government jobs have consistently been created and given to party supporters when the party achieves power. Far from a new phenomenon, Marcus Walker introduced us to the Greek word "rousfeti", which means "special favours", in the Wall Street Journal in April 2010. This is one form of the systemic corruption in Greece that then-Prime Minister George Papandreou admitted to after he took office in late 2009. One example is given by Julia Amalia Heyer in Spiegel in February of this year. In Thessaloniki, the new mayor Yiannis Boutaris and Vassilis Kappas found that there were 5,000 employees in the city administration when only 3,000 were needed, and a coveted life-long job as a civil servant could be had for a vote.

But surely nothing of the sort could happen on American shores in the land of the free. Take New Jersey as an example. Many years of political collusion with unions and other local government entities have created a public sector out of all proportion to size and population.

The blatant bribery and corruption, known in Greece as "fakelaki", are fortunately not part of the problems in the Garden State, but complicated, multi-layered, redundant and inefficient bureaucracy is. As Joshua Zeitz has described this month in The Atlantic in an article on Governor Chris Christie, New Jersey is a complicated mess of tax-collecting government entities, each with its own vested interests intent on maintaining the status quo.

Though Governor Christie has indeed made steps towards disrupting some elements of this system of political patronage, mainly by fighting with public sector labor unions over retirement age and employee pension contribution, these overtures don't really get to the core of the problem, which is the close working relationships of the political machines in the big counties that provide state jobs and dole out lucrative contracts.

New Jersey is home to 21 counties, 565 municipalities, 603 school districts and other governmental agencies, all of which have the power of taxation. The state should bring in about $21 billion in taxes this year, and residents will also pay $25 billion in local property taxes, which go to their counties, municipalities and school districts. In trying to ease New Jerseyites' tax burden, about 40% of the state's budget is used to offset property taxes. Ultimately the citizens are paying too much to support an unwieldy and inefficient system. Because it provides jobs, many perhaps superfluous and unnecessarily expensive, the political machine has come to depend on the loyalty created by those jobs. 

This is exactly the same underlying process, albeit with some difference of degree, which Walker reported has been happening in Greece for many years, with inflated public administrations as a result of victorious political parties providing new positions to their supporters, and subsequently increasing the labor costs burdening the country's budget.
So has America, or at the minimum this little corner of it, also become a land of "free perks"?

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