“Well written and an interesting perspective.” Clan Rossi --- “Your article is too good about Japanese business pushing nuclear power.” Consulting Group --- “Thank you for the article. It was quite useful for me to wrap up things quickly and effectively.” Taylor Johnson, Credit Union Lobby Management --- “Great information! I love your blog! You always post interesting things!” Jonathan N.

Wednesday, June 8, 2011

Democracy and the Courts: Alternative Checks on Austerity

In May 2011, “Athens agreed to impose a new $9 billion round of tax increases and spending cuts and speed up nearly $75 billion in promised privatizations.” In early June, a new round of tightening was being planned by the Greek government. It was feared that those cuts would deepen the recession and thus further shrink the tax base, making it even harder for the government to cut its deficit. Meanwhile, Reuters reported, “Greeks are showing signs of reaching the limits of their endurance as budget cuts imposed under Greece's first bailout a year ago have helped to push unemployment close to 16 percent.” The news service cited police reports of more than 80,000 people packing the main Syntagma square outside parliament on June 6th—the 12th consecutive day of protesting there.

                               Reuters

Reuters reports that George Papandreou, the Prime Minister of the parliamentary state government, “used his parliamentary majority to ram through successive rounds of austerity including cuts to pensions and civil servants' salaries. But faced with the popular anger, some PASOK lawmakers [were] becoming uneasy.” The extent of protests suggests that the cuts may have been hitting up against bone. Short of a coup, however, protests do not in themselves arrest a government.

Interestingly, pressure from the E.U. on the Greek state to get its public finances in order has not been countered by intervention by the ECJ or a state court to protect constitutional obligations of the state toward civil servants, the unemployed, and the poor. In the case of some of the American states that have been instituting rather severe austerity programs, the governments have been reminded of their respective constitutional obligations in ways that have forced the governments to back off on some of their cuts. Specifically, the republics’ respective constitutional courts have been stepping in on behalf of the people (and the constitutions). North Carolina, Kansas, and New Jersey illustrate this dynamic, which is curiously lacking in the case of Greece.

The New York Times reports that in June 2011, “A judge in North Carolina has scheduled a hearing . . . to examine whether education cuts there violate previous court orders. ‘The current financial difficulties of the state do not relieve, justify or excuse the State of North Carolina from its constitutional obligation to provide each and every child in North Carolina an equal opportunity to obtain a sound basic education,’ the judge, Howard E. Manning Jr. of Wake County Superior Court, wrote in announcing the hearing.” How is Greece doing on its constitutional obligation?

The newspaper adds, “School districts in Kansas have filed a lawsuit arguing that with recent cuts in education spending, the state has effectively reneged on the promises it made to abide by old court rulings — a charge the state denies. ‘Just because the checkbook is empty doesn’t mean that the constitutional standard is swept away,’ said John S. Robb, a lawyer for the school districts, adding that Kansas had cut taxes as it cut education spending. ‘Especially if you are cutting taxes and claiming poverty,’ he added.” In the case of Greece, part of the problem may be tax evasion rather than a tax cut “solution” to deficits. Both Kansas and Greece should raise as much revenue as possible without sparking a recession; a tax cut or looking the other way in tax collecting is a luxury that neither state can afford.

Finally, “’Like anyone else,’ the New Jersey Supreme Court ruled, ‘the state is not free to walk away from judicial orders enforcing constitutional obligations.’ The court ordered the state to spend another $500 million in those districts. . . . Governor Christie of New Jersey, a Republican, complained after the schools ruling that ‘as a fundamental principle, I do not believe that it is the role of [New Jersey’s] Supreme Court to determine what programs the state should and should not be funding, and to what amount.’” At the same time, Christie could blame the high court for having to institute tax increases as he thanks the justices for relieving him of the political fallout from the cuts that he would have had to make. As of early June 2011, Papandreou could not avail himself of such a cover, and he had the other European states breathing down his back through the E.U. (and the world through the I.M.F.). Consequently, he was facing mass protests, whose utility in pushing back on the cuts does not have the force of a judicial ruling. It is ironic that the least democratic of the governmental branches may be the ultimate protector that a people can call on to counter lapses by their own government.


Sources:

Michael Cooper, “Courts Upend Budgets as States Look for Savings,” The New York Times, June 7, 2011.

George Georgiopoulos, “Greek Austerity Plan Draws 80,000 to Athens Square,” Reuters, June 5, 2011.

Kicking the Can,” The New York Times, June 6, 2011.