np - The Financial Folly of Fairness

[David Morris]

1. The bailout is *Greek debt* owed to German banks.
2. The Euro can't be delvaued differently in different coutries.  So,
yes, Greece leaving the Euro is one solution.
3.  Austerity is a foolish solution to a recession. but a recurrent foolishness.

On Thu, Nov 10, 2011 at 7:20 PM, Richard Fiero <rfiero at gmail.com> wrote:
> It's not clear to me why the Atlantic article makes any sense.
> 1. The bailout is not to the Greek people but to German and French banks.
> 2. Greece buys more than it produces and should devalue its currency making
> imports into Greece more expensive and encouraging domestic production. That
> would make Greek exports more competitive. The problem is that the Euro is
> not a Greek sovereign currency.
> 3. Greek austerity will put German workers out of work.
>
> David Morris wrote:
>>
>>
>> http://www.theatlantic.com/business/archive/2011/11/the-financial-folly-of-fairness/248216/
>>
>> "It is obvious that either Germany is going to have to guarantee
>> massive ongoing fiscal transfers to the PIIGS, or Greece and probably
>> Italy are going to have to undergo a massively contractionary
>> austerity program, or they will have to leave the euro.  These three
>> choice exclude both each other, and any other mathematically possible
>> outcome."