[np] Austerity is not Greece's Problem (Ricardo Hausmann)

Tue Jul 7 06:24:01 CDT 2015

Book agents have never believed in austerity.

On Tue, Jul 7, 2015 at 7:14 AM, Kai Frederik Lorentzen
<lorentzen at hotmail.de> wrote:
>
> Yeah, here's something for you fan-boys to show your, um, solidarity:
>
> http://www.redbubble.com/shop/varoufakis+t-shirts
>
> And then there's this ...
>
>> Just three-and-a-half hours after controversial Greek finance minister
>> Yanis Varoufakis resigned, his London-based book agents sent around a
>> public-relations email offering excerpts from his updated book, the Global
>> Minotaur, and other pieces of information.
>
> The communications director at Zed Books, the publisher of Mr. Varoufakis’s
> book, sent your correspondent an email describing Mr. Varoufakis as the
> “possibly the coolest, charismatic and most intelligent Finance minister
> ever” and even suggested a hashtag:#MinisterofAwsome.
>
> Greeks on social media responded angrily to what they saw as aggressive
> promotion of Mr. Varoufakis, one of the architects of the country’s current
> negotiating conundrum with its creditors.
>
> “Is this a joke?” said one.
>
> “OMG,” said another. <
>
> http://blogs.wsj.com/moneybeat/2015/07/06/hours-after-exit-varoufakis-emerges-as-ministerofawesome/
>
> There's no business like show business ...
>
> On 06.07.2015 16:10, Keith Davis wrote:
>
> Great quote...
>
>
> Www.innergroovemusic.com
>
> On Jul 6, 2015, at 10:03 AM, David Morris <fqmorris at gmail.com> wrote:
>
> http://www.washingtonmonthly.com/political-animal-a/2015_07/and_i_shall_wear_the_creditors056421.php
>
> "And I shall wear the creditors’ loathing with pride."
>
> On Mon, Jul 6, 2015 at 8:33 AM, John Bailey <sundayjb at gmail.com> wrote:
>>
>> An amazingly fun analysis of the language of economists, by an
>> economist, if anyone cares to read (it's very long and slightly
>> Australia-centric):
>>
>>
>> http://www.themonthly.com.au/issue/2015/july/1435672800/richard-denniss/clowns-and-treasurers
>>
>> On Mon, Jul 6, 2015 at 11:16 PM, David Morris <fqmorris at gmail.com> wrote:
>> >
>> > https://medium.com/@gavinschalliol/thomas-piketty-germany-has-never-repaid-7b5e7add6fff
>> >
>> > Thomas Piketty: “Germany has never repaid.”
>> >
>> > On Sat, Jul 4, 2015 at 2:36 PM, David Morris <fqmorris at gmail.com> wrote:
>> >>
>> >> I think the difference between the US and the Euro is obvious:  one is
>> >> a
>> >> country, the other is a currency.  Currency, like Corporations, aren't
>> >> people. A Country is made of people.
>> >>
>> >> The EU was never a sincere Union.  It was a bankers deal, pure and
>> >> simple.
>> >>
>> >> David Morris
>> >>
>> >>
>> >> On Saturday, July 4, 2015, David Morris <fqmorris at gmail.com> wrote:
>> >>>
>> >>> Blame is the name of this game.  Greasy Greece needs Reform School
>> >>> Marm
>> >>> Urkle. Meanwhile a nation is indentured, and the banks aren't
>> >>> inconvenienced.
>> >>>
>> >>> Bravo Euro!
>> >>>
>> >>> David Morris
>> >>>
>> >>> On Saturday, July 4, 2015, Kai Frederik Lorentzen
>> >>> <lorentzen at hotmail.de>
>> >>> wrote:
>> >>>>
>> >>>>
>> >>>> When looking out a window, it is easy to be fooled by your own
>> >>>> reflection and see more of yourself than the outside world. This
>> >>>> seems to be
>> >>>> the case when US observers, influenced by their own country's fiscal
>> >>>> debate,
>> >>>> look at Greece.
>> >>>>
>> >>>> For example, Joseph Stiglitz regards austerity in Greece as a matter
>> >>>> of
>> >>>> ideological choice or bad economics, just like in the US. According
>> >>>> to this
>> >>>> view, those who favor austerity must be obsessed with the theory,
>> >>>> given the
>> >>>> availability of a kinder, gentler alternative. Why would you ever
>> >>>> vote for
>> >>>> austerity when parties like Greece's Syriza or Spain's Podemos offer
>> >>>> a
>> >>>> pain-free path?
>> >>>>
>> >>>> The question reflects a lamentable tendency to conflate two very
>> >>>> different situations. In the US, the issue was whether a government
>> >>>> that
>> >>>> could borrow at record-low interest rates, in the middle of a
>> >>>> recession,
>> >>>> should do so. By contrast, Greece piled up an enormous fiscal and
>> >>>> external
>> >>>> debt in boom times, until markets said “enough" in 2009.
>> >>>>
>> >>>> Greece was then given unprecedented amounts of highly subsidized
>> >>>> finance
>> >>>> to enable it to reduce gradually its excessive spending. But now,
>> >>>> after so
>> >>>> much European and global generosity, Stiglitz and other economists
>> >>>> argue
>> >>>> that some of Greece's debt must be forgiven to make room for more
>> >>>> spending.
>> >>>>
>> >>>> But the truth is that the recession in Greece has little to do with
>> >>>> an
>> >>>> excessive debt burden. Until 2014, the country did not pay, in net
>> >>>> terms, a
>> >>>> single euro in interest: it borrowed enough from official sources at
>> >>>> subsidized rates to pay 100% of its interest bill and then some. This
>> >>>> situation supposedly changed a bit in 2014, the first year that the
>> >>>> country
>> >>>> made a small contribution to its interest bill, having run a primary
>> >>>> surplus
>> >>>> of barely 0.8% of GDP (or 0.5% of its debt of 170% of GDP).
>> >>>>
>> >>>> Greece's experience highlights a truth about macroeconomic policy
>> >>>> that
>> >>>> is too often overlooked: The world is not dominated by austerians; on
>> >>>> the
>> >>>> contrary, most countries have trouble balancing their books.
>> >>>>
>> >>>> Recent advances in behavioral economics show that we all have
>> >>>> enormous
>> >>>> problems with self-control. And game theory explains why we act even
>> >>>> more
>> >>>> irresponsibly when making group decisions (owing to the so-called
>> >>>> common
>> >>>> pool problem). Fiscal deficits, like unwanted pregnancies, are the
>> >>>> unintended consequence of actions taken by more than one person who
>> >>>> had
>> >>>> other objectives in mind. And lack of fiscal control is what got
>> >>>> Greece into
>> >>>> trouble in the first place (...)
>> >>>>
>> >>>> The problem is that Greece produces very little of what the world
>> >>>> wants
>> >>>> to consume. Its exports of goods  comprise mainly fruits, olive oil,
>> >>>> raw
>> >>>> cotton, tobacco, and some refined petroleum products. Germany, which
>> >>>> many
>> >>>> argue should spend more, imports just 0,2 % of its goods from Greece.
>> >>>> Tourism is a mature industry with plenty of regional competitors. The
>> >>>> country produces no machines, electronics, or chemicals. Of every $10
>> >>>> of
>> >>>> world trade in information technology, Greece accounts for $0.01.
>> >>>>
>> >>>> Greece never had the productive structure to be as rich as it was:
>> >>>> its
>> >>>> income was inflated by massive amounts of borrowed money that was not
>> >>>> used
>> >>>> to upgrade its productive capacity. According to the Atlas of
>> >>>> Economic
>> >>>> Complexity, which I co-authored, in 2008 the gap between Greece's
>> >>>> income and
>> >>>> the knowledge content of its exports was the largest among a sample
>> >>>> of 128
>> >>>> countries (...)
>> >>>>
>> >>>>
>> >>>>
>> >>>>
>> >>>> http://www.project-syndicate.org/commentary/greece-export-problem-by-ricardo-hausmann-2015-03
>> >>>>
>> >>>>
>> >
>
>
>
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