Economic malpractice

The news has only gotten worse since my blog post yesterday. Simon Wren-Lewis reports that Germans are apparently willing to project their austerity fantasy on the world. He concludes, “So much easier to pretend that the problems of Greece lie with its people, or culture, or politicians, or its resistance to particular ‘structural reforms’, than to admit that Greece’s real problem is of your [Germany’s (and the troika’s)] making.”[1] Even the International Monetary Fund (IMF) has admitted that it deeply miscalculated the effect of austerity on Greece’s economy. And that was over two years ago, so Eurozone leaders have had plenty of time to digest the message.[2]

But no, the message for Greek Prime Minister Tsipras today was that he (really meaning Greece) “will need to make yet more concessions to his creditors” than were in the expired deal that Greek voters rejected Sunday (July 5). So-called “grexit,” that is, a Greek departure from the European common currency thus seems inevitable.[3] This will, of course, cost the creditors much more than they would have lost by making a deal.[4]

But the principle that money is more important than human lives will be upheld.[5]

  1. [1]Simon Wren-Lewis, “Why Germany wants rid of Greece,” Mainly Macro, July 7, 2015,
  2. [2]Larry Elliott, Phillip Inman, and Helena Smith, “IMF admits: we failed to realise the damage austerity would do to Greece,” Guardian, May 21, 2014,
  3. [3]Economist, “Euro-zone leaders demand Alexis Tsipras offer them a deal harsher than the one Greek voters just rejected. Grexit seems imminent,” July 7, 2015,
  4. [4]Philippe Legrain, “Be Bold, Frau Merkel,” Foreign Policy, July 6, 2015,
  5. [5]David Benfell, “Paying for money with human lives,” Not Housebroken, February 18, 2015,

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