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Valve's Economist Yanis Varoufakis Appointed Greece's Finance Minister
eldavojohn writes A turnover in the Greek government resulted from recent snap elections placing SYRIZA (Coalition of the Radical Left) in power — just shy of an outright majority by two seats. Atheist, and youngest Prime Minister in Greek history since 1865, Alexis Tsipras has been appointed the new prime minister and begun taking immediate drastic steps against the recent austerity laws put in place by prior administrations. One such step has been to appoint Valve's economist Yanis Varoufakis to position of Finance Minister of Greece. For the past three years Varoufakis has been working at Steam to analyze and improve the Steam Market but now has the opportunity to improve one of the most troubled economies in the world.
Leftist borrowing and spending? As opposed to the Right's strategy, which is to borrow much more and give it to your rich business partners?
Austerity is a cynical euphemism for supply side economics, which is another cynical euphemism for intentionally creating income inequality. Which will kill your country. Every time.
The fact that he is atheist has nothing to do with the story. Why mention it?
And hats, hats, as far as the eye can see!
There'd be precedent for that in the European Union. England had a law in effect from 1571 through 1597 to make failure to wear a British-made wool cap in public a crime.
With their economy in its current state, the usual leftist option of borrowing and spending their way out of it may be very limited. .
Who in their right mind would lend to the Greeks? The way it is looking now, the German taxpayers will be paying for it . . . and they are not enthusiastically pleased about it, to say the least.
Having Greece and Germany share a common currency was a shit-brained idea. In one hour, German workers shove off a couple of Porsches and Mercedes of their production line. In one hour, Greek workers roll a few dolmades and stuff a few gigantes in a can.
And yes, I worked with some guys from Greece on a European Research project. Guys from the Athens Technology Center (ATC) and the National Technology University of Athens (NTUA). They took a month to do what student from the UK, USA or Germany could do in an afternoon.
I have the feeling that Varoufakis is just going to be another flak in the "Blame the EU" for problems of our own making choir.
Well, if you don't like the EU, Greece, don't let the door hit you on your ass on the way out.
I'm not well versed in Aesop's Fables . . . is there one about biting the hand that feeds you . . . ?
Schroedinger's Brexit: The UK is both in and out of the EU at the same time!
And yet some economists, like Krugman or Greenspan, are quite prescient with their predictions, and were/are right more often than they were/are wrong about what will happen in the future. It makes more sense to pay attention to someone who has a good track record...Krugman didn't win a Nobel prize because he was lucky or didn't know what the hell he was talking about...
Economists are like poker players. Yes, there's a lot of luck involved and half the time no one knows what they are anyone else are doing, but it IS possible to be a good economist.
That's because game economies are like real economies in many ways and they know that economies collapse when you have too much debt...when too little debt is paid back.
FTFY.
borrowing and spending their way out of it may be very limited
I don't think you understand macroeconomics. There is a too limited money supply that is significantly worsening a recession/derpession. Greece gave up one of its primary rights as a sovereign -- issuing its own currency -- and so lacks one of the most powerful policy tools for intervention in its own economy. If it wasn't part of the euro, it wouldn't have to borrow from anyone but itself. Even the US mainly borrows from itself: the majority of its debt is not held by foreigners but is simply a number registered between treasury and federal reserve, which is an accounting fiction akin to debt between husband and wife. There are primarily political reasons some of the US debt is held by others, but it's not a basic requirement of its monetary system. The typical argument against government spending is inflation, but that doesn't happen if the spending is targeted as to decrease unemployment and thus increase aggregate demand -- which is exactly what's needed in a recession. The devil is in exactly how the spending should be carried out (things like a job guarantee http://en.wikipedia.org/wiki/J... come to mind) and should not be carried out (Bernanke's quantitative easing).
"Politicians and diapers must be changed often, and for the same reason."
I just wonder what their plan is. Austerity is not a happy thing, but it is definitely possible to make things worse. With their economy in its current state, the usual leftist option of borrowing and spending their way out of it may be very limited
Austerity for an entire government simply sucks. Cutting expenses is a great idea for an individual, but for a government that's more like trying to balance your checkbook by taking a lower-paying job close to home (Hey! Gasoline expenses are way down!). Or more accurately, a company trying to balance its ledger by selling less products. Adherence to this idea is why Europe is still deep in recession while China and the USA have been back to economic growth (and in the USA's case, falling real dollar deficits) for over a year now. If it needs to do so, a government should cut expenses during a recovery, not during a recession.
Greece has some systemic problems that helped get them into this mess (eg: tax cheating is practically a national sport). But when faced with a recession they have 2 basic problems. The first is that they aren't AAA borrowers like the USA, so their government can't just borrow money at will. If they want to borrow large sums, they have to cajole it out of someone (like the EU). The second is that they are shackled to the Euro, which means all the monetary policy options that the US relied on to pull itself out are not available to Greece. That means leaving the EU, or borrowing more money from it, are really their only 2 options.
It would really behoove the EU to develop some analog to the US's Fed to run their monetary policy. The problem is everything there seems to run on consensus, and I simply don't see how that's possible when you have such divergent members. They'd have to get themselves a semi-independent policy board, like the US has, or unify all their national budgets and expect to have to regularly pour EU tax dollars into poorer members, like the US does every year with Mississippi.
One thing is pretty clear though. The current middle ground the EU is trying to run just isn't working.
That article hits the nail in the head. For Europe, this is not about Greece: Their economy is small, and by itself, if they sank nothing would matter. It's what it says to Spain, a country with a general election coming pretty soon, and who has its own new, populist left wing party that runs against corruption and austerity.
The Eurozone can handle anything that happens to Greece. But if Spain decides to ignore the troika, beware.
What Europe calls austerity, everyone else calls living within one's means. Which, in the long term, is non-optional.
Quite apart from the politics and economics, this is a really complex moral issue.
On the one hand, the Greek people repeatedly elected governments that failed to collect taxes or eliminate corruption, spent money that they didn't have and borrowed money that they couldn't afford to repay. On that assessment, the Greeks deserve every bit of misery they've endured since their creditors decided to stop pouring good money after bad. But the trouble with that view is that a different bunch of Greeks are having to pay the bills: an entire generation is growing up with a broken economy because their parents voted for jam today.
It's the same with the creditors. In pursuit of political gain and a quick buck, banks and other eurozone governments supported successive corrupt Greek governments in their act of intergenerational theft. They deserve to lose their shirts as the Greeks default just as surely as a payday lender that fails to assess the affordability of its loans deserves to go bust. The problem is that the bill ultimately gets picked up by innocent bystanders - mostly German taxpayers. True, those same German taxpayers voted for their inept government that failed to regulate their banks' exposure to Greece, but that was hardly a major electoral issue at the time.
So Greek voters and Greek governments connived with European bankers to profit from the German population and younger Greeks. I have no sympathy with any of them. A plague on all their houses!