A Benjamin Cole post
The unemployment in Greece is 25 percent. The Greek economy has shrunk by 29% since 2009. That is a full-blown economic depression, an outright failure of macroeconomic policy.
And Greek citizens cannot vote for a growth-oriented monetary policy. Greek monetary policy is determined by Teutonic ideologues at the European Central Bank, the same insensate gnomes who have brought Europe to a seemingly permanent deflation and recession outlook.
And so Greek voters, looking at the wreckage that is the economy of the archipelago, voted in the left-wing Syriza Party in the just-concluded national elections.
I don’t blame the Greek voters. I am only surprised they did not eye China, and decide that communism and central planning work even better.
The Wrong Choice
Of course, Greek voters are making a mistake.
What they need is cheaper drachma and structural reforms, and meaningful tax collection. But what the man or woman on the Athens street sees is a daily business and economic catastrophe that coincides with austerity.
And they read about a huge unsustainable national debt load somehow arranged by one ruling class after another, in deference to Euro-bankers. Yet they read that when banks fail, the voters and taxpayers bail them out. Now, when a nation fails, the bankers only want their pound of flesh. Evidently, at any cost to Greek citizens.
Right in One Regard
Of course, Greece should have never incurred debts in any currency but the drachma, and should have never given up their own central bank, and they should have First World tax collections and controlled government spending.
But, at this point, if Greek voters decide to declare national bankruptcy, and stiff Greek bondholders, who can blame them?
They have been put into a tightening economic noose by the ECB for six years, and appear headed for the financial gallows. If anything, Greek voters have shown tolerance, and have not (in large) adopted the hate parties so common in the Great Depression, though the appearance in the last Greek election of the extreme-right, Nazi-inspired Golden Dawn is worrisome. Nevertheless, all citizens of the free world can salute the bulk of our Greek brethren for avoiding hate politics.
And again, we have a reminder: Tight money does not lessen structural impediments in any modern democratic economy. When the ECB suffocates Europe, it births only recession.
All pain, but no gain.