Tuesday, October 30, 2012

The National Interest: Austerity Has Yet To Come To Greece

The idea that deep cuts are pushing Greece to the brink makes for great punditry. But it is a woefully incomplete description of what is really happening. Austerity is not killing Greece. Instead, austerity has yet to come to Greece.

Read the full version of my article on the National Interest website.

10 comments:

  1. Your article provokes a what-if question in my mind. My understanding is that the method of bloating the public sector was invented by PASOK after 1980 and swiftly copied by ND, and facilitated by funding from abroad. Thus, hundreds of thousands of Greeks could find employment in the public sector and the economy could do more selling of souvlaki to each other (thereby creating service jobs). The latter statement is just symbolic!

    What, if the public sector had not become bloated? Are you saying that, in that case, the private sector would have found ways to productively employ those people? In other words, what if the Greek economy had had reasonably balanced internal and external accounts since the 1980s? Would it have had a massive structural unemployment ever since or would it have developed a well-functioning economy?

    My understanding is (and I derive this from the article which I link below) that the Greek economy registered annual growth of 5,2% in the period 1929-80. Considering all the trouble Greece went through during this time, a clear success story. Are you suggesting that this success story would have continued if the public sector bloating had not started after 1980?

    Would be interested in your views on that.

    http://users.uoa.gr/~ahatzis/Hatzis_2012_09.pdf

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  2. I agree.

    In this phrase: "fewer civil servants due to retirements (down 8 percent) and a doubling in EU finding", I guess you mean 'funding'?

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  3. Thx to Sandy, the nationalinterest site is down, is it possible to have the article re-posted in your blog under these circumstances?

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  4. Published on a website that endorses Mitt Romney. Goodness gracious.

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    1. Don't judge a book by its cover but by the shelf it sits on.

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  5. So you are saying the protests are made by well-fed, well-cared-for people who just don't understand how spoiled they are? After watching Greece for a couple of years, partly through your blog, this seems entirely possible to me - but somehow it also doesn't rhyme. 1. Are the figures reliable? I would be sceptical. 2. The volume of economic activity is drastically down since the economy is contracting (or maybe those figures are wrong too?), so how does the private-sector nation survive?

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    1. Olav--see my latest post--inspired by your and other comments.

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  6. Nikos, with all due respect your personal crusade to convince people that "austerity is something unknown to Greece" is lacking. Its contradiction in terms is astonishing. Perhaps your analysis has insuficient data to conlude (i'm reffering to your earlier post with eurostat figures). Perhaps you just used current price data.
    In any case your thoughts are recorder but not believed. Please come to Greece to see for yourself the non-austerity conditions of the people. This can give you food for thought and reposition on the issue...

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    1. Appreciate the comment--I started to respond but ran out of space--hence a new post. Let's pick up the discussion there.

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