Tuesday, June 30, 2015

Matthew Dal Santo — Greek debt crisis: the failure of the euro wasn't just predictable, it was predicted

The worst of it is that all this - the acrimony between Brussels, Berlin and Athens; the misery induced across Greece by depression-era levels of unemployment - was not just entirely predictable but actually predicted.
Anyone who subscribes to the London Review of Books will have noticed the reappearance over the weekend of the 1992 essay 'Maastricht and all that' by Wynne Godley....
Interesting to peruse the comments. The commenters are completely clueless.

The Drum | Opinion
Greek debt crisis: the failure of the euro wasn't just predictable, it was predicted
Matthew Dal Santo | Danish Research Council post-doctoral fellow at the Saxo Institute, University of Copenhagen


Roger Erickson said...

Yes, predicted by everyone EXCEPT the rubes being looted. Those same people still don't know what hit them, even in Greece. Unless we find out later in their referendum next week.

Don't be surprised by a "referendumb."

Jonathan Larson said...

Yes indeed, the problems of the Euro were built into the Maastricht Treaty (punch that link and you see what I was writing in June 2011.) The Euro was designed by Robert Mundell, the idiot junior colleague of Milton Friedman at the University of Chicago (if you can imagine such a thing is possible.) It was an idea based on everything that produced the Great Depression. This right-wing BS was thoroughly discredited in 1873, 1893, 1907, 1921, and 1929. But did those fools learn anything? Are you kidding?

I tried to warn my European colleagues about the dangers of the Euro. And to their credit, my tribe in Norway and Sweden stayed out of that trap. But for most in Europe, monetary policy is just a detail. For someone who grew up in rural Minnesota where monetary policy was passionately debated in barber shops and church basements, this still stuns me. The Marxists I know truly hate the subject. There are dozens of reasons for this, but mostly it explains how a Barasso can go from being a Maoist to a neoliberal swine without his head exploding from the contradictions.

Simsalablunder said...

Sweden has signed the Maastricht Treaty.

Jonathan Larson said...

Yes, but Sweden didn't sign up to use the Euro which is this debate, is the critical fact.