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Gong Show in Davos

January 21, 2013 - Harry Eagar
Remind me again why executives just have to be paid 500 times what ordinary workers are paid:

"The parade of economists and investors led by Nouriel Roubini predicting Greece’s ejection by now from the euro zone failed to appreciate the resolve of European policy makers to protect their union and the amount of pain Greeks are willing to stomach. . . . "Joining him in questioning whether the 17-nation euro region was built to last and declaring Greece’s departure imminent, inevitable or in its interest were hedge-fund manager John Paulson, Goldman Sachs Group Inc. President Gary Cohn, Nobel laureates Paul Krugman and Joseph Stiglitz, Pacific Investment Management Co. Chief Executive Officer Mohamed El- Erian, Kenneth Rogoff and Martin Feldstein of Harvard University and Citigroup Inc. chief economist Willem Buiter."

Thus Bloomberg News.

If anybody has been following RtO since its inception early in 2008, he or she may recall that I stated it as obvious then that modern economies have enormous resiliency, so that a) they tend to recover from setbacks fairly quickly; and b) it takes some really, really stupid ideological interference to knock them down.

The rightwingers provided the interference. Fortunately, the residuum of good sense that the New Dealers and Keynesians taught two generations ago was strong enough for governments to adopt their backstop role as lender-of-last-resort and prevent the idiots from destroying prosperity for a generation, like the rightwingers did in the '20s.

Unfortunately, the other lesson of the New Deal -- unsupervised markets fail but reasonable supervision makes them work -- did not survive the assault of the Reaganites.

I notice, from comments around the Internet, that the advice of the rightwingers in 2008 to let the market be the market (that is, to repeat Treasury Secretary Andrew Mellon's advice in 1930 to liquidate labor, liquidate stocks etc.) has been thrown down the memory hole.

If you read the whole Bloomberg News report from Davos, you'll see that the geniuses (who, if you look at that list, include a couple of well-known leftwingers) are predicting that Greece will still fail and force eurocide.

During the past few weeks, I have been reading the humor columns of A.P. Herbert in Punch written in 1931, when Britain was attempting to work its way out of the collapse caused by free market and solid money policies through austerity and providing Herbert with plenty of room to make jokes at the expense of the Inland Revenue. This reinforces my view, which will be obvious to anyone who knows economic history, that if the rightwingers continue to have their way with Greece, they will indeed kill the Greek economy, and very likely the euro along with it.

 
 

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