The National  Memo Logo

Smart. Sharp. Funny. Fearless.

Monday, December 09, 2019 {{ new Date().getDay() }}

Treating Greece like an incorrigible child won’t improve its economy or the future of the eurozone.

“German Patience with Greece Wears Thin,” says the New York Times headline. My patience with the mainstream media also wears thin. Like a bad parent, Germany scolds Greece for something its constant beatings basically forced it to do. The media buys into Germany’s logic. Were high-pressure tactics to adopt punishing austerity cutbacks ever going to encourage Greek solidarity and social peace? Is the parent who beats the child ever going to encourage obedience and healthy behavior? Psychology has taken us a long way past the value of spankings to instill constructive attitudes. It seems not so for the Germans, although it should be said that not all of them agree with their prime minister, Angela Merkel, and government officials.

Are the Germans actually trying to get Greece to leave the euro? If so, they are probably underestimating the turmoil that would cause. On the other hand, it may be getting to the point where it is a better option for the Greeks to incur the possible closing of financial markets should they adopt a new drachma, which will quickly fall in value. They will not pay their debts to German banks and others in full-fledged euros. But they can start to determine their own fate and work with what industries they have. Their export sector is not as weak as people seem to think.

Germany’s basic refusal to take responsibility for its contribution to this situation continues to be stunning. First, it exploits a fixed euro that is too low given its competitiveness—much like the Chinese do and the Japanese did before them. Then its banks lend willy-nilly to the nations who are buying its exports, disregarding the quality of the loans and prospective inflation. (The Chinese similarly buy U.S. debt.) Third, it demands harsh cutbacks in Greece if the bad boys want money to pay their loans back. Which makes matters worse. Across the nations that have adopted austerity, debt as a proportion of GDP is higher than it was during the recession.

Spanking doesn’t work. Calling Greeks irresponsible time and again doesn’t work. It is also only partly true. Not all Greeks lied about their former finances, only the right-wing party in power at the time did. The Greeks work hard and they work many hours a week.

But the angry reaction to austerity is utterly, laughably predictable. To act as if the Germans have done everything right and the Greeks everything wrong is preposterous. When the media give credibility to these insinuations and implications, they should be called to task. We are suffering the worst economic leadership among rich countries in our lifetime. The Germans responsible should not be proud to be head of this class.

And, by the way, a letter in today’s Financial Times rightly points out that many Germans are voting in increasing numbers against the Merkel-esque politicians. It is not all Germany’s fault, just like it is not all Greece’s. And there are ways out, as I have discussed in this space many times.

Roosevelt Institute Senior Fellow Jeff Madrick is the Director of the Roosevelt Institute’s Rediscovering Government initiative and author of Age of Greed.

Cross-Posted From The Roosevelt Institute’s Next New Deal Blog

The Roosevelt Institute is a non-profit organization devoted to carrying forward the legacy and values of Franklin and Eleanor Roosevelt.

Start your day with National Memo Newsletter

Know first.

The opinions that matter. Delivered to your inbox every morning

For nearly 50 years, the Supreme Court's Roe v. Wade ruling has protected a woman's right to an abortion. It also protected many politicians' careers. Lawmakers who opposed abortion knew that as long as abortion remained available, pro-choice voters wouldn't care much about their positions on the matter.

That would be especially true of suburban mothers. Once reliable Republican voters, they have moved toward Democrats in recent elections. If the GOP wants them back, forcing their impregnated high schoolers to bear children will not help. If Roe is overturned, more than 20 states are likely to make abortion virtually illegal, as Texas has done.

Keep reading... Show less

Justice Brett Kavanaugh

On Wednesday, the Supreme Court heard arguments over a Mississippi law banning abortions after the 15th week of pregnancy. The law roundly defies the court's decisions affirming a right to abortion, but the state portrays the ban as the mildest of correctives.

All Mississippi wants the justices to do, insisted state solicitor general Scott Stewart, is defer to "the people." The law, he said, came about because "many, many people vocally really just wanted to have the matter returned to them so that they could decide it — decide it locally, deal with it the way they thought best, and at least have a fighting chance to have their view prevail."

Keep reading... Show less
x
{{ post.roar_specific_data.api_data.analytics }}