The dangerous economic thinking that’s killing Greece and threatening the European Union

„Among the puzzling aspects of the MoU [Memorandum of Understanding] are demands for reforms on things as seemingly trivial as milk. While pensioners are eating out of garbage cans, the troika has been haggling over how old a carton of milk can be if it is to be labeled ‚fresh.‘ [Joseph] Stiglitz observes that if you look closely you see that special interests—in this case the big dairy companies of Holland—appear to be behind the reforms. Dutch milk sellers would prefer that their milk, which travels long distances to reach Greece, be labeled fresh, a move that will only hurt local dairies. By discouraging local production, the MoU paves the way for even more Greek unemployment and less demand for goods and services — hardly a recipe for economic health. (The chairman of the Eurogroup, it may be worth noting, is Jeroen Dijsselbloem, the Dutch finance minister.) […]

Instead of remembering the terrible consequences of mass unemployment following WWI, many Germans insist that it was hyperinflation that led to Hitler, and so they tend to support central bank policies that guard against that problem rather than the far more worrisome specter of joblessness.

As Stiglitz describes, the result of all this historical amnesia and economic blindness is a ‚Dickensian‘ nightmare that recalls 19th-century debtors prisons where people were punished for the inability to pay debts and locked (literally) into a situation in which paying them was, of course, impossible. Only now, the prisoner is an entire country.“

http://www.alternet.org/economy/joe-stiglitz-dangerous-economic-thinking-thats-killing-greece-and-threatening-european-union?akid=13410.1084699.dOTPlx&rd=1&src=newsletter1041348&t=2

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