Wednesday, September 12, 2012


How long does it take to recognise failure? What amount of reality is necessary to overwhelm our defensiveness and conquer our cognitive dissonance? What does it take for us to look at something and say, 'sorry, I made a complete bollocks of that'? Judging by Eurozone policies, it needs something of Himalayan proportions.

By the terms it set itself, austerity has failed. Greece should have been growing modestly by now; instead it is contracting at an accelerating rate. There isn't even a sign of growth, there is no remission from the bad economic news, previously viable private enterprises are closing, fascist thugs not only beat up immigrants on the street, they also get elected to parliament, and there are signs of growing hunger - yes hunger - in what should be an affluent, European nation.

Of course the crisis is being felt differentially and an outsider would see little other than the same lovely country and people. Amongst the tales of the despair of the poor and of capital flight by the rich are others of initiative and enterprise, but underneath there are reports of a deepening pessimism.

This excellent post shows where the bailout money goes - straight back to the donors. This is not a rescue of profligate Greeks, but of imprudent financial institutions, in order to shore up a flawed monetary union.

And despite the failure, they still can't lose the habit. The ECB may now be offering to buy bonds to keep down borrowing costs, but as a condition of doing that they are insisting on ... yes, you guessed, it more austerity. At times like this they should turn to the wisdom of Homer - Homer Simpson that is. "If at first you don't succeed, give up."

Hat tip Marcus Walker

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