A blogger known as Redesigning the foot and describing himself as “an ex-economist existing beyond his means in Greece”, has this week continued a detailed demolition of Schäuble’s economic policies by giving poor Schäuble the dark glasses, the uncontrollable right arm and the wheelchair sported by Peter Sellers in the movie masterpiece of 1964.
The ex-economist argues that holding down the wages of German workers has beggared the unemployed workers of Greece.
Whether Schäuble’s chilling words at the end of an Ecofin press conference in Berlin yesterday, “Greece must decide does it want this program or does it not“, quite match the horror of Dr. Strangelove’s wheelchair announcement, “because of the automated and irrevocable decision-making process which rules out human meddling, the Doomsday machine is terrifying and simple to understand … and completely credible and convincing” remains to be seen.
The “ex-economist” says that Schäuble’s misguided policy has been:
To chase down little pots of gold, found at the end of the rainbow, called trading surpluses.
If it weren’t for the euro or for agreements in the labor market that Schäuble mentions above, then this excess demand for ‘all things German’ would have raised the price of German goods, increased the demand and the wages of the workers that produced these goods, and eliminated the trade surplus.
A Schäuble trade surplus means that wages are lower than what they would be (without the agreements). It also means the wages are also lower than what they would be relative to capital (so we use less machines, robots etc in the production mix). So more labor (which Schäuble economy sucks in from the periphery’s pool of idle young) and less capital is being used than what would otherwise have occurred. In other words, there is less physical investment and this creates a lower or sluggish growth rate. This drags down the growth rate not only of the Schäuble economy, but the entire European continent with it.
In other words the German or the Schäuble economy is highly inefficent one in its misuse of resources and dooms the European economy, by getting investment wrong, to lag behind the rest of the world. This inefficiency is paid by imposing austerity on taxpayers living in the periphery.
So if surpluses are wasteful, Germany is Europe’s most inefficient economy.
No comments:
Post a Comment