February 14, 2012
Micro review corner: "My Life in Ruins" is a
Today's bloggers' coffee klatch discussed the woes in Greece and whether enough Americans see the riots and fires as our potential future. The WSJ Ed Page lays it out well: What happens to countries that choose economic decline
To top it off, the technocrats in Brussels and at the IMF have misdiagnosed the crisis from the beginning. First, they thought Athens had a liquidity problem that could be eased by large infusions of loans, rather than a fundamental solvency problem. Second, they believed that what Athens needed most was a balanced budget and a smaller debt load, to be solved arithmetically with less spending and higher taxes. But Greece's real problem is the lack of economic growth, itself a product of policies that discourage private enterprise. That's why Greece ranks 100th on the World Bank's most recent rankings of "ease of doing business"--right behind Yemen.
The piece ends "The larger question is whether the rest of Europe and America will learn from Greece's chaos before they experience the same fate. " To which we all agreed this morning that the investment advice of the day was to "go long European Tear Gas."
Economics and Markets Posted by John Kranz at February 14, 2012 12:59 PM