Monday, September 26, 2011
Another Dismal (Social) Scientist
Via Atrios comes this short column in the Guardian by Stergios Skaperdas that goes into a bit more detail about the mechanics of a Greek default and exit from the Eurozone. The shorter on the column is: default is better than massive deflation, and default will bankrupt Greek banks, and to recapitalize them Greece will need its own currency, and it will have to institute tight currency and capital controls for a while, and all of that requires planning, which hasn't been started as far as anyone knows. So, either the Greek government is executing masterfully, as evidenced by there being no indication whatsoever that it is about to default, or it is failing the Greek people. I'm going to say it's the latter, as governments are failing their citizens all over the place these days.