Well, this is rich. This is old news by now, but I missed it while I was off on vacation last week and it’s a pretty slow day out there — so why not take a moment to once again observe the hubris of a president who, unable to spur his own domestic economy into robust growth-mode with repeatedly failed Keynesian policies, feels free to advise the same to a country with more than a 27 percent unemployment rate? Via WaPo:
President Obama, in a meeting with Greek Prime Minister Antonis Samaras on Thursday, expressed support for Greece’s efforts to restructure its economy and stressed the need for the country to start focusing on jobs and growth. …
The two leaders stressed the need for Greece to go beyond the tough austerity program that it adopted as a condition for a $315 billion bailout from the International Monetary Fund and the European Union.
“In dealing with the challenges that Greece faces, we cannot simply look to austerity as a strategy,” Obama said. “It’s important that we have a plan for fiscal consolidation to manage the debt, but it’s also important that growth and jobs are a focus.”
Countries that are growing and where employment is high “have an easier time reducing their debt burdens than countries where people are feeling hopeless,” the president said.
Hey, that’s perfectly true — countries with more gainfully employed, productive, and private-sector workers reliably enjoy a higher level of revenue than flailing and depressed economies, and this is what Greece’s economic picture looks like right about now:
Greece’s economy contracted 4.6 percent in the second quarter compared with a year earlier. While that is slightly less than in the previous quarter, it still leaves the country in an economic hole that some have termed a depression. The official forecast is that growth will only return in 2014, and it will take years before the economy reaches pre-crisis levels.
Greece triggered Europe’s debt crisis in October, 2009 when it admitted it had underreported its budget deficit for years. It was the first of the continent’s economies to get an international bailout. The policy of spending cuts and tax increases demanded by creditors to cure public finances has reduced the deficit but savaged the economy and society.
The economy has shrunk by roughly 24 percent since 2008, business bankruptcies have skyrocketed and unemployment is at a record 27.6 percent — and 64.9 percent for people under 25. The statistics bear some resemblance to those during the Great Depression in the United States, when gross domestic product fell 27 percent in 1929-1933 and unemployment climbed to over 20 percent.
Except that, there’s the rub: European and liberal economists seems awfully quick to blame the ‘spending cuts and tax increases demanded by creditors’ as the economy’s vanquishers and insist that “austerity is dead!,” instead of blaming — you know — the years and years of wildly unsustainable public spending policies and extravagant promises that landed Greece and others in this situation in the first place. Yes, any significant amount of economic-structural reorganization is going to mean real material hardship in the short-term, but advising more government spending to ‘create jobs’ when it’s the government’s bad habit of insanely exorbitant spending that started it all? That sounds like a punchline to some sort of tragic joke.