For the “Stupid Economy” chapter…

… an interview with Greg Palast…http://truth-out.org/news/item/29260-palast-to-syriza-don-t-lie-it-s-impossible-to-end-austerity-within-the-eurozone

With this interesting quote about the economist who was the "father of the Euro" of sorts and also of "voodoo economics"- of all things. Funny that Palast would describe this guy as extremely right wing- meaning he was a precursor of all things austerity, tax revolt, dereg… the giant triad of failed conservative policy. Failed for the many, anyway, but great for the folks who live on the hill.

Mundell, who taught at Columbia University, won the Nobel Prize for his writings on currency, and what’s interesting is that he won the Nobel Prize for the theory of optimum currency areas, the theory that nations should join currency unions when they have similar economies. Therefore, agriculture economies should have a joint currency; he thought the US and Canada [should] have two different currencies, east-west, not Canadian-American, but the western US should have one currency with Canada, and eastern Canada and the eastern US should have one currency. In other words, he believed that a combination, like putting Germany in the same currency zone as France and Spain, would be ridiculous; it’s a violation of his core theory through which he won the Nobel Prize.

Why is this important? This is the very same guy who is the inventor, you could say, of the euro, which he called the "europa" – that there should be one single common currency for all of Europe, damn the optimum currency theory. Now why would someone suggest a currency that is exactly the opposite of everything he’s taught? I spoke to him about this, and he said that it has nothing to do with creating a good currency. It has everything to do with changing the politics of Europe. He was very, very right-wing. He is the creator of another economic theory, which wouldn’t get him the Nobel Prize; in fact, it’s called "voodoo economics," supply-side economics. That is, the more you cut taxes, the more tax revenue you get. The more deregulation of business you get, the better your economy – and if you deregulated the banks, there would be less risk in the banking system. All of those supply-side systems, which we call "Thatcher economics," "Reaganomics," after Ronald Reagan, it’s all been discredited; it’s all called "voodoo economics," and yet, that’s what the euro is. It’s an instrument of voodoo economics.

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Posted in Random Miscellaney

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