Angie-nomics and its reality-free environment

This column by Daniel Gros, What Makes Greece Special? Project Syndicate 03/06/2014, wonderfully reveals the kind of thinking - or lack thereof - that goes into the austerity economics that dominates the eurozone thanks to German Chancellor Angela Merkel.

Gros is one of the Very Serious People, as his Project Syndicate biography shows:

Daniel Gros is Director of the Brussels-based Center for European Policy Studies. He has worked for the International Monetary Fund, and served as an economic adviser to the European Commission, the European Parliament, and the French prime minister and finance minister. He is the editor of Economie Internationale and International Finance.

His argument in this column is that the drastic austerity program that has been wrecking Greece's economy for the last four years or so was supposed to make them able to have more exports. But exports aren't growing.

Still: "What went wrong in Greece was not the fiscal adjustment." Of course not. Herbert Hoover/Heinrich Brüning economics cannot fail, it can only be failed!

Gros says that the austerity program that was supposed to produce more exports didn't produce more exports because they didn't concentrate enough on exports. Austerity worked - it has to, it's a law of the universe! - but it didn't increase exports enough. Because Greece didn't do enough to increase exports. Which is what the austerity program was supposed to do. But it didn't because they didn't increase exports even though they had austerity because they didn't do enough to increase exports.

No, it doesn't make jack for sense. At least in the original edition when Herbert Hoover and Heinrich Brüning were actually the ones promoting the policy, at least they had the excuse of not having a clear economic theory about how government stimulus could shorten a depression or recession.

But now the austerity policy is flying on pure faith.

Tags: angela merkel, austerity economics, eu, euro, european union, greece