Finance and Engineering

Reuters looked at the Netherlands economy a country unlike Germany actually engaged in austerity.  Guess what? Contractionary policy is contractionary. What is more, the Dutch debt to GDP is not improving. Can we now just stop making this a meta story about what seems to be a technicality? This just should not be a story about multipliers, as people like Daniel Gros seem to be suggesting. This is a tale of bad economic policy based on bad economic analysis. Do not hide behind something that the average reader has not heard about.

Nobody would accept that an engineer did something like that. "Hey guys I am sorry that the crane could not handle the load; and injured the workers. I chose a multiplier (for safety) that was a tad low." In fact, when looking at the the "rescues" from an engineering perspective, we see that not only was a safety chosen which was below one. The whole system was not designed safe fail or fail safe. The only reason why the whole construction has not fallen to pieces yet is that the ECB stepped in, and wrapped the whole thing in duct tape.  And now we are again supposed to trust the economists, who

• Underestimated the rescue funds needed
• Claimed that austerity would be expansionary
• Thought the euro area was a good idea in the first place
• Did not see the financial crisis
• Did not think that the housing boom in Spain and Ireland was in fact a bubble
• Came up with a stress test that failed to put any stress on bank balance sheets
• Did that again 
• Are trying to tear of the ECB duct tape

to come up with a workable solution. Would anybody want that the engineer who designed a bridge that collapsed to design another one? No. It can only end in another disaster, especially, when we also see a reluctance to admitting mistakes. Instead, the blame is assigned to the drivers Greece.

Here's a structural reform that might actually put Europe on a path of sustainable growth in the future. Every single economist, who got at least two of the above points wrong, needs to be fired. That safes money and reduces the risk that we will see an unnecessarily prolonged downturn in the future. Of course, that is not possible, because these "scientists" for the most part call for the most predatory and completely failed form of capitalism from the safe socialist utopia, that European universities are for professors.

Can we, after five years of complete failure, at least stop listening to the people who have gotten everything wrong. Please.