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I saw this comparison earlier and was struck by the depth of the Greek recession: http://i.imgur.com/mHgxQeQ.png http://i.imgur.com/mHgxQeQ.png They're in wor

I saw this comparison earlier and was struck by the depth of the Greek recession: http://i.imgur.com/mHgxQeQ.png http://i.imgur.com/mHgxQeQ.png They're in worse shape than the US was at the same time into the Great Depression. Six years after the GFC, and Greece's GDP is still 25% lower than it was pre-crisis. This is really unprecedented stuff. Hard to blame them for taking extreme positions to end the suffering.

nickonline 11y ago
But looking at your graph Greece jumps back up ~2 years into their current depression before diving parrallel to the USA 80 years prior. So I'd say looking at that graph they're in exactly the same place the USA was ~4 years after the 'start', depending on where you measure it from.
- mikeyouse 11y ago
  A common way to measure the length of a recession is to start counting as soon as the GDP drops for two quarters in a row, and stop counting when the GDP recovers past that 'zero point'. A slight slowing in the rate of decline after years of recession isn't quite a recovery so you wouldn't start the clock from there. You can see a similar local max. in the Great Depression line when the government stopped the stimulus programs and passed a law to balance the budget.
  - corin_ 11y ago
    It's still a recession until it hits 'zero' again, even if there is solid growth? E.g. if a country started with a GDP of 100, dropped to 10 in a single year, and then over the next 90 years grew its GDP by 1 each year, it would be 90 years of economic growth but still a recession?
    - mikeyouse 11y ago
      Technically the recession is only when GDP drops for at least two consecutive quarters, what follows is the recovery phase. It's just common phrasing to call the whole period the recession or depression. In your example, there'd be a 1-year recession with a 90-year recovery.
- digi_owl 11y ago
  Could be what was brought up on BBC during a interview with Steve Keen, where Keen talks about Greek prices falling faster than GDP for a period of time. http://www.debtdeflation.com/blogs/2015/07/06/discussing-syrizas-stunning-victory-on-the-bbc/ http://www.debtdeflation.com/blogs/2015/07/06/discussing-syr... Somewhere round the 1:00 mark.
cperciva 11y ago
Is the starting point of that graph accurate, or was it a "liar loan" GDP?
- claudius 11y ago
  The Greek economy was and is primarily based on an oversized public sector, which was only made possible by a) devaluing the Drachma at every point possible and b), after joining the Euro, falsifying statistics to facilitate being lent more. As such, it seems more reasonable to compare the current GDP with a reference in, say, 1990. Back then, Greece’s GDP was at 98,251,934,651, whereas for 2014 you have 299,615,364,238 (USD), or roughly a 305%-growth. In comparison, France stood at 1,275,300,566,196 and is now at 2,829,192,039,171, i.e. 221%. In other words, Greece borrowed too much and now people are upset that they can’t continue their just-achieved standard of living because people don’t give them any more money. But even now, their cumulative GDP growth over 24 years is still larger than that of France, one of the primary lenders in the ongoing debacle (comparison to Germany is difficult, due to reunification complicating everything). (Source for all numbers: http://data.worldbank.org/indicator/NY.GDP.MKTP.CD http://data.worldbank.org/indicator/NY.GDP.MKTP.CD )
- x0x0 11y ago
  Troika forecasts and numbers show a very similar graph, so probably pretty real. See, eg, the first chart here http://www.bruegel.org/nc/blog/detail/article/1647-is-greece-destined-to-grow/ http://www.bruegel.org/nc/blog/detail/article/1647-is-greece...
Joeri 11y ago
I find it striking that there was a recovery in 2010, after which the austerity measures were implemented, which were then followed by a downward slide. I have never understood why any sane economist is in favor of austerity measures while it has been shown that every time they plunge the economy into recession making it harder to pay back debts.
- crdoconnor 11y ago
  >I have never understood why any sane economist is in favor of austerity measures That can be attributed to the influence of wealthy business lobbies. Austerity puts downward pressure on wages, which in turn creates upward pressure on profits. Economists, like everybody else, respond to incentives.
  - chetanahuja 11y ago
    That makes no sense. All businesses suffer along with the rest of the economy when flow of money dries up. It's not just lower wages, it's lower sales, profits and for those business kept afloat by financial leverage, such crisis often mean complete death.
    - crdoconnor 11y ago
      >All businesses suffer along with the rest of the economy A) The relative position of the owners still improves. http://isites.harvard.edu/fs/docs/icb.topic620591.files/Indices_of_Wellbeing/HSPH.pdf http://isites.harvard.edu/fs/docs/icb.topic620591.files/Indi... B) Businesses in the rest of the Eurozone can reap the benefits of suppressed Greek wages (in the form of a more cut-throat labor market), without facing the consequences of lower demand themselves.
- noreasonw 11y ago
  Perhaps they should get less tanks and use the better their money? Greek has more tanks than Germany and France together. A huge army for a little country.
sampo 11y ago
> This is really unprecedented stuff. Several Eastern European countries took a similar dive after they got rid of their socialist governments in the 90s. Then their economy started to grow a bit later.
- oblio 11y ago
  Courtesy reddit: http://i.imgur.com/McyZYL8.jpg http://i.imgur.com/McyZYL8.jpg
  - peterfirefly 11y ago
    Most of those countries reformed like there was no tomorrow. Greece reformed like there would always be a mañana.
    - riffraff 11y ago
      AFAIR, most of those countries defaulted on their socialist era debt too. (Except hungary, which was already known as the "happiest barrack in the communist camp")
  - sampo 11y ago
    Ok, I take my words back. Only Bulgaria is comparable to Greece.
    - mikeyouse 11y ago
      This is a good example, Bulgaria grew like crazy -- after 35% of their debt was completely forgiven and the remainder was heavily subsidized via very low interest rates. http://i.imgur.com/7zPvyKo.png http://i.imgur.com/7zPvyKo.png For Greece, an equivalent amount of debt relief (a reduction of 46% on an NPV basis) would equate to something like $150 billion in forgiven loans. I think they'd be much more competitive, don't you?
      - sampo 11y ago
jarcane 11y ago
And the funny thing is? It wasn't austerity that got the US out of that depression. It was FDR's New Deal, probably still the most left-wing plan ever enacted by a US government. Rather than 'tightening belts,' FDR responded with Social Security, the TVA, banking reform, relief funds, the housing administration, new tax policies, the list goes on. Amusingly, even then, those on the right charged him with attacking business and even communism, but unlike the left-wing policies of the last couple of decades, he actually stuck to his guns and rode the goodwill of the people into the first and only third term in the history of the presidency. About the only case I know of for austerity ever actually leading to anything half-good is Finland, the only country in WWII ever to pay off the full extent of its war debt. But while the eventual result was to turn the country into a proper industrial power, the intervening decades are still remembered as one of significant poverty, of literally making bread flour from tree bark because wheat was too expensive. One even wonders if this was the start of Finland's lingering reputation for depression and alcoholism, from which it is only now starting to recover. The ugly truth about austerity politics is that it is very much about making a handful of very rich people even richer, and little else. Look at Britain, where the party of some of the richest people in the country are blabbering about tightening belts. You think David Cameron's cutting back at home? Or hell, look at Germany. The biggest bully for austerity politics in the whole EU is also literally it's richest country. And you can damn sure bet they aren't playing the same game at home. And oh look, just as last time Europe tried to squeeze a country into bankruptcy for its debts, there's suddenly all these new fascist parties gaining popular support, and an iron-fisted tyrant consolidating power in Russia. It's almost like we've all forgotten the 30s ever happened already ...
- peterfirefly 11y ago
  > And you can damn sure bet they aren't playing the same game at home. Harz IV. Kurzarbeit. Eurojobs. Stable currency for decades/no devaluations. Lo and behold, it actually worked for them (although it was quite unpleasant for many Germans).
  - kmonsen 11y ago
    Weak currency even with strong export due to sharing it with Portugal, Greece, Spain etc. This is what worked for Germany. If the Euro breaks up Germany is the one in trouble.

nickonline 11y ago

But looking at your graph Greece jumps back up ~2 years into their current depression before diving parrallel to the USA 80 years prior. So I'd say looking at that graph they're in exactly the same place the USA was ~4 years after the 'start', depending on where you measure it from.

mikeyouse 11y ago
A common way to measure the length of a recession is to start counting as soon as the GDP drops for two quarters in a row, and stop counting when the GDP recovers past that 'zero point'. A slight slowing in the rate of decline after years of recession isn't quite a recovery so you wouldn't start the clock from there. You can see a similar local max. in the Great Depression line when the government stopped the stimulus programs and passed a law to balance the budget.
- corin_ 11y ago
  It's still a recession until it hits 'zero' again, even if there is solid growth? E.g. if a country started with a GDP of 100, dropped to 10 in a single year, and then over the next 90 years grew its GDP by 1 each year, it would be 90 years of economic growth but still a recession?
  - mikeyouse 11y ago
    Technically the recession is only when GDP drops for at least two consecutive quarters, what follows is the recovery phase. It's just common phrasing to call the whole period the recession or depression. In your example, there'd be a 1-year recession with a 90-year recovery.
digi_owl 11y ago
Could be what was brought up on BBC during a interview with Steve Keen, where Keen talks about Greek prices falling faster than GDP for a period of time. http://www.debtdeflation.com/blogs/2015/07/06/discussing-syrizas-stunning-victory-on-the-bbc/ http://www.debtdeflation.com/blogs/2015/07/06/discussing-syr... Somewhere round the 1:00 mark.

cperciva 11y ago

Is the starting point of that graph accurate, or was it a "liar loan" GDP?

claudius 11y ago
The Greek economy was and is primarily based on an oversized public sector, which was only made possible by a) devaluing the Drachma at every point possible and b), after joining the Euro, falsifying statistics to facilitate being lent more. As such, it seems more reasonable to compare the current GDP with a reference in, say, 1990. Back then, Greece’s GDP was at 98,251,934,651, whereas for 2014 you have 299,615,364,238 (USD), or roughly a 305%-growth. In comparison, France stood at 1,275,300,566,196 and is now at 2,829,192,039,171, i.e. 221%. In other words, Greece borrowed too much and now people are upset that they can’t continue their just-achieved standard of living because people don’t give them any more money. But even now, their cumulative GDP growth over 24 years is still larger than that of France, one of the primary lenders in the ongoing debacle (comparison to Germany is difficult, due to reunification complicating everything). (Source for all numbers: http://data.worldbank.org/indicator/NY.GDP.MKTP.CD http://data.worldbank.org/indicator/NY.GDP.MKTP.CD )
x0x0 11y ago
Troika forecasts and numbers show a very similar graph, so probably pretty real. See, eg, the first chart here http://www.bruegel.org/nc/blog/detail/article/1647-is-greece-destined-to-grow/ http://www.bruegel.org/nc/blog/detail/article/1647-is-greece...

Joeri 11y ago

I find it striking that there was a recovery in 2010, after which the austerity measures were implemented, which were then followed by a downward slide. I have never understood why any sane economist is in favor of austerity measures while it has been shown that every time they plunge the economy into recession making it harder to pay back debts.

crdoconnor 11y ago
>I have never understood why any sane economist is in favor of austerity measures That can be attributed to the influence of wealthy business lobbies. Austerity puts downward pressure on wages, which in turn creates upward pressure on profits. Economists, like everybody else, respond to incentives.
- chetanahuja 11y ago
  That makes no sense. All businesses suffer along with the rest of the economy when flow of money dries up. It's not just lower wages, it's lower sales, profits and for those business kept afloat by financial leverage, such crisis often mean complete death.
  - crdoconnor 11y ago
    >All businesses suffer along with the rest of the economy A) The relative position of the owners still improves. http://isites.harvard.edu/fs/docs/icb.topic620591.files/Indices_of_Wellbeing/HSPH.pdf http://isites.harvard.edu/fs/docs/icb.topic620591.files/Indi... B) Businesses in the rest of the Eurozone can reap the benefits of suppressed Greek wages (in the form of a more cut-throat labor market), without facing the consequences of lower demand themselves.
noreasonw 11y ago
Perhaps they should get less tanks and use the better their money? Greek has more tanks than Germany and France together. A huge army for a little country.

sampo 11y ago

> This is really unprecedented stuff. Several Eastern European countries took a similar dive after they got rid of their socialist governments in the 90s. Then their economy started to grow a bit later.

oblio 11y ago
Courtesy reddit: http://i.imgur.com/McyZYL8.jpg http://i.imgur.com/McyZYL8.jpg
- peterfirefly 11y ago
  Most of those countries reformed like there was no tomorrow. Greece reformed like there would always be a mañana.
  - riffraff 11y ago
    AFAIR, most of those countries defaulted on their socialist era debt too. (Except hungary, which was already known as the "happiest barrack in the communist camp")
- sampo 11y ago
  Ok, I take my words back. Only Bulgaria is comparable to Greece.
  - mikeyouse 11y ago
    This is a good example, Bulgaria grew like crazy -- after 35% of their debt was completely forgiven and the remainder was heavily subsidized via very low interest rates. http://i.imgur.com/7zPvyKo.png http://i.imgur.com/7zPvyKo.png For Greece, an equivalent amount of debt relief (a reduction of 46% on an NPV basis) would equate to something like $150 billion in forgiven loans. I think they'd be much more competitive, don't you?
    - sampo 11y ago

jarcane 11y ago

And the funny thing is? It wasn't austerity that got the US out of that depression. It was FDR's New Deal, probably still the most left-wing plan ever enacted by a US government. Rather than 'tightening belts,' FDR responded with Social Security, the TVA, banking reform, relief funds, the housing administration, new tax policies, the list goes on. Amusingly, even then, those on the right charged him with attacking business and even communism, but unlike the left-wing policies of the last couple of decades, he actually stuck to his guns and rode the goodwill of the people into the first and only third term in the history of the presidency. About the only case I know of for austerity ever actually leading to anything half-good is Finland, the only country in WWII ever to pay off the full extent of its war debt. But while the eventual result was to turn the country into a proper industrial power, the intervening decades are still remembered as one of significant poverty, of literally making bread flour from tree bark because wheat was too expensive. One even wonders if this was the start of Finland's lingering reputation for depression and alcoholism, from which it is only now starting to recover. The ugly truth about austerity politics is that it is very much about making a handful of very rich people even richer, and little else. Look at Britain, where the party of some of the richest people in the country are blabbering about tightening belts. You think David Cameron's cutting back at home? Or hell, look at Germany. The biggest bully for austerity politics in the whole EU is also literally it's richest country. And you can damn sure bet they aren't playing the same game at home. And oh look, just as last time Europe tried to squeeze a country into bankruptcy for its debts, there's suddenly all these new fascist parties gaining popular support, and an iron-fisted tyrant consolidating power in Russia. It's almost like we've all forgotten the 30s ever happened already ...

peterfirefly 11y ago
> And you can damn sure bet they aren't playing the same game at home. Harz IV. Kurzarbeit. Eurojobs. Stable currency for decades/no devaluations. Lo and behold, it actually worked for them (although it was quite unpleasant for many Germans).
- kmonsen 11y ago
  Weak currency even with strong export due to sharing it with Portugal, Greece, Spain etc. This is what worked for Germany. If the Euro breaks up Germany is the one in trouble.