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>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. Austerit
by 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 agoThat 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.