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Dimitrios Thomakos

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1. proeconomia - October 21, 2011

EDGE: four simple principles for social and economic revival.

In the difficult times that we live in, and by browsing so much information about the causes of problems and the potential solutions, it appears that many commentators are slowly converging on a path that includes some core values. Its not that we were unaware of these values, rather its has become very important in voicing them louder and making sure that they are – somehow – implement. Here is my proposed synthesis of, what I perceive, is floating around: I named it EDGE.

(E)mployment: probably the most important of the goals/needs for everyone these days. Without a continuous focus on how to maintain and create news jobs we risk a further deterioration of economic and social conditions and a break-down of social cohesion. Efforts that address the issue of employment should be given high priority and should be made as publicly as possible to allow expectations to slowly change for the better. Economists, from any school of thought, should raise their voices and make sure that people and politicians are aware of the available solutions.

(D)ignity: for those living on the sidelines of the crisis from those living on the limelight of the crisis (and the latter are not just politicians…). Beyond the economic roots of the problems of today, we must remember that the end result will be about social issues and not just economic ones. Maintaining our dignity is important because it propels us to do more with less and to accept sacrifices when they need to be done. This is especially relevant when considering ways to counter arguments and policies that may not always be in our favor. Respecting the cornerstone of freedom, “do not do to others what you do not want done to yourself”, is vital in maintaining dignity for all.

(G)rowth: any economic solution to the current crisis is, by default I think, related to creating conditions for restoring future growth. Although is an obvious point from an economist’s perspective it is often forgotten when deliberating potential solutions. Growth can be achieved by a multitude of policies and is a sweet medicine compared to policies that increase social tension and unrest and appear to be favoring one versus another. It has been pointed out by several economists and commentators that growth cannot be restored but by a combination of fiscal and monetary stimulus. The main issue that needs to be addressed here is what sort of fiscal stimulus is possible (not if but rather when) that will avoid the problems of the past (ballooning of the debt) and will foster the workings of a well-functioning free market. With severe restrictions currently being placed on the part of fiscal spending, think about changes in the tax system as an important issue, as currently debated, on which the focus of fiscal stimulus should turn to.

(E)fficiency: on all aspects of governance. Its not just about reducing the size of the public sector and government spending but also about reducing the burden from complicated procedures and bureaucracy when dealing with the state, for personal and professional issues. Well thought, fast and just procedures are needed to restore faith of individuals and markets to the workings of the government, to boost dignity for all and to alter the sign of expectations for the future. Think about efficiency as in statistics! From among a large family of possible (unbiased and consistent) estimators we select the one with lowest variance/greatest accuracy. Well, from a large pool of good policies we should select those with the greatest accuracy, that solve the problems as fast as possible.

Well, here you have it. The EDGE. Whether it will be a sharp one or a blunt one is up to us to decide.

2. proeconomia - November 3, 2011

What of those who actually fight the battle?

In times of crisis and war a strong, united and committed leadership is required for inspiring and motivating the people not to give up the fight for survival..

However, the actual fight is not fought by the ‘generals’ and the ‘strategic planners’ at the sheltered offices but by the ‘colonels, captains and soldiers’ at the front lines. In many traditions and historical examples we find that when battles are well fought, won or lost, either by good planning or by force or by canning, the intelligent ‘generals’ will see through their ranks and promote their skillful fighters to positions of higher responsibility. This the ‘generals’ will do even if they may not like their men, they may see them as antagonistic to them, they may even fear for their fame and position. They will do nevertheless because they know that their own survival depends on the skills of their men. And when skills and competence are ignored disaster frequently follows.

The ‘generals’ then by doing so, by allowing those that actually live the heat of battle and fight well to participate in strategic decision making, they inspire more, solidify their loyalty and (above all) increase the chances of winning the war and surviving the crisis for all involved.

3. proeconomia - May 10, 2012

Let’s get real: who benefits and who pays if Greeks have their way out of the euro?

These are strange times we live in. Those that talk a lot about social justice and are proponents of fairness and equality, and of national pride, appear to make every effort on achieving this: making sure that anyone that played by the rules and worked hard, paying his dues and respecting his fellow countrymen, is forced to subsidize not just the survival but the future prosperity of anyone that used to blatantly break every rule in the book.

Any and all statements to the effect that Greece can and will make it outside the euro zone are conveniently forgetting the huge moral and social injustice that will be perpetrated in the Greek society if this event happens. It is the same attitude that allows some of these “Latter day Greeks” to have conveniently been forgetting to pay their taxes for years, to squander public subsidies and to insist that their children receive free higher education after spending a fortune on private high school tutoring.

So, please spare us the hypocrisy and get real for a change.


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