Crank Economics, Part 375

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Greece problems would be a lot less severe if it still had its own currency. The exchange rate of the drachma would adjust, exports would get cheaper and imports dearer, and Greece’s economy would stumble around a bit but then recover. Unfortunately, Greece is part of the eurozone, so they don’t have this option. They don’t control their own currency.

Now, if you were, say, a miscellaneous blogger who didn’t know much of anything about how this stuff works, you might have an idea: why doesn’t Greece leave the eurozone? Readopt the drachma, let it float, and watch as all their problems neatly sort themselves out. Then, later, when their economy has recovered, they can adopt the euro again. Problem solved.

If you wrote a post suggesting this, it would take about five minutes to get a dozen comments explaining why it’s impossible. But hey — you’re just a hypothetical blogger. Nobody expects you to know anything about this stuff. Live and learn.

But why does Martin Feldstein, one of the world’s preeminent economists, seem to think this would be a good idea? And why does the Financial Times give him space to suggest it? Paul Krugman is — uncharacteristically — too polite to actually ask this, but he’s pretty obviously shaking his head over it as well. What’s the deal, FT?

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DEMOCRACY DOES NOT EXIST...

without free and fair elections, a vigorous free press, and engaged citizens to reclaim power from those who abuse it.

In this election year unlike any other—against a backdrop of a pandemic, an economic crisis, racial reckoning, and so much daily crazy—Mother Jones' journalism is driven by one simple question: Will America will move closer to, or further from, justice and equity in the years to come?

If you're able to, please join us in this mission with a donation today. Our reporting right now is focused on voting rights and election security, corruption, disinformation, racial and gender equity, and the climate crisis. We can’t do it without the support of readers like you, and we need to give it everything we've got between now and November. Thank you.

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