Jobs for Greeks

By L. Randall Wray

With Syriza in the driver’s seat, Greece now has some hope for the end to austerity imposed by Germany and the Troika.

Here’s a good short piece by C. J. Polychroniou, a research associate and policy fellow at the Levy Economics Institute. As he explains, what Syriza wants is no more—and no less—radical than what the USA did in the 1930s to deal with its Great Depression: “the bulk of Syriza’s economic program for addressing the catastrophic crisis in Greece, which has evolved into a humanitarian crisis, is inspired by President Franklin D. Roosevelt’s New Deal programs”.

The official press is reacting in horror! Oh the horror of bringing Democracy and Pinko policies into the Officially Neoliberal EMU regime!

C.J. continues: “Interestingly, the task for the implementation of the employment program has been assigned to a colleague of mine at the Levy Institute, Rania Antonopoulos, who has been appointed deputy minister of Labor and Social Solidarity under a Syriza-led government.”

Yes, Senior Scholar Rania Antonopoulos is director of the Gender Equality and the Economy program at the Levy Institute, specializing in macro-micro linkages of gender and economics, international competition, and globalization; job guarantee policies and their macroeconomic and employment impacts; social protection and poverty reduction; and the implications of paid and unpaid work on poverty indicators. She was one of the founders of “Economists for Full Employment” and has been a long-time supporter of the job guarantee.

And so, two Levy scholars have moved into government this month—Rania in Greece and Stephanie Kelton in Washington. What will the world come to?

11 responses to “Jobs for Greeks

  1. Erick Borling

    AND I heard on the radio that Ioannis Varoufakis is Tsirpas’s economic advisor! Exciting news lately.

  2. JG in the US seems quite likely to succeed, if we would try it, as we have a surfeit of food and productive capacity. Is Greece in that same boat? If they had to resort to imports in order to alleviate poverty, can they really do JG the way a monetary sovereign could do it?

    • I do not know enough to know if this is a good question, but it is one which an answer might be informative to many folks.

  3. At the end of 2013, Rob Parenteau posted this article, describing a way to boost fiscal spending without exiting the Euro:

    Is this not the perfect opportunity to implement such a plan? I posted it on Yanis’ blog quite some time back, and he said (if I recall correctly) the idea “is no panacea but it would help provide struggling Eurozone governments with some liquidity”:

    Can they do this now? If not, what would be the issue stopping it or making it a bad idea? (I have never heard a single good argument against undertaking Rob’s idea.)

    Also – some time after I linked Yanis’ to the above, he made this article – which I thought had many similarities with Rob’s idea:

  4. Jordan from Croatia

    This is an excellent chance for MMT to come up with solutions to finance governments that are under euro bind and no chance to sell bonds. Let’s find out ways for Greece government to find financial means to implement programs that will get them out of bind.

    Lets not forget that Greece is asking for debt forgivness. If they are asking for that then they should be doing it first.
    1) There is a way that Syriza can offer their people a debt forgivness and save banks at the same time.
    I am from EU and we do not have an option of personal bankrupcy as American citizens enjoy. Bankrupcy laws Chapter, 7, 11, 13.
    Bankrupcy laws in USA offer forgivness of debt without paying it by erasing asset and liability side of bank ledger. SInce banks erase personal debts as it is payed off, bankrupcy judge allows banks to do it without receiving payments an leaving property in owners hands.
    Since a default on the loan leaves bank with liability side that tries to clear it by selling mortgaged asset, bankrupcy offers banks to clear liability side without need to sell mortgaged asset, that in Greek economy is also impossible. Real estate market is almost dead.

    Creating such institution that clears banks liability side and leaves owners with property would do marvelous thing for Greeks. Only cost to government is paying judges and lawers to work on it. There is a problem of expediency and numbers. There is over milion greeks that defaulted on mortgages.

    Another problem is that many in EU used Saving & Loans Banks for housing loans, and such banks do use deposits for loans. WHat to do with them?

    2) Creating developement banks and using government bonds as capital base, without any money needed. And then they can proceed as any other private bank to offer loans at close to 0 rate. Then use ELA for cash if needed. These banks can be used to refinance old high rate loans with low rate loans.

    3) Slovenia was proposing that instead of cutting the public employee’s wages, it would pay them partially in small ammount government bonds that can be used only in lieu of credit payments to banks. Banks would erase those bonds and liability side of the ledger, just as with real money. This is an option for small scale printing that could do miracles. Maybe even temporary measure. Those small bonds should not be called drachma of course, it would give away the game.

    4) there are multiple options of local paralel currencies, not to call it drachma of course.

    Some other ideas?

    • It’s all very straightforward once you realise that ‘bonds’ are just a form of money and government buys things with bonds.

      So all it needs to do is accept bonds as tax payments and pay people in bonds. You can even denominate them in Euros if you want – it doesn’t matter.

      Bonds would generally trade at a small discount to Euros and so people paying taxes would buy them with Euros to get a discount on their tax bill.

      Greece could do that now. If it stated that it would accept the bond at face value in payment of taxes then the bonds would rally massively and the interest rate would collapse.

      So you don’t need to forgive the debt, you just need to get the government to use them for transactions.

      They then become exactly like a local currency.

      • Yes, this is basically what Rob Parenteau was proposing in my comment above this one – is there any good reason not to do this? What are the limits of doing this? (i.e. how far can it be pushed)

        • Jordan from Croatia

          Yes, there is.
          Doing it in a scale that Rob proposes is giving away the game, it would practicaly be a call for Grexit.
          It has to be done in small scale and diversified purposes in order to hide that Greece started using something else besides euro. So, printing new money for targeted purposes, not ever to be accepted in lieu of taxes is very important.
          These tricks would reduce taxe income, and allowing it to accept it for tax payment would drasticlly reduce it.
          Private debts are the biggest problem in markets, lets find ways to reduce them without using euros. That is why i say, bonds that would be accepted only by banks to extinguish debts.

          Then there is the problem of imports which would rise as soon as demand recovers, and private imports are going on public debts which then has to ask for more loans.
          AD has to recover slowly, to give time for government to instigate production, and market will give its share too in order to start production of imported goods domestically.

          There is no purely monetary problem, there is the economy that is extremely slow and killed entrepenurial spirit. Government has to start organizing the production of previously imported goods.

  5. It’s exciting to see people like Varoufakis and Antonopoulos working inside the Greek government, and to know that their efforts to deal with Greece’s problems are backed up by heterodox economists like Randy and institutions like the Levy Institute.

    Here are two two links I thought might add to the discussion. The first is Bill Mitchell’s somewhat skeptical and MMT-informed post on the eve of Greece’s recent vote. The second is a recent talk by Rania Antonopoulos on ways to deal with Greece’s unemployment (and related) problems (apologies if I screw up the YouTube link):


  6. Benson Njonjo Ndehi

    Greece needs to quit the euro, print drachma, and use it to fund farming, public infrastructure, and public housing. This will create a boom in local jobs and output while making imports expensive.