Yanis Varoufakis: The Two Faces of the Crisis 3/4

In part 3 of this four-part INET "From the Director's Chair" interview, INET Executive Director Robert Johnson talks with Greek economist Yanis Varoufakis about Varoufakis's new book The Global Minotaur: America, The True Origins of the Financial Crisis and the Future of the World Economy.

The current crisis isn't just about debt, Varoufakis explains, but also the mountain of idle savings that don't have anywhere to go. To solve both problems, we must "fold those two into one and recycle them in a way that restarts the economy," he says. He looks to history for lessons on how to regenerate the world economy.

[katzokramer]

the problem is exactly that the germans already restructured their economy in creating a low wage sector, a workforce that cannot generate any demand in the near future. And that the same people expect that every european country does the same, if they do - like they are actually doing right now as being forced by germany - there will be no way of keeping this eurozone economy going.

[katzokramer]

the failure was from the beginning (starting in the US as Varoufakis describes) to retain public demand by credit financing (look at what happens in spain right now).

[vonGleichenT]

No surprise here that a Greek economics Professor would say that debt is not the problem. How ironic is that? Considering the situation the country is in right now. Stop blaming Germany for being competitive, and responsible by restructuring the economy. Which is long overdo in Greece. I always find it fascinating to listen to this guys. None of them have the same answers.