Morten Hansen is Head of Economics Department, Stockholm School of Economics in Riga
“PS Hudson and Sommers write that “... much of the labour force elected to emigrate”. This made me consider the following pretty far-out thought experiment in what seems to be referendum-happy Latvia: What if people could be given the choice between the current economic situation and an ‘Icelandic alternative’ - devaluation of some 50%, imposition of capital controls but an unemployment rate of only 7-8% (which would be very low for Latvia - the average for the past 10 years is above 10%)? How would people vote? In no way or form can I prove this but my gut feeling says for austerity. (The closest evidence I can provide is polls from Greece that consistently speak of 75-80% in favour of keeping the euro instead of abandoning it and allow a new currency to devalue)....”
On what basis is Morten Hansen qualified to “have a gut feeling” about Latvia and indulging in “pretty far out thought experiments”, phrases which are nothing but self-serving propaganda?
Is Hansen a permanent resident of Latvia, does he visit the countryside often? Does he not know that the ‘referendum’ he proposes would be opposed by himself and allied macro-economists, that is, the high-rollers among Latvijas “uzņēmēji”? As it is, the Latvian media give no voice to micro-economics and never mention that globalization ill serves the economic recovery of Latvia.
Or is Hansen merely pushing the neo-capitalist self-enclosed circle of thinking that Sweden has committed itself to, with such harmful and detrimental consquences for Latvia: re, destruction of its private and state forests to pay off Swedish banks, to create disastrous local economic situations that highten the emigration exodus from the countryside, which creates an even greater demographic crisis for Latvia?
Is Riga, falling in population and gradually turning into a semi-highrise slum city, to become the breeding ground of the next generation of Latvians?
Of course, Hansen may have some allies in Latvia, most of the “mulcha” Saeima, which has proven itself a master of rhetorical sharades, a President, whose high retirement pension has a lot to do with the high salary paid him by Swedish banks , by the Prime Minister, whose book was ‘co-written’ with a Swedish neo-capitalist economist doing most of the writing, and now comes Hansen, “Head of Swedish Economics School in Riga” with a “gut feeling” that Sweden is doing right by robbing Latvia of its only resource (its forests) and claiming to be a better observer of the economic scene in Latvia than other economists. My gut feeling tells me that Hansen spews pure right wing propaganda and discredits the institution he heads by being being more concerned with Swedish foreign politics than economics. I bet his students have never heard that many economists do not call “economics” a science, but “political economics”. In this case, Hansen presents himself as a highly visible projection of Swedish political economics.