[PEN-L:6116] Re: Fw: Hanke on the Dinar

[Jim Devine <jdevine@xxxxxxxxxxxxxxx>]

Barkley posts a piece by an "Austrian" economist who blames Milosevic for
Yugoslavian and then Serbian hyperinflation. I am no expert on the economy
of the area where Yugoslavia used to be, but I think that this personal
demonization of Milosevic is nuts. I am sure he's a crook and likely a war
criminal at the same level as Bill Clinton, but to blame him for
Yugo/Serbian hyperinflation is in the same league as blaming Jefferson
Davis for the Confederacy's hyperinflation.

An economy and a society that is falling apart, so that the government
can't collect taxes (because people cheat and evade) and can't cut spending
(because matters would get worse) and can't get loans (sell bonds) at
anything close to the normal market rate (because of the large risk of
default), has little choice but to print money to pay for its deficit. That
is, unless price controls work really well, a country suffering from a
civil war will suffer from hyperinflation (unless the government can
actually win the civil war and then establish a whole new currency).

We can criticize Milosevic for contributing to the collapse of the old
Yugoslavia and for not successfully ending the wars there and for
relatively marginal economic corruption, but it seems to be propagandistic
demonization to blame him for the hyperinflation. There were lots of other,
more poweful, forces encouraging Yugoslavia to fall apart (including the
IMF, Germany, the Pope, and the US); other forces have prevented a final
settling of the civil war, including the US/NATO.  And the kind of
corruption that Milosevic is accused of sounds exactly like the stuff that
US allies in poor countries do (e.g., Mobutu and Somoza).

I could be wrong. Barkley, set me straight.

Jim Devine jdevine@xxxxxxxxxxxxxxx &
http://clawww.lmu.edu/Faculty/JDevine/jdevine.html
Bombing DESTROYS human rights. US/NATO out of Serbia!