Irreverent Economics

When a country is facing crisis, governments like to blame anybody else, like foreigners. Mahathir Mohamad, former prime minister of Malaysia provides some good examples, as reported in the New York Times:

Prime Minister Mahathir Mohamad has unleashed a series of verbal attacks on everyone from Jews to currency traders to unidentified ”sinister powers.” … Malaysia’s troubles might be the result of a Jewish ”agenda” to weaken the economy of this country of about 20 million people.

Indeed, many leaders blamed foreign hedge funds, and others for the speculative attacks during the Asian crisis. The post mortem found that it was rather the locals who attacked, with the foreigners rather defending. (For more in this see here and here).

After all, who is best informed, the presidents cousin, who happens to run the country’s largest bank, or some hedge fund manager in Connecticut?

Same happened in Argentina,

and now in Greece. While the government and the EU is busy blaming foreigners for not buying its dodgy debt, and helping the government hide its obligations, here comes a local bank —  state controlled, no less —  speculating on the government defaulting. Details here and here. Some things never change.