By Alexander Apostolides on June 09, 2011

From the New York times Op -ed: Parallels of USA and Cyprus

This is a link to an excellent article from the New York times in how Peter Diamond has been stalled form joining the board of the FEDERAL RESERVE due to political posturing by the Republicans in the house.

Of course Nobel Laureate Diamond in not on his own in this. WE have not asked Dr. Pisarides, our own Nobel laureate, from any position in the Cypriot government. The board of our own Federal Reserve equivalent, (i.e. the board of the Central Bank of Cyprus) does not include DR. Pisarides. In fact out of the five members of the board, two (Marios Kleitou, Nikos Konstatninou) are members of accountancy firms that are in no way placed or have the education to make decisions about monetary liquidity, and the other two (Dr. Orphanides and Charalambos Achinitis) are employed by the central bank. The last member, Andreas Matsis is a member of the Cyprus Chamber of Commerce and we know nothing of his resume and his education, as it is not provided on the website.

We have bestowed the accolades of pomp and pageantry to Dr. Pisarides, but we have not let him bring his understanding to the labour market into effect at a time of record unemployment in Cyprus. This is intentional, as the government knows that Dr. Pisarides calls for an urgent and radical departure from 50 years of labour policy in Cyprus: liberalization of the labour market and the removal of some union privileges, lowering of wages in the government sector to take account of job security, the removal of the unfair system of "job lists" for educators that distorts the skills market, and a change of emphasis away from unemployment benefits and towards job searching. The government prefers to honor this English trained but Cypriot born Nobel laureate , but not to have him use his knowledge effectively for the good of the island.

Thus we have also kept our own Nobel laureate away from our economy and its urgent issues. Two paragraphs from Dr. Diamonds op-ed are particularly poignant in the Cyprus case too:

"There is too little public awareness of the real consequences of some of these [budget] decisions. In reality, we need more spending on some programs and less spending on others, and we need more good regulations and fewer bad ones.

Analytical expertise is needed to accomplish this, to make government more effective and efficient. Skilled analytical thinking should not be drowned out by mistaken, ideologically driven views that more is always better or less is always better. I had hoped to bring some of my own expertise and experience to the Fed. Now I hope someone else can."


Such is the case in Cyprus too - the people we the answers are being pushed away by people who have to much vested in the economic system that is falling all around us.

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