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On June 21 2014 15:07 AutoEngineer wrote:
I really think the German economy is impressive.
The world's biggest exporter and still one of the fastest growing in the EU. First quarter growth exceeded that of France and Italy combined.
Now that says something.
Is the Eurozone really out of recession? I still think most countries are growing very slowly or stagnating.
Well, it isn't that hot for EU at all:
Guardian
Germany had a contraction of the economy in second quarterly. While experts seems to agree it was an anomaly in the trends, it should be concerning that the industry sector in Germany is suffering. Apart from that Sweden is doing miserable in 2014, UK is scraping by and Libya is sliding economically as well as the middle east crumbling and the Ukraine-Russia situation... No, europe is not looking to recover economically anytime soon.
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Germany is not impressive, it is riding on the euro. Its growth is low - even if it is the highest in europe - and it will have tons of problems in the years to come. By the way shit is going on in France, the minister of economy and the minister of education were laid off after criticizing France economic policy and the european strategy.
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Were they criticizing that it was too socialist or not socialist enough? The headline I read said "France dissolves government" but the article seemed to imply for inner-party drama than an election being called.
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On August 26 2014 23:06 Wolfstan wrote:
Were they criticizing that it was too socialist or not socialist enough? The headline I read said "France dissolves government" but the article seemed to imply for inner-party drama than an election being called.
What is that socialism-thing you are talking about here? Hollande fired the minister for critizising Germany and the austerity-focus. The resigned minister also launched at the tax increases. So Montebourg is against austerity and tax increases. Is that socialist in your mind?
Guardian
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The buzzword that's going to be on the official denial list is "deflation" for the next while. Which is really a way of saying "well, we're in this mess because of too much debt, so we're going to attempt to take on more debt to get ourselves further out of it!". It's not going to work well.
(Debt levels are back near 2007-2008 levels in a lot of Europe, depending on the part of the economies you look at and at the National level. This isn't a liquidity trap anymore. Bad Debts have to be retired and written off. But that takes time & pain, which no politician can afford.)
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On August 26 2014 23:30 radiatoren wrote:Show nested quote +On August 26 2014 23:06 Wolfstan wrote:
Were they criticizing that it was too socialist or not socialist enough? The headline I read said "France dissolves government" but the article seemed to imply for inner-party drama than an election being called. What is that socialism-thing you are talking about here? Hollande fired the minister for critizising Germany and the austerity-focus. The resigned minister also launched at the tax increases. So Montebourg is against austerity and tax increases. Is that socialist in your mind? Guardian
Thank you for the better source, the one I read was like 2 paragraphs, without specifying with camp advocated which policies or even what a reforming of government actually entailed.
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The US has done a decent job so far of recapitalizing our banks, even as Democrats and Republicans continue to snipe at each other and basically do nothing. Stupid shit going on in American politics is all I hear about and see discussed, even among the European members of TL.
I hear about Ukraine-Russia, the Middle East, Asia, etc. but news about Europe doesn't seem to be reaching us here in the US. I just hear generic stuff about no growth.
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On August 27 2014 00:05 andrewlt wrote:
The US has done a decent job so far of recapitalizing our banks, even as Democrats and Republicans continue to snipe at each other and basically do nothing. Stupid shit going on in American politics is all I hear about and see discussed, even among the European members of TL.
I hear about Ukraine-Russia, the Middle East, Asia, etc. but news about Europe doesn't seem to be reaching us here in the US. I just hear generic stuff about no growth.
There is a period from july to september where very little happens politically in Europe.
The more local news are focused on the effects of the russia-sanctions, the situation in Israel and Syria/Iraq (particularly "war tourists" from Europe) as well as a clash between autonomes (extreme left) and Svenskarnas Parti (far right) in Sweden and an upcoming volcano eruption in Iceland. The political season starts in september, where the drapery will fall for another season of the freakshow.
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On August 27 2014 00:05 andrewlt wrote:
The US has done a decent job so far of recapitalizing our banks, even as Democrats and Republicans continue to snipe at each other and basically do nothing. Stupid shit going on in American politics is all I hear about and see discussed, even among the European members of TL.
I hear about Ukraine-Russia, the Middle East, Asia, etc. but news about Europe doesn't seem to be reaching us here in the US. I just hear generic stuff about no growth.
There is growth, just not as fast as some people wants it to be. The actual debate, or the so called "problem" among economists and decision makers in EU is the whole "safe and slow economic growth".
People who are for "safe and slow economic growth" are happy about the growth rate since its slow but also safe since another disaster would spell doom, according to them anyway.
People who are on the opposite side wants to see a much faster growth, and in order to do that you need to loosen up the regulations.
So basically from both sides view Europe is growing, and everyone are expecting things to become better. Thing is that the people who wants to make Europe grow faster, in order to make their argument stronger for loosening regulations, uses overly dramatic arguments like IF we don't do X or do away with Y the growth will stagnate!" While the other side that is for safer but slower growth basically claims that if we DON'T put more regulations THEN someone will screw up again and the economy will stagnate.
No one in Europe actually plans for, or really see any real sign of any long term kind of stagnation, its the speed of growth that is being debated on right now.
EDIT: And its very easy to see in this very thread what side people are on.
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On August 27 2014 03:06 Integra wrote:Show nested quote +On August 27 2014 00:05 andrewlt wrote:
The US has done a decent job so far of recapitalizing our banks, even as Democrats and Republicans continue to snipe at each other and basically do nothing. Stupid shit going on in American politics is all I hear about and see discussed, even among the European members of TL.
I hear about Ukraine-Russia, the Middle East, Asia, etc. but news about Europe doesn't seem to be reaching us here in the US. I just hear generic stuff about no growth. There is growth, just not as fast as some people wants it to be. The actual debate, or the so called "problem" among economists and decision makers in EU is the whole "safe and slow economic growth". People who are for "safe and slow economic growth" are happy about the growth rate since its slow but also safe since another disaster would spell doom, according to them anyway. People who are on the opposite side wants to see a much faster growth, and in order to do that you need to loosen up the regulations. So basically from both sides view Europe is growing, and everyone are expecting things to become better. Thing is that the people who wants to make Europe grow faster, in order to make their argument stronger for loosening regulations, uses overly dramatic arguments like IF we don't do X or do away with Y the growth will stagnate!" While the other side that is for safer but slower growth basically claims that if we DON'T put more regulations THEN someone will screw up again and the economy will stagnate. No one in Europe actually plans for, or really see any real sign of any long term kind of stagnation, its the speed of growth that is being debated on right now.
The long term stagnation is a problem because of how much was lost in the last crisis. Unemployment is still crazy high, and GDP is still below pre-crisis peak. That's not good at all. Market corrections don't take this long if you're not actively getting in the way. Europe as a whole is doing worse now than they did during the Great Depression, which is why slow growth is basically unacceptable.
As for the proposed solutions, it's very much not a "regulation vs deregulation" debate. It's an "austerity vs stimulus" debate. Austerity has been the dominant policy since the crisis began, and it hasn't solved any problem it set out to solve. Government debt is still climbing everywhere except Germany and economic growth hasn't returned. The only positive is that borrowing rates are no longer ruining the EU nations since the ECB stepped in as the lender of last resort, but that has nothing to do with austerity (other than causing the continued crisis).
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On August 27 2014 03:06 Integra wrote:Show nested quote +On August 27 2014 00:05 andrewlt wrote:
The US has done a decent job so far of recapitalizing our banks, even as Democrats and Republicans continue to snipe at each other and basically do nothing. Stupid shit going on in American politics is all I hear about and see discussed, even among the European members of TL.
I hear about Ukraine-Russia, the Middle East, Asia, etc. but news about Europe doesn't seem to be reaching us here in the US. I just hear generic stuff about no growth. There is growth, just not as fast as some people wants it to be. The actual debate, or the so called "problem" among economists and decision makers in EU is the whole "safe and slow economic growth". People who are for "safe and slow economic growth" are happy about the growth rate since its slow but also safe since another disaster would spell doom, according to them anyway. People who are on the opposite side wants to see a much faster growth, and in order to do that you need to loosen up the regulations. So basically from both sides view Europe is growing, and everyone are expecting things to become better. Thing is that the people who wants to make Europe grow faster, in order to make their argument stronger for loosening regulations, uses overly dramatic arguments like IF we don't do X or do away with Y the growth will stagnate!" While the other side that is for safer but slower growth basically claims that if we DON'T put more regulations THEN someone will screw up again and the economy will stagnate. No one in Europe actually plans for, or really see any real sign of any long term kind of stagnation, its the speed of growth that is being debated on right now.
The growth in Europe is more or less stagnating (Tradingeconomics). Furthermore, the situation is a little more complex than a risk/reward situation including the dilemmas aksfjh explained. In Sweden you basically avoided the brunt of the crisis, while particularly PIIGS have taken a hard fall. Arguably the current situation in Sweden is a result of certain changes to the swedish welfare program starting to pressure the economy, but Sweden and Denmark are doing well compared to most of the rest of Europe and austerity hits much harder where the constant need for cutting budgets from EU gets added on top of the situational budgetary concerns.
ECB has lend a lot of money to certain countries and it has helped in the last couple of years. Now the situation is starting to deteriorate again and even Germany who did the lending is starting to look a little worn. The situation is more about how to get growth higher than the consumer cost inflation again, which is the important measure for everyday consumers. Furthermore economists argue that a certain level of growth is needed for jobcreation and that level of growth is not met at the moment. That situation has not been solved by austerity.
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On August 27 2014 03:06 Integra wrote:Show nested quote +On August 27 2014 00:05 andrewlt wrote:
The US has done a decent job so far of recapitalizing our banks, even as Democrats and Republicans continue to snipe at each other and basically do nothing. Stupid shit going on in American politics is all I hear about and see discussed, even among the European members of TL.
I hear about Ukraine-Russia, the Middle East, Asia, etc. but news about Europe doesn't seem to be reaching us here in the US. I just hear generic stuff about no growth. There is growth, just not as fast as some people wants it to be. The actual debate, or the so called "problem" among economists and decision makers in EU is the whole "safe and slow economic growth". People who are for "safe and slow economic growth" are happy about the growth rate since its slow but also safe since another disaster would spell doom, according to them anyway. People who are on the opposite side wants to see a much faster growth, and in order to do that you need to loosen up the regulations. So basically from both sides view Europe is growing, and everyone are expecting things to become better. Thing is that the people who wants to make Europe grow faster, in order to make their argument stronger for loosening regulations, uses overly dramatic arguments like IF we don't do X or do away with Y the growth will stagnate!" While the other side that is for safer but slower growth basically claims that if we DON'T put more regulations THEN someone will screw up again and the economy will stagnate. No one in Europe actually plans for, or really see any real sign of any long term kind of stagnation, its the speed of growth that is being debated on right now.
What are you saying ? What are you talking about ? European GDP just now finally caught up to its pre crisis (2008) level ! There is NO growth ! Italian GDP is still below 2008 level. Every serious economists talk about a possible long term stagnation in europe : why do you think a lot of people are talking about secular stagnation or about the lost decade in Japan.
Radiatoren the ECB is responsible for the crisis for a big part, with its reluctance to lower interest rate, reluctance to help countries, and desire to prevent inflation at all cost. It's one of the most amateurish central bank of the world, and a joke for most intelligent economists. If any sane people had power, they would have to ask the ECB and some european officials to respond before a judiciary court for their behavior during the crisis. They need to take responsability for what has happened in Greece, Spain and Portugal.
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On August 27 2014 04:53 radiatoren wrote:Show nested quote +On August 27 2014 03:06 Integra wrote:On August 27 2014 00:05 andrewlt wrote:
The US has done a decent job so far of recapitalizing our banks, even as Democrats and Republicans continue to snipe at each other and basically do nothing. Stupid shit going on in American politics is all I hear about and see discussed, even among the European members of TL.
I hear about Ukraine-Russia, the Middle East, Asia, etc. but news about Europe doesn't seem to be reaching us here in the US. I just hear generic stuff about no growth. There is growth, just not as fast as some people wants it to be. The actual debate, or the so called "problem" among economists and decision makers in EU is the whole "safe and slow economic growth". People who are for "safe and slow economic growth" are happy about the growth rate since its slow but also safe since another disaster would spell doom, according to them anyway. People who are on the opposite side wants to see a much faster growth, and in order to do that you need to loosen up the regulations. So basically from both sides view Europe is growing, and everyone are expecting things to become better. Thing is that the people who wants to make Europe grow faster, in order to make their argument stronger for loosening regulations, uses overly dramatic arguments like IF we don't do X or do away with Y the growth will stagnate!" While the other side that is for safer but slower growth basically claims that if we DON'T put more regulations THEN someone will screw up again and the economy will stagnate. No one in Europe actually plans for, or really see any real sign of any long term kind of stagnation, its the speed of growth that is being debated on right now. The growth in Europe is more or less stagnating ( Tradingeconomics). Furthermore, the situation is a little more complex than a risk/reward situation as aksfjh explained. In Sweden you basically avoided the brunt of the crisis, while particularly PIIGS have taken a hard fall. Arguably the current situation in Sweden is a result of certain changes to the swedish welfare program starting to pressure the economy, but Sweden and Denmark are doing well compared to most of the rest of Europe and austerity hits much harder where the constant need for cutting budgets from EU gets added on top of the situational budgetary concerns. ECB has lend a lot of money to certain countries and it has helped in the last couple of years. Now the situation is starting to deteriorate again and even Germany who did the lending is starting to look a little worn. The situation is more about how to get growth higher than the consumer cost inflation again, which is the important measure for everyday consumers. Furthermore economists argue that a certain level of growth is needed for jobcreation and that level of growth is not met at the moment. That situation has not been solved by austerity.
When did I explain a "risk/reward" situation? I talk about government consumption needing to be higher to stave off the gigantic shortfall of demand in the EU. Specifically, all I talked about was the fact that austerity has been the policy of choice for half a decade now and it's not working.
As for WhiteDog, he's pretty spot on. There's a very real possibility that this could become Europe's Lost Decade, and secular stagnation is looking to be a looming threat that is being approached in the most ass-backwards way possible.
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On August 27 2014 04:56 WhiteDog wrote:Show nested quote +On August 27 2014 03:06 Integra wrote:On August 27 2014 00:05 andrewlt wrote:
The US has done a decent job so far of recapitalizing our banks, even as Democrats and Republicans continue to snipe at each other and basically do nothing. Stupid shit going on in American politics is all I hear about and see discussed, even among the European members of TL.
I hear about Ukraine-Russia, the Middle East, Asia, etc. but news about Europe doesn't seem to be reaching us here in the US. I just hear generic stuff about no growth. There is growth, just not as fast as some people wants it to be. The actual debate, or the so called "problem" among economists and decision makers in EU is the whole "safe and slow economic growth". People who are for "safe and slow economic growth" are happy about the growth rate since its slow but also safe since another disaster would spell doom, according to them anyway. People who are on the opposite side wants to see a much faster growth, and in order to do that you need to loosen up the regulations. So basically from both sides view Europe is growing, and everyone are expecting things to become better. Thing is that the people who wants to make Europe grow faster, in order to make their argument stronger for loosening regulations, uses overly dramatic arguments like IF we don't do X or do away with Y the growth will stagnate!" While the other side that is for safer but slower growth basically claims that if we DON'T put more regulations THEN someone will screw up again and the economy will stagnate. No one in Europe actually plans for, or really see any real sign of any long term kind of stagnation, its the speed of growth that is being debated on right now. What are you saying ? What are you talking about ? European GDP just now finally caught up to its pre crisis (2008) level ! There is NO growth ! Italian GDP is still below 2008 level. Every serious economists talk about a possible long term stagnation in europe : why do you think a lot of people are talking about secular stagnation or about the lost decade in Japan. Radiatoren the ECB is responsible for the crisis for a big part, with its reluctance to lower interest rate, reluctance to help countries, and desire to prevent inflation at all cost. It's one of the most amateurish central bank of the world, and a joke for most intelligent economists. If any sane people had power, they would have to ask the ECB and some european officials to respond before a judiciary court for their behavior during the crisis. They need to take responsability for what has happened in Greece, Spain and Portugal.
I am blaming the representation keys and the closedness of the workings in the Governing Council. Rumours has it the council votes along national economic interests, which would more or less defeat the purpose of their existance, but we will never know... In that regard I see Germany (including SPD) and particularly Merkel as pushing a very clear line.
Edit: As for askfjh I agree. What I meant was that you expained several other aspects than risk/reward. Sorry for the confusion.
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Compensating private consumption and production with government consumption has brought Japan to a public debt of 212% of their GDP. I wonder who's going to pay that off. The same logic applies to resorting to print money instead of restructuring the economy.
Monetary policy or financing the economy through debt isn't a substitute for structural reforms. It's also not solving the problem, but will only hit harder in a decade or two.
edit: not to say that getting the inflation up wouldn't help, but It won't do any good long term if countries like Italy don't reform their government. Take the 'ease of doing business' index for example.Italy ranks behind Belarus. The legal situation and corruption in Italy is horrible and still largely has not been dealt with.
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On August 27 2014 05:23 Nyxisto wrote:
Compensating private consumption and production with government consumption has brought Japan to a public debt of 212% of their GDP. I wonder who's going to pay that off. The same logic applies to resorting to print money instead of restructuring the economy.
Monetary policy or financing the economy through debt isn't a substitute for structural reforms. It's also not solving the problem, but will only hit harder in a decade or two.
edit: not to say that getting the inflation up wouldn't help, but It won't do any good long term if countries like Italy don't reform their government. Take the 'ease of doing business' index for example.Italy ranks behind Belarus. The legal situation and corruption in Italy is horrible and still largely has not been dealt with.
Japan waited too long - hence the idea of a "lost decade". Meanwhile, rampant precarity and negative effect on revenu prevented them to get back to their consumption level pre 1990. Their budgetary policy had good result on growth (according to some evaluations), but was not enough to put inflation at a level that would help against the debt - consumption never rose to a satisfactory level.
May I had : does Japan current debt level cause a problem to them ? None.
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On August 27 2014 05:46 WhiteDog wrote:Show nested quote +On August 27 2014 05:23 Nyxisto wrote:
Compensating private consumption and production with government consumption has brought Japan to a public debt of 212% of their GDP. I wonder who's going to pay that off. The same logic applies to resorting to print money instead of restructuring the economy.
Monetary policy or financing the economy through debt isn't a substitute for structural reforms. It's also not solving the problem, but will only hit harder in a decade or two.
edit: not to say that getting the inflation up wouldn't help, but It won't do any good long term if countries like Italy don't reform their government. Take the 'ease of doing business' index for example.Italy ranks behind Belarus. The legal situation and corruption in Italy is horrible and still largely has not been dealt with. Japan waited too long - hence the idea of a "lost decade". Meanwhile, rampant precarity and negative effect on revenu prevented them to get back to their consumption level pre 1990. Their budgetary policy had good result on growth, but was not enough to put inflation at a level that would help against the debt - consumption never rose to a satisfactory level. May I had : does Japan current debt level cause a problem to them ? None.
![[image loading]](http://i.imgur.com/4ZfJcdX.jpg)
Japan spends a quarter of their national budget on debt and interest payments. How is that not hurting?
Source:http://www.mof.go.jp/english/budget/budget/fy2014/01.pdf
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On August 27 2014 05:49 Nyxisto wrote:Show nested quote +On August 27 2014 05:46 WhiteDog wrote:On August 27 2014 05:23 Nyxisto wrote:
Compensating private consumption and production with government consumption has brought Japan to a public debt of 212% of their GDP. I wonder who's going to pay that off. The same logic applies to resorting to print money instead of restructuring the economy.
Monetary policy or financing the economy through debt isn't a substitute for structural reforms. It's also not solving the problem, but will only hit harder in a decade or two.
edit: not to say that getting the inflation up wouldn't help, but It won't do any good long term if countries like Italy don't reform their government. Take the 'ease of doing business' index for example.Italy ranks behind Belarus. The legal situation and corruption in Italy is horrible and still largely has not been dealt with. Japan waited too long - hence the idea of a "lost decade". Meanwhile, rampant precarity and negative effect on revenu prevented them to get back to their consumption level pre 1990. Their budgetary policy had good result on growth, but was not enough to put inflation at a level that would help against the debt - consumption never rose to a satisfactory level. May I had : does Japan current debt level cause a problem to them ? None. Japan spends a quarter of their national budget on debt and interest payments. How is that not hurting? Source:http://www.mof.go.jp/english/budget/budget/fy2014/01.pdf
The debt service is 15 % of total state budget in France - with 3x less debt GPD ratio.
I was talking about effect on what is meaningful : interest rate.
By the way, there is a simple rule in economy, a country never pay its debt back.
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On August 27 2014 05:53 WhiteDog wrote:
By the way, there is a simple rule in economy, a country never pay its debt back.
So we'll just keep massing up debt so our children and grandchildren are royally fucked when everyone defaults at some point because "we're not paying our debt back anyway?" Doesn't sound like a very sensible solution to me. I mean the whole idea behind deficit spending is that you're not running a structural deficit all the time, which is exactly what happens in reality.
Economic growth isn't worth anything if you're crippled by debt that's growing twice as fast.
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On August 27 2014 06:00 Nyxisto wrote:Show nested quote +On August 27 2014 05:53 WhiteDog wrote:
By the way, there is a simple rule in economy, a country never pay its debt back. So we'll just keep massing up debt so our children and grandchildren are royally fucked when everyone defaults at some point because "we're not paying our debt back anyway?" Doesn't sound like a very sensible solution to me. I mean the whole idea behind deficit spending is that you're not running a structural deficit all the time, which is exactly what happens in reality. Economy growth isn't worth anything if you're crippled by debt that's growing twice as fast.
And how did we built the europe after WWII ? Did 1950's "children" and "grandchildren" cried out in the street throwing their money in US' pocket to pay back their astonishing debt (110 % GDP ratio for france if I reckon) ?
No, we did what is / was intelligent to do, we inflated the debt away and lived a happy life.
Do you think the US care about its debt ? They know they can just print it away. And putting that aside, it's also basic economic rule to follow contra cyclic policies : pay the debt when it's sunny, not when you need the money to build yourself a house and an umbrela.
By the way, I call that being responsible : caring for the people before the borrowers, selected few that are already way too rich for their own goods. The US, in all their flaws, are being responsible, we are not. And it's the reason we have a far right party dominating the political debate in France.
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EPT
