On December 30 2011 21:12 paralleluniverse wrote: It's not my solution, it's one part of Paul Krugman's solution (he's an economics professor who won a Nobel Prize).
On December 30 2011 21:28 Lebesgue wrote: Paul Krugman won the noble prize for his research on trade theory not on the debt crisis. For 10 years he resembles more a politician than an economist. He is not active in research anymore and yet voices his opinion on pretty much everything that concerns economics. In last 5 years his been ridiculed or proven wrong many times yet he keep preaching. I would take everything that he said with a bowl of salt. He has political agenda and he keep pushing it.
Economics is mostly politics. Throw a few billion at historians and the same thing would happen to history. Throw a few billion at psychologists and... oh wait, that already happened.
On December 31 2011 02:26 Klondikebar wrote: Well yeah, true economic growth is by definition an increase in the standard of living. That's good for everyone.
It really depends what you do with the data. A fantastically simple example: Take a million people who earn $1 a day. Lets inject some "economic growth". We'll put 999,999 people on 50c a day and put one person on $1,000,0001 a day. This million people now, on average, earn 50% more. But the median person earns half what they earned before.
On December 31 2011 02:38 Klondikebar wrote: Also, the problem in your example (and quite arguably in the real world right now) is distribution, not growth. We wouldn't say that growth is bad, we would say that distribution is bad. Growth gives us more stuff, that's undeniably good. Distribution takes that new stuff away from some people and gives it to others, that's bad.
You mean REdistribution. Distribution of wealth is like gravity, it just happens. Actually so does redistribution so you're kind of screwed there too, I think what you mean is "redistribution by the state".
On December 31 2011 02:55 Klondikebar wrote: Well politicians have never understood economics so it's no surprise that they confuse GDP with true growth.
On December 31 2011 03:27 sekritzzz wrote: I don't really want to elaborate too much because the EU problem takes too long to explain and too complicated for non-finance/economics people.
No one understand economics, it's not just in random threads on team liquid that people argue about it, at the highest levels there are fundamentally different philosophies being argued over. Within philosophies there are arguments over what to do to solve even very basic problems.
"The will of the Swedish chemist Alfred Nobel, the inventor of dynamite, established the prizes in 1895. The prizes in Physics, Chemistry, Physiology or Medicine, Literature, and Peace were first awarded in 1901."
About 75 years later in 1968 sweden's central bank invented the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. It's usually called the Nobel Prize for Economics, but I believe that is a very underhand way of perpetuating a very damaging lie. Namely that Economics is a science.
On December 31 2011 05:25 Dapper_Cad wrote: "The will of the Swedish chemist Alfred Nobel, the inventor of dynamite, established the prizes in 1895. The prizes in Physics, Chemistry, Physiology or Medicine, Literature, and Peace were first awarded in 1901."
About 75 years later in 1968 sweden's central bank invented the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. It's usually called the Nobel Prize for Economics, but I believe that is a very underhand way of perpetuating a very damaging lie. Namely that Economics is a science.
It is a science. You form a hypothesis about the world, collect data, test your hypothesis (preferably multiple times), and draw conclusions. Your odd elitism can't change that.
You can't test an Economic hypothesis because you can't invent an Economic experiment. You can study history and attempt to draw conclusions but they can always be refuted. That's why a lot of the Economic arguments you hear today are hundreds of years old.
This isn't elitism, this is argument.
On December 31 2011 03:27 sekritzzz wrote: I don't really want to elaborate too much because the EU problem takes too long to explain and too complicated for non-finance/economics people.
I really hope someone brought up or will bring up Iceland, I don't have much time to explain it all, then again there's not too much to say about it. They are starting to financially grow again, after completely kicking all those corrupt banks, taking the huge interest hit (I think for America were to do it, it'd rise up to around 35-40%) and just going through the growing pains of recovery. To me, you have private banks (public banking, especially in Germany, was truly inspiring when I first learned about it.) that have private interests, just wanting it to always seem like the world will end without them, that they've always been there "for" us.
What I'm reading in the OP is "please don't use Europe's economic state as evidence against Europe's economic policies." The suggestion that their spending had nothing at all to do with their massive debt is just laughable. Did other things affect European debt? Of course. But they merely exacerbated the problem that was already in existence.
They do the same exact routine in the US. All the democrats say "the real problem is MILITARY spending!" And all the republicans say "the real problem is SOCIAL spending and waste!" Meanwhile the debt continues to skyrocket and the only people we choose to blame are the rich on wall street.
I'm starting to think more and more that democracy is simply an unworkable system.
PS: Also OP, no republican says that the solution to the recession is cutting spending. They say that the solution to unsustainable public debt is cutting spending. It's a long term, rather than a short term, solution.
On December 31 2011 06:07 liberal wrote: I'm starting to think more and more that democracy is simply an unworkable system.
I know what you mean. I think you need an organised, educated public who aren't living in fear for their economic and personal safety for it to function at it's best.
On December 31 2011 06:07 liberal wrote: What I'm reading in the OP is "please don't use Europe's economic state as evidence against Europe's economic policies." The suggestion that their spending had nothing at all to do with their massive debt is just laughable. Did other things affect European debt? Of course. But they merely exacerbated the problem that was already in existence.
They do the same exact routine in the US. All the democrats say "the real problem is MILITARY spending!" And all the republicans say "the real problem is SOCIAL spending and waste!" Meanwhile the debt continues to skyrocket and the only people we choose to blame are the rich on wall street.
I'm starting to think more and more that democracy is simply an unworkable system.
PS: Also OP, no republican says that the solution to the recession is cutting spending. They say that the solution to unsustainable public debt is cutting spending. It's a long term, rather than a short term, solution.
Untill YOU stop blaming more and more on the politicians, the number of laws will increase. It is basic math: The more they think they have to take on their backs, the more they are covering their ends...
It has been stated numerous times in this thread that the crisis in Greece = public debt, Spain = Unemployment and Italy = debt, but fearmongering mostly.
Of course the politicians are a part of the problem, but that is because some people makes them targets for every little boohoo that might or might not have anything to do with them and the government desperately tries to cover those with detailed completely unenforceable and unfair regulations.
Drawing parrallels between US politics and any mainland european nations politics is very dodgy since the systems are fundamentally different.
Please keep your conspiracy theories calm unless you can substantiate or can communicate in a non-judgemental way!
On December 31 2011 06:07 liberal wrote: What I'm reading in the OP is "please don't use Europe's economic state as evidence against Europe's economic policies." The suggestion that their spending had nothing at all to do with their massive debt is just laughable. Did other things affect European debt? Of course. But they merely exacerbated the problem that was already in existence.
They do the same exact routine in the US. All the democrats say "the real problem is MILITARY spending!" And all the republicans say "the real problem is SOCIAL spending and waste!" Meanwhile the debt continues to skyrocket and the only people we choose to blame are the rich on wall street.
I'm starting to think more and more that democracy is simply an unworkable system.
PS: Also OP, no republican says that the solution to the recession is cutting spending. They say that the solution to unsustainable public debt is cutting spending. It's a long term, rather than a short term, solution.
I think you have to keep in mind the bigger picture here. In 2008, we saw the breakdown of a global financial system where all developed countries and their citizens had been financing everything by a bottomless pit of debt. Before the bubble burst, this made good sense to most people because economy was speculation, and as long as the numbers added up, everything was fine. They had been living beyond their means, in other words, for resources that the financial systems bestowed upon them, allowing them access to riches from around the world. While the economy was looking good, the budget for most countries were fine, but once the global financial crisis hit, suddenly the countries had to adjust. Obviously, no country should spend more than they can afford, and with the economical crisis countries have had to face this fact. This has nothing to do with social spending; what you spend your money on is simply a matter of priority. I don't think anyone will oppose getting rid of "waste", but how you solve the concrete problems of maintaining a welfare society that you can no longer afford is a very different matter. For instance, the former Danish government decided to cut down on a lot of activities, and it turned out that many of this created more value than expense when you looked at the bigger picture. They also used centralization as a way to save resources and cut costs, but it turned out that the centralization hardly saved any money and all it did was deteorate the systems that were already in place. For instance, the Danish social psychiatric sector, which offers services to mentally ill has had many problems and had decreased greatly in quality due to centralization.
Mind you, most European countries aren't hit harder by the economic crisis than the rest of the world. The reason that things are looking gloomy for Europe is because of rising unemployment and a rising elderly demographic. If you can run you economy on imaginary values, it's not problem to have businesses that flourish, keep peopel employed and generate wealth for a well-established society. However, once you remove those imaginary values and are limited to your actual resources, all of a sudden, you have to adjust. The richest countries have seen a lot of their low-skilled labour outsourced to countries where people are poorer and are willing to work for less. This means that these countries now produce a lot less and have to have other industries that make up for it and create value and jobs. Many European countries seem to be facing this problem and desperately need to find a way to create value for the future through knowledge-based industries or accept a drastic decline in standards of living. We have been perfectly happy to let China produce many of our goods, but now China is quickly becoming a well-established country, which allows the Chinese to get their share of the resources, causing a redistribution that value that is created on a global scale. This is a long-term problem, and the short-term problems that shape the agenda now are rather based on unique cases. Italy has been run by a president who seemingly had no care for its well-being, slowly allowing its infrastructure to deteriorate and let corruption it away. Greece, from the sound of it, have fallen victim to a very egocentric culture of tax-evasion and corruption which the system can no longer bear under current conditions. In Spain, we see how other countries may fare if the no longer have sufficient industries to make up for the loss of production through low-skilled labour. The current Danish government hopes that in the future we can create jobs by being experts in the fields of sustainable energy, welfare technology and ecology, but I doubt that's enough. In the end, with the world's population increasing and its resources slowly being redistributed, the richest countries can only hope to maintain their standard of living by political force or through the resources created by technological advance. Otherwise, the natural development would be that Europeans inevitably would have to accept to work more for less money, with access to less goods. If people accept to work of half of what the do today they will be poorer, but it suddenly becomes viable to produce a lot of things again. Right now, a lot of a people are unemployed and are unable to add value to the society. There are a lot of thing that they could be doing, but that they would rather let people do cheaper elsewhere (working harder and under worse conditions than Spanish workers would). The situation remains this way because things are not bad enough that such changes are forced yet.
US spending won't just lead to a Europe like crisis, it will be much, much worse. There's not going to be anyone to bail out the US because they've been constantly bailing it out through their lending.
On December 31 2011 06:07 liberal wrote: What I'm reading in the OP is "please don't use Europe's economic state as evidence against Europe's economic policies." The suggestion that their spending had nothing at all to do with their massive debt is just laughable. Did other things affect European debt? Of course. But they merely exacerbated the problem that was already in existence.
They do the same exact routine in the US. All the democrats say "the real problem is MILITARY spending!" And all the republicans say "the real problem is SOCIAL spending and waste!" Meanwhile the debt continues to skyrocket and the only people we choose to blame are the rich on wall street.
I'm starting to think more and more that democracy is simply an unworkable system.
PS: Also OP, no republican says that the solution to the recession is cutting spending. They say that the solution to unsustainable public debt is cutting spending. It's a long term, rather than a short term, solution.
Democracy has never worked and the founding fathers knew it. That's why the US is a constitutional limited democracy and not a democracy. It's unfortunate but the philosophy that gave rise to the constitution is now all but dead and all a president has to do to violate it is stack the Supreme Court with his lackeys. Gone are the days when we'll hear anything like this come out of a president's mouth:
"I can find no warrant for such an appropriation in the Constitution, and I do not believe that the power and duty of the general government ought to be extended to the relief of individual suffering which is in no manner properly related to the public service or benefit. A prevalent tendency to disregard the limited mission of this power and duty should, I think, be steadfastly resisted, to the end that the lesson should be constantly enforced that, though the people support the government, the government should not support the people."
On December 30 2011 20:49 mdb wrote: I`m total economics newb and as far as I understand if we put it in simple words
- people get loans from banks - they dont invest the money in smth that will return profit, but instead buy iphones and such stuff - people cant return the money to the banks - banks bankrupt
is this correct?
No, you're wrong.
Greece lied about their deficit when they joined the Euro, if they had told the truth they wouldn't have been allowed into the Euro. 40% of taxable income in Greece goes unpaid, no one pays their taxes in Greece the entire country is corrupt and just fucks each other over, add in the fact that during the housing bubble they invested money widely and you have a recipe for disaster. I'd be pissed if I was German and had to help those douches (the Greeks) out.
Although, Germany and Iceland both entered the housing bubble with their pockets open and didn't know what the fuck they were doing as they have no experience in the financial markets (at least not at the level they were playing), Germany and Iceland bought a shit ton of toxic debts and basically got fucked over by Americans who knew a mug when they saw one coming.
Don't blame the Greeks in general. The Greek polititions are the ones to blame. Like the polititions in my own country. But in the end the ones making the sacrifices and paying up their screw ups are the hard working people.
I'm not just blaming the Greek "hard working" people, but the "hard working" people of Greece don't pay their taxes, sure some do but the vast majority don't, everyone is looking to get one over on one another and no one wants to take responsibility, tbh Greece should never of been allowed to join the Euro but who knew they were lying about their deficit? Putting a country like Germany in financial bed with a country as corrupt as Greece was never going to turn out well
You don't know how shit works in Greece so don't open your big fucking mouth about it. How about you not insult an entire country of people because what a few fucking politicians did, which was at the direction of major corporations such as the IMF and Goldman Sachs. Not to mention what REALLY destroyed Greece's economy was the euro. They should have never been a part of the EU to begin with, not because of their debt, but because a tourist economy like greece's needs the option to be able to devalue their currency when they need to, which is impossible with the euro. And the oh so great German government could have saved this entire debacle years ago by lending the money they needed back then, instead of escalating it and making the problem literally thousands of times worse. What's the point of having a European Union that will be on the verge of collapsing if one country goes defunct, when the other countries in the union have a chance to stop it but don't.
When Spain and Italy's economy implodes for the exact same reason it will probably be Greece's fault too amirite?
On December 31 2011 06:07 liberal wrote: What I'm reading in the OP is "please don't use Europe's economic state as evidence against Europe's economic policies." The suggestion that their spending had nothing at all to do with their massive debt is just laughable. Did other things affect European debt? Of course. But they merely exacerbated the problem that was already in existence.
They do the same exact routine in the US. All the democrats say "the real problem is MILITARY spending!" And all the republicans say "the real problem is SOCIAL spending and waste!" Meanwhile the debt continues to skyrocket and the only people we choose to blame are the rich on wall street.
I'm starting to think more and more that democracy is simply an unworkable system.
PS: Also OP, no republican says that the solution to the recession is cutting spending. They say that the solution to unsustainable public debt is cutting spending. It's a long term, rather than a short term, solution.
Spending had nothing to do with their crisis, in all cases except Greece.
For Greece governement spending was 100% the problem.
For countries like Italy and Spain, the main problem is high debt held by the private sector and people, which led to a recession, and huge imbalances (high wages making their export uncompetitive).
lol the best part about economics is that people who study economics have the least clue about how real economics works and how it affects markets, and why things happen
all i can say is that the bor market is pricing in massive funding pressures and a cut to 0.75% right now, and it's a lot more interesting to actually see what is going on in the market than speculating from the outside
On December 31 2011 05:25 Dapper_Cad wrote: "The will of the Swedish chemist Alfred Nobel, the inventor of dynamite, established the prizes in 1895. The prizes in Physics, Chemistry, Physiology or Medicine, Literature, and Peace were first awarded in 1901."
About 75 years later in 1968 sweden's central bank invented the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. It's usually called the Nobel Prize for Economics, but I believe that is a very underhand way of perpetuating a very damaging lie. Namely that Economics is a science.
It is a science. You form a hypothesis about the world, collect data, test your hypothesis (preferably multiple times), and draw conclusions. Your odd elitism can't change that.
It's not accurate to call it a science, anymore than calling sociology a science would be.
Forming a hypothesis about the world, collecting data, testing hypotheses are elements of the scientific method, but are not all that is necessary to make something a science, otherwise history would just as easily be a science.
Instead, what is necessary is, in addition to what you mention, the assumed fact that what is being studied and modelled is constrained by an underlying deterministic system bound by a small set of physical laws, i.e. chemistry, physics, etc. In other words, discretely modellable by a finite formal system. (Note that mathematics isn't a science, because of Godel's incompleteness theorem)
Economics pretends to be this, and the pretension is damaging. Economics is a study of human behaviour, but humans do not behave in strictly deterministic ways, at least not in ways we are even close to understanding.
Calling economics a science however innoculates it from criticism that it describes something that is neither orderly nor deterministic, implicating the agency and importance of individuals (especially particular individuals, whoever they might be) within the system. The reasons that this is problematic are pretty obvious and shouldn't need to be stated here.
yes, yes, quantum mechanics, not deterministic. But if you understand enough to be able to raise that objection you also likely operate under the assumption that there are hidden variables, and you realize that it's a qualitatively different situation than modelling human beings, which are a confluence of many many different levels of complexity and physical systems. Anyways off topic.
On December 31 2011 05:48 Wombatsavior wrote: I really hope someone brought up or will bring up Iceland, I don't have much time to explain it all, then again there's not too much to say about it. They are starting to financially grow again, after completely kicking all those corrupt banks, taking the huge interest hit (I think for America were to do it, it'd rise up to around 35-40%) and just going through the growing pains of recovery. To me, you have private banks (public banking, especially in Germany, was truly inspiring when I first learned about it.) that have private interests, just wanting it to always seem like the world will end without them, that they've always been there "for" us.
Oh yes Greece would like to do that, but it was not allowed to. The news about referendum if to accept the bailout (means "no" as the greeks want out of EU) was a bit of shock for the financial powers,but they acted very quickly. The next day another surprise- the all top military command and a score of officers were replaced in fear of coup d’etat (there is no any other possible explanation). There are some patriots among military that were ready to fight for the country sovereignty . Greeks do not have control over their own country now, they cannot decide what to do. They decision has impact on all Europe.
There is also a quite famous documentary "Debtocracy", a point of view on the situation from some greek people.
EPT
