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Although this thread does not function under the same strict guidelines as the USPMT, it is still a general practice on TL to provide a source with an explanation on why it is relevant and what purpose it adds to the discussion. Failure to do so will result in a mod action. |
On July 15 2015 03:36 warding wrote:
My bad, I was focusing on IS-LM.
IS-LM is Hicks' interpretation of Keynes' General Theory (from the article Keynes and the classic - Keynes' General Theory is famously hard to understand). It's not Keynes theory, who wanted to criticize the neoclassical theory, but the opposite : a way to "reconcile" Keynes and the neoclassical theory.
On July 15 2015 03:34 CuddlyCuteKitten wrote:
How many billions a year did Greece and other countries net a year? There are a LOT of countries who recive a net surplus from EU so there is a wealth transfer. But yeah there is a problem with having a corrupt and inefficent system which doesnt autocorrect itself with inflation, a weaker currency or super high intrest on loans.
Frankly the idea that a team gets weaker because its star players have a healthy food and training regiment is silly. The solution is not to get the entire team to eat junkfood, its the other way around. And the alternate solution is that if you dont want that find another team or go into solo sports.
The wealth transfer is, at best, 4 % of those countries GDP (and 2% of the overall eurozone GDP) : it's clearly not enough. The poorest state in the US have on average 30 % of their income that comes from the federal government, and we always laugh at the US' welfare state.
It's perfectly basic logic that if one country has high surplus with no mecanism to reequilibrate, the only way it can continue with its surplus is by financing the demand from other countries through debt, and de facto creating an unsustainable system. That's not rocket science really.
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Makes sense to me. Good post.
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On July 15 2015 01:04 WhiteDog wrote:
Alcathous prefer German empire over a french empire : So funny that half europe still resent us for the revolution and Napoléon, but completly forgot the third reich. Always baffle me.
Tell me : It's because of our cheese ?
Dunno man. Maybe it is "that french attitude" of yours that people might consider a german empire with free money better than a french empire with free speeches nobody asked for without free money.
Btw. french cheese is really delicious. I don´t know why people would complain about that. Munster cheese from Strasbourg is as great as it is sure that the whole bus stinks of it after we drove for 2 hours in it 
Ah, and as a German, I don´t want to be in a german empire. Actually I´d be happy if every country in europe (and the rest of the world) would be able to stand on their own feet. That also includes paying their bills AND having full sovereignity over their democratic country.
Don´t get me wrong, the structural helps in Europe are a good thing. Smaller economies should get help as it was done and still is done even now. But at the moment I´m against the policy of throwing eurozone member´s tax money away like that.
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On July 15 2015 01:41 Alcathous wrote:
Dutch tourists are the worst.
I´m not so sure there. I thought that english and german tourists are quite terrible too, as anyone can see for himself if he travels to Mallorca (certain areas only).
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Latest on the situation:
The International Monetary Fund has set off a political earthquake in Europe, warning that Greece may need a total moratorium on debt payments for 30 years and perhaps even long-term subsidies to claw its way out of depression.
The decision by the European Central Bank to force the closure of the Greek banks two weeks ago by freezing emergency liquidity assistance (ELA), appears to have cost European taxpayers very large sums of money.
source
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On July 15 2015 04:47 c0ldfusion wrote:Latest on the situation: Show nested quote +The International Monetary Fund has set off a political earthquake in Europe, warning that Greece may need a total moratorium on debt payments for 30 years and perhaps even long-term subsidies to claw its way out of depression. Show nested quote +The decision by the European Central Bank to force the closure of the Greek banks two weeks ago by freezing emergency liquidity assistance (ELA), appears to have cost European taxpayers very large sums of money. source
Honestly, the telegraph calling it a political earthquake is just typical telegraph antics, blowing things hugely out of proportion. The ECB, Eurozone and Greece itself have been quite happy to completely ignore the IMF and everything it has to say or do for the last few weeks, and there isn't really any reason for that to change. That the IMF is probably right isn't going to change anything in the short term (which is what an earthquake implies).
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On July 15 2015 04:47 c0ldfusion wrote:Latest on the situation: Show nested quote +The International Monetary Fund has set off a political earthquake in Europe, warning that Greece may need a total moratorium on debt payments for 30 years and perhaps even long-term subsidies to claw its way out of depression. Show nested quote +The decision by the European Central Bank to force the closure of the Greek banks two weeks ago by freezing emergency liquidity assistance (ELA), appears to have cost European taxpayers very large sums of money. source
On closing the banks. What else could they have done? Funded the bank run that would have cost billions and would have had the exact same end result?
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On July 15 2015 04:58 Gorsameth wrote:Show nested quote +On July 15 2015 04:47 c0ldfusion wrote:Latest on the situation: The International Monetary Fund has set off a political earthquake in Europe, warning that Greece may need a total moratorium on debt payments for 30 years and perhaps even long-term subsidies to claw its way out of depression. The decision by the European Central Bank to force the closure of the Greek banks two weeks ago by freezing emergency liquidity assistance (ELA), appears to have cost European taxpayers very large sums of money. source On closing the banks. What else could they have done? Funded the bank run that would have cost billions and would have had the exact same end result?
Fund the run by printing the money to increase inflation?
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On July 15 2015 05:03 Yurie wrote:Show nested quote +On July 15 2015 04:58 Gorsameth wrote:On July 15 2015 04:47 c0ldfusion wrote:Latest on the situation: The International Monetary Fund has set off a political earthquake in Europe, warning that Greece may need a total moratorium on debt payments for 30 years and perhaps even long-term subsidies to claw its way out of depression. The decision by the European Central Bank to force the closure of the Greek banks two weeks ago by freezing emergency liquidity assistance (ELA), appears to have cost European taxpayers very large sums of money. source On closing the banks. What else could they have done? Funded the bank run that would have cost billions and would have had the exact same end result? Fund the run by printing the money to increase inflation?
Ding ding ding we have a winner.
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On July 15 2015 03:10 WhiteDog wrote:Show nested quote +On July 15 2015 02:02 aqui wrote:
@White Dog. What would have been the proper way to deal with the situation according to your view? In July 2015 i mean, not 5 years back.
I don't know much about this situation, but to me it seems this was handleld very badly from the EU side.
I read a few times that there are historic reasons that the Hellenic Republic is not very much felt as a res publica by her citizens, the governing entity is not the public but a separated class. Surly this is more or less the case in most countries, but it sounds sound, that this is more so the case in Greece than say in Switzerland or Sweden.
In my opinion a state can only work well if the people feel that it is their state, at worst in so far that a benevolence towards its citizens is perceived, at best by actively shaping (communal) live and politics. Suppose Greece is lacking this, the worst thing you could do is dictate policy from the outside as was seemingly done now. If the feeling of self-determination is taken away even more, how do you expect people to happily pay their taxes just so their hard earned money is shoved into the mouth of an (ultimatley) monstrous Banking system. With the current deal, the paid taxes would not even seem to benefit the public.
To me the most urgent political matter seems to let the people of Greece take possession of Greece, which of course also implies finding solutions not demanding solutions. How this can be done, i have no idea.
About Greece or the euro ? First I would make an european (or international) reunion on debt, to find a solution for the unsustainable debt level that are dragging the global economy. Greece, of course, would play a part in that. One of the most important thing to get away from the debt is to push for a higher inflation - this would require a revamp of the BCE, most notably its objectives and its "independance". I would also find a solution to finish the euro as it is, either by going back to national currencies, or by creating a mecanism that take money from the countries in surplus and invest it in the countries in deficit (it's Keynes solution). Then, I would completly revamp the euro zone (most notably the place of lobbying within the eurozone), change the relationship between countries and european institutions, with a clear mandate for each entities, and make everything in order to lessen the power of technocrats. Most of all, we need european institutions that accept differencies and permit those differencies to live and grow, and not some technocratic power that force all of europe to go into one direction (which is liberal). Now this is nothing but a wish list, and really talking in a forum and changing our world are two really different things. Show nested quote +I also think that a lot of nationalism is a what-have-the-Romans-ever-given-us phenomenon. At a national level in any EU country, if you were to actually propose to exit Schengen, quit the Euro and establish your own currency, reinstate national regulatory agencies for all sectors (instead of CE marking for example), undo the Bologna reforms and change your academic system away from the EU standardization, withdraw from cooperation in H2020 projects, withdraw from the Erasmus program, etc, etc, most people would think that you're out of your mind. And why is it everything or nothing ? Can't we just change what suck ? Or it will indeed be everything.
I always love how ideologies really show through when you put someone in the frame of having dictatorial powers. Really gives an insight into how the other side sees the world.
For example if I was given power I would not loan the Greek government another euro for at least 5 years and ban Euro
governments and theirs banks from risking taxpayer dollars or deposits. Greece would still be allowed to seek investment from other sources.
I would then completely dissolve ALL of Greece's obligations. Debt payments, employment contracts, bargaining agreements, pension promises and minimum wage laws. Give the government a completely blank slate to begin with while remaining in the euro if the citizens desire it. They would still possess their assets(educated populace, labor and taxpayer base of 10 million citizens, roads, bridges, buildings and other infrastructure) with no liabilities.
The Greek people would be helped directly with humanitarian aid to unemployed/pensioners if needed, not by lending to the government or banks and hoping those euros will "trickle-down" to those who need it. The Greek government could still sell debt to China, Russia, US, PIMCO, Goldman Sachs and other capital holders at market prices if they needed to raise cash but the world would now have relearned that sovereign debt does carry risk. Greek employees would also go through a painful period of price discovery where they may realize their former job produced no value and don't get their job back others may find they are only worth 2 euro an hour achieving the same result as devaluing the Drachma.
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And then your own citizens would be poorer for having lost $300 billion that won't even be repaid in part.
Even insolvent debts are very painful to write off for the creditor. Don't act like a complex issue is easy to solve properly.
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On July 15 2015 05:03 Yurie wrote:Show nested quote +On July 15 2015 04:58 Gorsameth wrote:On July 15 2015 04:47 c0ldfusion wrote:Latest on the situation: The International Monetary Fund has set off a political earthquake in Europe, warning that Greece may need a total moratorium on debt payments for 30 years and perhaps even long-term subsidies to claw its way out of depression. The decision by the European Central Bank to force the closure of the Greek banks two weeks ago by freezing emergency liquidity assistance (ELA), appears to have cost European taxpayers very large sums of money. source On closing the banks. What else could they have done? Funded the bank run that would have cost billions and would have had the exact same end result? Fund the run by printing the money to increase inflation?
devalue the entire Eurozone and still be left in the exact same situation at the end. Exactly how is that improving things?
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On July 15 2015 05:33 Gorsameth wrote:Show nested quote +On July 15 2015 05:03 Yurie wrote:On July 15 2015 04:58 Gorsameth wrote:On July 15 2015 04:47 c0ldfusion wrote:Latest on the situation: The International Monetary Fund has set off a political earthquake in Europe, warning that Greece may need a total moratorium on debt payments for 30 years and perhaps even long-term subsidies to claw its way out of depression. The decision by the European Central Bank to force the closure of the Greek banks two weeks ago by freezing emergency liquidity assistance (ELA), appears to have cost European taxpayers very large sums of money. source On closing the banks. What else could they have done? Funded the bank run that would have cost billions and would have had the exact same end result? Fund the run by printing the money to increase inflation? devalue the entire Eurozone and still be left in the exact same situation at the end. Exactly how is that improving things?
Could you expand on why you see devaluing a currency as a bad thing? Eurozone doesn't have full employment and some regions have problems with being competitive. I honestly expect a decrease in standard of living difference between EU zone and the rest of the world. The level will still rise due to improved technologies but not through people becoming wealthier.
Edit, Also worth noticing the current Eurozone inflation, if it is high then devaluing is bad, if it is low then it is neutral or good.
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On July 15 2015 05:32 LegalLord wrote:
And then your own citizens would be poorer for having lost $300 billion that won't even be repaid in part.
Even insolvent debts are very painful to write off for the creditor. Don't act like a complex issue is easy to solve properly.
Yes they will be poorer, the world MUST relearn that lending money(even sovereign debt) does carry risks. Sometimes lessons and revaluations of assets can very painful for your net worth. On the plus side it would help wealth inequality no?
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I am proud of what Merkel archived, and I think it's the best outcome she could reach. That americans on twitter go crazy is irrelevant, they haven't been involved in the past 6 years, and if they want to pump millions into greece, no one is stopping them. But the eu tried that and it didn't work, so now they need to be sure Greece understands it needs to follow a plan closely and to the END to become a solid economy.
I belive the understanding is now there, and I am glad we can support Greece on their way to become a solid, modern economy.
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Liquidity trap means that orthodox monetary policy has no effect, but giving (not lending) money directly to the state (monetizing the deficit) or institutions is not orthodox, it's even forbidden by the ECB's rules. Why ? Because it create inflation ata fast rate (or at least did in the XXth century).
Here is a better explanation from Krugman :
http://krugman.blogs.nytimes.com/2013/04/11/monetary-policy-in-a-liquidity-trap/?_r=0
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On July 15 2015 00:33 Nyxisto wrote:Show nested quote +On July 15 2015 00:16 WhiteDog wrote:
They are always stressing on the importance of the rules, but the political game is about compromise, about winning but also letting your opponent keep the face. Germany does not care, if it can crush it would - a good sport analogy would be Germany Brazil in the last mondial, where 3-1 was enough, but where they still pushed to 5-1, effectively humiliating their opponent in their home country. If you really think that winning a soccer game with a high score somehow reveals our true, evil, sadistic German nature then you really need to check your perspective. Also using sovereignty as an excuse for national political interests isn't something exclusive to Germany. Using the government to support the national economy is maybe more prevalent in France than anywhere else. And although I don't really support how the German government has negotiated over the last week, you can't do the same thing over years and then be surprised when at some point you get the same reaction.
On July 15 2015 01:23 Acrofales wrote:Show nested quote +On July 15 2015 00:16 WhiteDog wrote:
The US dominate but do not generate the hate in america that Germany does in europe. Germany is preserving its monstruous surplus - on par with China ! - but does not reinvest that surplus in a way that would benefit europe like the US used to do with the world.
It is playing an individualist and nationalist game and ask for complete discpline from its "partners". Add to that arrogance and contempt for other countries - as Schauble did not only with Greece but France - and you have a dangerous cocktail
When I look at the way Germany handle the EU I always wonder. They are always stressing on the importance of the rules, but the political game is about compromise, about winning but also letting your opponent keep the face. Germany does not care, if it can crush it would - a good sport analogy would be Germany Brazil in the last mondial, where 3-1 was enough, but where they still pushed to 5-1, effectively humiliating their opponent in their home country. Firstly, it was 7-1, and secondly that is the dumbest analogy in this thread full of dumb analogies. Really, as if any other football team would have let up and said "enough guys, stop humiliating them, we're 4-1 (safer margin) ahead. Let them save face on their home ground". Lol. Deluded. That has absolutely NOTHING to do with German mentality vs. other countries. That simply has to do with them being competitive sports players!
and the worst part about whitedogs analogy is that the euro is not even a football, it's a currency.
Greece: The Struggle Continues
long interview with Stathis Kouvelakis, who serves on the central committee of Syriza.
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The first immediate impact of this massive victory of the “no” vote was to increase the disintegration of the opposition parties.
On the very evening of the result, these people were completely defeated — this was by far the hardest defeat of the pro-austerity camp since the start of the crisis. It was much clearer and more profound than the January elections, because they had regrouped and mobilized all their forces but still suffered a devastating defeat. They didn’t win a single county in Greece.
New Democracy leader and former Prime Minister Antonis Samaras resigned almost immediately. And then, only hours later, this entire camp was resuscitated and legitimized by Tsipras himself when he called for the “council of political leaders” under the chair of the president of the republic, an open Yes supporter, who had been appointed by the Syriza majority in parliament in February.
At that meeting you saw an extraordinary thing happen — the head of the victorious camp accepted the conditions of the defeated camp. This, it has to be said, is something that’s unique in political history. I don’t we’ve ever seen this before.
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But, if there are new elections, the party leadership can exclude people?
That’s clearly their plan. There was even talk of that happening before the referendum, during the last phase of the negotiation process when the deadlock was becoming more and more apparent — people were saying Tsipras should call for new elections and in between the elections purge all the candidates of Syriza’s left. And I think this is the type of plan they certainly have in mind. So it will be a race between the functioning and legitimacy of the party and the way to manipulate the political agenda and timetable, more particularly calling for new elections.
... src
dragasakis sounds like a real party pooper.
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On July 15 2015 05:39 Yurie wrote:Show nested quote +On July 15 2015 05:33 Gorsameth wrote:On July 15 2015 05:03 Yurie wrote:On July 15 2015 04:58 Gorsameth wrote:On July 15 2015 04:47 c0ldfusion wrote:Latest on the situation: The International Monetary Fund has set off a political earthquake in Europe, warning that Greece may need a total moratorium on debt payments for 30 years and perhaps even long-term subsidies to claw its way out of depression. The decision by the European Central Bank to force the closure of the Greek banks two weeks ago by freezing emergency liquidity assistance (ELA), appears to have cost European taxpayers very large sums of money. source On closing the banks. What else could they have done? Funded the bank run that would have cost billions and would have had the exact same end result? Fund the run by printing the money to increase inflation? devalue the entire Eurozone and still be left in the exact same situation at the end. Exactly how is that improving things? Could you expand on why you see devaluing a currency as a bad thing? Eurozone doesn't have full employment and some regions have problems with being competitive. I honestly expect a decrease in standard of living difference between EU zone and the rest of the world. The level will still rise due to improved technologies but not through people becoming wealthier. Edit, Also worth noticing the current Eurozone inflation, if it is high then devaluing is bad, if it is low then it is neutral or good.
For one fill employment will not happen again. Simply not enough jobs for that.
But most importantly, even if devaluing would be beneficent (and im not saying it isn't) we can do better things with all that printed money then use it to fund a bank run that will leave the banks gutted and destroyed regardless.
Just extending the ELA would not have stopped the bank run because it was caused by the fear of an exit. The damage was going to happen anyway and by freezing the ELA at least prevented more money being thrown into the blackhole.
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This is a really nice interview nunez. Thanks for the link. Here is a piece that I liked a lot :
I think this is telling about what the Left is about today. The Left is filled with lots of people who are well-meaning, but who are totally impotent on the field of real politics. But it’s also telling about the kind of mental devastation wrought by the almost religious belief in Europeanism. This meant that, until the very end, those people believed that they could get something from the troika, they thought that between “partners” they would find some sort of compromise, that they shared some core values like respect for the democratic mandate, or the possibility of a rational discussion based on economic arguments. [...]
I think that, in this case, Balibar is probably more relevant than Habermas. Once again, I think we have to take Tsakalotos at his word. He gave an interview to Paul Mason just the day after European Commission President Jean-Claude Juncker’s very humiliating counter-proposals were sent.
When Mason asked him about the euro, Tsakalotos said that exit would be an absolute catastrophe and that Europe would relive the 1930s with the return of competition between national currencies and the rise of various nationalisms and fascism.
So for these people the choice is between two things: either being “European” and accepting the existing framework, which somehow objectively represents a step forward compared the old reality of nation-states, or being “anti-European” which is equated with a falling back into nationalism, a reactionary, regressive move.
This is a weak way in which the European Union is legitimated — it might not be ideal but it’s better than anything else on the table.
I think that in this case we can clearly see what the ideology at work here is. Although you don’t positively sign up to the project and you have serious doubts about the neoliberal orientation and top-down structure of European institutions, nevertheless you move within its coordinates and can’t imagine anything better outside of its framework.
This is the meaning of the kind of denunciations of Grexit as a kind of return to the 1930s or Grexit as a kind of apocalypse. This is the symptom of the leadership’s own entrapment in the ideology of left-Europeanism.
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EPT
