EPTEuropean Politico-economics QA Mega-thread - Page 228
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Nyxisto
Germany6287 Posts
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Evil_Sheep
Canada902 Posts
On July 29 2015 05:51 maartendq wrote: Your US' success story conveniently fails to mention that it is mainly shareholders and capital owners in general who have benefited from the recovery. Worker wages have stagnated or even decreased, and inequality is at record levels. A recovery that only a very small part of the country benefits from is hardly worth the name. I wouldn't pretend that the situation in the US is perfect, far from it. But it is still far preferable to statistics like 25% unemployment rates, 50% youth unemployment, old pensioners living in the streets, and a lost decade of stagnation and depression. A 5% unemployment rate and a robust jobs market is something the broad eurozone can only dream of right now, even if the wages are low and inequality is high. | ||
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maartendq
Belgium3115 Posts
On July 29 2015 06:00 Evil_Sheep wrote: I wouldn't pretend that the situation in the US is perfect, far from it. But it is still far preferable to statistics like 25% unemployment rates, 50% youth unemployment, old pensioners living in the streets, and a lost decade of stagnation and depression. A 5% unemployment rate and a robust jobs market is something the broad eurozone can only dream of right now, even if the wages are low and inequality is high. It depends. If a lot of people have jobs that barely allow them to make ends meet, sure, that's great for unemployment figures but in the end poverty is still rampant, if not downright increasing. GDP can be a useful figure for measuring economic output, but it's completely useless in measuring a country's overal welfare. | ||
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Incognoto
France10239 Posts
Artificial demand to get the economy going is a good idea, but if the demand isn't sustainable (or long term, if you will) it seems that such a policy is akin to patch work rather than a long term solution the crisis. The way I see it, demand is something which occurs when people have the extra money and time. If people don't have that extra influx of cash, there is no demand (barring essential needs such as food, shelter, energy). Of course, the German policy would be to export, so the demand isn't domestic, it's external. At very least, this means that German people can work (employment). The problem with the € seems to be that the rest of Europe can't really export like Germany does. Isn't it a mistake to have a common monetary policy between countries which don't have the same economic capabilities? This is where my understanding of economics kind of fails me. | ||
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cLutZ
United States19574 Posts
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WhiteDog
France8650 Posts
Maartenq your post go all over the place. Wage increase is not linked to growth performance (or indirectly) but rather to political matters. And no one is saying that there is one theory to explain every economical matter : this does not exist (coincidentally, the dominant economy - neoclassicism - view crisis as impossible) but we understand pretty well what happen when certain policies push for less public investment. On July 29 2015 06:29 Incognoto wrote: Keynesian policy is something which is, afaik, close to the right one. The problem is that I've never failed to comprehend how spending more during times where taxes weigh more heavily (since unemployment is up, someone has to pay) can lead to the economy starting up again. To do this it seems like Governments would have to issue bonds and increase their debt. That would mean that bondholders and banks who loan to governments profit from recessions where Keynesian policies take place? Artificial demand to get the economy going is a good idea, but if the demand isn't sustainable (or long term, if you will) it seems that such a policy is akin to patch work rather than a long term solution the crisis. The way I see it, demand is something which occurs when people have the extra money and time. If people don't have that extra influx of cash, there is no demand (barring essential needs such as food, shelter, energy). Of course, the German policy would be to export, so the demand isn't domestic, it's external. At very least, this means that German people can work (employment). The problem with the € seems to be that the rest of Europe can't really export like Germany does. Isn't it a mistake to have a common monetary policy between countries which don't have the same economic capabilities? This is where my understanding of economics kind of fails me. And why the state should invest through debt ? It has the power to simply create money - something that does not benefit capital but quite the opposite due to inflation. | ||
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Nyxisto
Germany6287 Posts
On July 29 2015 07:39 WhiteDog wrote: The celebration of GDP has a lot to do with the fact that it is linked to unemployment (okun's law). Our poor performnce explain our high unemployment. I love this hypocrisy: what makes Germany a better economy than its european partners ? Its growth. But somehow this does not stand when you compare with the US. . I don't think that the GDP growth is such an important number at all. I think the apprenticeship oriented education system is a big plus for the German economy that other countries should think about. It simply makes no sense to get a nursery degree at a university. It's also something that's very prevalent in other countries that have low youth-unemployment. | ||
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Evil_Sheep
Canada902 Posts
On July 29 2015 06:08 maartendq wrote: It depends. If a lot of people have jobs that barely allow them to make ends meet, sure, that's great for unemployment figures but in the end poverty is still rampant, if not downright increasing. GDP can be a useful figure for measuring economic output, but it's completely useless in measuring a country's overal welfare. To be honest, I really don't think this is a situation where "it depends." Most people would prefer to have a job, even a crappy job, rather than no job and no money. There are still several European countries with unemployment rates between 12-25%, that means in these countries from 1 in 8 to 1 in 4 people who want a job can't get one. That's clearly unacceptable to European voters, and if the economic policies of centrist mainstream European governments fail to deliver jobs, then voters will turn to fringe far-right, far-left, and anti-European parties like Syriza. Europe's failed economic policies are leading to political extremism and threaten the existence of the EU itself. That's a far cry from the US where things have basically returned to normal. | ||
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Evil_Sheep
Canada902 Posts
On July 29 2015 06:29 Incognoto wrote: Keynesian policy is something which is, afaik, close to the right one. The problem is that I've never failed to comprehend how spending more during times where taxes weigh more heavily (since unemployment is up, someone has to pay) can lead to the economy starting up again. The idea is to borrow money now and pay it back later when the economy is growing again. So the stimulus spending is not coming from tax revenues, which are typically decreased, but through debt, including as you mention, issuing bonds. Artificial demand to get the economy going is a good idea, but if the demand isn't sustainable (or long term, if you will) it seems that such a policy is akin to patch work rather than a long term solution the crisis. You're right. The idea is that in a recession, demand is typically below its natural level, and extra spending will simply return it to its natural, sustainable level more quickly. Even if you do nothing demand will eventually return to its natural level, it will just take longer, that's classical economics. In other words, all recessions end eventually, it's just a question of how painful it is. Unlike some other schools of thought, Keynesian economists generally view suffering as a bad thing that we should try and reduce. The problem with the € seems to be that the rest of Europe can't really export like Germany does. Isn't it a mistake to have a common monetary policy between countries which don't have the same economic capabilities? Yes, a big mistake. | ||
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Velr
Switzerland10884 Posts
No it isn't... Sais probably about every country with its own currency ever. What would the poor sates in the US do when they really had compete with the economically strong states? FFS even in tiny Switzerland we got huge payments from economically strong cantons to the weak ones. The mindblowing Issue is, that they created a giant like the € whiteout such a mechanism. The political Union just wasn't and still isn't strong enough for a common currency. | ||
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WhiteDog
France8650 Posts
On July 29 2015 16:00 Velr wrote: No it isn't... Sais probably about every country with its own currency ever. What would the poor sates in the US do when they really had compete with the economically strong states? FFS even in tiny Switzerland we got huge payments from economically strong cantons to the weak ones. The mindblowing Issue is, that they created a giant like the € whiteout such a mechanism. The political Union just wasn't and still isn't strong enough for a common currency. No common language, no common value, no common ennemies nor common history : you can't build a state without that. On July 29 2015 08:19 Nyxisto wrote: I don't think that the GDP growth is such an important number at all. I think the apprenticeship oriented education system is a big plus for the German economy that other countries should think about. It simply makes no sense to get a nursery degree at a university. It's also something that's very prevalent in other countries that have low youth-unemployment. Those are small matters in comparaison to the weight of growth on employment. The US have an atrocious system of education that leave many people with no degree at all and has less unemployment than europe. | ||
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Velr
Switzerland10884 Posts
 .This is only an issue when people feel missrepresented or not treated just/equal. But sadly its perfect fodder for populists. Most values/culture across europe seem pretty similar to me. Sure there are diffrences, but when compared to Asian or African culture these diffrences at best can be described as nuances. As for the GDP Thing. If People have to work several Jobs to make ends meet or rely on stuff like food stamps, i wouldn't actually call that employment, i would call that exploitation and i would favor having 10-20% unemployment over that. Btw I don't think that the GDP growth is such an important number at all. I think the apprenticeship oriented education system is a big plus for the German economy that other countries should think about. It simply makes no sense to get a nursery degree at a university. It's also something that's very prevalent in other countries that have low youth-unemployment This so much. For tons of Jobs an apprenticeship is just a clearly better and more logical way to learn them than "studying" AND it even allows People that didn't like/were just really bad at School to get a decent education. | ||
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WhiteDog
France8650 Posts
On July 29 2015 16:56 Velr wrote: Thats a strange argument when you look at actually existing countries. There are plenty of states with long traditions while hosting diffrent cultures and sometimes languages... Not every Nation went all genocidal on dialects/languages like the French did .This is only an issue when people feel missrepresented or not treated just/equal. But sadly its perfect fodder for populists. Most values/culture across europe seem pretty similar to me. Sure there are diffrences, but when compared to Asian or African culture these diffrences at best can be described as nuances. As for the GDP Thing. If People have to work several Jobs to make ends meet or rely on stuff like food stamps, i wouldn't actually call that employment, i would call that exploitation and i would favor having 10-20% unemployment over that. Btw This so much. For tons of Jobs an apprenticeship is just a clearly better and more logical way to learn them than "studying" AND it even allows People that didn't like/were just really bad at School to get a decent education. The Europe is very diverse, I never liked this idea that there is a core of common value - the "occident". In reality, when you look at things that matters like the way the different countries behave in terms of reproduction, interaction within the famillies, etc. (familial systems) then we see plenty of important differences. E. Todd work is about that (in his book The origin of familly systems, or in The invention of Europe, The invention of France, etc.) and to him, those differences in familial systems influence greatly the history, the politics and the economy of each european countries. Even if he is too determinist in his vision (we can create a core of common value, but not without common institutions that directly touch the people, through education for exemple), there are great value into reading his work to understand europe. It's also the reason why the european project was never a democratic project : much like our royalty back in the days, the technocrats in bruxels are the only europeans in "practice" (hence why they are betraying the interests of their respective nations). People here are always conflating two entirely different things : economic performance, GDP growth and employment, and a political matter which is the distribution of income between the different participant of the production. The US is a society that is entirely dominated by the capitalists nowadays, so yeah they suck up a huge part of the global income. That's not an inherent flaw of their economic system (that is way more democratic than us from an institutional standpoint, in both sense that it is defined through political process and is defined to satisfy the population as a whole and not just capitalists - unlike our european policies as the objectives of the central banks suggest). Not that their economic system has no inherent flaws (mainly the environment, the insecurity of jobs, etc.  ).Thats a strange argument when you look at actually existing countries. There are plenty of states with long traditions while hosting diffrent cultures and sometimes languages... Not every Nation went all genocidal on dialects/languages like the French did . Can you give me an exemple of such nation ? Switzerland works because it's a fiscal heaven and basically happened as a way to protect itself from a common ennemy (the french mainly), belgium is in disarray with just two language ? The only thing that permit it to work is their historical common hate for the french basically. Most countries have one or two official language, and one language known or understood by most of its citizen, or they are not democracies. Even the US, a country that had at the time basically no history and a common language (english) had a hard process toward unification - they had to pass through a civil war basically. Just look at the history of most european countries, it's way more complicated than you seems to believe. You rightfully points out the violent process that gave birth to modern France, but you seems oblivious to the history of other european states. Take the UK, even with a common language it unified itself through war and even with that it has dissensions, as the scottish independance party suggest hundred of years after the unification. | ||
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Velr
Switzerland10884 Posts
A Person that lives in some backwather village has most likely less in common with a countrymen from an urban area than he has with someone in the same situation from another country 1000 miles away despite having a diffrent culture. Their traditions will be diffrent, their basic values most likely very close. Sure, you shouldn't tell people that because they will get defensive for some weird reason. Hilariously especially the French, because somehow France seems to think of itself as a somehow superiour culture because savoir vivre and stuff :p. But every Nation has its, from the outside, very strange, perks.. I just don't think we should focus on the diffrences, there are enough "truely" diffrent cultures around, there is no need to overblow our own just so that we can feel special about our countries  .I just read the Wiki for Todd... Can i assume that he is highly "discussed"? Because some of his famous work/thesises seem pretty, uhm, bold? At least from what i found on the Wiki .I mean: Russian and Chinese Family structures shall lead to communism, the european/anglosaxen leads most likely to liberalism, capitalism and feminism, the oriental structures to Islam and the south east asian to "no Preference"? Uhm... I don't know his work but he better should have good reasoning for these claims.... Can you give me an exemple of such nation ? Switzerland works because it's a fiscal heaven and basically happened as a way to protect itself from a common ennemy (the french mainly), belgium is in disarray with just two language ? The only thing that permit it to work is their common hate for the french basically. Most countries have one or two official language, and one language known or understand by most of its citizen, or they are not democracies. Switzerland has basically the same indsutrial structures as germany when it comes to Finance/Industry. Tax haven? Yeah on top of that too, i won't argue against that (but there were actually plenty of big changes when it comes to this in the last 10 years). Oh and Switzerland mainly existed as a "de facto" French protectorate since we lost to you at Marigano (if you believe actual historians and not right wing politicians ).As for countries with diffrent cultures: USA (obviously... Common language? Really? I guess all the non English/Irish immigrants to the US just instantly adopted english because hell yea?...). Germany (just compare Bavaria to Friesland), a Milanese and a Sicilian are most likely also not on the same page. France would also be (even more) diverse, but sometime in the past you basically went all out termination on dialects/languages that weren't french enough . Just about every big country is very diverse (for us, someone from an entirely diffrent cultural sphere wouldn't notice much). The thing is, these diffrences get smaller and smaller due to faster travel/communication in general and i see absolutely no point in underlining these diffrences. It seems astonishingly backwards to me. Btw1: Maybe i don't see language as this big of an issue because i am Swiss, thats entirely possible, to me its just normal that many people, just as swiss as i am, aren't speaking "my" language. Btw2: I would personally advocate for weaker Nation-States but stronger regional federalism when it comes to "what the EU should do". The last thing i would do was to try mirroring the French centralism. | ||
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WhiteDog
France8650 Posts
France is a rather odd ball from a cultural standpoint (and for this I suggest again reading Todd). In many countries, despite all the difference we often time see a common familial system - relationship between brothers and parents are rather unified. In France, the country built itself around a rather liberal and egalitarian vision of the familly, with many different familial structure - with common opposition between a center belt (with Lille, Paris and Marseille as hot spots of egalitarian famillies) and the rest. The revolution is often time explained this way (with the very famous "Tableau politique de la France de l'Ouest sous la Troisième République" from André Siegfried as the best exemple of that). I just read the Wiki for Todd... Can i assume that he is highly "discussed"? Because some of his famous work/thesises seem pretty, uhm, bold? At least from what i found on the Wiki . I mean: Russian and Chinese Family structures shall lead to communism, the european/anglosaxen leads most likely to liberalism, capitalism and feminism, the oriental structures to Islam and the south east asian to "no Preference"? Uhm... I don't know his work but he better should have good reasoning for these claims.... There are 2 Todd : one political figure, rather leftish, very anti euro and europe who is very criticized yes. But there is also the demograph who is well known for rather brilliant work - he basically foretold the end of the USSR ten years before its actual downfall, and wrote many important piece on familial structure. He is way too determinist tho : yes for him there is no way to escape your familial structure (it dictate everything that a nation do) and thus should be taken with a grain of criticism. But I still see with great value his analysis in explaining the way communism actually happens in different countries : it had a specific cultural aspect, that is heavily linked to familial structure. It's greatly innovative and interesting to link the autoritarian and egalitarian aspect of Russian familial structure with the rise of a very autoritarian communism (bolchevism) there (something that was completly impossible to understand for most of the communist at the time who believed communism would appear in the richest country - and certain not in Russia). | ||
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Velr
Switzerland10884 Posts
), just from the Wiki he seems interesting but as you say, pretty determinist ^^.Germany created itself thanks to Napoléon ? Italy too ? All this goes in the category common ennemy. It's actually a good exemple because Germany tried to unified itself for years without any success, and only the fear of Napoléon and the napoleonic domination (after the defeat during the war of the second coalition) eventually lead to a unified state under the wing of Prussia. You kinda lost me here? Why does it suddenly matter how a country came to be? We talked about cultural diffrences in countries iirc? You said they are too big for a more united Europe and we went on from there to Nation states? I mean, unification probably won't happen when there doesn't seem to be a need/common interests (or one forces it on the other). | ||
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WhiteDog
France8650 Posts
On July 29 2015 22:40 Velr wrote: I think i read about the demograph (see my example ), just from the Wiki he seems interesting but as you say, pretty determinist ^^.You kinda lost me here? Why does it suddenly matter how a country came to be? We talked about cultural diffrences in countries iirc? You said they are too big for a more united Europe and we went on from there to Nation states? I mean, unification probably won't happen when there doesn't seem to be a need/common interests (or one forces it on the other). I pointed out various caracteristics that usually support the cteation of a state, language and culture, but also common ennemy in my first post. Europe has none of that. An european state with fiscal transfer could be a good idea but it will never happen because there is no ground for it. Maybe in a 100 years after a fourth world war or something Btw Switzerland is basically a clandestin passenger in the eurozone - a fiscal heaven who happens to be in the Schenghen treaty but without the currency (and that happen to massively print in order to stabilise its exchange rate at a level that would permit them to grow). Its an intelligent strategy from an economic power house, but it is not Germany (who play on wage and thus a low inflation to profit from the euro). Wage in Switzerland are pretty high. | ||
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Evil_Sheep
Canada902 Posts
On July 29 2015 05:51 maartendq wrote: There is no such thing as a singular economic theory. One of the main flaws of the science is that it continually tries to come up with general theories of how everything works without regard for political structure or level of political development of a country or region. Economics isn't perfect. Every economist knows that. They just try to make the best theories and models they can given the evidence. They are abstractions, they make lots of assumptions that we know aren't true or may not be true in many situations. Great economists are the ones who know how to take these abstract theories and interpret and apply them correctly to the messy real world. Economics is hard and imperfect, but it does work. So far I've seen economists like Krugman and Stiglitz rail against anyone who did not want to throw more money into a Greek sinkhole, or rather who did not want to invest in Greece. My questions for them are "Invest in what?" and "Why would you invest in a country whose population by and large regards its state as something to extract rents from, and that has a public sector that benefits from being as opaque as possible?" This is what you'd call a straw man argument: you've built a straw man and torn it down, but it bears little resemblance to the real person. Krugman and Stiglitz, to use your examples, never railed against people who didn't want to invest in Greece or said throw money into the Greek sinkhole. All they've been saying is the austerity policy Germany has designed can't work. It deals too much damage to the economy which reduces the Greeks ability to pay back the debt, which only increases the debt. It's a vicious circle. They've been saying the same things since the start of the crisis and exactly what they said years ago has come true. Austerity hasn't cured Greece's economy, it hasn't even allowed Greece to pay back its debts, which have only increased instead of decreasing. Greece is in the classic debtors' prison. They can't pay back their debts and now they're in prison. But while they're in prison, they can't work, so they can't pay back their debts. That's why we stopped having debtors prisons in the 19th century: besides being cruel and unjust, lenders also realized they would get more money back if their debtors were working instead of rotting away in a cell. 25% of Greeks are out of work right now. If Germany wants to get its money back they need to put Greeks back to work. That's what Krugman is saying, that's what Stiglitz is saying, that's what the IMF is saying. Germany can force Greece to say it'll pay back €320bn at 3.5% a year, Greece can swear on a bible to Germany it will do so, that doesn't mean Greece will ever be able to pay back €320bn at 3.5% a year in perpetuity. So what economists are saying, what the IMF is now saying, is make a realistic, sustainable payback plan, one that Greece can actually follow, because the one the Germans have come up with is basically a fantasy. Believing in that fantasy has led Germans to be tossing a lot of money into that sinkhole. And the sooner Germans wake up from this fantasy, the sooner they stop tossing money into this sinkhole of endless bailing out of their failed austerity plans, the sooner they start putting Greeks back to work to start sending money back to Germany...the more money they will save. | ||
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kwizach
3658 Posts
On July 29 2015 17:36 WhiteDog wrote: belgium is in disarray with just two language ? The only thing that permit it to work is their historical common hate for the french basically. Belgium has three languages and the Belgians' feelings towards the French (which simply cannot be described as "common hate") have absolutely nothing to do with why it keeps going. On July 29 2015 16:44 WhiteDog wrote: No common language, no common value, no common ennemies nor common history : you can't build a state without that. There are states with multiple official languages, the same "values" are not necessarily shared by everyone within a state and you can find generally shared values across the EU, there are states that were created without specific enemies in sight, and the boundaries of "common history" are relative - Europe can be seen to share a common history as a continent. Those are not the relevant criteria to determine whether an "EU state" could one day emerge - what matters is the political will for such a federal state across the EU. Right now, there is no such political will for federalization, so it's not happening. Lately there has been a little bit of momentum building in terms of talks of a more political EU or Eurozone, but such proposals are still far from actual federalization and we'll have to see what gets translated into actual reforms. | ||
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WhiteDog
France8650 Posts
On July 30 2015 20:45 kwizach wrote: Belgium has three languages and the Belgians' feelings towards the French (which simply cannot be described as "common hate") have absolutely nothing to do with why it keeps going. There are states with multiple official languages, the same "values" are not necessarily shared by everyone within a state and you can find generally shared values across the EU, there are states that were created without specific enemies in sight, and the boundaries of "common history" are relative - Europe can be seen to share a common history as a continent. Those are not the relevant criteria to determine whether an "EU state" could one day emerge - what matters is the political will for such a federal state across the EU. Right now, there is no such political will for federalization, so it's not happening. Lately there has been a little bit of momentum building in terms of talks of a more political EU or Eurozone, but such proposals are still far from actual federalization and we'll have to see what gets translated into actual reforms. You need a popular base to create an european state. Plenty of politicians would love to go for federalism in europe, they just know it will not work. There are indeed differences of values (which is obvious) and sometime more than one language in a nation : it is also oftentime the case for states that were eventually built by outside forces (like colonialism for exemple - thus non a democratic genesis) and in which the dissenssion in language are still relevant to explain either a difference in political desires (through vote) or a desire for secession. Not really the kind of situation that could permit the creation of a state (but sure, an already existing state can live on even with a third of its population that would desire to get out). | ||
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