tag:blogger.com,1999:blog-20893208381126879.post4354508528767989045..comments2019-05-06T19:05:55.690+03:00Comments on Redesigning the foot: One and 1/3 speed EuropeThe Cheshire Cathttp://www.blogger.com/profile/08619547396220504593noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-20893208381126879.post-29140465899367189622012-02-27T19:55:33.244+02:002012-02-27T19:55:33.244+02:00No I never did say that.
I am arguing that the a...No I never did say that. <br /><br />I am arguing that the act of creating a Monetary union with a its own central bank has created this illusion. I agree with you that the German government did not feed this illusion. German voters were right to be suspicions of the union prior to entering (given their unification experience).<br /><br />Nor am I attacking the German people. Indeed I think that one part of the crisis is the sacrifices (keeping real wages low and Germany's working poor) that Germans made prior to and following the formation of the Euro. I made an earlier post on this: "Unfair for one, unfair for all"<br /><br />I'm attacking the failed ideology behind the European project and Euro leaders inability to deal with it. Germany happens to be a key player. Its in an awkward position.<br /><br />I would also dispute how much of parliamentary democracy Greece really is, but I agree with your view of the political culture. This cannot not be changed from the outside - there are questions concerning the underlying motives of the Trioka and because of Greek history). The change has to come from within.<br /><br />I agree with some of your other points - but some of your fact are opinions. Basically, while we agree on microeconomics, we disagree completely with respect to macroeconomics and economics of development - which you can find else where on my posts. <br /><br />And also, of course, we disagree on Budget Balance indiscipline being the cause, rather than being a symptom of the euro crisisThe Cheshire Cathttps://www.blogger.com/profile/08619547396220504593noreply@blogger.comtag:blogger.com,1999:blog-20893208381126879.post-43988649936478465282012-02-27T15:11:27.961+02:002012-02-27T15:11:27.961+02:00Now, who's to be blamed for the sad state of a...Now, who's to be blamed for the sad state of affairs in Greece? Certainly the politicians and the powerful interests, and to a large degree the voters, too, since they tolerated this irresponsible situation for way too long. But other European governments did only pay a minor role (by not vetting the Eurozone candidfate thoroughly enough), if at all. After all, foreign nations shouldn't engage in regime change in a country, and neither should do intelligence gathering on the state of its economics and politics. the European Union necessarily has to rely on trust and confidence that all member nations will act responsibly. Or else it would have to become a centralized police state with total control of the citizen. Wo wants that?<br /><br />So, excuse me pls, but imho the fingerpointing at other EU governments is not only unfair, but also diverts attention from the very real issues and offenders. And if other Europeans are painted as scapegoats by the Greek, this will only make them less inclined to offer more solidaric help. But when all is said and done, it's still the Greek people who decide on their own fate. It's their choice, and they will have to live with the consequences. If they want change, they have to work to make it happen, the EU can't do that for them!Gray, Germanynoreply@blogger.comtag:blogger.com,1999:blog-20893208381126879.post-20898189951957486392012-02-27T15:10:50.058+02:002012-02-27T15:10:50.058+02:00Lots of serious distortions in this story. The Eur...Lots of serious distortions in this story. The Euro contracts explicitly say that no government shall be liable for the debts of another! And the German government never ever fed the Illusion that all debts are equal. So, the German state and its people are not responsible for Greek debt! They still help the Greek nation now, but out of solidarity, not because of any political or ethical obligation.<br /><br />Secondly, the EU/IMF have kept Greece from defaulting, because the elected Greek government (and don't tell me that Papandreou allegedly fooled the voters, that's not OUR fault!) wishhed to avoid bankruptcy. They could have decided differently, but even the new, legally elected (it's a PARLIAMENTARY democracy!) government still doesn't wish to do so. So, the troika supported Greece with credits, but of course only under the condition that the systemic problems that led to the misery will be solved. It should be self evident that reforms are necessary, since without changes new credits would only recreate the same old bubble! <br /><br />Of course, this led to the government slashing many of the overblown and unsustainable expenses. And also to a tax increase. The problem with that is that the politicians only engaged the easy targets, the burdened the working class (who can't escape taxation) even more, but didn't effectively syphon the rich, which were alllowed to bring their money out of the country instead. For this, the totally screwed up administration is to be blamed, too, but the political leadership didn't dare to fight the corruption and inefficiency there yet. Only temporary workers unfairly became the victims of administrative "reform", without any regard to their performance at the job. Also, the government shied away from privatizing state assets, even though those 50 billions coould have been used to buy up to 160 billion Greek bonds (trade at 30c/€) and seriously reduce the debt burden. Virtually nothing happened, and those assets constantly lose value in the recession. it's a scandal. <br /><br />All those socially unbalanced actions and inactions led to a dire decrease of domestic demand, worse than in other nations who engaged in similar reforms. But both the politicans and the people mostly blame the troika for that, as if reforms were unnecessary, and as if it wasn't the screwed up implementation that made the mess much worse! A shocking case of collective delusion.<br /><br />But still, the facts remain the facts, and they are:<br />- Only fiscal responsibility is sustainable in the long run. <br />- Stimuli are a good idea to stabilize an economy during a downturn, but they shouldn't be applied during boom years (like Greece did) and you can't use them when you run a deficit and exhausted your credit line.<br />- Competiveness doesn't only depend on wages, but also lots of other important factors (infrastructure, education, quality of government, etc) and a nation that has huge structural problems in those fields has to address them. Stimuli don't work as a replacement for reforms. <br />- A political culture where the politicians essentially buy their elections with favors to their constituency is not stable in an enconomical crisis and has to be changed, by pressure from the outside or (preferrably) from the inside. <br />(to be continued)Gray, Germanynoreply@blogger.comtag:blogger.com,1999:blog-20893208381126879.post-3841014198778806652012-01-20T16:43:25.900+02:002012-01-20T16:43:25.900+02:00A splendid rant. But depressing as it is spot on.
...A splendid rant. But depressing as it is spot on.<br /><br />This struck me:<br /><br /><i>Neoclassical economics would argue that private investment would fill in the space left vacant by government. It would argue that consumer spending would increase anticipating lower taxes in the future.</i><br /><br />Here we have a perfect example of how austerity even fails the neoliberal test. Austerity has meant HIGHER taxes and those taxes are killing SMEs as much as collapsing demand. Thus austerity strangles the private sector and its prospect for entrepreneurial growth at the same time it slashes the public sector. It is an act of suicide.The Plumphttps://www.blogger.com/profile/09244528534476387323noreply@blogger.com