The reason it didn't work is because, in that scenario, costs weren't reduced commensurately. The reason why we work so much for so little is because there's someone taking a big chunk: the company.
Unless you eliminate the profit motive the money always just floats to the top.
Nothing is keeping you from running a business on proper socialist precepts.
I wonder what most socialists think the typical profit margin is in an industry where there's significant competition is, as a percentage...
Comrade Anklebiter, can you answer that one?
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Nothing is keeping you from running a business on proper socialist precepts.I wonder what most socialists think the typical profit margin is in an industry where there's significant competition is, as a percentage...
Comrade Anklebiter, can you answer that one?
Other than me. That's the arrogance of your perspective. I don't want to run a business. And it's the idea that if you don't want to run a business you don't deserve to live comfortably that I object to.
Profit margin =/= what the boss gets paid. I've worked for small businesses nearly all my life now, with my current job one of a couple of exceptions. At my second job it was well known that the owner pulled down easily 200k a year (well, between him and his wife, who was on the books as a full time employee but I didn't see her once in 2 years working there). Back when everyone working there was being paid 6.25/hr and the managers were making like 8 and no benefits. Profit margins were razor thin, it was a small independently owned supermarket. But 2% of 10 million a year is a lot of cash.
My current job? I know for a fact that my employer (big faceless corp) charges roughly 4 times what they pay me to farm my services out. If they paid us about twice what we make there they'd still have a comfortable profit, and happy, loyal employees.
I don't hate all business, and I've had bosses that deserve every penny they earn, but the world would be a better place if people weren't such greedy f%@#s and shared some of that enormous pie. The pie that I baked, with fruit I picked, they should get 90% of it just because we used their oven?
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So..where should they be? That's sounding a bit intolerant, and I don't think you mean to.
Yeah, I could use a course in anger management right now... after receiving my tax advice forecast for next year, which bites me.
Still does not excuse them for allowing my genuine examples to happen, nor does it excuse the EU for waiting until our back is to the wall for acting.
We should have done this 5 years ago, and it would have been way less painful. Courage and politics...
Would have been really better ten years ago, when economy was doing fine and we had money to spend.
Cutting down on expenses during an ecoomic slouch is a sure way to make it last forever. Ask the japanese : they listened to the IMF and still haven't recovered from the 1990 crash...
It seems clear to me that the solution is reducing the work week to something like 32 or 28 would be a rational course of action.
That is the theory that was tried with the 35 hours in France.
The practice quickly became in a lot of places : yeah, right, so you are PAID 35H, and you WORK 45H to compensate for all the extra days off that you get.Heck, we get regular reminders that it is "forbidden by law to work more than 48h /week.
Well, it's not the common practice, by far. In most places, the system do work. It gets clunky in places like hospitals, because they need to be continuously staffed, but in most businesses the main result was a rise in productivity (doing the same job in less time) and some hirings (less than expected, but still good to take).
It seems that getting a full family life and some holidays is good for long term productivity. Amazing, heh ?
My (big) company has instituted the 35 hours work week back en 1986 ; when it became mandatory, unions negociated a little extra week of paid holidays. And we are still doing fine, with a multibillion balance sheet.
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Nothing is keeping you from running a business on proper socialist precepts.
This is a framing error. Modern conservatives have been working hard to redefine 'capitalism' along nonsensical Ayn Rand objectivist/right libertarian lines where any sort of concession to workers or the general public is 'socialism'.
The reality is that the United States and every other country run on capitalism have ALWAYS supported a mix of 'fight your way to the top' and 'but do not step on others to get there'... since before the concept of 'socialism' even existed. Anti-trust legislation, labor laws (e.g. hours, working conditions, child labor), union laws, et cetera are all 'regulations' which 'inhibit business growth' and thus 'socialism' by the conservative re-definition... yet without them true capitalism could not exist.
Promoting just the 'job creators' and enriching them at the expense of their workers is not 'capitalism', but rather feudalism. Which is also exactly what socialism inevitably turns in to (look at the history of socialism in the USSR, China, Cuba... the party bosses lived like kings, those they favored like nobility, and everyone else like peasants). The same thing nearly happened with the factory towns and sweat shops of early capitalism and has been drifting that way again for the past 40 years as conservatives have recast more and more public protections as 'socialism'.
In short, those striving to make 'capitalism' an ever purer opposite of socialism are instead creating a mirror image of it. Whether you get there by socialist party bosses 'sharing' more of the wealth with themselves than everyone else or objectivist plutocrats 'earning' 99% of the profit generated by their workers the result is the same... and it isn't capitalism. True capitalism requires a balance between allowing individuals to achieve great success and preventing them from doing so at the expense of many others.
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What do Europeans think of the "Estonian miracle"
I realize that the UK's Global Post is the "pro austerity" paper. I also realize that Estonia, at 1.3 million people (less than the metro area I live in in the US) can do things that are politically impossible in larger states.
On the other hand, I look at economic news out of Greece and wonder if the voters there never took elementary school arithmetic, or can balance a checkbook.
I also wonder how it's going to fare as we progress through the Great Disintermediation reshaping human productivity and global economics.
It is "easy" to do. Enter in a common market, with wages that are lower than the average of the other nations in that common market. You get a few years of growth. The problem start after the benefit of joining the common market has ended, either because your wages have rise to the level of the other nations or the other nations real wages have reduced.
If you have used well the money that your nation earned you are in a good position, if you have squandered it you are in trouble.It is more or less Italy problem. We had 10 years in which the cost of borrowing money for the state was low. Instead of using that time to reduce our debit we (our government) squandered it into designing pharaonic projects that were never realized. A lot of money that was funnelled to consulting firms that were friends to the government members and then to foreign bank accounts.
Similarly most industries didn't used the ease of getting low cost loans to restructure and get an higher production or lower their cost, they instead decided to play the financial market, as it "give better returns than industry".
The problem is that if you let the industry decay after a time your financial market is a soap bubble. A hit with a pin and it explode.
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When Churchill suggested the whole thing there was this whole idea about not invading each other and engaging in massive wars which drag in the rest of the world and kill absurd amounts of people.
That seems to have worked out pretty well.
Well... Except that they've introduce a currency union which is exacerbating the issues of recession to the extent that several parts are doing extremely badly. We also have the rise of extremism, largely fuelled by the economic crisis. I agree that the EEC/EU has been very successful at fostering trade links and thereby reducing the likelihood of European war. But I don't really see how trapping entire countries in economic death-spirals is really conducive to peace - it wasn't in the 1930s. Arguably, a bit less economic integration and meddling with Social Chapters and a bit more free trade (in line with the Single Market) and I doubt we would be in this situation. It might not be a bed of roses but the automatic stabilisers of currency devaluation would have made things probably a lot easier for Southern Europe.
More generally, I'm thinking that the whole situation is incredibly complex because we've spent years living on debt, encouraged by absurd bankers who got rich from juggling debt and politicians who got elected by promising wands of CSW when they could only afford CLW. Yet ultimately we're responsible for our own debt, and our own idiocy.
So, basically, we're indebted due to our own knuckleheaded idiocy and our venal, corrupt, self-serving institutions.
Institutional reforms and a massive transformation of social attitudes would be enough if we weren't already deeply in debt.
As it is... who knows?
The macroeconomic set-up was such that it encouraged people to take out these loans and for banks to lend. Anyone who took out a loan they subsequently couldn't repay is arguable at least - at least - as culpable. And the euro encouraged that by pretending that the risk - i.e. the price - of credit in Greece, Italy and Spain was exactly the same as Germany. And the system was poorly developed so that when the crisis blew up, there were no ways to address it.
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Well, my feeble understanding of all of this is that if Greece were outside of the EU it would be able to devalue its currency to lessen its debts. (I believe that's what the Greek Communist Party ran on and got 8% of the vote.) Oh, but the German banks might lose some money? Oh, I'm crying.
Actually, devaluing would increase their debts. What devaluing would do is make them much more competitive as a place to do business as their costs would fall in international terms, and thereby (it is hoped) increase economic activity. But devaluation would probably result in their debt effectively doubling (as it would still be denominated in euros, but they'd only have drachmas to pay it with) and therefore almost certainly lead to default. Default might be a bad idea as they might not be able to actually run the government as tax receipts are too low, and without being able to borrow they might run out of money (no money for hospitals, police, public sector payroll and so on). So its a Scylla and Charibdis thing.
In truth, I don't think positively about many French politicians when I think about it.Travailleurs, travailleuses! On vous ment, on vous spolie!You do know one of my sources of inspiration for this character, right ? :)
I did not know she had worldwide celebrity.
I have, alas, never seen that avatar before, but I did steal Galt Patriot's schtick, hope you don't mind.
Vive le Galt!
Also, although I've heard of her (and discovered she had a semi-famous puppet caricature on French television from wikipedia), I doubt she's a household name in most of the US. More's the pity...
Well, my feeble understanding of all of this is that if Greece were outside of the EU it would be able to devalue its currency to lessen its debts. (I believe that's what the Greek Communist Party ran on and got 8% of the vote.) Oh, but the German banks might lose some money? Oh, I'm crying.Actually, devaluing would increase their debts. What devaluing would do is make them much more competitive as a place to do business as their costs would fall in international terms, and thereby (it is hoped) increase economic activity. But devaluation would probably result in their debt effectively doubling (as it would still be denominated in euros, but they'd only have drachmas to pay it with) and therefore almost certainly lead to default. Default might be a bad idea as they might not be able to actually run the government as tax receipts are too low, and without being able to borrow they might run out of money (no money for hospitals, police, public sector payroll and so on). So its a Scylla and Charibdis thing.
Hmm. Well, I'm way out of element. Citizen Watson, Comrade le Couard, care to comment?
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In truth, I don't think positively about many French politicians when I think about it.Travailleurs, travailleuses! On vous ment, on vous spolie!
OMG. I thank the gods that I was not drinking anything when I read that :-)
Every economist I've ever heard of agrees that in a depressed economy consumer and business spending are both decreased from pre-depression levels. Basically, people spend less because they are worried about the financial situation and businesses spend less to produce goods because people are buying less. Where economists disagree is on the effects of >governments< spending less.
If, during the recession, the government also spends less, aka 'austerity', that means total spending is down (since consumer, business, and government spending are ALL down). Which means that total earnings are also down... because every euro (or whatever unit of currency) someone earns was spending by someone else. If total earnings are down then either a lot of people have to take pay cuts, which they aren't about to agree to in a depressed economy, OR fewer people have to be working.
Ergo, during a depression, less government spending = less earnings for the population = more unemployment. The more the government cuts spending the greater the unemployment. It is a simple and inescapable progression which has been proven true by history over and over again.
The 'austerity' doctrine claiming that cutting government spending will so greatly increase "confidence" in the economy's FUTURE performance that people will ignore the IMMEDIATE economic downside and go out and start spending more, thus raising the country out of depression, is and always has been INSANE. People who lose their jobs or see others losing their jobs ARE NOT going to be filled with such confidence in the economy that they are willing to spend as if there was nothing to worry about.
Austerity is a wise doctrine... during boom times. When the economy is humming along well governments should be doing everything in their power to cut spending and tighten regulations... the exact opposite of what was actually done during the boom years preceding the current collapse. Too many modern economists live in an upside down fantasy land which ignores the lessons of...
This take on things was valid in older simpler times, when businesses were stable things.
Nowadays, the businesses stop spending even before the consumers do. The cycle is in fact reversed : the businesses stop spending because they are afraid of what they will face tomorrow (ie, the unknown). They stop hiring people or even cut jobs, they stop spending money on anything not compulsory. Of course, this kills all their subcontractors and suppliers' business (especially the small ones). In the end, people have less money to spend. And the cycle goes on as described. Except that governments do not have that much money. They spent what they had on saving the banks a few years ago. To get more money to throw in the system, they need the trust of the financial markets. Which are also the stakeholders of the businesses.
Thus in the end, the governments have to do what will allay the fears of the financial markets and the businesses, so that they can get more money to spend AND the businesses start spending their money again.
Of course, the problem is that NO ONE really knows what will make the financial markets feel safer. In the end, the governments act based on what they imagine the financial markets expect. In other words, they act based on the doctrine they have faith in. It seems that, for the moment, the doctrine they believe will satisfy the financial markets is Austerity.
If it ends up not working, they will try something else (the two favorites being "More of the same" and "The exact opposite").
Arguably, a bit less economic integration and meddling with Social Chapters and a bit more free trade (in line with the Single Market) and I doubt we would be in this situation. It might not be a bed of roses but the automatic stabilisers of currency devaluation would have made things probably a lot easier for Southern Europe.
Aubrey, I must admit it's the first time I have heard the EU described as putting too many obstacles to free trade. I have heard the reverse far more often from people in several member countries.
The reason it didn't work is because, in that scenario, costs weren't reduced commensurately. The reason why we work so much for so little is because there's someone taking a big chunk: the company.
Unless you eliminate the profit motive the money always just floats to the top.
Nothing is keeping you from running a business on proper socialist precepts.
I wonder what most socialists think the typical profit margin is in an industry where there's significant competition is, as a percentage...
Comrade Anklebiter, can you answer that one?
Not very high, I'd guess.
UPS, for example, is famous (in some circles) for spending 2/3rds of its income on labor. I have no idea how much their profit margins are, but I do know they pull in a cool $12 billion in profits every year.
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Thus in the end, the governments have to do what will allay the fears of the financial markets and the businesses, so that they can get more money to spend AND the businesses start spending their money again.
Financial market 'fears' can certainly contribute to economic conditions, but consumer demand remains the primary control knob. Too often financial markets are used as a false boogeyman... as in, 'if the Obama stimulus passes the financial markets ('bond vigilantes') will punish us for the high debt with out of control high inflation'. Stimulus passed... inflation is shockingly low.
The truth is that the reason predicting what needs to be done to give the markets and the business 'job creators' enough 'confidence' to start producing again so seldom works out is that the markets and businesses do NOT drive the economy. Consumer demand drives the economy. If people want to buy something and are willing to pay, businesses are NOT going to say, 'nope, I lack confidence right now so I'm not going to make any of those widgets you want to buy'. If one of them did then their competitors would be happy to take the profits. The whole 'supply side' concept lacks any logical integrity... if there is demand then someone WILL provide the supply.
Where the financial markets really have an impact is when they create a situation where consumers suddenly have more debt and fewer assets than they thought they did (e.g. mortgage backed securities bubble goes pop) and there is a resulting sharp drop in >consumer< confidence and demand.
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CBDunkerson, there is another factor too. The "business job creators" are primarily interested in profit. If they can get the same profit employing 30 persons and selling 3.000 widgets at price X they have no reason to hire 30 more persons and invest money to sell 10.000 widgets at 2/3 of X. They will do that only if hiring the people and investing the money will increase their profit more than investing the same money in the financial market without creating any new job.
That is one of the big problems, most businesses look the financial market returns and say "if I do the right investment I will get a lot of money, more than increasing my production", so they invest there and don't create new jobs. Short-sighted as it create the current situation in the long run, but most managers think to the next fiscal year, not about long term sustainability. After all they can always retire with a golden parachute.
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That is one of the big problems, most businesses look the financial market returns and say "if I do the right investment I will get a lot of money, more than increasing my production", so they invest there and don't create new jobs. Short-sighted as it create the current situation in the long run, but most managers think to the next fiscal year, not about long term sustainability. After all they can always retire with a golden parachute.This is a lot of the problem. It's more tempting to make huge profits on the latest market bubble than to make any long term investments in your own business. Tax policy helps this. Low rates make it easier to take money out of the business and play with it in the market casino.
Exactly, one of the jobs of the governments is to encourage long term investments for the growth of the country, but most government think at most till the next election, no further.
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In truth, I don't think positively about many French politicians when I think about it.Travailleurs, travailleuses! On vous ment, on vous spolie!You do know one of my sources of inspiration for this character, right ? :)
I did not know she had worldwide celebrity.
I have, alas, never seen that avatar before, but I did steal Galt Patriot's schtick, hope you don't mind.
Vive le Galt!
Also, although I've heard of her (and discovered she had a semi-famous puppet caricature on French television from wikipedia), I doubt she's a household name in most of the US. More's the pity...
That's quite true. She's retired from public life now, and at the same time she was both the most caricatural politician we had (she never had really any chances at all), yet she was a tenure of every election, and some people felt compelled to vote for her, just so she had the symbolic 2%of votes where she did not pay her expenses out of her pockets.
And she had that famous opening sentence that you mentioned, which has become something of a joke (no disrespect for her intended).
So yes, She was one of the inspirations for Andrée.
The others being :
- One very religious friend, that I almost quite dated at some point...
- The vegetarian eco-activist girl from "Black Sheep" (Experience I believe)
- Other former girlfriends.
- The masculine version of Andrée (Armand) that I created for Pathfinder society initially
- Dilbert's "secretary with a crossbow"
Best,
Well, I'm glad I made at least two posters chuckle.
Travailleurs, travailleuses! On vous ment, on vous spolie!
Vive le Galt!!
Hmm. Well, I'm way out of element. Citizen Watson, Comrade le Couard, care to comment?Well, my feeble understanding of all of this is that if Greece were outside of the EU it would be able to devalue its currency to lessen its debts. (I believe that's what the Greek Communist Party ran on and got 8% of the vote.) Oh, but the German banks might lose some money? Oh, I'm crying.Actually, devaluing would increase their debts. What devaluing would do is make them much more competitive as a place to do business as their costs would fall in international terms, and thereby (it is hoped) increase economic activity. But devaluation would probably result in their debt effectively doubling (as it would still be denominated in euros, but they'd only have drachmas to pay it with) and therefore almost certainly lead to default. Default might be a bad idea as they might not be able to actually run the government as tax receipts are too low, and without being able to borrow they might run out of money (no money for hospitals, police, public sector payroll and so on). So its a Scylla and Charibdis thing.
Well, Aubrey is spot on : if Greece went back to the drachma, its euro-based (or dollar-based, etc;) wouldn't magically transmute to a drachma-based debt. You usually can trust Aubrey on financial matters.
Another fact to take into account is that no legal mechanism was planned to exit the euro. It was meant as a one-way trip. So most of the legal experts think that Greece would have to exit the EU entirely to go back to the drachma, which would be an even greater disaster for its fragile economy (Greece does mots of its commerce with us).
So we are stuck with Greece, and they are stuck with us. On the good side of things, its GNP and debt are really small potatoes on an european scale. On the other hand, if Spain was to fail... It's a good thing that Germany eventually accepted to let the ECB support them by buying their debt (which has roughly the same effect as printing money), as every other central bank of the world do.
That is one of the big problems, most businesses look the financial market returns and say "if I do the right investment I will get a lot of money, more than increasing my production", so they invest there and don't create new jobs. Short-sighted as it create the current situation in the long run, but most managers think to the next fiscal year, not about long term sustainability. After all they can always retire with a golden parachute.This is a lot of the problem. It's more tempting to make huge profits on the latest market bubble than to make any long term investments in your own business. Tax policy helps this. Low rates make it easier to take money out of the business and play with it in the market casino.
Exactly, one of the jobs of the governments is to encourage long term investments for the growth of the country, but most government think at most till the next election, no further.
Short term planning is one of the main roots of our problems. It's endemic both in the private and public sectors.
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Aubrey, I must admit it's the first time I have heard the EU described as putting too many obstacles to free trade. I have heard the reverse far more often from people in several member countries.
Depends who you ask. Certainly, you have the Single Market which, for the trade of goods (though not services) within the EC, has fostered trade. However, you also have a lot of stuff like the Social Chapter, which imposes significant costs on business, and the Common Agricultural Policy which is very protectionist indeed.
Well, Aubrey is spot on : if Greece went back to the drachma, its euro-based (or dollar-based, etc;) wouldn't magically transmute to a drachma-based debt. You usually can trust Aubrey on financial matters.
I don't trust anybody!
But, yeah, all this stuff is beyond me. "True, devaluation wouldn’t reduce the debt burden. But it would reduce the macroeconomic costs of fiscal austerity....Now, if Greece had its own currency, it could try to offset this contraction with an expansionary monetary policy — including a devaluation to gain export competitiveness. As long as it’s in the euro, however, Greece can do nothing to limit the macroeconomic costs of fiscal contraction."
It all sounds like Greek to me!
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Let me explain it in two words that you'll understand, Comrade:
Greek Fire.
So simple, a goblin can get it.
And burn it.
Vive le Galt!
Down with Salt!
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Banks are of course defending their assets - which are a collective of the savings of about everyone else in Europe.
I hear though that a lot of wealthy Greek citizens have converted their euros in cash in other countries. Notably Australia.
My short argument is why should we pay for this out of our pockets ?
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Greece's national federal budget is ~€108b annually. So, while this may or may not be a wasteful project, it's nothing compared to the fact that Greece's GDP has dropped more than 12% in the last three years. Frankly, these sorts of investments in infrastructure would be what Greece should do to turn their economy around, if they weren't at the mercy of the ECB.
Also, as I hear, a lot of Greek citizens are in need of USEFUL infrastructure. Like roads, public transports, and such.
Banks are of course defending their assets - which are a collective of the savings of about everyone else in Europe.
I hear though that a lot of wealthy Greek citizens have converted their euros in cash in other countries. Notably Australia.
My short argument is why should we pay for this out of our pockets ?
Because you are next, heh ?
If Greece comes down, there is a strong possibility than "markets" (big investors) will have even less trust in Spain/Italy/Ireland (take your pick), who will have more trouble to boorow money, who will then crash down in turn, etc. It's called a downward spiral, or a self-fulfilling prophecy if you want. And France and Germany are not so far behind the next corner, are all those countries are our neighbours, customers, parteners, investors, etc.
Hey, Eurodudes!
There's a bunch of Yanks talking about this stuff over in the Third Party threa, fyi.
Anyway, this sounds like some complicated shiznit. But, uh,
Down with Salt!
Greek fire for everybody!
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My short argument is why should we pay for this out of our pockets ?Depression is a communicable disease. Even if it wasn't a matter of justice, as Germany and France have seen two decades of prosperity from what was basically a wealth transfer from the periphery to the central nations, letting Greece and Italy and Iceland and Ireland and Spain default and collapse spreads to other countries. Trade dries up, banks fold, refugees seek refuge, unrest and extremism spread.
Ask yourself why you would let your neighbor's house burn, regardless of whose fault the fire is.
The problem is that it is very easy to say this from across the Atlantic, especially as it doesn't take into account (a) the politics of the situation and (b) moral hazard. We are where we are now, so clearly something has to be done. But if your neighbours house is burning because he was smoking in bed while drunk, you won't be sympathetic. If you are then told your household insurance premium is going up because you are lumped with this stupidity, you'll be annoyed. And it is debatable actually whether bailing out these countries is so great when they display their gratitude by depicting the Germans, who are mainly paying for this, as WW2 Nazis. There is an argument for cutting them off - nobody can actually predict the outcome of the break-up of the euro, it might not be as bad for the creditor nation banks as might be thought, certainly those countries can raise the taxes to recapitalise their banks, and devaluation and default might be a better option for the debtors. It depends how much, as a voter in Germany, you really want to pay your taxes to bail out the Greeks, Italians, Spaniards and so on. And that's before we get to the issue of how, if you just bail out flagrant nations that waste their resources, they'll actually gain the discipline to reform. The arguments are not as black and white as you paint them. A bailout might be expedient, but is it actually moral?
As it happens, I agree that it is probably a good idea to continue the bailouts. But given the poor political response from Europe's leaders, they do not seem able to take the necessary actions to nip this in the bud once and for all. All this time it just gets worse, and more expensive, as we lurch from crisis to crisis. There may come a point where throwing in the towel actually is the better option, at least on a national level for some countries.
To me one of the great problems here on Europe is the leadership. We have that important economic union, but don't have the same kind of politic union, and that, to my point of view, is one of the reasons of our problems. Either we return economic power to individual states, o we advance to a greater political union. But this situation is a burocratic chaos.
And the people in Spain, Greece or Portugal don't gain one Euro of all that money; all goes to the Banks, that need to return the debts to another banks, normally on France or Germany. In the end, all that is only going to make people on the South poorer just to save the banks on France and Germany from loosing money. For me, that's the reason of all the social unrest on the European south.
It's like being in a Home Owner's Association. It seems like a good idea at the time, the oweners working under mutually understood ideas and goals to keep all of their properties in as much value as possible.
The problem comes in when a new owner, or ever worse a current one decides they just don't give a s%#+. He lets his house get out of order, and everyone else's property value drops. So now, the rest of the HOA has to take measures, either to legally force the owner to cooperate, or do the work themselves to maintain his property, while he continues to not give a s~%% and your property values continues to plummet. OR you can hire a lawyer and dissolve the HOA, and go back to every man for himself. It may not be the best solution, but then at least you aren't legally tied to the guy who doesn't give a s~#@ any longer.
Incentives go a long ways towards preventing people from not giving a s@&#.
We need to get away from rulership of the rich. We have the internet to unite us, so why not share experiences and gain news from people "on the ground" as opposed to news sources. We KNOW, globally that we are lied to by our governments. Things like this forum needs to become the norm (people the world over having these conversations) and not the exception.
It's like being in a Home Owner's Association. It seems like a good idea at the time, the oweners working under mutually understood ideas and goals to keep all of their properties in as much value as possible.
The problem comes in when a new owner, or ever worse a current one decides they just don't give a s&&#. He lets his house get out of order, and everyone else's property value drops. So now, the rest of the HOA has to take measures, either to legally force the owner to cooperate, or do the work themselves to maintain his property, while he continues to not give a s#!@ and your property values continues to plummet. OR you can hire a lawyer and dissolve the HOA, and go back to every man for himself. It may not be the best solution, but then at least you aren't legally tied to the guy who doesn't give a s*%% any longer.
And Greece decided to hire a guy to replace the siding, but the guy cut corners and when the wind blew it all came off.
And then apparently decided to build a race track in its backyard instead of paying its dues.
And then apparently decided to build a race track in its backyard instead of paying its dues.
Yes, but it was a lego racetrack and cost $30. As long as we're keeping with an analogy of scale...
Perceptions are important.
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All of you forget one fact about Greece :
This is the most pious country in Europe, because ... the church is exempt of ANY taxes.- All you have to do is build a 5ft chapel in your otherwise unlimited terrain, and you are exempt from land tax as your home is now a religious site.
- If you are a single girl, and your father dies before you marry, you will have a pension of some 1200 € (not sure exact figure). So Greek girls don't marry. 1200 € is a fortune there.
- The Greek tax administration cut into fake pensions on some islands which had a 30 % rate of blind people. The guys cut off from the pension staged a protest.We made an error getting those guys into Europe, and we are making an error keeping them.
Weekly? Monthly? Annually?
I'd really like to see a source for this.
As opposed to Bowie who refused honors. Twice.Bowie never refused honors.
However, he did twice refuse honours.
O U
But back to The Rolling Stones and European socialism...
Vive le Galt!
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The problem is that it is very easy to say this from across the Atlantic, especially as it doesn't take into account (a) the politics of the situation and (b) moral hazard. [...] And that's before we get to the issue of how, if you just bail out flagrant nations that waste their resources, they'll actually gain the discipline to reform.Spain and Ireland were running surpluses. Spain's public debt was smaller than Germany's in both absolute numbers and relative to their GDP. Spain is slashing government spending and it is making things worse. What lesson are they to take from this? It's justifiable to be angry at Greek government for cooking their books and having a completely incompetent tax collection apparatus, but at this point there is no way to justify the woes of all of the periphery nations as somehow their own fault. The demanded austerity programs are actively making people's lives worse in Spain, Italy, Portugal, and, yes, Greece, while also aggravating the underlying problems that cause the need for bailouts in the first place.
The ECB is demanding that the periphery nations make their situation worse, and offering only the minimum support to prevent a full-blown collapse. They are fighting the fire with gasoline, and you are complaining about the cost of the gasoline.
You are making the same basic error that has been made over and over that the problem is about public debt. It isn't, it is about aggregate debt. Yes, Spain and Ireland had low public debts - but there was still massive borrowing across the economy, as witnessed by the building booms in both countries (funded primarily privately for speculative purposes). There is more to having a disciplined economy than low public sector debt - these countries also ran significant current account deficits, which was basically private spending on imports (capital and goods) funded by private debt. In other words, they were borrowing incontinently to buy stuff they couldn't afford from surplus countries like China and Germany due to low productivity at home. That's not discipline. And if you borrow too much, and then discover you can't afford the bill, it will likely impact on your lifestyle as you point out - but that's a necessary corrective, I would suggest.
To some extent, the austerity isn't working to the extent it focusses on public sector debt alone - it's the cure for the wrong diagnosis. What they need is supply-side reform. But the euro simply isn't going to work until there is political agreement on transfers across the EU, in times of trouble such as these, and that is never going to happen as the electorates who would be doing the transferring are alive the the issue of moral hazard and don't see why they should pay for others' mistakes. And these debtor countries need to get their houses in order eventually - the recent lull in euro troubles has been used for politicians to just dawdle again and hope "things work out", suggesting that transfers would probably be squandered anyway under the current climate.
Britain is of course in a similar situation. But we control our own monetary policy - which largely involves printing money to fund public debt while the situation blows over. That is the key advantage of being outside the euro and the key weakness of all euro members.
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I'm thinking that when Russia privatizes the trillions of carats in hard diamonds it has in an impact crater in Russia and gives ownership to a single company (in trade for future payments annually in 50% of all future profits from the sale of those diamonds)- that that company will be able to buy up Europe and America and build a Privatized Northern Hemisphere.