Europeans on this date in history:

1737 - birth of Thomas Paine, English radical liberal philosopher, American and French revolutionary (d. 1809)

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Silence is golden

Romania, which under right-wing management pleased neocons not only by hosting a secret CIA prison but by introducing flat tax, too, was another non-Eurozone victim of the global financial crisis submitting to the IMF. Under populist President Traian Băsescu (re-elected in 2009 after a battle for power with parliament which he won conclusively) and his loyal PM Emil Boc (head of a minority government since Băsescu's re-election), an austerity policy was implemented. The IMF cure was credited with improved macroeconomic numbers last year, making Romania a poster boy for austerity advocates in other countries. That is, as long as the social destruction hidden by the macroeconomic numbers didn't manifest in visible dissent.

The resignation of a state secretary over a conflict regarding further reforms three weeks ago led to street protests and violent riots. With the background that, on one hand, the main government party already lost half of its supporters, on the other hand, the IMF's review was imminent, the government found itself in an impossible situation. So yesterday PM Boc and his ministers resigned, opening the way for a faux "expert government" headed by the former chief of the foreign intelligence service. The governing coalition also made nebulous promises about helping the poor hurt most by austerity.

Europeans on this date in history:

412 - birth of Proclus, Greek Philosopher (d. 485)

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If you go where the snowflakes fall

Bristol Pound Currency to Boost independent traders

The Euro is in trouble, the world's financial system is in turmoil. Is this the perfect time for cities to go it alone, and print their own money?

A group of independent traders in Bristol are launching their own currency, with the backing of the council and a credit union.

The "Bristol Pound" will be printed in notes, and also traded electronically.

There are other local currencies in the UK, but this is the first which can be used to pay local business taxes.

Ciaran Mundy, the director of the Bristol Pound, explained the concept behind the currency.

"Big companies just hoover up money from a local area," he told me.

"Money goes into their financial system and typically out into London and into the offshore sector."

Corporate challenge
But by definition, Bristol pounds must stay in the city. Spend a tenner in a Bristol bakery, and they must use it to pay their suppliers or staff. In turn, those companies will have to use the money within the local economy.

"We'll be driving more business to independent traders, and ensuring the diversity of our city, which is one of the things people love about Bristol," Mr Mundy said.

This is pretty much the Transition Money - eg the Lewes Pound - approach which is thoroughly neutered so as not to be a threat to the system.

The outcome of this model - where local currency is issued against reserves of the 'real thing' (hollow laugh) - is that no new money is created, but existing money is effectively pinned to an area.

front-paged by afew

Europeans on this date in history:

1478 - birth of Sir Thomas More, an English lawyer, social philosopher, statesman, author of the controversial book Utopia and noted Renaissance humanist. (d. 1535)

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High-class discourse, please

Musicians on this date in history:

1998 - death of Carl Wilson, Beach Boy (b. 1946)

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The Devil finds work for idle threads to do

Europeans on this date in history:

1885 - King Leopold II of the Belgians establishes the Congo as a personal possession

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Freezing comment thread

Media peddling of received wisdom likes to dwell on the Economy to Emulate du jour. Seeriouss People™ are reported or filmed saying they've crunched the numbers or just returned from a visit to such and such a place, and my word they're impressed. Journalists repeat the puffwords "successful, vibrant, surging, stellar, GDP growth, full employment..." In the 1980s, in the French media at least, it was Japan. Then Japan hit a rock and has since gone off the radar. In the Blair years, it was the UK England London. No more now. For long it was the "insolent good health" of the American economy, just when that economy was rotten to the core. Don't hear that any more. These days it's Germany.

So Nicolas Sarkozy went on six French TV channels last Sunday, with much pomp and obsequious journalists asking predetermined questions, to say he was going to make France imitate Germany. Raise VAT, reduce employers' payroll contributions, put an end to the 35-hour working week, weaken collective bargaining even more than in Germany with enterprise-by-enterprise renegotiation of hours and pay (more of one and less of the other). As usual with Sarko, it was smoke and mirrors, since he was announcing as decisions on his part measures that would be applied after the presidential elections... when he stands a good chance of being an ex-president, and the measures of not being applied. But, through the smoke, it's an image that he wants to project of the tough guy telling it like it is, and "like it is" is TINA - Germany is right, we have no choice but to copy the Germans.

If anyone wonders why any other eurozone country, France in this case, should want to copy Germany, Sarkozian smoke billows. Too much emphasis on German exports might sail close to the dangerous waters of the effect of those exports on the eurozone. So it's the success of the German economy - GDP growth, full employment - that is touted.

Europeans on this date in history:

1722 - Russian tsar Peter The Great decrees the Table of Ranks, a key reform abolishing the privileged position of boyars by establishing a civil bureaucracy only under the tsar

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Early Friday chat

Europeans on this date in history:

1937 - birth of "Billy" Eduard Albert Meier , a citizen of Switzerland who claims to be a UFO contactee and prophet.

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Thread, Thursday, Open

Bloomberg invited Steve Keen to write an 800-word feature on "The Future of Economics" for the World Economic Forum, which started on Wednesday, January 25 2012 in Davos. Perhaps the senior editor thought this paper was too challenging. I haven't been able to find this paper either at Bloomberg News' site or the World Economic Forum web site to confirm that it was distributed to participants, but it would be a high profile appearance for TARA if it were. The challenge is to the orthodoxy rather than to the intellect.

For its entire history, macroeconomics has been dominated by mathematical models that ignore the existence of money, debt and banking, and that perceive the economy's movement through time as transitions from one state of equilibrium to another.

At any point in history, these would be heroic assumptions. Could it really be true that models without either money or instability are provably superior at predicting the economy's future course than models in which money and banking exist, and in which the model economy can be out of equilibrium? If not, is it the case then that such models are simply too difficult to construct--that the best we can do is pretend that the economy doesn't have banks or money, and that it's always in equilibrium, even if we know these assumptions are false?

Europeans on this date in history:

1922 - James Joyce publishes Ulysses

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For your bloviating enjoyment