Here is a recent study on the subject and there are many others.
In view of this it is not hard to see whose interests are being represented by the ECB, whose only explicit charge is to keep inflation at a very low level which pretty much assures economic stagnation and wage-depressing levels of un- and under-employment. And they are certainly not doing it on behalf of workers, whatever Jerome's lofty rhetoric to the contrary might suggest. A lofty rhetoric which, when examined against the backdrop of what workers themselves actually want, is at the same time an expression of his own class interests as it is (to be charitable) patronizing of the interests of those his view purports to protect.
Adding in passing that working people tend to be much closer to, if not at, the SMIC, or have some other regularly indexed wage mechanism (mostly via regular negotiations in the framework of the various conventions collectives.) Small merchants and farmers are protected as weill, to the extent they pass on the impact to consumers via selling their wares at the higher prices. And while the RMI may not have a statutory indexing mechanism, as a matter of political course, it goes up every year, and it would, as a practical matter be extremely difficult (imagine the protests) if it were not raised in a given year. Same with the retraite de base.
On the other hand, cadres dirigeants, or those in the professions liberales, tend to be exposed, as are those who hold significant assets denominated in the currency being inflated.
Those are the people whose interests are being looked after by the ECB and well-meaning but (imho) mistaken partisans of tight money, tight fiscal policy and pay-as-you-go at any cost like Jerome here. Not workers, not by any means. Nil aon leigheas ar an ngra ach posadh
It's really disappointing to see you write this. In the long run, we're all dead. John Maynard Keynes
You purport to care about the workers and the least of our brothers and yet would rather dogmatically have a balanced budget than do something to help them. Forgive me if I find this curious, not to mention anti-worker. You provide criticism without constructive, specific and pragmatic proposals, call me an objective ally of Sarkozy one day and the neo-liberals another, and yet I'm the one out of line pointing out that your interests and your inflation preferences align well as the polling data show?
Unlike calling me an objective ally of Sarko, that's not ad hom, that's calling a duck a duck. Nil aon leigheas ar an ngra ach posadh
I've noted that debt-fuelled binges in recent economic experience have not helped but made things worse. Why would the 70s or the 90s be less relevant than the 30s? I've argued that the core problem is a lack of income, not a lack of consumption, so helping consumption is not likely to help. I've said where that income can come from (wage increases and tax increases).
I have provided arguments, proposals and have reacted to your arguments, but if you refuse to acknowledge this, I fail to see the point of continuing this conversation. I have called you an "objecitve ally" of people you don't like in response to you doing the same, to point out how stupid these arguments are.
And "class" arguments coming from you are laughable, and I think we should avoid the issue altogether, because it's plainly ridiculous.
As to my preferences, well I would certainly benefit from more bailouts of the financial sector, I would certainly benefit from lower taxes, I would certainly deal with inflation a lot easier than people with no ability to negotiate their wages or invest money in inflation-protected assets, I would certainly benefit from lower gas taxes, etc... Your claims of personal interest there are laughable. In the long run, we're all dead. John Maynard Keynes
That if there are no tax increases, you will do nothing.
Is this an accurate synopsis of your policy preferences? Because, over the past month or so, that's been the general theme. Nil aon leigheas ar an ngra ach posadh
And they are certainly not doing it on behalf of workers, whatever Jerome's lofty rhetoric to the contrary might suggest. A lofty rhetoric which, when examined against the backdrop of what workers themselves actually want, is at the same time an expression of his own class interests as it is (to be charitable) patronizing of the interests of those his view purports to protect.
redstar, as you read back through this discussion, you will likely find that there are quite esoteric disagreements on economic policy here. the comments regarding J do a disservice to the arguments you are trying to build. (to be charitable.) Fer chrissake, it's taken me a year to begin to digest some of Chris Cook's points. Could we tone down the rhetoric a bit... we're all trying to figure out how to react to the worst situation many of us will ever see. "Life shrinks or expands in proportion to one's courage." - Anaïs Nin
There are no governments (possible exception Spain on the periphery) who will do this until the next elections, Jerome knows this, therefore a pragmatic outcome of Jerome's principled opposition to "Anglo-Disease" is that we do nothing.
The likely result of this will be a severe, prolonged recession, if not the "d" word, in the Eurozone, with unemployment approaching 20% in many countries (and beyond in some, again thinking of Spain).
In my view and most moderately progressive economists (Krugman is often cited, as he was on this thread) this outcome, which as a logical result of Jerome's expressed policy preferences, this outcome, which will hurt workers now every bit as much as it did inthe 1930's, is potentially avoidable.
So actually, it's not esoteric, its a matter of one in five of your neighbors having a job at the end of 2010. Nil aon leigheas ar an ngra ach posadh
Since it looks that your preferences will be implemented, we'll be able to tell if I'm right or not, at least. In the long run, we're all dead. John Maynard Keynes
What are we fighting about, exactly? I've criticized the stimulus plans for various reasons (too much use of debt, too many tax cuts, too much focus on the financial sector, too much precipitation and too little oversight/thinking over) and especially one (the debt bit), and you seem to disagree with my criticism of the stimuli, but you are now telling me that your ideas are in fact NOT implemented.
so let's be precise: given that, is it fair to say that your position is that on balance the Sarkozy/Merkel plans are better than doing nothing?
My position on that is that I'm not convinced this is the case, because of the debt angle, and because of too much focus on consumption and the financial sector.
My position on what a stimulus plan should look like is not that different from yours, I think: tax increases on the rich and on oil, emergency spending on the poorest, investment in smart energy and transport infrastructure, more spending on social needs, education and healthcare (and adding, less police harassment of immigrants and subversives and less fearmongering). In the long run, we're all dead. John Maynard Keynes
So actually, it's not esoteric, its a matter of one in five of your neighbors having a job at the end of 2010.
That's rhetoric. What is esoteric is the complexity of the global economic condition. The fixes to prevent neighbors out of work demand strategic "out of the box" thinking. That means i will even have to use critical thinking of Krugman strategies, since he spends most of his time circulating in the world of the privileged Princeton elite.
You might as well attack me for spending more on travel, hotels and restaurants than most workers make in a year. There are no simple solutions to this crisis, other than views which haven't yet ever been tried. "Life shrinks or expands in proportion to one's courage." - Anaïs Nin
Absent such indexation, it is more protective for workers to focus on inflation. Indexation comes when you have strong unions, which is not quite what we have now.
It's easy to blame the Bundesbank for the 90s, but why don't you blame Kohl's decision to take in the Ost-mark at parity, the underlying cause of the Bundesbank's toughness, and the reason the whole East German industry became totally unable to be price competitive overnight - and indeed disappeared extremely quickly. That was a political choice to buy off unification by paying Eastern consumers a one off bonus - while destroying their jobs. In the long run, we're all dead. John Maynard Keynes
But this doesn't help explain why workers show a distinct preference for employment protection over protection of inflation. How to explain that?
Your neo-lib bogeymen haven't broken the indexation either, not even close and they can't right now either. But give Europe 20% unemployment again, and we'll see. That's what your policies will lead to.
Understood on the ost-mark conversion, that was a disaster. Which French President went along with that whole programme and used essentially political graft to get re-elected via illegal campaign financing? Nil aon leigheas ar an ngra ach posadh
- Jake If you only spend 20 minutes of the rest of your life on economics, go spend them here.
