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Furthermore prior to the start of the last crisis some countries - sweden, canada - had a surplus years in a row.

Sweden is running a surplus by means of a trade surplus, sustained by keeping wages from following productivity. It is one way to slowly race the working class to the bottom, but it can not be ran by many contestants at the same time as someone has to have a trade deficit for someone else to have a trade surplus.

A vote for PES is a vote for EPP! A vote for EPP is a vote for PES! Support the coalition, vote EPP-PES in 2009!

by A swedish kind of death on Tue Aug 16th, 2011 at 10:35:29 AM EST
[ Parent ]
[Export to] Mars, bitches!

Economics is politics by other means
by Migeru (migeru at eurotrib dot com) on Tue Aug 16th, 2011 at 10:46:58 AM EST
[ Parent ]
And just like in Germany, the main culprits are the labour unions, who accept very low salary increases just because their members have recieved big increases in disposable income due to tax cuts aimed at the middle class. I certainly support these tax cuts, but I don't support our useless labour unions rolling over on their backs. With an union membership rate of 80%, they don't need to do that.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Fri Aug 19th, 2011 at 05:56:48 AM EST
[ Parent ]
I doubt that. They probably accept low wage rises because their leadership's loyalty is more to the party than to its members.

For example former DGB chairman

Dieter Schulte (Gewerkschafter) - Wikipedia

In die Medien kam der Sozialdemokrat Schulte zuletzt im September 2005, als er den IG-Metall-Vorsitzenden Jürgen Peters wegen dessen versteckter Wahlempfehlung für die Linkspartei.PDS in der Hannoverschen Allgemeinen Zeitung angriff. Dort hatte Peters spekuliert, es könne ,,am 18. September eine Mehrheit links von der Mitte geben." Schulte hielt dem entgegen: ,,Peters ist auf einem Irrweg. Gewerkschaften müssen ihre Positionen in die regierungswilligen Parteien tragen, statt eine Gruppe von Versprengten zu unterstützen, die lediglich auf der Hinterbank des Parlaments ideologische Schlachten austragen will. Ich habe erhebliche Zweifel, dass Peters mit diesem Kurs für die Mehrheit der IG Metall sprich

Now leading a party think tank and hating on the Left.

Von überall könnte das Volk, Urbrut alles Undemokratischen, Zelle des Terrors, über die gewählten Hüter von Wachstum und WohlstandŽ kommen. - flatter

by generic on Fri Aug 19th, 2011 at 06:34:39 AM EST
[ Parent ]
As if on cue: Toxo y Méndez ofrecen más años de moderación salarial (ElPais.com)
Los sindicatos piden por carta a Zapatero medidas para contener beneficios y una regulación temporal de precios
[The leaders of the Communist CCOO union,] Toxo and [Socialist Union UGT] Méndez offer more years of wage restraint
The [two largest] unions in a letter to ZP ast for measures to contain profits and a temporary regulation of prices


Economics is politics by other means
by Migeru (migeru at eurotrib dot com) on Fri Aug 19th, 2011 at 06:44:55 AM EST
[ Parent ]
These reminds me of a policy taken by the soc dems here in Sweden back in 1990. All salaries, prices, dividends and so on were frozen. It wasn't very popular or successful back then. But the wage restraint of the responsible labour unions during the crisis made certain sense then, during a national fiscal crisis, austerity, floating exchange rate and an export boom. Today it makes no sense at all... except in the periphery countries which do not have competitive wages compared to either the core or RoW! So I actually applaud periphery labour unions in showing wage restraint. The periphery countries had wage inflation much faster than productivity growth, which taken together with the fixed exchange rate of the euro, is what got us here in the first place.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Fri Aug 19th, 2011 at 11:46:11 AM EST
[ Parent ]
Actually they didn't. They had profit inflation, and the core had wage deflation.

talos dug out some stats on that subject back when.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri Aug 19th, 2011 at 11:48:43 AM EST
[ Parent ]
If that's correct, the periphery countries should be able to export themselves out of their problems. Well, they can't.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Fri Aug 19th, 2011 at 11:58:08 AM EST
[ Parent ]
the periphery countries which do not have competitive wages compared to either the core or RoW!

But that is because of competitive wage deflation in the core and the RoW, not because of wage inflation.

Though this begs the question, wage deflation/inflation relative to what?

Economics is politics by other means

by Migeru (migeru at eurotrib dot com) on Fri Aug 19th, 2011 at 12:05:37 PM EST
[ Parent ]
Relative to productivity, of course.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri Aug 19th, 2011 at 12:16:40 PM EST
[ Parent ]
The periphery countries had wage inflation much faster than productivity growth, which taken together with the fixed exchange rate of the euro, is what got us here in the first place.

Um, what got us here in the first place was that the periphery financed its consumption though lending from the core. There was a massive private debt and asset price bubble, not a gross increase in profits and wages in the periphery. And a lot of inflation, with all this debt and asset price money slushing around.

Economics is politics by other means

by Migeru (migeru at eurotrib dot com) on Fri Aug 19th, 2011 at 12:09:00 PM EST
[ Parent ]
Of the three relevant labour unions in Sweden, the two smaller ones are politically independent while the big and strong one is essentially a part of the opposition Social democratic party. Or rather, the social democratic party is more like the political wing of the labour union, LO. So I fail to see why labour unions would feel any loyalty to the current centre-right government. If there is any example of the labour union feeling a greater loyalty to the (soc dem) party than its members, it's in their absurd resistance to the series of tax cuts which have been very profitable to their members. So what they should have done: support the tax cuts, support higher wages. What they did do: oppose tax cuts, oppose higher wages. Brilliant people, really.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Fri Aug 19th, 2011 at 11:42:48 AM EST
[ Parent ]
I see it as NAIRU-policy working. Keep an army of unemployed and make sure to harass them sufficiently and the unions will act to keep their members from being umeployed rather then increased wages. Unions with a minimal unemployment among its members are still good at delivering pay increases. Of course, that is mainly unions for high-qualified personel and thus small unions, like for example the doctors union.

A vote for PES is a vote for EPP! A vote for EPP is a vote for PES! Support the coalition, vote EPP-PES in 2009!
by A swedish kind of death on Fri Aug 19th, 2011 at 05:20:57 PM EST
[ Parent ]

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