Welcome to the new version of European Tribune. It's just a new layout, so everything should work as before - please report bugs here.
Display:
and, yes, Weber, Stark and Wiedmann, if that's okay with you]

Don't be petty. I am not the one running around and blaming a foreign country for everything. I just tend to point out that only two of the 18 people making decisions at the ECB are Germans. And Weber is history.

by IM on Wed Sep 7th, 2011 at 10:55:56 AM EST
[ Parent ]
1) The BuBa owns 20% of the ECB's capital (~GDP in the EU27), so it is not farfetched that they have disproportionate influence on decision-making; 2) going by the public pronouncements of the people involved, the Germans have been notorious for public breaches of ECB council collegiality, undermining or delaying ECB action repeatedly in this crisis; 3) we're still pretty much living with the non-petty economic consequences of Herr Weber.

Economics is politics by other means
by Migeru (migeru at eurotrib dot com) on Wed Sep 7th, 2011 at 11:19:03 AM EST
[ Parent ]
Do you really think it is wrong that the largest economy in the Eurozone has some influence? And capital doesn't vote the heads of the central bank do.

 "2) going by the public pronouncements of the people involved, the Germans have been notorious for public breaches of ECB council collegiality, undermining or delaying ECB action repeatedly in this crisis;"

In your hate of the Bundesbank you don't seem to see what is happening here: The yare losing and try to use extraordinary means tp compensate for the fact that at the regular CBE decisison nobody listens to them.

 3) we're still pretty much living with the non-petty economic consequences of Herr Weber.

You mean Trichet.

by IM on Wed Sep 7th, 2011 at 11:56:29 AM EST
[ Parent ]
Both. But, in fact... Read this and that.

Economics is politics by other means
by Migeru (migeru at eurotrib dot com) on Wed Sep 7th, 2011 at 12:00:11 PM EST
[ Parent ]
The Bundesbank are losing because they can't win as their ideas, if implemented, would destroy the Euro, but they are taking the rest of the Euro down with them.

Do you remember what happened on August 4-8 with Trichet's press conference, the market meltdown, the weekend conference calls and the Black Monday that wasn't?

All that would have been avoided if Weidmann had accepted on the 4th what he agreed to on the 7th.

Economics is politics by other means

by Migeru (migeru at eurotrib dot com) on Wed Sep 7th, 2011 at 12:05:04 PM EST
[ Parent ]
Do you really think it is wrong that the largest economy in the Eurozone has some influence?

I think it is wrong that incompetent fuckwit ideologues have any influence at all, let alone disproportionate influence.

And the highest concentration of incompetent fuckwit ideologues East of London happens to be in the BuBa.

And capital doesn't vote the heads of the central bank do.

Yeah, yeah, on paper.

Just like, on paper, every NATO member has veto rights over foreign adventures.

The Americans call that sort of kabuki theatre "legal fiction."

In your hate of the Bundesbank you don't seem to see what is happening here: They are losing and try to use extraordinary means to compensate for the fact that at the regular CBE decisison nobody listens to them.

On what planet do you spend most of your time?

The ECB's playbook for this crisis has been a virtual carbon copy of the Bundesbank's playbook for the 1993 ERM breakup. And every single time the ECB has deviated a single millimeter from the BuBa 1993 playbook, the incompetent fuckwit ideologues at the BuBa have pitched a public hissy fit. In direct violation of the rules of confidentiality that the same incompetent fuckwit ideologues insisted on to begin with.

If the ECB had consistently overruled the BuBa, not a week would have gone by without a BuBa hissy fit. The fact that we only have about one hysterical tantrum a month demonstrates that the other 22 business days in each month the ECB is toeing the BuBa line to the letter.

You mean Trichet.

Yeah, him too.

But the thing about responsibility for fuckups is that it does not become more diluted by being spread out over more people.

- Jake

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

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Sep 7th, 2011 at 04:00:13 PM EST
[ Parent ]
Let it go. The eighties are over and he nineties are over. Your obsession with the Bundesbank just shows that you never left the last century.
by IM on Wed Sep 7th, 2011 at 06:13:57 PM EST
[ Parent ]
Theory: The BuBa irrelevant to ECB decisionmaking.

Hypothesis: The ECB's decisions should not conform to longstanding BuBa policy more often than would be the case by random chance.

Empirical reality: The ECB's policies conform to longstanding BuBa policy with very few exceptions, and when one of these exceptions arises, the BuBa throws a histrionic tantrum as if their most sacred and fundamental rights have been violated.

Conclusion: The theory is falsified.

You can repeat the fact that the BuBa has only one vote on the board until you go blue in the face. That does not change the readily observed fact that the BuBa is setting policy.

And I really don't care whether they do that by bullying the rest into line with their supposed Seriousness; by packing the analysis staff with their insane Hayekian crackpots (but I repeat myself); or even by plying the other members with hookers and cocaine (although the latter would admittedly be the more entertaining version).

I care about the fact that they are setting policy. Because their policies are not sanity-based.

- Jake

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

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Sep 8th, 2011 at 02:11:23 AM EST
[ Parent ]
JakeS:
or even by plying the other members with hookers and cocaine (although the latter would admittedly be the more entertaining version).

The central difficulty in writing a novel about the current ongoing crisis is finding a plausible explanation for the ECB's decisions. This one works better than any of the others I have played around with.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Thu Sep 8th, 2011 at 05:00:43 AM EST
[ Parent ]
IM:
blaming a foreign country for everything

But it is not. A foreign country that is, it is another state in a somewhat federal construction. Do you similarily find it unfair when criticism against certain aspects of US policy is formulated in terms of Texas billionaries?

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 Wed Sep 7th, 2011 at 03:13:17 PM EST
[ Parent ]
Don't you see the problem? oppose Rick Perry, he is one og this crazy texans like Bush. Fine. But that keeps you pretty helpless against Mitt Romney, very much not a Texan. The more thoughtful american progressives are against this kind of rhetoric, Texas this and the south that. Rightly. Right-wingers are all over the US and most of the leaders actually dwell in  New York or DC.

So your opinion - it is all right to blame " Germany" for everything, it will hit some of the right people -  is quite self-destructive. It lets right-wingers in the rest of the EU of the hook. That is enabling one of the oldest right-wing tactics, to blame everything on outsiders (bicoastal eleites, new York, Hollywood)  

by IM on Wed Sep 7th, 2011 at 06:24:12 PM EST
[ Parent ]
Nobody here is engaging in nationalist attacks on "Germany", a "foreign country". Or if they are, they are doing so from about nine distinct national chauvinist positions, which would be quite extraordinary. We are all convinced European federalists here (any dissenters will be taken outside and shot...)

Would it help if we only criticized bloody-minded austerian policies by quoting German sources?

Eurointelligence Daily Briefing, 7 de Setembro de 2011. Enviado por Domenico Mario Nuti. - aviagemdosargonautas

Writing an Op-ed in mass circulation daily Bild FDP's honorary chairman Hans-Dietrich Genscher launches an emotional appeal to the Angela Merkel's coalition to vote for the German law enhancing the EFSF. "Whenever Europe was confronted with a crisis in the past the answer was: with more Europe out of the crisis", the former foreign minister writes. Confronting the eurosceptics whom Genscher calls the "paymaster-agitators" he writes: "As Europeans we have been able to reach a so far unknown wealth in a common internal market with a stable currency", he goes on. He reminds them that because of Europe, Western Europeans were able to overcome the cold war divisions and invite in the Eastern neighbours. "All parliamentarians in Bundestag should be aware of the decision's significance for future generations", he concludes.

Poor old Genscher. The current FDP doesn't much resemble that of the seventies.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Wed Sep 7th, 2011 at 07:28:41 PM EST
[ Parent ]
Ah yes, Genscher But that is not only a pro EU comment, but very much a pro Merkel comment. To be specific, a pro Merkel-Sarkozy comment.

"Die EU erlebt die schwerste Krise ihrer Geschichte. Es ist nicht eine Krise des Euro, sondern eine Schuldenkrise. Sie entstand durch Aufweichung der Stabilitätskriterien der Europäischen Währungsunion. Sie ist auch eine Vertrauenskrise. Neues Vertrauen bilden, bedeutet jetzt, peinliche Beachtung der Stabilitätskriterien, die Verbesserung der Kontrollmöglichkeiten für die Einhaltung dieser Kriterien, die Einführung von Schuldenbremsen in allen Mitgliedsstaaten und die Nachrüstung der Wirtschafts- und Währungsunion durch die Herstellung einer kohärenten übereinstimmenden Wirtschafts- und Finanzpolitik. Auch deshalb darf das Signal Merkel-Sarkozy nicht ungehört verhallen."

"Einführung von Schuldenbremsen in allen Mitgliedsstaaten" that is introduction of debt brakes in all member countries of the EU. That is hardly a critique of austerity.

On topic: I just want to dial you down all that nazi rhetoric like "Gleichschaltung". And I don't think it is good in the long term not to fight wrong policies in your own countries. What's so defensive about that? Defensive is to not accept the slightest bit of critique on even your phrasing.

by IM on Thu Sep 8th, 2011 at 04:48:30 AM EST
[ Parent ]
However
IM:
I don't think it is good in the long term not to fight wrong policies in your own countries.

What on earth makes you think that the various Eurozone nationals participating in this thread are not fighting wrong policies in our own countries? There is ample evidence to the contrary. Why do you persist in your patently absurd assertions that "everyone" on ET ascribes blame exclusively to German policies and policymakers? Is it your assertion that commenters may only criticize policymakers of their own nationality? How, then, may we comment EU affairs?

On my topic :

The Merkel/Sarkozy line is hugely damaging to Europe, I think we can agree on that. But there is worse : the FDP wrecking-ball approach. Genscher is pleading for a return for an at least ostensibly pro-European approach from the FDP, like in his days; but I'm afraid that party doesn't exist any more.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Thu Sep 8th, 2011 at 05:14:05 AM EST
[ Parent ]
Then perhaps you and others should say it and not silenty accept the use.

One frequent poster here uses terms like Gleichschaltung and untermenschen. Another one is so obsessed that he can't talk about the real ECB and the real Euro. but talks about the defunct Bundesbank and the abolished Mark. A third did post a picture of Hitler and Petain and compared them to Merkel and Sarkozy.

Patently absurd?

"Is it your assertion that commenters may only criticize policymakers of their own nationality? How, then, may we comment EU affairs?"

No, but only blaming politicians elsewhere, using every op-ed by some german as an expression of german policy, talking about "Frankfurt", arguing like Merkel is some kind of dictator, assuming she is not just one out of 27 head of governments but the only one is nationalistic blame shifting, scape goating and not really the behaviour of federalist europeans.

Re: FDP: They seem indeed to be the most anti-european party in Germany right now and compared to them Genschers op-ed was indeed gradually better.

by IM on Thu Sep 8th, 2011 at 05:46:59 AM EST
[ Parent ]
arguing like Merkel is some kind of dictator, assuming she is not just one out of 27 head of governments but the only one

Over the past 18 months, increasingly Merkel and Sarkozy have been dictating EU Council policy, and organizing a string of bilateral summits (starting with Deauville last Autumn) where the next step in EU policy is announced to the world (and the Council).

In the case of the July market crisis, when it first flared up Sarkozy wanted to organize a summit to discuss Spain and Italy (yes, Italy is under Market attack and has been for nearly 2 months, at least as far as Sarko is concerned) and Merkel first 1) said she wouldn't attend because there was nothing to discuss; 2) hid behind Greece (she said she wouldn't even attend a second summit a week later unless a deal for Greece had been hammered out by then; 3) then ensured that the 21 July summit discussed nothing but Greece so it had to wait until the market meltdown of August 5 before Merkel and Wiedmann agreed to even acknowledge that the market was now attacking Spain and Italy and that the EFSF was dead in the water.

I said in mid-July that the Council should have called Merkel's bluff and met without her...

But whatever.

Economics is politics by other means

by Migeru (migeru at eurotrib dot com) on Thu Sep 8th, 2011 at 05:53:39 AM EST
[ Parent ]
HOW DARE YOU ACCUSE MERKEL OF BEING HITLER!?!?!? YOU'RE JUST LIKE STALIN!!!!
by Colman (colman at eurotrib.com) on Thu Sep 8th, 2011 at 05:55:51 AM EST
[ Parent ]
Oh come on. I just said that this kind of rhetoric is obscuring rather then illuminating.

Or do you actually think Sarkozy is some sort of Quisling?

by IM on Thu Sep 8th, 2011 at 06:08:18 AM EST
[ Parent ]
No, I just think he's the conductor on the right-wing Conventional Wisdom bus that Merkel is driving. The passengers could get off, but they're too chicken-shit to do so or they basically agree with the driver's choice of route.
by Colman (colman at eurotrib.com) on Thu Sep 8th, 2011 at 06:10:36 AM EST
[ Parent ]
"or they basically agree with the driver's choice of route."

That is my point. Most european countreis are governed by right-wingers, they enact right-wing policies. That is all.

Or do you think a different german government could all of its own force the EU in another direction?

by IM on Thu Sep 8th, 2011 at 06:26:42 AM EST
[ Parent ]
I asked you about the SPD supporting the 2009 debt brake amendment and you said "so what?"

This diary is about the PSOE panicking and adopting the PP's proposal (from 2010) to do the same, to general shock among the Spanish left public opinion.

So what? Do you think the Party of European Socialists provides a credible alternative? Do you think the SPD is not responsible for enabling the 2-year drive to EU wide constitutional debt brakes?

Economics is politics by other means

by Migeru (migeru at eurotrib dot com) on Thu Sep 8th, 2011 at 06:30:59 AM EST
[ Parent ]
Now not only the government, but the opposition in Germany is all powerful? Impressive.

By the way I already told what the opposition in Germany wants Eurobonds - transaction tax - Marschall plan financed by said transaction tax.

But you didn't listen. As usual

by IM on Thu Sep 8th, 2011 at 12:47:02 PM EST
[ Parent ]
For the umpteenth time: the German opposition could have stopped this nonsense in 2009 but they didn't.

That's not being all powerful, it's being stupid.

Economics is politics by other means

by Migeru (migeru at eurotrib dot com) on Thu Sep 8th, 2011 at 01:12:43 PM EST
[ Parent ]
By the way I already told what the opposition in Germany wants Eurobonds - transaction tax - Marschall plan financed by said transaction tax.

In the first place, if you can fund a Marshall plan type of project with a transaction tax, then your transaction tax isn't high enough. Because the whole point of a financial transaction tax is to kill the noise traders stone cold dead. Which, if it works as desired, also kills the base for that tax stone cold dead.

In the second place, even if they design a financial transaction tax to extract the maximum possible receipts, rather than impose the maximum possible harassment on noise traders consistent with not harassing productive businesses, revenues will not suffice to fund a Eurobancor. Even in the most optimistic possible estimate (where the Eurozone financial sector is assumed to contribute roughly half of the £ 250 bn that the Robin Hood Tax people guesstimate could be raised globally), it will fall short of plugging even the German CA imbalance (currently around $ 180 bn), to say nothing of the aggregate imbalances.

So while a Tobin tax is an excellent idea that will solve a great many problems, the biggest problem is not one of them.

- Jake

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

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri Sep 9th, 2011 at 10:13:44 AM EST
[ Parent ]
In the first place, if you can fund a Marshall plan type of project with a transaction tax, then your transaction tax isn't high enough. Because the whole point of a financial transaction tax is to kill the noise traders stone cold dead. Which, if it works as desired, also kills the base for that tax stone cold dead.

ATTAC and others make the mistake of seeing the Tobin Tax as a revenue generating mechanism which was never Tobin's intention when proposing it...

Economics is politics by other means

by Migeru (migeru at eurotrib dot com) on Sat Sep 10th, 2011 at 04:51:16 AM EST
[ Parent ]
I don't know what Sarkozy is thinking. In May 2010 he reportedly threatened to quit the Euro right there and then if Merkel didn't play ball and managed to extract the creation of the (flawed) EFSF as a result. Since then, he's been soft like a kitten.

Economics is politics by other means
by Migeru (migeru at eurotrib dot com) on Thu Sep 8th, 2011 at 06:14:06 AM EST
[ Parent ]
I still don't think that any of them are thinking, exactly. They're fighting for their own political survival and their legal survival after they leave power. What are the odds that an unfriendly successor government couldn't find lots of grounds to prosecute a worm like Sarko?
by Colman (colman at eurotrib.com) on Thu Sep 8th, 2011 at 06:15:19 AM EST
[ Parent ]
That is another thing I try to explain from time to time. The current german government isn't strong, but rather quite weak. And weak governments tend to plan from day to day, in other words not at all. They don't really think about other european countries, they think about the next state election.

So I tend to protest if I read analyses of the sort, Germany is planning this and wanting that. The current isn't planing and wanting mostly negative things, like to be left alone or to kick the can down the road so that they can concentrate on the coalition crisis.

Not that policy by drift can't be harmful.

by IM on Thu Sep 8th, 2011 at 06:32:51 AM EST
[ Parent ]
And I think this is an important reason why many Europeans, especially on the left, currently identify "German policies", or even (shudder) "Germany", as the villains in the current crisis, rather than blaming Merkel and Sarkozy, for example.

Bear with me for a minute : Merkel, who visibly doesn't have any ideas of her own on macroeconomic policy or currency governance, muddles along making non-decisions, digging her heels in stupidly, delaying then accepting the inevitable, but too late to stop the crisis getting worse... but all the while working within the framework of conventional economic wisdom in Germany.

And as Germany is the economic hegemon within the Eurozone (as largest economy, and most "virtuous", since they are on the credit side of the imbalances), German conventional wisdom, in all its majestic stupidity, is the EU orthodoxy.

It's the madness of this conventional wisdom that we must fight. You are quite right that the conventional wisdom is widely shared by economic policy makers and political elites in other countries (though we may note that the French PS has rejected the "golden rule" that the SPD embraced).

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Thu Sep 8th, 2011 at 08:29:07 AM EST
[ Parent ]
 "3) then ensured that the 21 July summit discussed nothing but Greece so it had to wait until the market meltdown of August 5 before Merkel and Wiedmann agreed to even acknowledge that the market was now attacking Spain and Italy and that the EFSF was dead in the water."

But the initially german line - no summit - had be abandoned. Hardly a proof of dictatorship.

 "I said in mid-July that the Council should have called Merkel's bluff and met without her..."

Well, that is their problem, right? Any way it wasn't necessary; Merkel did give in.

by IM on Thu Sep 8th, 2011 at 06:04:11 AM EST
[ Parent ]
So she's an idiot dictator? You're arguing that because ordering the tide to stay out didn't work that she's not pivotal in setting policy? What?
by Colman (colman at eurotrib.com) on Thu Sep 8th, 2011 at 06:08:43 AM EST
[ Parent ]
pivotal in setting policy - and germany was always pivotal in setting policy in the EU - is not same as dictator.

Regarding the idiocy: Have I created the impression that I am a Merkel fan?

by IM on Thu Sep 8th, 2011 at 06:36:40 AM EST
[ Parent ]
Markel did give in to what? To meet and talk about nothing but Greece's second loan tranche when everyone else was worried about whether the EFSF would die of indigestion from having to swallow Spain and Italy?

Economics is politics by other means
by Migeru (migeru at eurotrib dot com) on Thu Sep 8th, 2011 at 06:16:19 AM EST
[ Parent ]
IM:
One frequent poster here uses terms like Gleichschaltung and untermenschen. Another one is so obsessed that he can't talk about the real ECB and the real Euro. but talks about the defunct Bundesbank and the abolished Mark. A third did post a picture of Hitler and Petain and compared them to Merkel and Sarkozy.

We have now beaten the Nazi terminology complaint into the ground. It is clear that the use of such terms is not accepted without debate on this blog.

The "real ECB and the real euro" are simply your version of them. Others have a right to have a different version.

The picture of Hitler and Pétain, you well know, was not accepted and was troll-rated.

Give it a rest.

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Sep 8th, 2011 at 05:58:09 AM EST
[ Parent ]
>We have now beaten the Nazi terminology complaint into the ground. It is clear that the use of such terms is not accepted without debate on this blog.>

It would be better if the use of such terms were without debate not accepted.

>The "real ECB and the real euro" are simply your version of them. Others have a right to have a different version.<

But there is an objective reality. The ECB is the central bank, not the bundesbank.

>Give it a rest.<

Ok. But the next time this problems crops up, I will remember you of your assertions that there is no problem here.

by IM on Thu Sep 8th, 2011 at 07:04:41 AM EST
[ Parent ]
It would be better if the use of such terms were without debate not accepted.

The fact that Migeru is objectively correct on the substance and has been making accurate predictions on this matter since 2008 makes most people here willing to tolerate antics that would not be tolerated from less valuable contributors.

Because being objectively, empirically correct actually matters around here.

>The "real ECB and the real euro" are simply your version of them. Others have a right to have a different version.<

But there is an objective reality.

Which is that the ECB is handling this entire crisis in precisely the same way the BuBa handled the 1993 crisis.

The law is a statement of intent, not an objective reality. The European Council can propose a treaty change that repeals the law of gravity, it can pass referenda in every single member state and be adopted with the force of national constitution everywhere on the subcontinent...

... but rocks still fall down when you drop them, and the BuBa still has an influence that is out of all proportion to the value of its contributions.

- Jake

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

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Sep 8th, 2011 at 07:26:50 AM EST
[ Parent ]
"makes most people here willing to tolerate antics that would not be tolerated from less valuable contributors."

Quod licet jovi, non licet bovi? Perhaps I am just to egalitarian for such maxims.

"Which is that the ECB is handling this entire crisis in precisely the same way the BuBa handled the 1993 crisis."

The ECB is doing what it is doing because its member countries did pack it full of right wing ideologues.
A fact you tend to ignore.

 "The law is a statement of intent, not an objective reality.""

No, most laws, especially the laws that create institutions do create an objective reality.

 "The European Council can propose a treaty change that repeals the law of gravity, it can pass referenda in every single member state and be adopted with the force of national constitution everywhere on the subcontinent...

 ... but rocks still fall down when you drop them, and the BuBa still has an influence that is out of all proportion to the value of its contributions."

You really are the last believer - and it seems to be theology with you - in the myth of the bundesbank. The supposed influence of the Bundesbank is a natural law now? Oh, you are not a orthodox believer, but a heretic: The Bundesbank is in your mythology not an angelic, but rather a satanic power. But in the kingdom, the power and the glory of the Bundesbank you still believe. EWven the people at the Bundesbank temselves are probably not that fervent believers.

A question: If the Bundesbank is all powerful, why did Weber resign? He was frustrated not getting his way at the ECB after all and did give the chance to lead the ECB away. Is he clinically insane? Or did he indeed did not get his way time after time at the ECB, leading to frustration?

by IM on Thu Sep 8th, 2011 at 08:00:41 AM EST
[ Parent ]
"makes most people here willing to tolerate antics that would not be tolerated from less valuable contributors."

Quod licet jovi, non licet bovi?

shrug

There's a single rule for everybody: Thou shalt improve the signal to noise ratio of the site. Posting puerile Nazi comparisons alongside insightful deconstructions of prevailing policy is a net improvement in signal to noise ratio compared to posting nothing. Posting puerile Nazi comparisons with no offsetting contribution of positive value is a net loss of signal to noise ratio compared to posting nothing.

Posting insightful deconstructions of prevailing policy without puerile Nazi comparisons improves the signal to noise ratio compared to posting them with puerile Nazi comparisons. But people are not paid to contribute, so if they insist on reducing the value of what they freely give by shitting on it, then we have very little sanction that can be gainfully applied as long as the final contribution remains net positive value.

The ECB is doing what it is doing because its member countries did pack it full of right wing ideologues.
A fact you tend to ignore.

Because clearly the European right wing is a monolithic hive mind that has no internal class and national conflicts?

Now who's talking conspiracy theories here?

If the Spanish plutocrats have as much influence on ECB policy as the German plutocrats, then why does all the money end up in Frankfurt?

No, most laws, especially the laws that create institutions do create an objective reality.

That does not mean that the objective reality they create can be divined from the text of the law.

A question: If the Bundesbank is all powerful, why did Weber resign?

His arrogance and mental instability made him many enemies. When he went and contradicted something Merkel had said publicly, "many" turned into "too many."

He was frustrated not getting his way at the ECB after all and did give the chance to lead the ECB away. Is he clinically insane? Or did he indeed did not get his way time after time at the ECB, leading to frustration?

Is a homeopath who truly believes in his nostrums clinically insane? Does it matter?

Weber was accommodated far beyond any reasonable limit. But when you insist on attempting to repeal the rules of arithmetic and throw an infantile tantrum every time someone points out that this might be a bad idea, then eventually enough people get tired of you that you are purged. This is less proof of Weber's lack of influence than of his inability to function outside his Hayekian echo chamber.

- Jake

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

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Sep 8th, 2011 at 08:30:55 AM EST
[ Parent ]
No, but only blaming politicians elsewhere, using every op-ed by some german as an expression of german policy, talking about "Frankfurt", arguing like Merkel is some kind of dictator, assuming she is not just one out of 27 head of governments but the only one is nationalistic blame shifting, scape goating and not really the behaviour of federalist europeans.

You mean someone who has decided to bully the other members (with the exception of France) into writing economic insanity clauses into their constitutions isn't acting like a dictator?

The fact that there's a remarkable lockstep on both sides of the Atlantic hardly absolves Merkel of quasi-imperial drooling tin pot idiocy.

But you seem to think Germany has nothing to do with this and is barely even a side player.

Your entire world view seems oddly counterfactual.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Thu Sep 8th, 2011 at 05:59:13 AM EST
[ Parent ]
Nobody's "Blaming 'Germany' for everything" - I always say who said what that is being objected to. But, taken as a whole, a lot of the people calling the shots are German. For instance, I blame Merkel for a bunch of things. Just today:
"We must make it very clear to people that the current problem, namely of excessive debt built up over decades, cannot be solved in one blow, with things like euro bonds or debt restructurings that will suddenly make everything okay. No, this will be a long, hard path, but one that is right for the future of Europe."
According to reports, she actually proposed to introduce a Constitutional Debt Brake at the EU level.

In any case, the insistence that the current problem [is] excessive debt built up over decades is demonstrably false. But debating this point is like talking to a dining room table

We talk about the euro crisis. They say, "Clearly, this was about fiscal irresponsibility, and we need to enforce much stricter rules." I say,

No fiscal rule would have constrained the Spanish housing bubble and its consequences.

And they say, "Thank you for your contribution. Clearly, this was about fiscal irresponsibility, and we need to enforce much stricter rules."

...

The blue line is Germany; the red line is Spain.

And, yes, this is mostly coming from Germany and it's coming from everyone who is anyone in Germany. Hey, even you agree that the problem is debt. More Krugman
A correspondent informs me that Wolfgang Schaeuble, the German finance minister, has just given a speech asserting that excessive public debt caused the 2008 crisis. In fact, I'm told, he said that
It's actually undisputed among economists worldwide that one of the main causes - if not the main cause - of the turbulence - not just now, but already in 2008 - was excessive public debt everywhere in the world.
OK, we can prove that wrong immediately: I dispute it, Brad DeLong disputes it, Christy Romer disputes it, and I think we fall into the category of "economists worldwide".
As Wolfgang Münchau put it in 2009: Berlin weaves a deficit hair-shirt for us all - yeah, that's right, none of this forced march to constitutional balanced budget reforms would have happened if Germany hadn't gotten the ball rolling and, moreover, continued to argue for its necessity and used the Euro crisis as a stick to force other countries to do it.
A decision was taken recently in Berlin to introduce a balanced-budget law in the German constitution. It was a hugely important decision. It may not have received due attention outside Germany given the flood of other economic and financial news. From 2016, it will be illegal for the federal government to run a deficit of more than 0.35 per cent of gross domestic product. From 2020, the federal states will not be allowed to run any deficit at all. Unlike Europeâ€TMs stability and growth pact, which was first circumvented, later softened and then ignored, this unilateral constitutional law will stick. I would expect that for the next 20 or 30 years, deficit reduction will be the first, second and third priority of German economic policy.

...

I am a little surprised not to hear howls of protests from France and other European countries. Germany has not consulted its European partners in a systematic way. While the Maastricht treaty says countries should treat economic policy as a matter of common concern, this was an example of policy unilateralism at its most extreme.

...

While the balanced budget law is economically illiterate, it is also universally popular. ...

This general level of debt-aversion is bizarre. Many ordinary Germans regard debt as morally objectionable, even if it is put to proper use. They see the financial crisis primarily as a moral crisis of Anglo-Saxon capitalism. The balanced budget constitutional law is therefore not about economics. It is a moral crusade, and it is the last thing, Germany, the eurozone and the world need right now.



Economics is politics by other means
by Migeru (migeru at eurotrib dot com) on Thu Sep 8th, 2011 at 04:01:33 AM EST
[ Parent ]
"Hey, even you agree that the problem is debt."

Do I now? Where?

Do you confuse me with Merkel?

By the way did you realize that Merkel was speaking to the opposition, especially regarding eurobonds? A fact you tend to ignore.

by IM on Thu Sep 8th, 2011 at 04:51:33 AM EST
[ Parent ]
Haven't you been insisting all over the thread that the Euro crisis is a debt crisis, not a currency crisis?

Economics is politics by other means
by Migeru (migeru at eurotrib dot com) on Thu Sep 8th, 2011 at 04:57:03 AM EST
[ Parent ]
In this case you surely have no problem to find that comment or comment.

Bonus point: Find where I said anything about public debts.

by IM on Thu Sep 8th, 2011 at 05:27:36 AM EST
[ Parent ]
Ask and ye shall recieve.

I said: Ireland was a debt crisis. A private debt crisis. Which should not be news to anybody reading these pages.

You replied: But that is my point. Not a currency crisis. Doesn't fit your narrative.

The casual reader could be forgiven for believing that your point was that Ireland had a debt crisis, and that this had something to do with the continental crises.

But if you presented your own analysis of what the problem is and what solutions are possible and desirable, then there would be much less grounds for such misunderstandings...

- Jake

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

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Sep 8th, 2011 at 07:50:34 AM EST
[ Parent ]
And it is a bit boring to read the same Krugman blog post again and again. After all I and the rest of the readers of this blog too already did read it at the source.

Reagrding Münchau:
"While the balanced budget law is economically illiterate, it is also universally popular"

Universally popular all over the world. I already did mention the US. The popular support for austerity in the us and the UK is hardly "forced" by german pressure. The same is true in the rest of the world. Balanced budget laws and constitutional balanced budget amendments are always popular. I doubt there are many countries where public opinion is different.

That is a problem and we should deal with it. And not seek the fount of all evil somewhere over the border in "Frankfurt".

by IM on Thu Sep 8th, 2011 at 05:00:41 AM EST
[ Parent ]
It's not nearly as boring as 'top economists and bankers' and other weasels pushing the same self-interested but ultimately suicidal policies again and again.

Your comments are trivially short, loaded with emotive insinuations, and entirely oppositional to the preceding comment with no further scope - all of which suggest trolling.

But just in case you're here to make a more positive contribution - perhaps you'd care to explain what you think the solution to the Eurozone crisis should be?

by ThatBritGuy (thatbritguy (at) googlemail.com) on Thu Sep 8th, 2011 at 06:03:46 AM EST
[ Parent ]
Have you never been in an argument before?

They are oppositional to the preceding comment because we are debating. Are you so used to echo-chambers that you can't see the difference between debating and trolling? And length of a comment has nothing to with its quality. Look: I have read Krugman, you have read Krugman, probably most here have read the latest Krugman. No need to cite him again and again.  

"It's not nearly as boring as 'top economists and bankers' and other weasels pushing the same self-interested but ultimately suicidal policies again and again."

What kind of non sequitur is that?

"But just in case you're here to make a more positive contribution "

I would like to make a positive contribution. But I fear nobody would listen. I actually wanted to write a diary about the latest state elections here, but the current climate on this blog dissuaded me. Perhaps the next one.

by IM on Thu Sep 8th, 2011 at 06:23:07 AM EST
[ Parent ]
I've been trying to understand the substance of your opinions on the subjects we are ostensibly debating, with no luck, I'm afraid. A number of others seem genuinely confused as to what your positions are. It would greatly improve the signal to noise ratio if you would care to lay them out.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II
by eurogreen on Thu Sep 8th, 2011 at 08:44:30 AM EST
[ Parent ]
Seconded. I'm still trying to figure out IM's views and recommendations here, but so far I can't see anything.

Beyond the denunciation of bad taste WW II comparisons (and most of us agree), the only impression remaining (unfortunately) is him taking taking exception when someone blames the German leadership (politicos, bankers, etc...), for the current mess.

And no, I disagree that we are driving German contributors out: if French ETribbers were reacting that way each time Sarkozy, the UMP or the PS politics is criticized here, there wouldn't be any single French person left. Germany is no different.

And yes I would really welcome a diary about the latest state elections and generally speaking about German politics as it affects EU policies.

by Bernard on Thu Sep 8th, 2011 at 09:21:40 AM EST
[ Parent ]

Display:

Occasional Series