European Salon de News, Discussion et Klatsch - 23 February | 127 comments (127 topical, editorial, 0 hidden)

Re: Europe (none / 0)

Look perhaps I misinterpret the situation in the US, but as far I understand it, hawks tend to be presidents of the fed of St. Louis or so. And of course they talk about their monetary policy preferences and predict inflation right around the corner. Yglesias complains every month or so about a regional fed president seeing imaginary inflation.

Generally speaking the Bundesbank was modeled after the federal structure of the fed and the ECB on the Bundesbank. Only more so.

by IM on Fri Feb 24th, 2012 at 10:52:23 AM EST
[ Parent ]

Re: Europe (none / 0)

The Fed doesn't have the collegiality agreement that the ECB has. You can bet your bottom dollar that if the French or Italian central banker were to come right out and call for unconditional defense of low sovereign bond rates, the BuBa would howl and whine about how he's prejudicing the independence of the ECB.

The BuBa is behaving like the New York Fed did prior to the New Deal. In case anybody is wondering, that's, eh, not high praise.

- Jake

If you only spend 20 minutes of the rest of your life on economics, go spend them here.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Feb 25th, 2012 at 03:57:02 AM EST
[ Parent ]

Oh, and... (none / 0)

... the correct term for Weidman and his kind isn't "inflation hawks." It's "inflation neurotics."

- Jake

If you only spend 20 minutes of the rest of your life on economics, go spend them here.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Feb 25th, 2012 at 04:01:04 AM EST
[ Parent ]

Re: Europe (4.00 / 2)

I just don't see why the BuBa's howling and whining should impress anyone, unless they WANT to be impressed. ("Dear fellow-citizens, we would NEVER, it's all the Germans' fault").

by Katrin on Sat Feb 25th, 2012 at 05:18:04 AM EST
[ Parent ]

Re: Europe (none / 0)

Because Germany is the country that gets to decide whether the Euro lives or dies. If Germany stops its protectionist wage-dumping and colonial attitude, the Euro lives. If it doesn't, the Euro dies. Or, if you want to put it in neolib newspeak terms, Germany is the most solvent member of the Eurozone.

That makes the BuBa wankery carry a certain weight among those who want the Euro to keep living, because they will need to appease the wankers in question if that is to happen.

- Jake

If you only spend 20 minutes of the rest of your life on economics, go spend them here.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Feb 25th, 2012 at 05:34:29 AM EST
[ Parent ]

Re: Europe (none / 1)

Wrong. You imply that Germany was isolated and pursuing a policy that all (or most) other countries object to. This is absolutely not the case. Jerome is right: if you all tell us to play fair or else be called nazis, Germany will play fair. C'mon, why don't you do it?

by Katrin on Sat Feb 25th, 2012 at 06:01:23 AM EST
[ Parent ]

Re: Europe (none / 0)

The Fed doesn't have the collegiality agreement that the ECB has.

So you want to argue now that the heads of the regional feds do have the right to go the public on their opinion of monetary policies opinion but the heads of the euro system member banks don't? That the ECB is actually more centralized then the Fed?

by IM on Sat Feb 25th, 2012 at 08:46:56 AM EST
[ Parent ]

Re: Europe (none / 0)

That's the agreement the BuBa insisted on when they joined.

And that they're the most prolific violators of.

Does it make sense? No, arguably not. But the BuBa stopped making sense back in the mid-1920s when it swallowed the Austrian koolaid, so "it makes no fucking sense" is not in any way in contradiction of "the BuBa insisted on it."

- Jake

If you only spend 20 minutes of the rest of your life on economics, go spend them here.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Feb 25th, 2012 at 08:59:39 AM EST
[ Parent ]

Re: Europe (none / 0)

Now that - off topic really -, but everybody was fine at the Reichsbank until Schacht did take over in 1923?

Now that is a new interpretation.

And while there does exist a rule about confidentiality of meetings, you seem to turn this rule into a gneral gag rule for central bank presidents. I don't think that is right.

by IM on Sat Feb 25th, 2012 at 10:23:47 AM EST
[ Parent ]

Re: Europe (none / 0)

To say that "everything was right" with the Reichsbank prior to Schacht is, what is that work, oh yes, a complete and utter straw man.

What I said was that the Bundesbank has been insane ever since Schacht. That does not imply any endorsement of its pre-Schacht behaviour above and beyond the endorsement generally implied by noting that someone does not need to be committed to a mental institution.

- Jake

If you only spend 20 minutes of the rest of your life on economics, go spend them here.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Feb 25th, 2012 at 01:13:48 PM EST
[ Parent ]

Re: Europe (none / 0)

Schacht could well have be insane, if narzissmen and opportunism can be driven to insane heights. What he wasn't, especially after 1933, was conventional liberal economist and certainly not a austrian.

I don't know if the method he used after 1933 - mefo bills .- was fiscal or monetary stimulus bit certainly wasn't the liberal orthodoxy of his day.

So he should - if we look only at central bank policy - a man of your tastes.

by IM on Sat Feb 25th, 2012 at 01:44:43 PM EST
[ Parent ]

Re: Europe (none / 0)

In ordinary economic terminology, mefo bills are monetary accommodation of fiscal policy.

They were also done by the Treasury, not the Reichsbank.

Schacht's economic policies are a mixed bag, but that's somewhat beside the point, as we were discussing the aetiology of the institutional insanity of the BuBa. And while the hardening of the Reichsbank's anti-inflationary dogma might have happened under Schacht, a single man does not make history.

- Jake

If you only spend 20 minutes of the rest of your life on economics, go spend them here.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Feb 25th, 2012 at 01:57:41 PM EST
[ Parent ]

Re: Europe (none / 0)

No, Reichsbank:

http://de.wikipedia.org/w/index.php?title=Datei:Funktionsweise_der_Wechsel.png&filetimestamp=201 10509102445

The readiness of the Reichsbank to discount made the bills of exchange of the technically private mefo work.

So you want to trace the origin of the institutional ideology of the german central bank back to the end of the great inflation but treat anything between 1933-1948 as an aberration.

by IM on Sat Feb 25th, 2012 at 02:19:03 PM EST
[ Parent ]

Re: Europe (none / 0)

Schacht didn't invent the mefo bills. Woytinsky did, for his stimulus programme.

Woytinsky hatte in Die Arbeit (Heft 3, 1932) erläutert, in welcher Weise die nicht untergebrachten Anleihestücke "den Banken als Unterlage für eine Zwischenfinanzierung der Arbeitsbeschaffung dienen" sollten: "Von den mit den Arbeiten betrauten Unternehmern werden Wechsel auf die als Träger der Arbeiten in Betracht kommenden öffentlich-rechtlichen Körperschaften gezogen." Die Banken könnten diese Wechsel einlösen und ihrerseits "bei der Reichsbank diskontieren". In der Resolution vom 13. April 1932 fehlte jedoch der entscheidend wichtige Verweis auf die Diskontierbarkeit bei der Reichsbank. Es hieß nur: "Soweit die Anleihestücke noch nicht in vollem Umfange auf dem Kapitalmarkt untergebracht sind, sollen sie den Banken als Unterlage für eine Zwischenfinanzierung der Arbeitsbeschaffung dienen."[11]
Insbesondere Tarnow war entschieden gegen den Kompromiss mit der Anleihe gewesen. Und Woytinsky hatte immer wieder betont: "Krisenbekämpfung heißt aber Arbeitsbeschaffung. Und wer Arbeitsbeschaffung sagt, der hat von der Kreditschöpfung gesprochen."[12]

Note that the öffa bills and mefo bills are only necessary to circumvent the equivalent of a debt-brake and the like.

I would have tried to post a translation but I don't know how it works--the instructions telling me that it is easy with the Firefox extension doesn't make me much wiser. Can someone explain?

by Katrin on Sat Feb 25th, 2012 at 02:17:17 PM EST
[ Parent ]

Re: Europe (none / 0)

Forgot the link: http://www.solon-line.de/aktive-konjunkturpolitik.html

by Katrin on Sat Feb 25th, 2012 at 02:18:52 PM EST
[ Parent ]

Re: Europe (none / 0)

I did say nothing of inventing. I justed pointed out what he practiced as head of the Reichsbank after 1933. And what he practiced had not much to with the post war Bundesbank dogma or the austrian school.

Woytinsky couldn't even get a majority inside the social democrats for the WTB plan, mostly because Hilferding was opposed.

by IM on Sat Feb 25th, 2012 at 02:28:19 PM EST
[ Parent ]

Re: Europe (none / 0)

And that's all one needs to know about social democrats, isn't it?

by Katrin on Sat Feb 25th, 2012 at 02:38:52 PM EST
[ Parent ]

Re: Europe (none / 0)

I don't know. They listened to the expert and the expert was Hilferding and Hilferding said no. Was it really that far-fetched to listen to Hilferding?

At same time a certain Mosley did leave the labour party, because they would not listen to his keynesian proposals. And in 1932, Roosevelt attacked Hoover because the deficits were to high.

by IM on Sat Feb 25th, 2012 at 02:44:40 PM EST
[ Parent ]

Re: Europe (none / 0)

Woytinsky was an expert too, so that argument doesn't convince me. One should think the SPD could have learned it by now, though.

by Katrin on Sat Feb 25th, 2012 at 03:41:00 PM EST
[ Parent ]

Re: Europe (none / 0)

Hilferding had, since the publication of Finanzkapital in 1910 a big standing. We shouldn't ignore that fact.

by IM on Sat Feb 25th, 2012 at 06:49:35 PM EST
[ Parent ]

Re: Europe (none / 0)

I don't know. They listened to the expert and the expert was Hilferding and Hilferding said no. Was it really that far-fetched to listen to Hilferding?

Yes. It was blatantly obvious to anybody who had eyes to see with that only massive state intervention in support of full employment could ever have any hope of pulling the country out of the crisis.

Major industrial depressions where not, the official version of history notwithstanding, a new and exciting development at the time. There was the next best thing to a century of empirical evidence that laizzes-faire did not, and indeed could not, work.

- Jake

If you only spend 20 minutes of the rest of your life on economics, go spend them here.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri Mar 9th, 2012 at 03:46:46 AM EST
[ Parent ]

Re: Europe (none / 0)

Go here to download the extension. Firefox will install TribExt.

Your screen should now be glowing orange and emitting a low hum. Do not worry, this is normal. But it's advisable to put on latex gloves before touching the keyboard.

Select, on its html page, the text you want to translate, and right-click (Windows). The option Translate appears in the menu. It opens a new page with the text to be translated on the left. Beneath it, a drop-down menu allows you to define its language. On the right, the empty frames have English defined beneath them, by default.

When you have "German" on the left and "English" on the right, click the "Translate" button between them. The right-hand frames will fill with Google Translate's translation. Check it carefully. To correct, click within a frame and edit appropriately.

When finished, click on "Copy output and close". You can then paste into your comment or diary. The two texts will be html-formatted side by side with link above, as you may have seen here or there in green and yellow.

by afew (afew(a in a circle)eurotrib_dot_com) on Sat Feb 25th, 2012 at 02:49:16 PM EST
[ Parent ]

Re: Europe (none / 0)

My screen is glowing orange and emitting a loud grrr. The keyboard has eaten the gloves. Which html page?

(I found out that I had Firefox 8 and the extension for 10., but I fixed that now. I don't know how to get a html page though.)

by Katrin on Sat Feb 25th, 2012 at 03:37:29 PM EST
[ Parent ]

Re: Europe (none / 0)

Just the original web page where the text to be translated is.

by afew (afew(a in a circle)eurotrib_dot_com) on Sat Feb 25th, 2012 at 03:52:34 PM EST
[ Parent ]

Re: Europe (none / 1)

,,Aktive Konjunkturpolitik" in der Weltwirtschaftskrise - Solon-Line.de		% u201D% u201EAktive economic policy in the Great Depression - Solon Line.de
Woytinsky hatte in Die Arbeit (Heft 3, 1932) erläutert, in welcher Weise die nicht untergebrachten Anleihestücke "den Banken als Unterlage für eine Zwischenfinanzierung der Arbeitsbeschaffung dienen" sollten: "Von den mit den Arbeiten betrauten Unternehmern werden Wechsel auf die als Träger der Arbeiten in Betracht kommenden öffentlich-rechtlichen Körperschaften gezogen." Die Banken könnten diese Wechsel einlösen und ihrerseits "bei der Reichsbank diskontieren". In der Resolution vom 13. April 1932 fehlte jedoch der entscheidend wichtige Verweis auf die Diskontierbarkeit bei der Reichsbank. Es hieß nur: "Soweit die Anleihestücke noch nicht in vollem Umfange auf dem Kapitalmarkt untergebracht sind, sollen sie den Banken als Unterlage für eine Zwischenfinanzierung der Arbeitsbeschaffung dienen."[11]		Woytinsky had explained in Die Arbeit (Issue 3, 1932), "serve the banks as a basis for interim financing of job creation," the manner in which the non-accommodated bond pieces should be: "Of the charge of the works contractors changes are as the carrier the work taken into consideration in public-sector entities. " The banks could redeem these bills and "discount them at the Reichsbank . The resolution of 13 April 1932, however, lacked the essential and the reference to be discounted at the Reichsbank. They said only: "As far as the bond sites are not yet accommodated in full on the capital market, the banks are to serve them as a basis for interim financing of job creation." [11]
Insbesondere Tarnow war entschieden gegen den Kompromiss mit der Anleihe gewesen. Und Woytinsky hatte immer wieder betont: "Krisenbekämpfung heißt aber Arbeitsbeschaffung. Und wer Arbeitsbeschaffung sagt, der hat von der Kreditschöpfung gesprochen."[12]		In particular, Tarnow had been decidedly against the compromise with the bond. And Woytinsky had repeatedly emphasized: "fighting the crisis is job creation, and who says job creation speaks of the creation of credit.." [12]

It works. Thanks Afew.

by Katrin on Sat Feb 25th, 2012 at 04:19:01 PM EST
[ Parent ]

European Salon de News, Discussion et Klatsch - 23 February | 127 comments (127 topical, 0 editorial, 0 hidden)

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