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Just as brutal national deleveraging is growth, because wages and prices fall instantly to a new equilibrium and the market leaps back. (Only failures like Keynes made out that wages and prices are too sticky for this theology to work in messy real life.)

Never mind. As Ludwig Erhard, when Finance Minister in the '50s, said of the "Social Market": "The market is social".

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Apr 26th, 2012 at 02:29:34 AM EST
[ Parent ]
Even if wages and prices did that, you would still need the commit the loanable funds fallacy and violate stock-flow consistency to get the instant magic pony growth that new classicals pretend.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Apr 26th, 2012 at 02:45:00 AM EST
[ Parent ]
No.

Because growth for the 1% is the only growth that matters.

Even if the wider economy is in a depression, as long as income is rising for the 1%, everything is happening as it should.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Thu Apr 26th, 2012 at 04:10:25 AM EST
[ Parent ]
From Delors' For a revival of Europe (h/t afew)
Then, there are the international causes of the crisis affecting the euro. Of course, it is easy for the United States Secretary of the Treasury to talk about the euro crisis forgetting his own deficit and the domination of the dollar. But the international causes of the euro crisis still exist. It is, of course, due to the excess of financial ideology. I will quote you a single sentence that shocked me when I was talking to a leading French banker, who said to me: "Jacques Delors, you understand nothing, the creation of value is essential". "And what is the creation of value?" I asked him. I did not wait for his answer, as I already knew it: it is the increase in stock market prices. We are a long way from the Schumpeterian entrepreneur and the economic moral doctrine of Max Weber. For years we lived with this ideological euphoria and the Commission services were not insensitive to it. After all, to sum up, finance was the queen of the game and capitalism worked well, provided that employees accepted to be mobile and to earn less. That was their system. Such are the international causes of the euro crisis.


guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
by Migeru (migeru at eurotrib dot com) on Thu Apr 26th, 2012 at 04:24:04 AM EST
[ Parent ]
The bonus pool is the booty of the current pirate banking model.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Apr 26th, 2012 at 10:52:56 AM EST
[ Parent ]

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