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Whatever else "the Germans" may be, neoliberalism does not describe it. The neo-liberal FDP is struggling to make the 5% threshold in many polls and has a high watermark of around 15%.

Germany, like Ireland, has a strong state directed economic tradition and a certain leeriness about unregulated markets. Both economies are export led with a strong positive balance of trade. Both are heavily integrated into the global economy but with a strong tradition of national/regional/sectoral wage agreements and collective bargaining. Fine Gael, Fianna Fail (and often Labour) articulate the "Swabian Housewife" model of economics quite well.

Germans resent Irish tax avoidance schemes for multinationals (double Irish and Dutch sandwich), but who can blame them if we then go around with a poor mouth? Otherwise we have much it common and few historic antagonisms to overcome. What's not to like if (and it is a big if) the Germans continue to lead this part of the world, and we can hitch ourselves to their wagon?

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot dotty communists) on Wed Jun 6th, 2012 at 07:45:09 AM EST
[ Parent ]

Actually, I was referring to the triumph of "NATIONAL INTEREST".

If solidarity is dead, so is any EU worth having.

by Colman (colman at eurotrib.com) on Wed Jun 6th, 2012 at 07:55:33 AM EST
[ Parent ]

I know I am getting dangerously close to articulating a "realist" political position, but there is nothing wrong with "national interests" if the nations in question have more in common than they have separating them. Then the task of the EU is to develop cohesion, solidarity, and institutional structures to safeguard the common interests of the sovereign member states as a whole and to mediate/arbitrate where differences remain.

Of course I would prefer an EU based on a much stronger European Demos and institutional base, but the EU as currently configured is still largely an alliance of 27 sovereign member states. A Banking Union with a common regulatory and resolution architecture making bondholders responsible for losses would be a step in the right direction.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot dotty communists) on Wed Jun 6th, 2012 at 08:37:39 AM EST
[ Parent ]

Even the lip service that was paid to solidarity is fading.

by Colman (colman at eurotrib.com) on Wed Jun 6th, 2012 at 08:43:34 AM EST
[ Parent ]

But even the realists are arguing a Greek exit from the Euro would cost €1Trillion and that it is in "everyone's" interest to prevent this from happening. If Greece ultimately survives within the Eurozone, it won't be because everyone loves them, but because they believe the alternative would be even more damaging for all.

I find it interesting that Merkel was a compliant youth leader in Communist East Germany - a state which was ultimately bailed out by West Germany at massive cost to West Germans and other European states - to a degree that would make a complete bail-out of Greece look small in comparison.

While academic arguments about the wisdom of Kohl's 1:1 revaluation of the Ostmark remain, I don't hear any negative commentary about bailing out East Germany now, although that may be because I am not close to German politics..

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot dotty communists) on Wed Jun 6th, 2012 at 08:55:43 AM EST
[ Parent ]

and other European states

No, I believe you'll find that the Germans did it all themselves and don't owe anyone anything.

by Colman (colman at eurotrib.com) on Wed Jun 6th, 2012 at 08:56:55 AM EST
[ Parent ]

Re: The Manufacturing of Consent (4.00 / 6)

This is where Enda is failing Ireland badly. He should be giving speeches in Germany and around Europe ad nauseum. The argument that:

The Irish bail-out was actually intended for and given largely to bail-out German banks who had engaged in irresponsible lending
That the low ECB interest rates required to pull Germany out of post re-unification slump had the foreseeable consequence of creating property and other bubbles elsewhere which in part caused the current crisis

simply isn't being made in a manner which has any traction with public opinion. Enda doesn't have to understand the argument. He just has to be able to read a speech. He could commission "a few wise men" of renowned global economists to write it for him. Keen and Stiglitz and one or two Brits/Germans/French could do the trick.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot dotty communists) on Wed Jun 6th, 2012 at 09:10:30 AM EST
[ Parent ]

But even the realists are arguing a Greek exit from the Euro would cost €1Trillion and that it is in "everyone's" interest to prevent this from happening.

And the answer is to double down on the punishment, the blackmail and the extortion and cajoling of the Greek political class and the Greek people.

We can only guess what the wrath of Brussels/Frankfurt will visit on Greece after Syriza wins the election in 10 days, but it won't be pretty or indeed in line with any idea of the Europe we want to live in.

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Wed Jun 6th, 2012 at 09:07:47 AM EST
[ Parent ]

Or they could conclude that the blackmail failed. They tried installing a puppet regime. They tried having two elections and still couldn't get the result they wanted. So now they are going to have to deal with a Syriza led Government.

The worst case scenario, from Germany's perspective, is not a Syriza led Government, but a weak Government incapable of implementing ANY agreement.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot dotty communists) on Wed Jun 6th, 2012 at 09:16:49 AM EST
[ Parent ]

I wouldn't put it past them to stop clearing payments with the Greek central bank.

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Wed Jun 6th, 2012 at 09:20:06 AM EST
[ Parent ]

That is, presumably, the mechanism for expelling Greece from the Eurozone in the absence of any legal mechanism for doing so. However if that is the route they choose to go in, they can kiss all their Greek loans goodbye. Why should Greece honour its commitments if the ECB doesn't honour its functions as a central bank?

In practice,, the Euro would probably remain in circulation in Greece to fund imports, whilst Greece would create a new Drachma to provide the required liquidity for the domestic economy. A rapid and radical devaluation is probably what Greece needs now in any case - allied to a sovereign debt default.

Officially, Greek membership of the Eurozone mught be deemed to be "suspended" for a time, pending a "normalisation of economic relations and the Greek economy on a new footing. Hardly a painless prospect. Something akin to a company going into Examinership with the prospect of returning to trading sustainably at some stage in the future.

If the problem was limited to Greece, it wouldn't be a problem. The problem would be the risk of "contagion" to Spain etc. Hence Greece would be placed in purgatory for a while. Imports to Greece would plummet as exporters worried about credit worthiness and the prospect of being paid in Drachmas of uncertain value. Assets in Greece would become so cheap in Euro terms the asset strippers would move in. But if Syriza could actually govern effectively, the basis of a sustainable recovery could e in place and working within a couple of years.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot dotty communists) on Wed Jun 6th, 2012 at 09:33:12 AM EST
[ Parent ]

That we're even discussing in these terms is proof positive of the moral failure of the European union and the death of European solidarity.

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Wed Jun 6th, 2012 at 09:37:54 AM EST
[ Parent ]

Not necessarily. As organisations mature they move from the visionary dreams of their founders to the pragmatic actions of bureaucrats furthering their organisational self interests. Problems arise when the institutional architecture takes insufficient account of underlying conflicts of interest or new threats in the external environment. The same happens in companies when they grow out of the initial entrepreneurial phase and become entrenched bureaucracies which stifle innovation or the ability to respond to new challenges.

The very fact that we are now talking about a banking Union with common regulatory and resolution frameworks is a positive step. It may not be a vision to inspire a new generation of Euro enthusiasts, but it shows that incremental evolution is still possible.

The lack of empathy with Greek suffering is, of course alarming. Merkel doesn't have the vision to formulate a Marshall plan, or even the vision of her mentor, Helmut Kohl, who initiated a massive transfer Union between West and East Germany (perhaps without fully realising that that was what he was doing).

Certainly the politics and rhetoric have changed in a was that seems entirely anti-humanitarian. Where now the talk of cohesion, structural and regional funds to help less developed regions? It's like dogs fighting over scraps at the moment.

So I don't disagree with your sentiment: I just think that, with better leadership, there is still a lot of potential in what the EU could achieve. It's just an incredibly slow, opaque, and frustrating process; but I'm not a Eurosceptic yet.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot dotty communists) on Wed Jun 6th, 2012 at 10:12:23 AM EST
[ Parent ]

I'm not a Eurosceptic, I'm sceptic of the human condition.

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Wed Jun 6th, 2012 at 10:15:00 AM EST
[ Parent ]

And how do you fix that?

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot dotty communists) on Wed Jun 6th, 2012 at 10:30:25 AM EST
[ Parent ]

I can't.

Quoting Diogenes, the more I know people, the more I like my dog.

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Wed Jun 6th, 2012 at 10:31:36 AM EST
[ Parent ]

But politics, when played well, is the art of ameliorating its worst consequences? And perhaps even fixing a few of the problems on the way. Science and Democracy were distinct improvements on what preceded them. The EU a distinct improvement on the warring Great Powers. The Euro perhaps a slight improvement on the currency speculators gaming casinos which proceeded it. We just have to fix the architecture a bit more so that even incompetent administrators can bolix it all the time.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot dotty communists) on Wed Jun 6th, 2012 at 10:42:42 AM EST
[ Parent ]

The Euro perhaps a slight improvement on the currency speculators gaming casinos which pr[e]ce[]ded it.

Except it isn't. The Euro is a reenactment of the gold standard. And currency speculation in European currencies was not the problem the Euro was designed to solve.

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Wed Jun 6th, 2012 at 10:44:40 AM EST
[ Parent ]

But politics, when played well, is the art of ameliorating its worst consequences?

Begs the question.

Politics is about power. It is mostly uncorrelated with what power will be used for.

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Wed Jun 6th, 2012 at 10:46:09 AM EST
[ Parent ]

I didn't know you had a dog.

by Colman (colman at eurotrib.com) on Wed Jun 6th, 2012 at 10:45:28 AM EST
[ Parent ]

I don't like dogs, I'm a cat person and I don't have a cat.

Diogenes' point is that the more you know about people the less you're bound to like them. So the only way to cure cynicism may be lobotomy.

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Wed Jun 6th, 2012 at 10:47:36 AM EST
[ Parent ]

I find it works the other way around. The more I get to know people, generally, the more I get to like or at least them. Cats couldn't give a shit either way. They want to be fed and scratched and give you at most a purr in return...

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot dotty communists) on Wed Jun 6th, 2012 at 10:54:00 AM EST
[ Parent ]

You're saying I could learn to like Merkel with even more exposure to her?

Since I'm expecting her to be Chancellor until at least 2017, maybe I'll yet become a fan.

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Wed Jun 6th, 2012 at 12:24:37 PM EST
[ Parent ]

I wouldn't put it past them to stop clearing payments with the Greek central bank.

I would, because that's also one of the first moves Greece would have to take to repatriate money from German bank accounts.

Most or all interbank debts in the Eurozone pass through the local central banks. If the ECBuBa stops clearing transactions with the Greek CB, the ECBuBa has implicitly voided a good chunk of Greek interbank debts to the rest of the Eurozone.

- 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 Jun 9th, 2012 at 08:55:07 AM EST
[ Parent ]

I find it interesting that Merkel was a compliant youth leader in Communist East Germany - a state which was ultimately bailed out by West Germany at massive cost to West Germans and other European states - to a degree that would make a complete bail-out of Greece look small in comparison.

And then she chose to 'identify upward' with the Christian Democrats, in the process throwing her former fellow Ossies under the bus and becoming the token former Ossie politico in German political life. But then forgetting about your earlier political behavior and acting as though it never existed is no more without precedence than it is, in this instance, without moral content.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Jun 10th, 2012 at 09:39:15 AM EST
[ Parent ]

And creating the EU was ultimately Germany's only means of absorbing the costs of integrating the East. Germany has externalized those costs on the rest of the Union.

by rifek on Mon Jun 11th, 2012 at 11:37:48 AM EST
[ Parent ]

articulate the bat-shit insane "Swabian Housewife" model of economics quite well.

Fixed it for you.

by Colman (colman at eurotrib.com) on Wed Jun 6th, 2012 at 07:56:25 AM EST
[ Parent ]

There is no need to gild the lily. The concept that a Swabian Housewife's approach to family finances is the correct model for macro-economic management is indeed bat shit insane, but that is already assumed in the context and construction of the concept...

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot dotty communists) on Wed Jun 6th, 2012 at 09:43:33 AM EST
[ Parent ]

The FDP doesn't understand that what's sauce for the goose isn't sauce for the gander. Germany has gone into neo-imperialist mode (We may one day look back and view the EU as the Fourth Reich.) and is behaving thoroughly predictably: protectionism for the homeland, mercantilism for how the homeland is to act toward the colonies, and neo-liberalism for how the colonies are supposed to act. Germany's great innovation is that, unlike previous empires, it's managed to foist the bulk of the military bill on someone else.

by rifek on Sun Jun 10th, 2012 at 03:30:24 PM EST
[ Parent ]

There is a lot of sneaking admiration for Merkel/the Germans and a recognition that it is unreasonable to expect them to act against their own national interest. The solution is therefore to tie Ireland's national interest as closely as possible to German national interests.

Not a million miles away from the German wiew: Why Berlin is fixed on a German solution to the eurozone crisis

One of the incontrovertible effects of the euro crisis has been to push Germany into the leadership of Europe. The impact will undoubtedly be that Berlin will want Europe to get out of the crisis by being more German - not through some half-remembered Weimar memory of wheelbarrows full of cash, but through a widely held belief in what works for an economy. The rest of Europe simply needs to understand this and work with Berlin.

These are two mirror statements of German hegemony.

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Wed Jun 6th, 2012 at 09:01:45 AM EST
[ Parent ]

Germany Hegemony is obviously a traumatic prospect for many in Europe - much less so for many Irish people. They were (almost) our allies against the Brits, after all!

More seriously, if it works, the Irish won't want to fix it. My problem is that I don't think it will work for most in Europe, although it may help shore up a declining Europe in a global context.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot dotty communists) on Wed Jun 6th, 2012 at 09:20:42 AM EST
[ Parent ]

The point is that whether it works or indeed has a snowball's chance in hell of working has no place in the argument that German hegemony forces others to align their national interest with German national interest. Also, that any attempt to convince the Germans that their chosen policy is actually against their national interest because it cannot attain its stated objectives is pretty much doomed to fail because of the character of ideological hegemony and the self-serving character of the ideology to a German audience (since "we're virtuous" is an essential plank).

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Wed Jun 6th, 2012 at 09:29:07 AM EST
[ Parent ]

Re: The Manufacturing of Consent (3.83 / 6)

Migeru:

Also, that any attempt to convince the Germans that their chosen policy is actually against their national interest because it cannot attain its stated objectives is pretty much doomed to fail because of the character of ideological hegemony and the self-serving character of the ideology to a German audience (since "we're virtuous" is an essential plank).

What I am wondering is how this is playing in Germany. Is austerity popular (guessing yes)? And if so is it important in the sense that those that support it would consider voting otherwise should for example CDU change their tune (guessing no)?

The importance of the second question is agency. If the population supports austerity (abroad of course) but would shrug if policy is changed, then the politicans could change politics with minimal poll losses. So then the reasons - and potential levers - must be found elsewhere.

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 Jun 6th, 2012 at 02:00:24 PM EST
[ Parent ]

I'm reading Merkel's approval rating is around 80%, for her handling of the crisis.

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Wed Jun 6th, 2012 at 02:01:45 PM EST
[ Parent ]

So was Bush after September 11 and his start of the war in Afghanistan. When in crisis, rally around the leader. And so far there has been no German soldiers killed in maintaining the war against the economy.

Of course, that gives Merkel a great incentive to maintain the current policies as they lead to crisis upon crisis.

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 Jun 6th, 2012 at 03:31:40 PM EST
[ Parent ]

Re: The Manufacturing of Consent (4.00 / 7)

At present there is high approval for Merkel's policy. The Swabian housewife is a very successful narrative. But wait when the crisis hits us... Hopefully the SPD will get it: that's the moment for the opposition, if we have one by then.

by Katrin on Wed Jun 6th, 2012 at 03:53:13 PM EST
[ Parent ]

Hope springs eternal... But, perhaps, a serious economic crisis occasioned by German citizens having to bail out German banks while German exports collapsed might finally convince more Germans that Die Linke does not have cooties, at least to a degree sufficient that other 'leftist' parties could join in a coalition that includes them. Die Linke usually are the ones advocating the most sensible policies.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Jun 10th, 2012 at 09:47:25 AM EST
[ Parent ]

And it will continue to be high so long as the Germans think they are winning and proving their virtue over others. However, if you are right, and Germany's current policies are against their own national interest, then their counter-productivity will soon come home to roost.

If we get to the stage where the German economy is seriously compromised by the austerity it is imposing all around, then the German elite themselves will soon become very restless.

On the plus side Merkel's popularity means she has a lot of political capital to take a dramatic policy initiative should she be persuaded one is required. There is no point in having a visionary leader with great plans if s/he has zero political capital to obtain agreement to their implementation. Perhaps she wants to emulate her mentor, Helmut Kohl and achieve some grand bargain of European integration/unification. What is not clear right now is precisely what elements such a grand bargain would entail. I could think of a few possible elements:

Greater fiscal integration, oversight, and harmonisation conducted by an EU Commission "Budget Office".
Common Consolidated tax base.
Tobin Tax
Banking Union - with common oversight and resolution mechanisms - and an enhanced role for the ECB as lender of last resort and with a remit to promote employment
Eurobonds or project bonds
Combining the posts of President of the Council and Commission and making it an elected post
Greatly enhanced European Investment Bank to fund major cross border infrastructure projects
Common Industrial and Energy Policy
Enhanced oversight powers for the EP
Enhanced cohesion, regional and structural funds

Any other ideas?

Why would Merkel and the other key players buy into such a package?

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot dotty communists) on Wed Jun 6th, 2012 at 06:12:16 PM EST
[ Parent ]

There is no point in having a visionary leader with great plans if s/he has zero political capital to obtain agreement to their implementation.

Who?

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Thu Jun 7th, 2012 at 01:22:28 AM EST
[ Parent ]

Some would argue that Obama is about as visionary as you can get and still be electable within the US, but even he has accomplished relatively little given the constraints of a Republican Controlled congress and the Financial/Military/Industrial complex which really runs the US.

However my point was not that there are many waiting in the wings in the EU (although there may be); my point was that Merkel, for all her limitations, has the political capital to take a major initiative if she can be persuaded one is required.

If, as you say, current German policy is against the German national and broader European interest, then she would have considerable ability to change things. The question mark is against her vision - not against her ability to take and retain control of the levers of power.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot dotty communists) on Thu Jun 7th, 2012 at 06:52:41 AM EST
[ Parent ]

The question mark is against her vision - not against her ability to take and retain control of the levers of power.

Her vision is to take and retain control of the levers of power.

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Thu Jun 7th, 2012 at 07:15:36 AM EST
[ Parent ]

I have to assume the German leadership is constantly balancing the following: Has Germany wrung all the value it can from the EU, or is there still some externalizing Germany can gain from the EU's continuing? So far they seem to continue to conclude the latter and will be willing to make certain sacrifices to prolong the EU. Which sacrifices? I think the element that counts is the extent to which a particular sacrifice impairs Germany's ultimate ability to pull the plug on the EU.

by rifek on Mon Jun 11th, 2012 at 01:15:13 PM EST
[ Parent ]

I'm not seeing an employer and investor of last resort who is definitionally solvent and prepared to carry out unlimited and unrestricted spending in the service of full capacity utilization.

Which means it won't solve the problem.

- 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 Jun 9th, 2012 at 09:09:29 AM EST
[ Parent ]

I was including in the list all the things I could think of which are already (in a smaller way) part of the Euro landscape or to which some parties are already committed to an which there therefore some chance that all would agree to as part of a package of acceptable and less acceptable measures.

Your suggestion of an unlimited investor and employer of last resort who is definitionally solvent and charged with ensuring full employment/capacity utilisation is so far outside the current universe of "serious" economic thinking that I can't see any of the major players currently embracing it - except in the aftermath of a major war or existential economic meltdown.

Don't forget most national elites are still living very comfortably - there are no reds under their beds; they are not afraid of a Communist revolution and the Unions have been neutered. Some street riots in a few city centres and an increase in petty crime is all they have to worry about. Why should they seek to fix a system that isn't broke - for them?

The social democrats stopped being a ruling force in Europe when elites no longer had to worry about revolution and found they had no need to compromise with the masses. We are now well into a period of rule by the elites for the elites. Why should they agree to a proposal which effectively ties their hands and limits their power to play off the lower orders against each other - something your proposal would render impossible.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot dotty communists) on Sat Jun 9th, 2012 at 09:39:01 AM EST
[ Parent ]

They won't.

Which is why the present depression ending in a major European war cannot be ruled out.

- 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 Jun 9th, 2012 at 09:49:37 AM EST
[ Parent ]

But if politics is he art of the possible would a package consisting of the 10 items I listed above make a significant contribution towards reducing the risk of a much more serious depression culminating in war?

And if so - how could Merkel be persuaded to adopt it?

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot dotty communists) on Sat Jun 9th, 2012 at 11:35:41 AM EST
[ Parent ]

By the time Merkel can be persuaded the risk of war is real (as opposed to a rhetorical ploy as in her own speech last year) it will be too late.

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Sat Jun 9th, 2012 at 01:51:32 PM EST
[ Parent ]

so you are saying war is more or less inevitable?

If so, by whom, against whom?

(And I don't mean the current class war fought by the elites against everyone else...)

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot dotty communists) on Sat Jun 9th, 2012 at 02:51:54 PM EST
[ Parent ]

There could be a civil war in Greece, for instance. Turning countries into failed states tends to have consequences.

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Sat Jun 9th, 2012 at 04:32:46 PM EST
[ Parent ]

A Civil War in Greece would presumably be between the elite and their stooges and the rest. Arguably that is happening to some degree now. But I took your reference to war to mean a return to the pre-EU era of international wars.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot dotty communists) on Sat Jun 9th, 2012 at 05:34:08 PM EST
[ Parent ]

Who knows what's next.

I'm still not seeing the level of political violence of the early 1930s, but ask me in 5 years' time. (We're having a violent miner protest in Spain right now, not quite at the level of 1934 yet...)

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Sat Jun 9th, 2012 at 06:19:39 PM EST
[ Parent ]

Migeru:

Who knows what's next

You seem to retreat into the ultimate unknowability of the future and your inability to do anything about the human condition whenever I try to game out how we might achieve better outcomes.

And then you accuse me of being an economist who takes the easy way out predicting that the sea will calm when the storm passes when I am actually suggesting positive outcomes are still possible where powerful institutional interests have vested interests in more positive outcomes.

Surely it is you who is taking the easy way out?

I know figuring out how the crisis may play out is difficult and fraught with uncertainties, but are we all supposed to just throw up our hands up in despair?

I know economists in general have a lousy track record in prediction, and sociologists often don't even try to predict future societal changes. But isn't politics partly about trying to figure out how things might be improved in the future even within the context of the real world (and economic interests) we live in?

I fear your fatalism is self defeating and in danger of becoming a self-fulfilling prophecy if everyone else took on the same attitude!

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot dotty communists) on Sat Jun 9th, 2012 at 07:17:18 PM EST
[ Parent ]

I fear your fatalism is self defeating and in danger of becoming a self-fulfilling prophecy if everyone else took on the same attitude!

Did you hear the news from Spain today?

I have no power of influence and I'm sick and tired of those who do making bad decision and ruining our futures.

I have been both predicting what would happen (with some success) and enunciating alternatives that I thought would work but I knew would not be adopted.

So, sue me.

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Sat Jun 9th, 2012 at 07:23:02 PM EST
[ Parent ]

Well FWIW you have influenced my understanding of economics, limited though it still might be, and I'm sure others would agree that you have been amongst the foremost thinkers on ET on how better economic policies might be formulated.

However you don't seem to have the same interest in analysing political processes and in how your policy proposals might come to be implemented (even if only in small part).

As you know, it is not sufficient for policy proposals to be self-evidently superior to current policies in order for them to be adopted. A process of education, persuasion, credibility building, coalition building, consensus changing/building has to be engaged in.

Why do crap economists get to be in influential positions of power? Partly it is because their theories don't challenge the current status quo or result in policy prescriptions which further the interests of their paymasters.

But you have often argued that current economic policies don't even serve the interests of the status quo in the way their progenitors think they do. So it may be that their progenitors are better at influencing/persuading/coalition building than other, more theoretically sound economists.

So shouldn't a really good all round economist - acting as a change agent - also be interested in the processes of persuasion/influencing that can result in better policies being actually adopted and implemented?

"Enunciating alternatives" is probably the (relatively) easy part. Actually getting better stuff implemented can be incredibly hard. I learnt the hard way, in business, that the best proposals/ideas rarely get adopted/implemented unless you've done a lot of groundwork with the decision makers beforehand and build up a track record of credibility and success. Brand building applies as much to schools of economic thought as it does to more mundane products or services.

At some time you have to stop decrying what is and start building what needs to be built for a better future. Being a prophet crying in the wilderness only gets you so far. Even Keynes had to start somewhere.

So I won't sue you. But I do have an annoying habit of challenging people to use their formidable abilities to better effect! It rarely endears me to them at the time. But some have gone on to do great things.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot dotty communists) on Sat Jun 9th, 2012 at 08:19:33 PM EST
[ Parent ]

You jest.

I have no formidable abilities when it comes to political persuasion, and you know it. And I hope you're not referring to me when you speak of "a really good all round economist acting as a change agent" because I'm neither.

And you confuse "interest in analysing political processes" with "interest in participating in political processes" which, once analysed, I find repugnant, and in which, analyzing myself, I would be unlikely to succeed.

I do what I think I can do well and leave it to others to do what they hopefully will do better. And I have the annoying habit of not agreeing with people who think I have some sort of responsibility to do anything in particular with the abilities they think I have.

If enunciating alternatives is the easy part, I invite you to do it yourself. And since you're the better politician, to build the brands, coalitions, etc, necessary for a better future.

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Sat Jun 9th, 2012 at 08:47:01 PM EST
[ Parent ]

Well it's you who accused me of being an economist who takes the easy option, and if I had had the skills to be a politician, I would have given it a try. I'm not suggesting you have any responsibility to do anything you don't want to do: merely that putting everything down to the "human condition" or suggesting it is pointless trying to do anything because no one knows what the outcome might be isn't up to your usual standard of analysis. You predicted war as a more or less inevitable outcome of what is currently happening, so I felt it was worthwhile trying to explore why you thought that had to be the case and whether more positive outcomes might still be possible. My apologies if I have misunderstood your position. I can see this conversation isn't leading anywhere at this stage so I propose to end my contribution to it here.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot dotty communists) on Sat Jun 9th, 2012 at 09:27:17 PM EST
[ Parent ]

i think if you stare too deep into the abyss, you tend to fall in.
despair at the human condition is pretty much the stimulus for seeking a better one.

it's a fine line between trying to warn one's hapless fellow humans of dangers ahead and projecting one's own fears on to the future, even creating self-fulfilling prophecies.

orwell tried this, and now his prophetic warning has become a recipe book for tyrants everywhere.

conversely, project too much of one's innocent optimism on the future and you end up with shallow, blue-sky thinking that leads nowhere.

scylla and charybdis...

i think if one could fuse all the talents evinced on ET into one charismatic individual, you'd have a great global statesman/woman.

however, great ideas don't always rebound well on their ideators! :(

The power of knowledge is in mortal combat with the knowledge of power. It really is that simple... That's the Edenic apple we are all munching on.

by melo (melometa4(at)gmail.com) on Sat Jun 9th, 2012 at 11:42:31 PM EST
[ Parent ]

You seem to retreat into the ultimate unknowability of the future and your inability to do anything about the human condition whenever I try to game out how we might achieve better outcomes.

The problem is that right now the future is not merely unknowable in some abstract philosophical sense, it is also impossible to forecast. Forecasting relies on extrapolating the interests, circumstances and institutional tools of people and social groups into the future. But in this case, a lot of people are acting contrary to their medium-term interest, because their circumstances are going to change in ways they appear to not currently realize, and the institutional structure within which they act is fundamentally unsustainable in the medium term.

Which means that the outcome depends on (a) how rapidly people realize the conflict between their short-term interests and their medium-term interests, (b) how rapidly people can adjust their actions and tools in light of this realization and (c) whether the unsustainable current institutions prove weaker or stronger than the sustainable current institutions.

All of these are unknowable to outside observers - and perhaps even to inside actors - because they depend on unobservable subjective conditions.

As an example of this problem, we may observe that a war is not in Germany's or the Netherlands' interest. However, we may also observe that until this moment the austerity neurosis has not once been successfully cured, save by the circumstance of finding oneself on the receiving end for an extended period of time. And during that time, the logical propaganda ploy to pacify the German or Dutch public, given the internal logic of current narratives, is a dolchstosslegende about how the feckless Southerners skipped town before paying their tab, and how "we" must now tighten our belts to make up for it.

By the time the currently pro-austerity forces pull back from that brinkmanship, they may well find that they are already over the brink. Or they may not. It all depends on the subjective conditions in decisionmakers whose state and flexibility of mind I do not know. But so far, facts on the ground are not encouraging of the view that they are sane nor particularly farsighted or intelligent.

- 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 Sun Jun 10th, 2012 at 04:18:47 AM EST
[ Parent ]

I appreciate the difficulty of making predictions or even gaming out possible outcomes of current policies. However if you ARE going to make predictions that current policies WILL lead to war then you have to be able to make out some logical case describing the mechanisms whereby current policies will lead to war between who and who, and with what outcomes. You can't say the future is unknowable and then make bold predictions about the inevitability of war all within the same comment thread.

The other general point I would make is that policymaking is all about gaming out what policy measures are required to prevent certain undesirable outcomes and increase the probability of desirable outcomes. When you are a policymaker, you don't have the luxury of academic detachment. You are an actor in the system, and if you want to gain support for your proposals you have to be able to show how your proposals will make things better, at what cost, and for whom.

Clearly current policy makers haven't been making a good fist of this. However if we want to become more influential, or want polcymakers sympathetic to our approach to become more influential, we have to make a case that our policies would have better outcomes than current policies. It is not enough to say current policies have failed to meet their stated objectives or that they will - in some manner yet to be argued - inevitably lead to war. We have to show that there are better policies which can address the minimal requirements of all key players more effectively to the general incremental benefit of the common-weal than current policies.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot dotty communists) on Sun Jun 10th, 2012 at 08:37:20 AM EST
[ Parent ]

I appreciate the difficulty of making predictions or even gaming out possible outcomes of current policies. However if you ARE going to make predictions that current policies WILL lead to war then you have to be able to make out some logical case describing the mechanisms whereby current policies will lead to war between who and who, and with what outcomes. You can't say the future is unknowable and then make bold predictions about the inevitability of war all within the same comment thread.

I don't. I say that it is a realistic possibility, because austerity creates the objective conditions for a revolutionary institutional change, while the pro-austerity propaganda seeks to externalize the blame for the catastrophe it causes to social out-groups.

If I have to place bets, I would have to say that I trust in the French nuclear deterrent to preclude a major European war. But I could easily see a coup d'etat in a Mediterranean or Balkan EU member with less than ten million inhabitants receiving more or less overt armed support from creditor nations. Or a Yugoslav wars style punitive expedition against an anti-austerity government that purges its police, press, civil service and/or central bank of far-right agitators.

Do I really think it will get that far? No, I think that the creditor countries will back down from their brinkmanship after the Greek default. But I acknowledge that (a) we are in a situation where it is not historically unprecedented for major powers to fail to back down prior to going over the brink, (b) I can see no plausible story about how they can back down, given the narratives they have cooked up for themselves and their clients, and (c) our political class has, throughout this crisis, consistently underwhelmed even my most pessimistic forecasts.

We have to show that there are better policies which can address the minimal requirements of all key players more effectively to the general incremental benefit of the common-weal than current policies.

Under the present narrative, there are no such policies. The minimal requirements of creditors and creditor states, under the narratives in which they currently operate, involve a repeal of the rules of addition and subtraction.

That means that the dominant narratives will change. The historically default way for human society to change a dominant narrative that is so deeply locked in society's institutions involves lining people up against a wall and shooting them.

Of course, the historically default way for creditor states of obtaining compliance from debtor states involves parking a gunboat offshore from their capital. So you may argue that Europe has a good chance of not reverting to historical norms in this crisis. And you may even be right. But right now, both those stories are plausible.

- 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 Sun Jun 10th, 2012 at 10:41:52 AM EST
[ Parent ]

I think the current dominant narrative is more fluent that you suggest with powerful actors taking quite different positions, and others hinting they are open to change should other conditions be met. Hence I made up a shopping list of 10 actions above which might constitute a package of measures capable for addressing the crisis at the same time as containing at least some elements favoured by each of the key players and thus minimally acceptable to them as a whole - provided they were convinced it would deliver a "full and final" resolution of the crisis and not constitute just another of a series of concessions they are constantly being asked to make.

In the peace process in N. Ireland negotiations were extremely protracted with all parties signalling publicly and privately the elements which were their "bottom line" minimally acceptable and utterly unacceptable elements. The mantra repeated by all was "nothing is agreed until everything is agreed" to provide cover for participants engaging on proposals which would, in isolation, have been absolutely unacceptable to their constituents.

Lets not forget that most public utterances are part of an ongoing negotiating raindance designed to influence outcomes but only partially sacrosanct in the context of a "comprehensive" settlement containing elements both favourable and unfavourable from the point of each participant.

The key issue for structuring such a negotiation is "Are all the key players with a stake in ensuring a successful outcome represented around the table?" as there is no point in coming to an agreement which does not include all the key players who could sabotage the outcome. Thus all the earlier peace process talks which took place without IRA involvement were futile because the IRA laying down its arms was the only way peace could be achieved. There was little point in the SDLP agreeing something if they could not deliver the support of militant groups.

Part of my reason for some optimism is that almost all of the key players are represented, to some degree, in key EU fora. Some may not be negotiating very well, and others may be over playing their hands, but whilst these institutions remain in place there is always the possibility of slow, incremental process. Reality has a way of interrupting "business-as-usual".

So I don't really see the French nuclear deterrent being relevant to intra-EU conflicts unless the whole institutional infrastructure breaks down. I think we are all underestimating the resilience of the foundations of the EU which have served Europe rather well for 60 years. The architecture of the EU had some known structural flaws - and this is the reaons for much of the current crisis, but that does not mean that the other institutions of the EU cannot move - very slowly - to fix those flaws.

The processes of political and institutional change can be painfully slow and extremely frustrating for the participants - but do not necessarily include war, repression or firing squads on a large scale. The yearning for a benign dictator who can just make decisions and make things happen is not one that we should buy into. Dictatorships are, notoriously, even more inefficient that the "chaotic" democracies they seek to denigrate.

I have a visceral objection to "war is inevitable" narratives because they can become self fulfilling prophesies and betray so little understanding of the complexities and possibilities fro transformational change within peaceful mechanisms. Neither will I join the ranks of professional pessimists and cynics.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot dotty communists) on Sun Jun 10th, 2012 at 11:26:36 AM EST
[ Parent ]

The most worrying feature in this whole sorry saga is the penchant of the creditor country elites and the EU economic policy establishment for meting out (economic) "punishment" or advocating same, and the favourable reception such rhetoric or actions have received from public opinion, goaded by the press.

There is already an established narrative of moral superiority centered on national/cultural/ethnic divisions. This narrative is popular with a sizeable segment of the population, is promoted by the press and is used by the politicians.

And you want to talk about "the politics of the possible".

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Sun Jun 10th, 2012 at 01:03:57 PM EST
[ Parent ]

This underlines the failure of the European project to promote a European identity. The economic pretext, by which (supposedly) pooling (supposed) common economic interests would lead to greater integration on all other fronts, is responsible for this failure. Because 1) the time has long gone by that any equitable pooling was in fact taking place; 2) the focus on economics obstructed the necessary efforts on other fronts, by eating up resources and/or being a pretext for inaction.

by afew (afew(a in a circle)eurotrib_dot_com) on Sun Jun 10th, 2012 at 02:18:06 PM EST
[ Parent ]

The failure was accepted as inevitable when the Eurozone was unable to agree on real monuments to put on Euro bills. As if somehow picking the Colosseum for a representative building from antiquity for the 5 euro bill would have offended those North of the Rhin. Would it? I find it preposterous but the politicians obviously thought it was a problem.

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Sun Jun 10th, 2012 at 05:25:46 PM EST
[ Parent ]

Do you now even want to turn the buildings on the Euro-Bill into a german conspiracy?

What is next, everybody searching for free-masonic symbols?

by IM on Sun Jun 10th, 2012 at 05:32:25 PM EST
[ Parent ]

Of course it wasn't a German conspiracy, just the idiocy of the Brussels establishment and their inability to come up with suitable symbols. I said the design of the bills was an admission of the impossibility of forging a common european identity, not a heinous ply to prevent an identity from arising.

I would have had nothing against using the Brandenburg Gate for the 100 Euro note or the Colosseum for the 5 Euro note, but either my fellow European citizens would have, or the politicians themselves projected their own hangups onto the populatin at large as an excuse.

Like all symbolic facts it's a silly thing if analysed rationally, but we're talking politics and symbolism matters.

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Sun Jun 10th, 2012 at 05:47:28 PM EST
[ Parent ]

It was an admission of weakness. Some countries obviously would have left out. But there wouldn't have been a problem to give Germany, France , Italy and Spain a suitable building each.

"but either my fellow European citizens would have, or the politicians themselves projected their own hangups onto the populatin at large as an excuse."

Rather an excuse.

by IM on Sun Jun 10th, 2012 at 06:00:14 PM EST
[ Parent ]

In particular, when they decided to put "classical antiquity architecture" on the 5 Euro bill, that means Roman Empire of which the Rhine was the border at maximum extent. Excuse me for using the dogwhistle phrase North of the Rhine, I really wasn't expecting anyone to be that sensitive.

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Sun Jun 10th, 2012 at 06:03:55 PM EST
[ Parent ]

Migeru:

And you want to talk about "the politics of the possible".

Is there any other kind?

Was there any less fear and loathing between N.I. Loyalists and Republicans? Or South African whites and black for that matter?

The petty chauvinist prejudices that have been stoked up over the Euro crisis are pretty trivial compared previous antagonisms and hatreds between Nazis and Jews, the Germans, French, Spanish and British etc. which led to centuries of wars.

I think we need to take a longer historical view on this. The present Euro crisis could come to be seen as little more than a blip on the radar screens of history if (and it is a big if) we can resolve the crisis before it gets a lot worse.

Just because our leaders and MSM have such petty agendas and limited vision doesn't mean we have to buy into their narratives prejudice and racial superiority, and neither should the presence of those petty narratives drive us to cynicism and despair.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot dotty communists) on Sun Jun 10th, 2012 at 06:35:44 PM EST
[ Parent ]

Austerity has already created at least one failed state, and I would be very surprised if already implemented austerity has not outright killed somewhere on the order of ten thousand Greeks and Baltics by this point.

There's an order of magnitude or two to go before we reach "Russia in the '90s" level of disaster, let alone "African civil war." But we are some way past "blip on the radar."

- 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 Sun Jun 10th, 2012 at 07:22:51 PM EST
[ Parent ]

It will be studied by future economists as an example of how not to run a currency union.

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Sun Jun 10th, 2012 at 07:25:48 PM EST
[ Parent ]

Alas, it probably won't. If the history of economic thought is any indication.

- 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 Sun Jun 10th, 2012 at 07:29:00 PM EST
[ Parent ]

Greece had a lot of problems before austerity exacerbated them - an almost complete lack of modern industrial infrastructure, a lack of an efficient tax collection system, and an appallingly inefficient and corrupt public administration system. The Greek elite were getting a free ride. Of course austerity isn't going to solve those problems, but many, assuming creditor nations were never going to bankroll Greece indefinitely, were going to come sooner or later in any case, with or without the Euro, although a currency devaluation would have been a lot less painful.

In allowing Greece into the Euro and lending so excessively for so long, the EU took on some responsibility for these problems, but not all.

Ireland still has issues with a rapacious private medical industry and an appalling legal monopoly which allows the legal profession to charge outrages fees for antiquated services. We can't blame that on the EU. There never was a time when people weren't dying needlessly for lack of prompt medical care. It's a scandal, but not entirely a Euro scandal. You can't take an idealised welfare state as your baseline for countries which never had anything remotely approaching that.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot dotty communists) on Sun Jun 10th, 2012 at 07:50:23 PM EST
[ Parent ]

I'm not. If I were, the numbers would be a good deal higher (though probably still in the same ballpark - "give or take half an order of magnitude" is a large ballpark after all).

I'm using Russia in the '90s. Less than ten years of "shock therapy" killed on the order of 1 % of Russia's population (most respectable studies place the excess deaths attributable to deteriorating economic conditions around 1 million Russians). Greece, Estonia and Latvia have now had two full years of austerity.

Assuming that the Russian experience is reasonably representative (and there is no reason it shouldn't be), and assuming (conservatively) that for the first decade of austerity cumulative casualties is quadratic in time (people and communities take some variable time to exhaust their reserves before going tits-up), that gives a guesstimate of four in ten thousand. Greece, Estonia and Latvia have a combined population on the order of 20-25 million people. So, back-of-the-envelope math says somewhere on the order of ten thousand casualties. So far.

To place these numbers in context, a mortality of two in ten thousand per year on average is around three times the ordinary mortality from traffic accidents, either two or three orders of magnitude more than from terrorist attacks (depending on whether you count the WTC attacks in your average), and one and a half order of magnitude less than from heart and circulatory disease.

- 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 Mon Jun 11th, 2012 at 03:42:13 AM EST
[ Parent ]

Greater fiscal integration, oversight, and harmonisation conducted by an EU Commission "Budget Office".

an unlimited investor and employer of last resort who is definitionally solvent and charged with ensuring full employment/capacity utilisation is so far outside the current universe of "serious" economic thinking that I can't see any of the major players currently embracing it

a "full and final" resolution of the crisis and not constitute just another of a series of concessions they are constantly being asked to make.

Pick at most two.

- 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 Sun Jun 10th, 2012 at 01:19:43 PM EST
[ Parent ]

Given its record why should any think that the EU Commission would usefully accomplish anything? How about converting the EU to a parliamentary form of governance or a more balanced formal executive-legislative-judicial system?

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Jun 11th, 2012 at 04:15:44 PM EST
[ Parent ]

The problem with analogies to peace settlements is that, so long as you can get every major armed group to agree on them, there are no borders which are fundamentally unworkable. They can be impractical, but any peace agreement that can be reached between every major stakeholder can be upheld.

By contrast, there are forms of economic organization which cannot work, no matter how great the unanimity is among the relevant stakeholders that they should be made to work. Every Eurozone state can ratify a paper saying that every state should be a net exporter. But as long as the Euro floats against the yen and dollar, and so long as China retains its current development strategy, that is not going to happen in the real world.

The rules of addition and subtraction are not subject to political compromise.

- 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 Sun Jun 10th, 2012 at 01:28:38 PM EST
[ Parent ]

Most political settlements contain contradictory and unworkable elements which have to be revisited and revised as reality intrudes. There never is a final solution to economic problems. The current Euro architecture is probably the best than could be agreed 20 years ago. Virtually everyone is now agreed it requires serious revision, and if the next major revision lasts 20 years we will be doing very well indeed. (I wouldn't pitch my expectations so high given our current crop of leaders).

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot dotty communists) on Sun Jun 10th, 2012 at 06:46:13 PM EST
[ Parent ]

An agreement to federalize budget decisions without federalizing the responsibility for macroeconomic stabilization won't last twenty days, nevermind twenty years. It won't even stop the crisis from getting worse, because the crisis is one of inadequate macroeconomic stabilization.

- 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 Sun Jun 10th, 2012 at 07:09:39 PM EST
[ Parent ]

I think a possible scenario for EUropean war is 1848ish. The austerity leads to revolutions and/or civil war in countries in the periphery and other states intervene to restore order in cooperation with local right wing elements. Call it Libya on the northern shore.

I don't see how a big war between EUropean powers in any near future considering that big wars takes planning, manpower, equipment etc. How many years did the Nazis spend with building the military?

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 Sun Jun 10th, 2012 at 04:26:55 PM EST
[ Parent ]

About four years from the commencement of military expansion in '35. Though they weren't really finished building it by the time the balloon went up. They just had the good fortune that neither were the French (and the British were just pitiful).

But that's not the question you need to ask yourself. The question you need to ask yourself is when the political dynamic had moved to where war could no longer be avoided. And that wasn't '39. It was certainly some time after '29, most probably even after the '33 Nazi takeover. Perhaps even sometime after the beginning of the '35 military buildup. But probably not after the '38 Anshluss, and almost certainly not after the first München conference.

So I'm thinking that once visible military buildup commences, you have probably passed the mark for 50 % probability of war.

I'll leave it to someone more knowledgeable about the particulars to discuss the lead-up to the wars in Spain and China.

- 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 Sun Jun 10th, 2012 at 05:02:20 PM EST
[ Parent ]

Adding that... (none / 0)

... of course the military buildup can be argued to have actually begun much earlier than '35, because a relatively large number of people had already been mentally conditioned for armed struggle by the escalation of political violence caused by Brünning's austerity regime.

But I would argue that this does not materially alter the timeline.

- 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 Sun Jun 10th, 2012 at 05:09:47 PM EST
[ Parent ]