Thu Mar 26th, 2015 at 07:50:39 AM EST
If economic crisis were a venereal disease, would we continue to engage in risky economic behavior?
Does short-term gratification always trump long-term health?
Are we just children in the marshmallow experiment?
Are our economic systems doomed by the insufficiently stoic character of the majority of human beings?
Eight years and eighteen days ago, das monde wrote a diary titled Is Civilisation A Pyramid Scheme? in which he remarked:
As I write, financial markets are having a bad day across the world, after a rocky week. Can we make more sense of this than a combination of factors?
The hypothesis is that the modern economy is dominated by ever increasing and ever expanding speculation in stock and real estate markets. These markets will grow just as long as the volume increases. The markets are vastly overvalued due to a pyramid-style growth of the number of players. The markets will fail when there won't be any bottom to add to participants' pyramid.
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Thu Mar 19th, 2015 at 02:31:59 AM EST
On the national holiday today [15 March], it was another day of grim protests in Budapest. For the first time in five years, hecklers attended the speech of right-populist prime minister Viktor Orbán, and there were some fights between pro- and anti-Orbán protesters. However, what I want to tell more about is a new low in authoritarian behaviour preceding the protests, and the fate of an acquaintance I ran into at the main opposition protest.
by Upstate NY
Sun Mar 15th, 2015 at 03:03:23 AM EST
Greece: Phase Two | Costas Lapavitsas | Jacobin
Schäuble is on record, or at least Greek ministers are on record, stating that Schäuble offered an aided exit to the Greeks already back in 2011. I can see, from the perspective of the German power structure, why they might be tempted by this idea, and I can see it as an objective worth fighting for by a Greek left government, for obvious reasons.
Whether there are divisions within the German establishment on it, I don't really know, because I don't understand the details of the German political debate. But the argument can be so compelling at the general level that I can be reasonably optimistic.
If the Greek side fought for it, and indicated that they wished to accept it, I think that a compromise could be reached that would be in the interests of Greek working people as well, not just the Greek elite, because you would avoid the difficulties of the contested exit.
That is definitely worth fighting for. And I would argue that this is what the Syriza government should be gearing itself for in the coming period. But, I repeat, if that proves impossible, even contested exit is better than a continuation of the current program.
While I accept his implied criticism of Varoufakis and Tsipras is likely right on target (bad strategy, personality clash with EU), this critique and reading of Syriza's strategy is based on the very idea that the EU is at all amenable to a soft Grexit.
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by Frank Schnittger
Sat Mar 14th, 2015 at 03:39:43 PM EST
UK Prime Minister David Cameron has promised to hold a referendum on the UK's membership of the EU should the Tories win an overall majority at the next election due in May. Never mind that his pledge was mainly to fend off the challenge of UKIP, and that he hopes to have negotiations with the EU in the meantime which might address some of the criticisms many Britons have of the EU. Opinion polls in the UK have been sharply divided on Brexit (with a trend favouring remaining in more recent polls), and any renegotiation of the UK's terms of membership is likely to influence the outcome of the vote.
The fact is however - whether Murdock media inspired or not - that many Britons lack a sense of fellow feeling with their compatriots in EU. They view their security as being guaranteed in large part by the USA and look to the EU as little more than a free trade area with a lot of unwanted immigration and meddling bureaucrats which need to be cut down as much as possible. There appears to be a disconnect between the business elite - generally very much in favour of British membership - and the working and lower middle classes who are much more concerned with the impact of immigration on their job prospects and the social and cultural life of the UK - an impact they blame on the EU, even though net immigration very much predates membership of the EU.
The irony is that there are now more than a million Britons living in France and Spain whose residency status and health care could be severely impacted by Brexit. But many of these don't have a vote, or won't go to the trouble of voting. Some indeed, would vote for UKIP in any case. The little Englander mentality runs deep even in some of those who have made their homes elsewhere. Basically many in the UK want the benefits of being part of a large market without bearing any of the costs of social solidarity which the EU ideal mandates.
It is doubtful whether the implications for ex-patriots or neighbouring states like Ireland will have a huge bearing on any UK referendum debate. The implications for N. Ireland could be very serious indeed. So much so that the Irish Department of the Taoiseach (Prime Minister) is setting up a specialist unit to consider and prepare for such a development - having stayed studiously neutral and silent on the Scottish independence debate. Follow me below the fold for an initial assessment of what the implications for N. Ireland and Ireland might be.
Sat Mar 14th, 2015 at 08:20:22 AM EST
In the last few weeks, I made excursions to two castles that have been in ruins since Ottoman times, both of them destroyed in somewhat inglorious fashion. So here is a light diary that is a bit of travelogue, a bit of history, and a bit of train blogging.
The partly rebuilt northern bastion and the remains of the exploded main tower of the castle of Nógrád, with the Börzsöny mountains in the background
Thu Mar 12th, 2015 at 06:41:16 PM EST
I will probably be a random poster
This is really to say thanks for all the posts people have made
DoDo, railways were always worth travelling, your diaries sold some to my wife.
Thu Mar 12th, 2015 at 02:56:50 AM EST
It's an all too common story across the world: a government tries to boost its green credentials with a support scheme for renewables, but when it proves an unexpected success and established power companies see a serious market share threat, the nascent industry is choked to death one way or another. Stark examples include the ceiling for total wind power introduced in Austria and Hungary about a decade ago, or the end of the support scheme in Bulgaria just recently. Under the cover of austerity, the transition to renewables can be killed even when they already reached a high penetration, as demonstrated by the example of Spain's retroactive elimination of subsidies.
So is it possible to create a momentum for renewables that carries on even when facing opponents with the worst intentions?
One can argue that Denmark comes close: while Anders Fogh Rasmussen's government did manage to bring new wind power installations to a near-stop over a decade ago, that was only temporary as they found the two big utilities became supporters and off-shore wind took off. Now, looking at the latest numbers from Germany, I see something similar at work.
by paul spencer
Wed Mar 11th, 2015 at 02:02:19 PM EST
For those who don't know, I have 3 partners in an LLC, and we have been working on the following project for the last 3 years. Looks like we are getting close.
Here is our latest update report. It re-introduces some of the history of the project as a device to remind folks on our e-mail list about certain development details, since I only send out an update about every 6 months or so.
Sat Mar 7th, 2015 at 09:11:27 PM EST
Here's the text of a presentation I did March 4, 2015 at Northeast Sustainable Energy Association's Building Energy conference in Boston, MA. This was the first time the conference addressed urban agriculture.
Everybody eats and it's primarily solar powered. We are all solar powered through the food that we eat. Officially, we produce between 95 and 100 quadrillion btu's of energy per year in the US, an amount that's remained steady for the last 15 years or so while the GDP has continued to increase. However, we don't count any of the sunlight that powers photosynthesis on the crops we consume. All that sunlight is "free" and not included. A back of the envelope estimate is that there's at least 300 quadrillion btu's of sunlight required for the photosynthesis that grows our food. Our world is solar powered, has always been solar powered, will always be solar powered until the sun dies out.
Everybody eats and, by last count, 35% of all households in America, or 42 million households, are growing food at home or in a community garden, up 17% in the last five years. Gardening for food tends to go up in times of economic distress. Add those households which grow flowers or have a houseplant and I'd estimate about half of us garden.
Everybody eats, half of us garden, and everybody poops. In a fully functioning ecosystem "waste equals food." Cities, neighborhoods, and buildings are all beginning to be seen and designed as metabolisms, taking in raw materials, processing them, and producing wastes which can then be used as a feedstock for other processes. We are becoming biomimetic and learning from such fellow creatures as termites how to control heat and cold and humidity. Termites also "garden" and keep livestock, one of the ways that the temperature and humidity remains constant within their mounds. We are also learning how we can design ecological systems to process our own wastes safely into fertilizer and food.
Sat Mar 7th, 2015 at 04:27:04 PM EST
Back in December I told that I embarked on a quest to watch some movies I missed over the last few years. At some point this changed into a quest to view recent classics of Japanese cinema.
I present short critiques grouped into four comments. Which ones have you seen (especially of the Japanese ones)? What were your impressions? What relatively recent movies would you recommend? (I mean especially the not most recent which I can no longer capture in the cinema.)
Sat Feb 28th, 2015 at 04:23:41 AM EST
Considering the interest in alternative currencies, I did not want to leave the discoveries of this community sitting inside a long comment thread. In particular since a write-up I did in Swedish got some attention.
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by Frank Schnittger
Thu Feb 26th, 2015 at 03:29:43 PM EST
I once wrote a diary on the The negotiation Process and even considered making it the topic of a putative Phd. research proposal before deciding that the gulf between academia and practice was too large to bridge: there simply wasn't any good academic literature on the negotiating process that I could find, and no one could be found with the interest and expertise to supervise such a research topic. I raise the topic here because I am fascinated by the negotiating style adopted by Yanis Varoufakis and am still wondering whether he will ultimately be found to have been an effective negotiator on behalf of Greece.
Yanis Varoufakis interview: `Anything's better than austerity'
When asked whether Greece could have achieved more had it adopted a more conciliatory approach at the euro group, as his counterpart Michael Noonan and other Irish Ministers have suggested, Varoufakis delivers an emphatic "absolutely not".
While he declined to respond directly to Noonan's recent comments likening him to a rock star and to academic economists and experts that were very good in theory but not good in practice, he said Greece's previous experience in Brussels meant a robust approach to negotiations was essential.
"My predecessors in this job went along with the eurogroup's policies to the full. They bent over backwards to accommodate the memorandum and the policies of internal devaluation and fiscal consolidation, and the so-called reforms that were imposed on Greece."
And he points to where that has landed Greece. "It has been a complete and utter catastrophe. There's humanitarian crisis is on the boil because they were so `good in practice', this is quoting Michael Noonan. And I hope that I'm not so good in practice."
Regarding Noonan's other criticism that he was too theoretical, the Greek minister says he understands that "my colleagues in the eurogroup were disconcerted that one of their members insisted on talking macroeconomics".
"One of the great ironies of the eurogroup is that there is no macroeconomic discussion. It's all rules-based, as if the rules are God-given and as if the rules can go against the rules of macroeconomics.
"I insisted on talking macroeconomics."
But Varoufakis said he welcomed Noonan's comments, made at a conference in London on Wednesday, that he agreed in principle with the idea of swapping Greece's official debt for growth-linked bonds.
"Michael Noonan is quite right. We need to restructure Greek debt. My proposal for GDP-linked bonds has one purpose: to increase the amount of money we give back to your partners by encouraging them to allow us to grow."
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Tue Feb 24th, 2015 at 11:06:30 PM EST
Cities scale is where real climate change adaptation is taking place, now, whether or not we have national or international agreements on greenhouse gases. Cities and regions have to deal with weather emergencies and, it turns out, preparing for weather emergencies and other natural disasters is very much like adapting to climate change. The best of it can be climate mitigation, too.
One way cities are climbing the learning curve is by holding design competitions. In Boston, the city, the Harbor Association, the Redevelopment Authority, and the Society of Architects are hosting Boston Living with Water, an international call for design solutions that create a "more resilient, more sustainable, and more beautiful Boston adapted for end-of-the-century climate conditions and rising sea levels." They will be announcing the finalist on Thursday, February 26 but you can vote on which of the 49 different plans you like until 12 pm (EST) on Wednesday, February 25 at http://www.bostonlivingwithwater.org/submission-gallery
The contest is based upon the recent reports by the Harbor Association on sea level rise and the Building Resilience in Boston study by the Green Ribbon Commission. Supporting documentation also includes "Designing with Water: Creative Solutions from Around the Globe" which presents twelve case studies from around the world [pdf alert]:
World-wide networks and best practices case studies can be very helpful.
Mon Feb 23rd, 2015 at 07:27:12 PM EST
The gvt of Greece had, according to the February 20 deal in the Eurogroup, until today to send a list of "reforms" to its creditors, which would form the basis of a revised program. This has been agreed to be postponed until tomorrow morning [Tuesday 22]. According to a SYRIZA non-paper, translated by Damian Mac Con Uladh here is a general description of what the Greek government will be sending to the Eurogroup FinMins Tuesday:
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Sun Feb 22nd, 2015 at 04:20:54 PM EST
Here is a short update on politics in Hungary: the right-populist government of Viktor Orbán lost its two-thirds qualified majority in parliament.
Orbán's Fidesz won its first two-thirds majority in 2010 with 52.3% of the vote (thanks to its non-proportionality), then, although its share of the vote dropped to 44.9% in 2014, it retained its power to change any law and the Constitution at will (thanks to changes to the election system making it even less proportional). However, the second two-thirds was secured just barely, and when Orbán's up to then faithful foot-soldier Tibor Navracsics was made European Commissioner for Education, Culture, Youth and Sport, his seat was up for grabs.
The by-election was held today, and an independent candidate (who left Fidesz a decade ago) supported by the centre-left and centre-right opposition parties (who got 42.7%) easily defeated the Fidesz candidate (33.6%, against the 47.2% Navracsics carried last year). This is only the second defeat of significance for the Fidesz government, after Orbán was forced to withdraw an internet tax last autumn.
Sat Feb 21st, 2015 at 04:38:34 AM EST
While the Greek finance ministry is busy preparing their reform program to be presented to 'The Institutions' by close of business on Monday, the press is busy adjudicating victory in the
deathmatch between Schäuble and Varoufakis.
This is the Varoufakis view:
And this is the Schäuble view.Now, my own opinion is that Varoufakis got what he wanted. On Sunday night he had a draft proposed by Moscovici which he was ready to sign and to which he "added come conditionalities of their own" as a show of good will and to sweeten the deal for the other side. To this the Eurogroup reacted with a different, "unacceptable" draft. And so on Thursday Varoufakis presented a blend of the Moscovici and Dijsselbloem drafts, together with his own conditionalities. This was rejected out of hand by the German finance ministry.
The fact that the agreed draft is fairly close to Varoufakis' letter on Thursday is a German climbdown from that flat out rejection. But judge for yourselves: the two texts are side by side below the fold.
Fri Feb 20th, 2015 at 12:06:02 PM EST
Paper: Is Our Monetary Structure a Systemic Cause for Financial Instability? Evidence and Remedies from Nature
(Directly linking is beyond my power, have to Google it.)
Fri Feb 13th, 2015 at 04:32:14 AM EST
Cross-posted from The Court Astrologer
Now that the Greek cliffhanger has moved on to whether Tsipras will give in to Merkel or not, let me go back to the debate over the past two weeks on Yanis Varoufakis' position on the Troika. The favourite claims of the Very Serious People
were that the Greek government was making different statements abroad from what it said in Greece, that it was flip-flopping on their acceptance of the "program", or that Varoufakis in particular was one day saying he rejected the memorandum in toto
and the next that it accepted 70% of the reforms, as if that were a contradiction.
In fact, to understand the Greek position one need only pay attention to what Varoufakis (mostly) has been saying, as opposed to what the press said he has been saying, and not assume that just because Syriza are radical leftists they must be talking nonsense. With this in mind, let's take a look at Varoufakis' second address to the Greek Parliament on February 10, during the debates preceding the new government's confidence vote. It is not hard to see that Varoufakis' position can be summarised as follows:
- The "memorandum" is a "pyramid scheme" whereby an insolvent Greece is made to indebt itself further in order to pay its creditors on condition that it shrink its income.
- The "program" is a "fig leaf" intended to cover up the fraudulent logic of the "pyramid scheme" "memorandum".
- The "troika" are bureaucrats sent to Greece to implement "austerity" and with no authority to discuss the "reforms" they are charged with overseeing.
- Some of the "reforms" happen to be positive, some negative, but this is all incidental as they are part of the "fig leaf".
- The SYRIZA government agrees with 70% of the "reforms" and considers the rest "toxic".
- Because the "troika" bureaucrats do not have the authority to discuss the "toxic" reforms, the SYRIZA government does not recognise them as interlocutors. It does recognise the "institutions" and "partners" with an authority to discuss the "reforms".
- The SYRIZA government is willing to negotiate a new "program" with the legitimate "institutions" and "partners", but not to extend the existing "fig leaf".
- The SYRIZA government "accepts 0%" of the "memorandum" and its "austerity" "pyramidal logic".
As this was already clear at least since the press conference with Schäuble 5 days earlier, serious people
who make snide remarks about 70% not being the same as 0% are being intellectually lazy.
To illustrate the depths of misrepresentation, be it due to laziness or dishonesty, in the serious people's commentary, let's look at Varoufakis' "cunning plan" for negotiating with the Eurogroup:
Our only tactic, ladies and gentlemen of the Opposition, would be to come up with reasonable, sensible proposals. I will not go with any available tacticism. Although I have spent many years of my life with game theory, I assure you that it will not apply it. Game theory is for gaming. Not playing with the future of Greece. Not playing with the future of Europe. Without bluffs, without twists and turns, this is our "cunning" tactic.
Now look at the reporting:To substantiate my above interpretation of Varoufakis' position, here is an excerpt from the Greek Parliament's official journal for February 10
[.doc file], google-garbled. To find the speech in the very long file, just perform a textual search for 'ΒΑΡΟΥΦΑΚΗΣ' (all caps) which indicates he's the one speaking, whereas lower case returns dozens of hits of references to him by other speakers.
The Memorandum for us very simply defined. Was that the combination of new debt accumulated over already unsustainable loans and private debt, provided the shrinking incomes, from which have to be repaid the old and new loans. That was the understanding.
This is the memorandum which was born in 2010 and which remains philosophical, macroeconomic, morally toxic and the skeleton, the basis of the program, which "run" and "running" up to our election. Is pyramidal austerity imposed and guarded with periodic visits the troika of envoys technocrats three important institutions to whom we belong and will belong and in which we are working, but not on the basis of stewardship and enforcement by a group of technocrats who send in the country us, with colonial features, this pyramid austerity.
Question: What percentage of the Memorandum accept? Just 0%! We will not accept nor a condition that enhances the vortex of the crisis, which magnifies the rate of debt, further wage reductions, new taxes on those who have already exhausted from taxation. We will not tolerate even a line, not a word, not one of the "red" lines that Mr. Venizelos, which reinforce the denial of reality and sacrifice Greeks of the most powerless without cause. We will not succumb to the deceitful error that deregulation of the labor market is reformed.
Ladies and gentlemen, the Memorandum, the pyramidal austerity loans the fed condition growing decline of our society, this story ended. This does not mean that ended the loan agreement with our partners. To stop, however, this Loan Agreement to be toxic require a new agreement, a new contract between us and our partners. Elected to negotiate. What to negotiate? A new agreement.
For example, why reject the commitment to reform the tax code -We have no reason to do it, just because it is part of the list of the MoU; - or the commitment of the redefinition of the concept of tax evasion? We want to do that. 70% of this "fig leaf" of the paper, the list, which came mnimoniaki logic pyramidal austerity is either irrelevant or independent of the mnimoniaki logic.
I repeat: What percentage of the Memorandum accept? We accept 0%, ladies and gentlemen.
Konstantinos SKREKAS: The "fig leaf" we want to hear.
GIANIS VAROUFAKIS (Minister of Finance): The "red" lines are yours and ours. And we have more. But overall, if the yield line to line and quantitatively, around 30% is toxic, mnimoniako piece which will reject.
And just so that it cannot be said that I take things out of context, I reproduce the entire speech below the fold. Enjoy.
Thu Feb 12th, 2015 at 05:14:04 AM EST
Inspired by the discussion of a Europe after the EU, the war in the Ukraine, and Michel Houellebecq's deplorable new book Soumission, I put myself into alt.history.what-if mode.
Let's start the annals two years from now:
22 May 2017. On the day after the second round of the French presidential election, the winner, Marine Le Pen of the Front National, announced France's exit from the EU.
1 July 2017. After the exit of all Southern European countries from the EU, Great Britain, the BeNeLux countries, Germany, Austria, the Visegrád countries, the Baltic states and the Scandinavian countries agree on re-launching the EU as a free-trade zone. Bulgaria and Romania protest at their exclusion.
Tue Feb 3rd, 2015 at 02:14:48 AM EST
In an ideal world, Greece's new finance minister Yanis Varoufakis would succeed in negotiating with the Eurogroup on the basis of his own Modest Proposal. However, we live in this universe and the immediate question arises of how Greece is going to fund its foreign commitments, in particular the redemption of 7bn's worth of bonds held by the ECB and maturing in 6 months. According to the Wall Street Journal,
The next hurdle will be 7 billion in bonds held by the ECB that mature in July and August. Greece doesn't have the cash to repay them, and failure to do so could ultimately lead to Greece's exit from the eurozone.
Syriza Win in Greek Election Sets Up New Europe Clash (January 26, 2015)
Here I outline a plausible (based on the published opinion of Greek government ministers and their associates) plan for Greek economic recovery, consisting of:
- a universal job guarantee program at the new minimum wage
- the introduction of a parallel currency in the form of transferable tax credits
- capital controls
Cross-posted on The Court Astrologer
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