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LQD: Depression Is A Choice

by ARGeezer Thu Apr 26th, 2012 at 04:51:32 AM EST

So says Steve Randy Waldman in his current post on his blog, interfluidity:

We are in a depression, but not because we don't know how to remedy the problem. We are in a depression because it is our revealed preference, as a polity, not to remedy the problem. We are choosing continued depression because we prefer it to the alternatives.

Usually, economists are admirably catholic about the preferences of the objects they study. They infer desire by observing behavior, listening to what people do more than to what they say. But with respect to national polities, macroeconomists presume the existence of an overwhelming preference for GDP growth and full employment that simply does not exist. They act as though any other set of preferences would be unreasonable, unthinkable. (Emphasis added.)


I can think of reasons macroeconomists might want to pretend that there is a general preference for GDP growth and full employment, but there are many macroeconomists who certainly do not presume such preferences exist. Most are just not amongst "The Serious People".


But the preferences of developed, aging polities -- first Japan, now the United States and Europe -- are obvious to a dispassionate observer. Their overwhelming priority is to protect the purchasing power of incumbent creditors. That's it. That's everything. All other considerations are secondary. These preferences are reflected in what the polities do, how they behave. They swoop in with incredible speed and force to bail out the financial sectors in which creditors are invested, trampling over prior norms and laws as necessary. The same preferences are reflected in what the polities omit to do. They do not pursue monetary policy with sufficient force to ensure expenditure growth even at risk of inflation. They do not purse fiscal policy with sufficient force to ensure employment even at risk of inflation. They remain forever vigilant that neither monetary ease nor fiscal profligacy engender inflation. The tepid policy experiments that are occasionally embarked upon they sabotage at the very first hint of inflation. The purchasing power of holders of nominal debt must not be put at risk. That is the overriding preference, in context of which observed behavior is rational.

I am often told that this is absurd because, after all, wouldn't creditors be better off in a booming economy than in a depressed one? In a depression, creditors may not face unexpected inflation, sure. But they also earn next to nothing on their money, sometimes even a bit less than nothing in real terms. "Financial repression! Savers are being squeezed!" In a boom, they would enjoy positive interest rates.

That's true. But the revealed preference of the polity is not balanced. It is not some cartoonish capitalist-class conspiracy story, where the goal is to maximize the wealth of exploiters. The revealed preference of the polity is to resist losses for incumbent creditors much more than it is to seek gains. In a world of perfect certainty, given a choice between recession and boom, the polity would choose boom. But in the real world, the polity faces great uncertainty. The policies that might engender a boom are not guaranteed to succeed. They carry with them a short-to-medium-term risk of inflation, perhaps even a significant inflation if things don't go as planned. The polity prefers inaction to bearing this risk.

This preference is not at all difficult to understand. The ailing developed economies are plutocratic democracies. "The people" do have power, but influence is weighted in a manner correlated with wealth. The median influencer in these economies is not a billionaire, but an older citizen of some affluence who has mostly endowed her own future consumption. She would like to be richer, of course. But she is content with her present wealth, and is panicked by the prospect of becoming poorer. For such a person, the depression status quo is unfortunate but tolerable. The risks associated with expansionary policy, on the other hand, are absolutely terrifying.


This seems to put too much blame on granny by assuming that moderately wealthy senior citizens have more political weight than they do and that they act rationally in their own self interest. On the other hand, depressions are, historically, times during which knowledgeable incumbent wealth holders consolidate their positions.  I suspect that large incumbent wealth holders have much more influence on Central Bankers and politicians than all the grannies in a polity - who, after all, are not all of one view.

Still, I am glad to see 'Depression as a Choice' gain currency in the blogospehere. Score one for Tara. Now if we can only get Tara a bigger megaphone....

Display:
I would also note that saving the TBTFs was and continues to be a choice as well - a choice that makes impossible an exit from the current ongoing financial debacle. I would suggest that it was saving particular individuals and institutions that had/have dominant roles in financing the current political systems that drove the decisions and that the current depression is viewed and, especially is presented, as an unfortunate but unavoidable consequence of so doing. TINA. Really! And, of course, it is not a depression. It is The Great Recession.

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 Apr 22nd, 2012 at 12:01:40 AM EST
it is not a depression. It is The Great Recession

According novels and movies, the rich committed suicide during the Great Depression of 29. Now the poor commit suicide.

by PerCLupi on Thu Apr 26th, 2012 at 06:30:24 AM EST
[ Parent ]
Galbraith, The Great Crash, p.128:
In the United States, the suicide wave that followed the stock market crash is also a part of the legend of 1929. In fact, there was none.
by gk (g k quattro due due sette "at" gmail.com) on Thu Apr 26th, 2012 at 06:36:13 AM EST
[ Parent ]
Yes. But the current rising wave of suicides in Europe is real. I think I have read something about this.
by PerCLupi on Thu Apr 26th, 2012 at 06:45:39 AM EST
[ Parent ]
Waves of suicides of rich people are comfortable myths to pretend that they share the fate of the poor, whose waves of suicide are always real: The Largest Wave of Suicides in History: Neo-Liberal Terrorism in India (Counterpunch, 12 February 2009)
The number of farmers who have committed suicide in India between 1997 and 2007 now stands at a staggering 182,936. Close to two-thirds of these suicides have occurred in five states (India has 28 states and seven union territories). The Big 5 - Maharashtra, Karnataka, Andhra Pradesh, Madhya Pradesh and Chattisgarh- account for just about a third of the country's population but two-thirds of farmers' suicides. The rate at which farmers are killing themselves in these states is far higher than suicide rates among non-farmers. Farm suicides have also been rising in some other states of the country.


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 06:48:42 AM EST
[ Parent ]
On April 22, Paul Krugman wrote in El País: "Last week, The New York Times reported on a phenomenon that seems to increasingly in Europe: the suicides "by the economic crisis" of people who kill themselves desperate because of unemployment and business failures. It was a heartbreaking story".
by PerCLupi on Thu Apr 26th, 2012 at 07:30:42 AM EST
[ Parent ]
El País translates Krugman's NYT columns with a delay of a couple of days. In this case: Europe's Economic Suicide By PAUL KRUGMAN (April 15, 2012)

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 08:27:45 AM EST
[ Parent ]
The "Great Recession" is the serious people's attempt (for 5 years now) to deny we're living a Depression. Whether Long, Great or Deep, we don't know yet.

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 06:45:13 AM EST
[ Parent ]
With the responses on offer it will be The Long, Great and Deep Depression.

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 Thu Apr 26th, 2012 at 10:13:17 AM EST
[ Parent ]
But it is, for example, impossible to explain to many Germans that the amount of money German taxpayers have showered on their banks would bury Greece. They are as committed to a resentment narrative as American old people who want "the government to get its hands off medicare". They combine both a short sighted selfish desire to protect what they have with a predilection for simple explanations that the lazy, over-sexed, corrupt, Others  are to blame.
by rootless2 on Thu Apr 26th, 2012 at 10:58:10 AM EST
[ Parent ]
Which of course is the political point of laundering those bailouts through the Greek "rescue" funds.

- Jake

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

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Apr 26th, 2012 at 11:18:54 AM EST
[ Parent ]
The fact that this isn't mentioned time after time in the economic news media is a huge outrage. Well, it's mentioned (and condemned) in the Financial Times all the time, but the proles don't seem to read that erstwhile publication.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Fri Apr 27th, 2012 at 05:56:40 AM EST
[ Parent ]
Nationalism and racism. The engines of right wing power. Until right wing populism is defeated, there can be no progress.
by rootless2 on Fri Apr 27th, 2012 at 07:59:38 AM EST
[ Parent ]
These are as common in the "left wing". I read constantly finnish left wing media and it's continious racism about the "lazy southeners."
by kjr63 on Fri Apr 27th, 2012 at 12:49:41 PM EST
[ Parent ]
They see absolutely no fail in euro or banks or other political economic ideologies.
by kjr63 on Fri Apr 27th, 2012 at 12:53:27 PM EST
[ Parent ]
That is the core problem with 'left wing' organizations that have retreated to social issues only, conceding the economic field to conservatives. The conservatives have provided the language for economic issues and, not too surprising, it offers little opportunity to critique the existing system of wealth extraction or the predatory role of finance.  

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 Fri Apr 27th, 2012 at 03:31:57 PM EST
[ Parent ]
And for some reason basically all leftist activists care only about non-populist, or even anti-populist issues like LGBT, immigration, art people hate and generally identity politics stuff.

No one cares about labour union stuff, unemployment, economics, business cycle management, finance regulation, business/infratructure (evil!!!!!111) and not even really about equality in a serious way. Again, I hang out a lot with people like this (in spite of being an evil rightwinger), and it just makes me so sad.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Sat Apr 28th, 2012 at 08:34:42 AM EST
[ Parent ]
Francis Fukuyama would have more accurately called his book The End of The Left. In the 1970s USA wingers like Pat Buchanan made an attack on the left on the basis of social issues and 'values' precisely because these issues divided the left from the majority of the population. Economic populism was the one issue that could have and still could pull back significant portions of that population, but it is anathema to most of the financial sector and the very wealthy, who have come since then to dominate politics through campaign contributions and through defining the field through owned think tanks and owned media.

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 Sat Apr 28th, 2012 at 10:07:33 AM EST
[ Parent ]
They honestly believe that housing market, banks and stock market create jobs. Their "social democracy" is only limited to begging "solidarity" from big money. The idea that labour and wages create jobs is to them completely alien.
by kjr63 on Sat Apr 28th, 2012 at 10:42:25 AM EST
[ Parent ]
Co-option in action!

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 Sat Apr 28th, 2012 at 11:33:30 AM EST
[ Parent ]
But this does not give the left wing power, it gives power to the right wing.  I don't say the left is free of racism, just that racism produces right wing power.
by rootless2 on Fri Apr 27th, 2012 at 01:15:09 PM EST
[ Parent ]
I would be less averse to blaming paranoid grannies, considering the undue weight often given to whining about how this or that policy will hurt private pension trusts.

(This is true, of course. Most anti-oligarch policies will reliably hurt private pension funds, because private pension funds are, portfolio-wise, nearly indistinguishable from oligarchs. The solution is not to refrain from pursuing anti-oligarch policies. It is to improve public pensions to the point where private pension funds are superfluous.)

- Jake

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

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Apr 22nd, 2012 at 05:41:07 AM EST
And the ubiquitous Zero Rate Interest Policy certainly does not benefit reasonably wealthy retirees, as it reduces their income from their savings towards zero.

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 Thu Apr 26th, 2012 at 10:15:15 AM EST
[ Parent ]
My heart bleeds for them. But if the state is going to give retirees free money, I would rather it gave that free money as public pension than as subsidies for what amounts to stuffing cash in your pillow.

- Jake

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

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Apr 26th, 2012 at 10:45:08 AM EST
[ Parent ]
My point is that, when it comes to a direct conflict of interests between the bankers and the grannies it is free money for the bankers and no interest income for the grannies. This shows whose concerns really matter. The real alternative to ZIRP, which the bankers have some reason to dislike, is resolution of insolvent banks, which the owners of banks deslike much, much more than the negatives of ZIRP.

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 Thu Apr 26th, 2012 at 11:32:15 AM EST
[ Parent ]
This seems to put too much blame on granny by assuming that moderately wealthy senior citizens have more political weight than they do and that they act rationally in their own self interest.

How many times have we said on this blog that inflation targetting is about protecting the real purchasing power of rentiers? This is basically what Waldman is saying

But the preferences of developed, aging polities -- first Japan, now the United States and Europe -- are obvious to a dispassionate observer. Their overwhelming priority is to protect the purchasing power of incumbent creditors. That's it. That's everything. All other considerations are secondary.
As to "blaming granny" - Sarkozy lost to Royal in 2005 in every age group except seniors. Eveyone's favourite populist argument against inflation is "it's a tax on pensions". Rajoy campaigned on how he was going to cut everything except pensions. Pensioners appear to be persuadable by the simple expedient of raisin pensions by a token amount just before an electio, or by scaring them with "the next government will take your pension away". And they form a sizeable voting bloc with a higher than average voter participation.

Plus, what's the average age of policymakers? Probably above 50. And, evidently, the average net worth of people must also increase with age. When you're a middle-aged professional you may be at the peak of your earning power but you're still accumulating wealth and probably still in debt.

The sad thing is that you don't protect the real purchasing power of retirees by putting the younger generations out of work, because - with nobody working, how do you generate the income, let alone the goods and services, that retirees would spend their collective accumulated savings on?

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 Sun Apr 22nd, 2012 at 07:09:50 AM EST
I think that the interesting thing is that we have now reached the terminal stage of grotesque mal-distribution of wealth and financial claims over wealth where a new calculus will begin to appeal to grannies.

(a)the many poor grannies with pitiful pensions and little or no property will have everything to gain from taxing richer grannies and the property of richer grannies

(b)the grannies with reasonable pensions and inflated properties will begin to have an interest in policies which increase the purchasing power of the younger generations, simply so that they can realise even a modest part of their inflated property valuation.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Sun Apr 22nd, 2012 at 08:32:45 AM EST
[ Parent ]
I think as a class grannies are prone to après moi le déluge syndrome. After all, they're not going to be here to live the consequences of their political positions.

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 Sun Apr 22nd, 2012 at 09:22:14 AM EST
[ Parent ]
And the development of après moi le déluge syndrome is one of the areas in which the opinions of grannies diverge from one another, partly depending on the number and status of children and grandchildren.

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 Apr 22nd, 2012 at 10:47:31 AM EST
[ Parent ]
I can speak only for myself in this regard, and note that I wouldn't need NEAR the alcohol, etc., that I do if I could just adopt an AMLD attitude; it's worry over my child and grandchildren that keeps my angst alive.

'tis strange I should be old and neither wise nor valiant. From "The Maid's Tragedy" by Beaumont & Fletcher
by Wife of Bath (kareninaustin at g mail dot com) on Mon Apr 23rd, 2012 at 10:09:30 AM EST
[ Parent ]
Yes, but your average Granny prefers not being taxed and giving money to her grandchildren than being taxed and having all kids get some money (including those who doe not have a granny/have a poor granny).

To make it short: it is not a leftist point of view (I'm talking about the grany's, not yours), because it tends to favour inheritance over individual valor, and inequality between kids from poor background or from richer families, whereas grannies are beneficiating from the work of all kids, including the one who come from poor background.

A free fox in a free henhouse!

by Xavier in Paris on Mon Apr 23rd, 2012 at 04:22:24 PM EST
[ Parent ]
This may presume that the average Granny is wealthier than she in fact may be and that she thinks that she will also suffer any tax on wealthy grannies that is passed. But there is likely no need to tax grannies not in the upper 20-30% of income earners.

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 Apr 23rd, 2012 at 07:04:59 PM EST
[ Parent ]
I think a more serious problem is that grannies are prone to status quo bias.

Resolving a Business Activity Depression (whether, in the US, the post-bellum crash Depression that launched the Long Price Depression, the Gold Depression that concluded it, the Great Depression, or the current Second Gilded Age Depression) requires establishing a new growth regime based on a new means of generating an appropriate rate of creation of purchasing power to maintain economic growth ~ with, of course, periodic recessions, since any monetary production economy is subject to a business cycle.

And a new means of generating an appropriate rate of creation of purchasing power is, by its nature, new, whether a novel institution or an existing institution used in novel ways.

So whether Granny is Big-C Conservative or Big-L Socially Liberal, Granny has a greater or lesser tendency (depending on cohort) to be small-c conservative.

And the vested interests whose position in society and the economy will be eroded by the rise of a nouveau groupe d'intérêt alongside the new means of creating purchasing power will attempt to leverage that small-c conservatism into a defense of their vested interest.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Tue Apr 24th, 2012 at 10:48:35 AM EST
[ Parent ]
The grannies have a choice - either to allow employment policies that may erode their private pensions through inflation but may provide for better public pensions and services through an improving economy: or to hold on to their pensions at the expense of deflationary policies which may make society as a whole poorer and themselves less able to enjoy services, except for the thin upper crust among them who will be able to afford them out of accumulated wealth.

I wrote nine months ago:

I have described austerity policies, in particular German-inspired ECB price stability policies, as preserving the purchasing power of the net worth of rentiers. Why does this make sense?

The generation now in power (people in their 50s and 60s mostly, born roughly between 1940 and 1960 - following American terminology let's call them the "[baby] boomers") are essentially the first generation that lived outside the traditional extended family framework. They were the first generation that didn't support their parents' generation in old age. Mostly because that generation (US term: "the greatest generation") benefitted from relatively generous retirement schemes (both public and private). But the boomers saw that they were by and large not required or willing to support their elders so they calculated that their own children (that would be the generation now between 30 and 50 - call them 'X') wouldn't support them in retirement either. So the boomers saved up for retirement (unlike the greatest who had benefitted from company or state retirement schemes). Since the boomers were saving for themselves they started arguing that collective retirement schemes were not necessary. Private (company) retirement schemes were defaulted on and public retirement schemes have been under attack for 30 years.

Turning the generation X into a lost generation would hurt the boomers if the boomers had to rely on the X for support in old age, but since the boomers are mostly holders of savings and the X are mostly in debt (to the boomers), another alternative is to preserve at all costs the purchasing power of savings. When the boomers retire, the X, desperate for work and under a heavy burden of debt to the boomers, will be forced to work for the boomers.

That this completely fucks over the children of today, those younger than 20, whose educational opportunities will be stifled by the fact that the X cannot support them, is neither here nor there. By the time it all comes crashing down the boomers will have croaked and won't have to suffer the consequences.

So blame the current crisis on a complete breakdown of intergenerational solidarity, even at the family level let alone at the societal level.

See also this discussion from a couple of weeks earlier.

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 Sun Apr 22nd, 2012 at 09:44:11 AM EST
[ Parent ]
I think we should be careful inferring what grannies actually know or think about how the economy operates. Why should they understand that a strong focus on maintaining purchasing power for creditors (do most grannies even know what a "creditor" is) will result in weak economic development for society and hence for themselves, when most other people, including most economists and politicians, seems to be in denial about this?

Grannies want to keep their pensions, because they are highly reliant on them. That is all.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Fri Apr 27th, 2012 at 06:06:00 AM EST
[ Parent ]
I think there are a number of slightly distinct factors at play.

  1. As populations age, there is a demographic bias towards conservatism in the sense of conserving what one has and avoiding the risks of uncertainty and rapid change. The benefits of becoming significantly more wealthy become less and less with age and the risks more terrifying.

  2. Class envy. During the Celtic Tiger years a lot of people who would previously have been at the bottom of the economic ladder suddenly did very well: Building workers could earn well over €1000 a week, skilled tradesmen charged a fortune - when you could get one - developers who left school at 14 became billionaires. Social welfare benefits grew substantially as did public service pay. This upset the class order of things and doctors etc. who had always been the top dogs both socially and economically became very upset.  The Fine Gael Bourgeoisie - big farmers and the professional classes actually welcome austerity now as a means of restoring the prior social and economic status hierarchy. Who wants to share their flight to their Spanish villas with a bunch of slappers, tinkers, and working class heroes wearing brash jewellery?

  3. As the balance of wealth shifts from earned wealth to inherited wealth, the sense of entitlement grows. People feel entitled that their "investments" should earn a good rate of return whilst they produce nothing.  People who are very comfortably off prefer the social stasis where their place in the social order is secure to the sight of "upstarts" and nouveau riche claiming a larger share of the spoils. For all the talk of supporting innovation and entrepreneurship, they want a meritocracy where inherited wealth = education, status and power, not one based on actual ability and productivity.
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sun Apr 22nd, 2012 at 07:53:29 AM EST
As populations age, there is a demographic bias towards conservatism in the sense of conserving what one has and avoiding the risks of uncertainty and rapid change. The benefits of becoming significantly more wealthy become less and less with age and the risks more terrifying.

This is not only related to age, but to the standard argument for declining marginal utility of everything. Economists often seem to forget that it applies to money as well. Except for partiularly greedy people, I suppose.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Fri Apr 27th, 2012 at 06:12:31 AM EST
[ Parent ]
Has grannies pushed for TARP? Have they demanded bank bail-outs or given votes or money politicians that made bank-bailout a prominent part of their platform? And where is the mighty grannie lobby when it comes to hollowing out public pensions? And what about previous encounters with established ownership over growth, did the grannies push Pinochet to make his coup and write his economic policies?

Nah, I say correlation, not causation. The rightwing uses many faultlines in society in order to push their pro 1%-policies, one of them is young vs old. That their are a lot of pensioners and that they can be scared into voting against everyone else to protect their pensions and priviligies (even if they do not get even that, se Tea Party) makes them a significant voting demographic. That does not mean they are driving this ride.

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 Mon Apr 23rd, 2012 at 08:19:53 AM EST
And where is the mighty grannie lobby when it comes to hollowing out public pensions?

How about the Tea Party's get the federal government out of my medicare?

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 Mon Apr 23rd, 2012 at 08:23:20 AM EST
[ Parent ]
As confused as the statement is, the Tea party voters  apparently oppose cutting Medicare and Medicaid 70:28.

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 Mon Apr 23rd, 2012 at 08:32:05 AM EST
[ Parent ]
The base of the Tea Party are protective of Social Security and Medicare, but their enthusiasm was co-opted by the Koch brothers and others and most haven't noticed. That is what produces the apparent confusion.

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 Fri Apr 27th, 2012 at 10:55:08 AM EST
[ Parent ]
They do not oppose cutting OPB. (Other People's Benefits)
by rootless2 on Fri Apr 27th, 2012 at 10:56:35 AM EST
[ Parent ]
Has grannies pushed for TARP? Have they demanded bank bail-outs or given votes or money politicians that made bank-bailout a prominent part of their platform?

It is my belief that they have been spoken for by self interested groups, and further, that the 'confusion' that both they and the Tea Party are claimed to exhibit is better explained as the disconnect between what they, lumped together, want and the interests of those who sponsor the groups that are trying to speak for them. As with the left in France, there is a great need for those who would seek to speak for the seniors to undergo a  'mindlift' to sharpen up and define the shape of their sagging and ill defined message. The good news is that the OWS meme of the 1% vs. the 99% has been well popularized.

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 Apr 23rd, 2012 at 10:37:33 AM EST
[ Parent ]
... as in a fight between the interests of the 20% and the interests 80%, things rarely go well for the interests of the 80%, whose defenders are easily wedged and picked off one by one.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Mon Apr 23rd, 2012 at 01:19:18 PM EST
[ Parent ]
The median influencer in these economies is not a billionaire, but an older citizen of some affluence who has mostly endowed her own future consumption. She would like to be richer, of course. But she is content with her present wealth, and is panicked by the prospect of becoming poorer. For such a person, the depression status quo is unfortunate but tolerable. The risks associated with expansionary policy, on the other hand, are absolutely terrifying.

This seems unlikely to be true. Such a person, one who has 'endowed her own future', has likely done so through financial sector companies. If that be the case why is it that the financial sector has been so easily able to plunder retirement savings through various bursting bubbles, including oil? These are the median influencers?!  I think things would have played out rather differently were that the case. Rather, I think that, having dropped a turd in the punch bowl, Randy Waldman ran and hid behind Grannies skirts by framing her as the median influencer.

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 Apr 23rd, 2012 at 07:15:25 PM EST
Steve Randy Waldman has something of a reputation as an analysts who will deal with difficult truths. But headlining a post Depression Is A Choice inherently is a challenge to TINA. So there is a reason to find someone sympathetic to put forward as to why he had to tell the truth. Else he could stand alone as the little boy who cried out: "The Emperor Has No Clothes!". In the real version of that fairy tale, the little boy gets torn limb from limb by the angry crowd.

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 Apr 23rd, 2012 at 07:23:10 PM EST
[ Parent ]
In addition, there are far too many people above the 'median influencer' for that median person to have any real significance - one hundred thousand grannies with net worths over $200,000 vs. Lloyd Blankfein and Goldman? In a good year Goldman's bonus pool exceeds the net worth of the grannies.

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 Apr 23rd, 2012 at 07:29:18 PM EST
[ Parent ]
ARGeezer:
Randy Waldman ran and hid behind Grannies skirts by framing her as the median influencer.

exactly, it has been the case for a while that this heartstring-tugging trope is trotted out to disguise what they're up to with a sentimental, kitschy coverup.

it's hostage taking, these grannies have voted for their own demise, transfixed by fear.

awww, poor grannies need the banks to be bailed out, sniff...

'let us out with the loot, or granny is toast!'

"We can all be prosperous but we can't all be rich." Ian Welsh

by melo (melometa4(at)gmail.com) on Thu Apr 26th, 2012 at 07:09:15 PM EST
[ Parent ]
To be clear, Waldman is to be praised for putting up such a clear statement of the obvious and in the language of the mainstream. In order that he not be seen as a mere Don Quixote tilting at windmills it is necessary for him to appear to make such a statement on the behalf of an interest group that is acknowledged as being serious by the mainstream.

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 Fri Apr 27th, 2012 at 10:58:51 AM EST
[ Parent ]
The grannies, but it's actually more the grandpas, are like everyone else, at a prix-fixe establishment not ala carte. So when they vote for right wing clowns who will keep the Greeks from spending our hard earned money or throw the blacks off welfare, they get the rest of the plate as well.
by rootless2 on Fri Apr 27th, 2012 at 10:59:17 AM EST
[ Parent ]
I'm waiting for someone other than moi to take up the narrative that you're all being slowly enslaved before you're exterminated, but that's just crazy talk, right?

The good news ... it's only a life sentence. You eventually leave this planet of idiots.
by THE Twank (yatta blah blah @ blah.com) on Thu Apr 26th, 2012 at 09:13:23 AM EST
It is. The extermination part will be an unfortunate accident. Also germs still don't stop at class barriers.

Von überall könnte das Volk, Urbrut alles Undemokratischen, Zelle des Terrors, über die gewählten Hüter von Wachstum und Wohlstand® kommen. - flatter
by generic on Thu Apr 26th, 2012 at 09:34:01 AM EST
[ Parent ]
Right.
by afew (afew(a in a circle)eurotrib_dot_com) on Thu Apr 26th, 2012 at 09:35:54 AM EST
[ Parent ]
ARG, I refer you to my diary:

http://www.eurotrib.com/story/2012/4/12/91330/2464

For some in charge, Depression is a choice, but for most, this depression is an outcome of learned helplessness.

The final triumph of Hayek and others has been to bring the vast majority to believe that they can do nothing, that they must suffer depression as the vengeance of an angry market god...

by Metatone (metatone [a|t] gmail (dot) com) on Thu Apr 26th, 2012 at 11:58:18 AM EST
The final triumph of Hayek and others has been to bring the vast majority to believe that they can do nothing, that they must suffer depression as the vengeance of an angry market god...

Ironically, the older Hayek disagreed on that with the younger Hayek:

I am the last to deny - or rather, I am today the last to deny - that,in these circumstances, monetary counteractions, deliberate attempts to maintain the money stream, are appropriate.I probably ought to add a word of explanation: I have to admit that I took a different attitude forty years ago, at the beginning of the Great Depression. At that time I believed that a process of deflation of some short duration might break the rigidity of wages which I thought was incompatible with a functioning economy. Perhaps I should have even then understood that this possibility no longer existed. ... I would no longer maintain, as I did in the early `30s, that for this reason, and for this reason only, a short period of deflation might be desirable. Today I believe that deflation has no recognizable function whatever, and that there is no justification for supporting or permitting a process of deflation.

...

The moment there is any sign that the total income stream may actually shrink, I should certainly not only try everything in my power to prevent it from dwindling, but I should announce beforehand that I would do so in the event the problem arose.... You ask whether I have changed my opinion about combating secondary deflation. I do not have to change my theoretical views.

As I explained before, I have always thought that deflation had no economic function; but I did once believe, and no longer do, that it was desirable because it could break the growing rigidity of wage rates. Even at that time I regarded this view as a political consideration; I did not think that deflation improved the adjustment mechanism of the market.



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 12:45:31 PM EST
[ Parent ]
Hansen recants on IS/LM, Hayek recants on the utility of deflation, on and on and it makes no difference. I think Varafoukas' recent description of the shuffle that new classicals perform in the face of clear evidence of the bankruptcy of their ideas is the best explanation.

At Metatone's response to the Hayek link above he  certainly is right about the next step being the redefinition of deflation - all the better to keep the depression of choice on track. Their real response is:
"We piss on your alternatives!"

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 Thu Apr 26th, 2012 at 02:08:37 PM EST
[ Parent ]
Depression is a choice, but that does not mean that most of those making that choice will not insist that There Is No Alternative, even while pissing on every alternative brought forward. Their positions are held not for their explanatory or predictive power but because holding them is a requirement for continuing to hold their positions and incomes. No one wants to admit they are supporting nonsense for money, so they instinctively discredit alternatives.

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 Thu Apr 26th, 2012 at 02:15:51 PM EST
[ Parent ]
How much weak political representation of home market actors support austerity?

Large export firms dominate employers unions and their workers employees unions. Home marked is served by large number of small enterprices whose employees have weak unions.

Firms and employees who have least to lose because of austerity are overrepresented at both sides of political spectrum.

by Jute on Fri Apr 27th, 2012 at 07:42:56 AM EST
[ Parent ]


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