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Merkel Does The Devil's Work

by afew Mon Aug 26th, 2013 at 08:20:56 AM EST

Watching Arte news last night, I was stunned by a German person offering a reading of Goethe's Faust. The reading was that Goethe, before Marx, showed capitalism stuck at a dead end produced by its own contradictions. Mephistopheles came along with a solution, paper money, and of course everything collapsed.

Nothing stunning there, you will say. We have already discussed Goethe's paper-money phobia on ET. But there was more. The person claimed that the "German government and the ECB" were currently practising the Devil's policy by "overheating the banknote printing press". "Creating money without creating value leads to a crash".

The notion that the German government was not sufficiently hawkish on monetary policy and was printing banknotes as if Hell did not exist came to me all the same as a surprise.

But here's why I was really knocked back: the German person was vice-chair of Die Linke and "close friend" of Oskar Lafontaine, Sahra Wagenknecht, a highly intelligent and highly-educated woman. Was she flying a kite to see if Merkel could be tarred with the lax monetary policy brush? It didn't seem like that to me: Wagenknecht appeared enthusiastic about Faust and the lessons we should draw from it, and she also looked appallingly sincere. And that kind of kite would call for Bild support rather than Arte news.


Now, I was listening to a French voice-over, and I'm roughly translating that. The French voice-over is here (11'50" in). My understanding of spoken German is far from good enough to be sure, but it seemed to me that she was saying approximately what the French version said. The German newscast is here (also at 11'50" in). UPDATE: if the newscast is no longer available, the sequence in German is here (h/t Katrin).

French-speakers try the French version, and, above all, German-speakers try the German one, and see if what I understood is in fact what Wagenknecht said.

Display:
Now, I know that she's referring to the ECB's provision of liquidity to banks via LTRO (similar to Quantitative Easing in the US and UK). So Draghi is pretty clearly Mephistopheles, and Merkel-Faust has fallen for his wiles...

But that a Die Linke official could publicly stump for a harder-money policy than that of the German government is astonishing.

Or not?

by afew (afew(a in a circle)eurotrib_dot_com) on Sun Aug 25th, 2013 at 12:16:16 PM EST
See European Salon, 20 September 2013
In case anyone had any doubts that the Euro crisis is religious in nature:

CNBC: ECB Bond Buying Likened to Work of the Devil (19 Sep 2012)

After weeks of macro-economic sniping following his isolation at the European Central Bank over its new bond-buying policy, Jens Weidmann, on Tuesday resorted to Goethe's Faust to make his point. The classic play highlighted, he argued, "the core problem of today's paper money-based monetary policy" and the "potentially dangerous correlation of paper money creation, state financing and inflation".

In early scenes from Goethe's tragedy, Mephistopheles persuades the heavily indebted Holy Roman Emperor to print paper money - notionally backed by gold that had not yet been mined - to solve an economic crisis, with initially happy results until more and more money is printed and rampant inflation ensues.

While he did not make the comparison from Faust Part Two explicit, for Mr Weidmann there are clearly parallels with the performance of the ECB in trying to save the euro.



Finance is the brain [tumour] of the economy
by Migeru (migeru at eurotrib dot com) on Sun Aug 25th, 2013 at 12:39:12 PM EST
Link: European Salon 20 Sept 2012.

What is shocking is that these notions should be so all-pervasive as to be accepted uncritically by people capable of critical thinking, on the hard left.

by afew (afew(a in a circle)eurotrib_dot_com) on Sun Aug 25th, 2013 at 12:46:27 PM EST
[ Parent ]
Apparently these notions are the essence of Germanness.

Finance is the brain [tumour] of the economy
by Migeru (migeru at eurotrib dot com) on Sun Aug 25th, 2013 at 12:49:13 PM EST
[ Parent ]
They love to point to the currency collapses after the two world wars to justify their paranoia, conveniently forgetting it takes two, presently unlikely events to create such a catastrophe: 1) losing a world war, and 2) having the winners take over your economy and currency.
by rifek on Mon Sep 9th, 2013 at 12:20:42 AM EST
[ Parent ]
Also, from comments to The Free Market is a Myth
Even more surprising than this was Adair Turner's recent paper DEBT, MONEY AND MEPHISTOPHELES: HOW DO WE GET OUT OF THIS MESS? (46p) and presentation arguing for 'overt money finance(OMF)of fiscal deficits' including the Fed directly crediting citizens accounts monthly with an amount equal to the amount now being spent monthly on QE for banks. For a short summary see A breakthrough speech on monetary policy by Anatole Kaletsky of Reuters.
FSA: DEBT, MONEY AND MEPHISTOPHELES: HOW DO WE GET OUT OF THIS MESS? (PDF)
But Weidmann's stress on the negative consequence of Mephistopheles's monetary experiment has been challenged, and by someone who speaks with considerable authority. Professor Harold James of Princeton University is one of the world's pre-eminent economic historians and a leading expert on inter-war German economic history (James 1986). He is also a man steeped in knowledge of German history and literature. And in a short article entitled "Germany should re-read Goethe's Faust Part 2" (James 2012) his take on the consequences is a bit more positive (EXHIBIT 43).

"Everything in the empire improves as a consequence of the introduction of paper money. The generals are pleased because the soldiers are paid once more, the treasurer finds that he can pay off all the debts, tailors are busily making new clothes, ladies become more willing to embark on well paid romantic adventures".

So that while there are undoubtedly subsequent consequences which, in the wake of our own crisis, we would recognise as warning signs - "the property market booms and simpletons can buy big houses" - the potential benefits of paper money creation should not be ignored.



Finance is the brain [tumour] of the economy
by Migeru (migeru at eurotrib dot com) on Sun Aug 25th, 2013 at 01:06:59 PM EST
[ Parent ]
Adair Turner did refer to Mephistopheles in his FSF pdf cited above, but this mention was in the context of advocating the serious consideration of OMT in this particular situation. He goes on to argue:
But before you decide from that that we should always exclude the use of money financed deficits, consider the following paradox from the history of economic thought. Milton Friedman is rightly seen as a central figure in the development of free market economics and in the definition of policies required to guard against the dangers of inflation. But Friedman argued in an article in 1948 not only that government deficits should sometimes be financed with fiat money but that they should always be financed in that fashion with, he argued, no useful role for debt finance. Under his proposal, "government expenditures would be financed entirely by tax revenues or the creation of money, that is, the use of non-interest bearing securities" (EXHIBIT 1) (Friedman,
1948). And he believed that such a system of money financed deficits could provide a surer foundation for a low inflation regime than the complex procedures of debt finance and central bank open market operations which had by that time developed.

A paragraph later Adair notes:
When economists of the calibre of Simons, Fisher, Friedman, Keynes and Bernanke have all explicitly argued for a potential role for overt money financed deficits, and done so while believing that the effective control of inflation is central to a well run market economy - we would be unwise to dismiss this policy option out of hand.

An explicit argument to authority, but, in this case, sweets to the sweet.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Aug 26th, 2013 at 12:46:41 PM EST
[ Parent ]

Also criticising austerity, speaking against minijobs...

Finance is the brain [tumour] of the economy

by Migeru (migeru at eurotrib dot com) on Sun Aug 25th, 2013 at 12:57:08 PM EST
Also asking for higher taxes to preserve social programs, and EU tax harmonisation.

Finance is the brain [tumour] of the economy
by Migeru (migeru at eurotrib dot com) on Sun Aug 25th, 2013 at 01:00:03 PM EST
[ Parent ]
Sara Wagenknecht sees in Faust 2 a critique of capitalism.

Finance is the brain [tumour] of the economy
by Migeru (migeru at eurotrib dot com) on Sun Aug 25th, 2013 at 01:13:14 PM EST
Yes, that's what she says. But what relation does she see between hard-money deflationary policy and unemployment?
by afew (afew(a in a circle)eurotrib_dot_com) on Sun Aug 25th, 2013 at 02:33:00 PM EST
[ Parent ]
None.

Finance is the brain [tumour] of the economy
by Migeru (migeru at eurotrib dot com) on Sun Aug 25th, 2013 at 02:58:33 PM EST
[ Parent ]
Now that is a serious failure.

res humà m'és aliè
by Antoni Jaume on Mon Aug 26th, 2013 at 12:01:45 PM EST
[ Parent ]
Economists today don't do macroeconomics.

Finance is the brain [tumour] of the economy
by Migeru (migeru at eurotrib dot com) on Mon Aug 26th, 2013 at 03:40:12 PM EST
[ Parent ]
So, since politicians get their economic doctrines from economists, there is no substantial difference between parties -- even including the supposed true left.
by afew (afew(a in a circle)eurotrib_dot_com) on Mon Aug 26th, 2013 at 04:11:15 PM EST
[ Parent ]
The German Red-Red-Green opposition does agree that Merkel's narrative on the causes of the Euro crisis (that it is sue to irresponsible fiscal policies in the crisis countries) is wrong. Beyond that...

Susanne Holl says no chance for a coalition of the Left in German (Eurointelligence, 27 August 2013)

In an editorial in Suddeutsche, Susanne Holl writes about the scenario in which the German elections resulted in neither a straight win for the current coalition, nor in a win by the SPD and the Greens. In that case, the certain outcome is another grand coalition. Speculation about a coalition between the SPD, the Greens, and the Left Party is completely wild. Peer Steinbruck and Sigmar Gabriel, SPD chairman, are both against it. Even if the SPD had a leader crazy enough to entertain the idea of a coalition with a party that has rejected all euro crisis decisions by the Bundestag, he would lose so much support from within his own ranks that he could not govern. The party's future would be at risk. The risks association with a coalition that included the Left Party are far more immense than those associated with another grand coalition.
There is a debate, including among editorialists in Suddeutsche, about what will happen if the elections were to bring an indecisive result. We agree with Holl only in respect of what is likely to happen - the SPD will not enter into a formal coalition with the Left party, having explicitly ruled out this option before. We are less certain about a minority government. And we disagree with her assertion that the euro crisis separates the parties of the Left. All three parties essentially agree on the causes of the crisis. They disagree on the tactics of how to confront Angela Merkel. But they have more in common with each other than they have with the CDU or the FDP.


Finance is the brain [tumour] of the economy
by Migeru (migeru at eurotrib dot com) on Tue Aug 27th, 2013 at 04:00:58 AM EST
[ Parent ]
I'm not sure her problem isn't rather a failure to come to terms with the extent of the delusion that was the East Bloc economic system she grew up in.  The net effect of the currency controls used to maintain the illusion of functioning economies and full employment was de facto hard money.  She grew up with hard money and full employment and has yet to admit they are in fact wholly incompatible without magic wands.
by rifek on Mon Sep 9th, 2013 at 12:36:45 AM EST
[ Parent ]
That is actually a common interpretation and was of course popular in the GDR. In end of Faust II Faust turns into a sort of developer, destroying everything around him.
by IM on Sun Aug 25th, 2013 at 03:26:30 PM EST
[ Parent ]
Of course there is a germ of (misapplied) truth in some of this: "Creating money without creating value leads to a crash". All of the money created on top of counterfeit real estate 'value' was the basis for the crash in 2008. The problem is that they vastly minimize what constitutes 'value'. Providing income support and medical care to the unemployed in the periphery does not, in their view, constitute value. And the only 'value' the ECB and the Troika have been concerned with is trying to impose the costs of the resulting collapse on the victims not the perpetrators.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Aug 25th, 2013 at 01:14:13 PM EST
I have half a suspicion Wagenknecht was loosely tying value to money as in "store of value", but I could be wrong.
by afew (afew(a in a circle)eurotrib_dot_com) on Sun Aug 25th, 2013 at 03:13:38 PM EST
[ Parent ]
Wagenknecht does say that Faust foreshadows Marx' critique of capitalism in the middle of the following century, so if pressed she might fall back on the labour theory of value.

Finance is the brain [tumour] of the economy
by Migeru (migeru at eurotrib dot com) on Sun Aug 25th, 2013 at 03:33:47 PM EST
[ Parent ]
Her thesis was on Marx, so that is entirely possible.
by afew (afew(a in a circle)eurotrib_dot_com) on Sun Aug 25th, 2013 at 03:53:27 PM EST
[ Parent ]
PN. Goete's Faust was first published in part in 1806, so Marx's Capital was later in the same century. Goethe was about 50 in 1800, and had major accomplishments behind him, so he was active during the 18th century, but he lived until 1832 and was, from The Sorrows of Young Werther on, usually considered part of the Romantic movement, which bridged the centuries.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Aug 25th, 2013 at 04:30:45 PM EST
[ Parent ]
I did wrote about sorrows in my school exam.; in other words I am an expert. So no, Sorrows is sturm und drang.

Young Goethe - Sturm und drang. old goethe - weimar classic. The (german) romantics saw Goethe as an antagonist.

by IM on Sun Aug 25th, 2013 at 04:39:06 PM EST
[ Parent ]
I was aware of Weimar Classicism and of Goethe's association with sturm und drang. Perhaps it is that I and possibly others see sturm und drang as more associated with early romanticism than classicism, which, on a European scale, was mostly an 18 century movement. But then I found Jacques Barzun's Classic, Romantic and Modern annoying at 21.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Aug 25th, 2013 at 05:32:00 PM EST
[ Parent ]
Yes, by Faust and his later works, Goethe had gone through his personal Thermidor, and the German Romantics were having none of it.  As for Barzun, I'm too old to find him annoying, merely pretentious.  If I were to live that long and accomplish nothing but to shovel such dookie, I would hope someone would have the grace to hit me in the head with a brick.
by rifek on Mon Sep 9th, 2013 at 12:51:24 AM EST
[ Parent ]
What this tells me is that Die Linke's economic platform is incoherent. However, politicaly they are operating both within the lay of the land (hard-money nonsense is in the German constitution) as well as within voter consensus (how else are you going to attract voters?).

Finance is the brain [tumour] of the economy
by Migeru (migeru at eurotrib dot com) on Sun Aug 25th, 2013 at 01:35:08 PM EST
This is what made me jump. The centre-left parties in our (more or less two-bloc) parliamentary democracies -- the SPD, the French PS, Labour, Dems, etc -- are not going to surrender their institutional situation, their elected seats, their clientele and opportunities for patronage, their offices and salaried aides, their guaranteed media presence, their funding, by going off into the desert for years fighting the good fight. So they drift rightwards to remain in their comfort zone, and they have been doing this for long enough now that it's hardwired (ie their advisors and experts are de facto liberal in economics and socially conservative, and their political personnel a study in devious smarm).

For a political war to be pursued, there needs to be a new movement. When I hear Wagenknecht spouting these Germanic commonplaces, or Mélenchon playing ego-games with the journalists, I can't help but see that these alternative, "real" left parties are not going to cut it. Their analysis is half-baked and their communication, as a result, confused.

I don't mean that I was kinda expecting them to lead the way, but the cluelessness is awesome.

by afew (afew(a in a circle)eurotrib_dot_com) on Sun Aug 25th, 2013 at 03:10:29 PM EST
[ Parent ]
The only real alternative is a new party lead by a charismatic figure who can generate appeal and get the message out. For all his perceived faults Beppe Grillo has shown that this can be done on a significant scale. What we need are new leaders of new party/movements with some of Grillo's gifts but who ARE temperamentally and intellectually capable of governing.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Aug 25th, 2013 at 03:21:03 PM EST
[ Parent ]
Populism only works if the thing you're saying is actually popular, but supressed by the elite. German hard-money madness seems not to be an exclusivey elite opinion, but widespread among the German people as a whole.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Mon Aug 26th, 2013 at 06:25:18 PM EST
[ Parent ]
Even so, a populist appeal could be based not on an argument about views on money but on how their wages have stagnated while the portion going to the top has increased, on how their 'sacrifice' has been squirreled away in Swiss banks by the rich while the bought and paid for politicians dream up reasons why documents showing who has what secret, untaxed, numbered Swiss account should not be used to go after those rich who, after all, make the contributions that enable the politicians to govern.

Then, after they have their attention, start undermining the hard money view. Point out that the Old Testament in several places advocates Jubilees and that when Jesus said "Forgive us our debts as we forgive our debtors" he was talking about money as well as other aspects of personal behavior. Ask them how, when the dragon has ALL the wealth, including theirs, in his hoard are the rest to get by, especially in old age. Ask why, if jobs, benefits and pensions are the first thing Greeks and Portuguese are asked to sacrifice, their own jobs, benefits and pensions will not follow suit after Greece and Portugal have been sucked dry.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Aug 27th, 2013 at 11:02:38 AM EST
[ Parent ]
That is wishful thinking. The Left already does a tax the rich campaign. So do the Social Democrats. Running on tax increases is always an iffy position. They are doing it at a time when the budget is near a surplus. This is not going to work and the Social Democrats are already reversing. If you do populism in Germany it would be aimed at a breakup of the monetary union. Germans see their money not going to the filthy rich, but to the southerners.

You need to face the situation as it is and not like you want it to be. Hard money is a genuine national consensus in Germany. No likely government will have the votes to go against it.

The possible options are hard money or no Euro.

by oliver on Tue Aug 27th, 2013 at 11:57:21 AM EST
[ Parent ]
The possible options are hard money or no Euro.
Which is why the hard money loonies (such as the AfD and others) are for no Euro.

Right.

Finance is the brain [tumour] of the economy

by Migeru (migeru at eurotrib dot com) on Tue Aug 27th, 2013 at 12:02:02 PM EST
[ Parent ]
For the EU these are the only options. Germany will stay on hard money. As will any currency union Germany is a member of. It is simply no use harboring any hopes there.
by oliver on Tue Aug 27th, 2013 at 12:06:56 PM EST
[ Parent ]
That is rather the problem.

Finance is the brain [tumour] of the economy
by Migeru (migeru at eurotrib dot com) on Tue Aug 27th, 2013 at 12:16:10 PM EST
[ Parent ]
We can hear you whispering "And good thing too!" under your breath, you know. :-)
by Colman (colman at eurotrib.com) on Tue Aug 27th, 2013 at 12:36:49 PM EST
[ Parent ]
Pure projection! ;)
by afew (afew(a in a circle)eurotrib_dot_com) on Tue Aug 27th, 2013 at 12:50:45 PM EST
[ Parent ]
That doesn't make me wrong. Rejecting the message because you dislike the messenger isn't helpful.
by oliver on Tue Aug 27th, 2013 at 01:44:22 PM EST
[ Parent ]
Are you demanding hard money?
by rifek on Mon Sep 9th, 2013 at 01:09:08 AM EST
[ Parent ]
Migeru:
the hard money loonies (such as the AfD and others) are for no Euro

Well, yeah, because they see the Euro as soft money.

See "hard-left leader says government is overheating printing press".

by afew (afew(a in a circle)eurotrib_dot_com) on Tue Aug 27th, 2013 at 12:16:40 PM EST
[ Parent ]


Finance is the brain [tumour] of the economy
by Migeru (migeru at eurotrib dot com) on Tue Aug 27th, 2013 at 12:18:52 PM EST
[ Parent ]
I see the euro as fake money.  It is supposed to be a sovereign currency, but it hasn't a sovereign behind it.  That is the real euro crisis.
by rifek on Mon Sep 9th, 2013 at 01:13:02 AM EST
[ Parent ]
The Euro is part of a deliberate programme to abolish Sovereigns everywhere. Reshaping Fiscal Policies In Europe: Enforcing Austerity, Attacking Democracy (11/02/2013 BY HUGO RADICE, Social Europe Journal)
These proposals, when fully implemented, will not only enforce a permanent regime of fiscal austerity, but also further remove macroeconomic policy from democratic control. For these reasons they need to be vigorously fought right across Europe. But if readers in the UK imagine that they are not affected, since we are not in the Eurozone, they need to think again, for the structural deficit has also become the preferred fiscal target of Chancellor Osborne, backed by the Office of Budget Responsibility.  While the most influential economic think tanks, the Institute for Fiscal Studies and the National Institute for Economic and Social research, have begun to challenge the Coalition's austerity policies, they have not as yet repudiated the use of the structural deficit as a fiscal target. So what exactly is the structural deficit, and why is it such a danger?

...

What lies behind this extraordinary restriction to be placed on the democratic right of national parliaments to determine fiscal policy? In essence, it is the politics of depoliticisation. European business and political élites want to avoid any return to `Keynesian' active macroeconomic management, which they see as inherently liable to capture by popular interests. During the neoliberal era, they have therefore increasingly sought to insulate economic policy decisions from democratic control, by handing over monetary policy to independent central banks; subordinating spending departments to Treasury / Finance Ministry control; and imposing fiscal targets. This drive has been supported by a wide-ranging ideological offensive, centred on the supposed virtues of `efficient' markets, supply-side competitiveness measures, flexible labour markets, tax cuts for the rich, privatisation, and free movement across borders of trade and capital (but not labour).

In Britain, mainstream political scientists have framed these changes in the wider narrative of public choice between market and state as modes of economic regulation, on which distinct `varieties of capitalism' have evolved. They assume that there is broad agreement on all sides as to society's core values and goals, and that the choice of a given variety (with specified policy institutional and practices) is made on the basis of their effectiveness.  `Depoliticisation', in this narrative, is about a shift from state to market.



Finance is the brain [tumour] of the economy
by Migeru (migeru at eurotrib dot com) on Mon Sep 9th, 2013 at 02:15:10 AM EST
[ Parent ]
The Left already does a tax the rich campaign.

As if tax rates were the only lever! How about "They are squirreling away what they made by not giving workers a raise in Swiss bank accounts and not even paying taxes on it!" ?? How is that soft money?

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Aug 27th, 2013 at 12:56:47 PM EST
[ Parent ]
The Garman body politic wants to protect the return on savings (of the older generation) even at the cost of a lost generation of young people.

Finance is the brain [tumour] of the economy
by Migeru (migeru at eurotrib dot com) on Tue Aug 27th, 2013 at 01:07:02 PM EST
[ Parent ]
I didn't realize that it was the return on savings that caused some of the older generation to put their money in numbered Swiss accounts. Silly me. How I wish the Fed would set at least a 2% rate on some of its bonds. What a concept! Return on savings.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Aug 27th, 2013 at 09:06:31 PM EST
[ Parent ]
You cannot make a campaign against tax reduction schemes involving foreign countries while remaining pro-Euro. It is too fine a distinction to campaign on.
by oliver on Tue Aug 27th, 2013 at 01:50:22 PM EST
[ Parent ]
So it is necessary to tolerate tax evasion on a massive scale in savings denominated in Swiss Franks in order to remain pro-Euro. This has truly been an enlightening discussion.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Aug 27th, 2013 at 09:08:17 PM EST
[ Parent ]
This cannot is especially regarding the recent crumbling of switzerland as a tax haven a quite dubious claim.
by IM on Wed Aug 28th, 2013 at 03:06:54 AM EST
[ Parent ]
I wish you would read what I actually wrote. I said you cannot campaign on it alone. Something can be done. It just doesn't win you an election. The German Social Democrats did kill the tax amnesty treaty with Switzerland. There has been no effect in the numbers.
by oliver on Wed Aug 28th, 2013 at 03:20:04 AM EST
[ Parent ]
Now you are shifting the goalposts. That is very much not what you wrote. You claimed that is impossible to campaign on tax evasion, tax harmonization etc. without campaigning against the euro. And that is obviously not true.
by IM on Wed Aug 28th, 2013 at 03:51:19 AM EST
[ Parent ]
Hey, Schäuble does it at the EcoFin...

Finance is the brain [tumour] of the economy
by Migeru (migeru at eurotrib dot com) on Wed Aug 28th, 2013 at 04:02:55 AM EST
[ Parent ]
The German Social Democrats tried. Their candidate for chancellor tried even while he still was a minister. It didn't work.
by oliver on Wed Aug 28th, 2013 at 04:12:47 PM EST
[ Parent ]
So can you tell us what are the forces in German society that consider the Euro synonymous with tax evasion to foreign havens?
by afew (afew(a in a circle)eurotrib_dot_com) on Wed Aug 28th, 2013 at 04:17:48 PM EST
[ Parent ]
If you watch the video in this thread you'll see Sahra Wagennecht's hobby horse of tax harmonisation, and her mentions of Luxembourg, Ireland and the Netherlands. Of course you can campaign on it, especially in Germany. Everyone does it.

But since the need to rein in tax competition is close to a national consensus in Germany there isn't much to gain from it electorally.

Finance is the brain [tumour] of the economy

by Migeru (migeru at eurotrib dot com) on Wed Aug 28th, 2013 at 03:47:27 AM EST
[ Parent ]
But pointing out to the many that their foregone wage increases are happily residing un-taxed in numbered Swiss bank accounts might create some doubt about the wisdom and fairness of the current policies - who it really benefits and at whose cost.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Aug 28th, 2013 at 12:54:18 PM EST
[ Parent ]
Hitler and Mussolini were charismatic and got "the message" out.  Robespierre, Napoleon, Franco, scores of others (Reagan and Thatcher, snort).  The man on horseback is the bane of any reason-based civilization, not the savior.
by rifek on Mon Sep 9th, 2013 at 01:05:45 AM EST
[ Parent ]
Eurointelligence: Münchau says SPD is lost for words (04.04.2013)
In his Spiegel Online column, Wolfgang Münchau says the rise in European unemployent is a totally unsurprising consequence of the austerity policy. What is surprising, however, is the complete inability by Social Democrats, in Germany and elsewhere, to attack conservative governments over the rise in unemployment. He says the reason is an abandonment of macroeconomics in the politics of the left (the right has abandoned macro a long time ago). Now that we have entered into a massive macroeconomic crisis, the SPD is lost for words to attack those who are responsible for this calamity, notable Angela Merkel and her austerity policy. Münchau was particularly scathing about Gerhard Schröder's interview in Spiegel this week, in which he lauded Merkel's crisis policies.


Finance is the brain [tumour] of the economy
by Migeru (migeru at eurotrib dot com) on Sun Aug 25th, 2013 at 03:47:06 PM EST
[ Parent ]
Also: Munchau on the SPD (01.08.2013)
In the first instalment of a four-part series on the election platforms of the main political parties in Germany, Wolfgang Munchau expressed disappointment about the SPD's platform, and criticises the almost exclusive emphasis on financial sector reform to the exclusion of everything else. For once, the proposed reforms do not even address the main financial sector problem - that of undercapitalised banks. But what is really disturbing to Munchau is that this once Keynesian party has now fully bought in to the neo-classical policy consensus in Germany, and accepts further fiscal retrenchment without any discussion. The SPD thus offers no macroeconomic alternative policies at all. He says those who support Angela Merkel have no reason to fear Peer Steinbruck. But those who do not, have no reason have no reason to vote for him either.
Note that Münchau ran a 4-instalment series on the economic programs of the major German Parties. 4, because Die Linke was not included.

Finance is the brain [tumour] of the economy
by Migeru (migeru at eurotrib dot com) on Sun Aug 25th, 2013 at 03:50:14 PM EST
[ Parent ]
While we're on the topic of Münchau's Spiegel columns on the economic program of the German Parties: Wenn Politiker vom Stammtisch aufstehen (21.08.2013)
Laut dem Programm der Grünen ist die Krise keineswegs das Resultat unverantwortlicher Haushaltspolitik im Süden, sondern eine Konsequenz von Kapitalströmen, die sich aus gesamtwirtschaftlichen Ungleichgewichten ergeben. Die deutschen Leistungsbilanzüberschüsse sind somit genauso ein Teil der Ungleichgewichte wie die Defizite in den Südländern. Die Grünen haben ebenfalls recht mit der Feststellung, dass die Hilfsprogramme nicht aus Nächstenliebe erfolgt sind, sondern zur Stabilisierung von Banken und Versicherung, auch und insbesondere in Deutschland. Die Politik des Sparens hat die Krise verstärkt und den sozialen Zusammenhalt geschwächt.

...

Die Grünen sind in ihren Lösungsvorschlägen etwas konkreter als die SPD, neigen aber auch zur Überfrachtung. Steuerdumping ist nicht schön, aber kein zentrales Element der Krise. Man kann die Zyprer dazu verdonnern, die Steuern zu erhöhen. Aber das ist eher eine Demonstration deutscher Macht als ein Versuch, die Krise zu lösen. Die Jugendarbeitslosigkeit ist schlimm, sie ist aber nur eine Konsequenz der Dauerrezession. Die Rezession wiederum ist die Konsequenz der Sparpolitik in Verbindung mit der Finanzkrise. Wer die Jugendarbeitslosigkeit bekämpfen will, sollte sich für das Ende der Sparprogramme einsetzen und für eine echte europäische Bankenunion. Spezielle Programme gegen die Jugendarbeitslosigkeit sind unsinnig, solange man das eigentliche Problem nicht löst.

Die Grünen sind für Euro-Bonds. Mich als Befürworter solcher gemeinsamen Anleihen aller Euro-Staaten sollte das freuen. Aber die Grünen wollen einen Typus von gemeinsamer Anleihe, von dem ich weniger überzeugt bin - den Schuldentilgungsbond. Basierend auf einem Vorschlag des Sachverständigenrats der Bundesregierung, handelt es sich hier um ein Instrument, das explizit nur zur Schuldentilgung dient.

When politicians step away from the debating table
According to the Green program, the crisis is not the result of irresponsible fiscal policy in the south, but a consequence of capital flows arising from macroeconomic imbalances. The German current account surpluses are thus as much a part of the imbalances as the deficits in the southern countries. The Greens are also right in noting that the ad programs are not done out of charity, but to stabilize banks and insurers, also and especially in Germany. The austerity policy has strengthened the crisis and weakened social cohesion.

...

The Greens are more specific than the SPD in their proposed solutions but also tend to overdo it. Tax dumping is not nice, but also not a central element of the crisis. One can condemn the Cypriots to raise taxes. But this is more of a demonstration German power than an attempt to resolve the crisis. Youth unemployment is bad, but it's just a consequence of the recession period. The recession in turn is a consequence of the austerity policy in conjunction with the financial crisis. Whoever wants to tackle youth unemployment should set themselves for an end to austerity and for a genuine European banking union. Special programs against youth unemployment are nonsense, as long as one does not solve the real problem.

The Greens are for euro bonds. As a proponent of such common bonds for all euro countries I should look favourably on this. But the Greens want a type of common bond of which I am less convinced - the debt redemption bond. Based on a proposal of the Expert Council of the Federal Government, we're talking about an instrument that explicitly serves only to repay debt.



Finance is the brain [tumour] of the economy
by Migeru (migeru at eurotrib dot com) on Sun Aug 25th, 2013 at 05:12:44 PM EST
[ Parent ]
At least one German party seems to have at least a partial grip on what is actually happening.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Aug 26th, 2013 at 03:38:11 PM EST
[ Parent ]
Note that Münchau ran a 4-instalment series on the economic programs of the major German Parties. 4, because Die Linke was not included.

Wolfgang Münchau über das Wahlprogramm der Linken - SPIEGEL ONLINE

Die Linken sind neben den Grünen die einzige Partei, deren Programm auf einer ehrlichen und intelligenten Analyse der Euro-Krise basiert.

by generic on Wed Aug 28th, 2013 at 02:07:41 PM EST
[ Parent ]
That was not in the program :)
Was mir an der Position der Linken besonders gefällt, ist die konsequente Umsetzung ihrer Analyse zur Krise auf ihr Abstimmungsverhalten im Bundestag. Im Gegensatz zu SPD und Grünen haben die Linken konsequent im Bundestag gegen die Krisenpolitik der Bundesregierung gestimmt. Bei den Grünen liest sich die Unterstützung der Regierung wie eine Entschuldigung. Man habe nur widerwillig zugestimmt, um eine noch größere Krise zu vermeiden. Ich halte das Argument für widersinnig.

...

Wie auch bei den Grünen steht die makroökonomische Analyse unter ideologischem Vorbehalt. Auch ihr Programm ist hoffnungslos überfrachtet. Die Linken instrumentalisieren die Krise für ihre Forderung nach höheren Löhnen und Umverteilung. Die Lohnquote - der Anteil der Löhne am Bruttoinlandsprodukt - ist seit den siebziger Jahren in den meisten Industriestaaten zugunsten der Gewinne gefallen. Einer der Gründe dafür ist mit Sicherheit die Globalisierung, denn sie brachte mehr Lohnwettbewerb. Insofern kann man aus der Krise nicht eine Erhöhung der Löhne an sich fordern, höchstens eine Umverteilung der Löhne zwischen Ländern und einer global koordinierten Korrektur im Verhältnis zwischen Profiten und Löhnen. Wie das in der Praxis funktionieren soll, sagen uns die Linken nicht.

...

Und somit ist meine - sicher kontroverse - Schlussfolgerung aus fünf Wahlprogrammen: Aus makroökonomischer Sicht wäre eine rot-rot-grüne Koalition die beste Lösung und die einzige Variante, die eine Chance hätte, die Krise mit Erfolg zu bekämpfen. Schon allein deshalb, weil eine solche Konstellation eine andere Narrative der Wirtschaftspolitik bietet.

This is an interesting position: the Greens and the Left have the right crisis diagnosis, but they need the weight of the macroeconomically clueless SPD in order to make a viable (seats-wise) governing coalition.

Münchau says the Greens, Linke and AfD are the three parties that understand the crisis while the CDU/CSU, SPD and FDP are überfordert ("in over their head"). He has used that word before in economic commentary: Europe, unable to cope (FT.com, December 5, 2010)

Usually I stay clear of connotation-rich German words that have no real equivalent in other languages. Their purpose is to obfuscate. But there is one that describes the eurozone's crisis management rather well. It is überfordert. The nearest English translation is "overwhelmed", or "not on top of something", but those are not quite the same. You can be overwhelmed one day, and on top the next. Überfordert is as hopeless as Dante's hell. It has an intellectual and an emotional component. If you are it today, you are it tomorrow.

I am not saying that every policymaker in the eurozone is hopeless. There are a few exceptions. My point is that the system is überfordert, unable to cope. This inability has several dimensions. I have identified six.

...

The euro is currently on an unsustainable trajectory. The political choice is either to retreat into a corner, and hope for some miracle, or to agree a big political gesture, such as a common European bond. What I hear is that such a gesture will not happen, for a very large number of very small reasons. The system is genuinely überfordert.

And so it remains, nearly 3 years later.

Finance is the brain [tumour] of the economy
by Migeru (migeru at eurotrib dot com) on Wed Aug 28th, 2013 at 04:40:53 PM EST
[ Parent ]
Migeru:
This is an interesting position: the Greens and the Left have the right crisis diagnosis, but they need the weight of the macroeconomically clueless SPD in order to make a viable (seats-wise) governing coalition

Yes, and a pony too, please. The trouble with the SPD is that their election results are still too good to support a change. They need the educational effect of getting far less than 20% before they start to debate a red-red-green coalition. And by then it will be too late.

by Katrin on Wed Aug 28th, 2013 at 05:26:30 PM EST
[ Parent ]
The problem with Red-Red-Green is that the SPD would have half the votes in the coalition and so would insist on ruling it, thereby negating the better macroeconomics of it junior partners.

I mean, Peer Steinbrück, FFS!

Finance is the brain [tumour] of the economy

by Migeru (migeru at eurotrib dot com) on Wed Aug 28th, 2013 at 05:52:22 PM EST
[ Parent ]
If the SPD really wanted red-red-green, they could let Steinbrück cash his pension and let someone else get elected chancellor. Gabriel probably. But the party doesn't want it, it's not just Steinbrück.  
by Katrin on Wed Aug 28th, 2013 at 06:03:24 PM EST
[ Parent ]
Yes, yes, yes. Münchau for chancellor, please.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Mon Aug 26th, 2013 at 06:26:22 PM EST
[ Parent ]
There are many sensible German macroeconomists. They are either marginalised (and most nearing retirement) or in exile.

Finance is the brain [tumour] of the economy
by Migeru (migeru at eurotrib dot com) on Tue Aug 27th, 2013 at 03:07:54 AM EST
[ Parent ]
I don't mean that I was kinda expecting them to lead the way, but the cluelessness is awesome.

Might possibly have something to do with the contradiction in terms below:

"people capable of critical thinking, on the hard left."

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

by Starvid on Mon Aug 26th, 2013 at 06:22:40 PM EST
[ Parent ]
You got an example of anyone capable of critical thinking anywhere else in the political spectrum?
by afew (afew(a in a circle)eurotrib_dot_com) on Tue Aug 27th, 2013 at 02:04:30 AM EST
[ Parent ]
There seems to be non-rigid, non-doctrinaire people ready to question themselves all over the spectrum, except among the Austrians and the hard left. There are even some US conservatives who can do that, like David Frum.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Tue Aug 27th, 2013 at 07:40:38 AM EST
[ Parent ]
The point was somebody capable of critical thinking. Wagenknecht is most certainly in that category. And is clearly "non-rigid, non-doctrinaire", in the sense that she seems to be flying her own kite with some rather surprising opinions for someone on the "left of the left". There are examples of that throughout this diary and thread.

As for the capacity to "question oneself", I'd say there are examples everywhere, including on the hard left. However, politics is a tough show in which the actors are not allowed to show weakness, so the self-questioning doesn't get much of a public airing.

by afew (afew(a in a circle)eurotrib_dot_com) on Tue Aug 27th, 2013 at 12:47:00 PM EST
[ Parent ]
"Sahra Wagenknecht, a highly intelligent and highly-educated woman"

Uh, yeah... Why are we even considering her a reasonable person? According to her Wikipedia page, she is a die-hard DDR-apologist.

"The Communist Platform (German: Kommunistische Plattform, KPF) was originally formed as a tendency of the PDS. It is less critical of German Democratic Republic than other groupings, and it upholds orthodox Marxist positions. A "strategic goal" of the KPF is "building a new socialist society, using the positive experiences of real socialism and to learn from mistakes" [46] Its primary leader is Sahra Wagenknecht"

What would we think of a person who talked about the "positive experiences of national socialism and to learn from mistakes"? Well, we wouldn't allow them in polite company, that's for sure. I've previously not really understood why so many in Germany are hostile to Die Linke - now I do.

And she seems to like the mad economy-wrecker in chief who makes Alan Greenspan look like an amateur: "She has expressed strong support for the rise of left-wing leaders in Latin America, such as Hugo Chávez."

Die Linke is something of a broad church, consisting of several overlapping and diverging tendencies. So why do we associate ourselves with the crazies?

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

by Starvid on Wed Aug 28th, 2013 at 06:27:50 PM EST
[ Parent ]
The intelligence, level of education, and reasonableness of a person are not determined by reference to your personal phobias.
by afew (afew(a in a circle)eurotrib_dot_com) on Thu Aug 29th, 2013 at 03:12:17 AM EST
[ Parent ]
Don't you think it's highly unfortunate that the party of which Münchau has this to say:
The Election program of the Left shows, on the Euro crisis, honestly and intelligence. Thus the party is far ahead of the big parties, and the ideal partner of the SPD and Greens
has fallen into the claws of people who sympathise with the successor state of Nazi Germany? There is a clear risk, already actualised in the German political reality, that these ideas will become tainted by association with people like Wagenknecht.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Thu Aug 29th, 2013 at 10:40:11 AM EST
[ Parent ]
the successor state of Nazi Germany
WTF, Starvid?

Finance is the brain [tumour] of the economy
by Migeru (migeru at eurotrib dot com) on Thu Aug 29th, 2013 at 10:44:35 AM EST
[ Parent ]
After totalitarian Nazi Germany fell, one free German state arose from the ashes, and one totalitarian state - the moral and ideological successor, DDR.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Thu Aug 29th, 2013 at 03:25:38 PM EST
[ Parent ]
Meh. I don't know how overrated the totalitarianness of the DDR was, but I do know that the freeness of the Bundesrepublik was rather severely so.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Aug 29th, 2013 at 03:40:36 PM EST
[ Parent ]
And the DDR is not the third reich.

And now that we know about western intelligence services and what they do to our communications, I'm not so sure the DDR was a bad state, comparatively. At least everyone had a job.

I think maybe people on the liberal left, social democrats and the like, need to take a deep breath and realise their ideology is bankrupt, the only thing giving them successes in the past veing the pressure from real existing socialism in state form and the fear that put into Capital. Now that fear is gone, and we see how bankrupt the liberal left in Europe really is.

Kudos to Munchau, an honest man if nothing else, for calling a spade a spade.

The Hun is always either at your throat or at your feet. Winston Churchill

by r------ on Thu Aug 29th, 2013 at 03:45:32 PM EST
[ Parent ]
I think maybe people on the liberal left, social democrats and the like, need to take a deep breath and realise their ideology is bankrupt, the only thing giving them successes in the past being the pressure from real existing socialism in state form and the fear that put into Capital.

I'm not generally a fan of permitting effect to precede cause in my models of reality, and by the time the first world war rolled around the Danish social democrats had had the power to affect a months-long general strike for fifteen years. And had used that power to gain substantial concessions in terms of the right to strike and organize.

I think a more serious problem for the social democrats is that they need an active, credible domestic communist threat, or they go off script. And after the communist parties wedded themselves to what was even then quite obviously the losing side in the Great Game, it was all over bar the shouting.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Aug 29th, 2013 at 04:13:03 PM EST
[ Parent ]
Hm, but pre-wwI was there even a communist (or revolutionary socialist) organisation in Denmark? In Sweden there wasn't, the revolutionary socialists and reformist socialists was in the same unions and the same party.

So I think treating the soc-dems as something static over a hundred years are wrong.

Then the effect of the cold war and the communist bloc, I think was that the right by and large in the anglo world and western Europe (with exceptions) turned left and accepted soc-dem governments and social reforms. Without threatening civil war or coups.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Thu Aug 29th, 2013 at 05:11:57 PM EST
[ Parent ]
Hm, but pre-wwI was there even a communist (or revolutionary socialist) organisation in Denmark? In Sweden there wasn't, the revolutionary socialists and reformist socialists was in the same unions and the same party.

Yes, they were organized around different unions.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri Aug 30th, 2013 at 06:25:08 PM EST
[ Parent ]
What evidence can you give us that the DDR followed on directly from Nazi ideology?

Do you even have an idea of what you are talking about?

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Aug 29th, 2013 at 03:58:25 PM EST
[ Parent ]
I think she is living in one of the two remaining successor states of Nazi Germany.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se
by A swedish kind of death on Thu Aug 29th, 2013 at 12:19:51 PM EST
[ Parent ]
The successor state of Nazi Germany, if there was one, was Allied-occupied Germany.

Finance is the brain [tumour] of the economy
by Migeru (migeru at eurotrib dot com) on Thu Aug 29th, 2013 at 12:40:44 PM EST
[ Parent ]
Well, there was no direct successor state of Nazi Germany, the allies arrested the Flensburg governemtn and declared the lack of government as reason for prolonged occupation. As though the German question remained not quite settled until reunification I think I have seen both Germanies and post-war Austria has been treated as successor states, at leat until the Austrian rehabilitation in 1955.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se
by A swedish kind of death on Thu Aug 29th, 2013 at 02:51:13 PM EST
[ Parent ]
That's another possible answer: the German state was abolished and reestablished.

On the other hand, states of war remained, reparations were paid...

Finance is the brain [tumour] of the economy

by Migeru (migeru at eurotrib dot com) on Thu Aug 29th, 2013 at 02:57:38 PM EST
[ Parent ]
the successor state of Nazi Germany

No, that would be the other Germany. The one where Die Alte Kameraden held high office well into the sixties and seventies, and still get together quite amiably to reminisce about the old times.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Aug 29th, 2013 at 01:15:28 PM EST
[ Parent ]
And of course, that never happened in the DDR...

Stasi Employed Nazis as Spies.

"We decide who was a Nazi."

NSDAP members in the DDR.


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

by Starvid on Thu Aug 29th, 2013 at 03:35:26 PM EST
[ Parent ]
I thought the moral successor of the Stasi was the CDU (Schäuble).

Finance is the brain [tumour] of the economy
by Migeru (migeru at eurotrib dot com) on Thu Aug 29th, 2013 at 03:41:31 PM EST
[ Parent ]
You're sort of making my point here: It's quite instructive to compare those lists - both in terms of length and in terms of what sort of offices we're talking about.

And if you're going to start on Gestapo agents that were turned, then we're going to be here all night, what with Paperclip and Doublecross and Gladio. Recruiting from the other side's spy agencies is standard practice in the cloak-and-dagger community. One may question the wisdom of this, but then one may question the wisdom of a lot of what goes on in that particular subculture.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Aug 29th, 2013 at 04:00:30 PM EST
[ Parent ]
Aha, three links that prove that some nazis actually were in positions of power in the GDR. To prove your weird little offensive theory you would now have to look at the equivalent in "free" West Germany. I recommend you take a very close look not only at military and spooks, but at the judiciary too.

Really, this sub-thread is unbelievable. A time-warp to cold war propaganda of the free west vs poor oppressed slaves in the "zone".

by Katrin on Thu Aug 29th, 2013 at 04:10:13 PM EST
[ Parent ]
[Starvid's Rysskräck™ Technology]

Finance is the brain [tumour] of the economy
by Migeru (migeru at eurotrib dot com) on Thu Aug 29th, 2013 at 04:12:15 PM EST
[ Parent ]
I mentioned your phobias before.

This is really just a subsection of Rysskräck.

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Aug 29th, 2013 at 04:19:32 PM EST
[ Parent ]
Katrin's phobias?

Finance is the brain [tumour] of the economy
by Migeru (migeru at eurotrib dot com) on Thu Aug 29th, 2013 at 04:27:51 PM EST
[ Parent ]
Oops, apologies. Starvid's, obviously.
by afew (afew(a in a circle)eurotrib_dot_com) on Fri Aug 30th, 2013 at 02:10:42 AM EST
[ Parent ]

KPF is "building a new socialist society, using the positive experiences of real socialism and to learn from mistakes" [46] Its primary leader is Sahra Wagenknecht"

What would we think of a person who talked about the "positive experiences of national socialism and to learn from mistakes"?

Is the basis of the whole thread simply that Starvid revealed his own phobias on the basis of his own reading mistake?

Or should one take away that "real socialism" equates to "national socialism?"

Hugo Chavez is (was) the mad "economy-wrecker in chief" (sic)? Would that be globally, or just the nationalized component of Venezuela's fossil fuel industry?


"Life shrinks or expands in proportion to one's courage." - Anaïs Nin

by Crazy Horse on Mon Sep 2nd, 2013 at 07:19:18 AM EST
[ Parent ]
Crazy Horse:
Or should one take away that "real socialism" equates to "national socialism?"

More that DDR is the moral equivalent of Nazi Germany. Or so I read it.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Mon Sep 2nd, 2013 at 07:57:36 AM EST
[ Parent ]
The rightward drift isn't just to remain within a comfort zone; it's to match their constituencies.  Electorally, the western democracies are petit bourgeois.  Mix in the surviving peasants, and you have the two classes that have most consistently supported hard right positions.  It may be delusional and self-defeating, but our societies are drifting right.
by rifek on Mon Sep 9th, 2013 at 01:02:34 AM EST
[ Parent ]
We are talking about Wagenknecht here. She has styled herself into some sort of Ludwig Erhard fan in the last years. Furthermore she like to fly solo and probably ignores whatever is the economic platform of her party.
by IM on Sun Aug 25th, 2013 at 03:28:39 PM EST
[ Parent ]
Erhard? The great liberal of the Wirtschaftswunder?

All the same, Wagenknecht was waxing lyrical about Goethe's devastating critique of capitalism. I'm not sure that was Erhardian.

by afew (afew(a in a circle)eurotrib_dot_com) on Sun Aug 25th, 2013 at 04:03:49 PM EST
[ Parent ]
Das Gespräch führten Hendrik Ankenbrand und Ralph Bollmann.: "Ich will Ludwig Erhard zu Ende denken" (Sahra Wagenknecht)
Der damalige Kapitalismus war sozial gebändigt. Man konnte von der gesetzlichen Rente im Alter leben. Bei Gesundheit gab es keine Zuzahlungen. Die Löhne stiegen. Hartz TV war noch nicht mal erdacht. Vor allem aber hatte die Politik mehr Spielräume, weil es noch nicht diese konzentrierte Wirtschaftsmacht gab

Pensions one could live of, health care was free, wages were rising, there was room for politics, because economic power wasn't as concentrated as now. That's a parallel to Erhard.

by Katrin on Sun Aug 25th, 2013 at 04:10:54 PM EST
[ Parent ]
The situation was one of postwar growth (as elsewhere), aided by debt forgiveness and the Marshall Plan, with incorporation of Bismarckian social insurance institutions. Saying "we were better off then" is a commonplace -- others think that of the postwar development of their countries too (France, Britain, US, to name but those).

Erhard himself was a neo-liberal, credited with saying "The market is social". For a left-party leader to identify herself with him (if that is what Wagenknecht is doing) is unbelievable.

Of course, I realize that there is a widely-shared Erhard myth which credits him with the "miracle". In which case Wagenknecht is just trying to pull some of the Erhard halo on to her own head. And this can cast her remarks about money in a similar light, ie opportunistic use of commonly-accepted frames. For her own advancement...

This doesn't dispel my misgivings about the capacity of existing left-of-the-left parties to be of much use in bringing about major political change.

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Aug 26th, 2013 at 11:35:27 AM EST
[ Parent ]
 "In which case Wagenknecht is just trying to pull some of the Erhard halo on to her own head."

I think that is what she is trying to do.

Too clever by half.

by IM on Mon Aug 26th, 2013 at 11:39:20 AM EST
[ Parent ]
Well, if the CDU no longer admire Erhard, he's up for grabs...

Finance is the brain [tumour] of the economy
by Migeru (migeru at eurotrib dot com) on Sun Aug 25th, 2013 at 04:55:29 PM EST
[ Parent ]
But is that the case?
by afew (afew(a in a circle)eurotrib_dot_com) on Mon Aug 26th, 2013 at 11:36:02 AM EST
[ Parent ]
Yes, the Social Market Economy has been superseded.

Finance is the brain [tumour] of the economy
by Migeru (migeru at eurotrib dot com) on Mon Aug 26th, 2013 at 03:35:34 PM EST
[ Parent ]
True, but it's not the same thing as saying Erhard has been cut loose as a reference.
by afew (afew(a in a circle)eurotrib_dot_com) on Tue Aug 27th, 2013 at 01:30:18 AM EST
[ Parent ]
From the blurb of her latest book: Freiheit statt Kapitalismus: Über vergessene Ideale, die Eurokrise und unsere Zukunft (Amazon)
Wettbewerb oder Leistung sind nicht mehr die zentralen Merkmale und Perspektiven unserer Wirtschaft, so die Autorin. Wenn Ökonomie die Kunst des Anreizesetzens ist, wirken heute die falschen, denn sie belohnen abstrakte Renditeziele und Jobvernichtung statt Erhalt und Ausbau von Arbeitsplätzen, Umweltschonung und Unternehmenswachstum. Sahra Wagenknecht nimmt die Theoretiker der Sozialen Marktwirtschaft wie Walter Eucken und Ludwig Erhard beim Wort und beschreibt es als dringlichste Herausforderung an die Wirtschaft, wieder produktiv und innovativ zu sein. Denn es muss nicht nur gerechter verteilt werden, es muss auch wieder mehr zu verteilen geben.
Google hack:
Competition or performance are no longer the key characteristics and prospects of our economy, says the author. If economics is the art of setting incentives, the wrong incentives are at play today, because they reward abstract earnings targets and job destruction rather than preservation and expansion of jobs, environmental protection and business growth. Sahra Wagenknecht takes the theorists of the social market economy such as Walter Eucken and Ludwig Erhard at their word and describes the most urgent challenge for the economy as being productive and innovative again. For distribution must not only be fairer, there must also be more to distribute.


Finance is the brain [tumour] of the economy
by Migeru (migeru at eurotrib dot com) on Tue Aug 27th, 2013 at 05:43:04 AM EST
[ Parent ]
Freiheit statt Kapitalismus - WikipediaFreiheit statt Kapitalismus - Wikipedia
Die frei verfügbaren Kapitalmassen entstammen der Umverteilung zulasten der Löhne und zugunsten der Kapitaleigner und fielen in der Privatisierung der Altersversorgung an. Allerdings erklärt das nach Wagenknecht das Entstehen der Finanzkrise nicht hinreichend, sondern eine bedeutsame Quelle der entstandenen Kapitalmassen liegt in dem Mechanismus der Geldschöpfung der globalisierten Banken. Vor der Globalisierung hatten die Banken die Pflicht zu einer gesetzlich festgelegten Mindestreserve. Diese bedeutete, dass nur ein bestimmter Teil der eingelegten Gelder verliehen werden durfte. Diese Sicherung wurde durch zahlreiche Möglichkeiten, die Mindestreserve zu drücken, gelockert oder abgeschafft, was zu einer nahezu unbegrenzten Möglichkeit einer Kreditschöpfung führte. Dies hatte nur deshalb keine inflationäre Wirkung, da dieses Geld im Finanzkreislauf zirkulierte und nicht zum Kauf von Wirtschaftsgütern verwendet wurde, so Wagenknecht. Mit dieser Jahrzehnte dauernden Deregulierung hat es das globale Finanzsystem geschafft, ohne Rückgriff auf zusätzliche Zentralbankgelder theoretisch unendliche Kreditvolumina zu erzeugen, denn die Mindestreserve ist heute kein Hebel mehr, um die Kreditvolumina zu begrenzen.[15]The freely available masses of capital come from the redistribution at the expense of Wages to the benefit of holders of capital and the privatization of pensions. According to Wagenknecht the emergence of the financial crisis this is not sufficient to explain the financial crisis. A significant source for the masses of capital is the money creation of globalised banks. Before globalization, the banks had a duty to hold statutory reserves. This meant that only a certain part of the funds deposited could be lent out. This security measure was loosened of abolished by various possibilities to reduce the minimum reserve levels which led to near unlimited credit creation. According to Wagenknecht the only reason this didn't have inflationary effects was that the money circulated in the financial sector and wasn't used to buy economic goods. with these decades of deregulation the global financial system managed to create theoretical infinite amounts of credit without having to call on additional central bank money. The minimal reserve is no longer a lever to limit credit creation. [15]  

No Post-Keynesianism here.

by generic on Tue Aug 27th, 2013 at 06:27:05 AM EST
[ Parent ]
Writing crap mortgages and then rehypothecating crap, which formed the basis of the bubble based on US real estate would fall under Keynes' "When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done" caveat and is definitely not recommended Keynesian economic policy. The fact that Keynes used hyperbolic arguments in certain situations, such as a debt-deflation death spiral, does not mean he advocated such policies be applied in any and all circumstances.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Aug 27th, 2013 at 11:17:42 AM EST
[ Parent ]
The problem here is that her model of banking is entirely conventional and she has a lot quantity of money thinking going.
That might cause problems in the unlikely case they ever get to enact policy.
by generic on Tue Aug 27th, 2013 at 01:58:06 PM EST
[ Parent ]
And it doesn't seem likely that she would even have a chance to do anything anyway.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Aug 27th, 2013 at 03:43:08 PM EST
[ Parent ]
It will be interesting to see where she is in ten  years' time.
by afew (afew(a in a circle)eurotrib_dot_com) on Wed Aug 28th, 2013 at 01:52:56 AM EST
[ Parent ]
The FDP?

Finance is the brain [tumour] of the economy
by Migeru (migeru at eurotrib dot com) on Wed Aug 28th, 2013 at 01:54:06 AM EST
[ Parent ]
If, in 10 years' time, it's big enough to float her boat.
by afew (afew(a in a circle)eurotrib_dot_com) on Wed Aug 28th, 2013 at 02:32:23 AM EST
[ Parent ]
She's basically saying bank lending is reserve constrained, not equity constrained.

Finance is the brain [tumour] of the economy
by Migeru (migeru at eurotrib dot com) on Tue Aug 27th, 2013 at 04:14:28 PM EST
[ Parent ]
Is not that the case in the Euro-zone?

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Aug 28th, 2013 at 11:38:54 AM EST
[ Parent ]
Why do you say that?

Finance is the brain [tumour] of the economy
by Migeru (migeru at eurotrib dot com) on Wed Aug 28th, 2013 at 11:41:21 AM EST
[ Parent ]
Isn't that the formal mechanism the Fed uses with US banks? They can make a loan in excess of their reserves, but they have to be able to get the reserves shortly to meet the reserve requirement and that has some small cost.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Aug 28th, 2013 at 11:49:44 AM EST
[ Parent ]
How is that different from what the ECB does?
by generic on Wed Aug 28th, 2013 at 12:03:35 PM EST
[ Parent ]
Operationally: The ECB extends (over)collateralized loans to banks against unimpeachable collateral (read: Treasury issue). The Fed buys and sells assets of unimpeachable soundness (read: Treasury issue).

In practice: The Fed uses a cruder tool than the ECB, but the Fed uses its tool with much greater skill. The outcome is practically indistinguishable.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Aug 28th, 2013 at 02:22:46 PM EST
[ Parent ]
Reserves are a fraction of deposits, not of loans.

Finance is the brain [tumour] of the economy
by Migeru (migeru at eurotrib dot com) on Wed Aug 28th, 2013 at 12:05:47 PM EST
[ Parent ]
And deposits are liabilities.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Aug 28th, 2013 at 12:12:06 PM EST
[ Parent ]
And reserves are assets.

Finance is the brain [tumour] of the economy
by Migeru (migeru at eurotrib dot com) on Wed Aug 28th, 2013 at 12:32:15 PM EST
[ Parent ]
That is only an operational constraint if your central bank likes to crash your banking system.

Which the ECBuBa uses as a strategic threat to usurp the power of democratically elected parliaments, but not something they have ever actually done for real.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Aug 28th, 2013 at 12:18:20 PM EST
[ Parent ]
And there are also equity capital requirements along with rules as to what counts in tiers, Basel I & II. So it would seem that banks have both reserve and capital requirements, with the capital requirements being the usual rub, as the Central Bank can supply reserves at will at a price, but should the Central Bank, for whatever reason, not supply the reserves that could make a given bank insolvent overnight. Wouldn't they normally 'resolve' that bank rather than not supplying reserves?

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Aug 28th, 2013 at 12:45:17 PM EST
[ Parent ]
And there are also equity capital requirements along with rules as to what counts in tiers, Basel I & II.

Yes, and those are binding.

but should the Central Bank, for whatever reason,

Then the ATMs will stop working until parliament finds itself a new central banker. Which, depending on how far parliament has its head up its ass, may be before or after the angry mob who now cannot spend their wages to buy food finds itself a new parliament.

not supply the reserves that could make a given bank insolvent overnight. Wouldn't they normally 'resolve' that bank rather than not supplying reserves?

Illiquid, not insolvent. The bank will only become insolvent after they distress sell assets to cover their liquidity requirements.

But sane central banks never deliberately create bank runs on their own banking system like that. Partly because it's a game of musical chairs: All liquidity comes, in the final analysis, from the central bank. So if the central bank withdraws enough liquidity from the system that a bank must fold due to liquidity requirements, then (at least) one bank will fold when the music stops... and it may not be the bank the CB wanted to kill.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Aug 28th, 2013 at 02:19:59 PM EST
[ Parent ]
The central bank supplies reserves to preserve the payments system. It has no choice, bank resolution is a fiscal action.

Finance is the brain [tumour] of the economy
by Migeru (migeru at eurotrib dot com) on Wed Aug 28th, 2013 at 02:53:14 PM EST
[ Parent ]
Unless the central bank stages what effectively amounts to a coup d'etat and starts usurping fiscal function.

Particularly if nobody in the government has the balls to call its bluff and send armed goons to its place of business...

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Aug 28th, 2013 at 02:55:39 PM EST
[ Parent ]
Migeru:
For distribution must not only be fairer, there must also be more to distribute.

sounds like RW weasel words talking point...

horse, cart etc.

(usually prefacing reformanic rhetoric about too much government regulation strangling the 'engine of the economy')

as for the larger theme of the diary, whether the present 'left' in europe is capable of changing narratives in midstream, and really call for radical changes...

right now, as ARG notes, the only glimmer is beppe grillo.

this is what co-option looks like, folks.

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Tue Aug 27th, 2013 at 06:10:30 PM EST
[ Parent ]
It used to be a right-wing talking point. Now that the right wing's talking point is "we can't afford nice things as penance for past excesses" the old anti-redistribution talking point can be taken up by postcommunists who find themselves quite comfortable to the right of Keynes, the English Liberal Patrician.

Finance is the brain [tumour] of the economy
by Migeru (migeru at eurotrib dot com) on Tue Aug 27th, 2013 at 06:20:29 PM EST
[ Parent ]
Well according to their platform they demand direct borrowing by states from the ECB.

On the other hand they oppose a common bank regulation by the ECB because the ECB isn't directly democratically legitimized.

So much for the ECB and how that squares with Wafgenknechts Faust II interpretation...

by IM on Sun Aug 25th, 2013 at 03:38:53 PM EST
[ Parent ]
according to their platform they demand direct borrowing by states from the ECB

As does she. Though looking through old interviews she does talk a lot about the deficit. I always read that as Austerity failing on its own terms but maybe that was me projecting.

by generic on Mon Aug 26th, 2013 at 07:43:38 AM EST
[ Parent ]
Does she? That is hard to square with this complaining about money printing.
by IM on Mon Aug 26th, 2013 at 11:31:04 AM EST
[ Parent ]
Well she is stating the party line:

Wagenknecht "Man kauft jetzt auch die Spekulanten raus" - Stellvertretende Vorsitzende der Linken | Interview | Deutschlandradio Kultur

Deswegen fordern wir eine öffentliche Bank in Europa, die den Staaten günstige Kredite gibt, zu EZB-Zinsen, die sich also auch bei der EZB refinanziert, allerdings nicht, um die Schulden exorbitant auszuweiten.

Sahra Wagenknecht rechnet mit den Banken ab: ,,Für die Wettbuden muss der Staat nicht haften" - Staatsverschuldung - FOCUS Online - Nachrichten

,,Der einfachste Weg wären Direktkredite der EZB innerhalb bestimmter Limits, je nach Konjunktur." Der erneute Schuldenanstieg für die Staaten, den das wiederum mit sich brächte, müsse durch eine ,,strikte Defizitregel und eine vernünftige Steuerpolitik" begrenzt werden.

party platform

Die Europäische Zentralbank soll die Staaten in der Eurozone in einem festgelegten Rahmen direkt finanzieren. Als ersten Schritt fordert DIE LINKE die Gründung einer europäischen Bank für öffentliche Anleihen, die zu ihrer Refinanzierung Zentralbankkredite aufnehmen kann.

Hard to say what she believes personally. She does put a lot more emphasis on the limits part than the platform.

by generic on Mon Aug 26th, 2013 at 02:05:38 PM EST
[ Parent ]
Yes, she does insist on the "Schulden exorbitant" and the "strikte Defizitregel".

But is it really the party line that "paper money" is somehow suspect and that Merkel's government is printing money like there's no tomorrow?

by afew (afew(a in a circle)eurotrib_dot_com) on Tue Aug 27th, 2013 at 01:38:43 AM EST
[ Parent ]
So, Die Linke is full yon board with the balanced budget amendment. Useless.

Finance is the brain [tumour] of the economy
by Migeru (migeru at eurotrib dot com) on Tue Aug 27th, 2013 at 03:06:05 AM EST
[ Parent ]
State financing by the ECB is the party line. As was opposition to the balanced budget amendment.
by generic on Tue Aug 27th, 2013 at 04:53:57 AM EST
[ Parent ]
"strikte Defizitregel"?

Finance is the brain [tumour] of the economy
by Migeru (migeru at eurotrib dot com) on Tue Aug 27th, 2013 at 04:57:58 AM EST
[ Parent ]
That's Wagenknecht.
by afew (afew(a in a circle)eurotrib_dot_com) on Tue Aug 27th, 2013 at 05:06:30 AM EST
[ Parent ]
What I meant is that earlier I credited her for nothing more than stating the party line on state financing while discounting all the deficit talk as trying to win political points.
Which might have been an error since I don't know who the driving force behind the proposals was.

Her doctoral advisor seems to be an expert on the labour theory of value so that might also be a possibility.

by generic on Tue Aug 27th, 2013 at 05:16:52 AM EST
[ Parent ]
Wikipedia: Sahra Wagennecht
Nach eigenen Angaben begann sie 2005 ihre Dissertation zum Thema The Limits of Choice. Saving Decisions and Basic Needs in Developed Countries (,,Die Grenzen der Auswahl. Sparentscheidungen und Grundbedürfnisse in entwickelten Ländern") im Fach Volkswirtschaftslehre. Im August 2012 reichte sie ihre Arbeit an der Technischen Universität Chemnitz beim linken keynesianisch orientierten Mikroökonomen Fritz Helmedag ein, der u.a. Vertrauensdozent der Rosa-Luxemburg-Stiftung ist. Zwei Monate später bestand sie ihre mündliche Prüfung zum Dr. rer. pol. [6] mit der Gesamtbewertung magna cum laude. Die Doktorarbeit will Wagenknecht im Juni 2013 in Buchform veröffentlichen."
Hmm

Finance is the brain [tumour] of the economy
by Migeru (migeru at eurotrib dot com) on Tue Aug 27th, 2013 at 05:35:26 AM EST
[ Parent ]
>But is it really the party line that "paper money" is somehow suspect and that Merkel's government is printing money like there's no tomorrow<

The platform is silent on inflation or money creation.

by IM on Tue Aug 27th, 2013 at 10:13:17 AM EST
[ Parent ]
Is there any significant portion of German votes who have any idea that fiat currency CAN be used successfully and that the horrors which they dread are the result of MISUSE of fiat currency? Do any understand that interest creates a need for an expanding money supply that won't be met with an expanding amount of gold? Do all think that their 'exceptionalism' will prevent them from facing the consequences of an inadequate supply of hard money - ever?

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Aug 27th, 2013 at 11:28:10 AM EST
[ Parent ]
The German version doesn't work for me.
by generic on Sun Aug 25th, 2013 at 01:45:02 PM EST
For me neither. Googling brought this: http://www.arte.tv/de/7630188.html
by Katrin on Sun Aug 25th, 2013 at 02:20:02 PM EST
[ Parent ]
Yes, that's the sequence.
by afew (afew(a in a circle)eurotrib_dot_com) on Sun Aug 25th, 2013 at 02:35:15 PM EST
[ Parent ]
I think they are now showing this evening's newscast in place of yesterday's.
by afew (afew(a in a circle)eurotrib_dot_com) on Sun Aug 25th, 2013 at 02:34:19 PM EST
[ Parent ]
Mephistopheles solves contradictions of capitalism by proposing paper money?! What is capitalism without paper money and compound interest?

The Medicis escaped the old Christian prohibition of usury by mediating (and insuring) trade with India, China. But those were the early glorious opportunities of growth. Now the only way to keep investors happy is to print all money for their expected returns.

by das monde on Sun Aug 25th, 2013 at 07:50:37 PM EST
What is capitalism without paper money and compound interest?

First it was called cannibalism. Then it was called slavery.

Then someone invented double-entry book keeping, and the rest is history.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Mon Aug 26th, 2013 at 01:24:30 PM EST
[ Parent ]
There is some truth in the argument about printing money without creating value. Currently bailout money has mostly gone directly to private debtors.

Had the bailout money been first used to pay to produce something valuable and then taxed and the taxes used to pay out private debtors the situation in Europe would be better than now.

by Jute on Mon Aug 26th, 2013 at 03:50:37 AM EST
I agree, but I didn't understand that she was talking about the bailouts, which afaik were contributed to by state budgets. I understood her to be referring to the ECB's provision of liquidities to the banking system, and probably also to bond purchases, where it could be said by inflation hawks that the ECB was "printing banknotes".

In fact, it's true, the provision of liquidities does not filter through to the "real" economy and create activity. But that is also why the inflation figures don't move...

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Aug 26th, 2013 at 11:42:47 AM EST
[ Parent ]
But that is also why the inflation figures don't move...

True at a limit which the European Periphery is far from reaching. Direct payments via OMP to the unemployed and similar direct payments to finance medical services in Greece and Portugal could be made to a significant percentage (20-40%) of current GDP in those countries without producing inflation - right up to the point where there begins to be wage push inflation. What is being done now is simply the imposition of gratuitous suffering due to (charitably) rigidly and almost religiously clinging to irrelevant economic and monetary views.  

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Aug 26th, 2013 at 03:48:47 PM EST
[ Parent ]
What is being done now is simply the imposition of gratuitous suffering due to (charitably) rigidly and almost religiously clinging to irrelevant economic and monetary views.

greece needs another 10 bill so it doesn't default on the 300 bill they owe to foreign banks.

10 bill is cheap to keep the german volk from realising who their real enemies are...

... or where their tax euros are headed for!

roll on the day when the pfennig drops

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Tue Aug 27th, 2013 at 06:20:42 PM EST
[ Parent ]
As an aside, I suspect every culture has some protean myths about the dangers of paper money.

I can't remember the details now, but my Indian grandfather had a favourite story of the Mughal Emperor who introduced paper money - and how within months the artisans of every city had perfected forging it... and the (hyper) inflation that resulted.

by Metatone (metatone [a|t] gmail (dot) com) on Mon Aug 26th, 2013 at 06:06:12 AM EST
The Mongols in Persia tried to introduce paper money, which worked very well within the older parts of the Mongol empire and China, but the merchants resisted and the Mongol governor was not confident of being able to put down an uprising so he withdrew the paper money. The success of paper money is contingent on a strong central government. In the older parts of the empire refusal to accept the official paper money was punishable by death - a punishment the Mongols generally eschewed.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Aug 26th, 2013 at 10:51:47 AM EST
[ Parent ]
I wonder if we are in the throes of a political polarity reversal event analogous to the time the Republicans stopped being the promoters of the abolition of slavery and Democrats stopped being the hold-outs. Could it be that social democratic parties now are becoming the true conservatives and more radical ideas for change are coming from both to the left and right of them?

It seems to me that the macro-economic stupidity of worrying about printing money and inflation in a liquidity trap, and heaping austerity onto deflation have a certain conservative appeal, as they deepen class inequalities and also inequities between the EU core and periphery. In this context bail-outs shore up the haves against the have nots and ensure that debts can be repaid even as the poor get ever deeper into debt/poverty. The Marxist revolutionary support for the proletariat becomes the conservative support for the status quo and an ever reducing re-distributionist state.

So politics trumps economics and Die Linke tout conservative hard money philosophies.  Money becomes a store not only of value, but of moral virtue and political right. The Germans are right because they are wealthy and they are wealthy because they are right, and this applies even more to elites within German and core societies.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon Aug 26th, 2013 at 07:55:45 AM EST
ever reducing re-distributionist state.

The polarity reversal is in the direction of the net redistribution.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Aug 26th, 2013 at 10:57:40 AM EST
[ Parent ]
Does nobody pay any attention to what happens before Faust introduces paper money? There's a major economic crisis, as though Brüning or Hoover was in charge. In particular, the army is in disarray, and neighbouring kings are threatening to invade. I guess after losing the empire, they could at least boast that the currency was sound. And I fail to see the problem: after the big party, the economy seems to be going well, and they have no problem having a big festival for the Helen of Troy show.

Anyway, if Germany were to use Faust as a guide, they wouldn't bother building dikes to preserve their northern shores since this will be pointless anyway, they'd use lots of asbetos because of its purity, and German politicians would be much less polite since everbody would know that

Im Deutschen lügt man, wenn man höflich ist.
by gk (gk (gk quattro due due sette @gmail.com)) on Mon Aug 26th, 2013 at 01:23:34 PM EST
gk:
Does nobody pay any attention to what happens before Faust introduces paper money?

Well, Wagenknecht does, and she describes it as a proto-Marxist critique of capitalism on Goethe's part.

by afew (afew(a in a circle)eurotrib_dot_com) on Tue Aug 27th, 2013 at 01:42:03 AM EST
[ Parent ]
Selective attention and inattention seems to be rather easily enforced by elites.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Aug 27th, 2013 at 11:32:47 AM EST
[ Parent ]
Now that the TVDuel is over, leaving heaving spin doctors and salivating media to stick their appropriate postmortems, is it possible that the most rational course for the future is to wish for the greater of two evils, rather than the lesser?

Eye truly wish to see the Greens outpoll the SPD (not without trepidation), but it won't happen, since they've attacked eating meat and put a shitload of small Kneipen (pubs) in danger of going out of business in NRW (no smoking period).

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin

by Crazy Horse on Mon Sep 2nd, 2013 at 07:29:13 AM EST
Crazy Horse:
and put a shitload of small Kneipen (pubs) in danger of going out of business in NRW (no smoking period).

In the polls, it doesn't matter if this is merely believed or is actually happening. But for the curious mind, is small pubs in NWR going out of business?

Because the same was claimed loudly in Sweden when smoking was banned in all restaurants and pubs, and then nothing happened. People drink, go outside to smoke (and it is a bit chillier here in the winters) and then go inside and drink some more. Only effect I know about is that people in the beginning complained about the smell at dancing establishments. Previously the smoke had covered the smell of sweat. But I guess they eventually invested in air fresheners or something.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Mon Sep 2nd, 2013 at 08:11:26 AM EST
[ Parent ]
i believe the new law is too new to have specifically caused closings already. But there is a huge uprising, where many owners have said they were now over the border of insolvency. I know of specific instances where much larger numbers of complaints from neighbors have been logged, aimed at those outside smoking. (Of course in summer and fall, the smokers tend to stay outside.)

the situation might be a bit different in Germany, with a culture of perhaps more very small traditional pubs.

Here in Bremen,the compromises seem to be working well. But in NRW there was zero compromise.

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin

by Crazy Horse on Mon Sep 2nd, 2013 at 10:06:17 AM EST
[ Parent ]
So small businesses whine.

Hands up, who's surprised?

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Sep 2nd, 2013 at 01:08:45 PM EST
[ Parent ]
Now that the TVDuel is over, leaving heaving spin doctors and salivating media to stick their appropriate postmortems, is it possible that the most rational course for the future is to wish for the greater of two evils, rather than the lesser?

No, that is almost never productive.

The SPD has never demonstrated the capacity to learn from electoral defeat, and will likely prefer the obscurity of splendid isolation even as Linke eventually overtake them. But they will keep being less bad than Black-Yellow. So the focus should be on gaining voters for Linke rather than bleeding the SPD of voters.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Sep 2nd, 2013 at 01:08:52 PM EST
[ Parent ]


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