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Mon Oct 15th, 2012 at 04:44:11 AM EST
From Eurointelligence last Friday (seen in the Salon):
Anti-austerity demonstration in Zagreb as EU states ratify Croatia's accession treaty
Between 5,000 and 10,000 people demonstrated in Zagreb's main St. Mark's square on Thursday against the government's austerity policies, with an estimated 1,500 going on to march towards the government building, reports Croatian tPortal (English Edition). The NY Times on Thursday reported on the European Parliament appearance of EU Commissioner for Enlargement Stefan Füle, who said that the Commission would "associate enlargement countries" to the enhanced economic governance of the eurozone as this would 'boost economic resilience' and foster job creation and growth 'before they join'.
(Croatia is slated to join the EU in July 2013, but has been maintaining a dirty Euro peg which puts it in a similar macroeconomic and political situation to mediterranean Euro countries. Krugman and Füle obviously disagree on the benefits of Eurozone macroeconomic policy for accession countries.)
Union leader Vilim Ribić spoke of class war, and said that one billion euros had been given up by public sector workers in three years and not one job had been created by the austerity policies which would hinder recovery and lengthen the crisis.
(more below the fold)
Sat Sep 29th, 2012 at 02:01:08 AM EST
Thursday evening, ZDF talkshow hostess Maybrit Illner invited "the" former Chancellor (as Helmut Kohl is out of commission) Helmut Schmidt and the current president Joachim Gauck to her show. Among the most intense moments is this:
|"Warum noch an Europa glauben?" - ZDF.de|| "Why believe in Europe still?" - ZDF.de |
|Altkanzler Helmut Schmidt (SPD) hat der Bundesregierung erneut vorgeworfen, in der Europapolitik zu nationalegoistisch zu agieren. Wenn Bundeskanzlerin Angela Merkel (CDU) anderswo in Europa mit einer Hakenkreuzbinde karikiert werde, sei das "zum Teil ihre eigene Schuld", sagte Schmidt in der ZDF-Sendung "maybrit illner". Merkel habe in der Finanzkrise "eine viel zu starke Zentralisierung der ganzen Fragenkomplexe auf ihre Person vorgenommen".||Former Chancellor Helmut Schmidt (SPD) has again reproached the Federal Government for acting too 'nationalegotistically' in European politics. If German Chancellor Angela Merkel (CDU) is caricatured elsewhere in Europe with a swastika, that is "partly her own fault," Schmidt said in the ZDF program "Maybrit Illner". [According to Schmidt], in the financial crisis Merkel has "centralized around her person the entire complex of issues."|
The linked page contains video of the entire show, and a selection of (sanitised) quotes.
Sun Sep 23rd, 2012 at 03:38:14 AM EST
The Twank said:
Received the CA voters guide in the mail today ... about 1/2 cm. thick. 11 propositions in all and I have NO interest in reading all the details. What to do ,,, what to do. Look to who/what organization is for or against each one. For example, you NEVER see anyone with Republican in it ... Repubs are so unpopular in CA that they don't have the nerve/stupidity to identify themselves. So they go under codewords of "Chamber of Commerce" and "Taxpayer Watchdogs" hoping the rest of us are as stoooooooopid as they are. Fat chance! So it took me about 15 minutes to sift through all that bullshit ... not a problem. Anything with "Nurses" or "Teachers" in it is usually a go. Someone wants to repeal the death penalty in CA ... I want to extend it to all Repubs but who listens to me!!!
I was going to answer in a comment, but I figured this was good for a short diary, too.
My answer below the fold.
Sat Sep 8th, 2012 at 09:11:04 AM EST
This is just going to be a quick lazy translation diary, because it comments itself.
Punts de Vista: Hagan el favor de irse muriendo, que hay que ahorrar: las mujeres pobres, primero
Cada día nos desayunamos o almorzamos con un nuevo recorte en la sanidad. Y cada vez son más agresivos. Y más letales. El proceso que siguen en el PP para hacer que nos traguemos más suavemente la píldora empieza por lanzar un globo sonda, como el de hace un par de días sobre el REpago de las mamografías. Luego se echa humo con prestaciones de otro tipo, a poder ser que tengan algo que ver con la estética para que el conjunto pierda el carácter de recorte severo: por ejemplo, la eliminación de los pliegues después del tratamiento quirúrgico a las personas muy obesas que han perdido peso en poco tiempo... O insinuaciones más insidiosas sobre que no se destinen fondos públicos a financiar los problemas de fertilidad (poniendo casi siempre la raíz del problema en la mujer, cuando cada vez es menos el caso). Lo importante es hacer una buena mezcla, levantar mucho polvo, para disimular lo fundamental: que las mujeres son de nuevo las víctimas propiciatorias de los hachazos sobre la sanidad. Ahora, amenazadas con perder el derecho a mamografías a no ser que REpaguen. ¡En cuantas casas con dificultades económicas incluso para poder comer, se podrá destinar dinero para una prevención tan necesaria que puede salvarlas de un cáncer de mama!Please get dying, we have to save: poor women first
Soraya Sáenz de Santamaría pidió ayer que no se especulara sobre este tema "tan sensible para las mujeres", aunque admitió que se está revisando la cartera de servicios sanitarios y que "una comisión de expertos" (¡ay, dios!) y las Comunidades Autónomas "trabajan" en el tema.... Con lo que vienen recomendando hasta la fecha los "expertos" de la FAES y las JONS, y la mayoría de consejeros de Salud de las Comunidades (en lugar destacado,el de Catalunya) ya nos podemos ir preparando.
(September 8, 2012)
Every day we have breakfast or lunch with a new cut to health care. And they're ever more aggressive. And more lethal. The process followed by the PP to get us to swallow the pill starts by launching a trial balloon, such as the one a few years ago about repayment of mammograms. Then they spread smoke with other kinds of services, if possible having to do with plastic surgery so that the ensemble loses the character of a severe cut: for instance, the removal of folds after surgery for very obese people who have lost a lot of weight in a short time... Or more insidious insinuations about not using public funds to finance fertility issues (always putting the root of the problem on women, which is less and less the case). What's important is to make a good mix, to kick up lots of dust, to hide the fundamental fact: that women are once again the victims of the hacking away at health care. Now, threatened with losing the right to a mammogram unless they pay. In how many homes with economic difficulties even to eat will they be able to devote money to such a necessary preventative measure that can save them from a breast cancer!
[Vicepresident] Soraya Sáenz de Santamaría asked yesterday [at the press conference after the cabinet meeting] not to speculate on this topic "so sensitive for women", though she admitted that the portfolio of health services is being revised and that "a committee of experts" (oh, God!) and the regional governments are "working" on the issue... With the recommendations so far coming from the FAES and JONS and the majority of the health councillors of Autonomous Communities (with the Catalan one in a prominent place) we can begin to get ready.
Notes: the blogger is Catalan, hence the swipe at the Catalan regional govenment; FAES and JONS is a pun on former PM Aznar's FAES "foundation" (a thonk-tink) and the old Falange
party whose full acronym was "FE de las JONS".
Wed Sep 5th, 2012 at 02:23:28 AM EST
In the context of the second saga-length thread about religion, I pointed out that
secularism, separation of church and state, and freedom of conscience are three separate concepts.
I was of the opinion that, by and large, the US had freedom of conscience and separation of church and state, but it wasn't a secular society; on the other hand, Europe tends to have freedom of conscience and a secular society but no separation of church and state.
Is this one of those cases where you can pick two out of three?
A third mode is where you have a secular society and no state church, but also no freedom of conscience (the "compulsory atheism" of "real existing socialism" in the erstwhile Soviet bloc).
Eurogreen commented that maybe France is an example where the three features coexist.
And I am just now wondering whether the classification extends outside of Western (i.e. Mesopotamian) civilization. How about the Chinese and Hindu cultural matrices?
Wed Aug 29th, 2012 at 05:53:51 AM EST
Eurointelligence is running another column of mine: The Eurozone's giant sucking sound (28.08.2012)
As reported two weeks ago, Germany's current account surplus is projected to exceed 6% for 2012, likely triggering a warning from the European Commission. Such large German current account surpluses are not new, what's new is that since November 2011 the European Commission's Macroeconomic Imbalance Scorecard includes a 6% threshold on the three-year moving-average current account balance (the threshold for deficits is 4%). Here I will argue that Germany's persistently high current account surplus is dangerous for the stability of the Eurozone and corrective government action is needed (in principle concerted Eurozone government action, but in practice requiring that the German government 'own' the policy).
You can read it there, and comment here.
Tue Jul 17th, 2012 at 07:01:15 PM EST
A long time ago, in a galaxy far away, Drew gave me his copy of Keynes' Treatise on Probability, which he had acquired at some point thinking it would be relevant to his economist education but which might be more profitable to me, who had an academic interest in probability theory and had read a number of classic works already. The book languished on my shelf (and travelled in a box, and was stacked on another shelf where it languished, and so on through three separate moves) until one day last week I decided to finally read it (in fact encouraged by a conversation I had with another participant in the Minsky Seminar last month). I think it was worth it, but then again I have weird tastes in reading material.
To Keynes, probability is a branch of logic: the theory of rational thought under uncertainty. Ordinary logic is just the subset of rational thought dealing with certain (or certainly false) propositions. I think this is a really interesting approach. Probability to Keynes is relative but not subjective. That is, probability is always relative to some data (or hypotheses), and so it is in a way subjective since each of us has different data/knowledge/experience, even different mental acuity. However, Keynes' probability is not subjective in the sense that a correctly formed probabilistic reasoning, being enunciated relative to explicit hypotheses, should be valid independently. Keynes writes at length about the problem of induction (reasoning from particular, though possibly numerous, observations to general statements) and he stresses that, contrary to what has been asserted by philosophers in the past, the fact that an inductive conclusion turns out to be false does not invalidate the inductive reasoning relative to the information available at the time the conclusion was formulated.
Anyway, back in 2009 in the context of a discussion of a journalistic piece about David Li's killer formula (the gaussian copula approach to CDS pricing) I said I should probably write a diary about the arbitrage pricing theory that underlies a lot of the ongoing Global Clusterfuck. At the time I was probably thinking that I might use the preface of a popular book on derivative pricing, Financial Calculus by Baxter and Rennie. They begin their book with a parable of the bookmakers intended to disabuse the reader from the get-go that market prices are expected future values. That's right: market prices are not average values as normally understood. However, after having read Keynes on Probability I don't have to infringe Baxter and Rennie's copyright or even retype their text from my hardcopy of the derivatives book, because I can simply lift a section from the Project Gutenberg version of Keynes...
Sat Jul 7th, 2012 at 07:51:17 AM EST
Two weeks ago I attended the annual Minsky Summer Seminar at the Levy Institute. There, Scott Fullwiler of Krugman's flashing neon sign fame made a very nice presentation on Central Bank Operations. He was unfortunate enough to have to compete for the audience's attention with the Germany-Greece Euro 2012 quarterfinal, and he bravely disregarded Bob Barbera's advice to just talk for 5 minutes and then take everyone to the bar to watch the game. In the end I think he managed to keep everyone's attention as his presentation was really nice. You can now see the slides online: @stf18
My Prezi on central bank operations from the Minsky conference a few weeks ago http://prezi.com/bv0dpvapapht/m ...
The companion paper, for those interested, is Modern Central Bank Operations - The General Principles
(June 1, 2008)
There are sharp differences between the two approaches that nonetheless remain. Among neoclassicals, the literature on central bank operations is not integrated into models of financial asset pricing or into the so-called "new consensus" model of the economy. Though the latter assumes interest-rate targeting, new consensus models are concerned with the strategy of monetary policy, not the tactics or daily operations; though well-established as a research topic for journal publications, monetary policy implementation remains "a side issue" in neoclassical monetary theory graduate textbooks like Walsh (2003) (Bindseil 2004, 1). Further, neoclassicals still do not consider money to be endogenously created in the banking system, as Marc Lavoie repeatedly notes; indeed, as Charles Goodhart has argued in a series of recent papers, there is in fact no private banking system whatsoever in the new consensus model (e.g., Goodhart 2008a).
This is disappointing, naturally, since the evidence published in the recent neoclassical literature on central bank operations has in fact been remarkably consistent with the endogenous money view of central bank operations. The horizontalist view that central banks only target interest rates directly (not reserve or monetary aggregates) and can do so as precisely as desired has been in particular repeatedly supported by this literature. While the relevant literature could fill several volumes, of special note here is the book by Ulrich Bindseil (2004), former Head of the ECB's Liquidity Management Section, which describes in substantial detail the operations of the Fed, ECB, and Bank of England in a manner that very nearly resembles the horizontalist story.
The purpose of this chapter is to describe ten general principles of modern central bank operations. These ten principles are not intended to be exhaustive or comprehensive; neither are the discussions of the individual principles necessarily exhaustive. Rather, these principles represent "what every economist should now be expected to know" given the large quantities of orthodox and heterodox research in this area and the empirical or anecdotal evidence contained in speeches and publications of central bank officials. As noted already, this research generally confirms the earlier points made by Moore (1988) and other authors associated in one way or another with the horizontalist literature
So hopefully (hah!) that settles the debate on endogenous money creation. Anyway, I think the single most important point (here I'll quote from the flashing neon sign
blog) is that
a central bank defends the payments system every day, every hour, every minute, at some price. This is the essence or fundamental truth of central banking, and anyone who fails to grasp it doesn't understand central bank operations
here is the rate that the central bank targets. In the US it's the federal funds rate
, and in the Eurozone that's probably the overnight interbank rate known as EONIA. And what's being defended is a safe and sound payment and clearing system, which is the lynchpin (though not the be-all and end-all) of financial stability. However, it appears that the ECB has been doing a crap job of targeting EONIA, or at any rate they are lazy. It's also possible that the ECB has been targeting money aggregates, which would be the ECB's own (and worrying) flashing neon sign. Seriously, does this look like the ECB has been targeting a rate?
For an explanation of the various rates in this chart (EONIA, deposit, marginal, etc) I refer you to my earlier post Central Banking 101: the EONIA heartbeat (February 26th, 2011). The present post will be based upon updating the charts from that article with the last 16 months of data: from February 2011 to June 2012. Much has happened in that time and I'll comment on all that below the fold. I encourage you to read the old post at this point.
Mon Jul 2nd, 2012 at 05:31:02 AM EST
A few days ago, Brad DeLong wrote a piece on Project Syndicate complaining about freshwater economists' refusal to admit that the last five years of economic history run counter to "new classical" economic theory: The Perils of Prophecy (Project Syndicate, 27 June 2012)
Of course, we historically-minded economists are not surprised that they were wrong. We are, however, surprised at how few of them have marked their beliefs to market in any sense. On the contrary, many of them, their reputations under water, have doubled down on those beliefs, apparently in the hope that events will, for once, break their way, and that people might thus be induced to forget their abysmal forecasting track record.
It is commendable that Brad DeLong has been honest about "marking his beliefs to market"
But we - or at least I - have gotten significant components of the last four years wrong. Three things surprised me (and still do). The first is the failure of central banks to adopt a rule like nominal GDP targeting or its equivalent. Second, I expected wage inflation in the North Atlantic to fall even farther than it has - toward, even if not to, zero. Finally, the yield curve did not steepen sharply for the United States: federal funds rates at zero I expected, but 30-Year US Treasury bonds at a nominal rate of 2.7% I did not.
However, the following paragraph where he enumerates representatives of "we historically-minded economists"
So the big lesson is simple: trust those who work in the tradition of Walter Bagehot, Hyman Minsky, and Charles Kindleberger. That means trusting economists like Paul Krugman, Paul Romer, Gary Gorton, Carmen Reinhart, Ken Rogoff, Raghuram Rajan, Larry Summers, Barry Eichengreen, Olivier Blanchard, and their peers. Just as they got the recent past right, so they are the ones most likely to get the distribution of possible futures right.
prompted Steve Keen to cry What utter self-serving drivel, Brad Delong!
(June 30th, 2012)
Where to begin? For starters, "the last five years" includes June 2007-just before the commencement of the financial crisis. But this time, people like Wynne Godley, Ann Pettifors, Randall Wray, Nouriel Roubini, Dean Baker, Peter Schiff and I had spent years warning that a huge crisis was coming, and had a variety of debt-based explanations as to why it was inevitable. By then, Godley, Wray and I and many other Post Keynesian economists had spent decades imbibing and developing the work of Hyman Minsky.
(Keen continued after the fold)
Mon Apr 30th, 2012 at 05:06:35 AM EST
There was a somewhat interesting discussion on war and European civilisation (such as it is) and colonialism in the comments to a recent diary by afew on the French presidential election. In it featured:
- the argument by Steven Pinker that we have become "more civilised" since WWII and so the kind of genocidal warfare of the 1930s and 40s is unlikely to be repeated
- the question of whether large wars should be considered as a fraction of total world population (in which case WWII ranked only 6th according to wikipedia - and estimates about older conflicts were called into question in the comments) or in absolute numbers.
In that context, I compared WWII to the 30 years' war in terms of how "traumatic" it had been to the peoples of Central Europe, as well as making the rather cryptic comment "complex systems have lulls, diary tomorrow". This is that diary, with a little delay.
frontpaged with minor edit - Nomad
Wed Apr 11th, 2012 at 07:06:27 AM EST
The speed of the decomposition of Rajoy's government is astonishing. It's been only 111 days since his investiture vote on 20 December 2011, and today... (the linked story has video)
|Salida por el garaje para evitar a la prensa | Política | EL PAÍS||Exit through the garage to avoid the press | Politics | El Pais|
|Regresan a los pasillos de las Cortes las huidas a la carrera de Mariano Rajoy cuando se encuentra con la prensa, habituales en su etapa en la oposición cada vez que había asuntos polémicos. El presidente del Gobierno, que lleva dos semanas sin contestar ninguna pregunta de los periodistas, precisamente en el momento más delicado de su mandato, con la prima de riesgo a 430 y la Bolsa cayendo un 3%, huyó este martes de la prensa de una forma especialmente ostensible.||The running escapes of Mariano Rajoy when he meets the press are back in the corridors of the Parliament, as was usual during his time in opposition every time there was a controversy. The Prime Minister, who hasn't answered a press question in two weeks, precisely in the most delicate moment of his tenure, with [Spain's] risk premium at 430 [hundredths of a percent] and the stock market down 3%, fled from the press this Tuesday in a particularly ostensible way.|
And #CorreMarianoCorre (run, Mariano, run) is now a trending topic on twitter.
Sun Apr 8th, 2012 at 06:48:14 AM EST
I saw the news today, o, boy...
ElPais.com: Rajoy prepara "medidas contundentes" para espantar el fantasma del rescate
[Spanish PM] Rajoy prepares "hard-hitting measures" to banish the spectre of a rescue
- Guindos adelanta que el Gobierno ultima reformas de servicios públicos
- "España tiene un problema de credibilidad", afirman fuentes de Bruselas
¿Debe quedar en prisión preventiva el que se resiste a un policía?
- [Economy Minister] Guindos advances that the government is giving the finishing touches to public service reform
- "Spain has a credibiity problem", claim sources in Brussels
¿Cómo hay que castigar al que insulta a un policía? ¿Al que ocupa la vía pública en la calle en una manifestación sin autorizar? ¿Al que no se marcha cuando un agente se lo indica? ¿Al que causa destrozos y quema un contenedor en una protesta callejera? El Gobierno, en previsión de futuras movilizaciones en protesta por los recortes económicos, ha lanzado un mensaje claro: el mantenimiento del orden público es una prioridad y estas conductas no quedarán impunes. "Lo que sucedió en Barcelona el día de la huelga general son hechos gravísimos que no pueden estar castigados solo con una pena mínima de un año de prisión, y tampoco es razonable que no se pueda acordar la prisión provisional para los que actúan de esta forma", defiende el secretario de Estado de Seguridad, Ignacio Ulloa. "Es necesario que la gente sepa que acometer a los agentes es algo grave y que el Estado actuará en consecuencia".Must there be preventive prison for someone who resists the police?
How must one punish those that insult a police officer? Those who occupy the public right of way on the street in an unauthorised demonstration? Those that do not leave when an officer tells them? Those that cause damages and burn garbage containers in a street protest? The Government, foreseeing future mobilizations in protest against economic cuts, has sent a clear message: keeping the pubic order is a priority and these behaviours won't go unpunished. "What happened in Barcelona on the day of the General Strike are very serious acts that cannot be punished only with a minimum penalty of a year in prison and it's also not reasonable that preventive prison cannot be ordered for those who act in this way", defends the Secretary of State for Security, Ignacio Ulloa. "It's necessary that people know that assaulting an officer is a serious matter and the State will act accordingly".
The most disturbing thing about this is the casual mixing of nonviolent civil disobedience with street battles, and I can't tell if the conflation comes form the government, the press or the opposition.
This is what the General Strike looked like in Barcelona. Nothing like it happened elsewhere in the country.
Sun Apr 1st, 2012 at 04:53:53 AM EST
Not six hours had passed last Friday since the press conference at which the Spanish Finance Minister Cristóbal Montoro had introduced the new budget after Spain's Council of Ministers that the ECBuBa was already on record saying that it was good, but not good enough.
Details below the fold.
Thu Feb 16th, 2012 at 10:02:13 AM EST
Today I took my girlfriend to the hospital for a test, and while she was being seen I went to give blood. I'm a habitual but irregular donor, possibly best described as an "opportunistic donor". I usually give blood at mobile units or when I go to a hospital to accompany a relative or friend.
While giving blood, people in Spain are given water to drink, and afterwards a sandwich and another drink. The latter used to be done on-site, but today the staff gave me a cafeteria ticket. Ostensibly this change of procedure has been adopted as a cost-saving measure, occasioned by the generalised austerity policy.
The result of this policy is that the donation event is much more impersonal, as the giving and receiving of food and drink was an excuse for chit-chat between donors and staff. In addition, there is less time for recovery on-site after the donation and the donor is now forced to leave earlier than hey otherwise would, make their way to the cafeteria, stand in line to get food, compete with other cafeteria users for a seat to consume the food and drink, and generally be in a crowded and stressful environment within minutes after having been drained of a pint of blood. At a minimum it is inconsiderate towards the donor, and it can be a contributing factor to increasing the frequency of post-donation fainting spells.
Fri Feb 10th, 2012 at 03:34:35 AM EST
On February 9th a guilty sentence was handed down in the first of three ongoing trials of Spanish investigative judge Baltasar Garzón.
ElPais.com in English: Crusading Judge Garzón thrown off the court bench for 11 years
Specifically, the 56-year-old Garzón was convicted of breaching his duties and violating the constitutional rights of several public corruption defendants by ordering phone taps of their jailhouse conversations in 2009.
In a strongly worded 69-page ruling, the justices said that Garzón caused "a drastic and unjustified reduction in the defense's strategy" and trampled on the constitutional rights of alleged Gürtel corruption network ringleaders Francisco Correa and Pablo Crespo, and other suspects in the conspiracy.
Using the same words as in a preliminary inquiry by investigating Justice Alberto Jorge Barreiro, the Supreme Court also accused Garzón of "practices typical of totalitarian regimes."
Judge Garzón is a flamboyant, attention-seeking judge who, by some accounts, happens to be a shoddy investigative judge when all is said and done. However, it would appear that he's being subjected to a judicial lynching. I am not a lawyer, but it would appear that none of the three cases he's undergoing actually have merit (I'll go into the salient features of each). Garzón has made lots of enemies along his judicial (and political, see below also) career, both on the left and on the right. This is therefore a fully bipartisan ejection from the judicial career.
What makes this situation rather serious in my opinion is that Garzón has been judged already by public opinion, which is divided mostly along partisan lines. The more radical left has gone as far as to go out on the streets today under the slogan ni respeto ni acato, i.e., "I neither respect nor abide" (by the Supreme Court's ruling). I think it is dangerous when a substantial portion of the population (including parlamentarians from the United Left and the left wing of the PSOE) decides that the Supreme Court is corrupt. There are even op-eds in ElPais (still the country's paper of record) saying as much (Google translate version). This at a time where the indignados continue to agitate (after 9 months) on the streets under the slogan no nos representan ("they do not represent us"), an explicit rejection of representative democracy as currently practiced in Spain. About 5 months ago, the Constitution was urgently reformed over the objections of all parties except for the PP and PSOE, which led to claims by parlamentarians that "the constitutional consensus" (of 35 years ago) was "now broken". Recently the newspaper El Mundo published a director's letter (i.e., a signed editorial - see google translation) suggesting that Garzón will eventually emerge as a populist leader for the indignado movement. I think that's off the wall, but equally I think the situation is becoming explosive, with the state institutions losing legitimacy before a large section of the population while at the same time the conservatives have a comfortable hold on power at all levels of government and may be quite ready to crack down.
Sat Dec 24th, 2011 at 04:26:06 AM EST
Spain has a new Government since this week. The investiture vote was on Monday and Tuesday, Wednesday and Thursday the Cabinet swore their positions, and yesterday there was a first Council of Ministers.
The government is relatively small, with only 13 ministers and only one vice-president. Prime Minister Mariano Rajoy hasn't felt the need to pay back favours or accommodate political families within his party and so the government is composed of faithful, technocrats and safe hands. Rajoy has separated the Finance and Economy ministries and will take for himself the Economic vice-presidency to mediate between the two ministers. In this area, he has brought the traditional Ministry for Public Administrations under Finance, and Research and Development (dropping the old Science label) under Economy. However, what's become clear is who the real person to watch is in this government, and it's not Rajoy but Soraya Sáenz de Santamaría. Here's her with a look on her face like she's just stolen her portfolio:
Wed Nov 30th, 2011 at 06:27:06 PM EST
The markets were up today on the following news: Markets surge as Fed and central banks step in to try to prevent credit crunch (the Guardian)
The European Central Bank, which has come under intense pressure over its role in the eurozone crisis, said it would now be able to provide liquidity to struggling banks in yen, sterling, Swiss francs and Canadian dollars if necessary.
Sir Mervyn King, governor of the Bank of England, chaired the teleconference involving six central banks at which the measures were agreed in his capacity as chairman of the economic consultative committee of the Bank of International Settlements - the club of international central bankers.
The Bank joined the Federal Reserve, the Bank of Japan, the ECB, the Bank of Canada and the Swiss National Bank in making the announcement.
Something is fishy, though.
Tue Nov 15th, 2011 at 02:41:25 AM EST
Eurointelligence has published a new article of mine: The role of ideology in this crisis
The eurozone has a pervasive bias against the public sector, from the level of policy down to its institutional makeup. If it does not allow itself common action in the public interest, then crisis resolution efforts are either wasted or a cover for national goals or special interests.
You can read the full article there, and comment here.
Sat Nov 5th, 2011 at 04:49:55 AM EST
Consider the following account of the Bretton Woods summit towards the end of WWII:
When Keynes began to explain his idea, in papers published in 1942 and 1943, it detonated in the minds of all who read it. The British economist Lionel Robbins reported that "it would be difficult to exaggerate the electrifying effect on thought throughout the whole relevant apparatus of government ... nothing so imaginative and so ambitious had ever been discussed"(5). Economists all over the world saw that Keynes had cracked it. As the Allies prepared for the Bretton Woods conference, Britain adopted Keynes's solution as its official negotiating position.
But there was one country - at the time the world's biggest creditor - in which his proposal was less welcome. The head of the US delegation at Bretton Woods, Harry Dexter White, responded to Lord Keynes's idea thus: "We have been perfectly adamant on that point. We have taken the position of absolutely no"(6). Instead he proposed an International Stabilisation Fund, which would place the entire burden of maintaining the balance of trade on the deficit nations. It would place no limits on the surplus that successful exporters could accumulate. He also suggested an International Bank for Reconstruction and Development, which would provide capital for economic reconstruction after the war. White, backed by the financial clout of the US Treasury, prevailed. The International Stabilisation Fund became the International Monetary Fund. The International Bank for Reconstruction and Development remains the principal lending arm of the World Bank.
The consequences, especially for the poorest indebted countries, have been catastrophic. Acting on behalf of the rich world, imposing conditions which no free country would tolerate, the IMF has bled them dry. As Joseph Stiglitz has shown, the Fund compounds existing economic crises and creates crises where none existed before. It has destabilised exchange rates, exacerbated balance of payments problems, forced countries into debt and recession, wrecked public services and destroyed the jobs and incomes of tens of millions of people(7).
(Clearing Up This Mess
, George Monbiot, November 18, 2008)
Sun Aug 28th, 2011 at 07:52:40 PM EST
ElPais.com in English: Spain's main parties agree constitutional amendment capping public deficit
The draft law was filed with Congress on Friday and is due to be approved on September 2 without recourse to a referendum, allowing it to be in place before general elections called for November 20 in which Prime Minister José Luis Rodríguez will not be standing, and which are expected to be won by the PP.
The government's latest effort to ward off attacks on its sovereign debt also affords a de[g]ree of flexibility in cases of "natural disasters, economic recession and situations of exceptional emergency out [of] the control of the government that considerably prejudice the economic or social sustainability of the state."
At a news conference after the regular Friday Cabinet meeting, government spokesman José Blanco "categorically" denied that reform had been carried out under heavy pressure from the European Central Bank. "The ECB never brought up the reform of the Constitution," he said. "You can't respond to a demand that never existed."
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