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In most ethical systems, the quack and the con-man is held to a higher standard of foresight than his marks.

That is just nonsense. Your picture of an europe where all other countries are not only powerless but not even able to understand what they sign is a fairy tale.

Caveat emptor, eh?

In point of fact, they did not understand what they were signing. This is a matter of public record. Nowhere in the Eurozone was there any substantive public debate on the consequences of accession. And what sorry excuse for a debate there was adopted Lysenkoist economics wholesale.

Suppose, now, that Germany was, in fact, acting in good faith. What is the good-faith response to realising that you have proposed a system that manifestly does not work?

It is to say "oops, sorry, let's fix this." In this case, to support unconditional fiscal defence of full employment, backed by the full seigniorage power of the central bank.

Germany has not made this good-faith response to the crisis. On the contrary, Germany has been the loudest and most hysterical voice decrying any and all reasonable plans, and proposing one Rube Goldberg-esque bullshit pseudo-solution after the other in order to avoid negotiating in good faith.

The fact that Germany is not the only Eurozone country to do so does not detract from the fact that it is both the largest, the most vocal and the most extremist in insisting that others bow down before its inflation neurosis.

And that is shifting the goalposts. Tgere was a very considerable fiscal stimulus in Germany, perhaps the biggest in the G8.

No. To be "considerable," it has to bear some considerable relationship to the magnitude of the problem. Defining "considerable" as "considerable relative to what the Swabian Housewife Economists at the Bundesbank would have liked," by contrast, is moving the goalposts.

What about the Netherlands or Finland? or Luxemburg?

Were they invited to the Merkozy mini-summits?

No, I thought not.

If you presidentialise the EU around Frau Merkel, then you don't get to play the victimisation card and the "but they do it too" card when people assume that Merkel is the president of Europe.

All german puppets? Once again, you are denying the agency of all other EU countries.

I am noting that under current treaty arrangements they have no power to overrule an obstructionist German position.

And neither the fed nor the BoE was able or perhaps willing to bury their great recession.

The US Fed/Treasury are doing an almost reasonable job of fighting their recession.

The BoE can't tell the Exchequer to spend more money. But it sure as Hell isn't telling the Exchequer that it can't spend more money.

The central bank and the treasury have to work together to bury a downturn in newly printed money. In the UK, it's the Tory-controlled Treasury that is obstructionist. In the Eurozone, it is the BuBa-dominated ECB that is obstructionist.

And I thought I was joking. You really think everything is a german conspiracy. Have you worked in templars and jesuits yet?

I am not postulating a German conspiracy. I am noting that Germany has been peddling toxic economic Lysenkoism to the rest of Europe for four solid decades now.

The fact that the Swabian Housewife Economists believe in the bullshit they peddle is not an excuse, any more than being a fervent believer in homeopathy is an excuse for pretending that it can cure disease. Nor is the fact that the rest of Europe believes it as well.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Feb 18th, 2012 at 11:13:04 AM EST
[ Parent ]
>Caveat emptor, eh?<

Among professionals that is indeed the legal principle. And the other european governments are as professional or non-professional as the the german one.

 >In point of fact, they did not understand what they were signing. This is a matter of public record. Nowhere in the Eurozone was there any substantive public debate on the consequences of accession.<

But this nowhere in the eurozone includes Germany doesn't it?

>Suppose, now, that Germany was, in fact, acting in good faith. What is the good-faith response to realising that you have proposed a system that manifestly does not work?

 It is to say "oops, sorry, let's fix this." In this case, to support unconditional fiscal defence of full employment, backed by the full seigniorage power of the central bank.<

Hold on. is there a single, I repeat a single european government proposing that? You see the problem?

>No. To be "considerable," it has to bear some considerable relationship to the magnitude of the problem. Defining "considerable" as "considerable relative to what the Swabian Housewife Economists at the Bundesbank would have liked," by contrast, is moving the goalposts.<

That is not what I said. Considerable compared to all other G8 countries, including the US and considerable measured in gdp.

 >I am noting that under current treaty arrangements they have no power to overrule an obstructionist German position.<

Of course they can. Theres is no German veto not shared with any other Eu country. In every majority voting case, there is a possibility to out-vote Germany. And at the ECB, the center of your complaints, is is really easy to outvote two german members on the council.

 >The US Fed/Treasury are doing an almost reasonable job of fighting their recession.<

Nonsense. The stimulus was much to small. But even you can't refashion republicans or moderate democrats into german agents, so you rather paint a rosy picture.

 >I am not postulating a German conspiracy. I am noting that Germany has been peddling toxic economic Lysenkoism to the rest of Europe for four solid decades now.<

In other words, you are postulating a conspiracy. And I thought blaming les anglo saxons is simple minded.

 >The fact that the Swabian Housewife Economists believe in the bullshit they peddle is not an excuse, any more than being a fervent believer in homeopathy is an excuse for pretending that it can cure disease. Nor is the fact that the rest of Europe believes it as well.<

But a fact; a fact you tend to ignore in preferment to your nationalistic narrative.

by IM on Sat Feb 18th, 2012 at 11:51:05 AM EST
[ Parent ]
>I am not postulating a German conspiracy. I am noting that Germany has been peddling toxic economic Lysenkoism to the rest of Europe for four solid decades now.<

In other words, you are postulating a conspiracy.

Well, no. The German economic establishment is wrong but powerful so it can spread its wrongness.

I mean, the conventional wisdom at street level is that anything Germans say on economics must be right.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker

by Migeru (migeru at eurotrib dot com) on Sat Feb 18th, 2012 at 12:00:36 PM EST
[ Parent ]
I mean, the conventional wisdom at street level is that anything Germans say on economics must be right.

But back in the far-aywy day of say 2004 that wasn't conventional wisdom. Back then the celtic tiger was the model.

Or Slovakia or Estonia or whatever.

by IM on Sat Feb 18th, 2012 at 12:07:11 PM EST
[ Parent ]
No. It is a modern variation of 'Might makes Right.' Germany is the modern European economic superpower. 'It must be because they are doing things right.' Not only are the poor honest, but they are also generous. They would not think that the reason Germany is doing so well, comparatively, is that they are manipulating the rules to their advantage.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Feb 19th, 2012 at 07:46:18 PM EST
[ Parent ]
Among professionals that is indeed the legal principle.

Except when it comes to government bonds, apparently. You're not allowed to tell the buyer to fuck off and die on those, are you?

But this nowhere in the eurozone includes Germany doesn't it?

It does.

Believing in fairy tales is not an excuse for murder.

And let's be perfectly fucking clear here: What Mr. Schauble is doing is murder. Clear, cold-blooded murder. Before this crisis is over, he and his friends will have murdered tens of thousands of Greeks and God only knows how many Spaniards, Irish and Italians.

Major industrial depressions are not a fucking game that you get to play over drinks in the country club.

Hold on. is there a single, I repeat a single european government proposing that? You see the problem?

No, I do not see any problem with attacking the most stridently insane country of the lot.

When Germany starts acting less insane than the Netherlands, I will happily begin going after the Netherlands. Until and unless that happens, however, you are making pathetic excuses.

>I am noting that under current treaty arrangements they have no power to overrule an obstructionist German position.<

Of course they can. Theres is no German veto not shared with any other Eu country.

My emphasis.

See the problem here?

In every majority voting case, there is a possibility to out-vote Germany. And at the ECB, the center of your complaints, is is really easy to outvote two german members on the council.

And every time they do that, the Bundesbank immediately goes to Frankfurter Allgemeine BildZeitung and shrieks and whines about how unfair everybody is treating Germany until it stops.

>The US Fed/Treasury are doing an almost reasonable job of fighting their recession.<

Nonsense. The stimulus was much to small. But even you can't refashion republicans or moderate democrats into german agents, so you rather paint a rosy picture.

The stimulus was much too small, certainly.

But I note that no American state has seen 34 % drops in government outlays, 15 % drops in nominal wages and unemployment percentages in the high 20s. Even after you strip out all the lies the Americans put in their statistics, they're still outperforming the Troika by five to ten percentage points on all important measures.

>I am not postulating a German conspiracy. I am noting that Germany has been peddling toxic economic Lysenkoism to the rest of Europe for four solid decades now.<

In other words, you are postulating a conspiracy. And I thought blaming les anglo saxons is simple minded.

I am blaming the Hayekians. I am noting that Germany is the foremost peddler of the Hayekian cancer in Europe today.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Feb 18th, 2012 at 12:18:03 PM EST
[ Parent ]
>Except when it comes to government bonds, apparently. You're not allowed to tell the buyer to fuck off and die on those, are you?<

As far as I understand the legal situation, it is not any different. But you don't really want to hear that, do you?

 >It does.

 Believing in fairy tales is not an excuse for murder.<

And hyperbole doesn't replace an argument.

 >No, I do not see any problem with attacking the most stridently insane country of the lot.

 When Germany starts acting less insane than the Netherlands, I will happily begin going after the Netherlands.<

Ad calendas graecas or so.

 >My emphasis.

 See the problem here?<

No.

 >And every time they do that, the Bundesbank immediately goes to Frankfurter Allgemeine BildZeitung and shrieks and whines about how unfair everybody is treating Germany until it stops.<

But that, like the two resignations, is actually a sign of weakness and waning influence.

 >The stimulus was much too small, certainly.

 But I note that no American state has seen 34 % drops in government outlays, 15 % drops in nominal wages and unemployment percentages in the high 20s.<

As far as I understand the states and local governments have almost offset the federal stimulus with their balanced budgets requirements. and the resulting fiscal austerity.

by IM on Sat Feb 18th, 2012 at 12:36:45 PM EST
[ Parent ]
Believing in fairy tales is not an excuse for murder.

And hyperbole doesn't replace an argument.

The closest point of comparison to what the Troika is inflicting on Greece is Russia under Yeltsin.

That experience killed roughly 1 % of the Russian population. If Greece performs similarly, and there is no, a priori, any reason it should not, you're looking at somewhere on the order of fifty thousand preventable deaths.

Yeah, I call that murder.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Feb 18th, 2012 at 12:42:35 PM EST
[ Parent ]
As far as I understand the [US] states and local governments have almost offset the federal stimulus with their balanced budgets requirements. and the resulting fiscal austerity.

And yet they are still doing measurably better than the Troika.

In other words, the Troika confidence fairie performs worse than a placebo stimulus.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Feb 18th, 2012 at 12:45:30 PM EST
[ Parent ]
Because of - may I mention that once again - automatic stabilizers. The federal spending on Social security, medicare and medicaid keeps places like Nevada afloat.
by IM on Sat Feb 18th, 2012 at 12:53:24 PM EST
[ Parent ]
Automatic stabilisers which Germany is busy dismantling in Greece.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Feb 18th, 2012 at 01:57:03 PM EST
[ Parent ]
Let me remind you that Greece was running deficits even before the crisis hit and the automatic stabilizers kicked in. Look, if you want to run Keynesian policy, either through automatic stabilizers or stimulus programs, you need to have at least semi-sound public finances before the crisis hits. And after the crisis, you need to pay down debt, so you have a space financial space available to borrow heavily during the next crisis.

Sadly, politicians far prefer spending during bad times than they enjoy saving during good times (try to convince the Swabian housewifes that taxes must rise during good times to increase the size of the budget surplus), which is likely why Keynesians has gotten such a bad reputation.

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

by Starvid on Sat Feb 18th, 2012 at 02:24:43 PM EST
[ Parent ]
That's only true under a commodity standard or pegged ForEx policy.

It is true that ideally you would attempt to deter inflation whenever this is consistent with full employment. But under a floating FX regime and absent atavistic commodity pegs, nothing about having spent yesteryear prevents you from spending this year.

Yes, spending yesteryear may have created inflation. But it makes no sense to encourage deflation today just because because there was inflation yesterday. For the same reason it makes no sense to shoot a man in the back after he has been shot in the front, on the theory that "the average bullet velocity through his chest will be zero."

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Feb 18th, 2012 at 03:39:48 PM EST
[ Parent ]

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