Staring at the abiss with Paul Krugman | 235 comments (235 topical, 0 editorial, 0 hidden)

Re: Staring at the abiss with Paul Krugman (4.00 / 2)

The dilemma of Portugal and Greece is reminiscent of the dilemma faced by the officers and men serving under a naval captain who seems to have gone mad. The problem is not just what their actions would lead to on the ship, but what the consequences would be once they attempted to rejoin society. Regardless of the facts, naval and civil authorities are highly reluctant to admit that there is ever justification for such action. Admission would constitute opening the biggest can of worms in existence. Yet every function on the ship is deteriorating towards collapse, led by morale and there is a deep fear that the captain may scuttle the ship, taking all hands down with it - Jim Jones fashion.

The fear of authorities of the undermining of authority is mirrored by the current crisis of legitimacy. Officially, accountability is to democratically elected officials, but we know that the accountability being protected currently is to the fraudulent wealth controlled by a tiny minority whose actions and folly has already set in motion the sinking of the ship. Yet, for governmental authority, fear of the wrath of the wealthy and the perils of the downfall of the existing, century old financial system overbalances concern for the lives of the population which that system is supposed to serve. So they will refuse to acknowledge the problem until they cannot.

The lessons from history seem to be that all revolutions turn into self devouring monsters that senselessly kill a horrifying number of citizens in the process of replacing an old system with a newer system that ends up being a new set of scoundrels operating a new system that still bears many of the faults of the old. Regardless of the rhetoric, the powerful always use power to their personal benefit.

The 'end of history' was just the ultimate conservative dream of eternal stasis. Stay tuned.

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

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sat Mar 17th, 2012 at 09:02:11 AM EST

Re: Staring at the abiss with Paul Krugman (none / 1)

Yup. if there was any hope that, once JC Juncker, the last active politician involved in the Maastricht treaty, left office, the Euro rules would be reformed to make them more sane, the Euro crisis has dashed those hopes. The serious people have doubled down, dug their heels, and come up with an even more insane "Fiscal Compact". The responsibility for the mess is so extensive that nobody is going to accuse anyone else of being responsible. Only those who fall by the Darwinian wayside can be safely blamed.

There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman

by Carrie (migeru at eurotrib dot com) on Sat Mar 17th, 2012 at 09:05:12 AM EST
[ Parent ]

Re: Staring at the abiss with Paul Krugman (none / 0)

The dilemma of Portugal and Greece

Because France is not Italy is not Spain is not Portugal is not Ireland is not Greece.

There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman

by Carrie (migeru at eurotrib dot com) on Sat Mar 17th, 2012 at 09:06:13 AM EST
[ Parent ]

Re: Staring at the abiss with Paul Krugman (none / 1)

:-) But Greece and Portugal are the first who are forced to confront the crises. Denial is still possible in Spain, Italy, Belguim, France, ....

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

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sat Mar 17th, 2012 at 09:14:53 AM EST
[ Parent ]

Re: Staring at the abiss with Paul Krugman (4.00 / 3)

I wonder if France going down would finally change the discussion. I used to think it undoubtedly would, but these people are exceptionally stupid.

To the point that I only half-jokingly said to Mig yesterday that the Troika won't get it until the car bombs start going off in Berlin and Frankfurt.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Sat Mar 17th, 2012 at 09:24:35 AM EST
[ Parent ]

Re: Staring at the abiss with Paul Krugman (4.00 / 2)

If Hollande wins the French presidential election things get interesting agains... for about three months until he surrenders to the Austerians.

There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman

by Carrie (migeru at eurotrib dot com) on Sat Mar 17th, 2012 at 09:35:42 AM EST
[ Parent ]

Interestingly (none / 1)

those that were most directly seen as the "centrist realists" in the socialist party - people like Attali or Peyrelevade - have now openly moved to support Sarkozy or Bayrou because they find the PS too dinosaury for their tastes.

So there is hope yet, I'd say.

Wind power

by Jerome a Paris (etg@eurotrib.com) on Sat Mar 17th, 2012 at 07:07:20 PM EST
[ Parent ]

Re: Staring at the abiss with Paul Krugman (4.00 / 4)

At least part of the Troika get it: The IMF's preemptive smokescreen for covering up another foretold program failure (by Yanis Varoufakis). The question is why policy has such inertia that civil servants can continue pushing it forward when they can see it doesn't work. Something ARGeezer addresses upthread but doesn't really answer.

What is it, the fact that people in positions of responsibility prefer to ruin the institutions they are running than lose face by admitting a mistake and changing course?

There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman

by Carrie (migeru at eurotrib dot com) on Sat Mar 17th, 2012 at 09:46:28 AM EST
[ Parent ]

Re: Staring at the abiss with Paul Krugman (4.00 / 3)

To the ancient, traditional mindset, bravely holding your post while the world collapses around you is seen as noble while using your position to transform the system is seen as subversive. To subvert the system they serve is 'treasonous' and undercuts their own authority. The emergence of a new consensus, if it happens, is the only thing that could vindicate their actions.

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

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sat Mar 17th, 2012 at 11:05:30 AM EST
[ Parent ]

Re: Staring at the abyss with Paul Krugman (none / 1)

The short answer is most people don't handle change very well and will not change their conclusions or actions based on new evidence. The process is:

Ignore the New Evidence
Deny the New Evidence
Reject that the New Evidence will affect them in any way
Reject that the New Evidence will affect them to the same degree

Now add the fact political and other Decision Makers are highly addicted, physically and mentally 'attached,' to the status quo and it's easy to see why the EU is in a Real Mess©.

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Sat Mar 17th, 2012 at 01:00:09 PM EST
[ Parent ]

Re: Staring at the abyss with Paul Krugman (none / 1)

Not just the EU, either.

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

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sat Mar 17th, 2012 at 06:39:49 PM EST
[ Parent ]

Re: Staring at the abiss with Paul Krugman (none / 0)

Migeru:

What is it, the fact that people in positions of responsibility prefer to ruin the institutions they are running than lose face by admitting a mistake and changing course?

they've starved any other neural pathways than the canon they have espoused, they were selected for their capacity to be single minded 'true believers' and now that's all they know how to be, especially as that attitude is reinforced every time they open a E1000 bottle of wine and feel like they're getting away with the heist.

any critical thinkers (not team players) were thrown under the bus long ago, the filtering so efficient, now their bubble of delusional denial is as hermetic as is possible, and only the most gamechanging of events can irrupt it.

since the universe abhors stasis, that's exactly what they'll get, unless enough wise heads unite in a message that could be strong enough to capture mass attention and steer the ship away from the shoals.

heavily armed, extremely paranoid psychos have taken over the asylum, now it will take a correspondingly high level of survival intelligence to wrest back the control from them.

it is a very tricky, difficult situation.

'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 Sat Mar 17th, 2012 at 04:37:05 PM EST
[ Parent ]

Re: Staring at the abiss with Paul Krugman (4.00 / 2)

The reason why they don't change course is because there are multiple actors involved and a few of them go along with the powerful who they believe have the wrong proscription out of hope that eventually they will come to their senses.

But this is a fool's game.

Even Varoufakis believes (with his constant beating of the drum for Eurobonds) that eventually Germany will change course. But it will never happen, not until it is way too late.

by Upstate NY on Sun Mar 18th, 2012 at 02:12:00 PM EST
[ Parent ]

European solidarity (4.00 / 4)

Germany will change course only to preserve the Franco-German axis and it may be too late then.

My concern throughout has not been that some workable policy mix won't be find after all the wrong ones have been tried first, but the collateral damage inflicted before getting there.

The destruction of Greece is too much collateral damage for me, but of course one could argue that it's about 1% of the EU so it's not a serious loss if it stops at that. What I can't fathom is the callousness required for the Troika to formulate and execute the policy. You don't drive "one of us" to IMF riots, which indicates that Greece is not perceived as one of us in Brussels and Frankfurt and that is the real problem.

There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman

by Carrie (migeru at eurotrib dot com) on Mon Mar 19th, 2012 at 05:13:10 AM EST
[ Parent ]

Re: European solidarity (4.00 / 2)

You don't drive "one of us" to IMF riots, which indicates that Greece is not perceived as one of us in Brussels and Frankfurt and that is the real problem.

Of course. Wasn't that clear from the beginning?

There is a tiny economic area (no, with a currency union that expression doesn't make sense). Start new: there is a tiny area that managed to break away from the old arch-enemy and chose us. It hasn't much of a business idea, but who cares? It's one territory and without question the centre has to transfer funds to the parts of the periphery that are at a disadvantage. Perhaps one day it will even be the other way round, who knows? You noticed that I am talking of the Saarland, I hope.

It just depends on the definition of us, and that means the definition of the European idea.

by Katrin on Mon Mar 19th, 2012 at 05:43:20 AM EST
[ Parent ]

Re: European solidarity (none / 1)

"Germany will change course only to preserve the Franco-German axis and it may be too late then."

Or will it?

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

by Starvid on Mon Mar 19th, 2012 at 08:19:34 AM EST
[ Parent ]

Re: European solidarity (none / 1)

That German-Russian scenario should make your mouth water with [Starvid's Rysskräck™ Technology] .

There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman

by Carrie (migeru at eurotrib dot com) on Mon Mar 19th, 2012 at 08:22:03 AM EST
[ Parent ]

Re: European solidarity (none / 0)

Closer security relations with Poland certainly seems very reasonable from a Swedish point of view.

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

by Starvid on Mon Mar 19th, 2012 at 08:25:16 AM EST
[ Parent ]

Re: European solidarity (4.00 / 2)

I thought after the email-leak everybody agreed that stratfor are a bunch of jokers?

German-polish relations haven't been as good as now since the siege of vienna.

by IM on Wed Mar 21st, 2012 at 07:16:53 AM EST
[ Parent ]

Re: European solidarity (none / 0)

And thank god for that! :)

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

by Starvid on Wed Mar 21st, 2012 at 01:20:24 PM EST
[ Parent ]