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Eurointelligence Daily Morning Newsbriefing: Stiglitz and Fitoussi are helping Grillo with his economic agenda (05.03.2013)
A group of internationally renowned economists are aligning themselves with Beppe Grillo's anti euro movement; the coordinator of the group is Mauro Gallegati; Pier Luigi Bersani has set another ultimatum to Grillo, calling on him to support a minority government, or face new elections; Grillo says No, but says he is open to a technical government, but without involvement of the traditional parties; Italian retail sales fell 10% on 2012 and 35% on 2011, according to Confcommercio; German newspapers report that the Bundesbank wants the ECB out of the troika because its put the ECB under political pressure; Suddeutsche says this is very unlikely to happen; the Bundesbank says the new governing board structures of the single supervisory mechanism are so convoluted that they are ineffective; Spanish police believes that Barcenas kept 80% of kickbacks he obtained in the PP's name; after a recent disastrous press conference, the PP has a completely new idea: not to say anything anymore about the affair; Spain's chief prosecutor is seeking to remove the chief prosecutor of Catalonia; Spain's bank restructuring fund FROB has failed to auction off Catalunya Caixa; the eurogroup agreed a loan extension for Ireland and Portugal; but Germany and the Netherland remain inflexible on the question of direct bank recapitalisation; tax shortfalls, unemployment and pending court decisions threaten to derail the Portuguese budget target; the troika and Greece are running into a wall over the agreement to reduce the number of public sector workers by 25,000; Cyprus has agreed to an external bank audit; German car sales plunge 10% yoy; a consensus is emerging in the coalition in support of a widening of minimum wages; Latvia, meanwhile, has applied to become the 18th member state of the eurozone.


I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Tue Mar 5th, 2013 at 03:35:00 AM EST
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The economic programme of Bepp Grillo's Five Star Movement is still a skeleton but the platform will be fleshed out with the help of renowned economists and Nobel prize winners, who are ready to align themselves with the new movement. Les Echos reports that Joseph Stieglitz and Jean-Paul Fitoussi are among those to help to develop the economic agenda, with Mauro Gallegati acting as a coordinator. To shift the gear from protest to proposal, the 163 newly elected - 109 MPs and 54 senators with an average age of 31 - are to get extra training, Gallegati told La Republica. Jean Paul Fitoussi and Bruce Greenwald are helping out.  Over several years, Beppo Grillo has maintained a dialogue with Paul Krugman whose video message is posted on the party's blog.


I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Tue Mar 5th, 2013 at 03:36:12 AM EST
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I should note that in Spain's 2008 general election, Stiglitz was among the "Nobel Laureates" who lent their name to the PSOE's economic programme.

He appears to have moved from the so-called Social Democrats to the Grillo camp.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS

by Migeru (migeru at eurotrib dot com) on Tue Mar 5th, 2013 at 03:43:10 AM EST
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To be fair to Stiglitz, you can only work with what you've got.

This is starting to look pretty sexy.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Tue Mar 5th, 2013 at 03:47:31 AM EST
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Les Echos reports that Joseph Stieglitz and Jean-Paul Fitoussi are among those to help to develop the economic agenda [...] Over several years, Beppo Grillo has maintained a dialogue with Paul Krugman whose video message is posted on the party's blog.

Now could we stop any claims that they are just trying to milk their mainstream position for all it's worth by telling the rich and powerful what they want to hear?

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Tue Mar 5th, 2013 at 05:20:08 AM EST
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Yes, is Stiglitz now a moron and a running dog of orthodox economies or the Moses leading the Five Star movement into the promises land?

I want clear sound bites, now!

by IM on Tue Mar 5th, 2013 at 05:28:43 AM EST
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Stiglitz is likely the best they could have recruited. I would prefer Varoufakis, but perhaps he is seen as being too radioactive. Stiglitz and Krugman both oppose austerity yet are still seen as part of the 'mainstream', unlike Varoufakis and Keen. Being part of the 'mainstream' does have its advantages.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Mar 5th, 2013 at 01:03:16 PM EST
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telling the rich and powerful what they want to hear

Perhaps more a case of having an acute sense of WHAT NOT to tell them.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Mar 5th, 2013 at 01:05:38 PM EST
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At some point it becomes sophistry, or ideological purity trials.

They have sided with Grillo, that all the establishment is calling a clown. Both have criticised unqualified free trade, both have spoken against rising inequalities, both have spoken for regulation and higher taxes on the rich. The rich certainly don't consider them mainstream -nor do the freshwaters who claim that no-one thinks like them (apparently not even themselves).

Claiming that whoever does not say exactly what one wants to hear is engaging in careerism and pandering to the establishment is just sectarian behaviour and says more about the claimant than about the accused.

MMT is just one school of thought. It might be right about everything, everyone else might even be wrong (not the same thing -relativity does not make newtonian mechanics wrong for what happens on earth), but even that would be a far cry from concluding that everyone else is intellectually dishonest for career reasons. The burden of proof would be on the claimant, and so far much of the evidence, for those two, points the other way.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Tue Mar 5th, 2013 at 01:55:07 PM EST
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Sophistry, perhaps. Rhetoric certainly. We are not dealing with a subject that well lends itself to proofs or scientific analysis. Economics is more scientistic and politics is mostly rhetoric with a purpose which may or may not be clearly disclosed. Meanwhile economics has become the continuation of politics and war by other means.

My criticisms, especially of Krugman, do not go to his strong advocacy for stimulus, with which I agree. But that, like Obama, he fails, perhaps refuses, to attack some of the most pernicious right wing frames, especially those which constitute the basis of 'New Classical' economics. The result is that both he and Obama are left to fight on a field prepared by their opponents.

MMT is less 'right' or 'wrong' than just an attempt to describe the monetary system as it actually operates. That can only be seen as political if so doing disrupts existing bulwarks of economic incumbents, which, in my view it does. With respect to banking Krugman seems to prefer models and 'stories' that have been known to be false for decades. Varoufakis's A Most Peculiar Failure sheds some light on the process that seems to predominate in academic economics. And I agree with Bill Mitchell that, in economics, motive is the primary factor.

Another line of analysis that has come out of the MMT camp is three sector national accounting. But perhaps that is also something that just might be true, along with double entry bookkeeping. Has Krugman engaged with the implications of three sector national accounting? I don't know. I would certainly be pleased were he to do so in a positive way. Likewise with stock and flow analysis, a la Wynne Godley. These are not approaches that are very hard to understand, even for non-economists, and they offer powerful new ways to look at the economy. If most economists spurn them the question is why. To this old cynic it seems that taking up these new tools would be tantamount to declaring that the emperor has no clothes. The Emperor wouldn't like that rude observation.

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

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Mar 5th, 2013 at 03:16:02 PM EST
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Latvia, meanwhile, has applied to become the 18th member state of the eurozone.

"One of these things is not like the others
One of these things just doesn't belong"

(Talking about that sentence, not Latvia. Clearly Latvia's illustrious leaders belong with the VIP of Europe.)

by Number 6 on Tue Mar 5th, 2013 at 06:44:09 AM EST
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