The future of the Euro

[Vampyr]

Europe is not different from the USA.

 

I assume that this is facetious, and of course this is one of the problems. In the examples you give about American States, people really do identify themselves as American rather than residents of a particular state. Most have, in fact, lived in more than one state during their lives. And if jobs are scarce where they live, they can move to another state with better prospects. Of course retirement age and the like is standardised across the country.

 

These are only a few of the reasons that Europe is different from the USA. The Germans seem to have believed that huge transfers of sovereignty would do the trick of making people feel more attached to Europe than to their increasingly impotent countries. Instead this loss of sovereignty has engendered only resentment. And economic union lacks freedom of movement of labour, since most people are not going to uproot their families to move someplace where they don't know a word of the language, not to mention other differences like a different culture, important national holidays not being celebrated, inability to get their favourite foods, different school systems etc. Moving abroad is still moving abroad, EU or no EU.

 

In backgammon there is a concept known as "pay now or pay later". Greece should really "pay now" and get rid of the Euro. This at least will allow them to revitalise their economy.

[blackshoe]

Even in the UK, the government has mismanaged the economy…

The problem, it seems to me, is that governments should not be in the business of "managing the economy" in the first place. :ph34r:

[Vampyr]

The problem, it seems to me, is that governments should not be in the business of "managing the economy" in the first place. :ph34r:

 

Well, why have you not yet taken up arms and formed a "well-regulated militia" yet?

[hotShot]

The problem, it seems to me, is that governments should not be in the business of "managing the economy" in the first place. :ph34r:

 

Depends on what you mean by "managing the economy", the government enforces some rules for business esp. regarding product safty or laws.

 

The problem is that the intended impact of rules is sometimes missed by the reality.

[blackshoe]

Well, why have you not yet taken up arms and formed a "well-regulated militia" yet?

Too tired.

[y66]

Too many failed austerity regimes, not enough guns.

[mikeh]

The problem, it seems to me, is that governments should not be in the business of "managing the economy" in the first place. :ph34r:

Yes, look what happened under Bush, when the US government decided to allow Wall Street to run with much looser rules. Can you imagine how much MORE fun 2008-2012 would have been had the rules been eliminated completely, and the government had been forbidden to intervene? Wow.....utter economic ruin except for the brave, intelligent men (and they are always men in your favourite novels, aren't they?) who saw their way to riches, and didn't give a damn about how the masses suffered. If people aren't rich enough, smart enough, and sociopathic enough to triumph, then they don't count, do they?

 

Nice philosophy* you have there, Blackshoe :D

 

* cue the attempt to claim that his philosophy is being mis-represented, lol.

[helene_t]

Yes, look what happened under Bush, when the US government decided to allow Wall Street to run with much looser rules.

I thought it was Clinton?

[Al_U_Card]

Sommers, Rubin and the Greenspan Randian acolytes. Dismantling Glass-Steagle were their marching orders from Goldman Sachs...Paulsen was the GS henchman that oversaw the biggest heist in the history of bankstering.

[mikeh]

I thought it was Clinton?

Clinton started the process, as far as I know, but the process gained momentum under Bush, especially in terms of the ratios by which the financial firms could leverage their assets....my understanding is that the SEC greatly loosened the rules/enforcement and that this was likely politically influenced. In any event, the point I was trying to make wasn't where to place the blame but to reflect on the real-world result of having government attempt to allow the market to govern itself to a greater degree than had been seen, after the Depression, as being a good idea.

 

Interestingly, the Canadian banking system arguably survived the 2008 meltdown as well as or better than the banking systems of any other industrialized country, precisely because our federal parliament years ago enacted legislation that, in combination with regulatory rules, greatly limited the ability of banks to leverage assets or weaken lending rules. The Canadian experience was so well-perceived that the Bank of England hired away the head of the Bank of Canada, who was treated in Canada as almost a rock star.

 

So the real world experiments of the last few years, altho admittedly the Canadian economy is dwarfed by that of the US, suggests pretty strongly that government not only can but should have the power to manage. Obviously it is possible to mismanage, but the evidence seems to suggest that governments, if not overly ideologically driven, won't do as much harm as will naked, unrestrained greed, which tends to dominate in the absence of such governmental management (assuming a functioning, largely free-of-corruption society).

[blackshoe]

Yes, look what happened under Bush, when the US government decided to allow Wall Street to run with much looser rules. Can you imagine how much MORE fun 2008-2012 would have been had the rules been eliminated completely, and the government had been forbidden to intervene? Wow.....utter economic ruin except for the brave, intelligent men (and they are always men in your favourite novels, aren't they?) who saw their way to riches, and didn't give a damn about how the masses suffered. If people aren't rich enough, smart enough, and sociopathic enough to triumph, then they don't count, do they?

 

Nice philosophy* you have there, Blackshoe :D

 

* cue the attempt to claim that his philosophy is being mis-represented, lol.

Straw man.

[mikeh]

Straw man.

You like to use that word, but it seems to me that you don't understand that describing an argument as being a 'strawman' argument doesn't make it so...you need to have an argument, not merely a (misused and maybe misunderstood) word that you think makes you sound intelligent :P

[Vampyr]

You like to use that word, but it seems to me that you don't understand that describing an argument as being a 'strawman' argument doesn't make it so...you need to have an argument, not merely a (misused and maybe misunderstood) word that you think makes you sound intelligent :P

LOL!

[blackshoe]

You like to use that word, but it seems to me that you don't understand that describing an argument as being a 'strawman' argument doesn't make it so...you need to have an argument, not merely a (misused and maybe misunderstood) word that you think makes you sound intelligent :P

LOL!

I hope you two are having fun.

[mike777]

Clinton started the process, as far as I know, but the process gained momentum under Bush, especially in terms of the ratios by which the financial firms could leverage their assets....my understanding is that the SEC greatly loosened the rules/enforcement and that this was likely politically influenced. In any event, the point I was trying to make wasn't where to place the blame but to reflect on the real-world result of having government attempt to allow the market to govern itself to a greater degree than had been seen, after the Depression, as being a good idea.

 

Interestingly, the Canadian banking system arguably survived the 2008 meltdown as well as or better than the banking systems of any other industrialized country, precisely because our federal parliament years ago enacted legislation that, in combination with regulatory rules, greatly limited the ability of banks to leverage assets or weaken lending rules. The Canadian experience was so well-perceived that the Bank of England hired away the head of the Bank of Canada, who was treated in Canada as almost a rock star.

 

So the real world experiments of the last few years, altho admittedly the Canadian economy is dwarfed by that of the US, suggests pretty strongly that government not only can but should have the power to manage. Obviously it is possible to mismanage, but the evidence seems to suggest that governments, if not overly ideologically driven, won't do as much harm as will naked, unrestrained greed, which tends to dominate in the absence of such governmental management (assuming a functioning, largely free-of-corruption society).

 

INTERESTING.

 

It would nice to know what leverage rules and lending rules Canada imposes compared to the USA and why Canadian rules worked better.

Also what other rules Canada imposes to restrain greed. I hope no poster is calling for zero govt rules and wants "naked, unrestrained greed".

 

"Milton Friedman - Greed

In his book "Capitalism and Freedom" (1962) Milton Friedman (1912-2006) advocated minimizing the role of government in a free market as a means of creating political"

Here is a short video.

 

https://search.yahoo.com/search;_ylt=AjpJKMtKe4Upr3RNxRTe2NCbvZx4?fr=yfp-t-765-s&toggle=1&fp=1&cop=mss&ei=UTF-8&p=youtube%20milton%20friedman%20on%20greed

 

It should be noted there is a large amount of corruption in the USA so we do not seem to meet this one test.

[nige1]

IMO, a strawman argument misrepresents an opponent's position in an attempt to refute it. I'm afraid I do that, sometimes (by mistake). A few seem to do it, more often.

[kenberg]

The Greek leadership has made it completely clear that they will not be working cooperatively in implementing this plan. They will sign what they have to sign to get the money they need, and that's it. I would call this a bad situation.

[mike777]

The Greek leadership has made it completely clear that they will not be working cooperatively in implementing this plan. They will sign what they have to sign to get the money they need, and that's it. I would call this a bad situation.

 

 

Hubris, for Italy, France, Spain, Portugal and many others to assume they can force/demand great economic change on others when they are unable to change themselves.

 

The Greeks will indeed act/live their future the way they choose.

[Trinidad]

The Greek leadership has made it completely clear that they will not be working cooperatively in implementing this plan. They will sign what they have to sign to get the money they need, and that's it. I would call this a bad situation.

There is a significant difference between the previous packages and this one: In the previous packages they would get the money because they promised to start reforms. In this package they will need to show reforms first and they get money for reforms that are implemented. No implementation means no money.

 

Rik

[mike777]

There is a significant difference between the previous packages and this one: In the previous packages they would get the money because they promised to start reforms. In this package they will need to show reforms first and they get money for reforms that are implemented. No implementation means no money.

 

Rik

 

no

 

In fact they need and I bet get 7 billion Euros or much more by Monday.

 

Greece will always always get money...the problem is they need 995 billion not 95 billion for starters

 

YOu guys need to give Greeks more, much more.

 

See Sugar Daddy

 

 

1) before greek vote 50-60 billion

2) after greek vote 95 billion

3) how many more votes do you need?

[kenberg]

There is a significant difference between the previous packages and this one: In the previous packages they would get the money because they promised to start reforms. In this package they will need to show reforms first and they get money for reforms that are implemented. No implementation means no money.

 

Rik

 

Right. And I continue to hope for the best. I guess I was hoping for something like 'These terms are harsh, we were hoping for better. But we really need to make this work, our future depends on it, so we need to all get behind the only plan that is on the table". I am not so sure that they are there yet.

[y66]

Masterful Mario Joins Calls For Greek Debt Relief

 

Most of the questions at today’s press conference focused on Greece. Draghi threw his considerable muscle behind calls for Greece to receive debt relief, echoing the IMF, the US Treasury, and Athens, of course.

 

But the beautiful thing about Draghi’s intervention, is that he made it sound like the most natural, obvious thing in the world:

 

“It’s uncontroversial that debt relief is necessary and I think that nobody has ever disputed that. The issue is what is the best form of debt relief within our framework, within our legal institutional framework.

 

I think we should focus on this point in the coming weeks.”

 

Not, I suspect, what Angela Merkel wanted to hear a day before she asks a restless Bundestag to vote on the package.

 

Draghi also calmly declared that he expects Greece to repay the ECB on Monday, suggesting that it will get a bridge loan (perhaps even today).

 

Criticism of the ECB’s actions were swept to the boundary, with Draghi insistent that the governing council has simply followed its mandate. The drip-drip-drip of criticism that he’s been “asphyxiating” the Greek banking sector may have hit home.

 

Criticism has been “quite unwarranted”, he declared, explaining that the ECB had steered a sensible course between fuelling a bank run and crashing the whole system.

 

Draghi dealt just as firmly with suggestions that he could be more skeptical of Alexis Tsipras’s government, and its ability to do its job. That is hardly the role of an independent central bank chief (indeed, Berlin has already got this role covered).

 

There was mixed news for Greeks who can’t access their banks. Capital controls are going to be around for a while, until the threat of a bank run has receded.

 

But on a happier note, Draghi hinted that Greece could soon share in the ECB’s QE programme, if it sticks with its latest bailout programme.

 

In the meantime, we’ll: “continue to act on the assumption that Greece is and will ... remain a member of the euro area.”

 

And that won’t be shaken by any talk of ‘temporary Grexit’ from the likes of Wolfgang Schäuble.

 

In short, it was a picture of a central banker dutifully following his mandate, and quietly steering the eurozone through a mess that is not of his making.

[y66]

The Guardian's live coverage of recent and current events is impressive.

[kenberg]

Maybe I am just feeling good this morning but I wish to thank contributors to this thread for helping me better understand the dimensions of all of this.

 

I thought the referendum to be a mistake. Holding it was a mistake, regardless of the outcome. On this I think I was right. The referendum seemed so bad that I speculated that Tsipras really wanted to get Greece out of the Eurozone but he thought that the only politically feasible way to do it was to have the EU kick Greece out. On this I was wrong. Apparently he really wants to keep Greece in but he is simply out of touch with reality. He thought that the referendum would strengthen his hand. His political future does not look bright to me.

 

Comparisons with the reparations imposed on Germany by the Versailles Treaty had of course occurred to me and to practically everyone, I suppose. Same with the Marshall Plan. I was unaware of this debt restructuring in the London agreement of 1953. I think all of these matters are useful if looked at carefully.

 

Will part of the Greece debt need to be written off? My guess is yes, but no one thinks I am an expert. Does Greece need to make some fundamental changes in policy? Again my guess is yes, with the same caveat about my lack of expertise. These negotiations are tough. It is natural for intelligent well-intentioned forces to disagree, and it would be naive to think that self-interest never will play a role. So good luck to them all.

 

But I repeat. This thread has been very helpful to my understanding.

[Zelandakh]

Comparisons with the reparations imposed on Germany by the Versailles Treaty had of course occurred to me and to practically everyone, I suppose.

How about comparisons with the reparations that Greece had agreement to obtain after WWII but that America successfully wrote off (along with 50% of the German debt across the board) by a clever use of language? Greek reparations were tied to a peace treaty with Germany but the USA chose to call the agreement something other than a peace treaty.

 

The funny thing is this. The current Greek government, the one everyone in Northern Europe seems to hate so much, has done more to reform the economy and lessen corruption than any Greek government since the war. The only sensible course is for the debt to be restructured, probably somewhere between 30 and 50 cents in the Euro. And if the creditors (Germany) refuse, I doubt the repercussions of defaulting, as bad as they will be, will be worse for Greece than the current situation. They need to do it now though, before Germany gets to buy up all of the assets they are forcing to be privatised.