Rick Perry vs. Barack Obama

[mike777]

ruining your currency will not help the Greeks in the long run. It will not make them more productive.

 

It might help them for a few nights.

[Cthulhu D]

ruining your currency will not help the Greeks in the long run. It will not make them more productive.

 

It might help them for a few nights.

 

It's a massive advantage. If I can sell my olive oil for 10 US dollars and it costs 10 Euro to make, and I can swap 1 US dollar for 1 Euro, I don't make any money. If suddenly people will give me 10 Euros for 1 US dollars, instantly I am making a huge pile more money. Now I can slash the price of my olive oil and still make a decent profit.

 

Now consumers are much more likely to buy my olive oil than Croatian or whatever. I can increase my volumes, employ more people domestically etc.

 

This is overly simplified of course, but this is what you get. I have to pay way more for anything I import, but this makes my domestic economy stronger! It's now more economical for the locals to buy domestic rather than overseas. It's why the Chinese are screwing the US - they artificially prop up the US dollar which damages the US manufacturing industry.

[y66]

In the "]news...

 

BERLIN — Chancellor Angela Merkel’s party suffered a stinging defeat in elections in Germany’s most populous state on Sunday, one likely to embolden her political opponents both at home and abroad as the European debt crisis enters a critical new phase.

 

One week after Socialists seized the French presidency, the Social Democrats won the parliamentary election in North Rhine-Westphalia, early results and exit polls released Sunday showed. Norbert Röttgen, the lead candidate for Ms. Merkel’s Christian Democrats in the state, conceded defeat and announced that he would step down as the party head there.

 

Exit polls for German public television showed the Social Democrats winning 39.1 percent of the vote, an increase of 4.6 percentage points compared with the election two years earlier. While the results were not official, the party was likely to achieve a double-digit margin of victory. The Christian Democrats won just 26.3 percent of the vote, 8.3 percentage points less than in the previous election.

 

“This is a bitter day for us,” Mr. Röttgen told supporters. “We have suffered a clear and decisive defeat.”

 

In his concession speech, he took responsibility for the defeat, calling it “my loss” as a result of “my campaign, my themes,” but the ramifications went far beyond the borders of the state.

 

With the Green Party’s 11.4 percent of the vote, analysts say the state premier, Hannelore Kraft, of the Social Democrats, will be able to easily form a left-wing coalition to govern the state. For the past two years, Ms. Kraft had ruled with a minority government, forced to draw votes from the left or the right to pass each piece of legislation.

 

Mr. Röttgen ran against the debt-financed spending supported by Ms. Kraft, and even described the vote as a referendum on Ms. Merkel’s Europe policies.

 

Ms. Merkel and her party had hoped to sway the electorate with their hard line on Europe, painting Ms. Kraft almost as a domestic version of the spendthrifts the Germans complain about in Greece, Portugal and other economically struggling nations in Europe.

 

Instead, the voters handed Ms. Kraft, who pushed the state deeper into debt but hired more police officers and teachers and abolished fees for higher education, a significant victory. “We made people the central focus again,” Ms. Kraft told supporters on Sunday evening.

 

The German news media described the vote as a “debacle” and a “disaster” for the conservatives, one that also sends a clear signal that Ms. Merkel could face a difficult road to re-election. Peter Altmaier, the parliamentary leader of the Christian Democratic Union, called it “an extremely difficult day” for the party “as a whole,” a defeat that “surpasses our worst fears.”

 

With nearly 18 million inhabitants, North Rhine-Westphalia is home to more than one-fifth of the German population. A major loss here for the Social Democrats in 2005 helped pave the way for the defeat of Chancellor Gerhard Schröder, and Ms. Merkel’s own rise to that position.

 

"The Sunday vote will be an election of personalities," Wolfgang Muno, a professor of German politics at the University of Erfurt, told SPIEGEL ONLINE. "It is the Americanization of politics … and it could very well be indicative of a new model and a new political culture in the country."

 

Germany's political power structures are changing rapidly. Whereas the CDU and the center-left Social Democrats used to dominate elections both regional and national -- with the business-friendly Free Democrats (FDP) often serving as kingmaker -- the party landscape is now crowded, with the Greens and the Left Party vying for attention on the left. More importantly, the up-and-coming Pirate Party has recently injected a significant degree of unpredictability into regional elections, making two-party coalition governments increasingly difficult to assemble. Surveys suggest that North Rhine-Westphalia, Germany's most populous state, could provide yet the latest proof of that trend.

[phil_20686]

1336958853[/url]' post='638067']

ruining your currency will not help the Greeks in the long run. It will not make them more productive.

 

It might help them for a few nights.

 

I think this is dead wrong. A lot of productivity increases come from investment in capital formation. A weaker currency makes it more attractive for multinational firms to invest in your country. If I am Toyota and wand to take advantage oaf cheap labour, am still quoting to have to build my productivity enhancing factory.

This is just the flip side of off shoring. Over the last thirty years a huge amount of investment has gone to countries with cheap labour. A lot of it in productive heavy industry. There is no reason a the Greeks could not benefit from this just as much as Asian and African countries have.

Also, not what you meant, but productivity is basically cost. Moving to a cheaper country raises your productivity in the same way that cutting wages and firing people does - you are making the same stuff for less. Even apart from this, I think you are wrong.

[phil_20686]

1336850523[/url]' post='637886']

You don't lose if the losses are socialized but the profits are privatized.

 

True. Irrelevant, but true.

But then that isn't really true is it. I mean a lot of share holders and bond holders were wiped out. Ultimately letting a major bank go under just leads to confuse until a new bank steps in. Probably expanding by reappointing most of the people who bust lost their jobs.

I am also not sure what losses have been socialised. It looks likely to me that the fed will make a profit or small loss on the assets that they bought from the troubled banks. Even a large loss by a central bank is close to irrelevant, they can cover it at zero cost. All they have to do is hit their inflation target by printing money rather than playing with interest rates and in no time at all they have covered their loss.

Even if they don't want to do that, they still create five to ten bn dollars a month in hard currency just too keep up in demand. This is literally free money. For a central bank mot actually lose money and have to sell reserves, the loss needs to be comparable to the total size of the monetary base. That is basically impossible.

[jdeegan]

:P America has a currency union that is almost 200 years old. It has been based on a common language and freedom for labor to relocate within the union. The Euro is sort of coming apart. I gotta go back to Larry Lindsay who said that the real motive for the Euro was to evermore prevent Germany and France from going to war again. All of this is now old news. Let's let the DmarkEuro find it's proper place, and get on with it.

[Zelandakh]

I think the main reason Germany is doing so well is that the currency is artificially deflated because of the problems in other Eurozone countries. That, in combination with the fact that German businesses are traditionally resilient to depression, has given them a huge competitve boost with most other countries. If Germany had still been using DMs the currency would have been so high (the DM was the traditional "safe haven" for investors when America had economic difficulties) that exports would have been hit.

 

There is a very good reason why Frau Merkel is willing to spend vast amounts of German cash to support the Euro. Not only does it provide a huge amount to the German economy in the good times, it is also acting as a buffer for Germany to avoid the worst of the problems now things have turned down. It is quite sad that the people cannot see this, thinking only that she is giving "good" German money to "bad" Greeks (et al). I think the truth is that she is a damned shrewd political operator and doing an extremely good job in a tough climate.

[Cthulhu D]

:P America has a currency union that is almost 200 years old. It has been based on a common language and freedom for labor to relocate within the union. The Euro is sort of coming apart. I gotta go back to Larry Lindsay who said that the real motive for the Euro was to evermore prevent Germany and France from going to war again. All of this is now old news. Let's let the DmarkEuro find it's proper place, and get on with it.

 

Err, no. America has a fiscal union that is almost 200 years old. (well, IMHO it's actually about 156, but you know, whatever). The South is basically Spain/Italy/Greece etc and it's supported by transfer payments from the north.

[y66]

True. Irrelevant, but true.

But then that isn't really true is it. I mean a lot of share holders and bond holders were wiped out. Ultimately letting a major bank go under just leads to confuse until a new bank steps in. Probably expanding by reappointing most of the people who bust lost their jobs.

I am also not sure what losses have been socialised. It looks likely to me that the fed will make a profit or small loss on the assets that they bought from the troubled banks. Even a large loss by a central bank is close to irrelevant, they can cover it at zero cost. All they have to do is hit their inflation target by printing money rather than playing with interest rates and in no time at all they have covered their loss.

Even if they don't want to do that, they still create five to ten bn dollars a month in hard currency just too keep up in demand. This is literally free money. For a central bank mot actually lose money and have to sell reserves, the loss needs to be comparable to the total size of the monetary base. That is basically impossible.

 

Really true and really relevant. Socialized losses refers to banks making risky bets with government insured deposits. If non banks want to make risky bets with their own money, that's fine. That's called capitalism.

[mike777]

I think this is dead wrong. A lot of productivity increases come from investment in capital formation. A weaker currency makes it more attractive for multinational firms to invest in your country. If I am Toyota and wand to take advantage oaf cheap labour, am still quoting to have to build my productivity enhancing factory.

This is just the flip side of off shoring. Over the last thirty years a huge amount of investment has gone to countries with cheap labour. A lot of it in productive heavy industry. There is no reason a the Greeks could not benefit from this just as much as Asian and African countries have.

Also, not what you meant, but productivity is basically cost. Moving to a cheaper country raises your productivity in the same way that cutting wages and firing people does - you are making the same stuff for less. Even apart from this, I think you are wrong.

 

 

 

but again that is not the main problem for Greeks.

 

 

They have work rules that make free movement of labor too expensive still

They have property rules that make buying things like land almost impossible, one reason is lack of clear title.

 

If you still make it too hard to invest in Labor or hard assets you dont solve the real issues.

 

Also you dont want pull your profits out if you get paid in worthless greek dollars.

 

To use your Toyota example, if I cant buy land, or have expensive work rules that make building cars there just not worth the hassle, forget it I will build somewhere else. If I cant pull my money out in Euros or Yen, that again makes it less attractive.

 

 

In fact in the places you discuss, they made it easy to move capital, labor and assets. These are the real problems that the Greeks are still unwilling to fix. Starting a company takes 5 minutes in Hong Kong. In Greece it takes endless paperwork and bribes.

 

 

Bottom line destroying your currency may help for a few nights but does not solve any of the real issues here per my previous posts.

[phil_20686]

Really true and really relevant. Socialized losses refers to banks making risky bets with government insured deposits. If non banks want to make risky bets with their own money, that's fine. That's called capitalism.

 

I am honestly struggling to think of any time the government has ever paid out under FDIC. I can think of banks that went bankrupt and wiped out their equity. Even some cases where they went bankrupt enough to wipe out their bond holders, but never so bankrupt that they could not pay out to their clients upon liquidation.

 

If you mean the costs of part nationalization at a number of banks, eg, Northern Rock, or RBS, then its very unclear whether the UK government will actually lose any money. So far all the government loans have been repaid, and following the sale of the banking part of it to vigin media, the tay payer is a few hundred million out of pocket, but expects to recoup some of that (maybe even make a profit) from the asset company holding most of the mortgage books.

 

RBS and Northerrock have both paid back the loads the treasure gave them on schedule, and by far the biggest factor in determining whether they were overall a loss is what price they get from RBS equity when they sell it. If they hold on to it for long enough they look sure to profit from it.

 

Do you have an actual example of a socialised loss? Also, you do realise that the FDIC is funded by premiums paid by the banks themselves, it is not tax payer funded as such. I mean we have just seen the worst financial crisis for a century at least, and the FDIC had enough assets stored up from its premiums to cover the costs of receivership (i.e. paying off the bank's clients) of nearly 100 banks, at zero cost to the taxpayer.

[phil_20686]

but again that is not the main problem for Greeks.

 

 

They have work rules that make free movement of labor too expensive still

They have property rules that make buying things like land almost impossible, one reason is lack of clear title.

 

If you still make it too hard to invest in Labor or hard assets you dont solve the real issues.

 

Also you dont want pull your profits out if you get paid in worthless greek dollars.

 

To use your Toyota example, if I cant buy land, or have expensive work rules that make building cars there just not worth the hassle, forget it I will build somewhere else. If I cant pull my money out in Euros or Yen, that again makes it less attractive.

 

 

In fact in the places you discuss, they made it easy to move capital, labor and assets. These are the real problems that the Greeks are still unwilling to fix. Starting a company takes 5 minutes in Hong Kong. In Greece it takes endless paperwork and bribes.

 

 

Bottom line destroying your currency may help for a few nights but does not solve any of the real issues here per my previous posts.

 

I don't disagree with you that these are reasons why greece should be poorer. They are not reasons why greece's economy should be noncompetitive. If you live in a free floating exchange rate, all of these costs would be factored in to the exchange rate, but by definition, it would sink to the level where investment in greece is desirable, despite these problems. That is the magic of exchange rates.

[Foxx]

I gotta go back to Larry Lindsay who said that the real motive for the Euro was to evermore prevent Germany and France from going to war again.

 

When one side kicks the other side's ass consistently, it's not really war, is it?

[dwar0123]

When one side kicks the other side's ass consistently, it's not really war, is it?

Not sure I would consider what France did to Germany as ass kicking, but as France was on the winning side of both the latest wars, I am not sure what else you could mean.

[Cthulhu D]

Not sure I would consider what France did to Germany as ass kicking, but as France was on the winning side of both the latest wars, I am not sure what else you could mean.

 

It's a bit cleverer than that - it's that due to Germany's geographic situation, historically it (or its composite states) have partnered up with France OR Russia to the determent of the other (When it's tried 'none of the above' it tends to come unstuck). France and co would like to lock it in to one team.

[Zelandakh]

Not sure I would consider what France did to Germany as ass kicking, but as France was on the winning side of both the latest wars, I am not sure what else you could mean.

French military history.

[phil_20686]

Not sure I would consider what France did to Germany as ass kicking, but as France was on the winning side of both the latest wars, I am not sure what else you could mean.

 

Indeed, the cheese eating surrender monkeys managed to claim victory despite surrendering Paris without doing any actual fighting first. This is in keeping with such famous french 'victories' as the American Revolution, First promise support, then get some mainly English colonists to fight other mainly english colonists, and sail around for a bit cheering and proclaiming victory, without actually delivering any aid.

 

Similar story to the Jacobite rebellion. French promised support to the Scots, but `accidentally' sailed into Ireland rather than England and missed all the actual fighting.

[Cthulhu D]

Indeed, the cheese eating surrender monkeys managed to claim victory despite surrendering Paris without doing any actual fighting first. This is in keeping with such famous french 'victories' as the American Revolution, First promise support, then get some mainly English colonists to fight other mainly english colonists, and sail around for a bit cheering and proclaiming victory, without actually delivering any aid.

 

Similar story to the Jacobite rebellion. French promised support to the Scots, but `accidentally' sailed into Ireland rather than England and missed all the actual fighting.

 

Beats the standard American Model

 

A) Invade

B) Declare victory

C) Withdraw in haste after a loss of popular support.

 

See: Vietnam, Iraq, Haiti, Somalia (apparently the US won that too?). French model is the same except they skip all the bits where they might get shot first.

 

Actually this is funnier:

 

http://en.wikipedia.org/wiki/List_of_wars_involving_the_United_States

 

Guess who won the Iran-Iraq war? AMERICA ***** YEAH.. wait what?

[blackshoe]

Idiots are allowed to post on wikipedia. :lol:

[Cthulhu D]

Idiots are allowed to post on wikipedia. :lol:

 

I just thought it was beautiful.

[PassedOut]

Because, as a conservative businessman, fiscal responsibility is a major issue with me, I found these articles in Forbes and MarketWatch interesting (as well as the comments following the Forbes article): Who Is The Smallest Government Spender Since Eisenhower? Would You Believe It's Barack Obama?

 

Obama spending binge never happened

 

Almost everyone believes that Obama has presided over a massive increase in federal spending, an “inferno” of spending that threatens our jobs, our businesses and our children’s future. Even Democrats seem to think it’s true.

 

But it didn’t happen. Although there was a big stimulus bill under Obama, federal spending is rising at the slowest pace since Dwight Eisenhower brought the Korean War to an end in the 1950s.

 

Even hapless Herbert Hoover managed to increase spending more than Obama has.

While the fact that Obama has been conservative economically is not surprising to (most) posters here, I, for one, didn't realize how his well numbers actually compared.

[awm]

Because, as a conservative businessman, fiscal responsibility is a major issue with me, I found these articles in Forbes and MarketWatch interesting (as well as the comments following the Forbes article): Who Is The Smallest Government Spender Since Eisenhower? Would You Believe It's Barack Obama?

 

Obama spending binge never happened

 

 

While the fact that Obama has been conservative economically is not surprising to (most) posters here, I, for one, didn't realize how his well numbers actually compared.

 

To be fair, there was a massive uptick in spending in 2008-2009 because of the economic situation. Some of this was the result of temporary programs like TARP and the stimulus, and most of the rest was automatic increases to programs like food stamps, medicaid, and unemployment insurance. The 2008-2009 increase in spending wasn't Obama's fault -- but the impression was that this increase in spending was temporary and not the "new normal" amount of government spending. In Obama's budget years (2010 through 2013 projection) this high level of spending has stayed fairly constant. But most of us hoped it would go down as the economy recovered, and it really hasn't. The various articles are trying to give Obama credit for continuing to spend at the massive rate that Bush spent in 2008-2009, rather than raising it further to even more ridiculous levels.

 

Of course, it's also true that revenues are at a 50-year low, and that most of the spending is due to the bad economy and not new government programs Obama introduced. And Obama has proposed really significant combinations of spending cuts and revenue increases and the Republicans won't even meet him halfway.

[Winstonm]

To be fair, there was a massive uptick in spending in 2008-2009 because of the economic situation. Some of this was the result of temporary programs like TARP and the stimulus, and most of the rest was automatic increases to programs like food stamps, medicaid, and unemployment insurance. The 2008-2009 increase in spending wasn't Obama's fault -- but the impression was that this increase in spending was temporary and not the "new normal" amount of government spending. In Obama's budget years (2010 through 2013 projection) this high level of spending has stayed fairly constant. But most of us hoped it would go down as the economy recovered, and it really hasn't. The various articles are trying to give Obama credit for continuing to spend at the massive rate that Bush spent in 2008-2009, rather than raising it further to even more ridiculous levels.

 

Of course, it's also true that revenues are at a 50-year low, and that most of the spending is due to the bad economy and not new government programs Obama introduced. And Obama has proposed really significant combinations of spending cuts and revenue increases and the Republicans won't even meet him halfway.

 

It takes a year for a first-term president to establish a budget, so the first year of a new president is actually using the budget of the previous president, so 2008-09 was the Bush budget.

[kenberg]

I have been wondering a little. We are hearing about a re-run of last year's game of chicken with the debt ceiling. Now that some of the dust has settled, what can we say?

 

Are we still downgraded by S&P?

Does anyone care? Otherwise put, did it matter?

Did any of the automatic budget cuts that would supposedly enforce discipline actually happen?

Did the special select committee accomplish anything?

Has anything changed?

 

I realize I don't know the answer to any of these. My guess is that except for a bunch of idiots getting a lot of air time, not much happened.

[phil_20686]

1338054272[/url]' post='641486']

I have been wondering a little. We are hearing about a re-run of last year's game of chicken with the debt ceiling. Now that some of the dust has settled, what can we say?

 

Are we still downgraded by S&P?

Does anyone care? Otherwise put, did it matter?

Did any of the automatic budget cuts that would supposedly enforce discipline actually happen?

Did the special select committee accomplish anything?

Has anything changed?

 

I realize I don't know the answer to any of these. My guess is that except for a bunch of idiots getting a lot of air time, not much happened.

 

1) yes

2)The rating agencies normally follow the bond markets. It's a little bizarre that a sovereign was downgraded, since it can always monetize it's debt. It's virtually impossible for a country to default on debt issued in its own currency. It matters in so far as the the ratings agencies hold a specialised role. When a financial company rates the risk of their holdings they are required to use the official ratings agency. At least in the uk. But that will not mattered for a security as well studied as the us bonds, but it would matter for less well studied bonds.

3) don't know4) no5) no