Blog Archives

Austerity: The History Of A Dangerous Idea


d0ddbc8e68becda49551b1552a310ea3

Canada has now been governed for some time by conservatives who allegedly care about deficits and debt, yet when the implosion of American banks dragged Canada into a recession, our government started spending far more, not less. Years later, we continue to spend into the red and our debt lurches ever higher. By contrast, even since the ascent of the Conservative Party in London, the U.K. has been biting a fiscal bullet. They have chosen to trim government spending in the hope of jump-starting future economic growth—in a word, austerity. According to Mark Blyth, this is a bad idea: “Austerity doesn’t work. Period.” Believing it only persists due to “epistemic arrogance and ideological insistence,” he sets out to trace the intellectual history of austerity, going back to its roots, from Adam Smith, David Hume and John Locke to more recent proponents like Joseph Schumpeter, Friedrich Hayek and current German leader Angela Merkel. Then Blyth gives us a decidedly discouraging historical tour of austerity in action, which among other things makes us feel sorry for Great Britain’s prospects.

Blyth, a professor at Brown University, is an unusually gifted communicator of complex economic ideas. But though he pens such colloquial sentences—“Iceland, in many ways, was Ireland on crack”—this book is most suitable for readers with at least an intermediate familiarity with macroeconomics. Blyth does not pause long to explain the importance of bond yields. Yet his book provides a rich background for understanding the policy options facing those who would solve the ongoing Euro-crisis. Blyth also revisits the momentous American decision to bail out its banks, which continues to prompt Republican murmurings about the necessity for belt-tightening. Insofar as the United States and Europe have a debt crisis, it is partly the result of a banking crisis. Bank bailouts created much of the debt that we hear so much hyperventilating about. As for puny Iceland, it chose to let its toxic banks go bust, and its economy is now doing rather well.

Blyth is too rigorous to be an ideologue. He thinks austerity measures have their place, but only under the right conditions. Now, apparently, is not such a time.

via Austerity: The History Of A Dangerous Idea – Bookmarked, Books – Macleans.ca.

Advertisements

Is the Euro a Weapon of Mass destruction?


Is the Euro a Weapon of Mass destruction

There has been a very conscious use of the Euro to drive these right wing politics through, behind the backs of voters, who have constantly been lied to about the real intent of their European project.

How much longer are people of Ireland going to be fooled ?

Read on

Robert Mundell, evil genius of the euro – Greg Pallast

The idea that the euro has “failed” is dangerously naive. The euro is doing exactly what its progenitor – and the wealthy 1%-ers who adopted it – predicted and planned for it to do.

That progenitor is former University of Chicago economist Robert Mundell. The architect of “supply-side economics” is now a professor at Columbia University, but I knew him through his connection to my Chicago professor, Milton Friedman, back before Mundell’s research on currencies and exchange rates had produced the blueprint for European monetary union and a common European currency.

Mundell, then, was more concerned with his bathroom arrangements. Professor Mundell, who has both a Nobel Prize and an ancient villa in Tuscany, told me, incensed:

“They won’t even let me have a toilet. They’ve got rules that tell me I can’t have a toilet in this room! Can you imagine?”

As it happens, I can’t. But I don’t have an Italian villa, so I can’t imagine the frustrations of bylaws governing commode placement.

But Mundell, a can-do Canadian-American, intended to do something about it: come up with a weapon that would blow away government rules and labor regulations. (He really hated the union plumbers who charged a bundle to move his throne.)

“It’s very hard to fire workers in Europe,” he complained. His answer: the euro.

The euro would really do its work when crises hit, Mundell explained. Removing a government’s control over currency would prevent nasty little elected officials from using Keynesian monetary and fiscal juice to pull a nation out of recession.

“It puts monetary policy out of the reach of politicians,” he said. “[And] without fiscal policy, the only way nations can keep jobs is by the competitive reduction of rules on business.”

He cited labor laws, environmental regulations and, of course, taxes. All would be flushed away by the euro. Democracy would not be allowed to interfere with the marketplace – or the plumbing.

As another Nobelist, Paul Krugman, notes, the creation of the eurozone violated the basic economic rule known as “optimum currency area”. This was a rule devised by Bob Mundell.

That doesn’t bother Mundell. For him, the euro wasn’t about turning Europe into a powerful, unified economic unit. It was about Reagan and Thatcher.

Ronald Reagan would not have been elected president without Mundell’s influence,” once wrote Jude Wanniski in the Wall Street Journal. The supply-side economics pioneered by Mundell became the theoretical template for Reaganomics – or as George Bush the Elder called it, “voodoo economics”: the magical belief in free-market nostrums that also inspired the policies of Mrs Thatcher.

Mundell explained to me that, in fact, the euro is of a piece with Reaganomics:

“Monetary discipline forces fiscal discipline on the politicians as well.”

And when crises arise, economically disarmed nations have little to do but wipe away government regulations wholesale, privatize state industries en masse, slash taxes and send the European welfare state down the drain.

Thus, we see that (unelected) Prime Minister Mario Monti is demanding labor law “reform” in Italy to make it easier for employers like Mundell to fire those Tuscan plumbers. Mario Draghi, the (unelected) head of the European Central Bank, is calling for “structural reforms” – a euphemism for worker-crushing schemes. They cite the nebulous theory that this “internal devaluation” of each nation will make them all more competitive.

Monti and Draghi cannot credibly explain how, if every country in the Continent cheapens its workforce, any can gain a competitive advantage.

But they don’t have to explain their policies; they just have to let the markets go to work on each nation’s bonds. Hence, currency union is class war by other means.

The crisis in Europe and the flames of Greece have produced the warming glow of what the supply-siders’ philosopher-king Joseph Schumpeter called “creative destruction”. Schumpeter acolyte and free-market apologist Thomas Friedman flew to Athens to visit the “impromptu shrine” of the burnt-out bank where three people died after it was fire-bombed by anarchist protesters, and used the occasion to deliver a homily on globalization and Greek “irresponsibility”.

The flames, the mass unemployment, the fire-sale of national assets, would bring about what Friedman called a “regeneration” of Greece and, ultimately, the entire eurozone. So that Mundell and those others with villas can put their toilets wherever they damn well want to.

Far from failing, the euro, which was Mundell’s baby, has succeeded probably beyond its progenitor’s wildest dreams.

via Robert Mundell, evil genius of the euro | Greg Palast | Comment is free | guardian.co.uk.

via Robert Mundell, evil genius of the euro | Greg Palast | Comment is free | guardian.co.uk.

HEALTHY LIFESTYLE

I CAN'T CONTROL EVERYTHING IN MY LIFE, BUT I CAN CONTROL WHAT I PUT IN MY BODY.😎🍓🍍🍇🍑🍐🍉🍈🍏🍊🍋🍅🍎🍌🍠🍢🍥

Saranya

Normal thoughts but unique view

David, earth planet , knopfler and a humble man

Amante libros, música y viajes A bookworm and lover of tunes and wayfarer

Web Dietitian

Debunking myths and uncovering the truth on food and nutrition by a Registered Dietitian

inpuntadipiedinaturalmente

dai rimedi naturali fatti in casa alla riflessologia

thepracticalhistorian

Your guide to practically true history.

MadhviMuses

Read Books, Chase Butterflies, Eat Breakfasts,Love Life!

La Rioja and the world seen from my guardaviñas

Sharing ideas. Photos, travels, music, History, stories,...

The Visualizer

Reinforcing creativity with tech

Manić Teodora

Jer ono u šta ljudi poveruju, to će vremenom i postati.❤ Because in what people belive, that's who they will become as the time passes by. ❤

Ultimatetravel

I haven’t been everywhere, but it’s on my list.

Yes, I Know

The movies wouldn't lie to me... would they?

El Zocco

Un espacio de información sobre ocio, moda, sexo, música y viajes.

Create Awesome

Life Awesome On YouTube

doar, o viaţă

eu trăiesc, când să fiu supărat

ChronosFeR

Música, Literatura, Fotografia, Cinema,Cultura.

MaBeautility

Passie voor beauty, bloggen, lifestyle, dans en make-up

That middle class girl

The winner of hearts!

FLOW ART STATION

The New contemporary Art Magazine

21st Century Films

Film Analysis, Essays, and Short Stories

Writetable Words

write to tell stories.

swo8

Music means something

Discobar Bizar

Welkom op de blog van Discobar Bizar. Druk gerust wat op de andere knoppen ook, of lees het aangrijpende verhaal van Hurricane Willem nu je hier bent. Welcome to the blog of Discobar Bizar, feel free to push some of the other buttons, or to read the gripping story of Hurricane Willem whilst you are here!

Playing by My Own Rules

Cancer Messed with the Wrong Hellion

manologo

pienso y recuerdo...luego, existo

When The Whippoorwills Sing

Queer Supernatural Romance and Horror Erotica

Noellie's Place

Life is brutal at times but always offers beauty and love to soften the blows if you open your hearts eye

After Credits Corner

There's a million films I haven't seen. Just you wait...

Reel Time Flicks

Film reviews and news, everyone's a critic! Welcome to the drinking blog with a film problem.

baz allen

Archive

Silents, Please!

interesting avenues in silent film history

Superduque

Mi patria es todo el mundo.

WRITE THEM ALL.

THOUGHTS. FEELINGS. MEMORIES.

Budget Traveler

Travel Guide, Blog & Reviews

The Conglomerate Lode

Mining thoughts, opinions, and experiences that enter the eyes the front door to the grey matter

La Audacia de Aquiles

"El Mundo Visible es Sólo un Pretexto" / "The Visible World is Just a Pretext".-

CINESPIRIA

Shining a light on the deep recesses of film history

Dr. Grob's Animation Review

The animation film review site

Genç Yazarlar Kulübü

Edebiyat burda, kahve tadında.

ALFRED EAKER

The Official Site Of Author and Artist

Master Mix Movies

One Movie at a Time

%d bloggers like this: