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I've always wanted to have one of these online journals...   

Posted by gandalfbmg - Aug 1, 2003 - 8:29am
2 comments on this journal entry.

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Location: Bethany

Posted: Oct 12, 2013 - 9:04pm

Chris Kluwe: Here’s what’s wrong with Ayn Rand, libertarians

So I forced myself to read “Atlas Shrugged.” Apparently I harbor masochistic tendencies; it was a long, hard slog, and by the end I felt as if Ayn Rand had violently beaten me about the head and shoulders with words. I feel I would be doing all of you a disservice (especially those who think Rand is really super-duper awesome) if I didn’t share some thoughts on this weighty tome.

Who is John Galt?

John Galt (as written in said novel) is a deeply flawed, sociopathic ideal of the perfect human. John Galt does not recognize the societal structure surrounding him that allows him to exist. John Galt, to be frank, is a turd...

Detroit, the New Greece
Published: July 21, 2013

When Detroit declared bankruptcy, or at least tried to — the legal situation has gotten complicated — I know that I wasn’t the only economist to have a sinking feeling about the likely impact on our policy discourse. Was it going to be Greece all over again?...

The important thing is not to let the discussion get hijacked, Greek-style. There are influential people out there who would like you to believe that Detroit’s demise is fundamentally a tale of fiscal irresponsibility and/or greedy public employees. It isn’t. For the most part, it’s just one of those things that happens now and then in an ever-changing economy.


Greece and You
NYT house editorial
June 21, 2011

The euro-zone bailout of Greece is, in good part, a bailout of European banks. In France and Germany alone, banks hold some $90 billion worth of public and private Greek debt. The European Central Bank also holds Greek government debt, and the fear is that if Greece defaults, cascading losses could threaten all of Europe.

Are American banks also vulnerable? No one is sure. They are not big lenders to Greece, but they are big players in the derivatives markets. If Greece defaulted, a European bank holding a credit-default swap on Greek debt from an American bank would be entitled to a payout from that bank...

Greece and the Euro: Fifty Ways to Leave Your Lover
by Ellen Brown
June 6, 2012

For the Greeks, the euro love affair is over, but breaking up is hard to do. Defaulting on their debts will force them out of the euro zone and back to issuing drachmas, which could get brutally devalued by speculators as soon as they are traded on foreign exchange markets.

Fortunately, there are alternatives to an ugly divorce. The treaties binding the 17 member nations are just a set of rules, entered into by mutual agreement, and rules can be bent, broken or stretched, especially in crises. The European Central Bank (ECB) has already broken a litany of rules to save the banks, and so has the Federal Reserve, which found multiple ways to do what it initially said it couldn't do to save Wall Street in 2008. Rules that can be bent for banks can be bent for the people — not just the Greeks, but the Irish, Italians, Spaniards, Portuguese and others lined up behind them.

Here are some creative alternatives that have been proposed...


Greeks flock to German language classes: institute 

People in crisis-hit southern European countries like Greece, Spain and Italy are scrambling to learn German to boost their chances of a job in Europe's top economy, an institute said Friday.

The Goethe Institute, which organises German language classes around the world, said demand had shot up by 50 percent in Greece in the first quarter of this year compared to the same period in 2011...

Eighty-four percent more Greeks moved to Germany in the first half of 2011 than in the same period in 2010 and 49 percent more Spaniards, the figures showed.

With such low unemployment, Germany is actively seeking to recruit skilled labour from beyond its borders.

Earlier in the week, the government launched two websites aimed at attracting workers, one of which (www.make-it-in-germany.com) was designed specifically for foreigners.

Worry for Italy Quickly Replaces Relief for Spain
NYT Published: June 11, 2012

VENICE — Concerns grew on Monday that Italy could be the next victim of Europe’s financial infection, leading nervous investors to sell Italian stocks and bonds and damping euphoria over a weekend deal to bail out Spain’s banks.

Italian officials privately expressed concern that the 100 billion euros, or $125 billion, that Europe pledged to Spanish banks might not stop the troubles from spreading.

Why Berlin Is Balking on a Bailout

The New York Times
June 13, 2012

It is unfair for critics to ask Germany to bear even more risk. Should Greece, Ireland, Italy, Portugal and Spain go bankrupt and repay nothing, while the euro survives, Germany would lose $899 billion. Should the euro fail, Germany would lose over $1.35 trillion, more than 40 percent of its G.D.P. Has the United States ever incurred a similar risk for helping other countries?

Some critics have argued that Germany, having benefited from the Marshall Plan, now owes it to Europe to undertake a similar rescue. Those critics should look at the numbers.

Greece has received or been promised $575 billion through assistance efforts, including Target credit, E.C.B. bond purchases and a haircut after a debt moratorium. Compare this with the Marshall Plan, for which Germany is very grateful. It received 0.5 percent of its G.D.P. for four years, or 2 percent in total. Applied to the Greek G.D.P., this would be about $5 billion today.

In other words, Greece has received a staggering 115 Marshall plans, 29 from Germany alone, and yet the situation has not improved. Why, Mr. Obama, is that not enough?

The Pain in Spain Falls Mainly on the Plain (Folk)

by Amy Goodman
July 11, 2012 

As Spain’s prime minister announced deep austerity cuts Wednesday in order to secure funds from the European Union to bail out Spain’s failing banks, the people of Spain have taken to the streets once again for what they call “Real Democracy Now.” This comes a week after the government announced it was launching a criminal investigation into the former CEO of Spain’s fourth-largest bank, Bankia. Rodrigo Rato is no small fish: Before running Bankia he was head of the International Monetary Fund. What the U.S. media don’t tell you is that this official government investigation was initiated by grass-roots action.

The Occupy movement in Spain is called M-15, for the day it began, May 15, 2011. I met with one of the key organizers in Madrid last week on the day the Rato investigation was announced. He smiled, and said, “Something is starting to happen.” The organizer, Stephane Grueso, is an activist filmmaker who is making a documentary about the May 15 movement. He is a talented professional, but, like 25 percent of the Spanish population, he is unemployed: “We didn’t like what we were seeing, where we were going. We felt we were losing our democracy, we were losing our country, we were losing our way of life. ... We had one slogan: ‘Democracia real YA!’—we want a ‘real democracy, now!’ Fifty people stayed overnight in Puerta del Sol, this public square. And then the police tried to take us out, and so we came back. And then this thing began to multiply in other cities in Spain. In three, four days’ time, we were like tens of thousands of people in dozens of cities in Spain, camped in the middle of the city—a little bit like we saw in Tahrir in Egypt.”

The occupation of Puerta del Sol and other plazas around Spain continued, but, as with Occupy Wall Street encampments around the U.S., they were eventually broken up. The organizing continued, though, with issue-oriented working groups and neighborhood assemblies. One M-15 working group decided to sue Rodrigo Rato, and recruited pro bono lawyers and identified more than 50 plaintiffs, people who felt they’d been personally defrauded by Bankia. While the lawyers were volunteers, a massive lawsuit costs money, so this movement, driven by social media, turned to “crowd funding,” to the masses of supporters in their movement for small donations. In less than a day, they raised more than $25,000. The lawsuit was filed in June of this year...

Another Bank Bailout
by Paul Krugman
The New York Times
June 11, 2012

Oh, wow — another bank bailout, this time in Spain. Who could have predicted that?

The answer, of course, is everybody. In fact, the whole story is starting to feel like a comedy routine: yet again the economy slides, unemployment soars, banks get into trouble, governments rush to the rescue — but somehow it’s only the banks that get rescued, not the unemployed.

Just to be clear, Spanish banks did indeed need a bailout. Spain was clearly on the edge of a “doom loop” — a well-understood process in which concern about banks’ solvency forces the banks to sell assets, which drives down the prices of those assets, which makes people even more worried about solvency. Governments can stop such doom loops with an infusion of cash; in this case, however, the Spanish government’s own solvency is in question, so the cash had to come from a broader European fund.

So there’s nothing necessarily wrong with this latest bailout (although a lot depends on the details). What’s striking, however, is that even as European leaders were putting together this rescue, they were signaling strongly that they have no intention of changing the policies that have left almost a quarter of Spain’s workers — and more than half its young people — jobless...

The Austerity Agenda
by Paul Krugman
The New York Times
June 1, 2012

“The boom, not the slump, is the right time for austerity.” So declared John Maynard Keynes 75 years ago, and he was right. Even if you have a long-run deficit problem — and who doesn’t? — slashing spending while the economy is deeply depressed is a self-defeating strategy, because it just deepens the depression.

So why is Britain doing exactly what it shouldn’t? Unlike the governments of, say, Spain or California, the British government can borrow freely, at historically low interest rates. So why is that government sharply reducing investment and eliminating hundreds of thousands of public-sector jobs, rather than waiting until the economy is stronger?

Over the past few days, I’ve posed that question to a number of supporters of the government of Prime Minister David Cameron, sometimes in private, sometimes on TV. And all these conversations followed the same arc: They began with a bad metaphor and ended with the revelation of ulterior motives...

Europe's biggest fear — A run they cannot stop
The Economist
May 26, 2012

IT'S been a week since shares in Bankia plummeted on reports, later denied, that customers were pulling deposits out of the Spanish lender. Fears of a full-scale bank run in Greece have not yet materialised. But the possibility of a deposit run in Europe's peripheral states is still very much alive. It is also the thing that policymakers are least prepared for...

Paul Krugman on his blog on the NYT
May 13, 2012

Some of us have been talking it over, and here’s what we think the end game looks like:

1. Greek euro exit, very possibly next month.

2. Huge withdrawals from Spanish and Italian banks, as depositors try to move their money to Germany.

3a. Maybe, just possibly, de facto controls, with banks forbidden to transfer deposits out of country and limits on cash withdrawals.

3b. Alternatively, or maybe in tandem, huge draws on ECB credit to keep the banks from collapsing.

4a. Germany has a choice. Accept huge indirect public claims on Italy and Spain, plus a drastic revision of strategy — basically, to give Spain in particular any hope you need both guarantees on its debt to hold borrowing costs down and a higher eurozone inflation target to make relative price adjustment possible; or:

4b. End of the euro.

And we’re talking about months, not years, for this to play out.

Martin Luther and the Eurozone: Theology as an Economic Destiny?
by Stephan Richter
The Globalist
May 14, 2012

If a European country turned from Catholicism to Lutheranism (or, more broadly, to Protestantism) after the early 1500s, when Martin Luther (and a few other reformers, such as Zwingli and Calvin) launched the Reformation, that would have been a good indication that the nation would qualify for the adoption of the common European currency about five centuries later. If it had stayed predominantly Catholic, or even Greek Orthodox, then not.

With few exceptions, that simple rule would have saved hundreds of millions of people around the world a lot of despair, along with much of the animosity and frustration that now prevails — never mind trillions of euros in asset value.

Obviously, Germany would have been in the eurozone under that rule, as would Denmark, Sweden and Norway. Interestingly, financially solid Switzerland would have been in, too. So would, even more tantalizingly, the United Kingdom.

Ireland? Spain? Portugal? Italy? No. Never mind Greece, that highly (un-)Orthodox country when it comes to conducting a clean and proper economic policy.

Luther, if asked at Maastricht, would have nixed any suggestion of including these countries straight away. "Read my lips: No unreformed Catholic countries," he would have chanted. The euro, as a result, would have been far more cohesive — and the European economy in far less trouble...

Global Economy Faces a 'Perfect Storm' in 2013— Roubini
9 May 2012
By: Jeff Cox
CNBC.com Senior Writer

LAS VEGAS — A "global perfect storm" looms for 2013 in which the U.S. economy could fall back into recession and the euro zone will begin to break up, according to the latest gloomy forecast from economist Nouriel Roubini.

Four primary factors will come together, according to the famed "Dr. Doom," to create worldwide turbulence: In addition to the troubles in the U.S. and Europe, Roubini sees military conflict in Iran and a slowdown in emerging markets, particularly China, as the added elements to create the storm.

"You put it together — the euro zone troubles with the US slowdown, China...you could have a train wreck next year," Roubini said during the opening day of the Skybridge Alternative Conference, or SALT, a gathering of a few thousand hedge fund managers concerned about global economic direction...

Roubini— EU To Break Up Once Contagion Hits Italy And Spain
Agustino Fontevecchia
May 9, 2012

Their fate may be sealed, if famed NYU economist Nouriel Roubini is right, though. In a televised interview with CNBC, the man dubbed Dr. Doom said Greece will probably be out of the monetary union in 2013, possibly followed by Portugal and Cyprus. Calling the European situation a “slow motion train wreck,” Roubini noted he expects other peripherals will have to restructure their debt, while failing to improve competitiveness, as the Greek exit would fuel contagion.

Over a 2 to 3 year time span, Spain and Italy will have to face the music. Spain, Roubini explained, will lose market access by the end of the year, requiring a troika bailout and, if this fails to bring the economy back to growth, will have to leave the Eurozone.

“If a small group of countries, Greece, Cyprus, Portugal, restructure and exit, the Eurozone survives,” said Dr. Doom, “but if down the line the problems of debt, growth and sustainability spread to Spain and Italy, they lose market access, the bailout doesn’t work, they have to restructure the debt and eventually they might have to exit, that would be a breakup of the Eurozone,” added Roubini...


Rebuilding Through Reform: How to Ensure Global Financial Stability
by Esther L. George
The Globalist
May 9, 2012

They had become convinced that we had entered a new era in which lower credit standards could simply be priced into the terms of a subprime loan, or that bank leverage ratios were a thing of the past because institutions and regulators could risk-weight assets and off-balance-sheet exposures and use quantitative risk models to come up with "better" and, invariably, lower measures of capital needs.

We also have had numerous changes in the structure of our financial markets over the past few decades, which have left us with a much different corporate culture in banking and finance. In fact, the new structure has brought with it a greater focus on short-term performance and more aggressive attitudes regarding risk-taking.

These changes include a rapidly rising concentration in the banking industry, the withering away of the Glass-Steagall constraints on banks engaging in securities activities and the growth of securitization and money and capital markets.

The outgrowth of all these changes was a complacency and false confidence in new risk-management practices and a substantial and largely unrecognized build-up in leverage and risk that laid the groundwork for this crisis.

If we are to construct a stronger financial system, we must address the significant problems and obvious shortcomings that led to the crisis. First and foremost is correcting the misaligned incentives and the improper expansion of the public safety net that encouraged and enabled institutions to take excessive risks.

The crisis has illustrated an ongoing pattern in which the response of public authorities is to expand the public safety net for too-big-to-fail institutions. This in turn facilitates even more risk-taking and sets the foundation for the next crisis to follow...

Those Revolting Europeans
by Paul Krugman
The New York Times
April 6, 2012

The French are revolting. The Greeks, too. And it’s about time.

Both countries held elections Sunday that were in effect referendums on the current European economic strategy, and in both countries voters turned two thumbs down. It’s far from clear how soon the votes will lead to changes in actual policy, but time is clearly running out for the strategy of recovery through austerity — and that’s a good thing.

Needless to say, that’s not what you heard from the usual suspects in the run-up to the elections. It was actually kind of funny to see the apostles of orthodoxy trying to portray the cautious, mild-mannered François Hollande as a figure of menace. He is “rather dangerous,” declared The Economist, which observed that he “genuinely believes in the need to create a fairer society.” Quelle horreur!

What is true is that Mr. Hollande’s victory means the end of “Merkozy,” the Franco-German axis that has enforced the austerity regime of the past two years. This would be a “dangerous” development if that strategy were working, or even had a reasonable chance of working. But it isn’t and doesn’t; it’s time to move on. Europe’s voters, it turns out, are wiser than the Continent’s best and brightest...

The Germans, needless to say, don’t like this conclusion, nor does the leadership of the central bank. They will cling to their fantasies of prosperity through pain, and will insist that continuing with their failed strategy is the only responsible thing to do. But it seems that they will no longer have unquestioning support from the Élysée Palace. And that, believe it or not, means that both the euro and the European project now have a better chance of surviving than they did a few days ago.

Death of a Fairy Tale
by Paul Krugman
The New York Times
April 26, 2012

This was the month the confidence fairy died.

For the past two years most policy makers in Europe and many politicians and pundits in America have been in thrall to a destructive economic doctrine. According to this doctrine, governments should respond to a severely depressed economy not the way the textbooks say they should — by spending more to offset falling private demand — but with fiscal austerity, slashing spending in an effort to balance their budgets.

Critics warned from the beginning that austerity in the face of depression would only make that depression worse. But the “austerians” insisted that the reverse would happen. Why? Confidence! “Confidence-inspiring policies will foster and not hamper economic recovery,” declared Jean-Claude Trichet, the former president of the European Central Bank — a claim echoed by Republicans in Congress here. Or as I put it way back when, the idea was that the confidence fairy would come in and reward policy makers for their fiscal virtue.

The good news is that many influential people are finally admitting that the confidence fairy was a myth. The bad news is that despite this admission there seems to be little prospect of a near-term course change either in Europe or here in America, where we never fully embraced the doctrine, but have, nonetheless, had de facto austerity in the form of huge spending and employment cuts at the state and local level.

So, about that doctrine: appeals to the wonders of confidence are something Herbert Hoover would have found completely familiar — and faith in the confidence fairy has worked out about as well for modern Europe as it did for Hoover’s America. All around Europe’s periphery, from Spain to Latvia, austerity policies have produced Depression-level slumps and Depression-level unemployment; the confidence fairy is nowhere to be seen, not even in Britain, whose turn to austerity two years ago was greeted with loud hosannas by policy elites on both sides of the Atlantic...

The question now is what they’re going to do about it. And the answer, I fear, is: not much...

Europe’s Economic Suicide
by Paul Krugman
The New York Times
April 16, 2012

On Saturday The Times reported on an apparently growing phenomenon in Europe: “suicide by economic crisis,” people taking their own lives in despair over unemployment and business failure. It was a heartbreaking story. But I’m sure I wasn’t the only reader, especially among economists, wondering if the larger story isn’t so much about individuals as about the apparent determination of European leaders to commit economic suicide for the Continent as a whole.

Just a few months ago I was feeling some hope about Europe. You may recall that late last fall Europe appeared to be on the verge of financial meltdown; but the European Central Bank, Europe’s counterpart to the Fed, came to the Continent’s rescue. It offered Europe’s banks open-ended credit lines as long as they put up the bonds of European governments as collateral; this directly supported the banks and indirectly supported the governments, and put an end to the panic.

The question then was whether this brave and effective action would be the start of a broader rethink, whether European leaders would use the breathing space the bank had created to reconsider the policies that brought matters to a head in the first place.

But they didn’t. Instead, they doubled down on their failed policies and ideas. And it’s getting harder and harder to believe that anything will get them to change course...

What Greece Means
by Paul Krugman
The New York Times
March 12, 2012

So Greece has officially defaulted on its debt to private lenders. It was an “orderly” default, negotiated rather than simply announced, which I guess is a good thing. Still, the story is far from over. Even with this debt relief, Greece — like other European nations forced to impose austerity in a depressed economy — seems doomed to many more years of suffering...

But what Greek experience actually shows is that while running deficits in good times can get you in trouble — which is indeed the story for Greece, although not for Spain — trying to eliminate deficits once you’re already in trouble is a recipe for depression...

What Ails Europe?
by Paul Krugman
The New York Times
February 26, 2012

Things are terrible here, as unemployment soars past 13 percent. Things are even worse in Greece, Ireland, and arguably in Spain, and Europe as a whole appears to be sliding back into recession.

Why has Europe become the sick man of the world economy? Everyone knows the answer. Unfortunately, most of what people know isn't true — and false stories about European woes are warping our economic discourse.

Read an opinion piece about Europe — or, all too often, a supposedly factual news report — and you'll probably encounter one of two stories, which I think of as the Republican narrative and the German narrative. Neither story fits the facts...

Greece: The Epicenter of Global Pillage

By Steven Lendman
The Progressive Radio News Hour
February 24, 2012

Predatory bankers make serial killers look good by comparison. Their business model creates crises to facilitate grand theft, financial terrorism, and debt entrapment.

They steal all material wealth and then some. They systematically rob investors and strip mine economies for self-enrichment.

They demand they get paid first. They hold nations hostage to assure it. They turn crises into catastrophes.

They leave mass impoverishment, high unemployment, neo-serfdom, and human wreckage in their wake.

Their Federal Reserve/ECB/IMF/World Bank/political class lackeys do their bidding.

They're more dangerous than standing armies. They wage war by other means. They cause "demographic shrinkage, shortened life spans, emigration and capital flight," explains Michael Hudson.

They're a malignancy ravaging societies and humanity. Greece is the epicenter of what's metastasizing globally. The latest bailout deal highlights out-of-control pillage...
Pain Without Gain
by Paul Krugman
The New York Times
February 20, 2012

Last week the European Commission confirmed what everyone suspected: the economies it surveys are shrinking, not growing. It's not an official recession yet, but the only real question is how deep the downturn will be.

And this downturn is hitting nations that have never recovered from the last recession. For all America's troubles, its gross domestic product has finally surpassed its pre-crisis peak; Europe's has not. And some nations are suffering Great Depression-level pain: Greece and Ireland have had double-digit declines in output, Spain has 23 percent unemployment, Britain's slump has now gone on longer than its slump in the 1930s...

Posted: Dec 1, 2010 - 10:12am in politics: European Union

Europe Examines Ways to Quell Its Debt Crisis

Fears over the European financial crisis began to spread Tuesday from the weaker countries to healthier ones, including Italy and Belgium, and even much stronger Germany, spurring a stepped up search for a solution to the economic problems putting a strain on Europe's decade-old monetary union.

"Ireland and the Euro— Is It Time to Part?"  by Paul Krugman

This is the way the euro ends. Not with a whimper, but with a bank run.

25 November 2010

So who's next for financial meltdown? Spain, Portugal and Belgium set to follow Ireland into abyss as debt crisis threatens to destroy the euro 


Silly Iguana Charmer
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Location: Altamonte Springs, FL

Posted: Aug 7, 2003 - 10:53am