Sunday, November 9, 2014

Today's Links

“Crime, once exposed, has no refuge but in audacity.” Tacitus

“Who will Guard the Guardians, or Who watches the watchers.” Juvenal

1--Keynes to FDR: Forget Quantitative Easing, Free Banking

From Keynes' "Open Letter to President Roosevelt," published December 16, 1933:
"Rising output and rising incomes will suffer a set-back sooner or later if the quantity of money is rigidly fixed. Some people seem to infer from this that output and income can be raised by increasing the quantity of money. But this is like trying to get fat by buying a larger belt. In the United States to-day your belt is plenty big enough for your belly. It is a most misleading thing to stress the quantity of money, which is only a limiting factor, rather than the volume of expenditure, which is the operative factor."
This near the very bottom of the Great Depression. Perhaps Keynes was wrong then. But is there not a strong case to be made, nevertheless, that the recent rounds of QE were, what with all that heaping-up of excess reserves, just so much unhelpful belt-loosening?

2--Obama Myths, Rob Urie, cp

The carefully placed fantasy entering the 2012 elections was that once Mr. Obama was relieved of the burden of running for office again the U.S. would enter a liberal renaissance. What we got in fact was sequential lies in defense of NSA spying, U.S. wars and chaos across North Africa and the Middle East, continuation of the (George W) Bush ‘unitary’ Presidency and an economic ‘recovery’ that left the rich richer and everyone else not so much.

3---Yellen Says Rate Rises Could Increase Financial Volatility, wsj

4--10 Economic Trends that Spell Doom for America's Workers, alternet

5--Ilargi: the broken Eurozone, NC
The North is competitive. The South is 20% overvalued.
And I realized that’s all you need to know about the eurozone, and about why it will fail. Or has already failed, to put it more accurately. There’s no other information required. Other than a bit of context perhaps to clarify.
Before the euro, and the eurozone, countries like Greece, Spain, Italy, Portugal, would perform 20% or more lower economically than Germany or Holland would. And that was kind of alright, because periodically, their governments and central banks would revalue (devaluate) their currencies down against for instance the Deutschmark by those same 20% or so.

Of course Germany hated this to an extent, since it made it harder for its industries to compete against Greek and Italian companies. Which may by the way well be a mostly hidden reason for them to push the eurozone on the Mediterranean. Devaluation still worked for many years, though, and as we presently find, it was the only thing that could have worked.
Today, because they now have the same currency, and devaluation is thus impossible, and southern Europe also still underperforms the north, there’s only one possible outcome: the south keeps getting poorer all the time. It’s inevitable. Unless Greece starts outproducing the Germans, and we all start driving Hellas quality cars, but that’s not in the cards.

The fatal flaw in the eurozone model is that there’s no way, no escape clause, to rectify the inherited differences between north and south. Moreover, because there isn’t, the differences must and will get bigger. There’s nothing any kind of stimulus by the ECB or EU can do about that.

6--Twenty five years since the fall of the Berlin Wall: A balance sheet, wsws

After the Second World War, the Stalinist bureaucracy served as an important pillar of the status quo that ensured the continued domination of capitalism on a global scale. In consultation with the Western Allies, Stalin extended the influence of his regime into Eastern Europe. The Stalinists abolished capitalist property in East Germany (GDR), Poland, Hungary, Romania and the other Eastern Bloc countries, but, as in their crushing on June 17, 1953 of the East German workers’ uprising, they suppressed every independent movement of the working class.

These conditions could not last forever. Leon Trotsky, the leading Marxist opponent of Stalinism, had anticipated this. In 1938, in the founding programme of the Fourth International, he wrote: “Either the bureaucracy, becoming ever more the organ of the world bourgeoisie in the workers’ state, will overthrow the new forms of property and plunge the country back to capitalism, or the working class will crush the bureaucracy and open the way to socialism.”....

From a social standpoint, the end of the GDR was not a revolution, but a counterrevolution. Along with the return of capitalism, unemployment, crass exploitation, social inequality and abject poverty returned to eastern Germany.
The GDR’s well-developed industry, which guaranteed full employment and social security, was virtually razed to the ground. The Treuhandanstalt, charged with privatising the state-owned industries, disposed of 14,000 nationalised enterprises. Some were sold off; most were shut down. Within three years, 71 percent of all workers had either been forced to find new jobs or remained unemployed. Today, the number of manufacturing jobs in the east is a mere quarter of the total in 1989.

The result is the depopulation of entire regions, leaving a preponderance of older people. In 1989, there were 16.7 million people living in the GDR. By 2006, the number of people in the former East Germany had fallen to 14.6 million, a decrease of 13 percent. Since over 60 percent of those who emigrated were under 30, and the birth rate fell dramatically, the average age of the population has risen sharply.

7---Podemos – translated manifesto
We are faced with a financial coup d’état against the peoples of the south of the Eurozone. Those who are in charge are selling off the country and our future in pieces. The rise in repression (with more authoritarian laws, the rise in fines in a situation of economic impoverishment, and even, obstacles to the exercise of civil and political rights) is the final element of a landscape dominated by the deepening of social and gender inequalities and increased plunder of natural resources.

8---German unification: Not what its cracked up to be, Spiegel

Today, 20 years after the fall of the Berlin Wall, 57 percent, or an absolute majority, of eastern Germans defend the former East Germany. "The GDR had more good sides than bad sides. There were some problems, but life was good there," say 49 percent of those polled. Eight percent of eastern Germans flatly oppose all criticism of their former home and agree with the statement: "The GDR had, for the most part, good sides. Life there was happier and better than in reunified Germany today."

9--Why Obama And The Democrats Can't Get Any Love For The Economy, Mark Gongloff


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