"EU boss lashes out at Stephen Harper"

[Michael Hardner]

But you said earlier that the people are somewhat to blame for it. Seems like an inconsistency Mike.

Yes, I do think they're responsible. You said or implied they weren't, I thought, but then when I said that devaluation would hit common folk, you replied "as it should" implying that they should be punished. That's why I was confused.

[GostHacked]

Wait a second... I got hoodwinked ! They can't devalue the Euro because it's not their currency to devalue. What do you mean, devaluation ?

Devaluation of your currency means you need more of your currency to be par with other currencies.

Let's talk US dollar to Canadian dollar .. 1:1. Now if it it takes 2 US to make on CND, the somehow the value of the US dollar is now half of what the CND is worth. The more it is devalued the more of that currency it takes to keep on par with the others. Not the best explanation, but gives a hint.

It's based on things like GDP, deficits, dept, purchasing power, to name a few.

Devaluation of a currency can come in the form of printing money as well. If one floods the market with 1 billion new US dollars, knowing that the amount of money to print is really an arbitrary number, what is backing this new money? If a billion is created out of thin air, then what really is the value of the currency to begin with?

Economics has rarely made sense to me, mainly because its not supposed to make sense.

Edited June 21, 2012 by GostHacked

[dre]

Yes, I do think they're responsible. You said or implied they weren't, I thought, but then when I said that devaluation would hit common folk, you replied "as it should" implying that they should be punished. That's why I was confused.

Not implying they should be "punished". Implying that its their country to fix. Australians arent gonna do it

By the way youre sticking GhostHacked with my statements

Edited June 21, 2012 by dre

[GostHacked]

Not implying they should be "punished". Implying that its their country to fix. Australians arent gonna do it

We can look at Iceland and see how they have attempted to fix things.

1 - kick out the bankers.

2 - forgive the debt that these bankers allowed the public to rack up.

3 - start the recovery process.

[Michael Hardner]

Not implying they should be "punished". Implying that its their country to fix. Australians arent gonna do it

By the way youre sticking GhostHacked with my statements

Uh... sorry.

Anyway, yes the point was that it wasn't my position that they shouldn't be held responsible but I should have paid closer attention. I'm posting to 3 people right now, so I'm losing brain power, kind of losing health points in a video game when you fight 3 people.

[Canuckistani]

We can look at Iceland and see how they have attempted to fix things.

1 - kick out the bankers.

2 - forgive the debt that these bankers allowed the public to rack up.

3 - start the recovery process.

How is that working, and is Britain, which got stuck with that debt still perusing action against Iceland.

What happens when wealth is seized (ie forgiving debt) is the banking system freezes up because they don't want to lend money anymore. Seems to me the answer for that is to nationalize the banks, at least in the short term, and have the govt lend money for economic activity, not for speculation. I'm sure somebody will tell me why it won't work, but these days it seems that any suggestion that that fat cats take a hit seems to garner that response - we're helpless in the face of ever greater inequality and the rich sucking the system dry, it seems.

[dre]

How is that working, and is Britain, which got stuck with that debt still perusing action against Iceland.

What happens when wealth is seized (ie forgiving debt) is the banking system freezes up because they don't want to lend money anymore. Seems to me the answer for that is to nationalize the banks, at least in the short term, and have the govt lend money for economic activity, not for speculation. I'm sure somebody will tell me why it won't work, but these days it seems that any suggestion that that fat cats take a hit seems to garner that response - we're helpless in the face of ever greater inequality and the rich sucking the system dry, it seems.

Well they dont have to nationalize their "banks" per say, just the money creation process. Canada for example has a nationalized central bank (The Bank of Canada) that is entirely owned by the tax payer... (100% of its shares are held by the minister of finance) and a series of private commercial banks.

What happened in Iceland is that they privatized their three largest banks and within 3 years those banks had conjured into existance and loaned out at interest FOURTEEN TIMES icelands entire GPD.

The moral of this story is that allowing private bankers to create money is extremely dangerous and stupid. Surrendering control of your currency and interest rates is extremely dangerous and stupid as well. These things are the most important tools a national government has to manage its economy.

[bleeding heart]

That may be generally true, but it's not entirely true. Investors will lose out, politicians will have their careers ruined, and banks will be hit.

But--with doubtless a few exceptions--their "suffering" is a joke compared to what the bottom orders will feel.

I get your point about democracy, but the fact is that those who are individually the weakest and most voiceless tend to be the ones who receive the harshest puinishments...and that goes for austerity programs, certainly.

Now, ensuring--as we are institutionally bound to do--that most of the suffering will be held by the poor and the working poor, is class warfare, though we've become numbed enough to maybe see it as some sort of "natural order of things."

That is, if the austerity policies were going to hit the wealthy as hard as the non-wealthy--they would never be implemented. That I can guarantee.

Edited June 21, 2012 by bleeding heart

[Canuckistani]

Well they dont have to nationalize their "banks" per say, just the money creation process. Canada for example has a nationalized central bank (The Bank of Canada) that is entirely owned by the tax payer... (100% of its shares are held by the minister of finance) and a series of private commercial banks.

What happened in Iceland is that they privatized their three largest banks and within 3 years those banks had conjured into existance and loaned out at interest FOURTEEN TIMES icelands entire GPD.

The moral of this story is that allowing private bankers to create money is extremely dangerous and stupid. Surrendering control of your currency and interest rates is extremely dangerous and stupid as well. These things are the most important tools a national government has to manage its economy.

Apparently the US came very close to nationalizing the banks, but wouldn't take the final step because that just doesn't fly in the US. If they had taken direct control over the banks tho, seems to me we wouldn't have had the scandal of bankers still getting their fat bonuses after the bailout, and maybe more wealth would have been recovered. AFAIK, the US central bank system is similar to ours, yet lookt at the trouble they got into, and apparently we still may get into. Seems to me there are times when the govt needs to do more than just control the money supply and interest rates.

[dre]

Apparently the US came very close to nationalizing the banks, but wouldn't take the final step because that just doesn't fly in the US. If they had taken direct control over the banks tho, seems to me we wouldn't have had the scandal of bankers still getting their fat bonuses after the bailout, and maybe more wealth would have been recovered. AFAIK, the US central bank system is similar to ours, yet lookt at the trouble they got into, and apparently we still may get into. Seems to me there are times when the govt needs to do more than just control the money supply and interest rates.

The US system is completely different than ours. The Bank of Canada is owned completely by the Canadian people and 100% of its shares are held by the minister of finance.

Contrary to what most people believe the US does NOT own the US Federal Reserve. Its made up of 12 different private banks. Theres some government control through the presidential appointment of the chairman and the board of governors but up until that last couple of years the government wasnt even allowed to audit it or ask the Fed what its doing.

[punked]

More horseshit. There was no problem getting the greeks to pay taxes in fact tax revenues increased more than 30%. All you are doing is parroting the same easily debunked crap.

The fact is that as far as debt up until 2007 Greece did exactly what their creditors, and their financial apparatus, and most of the worlds economists told them to do. If there was any sort of widespread dissaproval then people would not have been buying low yield bonds in 2006.

No they didn't. They cooked the books, that is a fact that is well reported.

`

[Michael Hardner]

But--with doubtless a few exceptions--their "suffering" is a joke compared to what the bottom orders will feel.

If you lose 50% of your assets when you're a billionaire it still 'hurts' less than if you lose 10% at the poverty line. This is the world.

But... hurting bond holders, lenders, and so on hurts middle class people as well - pensions and so on.

Now, ensuring--as we are institutionally bound to do--that most of the suffering will be held by the poor and the working poor, is class warfare, though we've become numbed enough to maybe see it as some sort of "natural order of things."

You're making it sound like this is a new thing.

That is, if the austerity policies were going to hit the wealthy as hard as the non-wealthy--they would never be implemented. That I can guarantee.

See my example above - it's not clear to me how you could do that other than a simple nationalization of private wealth. Devaluation would hurt the commons more than the wealthy too by this definition.

[bleeding heart]

If you lose 50% of your assets when you're a billionaire it still 'hurts' less than if you lose 10% at the poverty line. This is the world.

Of course. I'm only pointing out who gets hurt most by austerity policies--in reply to your stated view that the biggies "hurt" as well.

Most of the Earth would welcome that kind of "pain."

It's like President Carter's remarks about the Vietnam War that "the destruction was mutual."

As for "this is the world"...it's not an earthquake or a hurricane. It's human policy, governed through the choices, and the stronger and wealthier you are, the bigger hand you've had in making this system what it is (institutionally)...and it's designed to hurt the poor more than the rich.

That is, if someone's got to hurt...it should be the lower orders.

This is actually surprisingly explicit; I don't know if that's a sign of political awakening on a broad scale, or rather a growing lack of concern for others.

But... hurting bond holders, lenders, and so on hurts middle class people as well - pensions and so on.

Yes, the pain increases the lower on the ladder one sits.

You're making it sound like this is a new thing.

No I'm not. How so? By mentioning it?

See my example above - it's not clear to me how you could do that other than a simple nationalization of private wealth. Devaluation would hurt the commons more than the wealthy too by this definition.

You're agreeing with me that austerity would never be implemented if it were to hurt the moneyed classes too severely; which means--by definition, mind you--that you agree it is an elitist policy, and defended largely by top-down class warriors.

Again, this isn't railing at "the way of the world," at least no moreso than proclaiming that violent crime is bad. (It's always been with us, and likely always will.)

I can't imagine why such in-our-face class issues are somehow boring, has-been topics, and complaints are just tilting at windmills.

Unlike, say, rape or murder, or...heavens forfend! ...theft.

I assume it's our widespread, indoctrinated acceptance of the innate superiority of people with wealth over those who lack it. I honestly can't think of another explanation why this topic, almost alone, is the one that mainstream liberals (never mind conservatives) get so...yaaawwwwn-y about.

No other topics, mind; just this one.

Edited June 21, 2012 by bleeding heart

[Michael Hardner]

Of course. I'm only pointing out who gets hurt most by austerity policies--in reply to your stated view that the biggies "hurt" as well.

Right, see my example. They can lose a big percentage of assets and live better than you or I ever will.

It's unfair, as much as life is unfair.

What would you like to do about that ?

No I'm not. How so? By mentioning it?

I guess by suggesting that we can do something about it in the face of the current crisis.

You're agreeing with me that austerity would never be implemented if it were to hurt the moneyed classes too severely; which means--by definition, mind you--that you agree it is an elitist policy, and defended largely by top-down class warriors.

Right.

I can't imagine why such in-our-face class issues are somehow boring, has-been topics, and complaints are just tilting at windmills.

Well, in the midst of a discussion that talks about solutions somebody points out that there's inherent unfairness, and my response is to ask how you would incorporate that perspective into a solution.

I assume it's our widespread, indoctrinated acceptance of the innate superiority of people with wealth over those who lack it. I honestly can't think of another explanation why this topic, almost alone, is the one that mainstream liberals (never mind conservatives) get so...yaaawwwwn-y about.

We have a few blunt instruments: tax law, politics, and a constitution too.

It's not about their conspiracy, in the end, it's about keeping capital flowing and not scaring off investors. If you're really planning on scaring them, then just take all of their stuff I guess...

[punked]

We have a few blunt instruments: tax law, politics, and a constitution too.

It's not about their conspiracy, in the end, it's about keeping capital flowing and not scaring off investors. If you're really planning on scaring them, then just take all of their stuff I guess...

Don't forget the last instrument the one which was used in the last depression. WAR. If you don't want to help your neighbor by lending some money that is fine but the last time we demanded blood out of a stone the whole world went to war which meant lots and lots of rich people were rationed as if they were poor. Let's get out of this one with out a war by instead of trying to punish people, we use good policy so everyone gets a little more.

[dre]

Well, in the midst of a discussion that talks about solutions somebody points out that there's inherent unfairness, and my response is to ask how you would incorporate that perspective into a solution.

Take the hit! Default, return to the drachma, and let it devalue. That way everyones purchasing power is effectively reduced in proportion to how much money they have or make, and government wont have to make large cuts or cause riots with draconian "austerity measures".

And the people responsible for all that malinvestment will lose their money as they should.

This will also help them bring production inline with consumption and provide the basis for a strong economy down the road. Staying in the economic euro-prison will do neither, and greeks will probably eventually be reduced to a protectorate.

Edited June 21, 2012 by dre

[punked]

Take the hit, return to the drachma, and let it devalue. That way everyones purchasing power is effectively reduced in proportion to how much money they have or make, and government wont have to make large cuts or cause riots with draconian "austerity measures".

Yep that is a solution. If it happens is another story because the EU means many Greeks can work in say Germany and send money home. So while a solution it is, it is not with out its problems.

The other problem is what the drachma coming onto an open market is worth. Right now who invests in Greece? In the world only really the Europeans. So when you go back to the drachma you run the risk of inflation on a high order. Who will to use the drachma when it is worthless. There will be a bank run it could spell disaster. So then what? You shut down the boarder until you can get rid of all the Euros in Greece? It isn't as simple as you make it.

Edited June 21, 2012 by punked

[Michael Hardner]

Take the hit! Default, return to the drachma, and let it devalue.

I pointed this out, I think: when people say "Make the rich pay", I assume they're not talking about orderly withdrawal from the Euro followed by Drachma devaluation, which would hurt poor people more than rich people.

BH was complaining that the poor suffer more than the rich and this approach wouldn't fix that, I think.

[dre]

I pointed this out, I think: when people say "Make the rich pay", I assume they're not talking about orderly withdrawal from the Euro followed by Drachma devaluation, which would hurt poor people more than rich people.

BH was complaining that the poor suffer more than the rich and this approach wouldn't fix that, I think.

Well no approach will fix that because wealthy people clearly have a stronger firewall against pretty much ANY negative consequence.

But it would be much MORE fair and in the mediumélong term it would give the people of Greece their best chance to be prosperous.

But in the SHORT TERM, the way to feel the least pain is to keep getting bailed out, and losing sovereignty, democracy, and real property to the ECB and its creditors.

[Michael Hardner]

Well no approach will fix that because wealthy people clearly have a stronger firewall against pretty much ANY negative consequence.

I agree. Unless you're going to storm the castle, and seize their assets this is empty.

But it would be much MORE fair and in the mediumélong term it would give the people of Greece their best chance to be prosperous.

But in the SHORT TERM, the way to feel the least pain is to keep getting bailed out, and losing sovereignty, democracy, and real property to the ECB and its creditors.

I'm not unconvinced of this position. To me, the question is - austerity and bail-out or default and deep and immediate pain, followed by rebuilding. The Uruguay example you gave was interesting.

Still, the solution involves not paying debts, a behaviour that doesn't sit well with me.

[dre]

Still, the solution involves not paying debts, a behaviour that doesn't sit well with me.

Default is an important and necessary capitalist institution. And when you invest money in a country or business, or person you risk losing it if its not a good investment. If theres no penalty for all this malinvestment it will continue unabated and these problems will get worse and more common.

I have no problem at all with Greece unilaterally changing the terms of this debt. Just declare that it will now be denominated in drachmas instead of euros, and once the drachma revalues in a few years creditors will get most of their money back.

In fact Greeks creditors actually stand a BETTER chance to get their money back if Greece defaults.

[bleeding heart]

Right, see my example. They can lose a big percentage of assets and live better than you or I ever will.

It's unfair, as much as life is unfair.

What would you like to do about that ?

All I'm asking, perhaps with insufficient respect, is that we stop talking about "sharing the pain" as if that's truly what's occurring. "Things are tough all over," when used as an answering point in an actual debate, is an empty platitude. It verges on being flatly untrue, in fact.

I guess by suggesting that we can do something about it in the face of the current crisis.

I'm not suggesting prescriptions; I don't have the insight or wisdom to come up with them.

To be fair to me, it appears that neither do our leaders, planners, and policymakers...not that it's on their radar anyway.

But that doesn't mean that nothing can be done. In a global era of truly momentous changes, that's almost a counterintuitive idea.

But what you pointed out on another post is certainly correct: it takes trmendous political will to effect changes...whatever they might be.

Well, in the midst of a discussion that talks about solutions somebody points out that there's inherent unfairness, and my response is to ask how you would incorporate that perspective into a solution.

I know, but I was responding directly to declarative sentences about the way the pain is shared, and so on.

It's not diverting from the topic if I respond to points people are actually making.

At any rate, it brings me back to my final complaint: if i were opining about any number of injustices, there would be zero controversy.

Raise issues about the way government policy affects the poor more than the rich...and there's a loud "Meh."

I'm not quite sure why, my earlier speculation notwithstanding.

We have a few blunt instruments: tax law, politics, and a constitution too.

I agree. They've been quite helpful in a lot of ways.

It's not about their conspiracy, in the end, it's about keeping capital flowing and not scaring off investors. If you're really planning on scaring them, then just take all of their stuff I guess...

I don't think it's a conspiracy at all, at least not as the term is connotatively understood.It's a sort of institutional lunacy, hallowed by time, sanctified by intellectuals (courtiers, in effect if not intent), and driven by the terrific human weakness of sycophancy, or worship of powerful men. (And women...well, no, pretty much men.)

Edited June 22, 2012 by bleeding heart

[Michael Hardner]

I suppose you're right, talking about sharing the pain isn't accurate. I can only suggest that we refer to the solutions as agreements, or solutions moving forward.

[eyeball]

It's unfair, as much as life is unfair.

What would you like to do about that ?

Like, as in enjoy? I suspect eventually I'll take a certain vindicated pleasure in seeing the entire system crash down around everyone all at one time in one big messy heap. In the immortal words of Josey Wales, we all got it coming.

Before that eventuality though I'd really like to try and establish a Secrecy Commission who's business it is to ensure there is next to none of it (secrecy that is) in the governance of the public's domain. I realize that's even more like the end of the world as the wealthy and powerful have known and enjoyed it for you but it's all I got. The only other alternative is the guillotine, which as we've learned from history simply kicks the can down the road until the next elite picks it up.

[Michael Hardner]

Like, as in enjoy? I suspect eventually I'll take a certain vindicated pleasure in seeing the entire system crash down around everyone all at one time in one big messy heap. In the immortal words of Josey Wales, we all got it coming.

While we have already talked about the unfairness of the system here, it's another thing to suggest blowing it up and starting over is going to happen. This isn't the French Revolution.