World Politics

[Captain_Cavman]

Despite what R's like to believe, the problem with the '09 stimulus was that it wasn't nearly big enough.

http://thehill.com/blogs/on-the-money/budget/195181-cbo-says-obama-stimulus-still-helps-economy

yeah, not nearly big enough...

As someone wiser than me once said, "If stimulus spending worked, the Soviet Union would have won the Cold War"

 

[Bala Verde]

yeah, not nearly big enough...

As someone wiser than me once said, "If stimulus spending worked, the Soviet Union would have won the Cold War"

Because the 5 year plans in the USSR were similar to stimulus spending in what way again?

 

[blutto]

yeah, not nearly big enough...

As someone wiser than me once said, "If stimulus spending worked, the Soviet Union would have won the Cold War"

...their big problem, apart from recovering from WW2, and being run by a very small ( about 1% of the population oddly enough...and where oh where did I see that before ) interconnected group of corrupt apparatchiks supported by a thugish police system, an ideological belief system that trumped meaningful interaction with reality, was that too much of that stimulus was wasted on sink-hole projects like the military, outmoded means of energy and food production .....

...and BTW the results for the Cold War aren't officially in yet....and there have been some developments as of late that have proved quite interesting...and it would seem that Marx may have been righter than some people may want to admit...

Cheers

blutto

 

[Captain_Cavman]

Because the 5 year plans in the USSR were similar to stimulus spending in what way again?

I don't know why you think the term "5 year plans" is significant.

But anyway, http://www.brookings.edu/opinions/2003/1112russia_gaddy.aspx There's a more apt source somewhere but this is the first one ggogle came up with.

 

[Bala Verde]

I don't know why you think the term "5 year plans" is significant.

But anyway, http://www.brookings.edu/opinions/2003/1112russia_gaddy.aspx There's a more apt source somewhere but this is the first one ggogle came up with.

Oh my. Wow. That. Is. Quite. Something.

I asked a question and you "googled the answer"?

Did you even read the article? I mean, really, did you read it at all?

If so, in what way does that article compare stimulus, a strategy that has been used by in response to economic crisis all over the world by conservative, centrist and left governments alike***, whether through tax cuts, increased spending, monetary expansion, or a combination, to USSR state-led economic organization (or five year plans)?

*** Example of US interventions in response to a recession:

Policymakers have gotten better at economic stimulus as the decades have passed, experts say. Stimulus bills were enacted during five of the past seven recessions — in 1964 [D-D-D], 1971 [R-D-D], 1975[R-D-D], 1981 [R-R-D] and 2001 [D-R-R]. Efforts made in the 1960s and 1970s were relatively ineffective. By 1981, lawmakers had learned to act faster to stave off recession. The tax cuts of 2001 were swiftest of all. source

***
and here table 1 (page 6), in an IMF report, again demonstrates that fiscal stimulus is a widespread practice: The Size of the Fiscal Expansion: An Analysis for the Largest Countries [2009] [pdf]

Even the IMF, not normally an organization known for its hard-core Communist practices, underlines the importance of stimulus in response to economic crisis, to stabilize the economy and hasten recovery:

Escalating risks to the global economic recovery mean the US and other major economies should not sharply tighten short-term fiscal policy, the International Monetary Fund has warned.source

The combination of discretionary fiscal stimulus, automatic stabilizers, impact of nondiscretionary effects and direct balance sheet support to financial institutions will lead to a sizeable worsening of G-20 countries' fiscal positions in the short run. Based on measures already taken and current plans, it is estimated that government debt ratios and fiscal deficits, particularly in advanced economies, will increase significantly.

For the G-20 as a whole, the general government balance is expected to deteriorate by 3½ percent of GDP, on average, in 2009. While the fiscal cost for some countries will be large in the short run, the alternative of providing no fiscal stimulus or financial sector support would be extremely costly in terms of the lost output.source

Too funny.

 

[Alpe d'Huez]

Reading those links on the European crisis, I am not familiar enough with all of it, and would like to know more about how Iceland and Ireland are doing. But from what I can tell, I am starting to think Greece, Italy, and maybe a few more countries need some sort of Argentinian re-structuring or default. It would be a mess, no doubt. But since there will be no massive public or private stimulus to increase cash flow and drive productivity, the only paths I see are:

1) Default/restructuring of debt - messy, shock doctrine of sorts. But could lead to strong growth and expansion in a few years.

2) Hidden default through hyperinflation - Would ease the debt numbers, but anyone stuck with currency gets badly hurt, and growth is very uneven.

3) Austerity measures - Growth drops, tax revenues drop, everything grinds to a crawl for potentially many years, even decades, in order to cover the debt.

None of these would be easy, but the debt burden is so high, productivity is so low, cash flow is so low, something has to happen. There's no way they are going to try to stimulate anything anymore with any sort of investment. Certainly not in Greece. So one of those choices needs to be taken, and I believe for Greece, and probably Italy as well, the answer is to default. I don't think people will put up with long-term austerity, especially when they are highly likely to see any results from it.

Would love to hear thoughts from level headed people in Europe on this. What options they think exist, and what they think would be best.

 

[redtreviso]

The REAL Public Nuisance

http://youtu.be/ltxMtS1Frpk

 

[Amsterhammer]

Would love to hear thoughts from level headed people in Europe on this. What options they think exist, and what they think would be best.

To be brutally honest, I have been avoiding thinking about this because there's already more than enough to be miserable about, and I've never really dug deeply into economics. At this moment, I honestly don't know how I feel about what's likely to happen, and what the possible repercussions of a major European state defaulting might be both for my life, and for the entity that we call 'Europe'.

I shall read up about this, muse upon it, and get back to you in due course.

 

[auscyclefan94]

Well, if you think your politicians are bad in the US, lets see who will be the new speaker in the Aus, House of Reps...

Someone who sleeps during Parliament.

 

[redtreviso]

maybe someone should volunteer her to test out some pepper spray...Couldn't be more of an assault than a custard pie in the face since both are food products.


""Pepper spray, its effects, and its appropriateness continue to be top of mind in the media.

Following the protests at UC Davis, during which Occupy protesters were sprayed with pepper spray by a campus police officer, Fox News commentator Megyn Kelly went on the Bill O'Reilly show.

Kelly appeared to downplay the physical effects of pepper spray. Kelly said pepper spray is "like a derivative of real pepper. It's a food product essentially."

Maybe so, but her comments have sparked a spicy backlash. A petition is circulating on the Internet that suggests Kelly should put her eyeballs where her mouth is by getting sprayed with the substance on live television. Currently, more than 16,000 people have signed the pledge..

http://news.yahoo.com/blogs/upshot/megyn-kelly-pepper-spray-comments-spark-backlash-222658156.html

 

[Ferminal]

Well, if you think your politicians are bad in the US, lets see who will be the new speaker in the Aus, House of Reps...

Someone who sleeps during Parliament.

At least he's a Conservative.

 

[auscyclefan94]

At least he's a Conservative.

Well not now. He's ensured this will be his last term in Government.

 

[Alpe d'Huez]

...I honestly don't know how I feel about what's likely to happen, and what the possible repercussions of a major European state defaulting might be both for my life, and for the entity that we call 'Europe'.

As I noted, from what I can tell the situation is so dire, not only Greece and Italy, but for the Euro that several countries could potentially face a Hobson's choice of sorts of one of three:

1) Default or restructuring of debt.
2) Hidden default through hyperinflation.
3) Austerity measures with years of very slow growth, and deep cuts.

Maybe I'm wrong but I just don't see any other way out of it. The countries who need it most are not going to get a huge influx of cash to stimulate the economy. The masses of people have no cash to increase the flow on their own; so you're not going to grow your way through it. And there's a huge projected debt load.

Am I reading this wrong?

 

[Captain_Cavman]

Oh my. Wow. That. Is. Quite. Something.

I asked a question and you "googled the answer"?

You posed a strawman. I spent as little time on producing an answer as it deserved.

Did you even read the article? I mean, really, did you read it at all?

If so, in what way does that article compare stimulus, a strategy that has been used by in response to economic crisis all over the world by conservative, centrist and left governments alike***, whether through tax cuts, increased spending, monetary expansion, or a combination, to USSR state-led economic organization (or five year plans)?

*** Example of US interventions in response to a recession:


***
and here table 1 (page 6), in an IMF report, again demonstrates that fiscal stimulus is a widespread practice: The Size of the Fiscal Expansion: An Analysis for the Largest Countries [2009] [pdf]

Even the IMF, not normally an organization known for its hard-core Communist practices, underlines the importance of stimulus in response to economic crisis, to stabilize the economy and hasten recovery:

You clearly did not understand the chart I posted.

maybe if you saw the constituent parts, it would be easier...

US GDP has tripled since 1971

but oh look what has happened to debt. I wonder if there's a connection?

What you have is a measure of the effect the issuance of debt has on GDP.

Intuitively, you must know that there is a cost to debt and at some point that cost will outweigh any benefit. The original chart shows where that point is. It's right here, right now. Why do you think Governments and currencies are starting to collapse?


So by increasing GDP by bringing money into existence through the creation of debt is a con trick. The GDP you end up with is not 'real' because you have to pay the debt back at some point.

Which brings us back to the Soviets, and it really wasn't a major point as you know...

"GDP by definition is supposed to measure the total market value of all goods and services purchased for final use during a given year. The key phrase is "market value." Even without blatant statistical deception, a nation can increase its GDP if the government rather than the market decides what has value and what does not. This is precisely what the Soviet government did during the industrialization of Siberia under central planning."

Why do people want to stave of recessions? Do they really believe that indefinite exponential growth is possible?

What Keynes actually proposed was that Government saved a surplus during the good times and used that surplus to stimulate the economy during a downturn. Nowhere did he suggest that Government should generate money via the printing press or by issuing debt in order to avoid a downturn completely.

On a final note, you could look at what happens to democratic process when economies are based on falsehoods. The IMF has never been big on democracy, nor the EU nor indeed the Soviet Union. And in the US?

Too funny.

Too sad

 

[Captain_Cavman]

As I noted, from what I can tell the situation is so dire, not only Greece and Italy, but for the Euro that several countries could potentially face a Hobson's choice of sorts of one of three:

1) Default or restructuring of debt.
2) Hidden default through hyperinflation.
3) Austerity measures with years of very slow growth, and deep cuts.

Maybe I'm wrong but I just don't see any other way out of it. The countries who need it most are not going to get a huge influx of cash to stimulate the economy. The masses of people have no cash to increase the flow on their own; so you're not going to grow your way through it. And there's a huge projected debt load.

Am I reading this wrong?

If national leaders had the interests of their people at heart, the answer would be (1)

Any solution would involve a huge dose of (3). What we've got at the moment is a small dose of (3) in order to remain an economic cripple.

In order to prevent (1) from happening in Italy and Greece, the democratic process has been swept aside. Is this a good thing?

 

[rhubroma]

As I noted, from what I can tell the situation is so dire, not only Greece and Italy, but for the Euro that several countries could potentially face a Hobson's choice of sorts of one of three:

1) Default or restructuring of debt.
2) Hidden default through hyperinflation.
3) Austerity measures with years of very slow growth, and deep cuts.

Maybe I'm wrong but I just don't see any other way out of it. The countries who need it most are not going to get a huge influx of cash to stimulate the economy. The masses of people have no cash to increase the flow on their own; so you're not going to grow your way through it. And there's a huge projected debt load.

Am I reading this wrong?

The problem is that we don't have a global set of rules that restrict the amount of speculation that can be done on sovereign debt at the financial markets, while finance is itself a global phenomenon, nor penalties for the banks when playing off one currency to make gains on another. Am I wrong about this?

Then, as I've pondered this issue before: how is eternal growth even possible? And what consequences does this cause for the regional environments and cultures?

In Italy, for example, a region the size of Lazio has been "cementified" in the real estate boom (commercial and otherwise) since the second WW, if we put all the awful buildings together that the so called geometra conjured in their demented minds.

Such that what used to be a beautiful landscape made famous and immortalized by the Renaissance masters, has become mutilated in recent decades, under the impetus of the real estate market and its killers the geometra. Apart from this, in Italy, for example, the automobile industry isn't producing new brands of cars, which is the proof that there's been a flight of investments to factories of other lidos (the Lido is a narrow island off of Venice in the Adriatic sea), which is indicative of the shift of production in this country to the immaterial economy of finance. This seems to me to be happening everywhere under the effects of neoliberalism. This means it's legitimate to ask the economic planners: excuse me, but where is the industrial plan?

Europe either has to grow itself out of the problem, as you say, or impose harsh austerity measures. Or a combination of both, though this is a difficult balancing act that the economists tell us is next to impossible. But under the present economic regime, where finance has replaced production, the immaterial for the material and, ultimately, the superfluous over the necessary: how are these conventional instruments of resolution going to supply the answers to the rebus of our age? Either way you create a situation in which the economy is an ineluctable machine that grinds its way forward, or else breaks down wrecking everything in its surroundings. Then there is the issue of trust between society and the political and economic leaderships, which is non-existent. Considering the game that's being played here, if the sacrifices strike only the usual suspects, then the consequences would be disastrous.

So we seem to see this only as an economic problem that can only be worked out within the structure of finance and fiscal policy, and through the economic policies, when in fact it is a social problem of immense proportions.

One for which if we don't radically rethink the economy, I can't see how the European Union, based exclusively on currency and finance, is better for the countries and societies that make it up.

 

[rhubroma]

On a different note the protesters in Tahrir square, Cairo, were gassed with tear gas spiked with nerve agents. The photos in the dailies show one protester holding up the canisters used by the Egyptian military on the defenseless crowds on which can be seen: Made in the USA.

The so called Arab Spring in Egypt, therefore, doesn't seem to be amounting to a real revolution, which causes a radical restructuring of an economic, political and social system. Rather the crowds initially only wanted to dethrone a dictator and a system that was based upon institutional corruption. But they didn't have a plan for after Mubarak. Consequently, in this situation, the secular groups needed to rally among themselves and fund, for example, the aid in the form of shelters and soup kitchens that the poor Egyptians rely upon to survive. But this was done instead by the Muslim Brothers who, therefore, have gained an enormous consensus.

Then the military leadership has replaced one despotism for another.

Meanwhile the lay and democratic reforms that many Egyptians desire, seem ever more elusive and beyond their reach while they continue to endure the barbarism of the soldiers.

 

[ramjambunath]

So far, I believe that the revolution in Egypt has been a failure as the void left by Mubarak's overthrowing was inexplicably filled by the defence forces. As a country with no democratic institutions, the first step may have been to set up such institutions and as past records from around the world have shown, the military is never a body of the government which has pressed for democratic reforms. If anything, it has done quite the contrary. This is where Libya's interim civilian govt on the face of it seems more constructive interim than Egypt's, although the Libyan interim govt has many problems of its own.

I don't know if we can write off the Muslim brotherhood even before they have taken power. It is known that the party is an Islamist party but citing examples from around the world, specifically from my neck of the woods, parties with a non-secular outlook does not necessarily mean that there may be no development in the country and neither does it mean that minorities would be neglected (of course, this would need strong constitutional safeguards for implementation). Tunisia's largest party the Ennahda party is also an islamist party but upto this moment there have been no major issues with the smooth running of the elections and even the assembly is now functioning. It may be that the Muslim Brotherhood's role could be feared because of it's extremely important strategic location and the role that Egypt has played in the past. Of course, things could go very badly but it can't be worse than the status quo.

In other news, India's agriculture minister Sharad Pawar was slapped and a kirpan (a small dagger) was waved by the attacker. Pawar has a littany of allegations of corruption against him.

More Indian news, reports suggest Maoist leader Kishenji may have been killed in an encounter in West Bengal. Official confirmations are awaited.

 

[ramjambunath]

Wrong way to protest, no matter what
http://www.youtube.com/watch?v=Pd8udZrg69s
I thought India was a tolerant country which is clearly not true in many parts of urban India. Very regrettable comments.

Iran 'arrests 12 CIA agents'


Netanyahu: Arab Spring pushing Mideast backward, not forward

Prime Minister reiterates initial estimate of Arab Spring, according to which widespread popular unrest is a 'Islamic, anti-Western, anti-liberal, anti-Israeli and anti-democratic wave.'

http://www.haaretz.com/news/netanyahu-arab-spring-pushing-mideast-backward-not-forward-1.397353

Disturbing details from Khmer rouge trial

 

[redtreviso]

 

[Semper Fidelis]

I have a friend who works for the tax department who forwards me hundreds of e-mails with similar content. What is disturbing is that much of this is true.

Disclaimer: I work tutoring immigrant (Muslim) kids, the goal of the association is to help them succeed in their studies to better integrate.

Hey Frenchfry nice to hear from you!

Doing that type of work is admirable.

Yes I receive much spam from coworkers and "friends" who spew far worse. Worried with freaking turkey's and butterball? WTF this shows how dumb down everything has become.

I am waiting for redtreviso to give me some more FoxNews updates!

 

[redtreviso]

The idea for foxnews started with Nixon wanting his own Pravda

http://youtu.be/g8UyFCVOGKI

 

[frenchfry]

Hey Frenchfry nice to hear from you!

Doing that type of work is admirable.

Yes I receive much spam from coworkers and "friends" who spew far worse. Worried with freaking turkey's and butterball? WTF this shows how dumb down everything has become.

I am waiting for redtreviso to give me some more FoxNews updates!

It could be, but I do it for the cash.

 

[Captain_Cavman]

The other day, one of the Eurozone countries tried to sell 6Bn Euros worth of debt, you know, for stimulus spending or whatever.

Surely when there's trillions of debt sloshing around out there, they should have been able to offload a few measly billion?

But no, they couldn't. No buyers. Too risky apparently. And the country in question is...

Germany.


The party's over. The shutters have come down over the bar, the doormen are looking ****ed off and you haven't got enough for a cab home. Mind how you go, be careful not to slip on the vomit on your way out.

 

[ramjambunath]

India has opened it's retail sector to foreign investment- just what the country needs, a Walmart like behemoth to destroy the small level traders.