- Jul 4, 2009
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Re: Re:
...yeah I'm no economist either though I often play one on the interwebs, but I digress...... yeah that is a bit of a mystery ain't it.....
Cheers
movingtarget said:blutto said:....Stiglitz on the Euro, the EU, and brexit....nice read...
https://www.theguardian.com/business/2016/aug/10/joseph-stiglitz-the-problem-with-europe-is-the-euro
Why would well-intentioned statesmen and women, attempting to forge a stronger, more united Europe, create something that has had the opposite effect? The founders of the euro were guided by a set of ideas and notions about how economies function that were fashionable at the time, but that were simply wrong. They had faith in markets, but lacked an understanding of the limitations of markets and what was required to make them work. The unwavering faith in markets is sometimes referred to as market fundamentalism, sometimes as neoliberalism. Market fundamentalists believed, for instance, that if only the government would ensure that inflation was low and stable, markets would ensure growth and prosperity for all. While in most of the world market fundamentalism has been discredited, especially in the aftermath of the 2008 global financial crisis, those beliefs survive and flourish within the eurozone’s dominant power, Germany. These beliefs are held with such conviction and certainty, immune to new contrary evidence, that they are rightly described as an ideology. Similar ideas, pushed by the IMF and the World Bank around the globe, led to a lost quarter-century in Africa, a lost decade in Latin America, and a transition from communism to the market economy in the former Soviet Union and eastern Europe that was, to say the least, a disappointment.
Germany, however, holds itself out as a success, providing an example of what other countries should do. Its economy has grown by 6.8% since 2007, but at an average growth rate of just 0.8% a year – a number that, under normal circumstances, would be considered close to failing. (By comparison, the US growth rate in the same period averaged 1.2%.) It’s also worth noting that developments in Germany before the crisis, in the early 2000s – when the country adopted reforms that aggressively cut into the social safety net – came at the expense of ordinary workers, especially those at the bottom. While real wages stagnated (by some accounts decreased), the gap between those at the bottom and the middle increased – by 9% in less than a decade. And through the early years of the century, poverty and inequality increased as well. Germany is talked about as a “success” only by comparison with the other countries of the eurozone.
It is perhaps natural that the eurozone’s leaders want to blame the victim – to blame the countries in recession or depression or reeling from a referendum result – for bringing about this state of affairs. They do not want to blame themselves and the great institutions that they have helped create, and which they now head. But blaming the victim will not solve the euro problem – and it is in large measure unfair.
....funny who Stiglitz ends up calling the fools in this scenario....and it ain't the great unwashed...
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Very interesting article. I am no economist but one thing I never understood about Great Britain's role in the EU was why didn't they adopt the Euro currency if they thought belonging to the EU was such a good thing and why was Great Britain allowed to do this. To me they seem to have played a senior role politically along with Germany and France but they sort of had one leg in Europe and the other outside it. Just a thought.
...yeah I'm no economist either though I often play one on the interwebs, but I digress...... yeah that is a bit of a mystery ain't it.....
Cheers