The euro crisis hasn’t come back, it actually never left.

Correct. The markets seem intent on proving Keynes right again.

Oh, if only it were just the markets! See Ahamed’s book Lords of Finance. I can highly recommend it based on having just read through it once, as it gives some very relevant history that’s not easy to find in one place otherwise.

I’m also going to start re-reading it soon, partly to try to figure out why Ben Bernanke recommened it.

Some vultures are getting mighty rich.

“the votes in Germany to approve the bailout of Spanish banks, which was reiterated by the Eurozone, effectively reversed the results of the EU Summit by making it explicit that the Spanish government would be on the hook for the bailout funds, rather than direct injections into the banks themselves.”

Another Panzerfaustian bargain.

I’ve heard of the book. Will put it on my list.

Just looked it up on amazon and can guess why the Bernank rec it. It’s about the era on which he’s supposed to be such an expert.

I’ve read some of his papers on the Great Depression, and I’ve never seen such schlock work. Guessing he has to hide behind someone who knows what he’s talking about.

sometimes I really think the world has gone nuts. How is it these idiots think that cutting expenses will let them work their way out of this? But it is the same here in the states. Cut expenses and all will be well. Don’t any of the bright people know that those “expenses” go in people’s pockets that pay taxes? That unemployment will just keep getting worse and the riots will increase? Is this the thing the smart folks call the neo liberal world. What does any of this have to do with liberalism? Answer: it doesn’t.

Over the last three years I have lost all respect for PhD economists, especially the ones trained since the seventies. They have all aligned with that bullshit they call neoliberalism.

Oh these assholes will tell you they adhere to Keynes. That is their own rather “special” interpretation of him.

I never had any respect for PhD economists.

I’m pretty much self-taught, though I did get an ABD from NYU bc I needed creds. Every course I took was worthless except for industrial organization (competition, cartels, monopolies, antitrust, etc) which is no longer taught, though it is what I thought should be the key to the future of economics were the profession honest. I.E. study the specific nature of market imperfections and try to figure out the least harmful way of overcoming them.

I waste my breath.

One story. In my first or second year as an RA for a Harvard prof putting together what became an 800 equation econometric model of the U.S. economy (easy peasy to understand & I could explain it to you in about a paragraph), I ran into the notorious Martin Feldstein, already a full prof & later to serve in the Reagan admin. Got his number right away (I was prolly 23 or 24), and it was negative.

Hey, be careful!

I bet you did read him pretty quickly. That is your thing. I took a few eco courses in college and at one time thought these guys were pretty bright. But the shine wore off pretty fast. I lost it completely in more recent times. I can’t even read Dean Baker most of the time. And they say he is on our side.

I never was into econometrics or any of the math side since it seemed phony. Plus I admit to being math challenged. So I just ride solo.

I never had any respect for PhD economists. I’m pretty much self-taught, though I did get an ABD from NYU

Geez, I had to get a PhD to not have any respect for them. How precocious of you!

Although this is not about me, I gotta admit you’re right that I see thru BS pretty quickly.

It’s not just economics professionals I have no respect for, but professionals in almost any field I get to know a little about.

Left a few barbed comments on masoninblue’s column today on Zimmerman about lawyers (& couldn’t help adding one about docs).

To look at it from Zinn’s POV, ‘professionalism’ is all about putting yourself above everyone else & trying to rake off extra dough or power as a consequence.

Think of the history of “medicine.” Like bleeding patient. Like, well, um, ya know, did they ever, ya know, OBSERVE anyone getting better after bleeding. Did they keep track of the percentage. etc etc

But they knew BLEEDING was the thing to do.

We are now in the era of economics bleeding the patient.

You must have noticed by now that I’m a baby step ahead of the crowd. I was born 2 years before the post-war baby boom officially started. Gave me a leg up on all the great trends.

P.S.

I’m math challenged too. Stopped at frosh calc, which I nearly failed. Ditto grad school econometrics. (Great story therein.) You don’t need to know math to understand macroeconometric models.

They’re all about starting with consumer demand and iterating (3-4 times if you’ve got the equations entered efficiently) until the model converges.

I admit to peeing my pants when I thought I had to know matrix algebra, but I was so low on the totem pole, someone just told me what to do, I did it, and the application was intuitive.

The models are nonlinear so are solved by iteration not matrix algebra. Start with last quarter’s values for early unknowns (personal income) and keep cycling thru until this cycle’s results are within too small a diff from last cycle’s to matter.

I am pretty close to the same fellings. That Zinn thing is dead on. I would agree on the bleeding thing and raise you a few priests and a church.

Beat you on that. I got through the whole first year calc. No fucking idea how, but I did.

Maybe the markets are proving Marx right!

So how do you feel about the liberal econs like Krugmann and Baker?

From what I’ve read of that gent, he was a bright fella. Too bad he became outlawed. We dont like to listen to hard things, maybe they are true.

In my old age, I’ve learned to be a little less harsh. I grade on a curve. I give them each an A for values, a B for their positions, and a C for not agreeing 100% with me.

Like I told eCAHN once, she thinks the glass is empty, and I think it’s 10% full. LOLOL.

Someone has to loan Spain the money to cover its deficits. Same as Geece, Italy, France and everyone else. Perhaps everyone here should buy Spanish bonds. A couple of hundred billion over the next year could allow them to spend as they were two years ago and wipe out austerity. Anybody here have a few hundred million to get the ball rolling?

Now the large but not out of control deficits of the various EU countries post the 08 crisis was financed by Spanish banks, other EU banks and various investors. It was fairly easy as post world stock market craters and US real estate crash the trillions of ‘investment’ money held by the top 10% worldwide badly needed a home. Sovereign debt looked good. But Greece and Spains non austerity spending post 08 did not bring self sustaining growth, just as it didn’t here. How many years do countries have to wait for this growth? Everyone knows down to their bones that the prospects of such growth is receding. More deficit spending will, one may posit, prevent or mitigate the deflationary spiral that is evident in Britian’s growing deficit despite falling expenditures. But remember, since your going to loan Spain that few hundred million, that doesn’t mean they won’t need another few million from you in 14, then 15 etc. etc.

One more thing. Much of that money you are lending them will go to pay off old lenders in circle jerk fashion.

I know I know, you want the ECB to lend Spain the money by printing it to pay for Spanish bonds. It is assumed it makes no difference if they don’t pay it back because after all, the ECB just printed the money, so what is actually lost? Well central banks actually have balance sheets but I won’t go there but insted just say that if the key to wealth has always been just printing money then 10,000 years of civilization mostly under severe austerity was simply a mistake. Right.

You might like this from Michael Hudson. It is kind of dense for me but he talks a good deal about neo liberalism. That’s my new buzz word.

I got thru it, but just barely. Also no idea how.

The econometrics story:

NYU, ca 1980. Prof James Ramsey. I had been working on Wall St. for about 8 years and more than a decade as a biz economist.

I was lost first class.

Round about middle of term, some poor frustrated student asked why we needed to know this (it was a theory course, not applied, at which I would have excelled). Ramsey replied: to get a job. I blurted: suppose we already have a good job. He replied: to get better pay. I blurted: suppose we already make more than you do.

Back to chalk & blackboard.

Final was take home, open book. I went to library after 6p-8p class to use 2 ref books on reserve. They weren’t & while I walked, some one else had sprinted & borrowed both from the shelves. The books were out of print. I called friend who taught at Columbia. Asked him to run to library & take out Columbia’s copies, which I got.

Even with the books, I couldn’t figure out the exam. I copied stuff at random that seemed like it might be relevant.

Don’t remember what my grade was. Prolly some kind of B, bc of curve.

Whole episode was disgusting exercise in self-preservation. Have no idea what other 20+/- students did to get thru final.

If one doesn’t lose respect for academia after such an experience, one has no connection to reality.

Sooner or later the peasants have to learn to like the taste of catfood as that will be all they’ll be permitted to eat

I agree on the values, but not sure I follow on positions. I would give them a C at best, but I’ll take your word for them. Maybe I will read Baker next time he posts.

Fair evaluation of the diff betw you & me.

I don’t expect others to share my strengths nor avoid my weaknesses in a general sense. That would be waay toO high expectations.

But I do expect the ‘experts to be at least pari passu, and on that they don’t pass your 10% rule. :-)

Thanks, I already saw it. Particularly this:

The term “neoliberalism” misrepresents and even inverts the classical liberal idea of free markets. It is a weaponization of economic theory, kidnapping the original liberal ethic that sought to defend against special privilege and unearned income. To classical economists, a free market meant one free of unearned income, defined as land rent, natural resource rent, monopoly rent and rent-extracting privilege. But to neoliberals a free market is one free from taxes or regulation of such rentier income, and indeed gives it tax favoritism over wages and profits.

Great stuff.

Nice story. I enjoyed it. You prolly got a good grade since you are so outgoing. Hard to put that down.

Let me put it this way. Had either been at the helm three years ago, we would be better off today. But YMMV.

Yes, he really laid out the case against these guys. He even suggests that whereas Obama is neoliberal, Mittens may not be — at least naturally — but that he will sell out as well. But we knew that. Same party different wings — D and R.

I agree with that.

True story.

Bought property in 1980. Found a BIG dump a couple of year later. 1981 calendar. Lots of empty catfood cans.

Asked Emmit, elderly ex-farm worker living in a shed next door, who did some outdoor work for us, what he knew about it.

Nothing.

Long story short. He was eating cat food, treated like POS, once part of ours, where he then resided. Not a tooth in his mouth.

Brohaha erupted. My husband got him out of jail (he loved it: shower, clean bed, 3 squares, heat, a/c) and into an old folks home where he died comfortably many years later.

Had either been at the helm three years ago, we would be better off today. But YMMV.

I’ve bc a minor observer of the too-little-too-late school. Came to hate it in the way back days owing to a bad personal experience.

So yes, my mileage varies. Too-little-too-late is IMO, worse than being just plain wrong.

Not sure I can articulate why. Opportunity cost is a large part of it. Once you miss the opportunity, by even a little, there is frequently no way to make it up.

That’s the context in which I’m thinking about the U.S. & Europe situation right now. Monetary policy is ineffective, and even if we could get assholes in power to accede to massive fiscal stim (prob=less than zero), I’m not sure we aren’t all beyond the point of no return, the econ hole we’ve dug is sooo deep.

Hudson’s rewriting history:

(Neo-)Classical Theory – Beliefs

Classical economists were not renowned for being a happy, optimistic bunch of economists (in terms of their economic thinking!). Some believed that population growth would be too rapid for the resources available (Malthus was a particular exponent of this view). If this wasn’t enough to depress the rate of long-term growth (and the rest of the population along with it!) then diminishing returns would cause further problems for growth.

They believed that the government should not intervene to try to correct this as it would only make things worse and so the only way to encourage growth was to allow free trade and free markets. This approach is known as a ‘laissez-faire’ approach.

Liberalism failed.

I think you are about right. There is no one looking to do the massive stimulus we need. So we are waiting for the corps to spend money. But why will they? Way back when we had that super 800b stim, some were saying we needed a good deal more. I think Christine Romer was one of them. But that time is gone.

Hudson concludes with this gem:

The result must be economic polarization, above all between creditors and debtors as in Rome. So the end stage of neoliberalism threatens a Dark Age of poverty/immiseration – most characteristically, one of debt peonage. And just as Rome’s creditor class and its predatory imperial expansion brought down the Roman Empire and reduced it to mere subsistence, so the combination of neoliberalism and neo-conservatism today seeks to globalize itself, spreading austerity even as it brings technological progress to sovereign debtors.

Except that one might say that neoliberalism and “neoconservatism” intentionally self-colonize and terrorize in order to outrun the fall.

In two sentences.

FRB out of ammunition.

Fiscal stim cannot be large enough even if will would be there, which it isn’t.

Easy peasey solution

Tell the f&*king banks and bondholders they’re not getting paid back.

Break up the TBTF banks.

Prosecute and throw the frauds and crooks in jail.

We should have done this in 2008 rather than bail them out. Much cheaper and breaks up the political power of the banksters.

This is a repeat of the early 20th Century. It’s amazing to see how the same themes nearly repeat. I’m amazed when I run across these time warps. Do these people not have books?

See the ‘Efficiency Movement‘ which was good as reform and rooting out corruption but as applied as Taylorism people became waste. Some socialists embraced fabianism, and now we have Six Sigma methods being applied to schools, tragically. The jackals always get in and twist it up for their gain. FDR had some help, Louis Brandeis talked about the curse of bigness, and said that an inert people were a threat to democracy as much as the loss of free speech. Mayor La Guardia crushed Tammany Hall.

We knew when the banks were rescued and bailed out over and over again without putting back the old rules and prosecuting the frauds that the market would crash again. The same hubristic technocrats are still in charge.

Obama and his progeny are going to be eternally sorry for patting him(self) on the back for ‘rescuing’ the wall street instead of the rescuing economic system from the financialist parasites.

And it was trickle down stimulus.

Anti trust needs to be enacted, bust up Big corps, Banks, Media. Energy better than was done in pre and post WW2. The owners and controllers should be impoverished.

Start with Walmart, Monsanto, Big Ins. and Big Pharma and get the Governors and the Fed out of the colleges, Universities, and Schools.

Does Europe have someone who is like our Fed? Someone like Greenspan or Bernanke who will quietly screw up their economy, year after year, and then, after he or she has lost all public confidence, is replaced by another stooge? Damn, is it just me or has anyone else noticed that the European conservative and conservaDem politicians are just as hellbent on destroying their own economy as ours? Viva la Globalization!

And they did it with our help, David. They did it with the help of big borrowing institutions which had rigged the system. Think of it as predatory lending writ large because that’s where the profits are being made by banks which turned into gambling casinos and the house wins all the time. Do read Ellen Brown’s latest piece about Libor – all sorts of suits are now being mounted, even right down to the housing scam, against these ‘financial’ institutions.

It’s going to be played as Europe dragging us down. It’s just the reverse.

Incidentally, names are being named in Libor, for the market traders which participated in the interest rate rigging – and what do you know, they’ve left town ahead of time and are currently employed in the Swiss banking system.

Hubristic and cynical technocrats. They have become capitalism’s one-time enemies.

Who were the enemies in the cold-war? You were.

And they did it with our help

That’s the way American power worked. How could “ignorant” accomplices and compradors not see it coming?

Where are the Christians? ( ie, forgive us our debts as we forgive our debtors.)

I know an awesome way to fix the European debt crisis. It is a solution that has always worked throughout the entirety of human history whenever debts become too burdensome:

Wipe out the debt. All of it. Everyone who owes anything is free and clear. Simple as that.

It has always worked before to restart economies and it *will* work again in Europe. And America. The only question is how long the corrupt bureaucrats can stave off this eventuality in service to their foul masters.

Aren’t Swiss banks owned or operated (strong armed into submission) by the Saudi gov.?

Oh yeah, I’ll check out that Brown piece. Thanks.