Two other views on Greece and the US
Mark Thoma at Economist View points us to Stiglitz and Rogoff on Europe’s Financial Troubles:
Joseph Stiglitz:
Can the Euro be Saved?, by Joseph E. Stiglitz, Commentary, Project Syndicate:
…Fixing the exchange rate and delegating monetary policy to the European Central Bank eliminated two primary means by which national governments stimulate their economies to avoid recession. What could replace them? …
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One proposed solution is for these countries to engineer the equivalent of a devaluation – a uniform decrease in wages…
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There is a second solution: the exit of Germany from the eurozone or the division of the eurozone into two sub-regions…
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There is a third solution, which Europe may come to realize is the most promising for all: implement the institutional reforms, including the necessary fiscal framework, that should have been made when the euro was launched…
Kenneth Rogoff:
Europe finds the old rules still apply, Commentary, Financial Times
The eurozone experiment was, in effect, an attempt to speed up the graduation process through the carrot of the single currency and the stick of harsher bail-out rules. Instead of having to demonstrate fortitude and commitment through decades of surpluses and declining public debt levels (as for example, Chile has done), euro members were allowed to have their cake and eat it, too. … Greece could run up its public debt to more than 115 per cent of GDP. Even more stunning a figure is Greece’s total external debt to GDP, which is more than 170 per cent, counting both public and private debt. Prof Reinhart and I find that most emerging markets run into trouble at external debt levels of merely 60 per cent of GDP. …
[snip]
In our book on financial history, Prof Reinhart and I find that international banking crises are almost invariably followed by sovereign debt crises. Will the euro prove to be a firewall against this process, or a debt machine that fuels it? It is going to be extremely difficult for some of the peripheral eurozone economies to escape without large-scale defaults on their massive private external debts, public external debts, or both.
Beware of Greeks accepting gifts ?
Greeks hell!!!! The DOW just fell 1,000 points in 30 minutes. At least it did recover 6-700 points. Nah!! We’re not on the same path.
Cactus, as I have been saying, this administration may well prove the exception to your theory, and might disprove (or at the very least question) keynesian theory.
I confess. It was me. I tried to sell my 300 shares of P&G and hit million instead of shares. False alarm. Sorry for the panic.
***The DOW just fell 1,000 points in 30 minutes***
The short term cause of that seems to be that we don’t understand dynamic systems very well and the computer software used to control equity trading made a valient attempt to crash the equity markets. That’s probably patchable if not fixable. You have to admit, it may have been ill-found, but it sure was responded fast.
Trading overnight suggests that even if the lunatic High Frequency Trading systems are turned off the day end 3.2% drop might not be too far off. Nikkei -3.1%, Shanghai -1.9%. Overall, world indices seem to be off about 2% http://www.bloombergutv.com/stock-market/indices/world
***might disprove (or at the very least question) keynesian theory.***
Not impossible. But for the time being, Keynesianism is the only approach we have that hasn’t (yet) proven to be utter nonsense. It might work. On the whole, I think you better pray that you are wrong because there is no plan B.
***The DOW just fell 1,000 points in 30 minutes***
The short term cause of that seems to be that we don’t understand dynamic systems very well and the computer software used to control equity trading made a valient attempt to crash the equity markets. That’s probably patchable if not fixable. You have to admit, it may have been ill-found, but it sure was responsive.
Trading overnight suggests that even if the lunatic High Frequency Trading systems are turned off the day end 3.2% drop might not be too far off. Nikkei -3.1%, Shanghai -1.9%. Overall, world indices seem to be off about 2% http://www.bloombergutv.com/stock-market/indices/world
***might disprove (or at the very least question) keynesian theory.***
Not impossible. But for the time being, Keynesianism is the only approach we have that hasn’t (yet) proven to be utter nonsense. It might work. On the whole, I think you better pray that you are wrong because there is no plan B.
European Union uses Music to help heal conflict in Greece:
The song “Let the Sea Roar” makes spalsh in Europe. It’ free for listening to and reinvigorate the minds direction for purpose: http://eve-n-tide.com/ Paul Dresser