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I certainly agree with your last paragraph, but don't agree with you on Germany's actions. Supporting the independence of the ECB, especially when it has historically acted in Germany's interests, is just one thing. Opposing resolutely any changes to overall policy that might provide mutually beneficial recycling of Eurozone member state surpluses into Eurozone member state deficit countries in the form of profitable investments, the profits from which would, after all, flow first to the creditor states, is just one problem. Due to German intransigence monetary policy by the ECB is the about the ONLY tool available and the ECB is still strongly constrained about how extensively it can use monetary policy and other 'tricks' like QE. But then, who is the champion of economic sanity for the Eurozone? Varoufakis at least tried.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Feb 8th, 2017 at 03:50:12 PM EST
[ Parent ]
I mean that so much of a recycling project makes such sound economic sense that it is folly that Germany is not pushing it in its own self interest. That is because of the consequences of playing to least common denominator prejudices of the German people by Merkel et al.

As has been pointed out, making retirement health care equally available in all countries for citizens of any state could enable Germans to retire in warmer climates where it is cheaper to live while still receiving the same quality of health care. And the provision of that health care in countries such as Spain, Italy and Greece would be a great boon to their economy, as would the expenditures of the retirees in their countries. Much like New Yorkers retiring in Florida.

This ain't rocket science. It is entrenched tribal stupidity become national policy.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Feb 8th, 2017 at 03:56:14 PM EST
[ Parent ]
Of course it is.  And it has nothing whatsoever to do with the merit of Navarro's argument about the euro's value.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Wed Feb 8th, 2017 at 09:52:28 PM EST
[ Parent ]
Where have I endorsed Navarro's views? I audited his intro macro course on line. I wanted a 'mainstream' overview of macro as a base. That I pretty much got. But I disagreed with him on many of his opinions, as is evident in my first post on the subject and my comment about his views of China.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Feb 9th, 2017 at 03:24:06 PM EST
[ Parent ]
You said you endorsed my last paragraph but not my commentary on Germany, and you then proceeded to try to rationalize his shallow argument, ARG.

His take is not "mainstream" -- and I strongly question how "mainstream" (whatever the hell that means (which is presumably "somethingsomethingsomething 'neoliberal'") that audited class was.  Note, too, folks like Krugman jumping in to call him an idiot.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Sat Feb 11th, 2017 at 12:40:45 AM EST
[ Parent ]
Well, he got his degree from Harvard. That probably explains a lot. And he is a LOT more conservative than any of us here. Sadly, he does seem to me to fit into "Mainstream US Economics". After all, Chicago and Harvard are two of the chief gatekeepers of what is allowed into that 'mainstream'. (I sometimes visualize a stream of piss.)


"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sat Feb 11th, 2017 at 01:52:01 AM EST
[ Parent ]
Harvard is no such thing, and Chicago hasn't been for 20 damned years.  Harvard is basically a laughingstock.  It has never been of much importance to "mainstream" economics -- and that goes back to Schumpeter's homophobic babbling on Keynes.

We've been over this a hundred times now.

Lots of stupid people graduate from Harvard.  There's a reason this fucking moron teaches at Irvine and has to grab onto Trump's pant leg when even quite right-wing economists like Prescott endorsed Hillary.

Stop setting up straw men.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Sat Feb 11th, 2017 at 05:45:23 PM EST
[ Parent ]
You sound as though your view of the economics profession is dominated by ad hominem invective, though I doubt that is actually the case.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sat Feb 11th, 2017 at 06:18:37 PM EST
[ Parent ]
No, my view, as is my view on most professionalized fields, is based on my own observations and listening to the higher-ups who have credentials and stuff.  It just so happens that I'm a bit more qualified to evaluate who the higher-ups are in this field.

I don't listen to morons like Gwyneth Paltrow for views on Mainstream NutritionTM either.  For the same reasonI don't ask the kid at the cash register at McDonalds how to fix a transmission.

You don't know what econ is.  It's a running theme with you, ARG.  You latch on to these stupid fucking terms like "mainstream" and "neoliberal" and all of this trash, and you audit some idiotic class where some moron confirms all of your prejudices, and you go babbling about "What Econ IsTM".

It's like that Australian who wrote Debunking Economics but couldn't do basic fucking algebra.  Steve Something.  And when you point out to Steve that his model goes to shit when you note he did the derivative wrong, and he ignores that and instead goes babbling about how Paul Krugman hurt his feefees.

Be better.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Sun Feb 12th, 2017 at 01:18:08 AM EST
[ Parent ]
It is true that I am not an economist. I have become a student of economics, especially the history of economics, economic thought and its role in intellectual history in the USA. I am hardly alone in the world in my views on the current state of economics. The whole heterodox end of the spectrum is well aware of the same deficiencies of which I complain and their views inform mine: Solow, Colander, Stiglitz, Hudson, Jamie Gailbraith and his father before him, etc., etc.

And then there are the terms neo-liberal and 'mainstream economics' about the use of which you complain. As you say, we have been through this before. On FB we had a long discussion about the term 'neo-liberal' with you claiming I didn't understand what it was, my stating the commonly accepted definition and you agreeing that that was exactly how you defined it.

I had not wanted to press the issue, but, as you have, I will proceed. What I see is you not liking the term and evading the meaning. This is because it applies too closely to you and your views, IMO. Your champion in the '16 elections was Hillzilla and you have been very critical of those of us who complained that she did not actually support progressive policies. Nor do you want to accept any real inquiry into why she lost. To you it is clear that that is because of Bernie supporters.

The Clintons are the US equivalent of Tony Blair: US neo-liberals who abandoned unions and, with unions, the working class as such. IMO, they did good work on a lot of serious social issues from race to LGBT, but I don't see abandoning economic issues as a feasible path to electoral dominance. Even Bill Clinton's slogan was "Its the economy, stupid". Had she been more convincing in her adoption of Sander's proposals after the convention she could well have carried WI, MI and PA. She didn't turn out enough of the people Sanders had energized.

Then there is your anger. "Get out of my god-damned way.  They're in." I understand being angry. But the intensity of your anger has nothing to do with the validity of your arguments. That you act as though it does is a problem for you to deal with, not an argument. Yours is not the only opinion or the only ego to be offended by the outcome of the 2016 election. People can and do disagree with you on many points. Spend more time trying to find common ground with opponents and less on trying to de-legitimize their opinions and the comity of your comments will improve.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Feb 12th, 2017 at 11:03:03 AM EST
[ Parent ]
How on God's green Earth are Solow and especially Stiglitz heterodox?  They're both Nobel laureates, FFS.  Stiglitz won his only 15 years ago, back when RBC was the dominant macro theory.  This is what I mean:  You don't ac tally know what "mainstream" is in econ.  It's just a buzzword.

You stated the common definition of neoliberal.  We sorted out the criteria via (I think) Wikipedia, and I agreed.  You then applied it to Hillary, who met all of one of the criteria.  And when I pointed this out, you dodged my comment and undoubtedly babbled about The ElitesTM.

Now on this:

This is because it applies too closely to you and your views, IMO. Your champion in the '16 elections was Hillzilla and you have been very critical of those of us who complained that she did not actually support progressive policies.

Small problem here:  I voted for Bernie.  But, by all means, knock those straw men down.

Granted, I did so mostly to help send a message to the Clintons on foreign policy grounds, because Hillary is too hawkish.  I also voiced skepticism of Bernie's ability to win, because I knew Bernie had skeletons in his closet that Hillary wasn't attacking him on -- because she knew she had him beat and didn't want to harm party unity.  And because it was clear Bernie was basically the dog who caught the car.

This all seems perfectly reasonable to me.  They were both lousy candidates, and I had no champion in that race, so I voted practically.  The closest thing to my champion was the guy they were running to assume office behind.

So don't put words in my mouth.

As has been told to you -- by me, Izzy, others -- again and again, we agree with you in large part on Bill Clinton.  The Blair analogy is quite right with respect to Bill.  But The ClintonsTM are two different people.  They always have been.  You do understand that Hillary Clinton is allowed to have her own views that may contradict her husband's, right?

And we have pointed out to you, numerous times, the differences in policy proposals.  You assert The ClintonsTM lack of support for unions.  I don't know why.  And you fail to reckon with the obscenely-obvious issue that the very people you claim The ClintonsTM have fucked on that are the same people who voted for Ronald Reagan.  You further ignore that and assert that working-class whites are right to lash out, which is an utterly irrational argument.

As for the last paragraph -- yes, people are free to disagree with me on any point I try to make.  All I ask is that the disagreement be substantive and not simply moving the goalposts or veering off into utterly-irrelevant assertions.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Sun Feb 12th, 2017 at 06:30:04 PM EST
[ Parent ]
I included Solow and Stiglitz as they are highly critical of the status quo in economics. Solow and Colander both testified about the problems of the dominance of limited views of economics before a House subcommittee in 2010, both being especially critical of DSGE and it being the only model for which Fed funding was available for research. While having Nobel prizes they have been willing to publicly criticize much of the rest of, for lack of a better term, 'mainstream economics'. There are 'top journals' and those journals are or were recently controlled by nominees of institutions with views whose implications soothe the prejudices of very wealthy donors to their universities - the insane 'new classical' views of Robert Lukas, currently emeritus professor at Chicago, described by Greg Mankiw of Harvard Mankiw as "the most influential macroeconomist of the last quarter of the 20th century." etc. And the overall prestige of Harvard compensates to a degree for any lacking in their economics department.

Within the professional lifetimes of current economists, such as Perry Mehrling, it was necessary for Columbia to accept published monographs as the basis for his PhD, as he could not get his work on money and banking published in 'top journals'. But you can dismiss this if you will. I cite it as Mehrling was the one from whom I learned about money and banking. And I see the stranglehold that such figures, along with the practices of the Fed have on what is acceptable in the economics profession as being very detrimental to what our society needs to do to create a livable and sustainable society. This might not affect you so directly as you are not currently on an academic track.

Wait too long for needed changes and the very possibility of such change can be eroded. That is what happened when Trump was elected. Had Obama even done what the Justice Department could do to bring Wall Street executives to account, that might have changed popular perceptions and the outcome in 2016. On the other hand, I appreciate Obama's restraint on foreign policy, especially as contrasted with Hillary. Hillary certainly is and has been her own person. In this election she might have done better to listen more to Bill and less to Mook and Podesta. And while having control of the DNC almost as an inheritance and Hillary's use of the DNC did stymie Sanders, that was and is indefensible as a practice for primary elections. And it did not work out too well this time.

Twice in the last eight years the selection of very centrist Democratic candidates for President has resulted in enormous missed opportunities. In 2009 we could have reset regulation of Wall Street to an updated version of what FDR bequeathed, but Obama was never going to do that. Opportunity missed. Then there is Sanders in 2016. Another opportunity missed. Are we ever going to learn? I hope so for your sake, as you might not be able to retire in place in your current home if climate change continues to exceed generally acceptable expectations. At least you are on the Gulf coast. The Atlantic coast will be worst and soonest hit.
   

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Feb 12th, 2017 at 08:08:38 PM EST
[ Parent ]
Stiglitz and Solow are not criticizing the mainstream academic school of thought. They are calling out the overtly partisan hacks that even other mainstream scholars are uncomfortable with.

This puts Stiglitz and Solow outside the mainstream culture of economics, which doesn't police partisan hackery as long as it is politically correct partisan hackery. But it does nothing to put them outside the mainstream research tradition.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Feb 13th, 2017 at 07:14:52 PM EST
[ Parent ]
And that distinction between culture and research tradition is vital. IMO, the chief reason we don't see such critiques more often is the high price so many can be made to pay for offending the interests of wealthy sponsors of self serving theory, from J.D. Rockefeller to the Koch Brothers and a whole bunch more. It is the results of those wealth serving pressures that economics resembles the fashion industry more than a scientific discipline and it is that with which I profoundly disagree. It is pressure from wealthy donors that keeps the public understanding of economics confounded and that allows the perversion of economics to do actual harm to the broader society. For instance, see Varoufakis, A Most Peculiar Failure, where he shows the way in which weak and strong claims for unprovable nonsense has marked the public discourse over economics for decades - actually, for more than a century.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Feb 13th, 2017 at 08:00:32 PM EST
[ Parent ]
And Thomas Piketty is well within the research tradition of economics, which is why Capital is so important. Among other things it makes things more difficult for the partisan hacks, as you term them. Not that they ever seem to suffer consequences, witness Reinhart and Rogoff. Growth in a Time of Debt simply did too great a service to the donors' interests for the authors to ever be seriously discredited.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Feb 13th, 2017 at 08:09:36 PM EST
[ Parent ]
Joseph Stiglitz -- Wikipedia, the free encyclopedia
Stiglitz's most famous research was on screening, a technique used by one economic agent to extract otherwise private information from another. It was for this contribution to the theory of information asymmetry that he shared the Nobel Memorial Prize in Economics in 2001 "for laying the foundations for the theory of markets with asymmetric information" with George A. Akerlof and A. Michael Spence.

Before the advent of models of imperfect and asymmetric information, the traditional neoclassical economics literature had assumed that markets are efficient except for some limited and well defined market failures. More recent work by Stiglitz and others reversed that presumption, to assert that it is only under exceptional circumstances that markets are efficient. Stiglitz has shown (together with Bruce Greenwald) that "whenever markets are incomplete and/or information is imperfect (which are true in virtually all economies), even competitive market allocation is not constrained Pareto efficient". In other words, they addressed "the problem of determining when tax interventions are Pareto-improving. The approach indicates that such tax interventions almost always exist and that equilibria in situations of imperfect information are rarely constrained Pareto optima."

Thus Stiglitz used a more strict, mathematical research tradition, and confronted the orthodox culture.

And currently, he is weighty activist in his critique:

Joseph Stiglitz Says Standard Economics Is Wrong. Inequality and Unearned Income Kills the Economy -- Evonomics.com

by das monde on Tue Feb 14th, 2017 at 12:54:33 AM EST
[ Parent ]
First of all, it's "Lucas," not Lucas.  Second of all, he hasn't been anything resembling "mainstream" for a long-ass time.  Shit, Lucas has become a laughing stock by the time I was an undergrad -- and at a university notoriously infused with Koch money at that.

Greg Mankiw is a half-decent mathematician masquerading as a serious economist.

Once again, "mainstream" isn't whatever gibberish you read on some idiot blog.  If you want mainstream, read Krugman and you "heterodox" friend, Stiglitz.  Both of whom are more representative of the mainstream that these people you keep bringing up.

Stiglitz's consumption function was the foundation for both his and Krugman's Nobels.  Solow's growth model is literally the first model they teach you in every Macro 201 class.  We in "not even wrong" territory here.

As for the Hillary/Bill/conspiracy theory on the DNC and Bernie bit -- now you want her to listen to Bill, the Unholy God of "Neoliberalism".  Helpfully demonstrating what a bunch of horseshit the whole conflict was the whole time.

Complete gibberish.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Tue Feb 14th, 2017 at 02:51:56 AM EST
[ Parent ]
...adding:

God damn, that comment from me was like an Autocorrect Holocaust.  Sorry.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Tue Feb 14th, 2017 at 02:55:33 AM EST
[ Parent ]
You needed this control shot...

Nothing about a consumption function on the Wikipedia page on Stiglitz.

What is taught in freshman courses is not necessarily mainstream in policy building. Economics is a motley subject, with a lot of speculative assumptions, ideological deductions, hand waving with graphs and some serious math, mechanism design. The same economist can easily produce something standard for a freshman course and a theory against prevailing operative streams.

by das monde on Tue Feb 14th, 2017 at 04:58:58 AM EST
[ Parent ]
...adding:

And in case Steve ever reads this.  Q ≠ q.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Sun Feb 12th, 2017 at 01:20:57 AM EST
[ Parent ]
Yes, Germany is on a self-destructive course, not exactly a first.  They can't get over their inferiority complex and hoarder mindset.  The folks who run the country have the same mindset as the folks who used to insist that the DM5 coin keep being minted because they wanted to get change in "hard money," not paper, even though the coins were just steel.
by rifek on Thu Feb 9th, 2017 at 02:38:46 PM EST
[ Parent ]
What does any of that have to do with Navarro's argument that the Germans are artificially undervaluing the euro?  Those are all internal eurozone trade issues.

Look, it's a floating currency.  Navarro's an idiot.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Wed Feb 8th, 2017 at 09:51:34 PM EST
[ Parent ]
I never claimed that Navarro was correct on that. Just that, overall, the effect of net German policy is to vastly favor German interests over those of the rest of the Eurozone. And floating currencies have to be understood in a broader context than just monetary policies. Do you argue that, were Germany to repudiate the Euro and reestablish the Mark that that mark would be valued at about where the Euro is today?

Few here would, I think. The existing situation with currency value and the competitiveness of the various national economies comprising the Eurozone is highly complex. Competitiveness can be rigged in a variety of ways. Germany does so in no small part because of the Hartz 2 agreements and in ways that also disadvantage the average German.

I did not see enough actual economic analysis from Navarro to tell what his position on German currency manipulation was. Perhaps I misread. But German exports are undervalued compared to what they would cost were Germany to have its own floating currency and Germany has been quite clever in crafting this arrangement to the benefit of German elites.

A more accurate statement would be that Germany has, effectively, managed to undervalue its exports, largely at the expense of its Eurozone partners. The problem I have with that is that it doesn't pass the smell test for me and a lot of others, mostly the victims.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Feb 8th, 2017 at 10:10:16 PM EST
[ Parent ]
To be clear, the "that" in the last sentence of the above comment refers to what Germany has accomplished for itself economically via the Euro, the Eurozone and Germany's resulting economic policy and political efforts.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Feb 9th, 2017 at 03:28:36 PM EST
[ Parent ]
Revenue sharing not only makes sense, it is or course essential.  Try to imagine the US existing without it.  But if it had been built in from the start, Germany's interest in creating the open EU would have been, shall we say "greatly reduced."
by rifek on Thu Feb 9th, 2017 at 02:31:36 PM EST
[ Parent ]

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