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And when your creditworthiness is decided in London, being prudent with debt is not geostrategically silly. We worry about our energy coming from Russia, but we should worry about our money being valued by the Anglos. Wind power
Remember; it's not like investors always even care about the rating agencies. Japan was downgraded years and years ago, and their sovereign rates have been falling ever since. When S&P downrated the US, US bonds soared, while it was the stock market which went into the toilet. Peak oil is not an energy crisis. It is a liquid fuel crisis.
The lack of due diligence should not be a problem if the stupid money is punished (and not bailed out - this is where financial capitalism will break), but the reliance on monetising and valuing everything through the prism of finance brings short-termism, the "there is no society" mindset and, in the absence of a strong State, runaway greed & al.
So "anglo" is a short cut for the Reagan/Thatcher ideology, but there are roots for it where it came from. Wind power
Heh. Everytime the guys from the bank come and suggest we buy this or that corporate bond (I help manage some research stipend money) and say that it has this or that rating, I give them a look and mutter something about MBS's or CDO's or the S&P downrate of the US, and then they look rather sheepish. :) Peak oil is not an energy crisis. It is a liquid fuel crisis.
I've always found it amusing that the Royals were generally fans of Maggie when her markets-ueber-alles approach was directly contrary to every interest and tradition of the monarchy.
There's enough idiocy on display in Brussels, Frankfurt and Basel without needing to blame the City.
If the City (and Wall St) impinge on the Eurozone situation, should that be ignored? When it's pointed out that either rating is a superfluous function, or should not be in the hands of private City/Wall Street corporations, the response is invariably, "the rating agencies didn't cause the euro crisis". No, but they have arguably exacerbated it at every turn by publishing (often correct) analyses and consequent rating changes with an acuity and rigour that were so strikingly absent concerning American financial bubble-and-fraud in the lead-up to the first leg of this crisis. Is it absurd to find logical that US interests (and those of Britain, the GBP having been sidekick to the dollar for decades) lie in avoiding the loss, in the financial crisis, of the world-reserve-currency status of the dollar, and therefore in seizing an opportunity to weaken the relative status of the main contender for replacement? Or that global financial capitalism (to a considerable extent offshore but pre-eminently centred on New York and London, currently at least) abhors the regulatory tendency the EU represents at world level?
Why place a theoretical ring-fence round continental Europe (where, I'm not denying, our "leaders" bear huge responsibility for driving us over the cliff) and ignore global power struggles? If, tomorrow, the euro fell apart and our countries were severally sovereign, would those power struggles have no relevance?
- Jake Friends come and go. Enemies accumulate.
I was not writing to defend Jerome's comment, he can do that himself, but to support the view that excluding global power struggles from the field truncates the discussion, which then appears to conclude that Europe's problems are solely self-inflicted and that sovereign nation-states will be either the inevitable result of those self-inflicted problems, or the correct response to them. Well-adapted macroeconomic policies for those states may be suggested (with great confidence, even), but it's legitimate to have doubts about, not their theoretical effectiveness, but their chances of being applied in real conditions - will global finance go away, will laissez-faire neoliberalism go away, will economists change their spots, will right-minded governments emerge from the polities we have, will global imbalances and their attendant pressure to race to the bottom disappear, because the euro is no more and we have independent nation-states? Luis's (self-admittedly) doomer scenario above has the merit of putting the subject on the table. It's not enough to reply (hyperbole for hyperbole) that what's happening within the euro is just as bad, or that all a government needs to do is this or that. A serious (probably multi-scenario) description of what might and what is likely to happen to our several nation-states in the event of leaving the euro or of a general euro collapse, is called for. Alongside which (though great doubts may be legitimate on this score too), the chances of a return to the '80s to re-debate and identify an acceptable construction sans Maastricht for what has become the EU (including what the outlines of an acceptable construction would be), need to be assessed. Vast programme.
Nothing secondary market purchases by the ECB with a stated cap on yields wouldn't solve faster than you can say 'Weimar'. There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman
Again - lower taxes and balanced budgets are NOT THE SAME THING.
Balanced budgets are fine, whatever, as long as they are regarded as an incidental circumstance rather than an actual policy objective.
And when your creditworthiness is decided in London,
German austerians are not against tax increases to balance budgets.
Taxes on the poor is ok, but a luxury tax on cars in Greece was not allowed.
ReporterNet.com | Tax on Luxury Cars to be Abolished
The government is expected to abolish the luxury tax on private cars with ex-factory prices of more than 20,000 for new and 16,000 for used, according to statements by Deputy Finance Minister Pantelis Oikonomou, who cited European legislation. "In order to prevent the country from being referred to the European Court, a draft provision has been prepared for the abolition of the luxury tax on private cars," he said in Parliament. Luxury tax rates vary between 10% and 40%, depending on the ex-factory price. Oikonomou said the ministry is also preparing a more favorable tax regime for imported used cars. Greece has already lost a case at the European Court on this issue.
The government is expected to abolish the luxury tax on private cars with ex-factory prices of more than 20,000 for new and 16,000 for used, according to statements by Deputy Finance Minister Pantelis Oikonomou, who cited European legislation.
"In order to prevent the country from being referred to the European Court, a draft provision has been prepared for the abolition of the luxury tax on private cars," he said in Parliament.
Luxury tax rates vary between 10% and 40%, depending on the ex-factory price.
Oikonomou said the ministry is also preparing a more favorable tax regime for imported used cars. Greece has already lost a case at the European Court on this issue.
Just don't you dare tax BMWs. Be nice to America. Or we'll bring democracy to your country.
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