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Chorus: Austerity doesn't work

by Luis de Sousa Fri Jan 20th, 2012 at 05:13:54 PM EST

A week ago we had another strike by the rating agencies, this time Standard and Poor's. Closing a week that had been relatively successful for the European debt market, the continent was once more bombarded with a swarm of downgrades. Nine states saw their grade derided, with France and Austria loosing AAA status and Italy kicked out of the A area into BBB+. Over the weekend we had the usual cries from political leaders, employing hard words but soft action. Nevertheless this week further signs of relief in the debt market came about: Portugal was able to auction 11 month maturity bonds with interest below 5%, better than before the aid request, Austria was able to auction 50 year bonds for what it seems only the second time in its history and interest rates in the secondary market for Italian bonds have entailed a slow but constant decline. The defense against the rating agencies put up by the ECB seems to be finally yielding results.

But something less visible has remained from last week's attack: the analysis upon which Standard & Poor's supposedly based its downgrades. The company vised particularly the blind Austerity policy followed by the Council, joining the body of voices claiming it is leading Europe to a dead end. This is an interesting and useful outcome of the unsuccessful strike, that echoed through the last days. Le Monde published a wrap up that is worth looking closer.


This is a crosspost from AtTheEdgeOfTime.

The Austerity/Exports recipe is being put openly at cause by different voices, a discourse that Standard & Poor's helped bringing to the front pages. Le Monde quotes Joseph Stilglitz, a long time opposer to this sort of strategy, that recently even compared it to the medical practice of bleeding in Mediaevel times:

Parmi ces voix, l'une des plus pessimistes est celle du célèbre économiste américain Joseph Stiglitz, prix Nobel en 2001, qui lors du Forum financier asiatique de Hongkong, mardi, est allé jusqu'à comparer l'austérité à "la pratique de la saignée dans la médecine médiévale". Celle-ci pourrait, selon lui, provoquer à terme la disparition de l'euro. Among these voices one of the most pessimistic is that of the famous american economist Joseph Stiglitz, Nobel prize in 2001, whom at the financial Asian Forum of Hong Kong, went as fas as to compare austerity to the "bleeding practice of mediaeval medicine". Which according to him can result in the end of the euro long term.

Stiglitz also stresses that the Council's obsession with debt misses the fundamental point that deeper causes are at the root of the economic difficulties we face today:

Lors d'une conférence économique en Argentine, en décembre, Stiglitz déclarait déjà que "les politiques d'ajustement aux Etats-Unis et en Europe ne résoudront pas la crise économique. Le déficit budgétaire n'est pas à l'origine de la crise, c'est au contraire la crise qui a causé le déficit budgétaire". Last December at an economic conference in Argentine, Stiglitz had already declared that "the adjustment policies in the United States and Europe do not solve the economic crisis. The budget deficit is not the root of the crisis, it's the opposite, the crisis has caused the budget deficit".

The vicious circle of more austerity, less income, lower GDP, higher debt ratio is explained by another economist:

L'économiste André Grjebine, directeur de recherche au CERI-Sciences Po (Centre d'études et de recherches internationales), déplore, [...] "dans un tel contexte, les Etats les plus vulnérables sont donc acculés à pratiquer des politiques d'austérité pour satisfaire aux exigences de leurs créanciers. En hypothéquant ainsi leur croissance, ils réduisent leurs recettes publiques et rendent plus problématique encore le remboursement de leur dette publique". The economist André Grjebine, research director at CERI-Sciences Po (Centre for international studies and research), says: "in such context, the most vulnerable States are thus forced into austerity policies to satisfy the exigences of their creditors. This way also compromising their growth, they reduce public income and render the reimbursement of their public debt even more problematic".

This spiral will naturally lead to an unsustainable social situation, that sadly is already in place in Greece. From then onwards things get very hard to solve in a timely fashion.

Ces mesures ont un impact social non négligeable, puisqu'elles sont synonymes de "compression salariale, pour réduire le coût du travail. Automatiquement, le chômage va augmenter et la demande, se réduire. Cela peut durer très longtemps", s'alarmait mardi, dans un article du Monde, Anne-Laure Delatte, économiste à laRouen Business School. These measures have a non negligible social impact, for they are synonyms with "salary compression to reduce labour costs. Automatically, unemployment rises and demand pulls back. And this can take a very long time", wrote last Tuesday Anne-Laure Delatte, economist at the Rouen Business School in an article at Le Monde.

So what's the alternative to Austerity? Le Monde presents an Econ 101 solution to counter the trade balance assymetries across the Eurozone:

[...] les pays européens devraient mettre en oeuvre des politiques économiques susceptibles à la fois de soutenir la croissance et de faciliter ainsi le remboursement des dettes publiques et de rééquilibrer les balances courantes entre pays de la zone euro. Ce double objectif ne paraît pouvoir être obtenu que par une relance dans les pays excédentaires, en premier lieu en Allemagne [...] the European countries must set in place economic policies capable of both supporting growth and facilitating the reimbursement of pubic debt and of re-balancing the current balances between euro zone countries. This double objective cannot be achieved by other means than through a relaunch in the countries running surpluses, in first place in Germany.

Up to 2009 this balancing was guaranteed by the existence of an European debt market, where banks from surplus states made extra resources available to deficit states. When in early 2010 was known that the EPP had been cooking the books in Greece no defensive measures where put in place, providing the rating agencies the room to fire at will. Eighteen months later the European debt market was essentially gone.

The alternative strategy presented by Le Monde can have some effects short term, but like Austerity does not secure a sustainable outcome long term. That because in 2008 a social-economic system based on imported fossil fuels collapsed in the states of the EU that neither had indigenous fossil resources nor had built a relevant Nuclear park after the II World War. By chance in three of these states Latin languages are spoken, which gave some Fascist factions meat to grind.

The problems we live today have not that much to do with political or economical philosophy they are essentially bio-physical.

Display:
Same obsession with growth, standard of living. What's needed is both redistribution AND austerity. The world is living beyond its means, and no magic can make high living come back. Our only solution will be to force out this obsession with gadgetry, big houses, cars, boats and travel. Conspicuous consumption.

We need to make status for service, not consumption. Good luck.

Align culture with our nature. Ot else!

by ormondotvos (ormond.otvosnospamgmialcon) on Sun Jan 22nd, 2012 at 10:29:26 PM EST
Nine states saw their grade derided

Who laugued at their grade?

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker

by Migeru (migeru at eurotrib dot com) on Mon Jan 23rd, 2012 at 04:35:37 AM EST
Krugman:

1921 and All That - NYTimes.com

Every once in a while I get comments and correspondence indicating that the right has found an unlikely economic hero: Warren Harding. The recovery from the 1920-21 recession supposedly demonstrates that deflation and hands-off monetary policy is the way to go.

But have the people making these arguments really looked at what happened back then? Or are they relying on vague impressions about a distant episode, with bad data, that has been spun as a confirmation of their beliefs?

OK, I'm not going to invest a lot in this. But even a cursory examination of the available data suggests that 1921 has few useful lessons for the kind of slump we're facing now.

Brad DeLong has recently written up a clearer version of a story I've been telling for a while (actually since before the 2008 crisis) -- namely, that there's a big difference between inflation-fighting recessions, in which the Fed squeezes to bring inflation down, then relaxes -- and recessions brought on by overstretch in debt and investment. The former tend to be V-shaped, with a rapid recovery once the Fed relents; the latter tend to be slow, because it's much harder to push private spending higher than to stop holding it down.

And tipped by Krugman:


Proponents of austerity and fiscal stimulus alike should take care in assessing the lessons of the 1920-21 depression. The evidence is clear that despite the declarations of several politicians demanding immediate deficit reduction, the 1920-21 depression does not offer any support to the claim that austerity is appropriate to an economy that is experiencing deficient effective demand, or even the claim that it aided recovery in the early 1920s.
Austerity measures were implemented before the beginning of the 1920-21 depression and are mistakenly attributed to Warren Harding, whose modest fiscal contraction paled in comparison to that of the Wilson administration. Keynesians should also be careful to demarcate when deficit spending is an appropriate recession-fighting strategy. The example of the 1920-21 depression is instructive for this demarcation. Austerity is not obviously problematic when the economy is constrained on the supply side, despite its destructive consequences when demand is weak. This is not to say that supply-side problems always merit a policy response of austerity, of course. Egalitarianism and humanitarianism can plausibly motivate reasonable levels of deficit spending on social programmes or income maintenance.
by Nomad on Mon Jan 23rd, 2012 at 06:27:28 PM EST
Though I agree with this particular point, Krugman appears to me as much as an advocate as your regular ECB monetarist. I very much doubt Keynes would agree with what Krugman says in general, were he still alive today.

luis_de_sousa@mastodon.social
by Luis de Sousa (luis[dot]de[dot]sousa[at]protonmail[dot]ch) on Tue Jan 24th, 2012 at 03:36:03 AM EST
I'm not sure what Krugman you're reading. Certainly not the Krugman I'm reading, who constantly rails against the ECB, Merkel and austerity.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Fri Jan 27th, 2012 at 03:48:38 PM EST
[ Parent ]
I'm reading the Krugman that says we haven't had inflation so far solely because money velocity has been going down. Not only have we had price inflation, as money supply hasn't significativelly moved the past 3 years. While I agree with him that velocity can have a larger role than supply at times, I'd avast from claiming that's what happening now. I very much doubt Keynes would advocate for printing money agaisnt an environment of resource constraints, and where gold is where it is today.

luis_de_sousa@mastodon.social
by Luis de Sousa (luis[dot]de[dot]sousa[at]protonmail[dot]ch) on Sat Jan 28th, 2012 at 05:11:14 AM EST
[ Parent ]
The price of gold is totally irrelevant to any reality-based macroeconomic planning.

And you cannot in general say that it is improper to print money in the face of resource constraints, unless you care more about preventing inflation than about reality-based macroeconomic planning. The question of whether it is sensible to print money is orthogonal to the question of resource constraints, because money is not a commodity, it is a tool for exercising political power. Whether an exercise of political power by the state is merited has no simple relationship with the state of raw material availability.

In the present situation, for instance, printing money is a very sensible thing to do in the face of current resource constraints. Because printing money is a prerequisite for taking those actions which will help to reduce our reliance on the resources whose availability is presently constraining us.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Jan 29th, 2012 at 12:37:43 AM EST
[ Parent ]
The problems we live today have not that much to do with political or economical philosophy they are essentially bio-physical.

Of course the problems are political and economic. The solution to both the recession and the resource problem is to reconfigure Europe's economy away from fossil fuels and high resource use. But Austerity, as a political and economic position, prevents consideration of a massive public investment program in renewable energy infrastructure because "we can't afford it" and "we've been living above our means".

Similarly, it is possible to have higher employment with lower resource intensity by employing more people in the service sector and sharing awailable work better (rather than having fewer people work more hours with the rest in unemployment).

These are political and economic problems, not biophysical problems. Unless humans are biophysically too stupid for this.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker

by Migeru (migeru at eurotrib dot com) on Tue Jan 24th, 2012 at 04:21:04 AM EST
Oh, and maybe we do need to learn to live with fewer gadgets and slowed travel, but that's also a sociological problem.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Migeru (migeru at eurotrib dot com) on Tue Jan 24th, 2012 at 04:22:30 AM EST
[ Parent ]
This. Dont do this. Ever. If you manage to sell this idea to the public, the green movement dies, because that is what happens to political movements that advocate poverty.

I really wish people would stop shilling austerian visions in the name of ecology - it is political idiocy, because the austerians are going to loose, and if the green movement ties itself to them, it will drown with them.

What is needed is a vision of eternal prosperity, which is perfectly achivable - All resources save energy are infinitely recyclable and energy is abundant. Oil and coal are convenient but I can name at least 3 technologies that can supply substantially greater-than-current energy use for > a billion years and at reasonable costs, too.

Nuclear fission (Breeders exist and supply grid power at reasonable prices. This makes them proven tech. Assuming 4x current energy use, we run out of uranium sometime after the sun swells and eats planet earth)

Desert solar + HVDC: The sahara is pretty darn big, and pretty darn sunshiny. Why the heck would anyone live a life of energy scarcity when instead you can simply make the solar array bigger? It is not like we are going to run out of sand.

Wind + Serious Storage; I really do want to see small mountains floating on hydralic pistons in my lifetime. Because that would be awesome

by Thomas on Wed Jan 25th, 2012 at 06:53:37 AM EST
[ Parent ]
I really wish people would stop shilling austerian visions in the name of ecology - it is political idiocy, because the austerians are going to loose, and if the green movement ties itself to them, it will drown with them.

I agree, and my biggest problem is the argument that we cannot afford to make the investments to transform out energy infrastructure, despite the fact that the labour requirements would be so massive as to pull us out of the current unemployment crisis.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker

by Migeru (migeru at eurotrib dot com) on Wed Jan 25th, 2012 at 06:58:00 AM EST
[ Parent ]
But a good chunk of the green movement is about atoning for our sins. How can we do that without austerity?
<sigh>
by Colman (colman at eurotrib.com) on Wed Jan 25th, 2012 at 07:01:08 AM EST
[ Parent ]
thou snarkest too much methinks.

the hairshirt brigade is dwindling with every new discovery in PV, and every MW of wind installed.

there is still some truth to the atonement principle, in that huge swathes of land needs to be reclaimed from the ravages of burbis and chem ag monocultures.

if we continue cling to fossil fuels as our main energy drivers instead of using them to help us transition asap, then we could quite well find ourselves in a terrible condition... this is the fear that creates the desire to atone for our past greedy stupidities, like a drunk after a bender.

were we to manage the transition expeditiously, rolling out mass transit and sustainable energy with urgency climate change demands, then we could conceivably keep many of our demands met without too much hiatus.

after we have completely crossed the energy rubicon (20-30 more years?) and definitively left dirty energy behind us, then i think we will be only limited by our imaginations as to how much energy we can play with.

it would do many people good to detox off of many wasteful habits we have in the first world, 1000 mile salads etc, but i think we will be grateful afterwards to have shed some of the excess, like people feel better after losing a few pounds from dieting.

exaggerating the guilt-trip some feel because of our collectively clumsy handling of our environment, needlessly polarises people, imho.

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Wed Jan 25th, 2012 at 09:39:20 AM EST
[ Parent ]
I wasn't snarking at all.
by Colman (colman at eurotrib.com) on Wed Jan 25th, 2012 at 09:44:31 AM EST
[ Parent ]
Thomas:
I really wish people would stop shilling austerian visions in the name of ecology

Who is doing this exactly?

In France, there is the extremely marginal Parti de la Décroissance, who have interesting ideas but zero influence or electoral appeal.

Other than that?

In any case, the notion that frugality is a virtue, and morally better than disposable consumption, seems almost too obvious to discuss. If this is what you assimilate with "austerianism", then I suggest you have Klein bottle syndrome.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Wed Jan 25th, 2012 at 08:42:08 AM EST
[ Parent ]
Who is doing this exactly?

I'd say Eric Zencey and Jerome (see my rejoinder) could both be said to have done that.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker

by Migeru (migeru at eurotrib dot com) on Wed Jan 25th, 2012 at 08:52:05 AM EST
[ Parent ]
I think you are doing a grave disservice to both Eric and Jerome to class them as shills for Austerianism.

Where Eric, Jerome, I, and various others disagree with you, Jake, and various others (I will not do you the disservice of bracketing you with Thomas the cornucopian sf fan) is that we identify a finite-planet resource problem which precedes (and, arguably, triggers) the financial crisis, and is a graver problem in the long run.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Wed Jan 25th, 2012 at 09:49:29 AM EST
[ Parent ]
Problem is that it feels like people really want to believe that the finite-planet problem is the cause. It's not at all clear that it is. Oil prices quite possibly acted as a trigger, but virtually anything could have given how unstable the system configuration was - and the problems are far bigger than necessary given how stupid the political configuration was.
by Colman (colman at eurotrib.com) on Wed Jan 25th, 2012 at 10:15:22 AM EST
[ Parent ]
That sounds rather like you're getting inside people's heads and attacking what you imagine they are thinking, rather than what they are actually saying. This "Green austerian" meme is a strawman.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II
by eurogreen on Wed Jan 25th, 2012 at 10:48:09 AM EST
[ Parent ]
The green austerians don't exist? The ones who want to see a world of hobbits don't exist? Really?
by Colman (colman at eurotrib.com) on Wed Jan 25th, 2012 at 11:08:21 AM EST
[ Parent ]
Well, if you're talking about ecologists who advocate economic contraction, I've already linked some of them above, and I'm sure you can find plenty of articles in The Ecologist and so on. However :

  • I don't see why it's useful to bracket them with the Hayek school of economists, who want to shrink government spending; and
  • I don't see any of them posting on this site.


It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II
by eurogreen on Wed Jan 25th, 2012 at 11:34:20 AM EST
[ Parent ]
The Hayek school of economics is based on the idea that recessions are the deserved pain for living beyond our collective monetary means.

The ecological austerians want to argue that the current recession is the inevitable pain for living beyong our planet's thermodynamic means.

Both are hangover theories and they share a common conceptual and, yes, moral, frame.

Both are actually wrong in my opinion.

Note that I am not arguing that if there's an ecological collapse in mid-century it won't be an inevitable consequence of ecological overconsumption. I'm just arguing that we actually have the human and material resources to turn around, simultaneously, both the employment situation and the ecological situation.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker

by Migeru (migeru at eurotrib dot com) on Wed Jan 25th, 2012 at 11:41:20 AM EST
[ Parent ]
I really agree with this. I get it all the time. Sure, I really worry about Peak Oil. All the time. For god's sake, I'm even on the board of ASPO Sweden. But I can't see that the current crisis was caused by lack of resources in general or oil in particular. Maybe $148 oil was the trigger, at most.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Fri Jan 27th, 2012 at 03:52:39 PM EST
[ Parent ]
But yes, we're spending a decade pissing about with problems that may be entirely imaginary and ignoring a whole pile of much more fundamental medium term to (maybe) short term problems.
by Colman (colman at eurotrib.com) on Wed Jan 25th, 2012 at 10:16:04 AM EST
[ Parent ]
I think Eric and Jerome are doing a disservice to employment policies by claiming that the recession is caused by fundamental finite-planet problems rather than harebrained monetary austerianism.

As I have said repeatedly, if we allowed ourself monetary inflation we could mobilize the resources (and employ the people) to implement a green new deal and transition our economy to lower resource use while preserving employment.

Instead, we get people arguing that austerity because finite planet and with no money to mobilize the resources (and the currently idle labour) to address the finite planet problem.

So austerity means that business as usual wins. So you shoot yourself in the foor by saying that austerity is the proper answer to a finite planet crisis.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker

by Migeru (migeru at eurotrib dot com) on Wed Jan 25th, 2012 at 10:55:51 AM EST
[ Parent ]
I won't speak for Eric, but I can detect no trace in Jerome's writing of any call for austerity.

It seems that this strawman is triggered by a rather convoluted reasoning :

  1. If we recognise that the planet is finite, this means we have to consume less resources
  2. If we consume less resources, this means austerity
  3. anyone who thinks this is the same as the monetarist economists who are strangling Europe.

Both 2 and 3 are non sequiturs.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II
by eurogreen on Wed Jan 25th, 2012 at 11:12:43 AM EST
[ Parent ]
Which part of Jerome's people have to do with less ... and need to reduce their consumption of everything else is inconsistent with your If we consume less resources, this means austerity which you call a non-sequitur?

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Migeru (migeru at eurotrib dot com) on Wed Jan 25th, 2012 at 11:14:58 AM EST
[ Parent ]
Why do you think austerity is primarily about consuming less?

Austerity is primarily about redistributing political power towards rentiers away from workers and the middle classes, and about running national budgets like a kitchen budget.

Some austerians are perfectly capable of believing that austerity is actually expansionary in a general sense.

Others only care that it's expansionary for 'investors' - which it often is.

Neither position is about intelligent conservation of scarce resources, or about innovating to work around the need for conservation.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Wed Jan 25th, 2012 at 11:26:59 AM EST
[ Parent ]
I'm looking forward to eurogreen chiding you for looking inside the mind of Austerians.
by Colman (colman at eurotrib.com) on Wed Jan 25th, 2012 at 11:28:59 AM EST
[ Parent ]
Austerity is about economic pain is unavoidable.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Migeru (migeru at eurotrib dot com) on Wed Jan 25th, 2012 at 11:54:40 AM EST
[ Parent ]
No, it clearly isn't.

If you really think it is, you haven't been paying attention.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Wed Jan 25th, 2012 at 12:44:55 PM EST
[ Parent ]
Let's put it this way: redustribution to the rentiers is not austerity. Austerity is just the excuse currently in fashion.

Or are you saying redistribution to the rentiers wasn't the name of the game in the go-go years prior to 2007?

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker

by Migeru (migeru at eurotrib dot com) on Wed Jan 25th, 2012 at 12:46:56 PM EST
[ Parent ]
You're talking about two quite different uses of the word "austerity". Assimilating the two politically, based on nothing more than semantics, as you are doing, is inappropriate, unless it's your intention to be insulting.

  • "Austerity" as defined by the austerian economists means reducing government spending : generally this means lowering social security spending, degrading health and education, things like that. Things which are service-intensive, not resource-intensive. (If the Austerians were motivated by ecological concerns, it's unlikely they would choose this method!)
  • I went back to look for the text by Jerome that you quote (without linking), and I find it hard to believe that you really think that he is advocating austerity when he says :

European Tribune - Peak oil (demand)
peak oil translates into higher prices, which eventually causes lower demand (in those countries which are price sensitive, i.e. mostly the Western world, as a large portion of the emerging economies subside fuels) - and this is accompanied by widespread pain, as people have to do with less, or with more expensive oil, and need to reduce their consumption of everything else as a consequence.

Sure, if I can't afford as much petrol, or food, as before because of price inflation, this can be called "austerity" I guess; but I find it really strange to bracket it with economic Austerianism.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Wed Jan 25th, 2012 at 11:29:00 AM EST
[ Parent ]
He's advocating austerity in that he's saying that pain is unavoidable. In that, he's playing into the enemy's frame.

Economic pain is not unavoidable. Greek parents giving their children up to orphanages is not an unavoidable consequence of peak oil. FFS.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker

by Migeru (migeru at eurotrib dot com) on Wed Jan 25th, 2012 at 11:34:31 AM EST
[ Parent ]
The problem is that you apparently see things purely in terms of a propaganda war; while I see the debate of ideas as being useful in itself.

It's a simple fact that increased oil prices in recent years have impacted the standard of living of the vast majority of Europeans (Norwegians excepted).

Denying this fact on the basis that other factors have caused greater impacts on standards of living, would be rather unsound. On reflection, I don't think this is what you are doing. Rather, I think you are trying to censor all mention of any other causes than Europe's self-inflicted financial crisis.

I don't find this useful.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Wed Jan 25th, 2012 at 11:46:59 AM EST
[ Parent ]
We can discuss peak oil and declining standards of living, let's just please not do it in the hangover frame.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Migeru (migeru at eurotrib dot com) on Wed Jan 25th, 2012 at 11:49:03 AM EST
[ Parent ]
OK, and you have determined that I have an ecological hangover. By telepathy perhaps?

Migeru:

The ecological austerians want to argue that the current recession is the inevitable pain for living beyong our planet's thermodynamic means.

I object to being bracketed with what you term "ecological austerians", and your insistence on controlling what can and cannot be debated. After all, it is you, not I, who introduced the "hangover frame", in which I have no interest.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Wed Jan 25th, 2012 at 12:03:30 PM EST
[ Parent ]
Are you arguing that the current recession is the inevitable pain for living beyong our planet's thermodynamic means?

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Migeru (migeru at eurotrib dot com) on Wed Jan 25th, 2012 at 12:06:36 PM EST
[ Parent ]
On the contrary, I am objecting to being bracketed with such people, as you are attempting to do in an apparent attempt to disqualify me from debate.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II
by eurogreen on Wed Jan 25th, 2012 at 12:08:29 PM EST
[ Parent ]
I am not bracketing you with such people. I am just claiming that Jerome and Eric Zencey among others come too close for comfort to arguing that. You disagree. I have made that point in their diaries, repeatedly. This whole subthread started because of your
Thomas:
I really wish people would stop shilling austerian visions in the name of ecology
Who is doing this exactly?
I also did not do you the disservice of reacting to your bracketing me with Thomas by saying
(I will not do you the disservice of bracketing you with Thomas the cornucopian sf fan)
(Yeah, this is a case of you using excusation non petita as a way to bracket me with cornucopianism while claiming not to be doing it).

By the way, you're free to argue in a biblical literalist frame, too, but I would object to that frame as well, and I would not care in the least if you claimed I was oppressing you for objecting to that frame. After all I am just objecting, not suppressing your ability to argue.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker

by Migeru (migeru at eurotrib dot com) on Wed Jan 25th, 2012 at 12:13:23 PM EST
[ Parent ]


It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II
by eurogreen on Wed Jan 25th, 2012 at 02:45:42 PM EST
[ Parent ]
How can you then claim I am bracketing you with what I call "economic austerians" since you don't even want to call yourself that?

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Migeru (migeru at eurotrib dot com) on Wed Jan 25th, 2012 at 12:15:07 PM EST
[ Parent ]
You're talking about two quite different uses of the word "austerity". Assimilating the two politically, based on nothing more than semantics,

Is what your enemies will do if they hear you using semantics that give them any opening to do so. Because the right wing lies. Pathologically as well as professionally.

It is also what the conventional wisdom will do when it hears you using semantics that gives it an opening to do so. Because attempting to co-opt the politically weaker narrative to reinforce the politically stronger narrative is how the conventional wisdom deals with cognitive dissonance.

Put another way, would you rather have Migeru point out that your spiel can (will) be read that way, or some bad-faith shill from a far-right belief tank present your spiel that way with a straight face?

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Jan 29th, 2012 at 01:29:09 AM EST
[ Parent ]
First you have to convince yourself, then you have to convince a friend, then you have to convince an enemy.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Migeru (migeru at eurotrib dot com) on Sun Jan 29th, 2012 at 05:27:31 AM EST
[ Parent ]
It seems that this strawman is triggered by a rather convoluted reasoning :

  1. If we recognise that the planet is finite, this means we have to consume less resources
  2. If we consume less resources, this means austerity
  3. anyone who thinks this is the same as the monetarist economists who are strangling Europe.

Both 2 and 3 are non sequiturs.

No, the argument is that:

  1. By using the present crisis as an example of finite planet constraints, you are seriously misrepresenting the causes of the crisis.

  2. Obscuring the actual aetiology of the present crisis is Unhelpful both in solving the present crisis and in destroying the political factions that caused it and profit from it.

To which it may be added that said political factions are equally unremittingly hostile to the idea that it is necessary to reduce resource consumption. And that a demand-side crisis is infinitely easier to use to defeat, disgrace and destroy them than a supply-side crisis. So by attempting to fit the present crisis into your pet economic model, you are making effective political action against your enemies more difficult.

This may well be the last purely demand-side crisis for the foreseeable future. But it is a purely demand-side crisis. Pretending that it is a supply-side crisis concedes a point to your enemies that you should not be conceding until and unless a rational response to the crisis absolutely requires you to.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Jan 29th, 2012 at 01:18:58 AM EST
[ Parent ]
Seriously misrepresenting... speaking of which...

As expected, you arrived to assist Miguel in his beat-up of a strawman.

All I ever claimed is that resource constraints arguably triggered the current crisis; neither I nor, as far as I can tell, anyone on ET has argued that the current crisis is characterised by resource constraints.

In any case, whatever triggered the crisis, we can rest assured that the 1% will continue to use it to further their interests, with shock-doctrine tactics to change the rules to their advantage.

And because the crisis is actually complex and multiform, refusing to consider one aspect of it doesn't actually help in searching for solutions. Miguel's crusade for ideological purity seems to stem from Jerome's observation, among other things, that Portugal's trade deficit from oil imports was far larger than its trade deficit with the rest of the EU.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Mon Jan 30th, 2012 at 06:18:13 AM EST
[ Parent ]
The crisis is entirely political.

But I digress...

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker

by Migeru (migeru at eurotrib dot com) on Mon Jan 30th, 2012 at 06:21:45 AM EST
[ Parent ]
All I ever claimed is that resource constraints arguably triggered the current crisis

The trigger is totally irrelevant for all practical purposes. If it hadn't been one trigger, it would have been another, because the underlying imbalances were not sustainable. But for what it's worth, the trigger for the current European crisis seems to have been the collapse of Eurodollar liquidity following the American credit freeze in 2008.

And because the crisis is actually complex and multiform

It actually isn't. It's a very, very simple crisis, that can be summed up in a two sentences: Wage suppression is the retarded brother of protectionism. And inequality breaks industrial economies.

The solutions are equally simple: Inequality needs to go back down to 1970 levels, and wages need to go back up to 67 % of GDP across the whole EU. There is absolutely nothing complicated about this.

Yeah, solving this crisis will mean that we will have to deal with resource constraints that are currently made less pressing by the fact that we are busy demolishing the factories that would use those resources to make stuff. But that will be then, and this is now.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Jan 30th, 2012 at 06:33:20 AM EST
[ Parent ]
the trigger for the current European crisis seems to have been the collapse of Eurodollar liquidity following the American credit freeze in 2008
And the collapse of Eurodollar liquidity last summer was what broke France's back.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Migeru (migeru at eurotrib dot com) on Mon Jan 30th, 2012 at 06:40:07 AM EST
[ Parent ]
the trigger for the current European crisis seems to have been the collapse of Eurodollar liquidity following the American credit freeze in 2008.

Well - psychologically capitalist recessions and depressions are caused by a loss of faith in the future among the financial class.

Capitalism is inherently manic depressive, with wild and uncontrollable swings between irrational euphoria during boom periods and irrational depression and projected guilt (q.v. austerity) during busts.

Essentially all the markets do is measure faith - in individuals, companies, corporations, and countries. The ultimate capitalist virtue isn't practical output, it's the ability to persuade people they should believe in you.

Markets 'punish' those whom faith has abandoned. And during crisis periods, everyone's faith stampedes towards the door.

You can see here that oil prices spiked just before the crash:

Now - Chris Cook will likely say that this was a result of manipulation. And he may be right.

Practically, it doesn't matter. Enough people were looking at rising energy prices to consider that the chances of getting their (non-viable, multiply leveraged) loans repaid were trending to zero - after a long period during which it was still possible to believed that repayment would be possible eventually.

Something similar happened during the oil panic during the 70s, which is why there was a similar crash then - even though taxation was more evenly balanced and worker compensation was proportionally higher.

So I think it's simplistic and empirically disconfirmed to suggest that all we have to do is return to the redistributive policies of the 70s and resource constraints will drift back down into the economic background noise.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Mon Jan 30th, 2012 at 07:42:09 AM EST
[ Parent ]
So I think it's simplistic and empirically disconfirmed to suggest that all we have to do is return to the redistributive policies of the 70s and resource constraints will drift back down into the economic background noise.

On the contrary, resource constraints would return to the forefront of our economic problems if we (re)turned to unconditional fiscal defense of full employment. Which is what we want to happen: We want the binding constraint on economic activity to be real resource availability, not by the fake constraint of money availability.

But by pretending that real resources are the currently binding constraint, you would be arguing that the crisis is already over as far as fiscal and monetary policy is concerned. All that can be done, then, is industrial and R&D policy to improve resource utilisation.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Jan 30th, 2012 at 08:37:02 AM EST
[ Parent ]
No, I'm arguing that the process is fundamentally insane, unstable, hysterical and utterly irrational.

I agree that we should build an awareness of physical constraints into economic modelling. But that's a much bigger issue of wide-scale rational planning. It's disconnected from the current political need to label a few people super-winners at the expense of everyone else and the carrying capacity of the planet as a whole.

The wide differentials that generates are always followed by a mass crash in confidence. But this is considered a feature, not a bug, because it prevents democratic accountability and is a convenient way to keep working populations repressed.

Economic theory makes as much sense as a drunk does. A drunk will lurch from over-confidence to utter panic for largely trivial reasons, before dying of something stupid and utterly avoidable.

The perception of triggers for emotional states is very distant from intelligent sober analysis.

It's also a feature of the drunken state that important features of reality are ignored.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Tue Jan 31st, 2012 at 06:34:14 AM EST
[ Parent ]
So I think it's simplistic and empirically disconfirmed to suggest that all we have to do is return to the redistributive policies of the 70s and resource constraints will drift back down into the economic background noise.

Nobody's arguing for the specific redistributive policies of the 70s. The point is to put unemployment in centre stage, instead of the preservation of the purchasing power of rentier wealth.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker

by Migeru (migeru at eurotrib dot com) on Mon Jan 30th, 2012 at 08:39:05 AM EST
[ Parent ]
But that's a very 70s mindset itself, with the implication that capitalism is fine as long as the rentiers can be forced to create jobs.

Capitalism isn't fine, jobs or no. Capitalism is a political feedback loop which always concentrates policy access among a tiny minority. Even if there are jobs, the best you can hope for is a temporary respite from policy monopoly.

In the UK, after a hundred and fifty years of socialist history there were maybe 20 years in total - it could be as few as fifteen - where policy was designed to be politically liberating and bottom up.

The rest of the time, it was top-down and pro-rentier.

Jobs are irrelevant. They're too fragile, too subject to political whims pretending to be economic necessity, and not democratic enough.

The only way to eliminate the rentier model completely is to open project investment to the public, convert corporations into coops, and exclude high net worth individuals from politics.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Tue Jan 31st, 2012 at 06:39:54 AM EST
[ Parent ]


Friends come and go. Enemies accumulate.
by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Jan 31st, 2012 at 06:47:59 AM EST
[ Parent ]
One possibility is to rethink the whole "people need a job to make a living" assumption. Linca challenged it in the comments to this diary. As long as I'm not able to articulate a coherent position around that, I'll stick to unemployment is the problem, capitalism or not capitalism.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Migeru (migeru at eurotrib dot com) on Tue Jan 31st, 2012 at 06:52:06 AM EST
[ Parent ]
As long as only some people 'need a job to make a living' - while others need people to make a living for them - the problem won't go away.

It's not a simple issue, because our culture is based on economic Social Darwinism, and - apparently - it's important that some people get a lot while others work hard for very little.

My point is that if you stop at the 70s-socialist idea of 'jobs for all' you haven't tackled the underlying issues, and you still have a system that's politically and economically unstable.

If you want a stable system - note how close that is to a sustainable system - you have to build in feedback loops that distribute power and reward intelligent reality-based decision making.

Currently you have feedback loops that reward aggressive selfishness above all other social values.

This is not a good thing. It's not only not sustainable, it actually destroys collective intelligence.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Tue Jan 31st, 2012 at 07:00:01 AM EST
[ Parent ]
All the more so because the lack of confidence in future economic growth which has driven markets over the last few years is not only entirely justified, but well overdue, from a business-as-usual point of view.

High energy costs, and high uncertainty on future energy costs, are a brake on productive investment - this is quite rational, and took a few years to percolate through into market perceptions. If, on the other hand, market sentiment perceives plausible prospects for a trajectory towards sustainable energy at predictable prices, then that ought to restore confidence.

Of course, if we need one of those bipolar mood swings for capitalism to pull itself up by its bootstraps, this illustrates the extent to which our governments have disempowered themselves.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Mon Jan 30th, 2012 at 09:38:05 AM EST
[ Parent ]
All the more so because the lack of confidence in future economic growth which has driven markets over the last few years is not only entirely justified, but well overdue,

You're conflating nominal and real growth here.

Nothing about resource constraints says that you can't have nominal growth, which is all you need for financial stability. Well, nominal growth and a properly functioning central bank.

Banks don't care about real growth. They care about getting their money back. Which means nominal growth.

High energy costs, and high uncertainty on future energy costs, are a brake on productive investment - this is quite rational

Not necessarily. "Productive investment" includes investments that make energy cheaper (like insulating houses and building wind farms), which in any rational world should be encouraged in the face of expensive energy.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Jan 30th, 2012 at 09:55:00 AM EST
[ Parent ]
Note, I'm not talking about what's rational here, but about what's perceived by the "market", picking up on ThatBritGuy's meme which I find useful.

The point about nominal growth is well taken; therefore, the markets need to be convinced that the monetary authorities will ensure nominal growth. (are we there yet?...)

Likewise, my prescription for restoring faith in real growth, or at least a sustainable market environment, requires instilling faith in the markets that energy needs will be catered to at predictable prices. This requires clear public policy, and probably massive public investment.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Mon Jan 30th, 2012 at 11:26:56 AM EST
[ Parent ]
eurogreen:
High energy costs, and high uncertainty on future energy costs, are a brake on productive investment

yes, but investment has been growing notwithstanding, in enterprises that are meeting the future head on, not trying to pretend we can go on for ever in the old way.

Jerome is proof of that. yes there would be much more investment, IF governments could get their heads out of their keisters and stop sending such mixed, stop-and-go signals to the sustainable energy market, with their tie-in tariffs, incentives etc.

as for trying to cleave some daylight between the two political clusterfucks we have going on right now, unemployment and peak oil, i'm not sure there's any point really. a bit like worrying whether you're going to get hit by the front or the back of a bus. neither one is going to go away by itself, and banks, hedge funds, credit markets have no interest in solving any problems that plague everyone else but them, in fact they can profit off all the volatility and keep distracting us with their power to send whole countries to hell, while they amass their baubles.

as tbg consistently reminds us, we are not dealing with ration -let alone decent- human beings here, rather a sad parade of our worst psychological aberrations, nothing to admire except the boneheaded tenacity with which they clutch the banana in the jar, and their shapeshifting talents in spinning themselves as responsible, serious people voters and shareholders can trust, in that they are masters.

why cut the bus in two by arguing? it's heading for us, upside down and spinning, we don't know which end hitting us will be worse, and without fossil fuel supplies running low we don't know for sure whether we'd still be having such worrying divisions between rich and poor, and vice versa.

everyone here is describing the same elephant, just from different angles.

financial wealth-poverty continuum is a vertical polarity, with ever less people in the middle. where we are greedy and we need to be more austere, fine no problem, as long as the sacrifices are (perceived to be) across the board.

due to expert marketing, we have a collective stockholm syndrome that keeps voters trusting
tough, no-nonsense' leaders, and only challenging them with insipid milquetoast alternatives, both sides of the dyad serving the same masters, counting on the lapdog media to throw the juicy morsels of xenophobia and gossip, celeb-adulation and sports into the baying crowd of low-info voters, while a few educated folk trade possible solutions on blogs like this.

you're all making great points, and i think there's a fundamental agreement on most of them.

they own the airwaves, the masses are confused, so the numbers against intelligent change -whether consciously or brainwashed into abetting the status quo- remain dauntingly superior.

so the only way to beat them will be quality of ideas, which is generously represented here at ET.

Migeru:

we could mobilize the resources (and employ the people) to implement a green new deal and transition our economy to lower resource use while preserving employment.

the nub's right there... the question is how to spread that idea to where it's most needed, ie the electorate, who then must demand valid leaders with reality-based policies instead of the current wankfest.

to combat the current propaganda, and catapult a reasonable set of alternatives... that's the challenge, much more than microanalyses of what's correlation and what's causation. they are necessary and fascinating, but we can't really afford the luxury of over-intellectualising, not with a climate clock ticking, and especially if disagreements add extra drag to our progress and creat factions, when we know unity in slamming home the message mig summed up in one pithy phrase, a phrase you don't need any wonkiness to understand, even the lowest-info citizen can get it....if he hears it at all...

somewhere between yelling it from the rooftops, and silently wishing people would connect the dots by themselves, without any added pressure from us.

that middle way, not scaring people with doomery, not getting them excited about utopia, just patiently explaining what's going down, and how to ask for what we need.

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Tue Jan 31st, 2012 at 12:47:35 PM EST
[ Parent ]
OK, to simplify, let's define "the crisis" as the economic depression into which the policy decisions/non-decisions of EU leaders precipitated us, in reaction to the Eurodollar liquidity collapse.

In which case, we can be in complete agreement.

Once we have solved this crisis (har), with resumed economic growth, we will indeed be back in the (relatively) comfortable position of looking for solutions for the underlying resource-constraint crisis, which will have been exacerbated by the resumption of growth.

More to the point : we should employ a bit of shock-doctrine tactics of our own. Both these crises illustrate the urgent need to reduce economic inequalities, to restart the economy (purchasing power to the people who need to spend) and to afford the transition to sustainability.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Mon Jan 30th, 2012 at 08:36:26 AM EST
[ Parent ]
Where Eric, Jerome, I, and various others disagree with you, Jake, and various others (I will not do you the disservice of bracketing you with Thomas the cornucopian sf fan) is that we identify a finite-planet resource problem which precedes (and, arguably, triggers) the financial crisis, and is a graver problem in the long run.

So you think that JakeS in particular doesn't belong to the group of people who identify a finite-planet resource problem which precedes (and, arguably, triggers) the financial crisis, and is a graver problem in the long run?

Clearly that's wrong. From his comments, Thomas is also mightily worried about climate change and fossil carbon energy technologies (though some people involved with wind consider him a troll), so he might also be in that group.

Therefore what distinguishes you, Jerome and Eric from Jake, Thomas and me can only be that you identify a finite-planet resource problem which precedes (and, arguably, triggers) the financial crisis, and is a graver problem in the long run.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker

by Migeru (migeru at eurotrib dot com) on Wed Jan 25th, 2012 at 12:23:04 PM EST
[ Parent ]
At what point do you agree that finite resources begin to have an effect?

It's obvious we do have finite resources issues, what with many resources being - you know - finite.

Of course it's possible that in a different universe we might have solved them by asteroid mining, magic space unicorns, or in some other way.

It would be nice to think solutions are at least possible.

But - your argument makes no sense, because empirically we're limited by political frames that guarantee flawed and self-destructive decision making.

I'd suggest it's impossible to solve resource issues until we have more reality-based decision-making.

And since that seems to be in no danger of happening, and since no one here has any idea how to make it happen (I certainly don't) any argument about what might be possible in a different reality is moot.

Practically, it's not even obvious that better decision-making would solve the problem. We're not lacking in IQ collectively, but we've had very limited success doing anything practical here.

And that's after seven years or so.

Would we really be any better at running the world? Possibly we would - I'm not sure I'd want to lay odds either way.

But dealing with a potentially hostile population and an even more hostile capitalist nomenklatura is not a trivial challenge.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Wed Jan 25th, 2012 at 12:53:08 PM EST
[ Parent ]
In fact, I find very little difference between my opinions and those of yourself or Jake, on the issues under discussion.

Which is why I find mystifying and not a little frustrating when you use ecology as a wedge issue to differentiate us.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Wed Jan 25th, 2012 at 03:06:04 PM EST
[ Parent ]
Where Eric, Jerome, I, and various others disagree with you, Jake, and various others (I will not do you the disservice of bracketing you with Thomas the cornucopian sf fan) is that we identify a finite-planet resource problem which precedes (and, arguably, triggers) the financial crisis,

What triggers a financial crisis is usually uninteresting. When your financial or monetary system is built broken and you allow it to generate massive imbalances, then it will experience a crisis. Focusing on what triggers the crisis is an exercise in futility. Partly because you cannot know what causes the crack ferrets to begin their scurry for cover, and partly because if this trigger had not triggered the crash, then something else would have.

In the basic logic, it is akin to blaming the SEC for shutting down the Ponzi who was scamming you. The reason you lost money was that you bought into a Ponzi game, not that the SEC happened to bust it before you punted your share to a greater fool.

and is a graver problem in the long run.

Austerity prevents effective action against that problem. Therefore, flying rhetorical air support for the austeritarians Is Not Helpful. The austeritarians want people to believe that the crisis is inevitable rather than a political decision to favour creditors over productive enterprise. Repeated emphasis on the exogenous constraints on the economy supports this narrative.

I really don't understand why this is so difficult to grasp.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Jan 29th, 2012 at 12:56:23 AM EST
[ Parent ]
Thomas:

Desert solar + HVDC: The sahara is pretty darn big, and pretty darn sunshiny. Why the heck would anyone live a life of energy scarcity when instead you can simply make the solar array bigger? It is not like we are going to run out of sand.

Wind + Serious Storage; I really do want to see small mountains floating on hydralic pistons in my lifetime. Because that would be awesome

yes it would. easy to insure too...

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Wed Jan 25th, 2012 at 09:15:20 AM EST
[ Parent ]
Good point. In the end everything we is politics (or political). I'm just saying the problems we have today need a somewhat different set of politics/philosophies.

luis_de_sousa@mastodon.social
by Luis de Sousa (luis[dot]de[dot]sousa[at]protonmail[dot]ch) on Tue Jan 24th, 2012 at 02:02:17 PM EST
[ Parent ]
Migeru:
But Austerity, as a political and economic position, prevents consideration of a massive public investment program in renewable energy infrastructure because "we can't afford it" and "we've been living above our means".

it BS to cover the scam to bleed us dry and bake the climate selling us the last of the fossil fuels to continue happy motoring and keep from freezing. once again a good concept, austerity in this case, has been turned inside out to mean daylight robbery, when its original meaning is the other half of abundance, a natural cycle to do with seasons, overlayed with religious overtones.

monks observed austerities to sharpen spiritual perception. the public went through lent, moslems have ramadan... this is real austerity and has real value for us to accept, just as eternal unremitting growth we come to accept with maturity as being naive and not reality-based.

infinite excess needs austerity to stay balanced, too much of either is damaging.

right now the 1% are maxing out excess, and want the already poor and the middle class to make the sacrifices to balance the nations' books. sure that's what they want, no surprise there, the key is how much can they spin the electorate into accepting their terms.

so of course the more doomy they make our situation sound, the more they hope we'll buckle under and be good little sheepizens, now with davos imminent, the bbc is predicting economic armageddon with appropriate facial expressions, while all this sun and wind is blowing and shining around us.

if merkel wants to power trip the rest of us, let her mandate us following the intelligent policies germany exemplifies, such as rapid change to sustainable energy, their previous practice of tying local banking to local needs, and strong union involvement in macro policies.

imagine how much their precious consumer economy would recover if people didn't have to pay such high (rising) utility bills!!

not to mention, as Mig emphasises, the employment benefits.

it's the only intelligent choice we have, and our precious leaders are doing everything they can to blow smoke up our asses, laying out poverty consciousness as if they had just invented perpetual motion as panacea to all out problems.... as if they really were serious about balancing the budget anyway... what? deprive the banks of more interest?

sure...

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Wed Jan 25th, 2012 at 11:32:57 AM EST
[ Parent ]
I wouldn't blame the rating agencies this time. The downgrades are not evil attacks. Sure, they screwed up extremely badly over the US mortage crisis (and whenever the bank "advises" us on corporate bonds to buy and includes ratings from the agencies, everyone smirks knowingly, the bank guy somewhat shamefacedly), the rating agencies most certainly shouldn't be included by law in Basel regulations and so on. But they're not the bad guys here, not this time. The ECB and the euro political leaders are.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Fri Jan 27th, 2012 at 03:47:39 PM EST


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