In which I defend Wolfgang Schäuble

by rz Wed Jul 15th, 2015 at 03:29:40 AM EST

Wolfgang Schäuble, or Dr. Schäuble as many people have started to call him, is without a doubt a total dick. He has basically zero idea of macro economics. He professes to believe in rules, but only those that he likes. Without any doubt he is one of the key figures who is to blame for the current disastrous state of Eurozone politics and economics.

Yet... somehow in recent attacks on Dr. Schäuble I detected a somewhat contradictory set of arguments. Lets call it Euro Schizophrenia.

Basically it is my opinion that the Euro is beyond redemption. While I am not convinced that the Euro is fundamentally unworkable, at present the Eurozone in economically and politically at a stage were I see little.

From this I conclude that it is a good idea to leave the Euro. Now it seems that Schäuble wanted to convince Varoufakis and Tsipras to leave the Euro from the very start of the negotiations. Lets be clear here: This is one of the most reasonable things Schäuble has done recently.

Of course the 'temporary exit' thing was total bullshit, and the way it was leaked was unacceptable. Yet the general idea to help Greece leave the Euro is a good one.

Varoufakis and Tsipras should have taken the offer.

In which I defend Wolfgang Schäuble | 24 comments (24 topical, 0 editorial, 0 hidden)

Re: In which I defend Wolfgang Schäuble (none / 1)

I am sorry I am a bit short on time so I provided no links. I hope to add some stuff in the comments.

by rz on Wed Jul 15th, 2015 at 03:30:14 AM EST

Re: In which I defend Wolfgang Schäuble (none / 1)

I think the temporary part was there to fudge the target2 balances.

by generic on Wed Jul 15th, 2015 at 04:04:27 AM EST

Re: In which I defend Wolfgang Schäuble (none / 0)

Temporary exit is the kind of bullshit German economic "authorities" such as Hans Werner (Un)Sinn come up with. And indeed it's all about Target2.

But it's perfectly possible to exit the Euro without exiting Target2. Target2 is the payment clearing system of the European System of Central Banks.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Carrie (migeru at eurotrib dot com) on Wed Jul 15th, 2015 at 04:35:01 AM EST
[ Parent ]

Re: In which I defend Wolfgang Schäuble (none / 0)

I'm finding this as early as 2013, but (Un)Sinn may have proposed it earlier: Prof. Hans-Werner Sinn: "Greece should exit the Eurozone as quickly as possible and be offered a return ticket!" (Klaus Kastner, April 18, 2013)

I herewith repeat my old argument: Greece should hold on to the Euro but simulate a situation, on a temporary basis, as though it had returned to the Drachma. That would entail, among others, special taxes on imports; special incentives for new domestic production and for exports; and - above all - special incentives for new foreign investment.
If one doesn't like that approach, then the next best solution to me would be the introduction of a new local (parallel) currency in addition to the Euro. Also on a temporary basis.
Why not a clear-cut Grexit altogether? That depends on one's vision of Greece's future. If one shares the vision, which I do, that Greece indeed has the chance to become a modernized economy with an adequate level of own value creation, then a Grexit would wipe out that vision. The last 3 years have shown that even with the greatest pressure on society, there is an enormous popular resistance to make the necessary reforms (cutting wages/salaries are not reforms, in my opinion). A Grexit would do away with all such pressures and the likelihood of Greece then making the necessary reforms voluntarily is close to zero, in my opinion.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Carrie (migeru at eurotrib dot com) on Wed Jul 15th, 2015 at 04:47:22 AM EST
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Re: In which I defend Wolfgang Schäuble (none / 1)

Wow, that makes about as much sense as a gas-powered, turtleneck sweater.

by rifek on Thu Jul 16th, 2015 at 12:08:44 AM EST
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Re: In which I defend Wolfgang Schäuble (none / 0)

It is beyond my comprehension why Varoufarkis did not accept Schaule's offer for a soft Grexit

Hey, Grandma Moses started late!

by LEP on Wed Jul 15th, 2015 at 07:52:09 PM EST

Re: In which I defend Wolfgang Schäuble (none / 1)

This might be the reason.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Wed Jul 15th, 2015 at 11:10:10 PM EST
[ Parent ]

Re: In which I defend Wolfgang Schäuble (none / 1)

It's easier for Tsakalotos to imagine the end of capitalism then the end of the EZ/EU, his preferred idea is to change them from within.

More of his views:

"Communist Dilemmas on the Greek Euro-Crisis: To Exit or Not to Exit?"
Christos Laskos, John Milios and Euclid Tsakalotos
http://www.workersliberty.org/system/files/milios.pdf

by Prospero on Thu Jul 16th, 2015 at 03:04:31 AM EST
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Re: In which I defend Wolfgang Schäuble (4.00 / 2)

Probably because Schäuble's offer does not include debt restructuring, all debts remain denominated in Euros, and there is this harebrained idea that the grexit is temporary.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Carrie (migeru at eurotrib dot com) on Thu Jul 16th, 2015 at 05:22:45 AM EST
[ Parent ]

Re: In which I defend Wolfgang Schäuble (none / 1)

Wolfgang Münchau:

Greece's brutal creditors have demolished the eurozone project - FT.com

On Saturday, Wolfgang Schäuble, finance minister, insisted on a time-limited exit -- a "timeout" as he called it.
I have heard quite a few crazy proposals in my time, and this one is right up there. A member state pushed for the expulsion of another. This was the real coup over the weekend: not only regime change in Greece, but also regime change in the eurozone.

by Bernard (bernard) on Thu Jul 16th, 2015 at 12:46:24 PM EST
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Re: In which I defend Wolfgang Schäuble (none / 1)

Quite Good

random-austerity-measure-generator

by fredouil (fredouil@gmailgmailgmail.com) on Thu Jul 16th, 2015 at 12:13:42 PM EST

Re: In which I defend Wolfgang Schäuble (none / 1)

Combine that with the "SJW blog and argument generator" and we can shut down all other political reporting.

by Number 6 on Fri Jul 17th, 2015 at 05:48:30 AM EST
[ Parent ]

Re: In which I defend Wolfgang Schäuble (none / 0)

But we need some commentary as well. How about Thomas Friedman?

by gk (gk (gk quattro due due sette @gmail.com)) on Fri Jul 17th, 2015 at 05:51:29 AM EST
[ Parent ]

Re: In which I defend Wolfgang Schäuble (none / 0)

Ooh, can't believe I forgot the moustache of understanding!

Good suggestion.

by Number 6 on Fri Jul 17th, 2015 at 07:10:38 AM EST
[ Parent ]

Re: In which I defend Wolfgang Schäuble (none / 1)

six months six months six months

The world is flat... I-Phone in Teheran...

by IM on Fri Jul 17th, 2015 at 10:10:50 AM EST
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Moustachebot (none / 0)

O God...

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Carrie (migeru at eurotrib dot com) on Tue Jul 21st, 2015 at 12:47:04 AM EST
[ Parent ]

Re: In which I defend Wolfgang Schäuble (none / 0)

Thomas Friedman Op-Ed Generator: Greece: the Beginning or the End? (July 21, 2015)

What has been going on in Greece is truly historic, and it has been on my mind ever since it began. What's important, however, is that we focus on what this means to the people. The current administration seems too caught up in dissecting the macro-level situation to pay attention to how their people are doing. Just call it missing the myths for the lie.
...
So what should we do about the chaos in Greece? Well, it's easier to start with what we should not do. We should not let seemingly endless frustrations cause the people of Greece to doubt their chance at progress. Beyond that, we need to be careful to nurture the seeds of democratic ideals. The opportunity is there, but I worry that the path to moderation is so poorly marked that Greece will have to move down it very slowly. And of course Athens needs to come to the table.
...
I don't know what Greece will be like a few years from now, but I do know that it will remain true to its cultural heritage, even if it looks very different from the country we see now. I know this because, through all the disorder, the people still haven't lost sight of their dreams.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Carrie (migeru at eurotrib dot com) on Tue Jul 21st, 2015 at 12:33:38 PM EST
[ Parent ]

Re: In which I defend Wolfgang Schäuble (none / 0)

Far too deep for ordinary people to comprehend. This is a job for Captain Pornstache!

by rifek on Mon Jul 27th, 2015 at 12:42:00 AM EST
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Re: In which I defend Wolfgang Schäuble (none / 0)

Did anyone else see Wolfy's Spiegel interview? Claiming there is no German dominion over the EU? How can anyone take the word of a man who can lie like that?

by rifek on Fri Jul 17th, 2015 at 09:04:40 PM EST

Re: In which I defend Wolfgang Schäuble (4.00 / 5)

Easy: there have been 17 other finance ministers who played along to his lie, without exception. If you read the German media, much of the German elite really believes that this was a defence of Europe. It is more the exception when a politician or pundit hints that the real targets of the Greece policy were France and Italy.

This is another reason why, for me, the simultaneous "No vote equals Euro exit" declarations was a defining moment: when Hollande and Renzi assist to the creation of as new weapon against them, they and their parties are truly beyond hope.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Mon Jul 20th, 2015 at 03:07:49 PM EST
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Re: In which I defend Wolfgang Schäuble (none / 0)

That was indeed a low point.

by rz on Mon Jul 20th, 2015 at 03:21:57 PM EST
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Re: In which I defend Wolfgang Schäuble (none / 0)

Renzi won't mind if it's used against Italy.
On the contrary... His buddies in finance will make things right for him.
It's not just the economic ministers covering for each other!

'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 Mon Jul 20th, 2015 at 08:45:17 PM EST
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Re: In which I defend Wolfgang Schäuble (none / 0)

I think you're not paying attention.

The question s why it took until now for France and Italy to do something.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Carrie (migeru at eurotrib dot com) on Tue Jul 21st, 2015 at 12:44:21 AM EST
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Re: In which I defend Wolfgang Schäuble (none / 1)

I can see why the elite believe this. In their view, it was a defense of Europe. The part of Europe that matters. I.e. them.

by rifek on Mon Jul 27th, 2015 at 12:45:42 AM EST
[ Parent ]

In which I defend Wolfgang Schäuble | 24 comments (24 topical, 0 editorial, 0 hidden)

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In which I defend Wolfgang Schäuble

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