b, I’ve been about what your understanding is of the current EU nations’ debt –and repayments under austerity measures, especially Greece right now,
The writer of this NYTimes article was on local public radio WNYC this morning, discussing how deep cuts forced on Greece are affecting regular people –10-30% wage cuts, higher prices, cuts to pensions, and so forth.
Not once during the discussion was the effect of Greece not having its own currency discussed or even mentioned. The effect of a possible Greek default on its loans was mentioned as affecting the EU and the big banks in many countries. Dangerous domino effects! One country defaulting after another…. Global meltdown-type effects…due to big bankd and Too Big To Fail banks exposures…. When the reporter was asked about the role of US banks on building the the Greek economic crash, she said she was not an economist and couldn’t really address that issue.
Oh. So, what, she’s giving local color as background to other Times reports?
Here in the US, austerity supporters, both economist types and especially Republican politicians but now Democrats as well, talk repeatedly about how what’s happening to Greece will happen to the US unless we adopt steep cuts to the social saftety nets, to Social Security, to health care (which means cut Medicaid first, affecting the poorer among us, but even Obama talks abou cuts to Medicare and SocSec — the dear conservative Corporatist that he is). When some economist or commenter points out that the US has its own currency and Greece does not, that is ignored or the speaker/writer is denigrated as not getting what’s necessary to do: Cut and slash. Oh, and, of course, cut taxes on the wealthy even more.
A commenter held up Germany as the “good” country in Europe, because it was not in debt. I understand that Merkel was talking about the creditors bearing some of the pain of some nations’ debts, but, today, the NYTimes is reporting she has agreed with France that there will be no burden placed on creditors. This morning, an NPR news summary reported the dollar was rising against the Euro; this afternoon, AP is reporting that the Euro is rising against the dollar.
(Throwing up arms, while typing)I am soooo not an economist; much of what I’ve learned comes from reading you and other econo blogs, some lefty blogs bringing econ news to “civilians,” so I do not know what to think about what’s going on and, importantly, what it portends. I think the austerity actions being taken will drive most people further into economic distress.

Posted by: jawbone | Jun 17 2011 18:36 utc | 4

Juan Cole is whining about the CIA trying to shut down his voice, while at the same time using his position to censor opinions he doesn’t like…
So Cole is shocked, just shocked that the CIA would be concerned about what he writes. But then he apparently limits the range of opinion on his blog, so that he can continue to get business with the government.
Either that, or he just finds it offensive when people point out that the US government has almost nothing to show for its democracy promotion efforts…except authoritarian regimes. And he finds it offensive when someone suggests that those perpetrating a “humanitarian intervention,” are so callously indifferent to human suffering that they don’t bother to report the numbers of casualties they cause.
It’s an interesting set of principles that guide liberal interventionists.

Posted by: JohnH | Jun 17 2011 18:56 utc | 6

basically, Germany is the China of Europe, they export more than they buy and amass huge savings which melt under the sun when buyers default :-))
they also subsidize wages to remain competitive, so employers can pay people less than they need to live, the government covers the rest
plus they are good at collecting taxes …

Posted by: somebody | Jun 17 2011 19:57 utc | 8

re b @ 7
You are right that Greece will soon default. There’s no point in Germany, through public funds, supporting the Greek economy. That could be endless.
We’re seeing here the beginnings of a revolt against the financial system. It is not a question of the euro, or Portugal or Ireland.
There’s no free lunch, as they say. The beneficiaries may be far away, but revolution may be the way that information is communicated to them.

Posted by: alexno | Jun 17 2011 20:36 utc | 10

b,
This is as good a thread as any to say thanks for opening the bar back up. I really enjoy what you do here. I hope you write when you are ‘right’ and relax when you want to.
Keep up all the good work you do.

Posted by: joseph | Jun 17 2011 21:18 utc | 12

sorry, messed up the links articles and titles…
1 person in custody in investigation near Pentagon
however, the weirdness still holds..

Posted by: Uncle $cam | Jun 17 2011 21:58 utc | 14

Adam Curtis writes about Syria.

What is happening in Syria feels like one of the last gasps of the age of the military dictators. An old way of running the world is still desperately trying to cling to power, but the underlying feeling in the west is that somehow Assad’s archaic and cruel military rule will inevitably collapse and Syrians will move forward into a democratic age.
That may, or may not, happen, but what is extraordinary is that we have been here before. Between 1947 and 1949 an odd group of idealists and hard realists in the American government set out to intervene in Syria. Their aim was to liberate the Syrian people from a corrupt autocratic elite – and allow true democracy to flourish. They did this because they were convinced that “the Syrian people are naturally democratic” and that all that was neccessary was to get rid of the elites – and a new world of “peace and progress” would inevitably emerge.
What resulted was a disaster, and the consequences of that disaster then led, through a weird series of bloody twists and turns, to the rise to power of the Assad family and the widescale repression in Syria today.
I thought I would tell that story.

Posted by: ahji | Jun 18 2011 0:48 utc | 16

http://agonist.org/20110616/hardline_imf_forced_germany_to_guarantee_greek_bailout
This looks interesting.

The Guardian – Acting IMF chief threatened to trigger sovereign default if Berlin failed to come to rescue of Greece
Germany was forced to agree to bail out Greece for the second time in a year under strong pressure from the International Monetary Fund following the resignation last month of its head, Dominique Strauss-Kahn, the Guardian has learned.
Under its acting chief, the American John Lipsky, the IMF has taken a more hardline stance and it warned the Germans in recent weeks that it would withhold urgently needed funds and trigger a Greek sovereign default unless Berlin stopped delaying and pledged firmly that it would come to Greece’s rescue.
Senior officials and diplomats in Brussels confirmed that the IMF threat to pull the plug on its funding – in stark contrast to the more emollient line of Strauss-Kahn – had been defused because of a German climbdown.

Via Tina at The Agonist.
It does sound as if everyone would be better off the sooner Greece defaults and the house of cards comes down.
How bad will it be? And…what will/might Wall Street’s men, Obama and Geithner, do about it?

Posted by: jawbone | Jun 18 2011 1:37 utc | 18

President Obama, former adjunct Constitutional law professor, has taken on the role of WH legal counsel in determining that what the US id doing in Libya is not “hostilities.” Pentagon and Dept. of Justice legal opinions were rejected.

President Obama rejected the views of top lawyers at the Pentagon and the Justice Department when he decided that he had the legal authority to continue American military participation in the air war in Libya without Congressional authorization, according to officials familiar with internal administration deliberations.
Jeh C. Johnson, the Pentagon general counsel, and Caroline D. Krass, the acting head of the Justice Department’s Office of Legal Counsel, had told the White House that they believed that the United States military’s activities in the NATO-led air war amounted to “hostilities.” Under the War Powers Resolution, that would have required Mr. Obama to terminate or scale back the mission after May 20.
But Mr. Obama decided instead to adopt the legal analysis of several other senior members of his legal team — including the White House counsel, Robert Bauer, and the State Department legal adviser, Harold H. Koh — who argued that the United States military’s activities fell short of “hostilities.” Under that view, Mr. Obama needed no permission from Congress to continue the mission unchanged.

The Nobel Peace Prize laureate president now cements and extends the right of US presidents to define “hostilities,” and to use any armaments anywhere for these “kinetic actions.”
http://www.nytimes.com/2011/06/18/world/africa/18powers.html?partner=rss&emc=rss&src=igw
Purportedly Abraham Lincoln said that “A lawyer who represents himself has a fool for a client.”

Posted by: jawbone | Jun 18 2011 3:26 utc | 20

@somebody – only in Voodoo economics does inflation increase real demand. Indeed there was a period of “stagflation” a few decades ago where high inflation and lack of demand for several years appeared at the same time.

Posted by: b | Jun 18 2011 10:32 utc | 22

Hello b., I understood stagflation happened because everybody raised their prices same as inflation?
No. There was high unemployment and workers could not raise their price. Thus there was monetary inflation but it in no way increased demand as in real terms, ex-inflation, income was sinking.
Aggregate demand is a valid concept. But has to apply real numbers, i.e. ex inflation, to use it.
Inflation will shrink debt in real terms. But as there is no way to increase income in an environment of high unemployment by increasing wages, inflation will lower income in real terms. As Under inflation and high unemployment debt and income in real term will shrink, Spending, i.e. aggregate demand, will thereby shrink too.

Posted by: b | Jun 18 2011 13:09 utc | 24

no, this is politics only – they will not let Greece default
http://www.bloomberg.com/news/2011-06-16/default-by-greece-almost-certain-greenspan.html
Obama is up for elections, Sarkozy is up for elections …
http://www.bloomberg.com/news/2011-06-17/eu-prepares-new-greece-aid-as-merkel-backs-ecb.html
and as they are all so afraid of the unforeseeable, uncontrollable repercussions of a default, Greeks have a very good chance to negotiate
and I am sure, Germany does not really mind the devaluation of the Euro …
b. unemployment is no longer an issue in Germany, we have this demographic problem … let the Greeks come (they are here already, I know …)

Posted by: somebody | Jun 18 2011 19:44 utc | 26

somebody you are probably, but the greeks have to be tough

Posted by: Noirette | Jun 19 2011 15:32 utc | 28

Noteworthy: John Dvorak on the looming internet clamp-down.

Posted by: Guthman Bey | Jun 19 2011 20:48 utc | 30

Thanks to Noirette for the chart (from the NYTimes) in 25. The size of Italy’s debt to France indicated there is really eye-popping. I would be interested in hearing further detail on that “fat arrow”, so if there are any financial technicians lurking hereabouts please enlighten us with regard to the banks (or agencies) involved, and related matters.

Posted by: Hannah K. O’Luthon | Jun 20 2011 4:55 utc | 32

Most sectors of the US economy have already reduced their fat content to nearly zero and are now shedding themselves of muscle in order to give the appearance that they are making profits. But the medical-industrial complex is still making enormous profits, despite the fact that it is still very fatty and whatever muscle it does have is being suffocated by layers and layers of fat. The same thing can be said about the military-industrial complex. But I’m afraid that Obama-care and Obama’s love for war will only increase the fat content of both of them. And what little muscle they do have with be quickly converted into fat. Some will argue that this proves that medical/military Keynesianism is a total failure, but others, like myself, will argue that this proves that capitalism is on its death bed, dying of a deadly cancer induced by government-backed corporate cronyism.

Posted by: Cynthia | Jun 21 2011 0:49 utc | 34

Claudio’s comment at 33 is well taken, although in matters of international finance and markets, it’s often difficult to distinguish propaganda from analysis. Put in another way, facts tend not to speak for themselves, and interpreters have biases. Nevertheless, stories like this one on Libya’s beef with Goldman-Sachs or this one regarding grand larceny in Iraq lead one to believe that the crassly pecuniary aspects influencing “political” decisions are frequently much greater than is imagined by outsiders, although this is almost never admitted by insiders.

Posted by: Hannah K. O’Luthon | Jun 21 2011 7:45 utc | 36

Claudio,
Even though Keynes was right that capitalism can be saved by using fiscal stimulus to stimulate growth in the jobs market, he was wrong to assume that this will always work. This prescription to save our “jobs friendly” form of capitalism will only work if we still had a viable manufacturing base, as was the case throughout most of the Industrial Revolution, and if we had the authority to penalize our multinational corporations for shipping jobs overseas. So until we restore our manufacturing base and start penalizing our multinational corporations for shipping jobs overseas, which will enable us to get back to treating our workers as assets rather than as liabilities, no amount of fiscal stimulus at the Federal level will do a thing to stimulate growth in our jobs market!
Thanks to a global strain of corporatism being unleashed by our multinational corporations, capitalism as we know it is dying, which is also causing our economy at the local level is die off as well, particularly in terms of our jobs market. This is why Keynesian economics won’t be able to save capitalism this time around, I’m afraid.

Posted by: Cynthia | Jun 21 2011 16:01 utc | 38

Cynthia, what we are witnessing is the end of the compromise between capitalism and modern societies; “nation building” (infrastructures, mass markets, etc) is over, it isn’t a profitable business anymore, now the real business lies in “nation dismantling” (privatization, delocalization, etc); so I insist: capitalism is thriving, our societies are declining
current dominating ideology (and marxism too) prevents us from distinguishing the two concepts, and lumps together capitalism, market economy and modern societies in expressions as “capitalist society”, “capitalist system”, “capitalist economy”, etc; that’s why we can’t manage to fight capitalism while defending (and changing) the advanced societies we build, for the better or the worse, over the last two centuries; we seem to think it was “capitalism” that build them, and can’t imagine a society where regulated markets and corporations (not “too big to fail”) exist, but capitalism is repressed
at the base of this approach is the decision to use workable definitions of capitalism, an overloaded term: I mean political definitions, that is definitions that are politically usable
I suggest two guides:
1) Fernand Braudel in “The Dynamics of Capitalism” (1985, currently unavailable online, it seems) proposes to define capitalism as that level of affairs based on alliances between state sectors, finance and big business, a level that lives above the normal market economy, that usually preys on it and often negates it, uses war, political influence and access to privileged information to secure immense profits reserved to a selected few
2) in “The Many-Headed Hydra: Sailors, Slaves, Commoners and the Hidden History of the Revolutionary Atlantic”, Peter Linebaugh and Marcus Rediker vividly describe, from the point of view of the victims, the “logic of capitalism” (my expression) at work in the era of modern and predatory states: expropriation (closures of the commons, colonialism), forced labor (slaves, serfs, convicts, orphans, poor, debtors, but above all the expropriated themselves), looting (wars)
note that these aren’t political theorists or economists, they are historians who use the term capitalism in so much as necessary to describe concrete phenomena
our complex industrial societies, what many refer to as “the system”, aren’t capitalism, nor a creation of his, they are our creation; it was us, the people, albeit often captive of the promises and myths of productivism and scientific progress, that provided the creativity, the ingenuity, the technological advances, the personal discipline, the entrepreneur abilities that transformed for the better or the worse our societies in the XIX century and beyond; for capitalism, this process was simply a business (mass production and infrastructures financed with public money); in part it fueled it, in part it distorted it; today, as I said the real business of capitalism lies in the dismantling of great part of “the system”;
neoliberalism advocated free movement for capitals, which means a decoupling between wealth and the country in which and thanks to which such wealth was amassed; deregulation, attacks on workers’ rights and on public social policies, tax cuts for the rich, privatizations, etc: all measures that revived capitalist forces and made them dominant again as in the second half of the XIX century; but investment shift from production and services to a bloated financial sector, reveal the predominantly parasitical character of capitalism in this phase (as at the end of the XIX century) (see Giovanni Arrighi, “The Long Twentieth Century”);
and capitalism, stronger than ever (without the constrains of a strong state and of organized democratic forces), is now showing its true original traits, those that characterized its origins in the XVI century: expropriation, forced labor, looting
this is why the so-called “crisis of capitalism” presents itself on one hand with huge enrichment of profiteers of every kind, and on the other hand as a series of national crisis: because real capitalism is thriving, while our ”system”, the society we built, is being sold piecemeal and dismantled;
marxists, confusing capitalism (a fluid power alliance) and industrial society (a collective historical construction) under abstractions such as “capitalist society”, live under a tragic optical illusion that prevents them to distinguish what must be fought and what must be defended, and this accounts for their past failures and the present powerlessness of the democratic forces in general
as for Keynes, it will be matter for another post; this one exhausted me enough (and also will anyone who dare try to read it and make sense of it, I’m afraid)

Posted by: claudio | Jun 22 2011 23:32 utc | 40

hkol @ 39 – i will have to read more on that b/c i hadn’t followed it. not sure what mountain’s connections are to officials in eritrea but i’ve found some of his articles interesting, to say the least, such at this one:
Gayle Smith the liaison between the CIA and Meles Zenawi

Once the mistress of a Marxist guerilla fighter in the Horn of Africa, today Gayle Smith is a senior advisor to Barack Obama in the White House, USA.
Gayle Smith started her career in service to the American Empire as an undercover CIA operative posing as a journalist in the Horn of Africa in the late 1970s. Taking her duty seriously, she became the mistress of a guerilla fighter known by the nom de guerre of “Jamaica” in the Marxist-Leninist-Enver Hoxha-ite Tigrayan Peoples Liberation Front (TPLF), then fighting for independence from the Soviet Union supported Mengistu regime in Ethiopia.
As a close confidant to the leadership of the TPLF, Gayle Smith would spend the decade of the 1980s as the liaison between the CIA and Meles Zenawi, the leader of the TPLF who was to become the prime minister of Ethiopia after the defeat and overthrow of the Mengistu regime by the Eritrean independence movement in 1991.

Posted by: b real | Jul 1 2011 6:17 utc | 42