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Is Greece going to set off the long feared next wave of the Great Recession?

 
 
Ionus
 
  1  
Reply Fri 23 Apr, 2010 11:13 pm
@georgeob1,
I dont think the exception disproves the rule. Australia through different and tighter banking regulations has avoided a recession. These are the models that should be followed worldwide rather than say every man for themselves, because there are a consierable number of little guys out there who will suffer every time regardless of their individual policies. They are tied to a big economy, and they have trouble when the big economies do.
georgeob1
 
  1  
Reply Sat 24 Apr, 2010 10:56 am
@Ionus,
Then perhaps Australia can conquer the world and impose its superior model everywhere. The essential point here is we don't have either an existing world government, or the means to create one, particularly one that would be acceptable to all, and preserve the freedoms we value.
spendius
 
  1  
Reply Sat 24 Apr, 2010 12:08 pm
@georgeob1,
What evidence have you George that "high public debt, inflexible labor markets, bloated unionized government bureaucracies, generous public social programs and already high taxes" are not in the service of preserving the freedoms you value.

Have you considered that there might be deeper structural reasons for those things? They do partake of the "horizontal surface".

Laurence Sterne in Tristram Shandy Vol I Chapter XVIII (1760--30 years before the French Revolution) has this--

Quote:
He was very sensible that all political writers upon the subject had
unanimously agreed and lamented, from the beginning of Queen Elizabeth's
reign down to his own time, that the current of men and money towards
the metropolis, upon one frivolous errand or another,--set in so
strong,--as to become dangerous to our civil rights,--though, by the
bye,--a current was not the image he took most delight in,--a distemper
was here his favourite metaphor, and he would run it down into a
perfect allegory, by maintaining it was identically the same in the body
national as in the body natural, where the blood and spirits were
driven up into the head faster than they could find their ways down;--a
stoppage of circulation must ensue, which was death in both cases.

There was little danger, he would say, of losing our liberties by
French politicks or French invasions;--nor was he so much in pain of a
consumption from the mass of corrupted matter and ulcerated humours in
our constitution, which he hoped was not so bad as it was imagined;--but
he verily feared, that in some violent push, we should go off, all at
once, in a state-apoplexy;--and then he would say, The Lord have mercy
upon us all.

My father was never able to give the history of this distemper,--without
the remedy along with it.

'Was I an absolute prince,' he would say, pulling up his breeches with
both his hands, as he rose from his arm-chair, 'I would appoint able
judges, at every avenue of my metropolis, who should take cognizance of
every fool's business who came there;--and if, upon a fair and candid
hearing, it appeared not of weight sufficient to leave his own home, and
come up, bag and baggage, with his wife and children, farmer's sons,
&c. &c. at his backside, they should be all sent back, from constable
to constable, like vagrants as they were, to the place of their legal
settlements. By this means I shall take care, that my metropolis
totter'd not thro' its own weight;--that the head be no longer too big
for the body;--that the extremes, now wasted and pinn'd in, be restored
to their due share of nourishment, and regain with it their natural
strength and beauty:--I would effectually provide, That the meadows and
corn fields of my dominions, should laugh and sing;--that good chear and
hospitality flourish once more;--and that such weight and influence be
put thereby into the hands of the Squirality of my kingdom, as should
counterpoise what I perceive my Nobility are now taking from them.

'Why are there so few palaces and gentlemen's seats,' he would ask,
with some emotion, as he walked across the room, 'throughout so many
delicious provinces in France? Whence is it that the few remaining
Chateaus amongst them are so dismantled,--so unfurnished, and in so
ruinous and desolate a condition?--Because, Sir' (he would say) 'in that
kingdom no man has any country-interest to support;--the little interest
of any kind which any man has any where in it, is concentrated in the
court, and the looks of the Grand Monarch: by the sunshine of whose
countenance, or the clouds which pass across it, every French man lives
or dies.'


Which may be the only structural reason with the others born out of it.

georgeob1
 
  1  
Reply Sat 24 Apr, 2010 03:13 pm
@spendius,
Well, if you would give me a concrete example of those "deeper structural reasons", I might be more inclined to pursue your point.

The fact is the issues I cited are precisely those that drove Greece over the edge, and now threaten other countries in the EU, and, as things are going now, my own.

Sterne's views as you quoted them appear to have much more to do with the rapid urbanization of Britain that occurred during the 19th century and the then contemporary political struggles between landowning classes and urban labor over things like the Corn Laws and the then yawning gap between rich and poor (orders of magnitude greater than what exists today - even in the USA).
spendius
 
  1  
Reply Sat 24 Apr, 2010 05:27 pm
@georgeob1,
Quote:
Well, if you would give me a concrete example of those "deeper structural reasons", I might be more inclined to pursue your point.


The intellect of the giant metropolis. Alienated from nature. Rootless. Atheist. On its last fling. Hubris. Denial. State-apoplexy.
spendius
 
  1  
Reply Sat 24 Apr, 2010 05:41 pm
@spendius,
Actually George it is of no consequence whether you pursue the point or not. It is a description of a reality. The head is not only too big for the body, it is, like all heads, imbued with limitless vanity. Discipline is electorally impossible.

"Rich and poor" are now psychological categories.
0 Replies
 
Chumly
 
  1  
Reply Sat 24 Apr, 2010 05:47 pm
@spendius,
Given the Greeks popularized philosophy and anal sex perhaps there might be deeper structural reasons for those things.
0 Replies
 
Ionus
 
  1  
Reply Sat 24 Apr, 2010 08:18 pm
@georgeob1,
Quote:
Then perhaps Australia can conquer the world and impose its superior model everywhere.
Probably not. Germany tried and failed and I dont think we will do any better.
Quote:
The essential point here is we don't have either an existing world government, or the means to create one, particularly one that would be acceptable to all, and preserve the freedoms we value.
We have the ability and have done in the past, to sign world wide agreements. National governments worry that these will evolve into a loss of power for themselves. Nevertheless. I maintain that we need to prevent world wide economic disasters because if we have a real disaster, the economy might follow, esp now we have no reserves.
georgeob1
 
  1  
Reply Sat 24 Apr, 2010 09:00 pm
@Ionus,
The EU had a host of detailed agreements outlining rules for both limiting national debt and annual deficits as well as timely disclosure to the EU financial authorities. Evidently these weren't enough to dissuade Greek politicians who were unwilling to risk their personal political fortunes by taking on the beneficiaries of the runaway government borrowing - the employees of a(politically) bloted government brueaucracy; citizens comfortable with social benefits they couldn't afford, and Greek taxpayers, who, to evate the already confiscatory tax rates simply expanded the underground economy and evaded paying taxes. Now the Government employees, seeing their gravy train in jeapordy, are rioting in the streets, and the EU officials, who likely knew or at least suspected this long ago are feigning amazement at Greek perfidy.

If such agreements are useless and politically unworkable in the EU, which has excellent communications; fairly common cultural values; highly integrated economies; and a competent Union bureaucracy - then what possible hope could there be for the United Nations or a multi continental agreement. What you are advocating is an illusory fantasy, not a real possibility. As the Europeans are discovering, the illusion of an agreement based "solution" is worse than no solution at all.
Ionus
 
  1  
Reply Sun 25 Apr, 2010 12:10 am
@georgeob1,
Those agreements were about common aims, whereas I was suggesting changing the mechanisms by which aims are achieved, such as common labour laws, banking regulations, borrowing mechanisms, trading and competition regulations and taxes/government subsidies. The EU is a long way from an equal playing field and most agreements to date are watered down excessively.
0 Replies
 
Setanta
 
  1  
Reply Sun 25 Apr, 2010 02:32 am
Can someone tell who, with a reasonable claim to expertise (i.e., not someone who posts here, but someone in the real world) has "long feared" an alleged "next wave" of a putative "Great Recession?" For perspective, the Great Depression in European eyes was that which lasted from 1875 to 1893--18 years. What Americans call the "Great Depression" lasted from 1929 until our entry into the Second World War in 1941--12 years. We're currently not even two years down the road on an economic downturn which has been far less grim that was predicted.
hawkeye10
 
  1  
Reply Sun 25 Apr, 2010 03:20 am
@Setanta,
Quote:
We're currently not even two years down the road on an economic downturn which has been far less grim that was predicted.
It has been devastating. You sir, are not paying attention

Quote:
It will get ugly, make no mistake. How ugly? Wait until those things we consider “rights” start to get squeezed in the interest of what our ruling politicians decree as the national interest. The uproar that greeted the mere suggestion that health care resources for the elderly might be circumscribed was genteel debate by contrast with what’s ahead. The notion that rights can be rescinded as easily as they have been obtained is not a happy thought. Case in point: my mother recalled that she and my father had to marry in secret and she continued to live with her parents throughout 1936 because the New Dealers who controlled the Pennsylvania state legislature had decreed that no married woman could be a public school teacher or hold another state job when a jobless married man could take her place. Try that out on the next dinner table debate you attend and see how many bread rolls get thrown at you by women who are convinced that it can’t happen again; times have changed, they’ve come a long way, baby. Well, yes. Nowadays most women don’t have the option not to work.

HOW LONG WILL THIS DARK AGE LAST? Ask the Japanese, who have been at it for nearly 20 years. Ask the Chinese, who are just making a heroic jump out of a medieval time-warp into a modern industrial urban society only to teeter on the brink for lack of enough food, water, and arable land even as they accumulate piles of American dollars that lose value every day. How long? As a teenager growing up in Tampa in the 1950s I recall traveling south through a ghost town called Sun City on the way to Sarasota. This abandoned village had streets, municipal buildings, sidewalks, even steps up to residential lots, all laid out during the Florida land boom of the 1920s. What it lacked were houses and residents. And so it stayed for nearly 40 years, until Del Webb developed the retirement community and resort nearby and appropriated the name. Now people are fleeing Florida once again, and ghostly, empty high-rise condos dot the landscape.

Now ask yourself, how long will it take to reclaim the empty neighborhoods in Detroit, the empty condos in Las Vegas, or Phoenix, or, for that matter, in the McMansion-style suburbs that surround Washington, D.C.? What new jobs can be created to absorb the millions who have not only lost their jobs but who have stopped looking? What will those jobs make, and who will buy what is being offered?

Buddy, can you spare a dollar? Or maybe a Krugerrand?
http://spectator.org/archives/2010/02/23/the-great-recession-of-2011-20/2

James Srodes, an author and broadcaster, is a former Washington bureau chief for Forbes and Financial World magazines. His latest book is Franklin: The Essential Founding Father. His email address is [email protected].
0 Replies
 
spendius
 
  1  
Reply Sun 25 Apr, 2010 03:22 am
@Setanta,
How does someone who doesn't post here going to answer that?

What's the "real world"? I own and run a fairly prosperous business established over 35 years dealing daily with that segment of the general public which invests in home improvement, salespeople of suppliers, buyers in industry, officials in local government, accountants, Custom and Excise and Inland Revenue staff and vehicle and machinery repair and maintenance experts. I also go to the pub everynight to socialise with the locals and quench my thirst.

Is that not the real world or is it the case that Setanta is claiming to be in the real world simply by the expedient of suggesting that we who do post here are not?

I'm inclined to think that Setanta's addiction to sneering at people he himself has chosen to be in contact with is the only purpose of his ridiculous post. The rest of the drivel is common knowledge.
hawkeye10
 
  1  
Reply Sun 25 Apr, 2010 04:00 am
@spendius,
Quote:

How does someone who doesn't post here going to answer that?

It is actually easy to do of one replaces "great recession" with "this humongous pile of **** that we are in"

Quote:

WSJ: Are we seeing a second-wave of financial distress?

REINHART: Ken and I have been arguing fairly forcefully that historically, following a wave of financial crises especially in financial centers, you get a wave of defaults. You go from financial crises to sovereign debt crises. I think we’re in for a period where that kind of scenario is very likely. I don’t think a repeat of the fall of 2008 is at stake here, where it looks like the world is going to end. But I do think there is still, for reasons that are beyond me, quite a bit of complacency out there. Eastern Europe is another source of concern, and Europe has limited resources. You can rescue one. You can maybe rescue two. But you can’t rescue all of them. The Baltics are very vulnerable. Romania is vulnerable. Hungary is vulnerable. Problems in these countries feed back to their lenders. Austrian bank exposure to Eastern Europe is great. The Italian exposure to Eastern Europe is great. The Swedish exposure is non-trivial. You started out with a major financial crisis in 2007 and 2008, in which some of these countries have seen their worst recessions, in a way that really harms fiscal sustainability, even if you were in a good shape fiscally at the outset of the crisis. It is the pattern that has been prevalent in the past, that these major financial crises have been followed by an afterwave of debt crises.

WSJ: What point, in the hundreds of years of history that you looked at, does this moment look most like?

REINHART: With all of the differences in policy responses taken into account, the Great Depression is still the benchmark. We have not seen an economic downturn so synchronized, a downturn in trade so sharp and widespread, post-World War II. We have not seen this many economies in the advanced world, which accounts for the lions’ share of world GDP, simultaneously have financial crises since the 1930s. Nothing even close

http://blogs.wsj.com/economics/2010/02/05/qa-carmen-reinhart-on-greece-us-debt-and-other-scary-scenarios/

University of Maryland Professor Carmen Reinhart co-authored one of the most important economics books of 2009, “This Time Is Different: Eight Centuries of Financial Folly,” a catalogue of financial crises, their causes and consequences. In January, Ms. Reinhart and her co-author, Harvard Professor Kenneth Rogoff, both former International Monetary Fund economists, produced a sobering follow-on to the book, a new paper called, “Growth in a time of Debt,” which reviewed the painful consequences of the rising government debt loads that often follow financial crises.
0 Replies
 
Setanta
 
  1  
Reply Sun 25 Apr, 2010 04:18 am
None of which demonstrates that we are in a "Great Recession," that Greece is going to set off a "long feared" next wave of said putative "Great Recession." All of these dire warnings are predicated upon an assumption that continual growth is either possible or desirable. It certainly is desirable for the modern world's biggest set of gamblers--capitalists. There is no good reason to assume that because this economic system, as the "last man standing" after the collapse of the Soviet Union, is the best available system for meeting the needs of the majority of the population. There is no good reason to assume that a system which punishes small investors, small holders and small craftsmen should be continually propped up, especially not with government debt.

Funny how General Motors was able to pay off its loans, despite the dire warnings of the legion of Chicken Littles in this country, the majority of whom seem to be conservative panic mongers who continually cry up the dangers of government regulation, claiming it restricts freedom, when government regulation of capitalist greed is the only thing which has consistently averted major economic catastrophe since the middle of the 20th century.
hawkeye10
 
  1  
Reply Sun 25 Apr, 2010 04:25 am
@Setanta,
Quote:
Funny how General Motors was able to pay off its loans, despite the dire warnings of the legion of Chicken Littles in this country
GM took money from TARP to pay off the loans....they paid us back WITH OUR OWN MONEY! Nice trick, but the fact that you dont know this suggest that you should stick to your specialty.....regurgitating history books.
maporsche
 
  1  
Reply Sun 25 Apr, 2010 06:16 am
@hawkeye10,
LOL I was going to say the same thing (minus the personal insult).

GM has pulled the wool over many eyes with their current trick. I think I even saw Obama make mention of how good GM is doing because they paid us back.
0 Replies
 
Ionus
 
  1  
Reply Sun 25 Apr, 2010 08:20 pm
I wonder if the american banks factored into their risk assessment that the government wouldnt let them fail ? Perhaps Greece did the same thing to the EU.
hawkeye10
 
  1  
Reply Sun 25 Apr, 2010 08:33 pm
@Ionus,
did you miss all of the squealing in horror when Lehman Brothers was allowed to fail?
Ionus
 
  1  
Reply Sun 25 Apr, 2010 08:40 pm
@hawkeye10,
I am vaguely aware, as the local economy has me more distracted.
0 Replies
 
 

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