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[mainiac]

All of which is vaguely related to the inflation investment tradeoff but not actually about the topic.

In science vague association doesn't count for much and economics is very much a science.

[Helgoland]

-snip-

Okay, in general I agree with that. Would you say that Greece (and the other PIGS countries as well) need structural reform? Or let me rephrase it: Do you believe that the crisis of '08 was the sole reason for these countries' problems?

[mainiac]

Oh I'd certainly agree that Greece needs structural reforms.  And I'd agree that corruption hurts you all the time, not just when the economy is back to full employment.  But the situation in Greece while it would be a little better would still be very, very bad if they could wave a magic wand and fix the corruption tomorrow.  Look at Spain, look at Ireland.  On the one hand you have a relatively honest economy with a left wing government and no structural deficit.  On the other hand you have a relatively honest economy with a right wing government and no structural deficit.  They have none of the problems that make Greece a special snowflake.  The underlying situation is the same, the bubble was extra large because they were poorer then the strong Euro economies but shared a currency and now they have no way to adjust.

Focusing on corruption and not growth is being penny wise pound foolish.  It would be lovely if doing both were possible but nothing so far has given me reasons to think that.

[GreatJustice]

All of which is vaguely related to the inflation investment tradeoff but not actually about the topic.

In science vague association doesn't count for much and economics is very much a science.

I don't think you understand the meaning of the word "vague", considering how pointed the aforementioned quotations were about deflation. I can provide more quotations if you want, but apparently anything I provide will be irrelevant because I'm wrong somehow

[ChairmanPoo]

  Look at Spain, look at Ireland.  On the one hand you have a relatively honest economy with a left wing government and no structural deficit.  On the other hand you have a relatively honest economy with a right wing government and no structural deficit.

Spain has the European record of submerged economy.


Also, both Ireland and Spain have right-wing goverments. AFAIK.

[mainiac]

Also, both Ireland and Spain have right-wing goverments. AFAIK.

Whoops, I forgot that Spain changed control.

[Helgoland]

Spain had a bloated real estate sector (they've got more highways than friggin' Germany, home of the Autobahn) and a corresponding bubble, while Ireland was very, very banking-heavy. The underlying problem was decidedly not the same. And Ireland (and, to a lesser degree, Spain) is well on its way to recovery.

Focusing on corruption and not growth is being penny wise pound foolish.

Growth needs a corruption-free environment, though. Example: Africa has received five times more aid since 1950 (or thereabouts) than Europe under the Marshall plan. Not much of that reached the African population. You can stimulate as much as you want: As long as the stimulus doesn't even reach the economy, it'll do jack shite. Once corruption is down to acceptable levels, however, growth will arise naturally because of Greece's low wages etc., even without (much of a) stimulus.

Yes, the northern EU members are using the crisis and the pain it's causing to influence the internal policies of the southern members. The way it's currently being done, that's a good thing. And it's a damn shame we can't do just that to France.

[mainiac]

Spain had a bloated real estate sector (they've got more highways than friggin' Germany, home of the Autobahn) and a corresponding bubble, while Ireland was very, very banking-heavy. The underlying problem was decidedly not the same. And Ireland (and, to a lesser degree, Spain) is well on its way to recovery.

Too much money flowed in during the boom because the countries were poorer then the ones they shared a currency with.  No ability to adjust to the crash.  I'm simplifying here but it conveys the important part.

Yes, the northern EU members are using the crisis and the pain it's causing to influence the internal policies of the southern members. The way it's currently being done, that's a good thing. And it's a damn shame we can't do just that to France.

Does it not occur to you that this opinion is the height of hubris?  It would be one thing if there was a successful track record here.  But to assert this paternalism after six years of miserable failure...

[Helgoland]

Successful track record: Agenda 2010, and similar programs in Scandinavia (I think). Also, it's common sense that rigid, entrenched structures can only be removed with outside help.

[mainiac]

Successful track record: Agenda 2010, and similar programs in Scandinavia (I think). Also, it's common sense that rigid, entrenched structures can only be removed with outside help.

Okay, first of all I was talking about your track record of telling your neighbors that you can dictate their actions and then insisting you are right as their economies fail under your paternalism.

But then you come back with domestic policies that are supposed to impress me?  Germany enacted a number of changes that while they might be all very well and good had nothing to do with the cyclical state of the economy.  The progress made on the unemployment and gdp front is less then the boost to the economy you guys have gotten from an increased trade gap.  And that increased trade gap came from the fact that you are screwing over your neighbors (depressing the Euro, thus boosting German exports).  Without that export boom your "reforms" would have been met with a double dip recession.

You secure economic growth by screwing over your neighbors and then turn around and tell the people you screwed over you know better then them, based on that growth.  YOU CAN'T ALL RUN TRADE SURPLUSES.

At this point I think we need to wait for the French to surpass the Germans before sane policy comes to Europe.  The French haven't particularly distinguished themselves but they understand what a gorram business cycle is and how an accounting identity works.  Actually, that is pretty impressive by the pathetic standards of today.

[Helgoland]

At this point I think we need to wait for the French to surpass the Germans before sane policy comes to Europe.  The French haven't particularly distinguished themselves but they understand what a gorram business cycle is and how an accounting identity works.  Actually, that is pretty impressive by the pathetic standards of today.

Hehe, I don't know how well US papers (or the papers you read) cover French domestic politics, but in Germany we hear about it on a fairly regular basis. And with the current sort of domestic political situation, it'll take more than a few years before France will get back up on its feet.

[Sergarr]

Apparently France is more competent at economics that Germany.

Really

Reaaaaaaaaaaaaaaaaaaaally 

[mainiac]

Is there some stereotype I'm not aware of?

[Dutchling]

Southern Europeans are inherently lazy and unproductive?

[mainiac]

Southern Europeans are inherently lazy and unproductive?

France is southern?