Interesting comment on Bill Mitchell's MMT blog:

"You cannot take away hope of decent living from young people. Pushing harder won’t make them entrepreneurs. It will make them literally explode with hatred – directed against the West and the Western civilisation as a whole. One cannot defeat poisonous ideology by dropping more and more bombs on Syria, Iraq, Yemen, Afghanistan, Libya etc. Dropping bombs makes the ideology of hatred only stronger. The only way to defeat IS is to restore hope to people here – including the South-Western suburbs of Sydney."

As a fan of your fellow Aussie Bill Mitchell's work on MMT and the Eurozone, I'm quite delighted to see TANs offered as one tool of many to alleviate at least some of Greece's problems.

@oritteropo

There are analyses floating around by just about every major player. A majority seems to agree that it would be manageable for the Eurozone and better for Greece. Others, including Varoufakis, argue that Grexit would destablize the Eurozone and be a catastrophe for Greece. Too many variables, too many vested interests... who knows what would happen.

The projections on the other hand were a hoot. What a joke they were.

What was the fiscal multiplier in their initial projections? Something along the lines of 0.75, right? Reduce public spending by a Euro and the economy contracts by just 75 cents. Too bad it turned out to be at least 2.5, probably even far more during certain phases. Ricardian equivalence, my ass.

Here is the IMF outlook of 2010. Bill Mitchell made a nice table for comparison. They did a crackerjack job, didn't they.

IMF research admitted their mistake in 2012, but the policy department doesn't seem to care. Shouldn't come as a suprise to anyone, given the role the IMF played in the application of the shock doctrine all over the world in the last decades. Chicago School of Economics, all the way.

If I look at the list of countries that were ruined by the IMF through policy advisory and loans with strings attached, I wonder just how they still manage to paint Syriza as the ones lacking credibility. Is it because they lack the experience of destroying an economy?

Yet with all that in mind, the Greeks actually prefer the IMF as a partner if the alternative is German officials. How depressing for me as a German.

Remember what Christine Lagarde said about Greece in 2012? The Grauniad still has the goods. Or how she argued for expansionary austerity in 2010? Krugman, to his credit, made fun of the concept back then, but even he severly underestimated just how willing these people are to turn this stuff into policy.

But still preferrable to German officials. Ouch.

@RedSky

The need to be kept afloat by European funds is pretty high on the list of things Syriza is keen to do away with. Varoufakis was clear on this pretty early on, at least 2009 as far as I know. They treated it as a problem of liquidity instead of a problem of insolvency, and therefore any funds funnelled into Greece were basically disappearing down a black hole. They are bleeding cash left, right and center, and the continuous flow of credit from Europe doesn't help a bit in its current form.

As of now, they can't pay shit. Any additional credit has to be used to pay back interest on previous credit. Their meagre primary surplus is less than their interest payments. With that in mind, some of the ideas floating around sound rather intriguing, especially given the horrendous failure all the previous agreements have produced. These ideas include: cap interest payment (1.5% of primary surplus), use the rest for investment or humanitarian relief; no payments on debt below 3% growth, 50% of agreed upon payments at 3-6% growth, full payments at 6+% growth.

Yet even those ideas are purely theoretical, because there is no growth in Greece. The celebrated growth in Q3 2014 of 0.7% might very well be a fluke, as Bill Mitchell described here (prices falling faster than incomes). For Greece to be able to have any meaningful growth, they'd require not just a complete reconstruction of its institutions (structural reforms), but also massive investment.

And there's where it breaks down again, since you rightfully pointed out that the Germans in particular won't spend a dime on Greece, especially not with investment in Germany in equally dire shape (shortfall of about a trillion € since 2000).


Which brings me to another point: Germany vs France.

Productivity in both countries was en par in 1999, and productivity in France in 2014 was only slightly below German numbers. "Living within your means" is a very popular phrase in the current discussion, which basically means living in accordance with your productivity.

Subsequently, there should be a similar development of unit labour costs within a monetary union, with growth targets set by the central bank. In our case, that would be just below 2%. Like I've previously said, Greece lived beyond its means in this regard, and significantly so.

But what about France and Germany? The black line marks the target, blue is France, red is Germany. That's beggar-thy-neighbour. That's gaining competetiveness at the cost of your fellow Euro pals. That's suppressing domestic demand in order to push exports.

German reforms killed its domestic market (retail sales stagnant since early '90s) and created an aggregate trade surplus to the tune of 2 trillion Euros. That's 2 trillion Euros of deficit in other countries. And we're looking at an additional 200-210 billion Euros this year. If running trade deficits is bad, so is running trade surpluses.

Ironically, there's even been legislation in Germany since 1967, instructing the government to balance its books in matters of trade (and other areas). They've been in violation of it for 15 years.

With this in mind, everytime a German politician calls for the other countries to run trade surpluses just like Germany, I get furious. Some of them, on the European level, even have the audacity to say that everyone should run trade surpluses, and all it takes to get there is massive wage cuts. That's open lunacy and a failure of basic math. No surplus without deficits, no savings without debt.

And while we're at it, it's not the savings rate in Germany that bothers me. It's the moral superiority that is being ascribed to running surpluses in every way imaginable. Every part of society is expected to have a positive savings rate, because debt is bad. Well, if everyone's saving and nobody's accruing the corresponding debt, you get the current situation where there is no investment whatsoever, a gargantuan shortfall in demand given the national productivity, and a cool 200 billion Euros of debt a year that foreign actors have to rake up so that Germany can have its massive growth of 0.5-1.5% annually.

Finding borrowers for all that cash is getting more difficult by the day. The ECB's QE is basically one big search for new borrowers, since everyone either doesn't want to borrow or cannot borrow anymore.

If Germany wanted to help the Eurozone, they'd start by increasing their ULC vis-á-vis the rest of the countries. Competitiveness should be regulated through the foreign exchange rate, not this parasitic race to the bottom within the zone. Ten years of 4% increase in wages, annually. That ought to be a start.

Additionally, allow the ECB to fund the European Investment Bank directly, instead of this black hole of QE.

Or go one step further and seriously consider Varoufakis' ideas, including the old Keynesian concept of a global surplus recycling mechanism.

But all that is pure fantasy. I don't think a majority of Germans would support either of these measures, not with the overwhelming fear of inflation this society has. Add the continuous demonisation of debt and you get a guarantee that very few countries might be compatible to be in a longtime monetary union with Germany.

There's a great little bit in the episode with Johnny Vegas (the clip with the strips is from the same episode) where Johnny goes off on one and the camera keeps cutting back to an utterly bewildered David Mitchell. This program is comedy gold and Mitchell is one of the best people on it :0)

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Yea Mitchell & Webb always comes to mind for me too. Hilarious Duo those mates.

Every time I see one of these great snooker videos make it to the front, I have to watch Mitchell and Webb Look vid about snooker: http://videosift.com/video/That-Mitchell-and-Webb-Look-Ohh-Thats-A-Bad-Miss comedy to go with the amazing game play...

Bill Mitchell ripped into the language of austerity, particularly with regards to the catastrophe-in-the-making that is the Euro zone.

You remind me of David Mitchell on "Would I Lie to You?" when he pointed out that often people will think that something sounds so out-of-place and rehearsed that it inevitably has to be true.

Do you perhaps think that might be something you're doing? Would this shit really be satisfactory, based on your logic, to a grieving family? He wasn't a saint, neither are you, neither am i... but no one deserves to die for that, especially at such a young age... none of us know who we are by that age.. he had not made the decisions that would shape his life yet. Who does it benefit to have the rehearsed official police story relayed to us by the only man who could explain what really happened? It's more of a slap in the face to the family, is my point.

I tell you what i'd want if i was American - not to have to fear the American police. Because at this point it doesn't even matter if Darren was "rightfully killed" - because the arse-covering propaganda had already started; which is an admission to racism by way of feeling guilty.

And that SHOULD be enough for Americans to demand change - i.e. not every cop should be carrying a gun, because quite clearly not everyone is capable of knowing when to use it. But if it isn't enough, there's Trayvon Martin too. And another, and another, and another.

This isn't a one-off thing, so don't try to suggest that people should judge the video independently of the track history of American police which is to kill young black men, hurting the communities and individuals that they are designed to protect.

At the very least, the protection system is not working for the black community and needs fixing. At the most, there is a tendency towards racism and wild-west-justice in the American police, and that's not just a problem for black people.

P.S. American prison statistics for black people is a serious indictment of how black people are not treated equally in the eyes of the law. Who is really going to try and argue that black people are naturally, statistically more likely to be criminals to the tune of the prison imbalance? There is absolutely no way i am buying into that. The prison statistics remind me of this John Oliver video, perhaps police are being "fair" and stop/searching black people exactly as much as they do white people.. but that is an imbalance because they are not exactly 50% of the population.

(For the record: 60% of all prisoners are black but only 25% of total population. Incarceration at six times that of white people. 12% of the drug-using population are black, but account for 40% arrested for drugs and 60% in prison for drugs. Taken from the NAACP website, i've got to assume they're right. Don't get me started on antiquated drugs policies, or the history of slavery's affect on money/power in the modern world - meaning crimes committed in boardrooms and government go unpunished - let's not forget white leaders have led this world to the brink of complete collapse and we're not out of the woods - but let's stick to the issue.)

This is probably the video @billpayer is referring to, and he has a point, not that it makes the points made in this video any less true.

http://videosift.com/video/David-Mitchell-on-Atheism

Tags for this video have been changed from 'climate change, david mitchell, soapbox, global warming' to 'climate change, david mitchell, soapbox, global warming, stroke maldives' - edited by calvados

Can you provide a source for that?
Everything I've read points to David Mitchell being at most agnostic, and in real terms, an atheist who doesn't understand what the word means.

Was listening to this amazing David Mitchell rendition and had to dig out the original, which I fear may have escaped our friends over the sea.

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