There was talk about renaming the Krugman thread for this purpose, but that seems to be going nowhere. Besides which, I feel the Krugman thread should be left to discuss Krugman while this thread can be used for more general economic discussion.
Discuss:
- The merits of competing theories.
- The role of the government in managing the economy.
- The causes of and solutions to our current economic woes.
- Comparisons between the economic systems of different countries.
- Theoretical and existing alternatives to our current market system.
edited 17th Dec '12 10:58:52 AM by Topazan
United Earth
Remember Operation Gladio?
The big powers have been fucking with Greece's stuff all along.
V
![[up]](https://static.tvtropes.org/pmwiki/pub/smiles/arrow_up.png "[up]"){kind=icon}
Over-optimism, probably. "Come the Euro, all Europe's economic problems will be resolved and we'll soon have one happy United Europe!"
edited 25th Apr '15 7:09:31 AM by Greenmantle
Keep Rolling On
Lost in Space
I don't know — given the overt history, I wouldn't be surprised to find out that someone was turning a willfully blind eye to the malfeasance. After all, the neoclassical paradigm is one in which empirical data is methodically ignored in favor of theory; this leads organically to all kinds of intellectual dishonesty that justifies itself in the name of ideological purity.
edited 25th Apr '15 7:17:48 AM by Fighteer
"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"
Fuck you, Fascist sympathizers
One would figure the true neoliberal would be the one demanding economic reforms as a precondition of joining, as demarquis earlier suggested. I think it was just a part of the irrational exuberance: it didn't matter if they were insolvent, everyone was getting rich and everyone would get rich forever because there's no way the past will happen again.
Who Am I?
Who benefited from Greece's economic policies? (Outside of Greek politicians, I mean).
"We learn from history that we do not learn from history."
Lost in Space
The Greek elite, because the elite always benefits. Investors who got into Greek bonds early and got paid out won, too. You don't have to have access to the raw data to know these facts, because they are universally true.
The real winners in the whole mess were the giant investment banking firms — Goldman Sachs, in particular, was instrumental in facilitating Greek bond sales, even helping to cover up the risk. What's more, they made tons of money on derivatives: betting that the Greek bonds would fall in value.
So, if you want an example of institutional evil, it's right there in plain English. Global investment firms advised Greek banks in how to cover up their weakness, facilitated the exuberant lending, then placed side bets that paid off when the whole thing came crashing down. And they got away clean, too, leaving the Greek citizens holding the bag.
edited 25th Apr '15 11:14:30 AM by Fighteer
"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"
Fuck you, Fascist sympathizers
Average Greeks also benefited until the charade came undone. The legitimate point that the Troika has in all of this is that the Greek people will have to accept that they won't have a living standard like they did from 2002-2007 for decades to come, but the Troika's demands are going to put the average Greek even worse off than when the whole cycle started 15 years ago.
Lost in Space
That would have been the case regardless, but the conditions being imposed are brutally unnecessary for a crisis that Greek citizens, for the most part, had zero direct responsibility for.
Also, remember that there has yet to be a single meaningful criminal prosecution of a banker for their role in the 2008 crash. Yet we are making Greek citizens suffer through 25% unemployment and massive cuts to services why again?
edited 25th Apr '15 11:36:00 AM by Fighteer
"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"
V
Mind you, Greece is a country where Church (Greek Orthodox, obviously) vehicles have special registration plates — and oddly enough, Greece's poor relationship with Germany goes right back to the start of Greece's time as an independent nation...
edited 25th Apr '15 11:42:19 AM by Greenmantle
Keep Rolling On
Fuck you, Fascist sympathizers
But Germany wasn't a nation when Greece got independence. Or did the Prussians have a special relationship with the Ottomans even back then that led to them being ill-disposed towards the Greeks?
V
It was the Bavarians, in fact.
V
Sorry for the double-post, but —
The surreal world of Venezuela's queues
The least one can expect from a creditworthy foreign correspondent is that he or she can have a decent stab at making sense of the world. In Venezuela this is more than the usual challenge. Here are the rough basics. The Bolivarian Republic of Venezuela is run by a socialist government that has broadly speaking used - or misused - its vast oil wealth to benefit some of the people, some of the time and to keep itself in power.
A combination of woeful economic management - or mismanagement - and the steep fall in oil prices has left the government with a serious cash flow problem. And it's left the people of Venezuela standing in queues across the country every single day, often for hours at a time.
People are given time off work to queue. They get up early in the morning to queue. They queue in their lunch hour. They text each other about queues. So not surprisingly they've become very good at queuing.
As an Englishman I like a good queue - well formed, orderly, no doubting who's in front of you and who's behind. There are many countries that don't respect these fine, ancient traditions and prefer the first-past-the-post system - involving pushing, shoving and grunting. But on the whole Venezuela is more like Britain with its queues. The difference is that in Venezuela they're not waiting for the number 29 bus - they're queuing for milk, coffee, sugar, corn flour, cooking oil, soap and even toilet paper - all are in severely short supply.
The government regulates the price of these goods. It doesn't subsidise them - it tells the producer what they can charge. That might just about make sense in a buoyant economy but with inflation running at over sixty percent and the value of the currency plummeting, it appears producers are not only failing to make a profit but are operating at a loss. Similarly companies who export food to Venezuela have given up waiting to be paid by a government that's down on its luck and are now selling their goods elsewhere.
But the government and its supporters have a different narrative. They blame America and Europe and big business and smugglers for waging an economic war against the country, of trying to undermine President Maduro and the legacy of his predecessor, Hugo Chavez - of trying to turn the people against their government.
They've told shopkeepers to move the queues underground, into basements and subterranean car parks - apparently to protect their customers from getting sunburnt. Journalists are prevented from filming empty shelves. Shoppers have also been given instructions. You can only buy scarce goods on certain days of the week depending on what number your ID card ends in. So, for example - if it ends in a zero or a one then you can stand in line on Monday. However that doesn't necessarily mean that the milk or soap you want to buy will be available on Monday.
Another anomaly of what passes for a system is that often the shelves aren't empty at all. It's just the regulated goods that are in short supply. So if you want something else, and you have the money for one of these higher-priced goods, then you can often skip right past the queue and go straight into the shop.
Often people join a queue without even knowing what's on sale. They get into line and then they ask the shopper in front of them what they're waiting for. It's highly likely that the person in front has done exactly the same thing with the shopper in front of them.
We saw one queue that only moved forward because people at the front gave up waiting and went hunting elsewhere. But if you were further back in line - around the corner, say - you couldn't see this. You just felt the illusion of momentum or progress and were encouraged to stay and wait a little longer. On this occasion there wasn't even anything to wait for. There'd been a rumour that the shop might be getting a delivery of something - no one knew what - but in the end there was nothing - just an empty loading bay.
And so it goes on. It's a surreal symbol of a system that's broken - and frankly, makes little sense. Unsurprisingly people are angry and frustrated. On occasion this has meant that queues have degenerated into riots. And some shoppers have been robbed of their precious cargo while heading home.
If shoppers continue to believe the official line that this is caused by Venezuela's enemies, then perhaps the government may be able to ride out the growing discontent. But many Venezuelans are no longer buying it.
Volkswagen chairman Ferdinand Piech quits in power struggle
Mr Winterkorn has been widely tipped as VW's next chairman. Mr Piech and the Porsche family control 51% of VW. Volkswagen is the biggest car manufacturer in Europe.
On 17 April, Volkswagen's five-member governing board gave its backing to Mr Winterkorn. Board member Wolfgang Porsche, a cousin of Mr Piech, said he had given his "personal opinion" without clearing his remarks with other family members. Mr Piech, 78, is a former VW chief executive. His wife Ursula has also resigned her seat on the board.
"Mr Piech's departure represents a seismic shift in Volkswagen's power structure, and could foretell drastic changes in how one of the world's largest automakers operates," said Karl Brauer at automotive research group Kelley Blue Book.
In 2014, VW was the world's second-biggest carmaker by sales, behind Toyota and ahead of GM. Apart from Volkswagen, the group's brands include Audi, Porsche, Lamborghini, Bugatti, Bentley, Skoda and Seat.
Lost in Space
Yeah, Venezuela's problems seem to be entirely its own fault. Sorry, boys.
"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"
United Earth
I have a feeling this is an extremely stupid policy, to a tragic degree. Who came up with this shit?
Darkness cannot drive out darkness; only light can do that. Hate cannot drive out hate; only love can do that.
Lost in Space
It's straight out of the Marxist-Leninist playbook. Command economy and all that jazz. Didn't work out so hot for the Soviets.
"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"
V
The Soviets, I guess. It's something that would take place in a Soviet-style "command economy".
Keep Rolling On
United Earth
But... it doesn't work that way. The price of the final product depends on the price of all component materials and the price of labour, and those fluctuate because they further depend on other prices. For a proper command economy you'd need to control the price of every stage in the chain, not just the end product.
Darkness cannot drive out darkness; only light can do that. Hate cannot drive out hate; only love can do that.
Lost in Space
Why do you think the economy of the U.S.S.R. was such a clusterfuck? It's starkly illustrative of just how bad a command economy is that the few economic successes of the old Soviet Union came after they started to liberalize private enterprise: letting communal farmers grow food in private plots for sale on the open market very nearly solved their dependence on international food aid.
edited 26th Apr '15 8:25:36 AM by Fighteer
"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"
United Earth
International food aid? The USSR?! ༼⁰o⁰；༽
edited 26th Apr '15 8:32:33 AM by TheHandle
Darkness cannot drive out darkness; only light can do that. Hate cannot drive out hate; only love can do that.
Lost in Space
Oh, yes, it was a huge net importer of food, even as it shipped vast quantities to its various Soviet bloc allies.
edited 26th Apr '15 8:35:23 AM by Fighteer
"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"
United Earth
Actually, that's one thing I don't get: importing and exporting the same product simultaneously. If I sell you wheat, and you sell me wheat, why don't we just keep our own wheat and save on carbon emissions and transportation costs?
Darkness cannot drive out darkness; only light can do that. Hate cannot drive out hate; only love can do that.
HGW XX/7
The USSR's economy was also horribly distorted by the military-industrial complex. Soviet military gear was generally pretty decentnote , as were various industries associated with the military, such as plant, optical equipment, rocketry etc but their consumer products were pretty hopeless, and became increasingly so towards the end of the Cold War.
Because you need to provide wheat to your fraternal socialist allies in strategic regions otherwise the governments of those countries might be replaced with less friendly ones.
edited 26th Apr '15 8:50:11 AM by Achaemenid
Schild und Schwert der Partei
United Earth
That practice is hardly exclusive to the USSR. In fact, the USSR is more famous for selling its allies factories at a very low credit rating... that tended to be extremely crappy and/or unsuitable to local conditions.
But buying and selling the same stuff at the same time seems to be common even nowadays, and this confuses me.
edited 26th Apr '15 8:56:10 AM by TheHandle
Darkness cannot drive out darkness; only light can do that. Hate cannot drive out hate; only love can do that.
Lost in Space
It's not very complicated. Transportation and production costs can affect the calculus, especially for fungible commodities like wheat and oil.
It can be cheaper for Texas to sell its surplus stuff to Mexico rather than to North Dakota, especially if North Dakota can buy Canada's stuff for less than it buys Texas' stuff.
edited 26th Apr '15 9:29:57 AM by Fighteer
"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"
It does raise some questions about whether the book-cooking that was used to justify Greece's entrance was completely missed by the technocrats at Brussels — were they engaging in wishful thinking or conspiracy?
"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"