Let us accept (as I do) the principle that national minorities have the right to self-determination within lopsided multi-ethnic states; e.g. Croats and Kosovars seceding from Yugoslavia, Scots from the UK, Georgians from the Soviet Union etc. Continue reading
The Express published an interview I gave to Benjamin Masse-Stamberger a week ago. The interview lasted one hour, over Skype, and its published version nicely captures what Benjamin and I discussed. The gist of it will not surprise regular readers: The Greek ‘bailout’ was a sinister exercise in transferring banking losses from the books of Northern European banks onto the shoulders of Greek and European Taxpayers, in a manner that deepened the bankruptcy of the Greek social economy and pushed Europe onto the path toward economic and social disintegration. To pretend, now, that ‘Greece is on the mend’ and ‘the Eurozone Crisis is waning’, is to add insult to injury. The L ‘Express interview can be read here , on Their Site. Alternatively, read on … Continue reading
at the Progressive Economic Conference, Brussels 2nd March 2014
“It takes a passionate disregard for the truth to suggest that Greece is recovering.” That was my verdict last December upon being asked to comment on Greece’s rumoured recovery. Almost three months later, it is time for an update. The gist of today’s update is depressingly simple: Still, no sign of Greek-covery whatsoever. Indeed, every single indicator (including the ones that are presented as evidence of light at the tunnel’s end) points in a sadly negative direction…
A debate involving James K. Galbraith, Yanis Varoufakis and Jeff Sommers (in the role of moderator) took place on 24th February at the University of Wisconsin, Milwaukee in the context of the George Kennan Distinguished Lecture Series. An amateurish recording is available here. For ease of ‘navigation’, a list of topics (with their location on the recording’s timeline) is presented below.
- During the first few minutes, J. Galbraith talks about George Kennan (given that the occasion was The Distinguished George Kennan Lecture Series).
- Then for forty minutes Y. Varoufakis and J. Galbraith discuss austerity: its intellectual and historical roots, the political motivation driving it in the US and in Europe and the general state of play in the US and Europe (including an intervention from Jeff Sommers on the Latvian experiment with austerity).
- Starting at around 47′ we discuss minimum wages , presenting the microeconomic, macroeconomic and social importance of raising minimum wages to a level that they can sustain a decent life – plus a rejoinder to the false claim that higher minimum wages will depress employment.
- From 58’30” to the end, a discussion with the audience ensues (questions are not clearly audible – but our answers are!)
Technological fixes to time-honoured problems are all the rage these days. Bitcoin is meant to fix money, social media are seen as an antidote to Rupert Murdoch and assorted tyrants, networked robots are to help countries like Japan deal with demographic declines etc. Perhaps the largest claim is that the Internet has helped (or is about to help) democratise capitalism. Ten years ago that claim struck me as both fascinating and dubious. So, I sat down and wrote an article about it (circa 2004). Its gist: The Internet is a wonderful leveller. But democracy requires a great deal more than mere ‘levelling’. Primarily, it requires political institutions that enable the economically weak to have a decisive say on policy against the interests of the rich and powerful. Ten years later, I am re-visiting this question, under the shadow of a global crisis that made it even harder to convert an e’Demos into genuine e’Democracy. What follows is an updated version of the original paper. (Click here for a pdf version or just read on.) Continue reading
Moralizing and generalization have always been terrible foundations for public policy. Continue reading
The responses of many to my post on Bitcoin reveal a powerful tendency to underestimate the ill-effects of deflation on a social economy. This tendency to underestimate deflation’s deleterious impact matters beyond debates on Bitcoin per se. For example, in Europe the incapacity of the European Central Bank (ECB) to act in the face of deflationary forces has revealed the same type of misunderstanding, as many commentators fail to recognise that deflation is a very serious threat and that the ECB’s lack of weapons against it constitutes a major weakness. In this post I return to the problem of deflation in a Gold Standard-like monetary system (e.g. Bitcoin or, indeed, the Eurozone itself) but conclude that, almost paradoxically, the technology of Bitcoin, if suitably adapted, can be employed profitably in the Eurozone as a weapon against deflation and a means of providing much needed leeway to fiscally stressed Eurozone member-states. Continue reading
To watch my interview jump to 13′
On 6th and 7th February 2014, the LBJ School of Public Affairs (University of Texas at Austin) organised a conference on the 20 years since the signing of the North America Free Trade Agreement Treaty, entitled NAFTA+20: Intended and Unintended Consequences. The organisers commissioned Danae Stratou to produce a photographic installation in the entrance of the auditorium in order to capture the experience of the US-Mexican Border Fence after NAFTA. The above video contains stills from that photographic installation plus the video (entitled THE GLOBALISING WALL) that Stratou presented and showed in the conference’s final panel.
by James Galbraith, Stuart Holland and Yanis Varoufakis (*)
Peter Bofinger’s proposal for Euro-bundles (see here for an introduction) serves the noble purpose of rekindling the debate on the Eurozone’s fiscal and monetary incoherence. The idea behind Euro-bundles is to issue a common bond without joint liability that the ECB can then purchase in the context of a monetary policy that uses quantitative easing to fend off deflation, with the welcome side effect of lessening the Eurozone’s borrowing costs. While we shall be arguing that Professor Bofinger’s Euro-bundles are ill- conceived, we applaud his idea of a common bond involving, in some capacity, the ECB. This idea points in the direction of a genuine solution to the Eurozone’s fiscal and monetary fragility. Continue reading
His proposal for a Eurobond, as an instrument of fiscally consolidating the Eurozone, was soundly rejected by the German Chancellor. Now, with an ECB paralysed in the face of a major deflationary onslaught, Professor Peter Bofinger comes up with a variant of the rejected Eurobond, which he calls ‘Euro-bundles’, only this time as an instrument that will bolster the ECB’s monetary policy defences against deflation; and one that may offer a modicum of hope that the Eurozone can salvage a degree of integrity after four years of fragmentation. What exactly are Mr Bofinger’s Euro-bundles? In what follows, I sum up his scheme and then pass on the baton to George Krimpas who asks some pertinent questions of Mr Bofinger. My own views on Euro-bundles will appear in a follow-up post shortly Continue reading
For those of us who grew up under totalitarian regimes, it is noteworthy that Europeans are resorting to a time-honoured tradition: telling jokes as a form of defiance. Here is one: “Why did Europeans agree to form the euro?” “Because”, the joke goes, “the French feared the Germans, the Irish wanted to escape Britain, the Greeks were terrified of Turkey, the Finns wanted to prove they were more European than the other Scandinavians, the Spanish wanted to become more like the French, the Italians wanted to become German, the Dutch and the Austrians had all but become German, the Belgians sought to join both Holland and France, and, finally, the Germans feared… the Germans!” Continue reading
Vicious, intense war broke out the other day. Hundreds if not thousands of people, in New York, in Chicago, in the great capitals of Europe, in China, rushed home on the news that hard-earned assets they were keeping in an inhospitable far away place had been placed under sustained, brutal military attack. By the end of the day, or more like it in the wee hours of the morning, exhausted by the battle’s intensity, the defenders took stock of the material damage: it amounted to hundreds of thousands of dollars. Continue reading
Before the Crash of 2008, the dominant view amongst the world’s policy-making elites was that global imbalances were not a problem. The great and the good in Washington and in London, in Paris and in Frankfurt, at Davos and on the golf courses where deals of note are struck, dismissed as economically-illiterate moaning-minnies all those who dared warn against large current account imbalances. Caught up in the soothing fiction of the ‘Great Moderation’, and the toxic fantasy that finance had invented ‘riskless risk’, the powers-that-be were adamant that we were living in a ‘new paradigm’. Continue reading
Language Log featured a critical post the other day on our Modest Proposal for Resolving the Euro Crisis. It criticised not the substance of our economic proposals but our choice of title. Surprised and incensed that our Modest Proposal lacked the irony (or was it sarcasm?) of Jonathan Swift’s original Modest Proposal, the author accuses us of, at best, ignorance of Swift [" Maybe (some) economists no longer read Swift?"] and, at worst, of “erasing cultural history”. Interestingly, the said blog post generated quite a number of comments, most of which assumed that we were unaware of Jonathan Swift’s playful proposal. A reply was, I thought, in order. This is the one I just posted on that blog, and which I paste below: Continue reading
The United States is ungovernable.
Or at least it has been every time, post-Reagan, the White House has been controlled by a Democrat while Congress is in the clasps of a Tea Party infested Republican party.
An exasperated electorate is watching the gridlock. A playful, yet serious, manifestation of the resulting frustration is the pamphlet that my dear friend, Seattle divorce lawyer Carol Bailey, published recently and distributed to members of Congress in situ herself. It is, you guessed it, a divorce lawyer’s guide to easing congressional gridlock. (Click here for Carol’s appearance on CNN and here for a relevant article in Politico).
Carol’s pamphlet serves an important purpose that the cynic in me interprets thus:
Politicians pretend that they care about the nation, like parents care for their children. This is, of course, a fiction in most cases. Congress is in gridlock because a considerable number of regressive politicians want to paralyse government, as part of a crusade to see the state wither (i.e. to wreck the social safety net, that keeps poverty and its hideous impact from rising and rising) once Wall Street et al were bailed out successfully . Still, if they want to maintain the pretense that they care about the nation, that they are its proverbial fathers, they must explain to their voters why they are reluctant to follow Carol Bailey’s advice!