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What Mr Draghi should be aiming at: Or how to move from Ponzi Austerity to Rational Crisis Management by a stepwise implementation of the Modest Proposal
, 17/08/2012
Ponzi growth happens when unsustainable capital flows, wilfully predicated upon funding schemes that Reason knows to be fraudulent, give rise to large spurts of economic activity. Ponzi austerity, in contrast, is what happens when unsustainable spending cuts, wilfully predicated upon funding schemes that Reason knows to be fraudulent, cause significant drops in economic activity. (Click […]
Punishment or Aid? Holland’s TROUW newspaper sets up a debate between myself and Hans Werner Sinn
, 17/08/2012
You may recall the mental experiment that I suggested for working out the true, underlying mood towards Greece (and the rest of the Periphery). Now TROUW has published that piece, in translation of course, and has juxtaposed against Hans Werner Sinn’s take (which comes as close to confirming, in my biased eyes, the point I […]
A Modest Proposal for Resolving the Euro Crisis: an abridged version as published by the Financial Times On Line
, 17/08/2012
by Yanis Varoufakis[1] and Stuart Holland[2] (click here for the full version of our Modest Proposal) The Eurozone is disintegrating under the weight of three intertwined crises unfolding in the realms of banking, public debt and under-investment & internal imbalances. For two years each and every response by Europe’s leadership to the crisis proved consistently underwhelming. The [...]Convertibility Risk: Acknowledged but not addressed
, 06/08/2012
Further to my previous post on Mr Draghi’s recent undermining of the Office of ECB President, Gavyn Davies of the FT penned the following line: “It is risky for a central banker to acknowledge that the payments system on which the currency stands may not be fully credible. Mr Draghi could simply have repeated the old […]
The week when Mr Draghi greatly diminished the office of ECB President and sacrificed the fiscal-monetary policy distinction
, 03/08/2012
First came the impressive declarations: The ECB will do whatever is necessary to ensure that those who go short on the euro, who bet on its disintegration, will lose. “And, believe me”, he added “it will be enough”. He also, rather significantly, uttered the term ‘convertibility risk’ (code-words for the risk that funds kept in […]
Depression in the Eurozone’s Periphery and how to restore Aggregate Demand without creating new bubbles: My reply to Kantoos Economics
, 30/07/2012
Preamble: Kantoos Economics recently posted an article discussing points of agreement and points of disagreement between us regarding the restoration of growth in Greece, both in the short and in the long run. Here is my reply. The problem with any Crisis is that it eliminates the type of scarcity which helps two crucial markets […]
23 crucial days for Greece
, 28/07/2012
On 20th August, the Greek government will have to borrow 3.2 billion from one arm of the Eurozone (from the EFSF) in order to repay another (the ECB). Yet Greece is insolvent. The very idea of an insolvent entity borrowing more from a community, like the Eurozone, in order to repay that same community is […]
A Mental Experiment for establishing the relative mood for solving the Crisis in Europe, in Britain & in the USA
, 23/07/2012
I have a hunch: that the Eurozone’s profound difference to both the United States and Britain is that, unlike these anglosaxon ‘currency unions’, the Eurozone’s real elite does not want the Crisis to disappear quickly and painlessly. In this post I offer a mental experiment that will help each and every reader rule on the […]
On the solvability of the Euro Crisis and the mood in Germany: Concluding my debate with Kantoos Economics
, 22/07/2012
Kantoos Economics (KE) replied to my post on what constitutes a rational and decent critique of Germany’s stance during this Euro Crisis. After a series of exchanges between us, I think that this dialogue is now reaching its natural limits (click the following for a blow by blow perusal of our debate: KE1 was KE’s original […]
What the EIB makes the ECB unmakes: The latest from the Greek front
, 22/07/2012
“We just showed that good news is possible in Greece”, said a beaming Greek minister the other day when it was announced that the European Investment Bank (EIB) was about to start funding investments in Greece again, after it withdrew toward the end of 2011 (in fear of losing its triple-A rating by associating itself […]
Bankruptocracy in the Greek Sector of Bailoutistan: The aftermath of the Reuters Report on Piraeus Bank
, 18/07/2012
You may have read the shocking story by Reuters on the ponzi scheme three (or more) Greek banks concocted in order to seem to raise more capital, without diluting the bankers’ stake in ‘their’ bankrupt banks. I have nothing to add to this excellent report by the folks at Reuters (except perhaps to suggest that […]
It is now official: The Eurozone's monetary transmission system is broken
, 17/07/2012
Under normal conditions, the interest rates that you and I must pay on a home loan, a car loan, our credit card, a business loan are pegged onto two crucial rates. One is the rate that banks charge one another in order to borrow from each other. The other is the Central Bank’s overnight rate. Alas, […]
Review of the Global Minotaur by Raja Junankar, for the ELRR
, 16/07/2012
This review of the Global Minotaur (click here for the Global Minotaur page) is special to me. The reason? Raja Junankar was one of the lecturers at the University of Essex while an undergraduate, back in the mists of time (1978-1981). Later, when I returned to Essex (after a year at Birmingham University), it was Raja who […]
'The Global Minotaur': A 'Great Transformation' for our Times – Review by Boris Stremlin for Left Eye On Books
, 12/07/2012
Left Eye on Books just published a generous and detailed review of my Global Minotaur authored by Boris Stremlin.
Interviewed by Doug Henwood on my new position as Economist-In-Residence at Valve Software
, 11/07/2012
A discussion with Doug Henwood on why I accepted the position of Economist-In-Residence at Valve Software. Jump to 33’40” to hear my take on the company’s anarchosyndicalist management structure and the scope for original economic research it provides. (Please forgive the poor sound quality – courtesy of a low quality skype line). See also this […]
Criticising Germany: Three principles for the fair assessment of proud nations
, 09/07/2012
Generalising is the first step toward racism. Every sentence beginning with “The Germans believe this” or “The Greeks do that” is an initial slide on a slippery slope leading, eventually, to bigotry. As I have argued before (click here for a video version) there is no such thing as the Germans, or the Brits, or the Greeks […]
The Latin Troika's Coup: what is left of the joy it generated a week later
, 04/07/2012
The half life of joy and celebration, following Europe’s Summits, is continuing to slide. The 19th such Summit since the Crisis erupted was, as I wrote here, the most successful (in that it produced, for the very first time in two and a half years) a decision that is not wholly fraudulent, irrational and irrelevant. It was, […]
Unanimity is not essential to cutting the ‘Gordian debt’: our letter to the FT as published today
, 02/07/2012
The other day I posted a letter that Stuart Holland and I sent to the Financial Times. Today it was published. Click here for the FT or…
June 2012 EU Summit Verdict: A good decision that will, probably, go to waste
, 29/06/2012
Mrs Merkel went to Brussels intent on striking two birds with one stone, pick up her bag immediately and return to Berlin with no further ado. The stone was the fraudulent re-packaging of existing structural and EIB funds (with the addition of a paltry 10 billion euros) into a grandiose-sounding ‘Growth Pact’. The two birds […]
Saving the Eurozone does not depend on Germany: Our letter to the Financial Times
, 28/06/2012
From Professors Stuart Holland and Yanis Varoufakis Europe is deadlocked in assuming that resolving the Eurozone crisis must be unanimous. Yet it does not need this. It could do so by ‘enhanced cooperation’ which needs support by nine or more member states while, on a motion for an enhanced cooperation policy, only those supporting it […]
A(nother) PROPOSAL FOR SAVING THE EURO ZONE: Guest post by Marshall Auerback
, 28/06/2012
This blog was established, initially, for the purposes of proposing solutions to the euro crisis; and in particular to propagate our Modest Proposal for Resolving the Euro Crisis. Two and a half years later, the eurozone is crashing and burning, while European politicians are steadfastly refusing to adopt a systemic solution. Those of us who […]
Open letter to a good friend and colleague (who happened to become Greece’s Finance Minister yesterday…)
, 27/06/2012
Dear Yanni, On the one hand I am writing to congratulate you. And on the other to express my disdain towards those who handed my friend the good ship’s wheel after the vessel has struck the iceberg. Utterly familiar with your effervescent optimism, I know you mean it when you declare confidence in Greece’s capacity […]
Greece is ungovernable (while the euro's derailment continues): On ABC tv 7.30 Report
, 26/06/2012
Following the latest Greek election, I was interviewed on the ABC’s 7.30 Report. In the interview (which you can watch here), I presented a gloomy, yet realistic, view that it really matters little now what happens in Greece. “Greece is finished”, I argued, as long as the derailment of Europe’s euro-system is proceeding unhindered. Read […]