tag:blogger.com,1999:blog-5882645467378797266.post1702010383536468791..comments2023-07-17T11:55:51.363+02:00Comments on ObservingGreece: EU - seek the advice of Bill Rhodes!kleinguthttp://www.blogger.com/profile/12491174042954678023noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-5882645467378797266.post-19489262709315628312012-11-25T18:56:38.382+01:002012-11-25T18:56:38.382+01:00I fully agree with the two reforms you outline. If...I fully agree with the two reforms you outline. If we have different views, it in not on the overall goals but on their implemenation.kleinguthttps://www.blogger.com/profile/12491174042954678023noreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-45335092402635366562012-11-25T16:19:55.282+01:002012-11-25T16:19:55.282+01:00You mean a fraction of the world economy where eve...You mean a fraction of the world economy where everybody (bar the USA) wants to export it's way out of this mess? Not gonna work.<br /><br />For the same reason, private investments in the tradeable sector are unlikely to happen (at least in any meaningful degree).<br /><br />But let's talk reforms. The best reforms that Greece should do are two:<br /><br />1) Influence people's behavior so that they are attracted towards the tradeable sector and away from the public sector and dubious "protected" services such as lawyers and pharmacists. To do that you need: a) a market b) appealing wages. European austerity precludes the first, and internal devaluation precludes the second.<br /><br />Privatizations are largely irrelevant. In fact, international experience tells us that primarily they're a rentier-seeking exercise in favor of the private sector (Where are the investments of Deutsche Telekom ever since they acquired OTE? Nowhere. In fact, they sold part of OTE's acquisitions. Where's the optical fiber network? Nowhere. Where are the investments of all the other privateers ever since the telecommunications market opened to the private sector? Nowhere).<br /><br />2) Influence people's behaviour so that they abide by the law. That is easy to do, if you care to.<br /><br />The first reform will work under a sovereign currency. The second reform is largely an internal issue of Greece, and thus completely dependent on it's progress as a society.Jim Sliphttps://www.blogger.com/profile/15325962115410722474noreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-19671751390510548132012-11-25T09:48:16.997+01:002012-11-25T09:48:16.997+01:00Let me just point out that you are saying 'bla...Let me just point out that you are saying 'blah-blah' not to me but to 40 years of successful track-record of Bill Rhodes. Perhaps you are not aware of it, but you are perfectly falling in line with what I have always referred to as the "EU-arrogance" where Europeans think they are just so much smarter than the rest of the world and don't need the rest of the world's experiences. Let me assure you that the rest of the world shakes its head about arrogant European incompetence. Here is the link to a speech by a former Chilean Finance Minister who castigates his European audience for that arrogant (and failing) attitude. <br /><br />http://www.youtube.com/watch?v=56BGJ5wtVhk<br /><br />Thank you for sending me this article which, in essence, says what I am saying in this blog. The quote of "without investments in the tradeable sector..." is one of the themes of this blog.<br /><br />The second conclusion would be correct if the Eurozone were a totally self-contained market zone with zero commercial transactions crossing its borders. However, the EZ-economy is part of the world economy. A small economy like that of Greece would need to secure only a tiny fraction of the world economy to turn its own economy around.<br /><br />So, all of this is not 'blah-blah' to me but a simple question of whether one wants to live in reality or in fantasy.kleinguthttps://www.blogger.com/profile/12491174042954678023noreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-67803633733874935972012-11-25T03:59:47.760+01:002012-11-25T03:59:47.760+01:00Here we go again, structural reforms, privatizatio...Here we go again, structural reforms, privatizations, blah blah..<br /><br />Here's how it actually is:<br /><br />"The premise for the Troika programs is that internal devaluation will make supported nations more competitive and therefore lead to an export driven recovery. This however, ignores two points.<br /><br />Firstly, without investment in the tradeable sectors to support the structural transformation and increased productivity the only point of adjustment is wages and employment which means that servicing existed debts held by the private sector becomes impossible ( I discuss this point here ).<br /><br />Secondly, if large sections of each countries export sectors are all attempting the same thing there will be significantly lower external demand to support this adjustment."<br /><br />http://www.macrobusiness.com.au/2012/11/greece-is-a-model-of-economic-mismanagement/<br /><br />It's as simple as that.Jim Sliphttps://www.blogger.com/profile/15325962115410722474noreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-33152869649142840752012-11-24T09:38:36.307+01:002012-11-24T09:38:36.307+01:00Very interesting!
I got the feeling that our germ...Very interesting! <br />I got the feeling that our german policy of the last year consisted in watching the southern european wages go down in the hope that their economy will pick up from a lower level through export or some such. Brady Plan was 7 years after the outbreak of the Latin American debt crisis 1982. Now we are commiting the very same errors. Why not a more active policy including way more pressure on rich people in Greece to pay their share of the costs of the crisis. Lemmy Cautionnoreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-34490533618380107192012-11-23T09:37:47.252+01:002012-11-23T09:37:47.252+01:00I LOVE brilliant minds. I LOVE William Rhodes'...I LOVE brilliant minds. I LOVE William Rhodes' ideas!!, I love your ideas, Herr Kastner, and I love the upper comment as well. I am fond of creative constructive thinking.<br />William Rhodes is the most near with my own view. I use other words however when I am explaining, cannot follow all detailed information, but I try. My mind is more working with metaphores than with the facts of reality: my profession (healthcare) is far from healthy banking, but in fact all is comparable. <br />Antoinette Janssenhttp://nl.linkedin.com/in/antoinettejanssennoreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-49182071569261085192012-11-23T07:19:05.921+01:002012-11-23T07:19:05.921+01:00The core of the issue is in your first quote - &qu...The core of the issue is in your first quote - "<i>You’ve got to have a plan... that you can sell to your own population because if you don’t have the population of your country behind you, it’s not going to work</i>"<br /><br />Rightly or wrongly there are 17 populations who perceive that they have a stake in any plan, many of whom think its a zero sum game, and they express their approval or otherwise via national elections. <br /><br />Devising a plan is as much (I would argue much more) in the realm of multi-lateral political negotiations as it is in the realm of a financial restructuring negotiations.<br /><br />The Euro is and always has been a political project. The problems can only be solved in the long run by wholesale structural changes to address the known design defects - fiscal union, banking union, single treasury, one central bank etc - that will take at least a decade. The sinners can't wait for that, what they need, and the sooner the better, is a structural circuit breaker. <br /><br />Professor Sinn has proposed that countries needing a bailout be temporarily suspended from the Euro, so that they can use known methods to get out of their crisis. As Rhodes tells us each country must have the scope to devise its own solutions. <br /><br />I've no doubt that come Dec 2, Greece will get its next tranche. Will that solve the problem - no - all it will do is to kick the can down the road - again.<br /><br />Here's what I'd do - take up Sinn's idea and suspend the sinners from the euro. Commission Rhodes and Kastner, to work with the sinner governments, people, banks, the ECB, IMF etc to implement country specific plans to transform them into competitive sustainable economies within 10 years. <br /><br />Meanwhile the others should set about doing the long term structural reforms so if/when the sinners return to the fold they will be entering a Eurozone that's it better shape than the current one. The sinners should have an option to remain outside the euro, but they may have to forego some carrots and feel a bit of stick if they choose to do that.<br /><br />CKCanutely Kinghttps://www.blogger.com/profile/07318977471631386327noreply@blogger.com