I've been having a good deal of debate with Greg on the history of the EU. I feel this is too categorical:
"Not only do I say the system was designed poorly I say it was actually designed with this outcome in mind. The intent was to eliminate any govt form having a chance to use fiscal policy, under the guise of "we have no more money!!!"
http://lastmenandovermen.blogspot.com/2016/06/boris-johnson-declares-project-fear-over.html?showComment=1467035364418#c7878862783585091701
If you're talking about the euro system, there's a lot of truth in it. Remember it's not even 20 years old. The larger EU system was not designed originally like this and there is still a lot of positive legacies from it-ending the era of European World War, enabling people to move and work freely across Britain and Europe.
Robert Kuttner, I think gives a pretty accurate picture:
"Not only do I say the system was designed poorly I say it was actually designed with this outcome in mind. The intent was to eliminate any govt form having a chance to use fiscal policy, under the guise of "we have no more money!!!"
http://lastmenandovermen.blogspot.com/2016/06/boris-johnson-declares-project-fear-over.html?showComment=1467035364418#c7878862783585091701
If you're talking about the euro system, there's a lot of truth in it. Remember it's not even 20 years old. The larger EU system was not designed originally like this and there is still a lot of positive legacies from it-ending the era of European World War, enabling people to move and work freely across Britain and Europe.
Robert Kuttner, I think gives a pretty accurate picture:
"When the original institutions that later became the E.U. were created in the 1940s and 1950s, the international system was designed on the ashes of depression and war to rebuild an economy of full employment and broad based prosperity. The system worked remarkably well."
"In the 1980s, as a backlash against the dislocations of the 1970s, Margaret Thatcher came to power in Britain (and Ronald Reagan in the US). Their policies returned to a dog-eat-dog brand of capitalism that benefited elites and hurt ordinary people. By the 1990s, when the European Economic Community became a more tightly knit European Union, it too became an agent of neo-liberalism."
"Policies of deregulation ended in the financial collapse of 2008. The austerity cure, enforced the gnomes of Brussels and Frankfurt and Berlin, is in many ways worse than the disease."
"Rising mass discontent has failed to dethrone the elites responsible for these policies, but it has resulted in loss of faith in institutions. The one percent won the policies but lost the people."
"So, yes, the Brits who voted for Brexit got a lot of facts and details wrong. And Britain will probably be worse off as a result. But they did grasp that the larger economic system is serving elites and is not serving them."
http://www.huffingtonpost.com/robert-kuttner/brexit-why-most-commentaries-miss-the-point_b_10690972.html
It's still ironic in a way that it's the British who did this as they had the best of both worlds as Kuttner himself says:
"Britain actually has a better deal than most E.U. nations. For starters, it retained its own currency, and controls its own monetary and fiscal policy. But as a member of the E.U., Britain does get to send tariff-free exports to the continent and London operates as a major European financial center. All of this now at risk."
But there is no question that the euro system has been disastrous and that if it weren't for this, the Brexiters never would have gotten much traction.
"Policies of deregulation ended in the financial collapse of 2008. The austerity cure, enforced the gnomes of Brussels and Frankfurt and Berlin, is in many ways worse than the disease."
"Rising mass discontent has failed to dethrone the elites responsible for these policies, but it has resulted in loss of faith in institutions. The one percent won the policies but lost the people."
"So, yes, the Brits who voted for Brexit got a lot of facts and details wrong. And Britain will probably be worse off as a result. But they did grasp that the larger economic system is serving elites and is not serving them."
http://www.huffingtonpost.com/robert-kuttner/brexit-why-most-commentaries-miss-the-point_b_10690972.html
It's still ironic in a way that it's the British who did this as they had the best of both worlds as Kuttner himself says:
"Britain actually has a better deal than most E.U. nations. For starters, it retained its own currency, and controls its own monetary and fiscal policy. But as a member of the E.U., Britain does get to send tariff-free exports to the continent and London operates as a major European financial center. All of this now at risk."
But there is no question that the euro system has been disastrous and that if it weren't for this, the Brexiters never would have gotten much traction.
Its probably most accurate to say the EMU.... European Monetary Union..... instead of straight up EU. That is the focus of my critique. That was a later development from much of the other pan european projects which definitely had a much more respectable intent in mind. The EMU, which was the bow on the package, the thing that they conceived as the final link between everyone, a common currency , was most definitely not conceived with respectable intent IMO. Its intent was to hamstring all govts and pre decided what acceptable levels of deficits were, which of course was in line with German ideas of responsible.
ReplyDeleteYes. This has been my point. The EU is one thing the euro, or euro monetary system is another.
ReplyDeleteEU is a mixed bag, the euro is a disaster.
However, since just about everything comes down to money (at least in our near completely finacialized world of today) the design of the money system stands as the most influential. Which is exactly how bankers want it. They control money, money controls people, hence they control people (to a large extent)
ReplyDeleteOff topic, Greg, what are your thoughts on the basic income vs. the Job Guarantee?
ReplyDeleteIm more in the JG camp to be sure. 1) I think most people want to work and contribute to something in some way 2) I think it is much more likely to get support politically for an increase in social spending if the spending is going to people who are working.
DeleteI think it would require a rethink of what we now define as working. Thats not a universal idea in this country, the idea of what counts as work. To many conservatives only work done either for your own business or in support of someone elses entrepreneurial efforts really counts as work. Most public sector jobs are considered wasteful (cuz a private guy can do them cheaper) or just unnecessary make-work.
Additional thoughts;
Just like we used to have forced conscription in the military of males we should probably go back to that and for both sexes but we also need to alter what military service might be e.g. - If we used our military in some way shape or fashion, along with the UN, to deal with situations like those Boko Haram kidnappings of those girls in Africa and stuff like that heck I might sign up for that duty. I also think that medical care could be a choice that people could make instead of military service.
James Galbraith thinks we should pay students who are at college, which I could get behind.... their job is to get educated and learn an important skill.
My fear with UBI is that it would be all there is. All other state support would vanish and UBI would become less and less effective as it didn't keep up with inflation etc. Plus it would be a plum to cut when things got tough
" I think it is much more likely to get support politically for an increase in social spending if the spending is going to people who are working."
ReplyDeleteYou would certainly think so. Yet what's interesting is that Neoclassical economists like Sumner seem particularly dismissive of the JG. Why I don't know.
But it seems to have something with their dislike of 'targeted transfers.'
Like even Matt Yglesias-much more of a liberal or 'progressive' than Sumner-also complains about 'make-work' proposals.
As best as I can tell this opposition for most NC for the JG as opposed to Basic Income is because NCs don't like 'make-work'-what they see as invented 'unproductive' work and they don't like conditional transfers which they see as 'paternalistic'
For instance, here is Yglesias on BI vs. JG:
Should there be a program in which money is given to people who can't find jobs in the labor market?
Should receipt of that money be made conditional on performing make-work labor for the government?
My view is "yes" and "no" and therefore that we should have a generous welfare state but not a federal jobs guarantee. When left-wing people say they want a jobs guarantee, I take it that they are saying they want more generous treatment of jobless people and a floor on living standards. Those are fine ideas. But why insist on delivering that generosity in the specific form of "here's a make-work job for you to do in exchange for a check"? Why not just hand over the check? That way you don't need to cut as many checks to people supervising the work, obtaining the equipment to do the work, etc."
http://www.slate.com/blogs/moneybox/2014/01/16/jobs_guarantee_more_trouble_than_it_s_worth.html
Now I've seen the MMTers like Bill Mitchell argue, and their argument is that
1. If you simply hand poor people check it doesn't magically lift them out of poverty. For instance, they still lack the experience and still aren't employable.
Of course, the longer you're out of work, the less willing employers are willing to hire you. JG helps them keep their skills and resumes up to date
2. Also, the MMTers argue that a JG is much less inflationary than BI-where you simply send people money.
Here is Mitchell on the difference between conditional and unconditional transfers-and why he thinks there's a case to be made for conditional transfers or wealth transfers vs. 'in kind' transfers:
The moralists always criticise these type of programs because they consider them paternalistic interventions to free choice. In most microeconomics textbooks you will find some discussion about the “optimality” of cash transfers versus in-kind (or conditional) transfers. The mainstream economists usually conclude that unconditional cash transfers are “best” because they allow “free choice”.
The reality is that when confronted with a starving child it is always better to give them “food” than give their father money to drink or gamble away! Children do not have “free choice”. I could write a whole blog about this sort of debate."
http://bilbo.economicoutlook.net/blog/?p=13025
Here, he's referring to a program in Brazil where the government gave money for the kids to the mother-not the father as so many Brazilian fathers either drink or gamble the money away!
"My fear with UBI is that it would be all there is. All other state support would vanish and UBI would become less and less effective as it didn't keep up with inflation etc. Plus it would be a plum to cut when things got tough."
DeleteIt's true that the conservatives at least would like to trade the BI for all other domestic government expenditures.
You get the Morgan Warstler's who propose such ideas in exchange for getting rid of unemployment benefits, etc.
And if you give people a BI if you're taking away their current govt benefits they might actually end up poorer.
Politically, the only way it could work, I think, is if you give the BI to everyone even the very wealthy-like SS.
If it's just a program for the poor, then as you say, it will be first to go.
"Just like we used to have forced conscription in the military of males we should probably go back to that and for both sexes but we also need to alter what military service might be e.g. - If we used our military in some way shape or fashion, along with the UN, to deal with situations like those Boko Haram kidnappings of those girls in Africa and stuff like that heck I might sign up for that duty. I also think that medical care could be a choice that people could make instead of military service."
ReplyDeleteI think this could be a good idea for reasons beyond only economics-though the economics I think is sound as well.
I saw this Iraqi vet on the Chris Hayes show a few months back that explained that we don't really understand why vets suffer PTSD.
It's not always because the vets have these terrible nightmares of what they say in war.
As he points out, you are at most in actual battle about 10 percent of the time. A lot of the time the vets miss the camaraderie of their fellow soldiers, the feeling of being in this together, the sense of higher purpose.
I then spoke to a vet on Twitter who told me this is true. When they're in the army life seems to have real purpose. Then they get back to society, and there seems to be no purpose. They feel like 'I did all this for what? No one appreciates what I did, and no one cares about anything.'
So it's the loss of being in this together and higher purpose.
Ideally, no one wants to face war if they can help it. But what they get from it, I guess, is that camaraderie that only comes from being in the foxhole together. When you both face enemy fire together and survive together-this leads to a tremendous human bond.