Versalio dvasia

Italų ekonomistai Emiliano Brancaccio ir Riccardo Realfonzo pirmadienį FT paskelbė atvirą laišką-įspėjimą apie "taupymo politikos" (austerity) keliamą grėsmę eurozonai - The economists' warning.

Parašai kaupiasi. Cituoju paskutines pastraipas:

John Maynard Keynes opposed the Treaty of Versailles in 1919 with these far-sighted words: “If we take the view that Germany must be kept impoverished and her children starved and crippled […] If we aim deliberately at the impoverishment of Central Europe, vengeance, I dare predict, will not limp.” Even though the positions are now reversed, with the peripheral countries in dire straits and Germany in a comparatively advantageous position, the current crisis presents more than one similarity with that terrible historical phase, which created the conditions for the rise of Nazism and World War II. All memory of those dreadful years appears to have been lost, however, as the German authorities and the other European governments are repeating the same mistakes as were made then. This short-sightedness is ultimately the primary reason for the waves of irrationalism currently sweeping over Europe, from the naive championing of flexible exchange rates as a cure for all ills to the more disturbing instances of ultra-nationalistic and xenophobic propaganda.

It is essential to realise that if the European authorities continue with policies of austerity and rely on structural reforms alone to restore balance, the fate of the euro will be sealed. The experience of the single currency will come to an end with repercussions on the continued existence of the European single market. In the absence of conditions for a reform of the financial system and a monetary and fiscal policy making it possible to develop a plan to revitalise public and private investment, counter the inequalities of income and between areas, and increase employment in the peripheral countries of the Union, the political decision makers will be left with nothing other than a crucial choice of alternative ways out of the euro.

Beveik euro optimistas Mark Blyth

Optimistai galvoja, kad jeigu žiaurosistema taptų netvari, elektoriatas ką nors nubalsuotų geriau. Miela iliuzija

Is it the notion of the “new normal” which retains the politicians and mainstream economist to realize that austerity has failed?

If the “new normal” is a permanent unemployment rate of 20 percent and the constant destruction of productive capacity, then the new normal will not be normal very long. At the end of the day you can’t run a gold standard type if monetary regime, which is what the Euro is in that no one can create the currency that they use and so deprived of inflation and devaluation as options the adjustment to shocks occurs entirely through wages and prices, in a democracy. Eventually someone will vote against it, and at that point the entire project can unravel. 

Nereikėtų turėti iliuzijų dėl tų demokratijų. Bet respect' Mark'ui už idealizmą.

Ambrose Evans-Pritchard apie Latviją

Lietuvos BVP atrodo kiek geriau, ir mes neturime tokių įtampų su tautinėm mažumom. Visa kita galime taikyti sau.

Ambrose Evans-Pritchard: Mad Latvia defies its own people to join the euro

EU finance ministers have just given the go-ahead for Latvia to join the euro in January 2014.
No matter that the latest SKDS poll shows that only 22pc of Latvians support this foolish step, and 53pc are opposed.
This is a very odd situation. The elites are pushing ahead with a decision of profound implications, knowing that the nation is not behind them. No country has ever done this before. 

Lietuva.

The concerns of the Latvian people are entirely understandable. Neighbouring Estonia found itself having to bail out Club Med states with a per capita income two and a half times as high after it joined EMU. Latvia may find itself embroiled in an even bigger debacle if the contractionary fiscal and monetary policies of the eurozone push Slovenia, Portugal, Spain, and Italy over a cliff, and push Greece and Cyprus into yet deeper crisis.

Apsimetame, kad krizė nesisteminė, nuostolių galimybę neigiame. Priešingu atveju tektų pripažinti savas klaidas.

It is worth reading the European Commission's report earlier this year on poverty and social exclusion.
Latvia stands out – with Bulgaria – as the country that has seen worst increase in "severe material deprivation", with the rate surging from 19pc to 31pc since 2008. (Bulgaria also has a fixed exchange rate, by the way). 

(Tekste grafikas visoms EU-27 valstybėms. Lietuvos skurdo rodikliai penkti nuo galo.)

While Latvia's unemployment rate has dropped to 11.7pc from a peak of 20.5pc, this is not the full story. Another 7pc have dropped off the rolls (one of the highest rates of discouraged workers in the EU). Roughly 10pc of the population has left the country.
The blue collar working classes have borne the brunt of the deflation strategy, while the affluent middle class with foreign currency mortgages have been protected. Policy has been shaped for the class interest of the elites (sorry to sound like a Marxist, but Marx was good at spotting this kind of abuse). Many who lost their jobs in the crisis – often Russian ethnics – have not found work, and may never do so again in Latvia if they are over 50.
This is how internal devaluations work. They break the back of labour resistance to pay cuts by driving the jobless rate to excruciating levels. The policy is a moral disgrace. Mussolini pulled it off in 1927 with his Blackshirts to secure the Lira Forte, but is that supposed to be a pedigree?

Analogiška situacija. Ironiška, bet pas mus fašizmu vadinamas tautiškumas. Dešimtadalio gyventojų emigracija daro įspūdį nebent kokiems nevykėliams. Išvažiavo ir išvažiavo, ar jau nėra apie ką daugiau kalbėti?

The country's recovery does not vindicate EMU austerity doctrine in any way at all. It merely shows that states with low debt and high exports can survive such a policy.
A low bar, surely?
As for joining the euro, you must be mad.

John Harvey apie neoliberalizmą

Taip jau surėdyta, kad žmonėms reikia turėti nuomonę apie dalykus, kurių jie negali suprasti. Nebūtina aiškintis priežasčių, užtenka konstatuoti, kad nuo pat vaikystės turime keisčiausių nuomonių apie aplinkinį pasaulį, kurios mums visai netrukdo, o net padeda gyventi.

Šulinyje gyvena boba žaliaakė.
Vaikučius randa kopūstuose.
Valgyk košytę, augsi didelis.
Dovanėles atnešė zuikis nuo Kalėdų senelio.
 
... evoliucija tikėjimo tvirtybės išbandymui...
... oi, koks panašus į tėvelį...

Galime tikėti įvairiausiais dalykais, jeigu tai padeda ar bent netrukdo gyventi.

Naujienų filtre ką tik iškrito puikiai surašytas John Harvey paaiškinimas, kad neoliberalizmas jau visiškai trukdo.
Ireland: No more austerity (and dump the euro)

Just days ago, it was reported that Ireland appears to be in recession once again (Ireland falls back into recession). How can this be given the rapid growth of the Celtic Tiger just a few years ago? Actually, this comes as no surprise to many economists because the so-called solutions being implemented are a function of the very same principles that caused the collapse in the first place. Unless a significant about-turn is executed, stagnation, emigration, and unemployment will continue for years to come.

That culprit is the philosophy of neoliberalism. It argues, among other things, that unregulated financial markets efficiently price assets, higher profits are good for everyone as they lead to increased employment and wages (the so-called trickle down effect), and governments represent a net drag on economic activity. Neoliberalism has been a powerful force driving world economic policy since the 1980s and as such laid the groundwork for many of the problems we are experiencing today. Ireland was not immune to these influences and, as a consequence, policy makers lowered corporate tax rates, made transfer pricing rules business-friendly, and adopted a largely hands-off approach to financial regulation (even when improprieties emerged). Dropping the punt in favor of the euro was also seen as a sign of economic responsibility because it linked Irish policy to that of the fiscally-prudent Germans.

:(

Čekijos centrinis bankas atmetė ECB senjoražo "pasiūlymus"

Centriniai bankai neprivalo turėti jų įsipareigojimus viršijančio turto - savo koordinacines funkcijas gali puikiai atlikti turėdami bet kokio dydžio neigiamą kapitalą. O jeigu galima dirbti be užsienio atsargų, kyla pagrįstas klausimas, kokio velnio centriniam bankui jas kaupti.

Pavyzdžiui Lietuvos bankas deklaruoja šiuo metu turįs ~19 mlrd.lt vertės tarptautinių atsargų. Kas nors suvokia, kam jos reikalingos? Valiutos stabilumui palaikyti? Ar tikrai verta vardan itin stabilaus lito kurso ne itin stabilaus euro atžvilgiu laikyti įšaldžius tokias atsargas? Kai 2009-ųjų pradžioje, paties didžiausio krizės nuosmukio metu, Lietuvai vadovaujantys tešlagalviai priėmė "herojišką" sprendimą "išlaikyti valiutos stabilumą", ar LB atsargos buvo kam nors panaudotos?

Ne. "Stabilumą išlaikė" sužlugdydami ekonomiką ir praskolindami valstybę. Centrinio banko atsargų piršteliu paliest nedrįso.

Sveiko proto testas: a) užsienio skola auga, b) centrinis bankas prisisūdęs užsienio aktyvų. Ką daryti?

Mokomės iš Čekijos (Dirk Ehnts):

There was a dispute some time ago between the ECB and the Czech Central Bank, which is described by Karl Wheelan in paper from November 2012:

The final argument, which Buiter and Rahbari advocate as a more convincing one, is perhaps best illustrated via an ongoing dispute between the ECB and the Czech National Bank. The Eurosystem has no legal requirement that its participating central banks have positive capital. Nonetheless, in its 2010 and 2012 Convergence Reports, the ECB has admonished the Czech National Bank because it has a negative capital position. Specifically, ECB (2010) recommends that the negative capital situation should be rectified “in order to comply with the principle of financial independence.”
According to this argument, negative capital compromises a central bank’s independence because it requires them at some point to request funds from the government to restore their positive capital position. Governments could then look for more influence over monetary policy in return for honouring this request. However, this is a completely circular argument. It relies on the assumption that positive central bank capital is required, so central banks must request recapitalisation and have their independence compromised. If positive capital is not required, then no request for recapitalisation is required and independence is not compromised.
Consistent with this point, the Czech National Bank has issued a statement (CNB, 2010) to say that it considers the ECB’s statement “completely unacceptable”. Specifically, it notes that “Throughout its existence, its capital position has never undermined its independence or limited its decision-making and operational capacity in any way. The CNB is therefore convinced that there can be no doubt about its legal and factual independence. Negative capital presents no problem for the CNB, and the central bank is able to meet its obligations.”

Lietuvis, prisiklausęs pasakų apie lito padengimą užsienio aktyvais ir savarankiškos centrinio banko politikos negalimumą turėtų krist iš kėdės iš pavydo. Čekams galima, o mums ne? Kodėl?

(Todėl, kad pinigų politikos prioritetą teikiant ne nacionaliniams, o neaišku kieno interesams, nebegalima nieko - negalima CB aktyvų investuoti neaptarnaujant svetimo senjoražo, negalima valstybinio sektoriaus lėšų nelaikyti užsienio savininkų bankuose, negalima turėti valstybinio komercinio banko).

Neseniai į akį krito 'interfluidity' Steve Randy Waldman replika neigiamo CB kapitalo adresu. Monetary policy for the 21st century:

There is a theory that the value of a currency is somehow related to the strength of the issuing central bank’s balance sheet, so a currency issued against fictional “goodwill” would quickly become worthless. Suffice it to say that, with respect to non-redeemable fiat currencies, there is absolutely no evidence for this theory. There is no evidence, for example, that the purchasing power of the US dollar has any relationship whatsoever to the Fed’s holdings of gold or foreign exchange reserves. The assets of existing central banks are mostly loans denominated in the currency the bank itself can produce at will. You may argue that those assets are nevertheless “real”, because repayments to the central bank will be with money earned from real activity. But that assumes what we are trying to explain, that people are willing surrender real goods and services in exchange for the bank’s scrip. Perhaps fiat currency derives its value from coercive taxation by government, as the MMT-ers maintain. Perhaps the imprimatur of the state serves as an arbitrary focal point for the coordination equilibrium required for a common medium of exchange. I don’t know what makes fiat currency valuable, but I do know that the real asset portfolio of the issuing central bank has very little to do with it.

Žinia, kai ekonominė teorija trukdo kreivai realybei, realybei nuo to nei šilta, nei šalta.

So, there is no problem with negative equity at the ECB, it seems. It’s just that the rules – once again – that had been put into place do not allow the ECB to function properly as a central bank. Without a major change in the rules regarding the ECB the crisis will never stop. The existing system is faulty and only “works” because Mario Draghi broke the rules. “Works” means here that the financial system does not collapse. However, the problems in the real economy are still there. The euro zone is in recession, some countries have mass unemployment and young people face the worst job market since the end of WW II.

Yra įvairių argumentų. Norint iš čekų ko išmokti, reikėtų galvoti. Galvojimas eikvoja energiją. Šuo kariamas pripranta.

Wynne Godley ir europietiškos problemos

Ralph Musgrave — European Commission tells the UK what do about youth unemployment.

That’s “European Commission” as in “we lot who have managed to create 50% youth unemployment in Greece, 50% in Spain and 36% in Portugal, so we obviously know what we’re talking about”.

See: Council Recommendation on the United Kingdom’s 2013 national reform programme

The European Commission’s – er – “advice” then descends from the ridiculous to the totally ridiculous: it tries to tell the UK what do about it’s deficit. Here it follows the standard IMF / OECD / Pete Peterson / Bowles and Simpson / Rogoff and Reinhart line, namely that a country should have a PLAN for deficit reduction.

The whole notion of a PLAN for reducing the debt or deficit is nonsense because it fails to get a point made by Keynes: “Look after unemployment and the budget will look after itself”.

In other words, a monetarily sovereign government should pitch it’s deficit (or surplus) at a level that reduces unemployment as far as is possible without exacerbating inflation too much. If the private sector happens to be in a fit of irrational exuberance, government may well need to run a surplus in order to confiscate financial assets from the private sector and quieten things down. Conversely, if the private sector is in subdued mood, government will need to run a deficit so as to boost demand and feed financial assets into private sector pockets.

And since it is impossible to predict what mood the private sector will be in in twelve months time (never mind three years time), it’s impossible to say what size deficit (or surplus) will be suitable in twelve months’ time or three year’s time.

Paskutinė pastraipa yra paprastas paaiškinimas, kodėl metinės BVP prognozės ir metiniai biudžetų planavimai negali būti "atsakingos" politikos dalimi. Prognozavimas tokiems laikotarpiams neveikia.

Jei kam įdomu, dedu nuorodą į 1998 metais publikuotą Wynne Godley ir George McCarthy straipsnį "Fiscal Policy Will Matter", kuriame jie

a) pademonstravo stock-flow consistent modelį, leidžiantį gana tiksliai prognozuoji JAV BVP pusę metų į priekį. Amerikos ekonomika didžiausia pasaulyje ir gana uždara, todėl tuos pusę metų galima laikyti ilgiausiu įmanomu prognozės laikotarpiu apskritai. Mažesnėms ir atviresnėms ekonomikoms prognozės būtų dar trumpesnės (jeigu dar būtų laiku prieinama joms reikalinga statistika;

b) suformulavo teiginį, dažnai vadinamą Godley teorema, pasak kurio bet kurios ekonomikos BVP augimui būtinas valdžios deficito plius eksporto santykio su mokesčiais ir importu augimas.

This concept of fiscal stance is not new. It is thirty years since Carl Christ, of Johns Hopkins University, had the brilliant insight that should an economy ever reach stationary equilibrium, all stock variables as well as all flow variables would be constant; and that if all stock variables, including government debt, were constant, government receipts would have to equal government payments. It would then follow that if the economy were moving toward stock-flow equilibrium and if taxes were levied as a proportion of income, the GDP of a (closed) economy would always be tracking, perhaps with a long lag, government outlays divided by the average tax rate – the very same concept that we call fiscal stance. Therefore, a necessary condition for the expansion of the economy, at least in the long term, is that the fiscal stance should rise: Government expenditure must rise relative to the average tax rate. If the tax rate were held constant, government expenditure would have to rise absolutely for output to grow; if government expenditure were held constant, the tax rate would have to fall.

Christ’s finding was confirmed in two famous articles, Blinder and Solow (1973) and Tobin and Buiter (1976). But this whole line of argument has never been influential in the policy discussion and now seems to have disappeared from the literature. Perhaps the notion of a stock-flow equilibrium is too much of a will-o’-the-wisp, and the lags that would lead the economy to it so long and complex that this concept of fiscal stance has been thought to have no operational significance. Our first major contention is that the Christ conclusion, suitably adapted, has a practical application of decisive importance.”

Jeigu jau pradėjom, pora papildančių nuorodų Michael Sankowski tekste:

The result of ignoring the accounting matrix is to forget we must have an ever increasing deficit in order to for the economy to grow. Reading through the papers by Buiter and Blinder, it’s easy to they knew this at some point roughly 40 years ago, but have forgotten it now.

(Update: Ramaman provides us the links to the papers Godley mentions. Blinder and Solow is here :Does Fiscal Policy Matter? (1972). Buiter and Tobin: Long Run Effects of Fiscal and Monetary Policy on Aggregate Demand (1974) )

Grįžkime prie eurozonos realijų. Žinomame 1992 metų straipsnyje Maastricht and All That Godley prognozavo dabartines eurozonos problemas

Some writers (such as Samuel Brittan and Sir Douglas Hague) have seriously suggested that EMU, by abolishing the balance of payments problem in its present form, would indeed abolish the problem, where it exists, of persistent failure to compete successfully in world markets. But as Professor Martin Feldstein pointed out in a major article in the Economist (13 June), this argument is very dangerously mistaken. If a country or region has no power to devalue, and if it is not the beneficiary of a system of fiscal equalisation, then there is nothing to stop it suffering a process of cumulative and terminal decline leading, in the end, to emigration as the only alternative to poverty or starvation.

ir nurodė gilumines priežastis

The central idea of the Maastricht Treaty is that the EC countries should move towards an economic and monetary union, with a single currency managed by an independent central bank. But how is the rest of economic policy to be run? As the treaty proposes no new institutions other than a European bank, its sponsors must suppose that nothing more is needed. But this could only be correct if modern economies were self-adjusting systems that didn’t need any management at all.

I am driven to the conclusion that such a view – that economies are self-righting organisms which never under any circumstances need management at all – did indeed determine the way in which the Maastricht Treaty was framed. It is a crude and extreme version of the view which for some time now has constituted Europe’s conventional wisdom (though not that of the US or Japan) that governments are unable, and therefore should not try, to achieve any of the traditional goals of economic policy, such as growth and full employment. All that can legitimately be done, according to this view, is to control the money supply and balance the budget. It took a group largely composed of bankers (the Delors Committee) to reach the conclusion that an independent central bank was the only supra-national institution necessary to run an integrated, supra-national Europe.

But there is much more to it all. It needs to be emphasised at the start that the establishment of a single currency in the EC would indeed bring to an end the sovereignty of its component nations and their power to take independent action on major issues. As Mr Tim Congdon has argued very cogently, the power to issue its own money, to make drafts on its own central bank, is the main thing which defines national independence. If a country gives up or loses this power, it acquires the status of a local authority or colony. Local authorities and regions obviously cannot devalue. But they also lose the power to finance deficits through money creation while other methods of raising finance are subject to central regulation. Nor can they change interest rates. As local authorities possess none of the instruments of macro-economic policy, their political choice is confined to relatively minor matters of emphasis – a bit more education here, a bit less infrastructure there. I think that when Jacques Delors lays new emphasis on the principle of ‘subsidiarity’, he is really only telling us we will be allowed to make decisions about a larger number of relatively unimportant matters than we might previously have supposed. Perhaps he will let us have curly cucumbers after all. Big deal!

Prieš dvidešimt metų pažadėjo, kad murkdysimės ir paaiškino kodėl. Deja, neapsiriko.

Merkel su Schäuble susirūpino įvaizdžiu

Spiegel Online. Austerity About-Face: German Government to Gamble on Stimulus

But a new way of thinking has recently taken hold in the German capital. In light of record new unemployment figures among young people, even the intransigent Germans now realize that action is needed. "If we don't act now, we risk losing an entire generation in Southern Europe," say people close to Schäuble.

Berlin is making an about-face, even though it aims to stick to its current austerity policy. The German government has stressed budget consolidation and structural reform since 2010, when Greece was on the verge of bankruptcy. Berlin has been arguing that this is the only way to instill confidence among investors in the battered debt-ridden countries and help their ailing economies recover.

[...] The government's change of heart isn't just a sign of selflessness and compassion. More than ever, the chancellor and the finance minister are worried that Berlin's tightfisted, heartless, austerity-obsessed image could solidify throughout Europe and do irreparable political damage. An exporting nation that sells two-thirds of its exports to other European countries cannot be unconcerned about its image abroad, they reason, especially when its government fears that constant criticism from the center-left Social Democratic Party (SPD) and the Green Party, claiming that it is acting as the gravedigger of the euro and dividing the EU, could hurt it in the upcoming election campaign.

[...] Last Tuesday, Schäuble sent a letter to Economics Minister Philipp Rösler in which he proposed that the coalition partners act together. "I believe that we should also offer bilateral German aid," he wrote, noting that he hoped that this approach would result in "significant faster-acting support with visible and psychologically effective results within a foreseeable time period."

Situaciją eurozonoje gelbėtų ekonomikos stimuliavimas fiskalinės ekspansijos priemonėmis. Politiškai tai nepriimtina, tai kad neatrodytų, jog visai nieko nedaroma, Vokietija paskolins pigiau pinigų nedideliems investiciniams projektams.

Depresuotoms pietų ekonomikosms toks stimuliavimas padės kaip viagra nabašninkui. Bet niekas negalės nuneigti, kad "Vokietija rūpinasi".