To those in the top 1% of wealth, deflation and a cheap Euro represent a bargain-basement buying opportunity--in other words, another transfer of ownership from working people to those that already own most of everything. Of course, this reduces the spending by the 99%, which eventually, perhaps already, shrinks the economy and degrades the value of these investments--if there are no buyers, what can your company sell and what is your stock worth?
What is most depressing is that I always thought European citizens were more politically engaged and that their governments and bankers were more responsive to the needs of people, not corporations. Now it appears that they are just as clueless as the US bankers and politicians who nearly destroyed our economy in 2008, and who pat themselves on the back because none have been held accountable for their serious crimes against society.
What is most depressing is that I always thought European citizens were more politically engaged and that their governments and bankers were more responsive to the needs of people, not corporations. Now it appears that they are just as clueless as the US bankers and politicians who nearly destroyed our economy in 2008, and who pat themselves on the back because none have been held accountable for their serious crimes against society.
4
Merkel's economics is and has been wrong.
3
And these austerity programs is what the GOP wanted for the US.
7
Let's see. 25% unemployment, cut pensions and higher taxes and I would bet some wage stagnation and housing losses are thrown in there. So then how could anyone not expect prices to go down. If the people who purchase goods and services have less money to spend how could they possibly pay the same prices they paid before? Or even spend as they did before? Even here in America many people who went to the regular grocery and goods stores are now shopping at discount stores, wouldn't you if you had less dollars to spend. Europe's decline has been slow because they have such great safety nets. The same problem here is the problem there, the rich who have committed fraud, confiscated middle class assets, got away with it and sent many middle class people back to the poor class are not putting the money back into the economy they are hiding it in Cayman Island et al bank accounts and gambling it on Wall Street further taking our raises from us in their dividends and higher share price.
As more of the world's economies slide down Piketty's idea of a world tax on the rich becomes even more realistic. If they can commit fraud with impunity and confiscate our assets then we should be able to tax them back to us.
As more of the world's economies slide down Piketty's idea of a world tax on the rich becomes even more realistic. If they can commit fraud with impunity and confiscate our assets then we should be able to tax them back to us.
4
Europe and the USA needs more industrial activity to create national wealth, not more government payrolls to consume existing national wealth!
Some people believe that businesses are greedy, but without greedy individuals, greedy businesses and greedy corporations starting businesses and providing jobs for citizens in each nation, most citizens would have to live off of the land or be beggars in the streets.
The ONLY purpose of each, any, and every business, partnership or corporation is to make profits and create wealth, not to create jobs!
Without greedy businesses making profits, there would not be any jobs, not even government jobs because without profitable businesses, the government would not have any wealth to confiscate via taxes from profitable businesses to pay for any government jobs and other government activities.
Jobs created with taxes by local or Federal government do not create wealth, but take a portion of the wealth from those who produced wealth to pay the bureaucratic government payrolls and government contracts for those various public services.
Some people believe that businesses are greedy, but without greedy individuals, greedy businesses and greedy corporations starting businesses and providing jobs for citizens in each nation, most citizens would have to live off of the land or be beggars in the streets.
The ONLY purpose of each, any, and every business, partnership or corporation is to make profits and create wealth, not to create jobs!
Without greedy businesses making profits, there would not be any jobs, not even government jobs because without profitable businesses, the government would not have any wealth to confiscate via taxes from profitable businesses to pay for any government jobs and other government activities.
Jobs created with taxes by local or Federal government do not create wealth, but take a portion of the wealth from those who produced wealth to pay the bureaucratic government payrolls and government contracts for those various public services.
2
Any Sovereign Nation's freshly printed paper currency, Treasury Bonds, or any electronic credits, Monopoly Money, Bitcoins, and/or even a silly new Sovereign Nation platinum coin made out of a few hundred dollars of Platinum and printed (minted) with "One Trillion US Dollars" on the face has "LITTLE OR NO VALUE" unless it can be exchanged for something of value.
The US Dollar is now redeemable primarily for title to existing privately owned US located properties and other real property assets.
The USA and each European nation must reindustrialize in order to reverse the negative Foreign Trade Balance before US citizens find their situations hopeless as unemployment increases and the US dollar loses its redeemable (purchasing) value. Government checks, paychecks, US dollars, and Euros will then not buy much of anything. Your weekly paycheck might not even buy (or be redeemed for) one loaf of bread in the near future.
Federal Deficit Spending and the Foreign Trade Deficit are insurmountable structural problems that will eventually destroy the US economy and then the US nation?
When buyers decide not to buy any more of our freshly printed paper “Sovereign Issued” US Treasury Bonds, then the US government Plan B of printing paper US dollars to pay for US government activities and entitlements which will destroy the buying power of the US Dollar, and then US economy and the USA as a nation will evolve into something resembling Greece, then Mexico, and then Somalia.
The US Dollar is now redeemable primarily for title to existing privately owned US located properties and other real property assets.
The USA and each European nation must reindustrialize in order to reverse the negative Foreign Trade Balance before US citizens find their situations hopeless as unemployment increases and the US dollar loses its redeemable (purchasing) value. Government checks, paychecks, US dollars, and Euros will then not buy much of anything. Your weekly paycheck might not even buy (or be redeemed for) one loaf of bread in the near future.
Federal Deficit Spending and the Foreign Trade Deficit are insurmountable structural problems that will eventually destroy the US economy and then the US nation?
When buyers decide not to buy any more of our freshly printed paper “Sovereign Issued” US Treasury Bonds, then the US government Plan B of printing paper US dollars to pay for US government activities and entitlements which will destroy the buying power of the US Dollar, and then US economy and the USA as a nation will evolve into something resembling Greece, then Mexico, and then Somalia.
2
There are severe structural problems with the Euro which, thanks to the neurotic stupidity and obstinacy of the Germans, have gone completely unaddressed. That is the problem. "Doing something" on the fiscal side is not going to address this either.
What Euro Zone conservatives did to Europe, Republicans here wanted to do to the U.S. economy. Thank god that leaders like President Obama said no to their folly.
2
Isn't it strange that the dollar is so strong while so many ordinary Americans find themselves in economic free fall?
Millions have stopped even looking for work. Recent college graduates (except perhaps those heading for Wall Street) are entering a job market so tight some economists are calling them "a lost generation." And many have massive student debts they will never be able to repay. A quarter of our country's children live in poverty and millions go to bed hungry.
And yet the dollar remains the world's strongest currency. How can this be?
Is it because 1 percent of Americans own 34.6 percent of the entire wealth of the nation and the top 20 percent own a whopping 85 percent of the wealth?
The bottom 80 percent (including you and me) has to subsist on 15 percent of the American economic pie. Too bad most of the hoi polloi can't afford to travel internationally where the few dollars they can scrape together would go further.
Now the new Congress has arrived eager to turn over more riches to their patrons, the uber-wealthy. The Repugs are already talking "tax reform," and we all know what that means.
Let's hear it for the dollar and our economic feudal lords who own enough of them to prop it up.
Millions have stopped even looking for work. Recent college graduates (except perhaps those heading for Wall Street) are entering a job market so tight some economists are calling them "a lost generation." And many have massive student debts they will never be able to repay. A quarter of our country's children live in poverty and millions go to bed hungry.
And yet the dollar remains the world's strongest currency. How can this be?
Is it because 1 percent of Americans own 34.6 percent of the entire wealth of the nation and the top 20 percent own a whopping 85 percent of the wealth?
The bottom 80 percent (including you and me) has to subsist on 15 percent of the American economic pie. Too bad most of the hoi polloi can't afford to travel internationally where the few dollars they can scrape together would go further.
Now the new Congress has arrived eager to turn over more riches to their patrons, the uber-wealthy. The Repugs are already talking "tax reform," and we all know what that means.
Let's hear it for the dollar and our economic feudal lords who own enough of them to prop it up.
3
What has the US done that Europe and Japan have not done? We have truly moved closer to energy independence. While Europe remains hostage to the whims of the little dictator, japan has backed away from nuclear power. Yes, Germany has a massive investment program in wind power - an investment that is not paying dividends.
And while the Left in this country despises both nuclear and carbon-based fuels, our country has made fantastic gains in development of previously untapped reserves of oil and natural gas. Look at the states with the lowest unemployment and you will find thriving oil and gas ventures. Yes, the Saudis are now doing their best to kill this industry - which should tell you just how threatening an energy independent US is to much of the un-free world.
And before you go and give credit to our own Dear leader, keep in mind that all of this new fuel is coming from privately held land reserves - something Obama has yet been unable to stop.
And while the Left in this country despises both nuclear and carbon-based fuels, our country has made fantastic gains in development of previously untapped reserves of oil and natural gas. Look at the states with the lowest unemployment and you will find thriving oil and gas ventures. Yes, the Saudis are now doing their best to kill this industry - which should tell you just how threatening an energy independent US is to much of the un-free world.
And before you go and give credit to our own Dear leader, keep in mind that all of this new fuel is coming from privately held land reserves - something Obama has yet been unable to stop.
Europe's leaders confused the economic dynamics of economies with those of individuals, families and companies and ignored textbook macroeconomics in favor of a silly morality play where economies must tighten their belts and suffer to pay their debts. Theses radical economic policies based largely on ideology came at great cost to their economies and their people.
1
When the headline announcing the death bed condition of the Euro appears in the NYT it is time to go long EUR. By no means is this a jab at the editors and writers, its just symptomatic of how sentiment influences public discourse. By the time the trend is clearly visible and headlines herald its coming the trend is over or very nearly so.
1
The trade balance will continue to worsen with the EU. All we hear about is the strong dollar policy, it is really the weakening Euro. The giant sucking sound is US export jobs heading to the EU zone because of the wobbling Euro. Meet the new boss, same as the old boss.
A major unsaid reason behind the reluctance of "Germany" to allow change
is that the changes *are* inflationary. To reduce the peripheral debts, the
easiest way is to inflate the currency - which directly harms the creditors.
The problem is that the collapse has impacted demand and now the chickens are coming home to roost. The "Rich" wanted to keep their money valuable in the face of a huge bubble and the system is so complex that they have stagnated their economies AND devastated the up and coming nations.
Its not just reform that is needed, europe needs a vision forward.
is that the changes *are* inflationary. To reduce the peripheral debts, the
easiest way is to inflate the currency - which directly harms the creditors.
The problem is that the collapse has impacted demand and now the chickens are coming home to roost. The "Rich" wanted to keep their money valuable in the face of a huge bubble and the system is so complex that they have stagnated their economies AND devastated the up and coming nations.
Its not just reform that is needed, europe needs a vision forward.
1
"The euro has been sliding against the dollar"
A graphic would have been nice.
All the words of this article are not worth what a single chart would have been.
A graphic would have been nice.
All the words of this article are not worth what a single chart would have been.
Forgive me, but bring on the cheaper(er) French and Italian wines please.
3
There are no investors in currencies only speculators who live in a herd. The long over priced by on rational basis Euro is now , like oil also overpriced for 7 years, out of favor. So it drops now like a rock. Price change by speculation up or down is rarely good for any part of the economy. Watch out stock market.
2
Europe is undoubtedly facing a big crisis, the manufacturers are not longer taking advantage of the privileges of the unique market. The globalisation has bring the cheap workers coming from emerging countries. But the main strong Euro countries still having in their hands a powerful economy in contrast with many emerging economies. Still having 300 million of potential consumers and it is a market not easy to put down. Greece getting out of the euro is not a big deal excepting for propaganda that makes the speculators inflate and deflate the markets in order to fill their pockets.
1
Imagine if the United States of America was made up of 50 nation states with their own language and culture that had fought two world wars among them in the past 100 years and lost their colonial empires. And what if those 50 nation states had an overwhelming white majority with a birth rate well below replacement level and little or no immigration.
While the most populous of those states with the biggest GDP was politically and militarily hamstrung because of a history of aggression that led to the two world wars. And the state that contained a major world faith's nation state home had the lowest unnatural birth rate of all. Finally one of those states had deep language and cultural ties to the world leading foreign superpower.
Europe is aging and shrinking facing a socioeconomic political educational demographic disaster. Germany has one hand tied behind it's back and is standing on one leg. Italy is too big to fail. Greece, Spain and Portugal are isolated. The colonized are coming. The U.K. has America.
America's stumbling malfunctioning misgovernment between the executive and legislator appears to be a relative comparative model of socioeconomic political efficiency unified by language and culture with a growing more youthful non- white native and immigrant population.
There are 50 socioeconomic political educational linguistic cultural United States of America. But there is no such 19 state European Zone. Any more than there is a 194 state United Nations.
While the most populous of those states with the biggest GDP was politically and militarily hamstrung because of a history of aggression that led to the two world wars. And the state that contained a major world faith's nation state home had the lowest unnatural birth rate of all. Finally one of those states had deep language and cultural ties to the world leading foreign superpower.
Europe is aging and shrinking facing a socioeconomic political educational demographic disaster. Germany has one hand tied behind it's back and is standing on one leg. Italy is too big to fail. Greece, Spain and Portugal are isolated. The colonized are coming. The U.K. has America.
America's stumbling malfunctioning misgovernment between the executive and legislator appears to be a relative comparative model of socioeconomic political efficiency unified by language and culture with a growing more youthful non- white native and immigrant population.
There are 50 socioeconomic political educational linguistic cultural United States of America. But there is no such 19 state European Zone. Any more than there is a 194 state United Nations.
1
Ive got news for Americans who repeatedly state this is the "end" of the euro. The euro is not going anywhere. Get used to it. Despite all the headlines, the euro has been strong, stable and delivered close to zero inflation and low interest rates. Pretty much all one can ask of a currency. The fact that some individual countries are struggling is due to how those countries were managed by their governments (read Greece).
This is less about a "tumbling" euro, and more about a reduction in the dollar printing undertaken by the Fed over the last number of years, in a deliberate attempt to weaken the dollar and give advantages to American exporters. Now, the devalued euro should be nothing but a positive to European industry.
This is less about a "tumbling" euro, and more about a reduction in the dollar printing undertaken by the Fed over the last number of years, in a deliberate attempt to weaken the dollar and give advantages to American exporters. Now, the devalued euro should be nothing but a positive to European industry.
1
They have to spend some money on their own infrastructure and create jobs to bring that money to fore.
1
Perhaps it's time that the editors consider the possibility that Europe is in trouble not so much for their Krugmanian "austerian" policies, but for the increasingly plain lack of strategic viability of their entire social model.
Increasingly large percentages of their potential labor forces don't participate -- 50.9% of Italians, 44.1% of the French, 42.5% across the European Union; as compared to 37.3% of Americans who neither work nor are any longer looking for work, and for us that's a 36-year high. The low levels of European labor participation are largely owing to how easy Europe makes it for their people NOT to work. And we wonder why their economies are in such shambles, unable to invest in the capacity to defend themselves even as they look east with some trepidation.
The lack of confidence in the euro could very well at least in part owe to the growing conviction on the part of the rest of the world that Europe is no longer strategically viable, and won't be until some economic cataclysm sets the scales back to zero, at immense cost to its people and social peace. Who wants to find himself in the middle of such misery, or economically vulnerable to it?
Indeed, European leaders may not be doing enough to reinvigorate their economies and their societies. But it may not have anything to do with an unwillingness to spend themselves out of their miseries: it may be that they still spend too much.
Increasingly large percentages of their potential labor forces don't participate -- 50.9% of Italians, 44.1% of the French, 42.5% across the European Union; as compared to 37.3% of Americans who neither work nor are any longer looking for work, and for us that's a 36-year high. The low levels of European labor participation are largely owing to how easy Europe makes it for their people NOT to work. And we wonder why their economies are in such shambles, unable to invest in the capacity to defend themselves even as they look east with some trepidation.
The lack of confidence in the euro could very well at least in part owe to the growing conviction on the part of the rest of the world that Europe is no longer strategically viable, and won't be until some economic cataclysm sets the scales back to zero, at immense cost to its people and social peace. Who wants to find himself in the middle of such misery, or economically vulnerable to it?
Indeed, European leaders may not be doing enough to reinvigorate their economies and their societies. But it may not have anything to do with an unwillingness to spend themselves out of their miseries: it may be that they still spend too much.
Dear Editors,
The human reach across geo, eco, bio, culture, & tech networks is unprecedented per exponential gains in population and tech.
Our cultural codings structures have not matched that reach.
A survival problem because:
“The rule of thumb is that the complexity of the organism has to match the complexity of the environment at all scales in order to increase the likelihood of survival.” Yaneer Bar-Yam
CODE: Entropy-generated, efficacious infrastructure for complex network relationships.
“The story of human intelligence starts with a universe that is capable of encoding information.” Ray Kurzweil
Genetic code / Bio network;
Language (spoken & written), moral, religious, math, legal, etiquette &
monetary codes / Cultural network;
Software code / Tech network.
We're asking humans to calibrate complex network relationship Value information for nearly all relationships across all networks -- with sufficient speed, accuracy, and power -- using (primarily) a 3,500-year-old culture app: monetary code. And for future relationships too. Add carbon to one network: Y’all use monetary code to compute key relationship values per impacts in 2025, don’t forget 2049. Won't work.
We added 4 coding structures to our cultural genome in the transition from tribal social structures to vastly more complex city-states. Need to add again. Monetary code: too slow, weak, inaccurate code per complexity.
"A technology can only be pressed so far it runs into some limitation." Brian Arthur
The human reach across geo, eco, bio, culture, & tech networks is unprecedented per exponential gains in population and tech.
Our cultural codings structures have not matched that reach.
A survival problem because:
“The rule of thumb is that the complexity of the organism has to match the complexity of the environment at all scales in order to increase the likelihood of survival.” Yaneer Bar-Yam
CODE: Entropy-generated, efficacious infrastructure for complex network relationships.
“The story of human intelligence starts with a universe that is capable of encoding information.” Ray Kurzweil
Genetic code / Bio network;
Language (spoken & written), moral, religious, math, legal, etiquette &
monetary codes / Cultural network;
Software code / Tech network.
We're asking humans to calibrate complex network relationship Value information for nearly all relationships across all networks -- with sufficient speed, accuracy, and power -- using (primarily) a 3,500-year-old culture app: monetary code. And for future relationships too. Add carbon to one network: Y’all use monetary code to compute key relationship values per impacts in 2025, don’t forget 2049. Won't work.
We added 4 coding structures to our cultural genome in the transition from tribal social structures to vastly more complex city-states. Need to add again. Monetary code: too slow, weak, inaccurate code per complexity.
"A technology can only be pressed so far it runs into some limitation." Brian Arthur
1
The US dollar has been hideously undervalued for the last few years. If anything, the "decline" of the Euro (which of course directly corresponds to the "return" of the dollar) is as much about a return of US financial credibility as it is a about decay in Eurozone economies. As US goods became cheaper, exports increased, and the macroeconomic situation improved. In theory, the same thing should happen to Europe. The Euro remains a young experiment, pairing historically strong, disciplined economies with weaker, obviously less disciplined economies. It is a miracle that it happened in the first place, and that it has been sustained this far. The Euro will require ongoing tuning and adjustment. Citizens here understand this. Economies are cyclic. Europe -- some countries faster than others -- will also find its way around the cycle. As in the United States, which took almost a decade to climb out of the Great Recession, this will take time. Perhaps with more aggressive leadership this could go faster, but the European government is no more monolithic than that US government. There are checks and balances, gridlock, and people who game the system. In additional, because the Euro is a common currency, the European countries that cycle around more quickly will bear the same valuation as the laggers, giving the impression of general underperformance. This is not fair, but it was part of the equation from the start. No one here is in denial.
4
the subject matter of economics concerns the administration of scarce resources,to analyse society subjects in a monetary manner implies creating problems in a sardonic way,probably obvious for some people,however you ought to know welfare economics of considerable theoretical importance,implying ideological assumptions ,sometimes regard as working hypotheses,never universal ! Mind therefore all kind of all too easy comparisons.
About scarce sources,about allocation about moral philosophy,about all kind of interrelations "invisible ":Land grabbing by Fred Pearce and Field Notes from a Catastrophe by Elizabeth Kolbert ,outstanding studies ,might be helpful.
And perhaps time to (re) study the economist Walras!
About scarce sources,about allocation about moral philosophy,about all kind of interrelations "invisible ":Land grabbing by Fred Pearce and Field Notes from a Catastrophe by Elizabeth Kolbert ,outstanding studies ,might be helpful.
And perhaps time to (re) study the economist Walras!
The euro has been grossly over valued for years.
Very surprising analysis. My impression is that most economists do not tie the evolution of a currency to growth prospects. Exchange rate fluctuations follow much more complicated rules . Any economist out there? M. Krugman?
1
Got all the dating of events wrong. Spain’s unemployment problem, especially among the younger group, predates the Euro’s rise and fall.
The issues with the Euro are in its design. The German and the Dutch are fed of keeping their belts tight while the ‘Olive belt’ have been having a free ride with massive deficits for more than 10 if not 20 years – ie government stimulus spending that Krugman recommends, usually during periods of weakness. Keep taxing companies and individuals to pay for the spending. The result: European companies create jobs outside Europe, rather than at home.
If you ever speak to people in Spain, they are the first to admit that it is much better to live from Government support than go out and find a job. The second part is the ageing problem and the fact that people refuse to have kids, except for recent immigrants. If anything, this will get worse.
The issues with the Euro are in its design. The German and the Dutch are fed of keeping their belts tight while the ‘Olive belt’ have been having a free ride with massive deficits for more than 10 if not 20 years – ie government stimulus spending that Krugman recommends, usually during periods of weakness. Keep taxing companies and individuals to pay for the spending. The result: European companies create jobs outside Europe, rather than at home.
If you ever speak to people in Spain, they are the first to admit that it is much better to live from Government support than go out and find a job. The second part is the ageing problem and the fact that people refuse to have kids, except for recent immigrants. If anything, this will get worse.
1
Whatever its causes ,the fall of the Euro is a blessing for European economies . At this stage any increase of exports and reduction of imports is exactly what we need .Instead of using this moralizing tone you could have mentioned this obvious fact .For years the Euro has been grossly overvalued and I do not remember any comment to the effect that it proved the superiority of European over American policies at the time.
7
I blame Obama!!!?
2
With the European unemployment rate at around 12.5% and governments carrying over 120% of debt their will be no recovery for Europe, not for a long time... These economic surveys and opinions from world leaders will be adjusted in the coming months due to seasonal variations, trust me! What Europe needs to do is pay down their debt, relax union based labor laws and sell off their state run businesses!
This is what the Republicans are trying to do in America, thank God for President Obama to fight them!
1
Everyone understands that our economy has slowly recovered. Unemployment in the private sector has stopped increasing, production is increasing. This recovery is in response, among other factors, to a government stimulus initiated in 2009.
But we've fired teachers and government workers because Republicans, despite what they see happening in Europe with austerity programs, have cut back funding for government services.
Stupidity or greed? BOTH.
But we've fired teachers and government workers because Republicans, despite what they see happening in Europe with austerity programs, have cut back funding for government services.
Stupidity or greed? BOTH.
3
Yes, we know, the answer is always more spending - and spending of funds that are created out of thin air. What could possibly be wrong with that?
1
Where in this opinion is the major reason for the euro's decline?
The gamble of currency speculators in the US and internationally?
The gamble of currency speculators in the US and internationally?
2
It is quite evident that the German led economy is getting nowhere and sooner or later they have to get over their phobia over defect to get out of the slums. As far as the euro is concerned, we must remember that at its inception it was set at 1,15 to the dollar and I think that it is the proper exchange. The US has profited from the unnatural strength of the euro. How can a currency of a failing economy remain so strong? The new exchange should help a bit but first Europe has to inject a good deal of liquidity in the economy.
1
So let me get this straight. The Fed uses QE for half a decade to lower the value of the dollar, in the biggest competitive devalluation since the Great Depression. For five years the US economy exports its unemployment to Europe. And now, when Europe finally decides enough is enough, and sets out to counteract American QE with its own, so that the euro is finally close to its fair value, the NYT wants to give Europeans advice? So much hypocrisy so little time, I guess.
8
" For five years the US economy exports its unemployment to Europe."
1.Could you please elaborate on this supposedly export of US unemployment to Europe?
2. For several years now Prof. Krugman has argued in this very paper that the strict austerity measures that Chancellor Angela Merkel of Germany insisted on for the 'fringe countries' hurt the economies of Europe even more. And he was right on that that obviously.
1.Could you please elaborate on this supposedly export of US unemployment to Europe?
2. For several years now Prof. Krugman has argued in this very paper that the strict austerity measures that Chancellor Angela Merkel of Germany insisted on for the 'fringe countries' hurt the economies of Europe even more. And he was right on that that obviously.
3
There will never be any real economic recovery of Europe and it will continue its descent into a dark age, if there is no Glass-Steagall type of reorganization of the banks' trillions in gambling debt. The banks have a toxic debt that can never be bailed out or bailed in and needs to be written off as they are hopelessly bankrupt.
Europe needs stop their insane drive towards war with Russia and China and instead join the BRICS nations' program of growth and development in the real economy. In contrast to Europe and America's corrupt banks, theirs are injecting direct credit into the real economy, they (Russia/China) also have a real science driver program of nuclear energy technology, this is much higher more advanced energy compared to the less reliable, less powerful, less efficient windmill/solar "green" tech. China has a real space program going, with plans to mine helium 3 on the Moon which will be used to fuel advanced nuclear fusion reactors and bring humanity closer to the stars. How will humanity ever reach the stars when the West is heavily investing in primitive "green" windmill/solar tech? Ever seen a spaceship with a windmill/solar panel on it?
Europe needs stop their insane drive towards war with Russia and China and instead join the BRICS nations' program of growth and development in the real economy. In contrast to Europe and America's corrupt banks, theirs are injecting direct credit into the real economy, they (Russia/China) also have a real science driver program of nuclear energy technology, this is much higher more advanced energy compared to the less reliable, less powerful, less efficient windmill/solar "green" tech. China has a real space program going, with plans to mine helium 3 on the Moon which will be used to fuel advanced nuclear fusion reactors and bring humanity closer to the stars. How will humanity ever reach the stars when the West is heavily investing in primitive "green" windmill/solar tech? Ever seen a spaceship with a windmill/solar panel on it?
1
Have I ever seen a spaceship with a solar panel on it? Yes. All of them. Literally all of them.
3
I hate to interject a fact, but if you look at the space station, it derives its power from ... wait for it, yes, solar panels.
3
There’s been much speculation recently that the U.S. economy has been behaving like it did back in 1999. It seems the Euro has decided to join the party by falling back to the level at its January 1, 1999 launch, which was $1.18. In any case, a strong dollar is invariably good and the greenback seems to peak every 15 years or so – 1984, 1999 and 2014 – which have all been stellar years for the U.S. economy.
But the bigger story is how wrong conservatives have been in trashing the Fed’s monetary policy of the past several years as “debasing the dollar.” In fact, the European Central Bank (ECB) is now seriously considering emulating Uncle Sam as Europe is facing deflation and rising unemployment. Whether the ECB’s actions are too little, too late will be hard to tell until much later this year. Nonetheless, if the economic tide on this side of the Atlantic continues to rise through 2015, it might just lift boats on the other side of the pond as well.
But the bigger story is how wrong conservatives have been in trashing the Fed’s monetary policy of the past several years as “debasing the dollar.” In fact, the European Central Bank (ECB) is now seriously considering emulating Uncle Sam as Europe is facing deflation and rising unemployment. Whether the ECB’s actions are too little, too late will be hard to tell until much later this year. Nonetheless, if the economic tide on this side of the Atlantic continues to rise through 2015, it might just lift boats on the other side of the pond as well.
2
The Euro has been overvalued by about 20% for some considerable time, something that was seen as a good thing for our economy by recent US administrations.. But they shouldn't worry in Europe. The Republicans in control of congress, and probably the White House after the next elections, will have things back the way they were before very long. Eventually the Euro will be seen as a failure by those countries which will end up in more-or-less permanent austerity mode to satisfy the more prosperous members of the monetary union and they will go back to their own currency. And the UK will be congratulating itself for its wisdom in sticking with the pound.
3
This is a very misguided notion that the lower Euro exchange rate is cause for alarm.
Quite the contrary. A lower Euro is a dream for European exporters like Germany and is an effective way to combat deflation.
As for any negative side-effect to the US economy, there will hardly be any. The total value of all exports from the US to the EU are less than 2% of US GDP. Even if those exports were to tumble by say 10% (a huge drop), that would represent only 0.2% of US annual GDP lost. In other words, noise.
Quite the contrary. A lower Euro is a dream for European exporters like Germany and is an effective way to combat deflation.
As for any negative side-effect to the US economy, there will hardly be any. The total value of all exports from the US to the EU are less than 2% of US GDP. Even if those exports were to tumble by say 10% (a huge drop), that would represent only 0.2% of US annual GDP lost. In other words, noise.
9
"A lower Euro is a dream for European exporters like Germany"
And Germany's economy is dominated by those exports.
And Germany's economy is dominated by those exports.
8
And Germany has earned the right to those exports for producing superior products at a reasonable cost in spite of the relatively high cost of labor within their borders.
But such is the reward for hard work and good management, is it not?
Why should the Germans, or for that matter the United States, carry the rest of the world on their backs?
But such is the reward for hard work and good management, is it not?
Why should the Germans, or for that matter the United States, carry the rest of the world on their backs?
2
Absolutely. And the euro has been overvalued for too long in a time of crisis. It's about time the ECB decided to use the methods used by the Federal Reserve.
"Not doing enough"? Indeed, not enough devaluation.
"Not doing enough"? Indeed, not enough devaluation.
1
First, it must never be forgotten that the cancerous, wild west banking practices with customized credit derivatives that led to this global crisis began in the U.S. and were spread to Europe. Secondly, it is very misleading to suggest that European leaders have been idly watching since the crisis began. They have done an enormous amount, despite being hamstrung by the lack of an authoritarian central bank and a true financial union. Under threats from bankers that economic armageddon would be visited upon them should they do nothing, trillions of euros were taken from European taxpayers and given outright to banks, public and private, across the Union. Trillions more were lent to insolvent banks at near 0% to cover losses. Bad loans were absorbed. The U.S. Federal Reserve, partly, one can assume, at the request of European leaders, chipped in with multiple trillions without so much as a by-your-leave from American taxpayers. Unprecedented, enormous steps have been taken. The problem is, they were the wrong steps to save the wrong people.
That's what investors are saying by driving down the euro. They're saying the policies have failed and the game is over. It's time to cash out. Saving banks at the expense of the people does not work. Dumping bad bank assets on the backs of workers does not work. Punishing the victim does not work. Preventing accountability for gambling losses does not work.
This editorial appears to be calling for more of the same. That will not work.
That's what investors are saying by driving down the euro. They're saying the policies have failed and the game is over. It's time to cash out. Saving banks at the expense of the people does not work. Dumping bad bank assets on the backs of workers does not work. Punishing the victim does not work. Preventing accountability for gambling losses does not work.
This editorial appears to be calling for more of the same. That will not work.
10
Germany is to blame for austerity.
The others for not coming up with something more persuasive.
Everyone else seems just fiddling around and coming up with a patchwork of half-cooked ideas.
We need bold and well-engineered macro-economics, but it may have to be the germans, who have been ordo-liberals for seven decades, to come up with that.
The others for not coming up with something more persuasive.
Everyone else seems just fiddling around and coming up with a patchwork of half-cooked ideas.
We need bold and well-engineered macro-economics, but it may have to be the germans, who have been ordo-liberals for seven decades, to come up with that.
4
Yes, the corrupt elites of Greece refused to save themselves. It was much the same in Italy. Spain not so much, because it was taken down more by outside forces investing via private debt.
Germany forcing austerity on Greece and Italy is wrong, but Germany cannot save them if they won't save themselves. The harsh truths have been buried under the poor solution of austerity. It needed a confrontation that never happened, but still must happen.
Germany forcing austerity on Greece and Italy is wrong, but Germany cannot save them if they won't save themselves. The harsh truths have been buried under the poor solution of austerity. It needed a confrontation that never happened, but still must happen.
5
If you mean by the "elites" those who no longer provide any productivity to the economy and are generously funded in their retirements from the age 50, then, I would have to agree with you.
Greece's problems is that far to many are taking from the government, or not paying a reasonable share in tax dollars (for whatever reason) than there are giving to it.
Greece's problems is that far to many are taking from the government, or not paying a reasonable share in tax dollars (for whatever reason) than there are giving to it.
2
Yet another totally uninsightful article that fails to address the root cause of the problem -- Europe's demographic implosion.
Only one thing is going to rescue Europe economically -- the growing influx of African Muslims.
One hundred years from now, the majority of Americans will be Latinos and the majority of Europeans will be Africans. And the world will be a better place because of this.
Only one thing is going to rescue Europe economically -- the growing influx of African Muslims.
One hundred years from now, the majority of Americans will be Latinos and the majority of Europeans will be Africans. And the world will be a better place because of this.
9
Why wait?
Right now, the majority of those living in Africa are African and the majority living in South America are Latinos.
With the greatest of respect to these peoples, how are they doing?
Right now, the majority of those living in Africa are African and the majority living in South America are Latinos.
With the greatest of respect to these peoples, how are they doing?
3
All the Euro zone has to do is further slash medical care, pensions, money for education, infrastructure and give tax cuts to the rich.
Because eminent economist Ronnie Rayguns said so. While raising the US debt ceiling a record 17 times in 96 months.
Because eminent economist Ronnie Rayguns said so. While raising the US debt ceiling a record 17 times in 96 months.
46
The United States needs to learn and avoid austerity, France's strategic misfortune. We need to continue to use and expand our current strategy of quantitative easing and economic stimulus.
The dollar is up 15% against the Euro. That raises the Chinese renminbe 15% because it is based on the dollar. The advance of purchasing power by both nations' currencies allows further acquisition, development and expansion of China's and US industries worldwide.
Together with China, the USA can lead France, Europe, Ireland, Britain and Japan to transform their national economic strategies of austerity, replacing austerity with expanded monetary stimuli. Self-strangling nations locked into austerity NEED TO FOLLOW the successful models of economic stimulus demonstrated by the USA and China.
And both nations, China and the USA, NEED to continue with quantitative easing and monetary stimulation of their own domestic economies to cement their leadership of the world economy and lead by example the family of world nations.
The dollar is up 15% against the Euro. That raises the Chinese renminbe 15% because it is based on the dollar. The advance of purchasing power by both nations' currencies allows further acquisition, development and expansion of China's and US industries worldwide.
Together with China, the USA can lead France, Europe, Ireland, Britain and Japan to transform their national economic strategies of austerity, replacing austerity with expanded monetary stimuli. Self-strangling nations locked into austerity NEED TO FOLLOW the successful models of economic stimulus demonstrated by the USA and China.
And both nations, China and the USA, NEED to continue with quantitative easing and monetary stimulation of their own domestic economies to cement their leadership of the world economy and lead by example the family of world nations.
14
American conservatives love the austerity measures implemented throughout Europe since the 2008 meltdown. If both houses of Congress and the White House go to the GOP in 2016, we can all settle into long stretch of Euro-style stagnation.
To prevent this, voting would help.
www.endthemadnessnow.org
To prevent this, voting would help.
www.endthemadnessnow.org
47
"American conservatives love austerity measures"
Where is the evidence of this? The national debt increased significantly during the Reagan, Bush Sr. and GW Bush Presidencies.
Where is the evidence of this? The national debt increased significantly during the Reagan, Bush Sr. and GW Bush Presidencies.
1
Irrefutable and undeniable proof that austerity DOES NOT work!
Let it be the final nail in the coffin for austerity.
Let it be the final nail in the coffin for austerity.
29
Has there ever been any doubt? None of the 'austerity' economists produced a shred of evidence showing that this policy actually improved things. The only purpose in austerity was to protect the banks so that they are re-paid for their foolish loans and keep taxes low for the wealthy. It's hard to justify 'austerity' on any other ground.
14
When Greece first ran into problems, it was not because of austerity. It was because they were spending money like drunken sailors. Austerity is the hangover--painful but necessary. The alternative is to keep drinking, which makes you feel better in the short term but always fails in the long term.
1
Interesting isn't it, that both Ireland and Spain, as a result of the austerity measures, are again have growing economies, while the the remainder of Europe, where little or no pruning has been done, is sliding inexorably into depression.
I guess austerity really doesn't work, does it?
I guess austerity really doesn't work, does it?
1
This prove that Paul Krugman even with his noble prize for economics
knows almost nothing.
How is it possible that European countries with all the social programs he advocates and tax rates he advocates and very little spent for the military can't keep up with our economy.
knows almost nothing.
How is it possible that European countries with all the social programs he advocates and tax rates he advocates and very little spent for the military can't keep up with our economy.
10
"How is it possible?"
A foolish austerity.
A foolish austerity.
6
Perhaps you should read Krugman recently. It seems you missed the point that Europe has been much more aggressive on austerity than the US. Krugman would attribute much of the stagnation in Europe - low demand from both public and private - to austerity and concern about "runaway" inflation when the was need for stimulus. Fortunately for the US, we've had a modest amount of stimulus when needed, though many would argue with the mechanisms by which that was applied. Personally, I'd like the US take advantage of low interest rates to invest more heavily in our domestic infrastructure - jobs that must be done in the US, bringing our highway construction and repair back to levels that were 'normal' before the highway trust fund and fuel takes became a battleground rather than an area of generally bipartisan agreement. We might even go further and capture some of the windfall from recent lower petroleum prices in the form of a fuel surtax specifically for transportation infrastructure. Ratchet that surtax up or down as / when petro prices change substantially. Off-set this surtax with thoughtful adjustments elsewhere (lower income tax on middle class or businesses that don't already avoid nearly all of their corporate taxes) if you can't abide any net tax increases. Keep gas prices, including the fuel surtax, at a level that will continue to encourage the shift to more fuel efficient transportation - higher mileage cars and trucks, or public transport where that is available.
5
"How is it possible that European countries can't keep up with our economy"
Or, to put it another way, if Washington is broken, what must things be like in Berlin or Paris?
Or, to put it another way, if Washington is broken, what must things be like in Berlin or Paris?
2
Canada's dollar has also dived against the US dollar but political union must precede any resurgence in the presently politically schizophrenic Euro Zone - investors seek a Euro zone wide economic policy with which they may have a reasonable confidence in direction and ideology - such a cautious article deliberately devoid of any posturing over the US resurgence over a formerly caustically bullish European mindset contra the US - China benefits from a strengthening dollar according to the unity of its currency and bank assets to it
1
Given the social disruptions in the area today where Europe is slowly devolving into Baghdad or Damascus, there may be a certain amount of political cooperation, but is certainly is not going to be of the type that your are envisioning, Mr. M.
More likely it will be a political alliance that will draw back on many of the well-intentioned but ultimately flawed liberal...er...progressive policies that have turned such places as Paris and Lyon into a third-world ghetto.
More likely it will be a political alliance that will draw back on many of the well-intentioned but ultimately flawed liberal...er...progressive policies that have turned such places as Paris and Lyon into a third-world ghetto.
It's amazing to an editorial in the NYT based on such weak research. For months, the European Central Bank and other fiscal leaders have made it no secret that they are deliberately weakening the Euro to help exports, especially in light of the sanctions against Russia and the diminished market there. If you look at what happened at the biggest European companies, you will find that they have benefited significantly from the weakened Euro. A bigger concerns for most Europeans is the insecurity caused by an unpredictable Putin, not the exchange rate.
9
How are they "deliberately weakening the euro"? What measures have they taken?
The essential problem with the Euro is that its value is not pegged to a single state economy. The floating dollar works (as opposed to a Gold Standard) because its value is predicated on the future of the American economy. The Euro extends the idea of a floating currency to the mere "assemblage" of separate economies, effectively raising the level of uncertainty as to its value in the future. Investing in Euros is therefore tantamount to investing in a fragile fantasy of a unifed European economy.
12
The value of gold also floated, against the size of the American economy. All money does that.
The limited quantity of gold meant that it floated down, as deflation, and so tended to cripple that economy at key moments. Still, it floated, just the wrong way. That's why we don't do that anymore.
The limited quantity of gold meant that it floated down, as deflation, and so tended to cripple that economy at key moments. Still, it floated, just the wrong way. That's why we don't do that anymore.
4
NYT Editorial Board " The currency has fallen because investors fear that the eurozone is stuck in an economic quagmire and its leaders are not doing much to pull it out."
Not entirely correct from an economic-political standpoint. True, the eurozone is in trouble. The reason is not the lack of political leadership or the Greek. Portuguese, Spanish and Irish debt crisis. The debt crisis is just a symptom of a deeper structural integration flaw.
The main reason for EU travails is a common currency area sped up for political reasons and composed by structurally weak economies not ready to join a powerful integration process led by one of the most efficient economies in the world, Germany.
The eurozone today is semi integration area where the common currency has no correspondent with a fiscal/political integration. In other words, the ECB is not the US FED guarantor of the banking system and lender of last resort to state governments caught up in a liquidity crisis.
Bottomline: Germans cannot undone the terrible mistake to launch the euro zone with less productive economies such as Greece, Portugal, Ireland, Spain and Italy. For the moment, the only solution is to kick the can down the road.
Not entirely correct from an economic-political standpoint. True, the eurozone is in trouble. The reason is not the lack of political leadership or the Greek. Portuguese, Spanish and Irish debt crisis. The debt crisis is just a symptom of a deeper structural integration flaw.
The main reason for EU travails is a common currency area sped up for political reasons and composed by structurally weak economies not ready to join a powerful integration process led by one of the most efficient economies in the world, Germany.
The eurozone today is semi integration area where the common currency has no correspondent with a fiscal/political integration. In other words, the ECB is not the US FED guarantor of the banking system and lender of last resort to state governments caught up in a liquidity crisis.
Bottomline: Germans cannot undone the terrible mistake to launch the euro zone with less productive economies such as Greece, Portugal, Ireland, Spain and Italy. For the moment, the only solution is to kick the can down the road.
12
The US does have a more integrated economy and fiscal policy for sure. But we manage to apply it across 50 states that also vary substantially in their relative productivity. And we don't spend nearly as much time as the Europeans arguing and criticizing each other about relative laziness.
1
The 15% drop of the Euro will have real impact on the ability of players in the EU to resell products & assemblies that include components fabricated in China to the rest of the world. If product prices remain constant in Euros, due to local competitive issues, US buyers stand to benefit to the same degree that EU manufacturers lose (because Chinese currency is closely tied to the US$).
2
May be weaker euro is better for Europe? When Swiss frank went through the roof it was cheaper to drive across the border (pick Germany, France, Italy. etc) to buy all goods. Swiss producers and retailers got really hurt. Also, what is the right exchange rate for euro?
3
Forgive me, but I feel like Paul Krugman has been saying this for about 2-3 years now.
27
I sense that the Times is struggling to make excuses for Europe, the land that Krugman and his ilk have held up as the region with the best politics, practices, and policies. Now that continent is imploding, exposing the bankruptcy of liberal and socialist politics and economics, and their fans can't seem to stomach or acknowledge it.
10
I believe that Prof. Krugman has been warning that this will/could happen to Europe for some time now. His and others warning were specifically that this might happen because Europe's "Fiscal Conservatives" were acting more like the American "Right" in their response to the crisis of 2008.
4
A test of wills will occur if Greece decides to leave the EU. Will Germany allow this to occur changing the dynamics of the Euro? I think not. It is decision time and in the interest of her own country Merkel just might back down. Time is running short and with the price of energy having decreased substantially, Germany should find that it is in its interest to reverse some of the policies that have held Europe back and loosen the purse strings.
At least we hope.
At least we hope.
3
It is not so much about Greece, as about after Greece. Who else would face the same problems? Italy for sure.
3
France is not far behind.
1
I recall the euro being at par with the US dollar for a long time at its inception and down as low as 0.85 US. It remained as high as $1.44 for a long time even as the EU economies faltered. I could never understand why and believed that the US favored a very weak dollar. I think that even $1.18 is high and hope it goes back to par and even lower as I travel in the EU often. Americans use to take pride in a strong US dollar back in the days before Globalization and the gutting of the middle class.
10
The decline in value of the euro against the U.S. dollar does not deserve the editorial headline, "The Stumbling, Tumbling Euro." In fact, the euro has provided stable money for the member countries, now numbering 19, since 1999.
What does deserve your criticism is the apparent willingness of the IMF, the Bank for International Settlements, and the U.S. and China to continue a chaotic international monetary system that is characterized by fluctuation rather than stability. International monetary leaders should be moving the world to a Single Global Currency, which will provide stable money and eliminate the current annual spending of about $300 billion for currency exchange trading costs. A Single Global Currency will eliminate the need for costly reserves which now total over $6 trillion. There will be no more currency crises with a Single Global Currency. Please contribute your voice to those of the people of the world who want stable money.
What does deserve your criticism is the apparent willingness of the IMF, the Bank for International Settlements, and the U.S. and China to continue a chaotic international monetary system that is characterized by fluctuation rather than stability. International monetary leaders should be moving the world to a Single Global Currency, which will provide stable money and eliminate the current annual spending of about $300 billion for currency exchange trading costs. A Single Global Currency will eliminate the need for costly reserves which now total over $6 trillion. There will be no more currency crises with a Single Global Currency. Please contribute your voice to those of the people of the world who want stable money.
2
Hopefully this European experiment will school America’s libertarians and conservatives as to what happens when a nation’s administration does not intervene to save its currency and economy.
Get out the popcorn, let’s watch.
Get out the popcorn, let’s watch.
7
A better lesson would be: "If you spend money like drunken sailors by letting entitlements get out of control, the austerity hangover is painful".
Hmmm. Much like the Bush years in reverse, when the dollar went from a strong 86 cents for a Euro in the year 2000, shortly after Clinton was President, and then the Bush administration policies drove it as low as $1.57 to the Euro. Weakening the dollar was one of the many Bush legacies.
Why not give the current President credit for strengthening the dollar, and gaining back so much of what the Republican administration lost?
Why not give the current President credit for strengthening the dollar, and gaining back so much of what the Republican administration lost?
16
Semi-nobel-laureate Paul Krugman (there isn't really a Nobel Prize in economics, warranted since economics isn't really a science) notwithstanding, it is far from clear that what governments do to "revive economies" is at all effective. They should at least save people from indigence but that is a wholly different matter from macroeconomic intervention, monetary policy of fical manipulation. None of the latter three is at all well understood in the real world outside of academic publications.
2
Get ready for the big global crash. Over half the wealth of the world is in the hands of the top 1% global financial elite and their insatiable greed will doom us all. They will not pay taxes to any country and now average Americans are back on the hook to bail them out again when they tank the economy. Problem is - we're broke. It's a black day in the world.
8
A tumbling euro? Yes, but how Germany is cheering! Now those Audis and BMWs are cheaper for buyers in America and Asia. If Germany had its own currency life would be much harder for them.
7
The champagne must be pouring in Berlin! A low euro will make the German economy even more competitive than it already is. A pretty clever strategy, if you ask me.
The major stumbling block in providing any stimulus is Germany. Germany is the major beneficiary of euro currency because its strong currency gets diluted due to weak other Euro partners' weak currency. This helps Germany exports more than any other Euro country. If any major stimulus is taken, Germany has to contribute more to that stimulus. And Germany does not want that. It wants to take more advantage from Euro zone than what it wants to give back. This is the quagmire for the last few years, and unless Germany decides to budge, nothing will change.
4
These truths are essential to understanding Germany's decisions. Well said.
However, that policy is not working for the rest of the EU, and not working to such an extreme that it can't be sustained. That is Germany's limit, and so its problem. The worst part is that Germany can't control a real cure, a real reform of those other economies, yet they do benefit from the connection for all the reasons in this comment. Germany is doing rather well just now, but ought to see a light coming from the other end of this tunnel.
However, that policy is not working for the rest of the EU, and not working to such an extreme that it can't be sustained. That is Germany's limit, and so its problem. The worst part is that Germany can't control a real cure, a real reform of those other economies, yet they do benefit from the connection for all the reasons in this comment. Germany is doing rather well just now, but ought to see a light coming from the other end of this tunnel.
1
Wrong. When the euro was $1.57, Germany was still exporting $1trillion of goods per year around the world. The euro has been overvalued for the past number of years due to dollar printing by the Fed. Yet exports have still grown. Could it be that the world simply demands quality German products?
3
The Germans have this crazy idea of living within their means, which is now enshrined into the German constitution. Not sure if we'll be able to educate them in the American ways of borrowing our way to prosperity! The tumultuous history of the reichsmark back in the 1920s doesn't help. They just won't forget the history, and are constantly reminded every time they visit an antique store and see grandpa's life savings, invested in beautifully engraved bonds, hanging there on the wall.
This neglects the effect on the market of the re-emergence on the periphery of the original problems, which were papered over at the expense of the least able to defend themselves, but not actually solved.
Now Greece teeters on the edge of political reconstruction, and rejection of all that has been done to ordinary Greeks. Italy and Spain are watching, and might well do the same, their politics showing the same turmoil. The EU talks not of fixing it, but of just letting Greece to now. It can't let the rest go, and survive.
The market sees all that too. Austerity failed, and the failure is coming home to roost now. All the damage it did on the periphery is only a foretaste of what seems to be coming.
To that, the EU is paralyzed with denial.
Now Greece teeters on the edge of political reconstruction, and rejection of all that has been done to ordinary Greeks. Italy and Spain are watching, and might well do the same, their politics showing the same turmoil. The EU talks not of fixing it, but of just letting Greece to now. It can't let the rest go, and survive.
The market sees all that too. Austerity failed, and the failure is coming home to roost now. All the damage it did on the periphery is only a foretaste of what seems to be coming.
To that, the EU is paralyzed with denial.
29
Of course the NYT Editorial Board wants more spending in a deficit manner. Of course they fail to see that the US recovery is not about a failed stimulus but rather cheap oil prices that the NYT opposes. If Europe had shale oil, the Euro would be fine. Bent way, the policies that the Editorial Board always recommends have been a huge failure in Japan.
12
Seems Europe should now follow the model used by Abe in Japan. Simply print more Free Money in order to simulate investment and then raise the Consumption tax on ordinary citizens in order to reduce the government deficit...Working REAL WELL in Japan!
This is nonsense. The weak, but perceptible and meaningful, recovery in the US started long before oil prices crashed. The Times board is spot on in its criticism of the manifest failure that is European monetary and economic policy. Without robust government spending in infrastructure, education, health care and social supports, there can be no long term growth anywhere -- in Europe, the US or Japan. The evidence is clear. When will right wingers wake up and see it?
2
The U.S. recovery is most definitely not about the drop in the price of crude. It is, however about the resurgence in American demand for goods and services. Regardless of what academics may tell you all depressions, recessions and panics are about emotions.
Our recovery started at about the same time as that in Northern Europe which is to say back in 2009 when oil was bouncing from $80 up to $100. And it started just as slowly. For the fear was still substantial. The recovery here was well under way in 2011 when the European Trinity decided to stomp theirs flat with more austerity. A move that assured a return to fear and loathing and a double dip recession.
Obama taking the otherwise bad deal with Boehner kept us from being hurt to the same degree. So we leveled off for a few months and then continued our recovery. Without fear to drive us into recession we were well on our way back by November 2012. Oil was still bouncing into the hundreds and would for another 20 months.
Fiscal conservatives in Germany and Britain are well meaning but wrong. They have the very same low oil prices as we. It didn't help because they never did anything to stop the fear.
Our recovery started at about the same time as that in Northern Europe which is to say back in 2009 when oil was bouncing from $80 up to $100. And it started just as slowly. For the fear was still substantial. The recovery here was well under way in 2011 when the European Trinity decided to stomp theirs flat with more austerity. A move that assured a return to fear and loathing and a double dip recession.
Obama taking the otherwise bad deal with Boehner kept us from being hurt to the same degree. So we leveled off for a few months and then continued our recovery. Without fear to drive us into recession we were well on our way back by November 2012. Oil was still bouncing into the hundreds and would for another 20 months.
Fiscal conservatives in Germany and Britain are well meaning but wrong. They have the very same low oil prices as we. It didn't help because they never did anything to stop the fear.
4
I guess what worked for Estonia is not working for the rest of Europe.
Is anyone surprised?
And now the US Congress is controlled by a party that wants to follow pretty much the same script as did Europe. What could go wrong, right?
Fasten your seat belts, it's likely to be a bumpy ride.
Is anyone surprised?
And now the US Congress is controlled by a party that wants to follow pretty much the same script as did Europe. What could go wrong, right?
Fasten your seat belts, it's likely to be a bumpy ride.
60
What "worked" in Estonia was awful for Estonia and everyone living there. Vast numbers left. The place was wrecked.
Yes, it was later slowly rebuilt. It took a decade to reach where it had been. Everybody lost, EXCEPT a wealthy elite that profited through the whole exercise.
If the EU did that to itself, it would be worldwide depression. Likely the EU itself would disappear, and would deserve to disappear.
Yes, it was later slowly rebuilt. It took a decade to reach where it had been. Everybody lost, EXCEPT a wealthy elite that profited through the whole exercise.
If the EU did that to itself, it would be worldwide depression. Likely the EU itself would disappear, and would deserve to disappear.
20
The falling euro is the result of policies that have failed, in the market's judgment, evidently. Does this verdict mean that govts. will change their policies? If it is correct that a devalued euro will lead to increased exports of EU goods to the rest of the world, whose economy benefits most among the euro countries? Germany's or Greece's? So, the Germans, the most vocal proponents of austerity, escaping its consequences for the most part, are poised to be the major beneficiaries of a devalued euro? Is this the economic equivalent of eating others' cake and having it too? It becomes increasingly difficult to understand why EU countries on the periphery continue to believe that it is to their advantage to belong to the euro system.
63
europe's welfare payments that turned unemployment into an desirable status, while stripping those affected of their dignity and sense of responsibility.
1
Yet another European battle. John Maynard Keynes, anyone? Open the spigots, Angela. Simple logic.
2
The value of the U.S. dollar has been down for years, in part because of QE. Why is it that the falling euro is because of failed policies, but the value of the dollar is not?
1
What is to happen is the emerge of the conviction that all economies are to be based upon their bioregional capabilities and start cooperating in ever widening circles. Out of this conviction global governance becomes possible.
One such global governance system is proposed to be based on this century’s major threat of a looming climate catastrophe. Its conceptual, institutional, ethical and strategic dimensions is presented in Verhagen 2012 “The Tierra Solution: Resolving the climate crisis through monetary transformation” and updated at www.timun.net. It could be a practical proposal to Naomi Klein’s 2014 “This Changes Everything. Capitalism vs the Climate.”