tag:blogger.com,1999:blog-2546602206734889307.post1058944201666576753..comments2024-03-28T04:29:22.717+00:00Comments on mainly macro: The ECB as a Lender of Last Resort to GovernmentsMainly Macrohttp://www.blogger.com/profile/09984575852247982901noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-2546602206734889307.post-78219220081520796242013-04-23T17:24:27.436+00:002013-04-23T17:24:27.436+00:00What europe needs is ability to spend what is need...What europe needs is ability to spend what is needed to restore full employment, while at the same time make sure individual european governments do not have free hands to spend howevermuch they want.<br /><br />Disciplining role should be taken away from the markets, period. How much to spend should be decided maybe in ECOFIN meetings or something similar, but after that decision is takes ECB could very well fund as much spending as is needed to carry out that objective.<br /><br />And if some people are scared that central bank financing of deficits would lead to hyperinflation because of 'money multiplier', would it not be much more sensible to set lending limits to the bank directly, trough regulation, that starve whole economic system because of this fear?<br /><br />So lets say to financial institutions: your assets (i.e. loans) next year can be 105% what they are this year, period. You can control bank lending by regulation if you want to.<br /><br />Does my proposal make too much common sense and is therefore not accepted? I have made it couple of other places without getting much acceptance. Feel free to copy/paste/distribute/repeat this idea if you want to.<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-79200239376101689182013-04-15T22:16:06.319+00:002013-04-15T22:16:06.319+00:00“Do you want to regain competitiveness via years o...“Do you want to regain competitiveness via years of austerity, or do you want to regain competitiveness overnight and with no more austerity than was attributable to the UK devaluation of Sterling in 2008?”<br /><br />Cutting wages - and profits, how, exactly? - is different to devaluation. Devaluation applies equally to all domestic wages and debts, but cutting wages alone leaves people with debts much worse off.jon liveseynoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-12098720693952012752013-04-15T22:13:11.436+00:002013-04-15T22:13:11.436+00:00One question came to me when reading this piece, w...One question came to me when reading this piece, which was when is the right time to impose conditionality? Take the example of Spain. Spain now has fiscal issues due to bailing out Banks. But the Banks need to be bailed out partly because of a high level of non-performing real estate loans. There is a high level of non-performing loans because cheap credit induced developers to build too many houses. It seems to me that unless conditionality is imposed pretty early in that train of events, it risks being imposed when the crisis is so far along that we just get what we've got: imposed austerity that benefits no-one.<br /><br />And you could ask a similar question for Greece, Ireland and Cyprus. Do you step in early and address bad fiscal reporting and/or excessively large finance sectors, or do you wait until the Governments themselves need to be bailed out?jon liveseynoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-10844038203664207102013-04-15T17:12:05.065+00:002013-04-15T17:12:05.065+00:00You people don't seem to understand where the ...You people don't seem to understand where the political problem lies :<br />political support for the whole european intergration has been falling since 1991, not 2008. The current crisis is only one more step by which the anachronic european project demise is happening. The whole thing doesn't make sense without the Cold War.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-70719289939148667092013-04-13T09:45:07.873+00:002013-04-13T09:45:07.873+00:00Maybe this is slightly less politically unrealisti...Maybe this is slightly less politically unrealistic than Prof. Simon’s idea.<br /><br />Impose a short sharp burst of central economic planning on uncompetitive periphery countries, and cut their wages and the profits by 20% or so. That comes to the same as devaluing their currency. In fact citizens of periphery countries could be given a choice in a referendum as follows: “Do you want to regain competitiveness via years of austerity, or do you want to regain competitiveness overnight and with no more austerity than was attributable to the UK devaluation of Sterling in 2008?”<br />Ralph Musgravehttps://www.blogger.com/profile/09443857766263185665noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-35251525912294859302013-04-13T07:59:14.698+00:002013-04-13T07:59:14.698+00:00You make your life much too easy. It is good to ke...You make your life much too easy. It is good to keep focussed mainly on your own expertise but moving so far from reality that solutions are basically not possible for other than Macro reasons is simply a waist of time.<br /> You should move closer to reality/the possible/the legal/etc. This is a bit like assuming gravity is not relevant, because it is convenient for your model. A fundamental weakness with the Macro bunch. They lose any political discussion against proper competition this way. Other side has to become better summarised (another issue)and move the discussion to politics or legal or whatever else. Strange battlefield and you guys always get your ass kicked or simply used for other purposes. <br />You are even worse than lawyers in that respect, they have a similar problem when things are moved to say economics. Both having a problem with the real world. Lawyers assume a fully legal world. And Macro well you know. However Macro-world is in general considerably further from reality than legal. And legal is a man-made construct while macro should be a representation of economic reality. Which would give me alot to think if it was my job. <br /><br />On fiscal Councils<br />Main problem being that the basic structures to work from are simply not in place. Quality is appalling in half the Zone. Independence is an issue as well. Basic material like stats are a mess in half the countries and the central agencies ECB and Eurostat come often up with completely different figures and estimates from each other.<br />I like the idea but to make it work probably a decade or 2 should be invested in getting the basic structures in place. Doubtful if there is that much time.<br />Credibility also up North is becoming a problem. Councils simply are often not able to deal with the new political situation (populist mainly). Often there is clearly a pro-Euro bias and they clearly donot take populists serious (which is imho a wise thing to do, but not as an independent agency to show, the latter is making yourself like part of the elite that is hated by half the population. And pop there goes your credibility. Should simply not make it considerably worse than it is). Neutral and technical and for the rest keep your mouth shut and your political alliances to yourself. Yes no sensibel person likes LePen, but keep it to yourself, you are supposed to be an impartial civil servant. Anyway a problem in the making. Riknoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-36386459841843152882013-04-12T20:09:06.933+00:002013-04-12T20:09:06.933+00:00You have to make a choice between how the EZ (incl...You have to make a choice between how the EZ (including the ECB)should look after this crisis OR how to solve the crisis.<br />What you do now is using the former as the solution for the latter problem.<br />What you suggest is politically and legally nearly impossible to do now for several reasons often already mentioned. The only thing when these discussions come up is that time is waisted (like we have seen with many French proposals before).Riknoreply@blogger.com