A British economist made the argument for temporary deficit spending as a fiscal policy tool to help stimulate an economy in recession 80 years ago,

Partially true – he would not have approved of the policies in the build up.

The austerity point in much better….jambas, it’s not living in your means, it’s a combination of reducing spending and/or increasing taxation – both of which are an withdrawal from the economy ie negative. JMK actually discussed how this would be avoided but Krugman and the neo- Keynesians forget a lot of what their so-called master actually said and taught.

Implementing austerity measures are part if the condition of Troika funding hence the incompatibility between Tsipras comments and actions. But nothing new in that. It is unfair to say that nothing on revenue, they have announced going after the Greek oligarchs as one of the first measures.

Let’s not get too selective or deliberately misquote Carney. His essential point (as he made to Alexis Salamondopoulous) is that Europe needs a coordinate fiscal policy including transfers from Germany to weaker states and contrasting the lack of proper policy options with the greater flexibility that we have in the UK.

But he realises that austerity alone will not sort out Greece’s mess. That is true.

Partially true – he would not have approved of the policies in the build up.

No it’s completely true, he argued for temporary deficit spending as a fiscal policy tool to help stimulate an economy in recession.

Did also of course argue in favour of surpluses and cuts in government expenditure during boom periods, so he clearly wouldn’t have approved of the policies in the build up. But that’s a different point and it does not make the first point “partially true”.

Just because policies at odds with Keynes were followed during the boom periods does not mean that he would have approved of his policies being ignored during periods of recession.

A funny read

http://www.zerohedge.com/news/2015-01-29/greece-should-ice-troika

Zero hedge loves crises!!!

Maybe what’s happened in Greece is the first solid reaction against the complacent, corrupt, self interested status quo.

Here’s hoping

You appear to be in agreement with a certain guardian journo

Monboit, wildly off the mark yet again. His comments on LatAm are hilarious – has he watched Dilmas policies in BZ?

Did he just have 1 min to write that claptrap

deliberately misquote Carney

No one is misquoting the Bank of England governor, if they are then he should sue them.

Here again is another source reporting the same point, this time the guardian :

Bank of England governor attacks eurozone austerity

And as for Carney arguing in favour of fiscal union then that’s another policy which I feel fairly certain that the Bank of England governor shares with Syriza.

Sorry Ernie you seem to be (very) selectively quoting both parties. I doubt carney would worry about being misquoted on a MTB forum though.

Here is the link to the speech – Carney Speech. Here is the conclusion:

Europe needs a comprehensive, coherent plan to anchor expectations, build confidence and escape its debt
trap.
That plan begins but does not end with the monetary policy boldness of the ECB.
That plan includes difficult structural reforms, but cannot be wholly reliant on them.
That plan requires greater private risk sharing via banking and capital markets unions.
But that plan also needs to recognise that private risk sharing will never fully replace public risk sharing so
that plan should include what every other successful currency union has at its heart: mechanisms to share
fiscal sovereignty.
As of this evening, progress on structural reforms in the euro area remains uneven. Cross border risk
sharing through the financial system has slid backwards. Europe’s leaders do not currently foresee fiscal
union as part of monetary union.

Such timidity has costs

So I think my analysis (and THM’s) are correct and the reporting (or subbing) draws an incorrect conclusion from a short quote.

EDIT: It would also be fair to conclude that such a transfer would allow Greece to slow down their austerity measures. But it isn’t a general call to arms for Europe to spend spend spend.

Did he just have 1 min to write that claptrap

At least 10 I reckon 🙂

Monbiot by his own admission is an idealistic dreamer. Hardly a surprise that he would grasp an opportunity to encourage people to be the same. His comments on the labour party are close to the mark though. They may not be finished electorally, but in all others, they are utterly pointless.

The guardian ends the quote at exactly the key point (wonder why).

Good job the whole speech is on the BOE website and the point clear. The fiscal policy point is all about channelling private sector surpluses.

Carney is a bit cheeky re comments on devaluation. Sorry QE is hidden what exactly ?

Sorry Ernie you seem to be (very) selectively quoting both parties.

I haven’t quoted anyone. I provided links to reports of Carney’s speech. All the quoting was made in those reports. As I said if they have misquoted him then I’m sure he will seek redress/legal advice.

I find this reaction to embarrassing headlines such as “Mark Carney slams Eurozone austerity days after Syriza win” with suggestions that I, personally, am misquoting the Bank of England governor quite frankly ridiculous.

You really are clutching at straws if you want to blame me for embarrassing headlines.

Not blaming you. You are perfectly free to read what the governor actually said. Front oage of BOE website. Once you have done that, you will see the error.

It’s clear that carney is talking about fiscal transfers – recycling private sector surpluses – it’s nothing to do with austerity in isolation. So like JMK, taking little bits and missing the whole point is as you say, “ridiculous”

ernie_lynch – Member 
You need to re-read the article mefty

Much better the read Carney’s actual speech, then the mistakes of interpretation can be avoided 😉

….it’s nothing to do with austerity in isolation

Now you are making stuff up. Who’s talking about “austerity in isolation”?

The only bit I have copied and pasted from the reports of his speech I have linked is this :

“It is difficult to avoid the conclusion that if the eurozone were a country, fiscal policy would be substantially more supportive,” he said.

No mention of austerity at all in the one and only bit that I have copied and pasted.

I have not taken “austerity in isolation” as you claim.

He did however talk about austerity, according to the reports. Even the Tory supporting Daily Telegraph agrees that he attacked the Eurozone austerity measures. From the Daily Telegraph :

It’s Germany’s worst nightmare. Increasingly isolated, ganged up on, and even hated by much of southern Europe, it is fast losing the argument over the future of the euro.

Even the Governor of the Bank of England, Mark Carney, has been at it. This week he joined in the German bashing with a full-frontal attack on Berlin’s austerity agenda.

http://www.telegraph.co.uk/news/worldnews/europe/germany/11377010/Germanys-worst-nightmare-has-come-true.html

Stop trying to blame me for what the press is reporting of Mark Carney’s speech.

I am not, I am inviting you to read what he actually said not the misleading paper articles. It will save further misunderstanding/embarrassment. Your choice….

Mefty and I made the correct one already.

If you ?ant to read the Torygraph , alistair heaths article is a much better read. Greece has only one real option now.

And the same paper has an interesting article on why the Danes have had to cut rates for the third time in ten days. After the Swissie, next the krone. Mess with currencies at your peril central bankers!!!

It will save further misunderstanding/embarrassment. Your choice….

So now true to form you are reverting to “patronizing mode”.

I fully understand what the Daily Telegraph was saying when it referred to Mark Carney’s “full-frontal attack on Berlin’s austerity agenda”.

I also fully understand that when jambalaya claims that austerity is merely “commonsense” that it’s a sentiment the Governor of the Bank of England doesn’t necessarily agree with. Which was my original point.

Of course it could be that the Governor of the Bank of England simply lacks “commonsense” ?

I agree with your critique of Jambas definition of austerity FWIW but invite you again to read what Carney actually said. You will change your view on the Torygraph headline then.

Newspapers headlines are always bad indicators of the text and the subject. Another case in point.

Enjoy (QE aside, it’s not a bad speech) and good night.

Even I agree its worth reading the whole speech

Welcome back ernie your extended holidays are our loss

Thanks JY. Although I’m not sure that I’m “back”. I decided to pay a visit on this thread when I saw the suggestion that Greece was in a dire economic crises because the Greeks are apparently lazy. I didn’t originally intend more than one post.

And I haven’t received a recent ban btw, in case of “extended holiday” being a euphemism for that 🙂

Ah it can be read that way but it eas not meant that way. I assume you just tire/bore of this place and leave of your own accord.

I like this guy, I think he really can deliver for the Greeks, a masterstroke cosying up to Putin, who also has his back against the wall having upset Corporate Capitalism taking those war ships down to the G2019.

The whole currency war has engaged another level.

Who was it said Germany are shitting themselves? Don’t think we shouldn’t worry either, this is going to get very messy.

Another amusing/interesting read

http://www.zerohedge.com/news/2015-01-29/alexis-tsipras-open-letter-germany-what-you-were-never-told-about-greece

Currency wars on-going elsewhere……!!!! Tut, tut, Mr Carney. Straight bat please.

Germaine Greer’s explanation of QE was entertaining on an otherwise dull QT last night.

teamhurtmore – Member

Germaine Greer’s explanation of QE was entertaining on an otherwise dull QT last night.

+1 As was her admission to being a bed blocker!

What did she say then? The mad old bat!

I’ve given up on QT of late. I thought it was only a matter of time before Katie Price was on the panel

I confess I am bit surprised about the discussion here on our various definitions of austerity. Mine is simply that its about financial responsibility and reducing spending to a sustainable level, for countries that can no longer borrow that means bigger cuts. There is no need for Greece to cut government spending to zero, its about reducing it to a sustainable level based upon your tax receipts. Countries, like individuals, have spent too much and lived beyond their means. What we are seeing is a necessary correction.

Germany and the eurozone countries have already given Greece a huge amount of assistance. Enough is enough. I also doubt Germany is feeling under pressure, its in a very strong position relative to most other EU countries.

I think any cosying up by Greece to Russia is very foolish and will just isolate them further. Cosying up to a country which invaded Crimea and shot down an airliner is not smart. Interesting fact pointed out to me yesterday is that the Russian economy is now half the size of the UK’s, such is the impact of the currency devaluation. Hardly a superpower.

Pretty much pointed out the hole in the current system of perceptual money. Comparing printing money for the Banks and now Europe, I was dozing off at the time, it was a pretty lame QT no real characters.

jambalaya – Member

I think any cosying up by Greece to Russia is very foolish and will just isolate them further. Cosying up to a country which invaded Crimea and shot down an airliner is not smart. Interesting fact pointed out to me yesterday is that the Russian economy is now half the size of the UK’s, such is the impact of the currency devaluation. Hardly a superpower.

As against cosying up to a Corporate Alliance that invaded and destabilised an entire region in their quest for energy security killing hundreds of thousands?

I can’t see the difference, well I can Russia hasn’t killed quite as many just yet.

Germany is only assisting, to secure a larger market for their manufacturing base without the need to devalue their currency like the rest of us, it’s over, everything is going to have to change. Including the petrodollar like as not, if China also lines up with Russia.

Countries, like individuals, have spent too much and lived beyond their means.

Here we go with the national credit card rubbish again. Will you stop comparing national and international finances to that of a spendthrift consumer who needs the latest pair of shoes.

Germany and the eurozone countries have already given Greece a huge amount of assistance.

If you say it often enough it might become true. How difficult is it to understand that austerity in the form of what is now happening in Greece is a counter-productive strategy for all concerned. Even leaving aside the humanitarian and moral aspects of grinding and entire population into poverty and servitude as punishment for something they had no control over, it doesn’t help Germany and the other creditors as the very medicine they’re administering is making the patient more ill. Can’t you understand that?

If there is one thing in life to remember ‘don’t trust Russia’. Be very, very wary when they are your only friend.

Also it seems China ain’t happy with the Greeks after the new government stopped the sale of the port of Piraeus to them.

A spendthrift consumer is exactly how Greece has behaved. Living on the never never with an ever expanding debt which they could never hope to pay back. That’s why without the help of the billions from Germany and the rest of the EU they would have gone bust in 2009.

Of course Greece is suffering pain, as it was the most irresponsible country it is suffering the most pain. Austerity and financial responsibility is working elsewhere. It’s worked in the UK. Whatever pain Greece is suffering its far less than if they had defaulted in 2009, or they would suffer if they default now. TMH is right in that the only real solution for Greece is to default but the EU are doing Greece a huge favour in allowing them to continue in the euro propping them up with loan which no market participant would grant them. The did this in 2009 as they where afraid a Greek default would force big core countries like Spain and Italy close to the edge. Due to the success of austerity in those countries that’s no longer the case, so the eurozone now has the option to let Greece default without that risk of contagion. Greece suffering economically isn’t counter-productive for the EU particularly as the alternative as proposed by Syriza is gifting them euro 120 billion and then facing a queue of other nations asking for the same treatment.

Greece have had their election, perhaps Germans, Italians, Spaniards etc should be given a referendum on whether Greece should be allowed a debt write-off at their expense.

I hear the Greek finance minister will be in London over the weekend so perhaps we’ll get to hear from him directly and I assume Osbourne will make a comment after their meeting.

@derek, we’ll have to disagree on the role of NATO. Russia has been Assad’s major supporter and indeed blocked action which could have prevented the growth of IS. The Litvinyenko inquiry has alleged a direct link between Putin and funding Al-Q. We shouldn’t get too distracted with this or the thread will go off track.

A spendthrift consumer is exactly how Greece has behaved.

Once again you’re equating the Greek state and the people who misappropriated it to get rich, with the Greek people who are now having to suffer the consequences of these corrupt and fraudulent actions. Can you not understand and acknowledge this distinction? No one is denying that the Greek state spent and borrowed beyond it’s means, that much is evident. The issue now is (or should be) who should take responsibility, and how the situation can be rectified in a way where those who were not responsible don’t have to suffer for actions they had no part in or control over.

[video]https://www.youtube.com/watch?v=KSk-VKOTgQY[/video]

@daz you and I are certainly going round in circles. The Greek people where the primary beneficiaries and not a few (many) corrupt individuals be they politicians or not, that’s my view. I also think the losses suffered by international investors and the cost to the EU of supporting Greece has far exceeded any benefits they got from the relationship. The average person in Greece can see first hand how their economy works with it’s huge black market and anyone who care to look would see that the salaries, benefits and pensions they received where overly generous versus their European neighbours. What the successive governments where doing in running up huge deficits was plain for all to see. Greeks voted for even bigger handouts. TBH they’ve done the same again so at least they are consistent.

I hate quoting wiki but this is pretty balanced Greek Debt Crises

Yes we are going round in circles, but as long you keep repeating these fallacies about the Greek people I feel duty-bound to repeat the counter argument. I guess I just struggle to understand a viewpoint that has not an ounce of sympathy or compassion in it for the poor buggers who now find themselves impoverished through no fault of their own. Do you at the very least not admit that the vast majority of people now suffering had no control over what happened?

What the successive governments where doing in running up huge deficits was plain for all to see

Governments were not reporting the figures properly so deficits were consistently understated – to expect the average citizen to understand this is a bit of a stretch.

And if the EU didn’t know how did the Greek citizens FFS

TBH they’ve done the same again so at least they are consistent.

Once again you look at it through the prism of ‘greedy greeks’ wanting something for nothing. Has it occurred to you that they voted for Syriza as they were the only party who expressed even a passing interest in the suffering of the people, and because they were the only party untainted by association with the crisis and the corruption, greed and criminal acts which accompanied it?

Do you think they might do a UK version?

Plus don’t forget that politicians generally react to rather than lead events.

Look what us happening in the real world. €20bn withdrawn from banks this month versus €3bn in Decemeber, Greek banks now becoming increasingly reliant on Emergency lending Assistance (ELA) which comes each month from the ECB and is released on condition of adherence to the agreed adjustment.

So the ECB turns off the taps, Greek banks have a liquidity squeeze and Bobolopolous is your uncle…..

Real events could soon overwhelm Tsipras.

TBH they’ve done the same again so at least they are consistent.

You couldn’t be further from the truth. What the Greeks have clearly done is to vote for a change with the past and to break with the old 2-party game. “Austerity” was evidently not working – it was resulting in a mountain of debt that could never be repaid and the increasing destitution of a European country. They have voted for another approach,