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Eric Janszen Interviews Alex Jurshevski – Part I: Crisis of consensus

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  • rchdenton
    replied
    Re: Eric Janszen Interviews Alex Jurshevski – Part I: Crisis of consensus

    Don't know the details but I think NZ hit a wall. Interestingly I do think Canadians and New Zealanders have a much lower talk to action ratio than the US.

    It helps not believing you are the bee's knees. One of Britain's problems after WW2 was everyone expected things to get better faster than was in fact possible and so managed to stuff up its industry big time. Lots of expectations of entitlement amongst the workers. Lots of unfulfilled promises by government.

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  • rchdenton
    replied
    Re: Eric Janszen Interviews Alex Jurshevski – Part I: Crisis of consensus

    Way to go. I've said before (can't get the search engine to find it) that the US is where NZ was 20 - 30 years ago and NZ was worth studying. We are exposed to the world in a way that others are not, we are a small economy and so affected more rapidly by whatever winds may blow.

    The article has one massive, whopping, mind boggling oversight though. Your graph shows NZ govt and corporate debt BUT NOT PRIVATE DEBT (apologies for shouting), You guys are just so much more knowledgeable about this stuff than me - how can you possibly consider a countries debt without looking at all of it?

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  • ViC78
    replied
    Re: Eric Janszen Interviews Alex Jurshevski – Part I: Crisis of consensus

    Does Fiscal Austerity Reassure Markets?


    Consider, if you will, the comparative cases of Ireland and Spain. Both countries appeared, on the surface, to be fiscally responsible until the crisis hit, with balanced budgets and relatively low debt. Both discovered that this was an illusion: revenues were buoyed by immense real estate bubbles, and when the bubbles burst they plunged into deficit — and found themselves potentially on the hook for large bank losses.
    The countries responded differently, however. Ireland quickly embraced harsh austerity; Spain has had to be dragged into austerity, and still faces major political unrest.
    So, how’s it going? This article is typical of what you read: it describes the Irish as doing what has to be done, while the Spaniards dither. And it has good things to say about how the Irish response is working:
    Much bitterness but also stoicism; markets impressed by Irish resolve to bite the austerity bullet.
    Well, I guess that’s right — if by “markets impressed” you mean a CDS spread of 226 basis points, compared with 206 points for Spain; not to mention a 10-year bond rate of 5.11 percent, compared with 4.46 percent for Spain.


    http://krugman.blogs.nytimes.com/201...ssure-markets/

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  • oddlots
    replied
    Re: Eric Janszen Interviews Alex Jurshevski – Part I: Crisis of consensus

    I'd really love to know what Jurshevski thinks of the argument Rob Parenteau has been making. Parenteau's point is that everyone (i.e., different sectors) can't de-lever at the same time without causing complete collapse. In this regard, the reference to diminishing returns on "stimulus" is true but beside the point: the objective is to keep the patient alive not catapult him into the land of milk and honey. Any pulse will do.

    The point of Parenteau's argument in our current circumstance is this: you cannot turn Austrian overnight. The insanity of the boom is mirrored by the insanity of the remediation efforts afterwards. It doesn't take much time to get the boat rocking hard (a moment, in historic time) but it sure takes a long time for it to stop.

    I appreciate the point of view of someone in the trenches doing the workouts so that, as the nursery ryhme would have it "we can get home tonight", but I'd really also like to know how he thinks we're going to square a circle: too many people want suddenly to save when no-one wants to spend. How's that going to work in the trenches or anywhere else?

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  • oddlots
    replied
    Re: Eric Janszen Interviews Alex Jurshevski – Part I: Crisis of consensus

    Originally posted by jk View Post
    Canada and new zealand consolidated their finances within the context of a relatively benign global economy, thus allowing these countries to achieve simultaneously austerity and growth. That context doesn’t exist today. Even if there were a political consensus in e.g. greece, global austerity [which appears to be in the cards for the immediate future] will negate any progress that might be accomplished by local austerity, because global austerity will preclude the possibility of significant growth. The global economic community resembles more and more a circular firing squad.

    The consensus required for effective policies is not only national, within each nation state, but global. Good luck to us.
    Devil meet details. Nicely said.

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  • marvenger
    replied
    Re: Eric Janszen Interviews Alex Jurshevski – Part I: Crisis of consensus

    It is a neat trick!

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  • cjppjc
    replied
    Re: Eric Janszen Interviews Alex Jurshevski – Part I: Crisis of consensus

    Originally posted by marvenger View Post
    Hopefully we all get sick of arguing and just live on a smaller scale! .
    The trick is in what one emphasizes. We either make ourselves miserable, or we make ourselves happy. The amount of work is the same.
    C. Castaneda

    Leave a comment:


  • marvenger
    replied
    Re: Eric Janszen Interviews Alex Jurshevski – Part I: Crisis of consensus

    Originally posted by cjppjc View Post
    We are all slaves to our ideology. Maybe even you.


    Originally posted by cjppjc View Post
    EJ mostly does what he does best. So does Bart. So does Metalman. Expecting more from someone is the easiest way to be disappointed. The times on here when the subject of what constitutes a better way for humanity to live, always leaves out the possibility that man is behaving in the only way possible for himself.
    Maybe i should talk in terms of pure concepts then rather than attach them to specific people. Its just that this feels like it abtracts from the real world too much, in the real world to change things you have to deal with personalities.

    I like the idea of a scaled down world where the consequences of ones actions on the small world of one's influence is better understood. Unfortunately we do not live in this world, we live in a globalised world where a few people's decisions have effects on us all - with associated hugely larger unintended consequences aplenty - and if we choose to live small scale we run the risk of being bulldozed by those who live on a grander scale - just ask the world's indigenous people. Therefore I think individuals are completely justified in calling out where they think an ideology is having, on the whole, a less optimal outcome even if someone is doing the best they can. I am definitely not trying to say I am without ideology, any government institution is arbitrary too, its just there to try and balance forces, forces that are always changing, so any government institution is never going to be close to perfect - and each persons view will be different. Hopefully we all get sick of arguing and just live on a smaller scale! .

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  • cjppjc
    replied
    Re: Eric Janszen Interviews Alex Jurshevski – Part I: Crisis of consensus

    Originally posted by marvenger View Post
    I think EJ helps avoid tackling a core issue of too much arbitrary power in the hands of capitalists because of his ideology
    We are all slaves to our ideology. Maybe even you.

    EJ mostly does what he does best. So does Bart. So does Metalman. Expecting more from someone is the easiest way to be disappointed. The times on here when the subject of what constitutes a better way for humanity to live, always leaves out the possibility that man is behaving in the only way possible for himself.

    Leave a comment:


  • c1ue
    replied
    Re: Eric Janszen Interviews Alex Jurshevski – Part I: Crisis of consensus

    Originally posted by vinoveri
    fair enough ... I should have written "in an ideal capitalist system" ... and I'll even clarify that to "in my ideal capitalist system"
    I understand where you are coming from. I merely point out that in an ideal capitalist system - there is a fundamental aggregation effect such that capital tends to get concentrated.

    The only historically proven way to prevent this is government regulation - which in turn negates 'ideal capitalism'.

    Thus 'ideal capitalism' is more of a figurative construct than a real one - much like 'honest politician'.

    My own view is more systemic: capitalism is the economic embodiment of the selfish urge; government regulation is the embodiment of the selfless urge. All economics is thus the yin-yang interplay between the selfish and the selfless - too much either way is bad.

    Originally posted by vinoveri
    What specific bad governance in your view?
    Bad governance in the respect that each and every politician is elected for the purposes of serving his/her constituency. It is quite clear that neither Congress nor the series of past Presidents have in any way attempted to serve their constituency; rather the delegated power has been used for gain both financial and otherwise.

    More specifically the present circumstances are directly attributable to a handful of actions:

    1) Repeal of Glass-Steagall
    2) Deficit spending as a permanent economic platform after Reagan
    3) Neo-liberal economics dominating economic discourse

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  • jg1
    replied
    Re: Eric Janszen Interviews Alex Jurshevski – Part I: Crisis of consensus

    Good job on this column: short, meaty, credible, useful, and follows quickly on the heels of a column just two days ago or so.

    I like this new approach!

    Leave a comment:


  • Anon21456
    replied
    Re: Eric Janszen Interviews Alex Jurshevski – Part I: Crisis of consensus

    Originally posted by metalman
    4 gov't bailouts make gov't insolvent (fiscal deficits pile more debt onto existing gov't debt)

    we are at step 4... now 14 coountries are in the 'red zone' of insovency... gov't debt = 54% of global gdp. here ej interviews an expert who helps gov't with the problem & gets his opinion. how is that ideological?
    What happens after that ? Is there an answer on this forum ?

    Leave a comment:


  • vinoveri
    replied
    Re: Eric Janszen Interviews Alex Jurshevski – Part I: Crisis of consensus

    Originally posted by c1ue View Post
    This is not a correct statement. Many people believe this, but it is purely ideology.
    fair enough ... I should have written "in an ideal capitalist system" ... and I'll even clarify that to "in my ideal capitalist system"


    Originally posted by c1ue View Post
    In any historical 'true' capitalist system, capital becomes more and more concentrated. Because as we all have experienced or seen, once you have capital it is progressively easier to grow it - whether via acquisition of technology, politicians, monopoly/oligopoly, etc etc.

    In that era, monopoly was achieved through the relative scarcity of capital - think Monopoly as in the board game.

    Today, it is a function of (bad) governance.
    What specific bad governence in your view?




    [/QUOTE]

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  • doharra
    replied
    Re: Eric Janszen Interviews Alex Jurshevski – Part I: Crisis of consensus

    Given everything our government has done in the last few years, I found the following one of the most chilling bits I've ever read. A "red pill" sort of point....

    EJ: Given that you’ve been at this since the early 1980s, that’s saying something. If reflate-and-wait isn’t going to fly, let’s talk about scenarios. The theory behind reflate-and-wait is that once a reflated economy becomes self-sustaining it grows itself out of debt. But public debt levels, at least in places like the UK and the US, were so high before the GFC and unemployment was so high after the crisis that the amount of stimulus required to get the economy moving again left these countries hopelessly indebted relative to income that can be generated to grow tax revenues enough to cover the debt. They are likely to find themselves needing to do a second round of stimulus but won’t have the credit to do it.

    AJ: Well, exactly. Going back to first principles, there really is no evidence of a “Keynesian Multiplier.” I mean this idea that if the government steps in and fills an output gap it’s going to lead to additional activity down the road. There is absolutely no evidence of that historically to ever have worked so what you end up with is the government applying a short-term patch. In previous cycles there was enough underlying momentum in the economy to propel the economy forward to make it “look” like the government stimulus was actually having an effect, but in fact, if you filter out all of the extraneous influences, you typically find that government spending produces slightly less output proportionate to spending, or a lot less. In other words, there is a cost to the activity of reflation and the cost gets passed on to future generations.

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  • c1ue
    replied
    Re: Eric Janszen Interviews Alex Jurshevski – Part I: Crisis of consensus

    Originally posted by vinoveri
    In a real capitalist system, capital becomes increasingly widely available to more and more, but for the purposes of investment and growth in wealth, not concentrated into the hands of a few Capitalists.
    This is not a correct statement. Many people believe this, but it is purely ideology.

    In any historical 'true' capitalist system, capital becomes more and more concentrated. Because as we all have experienced or seen, once you have capital it is progressively easier to grow it - whether via acquisition of technology, politicians, monopoly/oligopoly, etc etc.

    And for those who say that it is government which is responsible - today's environment differs from the say, the 1920's considerably in the form of the size of the federal government vs. the rest of the economy.

    In that era, monopoly was achieved through the relative scarcity of capital - think Monopoly as in the board game.

    Today, it is a function of (bad) governance.

    Originally posted by jk
    Canada and new zealand consolidated their finances within the context of a relatively benign global economy, thus allowing these countries to achieve simultaneously austerity and growth. That context doesn’t exist today. Even if there were a political consensus in e.g. greece, global austerity [which appears to be in the cards for the immediate future] will negate any progress that might be accomplished by local austerity, because global austerity will preclude the possibility of significant growth. The global economic community resembles more and more a circular firing squad.

    The consensus required for effective policies is not only national, within each nation state, but global. Good luck to us.
    Circling back to 'beggar thy neighbor'...how do the present circumstances not resemble this construct?

    Leave a comment:

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