Bloggingheads Community

Bloggingheads Community (http://bloggingheads.tv/forum/index.php)
-   Diavlog comments (http://bloggingheads.tv/forum/forumdisplay.php?f=9)
-   -   Worldwise: Live From Athens (Yanis Varoufakis & Henry Farrell) (http://bloggingheads.tv/forum/showthread.php?t=7187)

Bloggingheads 11-22-2011 05:56 PM

Worldwise: Live From Athens (Yanis Varoufakis & Henry Farrell)
 

ledocs 11-22-2011 06:20 PM

Re: Worldwise: Live From Athens (Yanis Varoufakis & Henry Farrell)
 
So we move one step closer to the promised appearance of Doug Henwood:

http://bloggingheads.tv/forum/showpo...76&postcount=8

ledocs 11-22-2011 07:40 PM

Re: Worldwise: Live From Athens (Yanis Varoufakis & Henry Farrell)
 
Very nice to see YV, rather than just to hear him. I thought he was about 60, but perhaps I just don't hear people speaking English with a Greek accent often enough.

Too bad that one of the best dv's in months had to be about such a depressing subject. Kudos to Farrell for pushing back on YV's ECB bond proposal. The thing is, people, "sophisticated investors," clearly buy what amounts to highly risky garbage every day, so how high would the hurdle really be for these hypothetical eurobonds? I'm not too sure about what the enforcement mechanism would be for ensuring that these ECB bonds issued to the various countries would be the senior debt instruments, though. The ECB doesn't have an army. Nevertheless, I do get the feeling that either something pretty dramatic such as YV's proposal gets implemented, or the euro disappears in its current form, perhaps splitting into tiers, perhaps shedding countries.

Ocean 11-22-2011 08:33 PM

Re: Worldwise: Live From Athens (Yanis Varoufakis & Henry Farrell)
 
Excellent discussion. But, man, this was depressing. I don't think I had ever seen Henry looking and sounding so depressed. I felt like sending him a card.

Cheer up, Henry!!!

http://smileys.smileycentral.com/cat/8/8_5_16.gif

rfrobison 11-22-2011 08:52 PM

Re: Worldwise: Live From Athens (Yanis Varoufakis & Henry Farrell)
 
Professor Farrell complains about the Germans setting economic policy in Ireland (and presumably the other troubled EU countries). OK, but this is the price of the union, after all. The Greeks and the Irish certainly weren't complaining when they rode low "Germanic" interest rates to a decade or more of growth fueled by easy money.

Personally I think the Germans are going to have to swallow the idea of a European Central Bank that can and will print money to buy the bonds of these countries. Letting them default would be to see the entire European economic edifice crumble.

At the same time, unless the heavily indebted countries are able to get spending under control and introduce deep structural reforms to their labor markets, product markets and pension systems, they will never see the economic growth that can lift them out of the hole they're in.

German taxpayers have every right to be angry. The Greeks, Italians, et al. had a party and they're getting stuck with the bill.

Don Zeko 11-22-2011 09:33 PM

Re: Worldwise: Live From Athens (Yanis Varoufakis & Henry Farrell)
 
Seeing as we're all doomed, here's some appropriate background music (explanation).

rfrobison 11-22-2011 09:59 PM

Re: Worldwise: Live From Athens (Yanis Varoufakis & Henry Farrell)
 
Professor Varoufakis' proposals sound very reasonable, but there are at least one or two problems I can point to that Professor Farrell did not: The proposal that the European Financial Stability Facility be converted into some sort of supranational banking regulator is unworkable.

The basic problem with the EU is that some aspects of its financial and economic governance--mostly in the areas of trade and banking--are thoroughly internationalized, while regulatory oversight is left in the hands of 27 member states, each with its own legal traditions and varying degrees of competence.

A Europe-wide financial regulator makes sense, but national governments are unlikely to surrender the sovereignty needed to give the regulator teeth, particularly in a political environment in which national leaders use Brussels as a foil for explaining away their problems.

The same is true for the idea of giving the European Investment Bank total control over how money is spent for infrastructure projects or whatever. If ever there were ever a recipe for giving the "neofascists" a platform to run on (i.e., faceless Brussels bureaucrats telling us what to do), these proposals would seem to be it.

Parallax 11-23-2011 07:59 AM

Re: Worldwise: Live From Athens (Yanis Varoufakis & Henry Farrell)
 
I learned quite a bit from this diavlog. However I still have some questions:

1. Unless I am mistaken the second point of the modest proposal basically turns ECB into EU treasury. Why is this more feasible politically than issuing Euro-bonds?

2. At the beginning the two heads were upset about EU governments losing their power to unelected technocrats. I may have misunderstood but the modest proposal sounds exactly like that but on a continent wide scale! If implemented the technocrats of ECB and EIB will have enormous power to shape Europe and they won't be accountable to anyone.

3. How exactly can one change EIB's investment regulations? This route of action seems the most promising to me since in the absence of any sensible monetary policy an appropriate fiscal policy is the next best thing. Moreover EIB does not have the same amount of political pressure on it as other European institutions do. So if the change is easy enough I think Europhiles should concentrate their effort on getting it through as quickly as bureaucratically possible.

4. Can't EIB buy sovereign European debt itself?

Parallax 11-23-2011 08:14 AM

Germany can do a China!
 
At some point Yanis said he doubts a new Bundesbank would be able to hold the value of Mark down. But why not? Beside Switzerland that was mentioned China does the same. In fact any central bank can keep the value of their currency down simply by printing and buying foreign currency. Whether this would be a good idea for Germany or the world is of course a matter of debate but doable? Certainly.

bkjazfan 11-23-2011 08:46 AM

Re: Worldwise: Live From Athens (Yanis Varoufakis & Henry Farrell)
 
Jim Reid of Deutsch Bank: "If you don't think Merkel's tone will change then our advestment advice is to dig a hole in the ground and hide."

Jim Rogers: "In 2002 it was bad, in 2008 it was worse, in 2012 or 2013 it is going to be worse still - be careful."

rfrobison 11-23-2011 10:59 AM

Re: Worldwise: Live From Athens (Yanis Varoufakis & Henry Farrell)
 
Quote:

Originally Posted by Parallax (Post 232537)
I learned quite a bit from this diavlog. However I still have some questions:

1. Unless I am mistaken the second point of the modest proposal basically turns ECB into EU treasury. Why is this more feasible politically than issuing Euro-bonds?

If I may be so bold as to try to answer on behalf of the discussants, I think Prof. Varoufakis does, in fact, call for the ECB to issue Eurobonds. The difference is a subtle one, but he is saying the ECB should issue the bonds on behalf of the entire euro zone, and that any country borrowing money from the bank would have a debit account with it, which they would be obligated to repay over the term of the bonds.

What the Germans are objecting to at the moment, if I understand it correctly, is the idea of Eurobonds issued by individual countries at their own discretion, which would, in effect, leave Germans (and other creditor-country taxpayers) on the hook. Whether this difference is a subtlety to far for the Germans to accept is another matter.

Quote:

2. At the beginning the two heads were upset about EU governments losing their power to unelected technocrats. I may have misunderstood but the modest proposal sounds exactly like that but on a continent wide scale! If implemented the technocrats of ECB and EIB will have enormous power to shape Europe and they won't be accountable to anyone.
Not sure about this one, but it seemed like they were objecting to technocrats serving as prime ministers in troubled countries like Greece and Italy. Of course, central bankers will always be technocrats to one degree or another. It's the difference between setting and implementing policy, I would guess.

Quote:

3. How exactly can one change EIB's investment regulations? This route of action seems the most promising to me since in the absence of any sensible monetary policy an appropriate fiscal policy is the next best thing. Moreover EIB does not have the same amount of political pressure on it as other European institutions do. So if the change is easy enough I think Europhiles should concentrate their effort on getting it through as quickly as bureaucratically possible.
Not sure about how this works in practice, but I'm skeptical about this proposal, as it seems to hand a lot of discretionary power to an unelected bureaucracy. Moreover, I doubt the ECB has the competence to implement the large-scale macroeconomic stimulus that Varoufakis seems to be advocating here.

Quote:

4. Can't EIB buy sovereign European debt itself?
Again, I know nothing about the details of this institution, but I would guess the answer is "no." The EIB may be called a "bank" but it is not a central bank. Its purpose is to raise funds for and implement projects aimed at fostering economic development in European countries. In that respect, it is like the World Bank, Inter-American Development Bank, Asian Development Bank, and African Development Bank. They are not really financial institutions as the term is commonly understood.

aajax 11-23-2011 12:55 PM

Re: Worldwise: Live From Athens (Yanis Varoufakis & Henry Farrell)
 
YV described it all as self funding, so that the only dictate coming from faceless bureaucrats in Brussels is "Pay the debts you legitimately owe, at the low interest rates we have provided you by servicing your debt. How you do it is your business." The fascists couldn't complain about that arrangement.

Baz 11-23-2011 02:12 PM

Germany can do a China!
 
Quote:

Originally Posted by Parallax (Post 232540)
At some point Yanis said he doubts a new Bundesbank would be able to hold the value of Mark down. But why not? Beside Switzerland that was mentioned China does the same. In fact any central bank can keep the value of their currency down simply by printing and buying foreign currency. Whether this would be a good idea for Germany or the world is of course a matter of debate but doable? Certainly.

China, as far as I know, still have strict capital controls etc. where as Germany has free flow of capital. Plus the Germans would have to deal with a bigger inflow of capital than the Swiss.

Rathertired 11-23-2011 03:19 PM

What "A modest proposal" is
 
Jonathan Swift's "A Modest Proposal" suggested eating babies as an answer to the Irish famine.

http://art-bin.com/art/omodest.html

That's where the term "a modest proposal" arises. It's the most famous (or, okay, infamous for the squeamish) example of political satire in European history. Most likely world history.

Since then the phrase "a modest proposal" has signified heavy-handed, dark satire. When you hear "a modest proposal" you're thus being told that some very potent Swiftian irony is coming. Nihilistic sarcasm to make a point. A nightmare black comedy scenario.

Henry Farrell knows this. Even if he wasn't Irish, he'd know this.

The dialogue is cut off prematurely, but I'm not certain Varoufalkis grasps the meaning of the phrase he's using (and uses in his link and in the title of his proposal). Farrell even mentions Swift.

I really don't mean to be a snide. Varoufalkis speaks excellent English and it's an easy mistake to make, but if he doesn't intend to evoke the dark nature of "a modest proposal" - obscene for rhetorical sake - he almost certainly wants to lose the phrase. (A "modest proposal" as the term has been used for the past three centuries would be, you know, that, say, German bankers eat Greek babies. "A modest proposal" is inherently something that could never be seriously considered.)

Or does Varoufalkis, in fact, mean to imply that his notion is sickeningly preposterous, but characteristic of a mindset we now to our shame accept (in which case it would be a "modest proposal" as the phrase is used)? I don't think that's his intent, but the dialogue cuts off and perhaps I'm mistaken.

rfrobison 11-23-2011 05:38 PM

My own 'Modest Proposal'
 
Previously I said the ECB should issue bonds backed by the entire euro zone. For this to work, they need a catchy name. The U.S. government issues Treasuries, the U.K., Gilts, Germany, Bunds, Japan (rather un-catchily) JGBs.

Given how the European Union functions, I can think of no better name for the mooted ECB bond than (Drum poll, please.): the Muddle.

These are sure to be a hit. Can you imagine the following conversation between two bond traders?

"Hey, Jack, I just shorted 2 billion euro's worth of the 10-year muddle!"

"Bad move, Biff. I think interest rates are gonna fall."

Etc., etc., etc.

Unit 11-23-2011 09:45 PM

Re: Worldwise: Live From Athens (Yanis Varoufakis & Henry Farrell)
 
Quote:

Originally Posted by rfrobison (Post 232488)
German taxpayers have every right to be angry. The Greeks, Italians, et al. had a party and they're getting stuck with the bill.

Really? I think it's more complicated than that. Germany pushed for the Euro and unification just as much as anybody else. You think there were no interests at work there? And what "party" did Greece and Italy have exactly, after Euro's introduction pries basically doubled.

Unit 11-23-2011 09:50 PM

Re: Worldwise: Live From Athens (Yanis Varoufakis & Henry Farrell)
 
Correct me if I'm wrong, but Yanis' solution to the current centralization mess, is yet more centralization. No?

rfrobison 11-23-2011 11:11 PM

Re: Worldwise: Live From Athens (Yanis Varoufakis & Henry Farrell)
 
Quote:

Originally Posted by Unit (Post 232594)
Correct me if I'm wrong, but Yanis' solution to the current centralization mess, is yet more centralization. No?

I think that's accurate. In for a penny...

rfrobison 11-23-2011 11:23 PM

Re: Worldwise: Live From Athens (Yanis Varoufakis & Henry Farrell)
 
Quote:

Originally Posted by Unit (Post 232592)
Really? I think it's more complicated than that. Germany pushed for the Euro and unification just as much as anybody else. You think there were no interests at work there? And what "party" did Greece and Italy have exactly, after Euro's introduction pries basically doubled.

Sure, the Germans -- or the elites, anyhow -- pushed for the euro, but on the understanding the euro zone would pursue German-style fiscal discipline. One could fairly accuse them of hypocrisy, since they let their budgets slip a bit too, but nowhere nearly as badly as the "PIGS."

In any case, I was more interested in describing the political reality than discussing the rights and wrongs of the impasse.

Regarding the "party," I was referring to debt-fueled growth.

Unit 11-24-2011 12:28 AM

Re: Worldwise: Live From Athens (Yanis Varoufakis & Henry Farrell)
 
Quote:

Originally Posted by rfrobison (Post 232599)
Regarding the "party," I was referring to debt-fueled growth.

What growth? Greece maybe, but there has been no growth in Italy for the last 10 years at least.

rfrobison 11-24-2011 01:14 AM

Re: Worldwise: Live From Athens (Yanis Varoufakis & Henry Farrell)
 
Quote:

Originally Posted by Unit (Post 232607)
What growth? Greece maybe, but there has been no growth in Italy for the last 10 years at least.

Mm, true. But that is because they failed to implement any real reforms. As a result, their unit labor costs rose, relative to Germany's. Again, that's hardly the Germans' fault.

I suspect the Italian government thought joining the euro would keep inflation down, open new markets and allow them to finance their public debt more cheaply. It did those things, but absent macroeconomic reform, it may have left them worse off because they could no longer devalue to make exports competitive or inflate away their debts.

Unit 11-24-2011 01:50 AM

Re: Worldwise: Live From Athens (Yanis Varoufakis & Henry Farrell)
 
Quote:

Originally Posted by rfrobison (Post 232613)
Mm, true. But that is because they failed to implement any real reforms. As a result, their unit labor costs rose, relative to Germany's. Again, that's hardly the Germans' fault.

hmmm. Not so clear.

Quote:

I suspect the Italian government thought joining the euro would keep inflation down, open new markets and allow them to finance their public debt more cheaply. It did those things, but absent macroeconomic reform, it may have left them worse off because they could no longer devalue to make exports competitive or inflate away their debts.
Could be. Actually, like with other countries, in Italy not everyone was happy abt the Euro initially (although Italy was among the most enthusiastic nations, on average).

Reforms are a technocrat's dream. But there's a downside to reforms too, which also played a role in the Obama administration. The problem is that no one knows what the right reforms should be, how they're going to play out etc...and so the political process often transforms the reform impetus into a sort of relentless experimentation that creates a lot of uncertainty on the ground.

sugarkang 11-24-2011 04:35 AM

Re: Worldwise: Live From Athens (Yanis Varoufakis & Henry Farrell)
 
Quote:

Originally Posted by rfrobison (Post 232543)
Not sure about how this works in practice, but I'm skeptical about this proposal, as it seems to hand a lot of discretionary power to an unelected bureaucracy.

Why? That's how our unelected bureaucracy, non-government, non-federal, Federal Reserve works, right? The whole purpose was to depoliticize the difficult, technical decisions so that the sheeple wouldn't have an opinion one way or another, and therefore not get in the way. My super cynical self says this is likely the only way it would work, which is to say that it's still unlikely to work.

The theoretical framework makes perfect sense the way Yanis lays it out. It sounds like a cross between a European version of our Federal Reserve and MMT as the basic glue for keeping the system coherent. Except these perfect solutions don't work, not because they're necessarily flawed, but because people can't subordinate their own personal self-interests for a higher purpose. Avoiding a Prisoner's Dilemma with two actors is hard; try it with 100 actors. Oh yeah, we do. It's called the U.S. Senate.

That said, it's too bad Henry barely pushed Yanis to explain the proposal further. Maybe Yanis has a more concrete explanation for why individual European countries' defaults wouldn't be a problem. A super seniority lien sounds "really safe" and everything, but if I'm a prospective Eurobond buyer, my confidence has everything to do with whether or not Italy and Greece can cut government spending even as it is refinancing debt. In other words, the U.S. has the same problem now; and unlike Europe, we have no problem financing debt. Meanwhile, every American acknowledges that we have a debt problem, including Democrats. We're all afraid to become the next Greece, and Congress still can't cut anything -- even with a fucking super committee.

If Greece and Italy are more socialist than we are -- and they are -- why would a prospective bond buyer place trust in a Eurobond? If I wanted shitty returns on a long term investment, I'd buy American.

Quote:

Moreover, I doubt the ECB has the competence to implement the large-scale macroeconomic stimulus that Varoufakis seems to be advocating here.
I think it's simpler than that. I doubt it has the competence to enforce "super seniority." And even if it could, ECB is unlikely to be able to borrow trillions from the rest of the world and keep interest rates low enough to lend to the PIIGS.

Stapler Malone 11-25-2011 02:23 PM

Re: What "A modest proposal" is
 
Did you actually watch the diavlog Rathertired? This was addresses on multiple occasions. Both Henry and Yanis are well aware of the connotations of the phrase Yanis is appropriating, tongue fully in cheek. They are making a joke.

Rathertired 11-25-2011 11:23 PM

Re: What "A modest proposal" is
 
No, actually I didn't watch it in full. No one did - or had when I posted because for the first several days this BHTV was up large parts of it were missing because of technical difficulties.

I've just listened to the last fifteen minutes or so that had been missing. (Including the final minute where Farrell explains what "a modest proposal" is. A segment that was missing when this BHTV was originally posted.) Contrary to what you say, Yanni isn't using the phrase tongue in cheek. His proposal is serious - and thus not at all "a modest proposal."

He gives no sense of understanding that "a modest proposal" is a horrific scenario used for satiric purpose. In fairness to him, you don't seem to have grasped the concept either.

Three times Yanni explains why his suggestions constitute a "modest proposal" and in all three instances he is using the word "modest" in a literal sense, seemingly unaware of the larger literary and historical context of the phrase in whole. He is suggesting that his "modest "suggestions would work. And that because they are "modest" they could be implemented within given constraints. He's ignorant of the phrase's meaning as evidently are you.

Henry Farrell is Irish and is fully aware of what "a modest proposal" is as he politely explains at the very end. It's not to Yanni's discredit that he's ignorant of the English meaning of a phrase he's using, but, yeah, the fact remains, he would seem to be ignorant of it. And, yes, he should stop using it.

Also, contrary to what you write, at no point do the two participants "joke" about it. Yanni explains three times that his proposal is a "modest proposal" because his suggestions are "modest" (and do-able) and then at the very end Farrell explains the historical context of the phrase.

Stapler Malone 11-26-2011 09:06 AM

Re: What "A modest proposal" is
 
Quote:

Originally Posted by Rathertired (Post 232699)
No, actually I didn't watch it in full. No one did - or had when I posted because for the first several days this BHTV was up large parts of it were missing because of technical difficulties.

I've just listened to the last fifteen minutes or so that had been missing. (Including the final minute where Farrell explains what "a modest proposal" is. A segment that was missing when this BHTV was originally posted.) Contrary to what you say, Yanni isn't using the phrase tongue in cheek. His proposal is serious - and thus not at all "a modest proposal." ...

Funny, I watched the entire diavlog within an hour of the original posting, and no parts were missing. The end part where they discuss the provenance of the phrase was fully intact. Sorry to burst your finger-wagging bubble, but neither Varoufakis nor Farrell are dumb.

Also, his name is "Yanis," not "Yanni." I'm beginning to suspect that the issue here is something other than everyone around you knowing less about everything than you do. Joke went over your head, so you wrote a long essay explaining in detail something everyone was already aware of. End of story.

Rathertired 11-26-2011 11:22 AM

Re: What "A modest proposal" is
 
No, its not the "end of the story" just because you're wrong and now are feeling embarrassed.

Some ways in which you're wrong:

1) Large parts of the BHTV were missing originally. Um, that's a fact. I mention that in my original post. (Go back and read it, smartguy.) Ask around and you'll find this was the case. There was an apology on the site. I guess, um, your memory is off when you say you heard it in full an hour after it was up. That or, yeah, you're just lying.

2) The speaker is listed as "Yanni" in the link BHTV provides. ("Yanni's Modest Proposal (PDF)")

3) All my other points remain. Yanni didn't grasp the meaning of the phrase and that's the subtext of the self-consicous and polite Farrell's closing comments. A subtext you weren't able to grasp - even once it was pointed out to you.

Contrary to what you write, at no point do they "joke" about it. Yanni repeatedly - three times - explains why he's using the phrase and three times offers a literal explanation of "modest." No one who knows the context of the phrase would use it in the way he does.

Though - unlike you - he's not a native English speaker and didn't have someone point out what was going on from the get-go.

I very much doubt, too, once all this was pointed out to him he would then lie about any of it because he was embarrassed and felt very, very silly. No, he seems like a class guy. Let him be an example to you then, Stapler.

stephanie 11-26-2011 02:08 PM

Re: What "A modest proposal" is
 
Quote:

Originally Posted by Rathertired (Post 232715)
1) Large parts of the BHTV were missing originally. Um, that's a fact. I mention that in my original post. (Go back and read it, smartguy.) Ask around and you'll find this was the case. There was an apology on the site. I guess, um, your memory is off when you say you heard it in full an hour after it was up. That or, yeah, you're just lying.

Might you be thinking of the Karl Smith diavlog? This one cuts off abruptly, but I don't recall there ever being a claim that it was incomplete.

Quote:

2) The speaker is listed as "Yanni" in the link BHTV provides. ("Yanni's Modest Proposal (PDF)")
Not as of today. It's Yanis' Modest Proposal. (And it goes to the "Modest Proposal" of Yanis and Stuart Holland, which might be relevant to the suggestion that the title was not intended to reference Swift or the result of a lack of English fluency or awareness of the connotations in English.)

Quote:

3) All my other points remain. Yanni didn't grasp the meaning of the phrase and that's the subtext of the self-consicous and polite Farrell's closing comments. A subtext you weren't able to grasp - even once it was pointed out to you.
I think SM's right here. Henry here wasn't the first one to mention Swift in talking about the proposal, obviously, given the existence of prior discussion about the proposal, so even if Yanis (and Stuart Holland) had somehow been unaware of the prior use of the term, which I doubt, he would have been aware of it prior to the diavlog. In fact, Henry started the discussion by noting the reference to Swift in brief, before he made the slightly more expansive comment at the end. When Henry initially brought up Swift, Yanis responded by smiling and nodding in the way you would when you expected that link.

db63 11-26-2011 05:59 PM

Re: Worldwise: Live From Athens (Yanis Varoufakis & Henry Farrell)
 
Good talk, but never before in history, nor never again, will Hindenburg be described as a "bourgeois liberal."


All times are GMT -4. The time now is 02:02 PM.

Powered by vBulletin® Version 3.8.7 Beta 1
Copyright ©2000 - 2020, vBulletin Solutions, Inc.