I've changed the thread from "Radiation levels . . ." because, in referring to Paul Krugman's latest epistle (see below), Ray has now left nuclear reactors behind. Keith,
Don't be so sure. Everything is connected under the official rubric of "profit" and "wealth production as the only relevant value." I see the worship of a stone as the basis for building an energy plant that when something goes wrong can ruin the place for 25,000 years. I also believe that the contemplation of such a thing for mere comfort to be pathological. What you say may makes some sense on the surface of things but not if you move to the place where the whole thing is related. There are more layers. REH From: Keith Hudson [mailto:[email protected]] Sent: Monday, April 16, 2012 4:01 AM To: RE-DESIGNING WORK, INCOME DISTRIBUTION, EDUCATION; Ray Harrell Subject: Paul Krugman is right I've changed the thread from "Radiation levels . . ." because, in referring to Paul Krugman's latest epistle (see below), Ray has now left nuclear reactors behind. At 06:03 16/04/2012, Ray wrote: (REH) Are we even in the same universe? You do it right and you get wrong. You do it wrong and you get wrong. Didn't Gregory Bateson call this a "double bind"? Would we have been better off to save all of that cold war money and just let this all sink into the sunset and save our pennies at home. No Vietnam, maybe no second world war. Just let Germany and the Soviets fight it out. We seem to keep pouring money down a foreign aid and military hole while the right arms itself in America. How long before the left gets the idea and begins to arm itself and play with guns? We already continous war and a suspension of murder of Americans without trials. People "disappearing." It all started when we decided to missionize the world for democracy. If someone is going commit suicide in front of your face, perhaps there comes a time when you should just watch. (KH) Yes, watch by all means. Paul Krugman is quite right (so help me) -- at least in his first paragraph (dubious in places elsewhere). Yes, pretty well all European governments, within and without the Eurozone, are committing suicide. But you'd better hope that we don't expire too quickly because America is still reliant on quite a lot of trade with Europe and, otherwise, we'd bring you down, too, before you'd have time to adjust. I don't quite know why Krugman is calling time on Europe just now. After all, the European Central Bank has been doing what the Fed has been doing under Bernanke -- money printing in lavish quantities. The latest was only a fortnight ago when the ECB released another 1 trillion Euros (a 3-year "loan") into European banks. This was the largest dollop yet and was supposed to give at least a 1 to 2 years' breathing space. But no, within a week, Spanish bond yields have been going up (that is, the value of the bonds themselves has been going down). In short, investors are avoiding Spain because it seems to be next on the chopping block after Greece. But Krugman had better be not not so cock-sure about America. Even Bernanke seems to be having doubts about the efficacy of money-printing. Also Krugman ought to get down to some serious reading about the history of the real gold standard as it had finally developed in the latter decades of the 19th century. What he's referring to are problems caused by the pseudo gold standard of America (as established from the beginning by the Fed in 1913) and the pseudo gold standard of Europe (as re-established in Europe after World War I -- the Genoa Conference of 1922). Keith April 15, 2012 Europe's Economic Suicide By PAUL KRUGMAN <http://topics.nytimes.com/top/opinion/editorialsandoped/oped/columnists/pau lkrugman/index.html?inline=nyt-per> On Saturday The Times reported on an apparently growing phenomenon in Europe: <http://www.nytimes.com/2012/04/15/world/europe/increasingly-in-europe-suici des-by-economic-crisis.html?_r=1&ref=world> "suicide by economic crisis," people taking their own lives in despair over unemployment and business failure. It was a heartbreaking story. But I'm sure I wasn't the only reader, especially among economists, wondering if the larger story isn't so much about individuals as about the apparent determination of European leaders to commit economic suicide for the Continent as a whole. Just a few months ago I was feeling some hope about Europe. You may recall that late last fall Europe appeared to be on the verge of financial meltdown; but the European Central Bank, Europe's counterpart to the Fed, came to the Continent's rescue. It offered Europe's banks open-ended credit lines as long as they put up the bonds of European governments as collateral; this directly supported the banks and indirectly supported the governments, and put an end to the panic. The question then was whether this brave and effective action would be the start of a broader rethink, whether European leaders would use the breathing space the bank had created to reconsider the policies that brought matters to a head in the first place. But they didn't. Instead, they doubled down on their failed policies and ideas. And it's getting harder and harder to believe that anything will get them to change course. Consider the state of affairs in Spain <http://topics.nytimes.com/top/news/international/countriesandterritories/sp ain/index.html?inline=nyt-geo> , which is now the epicenter of the crisis. Never mind talk of recession; Spain is in full-on depression, with the overall unemployment rate at 23.6 percent, comparable to America at the depths of the Great Depression <http://topics.nytimes.com/top/reference/timestopics/subjects/g/great_depres sion_1930s/index.html?inline=nyt-classifier> , and the youth unemployment rate over 50 percent. This can't go on - and the realization that it can't go on is what is sending Spanish borrowing costs ever higher. In a way, it doesn't really matter how Spain got to this point - but for what it's worth, the Spanish story bears no resemblance to the morality tales so popular among European officials, especially in Germany <http://topics.nytimes.com/top/news/international/countriesandterritories/ge rmany/index.html?inline=nyt-geo> . Spain wasn't fiscally profligate - on the eve of the crisis it had low debt and a budget surplus <http://krugman.blogs.nytimes.com/2012/04/15/insane-in-spain/> . Unfortunately, it also had an enormous housing bubble, a bubble made possible in large part by huge loans from German banks to their Spanish counterparts. When the bubble burst, the Spanish economy was left high and dry; Spain's fiscal problems are a consequence of its depression, not its cause. Nonetheless, the prescription coming from Berlin and Frankfurt is, you guessed it, even more fiscal austerity. This is, not to mince words, just insane. Europe has had several years of experience with harsh austerity programs, and the results are exactly what students of history told you would happen: such programs push depressed economies even deeper into depression. And because investors look at the state of a nation's economy when assessing its ability to repay debt, austerity programs haven't even worked as a way to reduce borrowing costs. What is the alternative? Well, in the 1930s - an era that modern Europe is starting to replicate in ever more faithful detail - the essential condition for recovery was exit from the gold standard. The equivalent move now would be exit from the euro <http://topics.nytimes.com/top/reference/timestopics/subjects/c/currency/eur o/index.html?inline=nyt-classifier> , and restoration of national currencies. You may say that this is inconceivable, and it would indeed be a hugely disruptive event both economically and politically. But continuing on the present course, imposing ever-harsher austerity on countries that are already suffering Depression-era unemployment, is what's truly inconceivable. So if European leaders really wanted to save the euro they would be looking for an alternative course. And the shape of such an alternative is actually fairly clear. The Continent needs more expansionary monetary policies, in the form of a willingness - an announced willingness - on the part of the European Central Bank to accept somewhat higher inflation; it needs more expansionary fiscal policies, in the form of budgets in Germany that offset austerity in Spain and other troubled nations around the Continent's periphery, rather than reinforcing it. Even with such policies, the peripheral nations would face years of hard times. But at least there would be some hope of recovery. What we're actually seeing, however, is complete inflexibility. In March, European leaders signed a fiscal pact that in effect locks in fiscal austerity as the response to any and all problems. Meanwhile, key officials at the central bank are making a point of emphasizing the bank's willingness to raise rates at the slightest hint of higher inflation. So it's hard to avoid a sense of despair. Rather than admit that they've been wrong, European leaders seem determined to drive their economy - and their society - off a cliff. And the whole world will pay the price. Keith Hudson, Saltford, England http://allisstatus.wordpress.com <http://allisstatus.wordpress.com/>
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