*** is sending his teaching bill to DJ tomorrow *** ;-) On Mar 26, 10:48 pm, Slip Disc <[email protected]> wrote: > tic tic tic tic tic tic tic tic tic tic tic > tic ...................................... > > On Mar 27, 12:35 am, Don Johnson <[email protected]> wrote: > > > > > Maybe Sunday. Orn hogged all my internet time last couple of days and I'm > > busy tomorrow. I figure a couple hours Sunday morning is all I'll need to > > solve all Europe's problems. I'll be in touch. > > > dj > > > On Fri, Mar 26, 2010 at 10:20 PM, Slip Disc <[email protected]> wrote: > > > Okay Don, its been two days now, plenty enough time to digest and > > > research. The tickling is over and I and Francis are waiting for your > > > advice on how his government should be running his country. Don't > > > feel too pressured, you still have 48 hours to respond, after that > > > there will be fines and levies imposed upon you and possibly some > > > liens on your property if Fran doesn't like what you have to say. > > > I know there is a lot of meat in the OP but I doubt very highly that > > > you are a vegetarian. ;-) > > > > On Mar 24, 4:01 pm, Don Johnson <[email protected]> wrote: > > > > There's a lot of meat in this post Slip. I need to read it again and > > > digest > > > > it and do a bit of research. Thanks for tickling my brain. When I come > > > > back I'm going to tell Fran how his government should be running his > > > > country. > > > > > Ha! > > > > > dj > > > > > On Tue, Mar 23, 2010 at 11:37 PM, Slip Disc <[email protected]> wrote: > > > > > Tell us what you think after you check out this Interview conducted by > > > > > Thomas Tuma and Alexander Jung of Spiegel Online International > > > > > with......... > > > > > > Peter Bofinger, 55, a member of the German Council of Economic > > > > > Experts, a respected panel of five economists who advise the federal > > > > > government in Berlin. The economist, who lives in the Bavarian city of > > > > > Würzburg, founded a pro-euro initiative in 1997. > > > > > > AND > > > > > > Joachim Starbatty, 69, a professor emeritus in economics at the > > > > > University of Tübingen in southwestern Germany. In 1997, he and three > > > > > other academics filed a lawsuit against the introduction of the euro > > > > > at Germany's Constitutional Court, though it was ultimately > > > > > unsuccessful. > > > > > > The Interview is titled: > > > > > Bringer of Prosperity or Bottomless Pit? > > > > > Top German Economists Debate the Euro > > > > > > SPIEGEL: Mr. Bofinger and Mr. Starbatty, do you think it was a mistake > > > > > to introduce the euro? > > > > > > Peter Bofinger: No, of course not. Today, we live in a currency zone > > > > > that, despite everything, is significantly more stable than where the > > > > > dollar or yen are used. The euro has brought growth and prosperity to > > > > > Europe. > > > > > > Joachim Starbatty: Actually, the euro was a mistake with particularly > > > > > serious consequences. A monetary union requires its members to pursue > > > > > the same policies and be similarly productive. The so-called > > > > > convergence criteria were meant to ensure that this would happen. But > > > > > -- as the dramatic developments in Greece are now showing -- they > > > > > didn't. > > > > > > SPIEGEL: Do you feel vindicated today? > > > > > > Starbatty: Unfortunately, our fears have become a reality. The > > > > > monetary union was launched with real self-deception. > > > > > > Bofinger: Excuse me? > > > > > > Starbatty: The euro was sold to us as a modernization program for > > > > > Europe, and we were also told that it would push the Community toward > > > > > stability. But, in reality, it has drifted apart and become a truly > > > > > unstable entity. > > > > > > Bofinger: Unstable? The inflation rate has been very moderate, > > > > > hovering at around 2 percent since 1999, and it is significantly lower > > > > > than it was when Germany used the mark. We have a lower budget deficit > > > > > than the Americans, the Japanese and the British. Our debt-GDP ratio > > > > > is also lower than it is in the United States and Japan. There is no > > > > > reason why the euro should be coming under pressure. The decision to > > > > > introduce it was smart and far-sighted. > > > > > > SPIEGEL: Without any drawbacks? > > > > > > Bofinger: Sure, the euro zone is currently looking a little worse for > > > > > the wear. But that's to be expected, given the storm the global > > > > > economy has gone through. Still, thanks to the common currency, it's > > > > > no longer possible, for example, to wage speculative attacks on > > > > > individual currencies. This eliminates a key disruptive factor that > > > > > massively destabilized markets in the past. > > > > > > Starbatty: But that's exactly the problem! In the past, exchange rates > > > > > served as a valve. Individual countries could control their economies > > > > > by allowing their currencies to gain or lose value. Now, this > > > > > adjustment mechanism no longer works and, as a result, a completely > > > > > different sort of dangerous imbalance has emerged. Today, there are > > > > > two blocs within the monetary union: a strong currency bloc in the > > > > > north and a weak one in the south. The robust north has joined forces > > > > > with countries that have constantly devalued their currency throughout > > > > > their histories. Just look at the Italian lira, for example. At the > > > > > end of the 1950s, I paid 6.70 German marks for 1,000 lire. The final > > > > > exchange rate was less than one mark for 1,000 lire. > > > > > > SPIEGEL: What would happen if the old currencies were reintroduced in > > > > > the euro zone tomorrow? > > > > > > Bofinger: It would be a catastrophe. The German mark would have to > > > > > appreciate significantly -- I'd say by 10 percent to 20 percent. > > > > > Everything that we've worked so hard to attain in terms of > > > > > competitiveness would vanish overnight. There would be wailing and the > > > > > gnashing of teeth in Germany. And Europe would be making a serious > > > > > mistake if it were to revert to regionalism and nationalism during > > > > > this phase of advancing globalization. > > > > > > Starbatty: I see things completely differently. The euro was also sold > > > > > to citizens as an instrument for securing peace. I never understood > > > > > that because, if that really were the case, you would have to open the > > > > > monetary union to everyone. Instead, in light of its failure, we are > > > > > now witnessing just how nationalism arises in the first place. EU > > > > > flags have already been burned in Greece. > > > > > > SPIEGEL: Would it have been better if all countries in Europe had kept > > > > > their own currencies? > > > > > > Starbatty: Yes. A community can't function when it's made up of > > > > > unequal partners who are supposed to behave as equals. With the euro, > > > > > Germany has created an artificial competitive advantage for itself, > > > > > which has enabled us to conquer markets all over the world. But this > > > > > has also led to the buildup of massive excess capacity in our export > > > > > industries and, consequently, the export-oriented companies in the > > > > > southwestern state of Baden-Württemberg are hurting. The monetary > > > > > union changed the structure of economies in an unhealthy way. > > > > > > Bofinger: Oh, come on! You can't blame the euro for these imbalances! > > > > > The blame primarily lies with economic policies. Since 1995, there > > > > > have been almost no appreciable wage increases in Germany, partly as a > > > > > result of pressure brought on from increases in subcontracted labor. > > > > > Politicians have done everything to relieve employers of the burden of > > > > > paying social security contributions because we fell into this strange > > > > > panic, believing we weren't globally competitive. With our economic > > > > > policies, we placed too much of a lopsided emphasis on exports. The > > > > > Irish, Greeks and Spaniards, on the other hand, put too much emphasis > > > > > on domestic demand. > > > > > > 'Putting the Virtuous in the Dock Rather than the Real Offenders' > > > > > > SPIEGEL: In recent days, French Finance Minister Christine Lagarde has > > > > > repeatedly criticized Germany's export surpluses for being high > > > > > compared with those of other EU countries. Is she right to do so? > > > > > > Starbatty: No. I think it's strange that Madame Lagarde is putting the > > > > > virtuous, who have always been oriented toward stability, in the dock > > > > > rather than the real offenders. > > > > > > Bofinger: But the Germans have sinned just as much as the Spaniards, > > > > > for example. The Spaniards made their wages too high, while we in > > > > > Germany practiced the opposite by not increasing the purchasing power > > > > > of workers for years. > > > > > > Starbatty: So what? It made us successful. It arose from the concern > > > > > that jobs would migrate abroad. And Germany's moderate wage policy has > > > > > made the country attractive to companies again. > > > > > > Bofinger: You should look at it more holistically. We wouldn't have > > > > > been able to increase our exports if the other countries had behaved > > > > > like us and had not increased their demand for an entire decade. In my > > > > > view, the monetary union is like a relationship: To function properly, > > > > > its participants must orient their behavior toward the general good. > > > > > If each participant only contemplates his or her own benefit, it leads > > > > > to the kind of relationship crisis we are currently experiencing. > > > > > > SPIEGEL: Such crises occasionally also end in divorce. Would that be > > > > > an option at some point in the future for Greece, a euro-zone member? > > > > > > Starbatty: I think that step would make the most sense. The Greeks > > > > > should voluntarily leave the monetary union and reintroduce the > > > > > drachma. If they did, they would export more and could replace foreign > > > > > products with domestic ones. Likewise, tourists would travel to Greece > > > > > instead of Turkey because it would be the cheaper alternative. > > > > > > Bofinger: Excluding Greece from the Union would be the completely > > > > > wrong approach. Greece's > > ... > > read more »- Hide quoted text - > > - Show quoted text -
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