AndrewM,

Thanks for the kind words.

I know how hard it is to not dispair. But don’t give up hope yet. The crisis is gearing up not down. They may think they have done enough to cripple democratic dissent but I think there is a very godd chance the credit crunch is entering a new phase which they may not be ready for.

They will either fall or have to launch new and far more draconian measures than any seen so far. Hang on to your hat and don’t give up.

Thanks for making an appearance on Irish television. I always wondered what would happen if more people like you were handed the microphone in this country’s media. Well, despite your great work, my hope for a positive outcome is ever-dwindling. Gauging the attitudes of the Government, and worse by multiples: the oh-so-flawed point of view of the ordinary people of this country, I am feeling utterly hopeless about our situation at this point.

All the same, your moments of simple clarity in a sea of ignorance, scapegoating and rubbish-talk was a nice breath of fresh air. I’m reminded of an Einstein quote, ““If you can’t explain it simply, you don’t understand it well enough.”

I’m tired of representational politics, of people who insist they’ll somehow do a better job when they’ve acquired the same position of privilege in a corrupt system which they themselves still believe works. It all begs for another Einstein quote, ““We can’t solve problems by using the same kind of thinking we used when we created them.”

But I’m preaching to the choir, when the rest of the country stay in to watch X-factor and parrot assertions that ‘there is no alternative’.

What was it Keynes said about the long run?

I saw that. I can’t quite make up my mind whether PM is being responsible, thinking about the possible consequences of spilling the beans (some journalists would go for the story regardless), or withholding information that we should know. After all, the bank in question has that research, and is presumably acting on it, which people who don’t have access to it can’t.

Perhaps he’s having it both ways: not being specific, but letting the cat out of the bag in general terms. Perhaps there’s some hope of at least mitigating disaster by buying the time to prepare for relatively orderly rather than disorderly bankruptcies. Perhaps it makes no difference. Either way it’s very scary.

Charles – according to one of the think tanks 2083 is pencilled in for the UK debt to be 60% of GDP.

That’s a pretty slow curve rather than a corner.

This is the kind of ‘sanity’ you get when the lunatics are running the asylum.

Once again, Bill Mitchell sums it up:
——————————————————————————————————

“The future is always just around the corner when “market sentiment” or “investor confidence” or “household outlooks” will improve and growth will return. The next edition wipes out the previous estimates of growth and pushes them forward again.
The pattern is very familiar to those who read these documents sequentially over time. The same ideological paradigm is imposed on the story so you don’t really get any understanding that the reality they have to acknowledge (after denying it in previous “forecasts”) is anything to do with the failure of the ideology.
…
Further, note the ideology – they wanted us to believe that under the drag of fiscal austerity and the deliberate choice by politicians to allow unemployment to keep rising, that private demand would take “over as the engine of a moderate recovery”. It was never going to do that.

And note they are silent about their much-vaunted claims that there would be an export-led recovery once the fiscal austerity deflated the domestic economies sufficiently – that is caused so much entrenched unemployment that wage cuts were easy to push through.

But then the reality has to be acknowledged – they know that the situation is deteriorating quickly and all they can say is that their “hopes were dashed”.

The whole fiscal austerity mantra is built on these “hopes”. They somehow think that if they keep saying it enough – that consumers and firms will spend and invest more despite on-going job losses, huge debt overhangs, housing market collapses, and wage and pension cuts etc – that it will happen.

Some of them who try to put some “technical” authority into this mantra talk about Ricardian Equivalence or their versions of this rather insidious notion that mainstream macroeconomics invented to justify their call for smaller government and pro-cyclical fiscal policy. Apparently, private spending was being withdrawn not because jobs were drying up and sales were falling but because the resulting deficits (via the automatic stabilisers) were signalling higher taxes in the future and everyone was madly saving to meet their future tax obligations.

The notion has never enjoyed empirical support and at the theoretical level relies on some extreme (impossible) assumptions for its consistency. It is the stuff of fantasy land. The real motivation of the economists – of-course, was to limit the size and capacity of government and provide more scope for their beloved “self regulating free market”, an oxymoron if there ever was one – to appropriate real income from the workers.
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The triumph was that the cabal captured governments completely and so now our so-called elected officials do the bidding for small elites and use public funds to lie to us about there being no alternative.

So who is in the cabal in Europe? The UK Guardian’s Larry Elliot summarised it nicely yesterday (November 10, 2011) in this article – The emergence of the Frankfurt Group has turned back the democratic clock.
He argues that

“(e)lectorates are being bypassed as increasing austerity pushes Europe’s weaker countries into an economic death spiral … and the real decisions in Europe are now taken by the Frankfurt Group, an unelected cabal made of up eight people: Lagarde; Merkel; Sarkozy; Mario Draghi, the new president of the ECB; José Manuel Barroso, the president of the European Commission; Jean-Claude Juncker, chairman of the Eurogroup; Herman van Rompuy, the president of the European Council; and Olli Rehn, Europe’s economic and monetary affairs commissioner.

This group, which is accountable to no one, calls the shots in Europe. The cabal decides whether Greece should be allowed to hold a referendum and if and when Athens should get the next tranche of its bailout cash. What matters to this group is what the financial markets think not what voters might want. To the extent that governments had any power, it has been removed and placed in the hands of the European Commission, the European Central Bank and the IMF. It is as if the democratic clock has been turned back to the days when France was ruled by the Bourbons.
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The Euro cabal is really incapable of resolving the problems that it faces. They are locked in an ideological warp that is in denial of the only solutions that are possible. They have too much political capital – and raw power – to protect. To acknowledge the way forward was to manage an orderly break-up of the flawed monetary system would be too much to ask.

It will take an uprising of the citizens who finally get sick of the increased hardship the cabal is inflicting on them and decide to assert their democratic rights.”
Bill Mitchell: http://goo.gl/1YVsO

http://www.guardian.co.uk/commentisfree/2011/nov/11/the-conversation-eurozone-crisis

“PM: Just because the cost of breakup is so great doesn’t mean it won’t happen. I was leaked some bank research and the sliding scale of banks that went bust was so frightening I decided it was impossible to report without causing panic”

“PM: It’s inevitable Greece will default and exit. I think Ireland will be saved because there’s too much riding on it as a big version of Monaco. Portugal doesn’t really matter, it’s not systemic, and so it all comes down to Italy.”

And in a recent twitter exchange PM explains the Monaco reference:

“yes but the reason the Brits want to save Eire is its role as offshore financial centre”

The Eurozone crisis and the Occupy movement reveal two sides of the contemporary failure to grasp the significance of democracy. In one case, political change is reduced to technocratic fiddling, in the other democracy equated with lack of political structure. This separation of politics and democracy should worry us as much as the economic crisis itself.
http://kenanmalik.wordpress.com/2011/11/11/politics-without-democracy-democracy-without-politics/

Cool, only atop the foundational assumption of scarcity no market can stay free. Big fish eat little fish (competition, greed, selfishness), in the twinned realms of Market and State alike, and before you know it, the biggest are writing the rules to suit themselves and their own. ‘Twas ever thus, and ever thus shall be. Until we update the Triumvirate of Evil and embrace abundance, cooperation and faith.

Back to the money system. It is the motor of state apparatus, is its core dynamic embodied in financial infrastructure. Forged in those Competition, Selfishness and Greed fires, the money system stimulates and assumes these three forces equally resolutely. It also requires, by design, perpetual economic growth. Ever-growing economic activity. An ever-expanding money realm into the non-economic realm. An ever-accelerating rat race. What was once done for free, what is ‘idly’ doing nothing—like forests and schools of fish—must be converted into either goods or services.

If it’s not working, if it’s not earning money and delivering price information, what possible value can it have? How can we measure a thing, assess it, extract it, profit from it, unless it is sucked into economic life? Look at air, that useless, ubiquitous stuff. It has a price of zero! Let’s earn money from it, put it to work somehow, make it earn its right to exist! But what happens when there’s no nature left to convert into goods and services ??? Let’s not contemplate that.

Except, the mainstream has begun to contemplate just that. We are the mainstream, even we Fringe Nutjobs. The more eloquent we become at presenting our case, the quicker and more effectively the message can spread to others. Then our imaginations can begin the work of envisioning a new system, and put ideas into practice.

Fellow travelers, through this period of upheaval, crisis and opportunity, the time of the Fringe Nutjob has come. People will be asking, in growing numbers, what the alternatives are. Sadly, the “no one knows” answer can be annoying. I suggest pointing out that the system we have is based on profound misunderstandings of the workings of reality, and, as a consequence, has become addicted to perpetual growth. We have designed a system which, were it a car, could only accelerate. Forever. Pressing on the breaks causes it to crash. Designing things differently requires, urgently, a new money system, which will further and necessarily require a redesign of pretty much everything else. All of it can only begin when we are ready to initiate the task. When we badly want something new. Right now recognition of the urgency is paramount. The ideas are there. We need safe-as-possible mechanisms and methodologies for testing them.”
http://thdrussell.blogspot.com/2011/11/crisis-of-imagination.html