Financial fuckery thread

[Cain]

Also also, speaking of Colonels and Greece, here is a blog post by Adam Curtis

http://www.bbc.co.uk/blogs/adamcurtis/2011/11/the_ghost_of_the_colonels.html

In the present crisis over Greece there is a furious argument about whether the Greek people should be allowed to vote on the proposed solution. Many of the voices against this come from the world of finance and economics. They say that the crisis is too dangerous to leave to the will of the people.

I just wanted to show why some Greek politicians - and especially George Papandreou, even though he may have retreated from a referendum - might think it important to allow the people a voice.

I have discovered a film in the archives that dramatically tells you why. It was made in 1974 and is an engrossing history of the Colonels' coup in Greece in 1967 - and what life was then like for the Greek people under the military dictatorship that held power for seven years.

As you watch it you realise, given what the Greeks have been through, it is no wonder that politicians, especially Papandreou, think the mandate of the people is important.

The present language of the finance technocrats, and their supporters in the media, portray the Greek people as just another group of lazy southern Europeans who have fed too long at the trough of state money. A bit like us - but more crap.

What is forgotten is that from 1967 to 1974 the Greek people lived under a harsh and violent dictatorship that tortured and murdered thousands of ordinary people. The Colonels also corrupted the society by handing out vast loans to individuals in towns and villages across the country - to buy their loyalty. At the same time the repression and torture bred a powerful resistance that finally burst out in incredible bravery in 1973.

This is the strange and twisted society that the present Prime Minister's father, Andreas Papandreou, inherited when he became the newly elected leader in 1981. He was faced by the task of rebuilding the peoples' trust in democracy and the state. Partly he did it through state spending - and in that policy lie many of the roots of today's crisis.

The discussion of Greece today in the press and the political offices of Europe is almost completely ahistorical - everything is couched in utilitarian terms of economic management. I just think it is important to put the present crisis in a wider historical context. Above all the extraordinary history of the military dictatorship and the savage effects it had on the whole of Greek society.

Emphasis mine.

[Cain]

Le Monde Diplomatique made a similar point to the one I made above, as an aside in a larger article about the European left today

http://mondediplo.com/2011/11/01left

The risks of striking out isolation, inflation, downgrading are dinned into us. But what about the risks of toeing the line? Reviewing Europe's situation in the 1930s, historian Karl Polanyi recalled that "the impasse reached by liberal capitalism" had led in some countries to "a reform of market economy achieved at the price of the extirpation of all democratic institutions". Even Michel Rocard, a most moderate socialist, is alarmed at that prospect: imposing harder conditions on the Greeks could mean the end of Greek democracy. "Given the anger that the people will feel," he wrote last month, "it is doubtful whether any Greek government can hold on without the support of the army. This sad observation probably applies equally to Portugal and/or Ireland, and/or other, larger, countries. How far will it go?"

[Cain]

Papendreou just got ousted, despite surviving the vote.

A new coalition government will be taking charge, between Pasok and New Democracy.  And guess who is hotly tipped to take Papendreou's place?  Finance Minister Evangelos Venizelos.

I should've trusted my instincts on this.

[Cain]

http://www.cnbc.com/id/45174237

The jobs crisis has left so many people out of work for so long that most of America's unemployed are no longer receiving unemployment benefits.

Early last year, 75 percent were receiving checks. The figure is now 48 percent — a shift that points to a growing crisis of long-term unemployment. Nearly one-third of America's 14 million unemployed have had no job for a year or more.

Congress is expected to decide by year's end whether to continue providing emergency unemployment benefits for up to 99 weeks in the hardest-hit states. If the emergency benefits expire, the proportion of the unemployed receiving aid would fall further.

The ranks of the poor would also rise. The Census Bureau says unemployment benefits kept 3.2 million people from slipping into poverty last year. It defines poverty as annual income below $22,314 for a family of four.

[Precious Moments Zalgo]

http://www.cnbc.com/id/45174237

The jobs crisis has left so many people out of work for so long that most of America's unemployed are no longer receiving unemployment benefits.

Early last year, 75 percent were receiving checks. The figure is now 48 percent — a shift that points to a growing crisis of long-term unemployment. Nearly one-third of America's 14 million unemployed have had no job for a year or more.

Congress is expected to decide by year's end whether to continue providing emergency unemployment benefits for up to 99 weeks in the hardest-hit states. If the emergency benefits expire, the proportion of the unemployed receiving aid would fall further.

The ranks of the poor would also rise. The Census Bureau says unemployment benefits kept 3.2 million people from slipping into poverty last year. It defines poverty as annual income below $22,314 for a family of four.

But if we extend their benefits, then they'll have no incentive to continue looking for work.
              /

[Elder Iptuous]

http://www.cnbc.com/id/45174237

It defines poverty as annual income below $22,314 for a family of four.

huh... an oddly specific number.
also, really low!  i'd consider my self 'poor' if i slipped down to a number significantly higher than that.

[Cain]

I thought the exact same thing.  That's about £14,000...which is definitely below the UK defined income poverty line for a family of four, as far as I can tell (the UK, for some reason, uses weekly income).  Of course, the cost of living is more expensive over here anyway...

Either way, while £14,000 certainly looked good about a year ago, I wouldn't even be able to afford to live in London on that much alone.  Rent alone would take up all of that.

[Scribbly]

I'm currently on £9,000. If I get bumped up to £18,000 I should be able to move into London. Not a very nice part of London, and probably in a flatshare, but it should be possible.

I am, however, not a family of four. I would hate to even contemplate how much that would cost.

[Cain]

In my area of London, which is admittedly expensive, I think you'd be looking at about £700 per week in rent, probably more, for a four person apartment or house.  Through in insurance, heating costs, internet bills etc and you're certainly looking at over £2500 a month.

[Precious Moments Zalgo]

http://www.cnbc.com/id/45174237

It defines poverty as annual income below $22,314 for a family of four.

huh... an oddly specific number.
also, really low!  i'd consider my self 'poor' if i slipped down to a number significantly higher than that.

I think it started out as a round number, but they adjust it for inflation every year.

[Elder Iptuous]

http://www.cnbc.com/id/45174237

It defines poverty as annual income below $22,314 for a family of four.

huh... an oddly specific number.
also, really low!  i'd consider my self 'poor' if i slipped down to a number significantly higher than that.

I think it started out as a round number, but they adjust it for inflation every year.

with the fudge that they include in the inflation estimate, i would think they could at least round it off to a fiver, no?  i mean, even poor people hate dealing with small change...

[Cain]

China's housing bubble just burst.

Is this the end of the world?  Potentially, but probably not.  Why?  China has managed extraordinary rates of economic growth over the past couple of decades.  The main reason for this is that Chinese economists listen to what the IMF and World Bank say to do, and then categorically reject that advice as a plan of action, and do something else.

China will probably engage in some deficit spending, play around with it's currency a bit and avoid the temptation to go all "austerity" on everyone.  It's not guaranteed to work, but it's also not guaranteed to fail, like any austerity plan would.  As such, I expect the fallout of the bubble bursting to be less damaging than most people are predicting.

[Mesozoic Mister Nigel]

Hmm, very interesting!

[Cain]

Never do what the IMF wants.  Ever.

China was the only country to ignore IMF advice in 1998, during the Asian financial crisis.  China was also the first economy to recover in that period, quickly followed by the other countries who started to do the same.

Greece is doing what the IMF wants.  So is the UK.  So is Ireland.  And look how that is turning out - anemic growth (if not outright contraction), sluggish demand and high unemployment.  It's almost as if they want those conditions, but I'm just going to go along with the theory that they're stupid and don't know what they're doing.

[Mesozoic Mister Nigel]

Never do what the IMF wants.  Ever.

China was the only country to ignore IMF advice in 1998, during the Asian financial crisis.  China was also the first economy to recover in that period, quickly followed by the other countries who started to do the same.

Greece is doing what the IMF wants.  So is the UK.  So is Ireland.  And look how that is turning out - anemic growth (if not outright contraction), sluggish demand and high unemployment.  It's almost as if they want those conditions, but I'm just going to go along with the theory that they're stupid and don't know what they're doing.

That is probably a wise assumption to make with most bureaucratic agencies.

Also, Hanlon's Razor.