Why are the British so anti Europe?

KyussBishop · 25-06-2013 07:30PM

Scofflaw wrote: »

But there hasn't ever been a plan to "fix the euro" in some magic bullet way that improves recovery, because the euro isn't the problem there. Austerity is the plan, and it's a long one - all the magic bullet options have been rejected.

There is a confusion here between the currency itself, and the political process that a shared currency entails.

The currency, monetary policy and fiscal policy, are all inseparable; it's all politics, there is no real divide between economics and politics.

Austerity is not 'the plan' really, it's just the default state of what happens when you don't have any way to agree to a mutual plan; it's far too easy for powerful countries to deadlock the political process, so smaller countries get hammered by austerity.

The political system used with the currency, is an inseparably important part of the currency itself; you don't want a shared currency, where the political system enmeshed with it, leads to worsening crisis in a huge way like this.

KyussBishop · 25-06-2013 07:37PM

View wrote: »

That would explain of course why the UK with the full suite of "sovereign control" at its disposal has actually been one of the worst performing economies in the EU during the crisis with it consistently ranking in the bottom 5 (based on an economy's deficit and resulting clocking up of debt:GDP ratio).

A case of the old economic quip "never mind how it works in reality, how does it works in theory?", no doubt.

Ironically, the UK's policy decisions are guided by economic theory that is not in sync with reality, so it's current policies are precisely a case of theory besting reality.
It is very well documented, that economics as a field of study, and economics which dominates in politics (including most countries management of the crisis), is just flat out wrong in many fundamental ways (particularly where it comes to the monetary system).

The crisis in the UK and in Europe, is entirely political; the solutions for both are known, and the main arguments against them mainly draw down to political ones, which don't disagree with any of the underlying economic theory.

ewan whose army · 25-06-2013 07:39PM

KyussBishop wrote: »

Ironically, the UK's policy decisions are guided by economic theory that is not in sync with reality, so it's current policies are precisely a case of theory besting reality.
It is very well documented, that economics as a field of study, and economics which dominates in politics (including most countries management of the crisis), is just flat out wrong in many fundamental ways (particularly where it comes to the monetary system).

The crisis in the UK and in Europe, is entirely political; the solutions for both are known, and the main arguments against them mainly draw down to political ones, which don't disagree with any of the underlying economic theory.

The problem with the UK is incompetence within the government, nothing to do with the EU

McDave · 25-06-2013 07:46PM

KyussBishop wrote: »

It really isn't early at all; it is very clearly a huge failure, in how it is forcing economies to crater.

The very fact that it was half-implemented, and massively worsened this crisis, is itself a total failure; that is criminally negligent, and is leading to many deaths throughout Europe, as a result of the crisis and effects on public spending (among much else).

The punitive and unnecessary 'discipline' (which instills no lesson other than that mainstream economic theory is sociopathically false), quite literally kills people for no good reason.

The Euro's continued existence disproves your 'failure' charge comprehensively. Greece forced its own failure. Ireland under Ahern forced its own failure.

The half implementation of the Euro was largely down to the EU being forced into compromises by UK obstructionism. There's never a perfect time for change. The EU had to strike while it could to bring an idea to fruition which had been around for at least 30 years.

As for economic discipline, you adhere to it or you don't. If people have died in places like Greece, it's down to the incompetence and corruption of their own governments. But of course, you're free to ignore corruption and its consequences if you really prefer.

McDave · 25-06-2013 07:48PM

KyussBishop wrote: »

I saw that article actually, yes; I guess there may have been some potential to it, but it's very much a 'what if'.

Either way, it still irrevocably restricts available recovery options for countries; it's been 5 years now and we're still no closer to seeing these necessary fixes for the Euro.

We're a *lot* closer. Not least in seeing countries demonstrate the extent to which they are prepared to reform their economic and political behaviour.

McDave · 25-06-2013 07:53PM

KyussBishop wrote: »

True, but for that we need a full federal EU, as a countries control over its own currency (and monetary policy) is arguably an essential issue of sovereignty.

Doing it piecemeal just (as the Euro shows) puts countries in an incredibly dangerous situation, where if there is an economic crisis, there may be a deadlock.

It's not a proven fact that you need a state-like entity to run a currency. The EZ could prove your unproven assumption wrong sooner than you think.

View · 25-06-2013 07:55PM

ewan whose army wrote: »

The problem with the UK is incompetence within the government, nothing to do with the EU

Ironically, Sterling is never held as being responsible for that incompetence whereas the Euro - bits of metal and paper - is apparently gulity of everything from governmental economic incompetence to dogs fouling the local pavement.

The crisis has in fact highlighted the inter-dependence of the EU member states - not that the media seem to have noticed.

KyussBishop · 25-06-2013 07:56PM

McDave wrote: »

The Euro's continued existence disproves your 'failure' charge comprehensively. Greece forced its own failure. Ireland under Ahern forced its own failure.

The half implementation of the Euro was largely down to the EU being forced into compromises by UK obstructionism. There's never a perfect time for change. The EU had to strike while it could to bring an idea to fruition which had been around for at least 30 years.

As for economic discipline, you adhere to it or you don't. If people have died in places like Greece, it's down to the incompetence and corruption of their own governments. But of course, you're free to ignore corruption and its consequences if you really prefer.

The Euro's continued existence, has economies EU-wide locked in a death-spiral, where we are still taking damage societally, 5 years after the crisis, and probably still for another 5-10 years (if not more).

Just because something isn't dead yet, doesn't make it a success; success is a matter of seeking the best standards possible, not seeking standards that are "good enough" (even if just barely) to avoid the death of a currency.

Your comments on economic discipline, advocate collective punishment of all the Greek people, for the failures of its past governments, when that is totally unnecessary.

McDave · 25-06-2013 07:57PM

View wrote: »

Ironically, Sterling is never held as being responsible for that incompetence whereas the Euro - bits of metal and paper - is apparently gulity of everything from governmental economic incompetence to dogs fouling the local pavement.

The crisis has in fact highlighted the inter-dependence of the EU member states - not that the media seem to have noticed.

The UK media at any rate!

KyussBishop · 25-06-2013 08:04PM

McDave wrote: »

We're a *lot* closer. Not least in seeing countries demonstrate the extent to which they are prepared to reform their economic and political behaviour.

We could have been through this years ago, and kept full employment throughout; economically, it doesn't make sense to waste huge amounts of human labour, like mainstream economic theory tells us.

McDave wrote: »

It's not a proven fact that you need a state-like entity to run a currency. The EZ could prove your unproven assumption wrong sooner than you think.

I never said you need one, I said it's an issue of sovereignty.

View · 25-06-2013 08:09PM

KyussBishop wrote: »

Ironically, the UK's policy decisions are guided by economic theory that is not in sync with reality, so it's current policies are precisely a case of theory besting reality.
It is very well documented, that economics as a field of study, and economics which dominates in politics (including most countries management of the crisis), is just flat out wrong in many fundamental ways (particularly where it comes to the monetary system).

The crisis in the UK and in Europe, is entirely political; the solutions for both are known, and the main arguments against them mainly draw down to political ones, which don't disagree with any of the underlying economic theory.

Ah, now you seem to be blaming the policies being pursued - so it is not the currency that's to blame then, is it?

As, for your view on the policies themselves, you should note that none of the politicians seem to be in a rush to brace these "obvious" alternative policies - that's either an electoral death-wish on all their parts or they regard these alternatives as being fundamentally wrong.

McDave · 25-06-2013 08:12PM

KyussBishop wrote: »

The Euro's continued existence, has economies EU-wide locked in a death-spiral, where we are still taking damage societally, 5 years after the crisis, and probably still for another 5-10 years (if not more).

Just because something isn't dead yet, doesn't make it a success; success is a matter of seeking the best standards possible, not seeking standards that are "good enough" (even if just barely) to avoid the death of a currency.

Your comments on economic discipline, advocate collective punishment of all the Greek people, for the failures of its past governments, when that is totally unnecessary.

"Death spiral"! Give it a rest.

As for Greece, it's not the job of the general Euro taxpayer to dig out Greek corruption. Greece signed up to the single currency. It's their responsibility to get their economy into shape. That's not "punishment". It's requiring sovereign people and states to live up to their promises.

If Greeks decide it's not worth the candle, they can exit. But watch closely. They won't. Why? Because deep down they probably judge sticking with the EZ programme is their best shot of developing a modern functioning state.

McDave · 25-06-2013 08:13PM

KyussBishop wrote: »

I never said you need one, I said it's an issue of sovereignty.

Your point being precisely what?

McDave · 25-06-2013 08:15PM

KyussBishop wrote: »

We could have been through this years ago, and kept full employment throughout; economically, it doesn't make sense to waste huge amounts of human labour, like mainstream economic theory tells us.

How, precisely? Using what "mainstream" theory?

KyussBishop · 25-06-2013 08:18PM

View wrote: »

Ah, now you seem to be blaming the policies being pursued - so it is not the currency that's to blame then, is it?

As, for your view on the policies themselves, you should note that none of the politicians seem to be in a rush to brace these "obvious" alternative policies - that's either an electoral death-wish on all their parts or they regard these alternatives as being fundamentally wrong.

Monetary policy and fiscal policy and the chosen currency, are all pretty heavily intertwined, so there isn't really a distinction there; the chosen currency affects the range of policy options available, and the UK has policy options Euro countries don't.

Your argument as to politicians not choosing alternative policies, is entirely political (does not relate to the economics at all); politicians choices here are not a surprise, since economics in academia and politics, is still dominated by fundamentally flawed theory.

McDave · 25-06-2013 08:28PM

KyussBishop wrote: »

Monetary policy and fiscal policy and the chosen currency, are all pretty heavily intertwined, so there isn't really a distinction there; the chosen currency affects the range of policy options available, and the UK has policy options Euro countries don't.

Your argument as to politicians not choosing alternative policies, is entirely political (does not relate to the economics at all); politicians choices here are not a surprise, since economics in academia and politics, is still dominated by fundamentally flawed theory.

Care to specify which theory? And how?

KyussBishop · 25-06-2013 08:31PM

McDave wrote: »

"Death spiral"! Give it a rest.

So you haven't got an argument against that statement so? Fair enough.

McDave wrote: »

As for Greece, it's not the job of the general Euro taxpayer to dig out Greek corruption. Greece signed up to the single currency. It's their responsibility to get their economy into shape. That's not "punishment". It's requiring sovereign people and states to live up to their promises.

If Greeks decide it's not worth the candle, they can exit. But watch closely. They won't. Why? Because deep down they probably judge sticking with the EZ programme is their best shot of developing a modern functioning state.

No taxpayers need to dig out Greece, that argument is assuming lots of specific policy options.

Again, your advocating totally unnecessary collective punishment on Greek people, for the failures of their past governments.

This is another example of why currencies without a federal government are a bad idea: Europe should be all in this together (federal government), not sociopathically destroying a nation, because it might disadvantage other regions (which creates a political imbalance, where more powerful nations can make the crisis fall harder on smaller countries).

The US doesn't burn states like that, that's just a bad way to run a currency. That's why you don't do half-measures; in a full sovereign currency with a federal government, that kind of moral argument would be unjustifiable, so it creates completely warped political/economic conditions.

KyussBishop · 25-06-2013 08:34PM

McDave wrote: »

Your point being precisely what?

You said:
"It's not a proven fact that you need a state-like entity to run a currency."
I said "I never said you need one, I said it's an issue of sovereignty", i.e. your interpretation of what I said was wrong.

KyussBishop · 25-06-2013 08:41PM

McDave wrote: »

How, precisely? Using what "mainstream" theory?

I'm not sure this is the right thread for it, but if a country has control over its own currency, a government can use money creation to fund a temporary employment program to soak up all idle workers, and can use that to boost economic output (thus ameliorating any inflation - other policy tools would be used to dampen areas of the economy that inflate too), which boost private industry back up (so private industry takes back all the workers eventually).

The currency exchange rate would be allowed to float, and its valuation would depend more on the health of other countries economies (there is no point decimating output in your own economy, in order to keep valuation the same, just because other countries are).

This is not mainstream theory; mainstream 'neoclassical' theory, which dominates politics at the moment, gets a lot of fundamental macroeconomics wrong, whereas this describes a policy which is based on a better understanding of the monetary system, than mainstream economics has.

Almost all the arguments against this, turn out to be political ones; asserting without backing, what government will do, not challenging the actual theory.

View · 25-06-2013 08:56PM

KyussBishop wrote: »

Your argument as to politicians not choosing alternative policies, is entirely political (does not relate to the economics at all); politicians choices here are not a surprise, since economics in academia and politics, is still dominated by fundamentally flawed theory.

So in other words no member state (of the EU) is going to follow your ideal "correct" economic policies and that applies irrespective of the currency that are using?

If so why does it matter?

You don't seriously believe that the electorate in Ireland is going to embrace un-orthodox radical economics, do you?

View · 25-06-2013 09:02PM

KyussBishop wrote: »

The US doesn't burn states like that, that's just a bad way to run a currency.

In the US it is left to each state to fix its budgetary problems. It isn't a "US" issue at all if a US State messes up its budget. In fact 47 of them needed to raise taxes and cut services to balance their budgets. Does that sound familiar?

Scofflaw · 25-06-2013 10:17PM

KyussBishop wrote: »

The currency, monetary policy and fiscal policy, are all inseparable; it's all politics, there is no real divide between economics and politics.

Austerity is not 'the plan' really, it's just the default state of what happens when you don't have any way to agree to a mutual plan; it's far too easy for powerful countries to deadlock the political process, so smaller countries get hammered by austerity.

The political system used with the currency, is an inseparably important part of the currency itself; you don't want a shared currency, where the political system enmeshed with it, leads to worsening crisis in a huge way like this.

Oh, come on, that's really nonsense. Austerity isn't a "default position", but an active policy of cutting spending and raising taxes. Left to themselves, budget deficits don't change.

Your reading of this is totally at odds with reality, which makes your proposed better alternatives rather suspect, I'm afraid.

cordially,
Scofflaw

KyussBishop · 26-06-2013 07:58AM

View wrote: »

So in other words no member state (of the EU) is going to follow your ideal "correct" economic policies and that applies irrespective of the currency that are using?

If so why does it matter?

You don't seriously believe that the electorate in Ireland is going to embrace un-orthodox radical economics, do you?

It's a problem of bad economics and a currency that blocks reformed policies; the EU doesn't strictly need those policies either (it's just one option), as if it were properly federalized, it can use centralized debts at low interest (which is a very good intermediate step, even if not federalized, before initiating the reforms I speak of).

There's nothing radical about the economics I present, it simply describes the monetary system in a more accurate way (most of it deriving from endogenous money); very incredibly important stuff to get right for any macroeconomic theory, and almost all of them get it wrong.

There's nothing radical about wanting economic theory, to fit the reality of how economies (specifically the monetary system) works.

KyussBishop · 26-06-2013 07:59AM

View wrote: »

In the US it is left to each state to fix its budgetary problems. It isn't a "US" issue at all if a US State messes up its budget. In fact 47 of them needed to raise taxes and cut services to balance their budgets. Does that sound familiar?

The US has a centralized federal budget, so no, that is a completely different situation to Europe, where each 'state' has to fend for itself, while it has policy options locked out (due to loss of monetary sovereignty), that could resolve the crisis.

KyussBishop · 26-06-2013 08:11AM

Scofflaw wrote: »

Oh, come on, that's really nonsense. Austerity isn't a "default position", but an active policy of cutting spending and raising taxes. Left to themselves, budget deficits don't change.

Your reading of this is totally at odds with reality, which makes your proposed better alternatives rather suspect, I'm afraid.

cordially,
Scofflaw

You're presenting a false choice. Countries can't run deficits forever in the current system, because they get hammered by high interest rates (unless they are in a relatively favourable position economically), and the countries that are stuck with that kind of high-interest debt choice, can't exactly force the use of lower-interest centralized debt, or force monetary reform, within the central EU (because more powerful nations will overpower them, and its very easy for such a deadlock to happen with the current EU configuration).

This leaves only austerity, to try and curb the increasing debt. Trying to present that as a policy-decision/choice, which is voluntarily engaged in, doesn't really ring true because of the political and economic restrictions countries are under (which are locked-in by the Euro, where they would otherwise not be); granted though, this is not all the Euro, it is in large part a problem of bad economic theory as well.

If you're not willing to debate the alternatives, that makes your criticisms of them unbacked; it's really just a repetition of "I'm unconvinced", which is fair enough, but you can't really be open to convincing if not willing to debate it (and my arguments on it here, are a lot more refined than previous threads where I was (and still am, to an extent) learning it in more depth while debating it).

Scofflaw · 26-06-2013 08:51AM

KyussBishop wrote: »

You're presenting a false choice. Countries can't run deficits forever in the current system, because they get hammered by high interest rates (unless they are in a relatively favourable position economically), and the countries that are stuck with that kind of high-interest debt choice, can't exactly force the use of lower-interest centralized debt, or force monetary reform, within the central EU (because more powerful nations will overpower them, and its very easy for such a deadlock to happen with the current EU configuration).

This leaves only austerity, to try and curb the increasing debt. Trying to present that as a policy-decision/choice, which is voluntarily engaged in, doesn't really ring true because of the political and economic restrictions countries are under (which are locked-in by the Euro, where they would otherwise not be); granted though, this is not all the Euro, it is in large part a problem of bad economic theory as well.

If you're not willing to debate the alternatives, that makes your criticisms of them unbacked; it's really just a repetition of "I'm unconvinced", which is fair enough, but you can't really be open to convincing if not willing to debate it (and my arguments on it here, are a lot more refined than previous threads where I was (and still am, to an extent) learning it in more depth while debating it).

That countries which might prefer something other than austerity have to undertake austerity because they cannot get joint agreement on an alternative to austerity does not make austerity a matter of default choice. Austerity is the only agreed joint policy, and the inability of some countries to change that does not make it anything other than the agreed joint policy.

My reluctance to debate alternatives at the moment stems from the fact that the debate has to be entirely theoretical, and economic theory and practice match less than in almost any other field.

cordially,
Scofflaw

KyussBishop · 27-06-2013 07:22PM

Scofflaw wrote: »

That countries which might prefer something other than austerity have to undertake austerity because they cannot get joint agreement on an alternative to austerity does not make austerity a matter of default choice. Austerity is the only agreed joint policy, and the inability of some countries to change that does not make it anything other than the agreed joint policy.

My reluctance to debate alternatives at the moment stems from the fact that the debate has to be entirely theoretical, and economic theory and practice match less than in almost any other field.

cordially,
Scofflaw

You present it as a mutual agreement, but most countries have no choice but to agree (one of the biggest motivators of agreeing to the austerity treaty, was fear of instability and/or rejected access to bailouts); it's a false choice because more powerful countries can block adoption of anything other than austerity.

That's a situation where there was significant pressure to be pushed, and locked by legal requirements, into austerity; now there are no other choices, because it's just not politically possible to change things now.

There's no theory to the core parts of the monetary reform debate really: Endogenous money can be confirmed, just by looking at how the accounting works between central banks and banks (which immediately shows the falsehood of practically all mainstream economic theory, making it not just wrong, but dangerous to hang onto - as we are seeing).

Most of the rest stems from there; a large part of it is just accounting (i.e. mathematically true), and incorporating other descriptions of how the economy works, that better describe/fit reality/evidence than current mainstream theory.

All the arguments usually presented against it aren't even theoretical, just political; opponents usually do their best to avoid engaging in argument of actual economics on the subject.

Scofflaw · 28-06-2013 01:22AM

KyussBishop wrote: »

You present it as a mutual agreement, but most countries have no choice but to agree (one of the biggest motivators of agreeing to the austerity treaty, was fear of instability and/or rejected access to bailouts); it's a false choice because more powerful countries can block adoption of anything other than austerity.

That's a situation where there was significant pressure to be pushed, and locked by legal requirements, into austerity; now there are no other choices, because it's just not politically possible to change things now.

I don't present it as mutual and unanimous agreement, only as the only agreed joint policy. It's irrelevant whether countries agree to it because they support it, or accept it because they know they need the money of those countries that support it - either way, it's the only agreed joint policy.

KyussBishop wrote: »

There's no theory to the core parts of the monetary reform debate really: Endogenous money can be confirmed, just by looking at how the accounting works between central banks and banks (which immediately shows the falsehood of practically all mainstream economic theory, making it not just wrong, but dangerous to hang onto - as we are seeing).

Most of the rest stems from there; a large part of it is just accounting (i.e. mathematically true), and incorporating other descriptions of how the economy works, that better describe/fit reality/evidence than current mainstream theory.

All the arguments usually presented against it aren't even theoretical, just political; opponents usually do their best to avoid engaging in argument of actual economics on the subject.

See, there's the sort of thing I mean - "incorporating other descriptions of how the economy works, that better describe/fit reality/evidence than current mainstream theory". Better fit according to whom? Why, proponents of the alternative, of course - which naturally makes sense, since anyone who can see that they fit better will necessarily become a proponent of the alternative.

It's a merry-go-round, and luckily I don't have to get on it.

cordially,
Scofflaw

KyussBishop · 28-06-2013 02:23PM

Scofflaw wrote: »

I don't present it as mutual and unanimous agreement, only as the only agreed joint policy. It's irrelevant whether countries agree to it because they support it, or accept it because they know they need the money of those countries that support it - either way, it's the only agreed joint policy.

It is relevant when that is the only available choice due to the political circumstances (and economic - short of self-destruction), as that makes it a false choice; something they can't disagree with.

Anyway, going back to the original point which was lost a bit; my main position on the Euro itself being flawed, is that a currency is inseparably enmeshed with the politics of Europe (so whether it was a good idea or not, equally depends on the political setup), and that it was a very large mistake bound to failure, by not implementing it with a federal Europe that could exercise the monetary/fiscal policy options removed from member states, upon the creation of the Euro.

I view those as critical issues of monetary sovereignty (where if member states don't have that sovereignty, the EU as a whole should with a federal government, rather than the easily deadlocked system we have now), which are essential for being able to provide economic stability when big enough crisis hits.

Scofflaw wrote: »

See, there's the sort of thing I mean - "incorporating other descriptions of how the economy works, that better describe/fit reality/evidence than current mainstream theory". Better fit according to whom? Why, proponents of the alternative, of course - which naturally makes sense, since anyone who can see that they fit better will necessarily become a proponent of the alternative.

It's a merry-go-round, and luckily I don't have to get on it.

According to anyone who has looked at how the actual accounting works; there are some good descriptions here, here (a bit covering a more specific aspect of it here), and some more prominent backers here

None of that is theory, it is fact, it is how things actually work with the monetary system at the moment (any theory which gets this wrong, is itself wrong in a fundamental way); much of it is a matter of mathematical/accounting principles (mixed in with some practical issues, such as not wanting the entire banking system to collapse by refusing to shore up reserves), nothing more.

You don't need to agree with it, but if you adopt views that are contrary to it, you get a fundamental part of macroeconomics wrong; the evidence showing that this is how it works, is all there on banks and central banks balance sheets and in their policies.

If you don't agree with it though, I'd heavily encourage reading up on endogenous money, even if not looking to debate it; it completely changes both economics and politics in an enormous way (which is not completely obvious even after initially understanding it - it has enormous wide-ranging knock on effects).

McDave · 28-06-2013 06:44PM

KyussBishop wrote: »

You said:
"It's not a proven fact that you need a state-like entity to run a currency."
I said "I never said you need one, I said it's an issue of sovereignty", i.e. your interpretation of what I said was wrong.

You're the one raising the 'sovereignty' criterion. You need to express yourself a bit more accurately as to what that actually *means*, rather than throwing out half-baked received wisdoms.

Why are the British so anti Europe?

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