TAN, or tax anticipation notes, would way be a for Greece to give itself more fiscal spending wriggle room without violating Eurozone rules. That will likely be necessary if Monday’s meeting in Brussels results in no extension of the current Eurozone bailout.
Read more...Just as sumer is icumen in, so to are budget fights. And that means another opportunity to talk up the platinum coin as a way around budgetary tactics designed to inflict austerity on ordinary Americans.
Read more...Will we all end up living in shipping containers, and won’t that involve substantial demand destruction?
Read more...Much research about the Great Recession in the US has focused on the boom-bust in housing wealth and spending of the middle class. This column argues that a large role was actually played by the rich. The savings rate of the rich went through a similar cycle as that of the middle class with rising wealth first stimulating their consumption and falling wealth restraining it. Most importantly, the wealth of the rich has become so large and volatile that wealth effects on their consumption could impact the whole economy.
Read more...Get a cup of coffee. This is a fabulous, readable but nevertheless carefully argued and therefore long post on the drivers of the Eurzone crisis and what the parameters for a sensible resolutions are.
Read more...Even by the standards of bank thuggishness, the move by the ECB against Greece last night was a stunner. Americans have become used to banks taking houses under dubious pretexts when both the investors and borrowers would do better with a writedown. But to see the ECB try take a country is another matter entirely. As one seasoned pro said, “If anyone had tried something like this against a country with a decent sized military, the tanks would be rolling.”
Read more...We’ve cautioned readers that Greece is in a very weak bargaining position relative to its financial overlords in the Troika. As much as Finance Minister Yanis Varoufakis is making sound, logical arguments and presenting proposals that if anything are too accommodating, despite initial cool reactions, many of Greece’s soi disant partners are diehard neoliberals and/or are politically constrained. Varoufakis is approaching them as if they can deal in good faith, when their idea of “good faith” comes from a punitive parallel universe.
Three important meetings today will provide a better sense of whether Greece is gaining any political ground in its uphill battle to roll back austerity.
Read more...Monday morning I encountered a word in a number of newspapers that I have not read regarding the European Union for years: Hope. The occasion was the election in Greece. I suddenly became aware of how long much of this continent has been living in what appears to be a never ending-crisis.
Read more...By Lambert Strether of Corrente. In last week’s State of the Union speech, Obama (again) pressed Congress to give him “fast track” negotiating authority (Trade Promotion Authority): I’m asking both parties to give me trade promotion authority to protect American workers, with strong new trade deals from Asia to Europe that aren’t just free, but […]
Read more...While the election results in Greece have sent shockwaves through European technocratic elites and have rattled investors, it is not clear how successful Syriza will be in getting big enough changes implemented in Eurozone policies and its own bailout terms to end the humanitarian crisis, rather than just create the sort of bounce off the bottom growth that analysts like to depict as progress. Indeed, once you walk though the likely bargaining positions of the various parties, there is little reason to be optimistic on Syriza’s behalf.
Read more...The European Central Bank has just launched full-fledged quantitative easing. This column argues that the ECB’s watershed decision highlights both the strengths and the persistent vulnerabilities of the Eurozone. The limited-risk-sharing provision flags the need for greater fiscal union; and governments should use the respite that QE provides to launch much-needed structural reforms.
That’s their story and they’re sticking to it.
Read more...We’re having two posts on the Greek elections tonight, since the media accounts are so slanted as to merit discussion. The notion that a democratically elected government would put broad social interest over continued, self-destructive sacrifices to financiers and their allies in European governments is so threatening that a large swathe of media outlets seem […]
Read more...We’ve been writing about abuses of power and process at the Congressional Budget Office and will be ramping up our coverage further now that ranking member Bernie Sanders has a new team at the Budget Committee, which among other things supervises the CBO. And the CBO is going to be the subject of a major political fight over how it prepares its estimates of the economic and fiscal impact of pending legislation. As we’ll discuss below, Republicans plan to mandate that the CBO use something called dynamic scoring, which has the effect of making tax cuts look far more beneficial to the economy than they are, by effectively claiming that tax cuts boost growth, which then boosts tax receipts. It would effectively institutionalize the Laffer curve, which has been widely and repeatedly debunked. As troubling as this development is, there’s already a lot not to like in how the CBO operates.
Read more...Most readers are skeptical of Abenomics, and for good reason. This post gives an accessible discussion of why it has not worked.
Read more...Yves here. MMT, or Modern Monetary Theory, is in the process of becoming vastly more visible by virtue of leading MMT advocate, Stephanie Kelton, becoming Chief Economist on the Senate Budget Committee on behalf of ranking member Bernie Sanders. And that means, as this post demonstrates, that MMT has gone through the “first they ignore you, then they ridicule you” stages and is now in the “then then fight you” phase. And one of the chief strategies of MMT opponents is to misrepresent it.
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