[Non-US] News That Makes You laugh/cry/neither...

[maglag]

Germany really is like a college libertarian. Driving around daddy's car and spending daddy's money and talking about how self made he is and how the less fortunate just don't have the work ethic he has.

Just today I saw a fascinating photo from the London Conference of 1953, where Greece's Minister of Finance signed off on forgiving half of Germany's debt. Like Germany isn't doing for anyone else.

Well, this is the same bunch of families that in the span of a single generation decided that starting a war in all fronts and then fighting for years non-stop in a war of attriction until their country was in ruins would be such a lovely idea twice. (that there was a madman as their leader is secondary, the people still followed said madman out of their own will)

Germany does forget, but Germany does not forgive it seems.

[Shatner]

There was an interesting tidbit by Krugman:

In advance of the referendum, the European Central Bank cut off their access to additional funds, helping to precipitate panic and force the government to impose a bank holiday and capital controls. The central bank now faces an awkward choice: if it resumes normal financing it will as much as admit that the previous freeze was political, but if it doesn’t it will effectively force Greece into introducing a new currency.

Now that the vote came in as "no", what does the ECB do?

[Aharon]

Martin Schulz is actually a German politician. He's part of Germany's "center left," but that still means he supports the unworkable German financial models - he just thinks that unions should have a bigger seat at the table that discusses what the fuck we do when the government stops managing the economy.

The Germans never did figure out that their entire "government hands off" policies towards currency only ever worked because they were benefiting from a bigger government that was very activist. Like how they still haven't seemed to understand that they are able to piss people off with a tiny army only because other countries are footing the bill for big militaries and guaranteeing their borders.

Germany really is like a college libertarian. Driving around daddy's car and spending daddy's money and talking about how self made he is and how the less fortunate just don't have the work ethic he has.

-Username17

Germany's army spending is low in % of its GDP, but it's still the 9th largest military spender (https://en.wikipedia.org/wiki/List_of_c ... penditures).

[vagrant]

There was an interesting tidbit by Krugman:

In advance of the referendum, the European Central Bank cut off their access to additional funds, helping to precipitate panic and force the government to impose a bank holiday and capital controls. The central bank now faces an awkward choice: if it resumes normal financing it will as much as admit that the previous freeze was political, but if it doesn’t it will effectively force Greece into introducing a new currency.

Now that the vote came in as "no", what does the ECB do?

The optimal choice for the ECB would be to just fucking fund the country, but because they won't, Greek euros will in effect become a secondary currency.

[Whipstitch]

Being top 10 isn't the same thing as having a seat at the big boy table given that the drop offs are pretty stark. Germany may "only" spend 10-15 billion less a year than France, but apparently when you spend that much more money you get to buy aircraft carriers and maintain your air force instead of being unable to meet your NATO commitments. Germany spends enough on their army that invading them would be a bitch but when it comes to force projection they're dependent on other countries.

[Meikle641]

It's a bit of a mess, because the taxis in France (especially in Paris) are a bit like a mafia. The boss of the biggest taxi company is friend with people in high places and owns most of the taxi licenses (which were supposed to be plenty and free until the taxi decided to create a secondary market for them and did all they could to prevent new licenses to be issued to raise the value of the existing ones).
And they act like a mafia up to the reaction to competition.

That's how it works in most places with Taxi licenses. Ones in NYC and Toronto go for hundreds of thousands of dollars. No way an independent driver could get a plate for themself.

[PhoneLobster]

Now that the vote came in as "no", what does the ECB do?

My prediction is they will not resume funding.

Not because of any attempt to pretend it wasn't political.

But because, even now, they still have an "all whip no carrot" strategy for negotiating with Greece, and actually still believe that Greece morally deserves punishment, and that it's government and people will bow to the will of the austerity overlords if they kick them enough.

I mean fuck, the referendum was a landslide, the greek's lead negotiator resigned as a freebie for the fucktards who were all "oooh we are so petty we want him out or we won't make a deal that will end vast human suffering because he is a poo poo face", and all of that registered so far as little more than a moment of faltering and some vaguely conciliatory comments by secondary bit players. Merkel is STILL all, "not only aren't we talking about debt relief, there isn't even going to be a new deal offered PERIOD" and in the end I'm pretty sure that's what the idiot aristocrats are going to go with.

Nothing has changed, the democratic will of the Greek people will be ignored, if anything in fact it will be seen by the aristocrats as all the more reason they must keep their ship on a direct course for ice berg city, because they can't show the sort of weakness of bowing to democracy, they must exert their macho dominance power as the true overlords at all costs! They must always be right and never be wrong, even at the cost of being wrong and anti-democratic and driving the Greek/EU/World economy into a wall, repeatedly, in front of everyone, while not wearing any pants.

[Aharon]

Being top 10 isn't the same thing as having a seat at the big boy table given that the drop offs are pretty stark. Germany may "only" spend 10-15 billion less a year than France, but apparently when you spend that much more money you get to buy aircraft carriers and maintain your air force instead of being unable to meet your NATO commitments. Germany spends enough on their army that invading them would be a bitch but when it comes to force projection they're dependent on other countries.

Well, that might also be a relic of German history. Up to 1990, it was probably not in the interest of either the NATO nor the Warsaw pact for their parts of Germany to develop force projection capabilities. Since then, things have changed a bit, but given the current political climate, I don't think that extensive investments in the Army would aid Germany's position within Europe at all - force projection capability also means the capability of starting wars, and when even the use of economic pressure results in Third Reich and Hitler comparisons, I don't want to know what the actual possibility of military pressure would result in.

[sandmann]

Germany spends enough on their army that invading them would be a bitch but when it comes to force projection they're dependent on other countries.

That's actually not that easy to say. Germany has traditionally given no fucks about their navy, for ... obvious reasons. If you look at the numbers of Great Britain and Germany, GB spends about twice as much money (absolut numbers). But while the British Army has only 76% more tanks than the Bundeswehr, the Royal Navy has almost as much patrol and minesweeper ships than we HAVE ships (37 vs. 41). And with the "Amphibious Warfare Ships" they have a class of ship that we even have no real NAME for. And the new german army reform is basically a list of "Moar Tanks".
So the german army is kind of capable when it comes to projecting force towards Russia or Ukraine, but is absolutly unable to project force across the sea or beyond european soil. And since the german public has a raging hate boner for army operations outside of germany, they are quite happy with that setup.

[maglag]

Great Britain is a freaking group of islands, of course they're gonna invest more in their navy.

Germany has a lot more land border than water border. It would be completely pointless for them to be able to "project force" through the sea if the russians can just directly tank rush them. Again.

France has a much bigger coast area, and their southern frontier with Spain is a natural mountain barrier, they have a lot of better reasons to keep an aircraft carrier.

Is a navy better for projecting force across the world? Yes. But Germany's starting location still sucks balls for that kind of late game strategy.

[sandmann]

@maglag: So, what you are saying is that Germany, unlike most big countrys like USA, GB and France, who project force through the sea, is better at projecting force over land ... aka exactly what I said.

There is a difference between "they cannot project force" and "they cannot project force over the sea".

[DSMatticus]

and when even the use of economic pressure results in Third Reich and Hitler comparisons

I see more comparisons to British colonialism, to be honest - which is fairly accurate. "Fuck your democratic government, fuck your people's suffering, you will do what we say or we will shoot you collapse your banking system."

It would help if Germany could manage to engage in international politics without ruining huge swathes of Europe every couple of decades. Automobiles? Bullshit, Germany's largest export is crippling devastation.

Edit: Also, Germany's "Austerity! Rah rah rah!" coalition is suddenly very full of dissenting voices. I suppose we'll know soon enough if they mean it or if they're just posturing to save face down the line when shit goes south.

[Longes]

According to OSCE report Members of the Right Sector has their own orders and dont fall under the command of the Ukrainian Armed Forces.

In Avdiivka (government-controlled, 15km north-west of Donetsk), the SMM was stopped by armed members of the Right Sector, who did not allow it to proceed further to a JCCC observation post*. Despite calls to the Ukrainian Armed Forces Major General, head of the Ukrainian side to the JCCC, and to the command of the Anti-Terrorism Operation (ATO), the armed men continued refusing access. They insisted that they had their own orders and did not fall under the command of the Ukrainian Armed Forces.

[TiaC]

So, what sort of reforms should Greece enact? Austerity is bullshit, but don't they still have a pension crisis?

[PhoneLobster]

I don't know about Greece, but as a generally rule anytime you hear someone say "pension crisis" you can fairly safely assume they are lying as part of some plan to sell austerity/cuts/utterly destroying the entire pension system under the guise of concern trolling "pension reform" in order to "save it".

I suspect the only real pension crisis Greece has right now is more to do with the whole "ECB and general economic chaos crashing their whole economy so no one can pay anyone anything, including pensioners for whom that is a very big deal really quickly".

edit: As for the reforms they need to make...

They need to end the Austerity and move to a stimulatory policy instead. IE exactly the opposite of everything they have been made to do and which is constantly forced on them. Yes a stimulatory policy IS a reform, contrary to the insanity of the austerity crowd for whom the most insane disproved ideological policies are somehow brand named "reforms" to make them sound moral and necessary, and nothing else is allowed to be.

They need to devalue their currency to lessen their debt and stimulate exports, promote some beneficial inflation and a bunch of other good things. Since no one wants to do that with the Euro that DOES mean leaving the Euro and making their own currency.

There are plenty of other things they COULD do, tax enforcement, anti-corruption, etc... but EVERYONE could always do those sorts of things, and in the end there are only really TWO big boogie men that turned the Greek "debt crisis" from a debt/policy situation that was basically business as usual for a modern western government, into one of the worlds worst recessions for a modern western style nation.

And that was, austerity, and being tied to a foreign currency managed AGAINST their own interests.

Worse still, the second was used as a cudgel to FORCE the first (and other crap) onto them policy wise.

The story of Grisis is of the Euro becoming such a ridiculous policy cudgel that it ended up turning a nation into a mere state within an insane undemocratic unaccountable union run by insane banksters who mostly just want to loot Greece and inflict their neo-liberal wank fantasies on it against all sane reason and couldn't care less if it burns to the ground in the process.

The "needed reforms" Greece faces are "escape from that".

[DSMatticus]

Rumors of Greek insolvency have been greatly exaggerated. It's just another part of the narrative that is meant to shift blame for the failed austerity program from its architects to its victims. The problem was minor to moderate at the outset, and only achieved its modern catastrophic incarnation through the ever-so-helpful intervention of the IMF and EU.

The actual problem is that Greece is comically inept at collecting taxes. The troika insists on increasing consumption taxes, particularly for essentials like electricity and medicine, because they are literally demonic pieces of shit wearing people-skin (admit it, it's surprisingly believable) who see rising homelessness and falling access to healthcare as a good time to increase the cost of owning a home and going to the hospital. Syriza insists on cracking down on businesses evading taxes, which is completely unacceptable to the neoliberal coalition that currently rules the EU, because their sole raison d'etre is the redistribution of wealth upward always and forever. Syriza is right, of course - if the EU is going to insist on tax reforms as a condition for debt haircuts, then those tax reforms will be less harmful to growth the further away they are from consumers (it's a demand crisis, after all).

In a perfect world, you would solve one problem, then the other - achieve full employment and stable growth, then worry about the debt. But Europe has, from day one, really only offered Greece the opportunity to destroy their own country in exchange for the "privilege" of making never-ending interest payments on an unsustainable mountain of debt and redistributing wealth upwards to our glorious capitalist overlords.

[Username17]

So, what sort of reforms should Greece enact? Austerity is bullshit, but don't they still have a pension crisis?

As DM said, Greece needs to get better at collecting taxes. That doesn't even necessarily mean that they need to raise taxes, they just need to get better at collecting the taxes they have. All this shit about raising taxes on poor people and privatizing ports and shit that the Troika keeps demanding is basically pointless. The Troika is demanding the privatization of ports because they want to buy Greek real estate at firesale prices, and they are demanding the raising of taxes on poor people because they want to increase the suffering of the common man.

Greece has a long history of corruption and mendacity of their law enforcement. Remember they were a fascist dictatorship until 1974. And contrary to claims by hardliners, fascist strongmen do not actually promote fair and effective law enforcement and contracting. Like at all. Greece needs to increase their spending on tax collection, and also train a new generation of enforcers. But obviously that sort of thing is going to take a long time. Asking how many reforms Syriza has managed to achieve since their election is nothing less than concern trolling.

Also, Greece should find some industries to invest in. But again, you don't create specialist industries overnight or even in a year. These are plans to advance the economy five or six years down the line.

What reform Greece should have done was to declare bankruptcy in 2010, and get a bridging loan from the IMF while they tackled corruption and made much more modest cuts to achieve financial stability. Then the ECB could bail out whatever private banks in Germany and France it felt needed bailing out directly. Having the government take on all the bad debt was as bad an idea in the Greek 2010 settlement as it was in the Ireland settlement.

-Username17

[Longes]

Fun correlation:

From 2004 to 2015 all greek PMs got their education in US:

2004-2009. Kostas Karamanlis. Tuft's University.
2009-2011. Georgios Papandreou. Harvard.
2011-2012. Lucas Papademos. MIT.
2012-2015. Antonis Samaras. Harvard.

1996-2004. Kostas Simitis. Law in University of Marburg (Germany) and Economy in London School of Economics.
1993-1996. Andreas Papandreou. Harvard.

Tsipras studied in Greece.

[maglag]

But of course. Those places are pretty much the greatest to make connections to help you get elected.

Not so much for actually learning economics or even basic math it seems, but who cares about such minor details.

The actual problem is that Greece is comically inept at collecting taxes.

Yeah, I remember reading some local news on how about half of the money in Greece trades hands in black market equivalents, with no receipts involved and thus the government not getting a single cent out of it.

The troika insists on increasing consumption taxes, particularly for essentials like electricity and medicine, because they are literally demonic pieces of shit wearing people-skin (admit it, it's surprisingly believable)

Meh, demons are something people made up because they refuse to admit humans can and will be massive jerks given the chance, and that many humans also greatly enjoy seeing their own kind suffering. There's a reason they say "power corrupts".

I fully believe the troika are 100% human beings. But I understand why other people would want to demonize them.

[erik]

*pats maglag on the head*
Yes. Because clearly DSM wasn't using hyperbole and believes in demons.

Anywho, I'm surprised China isn't more in the news. A huge economy whose markets have been tanking pretty hard as a significant investment bubble bursts. I imagine it will get more play in the news over the next week or two, but damn if it doesn't sound scarier than Greece's woes.

[maglag]

*pats maglag on the head*
Yes. Because clearly DSM wasn't using hyperbole and believes in demons.

Just pointing out that it's somehow amusing how people need to create fictional entities to represent human traits.

Anywho, I'm surprised China isn't more in the news. A huge economy whose markets have been tanking pretty hard as a significant investment bubble bursts. I imagine it will get more play in the news over the next week or two, but damn if it doesn't sound scarier than Greece's woes.

People have been saying China's economy has been "tanking" for over a decade now, almost two. They're old news, probably old enough to drink on my country.

What's really happening is that China couldn't keep up their super growth rates forever. It simply wasn't possible. Growth rates can't keep growing forever. Eventually they drop down.

But they're still pretty good with lots of money going around. China's still the 2nd biggest spender in military toys in the world so weapon manufacturers will keep looking for them, they have the most soldiers, they have a space program and shit.

Most other countries can only wish their economy was "tanking" like China's economy has been for the last decade.

Meanwhile in Greece you can't even take your money out of the bank.

[erik]

Watch yourself be very wrong about China this next week. Start drafting your concession.

I said the markets are tanking not the entire economy. Nice strawman attempt. The economy will take a hit though obviously.

There's not a lot of money going around as their markets are being closed. You say Greeks can't get their money out of the bank (as though the last five years wasn't ample time needed to get the money out at least of what little remained). I say in China people were borrowing to invest more and now cannot sell to meet margin calls. China's response to the concerns of a bubble a few months ago was to lower margin rates. Holy shit that's bad and that's why things are being compared to the 29 crash. The only sunshine I see is that they have grown more quickly than the U.S. in the lead up to 1929

[DSMatticus]

China is following a very specific recipe for success, and they are not the first developing Asian country to follow this recipe to disastrous consequences - merely the largest. It's really very simple. China had a massive, under-utilized workforce of peasants living in the boonies. By promising to transfer more and more of these under-utilized peasants to the cities to work as cheap slave labor in manufacturing, they were able to guarantee foreign investors cheap opportunities with high returns.

Notice how I said 'China had' - the boonies are now basically empty of transferrable labor. China can no longer guarantee foreign investors miracle deals - which means investment will drop rather abruptly to sync with the rate of population growth (as opposed to the rate of population growth + the rate of urbanization), because fucking no one is going to continue investing in China if it means competing over Chinese labor. Chinese labor is cheap, that's the whole fucking point.

When the capital inflows dry up, that's going to represent a catastrophically huge loss in demand. Investment money which was previously being used to build factories and hire workers will disappear almost over night, and lots of resources and workers that were previously being put to use will be left idle. People were talking about how China needed to prepare for this eventuality by creating its own domestic consumer class when I was in fucking highschool. Well, the crisis here, the bells are tolling; where's China's middle class?

This is going to hurt. The economy almost certainly will tank. Demand is going to plummet when the investment stops, and China has made exactly zero preparations to offset the loss of investment with anything else, because the reality is the Chinese government doesn't really know what the fuck it's doing and has just been lucky enough to preside over a massive laborforce in dire need of industrialization, and industrializing is practically free growth right up until you run out of things to industrialize.

[Longes]

European Commission decides to loan 600 mln euros to Ukraine

[maglag]

Watch yourself be very wrong about China this next week. Start drafting your concession.

Until the end of next week? Challenge accepted!

Because China's middle class has actually been growing pretty fast.

And that's not mentioning that they've been investing pretty hard everywhere in the world they can, including my backwater country where they're building mandarin schools.

China's government hasn't been sitting in their asses just taking money from foreign investors, they've developed their country a lot and are also spreading their spheres of power.