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Thread: Yanis Varoufakis - New Bottle, Old Keynesian Wine

  1. #31
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    Default Re: Yanis Varoufakis - New Bottle, Old Keynesian Wine

    Quote Originally Posted by fluffybiscuits View Post
    Where does that leave Greece now?
    the words ****'s creek, paddle and without spring to mind
    Politics is the gentle art of getting votes from the poor and campaign funds from the rich, by promising to protect each from the other. ~Oscar Ameringer

  2. #32
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    Default Re: Yanis Varoufakis - New Bottle, Old Keynesian Wine

    Yanis was interviewed on RT last night. The interview is available at the below link.

    http://rt.com/news/greece-bond-repayment-imf-117/
    Politics is the gentle art of getting votes from the poor and campaign funds from the rich, by promising to protect each from the other. ~Oscar Ameringer

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    Default Re: Yanis Varoufakis - New Bottle, Old Keynesian Wine

    A blogpost by Varoufakis that acknowledges the profound structural failings of the EU, in having no capacity to deal with the internal strains between richer and less developed countries.

    http://yanisvaroufakis.eu/2012/02/05...sche-welle-de/

    But while he rightly says that credit bubbles contributed to the crisis, he still invokes Keynes.

    He is now saying that Greece should suspend all debt repayment and balance its books - not far from Morgan Kelly's suggestion for Ireland.

    If we all did it of course there would be spectacular collapses in the finance sector.

    Could they be overcome by equally spectacular ECB cash printing exercises ?

    It certainly is not an easy recipe for stability.

  4. #34
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    Default Re: Yanis Varoufakis - New Bottle, Old Keynesian Wine

    Quote Originally Posted by C. Flower View Post
    A blogpost by Varoufakis that acknowledges the profound structural failings of the EU, in having no capacity to deal with the internal strains between richer and less developed countries.

    http://yanisvaroufakis.eu/2012/02/05...sche-welle-de/

    But while he rightly says that credit bubbles contributed to the crisis, he still invokes Keynes.

    He is now saying that Greece should suspend all debt repayment and balance its books - not far from Morgan Kelly's suggestion for Ireland.

    If we all did it of course there would be spectacular collapses in the finance sector.

    Could they be overcome by equally spectacular ECB cash printing exercises ?

    It certainly is not an easy recipe for stability.
    An interesting perspective from Mr. Varoufakis, even if it is a reformist one. The comparison with Versailles and its imposition of impossibilities on the beaten German state is instructive, especially when you compare the sovereigntist rhetoric against 'traitors' of today with the rhetoric of that time in Germany referring to 'November Criminals' and the Dolchstosslegende. And we know what that rhetoric spawned...
    "It is we the workers who built these palaces and cities here in Spain and in America and everywhere. We, the workers, can build others to take their place. And better ones! We are not in the least afraid of ruins. We are going to inherit the earth; there is not the slightest doubt about that. The bourgeoisie might blast and ruin its own world before it leaves the stage of history. We carry a new world here, in our hearts."
    — Buenaventura Durruti

  5. #35
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    Default Re: Yanis Varoufakis - New Bottle, Old Keynesian Wine

    http://yanisvaroufakis.eu/2012/11/05...am-for-greece/

    Rightly at this stage, Varoufakis is looking for a halt to the cruel insanity of current policy towards Greece. He is proposing various creative measures to keep the Greek population standing. This is avoiding the point that the cruelty and insanity is quite deliberate. The coming German election is not likely to help.

    Varoufakis says that Greece should balance it's current budget and should then default on all monies due to the ECB, chancing it that the ECB will continue to provide liquidity to Greek banks.

    So, once it has achieved a primary surplus on the basis of 2.5 billions of savings (after having rejected the troika’s demand of the impossible fiscal squeeze of 13.5 billions in magnitude), what should the Athens government do in order to convince Europe to re-negotiate the logic of its program – a renegotiation that, presently, Berlin does not even want to hear of?

    It should announce that all repayments to the ECB (of the bonds that the ECB bought during the ill fated SMP program circa 2010-11, which are now maturing and which were not haircut under the infamous PSI) are suspended until a new program is agreed with the EU, the ECB and the IMF. Since, due to the PSI, no Greek government bonds that are in circulation (and not held by the ECB) will mature before 2022, this means that the Greek government will be playing hardball only with the ECB and, by extension, the EU. Not with private creditors.
    ....
    If the Greek government is, thus, granted its re-negotiation, what should it demand for its partners? Three ought to be the demands that Athens has a moral obligation (not only to itself but to the whole of the Eurozone) to put on the table:

    First, that the Greek banks are recapitalised directly by the EFSF-ESM, as per the June EU Summit agreement (which has fallen by the wayside since it was struck).

    Secondly, that the 12 billion of unspent (due to the recession) structural funds earmarked for Greece for the period 2007-2013 (nb. 20 billion were earmarked of which only 8 billion were spent) are passed on not to the Greek state but to the European Investment Bank for the purposes of investing directly into the Greek private sector.

    Thirdly, a new schedule for repayment of Greece’s debt to the troika which binds the pace and timing of repayments to GDP growth; effectively, making Greece’s creditors equity holders in its future income and wealth.
    There are undoubtedly means of juggling with figures, issuing ious, and shifting debt burdens that would relieve things for Greece. What Varoufakis does not acknowledge is the political determination of neoliberals in Europe to trash Greece, in part as a lesson and threat to the populations of other EU States.

    Greece will not get help from the ECB or any other economic body in the EU by peaceful negotiation. The demands, or similar, are reasonable, as a first step to stop the destruction, but they need to be backed up by millions of people on the streets.

    The Greek Government needs to be put out now: support for an indefinite General Strike, extended from Wednesday's strike, until the Government goes, and emergency measures by the new government, with practical involvement of every neighbourhood and agricultural area to end hunger and fear in Greece, calling on populations across the world to support a stand against the evisceration of the Greek economy and people.

    Wednesday's budget should not be allowed to pass.
    “ We cannot withdraw our cards from the game. Were we as silent and mute as stones, our very passivity would be an act. ”
    — Jean-Paul Sartre

  6. #36
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    Default Re: Yanis Varoufakis - New Bottle, Old Keynesian Wine

    Quote Originally Posted by C. Flower View Post
    Wednesday's budget should not be allowed to pass.
    We all know that, even Yianis. But he once again falls for the very same thing that keeps doing Greece and it's people in. He wants to both have and eat his cake.
    Looking ahead, Greece is going nowhere, with or without the EU. But with the EU we are going backwards. And by the time they are finished with us, we will be 100 times worse off than we ever were under Ottoman occupation, or anybody else who ever cared to occupy the place. With that in mind, we are indeed much better off on our own. And I am certain that when (and it is when, not if) somebody here will finally stand up and say enough and get the people to come with him/her, Greece will find itself on her own for a little while, but definitely not alone. The EU has in fact admitted as much. If we are "allowed" out, the big fear is that others (specifically Portugal and Spain) will follow swiftly.
    What the Greeks need to realise is that austerity is the ONLY weapon Europe has and all we need to do is say "Oxi". It is as simple as that, all the rest is bullying and scare mongering. Of course, if boots march and tanks roll, then we have all those beautifully shiny missiles we can turn 180 degrees and press the little red button they gave us to go with them. They fly as good in the opposite direction, and do as much damage. They can then present us with yet another bill for stuff we got but never paid for...

  7. #37
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    Default Re: Yanis Varoufakis - New Bottle, Old Keynesian Wine

    Samaras is now really scraping the bottom of the barrel.
    He has promised, on condition that the budget and austerity package are passed, to introduce benefit for the long term unemployed! (Didn't say when though)
    I can really see the Troika on the one hand pushing for the total dismantling of labour laws, social schemes and health care systems while agreeing to introduce such a measure. Sadly enough, some people are that desperate they will actually believe him. Not Mimis Androulakis. The Pasok deputy has just announced that he will vote against the proposed measures. Going on declared voting intentions, for as much as you can trust these, Samaras is now down to 152 votes for the program. No wonder he's scraping like that..

  8. #38
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    Default Re: Yanis Varoufakis - New Bottle, Old Keynesian Wine

    Brian Lucey has asked the question, what would happen if Ireland did not pay up on the promissory notes for the Irish bank debt.

    http://brianmlucey.wordpress.com/201...ems-no-answer/

    Isn't the answer similar to the Greek scenario ? Our leaders are simply not going to do that, and risk losing the yearned-for pats on the back at Davos, unless they have at least 500,000 people out on the streets instructing them.
    “ We cannot withdraw our cards from the game. Were we as silent and mute as stones, our very passivity would be an act. ”
    — Jean-Paul Sartre

  9. #39
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    Default Re: Yanis Varoufakis - New Bottle, Old Keynesian Wine

    The army & police are out on the streets in full force this morning. Someone is obviously preparing for some trouble...
    Thessaloniki, this morning. People are out on strike. An impossible budget is proposed to be passed. Fascists are given free range by the police - in fact many of them are police. There have been a number of cases in the last week of police beating up and robbing foreign tourists.

    Democracy is seriously at risk.

    Well worth reading Golem's blog - warns of the serious dangers, and calls for a default and peoples' debt jubilee.

    https://mail.google.com/mail/?shva=1...ad5d9e5869e052
    “ We cannot withdraw our cards from the game. Were we as silent and mute as stones, our very passivity would be an act. ”
    — Jean-Paul Sartre

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    Default Re: Yanis Varoufakis - New Bottle, Old Keynesian Wine

    Time for another read of this thread Also worth bearing in mind whilst reading, the ECB have decided to expand its balance sheet via QE

    Yanis will be playing a leading role in EU negotiations as part of the Syriza negotiating team.
    Thomas Jefferson : Banking Establishments are More Dangerous to our Liberties than Standing Armies.

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    Default Re: Yanis Varoufakis - New Bottle, Old Keynesian Wine

    Quote Originally Posted by ang View Post
    Time for another read of this thread Also worth bearing in mind whilst reading, the ECB have decided to expand its balance sheet via QE

    Yanis will be playing a leading role in EU negotiations as part of the Syriza negotiating team.
    QE is the road of pumping up asset prices, benefiting the rich. SYRIZA stood on debt reduction.

    SYRIZA has made a coalition with Independent Greeks, who are an anti-Immigrant right radical party, but who like UKIP are anti-EU and who are anti-austerity.

    Perhaps SYRIZA thinks it will move away from ID once a deal is cut on debt, but by bringing them in to government they are feeding I G which will benefit from the relationship far more than will SYRIZA.

    Where does SYRIZA stand on racism and immigration ?

    This is an unusual coalition.

    Alexis Tsipras’s army of left-wing radicals will be sharing the government benches with a group of populists right-wing MPs who broke away from New Democracy in 2012.
    The Independent Greeks share Syriza’s determination to end Greece’s bailout agreements, but has a much more hard-line attitude to immigration. They have also called for Germany to pay World War 2 reparations.

    Varoufakis, interviewed on RTE last week expressed willingness to form a coalition with anyone except Golden Dawn. How for are Independent Greeks from Golden Dawn, in policy ?
    “ We cannot withdraw our cards from the game. Were we as silent and mute as stones, our very passivity would be an act. ”
    — Jean-Paul Sartre

  12. #42
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    Default Re: Yanis Varoufakis - New Bottle, Old Keynesian Wine

    I don't agree with this type QE and you are correct in your assessment of it Cass.

    I bring up QE and the axpansion of the ECB balance sheet purely in line with Yanis Varoufakis and his argument of the ECB parking debts of bailout Countries to give breathing space. The ECB used the not wanting to "expand" balance sheet as argument against parking of debts.

    It looks likely to me on the left/right coalition agreement that Tsipras possibly intends forming different coalitions on different policy. Easier to get agreement from a right wing party that agrees with you on EU rather than a left wing party that doesn't.
    Thomas Jefferson : Banking Establishments are More Dangerous to our Liberties than Standing Armies.

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    Default Re: Yanis Varoufakis - New Bottle, Old Keynesian Wine

    interesting review of YV's last book


    Yanis Varoufakis, Professor of Economic Theory at the National and Capodistrian University of Athens, is mainly known for his work (with Shaun Hargreaves-Heap) on critical analysis of game theory. He is however also one of the foremost currently active left-Keynesian economists. In this book, "The Global Minotaur", he sets out his analysis of the origins and nature of the current economic depression from this perspective. The book is well-written and should be generally accessible to the interested layman, but it is also rather disjointed; it has at times insufficient theoretical depth to clearly separate causes, and at the same time insufficient structuring to make it wholly work as a popular text. That said, it is highly informative, clear in the purely descriptive aspects of its content, and should make the Keynesian interpretation of the current crisis and global trade relations clear to all involved.

    The first two chapters, the introduction and "Laboratories of the Future", are the most rambling and unclear, and therefore may put off readers unfairly. In it, Varoufakis discusses and then dismisses various popular explanations for the crisis and explains the Keynesian theory of capital and of crisis in general terms, but I doubt whether anyone will be much the wiser for it. The later chapters, however, are excellent. Varoufakis systematically traces the two world-systems led by the United States that have existed since WWII. First this is the gold standard convertibility system of Bretton Woods, in which the United States financed its vassals in Europe and east Asia in order to provide itself with a market for its own manufactures, in exchange for which it could rely on their political loyalty in the struggle against its rival, the Soviet Union. He clearly outlines the significance of the Marshall Plan and the creation of the European Coal and Steel Community, as well as the plans for the quick revival of Germany and Japan after being defeated in WWII, as part of the American 'global plan' to recycle its surpluses from production, so as to maintain demand for its own production. The Vietnam war and the attendant massive financing of South Korea, Singapore and Taiwan are also put into context in this manner. This is an interesting and controversial point, because generally the start of the European unification project and the revival of Japan are interpreted as developments necessarily ceded by the US against its short-term interests in order to prevent a Communist takeover; but in Varoufakis' reading, the Cold War as such does not play such a significant role, and these developments are read as actually being directly beneficial to America's global position. Although I am not so enamored of Keynesian demand theory as the author, the argument here is strong and allows for an interesting reinterpretation of these events, especially the creation of the 'unified Europe'.

    The second stage of the recent world-system shows, from the moment Nixon abandons the US gold standard under the pressure of its now increasingly powerful and rivalrous allies (France, Britain, Japan), a pattern almost the reverse of the former. After the abandonment of gold standard convertibility and the introduction of the floating exchange rates, the US dollar functions as the world reserve currency almost entirely unbound by gold. It can do this thanks to the immense economic and military power of the US, which makes it a safe guarantee for all creditors. As a result, the United States has an "exorbitant privilege" in being able to print dollars pretty much ad libitum and thereby bankroll its massive trade deficits and its enormous military expansion from President Reagan onwards, at the expense of Europe and the new economic powers of East Asia, including today China, whose trade surpluses are promptly invested in US dollar bonds and assets denominated in US dollars. The United States in this way can run up almost limitless debt and can increase its world position in military and economic terms thanks to the seignorage benefits it accrues in this manner - it becomes the 'global minotaur' which receives tribute from all abroad.

    But: it can do this only for as long as it is still the most trusted debtor, effectively. And this leads Varoufakis to his analysis of the crisis, which is perhaps the best part of the book. He explains in a clear and easy to understand manner how the endless flow of capital to Wall Street (and lesser gods parasitical upon it, like Iceland and Ireland) which could not be 'recycled' into productive investment led to the creation of a massive financial bubble of ever more remote derivatives and leveraging, which inevitably popped. From Varoufakis' clear overview, there can be no doubt that we haven't seen the end of the crisis yet and that the systemic responses on the part of the Obama administration as well as the European Commission are essentially just attempts to set the clock back, to return to the financialized system from before the collapse of the bubble without making the least serious effort at implementing reforms to prevent it from happening again. This is an important warning that none of the current governments are actually interested in the human consequences of the crisis or in preventing its future recurrence. Moreover, as the example of Japan discussed by Varoufakis shows, a debt-deflationary cycle can take a very long time to get out of, and may well result in a 'lost decade' or longer of nondevelopment of the economy for most people. The author ends therefore with a discussion of how the main challenge is that of the Chinese against the global minotaur and their attempt to supplant it, but this provides no solution of itself, just a change of the guard.

    The main strength of "The Global Minotaur" is in its descriptive clarity, explaining the processes through which the two different postwar systems operated with the United States at the helm, and how the era of neoliberal policy is directly linked to the changes in the kind of economic hegemony the US exercises. However, from my point of view, the book's weakness lies in its inability to more systematically analyze the causal sequences in production and crisis, which is a problem with Keynesian economics generally. Where it comes to understanding actual production, the creation and flow of value and its relationship to crisis, the left-Keynesian theory has very little to say. Keynesian economics relies purely on psychological explanations in the last instance, and these often beg the question. This is shown in this book by the small segments on Wal-Mart and how it supposedly lured Americans into a psychology of wanting to buy for cheap; these and similar passages are superficial, and do not go into for example the relationship between lowering the cost of the reproduction of labor and the ability of capitalists to subsequently lower the wage rate. Similarly, Varoufakis takes the underconsumptionist paradigm, i.e. the explanation of economic crisis by the inability of capitalists to create sufficient demand for their products, as a given and takes no time to defend it as against those Marxist interpretations that locate crisis in the sphere of production, with a declining rate of profit. For example, the author points to great increases in the volume of profit for American companies since the 1980s neoliberal era; but given the massive flows of capital from everywhere else to the United States, this tells us very little about the rate of profit. Without a meaningful value theory, Varoufakis can explain how the crisis came about, but not why it came about. Similarly, he can explain very well through which processes the US managed to exercise its economic power, but not how this relates to wages, class struggle, or political and technological changes (although he does note how Mao's victory in China sabotaged the American plan to make China the dominant market in Asia rather than Japan). It also makes it difficult for him to discuss in-depth the problems with the economic theories underlying the neoliberal order, other than complaining about their mathematical abstruseness.

    None of that is to say this is not a good book, however. When taken descriptively and read as a history of the current global financial situation and the history of high finance in the postwar period, it is probably the best book at this theoretical level one can find, and it is readable and concise. In particular the clear explanation of the role of the United States in creating two different world orders since WWII is highly suggestive for understanding many political developments in the postwar period as well, and should clarify much of the issues around the ability of the US to maintain its power (which of course have nothing to do with the ideology of 'free markets' touted by its politicians). For a more in-depth causal approach to economic crisis in general and this one in particular, the really interested academic might do better to read the works of modern Marxist economists on the crisis, for example the work of Costas Lapavitsas.
    Last edited by Dr. FIVE; 27-01-2015 at 08:02 PM.

  14. #44
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    Default Re: Yanis Varoufakis - New Bottle, Old Keynesian Wine

    http://www.rabble.ie/2015/01/27/soli...uits/#comments

    Ming has his say.

    Schauble out in all his arrogance before MEPS earlier today.

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    Default Re: Greece 2015, swan song or a new beginning?

    Cactus, think he's talking about you from 40.00 minutes here



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