The Rolling European Crisis

by niamh on February 18, 2011

I posted recently on The paradoxical politics of credible commitment, noting the excellent analysis of Gordon Brown’s politics by Sebastian Dellepiane.  He argues that the Labour government did not make the Bank of England independent simply in order to defuse City suspicions of them. This self-binding policy was also in fact enabling, because it made it possible for Brown to adopt a classic Keynesian economic strategy by about 2000.

The Euro started out as a self-binding credibility-gaining mechanism for Eurozone member states. But the Euro also turned to have an ‘enabling’ side to it. It contributed to new kinds of instability by facilitating the extension of cheap credit and by permitting increasingly risky lending practices to spread throughout the European financial system, in Germany and France as well as in the weaker peripheral economies.

This has led me to think some more about the relevance of the logic of credibility gains in the current European crisis.

The self-binding austerity politics now under way in the Eurozone also has some paradoxical features. The crisis has produced an explosion of fiscal deficits and an accumulation of sovereign debt. The ECB favours fiscal austerity to restore stability, and so does German public opinion. This means that every other member state must adjust to low demand conditions and domestic deflation. But while Gordon Brown’s self-binding monetary policy proved to be enabling, Eurozone governments’ self-binding fiscal policy might be seen as self-disabling, because it involves commitment to a strategy that may prove self-defeating. There are two reasons for this.

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Write a nice note to a Wisconsin Representative

by Harry on February 18, 2011

I chatted last night with a friend who is a Dem Representative (so not a Senator holed up wherever they are now), and my wife saw him an hour or so later, and said he looked as exhausted as he sounded. The Dem Reps are in the building round the clock basically, and excited but also tired. My friend says it really gives them energy to get messages of support, from old friends and new friends. Honestly, pretty much wherever you are, a short encouraging email will help keep their spirits up, and obviously if you’re in Wisconsin a nice note to your own (Dem) Rep is appropriate (Phelps – send a nice note to a bunch of them, ok, you’re almost uniquely capable of writing a letter that will encourage in this situation). An extremely polite note to your (Rep) Rep explaining why he or she should be opposing the bill, and making whatever pledge of support you can bring yourself to make, conditional on him/her contributing to the bill’s defeat, is also in order. Here’s the list of home pages, addresses, etc. I’m off now to see my mate and find my daughter.

Oh, by the way, its looking as if Tuesday’s budget speech will announce the de facto privatization UW Madison, so that’ll be fun too.

The Onion meets Poe’s Law

by John Quiggin on February 18, 2011

A little while ago, my son pointed me to a news item in a periodical called The Onion, reporting Republican opposition to an Obama proposal to protect the earth against destruction by asteroid impact. The usual libertarian arguments were advanced, pointing out that everyone would be forced to pay for this protection, thereby undermining the incentive to act for themselves.

At the time, I was suspicious that this might be some sort of satirical gag[1]. But now I see the proposal being discussed, and rejected, at the very serious Volokh blog (H/T Paul Krugman and Matt Yglesias).

So, based on my extensive agnotological studies, let me make some predictions about some of the scientific claims we are likely to see advanced (by the same people, but at different times), once the debate over Obama’s socialist plan hots up.
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Thanks to 250 days #nogov, surrealism flourishes in Belgium

by Ingrid Robeyns on February 18, 2011


Congratulations to Belgium, which holds since midnight the world record cabinet formation after the elections now exactly 250 days ago. Being the founders of surrealism, the Belgian people decided to celebrate this with people’s parties in open air, especially a big one Gent. The poster says ‘steun onze helden’, that is, ‘support our hero’s’, but this should be interpreted as ironically as possible. The people organising and attending these parties are fed up with the Belgian politicians who are unable (or unwilling?) to form a coalition and govern the country. If you want to see another piece of Belgian surrealism, watch the Flemish comedian Geert Hoste giving an interview to CNN in which he comments on the situation and the festivities.
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General Invitation

by Harry on February 18, 2011

My understanding is that organizers are hoping for 100,000 at the State Capitol tomorrow. There is also word of counter-demonstrations, which should be fun. So if you’re within a reasonable distance of Madison and can come, you’re welcome. Bring your friends.

What’s up in Wisconsin?

by Harry on February 18, 2011

It’s a bit of a surprise to suddenly be in the midst of the biggest protests I’ve seen in my 25 years in the US. Wisconsin old-timers are saying they’ve never seen anything like it — not the Vietnam War protests, not even the earlier civil rights demonstrations in Wisconsin over housing. A sea of red surrounds the Capitol all day long, and the Capitol itself is chock full, tens of thousands of people chanting, joking, and occasionally bursting into loud applause which is entirely incomprehensible given that no-one can hear anything that speakers say.

The best news-gathering source I’ve found is at GlobalHigherEd where my colleague Kris Olds is regularly updating the links, and has a lot of background information. But the short story is this: last Friday our new Governor, Scott Walker, proposed a budget repair bill which includes considerable reductions in benefits for public sector workers, the removal of collective bargaining rights over anything but pay for public sector workers, and a provision disallowing payroll deduction union dues and a requirement that workers be allowed to be union members without paying dues. With majorities in both houses he assumed he could pass the bill within the week — the plan was that he would be signing it tomorrow (I’m writing on Thursday). Last weekend it was not at all clear that the opposition would be strong, and it wasn’t really until Tuesday night, when the local teacher’s union announced a sick out for Wednesday (widely thought to be a tactical error, including, I understand, by some of the leadership) that things really got moving. The Republicans have a large majority in the Assembly, but a majority of just 5 in the Senate, so all the action is in the Senate vote. Wednesday was when it all started to happen. The estimates of 15-30,000 demonstrators are probably on the low side — at any given time there may be 15,000 at any given point in the day hundreds are walking toward the Capitol, while hundreds are marching away. Although the teachers have been in the forefront of this (many more districts were closed today), other unions have been fully involved, including the police and firefighters unions which are exempted from the bill’s provisions [CORRECTED]


Thursday’s demonstrations were larger than Wednesday’s, and tomorrow’s (Friday’s) will be bigger still. Contrary to the impression given by the national reports I have seen, hardly any of the protest or rhetoric concerns the cuts in benefits; almost the entire movement is about protecting collective bargaining rights.

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