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»Tell them that the time has come for Greeks to reclaim our lost dignity. Announce that your government will not accept any more loans as long as the eurozone is refusing to debate its institutional restructuring and policy orientation along the lines of a set of rational principles. Proclaim that your government, if need be, will proceed within the eurozone but without loans. If anyone asks you what are the rational principles on which the eurozone must be refounded, and how this could be achieved expeditiously, you know the answer; we have provided it in the Modest Proposal. You have already studied it, anyway. Explain it yourself to the amassed people. And add that until a debate is held in Brussels along these lines (lines that serious European politicians like J.C. Yuncker and G. Tremonti have already drawn), you will not accept a single euro from our partners. State clearly that you will demand a debate on the idea of a eurobond and on the use of eurobonds in order to energise the European Investment Bank so as to effect a New Deal for Europe. Suggest that the EFSF should be recapitalising banks instead of lending to states. Show your people, and the world, that you know that there is an alternative. Make it abundantly clear that until this debate creates new prospects for growth and prosperity in the eurozone, Greece will do that which it ought to have done ages ago: To live within its means! And if they ask you about how you will pay for wages and pensions, answer that you will reduce the highest public sector salary to the level of the second largest and then both to the level of the third largest and then these three to the level of the fourth largest; and so on until all the necessary reductions are effected so that the Greek state breaks even. Add that we shall end all defence contracts till further notice. That the Greek state will do all that is necessary so as to survive without one euro of additional, expensive loans from the EU.«
Must read of today! Yanis Varoufakis writes an Open Letter to George Papandreou.
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This is very cool. Newsweek had a story about “America’s Dying Cities”. On the list: Grand Rapids, Michigan. The above video is the answer of Grand Rapids citizens whether their city is dying. An obituary for Grand Rapids seems to be premature to me.

Our new Viking Chieftain
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Jean-Claude Trichet delivered an amazing speech for being honored with the Karlspreis in Aachen. To paraphrase our new Viking Chieftain Jean-Claude: “Would it go too far if we envisaged, at this second stage, that we — the EU vikings in liaison with the ECB vikings — invade a country which is still not delivering, plunder its treasures and subjugate its labor force.”

There’s no need for me to comment on this speech further. Others have already done so already in a brilliant way. Please read Bill Mitchell’s When the elites wine and dine together and hand out prizes to each other and Michael Hudson’s EU: Class War Declared.

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Clueless economists featured on Project Syndicate

The Project Syndicate Website is a treasure for anyone on the lookout for crazy economists. They have economists stand in line for the “I’ve no idea what I’m talking about” award, any Wal Mart employee would really get nervous about the long queue. The latest in the queue: some Jean Pisani-Ferry. Here’s my comment:

>”The message to all governments is clear: if the quality of even US bonds, traditionally the safest of financial assets, can be questioned, no country is immune from attack. So, the question today is not whether it is time to reduce deficits, but how fast, how far, and by what means.”

This is another shining example that some economists have no idea what they are talking about which doesn’t hinder them to scare the public.

Recall that in November 1998, the day after the Japanese Government announced a large-scale fiscal stimulus to its ailing economy, Moody’s made the first of a series of downgradings of the Japanese Government’s yen-denominated bonds, by taking the Aaa (triple A) rating away. By December 2001, they further downgraded Japanese sovereign debt to Aa3 from Aa2. Then on May 31, 2002, they cut Japan’s long-term credit rating by a further two grades to A2, or below that given to Botswana.

What happened to Japan and the bond market? Nothing. We’re still waiting for the bond market attack. The bond dealers simply ignored the know—nothings from Moody’s. The Japanese finance minister at the time even told the crooked ratings agencies to take a long walk off a short pier! And what is true for Japan is certainly also true for the US. Thus we can safely ignore S&P and Mister Jean Pisani-Ferry.

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Is the Land of The Free a Police State? Am I wrong or wasn’t it this Thomas Jefferson who wrote:

The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants. It is its natural manure.

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A towel, it says, is about the most massively useful thing an interstellar hitchhiker can have. Partly it has great practical value. You can wrap it around you for warmth as you bound across the cold moons of Jaglan Beta; you can lie on it on the brilliant marble-sanded beaches of Santraginus V, inhaling the heady sea vapors; you can sleep under it beneath the stars which shine so redly on the desert world of Kakrafoon; use it to sail a miniraft down the slow heavy River Moth; wet it for use in hand-to-hand-combat; wrap it round your head to ward off noxious fumes or avoid the gaze of the Ravenous Bugblatter Beast of Traal (such a mind-bogglingly stupid animal, it assumes that if you can’t see it, it can’t see you); you can wave your towel in emergencies as a distress signal, and of course dry yourself off with it if it still seems to be clean enough.

More importantly, a towel has immense psychological value. For some reason, if a strag (strag: non-hitch hiker) discovers that a hitch hiker has his towel with him, he will automatically assume that he is also in possession of a toothbrush, face flannel, soap, tin of biscuits, flask, compass, map, ball of string, gnat spray, wet weather gear, space suit etc., etc. Furthermore, the strag will then happily lend the hitch hiker any of these or a dozen other items that the hitch hiker might accidentally have “lost”. What the strag will think is that any man who can hitch the length and breadth of the galaxy, rough it, slum it, struggle against terrible odds, win through, and still knows where his towel is, is clearly a man to be reckoned with.

Hence a phrase that has passed into hitchhiking slang, as in “Hey, you sass that hoopy Ford Prefect? There’s a frood who really knows where his towel is.” (Sass: know, be aware of, meet, have sex with; hoopy: really together guy; frood: really amazingly together guy.)

— The Hitchhiker’s Guide to the Galaxy

On May 25th we celebrate Douglas Adams with a Towel Day. You don’t have an appropriate towel? You can buy one here. Given the State of the European Union we really need some people who Don’t Panic!

Can you read a chart?
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Es geht auch darum, dass man in Ländern wie Griechenland, Spanien, Portugal nicht früher in Rente gehen kann als in Deutschland, sondern dass alle sich auch ein wenig gleich anstrengen - das ist wichtig … Wir können nicht eine Währung haben, und der eine kriegt ganz viel Urlaub und der andere ganz wenig.

— Angela Merkel in Meschede

Translation: It is also about not being able to retire earlier in countries such as Greece, Spain (and) Portugal than in Germany. Instead everyone should try a little bit to make the same effort. That is important, … We can’t have a common currency where some get lots of vacation time and others very little. [That won’t work in the long term,] …

Conclusion: The German Chancellor Angela Merkel is too dumb to read a single chart.

Viva la Revolución!
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Me thinks there will be a HOT summer in Europe. Spain’s youth rebels against the insane austerity measures imposed on the economy by the Spanish government. The unemployment rate for young Spaniards is 40%. The Lost Generation of Young Spaniards is outraged:

Democracia Real Ya! Manifesto

We are ordinary people. We are like you: people, who get up every morning to study, work or find a job, people who have family and friends. People, who work hard every day to provide a better future for those around us.

Some of us consider ourselves progressive, others conservative. Some of us are believers, some not. Some of us have clearly defined ideologies, others are apolitical, but we are all concerned and angry about the political, economic, and social outlook which we see around us: corruption among politicians, businessmen, bankers, leaving us helpless, without a voice.

This situation has become normal, a daily suffering, without hope. But if we join forces, we can change it. It’s time to change things, time to build a better society together. Therefore, we strongly argue that:

Read the rest of this post »

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»So if it were up to me, I’d step a bit more on the fiscal accelerator. But that’s not why I left [the White House]. I left because I was frustrated. Not with what was going on inside the White House, but with what is going on outside.

The national debate over economic policy is way off track and the stakes are as high as can be. In every important area of economic and social policy—health care, fiscal policy (deficits, debt, taxes), public investment, retirement security, climate change, education, job growth, income distribution—there’s so much misinformation, so many false assertions, that it is impossible for anyone paying attention to evaluate the choices with which they’re faced.

Most important, as the 2012 election season gears up, we are poised to have a fundamental debate about the size and role of the federal government. But absent straight talk and plain, understandable facts from both sides of the argument—about the costs and benefits engendered by this choice—it will be impossible for voters to make an informed choice.

Let me be clear about where I stand. I view the conservative agenda right now as trying to implement a large shift in who bears the risk of those events in our personal and economic lives that are inadequately handled by private markets. In my view, to get this wrong means significant disinvestment in public goods from education to infrastructure, diminished health and retirement security, more booms and busts—a move from “we’re in this together” to “you’re on your own.”«

Jared Bernstein in his first Welcome Blog Post. Me thinks his blog is a must to follow although there will be the usual crude Keynesian ritual — the budget must be balanced over the business cycle — which is something we MMTer should be meanwhile accustomed to and which we can answer with our polite objections by inserting our favorite text template to rescue Keynes from his acolytes.
Light Blogging …
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Since Monday I’m on a business trip for three weeks. Thus I’ve not a lot time to procrastinate with my blog and blogging will be very light. But I’ve added a GIGO tag to my browser/reader to mark stuff for future posts.

Have you ever wondered how a very successful German exporter looks like. The photo above is the company Württembergische Allplastik GmbH. Worldwide market leader — drum-roll — for cable ties. Now if you think the building looks a little bit dull I missed the photo opportunity while the owner parks one of his five cars in front of the entrance. Among them a very nice Lamborghini.

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The Journal of Universal Rejection

Bravo! Finally a journal where I can submit my GIGO stuff. Main benefits:

You can send your manuscript here without suffering waves of anxiety regarding the eventual fate of your submission. You know with 100% certainty that it will not be accepted for publication. You may claim to have submitted to the most prestigious journal (judged by acceptance rate). The JofUR is one-of-a-kind. Merely submitting work to it may be considered a badge of honor. You retain complete rights to your work, and are free to resubmit to other journals even before our review process is complete. Decisions are often (though not always) rendered within hours of submission.

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»But the consequences of this enormous inequality producing so much misery to the bulk of mankind, legislators cannot invent too many devices for subdividing property, only taking care to let their subdivisions go hand in hand with the natural affections of the human mind. The descent of property of every kind therefore to all the children, or to all the brothers and sisters, or other relations in equal degree is a politic measure, and a practicable one. Another means of silently lessening the inequality of property is to exempt all from taxation below a certain point, and to tax the higher portions of property in geometrical progression as they rise. Whenever there is in any country, uncultivated lands and unemployed poor, it is clear that the laws of property have been so far extended as to violate natural right.«
Karl Marx Thomas Jefferson (HT: Blue Texan)
Happy Birthday to …
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David Hume. Today he’s 300 years old :~) I’m NO David Hume cheerleader but I think Schopenhauer is correct noting “there is more to be learned from each page of David Hume than from the collected philosophical works of Hegel, Herbart and Schleiermacher taken together”. Especially Hegel!

I also note on this occasion the philosophical poverty of US academic libertarians. These guys are only ridiculous and should be immediately fired. Instead of commemorating David Hume a Grover Cleveland thinks it is worthwhile to write the single praising movie review for Ayn Rand’s “Atlas Shrugged”?

Beside this I wonder about that statement from another Pileus Blog academic idiot: “Of course, how can we afford to keep teachers in the classroom when we need that money to dish out to gay seniors?” Is this a new libertarian movement which makes worthwhile spending dependent on whether it goes to children or gay seniors?

I really wish I would have the chance to confront myself with a first-class liberal like David Hume and not only first-class idiots who pretend to be.

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Translation: The Pakistani Secret Service looks for Osama Bin Laden. Spook on the left: “No intercom to actually ask who’s living here! No bell, no nameplate — nothing!!” Spook on the right: “Bad luck!!”