Reply With QuoteI don't know why everyone mentions the marshall plan.
Germany got 10% out of it. Today the 14bn are worth 100bn.
That means 10bn dollar today. What a sum.
lol?Originally Posted by SuchIsLife
Of course, nobody else to blame. Don't get me started.
Oh, btw, it was actually a known fact, particularly amongst German politicians part of the German government, among others, that the then Greek governments stats were false.
It was also a known fact several other governemnts in the EU lied about their stats.
But hey, don't let good old facts get in the way of a good story.
Especially when it contracits everything else you say.
Oh, and here's an interesting little article/interview..
MAYBE GERMANY SHOULD HAVE BEEN LEFT TO THEIR FATE, AFTER ALL, THEY GOT THEM SELVES IN THOSE MESSES...Economic Historian 'Germany Was Biggest Debt Transgressor of 20th Century'
APFormer German Chancellor Konrad Adenauer (left) during a meeting with the High Commission of the Allies in 1951: Eschewing of reparations demands "a life-saving gesture"
Think Greece's current economic malaise is the worst ever experienced in Europe? Think again. Germany, economic historian Albrecht Ritschl argues in a SPIEGEL ONLINE interview, has been the worst debtor nation of the past century. He warns the country should take a more chaste approach in the euro crisis or it could face renewed demands for World War II reparations.
Think Greece's current economic malaise is the worst ever experienced in Europe? Think again. Germany, economic historian Albrecht Ritschl argues in a SPIEGEL ONLINE interview, has been the worst debtor nation of the past century. He warns the country should take a more chaste approach in the euro crisis or it could face renewed demands for World War II reparations.
SPIEGEL ONLINE: Mr. Ritschl, Germany is coming across like a know-it-all in the debate over aid for Greece. Berlin is intransigent and is demanding obedience from Athens. Is this attitude justified?
Ritschl: No, there is no basis for it. SPIEGEL ONLINE: Most Germans would likely disagree.
Ritschl: That may be, but during the 20th century, Germany was responsible for what were the biggest national bankruptcies in recent history. It is only thanks to the United States, which sacrificed vast amounts of money after both World War I and World War II, that Germany is financially stable today and holds the status of Europe's headmaster. That fact, unfortunately, often seems to be forgotten.
SPIEGEL ONLINE: What happened back then exactly?
Ritschl: From 1924 to 1929, the Weimar Republic lived on credit and even borrowed the money it needed for its World War I reparations payments from America. This credit pyramid collapsed during the economic crisis of 1931. The money was gone, the damage to the United States enormous, the effect on the global economy devastating.
SPIEGEL ONLINE: The situation after World War II was similar.
Ritschl: But right afterwards, America immediately took steps to ensure there wouldn't be a repeat of high reparations demands made on Germany. With only a few exceptions, all such demands were put on the backburner until Germany's future reunification. For Germany, that was a life-saving gesture, and it was the actual financial basis of the Wirtschaftswunder, or economic miracle (that began in the 1950s). But it also meant that the victims of the German occupation in Europe also had to forgo reparations, including the Greeks.
SPIEGEL ONLINE: In the current crisis, Greece was initially pledged €110 billion from the euro-zone and the International Monetary Fund. Now a further rescue package of similar dimensions has become necessary. How big were Germany's previous defaults?
Ritschl: Measured in each case against the economic performance of the USA, the German debt default in the 1930s alone was as significant as the costs of the 2008 financial crisis. Compared to that default, today's Greek payment problems are actually insignificant.
SPIEGEL ONLINE: If there was a list of the worst global bankruptcies in history, where would Germany rank?
Ritschl: Germany is king when it comes to debt. Calculated based on the amount of losses compared to economic performance, Germany was the biggest debt transgressor of the 20th century.
SPIEGEL ONLINE: Greece can't compare?
Ritschl: No, the country has played a minor role. It is only the contagion danger for other euro-zone countries that is the problem.
SPIEGEL ONLINE: The Germany of today is considered the embodiment of stability. How many times has Germany become insolvent in the past?
Ritschl: That depends on how you do the math. During the past century alone, though, at least three times. After the first default during the 1930s, the US gave Germany a "haircut" in 1953, reducing its debt problem to practically nothing. Germany has been in a very good position ever since, even as other Europeans were forced to endure the burdens of World War II and the consequences of the German occupation. Germany even had a period of non-payment in 1990.
SPIEGEL ONLINE: Really? A default?
Ritschl: Yes, then-Chancellor Helmut Kohl refused at the time to implement changes to the London Agreement on German External Debts of 1953. Under the terms of the agreement, in the event of a reunification, the issue of German reparations payments from World War II would be newly regulated. The only demand made was that a small remaining sum be paid, but we're talking about minimal sums here. With the exception of compensation paid out to forced laborers, Germany did not pay any reparations after 1990 -- and neither did it pay off the loans and occupation costs it pressed out of the countries it had occupied during World War II. Not to the Greeks, either.
SPIEGEL ONLINE: Unlike in 1953, the current debate in Germany over the rescue of Greece is concerned not so much with a "haircut", but rather an extension of the maturities of government bonds, i.e. a "soft debt restructuring." Can one therefore even speak of an impending bankruptcy?
Ritschl: Absolutely. Even if a country is not 100 percent out of money, it could still be broke. Just like in the case of Germany in the 1950s, it is illusory to think that Greeks would ever pay off their debts alone. Those who are unable to do that are considered to be flat broke. It is now necessary to determine how high the failure rate of government bonds is, and how much money the country's creditors must sacrifice. It's above all a matter of finding the paymaster.
SPIEGEL ONLINE: The biggest paymaster would surely be Germany.
Ritschl: That's what it looks like, but we were also extremely reckless -- and our export industry has thrived on orders. The anti-Greek sentiment that is widespread in many German media outlets is highly dangerous. And we are sitting in a glass house: Germany's resurgence has only been possible through waiving extensive debt payments and stopping reparations to its World War II victims.
SPIEGEL ONLINE: You're saying that Germany should back down?
Ritschl: In the 20th century, Germany started two world wars, the second of which was conducted as a war of annihilation and extermination, and subsequently its enemies waived its reparations payments completely or to a considerable extent. No one in Greece has forgotten that Germany owes its economic prosperity to the grace of other nations.
SPIEGEL ONLINE: What do you mean by that?
Ritschl: The Greeks are very well aware of the antagonistic articles in the German media. If the mood in the country turns, old claims for reparations could be raised, from other European nations as well. And if Germany ever had to honor them, we would all be taken the cleaners. Compared with that, we can be grateful that Greece is being indulgently reorganized at our expense. If we follow public opinion here with its cheap propaganda and not wanting to pay, then eventually the old bills will be presented again. SPIEGEL ONLINE: Looking at history, what would be the best solution for Greece -- and for Germany?
Ritschl: The German bankruptcies in the last century show that the sensible thing to do now would be to have a real reduction of the debt. Anyone who has lent money to Greece would then have to give up a considerable part of what they were owed. Some banks would not be able to cope with that, so there would have to be new aid programs. For Germany, this could be expensive, but we will have to pay either way. At least Greece would then have the chance to start over.
http://www.spiegel.de/international/...-a-769703.html
Who knows, Europe would probably be better off today without Germany trying to conquer the continent again this time through economic means..
Maybe prosperity and wealth would have been more evenly spread across the rest of the continent instead..More Marshal funds for parts of Europe destroyed by Nazi Germans.
But please, I really hope the powers that be, do leave Greece to it's fate, I really hope they are as ignorant and misuigded as some of you.
If you think the problems start and end with Greece, you obviously haven't been paying attention to what's been going on.
So go right ahead, because the next wave will hit all of you.
Unfourtunately for some people using their brains is the hard part. Repeating what they hear on tv though is the easy part.
I don't know why everyone mentions the marshall plan.
Germany got 10% out of it. Today the 14bn are worth 100bn.
That means 10bn dollar today. What a sum.
Sure "ze evil germans" are looking to take over europe
Time for people to stand up, even the common "joe public" and recognise their part in the economic disaster living on the plastic, cards maxed out to the last, mega mortgages, etc.. etc.. never could be sustained, while the "free money" was there they loved the E.U., now the supply dried up the hate it, and blame Germany for their woes.
Connaught Ranger.
The thing is that even without the support after WW2 the German people would still have come out on top because they are a smart and industrious nation however throwing huge amounts of money at Greece is not going to get a result comparable to post-war Germany as the Greeks through a mixture of learned helplessness, culturally ingrained corruption and a lack of innovation are incapable of such a feat.
I doubt it, Germans are by nature industrious, unlike some other nations which are still in Sheep herding stage. Look at the Industries they formed. German make their own airplanes, umm do you?
Last edited by LineDoggie; 05-19-2012 at 06:28 AM.
From recollection, one of the main points of the Marshall plan wasn't "here is some money, go rebuild factories". It was to provide the countries with some deperately needed hard cash to make purchases from other countries. Keepin mind that at the time most European currenices were not freely convertable, so that if (or example) German factories needed French coal, it had to be purchased with US dollars (or some other acceptable form of currency). And it was this that managed to kick start European economies post war. It also helped encourage things like the co-operation between the coal industries of Belgium, France etc that indirectly led to the EU...
1. There is no Nobel Prize for Economy.Marx never won a Nobel Prize in Economics. And I have read quite a bit of Marx, in his own words rather than simply those of a range of interpreters, to fulfill various requirements in my educational career. As practical economics, not to mention as pleasurable prose, I would not recommend it.
Friedman, on the other hand, is arguably the single most influential economist of the twentieth century (Keynes being the only possible rival), particularly from the viewpoint of actual economic and monetary policy. Every major central bank in the world today, most definitely including the Fed, essentially uses the playbook that he created. So, if we accept your amazingly casual dismissal of his relevance (based on what? That the fact that Marxist economics was fantasy somehow means that all economic theory is similarly wrong? Please.), then who should we refer to in answering your original question? You?
At the risk of doing violence to Friedman's ideas, I will attempt to answer your question (what is the relevance of printing money when 1 out of 4 people are out of work?) as simply as I can: severe unemployment and underutilization of productive capacity is caused by sharp, significant, and sustained contractions in the quantity of money, and the velocity of its circulation, in the economic system. This is what happened during the Great Depression, when banks failed and the survivors refused to lend. A similar phenomenon occurred in the credit markets after the real estate and financial bubbles burst a few years ago. If people think that they're feeling economic pain now, then we should try to imagine what it would be like without swift intervention in the early stages. Soup kitchens with lines around the block would not be something we only see in sepia-tinted photographs.
In occasional, moderate doses, such contractions can be salutary, in wringing out speculative and inflationary pressures. When it passes a certain threshold, however, it can lead to a vicious deflationary cycle and systemic failure with long-lasting consequences, unless the monetary authorities takes active steps to provide access to money for the system. It was the Fed's unwillingness to play this role, in Friedman's analysis, that caused events post-1929 to spiral out of control.
In the views of most mainstream economists, whether "conservative" or "liberal", if the Fed and the Treasury had sat on their hands in 2008, the risk of such a runaway deflationary spiral was extremely high. Know-nothing pundits and a certain breed of zealous politicians aside, the debates/arguments among economists and policymakers have to do with degree and tactics, not with the overall strategy of monetary intervention.
On a related point, I've noticed in any number of threads quite a bit of yelling and cursing about saving those villains, the large financial institutions. If major banks fail, the executives and shareholders are the least of the country's concerns. Who, exactly, do we think the depositors, who represent most of a bank's lending capital, are? They are the country's citizens, you and me. FDIC protection of deposits has dollar ceilings. And, if one thinks about it, the concept of the FDIC is nothing more or less than an institutionalized bail-out plan, to "bail out" these depositors (who are functionally equivalent to debt investors) with public money in the event of disaster. Similarly, the "shareholders" are large fund managers, but again, whose money are they managing? They represent the pensions/retirement monies, college funds, etc., of everyday individuals.
And probably most important from an economic perspective, if these institutions disappear, then how, exactly, is credit going to be allocated to the businesses and individuals who need it to maintain economic function? Is the Fed going to be setting up retail lending branches? Anyone who believes in market principles should recognize that such so-called "cures" are far worse than the disease. If you really want to create runs on banks and general financial panic, guaranteeing further wholesale contractions of the money supply and a full-blown depression, you could do no better than to allow these institutions to go under.
Finally, bank "bailouts" are not free. In the case of equity injections, much or all of the value of the stakes of previous shareholders has been wiped out. If the money is in the form of lending to the banks, then these instruments have a senior claim to the bank's assets (vs. shareholders), and they need to be paid back. If they are not repaid, then the creditors (i.e. the public) own the bank. The public money is not intended as a gift, never to be seen again. And, as stated previously, in a broad sense, we are bailing out ourselves.
Do I think that senior executives, who are responsible for prudent business practices and risk management, should have their feet held to the fire (and in many cases, be fired)? Without question. But allowing the institutions themselves to go under would be a case of a country cutting off its nose (and its upper palate, and its jaw) to spite its face. It would be a strange case of dissociative disorder, in which the public disconnects from the reality that, in large measure, these institutions are us.
2. Marx was the case of a sociological truth with simplified and dated numbers.
3. The Western and Global Economic System are like chain smokers. It knows the systematic virtual growth cannot last and that it will kill them, but are inclined to take every risk for that short period of enjoyment.
4. Those institutions are not us. Not by a stretch. The virtues sold to the common man are the direct opposite of those expressed by the Financial institutions.
By nature? Stages? ... Oh wow this was some argument.
Here you pretty much assume that Monetarism is right and Keynesian is wrong. And its not true, as different countries have different approach to it with different results. It sometimes works, sometimes not. And monetarism did create more problem then it solved. So saying that its only right approach is just wrong.Marx never won a Nobel Prize in Economics
Friedman, on the other hand, is arguably the single most influential economist of the twentieth century (Keynes being the only possible rival), particularly from the viewpoint of actual economic and monetary policy. Every major central bank in the world today, most definitely including the Fed, essentially uses the playbook that he created. So, if we accept your amazingly casual dismissal of his relevance (based on what? That the fact that Marxist economics was fantasy somehow means that all economic theory is similarly wrong? Please.), then who should we refer to in answering your original question? You?
70 years ago, similar ideas were expressed by a short guy with a funny moustache; so you are saying 11 mil Greeks lack innovation by nature?
And you are still a member in this board?
Germans are industrious by nature?
What are you, some kind of Germanic suprematist?
Are you for real?
What's going on lately in MPnet, some kind of Nazi gathering?
Oh Cultural Corruption...oh wow.
One should research the Topic of Cartelization in Western Europe from 1901 to 1938. I did not knew the issues in European Historiography were SO deep.
1. You are being a tad pedantic here, Kotemore, and meaninglessly so. "The Prize in Economic Science in Memory of Alfred Nobel" is known and referred to by just about everyone as the Nobel Prize in Economics.
2. I won't debate with you whether Marx was the "truth", sociological or otherwise. No one knows what people will be thinking, say, a hundred years from now, but for any practical time horizon, it seems to me that the debate is over. It's hard to maintain world-historical relevance when the Eastern Bloc has disappeared and China thinks getting rich is glorious, and just about the only country still gamely waving the flag is Cuba, where cans of Spam are generally accepted currency. It is curious and revealing to see defenders of Marx talking about the "sociological" truth, when Marx was all about the primacy of the economic truth and efficacy of his analysis.
3. I see no reason to believe that systematic growth is at an end. If anything, the success of that economic system is so self-evident that it has co-opted all comers, including the aforementioned champions of communism. No human trajectory is a smooth curve. Statistically, ups and downs must be expected. But Marxists have been foretelling doom for the capitalist system for the last 150 years, and gloom and doom always experiences revival in the time periods, every half-century or so, when economic circumstances hit their cyclical lows. But despite this, I like my long-term chances.
4. Institutions don't "express" anything. The people who make up those institutions do; why is this meaningful? Because, from the point of view of economics, both ownership and economic benefit in these institutions accrue to millions of citizens, and is not divorced from them. It is not like feudalism, or even the age of the Robber Barons of a century ago, where one or a handful of individuals owned the means of production, whether land or enterprises.
1. But yet is not a Nobel. It is awarded by the Swedish Central Bank. When you receive the Prize (one such facsimile Prize is exposed at the BNB) there are NO mentions of NOBEL.
2. I never said THE TRUTH. I said a truth. And sociological at that.
3. Marxists have been avenged time after time with Governments waging war after war just to keep their hands on the populations they herd. Two world wars, countless crisis, monkey money and even diverse steps of colonial and neo-colonial conflicts. Time and again when your losses become unbearable you just erase them and start again.
4. Institutions do express everything. The dilution of property (Schumpeter/Merton) ownership just makes people have a remote grip on the system. Yet they are required to pay taxes, drive on the right side of the lane, who and what to marry. Teling the truth, being a Pater Familias. At the other end of the spectrum none of this. It is not about decadence. It is about values. What if every one decides not to pay taxes? Steal. Rape. Become an associal bunch like the egomaniacs that cannot accept their torts. Would they be bailed out *socially*. I am thiking that they would be hunted down and shot.
No, just observers of cultural stereotypes (they are stereotypes for a reason - they're at the very least partly true)
Or, failing that, GDP reports, number of global companies, working hours, and sustainability of economy, and debt payability
One country is passing that remark
One is not.
Guess which? Which super-innovative and world class Greek companies have I missed out on lately?
How many industrial processes and patents were made in Greece v made in Germany?
Which country lets you retire at 50 after working for only a couple of years recieving 14 checks per annum, for such unsafe occupations such as salon/hair workers?
Which country has a negative population growth rate, and which has one in freefall? The real truth behind the financial crisis is that if Germany was in the same position, people wouldn't mind so much. Because they would be able to pay it back. With all the insanity coming out of Greece, the insane padded welfare state, the nightmare demographics, the truth is NO ONE is expecting Greece to EVER pay back its debts. That Greeks are talking about more emphasis on growth is testament to that insanity. What does Greece have that people want? In what technological field does Greece lead, in what industrial or growth sector does Greece lead that would enable it to base a fantasy industry of fantastic growth? NO ONE AND NOTHING!
In short, setting aside decietfulness, paranoia, theyre-out-to-get-me attitude, tax evasion as a point of pride and other values endemic to modern Greek culture, people can see by the simple numbers that Greece has elected for suicide, and wants to take as many people down with it as it can.
This is the JDAM of trolling.
I think you misunderstand me, Nyusu. And perhaps we are not as far apart as first appears.
-I referenced Milton Friedman and monetarism because the original question asked about the causal link between money supply and employment/production. To me, it is a persuasive analysis.
-I don't think that there is any clear basis for saying that monetarism by itself, undiluted, "sometimes works, sometimes not", because I know of no case where a country ever pursued economic policy using purely monetarist tools.
-That said, I am not of the view that Keynesianism is wholly wrong (when I mentioned in the earlier post that Keynes is Friedman's only rival in terms of influence, I meant it, and with great respect). Most consequential countries that I know of have pursued a mixture of both approaches, all necessarily highly singular according to their own unique circumstances.
-What needs to be recognized is that Friedman and Keynes are not, in fact, fundamentally incompatible economics in terms of the nature of economic inputs and their causal effects. Keynes' prescription of government deficit spending to revive demand in a deflationary spiral is, in practical terms, just another way of printing money (e.g. increasing money supply).
Where Friedman and Keynes differ is in the methods for such money supply increase; Keynes emphasized the role of government spending, while Friedman believed that the central bank should play the primary role (through market institutions such as banks as its intermediaries).
Monetarists argue that deficit spending as a method for revival is 1) inefficient, since market mechanisms are inherently better at micro-resource allocation than the government is, and 2) it is inherently unstable, because governments have a weakness for abusing this tool, creating booms and busts of greater amplitude, of inflation followed by inevitable deflation.
Keynesians would argue that in times of grave economic crisis, the fastest way of getting money into circulation and reviving demand is through fiscal policy; monetary policy may eventually get there, but at not insignificant human cost and pain while monetary policy revs up.
My own view is that both sides have their merits, and this is why almost all governments use both sets of tools in some mixture in addressing economic crises. The issue, of course, is when/how to withdraw the government's outsized role in economic activity once the crisis has eased.
Last edited by juxtapose; 05-19-2012 at 08:48 AM. Reason: spelling
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