Generations lost

«(…)Japan’s 20-year battle with stagnation is a warning to the West. The country failed to purge its banks swiftly and relied on Keynesian fiscal projects to prime pump the economy each time growth stalled. The result was a string of false dawns, with public debt ratcheting ever upwards. The Bank of Japan dabbled with quantitative easing, but too little and too late. The bonds were purchased from a moribund banking system, a recipe for failure since this has little effect on the M3 money supply. “Japan was never early enough or ambitious enough in its use of monetary stimulus,” said Jamie Dannhauser from Lombard Street Research.(…) For Japan, the lost decades are tunning into a lost century.»

Berndadette Segol claims about youth unemployment in Europe that passing on risks and costs to customers in green economy would improve social justice and save the lost generation.

Jim Manzi suggests ironically that social science has been quite successful at demonstrating the failures of social engineering. The golden age of government-funded social-policy experiments was the late 1960s into the early 1980s. What good social science has revealed—that parents matter, genes matter, race matters, sex matters, and IQ matters — is the opposite of what the vast majority of social scientists wanted to discover.

Nos bordéis de Lisboa todas as meninas são miguelistas

«Portugal sofre uma das crises mais dolorosas e exigentes. De facto existem vários tipos de choques económicos. Os piores vêm das guerras, que arruínam a própria sociedade. Existem também recessões por catástrofes, carestias, obsolescências, mudanças de hábitos. A mais irritante é a crise financeira, que aperta o cinto para pagar tolices da euforia anterior.(…)

Mas muito pior que a dimensão do encargo são os enviezamentos que o delírio impôs na estrutura produtiva. Nos anos de loucura muita gente trabalhou em actividades rentáveis apenas por endividamento; muitas empresas faziam negócios porque os clientes se empenhavam. Nisto os gastos do sector público destacam-se, mas havia muito mais. O resultado é que boa parte da nossa economia é balofa, produzindo a preços exagerados coisas que ninguém quer.

Assim o que hoje se sofre não é apenas a travagem de consumo gerada pela austeridade financeira. Largas centenas de milhar de trabalhadores terão de mudar de vida, porque os seus empregos artificiais nunca vão voltar, mesmo que o crescimento retome. Milhares de empresas têm de fechar ou mudar de sector porque o negócio acabou. Importante percentagem da sociedade terá que encontrar actividades realmente úteis. Portugal sofre uma das crises mais dolorosas e exigentes: a forçada reestruturação de quase vinte anos de distorção produtiva.»

I would not do a damn thing

It´s often said the swedish Anders Borg is Europe’s best finance minister. His response to the crash was a permanent tax cut to speed the recovery. At the time, everyone told him it was madness. Last year, Sweden celebrated the elimination of its deficit. Borg is a numbers man, and famed for his 30 pages — dense arguments for tax cuts, with graphs and complicated maths. Borg was alone, but he had complete faith in the strength of his arguments, which he had rigorously researched.

A ‘supply of workers’ not a ‘supply of jobs’. If welfare pays more than work, why work? He wanted to increase the incentive to work by cutting in-work taxes, creating more people looking for jobs. This is part of his supply-side logic. Borg published a massive book explaining how his reforms will adjust the labour market and lower structural unemployment. Borg’s tax cuts almost entirely paid for themselves. Even Borg, did not quite expect the stimulatory effect of his tax cuts. Subsequent studies suggested that the money saved — in lower dole costs, and extra VAT receipts from people spending their newly-earned money — recouped up to 85 per cent of the cost of the tax cut.

Borg was a rebel, a libertarian, there’s a famous video from the late 1980s when he was on the telly saying that a country’s wealth comes from its people, not its government. And, when asked what he’d do if elected, he replies: ‘If I was prime minister I would not do a damn thing — then people would be free to decide for themselves’.

Dos Países Baixos

A solução para a crise grega é «(…)the Greeks all hand in their money to the banks. The government then pays back all its debts by distributing pieces of pizza or pancake to its creditors and leaves the eurozone, reintroducing the drachma. Anyone who hides their euros is fined. Once the debts have been paid the country can return to the eurozone.» Aos 11 anos, Jurre Hermans sabe mais de economia que muitos que para ai oiço.

Os piegas papa-batatas-fritas ficaram em quarto lugar no ranking da felicidade, atrás de dinamarqueses, finlandeses e noruegueses ainda assim, queixam-se da vida – por isso ficaram em quarto, – “(…)the Dutch are content with their own lives, which they know a lot about. They are critical about society, which they do not know much about. They have clean water, good health care, ample food, freedom of expression and reliable government. You would think they had nothing left to complain about. If you want to make people even happier, invest in mental health. Half of those who are unhappy have mental health problems(…)”, uma grande verdade professor Ruud van Veen.

Quando toca a afiar a faca e cortar no orçamento o governo laranja não se poupa a esforços, faz amanhã um mês que está reunido com o partido que no parlamento lhe garante o lugar no poder, mesmo não sendo a melhor companhia para o “baile” juram mais duas semanas de cumbersa.

“Vender” Europa

Anda o ministro Gaspar de pdf munido a tentar mudar a impressão que lá fora têm de nós. A rapaziada lá fora ainda não está completamente convencida. O pior, é se paga para ver.

«(…)Germany and its debt brake are currently in the middle of a major fiscal policy experiment and the outcome is far from certain. The successes noted for the time being are mainly due to an economic recovery and the technically successful manipulation of figures by the federal government, but the real test lies ahead. It was obviously a serious mistake to accept a debt brake so similar to the German model so quickly at the European level. Given these basic errors, which are hard to reverse, and faced with the difficulties and problems of the German example in specifically reshaping the German debt brake, European fiscal policy should instead go its own way and investigate thoroughly all the ways in which it can be reshaped.» Sobre regras de ouro ficamos conversados!?

O italiano Mario Monti anda pelo mundo a dizer que a culpa da crise é da Alemanha e da França, que a Espanha e a Holanda vão rebentar com a Europa e que na Itália está tudo bem. Sério, não é!? Ou como mesmo ele metaforizou “O ladrão de carros que antigamente roubava 3 carros por dia e agora rouba apenas, passou a ser mais sério?”. Não se esperaria melhor do reitor da Universidade de Bocconi.

Views, not News

«Sober realism is important because we are heading for a period of enforced austerity and low growth. Individuals, companies, and countries will have to reduce levels of debt. On top of this we will have to save even more to finance pensions and long-term healthcare. Lack of growth will mean more must be saved than previously planned because we can no longer expect soaring stock markets to boost our wealth. Meanwhile investment will fall, because banks will have to increase their capital holdings (sensibly) and therefore lend less. The ‘baby-boom’ generation will draw down on savings and assets, decreasing their value, while growth in emerging markets will keep commodity prices high. And underlying all this are the unquantifiable, but in my opinion real, risks of climate change.»

«In finance, conservatives should undo neo-liberal deregulation, to reduce conflicts of interest and moral hazard. There has to be a middle way between a French-style attack on all financial innovation, and a naïve UK-style belief that nothing can ever go wrong. Regulators must let banks experiment and develop new products, without being swept along with the tide when bubbles begin to develop.»

«But the main requirement is for individuals, companies and governments to act responsibly; that cannot be imposed by any ideology. In particular, there is an obvious mantra for European governments: if you don’t want to be pushed around by the bond markets, don’t borrow on the bond markets. You can either spend less money, or tax your citizens more, or (if you are not in the Eurozone) print more money. That’s the choice; you can no more spend without limit than you can repeal the law of gravity.»

Growsterity

«Mr. Katainen, the 40-year-old leader of one of the euro area’s last remaining triple-A-rated countries, spoke more optimistically in his public comments of “growsterity,” a form of austerity that allows for some targeted measures to encourage growth, like Finland’s decision to grant tax relief for research spending by companies despite sharp budget cuts elsewhere.

“It’s clear that if you cut expenditures and raise taxes, it will weaken the growth in the short term,” he conceded. “But at the same time it will strengthen the credibility of the country. And once you earn back the credibility, the growth will follow, as we have seen in Ireland, for instance, or in Latvia, especially.”»

(…)“I have no money,” he said. “I don’t even put out bottled water for my guests. I just fill a pitcher from the tap and pour.”