Greek gov't bonds downgraded to junk status, Eurozone in trouble

That was a tricky move, there. If I say yes, I'm cheering for copious blood to flow, eh? Well, how about this. If things are bad enough that military action is merited, then you get in and get out and screw the moans of the international softies because half-way war is doomed to fail.

I agree.

But that doesn't mean I condone just anything in the name of war. If you're killing people in order to achieve a strategic objective, and you genuinely and justifiably believe that the course you're taking is the one available to you that's most likely to achieve that objective, then I would consider it a justifiable act of war. (The justness of the war itself is another matter, of course.)

On the other hand, if you're killing out of revenge, or hatred, or because you're out of ideas, or just because you like it and think you can get away with it, then I believe you should be tried and hanged.

It's probably safe to say we have different thresholds for "genuine and justifiable". That said, I don't really want to derail this thread. Perhaps I'll put up another one later, because we recently had a fairly good case study on the results of "nice war" in Afghanistan.

Originally Posted by dteowner
It's probably safe to say we have different thresholds for "genuine and justifiable". That said, I don't really want to derail this thread. Perhaps I'll put up another one later, because we recently had a fairly good case study on the results of "nice war" in Afghanistan.

Yes, very likely. And, good idea.

(Oh, and, re Afghanistan—that is interesting, because it really is a perfect laboratory for war. We've got lots of case studies for different kinds of war there. The Soviet style was rather different from yours, for example…)

The markets have been having second thoughts about the European situation lately. The euro is down, and there's a fair bit of uncertainty about what happens next.

The problem has to do with governance. That trillion-dollar package still needs to be approved by the national parliaments, and until it's actually done, there's room for uncertainty, and markets hate uncertainty: it could still fall apart, and if it does, we're right back where we started.

The other uncertainty relates to the macroeconomic impact of the austerity measures being planned. It'll certainly hit the directly affected countries hard, but it's impossible to know how hard, and how long the adjustment will take.

While I'm feeling less sanguine about this shit than last week, I'm still fairly confident that we'll sort out this mess. In the meantime, the weaker euro will help us export our way out of trouble. We built this house, and now it's up to us to fix it.

To go off on a bit of a tangent… people who believe in Austrian economics, such as our mudsling here, say that if we put ourselves on the gold standard, wages and prices would deflate as the economy grows, keeping things in balance. I wonder how come actually observing deflation in practice completely fails to dent their faith?

The weaker Eurozone countries are now in the same situation as a country that's on the gold standard—their wages and prices need to go down relative to their neighbors, but they have no say over the value of their currency; they can't devalue the euro any more than they could devalue gold. Reality being what it is, this is, indeed, what is happening. But it is very slow, and very very painful. Latvia has unemployment around 22%. According to Paul Krugman's arithmetic, the wage level there has to fall by 20-30% relative to Germany. Two years into their adjustment, they've fallen by about 4%.

Meaning: prices and wages are sticky. People are incredibly reluctant to accept wage cuts. Only prolonged and very severe unemployment will do the trick. That's why fiat currencies are useful—they can always be devalued, effectively imposing a wage/price cut on everybody. And that's the major problem the eurozone is struggling with—with economies as different as Greece and Germany, there just isn't an exchange rate that would be right for both.

But there's more to monetary policy—and monetary unions—than just arithmetic. This is IMO what many folks on the other side of the Atlantic—such as Paul Krugman—easily miss. I think the euro will survive, and Europe will come out of this crisis stronger and less out of balance… and I think that some of this painful but ultimately beneficial structural change could only happen with the constraint of a common currency.

Greece's problems are primarily of governance, and if they were still on the drachma and could just devalue it, they would be in another kind of trap: it would be politically much cheaper just to apply the short-term Band-Aid of devaluation while skipping the surgical intervention needed to cure the structural problems causing the crisis. That would put off the day of reckoning a bit further, but it would come—and the shape it would take would be a collapse of the currency, up to and including hyperinflation.

IOW, from where I'm at, the real problem is governance; the difference the euro makes is that it brings the crisis to a head earlier and puts more pressure for real, structural changes. Tools of monetary and fiscal policy are only useful if they're used sensibly; a crappy government is in trouble no matter what currency it uses, it just gets a different set of acute problems once it runs into trouble.

I fully agree with you Prime Junta. Basically it's the only problem. It's not hard to understand that a capable governance could see the problems coming and be better prepared.

Just for the information, last night i was watching a documentary about the Greek crisis. The head of the European parliament was being interviewed and he was acusing the Greeks about the wrong numbers they gave to them. He also told, as an example, that he remembered a situation where the Greek balance had a specific expense of 493 million dollars and when he asked why such a big expense, the Greek team with a phonecall to the economic minister turned the number to 93 million. And he said to the interview: "You can't do that and especially with a phonecall"

WTF????? You accepted it you worthless skum. I wonder how much money entered your pocket.

"ahem" not dollars, euro……hehe

Originally Posted by akarthis
WTF????? You accepted it you worthless skum. I wonder how much money entered your pocket.

I'd be a bit surprised if any of it entered his pocket, at least directly. Corruption at the EU level isn't quite that blatant; it's about dealing in favors, cushy jobs, making trades in supporting/opposing this or that initiative, and so on.

Originally Posted by dteowner
In a total off-topic, I simply MUST point out that there wasn't any wailing about civilian casualties from that there picture. Scenes like that were considered signs of victorious combat, not prompts for international "strong condemnations".

First of all there werent many. Civilian casualties were pretty low on the western front during WW1, as slow armies and static fronts gave people time to evacuate. Most combatants also stuck to existing international treaties when dealing with foreign civilians, regardless of the theatre. The main exception was probably Russian treatment of jews (with pogroms at the slightest accusation of collaboration with Germans or Austrians) in Eastern Europe.

The one country that occasionally did go for civilians (Germany, mostly because that was the only country to fight on foreign soil in Western Europe) wasnt spared from international condemnation either. You might want to look at the justifications for the US joining the war. In addition to self interest (unrestricted submarine warfare is a bit annoying to a country with a large merchant marine)) and successful British propaganda were accompanied by genuine moral outrage.

And WW1 had a profound impact on Europe. Optimism and belief in democracy gave way to a sense of doom and gloom and very nasty ideologies like fascism and communism. That war was the mother of future disasters… The military leaders who knowingly threw Europe into a war that they knew could destroy civilisation should have been drawn and quartered.

The picture was actually from Dresden after "Bomber" Harris's visit.

But other than that, yeah, I agree. About the only good thing you could say about WW1 is that it was the last European war that targeted primarily combatants. But boy were *they* ever targeted…!

easy choices, hard decisions. I wanted to share this with you

http://www.youtube.com/watch?v=dQGkP68AVTI

Here's one of the most important political thinkers in recent history discussing the economic crisis on Fox News. Not very encouraging for us Europeans. (Short clip, well worth watching IMO.)

[ http://www.youtube.com/watch?v=kBLnT…layer_embedded ]

(Oh, and: respect@Cohn-Bendit.)

As if Greece didn't have enough problems, now they're being invaded by frogs…

http://news.yahoo.com/s/ynews/ynews_wl2271

O, I thought you meant the french…..

Haha, never heard that…….Well, most Greeks would say that even frogs are going to demostrations to protest!!

Another one totters:

http://news.yahoo.com/s/ap/20100604/…us_wall_street

Meanwhile, the spokesman for Hungary's prime minister described the country's economy as being in a "grave" situation. However, he said, the government is ready to avoid a crisis like the one being faced by Greece, which had to be bailed out by the European Union. Spain and Portugal are also struggling.

And meanwhile, us export-driven economies are making out like bandits, as the currency declines.

Rum thing, the euro.

First Greece , now Ireland…… where r u Prime Junta ? ? ? Are u ready to give (again!) money from your taxes to help Ireland????? And then again for Spain , Portogual ?????

It appears he has been left dry of internet access from giving too much!

He's got a blog he's active with; he just doesn't post here anymore.