Mittwoch, 18. Februar 2015

A 3-professor racket to rob the German (and other) taxpayers. Stuart Holland propagates "A Modest Proposal for Resolving the Eurozone Crisis" (co-authored with Yanis Varoufakis and James K. Galbraith)

On the website City A. M. Prof. Stuart Holland (who is also the author of “Europe in Question – and what to do about it”), has published an article  under the title "How to fix the crisis: Germany must allow Greeks a New Deal" (Febr. 18, 2015).
In it, he propounds the idea of joint investments in the countries of the European Monetary Union through what amounts to government agencies (European Investment Bank and European Investment Fund).

In greater detail this idea (and others) have been propounded by him, Yanis Varoufakis (now Greek Finance Minister, probably the idea generator and main author) and James K. Galbraith in their paper "A Modest Proposal for Resolving the Eurozone Crisis", which I have criticized in my blog post "Varoufakis' Suckonomics 1001".

As for Mr. Hollands article, I had written 3 readers commentaries. Skince none of them got published, I defy the censors by making my rebuttals of Holland's suggestions available here.
(Don't know anything about the website "City A. M." and so have no idea as to why they suppressed my comments. And possibly others too, since at the moment there is no readers comment at all.)

Burkhardt Brinkmann • 20 minutes ago
⏲ Hold on, this is waiting to be approved by City A.M..

"Schauble [i. e. Wolfgang Schäuble] and Chancellor Angela Merkel assume that Varoufakis’ proposals would have to be funded by German taxpayers – an assumption that is entirely wrong." [Quote from article]

Nope. Germans are simply not dumb when they take the "Modest Proposal" for what it actually is: A sneaky way into Eurobonds and a European transfer mechanism.
For details, see my blogpost "Varoufakis' Suckonomics 1001".

Burkhardt Brinkmann • 13 minutes ago
⏲ Hold on, this is waiting to be approved by City A.M..

"Specifically, Europe could utilise fixed-interest borrowing such as that by which President Roosevelt financed recovery of the US from the 1929 crash and slump. Roosevelt did so by using US Treasury bonds to shift surplus savings into social and environmental investments, such as the Tennessee Valley project for the US deep south."   [Quote from article]

I very much doubt that those investments were anywhere near the scope (in proportion go GDP) that the Modest Proposal is suggesting.
Plus the MP is not targeting dams and other such (immediately) productive Investments, but health, education and urban renewal.

Obviously, this can only mean that the EIB builds stuff that the governments lease - and eventually buy (this being the only way for the EIB to recover the money necessary to redeem its own debt). So basically what the MP is up to is an increase in government debts off the governments' books. Which of course won't help Greece to increase their fiscal revenue, or to (directly and within a short period reasonable time) increase productivity and production.

Burkhardt Brinkmann • 2 minutes ago
⏲ Hold on, this is waiting to be approved by City A.M..

"Varoufakis and I have explained in The Modest Proposal (our book on the subject) is that Europe already has the financial institutions that could resolve not only the Greek crisis but also the Eurozone recession"   [Quote from article]

 The problem is not one of institutions, but of who picks up the tab at the end. And with the MP it will be the German (etc.) taxpayers having to foot the bill for even more mediterranean "Investments" (with even more money being dealt out for the creation of land-registry offices, that so far have never materialized in Greece).
And how would it help Greece, if the EIB would invest in Germany? (Say, in the new Berlin Airport „wink“-Emoticon )
So actually, the MP is not a remedy for the economic ills of the continent, and definitely not the once ones in Greece.
It's a back door into a transfer Union and into Eurobonds, where the German etc. taxpayers would eventually (have to) guarantee Greek debts.

A cunning little idea by Mr. Varoufakis and his friends - but not a good one for Germany etc.
And, eventually, not even a good one for Europe. Because foreseeably money so easily raised and so lavishly spent (eventually, of course, the investment decisions would be guided not by business rationale but by political considerations and political bargaining) would get squandered. (Not only in Greece - but there with the maximum likelyhood).

And an extra comment here: I HATE CENSORSHIP!

Addendum Febr. 19, 2015
My 2nd and 3rd comment are now visible underneath the article. So only the 1st one has been censored away. (Could be that their rules there don't allow links.)
Addendum Febr. 23, 2015
A good amount of biographical information on Yanis Varoufakis, and (of special interest for the present blog post!) about his relation with Stuart Holland and James K. Galbraith is contained in the article "Yanis Varoufakis: Germany’s nemesis" by James Bone in the British magazine "Prospect" (Febr. 19, 2015).

ceterum censeo
Zerschlagt den €-Gulag
und den offensichtlich rechtswidrigen Schlundfunk der GEZ-Gebühren-Gier-Ganoven!

Textstand vom 23.02.2015.
Für Paperblog-Leser: Die Original-Artikel in meinem Blog werden im Laufe der Zeit teilweise aktualisiert bzw. geändert.

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