Eric Janszen Interviews Alex Jurshevski – Part I: Crisis of consensus

[cjppjc]

Re: Eric Janszen Interviews Alex Jurshevski – Part I: Crisis of consensus

Hopefully we all get sick of arguing and just live on a smaller scale! .

The trick is in what one emphasizes. We either make ourselves miserable, or we make ourselves happy. The amount of work is the same.
C. Castaneda

[marvenger]

Re: Eric Janszen Interviews Alex Jurshevski – Part I: Crisis of consensus

It is a neat trick!

[oddlots]

Re: Eric Janszen Interviews Alex Jurshevski – Part I: Crisis of consensus

Canada and new zealand consolidated their finances within the context of a relatively benign global economy, thus allowing these countries to achieve simultaneously austerity and growth. That context doesn’t exist today. Even if there were a political consensus in e.g. greece, global austerity [which appears to be in the cards for the immediate future] will negate any progress that might be accomplished by local austerity, because global austerity will preclude the possibility of significant growth. The global economic community resembles more and more a circular firing squad.

The consensus required for effective policies is not only national, within each nation state, but global. Good luck to us.

Devil meet details. Nicely said.

[oddlots]

Re: Eric Janszen Interviews Alex Jurshevski – Part I: Crisis of consensus

I'd really love to know what Jurshevski thinks of the argument Rob Parenteau has been making. Parenteau's point is that everyone (i.e., different sectors) can't de-lever at the same time without causing complete collapse. In this regard, the reference to diminishing returns on "stimulus" is true but beside the point: the objective is to keep the patient alive not catapult him into the land of milk and honey. Any pulse will do.

The point of Parenteau's argument in our current circumstance is this: you cannot turn Austrian overnight. The insanity of the boom is mirrored by the insanity of the remediation efforts afterwards. It doesn't take much time to get the boat rocking hard (a moment, in historic time) but it sure takes a long time for it to stop.

I appreciate the point of view of someone in the trenches doing the workouts so that, as the nursery ryhme would have it "we can get home tonight", but I'd really also like to know how he thinks we're going to square a circle: too many people want suddenly to save when no-one wants to spend. How's that going to work in the trenches or anywhere else?

[ViC78]

Re: Eric Janszen Interviews Alex Jurshevski – Part I: Crisis of consensus

Does Fiscal Austerity Reassure Markets?


Consider, if you will, the comparative cases of Ireland and Spain. Both countries appeared, on the surface, to be fiscally responsible until the crisis hit, with balanced budgets and relatively low debt. Both discovered that this was an illusion: revenues were buoyed by immense real estate bubbles, and when the bubbles burst they plunged into deficit — and found themselves potentially on the hook for large bank losses.
The countries responded differently, however. Ireland quickly embraced harsh austerity; Spain has had to be dragged into austerity, and still faces major political unrest.
So, how’s it going? This article is typical of what you read: it describes the Irish as doing what has to be done, while the Spaniards dither. And it has good things to say about how the Irish response is working:

Much bitterness but also stoicism; markets impressed by Irish resolve to bite the austerity bullet.

Well, I guess that’s right — if by “markets impressed” you mean a CDS spread of 226 basis points, compared with 206 points for Spain; not to mention a 10-year bond rate of 5.11 percent, compared with 4.46 percent for Spain.


http://krugman.blogs.nytimes.com/201...ssure-markets/

[rchdenton]

Re: Eric Janszen Interviews Alex Jurshevski – Part I: Crisis of consensus

Way to go. I've said before (can't get the search engine to find it) that the US is where NZ was 20 - 30 years ago and NZ was worth studying. We are exposed to the world in a way that others are not, we are a small economy and so affected more rapidly by whatever winds may blow.

The article has one massive, whopping, mind boggling oversight though. Your graph shows NZ govt and corporate debt BUT NOT PRIVATE DEBT (apologies for shouting), You guys are just so much more knowledgeable about this stuff than me - how can you possibly consider a countries debt without looking at all of it?

[rchdenton]

Re: Eric Janszen Interviews Alex Jurshevski – Part I: Crisis of consensus

Don't know the details but I think NZ hit a wall. Interestingly I do think Canadians and New Zealanders have a much lower talk to action ratio than the US.

It helps not believing you are the bee's knees. One of Britain's problems after WW2 was everyone expected things to get better faster than was in fact possible and so managed to stuff up its industry big time. Lots of expectations of entitlement amongst the workers. Lots of unfulfilled promises by government.