Τετάρτη, 6 Ιουνίου 2012

marilena: Ancient Greek solution for debt crisis By Armand D...

marilena: Ancient Greek solution for debt crisis By Armand D...: What advice would the ancient Greeks provide to help modern Greeks with their current financial worries? 1. Debt, division and revolt. ...

Ancient Greek solution for debt crisis By Armand D'Angour University of Oxford

What advice would the ancient Greeks provide to help modern Greeks with their current financial worries?
1. Debt, division and revolt. Here's the 6th Century BC news from Athens.
In the early 6th Century BC, the people of Athens were burdened with debt, social division and inequality, with poor farmers prepared to sell themselves into slavery just to feed their families.
Revolution was imminent, but the aristocrat Solon emerged as a just mediator between the interests of rich and poor. He abolished debt bondage, limited land ownership, and divided the citizen body into classes with different levels of wealth and corresponding financial obligations.
His measures, although attacked on all sides, were adopted and paved the way for the eventual creation of democracy.
Solon's success demonstrates that great statesmen must have the courage to implement unpopular compromises for the sake of justice and stability.
2. What happens next? The Delphic oracle
Ancient Delphi was the site of Apollo's oracle, believed to be inspired by the god to utter truths. Her utterances, however, were unintelligible and needed to be interpreted by priests, who generally turned them into ambiguous prophecies.
Greek vase
Email from the past? Not an ancient Greek laptop, but a writing tablet on a vase from 470 BC
In response to, say, "Should Greece leave the euro?" the oracle might have responded: "Greece should abandon the euro if the euro has abandoned Greece," leaving proponents and opponents of "Grexit" to squabble over what exactly that meant. It must have been something like listening to modern economists. At least the oracle had the excuse of inhaling the smoke of laurel leaves.
Wiser advice was to be found in the mottos inscribed on the face of Apollo's temple at Delphi, advocating moderation and self-knowledge: "Know yourself. Nothing in excess."
3. Nothing new under the sun: The sage Pythagoras
If modern Greeks feel overwhelmed by today's financial problems, they might take some comfort from remembering the world-weary advice from their ancestor Pythagoras that "everything comes round again, so nothing is completely new".
Pythagoras of Samos was a 6th Century BC mystic sage who believed that numbers are behind everything in the universe - and that cosmic events recur identically over a cycle of 10,800 years.
His doctrine was picked up by the biblical author of Ecclesiastes in the 3rd Century BC, whose phrase "There is nothing new under the sun" is repeated more than 20 times.

If you look at the picture at top of the story, the young man with a laptop on a Greek vase from 470 BC (in fact, a writing-tablet) seems to prove the proposition.
Reconstruction of the Odyssey
Worse things happen at sea: Homer's Odyssey shows the spirit of fortitude in adversity
4. Mind you, it could be worse… Odysseus and endurance
"Hold fast, my heart, you have endured worse suffering," Odysseus exhorts himself in Homer's Odyssey, from the 8th Century BC.
Having battled hostile elements and frightful monsters on his return home across the sea from Troy to his beloved Ithaka and wife Penelope, Odysseus here prevents himself from jeopardising a successful finale as a result of impatience.
The stirring message is that whatever the circumstances, one should recognise that things could be, and have been, even worse. Harder challenges have been faced and - with due intelligence and fortitude - overcome.
5. Are you sure that's right? Socrates and tireless inquiry
"The unexamined life is not worth living for a human being," said Socrates.
By cross-examining ordinary people, the philosopher aimed to get to the heart of complex questions such as "What is justice?" and "How should we live?" Often no clear answer emerged, but Socrates insisted that we keep on asking the questions.

Statue of Socrates outside the Bank of Greece in Athens
Fellow Athenians were so offended by his scrutiny of their political and moral convictions that they voted to execute him in 399 BC, and thereby made him an eternal martyr to free thought and moral inquiry.
Socrates bequeathed to humanity a duty to keep on thinking with tireless integrity, even when - or particularly when - definite answers are unlikely to be found.
6. How did those jokers end up in charge? Aristophanes the comedian
The most brilliantly inventive of comic playwrights, Aristophanes was happy to mock contemporary Athenian politicians of every stripe. He was also the first to coin a word for "innovation".
His comedy Frogs of 405 BC, which featured the first representation of aerial warfare, contained heartfelt and unambiguous advice for his politically fickle fellow citizens: choose good leaders, or you will be stuck with bad ones.
7. Should we do the same as last time? Heraclitus the thinker
"You can't step into the same river twice" is one of the statements of Heraclitus, in the early 5th Century BC - his point being that the ceaseless flow of the water makes for a different river each time you step into it.

While change is constant, different things change at different rates. In an environment of ceaseless flux, it is important to identify stable markers and to hold fast to them.
A sharp pupil pointed out "in that case you can't step into the same river once", since if everything is constantly in flux, so is the identity of the individual stepping into the water.
Bond markets, debt and bail-outs must feel like a similar challenge.

8. Tell me the worst, doctor. Hippocrates faces the facts
Western medicine goes back to Hippocrates, late 5th Century BC, and doctors still take the "Hippocratic oath". An extensive set of ancient medical observations details how patients fared when they were treated by means such as diet and exercise.
What is exceptional in ancient thinking about health and disease is the clear-sighted recognition that doctors must observe accurately and record truthfully - even when patients die in the process.
Magical or wishful thinking cannot bring a cure. Only honest, exhaustive, empirical observation can hope to reveal what works and what does not.
9. Seizing the opportunity: Cleisthenes and democracy
The ancient Greeks were strongly aware of the power of opportunity - in Greek, kairos. Seizing the moment - in oratory, athletics, or battle - was admired and viewed as an indication of skill.
In many cases, such temporary innovation, born of the moment, will be more enduring, especially if successive innovators build on its principles.
When the tyrants of Athens were deposed at the end of the 6th Century, the leading citizen Cleisthenes needed to think up a constitution that would cut across existing structures of power and allegiance.
He devised with amazing rapidity a system of elective government in which all the citizens (the Greek word "demos" means "the people") had a single vote - the world's first democracy.
The oracle at Delphi: Always ambiguous enough to be right afterwards, rather like modern economists
10. Big problem, long bath: Archimedes the inventor
Asked to measure whether a crown was made of pure gold, the Sicilian Greek Archimedes (3rd Century BC) puzzled over a solution.
The story goes that when he eventually took a bath and saw the water rising as he stepped in, it struck him that an object's volume could be measured by the water it displaced - and when weighed, their relative density could be calculated.
He was so excited by his discovery that he jumped out of the bath and ran naked through Syracuse shouting "Eureka!" - Greek for "I've got it!"
Finding the solution to a knotty problem requires hard thinking, but the answer often comes only when you switch off - and take a bath.
Armand D'Angour is a lecturer in classics at the University of Oxford and author of The Greeks and the New: Novelty in Ancient Greek Imagination and Experience and the forthcoming Eureka: Seven Principles of Innovation from Ancient Greece.


Δευτέρα, 4 Ιουνίου 2012

marilena: Christine Lagarde’s fairytale world

marilena: Christine Lagarde’s fairytale world: A few days ago the Head of the International Monetary Fund (IMF), Christine Lagarde, had the audacity to  suggest  that instead of ...

Christine Lagarde’s fairytale world

Lagarde 300x225 Christine Lagardes fairytale world

A few days ago the Head of the International Monetary Fund (IMF), Christine Lagarde, had the audacity to suggest that instead of resisting the neo-liberal austerity measures prescribed by her organization, in agreement with the EU and the European Central Bank, Greek citizens should focus on paying their taxes. Lagarde did not stop there. She later went on to add that she had more sympathy for ‘little kids from a school in a little village in Niger who get teaching two hours a day, sharing one chair for three of them, and who are very keen to get an education’ than for the tax-avoiding Greeks.
Now, it takes some nerve for someone like Lagarde to make such an outlandish statement. In my eyes, there is so much wrong about her view of the world and suggestions to improve it, that perhaps in a short piece like this one can only begin to unravel the mysterious and deluded inner world where I feel the Head of the IMF lives.
For starters it seems to me that Lagarde has resorted to the most insulting national stereotypes to dismiss the authentic suffering of the Greek people. Perhaps in her surreal world full of pink unicorns and fairies where everything – well, everything but Niger’s little kids— is perfect, the austerity measures imposed upon the Greeks are nothing but a blessing. Perhaps Lagarde believes that a nation that in her twisted understanding of the Euro crisis failed to control its budget and debts deserves to be punished. Who knows, perhaps she actually thinks that Greeks never paid taxes and that even now they don’t.
The reality, the harsh reality away from Lagarde’s fairy tales, is that taxes in Greece have increased tenfold over the past two years. And this has been accompanied by an evisceration of state services. At the moment even having access to basic prescription drugs is difficult — a situation that is likely to get worse in coming months since Greece has not been able to make payments to some major medical companies that supply the country’s drugs for the past 14 months. At the same time, electricity, water, and VAT bills have gone up significantly, while income tax has rocketed.
Lagarde’s strategy of dismissing one problem (the Greek crisis) by invoking another one (the plights of Niger’s children), both of which are to a large extent a result of the sort of “free”market capitalism that the IMF has so enthusiastically embraced and promoted, is shameless and sickening, and disguises common underlying problems. In the make-believe world that Lagarde inhabits, globalization produces only wealth; poverty, whether in Greece or Niger, is determined by local factors.
As for her concern about Niger’s children — ‘I have them in my mind all the time. Because I think they need even more help than the people in Athens’ — she can only be kidding, really. I had the privilege to visit the Republic of Niger last July, when an acute famine threatened the eastern part of the country. An estimated 800,000 children under the age of five were at risk of starving to death.
The crisis was tackled by the combined effort of a group of charities, including Save the Children and Oxfam, and by the then recently elected government of Mahamadou Issoufou, whose efforts went largely unnoticed by the international community. And the IMF? That IMF whose director worries so much about the children of Niger was nowhere to be seen. More worryingly, although the worst of the crisis seems to be over, there are still around 300,000 children in Niger today at risk of starvation. I would really like to know what Ms Lagarde has done, or plans to do about this problem, other than “worrying” about it.
Maybe she could listen to her own advice to the Greeks about paying their taxes? After all, she has a tax-free salary of 298,926 pounds a year. Maybe that would not solve much, but it would at least allow her to lead by example. I am no economist, but I guess that a figure of at least 30,000 pounds a year could well sort out the education of a few of those kids in Niger, who she always has ‘in her mind’.
Perhaps more importantly, she should think carefully before arrogantly playing politics with the suffering of the good men and women of Greece and Niger, two countries that have become poorer as Ms Lagarde and her employers get richer. What her callous attempt at playing off Greece against Niger actually reveals is that the brutal neoliberal policies promoted by the IMF are concerned only with generating private profits, and will do nothing to protect citizens, whether in Greece or Niger.
A few years ago ‘fortress Europe’ was criticized for erecting trade and immigration barriers that would consolidate the wealth of European citizens while maintaining global inequalities. The EU response to the global financial crisis, however, gives the lie to the notion that even the protection of European citizens was ever on the agenda. The only fortress MsLagarde and her employers are interested in is the one being erected around private capital.
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marilena: ΑΓΙΟΥ ΠΝΕΥΜΑΤΟΣ ΣΗΜΕΡΑ 4/6/2012

marilena: ΑΓΙΟΥ ΠΝΕΥΜΑΤΟΣ ΣΗΜΕΡΑ 4/6/2012


marilena: The facts are clear. This cruel austerity experime...

marilena: The facts are clear. This cruel austerity experime...: While the human cost of economic stupidity is all too visible, the world 's leaders are paralysed by their dogma A woman receives a...

The facts are clear. This cruel austerity experiment has failed

While the human cost of economic stupidity is all too visible, theworld's leaders are paralysed by their dogma

Sooup kitchen in Athens

A woman receives a free meal from a soup kitchen organised by a Greek humanitarian group in Athens’ main Syntagma Square. Photograph: Kostas Tsironis/AP
Last week was an awesome warning of where go-it-alone austerity can lead. It produced some brutal evidence of where we end up when we place finance above economy and society. The markets are now bettingnot just on the break-up of the euro but on the arrival of a new economic dark age. The world economy is edging nearer to the abyss, and policymakers, none more than in Britain, are paralysed by the stupidities of their home-spun economics. Yanis Varoufakis, ex-speechwriter for former Greek prime minister George Papandreou and now an economics professor in the US, said last week: "There is precisely zero chance of austerity working. It is the same as thinking you can escape from gravity by waving your arms up and down."
It could hardly be more sobering. Money has flooded out of Spain,Greece and the peripheral European economies. Signs of the crisis range from Athen's soup kitchens to Spain's crowds of indignadosprotesting in the streets against austerity and a broken capitalism. Youth unemployment is sky-high. Less visible is the avalanche of money flowing into hoped-for safe havens in the US, Germany and even Britain. The last time the British government could sell government bonds at interest rates as low as today's was in the early 1700s.
George Osborne and his acolytes proclaim this as a triumph of the government's economic policies. They are gravely mistaken. Rather it portends fears that the international economic order may collapse because if so many countries are simultaneously pursuing austerity, where's growth to come from?
Virtually everywhere you look there are signs of a weakening world economy. At home, manufacturing suffered its biggest plunge for three years, and this in an economy already suffering its longest depression since the 19th century. American jobs growth is petering out. Unemployment in Europe averages 11%. Even China witnessed a sharp fall away in factory activity in May.
Yet none of this should be a surprise. We live in the aftermath of one of the biggest financial and intellectual mistakes ever made. For a generation the world, with the London/New York financial axis at its heart, surrendered to the specious theory that lending and financial contracts could grow many times faster than the underlying economy. There was a blind belief that in a free market banks could not make mistakes. Free markets didn't make mistakes – only clumsy bureaucratic states made economic mistakes. Or so they said. Financial alchemists, guided by the maxims of free market fundamentalism, could make no such errors.
Except that they did. The result was the financial crisis of 2008. Had governments not underwritten their overstretched banks with trillions of dollars, euros and pounds, an even worse global slump would have ensued. But while the banks could continue trading, the hundreds of trillions of loans and financial contracts they had made did not go away.
And because governments had guaranteed their deposits, as in Ireland, or had to inject capital into them as Spain has been doing all last week, this private bank debt has steadily become public debt. Here is a classic case where all the gains were privatised, and all the losses were socialised. It was the much-maligned state that had to step in and clear up the mess left behind by the private sector. The free market wasn't so free after all – in fact it proved astonishingly expensive for the public purse. People across Europe still pay the price.
This is no solution. Overstretched banks have become more cautious about lending new cash; and even strong banks are caught up in the backwash because if they step into the breach they could fall into a vortex of falling property prices and declining economic activity, becoming weak in turn. So as banks stand aside from their crucial function of generating credit, governments and central banks must step in to generate the demand that has now disappeared.
But they have not done so to a sufficient degree. Part of the problem is that the more bank debt that governments guarantee, the less room for manoeuvre they feel they have – especially as their stagnating economies forces up welfare spending and depresses tax revenues.
But the larger problem is intellectual. The dominant ideology of the day – from the same roots that delivered the crisis – forbids it. A consensus stretching from US Republicans through to Angela Merkel's Christian Democrats via George Osborne's Treasury continues to claim that the state is the source of economic bad. The state threatens enterprise, invites damaging taxation, and is the root cause of spreading inflation. The state must balance the books just as the private sector must.
This is not just an economic but a moral necessity, they argue. Living within one's means rather than "maxing" out on debt appeals to American, British and German individualistic Protestantism. Inflation is even more a sign of moral degradation: it means reneging on promises, rewarding spendthrifts and penalising savers. We had the good years. Now we must take our medicine. The public and private sectors must retrench simultaneously worldwide. Enterprise and free markets will do the rest. The "march of the makers" will step in to fill the void left by public austerity measures.
This is a first-order moral and economic mistake. Human beings need each other for mutual support. In economic terms this means that no individual, either as a person or a company, can manage existential risk by themselves. That risk needs to be shared and mitigated otherwise the risk is not accepted. There would be no enterprise or innovation – the risks of failure too great. That is why there is a role for both private and public sectors. It is governments who provide the means through which we express our social obligations and pool our risks.
This is the heart of Keynesian economics – a different set of moral and economic propositions than those which prevail. Today we can see an almost laboratory experiment on a global scale of why Keynes was right and his detractors wrong. There is no doubt what Keynes would advocate now: a government-sponsored increase in demand co-ordinated across as many countries as possible and an acceptance of a temporary but closely managed increase in inflation to reduce the real value of debt.
The enormous legacy of private debt – whether in Britain, Germany, Spain, the US or Greece – and the fiendishly complicated way so many of the loans have been organised and distributed around the world financial system cannot be easily unwound. Sir Philip Hampton, chair of RBS, warned this week it might take a generation for RBS investors to recover their money.
The choice is thus stark. To commit to decades of economic stagnation, the break-up of the eurozone, the risk of trade protection and autarchic economic policies, the dismantling of the west's social contracts, the imposition of high unemployment and the political fallout that will follow.
Or to change course.
The technical means are relatively simple. Governments must replace targets for inflation with targets for the growth of prices and growth of output combined. Central banks should inject money into their financial systems by offering to buy new bank loans made to support new investment, new innovation or new infrastructure – helped by partial government guarantees.
Governments also need to increase demand. They can do this directly – with targeted and time-limited tax cuts or spending increases. They can also move indirectly, taxing the rich more aggressively and re-allocating the proceeds in tax cuts to those on middle incomes and lower who tend to spend more – along the lines that both presidents Obama and Hollande have proposed. There is also a case for a financial transactions tax – both to raise crucial revenue and to cap the growth and frenetic speed of financial transactions. Finance has become too powerful. It needs constraining.
Will any of this happen? The west is at a cross-roads, and although such proposals will be fiercely opposed by the British, German and American right they need to be beaten back. After all, it is their ideas that have brought us to this pass. It is not too fanciful to argue that the future of western capitalism depends upon how this argument plays out – and how quickly, if at all, there is a change of course.


marilena: Diamond jubilee Thames river pageant sets sail – i...

marilena: Diamond jubilee Thames river pageant sets sail – i...

Diamond jubilee Thames river pageant sets sail – in pictures The Queen and members of the royal family on board the Spirit of Chartwell royal barge cruise along with a 1,000-boat flotilla down the river Thames for her diamond jubilee

Jubilee Thames pageant: Queen Elizabeth waves from the royal barge 'Spirit of Chartwell'

Jubilee Thames pageant: Members of the Royal Family on the Royal Barge the

Jubilee Thames pageant: Prince Harry, Duchess of Cambridge and Prince William wave

Jubilee Thames pageant: Queen Elizabeth, Duchess of Cornwall and Duchess of Cambridge

Jubilee Thames pageant: Royal barge Gloriana leading the royal flotilla

Jubilee Thames pageant: The Thames Diamond Jubilee Pageant

Jubilee Thames pageant: Revellers line the route during the Diamond Jubilee River Pageant