Tuesday, May 28, 2013

Reuters — Germany fears revolution if Europe scraps welfare model

German Finance Minister Wolfgang Schaeuble warned on Tuesday that failure to win the battle against youth unemployment could tear Europe apart, and dropping the continent's welfare model in favor of tougher U.S. standards would spark a revolution.
Germany, along with France, Spain and Italy, backed urgent action to rescue a generation of young Europeans who fear they will not find jobs, with youth unemployment in the EU standing at nearly one in four, more than twice the adult rate.
"We need to be more successful in our fight against youth unemployment, otherwise we will lose the battle for Europe's unity," Germany's Schaeuble said.
While Germany insists on the importance of budget consolidation, Schaeuble spoke of the need to preserve Europe's welfare model.
If U.S. welfare standards were introduced in Europe, "we would have revolution, not tomorrow, but on the very same day," Schaeuble told a conference in Paris.
Reuters
Germany fears revolution if Europe scraps welfare model
(h/t Zero Hedge)

Even eurocrat neoliberals are not dumb enough to think that Europeans will accept imposition the market state, pace Hayek. That's only for the US (Reagan, Clinton) and UK (Thatcher, Blair).



24 comments:

F. Beard said...

If we continue to have socialism for the rich (e.g. the government-backed credit cartel, borrowing by the monetary sovereign, etc.) then it follows that we'll need socialism for their victims too.

Roger Erickson said...

Well said, F. Beard!

It's astounding that the perpetrators of the euro-depression are now the ones saying they have to stop the effects of what they want!

This should get interesting.

paul said...

It's all "socialism" anyway if by that one means the government creates the spending that supports incomes and "chooses" where the spending goes.

The problem is unfair distribution of gains re productivity.

susanne pohle said...

Never would the European people accept the shlashing of the welfare state except by those who pretend to defend it.

F. Beard said...

The problem is unfair distribution of gains re productivity. paul

Yep. Due to the government-backed counterfeiting cartel, the banks, jobs have been automated and outsourced away with the workers' own stolen purchasing power.

But suppose all large corporations were equally owned by all the citizens of a country. Wouldn't outsourcing and automation then be seen as a universal blessing to that country instead of a curse?

Clonal said...

F Beard,

Spoken like a true Christian communist. And I mean both those words as compliments.

F. Beard said...

Well, I'm not a communist. I'm an anti-fascist. And the ENTIRE Bible ("All Scripture is inspired by God ..." 2 Timothy 3:16-17) is my guide.

And I think the common stock of all large corporations should be equally redistributed*, not owned by government in trust.

*In addition to an equal distribution of new fiat at least until all deposits are 100% backed by reserves.

Matt Franko said...

F.,

Finish the scripture there:

"16 All scripture is inspired by God, and is beneficial for teaching, for exposure, for correction, for discipline in righteousness,
17 that the man of God may be equipped, fitted out for every good act...."

It's beneficial FOR TEACHING.... not 'for adaptation of old laws documented there...'

What is the OT teaching you?

rsp,

paul said...

F.Beard

I'm in favor of worker-owned companies in a big way. They can accumulate wealth in common stock as you advocate...that is a form of savings....savings doesn't lubricate or promote commerce...we still need money for that.

Common stock won't replace the credit system...it's something that can only work once a company has value...and that takes investment capital...where does that come from?

The question we have to ask is why aren't there more worker-owned businesses...they are few an far between.

F. Beard said...

I'm in favor of worker-owned companies in a big way. They can accumulate wealth in common stock as you advocate...that is a form of savings....savings doesn't lubricate or promote commerce...we still need money for that. paul [bold added]

No, we don't, except for fiat for taxes. Instead, common stock, in addition to being a store of value, can serve as money too but without the need to borrow since common stock can be spent into existence.

Common stock won't replace the credit system paul

I'm not against purely private banks.

...it's something that can only work once a company has value...and that takes investment capital...where does that come from? paul

Real capital exists apart from financial capital. Those with real capital, including skills and talent but also land, buildings, machinery, etc., can consolidate that capital for economies of scale by forming a common stock company with little need for someone else's financial capital. Instead, the newly formed company can issue and use its own common stock for money and redeem it for the goods and services the company produces.

The question we have to ask is why aren't there more worker-owned businesses...they are few an far between. paul

Why "share" with the workers when one can legally steal their purchasing power instead?

paul said...

"Why "share" with the workers when one can legally steal their purchasing power instead?"

Workers have the same opportunities for entrepreneurship anyone else has...why don't they take advantage of it?

I say it's because they don't have the wealth it takes for a startup and no one will finance them without strings attached...probably leaving them without control.

F. Beard said...

Workers have the same opportunities for entrepreneurship anyone else has...why don't they take advantage of it? paul

What? Because we all have somewhat of an opportunity to be be thieves ourselves, the system is therefore good?

paul said...

"What? Because we all have somewhat of an opportunity to be be thieves ourselves, the system is therefore good?"

Thieves how? Change the system how?

Change human nature? Fuhgeddaboutit.

You haven't proposed a single viable alternative system, just patches to fix something...I'm not sure anymore what you are actually trying to change.

Issuing company stock to workers won't change the investment dynamic...at least I can't see how. Maybe someone else can explain it to me.

F. Beard said...

@Matt,

Thanks for completing the Scripture quote because I really do mean ALL.

What is the OT teaching you? Matt Franko

1) Profits are good but profit taking (at least from one's fellow countrymen) isn't. So that necessarily rules out usury and stock dividends but it neatly leaves in the possibility of common stock as money.

2) "Thou shall not steal" even by subtle means and restitution is due the victims.

3) A family was not to be permanently dispossessed of its agricultural land.

4) Provision for the poor is required and oppression of them is forbidden.

5) "One hand full of rest is better than two fists full of labor and striving after wind" Ecclesiastes 4:6

6) Periodic debt forgiveness is required for one's fellow countrymen.

Some other stuff probably that escapes me at the moment.

Roger Erickson said...

paul said: "The question we have to ask is why aren't there more worker-owned businesses ..."

I'd say for the same reason that there have been few, large-scale democracies in history.

Increasing organization + numbers simultaneously is exponentially difficult.

One consequence is that every new valuable option discovered is first accessible to the discoverers, and only later accessible to the base spawning all explorers.

Hence, full application of emerging resources is always misused for some time by a culture, before it fully reabsorbs the "mountain men" coming back with pockets full of novel loot (so to speak).

The rate-limiting step is keeping all the explorers sent out (from the edge of society) adequately connected, so that they and the society quickly perceive how best to utilize emerging resources.

That happens coincidentally in well-practiced (i.e., well established) cultural sizes - which in humans covers established history up to the near-perfected "tribal" organizations seen worldwide. [Anthropologists have written about this out the ying yang.]

What homo sapiens are currently struggling with is the recent explosion of population. All our highly evolved tribal mechanisms simply don't scale to the supra-tribal populations arbitrarily reconfigured into clumsy nation-states.

Military war colleges also study this. There's an increasingly refined art to RAPIDLY mobilizing armed forces from, say, 500K to 5million. Read up on the early history of WWII, and why George Marshall became famous for reinventing personnel mobilization and organization. Yet militaries can do that only because of a highly specific, imposed affinity - one that doesn't universally translate well for mil staff re-entering non-mil fields.

Bottom line is always a n-stage optimization task. How do you
1) increase organization for "n" citizens; WHILE
2) "n" is always increasing; AND
3) situations are always changing, unpredictably

Most hints are that it all comes back to population connectivity, and the affinity that comes from the combination of connnectivity_+_common-goals.

If a desired outcome is universally shared, then it's implicitly obvious to all (adequately connected) individuals how to best use any newly found resource.

There are multiple ways for implicit organization to break down, and we're seeing them all. The list is growing. It's neither static nor shrinking.

Roger Erickson said...

Note: well connected, highly organized "tribal" societies are often referred to as "pass-through" economies.

A pass-through economy means static assets are considered of negligible value compared to dynamic assets.

For example, at war, no soldier wants to hoard any cache of arms or weapons. It's immediatly obvious that his best strategy is to distribute tools to all the people who have his back.
Our current approach to "capitalism" hasn't absorbed the lesson that dynamic assets are ALWAYS far more valuable that static assets.

We act - a bit - like a pass-through economy only when forced to during national emergencies (if even then).

F. Beard said...

Thieves how? paul

The creation of new purchasing power NECESSARILY dilutes existing purchasing power, at least temporarily, in a given money so new purchasing power creation MUST be done ethically.

Change the system how? paul

Basically to equity-based money rather than debt-based money.

F. Beard said...

Make that "the net creation of new purchasing power", please.

Roger Erickson said...

"The [NET] creation of new purchasing power NECESSARILY dilutes existing purchasing power"

Even that's an understatement. It's even more accurate to say that the net creation of new purchasing power quickly swamps prior NET purchasing power.

That's equivalent to saying that the highest return, by far, is the return-on-coordination.

[Most everything it's possible to buy today is obsolete & unwanted within 50 years - including 50 year old fiat buying power. Face it. Fiat is a depreciating asset. Grandpa's initiative ain't equal to grandson's initiative.]

The quest to hoard rather than compound net purchasing power is something we've been confused about since capitalism was designed by fiat. We didn't always conflate static vale and dynamic value - but we do now.

see: http://seekingalpha.com/article/1050011-fiscal-cliff-and-deficit-conversation-misses-the-point#comment-12560061
(note the next response, by zmoney; at least 1 person gets the obvious)

Matt Franko said...

F,

Maybe we should just etch all these rules down in stone and.... oh, wait....

...IT DIDN'T WORK.

rsp,

F. Beard said...

“The Law and the Prophets were proclaimed until John; since that time the gospel of the kingdom of God has been preached, and everyone is forcing his way into it. But it is easier for heaven and earth to pass away than for one stroke of a letter of the Law to fail. Luke 16:16-18 New American Standard Bible (NASB) [emphasis added]

paul said...

"The [NET] creation of new purchasing power NECESSARILY dilutes existing purchasing power" - F.Beard

See F.B, I don't see the system working in this way…

…prnting more money doesn't create NEW purchasing power…it merely maintains existing purchasing power at a steady rate, which is a necessary condition for a steady-state economy, plus a little growth for increasing population.

No one has any idea at any given moment how much money there is in the system…the system doesn't respond to stocks…the only possible measure is how much customers are spending.

Why? because through each cycle the funds are saved…ie accumulated downstream as financial wealth to be spent gradually at some time in the future…as in maybe never. I say never because the level of savings has always increased over our lifetimes.

This trend will reverse when pigs fly.

Something like 80% of the wealth in the U.S. is inherited. That adds new meaning to the phrase "earning money the old-fashioned way".

In other words, in mathematical terms, 95% of the dollars in existence are savings, and it will always be that way. The economy runs on New money not OLD money.

The government is bought with OLD money…and it doesn't take very much of that because they have so much of it.

Saved (accumulated) wealth doesn't drive prices up. Prices are set by a steady flow of spending, which can only be maintained by printing new money if the previous money is taken out of the game (which it is).

Investment doesn't take place unless there is new money to "win" in the game we call the economy.

That doesn't mean that some may invest in the belief there are "winnings" on the table…they just won't succeed without public spending staking the game… unless they manage to do so at the expense of other companies…in which case unemployment will increase.

Stop public spending and the economy, GDP-wise, would be a small fraction of it's current level…a "sharecropper" economy as Roger Erickson aptly put it.

It's up to public initiative to keep the game going.

We ignore that at our own peril.

F. Beard said...

@paul,

I'm FOR deficit spending by the monetary sovereign (as much as a true free market in private money creation can bear) and AGAINST the monetary sovereign EVER running a budget surplus.

What I'm against is a government-backed credit cartel diluting the purchasing power of all for the benefit of some - the banks themselves and the so-called "creditworthy." That's fascism.

paul said...

"That's fascism"

Or inadequate regulation, depending on one's point of view.