This is no doubt gonna piss off both the Yankee traders and the Dutch, but it’s a historically clever analogy. Josh Barro, in the NYTimes, on “The Problem With a Euro Fix: What’s in It for the Dutch?“:
Economists agree: If the eurozone does not break up, it will have to move closer together. They’re right. But it’s easy to understand why Europeans are not eager to heed their advice.
Basically, the proposition of European integration is that the Netherlands should end up like Connecticut. And even though Connecticut is a lovely place, the Dutch have good reason to be wary of that. It’s expensive to be Connecticut, because Connecticut has to pay for Mississippi and Alabama.
Large, economically diverse areas can successfully share a single currency if they have deep economic links that make it possible for troubled regions to ride out crises. That means shared bank regulation and deposit insurance, so banks don’t face regional panics; a labor market that lets people move from places without jobs to places with them; and a fiscal union, which allows the government to collect taxes wherever there is money and spend it wherever there are needs…
I’ve also been seeing comments that the European Currency Union is “a bitcoin economy, but using actual money” from people who don’t care for Germany’s stance.
***********
Apart from keeping one hand on our wallets at all times, what’s on the agenda for the evening?
Pogonip
Not much.
Corner Stone
There are only two things I can’t stand in this world. People who are intolerant of other people’s cultures… and the Dutch.
Corner Stone
Almost like they were part of a union, or shared zone or something.
The whole idea was noxious to start with. They thought that one day they could replace the dollar as the worldwide reserve currency. WTF did they think was going to happen?
There’s Germany…and everyone else.
Corner Stone
Kid has a rare headache, but it seems to be a doozy.
Pogonip
@Corner Stone: I will not tolerate intolerance!
Diana
@Corner Stone: you see, money is magic; that’s why the only real money is pure gold. Money as a man-made creation that, like other man-made creations — politics, marriage, percentage of carbon in the atmosphere — that exists in and responds to the real world is….. distasteful.
Chris
Yeah. Europeans were told that forming a union would be good for them, and now that it’s not, telling them to form a tighter union isn’t going to go over well. A lot of people are going to take the “fool me once” approach to things.
Danack
@Corner Stone: “WTF did they think was going to happen?”
The politicians who got their countries into the Euro thought they would be out of office by the time the problems started showing up. And they were mostly right.
What amazes me now is that the current set of politicians still aren’t thinking through the end-game of what happens to the Eurozone if Greece either stays or leaves/gets kicked out.
They’re still pretending that the Greece crisis is an one-off thing that will never be repeated, and not just the result of the fundamentally poor design of the Euro zone.
Keith G
@Corner Stone: I used to like the Dutch, but Ronald Reagan ruined that for me.
Keith G
@Corner Stone: A harbinger of an oncoming illness? Or too much time outside today?
edit
They thought that they were going to avoid blowing each other up with high explosives once again, they just didn’t think they would do it with banking regulations.
Roger Moore
@Corner Stone:
I think the plan was to have a series of crises that could most easily be cured by giving ever more power to Brussels.
Major Major Major Major
Just put up part 21 of my spec-fic thingamajig story thing about fish disappearing!
Shamless plug!
Corner Stone
@Roger Moore: The euro was doomed from the time Saddam tried to use it as a reserve for petro dollars. The technocrats in Brussels can keep trying to force sovereign nations to forfeit their democracy, but they’re only going to gain a paper tiger.
Greece is going to have to exit at some point, the only question is now or in two to three years? Portugal, Spain, Italy, they are all going to have to exit at some point in the next 5+ years.
Corner Stone
@Keith G: It might be a tumor.
Redshift
@Danack: I think it’s more that they’ve bought into the morality-play idea that the whole problem is the result of the Greeks being bad people with a flawed culture (and since that interpretation allows them to be blameless, it’s going to take a lot more than pesky facts to get them to let go of it.) If it’s all Greece’s fault, then it can only happen other places if they’re also bad people, and Greece and others can escape their fate if they just stop being bad people!
Keith G
@Corner Stone: Or an aneurysm, but those are less common in kids. Maybe its an emerging super power.
Anne Laurie
@Corner Stone: Meningitis. Any of his playdate buddies dropped dead recently?
Roger Moore
@Corner Stone:
I think the Euro project- both political and monetary- is deeply troubled because it’s fundamentally anti-democratic. Everything is cooked up in private by a small elite and then pushed through by means fair or foul. National politicians are bullied or bribed into going along, and the public is expected to accept it whether they like it or not. Even though I approve of the general idea of a unified Europe, I don’t believe that the current approach is the right way to get there. I honestly believe that European citizens could be convinced to go along by presenting them with solid arguments about how they stand to benefit and only moving forward when they’ve accepted them. Pushing things through whether the people like it or not is only going to breed Euroskepticism and damage the long-term prospects for further integration.
dm
At the time it was conceived, the Euro was maybe a good idea: like having standard units of measure, having a common currency makes cross-border trade easier in the days of mechanical calculators and paper ledgers.
But by the time it was implemented, computer transactions had eliminated the cost of current conversions, and with them any advantage to having a single currency.
Roger Moore
@Corner Stone:
It’s not a tumor!
Omnes Omnibus
@Corner Stone: Has he been around any zombies lately? Part of his brain might have been eaten.
schrodinger's cat
A currency union without a political union is bound to fail sooner or later. Politics almost always overrides economics.
rikyrah
Hayes is doing a segment on solar energy. Very informative.
Largest job creators in North Carolina and Georgia come from solar power jobs.
JPL
@Corner Stone: I was the mom that overheard the pediatrician tell the front desk, if I called, to make an appt. immediately. So I have no advice.
Keith G
Speaking of conflicts over sovereignty, I have begun the audio version of A Game of Thrones: A Song of Ice and Fire, Book 1. It is really great fun. Having watched the series, I have the template, but the book fills in so much more. I like that I am experiencing the book second.
schrodinger's cat
@Omnes Omnibus: If you have zombies at home, you probably need to be rethinking your life choices, just saying.
Omnes Omnibus
@schrodinger’s cat: The kid might have met them in the streets when he was scoring drugs, so I don’t know that a rethink is necessary.
Matt McIrvin
@dm: There’s always some middleman who takes a cut.
But the advantage of having separate currencies is that if they can float relative to each other, a weak economy’s currency can drop in value, making its labor and exports more attractive and its debts (at least to extent that they’re denominated in that currency) less onerous. Greece doesn’t have that ability right now.
Calouste
Greece is a heck of a lot nicer place to go on vacation than Mississippi and Alabama, so there’s that.
schrodinger's cat
@Matt McIrvin: True, the inflation target for the Euro is very low. What are the poorer countries in the Eurozone getting out of it? Unemployment is sky high in Italy not just Greece. Germany on the other hand has an unemployment rate < 5%. The status quo is unsustainable.
JustRuss
@Omnes Omnibus:
When did this turn into a thread about Trump?
Gvg
Ya’ll are such a comfort to parents.
Omnes Omnibus
@JustRuss: All threads are about Trump.
BillinGlendaleCA
@Gvg: We try our best.
Omnes Omnibus
@Gvg: We try.
Corner Stone
Speaking of zombies…
Omnes Omnibus
@Corner Stone: Paul Ryan?
BillinGlendaleCA
@Omnes Omnibus: Scott Walker.
Omnes Omnibus
@BillinGlendaleCA: Walker is more of a wraith.
schrodinger's cat
@Omnes Omnibus: Pah Wraith?
Elmo
Jesus Christ you guys are tough. Me, I cringe in pained sympathy at the mere word “headache.” One of my earliest memories is of a real doozy, banging my head against the wall and floor to do anything to make the pain stop. Horrible.
jl
Many international trade and monetary economists were doubtful about the wisdom of the Euro. An interesting question is: what was the rationale for it? Maybe the thinking was that the European Union (a trade union, not a monetary union) would not go fast and far enough towards US style economic integration, and adding the Euro (a monetary union) on top of it would force the EU countries to get that economic integration going in high gear. But adding the Euro did not do that.
Partial integration needed for European Union trade union is easier than all the countries getting on the same page on monetary fiscal and financial industry regulatory policy, which is desirable for a monetary union.
During economic expansion no reason to push integration because everyone has lots of money, and everybody is happy. And impossible to do it during recession or after a financial panic, because not everyone has lots of money, and everybody is unhappy and pissed at each other.
billb
The point of the EU is to be a giant success like the USA. Even Germany is a dwarf next to us. They need the power of a Union, as much as the Greeks do. The birth of a major Union is going to be bumpy, as you learn that NY has to float the slackers in GA. But the collective long-term benys is worth it.
danielx
Hopefully no more birds to bury tomorrow like I had to do this evening…..courtesy of Zoey the Menace*, who wanted to show us what a great job she is doing guarding the homestead from trespassing robins by bringing one in the house and howling for attention.
*seen here during a brutal catnip abuse session.
Ruckus
@Elmo:
Try having 40+ yrs of migraines. It’s the gift that keeps on giving.
Corner Stone
@Ruckus: I’ve had 30+ years of migraines. I thank whatever God that exists that the last 10 years they have been reduced to once or twice a year. In my teens and twenties they were more like 6 to 12 times a year.
I pray my child doesn’t inherit that less than useful trait.
Thankfully, some Tylenol, some chocolate, a little rest and who knows what brought him some peace.
catclub
@danielx: That is not a thin cat.
Omnes Omnibus
@Corner Stone: Well, it sounds like it wasn’t zombies. I am glad that the kid is okay.
Anne Laurie
@danielx: Any robin who could be captured by a cat of Zoey’s plentitude deserves to be removed from the gene pool.
(Actually I’m not fond of robins in general, but I admit I’m in the minority.)
Bill Murray
@Elmo:
did you finally learn that banding your head to make your head hurt less is counterproductive, so you should bang your elbow or foot instead.
Bill Murray
@billb: the point of the EU was to setup a structure to destroy European countries safety nets and let the money flow to its rightful place in the accounts of the elites without the elected governments fingerprints on the transfer
Howard Beale IV
@Corner Stone: As a first generation Dutch-American (who can apply for full Dutch citizenship) all I can say is: “if you aren’t Dutch, you aren’t worth much.”