Don’t Mention The War

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It is wrong to suggest that people should be held accountable for the actions of their ancestors. Blaming each other for the deeds of our ancestors is the cause of vast tracts of human suffering and conflict. Tribes and nations have fought each others for centuries — and, in some places, continue to do so — based on the actions of that tribe or nation’s forefathers. This is irrational. We cannot change the actions of our ancestors. That is perhaps one reason why John Cleese’s portrayal of an idiot hotelier beating down his German guests with a spiel of cringe-inducing World War 2 and Nazi clichés is so absurdly funny.

That being said, we do have a responsibility to learn from and not repeat the mistakes of our ancestors. Failure to learn from the mistakes of one’s ancestors is the point at which the actions of past generations become relevant in a discussion of the present.

There is a line of reasoning that suggests that the first person to compare their opponent to Adolf Hitler or Nazism in an argument on the internet just lost the argument. I tend to see this view as generally correct. The acts and beliefs of the Nazis were unusually horrific, and comparing your opponent or the person or group you are criticizing to the Nazis is often an act of rhetorical desperation, and often a symptom of a lack of imagination. However, what is generally correct is often locally wrong. Sometimes, a Nazi or World War 2 analogy really cuts to the core of a problem.

This, I believe, is one of those times. Having the German government and its allies trying to dictate to the Greek people the terms of Greece’s euro membership, the standards by which they should run their government, and economy, and civil service, and welfare state must feel painfully close to a new German occupation. Greece is a country, we should not forget, that suffered greatly under a German military occupation less than a lifetime ago. It is now experiencing a brutal and prolonged economic depression at the hands of a new generation of austerity obsessed Germans.

Greece has been a willing victim for German austerity. The Greeks have taken Merkel’s medicine. Greece has done a huge amount of spending cuts, so many in fact that by 2012 they had a primary surplus.

Unfortunately, Merkel’s and the Troika’s medicine was a load of horse shit. Instead of recovering, the Greek economy just got even more depressed. Unemployment has been at Great Depression levels ever since Merkel and the Troika began dictating how the Greeks ran their economy. Greek real GDP continues to trend downward. Indeed, Europe itself remains in an epic depression. The austerians keep making it worse.

Now, nobody is saying that the Greeks are blameless. Obviously, they took on a load of relatively unproductive debt they couldn’t afford, and they colluded with financiers to falsify economic data to get into the eurozone. But the country has already suffered massively as a result of those decisions (which of course were not Greece’s alone — the creditors clearly did not do their homework).

The goal now should be getting Greece — and the wider continent and world, which would also suffer greatly from a default cascade or economic slump as a result of the Greek crisis — out of the mess they are in. What Greece really needs is debt forgiveness. Even the IMF recognizes that Greece’s debts are unrepayable. But that is not Merkel and Schaüble’s goal. Instead of recognizing that their policies have failed, and that a change in course is necessary, their goal for Greece is complete capitulation to the stormtroopers. Their goal for Greece is punishment, in order to set an example to other euro members who might get into fiscal trouble.

The great irony — and the thing that makes the Nazi references really begin to stick — is that earlier German governments received massive debt relief. Indeed, after Germany started the Second World War — which killed 50 million people, including 6 million who died in the holocaust — it had its war debt written off, allowing the West German economy to begin to recover and rebuild. Indeed, Germany was the biggest defaulter of the 20th century. Yet now the very descendants of those Germans refuse the same treatment for today’s Greeks, whose troubles pale against the crimes of Germany’s Nazi past.

This is sickening. Not only are they shredding to pieces the European unity and the European Union that has kept war-torn Europe at piece with itself for the past seventy years, they are doing it in the name of an ignorant program of austerity that does nothing other than punish and degrade. And they are doing it in complete ignorance of how their own ancestors benefited from others’ forgiveness. Do they not understand the value of European unity? Of economic growth? Of peace or prosperity?

In choosing the path of sadomasochism, punishment and German supremacism, Schaüble and Merkel and their allies are risking turning what is already a terrible depression for the continent — and a ravaging for Greece — into something deeper, gloomier and more painful.

What The UK’s Low Productivity Is Really Telling Us

This, I would argue, is one of the scariest charts in the world today. The green line is output per hour worked, and the dotted green line is the pre-crisis trend:

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It’s what the Bank of England calls the “UK productivity puzzle.” As the BBC’s Linda Yueh notes: “output per hour is around 16 percentage points lower than it should be if productivity had grown at its pre-crisis pace.”

I don’t think it should be called a “productivity puzzle”. That would imply that we don’t really understand the phenomenon. That the phenomenon is a puzzle. But it’s really a simple phenomenon. The phenomenon is that people are producing less output per hour than they were before the financial crisis. Work is getting done. But the quality of the work is not improving.

The Bank of England points to “reduced investment in both physical and intangible capital, such as innovation, and impaired resource allocation from low to high productive uses” as a cause. In other words, the work is crap because firms aren’t deploying the resources to do good work. And this is a trend that predates the election of the Coalition government in 2010. As the Bank of England notes, the UK has lagged in investment as a percentage of GDP behind its fellow G8 economies since even the 1990s.

But things got really bad under the Coalition. And that shouldn’t really be news. There was a recession resulting from the financial crisis. The recession — as recessions tend to do — resulted in a severe drop in business investment. In the wake of the recession, what did the newly elected government decide to do? It decided to enact sweeping austerity programs — to slash investment even more.

So the story is that the government decided to compound the after-effects of the financial crisis with an austerity program. That means depriving the economy of even more resources needed for productivity, growth and prosperity. And — in truly, truly shocking news — UK investment as a percentage of GDP is currently lagging at a pathetic 15 percent of GDP behind Belgium, Gambia, Jordan, Equatorial Guinea and Costa Rica, and barely ahead of Greece!

The austerian view, of course, is that the austerity was necessary because otherwise the bond vigilantes would have sold UK public debt, and we would have turned into Greece, or something.

The so-called “productivity puzzle” and the related low-investment puzzle categorically proves this claim wrong. If the austerity was imbuing the market with confidence necessary for growth, we would expect to see productivity and investment rising.

That has not been the case. What has occurred is a zombie recovery caused by zombified economic policies. Yes, there has been substantial job growth, and GDP is now above its pre-crisis peak — albeit in the slowest recovery since the South Sea bubble 300 years ago. But the weakness in productivity continues to illustrate the rottenness.

You can’t starve yourself to strength. You can’t beat yourself to growth.

Are teen pregnancies good for the economy?

At Pew Research Center, Eileen Patten points out that “[t]he teen birth rate in the U.S. is at a record low, dropping below 30 births per 1,000 teen females for the first time since the government began collecting consistent data on births to teens ages 15-19″:

[Pew]

What’s changed? “The short answer is that it is a combination of less sex and more contraception. Teenagers have a greater number of methods of contraceptives to choose from,” Bill Albert, the chief program officer of The National Campaign to Prevent Teen and Unplanned Pregnancy, told TIME. He added, “The menu of contraceptive methods has never been longer.”

Reducing teenage pregnancy has long been a matter of policy for the federal government, and the latest trends represent a policy victory for successive administrations who have tried to achieve that goal. While liberals and conservatives manage to find ways to disagree on issue after issue, teen pregnancy is one point on which they largely agree. Though they diverge on the means — many conservatives advocate abstinence while liberals tend to favor contraception — both sides happily shake hands on the common goal of reducing teen pregnancy.

Read More At TheWeek.com

General Mills backed down from its controversial lawsuit policy. But the problem isn’t over.

Class action lawsuits are an efficient way for wronged individuals — who may lack funds and legal expertise — to fight back against the powerful legal muscle of big business. One very famous example is the case of Erin Brockovich, who built a class action lawsuit that successfully sued Pacific Gas and Electric over contamination of drinking water.

A lone consumer wronged by a large corporation might struggle to foot the bill to hire the legal firepower necessary to win their case in court. But hundreds or thousands of consumers claiming similar injuries or damages from the same company or organization can, by banding together in a class action lawsuit.

It isn’t surprising, then, that some firms are taking measures to limit their customers’ abilities to join class action lawsuits.

General Mills, the manufacturer of Cheerios, Betty Crocker, Green Giant, and various other grocery products has reversed a recent change to its online legal policy that would have barred customers who “liked” General Mills’ social media pages, downloaded money-saving coupons from its website, or entered any company-sponsored contests from joining class action lawsuits against the firm.

Read More At TheWeek.com

Obama is right to be worried about income inequality — it’s gotten a lot worse under his watch

Americans today are very worried about income inequality.

A Gallup poll this month found that 67 percent of Americans are unhappy with the distribution of income and wealth in the U.S. The disappointment goes across party lines — 54 percent of Republicans are dissatisfied, as well as 70 percent of Independents and 75 percent of Democrats:

And a growing number of people are worried that they can no longer get ahead simply by working hard, suggesting that inequality is becoming more entrenched.

Read More At TheWeek.com

Do Americans really prioritize security over freedom?

Americans are getting less hawkish about national security.

Jake Tapper of CNN raised eyebrows recently by claiming that “the American people, honestly, want security over freedom.”

That would seem to be a big departure from the ideals of, say, Benjamin Franklin, who wrote that“those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety.”

And is Tapper’s claim even true? Do the American people prioritize security over freedom? The most recent evidence doesn’t support Tapper’s claim.

Read More At TheWeek.com

Is cash the most ‘efficient’ Christmas gift?

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Some economists think that Christmas gift-giving is a big waste of resources, and that cash is a much more efficient present.

When giving specific gifts, people often get things they don’t want, which is a waste of resources.An estimate by Wharton Professor Joel Waldfogel suggests that 20 percent of gift giving money is wasted this way.

Woldfogel argues that a person who spends $100 on himself or herself will presumably spend that money on something that actually nets them $100 worth of satisfaction. But when another person spends that amount on a gift they may end up getting a painting of a cat for a dog-lover, a sweater in the wrong size, or a coffee maker for a tea drinker, etc.

Woldfogel argues it would be much more efficient to just give cash, so that the recipient can spend something that nets $100 worth of satisfaction.

Read More At TheWeek.com