Be Excellent To Each Other

What if, instead of that playful word bubble, we tried something a bit more accurately descriptive when growth at any cost became the goal. Say, “tumor”: “the dot-com tumor,” “the subprime tumor,” “the derivatives tumor.”

Would anyone seriously gainsay the highest possible vigilance over the proper functioning of their own body or doubt the need for strong regulation? Who, facing the prospect of a tumorous outbreak or living with a body demonstrably prone to such outbreaks, would entrust that body to a band of physicians blithely committed to laissez faire regarding these fatal bubbles of flesh?

Words matter. Metaphors frame thought. Pay them heed and tend them well.

The whole point of it being a bubble though, is that it bursts. Tumors don't.

And Darling and Osborne have got a battered one again. Is it the same case, going back 50+ years? Or is there a factory somewhere that pre-batters them?

And Darling and Osborne have got a battered one again. Is it the same case, going back 50+ years? Or is there a factory somewhere that pre-batters them?

And Darling and Osborne have got a battered one again. Is it the same case, going back 50+ years? Or is there a factory somewhere that pre-batters them?

Good Grauniad infographic about the current UK deficit:

You do know that they are empty, right?

The original Budget briefcase was first used by William Ewart Gladstone in 1860 and continued in use until 1965 when James Callaghan was the first Chancellor to break with tradition when he used a newer box. Prior to Gladstone, a generic red briefcase of varying design and specification was used. The practice is said to have begun in the late 16th century, when Queen Elizabeth I's representative Francis Throckmorton presented the Spanish Ambassador, Bernardino de Mendoza, with a specially constructed red briefcase filled with black puddings.[citation needed]

In July 1997, Gordon Brown became the second Chancellor to use a new box for the Budget. Made by industrial trainees at Babcock Rosyth Defence Ltd ship and submarine dockyard in Fife, the new box is made of yellow pine, with a brass handle and lock, covered in scarlet leather and embossed with the Royal initials and crest and the Chancellor's title. In his first Budget, in March 2008, Alistair Darling reverted to using the original budget briefcase and his successor, George Osborne, continued this tradition for his first budget, before announcing that it would be retired due to its fragile condition.[5]

Would have been interesting to see the same chart, but going back all the way to the 40s. They have the data.

Do us some graph magic Doccy G

Not so, they have the speech in them apparently (and I'm sure I've seen at least one Chancellor remove the speech before giving it, now that I think about it).

So it seems there have only been three of those cases, ever.

Not so, they have the speech in them apparently (and I'm sure I've seen at least one Chancellor remove the speech before giving it, now that I think about it).

So it seems there have only been three of those cases, ever.

Also correct for inflation please. And overlay with economic growth rates, so we can tell the state of the UK economy at the time. And note any major national or international incidents that may have had an effect ( Oil crises, military actions, major industrial actions etc.)

Greece defaults: http://blogs.reuters.com/felix-salmon/2 ... -defaults/

It's complicated, and I don't understand it well enough to summarise. If only there were a hyperlink with more information

It's complicated, and I don't understand it well enough to summarise. If only there were a hyperlink with more information

I was laughing at that. Everyone looks like they've got an important symbol of the political system in their hand, except Brown who looks like his is a Hello Kitty briefcase.

all eurozone countries except Greece, Ireland and Portugal committing to bring their deficit down to less than 3% of GDP by 2013

Wow. That's quite a step to take, and in incredibly short timescale.

What percentage deficit do most Eurozone countries currently have, though? i.e. what's the context for this.

Government debt expressed as a percentage of economic output.

Greece 142.8%
Italy 119%
Belgium 96.8%
Ireland 96.2%
Portugal 93%
Germany 83.2%
France 81.7%
Spain 60.1%


Says Auntie

That's debt, not deficit.

It also doesn't, really, disagree with me.

There's quite a bit about existing bond holders having to agree to new terms, including longer repayment times and/or reduction in face value. Sounds like "defaulting" to me, albeit not all-the-way defaulting. If it isn't, perhaps I should call my credit card firm and tell them I'm halving my APR?

There's quite a bit about existing bond holders having to agree to new terms, including longer repayment times and/or reduction in face value. Sounds like "defaulting" to me, albeit not all-the-way defaulting. If it isn't, perhaps I should call my credit card firm and tell them I'm halving my APR?

Ahem - existing bond holders agreeing is the key there, see. Yes it's a default in one sense, but in another, more correct, sense it's a contract variation.

It's a case of "agree, or force a full default and get nothing" though. Squirt's analogy of an IVA seems apt to me, regardless of the politicians spinning it as "not a default" for career reasons.

Quite. It would definitely be a much better idea to allow Greece to default, instantly ensuring that it becomes totally incapable of ever again operating at a deficit, costing the banks and sovereign nations that have lent it money to lose out on that cash, resulting in probably collapsing financial institutions and thousands of job losses (though not among the bankers, they'll just get jobs elsewhere). The euro would tank against every other currency on the board, plunging the economies of all the eurozone countries through the floor. Once the rest of the world sees that Europe will allow Greece to go, they immediately issue junk status on Portugal, Ireland, and Spain because they'll follow immediately after. Most of europe has barely a functioning economy for the next decade.


Still, the deal's just a ploy to put money in the hands of those greedy bankers, eh?

Iceland seemed to survive alright.

Mm. I think the people I know in Iceland would argue against that. The country is functional, but its currency lost a massive amount of value, and things that were already expensive there are now fucking astronomically expensive. Chunks of the area around Reykjavik are like building sites, with half-finished houses just abandoned. Unemployment is way up. And ISK might have managed to avoid junk status, but only by the skin of its teeth.

Also, I suspect one reason Iceland managed to get through this is purely down to the size of the country. It's one thing for such a tiny place (even punching above its weight in terms of banking) to go splat, but Greece? Spain? Italy? That's an entirely different level of impact, not least because of the Euro.

n 2010, the number of jobless in Greece rose by 230,000, to reach 14.8 percent. Given Greece's weak social safety net, unemployment is more or less tantamount to social bankruptcy. For example, unemployment benefits are only available for a year at a monthly rate of less than €500. After that, the state offers practically no assistance. Officials estimate that only about 280,000 of the 800,000 people without jobs are still eligible to claim unemployment benefits. This has resulted in a dramatic rise in the number of homeless people -- by up to 25 percent in Athens alone.

According to official data, unemployment is expected to climb to between 17 percent and 18 percent by the end of 2011, but the true figure could be as high as 23 percent. "That would be 1.2 million jobless people," Robolis says. The last time Greece saw something like this was in 1961, when the introduction of modern farming technology put thousands of agricultural laborers out of work.

Greece has its tourist attractions and agricultural products. But apart from beaches, olive oil and feta, the economy doesn't have much to offer. As much as 70 percent of of Greece's economic output depends on private consumption, according to a recent study of the Friedrich Ebert Stiftung, a think tank with ties to Germany's center-left Social Democratic Party (SPD).

However, according to the study, in the last quarter of 2010, reductions in salaries and pensions drove consumption down 8.6 percent, retail sales shrank by 12 percent and 65,000 stores had to be shut down. Robolis predicts that, by 2015, when the new austerity measures are scheduled to take full effect, the standard of living for employees and pensioners will be 40 percent lower than it was in 2008.

Two-thirds of Greeks regularly pay their taxes as well. Indeed, "contrary to widespread views," as the Friedrich Ebert Stiftung study put it, these taxes are automatically deducted along with social contributions from the paychecks of Greeks employed in both the private and public sectors. It is mainly the small wealthy class that manages to cheat the authorities out of €40 billion in tax each year. That is the OECD's estimated volume of annual tax evasion. The Greek central bank puts the losses at somewhere between €15 billion and €20 billion.
These tax cheats have little to fear. As Panos Kazakos, an Athens-based professor of politics, puts it: "I have never seen a single person put in jail for tax evasion." Robolis adds that the government, which supposedly has no money available for social services, just published a list of companies that owe the state a total of €9 billion in social contributions -- but it does nothing to get that money.

But how is Greece being locked into hundreds of billions of euros of debt any better? They'll still be tied into a currency that is far too strong for their economy, and they'll be effectively bankrupt for a decade or more.

Whichever way you go, it's bad news for Greece. This deal means it's not quite so much bad news for the rest of Europe.