Farewell. The Flying Pig Has Left The Building.

Steve Hynd, August 16, 2012

After four years on the Typepad site, eight years total blogging, Newshoggers is closing it's doors today. We've been coasting the last year or so, with many of us moving on to bigger projects (Hey, Eric!) or simply running out of blogging enthusiasm, and it's time to give the old flying pig a rest.

We've done okay over those eight years, although never being quite PC enough to gain wider acceptance from the partisan "party right or wrong" crowds. We like to think we moved political conversations a little, on the ever-present wish to rush to war with Iran, on the need for a real Left that isn't licking corporatist Dem boots every cycle, on America's foreign misadventures in Afghanistan and Iraq. We like to think we made a small difference while writing under that flying pig banner. We did pretty good for a bunch with no ties to big-party apparatuses or think tanks.

Those eight years of blogging will still exist. Because we're ending this typepad account, we've been archiving the typepad blog here. And the original blogger archive is still here. There will still be new content from the old 'hoggers crew too. Ron writes for The Moderate Voice, I post at The Agonist and Eric Martin's lucid foreign policy thoughts can be read at Democracy Arsenal.

I'd like to thank all our regular commenters, readers and the other bloggers who regularly linked to our posts over the years to agree or disagree. You all made writing for 'hoggers an amazingly fun and stimulating experience.

Thank you very much.

Note: This is an archive copy of Newshoggers. Most of the pictures are gone but the words are all here. There may be some occasional new content, John may do some posts and Ron will cross post some of his contributions to The Moderate Voice so check back.


Saturday, December 10, 2011

Saving The Plutocrats

Commentary By Ron Beasley

Here is some economic history from Barry Ritholtz:

We�ve known for literally thousands of years that debts need to be periodically written down, or the entire economy will collapse. And see this.

We�ve known for 1,900 years that that rampant inequality destroys societies.

We�ve known for thousands of years that debasing currencies leads to economic collapse.

We�ve known for hundreds of years that the failure to punish financial fraud destroys economies.

We�ve known for hundreds of years that monopolies and the political influence which accompanies too much power in too few hands is dangerous for free markets.

We�ve known for hundreds of years that trust is vital for a healthy economy.

We�ve known since the 1930s Great Depression that separating depository banking from speculative investment banking is key to economic stability. See this, this, this and this.

We�ve known since 1988 that quantitative easing doesn�t work to rescue an ailing economy.

We�ve known since 1993 that derivatives such as credit default swaps � if not reined in � could take down the economy. And see this.

We�ve known since 1998 that crony capitalism destroys even the strongest economies, and that economies that are capitalist in name only need major reforms to create accountability and competitive markets.

We�ve known since 2007 or earlier that lax oversight of hedge funds could blow up the economy.

Of course the technocrats and politicians in the US and Europe have either learned none of these lessons or are ignoring them.  The latest example is Europe's disastrous summit.

I thought disasters were all meant to happen over the weekend? Somehow, in Brussels, EU leaders have contrived to pull defeat out of the jaws of victory on Thursday night, leaving Friday for finger-pointing and recriminations and wondering whether anybody who signed on to this deal has any chance at all of even getting re-elected, let alone being remembered as one of the leaders who saved the euro.

Here�s how the FT put it on Wednesday:

It borders on hysterical to say there are but hours to save the euro, but there is a risk that if the crisis is not now tamed the price of a rescue might start to spiral out of politicians� grasp. The stakes are therefore very high at Friday�s summit. The world cannot afford another half-baked solution.

And yet, inevitably, another half-baked solution is exactly what we got. Which means, I fear, that it is now, officially, too late to save the Eurozone: the collapse of the entire edifice is now not a matter of if but rather of when.

So why is this happening? We will return to Ritholz's first point for the answer:

We�ve known for literally thousands of years that debts need to be periodically written down, or the entire economy will collapse.

The technocrats and politicians are simply ignoring the fact that there is trillions of dollars of debt that is never going to be repaid. Of course the primary goal is not to save the international financial system or the Euro but to protect the TBF banks and the wealth and power of the plutocrats.  Of course their policy will fail on all counts. 

As Kevin O'Rourke points out the forced austerity makes it even less likely that any of the debt will ever be repaid.

One lesson that the world has learned since the financial crisis of 2008 is that a contractionary fiscal policy means what it says: contraction. Since 2010, a Europe-wide experiment has conclusively falsified the idea that fiscal contractions are expansionary. August 2011 saw the largest monthly decrease in eurozone industrial production since September 2009, German exports fell sharply in October, and now-casting.com is predicting declines in eurozone GDP for late 2011 and early 2012.

A contracting economy will be even less likely that debt will be repaid.  It should be obvious that the Eurozone is going to eventually breakup.  O'Rourke thinks the sooner the better.

An immediate breakup of the eurozone would be a catastrophe, which is why the European Council agreed to a �fiscal stability union� in exchange for some movement by the ECB. This may indeed prevent collapse in the short run � though that is far from certain. Treaty negotiations outside the EU framework, and the ratification procedures that will follow, are a recipe for even more uncertainty when Europe needs it least.

In the slightly longer run, such a deal, assuming that it goes ahead, will mean continued austerity on the eurozone periphery, without the offsetting impact of devaluation or stimulus at the core. Unemployment will continue to rise, placing pressure on households, governments, and banks. We will hear much more about the relative merits of technocracy and democracy. Anti-European sentiment will continue to grow, and populist parties will prosper. Violence is not out of the question.

This summit should have proposed institutional changes to avert such a scenario. But if such changes are politically impossible, and the euro is doomed, then a speedy death is preferable to a prolonged and painful demise. A eurozone collapse in the immediate future would be widely perceived as a catastrophe, which should at least serve as a source of hope for the future. But if it collapses after several years of perverse macroeconomic policies required by countries� treaty obligations, the end, when it comes, will be regarded not as a calamity, but as a liberation.

And that really would be worse.


  1. Since obviously the TBTF banks and the plutocrats aren't stupid, what exactly is their game? Did they engineer the Greek debt crisis in order to sink the Euro and thus prop up the dollar as a hedge against China? What are they really trying to do? More to the point, how are they succeeding?

  2. They are not stupid Charles but even smart people can be in denial. They truly do see themselves as the masters of the universe and hubris can be a very self destructive thing.