by Dirk Ehnts, Econoblog101

I am still wondering how it is possible that in Europe, more specifically, in the euro zone we are still in such a mess. Since I am working on a somewhat philosophical paper, I stumbled upon Schumpeter’s Capitalism, Socialsm and Democracy. On page 261-263 (Harper edition), he writes:

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Written by Adam Whitehead, KeySignals.com

In Terminal Velocity (3) - The Pyramid Scheme^[i], it was suggested that the Federal Reserve was adopting a new policy in which its balance sheet remains expanded indefinitely. Applying this thesis, tactical micro-economic policy tools will be deployed that give the Fed the flexibility to normalize interest rates, whilst providing specific monetary stimulus to sectors of the capital markets and economy. An expanded balance sheet can therefore be as consistent with rising interest rates, as it can with falling interest rates. It was said that:

"We will watch Jackson Hole closely this year, to see if this template becomes official global central banking dogma."

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Written by Hilary Barnes

(Editor's note: Sarcasm detected.)

Germany, with a current account surplus of about 4 % of GDP, is obviously far too weak to stimulate domestic demand without losing the confidence of the capital markets. Chancellor Merkel has said so.

She is by training a physicist, one of these rocket science types like all the big noises at Goldman, so it must be true.

A good dose of austerity is what Germany really needs right now - and thanks to the knock-on effect of austerity in the southern members of the euro zone, that's what Germany is getting.

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by William K. Black, New Economic Perspectives

The two most revealing sentences about the gratuitous Eurozone disaster – the creation of the deepening über-Depression – was reported today. The context (rich in irony as I will explain) is that U.S. Treasury Secretary Lew spent his Spring Break in Europe meeting with his counterparts. The Wall Street Journal’s article’s title explains Lew’s mission and its failure:

“U.S. Anti-Austerity Push Gets Cool Reception in Europe.”

Here are the sentences that capture so well why Germany’s destructive economic policies caused the über-Depression -

Mr. Schäuble said,

"Nobody in Europe sees this contradiction between fiscal policy consolidation and growth. We have a growth-friendly process of consolidation.”

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by Andrea Terzi

This article was originally published in Mecpoc.org

It seems that anybody with an internet connection knows of Herndon, Ash, and Pollin’s (HAP) rebuttal of Reinhart-Rogoff’s (RR) paper on public debt and growth. Minutes after the news started to go round the web, I was asked what I thought by friends whose interests are quite far from economics. They were shocked that Harvard professors could make such embarrassing mistakes in their excel file, and that austerity decisions could be based on such an imprudent error.

I gave them another perspective:

Reinhart-Rogoff’s paper has more serious flaws than an excel error. And austerity hysteria will not go away after Herndon-Ash-Pollin’s review.

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