France and The Netherlands lost their President and Prime Minister in the last thirty hours and Iceland’s ex-Prime Minister was by a judge found guilty of catastrophic economic stupidity but not imprisoned and a feeling is growing in Europe that the punishment of the poor for the reckless folly of greedy men earning, and still earning, two thousand dollars an hour, has got to stop, and I agree.
A way to fix it is risk-free and well-precedented, and it is this.
The idea is for each country to have two currencies, the Euro, which is exportable, and another, which stays at home. Like the rouble in the Soviet Union, the latter will buy groceries and locally made clothing and pay rents and mortgages, and the Euro buy importable luxury goods like cars and cameras and fancy shoes.
Let the local currency have the same name as a former currency — the mark, the dranchma, the punt — and have the same design and be deemed to be worth an eighth or a ninth of the Euro. This value will then vary, in the old way, as demand and circumstances change.
Nothing then is required than the willingness of the European governments to play this new game, in the same way as the banks that got us into this trouble played the old games of pork belly futures and overvalued unpaid mortgages and AAA ratings for Lehman’s and Goldman Sachs, and so on.
And that’s it, really. People will continue to want to eat and live under a roof and pay cheap rents and not work as prostitutes and will seize the opportunity to do so if it is offered.
Any other proposed solution — which always involves the sackings of millions of people — exacerbates the problems. People who do not work do not pay taxes and the debt gets bigger and bigger.
It’s not as if it hasn’t worked before. Tourists to Bali in the 1970s payed in bahts the equivalent of fourteen dollars a week for a week’s food and lodging. The Balinese sculptors sold their works of art for what dollars they could get. A single sculpture might pay for a family’s upkeep for two months. And so it went.
It is easy to see how this would work in Greece and Spain and Ireland, where tourists would like to come and live cheaply for a month or two.
This is the proposal anyway.
Any questions?
Name:
We went Argentina in 1990(?) with a suitcase full of American dollars, everything cost us a dollar, a long taxi trip, a dinner, a good bottle of wine…the leather jackets and cowboy boots a little bit more
My case rests.
Is Argentina okay today?
Of course it is.
I thought the baht was the Thai currency. Was it also the unit of currency in Bali?
Dunno. Will check, and if need be correct.
The argument remains the same.
Rents will be a killer for years and this umbrella’s tourism. Australia is getting a name for being a trap.
The two tiered economy ensures power above over riding any matter below for self benefit. West oz, which has had in the past, troubles of economy and growth is a good study case.
Bob’s on the right track with the matter of Sydney and culture entertainment. This should never be lost here and creates a standard of pride. The matters of communication and drama in the community and sowing the seeds of, helps youth lift their game, pride, prospects and relationships and attitudes.
the tourism by product and comraderie produced internationally pays for itself.
The troubles of tourism here is entrapment.It is too harsh and cornering.Travel this country on a budget and you will find out.It is extremely stressful and a feeling of hopelessness and panic invades quickly. There is much to say on that.Some towns and councils have the right idea but it is twarted by the smug greed, pathic tendencies and manipulations of the business click who also treat their own as a resource.
The truth may go far. Australia has got a name for being a trap.
It’s always interesting to be on the ground floor and see how the clique and power view problems and troubles and witness their version of cures applications to them often as not compiling the troubles.
I’ve handed out food, clothes, money, rides and advice to too many near and teared travellers and heard the stories and bypassed many towns shooting themselves in the foot from entrapment and greed.
From “Suddenly Last Passover”
As Aussie’s ruminating with my travelling companion, Fairlee Arrow, the House abuzz with chattering soliloquies and the cauldron of legislative voices.
I espy Tanya strutting by and leap from my table.
“Darling!” I scream, forcing myself upon her personage. “You need to give every Australian free dental care, new teeth, root canal work, whitening toothpaste, an electric brush and the Colgate ring of confidence – you will rise seven points in the polls.”
Tanya thanks me for my sage advice and continues on her way, giggling loudly to herself, although there is no one with her. Perhaps a joke remembered? Fairlee isn’t sure.
“To Bob’s!” I commandeer, grabbing the young Arrow and marching to the Ministerial Wing.
“Ellis, Bob to see the Honourable Senator Carr. Announce me, slave!” I demand of the page at the office reception.
“I’m sorry, Mr Carr is in a meeting now, do you have an appointment Mr Elliot was it?” the fool, nay moron, simpers.
Fairlee laughs, though no joke has been told.
“What bum fuckery is this? Tell Carr I know how he can win the next election. Make Julian Assange the next Governor General, Bradley Manning an Order of Australia, Geoffrey Robertson captain of the Blues, Dominatrix Strauss-Khan the Human Rights Commissioner …”
The receptionist starts to giggle uncontrollably, for reasons I cannot fathom. I suspect they are a Liberal, a Murdochist, a Sharks supporter, a non-reader of my books. I doubt they have been to the Wharf Theatre or read my treatment of The Tate-La Bianca killings as a musical.
I tell the dickhead my lawyers will sue, say two hundred and fifty thousand and he is banned from talking to me for life.
“To Shorten’s office … Bill must read my speech demanding Mel Gibson make The Beaver Returns…”
Fairlee giggles in a non juxtaposed manner. I fear she wants to have an affair with me …
MORE TO COME
To Terrance, “Fairlee giggles in a non juxtaposed manner”.
Simply brilliant!
Inimitable, like a bevy of busy busboys bashing out their committee version of a potboiler.
I agree that people who do not work do not pay taxes, and also that the adjustment in these economies is being disproportionately borne by those who can least afford it.
That said, I can’t help but feel that the reality of such a dual currency plan will fall somewhat short of expectations. The value of those local currencies will potentially depreciate massively against the Euro, and unless the demand for those imported good falls (which is unlikely unless these countries can re-industrialize at an incredible rate, which is going to involve one or a combination of greater levels of foreign debt, greater levels of national saving extracted through some degree of austerity, or lower wages), then it presents a very real risk of hyperinflation, a phenomenon which is always disproportionately borne by the poor, as indeed it was in Argentina in the late 80s.
Also, I’m not sure that the Spanish investors about to have their equity wiped out in the soon to be nationalized Respol YPF would currently consider that Argentina is doing okay, but these things are relative, I guess.
My preferred solution would be a debt jubilee and mandatory chemical castration of young males identified as possessing those genes most likely to cause future membership of right wing political parties, but this research is still in its infancy and ongoing funding remains tenuous.
Bob, I just had to pop back after seeing this from Steve Keen on Irish Television.
http://www.debtdeflation.com/blogs/
It’s about 6 minutes into the clip, and it’s about the exchange of domestic money for the Euro in the case of Ireland.
The flaw in this solution is that those who can do so, preempt devaluation of their pile by exporting it to retain its buying power. Therefore the country becomes much poorer.
“Reports from Athens that massive sums of money were being spirited out of the country ….”
http://www.guardian.co.uk/global/2012/may/16/cost-greek-exit-euro-emerges
You are right FIK, Greece is already too far down the track and their former Government has sold the people down the river to a life of debt slavery. The aim should have been to default on the loans, close down the banks over a weekend and issue the new currency. Too late now.