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• On ABC Radio National, PM program: ‘Stupendously idiotic’ policies for Greece can’t work.

  Good answers….

  MARK COLVIN: Well it’s being imposed effectively from Germany, isn’t it? What are the chances that Germany is going to have any patience with a Greece which has failed to form a coalition, which is going into uncharted territories, as you say, with a new election?

  YANIS VAROUFAKIS: It’s like asking the question, what kind of patience am I going to have with gravity? It doesn’t matter.

  (sound of Mark Colvin laughing)

  Gravity is a law of nature and I cannot do anything about it. Similarly, Germany at some point, and I think that that point has already come, Germany will realise that it is absolutely impossible to, for a country like Greece, or for Spain for the matter, to exit this debt deflationary spiral, through cutting. This cannot be done even if every single Greek and Spaniard and Italian wants to do it.

  Even if God, his angels and, you know, every good man and woman on this planet wanted to implement this German prescription on the European periphery, it cannot be done for the same reasons why I can’t fly without an aeroplane.

  MARK COLVIN: So what’s the alternative? Where’s the money going to come from for pump priming?

  YANIS VAROUFAKIS: Well, I don’t think we should have pump priming. What I think we should have in Europe is a little modicum, tiny whiff of rationality.

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• Video: David Graeber and David Harvey in Conversation

  David Graeber and David Harvey discuss their new books, Debt: The First 5000 Years, and Rebel Cities, respectively.

  25 April 2012 at The CUNY Graduate Center

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• Choonara, McNally and the US rate of profit | Michael Roberts

  As readers of my blog will know, ad nauseum…

  Oh go on then, say it again, once more with feeling….

  I think there has been a secular downtrend visible in the US rate of profit, but there is also a profit cycle in the US capitalist economy that lasts from trough to trough about 32-36 years.  I reckon that the last peak year of 1997 set the marker for the end of the ‘neoliberal’ up phase from 1982.  The down phase then began to exert pressure on the US capitalist economy.  It forced an even bigger switch from productive investment in manufacturing, transport and communications into financial and property sectors to maintain profits through the expansion of what Marx called fictitious capital, or credit.  That laid the basis for the crisis in 2007 and the ensuing major slump.  In that sense, Marx’s law of profitability did operate to cause the crisis.  The great up phase in profitability after 1982 had finished in 1997, some ten years before the Great Recession.  We are still in the down phase, which will last for at least another three to seven years, on my reckoning, in what is really a long depression like the 1880-90s in the US and the UK.

  But remember the data for these arguments are for the US only.

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• Owen Jones: This austerity backlash across Europe could transform Britain

  But, along with the booting out of France’s Nicolas Sarkozy, the Greek elections could mark the beginning of the end for Europe’s Shock Doctrine. “This is a message of change, a message to Europe that a peaceful revolution has begun,” declared Alexis Tsipras, the leader of radical left coalition Syriza, which trebled its seats in Parliament and came second. Given the failure of any party to form a government, new elections beckon, and Syriza can expect to do even better. But, already, the results have boosted the confidence of all those taking on the austerity offensive across Europe. In the Netherlands, the anti-austerity Socialist Party looks set to stage a breakthrough in the upcoming elections. Those calling for a “No” in the upcoming Irish referendum on the EU Treaty - slammed as an “Austerity Treaty” by opponents - feel momentum is on their side, too. “The people of France, the people of Greece are against the policies of austerity and it is now the moment for Ireland to add our voice to that,” declared Mary Lou McDonald, a leading anti-Treaty politician.

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• UK’s poorest families face tightest squeeze on income, figures show

  Austerity and class war in the UK

  The UK’s poorest families are facing the tightest income squeeze of any group due to higher rates of inflation and lower wage boosts, according to new analysis of official figures conducted by the Trades Union Conference (TUC).

  The bottom 10% of the country by income are facing effective inflation rates of 4.1% versus just 3.3% for the richest, while official Office for National Statistics (ONS) statistics from 2011 show the wages of the bottom 10% of earners rose just 0.7% compared with increases of 1.6% for the richest.

  Taken together, the two measures suggest real wages for low-income families in Britain are falling twice as fast as those of their richer counterparts. In real terms, the bottom 10% of wage earners are 3.4% poorer than they were a year before versus a 1.7% drop for the top 10% year-on-year.

  Some stuff on how the effective inflation rate for the UK is calculated:

  The UK’s official measure of inflation, the CPI, stands at 3.5% and is calculated by measuring changes in prices of thousands of items from different categories: food, utility bills, recreation and more.

  New research by the TUC has re-calculated this figure from 2010 to February 2012 using data showing how each group spends its money. Families in the bottom 10% spend a much higher proportion of their income on food and household costs such as utility bills than the richest 10%, and owing to lower levels of spending do not benefit nearly so much from smaller increases in recreation, clothing, restaurants and other leisure activities caused by the stagnant economy.

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• The Art of War | Frieze

  The Benjamin of Battles, the flâneur of warfare.

  The attack conducted by units of the Israeli Defence Forces (IDF) on the city of Nablus in April 2002 was described by its commander, Brigadier-General Aviv Kokhavi, as ‘inverse geometry’, which he explained as ‘the reorganization of the urban syntax by means of a series of micro-tactical actions’.1 During the battle soldiers moved within the city across hundreds of metres of ‘overground tunnels’ carved out through a dense and contiguous urban structure. Although several thousand soldiers and Palestinian guerrillas were manoeuvring simultaneously in the city, they were so ‘saturated’ into the urban fabric that very few would have been visible from the air. Furthermore, they used none of the city’s streets, roads, alleys or courtyards, or any of the external doors, internal stairwells and windows, but moved horizontally through walls and vertically through holes blasted in ceilings and floors. This form of movement, described by the military as ‘infestation’, seeks to redefine inside as outside, and domestic interiors as thoroughfares. The IDF’s strategy of ‘walking through walls’ involves a conception of the city as not just the site but also the very medium of warfare – a flexible, almost liquid medium that is forever contingent and in flux.

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• Treaty not a safe option but a perilous experiment | Terrence McDonough

  “There will be no disaster in the event of the need for a second bailout. It is the adoption of the budget provisions of the treaty which is a risky and perilous experiment”, says  NUIG professor of economics Terrence McDonough.

  He points out that alternative funding options will be available if Ireland votes no, while voting yes, rather than being the safe, conservative course ensuring ‘stability’ as those advocating a yes vote in the Fiscal Compact Treaty Referendum say, will lead to unprecedented situation which could lead to economic disaster.

  “Take a country at the bottom of a depression. Force it to run budget cuts and tax increases year after year after year. Force this same policy on its neighbours and trading partners. Run this into the foreseeable future and hope it results in stability, confidence and recovery. This is emphatically not the safe option. This is a dangerous experiment, completely without historical precedent.”

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• The “Stability Treaty” Video | A CounterSpin Collective Remix

  A CounterSpin Collective remix of the Irish Government’s information video on the upcoming referendum on the so called “Stability Treaty”. We reject the idea that any copyright laws apply to government propaganda or other publication paid for exclusively by people’s taxes. This applies to works of fiction like the original video.

  Via Soundmigration

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• It’s a No vote until Ireland starts to support the development of the indigenous sector

  Commenter on the Irish Times website, leaves this below the article where Barry O’Leary, chief executive of IDA Ireland calls for a yes vote in the Austerity Treaty. I’m including it here because he makes an essential point about what is wrong with industrial policy in Ireland.

  Barry,
  you are a State Appointed executive on a comfortable salary with possibly a decent pension. You are NOT like other men (quote from the Pharisee and the Publican).

  You have come trotting out to tell us mere mortals that your future is best served by being pro Treaty.

  I work for a brilliant Irish company that is in wonderful growth for the past 3 years in the midst of the deepest downturn and your kind (Enterprise Ireland) allowed us to be taken over by a foreign multinational. We had a market leading product set designed here at home and you allowed the cream of Irish invention fall into foreign ownership. We are profitable and still growing (from 230 to 600). This could have been a model of how Irish design and technology can succeed. Yes the Irish owners needed out but there could have been a way of keeping the profits generated in Ireland. Ours was a situation where the GNP and the GDP converged as there was no profit repatriation…… .THERE IS NOW……… clowns running the show again.

  Your kind of leadership is NOT PATRIOTIC when you let things like that happen. You represent the Inferiority Complex of the Irish State in one aspect.

  Please trot off back into your leather boardroom chair and plan your next trip to Venice, and let the rest of us get on with reviving this country’s self respect. Europe will just have to know that we were once a very brave people who could put our country first against great odds…. Now we have your cabal of well paid public Quango drivers “educating us”……. that is REALLY how far we have fallen……..
  NOT ME, NO FURTHER. and NO FISCAL COMPACT.

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• Without state spending there’d be no Google or GlaxoSmithKline | Mariana Mazzucato

  Where would Google be today without the state-funded investments in the internet, and without the US National Science Foundation (NSF) grant that funded the discovery of its own algorithm? Would the iPad be so successful without the state-funded innovations in communication technologies, GPS and touch-screen display? Where would GSK and Pfizer be without the $600bn the US National Institutes of Health has put into research that has led to 75% of the most innovative new drugs in the last decade?
  The state’s role in each of these cases was not just about correcting “market failures”. What the state did was to take on the greatest risk, before the private sector dared to enter - acting as an “entrepreneurial” state. In biotech, venture capital entered 15 years after the state invested in the biotech knowledge base. In nanotech, scientists in the NSF coined the term before business understood its potential returns.

  Even modern-day Keynesians have not recognised this enough. The state is not only important to kickstart the economy during recessions through fiscal stimulus, but also to lead the way during boom periods that coincide with the beginning of new technological and market opportunities. In such periods, the private sector waits for the state to first make the heavy and risky investments. Indeed, Keynes himself indirectly recognised this in a letter to Roosevelt in 1927 when he described business as “domesticated animals” that needed the state to become lions.

  However, typically state investment rarely sees any return on this - certainly nothing close to what those who put money in later on in the process get.

  To end this parasitic situation, it is important to think creatively how the returns from state investments can be retained to benefit the public that has funded them, and be reinvested in the next round to generate more. This could include “income contingent loans”, where state investments in particular companies and technologies reap a return if/when the companies make it big. Or also in the form of a public investment bank or fund, which retains equity in such investments. The Brazilian development bank (BNDES), which provides long-term “patient” finance to Brazilian industry - a key source of its success today - makes a 20% return on equity from its direct investments in high-growth sectors like biotech and renewables. A large percentage of this return is redistributed into the economy by the treasury. And one of the sources of Germany’s “competitive” position in Europe is due to its system of public investment banks that creates a virtuous circle of investment in the regions. Invest, reap a return, and reinvest.

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