Good post by Joe Stiglitz. Extract:

Does anyone in their right mind think that any country would willingly put itself through what Greece has gone through, just to get a free ride from its creditors? If there is a moral hazard, it is on the part of the lenders – especially in the private sector – who have been bailed out repeatedly. If Europe has allowed these debts to move from the private sector to the public sector – a well-established pattern over the past half-century – it is Europe, not Greece, that should bear the consequences. Indeed, Greece’s current plight, including the massive run-up in the debt ratio, is largely the fault of the misguided troika programs foisted on it.

So it is not debt restructuring, but its absence, that is “immoral.” There is nothing particularly special about the dilemmas that Greece faces today; many countries have been in the same position. What makes Greece’s problems more difficult to address is the structure of the eurozone: monetary union implies that member states cannot devalue their way out of trouble, yet the modicum of European solidarity that must accompany this loss of policy flexibility simply is not there.

Seventy years ago, at the end of World War II, the Allies recognized that Germany must be given a fresh start. They understood that Hitler’s rise had much to do with the unemployment (not the inflation) that resulted from imposing more debt on Germany at the end of World War I. The Allies did not take into account the foolishness with which the debts had been accumulated or talk about the costs that Germany had imposed on others. Instead, they not only forgave the debts; they actually provided aid, and the Allied troops stationed in Germany provided a further fiscal stimulus.

It’s impossible to overstate the ironies in the Eurozone’s (for which read German) hostility to the new Greek government. Which is why Stiglitz’s reminder of the Marshall Plan (which not only recognised the foolhardiness of the Versailles Treaty’s imposition of crippling debts on Germany, but also the wisdom of helping countries to recover from the disasters into which they themselves had blundered) is so apposite.

Lovely Observer piece by Armando Iannucci. Sample:

While millions were spent on allowing Scotland a full, careful debate, a debate about the future of 8% of the UK population, Cameron knocks off a cheap and quick version for the English, who make up an astonishing 84% of the UK and surely deserve something more considered. This says some unpalatable things about both Cameron and our constitution. For one, it reveals our prime minister for the slap-dash opportunist he is. This is what he does – ignores the detailed pros and cons, thinks of himself as a commonsense sort of guy and so goes on to decide he and he alone knows best. It’s what led to the bungled and inordinately destructive reforms to the NHS conducted in Cameron’s first years in office, described last week by the King’s Fund, a non-partisan thinktank, as “incomprehensible”, “disastrous” and with a decision-making process “not fit for purpose”.

Cameron’s same duckin’-and-divin’ opportunism shines out of every response he makes to the proposals for televised leaders’ debates, ie, offer cobbled-together arguments masquerading as reasonableness to make the whole thing go away. And so here he is too with his suggested constitutional reform.

The reason Cameron can do this is because he is prime minister. However much we kid ourselves that we live in a democracy where the law is deliberated over by an elected and accountable set of parliamentary representatives, the truth is that any prime minister commanding a majority of MPs can do anything he or she likes. Increasingly hands-on prime ministers have neutered the independence of cabinet ministers and their departments and run a far more presidential system of government. Advertisement

Their power to act on whim is far more sweeping than anything most official presidents can do. The president of France has a prime minister whom he can appoint but can’t dismiss and must deal with a national assembly that may have a majority made from his opponents. Even the American president, the Most Powerful Man on Earth, faces so many checks and balances to his executive authority that he can often feel powerless if Congress is resolved to block his ideas.

Iannucci’s right. Cameron has long been past a joke. Every day he is somewhere on our TV screens, speaking at some photo-op, saying how “passionately” he feels about whatever abuse/scandal has surfaced in the Daily Mail that morning and how he is determined to do something about it Right Now. He feels passionately about everything, which in fact means that he’s passionate about nothing — except perhaps staying in power and warding off Boris Johnson.