Keynes's "Economic Consequences of the Peace" a Christmas gift for our government

patslatt

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Shortly after the Treaty of Versailles at the end of WWI,the economist Keynes wrote this book explaining in technical detail why the war reparations demanded in the treaty would wreck the German economy and would be impossible to repay. At one point in the 1920s,there was a ruinous German hyperinflation in which currency notes were hauled in wheelbarrows.

Keynes's book would be a useful Christmas gift to all Irish government ministers and opposition leaders to educate them on the futility of both the high interest rates and the guarantee of bank debts in the bailout. The EU is placating Germans' excessive fear of inflation by imposing impossible bailout terms,so we should remind Germans of their historical bitterness towards Versailles.
 


He3

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Are we the first country to pay reparations without ever having gone to war?
 

patslatt

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Are we the first country to pay reparations without ever having gone to war?
THe Irish government guarantee of the Irish banks prevented huge losses on Irish bank bonds owned by German,French and UK banks. Why should Irish taxpayers pay for the poor decisions of those foreign banks,which are private businesses, in lending to reckless Irish banks?
 

Edo

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Are we the first country to pay reparations without ever having gone to war?
Dont know about that - but we are the one of the first countries to be dumb enough to pay millions of euros for an acre of grazing land for cattle

Which when you get to bottom of all the hysteria is why we are where we are -

BTW we will paying interest on money we are borrowing to pay for the other money we borrowed and spent like drunks in a night-club

Less on the reperation nonsense - we spent the cash - now we have to pay it back - dont remember anybody complaining about the crazy money they were earning in the building trade, the retail sector, the pay rises in the public sector or the wedges of cash they got flipping their houses........it was on this borrowed money too.
 

He3

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We?
 

patslatt

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Pay attention!

Dont know about that - but we are the one of the first countries to be dumb enough to pay millions of euros for an acre of grazing land for cattle

Which when you get to bottom of all the hysteria is why we are where we are -

BTW we will paying interest on money we are borrowing to pay for the other money we borrowed and spent like drunks in a night-club

Less on the reperation nonsense - we spent the cash - now we have to pay it back - dont remember anybody complaining about the crazy money they were earning in the building trade, the retail sector, the pay rises in the public sector or the wedges of cash they got flipping their houses........it was on this borrowed money too.
You haven't paid attention to the previous posts. The bottom line is that Irish taxpayers through the guarantee of Irish bank bondholders are bailing out banks in the UK,France and Germany which were stupid enough to lend to our reckless casino Irish banks by buying their bonds. In a capitalist market economy,such bad business decisions are discouraged by the pain of losses. Why should the losses be socialised on the backs of Irish taxpayers? If the EU banks must be saved in the opinion of EU governments,then let them and the European Central Bank pay for the rescue.

That said,if the loans in the bailout were given to us at an interest rate of 2 or 3% in line with our economic growth potential,in recognition of the sacrifice of Irish taxpayers,that might be a reasonable deal. But either our Europhile leaders are incapable of negotiating it or they hope for a renegotiation when it becomes blindingly obvious that the existing interest rates will choke the economy.
 
D

Dylan2010

Screw Keynes, a junior cert math book that covers compound interest should suffice. Was it Einstein that is supposed to have said that Compound Interest is the most powerful force in the universe. ;-) . must have made an impression here I am debt free, I'd recommend it!
 

Cassandra Syndrome

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Screw Keynes, a junior cert math book that covers compound interest should suffice. Was it Einstein that is supposed to have said that Compound Interest is the most powerful force in the universe. ;-) . must have made an impression here I am debt free, I'd recommend it!
+1

Keynes should be banished. Or at least categorised in the comedy section, or the how not to category.

He makes economics so intolerably boring for school kids to learn. Probably rigged that way as well.

He was an ignorant, nazi sympathising, anti semitic, user of the "N" word bigoted eugenist racist that was instrumental in the creation of World War 2, the destruction of real wealth and the setting up of the IMF and the World Bank.



Now there's a one liner I would dearly love to exclaim at a nauseating left wing middle class pinko, Guardian / Daily Kos reading dinner party.

(not that I would be there to begin with!)
 

owedtojoy

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Shortly after the Treaty of Versailles at the end of WWI,the economist Keynes wrote this book explaining in technical detail why the war reparations demanded in the treaty would wreck the German economy and would be impossible to repay. At one point in the 1920s,there was a ruinous German hyperinflation in which currency notes were hauled in wheelbarrows.

Keynes's book would be a useful Christmas gift to all Irish government ministers and opposition leaders to educate them on the futility of both the high interest rates and the guarantee of bank debts in the bailout. The EU is placating Germans' excessive fear of inflation by imposing impossible bailout terms,so we should remind Germans of their historical bitterness towards Versailles.
Keynes' dire predictions did not fully come to pass. Germany's reparations were consistently reduced ending in the Young Plan of 1929:

The total amount of German reparations after World War I that the Germans were expected to pay was drastically reduced to $26 billion payable over 58-1/2 years. Germany's last payment would come in 1988.
Payments were to be tailored to economic conditions in Germany. By that provision, the international community suspended reparations during the Great Depression.

It was more the humiliation Germany suffered over the period that rankled. While Western countries were admiring "All Quiet on the Western Front" and turning against war, the Germans were reading Ernst Junger's "Storm of Steel" and preparing for the next round.
 

Gadfly

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That said,if the loans in the bailout were given to us at an interest rate of 2 or 3% in line with our economic growth potential,in recognition of the sacrifice of Irish taxpayers,that might be a reasonable deal. But either our Europhile leaders are incapable of negotiating it or they hope for a renegotiation when it becomes blindingly
obvious that the existing interest rates will choke the economy.
You got that right - at least one of the Mount Street posters here have already mooted renegotiation down the road.

Mind you, the discredited, spendthrift, caretaker minority government that signed off on this deal will not be involved at that stage.

The historical comparison is interesting, though. One of the factors that undermined the Weimar Republic was that successive governments had an incentive to play up the poor mouth, as part of the national effort against what they considered were unjust and punitive reparations. (Won't be long before the term Diktat enters the Irish political vocabulary.) And at various points the repayments schedule was revised. But even when the Allies tabled milder terms, as in 1930, the political dynamics meant that no one in Germany could accept them. The deepening of the depression, with massive unemployment, actually played into the government's case. Some argue that the government wanted this. And then the wheels fell off.

There are obvious limits to the parallels one can draw here, but there is a wide consensus already that a renegotiation is the only way to avoid default.

And this introduces a perverse incentive into the budget political calculus. The more the economy struggles, the more we can go back to the paymaster to argue that we can't afford the repayments.

Interesting times, worse luck.
 

Gadfly

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patslatt; said:
The EU is placating Germans' excessive fear of inflation by imposing impossible bailout terms,so we should remind Germans of their historical bitterness towards Versailles.
Tongue in cheek, I hope. This will cut no ice today.

A couple of things would help, though. One, reporting pretty quickly that our gdp per capita is no longer 20% above theirs. This makes it hard to appeal for compassion.

Two, sorting out our banks, including the oversight of the IFSC.

Not only have these provided safe haven for wealth that the Germans would much rather have been able to tax - a far bigger concern to them than a few factories lost to the Corpo tax - but it also contributed to the Defba debacle. We forfeited our charming green island image long ago in Berlin, and it won't be restored in a hurry.
 

grafter1

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+1

Keynes should be banished. Or at least categorised in the comedy section, or the how not to category.

He makes economics so intolerably boring for school kids to learn. Probably rigged that way as well.

He was an ignorant, nazi sympathising, anti semitic, user of the "N" word bigoted eugenist racist that was instrumental in the creation of World War 2, the destruction of real wealth and the setting up of the IMF and the World Bank.



Now there's a one liner I would dearly love to exclaim at a nauseating left wing middle class pinko, Guardian / Daily Kos reading dinner party.

(not that I would be there to begin with!)
In fairness Keynes was a great economic theorist. The fact that some have taken his theories and used them poorly doesnt reflect on the mans work.

A theory is only a tool for thought and is only helpful if understood and used properly.

Nazi sympathising? Thats a good one.
 

Radix

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You haven't paid attention to the previous posts. The bottom line is that Irish taxpayers through the guarantee of Irish bank bondholders are bailing out banks in the UK,France and Germany which were stupid enough to lend to our reckless casino Irish banks by buying their bonds. In a capitalist market economy,such bad business decisions are discouraged by the pain of losses. Why should the losses be socialised on the backs of Irish taxpayers? If the EU banks must be saved in the opinion of EU governments,then let them and the European Central Bank pay for the rescue.

That said,if the loans in the bailout were given to us at an interest rate of 2 or 3% in line with our economic growth potential,in recognition of the sacrifice of Irish taxpayers,that might be a reasonable deal. But either our Europhile leaders are incapable of negotiating it or they hope for a renegotiation when it becomes blindingly obvious that the existing interest rates will choke the economy.
And what about moral hazard Patslatt, given that we have thus far been sadly proven to be incapable of responsible fiduciary trust to our fellow members of the EU?

The deal was, that being in a common currency zone we would abide by a covenant to 'print' money fairly, and within rules. Our actions have devalued and debased our common currency and you think we should be let off with an interest rate of 2%.

We should have been turfed out on our mean ear!

Get real, are you from Cavan?
 

eoghanacht

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And what about moral hazard Patslatt, given that we have thus far been sadly proven to be incapable of responsible fiduciary trust to our fellow members of the EU?

The deal was, that being in a common currency zone we would abide by a covenant to 'print' money fairly, and within rules. Our actions have devalued and debased our common currency and you think we should be let off with an interest rate of 2%.

We should have been turfed out on our mean ear!

Get real, are you from Cavan?
Yeah grand , howcome the fiscal recklessness of giant international financial houses goes unpunished?

I suppose they are too big to fail ;)
 

Boy M5

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Shortly after the Treaty of Versailles at the end of WWI,the economist Keynes wrote this book explaining in technical detail why the war reparations demanded in the treaty would wreck the German economy and would be impossible to repay. At one point in the 1920s,there was a ruinous German hyperinflation in which currency notes were hauled in wheelbarrows.

Keynes's book would be a useful Christmas gift to all Irish government ministers and opposition leaders to educate them on the futility of both the high interest rates and the guarantee of bank debts in the bailout. The EU is placating Germans' excessive fear of inflation by imposing impossible bailout terms,so we should remind Germans of their historical bitterness towards Versailles.
Excellent post
 

Boy M5

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In fairness Keynes was a great economic theorist. The fact that some have taken his theories and used them poorly doesnt reflect on the mans work.

A theory is only a tool for thought and is only helpful if understood and used properly.

Nazi sympathising? Thats a good one.
In fairness Keynes was a great thinker who's ideas are prescient today but also was also a highly successful investor.

If that economic illiterate McCreevy had read any of JMK's work maybe he would have built up reserves so making the so called boom "less boomier" & then creating the ability to offset a degree of the global economic downturn through investment. The forgoing is based on the assumption that the banks were regulated & McCreevy would have choked the house price bubble
 

factual

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Shortly after the Treaty of Versailles at the end of WWI,the economist Keynes wrote this book explaining in technical detail why the war reparations demanded in the treaty would wreck the German economy and would be impossible to repay. At one point in the 1920s,there was a ruinous German hyperinflation in which currency notes were hauled in wheelbarrows.

Keynes's book would be a useful Christmas gift to all Irish government ministers and opposition leaders to educate them on the futility of both the high interest rates and the guarantee of bank debts in the bailout. The EU is placating Germans' excessive fear of inflation by imposing impossible bailout terms,so we should remind Germans of their historical bitterness towards Versailles.
I would also recommend the "Economic Consequences of Mr Churchill" by same author. Its about the perils of the gold stanard........
 

He3

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The historical comparison is interesting, though. One of the factors that undermined the Weimar Republic was that successive governments had an incentive to play up the poor mouth, as part of the national effort against what they considered were unjust and punitive reparations. (Won't be long before the term Diktat enters the Irish political vocabulary.) And at various points the repayments schedule was revised. But even when the Allies tabled milder terms, as in 1930, the political dynamics meant that no one in Germany could accept them. The deepening of the depression, with massive unemployment, actually played into the government's case. Some argue that the government wanted this. And then the wheels fell off.

There are obvious limits to the parallels one can draw here, but there is a wide consensus already that a renegotiation is the only way to avoid default.

And this introduces a perverse incentive into the budget political calculus. The more the economy struggles, the more we can go back to the paymaster to argue that we can't afford the repayments.

Interesting times, worse luck.
Learning way too much grim history these days.
 

Paulitics

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And what about moral hazard Patslatt, given that we have thus far been sadly proven to be incapable of responsible fiduciary trust to our fellow members of the EU?

The deal was, that being in a common currency zone we would abide by a covenant to 'print' money fairly, and within rules. Our actions have devalued and debased our common currency and you think we should be let off with an interest rate of 2%.

We should have been turfed out on our mean ear!

Get real, are you from Cavan?
The moral hazard risk should have been applied in the first instance to the Anglo/Irish Bank bondholders senior and sub through a debt for equity swap.

Bondholders in being released from the scope of moral hazard are incentivised to lend without risk of meaningful default and therefore take on riskier lending and when the risk goes south taxpayers bail them out.

If we as taxpayers cannot afford this in the final analysis then it will be German or some other European taxpayer.
 


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