Gosplan14_the_Third [none/use name]

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Joined 2 years ago
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Cake day: January 5th, 2023

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  • Venezuela’s economic crisis really began after oil prices fell drastically in 2014 and the west used Chavez’s death/Maduro’s election to increase pressure on the country via sanctions which for example made buying parts to maintain oil refineries difficult. Before that, it was doing about as well, or better (of course, failing to become independent from oil exports) compared to the other countries in Latin America.

    Argentina was already in a crisis for the last …20 years-ish, but this acceleration of the crisis happened in a week even as Milei backpedaled on some potentially damaging promises like cutting trade with China.







  • Well, there’s a bit of context behind it:

    The name is a meme in Poland and comes from the 1969 adventure-comedy mini-series Jak rozpętałem drugą wojnę światową (How I unleashed World War 2).

    In the second episode, the main character is in hiding insideof Nazi Germany after escaping from a Prisoner of War camp. He is eventually arrested for an unrelated reason and this is the fake name he gives to the German bureaucrat using the typewriter. Unsurprisingly, he is baffled by the spelling, especially once he gets it right… since he gets an even more difficult fake birthplace to spell by the MC.

    Edit: If you mean Grzegorz, it means George and isn’t too difficult, I suppose.






  • Raising the interest rate (i.e. making loans more expensive) is the measure taken if there is a belief that there is too much demand for goods by the population (Keynesian inflation theory) or too much money in circulation (Monetarist inflation theory). It’s taken in the hope that reducing the purchasing power of the population will slow the price increase down with falling demand. Which is why you had mainstream economists talking of say the need to increase unemployment (i.e. take people’s incomes away) and how wage increases are bad due to the supposed theory of the wage-price spiral.

    Wage-Price spiral

    “Wage-price spirals, at least defined as a sustained acceleration of prices and wages, are hard to find in the recent historical record. Of the 79 episodes identified with accelerating prices and wages going back to the 1960s, only a minority of them saw further acceleration after eight quarters. Moreover, sustained wage-price acceleration is even harder to find when looking at episodes similar to today, where real wages have significantly fallen. In those cases, nominal wages tended to catch-up to inflation to partially recover real wage losses, and growth rates tended to stabilize at a higher level than before the initial acceleration happened. Wage growth rates were eventually consistent with inflation and labor market tightness observed. This mechanism did not appear to lead to persistent acceleration dynamics that can be characterized as a wage-price spiral” (IMF, Nov/2022)

    Cutting taxes is a measure taken with the hope that with reduced costs, private enterprises will scale up production and increase the amount of goods’ supply as compared to demand, lowering or at least stopping the increase in prices, as orthodox economists hold the thesis that excessive demand (as supposedly caused by the 2020 Covid Crisis) is responsible for the currently high inflation.

    Nowadays, it’s commonly accepted in many studies, such as this recent one from New Zealand that a significant cause in the inflation is the desire for even higher profits compared to what they already had in years prior.

    Lowering taxes in response to a stagnant economy in this case is, as I understand it, unlikely to affect inflation, but is rewarding a private sector that used the fuel and energy price crisis caused by the war in Ukraine to enrich itself even as those prices fell again, with more riches. Especially considering the currently stagnant economy, it’s placing hope on a sector that has already failed to deliver out of an ideological belief that the state is unable to do what the private sector can, as well as the support it gets from and how many politicians have personal relationships with the private sector.


  • The government has more interest in pursuing the global power ambitions of the Standort Deutschland rather than accomplishing environmental goals, even in spite of one of the parties being named Die Grünen (which is basically just good PR for them and nothing of substance) - and the goals that are being pursued anyway are all to the slogan of Cem Özdemir “Zwischen Wirtschaft und Umwelt gehört kein oder”. Environmentalism as long as it remains profitable, even at costs of +2, +2,5, +3 or more °C

    The next elections are sure to be won by Merz, with or without the AfD, and very likely to have the FDP in influential ministries, so nothing will change - or perhaps even for the worse.

    That’s what happens when the main goal of production is not the goal of creating socially necessary goods, but to insert money into the labor process and end up with more than you had at the beginning.


  • Also the Iranian Revolution (which wasn’t entirely Islamist in nature, but they were the ones who won the power struggle in its immediate aftermath - the liberals were out of the picture by 1980, while the communist opposition got finished off in mass executions in 1988) happened due to the unpopularity of absolute monarch Mohammad Reza Pahlavi, who was stubbornly supported by the US to his last days.

    And this has roots in the western-supported coup against Mohammad Mosaddegh in 1953, who was a social democratic reformer.

    It’s a story that unfortunately repeats many times around the region, and globally too.