Comment by adventureful | Hacker News Reader

Comment by adventureful | Hacker News Reader

Parent Full thread

The EU crisis is absolutely not a US/UK media thing. Half the Eurozone is melting down, and requires trillions in bailouts from 'printed' Euros to bail them out. It's from decades of unpaid-for lifestyle choices, accumulated debt from Socialism (same thing America is choking on, we just spent more of our money on things like war, but that's a welfare program too for jobs and corporations).

The US is in much worse shape than most are willing to admit or accept, but the US has the global reserve currency it gets to abuse. That changes the game dramatically for the US. If the Eurozone had properly integrated its system, they might have stood a better chance, as it would have been easier to inflate, issue Euro bonds, and buy a lot more time as the US is doing. The EU is half a properly integrated system.

However, you refer to the US Dollar vs the Euro, but then you pick one specific country on the bond yield. Why not pick Switzerland? They have negative yields.

How about the bond yields for Spain, France, Portugal, Italy? France is going to explode next, so we can throw them in as well.

At the moment only Greece (2,65% of eurozone gdp), Portugal (1,83%) and Ireland (1,82%) have received bailouts - which makes 6,3% not "half the Eurozone melting down". Spanish banks may get a €100b bankout aswell - big deal.

But I agree with you on the source of the problem - socialism or uneconomic regulation. That is visible in the doing business rankings of the world bank (http://www.doingbusiness.org/rankings). Ireland(rank 10), France(29),Portugal(30) will hopefully be fine. Spain at 44 is troubling; I'm only really worried about Italy (87) and Greece (100).

However Portugal+Spain+Greece have voted in conservative governments, Italy has an interim economist technocrat government. There is the European Fiscal Compact (http://en.wikipedia.org/wiki/European_Fiscal_Compact). And Germany is pushing very hard for economic reforms in the bailout countries.

Overall it is just a problem with a few countries with bad governments/regulation, not a "Euro" problem and certainly not a European Union problem... And we seem to be taking more steps dealing with it then the US or UK with their problems!

I compared to the US$ because the import/export in USD or GBP is incredibly more significant than the few currencies the Euro has done badly against, like the Swiss Francs or Japanese Yen or Norwegian/Swedisch Krones etc...

The problem isn't socialism, it's a divergence of productivity between the northern and southern regions of the euro area. When you combine this with a shared currency you're asking for trouble.

Note that the socialist nordic countries have stellar economies.

I've noticed a lot of Americans blame the euro crisis on socialism which,is interesting since it doesn't seem to hold up to scrutiny. I'd be interested in hearing why this is. Is it the media, an American distrust of socialism or something else?

I only used the word "socialism" because the other commenter used it - in the original meaning of the word it doesn't exist anywhere in Europe. What I meant is simply bad regulation. You are correct that some of the nordish countries have a more ,,left'' reputation and have things like high taxes, alot of redistribution etc... But if you look at the "Heritage Ranking of Economic Freedom" (http://www.heritage.org/index/ranking), you see: - Denmark (Rank 11), Finland (17), Sweden (21) - Spain(36), Portugal(68), Italy(92), Greece(119)

I've noticed that socialism is definitely a pejorative term in the US - which dismays me as a socialist-leaning Canadian. It's like economic Godwin - call someone a socialist and effective discourse just kind of grinds to a halt.

It's the modern "communism", without invoking the spirit of McCarthy.

It's a pejorative among conservatives, not among liberals.

Ironically that liberal is also pejorative in the USA

Also only among conservatives; don't paint everyone with that brush. They are only half the USA.

People use the word Socialism when they mean something like "perversion of incentives". We perceive that Socialism incentivizes bad choices, like having more children than you could afford without government benefits, or making investments that appear less risky because you assume a government bailout will protect you.

As you point out, the nordic countries show that perverse incentives don't necessarily follow from Socialism. And indeed, America has its own non-Socialist perverse incentives such as encouraging pollution by not enforcing payment of the environmental externalities.

But all things considered globally, more socialism does tend to imply more perverse incentives.

Thanks for the good explanation.

However you end your comment by an unfounded claim that more socialism tends to imply perverse incentives. The same could be claimed of capitalism (or probably any other ..ism), see the banking sector and American healthcare for good examples.

In the rather socialist Denmark (where I happen to be from) when you break a leg you go to the doctor to get it fixed for free, and then you call your employer and tell him you won't be working for the next week, but you'll receive your paycheck nonetheless. When you get a child you take 9 months off work with full pay so that your offspring can get a good introduction to life. When you're out of a job the state will take care of you indefinitely.

Despite of this denmark has a consistently strong economy, is one of the richest countries in the world, and has for many years been in the top three of both the happiest country and the least corrupt country in the world.

When you're out of a job the state will take care of you indefinitely.

Is that the Flexicurity system? How does that work?

Of course less socialism also leads to perverse incentives at times, like avoiding starting a company because of fear of not being able to get health insurance.

This also amazes me too. The US has neither a working, efficient health care nor education system, but blames others for "socialism"?

Not sure about the health care system, but the non-socialist portion of the US education system is the best in the world, and only the socialist portion of it is terrible. I find those to be reasonable grounds to dislike socialism.

Major public universities in the United States, known world-over for their excellence:

* University of California, Berkeley

* University of Washington, Seattle

* University of Massachusetts, Amherst

* Texas A&M

* University of Wisconsin, Madison

Shall I go on?

To call any of those "socialist", when the paid-by-the-student cost has skyrocketed and the paid-by-the-government cost has plummeted, is a bit of a stretch.

Fair point, but they were world-class universities when the government subsidized them, too. There's no inverse correlation between government support of a university and academic quality, being my point.

Agreed, and I think KaoruAoiShiho's original "socialist" comment was about K-12 anyway.

How is California's debt looking these days?

Reply on news.ycombinator.com