Controversial historian Niall Ferguson sees no solution for the current European Debt Crisis which he describes as a “European Lehman Brothers“. Are we really in for a shocker? Is the biggest strike still to be dealt on the European economy? Will the euro suffer the consequences? Worse still, is it – as Joseph Muscat would have it – the fault of GonziPN?
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9 replies on “Crisiswatch”
Niall Ferguson is not a ‘controversial’ historian; he is in fact a well-respected leading academic.
Some of his more stogey fellow-academics may not like his excursions into television and the blogosphere, which they consider beyond the pale. I have also seen him labelled as ‘right-wing’, a tag which may extremely damning in the British historical profession long dominated by card-carrying Marxists.
Andrew. Don’t you think that the fact that Niall Ferguson provokes this kind of reaction renders my description of Ferguson being “controversial” as an entirely “fair comment”?
Yes, it was a certainly intended to be a fair comment on your part. But unfortunately, the uninformed may underatand it to mean ‘controversial historian’ as in David Irving, the Holocaust denier.
Adding the adjective controversial is dangerous in my view. It is also tabloidy, because, like it or not, it serves as a commentary to everything the guy may say in the clip. You are qualifying his opinions before he’s even opened his mouth. Why not simply say “historian”, and leave it to the listener to decide, “hey this guy has some controversial opinions.”
I see your point AVG and agree with it. I was thinking in terms of his recent forays and “clashes” with peers because of his style but it’s true that the adjective could influence readers/viewers unduly.
I apologise for that twist (it’s a good week for contrition).
http://www.telegraph.co.uk/news/politics/8738679/Niall-Ferguson-The-real-point-of-me-isnt-that-Im-good-looking.-Its-that-Im-clever.html
More on Ferguson.
There are two issues that are totally separate – 1. the management of individual economies within the EU and within Eurozone and 2. The fate of the Euro.
The economies of France and Germany, for example, are doing ok in the circumstances. Yet should Greece go bankrupt, the Banks in Germany and especially France will take a big knock because of their significant lending to Greece. This may have a domino effect on the Euro as Germany may have to exit but then it is like the rest caught between a rock and a hard stone.
Malta’s economy is lightweight with low participation in the employment market and a relatively low earnings per capita, hence we can not be hit big time because we have little body mass to hit.
The contraction of value of salaries, inflation in a deflation global scenario, a high tax regime especially in indirect taxation, low capital investment, etc etc is not impacted by the woes of the Euro but by the management capabilities of Government.
The crises has only one solution (other than a war or a great depression) and that is to harness the Banking system world-wide under the aegis of Central Banking. Banking is mostly a generator of money supply. The world economy will need deflationary periods to ease pressures to create demand even when demand is not there. With Banks having to give a higher dividend year in year out, they have to give out loans on an increasing scale even through years when demand is weak. When Banks stop lending, than currencies stepped in with quantitative easing (ie they print money to make good for lack of money supply caused by decrease in bank lending) even when demand is weak. Under the current system, the crises can never be solved without extraordinary initiatives. Now this can mean ‘wars’. Hopefully it will mean the recognition of Banks as having the function to supply money hence they should never and can never be a profit making operation in ‘listed on stock exchanges’ mode.
So Danny do I read you right if I (summarise) say that BECAUSE our economy is small it is even more cushioned from the euro crisis?
(On a sidenote, listening to Belgian vox pop radio this morning there seemed to be a unanimity among listeners that the biggest mistake was letting countries from the “south” into the euro – admittedly the number of tabloid truths bandied around was incredible. Best among those was the assertion “que dans le sud tout payement se fait en black”.)
No…what i’m saying is that the performance of individual economies is one issue totally seperate from the Euro crises underpinned by the debt crises of Greece, Ireland Portugal, Spain and Italy that puts the major French/German banks in potential crises (with talk of psooible nationalisation of especially French banks already mooted in some corners).
Therefore I am saying : let us ensure that the analysis of individual economic performances (in our case that of Malta) is kept seperate from the ‘Euro’ debt crises. The first is in our hands, the debt crises is not.
Re size of economy, what i am saying that our economy remains a rudimentary one and therefore it does not have too much fat to lose. We keep talking on how the crises/recession/etc did not hit us because of measures taken. Where is the debate? What were these measures? Why does our deficit remain persistently as high as that usually associated with election year? What i’m saying is that brcause ours is a rudimentary economy, it is easy to paper over the cracks…the gulf will only start appearing years down the line…remember Greece with its out of hand military expenditure to rival Turkey, with its ego boosting olympics, many were querring this exenditure, whenever i was in Greece editorial talk was always abot the deficit…so i ask…how come the greeks passed their test to join the Euro?…this applies to some extent and to different degrees to Portugal, Spain and Italy.
So what i am saying is that we need to talk rationally about our economy. We are not doing it at all. It should stop being a propoganda corner stone.
Re the Pigs at the south….that is a very very old impression held by people from the north….in fact i can recall an advice given to us by an established UK economist that we should inform the European public that Malta’s economic dicipline is far removed from the south mentality… yet remember one thing…Germany’s economy was and remains ‘strong’ because it was an aggressive seller ti PIGS…and drew its banks into the equation…go to Portugal as you see Seamens everywhere…look at the Athens underground (for pite’s sake, Greek debt – no one knows where the bottom lies) and you find the Germans plus others as major suppliers…now China too is fearing the backlash of the European crises and is trying to help with the purchase of bonds because if the euro implodes china will lose its major customer (through thousand of businesses that transfered to China to be more competitive as european unemployed soared and value of wages decreased in Europe. This has little impact on Malta…if the euro goes we would just go through a sunami and hope to come out at the other end in some shape or form, there is nothing we can do…yet the management of our economy is up to us. moody’s revised rating wil mean higher interest rates to pay and poits at issues we never discuss…I know that this is a lawyer based blog so i do not expect this debate to happen here…but someone must kick-start this debate as a matter of urgency…before the big boys butt in with their cliches…