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THERE IS A story going back to my days as a trainee surgeon of a consultant who, on discovering that the next patient on his operating list had decided not to use his health insurance, called over his assistant saying to the patient: “I want to introduce you to your surgeon. Tell me young man, have you done many of these operations before?”
The young doctor allegedly responded: “No, not really, but I have seen you do it”. The patient response was fairly predictable stating that he would sign whatever the doctor wanted as long as he did the surgery himself.
Why pay extra for same bed?
Although this is probably more urban legend than truth, it is still as indefensible as it is comical. It does, however, illustrate that the topic of insured patients choosing not to use their health insurance when in a public hospital is not new.
It has received a lot of press lately due to a concerted effort from the medical insurance companies, backed up by the representative bodies from their industry. They have been at pains to point out that the treatment a patient gets when they enter a public hospital is identical irrespective of whether their customer signs the private insurance forms or not.
Although the cost to each individual patient is no different, if they sign up to be private the insurer has to pay the hospital 10 times the cost of a public bed. Ultimately, if this continues, they say it will lead to increases in premiums. The argument is if the bed is the same bed, why would you pay extra for it, when the care is otherwise identical?
Given the current bed crisis, access to the few single rooms on a public hospital ward is difficult. It is likely that the bed really is the same bed. On this basis it’s a no-brainer. Care is absolutely identical. There is no point in signing, right? Well, it’s probably not quite that simple.
Doctors delegating
When a private patient is discharged from any hospital, the claim form has to be completed and signed by the consultant in charge. The lion share of the revenue goes to the hospital rather than any of the doctors, however no one gets paid until the consultant in charge fills out and signs the form.
At the end of the form, there is a condition that the undersigned must have provided the care themselves personally and not have delegated it to another. This means that the doctor must have seen the patient and prescribed their care.
It also means that if the patient has had a procedure or operation that the doctor billing for this must have performed it themselves.
Laya has recently stepped up its number of requests for patient chart information on the pretext that it is performing an audit. It would appear that part of this “audit” is to check whose name appears on the operation note. Is it the consultant in charge or is it someone else? Clearly they are looking to see if doctors are billing for procedures they may have delegated to others.
A challenging time to practice
As a surgeon there has never been a more challenging time to practice. Operating theatre space is reduced and is at a real premium. Surgeons are under pressure to make sure that whatever theatre time they have is used efficiently.
One of the issues which complicates this is the need to train the junior doctors – Ireland’s next generation of consultants. The vast majority of Irish hospitals have doctors-in-training on their staff. They provide much of the first line contact for patients and work long hours in doing so. The quid pro quo is that they get trained. This means access to teaching, mentoring and formal hands-on instruction.
Most surgeons enjoy this, but it does take time, showing someone where and how to place an instrument or suture takes a lot longer than doing it oneself. Taking a trainee through a case rather than doing it oneself and maintaining a certain standard can double the time for the procedure depending on the complexity of the case and the relative experience of the trainee.
The consultant can’t let the trainee do every case on the list. Not only would it take too long but the surgeon themselves needs to do some operating in order to maintain their own skills.
As a result on any given operating list some cases are performed by the doctor-in-training supervised by the consultant and some are done by the consultant themselves. These are all performed to a given, predetermined standard.
Why would you leave the prospect of a procedure fee go a begging?
If a consultant gets paid a procedure fee when they do a case but not if they supervise it, it is fairly clear how the caseload is going to be divided up. If you have to do some of the work yourself, you might as well get paid for it as not.
Why would you leave the prospect of a procedure fee go a begging? This is simply human nature.
This is complicated further by the effect this decision has on others. If a consultant decides not to be the primary operator on a given case and the patient is private, the anaesthetist does not get paid either irrespective as to whether they are supervising their own trainee or doing the case themselves.
Clearly if the anaesthetist is running the operating list that day from start to finish, it does nothing for surgeon-anaesthetist relations if the actions of one mean the other has to forfeit income.
The standard of doctors-in-training and the teaching they get in Ireland is excellent. It is reflected in the great outcomes from surgery in Irish hospitals and the popularity of Irish graduates throughout the English-speaking world. All Irish patients irrespective of their insurance status benefit from this.
Having said that, is the care as the health insurers say exactly the same for everyone? Probably not. When doctors and their loved ones are patients in hospital, the form tends to get signed.
The author of this piece has requested to remain anonymous.
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It’s ‘too little too late’ because they’ve spent the last 6 years destroying demand and reducing discretionary income. What they are seeing is not an accident, it’s the end product of the prevailing EU monetary policy. There’s only so low you can push rates, even past the point of being negative in real terms, to try and compensate for the intentional stagnation of the rest of the economy. They’ve coddled and supported the supply side by foisting the burdens on the demand side, and as a result, nobody has the money to buy anything, and low demand means low inflation. Not only that, but with restricted lending due to insecurity, cutting rates may not have that much effect, other than helping out those people with tracker mortgages.
But sure, everybody will just stay the course rather than turn away from failed policy. They expect that given a long enough time frame things are bound to improve. And after long, exhaustive suffering, when things improve in the least optimal fashion, not as a real result of their policy, they will celebrate. It will be considered bad form to point out that it could have happened a lot sooner and with less suffering.
Exactly.
All this is the result of focusing on the survival of a deeply flawed currency rather than jobs, growth and societal well being.
The EU is in a war effort to maintain the Euro’s existence and economic reality is the enemy.
It’s not the currency or the project. They were both in theoretical terms great things. Just implemented poorly, and with too little concern on the impact of inequality among the member states. Not to mention a common monetary policy in tandem with a common currency. What’s happenng is in my mind more of a breakdown in the idea of community, and since the outcome of the economic catastrophy has neatly divided everyone into the haves and have nots, nobody wants to be responsible for their neighbour. And it’s becoming more politically unfeasible to suggest to the richer countries that they should put the poor ones back on track. If the project fails it will be because private interests protifted too long at the expense of the common good, and those who survived the recession aren’t really interested in fixing it.
EDIT don’t know why that other comment landed where it did.
You cannot have a currency zone without transfers from the wealthy areas to the poorer ones, this is politically toxic to most countries though in the EU.
The Euro fanatics keep saying look at America but they ignore the massive transfers that the Federal Govt. engages in.
They ignore all the shared history, language and wider culture norms that America has.
The problems now in the Eurozone are down to flaws in the Eurozone and the vastly different needs of the individual economies.
The Euro is a purely political construct that has had to ignore economics from its very start.
Societal cohesion is breaking down all over the western world, that is serious problem but not the reason that America and Britain are growing again.
The Euro will only work for it’s largest and strongest member. This is the ultimate logic of the rules. Euro monetary policy is dictated by the performance of the Euro zone as a whole, and as the German economy is by far the biggest component, policy will be designed to do what is best for Germany. Germany underwent a very painful but ultimately successful economic and fiscal restructuring following unification. As a result it entered the Euro finacially strong and internationally very competitive. Following the recession it has once again improved competitiveness and is again growing at a rate towards the uper end of the developed economies, it’s trade balance is massive and inflation remains low.
The problem for the other Eurozone members is that the policy that suits Germany is the exact opposite to what we need. The affect is the same as if we had gone back onto the gold standard and decided to live the 1920′s all over again. Except this time we are trapped. We cannot afford to leave the euro because government debt is at €200 billion we means having our own currency and letting it float would bankrupt us over night. Haven’t our politicians done well.
I’m coming to the view that the eurozone’s biggest current problem is regulation of the banking system. The ECB is handing out free money to the banks, and yet lending by the banks is still sclerotic. That is counterintuitive. Banks want to make money, and can only do so by lending. You would think that they would take the money at 0.5%, lend it out at 4% and even with some risk built into the system they would be ahead.
But at the same time, the ECB is squeezing tier 1 capital ratios. Most people’s eyes glaze over when you mention something like that. What it was supposed to do was make the banks safer to invest in. What actually happens is that the banks simply don’t have the freedom to lend into any project carrying appreciable risk … by law. Yet those are precisely the projects you need at the end of a recessionary cycle.
The capital markets are awash with money, but it’s all going to government treasuries and big businesses bonds with agency ratings, with the usual suspects raking down out of every pot. Loosen the capital ratios and the banks will lend again. Or loosen the rules to let some new banks take the field.
I don’t for a minute think this will solve all the eurozone’s problems, but it will at least create some breathing space outside a deflation-debt death spiral.
This is a very thoughtful comment. I agree that access to credit is a huge problem, but don’t agree that loosening capital restrictions is the solution.
Because the euro as fiat currency is not backed by gold or other security, commerical banks literally create money. A loan is nothing more than a bank adding money by putting some numbers onto an account ledger. They could create as much in this method as they want if there weren’t controls in place.
The loan to deposit ratios of the banks got outrageous. Anglo was 183% before it collapsed. And as the loan instruments were pumped into the economy, the ECB didn’t notice because they were watching inflation. Fixed assets like houses didn’t raise the inflation rate, so the ECB didn’t notice as the economy heated up. They were caught unawares when collapse happened.
Now there’s a ton of bad loans on the books, and we don’t even know how many of them will go bad, and to what extent, because it takes time for default to occur. The increased capital requirements are their precisely to keep another collapse from occuring if things go sideways again on the banks.
Instead of loosening capital controls and lowering lending standards, both of which contributed to the collapse, I think something needs to be done about the loans, arrears, and toxic liabilities the banks have. They have to be dispensed with in the most consumer, economic, or demand way possible. Mostly through write-downs and liquidation. If we just started lending again as normal it would cause more instability. But unfortuneatly, everyone is really dragging their heels to unravel and sort the problem loans out. Especially in the SME sector, where it’s even more critical and hasn’t happened at all.
Isn’t that what we’ve already tried, though? Back in 2008-09 there were enormous write-downs. In Ireland we even set up a toxic bank to get most of the really bad stuff out of the banking system. Judged solely in terms of asset realisations, NAMA has been pretty successful. But that wasn’t the point. It was supposed to lend credibility to the banking sector => recapitalisation => restoring lending. It’s that last bit which has fallen down.
Banks might be more vulnerable if they loaned more to SMEs, but the vaccine is so bad that it might be worth risking the disease. Or at least risking it while trying to prevent contagion. The last few years ought to be the perfect environment in which to start a new bank – one which can take some risks but be too small and too self contained to tank the entire system. It hasn’t happened, or even come close to happening. When I see obvious competition not happening, the most reasonable conclusion is that the barriers to entry are too high.
Well considering that Ireland didn’t have to bail the banks out at all and could have used other strategies, we haven’t done enough write-downs. These mortgage arrears aren’t going to get better–they aren’t ‘strategic’ defaulters as has been implied. They just can’t pay. And there are a lot of reasons for that, one of which is the adjustable rate mortgages that saw people’s payments go up to 3 times more as a result of the bank taking a hit. There’s not a lot of options. You could start a mass repossession thing, which would in the long run destabilise the country further, through unrest primarily, and also by flooding the market with properties. That’s not really a desirable result, and is political suicide. Or you can write off and restructure mortgages and try and keep as many people in their homes as possible. But i think this option, though being better is being very reluctantly used because the full extent of the problem is wider than is being disclosed, and the potential exists that the bailout may not have been enough. The Government obviously does not want that publicised, if that is the dase, and the process is taking an exhaustively long time.
Not to mention that the SME sector is both more vulnerable and more valuable than the mortgage situation. But by all accounts is in such danger that it could collapse. BoI won’t do any writedowns for SMEs, and the government isn’t talking about it, and to me that’s a bad thing. If we just increased credit to SMEs without dealing with its present instability, I would think that destabilising effects of stagnant demand, rising rents, increased overhead, and in some cases multinationals and economies of scale in pricing will affect the whole sector, so all those loans will be on the books as added liability if things go south.
There is another way that the situation is improved, and that is to increase demand by stimulating discretionary income. If you want people to prop up business and pay their mortgages, you gotta make sure they have money in their pockets to use. All the imposed solutions have taken money out of the hands of consumers, so putting it back important. But I think doing that means abandoning a lot of the poor policies that the government has sworn are the right path.
“For countries like Ireland with high debt levels, inflation is generally seen as a positive as it reduces the real value of servicing the debt.”
Extend and Pretend isn’t quite working out as planned eh Michael/Enda?
Destroying debt through inflation is not extend and pretend.
If the ECB had agreed to maintain normal or even slightly above normal inflation for a few years then Europe’s economy would be a lot stronger than it is now.
Stable now but a continent clunking on the floor.
The Euro will mark the point in time where Europe’s decline accelerated and the rest of the world moved on without it.
@Seanie: “If the ECB had agreed to maintain normal or even slightly above normal inflation for a few years then Europe’s economy would be a lot stronger than it is now. ”
Agreed, but it’s not.. see my reply to your other post for reasoins why :)
The EU was doomed to fail from the start IMO. As the EEC it worked, but once they got ideas of being the United States of Europe it all went pear-shaped pretty rapidly.
I also agree that the EU is doomed to failure.
I am worried that that failure is it remains in existence but with perma slump, low growth as the new norm.
The EEC was a great idea, a collection of states working together, for the greater good but allowed remain competitive and reflect their own needs.
Yeah right
The EU is still the most stable, richest, least corrupt, most equal, most women friendly grouping in the world. Look at any table of good shit and it’s always full of EU countries. Transparency, life expectancy, literacy, female participation rate in workforce etc etc.
Never been healthier or better off.
seanie i agree that the eu was a good idea , until that was the greedy politicos and corporate businesses stuck their snouts into the trough , jesus h christ even when you vote these morons out and replace them ,they still mange to grab one last handful of cash before they go.
europe is finished and it’s decline started with the single currency which led to Germany ‘dictating’ to the rest (something theyv’e wanted to do for hundreds of years) of the countries how to run their economies, only today we are told that the ecb (bundersbank) is demanding ireland imposes another 5 billion in austerity cuts and taxs over the next 2 years, it has also told the uk it must impose similar taxs , somehow i cant see the likes of nigel fararge bending over and taking it like enda will !
david burke , are you by any chance an mep?
What the Euro zone does not have is growth.
Europe is in a debt liquidation cycle built up over 50 years but where the creditors get their money back, mother of all scams. watch your bank accounts, houses and income, the gov is coming after you.
The history of the Euro:
The beginning – “too much, too soon”.
Ever since then – “too little, too late” .
The rest of the world has had years of growth and a new cyclical downturn cannot be far away. The EU is still only barely dealing with 2007′s issues at this stage.
@Seanie: The problem in Europe started when the EEC got politicial aspirations – ultimately resulting in the EU and Euro,
You just cannot take a large group of countries – each with their own cultures, priorities, economies, languages and in some cases historical emnities, and expect them all to get along “just cause”.
But that’s what happened.. no wonder then that the EU drags along while the politicians squabble and granstand for their own national press.
Agreed.
America grew in to its current form over 2 centuries of a broadly shared cultural norms and history.
It was also able to ease that tradition to one Federal state by having incredible natural resources etc.
They also operate a massive transfer union, where wealth is shipped to poorer parts in recompense for not being able to devalue their own currency. A core element to any currency zone.
Ian,
Most national economies developed because people wanted to get along “just cause”. The Euro is popular, and provides transparency across Eurozone markets.
But it needs a central bank with teeth and there is much to suggest the ECB ain’t it.
Our country has been run on overdraft as have many others, and Germany has been finding it, not the ECB.
Right
@Paul: As I said above, you can’t compare a single country/economy to a collection of individual nation states which have different national goals, different cultures and values, different languages and throw them all together and say we’re one big happy EU family now without getting people to buy into it.
The rise in Eurosceptic parties in the recent elections would back up the idea that the ordinary people are fed up with having their lives destroyed because the unaccountable bureaucrats at the top are running the place as an economy rather than a society and where the people are (expendable) assets rather than citizens
Then you have the slow, inefficent and expensive process by which the EU dies business – again the result of an incompatible mish-mash of ideals where national (and indeed personal in some cases) needs outweighs what’s good for the EU as a whole.
Our country has been decimated by FF and FG policy (let’s be honest – there’s no difference between them anyway) in support of an idea that is just unworkable. The longer we remain tied to this dying horse, the worse the long-term damage will be.
That’s not true about the US at all.
“America grew in to its current form over 2 centuries of a broadly shared cultural norms and history.”
America has been one of the most divided nations in history since it’s inception. When the Federalists weren’t fighting the Anti-Federalists about the shape of the government, the North was fighting the South about industrialisation and slavery. They continued this fight into civil rights, and now into Repubs vs Democrats. Just look at a red vs blue map and you can see the Civil War never really ended.
“They also operate a massive transfer union, where wealth is shipped to poorer parts in recompense for not being able to devalue their own currency”
Yes, a lot of money is sent to the states in the form of subsidies and support. But the growth of those things are symptomatic of the widening of inequality and the improvement of quality of life. As the corporate industiral complex grew, so has the divide between Capital and Labour, and as R > G, produced increased concentration of wealth.
America has prospered (for a time) because it harnessed it’s natural resources, innovated, and pushed acquisition of wealth before maintainence of the status quo. By that I mean it created the get rich American dream and social mobility over the old money mentality in Europe. It utilised change and upheaval rather than being protectionist to prevent it. Also, importatnly, it wasn’t destroyed utterly by two world wars.
A lot of those advantages are waning however, and most of the advances it has made are slipping. Europe could pass it by if Europe could find a consensus and shed the useless policies that are benefitting nobody.
@Rob: The bigger concern in my opinion is China and countries out that direction.
While the US stalls and the EU drags along the bottom, China and other eastern economies are rapidly ramping up and it won’t be too long before circumstances overtake the EU (again!) and it’ll be the people (again!) who suffer the consequences.
The EU as a political entity does not work and cannot work as long as local/national politics are the priority. This is unlikely to change as we’ve seen the EU only acts coherently (and belatedly) in the face of disaster – and then without thought for the long-term consequences of the band aids it applies.
Revert back to the EEC and things might improve again.
So what if American has had a civil war and political crises. Every country has the same tale.
It still has a common bedrock to fall on. Germany has the same, even though it was split for 50 years, bombed sideways and made up of dozens of kingdoms a 150 years ago.
No one believe that Europe will pass America by, it was possible one time, prior to the Euro’s existence.
The last 15 years have been about Europe sliding in nearly every measure against the economic powers of the world. That has only accelerated in the last 7 years.
No economist, on any side of the Atlantic, sees Europe having reasonable growth this side of 2020.
America grew 3.9% this Qtr. All measures of its debt are falling, it is going to be in very good shape come another few years.
Europe’s growth was just 0.2%.
The Euro and growth are not compatible.
The Chinese won’t last too much longer. Their entire growth is built on construction, and that is a bubble in their economy at present. We know from experience that economic booms based on construction, the housing sector, and real estate inevitably fail. When that happens, the Chinese economy will tank. That is unless they can balance things out and develop other growth sectors. Likewise, a lof of their success has come from intentionally devalueing their own currency for an extended amount of time, something that has created trade imbalances and hurt countries who could really compete with them. People have been complaining about that for ages, and if it ever ends, then Chinese companies might be wiped out by better financed and better innovating foreign competitors.
Ian what I read is you saying the EU can’t work unless it becomes more centralised, and more integrated. I don’t know if that’s the case. I’m not sure that more authority is the only way. I think what is really lacking is the sense of community among member states, and of cooperation rather than competition. The same sorts of results can occur when people decide to work together as when they are forced to do so. It’s just that as long as everyone has a ‘our country first’ approach then sure, there will be inequality and discord. As long as politics doesn’t serve the people, Im not sure it will ever matter.
And most governments don’t act coherantly unless their is a disaster. By then it can be too late.
Most of those things you said don’t go together, and they certainly don’t coherently support the conclusion you reached.
“So what if American has had a civil war and political crises. Every country has the same tale.”
This was to refute your assertion that America is a unified state. It isn’t. The Civil War was one 5 year period. Americans have been polarised from the beginning, and still are. Even now their is tremendous gridlock. This year the government shut down for 2 weeks because it couldn’t pass a budget. That is representative of how things are. It’s happened I think 12 times before.
“It still has a common bedrock to fall on.”
It has a robust domestic economy and is driving innovation in the world. It has certain principles like competition and individualism that are fraying very rapidly. It’s not community that has given the US an edge, it’s individualism and competition. But even that can’t last forever.
“No one believe that Europe will pass America by, it was possible one time, prior to the Euro’s existence.”
Europe can’t pass the US by as an entity before it was an entity. If you mean the EEC or a prior confederation, it’s hard to give credit to a collective of states that all have different interests and currencies versus a single nation.
“The last 15 years have been about Europe sliding in nearly every measure against the economic powers of the world. That has only accelerated in the last 7 years.”
If you count the UK as part of Europe, then you can only really compare the US, Europe, and Russia. China, the rest of Bric, India, and SE Asia were developing. This is not zero sum, their growth has meant a very gradual move to integrate as a developed nation, which is natural and also spurred on by the drive to outsource labour to cheap sources. Europe in that period has also been integrrating a lot of poorer, less industrialised nations, most of whom were former Soviet states. With that in mind, developing economic consistency across the project to the extent that it has occured is quite impressive as it is. They had to deal with internal stratifications and divisions that in this sense the US didn’t.
“No economist, on any side of the Atlantic, sees Europe having reasonable growth this side of 2020.”
Nobody is predicting it, as long as prevailing policy stands as is .Change to policy would lead to changes to prediction. This is not proof in and of itself.
“America grew 3.9% this Qtr. All measures of its debt are falling, it is going to be in very good shape come another few years.”
The US had a good quarter, and things are slowly looking like they might pick up. Much of that of course is due to the QE radical efforts of the Fed, low interest rates, and of course a demand stimulus. No one knows how long it will last.
The debt, however, is still increasing, as evidence by a new move to raise the debt ceiling. The deficit is falling, but this is due to sequestration cuts coming into effect, as a result of congressional deadlock. It has nothing to due with smart planning and structural improvement.
And growth per se is not the only or best indicator of economic health. Widening inequality, a drastic increase in the numbers of people on welfare, a higher rate or real unemployment, an increase in homelessness, and state bankruptcies are all as important. At a minimum they show that the economic growth has not benefitted the majority.
It’s whataboutery in any case. If the EU can’t grow, it won’t have anything to do with the US. It will be a result of internal strife, division, and adherance to poor monetary policy.
I read this morning that Enda kenny could be the next President of the European Commission.
@Bobby: He’s been lining himself up for that ever since he went to Europe and told them we all went mad in the good times.
You can see it in how he stands there like a good boy before his EU “betters” and then comes home and condescends us all on TV like the schoolkids he should have stuck to teaching!
(Thanks for that btw people of Mayo)
Spud gobblers say no more
Brian.
Is your mun “Cum gobbler Johnson” by any chance?
Ah well if it’s down to that then yeah my late mother was a wonderful cum guzzler according to my late dad but never a thick spud..
Yeah right FF man
A real reason not to vote FF with lower class like seanie as their stalwarts
She made a pure fool of him, not that that was difficult to do.
A lab rat had less disease by the end of it all.
Be it wrong or be it right, in my opinion (and it just how I feel not based on anything else) we should leave the EU, sick to death of the lot of it, if we left yes we would feel some pain but equally so we would feel some gain, enough of being ruled by other countries, did we not spend 100s of year fighting off other countries trying to rule us and now we just let them walk all over us, sometimes you just got to say enough and in my opinion it’s that time now and has been for a long time, so all you red thumb numnuts click away it’s just how I feel and most of the time if you run with your gut you are never far wrong,
There’s a hole in the bucket dear draghi dear draghi, it to late to patch it dear draghi dear draghi. Some good news the Euro is busted because of the dithering policies and inactions of the policies that made the currency. Oh what will they do now because we no money left.
Slapping Ireland with 40% of the debt turned us into a concentration camp ,wrecking a small country whose witless government and banker,s relentlessly heap bill,s on us and shamelessly give themselves. Huge salaries ,AH stop
Wonder what this means for a tracker mortgage?
Ideally they would lower interest rates to stimulate lending but I don’t think rates can get much lower than they are now.
One solution to kick start the national economy is for people to spend their money. To spend money you have to earn more money than you are earning now. People are saving their highly taxed money to pay more taxes like property taxes, water charges, third level fees, etc.
Why would anyone take on more work to earn more money? Most of this extra income would be taxed at 41%, usc would be 7% minimum, prsi could be 5% and public servants would pay a pension related deduction (tax) of around 9%.
The tax system needs to be simplified and radically changed so that people are incentivised to go out and work. If people have a few extra bob in their pocket they will spend it, especially if they know they can earn more money and not be skrewed working for it.
but billy the eu and ecb are calling for more tax’s and more austerity another 5 billion over 2 years for ireland, you cant spend if you aint got it ,and you can’t do extra work if it aint there, the eu has had a policy designed to turn the working man into a workslave, cuts to wages disintegration of working rights, massive unemployment leading to cheaper labour costs for the big multi nationals and corporations ,( coupled with low taxation for the same ) hikes in banks charges and financial penalties, lack of investment in social and national infrastructure , lack of funding for small and medium businesses and extortionate repayment rates if you can get funding , high taxation on the ordinary people with ‘new’ stelth taxs being imposed every few months.people are under so much pressure that one day it will explode and the whole of europe will feel the shockwave.
Agreed Eric, the policies implemented by the troika and our own government have failed dismally. The ordinary worker is at the mercy of the employer, look at Valeant (bausch and lomb). None of the right wing economists will agree with me on this but we need a stronger trade union movement in this country. The tax on workers incomes is crazy, going to the high rate on circa 33000 euro, does nothing to encourage productivity.
The proof the policies of the troika have failed is seen in the mass migration of our children.
It’s not the currency or the project. They were both in theoretical terms great things. Just implemented poorly, and with too little concern on the impact of inequality among the member states. Not to mention a common monetary policy in tandem with a common currency. What’s happenng is in my mind more of a breakdown in the idea of community, and since the outcome of the economic catastrophy has neatly divided everyone into the haves and have nots, nobody wants to be responsible for their neighbour. And it’s becoming more politically unfeasible to suggest to the richer countries that they should put the poor ones back on track. If the project fails it will be because private interests protifted too long at the expense of the common good, and those who survived the recession aren’t really interested in fixing it.
You cannot have a currency zone without transfers from the wealthy areas to the poorer ones.
The Euro fanatics keep saying look at America but they ignore the massive transfers that the Federal Govt. engages in. They ignore all the shared history, language and wider culture norms that America has.
The problems now in the Eurozone are down to flaws in the Eurozone and the vastly different needs of the individual economies.
Probably a stupid question ..but would we be better off or worse off if the euro devalued by 10% or so and used that 10% to help the smaller economies to escape the cycle of austerity? Anyone know?
The Euro is too strong overall so it would help, weakening the currency is the way to go.
It would however not cure the now locked in imbalances in the currency zone though, so the crisis would remain.
Internal demand is on the floor in the EU.
When you say ‘transfer’ I assume you mean taxation. That’s how it’s done in most places. What America did right on the back of the recession is to have provided a direct stimulus to the public, rather than puttig it into the hands of the supply side and expecting it to trickle down. The US government does send the states money in the form of subisidies and aid, but that money does very little to cover the expenses of the states, and most people don’t really see tangible benefits from it. Infrastructure is crumbling, a few states are bankrupt, 17 of them haven’t made the pension contributions they are obligated to make for their citizens, and a huge number are (were with ACA) without health insurance. That’s just the tip of the iceburg about the structural problems in the US. It’s also a vast domestic economy, which counts for a lot. No, the need for ‘transfer’ has been proportional both historically and practically, to the growth of capital in comarison to wage or labour.
Most of your assumptions about the US are wrong.
Devaluing currency would make exports cheaper, so countries like Germany and the UK who do a lot of it would benefit, but it would not be uniformly beneficial. The periphery would not see much out of it, and it would also exacerbate the debt situation, which would be a disaster.
With a stronger currency, you can harness inflation, and inflation can help to ease debt burdens. That’s why the ECB is awkwardly trying to create some and spur some growth.
No I mean the re-allocation of tax resources. Look at the amount of defense and wider state spending in the south.
Those two things you mention are related, allocation of tax sources via defense spending and agricultural subsidy and welfare payment to southern states. They are profoundly not good things, nor are they symptomatic of a reason for the US outperforming Europe.
So I’ll tackle them individually. Defense spending is an enormous pork project. It’s a broken window fallacy… Literally money being thrown away that could be spent on useful things. An enormous amount of equipment is continually being produced just to go straight to scrap. The Army is continuing to buy A-1 Abrams battle tanks which is has thousands of spare numbers of, and despite saying to Congress that it doesn’t need or want them. Billions spent on the F-35 fighter that doesn’t work, and even more on the F-22 which are continually breaking and are being investigated for causing failure due to pilots blacking out. Not only this, but the US spends more on defense than the rest of the world COMBINED. And yet they were beaten in Iraq and Afghanistan by guys with older soviet weapons. And the Pentagon just admitted to ‘misplacing’ over a trillion dollars.
A lot of money goes into defense spending. It’s a significant jobs project. But all of that money could be retasked, alongside defense contractor employees, to purposes that are useful to society. Compared to the optimal outcomes the money could create, it’s not worth holding on to them as is.
For wider state spending in the South, it’s because they need it. They’re desperate for it. It’s not coincidence that these are states with the worst labour laws (at will employment for example), the lowest wages, the worst working conditions, and the most agriculture. Huge amounts of money go into corn subsidies, to continue pumping out more high fructose corn syrup to fuel cheap consumer goods that are increasing obesity. They benefit as such relatively few people. Most farms in America are large corporate companies, so the people see almost none of it. Moreover, these states cut welfare payments every chance they get, and on average pay labour less than most other states. Social mobility is as such much more limited. If you are rich, it’s laregly because you are an owner of or employed by an energy (oil, gas) or financial company both of whom are having profoundly negative impacts. If you are poor, your likelihood is that you’ll stay poor because you have less discretionary income, almost no protection at work, and few opportunities. Education in the south is below average, so if you survive the above, student loans are your ticket out, unfortunately.
All the things you list as assets are the country’s largest liabilities. They are the things holding it back from performing as well as it is capable. These are the things Americans are fighting to change. You need to look into these things a lot more and a lot deeper.
What big pork projects in the Southern states mean is that they can have an economic existence and a chance for growth and diversification.
You aren’t seriously arguing that the only way the southern states can survive is by military spending? Man what do you actually know about the US? Ever heard of the CCC? Take those defense dollars and put them into a CCC type project to help rebuild the crumbling infrastructure and staff it with the unemployed and the excess military personnel and you have giant effective jobs program which also benefits the nation at large. Close corporate loop holes in tax laws, force states to fund all public schools equally, increase the minimum wage and you have lots more revenue to use for state programs to help people get out of poverty, via education, training, and material support. You get jobs because people have money, buy things, and businesses need added help.
Literally lots of ways to improve the Southern states without defense spending. The problems that are being faced in the South are laregely happening because they are being governed in the way they are. I said that those two parts of yours were related, and they are through the Republican Party in the House. Those red state idiots in the House who are voting for vast military spending, vast agricultural subsidies, and enabling corporate america to screw the people represent the red state governers and legislatures and red state voters who are voting against their own interests. They are creating the conditions that hurt them and then opposing things that could help them.
The South is not Roscommon or the midlands. Please don’t act like a few federal dollars thrown to the Southern states in the face of wildly disparate solvency and outcomes amongst the various states is what makes the US competitive. It’s an internal instability is what it really is.
1. Incompetent idiots have run the eu
2. The eu screwedup the euro
3. The eu added a great many new members even they couldnt manage exiting eu.
4. Kleptocracy, corruption is rife in brussells.
5. Brussels is opaque and unaccountable
6. Accountants refuse for 20 years to sign off eu commission accounts as money keeps going missing and no one can er… account for it.
7. The Irish are kept in the dark an get no news about what goes on there.
8. Eu is now reviewing/approving our budget and deciding most of our laws.
9. Polish are clever and staying out of euro despite pressure to join for years.
10. Danish are clever avoiding the euro.
12. Norwegians are more clever avoiding eu and euro but signing up to eu directives where it suits :) smart efta country.
13. Sweden is smart and avoids the euro.
I believe some non euro countries are doing better than those in the euro–except for Deutschland–they need the euro or theyll do back to the deutschmark and wont be able to sell anything as it will be too strong like before…
Could I play devils advocate and ask if it’s the case that it’s not the money, it’s how the markets play with it is the problem?
Joe blogs paid 350k for a modest home costing 680k w interest. Now worth 180k. He could spend 30 yrs throwing away all his money/hard work, emigrate, or declare bankruptcy. What he wont do is spend money as hes under pressure. Joe blogs is the backbone of irish society aged 33-55. Until joe spends again the jobs aint coming back. If the banks were forced to take a partial hit and joe was given a small bit of a break things would improve domestic demand and the banks would think twice before creating the next bubble. Tjey caused the bubble and it has cost those b***ards nothing. If ye want jobs/market confidence/more tax revenue/resumption of public service provision give joe a break. If ye want status quo/no spending then let him suffer/emigrate/go bankrupt. The write down on joes mortgage should equal the negative equity amount multiplied by a weighting factor of 0.2-0.5 where higher incomes get less and lower incomes get more. The owner and bank both take a partial hit and joe starts spending again. God knows weve given enough to private foreign banks from our tax money with no benefit to us at all, at least this proposed weighted write down would stabilize propery prices and sow the seeds of recovery. And forgood measure bring in a capital gains tax on property and claw back some of the cost and help prevent future bubbles/lives being destroyed. WAKE UP FG!
The euro and policy underpinning it by ecb has been set to benefit Deutschland. The Euro saved their plummetting exports from a Deutsch Mark that was too strong and exports suffered badly. Have a look at germany’s econ pferformance since start of euro. Also mein herrn es ist einmal zo (its simply so).
Oh, now – wouldn’t it be mighty if Interest Rates went below minus 1.1 percent? – then the banks would have to pay interest to tracker mortgage holders! Not so good for savers of course – there’d be mass withdrawals and hardly an untouched floorboard or mattress in the land!
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