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View Diary: Krugman suggests Cyprus could be the start of something positive (74 comments)

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  •  Then what is the purpose (6+ / 0-)

    of the EU?  Easy flow of labor, capital and buiness between countries in the EU is one of the main reasons it was created.


    "Justice is a commodity"

    by joanneleon on Mon Mar 25, 2013 at 05:28:31 AM PDT

    [ Parent ]

    •  The purpose of the EU, (12+ / 0-)

      not fully realized, is to avoid another European war like the last two. Unifying institutions and weakened nationalism were supposed to make war less likely by developing more easily recognized shared interests among Europeans, regardless of where they were from. Unfortunately, the EU institutions are weak. The European Parliament, especially, which has (had?) the potential to be the most politically unifying body, is nothing but a feckless joke. So all that's left is weakened economic nationalism with no countervailing common capacity to constrain the accumulation and exercise of power by private transnational entities.

      The GOP can't win on ideas. They can only win by lying, cheating, and stealing. So they do.

      by psnyder on Mon Mar 25, 2013 at 05:58:42 AM PDT

      [ Parent ]

    •  I should clarify (6+ / 0-)

      that the point I'm making is -- one of the main purposes of the EU is to make capital flow easier, not more restrictive, which makes Krugman's article all the more odd.  I'm not disagreeing that unfettered capital flow (without unfettered labor flow) creates an imbalance destructive to workers, and countries on the losing end of it.  


      "Justice is a commodity"

      by joanneleon on Mon Mar 25, 2013 at 06:01:00 AM PDT

      [ Parent ]

      •  My thought is this has more to do with Russian (3+ / 0-)

        oligarchs and monied players elsewhere than intra-EU politics. The EU is considered one economy.

        Even if I knew that tomorrow the world would go to pieces, I would still plant my apple tree. -Martin Luther

        by the fan man on Mon Mar 25, 2013 at 06:37:21 AM PDT

        [ Parent ]

      •  EU vs US (2+ / 0-)
        Recommended by:
        the fan man, elginblt

        What he's talking about is the danger of bubbles when it's super easy to move capital in and out of a country at a whim.

        Any such activities intra-EU can still happen -- i.e. German investors could smell an opportunity in Spain, for example, and get their economy booming again. And then if they see the winds changing and decide to pull out, it could crash their economy in short order.

        Companies do this inside the US from time to time for different reasons. Another state offers up great tax incentives that another state can't and they relocate. This can devestate local economies.

        When it happens inside the US borders, we have safety nets managed by the federal government to handle shifting sands within our own borders. As we know, this severely strains our government when those jobs move overseas.

        Within the EU, they have a bit of a worse problem -- all the benefits of intra-state movement similar to the US and yet there isn't one government helping out citizens in one area when jobs move to another. Instead, you get Germany trying to put other countries in servitude. Something I haven't seen discussed is the poetic justice of it given how Europe screwed Germany over after the first world war, but that's a different topic altogether.

        The larger point of course is that the more free people are to move capital at a whim, the more vulnerable any one individual and especially small country is to the whims of extremely big money investors.

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