And the Weak Suffer What They Must? by Yanis Varoufakis. Economic history about how the Eurozone came to exist in its devastating form. Has a few anecdotes from his brief time as the Greek finance minister, but doesn't tell that story in detail.
It talks a lot about the "Nixon Shock" of 1971 when the US came off the gold standard, ending the Bretton Woods system of the end of WW2. That system regulated exchange rates, though they would sometimes be shifted in value after negotiations between states and central banks. However it relied on the US having a manufacturing surplus, and goodwill by the US and the smaller states. (Varoufakis perhaps underplays the genuine fear of inflation, especially regarding Paul Volcker's motivations.)
Missing the predictable world of stable exchange rates, European figures tried to recreate it with moves towards the single currency with the Exchange Rate Mechanism. However there was a fundamental floor in the inability of the nations to "recycle surpluses". If a nation like German has a trade surplus, goods and services go out while money comes in. Under floating exchange rates, its currency goes up, which means its consumers can buy more stuff, but the goods and services it produces become more expensive, and so the trade surplus shrinks back.
With fixed exchange rates though, the money goes in and has to come out somewhere. In a single state, the government will tax it and spend it in places without a trade surplus. In the Eurozone, it created a financial bubble where money was lent out to deficit nations at unsustainable levels of risk and interest. When the 2008 banking crisis hit, the European Union and the central bank forced the deficit nations to use tax money to bail out the banks that had made dodgy loans. With no Keynesian spending, this caused a doom loop between bank and government debt.
The basic story should be familiar, but Varoufakis goes deep into the details, showing how Greece was used as an example to threaten punishment to Italy and Spain. It's pretty grim reading as you see the cynicism and incompetence at work.
Despite everything, Varoufakis still sees a more democratic Europe as the solution. However he points out that the "more Europe" solutions being touted are not in fact more democratic, and generally involve the smallest figleaf of democracy being used to cover up more power for bureaucrats and institutions.
Overall, a very useful book. However I'm not totally convinced by his analysis of the motivations of all the people involved. I suspect blind panic and a genuine fear of inflation might have had a greater role than he gives them.
What I'm Watching
Saw "Star Wars: Rogue One" at the cinema. Liked it: good science fiction action movie. Managed to see it in Imax close to the front (after finishing Xmas shopping) so had a great immersive experience in the battle scenes. Not as good as The Force Awakens but far better than the prequels.
Had an OK Christmas on the whole. Took the toddler up to visit the parents for a couple of days beforehand, and went for a day to visit my sister afterwards, so got to see the family a bit. Toddler liked his presents, main ones were a remote control Thomas the Tank Engine and a magnetic drawing set. The latter really warmed my heart when after having fun with it, he wandered over to try to draw on the furniture with a magnetic "pen" to no effect whatsoever. Xmas dinner was cooked OK, though I should have kept the Yorkshires in a bit longer to get them crispy. Just did a poussin since the toddler and me are the only meat-eaters here.
Socioeconomics: ‘Negligible’ link found between executive pay and performance. Home ownership 'overestimated by official data'. Brexit will let us end free movement of capital. The churches have been empty for 100 years.
Video. Mr Night.
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