«The Baltic Tigers’ False Prophets of Austerity»—a fresh article on the effects of neoliberal policies in Lithuania and Latvia.

Visu gaišu,
/P

Hi Peter C:

That was a most sobering link.

I’m sure it’ll be interpreted by the readers here on LOL in a multitude of incongruous ways.

For me personally, it represents the same pain that I see in LOL being a failed forum….an absence of honest, fair, and open discussion that somehow doesn’t cave-in to strong-personality agendas.

I haven’t given up hope and don’t intend to. A solution will emerge, but does it indeed need to be this painful that we have to have yet another book of folk songs that we will eventually need to craft to describe our latest unnecessary collective pain?

I just read earlier today an article about the tenuous status of the EU and how 15 out of 17 EU nations were in purported jeopardy of being downgraded on the “credit worthiness” list, with Latvia and Lithuania being the only two unblemished exceptions. But even for those two lucky countries, the blemishes are indeed there (do we really benefit from having a mass exodus of workers from our native soil?) and we ignore those warning bells at our own peril…..creative accounting only goes so far in deceiving the true health of the bottom line.

Alberts

Unfortunately , an” honest,fair and open discussions ” can only exist among the “echo chambers” of the extreme left . Others are vilified ,ridiculed, and summarily dismissed . The “hope and change” approach necessarily results in doing nothing and waiting for unnamed “others” to save the present and the future. The common promotion of Latvia as the cosmopolitan EU without any nationalistic tendencies encourages emigration to financially greener pastures instead of encouraging fighting for the homeland’s survival.

Commonly the “new state” has only a limited time to recognize and embrace its self awareness and “brand” its unique identity . Failure to accomplish such change to national interests will often result in a dysfunctional and failed government. The economic factors merely delay or accelerate such failure.

Grim numbers and I am no fan of neoliberalism, but I am not sure how they got from point a to point b. The emigration was trending that way long before any harsh austerity measures were taken. I personally don’t see the cause and effect. It probably doesn’t help, but it isn’t the reason. Its a bit more complicated than that. As to the austerity measures themselves, again neither pro nor con, but I don’t see anyone offering any real alternatives. Public sector hiring requires public sector funding and I don’t see that kind of funding in the state coffers unless someone missed a decimal point somewhere.

Andrejs

Articles such as this one can put quite another spin on the ‘for’’ or ‘against’ Russian language referendum. The Russian language issue ought to awaken a great number of issues, which have heretofore been ignored. As Urbanovičš of SC has stated, he will delay an answer on the way he votes until the last moment. Many Latvian speaking Latvians may, too. If it takes a Latvian Russian to break the Latvian Saeima boycot of the economic issues (closely tied to the whyfore no Vision of the future), then it is surely preferable to seeing the Saeima occupied by clones of Polish Pans (oligarchs of their day) speaking Latvian only.

Hi:

I’ve been pleasantly surpised by the dialogue that this posting by Peter C. has so far engendered.

Yes, the trends may have been there beforehand, but the resulting exodus numbers are huge. Can they truly be dismissed? Should they be?

It boils down to focus and the payback for the choices exercised by the stewards of the local economy.

Happy holidays,

Alberts

The oversized role of speculative finance in deciding public policy isn’t limited to Latvia, though its effects are more drastic for such a small country with so many other problems.  This article popped up today on the subject as it applies to the Eurozone:

http://www.washingtonpost.com/opinions/democracy-is-on-the-retreat-in-europe/2011/12/06/gIQA2CvpaO_story.html?hpid=z3

And the problem is, how do you get out of the grip of government by financial markets without being Belarus?  Could Latvia really pull an Iceland?

As I wrote in my previous post, a number of Latvian political parties (Vienotiba, ZRP, United Natrionalists (VL& LNNK), have already called for Latvians to vote NO or AGAINST Russian becoming the official 2nd language in Latvia. By so doing, the liberal neo-capitalist elite are attempting to claim the high ground of patriotism. By so doing, they are saetting themselves up for a rebuff from populist nationalists, who are most Latvians, myself including.
However, populist Latvians need not rush to the side of V, ZRP, or VL&LNNK;, but can play their trump card, by waiting until the last moment and hearing out the issues involved (as Urbanovič of SC has stated he will do) before declaring that their vote will go to comfort the bookkeepers of the Latvian Pans (oligarhs) in the Saeima. The forced out-migration of possibly up to a half a million Latvians is not the Latvian populists fault, but is due the negligence of the numlerous Saeimas since 1991. As a neighbor of mine insists, ““it feels as if a million people are gone!” The Latvian government has taken no greater interest in these out-migrants than it has concerned itself how it feels to be a Latvian of Russian descent. Recently the evening news carried an item, where a professor of the Latvian University in Riga, has done an informal count, which he claims is 200,000, even as the government insists it goes no higher than 33,000. Many Latvian Latvians are incensed with givernmemt officials, who claim themselves to be more patriotic than the Latvian people. The super-patriots, include such names as Aboltna (V), chairwoman of the Saeima, Kalniete (V) deputy to EU, who is in the habit of using arguments by authority (argumentum ad autoritātem), saying that she spoke to such and such high EU official, who immediately understood and sided with her views; the President of Latvia, Andris Berzins, as well, who is quoted to have said that he will resign if the Referendum receives a ‘For Russian language’ vote. Not a few Latvians will be happy to see Berzins go, as his appearance as a Presidential candidate remains a mystery to this day. His connection with Swedish banks should have caused him to recuse himself, as he cannot escape the suspicion of being a lobyist for the banking industry, the same clique that Michael Hudson in his article in the German newspaper Algemeine Zeitung (yesterday) is forcing not only Estonia and Latvia, but most of the countries of the world into Debt Slavery. Many Latvians are rather aware of having lost their sovereignty to the banks, and are not in the least happy to discover themselves a short twenty-one years after regaining independence with little or no say about their future—thanks to the leaders of their state (valsts).
SC or Harmony Party is the natural leader in the Referendum campaign, regardless of what the above mentioned Latvian parties have to say. Let us see, if SC is smart enough to take the economic issue to the forefront of the language Referendum campaign and make it prevail as Michael Hudson’s (Jeff Sommers, et al) article suggests should happen.
This is a GREAT OPPORTUNITY for all the Latvians unhappy with the rampant corruption and lack of concern for the Latvian people by their government to take a leadership position for all the world to see and take note of.

I don’t think the numbers can be dismissed. I just don’t think the numbers can be explained by blaming them on latest austerity cuts. The numbers were there during the period when some were warning that the Latvian economy was superheating before the collapse. Before the nasing special era. I remember walking through Riga and seeing garbage strewn abandoned lots for which the owners were asking LS100 for a square meter. And people still were leaving in droves.
Its hard to say how to fix this mess and I am far from an expert, but like here in the States it looks like neither side of the political spectrum has much to offer other than the usual talking points. On the left its ignoring the fact that business is in it for the money. I don’t know about anyone else but despite being just a working stiff I don’t come to work looking to make less than I did the day before. If I need to hire someone to do something that I can’t do I usually look for the best deal. On the right its ignoring the fact that the old capitalism is dead. It simply doesn’t work any more. A rising tide doesn’t lift all boats. It simply sinks the little ones and encourages and enables those who are left afloat to make their boats bigger. The familiar tropes of little government, deregulation and lowering taxes benefits only a few and when all is said and done will not create any real jobs.
Today’s capitalism is built mainly on speculation. Creating something tangible costs money. Its far easier to create “stock holder value” by cutting labor costs or repackaging value into ever more complicated financial instruments which in turn takes money out of the economy and since those laboring are fewer and fewer and therefore can’t really afford to purchase whatever it is the “stock holders” invested in producing. As their “value” plumets more cuts and packaging are initiatted and… well, its a cycle that just keeps feeding on itself.

Andrejs

You are probably right, Andrejs, that today’s capitalism is “built mainly on speculation”. But juridicial entities like nations and cities have always had a few experts around who had a reasonably good idea of how to fix the economy.

In the following link http://www.guardian.co.uk/world/2011/dec/07/cameron-threatens-veto-eu-treaty as Britain, and specifically the City of London, prepares to “safeguard” its interests vis a vis Brussels presumptions, by threatening to veto decisions of unelected (and undemocratic) EU officials…

This may be the right time to suggest to Londoners that Riga could use their expertise and muscle in trade by not isolating London into a cocoon, but extending London to Riga by leasing it from the Latvians to further the interests of Londoners and Latvians (Ridzinieki) by expanding trade with Russia which the EU nor the Saeima appears to be interested in doing at this time. England has same very old links through Latvia with Russia going back to the days of Ivan Grozny, who had to fight the German knights/oligarchs to open up the West-East trade route.

In short, Latvia has many unexplored possibilities to pull itself out of the hole that its leaders have put it in. Any “good deal” has an element of speculation about it, as investors try to anticipate the future.

An additional issue that the upcoming Referendum on language opens up is to force the issue of the long delayed revision of the Latvian Constitution, especially the reduction of the number of members in the Saeima from 100 to, say, 50, half that number.

I personally have few doubts, that London would succeed in raising Riga from the bottom of the sea, as successfully as it raised Hongkong from nowhere to one of China’s great successess today by leasing it from the Chinese for a hundred years and thereby building up local expertise.

Over a period of time, I have noticed that LOL is visited by many readers who appear to have the necessary “brains” to contribute with creative thinking and problem solving on behalf of Latvia and its people. This may be a tall order. However, it has always seemed to me that what is necessary is to stick to the subject (the topic, the beachhead) and keep up the attack on entrenched reactionary powers.

The debate at the English Parliament in London is worth watching and listening to , to see if Ol’ London today is not by far more energetic than what we see and hear at the chambers of the Latvian Saeima and Riga Council. Incidentally, this is what the language debate in Latvia should look like (Yea, yea! Nay, nay! Hear, hear!), and the issue not be shoved under the behinds of a repressive legislative body as the Saeima presents itself to be.

Andrejs, latviešu kosmopolits, et al.,
“Today’s capitalism is built mainly on speculation”

The topic here too is built mainly on speculation.

Visu labu,

Speculation = a forward looking statement, any Prospectus.
http://www.zerohedge.com/news/guest-post-eu-fiscal-union-eu-debt-serfdom
The history of serfdom is fact, not speculation.
The more ‘power’ one presumes he-she has, the less speculation he-she does.
Thus, major battles sometimes have surprising outcomes and are sealed with blood clots.
Before they met at Waterloo, Napoleon and Wellington were BIG SPECULATORS.
The Latvian political establishment is SPECULATING BIG, that the language issue is an untouchable, and that it is the WINNER come what may. Historically, Latvians have earned their living by brawn,
which maybe why they are unable to think and speculate or have visions of the future today,
because too much unfamiliar intellectual energy is involved.

People probably already know this, but just to be sure, the sense of the word we’re talking about is defined as,

‘to assume a business risk in hope of gain;  esp: to buy or sell in expectation of profiting from market fluctuations.’

Another good article on the subject by my personal favorite commentator:

http://www.williampfaff.com/modules/news/article.php?storyid=550

Peteris Kalniņs et al.,
“People probably already know this, but just to be sure, the sense of the word we’re talking about is defined as,

‘to assume a business risk in hope of gain;  esp: to buy or sell in expectation of profiting from market fluctuations.’”

To speculate is also defined as ” to theorize from conjectures without sufficient evidence”.

Visu labu,

Hi P.K.

Thanks for the link. William Pfaff’s analysis puts the role of speculation as an economic driver into a succinct and clear perspective. In sports you hope that level-playing-field rules of the game and the supposedly fair application of those standards by the referees will ensure an honest outcome that will not unfairly profit behind the scenes gamblers who have their own preferred speculations on the outcomes riding on the line. Perhaps, it is unsettling to admit the pervasive role of speculation in free market economies as well as in “fair play” sports, but pretending it’s not there doesn’t weaken or alter the influence of the speculation or speculators.

BTW, I thought that Pfaff’s observation about the possible pickle the U.S. could have found itself in with China if RMN hadn’t presciently lifted the gold standard was a chilling thought to ponder.

Regards,

Alberts

Bruno the Lett - 07 December 2011 02:19 PM

To speculate is also defined as ” to theorize from conjectures without sufficient evidence”.

Absolutely, that’s the primary definition. But if the thread goes into ‘financial speculation’ and ‘speculative capitalism’, then it’s important not to confuse it with the other kind. Otherwise you end up with a discussion that sounds like Gilda Radner’s “Emily Litella” character on SNL.