Nice write-up in The Economist:

http://www.economist.com/node/21556580?frsc=dg|a

As it says - the difficulties continue - no one thinks that all is good, but Latvia has made it throughout the worst.

In considering this article, it is important to realize that while Latvia continues to suffer great hardships, the global economic meltdown continues to effect every family in the U.S., etc. F. ex. the net worth of the middle 60% of American families has slipped more that 20% - down to levels of 1990. These are new Fed Reserve statistics. U.S unemployment, although nothing like Latvia’s, continues to be high and unacceptable for the U.S.

So, no rosy picture anywhere and who knows what is on the horizon.

Visu labu

money. We even have a joke - a rich guy in a BMW X5 stops by a roadside prostitute, and asks her “what will you do for a hundred bucks?” The prostitute replies “Everything you want!”, the guy says “Get in, you’re tiling my bathroom floor!” Apartments in the old town of Riga carried price tags of 4000 euros per square meter! This was madness and it was going to end badly even if the rest of the planet was booming.

Things are looking up…..................

Counterpoint.

http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2012/06/13/fiorelatvia1.DTL

Andrejs

I saw the counterpoint and thought that it was offensive and incorrect.

The point regarding how the press and politicians are treating Latvia and its economic crisis could have been made without mocking Latvia.

Just one ex. of the cartoon being incorrect and misleading - Latvians did not start to work abroad because of the economic crisis. They were in fact doing this well before the crisis because of wages. Yet, this idiotic cartoon tries to tie the decrease in Latvia’s unemployment from 20 - 15% to the flow of workers to other EU countries. I checked on statistics that showed that the number of Latvian’s that left Latvia to work abroad actually decreased in 2011. (Of course, this is in part b/c of the economic crises experienced in other EU countries.)

But this is a simple example of a “political ad”. You can just say it or say it totally out of context - who cares whether it is true.

So what is the agenda of the cartoon? Does it propose any other potential solutions? No. This is sort of like Obama and TARP - Would Latvia had been better or worse without the austerity measure? Who can really answer that.

I would rather see 5.5% improvement from a crater than a deeper crater.

Tas ir vis! Vilis

No people—no problem.

/P

Euro zone won’t survive in current form: Greenspan
BNN.ca staff
12:44 PM, E.T. | June 14, 2012
Best of BNN, International
Tags: Federal Reserve
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Alan Greenspan, the former chairman of the U.S. Federal Reserve, tells BNN that the euro zone will not survive in “its current form” and politicians have failed to tackle the structural issues plaguing euro zone economies.

“What has been happening is not sustainable,” he says. “We have to focus far more quickly on how to get the deficits down, because unless we do that, we cannot continually fund these things because it’s all being funded by printing money.”

Greenspan says that many of solutions have failed to structural issues such as uncompetitive labour markets and high deficits.

“Most of the ‘successes’ in this problem have been finding ways of funding the deficits, not reducing them. As long as there are deficits…you are creating ever more debt and that is not projectable indefinitely in the future,” he says.

Greenspan’s remarks come as the euro zone’s sovereign debt crisis continues to worsen. Less than a week after the European officials tabled a 100 billion euro bailout for the country’s suffering banks, yields on its ten-year bonds topped seven percent—the same level that forced Greece, Portugal and Ireland to request international rescues.

On Wednesday Moody’s Investor Service slashed Spain’s sovereign credit rating by three notches to Baa3—putting it one level above junk.

And there are growing signs that Italy, the euro zone’s third largest economy, is the next focus for bond markets that have grown increasingly wary of solutions to the crisis. The yield on three-year bonds the country auctioned on Thursday shot up to 5.3 percent, the highest level since January.

Keep your Lats in the freezer…............

i have a few old fivers and a bag of various pre Euro coins too.
maybe i’ll get to spend them after all…........................

Take a look at the gap between the rich and the poor in Latvia. It’s one of the widest in the European Union. Although the government has increased social spending during the crisis, it still ranks at the very bottom of the EU-27. Yes, even below Romania.

Also, take a look at the structural unemployment. The unskilled workers cannot find work while there’s a shortage of skilled labor.

And while Latvia posted an impressive economic growth this year, it is still at the 2006 level. So essentially we have lost six years thanks to the grand policies of the Latvian government before the crisis.

PS To PB, the Latvian lats is tied to the euro. What is the point of keeping the lat if it’s tied to the euro?

http://www.ebay.com/itm/Large-Beautiful-Silver-Latvian-coin-5-Lat-lati-1929-excellent-latvia-russia-/261034039086?pt=US_World_Coins&hash=item3cc6d7572e

them Lats….....................
i don’t own any new ones.

Them lats were also devalued in 1936 amidst a tight state control over the economy.

“The Latvian Cabinet of Ministers decided on September 28, 1936, to devalue the lat by about 40 percent and to tie the lat to the British pound sterling.”

Aleksejs,
“Take a look at the gap between the rich and the poor in Latvia”

How is, whether euros or Lats, going to make any difference?

“the Latvian lats is tied to the euro. What is the point of keeping the lat if it’s tied to the euro? “

If I read / heard Prof Michael Hudson correctly, he advocates going the other way - retain the state’s currency and dispense with the euro. The euro is not a bank fund, but a bunch of politicians, eroding soveregnity wherever it can & countries lose control over their own financial planning.

Eurozone is one thing, the euro is something else again.

The fallout from the Greek elections will be very interesting to the whole ‘Euro’ idealogy.

How is, whether euros or Lats, going to make any difference?

See the larger context of this thread. “Latvia’s economic crisis.”

If I read / heard Prof Michael Hudson correctly, he advocates going the other way - retain the state’s currency and dispense with the euro. The euro is not a bank fund, but a bunch of politicians, eroding soveregnity wherever it can & countries lose control over their own financial planning.

The reality is that Latvia has never had a floating currency. Not before the Soviets, not after the Soviets.

Eurozone is one thing, the euro is something else again.

How do you figure?

ps
“Also, take a look at the structural unemployment. The unskilled workers cannot find work while there’s a shortage of skilled labor.”

That is also what is happening in Oz.
The Lib party spent many a year destroying the apprentice scheme ie subsidising employers to train the new workforce ... and the Labor have not reversed the situation.
How stupid is that?
And now Oz is calling out for o/seas immigrants to fill the gap.
Madness.

““Take a look at the gap between the rich and the poor in Latvia”

You’re not addressing the question.
Isn’t the differential going to exist whether euros or Lats?
The ‘rich’ know how to avoid / minimise taxes etc.
Warren Buffet in USA openly admits it.

Just a peripheral comment.

Latvians have not recovered to 2006 stnds.

The Fed Res. of the US released a study this week that shown that the net worth of Americans has dropped to 1990 levels, i.e., the gains of 20 years have been wiped out in the this recent economic downturn. The greatest loss has been suffered by the middle 60%.

The biggest parts of this are the housing market and retirement savings (that were hit tremendously with the decline in the stock market.)

How does this play out in the cartoons. Obama - great American success story!?!?

I guess that the simplification of the cartoon is offensive - it does not really provide any helpful information whatsoever.

Vilis

Vili,

Expecting an editorial cartoon to be nonoffensive and “correct” is more than a bit unrealistic. The purpose of editorial cartoons is to raise questions and question assumptions and stimulate debate. Looks like it did the job. In economics as in politics everyone has a slant and everyone has “facts” to back them up.

You find issue with the cartoon’s inaccuracies? I find issue with the Economist’s article’s lead.

“IT IS hard to believe, walking past gleaming mansions along the sand dunes of Jurmala, that Latvia has endured a crisis as deep as Greece’s.”

That’s like looking at gleaming mansions of the South Hamptons and finding it hard to believe that the US is in crisis.

You find flaws with the cartoon’s logic? I find flaws with the Economist’s article’s logic.

“Still, the Baltic states are growing faster than any other part of the EU, more than can be said for the recession-hit Mediterranean.”

Since Latvia was one of the hardest hit regions in the EU its not unreasonable to expect that it would grow faster in comparison to the rest of the EU since it has a further distance to go. Its basic math.

You think the cartoon is biased? I think the Economist’s article is biased.

“Moreover Baltic states benefited by having friendly foreign-owned banks that did not pull out of the region;”

Seriously? There is no such thing as a friendly bank. Not a criticism of banks. Its just that the image of Swedish Jimmy Stewarts running around was too much to bear.

For the record I happen to be a fiscal conservative. I don’t think governments should spend money they do not have nor do I have a real objection to austerity. I just think that governments and the citizens of a nation shouldn’t be the sole bearers of the austerity burden. Those swedish banks should do their part as well by restructuring the debt and devaluing their expectations. Not pulling out of the region to me isn’t an indication of friendliness. Its an indication of their disproportionate bargaining power.

If you want noncartoonish counterpoints. There’s no shortage of them. Just a sampling.

http://www.forbes.com/sites/markadomanis/2012/06/13/latvias-imaginary-manufacturing-growth-or-why-paul-krugman-is-right-and-anders-aslund-is-wrong/

http://www.aljazeera.com/indepth/opinion/2012/06/201261491252698335.html

http://krugman.blogs.nytimes.com/2012/06/10/latvian-competitiveness/

Andrejs

I agree with you.

This probably irks me more than it should b/c Latvia generally gets bad press - as has been discussed. So, you get a few articles that say - maybe Latvia did something right or had some success and it gets shot down.

At least the cartoon didn’t show Latvians as a bunch of Neo-Nazis. How’s that for a positive spin?