Literary Insights

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Here is a summary of the contents section:

The contents page lists the following chapters/essays included in the book:

Why Save the Bankers? 2008-2010
No, the Greeks Aren’t Lazy 2010-2012
Action, Fast! 2012-2015

It also includes standard sections like the title page, copyright, translator’s note, preface, and index.

The book brings together the author’s monthly newspaper columns from 2008-2015. The columns focus on analyzing the global financial crisis and Eurozone debt crisis, including topics like government bailouts of banks, austerity policies in Greece and Ireland, the role of central banks, wealth inequality, and proposals for reforms like a European banking tax or federalism within the EU.

The contents section provides an overview of the key themes and time periods covered in each chapter to help readers understand the scope and progression of issues discussed in the selected essays.

The financial system in Europe and globally has become highly fragile and unpredictable due to a lack of oversight and regulation since the 1980s. Tax havens allow wealthy individuals to hide assets, distorting financial statistics.
Europe’s fragmented political system makes it difficult to impose unified financial and tax rules needed to regulate global markets. Individual nation-states are too small on their own.
The euro currency and ECB were designed without a common fiscal policy, based on the outdated view that central banks should only focus on inflation. This proved problematic during the financial crisis.
While the ECB and Fed prevented depression through money creation, they did not address underlying inequality issues that contributed to the crisis.
Unlike the US, UK and Japan, the Eurozone experienced a sovereign debt crisis because the ECB lent little to governments, unlike other central banks. This was due to misguided fears of hyperinflation and a bias against aiding governments.
The real problem is the euro lacks a common debt or fiscal policy backing it. This allows speculation on different countries’ interest rates, preventing orderly fiscal reforms, and limiting the ECB’s role as lender of last resort.
Creating “eurobonds” or common eurozone debt is the only lasting solution, but requires a strong federal political authority, which is currently lacking.
The author argues that while government interventions to stabilize the financial system in the 2008 crisis were unprecedented in scale, they do not necessarily mark a historic shift towards a more interventionist economic policy overall. Intervening to support banks has long been part of US policy dating back to the 1930s.
Whether the crisis leads to more state intervention in other areas like healthcare depends on who wins the upcoming US presidential election. Obama may pursue this, but budget constraints and public views on taxes limit how far policies can go.
The current debates around capping bankers’ salaries represents a partial response that does not fundamentally alter incentives for risk-taking. In contrast, FDR imposed much higher marginal tax rates of 70-90% on the wealthy after 1929, reducing incentives for executive excess.
Governments are hastily announcing very large sums for bank bailouts without clarity on usage conditions, risking confusion. Relying only on this strategy does not guarantee crisis resolution or preventing recession. More focus is needed on regulatory reforms to reshape banks’ behaviors.
The inflated bailout numbers being projected conflate annual economic flows with larger stocks of total wealth, risking long-term public disorientation about government debts and budgets.
The debate in France around the social summit focused on how national income is divided between wages and profits.
Some pointed out that the share of national income going to wages vs profits has remained stable. However, this does not mean inequality has not grown in France.
Studies show purchasing power for the richest 1% rose 20% from 1998-2005, and over 40% for the richest 0.01%, while the bottom 90% saw only 4% growth. This indicates inequality has exploded.
Data from INSEE shows the shares of national income going to wages vs profits has been stable around 67-68% for wages and 32-33% for profits since the late 1980s.
So the rise in inequality cannot be explained by shifts in the wage-profit share, but is likely due to other factors like rising incomes and wealth at the very top while most saw little growth.
While the wage share declined in the 1980s, that does not explain the inequality explosion starting in the 1990s, so it is not helpful for understanding or addressing current problems.
Central banks have taken unprecedented steps during the financial crisis to provide liquidity and support financial markets beyond their traditional roles.
Normally central banks focus on influencing money supply and short-term lending to banks. But during the crisis they have dramatically expanded their balance sheets, in some cases doubling the size.
The Fed’s balance sheet increased from around $900 billion pre-crisis to nearly $2.3 trillion by late 2008. The ECB’s balance sheet grew from €1.4 trillion to €2.1 trillion between September and December 2008.
This represents an injection of nearly 10% of GDP in new liquidity by central banks on both sides of the Atlantic in just a few months.
Central banks have provided this liquidity by purchasing private assets like mortgage-backed securities, extending credit lines to other central banks, and engaging in other unconventional policy interventions beyond their traditional focus on short-term lending to banks.
There are concerns about whether central banks can effectively stem the crisis and stabilize financial markets through these extraordinary measures extending beyond their normal operations and responsibilities.
The debate over introducing a carbon tax in France has raised many unanswered questions and mysteries for ordinary citizens. While the basic principles seem clear in theory, the specific plans under discussion are hard to understand.
The proposed new carbon tax revenues for 2010 amount to about €9 billion, but €5 billion of that would come from higher auto fuel taxes, merely making up for lost gas tax revenues in recent years as prices rose and consumption fell. So this does not seem very revolutionary.
France already has significant “green taxes,” and the carbon tax plans are not very distinguishable from a simple hike in the existing gas tax, which has been done before.
More clarity is needed in the public debate to explain how the proposed carbon tax differs from previous tax measures and whether it will truly revolutionize France’s tax system as promised, by taxing pollution more and labor less.
For ordinary citizens, many uncertainties remain around the specifics of the carbon tax plans currently under discussion by the expert commission.

So in summary, the article questions how transformative the proposed carbon tax really is given it appears similar to past gas tax increases, and argues more transparency is needed about the details of the plans.

The Stiglitz Commission, led by Nobel laureate Joseph Stiglitz, was tasked by French President Sarkozy to investigate new economic indicators beyond GDP.
One key recommendation from the commission’s final report was to stop using GDP and emphasize net national product (NNP) or “national income” instead.
NNP seeks to measure the actual incomes available to residents of a country, putting people at the center. GDP more narrowly reflects a productivist/accounting perspective.
NNP was widely used in France before 1950 and is still used today in Anglo-Saxon countries. It can be calculated from existing French statistical data but is not highlighted in official reports or public debate.
Emphasizing NNP over GDP would refocus economic measurement on human well-being rather than just quantitative outputs, in line with the commission’s goal of moving beyond a narrow GDP perspective.

Here are the key differences between GDP and national income:

GDP is gross, meaning it includes total value of all goods and services produced without subtracting depreciation. National income accounts for depreciation of capital assets like buildings, equipment, etc.
GDP measures only domestic production within a country’s borders, regardless of who owns the wealth. National income considers cross-border flows like repatriated profits, showing the actual income belonging to a country’s residents.
For some countries like Ireland, GDP per capita is much higher than national income per capita because foreign multinationals artificially inflate GDP while repatriating most profits abroad.
National income provides a better measure of the actual wealth generated for a country’s citizens after accounting for things GDP does not, like depreciation and foreign capital ownership. It can help address discrepancies between statistics and citizens’ real standard of living.
National income data facilitates more meaningful analysis of economic and social factors like inequality, by showing the distribution of wealth among a country’s population rather than just averages.

So in summary, national income captures a more accurate picture of a country’s true wealth by accounting for depreciation and international capital flows that GDP overlooks. It provides useful context for assessing economic and social conditions.

During financial crises, the wealthiest are able to take advantage by buying up good assets at low prices when others are distressed. Their large fortunes, invested in riskier assets, do better in booms and fall less in downturns due to resources to pay financial advisers.
Government support for large banks and firms has prevented a depression after 2008, but without accountability, it redistributes wealth upwards. After 1929, higher taxes and financial regulations redistributed wealth downwards.
Left to itself, capitalism naturally leads to instability and inequality, resulting in crises. Only after crises do governments fully regulate it to reduce inequality. Current issues around financialization are similar, but political responses differ.
Statistical data is inadequate to understand complex financial redistributions in real time, but they play a central role in politics today given government responses to the crisis. History shows responses like taxation are needed to acceptable outcomes.
The Greek debt crisis deepened and an international bailout was nearing. Some European media spread stereotypes blaming lazy, corrupt Greeks for the crisis.
However, such moralizing metaphors about household finances do not apply to analyzing economies and capitalism. Issues like arbitrary initial inheritance and returns on capital are important factors.
A €750 billion bailout was approved but may not be enough, as market fears were becoming self-fulfilling due to selloffs raising interest rates on indebted countries’ bonds.
Europe needs to take control of finance rather than letting volatile markets dictate terms. It should issue genuine European public debt to mutualize excess debt from the crisis across members.
National austerity plans will likely make recessions worse. Europe needs a stronger authority to counter markets and prevent speculative attacks on member states’ bonds. It also needs clearer financing plans like a European tax to support repayment of assumed national debts.
The article argues that central banks played an essential role in stabilizing financial markets and averting economic disaster during the 2008 crisis by expanding their balance sheets and lending to banks. This “money printing” did not lead to higher inflation as some feared.
It says central banks should now help ease the burden on governments by directly purchasing public bonds, similar to what the Fed has done. This would lighten the debt burden and help avoid austerity measures that could worsen recessions.
The monetary financing of deficits is controversial but the inflation risk is low given current economic conditions near depression. Central banks have tools to manage inflation if it rises unexpectedly.
The article uses the example of Liliane Bettencourt, a billionaire heiress in France, to illustrate issues with aging wealth, inheritance concentrating wealth, and unfair tax codes that allow the very wealthy to pay very low effective tax rates on their true economic incomes. It argues tax systems should be reformed to be more equitable and benefit society.
In 2010, the French president Sarkozy faced low approval ratings over a tax policy that was seen as too favorable to the wealthy. Some proposed repealing the tax policy and also repealing France’s wealth tax (ISF).
An article argues against repealing the ISF wealth tax. It notes France has high levels of household wealth concentration and the tax only raises 0.3% of taxable wealth. Exemptions allow some of the wealthiest like Bettencourt to pay much less than they should.
The article proposes reforming the ISF by eliminating exemptions to broaden the tax base and allow lowering rates on smaller fortunes. But it should not be eliminated altogether.
In 2010 the US Federal Reserve announced a second round of quantitative easing (QE2) involving $600B in Treasury bond purchases.
An article defends the Fed’s actions, arguing there is little threat of inflation and fiscal austerity risks deflation. Central banks have a role to support governments during severe economic crises by lowering borrowing costs.
In late 2010, Ireland’s worsening credit market conditions led to requesting a European bailout due to earlier decision to guarantee bank debts.
Irish banks faced financial troubles in 2010, raising the prospect of another European bailout after Greece’s earlier that year. This raised questions about how to handle future banking crises.
At a summit in October 2010, Merkel and Sarkozy agreed states receiving bailouts could impose “haircuts”, or partial write-downs, on private bondholders. This deepened market turmoil.
Ireland was seeking a €90 billion bailout for its banks and budget. The EU was unlikely to provide this without Ireland raising its 12.5% corporate tax rate, seen as unfair tax dumping. Higher taxes were needed to contribute to debt repayment.
Tax harmonization across Europe was proposed to end tax competition and bring more stability to the Eurozone. A minimum 25% corporate tax or European surtax could help repay bailout debts.
Ireland’s low tax policy contributed to an economic bubble and opaque bank accounting. Europe needed to take control and reform tax systems to properly deal with the crisis.
Imposing partial defaults on sovereign bonds risked destabilizing different European debt markets. A orderly European bank tax was a better way for banks to help pay crisis costs.
Decision-making in the EU has long been criticized as complex, opaque, and following international diplomacy norms rather than parliamentary democracy.
The Lisbon Treaty aimed to make governance more transparent and democratic, replacing unanimous voting with qualified majority voting and opening more meetings.
However, during the Eurozone crisis most decision-making happened in private meetings between heads of state in the Council or Eurogroup instead of involving the Commission and Parliament more.
The Sarkozy-Merkel directorate is seen as disastrous and on the verge of blowing up the European project. They have been announcing solutions every month that are then belied by events, showing economic incompetence and political impotence.
Their most pathetic act was asking China and Brazil for money to help end the crisis, even though the EU has a larger economy than those countries.
There is an urgent need to rethink the European project and its governance approach.
The author argues that while free trade is theoretically efficient, in practice international tax competition has undermined redistribution efforts to share gains from trade liberalization. Trade liberalization has benefited the rich disproportionately without enough redistribution policies to offset rising inequality.
Simply advocating for free markets and saying redistribution is an issue for domestic politics ignores how tax dumping and unlimited trade work together to disarm public authorities. Lack of tax policy coordination enables tax havens.
Stronger international measures are needed like automatic information exchange between tax agencies, but existing agreements like the EU Savings Directive have loopholes and exemptions.
Protectionism is generally not preferable to free trade, but may be a necessary deterrent tool for countries to negotiate financial and environmental regulations as well as crack down on tax havens. The EU needs to take a unified stance to be effective.
Failure to make progress on redistribution and tax cooperation risks fueling nationalist backlashes against globalization and European integration. The author argues deeper EU integration must address these issues.

In summary, the author critiques how free trade theory has played out in practice and calls for stronger international cooperation on tax policies and regulations to balance trade liberalization’s effects.

François Hollande recently won the French presidential election, defeating incumbent Sarkozy. Hollande had promised policies more oriented toward redistribution and stimulus to address the economic crisis.
Hollande faces the central challenge of addressing Europe’s debt crisis. Simply implementing limited new project bonds will not be enough. To truly resolve the crisis, European countries need to mutualize/share each other’s public debts to allow stability and avoid speculation.
However, debt mutualization requires accompanying political union and further federalism in Europe. Decisions on issuing common debt would need to be made through a parliamentary body representing Eurozone countries.
France is pushing for eurobonds but has not laid out a specific plan for the necessary accompanying political integration. Without addressing this, any eurobond proposal risks failure.
Some proposals already exist, such as a “redemption fund” proposed in Germany to pool debts above 60% GDP. But this also has limitations without political union.
The author argues France must show leadership by outlining exactly how far it is willing to go on political union to accompany meaningful eurobond proposals. Otherwise the opportunity may be lost.
The article criticizes French President François Hollande for not putting forward concrete proposals for fiscal and political union in the Eurozone at an early EU summit. By putting off major decisions, Europe is merely gaining time but failing to solve the structural issues causing the euro crisis.
France should propose putting eurozone public debts in common and mutualizing the corporate tax, which are the two areas that individual countries cannot manage alone and require a European solution. This could be done through a new fiscal chamber made up of national parliament representatives.
Domestically, Hollande has also delayed several important reforms. Tax reform is being limited to minor tweaks when a complete overhaul is needed. Employer payroll taxes remain too high in France and need to be reduced by at least 20% by broadening the tax base, such as through a progressive social security tax.
By not showcasing bold visions for eurozone integration or ambitious domestic reforms, Hollande’s presidency has gotten off to a disappointing start defined by hesitation rather than decisive action that the times demand. Urgent steps are needed to remedy this.
The Italian elections highlighted tensions in the Eurozone as Italy struggles with high borrowing costs while Germany benefits from extremely low interest rates.
The rise of populist parties like Beppe Grillo’s Five Star Movement shows growing distrust in political elites across Southern Europe due to the economic crisis.
However, the EU and its largest members Germany and France bear responsibility for the crisis through their insistence on austerity and their failure to propose solutions like mutualizing public debt.
Italy has run primary budget surpluses for decades but still seen rising debt due to high interest payments. With the euro, it loses monetary tools to reduce debt burden through currency devaluation.
Mutualizing public debt across the Eurozone is needed to compensate for loss of monetary sovereignty, but Germany and France have not shown courage or coherence in proposing solutions.
If they don’t act, further political instability could spread across Southern Europe as populism rises and citizens lose faith in the European project. Coordinated action is urgently needed to resolve contradictions in the Eurozone.
Cyprus joined the EU in 2004 and the Eurozone in 2008. It developed a large banking sector (balance sheets >8x GDP, deposits >4x GDP) attracting foreign deposits, especially large Russian oligarch deposits due to low taxes.
Cypriot banks invested these deposits in risky Greek bonds and real estate, which depreciated severely. The EU is reluctant to bail out the banks without consequences for depositors, especially large Russian ones.
The troika initially proposed a disastrous “flat tax” of 6.75-9.9% on all deposits to raise funds. This was adopted by the Eurogroup but faced opposition for taxing small and large deposits the same.
There is debate around establishing fairer and more progressive approaches to losses as the crisis illustrates issues around managing financial crises across EU in a fair way. A tax only on deposits above 100k or a more bank-specific approach is now being considered.
The crisis calls for more transparency in EU financial decision making and establishing a fiscal parliament to debate such issues democratically. It also shows a need for international cooperation on taxation.
The passage introduces the idea of establishing a commission to shed more light on France’s colonial history and issues related to slavery and colonialism.
A provision pointing in this direction was struck from a 2001 bill by the majority at that time.
The author argues it is time to reintroduce this provision and have the commission do research and outreach through museums, similar to the International Slavery Museum in Liverpool, to increase transparency on these topics.
The overall goal is for France to establish a commission tasked with providing more clarity and information around its colonial history and legacy of slavery through research and public education initiatives like museums.
The IMF has started endorsing progressive taxation and a wealth tax to reduce public debt, marking a change from its prior support for austerity and consumption taxes. However, IMF officials and approaches still largely adhere to neoliberal orthodoxy.
A true solution requires stronger tax progressivity on both income and wealth at the individual level. Wealth taxes should tax bigger holdings at higher rates than modest savings. International cooperation is also needed to effectively tax wealth held across borders.
The crisis at the French newspaper Libération highlights the need to rethink governance models for media and other industries to ensure independence from powerful shareholders. Alternative models giving workers and the public a role could help diversify funding sources in a sustainable way.
Progressive taxes and public services are not a drain on citizens but rather ensure resources are shared for collective benefit. The future requires new thinking on democratic control and distribution of capital.
The European Parliament elections in May 2014 were the first since the sovereign debt crisis began in Europe and seen as a test of growing support for Euroskeptic and anti-austerity parties.
It was also the first election under the Lisbon Treaty, which required the European Council to “take into account” the results in selecting the European Commission president. The major European political groups each put forward candidates.
If the center-left Socialists won, their candidate Martin Schulz from Germany was expected to become Commission president over the center-right’s candidate Jean-Claude Juncker from Luxembourg.
However, simply electing Schulz would not be enough to genuinely change or reform Europe - the management of the crisis has led to nearly zero growth in the Eurozone while others recovered.
The author argues the common institutions have failed because a single currency and 18 different economies with competing tax/social systems and public debts does not work.
Deeper reform and rethinking of the Eurozone’s economic, social, tax and budget instruments is needed through a “Euro Political Union” as outlined in the Manifesto to return to growth and progress in Europe.
The electoral reforms proposed by Beijing for Hong Kong amount to a system of “plutocommunism” - allowing elections but only between candidates approved by a nominating committee dominated by pro-China business elites and oligarchs.
This mixes Communist single-party rule logic with unequal suffrage traditions from Europe where only wealthy taxpayers could vote. China seems tempted by a similar limited suffrage model but guided by the Communist party.
Beijing views political unity across China as most important for development, rather than Western multiparty democracy. Centralized political control allows public authorities to finance infrastructure and investments that support development.
Even with privatization, public capital still represents 30-40% of China’s capital compared to around 25% in postwar Europe. Political unity and a degree of public investment are seen as enabling China’s economic success, in contrast to many richer countries where public assets are now negative due to large debts.
The article criticizes European leaders for insisting their policies are the only possible ones and fearing any political shocks that could disrupt the status quo.
It points to recent “LuxLeaks” revelations showing Luxembourg tailored secret tax deals to help multinational companies avoid taxes, undermining neighbors, as Prime Minister Juncker became EC President.
The biggest problem is Europe’s institutions themselves; true progress requires democratic reconstruction and majority rule on tax issues to prevent future scandals.
Germany and France amnesiacally insist on debt repayment, though they wiped out over 200% debt ratios post-WW2 through inflation/repudiation, not surpluses.
Their fiscal pact insisting on excessively rapid deficit cuts has led to recession across Europe, showing a shortsighted selfishness given southern Europe’s debt issues. Political shocks are needed to move Europe in a more progressive direction.
The passage discusses the challenges facing Syriza in Greece and the potential for other left-wing populist movements like Podemos in Spain to gain influence across Europe.
Syriza’s victory in Greece in 2015 rejected austerity policies demanded by the European “troika” but risks confrontation with EU leaders if it does not compromise.
For these left-wing movements to truly change Europe, centrist governments in France and Italy need to recognize their share of responsibility for the crisis and propose democratic reforms to Eurozone governance.
Specfically, they should put new proposals on the table to replace the failed 2012 fiscal treaty and create a democratic parliamentary system for coordinating fiscal policy across the Eurozone.
This would allow for less austerity, more growth policies, and prevent future crises, though there is risk these governments will only accept limited debt relief for Greece without structural reform.
The posture of opposition Spanish Socialists towards Podemos will also be important, as sticking too rigidly to the status quo could cost them future elections. Broader democratic reconstruction of EU fiscal rules is needed.
Corporate tax rates have been cut in half in Europe since the 1980s, putting more tax burden on small and medium businesses. Large multinational companies often pay even less through tax loopholes.
This tax situation, combined with fewer public services, has contributed to a feeling of abandonment among the working classes. This fuels support for far-right populist parties both within and outside the Eurozone.
For European integration to be sustainable, there needs to be radical social and democratic reform. The recent proposal from EU leaders focuses too much on austerity measures rather than fiscal flexibility and investment, which is what actually spurred recovery in the US.
Europe is constrained by antidemocratic fiscal rules and the need for unanimity on tax issues. There is a lack of investment in innovation, youth, and universities compared to interest payments on debt.
Failure to reform Europe risks further populism and protest. Greek debt is unsustainable but renegotiation is refused, pushing Greece towards exit. France has been largely silent on proposing alternatives. Immediate action is needed to address these challenges.

Here is a summary of the key points regarding families from the given text:

The text does not directly discuss families. It focuses on broader economic and political issues in Europe and the Middle East.
It mentions that unemployment and job discrimination in Europe can contribute to tensions. Lack of economic opportunity and social integration could potentially impact families.
Income inequality is discussed as an issue both within European countries and between Middle Eastern countries. Wide disparities in living standards between rich and poor could stress family well-being.
The denial of democracy in Egypt is described, referring to the overthrow of a democratically elected president. Political instability and lack of democratic rights could indirectly impact families.
Austerity policies imposed on countries like Greece and Ireland are criticized for worsening economic conditions. Economic hardship at a national level may transfer pressure to families.

However, families themselves are not the primary focus of the text. It deals more with macroeconomic policies, inequality, political systems, and geopolitics - though some of these broader issues could filter down to influence family life and social cohesion. No direct discussion of families or family policies is included.

Taxes are discussed, including carbon taxes, corporate tax dumping, the EU Savings Directive, Bank Tax, inheritance tax, real estate tax, and debates around increasing taxes.
The global financial crisis and policies of Nicolas Sarkozy are discussed.
Issues around debt in Europe, the US, Japan, and proposals for a European treasury are mentioned.
Wealth distribution and debates around patrimonial capitalism vs productive capitalism, and a wealth tax, are covered.
Other topics mentioned include sanctions on Russia, the Brexit referendum, and slavery reparations.

#book-summary

Why Save the Bankers - Thomas Piketty