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"The insight underlying this strategy is straightforward. Instead of threatening to fully replace investors and de facto become the sole lender to the government, the central bank takes advantage of the fact that continued market access with participation of private investors imposes discipline on the government.

As the required scale of intervention is not determined by the whole financing needs of the government, central bank losses on holdings of sovereign-debt contingent on fundamental default may actually be contained. They may well be fully covered by (current and future) seignorage revenue at the desired level of inflation."

"Todo esto produce un poco de vergüenza ajena. Refleja el bajo nivel cultural de nuestros intelectuales, que sabrán escribir muy bien, pero que en materia política y económica no hacen sino patinar. Siguen actuando como si estuvieran en un casino decimonónico, cuando hay gente joven mucho mejor preparada y con ideas más interesantes que no encuentran hueco para expresar sus ideas y propuestas porque todo el espacio está siempre ocupado por las opiniones de los mismos. Yo no sé si tiene sentido hablar de la “casta política”, pero me temo que la “casta intelectual” existe, y se mantiene gracias a un pacto de no agresión entre sus miembros, los cuales operan con total impunidad, sin que sus carreras se resientan por la baja calidad de sus intervenciones públicas."

[via @PCMagalhaes]

"Hay un debate creciente, entre algunas fuerzas políticas, sobre cómo organizar la actividad política en el espacio público para conseguir una renovada vinculación por compromiso y participación, no simplemente por la mera asistencia. El itinerario antes-durante-después, así como la personalización de la conversación entre promotores y participantes, creando auténticos entornos de cooperación, pueden ser pistas decisivas para repensar la praxis política."

[via @antonigr]

"Satisfaction with the unambitious democratic expectations of liberal democracy produces complacency about the rise of what I call post-democracy. Under this model, while elections certainly exist and can change governments, public electoral debate is a tightly controlled spectacle, managed by rival teams of professionals expert in the techniques of persuasion, and considering a small range of issues selected by those teams. The mass of citizens plays a passive, quiescent, even apathetic part, responding only to the signals given them. Behind this spectacle of the electoral game, politics is really shaped in private by interaction between elected governments and elites that overwhelmingly represent business interests. This model, like the maximal ideal, is also an exaggeration, but enough elements of it are recognizable in contemporary politics to make it worth while asking where our political life stands on a scale running between it and the maximal democratic model; and in particular to appraise in which direction it seems to be moving between them. It is my contention that we are increasingly moving towards the post-democratic pole."

[op. cit., pp. 3-4]

"As money poured into the United States, U.S. financial firms, including mighty investment banks such as Goldman Sachs, Merrill Lynch (which was acquired by Bank of America in 2008 in a “shotgun marriage”), and the now defunct Lehman Brothers, as well as large universal banks (with retail bases) such as Citibank, all saw their profits soar. The size of the U.S. financial sector (which includes banking and insurance) more than doubled, from an average of roughly 4 percent of GDP in the mid-1970s to almost 8 percent of GDP by 2007.12 The top employees of the five largest investment banks divided a bonus pool of over $36 billion in 2007. Leaders in the financial sector argued that in fact their high returns were the result of innovation and genuine value-added products, and they tended to grossly understate the latent risks their firms were taking. (Keep in mind that an integral part of our working definition of the this-time-is-different syndrome is that “the old rules of valuation no longer apply.”) In their eyes, financial innovation was a key platform that allowed the United States to effectively borrow much larger quantities of money from abroad than might otherwise have been possible. For example, innovations such as securitization allowed U.S. consumers to turn their previously illiquid housing assets into ATM machines, which represented a reduction in precautionary saving."

[op. cit., p. 210]

"One can only surmise that many governments do not want capital markets to fully recognize the risks they are running by piling on debt and debt guarantees due to their fear of having to pay much higher financing costs. Publishing historical data will make investors ask why current data cannot be made equally available. Still, one would think a strong case could be made for less profligate governments to open up their books more readily and be rewarded for doing so by lower interest rates. This transparency, in turn, would put pressure on weaker borrowers. Yet today even the United States runs an extraordinarily opaque accounting system, replete with potentially costly off-budget guarantees. In its response to the most recent financial crisis, the U.S. government (including the Federal Reserve Board) took huge off–balance sheet guarantees onto its books, arguably taking on liabilities that, from an actuarial perspective—as evaluated at the time of the bailout—were of the same order of magnitude as, say, expenditures on defense, if not greater. Why so many governments do not make it easier for standard databases to incorporate their debt histories is an important question for future academic and policy research."

[op. cit., p. 138]

"Y, por último, se produce una situación kafkiana: las universidades son las mayores productoras de propiedad intelectual en formato libro y artículos; ninguna editorial dispone de una fuerza creadora de 130.000 autores como la tienen las universidades. Las leyes de la Universidad y de Economía Sostenible señalan que las universidades son las titulares de la propiedad intelectual que se crea bajo su entorno, por lo que la reforma pretendida por el Ministerio de Cultura obliga a que las universidades, propietarias de esas obras, a que cedan la gestión de su patrimonio a una asociación privada, CEDRO, para que ésta les cobre una tarifa por publicar en sus propios campus virtuales obras de las que las que la universidad es la dueña."

(via @jordi_a)

"The econometric evidence is rough, however, and may not carry the argument. Adjustment fatigue and the limited ability of current governments to bind the hands of future governments are also relevant. Tough decisions may need to be taken before fatigue sets in. One must realise that, in many cases, the fiscal adjustment will have to continue well beyond the tenure of the current government. Still, these arguments support doing more now."

[via @PCMagalhaes]

"At some point shortly after the end of the Second World War, democracy reached its apex in countries such as Britain and the US. According to Crouch, it has been declining ever since. Places such as Italy had more ambiguous histories of rise and decline, while others still, including Spain, Portugal and Greece, began the ascent much later, having only emerged from dictatorship in the 1970s. Nevertheless, all of these countries have reached the downward slope of the arc. The formal structures of democracy remain intact. People still vote. Political parties vie with each other in elections, and circulate in and out of government. Yet these acts of apparent choice have had their meaning hollowed out. The real decisions are taken elsewhere. We have become squatters in the ruins of the great democratic societies of the past."

[via @PCMagalhaes]

"É assim sempre que se relativizam valores civilizacionais, e muito particularmente se relativiza o universalismo desses valores e se submete o valor da vida, do respeito pelo outro, à ideologia. Quando tal acontece instala-se uma terrível mentalidade totalitária e dá-se lugar ao terrorismo de Estado. Ao terrorismo de Estado ou ao terrorismo de grupos minoritários ou maioritários mais ou menos iluminados — mas terrorismo. Sempre que se relativizaram princípios morais e éticos abriu-se caminho aos dramas e às tragédias, no limite justificadas pela nobreza das causas. Essa é talvez a maior das lições do século xx, no mundo mas também na Europa, e que não pode nunca ser esquecida por quem militou nos partidos comunistas, por quem se esqueceu da Sita Valles.
A sua tragédia levou-me, nesses anos, a um sentimento de tristeza, de revolta, de pena e de culpa. Mas não o suficiente para chegar ao âmago da questão."

"There is even a vicious cycle at work. The less accurate that public intellectuals are in their assessments or predictions, the less seriously they are taken, which reduces the demand for accuracy, though the cycle is checked by the fact I've been emphasizing that the record of their mistakes is not well known. But neither is the record of their successes. Neither record is carefully compiled and studied because few people take their cues from what public intellectuals say. We can imagine a downward spiral bottoming out in a low value-low cost equilibrium. The educated public spends little time, and incurs few other costs, in consuming public intellectuals' wares and derives correspondingly modest benefits."

[op. cit., p. 154]

"There is reason to believe that competition may indeed be less effective in producing a quality product in the public-intellectual market than in other markets in symbolic goods, especially though not only me academic market, and this despite the fact that academics increasingly dominate the public-intellectual market as well. Consider the matter of the public's short attention span. People are very busy today, and information overload is a reality, not a cliche, as indicated by dramatic increase in the number of television commercials per viewer, the equally dramatic reduction in the average lenght of these commercials, and the concomitant shift from informational to rhetorical advertising content. The many competing uses for a modern American's time crowd the time available for the consideration of public issues at the same time that the complexity of those issues has grown. The limiited time of the "consumers" in this market implies limited capacity to evaluate the wares of the sellers (the public intellectuals) and so invites exploitation. And the sellers, at least the majority that are academics, are uniquely insulated from the retribution of disappointed consumers by virtue of being part-timers, able at any moment to leave the public-intellectual market at low cost."

[op. cit., pp. 79-80]

"In addition to being an aspect of the decline from serious discussion, the recourse to show business for ideas of how to attract interest in politics, the growing incapacity of modern citizens to work out what their interests are, and the increasing technical complexity of issues, the personality phenomenon can be explained as a response to some of the problems of post-democracy itself. Although no-one involved in politics has any intention of abandoning the advertising industry model of communication, identification of specific cases of it, in current British jargon stigmatized as 'spin', is tantamount to an accusation of dishonesty. Politicians have thereby acquired a reputation for deep untrustworthiness as a personality characteristic. The increasing exposure of their private lives to media gaze, as blaming, complaining and investigating replace constructive citizenship, has the same consequence. Electoral competition then takes the form of a search for individuals of character and integrity. The search is futile because a mass election does not provide data on which to base such assessments. Instead what occurs is that politicians promote images of their personal wholesomeness and integrity, while their opponents only intensify the search through the records of their private lives to find evidence of the opposite."

[op. cit., p. 28]

"Troubled thoughts of various kinds gradually came together to form this book. By the late 1990s it was becoming clear in most of the industrialized world that, whatever the party identity of the government, there was steady, consistent pressure for state policy to favour the interests of the wealthy - those who benefited from the unrestricted operation of the capitalist economy rather than those who needed some protection from it. What seemed to be the extraordinaty opportunity presented by the fact that nearly all member states of the European Union were dominated by centre-left parties was resulting in no notable achievements at all. As a sociologist, I could not be content with explanations of this that concentrated on the veniality of politicians. It was related to structural forces: nothing was emerging within the body politic to replace the challenge to the interests of the wealthy and socially advantaged that had been presented for most of the twentieth century by the organized manual working class. The numerical decline of that class was returning politics to something resembling what it always had been before: something to serve the interests of various sections of the priviIeged."

[op. cit, p. vii]

"Acemoglu and his colleagues are not right-wing conservatives, but their analysis poses one more challenge to an American left that has struggled to preserve basic progressive institutions – the labor movement, employee pension plans, a safety net for the poor – in the face of a corporate consensus that these programs weaken America’s ability to compete in an international marketplace. The three authors make the case that the interconnected world economy has reached what they call an “asymmetric equilibrium” in which the United States “adopts a ‘cutthroat’ reward structure, with high-powered incentives for success, while other countries free-ride on this frontier economy and choose a more egalitarian, ‘cuddly,’ reward structure.”"

[via @henryfarrell]

"The idea of risk weighting seemed sensible, even necessary, as a guard against banks’ being tempted simply to accumulate the riskiest and thus highest-yielding assets. However, banks’ aversion to equity created a huge incentive for them to reduce the risk weights of their assets even in ways that did not in fact reduce actual economic risks. As my colleagues at the Centre for Research on Socio-Cultural Change at the University of Manchester show in their book After the Great Complacence, much of what has counted over the past 25 years as ‘financial innovation’ has been a response to incentives of that sort."

[via @henryfarrell]

"Before we leave this topic it might be useful to point out that any shortcomings we have at being inventive or innovative are likely to be magnified in our modern world. This is because it is not necessary for the numbers of innovators in society to keep pace with increases in the size of the population—many people can happily get by copying just one good innovator. This effect is enhanced by language and writing, both of which transmit ideas and innovations well beyond those who came up with them. And this raises a serious question about the kind of dispositions and temperaments that our modern world will encourage. As our societies become ever more connected and “globalized” it will become increasingly easy for most of us not to innovate at all—to become intellectually lazy and docile, at least in matters of inventiveness. The irony is that this might be happening at a time when more innovation is needed than ever before just to maintain the levels of prosperity many of us already enjoy, and to raise it for those who have, up to now, been less fortunate."

[op. cit., pp. 243-244]

"In most secondary schools, separate classes and courses compartmentalize instruction. Students have no one place to put their learning’s together to make a cogent whole. The relationship of one course’s content to another’s goes unexplored—there is neither opportunity nor invitation for reflection. Instead of individual courses we might allow for the type of learning…based on discovery… that will resonate with students, inform them factually and humanistically. Just like “Midnight in Paris,” was a nucleus from which students set off on explorations of culture, history, literature, art, and architecture, each strand could then be explored in depth, individually. In fact, what made Paris the center of creativity in the twenties was in some part the result of the First World War, so there’s another even more potent theme just waiting to be revealed. Of course, this mean school needs to be reinvented and there really is no interest in a meaningful reconstitution of education. But let’s not get into that."

[via ‏ @AnaCristinaPrts]