I spent two hours yesterday in the presence of Marju Lauristin, and I am still tired from the experience. This is a human being who, even in her late 60s, is tireless and engaging.At times, as she paced in front of the desk, her arms waving about as she explained the differences between the Popular Front and the Congress of Estonia in the late 1980s, I began to wonder if she really was an Estonian. Estonians don't move their arms around like that, do they? Estonians aren't charismatic, are they? Estonians aren't ... friendly?
It seems that some Estonian thought leaders -- be they academics, politicians, or in betweens -- have some special gravitational pull that makes you believe everything they are saying. I have noticed this with regards to people who have encountered Mart Laar. At first, they might seem skeptical, but once exposed to Laar's unique charisma, they turn into Laarbots. I am almost afraid to meet him for fear that it might happen to me too.
I asked a Laar supporter once if they thought it might be time for the current generation of Estonian leaders to pass the torch to a younger brigade, perhaps less shaped by the collapse of the USSR. "Could you imagine," I said, "that we take a time machine to the year 2030, and Laar is prime minister for the sixth time?!" The supporter smiled and said that she would be very happy with that result, as Papa Mart knows what's best for Eestimaa.
Almost all of my professors are down on the current Estonian government. There are a number of Danes who have infiltrated the halls of Tartu Ülikool along with some Germans (yes, they're baaack) and they can't figure out why the government is cutting away at the public sector, reducing their salaries to a point that even regular Estonians start to cry.
In Denmark, a significant percentage of the population of the country feeds in one way or another on the teat of the state. This is the Scandinavian welfare model: the people work for the state and, typically, vote for parties who will increase their benefits and paychecks, or at least won't reduce them. From their perspective, the public sector must be protected, as it is the backbone of civil society.
If the Danish government started making public employees cry, there would be hell to pay, I am told. In Estonia, they'll shut up and take it for the sake of liberalism. The speck of light at the end of the tunnel is a pot of shiny coins, the leaders tell the maarahvas, and in that pot the money is in the European currency. The Gods in Estonia are not teachers or nurses or trade unionists, you see; they are foreign entrepreneurs. And forget about the poor drunks living in shanties in the Estonian global south. They might not be dead yet, but they will be soon enough!
Ai, ai ai. Estonian politics. It's everywhere; in the classroom, at the bus station, even in my sister-in-law's place where Laar and Lauri Vahtre's most recent works fill the bookcase. Now, with the European parliamentary elections coming up, I even got a free Eesti Eest! newspaper in this morning's Postimees. IRL has some good candidates: Tunne Kelam (the wiseman), Marko Mihkelson (the bold loyalist), and Karoli Hindriks (the slick choice of a new generation).
I can't wait to see who the other parties put forward. Really.
27 kommentaari:
eestlane ei karda tööd!
read Margus Laidre instead of Lauri Vahtre. Much better :)
as for people not throwing rocks at the Riigikogu yet, I think it's because the government is making it very clear that they are trying to take the best option out of the bunch of bad options. so everyone gets to tighten their belts and take one for the fellow worker who ALSO gets a pay-cut. Now that is social solidarity...
Read it in Finnish and it sounds the same.
It sounds like a 't' to me. It's fun to read texts in Estonian from the 18th century because "Ida" might be "Ita" and "Laulab" might be "Laulap." When I first started learning, I mixed up the 'p's and 'b's all the time.
I guess there are not many other options open for Estonia, but in this situation it is not necessarily good at all to cut drastically public consumption (even if it should be unavoidable) - you know, this "stimulus" thing that has gotten into fashion in many places. And the fact that Estonia is in the situation where it doesn't have many - or perhaps any - good options left just might be due to an overly liberal (in the European sense) economic policy. Not Iceland on Toompea class maybe, but still things have been quite reckless, at least from a Nordic perspective, maybe less so from Singapore, Hong Kong and Wall Street...
well there is a form of "Kartma" - "karta". "karta" is to "karda" like "petta" is to "peta".
2ra karda - ei tasu karta
ei peta - pole vaja petta
Estonia instituted liberal reforms because they were encouraged by major international financial institutions and because Estonia was really poor and rapid economic growth sounded really good. We'll see if that mentality changes over the next year or two.
Estonia is hacking away at the public sector because the last two budgets were a mistake on the "over-exuberant" side. For a very small and very open economy, " stimulus" makes even less sense than for the majors. As I recall, Estonia has a currency board system, which means that the money supply is endogenous. That means that it is determined by the deposits of foreign currency in Estonia.
Measures that raise domestic demand and prices cause a loss of foreign reserves. No way around it. Budgets that raised spending 20+% for the last three years chased away exports and manufacturers. The last time that Eesti had a trade surplus was '93, before the wave of foreign investment came, bringing in its surge of tax revenue.
Estonia's public sector seems small only in comparison to the slow-growing socialist club it belongs to-- the EU. If you were to benchmark their taxes against other quick growers, you'd find that they yield plenty of revenue-- especially the huge social tax, that adds cost onto every labour transaction.
Well, well, actually there is a quite wide spread consensus of economists that public stimulus does make sense in conditions like this. New Deal did work, unless you choose to believe an abstract all explaining Theory instead of empirical evidence. The Keynesian overreach happened well after Keynes, and even that wasn't as bad as it has been painted (by believers in an abstract all explaining Theory). Estonia might be a special case and I have been very reluctant to criticize its overly liberal policies as the post-Soviet conditions really were and are exceptional. But there also was a purely ideological slant to the reforms - and that ideology, in my view, is harmful and very prone for sudden collapses of confidence such as this. Hopefully the right lessons will be learned from this crisis even in Estonia.
currency board systems demand international balance first. There is no compromise. When Argentina tried to cheat, it did not help employment, but made debts unpayable. Either Estonians keep their currency board, or they devalue, then try to bail-out all those folks with foreign currency debts. Functionally, their are no other choices.
That does not mean that policy couldn't improve, or that there is nothing the Government can do, but the options to help are not spending their way out of debt like the huge economies that rely on domestic demand primarily.
I'll leave the propaganda battle about the American depression alone today, but really, anything that Estonians can do to improve the effectiveness of government investment, private investment or address glaring problems, like pollution control initiatives of the 90's would help.
Cutting the labor tax for a while would help employment short-term, but spending commitments will keep the pressure on.
Anything that helped immigration of companies and people with foreign training helps too, even though it seems that unemployment argues otherwise.
I think a major problem is that Estonia itself does not produce very much. The boom was centered on the real estate market and a surge in demand for consumer goods: all the stuff to go in your new, Swedish bank-financed apartment or house.
If Estonia wants to move beyond being a subsidiary of the nordic countries, where it is doing the R&D or manufacturing work and reaping less of the rewards, then it will have to make comparable investments in what it deems to be high-growth sectors. No foreign company is going to come in and do that for you. Yet now, there appears to be no money; not even for the existing public sector. So, where does the country go from here?
Yeah, but ending up in this cul-de-sac of only bad options didn't happen overnight, in part the path had been chosen (probably with even some awareness of its riskiness) and not only forced by the circumstances. Anyway, one wonders how strong will the devaluation pressures get in this crisis. It might get somewhat ugly, I fear.
Devaluation is a Pandora's box. Then we would have to go the distance and be a caricature of some Latin American country with a class of peasants.
Nothing to be done now, except for thousands of people to make the right personal decisions quietly, without saying much of anything, certainly nothing openly protectionist. Just voluntary import replacement.
Marju rocks.
I have met her once, for about 3 hours concurrently. I think I should get course credit for my time.
And with her family back story, she's one for the ages in these parts.
I (with two other suspicious-looking young slobs) once hitchhiked into Laar's car. I've never voted for I nor RL, but I'm 100% sure that Mart is a good guy. A normal person, as the Estonian saying goes.
Lauri Vahtre, on the other hand, is a moron, pretty much like Priit Pullerits. But thankfully both offer great entertainment.
Devaluation certainly would be bad and painful (though Estonians probably would be able to weather it better than non post-Soviet Westerners with their informal networks and survival skills). It should be avoided almost at any price - but it might not be easy and there might become a situation serious enough where it would be the least bad solution. This will be a hard test, and a good lesson about an uncontrolled (though still mostly voluntary) overheating of the economy.
I don't think devaluation is being seriously discussed by anyone?
Estonia already is integrated with the euro at 15.65 EEK. And it's not a big exporter of raw materials.
Even inflation has been a function of the cost of living and wages catching up to that of Europe.
The only arguments in favour of devaluation I have heard are fallacious and trivial ones, such as "southern European produce is cheaper due to an overly strong EEK". There's a longer growing season there and the particular produce is crap, that's why it's cheaper.
Well, things like these have started appearing on the news every now and then, so it's not totally outside all possibilities, unfortunately:
Baltic Business News
It is interesting to see the emergence of thought leaders in this crisis. Vähi is certainly one of them, but they are also building Indrek Neivelt into a thought leader. I also read some rumors that he's been meeting with Padar as of late. Perhaps he will follow Jüri Pihl and become an overnight social democrat.
Well, looks from that article like at least BBN hired a proofreader. I wonder if they are paying kroons?
In any case Roubini is the economist of the moment, he has good track record about the present crisis. Devaluation would not be all bad, but it would not happen in a very controlled way: no government would let it happen without a costly fight - so I guess it's best to keep it off the table completely. We will certainly have interesting times all over the West in these coming years...
Lauri Vahtre, on the other hand, is a moron, pretty much like Priit Pullerits.
Have you also ridden in a car with Vahtre or Pullerits?
Maybe you'll feel differently when you own a car and are out of your teenage years.
That would be an interesting initiation procedure indeed. But I'm afraid I won't have a car anytime soon, so the wisdom of these right-conservative gurus will keep eluding me.
Lauri Vahtre is not nearly as bad as Pullerits. Vahtre is more like Hillar Palamets. an OK historian who unfortunately got entangled with politics but hasn't the gut to say out loud whether he's a politician or a historian and so ends up being a party historian.
Yes, Laar is a historian, so is Lukas, so is Must and even Savisaar, and so was Meri. But when they entered politics they made a clear cut (for a while at least). Even Laar's recent history books don't claim to be unbiased, and that's OK. The problem with Vahtre is that he DOES claim to be (socio-politically) unbiased and he's not.
No. Vahtre is an OK writer who thinks that he's a historian.
(OK as a book writer, not as a movie writer)
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