Angie is miffed that inferior people and lesser nations are questioning her demands that they adopt her Ordnungsökonomik and like it!
Philipp Wittrock reports for Spiegel Online, Vor Krisengipfel.Aufstand der Euro-Nörgler 07/12.2011 on what a "hochrangige, deutsche Regierungsvertreter" (senior German government deputy) had to say on behalf of Angie's government on the Little People who are questioning her commands. See also Carsten Volkery and Philipp Wittrock, Das deutsch-französische DiktatSpiegel Online 06/12/2011.
Princess Angie von Merkel doesn't want to hear grumbling from Britain. Nor from those punks that call themselves EU officials (EU Council President Herman Van Rompuy, EU Commission chieft José Manuel Barroso, euro group head Jean-Claude Juncker). Certainly not from those Czechs; hell, didn't they learn their lesson in 1938?
The silly Hungarians are even muttering about holding a referendum. And we know Angie doesn't like referendums.
There's a German saying that, "Ordnung ist das halbe Leben." (Order is half of life.) I don't think Angie is big on the "half" part. She expects her satellite states to click their heels and salute when she gives them an order.
As nasty as Merkel is being, it's also important to understand that Britain's behavior has also been irresponsible. Conservative British Prime Minister David Cameron doesn't make any bones about the fact that his priority in this crisis is giving the banksters of London maximize freedom to do what they want. (Nicholas Watt and Ian Traynor, David Cameron threatens veto if EU treaty fails to protect City of LondonGuardian 12/06/2011)
This continues British half-heartedness in supporting the "European project," i.e., the building of the European Union. British Conservatives have always been divided on their support for the EU, much more so than conservatives in Germany and France, where Big Capital was generally more united in their desire for the commercial benefits of EU participation.
Britain, generally being a faithful follower of the US in foreign affairs, favored the American preference for the EU under both the Clinton and Bush II Administrations. Which was for a weaker union, focused more on economic issues than on political unity, and for fast expansion of the EU to former Soviet bloc countries.
Britain's decision to stay out of the euro zone may look prescient at the moment. But that decision had less to do with economic wisdom than it did with British leaders' half-hearted commitment to the EU. So Britain has a major share in the leadership failure that threatens to end the EU project, as well as the euro currency. Cameron and his Conservatives are just as married to austerity economics as Angie and the European banksters. So his advice and support in the current crisis hasn't offered any real solutions or distracted Merkel and Sarkozy from their disastrous course.
Robert Kuttner has a good summary of European austerity economics in Europe's Deal: So Who Wins?American Prospect Online 12/07/2011:
... the real European economy is condemned to many years of austerity. That, in turn, means prolonged high unemployment, further weakening the bargaining power of wage earners vis-à-vis corporate capital. Europe’s economic elites also get new leverage to shrink Europe’s welfare state. Notably missing from the deal is any improvement in the regulation of finance, whose abuses caused the crisis in the first place.
In fact, if all this sounds vaguely familiar, it is exactly the grand bargain that has been promoted for two decades by the likes of Peter G. Peterson, Robert Rubin, the members of the Bowles-Simpson Committee, and kindred millionaires who want an enforceable hammer to compel a balanced budget and shrink social spending. The only difference is that on the other side of the Atlantic, the euro crisis gave elites the leverage to pull off this deal.
In the U.S., miraculously, we have dodged this bullet mainly because Republicans have refused to include taxes in the deal. Many Democrats, until lately, have been all too eager to give away the store and sacrifice broadly cherished programs like Social Security and Medicare that have nothing to do with the current financial or fiscal crisis.
He concludes:
... financial elites have won a major victory. The pity is that the press has largely interpreted this in terms of saving the euro and calming capital markets rather than a question of who really benefits and who suffers. A very different strategy could have saved the euro, spared ordinary Europeans the pain of such extensive austerity, and reined in banks to prevent the next crisis from recurring. But that sort of policy change will first require a massive shift in political power.
What his short piece does not convey is the very tenuous nature of whatever solution is ratified by the EU summit on Friday.
Obama gave a speech in Osawatomie, Kansas, yesterday, one of his performances in which he tries to sound like an actual Democrat. Although he picked the location because it has some historical association with Republican President Theodore Roosevelt. Another famous American historical figure is also associated with the place to the point of having been nicknamed Osawatomie: the anti-slavery guerrilla fighter John Brown, famous for his role in the mini civil war against slavery in "Bleeding Kansas".
So I even need to mention that the latter historical association makes no appearance in the President's speech?
And Charles Pierce applies his acid pen to the speech in Obama's Kansas Speech: The Good, the Bad, and the 99%Esquire Politics Blog 12/06/2011. Pierce reacts, uh, skeptically to Obama's equation of the Tea Party with the Occupy protests:
Can this meme please die a quick and bloody death? Back in 2009, the Tea Party demonstrations had fk-all to do with corporate greed. The whole thing started when Rick Santelli started raving about deadbeat mortgage holders and the hard-working stock traders in camera range behind him. The Tea Party demonstrations were manufactured events dedicated to the eternal proposition, "Me some, too, yes?" And even if you accept the fact that they were somehow spontaneous uprisings of people worried down to their orthotics about the goddamn deficit, which I don't, all of their energy was poured into opposing government spending — or, more specifically, government spending on those people, and not on us. If the corporate brains behind that "movement" ever thought it was seriously turning against the corporate piracy that caused the whole meltdown, they'd have pulled the plug, canceled all the buses, and a whole bunch of old white people would still be walking home from Washington. As I have said from the beginning about the Occupy movement, I will support it because, at the very least, those folks are yelling at the right buildings. [emphasis in original]
There's no doubt Obama can give a good speech when he focuses on doing so. Here he's in Big Picture mode. But even so, his politically pathological rhetorical centrism infects even a speech like this. At 7:00, he says:
This is the defining issue of our time. This is a make or break moment for the middle class, and for all those who are fighting to get into the middle class. Because what's at stake is whether this will be a country where working people can earn enough to raise a family, build a modest savings, own a home, secure their retirement.
Now in the midst of this debate, there are some who seem to be suffering from a kind of collective amnesia. After all that's happened, after the worst economic crisis, the worst financial crisis since the Great Depression, they want to return to the same practices that got us into this mess. In fact, they want to go back to the same policies that stacked the deck against middle class Americans for way too many years. And their philosophy is simple: we are better off when everybody is left to fend for themselves and play by their own rules.
I am here to say they are wrong. I'm here in Kansas to reaffirm my deep conviction that we're greater together than we are on our own. I believe this country succeeds when everyone gets a fair shot. When everyone does their fair share. When everyone plays by the same rules.
Great! Obama doesn't have the booming cadence of FDR. But here he comes close to sounding like he shares FDR's passion for the working people and their interests.
Then he continues immediately with, "These are not Democratic values or Republican values. These aren't 1% values, or 99% values.These are They're American values. And we have to reclaim them." (my emphasis)
Did I mention that Obama's speech contained no historical references to John Brown or the fight against slavery? Some of those Abolitionists were just very uncivil, you know.
Why can't Obama straightforwardly state the obvious? That, no, these aren't Republican values, or 1% values. The Republicans and the wealthiest 1% whose interests they loyally serve reject those values and are determined to make sure that such values will not govern the United States.
Mammon forbid that the Democratic President even rhetorically claim to favor the interests of the 99% against the greed, recklessness and arrogance of the wealthiest 1%!
Speaking of heathen gods, Athena knows that Obama sounds more responsible and enlightened on the issue of regulating the banksters than any of the Republican candidates for President that have a remote chance of getting their authoritarian Party's nomination. But his own subservience to Wall Street during this depression makes him a deeply flawed messenger for defending those values he rhetorically endorses.
And for those who might be inclined to believe him, it really doesn't help for him to pepper-spray his own more confrontational rhetoric with "bipartisan" nonsense.
Obama and his Party have already offered up major cuts in Social Security and Medicare this year. On the supercommittee, the pitiful Democrats are begging, begging the Republicans to accept such cuts. Let's say that it seriously mitigates the credibility of the President's claim that he will defend the aspirations of working people to "secure their retirement".
Voters don't typically think in the policy-free terms of our Big Pundits, however much opportunity our media environment offers for mass manipulation by well-financed campaigns. Obama's very public insistence on drastic austerity economics in the middle of a depression in the wholly unnecessary debt-ceiling drama earlier this year showed clearly how unwilling Obama is to fight for those "American values" he enumerated at Osawatomie when it actually counts.
As long as Obama and the Democrats are willing to offer up cuts in Social Security and Medicare benefits, those who support such programs or who want to see the Democrats fight for real on behalf of working people can't afford to take such claims seriously. However much worse the Republicans may be.
Ron Fournier, a lazy-minded Establishment pundit, digs up someone to present the excuse favored by the White House for their serial capitulations to Republicans and the 1%:
"There was a lot [Teddy] Roosevelt could do. America was expanding, not contracting," said Brian Carson, assistant professor of history and Misericordia University in Dallas, Pa. "Roosevelt was a symbolic figure as a man of action and I'm sure Barack Obama would like to be viewed that way. But, if anything, Obama seems to be a man of limits, personally and by the nature of the times."
He recalled that Roosevelt once gathered together the titans of industry to bully them about one of his initiatives. Imagine Obama doing that? His biggest contributors work on Wall Street, and he is temperamentally more likely to lead quietly behind the scenes, or delegate leadership to Congress, than seize the spotlight.
Obama gave a great speech. But the next TR? History doesn't repeat itself. In this case, it may not even rhyme.
"Think about it," Carson said, "What can a president do today?"
Our Pod Pundits may be impressed with the White House's excuse that they have no choice but to snivel before the demands of Wall Street and other business lobbies: shrugging their shoulders and saying, gee, what get a President do anyway?
I don't think voters outside the Beltway Village bubble are likely to be so easily impressed.
Charles Pierce in a follow-up post on the Osawatomie speech (The President Does Not Fully Understand the 99 Percent 12/07/2011) comments on the passage cited above, "I believe this country succeeds ... American values." (Editorial gripe: Pierce truncates the quote without an elipsis.) And his gives this Menckenesque commentary:
Is it necessary to count exactly how many ways the man is wrong here? Not in what he believes. Those indeed are the circumstances in which this country has succeeded. But the fact remains that, in the current political context, while the Democratic party may be timid in asserting them, those values still exist somewhere in the party. They simply do not exist in the Republican party. The Republican party does not believe in the truth of that first sentence, and it has no intention of pursuing policies that actually have a chance of giving "everyone a fair shot." The Republican party gave up on these "values" the first time they let [supply-side economics propagandist] Arthur Laffer into their corridors of power without handing him a mop and a bucket. And since the American people handed the House of Representatives over to these people — and since the American people have not yet laughed the entire GOP presidential field off the stage yet — it can be safely said that the president is going to have to work a lot harder to convince me that they are widely held "American values" any more.
More important, in our current political context, these are very much "99 percent values." They are not one percent values. The One Percent could care less if there ever is a thriving middle class in this country again. They'd sell the entire American middle class to the Somali pirates if there was a buck in it. There may be a political calculation at work here — Embrace the energy of the Occupy movement, Mr. President, but stay the hell out of the damn drum circle! — but the fact remains that the effectiveness of the "We Are the 99 Percent" argument is completely dependent upon its independence from the anesthetic stupor brought on by ameliorative political rhetoric. [my emphasis in bold]
Cotterill gives a somewhat wonky explanation of how the policies pursued by German Chancellor Angela Merkel and French President Nicolas Sarkozy on the writedowns of bad sovereign debt have made the current crisis far less manageable. Their October plan for "voluntary" writedowns of credit held by private investors while not requiring such writedowns on the same debt held by public agencies may have set off processes that the Mighty Merkel will no longer be able to bring under control in time to save the euro and the EU.
With particular reference to the bankers-collection-agent governments of Greece and Italy imposed on them by Germany and France via the EU, Hudson writes about the destructive cycle brought on by austerity economics:
This is being dictated by financial proxies euphemized as technocrats. Designated by creditor lobbyists, their role is to calculate just how much unemployment and depression is needed to squeeze out a surplus to pay creditors for debts now on the books. What makes this calculation self-defeating is the fact that economic shrinkage – debt deflation – makes the debt burden even more unpayable. [my emphasis]
And he continues with observations that apply more generally to all countries whose political elites have embraced Herbert Hoover austerity economics:
Neither banks nor public authorities (or mainstream academics, for that matter) calculated the economy’s realistic ability to pay – that is, to pay without shrinking the economy. Through their media and think tanks, they have convinced populations that the way to get rich most rapidly is to borrow money to buy real estate, stocks and bonds rising in price – being inflated by bank credit – and to reverse the past century’s progressive taxation of wealth.
To put matters bluntly, the result has been junk economics. Its aim is to disable public checks and balances, shifting planning power into the hands of high finance on the claim that this is more efficient than public regulation. Government planning and taxation is accused of being "the road to serfdom," as if "free markets" controlled by bankers given leeway to act recklessly is not planned by special interests in ways that are oligarchic, not democratic. Governments are told to pay bailout debts taken on not to defend countries in military warfare as in times past, but to benefit the wealthiest layer of the population by shifting its losses onto taxpayers.
The failure to take the wishes of voters into consideration leaves the resulting national debts on shaky ground politically and even legally. Debts imposed by fiat, by governments or foreign financial agencies in the face of strong popular opposition may be as tenuous as those of the Habsburgs and other despots in past epochs. Lacking popular validation, they may die with the regime that contracted them. New governments may act democratically to subordinate the banking and financial sector to serve the economy, not the other way around. [my emphasis]
Coy uses a 1914 analogy which seems appropriate to me, because pigheadedness, arrogance and just plain stupidity seem to be playing outsizes roles in the current failure of European leadership in the crisis around the euro which is very likely to take down the EU in the near future. He adds a fire metaphor for good measure:
There is a whiff of August 1914 in the air. That was the month when Europe's leaders stumbled into World War I through arrogance, nationalism, entangling alliances, and myopia. The operating assumption is that Merkel will bend before the onset of a financial conflagration, but there's no assurance of that. In calling for treaty revisions, the Chancellor referred to "construction weaknesses in the euro zone" that need fixing. She perceives herself as a builder, not a firefighter. The question is whether, by the time Merkel has perfected the blueprints for the high-class renovation of Europe she and her supporters crave, the building will have burned down.
I was particularly interested in Coy's reporting on Angie's adherence to an obscure, reactionary economic dogma called "ordoliberalism":
Modern German politics continues to be influenced by a philosophy that originated at the University of Freiburg in the 1930s: ordoliberalism, a conceptual blend of free markets and strong government. It says rigorous regulation is necessary, but only to help the free market achieve its full potential.
Ordoliberals detest stimulative Keynesian policies. Jürgen Stark, a Merkel ally who has tendered his resignation from the European Central Bank's executive board in protest against its easy-money policies [!!!], once said that ordoliberalism theoretician Walter Eucken (who died in 1950) "has been a constant source of inspiration throughout my career." In a speech in Freiburg last February, Merkel said: "Unfortunately there aren't Euckens in all the countries of the world."
Sound money is the polestar of the ordoliberal tradition. [my emphasis]
"Sound money" translates for Angie and her supporters into austerity economics.
Although my trusty 2006 digital edition of the Encyclopædia Britannica seems to be innocent of the concept of ordoliberalism, in its article on "money", the author, Milton Friedman himself, includes Walter Eucken's This Unsuccessful Age (1952) as the first of his brief list of "[u]seful readings in monetary theory". My 2007 German Microsoft Encarta Standard does have a brief piece on Walter Eucken (1891-1950) by Karl Bürgel which describes him as the "Hauptvertreter des Ordoliberalismus" ("chief representative of ordoliberalism"). He even got his picture on a German stamp in 1991.
Friedrich August von Hayek, one of the "Austrian economists" of which self-described libertarians claim to be so fond, served as the chairman of the Walter Eucken Institut. The Institut's website claims Eucken and Franz Böhm as the founders of the "Freiburg School" of economics. It also refers to their trend of thought as "Ordnungsökonomik" (economics of order), which sounds even creepier than "ordoliberalism". Eucken and Böhm edited the journal Ordo: Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft beginning in 1948.
In the post-Second World War era, ordoliberalism actually was a significant influence on the conservative concept of the "social market economy," a phrase identified with Ludwig Erhard, the first Economics Minister of the Federal Republic of Germany (West Germany) who also was a founder of the Walter Eucken Institut. Erhard was part of Merkel's Christian Democratic Union (CDU) party.
Ordoliberalism was also called "neoliberalism" in the postwar period. But today's neoliberalism, and the kind of present-day ordoliberalism with which Merkel identifies, seems to be considerably less concerned with any "social" element of the "social market economy" than most CDU leaders have been. The CDU still has a significant Catholic labor-union wing.
Carl Friedrich discussed the the ordoliberals in "The Political Thought of Neo-Liberalism" The American Political Science Review 49/2 (Jun. 1955). Referring in particular to a work by one of their leading German figures, Alexander Ristow, Ortsbestimmung der Gegenwart, Friedrich wrote:
There is a good deal of elitist thinking among these neo-liberals, with little appreciation of the role of the common man. Many of them - although not Ristow - confuse the common man with the mass man, in the manner of Ortega y Gasset. Although their idea of the constitution as the creative act of instituting the free market economy requires an elaboration of their image of man along democratic lines, showing that he is capable of much "common sense," they do not see democracy in this perspective. There is a general tendency to confuse constitutional democracy with the anarchic majoritarian democracy that the Jacobins read into Rousseau, and to see totalitarian dictatorship as its inescapable fruit. [my emphasis]
Now that sounds more like Angie's approach to democracy in Europe during this crisis!
The breaking news has already made Wolfgang Münchau's Dec. 5 column discussed below at tad dated. German Chancellor Angela Merkel met with her junior partner in the destruction of the European Union, French President Nicolas Sarkozy, and they are already fulfilling Münchau's prediction of a fatally flawed, lazy compromise. Based on the early reports, the "Merkozy" team agreed that private banks will not be asked to take any further losses on their eurozone debts except for those in Greece. And it's not clear from what I've seen whether that includes a guarantee to reckless banksters against taking further losses on Greek sovereign debt.
Münchau has been a tough critic of Angie's appalling mishandling of the European bank and sovereign debt crises. In France and Germany look set to fudge it yet againFinancial Times 12/05/2011, he looks at the prospects for a successful EU summit on Friday. He makes an important characterization of what Merkel is imposing for Germany's supposedly equal EU partners she apparently sees as satellite countries to Germany:
Contrary to what is being reported, Ms Merkel is not proposing a fiscal union. She is proposing an austerity club, a stability pact on steroids. The goal is to enforce life-long austerity, with balanced budget rules enshrined in every national constitution. She also proposes automatic sanctions with a judicially administered regime of compliance.
Once again, the purpose of the EU was to promote peace and democracy in Europe. For Merkel, its overriding purpose is to enforce the will of European business lobbies, with Germany acting as their main agent. In Italy and Greece, she and her Foreign Miniter Guido (Guido Westerwelle) have been making the proverbial offers that can't be refused, imposing governments in those two countries that are essentially debt-collection agencies for large European banks.
Wolfgang Münchau outlines the differences between the position taken by Angie and Guido (no European Central Bank [ECB] last-resort lending function, no eurobonds, an insistence that the EU - meaning Angie and Guido - have final control over national budgets), of French President Jacques Chirac (ECB as lender of last resort, eurobonds, no "fiscal union" of EU countries as advocated by Germany), and ECB head Mario Draghi (fiscal union based on austerity as demanded by Angie and Guido, then later maybe consider eurobonds and some for active role for the ECB).
Münchau expects the result at the summit to be yet another lazy compromise between France and Germany which can't solve the problem.
I suppose it will be only in retrospect that we will be able to identify the Game Over moment for the euro. It may have even been in late October, when the "Merkozy" duo first proposed the current failed remedy. But any chance for survival of the euro look slim at this point, and for the EU not much better. The end for the euro will presumably play out as some interacting combination of bank runs and sovereign defaults.
Münchau sees Herbert Hoover austerity economics as being the poison pill:
Of course, a fiscal union is not a quick fix. On the contrary, it may take 10 years, or even longer. The EU would once again have to set up a convention to make a proposal for a treaty change, to be followed by an inter-governmental conference. Some states would hold referendums with uncertain outcomes. There is no way the EU can agree on a fiscal union on Friday, and implement it on Monday. But it would be a big step if the European Council made a clear commitment for a multi-step, multi-year process.
European leaders understand the technical, and legal issues well. I am also certain that most understand that the eurozone faces an existential threat. But I doubt they have ever understood the economic and financial dynamics behind the crisis. Their narrative, which reduces the crisis to a failure of fiscal discipline, is probably the underlying reason why all their crisis resolution efforts have failed so far.
With five days to go, the world is waiting for a big political signal. What I fear is a fudge, consisting of a multi-annual fiscal retrenchment, no eurobond, at most a temporary debt redemption instrument. The ECB will provide liquidity measures to stabilise the financial sector, and it will also provide a backstop for the bond markets. But I find it hard to see how Mr Draghi can agree an unlimited guarantee in the absence of a political union and a eurobond. A strengthened stability pact is not a fiscal union. [my emphasis]
Italy’s government has come forward with an aggressive 30 billion euro austerity package to prevent the country’s bankruptcy and pave the way for the fiscal integration that German Chancellor Angela Merkel is pushing as the key to solving the European debt crisis. In the video below, Elsa Fornero, the Italian welfare minister, broke down in explaining the provisions to increase the pension age to 66. The package also increases taxes on housing, luxury items and via a 23 percent VAT, a measure Ireland is also taking. Approval is expected before Christmas.
And this is from a minister in a government whose only real purpose is to collect debts for big European banks by squeezing the Italian people as hard as possible!
This display of emotion on her part is in dramatic contrast to the adoration of austerity (for others) on the part of American political and media elites. Digby catches the New York Times editorial board advocating the abolition of Medicare in Premium LoserHullabaloo 12/04/2011. She comments:
I don't understand what world these people live in. Do these people honestly believe that the elderly, most of whom are already sick in one way or another or are destined to become so (after all, it's a rare person who stays perfectly healthy and then dies peacefully in his sleep at age 92) should be forced into a more complicated system than that which already exists? It's as if they are being accused of irresponsibly running up big bills and must be taught a lesson in prudence before they die.
I would love to know where this penchant for making the health care system even more complicated and unworkable comes from? And why does everyone have to be a "consumer?" We are citizens and human beings and when we get old we get sick, period. Making elderly people shop around in order to live is utter nonsense when we know that the only reason to do so is to keep our "privatized" system reaping profits every step of the way.
It's the abstraction in all these debates that drives me crazy. People, not statistics. Patients, not consumers. Yes, health care costs are high and are absorbing more and more of our GDP, but the sick people are not the problem. Getting sick can happen to anyone and getting old is something that will happen to everybody (if they're lucky). Treating being human as a problem is the problem. [my emphasis in bold]
The EU summit begins on Thursday, with the main action on Friday. It's likely to be an unpleasant week of EU drama.
Helmut Schmidt, who served as German Chancellor for the Social Democratic Party (SPD) 1974-82 and is now 92 years old, made a plea for European solidarity at the SPD Party Congress this weekend.
SPD-Parteitag.Schmidt warnt vor deutscher Kraftmeierei in EuropaSpiegel Online 04.12.2011. He criticized the nationalistic, domineering posturing that has characterized recent German policy in the EU over the euro crisis. He warned that Germany risked diplomatic isolation with that approach.
It's astonishing that current Chancellor Angela Merkel has created such a state of affairs, seeking to manage the EU like Leonid Brezhnev once managed the Warsaw Pact. Astonishing and disgraceful.
Greece's "post-democracy" government, to use Jürgen Habermas' serviceable term, is off to a rocky start just like that in Greece. Despite the three-party coalition that it formally represents (social democrats, conservatives, more-conservatives), the bankers' debt-collection government in Greece is plagued by partisan squabbling! Even among its own coalition partners!
Golly, who would have thought that democracy was so hard to get rid of?
What's next, Post-Democracy 2.0?
There are still protests, strikes. It appears that the 99% in Greece still have given up this quaint idea that the people should have a meaningful say in how their government works. For some reason hard for the minds of Very Serious People to fathom, they also don't seem enchanted with an indefinite future of impoverishing themselves and their country. Don't they know what a privelege it is for a silly, insignificant little country and an unimportant people like themselves to be a satellite state of Angela Merkel's Germany?
George Gilson explain how post-democratic Greece's bankers' government, Post-Democracy 1.0, works in Press Watch, Dec. 2Athens News 12/02/2011:
Absolute fiscal discipline and on-site Brussels-Berlin proxies to oversee every budgetary move is, by all accounts, the new eurozone plan, which probably will be unveiled by Angela Merkel in the German legislature today. That means, in short, you can wave bye-bye to the national power of the purse, the cornerstone of parliamentary democracy.
That is the new eurozone: you trade your sovereignty for security, with a leonine contract (where one party gets the lion’s share and the other the short end of the stick). But certainly it is not the security of the middle and working classes that is secured in fiscally strapped countries. They get brutal austerity, the total demolition of social welfare, and the elimination of labour rights earned with the hard struggles over a century.
Berlin is basically giving indebted countries an offer they cannot refuse. A comment by German Foreign Minister Guido Westerwelle (shown on Greek TV), at a November 29 conference attended by his Greek counterpart Stavros Dimas, made that plainly clear.
“If one country does not want to come with the other countries they will not have the possibility to block the other countries. Mr Dimas, what do you think of the offer?” Westerwelle asked with a strikingly imperious tone. “You cannot really disagree,” responded Dimas, somewhat taken aback.
But it is Greece’s deputy premier, Theodoros Pangalos, who takes the cake. He told a French-speaking TV station a few days ago that the two million Greek indignados who protested austerity were a mix of “communists, fascists and jerks”. He prefaced that wisdom by saying he would speak as simply as Charles de Gaulle! In fact, Pangalos is the namesake of his grandfather, a general who headed a dictatorship.
After he eventually gets kicked out of Greece, Mr. Dimas can have a promising future as a FOX News commentator.
A government of technocrats might seem like the neoliberal dream to bankers and to Big Thinkers like David Brooks who worship at the altar of High Broderism, where politics is dirty and distasteful.
But the idea also has its problems, as this story of the bankers'-debt-collector government of Italy headed by an unelected Prime Minister illustrates, Is Mario Monti's honeymoon over?Global Post 12/01/2011:
A tough and revered former European antitrust czar, [Prime Minister Mario] Monti was quick off the starting block. He took the oath of office on Nov. 16, two days earlier than originally scheduled. He presented his first austerity measures and called for his government’s first confidence vote — which he won by an overwhelming margin — four days ahead of plan.
The cabinet he named — of diplomats, private sector leaders, academics, and technocrats — was almost universally praised. Monti said Italians would be called on to sacrifice, but he promised the sacrifices would be spread evenly. Pollsters said the man, who had been teaching economics classes as Milan’s Bocconi University just a month ago, saw his approval levels surge to stratospheric levels.
But since then, things haven’t worked out according to plan.
It only took a few days for political bickering to restart:
Allies of the ousted Berlusconi threatened to pull their support for Monti’s government if it reinstated the so-called “wealth tax.” Berlusconi, a billionaire, had repealed it while in office.
The separatist Northern League, which had been a junior member of Berlusconi’s coalition, threatened to balk at a plan to let the children of immigrants born in Italy to become Italian citizens.
Center-left parliamentarians has begged Monti to delay raising the retirement age.
And political parties from both sides of the aisle have thrown up roadblocks, systematically stalling or blocking approval of mid-level appointees needed to run the government’s day-to-day operations.
The situation has gotten so bad that the European Union quickly dispatched observers to Rome to monitor it.
"It didn’t take long for Italy to return to being Italy," Mario Andrea Ventimiglia, a political scientist at the University of Puglia, told GlobalPost. "Monti's honeymoon seemed to last for about 15 minutes.”
Italy did have a government for a couple of decades last century that dispensed with all this electioneering and democratic politics nonsense while provided rallies and the occasional war to keep the public entertained. But it didn't work out so well, either.
Monti's government at least has their priorities straight, which is to serve as debt collectors for European banks:
So far, Monti’s technocratic, all-star cabinet has made it clear that paying down debt and jump-starting economic growth are far and away their main concerns. Even ministries usually far from the economic battlefields are on message: The Ministry of Environment wants to be sure environmental disasters do not stand in the way of industrial production, for example, and the Ministry of Culture wants to promote the country’s artistic and historic riches to attract more tourists while adding a fee to every hotel room stay.
Analysts say the new government might do even better by focusing on political stability - by easing parliamentary infighting, increasing public sector transparency, and passing difficult political reforms. These measures would increase chances that the next elected government would be stable enough to preserve and strengthen the country's democratic institutions.
Ah, yes, if we could just get rid of all that "parliamentary infighting" - especially from selfish 99-percenters piffling around over pensions and jobs and health care and nonsense like that - everything could be fine. And the government could "preserve and strengthen" the current "democratic institutions" which somehow allowed Germany and France to dictate to them that they would have to install a bankers' debt-collector government who doesn't give a flying flip about what those silly and irrelevant voters want.
This is what "post-democracy" (Jürgen Habermas) looks like in Italy and Greece: government with the bare forms of parliamentary democracy acting in fact as the agent of the European financial lobby.
Austria's Social Democratic Chancellor Werner Faymann went to Berlin today to kiss conservative German Chancellor Angela Merkel's ring.
Chancellors meet: Austria's Werner Faymann and Germany's Angela Merkel
If Faymann plans to offer even the slightest resistance to Merkel's determination to destroy the euro and the European Union by continuing with her already-disastrous of insisting that austerity economics is the solution to everything, it was scarcely apparent from this report, Kein Paukenschlag zur Lösung.Merkel stimmt auf langes Euro-Leiden einDer Standard 02.12.2011.
Faymann agreed with Angie's demand that the EU treaties to be changed, and apparently is fine with her vision of changing them only to impose automatic austerity implemented at the EU level (aka, by Germany), despite what national parliaments decide. The only hint of democratic resistance reported in that piece is that Faymann timidly suggested that if treaty changes require Austria to give up its sovereign authority over its national budget, well, geepers, we'd have to have a national referendum on that.
As former Greek Prime Minister Georgios Papandreou found out a few weeks ago, Angie's not big on all this having the people vote business when it comes to following orders from Berlin. The plan that Berlin and Paris are floating is for the eurozone countries to write into their constitutions a debt limit and give Germany the EU to power to implement sanctions against any country violating Germany's the EU's idea of how well their budgets fit the German EU approach to achieving those limits.
Angie says that the plans won't violate the sovereign authority of eurozone countries, so no referendum will be needed in Austria. Come to think of it, the Austrian government has had some disagreement before with Germany over a referendum, back in 1938. Somewhat like Angie did with the Greek government this year, Germany blocked that referendum and forced a change in the Austrian government, though by more drastic means than those applied to Athens this year.
Of course, Angie's proposal very well does drastically impinge on the sovereignty of eurozone countries over their own budgets. As another Standard report on the plan, Sarkozy und Merkel kündigen Rettungsplan an 01.12.2011 puts it, "Faktisch bedeutet dies die Aufgabe nationaler Vetorechte in der Haushaltspolitik" ("In fact, that means the surrender of national veto rights in budget policy"), i.e., national governments will not have the final say over their own national budgets. That is not the current arrangement and for Angie or Faymann to claim otherwise is just blowing smoke.
I haven't seen it reported that Faymann publicly agreed or disagreed with that position of Angie's on the referendum issue. Since the proposals presumably won't be formally presented until next week's EU summit, diplomatic fudging is a bit easier than it will be in a week or so.
Schulterschluss statt Anschluss
As Standard reports, Vienna and Berlin are seeking a Schulterschluss (united position) on their position for next week's EU summit. Meaning that Faymann is expected to do what Angie tells him. I suppose Schulterschluss is preferable to Anschluss. If the duly elected government of Austria is content to make the demands of the finance lobby as interpreted by Angie their first priority in economic policy, Angie won't have to go to the trouble of installing overt governments of debt collectors for the big banks, as she did in Greece and Italy.
APA also makes the Schulterschluss position prominent in their report on Faymann's position in support of Angie's EU-destroying policies: Faymann und Merkel für Schulterschluss in Krise 02.12.2011.
Socialist Chancellor Faymann has already pushing a "debt-brake" (Schuldenbremse) amendment to the Austrian constitution to fix Austria's borrowing at a set level of GDP, a Herbert Hooverish idea based in ideas discredited in the Heinrich Brüning era. It copies a similar measure Germany has enacted for itself. Faymann justifies it by saying, "Wenn wir uns selber ernst nehmen, werden uns auch die anderen ernst nehmen" ("If we take ourselves seriously, we will also take others seriously"), meaning, uh, what? That Serious Leaders in Europe jump when Angie snaps her fingers? Good grief!
It sounds like Austria's SPÖ (Social Democratic Party of Austria) is almost in as bad a need for internal transformation as the Democratic Party in the US. Maybe Laura Rudas will make a risky career move and take on the challenge.
German Chancellor Angela Merkel spoke to the German Bundestag, the lower House of Parliament on Friday about her solutions for the euro crisis, giving her position leading up to next week's EU summit, which is shaping up to be something like a wake for the European Union in advance of its formal demise.
Three things are needed to save the euro, if such a thing is still even possible: the European Central Bank (ECB) has to be the buyer of last resort for eurozone countries' sovereign debt; eurobonds, based ont he combined credit-worthiness of the eurozone as a whole; and, a fiscal union in the eurozone that would also function as a transfer union. The "transfer union" concept refers to a function like we have in the US, where the federal tax structure and national budget systematically transfers wealth from the wealthier states like California to the less wealthy states like Mississippi.
In her speech Friday, Angie rejected the first two and promoted a version of the third that would only make matters much worse: constitutionally imposed debt limits (debt brakes, the Germans call it) and authority ceded to the EU Commission (read: Germany) to impose sanctions on countries that fail to meet the EU's preferred austerity measures. Austerity economics has demonstrably failed in the eurozone, as Paul Krugman recounts in his excellent summary of the current crisis, Killing the EuroNew York Times 12/01/2011.
Awesome.
With European leadership like today's, we can all be happy there are no Austrian archdukes left for anyone to assassinate. Awesome, just awesome.
Jesús Ceberio writes about Angie's euro-and-iron policies in A bordo del Titánic (Aboard the Titanic) El País 22.11.2011:
La canciller alemana solo está dispuesta a patrocinar junto a Sarkozy, en la próxima cumbre europea del 9 de diciembre, una reforma de los tratados que profundice la unión fiscal de la eurozona, esto es, la creación de un órgano con capacidad de supervisar previamente los presupuestos nacionales e imponer sanciones a los infractores. Las democracias modernas se edificaron sobre la máxima anglosajona de que :"sin representación no hay impuestos". Será interesante verificar cómo se cumple este principio en la propuesta germano-francesa. Cualquier fórmula que consagre una burocracia no sometida a control parlamentario sería un intolerable retroceso democrático.
[The German Chancellor is only prepared to sponsor, together with {French President Nicolas} Sarkozy in the next European summit of December 9, a reform of the {EU} treaties that would deepen the fiscal union of the eurozone, that is, the creation of a organ with the authority for prior supervision of the national budgets and impose sanctions on those who commit infractions. Modern democracies were built on the Anglo-Saxon maxim, "no taxation without representation". It will be interesting to see how the German-French proposal complies with this proposition. Any formula that sanctifies a bureacracy not subject to parliamentary control would be an intolerable regression of democracy. {my emphasis}]
The newly-elected Prime Minister of Spain, Mariano Rajoy of the conservative Partido Popular (PP), currently waiting to assume his new office, is eager to show his subservience to Berlin, promising "a cumplir con el objetivo del déficit por encima de todo" (to comply with the deficit target above everything), as the Maria Dolores de Cospedal, second in the hierarchy of the PP, declared. (Rajoy ya pide ayuda a Merkel: compras del BCE y España en el 'núcleo duro'El País 01.12.2011)
That would be the deficit target demanded by Merkel and her junior partner in the destruction of the European Union, French President Nicolas Sarkozy. Seeing how the austerity measures have visibly and disastrously failed to solve the debt problem in Greece, Ireland, Portugal and Spain so far, Angie wants the new Spanish government to double-down on austerity policies. Rajoy is only too happy to comply. He at least has more democratic legitimacy for his subservience to Berlin than the debt-collector governments of Greece and Italy. He campaigned on austerity and the PP won a clear majority in Parliament. The Spanish voters can look forward to getting what they voted for. And, yes, it does promise to be worse than the disastrous austerity measures foolishly adopted by the outgoing Socialist government.
But the story is almost the opposite. European Central Bank (ECB) head Mario Draghi says he supports two of the three things necessary to save the euro, if such a feat is still possible: eurobonds and more fiscal integration of the eurozone. Apparently if one squeezes the turnip really hard, a bit of liquid appears relating to the third critical part, the ECB acting as buyer of last resort of eurozone sovereign debt. But the liquid looks more like water than blood:
But Draghi also seemed to hint at a possible way out of the downward spiral, saying that the ECB could be prepared to take additional steps to halt the crisis. First, however, Europe needed to move quickly toward greater economic integration.
"Other elements might follow," he said, in reference to the coordinated central banks' action taken on Wednesday. "But the sequencing matters." He added that "a new fiscal compact would be the most important signal from euro-area governments for embarking on a path of comprehensive deepening of economic integration."
Draghi did not outline what kind of action the ECB might take, but he said that one reason the ECB had not embarked on the kind of massive bond-buying spree that many have called for is the concern that it would remove pressure on heavily indebted euro-zone nations to implement strict austerity programs. [my emphasis]
To me, this is another stake in the heart of the euro this week. (Excuse the bloody metaphors; I said it was a bit morbid!) The first was the plan floated by the French for a fiscal-union agreement that would require balanced budgets in all eurozone countries by 2016.
Austerity economics is killing the euro because it's battering European economies, and the US economy, too. The EU and the eurozone face four crises, more-or-less in time-sequence order: a bank crisis, a shortage of investment due to the depression, a sovereign debt crisis, and a crisis of confidence in democracy resulting from the atrocious way France and Germany in particular have insisted on handling the other crises.
The democracy crisis is actually the one that concerns me the most. Italy and Greece are now governed by regimes that for all intents and purposes were forced on them by German and French banks via their subservient national governments and the EU. To quote again from Jürgen Habermas:
Habermas refers to the system that Merkel and Sarkozy have established during the crisis as a "post-democracy." The European Parliament barely has any influence. The European Commission has "an odd, suspended position," without really being responsible for what it does. Most importantly, however, he points to the European Council, which was given a central role in the Lisbon Treaty -- one that Habermas views as an "anomaly." He sees the Council as a "governmental body that engages in politics without being authorized to do so."
He sees a Europe in which states are driven by the markets, in which the EU exerts massive influence on the formation of new governments in Italy and Greece, and in which what he so passionately defends and loves about Europe has been simply turned on its head. [my emphasis]
Greater fiscal union would be needed to save the euro. But a fiscal union that locks in suicidal austerity economics will kill the euro, too, probably along with democracy in some of the current EU countries. We shouldn't underestimate the seriousness of Italy and Greece each being run by what Jamie Galbraith (The crisis in the eurozoneSalon 11/10/2011) described with particular reference to Greece as "a junta of creditors' deputies". The fact that proper legal forms were technically observed in installing those governments is comparable to Bismarck and Kaiser Wilhelm I technically being required to get Parliamentary approval for their military budgets, i.e., more pantomime than substance. Galbraith also notes:
Underpinning banker power in Creditor Europe is a Calvinist sensibility that has turned surpluses into a sign of virtue and deficits into a mark of vice, while fetishizing deregulation, privatization and market-driven adjustment.
I wish we could apply Karl Kraus' Vienna aphorism to this: "The situation is hopeless but not serious." But this one really is serious.
I've seriously started to wonder how much German Chancellor Angela Merkel's statecraft is shaped by her first 35 years, which were spent in Communist East Germany (DDR, from its German initials).
I'm serious about that. Not that anyone would mistake her for a Communist. But in terms of the raw power-politics of the DDR and the Eastern bloc, her attitude toward Germany's role in the European Union and the eurozone as shown in the euro crisis could be modeled on the role the Soviet Union played in the Warsaw Pact, where the countries were theoretically equal but actually were expected to take order from the USSR or suffer the consequences.
No German soldiers have rolled into Athens or Rome as the DDR's did in Prague in 1968 as part of the Warsaw Pact intervention. But Angie managed to impose governments on both, though these are expected to act on behalf of the financial lobby instead of nominally on behalf of the workers and farmers like by in the old days of the DDR.
Stephen Walt has some important historical observations in reference to the Arab Awakening in Requiem for the "Arab Spring?"Foreign Policy 11/28/2011. The piece is a very good read, focused on the need "to recognize that radical reform -- even revolution -- is a long, difficult, and uncertain process, and that the ride is likely to be a bumpy one for years to come."
He makes this very important observation:
But if the history of revolutions tells us anything, it is that rebuilding new political orders is a protracted, difficult, and unpredictable process, and having a few Mandelas around is no guarantee of success. Why? Because once the existing political order has collapsed, the stakes for key groups in society rise dramatically. The creation of new institutions -- in effect, the development of new rules for ordering political life -- inevitably creates new winners and losers. And everyone knows this. Not only does this situation encourage more and more groups to join the process of political struggle, but awareness that high stakes are involved also gives them incentives to use more extreme means, including violence.
Under these conditions, it is a pipedream to think that key actors in a complex and troubled society like Egypt or Libya (or in the future, Syria) could quickly agree on new political institutions and infuse them with legitimacy. Even if interim rulers write a quick constitution, hold a referendum, or elect new representatives, those whose interests are undermined by the outcomes are bound to question the new rules and the process and to do what they can to undermine or amend them. What one should expect, therefore, are half-measures, false starts, prolonged uncertainty, and highly contingent events, where seemingly random events (a riot, an accident, an episode of overt foreign interference, an unexpected flurry of violence, etc.) can alter the course of events in far-reaching ways. Tunisia notwithstanding, what you are unlikely to get is a quick and easy consensus on new institutions. [emphasis in original]
I'm a Jacksonian Democrat - as in Andy Jackson don't-let-the-bankers-and-secessionists-take-over Democrat. Also a lifelong political junkie. One of my longtime interests has been the interaction betwee politics and religion, and I'll be doing quite a few posts on that here. I'm originally from Mississippi and have lived for years in California. So your likely to hear both Southern and West Coast references in my posts.
