This PBS report on the EU summit just concluded (What Would Debt Deal Mean for Euro, European Union, U.K. 12/09/2011) focuses on Britain's role, typical of much of US reporting on Europe. The Anglo-centric view doesn't give a good understanding of the problem the EU and the eurozone face.
This report on the basic news about the deal (European Leaders Agree to Closer Financial Ties, but Cameron Holds out 12/09/2011) shares the same weakness:
Tags: eu, euro, european union
Saturday, December 10, 2011
Bundesbank President Jens Weidmann defends Angie's Ordnungsökonomik austerity policies
Jens Weidmann is head of the German central bank, the Bundesbank, appointed by Princess Angie von Merkel. So far, he is giving full-throated support to Merkel's one-percenter Ordnungsökonomik austerity policies. He has explicitly opposed two of the critical financial elements of a real solution to the euro crisis: the European Central Bank (ECB) as lender of last resort for sovereign debt and eurobonds. His position as head of Germany's central bank gives his opinions great weight on the ECB, on whose governance board he also serves.
He has given a post-summit interview to the Frankfurter Allgemeine Zeitung (FAZ) giving his interpretation of the results of the EU Summit: Bundesbankpräsident. Weidmann lobt Gipfel-Beschlüsse 10.12.2011. He celebrates the fact that the EU-minus-Britain's solution also omits the third essential element of what would be necessary to save the euro, if such a thing is still remotely possible, a fiscal and "transfer" union, i.e., a united eurozone fiscal policy which would include systematic transfers of funds from the wealthier to less wealthy countries, similar to how the US tax system transfers funds from wealthier to less wealthy US states.
The democratic legitimacy of the European Union and its institutions is disappearing at an astonishing rate. For Greece and Italy, rejecting the "post-democracy" (Jürgen Habermas) Angie's EU imposed on them and returning to full parliamentary democracy will mean leaving the eurozone and the EU. Protecting democracy for the rest of the EU members besides Germany will also mean the same, unless the EU could be completely refounded with meaningful limits on Germany's ability to dictate political outcomes. But since it took a lifetime to establish the current EU and refounding it on more secure democratic principles would require statesmanship of the highest order - of which there is a screaming deficiency in Europe right now - such a short-range result is all but unthinkable.
The EU-minus-one agreement calls for a rigid adherence to a maximum of 3% budget deficit by all EU-minus-one countries. The treaty language itself yet on the table. But the agreement calls for automatic sanctions (not yet specified) for what in German are called Defizitsünder ("deficit sinners"), itself an indication of the mindless Calvinist moralism of such a foolish requirement.
The 3% requirement has always been there since the Maastricht Treaty that formally founded the EU. And has always been an arbitrary piece of "hard money" dogma that would be disastrous if imposed during recessions, and more especially during a depression like the current one. It has often been observed in the breach, with EU heavyweight states like Germany and France violating it with no negative consequences, either economically or in terms of EU penalties.
The new agreement would make penalties for violating the 3% rule supposedly automatic, in that they could only be foregone if the deficit-sinner country could persuade a majority of the European Council to vote against sanctions. Currently, penalties can only be imposed if a majority of the Council votes for them. The theory is that it's been relatively easy to block a majority vote in favor, but will be much harder to get a majority voting to make a special exemption to the sanctions. (27 - 1 = das neue Europa?/Welche Strafen drohen Defizitsündern? Süddeutsche Zeitung 09.12.2011
The EU-minus-one agreement, which was essentially dictated by Angie's government in Berlin, also assigns the European Court of Justice the right to review national governments' budgets to determine whether they meet the EU-minus-one standards for the amount of debt that would be required to finance their annual budgets. This is a related but distinct requirement to the annual budget deficit limits, Related because deficits drive borrowing needs. Presumably the Court's decision would either trigger or directly impose sanctions, which could only be overridden by the Council's majority vote.
What does all this mean for individual member states of the EU-minus-one? In one sense, it's still all hypothetical, since the actual new treaty language isn't yet available. How it may conflict with constitutional provisions of individual countries will have 26 different answers, one for each of the EU-minus-one states.
But the practical effect is painfully obvious. In the newly Germanized, Angiefied EU-minus-one, Germany will call the shots for the basic budget and fiscal policies in each individual country. If Germany wants a waiver on the deficit or debt requirements for its own national budget, Berlin can easily apply diplomatic and economic pressure to swing a majority of the Council for the waiver. Everyone else? It depends on what you can work out with Princess Angie von Merkel.
Given the effective control this hands Germany and its banksters over the economic and political decisions of the EU-minus-one countries, why would 26 countries sign on to such a proposal? Given how the euro crisis has played out the last two years, corruption (legal and otherwise) by the financial and other business lobbyists has to count as a major factor. Zombie-like ideological commitment to Herbert Hoover economics, a sad phenomenon on both sides of the Atlantic, also has its effects. John Kenneth Galbraith's reflections on the stupidity problem in Europe circa 1914 is worth remembering in this context, though today ossified political parties rather than royal dynasties are the institutions generating it, and the immediate threat a deepening and lengthening of the depression rather than war:
It's telling that after Britain's Prime Minister David Cameron balked at Angie's demands early Friday morning, initially three non-eurozone countries also expressed reservations - the Czech Republic, Hungary and Sweden - at least one of them citing the solemn need to consult with their parliaments. A few hours later, presumably after intensive parliamentary consultation, they were ready to sign on to Angie's Ordnungsökonomik über alles proposals.
Tactically, it makes sense. Britain, one of the three heavy-weight countries of the EU along with Germany and France, was walking on the negotiations. The fact that Cameron's action was a major step toward ending the EU as it currently exists was obvious to all. Let Britain be the bad guy for the moment. Everybody else gets to be "good Europeans" - even though that means obedient subject of Princess Angie von Merkel for the moment.
And some country is going to default on their debt, sooner rather than later, Italy and Greece seemingly to be the mostly likely candidates at present. And they will leave the EU when they do. And then everyone else can start bailing out with a more credible diplomatic claim that it wasn't us that torpedoed the European project.
Not exactly courageous statesmanship, not by a long shot. And it shows a pathetic unwillingness to call Angie out on her abandonment of the democratic fundamentals of the EU. But at least it makes tactical sense.
Somehow, that's a bit more comforting than thinking all of Europe is caught in 1914 mode, driving toward a cliff with the pedal to the medal.
Tags: angela merkel, eu, euro, european union, john kenneth galbraith
He has given a post-summit interview to the Frankfurter Allgemeine Zeitung (FAZ) giving his interpretation of the results of the EU Summit: Bundesbankpräsident. Weidmann lobt Gipfel-Beschlüsse 10.12.2011. He celebrates the fact that the EU-minus-Britain's solution also omits the third essential element of what would be necessary to save the euro, if such a thing is still remotely possible, a fiscal and "transfer" union, i.e., a united eurozone fiscal policy which would include systematic transfers of funds from the wealthier to less wealthy countries, similar to how the US tax system transfers funds from wealthier to less wealthy US states.
Die Staats- und Regierungschefs haben sich auf einen Fiskalpakt verständigt, nicht auf eine Fiskalunion. Die nationale Souveränität in Haushaltsfragen bleibt im Kern erhalten, direkte Eingriffsmöglichkeiten in nationale Haushalte hat der Gipfel nicht vorgesehen. In diesem Ordnungsrahmen würden Eurobonds die grundlegenden Probleme der Staatsschuldenkrise nicht lösen, sondern verschärfen. Sie würden die notwendigen Anreize für eine solide Finanzpolitik entscheidend untergraben.It's disingenuous and dissembling for him to claim that the EU-minus-one agreement rejects "direct possibilities of intervention in national budgets". Diplomatically, Merkel is minimizing the loss of national sovereignty over budgets involved in her latest austerity straightjacket for not just the eurozone but the whole EU-minus-one. Angie doesn't like referendums, and claiming there is no loss of sovereignty is her diplomatic fig-leaf for insisting that lesser nations like Austria and Ireland don't get uppity on her and hold national referendums on whether they should surrender the key fiscal policy decisions for their countries to Angie. Angie overthrew the Greek government when former Prime Minister Georgious Papandreou, himself all but totally a servant of the one-percenter lobbies despite being nominally a Socialist, insisted on having a referendum over the failed results of Angie's previous round of demands on Greece, replacing it with a government of creditors' collection agents.
The heads of state and government have agreed on a fiscal pact, not on a fiscal union. The national sovereignty in budget matter is retained in essence [literally, in its core], the summit did not foresee direct possibilities of intervention in national budgets. Within this set of rules [literally, in this area of order], eurobonds would not solve the problems of the sovereign debt crisis, but rather intensify them. The would undermine decisively the necessary incentives for a solid financial policy.] [my emphasis]
The democratic legitimacy of the European Union and its institutions is disappearing at an astonishing rate. For Greece and Italy, rejecting the "post-democracy" (Jürgen Habermas) Angie's EU imposed on them and returning to full parliamentary democracy will mean leaving the eurozone and the EU. Protecting democracy for the rest of the EU members besides Germany will also mean the same, unless the EU could be completely refounded with meaningful limits on Germany's ability to dictate political outcomes. But since it took a lifetime to establish the current EU and refounding it on more secure democratic principles would require statesmanship of the highest order - of which there is a screaming deficiency in Europe right now - such a short-range result is all but unthinkable.
The EU-minus-one agreement calls for a rigid adherence to a maximum of 3% budget deficit by all EU-minus-one countries. The treaty language itself yet on the table. But the agreement calls for automatic sanctions (not yet specified) for what in German are called Defizitsünder ("deficit sinners"), itself an indication of the mindless Calvinist moralism of such a foolish requirement.
The 3% requirement has always been there since the Maastricht Treaty that formally founded the EU. And has always been an arbitrary piece of "hard money" dogma that would be disastrous if imposed during recessions, and more especially during a depression like the current one. It has often been observed in the breach, with EU heavyweight states like Germany and France violating it with no negative consequences, either economically or in terms of EU penalties.
The new agreement would make penalties for violating the 3% rule supposedly automatic, in that they could only be foregone if the deficit-sinner country could persuade a majority of the European Council to vote against sanctions. Currently, penalties can only be imposed if a majority of the Council votes for them. The theory is that it's been relatively easy to block a majority vote in favor, but will be much harder to get a majority voting to make a special exemption to the sanctions. (27 - 1 = das neue Europa?/Welche Strafen drohen Defizitsündern? Süddeutsche Zeitung 09.12.2011
The EU-minus-one agreement, which was essentially dictated by Angie's government in Berlin, also assigns the European Court of Justice the right to review national governments' budgets to determine whether they meet the EU-minus-one standards for the amount of debt that would be required to finance their annual budgets. This is a related but distinct requirement to the annual budget deficit limits, Related because deficits drive borrowing needs. Presumably the Court's decision would either trigger or directly impose sanctions, which could only be overridden by the Council's majority vote.
What does all this mean for individual member states of the EU-minus-one? In one sense, it's still all hypothetical, since the actual new treaty language isn't yet available. How it may conflict with constitutional provisions of individual countries will have 26 different answers, one for each of the EU-minus-one states.
But the practical effect is painfully obvious. In the newly Germanized, Angiefied EU-minus-one, Germany will call the shots for the basic budget and fiscal policies in each individual country. If Germany wants a waiver on the deficit or debt requirements for its own national budget, Berlin can easily apply diplomatic and economic pressure to swing a majority of the Council for the waiver. Everyone else? It depends on what you can work out with Princess Angie von Merkel.
Given the effective control this hands Germany and its banksters over the economic and political decisions of the EU-minus-one countries, why would 26 countries sign on to such a proposal? Given how the euro crisis has played out the last two years, corruption (legal and otherwise) by the financial and other business lobbyists has to count as a major factor. Zombie-like ideological commitment to Herbert Hoover economics, a sad phenomenon on both sides of the Atlantic, also has its effects. John Kenneth Galbraith's reflections on the stupidity problem in Europe circa 1914 is worth remembering in this context, though today ossified political parties rather than royal dynasties are the institutions generating it, and the immediate threat a deepening and lengthening of the depression rather than war:
There was a final consideration, one that it is always thought a trifle pretentious to stress. Rulers in Germany and Eastern Europe, generals in all countries, held their jobs by right of family and tradition. If inheritance qualifies one for office, intelligence cannot be a requirement. Nor is its absence likely to be a disqualification. On the contrary, intelligence is a threat to those who do not possess it, and there is a strong case, therefore, for excluding those who do possess it. This was the tendency in 1914. In consequence, both the rulers and the generals in World War I were singularly brainless men.But on a more tactical level, there's an advantage to everyone in the to let another country go first, a kind of reverse "prisoner's dilemma" that momentarily is working to Merkel's benefit.
None was capable of thought on what war would mean for his class - for the social order that was so greatly in his favor. There had always been wars. Rulers had been obliterated. The ruling classes had always survived. To the extent that there was thought on the social consequences of war, this was what was believed. (The Age of Uncertainty, 1977)
It's telling that after Britain's Prime Minister David Cameron balked at Angie's demands early Friday morning, initially three non-eurozone countries also expressed reservations - the Czech Republic, Hungary and Sweden - at least one of them citing the solemn need to consult with their parliaments. A few hours later, presumably after intensive parliamentary consultation, they were ready to sign on to Angie's Ordnungsökonomik über alles proposals.
Tactically, it makes sense. Britain, one of the three heavy-weight countries of the EU along with Germany and France, was walking on the negotiations. The fact that Cameron's action was a major step toward ending the EU as it currently exists was obvious to all. Let Britain be the bad guy for the moment. Everybody else gets to be "good Europeans" - even though that means obedient subject of Princess Angie von Merkel for the moment.
And some country is going to default on their debt, sooner rather than later, Italy and Greece seemingly to be the mostly likely candidates at present. And they will leave the EU when they do. And then everyone else can start bailing out with a more credible diplomatic claim that it wasn't us that torpedoed the European project.
Not exactly courageous statesmanship, not by a long shot. And it shows a pathetic unwillingness to call Angie out on her abandonment of the democratic fundamentals of the EU. But at least it makes tactical sense.
Somehow, that's a bit more comforting than thinking all of Europe is caught in 1914 mode, driving toward a cliff with the pedal to the medal.
Tags: angela merkel, eu, euro, european union, john kenneth galbraith
Friday, December 09, 2011
More on Cameron vs. Europe
John McDermott (Is this enough to save the eurozone? FT Alphaville 12/07/2011) points out one of the problems in Angela Merkel's EU-minus-one plan for imposing German supervision and austerity economics on the eurozone countries, which is doubts about whether the EU institutions themselves can be used to enforce treaty provisions not agreed to by every one of the EU members:
As Nicholas Watt reports (Eurozone countries go it alone with new treaty that excludes Britain Guardian 12/09/2011, Cameron is saying he will try to block the other EU members from using EU institutions from implementing the Merkozy Treaty:
At any rate, the UK has blocked any new treaty for all 27 EU member countries, reportedly over its demand that the City be exempt from further Brussels financial regulation stemming from the new arrangements. Eurosceptics will be pleased but others will argue that Cameron runs the risk of missing the larger, more immediate threat to the UK economy, and – perversely – losing British influence in the areas where it is most required. In any case, it looks like a high watermark for UK involvement in the European Union.And what British Prime Minister is saying publicly is not just that he's bowing out of participating in the "Merkozy" austerity treaty that the other 26 countries at the EU summit just agreed on.
It’s unclear yet what legal status the new 17+ group enjoys, and to what extent it can use EU institutions. To this observer, although the ECJ will be given new powers, it seems that without a new treaty we'’re left with little more than another Stability and Growth Pact.
As Nicholas Watt reports (Eurozone countries go it alone with new treaty that excludes Britain Guardian 12/09/2011, Cameron is saying he will try to block the other EU members from using EU institutions from implementing the Merkozy Treaty:
Cameron acknowledged there were risks in striking out alone. But he said Britain would protect its position by insisting that the institutions of the EU could not be used to enforce the new fiscal rules.Tags: britain, david cameron, eu, european union
"While there were always dangers of agreeing a treaty within a treaty, there are also risks with others going off and forming a separate treaty. So we will insist that the EU institutions – the court, the commission – that they work for all 27 nations of the EU. Indeed those institutions are established by the treaty and that treaty is still protected."
Cameron indicated that Britain may go further and block the use of EU institutions if eurozone countries club together to shape financial regulations and labour laws.
The decision by Cameron will transform Britain's relations within the EU. Other projects, such as the euro and the creation of the passport-free Schengen travel area, have gone ahead without British involvement. But it is the first time since Britain joined in 1973 that a treaty that strikes at the heart of the workings of the EU will be agreed without a British signature. Britain signed the 1991 Maastricht treaty after winning an opt-out on the single currency and the social chapter. [my emphasis]
EU Summit
The latest EU Summit is over. Twenty-six of the 27 EU nations have agreed to make a new treaty outside the main EU one, which is called the Lisbon Treaty, to institutionalize austerity economics in their constitutions. In the middle of the worst economic period since the Great Depression.
Oh, and Britain balked at the treaty change.
This will not solve the euro's problems. Britain's refusal to go along is another big step toward the dissolution of the EU as it currently exists. The latest summit outcome is a prescription for accelerating the budding recession in Europe, aggravating the sovereign debt crisis, bringing down several of Europe's already-weak large banks, and sweeping away decades of patient diplomatic work to build peaceful and stable relations among European nations.
Other than that, Mrs. Lincoln, how did you like the play?
The stock markets didn't seem to be much perturbed on Friday, for whatever that's worth. European stocks went up, and as of this writing the Dow Jones looks on track to regain its losses of Thursday.
But however the stock market processes things on a given day, this is bad news, politically and economically. Europe's latest solution for the euro and banking crisis there is to double-down on austerity economics. Continue doing what's turned an easily-manageable debt crisis in Greece to a existential crisis for the European Union and a real threat of another global financial meltdown. And no way does the latest deal create a firewall for the United States against Europe's economic and banking problems.
A world on Britain's balking. What British Prime Minister David Cameron refused to do in the wee hours of Friday morning was to agree to the EU Treaty change that Princess Angie von Merkel was demanding. If the blankety-blank neocons hadn't spoiled the word "objectively" for a generation or more, I might say that objectively it's not a bad thing that Britain is well down the road to splitting off from the EU completely.
But politics is politics, so it's much more complicated that that. In terms of the real purpose of the EU - to promote peace and democracy and cooperation among nations in Europe - Britain should have been a full partner in the EU. Given economics grow rates in the rising BRIC nations (Brazil, Russia, India, China) and demographic trends in the BRICs and the rest of the world, without an effectively unified European Union, Europe and its individual countries will be minor players, bit players even, in world affairs during the 21st century. Britain cutting itself loose from the EU - which is what's happening with this latest move - means that in foreign policy they are choosing to be a permanent appendage to the United States in foreign policy.
On the other hand, as long as Britain's political class seems completely locked in to Britain's being a permanent appendage to the United States in foreign policy anyway, and the US' global dominance foreign policy strategy inclines the US to favor a weak EU, achieving a politically unified EU with a common EU foreign policy would require forming a revised EU without Britain's presence. In that sense, Britain's own distancing itself from the EU is not a bad thing from the viewpoint of the EU project.
But today's EU leaders, especially Germany's Angela Merkel and France's Nicolas Sarkozy, have effectively made the political and foreign policy goals of the EU project secondary or tertiary themes. The "Merkozy" duo are turning the EU into an enforcement mechanism for neoliberal economics, to which even democracy has to be sacrificed, as we see in Post-Democracy 1.0 in Greece and Italy right now.
British Prime Minister David Cameron has been an anti-Europe jackass in his actions this week. He is pandering to the nationalism of the strong anti-Europe of his Conservative Party. And, of course, to the British financial lobby, commonly referred to as "the City of London" or just "The City," similar to how "Wall Street" stands for the US financial lobby. Dany Cohn-Bendit, head of the Green Party caucus in the European Parliament, says, "Cameron is a coward" for not facing up to the anti-Europe Tories.
We could say that it's a smart move on his part not to agree to writing arbitrary budget deficit and debt restrictions into a binding international treaty. But here's where we would have to say "objectively". Because Cameron is as committed to foolish austerity economics as Angie and Nick are. Cameron is using a disaster capitalism/shock doctrine approach in Britain, using the depression as an excuse to achieve neoliberal goals of deregulation and dismantling of the parts of the government that particularly benefit the 99%. And he was very public about poking the other EU leaders in the eye, declaring in Bushian style, "I said before I came to Brussels that if I couldn't get adequate safeguards for Britain in a new European treaty then I wouldn't agree to it. What is on offer isn't in Britain's interests so I didn't agree to it."
On the other hand, since the EU is obviously on the fast track to self-destruction, why shouldn't Cameron score some cheap political points with posturing against it? The real question is which will be the first eurozone country to tell Angie to take her Ordnungsökonomik and her austerity treaties and go jump in a lake somewhere.
Tags: britain, david cameron, eu, european union
Oh, and Britain balked at the treaty change.
This will not solve the euro's problems. Britain's refusal to go along is another big step toward the dissolution of the EU as it currently exists. The latest summit outcome is a prescription for accelerating the budding recession in Europe, aggravating the sovereign debt crisis, bringing down several of Europe's already-weak large banks, and sweeping away decades of patient diplomatic work to build peaceful and stable relations among European nations.
Other than that, Mrs. Lincoln, how did you like the play?
The stock markets didn't seem to be much perturbed on Friday, for whatever that's worth. European stocks went up, and as of this writing the Dow Jones looks on track to regain its losses of Thursday.
But however the stock market processes things on a given day, this is bad news, politically and economically. Europe's latest solution for the euro and banking crisis there is to double-down on austerity economics. Continue doing what's turned an easily-manageable debt crisis in Greece to a existential crisis for the European Union and a real threat of another global financial meltdown. And no way does the latest deal create a firewall for the United States against Europe's economic and banking problems.
A world on Britain's balking. What British Prime Minister David Cameron refused to do in the wee hours of Friday morning was to agree to the EU Treaty change that Princess Angie von Merkel was demanding. If the blankety-blank neocons hadn't spoiled the word "objectively" for a generation or more, I might say that objectively it's not a bad thing that Britain is well down the road to splitting off from the EU completely.
But politics is politics, so it's much more complicated that that. In terms of the real purpose of the EU - to promote peace and democracy and cooperation among nations in Europe - Britain should have been a full partner in the EU. Given economics grow rates in the rising BRIC nations (Brazil, Russia, India, China) and demographic trends in the BRICs and the rest of the world, without an effectively unified European Union, Europe and its individual countries will be minor players, bit players even, in world affairs during the 21st century. Britain cutting itself loose from the EU - which is what's happening with this latest move - means that in foreign policy they are choosing to be a permanent appendage to the United States in foreign policy.
On the other hand, as long as Britain's political class seems completely locked in to Britain's being a permanent appendage to the United States in foreign policy anyway, and the US' global dominance foreign policy strategy inclines the US to favor a weak EU, achieving a politically unified EU with a common EU foreign policy would require forming a revised EU without Britain's presence. In that sense, Britain's own distancing itself from the EU is not a bad thing from the viewpoint of the EU project.
But today's EU leaders, especially Germany's Angela Merkel and France's Nicolas Sarkozy, have effectively made the political and foreign policy goals of the EU project secondary or tertiary themes. The "Merkozy" duo are turning the EU into an enforcement mechanism for neoliberal economics, to which even democracy has to be sacrificed, as we see in Post-Democracy 1.0 in Greece and Italy right now.
British Prime Minister David Cameron has been an anti-Europe jackass in his actions this week. He is pandering to the nationalism of the strong anti-Europe of his Conservative Party. And, of course, to the British financial lobby, commonly referred to as "the City of London" or just "The City," similar to how "Wall Street" stands for the US financial lobby. Dany Cohn-Bendit, head of the Green Party caucus in the European Parliament, says, "Cameron is a coward" for not facing up to the anti-Europe Tories.
We could say that it's a smart move on his part not to agree to writing arbitrary budget deficit and debt restrictions into a binding international treaty. But here's where we would have to say "objectively". Because Cameron is as committed to foolish austerity economics as Angie and Nick are. Cameron is using a disaster capitalism/shock doctrine approach in Britain, using the depression as an excuse to achieve neoliberal goals of deregulation and dismantling of the parts of the government that particularly benefit the 99%. And he was very public about poking the other EU leaders in the eye, declaring in Bushian style, "I said before I came to Brussels that if I couldn't get adequate safeguards for Britain in a new European treaty then I wouldn't agree to it. What is on offer isn't in Britain's interests so I didn't agree to it."
On the other hand, since the EU is obviously on the fast track to self-destruction, why shouldn't Cameron score some cheap political points with posturing against it? The real question is which will be the first eurozone country to tell Angie to take her Ordnungsökonomik and her austerity treaties and go jump in a lake somewhere.
Tags: britain, david cameron, eu, european union
Thursday, December 08, 2011
More on Obama at Osawatomie; also, Geithner in Europe
President Obama's speech at Osawatomie Tuesday and the aftermath shows a typical Obama pattern. Lots of sensible and progressive-sounding phrases, which he pepper-sprays in the speech itself by talking bipartisan drivel, then followed by kicking the Democratic base in some way.
Cenk Uygur on The Young Turks of 12/07/2011 had a withering analysis of Obama's Osawatomie speech, focusing on the contrast between his progressive words and his often conservative, one-percenter policies.
This whiny nonsense about how, golly gee, the President just doesn't have much power to do stuff is not really compatable with an attempt to cast Obama as a ferocious advocate for the 99%. Here's White House spokesman Jay Carney doing a version of that routine:
Part of the Obama routine is to also say nice things that sound good to his Democratic base, then go out and whack the base in some way. We saw the same patte this week: Digby, Postpartisan depression: The Democrats join the War On Women Hullabaloo 12/07/2011; Charles Pierce, A Lesson for Kathleen Sebelius Regarding the Pill Esquire Politics Blog 12/07/2011.
Eric Rauchway (TR? Obama's more like Taft Politico 12/07/2011) takes issue with the White House's efforts to use his Tuesday speech to identify Obama with Republican Progressive President Theodore Roosevelt (though certainly not with John "Osawatomie" Brown!):
See also Reuters U.S. has great interest in strengthening euro zone: Geithner 12/08/2011. A euro collapse would take down some large European banks, if they don't go down first, in turn exacerbating the eruozone crisis in Europe by their collapse.
But the Obama Administration prescription for Europe is to keep bleeding the patient with austerity economics. The Obama Administration is very aware that a European financial system crisis - which is unfolding already - could have huge negative effects on the US economy. Speaking of which, here a quick report on the state of European banks from Reuters:
Yet the Obama Administration's program for Europe is the same as it is for the US: austerity economics:
Tags: austerity economics, barack obama
Cenk Uygur on The Young Turks of 12/07/2011 had a withering analysis of Obama's Osawatomie speech, focusing on the contrast between his progressive words and his often conservative, one-percenter policies.
This whiny nonsense about how, golly gee, the President just doesn't have much power to do stuff is not really compatable with an attempt to cast Obama as a ferocious advocate for the 99%. Here's White House spokesman Jay Carney doing a version of that routine:
Part of the Obama routine is to also say nice things that sound good to his Democratic base, then go out and whack the base in some way. We saw the same patte this week: Digby, Postpartisan depression: The Democrats join the War On Women Hullabaloo 12/07/2011; Charles Pierce, A Lesson for Kathleen Sebelius Regarding the Pill Esquire Politics Blog 12/07/2011.
Eric Rauchway (TR? Obama's more like Taft Politico 12/07/2011) takes issue with the White House's efforts to use his Tuesday speech to identify Obama with Republican Progressive President Theodore Roosevelt (though certainly not with John "Osawatomie" Brown!):
Obama could have been a Roosevelt. But an electorate eager for a White House scourging of Wall Street got, instead, an Oval Office cozy with the corner offices of lower Manhattan — exemplified by Peter Orszag’s slide from the director of the Office of Management and Budget to Citigroup.Rauchway also picks up on the self-pepper-spraying of Obama's Osawatomie speech:
Perhaps Obama should have been a Roosevelt — but not TR; the other one, the Democrat. Obama's speechwriters appear to know it, though he doesn’t say it. In Kansas Tuesday, the president said, “trickle down … didn’t work when it was tried in the decade before the Great Depression. It’s not what led to the incredible postwar booms of the ‘50s and ‘60s.”Meanwhile, Obama's Treasury Secretary Tim Geithner was in Europe, praising Italy and Spain for knuckling under to Germany's demands for self-destructive austerity economics during this depression. From Euronews 12/08/2011:
What did work, and what did lead to those booms, was the Franklin D. Roosevelt program whose name Obama apparently dare not speak: the New Deal.
But Obama omits mention of the Democratic Party’s signature New Deal. He credits FDR’s landmark domestic policies — like the minimum wage and social insurance — to TR for having wanted them. He praises FDR only for the G.I. Bill — which, Obama said, garnered bipartisan support.
The president went to Kansas to do his version of the "New Nationalism." [Teddy Roosevelt's signature reform slogan] But his New Nationalism is the old Obamaism — elevating bipartisanship above all else. [my emphasis]
See also Reuters U.S. has great interest in strengthening euro zone: Geithner 12/08/2011. A euro collapse would take down some large European banks, if they don't go down first, in turn exacerbating the eruozone crisis in Europe by their collapse.
But the Obama Administration prescription for Europe is to keep bleeding the patient with austerity economics. The Obama Administration is very aware that a European financial system crisis - which is unfolding already - could have huge negative effects on the US economy. Speaking of which, here a quick report on the state of European banks from Reuters:
Yet the Obama Administration's program for Europe is the same as it is for the US: austerity economics:
"The world can be encouraged by the progress of the last few weeks," Geithner told a press briefing in Milan.The Obama Administration is committed to austerity economics. And it has clearly been self-destructive in Europe as well as the United States. Promoting more of it for Europe just increases the chances that the European problems will spread to the US during the 2012 election year. Heckuva job, Tim!
"The U.S., the world economy have a very strong interest in the efforts being made to strengthen Europe," he said.
Geithner was in Milan on the last stop of a whistle-stop tour of Europe to lobby for action on the euro zone's sovereign debt crisis ahead of an EU summit on Friday.
Geithner expressed support for [unelected Italian Prime Minister Mario] Monti, who was hurriedly sworn in last month to push through austerity reforms to try to pull the euro zone's third-largest economy back from the brink.
"Mr Monti has committed to a very strong program of economic reforms to restore confidence and strengthen Italy's ability to grow in the future.
"He has a lot of credibility, not just in Europe, but in Washington, New York and around the world," Geithner said.
Tags: austerity economics, barack obama
Germany, Europe and the Princess Angie von Merkel
The European euro crisis has always been about the weakness of major European banks. It manifested itself for a long time as a sovereign debt crisis. But know it has morphed publicly into an intertwined crisis of banks, national debts, political power within the EU and democracy legitimacy for both the EU and national governments and political parties.
The EU summit news on Friday will mark another temporal milestone in this increasingly fast-moving slide toward the disintegration of the euro currency and the European Union. A new stress test of major German banks by the EU agency EBA charged with bank oversight has shown that several of the biggest are seriously undercapitalized: Geldmangel.Sechs deutsche Banken rasseln durch Stresstest Spiegel Online 08.12.2011. The article's headline says six but the text lists seven of serious concern: Commerzbank, Deutsche Bank, DZ Bank, Helaba, LBBW, Nord LB, West LB. In current conditions, raising more capital will almost certainly mean greater restrictions of lending to businesses, the problem that the recent central bank interventions from around the world to provide more dollar reserves to European banks were intended to forestall.
One of the puzzling aspects of recent days has been Standard & Poor's threatening to downgrade seemingly everything in sight in Europe: countries, banks, the EU bailout fund. Since the rating agencies showed themselves in the 2008 crisis to have been singularly incompetent and corrupt, I'm not sure why anyone listens to them at all. And just last month, less than a month ago actually, European officials were huffing and puffing and threatening the rating agencies over their mischief-making in the euro crisis.
But the reaction the last few days has been muted. I suspect that Princess Angie von Merkel and her court jester, French President Nicolas Sarkozy, think that S&P's dancing and stomping around is increasing pressure on other EU countries to adopt Angie's latest proposal for increased austerity policies all over Europe during the current depression.
Not everyone in Europe is happy with Angie, to put it mildly. A Controversial Paragon.Europe Shudders at Germany's New-Found Power Spiegel Online 12/06/2011 looks at current European worries about the overbearing policy of Germany under Merkel's Chancellorship toward its allegedly equal partners in the European Union.
This bit about French President Nicolas Sarkozy, who has acted as Angie's willing partner in destroying the euro and the EU, is very telling:
 |
| Angie and Nick bring a Trojan horse to (now-deposed) Greek Prime Minister Georgios Papandreou |
One of the puzzling aspects of recent days has been Standard & Poor's threatening to downgrade seemingly everything in sight in Europe: countries, banks, the EU bailout fund. Since the rating agencies showed themselves in the 2008 crisis to have been singularly incompetent and corrupt, I'm not sure why anyone listens to them at all. And just last month, less than a month ago actually, European officials were huffing and puffing and threatening the rating agencies over their mischief-making in the euro crisis.
But the reaction the last few days has been muted. I suspect that Princess Angie von Merkel and her court jester, French President Nicolas Sarkozy, think that S&P's dancing and stomping around is increasing pressure on other EU countries to adopt Angie's latest proposal for increased austerity policies all over Europe during the current depression.
Not everyone in Europe is happy with Angie, to put it mildly. A Controversial Paragon.Europe Shudders at Germany's New-Found Power Spiegel Online 12/06/2011 looks at current European worries about the overbearing policy of Germany under Merkel's Chancellorship toward its allegedly equal partners in the European Union.
This bit about French President Nicolas Sarkozy, who has acted as Angie's willing partner in destroying the euro and the EU, is very telling:
When Sarkozy appeared in front of his supporters in Toulon last Thursday, he spoke of the "fear that France could lose control of its own destiny." His dramatic words were an appeal to French national pride, but his response to those fears was anything other than nationalist: "France and Germany have decided to unite their fate," he announced. So-called "convergence" -- greater alignment of the two countries -- was the only way out of the crisis.And it's a very practical problem that France and other countries are choosing, under various levels of German coercion, to adopt Angie's disastrous austerity economics:
There is no doubt which country wants to align itself with which. Later that day, one of his advisers said Sarkozy wanted "supply oriented economic policies and debt reduction modeled on those of Gerhard Schröder," Merkel's predecessor. In his speech, the president even announced a "jobs summit" between employers and unions just like the one initiated by then-Chancellor Schröder six years ago.
The very next day the French daily newspaper Libération ran an article under the headline "A President Modeled on the Germans," which claimed "If you closed your eyes, you could hear Merkel speaking" during Sarkozy's speech.
During a televised interview back in early November, Sarkozy uttered almost unimaginable words for a French president: "All my efforts are directed towards adapting France to a system that works. The German system."
Throughout Europe, wherever austerity measures have been either announced or already implemented, Germany has been or is being blamed for it. After all, it is the Germans who are demanding these reforms. Very quickly, praise is being replaced by criticism that Chancellor Merkel is meddling in the domestic policies of other countries.As Martin Wolf says, "like the Bourbons, the leaders seem to have learnt nothing and forgotten nothing." (Merkozy failed to save the eurozone Financial Times 12/07/2011) And he writes that, even if the immediate crisis is overcome, something he doesn't count as highly likely:
... Many in Spain were appalled by the wording of a telegram the German chancellor sent to Mariano Rajoy to congratulate him on his election victory.
"Dear Mr. Rajoy," she had written in the message, which the left-leaning newspaper Pùblico quoted from both the German and in translation. Now that he had been given a clear mandate, Merkel said, Rajoy should "rapidly" take the necessary steps. If, as seems likely, the text was leaked by someone close to the prime minister-designate, it was a shrewd move indeed, for the Spanish now have someone to blame for their suffering.
The failure to recognise that a currency union is vulnerable to balance of payments crises, in the absence of fiscal and financial integration, makes a recurrence [of the current euro crisis] almost certain. Worse, focusing on fiscal austerity guarantees that the response to crises will be fiercely pro-cyclical, as we see so clearly.Tags: angela merkel, eu, euro, european union, martin wolf
Wednesday, December 07, 2011
End of the euro, Wednesday edition: Angie tells the satellite states to get with the program
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 Diktat Spiegel 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 London Guardian 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:
Tags: angela merkel, eu, euro, european union
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 Diktat Spiegel 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 London Guardian 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.He concludes:
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.
... 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.
Tags: angela merkel, eu, euro, european union
Shakira
Shakira doing my favorite song from her Sale el Sol album, "Antes de las Seis":
Tags: shakira, shakira mebarak
Tags: shakira, shakira mebarak
Obama in Osawatomie
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?
Ken Thomas provides a news report in Barack Obama Addresses Payroll Tax Cuts, Economy In Kansas Speech Huffington Post 12/06/2011.
Ron Fournier does a report and analysis in No TR: The Limits of Obama's Bully Pulpit National Journal 11/06/2011.
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:
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%:
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:
So I even need to mention that the latter historical association makes no appearance in the President's speech?
Ken Thomas provides a news report in Barack Obama Addresses Payroll Tax Cuts, Economy In Kansas Speech Huffington Post 12/06/2011.
Ron Fournier does a report and analysis in No TR: The Limits of Obama's Bully Pulpit National Journal 11/06/2011.
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.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.
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.
Then he continues immediately with, "These are not Democratic values or Republican values. These aren't 1% values, or 99% values.
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."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?
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?"
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.Tags: barack obama, occupy movement
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]
Tuesday, December 06, 2011
Reports on the latest "Merkozy" proposals
Here are two segments from the PBS Newshour 12/05/2011 on the euro crisis.
Eurozone Leaders Consider Deficit Limits to Help Save Euro:
What Would Deficit Limits Mean for Eurozone, Future of Euro?:
Tags: eu, euro, european union
Eurozone Leaders Consider Deficit Limits to Help Save Euro:
What Would Deficit Limits Mean for Eurozone, Future of Euro?:
Tags: eu, euro, european union
Debt thoughts
"Debts that can't be paid, won't be." (Michael Hudson, Debt and Democracy: Has the Link been Broken? Credit Writedowns 12/06/2011)
"Well, the strong do what they can, the weak what they must." (Joseph Cotterill, I am altering the PSI. Pray I do not alter it any further FT Alphaville 12/06/2011)
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:
"Well, the strong do what they can, the weak what they must." (Joseph Cotterill, I am altering the PSI. Pray I do not alter it any further FT Alphaville 12/06/2011)
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.Tags: eu, euro, european union
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]
Angela Merkel and "ordoliberalism"
Bloomberg Business Week has a decent article on the euro crisis by Peter Coy, Will Angela Merkel Act, or Won't She? 11/30/2011.
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:
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:
Tags: angela merkel, austerity economics, freiburg school, ordoliberalism
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."Sound money" translates for Angie and her supporters into austerity economics.
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]
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!
Tags: angela merkel, austerity economics, freiburg school, ordoliberalism
Monday, December 05, 2011
End of the euro, Monday edition
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 again Financial 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:
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:
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 again Financial 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.Tags: angela merkel, eu, euro, european union, wolfgang münchau
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]
The neoliberal nightmare, Italian edition
Ed Harrison explains the video below in Italian minister breaks down in tears over austerity budget Credit Writedowns 12/05/2011:
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 Loser Hullabaloo 12/04/2011. She comments:
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 Loser Hullabaloo 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.Tags: italy, medicare
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]
Sunday, December 04, 2011
Another week, another round of euro-crises
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 Europa Spiegel 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.
Tags: angela merkel, eu, euro, european union, helmut schmidt
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 Europa Spiegel 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.
Tags: angela merkel, eu, euro, european union, helmut schmidt
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