Saturday, March 09, 2013

Wolfgang Münchau: "The European elite no longer understands the world"

Wolfgang Münchau in Italiens Tragödie, Italiens Farce Spiegel Online 06.03.2013 has some interesting information and perspective on the recent Italian election, in particular the leading party, the Five Star Movement, headed by professional comedian Beppe (Giuseppe Piero) Grillo.

In an earlier post, I quoted Mark Mazower Italy exposes wider crisis of democracy Financial Times 02/28/2013 expressing a stock centrist fretting about dangers-from-the-left-and-the-right, in which he characterized Five Star as "a kind of anarchic alternative to party politics" that espouses "direct democracy."

But it's also true of lazy centrism as well as stone conservatism that anything that rattles the cages of the plutocrats is going to send them fretting about the sans-culottes swarming toward the Bastille.

The endless nightmare of lazy centrists (yes, that means you, Bobo Brooks)

But the current depression has given us the experience in both the EU and the US that the center-left parties are not only leery of bold "experiments" that benefit ordinary people. That has been true for a while, since 1973 at the latest for the US Democratic Party. Even though in the minds of FOXists and Republicans, the tame center-left parties are still ravenous beasts:

Actually, I think the gargoyle there looks kind of lovable. But no corporate CEO or hedge-fund magnate in their right mind could seriously believe that Barack Obama aspires to be a Robespierre rather than a Herbert Hoover or Heinrich Brüning.

Heinrich Brüning who also would have been against "entitlements" if the word had been made up yet

Our own American President Obama-Brüning has become a terrible example of that trend. After getting re-elected by a solid margin campaigning against the Republicans' austerity policies, he couldn't even wait until Inauguration Day to propose cuts in benefits for Medicare and Social Security during the entirely contrived "fiscal cliff" pseudo-crisis. French Socialist President François Hollande pulled something very similar last year just after his election on an anti-austerity program. The German Social Democrats (SPD) are acting in an even more pathetic way, cringing obediently in support of conservative German Chancellor Angela "Frau Fritz" Merkel's destructive austerity policies for the EU.

We've similar stories in Spain and Greece, with devastating electoral results for both. The Greek social-democratic PASOK party may not even survive the next national election after their shameful complicity in the austerity policies that are doing such tremendous damage to Greece. It's symblically appropriate that current President of the international social democratic umbrella group, the Socialist International, is the last PASOK Prime Minister of Greece, George Papandreou. (And last in this case likely means more than just "previous".)

Grillo's party got the biggest vote in the Italian election, but a nominally left coalition headed by Pier Luigi Bersani and his Democratic Party. As I noted last week:

DHans-Jürgen Schlamp, Die blockierte Republik Spiegel Online 26.02.2013. Schlamp paints the EU-friendly and pro-austerity Bersani as a leftie: "Bersani entstammt dem kommunistischen Lager, das sich zur sozialdemokratischen Reformpartei wandelte. Seine Freunde sind Gewerkschafter, nicht Global Player der Finanzwelt." ("Bersani comes from the Communist camp, which has transformed itself into a social-democratic reform party. His friends are unionists, not global players of the finance world.") Go figure.
Yes, the "post-communist" leftie leader is pro-austerity.

Wolfgang Münchau gives this description of Grillo and his Five Star Movement party:

Grillo wird von angesehenen Ökonomen unterstützt. Der Nobelpreisträger Paul Krugman hat mit Grillo per Video konversiert. Der Nobelpreisträger Joseph Stiglitz berät ihn in seiner Wirtschaftspolitik zusammen mit dem französischen Ökonomen Jean-Paul Fitoussi. Grillos Fünf-Sterne-Bewegung ist keine überdimensionierte Version der Piraten oder der Freien Wähler. Seine Wähler stammen hauptsächlich aus dem linken Lager. Grillo verkörpert den Protest gegen ein Establishment, das dem Land eine Wirtschaftspolitik verpasste, die politisch nicht tragbar ist und ökonomisch nicht funktioniert. Grillo ist somit indirekt der eigentliche Oppositionsführer in Deutschland - denn es ist schließlich Angela Merkels Politik, die Europa diese asymmetrische Anpassung aufzwingt.

Die europäische Elite versteht die Welt nicht mehr, weil sie sich zu keiner Zeit mit der Großen Depression intellektuell auseinandergesetzt hat. Sie wiederholt daher alle Fehler der Vergangenheit. Wie ihre Vorfahren wendet sie betriebswirtschaftliche Erbsenzählerei auf die Volkswirtschaft an und unterschätzt die verheerenden dynamischen Effekte einer solchen Politik. Sie begreift das Phänomen Grillo weder in seiner politischen noch seiner ökonomischen Reichweite.

[Grillo was supported by respected economists. The Nobel Prize winner Paul Krugman conversed with Grillo by video. The Nobel Prize winner Joseph Stiglitz advised him on his economic policy together with the French economist Jean-Paul Fitoussi. His voters came mainly from the left camp. Grillo embodies the protest against the Establishment that gave the country a economic policy that is politically not sustainable and doesn't function economically. Grillo is therefore indirectly the real opposition leader in Germany - because it is in the end Angela Merkel's policies that forced this asymmetical adjustment onto Europe.

The European elite no longer understands the world, because at no time have they engaged intellectually with the Great Depression. And so they are repeating all the mistakes of the past. Like their predecessors, they apply their private-business-management penny-pinching to the national economy and underestimate the devastating dynamic effects of such a policy. They grasp the Grillo phenomenon neither in its political nor its economic reach. {my translation}] [my emphasis]
Münchau points in particular to the lessons of the gold standard, which also blocked sensible anti-cyclical stimulus policies during the Great Depression just as the euro currency trap is doing to eurozone members today.

Britain, on the other hand, is not part of the eurozone but chooses on its own to embrace self-destructive austerity policies.

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