Assorted links: euro crisis, neoclassical synthesis, guns

Yanis Varoufakis and Jamie Galbraith have a wonkish article explaining the major differences in approach for the two major approaches to saving the euro, Whither Europe? The Modest Camp vs the Federalist Austerians Open Democracy 06/11/2014. They are both prominent advocates of the Modest Camp.

Dutch Finance Minister Jeroen Dijsselbloem, currently president of the "Eurogroup" of finance ministers, gives a variation of the Austerity Gospel, suggesting that sinner eurozone countries should be allowed to ease up on the austerity a little bit as long as they agree to even more drastic measures for internal devaluation, e.g., reducing real income for most people: Eurogruppen-Chef: "Mehr Zeit für Extrareformen" Der Standard 10.06.2014. He's part of the social-democratic Labour Party in the Netherlands. This nonsense is supposed to be a left-center alternative. No wonder the euro zone is in crisis and European Social Democracy in general, as well.

Paul Krugman explains the "neoclassical synthesis" in economics (Keynes in bad times, Alfred Marshall in good) and why reality is constantly challenging it, especially now: Synthesis Lost 06/12/2014. Krugman has been indicated for several years now that over time, he's had increasing doubts about the "classical" part of the synthesis.

He also has another post reflecting on errors, Including this one:

I worried a lot in 2010-2012 about a euro breakup. And here too I had a fundamentally flawed model. But the flaw wasn't in my economic model, which has worked pretty well, but in my implicit political model: I simply failed to appreciate the incentives facing European elites and how willing they would be to do whatever it takes, both in debtor countries and at the ECB, to avoid an outright rift. So, fundamental change called for — but in my political model, not my economic model.

He has mentioned this before, that he judged that democratic governments wouldn't put up for as long as they have with the level of sacrifice and economic hopelessness that Angela Merkel's austerity policies continue to impose on Cyrus, Greece, Ireland, Italy, Portugal and Spain. I have the impression, too, that at least in the 2009-12 period, Krugman was underestimating the emotional power of "the European project" (the EU) on both elites and the public there.

That said, I think he's being a bit hard on himself over that one. Back in 2012, he wrote in Dornbusch's Law And The Euro 07/21/2014:

It really does seem as if we're looking at Dornbusch’s Law in action:

The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought, and that's sort of exactly the Mexican story. It took forever and then it took a night.

July 2012 was the month after the ECB reversed course and committed itself to a bond purchasing program that has succeeded in deterring major speculations against eurozone countries' bonds for two years now.

I think that's still a good guideline: when the euro crisis goes into another acute phase, it will seem to news consumers and most pundits like a bolt out of the blue.

Krugman also has a blog post (Fall of an Apparatchik 06/11/2014) and a column (The Fix Isn't In: Eric Cantor and the Death of a Movement New York Times 06/12/2014) on his thoughts at the momentary political demise of Eric Cantor, the two of them very similar but not identical. He makes a useful point that we aren't hearing from the usual suspects among the Pod Punditry, who still imagine that some version of the Nelson Rockefeller/Barry Goldwater split of 1964 is still operating in the Republican Party:

I don't mean that conservatism in general is dying. But what I and others mean by "movement conservatism," a term I think I learned from the historian Rick Perlstein, is something more specific: an interlocking set of institutions and alliances that won elections by stoking cultural and racial anxiety but used these victories mainly to push an elitist economic agenda, meanwhile providing a support network for political and ideological loyalists.

By rejecting Mr. Cantor, the Republican base showed that it has gotten wise to the electoral bait and switch, and, by his fall, Mr. Cantor showed that the support network can no longer guarantee job security. For around three decades, the conservative fix was in; but no more.

To see what I mean by bait and switch, think about what happened in 2004. George W. Bush won re-election by posing as a champion of national security and traditional values — as I like to say, he ran as America’s defender against gay married terrorists — then turned immediately to his real priority: privatizing Social Security. It was the perfect illustration of the strategy famously described in Thomas Frank’s book "What's the Matter With Kansas?" in which Republicans would mobilize voters with social issues, but invariably turn postelection to serving the interests of corporations and the 1 percent. [links in original]

The New Republic's spanking of Chris Hedges for alleged plagiarism this week criticized him for inserted weblinks into quotes. It never occurred to me before that such could be construed as plagiarism. Does omitting quotes from a passage you're quoting that has links in its web version count as plagiarism, too? I'm thinking, no. But I specified on that last quote!

I guess that also means I have to check the links to make sure they're not to so nasty porno site or something.

Elias Isquith on the NRA's current marketing strategy, NRA’s "really big problem": Why it’s dependent on a dwindling fringe Salon 06/13/2014, quoting Josh Sugarman of the Violence Policy Center:

... hunting, hunting as an activity is fading away — so what you're finding is that the activists ... the NRA relies upon are those who buy into its paranoid language and truly believe the government is the enemy ... [W]hen the NRA is criticized for this or confronted with their own language, they fall into this excuse of ”it's just direct mail rhetoric; it’s just articles to engage our membership. It really is a risk-free activity,” and what we’re seeing is, that’s not the case. It’s not risk-free activity. The NRA’s validating role cannot be matched by any other organization, and most importantly — and this is where it all comes full circle — the NRA’s the organization assured that those who want to live out these wild fantasies have the exact tools to accomplish it.

The NRA with the eager help of the Republican Party from Congress to statehouses, of course.

And a story about real-life people who really did have to rely on private weapons to protect themselves against the political of segregation, Amelia Thomason-Deveaux, Armed Resistance in the Civil Rights Movement: Charles E. Cobb and Danielle L. McGuire on Forgotten History The American Prospect 06/11/2014. People for whom today's NRA and most Republicans have less than zero sympathy.

And, oh yeah, the IMF thinks several countries are looking at another developing housing bubble: IMF Global Housing Watch (accessed 06/13/2014).

Tags: angela merkel, austerity economics, eu, euro, european union, gun control, gun proliferation, nra

Gene Sharp and "regime change" in countries unfriendly to the US

Gene Sharp is world-famous as a nonviolent activist. But he has come under suspicion of acting directly or indirectly in concert with the US government in some of its more questionable efforts at "regime change," notably in Venezuela.

At the risk of doing a "this side says, the other side say, opinions differ" comment, there is a notable difference of opinion on Sharp's work and role among people who normally aren't shy about questioning US foreign policies with which they disagree.

A couple of pieces from 2008 on the anti-Sharp side:

George Ciccariello-Maher, Einstein Turns in His Grave CounterPunch 04/16/2008

Michael Barker, Sharp Reflection Warranted: Nonviolence in the Service of Imperialism Swans Commentary 06/30/2014

And some favorable ones:

Stephen Zunes, Sharp Attack Unwarranted Foreign Policy in Focus 06/27/2008

Sherly Gay Stolberg, Shy U.S. Intellectual Created Playbook Used in a Revolution New York Times 02/16/2011

Russ Wellen, Nonviolence Guru Gene Sharp Gets His Due Foreign Policy in Focus 02/24/2011

Sasha Abramsky, Gene Sharp, Nonviolent Warrior The Nation 03/16/2011

I'm agnostic on the question of to what extent Sharp and his Albert Einstein Institution actually cooperate with the US government in their foreign activist work. Which, of course, doesn't imply in itself any malicious intent on his part.

Still, what Ciccariello-Maher relates about Sharp's involvement with the National Endowment for Democracy and the International Republican Institute is cause for caution:

Firstly, Golinger’s claim that the AEI [Albert Einstein Institution] has received funding from the U.S. government. Sharp is at pains to deny this below, but would no doubt concede that the Institution has received funds from both the National Endowment for Democracy (NED) and the International Republican Institute (IRI). These funding sources are reported in AEI’s own annual funding statements. It is only through the worst of bad faith that one could claim that these are not in essence institutions pertaining to the U.S. government, since their formally-private status does little to hide the fact that they were both created by the U.S. Congress in 1983 to support Reagan’s covert wars. Both, moreover, have been shown (e.g. in Golinger’s first book, The Chávez Code) to have directly financed the coup-mongers among the Venezuelan opposition.

Secondly, Golinger’s claim that AEI was linked to Venezuelans who were plotting to assassinate Chávez. In his letter below, Sharp quarrels with the phrase "linked to," when this is in fact not "slippery" in the least, but rather the most precise description of the facts. The AEI did not actively participate in plotting to kill Chávez–it would be inaccurate to claim as much. Rather, Cuban-born far-right opposition leader Robert Alonso (brother of María "Conchita") boasted of having met directly with the AEI shortly before Colombian paramilitaries were discovered training at his estate in El Hatillo, a few short miles from Caracas. When interrogated, they admitted their mission was to kill Chávez.

More direct, however, was AEI’s training offered to the Venezuelan opposition toward the formulation of what was called "Operation Guarimba" (brainchild of Alonso himself), a series of often-violent street blockades that resulted in several deaths. The Guarimba tactics of 2003-2004 have been more recently taken up by the opposition-controlled student movement during 2007. According to an analysis published by Strategic Forecasting (Stratfor), Venezuelan student leaders traveled to Belgrade in 2005 to meet representatives of the AEI-trained opposition movement OTPOR-CANVAS, before later traveling to Boston to consult directly with Gene Sharp himself. When these allegedly non-partisan students hit the streets in 2007, their logo was exactly the same as that used by OTPOR and which appears in AEI literature.

Tags: gene sharp

Gun violence and the freedom to say awful stuff

Given the latest incidents of mass shooting and political violence - the latter directed at cops in Georgia and Las Vegas - there have been several articles dealing with how Republican Party rhetoric may be contributing to this phenomenon, including most of the following:

Peter Bergen and David Sterman, U.S. right wing extremists more deadly than jihadists CNN 04/15/2014

Brian Beutler, Why Is the American Far Right More Violent Than the American Far Left? The New Republic 06/10/2014

Eric Boehlert, How Fox News Covers Right-Wing Cop Killers: When Political Violence Doesn't Warrant Collective Blame Media Matters 06/10/2014

Digby, Just a coupla patriots sittin' around shootin' Hullabaloo 06/09/2014

Homegrown Extremism 2001-2013 New American Foundation (n/d, accessed 06/10/2014)

Cord Jefferson, The Racism Beat Matter 04/09/2014

Timothy Johnson, Fox Wastes No Time Pushing Right-Wing Canards After Oregon School Shooting Media Matters 06/10/2014

Ed Kilgore, Violence and the Right to Revolution Political Animal 06/10/2014

Paul Waldman, Republican Rhetoric and Right-Wing Terrorism: 10 Troubling Incidents The Plum Line 06/09/2014

Paul Waldman, How much does right-wing rhetoric contribute to right-wing terrorism? The American Prospect 06/09/2014

Joan Walsh, Fox News foments another violent outbreak: From Cliven Bundy to Jerad Miller, words matter Salon 06/10/2014

Such discussions often taper off into inconclusive and vague declamations about free speech and legal culpability.

But that often misses the point. In the United States, you're free to say pretty much any dang fool thing you want without getting put in jail for it, and other people generally have the freedom to say what a dang fool thing it was you just said. Shooting off your mouth in public about what a great idea you think it would be for someone to murder the President or a member of his family may get you a visit from the Secret Service. Making direct death threats is also illegal. And a mobster or two-bit Klan Klavern leader ordering a hit on someone also isn't covered by free speech laws.

And the advantage of such permissive rules of freedom of speech is that it lets us know that people like Wayne Lapierre, Rush Limbaugh, Sean Hannity or whoever are promoting reckless conduct by what they say. That then lets people like the writers mentioned above point out that they are promoting reckless conduct by what they say. It doesn't mean that the LaPierres, Limbaughs and Hannitys of the world get held legally liable when someone acts in criminal ways on insane or hateful ideas they promote.

It also doesn't mean that some people won't choose to shun them and the commercial enterprises they promote because of the insane, reckless or hateful talk, either. Free speech means you don't go to jail for saying awful stuff. It doesn't mean that everyone else should pretend not to notice how awful the stuff you're saying is.

I posted not long ago about the fearful picture of daily life in the US painted by the NRA's best-known spokesman, Wayne LaPierre, as reported here by Samantha Lachman for the Huffington Post, Wayne LaPierre Warns Fellow Gun Rights Supporters Of 'Knockout Gamers,' 'Haters' 04/25/2014:

We know, in the world that surrounds us, there are terrorists and home invaders and drug cartels and carjackers and knockout gamers and rapers [sic], haters, campus killers, airport killers, shopping mall killers, road-rage killers, and killers who scheme to destroy our country with massive storms of violence against our power grids, or vicious waves of chemicals or disease that could collapse the society that sustains us all. I ask you. Do you trust this government to protect you? We are on our own.

I actually happen to live in a city which in some years recently has had the highest murder rate of any large city in the country. But this is so far from describing realistically even the most dangerous cities in the US is that it's a psychotic picture of our reality.

And he is explicit that "this government" - and official police departments are part of the government, whether his older white audience for the speech realized it or not - cannot protect from these horrors: "Do you trust this government to protect you? We are on our own."

This kind of talk, coming as it does from the spokesman of the NRA, an organization revered and obeyed by elected Republicans at all levels on gun issues, encourages irrational features and sanctions vigilante violence. That doesn't make LaPierre legally an accomplice to actions like the recent dual cop-killing the "Patriot Militia" type extremists in Las Vegas. But it's plain silly to pretend he's not actively creating the kind of atmosphere that encourages such actions.

Oh, and liberal concern-troll extradinaire Bob "the Daily Howler" Somerby? How is he taking all this talk about extremism and white racism and political violence from the right and the Republicans encouraging it all with their bellowing and blustering? The last few days, he's been focusing on education issues. But I'm sure in a few days, he'll explain to us how the whole flap shows us ... how evil Rachel Maddow is!

As of this writing, the NRA's website is featuring a video sponsored by Sig Sauer, called The WORST Is On The Way!:

The video presents nine white guys sitting around a table talking about how scary The Terrorists are - Muslims, of course! I think of them as the Nine Bobs: Brandon Bob, Rob Bob, Tom Bob, Jerry Bob, Matt Bob, Del Bob, Tim Bob, Rob Bob and Matt Bob Bob.

The Nine Bobs of the White Guys' Table talk about three notorious terrorist attacks: Mumbai (India, 2008), Naibori mall (Kenya 2013), and Beslan (Russia 2004). They emphasize that them thar Muslim terrists is comin' to git you good Amurcans right 'chere at home!

Jerry Bob (around 0:50) explains to us how in the Mumbai attack, "10 soldiers in Mumbai completely annihilated their entire infrastructure." The entire infrastructure would include stuff like highways, airports, power lines and power stations, water works, sewage facilities, grocery stores, offices, hospitals, schools, universities, clinics, roads, bridges. And in a city of 18.4 million, only ten of them thar Muslim terrists were able to destroy it all in a few hours time! Wow, I guess The Terrorists really are superhuman! Although Jerry Bob explains they had help from the Indian Librul Media.

Del Bob tells us started around 2:15 how a mall massacre like in Kenya is going to happen here. At around 2:50, Tim Bob talks about how the Nairobi terrorists supposedly asked people whether they were Muslim or not before and then killed the ones who said no, a kind of story that resonates especially with white American Christian fundamentalists.

There's a lot of talk throughout about how The Terrorists kill children.

I'm not sure it's registered with Del Bob and Tim Bob that there are mall massacres in the US. But they don't count because they are usually done by non-Muslim American white guys, you know, "lone nuts."

Moving to the Beslan massacre, Brandon Bob around 4:00 asks, "What did Bin Laden say after the Beslan massacre? This will happen on your soil five times." (Did Bin Laden really say that or did Brandon Bob read it in a chain e-mail?)

Around 4:25, Tom Bob explains weightily that the Chechen terrorists prepared the Beslan attack carefully. Wow, The Terrorists prepare attacks ahead of time? Who would have thought?

Near the end around 7:20, Tim Bob says things like the mall attack and the Beslan school will happen in the US. But none of the Bobs talking on this video seem to regard, you know, the school massacres that actually happen here in the US as being what they are talking about.

The video doesn't actually pitch for people to rush out and buy Sig Sauer weapons. But the message is that the scary Muslims are COMING FOR US! And we should be afraid, very afraid.

The NRA and companies like Sig Sauer are happy to promote propagandist fear-mongering like this video. People that consume a steady diet of this kind of talk without checking in with reality in other ways can understandably come to see Wayne LaPierre's psychotic picture of how scary and dangerous a place the US has become as normal and sensible.

Tags: gun control, gun proliferation

Shields and Bobo on Bergdahl and D-Day

As much grief as I give Bobo and Mark Shields for their weekly recitation of Very Serious Pundit wisdom on the PBS Newshour Political Wrap, Mark sometimes rouses himself from his normal state of semi-slumber to say something worth hearing. Especially when the topic is war.

He didn't manage it last Friday, though: Shields and Brooks on Bergdahl criticism, Mississippi primary politics 06/06/2014. He and Bobo agreed that though they could wait to pass judgment on Bowe Bergdahl and that President Obama deserved to be criticized because, well, because the Republicans were criticizing him. Apparently Obama should have realized the the Republicans were going to trash him for whatever he did or didn't do about Bergdahl and therefore should have done something different, even though the Reps would attack him no matter what he did. So it's his fault. Or something.

Jack Shafer has a good piece on what the public can reasonably assume from what's in the public record, Bowe Bergdahl's court-martial by the press Reuters 06/03/2014, and the situation doesn't seem to have changed much in the last few days. Bobo and Sleepy Mark should keep their snarky judgments over Bergdahl and their silly justification of the Republican clown show around it to themselves, unless they actually can come up with something useful to say.

After their nonsense on the Bergdahl case, I wasn't favorably inclined toward Sleepy Mark's boy's comic-book description of the D-Day landing and the Second World War generally:

On D-Day, it was reaching? It was. It was an incredible — it was an incredible act.

And I think what — it’s not simply the war. The war was remarkable, Judy, in that there was an equality of sacrifice. It was universal. We absolutely all were engaged, whether it was the rationing of meat or gasoline or cigarettes or alcohol or whatever.

One-third of all the vegetables and fruit in the United States were raised in victory gardens, 20 million victory gardens. The four president sons, all four served in combat in World War II. It’s back to Lyndon Johnson and Chuck Robb, his son-in-law, before we have even seen anybody in the president’s family in battle.

So that — that was part of it. The other thing was, we usually acknowledge individual acts of great bravery, the Medal of Honor, Navy Cross, Silver Star. This was thousands upon thousands of American — all an act of just incredible collective and individual courage, I mean, going and landing on that Normandy beach, 80 miles of open water, the armaments, Pointe du Hoc, all of it.

It was remarkable. And the unity of the country at the time is something that we can just treasure and just covet.

Our Pod Pundits still practice a kind of glorification of war that was outdated and destructive even before the First World War.

The unity of war that Sleepy Mark wants us to "just treasure and just covet" was a unity of anger, fear and hatred. And that unity and the deference to authority that came with it led the country to do and tolerate things it shouldn't have. Like the massive civilian casualties in the "strategic bombing" whose actual results in terms of measurable military advantage was far more meager that air force boosts claim even today. Like interning Japanese-Americans in concentration camps.

A unity based on anger, fear and hatred, and unity in war based on the goal of killing millions of foreigners, is not something to glorify or blab sentimental nonsense about. It's just not.

Yes, wars bring out some of the best and most inspiring aspects of people: courage, self-sacrifice, inventiveness. With the right kind of leadership, they can open up opportunities for a better peace, which is ultimately the only legitimate goal of war.

William James' famous 1910 essay, "The Moral Equivalent of War" focuses on this paradox, or contradiction if you prefer. It came out four years before the First World War broke out in Europe, the greatest carnage that humanity had so far managed to stage. It took another couple of decades to surpass it. But the later carnage created that sweet national unity that Sleepy Mark wants us to "just treasure and just covet."

James' essay is short but full of provocative observations. A critic of American imperialism during the Philippine War, James expresses the hope that humanity can one day do away with war, though it does note repeatedly describe it as a Utopian aspiration in that essay:

It would be simply preposterous if the only force that could work ideals of honour and standards of efficiency into English or American natures should be the fear of being killed by the Germans or the Japanese. Great indeed is Fear; but it is not, as our military enthusiasts believe and try to make us believe, the only stimulus known for awakening the higher ranges of men's spiritual energy.

President Carter invoked James' notion of a moral equivalent of war in support of his energy programs. In which hope he was soon disappointed, unfortunately.

Here is part of how James describes the virtues he wants to channel from military to constructive peaceful pursuits:

We must make new energies and hardihoods continue the manliness to which the military mind so faithfully clings. Martial virtues must be the enduring cement; intrepidity, contempt of softness, surrender of private interest, obedience to command, must still remain the rock upon which states arc built-unless, indeed, we wish for dangerous reactions against commonwealths fit only for contempt, and liable to invite attack whenever a centre of crystallization for military-minded enterprise gets formed anywhere in their neighborhood.

The war-party is assuredly right in affirming and reaffirming that the martial virtues, although originally gained by the race through war, are absolute and permanent human goods. Patriotic pride and ambition in their military form are, after all, only specifications of a more general competitive passion. They are its first form, but that is no reason for supposing them to be its last form. Men now are proud of belonging to a conquering nation, and without a murmur they lay down their persons and their wealth, if by so doing they may fend off subjection. But who can be sure that other aspects of one's country may not, with time and education and suggestion enough, come to be regarded with similarly effective feelings of pride and shame? Why should men not some day feel that it is worth a blood-tax to belong to a collectivity superior in any ideal respect? Why should they not blush with indignant shame if the community that owns them is vile in any way whatsoever?

James showed considerably more insight into the horrors of war and the problem of glorifying it that Sleepy Mark did last Friday when he wrote in his essay:

There is something highly paradoxical in the modern man's relation to war. Ask all our millions [in America], north and south, whether they would vote now (were such a thing possible) to have our war for the Union expunged from history, and the record of a peaceful transition to the present time substituted for that of its marches and battles, and probably hardly a handful of eccentrics would say yes. Those ancestors, those efforts, those memories and legends, are the most ideal part of what we now own together, a sacred spiritual possession worth more than all the blood poured out. Yet ask those same people whether they would be willing in cold blood to start another civil war now to gain another similar possession, and not one man or woman would vote for the proposition.

Tags: d-day, second world war, william james

A surprisingly good analysis of the SPD's worst problem - and from an SPD journal!

The SPD magazine Berliner Republik. Das Debattenmagazin 2/2014 has a surprisingly good critique of the SPD's austerity policies during the current economic and euro crisis by Hans Kundnani, Die SPD und Europa.

Um zu verstehen, wie tief die SPD in die Europapolitik der Merkel-Regierung verwickelt ist, muss man also zunächst auf die Ära Schröder zurückblicken. Als dieser im Jahr 1998 an die Macht kam, versprach er, die Arbeitslosigkeit zu reduzieren, die gerade auf mehr als vier Millionen gestiegen war. Die Ursache dieses Anstiegs: Deutschlands verarbeitende Industrie war immer stärker dem globalen Wettbewerb ausgesetzt und litt vor allem unter der Konkurrenz aus den Schwellenländern. In seiner ersten Amtsperiode schaffte es Gerhard Schröder nicht, die deutsche Wirtschaft zu reformieren. Aber die Reformen der Agenda 2010 in seiner zweiten Amtsperiode führten – zusammen mit anderen Faktoren – zu einer Verwandlung der deutschen Wirtschaft.

Parallel dazu, aber eher als Folge der erstaunlichen Lohnzurückhaltung, welche die Tarifpartner im ersten Jahrzehnt des neuen Jahrhunderts vereinbarten, fielen die Lohnstückkosten in Deutschland im Vergleich zu anderen europäischen Ländern dramatisch. Zur gleichen Zeit produzierte die Einführung der gemeinsamen Währung einen Kreditboom in anderen Ländern des Euroraums, von der deutsche Firmen massiv profitierten. Auch war die Schwäche des Euro im Vergleich zur D-Mark für deutsche Exporteure ein Vorteil – plötzlich waren sie außerhalb Europas viel wettbewerbsfähiger. Nach 2005 begann die Arbeitslosigkeit zu fallen und Deutschlands Leistungsbilanz entwickelte sich von einem Defizit in Höhe von 1,7 Prozent des Bruttoinlandsproduktes (BIP) im Jahr 2000 zu einem Überschuss von 7,4 Prozent im Jahr 2007.

To understand his argument about the development of the SPD's current position, it's helpful to remembers some major dates:

• 1998-2005: Red-Green Coalition government, headed by Chancellor Gerhard Schröder and Vice Chancellor/Foreign Minister Joschka Fischer
• 2005-2009: First Grand Coalition (GroKo) of the CDU and Social Democrats headed by Angela Merkel (CDU)
• 2008: recession begins in Europe setting off a period of economic depression for which there is currently no end in sight
• 2009-2013: Kleine Koalition of the CDU and Free Democrats (FDP) headed by Angela Merkel (CDU)
• 2009: The Greek debt crisis comes to light when the new social-democratic PASOK (ΠΑΣΟΚ) government of Giorgos Papandreou (Γιώργος Παπανδρέου) revealed that the previous government of the conservative New Democracy party had concealed the level of the country's debt
• 2009-present: The combination of the economic crisis, the Greek debt crisis, speculative attacks on the bonds of other eurozone countries, bailouts for banks and the austerity policies insisted upon by the Troika (IMF, EU Commission, ECB) conforming with the dogmatic demands of Merkel's "ordoliberalism" produced a situation of high debt in several "periphery" countries coupled with depression-level economic conditions with no immediate prospect of emerging from them that has now reached the point of lowflation/deflation, which creates even greater hurdles to a recovery.
• 2012: Approval of the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union, which is referred to in short as the Fiscal Compact or the Stability Compact. Or by me as the Fiscal Suicide Compact, because it writes into the national constitutions of the eurozone countries arbitrary and highly restrictive deficit and debt limits, effectively outlawing the use of normal macroeconomic ("Keynesian") fiscal policy to combat recessions and depressions.
• 2013-?: Second GroKo of the CDU and Social Democrats headed by Angela Merkel with both parties firmly committed to continuing the austerity policies against the periphery eurozone countries.

Kundnani argues:

Um zu verstehen, wie tief die SPD in die Europapolitik der Merkel-Regierung verwickelt ist, muss man also zunächst auf die Ära Schröder zurückblicken. Als dieser im Jahr 1998 an die Macht kam, versprach er, die Arbeitslosigkeit zu reduzieren, die gerade auf mehr als vier Millionen gestiegen war. Die Ursache dieses Anstiegs: Deutschlands verarbeitende Industrie war immer stärker dem globalen Wettbewerb ausgesetzt und litt vor allem unter der Konkurrenz aus den Schwellenländern. In seiner ersten Amtsperiode schaffte es Gerhard Schröder nicht, die deutsche Wirtschaft zu reformieren. Aber die Reformen der Agenda 2010 in seiner zweiten Amtsperiode führten – zusammen mit anderen Faktoren – zu einer Verwandlung der deutschen Wirtschaft.

[In order to understand how deeply the SPD is mixed up in the European policy of the Merkel government, one must first look back to the Schröder era. When he came to power in the year 1998, he promised to reduce unemployment, which had just climbed to more than four million. The origin of this increase: Germany's manufacturing industry was more and more shut out of world competition and suffered above all from the copetition of the developing countries. In his first term in office, Gerhard Schröder did not manage to reform Germany's economy. But the reforms of Agenda 2010 in his second term led - together with other factors - to a transformation of the German economy.]

Agenda 2010 was a neoliberal program very much in the spirit of what we in America call "bipartisanship," resulting in far less job security and many more low-paying jobs.

Kundnani continues, explaining that the combination of the adoption of the euro currency, the Agenda 2010 reforms and a general willingness on the part of German unions to accept wage increases that lagged significantly behind productivity increases:

Parallel dazu, aber eher als Folge der erstaunlichen Lohnzurückhaltung, welche die Tarifpartner im ersten Jahrzehnt des neuen Jahrhunderts vereinbarten, fielen die Lohnstückkosten in Deutschland im Vergleich zu anderen europäischen Ländern dramatisch. Zur gleichen Zeit produzierte die Einführung der gemeinsamen Währung einen Kreditboom in anderen Ländern des Euroraums, von der deutsche Firmen massiv profitierten. Auch war die Schwäche des Euro im Vergleich zur D-Mark für deutsche Exporteure ein Vorteil – plötzlich waren sie außerhalb Europas viel wettbewerbsfähiger. Nach 2005 begann die Arbeitslosigkeit zu fallen und Deutschlands Leistungsbilanz entwickelte sich von einem Defizit in Höhe von 1,7 Prozent des Bruttoinlandsproduktes (BIP) im Jahr 2000 zu einem Überschuss von 7,4 Prozent im Jahr 2007.

[Parallel to that, but rather more the result of the astonishing wage restraint on which the tariff partners {labor and management} agreed in the first decade of the new century, the unit labor costs in Germany fell dramatically in comparison to other European countries. At the same time, the introduction of the common currency {the euro} produced a credit boom in other countries from which German firms profited massively. Also, the weakness of the euro in comparison to the Deutschmark was an advantage for German exporters - suddenly they were much more competitive outside Europe. After 2005, unemployment began to fall and Germany's trade deficit at the level of 1.7% of the gross domestic product (GDP) in the year 2000 developed into a surplus of 7.4% in the year 2007.]

This is a good description of how Germany benefits from the euro currency, a matter that neither the CDU or the SPD nor the mainstream German press are much inclined to explain on any kind of regular basis.

As Kundnani points out, the SPD was anxious to take some credit for their own party for the improvements that were occurring. And since they had embraced the same basic neoliberal approach as the CDU takes, they couldn't really criticize its downsides without inviting reflection on their own role in creating them. Not that the SPD's leaders were especially interested in criticizing the CDU. After all, they agreed to become the junior partner in her first government, and now in her third one.

And then there's just plain old nationalism: "In Bezug auf die Eurokrise teilt die Partei nämlich weitgehend Merkels Grundannahmen, darunter besonders die Vorstellung, die deutsche Wirtschaft sei für andere Länder ein Vorbild." ("In realtion to the euro crisis, as a matter of fact the Party [SPD] shares Merkel's basic assumptions to a large degree, especially including the concept that the German economy is a model for other countries.")

But in the currency union, that's an exceptionally short-sighted a self-destructive way to approach it.

For the SPD, Kundnani argues that developing a constructive alternative to Merkel's austerity policies would involve some real self-criticism of their approach in the 2000s. It would require a rejection of the neoliberal, let-the-market-run-wild assumptions that they hold now.

In the 2013 German election, the SPD offered up some suggestive but vague programs to try to strike a profile distinct from Merkel's and the CDU's, talking about special measures to combat youth unemployment and vaguely acknowledging that Germany's current trade surplus made not be all good. But as soon as the election was over, they couldn't wait to become the junior partner in another Merkel-led, pro-austerity GroKo. The SPD couldn't be bothered to make even a head-fake toward holding out in the coalition negotiations to try for an SPD-led majority left government with the Greens and the Left Party, which numerically was a possibility. If we count the SPD as left, which most people still do, the German election last year produced a left/left-center majority in the Bundestag.

Kundnani characterizes the CDU and the SPD over the last year as following the same destructive policies toward the eurozone, but with the CDU coming off as wanting to compel the other countries to be like Germany, while the SPD wants to help them become like the superior Germans. Either way, the destructive nationalism and the Herbert Hoover/Heinrich Brüning economic policies are the same in all essential respects.

He also notes that the SPD has criticized Merkel for not doing more along the same lines as their neoliberal reforms. Good grief!

Yanis Varoufakis renders a similarly harsh judgment on the SPD and European Social Democracy more generally when he writes (Europe’s Crisis and the Rise of the Ultra-Right is the Left's Fault 06/09/2014):

Rather than constantly clashing with industrialists and merchants in order to extract from them a share of their profits, social democratic parties of government believed that a Faustian bargain with financiers could: (a) yield more funds for social programs, (b) end their conflict-ridden relationship with industry, and (c) allow them to hobnob with the rich and powerful, as partners, while still lavishly funding public hospitals, schools, unemployment benefits, the arts etc. It seemed like a dream come true for suited men who did not want to abandon the working class to its own devises but who had had enough of ... class struggle. [OMG! Did he say class struggle?]

Faustian bargains come, alas, with clauses written in blood. Europe’s social democrats, lured by the cacophony of money-making in the financial sector, numbed by the myth of some 'Great Moderation', and excited by the mystical notion of 'riskless risk', agreed to let finance free to do as it pleased in exchange for funds with which to prop up welfare states that were relics of a bygone post-war social contract. That was the social democrats' game. At the time, it seemed to them a better idea, more fathomable, than having to be constantly in conflict with industrialists, seeking to tax them to redistribute. In contrast, they found a cosy relationship with bankers more amenable and easy going. As long as the 'leftist' politicians let them do as they pleased, the financiers were happy to let them have some crumbs off their gargantuan dinner table.

The Spanish Socialist activist Beatriz Talegón posted on her Facebook page today complaining about the old guard in the Spanish PSOE, specifically about their indifference or tacit support of the monarchy, "Por favor, Señores, dejen paso, con todo respeto. Treinta años pisando alfombras les han hecho olvidar de dónde vienen ustedes..." ("Please, gentlemen, with all respect: just go away. Thirty years walking on the carpet have made you forget where you came from ...") Having read her book No nos avergoncéis (2013), I feel safe in saying she would apply the same sentiment to their neoliberal economic policies, which seem to be as deeply accepted by the PSOE leadership as by the SPD's.

Ironically, as Kundnani also describes well, what is critically needed for the eurozone as a whole is for Germany to follow a stimulative policy that would increase the wages of Germans and thereby generate a higher internal aggregate demand, both within Germany and in the eurozone as a whole. German workers could start receiving a higher share of the gains in productivity over the last decade, of which on the average they have received little so far.

But such a policy would have redistributive effects that the German One Percent would find undesirable. So without political parties articulating a serious left criticism and explaining the real alternatives and fighting the One Percent politically over them, the eurozone course to disaster will continue.

Did Varoufakis say "class struggle"? The problem right now in the eurozone is that the One Percent have been very successfully carrying on a class struggle that is destructive to everyone else as has put the "European project" on the road to ruin without effective enough democratic resistance.

Tags: angela merkel, austerity economics, eu, euro, european union, spd

Michelle Bachelet at the start of her second Presidency in Chile

This post by Javier Couso is from April, Bachelet's First Month in Office — And What Lies Ahead CLAS Blog 04/18/2014. But it gives a succinct look at her New Majority (Nueva Mayoría) political project is about:

President Bachelet's decisiveness in her first few weeks in office has had a profound impact. First, her determination to fulfill her campaign promise to introduce significant changes in Chile’s current socio-economic model has increased her credibility among the large portion of the population who had become skeptical of politicians in recent years. Second, her focus on enacting the platform she campaigned on has provided a sense of mission and direction to her coalition, the Nueva Mayoría, which comprises a vast spectrum of political parties, from the Christian Democrats in the center to the Communists on the left. Lastly, the assertiveness of Bachelet's first month in government has left Chile’s highly ideological right-wing parties confused to the point of paralysis, since they thought that her campaign promises were just a rhetorical move to prevail in the presidential election.

Tags: chile, michelle bachelet

The D-Day anniversary

I usually pay attention to things like the D-Day commemoration. You can learn some history that way. And I'm fascinated by how the politics of public memory work, too.

I've mostly ignored the D-Day anniversary articles, though. One reason is that didn't want to hear bad analogies between the Second World War and the tensions with Russia over Ukraine.

Even more so, I'm so disgusted over the Republican sideshow over the prisoner-of-war swap that freed Sgt. Bowe Bergdahl from Taliban captivity that I just didn't want to read or hear gasbags gushing over the glories of the D-Day landing. Digby says what needed to be said about the Bergdahl hate propaganda in Everybody look what's goin' down Hullabaloo 06/08/2014.

But I did pay attention to this article from the BBC History Magazine, D-Day: the successes and failures in focus 06/05/2014, an interview with historian Antony Beevor. It points to a problem in the D-Day operation that the United States hasn't adequately come to grips with yet, the callousness and carelessness toward civilian casualties:

Q: Could the Allies have reasonably reduced the high number of civilian deaths?

A: Yes I’m afraid I think they could. The British bombing of Caen [beginning on D-Day] in particular was stupid, counterproductive and above all very close to a war crime.

There was an assumption I think that Caen must have been evacuated beforehand. Well that was wishful thinking on the part of the British. There were over 2,000 casualties there on the first two days and in a way it was miraculous that more people weren't killed in Caen when you think of the bombing, and the shelling which carried on for days afterwards.

Here again there was a lack of thinking things through. If you are intending to capture Caen on the first day then you need to be able to penetrate its streets with your troops. Why then smash them to pieces? In fact, exactly as happened at Stalingrad, the bombing created terrain for the defender as well as being morally wrong.

There have also been heavy accusations against the Americans in Normandy for their indiscriminate use of artillery. The Americans have always believed that you save lives by using massive artillery bombardments beforehand, and I’m certainly not saying they should have done the whole thing without artillery because Allied casualties would have been horrific.

Yet there were occasions, as for example at Mortain [on 12 August], where the Americans destroyed the town in a fit of pique even as the Germans were retreating, simply because they had had such a bloody time there. That I think was deeply shocking.

Tags: d-day, war

The ECB tries to fight deflation, the lattter-day Heinrich Brünings wring their hands in despair

The ECB has recently decided to lower the cost of capital lent to banks even more and to actually charge banks a small negative interest rates with funds they park with the ECB. They don't have much wiggle room in taking such actions, because in the depression conditions of the eurozone, interest rates are already up against the zero lower bound and several eurozone countries are actually in deflation (Cyprus, Greece, Portugal and Slovakia). And the eurozone as a whole is in a "lowflation" situation headed for actual deflation.

Heinrich Flassbeck explains why the ECB's efforts are pushing on a string, desirable though he considers them to be, in Die EZB senkt die Zinsen: Eine richtige Entscheidung, aber keine Lösung für die Eurokrise flassbeck-economics 06.06.2014: "Weil die EZB deflationäre Tendenzen bekämpft, muss sie alles dafür tun, dass das Wachstum in Europa anspringt." ("Because the ECB is fighting deflationary tendencies, it must do everything that would start up growth in Europe.")

He praises the ECB under its current chairman Mario Draghi:

Sie leugnet die Deflationsgefahren nicht, sie verharmlost sie nicht, sie nimmt sogar die (lächerliche) deutsche Kritik an der „Enteignung“ der Sparer in Kauf und sie kündigt an, noch andere, unkonventionelle Mittel einzusetzen, wenn es so nicht reicht.

[It isn't denying the danger of deflation, it isn't minimizing it, it is even taking in stride the (laughable) German criticism about the "expropriation" of savers and it is signaling that it will employ still other unconventional methods if it doesn't suffice.]

And he explains the basic macroeconomics of why the ECB is pushing on a string here:

Was nützt es, Banken mit mehr Eigenkapital auszustatten oder mit einem negativen Einlagezins für geparkte Gelder bei der EZB zu bestrafen, wenn sie keine Kredite vergeben, weil sie keine Kunden haben, die in Sachkapital investieren wollen? Und es fehlt an Kreditkunden für Sachinvestitionen, weil die wiederum nicht ausreichend Kunden haben, die genügend Güter nachfragen, um auch nur die vorhandenen Produktionskapazitäten voll auszulasten.

[What good does it do to provide banks with more internal capital or to punish them with a negative savings rate for funds parked with the ECB, if they aren't giving out any credit because they don't have any customers that want to make capital investments? And they lack customers for credit to make capital investments, because they in turn don't have enough customers demanding enough goods that would even use up the current production capacity.]

Conventional wisdom in Germany is even more fixated on pretending that the Great Depression never happened than is the case in the US. Which is saying a lot. So with the Christian Democrats and the Social Democrats joined in Chancellor Angela Merkel's Grand Coalition government in Germany and backing her ruinous Herbert Hoover/Heinrich Brüning austerity programs for the eurozone, much of the public discussion over the eurozone crisis is kind of whacked.

The ECB's latest actions of course put earnings on conventional savings accounts down even closer to zero than they already were. "It's expropriating money from savers!", say the Heinrich Brüning fans. Marc Beise in in a Süddeutschen Zeitung video blog, "Die Droge Geld ist keine Lösung" 06.06.2014 argues that the ECB exceeded its mandate with the action (not so), grumps that the ECB is paying attention to something other than the German economy in isolation, it's going to hurt old people (a stock argument for tight money) and complains that it gives too much help to the crisis countries in the eurozone, and ends with a sneering warning that this will generate inflation.

The SZ's Alexander Hagelüken joins in the conventional wisdom garment-rending, Geldverschenker ohne Weitblick 05.06.2014. He uses a propaganda dig that also appears in Beise's commentary: that the ECB is acting like the American Federal Reserve. Yes, center-right and center-left opinion in Germany is actually in such a state of macroeconomics-denial that the American Fed looks like a dangerously radical model to them.

I'm beginning to think the German media's rush to the American journalistic model of groupthink and lazy reporting is advancing at a faster pace lately. The Fed has a dual mandate of guarding both price stability and combating unemployment. The fact that most of the time it cheerfully ignores the latter doesn't mean it's not part of the mandate, and it should be. In recent years, under Fed chairs Ben Bernanke and Janet Yellen, it has used measures like "quantitative easing" to give more attention to the employment mandate. Much to the horrors of American conventional wisdom, of course. And, like the ECB today, with interest rates bumping up against the zero lower bound, there's really not a lot the Fed can do to increase growth, though every little bit helps. (There's a lot to the heterodox view that the Fed's powers to influence the course of the economy are generally vastly over-rated, but that's a topic for another time.)

The ECB has a mandate for price stability but not for maintaining a healthy rate of employment. It's one of several structural problems with the euro currency zone. The dig that Hagelüken and Beise make that the ECB is acting like the Fed is basically just a snarky but also deliberately obscure way of saying that the ECB is exceeding its statutory authority by its recent action to loosen the money supply. And in that context, the conventional assumption is that it means keeping inflation low.

Hagelüken's opening sentence is telling in this regard: "Ein richtiger deutscher Bundesbanker hält natürlich nur ein Modell einer Zentralbank für angemessen: das der Deutschen Bundesbank." ("A real German central banker naturally holds only one model of a central bank for adequate: that of the German Bundesbank.") The key word here is German. Hagelüken and Beise in their commentary don't give a flying flip about the eurozone economy of which Germany became a part like all the other members when they joined the eurozone. They are using the narrow nationalistic focus that Merkel and her party as well as the Social Democrats have embraced and that has brought the eurozone to its current chronic crisis.

And what's a good whine of this kind with our old friend hyperinflation? "Vorbei die Zeiten, als Europas Währungshüter nur auf Preisstabilität starrten, als lauere hinter jeder Ecke das Inflationsgespenst von 1923," Hagelüken mourns. ("The times are goine when Europe's guardians of money were fixated only on price stability, when around every corner the ghost of the 1923 inflation lurked.")

Awesome! He doesn't mention the German H or N words, but all good conservatives know that the hyperinflation of 1923-4 brought Hitler and the Nazis to power in 1933! Like this:

Table from: Peter Gay, The Dilemma of Democratic Socialism: Eduard Bernstein's Challenge to Marx (1952)

BTW, Heinrich Brüning, "the Hunger Chancellor," was in that office 1930-32 pursuing Merkel-type austerity programs in Germany itself during the start of the Great Depression. I'm just saying.

Mark Schieritz explains that even in a narrow interpretation of the ECB's overly-restrictive official mandate, it should be doing whatever it can right now to combat lowflation/deflation (Draghi darf das Zeit Online 05.06.2014):

Es ist die Aufgabe der EZB, für stabile Preise zu sorgen. Darunter versteht die Notenbank eine Inflationsrate bei nahe zwei Prozent. So sind die Regeln. Im Moment beträgt der Preisauftrieb in der Euro-Zone gerade mal 0,5 Prozent – eine klare Zielverfehlung also. Die Vehemenz, mit der die Zinsentscheidung hierzulande kritisiert wird, ist deshalb unehrlich: Läge die Inflation so weit über dem Ziel, wie sie jetzt darunter liegt, dann würde halb Deutschland nach höheren Zinsen rufen.

Wer Draghi zum Stillhalten verdammen will, der ruft ihn dazu auf, die Regeln zu brechen. Das Argument, die niedrige Inflation spiegle nur die nötige Kostenanpassung in Südeuropa wieder, zieht jedenfalls nicht mehr: Selbst im boomenden Deutschland ist die Teuerung zu niedrig.

[It is the duty of the ECB to concern itself with stable prices. By that the central bank understands an inflation rate of around 2% {the ECB's current official target rate}. Those are the rules. At the moment, the rise in prices in the eurozone is averaging barely 0.5% - a clear falling short of the goal, therefore. The vehemence with which the decision of interest rates is being criticized here in Germany is thus dishonest: if inflation was running so far over the target as it is currently running under, then half of Germany would be crying for higher interest rates.]

There is a danger that the latest actions can create new bubbles that will add to the financial problems while doing little to counter deflation and depression. As Flassbeck writes, "die Staaten sie in ihrem Liberalisierungswahn geradezu dazu ermuntert haben, durch Investments an den Märkten für vorhandene Vermögenstitel virtuelle Vermögenswerte zu „schaffen“, die sich irgendwann wieder in einem großen Knall in Luft auflösen werdem [sic]" ("the state in their liberalization frenzy have all but encouraged [the banks] through investments in the markets for existing asset titles to "create" virtual asset values, which with then sooner or later with set off another big bang in the air").

In other words, the neoliberal deregulation mania has created a situation in which banks are allowed to use additional liquid capital like the ECB's recent actions will produce in order to create new investment bubbles rather than do what they can to generate growth in the real economy.

Tags: angela merkel, austerity economics, eu, euro, european union