Willard-steria from the GOP frontrunner

Gene Lyons catches Willard Romney giving a great example of the level to which today's Republican Party has sunk in Obama's "post-partisan" strategy Salon 02/01/2012:

Mitt Romney has this passage in his stump speech where he all but accuses the president of being a communist.

"President Obama," Romney insists, "believes that government should create equal outcomes. In an entitlement society, everyone receives the same or similar rewards, regardless of education, effort and willingness to take risk. That which is earned by some is redistributed to the others. And the only people who truly enjoy any real rewards are those who do the redistributing — the government."

This when the multimillionaire Wall Street investment banker isn't accusing hecklers of envying his wealth — rarely a successful political tactic, in my experience.

This is one reason I have a hard time thinking of "moderate" and "conservative" wings in today's Christian Republican White People's Party. There just isn't any significant presence in Congress or among the Presidential candidates of anyone who the label "moderate" really fits. Willard may be temperamentally less unsuited for the Oval Office than Newt. But he ain't no moderate.

Tags: 2012 election, gene lyons, mitt romney

European crisis and the US

With all the triumphalist symbolism around the Second World War that is common in US culture, and with all the attention the Holocaust receives as a moral cautionary tale, it's striking how little the once-common truism that economic depression create political instability and provide a breeding grounds for anti-democracy mass movements like Mussolini's and Hitler's gets these days.

Because what's going on in Europe, we're seeing a live reminder. Yet the general awareness of it in the US is even worse than "it can't happen here." (It can, of course.) It's also, "It can't happen in Europe", too. Yet Hungary has just morphed its government into an authoritarian form. And the euro crisis has disturbing political dimensions, too.

Ed Harrison of Credit Writedowns gives a good summary of what's going on with the euro crisis, which is part of the larger depression and the serious weakness of large banks in Europe, and also of what it could mean to the US in United States of Europe? What it Will Take to Save the Continent from Economic Collapse Alternet 01/31/2012:

The dilemma Europe now faces is complicated -- not least because the European Union comprises 27 separate sovereign nations and the euro area, where the chief problems lie, is a currency union that has 17 members itself. Beyond that, the euro is flawed both in design and in execution. It hearkens back to the gold standard and its fixed exchange rate system which necessitated a deflationary policy response to the deep downturn of 1929, ending in the Great Depression and World War II. Unless drastic action is taken, we will soon find ourselves in another Great Depression.

He explains in an accessible way the policy tangle currently facing the eurozone and what Angela Merkel's austerity policies are incapable of solving it.

Here's an example of his summary of the crisis:

The bottom line is that Italy, one of Europe's largest economies, faces a dire situation and the solution on offer insures default as a likely outcome without tacit central bank support. That is an outcome which means a run on Italian banks, insolvency in Spain from contagion in Italy, core euro bank insolvency due to exposure to Italian bank and sovereign debt and widespread credit default swap triggers which must be paid by American banks. Conclusion: an Italian default would collapse the entire global financial system in short order. [my emphasis]

He then adds, optimistically, "So, a country as large as Italy will not be allowed to fail. European officials will keep Italy from death's door by hook or by crook because they know how dire an outcome an Italian government default would be."

Given the level of irresponsibility and incompetence we've seen in this crisis the last two years from Britain, France and Germany, I would say he's been very optimistic even on that seemingly obvious assumption.

He does provide a really good description of the concept of "transfer union". It would help our domestic discussions on the economy if that were a generally familiar concept and people had a basic understanding of how that works in the US, which is a "transfer union". Which, as Harrison points out, so are "all national economies."

Tags: eu, euro, european union

Change in Afghanistan combat role?

This is encouraging news. The Obama Administration is announcing that the US combat role in Afghanistan will be ending in 2013, earlier than previously projected. It's not a complete withdrawal. And, of course, the decision can be reversed. But this is still real progress, and a result in significant part of public opposition to the war and the peace movement, to which the Occupy movement also contributed in an important way.

This is a report from Alyona Minkovski of The Alyona Show, MSM: US Wars go Off the Record YouTube date 02/02/2012:



David Cloud's report, U.S. and allies plan to give Afghanistan forces lead role in 2013 Los Angeles Times 02/01/2012, suggests that pressure from NATO allies also played a significant role:

By announcing a specific timetable, U.S. officials are hoping to head off a push by allies to pull out their forces more quickly. Public support for the war is falling in many countries, and with their economies struggling, governments are under pressure to trim their defense budgets.

The top commander in Afghanistan, U.S. Marine Corps Gen. John R. Allen, said in December that he was planning such a shift, but Panetta's comment Wednesday on his way to a NATO meeting in Brussels marked the first time a senior U.S. official had provided a timetable.

But Anna Mulrine suggests in the Christian Science Monitor that the actual role for US troops may not change very much with this announcement (US troops in Afghanistan: How big is shift from 'combat' to 'assistance'? 02/02/2012):

The move away from a “combat role” into, as Mr. [Secretary of Defense Leon] Panetta explained it, an “advise and assist role” is replete with some murky military definitions.

For some time, Afghan forces have been “in the lead” for security in some provinces throughout the country. For US troops this still means providing plenty of help, analysts note. US soldiers and Marines come to the aid of Afghan forces in battle and continue to supply water, transportation, and other vital supplies.

Panetta explained that this transition will often be a matter of formality. “It’s still a pretty robust role that we’ll be engaged in,” he said Wednesday. “It’s not going to be kind of the formal combat role that we are now, but it clearly is going to be a role where we are going to be providing a great deal of support and assistance to the Afghan Army.”

He added, “Look, it doesn’t mean that – you know, we’re not – we’re not going to be combat-ready.”

US troops will have to continue to call on this combat-readiness in a country that remains in violent turmoil.

Tags: afghanistan war

Anti-Europe Brit gets Germany's Greek proposal right for the wrong reasons

One challenging aspect of politics is that sometimes you find yourself agreeing with a particular position taken by someone is really really coming at the issue from a whole different angle. Progressives have found themselves having moments like that in connection with the Ron "Papa Doc" Paul Presidential campaign.

I encounter that in the current crisis of the euro and the European Union. In general, I've thought the EU has mostly played a very constructive role until these last couple of years. I had very much hoped that the EU "project", as it's often called, would continue to move forward toward a more united Europe.

The politics of the EU generally had the parties of the left and centers and many conservatives supporting it. Even Basque regionalist groups in Spain tended to think that the EU offered them advantages. In the EU member countries, major business interests tended to be in favor of the EU because it offered demonstrable business benefits in its promotion of peace and stability and in the common market aspects.

Opposition has tended to come from far-right parties that were interested in promoting old-fashioned nationalism. There has been widespread public support for the EU, though it was generally agreed that the organization suffered from a "democratic deficit," in not being enough of a representative government. But as often happens, not just in government, there is a tendency to postpone decisions on thorny but important issues. Now the delays in fixing the known problems with the euro have not only made the matter urgent but, at this stage, probably irreparable.


British Conservatives, though, were generally less enthusiastic about the EU than many of their counterparts in other EU nations. And Britain generally, but especially the Conservatives, has tried to keep itself more at a distance from the unity process than Germany and France, the two other largest economies in the EU. They were not pushing the EU to adopt the kinds of changes that could have avoided the current fiasco in the eurozone, like making the European Central Bank the buyer of last resort for sovereign debt in the eurozone, and certainly not pushing for making the EU more of a fiscal and transfer union.

So I wasn't sympathetic when David Cameron tried to use the December EU summit to twist new concessions out of the EU partners on behalf of Britain financial lobby. I think the Brits in general and the Conservatives in particular have been irresponsible in their approach to the EU.

So I'm a little bothered to be momentarily in agreement with this anti-Europe British rightwinger: Nigel Farage: Whatever happened to the veto? 02/01/2012. He's not part of the Conservative Party but the head of the UK Independence Party, a rightwing nationalist party that opposes Britain's membership in the EU. Here was his statement Monday:



Roddy Thomson reports on the incident in British MEP causes furore with Nazi jibe AFP/Yahoo! News UK 02/01/2012: "parliament speaker Martin "Gustav Noske" Schulz also intervened with a comment about nationalism ... Farage was called to order from the speaker's chair, before Schulz turned off his microphone, Schulz's spokesman Armin Machmer said." Schulz is the German Social Democrat who is nevertheless an Angiebot and who first endorsed Angie's Greek commissar/Gauleiter proposal, then joined her in trying to walk it back.

Things have changed, Social Dems and Greens. The EU had great promise, but now under Angie's leadership it has become a threat to democracy in Europe. The left parties need to take clear stands against Angie's austerity obsession and he inclination to want to knock off governments in the eurozone that irritate her and the big banks. Her proposal for a non-elected EU overseer for Greece that the Financial Times made public was a major stinker. Unlike Angiebot Martin Schultz, the current head of the German Social Democratic Party, Sigmar Gabriel, came out clearly against it. Gabriel didn't use the term "Gauleiter" to describe it. But he did use "dictator". And he threw in sarcastically that all Angie's proposal lacked was to appoint a German to the position and put him in a uniform.

There are very legitimate, democratic reasons for people in Europe to be very upset with the EU right now, and particularly with Angie's policies dominating it. The left parties - and the conservative ones, for that matter - should be taking a forthright stand in favor of democracy in this situation. Ceding the anti-EU position at this moment in time to far-right parties is not a good idea.

Here's an earlier video of him appearing on FOX News:

Nigel Farage- Unelected puppets of a German-dominated EU (Cavuto, Fox News) 11/25/2012 YouTube date



At about 3:45, he refers to Greeks' "different work ethic" in comparison to Germany's. In that case, he was holding up Germany as a good example. FOX News is probably an appropriate place for him to appear.

Tags: angela merkel, eu, euro, european union

Gingrichism and the Republican Party

The conventional wisdom, in this case one with some firm base in reality, is that Willard "Mitt" Romney will win the Republican nomination for the Presidency.

The general election will almost certainly be a tough, competitive one. This is the first Presidential election in the "Citizen's United" era. That disgraceful Supreme Court decision vastly increases the means for the wealthy to buy control of the political process, even as democratic forms are maintained. Not that Republicans are sticking with strict democratic forms. The various voter-suppression laws and tactics that have become standard operating procedure for the Republicans will also be widespread. The Southern segregation system was heavily based on voter-suppression tactics. This stuff is straight out of the segregationist playbook. The segregated South maintained democratic forms, as well, though the substance was very different.

Charlie Pierce reminds us how much Newt Gingrich has influenced the Republican Part of today, even though it's unlikely to crown him with a Presidential nomination, in Gingrichism Will Go Down with Gingrich, Damnit! Esquire Politics Blog 01/31/2012:

Over the past couple of days, Gingrich has been haring chaotically all over Florida, his attacks on Willard Romney becoming more and more virulent. (Not that there's anything wrong with that.) Just yesterday, he ripped Romney for once vetoing funds that would have been used to provide kosher meals to Jewish nursing-home residents in Massachusetts (Really, Willard? What a putz.) and for not allowing Catholic hospitals the "conscience" parachute to deny rape victims emergency contraception. These actions, said Gingrich, evinced "a lack of concern for religious liberty." (Translation: mormonmormonmormonmormon....) The spokesman for the Gingrich super-PAC called Romney "a disgraceful and despicable candidate," which at least proves that the spokesman has learned well from the master.

This is the loud, clattering end of the Gingrich style in American politics — a technique of attack politics in which you can say almost anything about almost anyone today, and it doesn't matter if you said something different yesterday, and it doesn't matter if you are stone guilty of exactly the same thing of which you are accusing the other person, and it doesn't matter if what you're saying is even remotely tethered to the truth. All that matters is that you are saying it. Today. With all the contemptuous brio you can muster. This is what Newt Gingrich taught a generation of Republican politicians.

One of the interesting symptoms of today's Republican culture warriors is that their images of the dirty hippies antiwar protesters of the 1960s. Some of their images of the same bear some superficial relation to actual history. Others are more in the category of urban folklore, perhaps treasured all the more because of that. One of the favorite in the latter category is the tale of hippie girls spitting on soldiers and protesters calling veterans "baby-killers". So far as anyone has been able to determine, the spitting story is purely imagined. And the "baby-killer" epithet was normally directed at policy-makers when it was used, as in the chant, "Hey, hey, LBJ/How many kids did you kill today?" Except of course for someone like war criminal Lt. William Calley, who Nixon turned into a hero for hardcore culture warriors of the time by commuting his sentence, which was based on his deliberate, systematic murder of unarmed men, women and children - yes, including babies - at My Lai/Sơn Mỹ village.

But "baby killer" has become a routine accusation of abortion opponents, not only against staff at abortion clinics but at policymakers, as well. Pierce caught Newt in an ugly version of this in Florida:

Gingrich stated his opposition to all forms of embryonic stem-cell research, calling for a re-instatement of a ban that was lifted by the Obama administration. He also expressed some doubts about certain practices involved in in vitro fertilization. So far, so wingnut. ... So far, so campaign. But what sent the speech spiraling into an intellectual no-fly zone was the motive ascribed by Gingrich to the scientists who developed, and who currently practice, stem-cell research.

In working with stem-cells, Gingrich said, these scientists were enabling "the use of science to desensitize society over the killing of babies."

Breathtaking.

You could argue that stem-cell research represents hubristic overreach on the part of the scientists. You could argue that those scientists are fundamentally amoral and that they are only in it for the pot of gold that waits for whoever finds a way to use stem cells to cure some horrendous disease. ...

But consider, for a moment, what Gingrich said. He accused these scientists not of hubris or cupidity, and he did not accuse them of idly casting aside the philosophical considerations of their work. He is saying that these scientists, and their work, are deliberately engaged in a campaign to make the "killing of babies" easier in American society, that their grand design is not fame and fortune, nor ridding the world of terrible illness, but, rather, that they are in service to a dark agenda to turn America into some kind of futuristic child-killing dystopia. I'm sorry, but this is just nuts. I mean, I've heard the argument that climate scientists have invented the "hoax" of global climate change in order to get rich, but that's a nursery rhyme compared to what Gingrich is dealing out here.

This is your Republican Party on Oxycontin (aka, hillbilly heroin, chief Party ideologue Rush Limbaugh's one-time drug of choice).

Tags: newt gingrich, radical right, republican party

Angie's dragon and its retreat

News is quickly emerging about how negative a reaction Germany's Chancellor Angela Merkel provoked with her proposal to appoint a financial dictator to run Greece. Die Welt reports (Merkel macht kehrt im Griechenland-Fiasko 30.01.2012) of Angie's proposal for putting Greece under a Gauleiter: "Das Land hätte damit endgültig seine Unabhängigkeit verloren – und vor allem: nicht de facto, sondern für alle erkennbar." ("The country {Greece} would have then finally lost its independence - and above all, not de facto, but obvious to everyone.") The accurate implication of that, of course, is that the current bankers' collection-agent government in Greece isn't really a democratic national government. But at least it maintains the formal conventions of an independent national government. Angie wanted to take even that away.

As I've said before, Angie seems to have been very impressed with Dick Cheney's foreign policy.

Martin Schulz: President of European Parliament, German Social Democrat and shameless Angiebot

Martin Schulz, the pitiful German Social Democrat who is President of the European Parliament is walking back his previous endorsement for Angie's Gauleiter proposal. But it sounds like the guy is a real Angiebot:

Und Martin Schulz, der neue Präsident des Europaparlaments, kann sich Herzlichkeit leisten: „Frau Merkel ist auch meine Bundeskanzlerin", sagt er. Schulz freut sich sichtlich, dass er an diesem Tag der erste auf der europäischen Bühne sein kann, der Angela Merkel seine Kritik überbringen kann – weil die Kanzlerin erst zu ihm kommt, danach zu ihren Kollegen. „Wir haben über unterschiedliche Auffassungen mehr gesprochen als über Gemeinsamkeiten", sagt er.

Und im Gehen, Merkel ist schon weg: „Es hat schon sinnvollere Äußerungen gegeben", sagt er zur deutschen Idee. Natürlich müsse es eine Aufsicht geben, aber das geschehe doch bereits. „Man sollte Begriffe wie Staatskommissar oder Sparkommissar vermeiden." Und er setzt noch einen hinterher: „Es gibt Leute, die dazu beitragen, die ohnehin angespannte Stimmung zwischen den Mitgliedstaaten noch zu verschärfen."

[And Martin Schulz, the new President of the European Parliament, can provide heartiness: "Frau Merkel is also my Federal Chancellor," he says. Schulz is visibly happy that he can be the first on the European stage on this day to bring his criticism to Angela Merkel - because the Chancellor comes to him first, then to his colleagues afterward. "We discussed more about different evaluations than about agreements," he says.

And in leaving, Merkel is already gone: "There have certainly been more sensible statements," he said about the German idea [Angie's Greek Gauleiter proposal]. Of course there has to be oversight, but that's already happening. "One should avoid concepts like state commissar or savings commissar." And he then adds: "There are people who would use that to intensify the already tense mood between the member states."

Duh, yuh think, Martin? Are those the kinds of insights you get from being one of Angie's poodles? I hope she scratches behind your ears for you.

But he's right about the need to avoid those kinds of expressions. "Gauleiter" or "dictator" would be more appropriate for what Angie proposed and for which this sad excuse for a democrat originally endorsed. And this guy is President of the European Parliament! That is just sad.

Carsten Volkery reports for Spiegel International on the negative reactions to the Greek dictatorship idea that Angie and her boy Martin Schulz proposed: Merkel Gets Her Fiscal Pact: EU Summit Marred by Fears of German Domination 01/31/2012.

The terms of the agreement are hard to parse from the news reports I've seen, probably because the terms weren't public until Tuesday when the "fiscal pact" was finalized. Also, a lot of the reporters are probably just being lazy in trying to understand and explain it. The spin from Angie's government and from the summit generally was that, hey, we're made great progress and the financial markets should love us. I guess that was to be expected.

But there doesn't seem to be an awful lot to this "fiscal compact". For one thing, the critical enforcement mechanism won't be decided until the scheduled March EU summit.

And what kind of "fiscal compact" is it? This piece from BBC Online, The eurozone: Another step by Europe editor Gavin Hewitt , leads the reader to believe that there is no treaty change involved. If you read the very closely, you might wonder if he doesn't mean there's no change to the EU Treaty. Or maybe he just means there's no treaty change for Britain involved, so who cares?

Here's the text of the thing, the "thing" being officially called Treaty on Stability, Coordination and Governance in the Economic and Monetary Union. The magic numbers are 3%, the maximum amount an annual deficit can be in relation to GDP, and 60%, the allowed ration of national public debt to GDP.

Article 3 designates a "fiscal compact" among the members, but this is an international treaty. It does designate the EU Commission as having an enforcement role in determining whether the countries involved are complying with the fiscal limits. The European Court of Justice is the juridical enforcement mechanism. This represents a compromise and, for Angie, a climb-down from her original proposal of having the EU Commission impose automatic sanctions on violators. It's not a good policy. But it does seem to avoid what in her original proposal would have been effectively a German veto over national budgets if the fiscal targets aren't met. The treaty does specify that "a correction mechanism shall be triggered automatically," though the mechanism in itself isn't defined in the text.

I don't claim any technical qualifications to interpret treaty language. But from the text and the commentary that I have seen, it appears that a shadow of Angie's original automatic enforcement mechanism survives. The EU Commission will decide on sanctions for violators unless a majority of the countries vote to oppose the sanctions. But the sanctions won't take effect until a case is brought to the European Court of Justice.

The treaty would take effect on January 1, 2013 if it has been ratified by 12 of the eurozone members.

It's a bad idea. And it's very doubtful whether it's even enforceable in this form. But it's not as bad as Angie wanted it to be. Plus, it's increasingly obvious to me that the eurozone members know that the Angie farce can't go on that much longer. I think the non-German eurozone members are basically playing for time, with everyone trying to avoid being the first country to bail out of the euro and everyone developing contingency plans for how to minimize the damage to themselves when this increasingly shaky house of cards collapses.

It's worth noting that the EU has always had some stringent budget deficit rules. And that they were often observed in the breach. (David Böcking und Florian Diekmann, Folgen des EU-Fiskalpakts.Kontinent der Schuldensünder Spiegel Online 31.01.2012) Although it was clearly Angie's intent to make the controls tighter and more effective, time will tell how much more effective they are. And, for the immediate future, as long the depression is going on, less effective will be a good thing, because the eurozone and the EU need more stimulative spending, not less. In an ideal "fiscal and transfer union", Germany would provide the bulk of the stimulus. But nothing run by Angela Merkel is going to be even close to ideal.

Tags: angela merkel, eu, euro, european union, greece, post-democracy

European criticism of Angie's Greek policies

What happened the last few days with German Chancellor Angela Merkel's policies toward Greece is really remarkable. She proposed what can only be described as a dictator for Greece, responsible in theory to the EU but all but surely to be controlled by her. It would have given the new Gauleiter (the title for area chiefs for the Nazi Party back in the day) for Greece complete power over the Greek national budget with the restriction that repaying the sovereign debt would be the top priority over all others.

The good news is that the negative reaction from Greece and other EU members finally made Angie back off, though she was still pushing the idea on Monday. And the fiscal restrictions that the current EU summit may agree upon seem, according to the news reports, to be modified to the point that Germany won't have a routine veto over all the EU national budgets, which is what Angie actually wanted.

Yes, there are leading European politicians opposing neoliberalism: here, Austria's Laura Rudas

The Social Democratic Party (SPD) Sigmar Gabriel publicly opposed the proposal and said explicitly that such an official would be like a "dictator" who would be in a position "to abolish democracy in Greece". He went on to say, with sarcasm and surprise, that the only thing left would be to appoint a German to the position and put him in a "uniform". ("Sparkommissar" für Griechenland wäre "Diktator" Stern Online 30.01.2012)

This is encouraging to see that the major opposition party, the SPD, is still capable of opposing something like this.


But what the Hölle was going with the SPD guy Martin "Gustav Noske" Schulz who is President of the European Parliament instead endorsing Angie's Greek Gauleiter idea? That jerk must be like the Ben Nelson of German Social Democracy. They should kick him out of the SPD altogether. He would have been better off to imitate Sgt. Schulz of Hogan's Heroes and just say, "I know nothing, I see nothing!"

I was encouraged to see that Austrian Chancellor Wehner Faymann (Social Democratic, SPÖ) on his Facebook page clearly, if more diplomatically than his German colleague, criticize Angie's Greek Gauleiter scheme saying, "democratic values should not be hollowed out."

Faymann also talks about the larger eurozone problems in an English language article: Christoph Schult, Interview with Austrian Chancellor Faymann: 'Don't Overestimate the Fiscal Pact' Spiegel International 01/30/2012. Faymann supports a "debt brake" being added to the Austrian Constitution to limit the amount of debt the country can take on relative to GDP, a really bad idea in itself. But given Angie's current course, in the short run protecting Austria's national independence may require minimizing the debt burden more than sensible economic policy would otherwise allow.

Faymann favors a modified version of the idea of having the European Central Bank (ECB) act as a buyer of last resort for eurozone sovereign debt, something that would have been necessary for the eurozone to continue functioning if the EU had acted sensibly enough and early enough to save it. (The last pessimistic part is my view.) The short-term effect on Austria and most EU countries is likely to be bad when the euro ends (to put it mildly!), so Faymann is understandably still trying to take the position of saving it. I certainly hope he's making plans for a quick transition back to the Austrian schilling when the time comes, though. That idea for the ECB, though, is something that Angie completely rejects.

And I'm sure the Princess Angie von Merkel wouldn't be pleased to hear him be realistically modest about the likely benefits of the fiscal pact that is the supposedly big accomplishment she wants to see come out of the current summit: "one shouldn't overestimate the fiscal pact. Because of the narrow corset created by the Lisbon Treaty, one can't claim that we're reinventing the euro zone." And, of course, reinventing the eurozone - and fast - would be what it would require to save the euro.

And Faymann won back some credibility in my mind with this exchange:

SPIEGEL: With this Social Democratic agenda, you are rather in the minority among the EU's state and government leaders.

Faymann: Actually this agenda should be consistent with Christian Democratic or Christian Socialist values. I see the biggest difference with the neo-liberals.

SPIEGEL: In Davos Chancellor Merkel said that stricter rules are needed in Europe. It sounds more like a punishment than solidarity.

Faymann: Rules aren't positive or negative, it's about the content. I would welcome it if we regulated the financial markets more strictly, cut down on speculation and founded a European ratings agency. Yes, our high debts make us vulnerable, but speculators have intensified the crisis. Therefore, in the form of the transaction tax, they should also be involved in overcoming the crisis. [my emphasis]

He also makes what is an important point to keep in mind with this whole euro business. Everyone has had a few months now to think seriously about what would happen when a country leaves the euro. (I say when, not if, because I'm a pessimist on this.) But no one has a really good idea what it will look like, in no small part because the extent of credit default swap (CDS) exposure by major financial institution is unknown to everyone, even the fabled Gnomes of Zurich. Faymann says: "All of the experts with whom I speak say they can't reliably promise an orderly insolvency. Contagion is incalculable. It would be like a real-life experiment ..."

And not a fun one.

Faymann's interview and Facebook comments make me think he sees the proverbial writing on the wall and he is expecting the proverbial s*** to hit the proverbial fan soon.

My favorite Austrian Social Democratic leader, Laura Rudas, who is one of the main figures currently trying to expand the Party's appeal to younger voters, had an even more interesting piece on her Facebook page, "Schuldenabbau als Weg zur Unabhängigkeit" ("Debt Reduction as a way to independence"). Also in Aktuell 27.01.2012. She is the co-business manager for the SPÖ. She summarizes her points in slogan form at the start:

Finanzmärkte regulieren. Finanztransaktionssteuer einführen. Bildung, Forschung und Gesundheit voranbringen. Intelligent investieren. Wirtschaftswachstum ankurbeln. Alle diese Agenden brauchen vor allem eins: Autonomie in der politischen Prioritätensetzung. Das ist nur möglich, wenn wir uns aus den Fesseln der Finanzmärkte befreien!

[Regulate the financial markets. Introduction a financial transaction tax {aka, a Tobin tax}. Improve education, research and health. Crank up economic growth. All of these agendas require above all one thing: autonomy in the setting of political priorities. That is only possible, if we free ourselves from the chains of the financial markets!]

Dang! That sounds downright Jacksonian to me!

Her article goes on to argue in explicit terms that Austria's political priorities cannot be determined by the financial markets, which of course is Angie's goal and approach. She explicitly defends taxes as necessary for retirement funds (which are basically all run through the state in Austria), education, the health care system and other parts of what we call the social safety net in the US. And she calls for progressive tax increases to achieve agreed-upon debt limits.

She also criticize Austrian banks for implicating themselves in poor risk bets in eastern Europe.

Politics is politics, and as a Party figure she has to defend even suboptimal policies, like new debt limits during a depression. But I'm reading what she says in the current Austrian and eurozone context. And it sounds like a strategy primarily directed at protecting Austria against (1) bond speculators and (2) Angie's Anschluss economics:

In jedem Dilemma aber gibt es meist auch Profiteure. Und so hat auch die Abhängigkeit ganzer Staaten und das damit einhergehende Zurückdrängen der Politik ihre Profiteure. Oder ist es sogar Kalkül mancher, dass diese Abhängigkeit gegeben ist? Oder auch, dass man Finanzmärkte kaum regulieren kann, wenn man in ihrer Abhängigkeit steckt?

[In every dilemma, there are also usually profiteers. And so the dependence of whole countries and the suppression of political priorities that comes with it also has profiteers. Or is it even the calculation of some, that this dependence just is so {i.e., that it should be that way}? Or also, that one can scarcely regulate the financial markets if one is stuck in dependence to them?]

In the current context, this is clearly directed against both the bond speculators and Angie's ordoliberal policies.

It's very encouraging to see the SPÖ's sounding so aware of the issue and so ready to deal with it.

Tags: angela merkel, eu, euro, european union, laura rudas, werner faymann

New EU summit: the drama continues

The euro crisis is starting to seem like a B-movie tragedy, where everyone can see where the plot is going but the motives are hard to fathom and it's dragging on forever.

The latest EU summit started on Monday. Angela Merkel may be Obama's biggest threat to re-election. Because if Angie keeps getting her way, it maximizes the chances that the eurozone will crack up this year and maybe take down some major banks with it, like the mortgage crisis did in 2008.

This Euronews report plays up Angie's superficial rhetoric about the need to promote growth, EU leaders shift focus from austerity to growth 01/30/2012. But Angie isn't budging from her "ordoliberal" austerity policies. Her "growth" proposals pretty much consist of more austerity and anti-labor legislation, with a few extra dollars to be kicked in to so-far-undefined growth measures from various EU funds that has surpluses at the moment. In this report, we see her stressing the need for boosting youth employment, which Angie sees as yet another chance to weaken labor laws. She apparently expects the new conservative government in Spain to lead the way on that approach to youth unemployment.



Greece is bankrupt in all but name and they still haven't tied down the "voluntary" writedowns from private holders of Greek debt that were part of the stopgap measure for Greece agreed on at the December EU summit.

Portugal is on the verge of bankruptcy, with Italy, Spain and Ireland kind of shaky. And Europe is in a new recession. Belgium just had an apparently pretty effective one-day general strike against government austerity measures there.


Angie's proposal for an EU Gauleiter to run Greece until their debts are paid down and the bond markets like them again got a pretty negative reaction once the Financial Times reported on it publicly. Even Greece's Post Democracy 1.0 government, installed at Angie's insistence to act as banks' debt collectors, to her to go blow on that one. Austria's Social Democratic Chancellor Werner Faymann, who has been pushing a foolish "debt brake" austerity proposal like the one Angie is demanding from other EU members, criticized Angie's Greek Gauleiter proposal on his Facebook page (01/30.2012), though in more diplomatic language than Angie's proposal deserved:

Die Bedingungen, die Griechenland in den kommenden Jahren zu erfüllen hat, müssen strikt bleiben. Die Einhaltung dieser Bedingungen wird von der Trojka aus Europäischer Kommission, Internationalem Währungsfonds und Europäischer Zentralbank streng überprüft, überwacht und auch eingefordert.

Griechenland kann den Staatshaushalt derzeit bekanntlich nicht über Anleihen auf dem Finanzmarkt refinanzieren. Bis dies wieder möglich ist, sind glaubwürdige und feuerfeste Hilfsprogramme der internationalen Gemeinschaft notwendig, um die Eurozone stabil zu halten. Die Stabilität des gemeinsamen Währungsraums liegt auch im Interesse Österreichs. Es ist ganz klar, die Bedingungen sind einzuhalten. Deswegen muss aber niemand beleidigt werden, deswegen dürfen nicht demokratische Werte ausgehöhlt werden.

The conditions that Greece has to fulfill in the coming years must remain strict. The observance of the conditions will be monitored by the Troika of the European Commission, the International Monetary Fund and the European Central Bank.

It is known that Greece cannot refinance its budget with loans on the financial market. Until this is once again possible, credible and fireproof assistance programs from the international community are necessary in order to keep the eurozone stable. The stability of the common currency [the euro] is also in Austria's interest. It is clear that the conditions have to be met. But that is why no one should be insulted, that is why democratic values should not be hollowed out. [my emphasis]

Faymann sounds almost as timid as a US Democrat there. But still, even in diplomatese, it's clear that he's criticizing Angie's Post-Democracy 2.0 proposal for Greece.

Austria has had some rather unpleasant experiences with German Gauleiters in the last century.

Angie's policies are making all the eurozone's problems that much worse. Heckuva job, Angie!

Tags: angela merkel, eu, euro, european union, greece, post-democracy, werner faymann

Krugman on European austerity and that German hyper-inflation thing

Paul Krugman has been looking at the lengths of the current depression in Britain and Italy compared with the Great Depression. In Britain, this one has gone on longer. (The Worse-than Club 01/28/2012) In Italy, it has gone on as long.

Heinrich Brüning (1885-1970)

And he makes an important historical point about the German economy in those days. Conservatives like to claim that the "hyper-inflation" in Germany in the 1920s resulted in bringing Hitler to power. Krugman writes:

France and Germany are doing much better than in the early 1930s - but then France and Germany had terrible, deflationist policies in the early 1930s. (It was the Brüning deflation, not the Weimar inflation, that brought you-know-who to power).

With two of Europe’s big four economies doing worse than they did in the Great Depression, at least in terms of GDP — and that’s three of five if you count Spain — do you think the austerity advocates might consider that maybe, possibly, they’re on the wrong track?

Peter Gay provided a helpful chart on this subjects in The Dilemma of Democratic Socialism: Eduard Bernstein's Challenge to Marx (1952):


The hyper-inflation incident was primarily a phenomenon of 1923. This is the period about which those stories are told about a loaf of bread costing a wheelbarrow full of money or whatever. A new currency was introduced late in 1923 and inflation stabilized.

This chart of election results shows the election results in millions of votes for the NSDAP (National Socialists, Nazi Party). In 1924, the year following the hyper-inflation, the NSDAP got 0.9 million votes. That fell to 0.8 million in 1928. Then in rose dramatically to 6.4 million in 1930 and 13.7 million in July of 1932. What else might have happened between 1924 and 1930? What could it have been?

Oh, yeah, that Great Depression thing. Economic crash, soaring unemployment. And Heinrich Brüning's Chancellorship of 1930-32.

None of this implies that the hyper-inflation of the early 1920s had no lasting effect. It's just that it's hard to match the notion that hyper-inflation brought the Nazis to power with the historical record as shown in election results.

While we're on the subject, it's worth noting that the NSDAP vote dropped significantly from the July 1932 election to November 1932. It's true that Hitler came to power mostly through electoral means. But Hitler's  feverish politicking that got him appointed Chancellor at the end of January 1933 was driven by his falling electoral support.

Tags: german history, hitler, paul krugman, weimar republic

With another EU summit coming, Angie demands Post-Democracy 2.0 for Greece

The euro, the EU and democracy in Europe will have another dramatic day on Monday at the next EU summit. Angie wants to have agreement coming out of that for all EU countries participating, not just the eurozone, to permanently commit to austerity economics, not only in the current depression but basically forevermore.

This can only go on for so long. What can't work will eventually stop working.

And the sovereign debt crisis goes on, in an acute way. Angie's austerity policies can only make the immediate sovereign debt problem worse.

Economist Nouriel Roubini sees Portugal slipping into a Greek state of crisis, probably needing a writedown of the debt. (Roubini prophezeit Portugal griechische Tragödie Financial Times Deutschland [FTD] 28.01.2012) Portugal's interest rates on their bonds have spiked to clearly unsustainable levels. The Portuguese Prime Minister, who not long ago suggested that unemployed Portuguese citizens should consider emigrating to Brazil or Angola, seems to be hiding his head in the side, perhaps for fear of Angie's wrath.

Speaking at Davos, Roubini suggested that Greece might be leaving the eurozone within a year.

And it turns out that the Princess Angela von Merkel may be ready to impose Post Democracy 2.0 in Greece. According to the Financial Times, Angie wants to basically install a financial dictator representing the euro group (read: Germany) to have final say over the Greek budget and expenditures, with the power to override the democratically-elected government. (Though the current debt-collectors' Post Democratic 1.0 regime in Athens previously imposed by Angie is democratic only in a formal sense.) Peter Spiegel and Kerin Hope report in Call for EU to control Greek budget 01/27/2012:

The German government wants Greece to cede sovereignty over tax and spending decisions to a eurozone “budget commissioner” to secure a second €130bn bail-out, according to a copy of the proposal obtained by the Financial Times.

In what would amount to an extraordinary extension of European Union control over a member state, the new commissioner would have the power to veto budget decisions taken by the Greek government if they were not in line with targets set by international lenders. The new administrator, appointed by other eurozone finance ministers, would take responsibility for overseeing "all major blocks of expenditure" by the Greek government.

"Budget consolidation has to be put under a strict steering and control system," the proposal reads. "Given the disappointing compliance so far, Greece has to accept shifting budgetary sovereignty to the European level for a certain period of time."

Angie has lost it. "It" in this case being her sense for democracy.

And since it is the rightwing parties in Europe who have been working nationalist themes for years in opposition to the European Union, this hands them one more political advantage. What Europe, the European Union and the eurozone need more than anything right now is to get Angie out of the European German Chancellorship. (That was an actual Freudian typo on my part there.)

This is obscene:

Athens would also be forced to adopt a law permanently committing state revenues to debt service "first and foremost". ...

Greek voters have already expressed anger about EU attempts to assist in implementing reforms. Horst Reichenbach, the German national who heads an EU task force to assist Greece, was depicted in German military garb by leftwing Greek newspapers when he arrived last year.

Herr Reichenbach received the un-fond nickname in Greece of Third Reichenbach.

And despite IMF General Manager's criticism of Angie's austerity policies this past week, the IMF is joining with Angie to further impoverish Greece and the Greeks:

Even before Germany circulated its proposal, the EU and International Monetary Fund had presented a 10-page list of "prior actions" Athens must implement before the new bail-out is agreed. According to a copy of the document, also obtained by the FT, Greece must cut an additional 150,000 government jobs within three years.

Not so long ago, it was conventional wisdom that a depression could be a danger to democracy. And here is Germany proposing to set aside another major chunk of the superficial appearance of democracy in Greece for the greed of the banksters. This is just awful. And this to override a government that Angie insisted on installing just a few weeks ago for the main purpose of collecting debts for the banks.

From Angie's proposal itself:

Greece has to legally commit itself to giving absolute priority to future debt service. This commitment has to be legally enshrined by the Greek Parliament. State revenues are to be used first and foremost for debt service, only any remaining revenue may be used to finance primary expenditure. This will reassure public and private creditors that the Hellenic Republic will honour its comittments [sic] after PSI and will positively influence market access. De facto elimination of the possibility of a default would make the threat of a non-disbursement of a GRC II tranche much more credible. If a future tranche is not disbursed, Greece can not threaten its lenders with a default, but will instead have to accept further cuts in primary expenditures as the only possible consequence of any non-disbursement. [my emphasis]

Hungary is not the only country in Europe in which democracy is under immediate threat.

Tags: angela merkel, eu, european union, greece, post-democracy

Hopeful sign from the Obama Administration on financial crime

Even the chronically skeptical Matt Taibbi is hopeful about recent developments in the Obama Administration's approach to financial crime. Matt Taibbi ponders whether Obama's embrace of populist rhetoric is already impacting Wall Street Countdown with Keith Olbermann YouTube date 01/28/2012:



Tags: matt taibbi, obama administration