Saturday, September 22, 2012

German Finance Minister Wolfgang Schäuble on further crushing Greece and Spain

German Finance Minister Wolfgang Schäuble may not be one of the biggest personal fans of his Chancellor and CDU party chief Angela "Frau Fritz" Merkel. But his down with her brutal, nationalistic austerity politics for their EU subjects partners to squeeze maximum benefit for Germany's One Percent at expense of the rest of the eurozone and of German workers.

The inspired Greek political cartoonist Yannis Iaonnou depicts Schäuble, who is disabled and always uses a wheelchair, as a man riding around in a tank. In this cartoon of 09/03/2012, Iaonnou shows him slicing up a hapless Greek leader (PASOK Party leader and Deputy Prime Minister Evangelos Venizelos) visiting Berlin:

Schäuble wants to do the same to Spain. And more of it Greece. Spiegel Online reports in Schäuble nennt Hilfsprogramm für Spanien unnötig 21.09.2012 that the Herr Finance Minister says Spain don't need no more aid, they just need to impoverish their people more demonstrate their credibility to financial markets by - what else? - austerity, austerity, austerity.

Actually, Spain is probably going to be asking for further aid and the EU will wind up granting it. Greece will also need additional aid if it is to stay in the eurozone, which German officials insist they must. But Schäuble rejected that concept as well. Some of this is obviously positioning in ongoing negotiations. But the starting point of Angie's government is to squeeze the "periphery" countries of the eurozone like Greece and Spain as hard as possible, even though it's wrecking their economies, causing widespread and largely completely unnecessary misery and increasing the actual risks to Germany of an eventual end to the euro.

Part of the irony of all this is that Frau Fritz' "ordoliberlism" is an ideology that sees itself as serving the needs of Big Capital by rolling the system in the victim countries back toward the 19th century, toward capitalism "red in tooth and claw" in the phrase of a famous 19th-century economist. But the "financial markets" which Angie and Schäuble invoke as something very like a deity to justify their vicious policies have for three years been punishing eurozone countries that have followed the austerity menu. Whether that represents cynicism or blind dogma on their part is perhaps a matter for discussion. That it represents astonishing irresponsibility is less doubtful.

In fact, Keynes biographer Robert Skidelsky talks about what a bad idea the austerity mania among European and American political elites really is in Return to capitalism 'red in tooth and claw' spells economic madness Project Syndicate/Guardian 06/21/2012:

Particularly in the United States and Britain since the 1980s, we have witnessed a return to the capitalism "red in tooth and claw" depicted by Karl Marx. The rich and very rich have become very much richer, while everyone else's incomes have stagnated. So most people are not, in fact, four or five times better off than they were in 1930. It is not surprising that they are working longer than Keynes thought they would.
That last reference is a concept of Keynes' that accurately recognized that the technological advances capitalism was producing actually created the possibility to minimize labor and increases leisure time, and therefor to lessen misery and poverty.

Even in the US, where the Obama Administration hasn't (yet) followed the drastic austerity policies being practiced in the eurozone and in Britain, we've all but lost site of the real possibilities implied by that concept of Keynes, which he described in the essay Economic Possibilities for our Grandchildren (1930). In the midst of the Great Depression - which didn't last as long in Britain as the current one has - Keynes wrote:

We are suffering just now from a bad attack of economic pessimism. It is common to hear people say that the epoch of enormous economic progress which characterised the nineteenth century is over; that the rapid improvement in the standard of life is now going to slow down --at any rate in Great Britain; that a decline in prosperity is more likely than an improvement in the decade which lies ahead of us.
But suicidal austerity policies didn't create the subsequent improvements then and they won't now. (See also my post Keynes on solving the "economic problem" 07/18/2012.)

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