Taoiseach on euro crisis: “I think we have to get on with what we have now…”

Oh dear…  RTÉ reports Taoiseach Enda Kenny sticking his head in the sand insisting that the status quo is perfectly adequate to deal with the eurozone crisis.

Speaking in Warsaw, Mr Kenny admitted there had been a lot of discussion among eurozone leaders about where the crisis was headed, and that there would be a good deal more discussion before heads of government meet in mid October.

When asked if he supports Treaty change in order to facilitate a deeper fiscal union, Mr Kenny said:

“I don’t … I’ve made this known to other leaders. It’s very important that having put Lisbon in place that the governments of the EU work that treaty in the way that it was intended … I think we have to get on with what we have now, and focus on the potential of the Lisbon treaty to put Europe where we believe it should be, right up there at the very top.”

The reaction of the “other leaders” is not yet known…  And no offence to RTÉ, but the opinion of European Commission President José Manuel Barroso is somewhat less important than that of Frau Bundeskanzlerin.  Or that of her Finance Minister,  Wolfgang Schäuble.

Or, indeed, that of President Sarkozy – “We have to converge.  The status quo is impossible.”

And the German leader may not be able to go back to the well.

…the message that came from today’s vote was that Germany’s political class is firmly committed to fighting for and saving the euro even if the German people are growing more wary by the day.

That may prove a factor in the future – the growing divergence between the political elite and the people.

What has happened is that a debate over Europe has now started in Germany. Europe as a subject was never much of an issue politically. Now it is. It is a settled issue no longer.

Every day brings new indications of Germans rethinking their approach to European integration.

Philip Lane’s graphic didn’t include Ireland.  But the market’s view of the ECB is beginning to look like a very good fit.

Because the status quo won’t resolve that crisis of legitimacy.

Others are being more forthright.

Repeat after me:

THERE WILL BE NO FISCAL UNION.

THERE WILL BE NO EUROBONDS.

THERE WILL BE NO DEBT POOL.

THERE WILL BE NO EU TREASURY.

THERE WILL BE NO FISCAL TRANSFERS IN PERPETUITY.

THERE WILL BE A STABILITY UNION – OR NO MONETARY UNION.

Get used to it. This is the political reality of Europe, since nothing of importance can be done without Germany. All else is wishful thinking, clutching at straws, and evasion. If this means the euro will shed some members or blow apart – as it almost certainly does – then the rest of the world must prepare for the day.

ANYhoo…  It’s still “the political trilemma.” 

[Europe is still sexy! – Ed]  Of course it is.

And, as I’ve been saying, for supporters of the “European Project”, the options are stark.

And when it’s that serious, you have to lie…

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  • Henry94

    Good stuff on the subject as always Pete.

  • Now go for the big time: go beyond the €-dimension; and Paul Krugman provokes some useful responses, at the New York Times Opinion Pages.
    .

  • Greenflag

    Its at times like these that one recalls Claud Cockburn’s

    ‘ “Never believe anything until it has been officially denied”

    The German CDU/CSU /FDP coalition is about to break up ahead of the next election and it’s likely that Merkel will lead another grand coalition made up of the CDU/CSU plus the German Social Democrats which will in effect be a government of ‘national unity ‘ to steer the country through the present proxy ‘war’ on the euro by elements within the wider international financier community who stand to make billions if not trillions if the euro collapses or is replaced and will thereafter pick clean the bones of the remnant stand alone currencies including sterling with the greatest of ease helped aided and abetted by the sophisticated ‘quantsmen ‘ and currency speculators of the City and Wall St etc .

    As for our Mr Kenny well he had to say something so he wisely said nothing . He’s fence sitting as well . Time is being bought in the hope that the speculators and gold bugs will get sufficiently burnt in the run up to a Greek haircut that they’ll be only too relieved to accept it.And when Greece is ‘redeemed ‘ Mr Kenny will then presumably be heard to utter ‘If Greece why not Ireland and Portugal and Spain ‘ ?

    The answers to which in German or French expletives may not be comforting to Mr Kenny’s ears and even less to Mr Gilmore’s .

  • Greenflag @ 8:39 pm:

    That Cockburn apothegm reminds me of a youthful encounter. The Castletownsend Church of Ireland fate/fête featured a side-show with the “Man Eating Fish!” My jejeune younger self failed to notice the missing hyphenation, and was cajoled into parting with a whole (undecimalised) threepence. Once ushered past the concealing tent flaps I was in the presence of Claud himself, a fork and a tin of sardines.

    However, let us not pass lightly the matter in hand, even if the putative 18th baronet Osborne of Ballentaylor and Ballylemon may spend much of the next week doing just that. Thanks to nationalizing those failed banks, the Great British tax-payer would be in this for a nine-figure sum (the Ernst and Young ITEM Club estimate is .. gulp! … €320+ billion). If you have the nerve for it, now try Raoul Ruparel’s piece which has just come up at the Spectator’s Coffee House blog.

    As Claud wrote, in a different context: All over Europe men … understood that “the house next door is already on fire”

  • Pete Baker

    Malcolm

    “Now go for the big time: go beyond the €-dimension…”

    Beyond? That Krugman post is not as advertised. Rather than widening the view, it narrows it.

    As for the Spectator blog…

    The eurozone’s problems are economic and political.

    The original post’s focus is on those political problems.

  • Pete Baker @ 9:46 pm:

    My point is the Eurozone’s political problem amounts the absolute and crying economic necessity to expand the EFSF beyond its present corset of (around) €440 billion — i.e. to a full monetary union. Which requires, in essence, French and — above all — German consent. And soon. That was Ruparel’s argument (and better expressed), too.

    What was missing from Ruparel was the SDP’s clear political warning to Merkel that “we’ve bailed you out politically and economically on this one, but that’s your lot!” The SDP would be certifiably lacking in political opportunism not to exploit the government coalition’s economic woes — especially when Mecklenburg-Vorpommern was the sixth Länder this year when the government parties went belly-up.

    So: “economics”? or “politics”? There’s a fine line to draw. Then factor in the purely political electoral timetables, wrap heads in cold towels, and feed pain-killers.

  • wee buns

    What was required was a genuinely social Europe. Instead we get union by stealth.
    Rundle makes perfect sense (again) on the subject. He reckons Greece should not only default but announce that the Chinese navy would be mooring in Piraeus. ‘Bet y’d see a development fund appear then.’

    Greece should leave the EU and turn Europe on its ear
    by Guy Rundle

    ”Monetary union, that most unlikely of thrills, took Europe for another hair-raising ride today, with the German parliament voting 523-85 in favour of the terms of another rescue package for beleaguered Greece. Meanwhile Greece continued to slide towards crisis and confrontation — as IMF finance wonks arrived in Athens to administer the latest round of austerity measures and audits, they were locked out of the offices by public servants, who occupied six sites across Athens.

    Protests continued in Syntagma Square outside parliament, and the roving “no cuts” protesters went from place to place, protesting the range of new taxes — most of them coming down on the lower-middle class, and those working-class people with some capacity to save. George Papandreou, hereditary prime minister, gave speeches to the Greek people and to German MPs, and the cute double-dealing — playing nationalist to his own people, European satrap to the north — was gone. He sounded like a man who had started out thinking he had a mountain to climb, only to realise it was the edge of the abyss.

    Greece has paid and paid and cut and cut, and it has done very little to solve its greatest problem — skyrocketing interest rates from a monopoly financial market, and a smooth supply of bailout cash from EU governments. Why should it? The world saw the nature of the financial markets with the now notorious clip of trader Alessio Rastani, claiming that he “dreamt of the next recession” and that “Goldman Sachs ran the world”. Rastani was calumnied around the world, as an “appalling” person, “evil”, etc.

    I thought he possessed at least the virtue of honesty, which is more than one can say for all the rhetoric associated with the Greek crisis, in which the undoubted problems of the country have been targeted as the cause of a bankruptcy brought on by the determination of the financial markets to talk it into a lucrative crisis in 2010. Had there been 10 Alessio Rastanis a year ago, Papandreou would never have got his people to consent to their own slow impoverishment — PASOK would have revolted and perhaps deposed him.

    Perhaps that will still happen, but the latest German vote has saved him for a time. There was more than Papandreou’s position riding on it — Angela Merkel identified herself with the vote, which increased the lending capacity of the European Financial Stability Facility to €440 billion (about $600 billion). Fifteen members of the Christian Democrats crossed the floor, but the opposition SDP had lent their support to it, so it passed strongly — “this one time”, the SDP noted. The move also allows the fund to buy up bonds of the PIIGS countries, in order to ease their desperately high rates, and to lend at an earlier stage, before countries hit crisis.

    Much of the sudden flurry of activity has been begrudging, and prompted by demands from the US that Europe sort things out (which is pretty rich — good thing someone is). Doubtless some form of trade war was threatened as the price of not complying, but the effect was simply for the US to take one side of the struggle within the EU — between economistic eurocrats determined to eschew nearly all fiscal policy at an EU level, and almost everyone else, who recognise that the whole European project, a half-century labour of union by stealth, was on the verge of collapse.

    The Right — which can’t decide whether it likes the euro or not — is arguing that the crisis is all about living within your means. But it’s rather the opposite — it’s a product of the EU’s goal over the past 30 years, to take a whole host of decisions about the economy out of the hand of elected governments. The EU — which transmogrified from the EEC to the EC across the late 1970s and ’80s, with Margaret Thatcher a keen agent of its expansion — was the means by which that transformation could take place, both a continuation of the original European ideal, and its co-option to neoliberal dogma.

    European union was meant to produce union, but a thing becomes its opposite as da Man said, and what the eurozone has bred, at least in Greece, is intense national resistance, and the destruction of the legitimacy of the major parties. Indeed Greece is almost textbook — as dislocation, everyday poverty and anomie grows (and the best reports to access on that, essential viewing, are those of Paul Mason on the BBC, an ex and long-time member of tiny Trot sect Workers Power), the only party that retains legitimacy and authority are the Communists.

    Greece has borne out the “weak link” thesis of historical change to the nth degree — it is the place where all the contradictions of Europe are concentrated so tight that they cannot but come into conflict. From the start, the Communists have said “you can trust us — we will never go into coalition” and that stance has borne fruit. Is a revolution possible in Greece? Yes it is, it absolutely is. The folly of the EU, of the Greek mainstream elite, of the financial markets have brought it to this point. If it happens, it won’t look like 1917 — but it won’t be utterly dissimilar either.

    More power to it. Then the country should leave the EU, restore the drachma, take investment from China on any terms demanded, and thereby turn Europe on its ear”

  • Alias

    Kenny wouldn’t be opposing a new treaty unless it was not consistent with the “aims and objectives” of the existing ratified treaty and Article 5 of the Constitution (See Crotty V Taoiseach) would therefore require it to be ratified by referendum. If he could get fiscal union in some form that was consistent with the “aims and objectives” of the Lisbon treaty and thereby exclude the Irish people from having to consent he’d be in his favourite position right now (prostrate before his EU masters).

  • Cynic2

    “Greece has paid and paid and cut and cut, and it has done very little to solve its greatest problem ”

    ….but what it hasn’t done is collect its taxes. The bottom line is that for 20 years they lied to borrow and falsified the books. Now they have been caught.

    I doubt they will be in the Euro by January. Then they can float a new Drachma, settle back lying to each other again and try and sort out the mess

  • Pete Baker

    “My point is the Eurozone’s political problem amounts the absolute and crying economic necessity to expand the EFSF beyond its present corset of (around) €440 billion — i.e. to a full monetary union.”

    Malcolm

    That’s a 2-dimensional analysis of a 3-dimensional problem.

  • Greenflag

    @ cynic 2

    ‘ Then the country should leave the EU, restore the drachma, take investment from China on any terms demanded, and thereby turn Europe on its ear”

    Probably not a good idea that China investment one not at least if one is made aware of the activities of Chinese authoritarian capitalists ‘behaviour ‘ in Zambia where they have been shooting at their Zambian employees who were apparently insisting that they be paid weekly instead of when the Chinese bosses felt like paying them . A desperate Zambian government just like the current Greek one kowtowed to the Chinese ‘capitalists ‘ who were admonished to try harder and made pay a ‘fine’ for shooting at their employees .

    http://www.bbc.co.uk/news/world-africa-12973534

    I know enough about the Greeks I think to imagine they may respond to

  • Greenflag

    @ malcolm .

    Thanks for the link but there is more afoot .

    ‘especially when Mecklenburg-Vorpommern was the sixth Länder this year when the government parties went belly-up.’

    While Merkel has lost ground somewhat it’s her FDP right wing party which has lost most support in these elections . in fact they are now looking like a re-incarnation of the disappearing PD’s or the disappearing Liberals of yore and yet to be in the UK .

    ‘as the SDP’s clear political warning to Merkel that “we’ve bailed you out politically and economically on this one, but that’s your lot!”’

    Of course that’s what the SDP are saying now .Fast forward 6 months or more and with an SDP man in the Finance Ministerial seat in a new Grand Coalition – you should not be surprised to see an about turn of pre electoral verbiage promises on a Gilmore scale .

    By then of course even the Germans will have become aware of the role of their own ‘greedy ‘ banks in helping to add fire to the Greek pyre . BTW the current Economist gives a good report on page 13 on the ‘efficacy ‘ of all the politicians in the current crisis -well worth a read for a quick summary in the present tense.

  • Pete Baker @ 1:27 pm:>

    If I understood that cryptic comment … anyway, these dialogue boxed don’t do nuance. Or VistaVision. Or Technicolor.

    That last term, though, has a certain resonance in physics (as Mr Baker will now elucidate), with regard to (as I understand it) “spontaneous symmetry breaking”.

    Let’s bring the shrewd wee buns @ 11:12 pm in here: What was required was a genuinely social Europe. Instead we get union by stealth.

    For what the €-projekt relied upon a political convergence towards economic symmetry. What we got was on-the-cheap, beggar-all-my-neighbour, with devious differential taxation and banking policies (or lack of them). The breaking-point (to state the obvious) came when the German electorate (who only ever wanted the D-Mark by other means) decided to call time.

    Unlike most, I expect the €-zone to limp on, but only because all the delinquents (i.e. most of the €-zone beyond arm’s reach and a slapping from Frankfurt) recognise they hang separately if they don’t now, and pronto, get the hang of the rules. Only a few bankers and speculators will be harmed in Der Prozess.

    As a motorcyclist of many decades, I know from bitter experience that a Zschopau (GDR) MZ250 couldn’t be retrofitted to achieve the reliability of a Munich-made BMW. So, for an even more difficult trick, can the € be retrofitted to optimal efficiency?

    Anyone want that again in the miracle of stereoscopic surround-sound?

  • Greenflag

    error above 2.54pm should read

    ‘I know enough about the Greeks I think to imagine they may respond to being shot at by shooting back .

  • West_Brit_Watch

    Sad to see an Irish government collaborating with Eurocrats to plunge us further into financial turmoil. The EU and their liberal banking policies destroyed this country, they had Fianna Fail in their pockets, and now they’re doing the same with Fine Gael.

    Ireland should leave the EU immediately, they have been one massive disaster for this country, we were doing just fine from the period 1991-2001 with the punt, then we adapt the euro and the Irish people know poverty once more. Shame on the government for sticking with a failed project, look at Iceland, a remarkable recovery from boom to bust, all because she had control of her own affairs.

  • West_Brit_Watch @ 4:19 pm:

    What that glides over is the very reason for the punt: it was because the link to sterling precluded membership of the ERM.

    So, for the earlier period West_Brit_Watch applauds, Ireland was doing nicely out of being in the +/- 2.5% “snake” — i.e. having economic and monetary policy and stability largely directed and guaranteed from Frankfurt, while receiving investment inflows to the only Anglophone economy inside the ERM. Thank you very much, Mr Soros. After New Year 1999, of course, ERM2 fixed currencies, and beyond the domestic/retail market all was €.

    So, let’s not rewrite history with “control of her own affairs”.

  • Greenflag

    Meanwhile back at world monetary and economic chaos central i.e Wall St the ‘people ‘ occupy the streets and the NYPD are denounced for supporting the banksters .

    Messrs Obama and Geithner may soon end up with their own Greece on their own doorsteps now as finally Americans are waking up to the fact that their democracy has been stolen from them by a plutocratic minority aided and abetted by money grubbing politicians in Congress and the Senate .

    http://www.democracynow.org/2011/9/28/something_has_started_michael_moore_on

    The global insurrection begins -USA -Israel -Egypt etc etc

    http://maxkeiser.com/

  • Alias

    “What that glides over is the very reason for the punt: it was because the link to sterling precluded membership of the ERM.

    So, for the earlier period West_Brit_Watch applauds, Ireland was doing nicely out of being in the +/- 2.5% “snake” — i.e. having economic and monetary policy and stability largely directed and guaranteed from Frankfurt, while receiving investment inflows to the only Anglophone economy inside the ERM. Thank you very much, Mr Soros. After New Year 1999, of course, ERM2 fixed currencies, and beyond the domestic/retail market all was €.”

    The punt was introduced more than 50 years before Ireland joined the EMS/ERM, so that had nothing to do with why it was created.

    Also, the punt’s link to pound did not preclude membership. Ireland joined and the UK stayed out. Parity between the punt and the pound could not be maintained when the pound subsequently increased in value against all of the ERM currencies. The link was broken so that Ireland could meet its conditions, and a new link to the deutschmark subsequently replaced it.

    ERM was seen as a means of stabalising monetary exchange rates, and did not involve any loss of sovereignty over monetary or macroeconomic policy. Indeed, Ireland joined it 12 years before it ratified the Maastricht Treaty that enabled it to transfer sovereignty over its monetary or macroeconomic policy to the EU.

    Membership of the ERM proved to be an economic disaster for the UK, so Major should have followed Thatcher’s advice and stayed out. They learned the lesson the hard way and did not join ERM2 or the Eurozone. That is to their credit.

    Equally, membership of the eurozone has been an unmitigated economic disaster for Ireland. It kick-started its export boom by devaluing within ERM in 1992 (or was it 1993?). As the pound had devalued, Irish exports to the UK became uncompetitive. What followed was 8 years of solid export growth. That export growth stagnated when Ireland adopted the euro, and Ireland’s exports are now more than half the level in real terms than they were before it adopted the euro. Ireland’s exports increased from 25,178,525 in 1993 to 92,689,900 in 2001. In contrast, they were 86,346,100 in 2008. So that is an increase of 367% in exports the 8 years prior to adopting the euro, and an immediate collapse in exports just after joining it.

    The europhiles have not only destroyed the economic prosperity of most of Europe, they’ve finally succeeded in destroying their own insane project.

  • Alias @ 4:26 am:

    The punt was introduced more than 50 years before Ireland joined the EMS/ERM, so that had nothing to do with why it was created.

    I think my reading is generally preferred. See, for example, Honohan and Murphy.

  • DC

    @Greenflag – got to love Max Keiser, says it as it is.

    The goose that laid the golden egg ‘the City’ has badly fouled its nest – to the point that the golden egg is inedible. A curate’s egg.

    The collapse of the western banking system, what a mess!

  • Alias

    Malcolm, that paper doesn’t support your claims. It does, however, support mine, so thanks for that.

    You claimed that the punt was devised as a precursor to Ireland joining the ERM. It wasn’t. It was first devised as the Saorstát pound in 1928.

    You claimed that the punt’s link to the pound precluded Ireland from joining the ERM. It didn’t. The link was broken because parity (or the tolerable degree of variance between values of plus or minus 2.25%) between the punt and the pound could not be maintained if the pound did not join the ERM at the same time. Nothing whatsoever in the conditions of membership precluded links, and a new link subsequently replaced the severed link, and nor was it a condition that links should be confined to other currencies within the ERM. As it transpired, contractionist monetary policy under the new government of Thatcher and revenues from North Sea Oil meant that it was more likely the pound would rise in value against the ERM currencies – and that is exactly what subsequently happened. Hence, the link was severed. In all of that, the sovereignty resided with Ireland.

    You claimed (or more accurately implied in your last sentence) that membership of the ERM meant that Ireland gave up sovereignty over its monetary and macroeconomic policy. It didn’t. It could not have joined it if it did since the State did not receive consent from the vis referendum to derogate that sovereignty until 1992.

    Breaking the link with the pound was not a good move for Irish exports, and the punt was subsequently devalued. Even now, within the Eurozone, most of our exports are outside of other eurozone member states so being locked into that currency’s exchange rate is counterproductive. That is why Irish exports stagnated immediately after joining it.

  • Alias @ 9:22 pm:

    Yes, there was a Saorstát pound from 1928 — I give you that. Moreover, the notes and coins were some of the finest designs anywhere. It was, however, pegged to the pound sterling until 1978 — in the same manner as the IoM, Channel Islands, Scottish and other currencies: grant me that. By the way, until then all those lovely notes were printed in the UK and the coins made by the Royal Mint. So the £IR was not traded and quoted separately on the exchanges before 30 March 1979, any more than the Scottish or NI pound is today.

    Tell you what:
    ¶ The Irish pound may notionally have been devised by Sithric III Silkbeard, around 995 AD — though, as far as I can gather, he never got beyond coining pennies in imitation of those of Aethelred II (a.k.a. the Redeless, or the Unready).
    ¶ The word punt — I think you may find — appears in Irish from around the 15th century.
    ¶ The term an punt Éireannach appears — again, I’m prepared to stand corrected — for the first time in the Irish Central Bank Act of 1971.
    ¶ There is a usage of the word punt in the Irish Times of 24th May 1975: Do we devalue below sterling? Or do we stabilise our punt? Or maybe even attempt to revalue it upwards? That may be the earliest recorded Anglophone use — unless you know better.

    Now how many more hairs are there to split? Have you accurately counted all the angels dancing on your pin-head?

  • Neville Bagnall

    1992 – Maastricht Treaty agreed.
    1992 – Devaluation.
    Mid 1990s – Stability and Growth Pact proposed.
    1995 – Irish Government Bond Yield begins to converge with Germany.
    1997 – 12.5% Corporate Tax rate announced.
    1999 – Punt/Euro exchange rate fixed, Euro introduced.
    2002 – 9/11 recession.
    2004-2008 – Pro-cyclical policies.
    2008-present – The Great Recession

    Right through the 1990s a series of pro-growth and pro-trade policies were introduced. Many of these, and other positive events were related to the process of convergence and Euro membership.

    Growth continued right through the introduction of the Euro and up to the recession triggered in the wake of 9/11. The serious setback triggered by that event occurred in most trading nations, and in some ways contributed to the loose fiscal polices pursued thereafter.

    Mercantile exports did stagnate as a result of the pro-cyclical polices, but services trade continued its boom growth (13% in 2005, 18% in 2006, 19% in 2007). I put this down in part to traded services being less cost sensitive.

    The recession and austerity is beginning to improve our competitiveness and as a result services exports and (more significantly) mercantile exports have started to grow again. In fact they are again approaching double digit growth (M:8% and S:9% for the first 3 months of 2011)

  • Greenflag

    @DC,

    ‘got to love Max Keiser, says it as it is.’

    At least despite his sometimes ‘histrionics’ and showmanship is managing to get across the murkier details of this financial and monetary crisis in ways that the meejah are either reluctant to focus on or would rather gloss over in ‘government /IMF /ECB speak ‘.

    The detail surrounding how Ireland got into it’s present predicament is detailed above in the main by both Malcolm Redfelllow and Neville Bagnall whereas Alias’s focus on the Eurozone to the exclusion of all other factors says more about Alias’s political sympathies than anything else .

    The bigger question is the one that will have to be answered to the growing mass popular demonstrations that are gathering pace across the western world . The questions they are asking and demanding answers to are not being answered by either governments or oppositions . At root what is increasingly being understood is that you can have financial sector led anarchic capitalism or democracy but you can’t have both at the same time . This question was addressed a couple of years back in relation to the growing democratic movements in developing countries and the threat that such political development was going to have on the ‘financial ‘ minority class in many of those societies who in many cases were also members of an ethnic or religious minority . ( World on Fire -by Amy Chua ). We have seen what has happened to the Sunnis in Iraq , Christians in Lebanon etc etc .

    In western countries the elite financial minority are less recognised by ethnic background or religious persuasion but are more recognised for their almost ‘incognito ‘ status as they live in world far removed from the concerns of 99% of the electorate .This particular crisis of financial sector capitalism has now been 4 years on the go and I doubt if ever in the history of the markets has there ever been such frequent violent swings both up and down in the market indexes . Fortunes are being made by a tiny elite in whose interest these swings are if not actually engineered then psyched up by those who stand to gain from gyrations one way or the other .

    What this means for millions of ‘middle and working class people across all western democracies is more and ever growing uncertainty in their personal economic futures and even more so the futures of their children .

    And to date NONE of the elected politicians or their oppositions anywhere in the western world have come anywhere close to finding a ‘solution’ which they can all work with in the interest of international order and financial stability . We have gone rapidly from Greenspans’s naive ‘the era of boom and bust ‘is over to probably the biggest bust in the history of capitalism since 1929 .

    Whats still unseen as yet is the eventual political reacion or overeaction which will take place at that point when it is seen by the overwhelming majority of tax paying Americans , Britons , Irish , Germans and French that their governments and politicians are either unable or unwilling to do what is required to bring the over dominant financial sector under democratic control .

    The signs are there though that this is happening world wide . there are no signs that any of the current crop of political leaders anywhere have taken heed .

  • Greenflag

    @ Alias ,

    The europhiles have not only destroyed the economic prosperity of most of Europe.

    I don’t think so . 50 million people in Europe are not on food stamps without which they would starve to death as would happen in the USA . No citizen of the EU fears ‘bankruptcy’ due to having to undergo a serious medical operation.And in terms of general education and literacy for the vast majority all of the original 12 EEC countries cpmpare more than favourably with the USA .

    Even the current world financial scapegoat Greece manages to spend only half the amount per capita on Health Care than the USA but life expectancy is 2 to 3 years greater for Greeks than Americans .

    moving on

    ‘they’ve finally succeeded in destroying their own insane project.’

    They have ? I note the Euro is still there and there are several countries lining up to become members of the Eurozone . Everybody bar that Mongolian chap who was found on a deserted South Pacific island and had been marooned there for a decade knows that the ‘Eurozone is in need of reform . And everybody in Ireland knows in retrospect that it was probably not the brightest idea to join the Eurozone at that time without much consideration being given to what would happen if te expected influx of cheap capital would lead to an asset bubble in the property market.

    Your harping on the ‘sovereignty’ issue would be meaningful if you could explain to all of us on slugger or those of us who are interested how the most ‘sovereign ‘ country on the planet and the most powerful militarily and economically and technologically can still manage to have it’s currency ‘downgrade ‘ be in hock to the Chinese for almost 3 trillion dollars ,manage to run up 4 trillion dollars in debt due to waging several wars on a national credit card , bail out corrupt US banks for hundreds of billions of dollars at the same time as creating such landmarks of ‘sovereignty as 28 million unemployed , 50 million on food stamps and 48 million without health insurance and the biggest gap between rich and poor in world economic history since the the time of the Russian Tsars ?

    Europe does not need to return to the experiences of the last century nor for that matter does the world which is one reason why the Europe ‘project ‘ will continue and will probably be ‘copied ‘ by other regional associations around the world .

    We had enough ‘destruction ‘ in the last century . We don’t need a repeat in this one.

    http://necrometrics.com/20c5m.htm

  • DC

    Greenflag – I wholeheartedly agree with your comments above on the overbearing and unaccountable nature of financial markets.

    Like any great power – or anything that dominates – people will in the end get fed up being both mistreated and humiliated and will snap back eventually.

    This crisis started in America and it is up to the Americans to take up some domestic action for once than foreign – the Occupy Wall Street is a great start. If the protesters there can gain traction and push this issue onto the President’s radar and agenda and cause a movement across the USA then I’ve no doubt that it will spread to other western nations like Britain – and when it does it will be like pushing at an open door.

    Michael Moore is right – ‘people have had it’. I’m sure that’s as good a campaign heading or strapline as any.

    Whereas before in the last century governments always bottled it when facing up to the wealthy and opted to start wars of conquest instead – using the blood and soil approach in a bid to gain more resources for the nation. Now this approach to ‘economic growth’ simply won’t cut it given the nuclear option.

    Also with the internet people are more informed – as you say thanks to the likes of Max Keiser – and are putting the pieces of the puzzle together and can see the arrow of blame pointing to the City and Wall Street. And of course back to these uber-elite, the masters of the universe types, perhaps holding almost immeasurable wealth.

    In today’s information and knowledge rich society people are doing just what the London School of Economics advises students there to do: “to understand the causes of things”.

    What caused the crash, who caused the crash? And you’re right it certainly wasn’t the euro or European Institutions!

    In your clip linked above the protesters and demonstrators in America are using a democratic form of protest to vent their anger and to get a democratic movement going; but I still reckon my technocratic approach of using a SOCA type agency to freeze bankers bank accounts and assets is actually the most pragmatic way of going back to the source – the cause of the problem.

  • Greenflag

    @ DC,

    ‘What caused the crash, who caused the crash? And you’re right it certainly wasn’t the euro or European Institutions!”

    While the roots of the crisis go back to the 1980’s and 1990’s the more immediate cause can be traced to Wall St around the period of the collapse of Lehman Brothers . Heres a link to an interview with Michael Lewis a former bond trader into the specifics of how Greece came to join the Eurozone with the help of Goldman Sachs ‘experts . Lewis also points out that Wall St investment bankers had more than their fingerprints involved in much of the early stages of the ‘attack’ on the Euro . Lewis also focuses on the differences between Iceland , Greece and Ireland and their similarities with the Californian economy. The interview lasts just over 30 minutes and I’d recommend it as an ‘antidote ‘ to those who cannot see past Alias’s one horse pony of the ‘Euro’ and the ‘Eurozone ‘ being the ‘only’ cause of Ireland’s and other countries current difficulties . Lewis also reminds us of just how avoidable this crisis would have been for Ireland or at least the worst aspects of it had we had a government that was more concerned with the future of it’s people than with the immediate financial futures of it’s corporate developer supporters and bankster golfing partners.

    Lewis also reveals some facts about the Greek economy which make sad reading including the fact that the Greek National Railway takes in 100 million in revenue but costs 400 million to run and that the average wage of railway employees is 65,000 euros . As to who is supposed to make up the difference ? The Germans of course 🙁

    Lewis concludes that it’s not a question of if but when Greece leaves the Euro or is booted out and he makes the point that Greece cannot but default and the sooner the better for Greece and Germany . As for the EURO itself it will survive but there will need to be structural changes . Lewis’s positing of the German predicament is well put and while German banks like those in Ireland and the UK and USA and France were up to their oxters in overleveraged ‘gambling’ the German taxpayer is right to feel that his /her own government has a lot to answer for re the promises made when Germany reluctantly gave up the mark for the euro.

    http://www.npr.org/2011/10/04/140948138/how-the-financial-crisis-created-a-new-third-world?ps=cprs

    ‘In your clip linked above the protesters and demonstrators in America are using a democratic form of protest to vent their anger and to get a democratic movement going;’

    Indeed but it’s early days yet and importantly the politicians in Congress of both parties seem to be ‘ignoring ‘ it . They have reason to . Their counterparts in the UK and Ireland and NI are similarly inclined . They’d rather NOT that people know about how their own politicians were complicit in this crisis without end .

    And that of course is the salient point the ‘unending ‘ nature of this particular financial crisis and the increased uncertainty which is again developing in both the USA and EU and the prospect of another recession -not that the ‘recession ‘ ever really ended for anybody bar the economist technocratic profession.

    Well worth a listen to is Lewis and although some of his comments re Ireland may seem grating or not quite 100% nevertheless his overall view is as close to the truth as you are likely to get .

  • Greenflag

    addendum

    ‘Once the Bush and Obama administrations decided that you couldn’t let these firms fail and they didn’t want the mess of nationalizing them, there was really only one way forward — and that way was to gift money onto these banks until they’re back on their feet and can function at the center of the economy again. But that, to any normal person who is outside the system, just looks ridiculously unfair. It looks like socialism for capitalists and capitalism for everybody else. So it’s no wonder people are marching in southern Manhattan.”

    Or GF adds in Belfast or Manchester or London and Dublin.