Ian Welsh

The horizon is not so far as we can see, but as far as we can imagine

Category: Europe Page 14 of 16

Greek election consequences and the shape of the developed world’s future

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On June 17, 2012

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will be more years of austerity, people winding up on the street, suicides and outright starvation.  In this fertile ground, the neo-nazi right will rise.  The left will most likely not compete, because they will refuse to create an enforcer class to protect their own people.  The police in Greece voted about 50% for the Golden Dawn, they will not protect the left, either, but will enable the rise of the Golden Dawn.

Under these circumstances a coup of some variety, whether military or otherwise (remember, Hitler never won a majority) is very likely to occur.  By blocking the rise of the left so that Greece can be looted, the oligarchs have created their own doom.

In general terms, we are in a pre-revolutionary period.  The supreme court coup in Egypt, the outright refusal to obey even the letter of the law let alone the spirit in the case of Wikileaks and Assange, the reign of Obama, are teaching an entire generation that you cannot fix the system from within, through the mechanisms of the old system or through even semi-peaceful protest.  The Pacific free trade deal will enshrine even more draconian IP laws and will extend NAFTA style takings regulations which give multinational companies sovereignty over governments.

This will not stand.  There will be global war, and there will be global revolution.  We are on track for it.  The question is when and how.  I would guess in less than 20 years the world will fully convulse.  Many of the current generation of oligarchs will be dead by then and will win the death bet, but their heirs will reap the whirlwind.  As for the population, I expect a billion deaths or so over the next 25 years from famine, disease, war and environmental issues.

Both populations and the oligarchs have refused, over and over again, to do what is necessary to peacefully restructure the world economy, but instead have opted to kick the can down the road.  Each kicking of the can has led to more corrupt and sclerotic economics and politics.

In the period between now and the revolution, some nations will take control of their own destinies.  Offered a choice between austerity in the international system and nationalism, they will choose nationalism.  It will not be as comfortable as being a member of the old international order from before the financial collapse, but that is not being offered.  A few nations will be able to work wedges to stay in the system and not suffer too much (Germany, France).  But most developed world nations will continue to suffer real declines in their standard of living, driven by inequality and the resource trap which we refuse to restructure out of.  The electrical economy wants to happen, but it will not happen on a wide scale until after war and revolution.  Such is the choice both our elites and the regular population continue to make.

The left will have its chance in Europe

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On May 7, 2012

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So, in France Hollande has won, and in Greece, left wing parties have more of the vote than the center or the right (we’ll see if they can form a government, however.)  They will now have their chance.  If they fail, however, the right will sweep back in, and it will be the harder right, the neo-nazi, fascist right.  If the left, or what passes for the left cannot do the job and turn things around, the right will offer its “solution”.

The elites, if they make it impossible for the left to do their work (or if the left just fails, quite possible), will, in many cases, be signing their own death warrant.  If the neo-nazis in Greece or France take charge, be sure that they will liquidate much of the old order, the old elites.  Since those elites are, in fact, corrupt and treasonous (selling out the interests of their own countries), they will be able to do so to cheers and by simply enforcing the law.

The right’s solution won’t work, of course, but it can be made to look like it works for a few years at least.  And that it won’t work, won’t mean anything to dead oligarchs.

The elites aren’t going to keep getting financial oligarchy, where they force the government to borrow money from them, pay it back with interest and sell off the crown jewels at fire-sale prices.  That game is NOT going to continue for much longer, in the grand scheme of things (at least not in Europe, the US is a different matter).

If they want to save their own necks, and yes, it will come to that, they’d best cut a deal now.  The longer they wait, the worse the deal is going to get for them.

Of course, some part of the elites will make a deal, and will survive.  But some won’t.

As for the left, remember that the rich are, as a class, your enemies.  Treat them as such, or they will make sure you fail.

Next Steps for Greeks after the Austerity Bill (AKA: Hope for Greece, at last)

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On February 12, 2012

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Ok, another austerity package just passed.  That’s the bad news, but amidst the bad news there is some good news.  More than 40 MPs were expelled from the PASOK and ND parties, two from LAOS—those MPs need to form a new, explicitly anti-austerity, pro-default government.  Odds are good they will win the next election, and can form the new government.

No deals made by a sovereign are unrevocable.  Whatever this government is doing, has done and will do, can be undone by a new government.

Oh, and Greek rioters – if you’re going to riot and burn, burn down the houses of the MPs and bankers, the banks and their offices (I see some of the right places did get firebombed.)

Greece can be fixed, if the Greeks are willing to do what it takes, both in terms of electing a new government and that government doing the right things.  Those things will be unorthodox and painful, but no more painful than austerity, and unlike austerity, they will lead to a better economy, and based on experience elsewhere, probably within two or three years of doing the right thing, with some relief being felt within 6 months.

Perhaps the Only Thing Cameron Will Ever Do That I Agree With

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On December 10, 2011

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was to tell Merkel to take a long leap of a short pier, and refusing to sign on board for European control of member state’s fiscal policies.  Such control in the current context (forced austerity) is a recipe for outright, extended depression.  Cameron may be throwing Britain into depression all on his own, but not signing away control to Germany (and be clear, in this context, European means German) was the right thing to do, even if he did it for what appear to be all the wrong reasons.

As a friend of mine quipped, who thinks Europe should have a common currency.  “By common currency, however, I don’t mean everyone using the EuroMark.”

The insistence on policies which everyone knows, and which even straightforward macro-economics shows clearly, will throw Europe into a semi-permanent depression is rather remarkable.

Oh well.

The blindingly obvious about the proposed fiscal union in Europe

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On December 4, 2011

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What it means is German control over other countries budgets.  What that means is semi-permanent austerity.  What that means is semi-permanent depression.

I somehow doubt that this will be accomplished, if it is accomplished, through referenda.  I doubt any major party will stand against it.  So, to add to the blindingly obvious, it is blindingly obviously undemocratic.

It is true that the Euro requires fiscal union.  It always did, shared currencies don’t work without union.  However, if fiscal union is to occur, then it should occur with each member state’s population voting for it, especially as this fiscal union’s purpose is to impose corporate friendly austerity measure’s on the populations of countries that would almost certainly vote against them.

I will note that this is not going to redound to Germany’s favor in the not-very long run.  Permanent European depression is not to Germany’s advantage.  Who, exactly, they think is going to buy their high-end goods is beyond me.  They shouldn’t expect India and China to play along, those countries are creating their own auto industries and do not intend to be dumping grounds for Western goods.

Franklin Delano Roosevelt’s words are applicable:

The first truth is that the liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself. That, in its essence, is fascism — ownership of government by an individual, by a group, or by any other controlling private power.

The states in Europe are controlled by private interests.  We have seen this, clearly, in Greece and Italy in the past weeks.  If this fiscal union passes, the Rubicon will have been crossed for all states remaining in the Euro.  Ironically, Europeans will have given up real democracy in exchange for depression.  Lose/lose.

For them.

What’s happening in Europe is what matters: rules of the financial rich

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On November 18, 2011

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The oligarchs have taken down two governments in the past two weeks – Italy and Greece.  The idea that the Mario Monti, the new PM of Italy, is something wonderful, is deranged.  Note that once again, neither an election nor a referendum was allowed.

If you want to save the Euro and some form of European prosperity, there is only one solution, the European Central Bank (ECB) must do what it keeps insisting it won’t do, it must buy Eurobonds from members.  And it must buy them at fixed prices.  Italian, Greek, French, German bonds will be issued at X price, and if insufficient investors want to buy at that price, tough, the ECB will buy.  If this causes inflation, great, Europe needs inflation right now.

Even France and to a lesser extent, Germany, are coming under attack.  However France is under significant attack, and Merkel and the ECB seem unwilling to really do anything about it.  France has the option to go off the Euro in a way that most other countries don’t.  The issue with going off the Euro is simple: oil prices.  You now have to buy oil with your lousy currency, which is even more worthless than the Euro.  But if you happen to control countries that have oil, like France does (for example, France is mostly in control of Libya right now, not the US), then hey, sign some long term contracts and voila.  It is not written in stone that prices must be set on open bid markets.

Which leads us to the sudden surge in the price of oil to $107 a barrel.  On the face of it, this is crazy.  Yes, the US has had a bit of a recovery, but Europe is going hard core austerity.  But this is the game the hot money is playing: they move out of bonds and into oil, out of oil and into bonds.  $107/barrel oil means the US recovery (such as it is, which isn’t much) isn’t going to last much longer.

Being rich is about being liquid when everyone else isn’t, so you can buy up assets on the cheap.  When the rich are properly under control (ie. when you keep them poor and terrified of government and the people, as they should be) they can’t create such buying opportunities, they have to wait for them, and the government makes it so that the rich can’t take too much advantage of them, because taking advantage of them means taking advantage of other people when they’re most vulnerable.

Right now the rich can and are crashing asset prices by forcing countries into austerity through attacks on their currencies and control of their elites.  They then buy up assets for fire-sale prices.  (The history of fire-sale is worth commenting on.  Crassus, the Roman Senator of the first triumvirate, had a fire fighting team.  When a fire broke out they’d go to the fire, fight off the other fire teams, then Crassus would buy the burning buildings from their owners, negotiating as they burned.  If they refused to sell, well, they lost everything.)

These attacks on currencies are deranged.  The countries are not in that much difficulty, certainly the idea that France is in enough difficulty to be under attack is crazy.  These attacks are about power: the global rich were bailed out after the crash, now they are using their hot money in attack after attack, demanding austerity, which will cause semi-permanent depression in those countries which accept it.  That allows them to buy up what they want, keeps their labor costs down, and lets them divert what money they spend on investment which creates actual real economic growth into developing countries which are cheaper for them.

But watching European leaders respond has also made clear that they are either compromised, ideologically neo-liberals or completely ineffective.  Watching the ECB insist that it won’t just buy bonds has been particularly amusing, because if the ECB won’t defend even France, the Euro is in great danger of not existing in a few years, and if the Euro doesn’t exist, neither does the ECB, which means all those central bankers will be out of jobs.  They won’t even act to save their own jobs.

All of this is crazy.  The financial elites are on a plundering spree, gleefully using their power to force entire nations into poverty, blackmailing governments into huge payouts.  Pay extra on bonds, or pay extra on oil, or hey, why not both!

The political elites are clearly either bought or completely ineffective at resisting.  If the ECB won’t buy bonds, then countries just need to leave the Euro so they can print money.  Yes, that might cause inflation and various other problems, but that is better than semi-permanent depression through austerity.

Now, what can the people do when the elites won’t allow direct referendums, and when there are elections you can only vote for parties which are all in favor of austerity?

Make them fear you.  Start as follows, which is what was done in Argentina: find their cars, those nice expensive cars, and trash them.  Every time you see someone in a suit coming from the airport, surround the car and slash the tires.

And if you’re going to riot, don’t do it in your own neighbourhoods.  Go to the parliament buildings, the bank HEADQUARTERS or to the neighbourhoods in which the rich live, and riot there.

If you insist on some form of pure nonviolence (which the European left and right don’t) then you must chain and twist tie yourselves around important areas.  Go to the headquarters and shut them down by tying yourself up to all the entrances.  Twist ties aren’t just the cop’s friends, they are yours.  Love them and learn how to use them.

The elites will only respond when they feel your pain.  And they will only feel it if you make them feel it.

Unbelievable disrespect to a black man in Britain

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On August 15, 2011

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Watch.  Seriously, watch it.

It’s hard to know what to say, because what I’m thinking is unprintable.  Yeah, what a surprise that the riots occurred.  What a surprise.  And cracking down will make it worse, not better.  This isn’t even close to over, and it will never be over while men or women like that interviewer are in any position of influence or power. (h/t Feminist Philosophers.)

Update: a friend points out the social reasons behind the insistence that any explanation is an excuse and that anyone who “excuses” the rioters must be immediately asked if they condone the riots as if explaining is the same thing as condoning.

The insistence on not allowing an explanation reminds me of Obama refusing to “play the blame game” with reference to the Bush administration and the shutting down of discourse around the 9/11 attacks.  Any attempt to actually understand why something happened threaten the official narrative, and might cast blame blame on those in power.  That can’t be allowed, so no explanation is allowed, only condemnation.  (Ian note: Remember all the nonsense about how the 9/11 hijackers were cowards?  They were many bad things, they weren’t cowards.)

The monopoly of violence and simple solutions to supposedly insoluble problems

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On August 11, 2011

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One of the interesting things happening in Britain is the formation of ad-hoc groups for neighbourhood defense.  People have noticed that the police can’t defend them, and have decided to defend themselves.

This it is not a good thing for the State, which is why the police are strongly against it.  This is potentially the beginning of the breakdown of the monopoly of state violence, and the beginning of the creation of militias.  Normally, of course, I’d be aghast at the creation of militias.  They lead to nasty sectarian strife, etc… and if they take off, that’s exactly what will happen.

But what they also are is a crack in the social contract between state and citizens, an acknowledgement that the State can’t defend its own ordinary people.  And as you walk down this path, citizens start questioning their support for the State, period — whether in taxes, or in obedience to the State’s law.

Normally, again, this is a bad thing.  Heck it’s a bad thing here, but just as with the riots it is a natural reaction to the current situation.  When the State doesn’t do its job properly, whether that’s running the economy for everyone’s benefit, not just a few; or whether that’s maintaining the basic monopoly of violence (which includes basic social welfare so that the designated losers of the system don’t resort to uncontrollable violence), people start opting out.

States which don’t perform their basic functions become failed states.  There are a lot of ways to get there, but one of them is to allow the highest inequality in the developed world to exist in your capital (sound familiar?).  Those people lash out, you can’t repress them effectively anymore, others step up to do what should be your job.

Those who say there is no solution are, as usual, full of it.  There is a solution, and it is obvious.  Britain had plenty of money for the Iraq War, had and has plenty of money for Banker salaries and a housing bubble.  A chunk of that money could have easily made sure this didn’t happen, but the choice was made to have rich bankers and bomb Muslims: those were Britain’s priorities.

But if you wanted to fix it, first you clamp down hard (you now have no choice, because you didn’t care about these people), then you offer them a future.  You basically give everyone who wants a job, a job, put ex (or current) sergeants and corporals in charge, move any non-married men and women out of the city, and put them to work fixing and building things. There are always roads and buildings to be repaired, ditches to be dug, farmers who need help and so on.   You hire out of work tradesmen, and they teach them skills.  You pay them decently, you feed them, you house them, you give them skills.  After 4 or 5 years, you start putting them back into the private work force, and you subsidize their first job.

This isn’t rocket science, it is dead obvious.  Yes, it is expensive, but it is less expensive than the Iraq War or bankers bonuses.  And it is a hundred times more humane, and will prevent further occurrences while improving race relations, your economy, your tax base and you workforce.

When people say there are no simple solutions they are, in the current context, almost always full of shit.  What they mean is that there are no simple solutions which are socially acceptable either to the governing class or to society as a whole.

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