Category Archives: current events

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Winter is Coming to Europe

 

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Reading Game of Thrones and what struck me is the tragedy of how the 7 kingdoms go to war just when they must unite to save the realm and little folk from the winter.

Europe and the west are doing the same. Just when we need to unite to deal with global problems, we are falling apart. Xenophobia is on the rise, the EMU is falling apart and now Schengen is collapsing.

This is not good. Not good at all…

Slums in Mykonos…

Greek Version:

http://www.usay.gr/article/90232/eikones_sok_mesa_se_konteiner_ekatontades_ellines_ergazomenoi_se_beach.html?category_id=2792

English Version:

http://en.protothema.gr/the-invisible-favela-slums-of-mykonos-yes-they-exist-pics/

If you read the article, the folks who need low-cost employees for bars and hotels have come up with the ingenious plan to put their employees in containers.

If you know anything about Greece and the heat in the country, this sound horrible.

If you wonder what the consequences of long-term unemployment are just check out the article.

This is not good at all.

This is how the EU ends – with an end to Schengen

http://news247.gr/eidiseis/kosmos/diethnis-politiki/h-germania-ethese-ektos-isxuos-th-synthhkh-sengken-kleinei-ta-sunora-pros-aystria.3662054.html

The importance of this moment  can not be lost. The closing of the borders between Austria and Germany is an affront to European Unity and the principle of the free movement of labor.

I understand why Germany is doing what they are doing, and I do not begrudge them their determination to secure their borders, and I appreciate their honesty … And I applaud their willingness to take on so many refugees. And they are to be commended and blessed and still this is a worrisome precedent.

What is being attacked through their actions is the EU notion that there are no German or Austrian borders only European. With the re-introduction of border controls, Germany is creating a dangerous precedent. If a calamity in the south of Europe emerges, will they close their borders again?

The unwillingness to internationalize the debt and the complete lack of a European response to the humanitarian crisis in Syria demonstrates is very concerning for the future of the world.

The Other Tsipras Agenda that Can Derail the Euro Agenda

Most of the press has focused on what is Mr. Tsipras going to do about the disaster known as the German plan for German well being at the expense of the periphery of Europe and more colloquially as Austerity …

And rightfully so, as this is the most important European policy issue.

At the same time, Mr. Tsipras has a broader agenda to re-organize Greek society. Mr. Tsipras isn’t just some dude who wants to stick a finger to the Germans, he also happens to be a radical left wing revolutionary or at the very least part of the radical left wing revolutionary sub-culture of Greek.

That culture is, to those of us who are not part of it, alien.

In a country where religion is deeply fused into the culture, Mr. Tsipras is an atheist. And not just an atheist but anti-clerical. It’s as if the Great State of Mississippi elected DeGrassi as governor…

My original hypothesis is that Tsipras would take it slow and push his social agenda to the side until after he secure the economic agenda.

But like the Repulicans in Congress, the temptation to force social change was … well … too much.

And so it begins with the decision to not have the Arch-bishop of Greece show up at the swearing in of the newly formed Greek government. In fact the priest that was invited for those Christians who wanted a priest, a junior priest was provided.

Outside of Greece this is just a small thing, whereas in Greece this is a big thing. In Greece, every new thing involves a priest blessing it. Birth, new businesses, I mean everything. It’s how we do things because it’s deeply rooted in our culture. Not because most of us believe it… Inside of Greece, where the whole darn revolutionary movement is bathed in religious imagery this is a pretty huge snub. Basically Tsipras told the Church – Fuck you, sirs.

This was the first government of the Modern Greek Era that was not blessed by the Archbishop. And I am not so sure that this is something I am okay with. This kind of radical change needs to be embraced by society not sprung on it.

Many folks who are anti-clerical in Greece are thrilled at Tsipra’s actions. Time to shove those priests into a deep dark hole that they can never escape they would say.

Except, Tsipras wasn’t elected to create a radical new society he was elected to solve a very specific problem. And if Mr. Tsipras antagonizes too many factions too quickly he might find himself in a bigger political mess than he wants.

To put it differently, Mr. Tsipras needs to wait on his social revolution or risk losing everything. And he needs a mandate for that social revolution. If he pursues a social revolution while simultaneously trying to renegotiate with the Germans, he might find those who object to the social revolution leading protests against his government. And his negotiating position will be weakened.

After all he has a very slender majority and that slender majority can collapse very quickly.

A Surprising Vote in Favor of a Democratic EU

The victory of Syriza is a victory for those of us, like myself, who believe that the EU needs more not less democracy.

Europe, to an extent American’s really don’t appreciate, is run by self serving elites who invent national projects that European countries are dragged along on. My favorite example is the Euro. Every country that voted NO, had to keep having votes until they said Yes!

After the Euro, the undemocratic nature of the EU project became even more problematic. With no strong democratically elected super-national entity, the EU was essentially run by the Germans for the Germans with modest French input.

As long as German interests and EU interests were aligned, things went along swimmingly, when there was divergence pain emerged.

Over the last 5 years the pain caused by the divergence between broader EU interests and narrow parochial German interests have been front and center. The EU needs Germany to experience greater inflation to rebalance EU wide prices. Paul Krugman explains this far better than I do. Germany as a net creditor doesn’t want to have inflation and so it exports deflation on the periphery.

In a democratically elected nation state the interests of one group, Germany, would have been balanced against the interests of other groups and some intermediate compromise would have been reached. However, the Germans, because of their dominant power within the EU were able to push a set of policy decisions that benefit Germans at the expense of everyone else.

The German plan has been to intimidate, cajole and terrorize EU partners with fears of economic ruin if they don’t listen. The EU partners plan have been to not call the German bluff.

Just to be clear, the Germans are pissed the Greeks spent German money on crap. The Germans want to punish the Greeks, to teach them a lesson. Punishing your children is permissible. Punishing a nation state is a dangerous game to play. The Germans found a willing partner within Greece to implement some of the punishment and that was Samaras and the New Democracy Party.

The problem is that eventually morale doesn’t improve, the flogging continues and even Samaras was fed up. The Germans had pushed the Greek nation to the point where they were looking for alternatives.

What is not surprising is how the Mass Media controlled by the rich and the powerful, has basically ignored the devastating effects on Greece of the German policy prescriptions. Instead we are told how this is necessary. There is something bizarrely evil in suggesting a generation of a people should be made miserable because it’s good for them.

And here comes Syriza.

The original Syriza party was categorically anti-EU. That party was unelectable. The party used to represent the unrepentant Greek communists who are still bitter that Joseph Stalin handed Greece over to Churchill. That party got into the opposition and was doomed, but for the very talented Mr. Tsipras who figured out how to hang out with Priests even though he is an unrepentant atheist.

The newer, sleeker, and elected party has had to balance out it’s anti-EU policies with the Greek nation’s desire to stay within Greece.

The new Syriza is – to the best of my limited knowledge – a collection of unrepentant PASOK hangers on, communists, and folks who are desperate for a different deal with the Germans. The plan Syriza has is to call the Germans bluff. The Germans have said that it is impossible to renegotiate the terms. The Greeks must suffer while the Germans must not be impacted.  Syriza is basically saying – OXI.

In effect, up until now the German policy prescriptions have not been negotiated, what has been negotiated is the pace of their implementation. Syriza will try and push a different plan.

The core of the difference, again this is speculation, is that the neo-liberal German consensus that inside Germany the state should offer lots of services and outside Germany, non German states should be offer very few is unacceptable. In plain English, the point-of-view that the state should have a limited role outside of Germany so that Germany get’s its money back is what is going to be negotiated.

To make it simpler, should my mother who has not gotten her pension for 4 years get her pension or should the Greek government pay back German loans?

This is what is being negotiated. Whether people who need their pensions should get their pensions or not.

Why then do I say this is about democracy? To date the EU consensus is that if the choice is starving the southern pensioner or paying back loans, the answer was always pay back loans, there was no dissenting viewpoint … With Syriza we have at least one dissenting view point. And democracy exists when there are many people who disagree not a bunch of people who agree. And the fact that Syriza can come to power is exciting.

 

The Price of German Deflation and Cause for Optimism

More thoughts with Syriza in power… 

One of the common misconceptions about the rise of Nazi Germany is that it was cased by hyperinflation.

In fact, it was not.

The rise of Hitler and the descent of Europe into madness was caused by a deflationary spiral triggered by the Gold standard. The German government decided to appease the creditors by forcing the German economy into deflation. FDR by removing the USA from the Gold Standard chose differently. Imagine a different man in 1930 making a different choice in Germany and how the world and the death and misery of the 20th century would have been different.

There is an interesting question that has yet to be answered definitively of whether democracies can withstand hyperinflation but can not tolerate deflation at all. My intuition is that inflation and hyperinflation is tolerable, deflation is not. I suspect it’s because inflation is a rapid price readjustment and deflation is a prolonged price re-adjustment. And I also suspect it has to do with nominal vs real wage changes and our ability to accept loss of real income but not nominal. Just a guess.

The German – and let’s be clear it’s a German political decision – to enforce deflation has lead to the rise of extremist parties across Europe. The reason is quite simple. This is not surprising. The parties in favor of deflation and austerity are telling the electorate that they must sacrifice their well being so that the banks don’t get affected. And that after they have paid the price, the world will look a lot less miserable. It’s not like we pay this debt and we go to status quo ante-belle, it’s like we pay this debt and things remain really shitty. This may or may not be true, but it is what they are saying.

The EU has tried to avoid paying the political price of the German decision to enforce deflation. One of the most egregious examples was when George Papandreou wanted to hold a referendum in Greece on the very question of austerity. The EU was outraged. How dare he ask the voters if they wanted to pay their debts?

Deflationary politics work best if the people don’t get to vote.

In the recent Greek Elections, the vanguards of the deflationary austerity movement tried really hard to terrorize the Greeks.

Unfortunately the problem is 27% unemployment and no end in sight to misery is already terrorizing. And the promise of change, and in particular, the promise to change the equation of pain is very attractive.

At the core Syriza argues that the banks should suffer too. Yes, I know that that party contains the most corrupt elements of Greek society, but the appeal is that the bankers should suffer as well.

And so now we have change. And we have change because of democracy. and at least we Greeks picked a pro-European pacifist rather than a racist anti-European … Score 1 for a brutal Europe war…

If you are a progressive American, this victory of Syriza is cause for optimism. It shows that it is possible to change things. That democracy and the genius of democracy can break the stranglehold of power that the plutocracy has on the levers of power.

If you are an optimist about the human condition, this victory of Syriza is cause for optimism. The Greeks who were desperate chose a party that does not appeal to the worst of what it means to be a European. There was no guarantee that Golden Dawn would not be celebrating their arrival to power.

And if you are an optimist about Greece, well there are no tanks in the street.

The Folly of Democracy in a World of Austerity

Over the last few months as I have been able to internalize the destructive folly of the Austerian movement and it’s attack on the middle class, I’ve slowly swung to support Syriza in Greece. Mind you, I have low expectations from this crooked party. However, having a crooked party, New Democracy pursuing bad economic politics vs another crooked party, Syriza, pursuing good economic politics – where the cost of pain is distributed between creditor and debtor is probably a better thing…

Random thoughts of the moment as Tsipras carries the day in Greece.

  1. Tsipras and Syriza are what happens when you have a democracy and you impose austerity. Eventually the people figure out that they can vote out the bastards flogging them to death. Thankfully the bastards are not the Front National or our own home brew Xrusi Augi (golden dawn)
  2. Unfortunately Syriza is just as corrupt as New Democracy. The corruption of Greek society is so deep and pervasive and rampant that my expectations for improvements are marginal to negative.
  3. Tsipras is going to be a hero. Most of the debt is no longer owned by banks but by governments, coupled with the recent decision by Draghi to do QE infinity, renegotiation of Greek debt will be easy financially.
  4. The Bankers (and the German bankers especially) are going to discover much to their horror that you can beat someone only for so long before they start to object. Democracy is a really dangerous tool in the hand of a desperate people. Mind you the alternatives  are much worse.
  5. The EU project has more hope today than it did yesterday. The decision by the EU to force George Panandreou to pull back on the referendum was an anti-democratic measure imposed by the EU on a sovereign nation.

At least my son is ready for the new rulers of Greece. He learned how to sing this song: