Germany decided to go greener than green. Weirdly, that meant increasing the production of the most polluting fossil fuel, lignite. Apparently scared by the tsunami in Japan, it also involved closing down nuclear power. Nuclear power makes zero emissions of greenhouse gases, and it’s nearly as cheap as wind power.
Thus, instead of a fast tsunami increasing sea level by fifteen meters in minutes, Germany has opted for a slow tsunami increasing sea level by seventy meters over, well, a much longer time.
OK, nuclear power has drawbacks: ever since civil nuclear power was used in the USA, nobody ever got killed or injured from it, there. (Whereas coal kills at least hundreds a month… some of it probably from radioactivity, but never mind…) So nuclear power is dreadfully boring. Hence the need to freak out about it.
Going green by going lignite, is a parable for all too many, slightly demented German policies.
All of the Eurozone is on the verge of recession, Germany has grown two percent, total, in six years. Main cause? Not enough money to make the economy turn properly. Also a despondent inner German economy. Hence the need to sell German luxury cars all over the world. OK, machine tools, too.
I used to disdain Paul Krugman’s opinions on Europe, as he was too unaware of the fundamentals, be they historical, political, or economic. However the situation has changed: he had much to learn, and he learned much. Also change did my opinion of German policy, as Merkel got ever more obstinate. In any case, I agree with all of Krugman’s well researched article, Being Bad European. Let me quote from it:
“Unemployment in the euro area is stalled at almost twice the U.S. level, while inflation is far below both the official target and outright deflation has become a looming risk.
Investors have taken notice: European interest rates have plunged, with German long-term bonds yielding just 0.7 percent. That’s the kind of yield we used to associate with Japanese deflation, and markets are indeed signaling that they expect Europe to experience its own lost decade.”
Paul has the courage to go in full PI mode. PI? Politically Incorrect, or Profoundly Investigative:
“Why is Europe in such dire straits? The conventional wisdom among European policy makers is that we’re looking at the price of irresponsibility: Some governments have failed to behave with the prudence a shared currency requires, choosing instead to pander to misguided voters and cling to failed economic doctrines. And if you ask me (and a number of other economists who have looked hard at the issue), this analysis is essentially right, except for one thing: They’ve got the identity of the bad actors wrong.
For the bad behavior at the core of Europe’s slow-motion disaster isn’t coming from Greece, or Italy, or France. It’s coming from Germany.”
Germany has a dreadful history to use its own population as cannon fodder for its plutocrats (see the 1914 German invasion and attack), and currency has a spoiler for reason (see the 1923 inflation, engineered by Schacht, an agent of JP Morgan, and later an instigator and puppet master of Hitler; don’t worry, Dr. Schacht came out of WWII, and a little Nuremberg Trial, just fine).
Here is Krugman again:
“If you try to identify countries whose policies were way out of line before the crisis and have hurt Europe since the crisis, and that refuse to learn from experience, everything points to Germany as the worst actor.
Consider, in particular, the comparison between Germany and France.
France gets a lot of bad press, with much talk in particular about its supposed loss in competitiveness. Such talk greatly exaggerates the reality; you’d never know from most media reports that France runs only a small trade deficit. Still, to the extent that there is an issue here, where does it come from? Has French competitiveness been eroded by excessive growth in costs and prices?
No, not at all.”
One thing that was out of line with Germany, is that it mistreated its working class:
“Since the euro came into existence in 1999, France’s G.D.P. deflator (the average price of French-produced goods and services) has risen 1.7 percent per year, while its unit labor costs have risen 1.9 percent annually. Both numbers are right in line with the European Central Bank’s target of slightly under 2 percent inflation, and similar to what has happened in the United States. Germany, on the other hand, is way out of line, with price and labor-cost growth of 1 and 0.5 percent, respectively.”
Dis-information about France is great in the USA, because plutocratic propaganda knows France is the number one danger country, the place out of which the most dreadful anti-plutocratic, atheist policies emanate. But Krugman has now understood this, so he pounces some more:
“In other words, to the extent that there’s anything like a competitiveness problem in Europe, it’s overwhelmingly caused by Germany’s beggar-thy-neighbor policies, which are in effect exporting deflation to its neighbors.
But what about debt? Isn’t non-German Europe paying the price for past fiscal irresponsibility? Actually, that’s a story about Greece and nobody else. And it’s especially wrong in the case of France, which isn’t facing a fiscal crisis at all; France can currently borrow long-term at a record low interest rate of less than 1 percent, only slightly above the German rate.”
What Germany did was cutting salaries as low as one Euro per hour (completely illegal in France, where the minimum wage was at least ten times that; in 2014 Germany introduced a minimum wage comparable to France’s.)
And Krugman to conclude:
“What we’re seeing, then, is the immensely destructive power of bad ideas. It’s not entirely Germany’s fault — Germany is a big player in Europe, but it’s only able to impose deflationary policies because so much of the European elite has bought into the same false narrative. And you have to wonder what will cause reality to break in.”
It’s true that “German” policies have actually been plutocratic policies: France, Italy and Spain, together, form an economic behemoth much larger than Germany, so they could easily force “Germany” to do whatever they decided. They did not, because they are all serving Mammon.
German policy at this point is irresponsible. It is demonstrated with the numbers Paul rolls out. But there are others. Germany, weirdly, has resisted French efforts at a Banking Union (it agreed only to phase in slowly a reduced version).
The Banking Union would be similar to the FDIC in the USA: banks would be forced to pitch in what would be a mutual insurance fund. With some rules attached.
However Germany is scared that thousands of its banks are under water, so it has refused the oversight of Banking Union. This tends to show that Germany cares more about what Europe brings to it, rather than it can bring to Europe.
When Greece was in full corruption crisis, a small city in Greece was the greatest purchaser of Porsche in the world. This kind of details was viewed as good for German business, but it actually means that the Germans cooperated with the very corruption they later denounced.
So why is Germany behaving this way?
Tough German reforms were instituted by Schroeder, a “Socialist” who turned out basically into an employee of Putin. The West has known many of these pseudo-socialists, who are actually greedy agents of Plutocracy Supreme. (The latest case is the preceding “Socialist” PM of Portugal, who made millions under the table; he was just arrested.)
Schroeder squeezed German workers as much as possible. That depressed German demand, making Germany more dependent upon exportations. But it made the wealthiest, wealthier.
Same old same old: plutocrats reign.
Some will say: ”Oh, but then you agree with the Brits?” Not at all: London has arguably displaced New York as the world’s dirtiest plutocratic center. London is rich, for the worst reasons, to a great extent (not to a full extent: there are actually some good policies in England, if one searches carefully for them).
So what London does cannot be duplicated elsewhere: its unicity makes it wealthy, mostly by attracting plutocrats from all over, insuring they escape the taxman and the lawman, and any sort of decency.
Ultimately, although Krugman praises France, he did not say that France, herself probably the mightiest country in Europe, all around, could very well break out of the plutocratic mold.
What the government of the French Republic has to do is simple: just look at the European Commission in the eye, and say: ”We plan to run a 4.5% deficit for the next two years. Submit.”
In a break with the plutocratic tradition, this is finally just what France did. The preceding European Commissioner of Finance and Economy, a man completely sold to Pluto, bleated his approval. He was then replaced by a Frenchman, ex-finance minister Moscovici.
This whole situation is about a system of thought. It’s time to change it. Understandably, Germany does not trust its revolutionary instincts. That leaves us, once again, with France to lead the way.
Although it’s hard to imagine Hollande leading anything, his Prime Minister is more of a man. Thus, probably, the change.