Europe is made of small nations which feel they are independent of each other, an entertaining madness. But its corrupt elite has only one master, body and soul, and it’s on the other side of the Atlantic, where the strongest nation rules (the world, and the minds).
EUROPE WILL GIVE BANKERS MORE MONEY, JUST AS IN THE USA:
The European Central Bank will enable member central banks to buy a trillion euros/dollars of assets from banks (sovereign, that is, government bonds, mostly). This is called “Quantitative Easing (QE).
QE buys assets held by banks, to make banks richer. Supposedly credit will be easier to have for the little guys. The idea is that then everybody will feel richer, when bankers feel better and wealthier.
We are fully in the logic, and mood, that bankers, and their delicate psyche, make the world turn around.
Make no mistake, as Obama would say: we are still in democracy. Proof? Common citizens are not asked to kneel when bankers pass by on their way to private jets. At least, not yet. What the Commons are asked to believe is that bankers will become interested in their miserable, unworthy plight. Instead of sending all the money in the world to fiscal heavens, financial derivatives, and dark pools. As is entirely their right, as bankers created the world, and thousands of pet politicians, besides.
What QE does, is to remove from bankers the excuse that they do not have enough money. Don’t laugh: bankers own everything, including the notion of seriousness. That’s why satire is not welcome in the USA.
Europe is following the USA, which started an enormous QE as Obama got to power. While preaching austerity, and accusing Europeans to be big spenders addicted to state insured health care (instead of the wonderfully profitable Obamacare).
The same as in the USA, giving bankers money, was done in Great Britain (and that’s why interest on UK’ long bonds are thrice those of France).
By comparison to what the European Central Bank (ECB) is going to do, the TARP inspector in the USA claimed that the Fed provided eight trillions of QE (the Fed says it owns 4 trillion dollars of USA government bonds from the Treasury of the USA. to which it returns billions of interest).
Krugman criticizes Europe to have been “Too Responsible”: “The United States and Europe have a lot in common. Both are multicultural and democratic; both are immensely wealthy; both possess currencies with global reach. Both, unfortunately, experienced giant housing and credit bubbles between 2000 and 2007, and suffered painful slumps when the bubbles burst.
Since then, however, policy on the two sides of the Atlantic has diverged. In one great economy, officials have shown a stern commitment to fiscal and monetary virtue, making strenuous efforts to balance budgets while remaining vigilant against inflation. In the other, not so much.
And the difference in attitudes is the main reason the two economies are now on such different paths. Spendthrift, loose-money America is experiencing a solid recovery . Meanwhile, virtuous Europe is sinking ever deeper into deflationary quicksand; everyone hopes that the new monetary measures announced Thursday will break the downward spiral, but nobody I know really expects them to be enough.”
Neither did the ECB chief, who said exactly that. Clearly, Europe did not create enough money.
Krugman did not explain why how the difference arose, and he is silly to believe that the economy of the USA is now growing at a 5% just because its bankers are bathing in money. Economist are often one trick donkeys, but here Krugman overlooks the obvious: look at the price of energy, look at the tax heaven status of the USA, look at USA monopolies.
EUROPEAN LEADERS ARE SERVANTS OF THE GREAT WALL STREET SPIRIT:
The question is why did American politicians and European politicians behaved so differently from each other?
The reason is simple: American politicians are masters, European politicians are servants, or, at best butlers, of the former (Jean-Claude Juncker being an example of the latter sort).
Nowadays, a politician is a professional employed by wealth. She, or he, is like a bookmaker, somebody who takes bets. In this case, the bets are on those policies who will benefit most those who have the money, that is, the power. It’s a delicate thing, made of polls, lies, and taking orders from wealth.
That was completely obvious in France: the ex-fascist, Mitterrand, ran for president on a socialist-communist platform. Once that did not work too well, the Vichysto-resistant president went on a Wall Street compatible program, and France has never looked back since (with disastrous consequences).
Now they teach five year old French children how to do banking (at least my daughter explained that last week). Hey, I guess, she can become a banker too, and get money for nothing. If not that, she can turn to Islamophilia, and make a career talking about big, bad French imperialism, until Wall Street proposes her a job. But I digress.
If France fell in that high finance trap, money for nothing thanks to friendly bankers, you can be sure the rest of Europe did even worse. (Don’t roll out Germany as an example of probity: the success of its expensive cars, I drive one, and its machine tools export was greatly obtained by paying workers salaries as low as one euro an hour. This has just been corrected.)
WE PLUTOCRATS RULE HELL:
The most powerful nation, the USA, is ruthlessly led by its plutocracy. The bubble of 2008 transferred massive winnings from bets by some plutocrats against their peers and against giant money center banks which were public in two ways: on the stock exchanges, and, more importantly, as the organizations in charge of creating most of the money (through the extension of credit).
The bubbles popped. The financial system, throughout the world, was bankrupt. To fix it, the Central Banks enabled the creation of massive new credit (=money), by lowering interest rates to zero. The money center banks were then free to re-enact their previous act, and re-invest massively in financial derivatives, same as before, but now even more.
True, Obama dispersed a few hundred billions of “stimulus”. Much more money went from the Fed to the money center banks, trillions of dollars of it. One started, just as before.
A lot of the wealth of the USA comes from fracking (a gift from god), Wall Street conspiracies, and worldwide tax dodging by giant USA monopolies, all of this with the complicity of the world’s most powerful capitals, Washington and New York.
THE EUROPEAN ELITE IS CORRUPT:
If not corrupt as far as getting money directly (but it does: watch the number of EC commissioners who ended in fancy Wall Street employ), its mind is sure corrupt (they all want to be employed by Wall Street; by the way, lots of French president got lots of money, and not just directly from Wall Street, or the like; an example was torrents of money from Hariri, a Lebanese-Saudi businessman, later exploded by Hezbollah).
Is the European elite culprit? Sure. It was bought into the mood, and money, coming from the USA. So it saw nothing, it wanted to see nothing.
So the European elite saw nothing that what was going on. It did not see the more than 100 billion of tax dodging by USA corporations, through Luxembourg alone. It did not want to see it, so it did not see it. The European elite did not see the Euro which was too high, way too high, maybe twice the vale it deserved against the dollar.
The European elite did not see the cutting of the science budget in Greece by 75%, and the like. The European elite did not see the young people deprived of education, of jobs, of future, of money. The European elite did not want to see European discoveries exploited in Silicon Valley and coming back as tax dodging monopolies. The European elite did not want to see that European energy became twice more expensive than it is in China, or the USA.
All what the European elite has been doing, for 35 years, is to please plutocracy (also known as “liberalism”). Plutocracy central is based in the USA, in the most powerful nation. Thus, in a way, Europe is paying the price of not being master of its own destiny, because, naturally, its elite politicians go to serve the richest masters, with the biggest army, and those are based in the USA.
(The USA’s wealth has much to do with being the owner of a giant expanse of temperate real estate, immensely rich in all ways; it’s not all about today’s conspiracies.)
So the USA got the best policy, not because the Americans are the smartest, but because they are the masters.
The Europeans are “much too responsible”, because they are, fundamentally, servants, and servants have to be responsible. Servants of their masters in the USA, one rung below the servants there.
Will Europe revolt?
Maybe it will. Maybe it will wake up from its Wall Streetophilia, Washingtonophilia, Islamophilia, and Europhobia, which has masochistically affected it al too long.
The satirical, thus critical, core of Europe is France, and France got a number of jolts. The last of which left not just the president of the USA pretty cool, but even officially disingenuously spiteful of Europe’s alleged lack of inclusivity.
The French Republic is under attack, and maybe it is what it will take. France, with her welfare state, under attack, may remember who created Al Qaeda. France may remember that Wall Street and other vast chunks of USA plutocracy are not her friends. Ever since they financed Hitler in the 1920s and 1930s. Or even before that.
The adviser of president Wilson proposed an alliance to the Kaiser on June 1, 1914; said alliance was crucial to said Kaiser, in the first three year of the war. That such facts are not in Franco-British (or German!) history books is very telling. It means official history has a Washington bias. (Sponsored by the same people who brought you Islamophilia, and decry European colonialism! Never mind that Europe’s largest colony is the USA itself!)
France told the European Commission (EC) that she will disregard the deficit limits (as the UK, did, long ago, by the way). Now the EC says it’s a great idea.
Bring the Euro down to 80 cents on the dollar, or lower. Institute deficit spending. Rearm. That’s where hope lays. Following the poisonous, Trojan Horse advice from Washington, for Europe to lay on her back and present her soft belly, is only the path to gloom and doom.
And please do not restrict the financing of Europe to QE, Wall Street style. American corporations ought to pay tax, effective immediately. Just sequester 10% of their revenues, and, if they don’t like it, they can go back where they come from.