Archive for the ‘European Union’ Category

Where to now, Homo Developus?

January 16, 2019

Everybody knows that a few years ago we had a big economic breakdown. There were many reasons to explain  what happened in 2008.

Let’s step back in time a little and consider what has taken place on Planet Earth.

During the 1800’s and 1900’s our developed nations undertook a vast, worldwide surge of industrial development, which was accompanied by a universal expansion of business and corporate prosperity. This hyper-expansive phase of human development required very large-scale extractions of natural resources, which were then transformed into mega-stocks of consumer goods.

An abundance of consumer goods brought forth an abundance of consumers.

Consuming.

Consuming the goods, consuming the planet.

The end of the 20th century brought a vast slowdown. It happened in the fall of 2008, and regardless of what the bullish analysts and stimulus-chasers declare, we are still mired in that big slowdown of ’08.

And will continue to be. This is going to morph into a vast leveling out. The industrial age is over. Our planet will not tolerate another 200-year extraction expansion.

Now we have entered into the Age of Sustainable Technology and Appropriate Industry.

And herein a question arises.

Who will run the world?

Is there a cartel of Carnegie, Rockefeller, Edison and JPMorgan-types out there who will forge a new system to transform the old Industrial Infrastructure into the new Sustainable Society?

As the next surge—the post-industrial phase— is being initiated by a new breed of Industrialist . . . the Gates, the Jobs, the Bezos and Buffets . . . the industrialized Civilization stumbles into a new Electronified Zone.

A digitized twilight zone, as it were.

In the wake of the great ’08 Slowdown, we encounter a host of questions that define the logistical problem of where to go from here.

During the Investment Segment’s breakdown of ’08, a lot of very complicated financial engineering became unwound.

One financial analyst, John M. Mason, recently offered an explanation that includes this analysis of what happened in the financial world during the decline of our industrializing phase:

But, in the developed world, the presence of lots and lots of liquidity means very little in the way of corporate capital investment. The environment of credit inflation, built up over the last fifty years of so, has created a culture of financial engineering in the business community and, consequently, corporations act differently now than they did when most of the current economic models were constructed. Government stimulus gets built into greater risk taking, greater financial leverage, and financial investment, like stock buybacks.

   (https://seekingalpha.com/article/4233178-supply-side-world-europe-well-united-states?ifp=0&app=1.)

So it seems to me that the financial guys—the wallstreet wheelers and dealers, etc—having running out of real new industrial infrastructure to invest in, turned to MBS schemes and CDO games in order to keep their game going. Instead of their oversized financial whirligig running on old Industrial Growth stimulants, they rigged it to run on the fumes thereof.

Now in a post-industrial age, we find ourselves as a species, Homo Developus, scratching our heads and wondering where do we go from here?

It just so happens that, in the wake of the Great Industrial Expansion of Planet Earth, there emerges a vast bureaucracy of Smart People—number crunchers, economic theorizers, technocrats, academics, programmers, bureaucrats, not to mention the mysterious ghosts of AI —who propose to reconstruct the detritus of the industrial age into a systemic quasi-social Union that will make sure everybody is taken care of.

And so I’m wondering, what’s the best way to administrate such a civilization?

What’s the best system for governing a federation of post-industrial nations?

What’s the the most effective strategy for managing a cushy, highly-developed Society?

What’s the most humane political structure to assure income and health for all citizens?

Should Europeans, for instance, appoint multiple layers of bureaucracy to enforce labor laws so that every person has a guaranteed income?

Should the State take control of business so that everybody gets a minimal piece of the pie?

And these philosophical, or sociological questions arise:

What motivation compels some individuals to seek opportunity and then develop that opportunity into abundance and prosperity?

What drives the go-getters to excel in economic pursuits? What motivates them to acquire work, money, property, resources, and then manipulate those assets into an overflow of wealth?

What incentive impels them to take care of themselves and their families?

On the other hand, what compels some other people to, instead,  take charge of bureaucratic agencies in order to administrate a Society that assures everyone a minimum of economic assistance?

What drives some analytical people to write laws and devise policies for systematically managing governmental bureaus to assure that everyone is taken care of?

Who is in charge here?

Who is going to run the world?

Will it be the go-getters, the pioneers, movers and shakers, developers, entrepreneurs, rule-breakers, industrialists, business mavens?

Or will it be the wonks who manage the world—the academics, the specialists, bureaucrats, rule-makers, policy-crafters, the tweakers of governmental largesse?

EURomeHdq

Consider Esther Lynch’s observations:

The ETUC has watched the rise in precarious working conditions in Europe—platform working, zero-hours contracts, bogus self-employment and so on—with deep concern. Research in the UK found that young people on zero-hours contracts, for example, were far more likely to report mental and physical health problems than their counterparts in stable jobs. A study by the University of Limerick in Ireland warned that people on non-guaranteed hours could become ‘trapped in a cycle of poverty which strengthens employers’ control’, generating a fear of being penalised if they raised grievances about working conditions. In response, the Irish government has taken steps to prohibit the use of zero-hours contracts, unless the employer can show a genuine business need. Guaranteeing transparent and predictable working conditions would have wide-ranging benefits, in terms of workers’ health, work-life balance and employee retention.

  (https://www.socialeurope.eu/tackling-insecure-work-in-europe)

What does the peaceful development of Civilization require? Management by one, or the other, of these two types? Or Both/and?

Is Civilization founded upon a principle of every man/woman for hmrself?

Or will it settle into BigBrotherSister administering a vast Guarantee for All?

Or something in between.

Keep your eyes open to watch what develops.

Smoke

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Et tu, Brussels?

October 23, 2018

Of course everybody who goes to Rome brings home mucho pictures. People travel there from all over the world to tour the originating sites of the ancient Empire; then they take a little chunk of early European history home, in the form of photographs.

When we were there, yes, we certainly did do the obligatory tourist ritual of snapping photos of the so-called Imperial City. You’ve probably seen classic images of the Roman ruins, which commemorate the Empire period of two thousand years ago.

But I was most fascinated with a relatively new structure there, Il Vittoriano.

Designed in 1885, inaugurated in 1911, and completed in 1925, this incredible monument makes an absolutely grandiose visual impression when you first catch sight of it.

VitorioB

You can see from this grand edifice that the Italians have never forsaken their proudly imperial self-image.

This morning, however, a Roman venue of a grittier sort—the Circus Maximus— was brought to my attention. In his Seeking Alpha post,

    https://seekingalpha.com/article/4213358-now-circus-maximus?isDirectRoadblock=false

Mark J. Grant used that  ancient racetrack as a metaphor for the  fiscal contest that is now heating up over in Europe.

Here’s what Mark wrote about the presently escalating Continental showdown:

“The new “Circus Maximus” will include all of the European Union and their population of 512 million people. Sit back and enjoy the grand spectacle as Italy has now presented its budget and the European Commission has sent it back. Rome then reacted to Brussels and stood steadfast on the banks of the Tiber and now the overmasters in Brussels and Berlin will hand down judgment, and likely some form of bureaucratic justice, that was not fashioned in Italy, but which Italy is expected to obey.”

The original Circus Maximus, however is just a dirt racetrack.

If you’re a boomer geezer like me, you may remember, from a classic race scene in the 1959 MGM movie, Ben Hur, Charlton Heston heroically outmaneuvering a less-than-honorable competing charioteer, to win the great chariot race.

  BenHur

That scene may or may not have taken place in the Circus Maximus of olden times.

The real Circus Maximus, where those famous chariot races usually took place, wasn’t conducted in the Colosseum. The actual site was really a huge dirt track, located near the Tiber River, beneath Palatine Hill, where Roman emperors and their hobnobbing hoodoo entourages could view the spectacle from an elevated, privileged position. Here’s what the real Circus Maximus looks like now:

CircMax1

Seeking Alpha blogger Mark J. Grant speculates figuratively on how the present European budgetary shootout at the Circus corral may turn out:

“The European Commission will likely wield the big stick. This is initiating its so-called ‘Excessive Deficit Procedure.’ This process has never been used before and will likely be tortuous for both Italy and the European Union. Fines have never been applied to any country, with previous breaches by France and Germany overlooked, and yet, there is always a first time.”

If Mark J Grant’s racetrack metaphor is indeed indicative of the present European Contest, we’ll see in the days ahead whether Italy’s impudent leaders can prevail in their fiscal rebellion, or whether they will go down with classic mutterings of “. . . et tu, Brussels?”

Smoke

The European Project

September 19, 2018

The Beginning of the End of the Royals running Europe started with an upstart French officer named Napolean and a musician from the German outback named Beethoven.

The End of the Beginning of the End came when Austrian Archduke Franz Ferdinand was assassinated in Sarajevo in 1914, the event that ignited the First Big War.

Archduk4

The End of the Royals running Europe came when the appointed Generals, elected Presidents and Prime Ministers of a war-crippled Europe assembled in Versailles, France, in 1919.  The secular Leaders began trying to pull the pieces of Europe back together again, to reset Euro Civilization on a new Democratic/Republican game-plan.

StreetValncia

Since that time, the Europeans have had a rough time of pulling themselves together as a political entity. To begin with, the rubble-heaps of post-WWII Europe ended up  in a new polarity of two distant controlling hegemonies—the US and the USSR. These two emergent political empires  were centered  far outside of the fanciful entity we know as Old Europe, which existed in previous history as a continental area governed mostly from these ancient Capitols:  Athens, Rome, Madrid, Paris, London, Berlin, Warsaw, Prague, Budapest, Vienna, and—a most honorable mention—Geneva.

I call Geneva  honorable  because it is the City  on that grand network most associated with a very important concept: Peace.

The Peace of Europe had been, for 1900 years, an elusive State of Affairs, which somehow managed to survive as a glimmer of hope in the Heart and Soul of a quasi-mythical Europa.

Europe is very old, but contemporary Europeans have taken on a venerable Project to form a European Union. Exactly what that is, is a matter of political evolution, politics, compromise, and of course, Money.

This EU is a logical step forward, because the formerly long-hoped-for Peace of Europe has been flourishing since Allied victory was won at great cost of blood sweat and tears, in 1945. By the grace of God and Man, Europe has been at peace with itself since that time, 73 years.

But the next step beyond the Peace of Europe– European Union– is a prospect as elusive as finding the Holy Grail, or Valhalla, or Arcadia, or Elysian Fields of Camelot or Heaven itself.

But its political success is nowhere as easy as the Prospect for Unity that we Americans had back in the day. We had a vast, undeveloped continent as a frontier, which was populated originally by primitive tribes who were unorganized and unprepared to deal with our transplanted European development Mindset.

Most of us Americans had ancestors who wandered via Ships across the Atlantic to—as it turned out— find and construct a New World. Our forebears were confronted only by those undeveloped tribes who were already here, and a bunch of competing, mostly-poor immigrants like ourselves from different mostly-Euro traditions.

We certainly had some problems along the way, getting it all together as the United States of America. We even had a goddam Civil War trying to get it all worked out but we managed to get through that and keep the Union going, and expanding all the way to the Pacific shore.

Yes, we certainly had some problems getting it together, but our USA has been, relatively speaking, a light-duty Project compared to what the Europeans have been dealing with since the Collapse of the Old Roman Empire.

We New Worlders had advantages. We did not have, you see, all that  2000-year-old institutionalized sociological, economic and ethnic baggage that the Europeans have had and still have that keeps them caught up in differing National Purposes and Visions.

Presently, between the Teutonic bean-counters and the Mediterranean lay-backs, Europe just cannot get it together to decide how all the Expenses of governance and economic maintenance can be Paid-off.

Now we Americans don’t necessarily pay our Public Deficits either, but at least we are United in our rhetorical affirmation of equality and justice and Credit for All.  So we just keep running up the Tab and nobody gives a dam, because we have been, for a awhile, the, you know, new kid on the block and king of the hill and all that and we can get away with it.

Whereas the Euros are presently arguing about Who is going to pay the bills—the Teutonic bean-counters or the Mediterranean lay-backs.

We Americans cast a trans-Atlantic glance at them and express our deepest concern and well-wishes for a continuing Progress toward the elusive European Union and we say wholeheartedly:

Good Luck with that!

Now here’s the good news.There is a bright lining that envelopes this present Cloud of Complex Cooperation in Europa.

French President Emmanuel Macron has now proposed a new plan whereby the burdens of EU Debt, Expense, Governance and Administration of the EU are Dealt-With according to (as my American online ignoramus self-satisfied cyber-awareness would understand it) gradations of Participation, Responsibility and WhothehellCares-Responsibility in the EntitiesUnited of Europa.

These levels of Participation will be most heavily taken Seriously and Attended-To by those State/entities that are closest to the Center of Power and Influence. The peripheral Nations/States will be garnished according to their relative positions in the  outgoing Concentric Circles of Europe.

These Circles are most likely actually Parabolas. Because the actual Working Center of Europe consists not of one Point, but rather, Two Points, where the real Movers and Shakers (Bankers) of Europe run their Industrial/Financial Empires.

The Two Points are Berlin and Paris. There is a Third Centric point between them: Brussels, which is the errand by for Paris and London.

So we see that, with  Monsieur Macron’s proposed plan for the widening Circles of Influence, Europe has great Hope for the Future.

It may be a plan worthy of implementation. The Europeans have achieved Success in the Development of an essential condition: Peace.

Now it’s just the Money that’s hanging them up.

This American believes that the pesky Arguing about Who pays the Bills is actually Progress, because it is qualitatively better than Bombing each other! So they must have gotten something right, beginning back in ’45.  They have indeed  come a long way since Sarajevo in 1914.

TrainBarc

One more thing, very important. This American notices that, in spite of all the different member nations with different languages and politics and values, their system of Trains and Metros puts ours to shame. With just a mention given to their impressive High-Speed, Efficiency and Clockwork Precision, the most endearing characteristic of the Euro rail is Ease and Comfort. Taking a Euro train trip from one city to another is a much easier and far more comfortable Prospect than doing the yankee airport runaround, with sardine-contortion seating and  limited passage in the aisles when you may have to pee. Most important of all–the train seats are comfortable, roomy, easy to get in- and out-of, and less pricey than planes.

Maybe we can teach them something about Debts Pretension, while they teach us something about Running the Trains.

EuroTrain

Smoke 

The Prescience and Presumption of Karl Marx

May 17, 2018

If you take the time to read Marx and Engels’ Communist Manifesto, you may be surprised at how accurate is their assessment of the 19th century industrializing world.

Before Marx and Engels were born, back in the last quarter of the 18th-century, the world witnessed two major revolutions, the American one in 1776. and the French version in 1789.

These two major historical uprisings evolved very differently, although they had both originated conceptually with the Enlightenment ideas of Liberty, Equality and Justice.

Here in the USA, all we had to do was eject King George III and his soldiers. We sent them packin’ back to the old country, England. Then we had what appeared  to be a virgin continent 4000 miles wide populated by indigenous tribes who had not yet been industrially developed.

In France it was a very different story. The newfound revolutionaries, after decapitating old monarchs and killing off their privileged network of landed royalty, still found their mob-enforced movement dragged down by a thousand-year-old heavy baggage of entrenched, fortified autocratic economy.

I can simplify an explanation the difference between the American and French Revolutions for you this way:

In France, the whole revolutionary process got a lot bloodier, more vicious, and it took a hell of a lot longer time to play out.

A few years after the revolting peasants decapitated Louis XVI and his queen Marie Antoinette, Napolean came along, took charge of the debilitated French state and rearranged everything. Later, after he went down, France  was in disarray for the next century, trapped in a revolving door of revolutionary fervor, anarchy, stubborn monarchists and a world that was changing faster than you can say “modernizing industry.”

Into this cauldron of overheating European political and mechanizing discontent, Karl Marx was born in 1818.

KarlMarx

Although the young communist was of German birth, his entrance to this world came in Trier, a town very near the French border.

Karl was a very smart guy. During the time of his educated, idealistic youth, he noticed and publicly identified many trends of modernizing industry and economics that were rapidly industrializing Europe and  eventually the entire world. Things were changing faster than a speeding locomotive.

Within all those changes, Marx identified a new socio-economic class that was establishing itself as the new people in-charge, after the fall of the French monarchy (the first of many monarchies that would be destroyed in coming years). This new, rising class of merchants, managers and craftsmen he called the “bourgeoisie.”

In his eerily prescient analysis of that emerging upper-middle class, Marx also hit on a description of  what we would later call ‘globalization,” Marx wrote:

“The bourgeoisie, by the rapid improvements of all instruments of production, (and) by the immensely facilitated means of communication, draws (sucks) all– even the most barbarian– nations into civilization. The cheap prices of its (the bourgeois’) commodities are the heavy artillery with which it batters down all Chinese walls, (and) with which it forces ‘the barbarians’ intensely obstinate hatred of foreigners to capitulate. It compels all nations, on pain of extinction, to adopt the bourgeois  mode of production; it compels them to introduce what it calls civilization into their midst, i.e., to become bourgeois themselves. In one word, it creates a world after its own image.”

During the turbulent 1840’s, Marx labored with his associate Friedrich Engels to describe and evaluate these historical changes. Together they devised a fix for the world’s problem of a new bourgeois upper-class cruelly exploiting proletarian workers. Thus the Communist Manifesto developed. In 1848, they published the first version of their hot-off-the-press world-changing document. Here’s one part of their assessment of a rapidly industrializing 18th-century Europe:

“Modern industry has converted the little workshop of the patriarchal master into the great factory of the industrial capitalist. Masses of laborers, crowded into the factory, are organized like soldiers. As privates of the industrial army they are placed under the command of a perfect hierarchy of officers and sergeants. Not only are they slaves of the bourgeois class, and of the bourgeois State; they are daily and hourly enslaved by the machine, by the overlooker, and above all, by the individual bourgeois manufacturer himself.”

Marx and Engels identified the disruptive attributes of a new, capitalizing economic steamroller of modern industrialization. They foresaw its accompanying alienation, which would, it seemed, forever confound the proletarian working classes  in Europe, Russia and eventually every nation in the world. In the Communist Manifesto of 1848, Marx and Engels wrote:

“The bourgeoisie cannot exist without constantly revolutionizing the instruments of production, and thereby the relations of production, and with them the whole relations of society. . . Constant revolutionizing of production, uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation distinguish the bourgeois epoch from all earlier ones. All fixed fast-frozen relations, with their train of ancient and venerable prejudices and opinions, are swept away; all new-formed ones become antiquated before they can ossify. All that is solid melts into air, all that is holy is profaned, and man is at last compelled to face, with sober senses, his real conditions of life, and his relations with his kind.”

The dynamic theorizing duo, Marx and Engels, had figured out that very disruptive bourgeois-imposed changes were in store for humanity. Little did they realize that the revolutionary, ostensibly corrective measures they would soon be positing would be ultimately just as disruptive, if not more-so, than the maelstrom of rapidly escalating industrialism that was fast overtaking 19th-century Europe.

Marx and Engels went on to concoct an elaborate prescription to fix the world and thus deliver us from the ravages of modern capitalism and its dehumanizing industrialization.

If you look at the implementation of their communist doctrine as it has evolved in the last  century and a half, you may be dismayed at how brutally the zealous proponents of Marxist communism (Stalin, Mao, Ho Chi Minh, Pol Pot et al) screwed up the original idealized vision for world communism.

Which goes to show that the best-laid plans of mice and men are generally worked out in programs and institutions very different from their original visions and versions.

Later, when Socialists came along, attempting to reconcile the old System of autocratic Europe with a perpetually revolutionizing Communist big-fix, Marx pooh-poohed the wimpish compromisers, remarking . . .

“. . . Socialism, however, (does not) understand the (necessary) abolition of the bourgeois relations of production, an abolition that can be effected only by a revolution.”

So here’s my question for Karl and Fred:

Hey, since you did identify  the extremely disruptive, debilitating bourgeois rearrangement of a capitalist, 19th-century world,   would your proposed communist remedy  be less disruptive and crippling than the total, ongoing revolution that a communist fix would require?

I think not.

Furthermore, if subsequent history is any indicator, the changes in human activity that would be necessary to manifest a communist society as idealized by Marx and Engels—such changes would require constant correction, and therefore perpetual revolution.

Doesn’t sound very beneficial, from a human standpoint.

Furthermore, this writer would suggest:

Since your theorized systems for world improvement dictate that the revolutionizing proletariat must cast aside their “opiate” of religion, and thus deny the presence and power of “God” . . .

it would seem that many of the simpleminded 21st-century religious proletariat workers out there in flyover country or Manchester or Italy or wherever—they might rise up and reject the technocratic decrees of their elitist deep-state Marx-inspired EU overlords.

I know you wanta write them present-day uncooperative proles off as “alt-right” and reactionary, but it seems to me they are the same “proletarian” workers that Marx and Engels thought they had identified as the future vanguard of true communism.

Apparently they have something else in mind than technocrat-generated statism, maybe just a “leave us alone” revolution.

King of Soul

Austerity or Stimulus?

February 25, 2017

Well this is an improvement.

When I was still a gleam in my daddy’s eye, Germany fought a world-sized war against France. But now, in 2017, all the obsolete ideology that then fueled both fanaticisms–fascist v. communist–has withered down into a battle of ideas.

Fiscal ideas, like whether budgets should be balanced, or put on hold until things get better.

From a Peace vs. War standpoint, I’d say that delicate balancing act is an improvement, wouldn’t you? Budgets and Economic Plans are, theoretically, much more manageable than tanked-up military campaigns.

Now Germany and France– those two nation-state heavyweights whose fiscal priorities set the course for the rest of Europe–they are getting along just fine now. They expend financial energies trying to keep the whole of Europe humming along on all cylinders. Budget deficits that drag down Euro economies are generated mostly in the lackadaisical southern  economies–Greece, Italy and Spain.

But those two mid-continent economic heavyweights–France and Germany, function as fiscal opposites, polarizing European values and budget priorities in opposite directions. They are two very different countries; and yet Germany and France are not as opposite as they used to be. A lot has changed since they finally made peace back in 1945.

At the time of that last Great War, early 1940’s, Germany was suffering through the death-throes of a dying monarchy. What was left of the Kaiser’s authoritative legacy had been lethally manipulated into a world-class death regime by a demonic tyrant who wore an odd, obnoxious little mustache on his flat German face.

France up to that time was still stumbling through a sort of awkwardly adolescent stage, having booted their kings and queens out back in the early stages of the industrial revolution, and then replacing, in stages, the ancient monarchy with a struggling new Republic.

What the French did as the 18th-century came to a close was similar to what we Americans did, but different. We had ditched King George III in 1776. The French cut off Louis XVI in 1792. On the other side of the Rhine, the Germans kept their Wilhelm top dog hanging on a thread until the Allies ran him down in 1918.

We Americans did a whole new thing after we rejected the old wineskins of monarchic government back in 1776; we had a lot going for us–a vast, nearly-virgin continent that stretched out for 3000+ miles, with plenty of room to grow,  and to expand our new-found explorations for Life, Liberty and Pursuits of Happiness.

The Europeans–neither the French nor the Germans–did not have all that fruited-plains expansion space like we had. They were cramped up over there in the Old World.

Having wielded a fierce guillotine ruthlessness upon their king and queen, the French tried to spread the wealth all around, ensuring that everybody got a chunk of it. They had wrung a blood-stained liberte from the palaces of privilege in 1789. Over the course of the next century and a half, they generally moved leftward the whole time, toward an egalitarian idea of solidarity.

The Germans have always tended toward authoritarian leadership, which is one reason why Hitler was able to pull off the abominations that he did. But we Allies put that to an end in 1945.

Thank God.

Now in the post-WWII Europe, the Germans have turned out to be pretty good kids on the block, considering all that had happened back in the day. The last 3/4 of a century has seen a remarkable recovery. They went through some serious changes, rebuilding after  losing two wars, and then being divide into two different countries.

Since 1990, when Germany became united again into one country, those krauts have established a pretty impressive record. They now have the strongest, most stable economy in Europe.  One reason it turned out this way is: the Germans have historically been, by necessity, very disciplined, rational people and they know how to get things done.

The French are different from that. You gotta love the French. As the Germans have made the world a better place with their great music (Bach and Beethoven), the French have brightened and lightened our worldly life with their very lively, expressive and impressionistic art, coupled with their unbridled Joie de vivre. And let’s not forget the original architectural piece-de-resistance of the Western World. It was French creativity married to inventive 19th-century industrialism that brought us the Eiffel Tower in 1889.

ParisGargoyl

The French do progress with style and artistry; the Germans get it done with impressive efficiency and precision.

As an American who has geneologic roots in both cultures, this fascinates me.

Their two different attitudes about generating prosperity also encompass, respectively, their approaches to solving money problems.

Or more specifically. . . solving “lack of money” problems.

A new book, Europe and the Battle of Ideas, explains how these two nations, as the two polarizing States of modern Europe, each lead in their own way to set policy, together,  for solving Europe’s financial problems. Their tandem leadership is enhanced by their two very different strategies.

The simplest way to describe their treatments of European deficits is this:

The Germans are into Austerity; the French are into Stimulus.

Or to put it into a classic perspective:

The Germans want to balance the books,  thereby squeezing all governments and banks into economic stability. The French want the assets to get spread around so everybody can have a chunk of it.

How do I know anything about this?

This morning I saw Markus Brunnermeir being interviewed; he is one of the authors of the new book, Europe and the Battle of Ideas.

  https://www.socialeurope.eu/2017/02/europes-future-will-settled-battle-ideas/

In this fascinating, very informative interview, the questions are being posed by Rob Johnson, President of Institute for New Thinking, whatever that is.

Together, these two guys explore the two basic problem-solving approaches to working out Europe’s economic deficiencies. And it just so happens that the two main strategies are related to those two old nationalized culture, described above, between Germany and France.

Sounds simplistic perhaps, but this comparative analysis makes a lot of sense when you hear these two knowledgable men talk about the present condition of economic Europe.

So, rather than try to explain it to you, I’ll simply leave you with this list of characteristics, as identified by. Mr Markus Brunnermeier. The list identifies how each country’s budgetary priorities contributes to a strategy for solving Europe’s fiscal woes.  My oversimplified version of it  looks like this:

France

Germany

1.Stimulus

1.Austerity

2.Liquidity

2.Solvency

3.Solidarity

3.Liability

4.Discretion

4.Rules

5.Bail-out

5.Bail-In

Consider these two lists of national characteristics as two different strategies for solving large-scale economic problems.

Here are a few notes I made while watching Mr. Johnson interview Mr. Brunnermeier:

For French, the problem is always liquidity. Stimulus will flush money out of markets again.

Germans see problems as solvency difficulty. Fix the fundamentals. Don’t throw good money after bad.

French: If you see it as a liquidity problem, just bail them out.

German. If you see it as solvency problem,  Bail in, to avoid future hazards. Bail-in means: Bond holders who essentially gambled with a country or bank and  then reap the gains on upside– they should take losses on downside.

There was a radical shift in attitudes in Europe over the Cyprus bank crisis in spring 2013. Who pays? Who covers the losses?

. . . Bail-in or bail-out?

French fear systemic risk so they tend toward governmental bail-outs.

The Germans, on the other hand, see crisis as an opportunity to address and solve the systemic deficiencies. So penalize  the depositors/ investors; others will learn from that, and you will have bank-runs in other places. Such circumstances provide incentives for institutions and individuals to take responsibility for their own actions and investments.

Just how the Europeans get all this worked out, we shall see in the days ahead. And the working-out may provide some lessons for all of us.

Smoke

The Rights of Humankind

February 20, 2017

Archives

Twelve score and one year ago Thomas Jefferson submitted an innovative set of political principles to a congress of delegates from thirteen American colonies. The gathered assembly, known as Continental Congress, debated the contents and the merits of Jefferson’s proposal. The document began with these words:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness–that to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed. . .

The world has changed a lot since those words were adopted  as the philosophical basis of a new experiment in civil government. Here are just a few of the ways our world has changed since those revolutionary days:

~ Our fledgling national legislature, known at that time as the “Continental” Congress, is now called the Congress of the United States.

~ We Americans now associate the world “Continental” with Europe.

~ On the “Continent” of Europe, citizen-groups are now struggling to form a workable political basis for a European Union.

~~ Whereas, In the year 1776, when our American Continental Congress adopted a plan for a United States of America, we had a nominal consensus for the basis of our Union; and That consensus was based, rhetorically, upon “certain unalienable Rights, . . . Life, Liberty and the pursuit of Happiness; which Rights that had been “endowed” by a “Creator,

~~ In the year 2000,   the European Parliament adopted a Charter of Fundamental Rights of European Union, by which the peoples of Europe are resolved to share a peaceful future based on common values. . . indivisible, universal values of human dignity, freedom, equality and solidarity. . . based on the principles of democracy and the rule of law.

We see, therefore, that the American Union was initiated during an historical period in which faith in a Creator God was still, at least rhetorically, allowed to be a basis for political consensus.

The European Union, however, is coalescing in a post-modern, humanistic age in which their unity can only be expressed in terms of human agreements and motivations, stated above as common values.

As we Americans ultimately divided ourselves into two primary political identities, Democrats and Republicans, with one side being generally associated with  progressivism programs while the other is  based in conservatism,

We notice that in Europe, in what is now a churning crucible of 21st-century economic constraints, the divisions seem to be congealing toward two uniquely Euro polarities. On the Right side, we find the  Austerians, whose values are based on fiscal responsibility and the austerity that is thought to be necessary for maintaining economic and political stability. On the Left side, we find the Socialists, whose values are based on equality that is assured and managed by the State, which should produce solidarity among the people.

As Thomas Jefferson had proposed a declaration based ostensibly on the zeitgeist of the so-called Age of Enlightenment, so has a spokesman stepped forth, in our age, to propose for the Europeans a document that aspires to manifest the zeitgeist of this (perhaps) Age of Equality.

Toward that end, Mr. Yanis Varoufakis, former Finance Minister of the Greek Syriza party, has proposed a five-point plan by which the Europeans would collectively assure the rights of persons as they are understood in this, the 21st-century.

  https://www.socialeurope.eu/2017/01/new-deal-save-europe/

Stated simplistically, those rights are:

~ a collective investment in green/sustainable technology

~ an employment guarantee for every citizen

~ an anti-poverty fund

~ a universal basic dividend (income)

~ an immediate anti-eviction protection.

So we see, now, that in the 200+ years since the inception of American Democratic-Republicanism, the zeitgeist that was then seen as inevitable has changed. In the so-called Age of Enlightenment (c.1776) we were demanding a Government that would Protect our Unalienable Rights, defined broadly as Life, Liberty and the Pursuit of happiness.

The modern zeitgeist, however, as it appears to be evolving in the Europe of Our Age, is demanding: a Government to Protect our Basic Life Necessities.

Instead of Life, Liberty, and the Pursuit of Happiness, citizens of the World now appear to be demanding Life, Security, and the Pursuit of Equality.

EURomeHdq

And that’s the way it is, 2017. We shall see how this develops as the 21st-century unfolds.

Smoke