European Tribune - Community, Politics & Progress.

Barroso to plebes: nice indebted democracy you have there...

by Migeru
Thu Jun 17th, 2010 at 06:54:24 AM EST

Europe's Economy 'Returning to 1930s' - BusinessWeek

"This is extremely dangerous. This is 1931, we're heading back to the 1930s, with the Great Depression and we ended up with militarist dictatorship," the general secretary of the European Trades Union Congress (ETUC) said in an interview with EUobserver. "I'm not saying we're there yet, but it's potentially very serious, not just economically, but politically as well."
Mr. Monks reported that Mr. Barroso has similar concerns, but based on diametrically opposed reasoning. He said the commission chief believes the austerity packages will save Europe from returning to the darkest days of the last century rather than precipitating the fall.
"I had a discussion with Barroso last Friday about what can be done for Greece, Spain, Portugal and the rest and his message was blunt: 'Look, if they do not carry out these austerity packages, these countries could virtually disappear in the way that we know them as democracies. They've got no choice, this is it'."

So, what is Barroso saying? That, if the populace resist the dismantling of the European welfare state (social safety net, health and education) the elites will bring out the guns?

How can it be that the European Trade Union Congress warns that austerity will bring depression and fascism, and that the Neoliberals warns that not introducing austerity will bring fascism? They can't both be right. Or maybe they are because fascism within 10 years is a consequence of the current situation regardless of the austerity measures?

Or is Barroso just a clueless idiot, a deer in the headlights who can't keep his mouth shut?

I swear I'm sick and tired of the European Christian Democrats, of the cozy Hooverian consensus of the Christian Democrat-Socialist/Labour-Liberal Grand Coalition. And I'm sick of the economic ideologues that got us here by poisoning the well and the economists who were complicit by action or omission.

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Barroso to plebes: nice indebted democracy you have there... | 68 comments (68 topical, 0 editorial, 0 hidden)

Hmm, let me think... (4.00 / 3)

I vote for Clueless Idiot.

by Torres on Thu Jun 17th, 2010 at 07:14:33 AM EST

Re: Hmm, let me think... (none / 0)

You could have kept him in Portugal...

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan

by Migeru (migeru at eurotrib dot com) on Thu Jun 17th, 2010 at 07:17:25 AM EST
[ Parent ]

Re: Hmm, let me think... (4.00 / 3)

I'm sorry. He is too slippery and got away at the first chance.

by Torres on Thu Jun 17th, 2010 at 07:41:40 AM EST
[ Parent ]

Re: Hmm, let me think... (none / 1)

Well, I did not vote for him (in the Portuguese elections, for the EU case nobody asked for my opinion).

"Nullius in Verba"

by tiagoantao (put_my_login_here <> gmail com) on Thu Jun 17th, 2010 at 08:53:04 AM EST
[ Parent ]

Re: Hmm, let me think... (4.00 / 2)

I vote opportunist power-monger. Very proper for what he does now (from my EU-sceptic point of view). I would actually ask the europhiles here how such a creature was able to get to the top, if the EU is such a good thing?

Anyway... in this case, I think there is some meat to his argument. Irrespective of whatever measures are correct there is clearly the foul stench of the 30s in the air. There is a growing disbelief in institutions.

I know most people here are cheerful and believe in progress and optimism in general, but so did most people in the roaring 20s... look where that got us into.

I think the idea of decoupling of the EU (in the good direction) is now dead and buried. Or that the people of the EU would join together or so...

...Look, I am not trying to make an anti-EU argument of this, but just noting that the future might not be a good place after all. Over reliance on credit + dwindling resources can hardly be an harbinger of anything good. And also the fact that the kleptocracy has emerged STRONGER from all this.

In times of crises the typical human response seems to be band together (with percieved equals) and all others be damned.

A more realistic approach to the future might be to prepare for bad things. Expectations of progress might actually be counter-productive.

Speculations...

"Nullius in Verba"

by tiagoantao (put_my_login_here <> gmail com) on Thu Jun 17th, 2010 at 08:46:19 AM EST
[ Parent ]

Re: Hmm, let me think... (4.00 / 4)

The reason i don't think of him as a powermonger (although i wont discard him as oportunistic) is because i think he is basically a puppet with illusions of grandeur.
He was chosen by powermongers, and is helping in their dirty work for sure. That was already the pattern in that famous Azores meeting...

by Torres on Thu Jun 17th, 2010 at 10:09:17 AM EST
[ Parent ]

Re: Barroso to plebes: nice indebted (4.00 / 3)

And we've got the ragheads all lined up as the Other to blame it on. Isn't life grand?

Who wants to help me develop the business plan for yellow crescent armband production. I'm thinking we need a good brand name. Market it to governments and city authorities.

by Colman (colman at eurotrib.com) on Thu Jun 17th, 2010 at 07:43:11 AM EST

Re: Barroso to plebes: (4.00 / 5)

There is a lot of things I do not understand regarding the Hooverin coalition.

I can unserstand the masters of the universe trying to dismantle the social safety net (and basically in Spain the reforms do not dismantle that much)... but I do no understand germany masters acting like nuts.

I understand germany not wanting to monetize european debt because they think they are close to full capacity and some inflation could appear there.. so fuck Portugal and Spain...

But i just do not understand how, why Germnay decides to put all Europe near a second recession.

Do they really think that Germany would grow no matter what independently of the Euorpean demand for german good? Do they really think that the financial system is so stable to cope with another round of diminishing value in assets?

Or are they evil and want to destroy all the periphery with the budget cuts, deflation and high unemployment (and high debt) even if this measn to put germany recovery in danger, so as to be the kings of Europe?

Is there any explanation (scenario, paradigm) where these actions make sense from the german view if they were not lunatic? I mean, is there any explanation of why germany would want a second recession.. or why a second recession would be an acceptable outcome given a more scary possibility which I have not heard of?

And a final question.. my aunt has some idea about macro but not that much.. but she has a hunch that all this has to do with the fact that the German banks lost much much more than reported (http://www.elpais.com/articulo/economia/Banqueros/hienas/elpepueco/20100617elpepieco_2/Tes)....they are really dead-walking banks compared with the Spanish, French and most British which are basically healthy if someone pays them (or monetize) the public debt...

Could someone give an scenario where german measures, and german attacks on spanish banks (credit dried out for spanish banks lately) has to do with their sick banks?

And more importantly .. could someone explain me in what sense the german banks could benefit from the austerity measures from a rational point of view (I guess for the crazy nuts, less public debt means more money for the private sector, but they are nuts and believe those Ricardian nonsense)?

Really please I need input.

A pleasure

I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude

by kcurie on Thu Jun 17th, 2010 at 07:53:24 AM EST

Re: Barroso to plebes: (4.00 / 13)

Is there any explanation (scenario, paradigm) where these actions make sense from the german view if they were not lunatic?

Yes.

If you believe in flexible prices; liquid, competitive markets of sovereign consumers; small, independent, utility-maximising suppliers with no market power; perfect informational symmetry; and loanable funds. Then sovereign spending always results in full crowding out of private spending, and sovereign spending is always less efficient than private spending, except inasmuch as it takes the form of purely Pigovian subsidies financed by purely Pivogian taxes.

Could someone give an scenario where german measures, and german attacks on spanish banks (credit dried out for spanish banks lately) has to do with their sick banks?

Yes. They could be trying to make their banks healthy again by supporting a pump-and-dump operation against the peripheral countries' sovereign debt. Alternatively, they could be trying to provoke a peripheral sovereign default, which would allow them to bail out their banks and blame it on the brown people who speak funny. A third scenario is that they realise that they are fucked, underwater, irredeemably compromised, kaput, and are trying to provoke a sovereign default in a peripheral economy so they can pin the blame for their own crisis on the brown people who speak funny.

But the problem with all those scenarios is that they require the German government to be a lot smarter, better informed and more Machiavellian than the record shows them to be.

Which is why I think the reason they're doing what they're doing is that they believe in liquid, competitive markets with sovereign consumers, small, independent profit-maximising suppliers who have no market power, fully flexible prices and transferable funds.

In other words, they are utterly insane.

- Jake

"Terraforming your own planet to make it uninhabitable hardly counts as epic win." - ThatBritGuy

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Jun 17th, 2010 at 08:18:15 AM EST
[ Parent ]

Re: Barroso to plebes: (none / 1)

Yep, dead-on.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (myfriends@thisispancakes.com) on Thu Jun 17th, 2010 at 08:35:06 AM EST
[ Parent ]

Re: Barroso to plebes: (none / 1)

Excellent insight...now I have the Machiavellian scenario I wanted...But if they are evil and they pursue the excuse-and-blame option.. they need to do it without leading Germany to a second recession.. in their magic Ricardian efficient ponny world.. is this possible?

By the way, what is a pump-and-dump operation?

Great comment by the way....

I just do not know if they are nuts.. Krugman has a interesting post regarding "Germany more competitive agaisnt who? well you know who" (the US)... so they can really believe they will eb the new rulers.. or they are just nuts.

A pleasure

I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude

by kcurie on Thu Jun 17th, 2010 at 08:39:53 AM EST
[ Parent ]

Re: Barroso to plebes: (4.00 / 5)

kcurie:

what is a pump-and-dump operation?

Take a position in an asset market, manipulate the market through rumour-mongering to move the price in the direction that suits you, then unwind the position and let the suckers take the loss when the price reverts to the fundamentals.

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan

by Migeru (migeru at eurotrib dot com) on Thu Jun 17th, 2010 at 08:43:51 AM EST
[ Parent ]

Pump and dump (4.00 / 2)

For instance:

Invertia.com - Deutsche Bank se descubre: apuesta 600 millones contra BBVA y Banco Popular		Invertia.com - Deutsche Bank drops its cover: it bets €600m against BBVA and Banco Popular
Hugo Banziger, jefe de riesgos de Deutsche Bank, estuvo el día 10 de junio en Madrid en una conferencia organizada por Goldman Sachs, uno de los bancos de inversión más influyentes del mundo. En ese marco, la entidad germana confesó que ha apostado más de 1.000 millones de euros contra deuda corporativa española (credit corporate). A esa cifra se le unen otros 800 millones contra Portugal.		Hugo Banziger, head of risk at Deutsche Bank, was in Madrid on june 10 at a conference organised by Goldman Sachs, one of the world's most influential investment banks. In that venue, the German bank confessed it has bet over €1bn against Spanish corporate debt. To this figure one must add €800m against Portugal.
Fuentes consultadas por este portal explican que una de las formas en las que Deutsche puede ponerse corto en credit corporate español es a través de CDS (credit default swap), derivado que actúa como seguro contra el impago de una deuda. Desde un banco comentan que puede tratarse también de GGB (Government Guarantied Bonds), o sea, "deuda con aval español". En cualquier caso, sea de la forma que sea, lo que subyace es la visión negativa del banco alemán sobre la economía española.		Sources consulted by this portal explain that one of the ways that Deutsche can be short Spain's corporate credit is through CDS, a derivative acting as insurance against default on debt. From a bank they comment that [the debt in question] could be Government Guaranteed Bonds. In any case, in whatever way, underlying this is a negative vision of the Spanish economy by the German bank.
La mayor entidad financiera del país teutón justifica esta expresiva declaración de intenciones como una estrategia para defenderse de los movimientos en la valoración de los créditos (value of the credits), recoge el diario The Telegraph. En esta reunión, Deutsche aseguró que no tiene ni un solo bono español o portugués, mientras que en Italia mantiene una cartera de 3.100 millones de euros a cierre de marzo.		The largest financial entity in German justifies this expressive declaration of intentions as a strategy to hedge against movements in the value of credit, according to The Telegraph. At this meeting, Deutsche claimed that it doesn't hold a single Spanish or Portuguese bond, while in Italy they kept a portfolio of €3.1bn at the end of March.
...		...
Esta agresiva estrategia de Deutsche Bank contra la Península Ibérica se completa con millonarias posiciones bajistas en BBVA y Popular, segundo y tercer banco español por activos, respectivamente. En marzo de este año, Ackermann advirtió de que la quiebra de Grecia tendría efectos dramáticos en la industria financiera. Toda una declaración de intenciones de la que ahora intenta sacar partido.		This aggresive strategy by Deutsche Bank against the Iberian Peninsula is completed with bearish positions worth millions in BBVA and Popular, second and third Spanish banks by assets, respectively. In march of this year, Ackermann warned that the bankruptcy of Greece would have dramatic effects on the financial industry. A declaration of intentions that he intends to profit from now.

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan

by Migeru (migeru at eurotrib dot com) on Thu Jun 17th, 2010 at 09:52:13 AM EST
[ Parent ]

Re: Pump and dump (none / 1)

A conveniently timely development and article. Do I correctly identify it as appearing dated today?

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer at eurotrib.com) on Thu Jun 17th, 2010 at 10:32:54 AM EST
[ Parent ]

Re: Pump and dump (none / 1)

Apparently there's no date in the original but yes, it was published today.

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan

by Migeru (migeru at eurotrib dot com) on Thu Jun 17th, 2010 at 10:36:57 AM EST
[ Parent ]

Re: Pump and dump (4.00 / 4)

Deutsche reveals £1.5bn short on Iberian companies - Telegraph

Germany's largest bank, which is protected from the shorting of its shares after a government ban, has a £1.5bn short position on the debt of Spanish and Portuguese companies.

Heh. Meantime, Deutsche Bank is short €500m in BBVA and €100m in Popular (1.69% of each).

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan

by Migeru (migeru at eurotrib dot com) on Thu Jun 17th, 2010 at 10:48:11 AM EST
[ Parent ]

Re: Barroso to plebes: (4.00 / 8)

But if they are evil and they pursue the excuse-and-blame option.. they need to do it without leading Germany to a second recession.

Why?

in their magic Ricardian efficient ponny world.. is this possible?

In their magic Richardian pony world, they lack the conceptual apparatus to talk about recessions. There can be no recession, because you can't model recessions with linear equilibrium analysis. And what you can't model, you can't talk about, and what you can't talk about, you can't admit the possibility of.

- Jake

"Terraforming your own planet to make it uninhabitable hardly counts as epic win." - ThatBritGuy

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Jun 17th, 2010 at 09:12:19 AM EST
[ Parent ]

Re: Barroso to plebes: (4.00 / 2)

JakeS:

Which is why I think the reason they're doing what they're doing is that they believe in liquid, competitive markets with sovereign consumers, small, independent profit-maximising suppliers who have no market power, fully flexible prices and transferable funds.
In other words, they are utterly insane.

Is there a political logic to this? If deficit spending ultimately transfers power from politicians (who decide what to do with taxpayers money) to creditors/bankers/institutional investors and global head honchos (who decide who to lend investors money to) is a determination to rein in deficits also a determination to regain political control - regardless of the economic consequences, particularly in the short term?

If, by definition, deficit spending increases the power of global financial elites who must be appeased to approve such spending/borrowing, is a determination to reduce deficits also (at least in part) a determination to limit global financial elite power over decisions which politicians ultimately carry the can for with their local electorates?

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot dotty communists) on Thu Jun 17th, 2010 at 08:45:51 AM EST
[ Parent ]

Re: Barroso to plebes: (4.00 / 3)

No, there is a much better way to do this...just close the mattress...or also-called fiscal paradises.

The way that markets can get out of the bond market (now that they do not trust the private market of bonds) is to keep the money idle in bank accounts off-shore. If you close down this mattress you force it out back to the bond market...and there is not enough public debt now to cover the demand...their power will be nil.

On the other hand if you are scared of the US power then it makes sense, because even if you close the fiscal paradises you can have a US elite which redirects money from European bonds to private american bonds even when american bonds are very risky
(if they are covered by the FED).

So, in the long run, it can be taken as an act of future self-defense against the US... but that's something you can do next year.. and monetize debt now.. that will also fuck them... the reason is why Germany does not do it??? Because market wil not use the euro as a reserve currency in the future as they wish? Destroying your own economy is not a good way to generate confidence. The only explnation is insane fear of inflation in germany when it is really the solution to the problem.

A pleasure

I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude

by kcurie on Thu Jun 17th, 2010 at 08:56:48 AM EST
[ Parent ]

Re: Barroso to plebes: (4.00 / 5)

If deficit spending ultimately transfers power from politicians (who decide what to do with taxpayers money) to creditors/bankers/institutional investors and global head honchos (who decide who to lend investors money to) is a determination to rein in deficits also a determination to regain political control - regardless of the economic consequences, particularly in the short term?

That could be the case, except that deficit spending doesn't transfer control from politicians to banksters. Deficit spending would transfer control in that manner, if deficit spending had to be financed by pre-existing loanable funds.

But the deficit spending of sovereign states creates the funds that finance it out of thin air through legal tender laws. So what transfers control from politicians to banksters is not the deficit spending in and of itself. It's the idea that deficits have to be repaid in the future. Or, if you want to put it a little less charitably, the idea that the sovereign has a greater obligation to the banksters than it has to its citizens.

If, by definition, deficit spending increases the power of global financial elites who must be appeased

santiago has a nice quib about what happened to the Knights Templar when they tried to take one of the first European proto-states hostage to its sovereign debt...

- Jake

"Terraforming your own planet to make it uninhabitable hardly counts as epic win." - ThatBritGuy

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Jun 17th, 2010 at 09:08:11 AM EST
[ Parent ]

Re: Barroso to plebes: (none / 1)

But how can we expect the EU to guillotine bankers when it cannot raise the collective political will to even tax them just a little bit more? The King may have guillotined the Knights Templar, but their successors are getting their revenge now: they have bought out the King and replaced him with a timid bourgeoisie whose ideological upbringing is based on honouring all debts...

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot dotty communists) on Thu Jun 17th, 2010 at 10:06:43 AM EST
[ Parent ]

Re: Barroso to plebes: (4.00 / 3)

You're right about that, of course, but that take is quite simply inconsistent with any effort to protect the political power of elected democratic bodies against the depredations of the international money markets.

If elected officials wanted to protect us against banksters, they would be taxing the banksters to oblivion. They aren't, so they don't.

- Jake

"Terraforming your own planet to make it uninhabitable hardly counts as epic win." - ThatBritGuy

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Jun 17th, 2010 at 10:40:48 AM EST
[ Parent ]

Re: Barroso to plebes: (4.00 / 3)

The masters of the Knights Templar were not guillotined, but burned at the stake in Paris. In 1314, the guillotine hadn't been invented yet...

"Ce qui vient au monde pour ne rien troubler ne mérite ni égards ni patience." René Char

by Melanchthon on Thu Jun 17th, 2010 at 11:15:32 AM EST
[ Parent ]

A fire distinction... (none / 1)

Posted by Melanchthon, the master of the medieval...

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot dotty communists) on Thu Jun 17th, 2010 at 11:42:27 AM EST
[ Parent ]

Re: A fire distinction... (none / 1)

It's summer in the northern hemispheres. Live a little in yer hammock or whatever :)

Book recommendation: Foucault's Pendulum by Umberto Eco.

Diversity is the key to economic and political evolution.

by Cat on Thu Jun 17th, 2010 at 02:32:24 PM EST
[ Parent ]

Re: A fire distinction... (none / 1)

Good idea, good book.

Grabbing what you can, as John Ruskin said, isn't any less wicked when you grab it with the power of your brains than with the power of your fists.

by geezer in Paris (risico at wanadoo(flypoop)fr) on Fri Jun 18th, 2010 at 01:09:03 AM EST
[ Parent ]

Re: Barroso to plebes: (4.00 / 2)

JakeS:

But the problem with all those scenarios is that they require the German government to be a lot smarter, better informed and more Machiavellian than the record shows them to be.

However, I am going to assume that Bundesbank chairman Axel Weber, ECB Chief Economist Jürgen Stark, and Deutsche Bank CEO Josef Ackermann are smarter and better informed than Merkel and Schäuble.

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan

by Migeru (migeru at eurotrib dot com) on Thu Jun 17th, 2010 at 08:50:07 AM EST
[ Parent ]

Re: Barroso to plebes: (4.00 / 3)

But they are also more thoroughly indoctrinated in the (neo)classical, marginalist, equilibrium-based garbage that passes for economic thought in academia.

- Jake

"Terraforming your own planet to make it uninhabitable hardly counts as epic win." - ThatBritGuy

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Jun 17th, 2010 at 08:59:15 AM EST
[ Parent ]

Re: Barroso to plebes: (none / 0)

I just can not I just can not believe that Jurgen Stark believes all this crap... I just can not figure it out.. that's why I think that he does not believe this crap.. and that there could be a rational reason for all this nonsense...

Saving the german banks and pointing the blame? Attacking US destroying your own economy if needed? Somehing..
either this.. or Jurgen Stark is utterly insane.

A pleasure

I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude

by kcurie on Thu Jun 17th, 2010 at 09:03:42 AM EST
[ Parent ]

Re: Barroso to plebes: (4.00 / 2)

Saving the german banks and pointing the blame? Attacking US destroying your own economy if needed? Somehing..
either this.. or Jurgen Stark is utterly insane.

Those possibilities are not mutually exclusive.

- Jake

"Terraforming your own planet to make it uninhabitable hardly counts as epic win." - ThatBritGuy

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Jun 17th, 2010 at 09:13:58 AM EST
[ Parent ]

Re: Barroso to plebes: (4.00 / 3)

European Tribune - Spiegel's Euro Delirium Tremens

Oh, so that's authorised by treaty. Now, is it?
SPIEGEL: In an interview he gave to SPIEGEL a few months ago, Jürgen Stark, the ECB's chief economist, said that the ECB was not permitted to buy government bonds. Who is right?
Trichet: I have already said that this is explicitly authorized by the treaty
So, is Jürgen Stark ignorant or malicious?

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan

by Migeru (migeru at eurotrib dot com) on Thu Jun 17th, 2010 at 09:34:54 AM EST
[ Parent ]

Re: Barroso to plebes: (4.00 / 3)

kcurie:

And a final question.. my aunt has some idea about macro but not that much.. but she has a hunch that all this has to do with the fact that the German banks lost much much more than reported (http://www.elpais.com/articulo/economia/Banqueros/hienas/elpepueco/20100617elpepieco_2/Tes)....they are really dead-walking banks compared with the Spanish, French and most British which are basically healthy if someone pays them (or monetize) the public debt...

European Tribune - Comments - European Salon de News, Discussion et Klatsch - 16 June

El Banco de España publicará las pruebas de estrés a la banca para demostrar su solidez · ELPAÍS.com The Bank of Spain will publish the stress tests of [Spain's] banking to prove its solidity.
El gobernador del Banco de España, Miguel Ángel Fernández Ordóñez, ha revelado hoy que se propone hacer público "el resultado de las pruebas de estrés a la banca" para demostrar la solidez del sistema financiero español. The governor of the Bank of Spain, Miguel Ángel Fernández Ordóñez, today revealed that he intends to publish "the result of the banking stress tests" to prove the solidity of Spain's financial system.
This on the heels of yesterday's
European Tribune - Comments - European Salon de News, Discussion et Klatsch - 15 June
España quiere que se publiquen los resultados del examen a sus bancos · ELPAÍS.com Spain wants the results of stress tests of its banks to be published - ElPais.com
"Si se conocieran los resultados de los test, habría más de una sorpresa", alegan las fuentes consultadas, que subrayan la buena nota obtenida por las entidades españolas. No todos quieren que se conozcan. Josef Ackermann, máximo ejecutivo del Deutsche Bank, declaró el viernes que sería "muy, muy peligroso" difundir los resultados de las pruebas. "If the results of the tests were known, there would be more than one surprise", claim the sources consulted, who underscore the good grade obtained by Spanish entities. Not everyone wants them to be known. Josef Ackermann, chief executive of Deutsche Bank, said last Friday that it would be "very, very dangerous" to release the results of the tests.
Some people appear to have finally figured out this is a narrative war having little to do with economic fundamentals.

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan

by Migeru (migeru at eurotrib dot com) on Thu Jun 17th, 2010 at 08:45:58 AM EST
[ Parent ]

Re: Barroso to plebes: (4.00 / 2)

Berlin Supports Transparency: German Flip-Flops on European Bank Stress Tests - SPIEGEL ONLINE - News - International

According to an article in the Financial Times Deutschland on Thursday, Berlin is prepared to buck the intense opposition of German financial institutes and back the publishing of stress-test data. The report was confirmed by a Finance Ministry spokesman on Thursday.
News of the course change comes a day after the governor of the Bank of Spain, Miguel Angel Fernandez Ordonez, said that Spain would move forward on its own even if the rest of Europe did not. The central bank, he said, "plans to disclose stress-test results ... so markets can perfectly assess the situation of Spain's banking system."
Fretting About Health
Madrid's push to reveal the results of the tests stems partially from a German media reports earlier in the week and repeated in Spanish business paper El Economista on Wednesday that the EU, the International Monetary Fund and the US Treasury were assembling a €250 billion ($335 billion) credit line for Spain. Both Spain and the European Commission were, however, quick to deny the rumor.

Is this the end of Merkel?

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan

by Migeru (migeru at eurotrib dot com) on Thu Jun 17th, 2010 at 12:15:23 PM EST
[ Parent ]

Re: Barroso to plebes: (4.00 / 3)

The spanish real powers are fed up with Germany. The powers inside the Spanish central Bank.. and the spanish banks an elite have decided to fight back in full force.

This is a full kick in the XXXX of a well-known german politican and the German elite.

Right now, Deutche Bank is already getting ready for another bailout... or should be.. this is the end of the german banking industry if Merkel does not bail them out...

And I will love to see how germany justifies further fiscal consolidation nonsense after that....

I do hope this is the end of Merkel and the end of insane fiscal policies...

and all it took is that some master of the universe got really angry with other masters of teh universe...

One thing is to ask the spanish middle class to sacrify for the german banks..another completely different thing is to save the german banks at the expense of the spanish banks.

Or in other words, one thing is not helping Europe with the generation of inflation in the core, and not helping us out to get of the shit..another completely different thing is to force us to be five year or a decade with shit...

This is not Japan.. it does not have to be.. if we only get rid of the stupid german banks. I do really hope that's the case.. and Merkel goes down with them.

What a huge turn around in a couple of hours.

A pleasure

I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude

by kcurie on Thu Jun 17th, 2010 at 12:24:46 PM EST
[ Parent ]

Re: Barroso to plebes: (none / 1)

What a huge turn around in a couple of hours.

Well, Frankfurter Allgemeine published the rumour about Spain negotiating a bailout last Friday so it's taken 6 days...

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan

by Migeru (migeru at eurotrib dot com) on Thu Jun 17th, 2010 at 03:50:13 PM EST
[ Parent ]

Re: Barroso to plebes: (none / 1)

"this is the end of the german banking industry if Merkel does not bail them out..."
Please god, let them remember there is such a thing as rights issues.

And it's not strange and exotic. It's bloody econ 101.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid (arvid.hallen at gmail.com) on Thu Jun 17th, 2010 at 04:02:40 PM EST
[ Parent ]

Re: Barroso to plebes: (4.00 / 3)

Well, see again what I posted yesterday from Eurointelligence re German elites and their attitude:

Germany elites have lost confidence in Merkel and her government

An poll, regularly carried by Capital Magazine, shows that Germany's elites have lost confidence in the Merkel government, and also in the chancellor personally. The poll is not representative of the country's at large, but those polled, which include CEOs and state premiers, tend to lead public opinion, which is why this poll is taken seriously. 92% of those questions expressed disappointment about the government. Three quarters believe the government is too weak to master the challenges ahead. 49% think that Merkel is weak chancellor, her worst rating since she became chancellor in 2005. Interesting are some of the reasons for the discontent. The elites want Merkel to step up the drive to austerity, and believe that the recently announced measures are insufficient. The only highlight was Merkel's handling of the Greek crisis, which was generally approved.

My emphasis.

Looks like a train wreck.

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Jun 17th, 2010 at 12:50:05 PM EST
[ Parent ]

Re: Barroso to plebes: (4.00 / 2)

Germany's elites have lost confidence in the Merkel government, and also in the chancellor personally.

She's toast.

Look for a propaganda campaign centered around Merkel not being Serious™ and lacking the ability to "Make the Hard Decision."

No one could have predicted

by ATinNM on Thu Jun 17th, 2010 at 12:56:18 PM EST
[ Parent ]

Re: Barroso to plebes: (4.00 / 2)

The only highlight was Merkel's handling of the Greek crisis, which was generally approved.

You've got to be kidding me.

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan

by Migeru (migeru at eurotrib dot com) on Thu Jun 17th, 2010 at 04:20:10 PM EST
[ Parent ]

Re: Barroso to plebes: (4.00 / 4)

Eurointelligence fails miserably.

Capital-Elite-Panel: Elite verzweifelt an Schwarz-Gelb - Capital
Das schwarz-gelbe Sparpaket fällt bei der Elite durch: 53 Prozent der Befragten glauben nicht, dass die Bundesregierung die gesetzlich verankerte Schuldenbremse einhalten wird. Die Entscheider wünschen sich ehrgeizigere Sparvorschläge. So sollen Steuervorteile bei Schicht- und Nachtarbeit gestrichen (86 Prozent), der ermäßigte Satz bei der Mehrwertsteuer abgeschafft (80 Prozent) und der Spitzensteuersatz angehoben werden (66 Prozent).		The black and yellow austerity package falls through with the elite: 53 percent of respondents do not believe that the federal government will comply with the statutory debt brake. The decision makers want more ambitious savings proposals. Tax breaks for shift and night work (86 percent) and the reduced rate of VAT (80 percent) should be abolished and the top tax rate should be raised (66 percent).
Zustimmung erhält die Bundesregierung lediglich für ihren Kurs in der Griechenland-Krise. Die große Mehrheit unterstützt die lange herausgezögerte Zustimmung zum 750-Milliarden-Euro-Rettungspaket für pleitegefährdete Euro-Staaten.		Only the federal government's position on the Greek crisis receives support. The vast majority supported the approval of the long delayed 750-billion-euro rescue package for € States in danger of default.

The question was about the package and not the handling. Also they notably call not for spending cuts but tax increases.

Wait this is important. Someone is wrong on the Internet.

by generic on Thu Jun 17th, 2010 at 05:19:43 PM EST
[ Parent ]

Re: Barroso to plebes: (4.00 / 3)

And not even particularly insane ones. Why should there be tax breaks on night work? And the high approval for eliminating reduced VAT rates may be partially based on the FDP hotel handout.

Wait this is important. Someone is wrong on the Internet.

by generic on Thu Jun 17th, 2010 at 05:29:37 PM EST
[ Parent ]

Re: Barroso to plebes: (4.00 / 3)

Thanks for the important detail.

by afew (afew(a in a circle)eurotrib_dot_com) on Fri Jun 18th, 2010 at 02:38:36 AM EST
[ Parent ]

Re: Barroso to plebes: (4.00 / 7)

Is there any explanation (scenario, paradigm) where these actions make sense from the german view if they were not lunatic?

In line with my conviction that Occam's razor cuts most often to mediocrity (if not lower), I believe the answer to this is entirely different than what JakeS describes: namely, provincialism.

Those not living here probably find it difficult to imagine just how prevalent the monetarist/Hooverian weltanschauung is in Germany, and how little discussion of any other concept of economics there is. Nor how how many generations this has had to become entrenched. It is not so much that they have drunk the Koolaid as they have never ever tasted water.

So they're not lunatics, they just don't know any better. "If all you have is a hammer, everything looks like a nail" is probably the key cognitive insight here.

Jesus died for somebody's sins but not mine - Patti Smith

by dvx (dvx.clt ät gmail dotcom) on Thu Jun 17th, 2010 at 09:12:43 AM EST
[ Parent ]

Re: Barroso to plebes: (4.00 / 3)

dvx:

It is not so much that they have drunk the Koolaid as they have never ever tasted water.

Sounds like... Idiocracy

Though Joe initially professes that he knows nothing of resolving these issues, when he discovers that the crops are watered with a Gatorade-like sports drink named "Brawndo", he finds himself knowledgeable enough to correct the problem.
The Idiocracy film narrator comments that "Brawndo has replaced water virtually every where" and that and Brawndo purchased the FDA and FCC. In response to plan to correct the problem, White House cabinet members continously repeated the Brawndo tag line, "Browndo's got what plants crave. It's got electrolytes."
After several failed attempts to explain to the cabinet members the importance of water in irrigation, Joe instead convinces them that he can talk to plants, and persuades the cabinet members to start irrigating the crops with water. Unbeknownst to Joe, half the country works for Brawndo and his decision to use water in the fields causes the company's stock to plummet, causing massive unemployment, apparently without improving the crop situation. The angry population riots, and Joe is sentenced to "Rehabilitation", a Running Man/Mad Max-style demolition derby featuring undefeated Rehabilitation Officer Beef Supreme (Andrew Wilson).
Meanwhile, Rita discovers that Joe's reintroduction of water to the soil has finally made vegetation sprout in the fields.

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan

by Migeru (migeru at eurotrib dot com) on Thu Jun 17th, 2010 at 09:38:13 AM EST
[ Parent ]

Re: Barroso to plebes: (none / 0)

that's the stupid option... they are nto insane by believing in one craxzy religion.. ti is jsut that they do not know another..

they are not nuts but stupid.. but I just can not believe taht anyone anywhere in germany knows the "Krugman stuff".. it is not possible... They rnecessarily ahve heard about it.. and necessarily know that it exist.. so it is insanity.

I also go with the evil (they want to be kings) or the other insane (they think this is the proper way to deal with their awfull banks)...But again I do not know.. maybe they are just insane and believe all the crap

A pleasure

A pleasure

I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude

by kcurie on Thu Jun 17th, 2010 at 10:57:28 AM EST
[ Parent ]

Re: Barroso to plebes: (4.00 / 6)

No, it's not insane, merely neurotic: an obsession with hard currency, which is a proximate (if not rational) response to Germany's history.

Jesus died for somebody's sins but not mine - Patti Smith

by dvx (dvx.clt ät gmail dotcom) on Thu Jun 17th, 2010 at 12:56:43 PM EST
[ Parent ]

Re: Barroso to plebes: (4.00 / 4)

kcurie:

all this has to do with the fact that the German banks lost much much more than reported

I don't know about losses, but here's Wolfgang Munchau:

Why this crisis will go all the way

at its core, it is not a sovereign debt crisis at all - but a highly interconnected banking crisis about to blow up. There is a dynamic at work that the macroeconomic data does not convey - and that the political response to the crisis does not address.
Those inter-connections are even bigger than we had previously thought - but it should not be suprising given the massive current account imbalances in the eurozone. In its latest Quarterly Review, the Bank for International Settlements came out with some shocking figures. German banks have a $200bn exposure to Spain, $175bn to Ireland, and $50bn, respectively, to Greece and Portugal, making a total exposure to the four countries of almost $500bn, more than 20% of German GDP. French banks have an exposure of $250bn to Spain, $80bn to Ireland, $100bn to Greece, and $50bn to Portugal, also almost $500bn in exposures, but more than 25% of French GDP. Total foreign bank exposures are well over $1100bn to Spain and $800bn to Ireland. Add the four countries together, and you are arrive at more than $2 trillion.
Now, I am not saying that there is $2 trillion of bad debt. I have no idea how big the portion of genuinely bad debt is. The problem is that no one else knows it either, and that includes the banks, which are now refusing to lend in the inter-banking market.

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Jun 17th, 2010 at 09:49:59 AM EST
[ Parent ]

Re: Barroso to plebes: (4.00 / 4)

afew:

In its latest Quarterly Review, the Bank for International Settlements came out with some shocking figures. German banks have a $200bn exposure to Spain, $175bn to Ireland, and $50bn, respectively, to Greece and Portugal, making a total exposure to the four countries of almost $500bn, more than 20% of German GDP. French banks have an exposure of $250bn to Spain, $80bn to Ireland, $100bn to Greece, and $50bn to Portugal, also almost $500bn in exposures, but more than 25% of French GDP. Total foreign bank exposures are well over $1100bn to Spain and $800bn to Ireland. Add the four countries together, and you are arrive at more than $2 trillion.

The Bank of International Settlements published a 68-page report in which half a page is occupied by these statistics. The exposure to other OECD countries is nowhere to be found. Germany has larger aggregate debt than Spain and higher public debt-to-gdp ratio - who's exposed to that? BIS isn't telling.

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan

by Migeru (migeru at eurotrib dot com) on Thu Jun 17th, 2010 at 09:54:32 AM EST
[ Parent ]

Re: Barroso to plebes: (4.00 / 3)

"Ce qui vient au monde pour ne rien troubler ne mérite ni égards ni patience." René Char

by Melanchthon on Thu Jun 17th, 2010 at 01:46:06 PM EST
[ Parent ]

Re: Barroso to plebes: (none / 0)

lol

Diversity is the key to economic and political evolution.

by Cat on Thu Jun 17th, 2010 at 02:28:27 PM EST
[ Parent ]

Re: Barroso to plebes: (none / 1)

You will notice Italy was not one of the 4 "PIGS" that the BIS published exposures on. It is also the only one PIIGS that Deutsche Bank has admitted to still having any direct exposure to. Narrative war...

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan

by Migeru (migeru at eurotrib dot com) on Thu Jun 17th, 2010 at 03:48:17 PM EST
[ Parent ]

Re: Barroso to plebes: (none / 1)

Now I know why Lenihan guaranteed not just Irish bank depositors, but ALL bondholders in Irish banks - including subordinated bond holders who were paid a premium to take on risk. Not so much the hidden hand of the market, but the hidden hand of EU banks?

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot dotty communists) on Thu Jun 17th, 2010 at 10:13:18 AM EST
[ Parent ]

Re: Barroso to plebes: (4.00 / 4)

Almost certainly, yes.

One of the stories of Roskilde Bank that didn't get much play at the time was that the bailout didn't bail out the depositors, and it didn't bail out the Danish banks.

It bailed out DeutcheBank and a couple of Dutch banks, who had been funding Roskilde Bank.

And the Danish financial sector unanimously pressed for the bailout, partly, of course, out of class loyalty, but mostly because they were afraid that DeutcheBank would take it personally and retaliate if they didn't.

- Jake

"Terraforming your own planet to make it uninhabitable hardly counts as epic win." - ThatBritGuy

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Jun 17th, 2010 at 10:49:46 AM EST
[ Parent ]

Re: Barroso to plebes: (4.00 / 7)

It's beginning to sound like Deutsche Bank is Europe's vampire squid.

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan

by Migeru (migeru at eurotrib dot com) on Thu Jun 17th, 2010 at 10:55:13 AM EST
[ Parent ]

Re: Barroso to plebes: (4.00 / 2)

That has been clear for a long time.

Modern conservatives engage in one of man's oldest exercises in moral philosophy: the search for a superior moral justification for selfishness.Galbraith

by ChrisCook (cojockathotmaildotcom) on Thu Jun 17th, 2010 at 03:04:15 PM EST
[ Parent ]

Re: Barroso to plebes: (none / 0)

have you hear about the recent attack against DB from the spanish quarters.. it is really amazing.

with a little bit of luck we can get rif of it..and Merkel with it.

A pleasure

I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude

by kcurie on Thu Jun 17th, 2010 at 12:27:18 PM EST
[ Parent ]

Re: Barroso to plebes: (4.00 / 3)

afew:

Now, I am not saying that there is $2 trillion of bad debt. I have no idea how big the portion of genuinely bad debt is. The problem is that no one else knows it either, and that includes the banks, which are now refusing to lend in the inter-banking market.

No, not now. The liquidity crunch started 3 years ago and has never gone away.

However, its severity has oscillated. It was really bad in August 2007, leading to the failure of Northern Rock. It was bad again in the summer of 2008, leading to the Lehman Brothers failure, Iceland's collapse, TARP and the G20. 2009 was the year of business as usual, and now this article claims there's been a serious draught for two months already... So, is another September failure to be expected?

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan

by Migeru (migeru at eurotrib dot com) on Fri Jun 18th, 2010 at 03:55:38 AM EST
[ Parent ]

Ricardian nonsense... (4.00 / 4)

kcurie:

And more importantly .. could someone explain me in what sense the german banks could benefit from the austerity measures from a rational point of view (I guess for the crazy nuts, less public debt means more money for the private sector, but they are nuts and believe those Ricardian nonsense)?

Poor Ricardo...

Ricardian equivalence - Wikipedia, the free encyclopedia

David Ricardo was the first to propose this possibility, though he was unconvinced of it.^[2] Antonio De Viti De Marco elaborated on Ricardian equivalence starting in the 1890s.^[3] Robert J. Barro took the question up independently in the 1970s, in an attempt to give the proposition a firm theoretical foundation.^[4]^[5] The proposition remains controversial.^[6]^[7]^[8]

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan

by Migeru (migeru at eurotrib dot com) on Fri Jun 18th, 2010 at 03:46:34 AM EST
[ Parent ]

Re: Ricardian nonsense... (4.00 / 4)

It's funny how modern economists obsess over things the ancients said, even though

they haven't read Smith, Ricardo et al in original.
the ancients weren't really sure themselves over these things.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid (arvid.hallen at gmail.com) on Fri Jun 18th, 2010 at 07:12:07 AM EST
[ Parent ]

Re: Ricardian nonsense... (4.00 / 4)

Sounds a lot like folk Theology.

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan

by Migeru (migeru at eurotrib dot com) on Fri Jun 18th, 2010 at 07:14:27 AM EST
[ Parent ]

Re: Barroso to plebes: nice indebted democracy you (4.00 / 7)

It certainly doesn't help that, instead of the sort of "we need to help each other out" spirit that existed to whatever extent in the second half of the 20th century, we're now seeing a "we're in it for ourselves, and if we can benefit at your expense, we'll do it" approach to European relations on the part of key players like Germany.

There's a lot of academic research suggesting an underlying factor in the catastrophe that was the Second World War was colonial powers starting to treat each other like colonies - bringing into Europe the brutal and exploitative practices learned and perfected outside Europe and turning it on each other in the search for economic and political dominance.

One can now see a very similar process repeating itself. This time it's not European colonialism, but the neoliberalism that was used to great effect on Asia, Africa, and the Americas by the Western powers is now being brought home, having been tested and perfected, by governments and elites eager to use that neoliberalism on their own population, and on other European states.

We can certainly hope this time it will end without the kind of horrors of the 1940s repeating themselves.

And the world will live as one

by Montereyan (robert at calitics dot com) on Thu Jun 17th, 2010 at 01:18:49 PM EST

Re: Barroso to plebes: nice indebted democracy you (none / 1)

Robert,
Could you come up with a few links to some of that writing or research? Sounds really interesting.

Grabbing what you can, as John Ruskin said, isn't any less wicked when you grab it with the power of your brains than with the power of your fists.

by geezer in Paris (risico at wanadoo(flypoop)fr) on Fri Jun 18th, 2010 at 01:29:28 AM EST
[ Parent ]

Re: Barroso to plebes: nice indebted democracy you (4.00 / 5)

You know, I don't think it's Merkel's desire to resort to such beggar-thy-neighbor policies, as much as it's an illustration of the dominance of Deutchbank over the political players and policy mechanisms.
All over the world heads of state are running pell-mell into the Obama dilemma-
Finding that the space in which they are permitted to act is a lot smaller than they thought.

Grabbing what you can, as John Ruskin said, isn't any less wicked when you grab it with the power of your brains than with the power of your fists.

by geezer in Paris (risico at wanadoo(flypoop)fr) on Fri Jun 18th, 2010 at 01:36:18 AM EST
[ Parent ]

Re: Barroso to plebes: nice indebted democracy you (none / 1)

"Finding that the space in which they are permitted to act is a lot smaller than they thought."

The only thing limiting political actors are their own neo-classical mind-blocks. There are plenty of things which can be done by clear-headed hard-nosed politicians.

Like demanding rights issues instead of bailouts. As I've said previously, rights issues aren't strange things, they are just dividends in reverse. They are the SOP while bailouts are the extraordinary exceptions. Damn, we've had four rights issues in our big banks here in Sweden just during this crisis, of which I partook in one.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid (arvid.hallen at gmail.com) on Fri Jun 18th, 2010 at 07:16:29 AM EST
[ Parent ]

Re: Barroso to plebes: nice indebted democracy you (4.00 / 7)

European Tribune - Incompetent fuckwit ideologues! (a rant)

I am getting rather angry at this. Of course they will nationalise Northern Rock, eventually, but it should have been done immediately. The government and the press are so full of neoliberal propaganda that it is news that the government will finally capitulate to facts and do its job.
...
So, yes, I'm pissed off at these 4 months of hand-wringing over whether to nationalise or not. Incompetent fuckwit ideologues!

Basically, the story of the last 3 years is the attempt by the politicians to do their utmost to reward the Masters of The Universe for fucking up.

An important part of that was the wholesale conversion of private liabilities into public debt, without compensation ("right issues", for instance). And how do the Masters of the Universe repay the favour now? By pointing out that the public debt has become unsustainable!

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan

by Migeru (migeru at eurotrib dot com) on Fri Jun 18th, 2010 at 07:27:33 AM EST
[ Parent ]

Re: Barroso to plebes: nice indebted democracy you (4.00 / 4)

Migeru:

By pointing out that the public debt has become unsustainable!

Not just that.

Having driven down private sector wages and pensions (for all but management) the narrative is now that the public sector must 'share the pain'.....

....you couldn't make it up.

Modern conservatives engage in one of man's oldest exercises in moral philosophy: the search for a superior moral justification for selfishness.Galbraith

by ChrisCook (cojockathotmaildotcom) on Sat Jun 19th, 2010 at 07:31:08 PM EST
[ Parent ]

Re: Barroso to plebes: nice indebted democracy you (4.00 / 3)

Sorry, but the facts don't support any assumption of freedom of action. Quite the contrary.
Good recent example: DADT. Pres makes the announcement of a minor policy change- one that has essentially no effect on any matter of major import, other than one which should have been an easy moral victory for him, and within 48 hours, our fearless leader gets publicly- almost contemptuously- slapped down.
There are a dozen similar stories in recent US history, and the trend goes a long, long way back.

There is a powerful story of a radical reduction in the power of the nation-state to influence events-even minor ones. And it's not only the US that's a victim of corporate capture.

"Rights issues" are a good example.
No amount of pressure, jawboning, even ridicule could cause the federal investment in the US financial sector to be structured IN ANY WAY that might transfer control, or even major influence over the entities being recapitalized (herein referred to as "Bailees") to the central government /taxpayer/public (The Bailors). Not even voting rights.
Who owns AIG?
-the taxpayers.
Who runs AIG? A few changes, but essentially the same assholes who ruined it.
Who thought this setup was a good idea? No one but the guys who got all the marbles. Not even their legislative stooges could make a coherent case for such an arrangement.
I'm deeply envious of anyone who lives in a world where smart men of good will-"clear-headed, hard nosed", have the latitude to grab the levers of power and move them.
But it sure aint mine.

Grabbing what you can, as John Ruskin said, isn't any less wicked when you grab it with the power of your brains than with the power of your fists.

by geezer in Paris (risico at wanadoo(flypoop)fr) on Sun Jun 20th, 2010 at 01:00:57 AM EST
[ Parent ]

Re: Barroso to plebes: nice indebted democracy you (none / 1)

and within 48 hours, our fearless leader gets publicly- almost contemptuously- slapped down.
Cramer or some other talking head screams at him. Boo hoo. So the idea is dropped. What kind of leadership is that? Full flank ahead and damn the torpedoes!

"There is a powerful story of a radical reduction in the power of the nation-state to influence events-even minor ones. And it's not only the US that's a victim of corporate capture.

Sure it could. The only thing needed is a president who actually cares about his country instead of his own personal power.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid (arvid.hallen at gmail.com) on Sun Jun 20th, 2010 at 03:46:21 PM EST
[ Parent ]

Barroso to plebes: nice indebted democracy you have there... | 68 comments (68 topical, 0 editorial, 0 hidden)

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