Sun May 10th, 2020 at 03:24:27 PM EST
The Plan Is to Save Capital and Let the People Die Common Dreams
Whether Americans know it or not, their government is not working for them. Their government is working on behalf of capital. Humans are now a mere second-order, instrumental factor to be considered based on how it affects capital.
This is particularly tragic considering that, for countries with their own fiat currency such as the USA and the UK, capital can be created at will by the treasury/central bank of that country. Granted the USA has more leeway in this regard due to the weight of its currency in the international market. But the government of such a country can always purchase any good or service that is produced in their country without inflationary effect provided such purchases do not produce shortages of resources.
Frontpaged - Frank Schnittger
In both the USA and the UK this highlights the folly of having 'off-shored' so much of their manufacturing, as that factor decreases the latitude of the available response. In both countries the financial sectors have effectively devoured much of the former productive capacity of the country as part of a scheme to funnel ever more of the nations' productivity into their hands. A move to rebalance these economies is in order, especially for basics such as health care supplies.
Of course a major motive for the shift to 'off-shore' manufacturing was to confound the ability of nation states to tax and control trans-national corporations. It was for these reasons that 'captains of industry' invested so heavily in the political processes. Through purchase or rent of the apparatus of national government they get laws favorable to their interests, regardless of how deleterious the effects of those changes are on the domestic population.
The other factor at play in this dilemma is the fact that competing capitalists keep score in terms of the national currencies. Their goals are to acquire as much wealth as the can, but that wealth is denominated in national currencies. So, while intellectually they might understand that governments can and do create money at will, emotionally, they cannot help but see government spending on anything other than benefits to them as pernicious.
These factors come into sharp focus when the conflict comes down to saving lives at the expense of perceived dilution of the value of money. Better to be king of a shitpile than an equal in a paradise.
The situation in the EU, especially the Euro-Zone is more complicated because of the shared currency of the Euro. But the same ability to create money through the ECB is still there. There just has to be agreement on how that money is created and spent in the various countries.
At present there is an impasse. Germany has considered that, as the price for it having joined the Euro-Zone and exchanging its strong currency, the Deutchmark, for the Euro, they should get the ability to always separate 'their' money from the money belonging to other countries. Not all Germans hold this belief, but the Government of Germany has acted upon and reinforced such assumptions since reunification.
It is now politically perilous for a German national politician to criticize this view. As economies have stagnated since the Global Financial Crisis this has contributed to strains in Germany leading to the rise of extremist right wing parties. Drought, war and the flood of refugees from Syria and elsewhere has only further compounded the problem.
By allowing this arrangement to continue the rest of the EuroZone has, effectively, subsumed their own economic welfare to that of Germany and Germany has had a de facto veto on monetary policy in the Euro-Zone.
That arrangement has now come down again to the question of saving lives vs. maintaining the 'economic discipline' demanded by Germany. Again because the first dramatic illustration of this conflict was Greece. Then Germany was able to pass off the problem as 'lazy southerners'.
Now, with great loss of life in Italy, Spain and France coupled with great loss of economic activity due to the pandemic the conflict emerges more starkly. Unfortunately this seems to coincide with a leadership vacuum in Germany with the impending retirement of Chancellor Angela Merkel.
This is critical at this point as to get through the next year or two of reduced economic activity due to the corona virus a great deal of Central Bank support will be required to prevent major long term economic damage. This could be provided in trillions of Euros by the European Central Bank, but Germany objects.