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Sol Sanders | Follow the money No. 91 | The ABCs of the Euro crisis
Latest from Uncle Sol. A version of this column is scheduled for publication Monday, November 7, 2011, in The Washington Times -- Chris
Follow the money No. 91 | The ABCs of the Euro crisis
Sol Sanders <solsanders@cox.net>
The kaleidoscope of events and mock-events is moving so rapidly in the European crisis, even a dedicated netizen following events finds himself bemused.
It might be good to look at a little history:
The European effort to unify – after two bloody civil wars of near annihilation and the post-World War II threat of Soviet Communism – began with economic integration. Political unity, given the long history of European national, racial and ethnic conflicts, its mainly original French and German sponsors thought, would eventually fall into place were economic coordination achieved. Somewhere down the line, again it was assumed by the idealistic if elitist thinkers, a united Europe would achieve something like North American unity.
A step-by-step customs union followed the 1951 relatively primitive six-nation European Iron and Steel Community, the initial European Union amalgamation seed. That body reorganized the then most important industry in the face of diminishing domestic raw materials and need for revised marketing. But when the visionaries – often slowed down by parochial interests – in 1995 finally got to monetary union, they jumped a cog. For the relatively easy creation of a common currency and a central bank did not insure – nor was it more than theoretically acknowledged – amalgamating national economic policies, and perhaps more important, their bureaucracies. In fact, of course, some of the strongest economies such as Britain and Scandinavia’s opted out with reliance on the vaunted deutschemark’s incorporation as its bedrock. To do otherwise would have required commonality that did not exist even among the most advanced economies, much less their less developed members at almost “third world” economic levels.
It was inevitable when [not if], a major new economic crisis hit the world economy, the Euro would be imperiled. For it was being used by participating governments for their own individual economic strategies rather than any common development. German Chancellor Angela Merkel may now well say the Euro’s preservation is the issue, not Greece’s more parochial interests, But that, too, is 20-20 hindsight. It derives from the major EU members [again excluding Britain and Scandinavia] making another mistake: their inability to solve the Euro crisis quickly has made it a talisman for the continued successful pursuit of European unity.
In fact, the southern Europeans pretended their Euro was a truthful representation of their productivity. They could, therefore, use its perceived unlimited resources to fund a standard of living which their productive capacity did not, in fact, support. Outrageous “benefits” – retirement age in Greece at 50 – were accorded a population only a generation away from the horrors and privations of World War II and the worldwide “Great Depression” which helped produce it. Increasingly, cities like Barcelona and Athens took on la dulce vida they could not really afford with their artificial Euro.
Crunch-time revealed a stark dilemma: northern European taxpayers with their higher productivity must rescue their southern European spendthrift compatriots, or southern Europeans face slashing their living standards to levels not seen for a generation. The German taxpayers, their French fellowtravelers, as well as minor players, Dutch, Austrians, Finns, Estonians, Czechs, are yelling foul. Furthermore, there is danger such cutbacks may reach the bone, destroying these poorer economies’ ability to restart the longer process of achieving higher productivity and the just rewards of higher living standards. [This is a fundamental problem of continental economies with backward areas, not unknown even in the U.S. with its vast homogenization. One element in the present American economic debate: how far does federal taxpayers’ largesse extend to Mississippi and Arkansas?]
What’s at risk, of course, is the whole concept of post-World War II universal European representative government after the fall of Communism. There was applause in obscure corners for Greek Prime Minister George Papandreou’s threat to take the issue of Greek “suffering” to the people for a referendum rather than impose it even from an elected government. Good try! But perhaps to the long term detriment of true European democracy, North European leaders’ threats and Greek politicos’ own maneuvering will again permit a papering over. The risk is grave, of course, mandated “solutions” – the curse of Brussels for a generation now – may run into bedrock popular resistance, even civil unrest.
Can the center hold in perpetuity as it could not in the 1930s? may be the question of the hour.
sws-11-03-11
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It must be Sunday... nice article. Unbelievable comments...
Hopeless.
Greece needs to return to military dictatorship which is probably inevitable anyway. All democracies eventually succumb to dictatorship which is the only remedy for profligacy and parasitism.
“””after two bloody civil wars of near annihilation”””
For a little History--- WW1 and WW2 were named for World War 1 and World War 2. This was not civil war or revolution war----World wide War.
asia and africa were not involved in ww1. the war in africa in ww2 was about euro colonialism and japan made a huge mistake. for getting involved. the usa only got involved in both wars because the bankers coaxed their involvment. otherwise ww2 was the final settlement of 100s of years of euro dysfunction. so, yes, civil war.
Don't forget Solyndra:
"Senior executives at Solyndra collected hefty bonuses -- ranging from $37,000 to $60,000 apiece -- as the Fremont company bled cash and careened toward bankruptcy this summer.
Bankruptcy documents filed in Delaware earlier this week reveal that more than a dozen senior executives at the defunct solar manufacturing company were awarded sizable quarterly bonuses April 15 and again July 8. Solyndra ceased operations in late August and filed for bankruptcy Sept. 6. About 1,100 employees were laid off without severance pay.
The bonuses, awarded to more than a dozen executives, came on top of what were already highly competitive salaries. Karen Alter, Solyndra's vice president of marketing, had an annual base salary of $275,000; she was awarded a $55,000 bonus in April and again in July. Ben Bierman, Solyndra's executive vice president of operations and engineering, had an annual base salary of $300,000; he was awarded $60,000 in April and again in July. Will Stover, the company's chief financial officer, was also awarded a $60,000 bonus in April and again in July."
http://www.theatlantic.com/megan-mcardle/
This post is a scintillating display of the obvious.
thanks chris
nice read :-))
ooooo. wow. quite the in depth history lesson. i say "let's talk Turkey." Once the euro gets a massive haircut...does a still undervalued Turkish lira mean Germany get it's ass kicked? I say yes. Discuss:
After repeated failures, Europe seems to be in denial about there being too many cooks in the kitchen. They end up trying to make a souffle from a meatloaf recipe. They can go on trying to herd cats and push a string around town, but they can't defeat the basic nature of the currency. This is what happens when political value does not translate into intrinsic value. Someone gets told that their "money" is no good.
http://georgesblogforum.wordpress.com/2011/11/02/the-daily-climb-2/
Yeah Huh?!!
Quite a bit of drivel there R.C. Whelan.
Take, "The European effort to unify ...began with economic integration.."
Not a single private company in Europe for the last 40 years would recognise what that term meant let alone what they had to do to "integrate". Eurogoons have been 'waffling grandiose' for decades but nobody in the private sector has given a crap what these twats are on about.
What "integration" actually represents is a political nothing (total nonsense). Taking the economies name in vain so a bunch of arsewipes behind Govt desks could windbag like they were important to anything.
The entire Euro Project has been one long list of socialist delusion and idealism. A hed-fuk to anybody stupid enough to listen to the retards of society who have impacted nobodies lives socially or economically except to dump 3,000 turds (laws and regulations) on them
And it is not the private sector that is imploding, except those commercial crones dependent on crooked Govt largesse. It is the public sector that is imploding (running out of other peoples money to spend) and dragging down their sponsors, the bankers.
We don't need to tab this bankruptcy with anything like 'Euro'. Because this double-team of politicos and bwankers have been ruining whole countries right across the globe for Centuries. Many countries, like Germany, Argentina and America, have been down the sewer 3 times each with the Govt-Banking double-act
It is about time the history of this most destructive double-act was taught in schools and Universities. It is a mark of their power to corrupt that this real history is not, but instead omitted from the history books
Your article Mr Whelan once again misses the obvious staring you in the face for a wet rag (or is it whitewash?) of what has just happened yet again. Govt and Banking ruining whole countries when their credit (debt) bubbles implode in their stupid dumb faces.
Are you still wearing blinkers Mr Whelan?
I think he meant to say that they got nigga rich living on the German tit, and now, they don't want to get off, but mother Germany is trying to wean them ( the parasitic southerners with their northern lifestyle).
Coming to AAmerica soon. Tyrone gone have to go bac to skoo so he can get his eatin on at free lunch line at all gubmint skoos.
No wut ime sain?
Hector go back to field to hoe. Give back job at mickdonnas , no mas you want fries with that gringo?
If I'm reading this correctly, I completely understand wut yur sa'in dawg. Nigga rich is actually a great way to describe the situation in Greece, (and in the U.S. with people living off their artificially inflated home equity) They have the appearance of wealth, but it is illusory
Huh?
Huh? to the power of 10. lost me with the nonsense about two cival wars???? does anybody know history?????? WTF
In other werdz, is someone/anyone in Europe gonna grow a pair and throw out the moochers?