Wednesday, April 25, 2012

Are the austerians finally losing?

When my Finnish friend was here last summer, we got into a small debate whether or not the zeitgeist could be "changed."  He argued (probably correctly from a purely educated perspective) that because the zeitgeist is by definition a collective mood outside ourselves, we could not control it.  That's what made it the zeitgeist, after all.

"Bullshit," I argued, "the zeitgeist is the product of whose marketing campaign is working best.  Remember the 60s?  So do I.  And so much of what we thought of as the 'energy' was simply the byproduct of hucksters selling records and blue jeans.  How much of our desire to look at Scandinavia as a model came from watching Bergman movies and how much came from Volvo ads?  You CAN change the zeitgeist—it just takes money and skills and some really good reasons for wanting to do so.

Well, this last weekend, I felt the zeitgeist shift.  This has been building up for a long time.  The rule by the thieving moneychangers has been hated since forever but the opposition has been incoherent and marginalized—Seattle 1999, etc.  My personal experience was to write a book that just vanished into the triumph of neoliberalism.  My views on economics—even though utterly mainstream as late as 1972—had become so marginalized that I wasn't even worthy of being officially ignored.

Of course, the main problem was how to confront the richest opposition in history.  Storming the barricades did nothing except fund more police repression.  Political organizing did nothing, at least in USA, because the same guys with the same ideas that triggered the disasters of 2008 got high-level jobs in the Obama administration.  And so on.

And so I applaud any political movement that is willing to confront the naked evil that is neoliberalism.  Yes I know this crowd includes gay Muslim-bashers, but considering what they are up against, I believe it a sign of political maturity that they can set aside these secondary issues and confront the problem of criminals running the banking system.  So here's to Geert Wilders for bringing down the Dutch government.  (And the French.  And the Czechs.  And all the rest of us before this is over.)  We will know the zeitgeist has officially changed when the Guardian hires a decent Institutionalist to explain the return of the economy to the control of honest people with vision.

Going Dutch: The Netherlands to abandon the euro?

25 April, 2012

The Dutch government has collapsed after failing to win coalition support for its austerity plans. Elections are set to be held in September and analysts say one of the EU’s strongest economies may bring the unified currency’s demise

Prime Minister Mark Rutte, a strong advocate of the Euro, has been trying to get the Parliament to adopt 14-16 billion euros worth of austerity cuts. The deficit slashing is aimed at getting the Dutch budget deficit under the three per cent of deficit to GDP limit established by the new EU fiscal pact.

Rutte was unable to win the support of the far-right Freedom Party, whose leader Geert Wilders said his country should not fund the new European Stability Mechanism and, at the same time, be expected to implement Brussels’ budget deficit caps.

“We don't want to cut spending by 14 billion euros and at the same time transfer billions of euros to Brussels for the horrible ESM emergency fund and the weak Greeks,” Wilders noted.

At the same time, the Dutch government’s austerity measures came under criticism from the leftist opposition Labor Party. Its leader Diederik Samsom admitted that the three per cent deficit limit existed, but stressed that the Netherlands did not have to comply “if there are exceptional circumstances in the economy.”

After failing to obtain the necessary support from coalition partners, Rutte, who is the leader of the center-right People’s Party for Freedom and Democracy, tendered his resignation and said new elections were likely to be held in September, after the summer break. The now-acting premier is still hoping to obtain the support of minor opposition parties to pass his legislation.

Journalist Neil Clark believes the Dutch are largely angered with the fact with the EU fiscal pact that imposes deficit limits on its signatories.

“The people have had enough of austerity,” Clark told RT “Holland’s GDP growth in the ten years since it’s had the Euro has just been 1.5 per cent. And they’re now being told that because of this absolutely insane fiscal pact that was agreed upon last year. It will destroy the good life that the Dutch people have been used to over the years. And unsurprisingly the Dutch are saying, it’s enough.”

He also said leaving the Euro was now a possibility for the Netherlands.
“I think if Holland were to leave the Euro, and that’s not such a far-fetched idea now, as it might have appeared a few years ago, then it really is game over. Because Holland has been a strong ally of Germany in the drive towards the Euro and I think it would be an enormous blow.” more
Yes, soon even the Germans will have to stop defending the austerians.

Call for Growth to Counter German Push for Austerity

By NICHOLAS KULISH  April 23, 2012

BERLIN — With political allies weakened or ousted, Chancellor Angela Merkel’s seat at the head of the European table has become much less comfortable, as a reckoning with Germany’s insistence on lock-step austerity appears to have begun.

“The formula is not working, and everyone is now talking about whether austerity is the only solution,” said Jordi Vaquer i Fanés, a political scientist and director of the Barcelona Center for International Affairs in Spain. “Does this mean that Merkel has lost completely? No. But it does mean that the very nature of the debate about the euro-zone crisis is changing.”

A German-inspired austerity regimen agreed to just last month as the long-term solution to Europe’s sovereign debt crisis has come under increasing strain from the growing pressures of slowing economies, gyrating financial markets and a series of electoral setbacks.

Spain officially slipped back intorecession for the second time in three years on Monday, after following the German remedy of deep retrenchment in public outlays, joining Italy, Belgium, the Netherlands and the Czech Republic. In the Netherlands, Prime Minister Mark Rutte handed his resignation to Queen Beatrix on Monday after his government failed to pass new austerity measures over the weekend.

The political upheaval drove stock markets on the Continent sharply lower, with Germany’s DAX index finishing the day down 3.4 percent. The sell-off in Europe dragged American indexes down around 1 percent. A survey of European purchasing managers showed an unexpected plunge in confidence this month.

The Netherlands, a staunch supporter of the German position, became the latest European country forced into early elections by the European crisis, just one day after the first round of presidential voting in France raised the possibility that the incumbent, Nicolas Sarkozy, would be unseated by his Socialist challenger, François Hollande, in a runoff election. more
And from the UK—where proper people with expensive educations could all agree that neoliberalism was a good thing, no matter what party they backed.  Ah the wonders of New Labor, and their designated spokesdorks at the Guardian.

Europe's elites feel the backlash

A crisis of legitimacy looms as Europe's voters rebel against deficit-cutting diktats delivered in the name of the eurozone
Ian Traynor, Europe editor, 23 April 2012

For over two years, the mainstream political elites of Europe have been battling to save the single currency, seeking its salvation in a German-scripted programme of austerity and legally enshrined fiscal rigour that curbs the budgetary sovereignty of elected governments.

In elections in France on Sunday, in the Royal Palace in The Hague on Monday, and on Wenceslas Square in Prague on Saturday, a democratic backlash appeared to be gathering critical mass as the economic prescriptions of the governing class collided with the street and the ballot box. The collision looks likely to bring down three European governments.

Mark Rutte, the centre-right Dutch prime minister, threw in the towel on Monday, submitting his resignation to Queen Beatrix after seven weeks of fruitless haggling over colossal spending cuts, which are required to comply with new European rules he has done much to design.

After the biggest popular protests in Prague since the velvet revolution brought down communism, the rightwing government of Petr Necas, close allies of David Cameron, teetered on the brink, because of unpopular spending cuts as well as sleaze.

Most crucially of all, the Sarkozy era in France looked to be over, having dazzled briefly and faded fast.

"There's a new uncertainty," said Paul De Grauwe, a leading Belgian economist. "Now we will have to see what will happen with the fiscal pact, and how the markets react."

The French delivered a loud non to Berlin's euro policies, handing a first-round victory to the socialist François Hollande, whose central campaign pledge was to reopen Chancellor Angela Merkel's eurozone fiscal pact, an international treaty signed by 25 EU leaders and currently being ratified. Almost one in five French also voted for the europhobic Front National of Marine Le Pen, who wants the single currency scrapped and the French franc restored.

In the Netherlands, Geert Wilders, who also wants a referendum on the euro, felled the Rutte government by refusing to back up to €15bn (£12.2bn) in savings to keep the country within the currency bloc's new rules. more
Just to remind everyone how much has been invested in the neoliberal zeitgeist, be sure to read the bolded sentences below.
French Elections: Cracks in the Neoliberal Consensus

Disillusion With the Euro and Europe



A few observations:

Every candidate except Sarkozy, the self-styled centrist Bayrou and the Green candidate Eva Joly singled out the world of finance as the main adversary. Hollande did so quite explicitly in his main campaign speech, although shortly afterwards he watered his wine considerably during a visit to London, the City oblige. This hostility toward banks has horrified Anglo-American commentators, from The Economist to John Vinocur of the International Herald Tribune, for whom realism consists in docile obedience to the demands of “the markets”. Acting uppity toward finance capital is close to insanity. If “the right” is defined first of all by subservience to finance capital, then aside from Sarkozy, Bayrou and perhaps Joly, all the other candidates were basically on the left. And all of them except Sarkozy would be considered far to the left of any leading politician in the United States.

This applies notably to Marine Le Pen, whose social program was designed to win working class and youth votes. Her “far right” label is due primarily to her criticism of Muslim practices in France and demands to reduce immigration quotas, but her position on these issues would be considered moderate in the Netherlands or in much of the United States. Even she stressed that the immigration problem, as she saw it, was not the fault of the immigrants themselves but of the politicians and the elite who brought them here. The main tone of her political message was resolutely populist, attacking the “Paris elite”. Demagogic, yes, often vague and playing fast and loose with statistics, but a model of reason compared to the utterances of the “Tea Party”. Her political challenge was to hold onto her father’s ultra-conservative constituency while wooing discontented low income voters. She apparently won more working class votes than Mélenchon.

Mélenchon left the Socialist party to found the Left Party in 2008. As candidate for the broader Left Front, he has raised the spirits of the demoralized French Communist Party, which fell below 2% in the 2007 election and gave up running a candidate of its own. Its militants have responded enthusiastically to Mélenchon’s revival of red flags and fiery rhetoric. He would put lower and upper limits on wages and salaries. His program, including calls for constitutional revision that would guarantee such progressive measures as gay marriage, assisted suicide and the right to abortion, surely goes far beyond the demands of his constituency, more concerned with jobs and wages, and reflects his personal adherence to the progressive philosophy of French Free Masonry. It is certainly his quick witted debating skill that appeals to voters more than the details of his ambitious program.

Disillusion with the euro and Europe

The two leading candidates remain faithful to the dogma of “European construction”. But elsewhere splits are beginning to show. Marine Le Pen condemns the euro as a failure which had wrecked European economies and is doomed to disappear. more


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