Macron v. Schaueble?

Needless to say, those of us who are not fascists were quite relieved by Emmanuel Macron's substantial victory over Marine LePen in the French election.  It is understandable that many on the French left were uncomfortable supporting a banker/financier, but despite the refusal of Jean-Luc Mélanchon to endorse his centrist rival, most progressives managed to overcome their misgivings.

One voice of the left who is quite positive about Macron is Yanis Varoufakis.  You may remember Varofakis as the Greek envoy to the EU for bailout talks a couple of years ago.  He resigned as finance minister to Prime Minister Alexis Tsipras when Tsipras caved in to German demands that Greece accept yet another round of austerity in return for loan "renegotiation" — in essence, accepting who knows how many more years (still counting) of Greek suffering for the sake of staying in the Eurozone.

The architect of European austerity was German finance minister Wolfgang Schaueble.  Austerity measures have provided moralistic gratification to northern European Protestants raised on the fable of the grasshopper and the ant; but, more importantly, they make it possible for German and Dutch banks to avoid writing off a lot of bad loans to southern Europe.  When Varofakis opposed more austerity, he had an important ally: Emmanuel Macron.  Macron resigned from François Hollande's government at about the same time Varofakis resigned from Tsipras's.

Only aggressively stimulative economic action will do anything to alleviate double-digit southern European unemployment, and Italy and Spain have suffered under austerity almost as badly as Greece.  Perhaps Macron will shift the balance of power in the EU away from Germany; perhaps the French will accept some softening of their ironclad job protections in exchange for a great many more job opportunities.  Upcoming contests for seats in the French Parliament are likely to determine just how much or how little Macron can accomplish.

Next?

Those who think a little disruption can be a good thing — or a lot of it, for that matter — now have an opportunity to test their hypothesis.  The most notable outcome of the Brexit vote so far is the disruption of British politics.  Both the Conservatives and Labour are split, and the British are not especially enthusiastic about either party.

In response, ECB President Mario Draghi is suggesting that the time has come to move away from the austerity policies that have crippled Europe since the financial crisis and emphasize growth.  Draghi knows that what underlies working class discontent across Europe is not immigration.

European workers have suffered with wages that buy less every year, along with the erosion of the social programs that make limited incomes acceptable.  In the UK, unemployment is low, but wages have been stagnant or slipping.  In southern Europe, any work at all is very hard to find.  The problem has been austerity.

It is in the interests of banks, private equity and sovereign wealth funds, and other global capitalists to continue austerity, cutting government services to free up money that will be used to pay back risky loans.  It is in the interests of everybody else to renegotiate that debt and restore public services, shifting wealth from those who have accumulated entirely too much to those they robbed.

That will not be done by the current crop of disruptors — Farange, Johnson, LePen, Orban, Tr*mp, et al. — but sadly will not be done by the ruling Establishment either.  Mario Draghi offers some hope, and with backing from Christine Lagarde, Mark Carney, Janet Yellen, and others whose financial power does not depend on private capital, it is conceivable that something positive yet may be done.

The Future of US Foreign Policy

In brief, prospects for ongoing US foreign policy are not encouraging.  The Donald's ineptitude is such that he is certain to defer to "the best generals" in matters of war and peace, and Hillary's stance in the 2008 primaries and as Secretary of State suggest that she will continue her ongoing attempts to prove she has enough "balls" to be "one of the boys."  Bernie Sanders will probably have significant impact on the Democratic platform, but the relationship between a party's platform and what happens when that party wins an election has little if any bearing on what its candidate does when elected to office.

The "War on Terror"
Tr*mp vacillates between isolationism and carpet bombing (along with use of torture and killing the families of terrorists), but his commitment to building the size and strength of the military makes one wonder if "boots on the ground" might be inevitable — the military-industrial complex would like that, since it could restore sales to 2010 levels.  Clinton has been largely silent on her suggestion of a "no-fly zone" in Syria lately, but her history on interventionism is troubling, including her vote for the war in Iraq and endorsement of intervention in Libya.  Neither has any fresh ideas for dealing with the Islamist State as an international threat, even if Obama's efforts to cut into the territory it occupies continue to make progress.

The Middle East
It seems clear that Clinton will maintain US support for the Arab autocracies, despite copious human rights abuses within their territories and Saudi war crimes in Yemen.  She also will be more friendly to Netanyahu's increasingly bellicose and repressive path for Israel than Obama has been, and the Palestinians will be out of luck, no matter what Bernie gets into the Democratic platform.  Tr*mp's support from Sheldon Adelson suggests that he will be even deeper in Netanyahu's pocket than Clinton; and his rejection of the Iran deal and insistence that the Saudi's "pay their own way" would be a recipe for a nuclear armed Middle East.  With regard to Assad, Tr*mp might be too conciliatory, Clinton too bellicose.

Europe
I don't know if anybody has considered problems that might arise from installing missile "defense" systems (against Iran? Yeah, right!) in Eastern European countries moving ever closer to fascism, but that probably can wait for 2020.  Neither US candidate has anything to offer Europe in dealing with its refugee crisis, and neither will use US influence over the IMF in an attempt to soften Europe's devastating austerity regime, albeit neo-liberal (aka neo-conservative) US bankers have a lot more influence than US political leaders.  Clinton certainly understands Europe's problems better than Tr*mp, but she's no less neo-liberal in her thinking than her husband was — and nobody knows what impact Tr*mp's affection for Putin might bring

Asia and the Pacific
The US Chamber of Commerce seems confident that Clinton will change her mind about support for the TPP as soon as she's president, and they're probably right.  Tr*mp seems to think he could negotiate a "better deal," but his confidence in his negotiating skills is just as inflated as his hair.  The Chinese, I suspect, couldn't care less which of them is elected because China's economic and military power is unlikely to be affected.  Tr*mp's fantasies of Japan and South Korea having their own nuclear arms would almost certainly remain fantasies, because not all Republicans are total idiots.

Africa
If Tr*mp can identify more than three African countries on an outline map, I'd be very surprised.  Clinton, at least, is aware of the mess that is African politics and economics, but is unlikely to move beyond Obama's very limited engagement there.  With either of them, Africa will remain on the back burner until something explodes.

Latin America
Haven't you had enough pessimism for one post?  It's certainly been enough for me, so I'll pass over Latin America — where the US has had virtually no policy at all since "our" dictators were overthrown — and save it for another day.  In the meanwhile, though, keep an eye on Venezuela, Brazil, Mexico, Peru, Argentina, Honduras, El Salvador, Guatamala, et al.  Tr*mp's "wall" won't keep the chaos south of the border.

Recent developments

Syriza victory

Germany continues to insist that Greece will necessarily carry on with with its existing austerity regime in order to get the next installment of its bailout.  What Merkel and Co. fail to note is that the next bailout installment is earmarked to make payments on earlier loans, and the Greeks themselves will see not a cent.  After five years of depression (not recession), the last think Greece needs is higher taxes and more cuts in government services.  Alexis Tsipras knows this, and can feel quite confident that the troika will not go out of its way to screw itself, and thereby destabilize the euro.  There will be renegotiation.

Netanyahu address

I have a feeling that Boehner's invitation to Bibi to address Congress will backfire against both of them.  Boehner has given Obama a splendid opportunity to snub the Israeli hawk, and close a little more of the distance between the USofA and Iran.  Was the invitation AIPAC's idea?  Probably.  AIPAC doesn't lobby for Israel, it lobbies for Likud.

ANWR

Lisa Murkowski is livid, and Obama is grinning, even though he knows that permanently excluding oil and gas drilling from the Reserve won't be happening under this Congress.  Most of what we're likely get from Our President over the next two years is a succession of symbolic gestures, but while provoking Yosemite Sam impersonations from Republicans actually accomplishes nothing, it's still fun.

"American Sniper"

I have a copy, but I haven't gotten around to watching it yet.  Eastwood actually is a talented director when he's not having conversations with empty chairs, so whether or not the film is "politically significant," it most likely will be watchable.

More Ukraine (groan!)

Ukraine, with or without Crimea, is screwed.  Its tiny economy is pretty much on a par with that of Greece, and the IMF can't wait to get in there and impose austerity.  Except for the usual plutocrats, Ukrainians are going to suffer.

So, think about it: if you lived in Crimea, would you be more likely to go for a Russian bailout with continued cheap natural gas, or a whole lot of pain?  Personally, I think I might go with the dreadful Mr. Putin over the parsimonious Ms. Merkel.

Do the "nationalists" in Kiev understand how hooking up with the EU will make Ukrainian poverty so much more obvious to the Ukrainian people?  Yes, much of the blame can be cast on Yanukovych, but it's unlikely that replacing one group of corrupt assholes with another will do much good.

In the meanwhile, the media are not paying enough attention to Syria, Turkey, Venezuela, the CAR, or other places where people are in a hell of a lot more trouble than Crimea.  Pretty clearly, the Russians are going to keep Crimea this time around, the (very) Light Brigade of the USofA and Europe notwithstanding.

Election Day!

Egypt, Greece, and France held elections yesterday, with mixed results.

In Egypt, needless to say, the Supreme Military Council (aka military junta) stripped the soon to be elected president of all his powers even before the first vote was cast, so nobody really cared what happened.  What will Muslim Brotherhood candidate Mohammed Morsi do with his empty title?  Beats me.  Is it time to to heat things up again in Tahrir Square?  Maybe — but Egypt could make Syria look like Luxembourg.

In Greece, fear triumphed, mildly, over hope (or anger) with the "victory" of the New Democrats — who really are not all that different from the Clinton-Gore New Democrats of the USofA.  Obama may be thinking about genuinely joining a religion so he might more effectively pray for a financial turnaround in Europe.  So far, New Democracy has not managed to form a government.  I suppose Pasak will join in by tomorrow or the next day, provided the alleged "socialists" are offered enough graft — but that coalition will be very fragile.

Greece could be facing new elections in a matter of months, unless the Germans get the steel rods out of their asses and let Greece ease up on its current austerity program, which has driven the country into depression.  In case you hadn't noticed, Germany is the country that has profited most from the euro — the euro is worth a lot less than a deutschmark would have been worth at this point, and that has been the primary factor driving Germany's export oriented economy for many years.  The losers were the net importing Eurozone countries of the south.  As I suggested last November, the best way to save the euro would be to kick out the Germans and generate some healthy inflation.

The good news is that Hollande and his Socialists have solidified their political control in France, creating a counterweight to Merkel and the Germans with regard to austerity.  If it's not too late, the Greeks, Spaniards, and Portuguese will appreciate Hollande's efforts.  It might even cheer the sad, suffering Irish a bit.  Countries cannot afford to watch their best and brightest young people emigrate because there is no work at home.

Things fall apart;

....................... the center cannot hold;
Mere anarchy is loosed upon the land...

It's really disheartening how frequently and aptly one can quote Yeats these days.  What passed for the center in Greece took a clobbering as Greek voters moved both left and right.  In a couple of days, we'll get to find out if the leftist coalition, Syriza, can form a government now that New Democracy has failed to do so.  It doesn't look good; both because New Democracy was awarded an extra fifty seats in the 300 seat legislature because it squeaked into first place, and because the Communists refuse to join any coalition government.

Next, the Socialists get a turn to fail, and then there will have to be a caretaker government while new elections are held.  At that rate, it doesn't look good for Greece getting the next installment on its bailout.  A Greek default — which just about everybody expected was inevitable anyway — might do the trick of loosing "mere [economic]  anarchy upon the world."

François Hollande disrupted a decades-long pattern of French incumbent victories by defeating Sarkozy — despite Sarkozy's pandering to first round supporters of Marine Le Pen.  In both Greece and France,  "the worst," demonstrating quite a bit of "passionate intensity" helped the quasi-fascist Golden Dawn and National Front parties lay claim to influence that will not be ignored.

Yes, left and right, voters were voicing their discontent with German dictated austerity measures — and, in a larger sense, with the plutocracy that came to replace the natural "center" over the past three decades.  They are tired of having their lives twisted this way and that for the sake of a cabal of big banks, hedge funds, and multinational corporations.  The question remains, though: do they truly understand who they hate and why they hate them?

Election Season

Tomorrow there will be elections in France, Greece, Italy, and Germany.  In November, there will be elections in the United States.  Not everybody may see just how those elections are interconnected, but if they don't, at the very least, they ought to try. The European voting should be seen as a plebiscite on austerity, the modus operandus of the European Union since the financial debacle.

The Italian elections are local but, like last week's local elections in the UK, may be an indicator of how the electorate is swinging.  The elections in Germany are for the Schleswig-Holstein region, and have the potential to push Angela Merkel out of power if the Social Democrats and the Greens do well and are able to form a coalition.

There is a lot more attention, of course, to the national elections in France and Greece.  Polling shows Francois Hollande, the Socialist, leading Nicolas Sarkozy.  France, unlike a bunch of other European nations, isn't quite in official recession yet — but the handwriting is on the wall.  Hollande says he wants European action to stimulate growth, and it seems the French populace is responding to that message.  The question, at the moment, is what kind of winning margin he can achieve (assuming he wins.)  Nobody knows which way the National Front (the Tea Party of France) will turn, if they bother to vote at all.  It would be very amusing is they went for Hollande.

The Greeks have sufficient parties and political schisms so that it is possible that no coalition government might be formed.  Most of Europe is hoping that the socialist Pasok party and the conservative New Democrats (makes you think of Clinton) gather enough of the vote to form a coalition government (!) that can pander to the Germans enough to keep Greece in the Eurozone — but the situation is really crazy.

At the moment, the United States too is in austerity.  The (inadequate) Obama stimulus has run its course; the Fed is standing pat; the states continue to dump cops, teachers, motor vehicle clerks, etc.  According to the most recent figures, job growth appears to be slowing.

The Republican answer to this is more austerity — albeit, unlike the Europeans, Republicans refuse to raise taxes (especially on the very rich), and hope to "balance the budget" on the backs of the poor.  The example of Europe sliding down the economic drain means nothing to the corporate elite, the rentier class, and the rest of the plutocrats.  Hell, it won't hurt them.

The vast majority of America (including Democrats) consists of economic illiterates.  Pointing out that so-called "balancing the budget" by decimating government is exactly what failed in Europe will do little good.  I really hope Obama has a plan — however shifty and devious — to overcome the stupidity of the American people.  Needless to say, I also hope that, somewhere in his heart, there is a little "Old" Democrat who will do the decent thing when he no longer has to worry about re-election.

Is Europe wising up?

In the wake of the first round of French elections, people are beginning to pay more attention to the growing number of voices in Europe suggesting that German led "austerity for all" is not working. Europe as a whole has a 10.8% unemployment rate, and unemployment in countries like Greece and Spain are depression level. Italy and now France have joined the rolls of countries which must pay more interest on their sovereign debt.

Mario Monti, Christine LeGarde, and a great many European economists have been calling for pro-growth policies to offset the negative spiral created by austerity. Countries cannot balance their budgets when tax revenues are falling, and tax revenues won't increase until individuals and businesses are earning more. Businesses cannot grow without markets for their products, so even export driven Germany is in a slowdown.

Here in the United States, Republicans want us to do just what didn't work for Europe, but with one important difference: while European austerity programs include tax increases, Republicans want to cut taxes even more than they already have, with special emphasis on taxes for wealthy individuals and corporations. They maintain that such cuts will encourage the richest of the rich to invest more, thereby creating jobs, and expanding the economy. Yes, it's good old "trickle down" again.

American corporations are sitting on mountains of cash but not using it for job creation or business expansion — primarily because there is no demand for their products. The super-rich, who also have mountains of cash at their disposal, are back to gambling on derivatives, not entrepreneurship (unless you count financing superPACs as entrepreneurial activity.)

So how do the Republicans mean to balance the budget? By taking the food out of the mouths of hungry children, reducing senior health care benefits, and generally screwing everybody who depends in any way on government safety nets. There's a word for that.

Evil.

My big fat Greek... bailout?

Those of us who are not Greek ought to be pretty happy today, relatively speaking. Two out of three leaders of the Greek coalition government seems to have approved the German diktat requiring concentration camp style austerity, and the Parliament will either accept it or reject it on Sunday. It could be close.

A lot of people out on the streets of Athens and other Greek cities seem to think Parliament should reject it. I'm emotionally inclined to agree with the angry mobs. Honestly, I don't know what will happen to the Greek people if there is a disorderly default, but I'm pretty sure about what will happen if they do accept Auswitch austerity.

Greece will be totally fucked for many years.

Most important, it is not Greece that will be bailed out by the current plan — the plan provides for a bailout of European banks. The IMF, ECB, and European Commission will pay into an escrow fund for the new Greek bonds, which will pay the banks first. Should there happen to be anything left after the banks are sated, that remainder goes to the Greeks.

In the meanwhile, Greece is in the fifth year of what is being called a recession but really is a depression, and that depression continues to be made worse by austerity imposed from outside. The new measures require Greece to reduce its minimum wage by 22%, and all wages are likely to fall as a result. 20% of the government jobs that have driven the Greek economy in the past will be eliminated, elevating the current 20% unemployment rate. Nobody expects a drop in the prices of things like food, fuel, and rent.

Personally, I'd be inclined to go with the drachma. Greeks who still have savings in Euros, I'm sure, will get them out of the country. Those who have Euro denominated debt can default along with their country.

Screw the banks.

Hey, what happened?

While I've been calming down from that last post — not to mention the consummation of that Faustian bargain I mentioned — it seems many others have been getting a bit more excited. Today's market plunge may be just more of the "volatility" which indicates that nobody knows what the hell is going on. On the other hand, it just may be that investors finally have figured out that austerity is not likely to be good for their investments.

After all, the corporate world has been sitting on its money and spending bupkes for the past couple of years, and plutocrats tossing their loose change around at Bergdoff-Goodman and Tiffany do not an economy make. When the United States joined Europe in the cult of what Krugman calls "the confidence fairy," it appears many Wall Streeters decided it was time to listen to the economists rather than the Koch brothers.

Then, of course, there's the SUPER-COMMITTEE, whoopie doo! Since the Republicans already have sworn that no tax increase supporters nor loophole closers will be appointed to their six, one supposes they are assuming at least one of the Democratic appointees will be an Obamesque anilinguist (and one assumes that we all can assume they are correct in that assumption. And, okay, I haven't calmed down all that much.)

I know I swore off making predictions a while back, and hence I will refrain — but I just can't see anything good coming out of any of this.