Saving the Euro

Greece and Italy have been handed over to technocrats, tasked with taking the difficult steps that politicians find impossible. Democracy, clearly, is incompatible with austerity. Make people suffer (most often for the sins of economic elites,) and they vote you out of office. It's as simple as that.

In Spain, the Socialists have been replaced by the center-right Partido Popular — not because Spaniards have suddenly become more conservative, mind you, but because the Socialists were presiding over the austerities forced on Spain by other Eurozone countries (mostly Germany.) Since the Popular Party will be obliged to continue the same unpopular policies the Socialists began, we can expect it to get a lot less popular in short order. Watch out, amigos, here comes another technocrat.

As for mes amis en France, your turn will come as well. Sarkozy is not long for power, and nobody in French politics will want to take responsibility for austerity measures. Yet another European technocracy would not be a surprise.

The source of all the unpopular austerity is Germany. The eternally anal-retentive Germans just can't stand it that their neighbors to the south were inclined to spend more than they earned. Their disapproval goes beyond the economic: it is moral disapproval. Since the southerners were so profligate and generally naughty, Germans feel, they don't deserve to be bailed out. Most Germans probably believe they ought to be birched on their bottoms.


As I see it, the most straightforward way to save the Euro is for Germany to drop out and return to the deutschmark. Maybe they can form a monetary union with the Netherlands, Europe's other economically responsible country. After that, the rest of the Eurozone can inflate its way out of debt.

Word is that there are some financial whiz kids in Germany quietly thinking through this solution. It's extreme, but if the German ants won't save their grasshopper neighbors, it may be the only remaining possibility.

So Much for the Supers

Well, what did you expect? Of course they deadlocked, and as Paul Krugman pointed out in his column in Friday's Times, it's the best outcome we could have had. Anything short of a deadlock would have been a Democratic cave-in, since the Republicans are totally committed to protecting their plutocratic masters from any slight discomfort or inconvenience.

As we all know, in our current government, it's the President's job to cave. Okay, maybe that was a bit cruel. Honestly, I think Obama really believes a lot of that neoliberal bullshit the "New Democrats" have been spouting for twenty years now. Coming out of the Ivies and then teaching at the University of Chicago, he would have been marinated in it for most of his intellectual life.

I think those "automatic cuts" that are supposed to be triggered in 2013 have about as much chance for survival as a Democratic candidate in Utah, even though $1.2 trillion over ten years is not a hell of a lot of money. Congress will have over a year to backtrack, and find ways to rescue its unquestioned overlords, the defense contractors.

If Obama genuinely wants to make a difference with regard to deficit reduction, he has to veto the inevitable effort Congress will make to extend the Bush tax cuts. Since he's unlikely to get a bill that only raises taxes on the rich, he has to be brave enough to let them all expire. What's left of the middle class will manage with a little less money in their pockets.

What frightens me most is talk about "streamlining" the tax system — reducing the number of tax categories and eliminating most deductions. When it was done under Reagan in the eighties, it started the decline in taxation of the rich — and in the years since, just about all the corporate tax breaks that were eliminated at the time have been written back into the code, and then some.

We should not be worrying about deficit reduction now, in any event. Even with the so-called "downgrade" of US debt by S&P, we don't have any trouble borrowing at ridiculously low rates. We should be taking advantage of those ridiculously low rates to borrow the money we need to put people back to work. The best way to balance the budget is to expand the number of people earning good salaries and paying taxes.

Egypt, again

As embarrassed as I may be (not much) by saying "I told you so," well, I told you so. Here was my prediction for the Egyptian revolution. Fuck it. I told you so.

Yes, the Egyptian military has no desire to give up the power it has exercised since Nasser replaced Farouk. Would you? Hell, they have all the money and all the power. Who the fuck needs democracy when you have the army?

....

Not entirely related, I heard on the BBC today that the number of Israeli settler attacks on West Bank Palestinians has tripled over the past two years. The UN official in the area — some guy from India — says the settlers are largely responsible. Okay, the Palestinians are far from perfect — but the Israeli settlers seem to be total pieces of shit. Why burn a guy's olive trees, trees that his great-grandfather planted?

(Answer: if he's still around when and if a Palestinian state comes into being, he actually may get to keep his land.)

...

As you may have noticed, I do my best to stay away from mideastern bullshit, as best I can. My avoidance, however, does nothing to stop the carnage.

Assholes.

Sexual Sidebars

According to yesterday's Times (and today's Times as well), the Pope of Pennsylvania (aka Penn State football coach Joe Paterno) is being pushed out of the job he's held for forty-six years for the little matter of neglecting to take appropriate action when given some lurid details of what assistant coach Jerry Sandusky was doing with that little boy in the Penn State shower room. Somewhat like the Pope in Rome, Paterno has been viewed as pretty much infallible by football fans. Even more like the Pope in Rome, Paterno was willing to let the sexual peccadillos of his underling go unreported to civil authorities, and probably for the same reason — money.


Like the Catholic Church, the Penn State football program depends on private contributions — and Penn State itself gathers about five percent of its revenues and most of its notoriety from its football team. Would the alumni be as inclined to contribute to a school that harbored kiddy diddlers? Would the faithful continue to top off the collection plates of a Church that harbored kiddy diddlers? Who knows? Better not to take the chance. Shove it under the rug, by all means.

* * *
Speaking of money, Silvio Burlusconi's adventures with underage prostitutes never did him a bit of harm, but threatening to bring down the Eurozone is another matter entirely.

***

Then there's that little matter of Herman Cain and the sexual harassment: since I am not of the female persuasion, I'm not entirely sure just what makes a woman "uncomfortable," but what Sharon Bialek describes certainly would make me "uncomfortable." I can't see any way to confirm the Bialek accusations, and I have no doubt that a lobbying group like the American Restaurant Association would pay off any woman (like Karen Kraushaar) ready to file a complaint, whatever the circumstances that provoked it. Well, so what?


Herman currently is blaming the "Democratic Machine" (would that it existed outside of Chicago) for his publicity problems, but his previous preferred hitman, Rick Perry, still seems a more likely choice. Perry has been wasting a hell of a lot of money garnering his 7 or 8 percent, and you just know he wants that nigra out of the competition. Obama, on the other hand, knows he can out-white Cain (because he is very nearly as white as Ivory soap.) Against Cain he can pull in the liberals, half the blacks, and the racists — and win the general election.

As for Mitt, he can't have any problem with Cain and Perry banging away at each other. His foremost problem is America, which sometimes can suss out assholes. I sincerely wish there were going to be a candidate who might win my enthusiastic vote, but I'm not counting on it — and it's certain that she (or he) never could win.

Another reason to dump Geithner

It made the front page of the business section of yesterday's Times, but the broadcast media haven't had much to say about it: it seems that back when Timmy Geithner still was president of the New York Fed, he and his crew had a real opportunity to get the banks that bought credit default swaps from AIG to take a haircut. Some, according to the Binyamin Appelbaum, were ready to do so voluntarily. Nevertheless, Timmy ("Wall Street's Pocket Puppy") Geithner determined that American taxpayers would make good 100% of Wall Street's potential losses.

If you've been around this blog for a while, you may remember how I was especially pissed off by the AIG bailout — here, for example, and here, and here. Well, I certainly am no happier now than I was back then — in point of fact, "pissed" no longer is an adequate description of my feelings of revulsion. Now that the GAO has reported that Geithner, apparently, felt greater obligations to the banks than to the human beings rescuing them from their paroxysms of greed, I am angrier than ever — both at Geithner, and at Barack (Robert Rubin's Pocket Puppy) Obama for appointing him to Treasury.

If Obama wants to align himself with the populist perspective, and portray the Republicans (accurately) as pawns of big finance, he'd better stop being a pawn of big finance himself. Dumping Geithner would be a very good start.

Well, here's to democracy... I guess

Nominal socialist George Papandreou is referring the current Greek bailout deal to the Greek public in a referendum. The pundits seem to think he is "tossing the dice," hoping the Greek public will back his negotiated deal, and thereby shutting up the voices of opposition. That interpretation seems unlikely to me.

Could it be that Papandreou remembered that he is, at least nominally, a socialist? I sincerely hope so. I hope he returned from the negotiations asking himself, "What have I done?" From a political perspective, he might very well be asking himself how the Socialists let the Greek center-right seize the issue. Don't political labels mean anything?

(These days, probably not. Hell — Obama is accused of being a liberal.)

I would like to think that Papandreou's decision to put the bailout plan to the Greek people arises from pangs of socialist conscience. Most Greeks seem to understand that while austerity may be good for European banks, it is not necessarily good for Greece. Whatever chaos an "uncontrolled" default might cause around world financial markets, for the Greeks, following in the footsteps of Argentina seems like the best bet to me. I've already posted my unsolicited advice.

I just hope the rest of us survive it.