FacebookTwitterGoogle+RedditEmail

A Short Fable From the Eurozone

by MIKE WHITNEY

Let’s say you wanted to start a new country, but you knew nothing about civil institutions, bureaucracy or history. All you cared about was creating an environment that was good for business, where budget discipline and trade agreements were the law of the land.

So, you spend a bundle of money hyping your Dreamstate to policymakers and the public proclaiming that your new creation will be the fast-track to peace and prosperity.  Surprizingly, everyone loves the idea so much that they overlook the structural flaw at the heart of the design, that the loose confederation of states lacks a central government. The only thing that holds the countries together is a shared currency and budget restrictions. That’s it. But the corporate bigwigs and banker tycoons shrug off the  problem because,  well, because governments don’t really do anything anyway, do they? They just get in the way of big business.

That’s why you created a different model altogether, a model that puts a Central Bank at the center of the universe, surrounded by a scattering of eurocrats (financial ministers) who implement your diktats and sing your praises.

Then, one day, a fire breaks out on the perimeter and you start to panic. You run around in circles waving your hands and begging for help. But the other leaders balk at your request because they are still tied to their constituencies and run the risk of losing elections if they agree to pay for a fire that they didn’t start. After all, it was those “lazy Greeks” that started the fire. Let them pay for it.

So, now you have a big problem. Eurotopia is being reduced to rubble and no one can agree on a solution. And all the while, you keep thinking to yourself, “If I could just get the finance ministers to support a larger emergency fund and leverage the heck-out-of-it, then  I could douse those flames pronto and get back to making money again.”  It never occurs to you that your Corporate Frankenstate has no historic precedent and is built on a foundation of pure sand. You never think, “Maybe we need an executive, a congress, a judiciary, a bond market, and civil servants to execute our plans”.

Nah. That can’t be it, because government is bad. Banks are good, governments are bad, right?

And as you savor this morsel of wisdom, your Euro El Dorado burns to the ground.

The 17-member eurozone is in an irreversible spiral. The banks are hoarding capital, dollar funding is getting tighter,  CDS spreads are widening, the ECB’s emergency loan program is soaring, and the gauges of market stress are blinking red. These are all the signs of a major credit cataclysm.

Now all of these problems could be resolved if there was a functioning government in place to put out the fire. But there isn’t. All there is is a bank, a gaggle of finance ministers, and a few worthless treaties. And, that’s why the eurozone is doomed.

And the moral is….?

Government matters.

Mike Whitney lives in Washington state, He can be reached at fergiewhitney@msn.com

MIKE WHITNEY lives in Washington state. He is a contributor to Hopeless: Barack Obama and the Politics of Illusion (AK Press). Hopeless is also available in a Kindle edition. He can be reached at fergiewhitney@msn.com.

More articles by:
July 26, 2016
Andrew Levine
Pillory Hillary Now
Kshama Sawant
A Call to Action: Walk Out from the Democratic National Convention!
Russell Mokhiber
The Rabble Rise Together Against Bernie, Barney, Elizabeth and Hillary
Jeffrey St. Clair
Don’t Cry For Me, DNC: Notes From the Democratic Convention
Angie Beeman
Why Doesn’t Middle America Trust Hillary? She Thinks She’s Better Than Us and We Know It
Paul Street
An Update on the Hate…
Fran Shor
Beyond Trump vs Clinton
Ellen Brown
Japan’s “Helicopter Money” Play: Road to Hyperinflation or Cure for Debt Deflation?
Richard W. Behan
The Banana Republic of America: Democracy Be Damned
Binoy Kampmark
Undermining Bernie Sanders: the DNC Campaign, WikiLeaks and Russia
Arun Gupta
Trickledown Revenge: the Racial Politics of Donald Trump
Sen. Bernard Sanders
What This Election is About: Speech to DNC Convention
David Swanson
DNC Now Less Popular Than Atheism
Linn Washington Jr.
‘Clintonville’ Reflects True Horror of Poverty in US
Deepak Tripathi
Britain in the Doldrums After the Brexit Vote
Louisa Willcox
Grizzly Threats: Arbitrary Lines on Political Maps
Robert J. Gould
Proactive Philanthropy: Don’t Wait, Reach Out!
Victor Grossman
Horror and Sorrow in Germany
Nyla Ali Khan
Regionalism, Ethnicity, and Trifurcation: All in the Name of National Integration
Andrew Feinberg
The Good TPP
400 US Academics
Letter to US Government Officials Concerning Recent Events in Turkey
July 25, 2016
Sharmini Peries - Michael Hudson
As the Election Turns: Trump the Anti-Neocon, Hillary the New Darling of the Neocons
Ted Rall
Hillary’s Strategy: Snub Liberal Democrats, Move Right to Nab Anti-Trump Republicans
William K. Black
Doubling Down on Wall Street: Hillary and Tim Kaine
Russell Mokhiber
Bernie Delegates Take on Bernie Sanders
Quincy Saul
Resurgent Mexico
Andy Thayer
Letter to a Bernie Activist
Patrick Cockburn
Erdogan is Strengthened by the Failed Coup, But Turkey is the Loser
Robert Fisk
The Hypocrisies of Terror Talk
Lee Hall
Purloined Platitudes and Bipartisan Bunk: An Adjunct’s View
Binoy Kampmark
The Futility of Collective Punishment: Russia, Doping and WADA
Nozomi Hayase
Cryptography as Democratic Weapon Against Demagoguery
Cesar Chelala
The Real Donald Trump
Julian Vigo
The UK’s Propaganda Machinery and State Surveillance of Muslim Children
Denis Conroy
Australia: Election Time Blues for Clones
Marjorie Cohn
Killing With Robots Increases Militarization of Police
David Swanson
RNC War Party, DNC War Makers
Eugene Schulman
The US Role in the Israeli-Palestine Conflict
Nauman Sadiq
Imran Khan’s Faustian Bargain
Peter Breschard
Kaine the Weepy Executioner
Weekend Edition
July 22, 2016
Friday - Sunday
Jeffrey St. Clair
Good as Goldman: Hillary and Wall Street
Joseph E. Lowndes
From Silent Majority to White-Hot Rage: Observations from Cleveland
Paul Street
Political Correctness: Handle with Care
Richard Moser
Actions Express Priorities: 40 Years of Failed Lesser Evil Voting
Eric Draitser
Hillary and Tim Kaine: a Match Made on Wall Street
FacebookTwitterGoogle+RedditEmail