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:

CounterPunch Magazine

minimag-edit

bernie-the-sandernistas-cover-344x550

zen economics

April 27, 2017
Darlene Dubuisson – Mark Schuller
“You Live Under Fear”: 50,000 Haitian People at Risk of Deportation
Karl Grossman
The Crash of Cassini and the Nuclearization of Space
Robert Hunziker
Venezuela Ablaze
John W. Whitehead
Trump’s America is a Constitution-Free Zone
Ron Jacobs
One Hundred Years That Shook the World
Judith Deutsch
Convenient Untruths About “Human Nature:” Can People Deal with Climate Change and Nuclear Weapons?
Don Fitz
Is Pope Francis the World’s Most Powerful Advocate for Climate Stability?
Thomas Mountain
Africa’s War Lord Queen: The Bloodstained Career of Liberia’s Eleanor Sirleaf Johnson
Binoy Kampmark
Short Choices: the French Presidential Elections
Paul C. Bermanzohn
Monetizing My Mouth
Michael Barker
Of Union Dreams and Nightmares: Cesar Chavez and Why Funding Matters
Elier Ramirez Cañedo
“Let Venezuela give me a way of serving her, she has in me a son.”
Paul Mobbs
Cellphones, WIFI and Cancer: Will Trump’s Budget Cuts Kill ‘Electrosmog’ Research?
Incarcerated Workers Organizing Committee
The Closing of Rikers: a Survival Strategy of the Carceral State
April 26, 2017
Richard Moser
Empire Abroad, Empire At Home
Stan Cox
For Climate Justice, It’s the 33 Percent Who’ll Have to Pick Up the Tab
Paul Craig Roberts
The Looting Machine Called Capitalism
Lawrence Davidson
The Dilemma for Intelligence Agencies
Christy Rodgers
Remaining Animal
Joseph Natoli
Facts, Opinions, Tweets, Words
Mel Gurtov
No Exit? The NY Times and North Korea
Alexandra Isfahani-Hammond
Women on the Move: Can Three Women and a Truck Quell the Tide of Sexual Violence and Domestic Abuse?
Michael J. Sainato
Trump’s Wikileaks Flip-Flop
Manuel E. Yepe
North Korea’s Antidote to the US
Kim C. Domenico
‘Courting Failure:’ the Key to Resistance is Ending Animacide
Barbara Nimri Aziz
The Legacy of Lynne Stewart, the People’s Lawyer
Andrew Stewart
The People vs. Bernie Sanders
Daniel Warner
“Vive La France, Vive La République” vs. “God Bless America”
April 25, 2017
Russell Mokhiber
It’s Impossible to Support Single-Payer and Defend Obamacare
Nozomi Hayase
Prosecution of Assange is Persecution of Free Speech
Robert Fisk
The Madder Trump Gets, the More Seriously the World Takes Him
Giles Longley-Cook
Trump the Gardener
Bill Quigley
Major Challenges of New Orleans Charter Schools Exposed at NAACP Hearing
Jack Random
Little Fingers and Big Egos
Stanley L. Cohen
Dissent on the Lower East Side: the Post-Political Condition
Stephen Cooper
Conscientious Justice-Loving Alabamians, Speak Up!
Michael J. Sainato
Did the NRA Play a Role in the Forcing the Resignation of Surgeon General?
David Swanson
The F-35 and the Incinerating Ski Slope
Binoy Kampmark
Mike Pence in Oz
Peter Paul Catterall
Green Nationalism? How the Far Right Could Learn to Love the Environment
George Wuerthner
Range Riders: Making Tom Sawyer Proud
Clancy Sigal
It’s the Pits: the Miner’s Blues
Robert K. Tan
Abe is Taking Japan Back to the Bad Old Fascism
April 24, 2017
Mike Whitney
Is Mad Dog Planning to Invade East Syria?    
John Steppling
Puritan Jackals
FacebookTwitterGoogle+RedditEmail