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Depression and Fascism: Krugman’s Analysis

Hungarian Jobbik Party Members on Parade

COMMENT: Although he insists on refraining from using the “F” word for what is transpiring in Europe, Nobel Prize-winning economist Paul Krugman has noted in a New York Times column that the “austerity” measures championed by Germany (and also the GOP in the U.S.) and being currently implemented, are driving forward extreme right politics in Hungary, among other countries.

It might be noted that it was the “austerity” program of chancellor Brunning’s regime of 1930-1932, in combination with the Great Depression, that drove the  people into the arms of Hitler.

In Hungary, the very cutbacks being mandated by advocates of “austerity” are driving sentiment in the direction of the Jobbik party, an assembly of old-line “street fascists.” Author and apparent beneficiary of those cutbacks and the reaction they produce is Fidesz, the governing right-wing party that has consistently and successfully flanked Jobbik on the right.

It is noteworthy that here, too, the brazen implementation of fascism (in a former Axis ally) has taken place out in the open and with very little fanfare.

Not with a bang but a whimper.

“Depression and Democracy” by Paul Krugman; The New York Times; 12/11/2011.

EXCERPT: It’s time to start calling the current situation what it is: a depression. True, it’s not a full replay of the Great Depression, but that’s cold comfort. Unemployment in both America and Europe remains disastrously high. Leaders and institutions are increasingly discredited. And democratic values are under siege.

On that last point, I am not being alarmist. On the political as on the economic front it’s important not to fall into the “not as bad as” trap. High unemployment isn’t O.K. just because it hasn’t hit 1933 levels; ominous political trends shouldn’t be dismissed just because there’s no Hitler in sight.

Let’s talk, in particular, about what’s happening in Europe — not because all is well with America, but because the gravity of European political developments isn’t widely understood.

First of all, the crisis of the euro is killing the European dream. The shared currency, which was supposed to bind nations together, has instead created an atmosphere of bitter acrimony.

Specifically, demands for ever-harsher austerity, with no offsetting effort to foster growth, have done double damage. They have failed as economic policy, worsening unemployment without restoring confidence; a Europe-wide recession now looks likely even if the immediate threat of financial crisis is contained. And they have created immense anger, with many Europeans furious at what is perceived, fairly or unfairly (or actually a bit of both), as a heavy-handed exercise of German power.

Nobody familiar with Europe’s history can look at this resurgence of hostility without feeling a shiver. Yet there may be worse things happening.

Right-wing populists are on the rise from Austria, where the Freedom Party (whose leader used to have neo-Nazi connections) runs neck-and-neck in the polls with established parties, to Finland, where the anti-immigrant True Finns party had a strong electoral showing last April. And these are rich countries whose economies have held up fairly well. Matters look even more ominous in the poorer nations of Central and Eastern Europe.

Last month the European Bank for Reconstruction and Development documented a sharp drop in public support for democracy in the “new E.U.” countries, the nations that joined the European Union after the fall of the Berlin Wall. Not surprisingly, the loss of faith in democracy has been greatest in the countries that suffered the deepest economic slumps.

And in at least one nation, Hungary, democratic institutions are being undermined as we speak.

One of Hungary’s major parties, Jobbik, is a nightmare out of the 1930s: it’s anti-Roma (Gypsy), it’s anti-Semitic, and it even had a paramilitary arm. But the immediate threat comes from Fidesz, the governing center-right party.

Fidesz won an overwhelming Parliamentary majority last year, at least partly for economic reasons; Hungary isn’t on the euro, but it suffered severely because of large-scale borrowing in foreign currencies and also, to be frank, thanks to mismanagement and corruption on the part of the then-governing left-liberal parties. Now Fidesz, which rammed through a new Constitution last spring on a party-line vote, seems bent on establishing a permanent hold on power.

The details are complex. Kim Lane Scheppele, who is the director of Princeton’s Law and Public Affairs program — and has been following the Hungarian situation closely — tells me that Fidesz is relying on overlapping measures to suppress opposition. A proposed election law creates gerrymandered districts designed to make it almost impossible for other parties to form a government; judicial independence has been compromised, and the courts packed with party loyalists; state-run media have been converted into party organs, and there’s a crackdown on independent media; and a proposed constitutional addendum would effectively criminalize the leading leftist party.

Taken together, all this amounts to the re-establishment of authoritarian rule, under a paper-thin veneer of democracy, in the heart of Europe. And it’s a sample of what may happen much more widely if this depression continues. . . .


14 comments for “Depression and Fascism: Krugman’s Analysis”

  1. A lesson from “Fascist takeovers 201”: True control means controlling the hearts and minds:


    Revanchism in Budapest
    Hungary’s Right-Wing War on Culture

    By Philipp Oehmke

    István Márta says that he hasn’t given up yet, but he knows he’s fighting a losing battle. He is standing in the auditorium of his theater with a camera and acting as if all was well in the theater.

    “What can I do?” he asks, a little too loudly and with a touch of annoyance in his voice.

    “Nothing,” says his assistant. “We can do nothing.”

    On stage, actors are rehearsing a scene from “Don Carlos.” Together, they move forward and begin to moan, snort and gasp. Here on the stage in Budapest, modern director’s theater feels no different than it does in German cities like Bochum, Freiburg or Cologne. “Don Carlos” will be Márta’s penultimate production, to be followed by “The Magic Mountain.” And then it’ll be all over for Márta.

    His theater will soon be under new management. Márta’s successors are an actor who recently campaigned for the right-wing extremist Jobbik Party and a playwright who is a professed anti-Semite.

    A Battle for People’s Thoughts

    But a country’s culture can’t be changed that easily. In Hungary, culture is leftist and liberal, as it is in many other European countries. Culture does what it pleases and what it thinks. But to gain complete control over a country, one has to control what people think. This is precisely the issue on many people’s minds in Hungary today: a battle for people’s thoughts.

    Already in recent months, the directors of a few provincial theaters have been replaced by government sympathizers. In Budapest, the artistic director of the National Opera was let go. Márta, at the New Theater, will be the next to go, and there is talk that the gay director of the National Theater may also be driven out.

    A country is imposing a new way of thinking and a new culture on itself, a culture that ties in with pre-1920 Greater Hungary. Hungary today is a country trying to awaken a sense of national identity that never actually existed.

    ‘Reptile of Hungarian Politics’

    Márta, the current director of the New Theater, did nothing wrong. The theater is making money, and the productions have been favorably reviewed. He has produced the international theatrical canon, including works by Molière and Ostrowski, Büchner, Schiller and Shakespeare, as well as by Hungarian writers. Márta didn’t expect to encounter a problem when he sent the mayor a 200-page document in the fall: his concept for the theater’s artistic and financial future.

    The mayor, István Tarlós, entered office since last year after 20 years of liberal leadership in the city. The writer Rudolf Ungváry describes Tarlós, a supporter of the governing party, as “a reptile of Hungarian politics, muscular and well-fed.” Suddenly a second application for the directorship of the New Theater appeared on Tarlós’s desk. It was less than 20 pages long, vague and incomplete. Those who saw it say it was obviously thrown together with little attention to detail.

    It was submitted by György Dörner. Dörner, 58, does voice overs for Mel Gibson characters in the Hungarian versions of Hollywood films. He is a moderately successful actor who recited folk poetry at campaign events of the far-right Jobbik Party last year.

    In his application, Dörner wrote that not only did he intend to rename the New Theater as the “Home Front Theater,” but that he would also put an end to “degenerate, sick, liberal hegemony.” The mayor liked what he read, although Dörner’s suggestion to rename the theater went too far, even for Tarlós. In his application, Dörner also wrote that he intended to run the theater together with his friend István Csurka.

    Everyone in Hungary knows István Csurka. Once a celebrated poet, he wrote stories and plays with such poetic force that even his rivals praised his works. Csurka was also a hero. As a well-known conservative dissident, he was arrested during the 1956 uprising, although it soon emerged that he had also cooperated with the Hungarian secret police during communist rule.

    Part 2: ‘Blabbing on about Jews’

    It is a Thursday morning in mid-November and Dörner, who lives outside Budapest, is still sleeping. The woman who answers the phone says that he was up late the night before shooting a film. When we finally reach Dörner at around noon, he says, in his Mel Gibson voice, that he prefers to exercise his right to make no comment. He adds that he has nothing to explain — and hangs up.

    Here at his weekly newspaper, Csurka has recently begun writing commentaries under the headline “Ascher Café,” diatribes filled with hate and accusations. “People make fun of our application,” Csurka writes, “because in it we expressed national thoughts and not their liberal consensus.”

    The commentary’s title “Ascher Café” is a reference to Tamás Ascher, perhaps Hungary’s most famous film director, the Director of the Academy of Drama and Film, and a Jew. For Csurka, Ascher symbolizes the Jewish-liberal coffeehouse cultural conspiracy he has been fighting for decades. Csurka writes: “It isn’t just the social-liberal cultural policy, but also the Ascher Café’s dominance over the theater that is so oppressive. We are withdrawing culture from the control of Tamás Ascher, the head of the café, the great director, who also directs films in Los Angeles and is, with all certainty, descended from a family of Ashkenazi Jews from Odessa.”

    “We Hungarians, especially those on the right, are at the political state of consciousness that existed in 1948. We stopped thinking after that, and only started thinking again in 1989,” says Hungarian journalist Rudolf Ungváry.

    Even today, many Hungarians believe that only the Germans were responsible for the 560,000 Hungarian Jews who were murdered during the Holocaust. But, says Ungváry, Adolf Eichmann’s staff in Hungary consisted of only two dozen members of the SS. According to Ungváry, it was the Hungarian police force that organized the deportation of the Jews to the German extermination camps. But the country has never confronted this part of its past. In postwar Germany, the conservative government of then-Chancellor Konrad Adenauer also took former Nazis on the road to Western democracy, whereas in Hungary the members of the far right went underground. They have since resurfaced as horrific zombies and are trying to gain control over the country.

    Among these zombies is Sándor Pörzse. One of the most prominent members of Jobbik, he is also a member of parliament, the editor-in-chief of the party magazine Barikád and a founding member of the party’s paramilitary organization, the Hungarian Guard, which is now banned.

    He agrees to meet with us in the lobby of the parliament building, which once housed the communist central committee. It is a clear gesture that says: Look, this party is legitimate, Jobbik is the third-largest force in the parliament and will soon be the second-largest. Pörzse is a former professional football player and was later a well-known TV host at the right-wing stations HIR and Echo-TV. Today, he is a fascist.

    “Wrong,” Pörzse says immediately, looking oddly calm and relaxed. Fascists were the supporters of Mussolini, he says, but he isn’t one. He is a supporter of Hungary.

    And what does he think about the Nazis? Pörzse stretches, takes a deep breath and thinks for a moment, clearly enjoying the tension. Finally he says, smiling contentedly, “They were war criminals.”

    He is still on good terms with Prime Minister Orbán. The two men used to play football together. But the government, says Pörzse, is far too moderate and half-hearted. It publicly distances itself from Jobbik’s radicalism.

    A Culture War

    We must resort to harsh tactics now,” he says. “The country is so sick that aspirin is no longer effective.” The Hungarian people seem to agree with Jobbik, as evidenced by the party’s rise in popularity in public opinion polls. This is partly because Jobbik has figured out how to reach people — not through politics, but through resentments disguised as culture. This explains the uniforms, the torchlight parades, the nationalist song-singing evenings and the paramilitary organization.

    “After the political turnaround has been completed,” Pörzse says, “we must now recapture our spot in the culture.”

    Posted by Pterrafractyl | December 22, 2011, 2:27 pm
  2. http://www.usatoday.com/news/world/story/2011-12-19/neo-nazis-serial-killings/52083006/1

    Germany Links Serial Killings to Neo-Nazis

    20th December 2011

    “Many people don’t see the problem,” said Florian Kröckel, 32, from Halberstadt in eastern Germany, where violence against those seen as not “German enough” occurred often. “They don’t want to see the problem.” Wagner was blunt: “(Right-wing crime) has been hushed-up. Politicians want Germany to make a good impression on other countries.”

    By Ruby Russell, Special for USA TODAY

    BERLIN – The first to die was Enver Simsek , 38, a flower vendor shot in the face in Nuremberg in 2000. The last was Halit Yozgat, 21, shot in the head in the Internet café he ran in Kassel, six years later.

    In between, seven more people — mostly Turks — were murdered across Germany in killings that police had surmised were the work of drug syndicates, money launderers or homicidal relatives. Law enforcement appeared to ignore the possibility of right-wing terrorism, in spite of Germany’s legacy of decades of periodic violence against minorities by neo-Nazis.

    But the recent discovery that the killings were the work of neo-Nazis has led to soul searching and shame among German officials and rage in the Turkish-German community.

    “If eight or nine Germans had been killed in Turkey with the same weapon and the murderers not found for years, Europeans would be up in arms,” Elif Kubasik, whose husband Mehmet Kubasik was murdered in Dortmund in 2006, told Turkish newspaper Sabah.

    Worse, the neo-Nazis accused of the crimes were known to law enforcement as early as the 1990s on suspicion of committing racist acts and had contacts with informants working for Germany’s equivalent of the FBI, the BfV, according to the agency.

    “I am not surprised that right extremists are killing people in Germany,” said former police officer Bernd Wagner, who left the force in 1991 and set up an organization that counsels neo-Nazis to reject their ways. ” They would have seen this coming had they read the writing on the wall.”

    Uwe Mundlos, Uwe Böhnhardt and Beate Zschäpe were friends who started out young on their racist careers in the mid-1990s. As a teen, Böhnhardt hung a mannequin over a bridge with a Star of David on it, according to German media reports. By 1998, all three were wanted by police for plotting bomb attacks.

    The two men and possibly others, such as Zschäpe, committed their first murder Sept. 9, 2000, shooting Simsek eight times in Nuremberg, states the Federal Prosecutor’s Office. Eight more would die over the next six years, but it wasn’t until the fifth execution that police determined the deaths were connected.

    The gun used to kill Yunus Turgut in 2004 as he opened his kebab shop in Rostock in eastern Germany was the same Czech pistol used in the previous four murders. But still the killers were not caught. Two years and four victims later, the killings ceased and the case went quiet until last month.

    On Nov. 4, a bank in the eastern town of Eisenach was robbed by two masked men. As police raced to find the robbers they came across a burned out camper van with two corpses inside. Mundlos, 38, had shot Böhnhardt, 34, and killed himself, says the Federal Criminal Police Office, or BKA. .

    Zschäpe, 36, fled after allegedly setting fire to the apartment the three shared in the eastern German town of Zwickau. She turned herself in to police a few days later. Among the charred remains investigators found guns, including the Ceska pistol used in the murders. They also found DVDs in which the two men say they were part of the National Socialist Underground and brag about the murders. They called the killing spree the “Germany Tour: 9 Turks shot,” though one of the victims was of Greek heritage.

    Zschäpe is awaiting trial on charges of arson and terrorism. Her lawyer has said prosecutors do not have enough evidence for the terrorism charge.

    Meanwhile there have been near daily revelations in the German news media that the trio had been under surveillance by police and domestic intelligence since the mid-1990s but were never viewed as suspects in the killings for more than a dozen years.

    BKA head Jörg Ziercke said police had to follow all leads including possible involvement of drugs and gambling, and insisted there had been no indication at the time of right-wing extremism. And the BfV has admitted that one of its agents was seen at the Internet café where Yozgat worked on the day he was killed.

    “There seems to have been people who knew about the whole thing and the striking thing is that the (intelligence agency) had people in there and they didn’t (figure) it out,” said Andreas Hieronymus of the Hamburg-based Institute of Migration and Racism Research.

    Kenan Kolat, chairman of the Muslim Community in Germany, said he believes police have failed to see that racism was at the root of the violence because they did not want to dredge up Germany’s Nazi past. Others say the failure was part of a reluctance by leaders to tarnish Germany’s image abroad.

    “Many people don’t see the problem,” said Florian Kröckel, 32, from Halberstadt in eastern Germany, where violence against those seen as not “German enough” occurred often. “They don’t want to see the problem.”

    Wagner was blunt: “(Right-wing crime) has been hushed-up. Politicians want Germany to make a good impression on other countries.”

    Posted by R. Wilson | December 22, 2011, 9:16 pm
  3. This is definitely worrisome. Who knows how many more European countries will fall into totalitarianism before the end of this decade?
    There may be some hope for the U.S., however, as many millions have woken up to the Tea-Freakers and their bullshit. One can only hope that the Hungarian people will soon awaken as well.

    Posted by Steven l. | December 23, 2011, 5:51 am
  4. @Steven L.: And let’s hope the US’s ultra-wealthy wake up soon to the reality that the public no longer buys the notion that our ultra-wealthy have actually “earned” their ultra-wealth. It might avoid future embarrassments like this. Given the profound stupidity on display by the global leadership when it comes to any sort of environmental sustainability over the next century, I’d imagine some of these guys are genuinely as clueless as Taibbi’s article makes them seem and don’t necessarily want to turn the world into a giant serf plantation managed by islands of unaccountable wealth and power. Or at least that’s the Christmas miracle I’m hoping for this year.

    *jingle jingle jingle*

    Posted by Pterrafractyl | December 23, 2011, 7:05 pm
  5. The missing F-word notwithstanding, one big problem I see in Krugman, and in any mainstream critique of the unravelling in Europe, is this word Democracy. The EU is a centralizing force, not a democratizing one, in any sense of the term. The rising support and legitimization of far-right and nationalist movements in Europe is not in opposition to anything resembling democracy, any more than the political left is working in the interests of working class people. God bless Paul K., but he writes (has to write) in NY Times code, where ‘democracy’ refers to the sham of electoral politics and ‘representative’ government, owned and operated by conglomerate interests. If we can stand back, we see the entire crisis — nosediving currency, far right thuggery, political and economic chaos, etc. — is itself a mass-marketed commodity, serving and benefiting a solid core of interests. This telescoping lack of an incisive, meaningful vocabulary — especially in the hands of St. Paul The Economist — gives the lie to the whole system.

    Posted by Rob Coogan | December 25, 2011, 10:10 am
  6. Indeed, well said, Mr. Coogan.

    Sometimes I feel foolish, pointing out process at work for decades, successfully so.

    And the process is indeed, the realization of fascism.

    That was the whole purpose of the Friedrich List’s system and the Reich’s adoption of it.

    Look up Istvan Csurka with the search function. (He’s one of the Hungarian fascists who have been hard at work for decades restoring their beloved system.)

    He’s been around along time, and is now realizing his agenda.

    Csurka was recently quoted in the “New York Times” on the subject of Hungarian politics.

    Posted by Dave Emory | December 25, 2011, 4:44 pm
  7. @ Rob Coogan. Yes indeed. The Eu is a centralizing force that is in fact the negation of democracy. What fools the majority of Europeans is that they remember that fascism came before WWII through right-wing platforms. And now, seeing a resurgence of right-wing parties and sensibilities, they fear that the same scenario might repeat itself. But the fact is, fascism has now cloaked itself under the guise of left-wing elements, political parties, NGOs, etc. When you look at the bureacracy of the EU and many of left-wing partisans in Europe, you see the new fascists, 2.0 if you want, at work. As you say yourself, nationalism is not incompatible with democracy, not anymore than socialists really defend workers. What makes present-day politics so difficult to analyze is that authoritarian, totalitarian elites don’t really care about the garment that they have to wear. SS uniforms are no longer necessary, if you know how to craft and deliver the deceptions. All that matters for them is the end, which is control. It is a great commentary Rob, thanks for sharing it.

    @ Dave. Concerning Hungary, it seems that they were more patient or stubborn, depending on how you look at it, than others in their desire to keep the label or brand of “extreme-right” or “fascist”. I guess they are now in a position to cash in the profits after a half century of struggle and bare survival. Those who remained faithful to extreme-right fascism throughout Europe might benefit from the destruction of democracy that the EU is bringing. By collaborating with EU bureaucrats and so-called socialists, they might, I am afraid, be victorious in the end, if nothing is done on our part.

    Posted by Claude | December 26, 2011, 12:44 pm
  8. Posted by Pterrafractyl | December 28, 2011, 3:32 pm
  9. I want to echo and extend Rob’s observations about language. The mainstream paradigm of ‘democracy’ has become so corrupt that it’s difficult to envision democracy as anything but a staged and futile formality. Obviously, one way the relative presence of democracy is proved or disproved is whether or not the wishes and policy of the majority are being actively pursued and accomplished, rather than whether or not campaigns and elections take place. Also obviously, democracy isn’t equivalent to any specific economic system. Insisting on a return to sensible consensual definitions (or even reading a dictionary) is a revolutionary act. Mussolini could have added “Fascism is atavism” because its advocates consistently are contemptuous of the careful use of reason and language.

    Posted by Dwight | December 29, 2011, 3:27 am
  10. @Dwight: Well, although I must agree with you on the serious issues Western Democracy now faces, it’s important to remember as well that fascists HATE, and DESPISE, true democratic thinking. This is why you see the Tea-Freakers and all the other extreme right-wing useful idiots, puppets, and shills for the Establishment here in America making these highly ridiculous claims of “American is a republic, not a democracy”, and such, when in fact, this country as it was founded, had the most unique form of government in the world back in 1776: The world’s first representative, constitutional, democratic republic. And yet, the extreme right wishes to take away democracy and transform us into a country similar to Mussolini’s Italy(or post-Mao China!) in the ’30s, or Pinochet’s Chile in the ’70s, or Galtieri’s Argentina in the early ’80s. One of their most favored tactics, is quote mining and taking things completely out of context, as what they’ve done with the Founders in particular. And sadly, some morons have really bought into this garbage. Hopefully, we can educate people before it’s too late, because if not, these attitudes will continue to take us down a path which has already given us things like the ‘PATRIOT’ Act……and we could very well end up at least like the South Africa of the pre-Mandela period. Maybe even worse!

    Posted by Steven L. | December 29, 2011, 5:48 pm
  11. With the eurozone’s ‘austerity’ drive running strong with no end in site and the economic situation deteriorating rapidly in the P.I.I.G.S, predictions of economic growth in 2012 are already being dashed and it’s looking like a recession will probably take place in the eurozone way this year. And now there’s chatter about a ‘lost decade’. That should do wonders for the anti-democratic forces of the world eager to offer a new vision. On the plus side, at least the euro has fallen so much against the yen and dollar that Germany’s exports are even more competitive on the world stage. Well, I guess self-reinforcing cycles of ‘austerity’ and a ‘lost decade’ for the eurozone won’t be ALL bad:

    In Euro Zone, Austerity Seems to Hit Its Limits

    Published: January 1, 2012

    Europe’s leaders braced their nations for a turbulent year as their beleaguered economies faced a threat on two fronts: widening deficits that force more borrowing but increasing austerity measures that put growth further out of reach.

    While the economic picture in the United States has brightened recently with more upbeat employment figures, Europe remains mired in a slump. Most economists are forecasting a recession for 2012, which will heighten the pressure governments and financial institutions across the Continent are seeing.

    Despite criticism from many economists, though, most European governments are sticking to austerity plans, rejecting the Keynesian approach of economic stimulus favored by Washington after the financial crisis in 2008, in a bid to show investors they are serious about fiscal discipline.

    This cycle was evident on Friday, when Spain surprised observers by announcing a larger-than-expected budget gap for 2011 even as the new conservative government there laid out plans to increase property and income taxes in 2012.

    Indeed, even in the country where the crisis began, Greece, the cycle of spending cuts, tax increases and contraction has not resulted in a course correction, and the same path now lies in store for much larger economies like those of Italy and Spain.

    “Every government in Europe with the exception of Germany is bending over backwards to prove to the market that they won’t hesitate to do what it takes,” said Charles Wyplosz, a professor of economics at the Graduate Institute of Geneva. “We’re going straight into a wall with this kind of policy. It’s sheer madness.”

    Rather than the austerity measures now being imposed, Mr. Wyplosz said he would like to see governments halt the recent tax increases and spending reductions, and instead cut consumption taxes in a bid to encourage consumer spending. More belt-tightening, he said, increases the likelihood that Europe will see a “lost decade” of economic torpor like Japan faced in the 1990s.

    In fact, economists and strategists on both sides of the Atlantic have been steadily ratcheting down their growth expectations for 2012.

    “Europe is likely to have a meaningful recession in 2012,” said Tobias Levkovich, Citigroup’s chief equity strategist. While Mr. Levkovich does not see that as a significant threat to the bottom line of most American businesses — he estimates that Europe accounts for about 8.5 percent of sales for the typical company in the Standard & Poor’s 500-stock index — the psychological effects on global markets will be magnified if political opposition to austerity increases.

    The Continent’s economic outlook will take center stage on Jan. 9, when Mrs. Merkel and President Nicolas Sarkozy of France will discuss a new fiscal treaty intended to impose stringent budget requirements on European Union nations. Then on Jan. 30, European Union leaders will gather in Brussels to discuss ways to spur growth.

    There are some bright spots as Europe enters 2012. The recent drop of the euro currency against foreign rivals like the yen and the dollar makes European exports more competitive — a critical advantage for Germany, Europe’s largest exporter and its largest economy. German unemployment now stands at 5.5 percent, the lowest since German reunification.

    About 15 percent of the euro zone’s gross domestic product comes from German consumer spending, more than the contribution of Greece, Spain, Portugal and Ireland combined, according to Mr. Hill.

    An addition bright spot in this whole mess is that now the world gets to see what happens when a currency union tries to shift from one rooted primarily in trade between member nations into one rooted primarily on the economic clout of a few strong nations exporting to the rest of the world with the assistance of a weak currency after the rest of the currency union members become economic basket cases (sort of like what Putin’s Eurasian Union will probably look like). These currency unions sure are flexible.

    Posted by Pterrafractyl | January 1, 2012, 8:08 pm
  12. Here’s an interesting behind the scenes peek at the eurozone’s New Normal:

    Merkel under fire over phone bid to oust Berlusconi

    Michael Day


    Saturday 31 December 2011

    Yesterday’s Wall Street Journal suggested that Ms Merkel had “intervened” on 20 October and telephoned Mr Napolitano in Rome, urging him to “nudge Berlusconi off the stage”. Germany, it said, was alarmed by the Berlusconi government’s inability to fight the debt crisis and introduce the reforms demanded by the European Central Bank.

    Ms Merkel called on Mr Napolitano to do what was “within your powers”. The report adds that within days the president “quietly began sounding out Italy’s political parties to test the support for a new government if Mr Berlusconi couldn’t satisfy Europe and the markets”.

    It could be argued that such activities were in line with the president’s job description, and that he might have taken such a course anyway, given the economic crisis and the weakness of the Berlusconi administration.

    But the WSJ said its claims, which were based on interviews with more than two dozen policy makers – none of whom is named – as well as key documents, reveal “how Germany responded to the dangers in Italy by imposing its power on a divided euro zone”.

    Daniele Capezzone, a PDL spokesman, said the phone call appeared “authoritative and invasive”. Another PDL MP, Melania de Nichilo Rizzoli, said: “We are not a German colony. The European treaties do not allow the interference of one state in the political affairs of another European state.”

    A statement released by Napolitano’s office did not deny that the call took place. But it said there was no discussion ”of any issue of internal Italian politics, nor any request to replace the premier“. ”The reason for the conversation was only about the measures taken and to be taken to reduce the deficit, in defence of the euro and in relation to structural reforms,“ it said.

    However, suspicions that Mr Napolitano was keen to speed Mr Berlusconi’s departure may have been heightened by comments made in the week before Christmas — virtually unprecedented for an Italian head of state — in which he said the media mogul’s administration had become internationally “untenable”.

    Mr Berlusconi lost his parliamentary majority on 8 November. That evening he announced his would resign as soon as an emergency-budget had been passed. Later that week, as doubts mounted regarding Mr Berlusconi’s intention to step down, the president made an unusually forceful declaration saying that the 75-year-old tycoon was indeed about to quit, leaving him with no choice but to go within days.

    One could optimistically just view this whole incident as a form of quiety cooperation:

    Merkel Tells Nation She’ll ’Do Everything’ to Save Euro in 2012
    January 01, 2012, 1:26 PM EST

    By Brian Parkin

    Jan. 1 (Bloomberg) — German Chancellor Angela Merkel said she expects turbulence in 2012 as she does “everything” to save the euro and end Europe’s sovereign debt crisis.

    “The path to overcoming this won’t be without setbacks but at the end of this path Europe will emerge stronger from the crisis than before,” Merkel said in a New Year’s television speech yesterday. In his New Year’s message, Greek Prime Minister Lucas Papademos said his nation will confront a “difficult” 2012 and must continue efforts to stay in the euro.

    Merkel will meet with French President Nicolas Sarkozy in Berlin on Jan. 9 to discuss revisions to Europe’s fiscal rulebook following decisions made at a Dec. 9 summit. A final accord by euro leaders on the German-French proposals agreed at the summit is due in March.

    “Today, you can trust that I will do everything to strengthen the euro,” Merkel said. “This will only succeed if Europe learns from the mistakes of the past. One of these is that a common currency can only be successful if we cooperate more than in the past in Europe.”

    The euro had a second consecutive annual loss against the dollar in 2011 for the first time in a decade as rising yields on the region’s sovereign debt reflected speculation about defaults and stalling economic growth.

    In its 13th year of existence, the 17-nation currency fell below 100 yen for the first time since 2001 as the region’s leaders bailed out Portugal, and Italy, with the world’s third- largest bond market, had its worst year since at least 1992. The Swiss franc rose against a majority of its most-traded counterparts as Europe’s debt crisis spurred demand for safety.

    Posted by Pterrafractyl | January 1, 2012, 11:31 pm
  13. Good points! The NYT conflates (or should I say intentionally muddles) neoliberal “free market” economics (aka globalisation: 21st Century corporatism) with the word “democracy” all the time. Orwellian double speak.


    Posted by ce399 | January 3, 2012, 8:29 pm
  14. A couple of remarks on terminology…

    First, I believe that “Nazi” is the proper term to use for this political milieu, since their roots (some of them uninterruptedly) go straight back to their alliance with the leadership of Nazi Germany. Fascism is a phenomenon that predates Hitler’s Third Reich and even Mussolini’s Fascist Italy (although the Duce named it). It also postdates both in places that cannot be directly connected with the aforementioned: for instance, some of the fascist regimes of Latin America and the native fascists within Russia and the Ukraine. Fascism is a general term for the extralegal attempts of forces allied to the ruling industrialists and bankers to force the “lower” classes to accept groveling austerity and a cruel skewing of the labor market to their disadvantage, usually, but not always or necessarily, involving armed gangs in the streets but always involving cavalierly executed political murder (note the cognitive connection of the word “cavalier” to the knights of feudalism and the equites of the Roman Imperium).

    Second, is the name of those in Hungary who would identify themselves as “Lovari” rather than “Romani” (which is the universal term decided upon by the Roma Congress funded by George Soros), although “romano”/”rromano” does in fact mean “husband” in most of the Gypsy dialects. “Gypsy” is still the preferred term among those of this ethnicity I know personally in the U.S., since there are over a dozen Gypsy tribes with their own unique names.

    This latter remark puts me in mind of the way Gypsies have been cruelly treated under what we would consider liberal regimes, such as that of the U.K. under Tony Blair and France under Sarkozy. My knowledge of the Russian Gypsies (aside from their marvelous contributions to Russian folk music) comes from a Russian Jewish “refugee” I met in the U.S. (the oppression of the Jews in the U.S.S.R., according to him, has largely been a myth), who informed me that the implacable hatred that one type among the Gypsies (described also by George Burrows and other anthropologists) have for manual labor was solved by the Soviet leadership by organizing them into an acting troop, which can be seen in Табор уходит в небо (The Camp vanishes into Heaven) http://www.youtube.com/watch?v=MkXLhc4ZQu4 (my Russian friend took me with this family to see the film at his synagogue). The Irish Republic and the Czech Republic have also done well by the Gypsies: they don’t HAVE to be left to fend for themselves without employment and with little or no help from the government, as has been the case in Hungary.

    Posted by Atlanta Bill | October 16, 2013, 4:07 am

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