The aus­ter­i­ty “solu­tion” to Cap­i­tal­is­m’s lat­est cluster‑f**k — the bleed­ing white of the work­ing class — is a bi-par­ti­san under­tak­ing and is inter­na­tion­al in scope.

“The State Bud­get Cri­sis Task Force” is tasked with doing the pol­i­cy grunt-work and con­sists of:

Paul Volk­er, Richard Rav­itch, Nicholas F. Brady, for­mer Sec­re­tary of the Trea­sury under Rea­gan and Bush; Peter Gold­mark, the for­mer bud­get direc­tor of New York State; Alice Rivlin, for­mer Vice Chair­man of the Fed­er­al Reserve under the Clin­ton Admin­is­tra­tion; and for­mer Sec­re­tary of Labor, Trea­sury, and State, George P. Shultz.

They are set to mount their assault in the US after the elec­tion, no mat­ter which pup­pet wins.

Greece is their beta-test.

@Ironcloudz: Maybe so. Hope­ful­ly, though, peo­ple will con­tin­ue to wake up and real­ize that Oba­ma isn’t and has­n’t been at fault for at least most of the eco­nom­ic woes here in Amer­i­ca, espe­cial­ly not those that have symp­toms caused by forces overseas(like the Greece cri­sis).

Bain Cap­i­tal is not that rel­a­tive­ly impor­tant and is only one of hun­dreds of such globe span­ning cap­i­tal invest­ment groups, but it is lit­er­al­ly every­where in the world, seek­ing raw cap­i­tal return with no regard for the long term wel­fare of peo­ple in gen­er­al.

One of their recent projects was in Tibet, where the trade in cash­mere (Yak wool) was defined by ( or ham­pered by, accord­ing to Bain phi­los­o­phy ) bureau­cra­cy, tra­di­tion, and com­pe­ti­tion among many inde­pen­dent pro­duc­ers. With the evi­dent con­nivance of the rel­e­vant gov­ern­ments Bain engi­neered a smooth­ly func­tion­ing cash­mere car­tel, from Yak in the pas­ture to brand­ed high-end retail out­lets in New York, Hong Kong, etc. The suc­cess of this project includ­ed ‘reg­u­lar­iz­ing the income’ of for­mer­ly inde­pen­dent Yak herders.

The above syn­op­sis had to be painful­ly deduced pure­ly from Bain’s own volup­tuous pro­pa­gan­da web­sites, which are full of cheery and inspi­ra­tional mes­sages from young, fresh-faced, ide­al­is­tic, cor­po­rate go-get­ters talk­ing about their green agen­da and their vol­un­teer work in Africa with the Gates Foun­da­tion. I restrained myself from giv­ing a dona­tion.

The euro cred­it cri­sis was a long time brew­ing, but it sur­faced at a moment when the dol­lar was in a cat­a­stroph­ic decline and when its posi­tion as the world cur­ren­cy was threat­ened. Europe’s debt trou­ble saved the dol­lar, at least tem­porar­i­ly, and that fact serves to high­light that the par­a­sitic attrib­ut­es of cap­i­tal­ism, which are always a poten­tial if not con­tin­u­ous­ly and explic­it­ly sup­pressed, are now in the ascen­dant.
With the entire world avail­able as a gam­ing are­na, one area (or cur­ren­cy, or indus­try) may be brought to the brink of col­lapse, trig­ger­ing a par­tial recov­ery in oth­er areas as cap­i­tal seeks the least rel­a­tive risk. The net result from each cri­sis is the low­er­ing of labor costs in the tar­get­ed area.
Whether the levers of eco­nom­ic pow­er are being pulled in some cen­tral con­trol room or whether by myr­i­ad indi­vid­ual instances of cap­i­tal seek­ing its own advan­tage, the results are the same. In an effec­tive­ly law­less glob­al cap­i­tal envi­ron­ment, the great­est return is to be had by find­ing exist­ing pro­duc­tive process­es and either carteliz­ing them, can­ni­bal­iz­ing them or find­ing some source of mar­gin­al val­ue in the process not pre­vi­ous­ly com­man­deered by investors. That source typ­i­cal­ly involves work­er wages and ben­e­fits above mere sub­sis­tence or inde­pen­dent small pro­duc­tion sub­ject to real com­pe­ti­tion.

Per­haps the sin­gle social ser­vice we will be allowed to keep will be the cart being pulled along the street, with a ragged man shout­ing “Bring out your dead”.

It looks like it’s the IMF’s turn to, uh, “help”:

IMF to Stop Fur­ther Aid Tranch­es to Greece, Spiegel Says
By Bri­an Parkin — Jul 22, 2012 6:45 AM CT

The Inter­na­tion­al Mon­e­tary Fund will stop pay­ing fur­ther res­cue aid to Greece, mak­ing the country’s insol­ven­cy in Sep­tem­ber more like­ly, the Der Spiegel mag­a­zine said. cit­ing uniden­ti­fied Euro­pean Union offi­cials.

While a review of Greece’s progress in meet­ing terms of its res­cue is unfin­ished, it is “already clear” to the review­ing body of the IMF, the EU Com­mis­sion and the Euro­pean Cen­tral Bank that Greece will not be able to ful­fill its promise to cut debt to 120 per­cent of annu­al eco­nom­ic growth in euro terms by 2020, Der Spiegel said.

Miss­ing the tar­get means Greece needs between 10 bil­lion euros and 50 bil­lion euros ($60.8 bil­lion) in addi­tion­al aid, a poten­tial out­come that the IMF and sev­er­al uniden­ti­fied euro- area states are not pre­pared to accept, the mag­a­zine said, cit­ing the review.

Euro-area lead­ers regard Greece’s exit from the euro as man­age­able even though they want to prop up the country’s finances until the new and per­ma­nent res­cue fund called the Euro­pean Sta­bil­i­ty Mech­a­nism is in oper­a­tion, the mag­a­zine said, cit­ing from the same sources. Ger­many is hold­ing up the incep­tion of the ESM as it awaits a court rul­ing on the fund’s con­sti­tu­tion­al­i­ty on Sept. 12, Spiegel said.

...

A Greek exit has “lost its ter­ror”. So says Ger­many’s vice chan­cel­lor. Be afraid. Be very afraid.

With bor­row­ing costs for Spain and Italy still near record highs, it’s worth remem­ber­ing that the Ger­man gov­ern­men­t’s offi­cial stance on the record high inter­est rates is that it’s a good a nec­es­sary source of pres­sure to force “reform” on the finan­cial­ly trou­bled nations. Yes, that’s right, Merkel & Friends like the record high inter­est rates that exac­er­bate the under­ly­ing prob­lem with nation­al sol­ven­cy:

Italy does­n’t need Ger­man cash, Mon­ti tells Ger­mans
August 05, 2012|Erik Kirschbaum | Reuters

BERLIN (Reuters) — Italy needs moral sup­port from Ger­many but not its cash, Prime Min­is­ter Mario Mon­ti said in an inter­view pub­lished on Sun­day as Ger­man con­ser­v­a­tives renewed calls for Greece to leave the euro zone.

The Ital­ian leader also told week­ly mag­a­zine Der Spiegel that he was con­cerned about grow­ing anti-euro, anti-Ger­man and anti-Euro­pean Union sen­ti­ment in the par­lia­ment in Rome.

The Ger­man gov­ern­ment has resist­ed calls from Italy and strug­gling coun­tries to intro­duce com­mon euro zone bonds or take oth­er action to help alle­vi­ate the bloc’s sov­er­eign debt cri­sis, say­ing it would remove pres­sure to enact painful reforms.

...

It’s also worth not­ing that the these near-record high inter­est rates are cost­ing tens of bil­lions of dol­lars a year. You could build avoid clos­ing a lot of schools and hos­pi­tals with that kind of cash:

Here’s Why Mario Mon­ti’s Final­ly Fight­ing Ger­many
Bar­ry Moody, Reuters | Aug. 13, 2012, 8:55 AM

Ital­ian Prime Min­is­ter Mario Mon­ti has tak­en the gloves off in his fight to save Italy from dis­as­ter in the euro zone debt cri­sis, dar­ing to stand up to Euro­pean pay­mas­ter Ger­many in a way unthink­able a few months back.

His change of atti­tude is dri­ven by increas­ing Ital­ian exas­per­a­tion with repeat­ed delays in for­mu­lat­ing an effec­tive response to a cri­sis on bond mar­kets that has put Spain and Italy in the front line against an exis­ten­tial threat to the euro and per­haps the whole Euro­pean Union.

...

Ital­ian offi­cials say the coun­try’s eco­nom­ic fun­da­men­tals war­rant a diver­gence of its 10-year bonds against Ger­man Bunds of around 200 basis points instead of 440 at present.

Each 100 points of “spread” adds 20 bil­lion euros a year in debt ser­vice costs, equiv­a­lent to the entire rev­enue raised by unpop­u­lar new hous­ing tax­es.

A senior gov­ern­ment eco­nom­ic offi­cial, speak­ing on con­di­tion of anonymi­ty, said soar­ing bor­row­ing costs dis­tort­ed nor­mal macro­eco­nom­ic mech­a­nisms, com­pound­ing Italy’s pain.

“The Euro­pean Cen­tral Bank low­ers its rates but our rates go up... inter­est rates are going up instead of down in a reces­sion,” he said. “Coun­tries that don’t need low inter­est rates get them and those in reces­sion get high rates.”

...

And in addi­tion to avoid­ing cuts in health and edu­ca­tion these gov­ern­ments could also extend pro­grams like unem­ploy­ment insur­ance to help alle­vi­ate some of the suf­fer­ing that’s already tak­en place.

Nev­er mind:

Rajoy Risks Ril­ing ECB in Bid to Avoid Union Ire: Euro Cred­it
By Emma Ross-Thomas — Aug 15, 2012 2:32 AM CT

Span­ish Prime Min­is­ter Mar­i­ano Rajoy risks irk­ing the Euro­pean pol­i­cy mak­ers he needs on his side after he extend­ed unem­ploy­ment ben­e­fits to avoid stok­ing social unrest.

Rajoy said yes­ter­day his gov­ern­ment will con­tin­ue to make pay­ments to the long-term unem­ployed, extend­ing for six months a ben­e­fit adopt­ed by his Social­ist pre­de­ces­sor three years ago that was due to expire today. Rajoy, who reit­er­at­ed he may con­sid­er seek­ing Euro­pean help to tame 10-year bond yields hov­er­ing near 7 per­cent, didn’t say how he’d pay for the mea­sure he described as “just.”

The pre­mier is try­ing to head off protests from Europe’s largest army of unem­ployed as his pop­u­lar sup­port sinks. The plan to increase spend­ing two weeks after Euro­pean Cen­tral Bank Pres­i­dent Mario Draghi offered to wade back into bond mar­kets threat­ens to under­mine his best way of bring­ing down bor­row­ing costs from near lev­els that prompt­ed Greece, Por­tu­gal and Spain to seek bailouts.

“He’s going to pro­voke an angry response and make the ECB even less will­ing to pro­vide sup­port,” said Stu­art Thom­son, a fund man­ag­er at Ignis Asset Man­age­ment in Glas­gow, who expects Spain to seek exter­nal funds by the end of the year. “Why poi­son the nego­ti­a­tions with resis­tance and deci­sions that will annoy the north­ern Euro­peans?”

Strict Con­di­tions

Span­ish 10-year bond yields dropped 1 basis point to 6.72 per­cent as of 9:26 a.m. in Madrid today com­pared with 6.73 per­cent yes­ter­day and a euro-era intra­day record of 7.75 per­cent on July 25. They have fall­en 44 basis points since Aug. 2, when Draghi said the ECB was pre­pared to buy sov­er­eign bonds to bring down yields if coun­tries applied for sim­i­lar sup­port from Europe’s res­cue fund and accept­ed strict con­di­tions. Rajoy said the next day he would con­sid­er trig­ger­ing the mech­a­nism if it were “in the best inter­est” of Spaniards. He reit­er­at­ed those com­ments yes­ter­day.

ECB pol­i­cy mak­ers have com­plained that pre­vi­ous attempts by the cen­tral bank to bring down bor­row­ing costs have led politi­cians to ease pledges to imple­ment bud­get cuts and mea­sures to over­haul their economies. The ECB briefly bought Span­ish and Ital­ian bonds last year.

“We haven’t for­got­ten what hap­pened in August of last year: We bought Ital­ian bonds and right after that the Ital­ian gov­ern­ment reneged on its pledges,” ECB Gov­ern­ing Coun­cil mem­ber Luc Coene said in an inter­view with De Tijd and L’Echo on Aug. 11 “The con­clu­sion is clear: When you take away the mar­ket pres­sure, you take away the pres­sure on politi­cians to act.”

Costs Unknown

Under the exten­sion announced by Rajoy, Spaniards who have run through as much as two years of con­tri­bu­tions-based job­less ben­e­fits will con­tin­ue to receive 400 euros ($494) per month. The gov­ern­ment hasn’t giv­en an esti­mate of the price tag of extend­ing the pro­gram, which cost 642 mil­lion euros for six months at its incep­tion in 2009 when the job­less rate was 18 per­cent. More than 200,000 peo­ple were get­ting the aid as of June, the Labor Min­istry said yes­ter­day.

...

The lat­est pack­age of 65 bil­lion euros of bud­get reduc­tions, announced after the Euro­pean Union gave Spain an extra year to meet its deficit goals, includ­ed trim­ming the main job­less ben­e­fit and rais­ing the val­ue-added tax in breach of Rajoy’s elec­tion pledges.

Yes, the costs of the 6‑month exten­sion to unem­ploy­ment ben­e­fits are unknown, except we known that it cost 642 mil­lion euros for 6 months in 2009. So...they are sort of known and it’s prob­a­bly not much more than 1 bil­lion euros today. And we also know that 65 bil­lion euros in cuts were just announced and that’s the lat­est round of cuts. So a coun­try that’s cut­ting tens of bil­lions from its bud­get is going to get scold­ed by the ECB for spend­ing tiny frac­tion of that on amount on a pro­gram intend­ed to ward off social unrest. Those are some won­der­ful pri­or­i­ties.

Work­ing hard, pay­ing atten­tion in class, get­ting your home­work done on time, and even doing all the extra cred­it assign­ments won’t get you that pass­ing grade when that old hag Mrs. Merkel is at the head of the class (I heard she once sent a kid away to deten­tion and they were nev­er seen again!).

This is why the “good stu­dents” become burn outs.

I’m not sure how anoth­er call to turn the EU into a giant usury-colony is a “shock” at this point, unless that’s a med­ical ref­er­ence to the psy­choso­cial sep­sis author­i­tar­i­an­ism tends to induce:

Ger­many shocks EU with fis­cal over­lord demand
qGer­many has stat­ed its exor­bi­tant price for keep­ing Greece in the euro and agree­ing to mass bond pur­chas­es by the Euro­pean Cen­tral Bank.

By Ambrose Evans-Pritchard

8:39PM BST 16 Oct 2012

There must be an EU “cur­ren­cy com­mis­sion­er” with sweep­ing pow­ers to strike down nation­al bud­gets; a “large step towards fis­cal union”; and yet anoth­er EU treaty.

Finance min­is­ter Wolf­gang Schaeu­ble dropped his bomb­shell in talks with Ger­man jour­nal­ists on a flight from Asia, and appar­ent­ly had the bless­ing of Angela Merkel, the chan­cel­lor. “When I put for­ward such pro­pos­als, you can take it as a giv­en that the chan­cel­lor agrees,” he said.

Offi­cials in Brus­sels react­ed with hor­ror. “If that is the demand, they are not going to get it. Nobody in the Coun­cil wants a new treaty right now,” said one EU diplo­mat.

“We’ve got the fis­cal com­pact and quite enough fis­cal dis­ci­pline. Not even the Dutch want a com­mis­sion­er telling them how to tax and spend,” he said.

The new demands risk anoth­er stormy sum­mit in Brus­sels on Thurs­day, pit­ting Ger­many against the Latin bloc. The last sum­mit in June end­ed with an acri­mo­nious deal in the small hours on a bank­ing union that began to unrav­el with­in days.

Mr Schaeu­ble said the cur­ren­cy chief should have pow­ers sim­i­lar to those of the EU’s com­pe­ti­tion com­mis­sion­er, a man “feared around the world”.

The com­pe­ti­tion Tsar is the arch-enforcer of the EU machine, with pow­ers to launch dawn raids, deploy SWAT teams, and block merg­ers on his own author­i­ty. The job was the mak­ing of Italy’s Mario Mon­ti a decade ago when he blocked the GE-Hon­ey­well merg­er after it had been cleared by Wash­ing­ton.

The Schaeu­ble plan is high­ly provoca­tive. The EU can set deficit tar­gets but it can­not man­age bud­gets, unless a coun­try requests a bail-out and gives up fis­cal sov­er­eign­ty.

Nor is it clear how Germany’s con­sti­tu­tion­al court would react. It ruled last year that the Bundestag’s bud­getary pow­ers are the bedrock of democ­ra­cy and can­not be alien­at­ed to any supra-nation­al body.

Mr Schaeu­ble poured scorn on counter-pro­pos­als by EU pres­i­dent Her­man Van Rompuy, includ­ing a first step towards debt pool­ing through joint “euro­bills”. The term “Fiskalu­nion” in Berlin has a spe­cif­ic mean­ing: more pow­er to police the affairs of debtor states. It does not mean debt mutu­al­i­sa­tion or a joint EU trea­sury. Ger­many has so far refused to cross this Rubi­con.

Michael Link, the country’s Europe min­is­ter, said Mr Van Rompuy’s plans are dead on arrival. “When you make pro­pos­als that are sim­ply unac­cept­able for cer­tain mem­bers, this will only give the impres­sion of divi­sion. You can phrase it any way you like, ‘trea­sury bills’, ‘debt-redemp­tion funds’ or ‘eurobonds’, this type of debt issuance will not fly with our gov­ern­ment. We have always said this very clear­ly.”

...

It looks like Mit­tens is mak­ing the GOP’s eco­nom­ic black­mail threat of an end­less House Insur­gency a cen­tral part of his clos­ing argu­ment for the pres­i­den­cy. While it’s not exact­ly a sur­pris­ing argu­ment at this point in the race, it’s a some­what curi­ous approach giv­en that the argu­ment implic­it­ly puts the focus on the end­less House Insur­gency of the last two years. Oh well, it could have been worse.

Speak­ing of eco­nom­ic black­mail, it’s start­ing to look like Ger­many is start­ing to devel­op the same under­ly­ing prob­lem that caused much of the euro­zone cri­sis in the first place: far too much nation­al sov­er­eign­ty, health­care, and pub­lic own­er­ship of crit­i­cal infra­struc­ture a mas­sive pri­vate sec­tor bor­row­ing binge lead­ing to hous­ing bub­bles across the con­ti­nent. Yep, now we can expect to watch the Ger­man hous­ing bub­ble get used as an excuse for doing noth­ing about the dis­solv­ing social fab­ric across the euro­zone because, you know, ris­ing hous­ing prices in Ger­many = infla­tion and infla­tion = bad.

The only way for­ward:

The Tele­graph
Angela Merkel sticks to aus­ter­i­ty script in Por­tu­gal as revolt builds
Ger­man Chan­cel­lor Angela Merkel braved hos­tile crowds in Por­tu­gal on Mon­day to show unflinch­ing sup­port for the country’s aus­ter­i­ty ordeal and plead for patience as social cohe­sion frays.

By Ambrose Evans-Pritchard

8:20PM GMT 12 Nov 2012

The fly­ing vis­it came as trade unions led a protest march through Lis­bon “in defence of nation­al sov­er­eign­ty” and the Left Bloc in par­lia­ment said its top pri­or­i­ty is to “bring down the gov­ern­ment” and forge a sal­va­tion front.

Swoop­ing into Lis­bon amid tight secu­ri­ty, Mrs Merkel praised the “coura­geous actions” of free-mar­ket pre­mier Pedro Pas­sos Coel­ho and vowed do to “every­thing pos­si­ble” to help the coun­try through hard times. Yet she also insist­ed that there would be no rene­go­ti­a­tion of the country’s €78bn (£62.5bn) EU-IMF Troi­ka pack­age or soft­er terms to alle­vi­ate the slump, say­ing aus­ter­i­ty is the “only way for­ward”.

The tough love mes­sage comes as unem­ploy­ment reach­es 15.7pc, with 35pc among the young, and dole dura­tion is slashed from nine months to four under Troi­ka reforms.

Mr Pas­sos Coel­ho has been able to count on a tac­it sup­port from oppo­si­tion social­ists but con­sen­sus broke down two months ago in a bit­ter clash over pay­roll levies.

Social­ist leader António José Seguro said on Mon­day that Por­tu­gal is crum­bling under the weight of debt ser­vice costs and “can­not endure any fur­ther aus­ter­i­ty”. The Troi­ka has warned of mount­ing polit­i­cal risk and “aus­ter­i­ty fatigue”.

Ger­man offi­cials have cit­ed Por­tu­gal as a suc­cess sto­ry, proof that Europe’s strat­e­gy of deep bud­get cuts com­bined with labour reform is pay­ing off.

The coun­try has com­plied with Troi­ka demands – unlike Greece – becom­ing the pin-up coun­try for advo­cates of fis­cal shock ther­a­py. But this means that any fail­ure indicts the EU pol­i­cy.

...

The IMF has revised its pub­lic debt fore­cast to 124pc of GDP next year, chiefly due to the “pro­tract­ed reces­sion”. This is up from 118pc just months ago.

“The IMF is admit­ting that aus­ter­i­ty is doing more dam­age than thought,” said Marchel Alexan­drovich, from Jef­feries. “They under­es­ti­mat­ed the fis­cal mul­ti­pli­er and there is a risk that Por­tu­gal will go down the same route as Greece.”

The Troi­ka said Portugal’s exter­nal debt has risen from 196pc to 239pc of GDP over the past five years and has yet to sta­bilise. While unit labour costs have begun to fall – plum­met­ing 5pc over the past year – this is entire­ly due to pay cuts for pub­lic work­ers. Man­u­fac­tur­ing wages have con­tin­ued to ratch­et up, cast­ing doubts on claims that Por­tu­gal is real­ly claw­ing back lost com­pet­i­tive­ness with­in EMU by an “inter­nal deval­u­a­tion”. This is in stark con­trast to the Baltics.

The Troi­ka says there is no mar­gin for error. If the slump drags on and there are any more shocks, Portugal’s debt dynam­ics will become “unsus­tain­able”. That is a mes­sage that Mrs Merkel does not want to hear.

Poor, poor France. Why can’t you just be a good vas­sal state team play­er like Por­tu­gal Esto­nia Lithua­nia Latvia? Or bet­ter yet, Ire­land! Ok, you can’t be like Ire­land, as they are a spe­cial case, but at least try to be more like Poland.

Come on France, get back in the game.

This is pret­ty help­ful: in response to the strange new trend of restau­rant own­ers declar­ing that they have to cut their employ­ee health­care plans in response to Oba­macare, folks are point­ing out that these bold cor­po­rate lead­ers are also announc­ing to the world that the very peo­ple that are han­dling the food at their restau­rants are more like­ly to be sick. Thanks for the health-advi­so­ry.

It’s one of those sto­ries that helps to under­score the myr­i­ad of rea­sons why finan­cial aus­ter­i­ty that comes at the expense of the real econ­o­my — some­thing that includes the health of the mem­bers of the econ­o­my — is so incred­i­bly stu­pid and destruc­tive. Mon­ey is a real­ly neat tech­nol­o­gy because it allows for decen­tral­ized deci­sion-mak­ing. But the idea that mon­ey is a high­ly imper­fect proxy for what is tak­ing place in the real world is an ene­my of fascism/corporatism, so it’s not sur­pris­ing that soci­eties still seem to equate “finan­cial health” with “health”(it’s dis­ap­point­ing, but not sur­pris­ing). But it’s fas­ci­nat­ing how the impor­tance of con­tract enforce­ment (i.e. if you have a finan­cial debt you will repay it even if repay­ing it destroys your abil­i­ty to repay it. i.e. usury) is still viewed as a foun­da­tion­al lynch­pin of the con­tem­po­rary social con­tract that keeps soci­eties func­tion­ing. And yet things like car­ing for the poor and vul­ner­a­ble or edu­cat­ing the next gen­er­a­tion are gen­er­al­ly seen as an increas­ing­ly unaf­ford­able a lux­u­ries that real­ly have min­i­mal impor­tance to social cohe­sion and eco­nom­ic per­for­mance. Because, you know, noth­ing dis­cour­ages “risk-tak­ing” and entre­pre­neur­ship quite like a social safe­ty net. Fas­ci­nat­ing.

“The mae­stro” also has some thoughts on this top­ic.

With a new Greek debt deal now a done deal, it’s worth repeat­ing the obvi­ous: in the con­text of our age of aus­ter­i­ty, doing the “bare min­i­mum” to resolve a nation­al cri­sis also dou­bles as doing max­i­mum to achieve the fas­cist objec­tives of shred­ding social cohe­sion. It’s the kind of fas­cist effi­cien­cy we should expect more of in the future. In the dri­ve to increase pro­duc­tiv­i­ty Merkel leads by exam­ple. A real­ly bad exam­ple:

Merkel Did ‘Bare Min­i­mum’ to Keep Greece Sol­vent: Ana­lysts
Pub­lished: Tues­day, 27 Nov 2012 | 7:24 AM ET

By: Shai Ahmed
CNBC Asso­ciate Edi­tor

The lat­est Greek debt deal is at the behest of Ger­man Chan­cel­lor Angela Merkel and the needs of the domes­tic polit­i­cal land­scape there rather than about ensur­ing Greece’s long term eco­nom­ic well- being, ana­lysts told CNBC Tues­day.

“They’ve done the bare min­i­mum just to keep the show on the road to pre­vent Greece from falling apart and hav­ing to leave the euro in the next few months. They’ve not done enough to get Greece back to a sus­tain­able eco­nom­ic or fis­cal path,” Michael Saun­ders, chief econ­o­mist for West­ern Europe at Citi, told CNBC Europe’s “Squawk Box”.

“A few months ago Merkel her­self made a deci­sion that Greece would not leave the euro until the Ger­man elec­tion is passed because she feared she her­self would be blamed for any adverse polit­i­cal and eco­nom­ic con­se­quences. That’s why this deal has been done. Merkel wants to keep the show on the road for the time being,” he said.

The lat­est deal, secured late on Mon­day, will see Greece’s debt lev­el low­ered to a more sus­tain­able lev­el and lead to the release of the next tranche of aid of $44 bil­lion need­ed to keep the coun­try sol­vent.

A Ger­man par­lia­men­tary vote on the deal is expect­ed lat­er this week on Thurs­day or Fri­day.

Alas­tair New­ton, senior polit­i­cal ana­lyst at Nomu­ra, told CNBC.com that the Ger­man elec­tions were a sig­nif­i­cant aspect of the deci­sion to get the deal through.

“The Ger­man elec­tions are a huge influ­ence here and it would obvi­ous­ly be very bad for Merkel if any­thing were to cause a crash in Europe before the elec­tions. Merkel is com­mit­ted to keep­ing the euro togeth­er but not at any cost. The Greeks now have to deliv­er on what is being asked of them,” New­ton said.

Saun­ders added that once the Ger­man elec­tions are over at the end of next year there could be a sig­nif­i­cant change in atti­tudes towards Athens and scoffed at the notion that this would be the deal that changes the for­tunes for the belea­guered coun­try.

“At that point, as I sus­pect when the deal is unrav­el­ling , what will the cred­i­tors do then? The econ­o­my is dis­in­te­grat­ing we’re in the fifth year of reces­sion head­ing into the sixth and beyond that the sev­enth and the eight. The longer this goes on it’s not going to get any bet­ter,” Saun­ders warned.

...

It nev­er ends:

Decem­ber 2, 2012, 4:01 pm
Oper­a­tion Rolling Tantrum
Paul Krug­man

Oh, boy. This isn’t going to end, even when or if a deal is reached on defus­ing the aus­ter­i­ty bomb; John Boehn­er has just declared that he’s going to hold the full faith and cred­it of the Unit­ed States hostage every time we hit the debt lim­it. Nor will it be a case of hold­ing the nation at gun­point until it meets GOP demands; Repub­li­cans are sig­nal­ing that they don’t intend to make any spe­cif­ic pro­pos­als, they’re just going to yell and stamp their feet until Oba­ma soothes them some­how.

So this is going to be night­mar­ish, unless Oba­ma sur­ren­ders — which I don’t think he will (because he shouldn’t).

...

It’s an elec­tion year in the US: Cue the GOP’s Euro-bash­ing!. What? No bash­ing this year? Now why would that be?:

Time
Repub­li­cans Want Us To Be Europe

Michael Grun­wald @MikeGrunwald

4/3/2014 5:27 PM ET

The par­ty that talks the most about the dan­gers of Amer­i­ca going Con­ti­nen­tal is the one dead set on mak­ing it hap­pen. When it comes to eco­nom­ics, the GOP is the par­ty of crois­sants and leder­ho­sen

The basic Repub­li­can cri­tique of Pres­i­dent Oba­ma is that he’s Euro­peaniz­ing Amer­i­ca. In the last cam­paign, Mitt Rom­ney claimed Oba­ma “takes his inspi­ra­tion from the cap­i­tals of Europe.” Paul Ryan warned “we will turn out just like Europe if we stick with Euro­pean poli­cies.” Europe’s con­tin­u­ing eco­nom­ic stagnation—12 per­cent unem­ploy­ment, near defla­tion, tepid growth—is cer­tain­ly an unat­trac­tive mod­el for the Unit­ed States. You can see why con­ser­v­a­tive car­toon­ists like to draw Oba­ma in a beret.

But the poli­cies that cre­at­ed the mess in Europe are not Obama’s poli­cies. They are the policies—especially tight mon­ey and fis­cal austerity—that Repub­li­cans have pushed for Amer­i­ca. And where eco­nom­ics is con­cerned, the GOP is still the par­ty of crois­sants and leder­ho­sen.

The big news in Europe this week was infla­tion drop­ping to 0.5 per­cent, which might sound like good news but isn’t. Yes, too much infla­tion can be bad, shak­ing con­fi­dence in cur­ren­cies, hurt­ing the pur­chas­ing pow­er of work­ers and seniors with fixed incomes. But the Euro­pean Cen­tral Bank has an infla­tion tar­get of near­ly 2 per­cent, and per­sis­tent “lowfla­tion,” with a nag­ging risk of defla­tion, is exact­ly what the con­ti­nent doesn’t need after a severe finan­cial cri­sis and a bru­tal reces­sion. It’s ter­ri­ble for fam­i­lies (and gov­ern­ments) with debts. And it’s increas­ing the val­ue of the euro, which hurts Euro­pean exporters and dis­cour­ages invest­ment. As I’ve tried to explain, in tough times, a lit­tle infla­tion can be a good thing.

The prob­lem is that the ECB—under pres­sure from the infla­tion-pho­bic Ger­mans on its board—has kept its mon­e­tary pol­i­cy much too tight. The Fed­er­al Reserve low­ered its key inter­est rate to zero in Decem­ber 2008 and has kept it there ever since; more than five years lat­er, the ECB still hasn’t quite got­ten to zero. The Fed has also engaged in three rounds of “quan­ti­ta­tive eas­ing,” buy­ing bonds to try to juice the econ­o­my; the ECB has not yet tried mon­e­tary stim­u­lus. Infla­tion in the U.S. is only 1.1 per­cent, below the Fed’s tar­get, but at least for­mer Fed chair Ben Bernanke and cur­rent chair Janet Yellen have tried to do some­thing about it.

Repub­li­cans have fought them every step of the way. They have accused the Fed of “debas­ing the cur­ren­cy,” of fuel­ing the next bub­ble by print­ing mon­ey, of try­ing to turn the U.S. into Zim­bab­we. In 2011, the top four con­gres­sion­al Repub­li­cans wrote Bernanke to demand an end to quan­ti­ta­tive eas­ing. Most Sen­ate Repub­li­cans opposed Yellen’s nom­i­na­tion, argu­ing that the Fed has kept mon­e­tary pol­i­cy too much, that it has focused too much on cre­at­ing jobs and not enough on squelch­ing infla­tion. The Fed has a statu­to­ry “dual man­date” to max­i­mize employ­ment and sta­bi­lize prices, but con­gres­sion­al Repub­li­cans, led by Paul Ryan, have called for the elim­i­na­tion of the employ­ment require­ment, so it would focus sole­ly on infla­tion.

In oth­er words, they want the Fed to be like the ECB.

For­tu­nate­ly, they have been most­ly unsuc­cess­ful. The Fed has begun to “taper” its mon­e­tary stim­u­lus, but the infla­tion hawks on the Fed board have been con­sis­tent­ly out­vot­ed. That’s one rea­son our infla­tion rate is more than twice as high as Europe’s, although it’s still too low, and our unem­ploy­ment rate is near­ly half as low as Europe’s, although it’s still too high.

The oth­er main drag on Euro­pean growth has been over­ly tight fis­cal pol­i­cy. After a short burst of coun­ter­cycli­cal stim­u­lus fol­low­ing the finan­cial melt­down in 2008, Europe has embraced fis­cal aus­ter­i­ty, push­ing spend­ing cuts and bal­anced bud­gets through­out the con­ti­nent. This has inspired riots, killed jobs, and depressed growth in coun­tries like Greece and Spain, which now have job­less rates over 25 per­cent. The Unit­ed Kingdom’s aus­ter­i­ty after David Cameron became prime min­is­ter in 2010 turned a promis­ing recov­ery into a dou­ble-dip reces­sion.

Again, the con­trast with the Unit­ed States is instruc­tive. Pres­i­dent Obama’s $800 bil­lion Recov­ery Act—sor­ry, I’m a stim­u­lus bore—was the largest fis­cal stim­u­lus in his­to­ry, a big rea­son the Great Reces­sion end­ed just four months lat­er. Oba­ma passed more than $1 tril­lion in addi­tion­al stim­u­lus in 2009 and 2010, a big rea­son U.S. eco­nom­ic out­put is now 6 per­cent above its pre-cri­sis lev­el, while most Euro­pean coun­tries have yet to return to their pre-cri­sis GDP. When pri­vate demand dis­ap­pears, gov­ern­ment needs to fill the gap.

And again, Repub­li­cans have been push­ing for us to be more like Europe, rail­ing against stim­u­lus, demand­ing dra­con­ian bud­get cuts that suck mon­ey out of the econ­o­my. Only three Repub­li­cans in Con­gress vot­ed for the Recov­ery Act. Repub­li­cans have bit­ter­ly fought unem­ploy­ment ben­e­fits, small busi­ness tax cuts, and oth­er stim­u­lus mea­sures they used to sup­port. They even threat­ened to force the U.S. gov­ern­ment into default if Oba­ma didn’t agree to mas­sive spend­ing cuts; over­all, cut­backs in local, state, and fed­er­al spend­ing have reduced GDP by about 1 per­cent a year since the Repub­li­cans took back the House of Rep­re­sen­ta­tives. Pres­i­dent Oba­ma has pushed for the Amer­i­can Jobs Act, new research and infra­struc­ture spend­ing, and oth­er stim­u­lus mea­sures, but Repub­li­cans have insist­ed on aus­ter­i­ty. That’s why U.S. growth has been mediocre instead of strong.

...

Ah...that’s why we’re get­ting radio silence on this top­ic this year: The GOP’s vision for the future and the EU’s actu­al poli­cies are are get­ting a lit­tle too close for elec­toral com­fort.

@Pterrafractyl–

With Europe real­iz­ing Ger­man plans for eco­nom­ic actu­al­iza­tion of a con­ti­nen­tal empire, dom­i­nat­ed by Deutscha­land (a la Friedrich List), it is more than inter­est­ing to watch the GOP’s actions in this respect.

Ger­many is con­trolled by the Under­ground Reich/Bormann net­work.

https://spitfirelist.com/books/the-new-germany-and-the-old-nazis/

https://spitfirelist.com/for-the-record/ftr-305-the-bormann-organization/

The GOP is, essen­tial­ly, a front for the Under­ground Reich.

https://spitfirelist.com/news/reagans-nazis/
https://spitfirelist.com/for-the-record/ftr-465-the-gipper-and-the-underground-reich/

https://spitfirelist.com/for-the-record/ftr-273-b-as-in-bush-b-as-in-bormann/

This is play­ing out very dis­trub­ing­ly.

Keep up the great work!

@Dave: Some­thing to watch as the 2016 race gets clos­er is which Fed offi­cials the var­i­ous can­di­dates would pre­fer for Fed Chair­man. Richard Fish­er, the pres­i­dent of the Dal­las Fed­er­al Reserve, called for drop­ping the Fed’s dual man­date back in 2012, which would basi­cal­ly turn the Fed into the Bun­des­bank. Fish­er has con­sis­tent­ly been one of the most out­spo­ken crit­ics of the Fed’s var­i­ous Quan­ti­ta­tive Eas­ing pro­grams and, more recent­ly, Fish­er referred to the Dal­las Fed as the “Bun­des­bank of the Unit­ed States”. So it’ll be inter­est­ing to see if any of the GOP’s pres­i­den­tial can­di­dates in 2016 have a par­tic­u­lar Fed Chair­man in mind.

@Pterrafractyl–

“Bun­des­banki­fi­ca­tion?” Delight­ful!

I not­ed in your recent com­ment the obser­va­tion that the GOP were fas­cists, along the lines of Mus­solin­i’s cor­porte state.

Hmm­m­mm! Seems I’ve heard that refrain some­where before.

Remember–IF the GOP gets in the White House with con­trol of the Con­gress, they WON’T wait for the howl of out­rage and elec­toral back­lash for all of those who are dev­as­tat­ed by their poli­cies.

Keep an eye out for a ter­ror inci­dent that will dwarf 9/11.

This will serve like 9/11–we must “all sac­ri­fice” (except for the 1%) and “pull togeth­er.”

They might trig­ger “The Big One” in Cal­i­for­nia, but that won’t detract suf­fi­cient­ly from the eco­nom­ic destruc­tion their poli­cies have wrought.

The Malaysia 370 “mys­tery” MIGHT be a run-up to some­thing along those lines.