Europe’s Lunatics Rise

By Delusional Economics, who is horrified at the state of economic commentary in Australia and is determined to cleanse the daily flow of vested interests propaganda to produce a balanced counterpoint. Cross posted from MacroBusiness.

Back in December last year while discussing the ongoing woes of Europe, I suggested tha the fiscal compact may never actually be enacted because attempts to do so would have such a disastrous outcome that European nations will inevitably give up. I also mentioned in February that one of the things that could potentially effect any implementation was the European people themselves when they got to have a say about what was going on.

Over the weekend round one of the French presidential elections took place, and the results certainly aren’t pro-compact. In fact, I am not even sure they are pro-Europe:

Far-rightist Marine Le Pen threw France’s presidential race wide open on Sunday by scoring nearly 20 percent in the first round – votes that may determine the runoff between Socialist favorite Francois Hollande and conservative President Nicolas Sarkozy.

Hollande led Sarkozy by about 29 to 26 percent in reliable computer projections broadcast after polling stations closed, and the two will meet in a head-to-head decider on May 6.

But Le Pen’s record score of 18-20 percent was the sensation of the night, beating her father’s 2002 result and outpolling hard leftist Jean-Luc Melenchon, in fourth place on 11 percent. Centrist Francois Bayrou finished fifth on less than 10 percent.

Le Pen, who took over the anti-immigration National Front in early 2011, wants jobs reserved for French nationals at a time when jobless claims are at a 12-year high. She also advocates abandoning the euro currency and restoring monetary policy to Paris.

Le Pen’s policies are as you would expect from a far-Right candidate. Patriotism, protectionism, state control all being high on the list. Le Pen has stated she is determined to re-industrialisation of France, reduce immigration to just 10,000 a year, scrap the European common Agricultural Policy and pull France out of the passport-free Schengen zone amongst many other policies.

Latest results are Hollande 28.8%, Sarkozy: 26.1; Le Pen 18.5%. The big question now is how the votes of failed far-left candidate Jean-Luc Mélenchon and Le Pen will fall. A first round poll suggested that 48% of Le Pen supporters will transfer their vote to Sarkozy, while 24% will opt for Hollande. However, 83% of Mélenchon voters prefer Hollande. At this stage Hollande and Sarkozy are very close going into the final round, but it is the far-Right’s Le Pen that holds the key.

France, however, is not the only nation in Europe where the Right is resurgent. Although the latest polls in Greece show that Antonis Samaras’s New Democracy is likely to win over all, it will be unable to get anywhere near the required 151 seats to form government. In fact, the latest polls show that even if New Democracy and PASOK, the current ruling party, joined forces they may not get there.

That being the case, a larger coalition will need to be formed, and the latest polls are predicting that will mean eight parties in the parliament many of them towards the extremes of the political spectrum:

Shockingly, all recent surveys agree that one of these will be Golden Dawn (Chrysi Augi), a violently xenophobic and pro-Nazi organization which has exploited public anger over the uncontrolled influx of illegal immigrants into the country.

The far left, meaning the unrepentantly Stalinist Communist Party and the fissiparous Marxists of SYRIZA, are also expecting their fiery anti-austerity rhetoric to pay electoral dividends—they are both vying for a third place finish.

A more longshot but not entirely hopeless contender for third place are the newly minted Independent Greeks, a right-wing party that flirts with sectarian Greek-Orthodox rhetoric, which was founded just last February by Panos Kammenos, a disaffected demagogue who quit Nea Dimokratia because of its support for the tough measures accompanying Greece’s second bailout. Kammenos rails against the “foreign occupation” of Greece by its official lenders and calls for Greece’s debt to be erased.

The Greek election will be held on May 6. As I stated above, I mentioned both of these elections back in February calling them “black cygnets”, meaning that they were events that people knew about but may have not have fully appreciated the potential consequences of them.

Black Swan events are those that come completely out of the blue, and in those terms what occurred over the weekend in The Netherlands probably fits the bill:

The ruling Dutch minority government was on the brink of collapse Saturday after anti-EU lawmaker Geert Wilders torpedoed seven weeks of austerity talks, saying he would not cave in to budget demands from “dictators in Brussels

New national elections that will be a referendum on the Netherlands relationship with Europe and its ailing single currency are now all-but-certain.

But before Prime Minister can tender his resignation — possibly as early as Monday — he must consult with allies and opposition parties on how to run a caretaker government that will have to make important economic decisions in the coming weeks and months.

“Elections are the logical next step,” Rutte said.

Opposition leader Diederik Sansom of the Labor Party joined others across the political spectrum in calling for new elections as soon as possible.

This Dutch government has been relatively unstable since the last election when a majority coalition was formed including the Freedom Party, which runs far-Right immigration policy but is Left-leaning on state policy. The government was attempting to push through €14.2 billion in cost cuts in order to speed up the country’s transition to a 3% deficit in 2013 instead of the forecast for 2015-16 under existing projections.

After week long negotiations the cuts were sent to the government’s economic agency for analysis (report available here if you can read Dutch ) and it was determined that they would result in a loss of economic growth which would mean that the overall effect of the cuts would only be about €6 billion as the rest would be lost in falling government income due to the negative effects of the cuts.

Upon seeing this analysis, the Freedom party pulled the pin on the coalition and the country must now hold new elections in September. It is widely expected that the country will be downgraded from AAA to AA by the ratings agencies given the on-going political instability.

The other thing of note is that the Dutch housing market appears to be popping. In February prices were 3.4% lower y-o-y, in March this rose to 4.7% y-o-y and prices are now down 11.8% from the peak. The Netherlands currently allows mortgage interest as a tax deduction, however , under a new government this deduction maybe reduced or removed altogether.

Geert Wilders’s new book “Marked for Death. Islam’s war against the West and Me” will be launched shortly in the US.

As I have stated previously in reference to austerity.

Obviously this is an economic disaster and I have been at the front of the queue screaming about misguided economic ideologies in Europe that have led, and continue to lead, to this situation. However, it doesn’t take much of an imagination to realise that this has the potential to become something much more sinister than just ugly looking charts and that is my real concern.

Obviously, I’m still concerned.

Print Friendly, PDF & Email


  1. Stephan Ewald

    And our dear leader Angela, the hypocrite. First she nominated herself to be the modern-day Brüning of the Eurozone and now she comments on the good performance of Marine Le Pen with “very worrying”.

  2. F. Beard

    Le Pen’s policies are as you would expect from a far-Right candidate. Patriotism, protectionism, state control all being high on the list. Le Pen has stated she is determined to re-industrialisation of France, reduce immigration to just 10,000 a year, scrap the European common Agricultural Policy and pull France out of the passport-free Schengen zone amongst many other policies. Delusional Economics

    The bust of the boom-bust cycle is a bitch, no? So are we going to abolish it or is it going to abolish (again!) many of us?

    “The issue which has swept down the centuries and which will have to be fought sooner or later is The People vs. The Banks.” – Lord Acton, Historian, 1834

  3. Marcel

    The main problem in the Netherlands is that political parties are unwilling to give up their vested interests.

    It’s starting to look more and more like the US unfortunately; parties more interested in themselves and scoring better in elections (which is what Geert did by blowing up the cabinet), also the very strongly polarized stances on austerity, housing, the immigration problem, the EU and the welfare state.

    That’s why we see lots of votes (about a third in total!) going to PVV (the freedom party) and SP (former communists) and that makes for a very messy political arena. No one wants to form a cabinet with them. If the other large parties would ignore their own interests and would choose the national interest as their focus, we might get something done, but I fear the worst.

    As for calling countries out on voting for “extreme parties”; it’s mostly an anti-vote, because people are fed up with the incompetent regular ones. And it’s easy to promise lots of neat stuff when you don’t have to take responsibility.

    1. Vie de Cafeteria

      “polarized stances on austerity”

      Who is polarizing? Millions of people getting the short end of the stick as it were?

    2. Foppe

      Oh please. Wilders provided ideological cover for Rutte etc. to do whatever they wanted for a year and a half; he has basically supported everything that will affect his voters negatively, with him only withholding his votes on a couple of very high profile issues so as to seem something other than the neoliberal he is.
      Having said that, I don’t really see this going anywhere soon; apart from the SP pretty much the only one who more or less understood why neoliberalism was dangerous was Femke Halsema (who I still would not trust enough to vote for). But she too has left politics, being replaced by the facile neoliberal Jolande Sap, who wouldn’t recognize a legitimate criticism of neoliberal politics if it hit her squarely in the face and waved. Only unknown to me so far is Samsom, who I am not in any way willing to give the benefit of the doubt given Labour’s part in the privatization/deregulation bonanza pushed through in the past 20 years.

      1. Marcel

        That’s the whole point. I don’t care about ideologies. The thing is that the government spends too much. The leftists want to extract more money from the people, which means the middle income group and the right (sorta, hardly comparable with right in the US) want to cut on social services.

        For some stupid reason, no one sees that healthcare needs to be taken down since the costs there are exploding (and just 15% of the increase has to with the aging population). They’re not even mentioning it to the voting public. Just some cheap one-liners about lazy people (right) or “graaiers”/1%ers (left).

        It’s embarrassing to see no one actually take responsibility. We don’t need to do a lot to get budget neutral, apart from cutting healthcare and make sure lots of stupid money wasting practices in government are prevented. There’s a lot of easy wins there, but why aren’t we doing something with them?

        1. Nathanael

          We don’t even need to cut healthcare; we just need to cut waste in healthcare. There’s an obscene amount spent on paperwork (particularly in the US), an large amount spent on unnecessary tests, an very large amount spent on keeping 100-year-olds alive when they’re going to die anyway, etc….

  4. jsmith

    Gee, do you think that the neoliberal co-opting of all of the “left” parties in these countries – socialists, communists, Greens, etc. – could have something to do with the outcomes favoring the hard-right?

    Gee, where was the concern when “socialist” governments completely abandoned their principles and started ushering the neo-liberal economic agenda and now are helping ram austerity down the throats of the populace?

    What do you think people are going to gravitate towards when all of their former political options have been rendered fatuous and the only seemingly still principled party is that of the overt fascists on the far right?

    1. rotter

      Right-Left issues and policy positions in Europe are almost unintelligible to an American who hasnt made a study of them.. Meaning that the many of the issues which are Labled “Left” In the U.S. ( in the U.S. libeled left is more accurate) such as Labor Union activism, or a Social Security system, are often pushed by the Right in France or Italy. Immigration is an issue that breaks down in a simillar way on both sides of the Atlantic.

    2. proximity1


      Those who read the score obtained by the Front National’s Marine LePen as strictly indicating the attachment to exteme xenophobia are getting things very wrong. Much of the vote is due to angry desperation in the face of two amin parties which offer nothing effective for the majority of the public.

      1. Linus Huber

        except history ends now, I do not subscribe to the idea that Japan’s policies have been a success story as yet. I am curious how the next 5 years will develop with the trade balance maybe going negative and the demographic change taking its effect.

        1. Yves Smith Post author

          Japan’s joint commercial real estate and stock market bubbles put out GFC bubble to shame. The Japanese refuse to put out any good data on it but having seem land valuations in Japan and how banks were lending against it, I can guarantee our bubbles were much less bad than theirs.

          20 years later, the worst unemployment they’ve had is 6%. Their social indicators remain the best in the world. I’d trade for that all day.

        2. Nathanael

          Well, I agree that some of Japan’s policies were really disastrous — they NUKED themselves with Fukushima — but their economic safety net / money-printing policies have been remarkably effective.

  5. Foppe

    Allow me to make a few remarks about Wilders and the “freedom party”. Wilders is a former member of the currently largest, economic liberal party (the VVD). Prior to the last elections, the PVV basically carbon copied the (socially conservative) party program from the Socialist Party (which is still pretty much a real socialist party), and successfully pulled quite a few voters from the SP (as well as the second coalition partner, the nominally christian CDA, which has over the past few years entirely amputated its ‘social’ wing). However, apart from on headline issues, the PVV has consistently supported the austerity/Thatcherite programme pushed by the VVD+CDA.
    Now, it is currently utterly unclear to me why he blew up the coalition; maybe he really felt pressure from his voters, but I somehow doubt that. More likely the problem is that his star has been waning, because of the fact that the SP has been gaining projected seats (and airtime), and that politicians and the media are slowly being forced to stop ignoring economic developments as a political topic. Because it seems to me that the main reason the PVV was created, and the main purpose of Wilders’s constant spouting of xenophobic crap, was to prevent the political discussion to shift to matters of political economics (this was, as I see it, the main reason why the VVD & CDA were interested in forming a coalition with him).
    Anyway, we’ll just have to see what happens now… Insofar as I have been following Dutch public discourse lately, it seems to me unlikely that the current crop of politicians are capable of much by way of critical discussion of economic developments, so i’m not going to hold my breath.

  6. Vie de Cafeteria

    Voting doesn’t make a Democracy, but when a racist nationalist is paid for and promoted, the rabid fans buy their tickets. That is some volatile stuff in the big scheme of things. If one’s follows election tsirks in the US, a winger sometimes will go down in defeat to a more middle ground corporate-dem-servant – but before defeat, they’ll start screaming about the death penalty, immigrants, jailing poor people and or bombing something in an attempt to grab some more votes.

  7. Leverage

    Has has been proven time and time again, austerity and depression lead to revolution and political turmoil.

    If something does not change rather fast in Europe, populists governments will start to show everywhere. Here we go again, 30’s all back.

    Politicians, bankers and various sort of speculators have looted the economy, and continue to do so beyond the economy limits. In the process they are destroying the social fabric, the result is very obvious.

    If there are only to ends to this, hopefully this will end up more like the French revolution with bankers hanging from light poles instead of concentration camps for mass murdering of innocent people; though is not looking good.

    1. F. Beard

      If there are only to [sic] ends to this, Leverage

      There is a third, relatively painless way – Steve Keen’s “A Modern Jubilee” plus a ban on further counterfeiting by the banks.

      Or do we prefer unnecessary drama?

      1. Leverage

        No, there are way more than 3 ways to solve the solution. But I’m talking if I had to choose between the two possible “inevitable outcomes” thanks to human stupidity, I would prefer the former instead of lining up innocent people.

        And bear in mind, each second it passes, the probabilities of one of the two bad outcomes is higher than the second before. Nothing has changed to change this until now.

        1. F. Beard

          each second it passes, the probabilities of one of the two bad outcomes is higher than the second before. Leverage

          Not necessarily. The Great Depression and WW II are still living memory in quite a few.

          What’s that saying “Fool me once …”?

          But I disagree that there are many solutions if one is concerned that the solution be just. And if the solution is not just then expect trouble …

          1. Leverage

            F.Beard, that is irrelevant.

            We had ethnic genocides close to the very core of Europe affecting millions just a couple decades ago. Desperation, stupidity and fear are very powerful motivators for human behaviour, and they can shape actions in the most unfortunate ways (you just need some disgusting individuals to start it all, and there is never shortage of these).

            I’m not even taking worst case here, the probabilities of socio-political (in a broad sense) turmoil are increasing, with some countries social fabric in the verge of collapsing. Revolutions or civil wars in some places like Greece are not that unlikely, these countries where close to have had these sort of conflicts not very long ago.

            And about solutions, no point in talking about that when even the basic thing of holding the social fabric together is showing to be an impossible task for the current clueless (or careless) elites. In any case, ‘solving’ a problem could be as well a temporary solution again (a solution for 50 or 70 years) until everything again turns down, or a solution for ‘centuries’ there are varying grades of ‘solutions’ and of changes to the system.

            Voluntary societal changes of the sort of type you ask for will be hard to come by, maybe not impossible, but hard. The US needed several depressions during the XIX cent. to gradually evolve the financial system and as we see it never fixed it though some of these changes were pretty radical (totally changing the previous status quo) compared to the non-changes we have done this time. You probably need a strong motivator for real change, and that means that things will have to get way worse before they get way better. not because i say so, but because that’s what happens in practice all the time if history is to serve as a guide.

          2. F. Beard

            I expect things do have to get a bit worse before they can get better. So SOME drama is apparently necessary.

  8. a crude interest

    Is it really a given that being against immigration is racist? France at 211k sq. miles is a tad smaller than Texas at 269 sq. miles. The population of France is 62 million; Texas 25 million. In other European countries this factor is even greater; Germany is the size of Montana with a population of 82 million. When does physical limitation get to be an objective piece of the equation?

    1. F. Beard

      Is it really a given that being against immigration is racist? a crude interest

      No, it isn’t. But why look for scapegoats when it is obviously the money system that is fault?

      When does physical limitation get to be an objective piece of the equation? a crude interest

      Probably long after this too convenient moment.

      1. sharonsj

        The money system may be at fault, but unchecked illegal immigration brings down wages and benefits and increases expenses (in terms of medical care, education, etc.). So when a regular citizen can’t find a job, either because an illegal or some techie on a visa got it first, or because of insane austerity measures, you’re going to see scapegoating and civil unrest.

        1. F. Beard

          but unchecked illegal immigration brings down wages sharonsj

          Why the heck do so many Americans still depend on wages for a living?

          If the corporations had been ethically financed (by common stock issuance; not loans from the counterfeiting cartel, the banks) most American would be living off the capital appreciation of their common stock.

          What part of “credit creation is counterfeiting” don’t people get?

          I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs. Thomas Jefferson, (Attributed) 3rd president of US (1743 – 1826) [emphasis added]

          1. F. Beard

            The scapegoating is thusly:

            The counterfeiting cartel, the banking system, has driven the population and their governments into onerous debt but the cartel are not the villains. No the villains are:

            1) The old.
            2) The sick.
            3) Immigrants
            4) Labor unions
            5) The poor
            5) Anyone who stands between the banks and their usury.

            There’s your scapegoating.

          2. Synopticist

            You are enrirelly correct about the bankers and their mouthpieces scapegoating.
            However, from a European perspective, there are 2 closelly related questions on which the Right is thriving. The first is immigration, and the second is islam.

            Unlike the US, immigration isn’t in Europe’s DNA. picture in your mind the rage many feel about Mexicans in the US, and double it. Thats how vast numbers of Europeans feel.

            Then, if it’s Muslim mass immmigration, double it again.
            Remember, we generally have a pretty dependable and expensive safety net, which is becoming less popular (largelly in because of the elite scapegoating which you mention), but on which many immigrants (particularly Muslim immigrants), are especially dependent.

          3. F. Beard

            Europeans, like Americans, should be long past the need to work for most of their income. By now they should mostly be independently wealthy and out of debt. The reason they are not is the counterfeiting cartel, the banking system.


            1) Abolish the counterfeiting cartel.
            2) Bailout the entire population (citizens only) till no more debt to it remains.
            3) Enjoy immigrants doing the dirty work while they climb the equity ladder themselves.

    2. Foobar

      Most of Le Pen’s voters are simply pissed off with globalization. Some blame the immigrants, and if just visit the suburbs of large French cities to see why — it’s not safe, and it’s not the same culture. But most of her voters are just pissed off with the rich getting richer, on the backs of the poor. It’s telling that many of Le Pen’s voters also considered voting for Melanchon.

      Now the question is do you vote for the rich schmoozer who has no real talents but who delivers for his rich friends, or for the limp liberal? Chris Hedges is right: the corruption of the liberal class, so that no-one can clearly and strongly articulate the ideas that brought us democracy and human rights, results in cartoon politics. Why is anyone surprised, when the average worker reaches for change, even if it’s portrayed “extreme” by those who are repressing him?

  9. Curlywurly

    Le Pen’s policies are as you would expect from a far-Right candidate. …scrap the European common Agricultural Policy…
    From a right cadidate, yes! Though not from a french far-right candidate. That she intends to scrap the CAP is actually quite surprising me.

  10. Benedict@Large

    There’s no Left left in Europe, at least none of any substantial (and organized) political power. Even Hollande, self-descibed by his choice of parties as a socialist, is merely a left neoliberal, much like DLC Democrats such as Obama, who allow themselves to be tagged with absurd terms normally reserved for the left fringe. The problem is that there is a growing and increasingly intense populist furvor there, inflamed by the continued and expanding greed of the banking sector. This political passion must go somewhere.
    The hard rightists in Europe have simply seized upon the opportunity in a way that the bickering leftists have not.

    We have been here before. It did not end well.

    1. Benedict@Large

      P.S. There was never any way that the hard right Dutch PVV (i.e., Geert Wilders) was going to let the austerity deal go through. PVV is very anti-Euro, and their defection (and the collapse of the Dutch government) was all but insured from the outset.

      Yet again, we find a hard right party in Europe expressing the populist ideas that should be finding a strong voice on the left.

      1. Nathanael

        We can hope that Melenchon’s star rises and that he doesn’t get co-opted. After looking at his history, I have genuine hope for that. He also seems to have spotted that his true opponent is Le Pen, and he also seems to be playing the “long game”, planning well beyond one election. Maybe there’s hope for France….

  11. Don Last

    There are only three solutions to a debt crisis.

    Save and cut spending to pay down the debt.

    Repudiate the debt and default.

    Inflate and debase the currency to deflate the debt in real terms.

    There is no magic growth pill.

    Choose your poison.

    1. F. Beard

      There are only three solutions to a debt crisis Don Last

      Wrong, here’s a fourth:

      1) Forbid any further counterfeiting – so-called “credit creation” – by the banks. This would be massively deflationary by itself as existing credit is paid off with no new credit to replace it.

      2) Send “restitution checks” of new fiat equally to the entire population, including non-debtors, metered to just replace existing credit as it is paid off.

      Since the total money supply (reserves + credit) would not change then neither price inflation nor price deflation should be expected.

  12. Maju

    While obviously the French electoral result is a slap to the hopes of the European Left and a most worrisome evolution towards unviable fascist scenarios that remind of the 1930s for the worst, I fail to find the exact data that gives such a good electoral result to Golden Dawn in Greece.

    The latest pools I have seen gave very poor results to the other far-right party LAOS, which was part of the coalition government for a while, and also to the PASOK which is not anymore one of two parties. In February DIMAR, SYRIZA and KKE competed not for third but for second position after the conservative ND, and not too far behind (each of them separately).

    So I’d like to know the source of that claim for the sudden rise of Golden Dawn, which seems to make no sense whatsoever on light of previous data.

    The Dutch convolution is not bad from the viewpoint of EU, because it weakens the small German bloc. The Netherlands is also suffering serious economic problems, it seems, and that means that we are more and more in a pan-European crisis and not just a peripheral Europe’s crisis. Such a general crisis needs pan-European policies and remedies, not just running everyone around in panic as if they were engulfed in flames.

    The problem of EU is not lack of democracy but lack of political maturity. It’s like everyone went senile almost overnight and can’t think straight anymore. I’m a bit too old to be running around for my life but I may still end up asking for political assylum in Cuba or Bolivia, who knows?

  13. Timothy Gawne

    An interesting article as usual. However, it should be pointed out that conventional political labels are now nearly meaningless.

    For example: traditionally it was the far-right pro-rentier class that favored rapid increases in the population, while it was progressives and liberals that opposed government programs aimed at ‘forcing’ population growth in order to drive wages down. Anybody remember FDR and Samuel Gompers?

    It’s a strange world where the people trying to push down wages and crush unions by flooding the market for labor are ‘leftists’, and the people trying to prevent that and protect a decent standard of living for the average person are ‘far right’.

    Perhaps we need a new and more descriptive terminology. How about pro- or anti- labor?

  14. Systemic Disorder

    In relation to Greece (and this would apply equally to The Netherlands), two thoughts: 1. When the Left leaves a political vacuum, the Right will be the beneficiary; and 2. (sorry if I am repeating myself here but this point is crucial) There is no Greek solution to Greece’s crisis, only a European or international solution.

    The large Center-Left parties of Europe and North America have offered nothing but somewhat less harsh version of what the main parties to the Right of Center have offered. We see the same thing over and over again: U.S. Democratic, Canadian Liberal, British Labour, French Socialist, German SPD, Greek Pasok, etc. etc. I don’t think wringing our hands over “betrayals” does much good; these parties and their counterparts elsewhere are parties completely subsumed within advanced capitalism and they are following the logic of “markets.” Because they have little to offer, there is no incentive to vote for them, other than to keep at bay the even worse alternatives (thus, French socialists are headed back to government only because of Sarkozy).

    If you give people a coherent platform that speaks to their concrete conditions, it will attract votes. But, in the absence of a Left alternative, the simplistic siren songs of the Right (i.e., Le Pen or the “tea party” element in the U.S. Republican Party) will gain popularity. In Greece, the Communists, Syriza and Democratic Left are least trying to offer something concrete, although there is not the level of coherence necessary nor do they seem inclined to work with each or find some common ground. Yes, they do have significant ideological differences, but if these parties are serious about chaging Greece’s course, they will have to reach an agreement or cede to the forces of neoliberalism.

    An international upsurge, coordinated across borders and aiming not at easing austerity or stabilizing neoliberalism but instead putting forth a radical program against the dictatorship of “markets” is the route out of crisis. Not an easy route, yes, but what alternative is there? At least the Greek Left stresses the issues of the European Union’s current undemocratic construct and of unmanagable debt. Ultimately, it will take a movement and not an election to extract us from global economic crisis.

  15. Susan the other

    Globalization has been an experiment, run by and for financier-oligarchs, for the last 50 years. It has not only failed to resolve inequality – the ostensible justification for globalization – it has made it far worse. Question: What if the world had gone nationalist in 1945? Just asking. I’m not much of a Nazi, except that I believe in local economies first and foremost. In all political cycles there is a time-defined position which comes around regularly to resolve the problems of the day. The only thing we should eliminate is homicidal, right-wing skin heads. Marine Le Pen and all the rest of them should be allowed their nationalist solutions. Since globalization has proved itself to be an unmitigated disaster.

    1. Aquifer

      Je suis d’accord ….

      The value of protectionism must be teased away from the isolationism and xenophobia to which too much of the left has insisted it is wedded – a major blind spot in it’s world view, IMO, which has kept it, in turn, wedded to globalization far too long. Protection of a regions resources and people with each nurturing the other in a sustainable manner as domestic policy and aid and transfer of technology to other regions to help them do the same as foreign policy seems to me a pretty good formula for folks and their planet ….

      Though this is, IMO, the best policy for all in the context of the ecological systems we ALL depend on, and could pull the rug out from under the Right, this is considered heresy, i realize, by the Left …

      So much for learning from MN …

      1. Synopticist

        “The value of protectionism must be teased away from the isolationism and xenophobia to which too much of the left has insisted it is wedded – a major blind spot in it’s world view, IMO, which has kept it, in turn, wedded to globalization far too long. ”

        Good point.

        1. Alright Jack

          I dream of a strong European Union that with social security on a regional level that raises tarrifs on environmentally hurtful and even on sweatshop labour produced commodities.

  16. K Ackermann

    European affairs can be laid right at the feet of the IMF.

    How many chances does an organization get to force disasterous policies on countries in crisis?

    At some point, they must be recognized as terrorists.

  17. They didn't leave me a choice

    Anybody else find it hilarious that people still pay attention to what the ratings agencies do or say? It’s the 1930’s v2.0 and people still waste time on this irrelevant bullshit.

  18. mtnplover

    Countries such as Japan, the US, and northern Europe all have the most advanced technology – factories, transportation systems, credit and banking, etc. – and are all facing the same issues: massive government debts with decreasing population and income growth trends that make the debts even more onerous.

    Advanced technology also dramatically reduces the need for labor or makes it easy to outsource the labor to lower wage countries. Even some higher skilled jobs such as law, accounting, and other services can be partially outsourced using the wonder of the internet, 24-hour instant communication, and a growing number of English speakers around the world, especially India with its huge population base.

    In these same “advanced” countries taxes are relatively high and often regressive (payroll, VAT, sales and gas taxes), and housing costs are often quite high. High taxes and high housing costs leave little disposable income for large segments of the population, which reduces economic activity and depresses job creation.

    It’s not surprising a political party would attract some voters by placing blame for the country’s economic decline on foreigners, or that other voters would support a party that wants to continue deficit government spending if it means some of that money finds its way into voters’ pockets.

    A more sustainable and pragmatic approach that could be used in each of these advanced economies that would benefit middle and lower income workers includes:

    1) Slashing taxes on working people (reducing and eliminating regressive payroll, sales and VAT taxes) in exchange for an equal amount of taxes from gross rent income, gross business receipts (turnover tax), and much higher taxes on the biggest earners of intersest and capital gain income (over $250,00 per year); and,

    2) Requiring job-sharing at the largest employers (over 500 workers including governemnts) by offering shorter work-weeks with proportionally reduced benefit packages.

    The first policy puts income directly into the hands of the lower and middle income workers who will spend nearly 100% of it, creating more jobs and economic activity.

    The second policy will create milions of job opportunties what will both drastically reduce the need for government transfer payments (unemployment benefits, Section 8, etc.), and also put dollars into the hands of the currentlyy unemployed and under-employed, who will spend a higher percent of the money on consumption than the workers who opted to work shorter work weeks. A higher consumption percent means more spending on goods and sevices and even more job creation.

    As the economy moves much closer to full employment with these two strategies wages will tend to increase as the worker/job ratio is more in balance.

    For those who argue that businesses would merely move jobs offshore if shorter work weeks were mandated, many jobs can’t be exported (retail, government, locally provided services) and the gross receipts tax (turnover tax) ensures foreign manufacturers pay a fair amount of tax when they want to sell their goods and services back into the large and lucrative US market and domestic companies don’t pay the gross receipts/turnover tax when they ship products outside the US – a huge benefit for US manufacturing companies.

  19. Ed

    “Marine Le Pen and all the rest of them should be allowed their nationalist solutions.”

    I actually agree with this, and I’m going to violate Godwin’s Law, but this was tried in 1932-33. And I think the Nazis were an anomaly in many ways. But if the entire political class/ political elite fails, their failure doesn’t happen in a vacuum, it affects the entire nation. So if you avoid the normal political class, and pull something to power from the fringes, you stand a good risk of getting something uglier, because the failures of the political class has shaped the fringes as well.

    1. Nathanael

      Remember that the elites in Weimar Germany went to extraordinary efforts to destroy the Socialist and Communist Parties of Germany, which were offering real alternatives. This left people who were sick of the elites with the choice of the Nazis. Apparently the elites preferred Nazis to Commies (bad choice since Nazis got the whole country destroyed).

      Similar things happened in Italy when Mussolini got into power; he rode on the back of elite fear of Communists. The Communists would’ve been a lot better in terms of, y’know, less sheer bloodshed.

      I suppose one could excuse people for being paranoid about “communists” while Stalin was running Russia as a classical Russian autocrat. But still, it’s a warning. The German and Italian Communists were far less dangerous than the Nazis and fascists, but which were the elites worried about?

  20. breathless

    So, to refuse to go back living like a caveman in a world dreamed up by Ronald and Margaret when dementia had already kicked in, makes you a lunatic!
    How many countries said no to EU treaty when it was proposed?

  21. RBHoughton

    Well done Yves. You have withheld your own opinion :( but I cannot withhold mine.

    The dynamic between growth and sustainability can have only one result. The longer we delay recognising that the worse it will be for all of us.

    The principle means to profit today is inflation of the money supply, of goods and services. There is nothing else left for business to tax.

    The political establishment in USA seems to have told the moneymen ‘you broke it, you fix it’ whilst the Europeans see an opportunity to make fundamental change. They cannot both be right. I know who my money is with.

  22. Hugh

    The key to understanding Europe’s political future, and ours, is the role elites play in kleptocracy. In the US two party system, the choice is between kleptocracy-enabling candidate A and kleptocracy-enabling candidate B. In Europe, the choice is between kleptocracy-enabling candidates A-G. Just because Europeans have a greater multiplicity of choices does not mean that their choices are any more real than ours. It’s still corrupt elites all the way. Take your pick. Nothing will change, or perhaps I should say nothing will change for the better.

  23. chitown2020

    The global coup de tat has already occurred….! They will never relinquish what they have stolen by secrets, lies, and deception from the 99% willingly. We know they are a fraud but, too many just don’t get it. That is what they are counting on to carry out their ultimate plan of global totalitarianism by creating a global serfdom.

    1. Nathanael

      OF course it is, but because these would-be rulers are idiots, they will destroy themselves.

      What we have to worry about is *more competent* nasty people — like Marine Le Pen — riding to power on the back of the idiocy of the Versailles elites.

  24. Klaus Kastner

    If extremists are lunatics, then this article is incomplete. Mélenchon went from zero to 11,1% whereas Le Pen went from 10,4% to 17,9%.

    Or is the message “he may be a lunatic but he is our lunatic”?

  25. SidFinster

    I don’t know why I keep bothering to say this, but it may be that the polite, liberal, overeducated readers of NC will get the revolution that some so call for.

    If that comes, I can guarantee that they will not like it.

    1. Nathanael

      Who’s calling for it? I haven’t seen anyone here call for it, except perhaps you.

      I’ve been warning that revolution is going to happen UNLESS we manage to get the political elite to behave themselves.

      Of course it’ll suck. But it’s not our choice whether it happens, it’s the elite’s choice. They can provide the required bread and circuses, or they can cause a revolution. It is really entirely up to them.

      Louis XVI could’ve stopped the French Revolution in its tracks by agreeing to the National Assembly budget. Tsar Nicholas could have prevented the Russian Revolution by actually sticking to his 1909 promises about the Duma. Earl Grey, in England, DID stop revolution in its tracks by passing the Reform Bill.

Comments are closed.