“Great Latvian Success Story!”

You too can be an IMF success story if you grind your population into penury by wearing the austerian hairshirt. And this little video (hat tip Nathan) has to skip over capture some of the extreme measures operating in Latvia, such as bankers taking souls as collateral for loans.

As Warren Mosler noted today in “The Eurozone Torture Chamber”:

Publicly, at least, they all still think the problem in the euro zone is that the public debts/deficits are too high. And to reduce debt the member nations need to cut spending and/or hike taxes, either immediately or down the road.

A good economy with rising debt and ECB support to keep it all going isn’t even a consideration.

They’ve painted themselves into an ideological corner.

And deficit spending, exacerbated by austerity, may nonetheless be high enough for it all to muddle through at current (deplorable) levels of economic performance.

This economic ‘torture chamber’ of mass unemployment can, operationally, persist indefinitely, even as, politically, it’s showing signs of coming apart.

The founders of the euro believed a single currency would work to prevent a third great war.

So they did what it took politically to get the consensus needed to create the euro. Ironically not realizing what they created to promote unity has turned out to be the instrument of social disintegration.

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  1. Maju

    Yeah, growing a 5% after collapsing 25%, “only” 15% unemployment after being at 20% levels, 10% of workers out of the country, the state reduced to a police station with annex jail…

    “Success!” :D

    That’s what they are trying to apply through Europe. Great video, thanks Yves.

  2. old.frt

    Real life in Elbonia.
    Is good!
    Let us ‘splain it to you.
    Never fear, we have ways to make you like it!
    Senior Wences, where are you now that we need you?

  3. F. Beard

    Wow! Communism must really suck that the Latavians would prefer Austerian insanity to it.

    Let that be a lesson for Leftists?

    1. Sue

      I think you can rest assured that Latvians didn’t have a choice either way.

      And what, really, is the difference between Communism and the rule of the 1% (banks)? The government forms a party at the top for insiders, controls the corporations and all forms of work, and endeavors to keep the labor pool in perpetual (low) wage slavery while spouting propaganda that it is all for your own good….

      The whole communists vs capitalist argument is a crock. There are only the insiders at the top and the rest of us doing the work at the bottom (if lucky) for slave wages.

      1. F. Beard

        And what, really, is the difference between Communism and the rule of the 1% (banks)? Sue

        Probably only the level of centralization with the Communists being far more centralized; I note that even the Commies had credit creation.

        1. Sue


          I think what we really need is a new lexicon. Capitalism hasn’t been seen in the EU or US for a long time. Jamie Dimon is not a capitalist.

          The word we need to use is “oligarchy” or “plutocracy.”

          As the great Adam Smith warned us: many capitalists will get rich under this system. Unchecked, they will then use their power to destroy the system in order to perpetuate their spot at the top and eliminate the competition, thereby ushering in oligarchy.

          1. F. Beard

            Credit creation allows the so-called “credit-worthy” to steal purchasing power from everyone else YET our money system is based on it. One need look no further for unjust wealth inequality.

  4. avata

    So, what’s is a success story in your mind? China’s empty towns? USA printing money and living on a debt?

    1. F. Beard

      Money printing does not require borrowing. Bill Mitchell calls borrowing by a monetary sovereign “corporate welfare.”

      Let’s end that welfare for the rich, eh?

    2. Andrew

      Yeah right…. China has a few empty towns in remote sidelined regions, they also have breakneck GDP growth and rising living standards.

      Spain is chock full of empty towns, rising unemployment and plummeting living standards …. Some success story this capitalism thing.

  5. Ignacio

    Whenever they can pick any apparent good news from these countries following more or less strictly neoliberal/FMI recipes they will be used as an example from the neolib advertisement apparatus.

    Even if it as symplistic and easily debunked as the latvian example they will try again and again and their ideas will still get some social traction because there isn’t a symmetric propaganda apparatus against this one.

  6. They didn't leave me a choice

    I don’t know if my stomach cramps were caused by the video, but the correlation was impeccable. To think this horror is happening just a few hundred kilometers away, there is nothing I can do about it, and as long as we remain in the eurozone, the same horrors are coming for us as well, the thought just makes me scared. Neoliberals must be exterminated, they are a blight upon mankind. Kill them all. Without mercy. That’s the only way to make sure we can purge mankind of their absolute evil.

    1. Jumpjet

      Agreed. The people at the top- the ones who push such suffering upon the masses- are vile, reprehensible, lacking any of the qualities normally associated with human beings.

      They should be treated with extreme prejudice.

  7. bg

    Keynsian sour grapes. Follow Icelands lead. Eliminate the sick banks, write off all the bad personal debt,leave the euro.

  8. Nalu Girl

    Naomi Klein laid this all out in “The Shock Doctrine” quite a few years ago. Push debt on a country, call for austerity, privatize by selling off infrastructure to your banker and corporate buddies so they can raise prices on essentials, rinse and repeat. This has been going on in central and south America for decades. It’s now showing it’s evil Friedmanian head in the US with the privatization of schools and prisons. The 1percent won’t rest until the have it all.
    I live in Arizona and in the past few years our state government, all branches of which are controlled by extreme right wing Republicans have been following this agenda. They have “swept” money from the mortgage settlements which were supposed to help underwater homeowners, to pay for more private prisons, they have shut down state parks and tried to sell them off, they give a large tax deduction to those who contribute to private school “scholarships”…. The list goes on and on. If you want to live in a Milton Friedman paradise, move here. Personally I think Milton Friedman was the antiChrist.

        1. stripes

          Whoever ushers in the microchip fix for fraud is the antichrist. A news report the other day said so far Obama has not denied he is the antichrist. Will it be the Vatican gold backed dollar….? the World Tax ? or Obamacare?…Beware and reject any and all fixes for fraud. Abolish the FED…..!

          1. psychohistorian

            How about,

            Nationalize the FED


            We need an organization like it but the directorship needs to be the 99% and not the 1%.

          2. stripes

            They should be audited and put into receivership to the U.S. TREASURY DEPT. They owe US gagillions. The ongoing bailouts of this failed institution is not only criminal. It is the only real danger to our national security. We have been hijacked by financial terrorists.

    1. stripes

      The antichrist has yet to be revealed. That will bring on Armageddon according to the Bible.

      1. stripes

        Here is a link to a very informative article by elite whistleblower Fritz Springmeier. It lays out the plan by the “elite” to bring on Armageddon… The article is entitled: To Love or Hate-Know Your Enemy…….. http://www.whale.to/b/sp/sa.html

  9. steve from virginia

    “The founders of the euro believed a single currency would work to prevent a third great war.”

    No, the founders of the euro had three things in mind:

    – create a captive market for mercantile countries starting with France, which hoped to become Europe’s economic powerhouse,

    – bring an end to intra-European customs duties and exchange rates,

    – install an energy price hedge: a single currency would eliminate the need to first buy 3d party currencies in order to buy imported fuel.

    – The euro was a fuel price hedge similar to outsourcing jobs to cheap-labor countries, asset price ‘bubbles’ and increasing credit (alternative to hard euro). The euro was to be a hard by way of internal rules regarding deficits and fixed internal exchange rates.

    The report card:

    – The euro rewarded mercantile state however Germany became the economic powerhouse from being Europe’s ‘sick man’: C-

    – The customs union benefitted financiers at the expense of everyone else, the euro became a subprime mortgage: F

    – The hard euro gave Europeans a fuel bargain for awhile: Germany and France could sell cars, other countries could increase fuel taxes and enjoy the spread. Now, the bargain is gone, the euro is too damned hard: C+

    – The fuel price hedges were all failures as fuel depletion trumps everything. What is underway in Europe and elsewhere is conservation by other means. The establishments in all countries deny reality and pretend the depletion/conservation issues can be either hedged or negotiated: F-

    Countries and citizens will all find out the hard way the cost of modernity and unlimited mechanical convenience as all these things are taken away …

  10. emptyfull


    Angie’s looking very tired don’t you think? Nervous, like she knows the stakes now and is not absolutely confident she can handle the weight.

    I’m still guessing the Germans are working on a new constitutional order for Europe, with something approaching a full-fledged Federal structure and very strict economic rules. They will need such a union to keep Spain and Italy from burning. But Greece will be the object lesson. Like Lehman, it will have to be sacrificed in order to create a crisis dramatic enough to make the old assumptions about what is necessary shift for everyone. Then we will see a genuinely epic political struggle over the shape of the United States of Europe (with Germany trying to force its vision on other reeling countries).

    I don’t think there’s a chance that they’ll pull this off in the end, however.

    1. Andrew

      They want to hard wire the other Euro countries constitutions so they have to run balanced Government budgets. If a country wants sustainable growth they will have to turn into a mercantilist export surplus state just like Germany.

      We will then have to endure the comedy of watching them all try to run a current account surplus at the same time.

      It’s a common conceit to define the criteria of success in ones own image.

  11. Rick

    I saw a Russia Today documentary about Latvia recently and it is very sad. I mean the country, both the countryside and town, is dead, basically. The story is the same where ever you look at the former Soviet Union, who followed the advice of U.S. economists on how to go about creating market economies. There is very little blame pointed towards neo-liberalism in the U.S. media for the awful outcomes in the former Soviet Union. If it were the outher way around and nominally communist governments were producing these kinds of economic results, we would not only know about it but, but economists and pundits would be citing it as a reason for declaring communism a failure.

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