“New Economics” Europe’s Fraud

We, and in particular Europe, have been led by fraudsters. Sometimes it takes courage to say it, to denounce fraud. Ed Milliband, the Labor Leader just rightly accused the anti-European politician Lafarge (head of UKIP) to be a fraud, to his face, because leaving the European Union would ruin Britain.

Right. The problem with the EU, though, is that the politics there has been a fraud. Since the 2008 crisis, the USA government injected 8 trillion dollars in the economy. The Eurozone, with the same population, injected only one trillion (the UK did in between).

Europe Is Recovering Worse In the 2010s Than In The 1930s

Another editorial of Paul Krugman asserting that the USA pulled out of the 2008 crisis with standard economics (which Krugman and his kind call Keynesianism, although historical examples are as old as Themistocles’ Athens and even Darius’ Persia. The modern version is assuredly from Henri IV of France and his fiancé minister Sully, around 1600 CE).

“That Old-Time Economics

BRUSSELS — America has yet to achieve a full recovery from the effects of the 2008 financial crisis. Still, it seems fair to say that we’ve made up much, though by no means all, of the lost ground.

But you can’t say the same about the Eurozone, where real G.D.P. per capita is still lower than it was in 2007, and 10 percent or more below where it was supposed to be by now. This is worse than Europe’s track record during the 1930s.”

Says Krugman: “I’ve been revisiting economic policy debates since 2008, and what stands out from around 2010 onward is the huge divergence in thinking that emerged between the United States and Europe. In America, the White House and the Federal Reserve mainly stayed faithful to standard Keynesian economics. The Obama administration wasted a lot of time and effort pursuing a so-called Grand Bargain on the budget, but it continued to believe in the textbook proposition that deficit spending is actually a good thing in a depressed economy. Meanwhile, the Fed ignored ominous warnings that it was “debasing the dollar,” sticking with the view that its low-interest-rate policies wouldn’t cause inflation as long as unemployment remained high.

In Europe, by contrast, policy makers were ready and eager to throw textbook economics out the window in favor of new approaches. The European Commission, headquartered here in Brussels, eagerly seized upon supposed evidence for “expansionary austerity,” rejecting the conventional case for deficit spending in favor of the claim that slashing spending in a depressed economy actually creates jobs, because it boosts confidence. Meanwhile, the European Central Bank took inflation warnings to heart and raised interest rates in 2011”

One has to look at whom the “new economic thinking” profited: high finance, whose power and wealth has grown enormously.

The European leadership, from the central bank to the European Commission, is full of people who made stints in High Finance hedge funds, companies (conspiracies such as Goldman Sachs: heads of the European Central Bank, and even Italy, and many EC commissioners, where partners there.) Or maybe they were in banks (such as Rothschild, see young Macron the French finance minster) , or hope to do so some day (and often, some more). This phenomenon is even more marked in Europe than in the USA.

Krugman is not as accusatory: he cannot insult those he meets all the time, and is supposed to mingle with.

“…while European policy makers may have imagined that they were showing a praiseworthy openness to new economic ideas, the economists they chose to listen to were those telling them what they wanted to hear. They sought justifications for the harsh policies they were determined, for political and ideological reasons, to impose on debtor nations; they lionized economists, like Harvard’s Alberto Alesina, Carmen Reinhart, and Kenneth Rogoff, who seemed to offer that justification. As it turned out, however, all that exciting new research was deeply flawed, one way or another”

We have seen that story before: in the 1990s, Harvard economists gave self-interested advice to Yelstin, which destroyed the Russian economy, and paved the road for Putin’s reaction.

In Germany, an aging population has built several causal loops favorable to the present situation of austerity. Some are major UN-SAID (French: Non-Dit, what is not said, religiously).

For example the (relatively recent) German European supremacy necessitates immigration, and the latter is (wisely) encouraged by the Chancellor (who is aware of the dearth of reproduction by Native Germans). So the real German discourse, behind closed doors, is different from the official one (which makes little sense, especially considering how poorly Germany was doing ten years ago; a super low Euro, and Germany running deficits above 3% then helped).

Hence imposing “new economics” on Europe was not due to chance, but to forces below the surface. They have nothing to do with better economics for the majority.

Empires have known, for millennia, that, to be prosperous, they need everybody to work. Europe does not want to know that, because it is not thought of as an empire. Instead it is still thought of as a “common market”, and a “free” one, at that. In the USA, the government governs an empire and knows unemployment is intolerable, no matter what. So the Fed gave enough money for banks’ lending.

What Europe needs right away, before switching to real, more direct democracy, is to get better leaders, such as Ed Miliband, the UK Labor Leader, who had the courage to tell the truth about Europe (Europe is good for Britain). We don’t need liars like the UKIP (UK Independence Party), or like the UK Conservatives (who want to conserve the money power for their call, by not taxing revenues of their own, as long as they are overseas, even when the overseas presence is just make-believe… Labor wants to change that).

Tax evasion by the hyper rich and their corporations is part of the reasons both necessary and sufficient for imposing austerity on those who are not hyper rich.

However, when the 99% shrink financially, economically, an in their democratic power, so does the economy, and the society. And the democracy.

Patrice Ayme’

Tags: Austerity, Economy, EU, Fraud, Krugman, USA