Thanks for visiting this blog, created in July 2012 out of great concern for the fate of the €uro currency area, once again on the verge of collapse due to the economically ill-advised and heartless austerity policies imposed on Greece, Spain and other heavily-indebted €uro area countries by a christian democratic German chancellor impressed with the budgeting skills of Schwabian housewives. Meant to reduce the public debt and put the countries back on a path to economic growth, these macro-economically idiotic policies are doing anything but cause "pointless misery" as Paul Krugman so aptly describes it (Bloomberg, July 23-29, 2012).

Instead of reducing public debt, the austerity measures set in motion a vicious cycle of economic contraction, rising unemployment and poverty, lower tax revenues, private capital flight, and rising public debt shares as the economy declines faster than the public debt. What’s more, the austerity-driven ‘blood, sweat and tears’ policies recommended to the European periphery derive from the same economic doctrine that brought us to the brink of disaster in 2008. These policies are not only misanthropic and counterproductive to economic growth and debt reduction in Europe, but will prove explosive for the €uro currency area unless a drastic change of course takes place - and soon.

While I do not pretend to have ‘the’ solution for the €uro crisis, I would like to offer alternative economic perspectives and views on current events, and hope to chart a more humane path toward a balanced, socially fair, and sustainable economic future for the €uro area.

On the origins of the 2008 Great Financial Crisis:
90+% of traders are men, and they bet all of our bank deposits on liar loans which froze credit leading to 40% average losses passed on to ordinary taxpayers; then begged for trillion-dollar bailouts upon which they paid themselves 50% higher boni.”


Thursday, October 3, 2013

The Evil Empire Strikes Again (update)

No, I’m not talking about Iran, nor Irak or Al Qaeda. I am talking about powerful corporate & financial interest groups that do not know any country loyalty nor follow any universally accepted moral code. Their only code is the rate of return on their investments. To safeguard their investment returns, they fight against anything and everything that might reduce them, esp. taxes, labor costs and the cost of social welfare. --> see the Tea Party crazies in the US right now, risking a default and an economic catastrophy in their own country because they don't accept the already approved national healthcare plan (vulgo: Obama care) that provides health insurance to millions of currently uninsured Americans who cannot afford market-based coverage.


These interest groups have been very active during the national election campaign in Germany and are still very active now, as Merkel’s victorious conservative block of CDU and CSU starts explorative talks for coalition negotiations with either the social democrats SPD and/or the Greens:
  • Shortly after the CDU’s Mr. Schäuble made a step toward the SPD, the potential partner in a grand coalition, by announcing that his party might consider tax increases, a huge PR campaign broke out against tax increases so that the CDU had to disclaim Mr. Schäuble’s statement. And so, while German schools and public libraries crumble, the explorative coalition talks begin this week with the slogan “Absolutely no tax increases, under any condition !” Doesn’t this phrase sound eerily familiar, esp. to US-Americans ? Seems like the evil empire operates on both sides of the pond.

  • Even more blatant was the most recent lobby work of the evil empire: yesterday, the employer-financed initiative Neue Soziale Marktwirtschaft presented their reform program for Germany. They named it "Chance 2020" ! Not Agenda 2020, to prevent the negative connotation to the much maligned Agenda 2010, but "Chance" 2020 as chance has a much more positive ring to it ! Excellent PR if it weren't so obvious.....


    Also obvious and predictable is the employer- and investor-friendly supply-side gist of the reform program that clearly caters to the demands of the evil empire. "Chance 2020" calls for:
    • lower taxes
    • lower public debt, but without tax increases
    • a smaller public sector
    • lower non-labor costs through reductions of social insurance programs 
    • the minimization of social welfare programs focused only on those who cannot work
    • NO minimum wage
    • no publicly financed early retirement
    • no EU aid for highly indebted euro nations
    • and many more tortures, pardon: reforms.

Not surprisingly, one of the key authors of "Chance 2020" is Wolfgang Clement, former economics and labor minister under chancellor Schroeder (1998-2005) and a key contributor to Agenda 2010. Mr. Clement views the reform program as an opportunity for the victorious conservative parties to distance themselves from election campaign promises. 
Yesterday's presentation, however, is only the start of a major PR initiative that will 'guide' the upcoming coalition negotiations. INSM director Pellengahr already announced that the reform program will be advertized in major news papers and street posters. If necessary, INSM may also put targeted pressure on unyielding politicians some of whose election campaign was financed by the same employer groups as those that finance the INSM (e.g.
the electro and metal industry employer organization contributed €60.000 to the CDU of North-Rhine Westphalia, the largest and most industrial Bundesland in Germany).
Meanwhile, the Greens beat themselves up about their election proposal for tax increases because they think it explains their 3%age point election loss, ignoring the fact that their polling numbers did not only NOT decline after their proposal went public, they actually increased by 1-2%age points! They also ignore the fact that the majority of Germans are in favor of tax increases on higher incomes as well as a special wealth tax (see M. Hartmann,“Soziale Gerechtigkeit und die deutschen Eliten”).

What really damaged the Greens was not their tax proposals but the untimely 'veggie day' proposal and the disgusting 30-year old pedophile stories dug up by the evil empire, PLUS the blocking of their only power option by conservative alpha males of the SPD and the Greens. As I pointed out in my posts of September 1 and September 8, the largest voter group, namely women over 50, viewed this macho attitude as childish and undemocratic, with the result that they voted for the level-headed and sober-minded Angela Merkel. 

Oh and, speaking of veggie day ! Take a look at the following video and decide whether you really are happy living in a world governed by the evil empire: If not, do something about it ! You decide !


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