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The saddest failure of European economics is in John production. Europe has produced neither a John Maynard Keynes to haul bankers down from their thrones nor a John Kenneth Galbraith to portray the crude nastiness of capitalism in their true light. Result? Bankers have dominated European economics and turned it into medicine not betterment, and certainly not entertainment.
In fact their economics is a throwback to the 1920s before Keynes deconstructed it. Euro-Bankers still hanker after the gold standard. They impose the priorities of another age, as if Montague Norman had been reincarnated at the Bundesbank. No one has written The Economic Consequences of Jean Claude Trichet to expose the whole regime to ridicule as Keynes did with Churchill.
Post-war hopes for betterment in European countries turned in the direction of a European Superstate. The people didn’t particularly want it. So it had to be an elite construction. The elites Euro building instruments were capitalism and Finance. Capitalism, not the people, was empowered in the Treaty of Rome. Then bankers were enthroned over both in the Treaty of Maastricht and the Euro.
Bankers Rule. Not OK. Never could be in fact. The priority of bankers is to fight inflation not get growth, which they fear as destabilising. Their instincts are deflationary. Their aims are to keep interest rates high (bankers love that, can’t think why) and keep the exchange rate as high as possible, like a phallic symbol: proud when it’s hard. European bankers couple these sins of the breed with a lust to revenge themselves on the Americans and the dollar by making the euro the strongest reserve currency a strategy. That points to disaster. The dollar will fall – it must because of their huge trade deficit. That will bring floods of funny money into the Euro, pushing it to even more disastrous highs.
Bankers' hubris is a deadly disease which leads to total contempt for the people. Their responsibilities are limited to helping the economy by enduring unemployment. The hubris also produces an even greater contempt for politicians who bankers see as prone to please the people, debase the currency, debauch the economy, reduce interest rates and enthrone the reign of sin. Or go for even worse Keynesianism, growth and prosperity. Politicians may be useful for building or, better still, cleaning drains. They can't possibly be trusted with power. That's for the Bankers.
Enthrone all that lot and what do you get? Europe today. There are benefits for small countries because the interest rate premium they paid for smallness is gone so Ireland Greece, even Spain, are bowling along. Yet for big, grown up, economies and the great majority of the people the result is disaster. The French can riot, the German unions demand, the Italians switch from one set of crooks to another, but no one can bring down unemployment, simply because they can't boost demand, borrow or spend. The only real strategy open to governments is "reform". That basically means cutting welfare, wages and public spending, firing workers and generally embarking on Merkel deflations.
In the good old days of full employment and high growth the Germans kept the D Mark low to keep exports pounding out. Can't now. France and Italy periodically devalued to boost demand and accelerate growth. Can't now. Business invested and expanded production for export led growth. Can't now. In fact the smarter capitalists, rather than sit around to face the limitless future of misery Bankernomics offers them, are shifting as much as possible overseas. The interests of bankers are quite distinct from those of capitalism, workers, politicians or the people.
Of course all we losers can't be told that. So we're enrolled in a "battle against inflation". This excuses misery by a fight against a dead enemy in the same way as the politicians proclaim the "war against terrorism" to excuse repressive measures and the loss of civil liberties. So here we all are then, just as Orwell described life in 1984, mobilised to fight unwinnable wars against invisible enemies in order to distract attention from the misery, unemployment and alienation all around. That's Bankers' Europe. The two Johns would have had fun pointing all that out but it just makes me want to cry. |
