The Bewilderness

A depressed, depopulated desert: the southern €zone?

I attended a lecture and book luanch this evening by Gavin Hewitt, BBC Editor for Europe, who has taken time oit to write a tome of contemporary history on the elite proceedings during the current crisis of the €. Hewitt set the stage with some thoughts on the emasculation of leaders, the gradual growth of fears over unemployment and the erosion of an adherence to austerity. 

Hewitt was honest in navigating between positions and showing how some criticisms are shared by both Europhiles and Eurosceptics. The problem is that their answers are different.

Yet, the talk omitted demographics. The depressed Mediterranean is suffering from a declining population with birthrates nowhere near replacement level. A crisis of economic growth was due to hit at some point. Yet, the crisis may have brought the effects of the demographic trap forward by encouraging emigration and creating a structural problem of youth unemployment. This would have crept up on the countries sometime within the next decade. Now that demographic death rattle can be heard within the Eurozone as a depressed depopulated desert becomes one outcome.  

The Brown Bust, 2010 and counting

The money ran out in 2010. So ran a note by a departing Labour Minister: one finale epitaph on that irresponsible administration. Some will call this a lost decade; but better to rename this: Brown's Bust. 

The Guardian sets out a series of welfare changes that come into effect in the next two months. These changes represent a reduction in the amount of benefits received and reduce the scope by which entitlements can be rewarded. This will not reduce the welfare bill; only its rate of increase. The article is entitled by Patrick Wintour, their political editor, as the day that the Coalition changed Britain. 

Rather OTT, as the alternatives are far less palatable. Reduce benefits in Irish or Greek terms and embrace destitution. That day may still come. Have Labour and its slavish press forgotten that the money to pay for their client state must be raised abroad and, if no money is raised, no benefits can be paid.

Labour opened the sluicegates of debt. All else is incidental detail designed to deal with the consequences.   

Cameron should set out his stall in Berlin

How to break news? Especially news that some may view as good and some may view as bad. Even worse when most of your own voters are not that interested and would prefer you to be concentrating on the economy. The general questions prancing round David Cameron's as he wrestles with six impossible Eurosceptics before breakfast. His right wing are (rightly) enraged by puffed up parliamentarians from Germany and some US functionary from the State Department telling us what they would prefer. These people do not get a veto or a vote; and Cameron better not give them one.

The FT (a pink paper if ever there was one) notes that Cameron's timing could upset the Germans and the French. They will be celebrating their postwar treaty and the speech could draw attention away from the day "hundreds of French and German politicians gather in Berlin" to trough away on another taxpayer paid shindig. How dare Britain prevent the media from providing coverage of this extravaganza? I expect it to make page seven (maybe ten) in Bild.

The FT, after the usual roster of anti-referendum Europhiles (Heseltine, MacShane and Cable) also lays out the location: Brussels, perhaps, or the Netherlands. Location, location, location! If we are going to upstage this Franco-German anniversary, why not hold it directly in Berlin at the embassy? If Denis MacShane is right and the relationship is viewed in religious terms, then heresy at the gates appears an appropriate response. We may get as much spluttering and squawking as we have had from the talking heads in this article.

Alas, the carping may be the most exciting aspect of this speech. Cameron will satisfy no-one and will enrage his critics. The compelling message is "Better off out" and all the scaremongering from the relics is nonsense. 

If we leave the EU, we will face declining trade, permanent depression, poverty and mass unemployment ...like Greece, Spain, Portugal, Ireland.....

EU then Asia: the rolling debt death

Mario Monti, in an interview with Der Spiegel kept his phrases light and neutral. He stated that his role was to save Italy from financial ruin and "moral support" from other countries was required, especially from Germany. Dig deeper into Monti's utterances and his assertion that Italy has not received one pfennig from Germany so far ignores the huge liabilities held by the Bundesbank under the Target 2 system. This unauthorised transfer of virtual assets allowed the Italians to stuff European banks and the European Central Bank with debased assets.

Those assets and liabilities will still need to be accounted for as we endure the endgame. The poison has overwhelmed the body corporate and all countries are now infected by the malaise. The European timetable is out of step with the markets. A banking union gameplan will be published in September and finally agreed in December; by this time most of the sovereigns may have choked.

And then the ball will roll eastwards and westwards...

Elections on ice

The European institutions have adopted the very policy positions that spell out the doom that came to Madrid (and Rome, and so on). Incompetence is wedded to demands for greater austerity and banking capital at a time of economic collapse. The Commission twists the touniquet to ensure that more blood spurts out. 

Yet as more countries are taken down for the good of the whole, one does wonder at the strength of the European ideology. An outsider, aware of its flaws and irrationality, expects that the politicians will come to their senses, return to rationality and plot a course that could start to reduce these risks. Yet, they are enchanted by the irreversibility of the project: go forward, never back; except the road has almost run its course and they are out of time. 

The allegiance of all centre parties to Europe will invite extremes. The Greek election was an early example. Other elections will prove more radical in the years to come. If the Europeans prove as competent here as they have in currency union, then we must view democracy in danger, from extremist illiberals and technocrats. Will Europe engineer technocratic suspensions to foil Eurosceptic takeovers; elections on ice until people have again proved their fitness to vote?

Philip Stephens of the Financial Times is one of the misguided Europhiles on the pink organ. Quite the chronicler of Tory failure, his tome from the nineties: "Politics and the Pound", is a timely reminder, if read today, of the mistakes and misguidance that has afflicted this country. The concluding remarks in his book sum up the erroneous assumptions underlying Europhilia and the ideological compass that underpins their reasoning:

Sterling is a useful indicator and an instrument of economic management but the currency markets can be as destructive as they are powerful. For now there seems only the slightest prospect that Britain will join EMU in 1999. A re-elected Conservative government would not survive such a decision. Tony Blair would almost certainly have more pressing priorities. But if the rest of Europe does create a single currency, sterling's future will look bleak. Once again Britain is likely to follow Monnet's advice.  It will watch from the sidelines to see if the venture works and, if it does, will join. Until then politics and the pound are destined to remain dangerously entangled.

The emphasis is upon British reticence, hesitation and cowardice, not upon the pros and cons of a currency union. When your magnetic north is inverted to Brussels, your reasoning does not look ahead but back, from out of your arse. The 'guilty men', who supported this disastrous venture have found any number of excuses for not amending their opinions.

This does not prevent our pygmies from another failure at the G7 (no Putin, so no G8). Strong leadership would demand the orderly dismantling of the currency union into convergent groups. Instead, isolating Angela Merkel, the Anglo-Saxons called for further integration, the mutualisation of debt and the monetary debasement of the Euro. The only response they can give is their own pisspoor stealth inflation and austerity spin. (The UK government is not on the austerity treadmill).

Why should the Germans pay for the debts of others? Their political elite may subscribe to a 'European Germany' and wish to avoid causing the gimps who gave all of their deposits in bad loans from facing the consequences of their actions. The German government have tried to stop bailing out their own banks. Merkel may have forced this poison on Ireland, Portugal, Greece, Spain and the periphery. Now that poison is being thrust upon her.

From Grexnix to Grexit

In 2000AD lore, a grexnix is a churlish person or an ignoramus. It is not clear if they are lower or higher on the list than nonscrots (redefined as nonscrotes, if drunk): nonreaders of 2000AD. For our purposes, the European political classes, as individuals, can be insulted as grexnixes. Why? Because, through their political decisions, they have ruined the lives of Greek nonscrots and forced them into an inevitable Grexit from the Euro. Their status as Grexnix leads inevitably to Grexit.

The backwash from this event is incalculable. Not in the exaggerated drama of overwhelming damage but a practical observation concerning the vast number of overlapping and contradictory warnings handed out about the Eurozone. Believe the best and prepare for the worst?

A Greek exit will cause economic damage. It will destroy confidence in the currency union and a deep recession in the UK. The greater the contagion and subsequent disruption, the more that we should fear the consequences on these islands.

One can muse at the irony. Greece was a latecomer to the welfare state and, like its peers, used debt to fuel its payments. Now, the crisis of late social democracy has been accelerated by the Greater Depression and the downfall of sovereign debt. Welfare liabilities are no longer possible. It is not possible to discern the new forms of government as yet. We can only chart the downfall of the old. 

They did not even mention the FTT...

On Francois Hollande's first day as French President, his goal was to meet with Chancellor Angela Merkel, reaffirming the relationship between France and Germany underpinning the European Union and the Eurozone. One should emphasize relationship, rather than partnership. The latter is fruitful, the former can be abusive.

The two leaders met for talks and a dinner, holding a press conference on their discussions. It is clear that neither was willing to give ground, politely stating their differences. Hollande made the case for Eurobonds, a lender of last resort and renegotiation of the fiscal treaty. Merkel stood her ground on the figleaf of austerity, already clear that the liabilities will overwhelm Germany if the Eurozone falls.

On the day that economic news highlighted the widening divisions within the currency union, both leaders noted that they would agree to disagree. Their sole point of unity was a plea for Greece to remain within the Eurozone and a plea to provide further support; perhaps this formed the majority of their discussion. Growth and austerity become minor points in the maelstrom that would result if contagion flowed through the markets.

To sum up, the discussions confirmed that Hollande and Markel are now bystanders like the rest of us. They have no solutions and the future of their currency union resides in the Greek electorate. They didn't even mention the financial transactions tax (don't want to piss UK and US off?). 

Bank bailout transacted through Greek front

The Telegraph caught up with Euractiv today, reporting that France and Germany would harmonise their corporate taxes on an intergovernmental basis. The pioneering duo hope to provide additional foundations for a Fiscal Union and prevent tax competition. I predict this is one wheeze that will survive a Hollande win, although he may wish to increase taxes against German opposition.

Still, the lunatics remain in charge of the asylum. A second Greek bail-out has been announced alongside some verbiage announcing the transformation of a basket case into a dynamic export driven economy. Potential strengths like tourism are ignored (since they would thrive in devaluation) and emphasis is laid on austerity and privatisation. You know, asset strippers.

Since the economy is now at crisis point, the paper is the final novel in this fantasy trilogy. Their medicine: cut wages, privatise the state and open Greece up to investment. How they will dispel the risk of default, depression and revolution is open to question. 

Such a programme can only be completed with victory for the political elite. Their support is shrivelling by the day. The collapse is priced in, now: duration till the event remains unknowable, but it can't be too long now. Elections in April.

We need questions, not answers

Zero State is a new grouping that has emerged out of the inchoate slew of groups and personnel straddling futurism and transhumanism in the United Kingdom. Following the mutations amongst these associations over the last decade, one could get cynical about the lack of 'take off' one finds in a movement. A similar parallel could be drawn in the quest for liberty.

So, we find that the latest permutation seeks not to mainstream transhumanism, but to embrace the values and broaden participation. Admirable goals, no doubt and mood music to the major focal point of this post. Without quoting from the text, a troubling manifesto was put up for comment on a mailing list as a response to the financial crisis. The first paragraph blamed the financial crisis on capitalism and deliberate actions by a cross-section of government and the richest 1%. The result was that the middle class were paying a redistribution to the rich. The redistribution to the rich exists but I was loath to recognise agency in such a confusing and unknown situation. Within the text, such sentiments did denote class war and the politics of envy; sentiments indistinguishable from any utterance of the Labour Party or the radical left. This led me to think: if we are unable to understand what has occurred so far (since we can read a slew of competing narratives), what would transhumanist interests bring to the table? And I think that this is an important question, since these interests, these values distinguish us from the peddlers of traditional fictions.

One of the key factors of the banks has been a misreading of risk; part of the area that plays into the research on cognitive bias and other factors that can skew thought and action. Should we ensure that there are women traders to break up the dominant effects of testosterone? Should we ensure that all risk officers are women (the mother of all Battles?) Do we need to consider the effect of archaic institutional perspectives on what has occurred? Corporations, regulators and hedge funds all date from the twentieth century. They find it difficult to receive, process and act upon information; the complexities are too tangled in certain circumstances. (That does not prevent us from identifying those companies that were just stupid: loading themselves up on badly rated debt and foudering as a result).

The emphasis should be on questions, not an narratives. Adopt a story and you will instantly slot yourself into an existing narrative; one based on its own assumptions, not the evidence.