(more benign)
Posted on 05/23/2010 1:55:11 PM PDT by bruinbirdman
If Europe’s ultra-Left has so far reaped little dividend from the great "Crisis of Capitalism", this will surely change as the eurozone’s 1930s policies of wage deflation sap the credibility of the governing centre and the EU itself.
The tragedy of the interwar years in Germany was that the Social Democrats - then the world’s foremost socialist party - became fatally tainted by acquiescing in Bruning’s deflation torture from 1930 to 1932. They did so, of course, because they dared not confront the orthodoxies of the Gold Standard.
By then the fixed-exchange mechanism had gone horribly wrong - in much the same way that EMU has gone horribly wrong - because the surplus countries were not recycling demand to maintain equilibrium. It had become a job-destruction machine. The result in Germany was the Reichstag election of July 1932 when the Communists and Nazis won over the half the seats.
As historian Simon Schama wrote over the weekend in the Finanicial Times - "The world teeters on the brink of a new age of rage: we face a tinderbox moment" - there is typically a lag-time between economic shocks and social fury. Luckily there is no Fascist threat this time. It is the (more benign) Marxist Left that stands to gain.
Perma-slump has already chipped at the left flank of the ruling Socialists in Portugal. The Communist Party (PCP) and the Maoists and Trotskyists of the Left Bloc together won 18pc of the vote in September 2009, leaving premier Jose Socrates with the lonely task of enforcing yet more austerity by minority government.
Communist leader Jerónimo de Sousa said last week that the country was being reduced to a "protectorate of Brussels", cowed into submission by financial blackmail. He invoked the civil war in 1383 when the country rallied
(Excerpt) Read more at telegraph.co.uk ...
Government debt is a crisis of capitalism?
wow. I think its quite the opposite.
I agree with AEP that the only possibility the EZ countries have of rescuing their currency is for Germany (mainly) to allow the Germans to spend, and to earn. But in all likelihood they won't. In that case the second best solution would be for Germany to leave the eurozone. That will probably not happen either. The third solution would then be for the PIIGS (all or some) to leave the Euro. However, they will probably not be allowed to. And so, just like in the 30s we will have the worst of all situations.
Unfortunately this paragraph is prophetical I fear:
The North-South divide within EMU has been allowed to go so far that any solution must now be offensive to either side, and therefore will be resisted. The euro is becoming an engine of intra-European tribal hatred. Brilliant work, Monsieur Delors.
Let us not forget Yugoslavia. She was to all intents and purposes a (failed) currency union. Look what happened when the rich and the poor states were not allowed to secede from each other.
Exactly the opposite, but the Eurosocialist mainstream can’t see the forest for the trees.
Capitalism? In the EU?
LOL
It must not be forgotten that socialists still advocate nationalization of entire economies, elimination of capitalist free enterprise.
Add up all profits from all enterprises. Socialists believe that should lower government deficits.
The Obammunist counts on nationalized health industry and insurance profits to zero out increased costs of his scam.
yitbos
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