Eurozone Breakup Coming
Telegraph writer Jeremy Warner moans Soon, There Won’t be a Europe to be Part Of.
“It’s not a question of in or out, but of whether Britain can avoid the flames of destruction,” says Warner.
On that I certainly agree. In general, Warner has the “what’s happening” part correct has but his synopsis of what to do about things is exactly the same tried-and-failed Keynesian and monetarist clatrap the Telegraph always sponsors.
Warner’s nonsense culminates with “It is an economic truth pretty much universally acknowledged that you cannot deflate your way out of a debt trap, yet it seems entirely lost on the eurozone high command.”
Europe is really attempting deflate? Really? In what alternate universe?
Debt Trap Nonsense
The entire notion there is such a thing as a “debt trap” is a Keynesian-sponsored fallacy.
The facts of the matter are simple:
- Central bank Monetarists in conjunction with Keynesian fiscal fools created the “debt problem” with absurd inflationary policies.
- Now that debt-bubbles have burst, Jeremy Warner, like his Telegraph counterpart, Ambrose Evans-Pritchard and multitudes of writers and academics, expect the same polices that created the debt problem to cure it!
Attempts to inflate out of alleged “debt traps” are nothing more than absurd can-kicking exercises that defy common sense. Japan is real-life proof.
Rise of the Eurosceptics
Let’s leave the “why” and the “what to do about things” aside and instead focus on Warner’s perception of what is happening right now on the eurosceptic front.
Across the continent, traditional centrist politics are in a state of meltdown. Nowhere is this more apparent than in Spain, where a radical Left party that didn’t even exist 10 months ago is now topping the polls. Ill-judged attempts by the Rajoy government to use the crisis as a means of strengthening Madrid’s grip on the country have meanwhile reignited Spain’s centuries old centrifugal forces. It’s not just the Catalans who threaten to break away.
What goes for Spain is just a proxy for Europe as a whole, where attempts to impose fiscal discipline from the centre have resulted only in growing public alienation and anger. In France, the polls are led by an anti-European crypto-fascist with a Left-wing agenda that makes even the disastrous François Hollande look moderate.
In Italy, the only viable alternative to the beleaguered Matteo Renzi is a professional comedian, Beppe Grillo, with no apparent policies at all, or few that make any sense. Even in Germany, the protest vote is fast gaining momentum. As with Ukip, Alternativ für Deutschland has taken off like a rocket since it widened its appeal from the single purpose of bringing back the beloved Deutschmark to an anti-immigrant, law and order, agenda.
Brainwashing Messages and Fake Tories
In the Telegraph comment section, “Richard N” offers this accurate assessment of what Warner wrote.
To say Grillo’s party doesn’t have any policies is just stupid: he is expending most of his time and energy – very noisily – on getting a referendum on Italy leaving the euro.
He says that Italy’s desperate financial straights are due in large part to being in the euro. That is a policy – and an eminently sensible one for Italy.
As for Le Pen being a crypto-fascist – that’s an equally stupid thing to say. She is a left-wing nationalist – it’s that simple.
You guys at the Telegraph do the same thing as the fake eurosceptic MPs in the Tory party – mouth the eurosceptic stuff – but inject the EU’s brainwashing messages in between the lines, to attack those new political parties which threaten the power of the incompetent, power-hungry goons running the EU.
Keynesian and Monetarist Silliness
Actually, its not just brainwashing efforts by the EU, but also by central banks, politicians who want more taxes and more spending, academics like Paul Krugman, and monetarists such as Ambrose Evans-Pritchard and Harvard professor Greg Mankiw.
- Harvard Professor Greg Mankiw wins the prize for making the most inane monetarist proposal in history. Mankiw proposed that 10% of money be made worthless every year via a lottery in which the the Fed would pull a number out of a hat each year and all currency ending in the digit drawn would immediately be worthless. I called Mankiw out in Economist Mankiw Defends Policy of Theft
- Ambrose Evans-Pritchard also constantly sings a preposterous monetarist tune. For example, please see Monetarists Accuse ECB of “Dangerous Game of Chicken”; The REAL Dangerous Game
- While on the subject of foolish economic policies, I have yet heard a reply to my October 19 Challenge to Keynesians “Prove Rising Prices Provide an Overall Economic Benefit”
Status Quo is Dead
Aside from the ad hominum and personal attacks, Warner has the eurosceptic trend correct. His conclusion is also accurate:
“The European Union is failing. Whether we are in or out scarcely seems to matter any more. In imagining it does, many of our leading businesses and politicians are woefully behind the curve. Something will eventually emerge from the wreckage. But whatever it is, it won’t be the status quo.“
Indeed. Something will emerge from the inevitable wreckage, and it will not be the status quo.
On one hand, that’s encouraging. However, I must warn: never underestimate the propensity of central bankers and politicians to make matters worse, with Keynesian and Monetarist fools cheering every step of the way.
Mike “Mish” Shedlock