#2
Hopelessly America-centric perspective. Taiwan will reunify, but it will take 50 years and will be driven by economic intertwinement rather than military assault.
China will likewise move towards a more representative government, but it will take a much longer time than Westerners are used to. The Chinese plan generations ahead.
Germany's Helmut Kohl and France's Francois Mitterrand -- and just about every European leader since -- saw a common currency as essentially a political project, meant to cement European unity and remove the danger of war.
Because of these fears, the euro project was rushed through without key agreement on the common political institutions that would have turned Europe into a truly unified economic zone. As a result, each country follows its own economic policy; Greece spends, while Germany saves.
Harvard economist Martin Feldstein in 1997 argued that the introduction of the euro would lead to major friction within the European Union, because the problems in maintaining a common currency among so many countries would create confrontations and a rebirth of nationalism. Feldstein was right. The current euro crisis has frayed nerves so much that Europeans have become more aggressive and even nationalistic again.
The other fear in 1990 was that, without the euro, a reunified Germany would again dominate the continent. (But)The Germans reformed their economy. Today, instead of being controlled by the French, they are acting independently as they call the shots in an E.U. of 500 million people. The Frogs planned to control Germany within the EU, but Germany controls the markets.
Without the euro, Germany would still be Europe's most powerful country, but it would not have the multiplier of a common currency. Being able to borrow at low German rates helped create real estate bubbles in Spain and Ireland and sent the Greeks and Portuguese on a spending spree.
It is Germany that has profited most from the profligacy of other Europeans, who take 75 percent of its exports. Even if Greece goes bankrupt, those Mercedes and BMWs were bought with cash borrowed from German banks. So without the euro, there would probably have been less conspicuous consumption, and Germany might not have become the powerhouse it is today.
But there could have been another important consequence. Europe might not have contributed as significantly to the 2008 financial crisis. European banks wanted to find higher returns for the profits they were making by lending all that money to Greece and their other southern neighbors. So what did they do? They bought hundreds of billions of dollars worth of subprime mortgages and went through a real crisis in 2007 and 2008.
European banks are now foundering again as their exposure to the government debt of countries such as Greece threatens further big losses. That is partly why central banks in Europe and the United States promised this month to pump more dollars into European banks to help them pay their debts.
And that's the reason Treasury Secretary Timothy Geithner went to Poland to try to jawbone the Europeans into actually doing something about their problems. The One We Have Been Waiting For dispatches his minion to the rescue!
He invited himself to one of the many crisis meetings of European finance ministers, who are looking desperately for ways to calm things down. But Geithner severely misjudged the mood. He was sent packing, with instructions to clean up his own act before giving Europeans unwanted advice.
Geithner's mistake was to think that the ministers were talking about banking or deficits -- or about money at all. They were really still talking about the war and the fears that motivated Kohl and Mitterrand. Geithner didn't understand the secret code. The meeting was not about action but about how best not to do anything drastic. No wonder they're worried - even Belgium is in danger of splitting up.
This is perhaps the most important implication of the way the euro was set up. Rather than being kept free of politics, as was originally intended, management of the currency has become a political football knocked back and forth by the growing resentments between richer and poorer Europeans. The poorer countries reject the austerity measures necessary to meet German standards. The Germans refuse to take the steps necessary to build a true economic community. I wonder what those steps would be, and why the evil Krauts won't just be nice and save Europe?
Instead of acting decisively, as Geithner demanded, European governments feel limited by their commitment to "Europe" to taking small steps that will not endanger the balance within the E.U. This overwhelming fear of internal conflict is the real legacy of World War II, one that has burdened the European Union since its birth in 1957. European politicians may not be experts on finance, but they do know their voters. Doing nothing is better than risking hard-won stability.
Would Europe be better off without the euro? Perhaps. Globalization would have still decimated its weaker economies, and even without the easy borrowing in the euro zone, smaller southern members of the E.U. would probably be facing some sort of economic crisis. But if the euro hadn't been implemented as a political project in a Europe not ready for a common currency, experts could probably clean up such a situation fairly fast. But now, they can't. Because in the end, such decisions are still about the war.
Posted by: Bobby ||
09/25/2011 12:37 ||
Comments ||
Link ||
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#1
The plan for the creation of a "United States of Europe" goes back to the '20s and took a big leap in 1950 with the Steel & Coal treaty. After that everything that has happened since from the Common Market to the Euro has been in aid of a centralized non-democratic European super/pseudo state.
#2
> Even if Greece goes bankrupt, those Mercedes and BMWs were bought with cash borrowed from German banks. So without the euro, there would probably have been less conspicuous consumption, and Germany might not have become the powerhouse it is today.
This is such a stupid thing to say. It's like taking out a loan to smash a window.
#3
The world's economy has been running on smoke and mirrors for 40 years or more. The longer it goes on, the harder the fall, but the laws of mathematics will not be denied.
Europe, the G20, and the global authorities have one last chance to contain the EMU debt crisis with a nuclear solution or abdicate responsibility and watch as the world slides into depression, endangering the benign but fragile order that has taken shape over the last three decades.
#4
It also means food priced out of sight in Africa, and medicines priced out of sight, and trade locked up, and so on. A lot of innocent bystanders are going to die.
Posted by: James ||
09/25/2011 15:52 Comments ||
Top||
#5
It also means food priced out of sight in Africa and Dar.
#9
"It also means food priced out of sight in Africa, and medicines priced out of sight, and trade locked up, and so on. A lot of innocent bystanders are going to die."
And this is different from the way it is now because....?
Posted by: Barbara ||
09/25/2011 20:12 Comments ||
Top||
#10
The world has been sliding into depression and has been on the verge of catastrophe since 2007. There will always be room for a different flavor of global catastrophe brought on by the boundless creativity of the smartest guys in the financial world.
#12
Utterly forgotten in this brouhaha is a simple principle: Banks are supposed to have expertise in preserving capital and managing risk. If they cannot discharge those simple duties, then perhaps they should not be in the business of finance. Most of all, they should not be engaging in behavior that puts taxpayer money at risk. - Barry Ritholz
#13
Another point of view from an ER doc in Portugal: on the other hand Europe without unity and peace means wars and destruction. And that is far more expensive that bailing out countries...
Believe me: our enemy is not Russia, or the US or Wall Street: our enemy is a globalization that gave a Communist Country the power to use its planned economy, slave labour and a artificial low value currency to impose a new world order... The US may have Drones, Aircraft Carriers, Nukes but in fact CHINA is getting its claws on our Democratic System... wake up Free World and never forget you were born in ATHENS, GREECE!
ere is a tally of killings and establishment policies that tell a terrifying tale of state failure.
Over 500 Shia Hazaras have been killed in Balochistan by Sunni extremists in the recent past. Last Tuesday, a bus was waylaid near Quetta by Lashkar-e-Jhangvi terrorists who mowed down 26 Shia passengers in cold blood. A month earlier, a story in this paper had warned that such a massacre was being planned in Quetta by self-avowed "Shia killers" of a "banned" organisation. But it was blithely ignored by the establishment. Two months ago, an extremist leader of a banned organization was set free from prison because the police, witnesses and judge weren't ready to do their duty. As he roams the land, thundering against Shias, the PMLN Punjab government in particular, and the PPP federal government in general, are inclined to make deals with him in order to further their electoral interests in at least 40 local constituencies.
Over 30,000 citizens and 3000 soldiers have lost their lives at the murderous hands of the Tehreek-e-Taliban in the last three years. The Economic Survey 2011 claims this war has cost Pakistan upwards of $60 billion so far, which is nearly one third of our gross national income. FATA is squarely in the hands of Al-Qaeda and various Afghan and Pakistani Taliban and Jihadi outfits. Dir and Chitral in the Northern Areas are now threatened by terrorists seeking sanctuaries and base areas. Many of these groups were once state adjuncts; some are still assets. A few are in the process of reorganizing themselves, collecting funds and flexing their muscle again. The police are either too scared or helpless to do anything since establishment policy is murky. Now the TTP has announced a campaign of suicide attacks and kidnapping-for-ransom in the urban areas of Pakistan. Last week, the Karachi Defence Society house of DIG Police, Aslam Qureshi, was attacked in broad daylight by a truckload of explosives, killing all the guards and passersby. Last month, Shahbaz Taseer, the son of the murdered former Governor of Punjab, Salmaan Taseer, was kidnapped and whisked away to Waziristan. A pamphlet is circulating in Karachi which exhorts the Faithful to target a number of politicians and media-persons and, failing them, their family members. Each intelligence agency has circulated secret lists of targets to governments and mainstream political parties. Assassination is the name of the game.
In Karachi, over 400 people were killed in the most recent wave of inter-party killings over August and September. The MQM is said to have at least 35,000 fully armed cadres who can be called out for action in the blinking of an eye - over 1 million arms licenses are reported to have been issued to them so far. The ANP's Pakhtun supporters don't need arms licenses because they have grown up brandishing Kalashnikovs and TT guns. The PPP's Zulfikar Mirza says he has personally issued 300,000 arms licenses to his Sindhi supporters for combating the MQM. Each of these parties is now allied to Karachi's traditional land, gun and drug mafias that are fattening by the day on the basis of their new political alliances.
In Balochistan, separatist insurgents are attacking the police, Baloch and non-Baloch government functionaries and Punjabi settlers. In retaliation, the Frontier Corps and the intelligence agencies, which are arms of the Pakistan Army, are swooping down on suspects and making them "disappear". A number of armed non-state groups have mysteriously emerged in the province, all proclaiming robust Pakistani patriotism, to abduct and kill Baloch nationalists.
The whole country has become one big killing field.
Under the circumstances, with the police and civilian administrations wringing their hands in despair, there is only one institutional force that can establish the writ of the state and restore law and order. That is the Pakistan Army. But the Army is busy fending off the Americans, neutralizing the Indians, hiding and protecting the Afghan insurgents and fighting the Pakistani Taliban to have any energy or inclination to do any domestic cleansing. Are we therefore doomed?
Not necessarily. The Army's troubles are mainly self-inflicted. If it can bring itself to de-link its raison d'etre (reason to be) from India, if it can conceive national security to have an economic and military dimension in equal measure rather than a military one exclusively, if it can consider national security to be an element of the national interest rather than synonymous with it, if it can stop extrapolating the national interest with core strategic outreach in Afghanistan, then perhaps some of our troubles will go away. In short, if the Pakistan Army can focus on concentrating its energies on securing domestic law and order and internal security instead of monopolising foreign policy within a failed security matrix, we can put our house in order by rooting out terrorism and reviving the economy, thereby giving increasingly desperate Pakistanis a sense of hope in the future.
Here is a tally of killings and establishment policies that tell a terrifying tale of state failure.
Over 500 Shia Hazaras have been killed in Balochistan by Sunni extremists in the recent past. Last Tuesday, a bus was waylaid near Quetta by Lashkar-e-Jhangvi terrorists who mowed down 26 Shia passengers in cold blood. A month earlier, a story in this paper had warned that such a massacre was being planned in Quetta by self-avowed "Shia killers" of a "banned" organisation. But it was blithely ignored by the establishment. Two months ago, an extremist leader of a banned organization was set free from prison because the police, witnesses and judge weren't ready to do their duty. As he roams the land, thundering against Shias, the PMLN Punjab government in particular, and the PPP federal government in general, are inclined to make deals with him in order to further their electoral interests in at least 40 local constituencies.
The whole country has become one big killing field.
Over 30,000 citizens and 3000 soldiers have lost their lives at the murderous hands of the Tehreek-e-Taliban in the last three years. The Economic Survey 2011 claims this war has cost Pakistan upwards of $60 billion so far, which is nearly one third of our gross national income. FATA is squarely in the hands of Al-Qaeda and various Afghan and Pakistani Taliban and Jihadi outfits. Dir and Chitral in the Northern Areas are now threatened by terrorists seeking sanctuaries and base areas. Many of these groups were once state adjuncts; some are still assets. A few are in the process of reorganizing themselves, collecting funds and flexing their muscle again. The police are either too scared or helpless to do anything since establishment policy is murky. Now the TTP has announced a campaign of suicide attacks and kidnapping-for-ransom in the urban areas of Pakistan. Last week, the Karachi Defence Society house of DIG Police, Aslam Qureshi, was attacked in broad daylight by a truckload of explosives, killing all the guards and passersby. Last month, Shahbaz Taseer, the son of the murdered former Governor of Punjab, Salmaan Taseer, was kidnapped and whisked away to Waziristan. A pamphlet is circulating in Karachi which exhorts the Faithful to target a number of politicians and media-persons and, failing them, their family members. Each intelligence agency has circulated secret lists of targets to governments and mainstream political parties. Assassination is the name of the game.
There is only one institutional force that can establish the writ of the state and restore law and order. But the Army is busy fending off the Americans, neutralizing the Indians, hiding and protecting the Afghan insurgents and fighting the Pakistani Taliban to have any energy or inclination to do any domestic cleansing.
In Karachi, over 400 people were killed in the most recent wave of inter-party killings over August and September. The MQM is said to have at least 35,000 fully armed cadres who can be called out for action in the blinking of an eye - over 1 million arms licenses are reported to have been issued to them so far. The ANP's Pakhtun supporters don't need arms licenses because they have grown up brandishing Kalashnikovs and TT guns. The PPP's Zulfikar Mirza says he has personally issued 300,000 arms licenses to his Sindhi supporters for combating the MQM. Each of these parties is now allied to Karachi's traditional land, gun and drug mafias that are fattening by the day on the basis of their new political alliances.
In Balochistan, separatist insurgents are attacking the police, Baloch and non-Baloch government functionaries and Punjabi settlers. In retaliation, the Frontier Corps and the intelligence agencies, which are arms of the Pakistan Army, are swooping down on suspects and making them "disappear". A number of armed non-state groups have mysteriously emerged in the province, all proclaiming robust Pakistani patriotism, to abduct and kill Baloch nationalists.
The whole country has become one big killing field.
Under the circumstances, with the police and civilian administrations wringing their hands in despair, there is only one institutional force that can establish the writ of the state and restore law and order. That is the Pakistan Army. But the Army is busy fending off the Americans, neutralizing the Indians, hiding and protecting the Afghan insurgents and fighting the Pakistani Taliban to have any energy or inclination to do any domestic cleansing. Are we therefore doomed?
Not necessarily. The Army's troubles are mainly self-inflicted. If it can bring itself to de-link its raison d'etre (reason to be) from India, if it can conceive national security to have an economic and military dimension in equal measure rather than a military one exclusively, if it can consider national security to be an element of the national interest rather than synonymous with it, if it can stop extrapolating the national interest with core strategic outreach in Afghanistan, then perhaps some of our troubles will go away. In short, if the Pakistan Army can focus on concentrating its energies on securing domestic law and order and internal security instead of monopolising foreign policy within a failed security matrix, we can put our house in order by rooting out terrorism and reviving the economy, thereby giving increasingly desperate Pakistanis a sense of hope in the future.
But now the pretence has dropped. In private, circles close to the establishment readily admit what they used to dance around before: the Haqqanis are our assets; they are our boys; they are the ace up our sleeves.
A multi-volume chronology and reference guide set detailing three years of the Mexican Drug War between 2010 and 2012.
Rantburg.com and borderlandbeat.com correspondent and author Chris Covert presents his first non-fiction work detailing
the drug and gang related violence in Mexico.
Chris gives us Mexican press dispatches of drug and gang war violence
over three years, presented in a multi volume set intended to chronicle the death, violence and mayhem which has
dominated Mexico for six years.
Rantburg was assembled from recycled algorithms in the United States of America. No
trees were destroyed in the production of this weblog. We did hurt some, though. Sorry.
And that's the reason Treasury Secretary Timothy Geithner went to Poland to try to jawbone the Europeans into actually doing something about their problems. 
But now the pretence has dropped. In private, circles close to the establishment readily admit what they used to dance around before: the Haqqanis are our assets; they are our boys; they are the ace up our sleeves.
