How Not to Solve a Problem (the Eurozone Crises)

There is widespread consensus among economists and politicians that the Eurozone needs to do more in order to help the countries that cannot repay their debts (that’s what it is, in simple words). Historians beg to disagree.

Re “Democracy keeps these governments from passing the reforms that would solve the problem.”

In other words, the bureaucracy in Brussels is more important that the governments democratically elected by the citizens of sovereign nations? No thanks.

Re “Anything shord of political union is only a temporary patch.”

Right. I propose that we don’t need temporary patches, or the Euro, or the European Union.

There is a fairly glaring flaw in Piero Scaruffi’s argument. First he says that democracy is the problem, then he says that citizens in a European political union would be more likely to vote for reforms. But if the latter claim, along with the premise that this is essentially a problem of overspending in the South (in particulat) is true, then the problem is not democracy per se, but rather the attitude of votes in those countries.

The idea that citizens cannot be trusted to make sensible decisions and must therefore be governed by a beneficent élite is at least as old Plato, and immediately begs the question: who guards the guardians. Blaming democracy for irresponsible governance is to ignore centuries of history. Some of the decisions that citizens make at the ballot box really suck - witness the 6% of Greeks that voted yesterday for the fascist Golden Dawn party, which has literally promised to bring brawling to the Greek parliament (having tried it out first on national TV) - but, for once, even I perceive a Slippery Slope if we use that as evidence that we should be taking decision-making power away from citizens.

In any case, this story is about far more than overspending by uncompetitive Southern European countries. It is also about the fall-out from a financial crisis caused by an under-regulated and parasitic financial sector, and about the pursuit of a so-called remedial policy (austerity) that, far from providing any kind of remedy, is exacerbating the recessionary effect of the financial crisis and fears concerning sovereign debt. It is, as a British journalist (quoted by Paul Krugman) has noted, a case of “sadi-monetarism”.

The US example of socialised debt after the Independence War is worth considering, and more generally the issue of moral hazard is worth taking seriously. But remember that it was the moral hazard argument that dissuaded the US from bailing out Lehman Brothers, with disastrous consequences. There are better ways to reward thrift, and punish profligacy, than to sit by and watch systemic meltdowns occur, worshipping at the altar of non-intervention, as Lord Russell did during the Irish Famine.

I don’t think taking democratic powers away from the electorate really solves anything, as has been proven with the failed Greece technocratic installation.

One way of devaluing the Euro is to print more of them, not to the point of instigating hyper-inflation however. And from what you say, the Germans need only award themselves some well earned pay increases to offset devaluation?

But I’m surely relieved that “smart ass Britain” decided not to join the eurozone, as it never really seemed like a good idea? A “common” trading “market” is one thing, a federal controlled monetary (dis)union is another?

All we discuss is Western Europe;
we act as if Eastern Europe is still behind the Iron Curtain, not ‘part’ of Europe in the same way Mexico and Canada are ‘part’ of North America.

IMO, the Russian Federation is as important—or more so—than any nation in W. Europe.

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