Wednesday, June 27, 2012

A Specter is Haunting Europe (Oh, you know why)

No, not THAT specter. And not only in Europe. Read on and you'll see what I mean.

Meanwhile, before I continue, I want to make it perfectly clear (to quote an old adage) that I am NOT interested in hatching a new conspiracy theory. I am not saying the 1% or .1% or .01% got together and conspired to concoct some clever scheme to force impoverished workers into ruthlessly competing with one another by blowing a financial bubble so huge as to ensure the complete and total collapse of  the world economy unless we all agreed to impoverish ourselves through the institution of appropriately harsh austerity measures. For one thing, they aren't smart enough. For another, they don't think like that, because they don't have to think like that. They have better things to think about, such as finding the next whiskey bar -- or the next little dollar -- or the next luxury hotel:

They don't need to plan a conspiracy because the "system" does the planning for them. And by "system" I mean, you know, that wonderful system of "free" market capitalism we all love so dearly.

Also, before I continue, I would like to take back what I wrote earlier about economists who love to explain more than they like to think, because I just discovered a thinking economist, just today, by coincidence, God bless me. More on that presently as well.

Oh and one more thing before I really get started, let's take a look at a fascinating graph, courtesy of the Business Insider (June 22):

Corporate Profit Margins as a Percentage of GDP:

Here's another, from the same source:

Wages, as a Percentage of GDP:

The headline, appropriately enough, reads:

Corporate Profits Just Hit An All-Time High, Wages Just Hit An All-Time Low

This from a business publication.

OK, now finally I'm ready to continue from where I left off in my last post. But first, I need to correct what I just wrote, because, according to the thinking economist I referred to above, there was a conspiracy after all. Who is this thinking economist? Greg Palast. And who is the villain who concocted the conspiracy? A guy named Robert Mundell. In an article in yesterday's Guardian, Palast accuses Mundell of being the evil genius of the euro:

The idea that the euro has "failed" is dangerously naive. The euro is doing exactly what its progenitor – and the wealthy 1%-ers who adopted it – predicted and planned for it to do. . .
That progenitor is former University of Chicago economist Robert Mundell . . . [t]he architect of "supply-side economics" . . . 
[Mundell] cited labor laws, environmental regulations and, of course, taxes. All would be flushed away by the euro. Democracy would not be allowed to interfere with the marketplace . . .
And when crises arise, [according to Mundell] economically disarmed nations have little to do but wipe away government regulations wholesale, privatize state industries en masse, slash taxes and send the European welfare state down the drain.
[Thus,] Mario Draghi, the (unelected) head of the European Central Bank, is calling for "structural reforms" – a euphemism for worker-crushing schemes. They cite the nebulous theory that this "internal devaluation" of each nation will make them all more competitive.
Monti and Draghi cannot credibly explain how, if every country in the Continent cheapens its workforce, any can gain a competitive advantage. But they don't have to explain their policies; they just have to let the markets go to work on each nation's bonds. Hence, currency union is class war by other means. 
So. It's nice to learn I'm not the only one. A bona fide economist with real credentials is saying more or less the same thing. But what I'm not yet hearing, from him or anyone else, is any idea of what to do about this disturbing and disheartening situation.

Occupy Wall St. did its bit, and I supported them. But now they've run out of steam and little wonder. If their sort of passive resistance isn't the answer, then what about outright armed rebellion? Sorry, that won't work either. With respect to any conflict, it is always better to avoid attacking from a position of weakness, best to attack only from a position of strength. That's how the Vietnamese beat us back in the 70's and it holds true today. We aren't armed, and even if we were, the powers that be are far too powerful for armed rebellion to achieve any real and lasting success. Look at what's happening now in Syria, or even what happened in Egypt, when what looked like victory was turned into defeat, because the real powers in that country, the oligarchs and plutocrats, have the army on their side. Why not, they pay it well.
Besides, armed rebellion is always a bad idea, imo, not only when it's futile, because even when it succeeds, too many innocent people get hurt or killed and there are too many things that could go wrong, too many chances for the cause to be betrayed or co-opted.

So, what is to be done? Well, before I answer (I always have an answer), I have to fulfill my promise and explain what I mean by the title of this post. What is the "Specter That is Haunting Europe" (and not only Europe)? The unknown, unsung, routinely ignored, denigrated, chronically underestimated workers of the world. And what can they do to liberate themselves -- and us? Why, what they have always done . . . 

(to be continued)

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