In late May J P Morgan issued a chilling review of what they saw as the state of progress on tackling the Eurozone crisis. As they put it:
The narrative of crisis management in the Euro area has two dimensions: first, designing new institutions for the next steady state (EMU-2); and second, dealing with the national legacy problems, some of which were there at EMU's launch and some of which arose during the first decade of the monetary union's life.
Their assessment of progress is:
- Sovereign deleveraging–about halfway there.
- Real exchange rate adjustment–almost there for a number of countries.
- Household deleveraging in Spain–about a quarter of the way there in stock terms, but almost there in flow terms.
- Bank deleveraging–hard to say due to heterogeneity across countries and banks, but large banks have made a lot of progress.
- Structural reform–hard to say but progress is being made.
- Political reform–hardly even begun.
I could comment on the first five issues, but it is the last that is most chilling. They argue of 'the journey of national political reform' as they see it:
At the start of the crisis, it was generally assumed that the national legacy problems were economic in nature. But, as the crisis has evolved, it has become apparent that there are deep seated political problems in the periphery, which, in our view, need to change if EMU is going to function properly in the long run. The political systems in the periphery were established in the aftermath of dictatorship, and were defined by that experience. Constitutions tend to show a strong socialist influence, reflecting the political strength that left wing parties gained after the defeat of fascism. Political systems around the periphery typically display several of the following features: weak executives; weak central states relative to regions; constitutional protection of labor rights; consensus building systems which foster political clientalism; and the right to protest if unwelcome changes are made to the political status quo. The shortcomings of this political legacy have been revealed by the crisis. Countries around the periphery have only been partially successful in producing fiscal and economic reform agendas, with governments constrained by constitutions (Portugal), powerful regions (Spain), and the rise of populist parties (Italy and Greece).
There is a growing recognition of the extent of this problem, both in the core and in the periphery. Change is beginning to take place. Spain took steps to address some of the contradictions of the post-Franco settlement with last year's legislation enabling closer fiscal oversight of the regions. But, outside Spain little has happened thus far. The key test in the coming year will be in Italy, where the new government clearly has an opportunity to engage in meaningful political reform. But, in terms of the idea of a journey, the process of political reform has barely begun.
What J P Morgan is making clear is that 'socialist' inclinations must be removed from political structures; localism must be replaced with strong, central, authority; labour rights must be removed, consensus (call it democracy if you will) must cease to be of concern and the right to protest must be curtailed. This is an agenda for hard right, corporatist, centrist government. There's another word for that, and it's what the bankers seem to want.
You have been warned. Amazingly, they had the nerve to issue the warning.
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Yes, the other word for it that you’re too polite (?) to mention, Richard, is, of course ‘fascism’. I would be very surprised if any there exists a single major world bank that does not crave the imposition of fascism on those pesky, unruly so-called citizens. You’ve seen the George Carlin bit on what banks and bug business really are and really want, I guess:
http://youtu.be/acLW1vFO-2Q
Surely we are already living in a fascist state. Surveillance is everywhere so that resistance can be contained,corporatism is unbridled – witness its non payment of taxes, politicians are weak – no difference between the main parties, there is little confidence in the police and selected groups in society are being demonised. What the next 20 years will bring to the UK is hard to predict but my guess is that it will not be pleasant. Oh, and I expect this email is being tracked!
Surely it is not a fascist state. That word gets abused in progressive circles.
I wish this was heading for a fascist state compared to what it is heading for.
There are already words to describe it. Our economy is turning into a plutonomy and our government into an oligarchy. It’s not fascist, it’s not liberal and it’s not socialists and the sooner these three sides stop whining about each other the sooner we can all concentrate on the actual issue facing us.
To the comment below, the fascist economic system of corporatism only seems to fit our current situation out of its linguistic simplicity but it is far different. What is being asked from the citizens is that their state stop meddling in the affairs of its corporations while at the same time neither regulating them nor owning them. Contrary to what would be a liberal state self-organisation of workers and protesting seems to also be under attack.
So please, stop calling it fascism.
If you’d do a little bit of research you to would pick that rubbish over this poison.
Neo-feudal is better
@Richard.
I really appreciate you answering on here!
Thanks 🙂 It really shows dedication.
I have been using that term to but who is the feudal lord or king then?
Although in terms of neo-serfdom (if that is a term yet?) I agree.
‘This is an agenda for hard right, corporatist, centrist government. There’s another word for that, and it’s what the bankers seem to want.’
And it’s pretty much what we have in the UK, Richard (where we now know that our “freedom” is a lot less than many assumed it was before recent insights into the actions of the secret state).
But note, no mention of Germany or Switzerland which both have federal systems, where the regions/states/cantons have extensive powers and can – and routinely do – resist central government. And unless my memory fails me, wasn’t the German system set up as a response to a right wing dictatorship – Nazism, I think it was called!
But yes, you’re right, it’s been clear for decades that social democratic forms of democracy are anathema to neo-liberlism. What’s needed is the kind of “managed” democracy (a dictatorship in all but name) Putin have imposed on Russia, and which was forced on Italy and Greece for a time by the troika – and subsequently rejected – much to the annoyance of those experts in statecraft at JP Morgan I’m sure.
But lets also remember that this is another example of how the full force of the neo-liberal machine has been devoted in recent years to constructing a narrative for the banking crash that paints it as something it wasn’t. Namely, the failure of social democracy and the institutional, legal and political structures, cultures and systems that underpin it. In short, shifting the blame for the crash away from the greed and avarice of the 1% – and of the neo-liberal project more generally – and onto cowardly politicians and those who can least afford to take the blame. Sadly, this has been a remarkably successful project, for which the employees of such organisations as JP Morgan can feel justly proud.
So we have to keep on fighting them
Indeed, Richard, and I wasn’t trying to suggest otherwise, though with it becoming more obvious by the day that the “One” in One Nation Labour actually relates to the wishes and interests of the 1% I find myself a little more pessimistic than normal.
I fear you are uncomfortably close to the truth
Richard, with my utmost respect for you, and your tremendous work, how do we fight them ?
The general population seems to be sleepwalking into the abyss. People still believe that we live in a democracy and our government is working for the good of all. I’m Manx and live in the Isle of Man my home, it’s beautiful but sadly a nasty little right wing enclave, wholly under the plutocrat’s control. Just recently a remand prisoner attacked a prison officer, thankfully the officer wasn’t hurt. The remand prisoner however has been sentenced to life imprisonment for his crime. I’m not defending attacks on prison officers but a life sentence for an assault which caused no injury !? At best it’s J P Morgan style authoritarianism overstepping the mark, it smacks more of full blown fascism to me.
My worry is that so many ordinary people support this extremism. They’re being fed a deliberate narrative by the mainstream media, which has very successfully demonised the poor, the disabled and social services of any kind. It’s latest project is to do the same on the NHS, currently it’s softening public opinion up before it is handed over to private corporations, insurance companies and banks.
Back to the start of my ramble, how on earth do we start to fight ?
Regards
Jim
Well I think we have made some progress on tax and awareness
And that’s down to civil society, activists, UK Uncut, Occupy and what is left of a free press
We are the instruments of change
The point about Germany is well made. I can think of any country where politics revolves around consensus building and clientilism which somehow doesn’t rate a mention – that is Austria. None of this should be a surprise. Hayek, after all, didn’t believe in democracy and the latent tension between liberalism and democracy has been analysed and discussed since the time of JS Mill. Hayek would have approved of the European Union of Barroso (a student Maoist)which is removing ever increasing swathes of economic decision making from democratically elected national governments.
So JP Morgan see the shortcomings of “consensus building systems which foster political clientalism.” Definition of clientalism – the exchange of goods and services for political support. Is that not exactly what we have at Westminster. Corporate donation to party or politician- party and politician doing the corporate bidding – politicians retiring to the Lords with a title and a lucrative directorship or two. Much more civilized than those other parts of the world were they exchange money in brown paper packages. POLITICAL CLIENTELISM??? – Surely JP Morgan helped invent it.
When I followed the link to this article I expected to see mention of the J.P. Morgan buying the 25 most influential newspapers back in 1917 .
Watch the EU in session on T.V. and the condescending way Manuel Barroso and Cathy Ashton deal with anyone who is off-message .
It’s as if everything was pre-decided beforehand and they are just going through a facade .
What get’s me is that a lot of people seem to be clinging to the belief that the EU is on their side when it has been set up specifically to do the bidding of J.P. Morgan et al .
‘Strong central authority’
You know, the sort of thing tories hate 😀
I hope this is sufficiently moderate to merit inclusion – no offence intended, but I think you may be jumping the gun here – I agree that the implications are rather concerning, but the observations made on the systems around the Eurozone periphery (especially in Greece, Italy and Spain) are difficult to argue with, surely? I’ll quote verbatim from the report with two examples:
1/ ‘Constitutions tend to show a strong Socialist influence, reflecting the political strength left wing parties gained from the defeat of Fascism’ – surely unarguable in Greece, Spain and Portugal (All Military/quasi military governments as late as the 1970s) and probably true in Italy. I’m not sure the author is saying this is a bad thing per se, merely that this is how it is as a result of historical factors and that this is making austerity a hard sell for the Eurozone’s Finance ministers?
2/ ‘Political systems around the periphery typically display several of the following features: weak executives; weak central states relative to regions’ _Very true in Italy and Spain, and to a degree, Greece – probably less so in Portugal. Again I think the author is saying (and indeed you have endorsed this) that the reason tax collection (to use an example) is tough in some of these jurisdictions is that the state is prey to nepotism, low level corruption and weakness which means laws aren’t enforced. Again this means that austerity is likely to be far harsher than it otherwise would be.
Thus a charitable interpretation of it, is that if EMU in its current form is going to survive, the centralising of power you rightly deplore would seem to be inevitable, with all the dire consequences that entails. On the other hand, The alternatives, not made explicit here,would appear to be A:/ for an orderly break up of the Eurozone (as seems to have begun with the Cyprus situation) or B:/ The EU to break with the Aueterity consensus and begin a Regional programme of Keynesian infrasturucture spending to try and bolster the economy – I know you’d be in favour of B? but I think that isn’t likely to happen with the current political structure and lack of democracy within the EU….
I think your interpretation is absolutely impossible to make – and indefensible in itself
So you don’t think the Socialist influence within their constitutions is a result of these countries having Fascist systems nor that these four countries: (Portugal, Spain, Greece and Italy) display the weak central states and weak executives that the report implies? Really?
I do think those constitutions represent the threat to economic recovery that JP Morgan claims
Indeed, i think such rights are essential to recovery
Partly it depends what you mean by weak executive .
The Cameron-Clegg lead executive is weak when compared with either Mr Brown or Mr Blair’s administrations which could at least make a decision though not always the right one . I don’t think you can blame the lack of action or decisiveness on a coalition or minority Govt , these people are just talkers rather than walkers .
On the other hand Mr Blair treated parliament with disdain so presided over an excessively strong executive relative to parliament .
I can’t help feeling that things would be better if we elected good parliamentarians .
I wish
I’m wondering what, exactly is wrong with having “weak executives”? In J.P. Morgan’s view, the less power held by the people, the better. In the USA, we have an executive branch that is growing stronger with every term. The president now has sweeping powers, including the power to assasinate American citizens without trial. Unlike messy Europe, Americans can’t muster any protests on a scale large enough to make a difference. The government can spy on everyone, all the time. If only the people would stop voting altogether, it would be just about perfect.
The takeaway is, don’t concern yourself, little man — let these important decisions be made by your betters.
From a UK perspective I think you have a weak executive
Any government that allows JP Morgan to call the shots is no longer legitimate. I think we all know that mass protest is the only way to get such a government removed. Hopefully this can be done peacefully…..
Richard, this is what they’ve wanted all along – and when they created the Euro, they were expecting this crisis to eventually rear its head. It is very difficult to run sovereign national goverments, when you don’t control the currency. And certainly impossible when a country is in an economic downturn as many Eurozone nations are. Taxation alone will be insufficient to cover a government’s outlays.
What hope does Greece, Italy, Spain, Portugal and the rest have in these circumstances? Leaving the Euro. But notice none of these nations have gone down that track. They would prefer to see their people suffer than abandon the ‘United States of Europe’. Their leaders have sold them out and these nations will inevitably go down the other track – total surrender of their fiscal powers to a central authority in Brussels. Will the peoples of Europe be able to assert their authority over this new ‘creature’? I’m not sure.
Heya Richard
I don’t know what to do to be honest. I know about these realities but so few around me seem interested enough to do anything about it.
Sometimes I feel as joining the bad guys is the only right thing to do.
Or just end it.
You know, cause our struggle seems to be an endless one without victory in sight.
So what is the purpose of this eternal equilibrium that sometimes bursts out in flames of violence only to rewind the clock a few cosmical minutes later.
Voters tend to forget.
The prime example of this is how the “socialist” government was voted out of office in Spain in the middle of the 2011 criis purely because they had been the government to hold office then. Now they seem to be doing a comeback in the polls in the midst of extreme austerity. But really voters? What the heck did you expect a reactionary, ideolgically empty “liberal-conservative” (*I refuse to label myself) party would do but resort to short term fiscal measures?
You’re probably doing fine with this website but how can you bother anymore?
PS: Just to move away from the point even further: And it seems to me that no matter how drained all the parties become from long-term political goals, ideologies, principles and values the people still vote for their usual parties.
I bother because seeking change matters.
And I bother because whether or not I achieve change does not matter.
But it does matter that others get the benefit of change and so I work for a goal whether or not I see it because that this is the right thing to do – and all I can do.
And I turn my anger at the abuse of so many in the world into the action I best believe I can take to address the causes of their distress, which is a lot better use of my life than anything else I can think of.
I’m a member of the plain ordinary public and I am frustrated as hell with all the TALK! Social networking websites are a good place to air views and stir up consensus (I found this article on Facebook) and perhaps generate action (Anti Bedroom Tax demonstrations) and it is clear that people want freedom and democracy, but how do we really move a fight for a fair and democratic society from the virtual world to the real world?
At the moment, free speech on the web (particularly ranting and raving) is not too subject to heavy policing (not that that is going to last), but when ranting and raving is taken to the street, the police step in, folk get arrested and possibly locked up, thus the fight for social change is achieved by the hierarchy and we get kicked back into line!
People are angry and frustrated and AFRAID! We now live in a surveilance society where discontent is easily (or electronically) exposed to those responsible for it, so there can be no quietly conceived reactions. The perpetrators can see us coming and hence austerity is the name of the game.
How the hell do we fight back?
Many people have too much to loose with the majority hanging on to what they have left by the skin of their teeth. And that is, as far as I’m concerned, one of the primary strategies the government uses to keep us “plebs” in line. Simple really; go out and demonstrate, get passionate about it, get spotted on CCTV, get arrested, get charged, get a record, get discriminated against for having a record and hence, unemployment and poverty. And that’s just one example of the consequences of rebellion!
The ethic of “individualism” makes me laugh! The crowd with it’s meaning, it’s motive, it’s plea to be heard is not taken into account. The individuals within the crowd, with thanks to CCTV surveilance, are picked out and made examples of.
We are living under the watchful eye of electronic big brother and we don’t really have a hope in hell of reforms being made because a lot of us are afraid of being exposed and monitored.
No one is more anti-establishment than I am, but what can I do? I want to march right up the Cameron’s front door and demand an audience! Huh, I would get no further than the end of the street and would likely get arrested and probably have my name plastered all over the papers as this stupid women causing trouble at the gates of Downing Street! My life, and my family’s lives could be ruined.
However, what if every single person under the level of politian and banker were to strike and break away? The monetary system would collapse and that will be the only way to mend our damamaged society. Replace the barter syatem with a society that prospers by caring and sharing. If only..
I feel the same and as I mentioned above I stand at a sort of crossroads in my life. I am generally deeply disappointed with the public that only seem to react when (again I am generalising) when their behinds are on the line.
It took 50% unemployment to cause a minor change in the political structure of Southern Europe but I fear that once (sooner or later) that the issues are blanketed with either public bribes or the blood of revolutionaries that the public again will revert back to their old ways. This is not only a symptom of our western capitalist societies, the public became just as disengaged in the political process of the Soviet Union once the civil war was over.
Again there are always those who react in quite large number but usually only when they are themselves affected. The Ukraine farmers for example at the eve of Stalins rule.
Most people today in Northern Europe have it generally good. I doubt so many of them are at heart individualists but they can’t bother doing anything wortwhile collectively because it takes to much effort and they are already swamped with work-issues and social-issues.
All the information is out there.
The recent leak from Edward or why not just browse through here and get shocked at everything you read: http://www.thebureauinvestigates.com/
But even those of us who (really, at heart) care are so swarmed with information today that it’s difficult to react to all of this. Some of us like Richard or for example Chris Hedges are payed reasonably well to filter all of this and can dedicate much of their time to it but the majority can’t. The problem is that the opposing team in most cases have this as their primary or secondary line of work. They are directly benefiting from their teams actions.
In the end what I think will force short-term change today is a worsening of the crisis. Perhaps that is the best we can hope for. And I am quite sure that it will come for the old industrialists that still hade a stake in their countries future and at least officially cared about about it are mostly gone.
corrupt evil scum. Must be taken down. This is the e3vil in our world, it’s that simple – JP Morgan, satanic hounds
The world is allready living this nightmare for at least 50 years
I’d so love to take their money and power away and see how little and insignificant they actually are