Posted by Leon Haller on Sat, 23 Jul 2011 10:01 | #

Good observations and questions.

I read the link re Warsi. Why is there such a creature as a “Baroness Warsi”, and why is she allowed to pollute not only British soil, but the Conservative party? Disgraceful, as is this PC toady Oborne. Post-WN revolution, I hope you Brits spend more time exterminating your traitors than socializing (wrecking) your economy.

Posted by Leon Haller on Sat, 23 Jul 2011 10:04 | #

Here is the entire Oborne DT article:

Many of the biggest losers from the Wall Street Crash were not those greedy speculators who bought at the very top of the market. There was also a category of investor who recognised that stocks had become badly overvalued, sold their shares in the summer or autumn of 1928, then waited patiently as the market surged onwards to ever more improbable highs.

When the crash came in October 1929, they felt thoroughly vindicated, and waited for the dust to settle. The following spring, when share prices had consolidated at around a third lower than the all-time high reached the previous year, they reinvested the family savings, probably feeling a bit smug. Then, on April 17, 1930, the market embarked on a second and even more shattering period of decline, by the end of which shares were worth barely 10 per cent of their value at their peak. Those prudent investors who had seen the Wall Street Crash coming were wiped out.

There was one crucial message from yesterday’s shambolic and panicky eurozone summit: today’s predicament contains terrifying parallels with the situation that prevailed 80 years ago, although the problem lies (at this stage, at least) with the debt rather than the equity markets.

After the catastrophe of 2008, many believed and argued – as others did in 1929 – that it was a one-off event, which could readily be put right by the ingenuity of experts. The truth is sadly different. The aftermath of that financial debacle, like the economic downturn after 1929, falls into a special category. Most recessions are part of the normal, healthy functioning of any market economy – a good example is the downturn of the late 1980s. But in rare cases, they are far more sinister, because their underlying cause is a structural imbalance which cannot be solved by conventional means.

Such recessions, which tend to associated with catastrophic financial events, are dangerous because they herald a long period of economic dislocation and collapse. Their consequences stretch deep into the realm of politics and social life. Indeed, the 1929 crash sparked a decade of economic failure around much of the world, helping bring the Weimar Republic to its knees and easing the way for the rise of German fascism.

So we live in a very troubling period. The situation is very bad in the United States, where ratings agencies are threatening the once unimaginable step of downgrading Treasury bonds, and Congress is consumed by partisan wrangling over raising the nation’s debt limit. But it is desperate in Europe, because the situation has been exacerbated by a piece of economic dogma.

The faith of leading European politicians and bankers in monetary union, a system of financial government whose origins can be traced back to the set of temporary political circumstances in the immediate aftermath of the Second World War, and which was brought to bear without serious economic analysis, is essentially irrational. Indeed, in many ways, the euro bears comparison to the gold standard. Back in 1929, politicians and central bankers assumed that the convertibility of national currencies into gold (defined by the economist John Maynard Keynes as a “barbaric relic”) was a law of nature, like gravity. European politicians have developed the same superstitious attachment to the single currency. They are determined to persist with it, no matter what suffering it causes, or however brutal its economic and social consequences.

There is only one way of sustaining this policy, as the International Monetary Fund argued ahead of yesterday’s summit in Brussels. Admittedly, the IMF should not be regarded as an impartial arbiter. Theoretically, its responsibilities stretch around the globe, but it has become the plaything of a reactionary European elite, of whom its latest managing director, Christine Lagarde (a dreadful and backward-looking choice), is the latest manifestation. However, the IMF was entirely correct when it pointed out that the only conceivable salvation for the eurozone is to impose greater fiscal integration among member states.

This advice was finally being taken yesterday – and it is almost impossible to overestimate the importance of the decision which European leaders seemed last night to be reaching. By authorising a huge expansion in the bail-out fund that is propping up the EU’s peripheral members (largely in order to stop the contagion spreading to Italy and Spain), the eurozone has taken the decisive step to becoming a fiscal union. So long as the settlement is accepted by national parliaments, yesterday will come to be seen as the witching hour after which Europe will cease to be, except vestigially, a collection of nation states. It will have one economic government, one currency, one foreign policy. This integration will be so complete that taxpayers in the more prosperous countries will be expected to pay for the welfare systems and pension plans of failing EU states.

This is the final realisation of the dream that animated the founders of the Common Market more than half a century ago – which is one reason why so many prominent Europeans have privately welcomed the eurozone catastrophe, labelling it a “beneficial crisis”. David Cameron and George Osborne have both indicated that they, too, welcome this fundamental change in the nature and purpose of the European project. The markets have rallied strongly, hailing what is being seen as the best chance of a resolution to the gruelling and drawn-out crisis.

It is conceivable that yesterday’s negotiations may indeed save the eurozone – but it is worth pausing to consider the consequences of European fiscal union. First, it will mean the economic destruction of most of the southern European countries. Indeed, this process is already far advanced. Thanks to their membership of the eurozone, peripheral countries such as Greece and Portugal – and to an increasing extent Spain and Italy – are undergoing a process of forcible deindustrialisation. Their economic sovereignty has been obliterated; they face a future as vassal states, their role reduced to the one enjoyed by the European colonies of the 19th and early 20th centuries. They will provide cheap labour, raw materials, agricultural produce and a ready market for the manufactured goods and services provided by the far more productive and efficient northern Europeans. Their political leaders will, like the hapless George Papandreou of Greece, lose all political legitimacy, becoming local representatives of distant powers who are forced to implement economic programmes from elsewhere in return for massive financial subventions.

While these nations relapse into pre-modern economic systems, Germany is busy turning into one of the most dynamic and productive economies in the world. Despite the grumbling, for the Germans, the bail-outs are worth every penny, because they guarantee a cheap outlet for their manufactured goods. Yesterday’s witching hour of the European Union means that Germany has come very close to realising Bismarck’s dream of an economic empire stretching from central Europe to the Eastern Mediterranean.

History has seen many attempts to unify Europe, from the Habsburgs to the Bourbons and Napoleon. This attempt is likely to fail, too. Indeed, a paradox is at work here. The founders of the European Union were driven by a vision of a peaceful new world after a century of war. Yet nothing could have been more calculated to create civil disorder and national resistance than yesterday’s demented move to salvage the single currency.

Posted by Dirty Bull on Sat, 23 Jul 2011 10:20 | #

Oborne is right.
The political prostitutes who run Greece have essentially agreed to making Greece into a German dependency in all but name.Henceforth, Greek ‘independence’ and ‘self-determination’ (hard won over centuries), will effectively mean nothing.
The other unpalatable argument is that one certain Adolf Hitler got it right back in 1940 and his predictions and visions have come to pass, despite the military defeat and massive loss of blood and treasure in 1945.
  (As an aside, although I’m no Nazi or fan of Hitler, it is just wonderful how most of his instincts and prejudices were spot on.Organised Jewish finance destroyed the world’s economy, as did America’s descent into nigger and spicdom.The USSR collapsed into a pile of shit.The British Empire got its come uppance and its heartland, Britain, WILL be wog majority in 30 years.Niggers openly knife to death Englishmen on the streets of London with impunity.The sate of Israel is no more than a nest of thieves and conspiracy.
One would have thought that to many a proud Greek, the prospect of being reduced to protectorate-serfdom is worse than national bankruptcy.

Posted by Leon Haller on Sat, 23 Jul 2011 11:12 | #

Oborne is right, I think, that the EU’s current (mis)management of its financial crisis is inexorably leading the monetary union towards fiscal union. He is also correct that such union would lead to Northern countries’ assumption of Southern pension liabilities. Beyond that, he is not that “clear-sighted” at all.

1. Most recessions are part of the normal, healthy functioning of any market economy

Wrong. While minor, region-specific or sector-specific booms and subsequent busts are always possible in advanced economies, economy-wide recessions are ALWAYS AND EVERYWHERE monetary phenomena (as Rothbard once put it) caused by central banks.

2. the 1929 crash sparked a decade of economic failure around much of the world

Wrong. It was the central government’s meddlesome responses (at least in the US, to my knowledge, though probably also elsewhere) that transformed what ought to have been a short, sharp recession, itself caused by the loose Fed monetary policies of the 20s, into a prolongued depression.

3. The situation is very bad in the United States, where ratings agencies are threatening the once unimaginable step of downgrading Treasury bonds, and Congress is consumed by partisan wrangling over raising the nation’s debt limit.

Not exactly. The economic situation is bad in the US mostly because of the actions of the Fed and especially the Obama admin since the 2008 crash (though we do face horrible, long-term fiscal imbalances in our useless ‘entitlement’ programs, but which are endogenous to these programs, and thus not Obama’s fault). Had the Fed simply allowed for a short, sharp depression, we would already be growing out of it. But by its insane, inflationist policy of money debasement (“quantitative easing”), the Fed has partially delayed the economy’s final reckoning with the badly distorted housing market (the root of our problems, again caused solely by a web of governmental policies, laws, and monetary actions). This, in combination with the huge, $814 billion waste of the 2009 Obama “stimulus”, whose purpose and effect was to transfer huge amounts of private sector wealth to state governments so that they could bail out various statist (and Democratic) constituencies which rely on govt paychecks and welfare checks, as well as Obama’s strident, anti-business, anti-capitalist rhetoric (strangely echoed to some extent around MR), is why our current economic performance is so anemic.

The Congressional debt-wrangling is, long-term, a very good thing, however. The fundamental battle is always between the economic rationality and proper incentives to productivity of the for-profit sector, and the constant waste of socialism and chronic distortions produced by regulations of all varieties. What this debt battle is really about is stopping America’s further slide into a socialist economy. That outcome is far more important than even a realized debt downgrade.

4. in many ways, the euro bears comparison to the gold standard

Wrong. The only comparison is that both are seen to create large markets benefitting from avoiding the problems, costs and calculational uncertainties associated with doing business in different currencies. The euro (and the present dollar) is pure fiat money, its value totally at the whim of government officials. The gold standard was “the people’s money”, its ultimate value determined by freely transacting individuals. the “true euro” would be a market-determined, international gold standard, such as existed in the 19th century.

Posted by Leon Haller on Sat, 23 Jul 2011 11:54 | #

continuing…

5. the eurozone has taken the decisive step to becoming a fiscal union ... This integration will be so complete that taxpayers in the more prosperous countries will be expected to pay for the welfare systems and pension plans of failing EU states.

Correct - and a very bad thing - but not for Greece et al.

6. This is the final realisation of the dream that animated the founders of the Common Market more than half a century ago

True? I don’t think so, though my EU history is not great. They wanted a common currency to facilitate trade, which in turn was assumed would bind the countries with economic incentives, and so avoid future wars.

7. but it is worth pausing to consider the consequences of European fiscal union. First, it will mean the economic destruction of most of the southern European countries. Indeed, this process is already far advanced. Thanks to their membership of the eurozone, peripheral countries such as Greece and Portugal – and to an increasing extent Spain and Italy – are undergoing a process of forcible deindustrialisation.

This is ridiculous. If Germany is required to bail out the pensions and many of the public costs of these unproductive Southern countries, that can hardly be called “economic destruction”. It’s more like a forced gift. China is helping to prop up the American welfare state. Without that Chinese investment in Treasury paper, we would either have to severely curtail our federal entitlement programs (which might actually be a good thing long-term, but not in a short-term economic sense), raise interest rates, raise taxes, or tolerate much greater inflation. China is helping us live beyond our means.

And would southern deindustrialization be so bad? If the countries were all part of a single fiscal bloc, and Germany were so much more industrially efficient that it came to dominate manufacturing within the union, so what? How is that bad for Southerners? They will benefit economically from German productivity. The law of comparative advantage is lurking around here.

8. Their economic sovereignty has been obliterated

In what sense was their economic sovereignty a good thing? If German domination forces Southerners to run more efficient, less corrupt, less socialistic, and more transparent economies, so what? Southerners’ problems are mostly due to their own gross fiscal and economic mismanagement. Who could possibly argue with the idea that many black-run American cities and townships would be better off being stripped of their sovereignty, and then taken over and managed by more distant, white-run governing structures?

9. Despite the grumbling, for the Germans, the bail-outs are worth every penny, because they guarantee a cheap outlet for their manufactured goods.

Wrong. Germany doesn’t need such a “guarantee”. If their products are good, people everywhere will demand them. But the bailouts constitute real money being taken from German taxpayers, now or in the future. As always, German taxpayers will be the big losers here. European banks will win, as will southern populations, able to avoid reckoning with their profligate, statist ways.

Finally, I understand why European ethnonationalists might oppose a European superstate. But where’s the problem for those of us who are racial nationalists?

Posted by Leon Haller on Mon, 25 Jul 2011 19:30 | #

Well, this discussion sank without a trace. Too bad, your questions were worth exploring at greater length, GW.

Posted by Leon Haller on Mon, 01 Aug 2011 21:14 | #

I am really bummed that this discussion was upstaged by the Breivik shootings. It really should be restarted under another thread. These are very salient issues, and nationalists need a voice wrt them.