nazism

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Why Europe Is Still In Peril, In Two Charts

A lot of analysts, including myself, have given the European situation a rest since last year. There were certainly some signs that the ECB and IMF had slowed (if not stopped) the deterioration by providing liquidity backstops to the addled banking system. But perhaps that was just the calm before the storm.

In truth, things were still was probably just as perilous as ever up until yesterday when the ECB and IMF decided to start a banking panic by enforcing a haircut of up to 10% on bank depositors. That was literally the stupidest thing that anyone has done since the Euro crisis began, and while it may not lead to utter disaster, there is a significant chance that it will. Not only is it excruciatingly unjust (it’s theft!), it is also incredibly suicidal. Many, many Spaniards, Italians, Greeks and Portuguese will have looked at the Cyprus haircut in horror, and wondered “Am I next?” Some of those will withdraw their money from the bank and stuff it in a mattress or into tangible assets, furthering stressing the already-fragile and highly-leveraged European banking system. Even a 1% drop in European deposits would lead to over €100 billion of withdrawals.

The background to this is soaring European unemployment:

EuroUnemployment

The people running the European financial system and engineering the bailouts and austerity (ECB, EU, IMF, Germany) have ploughed on through with more and deeper austerity even as European countries (other, of course, than Germany) have run up to higher and higher unemployment levels. Spain and Greece are above 25%. Italy is above 10%, and Portugal above 15%. Hiking taxes and cutting spending is leading to more and more people in unemployment oblivion. That isn’t healthy. Let’s not forget what happened to Germany the last time when over 25% of its people found themselves unemployed:

Chart-German-Unemployment-and-Nazi-Links

If bank runs materialise across Europe next week, the unemployment situation is most likely to worsen even further. If that happens, expect more and more unemployed, underemployed and angry Europeans to start voting for increasingly radical political parties. This is suicidal. Europe needs to not only reverse the awful, stupid Cypriot haircut, but also to put fiscal consolidation on hold (it has, lest we forget, so far been counterproductive) and start worrying about unemployment levels.

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The Nobel WTF Prize

So the European Union won the Nobel Peace prize for “having over six decades contributed to the advancement of peace and reconciliation, democracy and human rights in Europe.”

Is this a joke? Nigel Farage thinks so, exclaiming that “this goes to show that the Norwegians really do have a sense of humour.”

The Telegraph reports:

The award of the prestigious prize sparked a mixed response in Greece, where living standards have crashed as the economy has contracted 20 per cent in the last three years, despite bailouts totalling 240 billion euros (£200 billion).

With social tensions still high, more than 7,000 police had to be deployed to protect Mrs Merkel on a visit to Athens this week, when she was derided by some as a reincarnation of the Third Reich.

Rena Dourou, an MP for the Left-wing Syriza opposition, said of the award: “At first, many people thought this was some kind of joke. It is a very big surprise.”

The European economic system really isn’t working. Many predicted at the inception of the Euro that a single monetary policy could not work for such a wide and diverse collection of countries and economies with many language barriers, many nationalisms, and very low inter-state labour mobility. Indeed the architects of the Euro admitted that they did not have the policy tools at the inception of the Euro to make the system work.

Instead of fostering “peace, reconciliation, democracy and human rights” as the Nobel Committee contends, as the ideological integrationists have pushed for more and more integration  the European system has in recent years led to more friction between the nations. In the early years of the Euro, Eurozone nations could access to credit at a single rate:

Cheap capital flowed into nations like Greece, Spain, Italy and Portugal, leading to property bubbles and the acquisition of unsustainably high levels of government and household debt. Once the global economy weakened, the Emperor was left wearing no clothes as the property bubbles burst. Such an unsustainable debt spree would have typically led to large-scale money printing operations in the periphery to keep the debt serviceable, but under the new European regime, nations can no longer do this. This has been a shock for the periphery, which is struggling to come to terms with the new reality of spending cuts, tax hikes and elevated unemployment. Here’s industrial production in Spain, Greece and Italy compared to the United States during the Depression era:

Unsurprisingly, trust in European institutions is collapsing:

And as a result, support for extreme political parties is rising. Opinion polls suggest that an election in Greece today would put the Neo-Nazi Golden Dawn party in third place. Simply, the European system that was supposed to bring Europe together could well be on the verge of tearing Europe apart.

Awarding the Peace Prize to the war-mongering, extrajudicial-assassination-approving, NDAA-signing, promise-breaking imperialist Barack Obama was not enough for these clowns. They seem fully determined to obliterate any last semblance of respectability the Nobel Peace Prize once had.

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The Face of Genocidal Eco-Fascism

I am not exaggerating.

This is Finnish writer Pentti Linkola — a man who demands that the human population reduce its size to around 500 million and abandon modern technology and the pursuit of economic growth — in his own words.

He likens Earth today to an overflowing lifeboat:

What to do, when a ship carrying a hundred passengers suddenly capsizes and there is only one lifeboat? When the lifeboat is full, those who hate life will try to load it with more people and sink the lot. Those who love and respect life will take the ship’s axe and sever the extra hands that cling to the sides.

He sees America as the root of the problem:

The United States symbolises the worst ideologies in the world: growth and freedom.

He unapologetically advocates bloodthirsty dictatorship:

Any dictatorship would be better than modern democracy. There cannot be so incompetent a dictator that he would show more stupidity than a majority of the people. The best dictatorship would be one where lots of heads would roll and where government would prevent any economical growth.

We will have to learn from the history of revolutionary movements — the national socialists, the Finnish Stalinists, from the many stages of the Russian revolution, from the methods of the Red Brigades — and forget our narcissistic selves.

A fundamental, devastating error is to set up a political system based on desire. Society and life have been organized on the basis of what an individual wants, not on what is good for him or her.

As is often the way with extremist central planners Linkola believes he knows what is best for each and every individual, as well as society as a whole:

Just as only one out of 100,000 has the talent to be an engineer or an acrobat, only a few are those truly capable of managing the matters of a nation or mankind as a whole. In this time and this part of the World we are headlessly hanging on democracy and the parliamentary system, even though these are the most mindless and desperate experiments of mankind. In democratic coutries the destruction of nature and sum of ecological disasters has accumulated most. Our only hope lies in strong central government and uncompromising control of the individual citizen.

In that sense, Linkola’s agenda is really nothing new; it is as old as humans. And I am barely scratching the surface; Linkola has called for “some trans-national body like the UN” to reduce the population “via nuclear weapons” or with “bacteriological and chemical attacks”.

But really he is just another freedom-hating authoritarian — like the Nazis and Stalinists he so admires — who desires control over his fellow humans. Ecology, I think, is window-dressing. Certainly, he seems to have no real admiration or even concept of nature as a self-sustaining, self-organising mechanism, or faith that nature will be able to overcome whatever humanity throws at it. Nor does he seem to have any appreciation for the concept that humans are a product of and part of nature; if nature did not want us doing what we do nature would never have produced us. Nature is greater and smarter than we will probably ever be. I trust nature; Linkola seems to think he knows better. As George Carlin noted:

We’re so self-important. Everybody’s gonna save something now. Save the trees. Save the bees. Save the whales. Save those snails. And the greatest arrogance of all, save the planet. What? Are these fucking people kidding me? Save the planet? We don’t even know how to take care of ourselves yet. We haven’t learned how to care for one another and we’re gonna save the fucking planet?

There is nothing wrong with the planet. The planet is fine. The people are fucked. Difference. The planet is fine.

Linkola and similar thinkers seem to have no real interest in meeting the challenges of life on Earth. Their platform seems less about the environment and more about exerting control over the rest of humanity. Linkola glories in brutality, suffering and mass-murder.

Now Linkola is just one fringe voice. But he embodies the key characteristic of the environmental movement today: the belief that human beings are a threat to their environment, and in order for that threat to be neutralised, governments must take away our rights to make our own decisions and implement some form of central planning. Linkola, of course, advocates an extreme and vile form of Malthusianism including genocide, forced abortion and eugenics.

But all forms of central planning are a dead end and lead inexorably toward breakdown; as Hayek demonstrated conclusively in the 1930s central planners have always had a horrible track record in decision making, because their decisions lack the dynamic feedback mechanism present in the market.  This means that capital and labour are misallocated, and anyone who has studied even a cursory history of the USSR or Maoist China knows the kinds of outcomes that this has lead to: at best the rotting ghost cities of China today, and at worst the mass starvation of the Great Leap Forward resulting in millions of deaths and untold misery.

Environmentalists should instead pursue ideas that respect individual liberty and markets. There is more potential in developing technical solutions to environmental challenges than there is in implementing central planning.

If we are emitting excessive quantities of CO2 we don’t have to resort to authoritarian solutions. It’s far easier to develop and market technologies (that already exist today) like carbon scrubbing trees that can literally strip CO2 out of the air than it is to try and develop and enforce top-down controlling rules and regulations on individual carbon output. Or (even more simply), plant lots of trees and other such foliage (e.g. algae).

If the dangers of non-biodegradable plastic threaten our oceans, then develop and market processes (that already exist today) to clean up these plastics.

Worried about resource depletion? Asteroid mining can give us access to thousands of tonnes of metals, water, and even hydrocarbons (methane, etc). For more bountiful energy, synthetic oil technology exists today. And of course, more capturable solar energy hits the Earth in sunlight in a single day than we use in a year.

The real problem with centrally-planned Malthusian population reduction programs is that they greatly underestimate the value of human beings.

More people means more potential output — both in economic terms, as well as in terms of ideas. Simply, the more people on the planet, the more hours and brainpower we have to create technical solutions to these challenges. After all, the expansion of human capacity through technical development was precisely how humanity overcame the short-sighted and foolish apocalypticism of Thomas Malthus who wrongly predicted an imminent population crash in the 19th century.

My suggestion for all such thinkers is that if they want to reduce the global population they should measure up to their words and go first.

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The Dangers of the Era

Modern civilisation has its problems but right now it works. Electrical grids, water systems, mass agriculture, global shipping, the internet, road networks, governments and financial markets are all still functional, and life for the majority is significantly easier and more colourful than for most of history. In the presence of civilisation, most of our basic needs (food, water, shelter, culture) are fulfillable, even if civilisation is highly fragile.

Nonetheless, many people are angry. Angry with the system, angry with authority, angry with society. We see it in #OccupyWallStreet. We saw it in the spontaneous thievery and riots in England in August. We saw it in the ongoing Arab Spring. We see it in Greece‘s protests against IMF-imposed austerity. We saw it in the Tea Party’s shades of “mad as hell and I just can’t take it anymore“.

People are mostly angry about some combination of poverty, angry about inequality, angry about rising joblessness, lost civil liberties, the loss of Western manufacturing, economic weakness, bailouts, or simply perceived unfairness. This isn’t a partisan issue; it exists as much in so-called left wing (like anti-austerity protests) and right-wing (Tea Party) camps.

The essential problem (that affects everyone who is not part of the elite) is that while civilisation functionals reasonably well for a vast majority, it functions significantly better for a tiny minority.

If nurses, teachers, soldiers, electricians, tradesmen, scientists (etc) are getting $50,000 a year for their labour, and traders on Wall Street who were bailed out after their businesses failed are getting $5 million bonuses, eventually the majority will start to seethe with questions like “why are they more valuable to society than we are?“, “if they failed to see the last recession coming, why are they still getting rewarded?”, “if unemployment is so high the economic system cannot be working, can it?, and so forth.

Corporations — and by extension, governments — have much reason to be fearful.

From the Washington Post:

Recent protests—Occupy Wall Street, of course, but also the Tea Party movement as it first began—rise out of a profound rage over unfairness in this country. The scale of this unfairness and inequity makes it hard to know where to direct that rage, to know what to do. Occupy Wall Street has the right target; but where their rage will go, nobody today knows. I am certain, though, that any alert board should be instructing their managers to do three things: admit the problem exists, take positive steps to make the corporation function fairly, and consider what other steps would address the concerns of the protests.

Simple? Not quite. But necessary? You bet.

If the present Occupy Wall Street protests do not create an unignorable threat, they certainly raise the prospect of one in the near future. Rage at unfairness is not easily quenched and once started can be hard to curtail. We’ve seen this time and again throughout history. Shareholders may think of themselves as victims of CEO power, as innocent shareholders , but we need only look to the Russian and French Revolutions to see that everyone having anything to do with fallen power, or in this case “guilty corporations”, may be attacked and injured—even if, like shareholders, their only crime is doing nothing.

But the real danger of all of this is not to corporations, or governments, or Wall Street, or the power elite. The danger is to society itself. Corporate and financial hygiene is at an all-time low, and the global financial infrastructure is an interconnected hyper-leveraged house-of-cards ready to come crashing down. The higher joblessness and wage inequality go, the  sooner the smouldering embers of fury we see today will be transformed into a burning conflagration of rage in wider society. If people with electricity, water, food and Chinese consumer goods are getting furious today, while civilisational is still functioning reasonably well, imagine what might happen if another financial crash caused by a Euro-default raised unemployment another 5%? If gasoline costs rose another 50% in response to an oil shock? If a new conflict or war significantly raised the cost of imported goods?

Establishments need to quell the furies of the population before they reach tipping points by letting bad banks and businesses fail, by reforming the tax code so that everyone pays a fair share, by creating jobs, and by finding ways to reduce citizens’ and institutions’ debt burden. Unfortunately, I believe that the global financial and political systems are so entrenched that at this stage deconstruction (rip it up and start again) is impossible because vested interests make any such changes highly unlikely.

The real danger is that in desperate times people will follow any charlatan who can offer food and security. In the 20th Century, Germans, Italians, Russians, the Spanish, the Chinese, the Vietnamese, the Libyans and others all discovered the dangers of overthrowing corrupt entrenched establishments, and replacing them with new regimes with no respect for individual liberties, religious freedoms, the freedom of speech, the freedom of association. I want the revolutionaries of the 21st Century to understand that the problem is not capitalism, nor liberal democracy. The problem is that a tiny minority are rigging the system to enrich themselves.