“The ultimate result of shielding men from the effects of folly, is to fill the world with fools.”
Commentary & Analysis
Technocrats with spreadsheets – Scary!
Give technocrats an excel spreadsheet, make a circle, hold hands, sing kumbaya, and all is right in the world. Well, at least in the world that matters to politicians–the real world where people work and live is a different story.
As much as we all want the Eurozone to succeed (or not, as in my case); it seems they continue to believe financial engineering is the key to success. I think it is a huge mistake. It appears we already have a perfect micro example of the austerity plan handy work in the eurozone–it’s called Greece.
Greece as we know was veering off course. Granted, they never should have been on course as part of the eurozone had it not been for their friends at Goldman helping them cook the books, which leads to a question: Why is Goldman never punished for their many transgressions? Instead of telling Goldman to never do business again within the Eurozone, instead the firm is rewarded with the installation of one of their own as head of the European Central Bank (ECB) … I know, I know, stop confusing money and principles.
Back to the point: The ultimate team of technocrats with spreadsheets – aka the Troika (the IMF, European Commission, and ECB) – swooped in to get Greece back on the path to nirvana with a fresh new austerity plan.
I realize Greece may not be the perfect model, as most of the other countries in the eurozone are starting from a more solid financial position. But the point is austerity alone will not solve the structural problems–only a growth solution will do that. Why have politicians not learned you can’t tax a country into prosperity?
The Laffer Curve still works! You can argue it till the cows come home, as the libs always do, but facts tend to be a pesky thing indeed.
How many real life examples do our politicians need to see to prove to them that raising taxes is not the answer? It is a head shaker. [Note: The Wall Street Journal did a very good editorial on this very point this morning; well worth the read.]
Without going into all the excruciating details of all the new austerity plans on the table in Europe, especially the new Italian plan that will likely crush its economy, I think it is fair to say austerity is no solution unless one wishes to inflict more pain on working people in order to keep a failed political dream alive.
So instead of the one quick pop–it’s over; we now have the prospect of a longer-term dissolution process for the single currency experiment.
Oh, and by the way, I noticed this news flash this morning in the midst of the optimism that most of the countries will play the austerity game:
BERLIN, Dec 9 (Reuters) – Germany’s resilience to the debt crisis engulfing its neighbours looked to be disintegrating after data showed exports posted their biggest fall in half a year in October, and the Bundesbank forecast a lean winter and feeble growth next year.
It may be a very cold winter. Bundle up!