Posted by: Dirk | December 17, 2010

Bertrand Russell and the crisis of the euro

Bertrand Russell, of course, is long dead and his words were not meant to address the descendants struggling with crisis of the euro. However, he does address his descendants, and that includes us. The two points he makes are quite interesting in the context of the euro crisis.

1) Let me sum it up as: “Look at the facts and don’t let wishful thinking guide you.” This reminds me of Paul Krugman, who today attacked the attempts to whitewash history by parts of the political establishment (guess who):

Last week, reports Shahien Nasiripour of The Huffington Post, all four Republicans on the commission voted to exclude the following terms from the report: “deregulation,” “shadow banking,” “interconnection,” and, yes, “Wall Street.”

When Democratic members refused to go along with this insistence that the story of Hamlet be told without the prince, the Republicans went ahead and issued their own report, which did, indeed, avoid using any of the banned terms.

That report is all of nine pages long, with few facts and hardly any numbers. Beyond that, it tells a story that has been widely and repeatedly debunked — without responding at all to the debunkers.

This problem is not specific to the US. Also in the European Union, including Germany, the media coverage seems to be a bit … strange. The problem of excessive government debt is pushed by one political side, apparently with the help of at least some media. It seems to me that the fact that before its troubles began Ireland has been a net-exporter and has had a budget surplus for many years is now strangely hidden from sight. As every informed European knows, it is the bail-out of Irish financial institutions that has caused the government budget to deteriorate.

Back to Bertrand Russell. The second point is that love is good and hate is bad. The recent bail-out scheme puts nation against nation, and borrowers against lenders. It builds on rules, and not democratic institutions that are open to discussion. It describes austerity to those nations that let free markets work their magic, while others that did so escape unharmed. Those economies that are depressed are without policy, since both fiscal and monetary policy instruments have been removed. While the nations had agreed to that, it is nevertheless a problem.Unemployment in Spain stands at 20%, and the Baltics are closely behind, followed by Ireland and Greece. This is a sad state of Europe.

The idea of a political union is alive today, but it is not built on democratic values. It is build on the law of the jungle.


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