Dominique Strauss-Kahn (left) was shortly expected to leave the IMF anyway to fight for the French presidency, which very probably he would have won. But the hot favourite to step effortlessly into his shoes was the current French finance minister Christine Lagarde. She would have continued in much the same vein. She too would have bent the IMF to the apparently sole purpose of holding the European project together. I don't want to say that the European bailouts, which Mr. Strauss-Kahn has so generously supported with IMF money and expertise (that's partly our money, by the way), were definitively the wrong approach. [But] Far from solving the crisis, the bailouts have therefore virtually guaranteed a rolling series of periphery nation crises into the indefinite future … The trouble with Christine Lagarde is the same as Mr. Strauss-Kahn – she's part of the single currency establishment and she's determined that for now there will be neither debt restructuring nor exits. – UK Telegraph
Dominant Social Theme: If we pay the Greeks, the euro will be fine.
Free-Market Analysis: While we pointed out yesterday that there are no irreplaceable men, it turns out that Dominique Strauss-Kahn may have provided single-minded backing for the European Union that may prove difficult to recreate. The European Union was failing anyway but it may fail faster now. That would be a big story indeed.
While the mechanics of Strauss-Kahn's fall from grace, if that is what it is, do not of themselves constitute an elite fear-based promotion (except that it gives the mainstream media a chance to personalize sociopolitical polity once again) the ramifications may reinforce what was already in process. The Telegraph article excerpted above points out there are few non-Gallic leaders – assuming Strauss-Kahn does not return – who will shovel money to Greece, Portugal and even Ireland with the same enthusiasm as Strauss-Kahn apparently did, or wanted to.
Like the (failing) war in Afghanistan, the EU represents a certain kind of building of block of world government and its apparent foundering may well deal one more blow to the efforts of the elites to push forward with their globalist plans. The twin setbacks of the apparent failure of the war in Afghanistan and the potential failure of the EU as it is currently constituted would make the inevitability of internationalism at least a little less convincing.
The powers-that-be as we have pointed out numerous times are having a good deal of trouble reinforcing their fear-based promotions during an era we have taken to calling the Internet Reformation. As a result, the elites have started to present internationalism as an inevitability to be enforced at the point of the proverbial gun.
The idea is to show immoveable rigor as regards to all globalist plans and thus discourage resistance. This was always a difficult stance to enforce because even one or just a few unravellings would damage it. One cannot present a façade of immoveable rigor when one is experiencing setback after setback. Psychologically, the effect is undermined.
That may be happening now, and not just as regards the EU. We continually chart the rise and fall of elite memes. We have argued that in the 20th century, there was virtually no pushback to the Anglosphere elite's globalist machinations. The entire superstructure of the (currently failing) world economic system was put together and implemented after World War II, and more importantly there was no way to offer an alternative vision. In the 21st century, alternative views via the Internet have circulated with an insistence that has entirely undermined the certainty that was necessary for globalism. The world, indeed, is not so small after all.
The DOHA internationalist trade talks are failing; the US Climate Exchange went belly up last year after the Internet-based "ClimateGate" and current misguided attempts of the West to reignite colonialism in Africa (see other staff report in this issue) are back-firing as well.
Generally, there is growing resistance to elite machinations throughout the West (and elsewhere as well) we would argue, much of it due to Internet debunking and exposure of secret elite plans. The hive mind that Marshall McLuhan wrote of may indeed be at work. It is hard to build a secret world order when everyone is talking about it, writing about it and analyzing it.
This phenomenon has an impact on the Dominique Strauss-Kahn affair as well. Whether Strauss-Kahn was entrapped or not (See yesterday's article and Editor's Note), one has to assume it will be difficult for the elites to continue from where they have left off, no matter how hard they try. The French, for a number of reasons, have been a driving force behind the continuance of the EU project even when it has seemed more and more impractical to sustain.
Perhaps Strauss-Kahn's downfall, if that is what it is, will help create the end of the EU project as we know it. This perception in our view is aligned with another already reported in these modest pages. That has to do with the likely faked death of Osama bin Laden marking a definitive turning point in the Afghan war: The US can declare victory now and diminish the hostilities.
Thus we have the possibility of two elite, globalist memes breaking down. We've explored the Afghan one in several recent articles; the UK Telegraph explores the potential break-up of the EU in the article excerpted above, entitled "Dominique Strauss-Kahn was the single currency's cuckoo in the IMF nest." Here's a little more:
It is about time Europe's ownership of the International Monetary Fund, and particularly France's apparently divine right to the top job, was brought to a close. If Mr. Strauss-Kahn's nemesis in a New York hotel room loosens Europe's grip, then that may be no bad thing …
An IMF rescue is normally conditional on devaluation to restore competitiveness, and or a sovereign restructuring to put debt back on a sustainable footing. The single currency prevents devaluation, while the shock to the European banking system of a restructuring is judged too big a risk to contemplate. Far from solving the crisis, the bailouts have therefore virtually guaranteed a rolling series of periphery nation crises into the indefinite future.
In fact, Mr. Straus-Kahn's ignominious end should be seen as a way of breaking with precedent and appointing a non-European capable of seeing things in a less partial light. The trouble with Christine Lagarde is the same as Mr. Strauss-Kahn – she's part of the single currency establishment and she's determined that for now there will be neither debt restructuring nor exits.
The European Central Bank holds a very considerable proportion of Greece's national debt as collateral against funding. … If Greece were either to restructure, or leave the euro, these holdings would be correspondingly devalued and the ECB would be bust. The same goes for a number of European banks with large holdings of Greek sovereign debt, and indeed the Greek banking system as a whole and some of the country's main pension funds … It's all getting too intractable for words. There appears to be no workable solution that holds the whole thing together.
These are high stakes indeed. Strauss-Kahn's time as head of the IMF was drawing to a close anyway, but much of his term seems to have been devoted to propping up the EU as it is. The economic crisis, far from drawing the EU together (as the Eurocrats hoped and planned) has driven what is apparently an intractable wedge into the larger mechanism.
Strauss-Kahn is not by any means irreplaceable, but his downfall may bring the day of reckoning for the authoritarian Eurocrats a little bit closer. It would likely happen anyway but one of the unintended consequences of his arrest and presumed trial will be to speed up the process of EU entropy. Good.