Sounds of EU Squawking
By Staff News & Analysis - September 24, 2010

Irish economy suffers shock contraction, fuels fears of a double-dip recession … Ireland's struggling economy suffered a fresh blow after growth contracted in the second quarter, heightening the risk that the indebted nation could suffer a double-dip recession. … The Irish economy shrank by 1.2% between April and June compared with the first three months of 2010, the Central Statistics Office said. – UK Telegraph

Dominant Social Theme: Hm-mm, we must try harder.

Free-Market Analysis: In this article we will seek once again to answer the question of why the elite has attempted to enforce austerity and why it is failing. Anyone, in our estimation, who is for increased freedom and less government control ought to root for the failure of EU-style austerity.

Ultimately, EU austerity is a kind of sub dominant social theme. The idea is that, "Government is terrific at providing services, but sometimes government gets too big and then it gets corrupt. So we must all pull together and collectively tighten our belts until government can get back to its proper size and provide the services we desperately need once again."

Here at the Bell, we've been documenting in a number of articles the emergent dominant social theme that government needs to be "rightsized." We've reported on one theoretical strategy that pits the "capitalism" of the West against the "state capitalism" of China, with the implicit idea being that as bad as large and repressive as Western capitalism is, it is still better than the alternative.

We reported on another effort out of the CATO institute to compare bureaucratic over-reach to taxes. The idea was to create a Laffer Curve for government that illustrated when the tipping point occurred – and some government became too much government. Of course, from our point of view, the less government the better. All government rules and regulations are inherent price fixes, and price fixes always result in queues, confiscations, scarcity and other marketplace distortions.

Austerity is a fear-based elite promotion in our view. A more succinct version of the above meme might be, "Unless we get government under control it will bankrupt us instead of serving us." But when one examines "austerity" more closely, it does not seem to be in our opinion to have many redeeming features from a free-market standpoint. On the surface, austerity seems to call for a reduction in government size – certainly in the profligate PIGS.

But what is the net result of austerity? We would make the argument that it is more of the IMF's unpleasant medicine. There is much rigor in it, but not much laissez-faire. Government is intended to shrink, that's true. But what is to shrink? In Ireland, we have read, the bureaucracy still maintains many of its perquisites; and salaries and benefits remain much higher than in the private sector. What this means is that "austerity" may be affecting services rather than public sector employment.

Additionally, in typical IMF fashion, taxes are raised in countries implementing austerity. The problem with IMF style solutions is that they never propose a greater role for the free-market. Government is still suppose to provide a wide gamut of services – from health care to free education to infrastructure but austerity likely means that government will do even less, and not any better.

Thus, essentially, the EU austerity program is a recipe for degrading infrastructure and essential services. Since austerity does not encourage (to the best of our knowledge) the entrance of private-sector competition, the end result will be a further impoverishment of these societies. It is in fact a kind of de-facto de-industrialization of the European South. Raising taxes just makes it worse. Will judicious civil disobedience and the specter of mass civil unrest (of the non-violent kind) destabilize the massive fraud that is the EU? The EU is an excrescence of the power elite, built by subterfuge with the intention of providing further support for world government.

But the pressure, in fact, is rising, we would argue. France has been shaken by strikes and there are more planned. Greece has seen considerable unrest and recently Spanish coal miners began an action over unpaid wages. Ireland was supposed to be a major EU austerity success story – as it had been accomplished with the seeming acquiescence of five million Irish people. But now, as we can see from the article excerpt beginning this analysis, the Irish austerity "miracle" is in doubt as well – and perhaps also Ireland's well-publicized patience.

The EU's end-goal is apparently George Orwell's vision of a boot "stamping forever" on the human face. Its creation is part of a familial and generational conspiracy to impose Western-style authoritarian world governance; its victims to date have been the citizens of the West itself. What is actually going on is the destruction of the middle class through regulations that make it impossible to create businesses and taxes that make it impossible to accumulate capital.

The imposition of austerity will no doubt further degrade the infrastructure of the countries to which it is being applied. This is a recipe for the impoverishment of a continent – which, likely, is what the power elite seeks. Impoverished individuals are often easier to control, or so the theory goes. Certainly, in their arrogance, the powers-that-be either believed they could contain any blowback, or that the blowback would of the sort that occurred in the 20th century – often mild and even ephemeral. Yet is this the case? We have noted of late certain squawks of dismay emanating from various august individuals – even at the UN:

UN chief urges tolerance to combat polarization … Secretary-General Ban Ki-moon warned kings, prime ministers and presidents of growing political polarization and social inequalities and implored U.N. members to show greater tolerance and mutual respect to bring the world together. In his keynote speech to the opening of the General Assembly's annual ministerial meeting, the U.N. chief told leaders from the 192-member nations that "today, we are being tested." Ban said people everywhere are living in fear of losing their jobs, too many are caught in conflict, "and we see a new politics at work – a politics of polarization." "We hear the language of hate, false divisions between `them' and `us,' those who insist on `their way' or `no way,'" he said. In times of such polarization and uncertainty, Ban said, "let us remember, the world still looks to the United Nations for moral and political leadership." – Reuters

And here is another one from an EU-oriented publication:

EU citizens no longer see benefits of internal market, Barnier says … The EU needs to revert to the principles of a social market economy as its citizens no longer feel served by the single market, EU internal market commissioner Michel Barnier has said. Speaking to a group of journalists … the centre-right French politician pleaded for finding "the means for reconciliation between citizens and the European economic project. And to re-find the initial objective [of the European Community] which was very much a social market economy." He indicated citizens no longer realise that the internal market, long considered among the EU's most cherished achievements, "improves their lives." The current economic climate with member states on the defensive amid rising unemployment and citizen unrest has made his job more difficult. The internal market remains vulnerable to the "increase in populistic and nationalistic tendencies," he said. – EU Observer

Brussels has long been out of control – from the standpoint of budget and ambitions – as has the UN itself. The authorities inhabiting such august real-estate provide the mechanism for further concentration of wealth and power. The elite and its enablers use fear-based promotional propaganda to frighten people into giving up the little they have. It then provides authoritarian receptacles to gather up what has been shaken free.

After Thoughts

In the 21st century, the truth-telling of the Internet has exposed this mechanism. The primary conversation taking place right now is the one between the Internet (a modern-day Gutenberg press) and the power elite itself. We have never taken any position on its ultimate outcome other than to say the elite likely may end up having to take a step back. Perhaps that process has begun.

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