Sunday, September 18, 2016

Stiglitz: Euro No Good

Stiglitz and Tom Clark - Paul Hertfield photo
Economist Jopeph Stiglitz is giving interviews in promoting his recently released book The Euro: How a Common Currency Threatens the Future of Europe in which he talks about the flawed economic fundamentals at the heart of the project that united Europe under a common currency and sought to integrate the European economies in one big border free economic zone. The experiment has failed, the former chief economist at the World Bank and a Nobel prize winner in economics says, because it caused capital to flow from poorer countries like Greece and Spain to richer countries like Germany, and because it increased inequality, which brings down upon an economy its own set of unfavorable consequences.

But the book is really an attack on Neoliberalism, the Thatcher/Reagan economic philosophy behind the Eurozone and behind trade deals like TPP and NAFTA and that guides current US economic policy and that the US political class, Democrat and Republican, have adopted, as Stiglitz concedes in an interview with Tom Clark at the UK's Prospect magazine.

If you'd like to listen to Stiglitz talking about all this the London School of Economics podcast interviewed him recently - podcasts are available in so many formats it's best to just search for it. If you go to Google News and search for Stiglitz many articles and interviews in print come up.

Stiglitz, who also served in the Bill Clinton administration, was originally behind Neoliberalism but he and a few other prominent economists, including Christine LeGarde who now heads up the International Monetary Fund, the IMF, have soured on it, and despite this and the fact that it has led to permanent economic stagnation -- what almost every economists is now calling "the new normal" -- Neoliberalism remains entrenched.

But the Capitalist class and its political enforcers will have to do something about Neoliberalism sooner if not later because the economic inequality and economic stagnation Neoliberalism has caused has also led to the rise of what they fear most, populism, in the US in the form of Bernie Sanders and Donald Trump and in Europe in the rise of UKIP Party in the UK and the National Front in France and in every other European country in some often frightening neo-Nazi form.

The Capitalist class and its political handmaids now have two choices; to ditch Neoliberalism or try to oppress populism. In the US, where the federal government including the Obama Administration has given multi-millions of dollars worth of of military equipment to local police forces and where every police department including Albuquerque's now trots out multiple SWAT teams, army tanks and legions of police on overtime in military assault costumes at the slightest hint of unrest or peaceful protest, and where protest movements like Occupy Wall Street, Black Lives Matter and the recent pipeline protests in the plains states have been met or put down with law enforcement violence, the route favored by our leaders so far has been oppression.

The presidential election now underway is inconsequential in this regard. Voters have a choice between a proven cold blooded killer who is 100 percent behind the Capitalist class -- Hillary Clinton -- and a con man -- Donald Trump -- who would do everything he's told to do but not nearly as effectively, or ruthlessly, I'd say. But oppression can't work forever, and the question is, if our rulers continue down the same path what form the decline and demise of the current system will take, being that the US population lacks a political  consciousness that would allow it to form some kind of alternative system and that the political class knows nothing but the Neoliberal/Reaganomics/Clintonism that it's been doing for more than 30 years now.

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