Two Down--Merkel to Go!

European Leaders pursue new pact. Closer fiscal Ties.

What have they been doing wrong?


They attempted a solution that failed.

They repeated the failure.

They brought Europe to the brink of disaster.

They decided to talk about doing what they should have done in the first place.

These are the leaders. Oh, boy!


Further reports: The ECB has thus far refused to intervene. Why? Jean-Claude Trichet had a deep concern for his legacy. Too late!

With the new arrangement, if it is implemented—but more on that later—will give Madame Lagarde a larger role.  Now, perhaps Madame will not feel the pressure to ingratiate her self with Angela Merkel.

The ECB is now considering the larger efforts; some members anyway. Perhaps this means that some have more intelligence than a 5 lb bag of store brand cheese doodles. (2.27kg)

Sarkozy is eager for the new deal among the EuroCrats to be implemented. However, Angela Merkel wants to drag the process out—still unrepentant. Desolé. Remember what I said before? “…if it is implemented…”

Chancellor Merkel embraces the pretext of seeking consensus. Mind you, the inability to seek consensus in any reasonable time-frame is almost impossible. That is one of the causes of the problem in the first place.

Chancellor Merkel is concerned that non-Euro members don’t feel marginalised. This is the EuroZone—not a Nursery School. I am only going to imagine The Chancellor has been schooled by experts in American Marketing Strategies in advance of her attending

the meeting with President Obama.  “Oh, yes, Mr. President.  I don’t want the other nations to feel marginalised and low self-esteem.”

Thank you, Angela Merkel.

Now, what has brought Germany around to everyone else’s way of thinking? Is it the fact that the EuroZone is on the Brink of Disaster? No. It is the fact that the disaster is now washing up onto German Shores. That woke the DeutscheCrats real fast. Now maybe they will ask Chancellor Merkel to resign.


The euphemism has not effected Europe alone. The Wall Street Journal says “Berlin” when in means “Merkel”.

Monti takes over Italy. Borrowing costs rise. People blame Monti and not the 50% discount Merkel granted to Bond investors.

Of course, no disaster would be complete without the Economists.

Economists say the ECB can do more legally. Okay. We agree.

“But wait, there’s more.”

Economists have said:

Large Bond buys by the U.S. Federal Reserve and The Bank of England haven’t eroded their political independence. Here goes:

U.S. Federal Reserve. Operative Word(s): U.S.

The Bank of England. Operative Word: England.

The ECB. Operative Word: European.

If I caught that, everyone caught that. Why bother engaging in the pretext, pretense, and, well, academic flummery? You may be correct. However, how will we know?

“But wait, there’s more.”

“ECB loath to take actions that could spark a political backlash against it in Germany, the Euro’s most powerful member.” Maybe too powerful, eh?

New EuroPact Idea: Ask Merkel to leave office or ask Germany to leave the EuroUnion.

“Nothing for nothing,” as my Mom used to say. In other words, “The Price of Germany is too high a Price for German Participation.

If the EuroCrats threaten to kick Germany out, what are they going to do? Take their ball and go join another EuroUnion? Can I seriously suggest that? No; but the EuroCrats can—and should. What would that cause? Don’t worry. It won’t get that far. Germany will ask Chancellor Merkel to step down and go home. Nicely, of course.


The best part of all this is the question, why is Germany willing to work with the ROE? (Rest of Europe) Because the Crisis Hit Berlin.

Papandreou stepped down.

Berlusconi stepped down.

Now, perhaps, it is time for Merkel to step down.

The headline: Time Runs Short for Solution to EuroCrisis. Someone tell Chancellor Merkel…after time runs out!


Sincerely,

Slim


mailto:slimfairview@yahoo.com


Copyright © 2011 Slim Fairview



They refused to do what was necessary.

ɡrɛkoʊˈroʊmən

Finally, Good news is beginning to filtre out of the EuroCrisis.

Both Greece and Italy have chosen leaders. (You can't lead if you can't manage and politicians cannot manage.)

The leaders, in opposition to political wisdom but consistent with conventional wisdom, are technocrats.  Technocrat is a polite way of saying, someone with the ability to think.

There was a time when the empirical method was in full fury.  Run the test. Record the results. Repeat the test. Duplicate the results. Draw your conclusion.

Then, The US became infected with a Passion for Opinions. Express an opinion. Seek data to validate your opinion. Bask in the admiration of others.

For months I have been chiding the EuroCrats to understand some basics:  You cannot cut wages, fire people, raise property taxes, and call it a solution.  Finally, now that Greece is on the brink of failure and Italy is on the brink of catastrophe, people are starting to talk about growth. 

The EuroCrats figured out that clichés, slogans, and platitudes don't solve problems.

There has been a fixation with austerity--yes a necessity.  However, austerity without provisions for investment, economic development projects, and growth, is no solution.

There was another proposal.  Forcing investors to take a 50% loss. (Half a loaf is better than none.)  Investors don't invest money to mitigate losses. They make money to make a profit.

Then there was the Ponzi Scheme.  Go to China for investors.  Go to Brazil for investors.  Go to the Petrostates for investors.  That is a Ponzi Scheme.  I don't hear that being talked about anymore.  Not since I said as much on my blog and on Twitter.

Still, even as Greece and Italy are moving in the right direction, Chancellor Merkel is still working to be an impediment.

From USA Today:

Germany's Chancellor Angel Merkel told reporters in Berlin "it is very important ... that Italy wins back its credibility."

"That means the austerity package being implemented very quickly, as is now the plan, and above all the political leadership being clarified as quickly as possible -- because I think that is very important for Italy's credibility," Merkel said.

Chancellor Merkel seems incapable of celebrating the good news.  Greece and Italy are moving toward economic development and are taking responsible action by elevating those to leadership who are qualified, capable, realistic, practical, and I will stop here before I dig myself into an even deeper hole. 

Still, I am most optimistic.  And I believe I should be optimistic.  Why?  Because I am going to take some credit for what is going on.  Someone must have been reading the monographs on my blog and my tweets on Twitter, because what they are doing is what I've been saying they should be doing.  In addition, I heard no one saying what is being said until I started saying it.

The EuroCrats were clutching to a procedure for solving problems that failed repeatedly.

What did you do?
Did it work?
No?
Don't do that!

Papandreou resigned.  Berlusconi resigned.  Perhaps Chancellor Merkel will heed my admonition to "follow the path of the trajectory."  I am not necessarily saying Merkel resign in favour of, say, Wolfgang Schäuble. However, I am suggesting that Chancellor Merkel acknowledge that while austerity is necessary, it is ineffective and ineffectual without Economic Development and Growth.

Sincerely,

Slim

slimfairview@yahoo.com

Copyright (c) 2011 Slim Fairview

The Path of the Trajectory

Slimviews:  Commentary on Global Political and Economic Events by Slim Fairview.  Read my blog today or hear it from experts in a month or two. Slim

Perhaps I should not call it commentary.

"Everybody knows what everybody knows."  Slim Fairview [From The Quotations of Slim Fairview/ Copyright (c) 2011 Slim Fairview]

But I digress:

The latest reports out are that back in the mists of time, the fact that Greek debt was higher than reported and that prognosticators were saying this could lead to a default at some time in the future, were met with vehement denials and great acrimony.

"You show me disrespect. I got empowerment and dignity. I got an entitlement. Gimme something." [sic]

"Positive reinforcement of negative behaviour is a disincentive to improve." Slim Faiview.  The time for stern measures was then.  The EuroCrats failed.  They were bullied. 

Now that disaster has befallen Greece, Europe, Asia, The World, The EuroCrats are attempting to save face by taking stern measures. 

Ineffective, ineffectual, but stern.  And, too, they are clutching retentively to their ideologies like a two year old with his hands down his nappy.


You cannot have a solution that does not include economic development.

You cannot have a solution that does not increase the middle-class.

"The rise or fall of the middle class is a leading indicator of a nations future." [Success or Failure]  The Quotations of Slim Fairview.

Still, the EuroCrats will not budge.  This may be trite but it is true:  They are rearranging the deck chairs on the Titanic.

Papandreou was to resign.  Markets up.  Denial. Markets down.  Agreement to resign, Markets up. 

"Those who forget history are doomed to repeat it."  Santayana.

"Those who never learned history are doomed--period!"  Slim Fairview

Berlusconi to resign.  Markets up.  Denial. Market down.  When  € 500 billion, tell you to go, you go.  However, first there must be talk. Rumours. Denials. Pledges. Indignation. (Righteous or otherwise.) Accusations. Recriminations. Finally, a Sanctimonious Submitting of his Resignation--with deep regret.  And a nasty insinuation about his critics and the opposition.  I apologise if this seems harsh.  However, we've seen it before--all too often.

Meanwhile, the Greek Parliament (Critical of the US) is emulating the US Congress in handling serious debt crisis matters.  To assuage their bruised egos, the EuroCrats are comparing themselves (Contrasting) favourably to the US.  That must offer some satisfaction.  No solutions but some satisfaction nonetheless.

The only new visions the EuroCrats have embraced is to move from a failed policy and procedure of pursuing austerity with celerity and no mechanism for growth (rather stifling growth) and repeated larger doses of a medication that harms more than it hurts the patient.

There are some people who, when confronted by the consequences of their actions, will coagulate like white corpuscles to defend the body against the medication designed to heal the illness.” –Slim Fairview  

That is what the EuroCrats are doing.  Fighting the medication that will heal the illness.

The next step the EuroCrats are in the midst of taking:  A Ponzi Scheme.  Now that investors have lost half their investment, the EuroCrats are going to China for investors; to Brazil for investors; to the Petrostates for investors.  Call it what you will.  Define it any way you choose.  This is a Ponzi Scheme.

 If you are not laughing I will assume you understand the severity of the situation.

Instead of describing my blog as Commentary, let me say that it is more prescriptive than descriptive.  But don't bother listening to me.  Everybody always doesn't listen to me.


Bon chance.

Slim

slimfairview@yahoo.com

My Comment on The New York Times On Line.

http://community.nytimes.com/comments/www.nytimes.com/2011/11/05/world/europe/italy-agrees-to-imf-oversight.html?permid=46#comment46


Copyright (c) Slim Fairview