The Greek crisis exposes how the European Union has taken a wrong direction.

OXI

The European Union was founded on principles of social democracy.  Rooted in the Christian principles of “Rerum Novarum” the European experiment used to sit comfortably between the extreme worlds of US Capitalism and Russian Communism.  It offered a particular type of bargain, with protections for those at the bottom of society, and controls on rampant exploitation of people and workers.

In any politically led economic system we find politicians struggling to make sense of the complex interplay of economic factors.  A populist politician is unlikely to have a PhD in economics.  When politicians run into a capability gap they rely on specialist advisers.

Ideally these advisers should be free of vested interests, and should give dispassionate counsel.  At the most senior levels of the EU, and the respective national governments, we are seeing a different dynamic at play.

In the USA the nickname for the Treasury Dept in the Whitehouse is Government Sachs or the “Goldman Sachs” dept, referring to the large number of treasury secretaries from that investment house.  If you recruit stockbrokers to run government they create policies that favour the interests of big finance.  They push for lower corporate taxes, they cut welfare, government spending and reduce government regulation of industry.

These are exactly the forces we are seeing now in the European Union.  The post 2007 austerity programme was a philosophy designed by bankers for bankers.  For the average European the austerity programme has been a failure.   For bankers it has been an unqualified success.  The banking sector has recovered from near collapse, and the recovery has been paid for by ordinary citizens.

At last the Greeks have called time on the troika of the IMF, ECB and the European Commission.  Syriza was elected into power in Greece on an anti-austerity ticket.  That should have been a warning signal to the troika.  Instead of heeding the warning they blithely drove forward with their programme to steamroll the Greeks into paying banks back for bad loans.

The troika have tried and tried again to bully Tsipiras and his party into submission.  In response the Greek premier pulled out the most potent weapon in his arsenal “Democracy”.  He is resorting to the will of the people to gauge their support for his non-cooperation with the austerity agenda.

This does not sit at all well with the “Goldman Sachs” style banking & stockbroking mandarins who currently drive EU economic policy.  They are not accustomed to having their policies questioned even by politicians.  The concept of populist support is anathema to them.  They have no time for debt forgiveness or for wishy-washy neo-Keynesian economic policies.

The democratic prerogative should be no stranger to the politicians in the European Commission, the Council of Europe and the European Parliament. These are the people we have elected and appointed to guard the interests of the ordinary people of Europe.  These are the people who are failing.  They have given over too much power to the vested interests.

A thin understanding of economics is no excuse for the abrogation of responsibility that we see in the politicians in Europe.  The Greeks will speak on Sunday.  I expect them to come back with a resounding no, OXI!

Then we need to understand how we can help the economy at the bottom of our EU society.  This is Europe, not the USA.  This is about unification and inclusion, not about punishment and exclusion.

It is time to fix the EU model.

If you fancy an addition good read on this subject check out this link:  The Austerity Delusion

Ship of Fools

Jheronimus_Bosch_011

Ship of Fools by Hieronymus Bosch (1490-1500)

The allegorical concept of the ship of fools served in the middle ages as a counterpoint to the “Ark of Salvation” represented by the Catholic Church. The authorities in Rome used it as a teaching tool to expose the “folly” of independent thinking and the rise of Protestantism. In simple terms, the Catholic Church, with the Pope at the helm, was bound for the hereafter, and the Protestant churches were rudderless, leaderless, adrift and bound for who knows where?

In practical terms there were actual “ships of fools”. They were the renaissance version of the freak show. Communities could divest themselves of lunatics by handing them over to the ship of fools. When the ship docked you paid an entry fee to see the antics of the fools aboard.

The concept of the State as a ship is far older, going back to ancient Greece. Plato immortalised it in “The Republic” when he likened the good management of the state to the good captaincy of a ship. A well run state should be captained by a philosopher king, ideally one trained in the Platonic school.

It is very easy to string together the concepts of Ship of State and Ship of Fools to come up with the State of Fools that is the Irish Government. Recent revelations show how the Irish Government was played for a fool by the executives in Anglo Irish Bank. The tapes expose the bankers themselves to ridicule. They come across as little more than a clique of silly schoolboys playing games with a lot of money. Their behaviour would be puerile in a football locker room, it has no place in a national bank.

What is really sad is how the regulators and the government were asleep at the wheel. When they were called on deck to save the ship they didn’t know their location or their direction and were sailing without compass, sextant or chart. As long as the bankers were playing with bank money they exposed nobody but those foolish enough to trust them. When the Irish Government agreed to support the banks, they made the people of Ireland responsible for the bad behaviour of the bankers. Not just bad, but downright fraudulent behaviour.

If you asked me ten years ago for my opinion of those running our banks, our banking system and the government I would probably have believed them to be knowledgeable and capable. I would have thought that they held the best interests of the state at heart. I would have felt that they held their very well-paid positions through merit and deserved the money they earned.

Now I believe that the managers of our banks and our elected politicians are deeply flawed characters. They hold their own interests ahead of those of the state. They are not well qualified for what they do. They plan only in the very short term. They are grossly overpaid. They are a very, very expensive bunch of fools.

The Ship of State: by Quintus Horatius Flaccus (Horace)

O ship the fresh tide carries back to sea again.
Where are you going! Quickly, run for harbour.
Can’t you see how your sides
have been stripped bare of oars,

how your shattered masts and yards are groaning loudly
in the swift south-westerly, and bare of rigging,
your hull can scarce tolerate
the overpowering waters?

You haven’t a single sail that’s still intact now,
no gods, that people call to when they’re in trouble.
Though you’re built of Pontic pine,
a child of those famous forests,

though you can boast of your race, and an idle name:
the fearful sailor puts no faith in gaudy keels.
You must beware of being
merely a plaything of the winds.

You, who not long ago were troubling weariness
to me, and now are my passion and anxious care,
avoid the glistening seas
between the shining Cyclades.