On the events in Europe this past week, I'm going to quote Marcus Aurelias (most often cited in popular culture by Hannibal Lecter):
"Of each particular thing ask: what is it in itself? What is its nature? What does he do, this man you seek?"
The first principle of any socialist, whatever else the circumstances, is that a socialists pretends things. They pretend that one person's problems can be solved by passing a law restricting another person. Or they pretend that a shortage today can be solved by plans for abundance tomorrow. Or they pretend that the multitudes can dine on just a few loaves and fishes - even without a miracle.
Mostly they pretend that 2+2 = 5 - or whatever their politics requires it to. Maybe the socialist leader believes what he's pretending which would make him a neophyte, or maybe he doesn't, which would make him a cynic. But either way, a Socialist's plans are always to pretend. That is his/her nature.
The election results in Europe are actually kind of complicated - as it always is in a multi-party system. But that does not change what the Socialists are. And since everything in Europe still depends on Germany, you can think of this as Ms. Merkel (and Euro-cratic view that she represents) having some defiant and poorly behaved new pets that she needs to train. When you're teaching a dog - sometimes you give it a treat and sometimes you whack it on the nose with a newspaper. Ms. Merkel and the Eurocrats will have to do both before it's over.
But none of this changes my long term view. In Europe they will do WHATEVER is necessary to preserve the power structure as is. Departing the euro isn't an option for any country that wants to continue to sell its debt in the public markets. To do so is an admission that the game is over, and local anarchy will be the only result. The only thing supporting the periphey's debt now is the implied Credit derivative that they're being issued by the ECB. Take that away, and no one will be willing take a chance on them.
So the music will continue, and dance will go on - albeit with different dancers. We will now all pretend things that we didn't pretend before. All sorts of 'villains' will be blamed, and all sorts of 'saviors' will emerge - new punitive laws in hand - in an effort to finally punish the 'villains' who have been ruining things in Europe for the noble masses. And in my opinion, nothing meaningful will change, because pretending won't change it. And that's all a socialist really knows how to do.
5 comments:
excellent summary..... your 2+2=5 scenerio sums up the equation of using austerity to grow your way out of a defecit.their socialist structure makes it dam near impossible to cut salaries. fire people. break unions etc. and lower their cost structure and thus be competative..you cant be austere and hike taxes and grow your way out of this mess. that is of course unless you beleive 2+2=5
Perhaps the greatest Stoic philosopher was Epictetus, a slave, who postulated that one could live a virtuous and therefore satisfying life even with a crappy job like "slave." Interestingly, Marcus Aurelius seems to have regarded "Roman Emperor" as another crappy job.
For modern readers interested in Stoicism, I'd recommend Admiral Jim Stockdale's book "Thoughts of a Philosophical Fighter Pilot." The job of "prominent American officer in a Vietnamese prison" was probably even crappier than that of a slave in classical times.
With all due respect to a man who wrote things that low rent chumps like me are still reading 2 millennium later, I imagine it's a tad easier being a slave to rich roman and a friend to princes than it is to be a chained up in a galley or digging a hole someplace.
Virtue is always easier with a full belly. This of course takes nothing away from Admiral Stockdale who had to cope with that burden as well.
Will Europe now Pretend that the Left Wing Party with the Coalition in Greece didn't just demand a moratorium on Greek Debt?
This eefectively steals any remaining thunder in Hollande's bag...
oh - it's gonna be a wacky summer
I think the question is, can the left in Greece really see what the future for Greeks will be if they return to the Drachma. I think the only reason it looks appealing (to those who find it so) is because they believe it will let them finally set 2+2 = 5 with inflation making up the difference.
But the Euro-crats can't let it happen or they're done. So they need to start killing and stripping teenagers and putting them in the trunks of cars all over Greece. However many it takes. (I'm speaking metaphorically of course.)
Put another way, in the broadest sense and speaking just between us girls, I think it's a mistake to think that this issue will be addressed within the current legal framework. I think the law is more malleable than finance, so it's the law which will change - even if the present law is supposed to prevent it from doing so.
And once you see that as the path of least resistance, it's clear that the Euro-crat vision is the one that will prevail - for now.
It's all a short vol trade. It won't really blow up until it REALLY blows up. and I don't think we're there yet.
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