Yves Desmet, political commentator of De Morgen, one of the leading Belgian intellectual news papers, asks himself if we have to arm ourselves against an economical-financial war. “The European monetary union, seems ‘à la tête du client’ to be targeted by the rating bureaus, without any reasonable explanation.”
Dear mister ambassador, Dear Howard Gutman,
First of all allow me with offering you my best wishes and my felicitations for the unique prestation in which you have visited all Belgian cities and communities. You clearly have a heart for our country and therefore I do dare to ask you a perhaps somewhat impertinent question. It has been occupying my mind for some time now, and since we have had the new years recepetions, some policy makers seem to be running around with the question as well. Therefore, baldly: could it be that a part of your country has started an economical-financial war against us, Europe?
It might sound grotesque at first sight, I admit, but follow my reasoning.
It all started with the pressure of the rating bureaus, which has been holding on for months now, it as if they seem to degrade something on the European continent, every other day. If it’s not the national governments, it’s the European emergency fund. It will probably also not slip your mind that with these actions, the crisis of the euro seems to worsen every time. And even though we have to be prepared to reflect upon ourselves, the behaviour of the bureaus seem to trigger some questions.
For example, isn’t it strange that the trusthworthy rating bureaus, exclusively in your country, haven’t been able to see the crisis coming in the United States itself? Even more, they were rating Lehman Brothers even with the highest credit worthability until the day of failure. And though your country has a debit position per capita which resembles the position of the European, we don’t see rating downgrades there. When Moody’s was about to downgrade just one step, a small phone call to the major shareholder Warren Buffet, was enough to make them walk in your flow again. And the boss of S&P, who did dare to lower the rating, could leave the buidling a month later, with a bunch of flowers in his hands.
Exclusively American monopoly
Great Britain, in the meantime almost your most eastern province, has a larger budget deficit than France, and a resembling debt, but they remain out of range. Or just take a look at Japan, where the national debts raise until a beautiful 200%, have you heard something of the rating bureaus? Estland and Hungary, countries without budget deficits and the lowest debts of Europe, on the contrary, get substantial lower ratings than Great Britain.
Rating the credit worthability has become an exclusively American monopoly, and the latter shows that it is not done by objective and measurable parameters, but is aimed quite exclusively against the members of the European monetary union, who have become a little targeted à la tête du client, without any valuable explanation. But in the cascade of the rating downgrades, the euro has become weaker than the dollar.
Okay, that in itself is not a reason to become paranoid, but there is more. The rating bureaus are a part of – what I would call to simply things, the Wall street-faction of your society, the ‘top one percent’ that has been making the policies of your country for the last decades, and who have seen how president Barack Obama came into the picture. It is most fascinating to hear from the people who want to chase him out of the White House, what they have to tell about Europe. Mitt Romney is blaming Obama, for example “to want to transform the US to a European wellfare state”. Numerous variations on this, for him terrifying vision of the future, turn up every time again in his speeches, where he warns for something that “would poison the very spirit of America”. The most beautiful one of all was when he said: “Europe isn’t working in Europe. It is not going to work here.” Rick Santorum completely agrees with him, and stated that Obama “tries to force the European socialism onto the United States”.
And it was completely beautiful with Newt Gingrich, who was launching television spots where he was showing – his opponent – Mitt Romney who was speaking – for the love of God – French! Imagine, we wouldn’t be able to go and vote for someone who is speaking the language of the devil, that stalinistic Europe where there is a wellfare state that doesn’t only take in account the ‘top one percent’, but who aims to offer a secure social care for every single person. A Europe from which some of it’s members refused to go to your Iraqi-war, which is still held against them.
Now the image of a ‘failed Europe’ is a bit caricatural. Take for instance the wicked French, who just got a spanking with a new downgrade. According to the figures of the United States Bureau of Labor – I will use the American statistics themselves – the GNP per capita in France was 64% in 1960. In 2012 it had risen to 73 per cent. Those fuilty, good for nothing French socialists are about to overrun you! And even with a higher quality of life, because they seem to only work 1.440 hours a year, while the American 1.740 (same source).
In 1960, the OESO of Yves Leterme then says, that the French life expectancy is about the same as the American, but today the French live about 3 years longer than you. Not everything is perfect here, but we aren’t as ‘failed’ as you like to picture it.
Clash of civilizations
On the other side I like to take two small statistics – also American – from recent blogs from Paul Krugman, Nobel Prize winner of economy and New York Times-columnist. From the first we can read that the top one percent of your country, pays 5 per cent less income tax than the middle class. From a second, we see that the American middle class incomes have dubbled for the period 1940-1970, just like and parallel with the American GNP. Between 1970 and now, the GNP dubbled again, but now the income of the middle class just rose a bare 20 per cent. The rest went to that ‘top one percent’.
How imperfect as it might be, mister ambassador, the European model does serve a larger social protection and redistribution of wealth than the American, and we would like to keep it that way. And though some of them would like it more liberal, and others more social, there is something like the European consensus over the merits of our model, which is now heavily under fire by the cuts and savings being stacked up by the rating downgrades.
I was never someone who believed in conspiracy theories, but I do want to ask you this question. You probably know the film Wall street, in which Michael Douglas plays a by greed driven Gordon Gekko, a man who realizes he can earn more money by destroying things, rather than by creating. That is exactly why speculative ‘shorters’ still earn more than bonafide entrepreneurs. Could it be possible that the Gordon Gekko’s of your country have started an economical-financial war against Europe’s system, with the rating bureaus as their first storm troupers? Because if so, it might be about time we would start to arm ourselves against that.
With kind greetings,
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