Economics 101 - and a half

This seems to be doing the rounds at the moment and someone emailed it to me. It made me chuckle and is reproduced below, for your enlightenment and edification. I notice there is no mention of haircuts. Hat Tip to Pam.

Understanding Economics:
The Eurozone Bailout

It is a slow day in a little Greek Village. The rain is beating down and the streets are deserted. Times are tough, everybody is in debt, and everybody lives on credit.

On this particular day a rich German tourist is driving through the village, stops at the local hotel and lays a €100 note on the desk, telling the hotel owner he wants to inspect the rooms upstairs in order to pick one to spend the night.

The owner gives him some keys and, as soon as the visitor has walked upstairs, the hotelier grabs the €100 note and runs next door to pay his debt to the butcher.

The butcher takes the €100 note and runs down the street to repay his debt to the pig farmer.

The pig farmer takes the €100 note and heads off to pay his bill at the Farmer’s Co-Op.

The guy at the Farmers' Co-op takes the €100 note and runs to pay his drinks bill at the Taverna.

The Taverna owner slips the money along to the local prostitute drinking at the bar, who has also been facing hard times and has had to offer him "services" on credit.

The hooker then rushes to the hotel and pays off her room bill to the hotel owner with the €100 note.

The hotel proprietor then places the €100 note back on the counter so the rich traveller will not suspect anything. At that moment the traveller comes down the stairs, picks up the €100 note, states that the rooms are not satisfactory, pockets the money, and leaves town.

No one produced anything. No one earned anything. However, the whole village is now out of debt and looking to the future with a lot more optimism.

And that, Ladies and Gentlemen, is how the bailout package works.

Face to face, with the man who sold the world

The British Prime Minister - Is he ours (the UK’s), or is he theirs (the EU’s)?

“It’s beginning to look a lot like Christmas” as the song says and to paraphrase, it’s beginning to look a lot like he is theirs.

Cameron happily says and promises almost anything to get into power – a referendum for instance.

But in practice - That is an entirely different thing. He will never willingly allow the British electorate a European issue related referendum. Not unless he can fix it to give the “right” result with a "Have you stopped beating your wife?, Yes or No” type question. He has already shown where he stands by suppressing a free vote on the subject. Unfortunately the so-called Loyal Opposition seem equally shy of the subject.

When you think about it is hardly surprising. The Conservatives basically picked him because he was a clone of Tony Bliar An acorn that fell a little too close to the tree it seems.

Interestingly the other “Boy from Brazil” his deputy Clegg looks suspiciously Blairish in the right light too. Clearly despite the misleading (all things to all people – how Bliar is that) title “Liberal” and “Democrat” it is questionable if he is either.

Clearly he feels he and the state have a far greater right to have a say as to what is done with private property than the rightful owners and the only way to ultimately enforce that way is - well force - So for all his spin that is pure authoritarian socialism. Cameron/Clegg birds of a feather.

So, the Euro, literally at least partly “jerry built” on foundations of the very best sand.

Now the North wind doth blow and it is in deep deep doo-doo. Rather than contemplate a soft landing the princes of Europe, the political elite, now seem hell bent on an all or nothing approach, metaphorically ready to shoot the first person to make a run for it.

To paraphrase Bowie, Oh no. Not us. We never lost control – Holding the threat of financial Armageddon over Europe to force, what would effectively be a political union, at least on the Euro-zone States. A Superstate in anybody honest’s book.

Ironically having attempted to dominate Europe and the world by hook individually it now looks as if France and Germany may be within a whisker of being shoehorned into dominating it collectively by crook, so to speak. Déjà vu, is a ironically a suitably continental expression for where we find ourselves.

The Greek and the Italian electorate have found out what this means, they essentially no longer have elected heads of state. They have Eurocrats, Commissars instead.

Rather like the EU in fact, although it has a “decorative parliament” it is effectively ruled by Commissioners who’s finances are so murky no hones accountant will sign off on an audit of them. It has a so-called president that no electorate voted for.

Its laws and justice system are essentially Statist, authoritarian, Napoleonic, more guilty until proven innocent. More “Do you have a permit to do that?” as opposed to “It’s not against the law”.. Continental oil to the English speaker’s water.

Surely a point, if ever there were one, for the UK to stop and think to it’s self. “Hang on a mo!” Is this really what I signed up for when I joined what I was promised was just a friendly trade association the Common Market”?

Back when we were so eager we dumped so many of our existing profitable trade partners and markets to do it too.

The Common Market looked quite sexy and cute back then didn’t it, wearing a beret, a sexy pencil skirt, smoking a cool Gauloises and quoting beat poetry, you had so much in common. That was then, this is now.

Now she wants different things, she looks sort of shifty, a little scary like her mother and suspiciously like she spent the savings and wants to claim your life insurance money. They are mushrooms in the stroganoff aren’t they? Oh and the door seems to be locked.

So a perfect time to have a referendum then, you might think. A vitally necessary time. Dave Cameron clearly does not. And one has to question his fitness to hold the office he does because of that. Is he really fit for purpose? Is he representing our interests at all. There is a word for someone like that.

So, a not unreasonable interpretation of the question:

“Do you want to be assimilated by the Borg or not?” :-)

Care about Democracy? Be afraid. Be very afraid

The Euro crisis. Unless you have been on a simulated mission to Mars, or heard goats in a village in Africa it can hardly escaped your attention that the Euro is in difficulties.

It was always going to happen, given how it was set up. Sooner or later things would get more out of kilter and eventually something would trigger the systems falling apart.

But then that was avoided as a problem for another day by the European elite railroading the European state through over the wishes of what one suspects they see as an “unenlightened” electorate.

It is questionable if the Euro can function for any time as a currency without both political integration of the states using it and massive transfers of cash from the Northern states to the Club Med States.

But no matter. For many of the Europhile elite the Euro is a symbol of unity and it binds states and politicians more tightly into the developing European Super-state. None must be allowed to slip from the fold.

Now it seems they had seen a way to turn what for them was an unthinkable threat into an advantage… To further their goals.

When Greece began to wobble so badly the Prime Minister George Papandreou, faced with massive protests over crippling austerity measures the EU wished to impose, apparently decided the only way he could avoid massive civil unrest and maybe worse was to get the people onside.

He decided, not unreasonably, to hold a referendum on the measures. If they were accepted he had a solid mandate, if not it would be brutally clear to all, that without the banks taking, not so much a hair cut on Greek debt, but more like a hippy getting a crew cut it would be impossible for Greece to remain in the Euro and he might get a better deal from Europe.

Either that or Greece might default, re-instate the Drachma and become more competitive, at least as a tourist destination, by devaluing. It seems the Strength of the euro is harming the Greek tourist income as it haemorrhages to Turkey and other non Euro states.

The referendum might have been better for Greece and the democratic process, but it appears that those considerations are irrelevant in European politics.

The European patrician political elite have had unfortunate experiences with referenda. They can't be relied upon to produce the "right" result and have to be repeated again and again and again, with pressure applied, until they eventually do get the “right” result.

They moved speedily and effectively. One can only suppose offers were made that were simply put "impossible to refuse".

Suddenly the referendum was off the cards and Papandreou might as well have been declared taken ill at his dacha in the Crimea in time honoured fashion.

Presto-chango! The Greek PM was suddenly (blnik and you'll miss it) Lucas Papademos the entirely unelected ex head of the European Bank. His Foreign Minister? The now Ex EU environment commissioner Stavros Dimas.

And the Greek parliament were all lining up behind him in a “Unity” government. No referendum, No election. No Democracy…

Turning our eyes west we find Italy. Half of it at least another Club Med Euro Economy. Their debt is becoming too expensive as markets worry and their economy is a bit too big to easily bail out. PM Silvio Berlusconi, one minute declaring he is fighting fit to lead, the next disappearing stage left with the aid of a hook on a long pole in true vaudeville stylie.

And who quietly shuffles on sideways to replace him (sans elections) hoping the average punter does not notice?

Non other than Mario Monti, Ex European Competition Commissioner (what a coincidence) and founder - president of the Bruegel European Economic think-tank. Also an arch critic of Burlusconi. Not a game character at all. :-)

So the new European solution to wobbly Club-Med economies? Let’s not bother with that old fashioned democracy stuff shall we?

“Hey! Let’s just make dem bozos an offer dey can’t refuse an put our own guys in”.

I expect it is not lost on them that if the natives cut up too rough the is always the shiny new EUROGENDFOR waiting quietly tucked out of sight, like a club with nails in held behind their back.

EUROGENDFOR or EGF standing for European Gendarmerie Force and modelled (Oh joy!) after the French Gendarmerie and the Italian Unità Specializzate Multinazionali (M.S.U.) of the Carabinieri . Staffed by nationals from (naturally) the French Gendarmerie, the Italian Carabinieri, the Spanish Civil Guard, Portuguese National Republican Guard, Romanian Gendarmerie and the Dutch Royal Marechaussee.

Mostly authentically “Napolionically European” traditions, several used to enforce the will of dictatorships in living memory.

To mix metaphors are we looking at the nativity of some sort of western “Warsaw Pact MK II” with :-) frilly covers to disguise the tanks?

Maybe more State Capitalism Technocracy “China Syndrome”?

Oh - and before anyone in the UK starts to feel too smug. Don’t forget David Cameron’s sudden volt face about a promised British referendum on Europe, or the fact that he (thuggishly in parliamentary terms) prevented a proper vote on the question recently after parliament was petitioned to debate it under a system he set up.