Opinion

Opinion

Opinion: Amid crisis, Europe resists extremism

May 21, 2013

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— It hardly qualifies as breaking news that Europe is in the middle of a deep and protracted economic contraction. When a story, no matter how shocking, goes on for years, the natural inclination is to let it fade to the background of our awareness. But a visit to Spain — even to one of the cities where the economic tragedy does a good job of hiding behind hordes of tourists and beautiful architecture — is a reminder of the extent of the disaster that has befallen Europe, until recently one of the world’s most prosperous regions.

Here in Spain, unemployment has reached 27 percent, higher than that experienced by the United States during the Great Depression. For young people, the unemployment rate is more than 57 percent. Home prices have collapsed, and continue falling. In Greece, the situation is even worse.

Governments have responded with brutal austerity measures, laying off workers, raising taxes, and slashing spending.

An existential test

“Europe,” a term that connotes a luxurious blend of culture, history and modernity, is going through a major existential test with calamitous human consequences. Even so, I think the European model is, in fact, passing the test.

Let me tell you why.

When the European Union started taking shape, unfurling itself from a modest trade group to become an ambitious economic and political union, the emphasis was, as it is now, on the economic and political aspects of the project. In reality, however, there was another purpose, one that was spoken of only in conspiratorially low tones.

Europe is more than a little afraid of itself. The 20th century showed Europeans a side of their vaunted cultures that left them shocked, perhaps forever.

EU a hedge against war

Europeans speak with little bashfulness about the European Union’s original aim to create an alliance to prevent one country from going to war against its neighbors. They are generally referring to Germany when they say this, reliving the bad old days of European wars in which Germany, in league with one or more neighboring powers, launched military quests that resulted in tens of millions of deaths.

There was more to the EU idea than keeping Germany from going to war. The unspoken aim of the European model was to prevent swings into the dangerous beliefs of extremism. Europe, after all, was the birthplace of some of the worst totalitarian ideologies of all time. European minds knitted together social resentment, phony science, and supposedly high-minded philosophy with well-known results. It was Europe that gave the world fascism, with its most grotesque incarnation in Nazi Germany. The most extreme ideologies of the left also came from European thinkers pondering the answer to the world’s economic and social riddles.

Sadly, the worst of Europe spread like drug-resistant bacteria to other parts of the world. When Cambodia suffered a slaughter at the hands of the bloodthirsty Pol Pot regime, for example, one could trace Pol Pot’s education to the cafes of Paris and the classrooms of the Sorbonne.

Extremist rumblings

Which brings us to the 21st century trauma of today’s Eurozone.

It’s not uncommon to stumble into a political demonstration in one of Barcelona’s streets. Strikes and protests have become commonplace, which is hardly surprising considering the depth and duration of the crisis. Some five years have passed since it all began, and the experts say the end of this dark tunnel is not yet within sight.

The people, here and in much of Europe, particularly in the badly afflicted Mediterranean areas, are beyond fed up with their governments. They resent the European austerity prescription, and many say Germany, Europe’s economic powerhouse, has emerged dominant in Europe after all.

In spite of all that, the extremist rumblings, for the most part, have failed to reach truly alarming levels. There are some noteworthy exceptions. In Greece, the Golden Dawn, with its Swastika-inspired logo and similarly Nazi-like ideology, has made significant gains. In Hungary, anti-Semitism is undergoing a revolting revival.

Everywhere, extremist parties enjoy some rise in popularity. But given the depth of the misery, it would be unrealistic to expect politics as usual, without a dash of nationalistic fervor and “anti-other” ferment.

The bad old days

For the most part, Europeans have no nostalgia for the bad old days of extremism. Considering how bad things are, that is a veritable triumph for the ideals of those who founded the modern, and admittedly struggling “Europe.”

Unemployment is much too high and the path out of the crisis is not altogether clear. And yet, by mostly resisting the temptation of extremism, Europe is passing this difficult test.

— Frida Ghitis writes about global affairs for The Miami Herald. Her email address is fjghitis@gmail.com.

— Frida Ghitis writes about global affairs for The Miami Herald. Her email address is fjghitis@gmail.com.

Comments

just_another_bozo_on_this_bus 1 year, 11 months ago

You're completely wrong, Frida. Extremism has taken hold of Europe-- the extremism of the banks and the financial elites who are forcing a grinding austerity on the vast majority merely to preserve their grip on their wealth.

And the elites of Wall Street and the leaders of the two major parties in the US (particularly the Republican Party) intend to do the same in the US. Don't be surprised when this leads to 25% unemployment in this country, as well-- we're already well over 15%, if counted honestly.

jhawkinsf 1 year, 11 months ago

It all depends on how you define "grinding austerity". Greece is considering lowering it's retirement age from 55 while Germany is considering raising it's from 65. Meanwhile, one country is asking for money from the other.

just_another_bozo_on_this_bus 1 year, 11 months ago

Retirement ages aren't irrelevant in these situations, but they are a very minor part of it, considering that one way to decrease the very high rates of unemployment among the young is to allow the retirement of older workers at lower ages.

But if you want to distill a very complex situation down to one factor, that factor has to be the behavior of the world's casino-mentality banks and financial markets, and austerity measures exist strictly for their benefit, at the expense of the vast majority.

jhawkinsf 1 year, 11 months ago

A couple of years ago, while listening to NPR, they did a story on a French bus driver, someone who worked for the government. He said that when hired, he was promised a retirement after 20 years of work. If memory serves, he then did his 20 and wanted to retire at age 41.

Now, I shouldn't have to state what I think is obvious. No government should have made that promise and no individual should have believed that promise. Europe's "grinding austerity", as you put it, is the result of governments promising too much and people believing what they wanted to believe. Sorry, Europe, but welcome to the real world.

just_another_bozo_on_this_bus 1 year, 11 months ago

"is the result of governments promising too much and people believing what they wanted to believe. Sorry, Europe, but welcome to the real world."

Firstable, the percentage of people retiring at age 41 is pretty small. So is that part of the problem? I suppose a minor part. But is it the root of the problem? No. Not even close. And austerity that throws people into poverty, unemployment and homelessness, which in turn causes a downward spiral in the whole economy, has only two results-- maintaining the wealth of the already wealthy, and screwing everyone else.

Corey Williams 1 year, 11 months ago

How much money would the bus driver receive at retirement?

"...if you stay in the armed forces for 20 or more years, you are eligible to receive a pension based on a percentage of your basic pay..."

http://www.military.com/benefits/military-pay/the-military-retirement-system.html

chootspa 1 year, 11 months ago

Turns out the government of this country does actually make that sort of promise.

just_another_bozo_on_this_bus 1 year, 11 months ago

"Unless you can just print money that is."

The government can do precisely that. And if that money is spent on things that really need doing, it puts people back to work, and the economy recovers.

Armstrong 1 year, 11 months ago

Until the dollar is so devalued it is worthless. Face it ya just dont get it

just_another_bozo_on_this_bus 1 year, 11 months ago

It really doesn't matter how much the dollar is worth if the great majority of people can't earn enough of them to survive. And the race to the bottom (for the vast majority) that's at the core of austerity hysteria is having precisely that effect.

Armstrong 1 year, 11 months ago

Gosh Boz I agree with you, under Barry's watch we are on that path. Thanks for pointing that out.

just_another_bozo_on_this_bus 1 year, 11 months ago

No, you don't agree with me. Why did you even say that?

Armstrong 1 year, 11 months ago

It's true. Your predictions of gloom and doom are fairly close at times however your economic logic is misguided. Our Socialist in Chief is leading us down the same path as Europe. The differeence ? You want to blame the Republicans, I blame Barry and the takers for trying to implement an unsustainable scenario that will result in a lose / lose situation for all. Simple math, simple economics. Let the numbers talk and stop propping up a failure in the making.

just_another_bozo_on_this_bus 1 year, 11 months ago

Socialist in Chief? Obama has been a great friend of Wall Street, and is about as far from socialist as you can get. It's fine to criticize Obama, but at least get a clue before you spout.

Armstrong 1 year, 11 months ago

Obamacare -end of discusion, you're welcome

just_another_bozo_on_this_bus 1 year, 11 months ago

Regardless of whether you approve of Obamacare, there's hardly anything socialist about. As a matter of fact, it relies very heavily on the entrenchment of the corporations and private interests who have controlled healthcare in this country for decades.

George Lippencott 1 year, 11 months ago

Bozo - you seem to not appreciate the financial elites. Where should the investment funding come from - the government?

just_another_bozo_on_this_bus 1 year, 11 months ago

It should come from all of us as much as possible. But wealth has become so concentrated in the hands of so few, investment decisions are not made in the best interest of the vast majority.

George Lippencott 1 year, 11 months ago

I would opt for increasing taxes on the rich, reducing taxes on the upper half of the middle and requiring everyone to pay toward the operation of the government. That would increase the possibility of the middle class investing more in replacement for the rich investing less.

Of course you would have to break the control of the investment mechanism by the few and move it to the many. I believe that Mr. Obama is trying to do that, if not always successfully.

So now we have the middle class driving investment and the process of investment. What next?

oakfarm 1 year, 11 months ago

It was politicians and lawyers that created the mechanisms for the financial crisis. Banks and Wall Street just followed the rules, e.g., writing subprime loans for those who could not afford them (but congress said you had too give it to them), insuring mortgages that they 'knew' would never result in default (because congress told them so). It's like Apple not paying any taxes on billions in profits, by complying with the laws congress wrote. And now those same congressmen are asking Apple to pay more taxes then the law obligates them to pay. Don't blame, business, bankers, or Wall Street. Look at those making the rules and getting rich while serving in congress.

jafs 1 year, 11 months ago

Actually there was clear fraud and misbehavior among private sector folks.

One of the most obvious examples of that involves the credit rating agencies, which gave risky and questionable investment vehicles high ratings.

George Lippencott 1 year, 11 months ago

yes but to cover the government pressure to accomplish a social goal. The government can create a lot of pressure on business as some of the current issues about government actions suggest.

jafs 1 year, 11 months ago

Nope.

There's no evidence at all that your statement is true, based on the investigation into the meltdown that's been completed.

Greed was what drove the private sector to engage in their activities, not the government.

deec 1 year, 11 months ago

Germany won World War III without firing a shot. Well, they are calling the shots economically so they can control Europe via the IMF and EU.

jhawkinsf 1 year, 11 months ago

Germany is essentially floating the rest of the EU. I'd say they're in the process of losing this battle.

deec 1 year, 11 months ago

Of course they are also largely dictating the control and destruction of the economies of Greece, Ireland, Spain, Portugal, Ireland and Italy. So I'd say they've won.

jhawkinsf 1 year, 11 months ago

The policies of Greece, Ireland, Spain, Portugal and Italy destroyed their own economies. Germany just isn't giving them the bailout in precisely the way they want. After all, all those countries can simply choose to not accept the terms of the EU (yes, largely Germany) and do whatever they want. Which will lead to consequences they don't wish to face. Germany is throwing them a life line. They can drown on their own, if that's their choice.

George Lippencott 1 year, 11 months ago

This topic always intrigues me. Europe is supposed to have a highly desirable social welfare system. Could the costs of that system discourage innovation and exploratory research or at last the production of the fruits of same because the taxes are too high on the productive portions of the society? We and now China and the far east benefit from that as people who are innovative move themselves or the fruits of their labors to where that innovation is appreciated - not only in salary but in a tax system that does not penalize enterprise. I am so glad that Europe and now us are creating jobs out there in the "far: east"

just_another_bozo_on_this_bus 1 year, 11 months ago

If it were strictly a matter of the the social welfare system, Germany and the Scandinavian countries would be hit just as hard, since they have among the most extensive systems in the entire world.

Wanna know which country as recovered the best from the collapse of 2008? Iceland. And what was their secret? They said "no" to austerity hysteria.

oakfarm 1 year, 11 months ago

Using Iceland as an example of a country is pointless. It is basically a very small city. Its strategy has nothing to offer any reasonably sized country. You'd be better off looking at Cyprus as an example, not Iceland.

deec 1 year, 11 months ago

One thing Iceland is doing right is prosecuting the crooked banksters who caused the financial collapse there.

just_another_bozo_on_this_bus 1 year, 11 months ago

"Why would you bring up Iceland,"

Because it's an example of a country that's doing pretty well by going against the trend of austerity hysteria.

Its population is irrelevant.

George Lippencott 1 year, 11 months ago

Not sure Iceland is a good example. Small market and long time history of broad social programs. Also not much foreign investment.

The system works if the revenue raised covers the cost of the programs - remember Germany has a broad social program.. If you have to borrow to cover the costs of your largess you get to a Greece or a Spain or a Portugal or an Italy or an Ireland.

Perhaps if that list had started to reduce their largess to what they could cover with their tax system some years ago the need for austerity would be less. Spending your way out of a big deficit without balancing your accounts will not work. All of these countries increased revenues internally. Once that is done austerity is the only options . The single question is how fast.

When you need to borrow the cost of the borrowing is determined by those who loan the money. Since most private loans are prohibitive at this point the only alternative is government to government. That means German taxpayers are covering goodies for Greek citizens. It is therefore not surprising that austerity is their demand.

just_another_bozo_on_this_bus 1 year, 11 months ago

"Not sure Iceland is a good example. "

Of course not-- it disproves your ideological biases.

jhawkinsf 1 year, 11 months ago

As I recall, Iceland received substantial bailouts from several European countries as well as the IMF. Will they be bailing us out as well?

just_another_bozo_on_this_bus 1 year, 11 months ago

We don't need a bailout. We just need to act in a rational and sane manner. But we don't get that with austerity hysteria.

jhawkinsf 1 year, 11 months ago

What you call austerity hysteria I call living within ones means.

If you find yourself over-extended, cut back. You're the one Bozo, who frequently calls for expanded deficit spending, which requires borrowing, leading to being over-extended in the future. What's worse is that you suggest that once we've become over-extended, we should over-extend ourselves some more.

I believe a rational and sound fiscal policy is to decide what we need and then tax ourselves that amount. When we really pay for what we demand, rather than borrowing from our children and grandchildren, then and only then will we be forced to decide what we really need and what we can really do without.

just_another_bozo_on_this_bus 1 year, 11 months ago

The worst thing we can do for our children and grandchildren is to leave them a trashed economy, crumbling infrastructure, a limited education system, zero safety net, inadequate/non-existent healthcare systems, and an environment/ecology that can't support human populations, i.e., real debts rather than abstract ones. But that's precisely what austerity hysteria will bring.

jafs 1 year, 11 months ago

You're creating a false choice between the things you mention and huge budget debts/deficits.

jhawkinsf 1 year, 11 months ago

You're assuming that by loading up debt on our children's credit card that we'll avoid a trashed economy, crumbling infrastructure, etc. Why, because government fixes those things in an efficient manner? I'm not wearing rose colored glasses, so I don't see government in the same light that you do.

But the real tragedy is that because the inefficiency of government and the failures of government are being put on someone else's credit card, we don't care enough to make the changes that are necessary. If we were really paying for those things, rather than someone else, we'd demand that the infrastructure being fixed, we'd demand that we had education and health care. We'd demand that we be getting our money's worth. But as long as it's not really our money paying for those things, we really don't care that much.

Let me give you an example of how it works. Suppose the EU bails out Greece. Or suppose they don't. Do you really believe that the majority of Americans really care? It's not our money, so we really don't. Now suppose there was a proposal that the U.S. bail out Greece. You better believe Americans would become interested. If it's our money, we'll be shouting at the top of our lungs. (BTW - Don't you assume that Italy and Germany, both EU members, are looking at a potential bailout in very different ways? Of course they do, the bailout is coming from Germany, not Italy.)

Call it enlightened self interest. Call it self centered greed. Whatever. So as long as we continue down the path we're on, or the path you suggest, we'll not only leave our children all those things you mentioned, we'll be leaving them the additional problem of a huge debt.

jafs 1 year, 11 months ago

"Whatever"??

There's a huge difference between enlightened self interest and self centered greed.

jhawkinsf 1 year, 11 months ago

If the net result is the same, what you call it is just you judging, using your own values. That's fine. But the net result is still the same.

jafs 1 year, 11 months ago

Not at all - there's a substantial difference in the definition of those two terms.

I guess you're saying that "the ends justify the means" or something like that.

jhawkinsf 1 year, 11 months ago

No, I'm not saying that. My self interest is how I define it. Your self interest is how you define that. I don't have to agree with you, you don't have to agree with me. Right and wrong doesn't have to enter the equation. It can, if you choose for it to. But that's your choice. It's my choice as well. And in the statement I made, I chose to not make a distinction between enlightened self interest and self centered greed. If you want to read that into my comment, that's fine. That's your choice. It's not my choice and it's not what I meant to say.

jafs 1 year, 11 months ago

You can't choose to define opposites as synonyms, no matter how much you want to.

jhawkinsf 1 year, 11 months ago

Is this really the direction you want to go. I made several points in my post. Would you like to discuss them? Fine. If picking nits is what you would like to do, I'll pass.

just_another_bozo_on_this_bus 1 year, 11 months ago

The situation in Iceland isn't perfect, and there are still plenty of problems that they need to work through. But the most important lesson from Iceland is that they approached the economic collapse by going after the real root cause-- a bloated and corrupt banking and financial sector.

Austerity measures have one goal, and only one goal-- to prop up all those bloated and corrupt banking and financial sectors. Governments going back to doing the same things that collapsed the economy in 2008 and expecting a different result is just plain insane.

http://www.bbc.co.uk/news/world-europe-20936685

George Lippencott 1 year, 11 months ago

Interesting opinion. Exactly how does reducing the scope of a bloated banking sector lead to less austerity?? If you balance your books there is no need for austerity or borrowing. You just can not spend more than you have because you must borrow from somebody. On the other side of that bank are share holders expecting a return on the money they loan. Just like there are German taxpayers expecting to not have to support Greece forever.

Yes, I suspect that bankers make too much money but I am not sure shareholders do. If you force a "haircut" it is the share holders that get really hurt. Not all of them are in the 1%. In fact increasingly there are institutions as shareholders - like the pension fund fro Illinois.

You seem awful simplistic in your one note samba.

just_another_bozo_on_this_bus 1 year, 11 months ago

"You just can not spend more than you have because you must borrow from somebody. "

Wrong. The dollar is a creation of the US Govt. It can print all it wants. That doesn't mean that it'd have no effects on the economy, but the notion that the US budget is the same as a family or business budget is just plain wrong. Pretending that it is just leads to bad policy (such as austerity hysteria, whose primary purpose is to protect banks and the financial sector from the pain of their bad decisions and corrupt practices.)

George Lippencott 1 year, 11 months ago

If you can not afford it you do not get it. The whole public sector in Greece is bloated beyond belief. If ten years ago the politicians in Greece balanced the budget then there would have been no borrowing and no point where borrowing became prohibitive.

The problem is not austerity. The problem is a civic entity trying to provide more services to its constituency then it can afford. It makes for longer political lives and ultimately austerity when the Ponzi scheme runs out.

jafs 1 year, 11 months ago

The other problem in Greece is that people didn't pay their taxes.

just_another_bozo_on_this_bus 1 year, 11 months ago

Exactly, especially the wealthiest of Greeks. And the international banking and financial interests essentially shorted Greece and its economy, which had the effect of a self-fulfilling prophesy.

That's not to say that there aren't other problems in Greece, but the notion that the average Greek is just a lazy slacker looking to suck off of the German economic teat, deserving of however much misery comes their way couldn't be more misguided-- they didn't create the problems of Greece any more than you or I did.

jhawkinsf 1 year, 11 months ago

If the Greeks don't want to suck off the German teat, then they can begin by not asking to suck off the German teat. If they don't like the conditions set forth for a bailout, they can simply not ask for a bailout. If the wealthy Greeks aren't paying their taxes, the government could respond by enforcing the laws, instead of asking someone else pay for that.

Maybe the Greeks should simply withdraw from the EU. Then they could take your advice, Bozo, and print a trillion trillion drachmas.

verity 1 year, 11 months ago

Said it before, going to keep saying it.

There is a huge difference between what is good for my household economy and what is good for the economy of the state, country and world. One learns that in Economics 101---and from looking at history and current events.

George Lippencott 1 year, 11 months ago

Really. Enlighten me. There are a number of schools of economics and while the one supported by the Democrats endorses your notion many others do not.

Europe has spent its wad. It is interesting to note that the Germans did a bout of austerity when they reduced some of their social services a few years back, clearing the way for the private sector to expand - -which it did. Now they have the resources to bail out Greece but are certainly tiring of the endless yelping by people who have a better social deal than the Germans do (% of GDP)

Even households borrow to address longer term needs. Governments do so all the time. The problem is when the government is paying current bills out of borrowed money. Passing the cost of goodies for us today to our children is reprehensible.

Now stimulating the economy with deficit spending is all the rage. The theory is not expandable forever. We have spent four plus years stimulating the economy at the cost of about six trillion with limited results. We have created significant debt that somebody will have to pay - our children. Our annual deficit is such that a return to full economic activity (whatever that is when the public sector eats more and more of the available resources for no marketable product) might just balance the annual deficit but will than leave us with a 17 trillion (or more) debt - much of it to foreigners.

Now the left notes that the debt is substantially to ourselves. So is the plan to push inflation to reduce the value of that debt so that the portion of our citizens who hold it get taken?? Or do we plan to abrogate the debt and hurt them even more. Servicing that debt will take a chunk out of the available resources to support public investment during the tenure of our children.

The issue of austerity as opposed to stimulation is a red herring. It is an attempt to conceal the greed that demands all sorts of public spending today for a portion of us at the expense of our children.

It is time to rein in our annual deficit so that we do not get to the situation where the cost of servicing that debt makes borrowing very difficult if not impossible. Then we will have austerity but uncontrollable austerity with all the pain it will produce - think Greece. Better to manage our affairs well today so the pain is manageable and our children do not have to pay for our largess.

George Lippencott 1 year, 11 months ago

Wrote a nice long comment disputing your notion and the system ate it. Too Bad. I never took economics 101 at KU so enlighten me as to the difference you perceive??

You can not pay annual bills with borrowed money forever.

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