Goebbelnomics – Austerian Duplicity and the Dispensing of Greece

Hm, zanimiv članek, ki – kljub težkim besedam – pride blizu realne slike tega cigu-migu nategovanja v evro območju, kjer je spet na sporedu discipliniranje Grčije. Goebbels bi bil ponosen na svoje učence.

It would not be impossible to prove with sufficient repetition and a psychological understanding of the people concerned that a square is in fact a circle. They are mere words, and words can be molded until they clothe ideas and disguise.
― Joseph Goebbels, Reich Minister of Propaganda 1933-45

Austerians possess a well-honed psychological understanding of their target markets. They are also quite adept at proving, with sufficient repetition of course, that national governments in the Eurozone cannot afford to pursue pro-LIFE (Low Inflation Full Employment) economic policies. Austerians are very good at Goebbelnomics, indeed.

You see, fiscal deficits are a sin, especially if they are larger than an arbitrary 3% of GDP. “Monetized” fiscal deficits are a mortal sin punishable by the inevitably of hyperinflation – a state of ever accelerating inflation which Austerians love to hyperventilate about, even as more and more nations sink into outright price deflation. Austerians hyperventilate about monetized fiscal deficits even though all fiscal expenditures in countries with sovereign currencies have to be “monetized”, because there is no other way for the private sector to get the money needed to pay taxes and buy government bonds. Households and nonbank firms cannot create money – that is called counterfeiting, and punishable by law.

And government debt to GDP ratios always and everywhere need to be kept below an arbitrary 100% of GDP ceiling. Or better yet, as long as we are pulling numbers out of our asses, below 60% of GDP. Why, you may ask? Because beyond one of those ceilings lies, as Reinhart and Rogoff argued with empirical and historical precision (plus a somewhat faulty spreadsheet formula), very explosive debt dynamic dragons. Big debt dragons. Debt dragons that breathe fire and sink ships.

Forget, for a moment, that government debt is held as an asset by some households after they save money and invest it for retirement purposes. And forget for a moment the government bonds are used as collateral by both the conventional and the shadow banking systems. Forget also that government debt may be financing the construction of tangible assets, like infrastructure, with monetary and social returns lasting decades. You’ve seen the dragons, right?

This is all about the rules and the discipline, mind you. In fact, it is all about class discipline, an Erratic Marxist, and possibly even a Groucho Marxist, might argue. The eurozone at best is a mechanism for extracting larger current account surpluses and hence larger profits for the core country transnational manufacturing interests, and securing ample subsidies and capital gains for the finanzkapital wing. This machine is well oiled, and the Troika is not about to allow it to be monkey wrenched by a bunch of sniveling anti-Austerians.

Make no mistake – this is an exercise in class discipline, writ large. It is unfolding right before our eyes, yet no one dares call it by its true name, Goebbelnomics. There is no longer even a superficial effort to hide the duplicity of the Austerians. Just repeat after them: the square is a circle. We have no more money, at least not for dispensable nations. But if you are a bondholder, well, step right up, because we just happen to have enough money to bid your bonds higher – though let’s be clear, that will not, and cannot possibly distort market price discovery signals. Even if it is 60b euros per month the ECB will be spending. For eighteen months. And meanwhile, we are told the eurozone has run out of money, so Greece must become a failed nation state.. That square, you see – it is a circle, after all.

Preberite več v Rob Parenteau, Naked Capitalism

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