Against Their Own Best Interests

Cross posted from The Stars Hollow Gazette

Last week the Irish voted against their own (s)elf interest, which according to Yanis Varoufakis, professor of economics at the University of Athens, when they “voted in favour of the EU’s fiscal compact which specifies that which is both impossible to attain and catastrophic if it is attained“:

So, why did the Fine Gael-led Dublin government push so powerfully in favour of this piece of crippling idiocy? And why did the smart, decent Irish voters said Yes, despite their tradition of saying No to euro-silliness? The answer is simple: They were blackmailed. Ireland’s voters were told: Vote No and the flow of money from the troika will cease. And so they voted Yes, even though I suspect that no government minister, no rank and file Fine Gael or Labour Party member, no man or woman on the street believes that the Fiscal Compact they voted for makes sense. [..]

If on 17th June Greeks voted like the Irish did last week (that is, against their reasoning and guided by fear and blackmail), the Eurozone will become history, with terrible consequences for the global economy. This is not the case of the Philosopher Kings blackmailing the plebs to do what is right. This is the case of ‘madmen in authority’, to quote Keynes, who are not only steering the vessel toward the rocks but who are, in the process, punching holes in the life vests that may carry us to safety once the shipwreck is complete. [..]

To conclude, Europe’s peoples are being marched into a catastrophe. They know that this is their predicament. They can see their march is leading them off a mighty cliff. But they are too afraid to veer off, in case there are beaten back into line, in case they get lost in the woods, for reasons that sheep know best. However, the only way this hideous march can end is if someone summons up the courage and does it. And steps out, showing the others that this march can stop and must stop – for everyone’s benefit. Who is that someone? We, Europeans, do not have many options. As I wrote above, the Irish people had a chance but did not take it. In two weeks, the Greeks have their chance. Voting for Syriza would offer us (and by ‘us’ I mean all Europeans) a chance of this circuit-breaker. A chance to say: Enough! Time to change course in order to save the Eurozone, so as to prevent the Great Postmodern Depression which lurks once the euro-system fragments formally.

Varoufakis gives his reasons for supporting Sariza: first, that Sariza is the only party that understands that Greece needs to stay in the EuroZone and that the Eurozone won’t survive if it doesn’t give up austerity; second, the economic team that will negotiate on Greece’s behalf are good and persuasive with a clear understanding of the situation; and third, Syriza will not be the sole arbiter of the Greek government. It will be a coalition, so there is no need to fear the party’s extreme leftism.

I hope the Greeks’ come to their senses unlike the Irish and Wisconsins.


    • TMC on June 7, 2012 at 7:39 am
    • banger on June 7, 2012 at 8:05 pm

    So I think that was the lesson of the Irish vote. Since WWII Europe has seen unprecedented peace and prosperity–the end of the Cold War brought a lot a triumphalist spirit to Western Europe, particularly Germany. Europe was expanding and was in the unique position of being the most advanced civilization in the world. The U.S. was in decline due to the peculiarities of having a very large segment of religious fundamentalists that has caused the U.S. to adopt regressive and un-pragmatic policies based on sheer fantasies. Europe should be, collectively, the greatest world power because of their systems just plain work better, for the most part, than the American systems whether it’s transportation or health-care. S

    So what happened? Europe went from being skeptical of U.S. military adventures to supporting them. Europeans governments supported, at first quietly, then wholeheartedly all American expenditures–why? At the same time the Europeans bought into the American version of globalism particularly in the finance sector, i.e., bought into the idea that there are need to be an elite who determine political and economic realities through the manipulation of debt and the issuing of fraudulent instruments to enrich speculators and traders which has brought us into an entirely new system that is very solidly interlocked with Europe as junior partners in the U.S./Britain/Gulf States nexus.

    I suspect that after 9/11 a series of carrots and sticks were offered to the European ruling elites. The idea, floated by the neo-cons, was to turn the U.S. into an unpredictable rogue state capable of any extreme action. And the U.S. walked the walk–engaging in irrational wars, ending habeas corpus as we knew it, promoting torture and secret prisons as well as increasing black-operations and assassinations such that no one is theoretically safe. European leaders got the message and, lacking unity, are easily intimidated by the U.S.

    In addition, Europeans trust their upper classes to make the right decisions based on pragmatic policies because that is what they’ve done since WWII and it’s hard to believe they would give it up. Americans at least know their leaders are probably full of shit so have given up on rational solutions to any problem and vote based on tribal politics–but that is another matter. If the Euro-experts largely believe that austerity is the way to go most Europeans will support that. Theoretically it makes no sense but that’s the story that very intelligent people spread. To succeed, however, someone must pull a rabbit out of a hat and the financial system based on fictional worth can theoretically pull rabbits out of hats–so I wouldn’t discount the possibility of the austerity scheme “working” after a fashion, at least for oligarchs all over the world who are rapidly creating a virtual union of their own.  

  1. Walker’s opponent was another boring neoliberal apparently.

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