By William K. Black
Michigan Governor Rick Snyder secured passage of “Public Act 4, the Local Government and School District Fiscal Accountability Act. The Act allows the Governor to appoint emergency managers (EMs) for any government in Michigan. The EM has unlimited dictatorial powers. He can – and the EMs appointed by Snyder have exercised this power – effectively eliminate the elected government. Republicans have blocked a challenge to this remarkable law; arguing that the petitions had too small a font. Snyder has used the EM power to take over primarily cities with African-American majorities.
Chris Savage, writing in The Nation, quoted the Benton Harbor EM’s putsch:
In April the Benton Harbor EM, Joe Harris, decreed: “Absent prior express written authorization and approval by the Emergency Manager”—himself—‘no City Board, Commission or Authority shall take any action for or on behalf of the City whatsoever other than: i) Call a meeting to order, ii) Approve of meeting minutes, iii) Adjourn a meeting.’” The move in effect abolished Benton Harbor’s elected City Commission and replaced it with an unelected bureaucrat, perhaps the first time this has happened in US history.
I grew up in Michigan so I follow Snyder’s assault on democracy and African-Americans fairly closely. I can now report that European “austerians” are following Snyder’s lead.
Berlin is enraged that the Greeks have voted in favor of candidates opposed to the austerity deal Berlin coerced the disgraced and fallen Greek government to sign. The austerians have decided that since democracy is the problem, imperialism is the answer. Jean-Claude Trichet, former head of the European Central Bank (ECB), and a fiercer austerian than Chancellor Merkel, has proposed a plan to cripple Greek democracy. Naturally, the business press reacted with praise. Reuters’ headline gushed: Ex-ECB head unveils bold plan to save the euro.
Note that the “bold” plan is not designed to “save” Greece or the Greeks – it is supposed to save the “currency.” When the Titanic sank the general order was “women and children to the lifeboats.” Trichet gives priority to saving our currency. Reuters’ doesn’t even see that bizarre priority as worthy of discussion.
But what is “bold” about Trichet’s plan? Reuters’ answer is:
Europe could strengthen its monetary union by giving European politicians the power to declare a sovereign state bankrupt and take over its fiscal policy, the former head of the European Central Bank said on Thursday in unveiling a bold proposal to salvage the euro.
Frequent readers will know of our family rule that it is impossible to compete with unintentional self-parody. Trichet (and Reuters) think it would be just great for Berlin to take over Greece. Why not make Greece the nation where democracy was born and died? After all, the Germans haven’t occupied Greece for over 65 years and may be getting rusty. I’m sure the Greeks will welcome them with flowers and parades. Sort of like Iraq. Trichet has finally identified a use for the Franco-German brigade – it can provide security to German tax collectors as they tromp through Greece.
The Reuters reporter wrote the following paragraph as if it were a statement of fact that required neither citation nor support.
The monetary union has always defied economic principles, because the euro was launched ahead of European fiscal or political union. This has caused strains for countries running huge budget deficits – namely Greece, Portugal, Ireland, Spain and Italy – that have led to financing difficulties and over-stretched banking systems.
The first sentence is true – and should lead the reporter to ask why anyone should listen to those that designed the monetary union (i.e., people like Trichet) in a manner that “always defied economic principles.” The second sentence reverses the causality. It was the banking and financial crisis that caused the Great Recession and caused huge budget deficits and it was Germany’s insistence on the economically insane practice of adopting a pro-cyclical policy of austerity that forced the euro zone back into recession and the periphery into Great Depression levels of unemployment.
Given the reporter’s admission that the euro system was designed in a fatally flawed manner, the answer must be to fix the flaws. Trichet, however, says that answer is impossible: “For the European Union, a fully fledged United States of Europe where nation states cede a large chunk of fiscal authority to the federal government appears politically unpalatable, Trichet said.” Democracy remains the stumbling block, but Trichet has an answer to that problem – crush democracy. He proposes that the EU:
[T]ake a country into receivership when its political leaders or its parliament cannot implement sound budgetary policies approved by the EU. The action would have democratic accountability if it were approved by the European Council of EU heads of states and the elected European Parliament, he said.
Of course, the “sound budgetary policies” he means are the suicidal, and failed policies of trying to balance the budget during a Great Recession. He does not understand even now that a nation in a severe recession cannot simply decide to run a budget surplus. It can try to do so, by cutting spending or raising taxes, but those policies are likely to reduce already sharply inadequate public and private sector demand, which increases unemployment, increases demand for public services, and reduces government revenue – all factors likely to increase the budget deficit. I am sure that the Greeks will consider the loss of their sovereignty at the hands of hostile foreign powers who openly sneer at the Greek people to represent the epitome of “democratic accountability.”
And what was the reaction of Berlin to Trichet’s policy to force suicidal austerity on the Greeks and bleed their economy while removing their sovereignty and right to democratic rule? You know the answer.
“The idea earned a warm reception from leading economists and prominent Europeans attending the session [preparing for the G8 meeting].
“It is a very radical proposal, couched as a modest step,” said Richard Cooper, international economist at Harvard.
Caio Koch Weser, former German economics minister, said he found it “very attractive” because it addresses the problem of a strong European Central Bank, a weak European Commission which acts as the EU’s executive branch, and a confused European Council, which provides political leadership.”
Note what entity is supposedly “strong” – the ECB – the only undemocratic entity discussed by Herr Weser. The ECB (more precisely, the CEOs of the largest German banks who actually determine German and ECB policies) will run Europe – because German leaders like Herr Weser find “strong” leaders “very attractive.” How could this possibly go wrong? Remind me what the German word for “leader” is.
The ECB is ready to provide the leadership prinzip.
“The [ECB] governing council met in Spain, the new center of the European debt crisis. At more than 24 percent, Spanish unemployment is the highest in the euro zone, while mounting bad loans have put into question the solvency of the Spanish banking sector.
Opening the press conference in a convention center on the outskirts of Barcelona, Miguel Ángel Fernández Ordóñez, the governor of the Bank of Spain, said that ‘it is a meeting that allows the bank to get closer to its citizens.’
Still, Spain avoided giving citizens angered by Europe’s austerity cuts and high joblessness any possibility to disturb the central bankers, temporarily suspending the Schengen Agreement, which allows free cross-border travel, before the E.C.B. meeting because of concerns that violent protesters would travel to Barcelona. Meanwhile, about 8,000 police officers were deployed around the city, with helicopters hovering above, while only a few hundreds of students gathered in central Barcelona to protest spending cuts, particularly in education.
‘Is having helicopters and snipers on the roofs the way the E.C.B. wanted to show its face and meet the Spanish people?’ asked Edward Hugh, an economist in Barcelona.”
At the ECB’s request, Spain’s ultra-conservative government turned out 8,000 police, helicopters, and snipers on the roofs. Now that is strong leadership from another nation with a tradition of venerating strong leadership. Did readers notice the ECB official’s claim that the ECB has “citizens” and that it held the meeting in Barcelona to get closer to “its citizens”? Lest we forget what the ECB has already forgotten – the ECB is a deliberately anti-democratic entity that has no “citizens” and routinely works to make the largest banks wealthy at the expense of the citizens of the EU. At Germany’s insistence the ECB has no mandate to seek full employment, so those millions of Spanish citizens who are unemployed due to austerity and the ECB’s repressive monetary policies are deliberately and expressly not the concern of the ECB. That makes the ECB’s leadership’s claims about “its citizens” all the more duplicitous.
Michigan’s ultra-right wing Governor Snyder designed the EM as the ultimate embodiment of the führerprinzip. He uses the EMs against marginalized minorities. I’m sure it will end well.
I am not arguing this makes Snyder or Trichet a fascist. My argument is that they embrace authoritarian “solutions” that glorify the all-dominant leader. Authoritarian leaders tend to impose disastrous policies, such as austerity, because they do not have to listen to others. They invariably insist that “there is no alternative” (TINA) to their self-destructive policies.