Before I start, please let me say that our idiots in Europe are just as frustrating as yours in America. This isn’t name calling its a general lament for us all.
The US exhortations to Europe to recapitalize its banks and to consumer more are laughable. Yet that was the message of US Treasury Secretary, Mr Tim Geithner.
Sometimes I seriously wonder just how parochial Mr Geithner can possbily be? It has to be some sort of deliberately obtuse act, surely? I mean, we have more than our fair share of the ‘hard of thinking’ in Europe. But even the most insular little-englander has some vague notion that Europeans from other countries have their own problems and different local constraints and imperatives.
But Mr Geithner seems determined to act the part of the fatuous and arrogant trust-fund brat, who thinks the world is there as a convenience for him, his pleasures and his needs. And gets sincerely irritated by the appalling service of the waiters in Europe, when they don’t rush to carry out his commands and bring him his order ‘Toute-god-damned- suite’.
At the G20 meeting Mr Geithner informed Europe that it HAD to consolidate and recapitalise its banks and consume more. Not a request, an order. Europe must drop all these silly German-inspired ideas, which frankly are above their station in life – of opposing the US led policy of ‘bail-outs for banks for ever’. All this unwise, and verging on unamerican talk, of exiting loose money policies had to stop. Europe might simply have to gird itself for another bail-out recapitalisation of its banks. Why? Because that’s the American policy. The fact that even many Amercans think it’s a stupid policy seems to pass him by. Never mind that for Europe it would be suicidal.
And while you’re at it, he said, you must consume more. Why? Because US consumers are broke, so they can’t. But the US government is still desperate to earn some of its way out from beneath its crushing debt and to appease its electorate by providing jobs – and to do that the Obama administration has determined to double its exports over the next five years. Which requires, obvioulsy, someone do some consuming. And that someone, Mr Geithner’s decided, is going to be Europe.
Now providing jobs and trying to increase exports are fine ambitions. But what seems to not really impinge on Mr Geithner’s apparently self absorbed mind, is that what he wants, does not translate into a clear imperative for Europe to feel compelled to oblige him – by somehow ordering its citizens to consume more. What if we don’t want to or can’t afford to?
Well Mr Geithner’s ready answer is for European governments to increase their borrowing and/or printing in order to stimulate consumption. A russian roulette game played with all the chambers filled just to make it more imbecilic.
Listen Mr Geithner, Europe has its own army of rich cretins to deal with. We don’t need to help yours as well. European banks and nations have lent 2.6 Trillion Euros to Greece, Spain and Portugal.
According to a study by the Royal Bank of Scotland (which means we have cretins studying idiots here in Europe), banks in France are the most suicidally exposed to debt from Greece, Spain and Portugal, with a stun-an-ox total of 229 billion euros; German banks are second, with a burn-the-black-forest-down total of 226 billion euros. While British and Dutch banks are competing for a joint third place, strangle-your-granny, total of a mere 100 billion euros each.
And the problem is debts just don’t win prizes. Not in Europe anyway. Take Ireland. They have started to follow the IMF/Geithner plan and what a lot of good it is doing them. Deficit €7.8 billion at the moment. Which, by the end of the year, once they have really got a start on fixing it, will be €20 Billion. Ireland’s total debt is already €75 Billion and by 2014, when the policies will be paying off handsomely, that debt will have gone up to €150 Billion. Success!
Part of the reason for the stunning success is that while the austerity cuts made so far have cut 1 billion euros from welfare and Ireland tax revenue have fallen by a stunning 10% (9% decline in income tax) they still gave Anglo Irish bank 10.3 Billion euros this last quarter, in another bail out. The Geithner model for Europe – bail out the banks and cut everything else so you cannot possibly grow the way the US intends to do. A model our own imbecile polticians, British ones particularly, have up till now slavishly followed.
It is way past time to stop saving the banks. We must ignore Mr Geithner and see him for what he is – a careless rich -boy, educated to be a dangerous and blinkered ideologue.