The Incomprehensible David Cameron

David Cameron must have actually lost his mind. In the middle of all the sanctions, he just loaned one of the Elgin Marbles to Russia, further infuriating Greece (from whom they were originally, famously stolen) after Greece loyally backed up the rest of the European Union (and NATO) on anti-Russia policies this year.

It’s one thing to petulantly insist on keeping the British Museum’s stolen artifacts from the Parthenon. It’s quite another to loan them out to an active enemy country in a taunt to one’s ally.

Surviving figures from the East Pediment of the Parthenon, exhibited as part of the Elgin Marbles in the British Museum. (Credit: Andrew Dunn)

Surviving figures from the East Pediment of the Parthenon, exhibited as part of the Elgin Marbles in the British Museum. (Credit: Andrew Dunn)

Italy’s economy: Cocaine and prostitutes to the rescue!

One of the key features of the European Union and eurozone currency system, as outlined in the early 1990s, is that member country’s would be expected to keep their budget deficits low and their public debt to gross domestic product (GDP) ratios reasonably under control. On the latter indicator, the debt is the numerator and can be changed by increasing or decreasing borrowing (and by extension, of course, annual spending). The GDP makes up the denominator and rises or falls as the national economy grows or shrinks. Changing either part affects the ratio.

The reason for such controls being imposed by the various European Union treaties is to limit currency value fluctuations in one country that will necessarily affect the currency’s value in another country also on the euro that might have a different set of economic concerns.

italian-republic-emblem-largeUnfortunately, one of the persistent features of Italy specifically has been high debt and low growth. In mid-2013, even after several years of cutbacks, the Italian debt to GDP ratio as a percentage was 130% (meaning the total debt was 30% larger than the entire calculated value of the Italian economy).

Moreover, GDP was growing on average at 0% a year (often actually negative in practice) in the fifteen years from 1998 to 2013. Similarly, annual deficit to GDP ratio targets demanded by the European Union were also not being met. And yet, the EU wanted the ratios reduced further, even though additional rapid cuts in the numerator (total debt or annual deficit, depending on the ratio in question) might start shrinking the denominator (the economy size), thus leaving the ratio more or less unchanged.

Enter the unelected Prime Minister Matteo Renzi — the former Mayor of Florence (and Italy’s youngest prime minister ever, even including Mussolini) — who dramatically assumed control of the country in February. His Finance Ministry has hit upon a brand new solution to help solve the problem in time for the next round of budgeting.

When your supranational federation orders you to rein in your deficit-to-GDP ratios, you can either slash all spending haphazardly until the deficit size falls to an acceptable level — the usual approach — or you can blow up your GDP massively by piling into your calculation everything under the sun, including hookers and blow. YAY MATH!

Bloomberg:

Drugs, prostitution and smuggling will be part of GDP as of 2014 and prior-year figures will be adjusted to reflect the change in methodology, the Istat national statistics office said today. The revision was made to comply with European Union rules, it said.

Renzi, 39, is committed to narrowing Italy’s deficit to 2.6 percent of GDP this year, a task that’s easier if output is boosted by portions of the underground economy that previously went uncounted. Four recessions in the last 13 years left Italy’s GDP at 1.56 trillion euros ($2.13 trillion) last year, 2 percent lower than in 2001 after adjusting for inflation.

“Even if the impact is hard to quantify, it’s obvious it will have a positive impact on GDP,” said Giuseppe Di Taranto, economist and professor of financial history at Rome’s Luiss University. “Therefore Renzi will have a greater margin this year to spend” without breaching the deficit limit, he said.

 
And that’s the big, dirty secret of the concept of GDP, as well as GDP-based targets: They are blunt instruments that depend at heart on a necessarily arbitrary system of measurement, which can be manipulated in the official figures in any given country by including or excluding various sectors of the economy — particularly in the gray or black markets.
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Afterwar: The Armistice That Didn’t End Europe’s War

The popular retelling says that on the eleventh hour of the eleventh day of the eleventh month of 1918, the guns of August 1914 finally fell silent, ending “The War to End All Wars.” The popular follow-up joke is to point out that the Second World War, which began nearly twenty years later, proved that label false. Today the date remains a holiday in many of the Allied countries – including the United States, where it is now called Veterans Day.

In fact, not only did the war not really end on November 11th 1918, but the continuing fighting actually sprawled even further across the world. In many ways, it’s the wars “after the war” that really shaped what was to follow and the world we live in today, far more than almost any battle in World War One itself on the original fronts in Europe.

A shattering, rolling wave of secondary war, which began with the Bolshevik Revolution in Russia 369 days before the Western Front Armistice, triggered five “bonus” years of very heavy fighting that reformulated the modern world after the supposed cease-fire. These were waged in part by various revolutionary and counter-revolutionary local armies in a dozen countries, by anti-colonial forces against Western colonialists, and by the same Allied Powers that would continue to insist the war had ended in November 1918.

The famous Versailles Treaty was preceded and followed up by round after round of accompanying treaties frantically attempting to bridge the widening gap between the “ideal” boundaries envisioned by the victorious Allied Powers and the facts on the ground. One of these side treaties was so delusional it purported to divide Ottoman territory under Allied directive by agreement with the Ottoman sultan, who no longer had the effective power to sign any deals, and with the borders to be drawn by a nearly incapacitated Woodrow Wilson less than a year after his stroke. It was, of course, never implementable.

From the Russian Civil War … to the border battles of the former Russian imperial territories against each other … to the wars exploding across the former Ottoman Empire … to the far-flung European colonies around the world, World War One continued to grow, metastasize, and envelop country after country well beyond November 1918.

When it was all truly over, Europe had a half-dozen new states, a half-dozen others had already come and gone, the Middle East was carved up along the arbitrary lines of today’s conflicts, Turkey had declared independence from itself and the 16th century, a Communist government solidly held power in Russia and Ukraine after defeating the same military forces that had just broken the German Empire, Ireland had departed from Britain by force and civil war, several African and Pacific colonies had been arbitrarily reassigned to Western rulers speaking entirely different languages from the earlier colonizers, and existing colonies were laying the groundwork for mass resistance and violent separation.

Compared to the glacial, inch-by-inch pace of the four-year battle for control of highly strategic Belgian mud, the wars that followed often seemed to shift and create national borders faster than ocean tides.
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The quiet authoritarian in Hungary

For those not following the Hungary situation (and I’ll admit I’ve barely had time to pay attention to it myself) here’s a line from an Al Jazeera America article that should demonstrate the severity of the problem (which goes well beyond a tax debate):

It’s rare for the usually aloof and cautious European Union commissioners in Brussels to call for street demonstrations in one of the EU’s member states. But since none of the their badgering had blunted the power plays of Hungary’s autocratic Prime Minister Viktor Orban, the EU commissioner for digital issues, Neelie Kroes, tweeted support for Hungary’s protesters. They took to the streets last week to protest Orban’s latest attempt to curtail anti-government opinion: a proposed nationwide tax on Internet data traffic — an attack on the country’s the last free platform for free thinking and dissent.

 
And the most appalling bit of all? Prime Minister Orban’s Fidesz party is overwhelmingly the most popular by vote and most numerous in members in the whole country. He’s not going anywhere. Authoritarianism does not always come via coup or revolution. Sometimes we just vote it into power with cheers.

Flag_of_Hungary

Against independence for Catalonia

The elites of Catalonia, the economically wealthy region that co-founded Spain, want to leave Spain and become their own country where they don’t have to pay taxes to help their less fortunate neighbors.

They are so determined to do this that they are blowing past every objection raised by the European Union and the Spanish central government and are forging ahead with a “non-binding” and “consultative” referendum, since their original plan for a unilateral referendum on secession was ruled wholly unconstitutional.

In a powerful op-ed in The New York Times — presumably aimed at rallying Americans against the Catalan separatist cause (before someone else makes up their minds for them) — Cayetana Álvarez de Toledo (journalist and MP from Madrid), Núria Amat (novelist from Barcelona), and Mario Vargas Llosa (Spanish-Peruvian novelist and 2010 Nobel Literature Laureate) lay out a multifaceted case for why Catalonia should not only not be granted independence but should not even be voting on it right now.

For one thing, it’s not very consistent with the values of democratic constitutionalism and rule of law, which the Catalan elite claims to be upholding, to stick it to the central government and the Spanish constitution — unlike, say, Scotland, which negotiated with the central UK government to hold a legal referendum on national status. For another, it just makes no justifiable sense historically or today, because they are an integral part of the formation of Spain and are not currently being legally or forcibly oppressed by the central state:

In their attempt to undermine the workings of the constitutional government, Catalan separatists have displayed a remarkable indifference to historical truth. Catalonia was never an independent state. It was never subjected to conquest. And it is not the victim of an authoritarian regime. As a part of the crown of Aragon and later in its own right, Catalonia contributed decisively to making Spain what it has been for over three centuries: an impressive attempt to reconcile unity and diversity — a pioneering effort to integrate different cultures, languages and traditions into a single viable political community.
[…]
It’s true that Catalonia was a particularly fierce battleground during the Spanish Civil War (1936-39), with brutal atrocities committed on both sides, and that the region faced some of the most severe reprisals under Franco’s regime. For many, the wounds still have not healed, and they fuel the fires of the separatist movement.

But the advent of democracy brought official recognition to Spain’s distinctive cultures, and set the foundations for the autonomy the Catalans enjoy today. Catalonia has its own official language, its own government, its own police force. Catalans endorsed the Constitution overwhelmingly: 90 percent of them voted yes in the referendum of Dec. 6, 1978. The millions of tourists who flock to Barcelona every year, drawn by the beguiling blend of Gothic and Gaudí, attest to the vigor of Catalonia’s culture. The claim that Catalonia’s personality is being stifled and its freedoms oppressed is simply untrue.

 
It’s also a disturbing step backward, away from the progress Western Europe has made toward transcending petty differences and the destructive powers of extreme nationalism:

Exiled from the European Union, economically impoverished and socially divided, the 7.6 million Catalans would be subjected to an extreme form of nationalism we Europeans remember all too well. Millions of lives were lost in the nationalist frenzy that tore Europe apart during the 20th century.

Are we to sit back and watch the European Union relapse, fall prey to ethnic prejudices and become a fragile cluster of chauvinistic nations rather than a vigorous union of democratic states? Are we to relinquish individual rights and the rule of law to the new nationalists and populists?

Nationalism effaces the individual, fuels imaginary grievances and rejects solidarity. It divides and discriminates. And it defies the essence of democracy: respect for diversity. Complex identities are a key feature of modern society. Spain is no exception.

 
That divisiveness is particularly troubling when one realizes how many dual-identity or Spanish-identifying people live in Catalonia despite the flag-waving, drum-banging of the elites who are trying to distill out a pure nationalism where one doesn’t exist. They will not just rip themselves out of Spain’s culture and economy if they declare independence, but they will also be taking with them a lot of unwilling Spanish Catalan citizens, many of whom don’t speak Catalan as a first language. By some accounts I’ve seen, that might even be half or more of the regional population.

This is a dangerous and disturbing project by wealthy elites and perennial axe-grinders that is fueling a lot of nasty, hyper-nationalist behavior, which Europe and Spain should be leaving behind and not returning to.

Flag of Spain

Flag of Spain

Denmark’s fast food wages

Despite no minimum wage law but because of very strong unions and bargaining arrangements, Danish workers make more than twice as much money per hour working for US chains there as most of our workers make working for them here. And that’s on top of their generous government programs and universal healthcare. Curiously, the companies still make a profit (a smaller one, but it’s still there) and retain employees better, and those fast food employees don’t need to be on public assistance like half of ours are.

You’ve got to have one or the other (if not both) — a good minimum wage law or a labor union capable of negotiating against an array of vast corporate entities — to stand a chance of achieving a situation like this. Yes it means the corporate profits are slightly reduced and the prices are slightly raised, but the workers aren’t forced to live in poverty with food stamps and little to no healthcare, and instead they can pay for housing and consumer goods and move themselves and the wider economy up in the world.

Either way, we end up paying the bill somehow, whether at the point of sale or in taxation. Shouldn’t the goal, even for conservatives, be for the market to provide workers with a living wage and the dignity that comes with that, so taxes and government spending aren’t even involved?

Links to our past coverage of comparisons between US and European labor market systems are below. Read more

100th Episode! September 24, 2014 – Arsenal For Democracy 100

AFD-logo-470

Topics: Implications of the Scotland no vote, ADA non-compliance in higher ed, 100th episode celebration. People: Bill, Nate, Persephone. Produced: September 21, 2014.

Discussion Points:

– What are the implications of the Scotland referendum outcome for the United Kingdom and other European separatist movements?
– Why aren’t colleges and universities doing more to comply with the Americans With Disabilities Act?

Part 1 – Scotland:
Part 1 – Scotland – AFD 100
Part 2 – ADA Compliance, 100th Episode:
Part 2 – ADA, 100th Episode – AFD 100

To get one file for the whole episode, we recommend using one of the subscribe links at the bottom of the post.

Related links
Segment 1

Boston Globe – Opinion: On education technology, college lobbyists are keeping disabled students behind
USA Today: U.S. Justice Department sues Kent State over student’s therapy dog
CentreDaily: ADA football parking changes off to rocky start

Segment 2

BBC: Madrid opposes Catalan referendum
Financial Times: Alex Salmond brushes aside the foreign policy facts for Scotland
AFD: April 14, 2014 – Arsenal For Democracy 80, Part 2: European Nationalism

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iTunes Store Link: “Arsenal for Democracy by Bill Humphrey”

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