Thanks for visiting this blog, created in July 2012 out of great concern for the fate of the €uro currency area, once again on the verge of collapse due to the economically ill-advised and heartless austerity policies imposed on Greece, Spain and other heavily-indebted €uro area countries by a christian democratic German chancellor impressed with the budgeting skills of Schwabian housewives. Meant to reduce the public debt and put the countries back on a path to economic growth, these macro-economically idiotic policies are doing anything but cause "pointless misery" as Paul Krugman so aptly describes it (Bloomberg, July 23-29, 2012).

Instead of reducing public debt, the austerity measures set in motion a vicious cycle of economic contraction, rising unemployment and poverty, lower tax revenues, private capital flight, and rising public debt shares as the economy declines faster than the public debt. What’s more, the austerity-driven ‘blood, sweat and tears’ policies recommended to the European periphery derive from the same economic doctrine that brought us to the brink of disaster in 2008. These policies are not only misanthropic and counterproductive to economic growth and debt reduction in Europe, but will prove explosive for the €uro currency area unless a drastic change of course takes place - and soon.

While I do not pretend to have ‘the’ solution for the €uro crisis, I would like to offer alternative economic perspectives and views on current events, and hope to chart a more humane path toward a balanced, socially fair, and sustainable economic future for the €uro area.

On the origins of the 2008 Great Financial Crisis:
90+% of traders are men, and they bet all of our bank deposits on liar loans which froze credit leading to 40% average losses passed on to ordinary taxpayers; then begged for trillion-dollar bailouts upon which they paid themselves 50% higher boni.”


Sunday, May 11, 2014

For my mother on Mother's Day 2014


“The supreme happiness of life is the conviction that we are loved.” 
(Victor Hugo)


It was the death of her mother that inspired Anna Jarvis to organize the first Mother's Day observances in 1908, in Jarvis' hometown of Grafton/West-Virginia and in Philadelphia where she lived. (see National Geographic news, "Mother's Day turns 100"): "For Jarvis it was a day where you'd go home to spend time with your mother and thank her for all that she did," ....."It wasn't to celebrate all mothers. It was to celebrate the best mother you've ever known—your mother—as a son or a daughter."

That's exactly how I would love to celebrate this Mother's Day: spend time with my mom - if I could. Unfortunately, no such chance. My mother has left the physical realm many years ago, yet I think of her nearly every day. I guess it's human nature to realize only after she's gone a mother's extraordinary love. I know I took my mother's love for granted too many times and would give anything if I had a chance to show her my appreciation and how much I miss her.

Since I am a firm believer in dimensions that humans do not yet understand (---> see Michio Kaku's "The Future of the Mind"), I hope she can somehow receive my thoughts, feelings, and other communications. This is for you, mom:

Source: Europa convention of the German green party, February 2014.

For readers who do not understand spoken german, here is the english translation of my speech:

"It was in July 2012 - the euro once again close to collapse - that my outrage about the dogmatic, incompetent and unjust economic policies in the euro zone drove me to found my economic blog WOMEN ECONOMISTS FOR A FAIR EUROPE. Since then, my blog has acquired a small but fast growing international readership.

Today, it is my concern for the disastrous economic, political and humanitarian consequences of these economic policies - especially the concern about a drift of the southern European periphery into a deflationary depression - which prompts me to seek a seat in the European Parliament.

Following the near destruction of our global financial system by the 'Masters of the Universe' 5 years ago, I hope that today you will give women economists a chance. I think it is imperative that competent, experienced and confident women keep a watchful eye on all the over-confident, unteachable 'Men in Black' in Europe, to prevent backroom decisions which adversely affect millions of women and children. A woman physicist holding regular court with senior representatives of the banking lobby is not enough. [editor's note: this is a swipe at chancellor Merkel]

Now, I am aware that some of you appreciate our chancellor; you might have even voted for her or her party in the last national election. In view of the alternative candidate available, I can almost understand this. In contrast to him [Peer Steinbrueck, chancellor candidate of the SPD - editor's note] chancellor Merkel is modest, unpretentious and has worked tirelessly for the interests of Germany (or at least for what she considers to be Germany's interests). For this, she deserves our respect. In addition, she and her team seem to have understood that no election can be won without the support of the largest voter group in Germany, namely women over 50 .

But I also have the impression that chancellor Merkel - and her finance minister with a typical German CV - lacks an appreciation of Europeans outside of Germany. Especially an appreciation and understanding of the way of life of South-Western Europeans is sorely missing. However, Europe does not only consist of Teutons. There may even be Teutons - and one is standing here in front of you - who highly appreciate the Mediterranean way of life as well as the continental European welfare state, and who do not want to see it destroyed by a brainless Anglo-American rat race. Yet, this is exactly what seems to be on chancellor Merkel's agenda.

Fact is that our Christian Democratic chancellor is responsible for the most unchristian, unjust and inhumane economic policies in Europe since the founding of the European Economic Community in 1957. The pro-cyclical austerity measures demanded by her government and imposed with the help of the troika are chiefly responsible for the collapse of the Greek, Portuguese, and Spanish economies, the soaring of unemployment rates to record highs and the existence of poverty, misery, hunger and despair in the Southern periphery of 'civilized' Europe.

What would have been [and still is - editor's note] necessary are structural adjustment programs for the over-indebted European banking sector, with strict rules for the orderly winding down of insolvent banks, as well as for the rapid repayment of bank bail-out costs to the states and the taxpayers that financed them. Instead, government spending is being slashed to ensure that sufficient funds are available to service the banks/ters' debt. The focus of the expenditure slashing is on state-funded social benefits, wages and pensions of people who have worked hard their entire lives and are not to blame for the European bank debt crisis.

This is not just a disgrace and a brazen raid by the financial elites, but also gross economic non-sense. Because the slashing of pensions, wages, and social security benefits by up to 40 % has stifled internal markets and set in motion a dangerous deflationary spiral which could lead the entire euro zone into the abyss. 

Even if real banking reform and the closure of zombie banks were to be carried out in the future, the damage to the real economy is already enormous. Due to the economic downturn, government debt has continued to rise. Each of the countries that carried out an austerity and reform program imposed by the troika or recommended by the EU today has a higher public debt ratio than before the austerity measures! Because the economy is down, investors stay away and new financial gaps open up which need to be filled by the European taxpayers. These failed, interest-led economic policies also cost German taxpayers dearly, and will become even more costly if we do not stop them.

Just as bad or even worse are the re-awakened anti-democratic and nationalist tendencies caused by the economic hardship of many Europeans. Not only in Greece and France, but also in Germany politicians are again fishing for votes from extreme right-wing, nationalist groups. If we do not re-direct economic policies NOW, this could end in political disaster and even war again . In order to avert another catastrophy in Europe, we must act now!"

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