this entry will start a series of smaller pieces in order to prove the thesis that European citizens are less in danger of falling pray to inflation than to higher taxation, wrong judgment by economists & politicians and as a result risking their personal financial well being or even losing their life savings/investments in one decisive blow or during the next few years. Or even worse, risking losing their life as it is happening in Greece and Italy right now.
First of all the author here would like to explain why he chooses for publishing smaller pieces and make it a serial, instead. Since starting to blog last year it turned out to be much more time consuming than previously thought, and one important lesson of the ongoing Euro crisis is that constantly new developments must be considered, and so updates of blog entries are imperative to give a full picture. On the other hand it is almost impossible to explain everything at once, unless it is intended to write a book about the subject of European demise after introduction of the single currency and especially since 2008. And as pointed out before, such a book would be totally outdated once it hits the shelves.
So speaking just in general now, the idiocy of the eurozone goes back many years , even back to a point where the decision process was still in progress back in the 1990s. Many economists and even politicians nowadays admit that the whole project might have been a mistake or was a mistake or was at least not as perfect as it was intended to be. (OK, there are still a few poor souls in complete denial)
The last couple of years and especially the last few month did expose even more idiocy, but also some pragmatic attempts to correct a few flaws going back to the time the whole system was created. Of course 'idiocy' is much more a controversial expression than 'inflation', which can be measured in numbers, whereas BS, failure and misjudgment is often more difficult to prove. And even when it is possible to make one or more points or to entirely prove some events, it remains a question of individual preference in order to judge such events as 'failure' , 'success' or 'not too bad' etc. So even when we can prove that someone is spending his entire income on evenings spent in a casino or losing it all in an illegal gambling facility, it can be argued that he was entitled to so or he actually did in order to support local economy.
So 'idiocy' will always remain a matter of personal views upon things, maybe resulting from 'personal morality', but this section of the blog actually is the opinion section and is therefore subjected to potential controversy. In order to understand what the author here calls 'idiocy' it is important to know that he is interested in a working capitalistic system and has a clear preference for a thriving European economy, a working banking sector that supports the needs of the 'real economy' and businesses and individuals alike who enjoy the advantages of an economy that not only delivers growth but also prosperity for all involved. He doesn't want to see transfer payments as a result of individual failure, but he supports measures of 'smart investment'
'Idiocy' might be exposed whenever previously described goals are not met or even worse: are being torpedoed (often by people driven by ideology). Whenever hollow phrases and wishful thinking is proven wrong by 'facts on the ground'.
Often the author is confronted with idiocy in articles he reads or Twitter messages he receives. It is almost taking place on a daily basis, on a wide range of individual topics, all contributing to the 'big failure' of the eurozone. As so often in life there many smaller 'idiocies' which will lead inevitably to big time failure and as described before, it is hard to pinpoint idiocy when it is emerging from many different directions, often from where it is least expected.
The author has to confess that he encounters what he judges to be idiocy or failure so many times, that he must refrain from writing several blog entries every single day. Just this afternoon it was brought to the authors attention that current Deutsche Bank chief economist is hailed for his 'insights' whereas the author has links to analysis of Deutsche Bank from late 2007 where e.g. the strength of Spanish economy is praised. Or another example today: statements on Chancellor Merkel's 'Sparpolitik' now serving as a recipe for the whole Eurozone. A true farce whenever German spending and taxing sprees 2005-2012 are being subjected to comparisons between facts and phrases like 'Sparpolitik'. So it is highly likely that episode II of the 'idiocy series' elaborates more on both: German 'Sparpolitik' and latest statements by Thomas Mayer published here, but also made on German radio Deutschlandfunk on April 30th.
The intention is not to blame those individuals who made mistakes/misjudgments or to keep adrenaline in own bloodstream or that of the reader on highest levels, but to call for a pragmatic approach to analysis and solutions alike. It is important to notice that best solutions can often be found by keeping an open mind and not sticking to 'old ideologies'. It is even recommended to doubt some suggestions sounding too promising, even when they are presented to us by Paul Krugman or Nouriel Roubini, since even they might sometimes be not entirely right. (might be subject of another blog entry) So when the new leader of Dutch Labor party, Diederik Samson, writes on Twitter:
@martinvisser zou het misschien kunnen dat de beste strategie voor EU ergens tussen Hayek en Keynes in ligt? Zoiets als Rehn gister zei dus."
engl.:"should it be possible that the best strategy for the EU is laying somewhere between Hayek and Keynes? Thus something like Rehn said yesterday" (Tweet by @diederiksamson, May 6th 11.53 CET)
he (Samson) might have a point. As well as everyone else who is not advocating strictest austerity only or who calls for more spending sprees only, no matter what additional pile of debt that will produce.
So coming back to the point of 'worry' it is worth to notice, that the more 'idiocy' is exposed, the more could possibly being prevented in future and instead we all don't have to worry at all. Neither about idiocy nor about inflation, which is also damaging, but not the (only, single) evil the eurozone faces. Something that some orthodoxists to this very day are not able to see.