July 17, 2015
You've heard that the Euro was created to provide two benefits for
Unite Germany, France and other countries in a peaceful political
situation, to prevent repeats of World War I and II
Create a macro-zone to compete against the economic strength of
So how did we get to this… austerity and meanness of spirit, as
typified by the grim expressions sported by German Finance Minister
Wolfgang Schäuble in talks with Greece?
Because the Germans don't view the Euro as a utopian idealistic way
to help promote peace and prosperity for all of the EU nations.
Instead, Germany sees the Euro as a way
to weaken its currency to increase exports.
As Ben Bernanke
Germany has benefited from having a
currency, the euro, with an international value that is
significantly weaker than a hypothetical German-only currency
Germany's membership in the euro area has thus proved
a major boost to German exports, relative to what they would be
with an independent currency.
Moreover - in a little-known slice of
history - the Euro was really created for very different
purposes than peace in Europe or competition against the U.S.
Specifically, this guy - a
North American named Robert Mundell - is the
father of the Euro:
Mundell is not the least
Born in Canada, Mundell taught at the University
of Chicago for 7 years, and has since taught at Columbia University
in New York for more than 40 years.
But didn't Mundell create the Euro to
Not according to The Guardian, Independent
and BBC investigative journalist Greg Palast, who
explained in his book
Who spawned this cruel little
bastard coin? I called its parent, Professor
Mundell is known as the Father of the Euro. The
Euro is often spoken of as a means to unite post-war Europeans
together emotionally and politically and to give this united
Europe the economic power to compete with the U.S. economy.
That's horseshit. The Euro was invented in New York,
New York, at Columbia University.
Professor Mundell invented
both the Euro and the guiding light of Thatcher-Reagan
government, "Supply Side Economics" or, as
George Bush Sr.
accurately called it, "Voodoo Economics."
and the Euro are two sides of the same coin. (Ouch! Some puns
Like the Iron Lady and President
Gaga. the Euro is inflexible. That is, once you join the Euro,
your nation cannot fight recession by using fiscal or monetary
"wage reduction, fiscal constraints (cutting
government jobs and benefits) as the only recourse in crisis,"
The Wall Street Journal explains with joy - and sell-offs of
government property (privatizations).
Why the Euro, Professor?
told me he was upset at zoning rules in Italy that did not allow
him to put his commode where he wanted to in his villa there.
"They've got rules that tell me I can't
have a toilet in this room. Can you imagine?"
I couldn't really. I don't have an
Italian villa, so I cannot really imagine the burden of commode
The Euro will eventually allow you
to put your toilet any damn place you want.
He meant that the only way the
government can create jobs is to fire people, cut benefits, and,
crucially, cut the rules and regulations that restrict business.
He told me:
"Without fiscal policy,
the only way nations can keep jobs is by the competitive
reduction of rules on business."
Besides bowl location, he was
talking about the labor laws, which raise the price of plumbers,
environmental regulations, and, of course, taxes.
No, I am
not making this
up. And I am not saying the Euro was imposed on the Old Country
just so the professor could place his toilet at a place of
The Euro is fashioned as an anti-regulation
straitjacket that would eliminate gallons-per-flush laws, flush
away restrictive banking regulation, and all other government
Now does the destruction of Greece's
sovereignty make a
pointed out in the Guardian:
The idea that the euro has "failed"
is dangerously naive. The euro is doing exactly what its
progenitor - and
the wealthy 1%-ers who adopted it
and planned for it to do.
For him, the euro wasn't about
turning Europe into a powerful, unified economic unit. It was
about Reagan and Thatcher.
And when crises arise, economically
disarmed nations have little to do but wipe away government
regulations wholesale, privatize state industries en masse,
slash taxes and send the European welfare state down the drain.
Far from failing, the euro, which
was Mundell's baby, has succeeded probably beyond its
progenitor's wildest dreams.
In other words, the Euro was intended to,
Postscript: Mundell is also the
creator of supply side economics… also known as "trickle down"
or "piss on the poor" economics.
Many of Reagan's top economic advisors
subsequently admitted that supply side economics don't work to help
this. (Washington's Blog is for free market capitalism… but
supply side economics is
capitalism, not free market capitalism.)
Moreover - as Martin Armstrong has
warned for decades - letting countries like Greece join he Euro
without first structurally adjusting their debts was a recipe for
For example, when the Euro double in value a couple of
years ago, Greece's debt doubled in real terms.
That's when Greek
really started sliding towards crisis…
So the wealthy nations like Germany - intentionally or unintentionally
- and the other wealthy nations
laid the groundwork from the start for asset stripping in Greece
and other indebted states.
Indeed, Armstrong and Nigel Farage
(member of the European Parliament and leader of the UK Independence
The Greek people never voted to
enter the euro … it was forced upon them by Goldman Sachs and