I fully agree with this analysis. Germany must cede as much sovereignty as it is demanding of the debt-ridden countries. stand together or fall apart. It was ironic that isolationist USA criticised 'war-mad Europe' given that it was its economic policies that pushed that continent into the hands of war-mongerers in central Europe. Will Marx be proved wrong again - that when history repeats itself, the first instance is tragedy, the second is farce. The evisceration of weaker European coutnries is a tragedy for its peoples.
In today's debt crisis, Germany is the US of 1931
Germany's own history shows that dictating economic decline to other nations only stores up trouble for the future, by Fabian Lindner for Social Europe Journal, 24th November 2011.
A country faces an economic and political abyss: the government is on the brink of bankruptcy and pursues fierce austerity policies; public employees take huge pay cuts and taxes are drastically increased; the economy slumps and unemployment rates explode; people fight each other on the street while banks collapse and international capital flees the country. Greece in 2011? No, Germany in 1931.
The government's head is not Lucas Papademos, but Heinrich Brüning. The "hunger-chancellor" cuts government spending by decree, ignoring parliament while GDP falls without limit. Two years later Hitler will be in power, eight years later the second world war will begin. Today's political situation is still different, but the economic parallels are frightening.
Like in today's crisis countries, Germany's key problem in 1931 was foreign debts. The US was Germany's biggest creditor, Germany's debts were denominated in US dollars. Since the mid-1920s, its government had borrowed huge sums abroad to service reparation payments vis-à-vis France and Great Britain. Foreign credit also financed Germany's roaring twenties – the economic boom after the 1923 hyperinflation. Like Spain, Ireland and Greece today, Germany's 1920s upswing was caused by a credit bubble.
The bubble burst when US financial markets collapsed in 1929. US investors and banks were hit hard, lost confidence and reduced their risks – especially their investments in European assets. Credit flows into Germany, Austria and Hungary came to a sudden halt. US investors did not want Reichsmark – Germany's own currency – but dollars, a currency the German Reichsbank could not print. The dollar withdrawal out of Germany – especially out of German bank deposits – led to the quick depletion of the Reichsbank's currency reserves.
To earn dollars Germany had to turn its huge current account deficit into a surplus. But like today's crisis countries, Germany was trapped in a currency system with fixed exchange rates, the gold standard, and could not devalue its currency. However, even upon leaving the gold standard, chancellor Brüning and his economic advisers feared the inflationary effects of a devaluation and a replay of the 1923 hyperinflation.
Without dollar liquidity from abroad, the only way the government could turn around the current account was fierce wage and cost deflation. In just two years Brüning cut public spending by 30%. The chancellor raised taxes and cut wages and social security expenditures in the face of ever increasing unemployment and poverty. Real GNP dropped by 8% in 1931 and by 13% a year later, unemployment increased to 30% and money kept spilling out of the country. The current account turned from a huge deficit into a small surplus.
But there were not enough dollars available on world markets. In 1930 the US Congress had introduced the Smoot-Hawley-tariff to keep imports out of the country. Countries with dollar debts were cut off from the US market and could not earn the necessary money to service their debts. The situation didn't improve when president Hoover proposed a one year moratorium on all of Germany's foreign debt. The moratorium was opposed both by France – which insisted on German reparation payments – and the US Congress. When Congress finally passed the moratorium in December 1931 it was too little, too late.
In the summer of 1931, German banks began to fail, causing both a credit crunch and huge public aid packages to save the biggest banks. The banks had to be closed and the government defaulted on its debts. The Hoover moratorium and a policy of fiscal expansion under Brüning's successor von Papen came too late: bankruptcies and unemployment kept rising and the Nazis gained political ground.
The parallels to today's economic situation are frightening: Greece, Ireland and Portugal have to pursue fierce austerity policies under the pressure of creditor countries and financial markets in order to turn their current account balances from deficit to surplus; Greek unemployment stands at 18%, Ireland's at 14% and Portugal's at 12%, Spain's even at 22%. And those who could help don't do enough: Germany and the German central bankers demand drastic austerity and only give piecemeal and insufficient help in return – too little, too late, now and then.
Much would have been gained for Germany in 1931 if the US – and also France – had provided the necessary liquidity for German banks and its government. Maybe the political radicalisation could have been avoided. But the US was turning isolationist. It did not want to get involved in messy European affairs.
Today Germany plays the US role. Both parliament and the government hesitate to provide the necessary help for the crisis countries: within the EFSF, Germany is willing to guarantee only up to €211bn of crisis country borrowing. This is not enough. The 2008 guarantees for the German banking system were €480bn.
Germany still insists on its current account surpluses. These are, by definition, the deficits of the crisis countries. Thus they keep these countries from earning the money to service their debts. Further, Germany fiercely opposes liquidity credits by the ECB. German economists and central banker justify the ECB's passivity with the threat of inflation. But they mix up the historical lessons from Germany's 1923 hyperinflation and its 1931 deflation and unemployment crisis.
This failure of judgment can easily backfire: Germany's reputation all over Europe is already declining, political tensions in crisis countries with record unemployment are increasing drastically and the ever more likely breakup of the eurozone would threaten Germany's economy, especially its banks and exports.
The US learnt the hard way that it had to take responsibility for the world's economic stability. The second world war was one of the consequences of the 1930s crisis that it could have prevented.
After having failed to stabilise the world economic system in the early 1930s, by 1945 the US had learned that only economic co-operation could lead to a peaceful and prosperous world. Via the Marshall plan and the opening up of its markets for European exports it allowed Europe to rebuild its destroyed economy. Meanwhile, US exporters profited from Europe's hunger for investment and consumption goods.
Until the early 1970s the US led the international trade and currency system – the Bretton Woods system – thereby guaranteeing economic prosperity, a free market with social equity and thus the economic pre-requisites for social democracy.
Both the German public and politicians should learn from history. Solidarity with the crisis countries is in Germany's long-run interest. The German government should stop abusing its power to dictate economic decline to other nations. The alternative is economic stagnation and increased tensions between European nations. The verdict still holds: those who are not willing to learn from history are bound to repeat it.

Manchester City may have hoped to goad their Mezzogiorno opponents Napoli by wearing an away strip not dissimilar to that of strutting AC Milan (in a role reversal to England, northerners look down on southerners). That tactic failed as the amazing crowd at Stadio San Paolo exhorted their team to strain every sinew for the Napoli cause. What struck me most was such an atmosphere could be conjured in an arena with a running track. This gives the lie to Tottenham Hotspur’s PR that they had to demolish the Olympics athletics stadium in Stratford, replacing it with a purpose-built football home. West Ham’s supporters are probably one of the few such groups in the league pyramid who could transform the athletics forum into a crucible. Spurs were acknowledging that their fans just aren’t as passionate in their ability to achieve the same effect.

The passage of time is magic here

While I like the medievalist, mythic Merlin, last time out for the episode Lamia, they surely did a boo-boo. Over three nights, three men in a village are stricken with a mysterious illness, rendering them comatose. The wife of the chief elder rides to Camelot over the course of two days. Merlin, Guin(evere) and some of Camelot’s knights take another two days to ride out there; as they ride back they free Lamia from some bandits and she bewitches them to travel away from Camelot. After the two days it should have taken them to get back, King Arthur sets out with his entourage, taking two days to reach the village. Next day, travelling back, they come across a wagon with dead slavetraders and one barely alive slave trader. Lamia broke out of the wagon, slaying his companions and leaving him for dead. Are we to believe that this fellow has lain in the same position out in the open for twelve days in a near moribund state? And that his colleagues have not begun to putrefy - sure the birds and other animals of the forest are scared of Lamia and the path she has taken but bacteria too?
Another great thing about Merlin is the stunning (mostly CGI) castles and monuments, though the number that are deserted and in no need of maintenance against the onslaught of nature and time is striking. The catch-all excuse is that magic keeps up the appearances. Hmmm. The latest one to which Lamia lures the knights even has its windows boarded up in the manner of a northern English town’s high street in the 1980s. Lamia is killed and that is the resolution of the narrative but it doesn’t bear the weight of too much thought afterwards.

The fresh turmoil in Egypt has illustrated that a new dynamic is at play throughout the Middle East and that the army must step down from power immediately after the parliamentary elections this Monday. They won’t of course but that’s because they have become greedy for power. Let’s call the Supreme Council of the Armed Forces what it really is – a junta.
Making vague promises to step down in 2013, hoping popular anger will have dampened down by then and so they won’t need to is cynical. Fanning sectarian division by trying to isolate the Copts and cracking down on them is both cynical and dangerous – it could lead to another Iraq situation. Locking up 12,000 civilians since February via the medium of military courts is just plan nasty. Stating bluntly through their civilian proxies that they will have a veto on any military budgetary issues and on the new constitution makes a lot of Egyptians wonder what their revolution was in the first place.
Maybe the army hoped to have a regime such as previously in Turkey and still current in Thailand, when they could step in at a moment’s notice from behind the façade of democratic trappings. The iron fist in the velvet glove, a praetorian government. I remember one demonstrator in February praising the soldiery after they had protected the protestors and removed Hosni Mubarak, effusive in rose-tinted history, as he said the Egyptian army had never attacked its own people. If this was true, then it is no longer.
Field Marshal Mohamed Tantawi was rumoured back in February to be even more dismissive of the idea of democracy than Mubarak. While the latter feared the rise of religious extremism with the Muslim Brotherhood taking over the ruling of the country, Tantawi, a career apparatchik, was just contemptuous of free and fair elections. In his role as interim head of state, Tantawi is unapproachable and hopes to mould public opinion through rigid control of state-run television stations and newspapers. He seems an unlikely convert to representative government, as much as Tsar Nicholas II was reconciled to governing Russia with a duma parliament. Russia had two revolutions – a popular one and a zealously authoritarian one. Tantawi (and the jailed Mubarak) should not forget that it was the second revolution that claimed the life of Nicholas Romanov and his family.

When Saturday comes

Tomorrow, in English football, the Unstoppable Force will contest a game with the Immovable Object. In times gone by, this would have been a clash between Sir Alex Ferguson’s Manchester United and Jose Mourinho’s Chelsea. This season though, Man Utd are still in transition and Andre Villas Boas’ Stamford Bridge are playing Keeganesque football – very attractive but far too open at the back.
No, instead it will be the revived Manchester City versus a resurgent Newcastle United, both boasting the last league unbeaten records this season in the top flight. The Magpie defence has been parsimonious in its operation, quite against type, with the meanest concession of goals in the country. Man City are no slouches in their rearguard either but their attack has been tearing up clubs around the country. Fulham have slowed them down with a draw but no-one has stopped them in the Premier League, from goals or points.
The corresponding fixture in 2010, saw an abysmal refereeing performance in favour of the home side in which the most grievous was when Hatem ben Arfa had his leg broken in two places by Nigel de Jong. The latter not only went unpunished when it should have been a straight red card but because the referee had ‘seen’ it (and had let play continue until a Newcastle player ‘committed’ a foul), retrospective punishment could not be applied. It took ben Arfa a year to recover from the injury and who knows if he will ever fully be the same again (or indeed if he will play a part at the scene of the crime). After snapping Stuart Holden’s leg and planting his studs as a karate kick in Xabi Alonso’s chest, the only sanction de Jong received after the latest offence was to be temporarily dropped from the Dutch national team. Further, Man City were given a penalty when Carlos Tevez was tripped outside the box and Newcastle denied one when Shola Ameobi had his legs hacked from under him inside. Man City won 2-1 when they should have lost 2-1 with ten men. The erring referee spent a time in the second tier for this egregious officiating.
A victory for the black-and-whites will lend impetus to an unlikely title tilt, whereas a draw will continue their pursuit of a European place (preferably Champions League). A 1-1 draw here, with Chelsea vs Liverpool on Sunday and Tottenham Hotspur vs Aston Villa on Monday will be very beneficial to the Toon. The odds are in favour of a Man City victory but not as overwhelmingly as they appeared to be at the start of the season.
The owner and managing director of NUFC will hope Alan Pardew can craft a positive result to take the heat off their devious, counter-productive and futile plan to strip the Toon’s stadium of the words ‘St James Park’. They claim it will raise money which was the same wheeze when they made it SportsDirect@St JamesPark.com. No-one came in then, no-one will now, yet they go on to say “You don’t know how horrible we can be.” What is the rationale for being nasty to fans? It makes no sense at all.

Public Enemy

Being a public figure is a fraught business these days, even for those who only occupy barely a sliver of the reediest of limelight. The wrong word selection or poor phrasing and suddenly you’re more of a pariah than Bashar al-Assad. No wonder Herman Cain was so non-committal in describing what he would do regarding the Libyan revolution.
Robert Peston has received flak this week, not for being a stooge of the Murdochs (the BBC has rightly handed more tabloid journalistic bad behaviour to others) but for twittering the phrase “Queer Street” - as in if it hadn’t been for prudent debt-management measures, the UK would be in “Queer Street and Skid Row.” He gets a flurry of criticism from the ignorant mob and has to post dictionary definitions that show the term “Queer Street” has zilch to do with homosexuality (used by Charles Dickens, it is traditionally understood to mean someone who is in financial difficulties). Mind you, having an open-feed twitter account does expose you to the banal outrage from dulled minds that football phone-ins generate, only 24/7 instead of a few hours.
More caught in the frenzied zeitgeist of thought control, Jason Gardiner, the ‘Mr Nasty’ of the judging panel of the reality show Dancing on Ice has had to come out and defend himself for being robbed on the street. Or rather how he described his attackers (again on Twitter), saying that he had been “mugged by two hooded black youths in Stockwell who held a knife to my throat and threatened to kill me, all for an iPhone.” He has been lambasted as racist by people saying it was not necessary to state that they were black. It was not necessary to state that they were hooded, a dreadful slur on all those who choose to wear hoodies. Why, even calling them youths, is tremendous insult to the young of this country. Indeed, not all muggers hold knives to throats – the mugging community must be flabbergasted at this libel.
In a similar vein, Steve Williams, Tiger Woods’ former caddie, has been excoriated for the remark at a golfers’ dinner that the win for his boss Adam Scott was a way of sticking it to that ‘black arsehole’. I would say that this is descriptive rather than pejorative. The rough-and-ready Williams could have put it better but if he had just said ‘arsehole’ without prefacing it, people would have drawn conclusions that it was Woods but it could have been, conceivably, Greg Norman or someone else with whom Williams had fallen out. But there is only one world-famous golfer whose skin colour could be termed as black and so everyone in that hall would know exactly who he was talking about. I can’t believe that Williams caddied for Woods’ for ten years yet harboured a racist underside – it’s simply ridiculous to suggest so yet commentators faint in shame at this ‘betrayal’. How about the betrayal felt by Williams, standing by Woods through all his marital and personal travails, only to be dumped unceremoniously like a sweaty shirt because Woods feels he needs to freshen things up. That explains Williams’ anger, Scott’s understanding and Woods’ stoic silence. It is all the hyper-ventilating by those in the media bubble, stirring up controversy to make themselves appear more important, as they seek to ban words that are colours from the English language.
Far more problematic is John Terry’s expletive-laden tirade against Anton Ferdinand in which the word ‘black’ is sandwiched. His excuse that he was using expletives to show that he wasn’t using ‘black’ scornfully seems bizarre. It is in this instance that the word need not have cropped up at all – it seems actively to be part of the insult. Ferdinand could be mocked for playing for a certain north-east England club last season but mentioning his skin colour in this context is out of order at the very least. If he had faced off against a, say, South Korean in another game and used ‘yellow’ inbetween very offensive swearing, it would be just as unacceptable. It is a modern trend that people can do or say racist things in earnest but call them racist and they are apoplectic or in denial. They are happy to be pejorative about others of a different race but don’t like treatment of labelling when it is applied to them. They are more offended by the term ‘racist’ than its actual validity.
On the extreme end of this was Ron Atkinson’s foul-mouthed rant about Marcel Desailly in 2004 when he thought his microphone was switched off. Not only did he use the overtly racist n-word but his whole ‘analysis’ saying that Desailly was lazy in an expression that when coupled with the n-word, one could not get a more complete picture of prejudice. Atkinson was rightly sacked from both ITV and The Guardian (the latter having an interim replacement of Andy Gray, later disgraced as an unreconstructed sexist). He may have brought through coloured players under his tutelage in the 1970s when other clubs would not but now that looks as patronising, white-man’s-burden paternalism, rather than striving for and believing in equality. Atkinson’s later bafflement that some rappers and black kids addressed each other with the n-word could not comprehend that this was an attempt to devalue the term to hurt racists and that as Atkinson’s ancestors had not been stolen or sold from their homeland and forced to work as slaves, he was forbidden from using some words. A pathetic excuse for the whole beyond-the-pale phraseology he deployed.
There is a scale and a line. Some people can be more racist than others but all racism is intolerable, as is sexism, homophobia and all forms of trying to demean. Richard Herring on his radio show examined why the first three things were off-limits to comedians but mental illness was not. The irony was that some mainstream comedians think of themselves as non-racist but use the abusive concept ‘mong’ quite freely even though its origins (unlike that of Queer Street in terms of homosexuality) are inherently racialist, believing those of an East Asian complexion are more stupid than Caucasians. This incenses me – such comedians must be of a lower-order of intelligence than their fellow humans, whatever the offender’s ethnicity.
What I don’t like is the self-righteous demagoguery against people who say or write things when seeking purely to illustrate a situation rather than aiming to be derogatory of a person’s ethnicity or such like. Len Goodman is attacked for calling his fellow Strictly Come Dancing judge Craig Revel-Horwood “a silly little sod.” Now Revel-Horwood being gay and the term ‘sod’ in some circles an abbreviation for sodomite was not at all what Goodman was thinking of. Revel-Horwood was more piqued that Goodman was disagreeing with him rather than the put-down. In fact, until today I always thought the insult was referring to clump of earth, seeking to intimate that the person on the receiving end should be trodden all over. What a close-call that could have been for our ever more intolerantly tolerant future. Leonard Cohen once composed the song “Jazz Police” and the couplet “Jazz Police are looking through my folders/Jazz Police have got their final orders” has the ring of the times we live in. As gay rights campaigner Peter Tatchell - not usually one for restraint - commented in the Robert Peston case “people are being oversensitive.” Quite.

Beware of Greeks not bearing gifts but calling referendums

In order to try and safeguard his own political position because presumably he was hoping for re-election, Greek Prime Minister George Papandreou called a referendum on the bailout despite a majority of Greeks saying that they would reject it (though 50% of Greek debt was to be written off). Maybe he was gambling that though 60% of the Greek electorate was against the EU deal, 70% were in favour of remaining in the Euro. Hence, after their all-too-imaginable explosion of fury, France and Germany tried to browbeat Papandreou into framing the plebiscite question as an in-or-out of the Euro poser. But with the Greek finance minister attacking his own boss and other memebers of the ruling party resigning, the Greek government is about to collapse which will result in a fresh general election that could ve very unwelcome for efforts to save the Euro. Let it be made clear. The default and/or withdrawal from the Euro of Greece will, despite its relatively small size in the grand scheme of things, send economic shockwaves across the world. Never was the saying that but for a nail, the kingdom was lost ever more true.