Here's a few thoughts given to a group of bankers in Germany about the latest EU developments from IMF President Dominique Strauss-Kahn...sidebar...could that dude have a name that sounded more European?
http://www.imf.org/external/np/speeches/2010/111910.htm
Kahn (sounds like a bad guy from a lame action movie, but I digress), uses endless code language to avoid controversy because his agenda (if widely recognized) would be wildly unpopular. We will see more of this phenomenon below.
Kahn suggests that fiscal policy should be run by the EU rather than by national governments. "When the agenda is driven by the center, things happen. Think of the single market program, or of monetary union. But when the agenda is left with the nations, things stall." While the Kahn would never admit it, this is a closeted attack on democracy. One that I support...
Democracies (run by the rabble) reward politicians who promise government benefits and beneficial rules. This is why labor markets slowly become closed stagnant abominations filled with rules to protect the workers of the past at the expense of the workers (and the society) of the future. A politician promises to require every company to provide a pension plan...the workers who vote for him are thrilled, but those who do not yet have a job are less likely to find one because fewer companies can afford to pay for the pensions, healthcare, vacations, disability, and various other costs imposed on companies by politicians for their populist appeal. At its core, the EU is fundamentally undemocratic. The EU is an amalgamation of policy wonks and career bureaucrats who have never won a referendum from the rent-seeking masses. That is what makes the EU fundamentally better qualified to manage fiscal policy. As much as I dislike bureaucrats, there is no doubt that wonks are much more realistic and far-sighted than the average voter.
He goes on to suggest that Southern Europe is uncompetitive because "denial of opportunity is harming the economy." He is cryptically referencing the barriers to entry created by stifling regulation designed by politicians at the behest of established corporations to ward off competition from upstarts. An EU fiscal management and regulatory regime would be far less susceptible (though by no means immune) to the lobbying efforts of corporations seeking to thwart competition by creating rules and regulatory policies that punish small upstarts. Why would the EU be more immune? Because they do not rely upon companies for campaign donations, and ideally would be forbidden from accepting gifts and jobs from corporations over which their regulatory authority extended.
Like any villain seeking something unpopular, Kahn uses veiled references to his real agenda. He points out that the European "labor market institutions tend to reward privileged insiders at the expense of excluded outsiders." This is undoubtedly a reference to the very popular job-for-life laws, restrictions on firing workers, and other business regulations that discourage the hiring of new people because the company will then have to provide the new employee--in addition to all the old employees--with a job for life (or else pay stiff penalties for releasing them.) These state mandated benefits are gravy for those who have a job, but punish those who do not (meaning future workers who are not yet voting--or unemployed who in many cases do not understand the rules of cause and effect).
Ultimately Kahn proposes a 'Common Labor Market' where the rules of the workplace are made universal throughout the EU. He also proposes centralized control over fiscal policy. As he says, both of these would help Europe advance because nations simply cannot be relied on to create sound fiscal or regulatory policy...making too many barriers to entry, workplace regulations, and spending promises to be sustainable in the long term.
You might think from my analysis that I favor the Kahn's proposals to give more power to the EU, and you'd be right...after all, I am an advocate of One World Government. Kahn proposes something that sounds great to a true Internationalist, a true globalization enthusiast, and something that will bring us one step closer to total unity...something I totally support. What's the problem? With all his hand-in-hand cooperation with the EU on the bailouts of Greece and Ireland (and possible future bailouts), it seems clear that Kahn is positioning himself for a leadership position within the same organization under which he would consolidate power. Just like any masterminding arch-villain, he is creating a dominion to rule.
Call me paranoid, but I'm always suspicious of people who seek power.
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