Saturday 29 June 2013

The JP Morgan vision for Europe

In May 2013 the US financial giant JP Morgan released a progress report outlining their take on what they call the "Eurozone Adjustment".

The standout passage of this document can be found on page 12, where they explain what they think is wrong with Europe (quoted below). Note there is absolutely no mention of financial instability caused by countless recklessly over-leveraged financial institutions gambling on crap like Spanish property, Irish bank bonds and Greek sovereign debt, and absolutely no talk of financial sector reform either. The JP Morgan narrative adheres very closely to the Great Neoliberal Lie technique, where the real causes of the financial crisis are played down or ignored completely in favour of the misleading narrative that social welfare spending caused the crisis. Here's the section in question:
"The political systems in the periphery [of the Eurozone] were established in the aftermath of dictatorship, and were defined by that experience. Constitutions tend to show a strong socialist influence, reflecting the political strength that left wing parties gained after the defeat of fascism. Political systems around the periphery typically display several of the following features: weak executives; weak central states relative to regions; constitutional protection of labor rights; consensus building systems which foster political clientalism; and the right to protest if unwelcome changes are made to the political status quo. The shortcomings of this political legacy have been revealed by the crisis. Countries around the periphery have only been partially successful in producing fiscal and economic reform agendas, with governments constrained by constitutions (Portugal), powerful regions (Spain), and the rise of populist parties (Italy and Greece)."
So, the problems that JP Morgan have identified in Europe are strong legislatures (or "weak executives" as they put it) strong regional representation, protected labour rights, strong constitutions and political systems that rely in part upon consensus building instead of dictatorship. They also identify the rise of democratic populist parties and the public right to political protest as major impediments to their "Eurozone Adjustment" objectives.

JP Morgan make it absolutely clear that they would like to see European states remodeled with much more powerful, dictatorial and centralised executives, they want to see the destruction of labour rights and they are certainly not keen to allow populist anti-austerity parties or public protest to get in the way of this agenda.

Essentially what this document demonstrates is that JP Morgan see the decline of European fascism since the 1940s and its replacement with mixed-economy social democracies as a great disappointment, that they are determined to steer Europe back towards fascism and that they are intent on using the financial sector meltdown as an excuse to use the utterly false Great Neoliberal Lie narrative to justify this pro-fascist agenda.

The motivation for a major financial organisation like JP Morgan to promote the fascistic remodeling of Europe should be absolutely obvious. States administered by powerful centralised and dictatorial executives are far more easily influenced by corporate interests than governments constrained by strong legislatures, fair judicial systems, strong regional representation, robust organised labour and popular freedom of protest, all enshrined by a durable constitution.

To put it more simply, a state with a centralised and dictatorial government is far more malleable than a state in which the government must balance the interests of corporate interests with those of organised labour, regional interests and the public at large. If labour rights are eroded, local government weakened and the right to popular protest is curtailed, the enforcement of corporate interests becomes much easier. All the corporations need do is financially coerce (or economically straitjacket) the cetralised executive branch of government in order to gain almost complete power over whole national economies.

Returning to the quoted section of the JP Morgan report, we can clearly see that they do not like consensus building governments that abide by their constitutions and protect civil liberties, in fact they disparage this kind of co-operative approach as "clientalism" [sic] (err I believe they meant clientelism).

In reality, the general concept of clientelism isn't the problem to JP Morgan at all. The problem is that under the social democratic model, government "clientelism" towards corporate interests is curtailed. The corporate lobby don't want the states of Europe to function as the clients of the general public through strong local democratic government (and the checks and balances offered by a robust legislature), through strong labour organisation, or through the liberty to protest. JP Morgan seem to want the states of Europe to act as exclusive clients of the corporatist agenda.
Perhaps Nazi propaganda minister Joseph Goebells
would be proud to know that his big lie technique
is still being used to defend fascism to this day.

In effect, the JP Morgan complaint isn't about clientelism at all, it is a complaint of "wrong-clientelism". It is a complaint that in their view, the states of Europe must not be allowed to act as the client of the public by allowing citizens involvement in economic policy making (through democratic processes, strong labour representation or liberty to protest) because this kind of public interference acts as an impediment to their beloved corporate agenda. JP Morgan would prefer to see the states of Europe act exclusively in the interests of the corporate lobby, and imposing illiberal, anti-democratic or even fascistic socio-economic reforms is an agenda they seem to fully endorse.

It is absolutely obvious why corporate interests like JP Morgan would dearly love to see the rights to to protest and organise labour severely curtailed. By pushing for the the dismantlement of the means of resistance, they can minimalise and marginalise social opposition to the corporatist agenda they wish to see enforced by these corporate client states, no matter how socially or economically harmful or unpopular the corporatist agenda may be to the state in question.

Just in case you think it sounds utterly far fetched that an American financial institution may be attempting to undermine democracy and liberty in Europe in order to impose fascistic regimes more favourable to their commercial interests, just consider the history of JP Morgan themselves. Not only did JP Morgan actively invest in Nazi industry (through the automotive company Opel and other subsidiaries) well into the Second World War, they were also compensated for their losses by the American taxpayer when they were forced to divest (several other American corporations such as Standard Oil maintained their investments in Nazi Germany for several years after the US joined the war against Germany!). Chase Bank (which merged with JP Morgan in 2000) were one of Wall Street's most enthusiastic investors in the Nazi economy, even providing direct assistance to Hitler's Nazi regime in the late 1930s. Chase and JP Morgan were the only two American banks which stayed open in France during the Nazi occupation there.

JP Morgan has a proven history of collaboration with fascist regimes in Europe. If JP Morgan supported and profited from the rise of the Nazi party in Germany, and suffered no adverse financial consequences for it (even getting a US taxpayer funded tax rebate to cover their losses when they were forced to divest their Nazi assets and first dibs to reacquire their Nazi assets after the war was over), is it any surprise that they favour the imposition of an illiberal and fascistic political agenda on the states of Europe once again?

Since I've strayed onto the topic of the Second World War, I'll finish with a quote often attributed to one of the fascist dictators that JP Morgan seem to be getting nostalgic about; Benito Mussolini.
"Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power."

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