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  Americans are not only losing their economy. They are losing their liberty. As far as domestic policy is concerned the face of the United States has undergone basic changes. Against the background of the war against the alleged terror threat important civil rights granted by the Constitution were abolished systematically within a few years. In his book, Paul Craig Roberts shows the degeneration of the U.S. into a warmongering police state.

  To put it briefly, the America that Europeans knew during the second half of the 20th century does not exist any more. This is the most important epochal change to which we are contemporary witnesses. The European belief is that the Americans have always got back on their feet and will do so again, but this time might be different. The executive branch has freed itself of accountability to U.S. laws and to international law.

  “In the course of human history every state sooner or later went broke or was conquered. Where do we get the arrogance to believe that our politicians are more intelligent than all their predecessors?“ When Paul Craig Roberts at the occasion of a meeting in September 1993 in his office in Washington spoke those sentences he hardly expected that both could be true for his country not even 20 years later. Not only is the United States effectively bankrupt, but also the military-industrial complex and the financial oligarchy of the country have seized the power and initiated an unprecedented re-distribution of income, wealth, and power to the top. Super rich people are financing both large political parties, and with their unlimited financial means they decide on the results of both the presidential and the congressional elections.

  Only recently, by ruling that this massive exertion of influence on election outcomes is merely the exercise of free speech, the U.S. Supreme Court gave its blessings to the private purchase of the U.S. government. Plutocratic power structures have developed out of the crony capitalism that now sets the agenda in Washington.

  “There really are two Americas, one for the grifter class and one for everybody else,” Matt Taibbi writes. “In everybody-else land the government would be something to be avoided. In the grifter world, however, government would be a slavish lapdog that the financial companies use as a tool for making money. The grifter class depends on these two positions getting confused in the minds of everybody else. They want the average American to believe that what government is to him, it is also to JP Morgan Chase and Goldman Sachs.“2

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  1 Siehe zum Beispiel http://www.nytimes.com/2012/06/12/business/economy/family-net-worth-drops-to-level-of-early-90s-fed-says.html?_r=2

  2 Matt Taibbi, Kleptopia. Wie uns die Finanzindustrie, Politik und Banken für dumm verkaufen. Seite 43.

  Maruschzik: How much longer reserve currency?

  Apart from its military engagement in Arab states, America is fighting an economic war against the rest of the world – especially against Europe. At stake is the U.S. dollar’s role as reserve currency and as anchor currency of the world financial system. It is a matter of financing the global power, the thirst for consumption, and the debt of the United States. With the U.S. dollar as anchor currency of the world, the United States has been in a very comfortable position since the middle of the 20th century: The U.S. can pay for its imports with its own currency. The U.S. does not have to earn foreign currencies by exporting in order to import. While the trade partners are delivering real goods like industrial products and crude oil, they receive fiat money in return, much of which is then converted into U.S. government bonds. For America’s trade partners to finance the U.S. trade and budget deficits requires confidence that the U.S. dollar represents an adequate equivalent to the real goods and services. Considering the potentially disastrous economic situation of the United States today, this confidence is eroding.

  The times have gone, in which the U.S. dollar was the unchallenged king of the currencies. Especially the euro has been a threat for the U.S. dollar. The same should increasingly apply to the yuan in the future. The Chinese government is working to establish the ‘people’s currency’ (Renminbi) as an international trading currency. Only recently, it signed appropriate bilateral agreements with a number of countries. For example China and Japan agreed to directly trade their currencies since June 1, 2012. Moreover, the Chinese government strives to establish a yuan bond market and to achieve the free convertibility of the people’s currency that was tied to the dollar. China can count on support from all over the world. Governments of other emerging countries have expressed the objective to end the global predominance of the U.S. dollar. They do not want to be at the mercy of U.S. financial policy.

  In order to save it’s position, the U.S. government doesn’t waste any opportunity to disguise the serious economic situation of its country. Roberts tells us to what extent the official statistics are being manipulated. On the other hand, in close cooperation with the Federal Reserve and the U.S. financial oligarchy, the U.S. government obviously wastes almost no opportunity to intervene against the euro in the global financial markets. The objective is clear: The weaker the euro appears, the surer and stronger the U.S. dollar appears, and the more likely investors are to buy U.S. Treasury debt and, thus, to finance the wars and budget deficit of the United States.

  Maruschzik: Quo vadis Europe?

  Against this background the developments in Europe are increasingly significant. The ‘Old Continent’ is also changing its face in these days. Which way will Europe finally take? The reply to this question determines the second epochal change to which we are contemporary witnesses.

  This much seems clear: The European political elites are using the sovereign debt crisis to finally end the sovereignty of the European national states – especially also of Germany – and to bring the single countries of the eurozone under the control of a dirigiste bureaucratic central government. The goal is to establish the United States of Europe in the place of historically sovereign nations.

  The founding fathers of the European unification envisioned the process of integration quite differently. They intended to build it upon a liberal regulatory policy that would establish and secure an anti-discriminatory competition between the member states. In paragraph 3 of the Treaty establishing the European Economic Community (EEC Treaty / Treaties of Rome) of 1957, it says: “For the purposes set out in Article 2, the activities of the Community shall include, as provided in this Treaty and in accordance with the timetable set out therein: the institution of a system ensuring that competition in the common market is not distorted.“

  A good approach, because Europe distinguishes itself by its variety that grew over centuries. The continent consists of many and very different regions with unique cultural, culinary, linguistic, social, and political idiosyncrasies. Furthermore, there are very different mentalities and perceptions of life. Out of this variety Europe’s strengths, Europe’s creativity, and Europe’s charm arose.

  Instead of protecting these special idiosyncrasies with a liberal regulatory policy and to promote the competition between autonomous regions, the authorities in Bruxelles and Europe’s political elites have been pursuing a dirigiste bureaucratic integration programme for roughly five decades that increasingly limits the scope for personal initiative, variety and the richness of human mind in society, state and economy. The centralistic orientated Bruxelles is steadily expanding its power and sphere of influence. “The markets and other areas of life shall be ‘gripped’ with planning methods in order to subordinate the ‘mircrostructural’ substructure of the economy to superior ‘macrostructural’ objectives – by guidelines on technical and economical efficiency standards, by criteria for best sites, by minimum wages and other ‘social standards’, by regulating currency-exchange, by standardized interest rates, tax rates, and aid rates, by structural funds, regional funds, and cohesion funds, by an European financial compensation and forms of collective responsibility for sovereign debt,” summaries Prof. Dr. Alfred Schüller (the tools of the one size-fits-all policy in the ORDO1 yearbook). Bureaucrats in Bruxelles are seizing responsib
ility for judging and deciding what should be the measure of all things for the different European nationalities. Entire Europe is about to be levelled and “normalized.” Even fruits and vegetables should orient themselves on standards cogitated by highly paid bureaucrats in Bruxelles.2

  It is foreseeable: European variety will be the casualty. Laws, rules of action, and other guidelines predetermined by Bruxelles will increasingly limit the scopes of the citizens. They establish obstacles and disincentives to entrepreneurial behavior. In doing so the centralistic oriented Bruxelles is destroying livelihoods on a large scale. It can only weaken the economic power of the continent.

  Only Europe’s bureaucracy and political elites will be the beneficiaries of the ‘United States of Europe’ including a central government in Bruxelles. To err is human. Governments make mistakes. The more power they have and the more far-reaching their decisions are, the more far-reaching are the consequences of their mistakes. Prof. Dr. Erich Weede, professor emeritus of the University of Bonn, points out this aspect. The entire European continent has to suffer from mistakes the central power in Bruxelles makes. For this reason we should resist any further centralization of power in Bruxelles. There is a great danger that the centralized power in Bruxelles will develop the same way as the central government in Washington and that Europe also degenerates into a plutocracy.

  Already in 1970s with the “Snake in the tunnel” and the “European Monetary System” (EMS) some European states tried to coordinate their currencies and monetary policy. Already at that time the currency-exchange rates could not be stabilized within the exchange rate mechanism in the desired way. The economic performance of the countries and their political orientation were too different. The failure of these experiments was not surprising. It would have been enough to take a look into history. “Seen from a historical perspective, politically stabilized currency-exchange rates have rarely been of long lasting nature,” writes Werner Plumpe, professor of economic and social history at the Goethe University of Frankfurt am Main.3

  Nevertheless, Europe’s political elites decided to introduce the common currency euro as book money on January 1,1999, and as cash money on January 1, 2002 – from today’s perspective the first decisive step on the way towards a centralized European central state. The majority of Germans, who would have preferred to keep the D-Mark, were sceptical. They were afraid the common currency would not be as stable as the D-Mark, although the D-Mark since it’s introduction in 1948 already had lost some 90 per cent of its purchasing power. On February 7, 1992, the “Treaty on European Union” (Maastricht Treaty) was signed into law. It determined the “convergence criteria” (Maastricht criteria)4 that were bound to commit all members of the eurozone to a track of stability. However, no mechanism was created to sanction violations of the agreements without any ifs and buts. The wool was pulled over the eyes of the citizens.

  “Maximum limits both for the annually new indebtedness and the debt level of public households have been agreed on. Should they be exceeded the union mandatorily can recommend reductions and, under circumstances, enforce them with fines. This ensures a sound fiscal policy also after the entry into the currency union.“ So they said in the brochure, “The euro – as strong as the mark,” which was published by the Federal Ministry of Finance in April 1996. “Also after the onset of the currency union care is taken to ensure that no member will leave the path of virtue and stability.“ Today, many paragraphs of this brochure sound like derision: “Regarding the convergence criteria the treaty must be strictly observed; a maceration will not occur.“

  The contract was breached – also by the German red-green federal government. Likewise, the purchase of government bonds by the European Central Bank (ECB) in the spring of 2010 was clearly a breach of law. In this context, one notion George Soros expressed in the Financial Times on Juliy 13, 2011, is interesting. The architects of the euro “laboured under the misconception that financial markets can correct their own excesses, so the rules were designed to rein in only public-sector excesses. Even there, they relied too heavily on self-policing by sovereign states.“

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  1 Siehe ‚Das fatale Einheitsdenken in der EU. Lehren aus Selbsttäuschungen und Fehlschlägen’, Jahrbuch ORDO, Band 62, 2011. Prof. Dr. Alfred Schüller war bis zur Emeritierung in 2005 Lehrstuhlinhaber und Geschäftsführender Direktor der Forschungsstelle zum Vergleich wirtschaftlicher Lenkungssysteme an der Philipps-Universität Marburg.

  2 Legendär ist die Verordnung (EWG) Nr. 1677/88 (Gurkenverordnung), nach der die Krümmung bei Gurken der Handelsklasse ‚Extra’ auf 10 cm Länge 10 mm nicht überschreiten durfte. Sie wurde 2009 wieder außer Kraft gesetzt.

  3 Werner Plumpe, Wirtschaftskrisen – Geschichte und Gegenwart, Seite 103f.

  4 Die jährliche Defizitquote (Haushaltsdefizit in Relation zum Bruttoinlandsprodukt / BIP) der einzelnen Mitgliedsstaaten der Eurozone sollte 3 % nicht übersteigen. Die Schuldenstandsquote (die zusammengefassten Staatsschulden in Relation zum BIP) der Länder sollte maximal 60 % erreichen.

  Maruschzik: The end of the European national states

  With the Stability Pact the eurozone takes the second decisive step towards a centralized European unity state. Again, the future of the European economy builds on promises. Like the federal government of Helmut Kohl, the government of Angela Merkel counts on an obviously illusory hope that the stability policy about which the heads of the governments agreed will prevail in the countries of the eurozone in the long run. But this time the European establishment goes the whole hog: With the “European Stability Mechanism” (ESM) the countries of the eurozone shall irrevocably abandon a great deal of their fiscal sovereignty to Bruxelles. “The ESM Treaty is a mockery and derision as far as sanity and reason but also as far as European juridical traditions are concerned. With this ESM Treaty, a small group of governments revolt against their own people,” says Rolf von Hohenhau, president of the Taxpayers Association of Europe.1

  “The Greek economic infrastructure in no way is comparable with ours, and the interlacing of the Greek foreign trade with trade flows in the eurozone is very narrow.“ No, this is not a quote by a euro castigator but by Eurogroup chaiman Jean-Claude Juncker. And he said this at the end of February 2012.2 Are the economic infrastructures of the other European countries comparable with each other? Why do we have to try to make them comparable by hook or by crook or by force?

  Additionally, Juncker claims to appoint a “EU commissioner charged with the task of building up the structure of the Greek economy” and to “think and think ahead” Greece’s economic policy. In other words, a bureaucrat from Bruxelles shall replace the individual and entrepreneurial initiatives of the Greeks. What will happen to the other countries of Southern Europe should their citizens vote out the “stability policy” of their current governments in future elections? Will EU commissioners take over the economic policy of all those countries? Even against the citizens will? Former ECB president Jean-Claude Trichet makes no secret of his thoughts: In extreme cases the EU countries shall declare countries bankrupt and take over their fiscal policy.

  No doubt where the journey goes. Among others, José Manuel Barroso as president of the EU commission, France’s new president Francois Hollande, Italy’s prime minister Mario Monti or monetary affairs commissioner Olli Rehn call for merging the debts of the separate governments of the eurozone through Eurobonds. In the eyes of France’s new prime minister, Jean-Marc Ayrault, the ECB shall finance the crisis-hit countries directly, thus to unite Europe’s finance in one policy.

  A paradigm shift is taking place. The self-responsibility–the sovereignty–of the European countries is being abolished step by step. “European countries will become like once independent American states, subservient to central power that rules from afar,” Paul Craig Roberts writes. Key representatives of this central power are not elected directly by the peoples of the EU. For example the president of the EU commision is nominated by the European Council and is el
ected by the European Parliament for five years.

  In particular, for Germany the scheme is likely to backfire: The German economic policy will be increasingly determined through Bruxelles and determined more and more by the fiscally more clueless mentality of the southern countries. As by far the strongest economic power of Europe Germany will have to pay for an experiment that is condemned to failure.

  Right from the beginning, the euro was a political currency3 lacking an economic base. A number of economists had warned: Given such a different performance of the economies of the participating countries, a common currency can’t possibly work. Their warnings remained unheard.

  Obviously, the political elites do not want to acknowledge the destructive power that resides inside the euro. Even proponents of the euro are inadvertently delivering arguments against the common currency. According to the study, “The Future of the Euro,” compiled by McKinsey Germany, the euro accelerates the destruction of labor-intensive industries such as shipbuilding that traditionally are located in the peripheral countries of the eurozone. “The euro introduced a hard currency to all countries and emphasised the need for wage restraints to restore competitiveness in these industries. Consequently, the euro caused an imminent need for structural change towards new industries that are less focused on cost to avoid price competition with emerging low-cost countries.“4 What industries can these be in the age of globalism and the increasing competitive pressure from emerging countries?