We had a house full last week, terrible weather, Trouble and Strife sick as can be (grandchild pathogens) and a football game to attend. We won. That was about the only thing that went well.
In the meantime, I've been trying to figure out what in the hell is going on out there whilst the tightening polls in the Presidential race dominate everything over here. I am told, however, that in regard to the matter of the fiscal cliff, there are actually substantive discussions underway with members of both parties that could lead to a solution but not until the full results are known. Which is why Chuck Schumer, fresh from the taking of a new stupid pill, demanded a tax rise for "millionaires and billionaires," (those defined as making more than $200,000 a year--I know, neither can I) as a way to shoot in front of the duck. But given the back and forth over the past six months I consider this to be a positive step...if true.
Meanwhile, in the midst of financial crisis and austerity, the IMF and World Bank held their annual meeting in probably the most expensive venue in the world, Tokyo, and agreed on nothing except that things weren't good out there. The headline news (not big type) involved Europe and centered about the IMF now believing that austerity is not the way to go and Sweden believing that Greece should step out of the Euro and the Eurozone altogether. A polite, "Thank You" was given to the Swedes (who are correct) and discussion centered around how to prevent the same from happening and the German view (at least on the part of the finance guys) that the IMF was full of it.
The IMF is correct of course but they have no real alternative as the prolonging of the status quo or the improvement upon the same will take money, a lot of money, and that comes from only one source; Germany. Not on at this stage. And yet, Greece will probably get a bye for a few months or so and Spain, if politically they can come to Brussels to ask for help, will get all the money the ECB can print; not that this is going to solve anything permanently but because it will prolong the appearance of a union for a bit longer until...well, that's the real question, isn't it?
So I asked a fellow I know who was in Tokyo as an observer that very thing.
"The election."
"What? Our election? What does that have to do with it?"
"No you jerk," ...we have a warm friendship..."the German election."
I thought about it and it made sense. No one is really working for a solution; everything is in a holding pattern. Can it work given the election is almost a year out? I don't know but the theory is a good one. These are not dumb people. I think everyone realizes that with austerity there will be no or slow growth and growth is what is desperately needed. But pilling new debt onto already overtaxed economies is no solution either as surely at a point it will lead to inflation and an exacerbation of the problem through increased carrying costs. The real solution is through a massive effort at debt reduction but that will of necessity involve the public sector institutions and THAT at this time is unacceptable and politically a death wish. It is a high wire act worthy of the Flying Wallendas.
The gang gets together yet again at the end of the week in Brussels so we wait to see what comes out of that. While all of this is going on there is Cyprus, which, in case you missed it is a member of the EU, a member of the Euro Zone and broke. Cyprus is a little Greece: a busted economy, busted banks and not entirely corrupt but close enough to dammit. They want a bail-out and they want it now or they walk--or so they threaten. Sounds like The Mouse that Roared, Part II. Then again, it is the squeakie wheel that gets oiled...every pun intended
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