Monday, May 14, 2012

A 21st century heresy: the ECB is not infallible

As a pious child, I was terrified of mortal sins. Every Monday morning, a giant schoolteacher enquired whether we had gone to church the previous day. If anyone admitted a failure to attend mass, our sadistic educator would conjure up images of a soul being blackened. Hell beckoned.

There is a new commandment that must be obeyed: thou shalt not criticise the European Central Bank.

Over the coming week, a group of left-wing activists plan to occupy and blockade – or blockupy - the ECB’s headquarters. Their intentions are that the protest will be peaceful; organisers have stated that the police are public servants and should not be considered as the enemy. In one of the worst affronts to civil liberties we have seen in Western Europe during recent times, the Frankfurt authorities have nonetheless banned the protest. Blockupy is verboten.

Within a few years of those Monday morning guilt trips, I was questioning the Catholic hierarchy’s teaching. I came to the conclusion that an institution which considered consensual sodomy as more troubling than child poverty had strayed far beyond the core tenets of Christianity (love, justice, tolerance, compassion). When one of the priests who taught me religious studies was convicted – a few decades later - of raping young boys, I didn’t feel vindicated. I felt ill.

Sackcloth and ashes

The ECB is in a similar, if not identical, position to that of the Catholic hierarchy during my childhood. Like a long list of popes, the bankers of Frankfurt regard themselves as infallible. We must take their medicine, even if it has unfortunate side effects. Nations who refuse to gulp it down are called “deficit sinners”. In an intriguing twist on the concept of sackcloth and ashes, they have been threatened with having their flags flown at half mast.

It is time to ask awkward questions.

What is sinful about spending on education (hopefully a more enlightened version of the one I received)? What is sinful about equipping hospitals? What is wrong with having a public transport system? Or post offices? Or libraries?

Why must these vital services be savaged on the orders of a bunch of suits?

If the men and women of Blockupy ask these questions, then they can count on my support. In the spirit of Christianity, I will even forgive the person who came up with the terrible name Blockupy.

What type of growth?

Perhaps the questions should go further.

Mario Draghi, the ECB’s president, called recently for a “growth compact”. This call was welcomed by some left-leaning political figures and, inevitably, became a talking point in France’s presidential election campaign.

But what kind of growth does Draghi want? On 3 May, he detailed the key ingredients in his recipe. One of the first to be sprinkled into his mix would be labour market reforms, of the kind designed to increase “flexibility”. Translated into lay person’s terms, that means Draghi wants to allow employers pay peanuts and to be able to fire their workers with ease.

Draghi insisted that there is “absolutely no contradiction between a growth compact and a fiscal compact”. I assume he was referring here to the EU’s latest treaty, which will force sub-standard public services on many generations if it enters into force. Draghi thinks that requiring hospitals to limp by without medicines or equipment is a good idea. Instead of saying that explicitly, he used the fancy term “fiscal consolidation”. Like many jargon addicts, he might have hoped his choice of words would prevent his real agenda from being discovered. But he gave the game away when he said “it is certainly much better to consolidate through the reduction of expenditure rather than through increases in taxes.”

It is telling that Draghi didn’t feel any inclination to elaborate on that point. He was merely reciting another commandment that we must obey: thou shalt not tax the rich.

The need for economic growth is something that seems to unite politicians, regardless of whether they are far-left, far-right or middle of the road. But if economic growth relies on the ingredients favoured by Mario Draghi, then I don’t want it.

Bold questions needed

Earlier this month, I attended a conference titled “EU in Crisis”. It featured the “progressive” economist Trevor Evans, who did a fine job explaining why Draghi’s and Angela Merkel’s prescriptions are ruinous. Yet when Evans was asked if the idea of growth needed to be rethought , he accepted that this is a crucial question but signalled that it was not the right time to ask it.

I respectfully disagree.

Draghi and his old mates in Goldman Sachs are using the economic crisis to force through measures that they would not get away with under different circumstances. Nothing seems to be off limits to them. Elected governments should be vassals of anonymous bankers, according to their blueprint.

If they are not afraid to take bold steps, we should not be afraid to ask bold questions. The notion that gross domestic product must constantly grow is a dangerous one. To achieve growth, governments and industries depend on the relentless exploitation of labour and resources. The pursuit of growth at all costs is a major contributor to climate change and biodiversity loss. These issues are not separate from the economic crisis; they result from the same tunnel vision.

Catholic publications are still censored by the Vatican. Frankfurt bans protests against the ECB.

We should defy the gagging orders. Some sins must be committed.

●First published by New Europe, 13-19 May 2012.

1 comment:

  1. Indeed. What did Diderot say about all-powerful, unquestionable Priesthoods? Nothing nice. In recent years the religious type has declined, but we have had had the theologians of nuclear weapons, the National Security elite in the U.S., and now the economic "Technocrats" of Frankfurt. Each operates in secrecy, outside of democratic debate, and with tremendous power. And they, as one would expect in such circumstances, abuse that power and, what is more, exercise it incompetently. They must all be replaced with transparency and democracy. Until then we will continue to have a great deal of unnecessary troubles.