Monday, 14 November 2011


The Goldman-Sachs connection with Italian and Greek Eurocrats IS front page news in a number of European print and electronic media. While there is no doubt about M. Monti and M. Draghi, the same does not hold true for Lucas Papademos who was actually a senior economist for both ECB and the FED, before he became ECB vice-chair. But is the problem with the EU economy Eurocrats and Goldman, or is it structural?
At the core of this Goldman Sachs story that the EU media is pushing is the simple fact that Europeans continue to see the US as the culprit behind the global recession that started with Lehman Brothers and continues. This is justified to some degree. Moreover, instead of engaging in self-criticism, they prefer to blame the US for the current Eurocrat trend, just as they blamed the US for the global recession in 2008, without acknowledging that their problems were just as serious, if not more so and interconnected with those of the US.

Many EU politicians and analysts remain tied down by iron-link chains to nationalism and Eurocentrism that either they refuse to see the larger picture or they place less emphasis on it. After all, it is cheap populism to blame the other rather than fixing your own problem. The larger picture is to see the world economy as a single integrated unit in which monetary and trade blocs operate, and within those nation-states exist within constrictive conditions imposed from external mechanisms. To the degree that economic structure and social order limits national autonomy and sovereignty, that is a reality of how finance capitalism amasses power at the few core nations while those in the periphery are necessarily weaker and thus surrender their sovereignty to a large degree.

It is true that critics from the right and the left of the political spectrum are correct to see Goldman Sachs as the symbol of decadent capitalism operating under cover of the US government. Goldman Sachs, however, is not out to undermine the EU, for it also has its tentacles deep inside the US government. If it were not Goldman it would be JPM, or some other financial institution. For that matter, is Deutsche Bank, EU's symbol of finance capitalism's decadence, any different than Goldman, given the massive scandals in which the German bank has been involved? 
Is it not true that the EU leadership as well as the European Central Bank and major banks knew that governments were providing false figure of their balance of payments and debt, not just for Greece, but for most governments? The only thing that Goldman Sachs did is to enter the picture - for a hefty fee of course - to make it all appear legal through SWAPS (derivatives), until the EU demanded an end to it, until it was too late.

Why the massive hypocrisy on the part of the EU media with regard to 'bad US financial institutions controlling EU's fate through Eurocrats' versus the great financial institutions that Europe has? What is the difference that Eurocrats are in charge of carrying out policy, given that the political class is breaking down and the parliamentary system undermined by finance capitalism and questioned by most people? 

Would the economy and society be any different if in the place of Eurocrats we had bourgeois elected politicians? Was Berlusconi, the ultimate in decadent billionaire politician, so wonderful that Italy will do worse with Monti, or anyone at all in charge? Is the political class in charge anyway, or is it simply carrying out orders by the financial elites? And are things that much better in the US or Japan that does not have the burden of Eurocrats?

Is all of the noise about Goldman Sachs taking place in the British, Italian and French press because the three houses (Moody's, Standard and Poor's and Fitch)  that dish out ratings for government bonds are all in the US? What of it? Would things be any different if they were located in Japan, Germany or France that is now under fire and on the verge of following in Italy's footsteps? Are some analysts concerned that technocrats tied to Goldman represents the hegemony of the US and the lessening of national sovereignty, while others see this affair as people surrendering their political rights to unelected officials who do the bidding of large transnational institutions like IMF and European Central Bank, both guardians of finance capital?

To a certain degree, the EU media blame of the US as the culprit behind the economic contraction and related  public debt problems stems from the fact that the US has been pressuring EU to move fast on fixing its problems that are causing global instability. Another factor is that the US is moving aggressively to strengthen existing trade blocs and create news one in the Asia Pacific zone (US, Latin America, and Asia), while it calls on the rest of the world to deregulate and remove obstacles to trade and movement of capital across borders. Another issue is that the US remains the center of world finance capitalism on a discredited credit system backed by China and others buying the paper that the US government prints. In short, American exceptionalism in monetary, fiscal, and trade policies angers Europeans as much as it does the Chinese and others around the globe.

People's commitment to nations and political parties blind them to the reality that capital transcends all borders and prevents them from seeing that even Socialist parties that once claimed to pursue social justice now pursue neo-liberalism and globalization in order to strengthen finance capital. That society's biggest criminals are those who deliver social injustice on a massive scale, but do so legally under the protection of the law and they are rewarded in the process, is a structural problem and a manifestation of an unjust social contract driven by an unjust economic system, and not particular to the US or any other country.

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