Good riddance, Sarkozy!

"La France forte" or "Strong France"
was Sarkozy's campaign slogan.

NEW YORK CITY
In one of the most memorable lines of his presidency, Nicolas Sarkozy threw at a French citizen who dared refuse to shake his hand, "Get lost, asshole!" ("Casse-toi, pauvre con!" in the original French- Watch the YouTube video) At this week's second round of the presidential election, the French people returned the compliment sending Sarko packing.

Two years ago, in a blog called "Sarkozy: La France c'est moi" I alerted my countrymen to the dangers of the presidency of the authoritarian and egomaniac bullshitter who tricked us into trusting him with the nation's top job. It took five years but finally the French people saw through him and gave him what Churchill once called, when he was on the receiving end of it, "the order of the boot." And rightly so.

This is of course, only Part 1 of the Sarkozy defenestration. Part 2 should be to prosecute him for the various abuses in power (some of which I mentioned in the same blog) and convict him. Hopefully this time we'll have a convicted French president who will serve his sentence, unlike Chirac (see my blog, "Real crime, fake justice") Then we could say that we have made a qualitative jump on the democratic scale by ensuring that justice is meted out to ALL citizens regardless of social status. We would thus show the way to other Western countries to send Blair, Bush & Co to jail for the crimes they have committed and for which they enjoy a scandalous full impunity.

I have seen press reports about how François Hollande "won" the election. That is simply untrue. Sarkozy lost it. Just look at the figures, less than 2% separated each candidate from victory, hardly the mark of a landslide. And yet, considering Sarkozy's disastrous record and abysmal approval ratings, Hollande should have won by a handsome 60% at least. But are we surprised at the poor showing by the Socialist candidate?

Not really. After all, he was not the first candidate for his party's nomination; that was Dominique Strauss-Kahn who was disqualified after that little incident at the Sofitel hotel in this city last year. Hollande was not even the second choice, that was party chief Martine Aubry who dithered so long about running that she finally lost to him. Many Socialist Party activists even toyed with the idea of letting Hollande's former partner, Ségolène Royal, have a second try at the presidency, but thank God they thought better of it at the last moment (I used to think that  the US with George W. Bush and Sarah Palin had a monopoly on idiots running for the presidency, but obviously in France we also have our share.) Unlike Barack Obama who fought tooth and nail to get the job (what he did with it is another issue and will be the subject of a blog come November), François Hollande was just lucky to be the least bad man at the right place at the right moment.

"Sarkozy, Outgoing President!"

So François Hollande won by default. Will he be up to the task? Will he finally solve the crippling debt crisis we have been suffering from for the past several years now? Well, considering that in his thirty years as a party apparatchik, lowly MP or local politician in a sleepy rural town he never displayed any conviction, vision or signed any remarkable policies, that would be quite a miracle. A couple of months ago, I caught him campaigning on a bright Sunday morning in a market close to my Paris home, at the Bastille. Since the debt crisis is the direct result of banking misbehavior, I put the question to him:

"Monsieur Hollande, are you going to nationalize the banks?"

"At any rate, we will reform them," he replied.

"Is that a promise?" I asked grabbing his arm. With Bertrand Delanoë, the mayor of Paris smiling that phoney smile of his just behind him, the then-candidate-now-president nodded his head reiterating that policy decision before leaning forward to kiss a kid and shake hands with well-wishers.

In case you don't believe me, here are the videos I made (they are of course in French, I appear at the end of the first video, and in the second you can hear my voice asking the question at 00:40 followed by Hollande's answer.)

So Hollande is on record promising bank reform and to get us out of the debt mess these banks brought us in. After the wasted twelve years with Chirac and five Sarkozy years, it would be great to finally have a president who can deliver.

Unfortunately, considering his record, my advice to you is not to hold your breath. We are used in France (and other Western pseudo-democracies) to being betrayed by our political class. As we say, Plus ça change...

Why Wall Street and the City are beyond salvation

What about "Save the People?
After all, financiers have only
themselves to blame for the
crisis they inflicted on themselves
and the rest of the world

RIO DE JANEIRO
I have been a keen reader of The Economist for a good quarter-century. I have always loved their writing style and irreverent humor, even the rigor it often brings to its analyses. I am less keen when it unashamedly behaves as the mouthpiece of big business and banking giants, as it does in this week's cover story and leader whose title is the self-explanatory "Save the City."

In one of its headers  The Economist  wonders why  “Strangely, California doesn’t talk down Silicon Valley”. Why would it? Silicon Valley companies produce computers and software that consumers and companies (often) love and use. What have the City and Wall Street offered ?(And how come The Economist doesn’t ask itself why “Not Strangely, the United States DOES talk down Wall Street”?) 

The Economist claims that financial markets “funnel savings to their best use”. Oh, really? How can the subprimes be considered as best use? How can the real estate bubble be considered best use? How can the various pyramid schemes be considered best use? How can the taxpayer-bailouts be considered best use? How can the encouragement to governments to spend beyond their means and create the problems we are seeing now be considered best use? How can helping Greece to cook its books (as Goldman Sachs did) be considered best use? How can ruining millions and sending many more into unemployment while the pigs gorge themselves at the trough be considered best use?

Whichever way you look at it, financiers are parasites, living off the body they attack and sucking it dry until they move somewhere else. It is time we get rid of them. If the management of money is so critical to society, like defense, justice and the rule of law, then just as we do with these areas let’s nationalize/highly regulate it so that finance can truly serve the people and not the other way round.

The argument that Britain should hang on to this industry just because it is a big contributor to GDP is flawed: there are some countries where the mafia and drug cartels create as much wealth. Should we then legalize them? “But these are criminal enterprises,” you might say quite shocked. Well, someone prove to me that financial services companies are less criminal.

“China and India have underdeveloped financial markets; Britain has the expertise,” writes The Economist. If I have any advice to give these emerging economies it is to remain underdeveloped with respect to financial markets. They don’t need to import our current mess a few years down the road, with all those hedge funds and derivatives and CDO's which nobody understands. The reason nobody understands them is the point: the less consumers understand the financial products offered to them, the easier it is for the banks to fleece them. 

As for "Britain’s expertise," the Chinese and Indians would be well advised to say, “thanks, but no thanks.”  I remember when, at the height of the financial crisis in 2008, the governor of the Czech Central Bank was asked how his country escaped the turbulence. He explained that  years back when those risky products appeared, Czech bankers came and asked him whether they should invest in them. "Do you understand what these are made of?" When they replied in the negative, the governor then advised them not to invest in products they didn't have a clue what they were about. And he was damn right as his country's bank sailed through the crisis.

Time to get back to basics and produce real products and real services that people really need.

(The blogger is currently in Brazil whose banking system, in spite of its being more regulated than the U.S. or British banking industry,  has many faults, concentration being one of them. I am also worried at the high amount of credit being freely distributed at Shylock-like interest rates to new, undiscerning consumers.  When the day of reckoning comes, and some bubbles burst, Latin America's largest economy  will be in a lot of pain.)

Sailing away: Time for Britain to leave the European Union

PARIS
I haven't read the British press following last week's milestone decision by European Union (EU) leaders to move towards a more federal system with financial and budgetary convergence between their countries in order to solve the debt-induced crisis, but I wouldn't be surprised to see the following headline: "Europe isolated as Britain votes NO to treaty changes." Once again, and probably more radically than ever, Britain stands alone with 26 countries (using the euro and outside the eurozone) forging ahead on a new pact, and she standing in splendid isolation, the cornerstone of her policy towards Europe for a couple of centuries. Except, of course, that as a middle-sized power Britain cannot afford it any longer

To understand the current situation, just imagine that your friends have recommended you to the neighborhood club and upon joining it you requested a few privileges. First, that you be allowed to bring not only one guest but two. Then, that your dues should be only half of what other members pay. Plus a couple of other such exemptions which, considering how important you are to your friends, they all accepted to get you in. Then, as time goes by, you start making more and more demands, for instance that the club be open longer hours to accommodate your personal schedule; that you be allowed to bring your own caterer as the food served does not please your palate and a couple more requests of the same ilk. At that point, the other members rightly fed up join in unison with a rude expletive, the meaning of which is that everybody would be better off with you outside the club than inside.

This is exactly where Britain and the European Union find themselves now. Facing the admittedly worst crisis the Union has had since its inception 60 years ago, when all bandied together to come up with a solution, Britain said, "If I don't get my own, deal I won't sign to this one." The answer from the rest of the Club was to politely ignore Britain and move ahead with their agreement, anyway.

Are we surprised? Not really. Ever since the European Union was born, Britain had pooh-poohed it, when not tried outright sabotage. First, when it was set up (as the European Community) in the 1950's, Britain refused to join. Then, when it saw how successful the club was, it begged to join and did so in 1973 as a beggar,  rather than a founder, which meant it had to accept less good terms. Throughout the following decades, Britain kept on behaving in a most un-European way: Thatcher asked for a contribution rebate (the famous "I want my money back"); then they got exemptions on social issues; and, more pointedly when the single currency was formed, they refused to join. And last week, they asked for the unacceptable: exemption from financial rules. Considering that the current crisis is the consequence of lax regulations of financial institutions, this demand is completely crazy. Cameron claims that he wants to maintain the preeminent status of the City (London's financial district) which under the new rules might lose out to Frankfurt and Paris. This is a lot of hogwash: since Paris and Frankfurt will be subjected to the same rules as London, then we are talking about a level playing field. If London loses, then it means it wasn't competitive to start with, something the Tories, super-champion of competition should accept - but as we know they only accept competition when they are guaranteed to win. Also, last time I checked I thought Europe was operating as part of a single market (which the British always defend.) Now, Let David Cameron explain how we can have a single market without a single set of rules (never mind a single currency.) The truth of the matter is that the Tories are nothing more than the bankers' party and are determined to fight tooth and nail to protect the interest of their (pay)masters, even at a high cost to their own people and the rest of Europe.

With this latest rejection, the British have reached a crossroads. Their position will soon be untenable since at every EU summit, you'll have one set of meetings with 26 members making decisions and then calling the other EU member who will have little choice but accept, especially when it is about decisions where unanimity is no longer the rule. Britain's worst nightmare will become reality: there will be a two-tier Europe, a Tier 1 with all other EU members and a Tier 2 with Britain (unless in their self-delusion the British think that on their own they can be Tier 1, and all the rest Tier 2!) Permanently isolated an outvoted, Britain will find itself having to comply with rules it has had no say in their creation. How long will she put up with it?

I lived in Britain in the 1980s and since then have been a frequent visitor either on business or vacation and can claim to know the country pretty well. And one thing that still has not changed is their island mentality. I still hear many Britons when crossing the Channel saying "We're going to Europe," or "We in the UK do it this way, but in Europe they do it that way." The British have clearly psychologically never felt European. Will they ever?

So it is time the British (or, to be more accurate, the English) made up they mind. They have played obstructionist in Europe for too long, which is fine, if they have such a radically different view from Europe from all other 26 countries. I'm not saying their views are better or worse, right or wrong, but different. Then, David Cameron should do something that the so-called mother of democracies hates to do, ask the British people, in a referendum, what they want: be part and parcel of the European Union, not a mere free-trade area, with all that that implies, or keep their own views, maintain their sovereignty (or what remains of it) and therefore leave and make other arrangements.

These arrangements could entail:

- Negotiating a free-trade or special-partnership pact with the European Union (maybe like what is being offered to Turkey)

- Move closer to the US and Canada (maybe in a North Atlantic free-trade area) since they feel so much in sync with their "cousins" from across the pond

- Decide to focus on what Britain does best (media, culture) and become  a high-value-add export oriented country which will allow it to survive alone outside the European Union.

Of course, there are risks involved. Britain trades more with the EU than any other country or bloc, so a realignment is not easy to achieve. At home, if the UK leaves the EU, it is almost certain that Scotland will split and apply for readmission as an independent nation, which would mean the end of the United Kingdom. The EU will also suffer a bit, as it loses an important economy and important population, but considering it has 500 million people, a 12% loss and corresponding reduction in GDP will not be insurmountable and anyway will be replaced by the arrival of new countries such as Croatia in 2013 and subsequent ones. An EU-less Britain is likely to suffer way more than a Britain-less EU.

Whatever the solution, it is crunch time for the British. Since EU rules do not consider ejection, please do us and yourself a favor and make up your mind, which you seem to have already done, and leave. It is always sad when a marriage comes to an end, but it is always preferable to end it sooner, and on amicable terms, than later and bitterly, especially when the house is on fire.  

DirDem comes to Europe - Time for technology-enabled Democracy 2.0

As luck would have it I arrived in Madrid on June 12,
the very  last day of this two-month-old grassroots
movement occupation of the Puerta del Sol square.
But as the sign says, "we are not going away,
we are moving to your conscience." 

MADRID

While in Madrid on business, I took the opportunity that I was staying downtown to visit the nearby Puerta del Sol camping ground of the Indignados  or "Outraged Citizens." These are the protesters who have taken over the Spanish capital's main square and, just like the Cairenes did in Tahrir Square earlier this year, the Madrilians are making themselves heard, rejecting a political-cum-economic system which has left the youth with a staggering unemployment rate of 45%. Most analysts forecast that it will take Spain a decade to get back to where it was prior to the crisis.

What a far cry from the three years when I lived in Madrid in the mid-1990's when the square, the heart and pulse of the city, was mainly congregated on for festive occasions such as New Year's Eve, to gulp down as many grapes as you could while the clock would chime the twelve strokes of midnight. The clock is attached to the building which houses the Madrid regional government whose president,  Esperanza Aguirre, clearly irritated at these noisy neighbors, said on TV, " If people aren't happy with the current political parties, they should constitute themselves into a new party and run for office at the next election." Sounds reasonable except that Ms. Aguirre, who belongs to the Conservative People's Party, is just not getting it. 

The issue issue is not whether it's party A or B which is in power, or a third party, it's the whole political system which is being challenged by citizens who realize that the old system might have had its use in the past but clearly it is now broke as it can't deliver the goods and therefore needs to be jettisoned. The same message is being broadcast every evening on Bastille Square, down the street from where I live in Paris, by fellow protesters who use the same slogan: "Real Democracy Now."  The financial meltdown and its aftermath of debt-related and construction boom-to-bust crises have brought home the realization that the political system is no longer here to serve the interests of the majority but those of a well-off minority (the bankers who creates the mess and demanded that average taxpayers bail them out) and a privileged group of self-serving politicians. (You can read a post I wrote a few months ago on what the debt crisis really means.)

A placard held by a woman protester in the Puerta del Sol encapsulates people's outrage: Crisis? Robos! (Crisis? Theft!) it loudly claims. How come that jails are full of people whose crime is "just" to have pushed or consumed drugs when those who are responsible for sending millions into unemployment, emptying the retirement nest eggs of millions more and almost destroyed the livelihood of entire countries, how come that those bankers and their regulators are still allowed to walk around free? How come that while millions are still hurting, losing their homes and seeing their living standards plummet, that banks are reaping billions in profits and awarding their executives indecently fat bonuses? How come that the political class, supposedly voted into office by citizens to represent them, perpetuates itself in power and does nothing to alleviate the majority's suffering while clinging to its privileges and that of its sponsors, mainly in the financial industry? 

How else can you explain that billions of dollars' in taxpayers' money were handed over to the banks when they made losses, but their profits are still being kept by the few? Citizens' sense of outrage with the public losses/private profits arrangement is understandable. It reminds me of the pre-revolutionary situation in France when over 95% of the wealth was in the hands of less than 5% of the population (the aristocracy and the clergy) and yet they were exempt from paying taxes, a "privilege" reserved to the poor. Small wonder that when the economic crisis became more acute people rose up and overthrew the old political system. Small wonder that two hundred years on, their descendants are going back to where it all began in July 1789 and protesting at a similar situation: privileges for the few and hardships for the many.

The reason the political system has become so dysfunctional is that it is based on representative democracy (or RepDem, for short) invented in the 18th century. While there is little doubt that it has served the West well for two centuries, it is no longer fit for the 21st century.  Much of the gridlock in the US political system can be ascribed  to the Americans' absurd adherence to the principles edicted in the Constitution by aristocratic gentlemen farmers wearing breeches and wigs. Direct Democracy (DirDem for short) was not practical when England, France, and even more so the United States, were large countries with big populations scattered all over the land. How could you summon all of your country's voters in your capital to vote on a  policy or a leader? So we had to settle for a proxy: smaller and more manageable constituencies would vote for a congressman/Member of Parliament/deputy and send him (then there was no "her") to the capital (Washington, London, Paris) to represent our interests. Except that two centuries on, as the current crisis shows all too clearly, that "representative" represents other interests and when those conflict with the voters' it is clear to all whose interests prevail.

Look at Obama, about to become a brilliant failure. He is a politician who came to power through a grass-roots movement. On Inauguration Day he announced (and signed) the closing of Guantanamo Bay camp, a blot on America's conscience, where hundreds of men have been kept in jail for a decade without any due process of law, no trial, let alone any conviction, a complete violation of the lofty principles those bewigged 18th-century gentlemen bequeathed to the nation. Also, Obama supporters expected tougher regulation and sanctions on those who, through their greed, fraud and incompetence, provoked the crisis. On the foreign-policy front, Obama promised a new dawn for the Middle East by promoting democracy and putting pressure on Israel to pull out from occupied Palestinian lands.

And what did we get? Zilch. Guantanamo is still shamefully open for its ghastly business; the Middle East peace process has resulted in neither peace nor a meaningful process, Obama caves in to the pro-Israeli lobby; Bahrain has instituted a reign of terror against its Shiite majority to America's silent acquiescence; and as for bringing the bankers to account for their (mis)deeds and reforming the system that produced the crisis from which the US is still reeling, two words summarize the situation: full impunity. In case you think I am exaggerating just read this report on the financial crisis by nobody else than the U.S. Senate or the one published by Stanford University. Both show unequivocally that the financial crisis was largely criminal and yet  none of the perpetrators has been made to pay for their crimes. Could it be that after the "military-industrial complex" of Eisenhower's days we have now entered the age of the "political-financial complex"?

Today outrage spread to the cradle of Western democracy with thousands of Greeks battling police in Athens while protesting against those who put them in that situation: the rent-seeking and maximizing elite. The Socialist Prime Minister George Papandreou's offer to form a national unity government with the Conservative opposition is not going to change much since it is exactly the same situation I alluded to earlier: Party A or Party B will not change anything. They have both been in power and turned a blind eye, when they didn't actively encourage, the behavior that led to the current mayhem. In Barcelona, Spain's second city, what Gore Vidal would call the ruling class has resorted to tactics which we associate more with the Arab dictatorships in Libya and Syria than a  Western pseudo-democracy: planting plainclothes police as violent elements in an otherwise peaceful demonstration of the Outraged Citizens, in order to sabotage and delegitimize the movement. You can watch the video on YouTube (comments in Catalan.)

So, enough of describing the disease which we are all aware of. What can be done? The RepDem political system has shown its limitations and is increasingly losing its legitimacy as people lose faith in it. Citizens are no longer willing to elect a politician and then give them carte blanche for four or five years since that will just entrench them and their moneyed sponsors. What is needed is to move to a DirDem system.

If, as I said earlier, in the 18th century it already was not feasible to gather all voters in one place, in the 21st century it is even less so. But is it?  Maybe physically, but what about virtually? Technology, which has become so pervasive through every nook and cranny of society, can help bring people together in ways unthought of before ― in many countries now you can fill your income-tax return, and pay your taxes, online. If internet is good enough for my taxes, why can't it be used to get my opinion as a citizen and my vote? Why can't I vote directly on proposed laws? a privilege hitherto reserved for an elite that has done such a dreadful job of it. Any citizen should be able to suggest an initiative or law through a Facebook-like tool where its pros and cons could be discussed by the electorate at large (your user name would be your unique national identifier such as Social Security number, with maybe some biometric identification to prevent voters from selling their votes.) Such discussion of the proposed laws through comments would enlighten and enrich the political process and at the end of this debating process (akin to a political campaign) all interested voters could cast their vote online and, if a majority supports the initiative it becomes law. No more need for parliament or congress, half of which (the upper chambers) were completely useless anyway as they just served to provide cushy jobs for the well-heeled (case of the Senates in many countries such as France and Spain; in the case of the British House of Lords it is just indefensible that almost 100 members of this body are there just because they inherited the seat from some distant ancestor.) As for the other half (for example, the Chamber of Deputies in France) they often tend to just rubber-stamp whatever decisions the executive branch has decided on.

With technology we can get rid of the political middleman who served only his interests or powerful interest groups and lobbies, rarely the average citizen. This disintermediation process which has radically changed many businesses (brick-and-mortal travel agencies and  bookstores are on their way out as people buy directly from producers such as publishers and airlines) can be applied to politics as well. With the legislative branch technologized out of existence and the people finally regaining what has been until now a nominal sovereignty, we can shift our attention to another class of politicians: those in the executive branch of government, whose function will be maintained since somebody will have to implement laws and administer policies.

Bringing executive-branch politicians to heel is even more important since elected parliaments have anyway always be supine and deferring to the unelected administration of the day. One typical example in this pseudo-democracy that France is  can be seen through the use of décrets d'application whereby a law, although voted on by the people's "representatives," cannot be enforced until the government has decreed so. As an HR person I have always been shocked that the law voted on by the elected French Parliament in 2006 on anonymous CV's is still not enforceable (and therefore not adopted by companies) because the unelected government has yet to give it its stamp of approval And you call this a democracy?

The same technology used to bypass lawmakers can be used to keep executive-branch politicians and officials in check. For one thing, not only presidents and prime ministers  (I'd call them "Chief Executive") could be elected directly online but also any citizen would be free to run for office (with, of course, some conditions such as the number of certified friends they would have on Facebook to make the process manageable.) Why should politics be reserved to professional politicians? I don't remember who said that "the business of politics should be everybody's business" but they were damn right, and a public social media allows just that. For efficiency reasons, the members of a cabinet or administration would still be chosen by the Chief Executive but confirmed by the people (the way the US Senate confirms ambassadors and other officials) after hopefully vigorous online hearings. This should help weed out incompetence, nepotism and dishonesty, because, and this would be a marked departure with RepDem practice, at any moment citizens would be able to recall any official, starting from the Chief Executive down. That carte blanche given for several years to politicians to do as they please would thus be a thing of the past.

By the same token, every policy (war, taxes, budget etc.) will start with an online discussion and end with a formal vote where citizens sign off on it ― or not! By the way, if you think this is a novel approach, a little historical perspective is in order. In Republican Rome, during Cicero's time, decisions by the Senate were then read out on the Field of Mars to gathered citizens who would then vote them up or down. If it worked for ancient Romans, why can't it work for us int he 21st century?

Debating society's ills in central Madrid.
I was impressed at how peaceful,
well-organized and disciplined
the protesters were

Finally, technology is only an enabler as I have discussed in so many of my posts, articles, presentations and speaking engagements (mainly in the business arena.) There are also other cultural symbolic measures that can be taken to keep politicians and public officials on their toes and remind them that they are supposed to serve the people, and not the other way round. To go back to ancient Rome, when a general was granted a triumph after a big victory, he would parade through Rome in full glory but there was a slave standing next to him and whispering repeatedly in his ear, "Remember you are mortal." Our politicians need a similar type of reminder: You are here to serve the people. 

I have always been flabbergasted by the total lack of accountability of politicians in our pseudo-democracies. When  you give instructions to your cleaning lady, you can pretty much expect her to carry them out as well as show some respect to you. Same thing with your employees at work. Why? For a simple reason: you are the one who have hired them, you are the one describing their duties, paying them a salary and if you are not happy with them you can always fire them. That's why you usually tend to get from them what you need. But not with politicians. You are the one hiring them, because you vote them into office; you give them their job description, by choosing their political program over their adversaries' (I almost wrote partners in crime); you pay their salaries through your taxes; and you can fire them when you vote them out of office. And yet politicians behave as if they were the boss and you the employee, or the servant.

I would therefore suggest some symbolic changes to remind politicians who the real boss is and that the word public servant should mean what it means. One way would be to have direct access to them ―say, one day a week. Every public official from the Chief Executive down to a small-town mayor, should set aside a day a week where any citizen can come and talk to them. Since obviously it would not be feasible to see all citizens, the lucky visitors could be selected on a first-come, first-served basis or, after signing up online, be selected at random. Then, during the meeting, the citizen could ask any question they want, have access to any document (why did you pick this supplier? what was this expense for?)  and film with their smartphone the whole proceedings to be posted then on YouTube for the whole electorate to view, post comments on and, if they feel like it, initiate a recall procedure.

I can already see my detractors shouting down my proposals on the grounds that they would lead to chaos, demagoguery and populism. If you ask people whether they want their taxes raised, you can be sure they would vote it down. Ask them if they want welfare spending to be raised and you can expect them to click yes enthusiastically. How could you then ever be able to balance a budget? True, DirDem could lead to some messy outcome, but then many governments have been running deficits for years (the French government has NOT presented a balanced budget for over 30 years!) DirDem can't be worse. And then, I am pretty sure that most people would rather live with a mess of their own than one imposed on them by self-serving politicians and greedy bankers.

Other critics might point out that in Europe many legislative and executive functions have moved one level up to the European Union institutions. My proposals are even more valid since most people, not less national politicians (who see the mote in somebody else's eye) have always decried "Europe's" democratic deficit. For issues that are a country's responsibilities (for instance taxes or labor relations) only national voters would participate in the Facebook-like voting system. For issues that are dealt with at European level (including the appointment of European commissioners) all European voters would participate. And as for the European Parliament it will join the national ones in the graveyard of history.

This is the longest blog post I have ever written, and I doubt I will soon be able to match its length. But then the stakes described here are higher than any other I have tackled in my one-year-old blog. My sincerest hope is that it would generate a lot of positive debate to fix what has become an untenable system. I still have confidence in my fellow humans and believe that many of my ideas make sense and, if implemented, could solve many of the current issues in our 21st-century polity.

What do you think?

Shakespeare and the debt crisis

PARIS
In Shakespeare's most famous play, Hamlet, one of  the characters, Laertes, is about to embark for Paris and receives from his father some wise advice:

Neither a borrower nor a lender be,
For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry.   

Hamlet, Act I, Sc. 3, 75-77.

Had our rulers heeded this sound advice proffered by the Bard half a millennium ago we would have been spared the disastrous budget crisis which many countries are suffering from. So many pixels have bounced on our screens on this topic that I feel I must bring my  own contribution to the debate.

There's something wrong when people's livelihood is directly decided upon by the financial markets' diktats: cut people's wages and pensions so that you can repay us, bankers and bondholders tell our governments who fall over themselves to accommodate their (and our) true masters. Aren't these modern-day Shylocks (another Shakespearean reference) fat enough? or are they so greedy that they won't stop until they have sucked us dry?

If the weight of debt has become so intolerable that governments can't pay their loans back, well, then don't. I can hear some of my detractors shriek that debts are sacred and should be honored. This is disingenuous and pure hogwash (if hogwash can ever be considered as pure.) Every day companies and people go bankrupt and their creditors don't get paid, why should government be different? After all, the interest rates charged by bondholders reflect the risk they may not be paid: a country deemed solvent (such as Germany) can borrow at a low interest rate, a very risky one such as the PIGS (Portugal, Ireland, Greece and Spain) have to pay much higher rates because they are deemed a riskier investment. So, investors have already been largely repaid by the bigger amounts they extract from governments. Isn't that enough? If I decide to invest in a bakery and customers don't show up, I lose my investment, right? Will anybody come and rescue me? Certainly not the government. That's the purest expression of the market, and I have no problem with that. Why then should bankers and bondholders, who are much wealthier than I, be spared this basic tenet of capitalism? They made a bad investment and should suffer the consequences remembering Shakespeare's words: "loan oft loses itself."

Of course, the consequence for governments is that after they default they will be unable to borrow money in the future. Well, that doesn't strike me as a bad thing at all. After all, wasn't the crisis precipitated by borrowing in the first place? I would argue that we should remove the cause of the problem, and the problem will be solved. As any household knows it's never a good idea to borrow, at least for a long period of time. Sure, when you face an emergency (an unexpected health bill, or a house renovation or student fees for your children) I can understand that you should borrow on an exceptional basis and pay back as soon as you can. But keep on borrowing and pay your debt through even more borrowing and we all know how it will end: in tears. "Never a borrower be," said the man from Stratford.

Now, in my first paragraphs I've been very critical of the financial markets, especially bankers and bondholders, and their responsibility in the current crisis. But intellectual honesty dictates that a big mitigating factor be acknowledged: they have not forced governments to borrow. Criticizing bankers for being leeches and greedy is like badmouthing Dracula for hanging around the blood bank. What else do you expect? But the point is that they haven't held a gun to government's head in order to force them to borrow. Governments have willingly thrown themselves into this vicious cycle which, like its private-consumer variety, is now ending in tears.

Why do governments borrow? If for exceptional reasons, such as a war, a natural disaster, or economic crisis such as a recession, that would be fine. But look at France, a country that has been blessed with no natural disaster in living memory, nor a war for 60 years, and just a few mild recessions. Why then has the French government been unable to balance the books for over 30 years? Yes, you've read right: the French government has been spending more than it's earned since the 1970's, and tears time has come: wage freezes, longer retirement date, cuts in valuable public services such as education, health (I still cannot understand why we are spending €60 billion in defense with no threat from any of our neighbors.) Look around you and most other governments in Europe are in a similar situation (at least, Germany had to pay for the huge one-off cost of Reunification; what has the French government to show for its big debt?)

They say that one should not waste a good crisis. Let's hope that our rulers finally heed the great Will's words that "borrowing dulls the edge of husbandry" and enforce a very simple and common-sense principle: if you cannot have the means of your ambitions, then have the ambitions of your means. If this precept is good for my family, it should be good for the government.  

When "My Big Fat Greek Wedding" becomes a Greek tragedy

PARIS
So now it's all about wicked speculators trying to destroy a small and virtuous country. At least that's the message that Greek Prime Minister Papandreou has been hammering these last days in his mini-world tour aiming at finding a solution to his country's financial travails. Excuse me, but there's nothing illegal about speculating, otherwise said speculators would already be in jail. Speculators stand to lose their shirts in their high-risk operations and, yes, this is how it works in a capitalist system: they also stand to make big bucks. But they only do so in exceptional circumstances such as a war or a particularly badly managed economy which is the case with Greece. After all, Greece does have a high budget deficit (12% and counting) and speculators had nothing to do with it. It's irresponsible Greek governments who, also adding accounting fraud to such skills, have driven the country to such dire straits. (By the way did you know that for the most part of the past 60 years the Hellenes have been run by either a Papandreou or a Constantinis? difficult to shirk your responsibilities then.)

Of course, both Merkel and Sarkozy professed they wouldn't let Greece down but at the same time the Germans have ruled out any bailout and sensibly so: why should a Teutonic taxpayer subsidize a Greek's pension or holidays? As for Sarkozy, his gesticulations are on a par with his usual behavior: they are aimed at self-aggrandizement ("Sarko the savior of the Eurozone") but also self-interest. He knows that sooner or later France will be in a similar situation: after all no French government has presented a balanced budget in the past 30 years - quite a feat. Even Germany after the colossal deficit induced by Reunification's costs (at least they had something to show for their deficit) managed to balance the books for a while, and Spain for several years in the 2000's ran a budget surplus. Sure their economy was prospering (not the case now) but the French government NEVER presents a balanced budget whether in lean or in fat years.

When will our leaders learn this simple truth: just like responsible family heads, no one can live beyond their means for ever. The day of reckoning is coming, has already come for some.

(This picture of the author was taken in the Greek islands in happier economic times)