The idiots and the saprophyte of Europe
Every now and then in this blog we have had to deal with the idiot, that being about whose nefarious prevalence Fruttero & Lucentini had warned us in 1985, and about whose tendency towards specialization Flaiano had warned us way back in 1956, in prefiguring the advent of the "Middle Ages ".of specialists " (but he was just an unknown provincial writer, wasn't he? Yet, in hindsight…).
We have also practiced on prevalence and the topic seems to be coming back into fashion . On the other hand, we last dealt with idiots about a year ago in relation to Brexit , but I think a supplement is needed to substantiate, or rather, resubstantiate, the content of this short but intense live broadcast:
I say: resubstantiate, because we had already dealt with the topic (the alleged "driving" function exercised by Germany on the Eurozone) in a grave way in February 2012, that is, over twelve (12) years ago, in two posts that I suggest you reread ( because "Groundhog Day" is fine, but I think it is in your interest to grow culturally):
1) Reichlin vs everyone, or Germany vs Eurozone ;
2) The locomotive of Europe and the locomotives of Germany
Well. So now read them again, since this morning I wasted half an hour restoring them by reinserting the original graphs and tables (I decided not to fight the battle with the computer scientists at my university: why face an obstacle when you can go around it?). Happy reading.
Have you done it?
No?
Listen: I'm sick of repeating the same things over and over, so when you see a link, that is, a portion of text highlighted in this way , you have to do me the fucking favor of clicking on it and reading, because the Debate is not a text: it is a hypertext, and those who have not understood it will get split ends, bad breath, and every night a Founding Father will appear in a dream to remind them how sweet and decorous it is to die for Maastricht. Is this okay? Now reread those two fucking posts and let's move on.
Well. I know that it was not clear to many that the Debate is hypertextual, but I am happy to have had an opportunity to clarify it calmly, and equally calmly I will illustrate the advantages, which are obvious: not always starting from scratch, and therefore proceeding more forward on the road to knowledge.
Because you see: the fact that a country that has practiced mercantilism, that is, living off exports, that is, living on the demand (spending capacity) of others, that is, taking internal demand away from its trading partners to direct it towards its own goods (weakening the growth of the aforementioned partners), cannot be a "locomotive" of the countries from which it steals demand, from which it sells goods, from which it does not buy goods, it is rather simple to understand (and in fact anyone who doesn't understand this is an idiot, and every now and then this it should be said, out of mere Christian charity, that is, to avoid having illusions ). It cannot be a "locomotive" (it cannot pull the countries whose production it does not support, it seems obvious to me: I am not that much of an idiot!), and consequently it cannot even be a credible imperial power. It is the United States, which in fact are structurally net buyers of other people's goods, rather than net sellers of their own goods, also because this, as explained in countless places, including scientific ones , is the most obvious way to circulate in its area of influence one's own money (exchange it with other people's goods). But we will be able to talk about the financial implications (i.e. talk again, like good marmots) in more detail once we have shaken off the annoying idiots!
However (and here we see the benefits of hypertextuality – for those who want to take advantage of it – and of resuming discussions from where they left off, rather than starting from the beginning every time), even though this fact is obvious (a mercantilist country exports deflation, not growth), in the twelve years that we have been dealing with the topic something may actually have changed . What do I know? Perhaps Germany could have run into a deficit with respect to the Eurozone, thus substantiating its role as a "locomotive", i.e. a net buyer? Or it could have gone into surplus with China (nonsense authoritatively supported in one of the two posts that I asked you to reread and which you undoubtedly reread), confirming the thesis of those according to which thanks to the high level of its investments and of its research, is Germany able to compete with China, and consequently, by exporting to that distant country, does it allow all of us to benefit from an outlet on such an important market?
Here it is: twelve years later, a coupon for those two posts may be worth doing, updating the same graphs and tables. It will help us see if perhaps we have become idiots, thanks to our proverbial adorable arrogance, or if idiots have remained idiots, due to their proverbial despicable obtuseness. I think I know the answer, because we have already spoken far and wide about the trend of German surpluses (one of the last times in the post on philanthropist bankers ), but I am prepared with a calm and secular soul to rediscover it with you.
I would therefore start from the graph on which Lucrezia Reichlin had shamelessly constructed fake news : the one according to which "its trade surplus [of Germany, NdCN] has increased above all thanks to exports to non-EU countries: China, Central and Eastern countries Europe and Oil Producing Countries":
Reichlin's source was the IMF (which means everything and nothing: in the WEO, for example, there are no data for origin and destination). At the time we checked on the OECD Data Explorer, which in the meantime has changed its structure, becoming less intuitive to use , but in the meantime the Eurostat Data Browser has become more intuitive to use (and is expressed in euros), so I use it .
First of all, let's see if today by replicating the graph that he disgraced, he proved his esteemed colleague a lie, that is, this one:
twelve years later and on a different database we get different things:
and no, sorry (not much), but Reichlin's article proves, with little surprise, to be nonsense that has absolutely stood the test of time: it is confirmed that her pompous editorial confused extra-Eurozone exports with global ones, and that in the period from you considered that exports to the Eurozone had been systematically higher than those to outside the Eurozone, refuting the assumption that Germany was growing mainly at the expense of others: instead it was growing mainly at our expense! It was the well-known game of lending (via Franco-German banks) to the PIIGS the money with which to buy German cars and submarines (and I think you didn't remember this last detail: think how much laughter the Turks had!) .
We can therefore confidently extend the graph to see if things have changed in some way and how, that is, if Germany has stopped growing at our expense, and if perhaps it has even contributed to our growth, becoming a net importer from the Eurozone for support their economies, as more or less in those years the partisan Joe was demanding, so passionately and unheeded!
The extended graph is here:
(we cannot go beyond 2021), and it tells us what we already know and what we had seen, for example, here (where however we considered the current account balance, therefore not exactly the same data):
After having killed its internal outlet markets, Germany was forced to turn to foreign outlet markets, resulting in an explosion of the extra-zone goods surplus and a relative dampening of the intra-zone goods surplus.
But… does it mean that Germany has started to support us with its growth?
Before answering, let's immediately remove another pebble-ino-ino from our shoe. Is it really true, as the idiots say, that Germany is in surplus with China because of its technological leadership ? We also practiced this, showing at the time that no, it wasn't really like that:
Germany was (quite obviously) in a deficit with China, as the main marketing hub, via Hamburg, of what at the time was Chinese junk (perhaps rebranded Made in Germany ) and which today are products with ever greater added value. But have things changed? Of course not! In fact, replicating that graph with Eurostat data we get this:
The numbers are dramatically the same, so I refer to the comment I made here , and by extending the graph we land on a #sevedeva:
The Germans have indeed tried to become net exporters to China, but they have never succeeded, and the greendemic they have inflicted on us has given them a big blow from which they will hardly recover, with a take-off in imports associated with a decline in exports .
Is the lesson clear?
But let's go back to the idea that Germany supports us with its growth.
Meanwhile: what growth?
Maybe it's worth updating this table too:
that is, the one that clarified here (i.e. in one of the two posts you reread, right!?) how Germany had substantially underperformed from the Maastricht Treaty until 2010 (so what locomotive, if it went slower than the carriages?).
Using the World Development Indicators (also changed, but relatively easy to consult for those who know what they are looking for) the situation is this:
The average annual data for the 1992-2010 sub-period confirm (and indeed accentuate) the fact that in the post-Maastricht period Germany has run less than the rest of the Eurozone, and those for the 2011-2023 sub-period (from Monti onwards) essentially do not deny this. We can imagine that with the next adjustments to the national accounts, that 1.3% average annual growth between 2011 and 2023, substantially identical to the 1.2% of the rest of the Eurozone, will become 1.2% rather than 1.4%! It's not the first time that Germany has avoided declaring a recession by rigging the cards, as we highlighted here (who remembers)?
Therefore, Germany cannot have supported the Eurozone with its growth because at most it grew as much as the Eurozone (when it did not hinder it), that is because… it did not grow! Do you see that anyone who talks about a German locomotive is an idiot? How can you "pull" a car that doesn't walk? But do these imbeciles look at the data, or not?
Regardless of its growth, which remains asphyxiated, Germany cannot have supported the Eurozone because it was a net seller, not buyer, of its partners' products. The fact that Germany still remained in surplus with respect to the Eurozone, even after having devastated it with austerity, tells us this, and to get a more accurate idea we can unpack this surplus into its main components:
Above all you have the red line of Figure 1 and subsequent updates (i.e. Germany's trade balance with the Eurozone) and below you have the balances of the main countries. You will not be surprised to note that while Spain, Italy, and all the others have reduced their deficit towards Germany after 2008-2009 (here you see it as a reduction of Germany's surplus towards them, which nevertheless remains positive!), the France has gone straight on its way: you see the German surplus in relation to France (French deficit in relation to Germany) in grey, and in fact… I would see it in gray (if I were them, as fortunately they are not)…
Summary in ten minutes, because I have many.
1) Germany has never had such a growth performance as to justify the nickname "locomotive" for it;
2) if it had ever had it (but it didn't have it) from our point of view it would have pulled in the wrong direction, as De Nardis said years before the partisan Joe, because it has always been a seller, not a net buyer of our goods, and this applies in particular to Padania, as we have had the opportunity to explore in depth elsewhere;
3) the macroeconomic adjustment determined by having severed the branch on which it sat (the internal demand of the Eurozone countries) did not change these circumstances at all: Germany attempted to survive for a while on the money of the non-Eurozone countries Eurozone (this can be seen from the explosion of the goods surplus and also of the current account surplus with respect to the non-Eurozone) but this period is over, because the USA has become bored (see Dieselgate and gas pipeline explosion), Russia is having become a closed market for geopolitical reasons, China has never been an outlet market, and other emerging markets look elsewhere;
4) more generally, Germany has always and only lived off dumping : it did energy dumping in the 1970s, when in response to the oil shock it dug into its own coal, causing serious environmental damage to itself and others (remember the rains acidic ? Remember the German fiasco ?) but avoiding the inflationary consequences of the increase in oil prices; it did wage dumping with the Hartz reforms at the beginning of the century, without this helping it to grow or making us grow; he did currency dumping with the euro, with the only result of pissing off the United States (see Dieselgate); he did energy dumping again by concluding a separate peace with Russia, without wanting to see or understand what strategy the Atlantic Alliance was pursuing (yet it wasn't difficult: everyone understood it!), and dragging us into the consequences of his hubris .
This saprophytic country has been portrayed to us for decades by cohorts of hired pen-pushers as a power that invested in research and technology ( only here were you able to see the data ) and as such had a competitive advantage that allowed it to grow more than the others ( ?) thanks to the significant flow of exports, when in reality the competitive advantage was determined exclusively by a reform of the labor market which allowed it to keep the growth rate of real wages below that of productivity, as I also showed you here, in the post on Lampredotto:
(the analysis of the table can be found here ).
So, dear friends, what do we want to talk about? With this much locomotive it's obvious that we won't go anywhere. Is the euro irreversible? Of course, and who ever said otherwise!? The first time I went on television I said that we would not emerge from him, but he from us, because his being irreversible does not obliterate, but rather strengthens, his being unsustainable!
So calm down: now we are in relative safety: let's let the Carolingians, the Lotharingians, and the Germans (or what's left of them) have fun with each other.
Our problem is not them. Our problem is idiots, and that, as you will have understood, is an unsolvable problem, but less serious than it might appear, because as much as they want to repeat to themselves that the Earth is flat and Germany is a locomotive, the curvature can be seen to the naked eye, unlike German growth (which never happened). Facts have a hard head, and we can easily let the idiots mess with them. We keep the bar straight and don't let ourselves be distracted.
( …next week I'll announce the click day: Giacché, Balzano, Borghi, Galli, Gaiani, etc…. )
(… ah, I know that you, who think you're cooler than the others, haven't reread the two posts from February 2012: this night Canne will appear in your dream, that is, sorry: Spinelli! I warned you … )
This is a machine translation of a post (in Italian) written by Alberto Bagnai and published on Goofynomics at the URL https://goofynomics.blogspot.com/2024/09/i-cretini-e-il-saprofita-deuropa.html on Sun, 08 Sep 2024 13:20:00 +0000. Some rights reserved under CC BY-NC-ND 3.0 license.