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Friday, July 16, 2010


At the very moment that European governments are nervously, tentatively and almost coquettishly beginning to strip themselves of the socialist and welfare trappings that have so burdened them with debt, so Obama’s America is beginning to pick up Europe’s discarded robes and begin the process of making the United States the biggest socialist harlot on the block.

America’s new role as the world’s Welfare Whore of choice has come about at the very time that the majority of Europe’s states are courting Austerity, a leaner and healthier mistress, whose favours are hard earned but come with the promise of greater, lasting pleasure. Obama has in fact not only inherited and picked up Bush’s and Poulson’s cheque book, which had already seen billions in state aid thrown at America’s struggling banking sector, but has re-mortgaged the house, borrowed on the nation’s credit cards and taken up with some dodgy counterfeiters who have conceived a new way of turning paper into gold. Euphemistically called quantitative easing, or QE, America’s new Midas touch is enabling the Federal Reserve to buy up state bonds like there’s no tomorrow, which, if they carry on, there may well not be.

The Federal Reserve and the Obama administration, whether out of fear of a 1930s style Depression, self interest in getting reelected in 2012 or genuine conviction, have not only embraced Keynesian economics with the fanaticism of the convert but have reinvented statist interventionism and turned it into a war: we’re either stimulated or annihilated. With interest rates already at ground zero, the Fed is rumoured to be wheeling out its doomsday weapon, “monster’ quantitative easing with the Fed’s Chairman Ben Bernanke now poised, like some grotesque Baron Frankenstein figure, with his hand on the printing press levers ready to unleash Trillions more dollars, and buy more yet more bonds, in his bid to use ‘extreme monetary stimulus‘ in his war against deflation and to save much that should be allowed to fail.

Now that Europe has finally understood that its ‘spend, spend, spend’ mantra of the last fifty years has had its day and is finally, reluctantly and nervously beginning to rein in some of its excesses, Obama is on the phone telling everyone to put the music back on because the party’s not over. Simply put, if the Europeans are all desperate to get in Miss Austerity’s bed then there’ll be less than euro left for the US’s poor little state-rich Welfare Whore, no matter what sweet nothings and promises Obama and Benerke have been whispering in her ear.

Europe has woken up to the fact that its citizens may not be able to retire in middle age, or take months off when they have a cold, or expect cradle-to-grave welfare support. The party really is over and they know it. They know too that there’s a huge bill that they, the guests, who’ve been partying like there’s no tomorrow, will have to pay. So far, only a few of the party goers have actually put their hands in their pockets and chipped in, but the rest of the guests are at least working out what’s in their wallets, which is good for Europe. It’s good because, although people have known for years that our welfare wonderland was unsustainable, nobody has ever really bothered to do anything about it because we knew that it would hurt and be unpopular with the nation’s voters. Margaret Thatcher tried, but that was a long time ago and her policies caused riots and protest and no one wants that again. Far better to nothing and that, give or take the odd, easily reversed cutback, is exactly what the governments of Europe have done forever and a day.

Now, as a result of one of the most dire financial crises ever, governments not only have a scapegoat to blame but they can all get through hard times together. The people may moan, they are; they may riot, as they have in Greece and surely will in France; a few, like Hungary and Holland, may go all fascisti for a while but, cut back Europe can, and will. Even Germany, once one of the Welfare Whore’s best customers, has booted her out of bed and decided to get lean and, by all accounts, the Germans are loving it. Their country is doing well, they’re beginning to flex muscles again they didn’t know they had and they might even invade Poland. Yet, the land of free enterprise, CSI, cute cheerleaders, Hollywood and one of the world’s biggest Fiscal Deficits is getting all antsy in case this new craze for Austerity chic means that we start buying home grown produce for the first time in ages.

Well, maybe we will and maybe we won’t, but the surest way to guarantee that Europeans decide to start dissing the dollar is to start telling them to buy USA. No one likes being told what to do, least of all by a President who seems to walk down the yellow brick road with a welfare hoe on one arm and bags full of counterfeit cash on the other. Obama was elected as much by the Europeans as the Americans, or at least that’s how Europe’s left-leaning, snobby intelligentsia see it. Obama was their president of choice, black, smart, not called Bush and who spoke like a character from the West Wing. So he was in their eyes a cool president who would do what they wanted. Of course, almost two years down the line, Obama has not delivered, the US is still in Afghanistan and Iraq and, worst of all, he’s now becoming like them and creating a welfare state, which is just so uncool, last year and is, as the French say, c'est remo (it’s dead).

President Obama may want and perhaps need the rest of the world to spend, but it’s not going to happen, no matter how much money Bernerke prints and how much more financial stimuli banks are encouraged to make available. For the first time ever, there is a kind of reluctant, and albeit tepid, consensus between the peoples of Europe and the peoples of America and that is save, save, save. Credit cards are out, credit is out and most of all borrowing is out. People are ready for the first time in a generation to get down and frugal with each other and nothing Obama can do or say is going to make any difference; for, after all, a welfare whore in lipstick is still a welfare whore no matter how you dress her up. Equally, a president in pimps clothing is still a pimp no matter what he says.