The horizon is not so far as we can see, but as far as we can imagine

Category: Europe Page 2 of 14

Is France Near A New Republic?

This video is worth watching, though I have no idea whether the bit about dead cops is true:

The situation is simple: Macron unilaterally raised the pension age by two years from 62 to 64. This is after it was increased to 62 from 60 in 2010. He couldn’t get it past the legislature, so he used a clause which allows him to do so without legislative approval. Macron one the final round of the last election by 17%, but he had no mandate for this sort of reform. People voted for him to keep LaPen (the far right candidate) out.

This has caused an explosion of protests which is not abating.

A little more background is useful. The standard talking point is that France can’t afford the current pension system and thus MUST push back the qualification date and that this is reasonable because people have longer life spans than when the pension system was created and because the age pyramid has changed: there are proportionally fewer younger people and more older people.

Here’s the French GDP per capita char from 1980 to 2021:

So, it rose pretty consistently till about 2008 (surprise) and since then is flat to slightly rising depending.

Next chart. Labor productivity.

Same basic pattern.

One more, inequality.

That last table, in particular, deserves a good looking at if you have time.

But for current purposes, what is important is simply this: France is richer than it used to be and more productive and more of its income and wealth is held by the rich, and if France wants to keep its retirement age at 62 it can certainly afford to do so, it just might have to tax rich people a bit more and maybe not give billions to Ukraine and so on.

Of course France can afford an early retirement age of 62 or 60. It can only not afford it if you “hold everything equal” in the sense that you assume doing so is not a priority.

So, Macron is full of shit. The government can easily afford the current French pension age and should probably even drop the age a couple years if the majority of the population want that.

Meanwhile while what Macron has done is constitutional, it clearly shows that the constitution is broken: he’s doing something the majority of the population and the majority of the legislature oppose, which in a democratic society shouldn’t be possible.

Since he’s shown that the constitution itself is broken and that majority will cannot be accommodated because doing so would require the government to tax rich people who have been doing very well over the last forty odd years, French citizens are entirely justified to get out in the streets and not just stop this bill but overturn the Republic and institute the next one.

As for Macron, he’s always been insufferably sure that he’s right about everything (I am aware of the irony of me of all people writing this) and that it’s OK to make the majority of the population suffer to keep neoliberal orthodoxy running. He’s a true believer, a genuine ideologue, his ideology is just neoliberalism and neoliberalism doesn’t work any more.

France should be a model for more countries. When your rich people screw you over, take to the streets.


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Dog Bites Man: The US (With Foreign Allies) Did Blow Up The Nord Stream Pipelines

I mean, I feel kind of lame for even posting about this because unless you were stupid (or on the payroll) you knew it was either the US or an ally, and if an ally the US was involved.

Turns out it was the US and Norway. Seymour Hersh.

Of course he had to post this on his substack because not a single mainstream outlet will publish it.

A Dalek commented how surprising the CIA’s competence was in this operation, but what I find interesting is how effective media control is now: if no one will cover it, did it even happen? The level of control over the media is astounding, and the majority of it is tacit, I doubt the CIA had to call outlets and say “don’t publish Hersh”, the people in charge know what their job is and do it without any threats, then see themselves on the same side as the CIA and if a truth is too inconvenient, well, it isn’t important.

It really does remind me of the early post 9/11 and Iraq War period, where you just couldn’t tell the truth and be heard on anything mainstream, and trying was a career death sentence.

And yeah, I do think this is worse than it was in the past. The old media was corrupt and often complicit, too often, but it wasn’t this bad. A combination of almost every media asset being owned by just a few companies and the Ivy League takeover of journalism jobs, which used to be working class, has made the vast majority of the media little more than collaborators with the powers that be.

I’m a bit of a broken record on this, but I still find it extraordinary that they lied about Corbyn about 80% of the time. Amazing.

Anyway, Norway (who made 40 billion more a year from taking sales from Russia) and the US who has also made a mint selling Europe natural gas, turn out to be the nations responsible for destroying Nord Stream, which I’d say was an act of war. Turns out the nations with the most to gain were the criminals. What a surprise. (Though I did think Poland might have been involved, as they had other things to gain. Turns out greed was the primary factor, not ideology.)

Dog bites man. It is tedious that this had to be proved. The amount of cycles wasted by intelligent people proving what is obvious to anyone who isn’t a moron or dishonest is pathetic. (And this nonsense is why I rarely bother proving the obvious any more. It’s just meant to waste cycles and anyone asking for proof of the obvious is not an honest interlocutor.)

Note: corrected “cover” to “publish”, which was my original intent.


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What Hungary’s Purge of Senior Military Officers Can Teach Us All

Victor Orban is not a stupid man even though I disagree with him on a great deal:

Hungarian military leadership is receiving a purge. Over 170 generals and high-ranking officers were fired in a matter of a couple days. A deNATOization is occurring in the Hungarian command purging those that were socialized in NATO and international partnerships.

Now, it’s easy to reflexively say this is bad, but imagine you were a left-wing South American leader.

Yeah, you’d be an idiot not to purge the military of those trained by “NATO” and the US, because those are the guys who resist and who launch coups. The only question is how to do it without causing a purge. If you want to run your country in ways the West doesn’t approve of, this is what you have to do. It may be you want to do things that are worse or better (or a mix of both), but whatever you want to do, if it doesn’t agree with the US, you can’t leave those military officers in command.

This is more broadly true, of course, military officers who are loyal to a different ideology are poison. This is why the Angl0-American ideology was supposed to be that career military men don’t have political opinions; or at least don’t share or act on them. More violated in the breach, etc…

In Turkey Edrogan spent years purging the military, and used the failed coup to finish the job. But if he hadn’t already been purging, it wouldn’t have failed. In Brazil, Lula is currently cleaning at least some house, though nowhere near as much as Orban.

And some may remember that in Britain, there were threats of a coup if Corbyn became Prime Minister.

The military and paramilitary forces, police and secret police in particular, are always a problem. But there’s an argument that the worst are those who were foreign trained and whose loyalty isn’t truly to their home country. And given how senior officers in NATO countries are trained and socialized, well, their loyalties must always be suspect. Is it their own country their loyalty is with, or America?

Within a country, the question is “loyal to which faction.” In the US, for example, if push had come to shove it’s safe to say that the border cops would have sided with Trump and will side with any future “strong man.” Those watching the storming of the capital will remember how restrained the police were: if it had been a bunch of blacks, would they have been so considerate?

Brazil had an attempted coup during the election, and Lula, the new President is treating it very differently than Orban: he’s not just going after the foot soldiers, but after the people behind them. But then Lula went to prison on trumped up charges designed to stop him from running in the previous election: he understand the stakes viscerally.

American elites, internally, operate by a simple rule that if a member doesn’t betray the class, they don’t go to prison and they don’t lose their cushy lifestyle, even if they lose their power. There’s been some movement to hold Trump to account, but it’s half-hearted, simply because elites don’t want “their” president to be the one on the chopping block next. They all do things which could be considered illegal, after all, they’re little better than Mafia dons.

But if the stakes are “I keep power or I lose everything” then the game changes. The problem is that knowing they essentially have immunity, crimes in the elite class  have become worse and worse over time.

All systems have written and unwritten norms, but all systems have in and out groups. The norms apply to some people, and not to others. If any regular employee had treated classified documents the way Trump, Clinton and Biden did they’d be in prison, that’s just a fact. Blacks are treated worse than whites; but poor people are treated worse than rich people. Kinda shitty to be poor and black.

And some people and groups are considered legitimate in power and others aren’t. Corbyn wasn’t, which is why the media lied about him 80% or so of the time and why a nonsense anti-semitism scandal was whipped up (there was anti-semitism in the party, but Corbyn isn’t one, and the party is less anti-semitic than the Conservatives, which is what you would expect.)

And it’s why the British military might have couped Corbyn if he won and it’s why Orban, and his dispute with the EU heats up because of his refusal to go along with the consensus in the Russian war, on top of his various other policies, is getting rid of those officers committed to a different ideology, who might feel that he is illegitimate, and that he needs to go.

 

The Death Throes Of The World Europe Made

Most people don’t really get just how extensive European conquest of the world was.

The map’s a bit inaccurate over in Russia: most of Russia is “not Europe” and was conquered — most of it should be green, like North America. Likewise, Japan was conquered by the US, which is a European colony. Leaving aside their brutal war crimes, they were stupid to pick a fight with an industrialized continental power: there was never any chance of winning against the US, as Admiral Yamamoto told them.

But the point is fairly simple: Europeans made the modern world. Wiped out almost all the natives in North America; conqured all of Africa and South America, and almost all of Asia. We went around and imposed our form of capitalism. We destroyed local industry, as in India (which was at least as industrialized as England before the conquests) and forced the natives to trade with us on negative terms, the most famous example being the two Opium wars to make China allow the Opium trade, since England had almost nothing else the Chinese wanted to buy.

World War I and II were a competition between the European powers (which include the US, who had by then essentially completely wiped out the natives) and the US and USSR, the peripheral continental powers won the war, divided Europe between them, “de-colonized” and then ruled the world between them till the USSR collapsed, at which point the US got to tell almost everyone what to do and how to do it for a good twenty-plus years.

A few nations managed to sort of resist: Cuba, Venezuela, Iran and North Korea, but they were made to suffer vastly for their defiance.

The era ended, I would argue, when Russia sent troops to Syria. They defied the US directly, and fought, and the US backed down. One could argue for Georgia, but it was on Russia’s border. Syria was an assertion that the US could not overthrow any government it wanted and that it didn’t control the Middle East minus Iran.

But Russia, important as it is, is now a junior ally to China. They have the nukes, but they don’t have the economy to stand up to the West and NATO without China’s support, and they know it. The competition is not really between Russia and NATO or Russia and the Ukraine, but China and the US, even though neither side has anything more than observers on the ground.

The Russians have chosen their side: chosen not to be Europeans but to be Asians. They say this frequently, it’s a deliberate choice. If this century is to be the Asian one, Russia will be Asian. This change from looking to Europe and being essentially European is massive, and it’s what makes it possible for China to win. Losing Russia, with its vast resources and land ties to China makes it nearly impossible to use American sea-power to “choke out” China thru trade interdiction.

The coming cold war, and possible hot war (or a series of proxy wars) with China is about whether a non-European power will be allowed to remake the world Europe made. Everyone recognized that the US was Britain’s heir, ruling indirectly, but ruling nonetheless. It is about a different, non-EuroAmerican elite being powerful: people who don’t believe in exactly the same things as the trans-Atlantic rulers.

It is an existential threat to European rule, and it is being treated as such. The “yellow peril” has arrived.

In 30 years, will Mandarin be the the new English? The new lingua-Franca? The language everyone has to know and that you can, if clumsily, get by on almost everywhere?

Absent a major war, likely nuclear, or civilization collapse, I find it hard to see a scenario where China doesn’t become the most important global power. Oh, they have problems–but so does everyone.  Cries of how they can’t do it because of culture seem weak to me: China was the civilization leader for most of the last 2,000 years, the idea that Chinese culture can’t produce science, music, arts and all the other flowers of civilization is absurd and they’ve certainly been able to adopt our innovations, just as we previously adopted gunpowder and the printing press from them.

Everything ends. We Europeans had our day in the sun (though my Irish ancestors missed most of it) and now the sun sets, as it always does.

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As China Rises, Europe Falls

Some interesting news in the semiconductor wars:

Now, ASML had indeed opposed US restrictions. They said explicitly that in the case of sanctions, China would learn how to make the machines themselves.

Europe’s technological lead is being destroyed by following US policies. Energy intensive firms are fleeing Europe because US energy prices are much lower (this is due to sanctions on Russia and the sabotage of the Nord Stream pipelines) and following US sanctions on China means that China just learns how to make what Europe supplies them now.

It’s sort of rocket science, actually. As you may remember, the US banned China from the International Space Station, so China just built its own and now looks likely to have a base on the moon before the US.

Woops.

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China, to repeat myself, is the world manufacturing floor. Mercedes moved their auto-design center to China. When the US took the lead over the UK in manufacturing, the UK retained its tech lead for about 20 years, but it did lose it.

Repeated sanctions on any area where the West has the lead, whether space, aerospace, semis or anything else only provide a perfect complete tariff to a country with millions of engineers and scientists and more manufacturing capacity than any other country in the world. They speed up, not slow down, the day when China will both have the tech lead and the manufacturing base.

Back in the late 90s and the early 2000s I warned, repeatedly, against transferring the manufacturing floor to China. That was the decision point, that was when it could have been stopped.

Sanctions against key points only make sense if you’re going to either go to war or move massively back to industrial policy, and the West is not going to do either of those things. I’m not sure a full move to industrial policy would even work, but it’s certainly what should be done. However, it could only be done if you were willing to crash real-estate and securities prices by about two-thirds, because the cost-structure matters.

What Europe should be doing is aligning itself with the rising power, China, or remaining a neutral bloc and negotiation places where they will keep the tech lead with China, as part of specialization. China wants trading partners and they see benefits in not having to rush every tech sector out of fear of sanctions. The US is both going down and fundamentally, at a policy level, willing to feast on Europe to slow its decline. Euro elites though they were part of a trans-Atlantic elite, but they only sort of were. When push comes to shove, American elites will let Euro elites swing. Generations of dominance have created an American elite willing to almost anything, or perhaps even anything, to retain dominance.

Europe has hitched itself to the wrong ship, and trusted the wrong nation, thinking that being a satrapy is the same as being an equal ally, and they have joined a cold war that will hurt them more than help them.

They will pay the price.

 

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The Decline Of the European Garden

A while back EU foreign-policy chief Josep Borrell said “Europe is a garden.” He was fairly widely attacked, but I agree. Some parts are much less of a garden, but Europe is a garden.

However, Europe’s status as a garden is based on factors which are no longer true:

1) Vast military superiority.

2) Vast productive superiority

3) Vast technological superiority at producing and fighting.

This needs some unpacking. Prosperity is just how much goods and services you have. If a society has relatively low inequality, and enough goods and services, almost everyone may share in the prosperity, if not only some part of the society may be prosperous, and those will obviously be the people who have the most power within the society, though that doesn’t mean the richest people are the most powerful—the powerful people may just be prosperous enough. Nancy Pelosi is worth about $120 million. You and I will never see such money, absent hyperinflation, but she isn’t Jeff Bezos rich. Still, she and almost all members of Congress are inside the charmed circle.

To be prosperous, then, you have to create rather a lot of goods and services. If you don’t bother with radical inequality, you may need less of certain kinds and more of other kinds: comparing the 60s to the 2010s is instructive. Not a lot of private jets or mega-yachts and rent and houses were cheap, but there were a lot less luxury condos.

Now roughly speaking, there are three inputs to producing goods and services: labor, capital (meant here as machines and buildings and so on) resources. Any economics 101 textbook will tell you so, and it’s one of the few things in an economics 101 textbook that isn’t wrong.

Europe’s not a large place compared to the rest of the world. For most of its history, certainly after the collapse of the Roman Empire (and really a couple centuries before) it was a primitive and very nasty backwater. But starting in the late 1400s or so the Europeans became very good at warfare and seafaring. Having spent a millenium fighting each like cocks in a pit, they had an advantage over pretty much everyone else (and where they didn’t yet, like China, they walked small.) Along with spreading disease to the New World, killing upwards of 90% of the population) they were able to grab a lot more resources than they had before.

Understand that at this point Europe does not have a productive advantage: China and even India are much more productive. Before the European invasion, India has more industry than England.

But they have a military advantage, multiplied by plague and are able to grab much of two additional contents, the Americas, and then get (thru coercion and commerce, African slaves were mostly sold by their compatriots) slaves and peasants made out of the Americas people to labor for them, while colonizing with Europeans at the same time.

Then, in the 19th century, when England was the first country to properly industrialize, they exploded, conquering or subjugating essentially everyone. Even places which weren’t formally conquered, like Thailand or much of China (the century of humiliation) knew their place.

The world’s resources belong to Europe. There was that upstart semi-European colony the US and the peripheral semi-European Russians, but basically Europe, Russia and the US controlled the majority of the world’s resources, even where they didn’t rule. The world sent them raw goods, they sent back manufactured goods and “provided” services like government.

Then the Europeans fought two internal wars, and were divided up by the corner powers: the USSR and America. And yes, that is what happened. European countries in the West and East were (and still are) satrapies. Nominally independent, but not really, and operations like Gladio, which ensured governments wound up in charge that were friendly to the US, or the Red Army crushing Eastern European independence movements make that clear.

The USSR collapse, the Eastern European countries mostly joined the EU, and the EU grew in power, but Europe still remained a satrapy, pointed almost entirely now towards America. From this point of view, the Ukraine war is nothing but a conflict over whether Ukraine will be a Russia or American satrapy, as its desperate desire to join NAT and the EU indicate.

Europe had a window, especially in the 2000s where it could have become truly independent, but it chose not to and during the Ukraine war it has so far, with some grumbles, subjugated itself further to America. No longer willing to buy energy from Russia it has become vastly dependent on the US. Problem is that that Americans charge Europeans four times as much as the Russians did for natural gas. As a consequences, a great deal of industry is planning to move out of Europe, because they aren’t viable. Much of it is going to America, helping America re-industrialize by sucking away industry from its satrapies.

Likewise, as Europe had not built a large army and was dependent on American military manufacturing or military tech and manufacturing licensed from the US, to support Ukraine it needed America assistance. (US whining aside, not having to maintain a large military is one of the primary advantages of being a satrapy, and smart overlords don’t really want their satrapies to be too strong militarily.)

Going back to prosperity, you are prosperous when you have more stuff. Europe’s problem is that it’s gone from controlling the majority of the world’s resources, to having a lot less resources than it needs. It imports more than half of its energy requirements, for example, and it doesn’t have the minerals and rare resources it needs. For a long time, because of a remaining technological need, it was still more productive than most of the rest of the World and that meant nations had to send it their resources and get them back in completed form, and as satrapies of the overlord, they still received preferential access thru the methods of coercion used by the American empire.

And so, because for so long Europe had access to most of the world’s resources at preferential rates (directly, or in the American era because they were the favoured satrapies) and had among the highest tech and thus were highly productive, they were able to create their “garden.” And an amazing and beautiful garden it was, and to some extent remains.

But, now that they are just satrapies, without colonial empires and with limited ability coerce other nations if the US doesn’t help them (France, really, is the only one to still maintain a decent unilateral ability to kick around a few minor African nations), their access to resources is based on the strength and generosity of their satrap.

This worked pretty well for a long time, but then there was the rise of China. China became the world’s foremost manufacturing power, caught up in almost all technologies (chips and aviation are being fought over so fiercely because they are almost the last bastions where China has not caught up), and nations had options: they didn’t have to sell thier raw resources to the US, Europe and to countries hosting outsourced and offshored Western industry. They could go to China. And China offered and offers cheaper loans, cheaper good and builds ports, railroads, hospital, power generators and even entire cities and does it for far less than the West.

The American empire has involved a lot of military coercion, but the primary coercion was economic. Up until the nineties it was usually of the “you can only get it from us” variety, and since the 90s it has been “we’ll lock you out if you don’t cooperate”, but all of it was based on “you have no choice. Only we can really make the things you need, plus you can’t defend yourself against us, and we have so much money we can buy a faction of your elite to coup your government if you don’t cooperate.”

Europe rode piggyback on that, and after some lessons after WWII understood that if they didn’t want to be couped, they would make sure their governments were acceptable the US. Only France ever dared significantly buck the system and even they eventually came back into the fold, albeit muttering curses under their breath.

Now, let’s talk about Europe and Russia. Russia was providing energy cheaper than Europe can get it anywhere else. A lot of it, and had Nord Stream 2 come on line, they would have been able to double it, which would have made Europe’s energy bill even cheaper and most importantly, Germany’s, since Germany is the productive and industrial powerhouse of Europe.

This is why German politicians especially, before the war, resisted US efforts to shut down Nord Stream 1 and 2 and its why the pipelines were sabotaged (probably by the US, though the formal investigations will never say that.)

Even if Europe wanted to remain an American satrapy, and all indications are that current EU elites do want to, they wanted to reduce the cost of important resources and assure access to them because Russia, again, was willing to sell them for a lot less than anyone else and way less than the US was.

This made industry viable. It is no longer a world where people have to buy from the US/Europe/Japan/Taiwan/hangers on because they (we) are the only game in town. They can buy from China, and China is cheaper. To compete, Europe had to keep its costs in control and in some areas offer better quality or some of the few goods that China can’t create (often to China, as it happens.)

Without trade, Europe, which no longer has coercive ability, cannot get what it needs. The Euro is not the dollar. People take it because they expect they can do business with the EU at some point. It’s relatively liquid, but it is only secondarily backed up by the US military.

The European garden was based on having access to more resources and to being more productive than all or most of the rest of the world with those resources. This was based on having a tech and military lead, allowing for coercion. After WWII it was based on “we are the favored satraps of the US empire and still have a tech and productive lead so we have access to the resources.”

Bu that is going away. The tech lead is almost gone. The productive lead is gone in most industries and the access to resources is declining, because China can now make better offers in most cases. Now add in refusing to buy cheap Russian energy and minerals and replacing them with more expensive substitutes, when substitutes can be found at all, and consider the European future.

Europe doesn’t have enough resources, and doesn’t have a productive or technological advantage significant enough to maintain its “garden” in the face of the rise of China. The trade alliance between Europe/Germany and Russia was an attempt to keep European industry viable by keeping costs down.

At this point, Europe is in a race where they must either be cheaper (by being more productive) or have an absolute advantage (you can’t get this from anyone else, or at least not from China), in order to maintain their industrial base. Without cheap Russian energy and minerals, this is going to be a lot harder.

So then, you may ask, what about moving to renewables.

Well, they will work to some extent but they still require resources, just not as much fuel. Europe recently sanctioned imports from Xinjiang in China for human rights reasons. Turns out most of the silica required for solar panels comes from there. Then, of course, there is the refusal to use nuclear power, which is required to make renewables work by providing baseline power. In the middle of a crisis where German industry is fleeing to the US because of high energy prices, Germany will not turn back on its nuclear reactors for even a few years to transition over.

But bottom line, even with renewables, resources are still needed as inputs for industry in order to produce goods and if you don’t have a lot of military or economic coercive power (like the US had and still  has, though it is declining precipitously) that means  you wind up losing your prosperity and becoming like all those countries in African, Asia and Latin America who can never seen to get to developed status.

You “un-develop.” My money is on Britain (soon England) to be the world’s first undeveloped nations.

But the smart money is that over the next few decades, that will be true of much of the EU. Perhaps a few countries in Europe will manage to hang on, but not most.

Happens to everyone eventually. All eras come to an end. The job of modern EU politicians was to keep it going and to make it possible for the next generation to keep it going.

Looks to me like they’re failing.

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America Defeats Germany Again, Europe Foolishly Helps

(I’m aware others have made the same US defeats Germany point before this. Just becoming super obvious.)

There’s a good article in Der Spiegel on the German energy/industrial crisis which is worth your time.

Basically industries which have high energy costs are being crushed. In particular this means chemical and automotive, both big in Germany, but extends far further.

(Indeed, the chemical industry was essentially invented by Germany in the 19th century, and American industry exists because the patents were broken in WWI and not reinstated after the war.)

This has a lot of knock-on effects, not only in price increases (which are big), but shortages. For example:

The coronavirus pandemic showed how easily modern production processes can get out of sync. Supply chains interlock like the insides of a clock, and if one cog fails, the entire machinery can grind to a halt.

An example is a small company from Lutherstadt Wittenberg, Germany, which has made it onto the prime-time news broadcasts in recent days because its products are needed almost everywhere. “Our production has been halted completely,” says Torsten Klett, the co-managing director of SKW Stickstoffwerke Piesteritz. “And we will only be able to restart if the gas price drops significantly or if politicians provide us with massive support.” The chemical company is one of Germany’s largest producers of fertilizers and AdBlue. Natural gas has also become too expensive for SKW. If political help doesn’t arrive soon, the company could be forced to send its 860 employees into a work furlough program in October.

Few modern diesel engines can be operated without AdBlue – not those of the fire department, not those used in public transportation and, above all, not the 800,000 or so trucks that transport goods of all kinds across Germany’s roads every day. Should companies no longer receive the products they need for their own production, the result wold be devastating, and almost all sectors would be affected.

The national association representing the logistics industry has begun warning of potential bottlenecks, even though AdBlue is also manufactured by BASF and the Norwegian firm Yara. But BASF began cutting back on ammonia production last year due to increased gas prices. The world’s largest chemical company can still compensate for the shortfall by buying on the world market, though the costs continue to rise.

So, logistics crisis intensifies because of lack AdBlue.

Meanwhile increased energy prices are hammering every single business and homeowner just for electricity, heating and cooling, so much so that it’s causing many retailers to become non-viable. Employment is actually tight (whisper after me “Covid deaths and Long Covid”), so there’s pressure on wages, but prices are increasing faster than wages so consumers don’t want to spend.

Industries that Germany has been powerful in for over a century are being hammered.

Now a lot of Europeans hate Germany, and with good reason. The Euro has been less than Germany would have had given its own currency with their level of exports, but higher than it should be for most other European countries, meaning that German industry was subsidized and other nations like Italy and Finland were penalized.

Germany aggressively policed other European countries, making it near impossible for them to protect their industry thru other means like subsidies, generally under the rubric of “fiscal discipline” and when countries were in crisis engaged in a fair bit of looting.

Meanwhile Eastern Europe was never properly integrated into Europe, remaining primarily a source of cheap labour and not properly moving up value chains.

To Eastern Europeans Germany is a traitor who made deals with the evil Russians to keep their energy prices low and didn’t really share the ensuing prosperity. (Germans would mostly disagree, noting the subsidies. But countries want their own prosperity, not welfare.) To Western Europeans Germany has repeatedly abused its economic and political power to keep its industry strong, even as others lost theirs.

So Germany has a lot of power in the EU, but few true friends, and there’s a lot of resentment.

Still, whatever the causes, Germany is the industrial powerhouse of Europe and Europeans who are laughing at Germany’s loss of industry during this energy crisis are being foolish, because what’s happening is that Europe as a whole is becoming weaker.

But the beautiful icing on the cake (if you’re an American oligarch) is:

A big winner from the energy crisis in Europe: the U.S. economy.

Battered by skyrocketing gas prices, companies in Europe that make steel, fertilizer and other feedstocks of economic activity are shifting operations to the U.S., attracted by more stable energy prices and muscular government support.

As wild swings in energy prices and persistent supply-chain troubles threaten Europe with what some economists warn could be a new era of deindustrialization, Washington has unveiled a raft of incentives for manufacturing and green energy. The upshot is a playing field increasingly tilted in the U.S.’s favor, executives say, particularly for companies placing bets on projects to make chemicals, batteries and other energy-intensive products.

“It’s a no-brainer to go and do that in the United States,” said Ahmed El-Hoshy, chief executive of Amsterdam-based chemical firm OCI NV, which this month announced an expansion of an ammonia plant in Texas.

Some economists have warned that natural-gas producers from Canada to the U.S. and Qatar may struggle to fully replace Russia as a supplier for Europe in the medium term. If so, the continent could face high prices, at least for gas, well into 2024, threatening to make the scarring on Europe’s manufacturing sector permanent.

It’s not other Europeans who are going to win out of this, everyone’s being hurt to some degree and any gains are relative, not absolute. “Well this hurts the Germans so much more than us” is only a relative win. But it weakens Europe overall: the production mostly isn’t moving to other European countries This is the wrong way to deal with a real problem, in other words, and the right way was political and a rejection of neo-liberalism. But since neo-liberalism is religion to Eurocrats, that wasn’t possible. Dealing with Germany couldn’t be done rationally and sensibly, so instead it has been done stupidly and harmfully, so that no one benefits except the US.

As I have said since the start, anti-Russia sanctions primarily hurt Europe and help America. They make Europe weaker and re-enforce the European political position as American satrapies. Since they do very little harm to Russia, the rational course would have been to continue to buy Russian oil while only putting on targeted sanctions (no military or dual use sales), and spend the next 2-4 years gracefully moving to alternatives in a way that would not deeply damage Germany and Europe’s industrial base and wouldn’t cause a general economic crisis in Europe.

Longer term, my forecast is that Europe as a whole will move to second world status. Their decisions around Ukraine have made that a certainty, since they make it a virtual certainty they will also wind up going along with the US in the cold-war against China. Europe has less and less tech and industry that the world must have: there are other consumers available and they no longer have a military worth worrying about.

Europe’s massive living standard was based technological, industrial and military superiority which is going away. The rise of China ends that: there are now 4+ major industrial/technological powers and Europe isn’t needed. As China climbs the tech chain, there will soon be nothing significant they, or anybody else, must get from Europe (jets may be the last holdout, but even that will not last.)

Mishandling of Ukraine, the war and sanctions is Europe’s decision to go ugly into its twilight.

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The European Position at the End of the Unipolar World

It’s hard to remember now, but in the early 2000s, the EU appeared to be the onrushing power. It was gaining new members, who clamored to join, both its economy and the Euro were strong, and it had avoided entanglement in Iraq. Its prestige was high (having nations begging you to let them in their club tends to do that).

What I suggested the Europeans do, at the time, was try and make the Euro into an alternate reserve currency. They also should have increased their military, making them non-reliant on the US in the guise of NATO. Within the EU, steps needed to be taken to stop the abuse of the Euro by Germany as a subsidy for its manufacturing (because the Euro was lower than a pure-German currency would have been) and to allow genuine subsidies in other countries to make up for the disadvantages they would incur as a result of using a Euro — which was priced too high. Aggressive moves towards energy independence would also be necessary, as Europe was –and is — obviously resource deficient.

None of this was done. It appears that EU leaders were comfortable being US subjects, or at least, they didn’t want to challenge it. Germany’s policy towards Russia was trade, sold on the assumption that trade alone would make them good little Europeans, without offering them a path into either NATO or the EU, and with the added insult of allowing and participating in the looting of Russia during the 90s.

As for economic policies like subsidies and some counterweight to German exports, well, that would contravene the neoliberal, technocratic ideology that very much rules Eurocrat elites: the rules are the rules and if your economy gets trashed by them, as Finland and Italy, among others, found out.

In 2008, the Europeans followed the Fed (and, admittedly, everyone else) into a gigantic bank bailout, then spent most of their time since printing money for rich people (a reasonable description of central bank special operations during that era).

Meanwhile, anti-Russia sanctions proliferated, Russia-EU/US relations deteriorated (especially due to to the fight for influence over Ukraine — but that was definitely not the reason), and it all flared into crisis when Russia invaded Ukraine after years of Ukrainian military operations in the Donetsk and Luhansk Republics.

That led to sanctions, which have so far hurt Europe worse than Russia, as the European (and especially German) power grid needs Russia natural gas and coal which they can’t easily obtain elsewhere. Damage to industry has also occurred, and some observers expect it to cost entire German industries and millions of jobs; nor is the rest of Europe unaffected.

The problem now is that a fast move away from natural gas, oil, and coal isn’t possible. Heat exchangers work, but there aren’t enough available. Renewables are great, but transitioning takes time and anti-Xinjiang sanctions mean that 50 percent of the world’s silica supply, along with much of its solar panels, are no longer available.

Meanwhile there’s a heat wave, Europeans don’t have air-conditioning, and live in buildings largely designed for cold weather (with some southern exceptions), and, as everyone loves to say, “Winter is coming.”

Transition is not impossible, but it will take time. It is going to require restarting any nuclear plants which can still work (the numbers do not work without it) and probably building some new nuclear reactors, along with a buildout of various forms of renewable energy. Even moving to imported, and more expensive, US natural gas is not as easy as it seems: it requires infrastructure which does not exist.

Russia, meanwhile, as we’ve discussed before, is restricting natural gas supplies and threatening cutoffs. They can’t buy European goods, and they need the money less than Europe needs gas, coal, and minerals. They are diversifying to the East and South as fast as they can. Add to that to their position as one of the world’s largest grain producers is serendipitous at a time grain production comes under pressure from climate change, and consider that they are capturing a fair bit of Ukraine’s farmland, some of the most productive in the world.

Then there is China. Europe does a lot of business with China and there are massive trade ties. But Europe continues its anti-China rhetoric and keeps putting on additional sanctions against China. China wants the European market, and there are still some advanced items they need to buy from Europe, but political considerations, especially with regards to Taiwan and Xinjiang, may trump such considerations. In particular, it is not in China’s interest for Russia to be defeated or broken up as so many in Europe want, as Russia is a key supplier without which China cannot resist a US naval blockade.

Europe finds itself in a position where it’s scared of Russia and outraged. Eastern Europeans in particular want a complete hardline because they genuinely fear conquest or Finlandization. Without reliable access to Russian resource, Europe is forced to rely on the US and various unpleasant Middle Eastern states and to pay higher prices.

And meanwhile, the simple fact is that transitioning to energy and resources without Russia is hard and will take years. I’d think a full transition, even if done competently, will take a decade or so. Combined with the need for the US in order to stand up to Russia (EU militaries are a joke, Ukraine actually had the largest one), and the Europeans find themselves completely back in US satrapy mode. The US is sending more troops and building bases and that’s how it has to be, if hostility to Russia remains.

Which means that the EU has another task: it has to build its own military, capable of standing up to Russia. This is by no means impossible: Europe is technologically advanced and still has the necessary industry, including world leading aviation, but right now all that is happening is buying more US made weapons and hosting more US troops.

If Europe wants to be anything but a satrapy, it has to fix it energy and resource issues; it has to build a military and it needs to do something even harder—it needs to rethink its ideology, and allow proper industrial policy internally. This is hard to do when it’s dependent on outside resources from a hegemonic power, but if it refuses to do so, it will remain an American satrapy.

How much of this will be done is unclear. Exchanging reliance on Russia for the US may seem like an improvement, but it is still dependence and if Chinese relations sour, the Europeans become “locked in”, with few options.

It’s hard to imagine the current generation of European leadership managing this well, but perhaps they will surprise or, more hopefully, perhaps they will be replaced by more competent politicians.

But overall, it looks like Europe is slowly marching towards its historical norm, less and less important and powerful on the global stage.

A lot, of course, will depend on climate change and who gets hit the worst and handle it the best, but right now Europe looks to be in decline, with an opportunity, if they take it, to use this crisis to come out stronger and less dependent on outsiders.

I hope they take the opportunity.

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