Fwd: BOUNCE lbo-talk at lists.panix.com: Non-member submission from ["Harald_Schumann"@spiegel.de]

Doug Henwood dhenwood at panix.com
Thu Mar 18 09:01:57 PST 1999


[This bounced for an address problem.]

From: "Harald_Schumann"@spiegel.de Received: from notes3.spiegel.de (notes3.spiegel.de [112.11.0.12]) by mail.spiegel.de (8.8.4/8.7.3) with SMTP id LAA23944 for <lbo-talk at lists.panix.com>; Thu, 18 Mar 1999 11:14:10 +0100 (MET) Received: by notes3.spiegel.de(Lotus SMTP MTA v4.6.2 (693.3 8-11-1998)) id C1256738.00385AA5 ; Thu, 18 Mar 1999 11:15:32 +0100 X-Lotus-FromDomain: SPIEGEL To: lbo-talk at lists.panix.com Message-ID: <C1256738.00385A69.00 at notes3.spiegel.de> Date: Thu, 18 Mar 1999 11:13:36 +0100 Subject: Re: Farewell to Oskar Mime-Version: 1.0 Content-type: text/plain; charset=us-ascii Content-Disposition: inline

Brad de Long wrote:

Senior U.S.policymakers viewed Lafontaine as a useful counterweight

to the deflationists in Europe. For six years, now, U.S. policymakers

like

Lawrence Summers have been lecturing European finance ministers and

central

bankers on the desirability of demand expansion in Europe--and Oskar

Lafontaine is one of the few European politicians who openly agrees

with

the U.S.

That sounds rational. But why they refused to support him in public ? There

was no Wall

Street manager nor a US politician, who ever said in public, Lafontaine is

right. Instead

they supported the absurd central bank cult, saying a rate cut is

necessary, but

unfortunately not possible, because the german finance minister demands it

and endangers

the political independance of the ECB council.

Brad de Long wrote:

And no one has yet explained to me why Lafontaine did resign...

The main reason is, that the chancelor, Gerhard Schroeder, and his aid Bodo

Hombach (comparable to your White House chief),prefered to cooperate with

Lafontaines foes

in the business comunity instead of

supporting his legisaltive efforts. Other than Lafontaine, they realized,

that simply being

elected in a modern media democracy does not mean you are in power.

Lafonatine and his

amateurs did nearly nothing to convince the public and manipulate the media

in their

direction, while his foes knew how do it perfectly.

Imagine the scene: Lafontaine comes out with a new tax code, trying to

eliminate the

biggest loopholes for corporations. Their effective tax load has reached

the lowest level

in the whole OECD during the Kohl era. Then, the CEO of Allianz, Europes

most powerful and

biggest financial conglomerate threatens in public to move around 10.000

jobs to London or

another european tax heaven. A similar threat comes from the utility giant

RWE (30 % of the

german electricity market + 20 billion Euros annual turnover in other

branches like

machines,telecom, conmstruction etc.) and Daimler-Chrysler (which did not

pay taxes in

Germany since 1995).

What was the chancellors reaction? Did he protest against the blackmail

method? Did he

declare that the german tax system is extremely injust and needs to be

reformed the

Lafontaine way? No, against the advice of his finance minister he received

Allianz boss

Schulte-Noelle for a private conversation and promised a soon correction of

the terrible

new tax law. And this was only the last example of Schroeders Anti-Oskar

course. So, Oskar

realized he could not win anymore, thats all. What was the title of his

last book? "Dont be

afraid of globalisation!" - that was bad analysis and even worse advice.

Harald



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