Economic Crisis Presents Historical Opportunity For Romania The Fifth Labour Of Hercules

Once upon a time, humankind lived historical times as legendary heroes emerged from the midst of their people and forged a future for them. Maybe the public perception was different at that time. Maybe the "people" did not understand the constraints of the moment and did not bestow too much confidence upon them, but their merit does compel undeniable recognition today.

Such heroic times have passed and the people are now focusing their hopes on their governments to deliver them from crises. But what can we do in the face of an unprecedented crisis, emerging from unprecedented intemperance generated by the very reckless policies of the past few decades?

Hercules, the greatest hero in the Greek mythology, had to perform twelve labours to redeem his sins. His fifth labour was to clean the Augean stables, which had not been cleaned in over thirty years. Hercules cleaned the stables in only one day by rerouting the rivers Alpheus and Peneus to wash out the filth

As there are no more heroes left, the crisis is the only hope humankind has got to clean the stables of politics. For the time being, the existing governments and politicians are trying - in contrast with their pretentious statements - to promote crisis containment programmes that serve no one but themselves and require astronomical costs. We have come to a phase where they are trying to preserve political privileges at any cost, especially considering that the actual cost will be paid by the future generations of taxpayers. The present generation of taxpayers, too, shares some of the responsibility for the yoke that the next generation will bear. Could this be exclusively attributed to the lack of financial education?

Moreover, it is almost certain that governments will use the crisis as an excuse to take on new "responsibilities" and further limit economic freedom.

In November 2008, Rahm Emanuel, the current Chief of Staff of the White House, told the Wall Street Journal:"Never let a serious crisis go to waste." And, to anticipate "inappropriate" interpretations, Emanuel explained that a major crisis was "an opportunity to do things you couldn"t do before."

We do not know whether the crisis mitigation spending on a skateboarding track in New England or on training courses for barbers and stylists in Florida qualifies as an opportunity that should not be missed. What can be seen is that the governmental programme has reached its limits, the budget deficit is over 1.4 trillion dollars and the Democrat leaders in the Congress are talking about a new economic stimulus scheme. What kind of stimulus? The kind that comes from inflating public debt?

Barney Frank, Chairman of the Financial Services Committee of the House of Representatives, believes that subsidised mortgage loans are necessary, despite the associated risk of non-performance. "I don"t think it"s a bad thing that the bad loans occurred. It was an effort to keep prices from falling too fast. That"s a policy," Frank said, according to the New York Times.

The first results for the third quarter indicate that the major international banks secured a profit above expectations and thereby seem to confirm Frank"s "solution." Unfortunately, this is just the effect of trading in governmental securities and cheap money, amid a continuous deterioration of the lending portfolio. The results of the companies living in the real economy are determined by massive and rapid cost reductions, driven by a substantial sales plunge.

Elizabeth Warren, Chairperson of the Congressional Oversight Panel on TARP (Troubled Asset Relief Program), told the Washington Post that "we don"t know where the 700 billion USD is because the system was initially designed to make sure that we didn"t know." That"s another way of saying "transparency and responsibility in managing public money," isn"t it? And the results are simply not there, because "the banks still have those toxic assets," as Harvard Law School Professor Warren said. To her, the U.S. middle class has become the turkey at the Thanksgiving table, and the consequences will reach far beyond the economic dimension.

The situation is even better at the Federal Reserve. Left without backing since the early 1970s, the dollar has finally found a small anchor in the real world: a mall in Oklahoma City, which became property of the Fed, following the 29 billion USD loan given to J.P. Morgan in 2008 to buy Bear Stearns, as Reuters reported. Unfortunately, this "asset" is almost as hollow as the dollar.

In Britain, the cold shower of economic facts spoiled again the Government"s party in Q3/09, too. However, the stock market remained happy on the scent of a new batch of freshly printed money. Sir Howard Davies, the former head of the Financial Services Authority, told the Telegraph that the British people were living in a "fool"s paradise," as they had not yet understood the true depth of the crisis. Davies believes that the country is facing "dramatic risks" as the Government is out of any weapons to fight the crisis, while the public debt is surging day after day. In his view, the most serious fact is that the Britons will not accept any spending cut and are ready to go on strike to prove it. "Britons appear to assume that the "fantastic growth in public spending" over the last decade has become an entitlement," the Telegraph wrote, quoting Davies.

While financial wizardry in the U.S. and Great Britain stopped being a surprise a long time ago, expectations were much higher of the authorities in Germany. At least until the elections in September. Now, the new coalition Government is trying to find legal ways to avoid the restrictions concerning the budget deficit, having in mind a planned taxation cut, which will not be accompanied by a corresponding spending cut. The creation of an extra-budgetary "investment vehicle" on the brink of constitutionality rather resembles the "creative accounting" that made Enron famous.

Can the solutions proposed by the western governments still reach beyond this deplorable status? Of course! Soon enough, night will be declared to be day, the law of gravity will be abrogated and economic charts will be published - by emergency ordinance - only upside-down. Thus, growth will be perpetual. The eternal and fascinating Romania is not an exception in the global circus of the anti-crisis effort. However, in Romania, things have been taken to an entirely new level, well beyond good and evil, beyond anything that could constitute a limit. Words fail to describe the ongoing governmental crisis and the proposed "solutions." The list of the "new" Government has pushed the art of mocking the people even beyond the climax of civilization and progress promised by Nicolae Ceausescu.

The agreement with the IMF is being "sold" to us as the only possible way to counter the crisis, although it is actually the only possible way to save the current politicians, for a price that the people will pay for at least a generation.

The ongoing economic crisis, which will soon end into an unprecedented depression, presents a historical opportunity to Romania. It can play the role of Hercules and clean the "stables" of the country, which are not even populated by the immortal livestock of King Augeas.