You gotta know when to hold ‘em,
Know when to fold ‘em,
Know when to walk away, and
Know when to run…
—-Kenny Rogers, The Gambler

I meant to write about this last week when it was still a bit fresh, but I suppose it’s never too late. Last week, you see, there was the little thing of the Italian elections. Depending on how you count, Italian voters rejected the austerity agenda. Only 10% voted for the basically externally imposed Eurocrat, Mario Monti, who was apparently aptly dubbed “Rigor Montis” by the so-called “clown” candidate Beppe Grillo, which amounts to a 90% rejection of, heh heh, the Full Monti. So much for Super Mario.

But even austerity-lite did not do so well. 57% combined voted for Silvio “Bunga-Bunga” Berlusconi and for the Five Star Movement of Grillo, both coming at an anti-austerity position from different angles. The result is basically that Italy has a hung parliament for, at the very minimum, budgetary issues that touch on the European austerity agenda.

This has resulted in a delightfully, ludricrously unhinged reaction in Germany starting from the Kanzleramt in Berlin on down. And the annoyance goes fairly far down. You may wonder why it is that an election in Italy should produce so much anger in Germany. And you would be right to wonder it.

Explaining how that happened—-and why austerity as a “solution” was a terrible idea—-requires several posts on its own, which I’ll probably never get around to writing, but obviously it has to do with the European Monetary Union. It was in part intended to force the creation of a pan-European politics, but perhaps not this kind of pan-European politics, where each country feels powerless to prevent policy changes from being made not chosen by its leaders…or citizens.

At this point, you would think that the leadership of the European Union, the dreaded Eurocrats or whatever you want to call them, would sit back and think that there is something wrong with this picture here, or what they might be wreaking in Europe or have wrought in the introduction of a fatally-flawed Euro. Well, this time you would be wrong.

There is at least one big difference between the European political elite and the North American one. The latter is more venal in motive and more likely to think that it can transcend the results of bad policy choices. Think “Kochs”. I think that creates in some ways a more predictable framework of thought. A more direct cost-benefit analysis, if you will, and a willingness to cut losses.

In continental Europe, however, the political and economic elite (that portion of it that is not merely an extension of London and Wall Street) do not believe that they can transcend their errors. Furthermore, they believe that they really are the True Heirs of the post-WWII European stability project. What this means is that this unfortunate logic prevails:

1. European political stability cannot be allowed to fail.
2. We are the guarantors of European political stability.
3. Therefore, whatever we institute cannot be allowed to fail.
4. If something we instituted has failed, European stability has failed.
5. See rule #1.
6. Therefore nothing we instituted has failed. [stick fingers in ears]

Nach uns kommt die Sintflut. This is Too Big Too Fail written into mega-apocalyptic terms, and is not merely a self-serving mantra of, e.g., giant banks. They are really willing to drag this situation out until they can create the appearance that it is working again. They will do anything in their power to ensure that an alternate popular voice, regardless of what it is saying, will not get its way, because to them every voice that is not theirs may well be the voice of Adolf Hitler or, at the very least, Mussolini.

They don’t know when to fold ‘em.

…you never count your money,
When you’re sittin’ at the table…