Why the Troikan Horse will do for the Portuguese what it did for the Greeks

This Portugal is not resting, it is an ex-Portugal. It is no more.

As the Troikanauts levitated themselves magically down onto Portugal yesterday, they knew what they’d land on: an extremely straightforward situation we economists call A Dead Horse. That is, the government has done everything asked of it, except grow the economy. Being by now almost completely mad, the Troika will therefore report back that the national horse has dieted most diligently, and thus little Alonso has been a very good owner. Unfortunately, little Alonso’s horse is still dead – and thus far, flogging it hasn’t produced any more signs of life than the Vegan diet did.

If there is no money with which to consume, and no credit available to folks with no money, the contemporary ‘model’ of capitalism simply cannot function. It will either produce a horse galloping forth on steroids, or a dead horse. Often it supplies both. This is Portugal’s tragedy.

Originally, the word model was taken to mean ‘perfect example’ – as in, the best available. In economic terms now, thanks to yet more consultancy bollocks, it means ‘a chosen set of modus operandi’. Its much wider usage until feminism reared up from the bath water was ‘female airhead in Vogue etc’. Belief in the currently favoured model of capitalism is very much on the same intellectual level as your avaerage stick-insect on that Tatler front cover.

“Close up now for the camera Neocon ducky, yes, yes, pout, pout…lunge, sideways on, give me wealth give me wealth yes, better, better, swivel darling swivel, trickle down a little, trickle for me….excellent….lips again sweetie, you want it, you want that money, think big screen telly sweetie, think very big screen…that’s it yes, that’s it…loosen the top buttons dear, deregulate….a little more, next button, deregulate…oh yes, great – great, now look down your nose at me darling, sneer, sneer..ooh you’re a bitch baby, bitch, give me ethics are for wimps…brilliant, yes…but you’re weighed down by taxes sweetie, weighed down, go baby go…kick off those shoes…be abandoned honey…terrific shot, terrific…wanton, gimme wanton, gimme retail thereapy, I want maxed out on the plastic darling, sad, you can do sad, no more plastic…on your knees now, closing in ducky, yes, I’m in your face for that mortgage payment…gimme fear oh fantastic these are going to be great, do homeless, homeless, on the floor, on the floor, writhe baby writhe. Excellent. OK Neocon, another great session, thanks. You’re the one darling, you really are. Fag lovey?”

It may seem an odd comparison, but Portugal is like the US, minus only the Bernanke. Both countries have the same problem: massive tax evasion, massive bureaucracy, massive political corruption, massive national debt, declining export markets following the rise of Asia, rapidly growing inequities of wealth, and a People being taxed to pay for the mistakes of the politico-financial elites.

Above all, both countries are failing to get a recovery going – because the rich with pots of money lack the spending power on their own to do that, and because the poor have lower job prospects and higher taxes. Bernanke’s solution has been to instigate two sets of quantitative easing – as its name suggests, designed to solve the liquidity constipation in an over-leveraged banking system. Because neither of them worked, he’s now considering a third go.

The Portuguese have received a totally different kind of assistance: moral outrage followed by austerity and anally strict monetarism. This has been tried so far in three countries. Because it hasn’t worked anywhere, Berlin-am-Brussels is insisting that it must continue.

I believe that this theory of triumph over adversity is often referred to as ‘one last heave’. Well, when I think of the stupidity and inhumanity involved, it certainly does make me want to vomit.

Last May – desperate to find another way to be austere – the Portuguese government suspended four of its fourteen public holidays for five years. As it happens, I’d abolish all bank holidays and simply give workers 75% back in extra holiday to choose for themselves (it would, studies have shown, increase productivity) but even I struggle for a parallel with four cancelled feast days in the context of Potuguese economic flatlining. Sewing a hole in the Lusitania’s last d eckchair as a response to being torpedoed? Not bad – but not the full ticket.

The bottom line is that falling tax revenue caused by austerity means Portugal is likely to miss its budget deficit target of 4.5% this year. They could be given more time to achieve it, but we mustn’t do that because your average Bundestag Big-Gob says if we do, Wolfgang Schäuble’s head would explode, and we can’t have that.

‘Alternatively,’ writes the Washington Post this morning – with no apparent irony, “the inspectors might demand more austerity”.

OK Gods, they’re mad now: time to start with the destruction thing.