The We-Fixed-Nothing Chickens Are Coming Home to Roost

Paying interest on debt that wasn't invested in productive assets and that has no collateral to back it is a fiscal black hole

When the real problems are masked with fake "solutions," the chickens eventually come home to roost, and we wake up to the reality that the fake "solutions" have only made things much worse.

by Charles Hugh Smith

The reality that the global Status Quo has fixed absolutely nothing in four years is finally coming to roost in the global economy. Though there is an endless array of complexity to snare the unwary, the source of instability is both visible and easily understood: too much debt that will never be paid back. Making matters much worse, much of the money that was borrowed--by sovereign governments, local governments, households and private enterprises--was squandered on consumption or malinvestments, and so there are precious few assets or collateral underlying the debt.

Even when there is an asset--for example, a vacant house in a vacant development in Spain, or a Greek bond--the market value is considerably lower than the purchase price.

The essence of our values is the rule of law, not the rule of presidents.

Obama's Secret Kill List

By Andrew Napolitano 

The leader of the government regularly sits down with his senior generals and spies and advisers and reviews a list of the people they want him to authorize their agents to kill. They do this every Tuesday morning when the leader is in town. The leader once condemned any practice even close to this, but now relishes the killing because he has convinced himself that it is a sane and sterile way to keep his country safe and himself in power. The leader, who is running for re-election, even invited his campaign manager to join the group that decides whom to kill.

Capitalist haven

British traditions boost the de facto state of Somaliland

By Lawrence Solomon

It’s the only African country that doesn’t rely on foreign aid from the world’s rich governments. It’s a Muslim country in Africa that has had a functioning democracy for two decades. It’s an oasis of relative peace in one of the most vicious regions of the world, with a growing free-market economy, low inflation and a currency that has been appreciating against the U.S. dollar.

This anomaly of a country, Somaliland, is unrecognized by any other country in the world, even though the World Bank’s chief economist for Africa touts it as a “success story” and the World Bank itself doesn’t formally recognize it. Somaliland’s story is all the more astonishing given that it is officially part of Somalia, a failed state best known for its piracy at sea and al-Shabaab terrorists on land, and given that it declared independence in 1991 after surviving a brutal repression by Somalia’s Marxist dictator that dispersed much of its population to the U.K., Canada and other safe havens.

The Ugly Truth About Social Security Is Revealed

The money is no longer yours. Deal with it

By John Tamny

A recent front page USA Today story inadvertently exposed the lie that is Social Security. Though the article was ostensibly about budget deficits, and how unfunded liabilities of the Social Security variety were not properly being accounted for in deficit calculations (they quadruple taxpayer liability), a staff expert at a liberal think tank shed light on why.

Sure enough, and despite the protests for years from big government apologists that our Social Security funds are secure, it turns out they’re not. We know this now not because we’re logical, or because some libertarian said so, but because Jim Horney at the liberal Center on Budget Priorities told us exactly that.

An amazing example of why this country is headed in the wrong direction

Honor student placed in jail for tardiness and truancy at school

By Simon Black

This past Friday, Barack Obama was at a Minneapolis-area Honeywell plant touting his economic recovery credentials to cheering disciples. One of the excited faithful was a young boy, fifth-grader Tyler Sullivan, who took the day off from school to hear the President speak.

The President was full of the usual bombast about how Congress needs to work with him to 'build a strong economy', and how he wants to get $3,000 to everyone in the American middle class so that people can go out and buy 'thingamajigs'.

Europe’s Screwed Generation and America’s

It Can Happen in US 

As the boomers have held on to generous jobs and benefits, their children have given up on raising families

by Joel Kotkin  

In Madrid you see them on the streets, jobless, aimless, often bearing college degrees but working as cabbies, baristas, street performers, or—more often—not at all. In Spain as in Greece, nearly half of the adults under 25 don’t work.

Call them the screwed generation, the victims of expansive welfare states and the massive structural debt charged by their parents. In virtually every developed country, and increasingly in developing ones, they include not only the usual victims, the undereducated and recent immigrants, but also the college-educated.

The End of the Euro

A Survivor's Guide

The ECB has always vehemently denied that it has taken an excessive amount of risk despite its increasingly relaxed lending policies. But our estimate says differently.

By Peter Boone and Simon Johnson

In every economic crisis, there comes a moment of clarity. In Europe soon, millions of people will wake up to realize that the euro-as-we-know-it is gone. Economic chaos awaits them.

To understand why, first strip away your illusions. Europe’s crisis to date is a series of supposedly “decisive” turning points that each turned out to be just another step down a steep hill. Greece’s upcoming election on June 17 is another such moment. While the “pro-bailout” forces may prevail in terms of parliamentary seats, some form of new currency will soon flood the streets of Athens. It is already nearly impossible to save Greek membership in the euro area. Depositors flee banks, taxpayers delay tax payments, and companies postpone paying their suppliers — either because they can’t pay or because they expect soon to be able to pay in cheap drachma.

The Cause of Inequality: Family Breakdown

American Caste

By Kay S. Hymowitz
When Charles Murray’s best-selling Coming Apart: The State of White America, 1960–2010 appeared a few months ago, the book’s fictional working-class neighborhood, Fishtown, became one more battleground in America’s 50-year-old culture war. Fishtown was representative, Murray argued, of a new white underclass in America—one produced by cultural decline, especially the collapse of marriage. Critics objected that the real source of misery in the nation’s Fishtowns wasn’t a lack of marriages; it was the extinction of manufacturing jobs. The disagreement was familiar to culture-war veterans: conservatives versus liberals, family breakdown versus dearth of good jobs, culture versus economics, David Brooks versus Paul Krugman.

A Continental Fantasy

Simple-mindedness and megalomania characterize the “European project”

By Theodore Dalrymple

On a flight from Copenhagen to Brussels, I read two publications that I see infrequently: the International Herald Tribune and Le Soir, the principal Belgian newspaper in French. Both, not surprisingly, had much coverage of the European crisis, and both used an expression that, to me, has a sinister ring: the European project.

As it happens, I was once interviewed by one of Le Soir’s best-known journalists, who asked me whether I was in favor of the European project. I said that I would answer if she would tell me what it was. She did not, and we moved on to other subjects. Whatever the European project may be, those who don’t embrace it wholeheartedly—with a fervor that can only be described as mystical, considering that no one can explain or define it in simple terms— are depicted not as skeptics, but as enemies. Thus in Le Soir, we read: “Only the enemies of the Euro and of the European political project, notably the City of London, dream of such a cataclysm [the break-up of the single currency]!”

We're saved!

Official Panic Hymn Intoned by Famous Out-of-Tune Choir

by Pater Tenebrarum

In Europe, everybody seemed eager to get his 2 cents in as the crisis once again intensified.

Alexis Tsipras again promised his followers the impossible – namely that he alone could square the circle and deliver both more spending by the government by 'canceling the bailout' and let Greece retain the euro – whereby it should be noted that no-one can be 100% sure if he will or won't be able to blackmail the rest of the euro-group, but our guess remains that the answer is actually no.

War by Other Means

Stuxnet and Flame 

By PHILIP GIRALDI

I was one of the first to report about the source of the Stuxnet computer virus in The American Conservative magazine back in December 2010.  It was created in an Israeli laboratory at its Dimona nuclear facility. The New York Times picked up the story over a year later.  We have now learned, from a deliberate leak, that the US National Security Agency and Department of Energy helped the Israelis to develop the virus and that an infected component was placed in the Iranian computer network with the assistance of the CIA (apparently using an agent affiliated with the Mujaheddin e Khalq supplied by the Israelis).

Doves or Pigeons?

Strictly for the Birds

by Theodore Dalrymple 

From the window in my study I can see the bird table in our small garden. Although I am no ornithologist, I can tell a hawk from a handsaw, or rather a thrush from a jackdaw, and the behaviour of the birds amuses me greatly. It sometimes distracts, or perhaps I should say diverts, me from what I should be doing.

Every morning and evening I put out seeds for them. We have reached such a state or refinement of consumerism that even seed mixture sold for the birds is now attractive and even appetising; it looks like muesli for very small people, and is no doubt fortified with all kinds of minerals and vitamins. I think there have probably been times in human history when people were given worse to eat.

Repudiating the National Debt

Paying off a national debt would quickly bankrupt the entire country

by Murray N. Rothbard, June 1984

In the spring of 1981, conservative Republicans in the House of Representatives cried. They cried because, in the first flush of the Reagan Revolution that was supposed to bring drastic cuts in taxes and government spending, as well as a balanced budget, they were being asked by the White House and their own leadership to vote for an increase in the statutory limit on the federal public debt, which was then scraping the legal ceiling of one trillion dollars. They cried because all of their lives they had voted against an increase in public debt, and now they were being asked, by their own party and their own movement, to violate their lifelong principles. 

Statism Means Culture War

From gay marriage to education, state intervention pits citizen against citizen

By ROBERT P. MURPHY

The news today is full of controversies having religious and cultural overtones, especially gay marriage and insurer coverage of contraception. Historians, philosophers, jurists, and theologians all make different and important contributions to the national discussion. Free-market economists also have something to add: these conflicts are greatly exacerbated by the huge and growing role of the state in our lives, and these issues will never be resolved so long as the government displaces other institutions.

Consider the issue of gay marriage. When pressed for justifications, its supporters make an “equal treatment” argument with reference to historical racial segregation, but then they also typically offer practical arguments about unfair tax treatment, life-insurance benefits, child custody, and so forth. None of today’s supporters of gay marriage go so far as to say, “And this is why the government should imprison any religious official who refuses to marry a gay couple.”

If Europe goes down it's their fault

Don’t let the euro liars shift the blame

Nicolas Sarkozy again invoked the threat of war in Europe if the euro fails. He's a dangerous clown.

The Commentator

It’s always a sign of deep problems ahead when the people in the mainstream start sounding like they have completely lost touch with reality. That, of course, has long been true of the architects and builders of the modern European Union, but now they’re playing an altogether more sinister game of shifting the blame for their pet project’s obvious flaws.

Try this from Nicolas Sarkozy yesterday raising the prospect of war in Europe should the euro collapse:

“The euro is the heart of Europe. If the euro is destroyed, it's the whole of Europe that goes up in smoke. If Europe goes up in smoke it's the peace of our continent that will be one day or another be called into question," he said.

Cold War 2.0 Heating Up

The US has lost Cold War II before it begins

by Dr. Paul Craig Roberts 

An emerging foreign policy trend is Cold War II.  The US military/security complex, with help from Obama and Hillary Clinton, is working overtime to revive the profitable long-term stalemate of the Cold War that lasted four decades from the Berlin airlift to the Reagan-Gorbachev accord. During this long period Congress and the public supported an endless array of weapons systems to deter the “Soviet threat,” which, until President Richard Nixon’s opening to China in the early 1970s, comprised together with China the “Communist threat.”

Europe's Grim Choices

Βad ideas, once embraced, become entrenched

By Robert Samuelson

Europe is at the abyss -- again. Its turmoil is rattling global stock markets and stoking fear and bewilderment. The obvious question is, what's the solution? The answer is, there is no solution. Europe faces choices, some bad and others worse. Unfortunately, it's unclear which are which. The best that can be imagined is that Europe lurches from crisis to crisis and that its slumping economy weakens the already fragile global recovery. The worst is a massive flight from the euro and an economic free fall that resurrects the dark days of 2008 and 2009.

Europe's Bailout Costs In One Chart

€2 Trillion And Counting

This chart, summarizes just how much has been injected already to preserve the Eurozone from collapse.

This is what is known as a sunk cost and Europe is one 'rogue' democratic vote away from an EMU exit, and thus oblivion (or so they said last year, now everyone is prepared for a Greek departure, or so they say now, expect for the Greeks of course - they go straight to the 10th circle of hell and do not pass go). The truth is that by the time the status quo finishes its extend and pretend game, which incidentally has only one real outcome, the €2 trillion spent to date, will be orders of magnitude higher...

UK doctors strike against $ 83.000 pension deal

Another reason to scrap NHS

Producer oriented health systems always put interests of patients second, but this one takes the biscuit

The Commentator

As is being widely reported across the British media, doctors have voted for strike action in protest at government reforms for pensions that would give a doctor starting out his or her career today £53,000 ($82,000) upon retirement at the age of 65. Should they work longer than that, their pension would be considerably greater.

The Fat Lady Is Clearing Her Throat

Shouting "wolf" one too many times

by Mark Grant

Once at a social gathering, Gladstone said to Disraeli:

"I predict, Sir; that you will die either by hanging or of some vile disease".

Disraeli replied,

"That all depends, sir, upon whether I embrace your principles or your mistress."

We have reached a point where the shepherd has shouted “wolf” one too many times, where the theater goer has shouted “fire” one too many times and the crowd no longer believes the jargon and is standing pat. From one politician to the next in Europe the words are strikingly the same; “bold actions, courageous decisions, decisive plans” which are meant to stoke the propaganda machine and assure the world that all is well. We have had the bank stress tests; the first pockmarked by inaccurate data checked by no one and the second humiliated by an inaccurate construct which discredited it by its own shameless manipulation.

"Why do they hate us?"

 Breaking the golden rule

By Stephen M. Walt

Remember the Golden Rule? "Do unto others as you would have them do unto you." It's not normally regarded as a cardinal rule of foreign policy; in that realm, "an eye for an eye" seems closer to the norm. But lately I've been thinking that Americans ought to reflect a bit more on the long-term costs of our willingness to do unto others in ways we would most definitely not want them to do unto us.

Moral Reasoning and Public Discourse

The Tribal Mind

If we want to get along better and resolve differences more easily, it will take conscious effort to overcome tribal behavioral instincts.

By Arnold Kling

Moral reasoning is often used to intensify partisan loyalty. In that respect, it can actually harm public discourse.

In this essay, I examine the problem of moral reasoning and offer three proposals for mitigating its damaging effects. The first is to take opposing points of view at face value, rather than attempt to analyze them away reductively. A second proposal is to police your own side, meaning that one should attempt, contrary to instinct, to examine more critically the views of one's allies than the views of one's opponents. The third proposal is to “scramble the teams” by creating situations in which people of differing political views must work together to achieve a goal requiring cooperative effort.

Government subsidies are destroying the US education system

Restored Competition Will Lessen Inequality

By Luigi Zingales

The U.S. middle class is squeezed by the rising costs of college education and health care, and an economy that increasingly rewards only superstars. Fixing these problems requires introducing greater competition into each area.

Academics: The most dangerous crony capitalists are those who can wrap their requests for protection and subsidies in a noble cause. The market for higher education is far from competitive. Government subsidies and industry-controlled accreditation make entry for new institutions extremely difficult.

Declining Birthrates Key to Europe's decline

Falling Births, Falling Fortunes

by Joel Kotkin

The labor demonstrators, now an almost-daily occurrence in Madrid and other economically-devastated southern European cities, lambast austerity and budget cuts as the primary  cause for their current national crisis. But longer-term, the biggest threat to the European Union has less to do with government policy than what is–or is not–happening in the bedroom.

In particular, southern Europe’s economic disaster is both reflected — and is largely caused by — a demographic decline that, if not soon reversed, all but guarantees the continent’s continued slide. For decades, the wealthier countries of the northern countries — notably Germany — have offset very low fertility rates and declining domestic demand by attracting migrants from other countries, notably from eastern and southern Europe, and building highly productive export oriented economies.

Time Bomb?

Banks Pressured to Buy Government Debt

By Jeff Cox

US and European regulators are essentially forcing banks to buy up their own government's debt—a move that could end up making the debt crisis even worse, a Citigroup analysis says.

Regulators are allowing banks to escape counting their country's debt against capital requirements and loosening other rules to create a steady market for government bonds, the study says.

While that helps governments issue more and more debt, the strategy could ultimately explode if the governments are unable to make the bond payments, leaving the banks with billions of toxic debt, says Citigroup strategist Hans Lorenzen.

Say's Law of Markets

It is the capability of production which makes the difference between a country and a desert

by Murray N. Rothbard

While J.B. Say has been almost totally ignored by mainstream economists and historians of economic thought, this is not true for one relatively minor facet of his thought that became known as "Say's law of markets." The one point of his doctrine that the active and aggressive British Ricardians got out of Say was this law. James Mill, the "Lenin" of the Ricardian movement (see below), appropriated the law in his Commerce Defended (1808), and Ricardo adopted it from his discoverer and mentor.[1]

Kiss NASA goodbye

SpaceX’s Achievement Should Prod NASA to Think Big

By Bloomberg Editors

On Thursday, a space capsule known as the Dragon touched down in the Pacific Ocean.

After launching into orbit May 22, the capsule had performed a series of complicated maneuvers, docked with the International Space Station, dropped off more than 1,000 pounds of supplies and returned home bearing a load of science experiments.

It was the first commercial spacecraft to complete such a feat. And the company that developed it, Space Exploration Technologies Corp., or SpaceX, was rewarded with a U.S. government contract of $1.6 billion to fly 12 more supply missions.

Optimists saw a nimble private company leveraging public investment, reducing future taxpayer burdens and heralding a new age of commercial space flight.

Amelia Earhart: New evidence tells of her last days on a Pacific atoll

An Era when the sky was the limit

New information gives a clearer picture of what happened 75 years ago to Amelia Earhart and navigator Fred Noonan, where they came down and how they likely survived – for a while, at least – as castaways on a remote island.

By Brad Knickerbocker,

For decades, pioneer aviator Amelia Earhart was said to have “disappeared” over the Pacific on her quest to circle the globe along a 29,000-mile equatorial route.

 Now, new information gives a clearer picture of what happened 75 years ago to Ms. Earhart and her navigator Fred Noonan, where they came down and how they likely survived – for a while, at least – as castaways on a remote island, catching rainwater and eating fish, shellfish, and turtles to survive.

The 5th Avenue to Serfdom

Nobody thought about taking away your Big Gulp until the government began to pay for everyone's health care

By HOLMAN W. JENKINS, JR

Mike Bloomberg's move to regulate the size of sodas sold in his city illustrates why it's a good thing he is a mayor of New York and not the czar of all the Russias. American big cities tend to be one-party states to begin with, but at least their totalitarian impulses end up being merely cute because they're so easy to evade.

Under the Bloomberg plan, any cup or bottle of sugary drink larger than 16 ounces at a public venue would be verboten, beginning early next year. You'll still be able to buy as much Coke as you want in a supermarket. Go home and pour yourself a bucketful. As Mr. Bloomberg himself was the first to note, you'll also still be free to buy two medium drinks in place of today's Big Gulp at ballgames, theaters, delis and other venues where the ban would be in effect.

"New York City is not about wringing your hands; it's about doing something,'' added Mr. Bloomberg, peculiarly.

Half of the city's residents allegedly are obese or overweight—a stat seemingly belied by the ladies who lunch and the impression on the subway that New York remains one of the few places in America where people have not ballooned to supersize. But by the state's own estimate, it spends $8 billion annually treating obesity-related ailments under Medicaid, which is how 40% of city residents now get their health care.

Austerity With Growth?

Easy To Achieve, But Witless Politicians Don't Know How

By Nathan Lewis

Now Europe’s leaders say they want “austerity with growth.” Sounds nice. They have no clue as to how to achieve it.

Back in 2008, I said that the typical response of mediocre governments to the economic problems would be a combination of “austerity” and “stimulus.”  They actually use exactly those words. They can’t even manage to make up some new words, for generation after generation.

I didn’t expect things to follow this blueprint quite so exactly.

Governments find that they bounce back and forth between these “austerity” and “stimulus” strategies, discovering that they are both unsuccessful.

What tends to happen is that “stimulus” means more government spending. Soon, people discover that this “stimulus” spending tends to be directed to abject waste and crony capitalists, and the government’s debt burden explodes. Thus, the political system careens back toward “austerity.”

“Austerity” usually means less spending and higher taxes. The higher taxes are implemented, but it is soon discovered that nobody wants to reduce spending, especially when the economy is crumbling due to the higher taxes. What small reductions in spending there are tend to be directed toward genuinely beneficial services, while the waste, graft and crony capitalist payoffs continue unabated. The sagging economy leads to shortfalls in tax revenues, and the deficit may even expand.

The Neo-Keynesian Trap

Cheap, abundant credit stimulates the wrong kind of growth

By CHARLES HUGH SMITH

The grand global debate in political economy boils down to Keynesian stimulus vs. austerity. Stripped of rhetoric, the debate is much the same in nominally communist China, socialist Europe, and notionally free-market America: should the central state continue borrowing and spending enormous sums of money to maintain or restart economic growth (Keynesianism), or should it live within its means (austerity)?

Polemics have distorted the debate on several levels, starting with what “Keynesianism” and “austerity” actually mean. As many observers have pointed out, John Maynard Keynes did not, in fact, advocate permanent government deficits, but rather a commonsense policy of paying down public debt in good times and borrowing in bad times to bolster demand for goods and services.

What Paul Krugman and his allies propose today is neo-Keynesianism, and what that prescribes should be spelled out without spin: governments should borrow and spend all the time, but a lot more during recessions.

The neo-Keynesians have succeeded in painting austerity as the grim policy of wresting bread crusts away from widows and orphans, but its unspun meaning is that governments must live within their means rather than fund basic programs with borrowed money.

Austerity With Growth?

Easy To Achieve, But Witless Politicians Don't Know How

By Nathan Lewis

Now Europe’s leaders say they want “austerity with growth.” Sounds nice. They have no clue as to how to achieve it.

Back in 2008, I said that the typical response of mediocre governments to the economic problems would be a combination of “austerity” and “stimulus.”  They actually use exactly those words. They can’t even manage to make up some new words, for generation after generation.

I didn’t expect things to follow this blueprint quite so exactly.

Governments find that they bounce back and forth between these “austerity” and “stimulus” strategies, discovering that they are both unsuccessful.

What tends to happen is that “stimulus” means more government spending. Soon, people discover that this “stimulus” spending tends to be directed to abject waste and crony capitalists, and the government’s debt burden explodes. Thus, the political system careens back toward “austerity.”

“Austerity” usually means less spending and higher taxes. The higher taxes are implemented, but it is soon discovered that nobody wants to reduce spending, especially when the economy is crumbling due to the higher taxes. What small reductions in spending there are tend to be directed toward genuinely beneficial services, while the waste, graft and crony capitalist payoffs continue unabated. The sagging economy leads to shortfalls in tax revenues, and the deficit may even expand.

Minority America

How do I fit in?

by Joel Kotkin

Recent news from the Census Bureau that a “minority” majority might be a reality somewhat sooner than expected --- 2042 instead of 2050 --- may lead to many misapprehensions, if not in the media, certainly in the private spaces of Americans.

For some on the multicultural left, there exists the prospect of America firmly tilting towards a kind of third world politics, rejecting much of the country’s historical and constitutional legacy. Some left-leaning futurists, like Warren Wagar envision a nation of people fundamentally torn by “racial conflict.” By mid-century, Wagar sees an America suffering from a “gigantic internal struggle” that will eventually lead to its ultimate decline.

The xenophobic right, probably much larger but no less deluded, sees the similar potential for mischief, where American values are undermined by what 19th century Nativists called “ a rising tide of color.” It is part of a scenario that the likes of Pat Buchanan and Samuel Huntington envision as the rise “revanchist sentiments” along the nation’s Southern border.

Merkel Rejects Debt Sharing as Obama Urges End to Crisis

"Precious time was used to spend too much money in consumption and too little time in tackling reforms"

By Brian Parkin and Ben Sills

German Chancellor Angela Merkel hardened her opposition to joint debt sharing in the euro region as President Barack Obama singled out Europe’s leaders for not doing enough to arrest the financial crisis.

With Europe’s debt crisis cited last week for canceled IPOs, weaker-than-expected Chinese manufacturing figures and a rise in the U.S. jobless rate, Merkel rejected joint debt issuance in the 17-nation euro area as a solution, saying “under no circumstances” would she agree to Germany-backed euro bonds.

Now, some “come along and ask for euro bonds, saying all we need are equal interest rates and everything will turn out all right,” Merkel said in a speech to members of her Christian Democratic Union in Berlin yesterday. Instead, what’s needed is an economic overhaul to tackle the lack of competitiveness in Europe, she said.

Merkel, the head of Europe’s biggest economy and the largest contributor to bailouts for Greece, Portugal and Ireland, is the pivotal player in efforts to resolve the crisis now in its third year. As Spain struggles to avoid becoming the next country to call for a rescue and the euro slides near a three-year low against the dollar, Obama added to pressure from the European Central Bank, France and Italy to do more to halt the spread of contagion.

European ‘Cloud’

Obama, speaking at a Chicago fundraiser on June 1 as he bids for re-election in November, said that a report showing the slowest month of U.S. employment growth in a year was in large part “attributable to Europe and the cloud that’s coming over from the Atlantic.” The “whole world economy has been weakened by it,” he said.

No one wants to actually balance the budget. Ever

Prudent Fiscal Policy And Political Suicide 

By Wolf Richter

French President François Hollande cobbled together his government yesterday, appointing no less than 34 ministers (of whom 16 are ministers of state). Exactly half of them are women, for the first time in the macho French political world. During their first working session, they, including the President, gave themselves a 30% cut in pay, implementing not only item number 47 on the 60-point agenda but also Hollande’s campaign promise (Nicolas Sarkozy raised his own salary by 172% after he’d arrived in 2007, which the French never forgave him). And barely appointed Minister of Economy, Finance, and Trade, Pierre Moscovici surprised the world: “A country that indebts itself is a country that impoverishes itself,” he said and proclaimed that the government would the deficit because “public debt is an enemy for the country.”

Powerful words. Though they may drown in Socialist Party priorities, they have nevertheless been spoken, and they're reasonable and refreshing. What a difference from what we’re getting dished up in the America.

President Barack Obama and House Speaker John Boehner met over sandwiches yesterday to discuss what to do about the deficit, if anything, while the national debt ticked higher, passing in its inexorable manner $15.716 trillion. But instead of even worrying about it, the President and the Speaker performed a charade of election machinations and grandstanding. The Speaker demanded some cuts in social programs and excluded raising taxes. To show how serious he was, he threatened to block extending the debt ceiling, set at $16.394 trillion to be reached later this year. If he sticks to his threat, it would send the US into default once the Treasury runs out of wiggle room. And the President pushed his own proposals to increase spending on some jobs initiatives. Must have been a fun lunch.