Beppe Grillo: Italy's new Mussolini

Beppe Grillo has much in common with Mussolini

By Nicholas Farrell 

The stand-up comedian Beppe Grillo, like the fascist dictator Benito Mussolini before him, has a craving to take over the piazza and mesmerise the crowd. Where once young Italians chanted the mantra ‘Du-ce! Du-ce!’ now they chant  ‘Bep-pe! Bep-pe!’. But it is not just a shared need to rant and rave at large numbers of complete strangers that hirsute Beppe and bald Benito have in common. Worryingly, for Italy and also for Europe (where democracy seems incapable of solving the existential crisis), there is a lot more to it than that.

Beppe Grillo founded the MoVimento 5 Stelle (M5S) in Milan on 4 October 2009. The capital ‘V’ stands for his signature slogan ‘Vaffa!’ which roughly speaking means ‘Fuck off!’ — in his case, to everything more or less, except wind farms. ‘Surrender! You’re surrounded!’ he bellowed over and over again at his rallies. The phrase was traditionally very popular with Italian fascists. He was referring to all Italy’s politicians, except his lot.

Now, less than four years after its foundation, his movement is the largest single party in the Chamber of Deputies, the lower house, after it secured 26 per cent of the poll at this week’s inconclusive Italian general elections. It is not, insists this fascist of the forest, a party. It is a movement. Parties, he is adamant, are the problem, not the solution.

Mussolini founded his Fasci di Combattimento in Milan on 23 March 1919 and less than four years later he was prime minister. Fascism was not, he insisted, a party but a movement. Parties, he was adamant, were the problem, not the solution. Fascism would be an ‘anti-party’ of free spirits who refused to be tied down by the straitjacket of parties with their dogmas and doctrines. This is precisely what Grillo says about his own movement.

Mussolini was the rising star in Italy’s Marxist party until his expulsion in 1914 because he — like the French and German Marxists but unlike the Italian ones — was in favour of Italian intervention in the first world war. He looked destined for the scrapheap.

Grillo, a former communist, was banned from national television in the late 1980s as a result of his defamatory performances. Things did not look rosy for him either. Forced to perform in piazzas and theatres, he took to ridiculing and demonising politicians, and then in 2005 he founded a blog that quickly became the most popular in Italy and a forum for the angry and the disaffected, mostly young, for all those whose state of mind is defined by the word ‘Vaffa!’. He duly began a national ‘Vaffa! Day’ or ‘V Day’ in 2007.

Shortly before he founded his movement, he tried to become leader of Italy’s main left-wing party — the ex-communist Partito democratico (PD) — but it would not let him stand in its leadership elections. At this week’s elections, the PD’s coalition was a winner of sorts with a majority of the seats in the lower house, thanks to the latest Italian electoral law that gives the majority of seats to the party with the most votes, however few. The PD’s coalition polled just 29.6 per cent of the vote compared with the 29.1 per cent of Silvio Berlusconi’s centre-right coalition. But despite that, the PD grouping gets 340 seats to his 121. In the senate, though, where different rules apply, no one has a majority.

The Keynesian Depression

A Premonition From a Halcyon Era

By Scott Minerd

In 1968, America was literally over the moon. Apollo 7 had just made the first manned lunar orbit and the nation would soon witness Neil Armstrong’s moonwalk. The United States was winning the war in Southeast Asia and the Great Society was on the verge of eliminating poverty. I remember my father taking me to the Buick dealership that summer in Connellsville, Pennsylvania, where he bought a 1969 Electra. As we drove home I asked him why we had bought the 1969 model when we had the 1968 one, which seemed equally good.

“That’s just what you do now,” my father said, “Every year you go and get a new car.” “Wouldn’t it be better,” I asked as a precocious nine year-old, “if we saved our money in case a depression happened?” I will never forget my father’s reply: “Son, the next depression will be completely different from the one that I knew as a boy. In that depression, virtually nobody had any money so if you had even a little, you could buy nearly anything. In the next depression, everyone will have plenty of money but it won’t buy much of anything.” Little did I realize, then, how prescient my father would prove to be.

Five years have passed since the beginning of the Great Recession. Growth is slow, joblessness is elevated, and the knock-on effects continue to drag down the global economy. The panic in financial markets in 2008 that caused a systemic crisis and a sharp fall in asset values still weighs on markets around the world. The primary difference between today and the 1930s, when the U.S. experienced its last systemic crisis, has been the response by policymakers. Having the benefit of hindsight, policymakers acted swiftly to avoid the mistakes of the Great Depression by applying Keynesian solutions. Today, I believe we are in the midst of the Keynesian Depression that my father predicted. Like the last depression, we are likely to live with the unintended consequences of the policy response for years to come.

This Depression is Brought to You By...

John Maynard Keynes (1883—1946) was a British economist and the chief architect of contemporary macroeconomic theory. In the 1930s, he overturned classical economics with his monumental General Theory of Employment, Interest and Money, a book that, among other things, sought to explain the Great Depression and made prescriptions on how to escape it and avoid future economic catastrophes. Lord Keynes, a Cambridge- educated statistician by training, held various cabinet positions in the British government, was the U.K.’s representative at the 1944 Bretton Woods conference and, along with Milton Friedman, is recognized as the most influential economic thinker of the 20th century.

Keynes believed that classical economic theory, which focused on the long-run was a misleading guide for policymakers. He famously quipped that, “in the long run we’re all dead.” His view was that aggregate demand, not the classical theory of supply and demand, determines economic output. He also believed that governments could positively intervene in markets and use deficit spending to smooth out business cycles, thereby lessening the pain of economic contractions. Keynes called this “priming the pump.”

On Your Mark, Get Set, Spend

Since the Second World War, policymakers concerned with both fiscal and monetary policy have opportunistically followed certain Keynesian principles, particularly using government spending as a stabilizer during periods of economic contraction. In 1968, steady economic growth and low inflation had led optimists to declare that the business cycle was dead. When President Nixon ended gold convertibility of the dollar in 1971 he justified it by declaring that he was a Keynesian. Even Milton Friedman, founder of the monetary school of economics, told Time magazine that from a methodological standpoint, “We’re all Keynesians now.”

The euro crisis is back

Europe's Reality Check

By Robert Samuelson

The euro crisis is back. Actually, it never left. But there was an extended period, beginning last summer, when Europe's political, business and media elites convinced themselves the worst had passed. The European Central Bank (ECB) -- Europe's Federal Reserve -- had tranquilized jittery bond markets. Italy and Spain, the two countries that might trigger a new crisis, would be able to borrow at reasonable interest rates, because the ECB had pledged to act as a lender of last resort. Though debtor nations still faced hard times, matters were slowly mending. So it was said.

No more. Italy's latest election quashes this optimism. The outcome seems a mix of absurdity and anarchy. One new political party, headed by a professional comedian named Beppe Grillo, received 26 percent of the vote. The business tycoon and former prime minister, Silvio Berlusconi, repeatedly pronounced politically dead, rose from the grave and almost won. Between Berlusconi's center-right coalition and Pier Luigi Bersani's center-left group (victor in the popular vote), there are major policy disagreements and, therefore, not much foundation for forming a government with a parliamentary majority.

But Italians did send a message. "The election wasn't just anti-austerity. It was also anti-German," says David Smick, editor of The International Economy magazine. "Berlusconi's rhetoric was very anti-German. In Italian politics now, it's dangerous to appear being the lapdog of [German Chancellor] Angela Merkel." In one dazzling stroke, Italian voters rejected both Europe's main response to high government debt -- cut spending, raise taxes -- and the policy's most powerful architect, Germany's Merkel. If Italy needs to be bailed out, the negotiations already look tortuous.

The resentment of austerity is no mystery. The Italian economy has contracted for six consecutive quarters; it is now 7.8 percent below its peak in the third quarter of 2007, reports economist Martin Schwerdtfeger of TD Economics. In 2013, the economy will shrink another 1 percent, he forecasts. Unemployment in December was 11.2 percent, up from 2007's 6.1 percent (annual average). This, too, will probably worsen in 2013. The point: Italians haven't gotten much return on their austerity.

The Pension Fund That Ate California

CalPERS’s corruption, insider dealing, and politicized investments have overwhelmed taxpayers with debt

by Steven Malanga

After spending years dogged by unpaid debts, California labor leader Charles Valdes filed for bankruptcy in the 1990s—twice. At the same time, he held one of the most influential positions in the American financial system: chair of the investment committee for the California Public Employees’ Retirement System, or CalPERS, the nation’s largest pension fund for government workers. Valdes left the board in 2010 and now faces scrutiny for accepting gifts from another former board member, Alfred Villalobos—who, the state alleges, spent tens of thousands of dollars trying to influence how the fund invested its assets. Questioned by investigators about his dealings with Villalobos, Valdes invoked the Fifth Amendment 126 times.

California taxpayers help fund CalPERS’s pensions and ultimately guarantee them, so they might wonder: How could a financially troubled former union leader occupy such a powerful position at the giant retirement system, which manages roughly $230 billion in assets? The answer lies in CalPERS’s three-decade-long transformation from a prudently managed steward of workers’ pensions into a highly politicized advocate for special interests. Unlike most government pension funds, CalPERS has become an outright lobbyist for higher member benefits, including a huge pension increase that is now consuming California state and local budgets. CalPERS’s members, who elect representatives to the fund’s board of directors, ignored concerns over Valdes’s suitability because they liked how he fought for those plusher benefits.

CalPERS has also steered billions of dollars into politically connected firms. And it has ventured into “socially responsible” investment strategies, making bad bets that have lost hundreds of millions of dollars. Such dubious practices have piled up a crushing amount of pension debt, which California residents—and their children—will somehow have to repay.

When California’s government-employee pension system was established in 1932, it was a model of restraint. Private-sector pensions were still rare back then, but California lawmakers had a particular reason for wanting a public-sector pension system: without one, unproductive older workers had an incentive to stay on the job and just “go through the motions” to get a paycheck, as a 1929 state commission put it. Pensions would encourage those workers to retire. The commission cautioned, however, against setting a retirement age so low that it would “encourage or permit the granting of any retirement allowance to an able-bodied person in middle life.”

The hero of Watergate becomes a Beltway villain

Woodward’s Apostasy

By HARRY STEIN

Bob Woodward’s charge that he was threatened by a high-ranking Obama administration official after publishing a column critical of the White House was, it turns out, at least somewhat exaggerated. But it’s no accident that the media has chosen to focus on Woodward’s characterization of his exchange with White House economic director Gene Sperling, while all but ignoring the essence of the column that touched off the brouhaha in the first place: that Obama’s claims about Republican responsibility for the looming sequester were false, and that it was “months of White House dissembling” that had “eroded any semblance of trust between Obama and congressional Republicans.”

Indeed, the media treatment of the episode provides an all-too-telling glimpse into the administration’s relationship with the press. It hardly bears repeating that from the start of Barack Obama’s career on the national stage, he has enjoyed an unprecedented kinship with the media—one that, as frustrated opponents rightly observe, often seems indistinguishable from outright alliance. On contentious issues like those involving the budget, especially, the administration has been hugely dependent on a compliant press—not only to shore up public support for its ongoing campaign of class warfare, but also to marginalize competing arguments.

So overt has the media cheerleading been on the president’s behalf that few have noted the potential pitfalls that the arrangement holds for both sides. By now, the media are so all-in with Obama that they cannot call his credibility into question, even when the facts demand it. By the same token, so reliant is Obama on the lapdog media that he is uniquely vulnerable to what might be called Emperor’s New Clothes Syndrome: any meaningful breach in the code of silence and the whole damn thing could come crashing down.

Enter Bob Woodward. For weeks, coverage of the looming sequester had been going precisely the way the administration intended. Indeed, the media’s handling of this difficult and complicated story is a reminder of why, notwithstanding four-plus years of bungling, the president has paid no political price for the stalled economy. Though frustrated Republicans believed that they had both math and logic on their side—the mandated cuts amounted to less than 2 percent of a $4 trillion budget, and federal spending would remain massively higher than when Obama took office—the White House–generated scare stories appeared day after day. In short order, we heard, there would be four-hour waits at airports; draconian cuts to special education; a gutting of mental-health services; a military unable to react to the Iranian mullahs’ saber-rattling. Here in southern Arizona, where I live, local news reports have been rife with tales of released illegals running amok.

Then out of nowhere came Woodward—the iconic co-hero of Watergate, a man who convinced many of today’s media stars to enter the biz in the first place—declaring in his February 22 column that it was all a crock. Not only was the sequester legislation Obama’s own creation, and not Congress’s, as he’d had been everywhere proclaiming; the president also had great discretionary power to determine which cuts would be made. Moreover, in insisting on new taxes not required in the legislation, the president, whom the media portray as fair-minded and reasonable, was “moving the goal posts.”

I Want Mo'

Mo’ Debt, Mo’ Problems (Mo’ Keynesian Cynicism)

By Gonzalo Lira

Christ, is Matt Yglesias stupid. Stupid or high, or maybe he’s just a cynical bastard—I really can’t make up my mind. 

He just wrote a piece in Slate proposing that the U.S. government go into even more debt, ballooning the Federal debt to even higher levels than the “mere” 120% of GDP it currently is.

His “reasoning”? To take advantage of the lower interest rates currently prevalent in the bond markets.

Prima facie, Yglesias sounds reasonable. As he rightly points out, 

[T]he inflation-adjusted yield on 10-year Treasury bonds was negative 0.56 percent. Savers, in other words, want to pay the American government for the privilege of safeguarding their money. For the longest-dated bonds we sell, the 30-year Treasury bond, rates were 0.51 percent. That’s higher than zero, but far below the long-term average economic growth level. [emphasis in the original]

All good up to this point.

But then in the very next breath—I mean, literally the very next line—he writes something of startling imbecility: 

A sensible country would be taking advantage of that fact [of record-low interest rates] to finance some valuable public undertakings. Alternatively, if we think there’s nothing worth spending money on we could enact a big temporary tax cut aimed at reducing the unemployment rate and boosting the population’s skill level. [. . .] Another way of looking at it is that global financial markets are sending a clear signal to the United States. At a time when demand for goods and services is depressed, demand for American government debt is sky-high. The responsible choice is to let the supply meet the demand and borrow more. [emphasis in the original]

Right. Clever, even: To fix the situation of over indebtedness, just borrow more.

This thinking reveals the key blindness of Yglesias and other Keynesians: They completely misunderstand the economic moment the world is living in—and are thus oblivious to the rationale and the consequences of the policy decisions that have been taken up to now.

Let me take a step back and explain.

The reason that the global economy is in the sorry state that it’s in today is because of overindebtedness that has grown like a cancer since 1987. That year, in response to the ’87 Crash, Alan Greespan instituted the famed “Greenspan Put” of low-interest rates to prop up the economy during every downturn.

War is Peace

After Invading Mali, Socialist French President Wins UN Peace Prize

by  Alex Newman

In an Orwellian move that has already been widely criticized and ridiculed by analysts across the political spectrum, the United Nations announced February 21 that Socialist French President François Hollande (pictured) would be awarded a UN “Peace Prize” for his government’s invasion of Mali to support a military coup-installed regime battling separatist rebels. Human rights groups say the controversial international military intervention, led by Hollande in France but heavily supported by the UN and Obama, has already resulted in civilian massacres and possibly war crimes. 
The largely discredited international prize, awarded by the UN Educational, Scientific and Cultural Organization (UNESCO), was offered to Hollande for his alleged “valuable contribution to peace and stability in Africa.” That “contribution,” of course, was the French government’s bloody military campaign that began earlier this year in defense of the illegitimate regime ruling parts of Mali out of the capital city of Bamako. Unlike Obama’s Nobel Peace Prize, however — awarded before he escalated and began multiple unconstitutional wars — Hollande earned his award only after starting a war for “peace.”  
The armed intervention in Mali — justified under the guise of fighting “Islamic extremism,” defending “democracy,” and enforcing UN decrees — included aerial bombings of rebel targets and thousands of French troops deployed on the ground. As The New American has documented, however, even as Hollande claims to be waging a war on terror in Mali, his government has been among the most vocal supporters of brutal Islamic jihad in Syria targeting the secular dictatorship of Bashir al-Assad.     
Considering the UNESCO jury that awarded the prize, though, analysts were not surprised that it went to a socialist now described by critics even on the hard left as a warmonger and even a war criminal. In typical UN fashion, the chairman of the global organization’s “Félix Houphouët-Boigny Peace Prize” jury was former Mozambique President Joaquim Chissano — a founding member of the Marxist terror group-turned ruling Communist political party known as the Mozambique Liberation Front (FRELIMO).
“After analyzing the global situation, it is Africa that held the attention of the jury with the various threats affecting the continent,” Chissano said in a statement released by the UN after the jury’s meeting in Paris. “Having assessed the dangers and the repercussions of the situation on Africa, and on Mali in particular, as well as on the rest of the world, the jury appreciated the solidarity shown by France to the peoples of Africa.”

Minimum Intellingence

Thai Bankruptcies Rise as Minimum Wage Rolls Out

By Suttinee Yuvejwattana & Sharon Chen

Confederate International Co., a Thai family-owned maker of nightwear, lost a German customer of 22 years after last month’s minimum-wage increase in the Southeast Asian nation raised costs.

“They stopped talking to us, even though we have done business together for a long time,” said Veerayuth Sookhattako, 57, owner of the Chiang Mai-based company that ships about 80 million baht ($2.7 million) of apparel to Germany and France each year. “I established this company 28 years ago. I don’t want to let it go, but I may need to close down our business by the end of the year if we can’t get new orders.”

Veerayuth isn’t alone. Last quarter, 7,221 Thai companies closed down, 27 percent higher than in the same period a year earlier, when the worst floods in 70 years swamped most of the country. The figure is also more than double the average of 3,000 in the previous nine years, according to data from theNational Economic & Social Development Board.

Prime Minister Yingluck Shinawatra’s government raised the daily minimum wage to 300 baht throughout the country last month, after a similar increase in April in seven provinces including Bangkok. Before the increase, minimum wages ranged from 159 baht in northern Phayao province to 221 baht in Phuket, according to the Labour Protection and Welfare Department.

Government stimulus measures, including the wage rise and increased payments to farmers, come as the country’s manufacturers struggle with a stronger baht and slowing export demand amid a global slowdown.

Baht Strength

“The problem with the Thai minimum-wage hike is there might be competitiveness issues because this will lead to high costs for firms and if there’s no way to offset these costs, it translates into higher inflation for consumers,” said Eugene Leow, a Singapore-based economist at DBS Group Holdings Ltd. “There’s also some concern about how strong the Thai baht is.”

The baht is the biggest gainer this year among 11 widely- traded Asian currencies tracked by Bloomberg. The Bank of Thailand held the benchmark rate for a third straight meeting this month even after Finance Minister Kittiratt Na-Ranong renewed calls for lower borrowing costs to discourage inflows that boosted the baht to a 17-month high in January.

Wages in Asia almost doubled between 2000 and 2011, according to the International Labor Organization, and workers from China to Indonesia have pushed for more pay in recent years to counter rising living expenses. The increases will permanently increase business costs, forcing companies to boost prices, according to a report from HSBC Holdings Plc.

The End of China?

A crisis of legitimacy as the nation's young people and business elite question communist rule

By PATRICK J. BUCHANAN

“Why did the Soviet Union disintegrate? Why did the Soviet Communist Party collapse? An important reason was that their ideals and convictions wavered,” China’s new leader, Xi Jinping, told a closed meeting of party elite in Guangdong province.

“Finally all it took was one quiet word from Gorbachev to declare the dissolution of the Soviet Communist Party, and a great party was gone,” said Xi, according to notes obtained by the New York Times.

“Everyone is talking about reform, but in fact everyone has a fear of reform,” said Chinese historian Ma Jong. “The question is: Can society be kept under control while you go forward? That is the test.”
That is indeed the test.
What is it that gives a party its legitimacy, its right to rule? What holds a nation together when its cradle faith, its founding ideology, has been abandoned by both elites and the people? That is China’s coming crisis.
With victory in the civil war with the Nationalists in 1949, Mao claimed to have liberated China from both Japanese imperialists and Western colonialists, and restored her dignity. “China has stood up!” he said.

Moscow casts wide net in Mediterranean

Interests are permanent and all else is ephemeral and negotiable

By M K Bhadrakumar 
There was a bygone era that ended a little over four years ago when it used to be said that the Kremlin used energy as a "geopolitical tool". The threat perception propagated by cold warriors in the United States principally aimed at cautioning Europe against its rising energy dependency on Russian supplies.
Moscow was credited with the capacity to influence Western European policies with a hidden agenda to sabotage the trans-Atlantic partnership. 
Meanwhile, unnoticed or unspoken, the geopolitics of energy has been transforming. The president in the White House, Barack Obama, has not wasted his breath over the Caspian energy content below rivalries. He has no special romance with Big Oil, unlike his predecessor in the Oval Office.
Ambassador Richard Morningstar, the United States special envoy on the Caspian, has quietly left the center stage and the "market" is slowly taking over. If Europe's energy business with Russia holds uncertain prospects today, it is more due to economic reasons than a messianic drive to diversify its sources of imports. 
The Bill Clinton era in the geopolitics of Caspian energy, which ran through the George W Bush presidency, imbued with a great sense of rivalry over Russia's status as an energy powerhouse, is giving way. That is one of the messages to be pulled out from the announcement on Tuesday in Moscow that a subsidiary of the Russian energy giant Gazprom has signed a 20-year deal with Levant LNG Marketing Corp. for Israel's Tamar offshore gas field in the Mediterranean. 
Russia looks east 
Without doubt, the Tamar deal rewrites the ABC of the geopolitics of energy security. But, first of all, what are the facts on the ground? 
Tamar is one of two large offshore gas fields in Israel off the coast of the port city of Haifa - the other one being Leviathan. The Tamar gas field reserves are estimated at around 270 billion cubic meters (while the potential of the Leviathan is estimated at around 450 bcm.) 
The Tamar floating LNG project (FLNG), which is expected to be commissioned in 2017, is one of the first of its kind anywhere in the world and would liquefy gas from Israel's Tamar and smaller Dalit fields at a floating liquefaction vessel at rate of 3 million tons per annum, which equated to 84 bcm of gas over the 20-year period of Gazprom's deal, roughly 30% of Tamar's estimated reserves. 
The deal envisages that Gazprom will provide financial support to develop the FLNG project by way of an equity investment or financing, which is expected to be significant. 

It's Only a Joke. Seriously.

Government-by-fake-disaster-movie

By mark steyn

A few weeks ago, Ann Coulter announced that she was bored of American politics and spending her days watching Turner Classic Movies. I confess that, when it comes to Beltway melodrama, I, too, am fighting vainly the old ennui, and minded to plump up the pillows and settle back with a bucket of bonbons and a beribboned Shih-tzu for an all-night Norma Shearer marathon. At least, unlike Washington, there's a chance you may catch something you haven't already seen a hundred times before. For example, I've a yen to see "Roberta" (RKO, 1935), in which Irene Dunne sings:

"Yesterdays

Yesterdays

Days I knew as happy sweet sequester'd days..."

I believe that was the last known use of this blameless and mellifluous word until it was conscripted by the political class for this month's dreary Mayan Apocalypse of the Month thrill ride. Say what you like about those Mayan guys, but they only schedule an apocalypse once every 5,126 years. Only Washington would try to pull it off every six weeks. If I understand correctly, by the time you read this, the planes will be dropping from the skies; the drip-feeds in every emergency room will be dry; every creature on the endangered species list will have broken free from our pristine federally manned national parks to be left for roadkill in the potholed asphalt of America's crumbling interstates; you'll turn on your bathroom faucet only to find the town reservoir choked with fecal coliform; the ebola virus will be rampant across Ohio, Florida, New Hampshire and other swing states, where it will nevertheless enjoy higher approval ratings than Marco Rubio and every other prospective GOP nominee. The sequester supposedly cuts $44 billion from the federal budget – or from the rate of growth of the federal budget. Whatever. $44 billion is about what the United States government borrows every nine days, so it's not a lot. But it's apparently responsible for everything that matters in American life.

That being so, maybe it would be easier to reinstate this critical $44 billion and cut the other $3.8 trillion, which is apparently responsible for nothing other than Harry Reid's beloved federally funded cowboy poetry festival and the cost of the dress uniforms for the military detachment accompanying the First Lady at her Oscars appearance. Congresswoman Maxine Waters, ranking Democrat on the Financial Services Committee, warned of "over 170 million jobs that could be lost" thanks to the sequester.

The biggest growth opportunity in the history of capitalism’

Consumption in emerging markets to swell to US$30-trillion by 2025

By Lisa Mahapatra

According to a new report from McKinsey & Company, the miracle growth story of the emerging markets is far from over.

By 2025, consumers in emerging markets will spend US$30-trillion annually, which will be “the biggest growth opportunity in the history of capitalism,” according to the report.

For centuries, the percentage of people in the world with discretionary income (consumers) was dramatically smaller than the percentage of people who had just about enough for necessities or less.

But since the industrial revolution, the percentage of consumers has been rising.  And some of the biggest growth will happen between now and 2025 thanks to the emerging markets.

This chart that shows how much the consumer class will grow in developed and emerging markets:

The New Fascism

Top U.S. Scientists Call for Draconian UN Social Engineering

by  Alex Newman

A controversial peer-reviewed paper set to be published next month, authored by a dozen prominent scientists and other experts, is coming under heavy criticism, primarily for calling on policymakers to adopt draconian measures to change social norms and values through coercion — essentially mass social engineering under the guise of environmentalism, whether the public wants it or not. The dubious plan outlined by the academics, however, is already being blasted by analysts as a scheme to erect an “eco-dictatorship under United Nations rule.”    

Indeed, a draft version of the paper, scheduled to be published in the March 2013 edition of the American Institute of Biological Sciences’ journal BioScience, openly calls for defying public opinion and restructuring society under the guidance of UN “teams.” Entitled “Social Norms and Global Environmental Challenges: The Complex Interaction of Behaviors, Values, and Policy,” the controversial document is uncharacteristically honest in outlining its wild recommendations to transform human civilization.  

“Substantial numbers of people will have to alter their existing behaviors to address this new class of global environmental problems,” claim the authors, who include Nobel Prize winners and even the infamous but largely discredited biologist and “population bomb” alarmist Paul Ehrlich (shown above). “Alternative approaches are needed when education and persuasion alone are insufficient.”

In simpler terms, the self-styled arbiters of proper environmental stewardship and human values are seeking to use the force of government — without the consent of the governed, if need be — to radically change people’s thoughts and behavior. If taxpayer-funded propaganda and brainwashing fail to convince enough of the public to submit, coercion in the form of new rules, regulations, fines, and other policies will be needed, the authors claim. 

“Policy instruments such as penalties, regulations, and incentives may therefore be required to achieve significant behavior modification,” the paper claims matter-of-factly. In a table included within the document, some potential examples of the envisioned “policy instruments” are outlined, starting from taxpayer-funded propaganda — “active norms management: advertising, information, appeals,” as the authors put it — and moving on through taxes, fines, subsidies, and other “financial interventions.”

Finally, at the bottom of the table: laws and regulations demanding obedience at the barrel of a government gun. “Effective policies, then, are ones that induce both short-term changes in behavior and longer-term changes in social norms,” the paper continues, offering some examples of successful and failed efforts to transform human behavior and values using the coercive force of government. “Government is uniquely obligated to locate the common good and formulate its policies accordingly.”

Much of the document is devoted to strategies on changing people’s behavior to suit the pseudo-environmentalist goals of its authors. While it acknowledges that coercion can sometime backfire — noting that forces within the non-coercive sector would also have to participate in the effort if it is to succeed — the brute force of the state is viewed as a key tool in achieving the radical social changes envisioned.

“Governments can alter people’s behaviors by changing the conditions (often called choice architecture) influencing those behaviors,” the paper explains, again citing an array of examples and studies about how to alter the way people think and behave, oftentimes subtly. “Governments can also change the architecture governing behaviors by making them more visible.” 

The price is too high

The Luddites Among Us

by Gary North 

Certain economic ideas that are both logically wrong and unsupported by historical facts, and which have been known to be wrong for 250 years, are still widely held. This annoys economists.

There is something that seems inherent in men’s approach to thinking about their own wealth that persuades them that what they have seen, over and over, in nation after nation, either did not happen, or, if it clearly did happen, will not continue.

One of these ideas is that sales taxes on imported goods increase the wealth of most people in society. This is the doctrine that tariffs and quotas imposed by the government somehow make people richer. This error was refuted definitively by one of the greatest philosophers of all time, David Hume, in 1752. About 25 years later, it was refuted in detail by Adam Smith, David Hume’s friend, in his classic book, The Wealth of Nations. Nevertheless, despite almost universal agreement among economists, and despite repeated political successes in lowering tariffs and quotas, which have led to increasing prosperity everywhere, there is still a hard core of anti-economics thinking that says that the federal government — but never state and local governments — needs to increase sales taxes on imported goods, or else we will all be made poor.

I have written many times about this over the last 45 years, and I intend to write a lot more, but I have no illusion that the anti-economists among us will never figure out that national sales taxes on imports do not make us richer. Some people simply do not have the intellectual capability of following a line of economic reasoning. This includes people who believe that sales taxes on imported goods make most people wealthier.

THE LUDDITE MENTALITY

There is another error, comparable to the error of the pro-sales tax non-economists, which is also widely held. This is the belief that machinery makes workers poorer. It is usually described as the Luddite philosophy. A man named Ned Ludd (or Lud) supposedly broke knitting machines in a fit of rage in 1779. In 1811, an article on Ludd was published in a newspaper. When people then began destroying machinery, they were called Luddites.

Three Stooges and a Clown

Italy on Financial Brink as “Former” Communist Tries to Lead

by  William F. Jasper

While much of world attention has focused, understandably, on Pope Benedict XVI’s February 11 resignation announcement, another resignation and election in Italy are at the center of global financial concerns. When Italian Prime Minister Mario Monti (shown) resigned in December 2012, he set in motion the process for general elections, which took place February 24-25. The results of the election have been indecisive, to say the least, with no party gaining a majority in the parliament, and no candidate for prime minister commanding a clear mandate. Pier Luigi Bersani, the ex-Communist Party leader who now heads the Democratic Party, scored a narrow victory in the Chamber of Deputies, the lower house of Parliament, but was unable to come up with a majority in the upper house, the Senate. Bersani is now scrambling to fashion a workable coalition with opponents. Unless and until he does that, Italy, the eurozone’s third largest economy and the world’s eighth largest economy, is faced with a “hung parliament,” without a prime minister and without a government. 

Nouriel Roubini, the New York University economist known as "Dr. Doom," said the election results “make Italy ungovernable. It is political, economic and financial chaos.” He is not alone in that assessment; many predict that Bersani will be unable to pull together a workable coalition and that Italian voters will have to go back to the polls again within six months.Bersani’s Democratic Party/Italy Common Good leftist coalition took 29.5 percent of the national vote. The People of Freedom coalition led by billionaire media mogul and three-time prime minister Silvio Berlusconi, claimed 29.1 percent of the vote. The wild card that upset all expectations is the populist, anti-establishment Five Star Movement, a recent phenomenon launched by comedian Beppe Grillo, who struck a chord with millions of Italian voters by attacking and exposing the corruption in both the Berlusconi and Monti governments. Grillo’s Five Star Movement took 25.5 percent of the vote. Mario Monti’s outgoing Civic Choice coalition won the support of only 10.5 percent of voters.

Grillo has said his party would not back a confidence vote on a new government formed by any of the mainstream parties. He has called for new elections, which he may expect would bring even more voters to his banner. Having already exceeded the expectations of most analysts, and with disgust among Italian voters for the corruption and scandals of the current parties, it’s likely that Grillo’s vote tallies would swell in a rematch. 

Kremlin’s Hand in Italy’s Politics

What has gone virtually unmentioned in coverage and analysis of the Italian elections is the win-win-win situation for Putin with the Bersani/Berlusconi/Monti lineup; the only unknown in this respect is Grillo. 

Pier Luigi Bersani’s past history as a Communist Party leader has been passed off by media pundits as nothing to be concerned about, which is a strange nonchalance considering the extensive information concerning critical infiltration of the Italian government by the Soviet KGB/Russian FSB over many decades, as exposed by the Mitrokhin Commission, KGB/FSB defector Alexander Litvinenko, and others. The Kremlin strategists targeted Italy as a top priority not only because of its economic prominence and its key roles in the EU and NATO, but also, of course, because it is home to the Vatican and the Holy See. As the headquarters of the worldwide, billion-plus-member Roman Catholic Church, the Vatican has long been a top target of KGB intrigue (see here, here, and here). 

Sinking deeper into the abyss of fear, division and red ink

Obama’s False Alarms

by Andrew P. Napolitano

In an effort to remove the hot-potato issue of excessive government spending from the 2012 presidential campaign, and calling the bluff of congressional Republicans who always seem to favor domestic spending cuts but increased military spending, President Obama suggested the concept of "sequester" in late 2011.

His idea was to reduce the rate of increased spending by 2 percent across the board – on domestic and military spending. To his surprise, the Republicans went along with this. They did so either because they lacked the political fortitude and the political will to designate specifically the unconstitutional and pork barrel federal spending projects to be cut, or because they thought that with the debt of the federal government then approaching $15 trillion (it is now $16.6 trillion and growing), any reductions in spending money the government doesn’t have are preferred to no reductions. So, instead of enacting a budget, and instead of recognizing that much of its spending is simply not authorized by the Constitution, Congress enacted the so-called sequester legislation, and the president signed it into law.

The reductions the sequesters require are reductions in the rate of increased spending from those originally planned by Obama and authorized by Congress. Since the federal government has not had a budget in four years, even though federal law requires it to have one every year, these are planned expenditures, not budgetary items, on which the president wants to spend more money. Congress does not feel bound to obey the laws it has written; hence it has disregarded the legal requirement of a budget. Without a budget, the president has great leeway as to how to allocate funds within each department of the executive branch of the federal government.

Nevertheless, even if these sequesters do kick in, the feds will spend more in 2013 than they spent in 2012. That’s because the sequesters are not cuts to spending; rather, they are reductions in planned increases in spending. The reductions amount to about two cents for every planned dollar of increased spending for every federal department.

The question remains: What part of each federal department (Justice, Defense, Homeland Security, Agriculture, etc.) will suffer these reduced increases? Here is where this sequester experiment gets dicey.

The president – who once championed the idea of sequesters and even threatened to veto any congressional effort to dismantle them – now has decided he can’t live without that additional 2 percent to spend. So, he has gone about the country trying to scare the daylights out of people: Prisoners will be released from federal prisons, soldiers won’t have enough bullets in their weapons, we will need to endure five-hour waiting lines at the airports, Social Security checks will be late, and similar nonsense.

If the fears Obama predicts do come to pass, we will have only him to blame. Remember, the sequesters only cut planned increases in spending. Suppose the president planned to hire 100 more soldiers for the Army and agents for the TSA and air traffic controllers for the FAA. Is the president required to hire only 98 of them? Well, under the law, he has a choice. He can hire all 100 and cut back elsewhere, or he can make do on 98 percent of what he has determined are the government’s additional needs. But he cannot just intentionally release prisoners or weaken the military or inflict maddening delays on the flying public in order to make his fearful warnings come to pass.

His job is to uphold the Constitution, to make the executive branch of the federal government work. The president has taken an oath to "faithfully execute" his office. The words of the oath are prescribed in the Constitution. The word "faithfully" requires him to enforce the laws whether or not he agrees with them. It also requires him to enforce the laws in such a manner that they make sense – so that the federal government basically performs the services we have grown to expect of it.

I know, we have grown to expect more of the federal government than the Founders dreamed, and far more than we can possibly pay for, and infinitely more than the Constitution authorizes. But that’s the good thing about these sequesters: They will force the president to prioritize.

If he prioritizes so that we stay free and safe, so that the government does what we basically have paid it to do, he’ll be doing his job and saving us a tiny bit of cash. But if the president enforces the laws so that they hurt rather than work well just so he can say "I told you so" rather than "I’ll work with you," then he will be inviting his own political misery or even his own impeachment. And we will have sunk deeper into the abyss of fear, division and red ink that already engulfs us