The Islamic Emirate of Syriastan

Τhe next stage is set for a civil war, Syria-style, in Iraq

By Pepe Escobar 

And now some breaking news coming from the Islamic Emirate of Syriastan. This program is brought to you by the NATOGCC corporation. Please also tune in for a word from our individual sponsors, the United States government, Britain, France, Turkey, the House of Saud and the Emir of Qatar. 

It all started early this week, with a proclamation by the elusive leader of al-Qaeda Central, Ayman "The Doctor" al-Zawahiri, hidden somewhere in the Pakistani tribal areas; how come Double O Bama with his license to kill (list) and prime drone fleet cannot find him? 

Al-Zawahiri called for all the Islamist brigades in the Jihad Inc business fighting the government of Syrian President Bashar al- Assad to found an Islamic emirate, the passport du jour leading to an Islamic caliphate.

Two days later, the Islamic State of Iraq - for all practical purposes al-Qaeda in Iraq - announced, via a video starring its leader Abu Bakr al-Husseini al-Qurashi al-Baghdadi, a mergers and acquisition spectacular; from now on, it would be united with the Syrian jihadist group Jabhat al-Nusra, and be referred to as the Islamic State of Iraq and the Levant. 

But then, the next day, the head of Jabhat al-Nusra, the shady Abu Muhammad al-Joulani, said that yes, we do pledge our allegiance to al-Qaeda Sheikh, Doctor al-Zawahiri; but there has been no M&A business whatsoever with al-Qaeda in Iraq. 

Puzzled infidels from Washington to Beijing may be entitled to believe this is straight from Monty Python - but it's actually deadly serious; especially as the House of Saud, the Emir of Qatar, the neo-Ottoman Erdogan in Turkey and King Playstation from Jordan - vastly supported by Washington - continue to weaponize the Syrian "rebels" to Kingdom Come. And one of the top beneficiaries of this weaponizing orgy has been - who else - the M&A gang now known as the Islamic State of the Iraq and Levant.

Every grain of sand in the Syrian-Iraqi desert knows that the "rebels" who really matter in fighting terms in Syria are from Jabhat al-Nusra - hundreds of transnationals fond of beheading and suicide bombings. 

They control, for instance, a few important suburbs of Aleppo. They've perpetrated scores of kidnappings, torture and summary executions. Crucially, they killed a lot of civilians. And they want to impose no-compromise, hardcore Sharia law. No wonder middle-class, educated Syrians fear them more than anything lethal the government might resort to. 

Al-Baghdadi admitted the obvious: Syrian jihadis are an annex to Iraqi jihadis, from whom, crucially, they have been receiving on-the-ground battle experience. After all, it was these hardcore Iraqis who fought the Americans, especially from 2004 to 2007. The plum tomato in the kebab is that al-Nusra itself was founded by Sunni Syrians fighting alongside Sunni Iraqis in Iraq. 

Then there's what the House of Saud is up to. The Saudis are competing in a regional marathon against al-Qaeda to see who enrolls more Sunni fanatics to fight those apostate Iranians, both in Iraq and the northern Levant. The House of Saud loves any jihadi, local or transnational, as long as he does not raise hell inside Saudi Arabia.

The New Old Fascism?

Egan-Jones Downgrades Germany From A+ To A, Outlook Negative

by Stephen Green

Now that Europe’s decades-long experiment with socialism is unraveling, what keeps me up at night is when the people will get upset enough that they’ll start demanding (and getting) a little nationalism to go with their socialism. It’s kind of the national sport over there, once they eventually run out of other people’s money. Not that EU governments have given up looking under the sofa cushions, which they apparently also hope to use as floatation devices:

Senior advisers to Chancellor Angela Merkel are pushing for better-off households to pay towards the cost of any future bail-outs for the weaker members of the single currency.

The proposals, from members of Germany’s council of economic experts, raise the prospect of taxes being imposed on property in a country like Spain if its government was forced to seek a bail-out.

The council, known as the “Five Wise Men”, is often used to test new policies that are later adopted officially.

Might as well call them the Five Wise Guys, as in, “F— you, pay me.” Government by goodfellas is the inescapable consequence of government by best intentions. The Beast must be fed.

And notice please that this “wealth tax” proposal would fall on “better-off households” in Germany. Which, compared to Spain or Greece, is pretty much all of them. Or at least, pretty much all of them in the former West part of Germany. Keep in mind that Germans have been paying a 5.5% income tax surcharge since reunification, to pay for bringing the former East up to the standards and wealth of the former West. It’s expected to remain in play until at least 2019. That’s a lot of spreading the wealth around already, but at least the Deutschmarks — excuse me, euros — have all stayed inside the family, so to speak.

How much is it going to cost mittelklasse Germans to bring up 47 million Spaniards, when 20-plus years of subsidies still haven’t brought up 17 million Ossies?

That’s a good question. Another good question is: What the hell is Merkel thinking?

This kind of proposal doesn’t just give pause to German taxpayers. It also gives a leg up to German nationalist groups. So far, the skinheads and whatnot have been mostly confined to frustrated young men in the former East. What happens when similar (and more reasonable) grievances become commonplace among middle-aged Germans along the Rhine?

Despite what the vile progs would have you believe, Evil Fascist Heavy Industry did not sweep Hitler into power. Nazism was largely a middle class phenomenon, with big business eventually coming along for the only ride in town.

So, yeah, I worry about what might happen to German domestic politics, if all of southern Europe is eventually yoked to the back of the German taxpayer. Merkel, an Ossie herself, ought to realize this.

And, no, I don’t think Panzer divisions will be breaking out of the Ardennes on their way to occupying Paris — as much farcical fun as that might be to watch on CNN.

But we are watching Merkel destroy her CDU party in a vain effort to save a doomed currency. The left-wing (lefter-wing?) SPD might be the beneficiary, but fringe parties could very well become Germany’s new power brokers. And given that the SPD is no more likely to succeed at saving this fiction called “Europe,” both major mainstream German parties could see major erosion in their support.

Then the German fringes would become less fringey, which didn’t exactly work out very well for the Continent the last time around. 

Don’t Worry About the Yuan

Since 1995 the Chinese currency has either stayed the same or strengthened against the dollar

by ROBERT P. MURPHY

Especially during dismal economic times, many Americans—goaded by media figures and politicians—look with suspicion on foreigners. This tendency is most obvious in anti-immigrant sentiment, but also manifests itself in a drive for protective tariffs and other trade restrictions.

Over the past few years China’s “currency manipulation” has been a particularly hot-button issue. Pundits claim the Chinese government, by artificially suppressing the value of its currency, unfairly subsidizes Chinese exporters while destroying American jobs. Although there is truth to this claim it overlooks the benefits to American consumers from the Chinese policy. Americans should stop fretting about the Chinese currency.

To get a sense of the accusations leveled at the Chinese, we don’t need to scour letters to the editor written by economic illiterates. We can turn to Paul Krugman, who won a Nobel Prize for his work on international trade theory. Krugman has been leading the charge for punitive action against China—including retaliatory tariffs unless its government changes its ways. In a particularly bellicose column last year, “Taking on China,” Krugman wrote:

China’s policy of keeping its currency undervalued has become a significant drag on global economic recovery. Something must be done. . . . This is the most distortionary exchange rate policy any major nation has ever followed. . . . [I]f sweet reason won’t work, what’s the alternative? In 1971 the United States dealt with a similar but much less severe problem of foreign undervaluation by imposing a temporary 10 percent surcharge on imports, which was removed a few months later after Germany, Japan and other nations raised the dollar value of their currencies. At this point, it’s hard to see China changing its policies unless faced with the threat of similar action—except that this time the surcharge would have to be much larger, say 25 percent.

Before continuing we should clarify Krugman’s charges: The Chinese government uses some of its revenues in its own currency (collected from taxation, State-owned enterprises, and so on) to augment its stockpile of foreign currency reserves. In other words, in addition to spending its (yuan-denominated) revenues on tanks, bombers, and infrastructure, the Chinese government also spends some on acquiring more dollars, euros, and other currencies.

Just as the Chinese government’s purchases of, say, gasoline for its military equipment would tend to push up the yuan-price of gasoline, its efforts to buy dollars with yuan will push up the yuan-price of a dollar. By having more yuan chase U.S. dollars in the foreign-exchange market, the Chinese government’s purchases tend to make the dollar appreciate against the yuan.

Because China’s currency is weaker than it otherwise would be, Chinese exports are cheaper: The stronger dollar allows Americans to buy more Chinese goods, and so they will favor Chinese over domestic producers. On the other hand, Chinese consumers will view American goods as more expensive because they ultimately are priced in dollars and it takes more yuan to buy one dollar at the (allegedly) distorted exchange rate.

China’s Dream World

This time the honeymoon will be short

By Minxin Pei

Ruling elites almost everywhere – whether in democracies or in authoritarian regimes – believe that clever sloganeering can inspire their people and legitimize their power. There are, of course, crucial differences. In functioning democracies, government leaders can be held accountable for their promises: the press can scrutinize their policies, opposition parties are motivated to show that the party in power lies and cheats. As a result, incumbents are frequently forced to carry out at least some of their promises.

Autocratic rulers, by contrast, face no such pressures. Press censorship, repression of dissent, and the absence of organized opposition allow rulers the luxury of promising whatever they want, with no political consequences for failing to deliver. The result is government of the sloganeers, by the sloganeers, and for the sloganeers.

China appears to have perfected this form of government over the last decade. The ruling Chinese Communist Party (CCP), in response to rising public demand for social justice, has devised numerous slogans, such as “governing for the people,” “building a harmonious society,” “balanced development,” “scientific development,” and so on.

Whenever the top leadership in Beijing uttered such slogans, they became the rallying cry of the bureaucracy. The party’s massive propaganda machine went into overdrive and blanketed the country with a publicity blitz that would make the most extravagant Madison Avenue advertising campaign look like child’s play.

But government by slogan, whether in China or in other autocracies, seldom achieves its declared goals. In the last decade, GDP growth soared, but most indices of social justice, governance performance, and public welfare deteriorated. Macroeconomic imbalances worsened as economic growth became excessively dependent on investment and exports. Inequality worsened. Official corruption escalated. Social mobility declined. Environmental degradation reached a crisis point.

Today, it is the responsibility of China’s new leadership, headed by President Xi Jinping, to avert another decade of missed opportunities. Without missing a beat, Xi, like his predecessors, rolled out a new slogan to inspire popular confidence in his leadership. As a catchphrase for his administration’s objective, “the great renaissance of the Chinese nation” is bit long, but it has lately morphed into the simpler “China Dream.”

The substance of the China Dream remains difficult to determine. When Xi first unveiled his slogan after being selected as the CCP’s new general secretary, he defined it in simple, accessible, but nonetheless generic terms: The “Chinese people dream of living the same good life as all other people in the world.”

The economics of American militarism

The Great Deformation

by Justin Raimondo

David Stockman rocketed to fame as Ronald Reagan’s chief of the Office of Management and Budget (OMB), his name loosely associated with the "trickle down economics" of the supply-siders, but his recent book, The Great Deformation: The Corruption of Capitalism in America, will correct the record: Stockman is not only a libertarian critic of the Milton Friedman school of monetarism and supply side economics, he is also a principled opponent of American militarism. His new book is a massive 700 pages-plus, but don’t let that deter you: inside you will find a scintillating analysis of where, why, and how America went wrong, starting with the New Deal and ending with the Great Recession of ’08 and the subsequent Obama-Bernanke attempts to re-inflate the bubble of America’s debt-driven "prosperity."

His basic thesis is that the Federal Reserve, starting with Richard Nixon’s decouplingof the dollar from gold, has acted as the central planner of the American economy, blowing up the bubble of a false prosperity. This mostly served to fatten the wallets of the One Percent, giving Wall Street a blank check while looting the savings and aspirations of Main Street.

His is a complex argument, and it assumes a knowledge of economic theory that I fear many – including myself – do not possess, but his analysis is clear and forthright: the Fed, instead of acting as a neutral arbiter and manager of the money supply, has engaged in "prosperity management," as he terms it, implanting a "borrow, spend, gamble, and get-rich-quick regimen" that poisoned and deformed the economy and the culture. The decoupling of gold from the value of money led to the financialization – and bifurcation – of the American economy, so that the financial manipulations of Wall Street increasingly had little to do with the production of actual things, and the real performance and value of the financial "assets" they were dealing in, but instead were based on the "free" money being printed hand over heels by the all-powerful Federal Reserve. The hedge funds, the wild speculations of Wall Street’s most distended-from-reality "assets" – like those sliced-and-diced toxic mortgages that led to the housing bust – are all products of the Fed’s central planning: "They consume," says Stockman, "vast resources without adding to society’s output or wealth, and flush income and net worth to the very top rungs of the economic ladder." Although the free market is getting the blame for this, the reality, says Stockman, is that these deformations of capitalism were made possible by massive State intervention via the Fed, which enabled politicians to spend without taxing – and the militarism of the alleged "conservatives" was a key factor in all this.

100 Years Old & Still Killing Us

America Was Much Better Off Before The Income Tax

by Michael Snyder

Did you know that the greatest period of economic growth in American history was during a time when there was absolutely no federal income tax?  Between the end of the Civil War and 1913, there was an explosion of economic activity in the United States unlike anything ever seen before or since.  Unfortunately, a federal income tax was instituted in 1913, and this year it turned 100 years old.  But there was no fanfare, was there?  There was no celebration because the federal income tax is universally hated. 

Sadly, most Americans just assume that there is no other option to an income tax.  Most Americans just assume that it has always been with us and that it will always be with us.  This year, the American people will shell out approximately $4.22 trillion in state and federal income taxes.  That amount is equivalent to approximately 29.4 percent of all income that Americans will bring in this year, and that does not even take into account the dozens of other taxes that Americans pay each year. 

At this point, the U.S. tax code is about 13 miles long, and those that are honest and pay their taxes every year are being absolutely shredded by this system.  But wouldn't the federal government go broke if we didn't have a federal income tax?  No, actually the truth is that the federal government did just fine before there was an income tax.  In fact, the U.S. national debt has gotten more than 5000 times larger since the federal income tax and the Federal Reserve were created by Congress back in 1913. 

As I have written about previously, the Federal Reserve system was actually designed to trap the United States in a debt spiral from which it could never possibly escape, and the federal income tax was needed to greatly expand the size of the federal government and to soak the American people of the funds necessary to service that debt.  But it doesn't have to be this way.  America was once much better off before the income tax and the Federal Reserve were created, and we could easily go to such a system again.

What we desperately need to do is to teach the American people a little history lesson.  The truth is that the greatest period of economic growth in U.S. history was between the Civil War and 1913 when there was no federal income tax at all.  The following is from Wikipedia...

 The Gilded Age saw the greatest period of economic growth in American history. After the short-lived panic of 1873, the economy recovered with the advent of hard money policies and industrialization. From 1869 to 1879, the US economy grew at a rate of 6.8% for real GDP and 4.5% for real GDP per capita, despite the panic of 1873.  The economy repeated this period of growth in the 1880s, in which the wealth of the nation grew at an annual rate of 3.8%, while the GDP was also doubled.

Sticking it to Thatcher’s corpse

The political necrophiliacs dancing at ‘death parties’ disrespect the British people as much as Thatcher

by Patrick Hayes 

It is apt that ‘Ding Dong the Witch is Dead’ became the soundtrack to the sad troupe of left-wingers who took to the streets, champagne glasses in hand, to toast the death of Baroness Thatcher last week. They will, doubtless, chant it again during her funeral procession today. It is apt not because there really was something of the wicked witch about Thatcher, but rather because such a characterisation speaks volumes about the frankly medieval attitude now adopted by what remains of the radical left.

Those supposedly ‘braving the rain’ last Saturday to don party hats and do the conga in Trafalgar Square, and, earlier in the week, those bravely holding Thatcher-death parties in Brixton and Glasgow, were actually demonstrating extraordinary cowardice. Here were people incapable of taking on the Wicked Witch and defeating her ideas in life, who were only to happy to cheer her death. It was as if the mere fact that an 89-year-old woman had gone to meet her maker was some kind of political achievement they had helped bring about. One man at the Trafalgar Square party on Saturday even wore a homemade t-shirt bearing a drawing of Thatcher alongside the words ‘Gotcha’ – referring to the famous Sun front page celebrating the sinking of the Belgrano warship during the Falklands War.

Such celebrations amount to political necrophilia, with the protesters sticking it to Maggie’s corpse in a way they never could to the woman at the height her political powers. The fact that the date of the Trafalgar Square party was organised decades ago – the sole legacy of the now-defunct organisation Class War – with chants of ‘Maggie, Maggie, Maggie, Die!, Die!, Die!’ having long since become commonplace on left-wing and even student demonstrations shows the duration and appeal of the left’s Maggie-death fetish.

The weekend parade had a deeply medieval feel. It was as if those present really believed Thatcher had cast a spell over modern Britain which can now finally be broken. The witch is dead, we are free at last! All will have milk! The individualist, consumerist scales will fall from our eyes! Rejoice, rejoice as one, erm, Big Society, and embrace the alternative the left has to offer (whatever that may be). 

The Left is dancing on Margaret Thatcher’s grave… So why am I smiling?

Oh Margaret, you really were the gift that just keeps on giving

By Perry de Havilland

Every time I read of drunken noisy celebrations from assorted people following Margaret Thatcher’s death… every time I read of someone spewing vitriol and spitting on her memory… every time I read “Ding Dong The Witch is Dead“… my smile grows ever so slightly wider.

Why? Well I think I may have given a clue why I was likely to think this way a few days ago when I wrote this:

I would not have described myself as a libertarian back then even though I more or less was (and indeed I was only vaguely aware of the term, preferring ‘Classical Liberal’ in the non-debased non-US sense). And I still do not call myself one really, even though I more or less am. But for more than a decade I did indeed take delight in calling myself a Thatcherite (even though I only ‘kinda’ was), primarily because it was a wonderful shortcut for discovering all I needed to know about whoever I was speaking to at that time, just by watching their reactions.

Maggie Thatcher pissed off all the right people and I swung her name around like a handbag with a brick in it.

Before Margaret Thatcher took power, we had a Tory party lead by Edward Health… a man who was frankly so indistinguishable from the people he purported to oppose that his ‘conservative’ government nationalised several businesses. The broad statist political consensus amongst the Great and the Good (try not to spit when you read those words) was that the only thing to argue about was the rate at which the state took over, well, everything.

The Flat Caps and Beer Party and the Champagne and Barbour Party carried on a wonderful pantomime show of how they disdained each other and how they were like chalk and cheese, much as they do now, but in truth, it disguised just how much they had in common. Free(er) Markets were a talking point amongst some Tories but in truth they loved to intervene “before breakfast, dinner and tea”.

Pro Death Progressives and the Born Alive Act

Killing babies is the ultimate progressive 'right'

By Noemie Emery

Liberals' view of rights is that they are and they ought to be ever-expanding, and so they are proving to be.

First, the Declaration of Independence spoke of the right to "life, liberty, and the pursuit of happiness," for women (and others). Then Roe v. Wade gave them the right to abortion, then the right to late-term abortion, and then, the right to a dead baby afterward.

This last was asserted by then-Illinois state Sen. Barack Obama, who opposed the Born Alive Act, which would have mandated medical treatment for abortion survivors on the grounds it would have negated the intent of Roe. v. Wade.

The idea was when a woman chose an abortion, she signaled her wish to have a dead baby, and so it should be.

Later, brave souls made attempts to expand this still further, with Barbara Boxer saying a baby had rights when it came "home from the hospital," and bioethicist Peter Singer proposing a right to abort one's postnatal children.

In this sense, Kermit Gosnell, now on trial on multiple charges of homicide, was perhaps the ultimate civil rights activist, pushing women's rights up to the ultimate level, beyond even feminists' dreams.

In the spirit of Boxer, Obama and Singer, Gosnell excelled in helping women so that, when inspectors finally arrived at his clinic, they found fetal parts everywhere, clogging the toilets, hands and feet saved as tokens, in boxes, in jars.

Europe’s moment of truth

“Nothing beats the truth.”

By Ann Mettler

These were the passionate words of Enda Kenny, Prime Minister of Ireland, when asked last week about the spring European Council on 14-15 March. He was talking about a moment of reckoning for the continent’s leaders as they confront increasingly hostile electorates – most recently exhibited in Italy, where voters sent a clear signal against austerity.
Now it’s payback time for the years – even decades – of denial, of make-believe that the prosperity that Europe enjoyed was somehow divorced from economic realities, be they ballooning debt, declining competitiveness or dysfunctional insider-outsider labour markets. In the name of social justice – and long before the real crisis hit in 2008 – opportunistic political leaders devised loyal corporatist systems in which a growing set of vested interests divided power and spoils among themselves. Rather than embracing meritocracy, social mobility, creative destruction and innovation, entire countries became slow-moving, inward-looking, defensive and elite-driven juggernauts. Against this backdrop, it is not entirely surprising that a growing number of Italians have said “basta” to the current system – but perhaps without really considering the way forward.

Neither Silvio Berlusconi with his pledge of tax cuts the country cannot afford, nor Beppe Grillo, the political novice who has promised to suspend the national debt, is a solution. The fact that over 50% of the country gave them their vote is a stark reminder of the challenge the country – and Europe – faces. And that is why it is time to speak the truth: to tell Italians – and Europeans – that there is no easy way out of the crisis; that it will take years – even decades – of hard work to repair public finances, build a new foundation for prosperity and embrace the fact that, today, the countries with the highest levels of social cohesion are precisely the ones that implemented far-reaching reforms early on.

Soft Fascism

Fascism kept the appearance of private property, but Communists went and nationalized everything outright

By Stephen Green 

Forget for a moment everything you think you know about fascism.

Forget Mussolini’s silly wars in Africa and Greece. Forget the horrible splendor of the Nuremburg rallies. Forget, if for only a moment, the Holocaust.

Instead, remember how fascism worked as a political system – not just the wartime atrocities we all know so well.

First off, there was only one Party. Whether it went by the name of Italy’s Fascists, or Germany’s National Socialist Worker’s Party, the Party ran the country, and the Duce, or Fuehrer, ran the Party. One man didn’t truly have complete control – there are always different factions to please, or cajole, or threaten, or play off one another – but his word was still the final one.

Businesses were seen as semi-private cogs in the government machine – useful for producing jobs, handing out tax dollars to favored individuals, earning kickbacks to favored politicians, and making the tools of war. Business was at once a means of getting and distributing money, and media businesses were useful and tolerated so long as they spewed propaganda, or at least hewed to the Party line.

Companies that weren’t useful didn’t get the juiciest government contracts, and they might just find they had serious labor issues coming up. Further recalcitrance could lead to more severe means of correction, best left to the imagination.

In other words, fascism was just like Communism (which worked a lot like the mafia). The only difference between the two as systems, was that Fascism kept the appearance of private property, but Communists went and nationalized everything outright. In neither system was business free to go about its business. In both systems, all labor unions (or just the one big union, with everyone required to join) reported to the State.

A Vile Bunch of Hypocrites

Children of the Nanny State

By Johnathan Pearce

I wonder how many of those on what is broadly “the left”, who are crying crocodile tears over the fate of coal miners who lost their jobs from unprofitable, subsidised mines in the 1980s, are the same people who want, in the name of global warming alarmism, to shut down profitable mines today? It would be good to ask the current crop of Labour MPs, LibDems and Cameroonian Tories as to whether they think it right to repeal the UK’s various climate change measures that have, among other things, led to the recent closure of UK coal-fired power stations.

Of course, such a question reminds me, when thinking of the nonsense about that has been spouted since the death of Margaret Thatcher, of how illogical and hypocritical people, both politicians, and voters, are on such matters. Not a comforting thought. But I guess it is hardly something that is confined to the UK.

The “doctor” will see you now

Dr. Mengele, I Presume

Josef Mengele

by Michael Walsh

As you can read here, I’ve been following the horrific tale of “Dr.” Kermit Gosnell, the alleged Butcher of Philadelphia, ever since the story broke last year. In fact, in the guise of my crazy-lefty character, David Kahane, I wrote a big piece, “The Charnel House of Blackmun,” about it shortly after the grand jury issued its stomach-turning report on this latter-day Mengele‘s crimes. An excerpt:

For us, a day without an abortion somewhere in this great land is like a day without a sermon on climate change: The world is a drab and bitter place, in which the cheery hosannas of the unborn dead cannot be heard, praising the glory of a Gaian world they will never pollute with their presence. Forget that Baudelaire dude and the gimp, Verbal Kint: The Master’s greatest trick was not convincing the world he didn’t exist, but persuading women that it was morally affirmative to murder their own children. Medea, take a bow!

Now, you may quibble that Medea killed children who were, you know, actually ambulatory, but to us and Peter Singer, that is a small matter, a mere detail, a bagatelle of a bump in the road on our way to a more perfect nihilism. Which is why I’m here to celebrate a great American named Kermit B. Gosnell, M.D., a man who was standing up to the forces of bigotry and intolerance and unreasoning pedophobia by providing abortion services at his Women’s Medical Society in Philadelphia — until, unaccountably, the state of Pennsylvania arrested him… 

Well, one man’s “baby charnel house” is another man’s monument to the House that Blackmun Built, and surely reasonable men and women of good conscience can agree to disagree, even if Roe is long-since settled law and if you troglodytes so much as try to touch one hair of its sacred little head, we’re coming after you with scissors, suction, a pair of pliers, and a blowtorch… Once you accept the proposition of abortion pretty much on demand, including post-“birth,” this seems to us a distinction without a difference, but there’s no accounting for the lengths to which you Christianist Javerts will go in order to hunt down innocent women’s-health specialists.

While it’s true that the alleged details of Dr. Gosnell’s practice can make you squeamish right-wingers uncomfortable, our brave women are made of sterner stuff. They know the parasitic clumps of cells in their wombs — punishment-by-“baby” for the simple, innocent, joyous act of sexual intercourse — are being eliminated for a higher, nobler cause than mere Christianity. We progressives don’t believe in the afterlife, unless we’re trying to fake some sort of “faith” on television, but we do believe in, shall we say, an eternally resonating resonance that proclaims to the universe: We were here. We lived. We killed. Mission accomplished.

The Wreck of the Euro

Politicians in Europe thought they were living in a post-historical period in which mistakes didn’t really matter all that much

By WALTER RUSSELL MEAD

What does it mean for the euro that, on paper at least, Spaniards, Italians, and Cypriots are much wealthier on average than Germans? That’s the question Wolfgang Münchau tackled in a must-read column in the Financial Times.

Here are the outlines of his argument. A new survey by the European Central Bank has concluded that median German household wealth ranks among the lowest in the entire Eurozone. The median German family is worth €51,000 whereas the median Cypriot household is worth €267,000. Those are eye-popping figures, and the German press is apoplectic over them. Münchau cautions that the median is not the best measure in this case. But even if one were to look at the mean, Germans are worth €200,000 per household, while Spanish net wealth is somewhere around €300,000. There’s another correction to take on board; Germans haven’t bought into home ownership the way many Europeans (and Americans) do. But put in all the caveats and corrections you want, and the numbers are still striking and, to many Germans, infuriating. Why should German households be paying tax money to bail out rich Cypriots?

But anybody who’s traveled in Europe understands that these numbers have something wrong with them. Germans are significantly richer than Italians and Greeks. The answer, says Münchau, must be that varying price levels across the eurozone are responsible.

On the surface, this is not actually as bizarre as it might seem. Price levels vary. The American experience with the dollar is not totally different. A dollar in New York isn’t the same thing as a dollar in other parts of the country. A salary of $150,000 in Manhattan is worth a lot less than a salary of $150,000 in Omaha or Baton Rouge. And while $500,000 can’t buy you a decent sized apartment in Manhattan, it can buy quite a nice house in much of the country. European countries work like this, too. Milan is a lot more expensive than most of the rest of Italy, for example.

But there is a perverse European twist to this state of affairs. In America, it’s the richer parts of the country that have the highest price levels. But in Europe it’s the other way round. Prosperous Germany has lower prices than the dead broke Club Med countries. In American terms, imagine that real estate in Manhattan was cheaper than in Detroit, or that prices in Buffalo, New York, far outstripped prices in Silicon Valley.

Dutch Delusion

Europe's Core, She Rots Some More

By Raul Ilargi

A report published Thursday by the real estate industry in the Netherlands states that the average home price is now 18% lower than it was at the peak in 2008, while detached homes lost 20%-25% (March 2013 YoY prices fell 6.8%, says Eurostat). A separate, earlier, report estimated that 20% of homes, or over 1 million, are now underwater.

Today's report comes hot on the heels of a study issued Wednesday by a government commission, which took a full year to prepare and 121 pages to explain what went wrong in the Dutch housing bubble, and what should be done now to correct it.

The core problem is simple: from 1995 to 2008 home prices more than tripled (rose 200%+). Hence, if we round off to a 20% drop from peak levels, or 60% from 1995 levels when prices were a third of what they were in 2008, there's still an increase of about 150% from the starting levels that needs to be dealt with. We can discount for, and let's be generous, perhaps 50% for overall price inflation, but that still leaves us with a 100% increase, which is quite a bit more than the 60% absorbed so far.

This means that, seen from the 2008 peak perspective, a 20% price fall has been completed, and another 33% drop is needed to get back to where it came from. Some may cite reasons why prices should remain elevated, but that smacks too much of the "this time is different" argument; one might as well argue the opposite. A main point raised is that demand outstrips supply, but demand is not what people want; it's what they will be able to afford. And the Dutch economy is shrinking.

Well, you see the problem by now, of course: like many other nations, the Dutch today feel quite strongly that they have suffered enough already, and someone somehow needs to revive the housing market. But like everyone else, the Dutch wish to wish away the problem of the not yet corrected part of the pricing model. In their case, they want 200% (1995+100%) to be the new normal (a.k.a. the new black).

Not surprisingly, the government report says that A) all parties are to blame, and B) the government needs to get more involved, i.e. make sure loans become available for people who now can't get them, a.k.a. people who are not the most likely prime candidates to buy a home that's still some 33% overvalued. Though, admittedly, sucking in those last remaining suckers would prop up moribund builders, agents and lenders for a while longer. Whether that's a government's task is at the very least highly questionable (obviously, other countries, including the US, work on similar resuscitation efforts).

The most hilarious I've seen to date coming out of the Netherlands (a good second was:" build more homes"!) is the proposal for the government to artificially raise home rents so people will be more likely and tempted to buy a home. An act which, incidentally, has recently been stripped of its most flagrant artificial incentives.

China's collars are turning white

Economic rebalancing - Industrial eclipse

The Economist

EARLIER this year, we noted that China's output of services was poised to overtake its industrial production, probably as soon as this year. That would represent an interesting milestone for China's economy, which is renowned for the hum of its assembly lines, the belch of its smokestacks and the clang of its construction sites. Today's GDP report brings that crossover even closer. In the past four quarters (running from the second quarter of 2012 to the first quarter of 2013), services and industry accounted for the same amount of China's GDP (see chart)*. Indeed, services trumped industry in each of the past three quarters. That hasn't happened since 1961, as far as I can tell. 

I should point out that China's service sector (which includes transport, wholesaling, retailing, hotels, catering, finance, and real estate among other things) is still unusually small. In other economies at China's stage of development, services typically account for about 55-60% of GDP. Prices for services have also been rising faster than industrial prices, contributing to the shift in their favour.

I should also point out that both sectors are highly seasonal, with services typically peaking in the first quarter and industry peaking in the second. So industry (which includes construction, mining and utilities, as well as manufacturing) may bounce back in April, May and June. Nonetheless, the industrial eclipse is edging a little closer. 

When hunger came to Egypt

The question is how long Egyptians can go hungry before the Morsi regime loses its capacity to govern

By David P Goldman

Egyptians are getting hungry. The fall of the Egyptian pound to just 60% of its 2012 exchange rate against the dollar has priced everything but bread out of the reach of the poorer half of the population, and the bread supply is now at risk.

The news late last week that Libya and Qatar may lend US$5 billion to Egypt was overshadowed by reports that Cairo owes $5 billion to the oil companies that produce oil and gas on its territory. Half of the amount is overdue, and oil companies reportedly expect to wait years for payment. Egypt's arrears on trade credits from suppliers of oil, wheat, and other essential items probably exceed its $8.8 billion cash reserves, leaving the country flat broke. 

With a trade deficit running at $32 billion, the Libyan and Qatari money covers just a couple of months; stiffing the oil companies might have covered the past couple of months. If the Egyptian government finally comes to terms with the International Monetary Fund for a $4.8 billion loan, that will cover another few weeks.

Egypt's Exports, Imports and Trade Balance 

Egypt's finances have been in free fall since the mid-2000s, when prices for food and other essential imports soared while export earnings for cotton and other products stagnated. At $60 billion, the country's trade deficit is a seventh of its gross domestic product. The 40% fall in the exchange rate of the Egyptian pound from 6 to the dollar late last year to 8.25 on the black market last week will raise the cost of imports even further. 

The half of Egyptians that lives on $2 a day no longer eats beans, let alone milk products. 

The price of fava beans, the country's second-most important food staple, has already risen by 40% this year, to 5,000 Egyptian pounds (US$728) per ton from $3,000 Egyptian pounds in January. Imports of proteins have collapsed, according to theEgyptian Gazette:

''As for frozen food imports, namely meat, fish and chicken products, they fell by 25 per cent during the first three months of the year, compared to the same period a year before due to the surge in the dollar," said Alaa Radwan, a member in the Food Stuff Industries at the FECC. Radwan, who is also head of the Association of the Meat, Fish and Chickens Importers, explained that banks had suspended offering importers with letters of credit, demanding them to seek dollars from the parallel market, which caused frozen food prices to increase by 25 per cent to 39 per cent.

The price of imported milk products, which account for 60% to 65% of consumption, has risen by 60% since January, the Gazette reported. 

The only basic foodstuffs still available to poor Egyptians are state-subsidized bread, sugar and oil. That may change drastically during the next several months.