The truth is ugly, and it hurts.

The Gospel According To Saint Ambrose

By Jim Amrhein 

TRUTH, n. An ingenious compound of desirability and appearance…
– Ambrose Bierce, The Devil’s Dictionary, 1911

Many scholars and other well-read folks speak of Twain and Mencken as America’s sharpest skewers of government, institutions, hypocrites, the corrupt, the devout, and the dim-witted…

And surely, they’re one kind of correct or another in that assessment.

But for my money, the brilliant and paradoxical Ambrose Bierce will always be the heavyweight champion of American polemicists.

To me, “Bitter Bierce” is the patron saint of that cardinal virtue, cynicism; his Devil’s Dictionary one of the most piercing works of generalized dissent ever written.

Bierce’s Dictionary hits home where more direct, noble-minded, or allegorical works of satire may fall short due to its expert use of two devastatingly effective tools…

A format we’re all programmed to accept as true (the dictionary entry) – and acerbic humor, truth’s uglier and smarter Siamese twin.

No one I’ve ever encountered wields both the hammer of truth and the rapier of wit as effectively as Bierce. I defy you to read just these few Devil’s Dictionary entries below without crying – either from paroxysms of laughter…

Or because you’ve been shockingly reminded of just how far removed we all are in this Brave New i-World from the bare-bones truth of the way things really are.

Though Bierce’s Dictionary covers all manner of topics – leaving no institution’s pillars un-crumbled and no sacred cows un-roasted – the “definitions” I’ve selected today are, by and large, applicable to the thing I love to hate most of all:Government.

Never has there been a more appropriate time for someone to hammer into us all that “the truth” isn’t what government, the media, or even Webster’s says it is…

Rather, it’s what’s expedient and advantageous in the real world of human-to-human, citizen-to-sovereign, and state-to-state interaction.

I think “Saint Ambrose” is the perfect one to remind us of this distinction – and that cynicism and dissent may be more vital to the survival of the United States of America now than at any other point since our nation drew its first breath.

So here’s just small portion of what Bierce has to say on the subject in The Devil’s Dictionary – see how much of modern-day America you recognize in most of these words. I’ve cut some of the entries for brevity, but their essences are intact…

• ALLIANCE, n. In international politics, the union of two thieves who have their hands so deeply inserted in each other’s pockets that they cannot separately plunder a third.
• AMNESTY, n. The state’s magnanimity to those offenders whom it would be too expensive to punish.

(Hmmm. No wonder we barely prosecute or deport illegal aliens.)

• BOUNDARY, n. In political geography, an imaginary line between two nations, separating the imaginary rights of one from the imaginary rights of the other.
• CAPITAL, n. The seat of misgovernment.
• CONSERVATIVE, n. A statesman who is enamored of existing evils, as distinguished from the Liberal, who wishes to replace them with others.
• DEBT, n. An ingenious substitute for the chain and whip of the slave-driver.
• DIPLOMACY, n. The patriotic art of lying for one’s country.
• ECONOMY, n. Purchasing the barrel of whiskey that you do not need for the price of the cow that you cannot afford.
• ELECTOR, n. One who enjoys the sacred privilege of voting for the man of another man’s choice.
• EXECUTIVE, n. An officer of the Government, whose duty it is to enforce the wishes of the legislative power until such time as the judicial department shall be pleased to pronounce them invalid and of no effect.
• GUNPOWDER, n. An agency employed by civilized nations for the settlement of disputes which might become troublesome if left unadjusted.
• HISTORY, n. An account mostly false, of events mostly unimportant, which are brought about by rulers mostly knaves, and soldiers mostly fools.
• HOUSELESS, adj. Having paid all taxes on household goods.
• INFLUENCE, n. In politics, a visionary quo given in exchange for a substantial quid.
• JUSTICE, n. A commodity which is a more or less adulterated condition the State sells to the citizen as a reward for his allegiance, taxes and personal service.
• LIBERTY, n. One of Imagination’s most precious possessions.
• MONEY, n. A blessing that is of no advantage to us excepting when we part with it. An evidence of culture and a passport to polite society.
• OPPOSITION, n. In politics the party that prevents the Government from running amuck by hamstringing it.
• OUT-OF-DOORS, n. That part of one’s environment upon which no government has been able to collect taxes.
• PATRIOT, n. One to whom the interests of a part seem superior to those of the whole. The dupe of statesmen and the tool of conquerors.

(These next two are priceless – they should be bronzed somewhere important for all to see…)

• PEACE, n. In international affairs, a period of cheating between two periods of fighting.
• POLITICS, n. A strife of interests masquerading as a contest of principles. The conduct of public affairs for private advantage.
• PREROGATIVE, n. A sovereign’s right to do wrong.
• QUORUM, n. A sufficient number of members of a deliberative body to have their own way and their own way of having it.
• RESIGN, v.t. To renounce an honor for an advantage.

(When’s Anthony Weiner’s million-dollar tell-all book coming out, I wonder?)

• REVOLUTION, n. In politics, an abrupt change in the form of misgovernment.
• VOTE, n. The instrument and symbol of a freeman’s power to make a fool of himself and a wreck of his country.
• WAR, n. A by-product of the arts of peace.

See what I mean? These are so accurate in their essences they could’ve easily been written yesterday – yet were first compiled and published as part of The Devil’s Dictionary exactly 100 years ago, in 1911…

When you see it laid out in the clarity of Bierce’s biting “definitions,” it’s incredible how little government and the American system has changed in a century, isn’t it?

The only problem with Bierce’s timelessly accurate assessment of what the underpinnings of government and society really are is that they make the self-deluded (in other words, everyone) want to jump from the nearest bridge.

That’s because the most cardinal of truths is this: The truth is ugly, and it hurts.

Many can’t forgive (or more accurately, stomach) Bierce for his unflagging willingness to call a spade a spade – others can’t help but love him for his ability to do exactly that with so vicious and crystalline a wit. I’m of this second camp, and have been since the day I first read Bierce.

And if these few excerpted “definitions” from The Devil’s Dictionary have given you a fresh glimpse of the sausage-making machine behind the government curtain, jarred your expectations of The System, of even just given you a hearty guffaw or two…

Stay tuned for the second installment of this two-part series. If you think Bitter Bierce’s take on sovereign Government is harsh – wait ’til you hear what he thinks about education, medicine, marriage, love, friendship, Wall Street, religion, morality, birth, death, and life in general.

It’s pure Ambrosia for the cynical soul…

As Goes Greece, So Goes …

The Euro 1999 – 2012 R.I.P.

By Jeff Harding 

Italy is the world’s eighth largest economy and it has one of the highest levels of public debt-to-GDP in Europe:

Greece is ranked the 28^th largest economy in the world. By comparison Ireland is ranked 36^th.

Needless to say, Italy represents a flash point in the euro zone as bond vigilantes have gone after it for the past two days. Fear is contagious as they say. Greece is the ostensible problem and the stated reason for today’s EU emergency meeting, but they will discuss Italy. Italy’s debt costs are still relatively low, but the Bund spread is growing and their cost of debt relative to the amount of debt (primary balance) is a problem.

Is this something we here in Fortress America should worry about? Yes.

Beyond Ethical Barriers

Public schools buys 8,000 diversity manuals

By Joe Dejka

The Omaha Public Schools used more than $130,000 in federal stimulus dollars to buy each teacher, administrator and staff member a manual on how to become more culturally sensitive.

The book by Virginia education consultants could raise some eyebrows with its viewpoints.

The authors assert that American government and institutions create advantages that “channel wealth and power to white people,” that color-blindness will not end racism and that educators should “take action for social justice.”

The book says that teachers should acknowledge historical systemic oppression in schools, including racism, sexism, homophobia and “ableism,” defined by the authors as discrimination or prejudice against people with disabilities.

The authors argue that public school teachers must raise their cultural awareness to better serve minority students and improve academic achievement.

The Omaha school board approved buying 8,000 copies of the book — one for every employee, including members of the custodial staff — in April. The decision to buy the book was made 11-0, with board member Mary Ellen Drickey passing on the vote.

Janice Garnett, OPS assistant superintendent of human resources, said she could not recall another time that the district had bought copies of the same book to give to every staff member.

Employees will be asked to read a couple of chapters each quarter and then meet in study groups to discuss the book using a study guide produced by the district, she said. For teachers, the study sessions will be a part of their professional development.

School board President Sandra Jensen said the district doesn't endorse everything in the book, nor does she expect employees to adopt the authors' positions. The book is intended to open a dialogue, she said.

“The purpose of providing this resource is to help staff see that people come from a multitude of different backgrounds which cause them to respond differently to the same set of facts, depending on their personal perspectives,” she saidin a statement. “Recognition that one might have a certain perspective is critical to treating all people equally.”

Representatives of other large Nebraska school districts — Lincoln, Millard, Papillion-La Vista and Bellevue — said they have not used the book for training teachers, nor have the Council Bluffs Community Schools and Des Moines Public Schools.

Lincoln officials bought copies of a different cultural proficiency book to train administrators later this summer, according to spokeswoman Mary Kay Roth.

The book that OPS bought, “The Cultural Proficiency Journey: Moving Beyond Ethical Barriers Toward Profound School Change,” includes a worksheet for teachers to score themselves on a continuum of cultural sensitivity. The continuumranges from “cultural destructiveness,” as evidenced by genocide and ethnocide, to “cultural proficiency,” depicted as the highest level of awareness.

Only those educators who acknowledge the existence of white privilege in America, that “white” is a culture in America and that race “is a definer for social and economic status” can reach proficiency, the authors contend. Those who score poorly on the worksheet are asked in the book what they will do “to align yourself with the values expressed.”

Jensen said the district will not use the book to evaluate or judge employees.

The book says teachers must overcome irrational fear of homosexuality and reject the “color-blind” approach to teaching in which teachers treat all children the same. Instead, the group identity of students of color should be recognized and esteemed, the authors say.

Brainwashing Americans

Failing Liberty 101

by W. Williams
A recent Superman comic book has the hero saying, "I am renouncing my U.S. citizenship" because "truth, justice, and the American way -- it's not enough anymore." Though not addressing Superman's statement, Stanford University professor and Hoover Institution senior fellow William Damon explains how such a vision could emerge today but not yesteryear. The explanation is found in his article "American Amnesia," in Defining Ideas (7/1/2011), based upon his most recent book, "Failing Liberty 101: How We Are Leaving Young Americans Unprepared for Citizenship in a Free Society."

The National Assessment of Educational Progress reports that only 1 in 4 high-school seniors scored at least "proficient" in knowledge of U.S. citizenship. Civics and history were American students' worst subjects. Professor Damon said that for the past 10 years, his Stanford University research team has interviewed broad cross sections of American youths about U.S. citizenship. Here are some typical responses: "We just had (American citizenship) the other day in history. I forget what it was." Another said, "Being American is not really special. ... I don't find being an American citizen very important." Another said, "I don't want to belong to any country. It just feels like you are obligated to this country. I don't like the whole thing of citizen. ... It's like, citizen, no citizen; it doesn't make sense to me. It's, like, to be a good citizen -- I don't know, I don't want to be a citizen. ... It's stupid to me."

A law professor, whom Damon leaves unnamed, shares this vision in a recent book: "Longstanding notions of democratic citizenship are becoming obsolete. ... American identity is unsustainable in the face of globalization." Instead of commitment to a nation-state, "loyalties ... are moving to transnational communities defined by many different ways: by race, ethnicity, gender, religion, age, and sexual orientation." This law professor's vision is shared by many educators who look to "global citizenship" as the proper aim of civics instruction, de-emphasizing attachment to any particular country, such as the United States, pointing out that our primary obligation should be to the universal ideals of human rights and justice. To be patriotic to one's own country is seen as suspect because it may turn into a militant chauvinism or a dangerous "my country, right or wrong" vision.

The ignorance about our country is staggering. According to one survey, only 28 percent of students could identify the Constitution as the supreme law of the land. Only 26 percent of students knew that the first 10 amendments to the Constitution are called the Bill of Rights. Fewer than one-quarter of students knew that George Washington was the first president of the United States.

Discouraging young Americans from identifying with their country and celebrating our traditional American quest for liberty and equal rights removes the most powerful motivation to learn civics and U.S. history. After all, Damon asks, "why would a student exert any effort to master the rules of a system that the student has no respect for and no interest in being part of? To acquire civic knowledge as well as civic virtue, students need to care about their country." Ignorance and possibly contempt for American values, civics and history might help explain how someone like Barack Obama could become president of the United States. At no other time in our history could a person with longtime associations with people who hate our country become president. Obama spent 20 years attending the Rev. Jeremiah Wright's hate-filled sermons, which preached that "white folks' greed runs a world in need," called our country the "US of KKK-A" and asked God to "damn America." Obama's other America-hating associates include Weather Underground Pentagon bomber William Ayers and Ayers' wife, Bernardine Dohrn.

The fact that Obama became president and brought openly Marxist people into his administration doesn't say so much about him as it says about the effects of decades of brainwashing of the American people by the education establishment, media and the intellectual elite.

The Fatal Conceit

David Mamet's Conversion

by John Stossel
Hollywood mocks capitalism, which seems odd because the people who make movies are such aggressive capitalists -- competing hard to make money. But Hollywood's message is that capitalism is shallow and cruel.

Take the 1992 movie "Glengarry Glen Ross" (based on a Pulitzer Prize-winning play). It's about cutthroat real estate salesmen who work for a heartless company. It was written by the celebrated playwright David Mamet, author of "American Buffalo," "Spanish Prisoner," and more than 50 other plays and movies.

I assumed that Mamet was another garden-variety Hollywood lefty, but then a few years ago, I was surprised to see an article he wrote titled, "Why I'm No Longer a Brain-Dead Liberal." Now he's followed up with a book, "The Secret Knowledge: On the Dismantling of American Culture."

I asked Mamet what turned a "Hollywood liberal" into a conservative.

Was he a brain-dead liberal? The newspaper, not Mamet, put that headline on his article.

"I referred to myself as one," Mamet told me. "Political decisions I made were foolish."

Foolish because he wasn't really thinking, he said. Since everybody around him was liberal, he just went along.

What changed?

"I met a couple conservatives, and I realized I never met any conservatives in my life. ... (O)ne started sending me books. His books ... made more sense than my books."

Mamet was suddenly exposed to ideas he had never encountered before.

"Shelby Steele's 'White Guilt,'" he said, "led me to the works of Tom Sowell and through them (F.A.) Hayek and Milton Friedman."

Two things hit him especially hard: the benefits of economic competition and the limits of leaders' ability to plan society.

"If you stop licensing taxi cabs, tomorrow you will see guys and women on every street corner saying, 'Who wants to go to XYZ address?' (The cabbie) will put five people in the car and drive them to that address. ... When the guy drops them off, if he's smart, he'll say: 'Tomorrow -- same thing, right? What do you guys want to drink for breakfast?' There will be cappuccino and ice tea and glass of milk. After X months, he will have three cars; after X months, he will have a fleet. And everyone will be competing to meet the needs of the commuters, which also is going to reduce traffic. Why are they allowed to compete? Because the government got the hell out of the business."

Mamet also read Hayek's last book, "The Fatal Conceit."

"What Hayek is talking about is that we have to have a constrained vision of the universe. The unconstrained vision, the liberal vision, is that everything can be done, everything is accomplishable," he said. "We don't have the knowledge. ... There is only so much that government can do. ... It would be nice if giving all of our money to the government could cure poverty. Maybe, but giving money to the government causes slavery."

For Hayek, the "fatal conceit" is the premise that politicians and bureaucrats can make the world better -- not by leaving people free to coordinate their private individual plans in the marketplace -- but by overall social and economic planning.

Imagine trying to plan an economy, Mamet said, when we barely know enough to raise our kids. "(T)he guy in government can't know everything."

As you can imagine, when Mamet went public, he bewildered many of his showbiz peers. A Los Angeles Times critic called his book "a children's crusade with no understanding of real politics." The Nation called Mamet a "great playwright, (but a) moronic political observer."

Mamet said to his wife: 'Isn't it funny? ... The New York Times, the supposed newspaper of record that has been reviewing my plays for 40 years, isn't even going to review this book.'

"She says: 'Dave, grow up. The purpose of all newspapers is political."

Maybe the Times thinks it's insignificant that a celebrated cultural "liberal" now questions his faith in the supposed healing power of government. But as we sit mired in this endless jobless "recovery," with the wreckage of government failure all around, we should ask ourselves which one is out of touch with reality.

A Society too evolved

Little Boy Blue Devil

by Mike Adams

It looks like Duke University has another rape case on its hands. This one may hurt the university nearly as much as the one that rocked its campus back in 2006. Unlike the previous case, this one appears to involve a credible confession of sexual abuse. Like the previous case, crucial facts are already being filtered through the prism of identity politics.

Frank Lombard is the associate director of Duke’s Center for Health Policy. The university administrator was recently arrested by the FBI and charged with offering up his adopted 5-year-old son for sex. I tried to contact Frank Lombard over the weekend to probe his expertise regarding the health benefits of raping small children. So far, he’s declined to comment.

University administrator Lombard is accused of logging on to a chat room online and describing himself as a “perv dad for fun.” The detective who wisely looked into the suspicious screen name says that Lombard admitted to molesting his own adopted son. All this was before allegedly inviting a stranger to travel to North Carolina from another state to statutorily rape his already-molested adopted son.

If Lombard is convicted, he faces a maximum of 20 years in prison. His arrest comes about a year after the Court decided that child rapists cannot be executed because “society” has “evolved” to the point where such executions would be “indecent.”

If this case goes to trial, it could be an interesting one to watch. But it will be just as interesting to watch the Duke faculty respond to these allegations. It didn’t take them long to respond when several white Duke Lacrosse players were accused of raping a black stripper. A whopping 88 professors signed a statement accusing the players of both racism and rape. Such was their regard for the presumption of innocence.

Perhaps even more stunning was the response of some professors after it became apparent that the white lacrosse players were innocent. After that became so obvious the school had to readmit the students, Professor Kate Holloway resigned her committee assignments in protest. By the way, the most common form of faculty protest these days is to refuse to work. Most people think this kind of protest is caused by arrogance. But the actual cause is a thing called “tenure.”

So it will be interesting to see how Duke faculty members respond to Frank Lombard. Because he is white, Lombard is fair game at Duke, isn’t he? But Lombard is also gay, so will that complicate things?

Unfortunately for Frank Lombard, the affidavit in support of his arrest warrant shows that this second Duke rape case will also have a strong racial component. According to a confidential source (CS) a man using the user name “cooper2” or “cooperse” logged onto an internet-based video chat room. CS saw him perform oral sex on an African-American child under the age of ten. He also performed other acts on the child, which are too obscene to be described in this column.

The user name “cooper2” has now been linked to Frank Lombard, the associate director Duke University’s Center for Health Policy. A second source has now alleged that “cooper2” has confessed to being “into incest” and that he has adopted two African American children.

The only good news coming out of this story is about Frank Lombard’s live-in homosexual partner. The affidavit in support of Lombard’s arrest warrant shows that he made special arrangements when molesting the child – sometimes even by drugging the child – to make sure his partner did not find out.

Records also indicate that Frank Lombard made a contribution to the Genesis Home in 2003. The Genesis Home is an organization that assists needy families in making a transition out of homelessness, in part by maintaining a child care center. The organization’s website features numerous photographs of African-American children under the age of ten.

The Associate Press (AP) did not mention the fact that the five-year old offered up for molestation was black. Bringing that fact to light might be damaging to the political coalition that exists between blacks and gays. Nor did the AP mention that the adopted child is being raised by a homosexual couple. Bringing that fact to light might harm the gay adoption movement.

I wrote this column because I believe that certain coalitions must be broken. And certain movements must be harmed. Let the political fallout begin.

What we can know

Unknown Unknowns

by T. Sowell
When Donald Rumsfeld was Secretary of Defense, he coined some phrases about knowledge that apply far beyond military matters.

Secretary Rumsfeld pointed out that there are some things that we know that we know. He called those "known knowns." We may, for example, know how many aircraft carriers some other country has. We may also know that they have troops and tanks, without knowing how many. In Rumsfeld's phrase, that would be an "unknown known" -- a gap in our knowledge that we at least know exists.

Finally, there are things we don't even know exist, much less anything about them. These are "unknown unknowns" -- and they are the most dangerous. We had no clue, for example, when dawn broke on September 11, 2001, that somebody was going to fly two commercial airliners into the World Trade Center that day.

There are similar kinds of gaps in our knowledge in the economy. Unfortunately, our own government creates uncertainties that can paralyze the economy, especially when these uncertainties take the form of "unknown unknowns."

The short-run quick fixes that seem so attractive to so many politicians, and to many in the media, create many unknowns that make investors reluctant to invest and employers reluctant to employ. Politicians may only look as far ahead as the next election, but investors have to look ahead for as many years as it will take for their investments to start bringing in some money.

The net result is that both our financial institutions and our businesses have had record amounts of cash sitting idle while millions of people can't find jobs. Ordinarily these institutions make money by investing money and hiring workers. Why not now?

Because numerous and unpredictable government interventions create many unknowns, including "unknown unknowns."

The quick fix that got both Democrats and Republicans off the hook with a temporary bipartisan tax compromise, several months ago, leaves investors uncertain as to what the tax rate will be when any money they invest today starts bringing in a return in another two or three or ten years. It is known that there will be taxes but nobody knows what the tax rate will be then.

Some investors can send their investment money to foreign countries, where the tax rate is already known, is often lower than the tax rate in the United States and -- perhaps even more important -- is not some temporary, quick-fix compromise that is going to expire before their investments start earning a return.

Although more foreign investments were coming into the United States, a few years ago, than there were American investments going to foreign countries, today it is just the reverse. American investors are sending more of their money out of the country than foreign investors are sending here.

Since 2009, according to the Wall Street Journal, "the U.S. has lost more than $200 billion in investment capital." They add: "That is the equivalent of about two million jobs that don't exist on these shores and are now located in places like China, Germany and India."

President Obama's rhetoric deplores such "outsourcing," but his administration's policies make outsourcing an ever more attractive alternative to investing in the United States and creating American jobs.

Blithely piling onto American businesses both known costs like more taxes and unknowable costs -- such as the massive ObamaCare mandates that are still evolving -- provides more incentives for investors to send their money elsewhere to escape the hassles.

Hardly a month goes by without this administration coming up with a new anti-business policy -- whether directed against Boeing, banks or other private enterprises. Neither investors nor employers can know when the next one is coming or what it will be. These are unknown unknowns.

Such anti-business policies would just be business' problem, except that it is businesses that create jobs.

The biggest losers from creating an adverse business climate may not be businesses themselves -- especially not big businesses, which can readily invest more of their money overseas. The biggest losers are likely to be working people in America, who cannot just relocate to Europe or Asia to take the jobs created there by American multinational corporations.

A diverse and tolerant future

Gay Duke University Official Offered Adopted Child for Sex

The left has suffered a minor setback in its progressive march toward a diverse and tolerant future:

A Duke University official has been arrested and charged with offering a 5-year-old boy for sex.

Frank Mccorkle Lombard, the school's associate director of the Center for Health Policy, was arrested Wednesday, June 24 after an Internet sting, according to the FBI's Washington field office and the city's police department. …

Authorities said that Lombard tried to persuade a person — who he did not know was a police officer — to travel to North Carolina to have sex with a child.

The detective's affidavit charges Lombard said in an online chat that he had sexually molested the boy. The court papers say Lombard also invited the undercover detective to North Carolina to have sex with the young boy and even suggested which hotel he should use.

…Lombard said he "was into incest" and had adopted two African-American children, the affidavit says.

Lombard has some advice for his fellow child rapists: black children are easier to adopt, and knock them out with Benadryl before molesting them. The children were adopted by Lombard and his homosexual partner.

As you'll recall, when a drunken prostitute made false rape accusations against Duke lacrosse players, the faculty loudly denounced them, with no need for evidence. But the moonbats aren't so loud when the rape is real.

Death Wish

EPA Kills Five Power Plants Along Road to Darkness

A view of North Korea by night demonstrates where this is heading.

by Dave Blount 

Barack Hussein Obama promised before the election that he would bankrupt the coal industry that provides us with 57% of our electricity. In an appalling testimony to the suicidal stupidity of 53% of the population, he was elected anyway. He's using the malignant EPA to make good on his promise:

Utility giant American Electric Power said Thursday that it will shut down five coal-fired power plants and spend billions of dollars to comply with a series of pending Environmental Protection Agency regulations. …

In a statement outlining its plan to comply with EPA's regulations, AEP said it would need to retire 6,000 megawatts of coal-fired power generation in the comingyears.

The company, one of the country's largest electric utilities, estimated that it will cost between $6 billion and $8 billion in capital investments over the next decade to comply with the regulations in their current form.

The costs of complying with the regulations will result in an increase in electricity prices of 10 to 35 percent and cost 600 jobs, AEP said.

Just the ticket to revive our debt-ravaged economy.

Without the electricity generated by coal, what is going to make the farcical electric carswe're forced to subsidize go? Maybe the EPA will impose a regulation dictating that they have to run by magic.

The winter of discontent

Europe’s Real Problem

It’s not just debt, it’s productivity.

 

by Charles Roxburgh

Europe’s economy is weak and growing weaker. Many households will be trying to pay back debts rather than spending, and aging populations will bear down on consumption too. Austerity has replaced stimulus as the watchword of governments seeking to pay down deficits.

The real problem behind the debt, however, is productivity. Europe’s per capita GDP is 24 percent lower than that of the United States, a gap that amounts to a total of $4.5 trillion in annual income. While Europe has made a societal choice of more leisure time over more work, the major reason for slower growth is a widening productivity gap. Even when Europeans do work, they work less productively. The only way to unleash the dynamism and growth Europe needs to pay its debts is a new wave of structural reform.

Europe’s productivity had been catching up with that of the United States for decades, but the gap has been widening since the mid-1990s. New research by the McKinsey Global Institute finds that Europe would need to accelerate productivity growth by about 30 percent (or opt to work more) just to maintain past GDP growth—and by much more to start catching up to the U.S.’s per capita GDP.

Skeptics will argue that Europe has long balked at tough reform, and its reluctance is peaking in these austere times. Look at the public protests that erupted when the French government proposed raising the retirement age. But the skeptics may be wrong.

Europe has undergone a quiet revolution over the past 10 to 15 years. Easing labor-market rules has led to a 6 percentage-point increase in labor-market participation in 20 years, with many more women and seniors working. Contrary to popular perception, Europe has become a more dynamic job machine than the United States, creating 24 million jobs between 1995 and 2008, compared with 20 million in the United States.

Europe is reforming in its own style, not by importing ideas. In less than 20 years, the share of employment accounted for by seniors has gone up 24 percent in the Netherlands and 21 percent in Germany as a result of new incentives, training, and protection from ageism among employers. Sweden has brought 88 percent of women into the workforce—the highest share of any developed economy—by providing affordable child and elder care. By tying parental-leave benefits to earnings, and day care to jobholding, Sweden provides a strong incentive to work. In addition, only 14 percent of Swedish working women are in part-time jobs, a very low share that is due in large part to smart tax incentives. So reform is underway. The challenge is to push it forward. Action on three fronts is vital: further labor-market reform, boosting the productivity of service sectors, and investing in innovation.

Despite recent strides, Europe still lags the United States on most key indicators of labor-market competitiveness. It has fewer seniors ages 55 to 64 in the workforce (by 51 percent to 65 percent), a higher unemployment rate (averaging 2.5 percentage points higher over the past 10 years), more women working part time, and vacations and other paid leaves that average five weeks more per year than in the United States. If all of Europe were to match European best practices in key labor-market policies, it could raise its rate of labor utilization by 9 percent—without touching vacation or increasing hours worked per week.

Service industries account for two thirds of the productivity-growth gap with the United States. Retailing, for instance, suffers from rules that make it difficult to open new stores when and where it makes the most sense. Dutch towns still have the power to prevent furniture stores from selling televisions. Yet when Sweden liberalized zoning rules in retail, the result was a big boost to productivity. If Europe could spread best practices across the regional service industry, it could add 20 percent to overall productivity. The third front—investing in R&D and innovation—would lay a foundation for growth in emerging economies and industries, like clean tech.

Europe mustn’t use tough times as an excuse to delay reform. The model is Sweden, which responded to an economic crisis in the 1990s with a wave of reform from which it still benefits today. Europe should seize this crisis as an opportunity to transform the entire region.

The age of indignation

The Global Temper Tantrum

Fury is spreading. But the mobs ignore the real culprit behind broken economies.

 

by Niall Ferguson

This is the age of indignation. Politics in the Western world are becoming more emotional—because our problems are so intractable.

Recently a Chilean friend of mine was at a bullfight in Barcelona, where a spectator threw a bottle at one of the picadors. The police duly arrested the bottle thrower. But as he was led away, the crowd began to boo the policemen and to chant “Libertad! Libertad!”

This captures the illogical mood of the moment. Leave aside your feelings about bullfighting, because this could equally well have happened at a tennis match. Throwing a bottle at a participant in a sporting event is a dangerous criminal act. Someone who behaves that way deserves to be arrested. Yet the crowd’s feelings of hostility to the police trumped that rational view. The arrested man became a symbol of oppressed liberty, despite the fact that everyone had witnessed his crime.

“The Indignant”—los Indignados—are now a distinct group in Spain. They are the young people who take to the streets to protest against high unemployment, government spending cuts, and anything else that ticks them off. But this is no longer a purely Spanish phenomenon. The Indignant are everywhere. They were in the streets of Athens, throwing-Molotov cocktails at police while the Greek Parliament debated its latest austerity budget.

On July 1 the Indignant were marching and yelling outside my London office, too. What was this lot indignant about? Yes, cuts once again—to be precise, the British government’s plan to reduce public-sector employees’ pensions and increase their retirement age.

Indignation takes different forms in different places. In Europe it’s directed against cuts in public spending. In the United States it’s directed against tax hikes, which are anathema to the Tea Party.

What all the Indignant have in common is the refusal to address squarely the problem that nearly all Western countries face. That problem is that the welfare systems that evolved in the mid-20th century are unaffordable under the demographic and economic circumstances of the 21st century. The financial crisis has merely exacerbated what was already a severe structural crisis of public finance, boosting deficits while slowing growth.

The scale of the challenge ranges from the really, really hard to the absolutely impossible. According to the Organization for Economic Cooperation and Development, just to stabilize its debt the U.S. government needs to turn its current primary deficit of 7 percent of gross domestic product into a primary surplus of 1.4 percent. That’s roughly double the fiscal squeeze Greece needs to make.

In a rational world, electorates would recognize the need both to reduce entitlements and to increase revenue. But indignation isn’t rational. The Tea Party position is that the deficit should be reduced without any increase in revenue, even the elimination of tax breaks and loopholes that all serious economists now define as “tax expenditures” (because they essentially give revenue away to lucky special interests). At the same time, many Tea Party supporters appear reluctant to accept that cuts would apply to their own entitlements as well as everyone else’s.

Even more self-contradictory is the readiness of young people in Europe to back the interest groups opposed to spending cuts. The recent demonstrations in London were essentially on behalf of teachers relatively close to retirement. “It’s for the future generations that we’re doing this,” claimed one protester, “not just for ourselves. We’re doing it for everybody.” Baloney. It’s the government that has the future generations in mind, not the protesters. The young people who join in such protests are suckers, demonstrating for the right to pay much higher taxes in the future.

Today’s proponents of austerity are like toreadors, fighting the raging bull of debt. I can understand the vested interests throwing bottles at them. It’s the cheers of the Indignant that are bizarre.

Gaming their way to welfare

Suckers of the World

By John Derbyshire

Americans are nice people. We are generous and open-hearted. Our nation is big and lush, and most of it is empty. (Our mean population density of 83 per square mile ranks us number 179 out of 240 on this list. Ireland is twice as dense; Turkey, three times; Bangladesh, thirty-five times.) The most cherished of our founding documents declares that “all men are created equal.” Our dominant religion teaches that “unto whomsoever much is given, of him shall be much required.” Plainly we are among those to whom much has been given. It follows that much is required of us; and since all men are created equal, our bounty must be extended to all without distinction.

These national attitudes look somewhat different from the outside. Our pride in our nation and our willingness to share it strikes foreigners as touching, if a bit naïve. When Bertrand Russell visited the USA in the late 1890s he recorded puzzled amusement at the way Americans asked him how he liked their country. It was, he said, as if someone were to ask: “How do you like my wife?”

Americans’ eagerness to be liked and admired has a great upside for foreigners: We are extravagantly keen to have them come settle here. We take their desire to do so as an expression of flattery, confirming our own high opinion of ourselves.

The downside of our cheerful open-handedness is that it makes the USA a great magnet for freeloaders and unscrupulous lowlifes. In the news, or flitting around the edge of it, at any given time are always half a dozen stories of such.

You don’t have to dig deep for these stories. A couple of them are always there in the first few pages of your newspaper or up front on the Drudge Report. Not uncommonly, one of them is a headliner. Among the current crop:

The accuser of Dominique Strauss-Kahn. This lady arrived from the West African nation of Guinea in 2004 claiming asylum on the grounds that she had been persecuted and raped in that country, and her husband had been murdered, because of their opposition to the ruling regime.

None of it was true.

Prosecutors disclosed that the woman had admitted lying in her application for asylum from Guinea. According to their letter, she “fabricated the statement with the assistance of a male who provided her with a cassette recording” that she memorized. She also said that her claim that she had been the victim of a gang rape in Guinea was a lie.

In order to make that cassette recording, someone had to know exactly what to say in order to game the asylum process. Obviously someone does know.

In fact, tens of thousands of people worldwide know. US immigration, asylum, and refugee-resettlement procedures are subjects of intensive study in Third World countries. I doubt if one US citizen in ten thousand could tell you the difference between a K-1 visa and an H-4 visa; in Jakarta, Bogotá, Islamabad, and Ouagadougou, they speak of little else.

In any Third World bazaar there is a street of vendors offering help with getting into the USA. Some of the help is of a legitimate kind: translation services, college applications, connection with employers. Some is more…creative. It is highly unlikely that the cassette in the New York Times story about DSK’s accuser was made for the benefit of that one woman. More probably the production of such teaching aids is a major industry in West Africa.

Jose Antonio Vargas, a Web journalist at the Huffington Post and formerly a print journalist at the Washington Post, unmasked himself as an illegal immigrant in a long piece for The New York Times.

The latest comment by Paul Gottfried

The Wannabe Hamilton

By P. Gottfried

On June 13, the resident conservative (which means additional leftist) on The New York Times’ editorial page, David Brooks, revealed his plan for “national greatness,” which Brooks designates as the “Hamiltonian agenda.”

For those who may have forgotten, “national greatness” was a theme that Brooks’s pals Bill Kristol and Robert Kagan discussed at length in The Weekly Standard and Foreign Affairs in the 1990s. Back then this term meant a neo-Wilsonian foreign policy characterized by the militaristic promotion of our updated version of “democracy” and “human rights.” Although twenty years ago “national greatness” was not explicitly about glorifying our federal welfare state, it was implicitly about feeding a big government that could mobilize a contented population for war.

Brooks has filled in the vacant spaces by telling us what kind of “industrial policy” we’ll need in order to “avert national decline.” The two national parties, we are told, are useless for this purpose. The Republicans “use policies as signaling devices—as ways to reassure the base that they are 100 percent orthodox and rigidly loyal.” The Democrats “offer practically nothing. They acknowledge huge problems like wage stagnation and then offer…light rail! Solar panels!” While Brooks wants a “multifaceted reinvigoration agenda,” the two parties merely play to their bases while ignoring bigger issues.

Brooks’s alternative to the “two Soviet refrigerator companies, cold-war relics offering products that never change” is a variety of federal incentives that would presumably put us back on the right track. They include early childhood education (for the working class), more technical education, infrastructure banks, funds aimed at “research” and enabling people to start businesses, lower corporate tax rates, a simpler taxation system, and a more talent-oriented immigration policy. As one looks at this list of nostrums, two things become apparent.

One: Implementing Brooks’s “targeted basket” would put the federal government into citizens’ lives even more than it already is. In fact, much of this intervention looks like what Obama is now doing under a different name—for example, lavishing money on selected businesses and research projects and having the feds provide expanded opportunities for “the working class” and its children. Recommendations about what sort of immigrants we should aim at bringing here can have no effect unless we can seal our still-porous border with Mexico. We won’t be in any shape to make significant choices about immigrants until our politicians in both parties stop kissing up to La Raza and other Latino pressure groups.

Two: Wouldn’t it be simpler to leave money in the private sector than to have the feds collect and redistribute it? Libertarians and paleoconservatives have been asking this question for decades, but it remains relevant. Perhaps Brooks wishes to have the government collect our money and plan its use since he believes public administration manifests our “national greatness.” If our country is exceptional and praiseworthy, as Bill Kristol has pointed out, it is because our marvelous welfare state does so many things. National greatness is about the regime under which we live. As Brooks and his friends are aware, that regime is one that redistributes earnings and engages in massive social engineering.

Brooks attempts to associate his plan with our first Secretary of the Treasury, Alexander Hamilton. Presumably Hamilton, who wanted to promote industries in the early American republic and who introduced our First National Bank, would have applauded what Brooks is advocating. Unlike his rival Thomas Jefferson, Hamilton did not glorify an agrarian America but called for a commercial republic. Appropriately, Hamilton’s statue still stands prominently on Wall Street, and Hamilton is buried a few blocks away in the cemetery adjoining Trinity Church.

Like most neoconservative publicists, Brooks sees Hamilton as someone who can be made to fit a modern big-government agenda. An author of our Constitution who lived in the incipient Big Apple and an early advocate of an effective central government, Hamilton has long been a hero to such government consolidators as Brooks and Kristol. But Hamilton’s legacy has been deceptively reconstructed, and he would not likely recognize himself in his latter-day disciples.

There is nothing to suggest this state-builder believed in a modern welfare state. What he supported was the emergence of a prosperous commercial class which would form an American nation-state’s basis. Toward this end, Hamilton favored tariffs and banks that would provide the right sort of people with investment credit. He certainly had no interest in redistributing income, getting the federal union to provide citizens with entitlements, or preaching “human rights.” Hamilton hated the French Revolution for the same reasons Edmund Burke did. He looked upon its global democratic mission (to use Burke’s phrase) as an “armed doctrine” that threatened societies that differed from revolutionary France. Jefferson long enthused over the French Revolution, but for Hamilton, according to his biographer Lawrence S. Kaplan, “Britain would be the bulwark protecting America from the wave of anarchy and atheism then overwhelming Europe.”

Although Hamilton was Washington’s adjutant during the American Revolution, he was at best a reluctant supporter of the American secession. As soon as the revolution was over, he stressed in a letter to his friend, New York Governor George Clinton, the need to fully restore property and rights to British Tories who had been driven out of the state. He believed these royalists, many of whom had fled to Canada, would make “useful citizens” in the new American republic. Hamilton admired the English constitution, with its hereditary monarchy, House of Lords, and national church. Nothing would have delighted his heart more than to have Washington and his descendants turned into American monarchs.

It is hard to imagine that Alexander Hamilton and David Brooks could have agreed on the nature of “national greatness” or on anything else significant. Brooks’s appeal to Hamilton is a game that the poorly educated play to get the even more culturally illiterate to embrace a program that supposedly originated with some long-dead great person. But the “Hamilton agenda” has no more to do with Hamilton than Brooks does with anything truly conservative.

Been there, done that

Krona capitalism

Sweden was a socialist dreamland. But then it woke up

By JAMES BARTHOLOMEW

Sweden is iconic, like Marilyn Monroe or Karl Marx. It is supposed to stand for something special: a kind of paradise where socialism and a big welfare state go together with being a successful, rich country. The left use it as a triumphant example: ‘See! It works in Sweden! High levels of equality, a big welfare state, socialism — and it works!’ People think that Sweden proves it is possible for a socialist welfare state to be prosperous, happy and civilised. They think it shows that relatively high levels of tax do not make much difference to economic performance. In fact, for the left, Sweden demonstrates that all that they dream of is possible.

An article in the Guardian of 16 November 2008 (‘Where tax goes up to 60 per cent, and everybody’s happy paying it’) shows the idea is alive and well. The left can’t work out why similar ideas in Britain have never led to the same success.

The main trouble is that, when Sweden was as close as it ever has been to being a socialist welfare state, it went bust. For a while it may have seemed like a great model, but the Swedish government ran out of money.

Why? Because Sweden found, like Britain, that if you pay people to be unemployed, take early retirement or be sick, you get a gradually increasing number of people who claim the relevant benefits. And if you have sky-high taxes, people don’t work as hard, or they cheat, or they leave.

Then came the financial crisis of the 1990s. Unemployment surged, until there were simply too many well-remunerated claimants for too few taxpayers. More than one out of every five people of working age was on one benefit or another.

The ideal of Sweden still worshipped by the left did not actually work. But Sweden is different from Marilyn Monroe and Karl Marx. Those icons are dead and unchanging. For Sweden, though, life went on. Going bust could not be the end of the story. The country woke up from the dream and had to face reality. This is the untold story of Sweden. It went bust and then it made changes.

It toughened up its benefits. The money you could get for unemployment benefit was reduced. So was the length of time for which you could get it. A claimant is required to take menial jobs more quickly than before. This is a process that has applied to virtually all the benefits and continues to this day.

The Swedes gave up a tradition lasting a generation. They started voting for non-socialist governments. These parties have won the past two elections in a row. In response, the Social Democrats have joined in the movement towards greater realism. It is reminiscent of Labour giving up on state ownership.

There has been a series of measures over the past 20 years aimed at making Swedish capitalism freer and more effective. You could call them Thatcherite reforms. A variety of industries from trains to taxis have been deregulated. Competition has been allowed in business post. Farm prices are now set by the market. The production of electricity has been opened to competition. Taxation is complicated because there are local as well as national taxes but broadly speaking, the top rate of tax has been brought down from over 80 per cent to 60 per cent.

Then Sweden went beyond what Margaret Thatcher introduced in Britain. It went further in introducing choice and competition in healthcare and education. Free schools — schools started by parents, teachers or private companies which get paid the same amount per pupil as government schools — now educate 10 per cent of children taught in Sweden. And the proportion is still growing. One director of a private school company in Stockholm told me that he expects the proportion easily to reach 30 per cent in the next 15 years.