Is This the End of “One Europe”?

Tribalism, radicalism and socialism are the growth stocks of the new Europe

By Patrick J. Buchanan

How Europe’s crisis resolves itself as yet remains unknown.

But with Sunday’s returns from France and Greece, the mega-trends on the Old Continent are unmistakable. And for the European Union, they are ominous.

Nationalism — be it economic nationalism or ethnic nationalism — is ascendant. Transnationalism and multiculturalism are in headlong if not irreversible retreat. The European project is itself imperiled.

Austerity = Reduced Spending Hikes

Hysterity! Global Panic about "Austere" 9 Percent Spending Hike

By Tim Cavanaugh

America’s economic boom is the latest evidence for anti-austerity arguments.

Measured according to the strict two-quarters-of-GDP macroeconomic standard, the United Kingdom is now back in a recession. According to this same standard, the United States is not in a technical recession. 

At Business Insider, Joe Weisenthal cites the UK recession to continue a theme advanced by BI founder Henry Blodget yesterday.

"Basically we have a life test of a country that wants to do what conservatives in the US want to do: reduce national debt," Weisenthal writes. "Doing so is a growth disaster."

Sounds like the contrast between the judicious Keynesianism of President Barack Obama and the small-government extremism of Prime Minister David Cameron is pretty stark, right?

The European Union has finally hit a brick wall

Hollande Wins and Europe Descends Into No-Man's Land

By Paul Roderick Gregory,

Socialist candidate Francois Hollande has won the French election as expected. His high-tax, pro-stimulus, welfare-state-protection platform, in effect, scuttles the Eurozone rescue program engineered by Merkel and a reluctant Sarkozy.

Hollande’s election leaves the European Union with three stark choices, none of which are good: 1) Germany and the European Central Bank cave and bail out any and all debtor countries under the cover of some fictitious future fiscal discipline, or 2) The Eurozone countries muddle along from one band-aid fix to the next as the bond vigilantes breathe down their necks while they hope to catch a break, or 3) Germany and the Nordic states withdraw from the Eurozone to their own currency. The rest of the Eurozone can stay on the devalued Euro or revert to their own currencies.

Where Do Real Jobs Come From?

The pentagon goes rogue…
By Bill Boner

“Jobs engine sputters again in April,” reports the weekend Wall Street Journal.

What kind of humbug recovery is this? Bloomberg adds:

Estimates for the jobless rate, derived from a separate survey of households, ranged from 8.1 percent to 8.3 percent. Unemployment has exceeded 8 percent since February 2009, the longest such stretch since monthly records began in 1948.

Of course, it’s much worse than that. John Williams puts the real unemployment rate — the people who want jobs and can’t find them — at 22%…the same as the unemployment rate in Spain. And just 3% points lower than in the Great Depression.

The Serial Bubble Blowers

Borrowing to spend is everyone’s favorite game

By Addison Wiggin

The shrinking dollar is a modern problem. The U.S. dollar has been shrinking since the inception of the Federal Reserve — the very crew assigned the task of maintaining its value. Of late, the decline is accelerating at an alarming rate.

For many Americans, the suggestion that the dollar is losing value is unthinkable — even unpatriotic. The problem is not simply a lack of understanding about the nature of wealth and investment used to sustain it.

Our policy makers and economists make no distinction between wealth created through savings and investment in the real economy versus “wealth” created in the markets through asset bubbles brought about by credit policies.

The Pragmatic Republic of China

The Great Fall of China

By Peter Coy

Qi hu nan xia, goes a Chinese proverb: When one rides a tiger, it is difficult to dismount. For the leaders of China’s 1.3 billion people, the import is clear. Stay on the tiger’s back, issue commands, and hope like hell the beast doesn’t turn on you. Over the last quarter-century that approach has served the mandarins of the Communist Party well. China became an economic marvel and staked a claim as the world’s next superpower. Civil liberties, social development, environmental husbandry, and political transparency were subordinate to the imperatives of growth. Increasing complaints about the avarice and gangsterism of government officials could be dismissed as local problems as long as an enlightened elite was thought to be guiding the state with a steady hand. Even when under pressure to reform, China’s leaders could reassure themselves that their grip on power remained secure.

The end of home ownership

The End of An American Dream?

By Walter Russell Mead

The bursting of the housing bubble caused huge financial distress for people all over the United States, and the destruction continues. Millions of people still have negative equity, others have walked away from their homes, and millions of others are coming to terms with houses worth much less than they thought.

Over at the Wall Street Journal, Daniel Gross is asking an important question: is the age of home ownership in America coming to an end — and, if it is, is that good thing?

Looting, the ultimate stage of Socialism

Rogue Democrats Loot Detroit As Nation Sleeps

BY WALTER RUSSELL MEAD

Few readers will be surprised to learn that decades of incompetence and entrenched corruption in Detroit’s government have not only helped wreck the city; firms linked to former Democratic mayor Kwame Kilpatrick also looted the pension fund.

The latest scandal, which leaves even hardened observers of the abysmal Democratic machine that has run the city into the ground bemused, involves a real estate firm which gave the felonious mayor massages, golf outings, trips in chartered jets and other perks as this enemy of the people went about his hypocritical business of pretending to care about the poor while robbing them blind. The firm, apparently run by a sleazy low class crook named by the reprehensible Kilpatrick to be the Treasurer of what was left of Detroit’s finances, used Detroit pension funds to buy a couple of California strip malls. Title to the properties was never transferred to the pension funds, and they seem to be out $3.1 million.

Next, Freedom of Speech

Taking a scythe to the Bill of Rights
By George F. Will

Controversies can be wonderfully clarified when people follow the logic of illogical premises to perverse conclusions. For example, two academics recently wrote in the British Journal of Medical Ethics that “after-birth abortions” — killing newborn babies — are matters of moral indifference because newborns, like fetuses, “do not have the same moral status as actual persons” and “the fact that both are potential persons is morally irrelevant.” So killing them “should be permissible in all the cases where abortion is, including cases where the newborn is not disabled.” This helpfully validates the right-to-life contention that the pro-abortion argument, which already defends third-trimester abortions, contains no standard for why the killing should be stopped by arbitrarily assigning moral significance to the moment of birth.

The pig is no better looking because you paint it blue

Lies, Damned Lies And Statistics

“There are lies, damned lies and statistics.”

                                        -Mark Twain

By Mark Grant

It has often been said by me, over the last ten years, that if one cannot ascertain the truth then one should not put money in that enterprise. It seems like a relatively simple perscription that I have formulated. There is nothing false or complex in this equation. Probably a number approaching one hundred percent of all of the world’s financial institutions would agree with the general precept and yet; that is not how some behave on an ongoing basis which I find quite astonishing. It is surely a matter of human psychology and of accepting what we are told rather than making a realistic appraisal of the facts. It continues to amaze me that various groups continuously try to reorganize the truth to their own benefit, falsify the truth,  on the assumption that you will believe what they tell you without investigation.

“And oftentimes excusing of a fault doth make the fault the worse by the excuse.”

                                      -William Shakespeare

What I find particularly difficult is what they are doing in Europe and continue to do because they are formulating systemic lies and they are doing it knowingly, purposefully; with the single motivation being to fool people. It can no longer be said that it is not systemic as the European Union does not object, has not objected, so that even Germany and the Netherlands and Finland have become accomplices to the schemes. Because the State says it is so does not make it so and this is a history lesson that we all should have learned long ago!

Why Aren’t Banks Lending to Small Business?

 Ask Bernanke

Banks profit by making loans, not refusing them. So why are banks making fewer loans to small business these days?

By Scott Shane

On March 29, at a lecture at George Washington University, Federal Reserve Chairman Ben Bernanke innocuously remarked  that lately “small businesses have … found it difficult to get credit.” Too bad that none of the students at the lecture thought to ask him why. A case can be made that the Fed is partially responsible.

Bankers, small business owners, and policymakers all agree that small business lending has declined substantially since before the financial crisis and Great Recession. Business loans under $1 million fell 13 percent between June 2007 and June 2011, and the amount lent has declined 19 percent when measured in inflation-adjusted terms, Federal Deposit Insurance Corporation (FDIC) statistics reveal.

Disabling America

How more and more ‘disabled’ Americans affects the shrinking U.S. labor force

By James Pethokoukis

Now that the labor force participation rate is at its lowest level since 1981, it’s a good time to take another look at how the rising number of disabled Americans affects the official size of the workforce. Here are disturbing facts from Bloomberg:

– The number of workers receiving Social Security Disability Insurance jumped 22 percent to 8.7 million in April from 7.1 million in December 2007, Social Security data show.

– That helps explain as much as one quarter of the decline in the U.S. labor-force participation rate during the period, according to economists at JPMorgan Chase & Co. and Morgan Stanley.

When coercion and theft are considered moral, anything is possible, and none of it good

Is An Economic Deluge Nigh?

by David Galland

If history has taught one certain lesson, it is that the less fettered an economy, the better humankind is able to do what it does best: run from trouble and run toward opportunity. In this way mistakes are quickly resolved and progress assured.

Conversely, the deeper the muck of regulation, mandates, taxes, subsidies and other bureaucratic meddling, the slower we humans are in following our natural instincts until the point that progress is slowed or even stopped.

It is said that history doesn't repeat itself, but it often rhymes. In the current circumstances, it appears that enough time has passed that current generations have completely forgotten the critical connection between the ability of humans to freely pursue their aspirations and economic progress.

The Paucity Of Hope

By Monday there will have been a real shift in the political landscape in Europe

By Peter Tchir

In Greece, there is a real backlash against the alleged bailout.  The bailout was never about Greece.  In the end, with PSI, it wasn't even about the banks.  It is some convoluted concoction brought about by the arrogance of politicians to admit they were wrong, "legacy" preservation, hubris, a complete lack of understanding of credit markets, and an inexplicable aversion to contemplating and exploring all actual possibilities. This could become disruptive as stances taken by the ECB and IMF will likely be attacked, rightfully so.  The decision to accept so much debt in an effort to recapitalize four failed banks will also be questioned.  In the end, hopefully the people will win concessions and have a more optimistic future.  Hopefully the ECB will get off its high horse and accept losses on their decisions.  With a balance sheet as bloated as theirs, they have plenty of "carry" to pay for those losses.  Maybe the IMF will stop pretending Europe is different and treat European nations like other countries where they have actually helped - but that help almost always forced the nations to restructure rather than pretend somehow that all will get better with the existing debt burden. 

The Problem With Hollande

Growth can not be decreed

François Hollande and his Socialist friends are a particularly mendacious and destructive sort of demagogue: They are purporting to help us by increasing our minimum wages rather than liberating our energies; they will punish the rich rather than encourage all of us to engage in productive efforts; they say they will spend more to stimulate "growth"—effectively, to buy more consumers—instead of letting us choose the best uses for our own resources.

Socialism has never succeeded in its extreme form, communism. As the past several years in Europe have shown, it does not work in its milder form of social democracy either. If European history teaches us anything, it is that prosperity is closely correlated to economic freedom.

The new composite America

Fauxcahontas and the melting pot

Martin Luther King dreamed of a day when men would be judged not on the color of their skin but on the content of their great-great-great-grandmother’s wedding license application. And now it’s here!

By Mark Steyn

But being yourself is never going to be enough in the new composite America. Last week, in an election campaign ad, Barack revealed his latest composite girlfriend – "Julia." She's worse than the old New York girlfriend. She can't even be herself. In fact, she can't be anything without massive assistance from Barack every step of the way, from his "Head Start" program at age 3 through to his Social Security benefits at the age of 67. Everything good in her life she owes to him. When she writes her memoir, it will be thanks to a subvention from the Federal Publishing Assistance Program for Chronically Dependent Women but you'll love it:Sweet Dreams From My Sugar Daddy. She's what the lawyers would call "non composite mentis." She's not competent to do a single thing for herself – and, from Barack's point of view, that's exactly what he's looking for in a woman, if only for a one-night stand on a Tuesday in early November.

Shattering The American Dream

The US Government’s Ponzi Scheme

by Richard Evens, Larry Kotlikoff, and Kerk Phillips

Fiscal sustainability and generational equity are two of the most pressing policy issues of our times. Yet these two highly related concerns are difficult to clearly define, let alone measure.

The standard metric of long-term fiscal imbalance is official government debt (Reinhart and Rogoff 2009). But, as shown in Green and Kotlikoff (2009), official debt, like time and distance in physics, is not a well-defined economic concept.

It’s yours, and it depends on your ability, your effort, your tenacity

Cuba’s little capitalists are ready to rumba

Customers are entertained as they dine inside the newly licensed restaurant "El Bedouino" in Havana April 1, 2012.

By Jeff Franks

When Ojacy Curbello and her husband opened a restaurant at their home in Havana in late December, not a single customer showed up.

It was a disheartening debut for Bollywood, the first Indian restaurant in the Cuban capital. Curbello worried that their dream of cashing in on recent reforms in this Communist-run country would collapse.

People eat at a popular low-end, privately licensed
 restaurant, or "paladar," in Havana.

The next day customers began trickling in. As word spread, the trickle became a flood. Many nights the couple had to turn people away or serve them at the family dining table and call in extra help. Today they are planning to increase the 22-seat capacity by expanding their 1950s home and putting tables and a bar in what is now their bedroom.

“It has been amazing how quickly it has taken off,” said Curbello, still looking slightly stunned. She sat with her husband, Cedric Fernandez, a Londoner of Sri Lankan descent, in the main dining area, hung with prints of Indian figures.

Bollywood’s story is an example of how life is slowly changing in Cuba since President Raul Castro launched a string of limited economic reforms in 2010.

Voter Weeding

Curley Effect in California

David Henderson

"James Michael Curley, a four-time mayor of Boston, used wasteful redistribution to his poor Irish constituents and incendiary rhetoric to encourage richer citizens to emigrate from Boston, thereby shaping the electorate in his favor. Boston as a consequence stagnated, but Curley kept winning elections."

This is from Edward L. Glaeser and Andrei Shleifer, "The Curley Effect," May 2002.

In their paper, Glaeser and Shleifer write:

Free Markets Vs The Dominion of Liars

"If I wanted America to fail"