If Europe goes down it's their fault

Don’t let the euro liars shift the blame

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

The Commentator

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

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

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

Cold War 2.0 Heating Up

The US has lost Cold War II before it begins

by Dr. Paul Craig Roberts 

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

Europe's Grim Choices

Βad ideas, once embraced, become entrenched

By Robert Samuelson

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

Europe's Bailout Costs In One Chart

€2 Trillion And Counting

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

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

UK doctors strike against $ 83.000 pension deal

Another reason to scrap NHS

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

The Commentator

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

The Fat Lady Is Clearing Her Throat

Shouting "wolf" one too many times

by Mark Grant

Once at a social gathering, Gladstone said to Disraeli:

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

Disraeli replied,

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

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

"Why do they hate us?"

 Breaking the golden rule

By Stephen M. Walt

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

Moral Reasoning and Public Discourse

The Tribal Mind

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

By Arnold Kling

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

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

Government subsidies are destroying the US education system

Restored Competition Will Lessen Inequality

By Luigi Zingales

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

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

Declining Birthrates Key to Europe's decline

Falling Births, Falling Fortunes

by Joel Kotkin

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

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

Time Bomb?

Banks Pressured to Buy Government Debt

By Jeff Cox

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

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

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

Say's Law of Markets

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

by Murray N. Rothbard

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

Kiss NASA goodbye

SpaceX’s Achievement Should Prod NASA to Think Big

By Bloomberg Editors

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

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

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

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

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

An Era when the sky was the limit

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

By Brad Knickerbocker,

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

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

The 5th Avenue to Serfdom

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

By HOLMAN W. JENKINS, JR

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

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

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

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

Austerity With Growth?

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

By Nathan Lewis

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

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

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

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

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

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

The Neo-Keynesian Trap

Cheap, abundant credit stimulates the wrong kind of growth

By CHARLES HUGH SMITH

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

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

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

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

Austerity With Growth?

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

By Nathan Lewis

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

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

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

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

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

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

Minority America

How do I fit in?

by Joel Kotkin

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

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

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

Merkel Rejects Debt Sharing as Obama Urges End to Crisis

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

By Brian Parkin and Ben Sills

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

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

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

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

European ‘Cloud’

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