Europe’s Screwed Generation and America’s

It Can Happen in US 

As the boomers have held on to generous jobs and benefits, their children have given up on raising families

by Joel Kotkin  

In Madrid you see them on the streets, jobless, aimless, often bearing college degrees but working as cabbies, baristas, street performers, or—more often—not at all. In Spain as in Greece, nearly half of the adults under 25 don’t work.

Call them the screwed generation, the victims of expansive welfare states and the massive structural debt charged by their parents. In virtually every developed country, and increasingly in developing ones, they include not only the usual victims, the undereducated and recent immigrants, but also the college-educated.

The End of the Euro

A Survivor's Guide

The ECB has always vehemently denied that it has taken an excessive amount of risk despite its increasingly relaxed lending policies. But our estimate says differently.

By Peter Boone and Simon Johnson

In every economic crisis, there comes a moment of clarity. In Europe soon, millions of people will wake up to realize that the euro-as-we-know-it is gone. Economic chaos awaits them.

To understand why, first strip away your illusions. Europe’s crisis to date is a series of supposedly “decisive” turning points that each turned out to be just another step down a steep hill. Greece’s upcoming election on June 17 is another such moment. While the “pro-bailout” forces may prevail in terms of parliamentary seats, some form of new currency will soon flood the streets of Athens. It is already nearly impossible to save Greek membership in the euro area. Depositors flee banks, taxpayers delay tax payments, and companies postpone paying their suppliers — either because they can’t pay or because they expect soon to be able to pay in cheap drachma.

The Cause of Inequality: Family Breakdown

American Caste

By Kay S. Hymowitz
When Charles Murray’s best-selling Coming Apart: The State of White America, 1960–2010 appeared a few months ago, the book’s fictional working-class neighborhood, Fishtown, became one more battleground in America’s 50-year-old culture war. Fishtown was representative, Murray argued, of a new white underclass in America—one produced by cultural decline, especially the collapse of marriage. Critics objected that the real source of misery in the nation’s Fishtowns wasn’t a lack of marriages; it was the extinction of manufacturing jobs. The disagreement was familiar to culture-war veterans: conservatives versus liberals, family breakdown versus dearth of good jobs, culture versus economics, David Brooks versus Paul Krugman.

A Continental Fantasy

Simple-mindedness and megalomania characterize the “European project”

By Theodore Dalrymple

On a flight from Copenhagen to Brussels, I read two publications that I see infrequently: the International Herald Tribune and Le Soir, the principal Belgian newspaper in French. Both, not surprisingly, had much coverage of the European crisis, and both used an expression that, to me, has a sinister ring: the European project.

As it happens, I was once interviewed by one of Le Soir’s best-known journalists, who asked me whether I was in favor of the European project. I said that I would answer if she would tell me what it was. She did not, and we moved on to other subjects. Whatever the European project may be, those who don’t embrace it wholeheartedly—with a fervor that can only be described as mystical, considering that no one can explain or define it in simple terms— are depicted not as skeptics, but as enemies. Thus in Le Soir, we read: “Only the enemies of the Euro and of the European political project, notably the City of London, dream of such a cataclysm [the break-up of the single currency]!”

We're saved!

Official Panic Hymn Intoned by Famous Out-of-Tune Choir

by Pater Tenebrarum

In Europe, everybody seemed eager to get his 2 cents in as the crisis once again intensified.

Alexis Tsipras again promised his followers the impossible – namely that he alone could square the circle and deliver both more spending by the government by 'canceling the bailout' and let Greece retain the euro – whereby it should be noted that no-one can be 100% sure if he will or won't be able to blackmail the rest of the euro-group, but our guess remains that the answer is actually no.

War by Other Means

Stuxnet and Flame 

By PHILIP GIRALDI

I was one of the first to report about the source of the Stuxnet computer virus in The American Conservative magazine back in December 2010.  It was created in an Israeli laboratory at its Dimona nuclear facility. The New York Times picked up the story over a year later.  We have now learned, from a deliberate leak, that the US National Security Agency and Department of Energy helped the Israelis to develop the virus and that an infected component was placed in the Iranian computer network with the assistance of the CIA (apparently using an agent affiliated with the Mujaheddin e Khalq supplied by the Israelis).

Doves or Pigeons?

Strictly for the Birds

by Theodore Dalrymple 

From the window in my study I can see the bird table in our small garden. Although I am no ornithologist, I can tell a hawk from a handsaw, or rather a thrush from a jackdaw, and the behaviour of the birds amuses me greatly. It sometimes distracts, or perhaps I should say diverts, me from what I should be doing.

Every morning and evening I put out seeds for them. We have reached such a state or refinement of consumerism that even seed mixture sold for the birds is now attractive and even appetising; it looks like muesli for very small people, and is no doubt fortified with all kinds of minerals and vitamins. I think there have probably been times in human history when people were given worse to eat.

Repudiating the National Debt

Paying off a national debt would quickly bankrupt the entire country

by Murray N. Rothbard, June 1984

In the spring of 1981, conservative Republicans in the House of Representatives cried. They cried because, in the first flush of the Reagan Revolution that was supposed to bring drastic cuts in taxes and government spending, as well as a balanced budget, they were being asked by the White House and their own leadership to vote for an increase in the statutory limit on the federal public debt, which was then scraping the legal ceiling of one trillion dollars. They cried because all of their lives they had voted against an increase in public debt, and now they were being asked, by their own party and their own movement, to violate their lifelong principles. 

Statism Means Culture War

From gay marriage to education, state intervention pits citizen against citizen

By ROBERT P. MURPHY

The news today is full of controversies having religious and cultural overtones, especially gay marriage and insurer coverage of contraception. Historians, philosophers, jurists, and theologians all make different and important contributions to the national discussion. Free-market economists also have something to add: these conflicts are greatly exacerbated by the huge and growing role of the state in our lives, and these issues will never be resolved so long as the government displaces other institutions.

Consider the issue of gay marriage. When pressed for justifications, its supporters make an “equal treatment” argument with reference to historical racial segregation, but then they also typically offer practical arguments about unfair tax treatment, life-insurance benefits, child custody, and so forth. None of today’s supporters of gay marriage go so far as to say, “And this is why the government should imprison any religious official who refuses to marry a gay couple.”

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.