Angela Merkel is Playing You For Fools

Taking Germany out of the picture

By Raoul Ilargi

Oh, come on, leave the girl alone already. First off, all those people talking about a solution for the eurozone need to finally understand there ain't no such thing. And whatever slim chance of a solution the most optimistic - delusional - among them may be so desperate to cling on to, at least they should recognize that Angela doesn't hold the keys to the city. She herself knows it: she's just another gal knocking at the gates, even if she's dressed as the empress.

A thought experiment: how would you solve the euro crisis if Germany were not part of the equation? If you would have to put the de facto German contribution to the puzzle at zero, neutral? What would you be left with then, and what steps would have to be taken to come to a solution? If the sole remaining big players were, let's see, France, Spain and Italy?

That changes the picture, doesn't it? Take Germany out and all you're left with is pretty much roadkill. Plus a motley crue of comparatively small barely breathing rodents like Holland, Finland and Austria.

Two Ways, But Where To?

Electoral fear may be the only medicine

By Anthony de Jasay

Having for a pulpit a regular column in the New York Times, Paul Krugman speaks to us as one who is really sure about what is what. He is also thoroughly exasperated by the pigheaded blindness of those of us who have their hands on the levers of policy and are responsible for the astronomical waste and needless pain inflicted on the economies on both sides of the Atlantic and especially on the Eurozone. His thesis is that we are actually in a state of genuine depression, involving a loss of potential output that hardly bears thinking about. The depression is of our own making and is unnecessary, serving no purpose. It ought to be and could be terminated forthwith.

When Push Comes to Shove ...

Roberts switched views to uphold health care law

By Jan Crawford

(CBS News) Chief Justice John Roberts initially sided with the Supreme Court's four conservative justices to strike down the heart of President Obama's health care reform law, the Affordable Care Act, but later changed his position and formed an alliance with liberals to uphold the bulk of the law, according to two sources with specific knowledge of the deliberations.

Roberts then withstood a month-long, desperate campaign to bring him back to his original position, the sources said. Ironically, Justice Anthony Kennedy - believed by many conservatives to be the justice most likely to defect and vote for the law - led the effort to try to bring Roberts back to the fold.

"He was relentless," one source said of Kennedy's efforts. "He was very engaged in this."

But this time, Roberts held firm. And so the conservatives handed him their own message which, as one justice put it, essentially translated into, "You're on your own."

Go figure, the poorest place in Europe is run by Communists

Next stop, Greece

By Simon Black

Ah Moldova… the poorest country in Europe, which just so happens to have had a Communist party majority in its parliament since 1998.

These two points are not unrelated.

Despite having achieved its independence from the Soviet Union over 20 years ago, the state is still a major part of the Moldovan economy…from setting prices and wages to media, healthcare, agricultural production, air transport, and electricity.

Under such management, it’s no wonder, for example, that Moldova has to import 75% of its electricity. It is the exact opposite of self-sustaining.

The government does a reasonable job of chasing away foreigners as well.

It's Never Been Better

As a Share of Household Spending, U.S. Has Most Affordable Food in World 

by Mark Perry

We hear reports all the time that real household incomes are stagnant or falling, the middle class is disappearing, household wealth has declined, and income inequality is rising.  All of those reports might make one think that the standard of living for the average American is bad and getting worse.  But here's one basic measure of a country's standard of living that shows Americans are better off than their consumer counterparts anywhere in the world: The share of household consumption expenditure on food consumed at home, see table below (USDA data here).  

Relative to our total household spending, Americans have the cheapest food on the planet - only 6.6% of the average household budget goes to food consumed at home.  European countries like Spain, France and Norway spend twice that amount on food as a share of total expenditures, and consumers in countries like Turkey, China and Mexico spend three times as much of their budgets on food as Americans.  

Oh, How the Mighty are Falling

"I like nonsense, it wakes up the brain cells"

By Mark Grant

While the markets look at what took place at the last Summit and rally; just wait, it won’t last long. The markets are getting mislead, one more time, by the spin that Europe places on events; by the focus that the giant European propaganda machine spits out from various sources again and again and again. You may recall, in the not too distant past, how the firewall was the thing, how the money needed to be bigger and how we were all led to believe that this giant, massive wall of Euros would protect the core nations of Europe. These nations included Spain and Italy without question and now the first mighty oak has fallen as Spain stepped up to the plate and swung the begging bat.

Saving everybody's face

The real victor in Brussels was Merkel

By Wolfgang Münchau

Mario Monti faced down the German chancellor and won the battle. He will survive a few more weeks or months in politics. It was clever of him to threaten a veto on something Angela Merkel badly needed. He had her in the corner. It was an example of classic EU diplomacy.

But this was only the foreground spectacle. If you look behind the curtain, you will find that, for Italy at least, nothing has changed at all. The European Stability Mechanism was already able to purchase Italian bonds in the open market. The instrument was there, but not used. The agreed changes are subtle. Italy must still sign a memorandum of understanding, and subject itself to the troika – the International Monetary Fund, the European Central Bank and the European Commission.

A New Health Care System

What can go wrong ?

Learning To Laugh At the State

The state, with all of its coercive power, can’t take that away

by James Miller

I’ll be the first to admit the incredible aggravation I feel whenever liberty is trampled upon by the state’s obedient minions.  Everywhere you look, government has its gun cocked back and ready to fire at any deviation from its violently imposed rules of order.  A four year old can’t even open a lemonade stand without first bowing down and receiving a permit from bureaucrats obsessed with micromanaging private life.  The state’s stranglehold on freedom is as horrendous as it is disheartening.

The worst part is that the trend shows no signs of slowing down, let alone reversing.  Politicians are always developing some harebrained scheme to mold society in such a way to circumvent the individual in favor of total dictation.  If it isn’t politicians, then it’s an army of unelected bureaucrats acting as mini-dictators.  As the late Swedish economist Gustav Cassel once lectured:

Is this 1936?

But while the Justices continued to dance in 1936, the music had died

By David Bernstein

Before the ACA decision was announced, many liberal pundits warned that the Supreme Court was on the verge of repeating its mistake in 1936, when the Court revealed that retained a 5-4 majority hostile to broad regulation of economic activity.  These pundits suggested that if the modern Court invalidated the ACA, it would be repeating the mistake of its conservative New Deal-era predecessor.  The Court would then face a backlash of the sort that led to FDR’s Court-packing plan, and ultimately to the famous “switch in time that saved nine.”

Egypt Holds Its Breath

The junta certainly has no intention of abandoning its vast economic empire

by Omar Ashour

“You are the authority, above any other authority. You are the protectors, whoever seeks protection away from you is a fool...and the army and the police are hearing me,” said Egypt’s president-elect, Mohamed Morsi, to hundreds of thousands in Tahrir Square. A man imprisoned following the “Friday of Rage” (January 28, 2011) took the presidential oath in Tahrir on a “Friday of Power Transfer” (June 29, 2012).

But he almost did not.

Ten days earlier, on June 19, I was with a group of former Egyptian MPs in Tahrir Square. One received a phone call informing him that a senior Muslim Brotherhood leader was coming to announce that the group was being blackmailed: either accept the constitutional addendum decreed by the Supreme Council of the Armed Forces (SCAF), which practically eviscerated the presidency, or the presidential election’s outcome would not be decided in the Brothers’ favor. An hour later, the senior figure had not shown up. “The talks were about to collapse, but they resumed,” said the former MP. “Hold your breath.”

The Origin Of Money

Who should create the monetary medium?

by John Aziz

Markets are true democracies. The allocation of resources, capital and labour is achieved through the mechanism of spending, and so based on spending preferences. As money flows through the economy the popular grows and the unpopular shrinks.  Producers receive a signal to produce more or less based on spending preferences. Markets distribute power according to demand and productivity; the more you earn, the more power you accumulate to allocate resources, capital and labour. As the power to allocate resources (i.e. money) is widely desired, markets encourage the development of skills, talents and ideas.

Planned economies have a track record of failure, in my view because they do not have this democratic dimension. The state may claim to be “scientific”, but as Hayek conclusively illustrated, the lack of any real feedback mechanism has always led planned economies into hideous misallocations of resources, the most egregious example being the collectivisation of agriculture in both Maoist China and Soviet Russia that led to mass starvation and millions of deaths. The market’s resource allocation system is a complex, multi-dimensional process that blends together the skills, knowledge, and ideas of society, and for which there is no substitute. Socialism might claim to represent the wider interests of society, but in adopting a system based on economic planning, the wider interests and desires of society and the democratic market process are ignored.

This complex process begins with the designation of money, which is why the choice of the monetary medium is critical.

Like all democracies, markets can be corrupted.

Whoever creates the money holds a position of great power — the choice of how to allocate resources is in their hands. They choose who gets the money, and for what, and when. And they do this again and again and again. 

Chief Justice Roberts and His Apologists

Some conservatives see a silver lining in the ObamaCare ruling. But it's exactly the big-government disaster it appears to be

By JOHN YOO

White House judge-pickers sometimes ask prospective nominees about their favorite Supreme Court justice. The answers can reveal a potential judge's ideological leanings without resorting to litmus tests. Republican presidential candidates similarly promise to appoint more judges like so-and-so to reassure the conservative base.

Since his appointment to the high court in 2005, the most popular answer was Chief Justice John Roberts. But that won't remain true after his ruling on Thursday in NFIB v. Sebelius, which upheld President Barack Obama's signature health-care law.

Justice Roberts served in the Reagan Justice Department and as a White House lawyer before his appointment to the D.C. Circuit Court of Appeals and then to the Supreme Court by President George W. Bush. Yet he joined with the court's liberal wing to bless the greatest expansion of federal power in decades.

Germany Cries: "Europe Is Coming For Our Money"

Greece Promptly Obliges

by Tyler durden

"Greece is an exception in the Euro Zone" - Angela Merkel, December 9, 2011

"Exception from ESM Seniority only applies to Spanish aid" - Angela Merkel, June 29, 2012

It took about a year, but finally Germany, with a little assistance from Merkel on Friday morning, has figured it out. And is now blasting it on the front pages of its various newpapers:

Europe is coming for our money!

What else does Die Welt say:

When economic historians in a few years determine the turning point at which the euro zone turned into a debt community, they may refer to the last Thursday night. In those dramatic hours when Angela Merkel after massive pressure from Italian Prime Minister Mario Monti and Spanish Prime Minister Mariano Rajoy buckled - and agreed to an agreement whose scope is now very difficult to estimate.

Government Medical "Insurance"

Everyone has the right to free medical care, but there is, in effect, no medicine and no care

by Murray N. Rothbard

One of Ludwig von Mises's keenest insights was on the cumulative tendency of government intervention. The government, in its wisdom, perceives a problem (and Lord knows, there are always problems!). The government then intervenes to "solve" that problem. But lo and behold! instead of solving the initial problem, the intervention creates two or three further problems, which the government feels it must intervene to heal, and so on toward socialism.

No industry provides a more dramatic illustration of this malignant process than medical care. We stand at the seemingly inexorable brink of fully socialized medicine, or what is euphemistically called "national health insurance." Physician and hospital prices are high and are always rising rapidly, far beyond general inflation. As a result, the medically uninsured can scarcely pay at all, so that those who are not certifiable claimants for charity or Medicaid are bereft. Hence, the call for national health insurance.

But why are rates high and increasing rapidly? The answer is the very existence of healthcare insurance, which was established or subsidized or promoted by the government to help ease the previous burden of medical care. Medicare, Blue Cross, etc., are also very peculiar forms of "insurance."

Laissez-Faire Learning

The Emperor is still naked

by David Greenwald

As a teacher in a public high school, I am daily confronted with the lamentable realities of state-monopoly education. Student apathy, methodological stagnation, bureaucratic inefficiency, textbook-publishing cartels, obsessive preoccupation with grades, coercive relationships, and rigid, sanitized curricula are just a few of the more obvious problems, attended by the cold-shower disillusionment and gradual burnout among teachers to which they almost invariably lead.

While outcomes such as these are certainly tragic, the process that produces them is not exactly the stuff of Greek theater. There is no climactic battle, no cathartic denouement, no salvific moral lesson to be taken home when the curtain falls, and seldom are there any readily identifiable heroes or villains. It is not a single, epic calamity but a thousand trivial defeats a day, each too mundane and too quickly obscured by its successor to be considered noteworthy. Like a bad movie, public education somehow manages to be both tragic and boring. It is only its cumulative result that would have impressed Sophocles.

What's Wrong With ObamaCare?

Here's A Partial List

IDB Editorial

Repeal: After a full day's reflection, we still feel that the ObamaCare ruling is an outrage. And while we acknowledge that it's now settled law, we believe that it's poor public policy and needs to be expunged from the books.

We're still nettled by the Supreme Court ruling that ObamaCare's individual mandate can stand constitutionally as a tax when Congress failed to define the penalty for failing to buy health insurance that way. But we can do nothing about that. The court has spoken.

What we can do, with an eye toward repeal, is point out just how malignant the Patient Protection and Affordable Care Act is.

Intellectuals adore tyrants

Rating and Ranking Our Presidents

by Patrick J. Buchanan

In 1948, Arthur Schlesinger Sr. wrote for Life magazine a controversial article on a subject that has been the cause of spirited and acrimonious debate ever since. He listed the consensus of our academic elite as to which American presidents had been Great, Near Great, Average, Below Average and Failures.

Leading the list were Abraham Lincoln, George Washington and FDR. Below, but also among the Greats, were Woodrow Wilson, Thomas Jefferson and Andrew Jackson. The Near Greats were Theodore Roosevelt, Grover Cleveland, John Adams and James K. Polk.

In 1962, Schlesinger followed with a New York Times piece, also based on the responses of historians, political scientists and journalists. This list had the same top seven. But Jackson had fallen to Near Great and Polk, who took the Southwest and California away from Mexico, had risen from 10th to eighth.

Arthur Schlesinger Jr. and others have since produced their own rankings. The latest in the field is Robert Merry, a lifelong journalist and now editor at The National Interest. In "Where They Stand: The American Presidents in the Eyes of Voters and Historians," Merry adds a new criterion. Did this president win a second term, and was he succeeded by a man of his own party?

Camus and Sartre’s intellectual fisticuffs

Much ado about almost nothing

A fascinating and entertaining new book explores the fractious relationship between two of the twentieth century's most compelling intellects.

by Tim Black 

The Boxer and the Goalkeeper: Sartre Vs Camus. The title of a new book by Andy Martin, a dude-like don from Cambridge University, isn’t that promising. Neither is the subtitle: ‘They should have been a dream team. It turned into a duel to the death.’ And the cover, just to ram home the gimmicky, ‘prize bout’ theme, is mocked up like a 1950s boxing promotion.

Thankfully, The Boxer is not as naff as it sounds. In fact, Martin has produced a rather lovely, sometimes playful, sometimes moving and often very droll take on the life, loves and, yes, thought of two of the twentieth century’s most compelling intellects. The combative element is there, of course. And Martin certainly has fun pitting the two writers and thinkers against one another. Their ‘binary antagonisms’ seem to proliferate under Martin’s gaze: Jean-Paul Sartre the thinker versus Albert Camus the man of action; the lover of the symbolic versus the savage lover; the prolix writer versus the minimal stylist; and, of course, the ugly versus the beautiful. Lest we forget, Camus, eight years Sartre’s junior, was blessed with good looks. A young Humphrey Bogart, reckons Martin. Sartre, meanwhile, looked like ‘something hanging off the side of Notre Dame’.

Why Don't People Get It?

Facts will always be with us. Wisdom, however, must be taught

by Llewellyn H. Rockwell Jr.

Even now, people think nothing of professing their attachment to socialist ideology at cocktail parties, at restaurants serving abundant foods, and lounging in the fanciest apartments and homes that mankind has ever enjoyed. Yes, it is still fashionable to be a socialist, and — in some circles within the arts and academia — socially required. No one will recoil. Someone will openly congratulate you for your idealism. In the same way, you can always count on eliciting agreement by decrying the evils of Walmart and Microsoft.

Isn't it remarkable? Socialism (the real-life version) collapsed nearly 20 years ago — vicious regimes founded on the principles of Marxism, overthrown by the will of the people. Following that event we've seen these once-decrepit societies come back to life and become a major source for the world's prosperity. Trade has expanded. The technological revolution is achieving miracles by the day right under our noses. Millions have been made far better off, in ever-widening circles. The credit is wholly due to the free market, which possesses a creative power that has been underestimated by even its most passionate proponents.

What's more, it should not have required the collapse of socialism to demonstrate this. Socialism has been failing since the ancient world. And since Mises's book Socialism (1922) we have understood that the precise reason is due to the economic impossibility of the emergence of social order in the absence of private property in the means of production. No one has ever refuted him.