Germany's Schäuble Presents Master Plan for Euro

New Powers for Brussels

German Finance Minister Wolfgang Schäuble is determined to end the euro crisis once and for all. On Sunday he effectively ruled out a Greek bankruptcy, and is now proposing far-reaching reforms to stabilize the currency union. Under his plan, Brussels would be granted far greater powers over national budgets.

By Spiegel

Wolfgang Schäuble knows that the quiet on the markets over the past few weeks has been deceptive and that the euro crisis could erupt again soon. After all, doubts remain about whether Greece can remain in the currency union in the long term. If it triggers a chain reaction, the entire euro project could collapse. In addition, the willingness of many euro-zone member states to eliminate the design defects of the common currency appears to be diminishing.

Cash-strapped Greeks, fatigued Europeans -- Germany now wants to solve both problems for the long term. "There will be no state bankruptcy in Greece," Schäuble said in a speech in Singapore on Sunday. He also wants to give a new boost to the reform impetus for restructuring the euro zone. "We now need to go a major step in the direction of a fiscal union that will go beyond the proposals made so far," Schäuble said on Monday night during his flight back to Berlin.

The finance minister, a passionate advocate of deeper European integration, has said he wants to concentrate on a small number of far-reaching reforms:

§  The European commissioner for economic and currency affairs is to become equally powerful as the commissioner for competition. The competition commissioner is entitled to make decisions independently and does not require the agreement of the other commissioners in making those decisions. If the currency affairs commissioner were truly independent when it came to decision-making, it would depoliticize that office holder's position. That would enable the commissioner to make decisions based on content rather than interests.

A wake-up call for Pakistan's broken society

The time to act is now

by Karamatullah K Ghori 

The barbaric attempt on the life of a 14-year-old schoolgirl last Tuesday by Taliban terrorists has spawned a state of trauma and national mourning in Pakistan. It's unlike other incidents that have hit the tragedy-prone country with a devastating frequency in recent years. 

Malala Yusafzai, the innocent victim of the Pakistani Taliban's bloodlust, rose to prominence three years ago when, as an 11-year-old from the picturesque Swat Valley, she challenged the Taliban edict that girls shouldn't get an education. The Taliban, with their archaic, stone-age mentality, were then in control of Swat, and the Pakistan Army had just mounted a major military offensive against them. The militants had torched scores of schools for girls and threatened to deface with acid burns any girl seen going to a school. 

The brave and indomitable Malala - whose father runs a private school for girls in Mingora, the administrative seat of Swat - had publicly defied the Taliban obscurantism by reminding their religious brigade that education was her birthright as both a Pakistani and a Muslim. She had the gumption to remind them that what they were demanding of her, and every other Pakistani girl, flew in the face of the Prophet Muhammad's categorical command that pursuit of knowledge was incumbent upon every Muslim man and woman. 

Malala's bravado made her a celebrity; she became an icon to those who abhorred the Taliban's anachronistic and wayward interpretation of their religion. Once the Taliban brigands had been driven out of Swat, Malala was showered with government recognition and accolades. She became a standard-bearer of the Pakistani secularists and religious moderates who loathed the Taliban's craving to turn the clock back to the Middle Ages and deny the benefits of education to half the country's population. 

Buying Organic

It's Complicated...

Want to be happier?  Buy organic food and all the colors of the world will be brighter, your smile will be nicer, and you will lose 15 lbs.  Seriously, organic food can do anything

By Hank Campbell

A 45-year meta-analysis of 240 science studies found that 'organic' processed food is the same in pesticides, the same in nutrition and a whole lot more expensive.

"...there isn’t much difference between organic and conventional foods, if you’re an adult and making a decision based solely on your health,” said Dena Bravata, senior author of the paper and a physician at Stanford’s Center for Health Policy.

Translation; you are a sucker financing a $29 billion industry. Basically, organic food is Big Ag.

Meanwhile, a study in Europe found that, despite claims about being better for the environment, the organic process really only leads to slightly better soil organic matter and nutrient losses in farmland.  Those benefits are washed away by higher ammonia emissions, nitrogen leaching and nitrous oxide emissions. Organic farms also had higher land use needs and greater eutrophication potential (a lot more algae so they are turning lakes into swamps) and acidification potential per product unit. 

Those are big, big negatives to offset negligible positives.

Now the marketing machine is changing its argument to try and defuse concern among customers that they have been duped by corporations, the thing buyers claim to worry about when it comes to Big Ag. Here are a few marketing blitzes that are rationalizing why you should continue to overpay for food by tens of billions of dollars.

The chemical cocktail is killing you

Organic food has pesticides just like synthetic food, they are just pesticides 'that can be found in nature' (like strychnine), and since every study has shown they are on an alarming amount of organic food we are now told we have to worry about the super-dangerous 'cocktail' of pesticides traditional evil farmers are foisting off on us. In other words, sure, maybe that one pesticide is on organic and traditional food, but not a whole cocktail.  Is bacteria from feces included in the 'cocktail'? Nope, that is only in organic food.

Fusion In A Coffee Mug

Lots of programs that are outside Big Science may lead to a real breakthrough and aren't 'all or nothing' financially

The coolest coffee cup ever?  No, a computer drawing of a prototype which uses current-carrying handles to contain the plasma

By Hank Campbell

Fusion is the super-clean energy we would be thinking about if government-controlled energy science were about the best long-term solutions and not political pet projects - alas, its share of the $72 billion spent on alternate energy the last three years is negligible. 

But something is better than nothing and some recent research revealed at the International Atomic Energy Association's Fusion Energy Conference in San Diego may be worth getting excited about. 

You've all heard of fusion and likely give it a bad rap, for good reason. If you lump it in with the cold fusion nonsense that got mainstream media hype a while ago, it's understandable to be skeptical about miracle energy. Energy activists also dislike fusion, to go with their dislike of natural gas, hydroelectric power, wind power, current nuclear power and anything else more advanced than the 13th century. Why? Because fusion is not perfect today and, in their fundraising brochures, it adds to their arsenal of claims that scientists are out to kill us all. 

Cuba will maintain strict controls on citizens traveling abroad

Cubans May Get a Shot At Life Abroad With New Exit Rules

By JUAN O. TAMAYO

The Cuban government's decision to lift its deeply hated requirement of exit permits for citizens to travel abroad, while retaining other tough controls, will give perhaps millions of average Cubans a better shot at living abroad.

It may also generate an increase in the cash remittances going to the island, from the increased number of Cubans abroad, and ease some of the pressures growing under ruler Raul Castro's decision to lay off 1 million state employees and cut subsidies on food and the health and education sectors.

But the decree published Tuesday also indicated that Cubans who have had problems obtaining exit and entry permits in the past are likely continue to do so: physicians, military and government, dissidents at home and outspoken critics abroad.

"The devil is in the details of the new migration law," wrote Havana blogger Yoani Sanchez in a Twitter message. She also called it "gatopardista," a reference to a situation where change is more apparent than real.

The Hidden Cost of the "New Economy": New-Type Depression

Two decades of economic stagnation and rising insecurity have unleashed work-based "new-type depression" in Japan

by charles smith

Today I continue to explore the theme that Japan's two decades of economic stagnation may offer guidelines for what lies ahead "for the rest of us" as the global malaise deepens in the years ahead. I have been a student of Japan for 40 years, having studied the language, history, literature, geography and art/film, in university and thereafter. We have many Japanese friends and have visited a number of times. (I have also been a student of the Chinese and Korean cultures.)

Japan is quite different from the U.S. and Europe, with a homogeneous populace and a culture rooted in Confucian values and social hierarchies. Despite the many differences, including definitions of depression, I think it is self-evident that the rising insecurity and workplace changes in Japan result from long-term economic stagnation.

I suspect "new-type depression" may have some universal aspects, as rising insecurity and new demands in the workplace characterize Western economies as well.

Can Cuba survive without slave labor

Cuba unlocks the door

Free to go: Cuba has bowed to the inevitable and announced the lifting of foreign travel restrictions on its citizens

Telegraph Editorial

The lifting of foreign travel restrictions is the most significant act of liberalisation yet from Raúl Castro

It has taken half a century but Cuba has finally bowed to the inevitable and announced the lifting of foreign travel restrictions on its citizens. From next January they will no longer require exit permits to go overseas, leaving North Korea as the only communist state left that continues to immure its own people. The move – announced on the 50th anniversary of the Cuban missile crisis – is the most significant act of liberalisation yet from Raúl Castro, who succeeded his brother Fidel as Cuba’s president four years ago.

His cautious programme of economic modernisation, which has already seen modest moves towards private ownership and some market reforms, was ratified by last year’s party congress, the first for 13 years. There is no doubting Mr Castro’s reforming instincts but the speed of change is woefully slow. Cuba remains an impoverished country – the average monthly salary is $20 – where corruption and cronyism are rampant. But the lifting of travel restrictions may mark a step change in the process. Freedom of movement will inevitably sharpen Cubans’ appetite for greater economic freedoms – or even more dramatic developments. After all, it was the fall of the Berlin Wall that triggered the collapse of communism in Eastern Europe.

A scale of values

In Cuba’s new real estate market, ‘capitalist construction’ is a big selling point for apartments built in the 1940s and 1950s

by Mark J. Perry

At the end of last year, the Cuban government started allowing its citizens to legally buy and sell real estate (mostly apartments) after several generations of a ban on private property and real estate sales. Cuban blogger Yoani Sanchez explains below how Cuba’s real estate market is now divided into two groups of apartments and homes for sale, those built during the “capitalist period” of the 1940s and 1950s (which are advertised as “capitalist construction”)  and those built in the post-capitalist period starting in the 1960s and after.  Can you guess which apartments sell at a premium and which ones sell at a discount?

But there is one qualifier that no one neglects to add if their housing warrants it, and that is “capitalist construction,” if it was built before 1959. There is a clear parting of the waters and implacable divide between that built before the Revolution and that which has risen during it. If the apartment building is from the decades of the ‘40s or ‘50s the price soars, while those apartments built during the years of Sovietization, are relegated to an inferior level of offerings. The housing market brings out — with all its toughness — a scale of values that is far from the official discourse and that reassigns a new amount to everything, an objective yardstick for measuring quality.

Quotation of the day

Kidney Failure

 “So Alvin Roth wins the Nobel Prize for, among other things, figuring out the best way to allocate kidneys subject to the constraint that you’re too damned dumb to use the price system. Next up: A Nobel prize in medicine for figuring out the best way to prolong your life while repeatedly shooting yourself in the head.”

                                                ~ Steven Landsburg

Behind the Benghazi Cover-up

Why did the White House hype a bogus story for so long?

By PATRICK J. BUCHANAN

On Sept. 11, scores of men with automatic weapons and RPGs launched a night assault on the U.S. compound in Benghazi, killed Ambassador Chris Stevens and set the building ablaze. Using mortars, they launched a collateral attack on a safe house, killing two more Americans, as other U.S. agents fled to the airport.

On Sept. 14, White House press secretary Jay Carney said the attack came out of a spontaneous protest caused by an anti-Muslim video on YouTube.

On Sept. 16, U.N. Ambassador Susan Rice told the entire nation the attack had not been premeditated or preplanned but emanated from a spontaneous protest of the nasty video.

On Sept. 25, Obama at the United Nations mentioned the video six times.

But when they were pushing this tale, what did the White House actually know?

For we have now learned that the assault was observed in near real time by the State Department’s Charlene Lamb, who was in contact with the security section at the Benghazi compound.

The next day, Sept. 12, Fox News and Eli Lake of The Daily Beast reported that U.S. intelligence had concluded it was terrorism. Within 24 hours of the attack, U.S. intelligence had identified some of the terrorists as members of an al-Qaida affiliate.

French president actually considering a ban on homework

Are the French losing their mind? 

By BY ERIKA JOHNSEN

It’s actually come to this. For the sake of creating a more level playing field for students who might not have home lives as conducive to productive learning as others, the national — I repeat, not some local or regional government or association or something, but the national — French government is actually floating a plan that would disallow schools from assigning their pupils homework, via TIME:

Last week, Hollande reaffirmed his pledge to make education one of his main domestic priorities by outlining key strategic changes to revitalize France’s school system. It’s a sweeping package of changes meant to reform a system critics claim is outdated and inefficient, but for headline writers it boils down to one concept: the French President wants to outlaw homework. “Work should be done at school, rather than at home,” Hollande emphasized on Wednesday.

He also proposes reducing the average amount of time a student spends in class in each day, while stretching the school week from four days to four and a half. It’s a bid to bring the country more in line with international standards and to acknowledge some of the current system’s shortcomings. Even the homework isn’t just an empty populist gesture — it’s meant to reflect the fact that many of the lowest-performing students lack a positive support environment at home.

They Hate Us For Our Prisons

The model is, if you build it they will come

There was a time when US schoolchildren, a few short years before they were loaded up with $60,000 a year in unrepayable federal debt (used mostly to purchase various iTrinkets) to pay for community college, were taught that all those people outside the continental US hate its residents "for our freedoms." It must then come as quite a shock for all these kids to learn that what they really meant is that "they hate us for our prisons."

From Max Raskin, Bloomberg:

The U.S. has the world’s highest incarceration rate, with Department of Justice data showing more than 2.2 million people are behind bars, equal to a city the size of Houston.

The CHART OF THE DAY shows that, with a rate of 730 people per 100,000, the U.S. jails a higher proportion of its citizens than any other country, according to data from the International Centre for Prison Studies, an independent research center associated with England’s University of Essex.

Europe fears war, hopes for peace, and gets neither

Economic and monetary union remains unfinished

By David Marsh

Helmut Kohl, the former German chancellor, used to say that his landmark European project — economic and monetary union (EMU) — was a matter of war and peace. It would make European conflict impossible. Kohl got it partly right, partly wrong, for different reasons than those he anticipated.

Europe is enduring a long-running but profoundly unsettling ceasefire between debtors and creditors. Neither war nor peace is breaking out. As long as doubt persists on whether the euro truce will hold, so will the uncertainty overhanging the world economy. That encapsulates the mood of many participants at the annual meetings of the International Monetary Fund and the World Bank that ended at the weekend in Tokyo.

As one Asian central banker put it: “We will not have a disaster, but we will not have a solution.” A large fault line in EMU runs through Germany, which the IMF openly blames for not having alleviated far earlier the running sore and vicious circle of low EMU growth and persistent imbalances.

The European Central Bank, on the other hand, emerged from the meetings with reputation and credibility intact. An important point underlined by ECB President Mario Draghi, and backed up by key governing council members such as Austria central bank governor Ewald Nowotny, is that the ECB has to remain distant from the “will they, won’t they?” kerfuffle over whether the Spanish government will apply to European governments (and the IMF) for a new bailout program.

Mexico is the forgotten story of US election

At which point maybe Mexico will have to tighten its border security

By Edward Luce

They say elections have consequences. But it is doubtful November 6 will have much impact on the biggest trend facing the US – its transformation into a Latin American country. Not only is the difference between Barack Obama and Mitt Romney incidental to the tides of US demography and regional integration. But the debate between the two is irrelevant to them.

Consider this: Mexico is fast turning into America’s most important trading partner – and is already its second-largest export market. Yet the only context in which the country is mentioned on the campaign trail is drugs or illegal immigration. It is rare that reality and politics so sharply diverge.

Here is Uncle Sam’s Latin American reality. First, Mexico is rapidly becoming as important to the US economy as China. There has been much excitement in recent months about the possibility of “reshoring” manufacturing jobs from China to America. If you broaden the destination to North America, the trend is already under way. Mexico is now vying with China as the manufacturing hub of choice for US and other multinational companies – it is as economically integrated with the US as any two members of the eurozone are to each other.

Economic Singularity

For countries that have been trapped in the gravity well of debt, there is only the pain that comes with restructuring

By John Mauldin

"Concern about politics and the processes of international co-operation is warranted but the best one can hope for from politics in any country is that it will drive rational responses to serious problems. If there is no consensus on the causes or solutions to serious problems, it is unreasonable to ask a political system to implement forceful actions in a sustained way. Unfortunately, this is to an important extent the case with respect to current economic difficulties, especially in the industrial world.

While there is agreement on the need for more growth and job creation in the short run and on containing the accumulation of debt in the long run, there are deep differences of opinion both within and across countries as to how this can be accomplished. What might be labelled the 'orthodox view' attributes much of our current difficulty to excess borrowing by the public and private sectors, emphasises the need to contain debt, puts a premium on credibly austere fiscal and monetary policies, and stresses the need for long-term structural measures rather than short-term demand-oriented steps to promote growth.

"The alternative 'demand support view' also recognises the need to contain debt accumulation and avoid high inflation, but it pushes for steps to increase demand in the short run as a means of jump-starting economic growth and setting off a virtuous circle in which income growth, job creation and financial strengthening are mutually reinforcing. International economic dialogue has vacillated between these two viewpoints in recent years."

– Lawrence Summers, The Financial Times, October 14, 2012

There is indeed considerable disagreement throughout the world on what policies to pursue in the face of rising deficits and economies that are barely growing or at stall speed. Both sides look at the same set of realities and yet draw drastically different conclusions. Both sides marshal arguments based on rigorous mathematical models "proving" the correctness of their favorite solution, and both sides can point to counterfactuals that show the other side to be insincere or just plain wrong.

Spain and Greece are both examples of what happens when there is too much debt and austerity is applied to deal with the problem. One side argues that the cure for too much debt is yet more debt, while the other side seemingly argues that the cure for a lack of growth is to shrink the economy. It is as if one side argues that the cure for a night of drunken revelry is a fifth of whiskey while the other side prescribes a very-low-calorie diet of fiber and veggies.

The Affirmative Action Quagmire

Rather than place restrictions on race-based preferences, the Supreme Court should let colleges run themselves

by Richard A. Epstein

Should institutions of higher education be allowed to engage in affirmative action programs that extend certain privileges to minorities, specifically African-Americans and Hispanics? Though that issue has been left unaddressed in the presidential campaign, it will be center stage at the United States Supreme Court on October 10. In the highly anticipated case of Fisher v. University of Texas, Abigail Fisher, a white woman who was denied admission to UT Austin’s campus in 2008, protests the admissions procedures that she claims vaulted less qualified minority students into the university ahead of her.

Affirmative Action in Texas

UT’s admission policies are, in large measure, a response to the 1996 decision of the Fifth Circuit in Hopwood v. Texas, which struck down the school’s explicit racial preferences in admissions decisions on the ground that diversity in education did not count as “a compelling state interest.”

Hopwood prompted a swift reaction: The Texas legislature approved a program that finessed Hopwood, making it mandatory for all UT campuses to automatically admit all Texas high school seniors who finished in the top ten percent of their class. The explicit rationale for the law was that it would boost the percentage of minority students in the UT system. That is just the way the results played out, as exhaustively documented in the Fifth Circuit Fisher decision, which narrowly upheld the plan.

Japan security environment tougher than ever

East Asia in Turmoil  

By Kiyoshi Takenaka

Prime Minister Yoshihiko Noda told his navy on Sunday that Japan's security environment was tougher than ever, underscoring tension with China over a territorial dispute and the threat of North Korea's weapons programs.

Sino-Japanese relations deteriorated sharply after Japan in September bought from private owners some of the East China Sea islets that both Tokyo and Beijing claim. That sparked violent anti-Japanese protests across China and badly hurt trade.

"It is needless to say that the security environment surrounding Japan is getting tougher than ever," Noda told about 8,000 servicemen and women, mostly from the navy, from aboard the destroyer Kurama.

"We have a neighbor that launches missiles under the pretence of satellite launches. We have various developments concerning territory and sovereignty."

Savile: the mad hunt for a conspiracy of witches

With its contagion of accusation and counter-accusation, the Savile scandal has exposed the Salem-style irrationalism of the modern elite

by Brendan O’Neill 

With each passing day – hour, in fact – the Jimmy Savile scandal looks more and more like a modern-day version of the hysteria that gripped seventeenth-century Salem, when a small town in Massachusetts became convinced that it had witches in its midst. Since the first accusations of child abuse were made against the late BBC entertainer in an ITV documentary on 3 October, Britain’s chattering classes have become consumed by a witch-hunting mentality, with almost every respectable institution, from the BBC to the NHS to the child-protection industry, finding itself dragged into a vortex of Savile-related suspicion and rumour, accusation and counteraccusation.

So as in Salem, Savile-obsessed modern Britain has its alleged conspiracy of witches, in the shape of Savile himself, described by the Guardian as ‘the devil who tries, and succeeds, in passing himself off as a saint’, alongside other named or hinted-at individuals. Together, these ‘blood-curdling child catchers’ (Guardian again) apparently ‘stalked children’s homes and hospitals… preying on the most vulnerable victims one could imagine’. They were part of a ‘child sex ring’, say the tabloids, which ‘lurked’ deep within ‘the corporation’ (the BBC). Savile was even worse than JK Rowling’s Voldemort, journalists tell us; he was a beast more wicked than could have been imagined by ‘even the most gifted weavers of children’s nightmares’.

The Future of America Is Japan

Runaway Deficits, Runaway Debts

by Charles Hugh-Smith

If you want a look at the fiscal future of the U.S., look west to Japan, a nation that sits precariously on a fiscal cliff a thousand feet high.

If you want to know how the Keynesian Cargo Cult's grand experiment in borrowing money to fund bloated fiefdoms, rapacious cartels and bridges to nowhere ends, just look west (from California) to Japan. The Japanese State, partly because they seem to believe in the Cargo Cult, and partly to avoid exposing the insolvency of their crony-capitalist financial sector, has been borrowing and spending money on a vast scale for two decades.

The Keynesian Cargo Cult's primary article of faith is that borrowing and blowing huge sums of money on anything and everything will magically restore "aggregate demand," i.e. the animal spirits that drive people to borrow and blow money on consumption. This is of course pure insanity, as people cannot borrow if their balance sheet has been destroyed, their real incomes are declining and they have lost trust in institutions that fear transparency and the truth like the Devil fears garlic.

Recall that the Federal Reserve's Survey of Consumer Finances for 2007-2010 found that the median net worth of households fell a staggering 39%, from $126,400 to $77,300, and average household income fell 11% from $88,300 to $78,500.

But rather than face the fraud and corruption at the heart of American (and Japanese) finance and governance, the Keynesians just want to leave the predatory, parasitic crony-capitalist Status Quo intact and create an illusory world of bogus "demand" and grotesque malinvestment funded by ever-increasing debt. In effect, the entire Keynesian Project seeks to reinflate asset and government revenue bubbles--the very causes of the global financial meltdown.

Scotland: the world’s most childish nation

The SNP thinks children should be trusted with votes, but adults shouldn't be trusted with booze and fags

by Rob Lyons 

This week, the UK Lib-Con coalition government and the Scottish National Party (SNP), which holds the majority in the Scottish Parliament, are set to announce they have come to an agreement on the terms for a referendum on Scottish independence. The SNP has agreed that there will be only one question on the ballot paper: should Scotland leave the UK. In return, the UK government will agree to the nationalists’ preferred date for the election - some time in 2014, to coincide with Glasgow hosting the Commonwealth Games and the seven-hundredth anniversary of the Battle of Bannockburn. More importantly, it seems, the two sides have agreed to allow 16- and 17-year-olds to vote, too.

There is plenty to be said about the wisdom of throwing away 300 years of common history. Scotland became part of the United Kingdom in 1707 once the Treaty of Union was approved by parliaments north and south of the border and the history of the two countries has been intimately entwined ever since. There seems little benefit to dissolving this union now. It is also right to wonder what exactly ‘independence’ would mean within the European Union. When so much law is now decided in Brussels rather than Westminster, and the Scottish Parliament already has considerable control over domestic law and policy, how much more ‘free’ would Scotland be if nominally independent?