Why a Falling Birth Rate Is a Big Problem

A few more babies would be good for business

By RICK NEWMAN

It sounds like one of those stories you can safely ignore: The U.S. birth rate has hit a record low, led by a big drop in the portion of immigrant women having babies.

This development doesn't directly affect anybody, since it's one of those long-term societal trends that occurs in small increments and doesn't change the unemployment rate, the price of gas, the direction of the stock market or any of the big economic forces that make our lives better or worse today. And since the trend is strongest among immigrants, it sounds like maybe this is something happening in a shadowy part of the economy that doesn't matter all that much.

But it does matter, and if the trend persists, it could mean lower living standards for most Americans in the future.

It may seem intuitively obvious that a slower-growing or declining population is good for the economy, especially when you think about starving children in poor parts of the world where there's not enough food for everybody. In places where resources are severely limited—and economic policies are dysfunctional—it may be true that a growing population is a bad thing.

But that's usually because such economies are static, and instead of creating wealth they typically just divide up what's already there. That's not the situation in America, which has a dynamic economy that creates wealth and more than enough resources for all of its citizens.

Mubarak may be gone, but his economic policies still haunt Egyptians.

Egypt's Economy: The Downside to Growth

BY MAGDA KANDIL

The Egyptian republic's economic course has been problematic, to say the least. Gamal Abdul Nasser's experiment with nationalization, central planning and Soviet-assisted industrialization left the economy hobbled by regulation and inefficiency. Anwar Sadat's successor regime relaxed the government's grip, but accumulated a mountain of foreign debt that caused stagnation through much of the 1980s.

But fortune favored the economy thereafter. Much of Egypt's external debt was forgiven or restructured in the wake of the Gulf War. And in the decade that followed, per capita GDP calculated in terms of purchasing power rose by one-third simply on the strength of containing both inflation and budget deficits.

Mubarak subsequently introduced major market-based reforms -- steps toward privatization and deregulation -- that permitted growth to accelerate to the 7 percent range. His technocrats also negotiated the global recession without a tumble, responding with a domestic stimulus (mostly infrastructure investment) that largely offset declines in private investment and exports. In the two years prior to the Arab Spring, the economy seemed to be back on the rapid development track.

However, in the years of high growth, though unemployment in the formal market rarely fell below 9 percent, youth unemployment hovered around 25 percent, and increasing numbers of college graduates never managed to get a first job. Moreover, the stimulus barely touched smaller enterprises, reinforcing the popular impression that the game was rigged in favor of insiders.

The revolution and lingering uncertainty during the transition exacted a huge toll on economic performance. The economy has since been creeping back, but at a pace hopelessly short of the 7 percent pace needed to absorb new entrants to the labor force.  And the prospects for acceleration are mixed.

Egypt's Theocratic Future

The Constitutional Crisis and U.S. Policy

By Robert Satloff and Eric Trager

Egypt's newly drafted constitution, which will be put to a referendum on December 15, represents a tremendous step backward for the country's democratic prospects. President Muhammad Morsi's decision to rush the document through a constitution-writing assembly that non-Islamists abandoned, coupled with the many articles that Islamists in power can easily exploit, virtually ensures a theocratic Egyptian future. The charter also cements the Muslim Brotherhood's deal with the military, granting the generals relative autonomy in exchange for accommodating the Brotherhood's political ambitions.

BACKGROUND

Egypt's Constituent Assembly has faced two key challenges since the Brotherhood-controlled parliament appointed it to draft the new constitution in June. First, its domination by Islamists upset its non-Islamist members, and by mid-November almost all of the latter had abandoned the assembly in protest. Second, following the Supreme Constitutional Court's mid-June ruling that parliament had been elected unconstitutionally, the assembly became a target for litigation. After multiple postponements, a ruling on its legality was expected this week.

To preempt this ruling, however, Morsi issued a November 22 constitutional declaration that, in addition to asserting virtually unchecked power for himself, insulated the assembly from being dissolved by the court. When non-Islamists launched mass protests against the decree, Morsi responded by calling for completion of a draft constitution within twenty-four hours; the assembly in turn replaced many of the non-Islamists who had abandoned it with Islamists. On Saturday, Morsi approved the resulting draft and called for a national referendum on December 15. It is widely expected to pass: Islamists (who remain the country's best-mobilized political forces) support it, and "yes" has won every plebiscite in contemporary Egyptian history.

The Great Irish Famine

A recipe for eventual catastrophe on a terrible scale

by STEPHEN DAVIES

History is a subject that often arouses strong emotions. What seems to some people to be a topic of limited academic interest is for others the source of deeply held and passionate feelings. The task of the historian is to try to establish, as dispassionately as possible, what actually happened in a given time and place and to give an explanatory account of why and how what happened came to pass.

It is at this point that the trouble starts since this inevitably involves an evaluative judgment, which can be controversial. It is nowadays fashionable in some circles to assert that the idea of honest or true historical accounts is a delusion, that all historical narratives are driven by an agenda and should be seen as mythical or quasi-fictional. This view is persuasive insofar as many widely accepted historical narratives are of this kind and are constructed with an eye to having an effect in the present rather than explaining the past. This does not mean, however, that historical scholarship as traditionally understood is impossible, merely that it is difficult. The study of history can actually undermine popularly accepted views of the past and reveal that, in Artemus Ward’s expression, much of what people know “just ain’t so.”

The history of Ireland is a case in point. Until recently Irish history was dominated by an account of how the Irish resisted, and eventually threw off, the oppressive rule of the English and their collaborators. Recently this has been questioned by a new generation of Irish historians and a new, more nuanced picture has appeared.¹ This has led to a deeper understanding and has meant that we now draw very different conclusions and lessons from the past.

The classic example of this is the Irish Potato Famine of the 1840s. The basic facts of the event, one of the most tragic in modern British history, are not in question. In 1845 the Irish potato crop became infested with a fungal parasite (Phytophthora infestans), causing a partial failure of the crop that year.

Eyeless in Gaza

A two-state solution of Israel and Palestine in peaceful co-existence in still a long-term goal

By Jayantha Dhanapala 
UNITED NATIONS - Mahatma Gandhi said it with remarkable moral clarity - "An eye for an eye only ends up making the whole world blind." That is indeed what happened in Gaza over eight days in November, with an estimated 160 Palestinians and six Israelis dead in the latest exchange of rockets and drones brought to an uneasy end by an Egyptian-brokered ceasefire. 
The recently re-elected US President Barack Obama's support for Israel was assured for the cynical exercise engineered by Israeli Prime Minister Benjamin Netanyahu in order to ensure his victory at the elections in January next year. 
It is widely speculated that this was Obama's quid pro quo for Netanyahu pulling back from his reckless intervention in the US presidential campaign on the side of Republican challenger Mitt Romney. For good measure, Obama has unilaterally announced that the Helsinki Conference scheduled for December this year to discuss the proposed Middle East Weapons of Mass Destruction Free Zone (MEWMDFZ) will not take place. 
This in spite of the fact that the responsibility of convening the conference was entrusted by the parties to the Treaty for the Nonproliferation of Nuclear Weapons (NPT) to the US, UK, Russia and the UN secretary-general in pursuance of which the facilitator from Finland had worked tirelessly. 
In 1936, Aldous Huxley published a novel, Eyeless in Gaza, with the title drawn from the Biblical story of Samson blinded by the Philistines and put to work in Gaza, and relating the story of a man whose passage in life leads to pacifism. 
A peaceful settlement of the blockade of Gaza by Israel and an end to the scandalous conditions of its 1.7 million citizens is still very far away. However, the vote of the UN General Assembly on the upgrading of Palestine as an Observer State of the UN on November 29 is some solace to a brutally repressed people notwithstanding the acute rivalry between Hamas who control the Gaza and the Fatah, who heads the Palestine National Authority. 

Is There an Egyptian Nation?

The current protests aren't about the President Mohamed Morsi's power grab -- this fight is over something far more basic

BY SHADI HAMID

In the latest round of Egypt's current crisis -- once again pitting Islamists against non-Islamists -- demonstrators gathered at the presidential palace in Cairo to protest President Mohamed Morsi's stunning decision to claim authoritarian, albeit temporary powers and his subsequent moves to rush through a controversial constitution. In a grim reminder of the country's precarious state, police clashed with protesters and fired tear gas.

But this isn't really about Morsi and his surprise decree -- though to be sure, parts of the decree employ language straight out of Orwell and seem almost designed to provoke and polarize. However, neither the decree nor the draft constitution are quite as bad as Morsi's opponents insisted. The opposition's sometimes bizarre comparisons to Adolf Hitler, Benito Mussolini, the 1933 Enabling Act, and the French Revolution suggest a legitimate fury (and an intriguing fascination with fascism), but make little sense as historic analogies.

Morsi could have read his Friday shopping list on national television, and it might have made little difference. The decree, after all, was only the latest in what Morsi's opponents see as a long list of abuses. Egypt's "original" revolutionaries are one such group that blast the Brotherhood's compromises small and large with the old state bureaucracy, lamenting how their revolution was sacrificed on the altar of expediency and gradualism. And it is true that the Brotherhood-appointed leaders of the Ministry of the Interior, the military, and the intelligence apparatus include men who were complicit in some of the worst human rights abuses of the Hosni Mubarak era -- and have gone unpunished to this day.

But these mostly younger revolutionaries, whose critiques have been admirably consistent, are a small minority. The rest of the opposition is an odd assortment of liberals, socialists, old regime nostalgists, and ordinary, angry Egyptians, each whom have their own disparate grievances and objectives. The liberals and leftists in the equation, led by figures such as Mohamed ElBaradei, Hamdeen Sabbahi, and Amr Moussa, have little in common with each other -- besides a fear that their country is being taken over, and taken away, by Islamists. While they may be "liberal," in the sense of opposing state interference in private morality, their attachment to democracy is mercurial at best. Many of them welcomed the dissolution of Egypt's first democratically elected parliament, called on the military to intervene and "safeguard" the civil state, and even cast their presidential ballot for Ahmed Shafiq, Morsi's opponent and Mubarak's last prime minister.

British Press Report Brings Out the Speech Nannies

A free press holds a mirror up to society, and rather often we don’t like what it reveals

By WALTER RUSSELL MEAD

The British press stinks, or at least a lot of it does. Sleazy tabloids run wild with reporters hacking cell phones, getting stories under false pretenses and hounding relatives of soccer stars and other pop idols within an inch of their lives. Ghoulish over reporting of personal tragedies like missing children wreak havoc and ruin lives. Laws get broken, people get hurt. After revelations that reporters and editors at one of Britain’s biggest tabloids had gone even further than that, a typically British response was to convene a panel of the Great and Good to decide what to do.

The Leveson Report, released Thursday, is the result of a lengthy inquiry into the British press and urges “the establishment of a new system of press regulation that would be backed by parliamentary statute.” For a look at its key recommendations as summarized by the Guardian, go here.

The British left is screaming for parliamentary regulation of the press. Prime Minister Cameron says this would “cross the Rubicon”: let the politicians start regulating the press and the Ministry of Truth is not far away. He is basically right; while the Leveson report doesn’t call for censorship of content, it introduces the idea that an outside regulator (theoretically independent of government) should regulate the conduct of reporters. Such bodies accrete power over time; once the camel gets its nose in the tent, the takeover process begins.

Britain is particularly susceptible to the disease of controlling unpleasant speech. Mixed with its long and proud tradition as an upholder of liberty, Britain has always had a weakness for letting the Great and the Good dictate to the rest of society. It has an Established Church, and for centuries people who didn’t belong to it were banned from holding office or attending universities. Britain was traditionally much more puritanical than, say, France when it came to censoring books, plays and later films.

Flawed views on peak oil rear their ugly heads again

Crying wolf. Again

By Robin Mills

The debate over peak oil is stalked by zombie ideas that live on, no matter how many times they are stamped upon. The latest significant article warning of declining oil supplies manages to revive not just one but at least six of these false concepts.

An article by the oceanographer James Murray and the former UK chief scientific adviser David King appears in the prestigious journal Nature.

It argues that conventional oil production has been stagnant since 2005 and that "the oil market has tipped into a new state … production is now … unable to respond to rising demand".

The idea that oil production has not risen above 74 million barrels per day (bpd) since 2005 relies on a very narrow definition of "crude oil". In reality, oil demand is now met from a range of sources, including biofuels and petroleum extracted from natural gas.

To the motorist, the end product is indistinguishable. Figures from the US Energy Information Administrationsuggest that, for the first time, total production topped 90 million bpd at the end of last year.

Automatically ascribing a slowdown in production growth to physical resource constraints fails to consider the economic and policy context.

How lives are transformed amid civilization’s rubble

Behind the Iron Curtain  

By Anne Applebaum

Many people have tried to describe what it feels like to endure the disintegration of one’s entire civilization, to watch the buildings and landscapes of one’s childhood collapse, to understand that the moral world of one’s parents and teachers no longer exists and that one’s respected national leaders have failed. Yet it is still not an easy thing to understand for those who have not experienced it. Words like “vacuum” and “emptiness” when used about a national catastrophe such as an alien occupation are simply insufficient: They cannot convey the anger people felt at their prewar and wartime leaders, their failed political systems, their own “naive” patriotism and the wishful thinking of their parents and teachers. Different parts of Eastern Europe experienced this collapse at different times. But whenever and however it came, national failure had profound effects, especially on young people, many of whom simply concluded that everything they had once thought true was false.

Certainly that was what happened to Tadeusz Konwicki, a Polish novelist who spent the war as a partisan. Brought up in a patriotic family near Vilnius, in what was then eastern Poland, Konwicki eagerly joined the armed wing of the Polish Resistance, the Home Army, during the war. First he fought the Nazis. Then, for a time, his unit fought the Red Army. At some point their struggle began to deteriorate into armed robberies and gratuitous violence, and he found himself wondering why he was still fighting. Eventually he left the forests and moved to Poland, a state whose new borders no longer included his family home. Upon arrival, he realized that he had nothing. At age 19, he was in possession of a coat, a small backpack, and a handful of fake documents. He had no family, no friends, and no higher education.

Is Austerity, Shrinking Wages, and Firing of Public Workers a Bad Thing?

Latvia's Real-Time Experience

By Mike "Mish" Shedlock

The socialists and the Keynesians would have you believe that austerity is a bad thing, and that firing government workers when unemployment is already high is the wrong thing to do.
Anyone believing those myths needs to consider Euro Countries (and the IMF) Can Learn from Latvia’s Economic Success.

 In 2008–09, Latvia lost 24 percent of its GDP. It was heading toward a budget deficit of 19 percent of GDP in 2009 without a program of radical austerity.
A new Latvian government came to power in March 2009, when GDP was in free fall. It told people how bad the situation was, and the various social partners responded by signing up to a truly radical austerity program. One-third of the civil servants were laid off; half the state agencies were closed, which prompted deregulation; the average public wage was cut by 26 percent in one year. But this was a socially considerate program. Top officials were hit more, with 35 percent in wage cuts, while in the end pensions were not cut. In particular, public servants were no longer allowed to sit on state corporate boards and earn more than from their salaries, a malpractice that is still common in many European countries. The government exposed high-level corruption. Yet, many schools and most of the hospitals were closed.

Doha: It’s Not the end of the world as we know it

That's Good

by Rob Lyons 

It’s like a fly banging its head against a window pane, desperately trying to get to the other side and uncomprehending as to why it never succeeds. Except this is a 17,000-strong swarm of flies taking part in its annual exercise in futility. Yes, there’s another UN climate conference going on, though you might well have missed it.

The eighteenth Conference of the Parties to the UN Framework Convention on Climate Change - there’s a good reason they call it COP18 - is taking place in Doha, the capital of Qatar. The small Arab state is, by some measures, the richest country in the world per head of population, a position built on the fact that it has the third-largest reserves of natural gas in the world. The conference has been running since 26 November and is due to end on Friday. But no one is predicting any kind of dramatic deal.

Which is a bit of a problem for those who run this peculiar show because another thing that ends soon is the Kyoto Protocol. Signed 15 years ago in Japan, the protocol aimed to reduce greenhouse gas emissions in 37 industrialised countries and the EU to a level five per cent below 1990 levels for the period from 2008 to 2012. There’s no sign of a replacement - which, to be meaningful, really needs to include big developing countries like China, India and Brazil - just endless talks about talks. At last year’s event - COP17 in Durban, South Africa - there was an agreement to negotiate a ‘protocol, legal instrument, or an agreed outcome with legal force applicable to all Parties’ by 2015, to take effect by 2020. As a Greenpeace representative bemoaned then: ‘Right now the global climate regime amounts to nothing more than a voluntary deal that’s put off for a decade.’

Why Finnish school lessons are useless

Finland may be at the top of the world’s education rankings, but that tells us more about Finnish society than its schools

by Eero Iloniemi 

Finland has once again topped an international education ranking table.

This time, the British education firm Pearson has rated Finland the world leader in education. The country has also traditionally had a strong showing in the OECD’s PISA rankings, so it must be doing something right, right? This success has even spawned a cottage industry dedicated to the so-called Finnish education miracle. One example of this is the book Finnish Lessons: What the World Can Learn From Educational Change in Finland? The book has been a bestseller (well, in the education section of the bookshop, anyway).

In the most recent education table, Britain did not do too badly, coming in at sixth. But what is it about Finland that makes its education system so table-rankingly excellent? It’s certainly not money. Spending on education in Finland is no higher than the OECD average.

Pearson itself explains Finland’s success by factors that are fairly difficult to quantify such as a pro-education culture and the quality of teachers. But other more easily verifiable factors also come into play although most are omitted by many educational experts.

For a start, given that South Korea (alongside Finland) has again finished in the top two, following its first place in the PISA rankings, it’s worth asking what the two countries have in common?

At first glance, not much it would seem. Koreans emphasise testing, discipline, homework and long school days. Finnish kids have one of the shortest school days in the world, are seldom tested, have little homework and address their teachers by their first name from their first day at school.

Yet closer examination shows similarities that are not revealed in the education studies.

Fedophilia

It's curable

by George Selgin

Although the movement to “End the Fed” has a considerable popular following, only a very tiny number of economists—our illustrious contributors amongst them—take the possibility seriously. For the rest, the Federal Reserve System is, not an ideal currency system to be sure (for who would dare to call it that?), but, implicitly at least, the best of all possible systems. And while there’s no shortage of proposals for reforming it almost all of them call only for mere tinkering. Tough though their love may be, the fact remains that most economists are stuck on the Fed.

This veneration of the Fed has long struck me as perverse. Its record can hardly be said, after all, to supply grounds for complacency, much less for the belief that no other system could possibly do better. (Indeed that record, as Bill Lastrapes, Larry White and I have shown, even makes it difficult to claim that the Fed has improved upon the evidently flawed National Currency system it replaced.) Further, as the Fed is both a monopoly and a central planning agency, one would expect economists’ general opposition to monopolies and to central planning, as informed by their welfare theorems and by the general collapse of socialism, to prejudice them against it. Yet instead of ganging up to look into market-based alternatives to the Fed, the profession for the most part has relegated such inquiries to its fringe.

Why? The question warrants an answer from those of us who insist that exploring alternatives to the Fed is worthwhile, if only to counter people’s natural but nevertheless mistaken inclination to assume that the rest of the profession isn’t interested in such alternatives because it has already carefully considered—and rejected—them.

Orderly and Humane?

An Endless Nightmare

By Peter Hitchens

Some time ago I decided to write a book about the damaging and deluded cult of national victory which has done this country so much damage since 1945. No doubt it will receive the usual mixture of abuse and  silence which most of my books receive. But I shall write it anyway, as it seems to me to be a truth urgently in need of being expressed, especially as we shall soon be marking the 70^th anniversary of the end of the supposedly ‘Good’ Second World War. It is now possible to have more-or-less grown-up attitudes towards the First World War, whose last remaining justification – that it was ‘The War to End All Wars’ - crumbled into dust and spiders’ webs in September 1939. But the 1939-45 conflict is still wreathed in delusions, delusions often employed to try to justify modern wars which are alleged to have comparably ‘good’ aims.

The belief in its goodness is in fact ludicrous. Our main ally (rejected at the beginning with lofty scorn, embraced later with desperate, insincere enthusiasm) was one of the most murderous tyrants in human history, whose slave empire we helped him to extend and consolidate, and to whom we afterwards handed thousands of victims, to whom we owed at least a life, though we knew he would murder them.

Our purpose in joining the war was not only not achieved, but the country whose independence we claimed to be ‘saving’ sank under successive waves of horror, cruelty, lawlessness, murder and despotism, to emerge 60 years later and many miles from where it had been when we ‘rescued’ it.

Dancing Around Genocide

At Human Rights Watch, a bitter behind-the-scenes battle over Iran's calls to annihilate Israel

By DAVID FEITH

Is promoting genocide a human-rights violation? You might think that's an easy question. But it isn't at Human Rights Watch, where a bitter debate is raging over how to describe Iran's calls for the destruction of Israel. The infighting reveals a peculiar standard regarding dictatorships and human rights and especially the Jewish state.

Human Rights Watch is the George Soros-funded operation that has outsize influence in governments, newsrooms and classrooms world-wide. Some at the nonprofit want to denounce Iran's regime for inciting genocide. "Sitting still while Iran claims a 'justification to kill all Jews and annihilate Israel' . . . is a position unworthy of our great organization," Sid Sheinberg, the group's vice chairman, wrote to colleagues in a recent email.

But Executive Director Kenneth Roth, who runs the nonprofit, strenuously disagrees.

Asked in 2010 about Iranian President Mahmoud Ahmadinejad's statement that Israel "must be wiped off the map," Mr. Roth suggested that the Iranian president has been misunderstood. "There was a real question as to whether he actually said that," Mr. Roth told The New Republic, because the Persian language lacks an idiom for wiping off the map. Then again, Mr. Ahmadinejad's own English-language website translated his words that way, and the main alternative translation—"eliminated from the pages of history"—is no more benign. Nor is Mr. Ahmadinejad an outlier in the regime. Iran's top military officer declared earlier this year that "the Iranian nation is standing for its cause that is the full annihilation of Israel."

EU Wants to Ban Youth Unemployment

More Nannycrat Insanity 

by Mike "Mish" Shedlock 

Youth unemployment is shockingly high in Greece, Spain, and Italy as shown by Europe's Most Tragic Graph by The Atlantic. 

Young workers in Greece and Spain are facing an absolutely egregious work drought, where half of high-school and college-graduates ready to find a job aren't finding one. And 55% isn't the ceiling. Both economies are shrinking and unemployment is a lagging indicator -- as Americans have learned, the rate can keep going up after an economy technically starts growing. This economic tragedy can easily become a social disaster as young promising people either leave their country to work somewhere else or else turn to illegal or violent activities to protest policies wrecking their economies or lash out against a country that's leaving them behind.

EU Wants to Ban Youth Unemployment
Looking for a reason for the rise of the neo-Nazis in Greece? Look no further than economic depression and over 50% youth unemployment. So what to do about it?

Courtesy of Google translate from German of Frankfurter Allgemeine, please consider EU Wants to Ban Youth Unemployment.

 The European Commission wants to oblige EU countries to all people under 25 to secure a job. How states are to implement the guarantee, it will not betray.

Disordered Liberty

No one likes doing homework, but the non-compulsory alternatives are autonomous, non-alienated illiterates

By MICHAEL WEISS

Soon after al-Bab, a rural town just north of Aleppo, was liberated from the Assad regime in the summer, citizens and off-duty Syrian rebels took to the streets and started cleaning up. They swept the sidewalks in the absence of any municipal sanitation, picking up chunks of concrete rubble left over from a punishing artillery assault that had ended just days earlier. For four decades, anything spontaneous required permission from the regime. This was an assertion of individual autonomy against a totalitarian state—destructive creation as its noblest.

The scene, which I witnessed on a trip to Syria in August, would have put a smile on James Scott's face. In "Two Cheers for Anarchism," his intriguing but occasionally silly book, Mr. Scott doesn't pretend to abide by a utopian antigovernment philosophy or to renew the prescriptions of 19th-century Russian anarchists who wanted to overthrow the czarist state. Rather, he argues for a return to "mutuality" and organic human cooperativeness. The bulk of his book is thus dedicated to criticizing the niggling little tyrannies of everyday life in free-market democracies, from superstores that have replaced more humane mom-and-pop enterprises to the attempts of agribusiness to impose factory-like standardization on nature itself. As if to account for the bagginess of such a project, Mr. Scott divides his book into a series of essay fragments loosely bound together by themes rather than a linear thesis.

The True Disciple of Saul Alinsky

What explains their hubris?

by Patrick J. Buchanan

Treasury Secretary Tim Geithner's opening bid to Speaker John Boehner, a demand for $1.6 trillion in new taxes, was not meant as a serious offer. It was an ultimatum couched in an insult. Translation:

"We won the election. We have the whip hand. Not only are you going to sign on to higher tax rates and higher tax revenues, we are going to rub your Tea Party noses in your coming capitulation."

That Boehner did not throw the offer back in Geithner's face and tell him, "Give me a call, Tim, when you're serious," suggests that the speaker feels he is holding a losing hand.

He wants a deal where the GOP agrees to higher revenues and the White House agrees to cuts in future entitlement outlays. But the Obamaites are looking to dictate terms. They want a triumph. If that means casting Boehner as the Neville Chamberlain of the GOP, so be it.

What explains their hubris?

Two years ago, Obama had to eat crow and extend the Bush tax cuts. Now it's payback time. And behind their arrogance lies a belief that the GOP cannot say no. For if the Bush tax cuts and the payroll tax cuts expire on Jan. 1, Americans will face the highest tax hike in history.

Serial Government Defaults In The Eurozone

Every country in the Eurozone has its own set of big fat lies  

By Wolf Richter  

At their meeting on Monday, Euro Group finance ministers had some hot topics to stew over. There was the thorny issue of who’d replace Euro Group President Jean-Claude Juncker, who has had it with this zoo—”I no longer have any illusions about Europe,” he’d muttered earlier [The Euro Will Blow Up Europe Instead Of Bringing It Together]. The bailout of Spanish banks was finalized; €39.5 billion would be transferred next week, a down payment. Primary beneficiaries: German and French banks.

And the new bailout of Greece got some finishing touches. The mechanics had already been decided. Interest rates would be lowered. There’d be no interest payments for the first ten years. Times to accomplish the austerity goals would be stretched out. Profits on Greek debt held by the “official sector,” as it’s called in the jargon of the euro bailout mania, would be repatriated. And so on. It was one heck of a sweet deal for Greece.

It followed the bond swap last March that had already whacked private sector investors with a 74% haircut on €206 billion in bonds. The first sovereign default in the Eurozone, albeit a “voluntary” one. It set the tone. Greek Finance Minister Evangelos Venizelos proclaimed afterwards in his victory speech: “We owed it to our children and grandchildren to rid them of the burden of this debt.”

Alas, private sector is a rubbery term in the Eurozone. Most of the bondholders that lost their shirts were banks, including banks in Greece, Spain, and Cyprus—and they’re now getting bailed out by the official sector. Their losses from the private-sector haircut are landing on the lap of the taxpayer.

Why would Obama willingly choose to go over the fiscal cliff?

Clearing the path towards Obama's long term objectives of complete socialization of the American economy

by Lance Roberts

Obama already knows that such an event would create an economic drag in the next year of nearly 4% as the various taxes and mandated spending cuts sap economic strength.  After four years of effort, bailouts, incentives and programs to keep the economy afloat - what incentive would there be to willingly go over the "cliff?"  It is an interesting question.

According to the American Council For Capital Formation here are the following impacts to the overall economy:

Real GDP- Increasing the current capital gains and dividend tax rates shows noticeable negative effects on the U.S. economy compared to the Baseline in the shorter run. In this simulation, real GDP growth decreases 0.1%, on average, per year, which equates to a $79.2 billion decrease per year over the 2013-17 time period. The results are similar in longer time period: Between 2013 and 2021 period, real GDP decreases $80 billion on average, per year.

Consumption Spending- Consumption spending is also weaker, averaging $155 billion lower per year between 2013-2021. Between 2013 and 2017 time period, the decrease in consumption is a little over $122 billion.

Employment- In the capital gains and dividend tax increase simulation, the job impact is worse between 2013 and 2017 period. The economy ends up losing 380,000 jobs on average per year. In the longer period, 2013-21, the loss is 344,000 per year. Nonfarm payroll jobs show a large loss of 561,000 persons in 2015 and then smaller losses in subsequent years.