Lies, damned lies and hockey sticks

The exposure of yet another dodgy piece of climate-change alarmism shows the need for serious scepticism

by Rob Lyons 

‘Global temperatures are warmer than at any time in at least 4,000 years… and over the coming decades are likely to surpass levels not seen on the planet since before the last ice age.’ That was the pithy message offered by New York Times eco-columnist Justin Gillis, reporting on a new reconstruction of past global temperatures published in Science last month. The Atlantic was blunter: ‘We’re Screwed: 11,000 Years’ Worth of Climate Data Prove It.’

The Science paper is an attempt to chart changes in global temperatures for the past 11,000 years. In the absence of actual thermometer records any earlier than the late seventeenth century, paleoclimatologists use ‘proxy’ data - things like tree rings - to estimate changing temperatures. The researchers, led by Shaun Marcott of Oregon State University, found ‘Early Holocene (10,000 to 5,000 years ago) warmth is followed by ~0.7 degree Celsius cooling through the middle to late Holocene (less than 5,000 years ago), culminating in the coolest temperatures of the Holocene during the Little Ice Age, about 200 years ago’.

However, then things changed dramatically: ‘Current global temperatures of the past decade have not yet exceeded peak interglacial values but are warmer than during ~75 per cent of the Holocene temperature history.’ The accompanying graph of temperature changes, as shown in the Atlantic article, is startling. Temperatures are more or less stable until just over 1,000 years ago, when a marked cooling started. Then, after a recovery since the Little Ice Age, the line takes off like a rocket in the twentieth century. What clearer evidence could there be for manmade global warming?

The shape of the graph is very much like a hockey stick on its side - long and straight with a sharp bend at the end - and there has been plenty of past trouble caused by ‘hockey stick’ graphs. In 1999, a paper published in Nature by Michael Mann and colleagues suggested that the current period was the warmest in at least 1,000 years. Mann’s graph also showed no Medieval Warm Period, previously assumed to have been a spell of warmer weather in the years roughly from 900 to 1300. Such was the impact of this paper that it become the centrepiece of the IPCC’s Third Assessment Report in 2001 and got a major plug in Al Gore’s film, An Inconvenient Truth. As Andrew Montford has noted previously on spiked, the Canadian government even sent out a leaflet to every household featuring the ‘hockey stick’ graph.

Ten Big Fat Euro Lies

An Empire Built on Lies

by Testosterone Pit

Every country in the Eurozone has its own collection of big fat lies that politicians and eurocrats have served up in order to make the euro and the subsequent bailouts or austerity measures less unappetizing. Here are some from the German point of view, gleaned from the Wirtschafts Woche.

1999: “Can Germany be held liable for the debts of other countries? A very clear No!” said a multi-colored piece of propaganda issued by the CDU, the party of Helmut Kohl who was Chancellor at the time, and of Angela Merkel who is Chancellor now. It explained: “The Maastricht treaty forbids explicitly that the EU or the other EU Partners are liable for the debts of any Member State.” Sounds like a bad joke today.

But fear not: because of the 3% deficit limit in the Maastricht Treaty, “euro Member States will therefore be able to service their debts over the long term without any problems.” Thus, the big fat euro lies started before bank notes had even been put into circulation.

January 2001: “This money will have a great future,” said Kohl during a speech celebrating the introduction of the euro that he’d pushed through with all his corpulence. For a while, it worked. Euros were growing on trees. Even Greece had access to cheap euro debt with which to buy votes and fund the Olympics. Everyone was happy. Until it didn’t work anymore.

Gold, Redeemability, Bitcoin, and Backwardation

Bitcoin is like an attempt to reverse cause and effect

By Keith Weiner

I recently released a video about the Internet-based currency, Bitcoin. I asked the question: is Bitcoin money? In brief, I said no it’s an irredeemable currency. This generated some controversy in the Bitcoin community. I took it for granted that everyone would agree that money had to be a tangible good, but it turns out that requirement is not obvious.This prompted me to write further about these concepts.

A human being has a physical body with physical needs, and lives in a physical world. He produces that he may eat and clothe and shelter himself. Once civilization develops beyond subsistence, men specialize to increase their production. Each relies on others, who specialize in other fields. Each trades his products for the goods produced by others.

A problem arises, called the coincidence of wants. One man produces food and another produces leather moccasins. When the moccasin producer is hungry, the food grower may not need new shoes. Mr.Moccasin must discover that some goods are more marketable than others. He can trade less-marketable moccasins for more-marketable salt, for example. He may not need the salt (though he can always use it) but he knows it is accepted in trade for food and other goods.

Eventually, a market process finds the most marketable good. It becomes even more marketable due to its increasing use as money (but it does not lose the attributes that made it useful in the first place).

The philistines have taken over the classroom

How did we get to a situation where teachers are even more cavalier about knowledge and serious schooling than politicians are?

by Frank Furedi 

In virtually every Western society, education is in trouble.

In part, the crisis of schooling is a product of the politicisation of education. In recent decades, education has been transformed into an instrument of public policy, a means for achieving objectives that are entirely external to learning. Education is now expected to put right the failures of adult society, to transform apathetic youngsters into responsible citizens. Education is meant to promote social mobility, multiculturalism, responsible sex, sound financial behaviour and emotional wellbeing, and to provide youngsters with a variety of key skills.

The instrumental transformation of education into a vehicle for achieving policy objectives means that it is rarely appreciated as something valuable in its own right. Education has been so instrumentalised that its main function is now to ‘provide skills’. The teaching of knowledge itself, for its own sake, is frequently dismissed as an old-fashioned custom that is not relevant to the twenty-first century.

That policymakers confuse education with training is regrettable, but understandable. Far more worrying is the fact that a significant section of the teaching profession has also embraced the philistine skills agenda. Indeed, Britain’s education establishment is if anything more ideologically devoted to instrumental pedagogy than is the Lib-Con coalition government. This became painfully clear at the recent conferences of English teachers’ unions, where opposition to the government was often expressed through denunciations of knowledge-based curricula.

So we heard Alex Kenny, a member of the executive of the National Union of Teachers, dismiss the government’s new national curriculum on the grounds that it is ‘high on content and low on skills’. Numerous delegates attacked the curriculum’s emphasis on core knowledge. A survey of 2,000 NUT members revealed that two thirds of teachers are hostile to the government’s plans to place less emphasis on skills.

This means we have a paradoxical situation, where politicians seem to take the teaching of subject-based knowledge more seriously than educators do. The philistine attitude towards education adopted by some NUT delegates was exposed most strikingly through their confusion of knowledge with facts. Kenny, for instance, said a knowledge-based curriculum is one ‘based on pub quiz-style chinks of information’. The NUT’s general secretary, Christine Blower, equated the acquisition of knowledge with rote learning and said ‘it doesn’t promote the critical thinking and problem-solving skills that are essential for good quality learning’. Her words reflect the current wisdom of utilitarian pedagogy: learning and skills are better than education.

Knowledge and skills

In any discussion about the relationship between analytical skills and knowledge, it is easy to become one-sided. Often, too much of a polarising distinction is made between knowledge and its application. It is possible to make a distinction: knowledge is accomplished through learning principles, concepts and facts, while skills represent the capacity to use that knowledge in specific contexts. But in reality, these two things are inextricably bound together. The gaining of knowledge, particularly deep knowledge, requires such skills as the capacity to conceptualise, compare and critically engage.

The US Corporate State

The Great Deformation

by Llewellyn H. Rockwell Jr.

It didn’t take long for opponents of the market to pounce after the events of 2008. The crash was said to prove how destructive "unregulated capitalism" could be and how dangerous its supporters were – after all, free-marketeers opposed the bailouts, which had allegedly saved Americans from another Great Depression.

In The Great Deformation, David Stockman – former US congressman and budget director under Ronald Reagan – tells the story of the recent crisis, and takes direct aim at the conventional wisdom that credits government policy and Ben Bernanke with rescuing Americans from another Great Depression. In this he has made a seminal contribution. But he does much more than this. He offers a sweeping, revisionist account of US economic history from the New Deal to the present. He refutes widely held myths about the Reagan years and the demise of the Soviet Union. He covers the growth and expansion of the warfare state. He shows precisely how the Fed enriches the powerful and shelters them from free markets. He demonstrates the flimsiness of the present so-called recovery. Above all, he shows that attempts to blame our economic problems on "capitalism" are preposterous, and reveal a complete lack of understanding of how the economy has been deformed over the past several decades.

The Great Deformation takes on the stock arguments in favor of the bailouts that we heard in 2008 and which constitute the conventional wisdom even today. A "contagion effect" would spread the financial crisis throughout the economy, well beyond the confines of a few Wall Street firms, we were told. Without bailouts, payroll would not be met. ATMs would go dark. Wise policy decisions by the Treasury and the Fed prevented these and other nightmare scenarios, and staved off a second Great Depression.

The bailout of AIG, for example, was carried out against a backdrop of utter hysteria. AIG was bailed out in order to protect Main Street, the public was told, but virtually none of AIG’s busted CDS insurance was held by Main Street banks. Even on Wall Street the effects were confined to about a dozen firms, every one of which had ample cushion for absorbing the losses. Thanks to the bailout, they did not take one dollar in such losses. "The bailout," says Stockman, "was all about protecting short-term earnings and current-year executive and trader bonuses."

Ten years earlier, the Fed had sent a clear enough signal of its future policy when it arranged for a bailout of a hedge fund called Long Term Capital Management (LTCM). If this firm was to be bailed out, Wall Street concluded, then there was no limit to the madness the Fed would backstop with easy money.

LTCM, says Stockman, was "an egregious financial train wreck that had amassed leverage ratios of 100 to 1 in order to fund giant speculative bets in currency, equity, bond, and derivatives markets around the globe. The sheer recklessness and scale of LTCM’s speculations had no parallel in American financial history…. LTCM stunk to high heaven, and had absolutely no claim on public authority, resources, or even sympathy."

Egypt Becoming a Nightmare for Muslim Brothers

The quicksand threatens to engulf them all

By Zvi Mazel

For the Muslim Brotherhood, the long awaited dream come true is turning into a nightmare. Having survived 80 years of persecution to achieve power democratically, they suddenly find themselves the focus of widespread popular hatred.

Never have Egyptians been in such dire economic traits.

Egyptian President Mohamed Morsi, however, is not about to give up and make way for new presidential elections. The Brotherhood will spare no effort to stay in power.

Such is the depth of the economic, social and political crisis that the threat of civil war appears all too real.

Most commentators believe the army won't let things go that far and will step in; however the road back to recovery and a civilian regime accepted by all will be long and arduous.

Civil disobedience is rampant.

In Port Said the police have disappeared from the streets and the army called in to maintain law and order. Indeed here and there people are petitioning the courts to appoint popular Defense Minister Abdel Fattah al-Sisi to rule Egypt in Morsi's stead. They know it won't happen but are trying to make a point. Demonstrations calling for getting rid of Morsi and of the Brotherhood are held on a daily basis in Cairo and in cities all over the country. They are met by militant groups of the Brotherhood. Dozens have died and thousands were wounded in the resulting clashes though both sides are trying not to let the violence escalate.

The economy is in shambles.

In a remarkable and enduring show of unity, non-Islamic opposition parties under the banner of the National Salvation Front are boycotting the regime until their demands - canceling the Islamic constitution and setting up a consensus government until new elections are held - are met.

The Muslim Brotherhood who had won a sweeping victory in the first free parliamentary elections and got their candidate elected president have bitterly disappointed the people who had put their faith in them.

Nothing has been done to improve their lot. Upon taking office Morsi had promised - and failed - to take care of five burning issues within a hundred days: growing insecurity, monster traffic jams in the capital, lack of fuel and cooking gas, lack of subsidized bread, and the mounting piles of refuse in the streets.

The president's high-handed attempt to take over all legislative powers and grant himself full immunity provoked such an outcry that he had to back down. He sacked the prosecutor-general and appointed a new one - only to have his decision overthrown by the Cairo Court of Cassation last week, throwing the judicial system into disarray.

Anti-Imperial Presidency

A 19th-century model for the right foreign-policy

By DANIEL LARISON

Grover Cleveland was the only Democrat to serve as president in the second half of the 19th century, and he was arguably the last conservative Democratic president in U.S. history. But what made him a truly remarkable and admirable figure was his opposition to European imperialism throughout his career. Cleveland’s foreign policy was in many respects very traditional, but what set him apart from his contemporaries, and many of his predecessors, was his willingness to employ American power in a limited way for anti-imperialist ends.

Foreign policy was not a major part of the first of Cleveland’s two non-consecutive terms, although between 1886 and 1888 he successfully countered German ambitions in the South Pacific to take control of Samoa—risking diplomatic rupture with a great power over a place where no major U.S. interests were at stake. Upon entering office the second time, Cleveland delayed but ultimately could not prevent the annexation of Hawaii, which the outgoing Harrison administration had been eager to realize.

Following an 1893 coup by American settlers against the native Hawaiian government, Benjamin Harrison had tried to rush an annexation treaty through the Senate during his last days as president. Cleveland withdrew the treaty and tried to find some way to repair the damage that the annexationists had done. But nothing short of direct intervention against the coup government could restore the status quo ante, and that was something Cleveland could not and would not attempt.

Cleveland had more success when he came to the defense of Venezuela in a boundary dispute with Great Britain’s colony in Guyana, a move that briefly increased tensions between London and Washington. Resolving the dispute paved the way for a long-term improvement in relations between the U.S. and Great Britain—though it did so by expanding the scope of the Monroe Doctrine beyond what its authors had originally intended.

Fools Never Learn

This is all so obviously stupid that only a fool could propose it

by Mike "Mish" Shedlock

Proving that fools never learn, the Obama administration pushes banks to make home loans to people with weaker credit 

President Obama’s economic advisers and outside experts say the nation’s much-celebrated housing rebound is leaving too many people behind, including young people looking to buy their first homes and individuals with credit records weakened by the recession.

In response, administration officials say they are working to get banks to lend to a wider range of borrowers by taking advantage of taxpayer-backed programs — including those offered by the Federal Housing Administration — that insure home loans against default.

Housing officials are urging the Justice Department to provide assurances to banks, which have become increasingly cautious, that they will not face legal or financial recriminations if they make loans to riskier borrowers who meet government standards but later default.

Officials are also encouraging lenders to use more subjective judgment in determining whether to offer a loan and are seeking to make it easier for people who owe more than their properties are worth to refinance at today’s low interest rates, among other steps.

Here We Go Again
Mark Hanna commented "And Here We Go Again"
Indeed. Home markets are booming again so let's get everyone in on it.
The whiners are piling on already. 

 “If you were going to tell people in low-income and moderate-income communities and communities of color there was a housing recovery, they would look at you as if you had two heads,” said John Taylor, president of the National Community Reinvestment Coalition, a nonprofit housing organization. “It is very difficult for people of low and moderate incomes to refinance or buy homes.”

Peak Oil Cult Is Proved Spectacularly Wrong

We won't hit peak oil until we hit peak imagination

By ROBERT BRYCE
These are lousy times to be in the peak oil cult.

In December, U.S. oil exports hit a record of 3.6 million barrels per day, thanks in part to soaring domestic petroleum production.

Last year, domestic natural gas production averaged 69 billion cubic feet per day, a record, and a 33% increase over the levels achieved back in 2005. That year, Lee Raymond, the famously combative former CEO of ExxonMobil, declared that "gas production has peaked in North America."

Why has the U.S. oil and gas sector recovered? How is it that last year, U.S. oil production rose by 790,000 barrels per day, the biggest annual increase since U.S. oil production began in 1859? How could Raymond, the leader of one of the world's most sophisticated companies, be so wrong?

The answer: innovation. Over the past century or so, oil and gas drilling has been transformed from an industry dominated by hunches and wildcatters to one that is more akin to the precision manufacturing that dominates aerospace and automobiles.

The convergence of a myriad of technologies — ranging from better drill rigs and drill bits to robotic rigs and nanotechnology — is allowing the oil and gas sector to produce staggering quantities of energy from locations that were once thought to be inaccessible or bereft of hydrocarbons.

Advocates of renewable energy like to point out that in 2012, some $270 billion was spent globally on "clean energy." But spending on oil and gas exploration dwarfs what is spent on renewables. Last year alone, global drilling expenditures totaled $1.2 trillion, nearly 4.5 times the amount spent on alternative energy. Trillions more were spent transporting, refining, and delivering oil and gas to consumers.

The results of all that spending can be seen in the numbers: Between 1949 and 2010, oil and gas companies drilled more than 2.6 million wells in the U.S.

Over that same period, they reduced their dry holes drilled from 34% to 11%. And the percentage of dry holes being drilled continues to fall.

Today's hydrocarbon hunters are so precise that they can drill wells that are two miles deep, turn their drill bit 90 degrees, drill another two miles horizontally, and arrive within a few inches of the targeted pay zone. The technical prowess of the drilling sector has been proved twice this month with announcements of major discoveries in the Gulf of Mexico.

Anadarko Petroleum and its partners found a huge field in what's known as the Lower Tertiary trend, containing as much as 3.7 billion barrels of oil equivalent.

The well was drilled to a depth of 31,000 feet below the ocean floor in 5,800 feet of water.

Rise of the Nuclear Greens

Some environmentalists see atomic energy as the answer to global warming

By Robert Bryce

In theory, the March 11, 2011, disaster at the Fukushima Daiichi nuclear plant should have bolstered environmentalists’ opposition to new nuclear-energy projects. But in the wake of the worst nuclear accident since Chernobyl, some of the world’s leading Greens have done just the opposite: they have come out in favor of nuclear power. Perhaps the most prominent convert is British activist and journalist George Monbiot, who even cites the disaster as one reason for his change of heart. Just ten days after Fukushima, in a column for theGuardian, Monbiot called the use of solar energy in the United Kingdom “a spectacular waste of scarce resources” and declared that wind energy was “hopelessly inefficient” and “largely worthless.” Moreover, he wrote, “on every measure (climate change, mining impact, local pollution, industrial injury and death, even radioactive discharges) coal is 100 times worse than nuclear power.” He concluded: “Atomic energy has just been subjected to one of the harshest of possible tests, and the impact on people and the planet has been small. The crisis at Fukushima has converted me to the cause of nuclear power.”

A number of prominent British and American environmentalists were pronuclear before Fukushima. Among the Americans are longtime environmental activist and publisher Stewart Brand, as well as Ted Nordhaus and Michael Shellenberger, founders of the Oakland-based Breakthrough Institute, a center-left think tank. The Brits include environmentalist Mark Lynas, former British prime minister Tony Blair, and scientist and environmentalist James Lovelock. There’s also a Canadian in the group: Greenpeace cofounder Patrick Moore.

The emergence of the pronuclear Greens represents an important schism in modern environmentalism. For decades, groups like the Sierra Club and Greenpeace have pushed an antinuclear agenda and contended that the only energy path for the future is the widespread deployment of wind turbines and solar panels. But fear of carbon emissions and climate change has catalyzed a major rethinking. As Brand puts it in a new documentary, Pandora’s Promise, which explores the conversion of antinuclear activists to the pronuclear side: “The question is often asked, ‘Can you be an environmentalist and be pronuclear?’ I would turn that around and say, ‘In light of climate change, can you be an environmentalist and not be pronuclear?’ ”

Newfound support can only help the nuclear-energy sector, but it remains to be seen whether nuclear will play a major role in the burgeoning global electricity market, which has grown by about 3 percent per year since 1985. It’s already clear that the Greens’ pronuclear stance won’t have a significant impact on the American electricity market over the next decade or so, for a simple reason: the shale-gas revolution here has produced abundant supplies of low-cost natural gas. In 2010, one of the largest electric utilities in the country, Exelon, said that for new nuclear projects to be economically viable, natural gas would have to cost at least $8 per million Btu. Today, the price is about $3.50, and the shale-gas boom means that a price anywhere near $8 is exceedingly unlikely for years to come. Four nuclear reactors are now being built in the United States—the Vogtle 3 and 4 reactors in Georgia and the Summer 2 and 3 reactors in South Carolina—but the projects are going forward only because regulators in those states have allowed the utilities that own them to recover costs from ratepayers before the projects are finished.

Color Lines

How DNA ancestry testing can turn our notions of race and ethnicity upside down

By W. Ralph Eubanks

When I was a young boy, I found a photograph half-hidden in the back of my parents’ closet, leaned up behind my mother’s stacked boxes of high-heel shoes. A dandyish man in a dark suit and skinny tie stared out at me, bearing a striking resemblance to my mother. Who was he? His hair, parted neatly in the middle, peeked out under a broad-brimmed hat perched jauntily on his head. In time, I learned that the unknown man was my grandfather James Morgan Richardson. But not until I was 16, when I overheard a conversation between my parents in the middle of the night, did I learn that he was white.

My parents kept my grandfather’s portrait hidden because in 1960s Mississippi, with all its racial paranoia, displaying the picture in our living room would have been risky, if not impossible. Severe social consequences awaited any black person claiming close kinship with a white person. So the picture stayed hidden, part of my mother’s past, and my own—something I knew about but didn’t yet feel free to explore.

My mother knew that the portrait fascinated me, and when I got married, she gave it to me. I saw that gift as an invitation to learn more about the man within the borders of the frame. It has taken me 20 years, but I’ve finally begun to figure things out and better understand my own history as well.

In 21st-century America, my family would be described as multiracial. But in the world I grew up in—the American South of the 1950s and 1960s, where the idea of race and identity determined who you were and your place in the world—you were either black or white. We were first colored, later Negroes, and still later black. Claiming mixed status meant you were either trying to be white (implying that black was inferior) or trying to pass for white (a dangerous business few spoke of openly), and doing so carried the risk of being labeled a racial traitor. Consequently, my identity was shaped by the racial boundaries of the American South as well as the double consciousness that W. E. B. Du Bois speaks of in The Souls of Black Folk. I always felt that duality: “an American, a Negro; two souls, two thoughts, two unreconciled strivings; two warring ideals in one dark body, whose dogged strength alone keeps it from being torn asunder.”

My mother was seven years old when her mother died. The town doctor who pronounced my grandmother dead offered to help the family start over as a white family, far away from their small town in rural, isolated south Alabama. Even though my grandmother Edna Howell Richardson was black, all her children’s birth certificates said they were white. So, this “transformation” would have been easy. But in the end my grandfather, the man whose portrait had been hidden in the closet, chose not to hide his children’s mixed race. Instead, my mother and her sister grew up going to black schools and identifying as black. When they married black men, they had to have their race officially changed on their birth certificates in order to get legal marriage licenses.

I grew up hearing my mother say, “You can always tell when someone is passing.” Since she could pass for white, my mother spoke from a position of authority. Racial passing, once a common subject of discussion in the black community, has faded from American consciousness with the emergence of racial and multiracial pride. But even today, with six multiracial grandchildren of her own, my mother stands by her statement: “You can always tell.”

The Netherlands Falls Prey to Economic Crisis

Underwater

By Christoph Schult and Anne Seith

The Netherlands, Berlin's most important ally in pushing for greater budgetary discipline in Europe, has fallen into an economic crisis itself. The once exemplary economy is suffering from huge debts and a burst real estate bubble, which has stalled growth and endangered jobs.

Michel Scheepens is familiar with risk. The 41-year-old oversees the energy market for the Dutch bank ING, and it's his job to determine whether his employer should finance such projects as a wind farm in Cyprus or a gas-fired power plant in Turkey. Until now, it was always other people's money that was involved.

For some time, however, Scheepens has been experiencing what a poor investment feels like on a personal level. Six years ago, the father of three bought half of a duplex for his family in the commuter town of Nieuw-Vennep, near the North Sea coast. The red brick building cost €430,000 ($552,000), but the bank generously offered him a loan of €500,000, so that there was enough money left over for renovations, along with notary and community fees. Scheepens had intended to resell the house after a few years, as is common in the Netherlands. But then prices tumbled following the Lehman bankruptcy. If the family were to sell the house today, it would have to pay the lender €60,000. His house is "onder water," as Scheepens says.

"Underwater" is a good description of the crisis in a country where large parts of the territory are below sea level. Ironically, the Netherlands, once a model economy, now faces the kind of real estate crisis that has only affected the United States and Spain until now. Banks in the Netherlands have also pumped billions upon billions in loans into the private and commercial real estate market since the 1990s, without ensuring that borrowers had sufficient collateral.

Private homebuyers, for example, could easily find banks to finance more than 100 percent of a property's price. "You could readily obtain a loan for five times your annual salary," says Scheepens, "and all that without a cent of equity." This was only possible because property owners were able to fully deduct mortgage interest from their taxes.

Instead of paying off the loans, borrowers normally put some of the money into an investment fund, month after month, hoping for a profit. The money was to be used eventually to pay off the loan, at least in part. But it quickly became customary to expect the value of a given property to increase substantially. Many Dutch savers expected that the resale of their homes would generate enough money to pay off the loans, along with a healthy profit.

An Economy on the Brink

More than a decade ago, the Dutch central bank recognized the dangers of this euphoria, but its warnings went unheeded. Only last year did the new government, under conservative-liberal Prime Minister Mark Rutte, amend the generous tax loopholes, which gradually began to expire in January. But now it's almost too late. No nation in the euro zone is as deeply in debt as the Netherlands, where banks have a total of about €650 billion in mortgage loans on their books.

Consumer debt amounts to about 250 percent of available income. By comparison, in 2011 even the Spaniards only reached a debt ratio of 125 percent.

The Netherlands is still one of the most competitive countries in the European Union, but now that the real estate bubble has burst, it threatens to take down the entire economy with it. Unemployment is on the rise, consumption is down and growth has come to a standstill. Despite tough austerity measures, this year the government in The Hague will violate the EU deficit criterion, which forbid new borrowing of more than 3 percent of gross domestic product (GDP).

It's a heavy burden, especially for Dutch Finance Minister Jeroen Dijsselbloem, who is also the new head of the Euro Group, and now finds himself in the unexpected role of being both a watchdog for the monetary union and a crisis candidate.

Even €46 billion in austerity measures are apparently not enough to remain within the EU debt limit. Although Dijsselbloem has announced another €4.3 billion in cuts in public service and healthcare, they will only take effect in 2014.

Bomb from Brussels

Cyprus Model May Guide Future Bank Bailouts

Should the Cypriot bailout become a model for the future? The mere suggestion sent markets tumbling last week. But increasing numbers of European politicians would like to see bank shareholders and investors bear a greater share of crisis risk. The EU may be changing its strategy. 

By MARTIN HESSE, MICHAEL SAUGA, CORNELIA SCHMERGAL and CHRISTOPH SCHULT

Jeroen Dijsselbloem's original game plan was to just keep a low profile. When the 47-year-old Dutch finance minister became head of the Euro Group three months ago, the first thing he did was deactivate his Twitter account. In meetings of the finance ministers of the 17 euro-zone states, he let his counterparts do most of the talking. And whenever he appeared before reporters in Brussels afterwards, he would start with sentences like: "Maybe it's good, if I say something."

Dijsselbloem seemed determined to become the most boring of all the boring bureaucrats in Brussels -- until last Monday, that is, when he did something no one would have anticipated: He detonated a bomb. The way that large depositors and creditors were being drawn into the bailout of Cypriot banks, he said, could become a model for the entire euro zone. In future aid packages, he said, one must look into whether bank shareholders, bond holders and large depositors could participate so as to spare taxpayers from having to foot the bill. He was announcing nothing less than a 180 degree about face.

Cyprus as a model? Dijsselbloem had hardly finished his comments before international news agencies began registering its impacts. Markets around the world nosedived, the euro sank to a four-month low and EU leaders had to rush into damage-control mode, as did the man who triggered the storm himself. Dijsselbloem backtracked by saying that Cypriot banks were obviously "a special case." Germany's top-selling daily tabloid, Bild, scoffed that Dijsselbloem would get a new nickname in Brussels: "Dusselbloem," the rough equivalent of "Dimwit-bloem."

But the ridicule might prove premature. In reality, Dijsselbloem merely expressed something that many Europeans already think. Whether at the European Parliament or in several Continental capitals, many are saying that the time is ripe for the financial sector to assume a greater share of the costs for rescuing ailing banks.

'Banks Must Save Themselves'

More is at stake than determining just how to deal with insolvent financial institutions. It is about core tenets of the bailout strategy being followed by the EU. Since the collapse of Lehman Brothers in 2008, it has primarily been EU taxpayers who have assumed liability for the fallout. Failing banks, such as Germany's Hypo Real Estate (HRE) or Spain's Bankia, were kept on artificial life support while shareholders and creditors were spared. The advantages were enjoyed not only by actors on the global financial markets, but also by major banking centers, such as those in Luxembourg and London, which could count on seeing governments prop up teetering financial institutions.

A growing number of politicians and experts are demanding an end to this arrangement. In the future, German Chancellor Angela Merkel said, "banks must save themselves." And German central bank board member Andreas Dombret is convinced that the financial sector can only regain health once there are no longer "implicit state guarantees for banks."

A Christian Catastrophe ...

... and why we should care

By RALPH PETERS

Islamist terrorists and fanatics are methodically exterminating the 2,000-year-old Christian civilization of the Middle East through oppression, threats, appropriations and deadly violence.

Our media ignore the intensifying savagery against Christians in Muslim Brotherhood-controlled Egypt. Unconfirmed reports assert that, last month, Muslim Brothers dragged Christian protesters to a mosque and tortured them — but our reporters won’t look into an Islamist Abu Ghraib.

For a century and a half, the varied strands of Middle East Christianity have faced increasingly fierce pogroms and, for the Armenians, outright genocide. But with the rise of Wahhabi and Salafist terror, the long, slow-motion Holocaust accelerated.

Western liberals romanticize barbaric cultures but have no interest in the destruction — before their averted eyes — of a great and brilliant religious civilization. It’s as if they accept the Islamist creed that Christians don’t belong in the realms of Islam.

But the Middle East was more than just Christianity’s birthplace. The faith we knowmaturedin the Middle East and North Africa, from Ephesus and Antioch to Alexandria and beyond. St. Augustine, the most influential church father after St. Paul, was a North African.

Rome was a latecomer to Christian authority. Through the Middle Ages, substantially more Christians lived east of Constantinople (now Istanbul) than in Europe, the faith’s backwater, whose northern reaches had yet to be evangelized.

Christianity’s greatest thinkers, greatest monuments and greatest triumphs for its first 1,000 years rose in the Middle East. Even the Muslim conquest and relative servitude could not dislodge Christianity. In the worst of times, Christianity turned the other cheek and endured. Some Christians flourished.

Today, the end is in sight.

In Iraq, cities such as Mosul and Saddam’s hometown, Tikrit, were once vital centers of Christianity. But the country’s Christian population, estimated at up to 2 million a decade ago, has fallen by half — perhaps by three-quarters.

Over 2 million Christians in Syria dread Islamist terror and religious cleansing so much, they lean toward the vicious Assad regime, which at least shielded minorities. Those who can, flee the country.

Christians were early supporters of Arab nationalism. One of the fiercest Palestinian leaders, George Habash, was a Christian, as was the wife of Yasser Arafat. Their thanks? Two-thirds of the West Bank’s and more of Gaza’s Christians have been driven out. They’re now a small minority even in Bethlehem (a situation ignored by our visiting president).

Middle East "Democracy"

Democracy in the Middle East context means majority selection of which individuals get the power to oppress

By Thomas Sowell 

The Obama administration treated the creation of "democracy" in the Middle East as a Good Thing. Ironically, those who created the United States of America viewed democracy with fear-- and created a Constitutional republic instead.

Everything depends on how you define democracy. In its most basic sense, democracy means majority rule. But there can be majority rule in a free country or in a country with an authoritarian or even a dictatorial government.

In this age of sloppy uses of words, many people include freedom in their conception of democracy. But whether democracy leads to freedom is an open question, not a foregone conclusion.

In the United States, when the Union army of occupation withdrew from the South, years after the Civil War, majority rule returned to the Southern states-- and the freedom of blacks was drastically restricted from what it had been under military rule.

Those who applauded the spread of democracy in the Middle East seemed to assume that the "Arab Spring" meant greater freedom. But there was no reason to assume that beforehand-- and certainly no reason to believe it after the fact. Christians in Egypt have already lost whatever security they had under Hosni Mubarak.

The idea that "all people want freedom" is one of those feel-good phrases that some people indulge in. But you do not get a free country just because everybody wants freedom-- for themselves. You can have a free country only when people are willing to let other people have freedom.

Nazis were free to be Nazis under Hitler and Communists were free to be Communists under Stalin and Mao. But nobody else was free.

Toleration for others is a precondition for a free society-- and it is hard to think of more intolerant societies than most of those in the Middle East. There have been female heads of state in some other Islamic countries, but not in the Middle East.

Democracy in the Middle East context means majority selection of which individuals get the power to oppress. Why would anyone have seriously believed that it would mean anything more than that? Certainly not from the history of the region.

Beyond parody

Nothing other than falling flat on their faces would inspire the correct reaction from the masses

If you are a parody of conservative values, then what the heck am I? Stephen Colbert, to a conservative television host. 

By Chan Akya

Perhaps undocumented victims of the global financial crisis for the past six years would include comedy writers, particularly those who attempt to make a living by writing slyly ironic articles about ''fake'' news that somehow echo reality but are taken to be funny because they are so very farfetched. The genre of spoof artists, in other words. Such people may still exist in particular spheres - physics and philosophy for example - but away from those, it is difficult to imagine that spoof writers could have any semblance of a career these days. 

At least in the financial world, these spoof artists have pretty much nothing to do, for their livelihoods have been stolen by the very people who they are supposed to parody - politicians, bankers and economists. If you don't believe me, take a simple test and go ahead and spot the spoof news item below: 

• Central bank vows to create inflation 
• Authorities tax savings held in bank deposits
• Governments borrow to fight debt crisis 
• Mutual funds pile into government bonds yielding less than inflation 
• Governments increase tax rates to fight recession

Turning Argentine...

The U.S. is an even richer country, but not so rich that a determined government cannot ruin it

by Bill Bonner

U.S stock markets were closed on Good Friday. When they reopened on Monday, investors seemed unmotivated. Neither the Dow nor the price of gold moved appreciably. Gold ended the day right on the $1,600 mark.

Not much to report, in other words.

Here in Argentina, most things were closed on Monday for the Easter holidays... and are closed again today, too.

What do these Argentines think they are? French?

We wandered the streets. Here in the Palermo Soho neighborhood of Buenos Aires, where we are staying, there were thousands of people window-shopping, eating in restaurants and drinking in outdoor cafes.

Inflation is running about 30% per year. The government is proposing to use citizens' pension funds to pay off its creditors. You get 50% more for your money if you trade your dollars for pesos on the black market. And experts are predicting another big devaluation of the peso after the October elections.

Ten Fast Facts On The Economics Of Immigration

The benefits could potentially outweigh the costs

by Nick Colas

While immigration is back on the docket in Washington, the topic has yet to capture much attention on Wall Street, taking a back seat to European troubles and the Dow rally. The inattention seems warranted, as immigration is typically cast as a simply societal issue – but I urge you to reconsider its economic importance. The reality is that immigration, and any reform thereto, has real, visible impacts on the US economy at both the micro and macro levels, from GDP to job growth:GDP is first and foremost a product of population growth and productivity – and immigration plays a role in both. Population growth in particular is attributable almost exclusively to immigration, as fertility rates among native-born citizens fall. In fact, from 2003 to 2010, 20% (4,071,000) of the more than 21 million person increase in the population was in the foreign-born population, bringing their share of the entire population from 11.9% to 12.4%.

GDP is first and foremost a product of population growth and productivity – and immigration plays a role in both. Population growth in particular is attributable almost exclusively to immigration, as fertility rates among native-born citizens fall. In fact, from 2003 to 2010, 20% (4,071,000) of the more than 21 million person increase in the population was in the foreign-born population, bringing their share of the entire population from 11.9% to 12.4%.

Immigration is also crucial to the health of the housing market. The foreign-born make up 14% of homeowners in the US, and more than half of them own their homes outright, according to Census figures. Naturalized citizens are more likely to own than rent, but the 16 million naturalized and non-citizen households – a number that is growing every year with the immigrant population – fuels a good portion of the new and existing sales we see every month.