Senior Eurozone Official: "As Spain Goes, So Goes Slovenia"

And Slovenia is going the same way Cyprus, Ireland, Greece, and Portugal went

By Mike "Mish" Shedlock

The spotlight is once again on Slovenia. Olli Rehn, the European commission’s economic chief is unhappy with economic progress in Slovenia and is threatening to put the country into an "excessive imbalances procedure" by the end of the month.

The problem is, Spain is in a similar "excessive imbalance" state prompting an unnamed eurozone official to state "As Spain Goes, So Goes Slovenia".

Please consider Brussels trains its sights on Slovenia.

 The European Commission is being pushed to take a tougher line with Slovenia amid mounting concerns that infighting is hampering the country’s ability to overhaul its banking sector and avoid becoming the next rescue target in the eurozone crisis.

According to two senior eurozone officials, concerns have focused on “non-cooperation” between Slovenia’s finance ministry and central bank, which is responsible for supervising the financial sector. One of the officials said the central bank was being “obstructionist” towards the new government’s clean-up efforts.

Single mothers are the have-nots in income and education

Single moms are making us broke

By Joe Soucheray

It was reported the other day on an inside page of the Pioneer Press, and without nearly enough fanfare, that more than six out of 10 women who give birth in their early 20s are unmarried. That is census data, from census demographers, from the very government that then becomes responsible for many, if not most, of those unmarried women and children.

If that isn't an astonishing statistic, it should be. Why, to any logical person's way of thinking, it explains everything in terms of government at all levels bloating out of control.

Supposing that even angels might fear to tread here, it being liberal dogma that I shouldn't be telling women what to do, or men, either, for that matter, I would submit that marriage would solve virtually every economic issue facing this country.

The census demographers said that single motherhood, on the increase since the 1940s, has accelerated mindblowingly. The birth rate for unmarried women in 2007 was up 80 percent in the almost three decades since 1980. Just between 2002 and 2007, it was up 20 percent.

The census people didn't use the word mindblowingly. I have chosen it because these numbers are chilling and so telling of the true nature of the government's insatiable spending. Just think of entitlement spending the next time the hypocrites in Washington want to take a snowplow off the road in Yellowstone or take a few flight controllers out of a tower because of this so-called sequestration. Who do they think they are fooling?

Statistically, you can avoid poverty in America by getting a high-school degree and waiting to get married before having a child. It's really that simple.

Carla del Ponte’s Faux Pas

Good war propaganda is nothing if not flexible

By Justin Raimondo 

Poor Carla del Ponte – as soon as she let the cat out of the bag on the Syria “sarin gas” hoax a flurry of articles appeared in the mainstream media reporting panicked denials by UN officials and reminding us all of her past sins.

John Hudson, writing in Foreign Policy, led off with a piece entitled “UN Investigator on Syria: Out Over Her Skis Yet Again?” Did you know she once said it was her duty to investigate war crimes committed by NATO, as well as by the Serbs, in the course of the Kosovo war? Since everyone knows the Western powers never commit war crimes – they’re inherently incapable of it – her office had to “walk back” her comments.

It happened again with the publication of her book, The Hunt: Me and the War Criminals, in which the famed war crimes investigator gave credence to widespread allegations of organ-farming by the criminal gang that took over Kosovo after the “liberation.” “Appalling!” screeched the critics – not in response to the considerable evidence that the “Kosovo Liberation Army” and allied Albanian Mafia did indeed harvest organs from Serb prisoners, but in reaction to her being so impolitic as to mention it.

Germany Under Pressure To Create Money

The next asset class to experience a bubble could be fiat money itself

By John Browne

Currently, central banks around the world are walking in lock step down a dangerous path of money creation. Led by the Federal Reserve and the Bank of Japan, economic policy is driven by the idea that printed money can be the true basis of growth. The result is an unprecedented global orgy of currency creation. The only holdout to this open ended commitment has been the hard money bias of the German-dominated European Central Bank (ECB). However, growing political pressure from around the world, and growing dissatisfaction among domestic voters have shaken, and perhaps cracked, the German resolve. While German capitulations in the past have been welcome occurrences, in this instance the world would be better served if the Germans could stick to their guns.

Last week the statement issued by the Federal Open Market Committee (FOMC) put to rest any expectations that Quantitative Easing in the United States would be coming to an end anytime soon. With an ambiguous, but decidedly dovish statement, the stage appears to be set for an expansion of the $85 billion per month program.  The statement further obscured the criteria that the Fed is supposed to rely on to begin a winding down of the program, leaving market participants increasingly uncertain.

The Federal Reserve Is A Perpetual Debt Machine

11 Reasons Why The Federal Reserve Should Be Abolished

by Michael Snyder

If the American people truly understood how the Federal Reserve system works and what it has done to us, they would be screaming for it to be abolished immediately.  It is a system that was designed by international bankers for the benefit of international bankers, and it is systematically impoverishing the American people.

The Federal Reserve system is the primary reason why our currency has declined in value by well over 95 percent and our national debt has gotten more than 5000 times larger over the past 100 years. 

The Fed creates our "booms" and our "busts", and they have done an absolutely miserable job of managing our economy.  But why do we need a bunch of unelected private bankers to manage our economy and print our money for us in the first place?  Wouldn't our economy function much more efficiently if we allowed the free market to set interest rates? 

And according to Article I, Section 8 of the U.S. Constitution, the U.S. Congress is the one that is supposed to have the authority to "coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures".  So why is the Federal Reserve doing it?  Sadly, this is the way it works all over the globe today.  In fact, all 187 nations that belong to the IMF have a central bank.  But the truth is that there are much better alternatives.  We just need to get people educated.

The following are 11 reasons why the Federal Reserve should be abolished...

Would legalizing undocumented workers really cost $6.3 trillion?

Big policy changes don’t exist in a vacuum, isolated from the rest of the economy

By James Pethokoukis 

Even if US budgets were deep in the black, it would be perfectly legitimate to examine the fiscal costs of legalizing millions of currently undocumented workers. But such analysis should provide as full an economic picture as possible for policymakers. A new Heritage foundation study, while providing some useful data points, is frustratingly incomplete.

Certainly pundits and activists with axes to grind will run hard with Heritage’s claim that “former unlawful immigrants together …  would generate a lifetime fiscal deficit (total benefits minus total taxes) of $6.3 trillion.” Quite a talking point — one researchers arrive at via a fairly straightforward calculation. They simply determine the difference between their forecast of futures taxes paid and benefits received. Fair enough and good to know.

The study, however, fails to capture indirect but important economic impacts of immigration such as increasing economic activity or positively affecting American employment. Both of those would lead to higher tax revenues and reduced transfer payments. Surely every effort should be given to factoring in such dynamic impacts of immigration reform. The Heritage study says, for instance, that “taxes and benefits must be viewed holistically.” So, too, immigration overall. Big policy changes don’t exist in a vacuum, isolated from the rest of the economy. (And, of course, the study only focuses on a single part of comprehensive immigration reform.)

What amnesty for illegal immigrants will cost America

US is a nation of immigrants, but ...

By Jim DeMint and Robert Rector

The economist Milton Friedman warned that the United States cannot have open borders and an extensive welfare state. He was right, and his reasoning extends to amnesty for the more than 11 million unlawful immigrants in this country. In addition to being unfair to those who follow the law and encouraging more unlawful immigration in the future, amnesty has a substantial price tag.

An exhaustive study by the Heritage Foundation has found that after amnesty, current unlawful immigrants would receive $9.4 trillion in government benefits and services and pay more than $3 trillion in taxes over their lifetimes. That leaves a net fiscal deficit (benefits minus taxes) of $6.3 trillion. That deficit would have to be financed by increasing the government debt or raising taxes on U.S. citizens.

For centuries immigration has been vital to our nation’s health, and it will be essential to our future success. Yet immigrants should come to our nation lawfully and should not impose additional fiscal costs on our overburdened taxpayers. An efficient and merit-based system would help our economy and lessen the burden on taxpayers, strengthening our nation.

Conservative group warns immigrants could cost US $6.3tn

This assumes that people are just costs and don’t contribute anything

By Anna Fifield

The 11m unauthorised immigrants in the US could cost taxpayers $6.3tn if they were allowed to become American citizens, according to a study from the conservative Heritage Foundation .

The think-tank’s study, which is out of sync with the vast majority of other economic analyses, was immediately criticised for being ideologically driven and selective with the facts.
But Heritage hopes for a repeat of 2007, when it used a similar economic report to motivate opponents of immigration reform during the final year of George W. Bush’s presidency and helped kill a proposed bill.

Berlin demands treaty change for bank reforms

A banking union only makes sense if mechanisms for the restructuring and resolution of banks are in place

By Alex Barker

Germany laid down a big barrier on the fast track to European banking union, insisting a revision of EU treaties is necessary to create a single authority to wind up banks, even if it took several years to accomplish.

Wolfgang Schäuble, the German finance minister, strongly voiced his legal concerns at an informal meeting of EU finance ministers Dublin over the weekend. His comments point to the high political stakes involved in forging a common institution to shut down troubled financial groups.

His intervention in Dublin was a shot across the bows of the European Commission as it prepares to publish a blueprint for the resolution reforms in June – as well as a reality-check for reformers pushing for the full banking union framework to be agreed in the coming 12 months.

By throwing his weight behind the need for a treaty revision in the medium term, Mr Schäuble also raised Britain’s hopes of opening a path to an eventual repatriation of powers from the EU.

George Osborne, the UK finance minister, made clear that Britain’s backing for treaty change would come at a price. “That sent a chill around,” said one person in attendance.

Differences put aside as Berlin and Paris seek common ground

Next Step - Banking Union 

By Quentin Peel in Berlin

Sniping between France and Germany has been almost constant in recent months.

In Paris, politicians have accused Berlin of bullying their European partners into excessive austerity at the expense of economic growth. The Germans have retorted, usually off the record, that the pusillanimous French have failed to reform their economy and revive their ailing competitiveness.

But when Wolfgang Schäuble and Pierre Moscovici, the two countries’ finance ministers, met on Tuesday to celebrate the 25th anniversary of the Franco-German economic and financial council, they came to praise the partnership, not to bury it.

“We are not here to expand on our differences,” the Francophile Mr Schäuble told a gathering of students from both countries at Berlin’s Free University. “We are here to seek common solutions.”

Can Egypt's Islamist finance minister cut a deal with the IMF?

How should the money supply be organized in Islamic thought ?

By David Kenner

The big news in Cairo is that a long-awaited cabinet reshuffle has finally become a reality. President Mohamed Morsy swore in nine new ministers today in a move that increases the Muslim Brotherhood's representation in the government. The shakeup comes as Egypt is deep in talks with the International Monetary Fund (IMF) about a $4.8 billion loan intended to help the country jumpstart its stagnant economy.

The IMF talks mean that the replacement of Egypt's finance minister is the most important change to come out of the reshuffle. The new finance minister is Fayyad Abdel Moneim, who previously worked as an economics professor at al-Azhar University, the oldest Sunni Muslim educational institution in the world.

France: End of the affair

France’s share of world trade had fallen by a third since 2002

By Hugh Carnegy 

One year into office, François Hollande’s economic management has sparked fears of a social breakdown

Hanging off lampposts, waving flags, lighting flares and cheering wildly, tens of thousands of supporters of François Hollande crammed into the Place de la Bastille in Paris at midnight to greet France’s first socialist president for almost two decades.

“I will live up to your hopes,” he promised the exuberant crowd.

How things have changed in the space of a year.

Waiting at the Bastille in a milling throng of trade unionists for the start of the traditional May Day workers’ parade, Emmanuelle, a civil servant who declines to give her family name, recalls the victory scenes with a resigned sigh.

“I was here that night,” she says. “There was an atmosphere of great hope. Now we are all very disappointed. All the promises – especially to stop companies laying off workers – have not been met.”

Amadou Diop, a student, echoes the sentiment. “I am very disappointed. His social record is bad. He hasn’t stopped the job losses. There is a feeling that the country is plunging into decline and there is a lack of hope.”

Problems have only mounted for Mr Hollande since he took power last May from Nicolas Sarkozy.

Russia's Energy Bully Takes a Fall

The energy giant -- and Putin's power base -- looks set for hard times

BY ALEXANDROS PETERSEN

After years as Eurasia's energy bully, Russia's state-controlled natural gas monopoly, Gazprom, is getting a taste of its own medicine. Even as Gazprom seeks to build the tallest skyscraper in Europe as its new headquarters in St. Petersburg, pressure from Russia's neighbors led to a 15 percent decline in the company's profits last year, eating into the state budget. Moscow's single-minded focus on gas exports in an effort to become, in the words of President Vladimir Putin, an "energy superpower" has crippled its ability to adapt to profound changes in the global energy landscape -- from the shale gas revolution in North America to the dynamism of new market players such as Azerbaijan. Having spent the last decade making enemies in Central Europe and Central Asia, Gazprom and Russian decision-makers are now reaping what they have sown.

Policymakers in European capitals could be forgiven for a little schadenfreude right now. Building on the legacy of Soviet gas exports to the Eastern Bloc and parts of Western Europe, Putin and his cohorts in the Kremlin have, for years, used Gazprom as a cudgel in Moscow's relations with European Union member states. Over the past decade, well over a third of EU gas imports have come from Russia, with a number of Eastern European states almost completely dependent on Gazprom. Bulgaria, for example, receives more than 95 percent of the natural gas it consumes from the company. Millions of European consumers shivered through the winters of 2006, 2008, and 2009 when Gazprom cut off supplies in order to squeeze middlemen in Ukraine, Belarus, Georgia, and Moldova who had had the temerity to buck Moscow's policies.

Sergei Lavrov and the blunt logic of Russian power

Minister No

BY SUSAN B. GLASSER

In the mid-19th century, Russia was not doing well. It had just been humiliated in the Crimean War, and the other European great powers were busy intriguing about the tsarist empire's frontiers now that the Turks had stopped Russian expansion to the Black Sea. It was in response to these setbacks that Alexander Gorchakov, the prince who served as Russia's foreign minister, issued his famous diplomatic circular. "Russia is not sulking," he proclaimed. "She is composing herself."

By the late 1990s, that must have sounded like a perfect retort to a Russian nationalist whose country was on the ropes. Yevgeny Primakov, a crusty old product of the Soviet diplomatic corps elevated to foreign minister by an increasingly beleaguered President Boris Yeltsin, dusted off the tsarist history books and resurrected Gorchakov as a model for a new Russian diplomacy. He cited him in speeches, wrote a long article extolling Gorchakov's clever realpolitik maneuvers, and even installed his bust in the creaky grandeur of the Foreign Ministry, a Stalinist Gothic skyscraper filled with thousands of underemployed and barely paid bureaucrats still reeling from the Soviet Union's abrupt collapse a few years earlier and the Russian state's quick descent into financial crisis, international debt, and even, on its southern frontier, civil war. So what if we had a few setbacks, Primakov seemed to be saying; Russia can still be a great power. And to prove it: Here's our very own Bismarck.

Israel’s Three Gambles

Can Israel get away with its attacks on the Syrian regime?

BY DANIEL BYMAN, NATAN SACHS

Israel's recent attacks against Syria are the latest, dramatic development in a conflict that is already spiraling out of control. In the past few days, Israeli aircraft reportedly targeted Iranian surface-to-surface missiles headed for Hezbollah, as well as Syrian missiles in a military base in the outskirts of Damascus. Israel's strikes show, once again, its intelligence services' ability to penetrate the Iran's arms shipment route to Lebanon and its military's skill in striking adversaries with seeming impunity. But Israel is also risking retaliation and further destabilization of its own neighborhood -- in ways that may come back to haunt it.

With much of Syria outside the control of Bashar al-Assad's forces, Israel is particularly wary of chemical weapons or advanced conventional weaponry falling into the wrong hands, whether it's extremist Sunni opposition groups like Jabhat al-Nusra or, more immediately, Assad's and Iran's Lebanese ally, Hezbollah. The missiles Israel sought to hit in the first attack on Friday have a significantly larger payload, greater accuracy, and longer range than the bulk of the Lebanese Shiite group's current arsenal.

Bernanke's Neofeudal Rentier Economy

The Fed has directly created a neo-feudal rentier economy and society

by charles smith

Federal Reserve Chairman Bernanke is a Reverse Robin Hood, robbing from the lower 95% and giving to the financier class. The Real Reverse Robin Hood: Ben Bernanke and his Merry Band of Thieves (August 31, 2012).

It's worth understanding the mechanisms of this wealth transfer: in essence, the Fed extends low-cost credit (i.e. "free money") to the financier class which then uses this free money to buy rentier assets, that is, assets that generate economic rents for the owners, who add no value and create no wealth.

This is of course the neofeudal model: the financial aristocracy in the manor house own the rentier assets and the debt-serfs toil away to pay the rents and taxes. The financier class (i.e. those that benefit from the financialization of the economy) are as unproductive as feudal lords; they skim the profits generated by the debt-serfs while adding no productive value to the economy. 

The collapse of liberty in Scotland

From hiding away cigarettes to hiking up the price of booze – Scotland is a world-beater in state nannying

by Stuart Waiton 

The Scottish government has enforced yet another measure designed to help us help ourselves: it has passed a law requiring that all supermarkets hide cigarettes from public view.

This follows the enforcement of the public smoking ban in 2006; the raising of the legal age for buying cigarettes to 18 years; and a levy on cigarettes sold in supermarkets, which led some shops to stop selling them altogether. The aim is to create a smoke-free Scotland by 2035. One wonders if Scottish politicians also plan to make Scotland a heroin-, cocaine- and dope-free society, too. Good luck with that. Strangely enough, some Scots keep taking drugs despite their not coming in shiny packets or being sold at supermarkets.

With the proposed change to the voting age in Scotland, it’s possible that by 2035 16-year-olds will have the chance to elect their own government yet will be barred from buying cigarettes or even being allowed to see them.

It is not just cigarettes that Scottish officials are targeting. Alcohol prices are set to rise, again with the aim of creating a ‘healthier Scotland’. And Scotland’s public-health minister, Michael Matheson, wants to ban TV advertising of fatty foods before 9pm.

Why the political class is so scared of Farage

In the electoral successes of UKIP, Britain’s political elite glimpses its own creeping irrelevance and out-of-touchness

by Tim Black 

The UK Independence Party did well in last week’s local elections, picking up 23 per cent of the vote and 147 council seats. It certainly did better than the flailing Liberal Democrat Party which, with only 13 per cent of the vote, lost 124 seats, leaving it with just 352 seats in total.

Still, UKIP did not do as well as the Labour Party, which added 291 seats to its existing 247, on 29 per cent of the vote. And although the Conservative Party lost 335 seats, on 26 per cent of the vote, it still holds 1,116 seats in total. So, although UKIP did well, its success - it holds only the 147 seats it won on Thursday in total - needs to be put into a bit of perspective.

Since the results came in at the end of last week, however, perspective has been singularly lacking. In fact, given the hysterical response among the political and media class to UKIP’s success, you could be forgiven for thinking UKIP had actually come out on top, not third to the UK’s two struggling main parties. Rarely has an electoral success prompted such agonising. UKIP, remember, is a party with fewer actual MPs than either the Green Party or the latest George Galloway Party (they both have one each). Yet while editorials have wrung their papers’ hands, tied as they are by party-political allegiance, and commentators have tried to make sense of just what has gone wrong and rightwards, it’s the party-political establishment which seems most traumatised.

Chief among the trauma victims are the Tories who, having spent the best part of a decade desperately dismissing UKIP as fruitcakes, closet racists and clowns, are now virtually deferring to what appears to be UKIP’s awesome force. Several leading Conservative figures came out over the weekend urging prime minister David Cameron to steal UKIP’s anti-EU thunder by staging an in-out referendum before and not after the next General Election. And Cameron himself, once mocker-in-chief of UKIP, is now calling for respect for the party’s electoral achievements.

Words That Replace Thought

In doing so, they turn smart people into morons

By Thomas Sowell 

If there is ever a contest for words that substitute for thought, “diversity” should be recognized as the undisputed world champion.

You don’t need a speck of evidence, or a single step of logic, when you rhapsodize about the supposed benefits of diversity. The very idea of testing this wonderful, magical word against something as ugly as reality seems almost sordid.

To ask whether institutions that promote diversity 24/7 end up with better or worse relations between the races than institutions that pay no attention to it is only to get yourself regarded as a bad person. To cite hard evidence that places obsessed with diversity have worse race relations is to risk getting yourself labeled an incorrigible racist.

Free thinking is not free.

The Supreme Court of the United States has ruled that the government has a “compelling interest” in promoting diversity — apparently more compelling than the 14th Amendment’s requirement of “equal protection” of the law for everybody.

How does a racially homogeneous country like Japan manage to have high quality education, without the essential ingredient of diversity, for which there is supposedly a “compelling” need?

Conversely, why does India, one of the most diverse nations on Earth, have a record of intergroup intolerance and lethal violence today that is worse than that in the days of our Jim Crow South?

Even to ask such questions is to provoke charges of unworthy tactics, and motives too low to be dignified with an answer. Not that the true believers in diversity could answer anyway.

Among the candidates for runner-up to “diversity” as the top word for making thought obsolete is “fair.”

Apparently everyone is entitled to a “fair share” of a society’s prosperity, whether they worked 16-hour days to help create that prosperity or did nothing more than live off the taxpayers or depend on begging or crime to bring in a few bucks.

The Incredible Shrinking Monsieur Hollande

To have Mr. Normal as the new normal in France won’t wash

By Samuel Gregg 

All political leaders have their bad patches. Ronald Reagan, for example, wasn’t exactly the most popular politician in America in 1982. But few politicians have experienced as sharp a reversal of fortune as France’s embattled Socialist president, François Hollande.

May 15 marks Hollande’s first anniversary in office. Yet just one year after he defeated Nicolas Sarkozy, Hollande is scoring the lowest-ever approval ratings for any French head of state since polling began. According to one poll, if an election were held this month, Hollande would lose to the leader of France’s far-right National Front, Marianne Le Pen. “Mr. Normal,” as he was dubbed by way of contrast to his egomaniacal predecessor, is starting to look like “Mr. Irrelevant.”

So why such a rapid fall from grace? Some of it is of Hollande’s own making, such as his effort to impose a 75 percent tax on personal incomes over €1 million. Though the measure was eventually ruled unconstitutional, it managed to alienate a business community already suspicious of someone who once publicly proclaimed, “I dislike the rich.” The fact that Hollande is now trying to levy the same tax-rate on businesses that pay salaries over €1 million isn’t helping matters.

Nor did it help that the minister charged by Hollande with cracking down on tax-fraud, Jerome Cahuzac, was forced to resign after admitting he had maintained a Swiss bank account for over 20 years. Cahuzac is now under investigation for tax-fraud. The situation worsened when Hollande ordered his ministers to fully disclose all their personal holdings. Everyone in France has thus been reminded that most of the Socialist ministers who regularly rail against les riches are themselves quite wealthy. Caviar-Limousine-Champagne Socialism, anyone?

Another cause of Hollande’s woes was been his government’s insistence upon legalizing same-sex marriage. This is despite millions of French citizens regularly, loudly and insistently protesting this move on the streets of Paris and other French cities. The left’s response was to try and dismiss it all as a “Catholic thing.” But that turned out to be not so easy once it became evident that many secular-minded people, feminists, Jews, Muslims, and even some gay activists were among the movement’s leaders and marchers.