The folly of striking Syria

Obama’s third war

By RALPH PETERS

You might as well try to teach a snake to juggle as hope the Obama administration will think strategically. The “peace president” is about to embark on his third military adventure, this time in Syria, without having learned the lessons of his botched efforts in Afghanistan and Libya. He hasn’t even learned from the Bush administration’s mistakes — which he mocked with such delight.

Before launching a single cruise missile toward Syria, Team Obama needs to be sure it has a good answer to the question, “What comes next?”

If Obama does a Clinton and churns up some sand with do-nothing cruise-missile strikes, it will only encourage the Assad regime. But if our president hits Assad hard and precipitates regime change, then what?

If al Qaeda and local Islamists seize Damascus, what will we do? The enfeebled “moderate opposition” we back rhetorically couldn’t dislodge hardcore jihadis, no matter how many weapons we sent (the jihadis would simply confiscate the gear).

What if we weaken the regime to the point where the fanatics rev up their jihad to drive out Christians and other minorities? What’s your plan then, Mr. President? After your night of explosive passion, will you still love the opposition in the morning?

Exactly which American vital security interests are at stake in Syria, Mr. President? Your credibility? Put a number on it. How many American lives is your blather about red lines worth?

Chemical weapons use? Horrible and illegal, a war crime. So is the mass slaughter of civilians. Is it really so much worse to be gassed than tortured to death by al Qaeda or burned alive in your church? Which is more important, the number of dead, or the means that killed them?

Islamist terrorists have killed tens, if not hundreds, of thousands, of innocent Muslims. Aren’t they the real enemies of civilization?

Mr. President, do you really think it’s wise to send our missiles and aircraft to provide fire support for al Qaeda? That is exactly what you’ll be doing, if you hit Assad.

Assad’s an odious butcher, filth on two legs. But in the world of serious strategy, you rarely get a choice between black and white. You choose between black and charcoal gray.

Employing our military assets to support either side in Syria would be a mistake. Employing them without a worst-case plan for what might follow would be criminal.

We just can’t seem to learn, though. Invading Iraq, the Bush team, egged on by ideologues who never served in uniform, refused to allow our military to plan for an occupation. That sure worked out. Then, in Libya, the Obama administration deposed Khadafy, but refused to plan seriously for the aftermath. Welcome to Benghazi.

There are wars worth fighting. It was essential to go to Afghanistan in the wake of 9/11 (although staying there was idiocy). There will be future conflicts that demand our blood to defend vital interests. But we’ve now had a decade of do-gooder wars that haven’t done much good.

For the record, I don’t regret getting rid of Saddam or Khadafy. I regret the ineptitude with which we did these things. When you propose a war, don’t ever expect a cheap date.

Now there’s an unholy alliance pushing for attacks on Syria. We have liberal zealots, such as our UN ambassador, Samantha Power, who believe that our military’s primary purpose is to protect people who hate America. We have a few Republican senators like John McCain and Lindsey Graham who support any war, any time. We have a president who thinks that, “Gee, maybe, well, gosh, I said I’d do something, so maybe I should...” And we have elements in the defense industry who long for a return to our free-spending years in Iraq and Afghanistan and view a war in Syria as a great way to beat the sequester.

And the one thing every member of that bomb-Syria-now coalition has in common? Not one will have to fight. 

A Disappearance Act for Italy

Entire Factories Are Shipped Out of Italy Overnight

by Pater Tenebrarum

One day you see it, the next you don't. Fabrizio Pedroni's Firem Srl., a maker of electrical car components, that is. According to a report at Bloomberg late last week, the owner of the factory just had the entire thing packed up, lock, stock and barrel, and had it secretly shipped it to Poland overnight, a place where capital is evidently treated better than in Italy.

It is interesting to read why exactly he decided to act under the cover of darkness:

“Earlier this month, Fabrizio Pedroni wished his employees a happy summer holiday and told them to return to work in three weeks. That night, he began dismantling his electric component factory in northern Italy and packing its machinery off to Poland.

“Had I told them earlier about any plans to shift the production abroad, they would have occupied my factory and seized all my stuff,” Pedroni said in an Aug. 21 telephone interview from Poland. “The plain truth is that I wanted my business to survive and there weren’t the right conditions for me to operate in Italy any longer.”

The news that Firem Srl, based in Formigine near Modena, was shifting to Eastern Europe reached the 40 employees too late. On Aug. 13, 11 days after Pedroni activated his plan, a group of employees suspicious of the movements around the plant rushed to its gates just in time to stop the last of 20 lorries packed with machinery. Firem’s move became a national controversy and the fate of its workers is still unclear.

The loss of the factory highlights the struggle Italy faces to revive manufacturing and its economy, which remained in recession in the second quarter even as the broader euro area returned to growth. Italy ranks 128th in the World Economic Forum’s global pay and productivity table, one place behind Burkina Faso, compared with 39th for Poland.”

The fate of the workers is in fact clear: they are now jobless. Pedroni had to do what he did to escape the inevitable blackmail and violent disregard of private property of militant Italian unions, as his tale reveals. Meanwhile, Italy's appalling productivity ranking (behind Burkina Faso? That really takes some doing) proves one of our main contentions when we discussed Mario Monti's so-called 'reforms'. There were no reforms. All he did was raise taxes and put pressure on the citizenry with intimidation tactics (his financial police took pride in terrorizing the citizenry and regarded it as a major objective). Obviously, Italy's labor market reform has at best been cosmetic.

Democracy’s Dog Days

We all want democracy to thrive and flourish, but can it?

By Victor Davis Hanson

The Obama administration was quite pleased that the anti-democratic Mohamed Morsi and his Muslim Brotherhood had come to power through a single plebiscite. That confidence required a great deal of moral blindness, both of the present and past.

Like other once-elected authoritarians who believe that democracy is similar to a bus route — in the words of Mr. Erdogan of Turkey, once you get to your stop, you get off — Morsi had no intention of fostering the sort of consensual institutions so necessary for republican government. Almost immediately he gave a de facto green light to cleanse the government of his opponents, to Islamicize a once largely secular society, and to persecute religious minorities.

Like a Hitler, Mussolini, Mugabe, or Hugo Chavez, Morsi was counting on the legitimacy from a once-in-a-lifetime largely free election, and then the use of state power, if not terror, to institutionalize his authoritarian rule. Morsi’s legacy is that he was both a beneficiary of the Arab Spring in Egypt and almost singlehandedly ended it.

Unfortunately, there seem to be no signs of democracy’s revival elsewhere in the Arab world or, for that matter, all that many recent vibrant examples in the world at large these days.

In contrast, after the end of the Cold War there was a giddy “end of history” moment. By the new millennium, “democratic” government and free market capitalism were accepted as the natural — indeed, the foreordained — final stage in civilization’s evolution. And why not? The Soviet Union was in shambles. Eastern Europe was democratizing. Latin American democracies were starting to crowd out both communist and right-wing dictatorships. The European Union was ushering in the euro to self-congratulatory proclamations of a new social democratic heaven on Earth. The betting was when, not if, a newly capitalist China democratized. Bill Clinton, under duress, had moved America to the democratic center, and was helping to balance budgets.

Only the Islamic Middle East resisted the supposedly inevitable democratic urge. As the world’s regional holdout, the region was seen as well overdue for its turn at majority rule. Democratization, we Americans argued, might force the Muslim world to emulate those consensual systems with far better records of stable governance and widespread prosperity. With freedom and affluence, the age-old Middle East pathologies — misogyny, religious intolerance, tribalism, fundamentalism, anti-Semitism, and statism — would fade along with terrorist-driven violence. Or so it was thought.

Now, in the second decade of the new millennium, democracy is not just having a rough time, but failing in a way that its harsh critics so often predicted, from Plato to Nietzsche and Spengler.

Often the recent world confused plebiscites with democracy, as if the two were synonymous.

The only thing we learn from history is that we do not learn from history

Congress Should Veto Obama’s War

By PATRICK J. BUCHANAN

“Congress doesn’t have a whole lot of core responsibilities,” said Barack Obama last week in an astonishing remark.

For in the Constitution, Congress appears as the first branch of government. And among its enumerated powers are the power to tax, coin money, create courts, provide for the common defense, raise and support an army, maintain a navy and declare war.

But, then, perhaps Obama’s contempt is justified.

For consider Congress’ broad assent to news that Obama has decided to attack Syria, a nation that has not attacked us and against which Congress has never authorized a war.

Why is Obama making plans to launch cruise missiles on Syria?

According to a “senior administration official … who insisted on anonymity,” President Bashar al-Assad used chemical weapons on his own people last week in the two-year-old Syrian civil war.

But who deputized the United States to walk the streets of the world pistol-whipping bad actors. Where does our imperial president come off drawing “red lines” and ordering nations not to cross them?

Neither the Security Council nor Congress nor NATO nor the Arab League has authorized war on Syria.

Who made Barack Obama the Wyatt Earp of the Global Village?

Moreover, where is the evidence that WMDs were used and that it had to be Assad who ordered them? Such an attack makes no sense.

Firing a few shells of gas at Syrian civilians was not going to advance Assad’s cause but, rather, was certain to bring universal condemnation on his regime and deal cards to the War Party which wants a U.S. war on Syria as the back door to war on Iran.

Why did the United States so swiftly dismiss Assad’s offer to have U.N. inspectors — already in Damascus investigating old charges he or the rebels used poison gas — go to the site of the latest incident?

Do we not want to know the truth?

Are we fearful the facts may turn out, as did the facts on the ground in Iraq, to contradict our latest claims about WMDs? Are we afraid that it was rebel elements or rogue Syrian soldiers who fired the gas shells to stampede us into fighting this war?

With U.S. ships moving toward Syria’s coast and the McCainiacs assuring us we can smash Syria from offshore without serious injury to ourselves, why has Congress not come back to debate war?

Lest we forget, Ronald Reagan was sold the same bill of goods the War Party is selling today — that we can intervene decisively in a Mideast civil war at little or no cost to ourselves.

Reagan listened and ordered our Marines into the middle of Lebanon’s civil war. And he was there when they brought home the 241 dead from the Beirut barracks and our dead diplomats from the Beirut embassy.

The only thing we learn from history is that we do not learn from history. Congress should cut short its five-week vacation, come back, debate and decide by recorded vote whether Obama can take us into yet another Middle East war.

The questions to which Congress needs answers:

·                     Do we have incontrovertible proof that Bashar Assad ordered chemical weapons be used on his own people? And if he did not, who did?

·                     What kind of reprisals might we expect if we launch cruise missiles at Syria, which is allied with Hezbollah and Iran?

·                     If we attack, and Syria or its allies attack U.S. military or diplomatic missions in the Middle East or here in the United States, are we prepared for the wider war we will have started?

·                     Assuming Syria responds with a counterstrike, how far are we prepared to go up the escalator to regional war? If we intervene, are we prepared for the possible defeat of the side we have chosen, which would then be seen as a strategic defeat for the United States?

·                     If stung and bleeding from retaliation, are we prepared to go all the way, boots on the ground, to bring down Assad? Are we prepared to occupy Syria to prevent its falling to the Al-Nusra Front, which it may if Assad falls and we do not intervene?

The basic question that needs to be asked about this horrific attack on civilians, which appears to be gas related, is: Cui bono?

To whose benefit would the use of nerve gas on Syrian women and children redound? Certainly not Assad’s, as we can see from the furor and threats against him that the use of gas has produced.

The sole beneficiary of this apparent use of poison gas against civilians in rebel-held territory appears to be the rebels, who have long sought to have us come in and fight their war.

Perhaps Congress cannot defund Obamacare. But at least they can come back to Washington and tell Obama, sinking poll numbers aside, he has no authority to drag us into another war. His Libyan adventure, which gave us the Benghazi massacre and cover-up, was his last hurrah as war president.

Guilty as charged

Re-education at George Mason

By Walter E. Williams

This week begins my 34th year serving on George Mason University’s distinguished economics faculty. You might imagine my surprise when I received a letter from its Office of Equity and Diversity Services notifying me that I was required to “complete the in-person Equal Opportunity and Prevention of Sexual Harassment Policies and Procedures training.” This is a leftist agenda for indoctrination, thought control and free speech suppression to which I shall refuse to submit. Let’s look at it.

Ideas such as equity and equal opportunity, while having high emotional value, are vacuous analytical concepts. For example, I’ve asked students whether they plan to give every employer an equal opportunity to hire them when they graduate. To a person, they always answer no. If they aren’t going to give every employer an equal opportunity to hire them, what’s fair about forcing employers to give them an equal opportunity to be hired?

I’m guilty of gross violation of equality of opportunity, racism and possibly sexism. Back in 1960, when interviewing people to establish a marital contract, every woman wasn’t given an equal opportunity. I discriminated against not only white, Indian, Asian, Mexican and handicapped women but men of any race. My choices were confined to good-looking black women. You say, “Williams, that kind of discrimination doesn’t harm anyone!” Nonsense! When I married Mrs. Williams, other women were harmed by having a reduced opportunity set.

George Mason’s Office of Equity and Diversity Services has far more challenging equity and diversity work than worrying about the re-education of Professor Williams. They must know that courts have long held that gross racial disparities are probative of a pattern and practice of discrimination. The most notable gross racial disparity on campus, and hence probative of discrimination, can be found on GMU’s fabulous men’s basketball team. Blacks are less than 9 percent of student enrollment but are 85 percent of our varsity basketball team and dominate its starting five. It’s not just GMU. Watch any Saturday afternoon college basketball game and ask yourself the question fixated in the minds of equity, diversity and inclusion hunters: Does this look like America? Among the 10 players on the court, at best there might be two white players. In 2010, 61 percent of Division I basketball players were black, and only 31 percent were white.

Allied with the purveyors of equity, diversity and inclusion are the multiculturalists, who call for the celebration of cultures. For them, all cultures are morally equivalent and to deem otherwise is Eurocentrism. That’s unbridled nonsense. Ask your multiculturalist: Is forcible female genital mutilation, as practiced in nearly 30 sub-Saharan Africa and Middle Eastern countries, a morally equivalent cultural value? Slavery is practiced in Sudan and Niger; is that a cultural equivalent? In most of the Middle East, there are numerous limits on women — such as prohibitions on driving, employment, voting and education. Under Islamic law, in some countries, female adulterers face death by stoning, and thieves face the punishment of having their hand severed. Are these cultural values morally equivalent, superior or inferior to those of the West?

Western values are superior to all others. Why? The greatest achievement of the West was the concept of individual rights. The Western transition from barbarism to civility didn’t happen overnight. It emerged feebly — mainly in England, starting with the Magna Carta of 1215 — and took centuries to get where it is today.

One need not be a Westerner to hold Western values. A person can be Chinese, Japanese, Jewish, African or Arab and hold Western values. It’s no accident that Western values of reason and individual rights have produced unprecedented health, life expectancy, wealth and comfort for the ordinary person.

Western values are under ruthless attack by the academic elite on college campuses across America. They want to replace personal liberty with government control and replace equality before the law with entitlement. The multiculturalism and diversity agenda is a cancer on our society, and our tax dollars and charitable donations are supporting it. 

World learns to manage without the US

The dogs of war are loose and will choose their own direction

By Spengler 

The giant sucking sound you here, is the implosion of America's influence in the Middle East. Vladimir Putin's August 17 offer of Russian military assistance to the Egyptian army after US President Barack Obama cancelled joint exercises with the Egyptians denotes a post-Cold-War low point in America's standing. Along with Russia, Saudi Arabia and China are collaborating to contain the damage left by American blundering. They have being doing this quietly for more than a year.

The pipe-dream has popped of Egyptian democracy led by a Muslim Brotherhood weaned from its wicked past, but official Washington has not woken up. Egypt was on the verge of starvation when military pushed out Mohammed Morsi. Most of the Egyptian poor had been living on nothing but state-subsidized bread for months, and even bread supplies were at risk. The military brought in US$12 billion of aid from the Gulf States, enough to avert a humanitarian catastrophe. That's the reality. It's the one thing that Russia, Saudi Arabia and Israel agree about. 

America's whimsical attitude towards Egypt is not a blunder but rather a catastrophic institutional failure. President Obama has surrounded himself with a camarilla, with Susan Rice as National Security Advisor, flanked by Valerie Jarrett, the Iranian-born public housing millionaire. Compared to Obama's team, Zbigniew Brzezinski was an intellectual colossus at Jimmy Carter's NSC. These are amateurs, and it is anyone's guess what they will do from one day to the next. 

By default, Republican policy is defined by Senator John McCain, whom the head of Egypt's ruling National Salvation Party dismissed as a "senile old man" after the senator's last visit to Cairo. McCain's belief in Egyptian democracy is echoed by a few high-profile Republican pundits, for example, Reuel Marc Gerecht, Robert Kagan, and Max Boot. Most of the Republican foreign policy community disagrees, by my informal poll. Former defense secretary Donald Rumsfeld blasted Obama for undermining the Egyptian military's ability to keep order, but his statement went unreported by major media.

It doesn't matter what the Republican experts think. Few elected Republicans will challenge McCain, because the voters are sick of hearing about Egypt and don't trust Republicans after the debacles in Iraq and Afghanistan. 

Neither party has an institutional capacity for intelligent deliberation about American interests. Among the veterans of the Reagan and Bush administrations, there are many who understand clearly what is afoot in the world, but the Republican Party is incapable of acting on their advice. That is why the institutional failure is so profound. Republican legislators live in terror of a primary challenge from isolationists like Senator Rand Paul (R-KY), and will defer to the Quixotesque McCain.

Hi, I'm your new Axis of Evil

Arabs killing Arabs, divide and rule ad infinitum

By Pepe Escobar 

I have argued that what has just happened in Egypt is a bloodbath that is not a bloodbath, conducted by a military junta responsible for a coup that is not a coup, under the guise of an Egyptian "war on terror". Yet this newspeak gambit - which easily could have been written at the White House - is just part of the picture.

Amid a thick fog of spin and competing agendas, a startling fact stands out. A poll only 10 days ago by the Egyptian Center for Media Studies and Public Opinion had already shown that 69% were against the July 3 military coup orchestrated by the Pinochet-esque Abdel Fattah al-Sisi. 

So the bloodbath that is not a bloodbath cannot possibly be considered legitimate - unless for a privileged coterie of Mubarakists (the so-called fulool), a bunch of corrupt oligarchs and the military-controlled Egyptian "deep state". 

The Muslim Brotherhood (MB) government led by Mohamed Morsi may have been utterly incompetent - trying to rewrite the Egyptian constitution; inciting hardcore fundamentalists; and bowing in debasement in front of the International Monetary Fund. But it should not be forgotten this was coupled with permanent, all-out sabotage by the "deep state". 

It's true that Egypt was - and remains - on the brink of total economic collapse; the bloodbath that is not a bloodbath only followed a change in the signature on the checks, from Qatar to Saudi Arabia (and the United Arab Emirates). As Spengler has demonstrated on this site (see Islam's civil war moves to Egypt, Asia Times Online, July 8, 2013), Egypt will remain a banana republic without the bananas and dependent on foreigners to eat any. The economic disaster won't go away - not to mention the MB's cosmic resentment.

The winners, as it stands, are the House of Saud/Israel/ Pentagon axis. How did they pull it off? 

When in doubt, call Bandar 
In theory, Washington had been in (relative) control of both the MB and Sisi's Army. So on the surface this is a win-win situation. Essentially, Washington hawks are pro-Sisi's Army, while "liberal imperialists" are pro-MB; the perfect cover, because the MB is Islamic, indigenous, populist, economically neoliberal, it wants to work with the International Monetary Fund, and has not threatened Israel. 

The MB was not exactly a problem for either Washington and Tel Aviv; after all ambitious ally Qatar was there as a go-between. Qatar's foreign policy, as everyone knows, boils down to cheerleading the MB everywhere. 

So Morsi must have crossed a pretty serious red line. It could have been his call for Sunni Egyptians to join a jihad against the Bashar al-Assad government in Syria (although that's formally in tune with Barack Obama's "Assad must go" policy). Arguably, it was his push to install some sort of jihadi paradise from the Sinai all the way to Gaza. The Sinai, for all practical purposes, is run by Israel. So that points to a green light for the coup from both the Pentagon and Tel Aviv. 

Tel Aviv is totally at ease with Sisi's Army and the flush Saudi supporters of the military junta. The only thing that matters to Israel is that Sisi's Army will uphold the Camp David agreements. The MB, on the other hand, might entertain other ideas in the near future. 

For the House of Saud, though, this was never a win-win situation. The MB in power in Egypt was anathema. In this fateful triangle - Washington, Tel Aviv and Riyadh - what remains to be established is who was been the most cunning in the wag the dog department. 

That's where the Incredibly Disappearing Qatar act fits in. The rise and (sudden) fall of Qatar from the foreign policy limelight is strictly linked to the current leadership vacuum in the heart of the Pentagon's self-defined "arc of instability". Qatar was, at best, an extra in a blockbuster - considering the yo-yo drifts of the Obama administration and that Russia and China are just playing a waiting game. 

Sheikh Hamad al-Thani, the emir who ended up deposing himself, clearly overreached not only in Syria but also in Iraq; he was financing not only MB outfits but also hardcore jihadis across the desert. There's no conclusive proof because no one in either Doha or Washington is talking, but the emir was certainly "invited" to depose himself. And not by accident the Syrian "rebel" racket was entirely taken over by the House of Saud, via the spectacularly resurfaced Bandar Bush, aka Prince Bandar bin Sultan.

A bad year for the Snake Oil Industry

Up to our ears in Al Gore’s ‘climate change’ snake oil

By Wesley Pruden

Al Gore and his traveling medicine show is back in town with his new, improved snake oil, guaranteed to grow hair, improve digestion, promote regularity and kill roaches, rats and bedbugs. Al and his wagon rumbled into town on the eve of “a major forthcoming report” from the Intergovernmental Panel on Climate Change, which is a panel of scientists affiliated with the United Nations. Their report is expected to buck up the spirits of the tycoons of the snake-oil industry.

A snake-oil salesman’s lot, like a policeman’s, is not a happy one. There’s always a skeptic or two (or three) standing at the back of the wagon, eager to scoff and jeer. The global-warming scam would have been right up Gilbert and Sullivan’s street. Would Al and the U.N. deceive us? No! Never! What! Never? Weeeell, hardly ever.

The New York Times, a faithful shill for Al’s snake-oil elixir, following the wagon from town to town, got an advance copy of the U.N. report and gives out with the “good” news: It’s a “near certainty” that humans are responsible for the rising temperatures of recent decades, and warns that by the end of the century all the little people — small children, midgets and others whose growth was stunted by drinking coffee and smoking cigarettes at an early age — will be up to their belly buttons in salt water. The seas will rise by more than three feet.

The inconvenient truth Al and the junk scientists have to deal with is that temperatures aren’t rising, but falling. In fact, since the early 1990s we’ve had global cooling. It got so embarrassing Al and the junk scientists started calling it “climate change.” Some days it rains, some days it doesn’t and some days it’s a little of both. That’s real change. The U.N. panel concedes that global warming has in fact given way to global cooling, but attributes this to “short-term factors.” The minions of the compliant media, ever eager to blow hard about the coming end of the world, when women and minorities will suffer most, will rattle and twitter about the U.N. climate report with their usual tingle and flutter.

Global Merger Piece by Piece

Stealth and Deception towards a Socialist Global Government

by  William F. Jasper

On February 12, 2013, the Council on Foreign Relations (CFR) hosted a speaker program entitled The G-20: Prospects and Challenges for Global Governance. The program, which was video-recorded and is available for viewing on the CFR website (www.cfr.org), featured a lineup of top-drawer talent from the CFR brain trust. It also yielded a number of revealing statements by the panel participants. But an admission by Eurasia Group President Ian Bremmer is especially noteworthy, in that it once again publicly confirms what critics of the European Union have been saying for dec­ades, but which CFR globalists such as  Bremmer have usually denied. Bremmer admitted — with apparent approval — that “there’s real subversion of sovereignty by the EU.”

The sponsoring organization and the participants in the above-noted event are significant and worth mentioning, as they have been providing key political and intellectual leadership for the ongoing phenomenon of regionalization.

The CFR panel included:

• Nicolas Berggruen, chairman of the Berggruen Institute on Governance and coauthor of Intelligent Governance for the 21st Century: A Middle Way Between West and East;

• Ian Bremmer, president, Eurasia Group;

• Stewart M. Patrick, senior fellow and director of the International Institutions and Global Governance Program at the CFR; and

• Anne-Marie Slaughter, Bert G. Kerstetter Professor of Politics and International Affairs at Princeton University, and recently the director of Policy Planning for the Obama State Department under Hil­lary Clinton.

Professor Slaughter, who served as the presider of the CFR panel discussion, has taught at the University of Chicago and Harvard University, and is a former president of the American Society of International Law. She has also authored some of the most blatant appeals — for the CFR journal Foreign Affairs and other establishment periodicals — in favor of subverting national sovereignty with regional schemes of “transnational governance.”

But we digress; let us return to the Bremmer subversion quote referred to above. His outburst came amidst the venting of frustration by the panelists over what they see as the “ineffectiveness” of the G20 process. Professor Slaughter and Berggruen, particularly, argued that the G20 needed to be given actual powers that would enable it to do more to effect global governance. According to the CFR panelists, national sovereignty and national interests get in the way of this desired goal. Thus, Bremmer commented: “The EU is much more significant. There’s real subversion of sovereignty by the EU that works.”

We have pointed out for many years that the designers of the European Union intended from the very start of the EU — which began in the 1950s as the six-member European Coal and Steel Community (ECSC) — that it would gradually develop into a supranational regional government, eventually subverting the sovereignty of, and usurping legislative, executive, and judicial powers of, its member states. This plan of intentional subversion has been documented from many sources, including the personal correspondence, diaries, and memoirs of many of the EU architects, as well as official papers, many of which had been hidden under a cloak of secrecy for decades.

Déjà Vu Detroit

Looting is still going strong 

by SCOTT BEYER

To those who viewed Detroit’s decline as an inevitable result of longtime Democratic rule, the city’s bankruptcy filing last month came as welcome news. Finally, they figured, here was a chance to force prudent reforms on the terminally mismanaged Motor City. But at least one recent decision makes clear that Detroit won’t be rethinking its failed strategies for economic growth.

Just a week after the city declared bankruptcy, a state board approved a $450 million bond issue for a new Red Wings hockey arena near downtown. To help finance it, Detroit would pay $284.5 million in subsidies and an additional $12.8 million annually on bond interest. In return, Red Wings owner Mike Ilitch, who also owns the Detroit Tigers, MotorCity Casino Hotel, and Little Caeser’s pizza, would chip in $365.5 million for the arena and several mixed-use projects. The new complex would represent an upgrade from the dated Joe Louis Arena, where the Red Wings play now, and—boosters say—would potentially revitalize the Midtown area, which is already gentrifying somewhat. The Detroit Development Authority would fund and operate the arena with downtown property taxes. In other words, revenue traditionally used for schools and basic services would instead subsidize a billionaire.

Such deals have a long history in Detroit. At best, the city’s numerous publicly subsidized projects have become boondoggles; at worst, they have destroyed whole neighborhoods. Such projects, writes MIT’s Robert Goodspeed, were envisioned as early as the 1920s, when Detroit’s growing economic muscle made it a hotbed for progressive planners. Their ideas didn’t see fruition until after World War II, when Mayor Albert Cobo used eminent domain to make way for new highways, hospitals, private developments, and the expansion of Wayne State University. The city’s planning department earned a sterling national reputation, but the developments—which entailed mass demolitions and extensive relocation of residents—proved ruinous for the communities. In the 1960s, the heyday of urban renewal, Detroit became a testing ground for President Lyndon B. Johnson’s “Model Cities” program, which sought to micromanage the economic development of struggling neighborhoods.

Since then, the city has never stopped banking on grand schemes to reverse its steady decline. The publicly operated Cobo Convention Center opened in 1960 and began losing money immediately, running annual deficits reaching tens of millions. In 1977, the Ford Motor Company financed the gargantuan, $350 million Renaissance Center; two decades later, Ford sold the complex for just $76 million to rival GM. The city connected the two facilities in 1987 with a much-ridiculed, $200 million People Mover. The monorail never came close to covering its upfront costs and still operates with annual losses around $10 million, while doing basically nothing to address transportation needs. Detroit continued to wield its eminent domainpower, with attempted or successful takings to accommodate the city’s two remaining auto plants, a private bridge, a business park, a major housing complex, a waterfront casino district, and two relatively new stadiums—Comerica Park and Ford Field.

France Is Heading For The Biggest Economic Train Wreck In Europe

France: On the Edge of the Periphery

By JOHN MAULDIN

"The emotional side of me tends to imagine France, like the princess in the fairy stories or the Madonna in the frescoes, as dedicated to an exalted and exceptional destiny. Instinctively I have the feeling that Providence has created her either for complete successes or for exemplary misfortunes. Our country, as it is, surrounded by the others as they are, must aim high and hold itself straight, on pain of mortal danger. In short, to my mind, France cannot be France without greatness.

– Charles de Gaulle, from his memoirs

Recently there have been a spate of horrific train wrecks in the news. Almost inevitably we find out there was human error involved. Almost four years ago I began writing about the coming train wreck that was Europe and specifically Greece. It was clear from the numbers that Greece would have to default, and I thought at the time that Portugal would not be too far behind. Spain and Italy clearly needed massive restructuring. Part of the problem I highlighted was the significant imbalance between exports and imports in all of the above countries.

In the Eurozone there was no mechanism by which exchange rates could be used to balance the labor-cost differentials between the peripheral countries and those of the northern tier. And then there's France. I've been writing in this space for some time that France has the potential to become the next Greece. I've spent a good deal of time this past month reviewing the European situation, and I'm more convinced than ever that France is on its way to becoming the most significant economic train wreck in Europe within the next few years.

We shifted focus at the beginning of the year to Japan because of the real crisis that is brewing there. Over the next few months I will begin to refocus on Europe as that train threatens to go off the track again. And true to form, this wreck will be entirely due to human error, coupled with a large dollop of hubris. This week we will take a brief look at the problems developing in Europe and then do a series of in-depth dives between now and the beginning of winter. The coming European crisis will not show up next week but will start playing in a movie theater near you sometime next year. Today's letter will close with a little speculation on how the developing conflict between France and Germany and the rest of its euro neighbors will play out.

France: On the Edge of the Periphery

I think I need first to acknowledge that the market clearly doesn't agree with me. The market for French OATS (Obligations Assimilables du Trésor), their longer-term bonds, sees no risk. The following chart is a comparison of interest rates for much of the developed world, which I reproduce for those who are interested in comparative details. Notice that French rates are lower than those of the US, Canada, and the UK. Now I understand that interest rates are a function of monetary policy, inflation expectations, and the demand for money, which are all related to economic growth, but still….

France's neighbors, Italy and Spain, have rates that are roughly double France's. But as we will see, the underlying economics are not that much different for the three countries, and you can make a good case that France’s trajectory may be the worst.

"No: France Is Not Bankrupt" – Really?

We will start with a remarkable example of both hubris and economic ignorance published earlier this year in Le Monde. Under the headline "No: France Is Not Bankrupt," Bruno Moschetto, a professor of economics at the University of Paris I and HEC, made the following case. He apparently wrote this with a straight face. If you are not alone, please try not to giggle out loud and annoy people around you. (Hat tip to my good friend Mike Shedlock.)

No, France is not bankrupt .... The claim is untrue economically and financially. France is not and will not bankrupt because it would then be in a state of insolvency.

A state cannot be bankrupt, in its own currency, to foreigners and residents, since the latter would be invited to meet its debt by an immediate increase in taxation.

In abstract, the state is its citizens, and the citizens are the guarantors of obligations of the state. In the final analysis, "The state is us." To be in a state of suspension of payments, a state would have to be indebted in a foreign currency, unable to deal with foreign currency liabilities in that currency….

Ultimately our leaders have all the financial and political means, through the levying of taxes, to be facing our deadlines in euros. And besides, our lenders regularly renew their confidence, and rates have never been lower.

Four things leap to mind as I read this. First, Professor, saying a country is not bankrupt because it would then be insolvent is kind of like saying your daughter cannot be pregnant because she would then have a baby. Just because something is unthinkable doesn't mean it can't happen.

Second, contrary to your apparent understanding and the understanding of your partners in the Eurozone, especially Germany, France does not have its own currency. The Greeks, Portuguese, Italians, and Spanish have all found out that they cannot print their own currencies, no matter how much they wish they could. You are all bound up in a misguided economic experiment called the euro. Deal with it. For all intents and purposes you are in fact indebted in a foreign currency. On your current path you will soon have to go to Germany and the rest of Europe asking for a special dispensation simply because you are France. If this development weren't so potentially tragic, with horrific economic implications for the entire world, it would be especially amusing theater.

Third, I find the use of the term invited in the phrase "invited to meet its debt by an immediate increase in taxation" to be quite a wonderful French expression. Your tax rates are already among the highest in Europe. At a 75% top tax rate, your entrepreneurs and businesspeople are leaving the country in droves. That icon of economic enlightenment, tennis star Serena Williams, recently commented in Rolling Stone magazine that "75% doesn't seem legal." Gerard Depardieu and many others not quite so famous agree and have already left. You are going to collect less, not more, taxes from the rich with your remarkably ill-considered increase in the top tax rate. Just look across the channel to England and see how their raising their top rate merely to 50% worked out for them.

Fourth and finally, you clearly haven't done your homework on economic crises. The fact that your interest rates are low and that your loans routinely get rolled over simply says that you have not yet come to your own Bang! moment. Every country that falls into crisis is able to get financing at low rates right up until the moment it can't. It is all about investor confidence, and I readily admit that right now you have it. But through its policies the current government is doing everything it possibly can to destroy the confidence of the bond market as rapidly as it can. And France is particularly dependent upon non-French sources for the financing of its debt.

Let’s look at few facts, Prof. Moschetto: