Fears that Southern Europe could not maintain fiscal discipline has caused the Euro to plummet and sparked market losses worldwide. News of a Portuguese defeat of a proposed austerity measure, added to reports that Greece is balking at measures which can plug a hole twice the size of the Lehman Brothers abyss and reluctance in Spain to cutting public spending have convinced some investors to conclude that the belt will never be tightened enough.
The VOA describes the situation: “Some analysts predict Greece could be pushed out of the bloc. Also unclear is whether the Greek government will have the political will to carry out the painful fiscal measures it promised — particularly if they spark protests. Spain also faces potential social unrest over its austerity measures. And in Portugal, the parliament on Friday voted down the government’s austerity plan.” But the real worry was Spain. Neither the collapse of Greece nor Portugal could seriously threaten the Eurozone, but Spain’s much bigger economy could. The Wall Street Journal describes the scenario that has caused the market to fall: a weak Europe stalls the global recovery and leads to a fall in commodities. Like an airplane which has lost lift, someone, somewhere has got to get enough airflow over the wings to get the thing flying again. But how?
“The markets are betting on a situation that I don’t think will happen, which is a more extreme situation of default or an economy leaving the euro area,” said Carlos Almeida Andrade, chief economist of Banco Esprito Santo in Lisbon. … “The sovereign-credit concerns are just overwhelming people,” said Peter Boockvar, strategist at Miller Tabak. “It’s one big liquidation. People have been hoping there will be one event that will clear up the problems, but they’re having to realize, it’s going to be a process.” …
AdvertisementThe breach triggered numerous sell stops, automatic orders to exit trading positions that many investors set up around major price milestones. Within minutes, oil prices had tumbled to $69.50 a barrel … oil’s free-fall acted as a cue for other commodities to follow suit. Copper sank to its lowest settlement since October… Gold, too, followed oil lower, … ICE March sugar was down 4.5% at 26.44 cents a pound.
“There’s a sense of uneasiness about … how robust the recovery’s going to be.”
The political reaction to the crisis has been to pull back hard on the stick as everyone moves to defend their entitlements. Spain’s Zapatero vows to defend the Euro have been met by hostility from his politial base. The unions have told him to take a hike. Trade union officials asked whether Zapatero wanted “social conflict”: in other words, whether he wanted a fight. There was even talk of a general strike with some saying that if the Spanish Prime Minister wanted to commit “hara-kiri” then it was his funeral. “Si Zapatero se quiere hacer el harakiri, si es su deseo, será su voluntad”.
Unfortunately the unions haven’t quite figured out that they might be commiting hara-kiri as well. An even deeper crisis in southern Europe is not beyond the realm of possibility.
Events in Europe prefigure the possible negative consequences of President Obama’s pump priming public spending. Large increases in public spending are politically painful to wind down. The administration’s spending binge will lead to a dependence which will not be easy to kick. Rich Lowry describes the “inverse relationship” between public employment and the economic downturn at Real Clear Politics. As the economy falls the public sector rises.
The percentage of federal civil servants making more than $100,000 a year jumped from 14 percent to 19 percent during the first year and a half of the recession, according to USA Today. At the beginning of the downturn, the Transportation Department had one person making $170,000 or more a year; now it has 1,690 making that.
The New York Times reports that state and local governments have added a net 110,000 jobs since the beginning of the recession, while the private sector has lost 6.9 million. The gap between total compensation of public and private workers has only widened during the downturn, according to USA Today. In 2008, benefits for public employees grew at a rate three times that of private employees.
Public employees have developed an inverse relationship to the rest of the economy – as it shrinks, shedding jobs and cutting salaries, they draw on a never-ending taxpayer bounty.
What happens when the time comes to play the movie in reverse and downsize government? Jeffrey Sachs says why downsize it at all? The answer to the deficit is simple: raise taxes. In an article in Time, Sachs argues that America should be more like Europe and up the share the taxman takes. “Compared with those in other rich countries, taxes in the U.S. are low. Yet government spending is persistently higher than taxes: the budget deficit is at a record high for peacetime, and Washington is utterly paralyzed when it comes to addressing urgent needs.” Here’s a list of some of those urgent needs.
Shortfalls in education outlays are shortchanging young people, forcing many to leave college before they graduate because families are unable to cover college tuition. The conversion to clean energy is stymied by a lack of cash. Future NASA missions are being scrubbed. The list is long and perilous. …
The total tax take, federal plus state, amounts to 28% to 30% of GDP. That is more than 10 percentage points lower than the average total revenue collections in Europe. … We need a new political consensus. No doubt the Republicans are just waiting for Obama to reverse his campaign promise on taxes so that they can pounce, just as Democrats did when George H.W. Bush broke his “Read my lips,” no-new-taxes promise. Such is politics, where the first rule is to pander to antitax sentiment. But if we carry on down that road, we will end up with a much deeper fiscal crisis — the kind where the dollar collapses, foreigners stop buying Treasury bills and public services fall apart while inflation soars.
The answer, Sachs says, must be a mixture of tax increases and judicious spending cuts. The problem, apart from the fact that those countries Sachs longs to be like are no longer “rich” (Spain has an unemployment rate of 20%. Youth unemployment is near 40%), is that the tax increase route may lead to precisely the trap that has imprisoned the Southern Europeans. With a proportionately reduced private sector the economy becomes uncompetitive, tax revenues drop and require even greater tax increases to maintain the beloved level of public “investment”. Demand falls and commodity prices drop. Where have we seen that before? Maybe in today’s news?
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Even though it looks like the brakes are starting to be applied to the Obama economic and trade policies, with large portions of the industrialized world heading into the tank, a recovery may be a very long hard slog for the US??
S. Korea is doing well in comparison to the US for example, but N. Korea is getting closer and closer to collapse. The Chinese have warned N. Korea if a collapse comes don’t even think about heading north and don’t even think about aid from our direction. So S. Korea could be faced with the nightmare of trying to reconstruct N. Korea and having their economy dragged down.
“Demand falls and commodity prices drop. Where have we seen that before? Maybe in today’s news?”
And before that, in 1931.
It always astounds me that people like Sachs look at economies from such a literal, mechanistic sense without having any concept of the forces which make them grow or contract. If there is one thing that everyone has agreed that we learned from the last great depression, it is that raising taxes in the middle of an economic slowdown guarantees disaster. That is the final factor which induces the death spiral that economies cannot break free from – the death spiral that Greece, Spain, and Portugal are caught up in now.
There is an incredibly persistent myth that Herbert Hoover did nothing to fight the depression – in fact, he tried a great number of policies. But most significantly, he thought that running a deficit in down times was a very bad thing, so he worked very hard to raise taxes as needed to keep the budget balanced (what Sachs is calling for) and in order to help pay those taxes, he supported massive increases on tarriffs on foreign goods. In that he had the help of the infamous Smoot and Hawley. By itself, it looked like a good way to raise cash – but they just assumed that no one worldwide would retaliate by doing the same thing to American goods.
Everyone did retaliate, and since taxes were going up, there was no excess money at home to bolster domestic consumption in order to make up for the lost foreign sales.
Within 18 months unemployment was at 25%, and breadlines were everywhere.
That is a blueprint for creating a Great Depression, and those are the plans which Mr. Sachs wishes us to undertake today. Mr. Hoover was not a fool; at least he had some rational expectation that his policies would work, even though in the end they did not.
Mr. Sachs cannot say the same.
Jeffrey Sachs, he rhymes with Tax
Says we should be like Norway
Or Spain or Greece, despite the facts
That show, Jeff, going your way
Will lead to higher taxes still
And higher unemployment
Insuring that the government will
Bring massive debt enjoyment
We’re much too much like Europe now
In debt up to our tookus
But guys like Jeffrey always bow
To lefty schemes to cook us
Another thought – why should Greece, Portugal, or Spain quit the EU? They still get the benefit of a relatively strong currency (the Euro) even though they have no spending discipline whatsoever. It would be much worse for them if they had their own collapsing currencies. And most importantly, the EU threatens and blusters but it has no credible enforcement mechanism to force them to clean up their acts. The EU will never have the courage to kick anyone out, so what is to stop them from doing what they want?
France and Germany are the nations that are really going to take it in the teeth, because they are going to have to bail out these countries in order to defend the Euro even though they say they won’t do it.
They have to – to refuse is to destroy the political backing for the very existence of the Euro, their own currency. Therefore when push comes to shove they’re going to agree that it’s better to inflate and pump out more debt and thus slowly destroy the Euro rather than refuse and immediately destroy the Euro.
Germany and France are in a peculiar situation which the Romans were known to do to a prisoner who they wished to punish in a particularly gruesome way – they would shackle him to a corpse, and force him to remain shackled as the body slowly rotted away. Few, if any, survived long from that kind of treatment.
Southern Europe is the corpse which France and Germany have shackled themselves to in a bid for World power and political relevance. Now the bill is coming due.
Jeffrey Sachs is an idiot.
Our forebears came to America because they no longer wanted to be Europeans. What the hell was our Revolution for? Certainly not for the likes of Mr. Sachs.
It is profound how the government, once made rich by the spoils of capitalism has carved out more entitlements for itself. Having squeezed the golden goose so hard for so long has all but killed it. While the engine of prosperity took a dive governments world-wide have circled the wagons with the beneficiaries of economic largesse and now will not consider tightening their belt as the rest of us have been forced to by the mere fact that when we are out of money we stop spending it.
“I need more money, what do you mean the golden goose wont lay anymore? Does it know who it is messin’ with?” The problem is, government no longer knows who it is messin’ with.
On a side note, is it possible to have a meaningful democracy when the largest voting bloc could be government unions? Who speaks for the rubes when the government is an end to itself?
I asked a well known Spanish blogger last night what would happen and he said it was not inconceivable that the crisis would force Germany and France out of the Euro, leaving it as a currency for the weaker economies. That would have huge political consequences for the EU.
Sachs’s idea that some kind of balancing act can be arranged with a combination of tax increases and “judicious cuts” is concept that may be too little and too late. Public spending under Obama is like a firestorm which stokes itself. It is a self-reinforcing loop and if it can’t be met with tax increases (taxes have been upped by $1.4 trillion) then they will be met by borrowing. A firestorm only stops when it runs out of fuel.
This is probably what is going to happen in Greece, Portugal and Spain. The militants are going to march in the streets “demanding” an end to the economic crisis until it finally dawns on them that there’s nothing left in the warehouse. Zero, zip, nada, goose eggs. And at that point the firestorm will begin to die out just because it’s run out of fuel.
In a way, Sach’s belief in an orderly rearguard action is undermined by the huge pull of entitlements. Social security, medicare, Obamacare, cap n’ trade, “community banks”, bailouts, “investments in education”, etc. Who’s going to give up his pension? Who’s going to give up his job? Who’s going to give up his home? All of these interests have huge lobbies behind them. To dismantle them is to dismantle Washington. To liquidate them is to liquidate business as usual and everyone associated with it. Will these “judicious” increases and cuts ever happen? I have my doubts.
Ultimately there will be a lot of financial losers and a considerable amount of human pain. The time to have trimmed the ship was maybe 15 to 5 years ago. But events accelerated, and the subprime crisis is the poster boy for the assertion that disasters compound themselves.
Paul Krugman doesn’t even think there’s a problem. Deficits? So what about them? What me, worry?
As long as you collect at least one euro or one dollar or one whatever in taxes, if you run a deficit the problem is always excessive spending.
The conventional wisdom among the mandarins a few short months ago was that the Dollar would collapse to the level of the peso. Wrong again.
Macro economics has too many variables to even understand, never mind account for. Keynesian policies failed spectacularly in the 30s but that seems to matter little. The government will always argue that it would have been worse without the spending.
If I had to pick a mega-trend it would be the fractionalization of governments, societies and cultures into smaller, more self contained units. That doesn’t mean that people will not trade globally. They can do that and still attempt to insulate themselves from the profligacy and social problems of others.
If I had to guess Germany and or France will squash the EU into some kind of vassalage with the junior members getting their marching orders from Berlin or Paris.
Let’s see what kind of popular uprising we get here when quality of life becomes road kill in California and they come begging to the Feds for a bail out.
When I lived in Spain (early 90′s) the government’s figures on unempolyment were high, but the real unemployment rate were much higher (sound familiar?). My friends there are incensed at Zapatero and the rest of the socialists, but they are still outvoted. The Euro has always been a joke to me, but for the last few years the joke’s been on us holding $$. I think the curtain is about to be drawn back on the Euro, and shortly on the entire EU.
Unfortunately the unions haven’t quite figured out that they might be commiting hara-kiri as well. An even deeper crisis in southern Europe is not beyond the realm of possibility.
Game theory. You know it’s 99.9% certain you’re dead anyway, so if you have a move with even a 0.2% chance of success, you take it – strike! Or even, you know 100% that you’re dead, but you make a move with 0% chance of success, just so your constituents *think* you’re still relevant, as opposed to, say, actively responsible for the disaster in the first place.
Jeffrey Sachs is another one, a guy who fifteen years ago made some kind of sense, and then went wheeeeee over the cliff.
http://en.wikipedia.org/wiki/Jeffrey_Sachs#Work_on_Post-Communist_Economies
–
wretchard @ 12: the feds are going to hand out mass quantities of cash to local subsidiary governments without strings attached? never in a billion years. Sachs has completely lost his grip on human and bureaucratic natures.
One idea that Sachs has is “subsidiarity” but he plans to carry it out in a terribly flaw, I think, because he wants to let the Feds collect the taxes and parcel out the “share” to state and local.
This practice has had huge constitutional effects in Australia and the states have slowly but surely become subordinated to going cap in hand to Canberra to get their slice of the pie.
“If I had to guess Germany and or France will squash the EU into some kind of vassalage with the junior members getting their marching orders from Berlin or Paris.”
What, just like in 1941 or 1800? Hasn’t Europe really been through enough grief these last few hundred years just to come full circle?
Wretchard — I am seeing under Peter Boston’s post “click to Edit” and of course, not being him I should not see it. Just FYI. Right now I am on Firefox 3.6, Linux.
If you read the FT a couple of days ago, they had (before the last few days crisis) a bit on the green dreams of Europe’s alternative energy. The total investment was something on the order of $3 trillion USD and would require MUCH HIGHER energy costs for rate-payers.
In other words, it was dead on arrival. Just as new taxes are DOA. Who will pay them, in a recession? Any taxes on corporations get passed on to consumers. Any taxes on consumers or that which gets passed on generates fury. In the US especially but the Europeans will find that out if they try and institute it.
It is quite likely that France and Germany will simply kick out Greece. There is considerable anger at being lied to for years, to get in (Greece falsified data systematically). There is no real cost for kicking out Greece (and Portugal) because they are small. There is no sense in bailing out Greece and Portugal if on top of it, Spain requires a bail-out. Not the least of which is the political reaction in Germany and France. Very likely, Spain will be required to do a lot of belt tightening and crush the unions and Marxists if it wants EU aid, otherwise Germany and France can take their ball and go home.
The EU was never sustainable in the first place, and that is now coming to the undeniable truth.
we already have this. it is called federalism: see the 10th amendment.
Ah the end of the old FREE lunch. As Dame Margret Thatcher once said “At some point you run out of other peoples money!” All addicts have to hit bottom before they are willing to take a cure. Will the European and American socialists ever get to a bottom enough to accept the cure of smaller government sectors and reduced/eliminated entitlements for the economies to recover. There will be a lot of chaos and turmoil before it happens.
Just for reference, a study done in 1992 or so showed that the largest that the US govt. could be and not cause an economic drag on the economy was 18% of GDP. We are currently at 27% +/- and growing. All govt. sectors combined account for about 40% of GDP. It has to wind down but it won’t be pretty.
We’ve learned the word debt and banished the words victory and country from the modern vocabular and accounted ourselves clever.
When I was a kid I watched the re-runs of “Victory at Sea” probably two or three times over. And going back to some of the episodes it striking to see what the world looked like back when the words “enemy”, “country” and “God” were unashamedly, that is to say, in their original contexts. The idea that Americans might want to be like Europeans, or that Europeans might like to be Americans was preposterous on the face of a planet where cultures were more self-confident. People fought to be themselves, not to become like others.
Of course there was a lot of Hollywood, or more precisely Broadway in it. The good old days were never as good as they seemed. And the Rogers-Bennett soundtrack helps too; it is stirring and composers switch on the mood without embarassment right to the final superimposed “V” over a peaceful ocean. And the thing was everyone knew what the symbols were about. It was accepted, part of a culture now half forgotten. For those who can’t remember the series, here’s the last episode of what must now be regarded as a prologue to our own time.
I suppose the time has come to write our own story. Let’s hope it’s a good one.
I often wonder if in 100 years that history will look back on Al Gore as a hingepin for the destruction of the world’s economy. With so many people in foreign countries hell bent on establishing the phony green economy at the expense of a real economy. It is a mindset that is deeply imbedded in their psych and I fear will take more than a generation to change.
I read all your comments with sadness for our collective future.
Sach’s subsidarity idea has such a huge, obvious flaw that I can’t believe he even suggested it.
The biggest restraint on local spending is that raising revenue from the locals is always very difficult. People don’t like it, they recognize that it kills their jobs, and they vote out the local people who try to do that to them.
Sachs idea removes all fiscal restraint whatsoever – now you *Have* to spend whatever shows up or else the locality will be in the “use it or lose it” situation that the various pieces of the bureaucracy always find themselves in. The prospect of fiscal restraint is finished; every locality will compete to see who can appear the most “needy” and thus get the most funding. Once spending decisions are removed from any responsibility for raising revenue, why not?
Sachs local decision making really is a good idea; but the revenue raising has to be local too, or else the entire idea falls apart. And this means that a lot of things that people like Sachs would like to see get done (public health care, etc) simply are not going to be done. What would be fair would be to say “well if that’s the local decision, so be it.” But Sachs cannot bring himself to accept that outcome.
Also – about the idea of France and Germany leaving the Euro behind – of course that’s what they *should* do. But THEY more than anyone else are the ones who created it! The modern day Euro is the culmination of a dream and 50 years of effort on their parts – for pride alone they will not *ever* leave it behind! And so I have no doubt that they will pump as much money as it takes into supporting it, even if it breaks them.
As for asking for more political control over the PIIGS states – if either Germany or France still had any armed forces which were capable of punching their way out of a paper bag, this threat might be credible. Unfortunately for them, they don’t.
They are all going to end up going down together, and no one will step in to do a thing to delink them until it is far too late to make any difference.
#6 Annoy Mouse writes:
On a side note, is it possible to have a meaningful democracy when the largest voting bloc could be government unions? Who speaks for the rubes when the government is an end to itself?
That is the crux of it. Government is supposed to the means to an end. We have come full circle. Back in the dark ages “government” was simply a means of efficiently committing theft from people weaker than you were. But even the lords in the Dark Ages knew there were limits as to how much the serfs could produce. Our modern masters are far too stupid to grasp such an elemental concept.
What is happening now is that government and their “customers” are expanding exponentially based upon the erroneous assumption that the hosts of their parasitism cannot and will not die. There are so many serfs (tax payers) that you can never run out of them, no matter how you abuse them. There will always be plenty more where they came from. Always.
Idiots.
“….because he wants to let the Feds collect the taxes and parcel out the “share” to state and local.”
When I worked around DC I found that everybody, but everybody, every 2nd Lt., teacher, contractor, what have you, came up with the same plan: Go to Washington and convince them to tell my bosses, my administrators, my contracting officer, to give me the money I need. It was too hard to go through justifying what you needed and selling your ideas. Much easier to go find a sympathetic ear in DC.
The really bad thing about Pork is that it comes from the bottom up. The Denizens of DC don’t come up with most of this stuff; they are beseeched to fund locally invented Bridges to Nowhere. All Pork is local.
And the extent to which this has been institutionalized is disturbing. Like African countries awaiting foreign aid, the locals sit around and wait to see how much money they are going to get from DC.
When the Florida bullet train meeting was held, the mayor of Orlando summed up this attitude very nicely, saying, “I hope that the government will fund the entire program so that the taxpayers don’t have to pay for it themselves.”
Sachs’ “subsidiarity” is right about the desirability of local cures for local problems but he cannot see past a central government as the source and right of the largess.
I don’t know how or when it will happen but there will come a day when the unified legislature and governor of a few or several states will refuse to participate in the Federal taxation/distribution scheme. This will provoke a Constitutional crisis of uncertain outcome but at a minimum it will almost certainly set the ball of defederalization rolling down the hill.
I am more than a little annoyed that we already have a mandarin class of Federal employees who not only get paid more and live better than almost everybody in the private sector, but are also immune from the bad effects of Federal policy. The primary function of most bureaucracies is to enforce behavior and extract treasure from the population. How much more so when not to do means a reduced lifestyle. I did not sign on to get a bit put in my children’s mouth so they could be ridden around by some bureaucrat.
Toad, with the worker’s paradise of North Korea, how do we tell when it has collapsed? When there’s not even lights at Pyongyong in the satellite view? When the people eat up all the tree bark and grass?
Walt you write some good stuff!
In 1998 currency speculators picked off East Asian countries one by one (the “Asian Flu”) until the Malaysian government tripped a breaker and instituted currency controls. But Portugal, Italy, Greece and Spain (the P.I.G.S.) are in the Eurozone, anchored by France and Germany. Greece represents only 0.6% of the world GDP. So far we’ve seen the dominoes of Iceland, Ireland, and Dubai fall, and now Greece, and next could come Portugal and Spain, but the EU has a GDP of $16 trillion, compared to the US $14 trillion. It’s too big to fail, and the member states benefit by association, just as California benefits from being integrated in the US economy which is likewise too big to fail. So all eyes will shift to the UK, which is not in the Eurozone. There is no Pound Sterling Zone. And lingering out there like a developing storm front is China, with their export-based economy and centralized bureaucracy, flush with money, building unbelievable capacity as they gamble that the world will soon recover and start buying their crap again. It might be ten years or more before we get back to where we were late in 2006, if ever.
“Compared with those in other rich countries, taxes in the U.S. are low.”
I’m not sure this statement attributed to Jeffrey Sachs is correct. At the least it may be slightly disingenuous. Could it be that the highest income earners in the U.S. pay the largest percentage of taxes of any industrialized nation? (Top 5% paid over 60% as of 2007–and who doubts the payout isn’t now higher?)That puts a slightly different slant on things I would say.
“If I had to guess Germany and or France will squash the EU into some kind of vassalage with the junior members getting their marching orders from Berlin or Paris.”
I said something similar in an earlier thread. I just laid out the pecking order within the former states within the EU. Things have moved far faster than I expected. I did not expect Greece, Spain, and Portugal to all go Tango Uniform at the same time. I rather thought that it would be in that order with prolonged agony between each.
The EU is going to have to deal with an impasse. It can’t subsidize any one of the 3 collapsing economies, let alone all three without impacting the core group the EU is designed to benefit. Germany, France, and Belgium cannot allow the loss of control over the others by letting Greece, Spain, and Portugal go their own ways either voluntarily or by kicking them out, because it would give otherwise unthinkable options to the second and third tier states. And I do not think that what Whiskey posits as the reaction in the case of Spain:
Very likely, Spain will be required to do a lot of belt tightening and crush the unions and Marxists if it wants EU aid, otherwise Germany and France can take their ball and go home.
is feasible. Both because as in the case of Greece, the chances of the local elites telling them various uncouth things in order to stay in power, and because even the most “conservative” government in Europe is essentially socialist, Marxist, and under the control of the labor unions. There is no way in the name of whichever circle of Dante’s Inferno that the EU government belongs that they will be able to order what would be a purge against their own people and get away with it.
Bring popcorn, this is going to be one bugger of a show. The only question is, is it going to be the 1804, the 1914, or the 1939 edition. Or will it be a mix, with perhaps a touch of Suvorov in 1794 and a soupçon of Vienna 1683.
Subotai Bahadur
It is sad when you look out on the world and see leader ship driven by fanaticism, tribal considerations and family before all else. They desire to acquire position and wealth in their tribes by stealing from others. The mistreatment of their women…..and that’s just Washington D.C.
http://www.youtube.com/watch?v=uVmU3iANbgk&feature=fvw
The only question is, is it going to be the 1804, the 1914, or the 1939 edition.
What about 1848?
Wretchard…Victory at Sea and Air Power were my Saturday afternoon TV passions. VaS certainly celebrated the patriotism and “true grit” of the Amercian sailors and Marines in the Pacific. When the Marines march by my parade perch in Kailua on the Fourth of July and the band plays the “Hymm”, its hard not to feel proud to be an American. Then the “pol’s drive by sitting in the back of a classic convertable and all I feel is disgust at the way they are throwing away the victories that were bought with the blood of brave men. We need heros like never before to lead us off of Red Beach and get to the protected high ground. …_ …_
Well this thread could certainly do with a snappy little theme song.
http://www.youtube.com/watch?v=DYL7N9i3vTk
Newfoundlanders.
Wretchard — 1) What is a tocquen?; 2) Why do I have 26,000 of them?; and 3) How many do I need before I can cash them in for a Buddy Larsen T-shirt?
Wretchard — 1) What is a tocquen?; 2) Why do I have 26,000 of them?; and 3) How many do I need before I can cash them in for a Buddy Larsen T-shirt?
You have 26,000 of them because you are a high reputation person in the system, as calculated from your comments and the clips that other people have bestowed on you. As to the Buddy Larsen t-shirt, all in due time. All in due time.
Subsidiarity! A word that exists only because the true EUnuch can not bring himself to say – Federalism. Federalism has such Un-European transatlantic overtones. And so the would-be EUnuchs in the US now prefer the European word – so much more apposite, so much more telling, so much more civilized.
Still, we have to look at the roots of our current difficulties. The rot started all the way back in 1913, before the Europeans had demonstrated once again their amazing capacity to kill each other and drag the rest of the world into their petty squabbles. Well meaning people in the US approved the Sixteenth Amendment – the root of evil.
The XVIth gave the Federal Government the ability to tax each citizen. Instead, the Federal Government should have been given the authority to negotiate with the States for a subvention. The now 50 states could have arranged to meet every few years and decide how much of their tax revenues they would give to the Federal Government.
This is one of the messages I would like to see passed across the coming divide to the other side of the storm. Each level of government should be allowed to take contributions only from the level below it. And those contributions should be voluntarily agreed by the level providing them — setting up a real customer-supplier relationship.
Of course, community activists would be a lot less interested in becoming federal employees under this improved system. That is a design feature!
Wretchard, thanks for the Victory At Sea video link.
I have 6 min to edit #33 which i wont. It was a well reasoned comment,as are so many here. Thankyou all.
I wonder if anyone saved the video (from six months back) of President Obama holding up Spain as a model for the US to emulate. Spain became the world’s first eco-con economy by creating socialist green jobs while destroying real jobs. Of course Spain’s unemployment rate was only 18 percent at the time Obama praised its performance.
The Obama administration could teach Europe about lowering unemployment. You simply vanish a big chunk of the work force. Zombies! Everyone feels better knowing unemployment is on its way down even if they are surrounded by — Zombies!
I loved Victory at Sea as I I did the soundtrack and the narration, which I used to do a bit ” August 1942, Rangoon…blah blah, blah”
But I always found the sea in the introduction both powerful and foreboding. It is mother natures as her most persistent and terrifying best.
Wretchard, thanks for the Victory At Sea video link.
The 26 episode series is interesting from a narrative point of view because it is almost written as musical theater. The VAS narration is sparse and isn’t expository; there is little description of tactics, geography or geopolitical concepts. It is the libretto. Very often they use footage from other sources (training films, travelogues to eke out the combat footage). The narration is used for emotional effect and the video sequences are choreographies. The Rogers/Bennett score plays a central role. For example, watch the Marianas Turkey Shoot episode.
It is enormously powerful in emotional impact with Rogers/Bennett writing a score as effective as any John Williams effort. And although we never get a sense of the Central Pacific/South Pacific strategic dichotomy there is an indelible sense of good versus evil in VAS. It really is Star Wars set in the 1940s: evil empires, forlorn peoples, dashing heroes, and as you probably saw in the last episode, a finale worthy of the best space operas.
I don’t know that anyone could produce something like VAS today. The only reason they could get away with it then, I think, was that the truth of its assertions were almost universally accepted by a generation who fundamentally agreed. It was the civilizational narrative, and as such required no elaboration. VAS was already written in the collective memory. Richard Rogers and Bennett simply set it to music.
Ha -Walt, ya dog ya, you’re promoting another limerick joust –well not me, pilgrim, I won’t be provoked…aw shucks too late
While reading this blog owned by wretchard
at thirty-one my name my eye catchered
a comment by Erickson
who often writes lyrics on
this blog that’s so fetching we’re fetchered
Taken in vain 39
My name shown on very 3rd line
Amazement flared 4th
It was Buddy of courth
So I fetchered back one more of mine
They wanted an alternative to the falling dollar. How they have one. The falling euro!
Wretchard — For the past several days it has occasionally happened that when I hit SUBMIT to post a comment a yellow background very lengthy page appeared with the heading Transaction Management Error, followed by headings such as Traceback, Request Information, Get, Post, Cookies, etc, followed by a long list of inner WordPress? and/or Tocque Dashboard stuff. I don’t know if anyone else is getting this, but I thought you should know since it seems to be a recurring event.
Walt
Walt, that’s a debug screen. If it happens again, copy it and email it to me.
to think, the actors in the Victory at Sea production had no idea how it would end –or how they would end. You were 19 and just found yourself out there, to play a part in a scriptless epic you could never imagine or even hallucinate –sailing on the surface of the blue Pacific, duelling to the death against the Bushido sailors and airmen of the Empire of Japan –with whom you have –exceedingly strangely –far more in common than you now do with the folks back home. They you know are dreaming of you with them together again in a better tomorrow –while every moment on your shoulders rests the heavy hope that there will simply BE one.
***
walt, seeing your effort at 40,
i thought to myself lordy lordy
if i can top THAT
i’ll eat my hat
or cut off my legs and be “Shorty”
I am gobsmacked.
a) after reading about the PIGS here, I see it poping on my news radar in the MSM. I don’t come here for breaking news but indepth analysis, and yet…
b) you-all consider the unthinkable… Germany and France bailing on the EU??? we have entered an age where “what’s next?” is the key question and you-all flesh out the possiblities.
I am in awe.
thankyou.
The subsidiarity comment caught my eye. The term “subsidiarity” comes straight out of Catholic social teaching, specifically 1891′s Rerum Novarum. This encyclical marks the beginning of the Church’s fight against socialism, Marxism, class warfare, and the humanist progressives.
The view of subsidiarity articulated by Rerum Novarum looks nothing like you relate from Sachs, Wretchard, when you relay this quote: “The increased taxes would be collected by the Federal Government and then transferred to state governments, which would design and implement the public programs together with local governments.”
Higher federal taxes (10% higher urged by Sachs) to fund a redistributive schema that’s designed and implemented by a central authority *working together* with local governments? That’s not subsidiarity, and it’s a neat trick they pull trying to get away with calling it that. I suppose they think the nominal inclusion of the locals gives them cover to claim otherwise, but this is central planning in sheep’s clothing.
Or, at least it is in its worst form. At its best it is probably not much better. Giving local pinheads a big checkbook has been proven to lead to such things as indoor rain forests for Des Moines, and such utter nonsense. The lion’s share of what’s possible even to attempt by the modern suburban mind can probably be expressed in terms of a higher status shopping and restaurant area, or real nice outlet mini-malls, or crazy greeny pipe dreams like indoor rain forests or 300+ species cactus arboretums.
So, at its worst, the Sachian idea of subsidiarity destroys the original meaning of the word. In the worst case it subverts, serving as a back door for central planning. In the best case it smoothers the power of subsidiarity through inefficiency and misapplication.
Subsidiarity, in order to work, means something more radical than your usual community activism. It means YOU negotiate your wage for hire, YOU see the need to help the family who’s fallen on hard times down the street, YOU take time to volunteer at the soup kitchen, etc. To quote Rerum Novarum: “We have seen that this great labor question cannot be solved save by assuming as a principle that private ownership must be held sacred and inviolable. The law, therefore, should favor ownership, and its policy should be to induce as many as possible of the people to become owners.”
Locals gotta take ownership of the situation, not punt it up to Washington and stand there waiting to be consulted when it trickles back down. That’s madness, not subsidiarity.
Walt,
Tocquen, J.R.R., author of some obscure fantasies, which when translated to cinematic form affected a substantial transfer of wealth from the USA to New Zealand, still in progress.
Did you ever have one of those spasms of compulsive behavior?
Know any 12-step programs?
Wretchard
Will do.
—-
Buddy
I hope a confectioner’s your hatter
‘Cause you’ve won one more round of this patter
Eat your brimming chapeau
Sitting down or to go
For your last one has settled the matter
I know now it’s second I stand
And so I extend my right hand
To the winner I hail
You take both ears and tail
It’s another wipeout blood and sand
—-
Mad Fiddler
I took a 12 step program from Arthur Murray once, if that’s of any help.
yes, Arthur Murray taught him a new step and called it a “walt’s”.
***
(that towel Walt threw is just horsin’
his actual objective is forcin’
you readers to spin it
that if he didn’t win it
he DID prove he’s nicer than Larsen)
***
v/45; mighty nice of you to say!
Sachs’ idea of “subsidiarity” is not just a trendy infusion of a Brussels term into America, It is a retread of a bad idea that came out of the Nixon administration, Revenue Sharing. The federal government sent a portion of the states own money back to them to fund local pork, as chosen by the local politicians who supposedly had their collective ears to the ground about local needs. That is a hard position to maintain while also having your snout in the trough. The whole corrupt project took an axe to the Constitution.
Under the Articles of Confederation the taxes were all collected by the States and then forwarded to the National Government for Congress to disburse. That did not work so it was agreed that under the Constitution Congress could set up its own collection service. Remember that before the income tax the way that the government made money was largely from the collection of tariffs on imported goods. That was probably the most significant power that Congress took away from the States. The Customs Service was established under the second law passed by the new United States Congress.
The States gave up something important but kept a close eye on the new central government, partly through the Electoral College and the Senate. The idea that power would shift so dramatically that from having a weak central government that had to beg the States for money we would go to a system where the States were so weak that they would be reduced to mere vessels begging to be filled with Federal dollars may have occurred only in the Founders worst nightmares.
Subsidiarity is not Federalism because it reverses the flow of authority and instead of allocating limited but sufficient powers to the center and keeping the bulk of power close to the Sovereign people it delegates to the lower level those functions, but not necessarily the authority, not needed by the central government. Federalism is a limited centralizing of power to correct an ineffective system called Confederation. Subsidiarity is a limited diffusion of functions by the central authority within a system that is at heart still Fascism.
It is possible for the Germans to pull out of the Euro when they come to the full realization of what they are supporting. Just several years ago 1/3 of the people wanted to return to the D-Mark. How long before the tipping point is reached?
As for Greece, I really don’t see a good solution unfolding. A lot more pain is in store for us. Everyone is fighting for the remaining scraps. The farmers have shut down the roads for the past 3 weeks – paralyzing an already fragile economy – a yearly winter rite of passage. The tax collectors even went on strike for 2 days this week to protest a planned cut in their salaries – the highest paid of all beaurocrats.
No government coalition of left, right or center can push through the necessary belt tightening changes required to pull us through.
On top of this, we have the communists, anachists and militant trade unionists stoking up anti goverment anti capitalist passions.
We are in for an interesting time.
http://www.dw-world.de/dw/article/0,,3306902,00.html
On the Subsidiarity theme, I would like like to point out that this is exactly what State’s rights and the constitution are about. Starting with Lincoln various federal power grabs have devastated State’s rights. The latest series of blows have been the wholesale victory of interstate banking (due par tly to Gramm-Leachman) over the small state banks. All the latest FDIC closures are increasing this trend.
I would also like to hold up Switzerland as an example of a confederation where this subsidiarity is still largely intact. Tax-wise, this means that each community, canton and the federal government having it’s own income tax rate that is calculated into your single final tax bill. There is no federal “sharing of the loot” with the canton and communities, they each take a slice whose size is determined by their voters. Also, the communities and cantons compete heavily on tax rates. In Wollerau in Canton Schwyz the entire income tax reaches a maximum marginal rate of around 20%, where as in highly socialist Canton Jura the top marginal tax rate would approach 45%.
The Cantons have maintained a far higher degree of autonomy than in the US, with numerous conflicting and often inefficient Cantonal rules concerning health insurance, education, licensing, etc. etc.
According to Sachs, subsidiarity holds that “problems should be solved at the lowest government level feasible”. “Feasable” is the penumbra, but “Feasable” doesn’t in any way imply lowest cost. “Feasable” would mean that all government organizations should be as small and granular as they can possibly be.
As far as bailing out the PIIGS goes, I think it is also important to realize that West Germany has been paying the Solidarity Tax of 5.5% or more for 20 years (since reunification) and they are sick and tired of carrying socialist mooches on their backs:
Paying for German Reunification
Court Rules ‘Solidarity’ Tax Is Unconstitutional
“The finance court for the northern state of Lower Saxony ruled that a legal complaint by a taxpayer against the surcharge, which is calculated at 5.5 percent of an individual or company’s income tax bill and which is paid on top of income tax, should now be considered by Germany’s highest court, the Federal Constitutional Court.”
Germany isn’t going to bail them out, and contrary to Subotai’s contention, their testosterone levels long ago fell below levels required to wage wars of conquest.
Greece will default first, and the rest of the PIIGS will follow. During this collapse, several US states will also default.
The real question is how are they going to resolve/unwind all these Euro denominated financial instruments. One hint of this issue is Euro’s flowing from southern European banks to the northern ones.
I remember once being told that the Euro notes are marked with the country that printed them. I find it hard to believe that there could be discrimination between Euro notes, but then again I have also read that US 100 dollar bills printed before 2003 are also often not accepted.
Europe, of course, not China or the U.S. (or Latin America/Africa), still represents 80% of Russia’s exports and imports. This is bad news for the Motherland as well, though it might in the short term lead to real estate plunging in Greece and Spain to the point that Russians who still have savings would buy several condos there for the price of one tiny apartment in downtown Moscow or Sochi.
my guess is IMF bailout, with the debt going into ‘financial repression’ –a ‘lockbox’ with a hyper low rate –whatever will allow a ledger entry and thus disqualify the definition of default –for a term period –years –where inflation will do the partial default at the lowest cost possible, and stealthily –so that the defauly precedent will not be formally set.
Xyl/52; that sounds like a civil war is about to be inevitable –where is the leadership –?
“Jeffrey Sachs says why downsize it at all? The answer to the deficit is simple: raise taxes.” Ah yes Jeffrey Sachs, who could forget his advice to the Yeltsin government in the early Nineties? Would he like to see the U.S.A. in the 2010s follow the path of Russia in the 1990s?
http://www.pbs.org/wgbh/commandingheights/shared/minitext/ufd_shocktherapy.html
Mr. X @ Feb 6, 2010 – 4:46 am:
Nyquist says that Russia is going to use the current crisis to push the US out of Europe and make Germany a satellite: Russia’s Conquest of Europe. I think we well see Germany’s and Scandinavia’s will be tested in the Baltics. I would expect a mini-crisis to flare up there in the near future as things melt down in the PIIGS sty. I am sure Putin is using what remaining time he has to get his ducks in a row. Germany’s Munich moment is approaching, and they will sell out the Baltics. I don’t think Germany will risk WWIV in order to prevent Russia from reconnecting Kaliningrad and the strong Russian minorities accross the Baltics to the mainland. I remember reading somewhere that Latvia had all of 3 tanks, and I really don’t think Germany, Finland or Sweden are going to spill their soldiers blood for these tiny countries and their virtually non-existant militaries. Obama’s strategists must see this coming as well..
of course, as with our own Democrats it’s hard to say what’s organic and what’s not, but the anti-Putin parties have been rallying in Kaliningrad. not just the residents, but from across Russia, the recent rally was reported a few days ago as 10,000. Dunno what it means.
If the petulant paleo-cons hadn’t walked away from John McCain then we would have an energy policy right now focused on crashing the price of oil so low that Putin would be no threat to Europe.
“I have also read that US 100 dollar bills printed before 2003 are also often not accepted.”
Outside of the US, people can do what they want. Inside the US and its territories they remain legal tender and it’s illegal to refuse to take them.
I’ve been thinking more about the PIIGS situation, and I think most posters forget that for 50 years now, Germany and France always fold when the issue is international. They’re going to fold again, and that means they will work out a way to bail out all of the PIIGS states and keep the EU together but they’ll do it in a financially complicated way that makes it appear that they aren’t soaking their own people. It will be a promise of more bonds, maybe government to government bonds, who knows. Oh of course these will eventually default, but the hope will be that the current crowd can retire and get nice pensions before the hoi polloi figure out what’s really happened.
The Europeans don’t have the nerve to make any truly hard decisions anymore, and watch – they’re about to display that same lack of nerve again.
I supported McCain as well, but it is folly to think that McCain could have gotten any energy legislation through Pelosi’s house or Reid’s Senate. I don’t even think Obama can do that, and I think the new energy bill they’re kicking around (G-L-K, Graham, Liebermann Kerry) is going to die the way that cap and trade has already died.
Oil prices are indeed dropping again, and that’s because prices move with the world economy. When the world goes into depression mode, oil becomes worthless.
One other news item today – there is *One* country in the world taking its energy future *very* seriously and working to guarantee it’s future security right now – and they also do not give a flip about global warming or political correctness.
Sigh; we only wish that our government could look out for our future the way they’re looking to ensure theirs:
http://news.bbc.co.uk/2/hi/asia-pacific/8501777.stm
“Australia signs huge China coal deal.”
“An Australian firm has signed a $60bn (AUS$69bn; £38bn) deal to supply coal to Chinese power stations.
Clive Palmer, chairman of the company, Resourcehouse, said it was Australia’s “biggest ever export contract”.”
ConfederateH, your analogies to Swiss governance are compelling. What is additionally interesting is how Switzerland handles immigration, which is very much driven by self-interest and less by bring me your poor huddled masses. My understanding is that one has to be voted in by other voters in the canton in order to obtain citizenship; it is very difficult and there are Swiss resident immigrants who have been there for over 20 years who have not achieved citizenship status. It would seem that a conservative platform driven by not only a focus on the US Constitution, but am emphasis on States Rights would be an appealing political approach going forward. Rudy toyed with it during ’08, but only on the abortion issue.
As far as what we are seeing with Europe, China/US, and the ugliness that the Toyota situation could become once the Trial Layers light onto them, the potential for trade wars to start popping up just seems to be growing daily; this is a similarity to the 30′s that is very worrisome.
Buddy/Walt, good show.
I would note that the Euro zone intersects with the European Union but is not the same. European citizens (as well as goods and services) have significant rights to cross internal borders with little control. England is in the European Union but not in the Euro zone and has in the recent past complained of the Polish plumber problem. Workers accustomed to lower wages come to England and undercut local workers, who then go on the dole. What would happen if PIIGS citizens start to move in large quantities to Germany/France/England? I would suggest great civil unrest would follow and increase pressure on the affected governments to address the problem. This probably will not end well.
And what about NATO? The US has binding commitments to come to the defense of other NATO members. There has never been a case where NATO members went to war with each other, although Cyprus did come close to causing major hostilities between Greece and Turkey. But if things do go badly, the US will face fierce pressure to become involved.
This is an extremely interesting thread. I am in transit so cannot interject much. I would like, however, to throw a link into this thread. It is somewhat oblique to the discussion, but I think it not really OT.
http://unqualified-reservations.blogspot.com/2010/02/from-mises-to-carlyle-my-sick-journey.html
Read down a bit. There is an interesting section on the notion of “national utility” and a musing on the flaws inherent in such a view of a nation should a political group or class try to align that “utility” toward their own goals. It is more a moral and ethical argument that they make here than a political one, but it is worth going through.
I fear that all of us err here in the notion of mobilizing some sort of “national utility” toward various ends. It may be something we need come to grips with is liberty is to prevail.
While it is an element in all societies, the tension between the notion (mythos?) of the individual and the noble acts of the collective is singularly pronounced in our history, traditions and culture. Perhaps all do not look at this as clearly as they should.
All of this, of course, abuts the nature of subsidiary that is being worked over here.
You might have a look at it.
el Kabong,
hmm, seems you would like that we were failing, and still to need the Anglo-Saxon influence to protect our businesses, but this model is actually in the cabbages, Germany and France, with their tradition of social democracy (or colbertism for us) are going to be the rempart against speculations on our continent economy
wws,
http://news.google.de/news/search?aq=f&um=1&cf=all&ned=fr&hl=fr&q=France+Germany+80+measures
France and Germany are going to be more proxy in their determination to fight the “crisis”
also, [L'Allemagne souhaite une armée européenne contrôlée par le Parlement http://bit.ly/aVWrHp "enfin on est sur la même longueur d'ondes"]
then the dream of the French, during Chirac era, to initiate an EU army is coming on actuality, the Germans are promoting the idea now !
And already quite a few regiments share the same trainings
Wretchard,
some say that the EU commission uses Greece crisis as a role model for the other european countries in order that they rise up the legal age to geo into retirment, and to cut down their state expenses of fonctionment
FMI (IMF) might bail out Greece
steeple @ Feb 6, 2010 – 8:17 am:
When you get citizenship in Switzerland, you have to be accepted into the community where you will live, known as your Heimatort (home town). Each Canton and community can have it’s own requirements for granting citizenship, but I believe there is a federal standard as well. Your Heimatort is on all your official papers, and in the event that you are destitute traditionally the Heimatort was responsible for feeding and clothing you. This still holds true in the smaller rural communities, but not so much in the cities. Also, when you move from one town to another in Switzerland, you have to register in the town you move to and out of the town you move out of. There is also a law that allows towns to banish troublemakers (mostly Albanians).
Certain Swiss Cantons also grant a “Paushalabkommen” tax agreement with rich people who wish to immigrate to these Cantons. These agreements stipulate a flat fixed income tax fee that has to be paid yearly. I believe there are a couple of Cantons that will do this for $200K a year. If someone makes this deal, they never have to declare income again, they merely have to pay their flat fee. Many rich Europeans take up this deal, Schumacher and Boris Becker being 2 that come to mind. This is one way that cantons and communities compete with each other to attract wealth. If a small community like Appenzell (10,000 inhabitants I believe) where Schumacher moved can grant Pauschalabkommen with 10 rock stars, then they can reduce everyone else’s income taxes by a significant factor. If they can get 10 hedge funds to move there (like Zug or Wollerau) then the citizens end up with income taxes 50% as high as people living in a different town and canton across the street .
52. Xylourgos
not anymore, also who would bail out marks today ? since the euro money allowed Germany to become the first, then the second world exporter (after China)
besides from your link, today,
Deutsche Bank reveals UK bonus tax, posts profits http://bit.ly/aDyfvR
“In 2010, the bank aims to boost its presence in key emerging economies in Asia, Central and Eastern Europe, as well as the Middle East.“
Teresita #23,
Pourquoi ce doit être une femme qui emet le jugement le plus rationel ici ? LMAO
eh, les gars, forget a bit of your armour, it ain’t a war with led soldiers !
The planes in Spain fall mainly in the rain.
The airplane analogy is pretty apt. Most people don’t really understand the details of aerodynamic flight. But they can intuit a certain amount from experience – the plane has to move fast enough, the wings need to stay on, “something” happens with the air holdng the plane up by the wings.
But the details remain a mystery. Bernoulli? Are those the little tube shaped pastas? Same thing with the economy. A few people, like aerospace engineers, get it, understand, but way too many people are willing to believe the busted notions of socialism. Socialism is like a plane maker that has a defective design, but they keep getting away with blaming all the crashes on pilot error.
Odd how Progressive Airlines can’t seem to ever hire competent pilots. Must be because they’re not paying them enough.
JMH,
Progressive Airlines can’t seem to ever hire competent pilots
But Progressive Insurance, which like Occidental Petroleum is a for profit arm of the 3rd International in America, did hire the best spokesmodel.
Germany isn’t going to bail them out, and contrary to Subotai’s contention, their testosterone levels long ago fell below levels required to wage wars of conquest.
To put a finer point on it, I was thinking more of EU [read French and German controlled] internal wars; not of conquest, but rather of dominance if they are to survive as the sovereign state they have set themselves up to be. I have posited before the different tiers of influence within the EU, with the core group of Germany, France, and Belgium being both dominant and the prime beneficiaries of the Union. There is a critical difference in attitude here. Greece,Spain, or Portugal; as part of the EU, would be regarded by the EU Nomenklatura as being in what our Constitution would call “a state of insurrection” if they refuse to abide by EU directives. To the EU core, the sending of forces into them would be equivalent to Eisenhower sending the 101st Airborne to Little Rock to suppress local defiance of Federal authority. They would depend in large part on the “awe and majesty” of the EU to cow the natives.
THAT they would do, as it is in keeping with European tradition. Something about armored knights running down rebellious serfs.
Now at #58 ConfederateH says I don’t think Germany will risk WWIV in order to prevent Russia from reconnecting Kaliningrad and the strong Russian minorities accross the Baltics to the mainland. and at #61 wws says I’ve been thinking more about the PIIGS situation, and I think most posters forget that for 50 years now, Germany and France always fold when the issue is international.. There is truth to that. EU policy sees Russia as a friendly and benevolent neighbor, and finds ways to excuse any hostile conduct as being the fault of the victims. Something about a river in Egypt 8). However eventually Russia is going to impinge directly on the EU [although I think that the Ukraine is next in the crosshairs]. The Baltic Republics are full members of the EU. What would the EU do if the Russians demanded the corridor to Kaliningrad and special status for Russian ethnics? Probably about the same thing that Europe did in reference to the Sudetenland. The process would be repeated pro re nata.
Now there are some interesting problems with any EU military action for either the enforcement of EU directives, or otherwise. EU forces lack logistical support and the ability to move forces and equipment. There is a reason that they wanted us in Bosnia. We are the supply lines.
Looking at maps, Greece is hard to enter against the will of the locals except for amphibiously or air assault; for which the EU has a very limited capability. While there is a long border between France and the Iberian Peninsula, there are the Pyranees which is full of choke points. It would be interesting.
There are further matters, as in what forces would be available? Even if they could move them, the former nation-states of the EU are not exactly nations-in-arms. One wonders what response European Union President Herman Van Rompuy would get if he imitated Lincoln’s call of April 15, 1861? Britain is in the midst of a “Defense Review”; and it looks like Labour is considering a)withdrawing and disestablishing the Army of the Rhine, b) mothballing all of Britain’s tanks except for a couple of dozen for training purposes, c) cancelling the long promised replacement aircraft carriers [I expected that as Labour hates the idea of projection of power] and reducing the navy numerically below that of Belgium, and d)shutting down a goodly chunk of the RAF. Abolishing the Royal Marines is also on the table. The Tories, who epitomise “me too” are not likely to reverse any of these if they win in a few months.
As I said, bring popcorn.
If the former NATO troops become an EU army, they have a long way to go to stand on their own. They have depended on the US for a lot of their airlift and support for any but purely administrative movement. While it is not yet our government’s policy; there is a train of thought that NATO ceased to exist with the advent of the EU in January, because the member states yielded their sovereignty. Indeed, any attempt by the EU to enforce its directives against Greece, Spain, and Portugal makes a forceful argument that those states are no longer sovereign. Eventually, a point will be reached where they cannot have it both ways. The EU will, sooner or later, have to be solely responsible for its own defense. May it be sooner, and may we be able to choose to intervene or not based on our own interests. Having defense obligations to those who have multiple other sets of obligations that are frequently counter to our own interests is a perfect set up to get drawn into a repeat of August 1914.
It was mentioned by several that the crisis may be abated by having the IMF bail out Greece [and presumably Spain and Portugal following behind with a growing line created in Eastern Europe]. Where is the IMF supposed to get the funds? Yep, the US taxpayer. While I have no doubt that Buraq Hussein would love to give the EU an open tap into the Treasury; he has spent us into bankruptcy.
Yep, popcorn. Lots of butter on mine, please.
Subotai Bahadur
There is too much invested in the EU by its native overlords to let the Euro split or fail. If Greece must be cast out, so shall it be cast out–if anything as an example to the others. Most likely though it wlll not come to that.
As an agenda, the Euro was always intended as a tax on northern Europe–in particular Germany. The French just hoped to duck it by soaking the UK, Germany the low countries and Scandinavia. Matters got out of hand for the French, as they so often do, and now they are caught in their own trap.
Events moved beyond the timings and cogitations of the EU’s original (i.e., French) architects–it just took too long; the world changed under their feet. The EU has been called a 1970′s solution to a 1950′s problem, and so it is. A parody of Westphalia, a burlesque of Osnabrück and Münster, always was it destined to fail, but not right now. Now is not the time. It will hang on for another 10 to 20 years, and then go the way all of the other “Grand Alliances” and “Great Congresses” of Europe’s history. Such graind designs are notoriously difficult to achieve, and in any case rather unlikely to be met by the spoiled brats of 1968.
Buddy and wws have it right. They will set up something, probably through institutions like the IMF, probably with some half-backed Russian chess moves, and tax and inflate their way out. The US taxpayer too in likely to feel the effects of their tender mercies. The Russians will in the end get bilked as well.
One hopes that a reconquest of E. Europe can be avoided, and yes a Munich moment may be coming, but it is by no means a sure thing for Putin. Things are hardly solid in Russia these days. He could well bite off more than he can chew. I do not see a new Iron Curtain falling or tanks rolling West. Of course, the current mob in the WH and on the Hill are as discouraging to us as they are encouraging to him, but certainly the Soviets never gambled so much on the churning unpredictability of American electoral politics. They resisted conflating verities with comedy almost all of the time. Perhaps so too will cooler heads will yet prevail in today’s Kremlin.
In any event, one suspects that, should that moment come, it will come in the Balkans rather than the Baltic. Keep an eye on the Ukraine and the Crimea.
As for the EU in such a crisis, what matters is the locus of national political power and narrative, particularly in Germany. The broad reputation of Brussels is long tattered among the real population, one just does not hear of it much here in the USA; cowardice here will utterly destroy its reputation in Europe itself and abroad. It is one thing to compromise Berlin and the East when sitting in Paris or Brussels, it is another thing altogether to do so sitting in chambers in Berlin. Just how cowed are the German people? That is a real question. They may yet surprise American conservatives.
Much depends on confusion in the short term and the USA righting itself in the mid-term. Perhaps yet we will come to see that Obama is an anomaly in America history.
It all does raise, however, that question about Obama, one we have not asked lately hereabouts: Who sent him?
Sub: Yes, the EU is weak, but the Russian military/political machine is pretty weak too, they will not be able to sustain operations.
It is not 1946. They will not be able to control the “re-annexed” peoples. There has been way to much water under that bridge.
Putin would be better served by obtaining as much of an energy monopoly in the EU as he can. No doubt this is what he will do. The Baltic offers little for all the risk involved.
Russian revanchism will not long survive Putin and his clique. It was pretty much a propaganda and policy knout to push around a dazed and disillusioned electorate. It has not the resonance there that we imagine it does. The Russian people do not really have it in them to sustain such a thing once Putin and crew leave the stage. This may happen sooner than one thinks. The Russians as a people are rather less foolish and more cautious than this.
Subotai,
I “love” your “analyse”, that shows more of your own pathetic attempt to reposition your former administration as a leader of how should be treated the countries that contest Russia’s sphere of influence, BUT, you volontary ignore their geopolitical place, which were never under western Europe’s, sorry, but this time is over !
Now, we aren’t sucking Russians’ a**es, like you would like we were, we are just minding of our own businesses
again, sorry, I couldn’t read you further more, since you keep a rotten toooth against us
But, I’m not worried, facts aren’t giving you reason, they remains stubbornly REAL in a REAL world
Since this thread is almost over, I am taking the liberty of pasting this from Harvey Organs:
Enron Krugman is an idiot…as is Jeffrey Sachs.
la mère l’oie (in the occurence)
“The French just hoped to duck it by soaking the UK, Germany the low countries and Scandinavia. Matters got out of hand for the French, as they so often do, and now they are caught in their own trap.”
what you forgot to mention is that De Gaulle was against this EU expension
and spre me your so implied contempt, it’s out of order cuz
Creating a Postwar World: In “Yalta: The Price of Peace,” S.M. Plokhy sheds fresh light on the summit conferen…
from the wall street journal (opinion), Polish say that your president Roosevelt sold them out to Stalin in order to get the hands free to finish the Japan war, february the 4th
Mongoose @ Feb 6, 2010 – 12:44 pm:
I think you are missing the main lessons of Georgia and Chechnya. Unlike the US, Russia will send in its army and allow them to rape, pillage and loot. They don’t even have to pay a salary. These troops will go into the Baltics and you will see a long line of military trucks and stolen european cars (including BMW 7 series and Mercedes S classes) carrying loot and women back into the bosom of Russia. This will be the lesson for the rest of Europe and Ukraine. Ukraine would be a far bigger bite to chew off, and would also constitute a bigger risk. Far better to show the Ukrainians how they could benefit from the sacking of western Europe.
I think the socialists have pampered, fattened and brainwashed the northern Europeans to such a degree that it is really going to take a broken nose before they react. I am talking about WWII level of defeats and complete social break down before the labor unions give up their selfish demands and the youth are ready to die for the fatherland. All that is really required is someone with sufficient ruthlessness and brutality (Putin) to go really go for it. IMO the entire chessboard of Europe is eerily similar to 1935 with the western countries hamstrung and unable to react.
oh, and I forgot to add France and Germany’s GDP products represent half of what the whole 27 EU can do altogether
Confederate
No, I am not missing the point. You let your imagination run away with yourselve. I hardly see how Russia can get away with raping and pillaging across Eastern Europe. Chechnya and Georgia cost them much and netted them little, and these are but tiny and, to the EU and the West, mostly inconsequential places. Pushing out across the broad plane of E. Europe is another thing altogether. They cannot sustain it physically, morally or politically. It would be a disaster for them.
The notion of the Russians raping their way across the former Warsaw Pact may tug at your imagination, but it will not happen. You seem ignorant of Russia today, not to mention modern military operations of large scale (and the political operations that such a reconquest would entail). The Kremlin will not turn regular, modern military forces loose in the EU with the brief to support their operations off of the “re-annexed” countries, and in any case, such pillaging could not sustain operations in the first place.
You make a preposterous assertion. I stand by mine.
“They cannot sustain it physically, morally or politically. It would be a disaster for them.”
we have seen your administration at work in august 2008 : “Parole, paroles paroles… e encore paroles”
http://www.youtube.com/watch?v=_W_QvI4_x0U
uh Russians rapings, er hmm, not , as far I read, mostly from incontrolled chechenia fighters and bandits who took profit of the occasion, oh, sure Russians didn’t mind, cuz they were doing that to their enemy
I’m sure that Putin as a moral representation of the great Russia (ie the orthodox Church’s one)wouldn’t have accepted that his troops commited such an anarchic and no medias good behaviour !
Mongoose @ Feb 6, 2010 – 2:09 pm:
I plead guilty to lack of knowledge of Russia today. My impression is that it’s people are proud, macho, have lead much tougher lives than the socialist west, that they would rally behind a winner, and that they they have an innate hatred of the “capitalist west” that has done them so much harm all the way through from ’21 through Yeltsin.
I am not talking about Russia invading Poland or even Ukraine. I am talking about something similar to Georgia where the military, somehow under the guise of “protecting our Russian brothers” in the Baltics, who have all been given Russian passports by the way, simply walks in and then shuts down all external communications. We have already seen what happens afterwards, and the reinforced message will be clear to all the former satellite states.
They wouldn’t even have to invade all 3 Baltic countries. Sufficiently brutalizing just one could well accomplish the short term goals, leaving the rest for later. One of the main goals would be to tell the Germans and the Poles “You don’t want to f*ck with us”.
Right now in the US there is a very strong “cut defense spending” streak to the tea parties and the majority of Democratic voters, and there are plenty of demands to “shut down the 700 bases in 130 countries” that the “American Empire” is maintaining. This movement will probably grow very rapidly as the economic slide progresses. Or the other scenario is that the US is occupied keeping the straights of Hormuz open while fighting a war with Iran. In either case there is a power vacuum in eastern europe, and one way or another it will be filled. The US can no longer afford to keep every bad guy around the planet at bay.
Russian demographics also indicate a possible gaming-theory “strike now while you are still strong” scenario.
We can debate how likely the scenario is, but I certainly don’t believe that it is preposterous.
uh how high is my grade in “Toque” ?
might be that I take it as the highest when it goes to zero in such a cabalistic atmosphere
bon j’exclue the Texans, that are more realist, and easy going people that doesn’t take the anglo-saxon legend as of the only worthy people for their own history
for the Texans, hip hip hurra !
Marie claude @ Feb 6, 2010 – 2:31 pm:
Good point! Russia also has plenty of internal mercenaries from the Caucasus (including Georgians and Chechnyens) who would love to have the chance to rape an Estonian blond and drive home in a modern VW Golf!
One of my office mates is about 35. He just finished his obligatory service in the Swiss Army in an anti-aircraft battalion. He says that the military is so paranoid of any complaints or especially deaths that the army has created an army of pampered and ineffective soldiers and officers. I am sure it is the same across Europe. And how many Germans or French soldiers are really willing to die for the EU, let alone Latvia? We will see the true definition of “culture wars” if these western European metrosexuals meet up with gangs of drunken, murdering georgians, tartars and chechnyians.
“One of the main goals would be to tell the Germans and the Poles “You don’t want to f*ck with us”.”
uh not at all, Russians know that they can’t f**k with the Germans, and if we are in the Germans’side, they will not argue at all !
now, the Baltics’ or what so ever former soviet republics aren’t our cup of tea, they were just gettting on our nerves, cuz of their remnent whinings on what Russia did or does to them, seems that they want us to get into their former soviet quarrels, and that is what enerves the most Germans, who still have some angers at them becuz of the WW2 aftermaths when the german populations were expelled for these eastern counties, uh, not cuz of the Soviets, but from the very eastern own countries governments, ie Poland, ie the Sudetes, ie the Baltics small republics…
Confederate, you’re talking of the Swiss army, that has nuthin to be compared with ours, that is on most of the fighting fields in Africa, in Balkans, Lebanon, Afghanistan… it isn’t fer nuthin that we achieve our tests of nuclear bombs in Pacific despites of all the manifestations of the Anglo-Saxons populations, and, that, with our lefts or righs at the direction of our governments
But sure, no German soldier wants to die for these eastern EU countries, as so the French, our space perspectives are abroad, where the economical goals are hot, ie Africa, ME, central Asia…
#74 Mongoose
Russian revanchism will not long survive Putin and his clique. It was pretty much a propaganda and policy knout to push around a dazed and disillusioned electorate. It has not the resonance there that we imagine it does. The Russian people do not really have it in them to sustain such a thing once Putin and crew leave the stage. This may happen sooner than one thinks. The Russians as a people are rather less foolish and more cautious than this.
We may have to end up disagreeing on this and awaiting events to see who is right, but I tend to think that the appeals to a “Great Russian” destiny and nationalism will continue to be used with effect. Indeed, it may be having a lasting effect now. Granting that statistics out of Russia are about as reliable as from our Bureau of Labor Statistics; I have heard reports that in the last few years [during the direct and indirect Putin rule] the Great Russian birth rate is rising for the first time in decades, and may actually be at or above replacement level. That is a sign of a culture and society that has confidence in the future, just as failure to reach replacement rate is a sign of cultural decadence. Even if it has not reached replacement level, the reversal of the trend line is significant.
Other than playing a version of the old Great Game for international leverage, I don’t see the Russians wanting to move south into the FSU Muslim republics; because they have quite enough radical Muslims thank you. They are moving to the southwest already. North is of course not an option. The Russian Far East is largely in a state of economic and demographic collapse, with portions now inhabited by Chinese who have moved north. Pushing back against them is a lot harder than dealing with Europeans because the Chinese can and will push back. That leaves the West as the place for the outlet for their ‘manifest destiny’; be it a tool for the maintenance of control of the state or an actual cultural belief in expansionism.
I don’t deny the possibility that there may be a form of Russian collapse when Putin & Co. pass from the stage. Russian culture favors autocracy. Much depends of the nature of the new autocrat. It is just that I think the ethnic and nationalist tools will be handy for quite a while longer if he succession is to another effective autocrat. We shall see.
# 79 ConfederateH
I have no problem accepting the possibility of the rape and looting tactic in the Balkans and the Trans-Caucasus. It is an understandable object lesson to the locals in terms they expect and understand from past dealing with Russians. Further, that is a region where it is possible for both the Russians AND the American media to functionally censor what comes out.
The Baltic and Scandinavian countries a) have different sensibilities and seeing such would not necessarily terrorize, but may encourage resistance in some, and b) there is easy access for news media not under the control of the Russian or the tame Western media. Thus, word would get out. Russians are capable of tailoring their agit-prop to specific audiences, at least part of the time. And of using multiple tactics in different situations. I still expect a “Sudeten” solution in the Baltic, reinforced by the use of the energy weapon.
Europeans tend to see a non-existent threat of an American or Anglo-Saxon hegenomy as a primary problem. They do not seem to realize that as they have pulled away from us, we are pulling away from them. Personally, my goal is not any sort of “rescuing” Europe. I think that such is not possible. They will either survive or fail to survive based completely on their own efforts. They face internal crises based on collapsing demographics, growing Islamist populations, and the problems inherent in socialist states who run out of OPM. They face external threats due to energy import dependency, perhaps food import dependencies, and the problems of dealing with expansionist neighbors to the south and east.
I personally do not think that they will be able to survive as currently constituted. Therefore, it is not a matter of wanting to create a hegemony over them. I think it would be far better to distance ourselves economically, diplomatically, and militarily from them as much as possible. We have nothing to gain from engagement with them, and too great a risk of being pulled into their maelstrom.
NATO will, hopefully, die a much overdue death shortly. The EU will become simply another foreign power, neither automatic allies, nor automatic foes; but something to judge from the point of view of our own interests based on their actions. And under that assumption, they will view us the same way; albeit I rather expect that they will tend to regard us as foes, at least until they are in extremis.
This, by the way, does not imply a belief that we are somehow divinely destined to either survive or triumph. We have our own equivalent or worse problems. And faced with internal enemies who have hands on the levers of power, we may well succumb. I feel at this point [and YMMV] that we will stand a better chance of survival if we neither imitate Europe, nor get pulled into their problems. Both the US and Europe are racing towards self-destruction unless we can deal with our own problems. I simply view Europe to be ahead of us in the race.
Viewing them from the outside, looking at the dynamics of the EU as the sovereign super-state they claim to be, the prognosis appears to be guarded at best.
Subotai Bahadur
“looting tactic in the Balkans” come on Serbs are slavic brothers to Russia, but could be that the Madeleine Albright’s favorite ethny, the Albaneses did and still do such moral prohibited acts
“albeit I rather expect that they will tend to regard us as foes, at least until they are in extremis.”
and we had good reasons for that, but don’t expect that we would call for your help next time, there isn’t anyore a Churchill that wants to hook Britain and by extension western Europe to America
S/89; –i don’t know why we didn’t start phasing out NATO when the Wall fell –might never have had a Putin and a ultranationalist hawk party in Russia then. And we could always have reassembled it on a provisional basis, so long as the equipment and operational principles were kept handy. Why rub it in, why cock a snoot?
Buddy, this is the alternative dream that we all had, but it wasnt in your arms lobbies that need to sell arms (especially to Nato countries) for keeping America’employment afloat
MC, that’s where presidential leadership is supposed to come in. Somebody is supposed to wonder, “what is NATO for, now?” and “what will the Russian people think it is for, now?”
–if you recall, the Russian military was just a complete wreck –except for the rocket forces, which NATO’s advancing just made more important for Russia to maintain at the ready.
And now the cat’s outta the bag.
Buddy, persons like Eisenhower, Nixon were able to envision the aftermaths, (or de Gaulle), but since the new politicians were monitored by medias, by lobbies… it ain’t any good for the rightful people of our countries, this isn’t about freedom in democraties, but how the medias will report the actions
MC, one of JFK’s more famous bon mots is “perception is reality”. The avante garde (as the soi-disant elite then styled itself) thought that to be a wonderfully cool, ironic, postmodern idea.
I’ve read about the line many times –it inspired much pop art (Warhol and others) and was knowingly chewed upon in every dorm (“it…it…must follow then that…reality is perception!”) across the newly au courant American Camelot (hey wait, Camelot is au courant?–oh nevermind).
“Camelot” is the word he himself (no adoring starry-eyed courtier) suggested to court nobles journalists as apt, an apt emblem, for the Kennedy legend. One reads years later that what he had in mind was not the poetic acceptance of Excaliber from the dying hand of King Arthur, for to take up the quest for Truth and the Holy Grail, but rather, a stanza of lyrics from his favorite song –i’ll bet the Richard Burton performance –in the eponymous Broadway show.
Well anyway, King Arthur himself, and the round table too, are only perceptions if that is what reality is, and so it was fated that forty years wandering in that desert later, at last even the modern Sir Stupid would somewhere sometime finally trip over something never seen, and stumble and fall, and get to his feet bloody nosed, and have a sudden brainstorm, and shout up at the heavens “Hey WAIT a minute, perception is NOT reality!”
uh Buddy, I just finished the “Crêmant of Moselle” bottle, (my 36th year of marriage birthday poor contribution)so I find your ranting a bit too subtle for my simplist understanding of english language
BUT what I know from the medias official education, is that Kenedy was the first to use them as a mean to create his legend
then more followed his path, and particurlarly, Tony blair, from then the whole political world change its communication, things were how to manage an image in medias
perceiption isn’t reality of course, it is the image you have of it, but, but, if you’re aware of on how some persons can manipulate reality, then you get the doubt that questions what these people want you to believe
it is why we shouldn’t take words for what they are (like poor ol Witgenstein wanted) but for their hidden agendas
Now, blah blah discussions don’t bring much to know what is “reality”, but they lighten on how the people react, and that is what the medias gurus want to know
uh yes Wahrol was that kind of witness of the media refection, p’tain, I have made paintings on TV icones, that were labelled as Warhol inspiration
Uh, I have seen the guy in Germany, in Travemünde where his moment egery Lisa Minelli was performing Kabaret, he was glancing at me from his limousine, the souvenir I keep is hat he had a no colored hair and a face with acne spots.
At these times I was the french dream for Germans, but I can tell you that the Germans weren’t an affair, too boring, and not very inspired by sensual intercourses
MC, your life and stories and your English all are great education and entertainment –even if you are sometimes a bit of a Joan of Arc slaying the anglos every time we poke our heads up and forget to respect Le Tricolor –
Happy Anniversary ! I had twenty of them until one day i got traded in for a newer model, damn the luck!
Good point about perception and reality, Buddy. It’s seductive because in our relationships with other people (and politics is just a group relationship) it’s true. What people percieve you to be in the short term is always going to count more than than what you really are – and when they find out who you really are, well, as they say about 2nd and 3rd marriages, it’s always easier to get a new audience than it is to get a new act.
Most politicians have always glided through life on this principle, JFK finally said it openly. It works great as long as the people applying never forget that they’re really pulling a con. One that works a lot of the time, but still a con.
And that’s the problem now. The current crop has done this so long and so effectively that they now believe perception IS reality! And thus people like Axelrod and Emmanuel earnestly believe that they can change reality by changing the perception. That’s pure magical thinking – the belief that reality can be shaped by the manipulation of symbols and words.
But it can’t – humanity has an endless need to keep trying this, and is endlessly disapointed in the outcome. As long as you have no power, you can pretend all you want with almost no consequences, but once you’re in power, reality has to be faced and it refuses to be cheated. That’s why the current crowd is so clueless – they were so good at managing perceptions that it never even occurred to them that reality might refuse to cooperate. Their mindset didn’t allow them to consider the possibility.
The con man’s game falls apart whenever the grifter gets so cocky that he starts to believe his own con. They are now the greatest victims of their own game.
Just as with Lehman Brothers, any PIIGS default is going to have repercussions across Europe and around the world. But in the vein of “Europe is as better off than the US”, it appears that the ECB has not guaranteed nearly as toxic paper as the FED has through its purchases of trillions in Fannie and Freddie paper.
Enabled by the dollars reserve currency status, the US has been able to borrow with its platinum credit card, while Greece was stuck with a bronze card. In the end, the US will have far more debt to default on.
The race is on for Greece before the ECB exits
Marie Claude and buddy larsen – merci boucoup for toning down ConfederateH’s expectations of the Russian role in Red Dawn II, Talinn version. And MC, there is exactly zero probability of a German-Russian clash. Have you ever seen the Amber Room in St. Petersburg? It was refurbished to its imperial glory after Nazi troops ravished it during the seige of Leningrad in 1942, at a cost of 35 million EUROS. Who paid for that? Ruhrgas, of course, which owns 5% of Gazprom. German and Russian elites are now joined at the hip and there’s nothing the old fart Cold Warriors in Washington can do about it.
Why would Russia want to rule people who don’t want Russian rule, when there are plenty of people in Moldova (Transdniester), Belarus and eastern Ukraine plus sunny Crimea who want Russian passports, absolutely no troops necessary? The EU is so desperate for Russian investment and Russia wants to keep the EU from collapse due that of course visa free travel is just around the corner, by 2014 Sochi Olympics at the latest. If you’re a Moldovan making $200 a month or Belarussian making $400 a month, and not only would a Russian passport open up working in Moscow for $1000 a month but also Germany, France and everyone left in the Eurozone for at least ninety day contract jobs. Wouldn’t you then sign up too?
Are you against Moscow giving people what they want because you think it infringes on small ex-Soviet states’ sovereignty? Than why isn’t Vlad Socor (hardcore Romanian nationalist) and what’s left of the anti-Russia lobby in Washington like Jamestown Foundation condemning Romania for handing out passports to 10% of the Moldovan population? Hypocrites one and all.
Max Boot just wrote an article saying the U.S. should be hard with China on human rights but soft on trade. Well of course, his military industrial complex buddies at the Center for Security Policy want the Chinese to keep selling their shoddy merchandise to America, so they can buy more weapons, thereby justifying our own arms build up and also lending us the cash to keep spending a trillion a year on defense. And round and round we go. The Russian T-50 (let’s just call it the Firefox in honor of Clint Eastwood and David P. Goldman over at First Things) is supposed to get Israeli avionics, to hear ‘Spengler’ tell it. Who funds the Israeli avionics industry? Why, the American taxpayer. So the military industrial (and now scientific global warming hoax complex) is in an arms race with itself.
At least BCers skeptical of reckless government spending in other areas should know the score.
Mr X, please –the passport ploy is a kremlin brainchild –have you forgotten the legal basis for the S. ossetia and Abkhazia annexations-lite?
on the new alliances springing up, and on the issue of war porn profiteering, i’d have to call it a superficial draw twixt Kremlin and DC, with points to DC on the crucial issue of whether the absorbed populations are willing or not. Eastern Europe post WWII being a perpetual example still in robust living memory.
Against that, to the truth that neither side can back down from weapons proliferation first, but must do so together, Kremlin, due to it’s post Afghan Wall-fall military dissolution, for which Kremlin was thanked via NATO advancing, well those are points for Moscow –and boyoboy is Putin ever exploiting same! As so many note, he is a worthier opponent for DC than DC is for him. lately, anyway.
“The EU is so desperate for Russian investment and Russia wants to keep the EU from collapse due that of course visa free travel is just around the corner, by 2014 Sochi Olympics at the latest”
uh, say, mostly continental EU countries that have no atlantic and mediterranean coasts
Well sure no clash between Germany and Russia is yet forecasted, so long businesses can get along, but, if it happened that the conditions would change, no doubt that a german national front would ensued again
Germans have made treaties with Russia since Bismark, and each time it did one, wars with Russia became the next agendas
http://baselinescenario.com/2010/02/07/europe-risks-another-global-depression/
http://tinyurl.com/yz9ek38
“Le traité de Maastricht interdit d’ailleurs toute solidarité financière au sein de la zone euro.”
so that means effectively, if one state collapse, it’s its fault, see if it get out of the Maastricht zone
“La ministre française de l’Economie a vu dans ce nouveau tournant de la crise un effet positif : l’affaiblissement de l’euro, tombé vendredi à son plus bas depuis huit mois, conséquence de la défiance des marchés vis-à-vis de la Grèce, constitue « clairement une amélioration », a-t-elle lancé. « Nous nous sommes toujours plaint que le dollar ne soit pas assez fort ! »”
uh the dollar is getting higher, therefore it’s good for our exportations
oolala,
the Americans hedges funds were speculating on Greece, (Portugal and Spain too) arguing they didn’t get enough revenues… fusillez Paulson !
http://www.spiegel.de/international/europe/0,1518,675196,00.html
une grande banque d’investissement américaine (qui a bénéficié du plan de sauvetage des banques US) et deux très importants hedge funds seraient derrière les attaques contre la Grèce, le Portugal et l’Espagne. Leur but ? Gagner un maximum d’argent en créant une panique qui leur permet d’exiger de la Grèce des taux d’intérêt de plus en plus élevés tout en spéculant sur le marché des CDS, un marché non régulé et totalement opaque, afin là aussi de les vendre plus cher qu’ils ne les ont achetés. Pourquoi ne pas citer les noms ? Tout simplement parce qu’il s’agit d’un faisceau de présomptions qu’un tribunal risque de juger insuffisant en cas de procès. Et comme le dit un opérateur de marché : « on ne joue pas avec ces gens là ».
http://bruxelles.blogs.liberation.fr/coulisses/2010/02/les-march%C3%A9s-financiers-am%C3%A9ricains-attaquent-leuro.html#more
#103 Mongoose
Thanks for the link. It is one of the better concise descriptions of the situation Europe finds itself in. I am reminded of an old cartoon. Various wonky scientist types standing pondering a blackboard covered with extremely complex equations. One is saying to the group, “I think you might want to look at that last step again.”. The last step in the lower right corner of the blackboard is:
“And then, a miracle happens.”.
Right now, they are holding to hope that without any way to enforce the fiscal sanctions that they are trying to impose on Greece [with the rest of the PIIG's close behind] that a miracle will happen and it will all work out. In the absence of a miracle; as soon as the holdings of the French, Germans, and Belgiums themselves are at risk due to the stress on the Euro caused by a PIIG refusal, they will have to make a choice. Either the EU will jettison the weaker economies from the EU, or forcefully place them under the involuntary control of the “big 3″.
The goal of the entire project, from the inception of the Common Market, has been to have a central European entity absorb the sovereignty of what are now the former nation-states of Europe. All of them. Up until the coming into force of the EU Constitution under the guise of the Lisbon Treaty; there has been enough of a gray area for them to maneouver in to influence events without claiming responsibility. But now, well, you cannot be a “little bit sovereign” any more than you can be a “little bit pregnant”. Having absorbed the former nation-states ability to freely legislate within their own borders, to determine their own internal tax policy, to determine their own social policies, to determine their own military policy, to determine their own foreign policy, and to decide who and what crosses their borders; the EU has laid claim to sovereignty in Europe within the borders of its member former nation-states.
Sovereignty ultimately comes down to the ability to enforce the government’s will within its own body politic without either outside interference or internal refusal to accept that will, according to the local political culture and mores. In both internal and external cases, the ultimate and only sanction is force majeure.
I cannot see the EU reversing 50 years of expansionism, especially since most of the 3rd tier former nation-states within the EU are not that far from the situation of the PIIG’s. Down that road lies eventual total dissolution of the EU.
The only alternative, once the EU-crats find that their personal nest eggs are at risk, is to develop the physical and political means and methods of applying force majeure. That is far from a certain path also.
Much of the EU project has depended on the development of a “New European Man” akin to the Soviet dream of a “New Soviet Man”; who would gladly and reflexively subordinate his own interests to the by-definition ‘Enlightened’ will of Brussels and his betters. Plato would have loved it. The EU has tried a half century of conditioning and molding of minds. The FSU tried 70+ years of conditioning, molding, and extreme brute force. Neither project seems to have worked out all that well.
In the absence of either the miracle needed, or the sudden arrival of an outside ‘sugar daddy’ to prop them up financially for a few more years [and right now off of the top of my head China is the only possible source of that much loose cash on hand]; I think given the choice between immediate dissolution of the Eurozone [with all the implications thereof] or taking the slim chance of force of arms, when push comes to shove the EU-crats will find some way to justify trying to make the sovereignty they claim real. I may be wrong, but I think I am betting with history.
And this, by the way, in no way either denies that we ourselves are ankle deep [but in head first] in the kimchee ourselves, or that our own government is less functional than a football bat.
Subotai Bahadur
“I cannot see the EU reversing 50 years of expansionism”
that says it all LMAO
now the worm is in your apple too, and you didn’t kill it, but feed it with your own taxes
there will be no eurozone dissolution, just that the countries that have problems will be put into a purgatory, but just for the money business, as stipulated by the Maastricht agreement
BTW Greece borrowed outside the eurozone (guess to which organisations), it’s why Germany and by extention the other EU countries don’t want to bail out Greece
Besides Greecs benefitted largely by their membership of EU, their GDP groth rate was about 4 to 5 for quite a while, they just didn’t forecast some “food” for the winter like in the tale “the grasshopper and…”
idem for Spain and…, their groth rates were artificial !
I find funny that none is praising Poland super groth rate at the moment, like in the previous years, idem, without EU, these countries would still be in the cabbages
http://www.spiegel.de/international/europe/0,1518,676634,00.html
GoldmanSachs helped Greek government to mask the true extend of its deficit
Not that I would ever be the type to say “I told you so” but with regard to my pst #4 in this thread, in which I predicted that Germany and France would cave and come up with a way to bail out Greece – I told you so.
http://finance.yahoo.com/news/Wall-Street-set-to-rise-on-rb-3579359531.html?x=0&sec=topStories&pos=main&asset=&ccode=
“NEW YORK (Reuters) – Stocks rose on Tuesday after a senior German ruling coalition source said euro zone governments have decided in principle to help debt-burdened Greece and that various options were being considered.”
“La Commission européenne a appelé mardi les dirigeants de l’UE à apporter un “soutien” clair à la Grèce”
the EU comission asked the europeans leaders for helping Greece, but that doens’t mean that they will (at least that some), so far that doesn’t depends on the comission, it is still a prerogative of the nations leaders (stipulated by the Maastricht agreement)
http://tinyurl.com/yljcrgp
As far I’m concerned I display my opinion on the political and or journalists sites, that I don’t want to give more money to counties that lived upon my taxes already
#110 wws
Thanks for the link. I’ll keep an eye on this, because while the agreement is “in principle”; the details are going to be crucial.
If the German government/banks are going to kick out hundreds of billions of dollars [and that is what would cover just one year I understand]; there are going to be strings attached. Maybe ropes would be more accurate, or a mooring hawser. Or perhaps those woven wire cables that are bundled together to hold up suspension bridges.
The EU itself is caught up in the worldwide recession/depression and has the exposure to imploding banks and bad loans too. Carrying Greece, then Portugal, Spain, Italy, and Ireland; with the Baltic Republics in deep trouble also is going to be beyond them. The best case that they can dream of, I think, is that they can forestall the immediate crisis in Greece, force them to do the politically unpopular things to delay the reckoning, and then move the funds to the next falling domino. I find it telling that in the last day or so I have been seeing stories that the best that the bankrupt EU countries can hope for is years of grinding austerity, if they are bailed out until the worldwide economy recovers.
Austerity means that they will be cutting back government benefits. The loans come first, the final political decision to make the cuts come after the checks are cashed.
So what strings/ropes/hawsers will be attached to the money, if it materializes? Historically, the act of lending money to someone/thing that considers itself sovereign; whether it is in fact or not, is immensely risky for the lender:
q.v. the Rothschilds in Europe in the middle ages and Rennaisance, the 1830′s French loans to Mexico, the loans by the various powers to Imperial China at the end of the Empire, and the hundreds of loans the US gave to finance the Allies in WW-I and WW-II and in rebuilding both sides after both wars.
And the only effective recourse to attempt in that case is the force majeure I noted above. Sometimes the creditor gets stiffed badly on an individual loan because they lack that option [see Rothchilds]. Sometimes the creditor takes over and then gets chased out, with or without repayment [see France and Mexico]. Sometimes the creditor(s) take over parts of the debtor nation, and run things to their benefit until eventually they are very forcefully removed [see post-Imperial China -v- the Western Powers]. And sometimes the creditor [the US] just gives up knowing that the debtors are proud of defaulting. [the one exception, Finland, paid off its outstanding debt to the US in 1976 and is the only country who made all payments on schedule]
It is indicative that the EU is trying to push things off a little while longer, but they lack the resources to either deal with the magnitude of the entire problem or to guarantee repayment.
This bears watching.
a) IF the loans actually go through, what strings are attached beyond promises to reform Tuesday in return for a loan today?
b) IF the loans go through to Greece, what will be the reaction of the rest of the PIIGS states, and the reaction of the rest of the EU to their demands to be bailed out too? And if the EU says they will bail out Greece and not the rest, what is the reaction?
c) Governments always burn through money a lot faster than they admit. Especially OPM. Will the loan buy more than a few months respite?
d) IF Greece gets the loans, what means do the German bankers/EU [if the bankers are loaning the money without either an enforceable first lien or fee simple ownership on the ghoolies of someone important in the EU government, they deserve to lose it] have as a real recourse if Greece either defaults on payments or on the conditions of the loan? In the fantasy world inhabited by the European elites; the masses will be forever quiet and accepting of their rule, demographics can be ignored, the money will always be there because it always has been, and coercion is something only used by and on the weaker of the Üntermenschen ourside of the Eurasian continent who do not have the means to resist. Mind you, the American wanna-be elites frequently share these faults. And we have similar problems here with California and Michigan. Both are due for sudden encounters with reality.
If this goes through, the final reckoning is delayed by no more than a year. I’m expecting less. I still think we will need popcorn.
Subotai Bahadur
I do agree with you, Subotai. They’re pouring money into a black hole and it isn’t going to do any good. There eventually has to be some social crisis in Greece for any serious changes to take hold. And I have doubts that the Euro can survive; in my estimation (and many others) it was always a bad idea, right from the start. The nature of the Euro guaranteed the type of crisis we are seeing today.
But Germany and France are going to have to be driven to the limits of what they can stand to do before the breaking point is reached, and they haven’t been driven that far yet. They have to realize that supporting the Euro and the EU it represents, a cherished dream of theirs for 50 years now, is not worth sacrificing their own countries economies for. It’s really too bad, they could save themselves a lot of pain by being a little more hardheaded.
But some people always gotta learn everything the Hard Way.
http://tinyurl.com/yzqvqtm
Les vrais investisseurs, ceux qu’on appelle les « real money », comme les banques ou les assurances, semblent avoir enfin compris qu’ils étaient victimes d’un mouvement de panique orchestré par quelques spéculateurs, comme je l’ai révélé ici même samedi, et qu’ils risquaient d’en être victimes. Ceux-ci ont donc repris leurs achats de dettes grecs, contribuant à détendre le marché. Surtout, les spéculateurs commencent à craindre que la Banque centrale européenne se mette à intervenir massivement sur le marché secondaire (c’est-à-dire lorsqu’un prêteur revend son papier à un tiers) en achetant à tour de bras de la dette grecque, ce qu’elle peut parfaitement faire (et qu’elle fait déjà en acceptant de la dette en garantie de ses prêts aux banques), les traités européens lui interdisant seulement de prêter directement de l’argent aux États. Les hedge funds ont donc commencé à vendre des CDS qu’ils avaient acquis, contribuant à faire baisser leurs taux… Le fait que Jean-Claude Trichet ait écourté son voyage en Australie pour être certain de pouvoir assister au Conseil européen des chefs d’État et de gouvernement informel de jeudi a retenti comme un signal d’alarme.
Real investors, the so-called “real money”, such as banks or insurance companies seem to have finally realized they were victims of panic orchestrated by some speculators, as I revealed here Saturday, and they were likely to be victims. They have thus taken their purchases of debt Greek, helping to relax the market. Above all, speculators began to fear that the European Central Bank starts to intervene heavily in the secondary market (that is to say when a lender sells its paper to one third) by buying right and left of the Greek debt , it may well be (and it is already accepting debt as collateral for its loans to banks), the European treaties prohibiting him only lend money directly to states. Hedge funds have started to sell CDS they had acquired, contributing to lower their rates … The fact that Jean-Claude Trichet has cut short his trip to Australia to be sure to attend the European Council of Heads of State and informal government on Thursday sounded like an alarm.
Une rumeur supplémentaire a contribué à refroidir les ardeurs des spéculateurs. Les Vingt-sept, n’ayant guère apprécié cette attaque des marchés, sembleraient plus que jamais décidés à réglementer l’activité des hedge funds. Plusieurs pistes sont à l’étude : limiter leur accès aux liquidités qu’ils peuvent collecter, rompre, comme aux États-Unis, les liens que certains d’entre eux ont avec les banques et, enfin, interdire la vente à découvert de CDS. Bref, les hedge funds ont été un peu trop loin.
An additional rumor has helped to cool the ardor of speculators. The Twenty-seven had not appreciated the attack markets, seem more determined than ever to regulate the activity of hedge funds. Several tracks are under study: limiting their access to liquidity they can raise, break, as the United States, links that some of them with the banks and, finally, to prohibit the selling of CDS . In short, hedge funds have been a little too far.
hope the google translation is OK
http://tinyurl.com/yfokczv
“Economie et crise aux USA” a very pessimist analyse of the US debt and economy
http://tinyurl.com/yf2jrg9
the international financial markets “are a law unto themselves