Markets work by assimilating and pricing information. But sometimes the information is not available or it’s faked. The Greek debt crisis has focused renewed attention on the accounting procedures used by other European countries to measure their compliance with Eurozone guidelines now that the information shortcomings have been revealed. Investors, having lost confidence in the official numbers provided by Athens are demanding better figures. The Wall Street Journal says new doubts about “sophisticated” reporting practices used in the past are being expressed not just for Portugal but even for core countries like France and Germany. One particularly controversial practice is the use of currency swaps on the advice of, among others, Goldman Sachs.
In recent weeks, countries’ use of currency swaps has drawn attention. In such transactions, often benign, countries might borrow in a currency not their own, for example, and use a derivative to offset the risk of currency fluctuations. But these instruments can also be used to artificially massage cash flows and liabilities, to meet debt and deficit thresholds. …
Euro-zone governments are under no obligation to disclose the precise nature of the derivative agreements they enter into, making it nearly impossible for investors to discern the potential risks associated with them. Eurostat permitted the use of such transactions to adjust debt figures until 2008. …
Goldman Sachs Group Inc. did 12 swaps for Greece from 1998 to 2001, according to people familiar with the matter. Credit Suisse was also involved with Athens, crafting a currency swap for Greece in the same time frame, according to people familiar with the matter. …
In 2001, Goldman and Greece came up with a now-controversial solution: a new off-market swap. It agreed in the future to convert yen and dollars into euros at an artificially favorable rate. Greece could use that rate when it recorded its debt in the European accounts—pushing down the country’s reported debt load by more than €2 billion, according to people familiar with the matter. … “It was done to dress up the debt figures by some smart idiot in the finance ministry” he said. Greece’s remaining exposure to the complicated arrangement remains unclear.
With Greece’s debt levels stated lower than they were it could borrow at reduced rates of interest. Now that better numbers are available the market will adjust the rates upward. That’s precisely what the Greeks don’t want. What Athens wants is a EU fixed rate because that’s what it can afford. Reuters reports that Greek finance minister George Papaconstantinou wants “to be able to borrow on the same terms as other countries in the euro zone … But investors anxious at the risk that Athens may be overwhelmed by its debts, projected to hit 120 percent of gross domestic product this year, are charging a steep premium to buy Greek bonds rather than benchmark German bunds.”
But the higher rates would make it impossible for Greece to borrow 53 billion Euros. So to avoid “social unrest if the EU forces too harsh austerity on the Greeks” Papaconstantinou is holding out for concessional terms. The market has market reasons for wanting to charge a price and the politicians have political reasons for wanting to set their own price. A lot of the times the politicians win. The temptation to impose price controls by fiat is always greatest when there is either no political will to reduce the demand for a product or no ability to reduce the cost of factors by improving efficiency. And the latest person to be caught in that dilemma and become seduced by siren song of price controls is President Barack Obama who’s announced seeking “sweeping new authority to curb exorbitant rate hikes by the nation’s health insurance companies”.
Obama’s proposal would give the Health and Human Services secretary, Kathleen Sebelius, new powers to review premium hikes by private insurance companies – and in some cases, block those deemed excessive. Anthem’s rate hikes of up to 39 percent in recent weeks have focused attention on the skyrocketing health insurance costs, the very costs Obama vowed to fight when he undertook comprehensive health care reform last year. Obama’s plan would create a new board made up health insurance experts, which would determine annually what are reasonable premium hikes in various markets, and the HHS secretary also would work with state officials, the White House said.
At least part of those rate increases are due to Obama’s proposals themselves. His health care reforms were always going to drive costs up. According to Noam Levey of the LA Times, who examined the New York experience, average insurance rates were bound to go up simply because coverage was going to be extended to the uninsured — increasing the demand — and mandating that people with pre-existing medical conditions could not be refused. With more and higher-risk consumers entering the market and the supply of medical services inelastic in the short term, prices were bound to go up. If people can “buy insurance on the way to the hospital” as one economist put it, then the money had to come from somewhere else in the insurance pool. Levey said, “premiums in New York are now the highest in the nation by some measures, with individual health coverage costing about $9,000 a year on average.” But since higher premiums would mean political suicide for the Administration it is going to square the circle by imposing price controls. So what’s wrong with that? The problem with price controls is that it eventually creates underprovision and shortages in the long run. Everybody will remember his lesson from Economics 101. Here’s how Wikipedia retells it.
The primary criticism leveled against price controls is that by keeping prices artificially low, demand is increased to the point where supply can not keep up, leading to shortages in the price-controlled product. Shortages, in turn, lead to black markets where prices for the same good exceed those of an uncontrolled market. Furthermore, once controls are removed, prices will immediately be subject to rampant inflation, which can temporarily shock the economic system.
A classic example of how price controls cause shortages was during the Arab oil embargo between October 19, 1973 and March 17, 1974. Long lines of cars and trucks quickly appeared at retail gas stations in the U.S. and some stations closed because of a shortage of fuel at the low price set by the U.S. Cost of Living Council. The fixed price was below what the market would otherwise bear and, as a result, the inventory disappeared. It made no difference whether prices were voluntarily or involuntarily posted below the market clearing price. Scarcity resulted in either case. Price controls fail to achieve their proximate aim, which is to reduce prices paid by retail consumers, but such controls do manage to reduce supply.
At the margin the higher cost health care providers are driven out of business. Investment flows to non-price controlled industries unless capital controls are imposed and price controlled health care becomes an unattractive industry to do business in. Sooner or later good doctors become as hard to find as vacant rent controlled apartments in Manhattan, which is to say, hard to find unless you’re Charlie Rangel. But if price controls and artificially low rates cause so much damage why do politicians resort to it? Maybe because they live in a psychological world where everything could be ‘fixed’ by writing the right words or talking to the right people. Never mind the underlying economics. So why not make health care affordable by increasing demand on a fixed supply and then imposing price controls? Simple isn’t it? Except that it can’t be done, and when the scheme falls apart in the end many politicians will be genuinely surprised because it’s always worked before. Some people will never grasp the principle, strange as it may seem.
Years ago I had an acquaintance who used to borrow money from me every payday. I lent him a few hundred pesos never expecting to be paid back. But one day out of idle curiosity, I gently asked when he might feel able to repay me. He answered, “if I had any money, would I be borrowing?” It made a twisted kind of sense, so why not price controls? They make sense in a world where everything can be fixed. There’s an episode in Mario Puzo’s Godfather when a cancer stricken mobster asks the mafiosi to square things with God.
GENCO Godfather, Godfather, it’s your daughter’s wedding day, you cannot refuse me. Cure me, you have the power.
DON CORLEONE I have no such power…but Genco, don’t fear death.
GENCO (with a sly wink) It’s been arranged, then?
DON CORLEONE You blaspheme. Resign yourself.
GENCO You need your old Consigliere. Who will replace me? (suddenly) Stay with me Godfather. Help me meet death. If he sees you, he will be frightened and leave me in peace. You can say a word, pull a few strings, eh? We’ll outwit that bastard as we outwitted all those others. (clutching his hand) Godfather, don’t betray me.
Betrayal? Why what politician would do that?
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THE game is rigged you say?! Well i’ll be…
Trust in no one but GOD. Or as the founding fathers said. “In GOD we trust, all others pay COD.”
This circle jerk has become tiresome in the extreme. Are the world’s little people reaching their tipping point? Lord, I hope so.
As I have commented before, the aim of the Democrats is to create Politically run Cartels in Banking, insurance, health care, energy, transportation, manufacturing and news and information. The fact that they are inefficient and costly producers is good for the Democrats because these huge groups will need protection from competitors (see the hit on Toyota to benefit GM, Chrysler and the UAW — and remember that the windmill industry requires cap and tax).
These Cartels will be sold (with the help of Paul Krugman) as good for the consumer, though in the end they will exploit the American people shamelessly (and tell us how good we have it). You see, the Left must first destroy the economy before they can save the economy — or rather, the little that is left.
Mike Munger has an entertaining podcast on price gouging laws linked here.
China. My uncompleted thesis was supposed to be an evaluation of the China threat. The basic idea was meant to be a simple evaluation of capabilities and intentions. What it foundered on was the impossibility of getting reliable numbers as to what China’s GDP really was. There were numbers used or at least reported by the banks and those reported by the Chinese government and there are large numbers of economists employed by the CIA to stare at the black box and guess what is inside it but the fact is that we do not know. We can track most of what goes in and comes out but the fact remains that only a fool would believe anything reported from an official source and there are real impediments to observing what happens in vast portions of the country for three reasons.
1. In any 3rd World (Developing) country the veneer of managers trained to competently record and report information at the level desired by Western standards is very thin. Most places simply lack the capacity to do the job, even if their intentions are good.
2. In any 2nd World (Communist) country the costs of failure are so high and the expectations are so irrational that managers are trained to to submit false reports and keep their enterprises alive by any means including political maneuvers, graft, nepotism, and theft. Actually delivering a product is way down the list of expectations.
3. Max Weber pointed out that China’s Confucian social and ethical system, like its equivalent in Southern Europe, produced a sliding scale of moral obligations. One’s duty to their father exceeded their duty to their brother. The loyalty to one’s brother justified deceitful conduct towards a cousin, loyalty to your home village exceeded that due to the inhabitants of a distant province, etc. While in theory everyone owed loyalty to the Emperor in practice he was far away.
The fathers and grandfathers of the current managers in China grew up evading the irrational expectations and random bouts of violence of Mao’s rule. The government was told that the Great Leap Forward was producing tons of steel in back yard furnaces and that millions of happy chickens were laying billions of eggs for the Red cause. It was all a lie. When a disaster due to system failure happened people would protect the leader by saying “If only Mao (or Stalin etc.) knew.” Keeping the prestige of the leader intact through ignorance may actually be a feature of these systems.
New York City is now approaching 67 years of experience with the effects of the temporary war time program of rent controls that are still while modified in place. They have contributed significantly to all of the pathologies that afflicted the city since. What a program of price controls in medicine will do is decrease the supply of good doctors and increase the supply of lawyers and financial regulators, or their partners trained regulation avoiders.
Last night the popular show Boston Legal was on. One of the plot lines was about the poor child whose mother was killed by her crazy stalker father. They sue the insurance company for not protecting her personal information since the father was able to go into their web site and impersonate her, after all he as her former spouse had her identity information, to find the location of her doctor, where he murdered her. The fat tired and lame old white guy insurance executive sits there while his lawyer makes a perfunctory statement to the jury that the effect of holding for the poor little girl will be higher costs and less access to medical care for everyone then the lawyer for the plaintiff tells the jury that the NSA is reading their email and wins almost $3,000,000 for his client. We may save whiskey the trouble and write his commentary for him.
#2 HD Greene
I believe the phrase you’re looking for is, “Pissing down our necks and telling us it’s raining”.
#5…
is that an appeal for “no more uro”??
When inflation start to kick in commiserate with the deficit spending we’re watching, the politicians will not cap or severely cut spending in the States either. Social Security and other federally backed pensions are adjusted for inflation. Like good pols, they’ll hammer the economy again with ‘price controls’ too and America will become a blackmarket, off the sheets, economy with a vengeance. They can’t shut down the illicit drug traffic now with marginal support of the citizenry. Imagine when the number who believe government is broke start to take business and the associate taxes from the accounting books.
The reason for the ridges on the edge of coins is to prevent shaving the edges; left over from the days when coins were specie.
Debasing the currency is simply more sophisticated than before. We need a new kind of ridge. The first being some strict rules regarding derivatives. Derivatives function as checking accounts (demand deposits) of checking accounts, effectively monetizing funny paper. Something from nothing. Alchemy.
Arrgh.
I agree with hdgreene. The Democrats have long been the Party of Fascism. (Mussolini greatly admired FDR.) Since 1972 the Party has draped itself in the Socialist variant of Fascism but since the fall of international communism in 1989 the Party talks Marx but operates in Mussolini’s world.
Well, gee, the Community Reinvestment Act worked so well in the USA, why should the EU not use the same principle in dealing with Greece?
Indeed, why should Greece not receive even lower interest loans than the German standard based on its downtrodden status. After all is not Greece’s current situation not due in large measure to the devastation wrought by Italy and then Germany’s invasion of WWII?
Indeed, why not apply the CRA concept, which was so successful in increasing home ownership in the USA, to the health care industry? Isn’t that what Obama is trying to do? And note that the CRA has yet to be repealed and that efforts are being made to expand it.
LifeofMind # 4: “In any 2nd World (Communist) country the costs of failure are so high and the expectations are so irrational that managers are trained to submit false reports …”
Brings to mind a story from the old USSR. A factory was to deliver a piece of equipment to a Soviet military unit. They were running late so they just sent a message to Moscow saying that delivery had been made. The military unit got a copy of the message, said “Crap! Where is it? Anyone see it? Oh, no, we lost the thing already!” and sent a message to Moscow saying they had the item and it was working fine. The factory got a copy of the message and decided that there was no rush in making delivery since the military unit obviously had all they needed.
Obama knows price controls will drive the insurance companies out of business. The solution will be govt run health care. Then they can follow the same pattern as Greece and hide the cost till the future when it is no longer his problem.
Goldman Sachs…It’s hard to see that name in print and not think of the proverbial ‘monkeys trading bananas’. It’s even harder to describe the unease I carry with regard to world financial markets.
Greece and Obama.
What’s the link? Obama is greasy?
I think the link is mathematics.
And driving the system to and over the limit.
Blindness.
The Greek situation – I don’t understand, but I will speculate, following the report. Apparently Goldman-Sachs really believed in their rocket-science derivatives. Which turned out to be bogus. So, the smartest among us, gave us true lies.
The Obama situation – I understand too well. Obama himself is completely innumerate, couldn’t make change for a dollar, not only cannot do math, but doesn’t even have the common intuition that numbers have to add up. As a community organizer he just mau-maus, and somewhere a fat white man makes the numbers work by pulling money out of a mattress.
The commonality here is not really that either party thinks they are lying. Presume each has the very best intentions. It is an ancient story, that of the golden goose, greed and ignorance tend to a sad result. You can be a rocket scientist, or a complete moron, and you WILL stress the system until it breaks.
It’s like “CAP and TRADE”, it’s just “TOO BIG TO FAIL”.
It’s ALL about the future. The political advantages that price-controls and immediate access with no pre-existing conditions exclusion appear almost immediately–the physician shortages and long wait-times, degraded physical plant and filth and grime (Think the NHS in the UK) come only far later–hopefully when all the politicians who voted to impose such market constraits and financial/economic unreality are long retired and on the links in Sarasota with their own money-in-the-bank fully funded retirement plan and gold-plated tax-payer paid exclusive health plan.
I mean, seriously, to change the topic just a little, can you BELIEVE the new, updated Obama health care plan? He has more than doubled-down on the Pelosi-Reid plan.
This SHOULD scare off 3/4 of the Democrats, but it will come to the Republicans to oppose it in this televised summit. That’s what Obama thinks, I guess.
I’m sure Obama thinks this is Chicago politics. To me, it’s like watching a four year old pick up a running chain saw.
Let’s say Obama “thinks” he is taking an extreme position in order to better compromise with the Republicans somewhere in the “middle”. That is not the way to go about it. You can start too far apart to converge, and that’s what he has done. He STILL has not the least idea of how to negotiate – he either bows to his enemies, or makes absurd demands of the system, and gives zero respect – rude (and inaccurate) disrespect – to the loyal opposition.
I’m glad that the New York experience is making it (so late!) into the discussion, the actuarial facts of the matter of what happens if you allow in preexisting conditions with no premium. Prices go up – A LOT. UP. Has to come from SOMEWHERE.
(now, the counter-argument is that it ALREADY comes from somewhere – if you have a preexisting condition, you simply go uninsured, show up at an ER, and demand free care, and all we are doing is rationalizing that situation and maybe funding it a bit more coherently. This is the counter that the “smart guy” in Obama knows – but only occassionally trots out. Even Obama knows, or has the intuition, not to offer such complex math to the public. Since I am quite sure that he does not really have an intuition himself that the numbers involved are HUGE and disruptive. He just dances and sings, someone else, somewhere else, a scientist or economist, makes it work, whatever he demands. And he’s POTUS now, not just a punk with a Columbia degree.)
My Screed, Part III.
Price controls on something like health care CAN WORK, if you know the magic word. Come close, and I shall whisper it to you.
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subsidies
1. Take the current system, 2. Ask the insurance actuaries what it will cost to include preexisting conditions 3. The difference goes from the treasury to the insurance companies according to whatever system, capitation, history, outcomes.
Yes it will be expensive, yes it is a new entitlement, no it does not actually act to reduce expenditures, but yes the insurance companies will just LURVE it, and yes, I think we as a society have the funds to make it work.
Two other things, covering the uninsured, and REDUCING COSTS. I have no idea how to do that last, and it is the REAL driver of ALL the fuss. Covering the insured should NOT be done by coercion – and really, it will not help, to have a bunch of young and healthy people contribute. What might help is having 12m illegal aliens buy policies (I wonder how many have them now, virtually zero?) but will they ever have the funds? Do we really want to subsidize policies cheap enough for them to hold? Very tough issue, cuz you have to ask why not simply ship them all home, and the answer is, cuz you’d just bring them back in with papers and still have pretty much the same problem.
As a practical matter we need universal health care. The big issue, for me, as I sit thinking about this, is do we need government run universal health care?
Where and when I grew up, it was a very rural, and in today’s view, primitive, environment. However, I don’t remember ever hearing of any one, with a couple exceptions, that died untreated and/or uncared for. The exceptions were a couple of old cantankerous dudes that didn’t want ANYONE messing with them and as fate would have it, they got there desires. I could go in to detail how this system worked, but I am sure most of the commmenters here are familiar with similar scenarios. But in short, it went something like this. Family took care of family and community took care of the community. There were some gosh awful home remedies used and prescribed that probably did more harm than good, but people were born, lived, loved and died without the burdensome “help” of the federal government. I know that I mourn for an America that is past, perhaps forever, but we should strive to do better, not worse.
At #3. Is Mike Munger related to Charlie Munger?
7. Don51:
When inflation start to kick in commiserate with the deficit spending we’re watching, the politicians will not cap or severely cut spending in the States either. Social Security and other federally backed pensions are adjusted for inflation. Like good pols, they’ll hammer the economy again with ‘price controls’ too and America will become a blackmarket, off the sheets, economy with a vengeance. They can’t shut down the illicit drug traffic now with marginal support of the citizenry. Imagine when the number who believe government is broke start to take business and the associate taxes from the accounting books.
I have been speculating about these kinds of scenarios for sometime. It may be the only way that Americans could enjoy a measure of economic freedom, the way things are going.
Josh:
I thought you were looking for work. Some of those illegals you mentioned aren’t from Mexico, they’re from India, China, etc. and are here working in the high tech industry illegally on a student visa, or just overstayed thier visa and didn’t bother to leave. All of them work for half, or less than half of what a U.S. engineer would make.
There are a huge number of native born and naturalized U.S. citizens who may not have wanted to do construction work 4 years ago, but as the employment situation continues to implode, more and more of them will garden, or farm, or mop floors and scrub toilets, or put tires on cars, etc.
Illegal aliens are a drain on the economy at a time we can’t afford it.
Lies and duplicity by governments on economic or finacial matters are nothing new.
I don’t know if I’ve got the facts exactly right, but didn’t two (SEC and FHA?) U.S. gov’t entities lie about the viability of mortgage-based securities (which are now known as toxic assets)? It’s amazing that what would send Bernie Maddoff or Bernie Ebbers (WorldCom) to jail is considered business-as-usual for governments.
Incidentally, even Ben Franklin lied about gov’t finances: during the revolution he had it proclaimed that American paper currency was backed by $2 million is Spanish silver dollars. It was a total falsehood, but the ruse lasted more than halfway through the war before the value of the paper money began to fall dramatically. Then we were rescued by the French. I forgive Ben under his circumstances, though. Today’s politicians are the white-collar criminals that Mark Twain said they are.
Government price and/or wage controls never, never, never, never, ever, ever, ever work.
they always end up backfiring or creating a new unintended problem.
LoTM, In the vein of the last thread….what type of incentives did the PRC offer you not to finish your thesis? All this talk of health care is making me sick. Team 44 is coming across as a bunch of rank thugs.
You seem to miss the point…. They want the insurance businesses to go out of business. When they are all out of business except 1…the goverment isurance business. They purposely pass laws that drive cost up, so the mornic people who are so dumb that they require the Great One to speak of this matter over and over and still not get it, will cry out for a savior one who can walk on water! Someone who will save all the stupid little people. This all just a simple and easy plan. Make health care (or whatever for that matter) cost too much and ask the goverment to takeover. Always follow the money and power and you will find all roads lead to Rome….or Washington in this case.
-Rob
wretchard:
I don’t see this post as a complaint about socialism, but rather as a complaint about hiding the costs of socialism. Rent control extracts a hidden penalty from both landlords and tenants, whereas a taxpayer funded rent subsidy is essentially honest.
Much of what has passed for “market capitalism” has in fact had hidden subsidies, not the least of which has been federal grants of land to private individuals and corporations. The Homestead Act was very definitely a government intervention in the economy.
Government intervention in the economy can sometimes be good. Some services are best done by the government, such as the armed forces and the post office. Others are best done by the private sector. The key question we should be asking is not whether government is inherently good or inherently bad, but rather what the role of government ought to be in any given industry. When making decisions on this, it is best to be honest.
For example, government does have a role to play in health care. Nationalizing one sixth of our economy is not one of them. However, the government ought to increase subsidies for medical schools and nursing schools throughout the United States. It may even offer reinsurance for community-based health care clinics (much like state hail insurance for farmers). What it shouldn’t do is centralize authority in the federal government.
I think the Obama administration is simply interested in centralizing authority in the federal government. (So much for community organizing…) For example, it is seeking to have the federal government directly administer student loans. Although the reform is proposed as a “savings” measure to “cut out the middleman”, it appears to be designed to make Americans feel more and more dependent upon a remote federal bureaucracy.
It one seeks to expand the role of government in people’s lives, it is best to make people feel comfortable with the idea. The problem with the Obama administration’s approach of proclaiming a “fundamental transformation of America” is that it creeps people out.
wretchard:
I don’t see this post as a complaint about socialism, but rather as a complaint about hiding the costs of socialism. Rent control extracts a hidden penalty from both landlords and tenants, whereas a taxpayer funded rent subsidy is essentially honest.
Much of what has passed for “market capitalism” has in fact had hidden subsidies, not the least of which has been federal grants of land to private individuals and corporations. The Homestead Act was very definitely a government intervention in the economy.
Government intervention in the economy can sometimes be good. Some services are best done by the government, such as the armed forces and the post office. Others are best done by the private sector. The key question we should be asking is not whether government is inherently good or inherently bad, but rather what the role of government ought to be in any given industry. When making decisions on this, it is best to be honest.
For example, government does have a role to play in health care. Nationalizing one sixth of our economy is not one of them. However, the government ought to increase subsidies for medical schools and nursing schools throughout the United States. It may even offer reinsurance for community-based health care clinics. What it shouldn’t do is centralize authority in the federal government.
I think the Obama administration is simply interested in centralizing authority in the federal government. (So much for community organizing…) For example, it is seeking to have the federal government directly administer student loans. Although the reform is proposed as a “savings” measure to “cut out the middleman”, it appears to be designed to make Americans feel more and more dependent upon a remote federal bureaucracy.
It one seeks to expand the role of government in people’s lives, it is best to make people feel comfortable with the idea. The problem with the Obama administration’s approach of proclaiming a “fundamental transformation of America” is that it creeps people out.
Blame it all on progress in medical research. So much is now known about the human body that if everyone got every known health treatment, the Gross National Product would be spent many times over. People who refuse to use the word “rationing” are doomed to chatter on endlessly.
Jon Claerbout #28: We know just enough to be stuck. Whether funded by industry or by government, the cost of learning more is very high.
The cost of ignorance is much higher, but the bureaucrats don’t care about that.
I suspect what will see them hanging from street-lamps will be the collapse of anti-infective medicine. Between the hysteria over autism and vaccines, the promiscuous overuse and misuse of antibacterials, and the absence of incentives to invest in new bug-fighters, we are only a year or six away from real tragedy. After it comes, and women start dying in childbirth and doctors start to amputate limbs to save kids with MRSA, and XDR tuberculosis hits the streets, we’ll begin to understand what a screaming bargain we had; and how we threw it away for a con.
Re: RWE (#10)
Yeah, it certainly was the Germans who in WWII expanded the Greek public sector to its present bloated dimensions (1 million employees against the background of roughly 12 million population) and introduced regular payments of two bonus salaries per year to each public employee regardless of performance.
On top of that, them Nazis in the almost 70 years since saw to it that the Greeks would never scale back these expenses, through a combination of covert action by their renowned “Bundesnachrichtendienst” and the Krauts’ dreaded aircraft carriers cruising the Aegean Sea no doubt.
Pity the Greeks.
Surely even the most conservative must feel it is unacceptable in a civilized society for citizens to suffer for simple care. Canada, the UK and several other countries provide universal health care, are you seriously trying to tell us that the richest country in the world, however temporarily embarrassed, can not?
What you guys should be arguing over is the system and all systems have flaws. What is most likely to bring down the better models is increasing expectation. When doctors are paid by the visit you quickly build up a culture of visiting for the smallest runny nose and then there is “take these for three days and be sure to come back and see me again” (for another government paid fee.) We have even seen doctors charge a return visit for a telephone follow up! At the other end of the scale the increasing cost of more and more sophisticated treatements will be an awful burden. All such systems will eventually be rationed by funding and the shortage will fall unfairly on those who can not manipulate them.
I understand the debate about how, that’s a very real problem and done wrong the results don’t bear thinking about, debt and a colossally inefficient system. So far there is little that inspires confidence. That I understand.
I am a conservative, and to you guys, a foreigner, and I love your country for all its wonderful qualities and the wonderful times we have had there, but really, you don’t have the compassion to look after those who really need it, how sick is that?
I see where the Public Employees Unions are demonstrating against EU and Govt imposed austerity measures. No alternatives offered. If the EU pulls the props from under Greece the drachma (or whatever the dime is over there) will immediately go t its appropriate level WRT the rest of the world’s currencies. Like the Ghana Cedi.
This new prosperity program will get Greece out from under the thumb of the EuroBankers and into a new era of real starvation.
Surely even the most conservative must feel it is unacceptable in a civilized society for citizens to suffer for simple care. Canada, the UK and several other countries provide universal health care, are you seriously trying to tell us that the richest country in the world, however temporarily embarrassed, can not?
That’s a very interesting way to put the problem because it appears to state the question in terms of principles. But even as clearly stated, it has a few complications. If we are talking about outcomes, the US already has average life expectations and health stats which are comparable, if not better than most Western countries. But then you say, that’s an “average” number, what about the distribution of outcomes? A lot of studies show that certain categories of low income individuals fare comparatively worse in the American system than say in the UK. The UK is an interesting example of a system where there is generally a lower standard of health care delivered with a smaller variance whereas the US system delivers a somewhat better level of health care with a higher variance. People are denied health care in both systems, but they are different categories of people. If you fall outside the NHS guidelines, you are denied health care. In the US, if you don’t have health insurance and have a chronic condition which ER can’t fix, you will suffer accordingly. From a statistical outcomes point of view, both systems deliver a product which produce roughly equal life expectancies.
But I think the question of what a “civilized society” should do also turns on the principle whether or not it should allow people, by their own decisions, to not have health care. In other words, whether we allow people to self-insure. If for example, we could calculate the subsidy required to cover the insurance of the uninsured, would it simply be OK to mail them a check? If they bought insurance then fine. If they decided to invest the money in small business, would be acceptable to deny them health care if they got sick and say, “well you made your choice.”
I think many societies would say you have to have health care insurance whether you like it or not. You have to have car insurance whether you drive on a public road or not. You can’t opt out of the system. After all, if we are talking about principle, the question is which principle we are talking about.
I think there are good reasons to argue both sides on matters of principle. Or we can talk about outcomes.
Chrisvj, I think you are missing the real concern, and that is that the system as a whole is being driven past the brink of survival. That is how this ties in to the Greek situation – what good is it to design a system of perfect justice that is so economically out of whack that the entire society collapses under the weight of it? Demand for health care is theoretically infinite if there is no personal cost to be borne; for example, why shouldn’t I have my own personal fulltime nurse and trainer if this will make me healthier? This could theoretically end with all of a society’s economic resources being poured into healthcare, with all other economic activity ceasing. Obviously any society that gets close to this point will collapse, so equally obviously healthcare availability must be limited in some way.
We really only have two ways to keep demand for healthcare from being infinite: we can limit it by cost, or we can limit it by decree. The first means accepting that some people with financial resources will get better treatment than those without, while the second means that availibility will be limited for *all* by government decree. (meaning certain lifesaving technologies will be banned since they can not be cost effectively given to all – this already happens in the UK.)
An acceptable system is going to be some hybrid of the two; there will need to be some limited level of care available to the indigent, with insurance providing for advanced level of care such as surgeries. But to do this you have to have the political will to admit openly that some people who do not have money are going to die from the lack of advanced treatment, while those with money will live. Chrisvj, I think you are missing the real concern, and that is that the system as a whole is being driven past the brink of survival. That is how this ties in to the Greek situation – what good is it to design a system of perfect justice that is so economically out of whack that the entire society collapses under the weight of it? Demand for health care is theoretically infinite if there is no personal cost to be borne; for example, why shouldn’t I have my own personal fulltime nurse and trainer if this will make me healthier? This could theoretically end with all of a society’s economic resources being poured into healthcare, with all other economic activity ceasing. Obviously any society that gets close to this point will collapse, so equally obviously healthcare availability must be limited in some way.
We really only have two ways to keep demand for healthcare from being infinite: we can limit it by cost, or we can limit it by decree. The first means accepting that some people with financial resources will get better treatment than those without, while the second means that availibility will be limited for *all* by government decree. (meaning certain lifesaving technologies will be banned since they can not be cost effectively given to all – this already happens in the UK.)
An acceptable system is going to be some hybrid of the two; there will need to be some limited level of care avaiable to the indigent, with insurance providing for advanced level of care such as surgeries.
But to do this you have to have the political will to admit openly that some people who do not have money are going to die from the lack of advanced treatment, while those with money will live. The only way to make equal treatment of all to work is to ban certain advanced levels of care for *everyone*, which is why we had all that talk of death panels last year.
Now that I think of it, there is a 3rd choice, and this may be the one we take: this is to defeat every plan, defeat every reform and to simply live with whatever kind of hodge podge broken system we end up with by default. This plan has one great advantage which no other plan has, and which may make it irresistible – no single person anywhere will have to take responsibility for it, and everyone will be able to feel good when they complain about it.
Now that I think of it, there is a 3rd choice, and this may be the one we take: this is to defeat every plan, defeat every reform and to simply live with whatever kind of hodge podge broken system we end up with by default. This plan has one great advantage which no other plan has, and which may make it irresistible – no single person anywhere will have to take responsibility for it, and everyone will be able to feel good when they complain about it.
herb @32:
Perhaps you missed, or don’t remember the post last week on the Portugal, Italy, Ireland, Greece, Spain (PIIGS)situation? They are all using the Euro for thier currency, all have debt to GDP ratios that are very unhealthy, and if Greece goes down, perhaps, so goes the Eurozone and EU.
This could be the tipping point for the European Union to begin coming unraveled. Some think so, most big name journalists and financial commentators, who have no interest whatsoever in maintaining Europe as an economic power…, seem to think the EU will pull through with a tough case of economic pneumonia if Greece defaults or leaves the EU. We’ll see what happens. I’m betting for Greece to disolve in semi-open civil war if the Greek government goes along with German and French austerity demands, or for the Germans and French to bail them out more or less unconditionaly with a bit of window dressing on the Greeks part to allow the Germans and French to save face. I don’t see many other likelyhoods.
“I think many societies would say you have to have health care insurance whether you like it or not. You have to have car insurance whether you drive on a public road or not. You can’t opt out of the system. After all, if we are talking about principle, the question is which principle we are talking about.”
“Many societies” don’t have the American Constitution do factor into the equation. Remember that liability auto insurance (all that is mandated where I live)is not meant for me to protect myself financially; it is mandated so that I can guarantee that others will be protected from the potentially devastating consequences of my lack of financial resources. Nothing in my lack of healthcare insurance is personally damaging to those around me, as they do not need to be protected from my health related decisions as they may need to be protected from my driving decisions.
Furthermore, I can easily avoid the requirement for auto insurance if I wish – I simply can refuse to own and operate a motor vehicle. But I cannot refuse to live.
This is why the health care mandate is unconstituional – in the entire history of America, there has never been a tax that can be levied on someone simply because they live – remember that even income tax can be negated by simply refusing to earn income. Sales Tax can be avoided by raising food yourself, and refusing to purchase. Property tax can be avoided by refusing to own. But no one can refuse to breathe, and this is what the proposed health care mandate taxes.
There is no part of the American Constitution that allows such a levy, and it will be thrown out by the Supreme Court if it is ever attempted to be passed into law.
I am a conservative, and to you guys, a foreigner, and I love your country for all its wonderful qualities and the wonderful times we have had there, but really, you don’t have the compassion to look after those who really need it, how sick is that?
May I pose a question to you? If we are required to spend our money on those who YOU have determined to be worthy of “compassion,” can we not also argue over who WE have determined to be worthy of “compassion?” Can we not argue that spending OUR money on our children or those who WE consider worthy of charity is a better use of resources than what YOU claim they would be?
The idea that slavery is okay when the slaves’ labor is being utilized toward the HIGHER GOOD is an old one. So is the idea that slavery actually benefits the slaves, and that their ingratitude and inability to understand the benefits the rule of their masters bestow upon them is the prime justification for making and keeping them slaves.
Its a Catch-22 situation–the slaves who understand don’t want their freedom and the slaves who do are too stupid to handle it if it was given to them, so for their own good, it won’t be given to them. How convenient for the masters. They are always right. By definition.
Its an attitude that history has shown to be a rotten and evil idea in each and every incarnation it has taken.
Whenever anything that claims to be compassion takes up a whip to threaten you with you can be sure that the face of that “compassion” is merely a mask which hides an ugly monster behind it.
Armageddon Rex, regarding relations between the EU members: Just have a look at this story. This doesn’t mean that a breakup is imminent, of course, there’s still a lot of water left to pass under that bridge.
But they sure as heck aren’t all one big, happy family.
“Greek MPs lash out at Germany over debt crisis”
ATHENS, Feb 18 (Reuters) – Greek opposition lawmakers said on Thursday that Germans should pay reparations for their World War Two occupation of Greece before criticising the country over its yawning fiscal deficits.
“How does Germany have the cheek to denounce us over our finances when it has still not paid compensation for Greece’s war victims?” Margaritis Tzimas, of the main opposition New Democracy party, told parliament.
“There are still Greeks weeping for their lost brothers,” the conservative lawmaker said during a debate on a bill to clean up the country’s discredited statistical service. Chancellor Angela Merkel’s government has so far deflected appeals to promise aid to heavily indebted Greece, despite fears that failure to help Athens could threaten the euro.”
http://www.reuters.com/article/idUSLDE61H1IZ20100218
The United States already has a universal health care program in place. It is called Medicare. Every single working individual and his or her employer together contribute to the program for their entire working life, 2.9% of all wages. Unlike Social Security there is no limit on the amount of wages subject to the Medicare contribution (tax)and applies to anyone making more than $1,700 a year (not exactly rich). It is suppose to be the health insurance policy for the elderly. It is bankrupt. It can only provide coverage by paying below the market rate for health care as well as ration what care is provided. Doctors and patients both hate it. And now they want to have a mandated program for everyone else?? Yeah, right.
One other thing. The VA Hospitals. You know, the ones that are suppose to take care of the miltary vets. And they are run by the federal government. They are a disgrace. My grandfather (WWI navy vet) cried when he was taken to one near the end of his life. His health and spirit went straight into the toilet. We ended up moving him to private care, and surprise, surprise he got better and lived for another two years. A promise made by our nation to take care of those who served and placed their lives on the line not kept. The anger I felt that day watching my grandfather cry because he was being taken to a VA Hospital is still with me, and will be to the day I die. Maybe when liberals can point to the VA Hospitals as an shiny example of what the federal government can do, then maybe we’ll let them touch our health care. Until then, forget about it.
#39 I saw my father-in-law do the same thing. When members of congress and their employees are required to use the VA hospitals for their health needs then I will be the first in line to vote for govt health care. fat chance!!!
wws:
It appears that Germany and Greece are playing chicken at the moment. They both are not really the irressistable force and immovable object. One of them will blink, and after all of the comments and articles, including the one you link to above, I don’t know who will blink first.
This BBC article sums up the current situation yet again:
http://news.bbc.co.uk/2/hi/business/8526736.stm
The problem is that none of the currently proposed solutions will prevent further escallation in some other form. Like I said before, if the Greek government conceedes to German pressure, the ongoing protests will progress to riots in the city streets, with no end in sight.
If, on the other hand, Germany bails the Greeks out of thier current mess, the Greek budget defecit will not magically vanish. Greece will still be unable to sell sovereign debt to raise necessary budgetary funds for next year, and the year after that, etc. If Greece gets a free ride on the backs of stronger EU economies, what’s to stop the other PIIGS from emmulating them.
In anything resembling a really free market, if the EU bails out Greece, EU futures should immidiately go down the toilet as investers flee into Dollars, Pounds, Yen, Swiss Francs, etc. knowing that the entire EU will be dragged into the mud bailing out one PIIGS after another, and taken altogether, with Spain being a particularly large gobbet, that’s a lot of pork to swallow! Even for a lard assesed bEUrocrat in Brussels.
I am a conservative, and to you guys, a foreigner, and I love your country for all its wonderful qualities and the wonderful times we have had there, but really, you don’t have the compassion to look after those who really need it, how sick is that?
Huh? Do you mean as in “You Americans don’t have a ‘Health Care System’?” That is so risible, because we do to have a health care system, and one so good that people from other countries with desperate health issues come here when there is no other resort or recourse. We have been so burdened by having to pick up the defense slack for so much of the free world that we don’t have the means to nationalize our health care.
Also, what is your definition of “compassion?” How compassionate are the British, Canadian, and — most especially — the euthanasia-happy Dutch and Belgian systems? We, on the other hand, look after some 12 million illegal aliens, and we do so without pressuring them into letting their old people die.
To those who keep asking, the question actually is, shall we always offer UNLIMITED FREE care to all who need it?
If not, the question is, how do you allocate it, financially, humanely, and rationally.
The answer is CLEARLY that we do not, because we cannot, afford unlimited free health care for all. We have too much technology, that is far too expensive, to have the government pick it all up. In those places that have nationalized health care, the rationing is by delay. Here it is by money. Is that so wrong?
There are no easy answers.
May I please repeat this?
There are no easy answers.
So, the next question is, do you trust the likes of Obama and Pelosi to come with a single whiz-bang TRILLION dollar program, or do you take incremental steps?
Have a nice day.
The Dutch government has fallen over the issue of continued participation in the Afghan mission. The Netherlands spends 1.6% of its GDP on defense. Australia and the UK spend 2.4%. France spends 2.6%. Germany spends 1.5%. The US spends 4%.
Now theoretically speaking, the Netherlands is in Afghanistan defending the Netherlands by contributing to a common campaign against a terrorist threat. If they opt out of the program, do they also opt out of the coverage? From a statistical point of view the Netherlands is underinsuring itself relative to France and Britain. If it were possible, theoretically speaking, to exclude the Netherlands from the coverage, would it be right to do so? Isn’t the Netherlands somehow a “free rider” vis a vis the French and the Britons? But it is a free rider only so far as it is included in the system. Or should the Netherlands be able to adjust its relationship and choose a level of defense expenditure it feels is optimal based on its assessment of threats?
Is “national security” an international right to which every country is entitled to in a civilized world? Or should it strictly be pay as you go? So if the remaining NATO members find a threat headed for Amsterdam based on a cell captured in Afghanistan, would it be moral to say “we’ll tell you for a fee?” Or should it simply be catastrophic insurance? ‘This NATO policy insures you against 1) full scale Russian invasion; 2) attacks by flesh-eating creatures from other planets or any other circumstance which may require the use of carrier battle groups, nuclear weapons and directed energy weapons. Terrorist coverage may be purchased separately.’
In response the US would probably be denied information on threats coming from the Netherlands unless it paid the Dutch for it. But particularizing defense coverage is something many countries do already by establishing policies whereby terrorist groups are governed under the rule that they are free to conduct terrorist operations against other countries, as long as they do not attack the host. Pakistan does this. The reason why some countries resent “Londonistan” is they view it as a method of buying British domestic peace at the expense of trouble exported to other places. The LET of Pakistan is a good example of how a terror threat can be turned outward. The Indians pay for internal Pakistani peace. This approach lets countries buy security for their exclusive consumption. They may even create a kind of security “pollution” for which it may be argued, a kind of tax should be levied because other parties have to clean up their externalities. In that circumstance, some countries would have to “pay” the International Community (whatever that means) for the right to have a Londonistan in the same way we are expected to buy “carbon credits” to open a car factory. You buy the right to dump on other countries by pursuing luxury security policies at home.
If you treated national defense as an insurance policy against the threat of war you’d find that there are a lot of countries that are not only underinsured but which are implicit free riders. I’m not saying we should change the situation, but the parallels between health care and national defense are obvious once you think of it, yet they are regarded in entirely different ways.
“So, the next question is, do you trust the likes of Obama and Pelosi…”
to coin a phrase, I wouldn’t trust them as far as I could kick them.
http://tinyurl.com/ygdr6h5 “The Euro Isn’t Going To Dissolve, It’s Just Got A Long, Long Way To Fall”
so far it’s the analyse that defines the best the “deal”
but there is worst:
http://bruxelles.blogs.liberation.fr/coulisses/2010/02/catherine-ashton-se-prend-les-pieds-dans-le-tapis-des-nominations.html
I think that Obama making mistakes is beaten by KO
and about the future of Nato, Madeleine albright’s delegation offered Nato on a tray to Russia
http://www.dedefensa.org/article-la_russie_dans_l_otan_l_enjeu_central_22_02_2010.html
To whom ever asked it, I have no problem at all with not everyone having sub-critical health care in a civilized society. If we were a civilized country we wouldn’t have socialist schools and any number of other “progressive” copies of the uncivil Europeans. If you will read Fredriech Hayeks Road to Serfdom you will understand just what a sham collectivism is. It is about stealing my time/wealth to support people who become wards of socialist politicans and who won’t provide for themselves. We have a critical care system now called emergency rooms. They can not turn you away in a health emergency. Long term sub-critical care is the issue and I see no reason why I have to pay for someones other than me and my family.
There are a lot of ways to fix the system we have now; one being nation wide tort reform. Tort/defensive medacine costs us about 25% of our current total. That is BILLIONS of dollars. And there are a lot of other examples, but the plantife bar is the Democraps largest funder. So the corrupt system rules out a practile cost saver.
W:
‘Is “national security” an international right to which every country is entitled to in a civilized world?’
With respect sir, the world isn’t civilized…
Most westerners have been pretending it is since the end of WWII because facing the grim reality is overwhelmingly depressing, and means they need to stop all their feel good wasteful spending on healthcare, education, beautification, and frivolous environmental pet theory damage control and spend lots of money on re-arming their militaries, training their citizens to be soldiers, and establishing decent civil defense.
No one wants the carrousel to stop! Politicians who point out the ongoing head in the sand attitude never seem to get elected to office.
If the Netherlands spends only 1.6% on defense, perhaps we should attack them. Sounds like we could crush them and hear the lamentations of their women for a bargain price, and auction off the farmland and waterfront at a profit. Hey, better we do it, than the jihadis.
–
As far as trust (lack of), my preferred phrase is:
I would not trust them, as far as I could spit a rat.
I don’t know what it even means, but it has a certain ring to it.
In any system that lacks unlimited resources, the available assets will be allotted either by price or a regulatory regime. “Universal coverage” is really an ambiguous term. Does it mean everybody gets seen by a medical practitioner or does it mean everybody gets “cured” or cured to a certain extent?
As I understand it, the current US health care system has people who cannot be seen or cannot be treated over a long term, a percentage which varies, depending on how you calculate it, between 8% to 16% of the population, depending on whether or not you count illegal immigrants and those who could get insurance but haven’t. But the real underlying problem is that many of the resources are used inefficiently, which is a consequence of institutional players — insurance companies, lawyers, medical professionals — deriving monopoly rents from the system.
The main criticism of Obama’s health care “reforms” is that it will increase coverage while aggravating the institutional inefficiencies. This means that while more will be “covered”, the system will act in an even more broken way. But the institutional players won’t care because they make out like bandits now and will make out even better under health care reform. There may be a redistribution of receipts among the bandits, but the bandits will win in either case.
The killer talking point of the “reform” is that it will provide this elusive holy grail called universal coverage which in actuality may or may not provide more people with better care. In reality it might provide more people with worse care or even fewer people with worse care if you look at the actual therapeutic output of the system. But clearly the way to unambiguously better outcomes, however you want to describe it, is straightforward. You have to rid the system of gross inefficiencies.
If you provide more coverage with the current inefficiencies you will get more expensive premiums. This can be creatively packaged as higher taxes, mandatory insurance, or fees between one party and another. That is smoke and mirrors. The inescapable fact is that to cover more at a higher marginal cost means more money. The body politic has the right to do that. It may impose higher taxes on itself to produce greater transfer payments to provide more coverage for low income groups or even if it so desires to illegal immigrants. People can spend their money on whatever they want. They are entitled to buy social peace. If they’re feeling generous they can give gratuities to people for no reason at all because it makes them feel good or more civilized. That’s a valid use of money.
But the taxpayers are currently in a foul mood. Politicians aren’t leveling with them by saying “we can give this 8% or 16% coverage but we have to raise your taxes (premiums, co-payments, excess) to do it”. That would be too honest. Instead, they are saying “we’re going to give you something for nothing” and to prove it they trot out the old shell game.
The logical course, given price resistance, is to find ways to cut health care costs by tort reform, producing more doctors and promoting competition among providers. If, as someone asserted above, the current system pays 25% to lawyers, then simply getting rid of the lawyers would enable the system to reduce premiums and in return enable a corresponding rise in taxes but at no net out of pocket. However that would require real health care reform, which in this setting means institutional reform, not more coverage with the same broken institutions.
But institutional reform is hard because it means taking on the very institutions who are crafting the health care “reform” bill. It’s easier to increase coverage than to fight City Hall.
I suppose this is why I find the debate over universal coverage somewhat unhelpful, not because “universal coverage” is a bad concept, but because it is a misleading concept. The debate isn’t about universal coverage, it is about who gets what. It is ultimately about money. But nobody ever says that. They always says its about the children, the planet, or medical care for all. Yet somehow it is depressingly almost always about the money.
#44 Wretchard
This is not an unexpected development. As has been posited from both sides of the Atlantic, NATO is no longer an alliance. The EU views it as a nascent EU armed forces. The NATO alliance at best is in severe transition. To be honest, what American politician can confidently feel that if the United States were attacked, that NATO would be at our side? And to be even more honest, given the current regime; the NATO signatories under either their old national banners or the new one of the EU have to know that any crisis on their part will find that Buraq cares for them even less than he cares about Israel. And he hates Israel.
Everybody is pretty much on their own. The remaining allies we have in Afghanistan, with the exception of the Australians, will probably be pulling out soon. And I suspect that then we both will pull out shortly thereafter to give the regime the military defeat that the Left has been longing for. The concept of a “shared insurance policy” vis-a-vis terrorism is rapidly becoming moot. More and more, I suspect that you will see a reversion to what you called
But particularizing defense coverage is something many countries do already by establishing policies whereby terrorist groups are governed under the rule that they are free to conduct terrorist operations against other countries, as long as they do not attack the host.
Pakistan and Britain are not the only countries who take this approach. The 9-11 hijackers were based in Germany for quite a while developing the plans. It was interesting that the attacks took place at 0846 hrs.-1028 hrs. EST. It was on or about 1300 hrs. before we figured out who the likely perpetrators were and that they had European connections. We sent out a request to the countries we had tracked them to. 1300 hours in NYC is 1900 hours in Germany. While there is a 24/7 duty in intelligence and internal security organizations, the bulk of the staff, including command, is a day shift operation. This was after hours. Within two hours, we had full dossiers on the lot of them who had been in Germany, including a detailed trace of their movements and activities.
That means that they were under surveillance while they were developing the plans. Further, keep in mind that even with computers, the trick is to know where the information you are looking for is. The information probably was on the cyber-equivalent of the top of the pile because it was found so fast and in such detail. Add in the fact that whatever they had absolutely would have to have been cleared by both the professional and political leadership for release [countries do not hand over intel information without somebody reviewing it first], and the short turn around time makes me fairly sure that they were at least partially cognizant of what was being planned as it was planned. And did not tell us, nor did they stop it themselves. After all, it was not an attack on Germany. Just as France allowed the Ayatollah Khomeini to base his operation out of France, and has no objections to groups operating against Israel such as The Committee for Charity and Support for the Palestinians (CBSP) which has financed HAMAS’ attacks against Israel from French soil since 1990 [after the First Gulf War 1/3 of HAMAS' funds have been funneled through France].
http://islamineurope.blogspot.com/2009/01/france-money-for-hamas.html
However, since the terrorist activities are directed against Israel and not French interests, they go unmolested. Such is the wave of the future, Bellum omnium contra omnes.
Europe has made a career of decrying the concept of an American hegenomy and fought for a multi-polar world. Usually by supporting anyone who is against us. They have won. The problem is that what few periods of peace that Europe and the world has had, has always been during a period when one or another power has had “hegenomy”.
National security is going to be a matter of every state for itself. And that, in the end means the functional end of effective deterence and an increase in the level of violence in the world, especially as nuclear weapons spread.
There are wolves in the world. No amount of saying “nice doggie” will make any difference in their desire to attack sheep. The only thing that will stop the wolves, is a sheepdog, preferably a pack of them. A pack of Bichon Frise won’t cut it,let alone a single one.
We are going to see a period of international re-arrangement that is going to be …. exciting in a morbid sort of way.
Subotai Bahadur
Subotai Bahadur #53: what does a rearranged international order look like? Take Germany, Britain or France: if they fell to a sharia system of governance, what would happen next? Would there be an exodus of dhimmi? Where would they go? If the oppression were graphically posted to the Net, would vigilantes in other countries “get even,” and if so what would the sharia states do within their borders or outside them? Would they invade adjacent states to protect the Muslim communities?
This is all starting to sound like the 100 Years’ War.
The key thing to watch for in the next five or ten years is whether the European project will survive. The Greek debt crisis is an indicator of whether that is more or less likely to happen. Three scenarios suggest themselves.
The first scenario is that the EU manages to survive its difficulties and goes on to gradually become a superpower in itself, much as the US did after the Civil War. In that case, the US will have a diminishing role in Europe which will gradually chart its own and possibly rival course in the world.
The second scenario is that, due to a combination of collapsing demographics, a high welfare burden and historical/cultural issues that the European project basically fails. The continent does not fully revert to the status quo ante, but there is no “Europe” to speak for the core powers. In this situation, France, the UK and Germany will again become distinct and primary voices and rivalries between them may emerge again.
The third scenario is that the European project hobbles along for decades with its member states caught up in a kind of slow motion decline as they pull each other down. In this situation, Europe becomes even more dependent on the US for actual security and it will struggle to maintain peer status with China.
These baseline scenarios are not particularly illuminating. But they do bound the calculus of how the world will react to emergent events over the next decade. In all of these scenarios and for different reasons the world becomes a more unstable place. The old Western alliance will pass away and what remains will be either in a state of flux or gradual decay. I do not expect this situation to continue indefinitely. Some unforseen event will probably impose a decisive character on the trajectory of the 21st century which will either see Europe regain its vitality to an amazing extent or mark its further decline.
The main criticism of Obama’s health care “reforms” is that it will increase coverage while aggravating the institutional inefficiencies.
Amen.
And, that it is presented as a bag of lies, that denies the OBVIOUS.
Which is that we will be forced, willy nilly, to double our out of pocket expenditures for premiums and taxes. Heck, if we WANTED that much medicine now, we would spend for it directly!
So, it FORCES us to spend more on an inefficient system.
But they use the codeword “coverage”, rather than “cost”. And they pretend that “cost” is reduced if you reduce your premium by $1 while paying $10,000 extra taxes.
It’s absolutely foul.
The frequent foreign harping about the lack of heath care in the USA seems to represent people talking past each other from different the perspectives of paradigms. In countries such as Canada it is not legally possible to go into private business providing health care – but despite this fact some people are doing it now. To say you don’t have government provided health care is like saying to an American that you don’t have a highway department. An American would ask how you could have roads without a government department that provides them – and this despite the fact that we do in fact have some privately funded and built roads in our country.
But consider what is happening with space launch in the USA. Private firms do provide the vast majority of space launch capability for the country and this has been the case for well over 20 years, when the government-run Space Shuttle program failed. In no other country is this the case. And yet, the Obama administration recently decided that even this small Federal involvement was too much and has chosen to rely on currently nonexistent private capabilities from providers who have yet to prove they can provide anything. But for health care they are effectively reversing the argument. The reason is simple: They can buy far more votes with free health care than they can with manned space exploration.
“Just as France allowed the Ayatollah Khomeini to base his operation out of France”
At a meeting of the foreign ministers of Iran and Iraq in New York, a decision was made to deport Imam Khomeini from Iraq. On 2 Mehr 1357/24 September 1978, Iraqi troops laid siege to Imam Khomeini’s house in Najaf. The news of the siege angered the Muslims in Iran, Iraq and in other countries. In his visit to Imam Khomeini, Iraqi security chief, had indicated that if Imam wished to stay in Iraq he must give up his challenge and politics, and the Imam had strongly replied that, due to the responsibility he felt for the Muslim ummat, he was not willing to remain quiet nor was he willing to make a compromise. On 12 Mehr, Imam Khomeini left Najaf for the border of Kuwait. The government of Kuwait did not let the Imam in on a hint by the Iranian regime. Previously, there was talk of Imam’s departure for Lebanon or Syria. However
Officials of the Palace de l’Elys?e apprised the Imam of the views of the French President that the Imam must not indulge in politics. The Imam’s sharp reaction and answer was that such limitation contradicts the France’s claim to democracy, and that he would rather, commute between airports, from one country to another than give up his objective.
Giscard d’Estaing, the then French President, has expressed in his memoirs that he had issued order that the Imam be expelled from France, but at the last moment the diplomatic delegates of the Shah, who were despondent in those days, advised Giscard d’Estaing of the danger of a vehement and uncontrollable reaction by the people, and had declared themselves exempt from the repercussions of such reaction, in Europe and in Iran. During the four-month stay of Imam Khomeini in Paris, Neauphle-le ChAteau was the most important news center in the world. Imam Khomeini’s various interviews and his visits revealed to the world, his views of Islamic government, and the future aims of his movement
http://www.tebyan.net/events_history/political_events/2008/1/24/59318.html
let me know if you need links to American policy in Iran with Carter and Zbigniew Brzeziński.
You arranged that Khomeyni fled to Paris, it wasn’t with a request of political asylum, but with a tourist visa, that means that he couldn’t more than 3 months, and indeed his staying didn’t last longer. In the meanwhile the DST chief had proposed to the Shah, if he could arrange the “elimination” of Khomeyni, to which Shah replied that it would make things worst in Iran, and Khomeyni would be seen as a martyr.
Now, Subotai, your method of investigation doesn’t honnor you, a supposed former police investigator ! yeah, tell me rather about a Stasi man, that produce falsh “truths”, you hate us that much !
5/no mo uro: The way I heard it in Texas was: “They’re pissing on my boots and telling me it’s raining”. Probably because it’s easier to piss on someone’s boots than down their necks.
Speaking of fudged numbers, consider the CPI and the unemployment figures put out by our very own guvmint. Both are “adjusted” and both have understated the problem for years.
Hamas finances origins
Great Britain – The Palestine Relief and Development Fund (Interpal)
USA – The Holyland Foundation (HLF)
Germany, Denmark, Belgium, Holland – Al Aqsa Foundation
France – Comité de Bienfaisance et Solidarité avec la Palestine
http://www.mfa.gov.il/MFA/MFAArchive/2000_2009/2003/7/The%20Financial%20Sources%20of%20the%20Hamas%20Terror%20Organiza ( an official source)
and what I post regularly on my twitter:
http://tinyurl.com/yf3kbpa Hamas, halal Quicks même combat: installer la shariah en occident, l’aide au Hamas procède de la dhimminitude
now I’m surfing on different islamists blogs, and you know I can be “direct”
I advise you to look at sites such “creeping shariah”…”Jihad watch” … “Atlas Shrug”…etc. see if there isn’t any ampathy with Hamas in the US too
Test. No submitted comments posted for 2 days. Not that the world is missing anything, just wonderin’
chrisvj, Okay, I deleted my first response, since it consisted mainly of yelling at you in print. But your comment:
is, as someone said, risible. It’s time the uninformed and casually arrogant are called on their baseless moral grandstanding. Others here have replied in measured terms, you ought to know there’s a less measured response just under the surface. If you go around calling other people callous and sick because they don’t measure up to your standards (your standards not for yourself, but for other people), then you better have your facts straight, Bucko. And you don’t.
Yes, there are problems. No, they’re not caused by a fundamental lack of compassion. Hell, they’re probably partially caused by too damn much compassion. If we did tell people who spent their paychecks on flat screen TVs instead of health insurance to die in the gutter we’d probably be better off. More people would would be buying insurance, helping fund improved care and expanded capacity. And the people who couldn’t afford either a flat screen tv or health insurace would have shorter lines and better care. So would everybody. The problem in our health care system, like most of our problems, comes about because of too many free riders. Too many people who prioritize their wants first and expect the rest of us more responsible types to take care of their needs out of compassion. That means we have less resources available for the needs of everybody, because we’ve got to make up the shortfall caused by the freeloaders.
So don’t talk to me about compassion. Not your brand of it leastways, because I’m all too familiar with it. You go worry about your own compassion and your own moral failiings, I’m sure you can find some. You think I need a lesson in compassion? Fine, give me one by your deeds, not your words. We have enough people spewing ill-informed crap about how other people ought to do things. Don’t add to the pile.
Am I being too harsh? Don’t answer that question until you’ve re-read the close of your own post. Think about whether you deserved it or not. Because you closed your post not just with a slanderous insult, but also with one of the lies that leftists have been using to screw everything up for decades. If you really are a conservative, then you’re a duped one. The history of liberal/socialist/progressive catastrophe is one littered with the conspicuously-compassionate aiding and abetting legions of con artists ranging from the merely unscrupulous to the truely evil.
(borrowing from LOTM)File this one under “As civil as I can be at the moement.”
Let’s see if this one works
In 2072, in response to a Freedom Of Disinformation request, White House conversations between President Obama and Chief of Staff Rahm Emmanuel were released to the public.
My new healthcare plan, Rahm
It’s (expletive deleted) beautiful, Mr. President
Taxes, rationing, price controls, Rahm
Your people (expletive deleted) love you, Mr. President
Was watching Fox News the other day, Rahm
(expletive deleted), Mr. President
And that hot blonde was on
They’re all (expletive deleted) hot, Mr. President
Yes they are, Rahm
And often now I wonder, well
How come it is I got Michelle
But to the biz at hand today
These tea party folks won’t go away
(expletive deleted), Mr. President
On top of that my health care plan
The public loves, but if they can
Republicans will kill it dead
And put their own plan up instead
(expletive deleted), Mr. President
And climate change is on the ropes
Just dashing all our fondest hopes
That cap and trade will trash the USA
I talked last night to Karl Marx
And what he said just struck some sparks
We’ll fight them, Rahm, and truly make them pay
They way it looks it’s less than firm
That I will have a second term
(expletive deleted), Mr. President
So ‘twere it done it must be quickly done
Just get our troops to fall in line
And after that we’ll be just fine
Just stomp ‘em, Rahm, and show them just who won
I fear we have no time to waste
We need a crisis and in haste
A big one, Rahm, so big I can declare
That next election be delayed
And once that happens mark it paid
That I’ll be sitting here and you’ll be there
We’ll hit ‘em high, we’ll hit ‘em low
Yes martial law’s the way to go
And then we’ll be in power for all time
Republicans will slink away
And cry and weep and sob and pray
And scream that what we did was such a crime
(expletive deleted), Mr. President
I’m glad we had this little talk
It’s always good to make them squawk
I value your wise words and sound advice
We’ll win this thing, just you and me
And then Republicans will see
That crossing me they’ll weep and pay the price
Just squeeze them, Rahm, and squeeze them hard
Just squeeze those suckers into lard
And squeeze those mothers at Fox News as well
And that reminds me, my old pal
That Megyn Kelly’s on right now
I’ll watch a bit then go home to Michelle
Truly tis a tragedy
that Peter Sellers is not available
to play Inspector Obama.
Universal nationalized heath care coverage mainly yields prodigious waste. About 2/3 of health complaints aren’t ameliorated by medical treatment. They’re either chronic conditions, often self induced or permanent enigmas. It all leads to an endless, overwhelming patient demand. I believe society is better off leaving discreationary health care an individual privilege.
wws @ 36 has it right – an individual mandate is unconstitutional.
It may be within the government’s power under current expansive interpretations of the Commerce Clause to pass such a mandate; even libertarian con law profs acknowledge this. But it is the individual liberties of the Bill of Rights that would cause SCOTUS to strike down the mandate.
RE: price controls
How is this not more apparent to people? Economists agree on nothing BUT that price controls inevitably worsen the situation they were intended to soften. I feel like almost like the Left’s mask has dropped again, showing the ugliness beneath to anyone interested enough to look closely. They did it to drag Obama across the finish line, and they are doing it again now. And they are doing it because they are right about the stakes – once we cross that health care Rubicon, there truly is no going back. Mediocrity until collapse.
Virgil @ 15 – Word.
#54 oMan:
There are a number of alternatives. Wretchard outlines 3, but there are others. Wretchard’s list basically focuses on internal European affairs without the impetus of outside events, other than economics, intruding. Yes, there is the demographic bomb in Europe. A country/region/would-be-superstate that cannot demographically replace itself with a population that is socialized into its own mores and culture will lose that culture. Further, if that culture faces strong competition from an alien culture within its borders or immediately adjacent to it, the alien culture is likely to prevail; socially, economically, and politically.
Ponder the existence of the primary differing and historically expansionist cultures and ideologies in and adjacent to Europe. Any one may prevail, or each may prevail in part. And in the mix there is the possibility of some of the native Europeans, probably not the elites, resisting either.
The situation may be complicated by the use of WMD by any of a number of players in any of a number of locations in Europe; because we can make a reasonable first order assumption that Iran, Pakistan, or North Korea may not be loathe to part with a device or two either in the service of whatever goal crosses their mind or for cash. The fighter pilot’s phrase “furball” comes to mind.
Once again, assuming other than Wretchard’s avoidance of war, there is a serious complication that could concern us, and indeed many nations. In those scenarios where there is full or partial culture shift; there are a number of options where the nuclear deterrent forces of Britain or especially France could come under the command and control of hostile forces. This is an extremely non-trivial strategic problem. It is of sufficient scope as to be far beyond this forum. I have written on the subject elsewhere using open source information, and I assume that others with far more expertise have done more with less public data.
Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the center cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.
Subotai Bahadur
As to “pre-existing conditions”: would you let dead people (or their heirs) buy life insurance on the deceased? Why not, if you let people – or force others to allow people – to buy health insurance for what they’re already sick from?
And how many die from too much “health care”? Maybe the problem is too many go to doctors who make bad diagnoses and give them statins and other things that make them sicker? Is the AIDS science and the cholesterol science and the tobacco science any more “settled” than the global warming science? If everyone had health insurance for free, and no one could sue any doctor for malpractice (NHS) wouldn’t doctors compete to issue idiotic diagnoses and operate at will on whoever they could convince needed it? That’s the way to pile up the fees. Szasz called our problem “pharmacracy”. Perhaps “iatrocracy” would also work.
wws:
This is why the health care mandate is unconstituional – in the entire history of America, there has never been a tax that can be levied on someone simply because they live
Actually, there has been. Spanish colonists extracted a tax consisting of forced labor from “peons” in New Mexico. For that matter, in African colonies, a head tax or “hut tax” was extracted from “natives” to induce them to work in mines, factories, and plantations. This was particularly the case for Belgian Congo and South Africa.
So there is precedent.
The undead healthcare bill is coming back
Michael Jackson – Thriller
“there are a number of options where the nuclear deterrent forces of Britain or especially France could come under the command and control of hostile forces.”
check by yourself who is the most doomed, us or you ?
http://creepingsharia.wordpress.com/category/washington/
http://creepingsharia.wordpress.com/2010/02/20/dallas-cair-director-deported/
Let me tell you that no military was killed in our caserns by a muslim, so our nuclear force is well guarded
you should watch your backs before worrying into what hands our force would finally fell
but I’m not surprised anymore that you can’t watch your own failures.
Besides the men that made 11/9 were Saudi, trained in your own country, so next ?
Thriller–More complete version/w ending
Alexis, I should have been more clear. Strictly speaking, it’s never been allowed under the current American Constitution, enacted in 1787. The examples you give are outside of that, but point to you since I forgot to specify that originally.
Josh @ 17:
Look everyone! Josh just flipped out. He jumped the shark to irrationality. Josh, FWIW, no we do not! Where the heck you been the last X months. Have you not paid attention? The USA is blindingly BROKE! BUSTED! KAPUT! DESTITUTE!
joe buzz @ 24:
You get it and yes they are. Criminals in the WH and running DC for years now.
Here is what so many miss. In the past, the not so distant one, health care was done without “insurance”. You got sick, you called the doc and went to his office or he came to your home. And you paid him cash. I remember us being poor enough he came to the house, gave us meds out of his bag and asked what Mom could afford. She answered honestly, paid him what she could and all were happy. If you needed the hospital, they figured out if and what you could pay, made the arrangements, treated you and all went happily on. The very DAY that the Fed got involved it broke the system. Then “insurance” was invented to offset risk that should be normally born my the individual in any sane system or society. Insurance absolves the feckless from personal responsibility of their own poor choices – in driving, health, etc.
(expletive deleted), Mr. Walt @ 63: Should THAT come to pass the hot lead will fly.
Well now. Time for me to again dazzle you with my ever-modest brillance.
Since we can’t keep the feds out of the game, channel them into something constructive. They buy everybody a traditional policy consisting of 100% coverage with a $75,000 a year deductible.
Do it like GI life insurance. The carriers bid blind on the basis of premiums per 100 people. Premiums are paid, program now in effect. Somebody goes to the Doc, fact is noted, computer assigns that person to one or the other company. If bills exceed $75G in a year’s time, additional bills are paid by the carrier. Since few people will exceed &75G yearly, total cash outlays of the taxpayer’s money should remain (sorta) affordable.
What does this do? It makes all other insurance much more affordable. Why? Because there is a loss limitation to that carrier. With that known factor working, his actuaries can more accurately gauge risk and those other premiums will at least stabilize
and (in some locales at least) decline markedly.
The other thing to do is to twist employers arms and get them to stop paying premiums and substitute vouchers instead. Then, carriers no longer can expect one big check to be given them every quarter. Instead they will have to recruit business and that tends to soften prices ‘siderable.
Fer example: Before I got cut down to part time two years ago, my former employer was shelling out a little over $300 a month to
give me 80% coverage with $3500 deductible, quite a few loopholes in what was considered qualified, and no limit on my out of pocket expenses. Going on line, I found that I could get a 100% PPO with a $5000 deductible and $2500 max out of pocket for $387 a month. An 80% PPO with $5000 deductible was $187 a month. (That increased deductible
over my employer-privided was more than offset by fewer loopholes.) All of this was at age 63. And needless to say, buying this on my own meant that it was fully portable and not tied to any given employer when the next annual premium would come do.
With this two-step, we should be able to say “problem solved” and enhance said solution with tort reform and the elimination of other bureaucratic barriers.
I note that some of the R’s (Hensarling of Texas being one) are pushing for Medicare vouchers to replace medicare witholding from SS checks. Doncha imagine that these Medicare Advantage companies will be more than willing to solicit said vouchers?
BTW: Providers are willing to accept (slightly) reduced rates of reimbursement
if two conditions are met: (1) certain revenue guarantees are in the offing and (2) VERY PROMPT payment is made.
Now ain’tcha glad you bothered to read all this? You may hold the applause—–in the event you were actually about to offer it.
Dave @75:
Clap! Clap! Clap!
Let’s put aside for the moment, the lack of governments Constitutional authority to do any of what you proposed, did you come up with this yourself? If not where did you hear about it? Perhaps I’m just exhausted and need sleep but it sounds like it, or something similar, could work. Perhaps I’m missing something.
The one thing I must insist upon is an opt out, so folks who don’t want any part of it can stay out and not have to pay for it. The other side of the coin being that they can’t show up at an emergency room, hospital, clinic, etc and expect treatment unless they hand over the cash or credit card first!
38. WWS
“How does Germany have the cheek to denounce us over our finances when it has still not paid compensation for Greece’s war victims?”
Well I guess Greece should also sue Russia for their commie civil war. Good luck.
Bottom line is the Greeks, like the Californians spent more than they earned. Why should anyone else save them from the consequences of their actions?
Especially when they won’t even admit what the problem is.
They want the Germans to save them from their own fiscal irresponsibility but then what?
What about next year? And the year after that?
To hell with them, and the Californians for that matter.
Let them learn to live within their means.
ARex/76, say you want an ‘opt out’?
OK here’s you an ‘opt out’.
http://www.bing.com/search?om=0&sig=861D77736A0341448F351FC48B3D5312&q=galveston+county+opt+out&FORM=Z9FD4
(it’s sso simple and clean, and triples the ordinary pension all else equal –but somehow –well, Galveston County used the loophole –and sure nuff Uncle Fedgov closed it the very next year. But anything closed can reopen. Anyhoo, take a look –it’ll drives ya nertz)
Greece is trying an age old trick. It’s hiding debt. It leads to inflation. Inflation leads to more taxes on higher incomes that have less purchasing power. That’s extracting more taxes on less purchasing power (some call it bracket creep others call it theft). That is a was “win-win” situation for politicians.
Universal health care is an illusion or a mirage. Stalin, Lenin, Pol Pot and Hitler tried various form of “Universal Health Care” with disastrous results. The health care was neither healthy nor universal. I would suggest people not fall for so called “Universal Health Care” trick.
I remember health care prior to Landslide Lyndon’s socialism. We paid what amounted to negotiated rates as whomever above quoted. No one went untreated and you lived knowing that if the excrement hit the fan you were responsible for putting your self there.
Then the Elite thinkers in the Unions and other socialist dominated groups that had been braying about socialist ideas put in place national health care under Lyndon in 1964 and immediatly the system started breaking. It was first proposed by Truman in 1948 to copy the British destruction of its economy after the war.
The only way to truely fix the system is to get government out of the equations and let the market work. That appears impossible because of the rent seekers that are beholding to the govt. monpoly of power. We are in a death spiral. I personally would rather see no one have health care than to see a socialized govt. run system. I despise socialism as an idea and means of organising society that much.
Karl Denninger this morning is reporting that some say AIG insured those Goldman Sachs Greek bond offerings, and is speculating that we the American taxpayer will be called upon by our betters in Washington to pay for AIG losses to foreigners just as we did in 2008. We’re talking billions, perhaps hundreds of billions if all the PIIGS are in the same boat.
The inclination is to blame the Goldman Sachs/Big Bank Wall Street crowd for this mess, and they surely deserve a good portion of the blame, but I’ve been wondering; the SEC only allowed the big banks to really leverage up since 2004, while the European Banks, particularly the Swiss Banks, apparently are far more leveraged and have been doing this overleveraging con a lot longer. Could it be that the Wall Street crowd learned this fraudulent game from our socialist betters in Europe, and not the other way around? Have the Europeans as they did in military affairs, recklessly “underinsured” as Wretchard put it, in financial matters as well , with the thought that good ol’ Uncle Sam would always be there to bail them out ?
Betrayal? How about Scott Brown betraying his Tea Party backers by being one of just five RINOs to vote for Obama’s latest $15 billion pork project!
http://dailycaller.com/2010/02/23/scott-brown-disappoints-conservatives-supporters-with-vote-on-obama-jobs-bill/
#82 Captain Gnostic:
Scott Brown never ran as a clone of Ronald Reagan. Everybody, including his Conservative and TEA Party supporters, knew that while he was conservative for Massachusetts; that Massachusetts is far to the Left of most of the country. The important points are that he broke the hold of the Kennedy dynasty and machine, and that he would keep the regime from breaking a filibuster on nationalizing health care.
That, and there was the bonus that he showed that Obama’s electoral support means you lose if you are a Democrat. Which has ripple effects on any future election that may be held. Coat tails can become anchors.
SO FAR, he has not done anything that can be considered a betrayal of his nationwide supporters or his constituents. He well may yet. RINO’s and DIABLO’s are the majority of the Institutional Republican party and the pressure to conform with the collaborationist tendencies of that party are immense. In which case, he has to face the voters again very soon if we have free and honest elections, and he will be subsumed as part of a larger problem if we don’t.
His election was an early skirmish in the larger war to restore constitutional government. In this war, we are at the stage of winnowing out the garrison leaders -vs- the wartime leaders. It is too early to decide, but people are watching.
As someone whose internet handle came from being described by a Captain as “being to the Right of Genghis Khan”, this Conservative does not feel betrayed yet.
Subotai Bahadur
Unsk
Banking was and still is the Anglo-saxons’speciality, ie Wall Street, London City
#81 Unsk:
Gonna try this again. The first time I tried to post it, either PJM, the Interwebtubes, or my ancient machine went awa’ w’ the cyber-fairies.
——
I heard an interesting proposal of how they want to deal with the Greek problem. Keep in mind that it may well be a trial balloon.
The IMF [using US funds] will “loan” Greece enough to cover its budget problem. This will give cover for the EU to give a “loan” that is enough for them to try to take credit for things if a miracle happens and it works, and to limit their exposure if it does not.
This has a number of advantages for all.
a) Greece is no longer under immediate pressure to make drastic cuts and can put off the problem for another day. If a miracle does happen, they are good. If not, at least for a while the governing elite is not at risk of being held responsible through the mechanism of civil disorder. Something about lamp posts and/or hemlock. I more than half-way expect that Greece will then increase social subsidies to compensate for the civic distress at the past suggestion of possible cuts.
b) If the miracle does not happen, either the process gets repeated, or if it does not then the villian is not the EU, but rather the evil IMF and American bankers. Win-win for Greece and the EU.
c) Once a precedent has been set, either the same process is used to bail out the rest of the PIIGS, or the blame gets placed on the evil Americans again. Another win-win.
d) Would Buraq Hussein Obama go with this? Quite likely, because the costs would be borne by the American taxpayer, who he has nothing but contempt for, and it would bail out Goldman Sachs, which is the real employer of that which he is pleased to call his economic team.
Something to watch, but keep in mind that the PIIGS are in fact just the leading edge of problems in the Eurozone. I have mentioned the Baltics and Eastern Europe before.
I am neither an economist nor a broker. While I have some concept of macro and micro economics [which is more than 90+% of the world's population has] I am far from an expert. But looking at this installment of a series on the debt exposures in the EU to the functionally in depression Baltics and Eastern Europe. When going through this, I commend to your attention the chart showing the percentages of GDP of bad loans that Austria and Belgium have. If in an inflexible single currency zone, government bonds and fiscal imprudence can bring things down like a house cards just coming out of Greece; what happens when Austrian banks have loans of up to half the Austrian GDP go non-performing? There are a lot of problems that have to be wrung out of the world economic system, and it is going to hurt us all. The more so as we keep trying to postpone it for small increments of time at greater cost.
http://tinyurl.com/yehcdyr
Subotai Bahadur
Subotai, I wonder if with politicians like Scott Brown it will be a slow death of a proverbial thousand cuts. Someone willing to back this “Jobs” boondoggle, Mass. bloated Romneycare, and is pro-Choice will never knife you in the chest. Watch your back and keep your guard high, for Brown has shown that Obama no longer needs Democrats like Ben Nelson to pass his pork.
MC @ 84…Banking…Modern European banking, invented in Italy (Medici’s) and practiced as an article of faith in Switzerland. Anglosphere prominence is strictly related to the size of the economies.
Can’t blame this one on us.
@ 83 DIABLO? ‘Splain me.
Marie, I thought the Swiss were the Bankers of Europe. At least they are in the “European Heaven and Hell” joke. The version I’ve heard left the Greeks out:
What role do the Greeks play? Perhaps they’re the storytellers in both places, just different stories. The Oddessy in Heaven, modern Greece’s government balance sheet in Hell.
And as in most things, America is something of a composite of it all.
Bob Murphey – of course you’re obectively correct, but I think you’re missing the real point, the reason I posted that article. It wasn’t to say that either side is right or that the Greeks should be bailed out; the point is, inside the EU *today* the member nations are starting to go for each other’s throats in the most ugly way possible. The Greek politicians I quoted there basically answered Germany’s demand that they balance their budgets by getting up on the table and dancing while they sang “Nazi Nazi Nazi!!!” Doesn’t take a lot of imagination to figure out how *every* German felt about that! And how much do you think that made Germany that much more eager to help them with their problems?
Times really aren’t that bad yet. If relations inside the EU are already this nasty, how do you think they’ll be when things do get bad and some countries DO have to suffer? Do you think the EU can stick together under that kind of strain?
#87 michaelhoskins:
@ 83 DIABLO? ‘Splain me.
Democrat In All But Label Only
#86 Captain Gnostic:
May be, may not be. The thing is, we are reduced to dealing with political matters and the survival of the Constitution on a field expedient basis. We do not have time to worry about long term until we get past next January. There is a definite likelihood that honest and open electoral politics will no longer be applicable in November; at which point who sits in Congress will mean no more to us than who sat in the Верховный Совет meant to a resident of Yakutsk in 1948.
If the system is allowed to function, and checks and balances become a reality again; then we deal with long term.
Subotai Bahadur
wws, you’re right, it is rather pathetic to watch this. The same thing will soon be happening in California (if it isn’t already) with various groups slandering one-another. Expect a lot of people to be called racists…
What’s happening in Europe of course is that the politicians are trying to dodge blame for their idiotic policies. Either pinning the blame on someone else or, failing that, just distracting people by pushing unrelated emotional hot buttons. What they aren’t doing is trying to actually fix anything. Kick the can down the road a bit, distract people from the problem right now while hoping some miracle solves the problem for them. Or, failing that, establishing a marker now to blame someone else later. “It was those Nazi German’s fault for blah blah blah…”
Same thing in California. Nobody in office is taking on the Prison Guard union. Nobody in office is trying to defuse the pension bomb before it goes off (or, if it’s already too late for that, at least sheltering whatever valuables can be sheltered from the blast). Nobody is trying to solve the problems, they’re just trying to score political points by shifting blame.
It’s the worst sort of leadership. It goes beyond incompetence and deep into pure and simple evil. It’s the sort of thing that justifies literal tar and feathering. Instead of trying to solve problems, the current leadership – all across the West – is compounding everything out of power lust. Not only are they making the eventual bust worse by continuing their pork, their attempts at blame-shifting are setting up the conditions for violent conflict when large groups, duped and exploited by the con men, go at each other’s throats in the collapse.
Agree with both wws and JMH above.
Can’t imagine why any German taxpayer would want to spend a dollar or a euro or a deutsche mark on Greek debt. Seems like there has to be good odds that the Greeks get a letter one day explaining to them that they are now former members of the EU.
We should actually be hoping for that, as the day approaches when California, Illinois, New York and other similarly indebted states appeal for the same treatment. I think that it would be in all of our interest if Greece has to pay the price for its profligate spending. I really hope the Germans and the French come through here, but I just realize what I wrote and have a sinking feeling that such a clear outcome won’t come to pass.
« Comment est-ce possible qu’un établissement financier vende un produit et parie ensuite sur sa mauvaise performance ? » ie Greece
« Comment est-ce possible que Mr. Alan Greenspan, président de la Federal Reserve de 1987 à 2006, gardienne des taux d’intérêt américains, puisse être dans un premier temps l’ange gardien du crédit immobilier américain, et devenir ensuite dans un second temps – quand il a échoué dans sa tâche – le conseiller d’un hedge fund, Paulson & Co, qui a gagné 23,5 milliards de dollars en pariant sur l’effondrement de la valeur des titres de ce même crédit immobilier ? »
parce qu’on peut gagner beaucoup d’argent en vendant cher de la camelote, et qu’on peut aussi gagner beaucoup d’argent en s’assurant ensuite contre les dégâts provoqués par cette camelote. Beaucoup d’argent dans un sens, beaucoup d’argent dans l’autre sens.
http://www.pauljorion.com/blog/?p=8421
uh, the dirt was/is washed inside the anglo-saxon family
michaelhoskins,
but when the Medicis invented the bank system, the rules were clear
I still remember the link that Habu brought here “the secrets of the federal Reserve”
how Golman sachs, Paulson von Schöeder…etc were and still are the names that count in Wall Street and London city
http://www.barefootsworld.net/fedsecrets_00.html
What then?
If Germany & France stop sending subisdy checks to Greece and offer no discounted debt…
What will Greece do?
ballance their budget?
Keep printing checks?
what will the crash look like? Who picks up the pieces?
Assuming no Federal bailout, what will the California crash look like? and then what happens? Who picks up the pieces?
I have a strong suspicion as to the core reason that the EU members are having so much trouble saying “No” to Greece, even though they know that they should and they know that their people are demanding it. If they refuse to prop Greece up, Greece simply defaults on all of it’s bonds and other debt obligations. This isn’t actually a bad option for Greece, since although they would have to live within their means, after a default they don’t have any more debt service to worry about and they probably could manage, plus they would have a good reason to convince everyone that the cutbacks were unavoidable.
It’s hard to justify cutbacks to the voters when billions are being sent outside the country every month just for interest payments – a problem coming soon to a country near you, btw.
So since this is actually a pretty reasonable solution, and since it is probably going to happen anyways before too long, how come the EU is so scared to stand back and let it happen?
Ah, here’s the rub, and the true key to the problem: the vast majority of those bonds and debt obligations are held by EU Banks. They hold so much, in fact, that quite a few of them will go bankrupt and need to be bailed out if Greece defaults. It’s the old story – owe the bank $100 and can’t pay, it’s your problem, owe the EU Banking system a couple hundred billion or so and it’s the EU’s problem.
So, as long as bailing out Greece is cheaper than having to bail out all of their major banks which will fail when Greece defaults, then it makes economic sense for the EU to bail Greece out no matter how humiliating and painful it is to do that.
http://www.guardian.co.uk/business/2010/feb/11/greece-debt-france-switzerland
“France and Switzerland have $79bn (£50bn) each of exposure to Greece, according to American-sourced data from the Bank for International Settlements analysed by the Swiss bank UBS. Germany’s exposure is $43bn.”
(regarding Marie Claude’s remark that the French were not particularly skilled bankers….)
“The French bank Crédit Agricole was singled out by analysts at the research firm CreditSights as being particularly exposed. “It owns Emporiki Bank in Greece, which has been floundering away, and has about €23bn in loans there,” CreditSights analysts said.”
“The collective exposure of the banking systems to the Pigs is $2.9tn. The bulk of that exposure is located in the banks of France, Germany and the UK,” the UBS analysts said. “The exposure is particularly concentrated in the French and German banks, which have 24% and 21% of their foreign total claims harboured in these countries. This is one reason why France and German are so quickly mentioned as countries likely to support or participate in a bailout.”
wws, but if France don’t want to rescue the mediterranean club ? according to this article, Germany is controlling EU since the beginning of the euro story, the problem isn’t that it has no means of bailing out Greece, but rather the high image of EU as a place worth of investments by foreign enterprises, banks…
http://www.speroforum.com/a/27176/What-will-Europe-do-if-Greece-should-fail
interesting article
according to this article, one would forecast that the whole thing will end badly in the long course, as Germany directs its economy like a war strategy against its own neighbours, donc, retour au chacun pour soi, et peut-être une autre guerre avec l’Allemagne ! cette fois-ci nous avons les armes et les soldats motivés.
visitor @ 94: Assuming no Federal bailout, what will the California crash look like?
Whitman for Governess ad says:
http://www.flashreport.org/blog.php?postID=2010012514115921
Vis @ 94. I suspect it will look a lot like those fat UK chicks floundering in the street after an all nighter at the pub.
If I could figure out how to take care of my family and opt out of this CF. Gone in sixty seconds.
The cover of Pink Floyd’s “Animals” featured a pig flying over Battersea Power Station in London. Right next to that, the US is building our new $1 billion embassy, complete with a moat to keep all the Muzzies out. Thoughtful diplomats remember the 1979 Islamic Revolution in Iran.
I have said it before and continue to believe that this economic downturn will bring war back to Europe.
You need equipment to fight a war. Maybe the European nations who go to war will stop trying to arrest Americans as war criminals and ask the United States to kindly provide the customary logistics for their mobilization. That will put Obama in a bind because if he sends C-17s loaded with tanks to the France-Germany bloc, it will show favoritism and be unfair to the UK-Italy-Spain bloc.
http://tempsreel.nouvelobs.com/actualites/economie/20100223.OBS7823/comment_sortir_de_la_crise_touraine_repond.html
the crisis will cause the death of the “social” (video in french)
speaking of california…here’s a bunch of a-holes at an “immigration” rally LAUGHING openly at reciting the pledge of allegiance.
http://www.youtube.com/watch?v=XBbsEnTf7C4
Oh marie claude, I had to translate your phrase and that is quite hilarious! Of course I favor dark comedy.
Speaking of dark comedy, there is a connection to Pink Floyd’s Pig, Teresita. Roger Waters played at the Coachella concert in California a couple summers ago, my daughter went. One of the features of the concert, held in the desert a ways out of Bakersfield, Ca, was one of the famous inflatable pigs which was brought to float above the concert while Roger Waters played. They unveiled it, let it float up above the crowd as Roger Waters began to play – OOPS! none of the stoners holding the ropes connected to the pig had been told to hold on to them, and no one bothered to tie it off, so the quite expensive inflatable pig just sailed off into the wild blue yonder! Roger Waters was pissed – he had paid for it himself. They put out a reward, and finally found the torn remnants of it in a mountain range a couple hundred miles away. Apparently it had risen on the wind until it burst.
I’m sure there’s an analogy in there somewhere, but I’ll rest with the amusing knowledge that my daughter snapped a picture of the Giant Pig as it sailed off on it’s voyage to nowhere.
and now the gold bubble
http://www.youtube.com/watch?v=S3jKsHJqOJw
from Keiser report
@105
Why should I regard Russian state propaganda as anything but?
When pigs fly…
I want the umbrella franchise…
tomw
@ 106
de-merde-arium !
Mr. Elias Sakellis – Executive Director, Goldman Sachs International et Mr. Jim Karp – Managing Director, Financing Group, Goldman Sachs, “bizarrely” this Greec minister attended this convention :
http://www.capitallinkforum.com/shipping/2010athens/main.html
olright, Greece could easily pay its debt if its offshore registred ships had paid taxes
Greece could easily pay its debt if its offshore registred ships had paid taxes
Not wanting to get into a major battle over this, since I am just speaking off of the top of my head, but I think that world economic conditions are one reason that they are not getting the registration taxes.
Privately owned ships are registered by the owners under flags of convenience based on cost and regulations imposed. Panama, Liberia, Greece, Malta, and a few other countries have a) low taxes, b) low standards of required ship maintenance and safety features, and c) low labor standards as far as pay and working conditions.
Right now, the shipping industry is in the pits along with the rest of the world’s economy. If international trade is down, ships are not hauling goods and not even making their fixed costs. Even the big companies are hurting, the smaller ones are dying.
There used to be some really big mothball fleets near Malaysia of merchant ships that were in storage. I haven’t checked recently, but I bet that they are full.
If a ship owner fails to pay his registration taxes, the worst that is likely to happen is that his registration will be revoked. He can re-register in Malta, Panama, or Liberia probably for less than Greece charges; and if the ship has no customers he would do best just leaving it tied up and unregistered till it is needed.
The only coercive recourse I can think of that Greece would have would be to impose a tax lien on the title to the ship, and seize it. That is not as profitable as it would seem. You have to find the ship anywhere in the world. You have to get a force sufficient to seize, and possibly sail, the ship to wherever in the world it is and take it. Then when you have it, it has very limited value [even the scrap market is down] and you are stuck with the fixed costs for as long as you hold it, losing money.
Loss of the asset would harm the owner and you can pretty much guarantee that once the process starts, shipowners will be shifting registrations out of Greece as fast as they can [which is real fast]. At which point, lien seizure becomes an act of war on another state’s registered and flagged vessel.
I’m not saying that Greece is not owed the money. However, collecting it may cost more and be more trouble than it is worth. And I also have doubts that the delinquent amount is anything close to the 53 billion Euros that they need. There are about 2300-2400 foreign vessels registered in Greece. Most are not delinquent. To meet the deficit, they would have to all be delinquent and they would owe an average of 22 million and change Euros each. 22 million Euros per ship per year might be considered a bit much to fly the Greek flag, and the numbers are almost surely less by orders of magnitude.
Certainly collecting the delinquent amount would help, less in the amount than in being able to show that there is a dependable income stream. But it would be far from enough to pay Greece’s debts.
Subotai Bahadur
greek merchant marine is like international finance, it has its paradises
“This organizational scheme was geared towards the avoidance of taxes and various other claims, as well as the mineralization of legal problems”
http://www.rieas.gr/index.php?option=com_content&view=article&id=24&catid=17&Itemid=74
These greek ships owners seem very tied to their greek origin, so why not helping their contry with their influent relations in finance and insurance domains