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Monthly Archives: June 2012

Bret Stephens’ last two columns at the Wall Street Journal denote a welcome elevation in America’s public discourse about foreign crises. Here are two excerpts, one from a June 25 note titled “Who Lost Egypt?”:

Who lost Egypt? The Egyptians, obviously. This was their moment, opportunity, choice. They chose—albeit by a narrow margin—a party that offers Islamic stultification as the solution to every political and personal problem. By the time they come to regret their choice, they won’t be in a position to change it.

Stephens also takes to task the Bush and Obama administrations for fostering illusions about the deposed Hosni Mubarak government and the Muslim Brotherhood’s democratic proclivities, respectively.

And from his June 18 offering titled “The Decline of Democracy:”

Democracy is the worst form of government, except for all those other forms that have been tried from time to time. Everyone knows who said this, and everyone thinks it’s true. But is it, really?

After last weekend I’ve begun to have my doubts….Then there’s Greece, which also had an election over the weekend. The Greeks are supposed to have made the “responsible” choice in the person of Antonis Samaras, the Amherst- and Harvard-educated leader of the center-right New Democracy party. Responsible in this case means trying to stay in the euro zone by again renegotiating the terms of a bailout that Greeks cannot possibly repay and will not likely honor….Should anyone be surprised that democracy is having such a hard time in the land of Pericles? Probably not—and not just because Greece is also the land of Alcibiades. Despite its storied past, modern Greek democracy, like much of modern European democracy, is of a post-liberal variety. Post-liberalism seeks to replace the classical liberalism of individual liberty, limited government, property rights and democratic sovereignty with a new liberalism that favors social rights, social goods, intrusive government and transnational law.

Egypt displays pre-liberal democracy and Greece post-liberal democracy, and “both are rotten,” Stephens asserts. The mere form of democracy, he argues, is not sufficient if it is corrupted with the wrong sort of content.

The manifest failure of the Arab Spring, which has brought the Muslim Brotherhood to within striking-distance of state power in the most populous Arab country, has finally forced a reevaluation of our simple-minded pursuit of democratic norms, and Stephens’ recent entries are thoughtful contributions to the new national debate.

Another critical element in the new national debate is the renewed emphasis on demographics. Nicholas Eberstadt and Apoorva Shah review the sudden implosion in Muslim fertility rates in the June issue of Policy Review. This sheds light on the inherent failing in the Muslim world: traditional society breaks down once it encounters modernity. Countries that fail to produce a new generation are unlikely to formulate a rational view of their own self-interest by any means, democratic or not. ”The great and still ongoing declines in fertility that are sweeping through the Muslim world most assuredly qualify as a ‘revolution’ — a quiet revolution, to be sure — but a revolution in which hundreds of millions of adults are already participating: and one which stands to transform the future,” the authors write.

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Doubly Wrong on Wagner in Israel

June 26th, 2012 - 6:16 am

It was disappointing to see Jewish Ideas Daily, one of my favorite websites, defending the notion of Wagner performance in the State of Israel. The composer’s deep association with Nazism has kept his music off the concert stage since the founding of State of Israel, despite occasional attempts to reverse the unofficial ban. Recently, Israel’s beleaguered Wagner Society twice failed to obtain a venue for a “semi-private” concert of Wagner’s music, whatever that might mean. Tel Aviv University and the Tel Aviv Hilton both cancelled the Wagner Society.

“The latest attempt to perform Richard Wagner’s music in Israel has ended in farce, deceit and discredit to art and nation,” wrote the novelist and musical amateur Norman Lebrecht in England’s Jewish Chronicle, reposted in Jewish Ideas Daily. Those are strong words for an issue that evokes deep anguish among Israeli Jews, and with good reason. In August 2011 I discussed the substance as well as the hype of the Wagner ban at Tablet magazine, concluding–with trepidation and reluctance–that the Israelis are right to suppress Wagner’s music, even though there are strong arguments against the ban.

Lebrecht quotes the eminent conductor Daniel Barenboim in support of Wagner performance. One problem is that the Israeli left has made the issue of Wagner performance a battering-ram against the whole concept of Israeli national identity. As I wrote in Tablet:

Barenboim is Wagner’s most passionate apostle with an Israeli passport (though the conductor also claims citizenship in “Palestine”). For years Barenboim has linked Israel’s informal ban on Wagner performance to the occupation of the West Bank, which he likens to the Nazi occupation of Europe. In a January 2005 speech at Columbia University titled “Wagner, Israel, and Palestine,” Barenboim excoriated the Zionist impulse that leads Israel to defend itself against cultural as well as military foes, arguing that peace will come only when Israel drops its defenses against both. The speech was a memorial to the late Edward Said, the Palestinian rejectionist who had arranged for Barenboim’s “Palestinian” identity papers. In Barenboim’s view, Israel should embrace the composer who wrote the theme music for the Third Reich, just as it should embrace Arab extremists who learned their anti-Semitism from the grand mufti of Jerusalem’s pro-Hitler wartime broadcasts from Berlin.

The conductor for the recently cancelled Wagner performances was to have been a Barenboim protege, Asher Fisch, the chief conductor of the Israeli Opera. As it happens, I know Asher; our daughters were in school together, and we shared a few meals over the years. He is a brilliant conductor who led a distinguished “Rigoletto” at the Metropolitan Opera in New York some years ago, as well as Wagner cycles in Seattle Adelaide, and other important venues. I wish we could get him to New York to replace Fabio Luisi at the Met. It pains me to take issue with Asher’s elevated artistic judgment, but I think that he is doing the wrong thing in this particular case.

There is a deeper problem than the symoblic use of the Wagner issue to attenuate Israeli nationalism. And that is the character of Wagner’s music itself. Wagner gave sensuous form to the self-destructive narcissism that infiltrated Western culture at the end of the 19th century. His compositional brilliance serves the culture of death; it negates everything that Judaism and its daughter religion, Christianity, affirm. Yes, there were many Jewish musicians who performed Wagner, and there are plenty of Jews who liked Wagner, including Theodor Herzl, the founding father of Zionism. Yes, one needs to know Wagner to understand Mahler, as Mr. Lebrecht observes (although personally I find Mahler a windy, bathetic, self-pitying bore). I agree that these matters require attention; in a review of the Met’s new Ring cycle, I append a short music appreciation class on Wagner’s musical sleight-of-hand.

There are many good reasons for the Israelis to sanction the public performance of Wagner. But there is also one very good reason not to. Again, from my Tablet discussion:

Art, nonetheless, does not reside in the clouds of Mount Parnassus. It has consequences in the real world in which ordinary humans live and suffer, and society in extreme cases must draw a line. Wagner may not have been the only anti-Semite among the composers of the 19th century, nor even the worst, but he did more than anyone else to mold the culture in which Nazism flourished. The Jewish people have had no enemy more dedicated and more dangerous, precisely because of his enormous talent. In a Jewish state, the public has a right to ask Jewish musicians to be Jews first and musicians second. With reluctance, and in cognizance of all the ambiguities, I think the Israelis are right to silence him.



Two hundred years ago Sunday, Napoleon crossed into Russian territory with the largest army the world had ever seen; the following December 16th, the main body of his force counted just 16,000 men as it crossed the Russian frontier on the way out. ”Am I a Napoleon, am I a Mohammed?,” muses Dostoevsky’s murderer Raskolnikov in Crime and Punishment.  What linked the legendary founder of Islam and the author of a legendary military catastrophe in Dostoevsky’s mind, I think, was this: charismatic leaders launch wars of total attrition by offering advancement to ambitious young men with nothing to lose. Wars of this sort continue until there aren’t enough young men left to put into the ranks. Frenchmen and Americans have fought this kind of war with suicidal abandon; all the more so should we expect such wars of attrition to characterize the Middle East during the next generation.

The strangest thing about Napoleon’s Russia campaign is what happened afterwards: despite the catastrophe, Napoleon was twice able to raise enormous armies, the first in 1813 (when a coalition of his former allies ganged up on him at Leipzig), and again in 1815, after he returned from his brief exile to Elba and lost at Waterloo.

As I report in a “Spengler” essay this morning, enthusiasm for the jumped-up Corsican lieutenant of artillery remained undiminished until there simply weren’t enough Frenchmen left to die for him. Roughly 30% of the military-age men of France died for Napoleon (and very large numbers of volunteers from the rest of Europe). After France replaced its lost generation, it bled for his nephew Napoleon III. Human beings will throw away their lives with abandon for the chance to jump a few steps up the social ladder.

The same proportion of military-age men died for the Confederacy during the Civil War, which fought until there simply weren’t enough men to replenish the ranks. 30% seems to be the critical number (although the Serbs managed to lose fully  half their military-age men during the First World War). When you approach the one-third marker, the available pool of manpower diminishes rapidly. As I observe in Asia Times:

Like the Confederacy of 1865, France was bled dry by 1815 after absorbing losses on this staggering scale. It takes sustained heroism and resilience to slaughter a whole generation, and this heroism feeds on the hopes and dreams of ambitious young men. Napoleon offered his recruits the opportunity to rise above the ruins of Europe’s old aristocratic order. The men of the South fought – as Professor Robert May argued persuasively in his 1973 study The Southern Dream of a Caribbean Empire – for the chance to get land and slaves, even if only a tenth of them already owned slaves when the war erupted.

There was something distinctly Napoleonic about southern ambitions. If the Corsican artillery officer could become the emperor of Europe, then every corporal could entertain dreams of a field commission and entry into Napoleon’s nobility. The poor Scots-Irish farmers who fought for the Confederacy hoped to join the pseudo-aristocracy of slaveholders. And for these ambitions, both fought with nearly suicidal tenacity.

Again, the decisive consideration is that the men of France as well as the men of the Confederacy stopped fighting not because they were tired of fighting, or because their odds of winning were negligible, but rather because there simply weren’t enough of them left to put up a fight. Evil causes as well as good ones can draw on the impassioned enthusiasm and capacity for self-sacrifice of a whole generation of young men.

“Am I a Napoleon, am I a Mohammed?” Raskolnikov’s question should remind us that in the Christian West, indeed in the United States of America, we have encountered generations willing to die in unlimited numbers in the service of an evil cause. The memory of Napoleon no longer persuades Europeans to commit mass suicide. The memory of Mohammed, tragically, is a different matter.

Egypt’s newly-elected Muslim Brotherhood president Mohammed Mursi may cement his victory with a coup against the Egyptian army, according to an analyst at Egypt’s Al-Ahram Institute quoted in today’s Gulf News:

 “Mursi will likely face resistance from state institutions mainly inside the army and the police,” said Sobhi Assila, a political analyst. “However, Mursi has a full team inside the Brotherhood who will assist him in running the country’s affairs to overcome this expected resistance. This may turn Egypt into another Gaza,” he said, referring to the Israeli-besieged Palestinian enclave ruled by Hamas.

Hamas, the Palestine chapter of the Muslim Brotherhood, seized power from the Fatah-led Palestine Authority in the Battle of Gaza in June 2007, following its electoral victory in the 2006 Palestine elections. There haven’t been any elections in Gaza since then.

Egypt’s military dissolved the country’s Islamist-controlled parliament and awarded itself new powers at the expense of those of the president. President Mursi’s supporters, at this writing, remained gathered in Cairo’s Tahrir Square, promising to remain there until the military  reinstates the dissolved parliament and abandons its attempt to infringe on presidential powers.

Before Mursi’s victory was announced earlier today, Egypt’s secular parties denounced the United States for intervening in the elections in support of the Muslim Brotherhood. As Al-Ahram reported in its English edition today:

The US Embassy in Cairo refuted on its official Twitter account Sunday circulating claims that the US administration was backing the Muslim Brotherhood’s presidential candidate.

On Thursday, US Secretary of State Hillary Clinton called on Egypt’s ruling military council to fulfill its promise and hand over power to the “legitimate election winner.”

Some interpreted that statement as a US endorsement of the Muslim Brotherhood’s Mohamed Mursi who is competing against Hosni Mubarak’s ex-prime minister Ahmed Shafiq.

US Embassy denied all claims that the US administration asked the military council to hand power to the Muslim Brotherhood.

“We do not support any individual candidate or group; we support the democratic process,” said the US Embassy Twitter admin, underlining that Clinton’s was nothing but an expression of support for democracy.

Liberal and secular parties condemned what they saw as “US intervention” in a press conference Saturday, asking the Muslim Brotherhood to break its silence and refuse any attempt at US intrusion in domestic affairs.

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Did a Saudi Ex Machina Save Egypt?

June 20th, 2012 - 5:16 am

UPDATE: At National Review, Daniel Pipes reads the military takeover as a “palace coup” by military leaders who unloaded the unwanted Mubarak dynasty and used the Tahrir Square protesters as well as the Islamists to consolidate their own power. Daniel’s take is not inconsistent with the reading below. I hope he’s right, and that the chances for an Islamist takeover are narrower than I feared. But I am still concerned about the possible disintegration of the Egyptian economy and the growth of Muslim Brotherhood power on the street.

Saudi Arabia just may have pulled America’s chestnuts out of the fire.

Just before Egypt’s military restored its power earlier this month, Saudi Arabia gave the beleaguered country just enough aid to keep the economy afloat for the time being. On June 2, the Saudis put $1 billion into Egypt’s foreign exchange reserves and bought $500 million in Egyptian government bonds on June 4. And on June 8, the Saudis announced that Egypt could use a $750 million credit line to import fuel ”based on the severe oil-products shortage faced by Egypt,” according to an emailed statement from the Saudi Embassy in Cairo.

These gifts are droplets compared to Egypt’s $20 billion hemorrhage of foreign exchange reserves since the fall of Hosni Mubarak in early 2011, but of critical importance. As the Saudi statement noted, a severe shortage of diesel oil threatened, in turn, to reduce food supplies, and spot shortages of bread were reported in May. The Muslim Brotherhood took advantage of critical shortages to expand its power on the Egyptian street, as I reported in the Asia Times on May 1st (“The horror and the pita”). Saudi aid gives critical leverage and credibility to the military. On June 16,  Egypt’s military ordered the dissolution of parliament after the country’s Supreme Constitutional Court declared invalid the election that returned a three-quarters majority of Islamists.

The Saudi press meanwhile supported the military’s candidate in last weekend’s presidential elections. “In a series of editorials published over the past few weeks, a clear bias can be discerned for Ahmed Shafiq, a secular independent and former Mubarak-era prime minister. Mohammed Morsi, the Muslim Brotherhood candidate, is presented by Saudi opinion makers as a menace to Egypt’s civil character and political stability,” Elhanan Miller reported on June 17 in the Times of Israel.

The Muslim Brotherhood competes with the Saudi royal family, offering a Leninist vanguard party model of Islamist leadership in opposition to the corrupt Saudi monarchy. Violent demonstrations against Saudi installations in Egypt nearly collapsed Egyptian-Saudi relations in April, as I reported at the time:

Egypt’s national tragedy took a turn towards farce April 27, when Saudi Arabia closed its embassy and several consulates after demonstrations that “threaten the security and safety of Saudi and Egyptian employees, raising hostile slogans and violating the inviolability and sovereignty”, according to a Saudi statement. Saudi Arabia and other Gulf States were supposed to anchor an international aid package that will forestall a disorderly financial crisis.

With a critical fuel shortage cutting into food supplies and essential services, Egyptians already have a foretaste of chaos. The two-for-a-penny pita, the subsidized flat bread that provides much of the caloric intake for the half of Egypt’s population living on less than $2 a day, is at risk.

Fortunately for the West, Egypt’s military appears to have taken matters in hand with Saudi support, forestalling the triumph of militant Islamism in the Arab world’s most populous country, at least for the moment. Call it the triumph of realism. This is as good as it gets in the Arab world. Egyptians have been spared (so far) the misery of their former partners in the United Arab Republic of 1958-1961, which briefly merged the two countries. With Saudi largess, they might be spared starvation for the time being.

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Rarely has the establishment been so unified, and misguided, in its ever-more-frantic efforts to promote a Euro bailout. Today’s Daily News Brief from the Council on Foreign Relations writes:

G20 leaders, meeting in Los Cabos, Mexico yesterday, urged European members to jumpstart growth in the beleaguered eurozone (al-Jazeera) by easing austerity measures and allowing the European Central Bank to play a more active role. A draft of the G20′s official statement, to be finalized and published later today, called on members to “take the necessary actions to strengthen global growth, amid increased concern that the eurozone sovereign debt crisis could plunge the global economy back into recession.”

The CFR highlights the following items:

“Since the euro crisis has escalated, the chancellor [Angela Merkel] has been more isolated than ever before. Everyone, from U.S. President Barack Obama to French President François Hollande, British Prime Minister David Cameron to Italian Prime Minister Mario Monti, together with an army of international economists, financial experts and journalists, is demanding that the Germans take on a greater financial burden,” notes Der Spiegel.

“But a eurozone collapse would be a disaster that might define our era. Its prospect must focus the minds of all at the G20 summit on action. Non-Europeans must persuade Europeans that the rules change when the stakes rise. The ECB’s credibility will mean little if there is no longer a common currency,” writes Lawrence Summers for the Financial Times.

“With the global economy again weakening, we need a strong G-20 now more than ever. The leaders of the world should take the opportunity of their meeting in Los Cabos to put aside political incentives and do what is best to ignite the global economy. By setting real membership standards, world leaders could build a better G-20, one capable of facing the challenges ahead,” Alex M. Brill and James K. Glassman for the Wall Street Journal.

“Growth” according to the G-20 and the foreign policy establishment means a massive bailout of bankrupt debtor nations, mainly at the expense of the German and Dutch taxpayers. It sounds sort of reasonable until you look at the numbers: it’s a hoax, a goof, a scam. Spain, the crisis du jour, is a Ponzi scheme, a property market bubble that dwarfs America’s subprime problem.

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The Sad Silence about Muslim Wife-Beating

June 14th, 2012 - 8:42 am

UPDATE: David Yerushalmi, a leading legal adviser to the anti-Sharia movement, brilliantly clarifies the legal issues involved here, courtesy of NRO columnist Andrew McCarthy, a former federal prosecutor and expert on Muslim terrorism.

Some leading conservative voices, notably Princeton law professor Robert George, denounce the anti-Sharia movement as an attack on religious freedom. Now Matthew Schmitz, the deputy editor of First Things (where I was senior editor from 2009 to 2011), abominates what he calls “anti-Muslim bigotry” in a commentary published June 14 at National Review. Mr. Schmitz can’t understand why there is such a fuss about Sharia:

Sharia, of course, does not grant all the rights that the U.S. Constitution does; neither does Christian canon law or Jewish Halakhic law (or English or French law, for that matter). But why should this fact prevent a court from honoring a contract made under the provisions of one of these “foreign” legal systems if the contract does not itself violate any U.S. or state regulations, laws, or constitutional provisions? Under one reading of the Kansas law, a contract that makes reference to canon law or sharia — but is otherwise perfectly legal — would be thrown out, while an identical one that makes no such reference would be upheld. The other possible reading of the law is that it only bars rulings based on foreign legal systems when the rulings themselves would violate constitutional rights.

If individuals want to settle civil cases under their own set of rules, why should anyone try to stop them? But there is a special circumstance in the case of Sharia that distinguishes it from Christian, Jewish, or French law. That is the problem of wife-beating .The fact is that Sharia does not recognize the universal principle of Western law that only the state has the authority to inflict violence, and specifically assigns to the male head of household quasi-state rights to inflict violence on his wife. No civil proceeding of any kind can be sanctioned under American (or any Western) law if the explicit or implicit threat of violence intimidates one of the parties to the negotiation. Yet violence is embedded in Muslim family law in a radically different way than any Jewish or Christian law. The difference is so extreme and so well-documented that comparison itself is invidious; as a Jew, I take offense when Sharia is compared to Halakha. There are superficial resemblances between Muslim and Jewish law, to be sure, because Muslim law is in large measure a lampoon of Jewish law, but the content is radically different.

Prof. George surely is correct to argue that anti-Sharia legislation and opposition to the building of mosques may infringe religious liberty. The anti-Sharia movement wields a blunt instrument that carries the risk of collateral damage. What are we do to, though, about a religion that explicitly sanctions domestic violence as a matter of first principles, because it denies the principle that only the state may employ violence? The Supreme Court has upheld the right of voodoo practitioners to sacrifice chickens, but American law cannot possibly tolerate wife-beating. Yet wife-beating is so deeply embedded in Islamic theology and law as to contaminate any aspect of Sharia that touches on family relations. How does one balance the Constitutional guarantee of religious liberty with the fundamental obligation of the state to protect individuals (in this case Muslim wives) against violence? This is not an abstract problem; according to Muslim women’s organizations, domestic violence is endemic in Muslim communities.

I am disappointed in my old colleagues from First Things, who have chosen to weigh in on the debate without so much as mentioning the elephant in the parlor, namely wife-beating. Shame on them.

This is not a secondary or accidental issue for Islam; on the contrary, the matter of wife-beating is definitive for Muslim understanding of the relationship between the individual and the state under Islam. As I wrote in a 2010 essay on the subject, there is no record of a recognized Muslim authority repudiating wife-beating. Tariq Ramadan, the Swiss Muslim scholar who purports to offer a Westernized version of Islam, notoriously defended wife-beating in a 2003 televised debate with then-French interior minister Nicolas Sarkozy.

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Forget Syria — Neutralize Iran

June 13th, 2012 - 6:43 am


UPDATE: The Emergency Committee for Israel is sponsoring a new advertisement demanding that Obama take action against Iran.

There is a strong analogy between today’s civil war in Syria and the 1936-1939 civil war in Spain, as my PJ Media colleague Barry Rubin argued recently. The analogy may be even stronger than he suggests. Spain became a proxy war between Nazi Germany and Soviet Russia, and the West had no interest in the victory of either side. Syria is a proxy war between Sunnis and Shi’ites, and (to quote then Israeli prime minister Yitzhak Shamir’s delicious line) we want them both to win. The difference between Spain in 1936 and Syria in 2012, to be sure, is that the West had no means to discourage the Russians and the Germans, the strongest military powers on the European continent. All the contenders in the Syrian cock-pit are tenth-rate powers next to the United States. The correct response to Syria is to neutralize Iran. By “neutralize,” I mean a campaign of air attacks and ground sabotage to destroy Iran’s nuclear weapons program and some other offensive capabilities.

It is unseemly and stupid for Washington to remonstrate with the Russians for playing the spoiler in Syria, for example by providing the Assad regime with attack helicopters. The way to deal with this dog is to beat up the dog’s owner, namely Tehran. Washington’s pathetic display of solicitude towards a terrorist regime that uses negotiations to buy time for nuclear weapons development aggravates every other problem in the region, Syria above all.

The greatest strategic risk to the West in the Syrian conflict is the possibility that Iran’s Revolutionary Guards might intervene with the blessing of the beleaguered Assad regime and get control of the country’s chemical weapons stockpile, reportedly the world’s largest. That would change the strategic equation in the Middle East: Iran would have a WMD second-strike capability against Israel. That, as I wrote in this space March 30, is a central Israeli concern and a supporting motivation for an Israeli strike on Iran’s nuclear program.

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UPDATE: I’m scheduled to be on CNBC’s “The Kudlow Report” at 7:50 p.m. this evening talking about Europe.


UPDATE , June 12: Chancellor Merkel is right once again:

LONDON (MarketWatch)– German Chancellor Angela Merkel said on Tuesday that the debt crisis in Spain was a result of “the Spanish property bubble of the last 10 years” and not simply about macroeconomic factors, according to a Reuters report. “It was right for Spain to ask for help recapitalizing its banks,” Merkel said. The European banking Authority, she added, had failed to properly diagnose the problems of the Spanish banks, according to the Reuters report. Reuters reported that Merkel once again dismissed calls for jointly-issued euro-zone bonds. Bond yields on 10-year Spanish government debt breached euro-era highs on Tuesday.

* * * * * * * *

There must be somebody besides us ex-bankers-in-remission rolling around the floor laughing about the succession of headlines on Saturday afternoon. First came this:

WASHINGTON (AP) — The International Monetary Fund is estimating that Spanish banks need at least a euro40 billion ($49.87 billion) capital injection following a stress test it performed on the country’s financial sector.

and an hour or two later, this:

Spain will seek financial help from its Eurozone partners but exactly how much won’t be known until private audits are undertaken, the country’s economy minister announced Saturday. Earlier, European finance ministers discussed plans to offer Spain up to $125 billion (100 billion euros) in a bid to stabilize its banks — and ease concerns over the even bigger European debt crisis. That amount was described as an upper limit, not an indication of what Spain would ask for. After Spain’s announcement, the Eurozone ministers issued a statement that they expected a formal request “shortly” and are “willing to respond favorably.” Spain earlier said it wanted to wait for two independent audits — due by June 21 — before deciding on whether to seek aid, and it was not clear if those audits were being stepped up.

It’s $49 billion–no–its$125 billion! Either this is a particularly aggressive effort to soften up European sentiment for an even larger bailout, or it is the product of a general panic in the Spanish government and the European elite. In fact, the butcher’s bill probably will be a multiple of the promised $125 billion. As I wrote in an open letter to German Chancellor Angela Merkel last week, the 184 billion euros in bad loans to which Spanish banks admit is probably less than half the total. The Spanish elite bet the whole economy on a construction bubble which, relatively speaking, has three times the weight that America’s housing bubble did back in 2008. Even worse, Spanish banks have more than doubled their loans since 2008, apparently capitalizing interest (lending more to zombie borrowers in order to book interest payments and avoid a write-off).

Because the Spanish government and banks have engaged in a vast coverup of the financial crisis, it is of course impossible to say how deeply the banks are in the hole. My best guess (based on the lending volume of Spanish financial institutions) is that the real number will be in the $300 billion range. This is a scam, a ripoff, a Ponzi scheme, not a national economy. As I wrote to Chancellor Merkel, to save the credit of Germany and other solvent European countries, the best thing to do is to sacrifice Spain, and draw the line at helping the French banks (who own a lot of Spanish debt). My letter, published first in the Asia Times, was translated into a number of European languages and published in major Dutch, Belgian and Polish newspapers. Chancellor Merkel seems committed to the path of least resistance.

Political cowardice in the face of financial scams on an epic scale is not exactly news these days, but the utter incompetence of the European finance ministers and lack of coordination among the international organizations involved in the deliberations are deliciously new. Never before in the course of human events have so few wiped out so much credibility for so many.

Here’s a simple piece of arithmetic to keep in mind after Wisconsin voters overwhelmingly supported Gov. Scott Walker and California voters backed pension cuts for retired municipal workers. I reviewed some of these numbers last October in this space, and add some state-level detail below. Back on Jan. 24 I insisted that “Obama is toast” because of the rotten economy. It’s sure starting to look that way.

State and local property tax collections (blue line in the graph below) have risen by 10%, from $400 billion to $440 billion, since 2008, even though the price of homes in most American markets (red line)  has fallen by 30% since 2008. Your house is worth less and your property taxes have gone up. Most of the $440 billion in property taxes is paid by homeowners. That compares with the $380 billion a year or so that homeowners pay on the $10 trillion in outstanding home mortgage debt. Homeowners now pay roughly as much in property taxes as in mortgages interest. It used to be a quarter to a third as much. No wonder home prices remain depressed.

FRED Graph

Things are even worse in Wisconsin than in most American states. As shown in the chart below, property tax collections have risen by nearly $25 billion, or almost 20% in Gov. Walker’s state, compared to a 10% increase nationally. No wonder Wisconsin voters backed Walker by a margin of nearly 3:2. There are a lot more people paying property taxes to pay the salaries and benefits of government workers than there are government workers.

Graph of State Government Tax Collections, Property Taxes in Wisconsin

California is the worst of all: Despite one of the weakest housing markets in the country, property tax collections in California spiked by nearly 50% since 2008.

FRED Graph

State and local government spending doubled since the property boom began in 1998:

FRED Graph

The federal government’s spending rose even faster, but it is borrowing $1 out of every $3 it spends, but state and local governments can’t do that by law. So they have pushed up tax collections even while federal tax collections have fallen.

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