Belmont Club

"Somebody has our money"

Although Casey Anthony and Rupert Murdoch have recently distracted the public, the sovereign debt crisis never really went away, as Megan McArdle notes. In fact the public may have looked away because the spectacle was just too depressing to watch. William Cohan says, “the yield on Greek sovereign debt is now at record highs for the euro era. Last week’s state-managed bond auction in Italy almost failed.” What is more “Spain has entered the danger zone for yield levels” and this chart is prominently displayed.

Danger Will Robinson

Things look bad in Europe, but with the US deficit climbing and an impasse on the debt ceiling, there is no obvious long term safe haven on either side of the Atlantic. And may it’s not just debt either. It’s like the zip has gone out of everything. The Heritage Foundation claims that Obamacare and other redistributive virtually killed job creation in the US, a charge echoed by a prominent businessman.


The world’s future looks grim, but there’s a silver lining, especially since everyone can be sure that Global Warming isn’t going to drown them. Just to make sure the UN is looking to create a force of Green Helmets — troops to make sure that nobody lets off too much carbon into the atmosphere. “A special meeting of the United Nations security council is due to consider whether to expand its mission to keep the peace in an era of climate change.”

There has been talk, meanwhile, of a new environmental peacekeeping force – green helmets – which could step into conflicts caused by shrinking resources.

The UN secretary general, Ban Ki-Moon, is expected to address the meeting on Wednesday.

But Germany, which called the meeting, has warned it is premature to expect the council to take the plunge into green peacemaking or even adopt climate change as one of its key areas of concern.

“It is too early to seriously think about council action on climate change. This is clearly not on the agenda,” Germany’s ambassador to the UN, Peter Wittig, wrote in the Huffington Post.

Where the Green Helmets are going to come from, nobody knows. The British Army, one of the mightiest in Europe, about to be slashed by 17,000 men to the smallest size since the Boer War. Active duty UK forces in Afghanistan suffering from “woeful shortages” of ammunition, vehicles and God knows what else.

The Daily Telegraph can disclose that:

Just 50 per cent of Apache helicopter are working

Only 70 per cent of Chinooks are available

A garrison was down to its last 200 mortar rounds because no helicopter resupply

Only 16 of 96 new armoured vehicles have been delivered

Engineers are forced to travel in soft-skinned trucks while carrying high explosive

Soldiers have bought their own binoculars to replace inadequate Army sights.

Maybe the troops are going to come from America, just like the money’s going to come from Germany. If so Berlin should refrain from offering up its opinions and stick to doing what it does best — making things — as opposed saying things. The IMF had stern words for Berlin in its 2011 report.

Germany is not currently an economic locomotive in Europe. Its imports of goods from other European countries are substantially a reflection of global demand: as world trade grows, German exports rise. … German GDP movements are still largely a function of world trade…. That needs to change, so that Germany will be able to pull the rest of Europe along with it on a path to higher growth …

“Germany can do better,” Juha Kahkonen, deputy director of the IMF’s European department, said in a telephone conference call. “Germany can raise its goals in the medium term” by stimulating domestic growth and encouraging employment, especially by women and older people at a time when the ageing of the population leads to a gradual decline in the working population, he added.

Just hire the geezers and increase diversity and pull already so the European crisis will be over. But if Megan McArdle’s links are to credited, things ain’t over by a long shot. Maybe Germany’s had it, had it with everything. Maybe America’s sick and tired of working for Gaia.  Maybe this bright planetary future is largely spin. What America and Europe should worry about right now isn’t the embarrassment of choices in a future too rich with options to contemplate. It should be worried about survival; and most especially escaping form the threat it poses to itself. Der Spiegel describes how bad things have become in Greece. People are hungry, really hungry — not for green pap but for food.

This time, the fight for survival last exactly 29 minutes. At precisely 3 p.m., Father Andreas, a 37-year-old Greek Orthodox priest, opens the doors of the food bank in downtown Athens. At this hour, the line of hungry people stretches all the way across the large square outside and into the street. Needy people of all ages are waiting patiently — pensioners, unemployed people, mothers with children, immigrants, asylum seekers. “We can’t let these people starve,” the priest says. “They are already suffering so much. They should at least not go without food.”

It is a charitable deed. But in just under half an hour, all of the kitchen’s 1,200 servings have been taken, causing several dozen people to leave with empty hands and growling stomachs. They can only hope to be among the lucky ones next time.

What has been destroyed is the Greek capacity to shift for itself. Jeffrey Tucker, arguing from Anthony Bourdain’s soup kitchen experience in Haiti, maintains that the problem always starts when the possession of wealth attracts trouble. Anthony Bourdain in Haiti bought out the entire food product of a food stall and in an act of generosity had it given away. The unintended consequence was that a huge and unruly crowd descended on the hapless vendor. He was not rewarded, but punished for success. Yet Tucker argues, that is what in miniscule happens when a government rushes up to extract its slice of “fairness”.

The answer has to do with the regime. It is a well-known fact that any accumulation of wealth in Haiti makes you a target, if not of the population in general (which has grown suspicious of wealth, and probably for good reason), then certainly of the government. The regime, no matter who is in charge, is like a voracious dog on the loose, seeking to devour any private wealth that happens to emerge.

This creates something even worse than the Higgsian problem of “regime uncertainty.” The regime is certain: it is certain to steal anything it can, whenever it can, always and forever. So why don’t people vote out the bad guys and vote in the good guys? Well, those of us in the United States who have a bit of experience with democracy know the answer: there are no good guys. The system itself is owned by the state and rooted in evil. Change is always illusory, a fiction designed for public consumption.

If you are looking for a reason why economies have flatlined everywhere it may lie Jeffrey Tucker’s observation that in a system increasingly run for the benefit of those interested in other people’s money, those “other people” stop making money. It rarely occurs to bureaucrats that the Germans won’t keep working to pull Europe out of a hole or that Americans aren’t thrilled to fund Green Helmets. What will they do when the do-gooders run out of “other people’s money”? Why that will never happen. As Van Jones put it, “America is not broke. This is a very dangerous lie. … Somebody has our money.”

“No Way In” print and Kindle edition at Amazon
Tip Jar or Subscribe for $5