Greeks, angry at the statements made by the head of the International Monetary Fund, Christine Lagarde, yesterday that the Greeks need to pay their taxes and honor their austerity commitments, have commenced a Facebook war against Lagarde and the IMF. They are also incensed over Lagarde's comments that she is more sympathetic and willing to provide assistance in Africa than to Greece if Greece reneges on their obligations in the bailout deal struck earlier this year.
This is just part of the brinkmanship game that is being played out by many Greeks, the leadership of the far left Syriza party (seeking to gain control of the government in the June 17 elections), and the IMF / Germans over the future of Greece in the Euro and Eurozone. Syriza continues to move to the forefront in polling information - and Alex Tsipiras, the party leader, is not backing down from demanding the EU, ECB, and IMF honor the bailout and keep sending Greece billions to cover its debt obligations while Greece reverts back to the spending and entitlements that placed it in this position.
While many eyes are on this 'game of chicken', it's just one of three major 'games of chicken' that are being played in Europe - and all have Germany as a common element. The rhetorical fight above is the first game of chicken underway. The second is a battle between Germany (Angela Merkel) and France (new President Francois Hollande). This is the battle over 'austerity' versus a far larger dive into statism and Keynesian economics....
The solution to the Eurozone crisis is, of course, a massive bailout. Everyone knows this. Part two of the solution is a series of gigantic loans to jump start growth across the Continent. There’s considerable argument about how this should be done (to say the least), but without economic growth the aging demographics of the Eurozone point to an almost endless economic stagnation – at best. Growth has to be on the agenda.Zerohedge looks at this and asks if Europe is fighting all of the wrong battles once again?
The question is: where does this bailout/loan money come from? The answer from all the Europeans (except the Germans, of course) is Germany. The answer from the Germans is: we know that eventually we will have to underwrite some of the bailout, but we will do it on our terms and we will not do it alone.
This is the third game of chicken that is being played out as we speak. German Chancellor Angela Merkel is facing off against President Obama in an advanced game of mutual assured destruction.
Basically, her message to the US president is this: “I will not lose a single vote if I force Greece out of the Eurozone. If the Grexit is messy and leads to contagion, which it almost certainly will, then the crisis will escalate to a much more menacing level. At that point, the US will have to demand that the IMF under-write a massive Eurozone bailout or we’re looking at 1930s Europe on steroids.”
“So, Barry, step up now if you hope to have any chance of re-election.
Europe continues to fight the wrong battle, and continues to spread contagion risk. It is clear that Greece has had a solvency issue now for over 2 years. The ECB and Troika chose to treat it as a liquidity problem. Maybe, they could have argued that in early 2010, but by the summer of 2011 it was obvious to any credit observer that the problem was solvency, yet they continued to treat it as one of liquidity. That is scary because if they fail to see the problem correctly now, they will fail miserably. Not only is the problem clearly solvency, but now forced currency conversion has been added to the mix. Any "solution" from the EU must now address that risk, and it is not the same as solvency. Programs that can protect against solvency may do nothing for the redenomination risk. We keep playing with scenarios and find it hard to find out where a Greek exit doesn't result in a steep sharp decline in the market. We could go through more ideas of ECB intervention, but in the end most will have flaws. Dealing with currency conversion risk is huge. Dealing with the contagion risk that has been created by the EFSF is huge. Will Europe force Greece out thinking they have a plan; that fails miserably and sparks the miserable series of consequences we’ve outlined? Sadly, yes.President Barack Obama is already facing a more daunting reelection task. He is also facing a stagnant domestic economy and a record that he is increasingly unwilling to run on. There is little real will for the President, or Congress, to underwrite billions in the US to be sent / used to fund a massive IMF bailout of the EU. He would have to use every bit of political capital he has left - and what voters will remember is the economic turmoil in the late summer / fall of 2012 is as bad if not worse than the same time in 2008.
Expanding on the parallels between Carter and Obama - is this last game of chicken Obama's hostage crisis?
A common meme this year, or at least since the beginning of March, is that the President is having a collection of 'worst weeks ever'. A campaign and candidate that did little wrong in 2008 is clearly struggling in this critical phase of the 2012 campaign. With just over 5 months to go, there is a lot of time to turn this perception around - but with the record and challenges we are facing, the reality could very well be that the campaign is trying to refight the last campaign towards an electorate that realizes the size and scope of the mistake them made in 2008.
The Obama campaign's attacks on Mitt Romney over his experience at Bain Capital, echoing some of the shots taken at Romney by Gingrich during the bitter GOP primary fight, do not seem to be resonating with middle America - the ones who will decide this election. The basis of these attacks seem to be centered around the fact that Bain Capital, under Romney's leadership, is an 'evil' corporation - focused only on generating a return for their investors. The alternative is the promise of the President's focus to leverage taxpayer funds towards 'fairness' and 'social justice' - generating a return for the special interests the President needs to vote for him and his party.
Who has the better record?
Over the last decade, the majority of federal expenditures did not go to fund the Defense Department / National security. It did not go to fund the wars in Afghanistan and Iraq. 65%, effectively two thirds of all federal expenditures, went towards entitlements.
This is a reflection of our path on the road to becoming Greece.
Another challenge for the President, as we look to answer the question as to who has the better record to provide the voters with a choice as to who is best positioned to address our stagnant economy, is his record in creating jobs and generating a return for the taxpayers of this country. This President is seeking to mortgage the future with his unprecedented additions to the national debt. This President is seeking to increase taxes, increase government revenues because he believes that government can spend and invest the earnings and income of Americans better than they can themselves and do so for the 'greater good'.
If we look at this President's record towards public equity investment, in contrast of Romney's record in private equity investment, we see a record that cannot be considered one of success. Look at the results from one of the President Obama's biggest efforts - the 'imperative' to provide massive amounts of taxpayer funds for green energy companies in order to create green energy jobs.
Green energy jobs far short of Obama goal - President Obama has made much of his commitment to green energy as he launches his re-election bid, but the nascent industry has produced far fewer jobs than the president promised, despite massive, repeated infusions of taxpayer dollars.
Since taking office more than three years ago, Obama has routinely promoted wind, solar and other green energy efforts, touring factories — often the beneficiaries of federal grants — and touting the manufacturers as cutting-edge job producers who are leading America’s transition to energy independence. He had promised in 2008 to help those companies create millions of jobs.
“We can invest $15 billion a year in renewable sources of energy … to create 5 million new jobs, new energy jobs, all across [the] country, jobs that pay well, jobs that can’t be outsourced,” Obama, the candidate, told an Ohio crowd.
But the president has fallen far short of his own mark.
The wind industry has actually lost about 10,000 jobs since 2009, even though it doubled its domestic production, the American Wind Energy Association reports. And Republicans were quick to point out that as Obama blocks the construction of the Keystone XL pipeline from Canada to Texas, the oil and gas industry has added 75,000 jobs since the start of his term.
Obama spent $90 billion of his stimulus package on green energy projects, including weatherization of buildings and development of electric vehicles. Yet, by the end of last year, just 16,100 people landed new jobs in the so-called green industry, Labor Department statistics show, far short of the 200,000 jobs the White House projected it would help create each year.
$90,000,000,000 ($90 billion) for 16,100 new jobs. That's an investment of almost $5.6 million per job. It's the definition of FAIL...
Lurking in the background of the Eurocrisis, the domestic economic challenges, and the 2012 election campaign is the return of something that is a huge attack on American sovereignty and a massive wealth redistribution campaign from the rich (the US) to the poor (nearly everyone else)....the Law of the Sea Treaty (LOST).
LOST is just the latest waterlogged power grab by the Obama administration. As I reported in 2010, the White House, through executive order, seized unprecedented control from states and localities over “conservation, economic activity, user conflict, and sustainable use of the ocean, our coasts, and the Great Lakes.” Obama created a 27-member “National Ocean Council” by administrative fiat; the council is specifically tasked with implementing ocean-management plans “in accordance with customary international law, including as reflected in the Law of the Sea Convention.”
The panel is chaired by radical-green science czar John Holdren (notorious for his cheerful musings about eugenics, mass sterilization, and forced abortions to protect Mother Earth, and for hyping weather catastrophes and demographic disasters in the 1970s with his population-control pals Paul and Anne Ehrlich) and White House Council on Environmental Quality head Nancy Sutley (best known as the immediate boss of disgraced green-jobs czar and avowed Communist Van Jones).
Other members include Dr. Jane Lubchenco — head of the National Oceanic and Atmospheric Administration and a former high-ranking official at the left-wing Environmental Defense Fund, which has long championed draconian reductions of commercial fishing fleets and recreational fishing activity in favor of centralized control — and fraudster Interior Secretary Ken Salazar, who doctored the administration’s drilling-moratorium report.
It is not hyperbole to expose LOST’s socialist roots. Meddling Marxist Elisabeth Mann Borgese, the godmother of the global ocean regulatory scheme, made no bones about it: “He who rules the sea,” she exulted, “rules the land.” LOST is a radical giveaway of American sovereignty in the name of environmental protection. And it should be sunk once and for all.
This treaty was thought killed by President Reagan thirty years ago. But in the same manner that the President is willing to skyrocket energy prices (electricity / gasoline) in order to fulfill radical environmental objectives, decimate domestic oil production so we can send billions to Brazil, and empower a global government (United Nations) to possess sovereignty over the US, President Obama and his team of socialists, wants to adopt this treaty in the name of their definition of 'social justice'.
Massachusetts Senate candidate, Elizabeth Warren, remains on the run from the press over her continued dubious Native American ancestry claim - and that claim being touted by two Ivy League institutions (Penn and Harvard) as their embracement of 'diversity' within their faculty. After the testy standoff with a local reporter highlighted in an earlier QH, she and her staff are no longer answering questions when they are posed - and seek the easiest / quickest form of retreat.
While some members of Harvard were quick in the early days of the scandal to insist that Warren's claim of being 1/32nd Native American had nothing to do with her hiring or the decision to grant her tenure, a former Harvard Administrator tossed Elizabeth Warren under the bus when asked to respond about the Boston Globe's article on Harvard's EEOC report and the lack of any documentation to substantiate Warren's claim.
In the reaction to the Boston Globe's controversial article on Harvard's EEOC reports which listed Elizabeth Warren as a Native American, one particular revelation has gone largely unnoticed. Alan Ray, the former administrator who filed diversity reports during Warren's tenure, distances the university from any responsibility for erroneously listing her as a Native American.
[Ray] said through a spokeswoman that he "never encouraged any faculty member to list himself or herself in a particular way." Ray added that Harvard "always accepted whatever identification a faculty member wanted to provide," a characterization another highly placed former Harvard administrator backed up.
Basically, Harvard only filed the EEOC report on the basis of Warren's self-identification. They didn't ask for any substantiation of the claim - which benefited the University and Warren.
Unfortunately, in a state that over decades sent Teddy Kennedy and John Kerry to be their Senate representation, character seems to mean little to the legions of Massachusetts's progressive voters.
This weekend is a major anniversary celebration for the gentlemen who blog at Powerline... as they celebrate their 10th anniversary blogging. Congratulations on the 10 years blogging!
This Day in History
1703 - St. Petersburg was founded by Czar Peter I (Peter the Great) as the new Russian capital.
1905 - The Battle of Tsushima Strait - during the Russo-Japanese War, the Russian Baltic Fleet, which sailed from St. Petersburg, to off the Korean peninsula, lost 35 of its 45 ships in a decisive defeat versus the Japanese fleet. Japan would emerge from this conflict as the first modern non-Western world power and Russia would move closer to revolution.
1937 - The Golden Gate Bridge, connecting San Francisco and Marin County, California, officially opens. When it opened, it was the longest suspension bridge in the world.
1940 - As the evacuation at Dunkirk continues, 99 soldiers of the Royal Norfolk Regiment fought a rear guard action about 50 miles from the port. Fighting until running out of ammunition, the 99 surrendered to the SS unit they were fighting. The SS unit then marched the captives to a pit and machine gunned the prisoners before bayoneting the wounded. 2 members of the 99 survived by feigning being dead and surrendering to other German units. After the war, once the scope of the atrocity was known, the German officer who gave the order for the massacre was convicted of a war crime and hanged.
1941 - The Royal Navy closes in and sinks the German battleship Bismarck in the North Atlantic about 700 miles from France. This comes after British torpedo bombers from the aircraft carrier HMS Ark Royal disable the Bismarck's rudder, ending her effort to evade the Royal Navy and make a French port. Over 2,200 German sailors perished when the Bismarck sank - there were only 114 survivors.
1969 - Construction of Walt Disney World near Orlando, Florida begins