Sunday, June 3, 2012

Quick Hits - June 3, 2012

Over 1,000 boats jammed the River Thames today celebrating the Queen's Diamond Jubilee, the largest pageant on the Thames since 1662 when one was held in honor of King Charles II.  Despite poor weather conditions, rain and low clouds which resulted in the cancellation of a Royal Air Force fly-by, the rivers banks were lined with cheering crowds.

The BBC has an excellent video recap of the River Thames Diamond Jubilee pageant at this - link - .

St. Stephen's Tower, the 320 ft. tall structure that houses Big Ben, will be renamed Elizabeth Tower in honor of the Queen's Diamond Jubilee.  The tower at the other end of the Palace of Westminster was originally known as the King's Tower, but was renamed Victoria Tower in honor of Queen Victoria, the only other British monarch to have a diamond jubilee.

Greece is not the only nation in the European Union that is creating major fiscal challenges to the continued viability of the Union and the Euro.  Spain is rapidly overtaking Greece as a major concern as its economy, which is far larger than Greece's, continues to implode. 
Forget Grexit. Greece’s teeny, tiny economy is a footnote now. As is Ireland’s decision – which seemed more like a sigh of resignation than a plebiscite – to engage in however much self-flagellation the EU gods insist on, for however long it takes. What might have seemed dramatic a week or so ago has now shrivelled in importance by comparison to the realistic possibility of a spectacular crash in the fourth largest economy in the EU. Spexit (and Spanic) are lodged in the lexicon, and have become part of the psychological reality that moves markets. The equivalent of more than £55 billion was withdrawn and transported out of Spain last month – and that was before the country’s largest bank was nationalised. No one seems to be kidding himself that the collapse of the Spanish economy could be somehow weathered and overcome, as the default of Greece might be.

There is no talk of firewalls, or of simply letting Spain go, or of the European banking system being re-capitalised to compensate for the losses that it would suffer. Nope. This is it. The cancer has now spread to the vital organs of the EU. Spain is not a peripheral Mediterranean country. It is not an insignificant player in the political project. It is not a marginal going-along-for-the-ride-and-the-free-money passenger on the euro train. Not only is its economy so large as to be indispensable, but its ties with Italy mean that the Italian economy (which is the third largest in the EU) would be fatally compromised by its fall. “Itexit” is almost unpronounceable, so perhaps it’s fortunate that it will never be required: after Spexit, there would be nothing left to exit from.

Germany remains under massive pressure from the endangered countries - and those that will become endangered when the collapse happens - to bail out the EU and those troubled countries. They fundamentally want the Germans to continue working to the age of 67 so that Spaniards, Greeks, and Italians can retire in their 50's and keep their entitlement based lifestyles. As Victor Davis Hanson notes, there are limits to German patience...
When Greece comes up (or rather is brought up by Americans), there is a noticeable tension. Brows tighten. German smiles momentarily vanish. A second later a forced recovery and grimace follow, accompanied by a sort of pained EU propaganda speech, along the lines of “Well, yes, we all have to get along” or “We Europeans of the Union must work something out.” Then after the platitudes, we are back to silence and a look to see whether their constructed optimism worked on you.

But then if you press with a polite question or two — something like an innocent (or perhaps not quite so innocent) “But is it really true that the Greeks find ways to retire in their fifties while you work to 67?” or “How did those deficits get so big without being detected?” — the fa├žade crumbles. Your German friend takes a quick look to the side, to see whether anyone is listening. And then in a quiet, but soon to be louder and finally animated voice, he starts in on the “EU racket” and “How in the world is Germany supposed to pay for all these freeloaders?”

In minutes you begin to sense that the entire cohesion of the EU is predicated now on two dubious premises....

On of the common themes that VDH promotes, to the chagrin of the progressive multiculturalists, is that cultures still do matter...
So Switzerland supposedly has everything going against it, and yet it is one of the wealthiest nations in the world. Why and how?

To answer that is also to learn why roughly 82 million Germans produce almost as much national wealth as do 130 million Greeks, Portuguese, Italians, and Spaniards. Yet the climate of Germany is also somewhat harsh; it too has no oil or gas. By 1945, German cities lay in ruins, while Detroit and Cleveland were booming. The Roman historian Tacitus remarked that pre-civilized Germany was a bleak land of cold weather, with little natural wealth and inhabited by tribal savages.

Race does not explain present-day national wealth. From 500 B.C. to A.D. 1300, Switzerland and Germany were considered brutal and backward in comparison to classical Greece and Rome, and later, to Renaissance Venice and Florence.

Instead, culture explains far more — a seemingly taboo topic when economists nonchalantly suggest that contemporary export-minded Germans simply need to spend and relax like laid-back southern Mediterraneans, and that the latter borrowers should save and produce like workaholic Germans to even the playing field of the European Union.

But government-driven efforts to change national behavior often ignore stubborn cultural differences that reflect centuries of complex history as well as ancient habits and adaptations to geography and climate. Greeks can no more easily give up siestas than the Swiss can mandate two-hour afternoon naps. If tax cheating is a national pastime in Palermo, by comparison it is difficult along the Rhine.

Mark Steyn's column for this week looks at these cultural differences in Europe and the economic direction that we are taking here in the US. While we are on different paths, and the US is trying to adopt the Euro-style entitlement state, we are both heading to the same destination...
In the twilight of the west, America and Europe are still different but only to this extent: They've wound up taking separate paths to the same destination. Whether you get there via an artificial common currency for an invented pseudo-jurisdiction or through quantitative easing and the global decline of the dollar, whether you spend your final years in the care of Medicare or the National Health Service death panels, whether higher education is just another stage of cradle-to-grave welfare or you have a trillion dollars' worth of personal college debt, in 2012 the advanced western social-democratic citizen looks pretty similar, whether viewed from Greece or Germany, California or Quebec.

That's to say, the unsustainable "bubble" is not student debt or subprime mortgages or anything else. The bubble is us, and the assumptions of entitlement. Too many citizens of advanced western democracies live a life they have not earned, and are not willing to earn.

That is one of the key differences between the vision of conservativism and progressivism. Conservatives do not believe in statism or the entitlement society. Bigger government is not better government. Centralized planning and control has not and does not work. Promoting individual rights, freedom, and liberty along with the private sector does. Economic stimulation comes not from massive government spending and increased taxation - but from lower taxation which keeps more funds in the private sector for investment. This means that government spending also must decrease - so that the government spends within its means.

Progressives believe the opposite. They consider the 'free market' fundamentally flawed. It's 'unfair' to some. Equality of results trumps equality of opportunity. 'Social justice' demands massive government spending and entitlements to ensure the equality of results. Bigger government with centralized economic planning and controls also ensure fairness, social justice, and control. Rather than the government working for the people, they believe the people work to support the government. Keynesian economics, massive government spending and high taxes, are needed to stimulate the economy and fund the effort to ensure 'fairness' and 'social justice'.

One of the most outspoken ideologues advocating progressivism is one of the absolutely dumbest 'smart persons' alive today - NY Times columnist, Nobel laureate economist, and former Enron economic consultant Paul Krugman.

Earlier in the week we covered how some British business writers responded to Krugman's insistence that the EU problems can be solved, not by austerity, but by trebling down on the same policies that created the region's debt crisis - more government spending.  Appearing this morning on ABC News This Week news program, Krugman not only continued to press this solution, but demonstrated that he is either completely clueless or willing to say anything to promote his ideological 'solutions' regardless of how factually incorrect they are. brings us two of these...

The first is Krugman talking about the President's economic record...

PAUL KRUGMAN, NEW YORK TIMES: Can I just -- these are -- these are -- we're talking as if $1 billion was a lot of money, and in $15 trillion economy is not. Solyndra was a mistake as part of a large program, which has been -- by and large had a pretty good track record. Of course you're going to find a mistake. I think, to be fair, that's probably true in Massachusetts, as well.

But this is -- this is ridiculous, that we are taking these tiny, tiny missteps which happen in any large organizations, including corporations, including Bain -- Bain Capital had losers, too, right, even from the point of view of its investors? So this is ridiculous.

And the fact of the matter is, this president has not managed to get very much of what he wanted done. He -- it's terribly unfair that he's being judged on the failure of the economy to respond to policies that had been largely dictated by a hostile Congress.

A largely hostile Congress? In what world? For the first 2 years of his term in office, President Obama enjoyed a massive majority in the House of Representatives and a filibuster proof majority in Congress through Feb. 2010, and 59 Democrats to 41 Republicans in the Senate to the end of 2010. The last time a President had a similar majority in both houses of Congress? 1937. It was the combined record of President Obama and this Congress which motivated and led to the 2010 midterm election defeat of the progressive Democrats. As historically unique was that electoral rebuff, the President still had a majority in the Senate - a Senate that has not passed a federal budget in over 1,100 days and continues to do little to support the false meme that Obama is held captive by a 'do-nothing' Congress.

As the Wall Street Journal notes, we have an economy now that was built to stall - and with a third slowdown in three years, maybe the problem is the policies behind this economy?

On Friday the White House blamed the third slowdown of its four-year term on Republicans for blocking the President's policies, but what policies are they talking about? In his first two years in office, Democrats gave Mr. Obama everything he wanted, save for cap and trade and union card-check, which would have done even more harm to job creation. They passed stimulus, ObamaCare, multiple housing bailouts, Dodd-Frank and more.

Even after Republicans took the House, they gave Mr. Obama the payroll tax holiday he demanded first for 2011 and again for 2012. Far from some new fiscal "austerity," overall federal spending hasn't declined. Meanwhile, the Federal Reserve has delivered monetary stimulus after stimulus—QE I, QE II, Operation Twist, and 42 months of near-zero interest rates with the promise of 30 months more.

Mr. Obama has had the freest run of policy of any President since LBJ. So maybe the problem is the policies.

Then in the same clip, we have Krugman being incredulous that some consider $1 billion a lot of money. To someone fully vested in tax and spend, perhaps it isn't...but as the old saying goes, a billion here and a billion there, and we're talking real money...

The other clip of Krugman comes as he and George Will begin to discuss the Wisconsin recall election which takes place on Tuesday. Krugman takes Wisconsin Governor Scott Walker to task for his 'fiscal irresponsibility' while at the helm of Wisconsin...

GEORGE WILL: Yes, because it's a microcosm of what the country faces, an attempt to change the trajectory of the public sector. You have this extraordinary conflict there where unions are defending their privileged position. And it does look as though Wisconsin people are going to try and take that back.

The man running against Scott Walker, Mayor Barrett of Milwaukee, has used the Walker reforms to save $19 million in the Milwaukee budget itself, so he's running against a man whose reforms he's emulating and using.

PAUL KRUGMAN, NEW YORK TIMES: And yet, of course, Walker is proposing tax cuts that will do much more to hurt the budget than any of these alleged savings. So this is -- it is a microcosm. It is -- it's not -- it's not fiscal responsibility versus irresponsibility. It is a vision of what kind of country you want to have and whether we're going to redistribute income upwards.

WILL: A more than $3 billion budget that he inherited, a deficit, has now become a surplus.

Oh, and that $3 billion plus budget deficit that Scott Walker inherited came primarily from a progressive Democrat governor who implemented the policies and approach that Krugman advocates.

This last Krugman clip comes from a few years ago - when Fox News Bill O'Reilly debated Krugman on CNBC with the debate moderated by the late Tim Russert.

Taking a quick peek at the Wisconsin recall election - voter turnout and voter enthusiasm is going to be huge. With that, this cannot bode well for the unions, democrats, or Tom Barrett...
Just four days out from the Wisconsin's historic gubernatorial recall election, former president Bill Clinton and Milwaukee mayor Tom Barrett could only draw a small crowd to a rally Friday on Barrett's home turf.

As the Associated Press notes, the crowd numbered only in the "hundreds," a sign of the enthusiasm gap between Democrats and Republicans that has appeared in some polls. Overcast weather and the short notice of the event (it was announced just yesterday) may have depressed turnout. But a sitting mayor of a Democratic city and a popular former Democratic president still should have been able to draw more than hundreds of people on Friday if Barrett supporters were fired up and ready to go. Congressman Paul Ryan has been known to draw hundreds of people to some of his townhall meetings in the Milwaukee exurbs.

Desperation seems to be taking hold as the unions are now actively trying to intimidate Wisconsin voters....
Wisconsin’s vote is on Tuesday, but voter intimidation efforts by the desperate unions are already taking place - To be precise, the union-backed Greater Wisconsin Political Fund is actually trying to pressure non-voters in liberal Dane County into voting in Tuesday's recall election. "We're sending this mailing to you and your neighbors to publicize who does and does not vote," reads the "incredibly creepy" mailer that UW-Madison law professor Ann Althouse received from the Greater Wisconsin Political Fund.

Althouse writes:
This is an effort to shame and pressure people about voting, and it is truly despicable. Your vote is private, you have a right not to vote, and anyone who tries to shame and an harass you about it is violating your privacy, and the assumption that I will become active in shaming and pressuring my neighbors is repugnant.

Not voting is a valid choice. If you don't have a preference in the election, don't vote. If you think no one deserves your vote, don't vote.
Appearing on Fox News Sunday, Fox News analyst David Brody makes this point during the panel discussion on the Wisconsin recall election about turnout, enthusiasm, and the effects of the battle between unions and the Tea Party...

“It’s a huge defeat for unions clearly. I think what you’re seeing here is what Scott Walker, Paul Ryan and others, you’re seeing this word courage come up a lot. That they had the courage to take on the tough problems… I got to tell you, I think the unreported story here is what’s going on on the ground in Wisconsin as it relates to the Tea Party. You have a conglomerate of Tea Party groups there: Tea Party Express, Tea Party Patriots, Americans for Prosperity, FreedomWorks, you could go on and on. You put all of those folks together. This is going to be the number one crowning jewel of the Tea Party movement between 2010 and 2012. Murdoch over Lugar? Yes, huge and there will be others. But what’s been going on there, they’ve been on the ground for a year there, Chris, all of these groups. It shows you the real power of the Tea Party, what they can do in terms of taking on unions.”

Wisconsin is going to be a bellwether for November...and I still strongly believe that it will portend a November 2012 far closer to November 2010 than November 2008.  And the Tea Party has not disappeared....

As we begin the second summer after the non-existent 'Summer of Recovery' with no real sign of a robust economic recovery underway, we're starting to see some real signs of fracturing support towards Barack Obama.

I believe that if the poor economic news continues, as seems very likely, combined with more evidence that this Administration has also been a general failure with its foreign policy agenda, we are going to see more and more progressives start to distance themselves from Barack Obama as well as starting to attack Barack Obama as being, basically, incompetent. 

In order to protect their progressive vision from being utterly discredited by the results of its implementation, they are going to call say that the current problems are not the result of the failure of the vision, but of the failure of its implementation by the incompetent Barack Obama.

Is this column by the New York Times, Maureen Dowd, who calls Obama 'the fallen superhero' the first sign of this?

This Day in History

1864 - General Ulysses S. Grant, making what he later admitted was his greatest mistake, orders a full frontal assault on entrenched Confederate positions at Cold Harbor, Virginia.  The attack resulted in 7,000 Union casualties in less than an hour of fighting.  The Confederates lost 1,500.

1965 - Edward H. White becomes the first American astronaut to walk in space as he steps out of Gemini 4 and spends 20 minutes in space held by a 25 foot tether.

1989 - A natural gas pipeline explodes in Russia's Ural Mountains just as two passenger trains pass.  The explosion and fireball derailed the trains and killed more than 500 people.

1989 - The Chinese government orders PLA tanks and soldiers to take control of Tiananmen Square at all costs.  The Square had been occupied by pro-democracy demonstrators for seven weeks.  By nightfall on the 4th, the Square had been forcibly cleared, killing hundreds and arresting thousands of demonstrators.

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