Archive for the ‘Politics’ Category

The End of the Man on the White Horse

October 2, 2015

imagesThe Man on the White Horse is a hoary staple of the political imagination. The hero, with integrity, ideals, and vision, the leader who will put things right. We all fall for it, at different times. And then wind up disillusioned.

Exhibit A is, of course, Barack Obama. I didn’t vote for him (my 2008 evaluation seems prescient now) yet grasped what his election meant to so many – who hoped he’d be a transformational leader. He is not that; not even an effective one.

But this is not just about Obama, it’s larger than him. The hopes we put in political leaders seem systemically doomed to disillusionment.



I was prompted here by reading about Indonesia’s still fairly new president, Joko Widodo. Seemed a really good guy, decent, honest, able. It was hugely encouraging that he beat a military blowhard cut from a mold that’s proven awful elsewhere. Alas Widodo so far seems a lackluster president and disillusionment is fast setting in.

I’ve written of Mexico’s President Enrique Peña Nieto, who also raised great hopes and started strongly. His administration is now floundering. And of a wonderful election in Sri Lanka unexpectedly throwing out an autocrat; but the new administration is floundering there as well.



And I wrote of Narendra Modi, with potential to lift India from its daft economic policies. But he seems to be operating on the theory that just being Modi will energize India’s economy, without his actually doing much; certainly not anything politically hard.

images-2Yet another Man on a White Horse who will probably go out on a donkey.

Now many U.S. voters are bedazzled by some truly ridiculous candidates (Trump, Carson, Sanders – yes, anyone labeling himself “socialist” today is ridiculous), imagining they could somehow march in and set the country right. How very silly.

*     *     *

The syndrome does appear systemic. Francis Fukuyama’s recent book, Political Order and Political Decay (see my commentary) sheds some light.



In past epochs leaders had scope to be more radical and achieve big things. But modern states do not allow for Napoleons or Bismarcks.

There are two big factors. The first is political structure. Some see today a concentration of political power, undermining democracy (the false notion of “buying elections”). But the greater truth is exactly the opposite. Advanced modern democracies disperse power so widely that nobody can get very much of it, including presidents. Proliferating opportunities for some interests to block others produce what Fukuyama called a “vetocracy.” So a president does not run the government, he’s merely an administrator. Obamacare was really just a modest tweak of our healthcare system, not a fundamental overhaul.

And voters may profess anger at the status quo but actually vote very conservatively to lock it in, timorous toward any real change, lacking imagination, and suckered by tired old formulas. Luxembourg’s Prime Minister Juncker famously said, “We all know what to do, we just don’t know how to get re-elected once we’ve done it.” So Brazilian voters last year confirmed a dysfunctional statist model, rejecting a classically liberal alternative, and the nation’s rot predictably deepens.

The second factor is the nature of government itself in advanced modern states, its sheer hugeness and complexity, forming a political interest and power center in its own right which is also, by nature, highly resistant to any reform or change.

Unknown-1The combination of these two factors makes any major policy effort like trying to turn around the Titanic. (Worse – the Titanic’s captain could change its course, slowly.) Already six decades ago, Truman said, “Poor Ike. He’ll sit there and say, ‘Do this! Do that!’ and nothing will happen. It won’t be a bit like the army.”

Government has a role in a modern society. We cannot get rid of it. Yet it is a fundamental mistake to look to government for solutions to societal problems today. Once that was reasonable, but no longer. We need ways of addressing issues that bypass government. Unfortunately, those are far from obvious.

images-4Well — at least no one can have any illusions about Hillary as a Woman on a White Horse.

Telling It Like It Is: My Presidential Campaign Speech

September 12, 2015

Unknown-1My fellow Americans:

I didn’t want to run for president, but alas now I must. Mr. Trump supposedly “tells it like it is.” Unfortunately he – and other candidates – tell it like it isn’t. But I believe Americans can face reality.

This is a great country, but it wasn’t anointed by God to be that always. It requires work and even sacrifice. It’s not “morning in America” now – it’s getting late in the day.

Problem One: we face financial ruin. Social Security, Medicare and Medicaid were great programs, as long as three or four times as many people were working (and paying taxes) as collecting benefits. Unknown-2But that ratio is inexorably falling as lifespans rise. If nothing is done, these programs will swallow up the entire federal budget, leaving no money for anything else.

As a nation, we’ve actually been spending way more than our income for years, borrowing the difference (much from China). We could do this thanks to historically low interest rates. But at some point the debt’s size will outgrow what the financial markets can tolerate, causing our interest costs to balloon. Then we’re fucked.

Ignoring all this is the Obama administration’s seminal, historic failure.

Like Winston Churchill, I offer nothing but blood, sweat, toil, and tears. However, we remain a very rich people, who can afford to take care of the less fortunate. What we cannot afford is welfare for the better off. Social Security and Medicare will be phased out for higher income people. Taxes will rise too.

imagesSome of that money will go to infrastructure, on which we’re way behind, threatening our status as a world-class country. That spending will create a lot of jobs. I call the program “America Works.”

Another reality is that we cannot insulate ourselves from global economic competition. But free trade benefits more Americans than it hurts. No more stupid whining about “shipping jobs overseas.” If a product or service can be produced better and/or cheaper in India or China, that’s where it will be produced. American businesses that cannot match them will fail and won’t be able to employ anybody.

And did you know our rate of creation of small businesses (responsible for most job growth) is way down? images-1We’ve made it increasingly hard for businesses to operate, what with all the taxation and regulatory hassles. For starters, Sarbanes-Oxley and Dodd-Frank must be repealed.

A lot of folks, concerned about inequality, think businesses make people poorer, with “profit” a dirty word. That thinking must end. It’s successful, thriving businesses, making money by producing things people want, that make everybody richer. Otherwise nobody has a job.

images-2But job skills that used to assure a good life increasingly don’t cut it in today’s world. The real inequality problem is not the 1% versus the 99%, it’s the well educated versus the less educated. I know, people have been yakking about education forever, and there’s no magic bullet. But a quarter of Americans dropping out of high school cannot be tolerated. A great expansion of school choice would inject a much needed competitive ethos. And we need a rethink on college costs, because subsidizing tuition only enables colleges to raise it.

On all these issues, I will work with both parties, seeking compromise and consensus. We must end the culture of partisan demonizing, and recognize that Americans of all political stripes all sincerely want what’s best for everyone, disagreeing only on how to achieve it. Nobody’s evil (or very few).

Unknown-3Foreign Affairs: no more “leading from behind.” That doesn’t mean rushing into wars. But President Obama got the balance wrong between caution and assertiveness, shredding American credibility and making a world much more disorderly and dangerous. America must take the lead and act resolutely to nip conflicts in the bud. There must be no reprise of Ukraine. And if we decide ISIS must indeed be fought, then Heaven help ISIS.

The UN, as a vehicle for international order, has long been broken, due to bad guy vetoes. I will push to create a new “League of Democratic Societies,” with strict membership criteria (like the EU’s), to assume the role the UN cannot.

One last thing.

On May 14, 1938, my mother stood on the deck of a ship as it passed the Statue of Liberty. She was a refugee from a murderous tyranny. America has always been the go-to place for people seeking better lives; and that’s been one of the key things that has made America great. images-3Because such people, willing to give up everything comfortable and familiar, with the ambition to start life anew, even risking their lives to get here – those are the best people. We need more of them.

Elect me and we’ll keep America great.

The Beautiful 14th Amendment, Birthright Citizenship, and Racism

August 30, 2015

In the question period after my recent slavery talk, someone asked, weren’t even Northern whites, after the Civil War, very racist?

images-3No! In fact, the so-called “Radical Republicans” then controlling Congress were the opposite of racist. Having fought a bloody war to free the slaves, they were determined to do right by them. Thus in 1868 they passed the 14th Amendment. Remember that an amendment requires two-thirds votes in each house of Congress plus ratification by three-quarters of states – hence a broad public consensus.

imagesIn the 1857 Dred Scott decision, the U.S. Supreme Court majority had stated that being “altogether unfit to associate with the white race, and so far inferior,” blacks could not be citizens, and indeed had “no rights which the white man was bound to respect.” The U.S. Supreme Court. Actual quote.

images-1But in 1868, the nation decided, with the 14th Amendment, that those people – of a different race, their ancestors dragged here in chains, despised and subjected to the most brutal degradation – would now be citizens. We stipulated that everyone born on this soil is a citizen.

Wow. What generosity of spirit. (You won’t find this mentioned in Howard Zinn’s rancid book, A People’s History of the United States.)

Birthright citizenship was actually not an obvious concept at the time, nor is it even today, in many countries. This was a truly radical enactment.

But there was more:

images-2“No state shall make or enforce any law which shall abridge the privileges and immunities of citizens of the United States; nor shall any state deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.”

Equal protection of the laws – a concept at the very heart of the American idea. The Fifth Amendment had already applied it to the federal government, but the concern in the 14th was to protect ex-slaves, against injustices by state authorities. (And note that it extends the protection not just to citizens, but to “any person.”)

And still further, the amendment contains this little gem, in Section 2: if, in any state, the right to vote is denied to any citizens, “or in any way abridged,” its congressional representation shall be reduced proportionately!

images-4Here again the aim was to protect blacks (whose vote was given by the imminent 15th Amendment). But Section 2 of the 14th was never enforced. Why not? While certainly black voting was long “abridged” throughout the South, it is easy to envision the practical and political obstacles to implementing Section 2.

Nevertheless, the 14th Amendment is a thing of great beauty. It burns with a crystal flame. It embodies the essence of what this wonderful country is all about. Its enactment leaves me awestruck at the broadmindedness and high moral purpose of the Americans of the time.

So you might think this amendment would be held sacrosanct – especially by people who spout talismanic reverence for the Constitution. But no. In fact, I doubt the amendment could pass today. Some Republicans, including several presidential contenders, call for repealing part of it. What a sad contrast with the Republicans of 1868. (So Trump “says what he really thinks.” Unfortunately what he thinks is disgusting.)

It’s birthright citizenship they hate. This is how far their anti-immigrant hysteria has gone. It’s not madness enough to build a wall, nor even to try to deport 11 million productive residents. Now they want to deny citizenship to people born here. Think how crazy this is. If not every child born here is automatically a citizen, then what makes your child a citizen?

But all this, like almost all talk of amending the constitution for various pet causes, is empty posturing, given the high ratification bar which, again, requires a broad national consensus.

images-5But I am confident that America rejects the view of the narrow-minded, bigoted few who would desecrate the Constitution by punishing people for their ancestry.

The Speech Hillary Won’t Give

August 26, 2015

My fellow Americans:

I am going to level with you about the e-mail controversy.

I did not have inappropriate e-mail with that server."

“I did not have inappropriate e-mail with that server…”

No, really, this time.

There is a kind of personality that finds it hard to admit making a mistake, let alone wrongdoing. The ego gets in the way. And I have come to recognize this in myself. Well, the first step in fixing a problem is to see that you’ve got one.

Let me start with something obvious – America has bitter political divisions. And there is an unfortunate tendency to believe people you disagree with are not just wrong but wicked – which contributes mightily to government dysfunction. Alas, I now realize that I myself have fed this syndrome.

So when the e-mail controversy began, I waved it off as just more political crap, a nefarious effort by my foes to cook up points against me – you know, “the vast right wing conspiracy.” Well, it is a fact that many people do hate me and my politics, and will do anything to bring me down. However – there’s a big difference between that and pursuing a legitimate issue. I have failed to recognize and respect that difference (until now).

Since 2009 federal regulations require all e-mails be preserved as part of an agency's record-keeping system

Since 2009 federal regulations require all e-mails be preserved as part of an agency’s record-keeping system

So let me be clear, once and for all, with no more defensiveness, self-righteousness, dismissiveness, political posturing, or legalistic hair-splitting: my handling of my State Department e-mails was wrong.

There. I’ve said it.

Let me be more specific. The key point is that in America we have a fundamental principle of open government; and that applies to communications by public officials on public business. I should have realized I was violating that principle by using a private server, under my exclusive personal control, for my State Department e-mails. And that it would look like I was hiding something. Me – Hillary – hiding something? Who could imagine such a thing? (You do understand irony.)

And then – then – after this thing blew up, and I was indeed accused of hiding something – what did I do? I erased all the e-mails that I – yes, I alone, with no oversight – judged to be personal. The nation was supposed to just take my word that they were personal. And then I had the server wiped clean, to make sure those thousands of e-mails could never be seen. Hiding something? Who, me? What was I thinking?

Me, who served on the Watergate committee, and well remembered the infamous 18-1/2 minute erasure on Nixon’s White House tapes.

Unknown-1Now, I have tried to explain before why I thought what I did made sense at the time. I could go through all that again, but you know what? To quote a certain Secretary of State, “What difference does it make now?” Because the bottom line is that for all my rationalizations, it was a big boo-boo, and if I could have a do-over, I’d do things differently.

Well. Whew. This has been hard for me. But I feel better now. Confession is cathartic. And the silver lining in making mistakes is that you can learn from them. Let me tell you, I’ve learned a big lesson – which I truly feel will make me a better person, and a better public servant, in the future.

images-1Let us now move forward and see what we can do about tackling together the challenges our nation faces.

So please, please, please forgive and forget, and give me power, you goddamned bunch of ingrates, saps and morons . . . is this mike still on? Oh shit.

The Big Apple Nipple Crisis

August 24, 2015

So it has come to this.

What do you get when you mash up a) prudishness, b) a nanny-state mentality, and c) politically correct gender neutrality?

Legislation to ban public toplessness – male and female!

Photo by Julie Jacobson, Associated Press

Photo by Julie Jacobson, Associated Press

The casus belli is the “desnudas” of New York’s Times Square – gals with breasts covered only with body paint who pose for tourist photos, for tips – which Bronx Democratic State Senator Ruben Diaz* (a pentacostal minister) wants to banish. Casey Seiler’s droll reportage in the Albany Times Union quotes Diaz: “If equality laws are in the way, let’s push for equality so neither men nor women can go topless in our streets.” He seemingly said this with a straight face.

Missing from the story is why this is a problem requiring legislative action and penal laws. Diaz says, “so families can enjoy New York.” Many members of families enjoy seeing breasts (I do). But seriously – okay, semi-seriously – if the concern is about children, I doubt that any, in today’s American culture, will truly be morally corrupted by seeing painted breasts. Indeed, it could be a good teaching moment. And if you’re Amish, or whatever, and really want to shield your kids’ tender eyes, why then, don’t visit Times Square. Which is, after all – hello – Times Square, for cryin’ out loud.

imagesIn the Twenty-first century, this story would have been ridiculous enough, without the added fillip of banning male toplessness too, in some brain-dead application of gender equality. Need I really explain (well, I guess I do) that it’s not invidious discrimination when laws make reasonable distinctions based on differing facts and circumstances? And that male and female chests differ? (Vive la difference.)

As to the latter point, please refer to an incisive and erudite discussion in my 8/14/14 blog post.

The Times Union also notes that NYC Mayor de Blasio “has convened a task force” to address the desnuda crisis. It’s reassuring that New York is so free of serious problems that public officials have time for nipple issues.

* Not Assemblyman Felix “Mr. Nanny State” Ortiz!

The Great (?) Debate – Fox News Trumped

August 8, 2015

imagesIf (as we’re told) Fox News was aiming to derail Trump, they sure weren’t clever like a fox. The “debate” could hardly have been better contrived to boost him. When he afterwards complained of his treatment by Fox, did I detect a wink?

Previously I’d labeled meaningless Trump’s 20-25% poll standings. Hardly broad support, mostly mere name recognition, and anyway a certain percentage in polls will always endorse craziness.* It seemed a given that Trump would never win the nomination (and David Brooks still thinks he’s not truly a candidate). But now I’m not so sure.

I would have asked questions like, How will you deal with the looming explosion of Social Security and Medicare costs? A rising China and a stroppy Russia? UnknownISIS and the Mid East? Millions of undocumented residents? Our dysfunctional tax system? Foreign economic competition? A growing divide between the more and less educated? But while some of these issues were touched upon, most questions were more like When did you stop beating your wife?

Starting with the very first, which was tailored to spotlight Trump and his bombastic pugnacity — actually attractive to many voters. Unknown-1Likewise for the other seemingly taunting questions lobbed at him. That kind of mud-wrestling is his forte. Better to have probed wonky policy nuances (at least revealing his ignorance).

And it was not your imagination that Trump got more airtime than anyone. I checked. He did, by a lot; more than double what some other candidates got. Great going, Fox.

But one suspects the true aim was not fairness, nor to dent Trump, nor to inform. It was to entertain. Fox did gain a huge audience. The Romans threw Christians to lions; Fox threw pols to Trump.

Anyhow, the debate simply served to make Trump seem a larger, more powerful personality than all the other (comparatively) anodyne, pale, typical politicians, sucking away all their air. Unknown-2I’m reminded of Osama bin Laden’s dictum: “When people see a strong horse and a weak horse, by nature, they will like the strong horse.”

Never mind what happens when you try to ride that bucking bronco.

*Also, many Trump backers are quintessential non-voting types.

Are Men Necessary? (Is Hillary?)

August 6, 2015

UnknownWhen I reported buying, at a used book sale, Maureen Dowd’s Are Men Necessary? I said I’d let you know the verdict after reading it. I bought it because Dowd is – can I say this? – one bitching writer. In her columns she’s a zingermeister who loves playing with words (though that can get wearying at times).

imagesThe book is basically about what used to be called “the battle of the sexes.” Dowd, calling herself a feminist, unsurprisingly takes the side of women. But she’s an equal-opportunity cynic, skewering both sides of every controversy. While she doesn’t like Clarence Thomas, she thought his feminist critics were disingenuous, using the sexual harassment stuff as cover for what was really a (failed) political take-down. Unknown-1And Dowd is scathing about the hypocrisy of those same feminists, so censorious toward Clarence Thomas, but all too willing, because of politics, to give Bill Clinton a pass regarding Monica (not to mention Paula Jones, Gennifer Flowers, and Kathleen Willey). Dowd’s chapter on the episode has a pages-long riff about how he became obsessed, deranged, by thoughts of Monica and sex. But it turns out the “he” is Kenneth Starr (Clinton’s prosecutor).

Dowd also drops a dime (writing in 2005) on Hillary. It’s a good reminder (I haven’t forgotten, though most people seem to have) about all the unseemliness: the mysterious profits trading commodities futures; her healthcare debacle; images-1and how on leaving the White House the Clintons “backed up the truck” and made off with $86,000 worth of furnishings. Et cetera. Dowd doesn’t even mention the mystery of the subpoenaed Rose Law Firm records, the Marc Rich pardon, the Lincoln Bedroom, and to me the most disgraceful of all, Travelgate.)

If you’re counting, that’s eleven past scandals (not even considering Whitewater, or the new one, e-mailgate). Do we really want these grifters back in the White House?

But the book is mainly about the male/female thing. images-2One chapter concerns orgasms, with Dowd wondering why women have them at all, evolutionarily speaking, since they’re unnecessary for procreation. She winds up theorizing that it makes women favor men considerate enough to pleasure them, who will probably be better daddies too. But my wife pointed out that orgasmic contractions help move sperm toward the business end of the plumbing. Unknown-2And I thought Dowd missed the most obvious explanation: orgasms make women want to copulate. (Any Muslim practitioner of female genital mutilation would have told her that.)

Here’s an example of Dowd’s sardonic style: “deep down, beneath the bluster and machismo, men are simply afraid to say that what they’re truly looking for in a woman is an intelligent, confident and dependable partner in life whom they can devote themselves to unconditionally until she’s forty.”

That’s a good description of my own marriage, minus the last bit (at 56, my wife is still a keeper). But it may be true for the kinds of people Dowd hangs out with in her high-powered life as a big-time syndicated columnist.

Unknown-3This was a problem I had throughout the book. For example, Dowd talks about cosmetic reparation, like Botox, which everybody now does – everybody – men included. Well, maybe everybody in Maureen Dowd’s fey cocktail party milieu. But she has nothing to say to, or about, ordinary “everyday” folks. The book is mildly amusing, but if you want to find out whether men are necessary on Main Street, look elsewhere.

The $15 Minimum Wage – Money From Heaven

July 29, 2015

UnknownDo you favor a $15 minimum wage? Nobody asks where the money comes from. Heaven, I guess.

We’re told that if you give low wage workers more cash they’ll spend it, great for the economy. As though it’s free money.



Or else the money is imagined to come out of business profits. When pigs fly. It will actually come from higher prices. And since low wage industries (like fast food) often serve poorer people, the extra money earned by low wage workers will ultimately come from . . . low wage workers.

Economics 101 says that when prices rise, demand falls. Raise the price of low skilled labor, and businesses will buy less of it. They’ll seek ways to automate instead (more self-service checkout machines if cashiers become too expensive, for example), which is already happening. imagesHigher minimum wages can only accelerate that – bad news for low skilled workers – who, once unemployed, often stay unemployed.

People imagine businesses can just pay more because they have profits to spare. In reality, profit margins tend to be pretty thin – like around 3% of sales for supermarkets. There’s no room for fat because in a globalized economy every business competes with every other. McDonald’s doesn’t compete just against Burger King and Wendy’s, but every other food option including home cooking – and indeed against every other conceivable product people could decide to buy in lieu of big macs. So prices must be kept as low as possible. Force prices up, due to higher minimum wages, and a business may become non-competitive. Bye bye jobs.

Yet defying this economic logic, advocates of higher minimum wages claim studies show they don’t actually kill jobs. Maybe so – in the short term at least – and if the rise is small, staying under 50% of median wages. But $15 would double the minimum wage, to 77% of the median. The long term impact on low-skill jobs is frightening.

Unknown-3We’re also told government is in effect subsidizing businesses like McDonald’s, that don’t pay a living wage, with food stamps and so forth filling the gap. That’s twisted logic. After all, plenty of people who get food stamps earn nothing. So you could equally say McDonald’s payrolls actually reduce what government must provide. Anyway, we give food stamps, and other welfare, because we as a society deem it the right thing to do. We shouldn’t expect (or force) private companies to do that for us.

In fact, higher minimum wages are an ineffective way to combat poverty. The Congressional Budget Office estimates that only 20% of the income benefits would go to those below the poverty line. (Most minimum wage workers are not primary family breadwinners.) So programs like food stamps, and the Earned Income Tax Credit, are much better targeted for helping the poor – without pricing low skill workers out of the market.

But New York State is currently in a paroxysm of political pandering on this issue. Governor Cuomo set up a board to assess fast food minimum wages. Legions of workers duly came and testified that $15 would be peachy. The outcome was pre-ordained. Our local Times-Union has denounced it – because the $15 wage will be phased in, not immediate!

Never mind the absurdity of singling out one category of jobs (and, unfairly, only in chain restaurants). Or how “fast food” can actually be defined. Unknown-4Or that New York, due to high taxes, already high unionized wage costs and other costs of all kinds, and the most burdensome bureaucratic regulation, is just about the least economically competitive state in the union, making large swathes of upstate into job deserts.

Politicians in this free-money fantasyland will never have to answer for the economic consequences. Voters won’t connect the $15 minimum wage with unemployment higher than it would otherwise have been. Just as public officials don’t answer for all the other ways they’ve run the state’s economy into a ditch. Indeed, the resulting tough economic conditions just encourage more populist politics, preening “compassion” and doubling down with yet more of the economic follies that got us here.*

I too have compassion for fast food workers, and wish they could earn more. It’s a hard life, and I’m lucky to be spared it. (Though I did work one very crummy job in my teens.) But the answer is not to wave a magic wand and expect Heaven to cough up the cash. Instead it’s to stop making it harder and costlier for businesses to operate. images-1And to make sure more people get the education they need for decent jobs – at least finish high school (too many don’t). A key reason fast food jobs pay so little is because there’s a vast oversupply of poorly educated people to fill them.

* Like rent control — more effective than bombing for destroying affordable housing.


July 26, 2015

imagesYou expect some pithy comments on Trump statements. I won’t so dignify them.

That a billionaire TV personality with hair issues would get a lot of attention as a “presidential candidate” (in quotes because his chances are zero) is not in itself remarkable. UnknownAnd his statements are not due to stupidity. Too many people call others they disagree with “stupid” (like George W. Bush). Nobody gets high office or great wealth being stupid.

So, why does Trump behave as he does? He must calculate that, on some level, it works for him. That’s what’s disturbing.

Polls showing Trump with 24% atop a very divided Republican field are meaningless; most respondents at this stage are just shooting in the dark. But still. That many would name Trump bespeaks a lack of civic seriousness. Trump’s campaign is just one big middle finger, attracting middle finger type people.

The media bears some responsibility for debasing a presidential election. But one can hardly blame them; the public loves a freak show. Jon Stewart is certainly having a ball. Yet what a shame that it detracts attention from worthy candidates like John Kasich who have important things to say. America faces big issues and shouldn’t waste time with Trump talk.

images-1Kasich won’t likely even get into the TV debates, which will be limited to ten top-polling candidates – a meaningless criterion when most are in single digits. Trump, though, will make the cut, to ensure a circus atmosphere. But in any case a so-called “debate” with ten contestants will be a poor vehicle for informing the public.

It probably won’t ultimately matter. With most other candidates knocking themselves out to out-extreme each other, Jeb Bush will be the nominee.

images-2Maybe I just need to lighten up and stop being a grumpy old man.

Greece At The Rubicon

July 7, 2015

UnknownWhen the Euro was set up, they knew it was a fraught proposition, binding themselves to each other financially. The Germans in particular, fearful about giving up the strong Deutschemark, insisted on strict penalties for any country whose deficit breached 3% of GDP. Of course it was Germany itself, and France, that soon violated this, but the matter was fudged. Not a good precedent.

Meantime, there were also stringent fiscal criteria for admission to the Euro. So how did Greece get in?Unknown-1 It cooked its books, and lied.

Greece’s economy has long been weighed down by clientelistic politics producing an over-bloated state sector, with lots of well-paid unneeded government jobs, fat pensions and benefits, while tax avoidance became endemic, and red tape (giving all those government workers something to do) strangled business. Thus Greece could not pay its bills, borrowing heavily to close the gap. This is what was covered up. But about five years ago the retsina hit the fan when the hole became too deep, requiring a bail-out.

Reasonably enough, the Europeans (mainly Germany) insisted that Greece clean up its act as a condition for the bail-out – the “austerity” we hear so much about. In hindsight, they may have overdone it. You’d want to wean the country away from profligacy, but not crush its economy, because economic growth is the only hope for ever paying Greece’s debts. Greece did accept some reforms, but did suffer a pretty severe economic contraction, with 25% unemployment, which didn’t help matters.

Unknown-2Part of the problem is that lefty Greeks just don’t get it that, to support the lavish government salaries and other spending, you need an economy that actually produces something that earns money. Of course, that’s dirty capitalism. Feh. So Greece’s reforms did little to improve economic productiveness.

And the reforms in question, the so-called “austerity,” merely moved Greece from extreme profligacy to moderate profligacy. This shows just how deep the hole is, and suggests the Europeans probably also erred in failing to bite the bullet of just writing off a major part of Greece’s debt.

Unknown-3Through all this, Greeks have cast the Germans as villains, seeing no reason why they shouldn’t go back to the old ways of living high on the hog on borrowed money they can’t pay back. The Germans see no reason why, having themselves undergone, a decade ago, the same sort of painful reforms now asked of the Greeks, they should have to work to age 65 and pay taxes so the Greeks can retire at 57 with fat pensions and avoid taxes. A classic grasshopper-and-ant story.

Then in January the Greeks elected the Syriza party, a bunch of irresponsible leftists with a platform of rejecting “austerity” and restoring the days of wine and roses. images-1They danced in the streets exulting in this triumph of wishful thinking. The new government, led by Alexis Tspiras, proceeded to make a hash of further bail-out negotiations and to shred any vestige of trust by Europeans. And then, just as it seemed possible that a deal might nevertheless be struck, Tsipras kicked over the table by calling a snap referendum on whether to accept the bail-out terms.

He urged Greeks to vote No, saying they could have their cake and eat it too – twice over – that they could reject Europe’s terms yet stay in the Euro – and, indeed, could reject the deal and see off austerity, returning to their old cushy clientelistic habits. With what money? Who knows.

This insane fantasy Tsipras cast as a matter of national pride – standing up against European (mainly German) blackmail!

Unknown-5Two things happened in the week before the vote. First, Greece defaulted on a scheduled debt payment; a first for a “developed” country. And Greece’s banks all but closed (for lack of money), allowing only small ATM withdrawals, throwing much of the economy and many people’s lives for a loop.

You might think this foretaste of what could lay in store would give the Greeks pause in the referendum vote. You’d be wrong. This vote was a matter of pride, remember. The Greeks are a proud people – proud enough to borrow billions and tell the lenders “Fuck You.” Unknown-4And so they did – a resounding 61% voted No. And again the grasshoppers danced in the streets to celebrate their courage.

What happens now? Tsipras justified the referendum “No” as strengthening his hand to get a better deal from the ants who, of course, lacking backbones, might just cave. But the Europeans had said they’d construe a “No” as a vote to exit the Euro. Greeks have indeed made a courageous bet, and if it comes wrong, those who thought “austerity” was rough ain’t seen nothin’ yet.

It’s not really clear how a country can be kicked out of the Euro. But perhaps it would be as simple as the European Central Bank supplying no fresh Euros; after a time Greece would effectively be forced into a different currency.

The Economist believes Europe should think twice before such a drastic step into uncharted territory. It could pull a thread that unravels the whole fabric. And you wouldn’t want a failed state in the continent, with all the potential tsuris that could entail. Furthermore, Greece could be thrown into the arms of Putin, with whom Tsipras has been playing footsie. But The Economist also thinks that if Greece stays in the Euro, the kinds of crises we’ve seen will keep repeating basically forever.images

My view, FWIW, is that Europe should cut off this gangrenous limb once and for all. A Greece-free Euro zone should ultimately be stronger and more stable. And there’s the issue of moral hazard; Greekish behavior should be seen to have consequences, lest others (like Spain) be tempted to follow it.

But Europe should also ready humanitarian aid packages for Greece. We’ll see if the Greeks spit in their faces then.


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