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Posts Tagged ‘Greece’
February 2nd, 2015 at 8:03 pm
White House Considering More ObamaCare Exemptions

Here’s everything you need to know about the corrupting tendencies of the modern administrative state.

When the ruling elite’s social engineering policies threaten to weaken its grip on power, the law can be bent in any way that pleases them.

Exhibit A is a news article from the New York Times, which begins, “Obama administration officials and other supporters of the Affordable Care Act say they worry that the tax-filing season will generate new anger as uninsured consumers learn that they must pay tax penalties and as many people struggle with complex forms needed to justify tax credits they received in 2014 to pay for health insurance.”

The solution: “The White House has already granted some exemptions and is considering more to avoid a political firestorm.”

You read that correctly. If lots of people will be angry because ObamaCare is slated to work as designed – by ensuring that the people who received insurance subsidies actually qualified for them – it’s completely permissible to just exempt them from compliance.

This is interest group politics run amuck.

It’s been said before, but it’s worth repeating. If Mitt Romney had said during the 2012 presidential campaign that all he needed to repeal ObamaCare was to be elected so he could not enforce the law, the Left would have been up in arms swearing to sue him in court for dereliction of duty. When Barack Obama does the same thing it’s suddenly accepted as executive discretion.

One day liberals may see a conservative reap a policy windfall thanks to Obama’s careless actions. If this is the way it’s going to be in the future, don’t be surprised to see presidents of every partisan stripe erode the rule of law by carving out exemptions for their political base. Today it’s the working poor. Tomorrow it might be trust fund kids who see their capital gains taxes go uncollected.

And then, we’ll be Greece.

June 6th, 2012 at 2:36 pm
Europe: In For a Penny, In For a Pound
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Pity our poor friends in Europe. They just can’t seem to stomach the lesson that the faltering state of the continental monetary union has made all but impossible to ignore. Rather than making a clean break from the common currency, it now appears that the smart set wants to double down. This item, appearing earlier this week in the Wall Street Journal, is nothing short of chilling in its implications:

Germany is sending strong signals that it would eventually be willing to lift its objections to ideas such as common euro-zone bonds or mutual support for European banks if other European governments were to agree to transfer further powers to Europe.

If embraced, the move would deepen in fundamental ways Europe’s political and fiscal union and represent one of the boldest steps taken by the bloc since the euro was launched. Germany has never before been willing to discuss the conditions it believes necessary to move toward assuming common risks within the euro zone. Now, although the end may be a long way off, it appears willing to discuss those conditions.

“The more that other member states get involved with this development and are prepared to give up sovereign rights to get European institutions more involved, the more we will be prepared to play an active role in developing things like a banking union,” a German official familiar with the discussions told The Wall Street Journal. “You can’t have one without the other.”

Translation: the Europeans are seriously considering throwing the car in reverse and seeing just how far they can push the speedometer. It’s true that an economic union without a matching political consolidation was always doomed to fail (the practical effect has been Southern Europe living off the North), but the move towards a true United States of Europe brings to mind James Madison’s observation from Federalist #10 about destroying liberty in order to cure the problem of political faction: the cure is worse than the disease.

A continent-wide government will destroy all pretense of national sovereignty throughout Europe, leaving the bureaucrats of Brussels to steer a bold new course that will vanquish the national character of some of the world’s proudest nations, perpetuate a failing economic model, and cede previously democratic powers to unelected technocrats.

Let us pray that Europe doesn’t go down this road. If it does, the burden of Western leadership will fall even more disproportionately on American shoulders than it does already.

May 30th, 2012 at 1:08 pm
Greek Liberals’ Economic Recovery Plan: Lie to the Rest of Europe
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It’s almost hackneyed at this point to evoke Greece as a warning sign to the rest of the Western World; as a promise of what’s in store should the artificial decadence of the welfare state completely strangle individual initiative in developed nations. Yet there’s a reason that California on the Aegean is always the cautionary tale of choice: when it comes to outright political absurdity, the birthplace of democracy is constantly outdoing itself. The most recent example — which has to be read to believed — comes courtesy of James Angelos reporting in the Wall Street Journal:

Greece’s radical left party has upended the country’s politics with an idea as simple as it is seductive: Athens can renege on the deals it made in exchange for a bailout, and still remain in the euro.

Greece’s future, and possibly that of Europe’s monetary union, may depend on how many Greeks buy into the idea.

The Coalition of the Radical Left, known as Syriza, is competing with Greece’s conservative New Democracy to become the biggest party in Parliament in June 17 elections that could send further shock waves through Europe …

Syriza leader Alexis Tsipras, a 37-year-old former Communist youth activist, promises that despite its dire financial straits, Greece can halt austerity programs, restore social spending and nevertheless continue to receive the payments from the euro zone and the International Monetary Fund that keep it from bankruptcy.

The repeated warnings to the contrary from Europe and the IMF are simply efforts to blackmail Greece into doing what they want it to do, Mr. Tsipras says.

A few facts about Greece to consider in light of Mr. Tsipras’s demagoguery. This is a nation where public employees have no compunction about taking monthly paychecks 14 times a year (yes, you read that right: 14) and where tax evasion is so widespread that it’s estimated that 30 percent of the national economy is in the black market. And now the proposed solution from one of the nation’s two major political parties is to welch on a deal with the rest of the continent?

Greece is experiencing an economic crisis, to be certain. But it looks increasingly like that is only a symptom of a deeper moral crisis.

April 13th, 2011 at 4:50 pm
Greece: When Good Men Do Nothing

A sobering column by a Greek politician in today’s Wall Street Journal shows that Stalin-style Communism is making a comeback in a nation teetering on the edge of financial meltdown.  The breakdown in policing has led to countless acts of violence – including murder – that go unpunished:

Many argue that Greece’s disintegration is the unavoidable consequence of the government’s attempt to enforce fiscal austerity. This seems doubtful. This meltdown can be seen as the product of the totalitarian left’s open attempt to exploit the economic crisis and destroy Greece’s existing democratic and economic institutions. What we are witnessing is not a descent into chaos, but a descent into organized lawlessness. Sowing pandemonium and forcing Greece to default will, according to Greek Stalinists’ analysis, bring the revolution nearer.

What makes the situation worrisome is not so much the political strength of this movement. After all, the Communist Party and the Coalition of the Radical Left together claim no more than 13% popular support.

The problem, rather, lies with the political and ideological passivity of the parties that do represent Greece’s broader middle classes. The tolerance these democrats have shown toward their totalitarian counterparts has allowed the latter to play a leading role in shaping Greek public discourse. Do they imagine the favor would be returned if the Coalition of the Radical Left were in charge?

Unless Greece’s political elite realizes the seriousness of what’s happening and acts now to re- establish the rule of democratic law, their efforts to deal with Greece’s economic problems will have been in vain.

September 9th, 2010 at 7:27 pm
How Greeks Killed Their Own Civil Society

It isn’t often that we in America get reminded about the importance of reasonably enforcing tax laws.  Thanks to the Greek experiment in systematic tax evasion that undergirded that country’s financial collapse, we can all rest assured that a sustained culture of lying leads to the death of civil society.

The Greek state was not just corrupt but also corrupting. Once you saw how it worked you could understand a phenomenon which otherwise made no sense at all: the difficulty Greek people have saying a kind word about one another. Individual Greeks are delightful: funny, warm, smart, and good company. I left two dozen interviews saying to myself, “What great people!” They do not share the sentiment about one another: the hardest thing to do in Greece is to get one Greek to compliment another behind his back. No success of any kind is regarded without suspicion. Everyone is pretty sure everyone is cheating on his taxes, or bribing politicians, or taking bribes, or lying about the value of his real estate. And this total absence of faith in one another is self-reinforcing. The epidemic of lying and cheating and stealing makes any sort of civic life impossible; the collapse of civic life only encourages more lying, cheating, and stealing. Lacking faith in one another, they fall back on themselves and their families.

To read more about the fantastical confluence of events that bankrupted Greece, read Michael Lewis’s Vanity Fair article here.

September 3rd, 2010 at 1:02 pm
Somebody Call Joe Klein’s Pharmacist
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Regular readers may know that Time Magazine’s Joe Klein has become something of a white whale to your humble blogger. He is to me what Tom Friedman is to Jonah Goldberg.

When Klein isn’t busy singing in the Obama gospel choir (along with Jon Meacham, Ezra Klein, Eugene Robinson, and everyone else who thinks Obama is failing because Americans are too base to grasp his transcendence), he’s usually nursing exceptionally dumb ideas for political reform. You know, the type that would grind a sophomore political science seminar to a halt?

At the moment, Klein’s problem du jour is that the American system of government doesn’t work effectively — by which he means it doesn’t provide the outcomes he likes. What does Klein propose as a tonic? A system that blends the worst aspects of populism and progressivism and then marinates with a throwback to the ancient Greeks. Behold:

But what if there were a machine, a magical contraption that could take the process of making tough decisions in a democracy, shake it up, dramatize it and make it both credible and conclusive? As it happens, the ancient Athenians had one. It was called the kleroterion, and it worked something like a bingo-ball selector. Each citizen — free males only, of course — had an identity token; several hundred were picked randomly every day and delegated to make major decisions for the polis. But that couldn’t happen now, could it? Most of our decisions are too complicated and technical for mere civilians to make, aren’t they?
Well, with tough questions like that Klein certainly couldn’t have a response. Or could he???
Actually, the Chinese coastal district of Zeguo (pop. 120,000) has its very own kleroterion, which makes all its budget decisions. The technology has been updated: the kleroterion is a team led by Stanford professor James Fishkin. Each year, 175 people are scientifically selected to reflect the general population. They are polled once on the major decisions they’ll be facing. Then they are given a briefing on those issues, prepared by experts with conflicting views. Then they meet in small groups and come up with questions for the experts — issues they want further clarified. Then they meet together in plenary session to listen to the experts’ response and have a more general discussion. The process of small meetings and plenary is repeated once more. A final poll is taken, and the budget priorities of the assembly are made known and adopted by the local government. It takes three days to do this. The process has grown over five years, from a deliberation over public works (new sewage-treatment plants were favored over road-building) to the whole budget shebang. By most accounts it has succeeded brilliantly, even though the participants are not very sophisticated: 60% are farmers. The Chinese government is moving toward expanding it into other districts.
So, to review:
  • The U.S. should be taking lessons on democracy from the People’s Republic of China.
  • The system obviously works because the Chinese chose to expand sewage treatment over roads — in a country that just had an 11-day, 74-mile traffic jam.
  • All farmers are apparently idiots.
  • We ought to replicate the particulars of the Greek system that executed Socrates and routinely put losing military commanders to death.
  • The Federalist Papers’ explicit recognition of the supremacy of a republican form of government over a democracy was only meant to hold until things got really hard.
  • Joe Klein thinks the ideal form of organizing a free people is modeled off of a game of Bingo — which one imagines is perhaps how he got his column.
June 7th, 2010 at 7:36 pm
The European Financial Crisis Explained
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From the Australian Comedy duo of Clarke and Dawe. Sadly this may be more accurate and succint than anything you’ll see on network news:

May 20th, 2010 at 5:02 pm
The Beginning of an Economic Avalanche?
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No, I’m not referring to the recent precipitious decline in global stock markets (though there may be a connection). Instead, I’m talking about the tidal wave of state pension obligations that threaten to put the country’s entire economic infrastructure in peril. From a story in today’s Financial Times:

Joshua Rauh, associate professor of finance at the Kellogg School of Management at Northwestern University said that, without reform, some state pensions might run out within the decade. By 2030, as many as 31 states may not have the money to pay pensions. And, if these funds exhaust their assets, the size of payments for the benefits they have promised will be too large to cover through taxes, putting pressure on the federal government for a bail-out that could potentially cost more than $1,000bn, he says.

For those of you not accustomed to the British rendering, that last number would normally be referred to stateside as a jaw-dropping “trillion” .

But how could this scenario have ever gotten this far? The FT piece explains:

Estimates put the unfunded liabilities at between $1,000bn and $3,000bn after years of states promising benefits but not contributing enough in both good times and bad to cover them.

Many states base their calculations on an 8 per cent annual return and use an accounting method called smoothing, which staggers gains and losses over several years, two factors that some observers warn could mask the size of the shortfalls. The problem has come to the fore with the financial crisis and recession. Pension funds, like most money managers, suffered losses. The tax revenues that fund annual contributions to pensions, along with essential services such as healthcare and education, have plummeted, leaving little room to reimburse the losses.

Assuming that governments can get themselves out of this morass before it’s too late, the only way to prevent a reoccurence is to switch public-sector pensions from “defined benefit” plans to “defined contribution” plans. Mort Zuckerman did a good job of showing why over at U.S. News and World Report earlier this week:

[New York City] pensions are “defined benefit” plans, which are more expensive since they guarantee specific benefits on retirement.

On the other hand, private sector workers in the survey were mostly in “defined contribution” plans, which means that, unlike their cushioned brethren in the public sector, they do not have a pre-determined benefit at retirement. If New York City were to require its current workers to pay contributions toward health insurance equal to the amounts paid by the employees of local private sector firms, the taxpayer savings would approximate $628 million a year. In New Jersey, [Governor Chris] Christie says government employee health benefits are 41 percent more expensive than those of the average Fortune 500 company.

We know when the next bubble is coming.  But with the coming attractions provided by belligerent bureaucrats in Greece, which American politician will be the first to throw himself in front of the union gravy train?

May 18th, 2010 at 11:01 am
Ramirez Cartoon: GREECALIFORNIA
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Below is one of the latest cartoons from Pulitzer Prize-winner Michael Ramirez.

View more of Michael Ramirez’s cartoons on CFIF’s website here.

May 12th, 2010 at 1:54 pm
Don’t Just Stand There; Do What Bush Did!

The White House phone bill might be ticking sharply north this month because, lo and behold, it turns out there are more politicians in desperate need of President Obama’s perpetual insistence to “act boldly.”  On the heels of reports that he cajoled German Chancellor Angela Merkel into forsaking her voters and bailing out Greece comes this breathless update: Obama is twisting arms in Spain!

Spain is one of the “PIGS” countries, a group of economic basket cases including Portugal, Ireland, Greece, and Spain.  Like the others, Spain is suffering from extreme budget deficits caused by rampant government spending to prop up unsustainable social welfare programs.  Obama called to convey some tough love:

Mr Obama’s call yesterday to Mr Zapatero added an American voice to European pressure on Spain.

Mr Zapatero has so far shied away from structural reforms opposed by trade unions but is now facing new calls from EU leaders to slash spending again and tackle his country’s economic crisis.

If it’s true that Obama is urging Spain to cut spending, then three cheers for fiscal sanity!  Unfortunately, there are no indications that approach is being seriously considered on this side of the pond.  As proof, the Obama Administration is holding out a curious example for Europeans to follow: the Bush era’s Troubled Asset Relief Program (TARP).

American officials urged that Mr Sarkozy and Mrs Merkel recall the U.S. lesson of 2008-2009 when the Bush administration persuaded a reluctant Congress to approve a massive $700 billion Troubled Asset Relief Program.

While politically unpopular, the U.S. rescue plan convinced markets that authorities were serious about keeping banks afloat.

Or it convinced those who play in the markets that the American government wasn’t serious about letting the invisible hand apply the rules of risk and reward to credit default swaps.  If anything, TARP is a monument to the kind of taxpayer funded subsidy for bad behavior that should be avoided by other countries because it socializes the risk yet personalizes the reward.

If European leaders want to speed the decline in trust for economic “experts” by all means, TARP away – just don’t whine when China buys chunks of real estate for pennies on the Euro.

H/T: Daily Mail (UK)

May 10th, 2010 at 4:43 pm
Dow Surges with News of Trillion Dollar European Bailout Fund

After an erratic end to last week’s trading filled with ‘typos’ and frozen stocks, the Dow and markets all over the world are rallying on news that the European Central Bank will create a trillion dollar fund to buy government and private debt to keep lending liquid.  With the help of the IMF and the Euro-using nations, the fund will prop up troubled governments.

The response of surging stock markets does not mean this is a wise and sound policy.  Investors merely feel the momentary comfort that there will be enough stability in the short term for money to be made.  But this plan is little different from the $50 billion rainy day bailout fund batted around the debate for financial reform here in the United States, other than the sources of funding.

Such measures create perverse incentives for market actors, whether a country like Greece, or private firm like Goldman Sachs, saying, “Go ahead, and continue to take big risks.  Don’t worry about the consequences.  We’ve got your back.”  Why should Greece tackle its massive public sector union crisis?  Why wouldn’t Wall Street firms go out on a limb for a big potential gain, if there were a multi-billion dollar bailout fund to catch them if they fall?

Markets are all about incentives.  Rainy day bailout funds create the wrong incentive.

May 10th, 2010 at 2:44 pm
Fueling the Greece Fire

“Beware Greeks bearing gifts,” the Iliad-inspired saying goes.  Perhaps now we should amend it to add “especially those bought with on sovereign credit.”  Fresh off a visit to ground zero in Athens, Bill Frezza makes his contribution on how to handle Greece’s imploding debt crisis:

Throw Greece out of the European Union. Let them default on their debts. Teach buyers to beware before they invest in sovereign bonds. Dare Greece to print Drachmas by the wheelbarrow. Put the whole country on the public payroll then challenge them to demonstrate what a truly egalitarian society looks like. Maybe a dramatic spectacle of what a workers paradise looks like under the media’s glare will teach us what’s in store if we don’t change our ways.

Democracy is broken. You can’t mix Freedom and Free Lunch. One or the other has got to go.

Like the Trojans, it’s time for the Greeks to reap the consequences of some very poor decisions.

H/T: RealClearMarkets

May 10th, 2010 at 1:44 pm
Fannie, Freddie, Obamanomics & Greece: Still Not Noticing the Parallels?
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Two weeks ago, in a commentary entitled Obama’s Big Fat Greek Bailout, we noted the alarming parallels between Greece’s meltdown and America’s trajectory.  Following years of unsustainable welfare-state spending, Greece’s deficit stands at 13% of gross domestic product (GDP), and its cumulative debt stands at 110% of GDP.  Unfortunately, America isn’t far off, with a deficit approaching 11% of GDP and cumulative debt under Obama heading toward 90% of GDP.

Well, other observers are beginning to draw the same parallel we did.  Robert Samuelson notes his commentary The Welfare State’s Death Spiral that “virtually every advanced nation, including the United States, faces the same prospect.”  Pat Buchanan echoes our observation in his commentary The End of La Dolce Vita:

For the nations of Europe have made commitments beyond their capacity to keep, given their growing debts and aging populations.  And America is not all that far behind.  While the federal deficit is not 14% of GDP, it was 10% in 2009 and may reach 11% in 2010.  Trillion-dollar deficits are projected through the decade, bringing the public debt – held by citizens, companies, foreign governments and sovereign wealth funds – close to 100% of GDP.  And the unfunded liabilities of Social Security, Medicare and federal pensions rival those of Western Europe.  States like California and New York, larger than Greece, look a lot like Greece.”

And today, we wake up to the news that Fannie Mae seeks yet another $8.4 billion federal lifeline.  Fannie was originally rescued by the federal government in September 2008, but at least that bailout was capped at $400 billion.  Last year, however, the Obama Administration agreed to remove even that limit, pledging unlimited loss coverage. Fannie’s total now stands at $83.6 billion, with Fannie Mae’s and Freddie Mac’s cumulative bailout costing American taxpayers $145 billion.

But just like Greece, whose original bailout estimate of $45 billion has now risen to $1 trillion, there is no end in sight for Fannie, Freddie or the United States.  Who knows how many more bailouts will be sought by Fannie and Freddie, not to mention other dysfunctional states like California and industries dominated by unions whose bosses are on Obama’s speed dial?

Can you hear the Greek wedding music growing louder?

March 9th, 2010 at 2:19 pm
Government Bankruptcy and the Illusion of Orderly Crisis Management

Maybe it is 100 years of Progressive institution building that obscures the lessons of history, but the writers of Slate are kidding themselves if they think that just because there are no formal legal structures to handle California and Greece’s looming bankruptcies, then it must also be true that they cannot declare bankruptcy.  That view betrays the positivist’s creed that if a problem isn’t addressed in law, then it cannot be resolved by government. More likely, private creditors will get soaked while the larger governments negotiate a separate peace.

History teaches that the inability or refusal to pay sovereign debt (whether loans or tribute) typically leads to the expansion of government power.  Since both California and Greece are de facto sub-agencies of the US and EU, respectively, here’s betting that on net, the federal governments of the United States and European Union will emerge with even more power than before.

January 29th, 2010 at 2:50 pm
Sacramento Needs a Socrates

A good friend of mine is fond of pointing out that majority opinion condemned both Socrates and Jesus to death for speaking truth to power. One wonders if the political equivalent will happen to Greek Prime Minister George Papandreau now that his country has avoided being booted from the European Union for it’s out of control deficits. Part of the deal keeping Greece in the EU fold is Athens’ promise to do “whatever it takes” in order to get the nation’s fiscal house in order. The other part is the knowledge that the EU will not bail Greece out of its problems. For his part, the prime minister gets it:

“Greece is in a situation where we need to take very strong measures and structural changes in our country,” he said. “We’re determined to implement the programme.”

Unfortunately, the current solution is to sell a series of bond measures to finance the debt. This is exactly the same situation facing the State of California. Yearly budget shortfalls should no longer be patched with accounting gimmicks and stimulus money from the feds. Instead, if the state is going to avoid running out of money on April 1st, Sacramento needs to cut spending – NOW. But the only way that’s going to happen is with a sustained, detail-oriented presentation about the need for systemic reform from someone with access to the media. In effect, California needs a public figure willing to get the electorate to sober up on spending and make a priorities list funded with at least 10% less money than the state has taken in since 2007.

True, that won’t be politically expedient for any of the main contenders running to replace Schwarzenegger next year. It may even cost them the election. Then again, no one who’s running needs the job. Republicans Meg Whitman and Steve Poizner have over a billion dollars in wealth between them, and Democrat Jerry Brown wants a third turn at the governor’s mansion. If any of them want to start their tenure off on a realistic foot, they’d be talking about ways to cut, not ways to spend. As Greece shows, at some point the money runs out. Crazy thought: Why not start correcting the problems before they’re too big to fix?  Put another way, anybody willing to be a potential martyr for sake of actually telling people the truth?