"European Elitism Leads to Arrogance - America, Beware!"
Sydney M. Williams
“When it becomes serious, you have to lie;” so said Jean-Claude Juncker, Prime Minister of Luxembourg, the longest standing head of government in the democratic world. He is also the President of the Eurogroup, a collection of the Eurozone’s finance ministers.
What prompted the arrogant outburst from the pompous M. Juncker were press reports a few days ago that Greece was considering alternatives, including default. European officials are considering requesting more collateral, as they attempt to contain Greece’s plight. European Central bank chief, (the other Jean-Claude,) M. Trichet has said a restructuring is not on the table. M. Juncker said that he does believe further adjustments are necessary, but that, “We’re not discussing the exit of Greece from the Euro area. That is a stupid idea – no way.” Of course, he then added that he is willing to lie; so, what are his intentions? The bond market seems to have decided a restructuring is likely.
Mark Twain would have taken satisfaction in M. Juncker’s announcement; Mr. Twain once claimed that “a man is never more truthful than when he acknowledges himself a liar.” But a politician, or anyone for that matter, having once admitted being a prevaricator, loses all credibility. Of course it is assumed and expected that all politicians lie; ergo the syllogism:
As contemptuous of the electorate as was M. Juncker’s outburst, M. Trichet was equally disingenuous when he added (about Greece,) “We have a program, approved by the international community, approved by the IMF board (obviously now subject to change,) by the entire world, approved by the European Union and financed by the IMF and the European Union.” However, twixt the cup and the lip something slipped. Rates on 2-Year Greek Notes jumped from 12% to 24%. No one may be lying, but someone is not telling the truth.
Debt is overwhelming nations like Greece, Ireland and Portugal. Italy and Spain are also suspect. The problem has been one of feasting on social programs that have enhanced living styles at the expense of savings. Indigestion usually follows such gluttonous excess. Not wanting to take the write-downs, creditor nations desire time, not stomach pumps. As a reporter for “Mish’s Global Trend Analysis” put it, “they have been using band-aids when an amputation is needed.” Greece, Ireland and Portugal, according to a recent Bloomberg report, have been given $366 billion in emergency funds thus far, yet their debt situations continue to worsen. The combined debt of the three countries is expected to reach $1 trillion in 2012 – much of which is held in banks of creditor nations Germany and France – versus $800 billion in combined GDP.
George Papandreou, the Greek Prime Minister, insists his country will not abandon the Euro. “These are groundless reports, provocations put out by irresponsible people aimed at speculation, at profiteering.” He claims that these “wild scenarios” are negative for everyone, the Greek public and for those foreign interests who want to invest in Greece. If he were Pinocchio, his nose would be a foot long. The public is not served by trekking through this Purgatory, not knowing how much of their country’s assets will have to be pledged to German banks. How many investors are anxious to invest in a country that has lost control of its finances, the leader of which seems more concerned with the legal niceties of its creditors than in the interests of its people? Defaulting on one’s debts is not the worst that can happen. In the personal and corporate world and, in fact, in the world of sovereign nations defaults often make sense – an opportunity to start fresh. In 1998, Russia devalued the Ruble and restructured their debt; yet within a few years the country was back in markets borrowing at record low interest rate levels. In financial markets, there is life after death.
European elites have long looked down their long noses at their crude, upstart cousins across the seas. America has long had the unique advantage of being reinvented every generation, as immigrants add to our culture. As a country, we have inspired and supported individual initiative and creative independence.
Yet the lessons of fatuous Europe have been ignored by too many gullible Americans – perhaps not gullible, just desirous of being loved. The failed social democracy experiments in places like Greece are being emulated by those in Washington who would increase the dependency of the electorate at the expense of individual initiative. In the immediate postwar years, people on both sides of the Atlantic were intent on restoring their lives and rebuilding their economies. In Europe, following thirty years of war, an implicit pledge to remain at peace was omnipresent. But sometime in the 1960s, as James Q. Wilson (professor and author of A Moral Sense) once said, “Self control gave way to self expression.” One’s focus on the future bowed to self-satisfaction today. That behavioral change was mirrored in our governments.
In the U.S., we are headed down the same path, toward the same gate through which is the abyss of overwhelming debt, of living beyond our means. (That is the enticement and the danger of Obamacare.) In abandoning his fellow members on the “gang of six”, Tom Coburn yesterday said that no matter what decision is now made regarding Social Security, Medicare and Medicaid – including no decision – they will look different in five or ten years. We can try to fix them now, or we can wait and have them fix us.
Congress and the Administration are caught up in the politics of the moment; no one is willing to be the bearer of bad news. Instead they lie. The cause of our debt situation is indisputable – we are promised what cannot be delivered. Should the economy continue to recover, tax receipts may surprise positively, but the respite will be only temporary. The most likely consequence of government’s profligacy will be dollar depreciation – inflation.
When things get serious, we don’t want lies. We want and we need the truth. In my opinion, the public (at least the American people) is better able to handle the truth of bad news than politicians are capable of uttering it.
Thought of the Day
“European Elitism Leads to Arrogance – America, Beware!”
May 19, 2011“When it becomes serious, you have to lie;” so said Jean-Claude Juncker, Prime Minister of Luxembourg, the longest standing head of government in the democratic world. He is also the President of the Eurogroup, a collection of the Eurozone’s finance ministers.
What prompted the arrogant outburst from the pompous M. Juncker were press reports a few days ago that Greece was considering alternatives, including default. European officials are considering requesting more collateral, as they attempt to contain Greece’s plight. European Central bank chief, (the other Jean-Claude,) M. Trichet has said a restructuring is not on the table. M. Juncker said that he does believe further adjustments are necessary, but that, “We’re not discussing the exit of Greece from the Euro area. That is a stupid idea – no way.” Of course, he then added that he is willing to lie; so, what are his intentions? The bond market seems to have decided a restructuring is likely.
Mark Twain would have taken satisfaction in M. Juncker’s announcement; Mr. Twain once claimed that “a man is never more truthful than when he acknowledges himself a liar.” But a politician, or anyone for that matter, having once admitted being a prevaricator, loses all credibility. Of course it is assumed and expected that all politicians lie; ergo the syllogism:
All politicians lie.
I am a politician.
Therefore, I am a liar.
As contemptuous of the electorate as was M. Juncker’s outburst, M. Trichet was equally disingenuous when he added (about Greece,) “We have a program, approved by the international community, approved by the IMF board (obviously now subject to change,) by the entire world, approved by the European Union and financed by the IMF and the European Union.” However, twixt the cup and the lip something slipped. Rates on 2-Year Greek Notes jumped from 12% to 24%. No one may be lying, but someone is not telling the truth.
Debt is overwhelming nations like Greece, Ireland and Portugal. Italy and Spain are also suspect. The problem has been one of feasting on social programs that have enhanced living styles at the expense of savings. Indigestion usually follows such gluttonous excess. Not wanting to take the write-downs, creditor nations desire time, not stomach pumps. As a reporter for “Mish’s Global Trend Analysis” put it, “they have been using band-aids when an amputation is needed.” Greece, Ireland and Portugal, according to a recent Bloomberg report, have been given $366 billion in emergency funds thus far, yet their debt situations continue to worsen. The combined debt of the three countries is expected to reach $1 trillion in 2012 – much of which is held in banks of creditor nations Germany and France – versus $800 billion in combined GDP.
George Papandreou, the Greek Prime Minister, insists his country will not abandon the Euro. “These are groundless reports, provocations put out by irresponsible people aimed at speculation, at profiteering.” He claims that these “wild scenarios” are negative for everyone, the Greek public and for those foreign interests who want to invest in Greece. If he were Pinocchio, his nose would be a foot long. The public is not served by trekking through this Purgatory, not knowing how much of their country’s assets will have to be pledged to German banks. How many investors are anxious to invest in a country that has lost control of its finances, the leader of which seems more concerned with the legal niceties of its creditors than in the interests of its people? Defaulting on one’s debts is not the worst that can happen. In the personal and corporate world and, in fact, in the world of sovereign nations defaults often make sense – an opportunity to start fresh. In 1998, Russia devalued the Ruble and restructured their debt; yet within a few years the country was back in markets borrowing at record low interest rate levels. In financial markets, there is life after death.
European elites have long looked down their long noses at their crude, upstart cousins across the seas. America has long had the unique advantage of being reinvented every generation, as immigrants add to our culture. As a country, we have inspired and supported individual initiative and creative independence.
Yet the lessons of fatuous Europe have been ignored by too many gullible Americans – perhaps not gullible, just desirous of being loved. The failed social democracy experiments in places like Greece are being emulated by those in Washington who would increase the dependency of the electorate at the expense of individual initiative. In the immediate postwar years, people on both sides of the Atlantic were intent on restoring their lives and rebuilding their economies. In Europe, following thirty years of war, an implicit pledge to remain at peace was omnipresent. But sometime in the 1960s, as James Q. Wilson (professor and author of A Moral Sense) once said, “Self control gave way to self expression.” One’s focus on the future bowed to self-satisfaction today. That behavioral change was mirrored in our governments.
In the U.S., we are headed down the same path, toward the same gate through which is the abyss of overwhelming debt, of living beyond our means. (That is the enticement and the danger of Obamacare.) In abandoning his fellow members on the “gang of six”, Tom Coburn yesterday said that no matter what decision is now made regarding Social Security, Medicare and Medicaid – including no decision – they will look different in five or ten years. We can try to fix them now, or we can wait and have them fix us.
Congress and the Administration are caught up in the politics of the moment; no one is willing to be the bearer of bad news. Instead they lie. The cause of our debt situation is indisputable – we are promised what cannot be delivered. Should the economy continue to recover, tax receipts may surprise positively, but the respite will be only temporary. The most likely consequence of government’s profligacy will be dollar depreciation – inflation.
When things get serious, we don’t want lies. We want and we need the truth. In my opinion, the public (at least the American people) is better able to handle the truth of bad news than politicians are capable of uttering it.
Labels: TOTD
posted by Thought of the Day @ 5:30 AM
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