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Liberalism Is a Terrible Idea; It’s Just Been Implemented Properly

February 22, 2012 By: Scott Spiegel Category: Economy

Poor Greece is on the verge of defaulting on its bills and declaring bankruptcy.  Credit rating agencies S&P, Moody’s, and Fitch long ago downgraded Portugal, Italy, Greece, and Spain (the PIGS) and gave them negative outlooks, with Greece getting Cs across the board.  (Cuba, Pakistan, and Burkina Faso are a few of the nations with better ratings than Greece.)  If Greece runs out of money and fails to pay €14.5 billion to service its debt on March 20, European markets could be badly shaken.

Greece’s financial woes are the result of its unsustainable social welfare entitlement state, whereby working adults are promised generous pensions and early retirements, and younger generations must cough up the money to pay for these, though they won’t receive similar benefits when they retire.  (Sound familiar?)  The government has been borrowing to subsidize these pensions, but it’s not enough—partly because Greece has one of the lowest birthrates in the world, and partly because swaths of young educated Greeks are fleeing the country and emigrating elsewhere to find work.

The European Union—the ill-advised, 27-member collective of largely Western European nations—adopted a common currency among 17 of its members to facilitate trade.  Greater economic stability was supposed to result from the fact that if certain members were in trouble, other members would better be able to bail them out until they got back on their feet.  But the PIGS’ problems are long-term, structural flaws that will lead to greater financial ruin with each passing year.

The wealthier, larger, more financially secure countries—especially Germany—resent perpetually having to rescue these flailing nations.  They’re suspicious that bailing the PIGS out will be temporary fixes, that these nations won’t enact reforms needed to right their economies.  Given that parties to the left of Greek Prime Minister Lucas Papademos’ Socialist Party have been dominating the polls ahead of April’s early national elections, who can blame Germany for mistrusting Greece?

For a while, it seemed German Chancellor Angela Merkel would decline Greece’s request for a bailout—their second since 2010—and let the country declare bankruptcy.  Merkel relented, on the condition that Greece enact widespread austerity measures, subject its spending to greater EU scrutiny, and reduce its public debt to “only” 120% of its GDP by 2020.  Austerity measures would include cutting government agencies, jobs, and wages; pensions; higher education subsidies; and health care benefits.  In return, private holders of Greek bonds would take a 70% cut in the value of their holdings.

Meanwhile Germany is drafting backup plans, whereby Greece would leave the euro if it fails to reduce its debt and implement austerity cuts and privatization of state functions.  German Finance Minister Wolfgang Schäuble and nations such as Austria and Finland openly question Greece’s potential to rebound.

Everyday Greeks, steeped in the European entitlement mentality that promises them a comfortable living their entire lives, are livid.  For weeks, thousands of citizens have protested, rioted, and looted in a display of spoiled petulance that makes Occupy Wall Street look like the Tea Party.  They have fomented violent clashes with police, instigated mayhem and injury, and caused millions of euros of damage to public and private buildings.  Protestors came out en masse on Sunday before decisive talks among the Eurogroup in Brussels over whether to implement the Grecian bailout.

In Greece as in the U.S., everyday folks blame the government for not collecting enough taxes from the rich—which would only stifle job creation and do little to alleviate Greece’s debt crisis.  They scapegoat banks for mismanagement, and lament the government’s failure to prosecute financial executives—as though throwing a few bankers in jail would solve their problems.

The mainstream media have conspired in the protestors’ mission by labeling the austerity cuts “punishing,” as though not getting as much as you want for free is an intolerable deprivation.  Prodigality appeasers insist we rescue Greece and blindly trust their commitment to reform.

One New York Times commentator concluded a lengthy profile of struggling Greek citizens thusly: “Greece’s traditional infrastructure may not be the ultimate answer to its problems… but it may make difficult times less painful.”  Yes, and Greece’s traditional infrastructure is what brought about those difficult times in the first place.

Just as Paul Krugman and other leftists repeatedly, recklessly exhort the U.S. government to spend even more money it doesn’t have on stimulus, lest the country slip further into recession, EU bailout critics warn that austerity cuts will further hobble Greece’s economy.  The Guardian’s Fabian Lindner declares, “Europe is in dire need of lazy spendthrifts” to whom countries like Germany can export goods.  Lindner predictably argues that because Greece has instituted five sets of minor austerity cuts that haven’t yet worked, it should reverse course and ramp up government spending again.

Defenders of statism praise communism, and its relative socialism, by gushing, “It’s a great idea in theory; it’s just never been implemented properly.”  In fact, communism and socialism are terrible ideas, and have been implemented squarely in line with their supporters’ intentions, minus any desperate freedom defenders’ last-ditch efforts to fight off government’s encroachment on citizens’ lives.  What we’re seeing in Greece is exactly what we could have expected after a half-century of full-fledged implementation of the modern welfare state.

If the U.S. continues down its current path—Social Security, Medicare, and Medicaid going broke, new entitlement programs like the prescription drug plan and ObamaCare being piled on, and Democrats and many Republicans unwilling to consider reforms—then we’re going the way of Greece.  The major credit rating agencies have already downgraded the U.S. and threatened to devalue us again if we don’t address our debt.  But when the U.S. defaults, there’ll be no one to bail us out.

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What Obama Could Have Done

August 24, 2011 By: Scott Spiegel Category: Obama

woulda

Image by Scott Spiegel via Flickr

Liberal hack and annoying twerp Ezra Klein recently posted a lament for the president’s waning popularity titled “What could Obama have done?”

Klein’s query is just an updated iteration of an eternal, intractable, metaphysical question for the left: How can Democrats govern like liberals for any extended period of time and generate good results so they can maintain their favorable ratings?

To conservatives (and Bill Clinton), the answer is obvious: You can’t.  Liberal policies don’t work.  Any goodwill remaining toward you from your base for remaining a stubborn ideologue in the face of contrary evidence is overshadowed by widespread revulsion toward the disastrous consequences of your policies.

In other words: Conservatives are never going to like you, a few crazy liberals always will, but a large number of independents, moderates, and center-left voters will abandon you if you don’t give up on your leftist policies after the public realizes you are not a magician.

Since Klein asked, here’s what Obama could have done to enjoy a successful presidency and retain the sky-high favorability ratings he held in those blissful few minutes after he was sworn in before the trouble began.

Let’s start with the good news—things Obama did and should have done (hurry back from the fridge, right-wingers; this won’t take long!):

He didn’t get in the way of the Navy SEAL team that killed Osama bin Laden.  He voiced support for the protestors in Egypt’s Tahrir Square calling for the overthrow of Hosni Mubarak.  He joined a coalition of nations in materially aiding the Libyan rebels who took down Gaddafi.  He signed the repeal of Don’t Ask, Don’t Tell.  He extended the Bush tax cuts and argued for their utility during a recession.

Also, a few things Obama shouldn’t have done and didn’t:

He gave up on closing the terrorist detention center at Guantanamo Bay.  He reversed his pledge to hold a civilian trial for 9/11 mastermind Khalid Sheikh Mohammed.  He supported renewing the Patriot Act, thus abandoning his campaign promise to end warrantless wiretaps of those with terrorist connections.  He never pushed through global warming legislation imposing caps on carbon dioxide emissions.

Much longer is the list of things Obama did and shouldn’t have done:

He shouldn’t have signed the $1 trillion stimulus bill, which had a trivial impact on job growth, did nothing to stop the rise of unemployment, and exploded the national deficit.

He shouldn’t have signed the Patient Protection and Affordable Care Act, which infringes on individual liberties, raises the deficit by hundreds of billions of dollars, and implements none of the free-market reforms House Republicans proposed.

He shouldn’t have signed the Dodd-Frank Wall Street Reform and Consumer Protection Act, which gave two of the architects of the subprime lending-induced financial crisis the power to impose massive, vague, disruptive regulations on the banking industry, without even revoking the much-hated principle “too big to fail.”

He shouldn’t have signed Congress’s August 2011 bill raising the debt ceiling, which was both unnecessary and insufficient to prevent an S&P downgrade, and whose spending cuts are miniscule in the short-term, dependent on the caprice of a bipartisan “supercommittee” in the medium-term, and likely to be overturned by future Congresses in the long-term.

He shouldn’t have authorized rounds one and two of quantitative easing, which have led to rising inflation.

He shouldn’t have created a botched fund to prevent home foreclosures, one of many examples of his administration’s propensity to reward failure.

He shouldn’t have supported the National Labor Relations Board’s decision to prevent Boeing from relocating part of its operations from a unionized state (Washington) to a right-to-work state (South Carolina).

He shouldn’t have taken over the nation’s largest car companies and signed into law the wasteful Cash for Clunkers program.

He shouldn’t have showily banned waterboarding as an enhanced interrogation technique, insisted that Israel return to its pre-1967 borders, demanded premature troop withdrawal in Afghanistan independent of the advice of generals running the war, or bowed to the British Queen, the Saudi king, and every other world leader he could.

Finally, he shouldn’t have blamed George W. Bush, the Republican minority in Congress, the Tea Party, the BP oil spill, the Arab Spring, the Japanese tsunami, ATMs, corporate jet owners, Europe’s sovereign debt crisis, a butterfly flapping its wings in Tobago—anything but his own policies—for the country’s economic woes.

And here are the things Obama didn’t do but should have:

He should have demanded that Congress pass budgets for fiscal years 2011 and 2012.

He should have made the Bush tax cuts permanent.

He should have supported free-market health care reforms, such as allowing the sale of insurance across state lines, expanding health savings accounts, and enacting malpractice tort reform.

He should have voiced greater support for Iran’s and Syria’s pro-reform protestors.

Happy you asked, Ezra?

And one more thing Obama didn’t do but should have.

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