The Gravitational Force that Pulled European Nations into a Black Hole

Government intervention always wills the good and works the bad.

By Con George-Kotzabasis

The European Union’s sovereign debt crisis was neither an act of fate nor an act of a free self-dependent man but an act of deluded ideology whose sails were blown by the long-lasting winds of government dirigisme, i.e., intervention, and welfare dependency. Once again it was the work, the social engineering, of the bien pensants in the form of a state directory of planning that would put a floor of security for the masses and protect them from falling into abject economic privation that was always, according to their thinking, the omnipresent and inevitable result of the unjust, harsh, and unequal regime of the capitalist competitive free market. The trouble was that this floor was made out of straw and at the first jump of an economic crisis–whose seeds were planted by government intervention,  loose monetary policy and low interest rates–would open a gaping hole through which this security would disappear and drown in a massive pool of unemployment and poverty.

The Eurozone’s one dimensional foundation of monetary union without banking and fiscal union could not sustain the European edifice in the long run with the differentiating regime of taxes, social benefits, and pensions that existed among its constituent states. The proliferation and prodigality of unsustainable Entitlement Economies, which have been the characteristics of the welfare states of Europe especially in the south, could not have been continued without cracking the economic underpinnings of the Eurozone. Also, the European Central Bank’s enabling of low risk premiums on interest rates of government debt, encouraged Greece, Portugal, Spain, Italy, and Ireland to go on an orgy of borrowing and overspending. The inevitable outcome was a stampede of budget deficits that were unsustainable and the eventual loss of all credibility in the financial markets that the afflicted States would be able to pay back their debts and thus the shutting out of the latter from the global financial lending pool.

Since no private person would hazard to lend money to states lassoed in sovereign debt the only alternative left was for the richest countries in the Eurozone, such as Germany, to become the lenders and continue to finance the former for their economic survival. But such help would be given under very severe terms encapsulated in strict Memoranda to the receiving countries with the stipulation that the latter would adopt and implement stringent austerity measures that would decrease substantially government expenditure, would restructure and reform their economies making them more competitive, and privatizing public enterprises, whose inefficiency and lack of a diligent working ethos can only be sustained by a continuous expensive staple of government subsidies.

These austerity measures, however, whose formulators have been the European Commission, the European Central Bank, and the International Monetary Fund, the so called Troika, are forcefully rejected by the people of those countries who for decades have been inured to the social and economic comforts and benefits engendered by the reckless spending of their governments, and are refusing to accept any cuts to these benefits even when some are aware that the latter can no longer be provided since the governments’ coffers are empty and the convenience of funding these benefits by borrowing, as they have done in the past, is no longer available due to their nation’s sovereign debt. Moreover, these austerity measures initially had not being complemented with policies of economic development and thus led to the worsening of the economic conditions of those countries that adopted them, such as Greece, leading to unprecedented massive unemployment by the closure of large and small business enterprises and to the smashing of the middle class which is the cornerstone of free societies.

This situation is dangerously engendering the fragmentation of social cohesion in those countries and giving rise to political parties of the extreme right and left, coming out of the foam of waves of violent demonstrations that imminently threaten democracy. A latest illustration of this danger are the attacks by petrol bombs and other incendiary devices by hooded youths of anarchists and extreme leftists in Greece against the homes of outspoken journalists, offices of the governing coalition of New Democracy, Pasok, and the Democratic Left, and the burning of Bank’s ATMs. And of particular significance are the attacks on journalists, which are a blatant violation of free speech and a sinister attempt to intimidate them from expressing their opinion about events and criticizing politicians of Syriza, the official opposition, of whom obviously the fire carrying mobs are its ardent supporters.

This will be the tragic legacy of European big government and its ill-considered, indeed, destructive intervention in the processes of the free market that for at least two centuries have delivered prosperity and an unprecedented increase in the standard of living of the masses; as the socialist politicians from Francois Mitterand to Jaques Delors–the architects and enforcers of the European Monetary Union that forced Germany to succumb and pay the price of the unity of west and east Germany as demanded by France–and their present disciples of etatisme are in the process of killing the goose that laid the golden egg, i.e., the unimpeded free market, and by doing so unconsciously and unwillingly are generating and  unleashing the brutal forces of fascism and leftist directorates of totalitarianism on the landscape of Europe.

To avoid this slide to the hell of totalitarianism only the rise of statesmen who “can act beneath heaven as if they were placed above it” is consummated. The fiscal and balance of payments crisis can only be remedied by substantial cuts in government spending and the euthanasia of big government, and by the privatization of debt ridden public enterprises–that are the last strongholds of obtuse and doctrinaire unions– and by the freeing of private enterprise to pursue profit by competition and entrepreneurial creativity and dynamism, respectively. These ‘bitter’ remedies can only be administered by statesmen of the calibre of Lee Kuan Yew and Antonis Samaras. The latter, indeed, might not only be the progenitor of the Greek Renaissance but also the paradigmatic leader of other European politicians to imitate for their own European Renaissance. The Newtonian apple that will stop the European ‘discord’ that currently threatens the demise of the EU will fall to the gravitational force of such statesmanship.

Hic Rhodus hic salta

The Presidency of Black Magic

By Con George-Kotzabasis

A spectre is haunting the White House the spectre of Black Magic. America’s long winter of discontent–as an outcome of the so called lying, malevolent, warmongering, and unjust to the poor Bush-Cheney administration–alienation of the civilized world from the Texan presidency of quick-gun-drawing, and the hatred of America’s fanatical and deadly enemies, are going to be ‘fixed’ by a voodoo concoction of policies brewed by the modern African-American ‘medicine man’ dressed in Ivy League ‘leaves’ resident in the White House. The sole superpower whose strength has been and is pivotal to the security and economic development of many countries and which carries like Atlas the stability of the world on its strong shoulders with all the uncertainties, risks, and errors of judgment that such a heavy and multiple burden entails, is in the hands of a sorcerer’s apprentice who is cooking up a saucy condiment of magical nostrums that on the one hand will politically and socially change the United States, and on the other, will derail all the implacable Islamist fanatics from their course of hating the Great Satan. And reform them from their bad ways by demolishing the Guantanamo Walls and rendering to them not the justice that applies to hostis humani generis, to enemies of the human race, but the justice that applies to war prisoners under the Geneva Convention. This is inimitable wishful thinking that rises from the vapours of black magic.

But already President Obama’s hors d’ oeuvres policies both on the domestic and international fronts are ‘poisoning’ the stomachs of many Americans and even some of the strong stomachs of his initial supporters, as one would expect inevitably and unsurprisingly to happen from policies that spring from voodoo magic. Within six months the 61% percent support of Obama among Americans who believed he would bring real change has dropped to 51%, and presently 37% percent strongly disapprove of his presidency, a 22% percent point rise from January, and 31% percent strongly approve of it, a 14% percent point drop from January. (Rasmussen Reports.) And worse still on his health care reform a poll found that 42% percent say that the president’s plan is a bad idea–a 10% percent point jump from a month ago–and only 36% percent say it is a good idea. Moreover, 90% percent of Americans are satisfied with their present health care. These polls have put a hellish scare among his top advisers forcing them, and Obama himself, to have a special meeting to discuss this topic of his steep fall from his initial high peak within such a short time.

Domestic Front: Obama’s Changing America Yes We Can

On the domestic front two of his crucial policies for changing America, i.e., health care and climate change, emanating from his black magic policies, that is, that both of them will pay for themselves at no expense to the tax payer, are rapidly losing their magical appeal. The Congressional Budget Office (CBO) has determined that the Senate Finance Committee Bill for his health care reform would cost $1.6 trillion over 10 years. And that Obama’s Independent Medicare Advisory Council would trim Medicare costs by perhaps 0.2, a miniscule amount, according to CBO. Further in contrast to Obama’s assertion that the costs of Medicare in the second decade of its implementation would move downward, the CBO found that the “costs would significantly move upward.” It’s obvious that with these dire estimates of the CBO, President Obama will have to settle for mere “health care insurance reform and not in transforming the system of Medicare,” which was his initial goal, to quote Charles Krauthammer of the Washington Post. Obama says that any bill he signs on health care will be “revenue-neutral.” But that is the road to insolvency that he himself declares to be unsustainable, as his original argument was that medical costs are destroying the economy. So how can he prevent this destruction if the only bill he will sign will be one that is revenue-neutral?

The political chicanery of the lawyer from Harvard is astounding, but politically necessary for him, to reassure the deep concerns of the electorate that his health care plan will not raise taxes to the stratosphere. It’s by such disingenuousness that President Obama attempts to deceive and dupe the public that he will not sneak his hand into the pockets of Americans to finance his health care package that will benefit mainly a minority of Americans. And even among Democrats there is an awareness of the high costs of his scheme that is metastasizing into opposition. Fifty-two “Blue Dog Democrats” not only are barking at it but might even start biting it. And the Town Halls of America are becoming a groundswell of rebellion against his health scheme whose ferocity and clamour, if it will not be appeased by the amendments that Obama will be forced to make to his legislation will seriously threaten his re-election for a second term. Obama in his desperation to save his plan brought the mantra of “prevention” that presumably would substantially reduce medical treatment costs. In the New Hampshire town hall meeting on August 11, he shouted triumphantly to his audience that prevention “saves lives. It also saves money.” But the truth is that overall preventive care increases medical costs. CBO Director Doug Elmendorf wrote that “added costs of widespread use of preventive services tend to exceed the savings from averted illness.” Nonetheless, the Harvard professor desperately resorts to the practices of black magic to salvage his Obamacare.

On climate change his special envoy Todd Stern has indicated that the US was ready to act without India or China saying that “in our view you can become an economic winner by acting,” alluding to the vast investments American entrepreneurs were readying to make in alternative sources of energy and the prodigious benefits issuing from such investment to the US economy, especially in the area of employment. Hence, the multilateralist Obama in foreign affairs will be a unilateralist in climate change. His administration will lead the way in the fight against climate change irrespective what other nations are prepared to do, such as China, India, and the other developed and developing countries. But it’s more probable than not that his cap-and-trade system will be a boondoggle scheme constructed at an enormous cost to the American economy. Cutting carbon emissions to 17% percent by 2020 and to 83% percent by 2050 would be highly costly. A 15% percent reduction of CO2 would increase the cost of living of a typical household by $1,600 a year. And what are the benefits issuing from the cap and trade scheme? It would lower global CO2 by 4% percent whose impact upon global warming would be virtually infinitesimal.

Moreover, the new sources of energy are still to be identified by the scrutiny and the rigor of science. Will they be a compound of solar energy, wind, and nuclear power, and with the exception of the latter, will they work? It’s obvious that President Obama’s cap-and-trade system is adorned with all the uncertainties of fortune. Obama is entering a Las Vegas casino to try his luck by playing a profligate crap game with other peoples’ money. But there are some Democrats, fearful of the lashing they could get at the coming election that are not willing to participate in this throwing of the dice. “Ten Democrats from states that produce coal…said they could not support a bill that did not protect American industries from exports from countries that did not impose similar restraints on emissions.” (New York Times, August 10, 2009.) And the President’s aids facing this opposition not only from their own Democratic ranks but also from a majority of the public are trying to find an easy sell talking about “energy security” and “green jobs” abandoning their earlier position of being prepared to push for tough measures needed to cap emissions. So Obama’s unrealistic and ‘fantasmagoric’ claim to lead on climate change will be no more than a hissing balloon that he will be taking to the Copenhagen meeting in December.

On race relations President Obama imprudently interceded in favour of Henry Louis Gates Jr., the black Harvard professor, and lambasted the white policeman, James Crowley, who arrested the professor for ‘burglary’ by saying that “the police had acted stupidly” thus making the matter worse by inflaming the race issue as it was a white policeman who arrested the black professor. Immediately after his faux pas he admitted that he was not aware of all the facts and tried to apologise both to sergeant Crowley and to the police union that promptly supported the latter. To ‘fix’ his blunder Obama invited both the professor and the policeman to the White House for a beer to cool the racial tensions that the President’s own comments had incited. The media jocularly dubbed it as the “Beer Summit Diplomacy” between the President and the two disputants, and made fun of Obama in his failed diplomacy to reconcile the two parties, and one might add while he was confident that with his new diplomacy he would reconcile the imams of Tehran, as the “two gentlemen agree to disagree,” to quote sergeant Crowley. It does not augur well for President Obama as his stupid slip will awake the race issue at the next election that had been dormant in the last one, making it electorally completely unpalatable to Obama, as on this issue alone he could lose the election and as the hate that trumped the race issue at the last election against the Republicans is fizzling out.

 Foreign Policy: Obama’s Big Test

President Obama’s big test, however, will be with the implacable deadly enemies of America. In the domain of foreign affairs will be shown whether he is a president riding his horse to victory or whether he will be a president crying like King Richard III, “A horse! A horse! My kingdom for a horse!” (W. Shakespeare.) And the first omens do not augur well. In his ‘great’ speeches both in Prague and in Cairo, wrapped up in an embellished rhetoric delivered by his indispensable  ventriloquist, the  teleprompter, Obama made a confession of mea culpas of past American actions as if by such confession and expiation America’s  irreconcilable and hateful enemies would forgive the ‘sins’ of the ‘Great Satan’. His overture to a new diplomacy laden with olive branches and empty of sticks hoping that by replacing the so called ‘belligerent’ policies of the former Bush-Cheney administration that to its critics, including Obama, increased and made more menacing the enemies of the US, that this will decrease hostility toward America and entice its inveterate foes to bring and resolve their grievances on the table of negotiations, is a dangerous wishful thinking  that will seriously discredit and erode America’s prestige as a superpower, and its consequence will be to enfeeble its ability to play a decisive pivotal role in the security and stability of the world.

For a statesman of a great power which is the “un-wobbly pivot” around whose axis the political and economic stability of the world turns, it’s axiomatic that one must identify and be aware of one’s potentially deadly enemies at their ‘budding’ stage and deal with them decisively and promptly before they become stronger. This axiom applies especially when a great leader makes the judgment that this burgeoning enemy is fanatically irreconcilable and cannot be appeased by any reasonable offers. History is full of tragedies that have issued from the inability of political leaders to foresee the dangers that would arise from unappeasable enemies determined to achieve their goals. A recent example of lack of foresight and imagination by European leaders was the occupation of Rhineland by the Nazis. In March 1936, Hitler sent few battalions on motor cycles and occupied the demilitarized zone of the Rhineland and tore the Locarno Pact to pieces. Neither the French nor the British governments reacted to Germany’s aggression which if they had done so, according to some eminent historians, like the German Golo Mann, would have forced Hitler to withdraw his battalions with the possibility of even ousting him as Chancellor. Winston Churchill alone advocated military action against the Rhineland occupation through cooperation by the British and the French. But the acquiescence of the last two countries to the violation of the Locarno Pact whetted Hitler’s appetite for more egregious territorial encroachments. After this initial success of Hitler we all know the great tragedy that befell on mankind.

President Obama belongs to this ilk of political leaders that are comfortable sitting in the armchairs of the ‘Chamberlain Appeasing Club’. He believes like ‘“peace in our times” Chamberlain’, that America’s mortal enemies can turn out to be good fellows if one treats them with dignity, respect, and comity and eschews the use of the instruments of force against them. He is also of the opinion that the UN, that ‘Tower of Babel’ of dissent and disunity on so many political and military crises that afflict the globe, is an effective vehicle that can bring peace and security in nations that are ravaged by the military brutality of despotic regimes, and indeed, can be the fulcrum with the right leadership in its ranks to place the political stability of the world on a solid foundation.

Susan Rice, the American Ambassador to the United Nations, outlined Obama’s diplomatic priorities in her talk at New York University on August 13, 2009, in these terms. The US views the UN as essential to tackle global security threats. “There is no substitute for the legitimacy of the UN can impart on its potential to mobilize the widest possible coalitions…the world body is essential to our efforts to galvanize concerted actions that make Americans safer and more secure.” In this peroration of praise for the UN, Ambassador Rice did not mention one word about the great threat emanating from extremist militant fanatical Islam, and by what methods the UN would “galvanize concerted actions” against this great menace that threatens Western civilization. Moreover, what is amusing and at the same time of great concern due to the seriousness of the matter is that Ambassador Rice had the intellectual chutzpah before an intelligent audience to replace the real documented weakness of the UN in a multiple number of crises over a long period of time with the mythical strength of the UN. And still of greater concern is that according to the “diplomatic priorities” of President Obama the latter might have a propensity and would be willing to ‘outsource’ the security of the United States, the sole superpower, to the United Nations.

Obama of course is neither a proponent of individual or collective suicide or euthanasia, and there are no “death panels” in his health care scheme, as some of his critics like Sarah Palin have claimed, although the latter to her credit subsequently has watered down this accusation against Obama. But the vaguely seen outline of a skeleton that has all the characteristics of a ‘death panel’ is rising in his foreign policy. His willingness to outsource the security and the vital interests of the US to the collective weakness and fecklessness of the UN and to a disarmed diplomacy will have no other consequence other than the geopolitical suicide or euthanasia of America as a superpower. Moreover, Obama’s foreign policy stands in blatant contradiction to his policy of climate change. While his stand to the hypothetical danger that human emissions are endangering the planet is unilateral i.e. he is prepared to act alone irrespective what other countries are doing, to the real danger emanating from fanatical Islam against America, his stand is multilateral, i.e., he is unwilling to act alone in defence of the security and vital interests of the United States. This contradiction in itself exposes Obama as being not a politician of principles leading from the front and dragging the masses behind him but a populist homespun opportunist following the volatile whims of a confused public and hence leading from behind. Aware that most Americans, because of their confusion, are more willing to fight the hypothetical danger of climate pollution paid mainly at the expense and sacrifices of future generations and being unwilling to fight the real danger of Islamist terror at their own expense by the present sacrifices they will have to make in a defensive war, President Obama has no political qualms in adopting this confused position of Americans about the two dangers and  build on it his strategy in regard to these dangers.

President Obama’s strategy therefore on both issues is a strategy of confusion and hence its fate will be a strategy of dismal failure. On climate change whose solution depends on the collective efforts of both developed and developing countries, assuming the danger CO2 is real, Obama is prepared to act alone. On Islamist terror, which without any doubt threatens the immediate vital interests and security of the United States, Obama is prone to shift the responsibility of protecting the security of the US to the mythical competence of the United Nations to rally a strong coalition of nations that would protect and secure the safety of America. In the annals of human history this is unprecedented. No great power ever abdicated its historical responsibility to protect its vital interests and security and shifted this responsibility to a potpourri of feckless allies. In confronting great dangers a pre-eminent power rallies its allies and takes the lead against its enemies and never loses or passes the initiative to others in its own defence.

Furthermore, his present foreign policy and the advent of his new diplomacy are afflicted with a ‘split personality’. While he is unshakably committed to fight the Taliban and Al-Qaeda in Afghanistan and prevent the latter, as he has stated many times, from becoming a safe haven for global jihadists who would attack the United States, this commitment strangely collapses when it comes to other countries, such as Somalia and Sudan, from becoming safe havens for terrorists that would pose the same threat to America. And is unwilling to deploy US forces and destroy these fledgling beehives of terror before they become stronger, on the dogmatic principle that the US is not willing to act alone, and, presumably, this principle applies even in the case when the security of the US in verity is threatened.

Obama’s new diplomacy too, by which he hopes to bring rogue states like Iran and its terrorist proxies of Hamas and Hezbollah into the fold of reason, is inconsistent and incongruous with his stand on Afghanistan. While the critics of the Bush administration, including Obama, had argued that the war in Iraq had rallied into the ranks of terror a greater number of recruits and had made it stronger and provoked the ire of many Muslims against America for slaughtering their brothers and thus prevented the US from exercising its diplomacy with its potential to reach some accommodation with its foes, somehow, the same argument does not bear in Afghanistan where America and the infidels of the West are also ‘slaughtering’ Muslims. How in the case of Iraq US diplomacy became impotent and in the case of Afghanistan is finding its potency, is a conundrum that only practitioners of black magic are qualified of finding the answer.

It’s by such cure-all panaceas of black magic that President Obama will be changing America and the geopolitical orbit of the world. But already Obama’s nostrums are foundering on the rocks of reality. His ‘dignified’ diplomacy, with which he hoped to appease America’s foes, after the illegitimate election of Ahmadinejad and the rebellion of Iranians against it, is in a state of a long ‘vacation’, if not in tatters. In the wine flask of his health care scheme he will be pouring so much water that will become tasteless to most Americans. As we have said nine months ago Obama does not have the political acumen and mettle to lead a great nation such as America. He will go down in history as the ‘freshman’ president whose green horns failed to bring the ‘greening’ of America and least of all the diplomatic ‘olive branching’ of the enemies of America. And I dare say that he will be a one term president if he survives, as the mounting resentment of an increasing number of Americans against his policies could tragically sire and give birth to a second ugly Oswald.

 August 13, 2009, Melbourne