Tag Archives: European union

A House Divided–Better?

We all know that the US has become more polarized politically and culturally for decades.  That gulf between the right and the left has only widened and become more ossified in recent years.  Regardless of the outcome of this year’s election that yawning chasm will continue to exist and likely grow in years to come for a variety of reasons.  We could write literally volumes about why that divide is there; the cause and effect of it; the merits and demerits of both sides of the argument but all those really don’t matter in the end.  The Bible taught us that a house divided can not stand and there is surely profound truth in that but does that mean that two new entities cannot emerge from the one and still thrive for generations.

World history is replete with instances where nations or empires have been bifurcated and the separate entities continued to thrive for long periods of time.   Toward the end of it time in the Sun the Roman Empire was effectively divided into two portions and each continued to have various degrees of success for centuries.  Yes, the western empire suffered more and had a more checkered success than the Byzantine Empire its decline took generations to reach its denouement.  Those savages who conquered Rome also absorbed Roman customs and cultural to a great extent and those the essence was still there.   We can fast forward in time and see similar occurrences unfolding.

Many on the Left look to Europe as their model for a society that is heavily socialized and where the Government dominates all industry and enterprise.  They like the idea of the Government controlling anywhere from 40% of GDP to over 50%.  Modern Germany would be closer to the 40 and Greece today would be over the 50% level.  The Left also loves the politically correct approach to every aspect of life and industry and government.   That is fine is that is their preference but should that preference for a socialized economy and liberal life style dominate those in society who don’t see matters the same way.   Modern Europe is not as monolithic and devoted to the European Union concept as most of the headlines would indicate.
You have to be a real news hound to be aware of some of the rumblings afoot in Europe today.  Most of the articles regarding these actions are buried on the back pages if they are reported at all.  Let’s look around the modern map of Europe and see if there is any modern inclination to divide the house.   Hey, we can start with the former Yugoslavia.   Can you even name more than two of the new countries that have mushroomed in the last generation from the collapse of that nation?   Those different areas had quite unique and distinct views of life, economics, religion and the role of government.  They couldn’t and ultimately didn’t get along.  Thus today we have Serbia, Croatia, Slovenia, Montenegro and in  Kosovo to name the ones you may recall.  Also today even though it is not discussed in our news sources we can see other areas where splits are being openly discussed and advocated.  How about Scotland?  It has been part of the United Kingdom for centuries and now we see that the Scots are pushing for complete independence.   The Scots and the English and Welsh are pretty darn close culturally and in terms of their views on the economy and government’s role and yet the differences are strong enough to be leading to the vote in 2014 for separation.   Move over to the Continent and we see that Catalonia in Spain is having open conversations about a separation from Madrid.  How dramatic and profound a split it might be is not known now but the fact is that the discussion is under way.  Spain could face and division down the road.  If you follow the news carefully you might have seen the reports that some have called on Madrid to even send more troops to Barcelona.  Move a bit farther east and we come to Italy.  Another nation facing economic crisis and that has had stirrings for some time now about the divide between North and South.  The former prime minister Berlusconi had his power base with the Northern League.  That political group has a very strong contingent that believes southern Italy should be cut loose because it drags down the whole nation and takes more from government than it contributes.   Move north a few hundred miles and we get to Belgium.   Yes, that small nation squeezed between France and Germany.   It has had for centuries a divide between the French-speaking areas and those in the Germanic speaking regions.  Everyone has assumed that it all has and would work out and both areas would love one another in the politically correct era.  The headquarters for both NATO and the European Union and its parliament are in Brussels.  Yet, within the last month the Flemish party advocating separation into its own nation as gained substantially in the recent elections.  They want to go their own way.   Only time will tell how things evolve in the various countries and regions but division of those countries down the road is certainly not out of the question.

If Europe is the preferred model for the Left does that preference include the notion of dividing culturally diverse regions into more homogeneous areas?  Ultimately that is what is behind every one of those movements.  Those people want to be with and associate with those they identify as being socially and culturally akin.  They don’t want as much diversity as comes with the larger entity.   Are they any lessons for the US in this analysis  and what might they be?   Would your life, your happiness factor be diminished if the US were divided into separate nations?  We will examine this question in more detail over the coming months.  Ponder on it in the meantime.  After all, change is the constant in life and societies.

“Is freedom anything else than the right to live as we wish?  Nothing else.”  Epictetus, Roman stoic philosopher.  http://www.olcranky.wordpress.com


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North-South And Secession

Nope this isn’t an analysis of the War Between the States in the US.  Although that war and its causes and aftermath might offer some useful guideposts for our friends across the pond.  Let’s talk about the current conflicts and disagreements among the Eurozone countries and their current dilemma in working out a solution to the disparity between the countries who follow a relatively frugal approach to their fiscal policies and those that have a much more laizzez faire attitude about the seemingly endless flow of funds from government to support their lifestyle.

You have read accurately that there is a divide already existing between the countries of the Eurozone on a North-South axis.  Those to the North are generally in much better shape than their neighbors to the South.  The southern edge of Europe covers Greece, the Balkan countries, Italy, Spain and Portugal.   Of course Ireland and Iceland have had their difficulties but those appear on the mend and their debt problems were small compared to the avalanche of debt bursting out of the southern countries now.  Those are the areas of immediate and longer lasting concern to the Eurozone nations because of their debt loads relative to their ability to service those debts even at the still historically low interest rates for their soverign bonds.   Do you think it is mere coincidence that the northern tier of countries are in better shape than their southern neighbors?

For several centuries this divide has been true.  In Roman times it was different and it was still true that the South was dominanat during the Medieval period but those days are longs gone.  Italy as a single entity has only been around about 150 years.  It as a nation is younger than the US.  Before Garibaldi it was a hodge-podge of principalties and city-states going back to the Dark Ages.   All of Europe follows essentially the same welfare-state philosophy but by culture and tradition the northern tier has been more industrious and hard working than their sourthern counterparts.  Blame it on geography or climate or any other factor you wish but those are the facts.   The Southern group likes to bask in the sun a bit more and expects more from the government and other people’s money.  The northerners are inclined to be more independent and self-sufficient and even though they do have welfare states they have over the decades limited to reach of the government share of their economy and culture.  This barrier became most clear with the advent of Thathcher in Great Britain.   But then other more “conservative” governments and attitudes slowly infused the body politic in Europe in the North anyway.

The Eurozone itself was a creature from the leaders of the Northern tier of countries.  All the southern countries were an after thought.  France, the Benelux countries and Germany were the original backbone and still are of the Eurozone.  The bulk of the rest of the economic strength still comes from the North with Finland, Sweden, the Danes and even Great Britain even though it is not part of the Eurozone currency system but it is a vital member of the Euro community.

Just as we had our divide and war between north and south it is nor beyond the pale that the North and South in Europe will likewise break and there will be secession talk.  In fact there has already been secession talk but it isn’t called that.  Italy is a good examplar of this situation.  It also is divided along north/south communities.   The south of Italy has since its inception been the economic drag on Italy.  It produces at best around 30% of GDP but receives more than 60% of government largesse.  The north is more urban and industrial and has been for a long time.  The people there are the worker bees and the southerners are the beneficiaries of politicians payoffs in exchange for votes. (sound familiar?)   In fact this discontent became so intense that it resulted in the formation of the Norther League.  That political movement was and is centered in the major northern  industial cities of Italy.  There was and still is talk of breaking the country into two parts, separating the North from the South.  This polical party was the base that led to the victories of Berlusconi of recent note.  The political rise of the Northern League was not so much about taxes, policy or the welfare state; it was about not having to carry the South anymore on their backs.  They believed the South didn’t fairly contribute their fair share to the economy and that they took out far more than they put into the hopper.  Those are indeed the facts.  The South of Italy was getting a free ride on the backs of others and spending other people’s money.  The government built “infrastructure” projects with alacrity and assured the North this would benefit everyone.  But after several decades of this p0licy the facts on the ground haven’t changed.   The South is still a drag on the nation.

Much of the current debt of Italy has been accrued due to the enomous sums it has expended in the South for these projects.   If you read the back pages and follow some of the foreign news sources you will note these complaints of the North.  The same complaints have application generally to the northern tier of Eurozone countries.   Brussells has been spending far more money in the “underdeveloped” southern tier of countries and many in the northern areas feel that they are being short-changed.   Who knows if Italy will divide at some point but the odds are surely much higher that the Northern tier of the Eurozone will decide at some point in the near future that the cost of including the southern tier of countries is not worth the candle.   There won’t be a war but intense and bitter acrimony and trade wars could be on the European horizon and the North could decide to secede and form its own smaller but much more vibrant and healthy trade and currency economic organization.  Let’s see how it plays out over the next decade.  The European problems will  not be solved anytime soon.   There is a limit to how much of the debts of the South the North will pay and when that is reached then scramble to re-shuffle the deck will begin.

The recent recess appointments by BO are an assault on the Constitutional relationship between the branches of government.  It goes far beyond party or ideology.  The painful and slow process of our divided government has served us well for over 200 years.  We have a President who must follow and obey the Constitution; he is not a King who rules by edict.  Where is Robert Byrd when we need him?  I didn’t even like his politics at all but I will admit he was an ardent defender of the Senate and its privileges and Constitutional powers.  He would have screamed at this action.  www.olcranky.wordpress.com

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2 Cents Worth On Life Its Ownself

We all just wrapped up one year and are embarking anew with a fresh calendar so here are the thoughts from the past and ones for the conjectures of the future.

Sure be glad when the Iowa caucuses are done.   Enjoy staying up with the political arena but it has gone on long enough.  Besides my memory is that the winner of the Iowa votes have had very mixed results down the road in other primaries.   It is no better predictor of future nominees than general public speculation.

It always seems like a lot more work taking down all those Christmas decorations than it does when you are putting them up around the house.

It took the European Union about 10 years to put together the Euro and have it finally launch as a real world currency.  One wonders if it will take them that long to undo that currency agreement?  

Interesting that concern and worry over a renewed and powerful Germany in Europe gave rise to NATO , the very idea of the European Union and so many other agreements over the decades since the end of WWII.   The French in particular have been very wary of a revitalized Germany.  But here we are and Germany is the dominant player in the European Union.  Sacre Bleu!

With Iran stepping up its military presence in the Straits of Hormuz you have to wonder how bad things would be if there was another accident like 20 something years ago when we shot down that airliner by accident thinking it was taking hostile action against our fleet.   Such an incident right now would really ratchet up the tensions which are already high enough.  Here’s hoping all those Bluejackets are staying alert and that gunnery officers are on their toes.

In the old west during the days of the cattle drives the cook was far more than the guy who did the cooking.  He was the doctor more often than not and he was also the blacksmith to mend tools and equipment and he was the farrier for the horses.  Next to the boss he was the number two man and brooked no disagreement with anyone.

In case you have forgotten don’t forget the tax increases due next year.  One I guess should assume that the FICA taxes will be reduced again this year by 2% but then go back up next year.  I mean they can’t keep the “holiday” going very long or Social Security will be an even more endangered species of entitlement.  On top of that don’t forget the 3.2% increase on most dividends, capital gains etc.  and there is the surcharge for high earners on Medicare withholding.  All in all a pretty steep increase in taxes for one year.  Of course there is the concern like always that tax increases of any sort will produce the inevitable drag on the economy.  As the date looms closer next fall it will receive more attention or at least one would think so.

As always it is amazing and amusing how easily people can get misled on topics broached by politicians.  Gringrich’s thoughts about reining in the judiciary have been denounced by some as radical or unconstitutional.  I only offer the thought that you read the Constitution for yourself.  The idea of eliminating certain courts is not revolutionary because it is an idea embedded in the Constitution itself.  Article Three has from day one provided that Congress can create “such inferior courts”  blah blah blah.  Other than the Supreme Court all other courts exist at the pleasure of Congress and always have.   Thomas Jefferson for one had tremendous fights with the judiciary and considered eliminating District Courts and the removal of some US Marshalls considered too political and/or corrupt.

How many moms gave a big sigh of relief this morning?   Much as they love their little munchkins they all started back to school today for the spring semester and mom will have a few hours to herself for the first time since they got out of school for Christmas.

At the same time that Europe has been touting its “union” it is interesting to note that there has also been a serious move for regionalism or separatism in their bailiwick.  Belgium is a good example.  Since European Union got up an on-going those Belgians have been quite busy splitting up the power and authority of central government.  Flanders has it own parliament as does Wallonia and then there are special assemblies for linguistics groups along the lines of the Dutch speaking and the French speaking.  Even their executive functions in Brussels require two each of Dutch speakers and French speakers.  And for good measure they even have local self government for the handful of German speakers along the eastern border of Wallonia.  They love the welfare state but just don’t trust the central authority as much as advertised if you only followed the headline news.  Of course all those separate entities also have their own administrative personnel, bureaucrats.  Similar events have occurred in Spain (Catalonia, Basques country) , in the Tyrol region, northern Italy and of course we all know that Czechoslovakia is now two countries.  There are more examples.  Read and research yourself.  Always look a little beyond just the title of the Chapter when reading the book.

No man is an island unless he is asking for a loan from you.   www.olcranky.wordpress.com

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2 Cents Worth On Life Its Ownself

A few thoughts to ponder during the Holiday Season and ideas of the inquiring mind about the current state of affairs.  Buckle up and take the ride.

Greece has been much in the news lately because of their debt problems stemming from their very generous welfare state and highly regulated economy.   They are in a death spiral at the moment and trying to right the ship, or at least so they say.  There are some of us old enough to remember a little history about how they got to this point.   After the War most of Europe made substantial progress and improved the economic situation greatly all the way into the ’70’s.   Greece, Portugal and Spain were the noticeable laggards.  Their economies were third world during the period.  The European community was formed and the free trade zone established during this period which ultimately lead to the Eurozone with the Euro currency.   Greece wanted in badly in the ’70’s but lots of Europe was skeptical but they did want the whole nine yards and all of Europe to be in the economic union.   Greece couldn’t qualify on its own merit so it was granted special subsidies to be a member.  (No one ever accused the Greeks of being bad bargainers).  It was a great deal for Greece and the rest of Europe hoped it would be a good deal down the road for everyone.   Shortly after Portugal  and Spain applied for membership having ended the authoritarian reigns of Salazar and Franco. 

They were no bargain but again “Europe” wanted everyone in the deal because it would benefit all, at least that was the belief.  Guess who raised the most objection to them?  You guessed it, the Greeks.   They were already running deficits and their economy was still lagging behind everyone else but they thought the Iberians were too much of a load to carry.  To induce the Greeks to approve the addition, the rest of Europe again granted special privileges (subsidies) to the Greeks for them to go along with the Iberian additions.   With the extra money in their pocket for doing nothing more than saying yes, the Greeks were happy to welcome them in the early ’80’s.  We all know how that has worked out.  The Eurozone with the Euro came into existence finally in the late ’90’s.  The Greeks continued to have a bloated public payroll, low productivity per worker and huge deficits.  Others are having to step in and pay off the debts for the Greeks for their profligacy and the Greeks riot in the streets about how unfairly they are being treated!   Funny, I was always taught that whoever pays the Piper gets to call the tune.

Speaking of our friends in Europe are you getting as confused as I am about the way they intend to fix their debt problems.   We have the EFSF which is the European Financial Stability Fund that was is going to get money from somewhere; they can’t seem to articulate exactly where.  Then we now have the ESM, the European Stability Mechanism which is going to add more money to the bailout pot.  New ideas seem to emerge every week.  Will the ECB (European Central Bank) simply print up new money like our Fed does for its bailouts?  There has been talk of some authority, as yet not clearly specified, that will issue bonds and then loan that money out to the needy hands.  Maybe I am just not smart enough to understand the thinking of all those European “smartest guys in the room”.  I do know it all boils down to the Germans because they are the hardest working ants in the field and the most frugal.  Can you blame them for asking what they are getting out of all this?

You all remember the story of Robin Hood.  The complaint was tha the local Sheriff of Nottingham was in cahoots with some of the local big wigs and stealing money from the public coffers.  Am I the only one who has ever wondered why Robin Hood didn’t just go after the evil Sheriff and leave the others alone.  He ended up stealing from anyone he believed was involved in wrongdoing without trial or proof and then gave the money to his preferred special interest group and built a political machine.   Had the bad Sheriff merely been replaced with another Sheriff that had another coterie of cohorts after the same bag of money?  Was he really a hero or just another wannabe dictator?

I don’t get the Payroll Tax reduction for one year.  It will add up to about $80 per average family per month for the next year.  It is like the $600 check most of us got back a few years ago and the cut we’ve had this year.  That amount spread out over a year just doesn’t motivate lots of renewed spending by consumers.  I mean look at the economy for this year.  Has that cut of 2% in the payroll tax boosted the economy this year?  A year flies by really fast.  You reach your own conclusion.  I love all lower taxes but cuts need to make sense in a broader picture.  We would all love to have that extra 80 bucks a month but that won’t cause us to go buy a pick up truck; maybe we’ll do a couple of trips to Appleby’s with the family.  

After all the sound and fury of the last year the fact is that the National Debt is higher still and going up like a rocket.  All the talk about cutting hasn’t happened yet and the so-called cuts are merely reducing the amount of the growth of the debt which is currently projected be 44 trillion in ten years.   Maybe we are just Greeks writ large.   Everyone can’t live on the Federal payroll directly or indirectly forever.  Someone has to actually work in the private sector to create real wealth and money.  The Government doesn’t create wealth, it takes wealth for allegedly the common good.   As it grows the private sector shrinks and soon there won’t be anyone to tax if we keep on the present road.

“I desire what is good; therefore, everyone who does not agree with me is a traitor”.   George III www.olcranky.wordpress.com

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French Fry Euro And Zone

The news today is filled with allegations that Sarkozy has made a direct threat to abandon the Euro and to withdraw from the Euro zone confederation.   Denials from the Germans, Spanish and “aides” to “Sarkozy have spewed forth in the media ether already.  But the European markets and our own are reacting with alacrity to the putative pronouncement.  If you know a bit of French history and European history it would come as no surprise whatsoever that the French would abandon their partners when crunch time comes.

It is another question altogether whether or not the EU and central bank there should offer such a bailout package for the Greeks.  A very cogent and moral argument can be made that the Greeks should be made to suffer the consequences of their own folly.  The debate is really not much different, if at all, than the one we endured during the fall of ’08 about whether we should bailout AIG, Fannie and Freddie, GM and Chrysler and then a group of large banks.   Pundits, economists and great thinkers can and will debate the efficacy of that program for decades to come.  Not allowing failure to fail is certainly not the format for a vigorous free market system.  If they had all gone under there would have been lots of pain but most of it would have been borne by those who were running or working for those companies or doing business with them.  Those were all choices made by those various groups.  Depositors could have been protected for far less than the cost of the TARP program and the Stimulus bill only leaked away like sprinkling drops of water into the ocean.  We still lost 2.5 million (or calculate your own number) since that time anyway.  Except for a handful relatively speaking of construction jobs here and there who the heck has benefitted from any of that money?  The Europeans can bailout whoever they wish, it is their deal not ours.   We are NOT all in this together.   Maybe the Europeans haven’t learned anything from our experiences so far.

I am not mad at the French for their position but find it typical of their view of partnering with anyone.  Many individual Frenchmen are grateful people.  You can go to the coast of Normandy today and talk with the older folks and many will heap praise on the Americans and British for the invasion and their liberation for the Nazis.  But as a nation they are not grateful and always have the attitude of what is in it for them.   Thus is has ever been so.  Certainly since the days of Talleyrand and the end of the Napoleonic era they have always sought only what is in their interest in their dealings with all parties including those who are their allies.   Loyalty is not their long suit.   Talleyrand astutely observed that nations do not have friends but only interests to be protected.  

In international relations and the diplomatic world that is a realistic policy and not necessarily to be condemned.  It matches well with the Realpolitk of Bismarck from the 19th century and the diplomacy of Kissinger during the Cold War.   It is not that they are looking out for their own interest that is bothersome it is the hypocrisy and arrogance they deploy in their messages to the world that boggles the mind.  They have a history of bugging out when the going gets tough.  They never gave much of a thanks for the British blood shed in Flanders fields for their protection during WWI nor did they heap praise on the American Expeditionary forces that closed the military deal against Germany.  During WWII they quit when they still had millions of men under arms and made their peace with the Germans and split France into Vichy and occupied France.  Those Vichy French killed the first American troops to storm the beaches in North Africa a couple of years later and Churchill had to send the British navy to sink a goodly portion of the French fleet at Oran because they didn’t have the guts to bring their ships to Allied ports.  All those decisions they thought were best for them at the time made.

After the War and the creation of the United Nations and NATO then French looked for the first opportunity to dump their friends again.  De Gaulle withdrew the French from the NATO alliance because he thought he could win better terms dealing with the Soviets without the encumbrance of allies.   Maybe so, maybe not but you don’t abandon your friends and those who helped you when the bullets were flying.  Now they face difficulties with their EU partners.  Whatever decision they make you can rest assured will only be examined through the prism of what they believe is in their best interest alone without regard to any commitment made to others.  Again they are loyal only to themselves.  Sacrifice is not a word often used in their vocabulary.   Vive la France!

“the mob, those political animals need organization, which means simple orders and chiefs.”  De Gaulle.   http://www.olcranky.wordpress.com

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