Slow Motion EuroZone Trainwreck Continues

December 19th, 2011

It didn’t take long for cracks to start appearing among national politicians who are not nearly so sanguine over the prospect of Anschluss II as their counterparts in Brussels.

The French people are not wild about it either. But French politicians only pay slightly more attention to the French people than they do to the American government, which is to say: precious little.

The Portuguese threaten nuclear default.

Did the announcement calm markets elsewhere? Not so much:

Some of the world’s most powerful investment banks were downgraded by ratings agency Fitch as Germany’s cherished European fiscal compact appeared to be unraveling. The banks that were downgraded [Wednesday] night include US banks Bank of America and Goldman Sachs, Barclays and France’s BNP Paribas. Switzerland’s Credit Suisse and Germany’s Deutsche Bank were also cut.

Even France is in danger of a downgrade.

Of course, all this supposes that the new EuroPact will actually accomplish something. Fitch Ratings is not so sure. After warning of rating downgrades on “Belgium, Cyprus, Ireland, Italy, Slovenia and Spain,” they come to the bracing conclusion that “a ‘comprehensive solution’ to the eurozone crisis is technically and politically beyond reach.”

And now for the section of the roundup in which I quote whopping large chunks of Ambrose Evans-Pritchard on the whole thing.

First, the EU would like the UK to throw more money into the black hole. The UK is telling them to get stuffed:

Euro rage is reaching new heights over Britain’s latest outrage.

Our refusal to pony up a further €31bn we cannot afford, to prop up a monetary union that was created against our wishes and better judgment, and with the malevolent purpose of accelerating the great leap forward to a European state that is inherently undemocratic.

It is being presented as treachery, Anglo-Saxon perfidy, and the naked pursuit of national self-interest.

Let me just point out:

1) The UK never agreed to such a commitment in the first place. The line was written into the December 9 summit communiqué in an attempt to bounce Britain into handing over the money.

2) The UK does not consider the rescue machinery to be remotely credible as constructed.

3) The eurozone has the means to tackle its own debt crisis, if it is willing to use them. These include fiscal pooling and the mobilisation of the ECB.

As eurozone politicians never tire of reminding us, their aggregate debt levels are lower than those of the UK, US, or Japan. They are right. So get on with it and stop begging.

Euroland is of course entitled not to deploy eurobonds or the ECB if these mean a) a breach of the German constitution b) violate the ECB’s mandate. But that is entirely their choice. Both the Grundgesetz and the ECB mandate can be changed.

It was EMU members who created this dysfunctional currency. They are now trying to shift the consequences of their error onto others rather than taking the minimum steps necessary to fix the problem at root.

Second, his pointing out that the proposed treaty actually accomplishes very little:

The leaders of France and Germany have more or less bulldozed Britain out of the European Union for the sake of a treaty that offers absolutely no solution to the crisis at hand, or indeed any future crisis. It is EU institutional chair shuffling at its worst, with venom for good measure.

[snip]

And what for? All this upheaval for a mess of pottage, a flim-flam treaty? The deal is not a “lousy compromise”, said Angela Merkel. Well, actually that is exactly what it is for eurozone politicians searching for a breakthrough.

It tarts up the old Stability Pact without changing the substance (although there will be prior vetting of budgets). This “fiscal compact” is not going to make to make the slightest impression on global markets, and they are the judges who matter in this trial by fire.

Yes, there is more discipline for fiscal sinners, but without any transforming help. Even the old “Marshall Plan” of the July summit has bitten the dust.

There is no shared debt issuance, no fiscal transfers, no move to an EU Treasury, no banking licence for the ESM rescue fund, and no change in the mandate of the European Central Bank.

In short, there is no breakthrough of any kind that will convince Asian investors that this monetary union has viable governance or even a future.

Germany has kept the focus exclusively on fiscal deficits even though everybody must understand by now that this crisis was not caused by fiscal deficits (except in the case of Greece). Spain and Ireland were in surplus, and Italy had a primary surplus.

As Sir Mervyn King said last week, the disaster was caused by current account imbalances (Spain’s deficit, and Germany’s surplus), and by capital flows setting off private sector credit booms.

The Treaty proposals evade the core issue.

Ironically, the actual text of the new agreement has all sorts of things (like requiring a Balanced Budget Amendment to national constitutions) that, had it been in place and enforced 15 years ago might have prevented the situation in the first place. But if the nations of Europe had been capable of balancing their budgets, they wouldn’t have needed a Euro-fueled spending spree to keep their welfare states solvent in the first place.

For the PIIGS, growth is neither possible nor enough: “There is at this point no conceivable policy scenario which somehow makes Italy and Greece grow by as much as 2% a year for the next few years.”

Fed says no Euro bailout. But one might wonder at the firmness of their resolve. Especially since the head of the IMF says they need funds from outside the EU. Because who doesn’t love throwing good money after bad?

European bank walks are starting to turn into bank jogs.

Gold prices have plunged since the Euro treaty was announced. A sign the worst has passed? No, quite the opposite: Europe’s banks are selling their gold reserves in an attempt to stay solvent.

Let’s see if I’ve got this straight: EuroZone members, threatened by sovereign default on their bonds, are giving money backed by those same bonds to the IMF, which will use the money to prop up the EuroZone in order to prevent EuroZone countries from defaulting on their bonds. In order to help readers understand the genius of this maneuver, I have slightly altered a graphic from a recent movie to explain the concept:

(Hat tips: Insta, Ace, and The Corner, plus no doubt a few I’ve forgotten.)

Flashback: Noam Chomsky Attacking Both Vaclav Havel and Christopher Hitchens

December 18th, 2011

To set the historical record straight, it is necessary from time to time to point out that the majority of “Left Wing Intellectuals” did not spend the Cold War criticizing communist governments for oppressing their people, but rather attacking any attempt by the U.S. government or conservatives to oppose communism. In their eyes, Ronald Reagan was an “insane imperialist warmonger” for calling the Soviet Union an Evil Empire and attempting to fight communism throughout the world.

So in the High Church of the American Left, praising America’s fight against communism was the ultimate sin, right up there with opposing global warming. Even so, some may find it surprising just how viciously that High Church’s uncrowned Pope, Noam Chomsky, attacked Vaclav Havel for the sin of praising America as a “defender of freedom.”

Sayeth Pope Chomsky to his leftwing pal Alexander Cockburn:

As a good and loyal friend, I can’t overlook this chance to suggest to you a marvelous way to discredit yourself completely and lose the last minimal shreds of respectability that still raise lingering questions about your integrity. I have in mind what I think is one of the most illuminating examples of the total and complete intellectual and moral corruption of Western culture, namely, the awed response to Vaclav Havel’s embarrassingly silly and morally repugnant Sunday School sermon in Congress the other day. We may put aside the intellectual level of the comments (and the response) — for example, the profound and startlingly original idea that people should be moral agents. More interesting are the phrases that really captured the imagination and aroused the passions of Congress, editorial writers, and columnists — and, doubtless, soon the commentators in the weeklies and monthlies: that we should assume responsibility not only for ourselves, our families, and our nations, but for others who are suffering and persecuted. This remarkable and novel insight was followed by the key phrase of the speech: the cold war, now thankfully put to rest, was a conflict between two superpowers: one, a nightmare, the other, the defender of freedom (great applause).

Reading it brought to mind a number of past experiences in Southeast Asia, Central America, the West Bank, and even a kibbutz in Israel where I lived in 1953 — Mapam, super-Stalinist even to the extent of justifying the anti-Semitic doctor’s plot, still under the impact of the image of the USSR as the leader of the anti-Nazi resistance struggle. I recall remarks by a Fatherland Front leader in a remote village in Vietnam, Palestinian organizers, etc., describing the USSR as the hope for the oppressed and the US government as the brutal oppressor of the human race. If these people had made it to the Supreme Soviet they doubtless would have been greeted with great applause as they delivered this message, and probably some hack in Pravda would have swallowed his disgust and written a ritual ode.

I don’t mean to equate a Vietnamese villager to Vaclav Havel. For one thing, I doubt that the former would have had the supreme hypocrisy and audacity to clothe his praise for the defenders of freedom with gushing about responsibility for the human race. It’s also unnecessary to point out to the half a dozen or so sane people who remain that in comparison to the conditions imposed by US tyranny and violence, East Europe under Russian rule was practically a paradise. Furthermore, one can easily understand why an oppressed Third World victim would have little access to any information (or would care little about anything) beyond the narrow struggle for survival against a terrorist superpower and its clients. And the Pravda hack, unlike his US clones, would have faced a harsh response if he told the obvious truths. So by every conceivable standard, the performance of Havel, Congress, the media, and (we may safely predict, without what will soon appear) the Western intellectual community at large are on a moral and intellectual level that is vastly below that of Third World peasants and Stalinist hacks.

So: Vaclav Havel, a man who spent most of his adult life fighting communist oppression and imprisonment, was “morally repugnant” and worse than a “Stalinist hack” for saying that the U.S. was ” the defender of freedom.” Oh, and compared to any place America was fighting communism, “East Europe under Russian rule was practically a paradise.” So sayeth Pope Chomsky.

Havel wasn’t the only formerly left-wing public figure dying this week who attracted Pope Chomsky’s scorn for heresy. Christopher Hitchens also received condemnation for suggesting that Osama Bin Laden was, in fact, demonstrably more evil and culpable in the death of innocents than Bill Clinton. Hitchens, of course, gave at least as well as he got, and also noted the moral bankruptcy of Chomsky’s attack on Havel:

The last time we corresponded, some months ago, I was appalled by the robotic element both of his prose and of his opinions. He sought earnestly to convince me that Vaclav Havel, by addressing a joint session of Congress in the fall of 1989, was complicit in the murder of the Jesuits in El Salvador that had occurred not very long before he landed in Washington. In vain did I point out that the timing of Havel’s visit was determined by the November collapse of the Stalinist regime in Prague, and that on his first celebratory visit to the United States he need not necessarily take the opportunity to accuse his hosts of being war criminals. Nothing would do, for Chomsky, but a strict moral equivalence between Havel’s conduct and the mentality of the most depraved Stalinist.

Less than a year later, Hitchens himself would have enough of his former allies on the left and take leave from the High Church’s oldest organ, The Nation:

It’s obvious to me that the “antiwar” side would not be convinced even if all the allegations made against Saddam Hussein were proven, and even if the true views of the Iraqi people could be expressed. All evidence pointed overwhelmingly to the Taliban and Al Qaeda last fall, and now all the proof is in; but I am sent petitions on Iraq by the same people (some of them not so naïve) who still organize protests against the simultaneous cleanup and rescue of Afghanistan, and continue to circulate falsifications about it. The Senate adopted the Iraq Liberation Act without dissent under Clinton; the relevant UN resolutions are old and numerous. I don’t find the saner, Richard Falk-ish view of yet more consultation to be very persuasive, either.

This is something more than a disagreement of emphasis or tactics. When I began work for The Nation over two decades ago, Victor Navasky described the magazine as a debating ground between liberals and radicals, which was, I thought, well judged. In the past few weeks, though, I have come to realize that the magazine itself takes a side in this argument, and is becoming the voice and the echo chamber of those who truly believe that John Ashcroft is a greater menace than Osama bin Laden. (I too am resolutely opposed to secret imprisonment and terror-hysteria, but not in the same way as I am opposed to those who initiated the aggression, and who are planning future ones.) In these circumstances it seems to me false to continue the association, which is why I have decided to make this “Minority Report” my last one.

Condemning Havel, driving out Hitchens; two small examples of just how extensively a reflexive anti-Americanism and hatred of conservatism has warped the judgment of those still filling the pews of the High Church of the American Left.

Flashback: Obama Snubs Havel

December 18th, 2011

I had forgotten about this:

Europe’s most famous Cold War warrior and former communist political prisoner was excluded from a ceremony yesterday where Russia and the U.S. took steps toward world peace.

Vaclav Havel, the president of Czechoslovakia and then Czech Republic for 13 years, was not invited to the signing of the START II nuclear arms reduction treaty by President Obama and his Russian counterpart Dmitry Medvedev, which took place in Prague Castle’s Spanish Hall, where the playwright-politician gave his farewell speech to a standing ovation from the Czech Parliament.

Was the ceremony snub Obama’s revenge because Havel, along with 20 other ex-Central and Eastern European leaders, signed an open letter to the American president last summer that warned of a menacing Russia and complained that their region was “no longer at the heart” of U.S. foreign policy?

This is sadly typical, since the left wing of the Democratic Party has always seemed more interested in signing meaningless “peace” treaties with tyrants than worrying about the freedom or security of those threatened by them. This “no enemies on the left” mentality is why they’ve proven themselves far readier to stand with left-wing tyrants like Fidel Castro and Hugo Chavez than the people those tyrants imprison and arrest.

Vaclav Havel, RIP

December 18th, 2011

We’ve lost one of the great heroes of the 20th century.

Vaclav Havel, a man who was (in chronological order) an important playwright, a hero of the struggle against communism, and founding President of the Czech Republic, is dead at 75.

Of the three, Havel’s role in the struggle against communism was far and away the most important. In a country in which the state’s (and in turn Moscow’s) imprimatur was necessary for a playwright to make a living, Havel refused to buckle under or avoid criticizing the great evil that was communism. In the wake of Prague Spring, his works were banned and he was repeatedly imprisoned, but he kept speaking out, finally helping lead the Velvet Revolution and, after the fall of Communism, setting the stage for the “Velvet Divorce,” in which the Czech Republic and Slovakia split peacefully into two separate nations, even though he opposed it.

Havel, unlike Yasser Arafat, Le Duc Tho and Barack Obama, never won a Nobel Peace Prize, despite doing more for peace, justice and freedom than the vast majority of winners.

Understand that there are people as noble, brave and truthful as Havel sitting in jail in Cuba and China this very moment, many of whom who have been beaten and tortured for speaking truth to power. And Havel, in and out of power, never stopped fighting for the victims of communism, as shown by this video:

NEWS FLASH: Ricardo Sanchez Drops Out of Senate Race

December 16th, 2011

“Leading Democratic U.S. senatorial candidate Ricardo Sanchez announced Friday that he’s ending his campaign to replace retiring Sen. Kay Bailey Hutchison.”

I didn’t exactly predict it, but I did suggest it was a strong possibility:

Even before his house burned down, there was precious little evidence Sanchez was really interested in running for the Senate. His fundraising is abysmal, his media appearances are rare, his campaign stops even rarer (Ted Cruz and Glenn Addison do more campaigning in a day than Sanchez manages in a month), his social media footprint miniscule, and his buzz factor is non-existent.

Sanchez peaked when he announced for the race. Ever since then it’s been a long, painful slog, with his only reward the prospect of being slaughtered by Ted Cruz or David Dewhurst in the general election. Is there a serious non-partisan observer anywhere who looks at Sanchez’s dismal campaign and thinks he can win?

Evidently not.

So, Texas Democrats: Right now the only two candidates on your side who have filed are Sean Hubbard and Daniel Boone. Or a guy that doesn’t look old enough to drink, and a guy who’s been dead for 191 years. Hubbard’s been running longer, but Boone has a great name to campaign on.

Of course there’s still time for additional candidates to file by Monday. (And maybe declared-but-not-filed longshot candidates Stanley Garza and Virgil Bierschwale will jump in.) I would imagine that DSCC chair Patty Murray will be working the phones like mad this weekend to at least give some semblance of a real Texas Senate race. Unless Tommy Lee Jones changes his mind, I don’t see her having much luck.

Maybe Hubbard will actually start campaigning full-time. I got the impression that he was working his campaign hours around some sort of day job.

Actually, Democrats shouldn’t be too depressed over this turn of events. All political issues aside, Sanchez was simply a bad candidate who ran a lousy campaign. At least Hubbard acts like he actually wants to run.

Texas Senate Race Update for December 16, 2011

December 16th, 2011

A few quick updates for things too important to sit on over the weekend:

  • Blue Dot Blues brings word that a deal has been reached on dates for next year’s elections: Primary April 4, Runoff June 5.
  • Craig James takes a leave of absence from ESPN to mull a Senate run. That’s certainly a much stronger indication he’ll run than we’ve had before.
  • I was unaware until I read this Chronicle piece that James joined the Texas Public Policy Foundation (and seems to have done some events for them, though he does not seem to currently be on the board), which would indicate at least some familiarity with conservative policy issues. Of course, Ted Cruz used to work in TPPP’s Center for Tenth Amendment Studies.
  • Another longshot Republican candidate , “Dr. Joe” Agris, files for the race. Dr. Agris is evidently a plastic surgeon who has done some good works, many in association with late Houston broadcasting legend Marvin Zindler (who made use of Dr. Agris services on many an occasion). Dr. Agris is not entirely a political neophyte, having run in the general election for Texas House District 134 in 2008. He reportedly waged a low-effort campaign (or so says lefty Houston blog Off the Kuff), pulling in only 42% of the vote in a distract John McCain won. He’s evidently been contemplating this run at least since April.
  • Tom Leppert visits Corpus:

  • David Dewhurst bashes Obama:

  • Ted Cruz bashes Obama:

  • Cruz is also raising money via Twitter.
  • “Is it Ricardo?” “No, it’s just a boy.”
  • Another of My Evil Schemes Thwarted!

    December 16th, 2011

    Instapundit Glenn Reynolds notes that he’s “not going to reward lies with traffic.”

    Well there goes my plans for reporting his sordid love triangle with Scarlett Johansson and Megan Fox…

    LinkSwarm for December 16, 2011

    December 16th, 2011

    I get the impression that this “Christmas” thing you hear so much about is getting close. I should probably do something about that. In the meantime, some links:

  • Iowahawk channels Stephen G. Bloom on the Hell that is Iowa.
  • Dwight has a good bit on the left’s favorite cop killer. “I believe some people do things so awful to other people that they deserve to die. I believe Ted Bundy deserved to die. I believe Ronald Clark O’Bryan deserved to die. And I think Abu-Jamal deserves to die.”
  • Dwight also mentioned Christopher Hitchens’ Why Orwell Matters, which I have not read. (In fact, while I have read numerous of Hitchens’ essays, I have not read any of his books, which is a deficiency I should probably correct.) Here’s a very interesting interview with him on the subject. However, if I may rudely quibble with the recently dead (and I suspect Hitchens would insist on doing so in the same situation), I do take partial issue with his assertion that “the right doesn’t have anyone it can come up with from that period who was as prescient as Orwell.” I would argue that Malcolm Muggeridge’s reporting on the Holodomor (Ukrainian famine) would not only qualify, it preceded Orwell’s reporting from Catalonia.
  • Speaking of Hitchens, Michael Totten reprints their entirely-too-exciting exciting exploits in Lebanon together. That’s also reprinted in The Road to Fatima Gate, which i should give off my lazy ass and do a review of before the year is over. (Summary: If you want to know what’s happened in Lebanon over the last decade, you should read it.)
  • Mark Steyn on how America wasted the unipolar moment.
  • More on the Democrats’ white working class problem.
  • A view from across the pond: “The failure of the Occupy Wall Street movement and its descent into Lord of the Flies-style chaos, and in many instances thuggery and criminality, is emblematic of the dramatic decline of the Left in the United States.” (Yeah, I submitted the Fark story as well.)
  • Dallas vs. Detroit.
  • And just in case you missed it, Texas is still kicking ass on the jobs front.
  • On a completely non-political note: Llamas With Hats.
  • Christopher Hitchens, RIP

    December 16th, 2011

    Not unexpected, but still sad news to report the passing of one of our more interesting writers. And one of the few “public intellectuals” worthy of the term.

    Michael Totten has more.

    Conservative Commune has still more, including a wide variety of links to other tributes.

    Texas Senate Race Update for December 15, 2011

    December 15th, 2011

    The big news in the Senate race is a change to the filing deadlines:

  • According to Blue Dot Blues, “the new filing period for all candidates from precinct chair to U.S. President has been extended to 6:00 pm on Monday, December 19th.” Plus “once maps are finalized following the Supreme Court hearing in mid-January, there will be a new filing period for all primary ballot races.”
  • Heh. The truth about Craig James and those hookers.
  • Another non-fan at Fox Sports.
  • Ted Cruz appears on Coffee and Markets.
  • Tom Leppert was on KWEL today, but I can’t find a direct link to the show.
  • Lela Pittenger’s name now appears on the list of Republican candidates who have filed for the Senate race.
  • Facebook likes Ted Cruz’s use of Facebook. Feel free to go on Facebook and Like Facebook’s like of Ted Cruz using Facebook. (Hat tip: The Right Side of Austin.)
  • Where’s Ricardo Sanchez? But now he has a while longer to decide…
  • David Dewhurst racks up another pro-life endorsement. Honestly, I’d never heard of The Heidi Group before, but I’m not as tied into the pro-life movement as some.