Saturday, June 02, 2012

David Sirota notices President Middle-Man picking up on the Vietnam War stab-in-the-back nonsense

David Sirota looks at President Obama's Memorial Day speech in Dissent over war isn't disrespecting the troops SFgate.com 06/01/2012. And he finds in in his role of President Middle-Man, this time repeating of the the worst prowar revisionist themes on the Vietnam War:

Out of all the status-quo-sustaining fables we create out of military history, none are as enduring as Vietnam War myths. Desperate to cobble a pro-war cautionary tale out of a blood-soaked tragedy, we keep reimagining the loss in Southeast Asia not as a policy failure but as the product of an America that dishonored returning troops.

Incessantly echoed by Hollywood and Washington since the concurrent successes of the "Rambo" and Reagan franchises, this legend was the central theme of President Obama's Memorial Day speech kicking off the government's commemoration of the Vietnam conflict.

"You were often blamed for a war you didn't start, when you should have been commended for serving your country with valor," he told veterans. "You came home and sometimes were denigrated, when you should have been celebrated. It was a national shame, a disgrace that should have never happened."
This is a classic case of Obama accepting a Republican framing of an issue. And in this case it's a framing based on pseudohistory.

Tom Tomorrow's classic jab at Obama's "postpartisan" politics

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Irish Prime Minister to Angela Merkel: we delivered on the fiscal suicide pact, now you give more money to our One Percenters

Irish voters on Thursday delivered German Prime Minister Angela Merkel a small but significant political victory on Thursday, when they voted in a nationwide referendum to approve her fiscal suicide pact that is the core of her dispute with the recently-elected French President François Hollande.

I've described in previous posts, including here and here, various problems with this awful treaty.

In this story, we see a great example of the ideological and practical corruption that two decades of full-on neoliberal economic ideology have produced: Stephen Collins and Arthur Beesley, Kenny seeks bank debt deal from Merkel after Yes vote Irish Times 06/02/2012.

Enda Kenny, Irish Prime Minister, conservative party leader and loyal Angiebot

Irish Taoiseach (Prime Minster; pronounced tee-shok) Enda Kenny heads the conservative Fianna Fáil (pronounced "Feena Foil"),(Fine Gael) Party, which is currently the senior partner in a coalition government with the Labour Party, headed by Tánaiste (Deputy Prime Minister) Eamon Gilmore. The Kenny-Gilmore government has been all in with Angie's brutal austerity economics, and both the government parties pushed hard for a "Yes" vote on the fiscal suicide pact.

Eamon Gilmore, Irish Deputy Prime Minister, Labour Party leader and loyal Angiebot

Ireland has played a weird role in our public conversation about budgets and finance the last few years. Prior to the crash, the Irish government had been pursuing neoliberal policies of deregulation, holding down public deficits, etc. Conservatives in the US held it up as a shining success story. Once they got hammered with the sovereign debt crisis, the doubled down on austerity in accord with the demands of the Angie-fied EU. During 2001, they had a brief period of improvement, which led conservatives once against to declare them a success story, this time of the alleged success of austerity policies during a depression. That was more false optimism, but the improvement was very transient.

Why did Ireland the model neoliberal country become a target of the bond vigilantes? Because when the 2007 crisis hit, they did what neoliberal One Percenter doctrine recommends, which is to bail out the banks along with their stockholders and bondholders. Paul Krugman has compared the separate approaches of Ireland and Iceland. Iceland also had a bank crisis. But Iceland allowed the failed banks to go under, i.e., they let the businesses as such fail, which wiped out the value of stockholders and bondholders, and the government put the banks into receivership, reorganized them after writing off the bad debts, and put them back into business.

This is a summary of what Iceland did, using terminology that is not very exact and generalizations to which there may have been exceptions, e.g., I don't know to what extent some bondholders may have been compensated. Paul Krugman summarizes it this way: "Iceland refused to take responsibility for the debts run up by runaway bankers." (Why Not The Worst? 10/21/2011)

Ireland, on the other hand, agreed "to guarantee all the debts of the country’s biggest banks". (Michael Lewis, When Irish Eyes Are Crying Vanity Fair Mar 2011) This makes the public and the taxpayers responsible for the losses, thus relieving the banks of the downside of the risks they assumed on the loans that went south. Krugman describes the results in Lands of Ice and Ire 11/24/2010:

Oh, and while the IMF is demanding that Ireland cut minimum wages and reduce unemployment benefits, its mission to Iceland praised the "focus on preserving Iceland’s valued Nordic social welfare model."

What's going on here? In a nutshell, Ireland has been orthodox and responsible — guaranteeing all debts, engaging in savage austerity to try to pay for the cost of those guarantees, and, of course, staying on the euro. Iceland has been heterodox: capital controls, large devaluation, and a lot of debt restructuring — notice that wonderful line from the IMF, above, about how "private sector bankruptcies have led to a marked decline in external debt". Bankrupting yourself to recovery! Seriously. [my emphasis]
Ireland did much better recovering from the crisis because they addressed the real problem, the weakness of their banks, and solved it directly rather than putting in stopgap measures to allow the financial system to limp along without addressing the core problem of the banks. Krugman gives some data on Ireland's path to recovery in The Icelandic Post-crisis Miracle 06/30/2010, concluding:

And a strange thing has happened: although Iceland is generally considered to have experienced the worst financial crisis in history, its punishment has actually been substantially less than that of other nations. ...

The moral of the story seems to be that if you're going to have a crisis, it's better to have a really, really bad one. Otherwise, you'll end up taking the advice of people who assure you that even more suffering will cure what ails you.
The latter, of course, being with Ireland wound up doing. In his book End This Depression Now! (2012), Krugman notes:

For the most part, countries adopting harsh austerity policies despite high unemployment have done so under duress. Greece, Ireland, Spain and other found themselves unable to roll over their debts and were forced to slash spending and raise taxes to satisfy Germany and other governments providing emergency loans.
See also Krugman's pieces Eating the Irish New York Times 10/25/2010 and Iceland-Ireland Again 02/26/2011.

Which brings us back to Taoiseach Enda Kenny's demand for a quo for Ireland quid delivered in Thursday's vote. Does he ask Angie for money to provide relief to the large number of unemployed Irish? To maintain or restore public services? No. He asks her for money for private Irish financial companies:

Taoiseach Enda Kenny has told German chancellor Angela Merkel he wants a deal on the Irish bank debt following the decision of the Irish people to vote Yes to the fiscal treaty. ...

Dr Merkel said the referendum result was good news for Ireland and for Europe and deserved respect because of the hardship that Ireland had endured. ...

"The referendum result strengthens the euro zone's joint course toward the creation of a new, lasting stability union," she said in a statement.

Tánaiste Eamon Gilmore said last night that the decisive Yes vote in the referendum had "significantly strengthened" the Government’s hand in the negotiations about the bank debt.

He said that talks had been going on for months through European institutions about getting a deal on the issue. Mr Gilmore also phoned a number of European political leaders yesterday as part of the drive to get a deal.

A diplomatic source in Brussels warned that the Government still had big obstacles to surmount to secure a deal to reduce the debt.
Neoliberalism in the raw. The One Percent get taxpayer bailouts. The public gets the shaft. And the major parties of the left and right agree on such a program. Even in a situation like Ireland's, where, as Michael Lewis puts it:

Even in an era when capitalists went out of their way to destroy capitalism, the irish bankers set some kind of record for destruction. Theo Phanos, a London hedge-fund manager with interests in Ireland, says that "Anglo Irish was probably the world’s worst bank."
Eamon Quinn reported for the Wall Street Journal in Irish Bank Debt Refinance Talks Continue 05/15/2012:

Ireland has for some time been seeking to refinance a remaining EUR28 billion in promissory notes it pumped into two failed banks--Anglo Irish Bank Corp. and Irish Nationwide Building Society--to keep them from collapse during the worst of its banking crisis. ...

Irish government ministers have in the past said they also want to refinance a further EUR30 billion of loss-making home-loan mortgages held by two other lenders -- Allied Irish Banks ALBK.DB 0.00% PLC and Permanent TSB -- probably by using the European Stability Mechanism, the permanent bailout fund for the euro zone.

It aims to lessen the debt burden the country has taken on in saving its banks. Ireland has pumped in EUR64 billion--about 40% of its annual economic output--to save lenders that faced closure amid a property market collapse since 2008.

It is one of the most costly bank rescues in the world. [my emphasis]
Yes, Ireland's public debt crisis is a direct result of Ireland's decision to protect private banks from the consequences of their own risk-taking.

And, no, it doesn't really sound like the "free market" solution, does it? That's because neoliberalism is about using the public's money and the public's government to benefit the narrow class interests of the wealthy and the giant corporations, not about libertarian free-market principles.

In that connection, it's worth noting that Iceland's solution, a state-structured bankruptcy and reorganization of the financial institutions while letting the owners and creditors of the failed institutions bear the consequences of their risk in owning and/or lending to those companies, is not the "libertarian" version of a "free market" solution. In the dystopian vision of people like Ron ("Papa Doc") and Rand ("Baby Doc") Paul, if the banks fail, they fail, and whatever happens should happen with no government action. Unless it's maybe to beat, jail and shoot rioters when economic activity screeches to a halt after a country's whole financial system collapses with no government action to reorganize or replace it.

It was the decision of the Cheney-Bush Administration to simply let Lehmann Brothers go belly-up in 2008 without adequate preparation for the larger effect it would have on the financial system that set off the panic in 2008 that brought on the worst of the world financial crisis. That handled that one in the way "libertarians" would prescribe.

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What makes Angela Merkel and her crazy austerity policies tick?

Eckhart Fuhr in the conservative Springer paper Die Welt looks at German Chancellor Merkel's seeming dogmatism on economic matters, Merkels Hochleistungsgermanen einsam in Europa 01.06.2012:

Merkel erweckt zwar den Anschein, dass es in der Bewältigung der Euro-Krise so etwas wie den Standpunkt einer objektiven Vernunft gebe, den sie vertrete. Wahrscheinlich glaubt sie das auch selbst, allerdings kaum so inbrünstig, dass man sie als ordnungspolitische Glaubenskriegerin bezeichnen könnte. Ihre Weltanschauung ist der Sachzwang. Es mag etwas gut, wahr oder schön sein, politisch relevant wird es erst, wenn es "alternativlos" ist.

[Merkel even awakens the appearance that in the management of the euro crisis, there is something like a standpoint of an objective reason, which she represents. Probably she even believes that herself, although hardly so ardently that one could describe her as an Ordnungs-political holy warrior. Her worldview is that of factual constraints. It may be something good, true or beautiful, but {for her} it only becomes politically relevant if there is "no alternative".]
I've wondered if part of Angie's approach to economics has to do with some rigid notion of natural science that she is trying to apply to economics. She was a chemist in the former East Germany until she went into politics during the transition from the Communist regime to a unified Germany. Fuhr's comment there may be suggesting something along those lines.

Doch das Denken in Alternativen greift in Europa gefährlich um sich. Die deutsche Deutungsmacht über das, was man die wirtschaftlichen Realitäten nennt, schwindet von Tag zu Tag. Kein Staat ist zu sanieren, keine Volkswirtschaft auf die Beine zu bringen, wenn die Völker kein Geld in der Tasche haben. Bald wird die deutsche "Stabilitätskultur" nicht nur bei linksradikalen Griechen als Marotte einer größenwahnsinnigen germanischen Minorität in Europa verschrien sein.

[But {her} thinking in alternatives is singling itself out in a dangerous way. The German power to interpret those things which one calls economic realities is disappearing from day to day. No state can be reformed, no economy can be put on its feet, if the people have no money in their pockets. Soon it won't be only the radical left Greeks who will be denouncing the German "stability culture" as the idée fixe of a megalomaniacal Germanic minority in Europe.]
That reminds me of the official slogan of Charlie Pierce's blog: "Fk The Deficit. People Got No Jobs. People Got No Money." It applies to most of Europe, as well.

I think the concluding paragraph immediately following the last one quoted is meant to be ironic. I think.

Das hätte ich nicht gedacht, dass der Graben zwischen Nord und Süd noch einmal so tief werden könnte. Als protestantische Hochleistungsgermanen sind wir Deutsche bald ganz allein in Europa. Das haben wir Angela Merkel zu verdanken.

[I hadn't though that the trench between north and south {Europe} could ever become so wide. As high-performance Protestant Germanics, we Germans are suddenly completely alone in Germany. For that we have Angela Merkel to think.]
The irony here is that Angie and her party have encouraged the notion among the German public that Germany is doing so much better than Greece or Spain because Germans are just so much more responsible and efficient. Certainly not because they are, say, free-riding on the advantages for their foreign trade in Europe that the euro provides them. He also seems to be making a dig at Angie's background in the Protestant Church in East Germany. Her father was a strict Protestant minister. And it's been a part of the speculation about Angie's fixation on austerity and discipline (for other countries, for Germany not so such) that it comes in part from her particular religious upbringing.

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Friday, June 01, 2012

Greece, Europe and the US: Depression and austerity take their toll

One of the effects of depressions in to exacerbate social tensions, for better or worse. On the "worse" side of the ledger, Racial violence on the rise in cash-strapped Greece Euronews 01/06/2012 (with video):

Giorgos Tsarbopoulos, head of UNHCR Greece, said: “The economic situation’s created a climate where slogans and xenophobic rhetoric and easy solutions that are not solutions of course of ‘kick them out, let’s take the law into our own hands’ can more easily be propagated in a population which faces problems regarding security and public order.”

Over recent weeks, the government has been herding illegal immigrants into new detention camps. But a shortage of funds is making it harder to either repatriate them or process asylum requests.
The left coalition Syriza headed by Alexis Tsipras is currently showing a lead in the polls for the June 17 parliamentary elections in Greece, as reported in Syriza launches new programme Athens News 06/01/2012. (As of this writing, there is an ad at the bottom of the website saying, "Be ready for martial law". ?!?) Tsipris is saying explicitly that he will abandon the austerity agreement currently in force between Greece and the Troika (EU, ECB, IMF), the agreement known as the "bailout memorandum":

Tsipras said he would ... introduce measures to relieve the debt burden of overborrowed households and cut valued added tax (VAT), especially on basic food items.

He also said that the bailout memorandum should be abandoned, saying it had failed to take the country out of its economic crisis and would prevent it from having access to financial markets this decade.

"The first action of the government of the left will be the annulment of the memorandum and the implement laws," he said.
Maria Petrakis and Natalie Weeks for Bloomberg News report Tsipris as saying (Tsipras Vows To Cancel Bailout As Make-Or-Break Greek Vote Looms 06/01/2012):

"The choice for Greeks on June 17 is one: bailout or Syriza’s government program,” Tsipras said, presenting his campaign platform in Athens today. “You either implement the bailout or you cancel it. There is no such thing as a more or less evil bailout, a more or less inappropriate medicine.”
The "bailout" funds provided by the Troika to Greece have been for the benefit of creditors. Certainly not for the people of Greece: "The cuts required for 240 billion euros ($306 billion) of aid over the past two years have driven the country into the worst recession since World War II."

And they quote Tsipris as using words that seem designed to shift the blame for a Greek exit from the euro to the brutal conditions insisted upon by Angela Merkel and the Troika:

Tsipras has said he’ll try to keep Greece in the euro while pledging to cancel austerity measures. He said today the bailout terms were designed to drive Greece out of the euro area.

"It is a mechanism of definitive bankruptcy and propelling the country into a voluntary departure from the euro area, the only exit that is institutionally viable," he said. "This false dilemma of 'bailout or drachma' hides the real equation that the bailout leads to the return of the drachma."
Tispras seems to have in mind something like the Argentina route after the crisis of 2001-2, which is really about the only realistic option open to Greece unless the Greeks are willing to have their society devastated by Angienomics.

Bloomberg Businessweek has a sketch of Tsipras and his newfound popularity (Stephan Faris, Alexis Tsipras's Conquest of Greece 05/30/2012) that is framed in the first paragraph this way: "The headquarters of the Greek political party that could bring down the European economy lies in a rundown neighborhood in central Athens." This is the stock view from the neoliberal consensus. After their monumental failures in dealing with the European banking and sovereign debt crises, when the euro fails - it's the left's fault! As Cenk Uygur of The Young Turks might say, OF COURSE! Or, it's the Commies' fault:

The party’s very name, Syriza - The Coalition of the Radical Left  -  describes where its members see themselves on the political spectrum: on the fringes. Just outside Tsipras’s office hangs a photograph of a crowd celebrating the 1959 Cuban revolution; elsewhere, the hammer and sickle is a common sight.
Faris doesn't bother to inform his readers that the Greek Communist Party is not part of the Syriza coalition.

How scary does Bloomberg Businessweek want Tispras to sound to its readers? "It's as if the protesters of Occupy Wall Street suddenly had a shot not only at sweeping Congress but at taking the White House, too." Oh, NOOO-OOO!!!

This is one of my problems with Bloomberg Businessweek right now. You have to get past the fourth paragraph before you start getting some substantive reporting. With more decent journalism, you wouldn't have to work so hard separating polemical hoo-hah from substance. And even after the substantial reporting starts, we still get jabs like this: "He [Tsipras] had just returned from a trip to Paris and Berlin, during which he had been told that the last time the far left had gotten so much attention in France was when Fidel Castro came to visit." Faris also treats us to a sort of Barack-hung-out-with-terrorists-and-Michelle-hates-America type polemic here:

Tsipras entered politics at the age of 15, when a group of older students heard him speaking at a school assembly and, recognizing his talent, recruited him into the pro-Soviet communist party. ... It was during this time that Tsipras met his girlfriend, Betty Baziana, with whom he still lives. They have one child and are expecting another in July.
And they aren't even married! Those free-love Commies! (The current President of Germany, Joachim Gauck, and the current President of France, François Hollande, also live with partners to whom they are not formally married.) The actual substance comes in sections like this:

Critics in the media have sometimes called Syriza the party of the young, poor, and jobless. In a country where unemployment is 22 percent—and youth joblessness is well over twice that—that’s not a bad base to have. And yet the party’s appeal is far broader. The results of the May 6 elections, if anything, understate the magnitude of the protest vote. Some 19 percent of the electorate cast their ballots for small parties that failed to breach the 3 percent minimum needed to enter Parliament, while 35 percent didn’t vote at all.

Polls show Greeks are pulled by two seemingly contradictory desires. Roughly two-thirds of the country opposes the bailout conditions. Yet nearly 80 percent say they want to stay in the euro. ...

“I don’t think any monetary union can work if there isn’t some kind of subsidy to poorer regions,” says Euclid Tsakalotos, a Syriza parliamentarian and an economist at the University of Athens. He says the cure to Greece’s depression is what Germany received after World War II, when its economy was in a shambles: a Marshall Plan to put it back on its feet, forgiveness for some of its debt, and a payment scheme that takes into account the state of the economy. “People say that we are responsible for the situation we find ourselves in,” says Tsakalotos. “OK, sure. But I think that Germany will find it hard to argue that in 1953 they were completely blameless.” ...

A growing number of Greeks have embraced Syriza’s message of defiance, including many who hardly resemble radical leftists. [my emphasis]
The polemical anti-Communism in that article - we used to call it "red-baiting" before the Republicans became the Reds) - is disturbing. One thing is that it's poor reporting. The average American reader of that story is likely to come away with the impression that Tsipras is a member of a "pro-Soviet" Communist Party which may be more or less identical with Syriza. In fact, Syriza's negotiations with the actual Greek Communist Party could be a significant feature of the negotiations to form a government later this month, something no one would get from Faris' article.

Secondly, reading an article like this with cheap scare talk about the radical left in Greece is a reminder that one of the first engagements of the Cold War was a concerted effort to suppress the Communist Party of Greece in 1946-49. (See GlobalSecurity.org, Greek Civil War n/d, accessed 0601/2012) Major Jeffrey C. Kotora, The Greek Civil War 1943-1949 04/26/1985 Globalsecurity.org; Greek Civil War Military History 06/12/2006) That was a case where the Greek Communist Party (KKE) of the time was mounting an armed insurgency against the postwar government formally regarded as legitimate by the wartime United Nations allies. And the rivalry with the Soviet Union was an overriding factor in the Truman Administration's response. Nothing similar is the case for Greece today. Still, US meddling in Greek politics on the side of Angela Merkel's austerity policies is a really bad idea. So these polemical flourishes in Faris' article caught my eye.

Interesting in that regard is that Tsipras is reported as saying that "his country is involved in a 'Cold War' over austerity measures with Germany and the U.K." (Ian Johnston, Leftist tipped to be next Greek leader warns of 'Cold War' over austerity MSNBC World News 05/25/2012)

No one really knows what a Greek exit from the euro would (will) cost. Eastern European nations not part of the eurozone are also bracing for fallout (Eastern Europe braces for Grexit Athens News 05/31/2012):

A harsh escalation of the euro crisis would hit growth in the east's export-dependent economies harder than other developing states, due to their close integration with their bigger neighbours and dependence on western European demand.

Another potential source of pain is deleveraging by the western-owned lenders that own around 70 percent of banking assets in the region.

A hit to exchange rates would cause payments on foreign currency loans held by Polish and Hungarian households to skyrocket, pushing up bad loans and intensifying losses.

Thomas Mucha reports for the Global Post in the melodrmatically titled Global economy: The darkness returns 06/01/2012:

The biggest economic report in the world's biggest economy landed with a thud Friday.

The US added only 69,000 jobs in May — the third straight month of anemic job growth. The US unemployment rate, meanwhile, ticked up to 8.2 percent, from 8.1 percent in April.
The Obama Administration expected to be having Morning In America 2.0 by 2012; it hasn't worked out so well.

Europe — the world's largest economic bloc with a combined annual gross domestic product of some $17 trillion — is in the midst of a serious economic decline triggered by the ongoing, and worsening, euro crisis.

That is, of course, tragic for the jobless masses in Spain, where the unemployment rate currently tops 20 percent. It is also very bad news for struggling people in Italy, Greece, Ireland, France and elsewhere across Europe. And it complicates the gargantuan political problems now facing German Chancellor Angela Merkel, new French President Francois Holland, and the rest of the EU's beleaguered leaders.

But Europe's woes don't stop at its borders.

US companies need that giant market, too. So do China's many exporters. Countries across eastern and central Europe are economically tied to the EU. And, of course, there are the banking problems associated with Europe's troubles, as the bottom lines of financial institutions worldwide are intimately connected with what eventually plays out there.

To make matters worse, China and India, which many economists hoped could help offset economic weakness in the US and Europe, are both showing signs of serious trouble.
Paul Krugman carries on his campaign against austerity madness in The Austerity Agenda New York Times 05/31/2012. He says that the discussions he's been having this week in Britain over that country's austerity economics all "began with a bad metaphor and ended with the revelation of ulterior motives." The bad metaphor is about belt-tightening. Krugman explain in that piece what is wrong with the idea that governments should cut spending during hard times, especially during depressions.

The ulterior motives have to do with ideology, the destructive neoliberal ideology that is generally hostile to government services: "Now, these assertions often go along with claims that the economic crisis itself demonstrates the need to shrink government. But that’s manifestly not true. Look at the countries in Europe that have weathered the storm best, and near the top of the list you’ll find big-government nations like Sweden and Austria." He concludes:

[T]he austerity drive in Britain isn’t really about debt and deficits at all; it’s about using deficit panic as an excuse to dismantle social programs. And this is, of course, exactly the same thing that has been happening in America.

In fairness to Britain’s conservatives, they aren’t quite as crude as their American counterparts. They don’t rail against the evils of deficits in one breath, then demand huge tax cuts for the wealthy in the next (although the Cameron government has, in fact, significantly cut the top tax rate). And, in general, they seem less determined than America’s right to aid the rich and punish the poor. Still, the direction of policy is the same — and so is the fundamental insincerity of the calls for austerity.

The big question here is whether the evident failure of austerity to produce an economic recovery will lead to a “Plan B.” Maybe. But my guess is that even if such a plan is announced, it won’t amount to much. For economic recovery was never the point; the drive for austerity was about using the crisis, not solving it. And it still is.
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Checking in on Brother Wade and his brand of rhetorical Christian militance

I made a couple of posts earlier this year about a blog post from the Rev. Wade Burleson, a Southern Baptist minister and blogger, called The Absolute Absurdity of Apologizing for Burning the Koran 02/27/2012. This was after one of the flareups in Afghanistan over Americans desecrating copies of the Qur'an. (Update 10/29/2012: The Rev. Burleson has changed the name and graphics on his blog to Istoria Ministries Blog; he seems to have kept many of the posts from his previous blog but not the one quoted here. As of this update, the post is cached here.)

Bro. Wade went all butch in that post, blasting President Obama for expressing regret over the incident because "ONE SHOULD NEVER APOLOGIZE" when you're "dealing with religious fanatics who believe murder is an appropriate response for the burning of their religious material." Bro. Wade's Christian recommendation was to follow the example of Gen. Pershing in the infamous colonial war in the Philippines. The example, as described by Bro. Wade, was to murder prisoners and desecrate their corpses. The primitive Filipinos were so impressed by this that, according to Bro. Wade, "The Mullahs even made Pershing an Honorary Chieftan [sic] and never again gave him trouble during his military career."

He included this statement of his Christian philosophy:

Unfortunately, our President is apologizing for our military burning the Koran. That is absolutely absurd. I wonder what Obama would say if the U.S. commander in Afghanistan did what Pershing did in 1911? Sound too tough? Well, the U.S. government should be tough. The U.S. military should be even tougher. Our government bears a sword of vengeance, and it should be used. Churches are in the business of redemption, forgiveness and love. The United States government is in the business of justice. Any government that apologizes to murderers for burning their holy book has lost its moral bearings. You don't apologize when at war. If you have to apologize, you shouldn't be at war. The United States is at war. NO MORE APOLOGIES. The more you apologize, the weaker you look. The weaker you are perceived, the more your people are murdered. [my emphasis in bold]
This is no doubt drawn directly from the teachings of Jesus as found in the Gospel of Republican Warmongers, a portion of the New Testament that those of us not within the magic circle of Republican war cheerleaders can never seem to get access.

This kind of butch war puffery sadly too often passes for serious Christian thinking in the US these days.

But Bro. "Sword of Vengeance" Wade didn't like it much when I suggested he must be thrilled at the merciless massacre of civilians in two Afghan villages in Kandahar province that came to light not long afterwards and to which Staff Sgt Robert Bales confessed. In fact, he was defensive enough that in an update to his post he kinda-sorta suggested that there might be, well, something to apologize for!

The U.S. soldier who murdered women and children in Afghanistan should be executed. In fact, he should be handed over to the Taliban and let them execute him. To murder women and children, as what happened in 9/11, is not war, it is genocide. Anyone guilty of genocide should be put to death (see the Nuremburg [sic] Trials).
His updated comment, to which I also responded, sounded more like someone who howls for lynch-murder trying to verbally disassociate himself from some actual lynch murder that occurs than someone thinking seriously about the problem at hand.

Republicans have a weird fixation on this "apologizing for America" thing. They even make stuff up to beat that particular drum, as Glenn Kessler explained in Obama's 'Apology Tour' Washington Post 02/22/2011.

So, on what other topics has Bro. Wade been offering us his viewpoint the last few months on his blog? What attracted my attention to Burleson's blog in the first place was that occasionally he makes what seem to be thoughtful reflections on the problems of authoritarianism in the churches, in particular his own Southern Baptist Convention (SBC). Like this one from "God Will Kick Your Tail" - A Critique of Beth Moore's Teaching on James 4:10-11 from Mercy Triumphs 03/07/2012:

Beth Moore defines cynicism this way: "Cynicism is carnality that thinks its smart." According to Beth, all cynicism carries an air of superiority. Maybe. What I've seen in my experience is believers in Jesus Christ become cynical when church leaders present themselves as perfect, cover up sin, and take their place as God's alleged vicars on earth (authoritarianism). In my experience, the church is the one producing cynics because our religious teaching has departed from the radical teaching of God's amazing grace in Jesus Christ and has turned the church into a performance place, much like the corporate world, Hollywood, or any other secular environment. The gospel is radical, and the gospel I read about in Scripture is the good news that God takes cynical, hardened sinners and softens them by His goodness and grace. I guess what I'm saying is its Christian leaders pretending they speak for God ("God will kick your tail") that produces cynicism. So maybe cynicism is not such a bad thing after all. It helps keep us Christian teachers down to earth.
Another post, Legalism Gives Birth to Resentment and Rejection 03/15/2012, seems to fit into this kinder, gentler mode.

But it's well to remember that for Bro. Wade, the "radical teaching of God's amazing grace" which "takes cynical, hardened sinners and softens them by His goodness and grace" is perfectly compatible with cheering on the American Sword of Vengeance being brought down on the heads of prisoners of war by murdering them and desecrating their corpses in order to subjugate them thar Muslim foreigners to the "radical teaching of God's amazing grace".

To his genuine credit, the Rev. Burleson has pointed out the long-neglected problem of sexual abuse among Southern Baptist clery, a problem that is made more difficult to address even if the national leaders wanted to do so by the decentralized mode of pastor selection in the SBC. (The Time Has Come: Another Reason the Southern Baptist Convention Needs a Clergy Sexual Abuse Database 03/19/2012; THREE SEBTS Students Guilty of Serious Sexual Crimes 03/19/2012) SBC churches select their own pastors in a kind of "free market" approach. Though this brand of intra-denominational democracy and autonomy does not extend to doctrinal matters, as he points out in The Sin of Opinions Becoming the Test of Orthodoxy 03/26/2012: "When a man-made document (2000 BFM), filled with possible fallible interpretations of the sacred and inspired text, is demanded by SBC leaders to be placed on equal footing with--and given equal authority to--holy Scripture, then we have a massive theological problem."

Bro. Wade's general political-social outlook is also suggested by posts like The Charitable Spirit of R.E. Lee Toward His Enemies 03/09/2012, encouraging the neo-Confederate canonization of the military leader whose armies killed far more American soldiers than any group with "Al Qa'ida in its name ever did. Along the same lines is his post on one of those convicted of participating in the assassination of Abraham Lincoln: The Challenges of Life Reveal True Character: Samuel Mudd and His Imprisonment at the Dry Tortugas 05/20/2012. To put it mildly, not everyone takes such a benign view of Mudd's role in the assassination as Bro. Wade does; see, for instance: Doug Linder, The Trial of the Lincoln Assassination Conspirators (2009) UMKC website, including the article on Dr. Samuel Mudd; Edward Steers Jr., His Name Is Still Mud (1997) and Blood on the Moon: The Assassination of Abraham Lincoln (2001); and, the long review by Phillip Stone of Blood on the Moon and two other books in Journal of the Abraham Lincoln Association 27/1 (Winter 2006).

Bro. Wade goes to some lengths to dismiss any involvement of Mudd in the assassination plot, e.g., "Both Dr. Mudd and his wife swore to their graves that Dr. Mudd had no knowledge of the President's death when he treated Booth's leg, and even had he known, he would have been obligated by the Hippocratic Oath to treat the assassin." It would presumably come as a surprise to Hippocrates that his oath also forbade notifying the law that an assassin who had just shot your country's leader was in your house. As Phillip Stone writes:

In light of this [repeated previous] exposure to Booth [on the part of Mudd - something Bro. Wade also minimizes], it is not credible that Dr. Mudd, even in the pre-dawn of April 15, while examining and treating someone in his home, did not recognize Booth, a famous actor, a particularly handsome man, and a man with whom he had had an extended conversation less than four months earlier. Even with a false beard, and certainly in the ensuing hours of daylight, Booth would have been recognizable. The suspicion that Mudd was not telling the truth is corroborated by his claim that he left these strangers in his home with his wife and children, went to town for supplies, learned of the assassination and even Booth's involvement, but said nothing. Later, he started to realize that it was indeed Booth at his house. When he returned home, he told his wife, but because of her fears of being left there alone again if he should return to town to tell the authorities, he waited until the next day. Even at that point, he provided the information only through his cousin. The most dramatic news in Dr. Mudd's entire life was breaking around his own home and, even after realizing who Booth was, he delayed going to authorities. Steers has it right: These are the actions of a man who knowingly treated and sheltered Booth.
But to admirers of the Lost Cause, Lincoln was the evil Yankee dictator, quite a different man from the Christ-like traitor Robert E. Lee. So it's not surprising that Lost Cause advocates jump to the defense of his murderers.

And Bro Wade promoted a flack for a Koch Brothers sock-puppet climate-change denial shop, who apparently was once on his church staff in A Ben Cole Sighting on FOX: Looking Mighty Dapper! 04/29/2012. Bro. Wade praised him for what might sound to us outside the magic Christian Right circle as a pretty authoritarian-minded comment.

He also endorses the stock fundamentalist anti-gay position. (Not Speaking the Truth In Love Is Ultimately Unhelpful 05/01/20120 The nature of his Christian attitude toward LGBT people is conveyed by the sleazy title of this post, "Loving the Homosexual, the Pedophiliac, the Adulterer, the Masturbator, and the Fornicator in Your Life (Which Includes You): The Power of Grace and Truth" 05/03/2012. All of those named conditions, he says explicitly, are "sexually deviant desires." He further shares his view of human sexuality in Why Human Life Cannot Be Created in a Petri Dish - God and In Vitro Fertilization, Gene Therapy, and Cloning 05/15/2012.

At the same time, he can declare, "Unfortunately, over the past 200 years, we Baptists have lost sight of our foundational convictions and have become far too political, far to ideological, and far too egotistical for our own good." (Houston Baptist University: Being a Convictional Baptist Is Far More Important than Being Called a Baptist 04/13/2012)

The point of all this is that, with the Republican Party now effectively a party of Christian fundamentalist religious factions, the kind of pastoral double-speak we see from Bro. Wade Burleson is becoming more and more common in politics. Not that politicians need preachers to train them how to be duplicitous. But religious certainty and politics have always made a powerful and often toxic combination. Benign pastoral declarations of love and mercy and good will often dwell side-by-side with calls to bring the Sword of Vengeance down on the enemies of God and his Holy Party and His Chosen Exceptional Nation. In both the religious and political, we not only need to distinguish clearly between the two. We also need to recognize that for many people who understand themselves to be conservatives, what look to others like screaming contradictions may not seem to them like contradictions at all: Loving gays while comparing them to pedophiles; arguing for integrity in church leadership while praising a former staffer acting as a spokesperson for an oil-industry disinformation operation that manufactures hokum to pretend that climate change isn't a problem; mourning that Baptists have become too political while promoting neo-Confederate nostalgia and screaming for the blood of hostages to terrorize Muslims in Afghanistan; performing bombastic American patriotism while idolizing the treason of the Confederacy.

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Euro crisis: how eurozone taxpayers are bailing out German banks while strangling Greece, Ireland, Italy, Portugal and Spain

I allowed my subscription to Business Week to expire not long after Bloomberg took it over and made it Bloomberg Businessweek.

But I was impressed by a post by Ryan Chittum in the CJR Audit blog recently, Bloomberg BusinessWeek Cuts the Guruspeak 03/30/2012, in which he wrote, "The last thing you’d say about BusinessWeek these days is that it's hidebound. I have to read a lot of business journalism for this job, obviously, and much of it's a chore. Not BusinessWeek."

About the same time, BBW was sending me special offers to resubscribe for cheap rates. And as much digital reading as I do, I still have a fondness for the occasional hardcopy magazine. So I resubscribed.

Since then, I've developed a new love-hate relationship with the magazine. The 05/28-06/03 issue that arrived Friday has a cover feature on the euro crisis. The lead article by Clive Crook, "Who Lost the Euro?", might have been good if the writer understood the difference between fiscal and monetary policy or had some reasonable superficial knowledge about EU governance structure work or had a decent grasp on what generated the current set of problems, none of which are evidently the case. At this writing, it seems to be the only one of the cover series that is not online at the BBW website. (Another grump: the full magazine was available online to subscribers from sometime in the 1990s until sometime after Bloomberg took over. And the navigation isn't as user-friendly; the search function kind of sucks, for instance.)

However, the non-Clive Cook articles are pretty decent. This editorial, Bloomberg View: Germany's Banks Must Assist in Europe's Cleanup (hardcopy title, "Germany's Banks Helped Create This Mess. Why Not Hand Them the Broom?"), explains how the European taxpayers have probably been subsidizing the German banks during this crisis to a far greater extent than German taxpayers have been supporting Greece. This has to do with something that probably only finance or accounting geeks could actually enjoy reading about, which is central bank credits and debits on the central banks' books that are required to balance the national books of the eurozone countries. To oversimplify what still seems like an obscure accounting quirk even with the editorial's longer explanation, in effect, other eurozone national banks loaned the Bundesbank (German central bank) money to enable German banks to pull money out of Greece. As BBW sums it up: "In short, over the last couple of years, much of the risk sitting on German banks’ balance sheets shifted to the taxpayers of the entire currency union."

The sovereign debt crisis has always been fundamentally about the weakness and irresponsibility of giant European banks, German banks not the least among them.

The BBW editorial explains how the subsidies to German banks via central bank accounting - which represent binding commitments to the Bundesbank by other eurozone central banks - compares to the aid Germany has given Greece:

It's hard to quantify exactly how much Germany has benefited from its European bailout. One indicator would be the amount German banks pulled out of other countries since the crisis began. According to the BIS, they yanked $353 billion from December 2009 to the end of 2011 (the latest data available). Another would be the increase in the Bundesbank'’s claims on other central banks in the euro region over the same period. That amounts to €466 billion ($586 billion) from December 2009 through April 2012, though it would also reflect non-German depositors moving their money into German banks.

By comparison, Greece has received a total of about €340 billion in loans to recapitalize its banks, replace fleeing capital, restructure its debts, and help its government make ends meet. Only about €15 billion of that came from Germany. The rest is from the ECB, the European Union, and the International Monetary Fund. [my emphasis]
Now, it's also true that the ECB and the IMF are partially supported by Germany. But the basic point is valid. Germany is getting a lot of financial guarantee from other eurozone countries in order to allow Germany's banking corporations to pull funds out of Greece and other debt-crisis countries.

That is a central reason why the "aid" to Greece the last couple of years has been disastrous for its economy. As Christine "Madame Scrooge" Lagarde of the IMF made clear with brutal frankness in her recent interview with The Guardian, the only goal that has meant anything to the IMF - and the same is true of the German/EU/ECB aid - has been to save the giant private banks from the consequences of their own lending decisions. And to do so at the expense of the general taxpayers and by grinding millions of Greeks, Irish, Italians, Portuguese and Spaniards into poverty and even destitution.

The BBW editorial addresses Angela Merkel's Calvinist moralistic justification for the bandit policies Angie is imposing on those countries:

What the widely accepted European morality tale ignores is that irresponsible borrowers can’t exist without irresponsible lenders. Germany’s banks were Greece’s enablers. Thanks in part to lax regulation, German banks built up precarious exposures to Europe’s periphery countries in the years before the crisis. By December 2009, according to the Bank for International Settlements, German banks had amassed claims of $704 billion on Greece, Ireland, Italy, Portugal, and Spain, far more than German banks’ aggregate capital. In other words, they lent more than they could afford.
Angie's Calvinist Social Darwinism is only for the masses of the citizens of countries that fall under her thumb: certainly not by reckless giant German banks being subsidized in their recklessness and rescued from the consequences of it by the eurozone taxpayers.

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Andrew Bacevich on the problem of Special Forces secret war

Andrew Bacevich takes a look at the problems presented by President Obama's current approach to secret war by Special Forces in Unleashed: Globalizing the Global War on Terror TomDispatch 05/29/2012.

Bacevich doesn't try to tiptoe around the right wing's hissy fits over Patriotic Correctness. For instance, he writes:

The displacement of conventional forces by special operations forces as the preferred U.S. military instrument -- the "force of choice" according to the head of USSOCOM, Admiral William McRaven -- marks the completion of a decades-long cultural repositioning of the American soldier. The G.I., once represented by the likes of cartoonist Bill Mauldin’s iconic Willie and Joe, is no more, his place taken by today’s elite warrior professional. Mauldin’s creations were heroes, but not superheroes. The nameless, lionized SEALs who killed Osama bin Laden are flesh-and blood Avengers. Willie and Joe were "us." SEALs are anything but "us." They occupy a pedestal well above mere mortals. Couch potato America stands in awe of their skill and bravery.

This cultural transformation has important political implications. It represents the ultimate manifestation of the abyss now separating the military and society. Nominally bemoaned by some, including former Secretary of Defense Robert Gates and former Joint Chiefs Chairman Admiral Mike Mullen, this civilian-military gap has only grown over the course of decades and is now widely accepted as the norm. As one consequence, the American people have forfeited owner’s rights over their army, having less control over the employment of U.S. forces than New Yorkers have over the management of the Knicks or Yankees.

As admiring spectators, we may take at face value the testimony of experts (even if such testimony is seldom disinterested) who assure us that the SEALs, Rangers, Green Berets, etc. are the best of the best, and that they stand ready to deploy at a moment's notice so that Americans can sleep soundly in their beds. If the United States is indeed engaged, as Admiral McRaven has said, in "a generational struggle," we will surely want these guys in our corner. [my emphasis]
He also reminds us that the fact that secrecy hides much of what they do doesn't at all mean that we should assume everything is going alright. If anyway, we should assume the opposite. Bacevich writes, "From a president’s point of view, one of the appealing things about special forces is that he can send them wherever he wants to do whatever he directs. There’s no need to ask permission or to explain. Employing USSOCOM as your own private military means never having to say you’re sorry." Or, more to the point, with no need for "notification or consultation" with Congress, much less accountability to the public.

As U.S. special ops forces roam the world slaying evildoers, the famous question posed by David Petraeus as the invasion of Iraq began -- "Tell me how this ends" -- rises to the level of Talmudic conundrum. There are certainly plenty of evildoers who wish us ill (primarily but not necessarily in the Greater Middle East). How many will USSOCOM have to liquidate before the job is done? Answering that question becomes all the more difficult given that some of the killing has the effect of adding new recruits to the ranks of the non-well-wishers.

In short, handing war to the special operators severs an already too tenuous link between war and politics; it becomes war for its own sake.
Bacivich links to this article by David Isenberg, The Globalisation of U.S. Special Operations Forces Inter Press Service 05/24/2012, which reports:

It was recently reported that U.S. Special Operations Command (SOCOM) commander Adm. Bill McRaven and Deputy Director of Operations Brig. Gen. Sean Mulholland want to establish a worldwide network linking special operations forces (SOF) of allied and partner nations to combat terrorism. ...

This plan may seem ultra-ambitious but given the demand on and pace of U.S. SOF activities in recent years it hardly comes as a surprise. The forces will be conducting missions in 120 countries by year's end, up from about 75 currently. And while they account for only three percent of the military as a whole, they make up more than seven percent of the forces assigned to Iraq and Afghanistan. [my emphasis]
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A victory for Merkel: Irish voters approve fiscal suicide pact

The "No" advocates are conceding that the Irish that the referendum on Angela Merkel's fiscal suicide pact is going to pass. The vote on the Intergovernmental Treaty on Stability, Co-ordination and Governance in the Economic and Monetary Union was Thursday. Although votes are still being counted, it seems to be passing by the margins indicated by pre-election polls, on a low voter turnout: Referendum set to be passed by comprehensive margin Irish Times 06/01/2012

Angie's fiscal suicide pact basically outlaws Keynesian economic stimulus policies and in practice gives Germany (Angie) a practical veto control over the national budgets of the participating countries. The big battle over the treaty will be this month, as French President François Hollande pushes for amendments to treaty to include fiscal stimulus before France will approve it.

Two trade unionists from the British-Irish union UNITE testified about the effects of the treaty before the Irish Oireachtas' (Parliament's) Sub-Committee on the treaty on 04/18/2012 (the Irish Parliament is formally called the ). One of the two, Michael Taft, described what he sees as six problems with the fiscal suicide pact:

The fiscal treaty will require substantially more austerity measures in the medium term. ... This level of austerity on top of what the Government has already planned could cut the nominal GDP growth by up to 2% and this, of course, will result in lower employment, driving up the live register and cutting wages and incomes.

The fiscal treaty will depress growth in the eurozone. ... Most eurozone countries will have to undergo some form of fiscal consolidation over the next two or three years which, in some cases, will be quite substantial. The German Institute for Macroeconomic and Economic Research estimates the effect of this fiscal consolidation on eurozone growth to mean that it will average a 0.5% each year up to 2016. That is how far down eurozone growth could be driven if the fiscal treaty provisions are implemented. ...

Even the Government regards the structural deficit as unrealistic. The structural deficit is a hypothetical. It is derived first by comparing actual GDP with the hypothetical potential GDP. From this, the output gap is derived - another hypothetical. To determine the structural deficit, a cyclical sensitivity measurement is applied - yet again a hypothetical. A structural deficit rests on layers of hypothetical measurements inside a model with variables that cannot be observed in the real world. ... Under its model, the EU projects that by 2014, the Irish economy will actually be overheating, that is, that we will be back in a boom. This is not only unrealistic but it is absurd. However, the Government should explain why it is calling on people to give constitutional force to measurements and hypotheticals which it has dismissed as highly uncertain and unrealistic.

The fiscal treaty will limit the amount of counter-cyclical measures future Governments can employ during downturns. Take the example of the Irish economy falling back into recession later this decade. Under the fiscal treaty, we will still be required to run primary surpluses, that is, the budget surplus, excluding interest payments. Given this constraint, it is unlikely that automatic stabilisers will be allowed to operate in full, never mind proactive fiscal measures to counter the downturn. Nor should we rely on provisions for temporary departures in the event of a severe economic downturn. Spain is heading back into a full blown recession and yet no temporary departure is being allowed. The treaty has little to do with a sustainable counter-cyclical macroeconomic framework and all to do with self-defeating deficit reduction via deflationary fiscal adjustments.

The treaty will perpetuate instability in the eurozone - in the first instance by depressing economic growth during a period of stagnation. This will undermine confidence in our economy’s ability to generate future revenue needed to repay its debt. Again, witness Spain. Increased austerity measurements are only pushing it into and not away from a bailout as market confidence is drained. If a number of temporary departures are granted out of necessity, combined with changes in structural deficit measurements so as to allow countries to more easily achieve their targets, this will undermine confidence in the actual framework itself. We saw this when the European banks underwent not one but two stress tests. Market investors had no confidence in these tests and eventually the ECB was forced into an unprecedented release of €1 trillion to prevent the European banking system from freezing up. If investors believe the fiscal compact is being similarly manipulated, the process will perpetuate the crisis.

The debt reduction rule will lead to an unsustainably low level of government debt, falling to levels of 20% of GDP or less. Government debt provides a secure investment for financial institutions, in particular pension funds and if this is removed such funds will be forced to introduce higher risks into their profiles and may end up creating bubbles in equities and property. [my emphasis]
The Irish Times' live blog 06/01/2012 on the referendum vote count reports:

[Anti-treaty Left nationalist party] Sinn Féin deputy leader Mary Lou McDonald says it was clear throughout the campaign that the Labour party was on the wrong side of the argument when its traditional supporters were considered. “The Labour party were on the wrong side of the debate in respect of the trade union movement right across Europe and the wrong side of the debate laterally even in terms of their own sister parties across the EU,” she said.

"Austerity hasn’t worked and [Labour Party leader and deputy prime minister] Eamon Gilmore knows that as surely as I know that. They have promised big and we want to see them deliver on it. We will be reminding them of all the promises and assertions they have made."
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Thursday, May 31, 2012

A mini-catalog of all the damage a Greek exit from the euro or a eurozone breakup could do

Bloomberg News provides a description of the range of possible-to-probable results of a Greek exit from the euro: Simon Kennedy, Greek Exit Aftershocks Risk Reaching China 05/28/2012:

Beyond the euro area, major trading partners such as the U.K., Switzerland and nearby emerging economies including Romania’s could be hurt as demand slows. Their currencies probably would rise against the euro, making exports less competitive. China’s biggest investment bank says that nation could see its weakest growth in more than two decades.

Even if the dollar surges, the U.S. may be more insulated given signs of a rebound in its domestic economy -- at 8.1 percent in April, the jobless rate is down from a peak of 10 percent in October 2009 -- and the fact that just 13 percent of its exports head to the euro area. Capital flooding into a perceived safe haven may also hold down interest rates.

Still, BofA Merrill Lynch estimates U.S. bond and stock markets each account for a third of global capitalization, leaving them prone to a European shock. Greek elections helped wipe almost $3 trillion from worldwide equities this month.

Beyond the euro area, major trading partners such as the U.K., Switzerland and nearby emerging economies including Romania’s could be hurt as demand slows. Their currencies probably would rise against the euro, making exports less competitive. China’s biggest investment bank says that nation could see its weakest growth in more than two decades.

Even if the dollar surges, the U.S. may be more insulated given signs of a rebound in its domestic economy -- at 8.1 percent in April, the jobless rate is down from a peak of 10 percent in October 2009 -- and the fact that just 13 percent of its exports head to the euro area. Capital flooding into a perceived safe haven may also hold down interest rates.

Still, BofA Merrill Lynch estimates U.S. bond and stock markets each account for a third of global capitalization, leaving them prone to a European shock. Greek elections helped wipe almost $3 trillion from worldwide equities this month.

If the U.S. economy is pulled down it may complicate President Barack Obama’s re-election bid, said [economist Barry] Eichengreen. Obama said May 21 that what happens in Greece has an impact in the U.S. and called for “greater urgency” from European leaders.

"The election will turn on the economy and the economy is significantly affected by Europe," Eichengreen said. "The longer it remains unresolved and the more volatility it creates the worse it is for Obama." [my emphasis]
The headline writer on the following story seems to have gotten a little carried away in trying for rhymes for Sharon Smyth's and Neil Callanan's report, Spain Delays And Prays That Zombies Repay Debt: Mortgages 05/29/2012:

"Spain has engaged in a policy of delay and pray," Echavarren said in an interview. "The problem hasn’t been quantified by anyone because there is huge pressure not to tell the truth."
The Economy Ministry says that Spanish banks have 184 billion euros of developers' loans and assets that are "problematic," while the remaining 123 billion euros are performing. The need for more reserves to cover losses on the loans can’t be ruled out, Nomura International analysts Daragh Quinn and Duncan Farr said in a May 14 report. If Spain took losses on developer loans like Ireland did, Spanish banks would need 8.9 billion euros under the best case to 76.5 billion euros of additional provisions in the worst scenario, Nomura estimates.
Spain's Bankia firm is already in critical condition:

Bankia, which Spain nationalized this month, said on May 25 it will seek 19 billion euros of state funds after it made 5.5 billion euros of provisions for non-developer loans, mostly home mortgages and company borrowing. Banco Santander SA (SAN) and Banco Bilbao Vizcaya Argentaria SA (BBVA), Spain’s biggest lenders, were among 16 of the country’s banks downgraded earlier this month by Moody’s Investors Service, which cited a recession and the increase in non-performing loans to real-estate companies.
The Reuters video at this link, Market Pulse: Spain bank plan doomed, Troika bailout looms 05/28/2012, talks about how Bankia will likely need "Troika" (EU, IMF, ECB) assistance to salvage Bankia. This is a more optimistic report from the day before, 05/28/2012, Breakingviews: Bankia's bailout is a mixed blessing:



As this editorial from El País, La catástrofe de Bankia 29.05.2012 mentions, the government's actions so far in assuming the bad credits for Bankia have been a factor in Spain's high bond interest rates at the moment. M. Veloso and M. Cuesta report in Tres alternativas para pagar la factura de Bankia ABC.es 29.05.2012 that Spain's conservative government has basically three alternatives open at the moment: borrow more through Spanish bonds; get an injection of capital from the ECB; and, get rescue funds from the IMF or the EU.

The Bankia problem is yet another reminder that the main financial problem in Europe is the weakness (under-capitalization) of European banks, not the sovereign debt of Greece or the other countries.

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Irish referendum today (Thursday) on eurozone fiscal suicide pact

Ireland is having a nationwide referendum today on whether to adopt the treaty that Germany's Angela Merkel is demanding they accept, a fiscal suicide pact that basically outlaws Keynesian economic stimulus policies and in practice gives Germany (Angie) control over the national budgets of the participating countries. This is the treaty that newly-elected French President François Hollande has insisted must be changed to include fiscal stimulus if France is to approve it, officially named the Intergovernmental Treaty on Stability, Co-ordination and Governance in the Economic and Monetary Union. The European Trade Union Confederation opposes the treaty.

General descriptions of the Treaty can be found at the website of the Irish Referendum Commission, a supposedly independent body. The Irish Times has a this-side-says, the-other-side says summary: Paul Cullent, The treaty explained 05/30/2012.

Siobhan Dowling reports for Global Post on the campaign, Key Irish euro referendum pits fear against anger 05/30/2012:

The latest polls indicate that the Irish are going to vote in favor of austerity, bucking the recent voting trend in Greece, France and even Germany. But that doesn’t mean that the Irish are enthusiastic adherents of Merkel’s belt-tightening fixation.

As much as anything, the Irish referendum could be described as a battle between fear and anger.
Sadly, that's what the hopes for the euro and even the EU have degenerated into for much of the European public, "a battle between fear and anger." It seems to have been not so long ago that it was a truism that depressions could weaken democracies and lead to dictatorships and other bad stuff. Maybe growing up in East Germany, Angela Merkel never learned about that:

Many Irish people are furious at their political elite for getting them into this mess, and at the European Union for forcing them to effectively take on the gambling debts of speculators, bankers and property developers.

The bailout became necessary as a result of the previous government’s ill-fated decision to guarantee all of the country’s banking debts in 2008. Those debts turned out to be astronomical, as a result of reckless lending to property developers, and Ireland bailed out the banks at enormous cost.

As the state took on these liabilities the markets pushed up its borrowing costs, leaving Dublin with little choice but to turn to the troika [EU, ECB, IMF].

Making matters worse, the state has been overly reliant on real estate transaction taxes. Once the property market crashed, that left a massive hole in public finances. At the same time, there is more demand on the public purse due to soaring unemployment. For 2012 the funding gap is an estimated 13 billion euros.

That deficit comes despite a succession of harsh budgets that have been imposed at the behest of the troika, imposing billions of euros worth of expenditure cuts and new taxes.

At the same time, the bondholders — who had loaned to the reckless Irish banks — have been paid back billions of euros from the state coffers. [my emphasis]
They are right to be angry. And democratic governance should give them more options that a choice between economic collapse, on the one hand, and agreeing to have their government wreck their own economy so that the government can collect debts for banks that made bad risks. This is the moral hazard problem of too-big-to-fail banks. In the theology of the Great God Free Market, stockholders and bondholders are assuming the risk that the company may fail, with the potential rewards that they make money if the company prospers. But what happened here is that the Irish government stepped in to remove the risk from bondholders and thereby sacrificed the well-being of the whole country to the comfort of the bondholders. The bondholders were relieved from the down side of their risk. At the cost continues to grow: Banks may require an extra €3-€4 billion, says Elderfield Irish Times 05/30/2012.

The Dowling article quotes international relations professor Ben Tonra saying, "The ECB has been utterly dogmatic in terms of protecting not only senior bondholders but junior bondholders. And has basically said all these speculators have to be paid back and they have to be paid back on the shoulders of Irish taxpayers." Democracy? Prosperity? To hell with them! Bondholders money comes first! This is not the purpose of the EU. The main purpose of the EU was to promote democracy and international peace in Europe. It has become an ugly travesty of itself.

Ireland's level of public debt only became problematic and subjected them to the ugly side of the bond market because of the depression that began in 2007, and because the government made the decisions not to require weak banks to be reorganized but to have the government assume their bad debts. Dowling also describes the partisan politics of austerity within Ireland in describing the phenomenon that Paul Krugman regularly mocks, the notion that Ireland is some kind of austerity success story:

Commentators often point to Ireland as Europe’s austerity success story. Unlike in Spain and Greece, on the surface, Ireland’s economy appears to have returned to growth, albeit modestly, with the EU predicting a rate of just 0.5 percent for 2012. Moreover, official figures show a trade surplus, although this may not be a reliable indicator since it is distorted by the many multinationals based in Ireland who repatriate their profits.

Yet most Irish people don’t feel that things are getting better. The number of those struggling to pay back often-massive mortgages is growing. On Friday the Central Bank announced that one in 10 mortgages are in arrears of more than 90 days. Unemployment remains around 14 percent, up from 4.5 percent just five years ago, and would be even higher if not for high levels of emigration and the return home of many immigrants who contributed to Ireland’s boom.

The party seen to have caused the mess, Fianna Fáil, was booted from office last year. However, members of the current government, particularly the center-left Labour Party, have seen their support decline, with backers angry at them for continuing the same austerity agenda.

Left-wing nationalist party Sinn Féin, the biggest critic of the Fiscal Treaty — which it dubs the “Austerity Treaty” — has seen its support soar, particularly among working-class voters.

Other opponents include businessman Declan Ganley, who helped defeat the Lisbon Treaty first time around, and smaller left-wing groups, including the Socialist Party. [my emphasis]
The Irish Times reported on Tuesday (Treaty campaign in last stretch 05/29/2012):

Both sides in the fiscal treaty referendum are using the final hours before the onset of the broadcast moratorium on referendum content tomorrow afternoon to persuade the electorate.

Speaking tonight on RTÉ’s Prime Time Labour’s Joan Burton encouraged people not to send out the “wrong signal” in Thursday’s vote saying the country has done very well for 40 years out of EU structural funds.

She was joined on the programme in calling for a Yes vote by Fianna Fáil’s Timmy Dooley who said if the country doesn’t learn to balance its budgets it will become an inhibiter to security of the euro.
"Both sides", the two major political parties, are insisting that the Irish people accept Angie's fiscal suicide pact. This is yet another example of the extent to which the neoliberal ideology has corrupted the establishment parties in Europe.

The same paper reports in Government 'lying' over treaty, "Three recent opinion polls revealed a 60/40 split in favour of the fiscal treaty among Irish voters who go to the polls on Thursday." But there is also a large undecided bloc going in to the election. Turnout will play a big role.

Padraic Halpin reports for Reuters on the failure of Angienomics austerity in Ireland, Pioneer Ireland fears austerity was in vain 05/29/2012.

Two trade unionists from the British Irish union UNITE testified about the effects of the treaty before the Irish Parliamentary Sub-Committee on the treaty on 04/18/2012 (the Irish Parliament is formally called the Oireachtas). Jimmy Kelly warned:

The eurozone economy and the European project itself are put at grave risk by this treaty. It addresses the wrong question and therefore comes up with the wrong answer. The crisis does not stem from recklessness in State spending but from the recklessness of financial institutions. This crisis is unfortunately still continuing. In Ireland we are all too aware of the direct cost of reckless banks and property speculation. We are also aware of the economic burden this recklessness has imposed on the State in terms of unemployment, falling incomes and collapsed tax revenue, and we are aware that had the fiscal treaty been in place ten years ago it would not have averted the disaster in Ireland nor changed budgetary policy one bit. Instead, the fiscal treaty targets the State and the public sector with a set of rules based on arbitrary targets and hypothetical measurements.
And he describes how the treaty will force what economists call internal devaluation, i.e., reduction of wages and salaries and workers' living standards:

The fiscal treaty will lead to further austerity measures, which no one doubts. UNITE estimates that this could result in an additional €8 billion or more in spending cuts and tax increases over the next few years. This will have a significant impact on workers’ living standards.

It would cut economic growth which will inevitably lead to lower job creation. Currently, more than 14% are employed and another 10% are under-employed or can only find casual work. Even more alarming is that the IMF, in its last review in March, estimated that even by 2017, unemployment will be above 10%. Additional austerity over and above what the Government is already planning will depress domestic demand even further. This will slow the already low level of job creation. We will be facing into a decade of high unemployment and emigration.

The European Commission has projected that even in 2015, real wages will still be falling, that is, wages after inflation. Between 2012 and 2015, average real wages are projected to fall by nearly 0.5% each year, which will reduce domestic demand and job creation. This will put downward pressure on wage growth. We will have a situation where inflation is eroding workers’ living standards at the same time as the Government is increasing taxation and households are trying to escape from extraordinarily high levels of debt. This is a recipe for continuing growth and falling living standards. [my emphasis]
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Wednesday, May 30, 2012

Another sign of how the neoliberalism adopted by Germany's SPD is causing them problems

I did and do respect former German Gerhard Schröder's (SPD) foreign policy performance, especially his opposition to the Iraq War.

But his downside was his open-armed embrace of the neoliberal economic doctrines that are now, in their Angela Merkel-ified form are strangling much of Europe. In Chancellor Altkanzler Schröder warnt Sozialdemokraten vor Hollande, Die Zeit reports that neither the experience of countries like Greece and Spain, nor the electoral problems of pro-austerity social-democratic parties in those two countries and others, have persuaded him that some rethinking may be in order.

Schröder is saying no, no, the SPD should actually copy the French Socialist Party's successful course under François Hollande, oh no, that won't do at all!

Taking pretty much an Angiebot line, Schröder said, yes, some kind of growth measures or other would be nice, "kritisierte aber die mangelnde Bereitschaft, Strukturreformen beispielsweise auf dem Arbeitsmarkt oder in der Verwaltung umzusetzen." ("but he criticized the insufficient readiness [of Hollande] to adopt, for instance, structural reforms in the labor market or reorganize the bureaucracy.") In the neoliberal vocabulary, labor market reforms = lowering wages, weakening unions; reorganizing the bureaucracy means cut government services.

And he emphasizes that, goodness me, you can't raise taxes on the Job Creators! He didn't actually use the Job Creator phrase the Republicans apply to the One Percent, but it wouldn't surprise me if he started doing so. The SPD is formally in agreement with the former Chancellor on that, sadly enough.

It's not clear from that report whether Schröder supports or opposes the SPD current position that they will vote for Angie's fiscal suicide pact only if fiscal stimulative measures accompany it. The SPD's position certainly leaves them wiggle-room to agree to some basically cosmetic stimulus proposal from Angie as an excuse to approve the fiscal suicide pact, officially named the Intergovernmental Treaty on Stability, Co-ordination and Governance in the Economic and Monetary Union.

The fiscal suicide pact is a screamingly bad idea. It essentially outlaws counter-cyclical Keynesian stimulus policies even in a depression like this one, when they are most needed. Because it's based on debt ratios to GDP, it makes stimulus especially difficult in times like this, when GDP's are shrinking or growing very slowly.

Hollande is threatening to reject the treaty if the text isn't renegotiated to allow stimulus. We'll see how serious he is about that over the next month. It's hard to see how any responsible treaty that protected the need for deficit spending in a depression could contain the provisions that Angie likes the most, the ones that restrict public borrowing especially during the worst economic times.

The fiscal suicide pact isn't worth adopting unless it's changed to the point that it no longer is a fiscal suicide pact. It would write Chicago School economics into the constitutions of the countries foolish enough to ratify it.

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Chris Hayes and Patriotic Correctness about "the troops"

Liberal journalist Chris Hayes took some flak from the usual suspects this past weekend when he suggested that talking about soldiers like 12-year-old fanboys gushing about their favorite comic-book heroes might not be entirely appropriate on all occasions for adult citizens in a democracy.

Paul Campos gives an account in Chris Hayes apologizes for saying something intelligent LGM 05/28/2012. Charlie Pierce recalls how Republican partisans "honored the troops" back in 2004. (What Are the Gobshites Saying These Days? Esquire Politics Blog 05/29/2012)

Chris is neither the first to catch this kind of flak nor will be be the last. I'm even seeing little inspirational posters to honor military dogs these days. I addressed this issue, for instance in Sleaze 02/17/2012. I posted on the issue on which Hayes' controversial comment touched in Do "the troops" = the war policy? 04/16/2012.

On 02/07/2007, I posted William Arkin gets in deep doody for not "supporting the troops". The links to Arkin's columns there are now broken. (Which is why I like to quote relevant passages from the articles I link as well as referencing the article name and source, which makes them easier to locate with a web search. Although I wasn't able to find versions of those on a quick search that I would consider reliable ones.)

Here's what I wrote about Arkin's offense against Patriotic Correctness in that post:

He was challenging the increasingly daffy political convention in America of arguing about Iraq War policy in terms of what's best for "the troops", who are routinely described as brave, noble, self-sacrificing, [fill in your favorite superlative]. We're against the war because we're asking too much of "our troops" who are fine, wonderful, etc. No, we need to stay in Iraq because "the troops" want to finish the job, being as they are brave, determined, capable, etc.

This convention has become increasingly popular over the last three decades. To a significant extent it's the result of having an all-volunteer military, though other trends have contributed to it, such as the Christian fundamentalists deciding that the military was a rich "mission field" for their message. But was result of all those trends is that fewer and fewer Americans have direct contact with the military themselves or through neighbors and family members. Idolizing "the troops" is kind of an informal but real psychological bargain.

The civilians who don't serve and haven't served gush about the nobility of those who do. Those in the military are expected to then be jacked around as the politicians and our infallible generals decide (the generals also being dedicated, noble, selfless, etc.), and they shouldn't make everyone else feel uncomfortable by bitching and moaning about it. More particularly, no one should make the offspring of affluent Republican white folks feel guilty about the fact that while they cheer for wars and recite bloody slogans as loyal Republicans are expected to, most of them don't feel moved to volunteer for those wars they find so vital to the interests of the Homeland. That's what we have fine, noble soldiers for, who just happen to be disproportionately Southern, disproportionately minorities and disproportionately working class. Military recruiters should confine their high-pressure recruiting efforts to mall and high-schools in working-class neighborhoods and not trouble nice young Republican white folks about such things.

And that's a big downside of this idolization of "the troops". Because "the troops" are strangers to so many Americans, and because they are abstracted to be the Best of the Best, it makes it psychologically much easier for most of the public to cheerfully agree and even applaud to send them off on dubious missions where their lives and bodies are placed on the line. Too many people view them as The Troops, not as what they are: men and women just like the rest of the society they come from, though with the demographic disproportions I mentioned above.

Arkin made the point in a clumsy way. But doing verbal somersaults to make Iraq War policy sound in the best interests of the soldiers is getting increasingly unreal. Anyone who's not a Big Pundit or totally into the Oxycontin worldview understands that it's obvious that war is never in the best interests of "the troops". Their best interests is in not being put in some Middle Eastern hell-hole where they may be killed or maimed or shot out their helicopters or driven to PTSD.

Also, it surely must be clear to most anyone not washed in the blood of High Broderism that whether the soldiers in the field want to carry on the fight is not the determining factor in war policies, unless things come to the extremes of the army collapsing or revolting. I'm not aware of any country which lets the rank-and-file soldiers vote on whether to initiate, continue or end a war. I suppose you could make some sort of romantic-Bolshevik case that they should get to decide by a vote. (Not that Communist governments ever followed such a practice.) Soldiers in the American Civil War got to elect some of their officers, a system that didn't have such great practical results.

But who outside Beltway punditry or rightwing think-tanks pretends that's the way the world works? Of course, wars are bad for the soldiers' health and well-being, including the businesses, marriages and family lives that are negatively affected by their absence. And of course the soldiers in the field don't get to decide, short of some kind of insubordination or revolt, whether or not their country is going to enter a war, keep on fighting or come to a peace agreement.

And I quoted Arkin describing the rightwing "populism" of war fans who argue for their policy preferences in the name of "supporting the troops" (even when "the troops" themselves have a diversity of opinions on the policies relating to the wars in which some of them are fighting):

But the bigger point is that any dissenting voices are just those of whores, politicians, tin foil hat liberals, or worse, un-Americans. In this view, there are no actual experts in this world, no one who studies and measures public opinion, no one who studies war or the military, who do not wear the uniform. This is not some post-modern relativism, it is pure anti-elitism. The elite think they know it all, while those who do all of the dirty work, who do all of the suffering, are methodically ignored and dominated.
But this is Tea Party style "anti-elitism". I quoted a Military Times analysis from late 2006 of a poll of soldiers that found, "Only 35 percent of the military members polled this year said they approve of the way President Bush is handling the war, while 42 percent said they disapproved." And, "in this year’s poll only 41 percent of the military said the U.S. should have gone to war in Iraq in the first place, down from 65 percent in 2003."

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