Is it certain that the nations of the European Union are heading for a hard fall? It certainly looks that way. When the overspending of governments such as Greece, Portugal, and Ireland were involved, the threat to the euro was real, but it could be psychologically contained (an important factor in maintaining the stability of financial institutions). Those three nations, after all, are small. Spain, the fourth member of the “PIGS,” was more than half the size of the Italian economy, but much of the industrialized West has viewed Mediterranean nations as inherently volatile.
Two months ago, however, Italy — one of the largest economies in the world — had its sovereign debt downgraded by Standard & Poor’s and then by Moody’s, which reduced the bond rating for Italian government bonds by three notches. The GDP of those five nations — Portugal, Ireland, Italy, Greece, and Spain — equal about $3.7 trillion, or more than 20 percent of the economy of the European Union.
The latest news is that France could have its AAA credit rating downgraded before Christmas. Standard & Poor’s is expected to make that decision imminently.
Due to new federal air pollution regulations, more than 32 power plants across the country will be forced to close their doors, according to a recent Associated Press survey. Those plants, which are mostly coal-fired, discharge enough electricity to supply more than 22 million households, the survey notes, and their closure will lead to job layoffs, depleted tax revenues, and a considerable hike in electric bills. The areas that will be hit hardest are the Midwest and in the coal belt (Virginia, West Virginia, and Kentucky), where dozens of plants will likely be retired.
Two regulations are in question: One aims to curb air pollution in states downwind from pollutant-heavy power plants; and the second, which was finalized last week, would enact the first standards for mercury, acid gas, and other pollutants from plant smokestacks. In total, the new regulations could eliminate more than eight percent of coal-fired generation nationwide.
AP’s survey, the first of its kind, looked at the analyses by the Environmental Protection Agency (EPA) of plant retirements and interviewed 55 power plant operators about the effects on power supply and about their plans to deal with the new regulations.
On Monday, Gordon Chang, the author of The Coming Collapse of China and regular contributor at Forbes.com, was interviewed on Yahoo’s Daily Ticker, where he observed, “If you look at all of [China’s] indicators, they all point down.”
Among those indicators were electricity consumption (flat), car sales (flat), property prices (collapsing), and industrial orders (down). And there is more to come, much more. The Chinese communist government is slowing the rate of growth of the money supply in order to “fight inflation,” the natural result of nearly 30 years of expanding that money supply in order to catapult the Chinese agrarian economy into the 21st century. And such slowing is having the same expected effect: As the economy slows down, bankruptcies increase, tax revenues decrease, and the economy slows down further.
Chang added, “We’ll see more obvious signs of deterioration in the Chinese economy over the next six months.” He noted that one of those signs is the increasing civil unrest including riots, bombings, and insurrections taking place across the country.
Debate over the payroll tax cut remains heated as House Speaker John Boehner (R-Ohio) demanded from Senate Majority Leader Harry Reid (D-Nev.) a year-long tax cut. The challenge threw another wrench into the negotiations on the deal, which, if not reached by the New Year, will result in an increase in payroll taxes as the present payroll tax reduction expires.
Millions of economic transactions take place every hour in the United States, too many for any central committee in Washington to handle or even Understand, even if they all graduated with honors from Harvard’s Kennedy School of Government.
For the most part, the economic transactions happen instantaneously, automatically sending market signals that organize production according to size and color, spontaneously determining losses, profits, wages and prices.
And so, if we want organic pomegranate granola with cherries, it’ll be there, right on time for breakfast every day on the capitalist shelves. It’s the same with red Corvettes or caramel ice cream with cinnamon bun dough and a streusel swirl.
It takes a little longer to get it right once the central controllers take charge of deciding things.
Here's the latest "Freedom Index: A Congressional Scorecard Based on the Constitution."
Have OWS protesters infested your city yet? They haven’t infested mine, but I kind of wish they would. Earlier this week, they shut down all shipping through the port of Oakland, Calif. If they knew who their real enemies are, they’d be kicking down the door to Harry Reid’s office in Washington.
Clearly, someone behind these clueless, jobless, soapless demonstrators is very familiar with a guy named Saul Alinsky. This left-wing agitator has been honored, if that’s the right word, as this country’s first community organizer. You can see where that’s led.
Alinsky, a veteran of Chicago’s dirtiest politics, wrote a book years ago called Rules for Radicals. One of his most important lessons was that “the real action is in the reaction.”
That is, so-called peaceful demonstrators will get everything they seek if they can cause the establishment to react forcibly against them. (Think of fire hoses and police dogs during the civil rights demonstrations of the 1960s.) Do that and your battle is won. Martin Luther King Jr. was a master implementer of the Alinsky stratagems.
Zachary Karabell, writing at The Daily Beast on Thursday, claimed that the latest numbers on the US’s economy were showing some modest improvement. After reviewing comments from the Federal Reserve in their final statement of the year (the economy is “expanding moderately”), the Institute for Supply Management (index above 50 for several months, indicating growth), the Gross Domestic Product numbers (growing at about 2 percent on an annual basis), unemployment (dropping slightly), and consumer sentiment (up a little), Karabell concluded “The real dirty little secret of the American economy is that we are doing OK.”
Some other numbers that came in after his article was published seemed to confirm that the economy is showing a faint blush of rose. The National Retail Federation said it expects Christmas holiday sales to rise to $469 billion this year, up about 4 percent from their October forecast, but still down from the 5.2 percent gain a year ago. The latest from the Association of American Railroads shows weekly traffic gains of nearly 4 percent year over year. The Business Outlook Survey from the Philadelphia Federal Reserve Bank showed that “all the broad indicators remained positive and suggest a modest expansion of activity…[and] the broadest indicator of future activity reflected a trend of increased optimism about growth over the next six months.” That report noted further that hiring expectations in that region are beginning to improve as well, along with indicators for growth in “general activity, new orders [and] shipments...”
The field of private space ventures is gaining a new competitor, Stratolaunch Systems, the brainchild of former Microsoft cofounder Paul Allen. According to press reports, Allen is prepared to commit at least $200 million of his own fortune to the creation of a launch vehicle he believes will allow for inexpensive launches of satellites into low Earth orbit.
While the U.S. government’s manned space program has floundered for years, lacking a destination and the will to develop new launch vehicles in a timely fashion to replace the obsolete space shuttle, several private corporations are actively pursuing technologies for carrying people and cargo to Earth orbit.
On December 13, Allen announced the creation of Stratolaunch Systems, which would, the company claimed, reunite Allen and Burt Rutan “to develop the next generation of space travel.” Allen and Rutan collaborated on SpaceShipOne, which flew in September 2004. According to a corporate press release, the goal of Stratolaunch Systems is to “bring airport-like operations to the launch of commercial and government payloads and, eventually, human missions. Plans call for a first flight within five years. The air-launch-to-orbit system will mean lower costs, greater safety, and more flexibility and responsiveness than is possible today with ground-based systems.”
The New American has been reporting on the controversy surrounding the Christmas season, particularly when Christians attempt to display the Nativity scene or assert the holiness behind the Christmas holiday in any way. These reports would seem to indicate that Christmas brings out the worst in people; however, it's salutary to note that it also brings out the best. A prime example of the latter can be found in reports from Kmarts across the nation that anonymous donors are paying off strangers’ layaway accounts in the spirit of the holiday.
In Sault Ste. Marie, Michigan, for example, an employee at the Kmart confirmed that an anonymous donor sent a $500 gift card to pay $100 on five different layaways. Store manager Barb Winowiecki then randomly selected which accounts to fund through the gift card.
“Those with layaways are in for a happy surprise when they come in to pay on their account,” Winowiecki observed. “We’re not informing them ahead of time, so they can have a happy surprise.”
“Unlike giving to organizations," she added, "people who anonymously donate this way know exactly where their money is going. It seems to be contagious. A local resident paid on another person’s layaway.”