Today the German parliament voted overwhelmingly, 523-85, to increase the size of the European Financial Stability Fund (EFSF) from $335 billion to $600 billion, and to allow it to purchase sovereign bonds, lend to profligate governments, and strengthen banks hurt by holding risky government debt.
Protests over the move came primarily from Wolfgang Bosbach, a member of Chancellor Angela Merkel’s own party and an initial supporter of the European Union. He pointed to the failure of the continuing Greek bailouts, observing, “The first medicine didn’t work, and now we are simply doubling the dose. My fear is that when the big bang happens, it won’t just be us who will have to pay for generations hereafter.” He still favors the union, however: "I don’t want to be co-opted into an anti-euro movement — the EU is an important political project. But what we promised the people was a union of stability, not a union of debt."
Bosbach reflects increasing discontent of German citizens who find themselves forced to give approximately $300 billion to the rescue fund which will then use the money to buy worthless Greek bonds and continue to extend credit to the bankrupt country.
A church I visited recently announced a seminar for “financial professionals” who lament their industry’s “fallen ethics.” In 2009, USA Today reported that “the top Roman Catholic bishop in the United States said … the global economic crisis was caused in part by people abandoning personal ethics, and he's calling for increased morality in business.” And earlier this year, Jewish Week lamented that “financial scandals have become a fixed component of our civilization” after opining, “If current trends [in cheating] continue, the Wall Street gang of 2020 will make the slithery coterie of 2008 look like a Cub Scout pack in comparison.”
I’m just a parishioner, not a cleric. Maybe that’s why I don’t see the inherent evil of business. In fact, when I pick up the phone to hear my father from 500 miles away tell me he loves me, or I send another article to an editor with a click of a mouse, or I feast on fresh spinach and blueberries while a blizzard howls outside, I thank God for the market. The comfort, abundance, convenience, and leisure it provides are enormous blessings.
Indeed, the market is nigh miraculous. Jesus Christ fed 5000 men with a few loaves and two small fish, but we mere mortals must depend on voluntary exchange. Yet that astounding commerce multiplies the earth’s scarce resources to feed, house, and clothe billions of people who would otherwise suffer short, nasty, brutish lives.
The Ford Motor Company’s greatest claim to fame as of late is the fact that it did not participate in the federal government’s bailout of General Motors and Chrysler. Ford was so proud of this that it actually created a commercial touting this truth. Allegedly at the request of the Obama administration, however, the ad will no longer be run on television.
In the commercial, an actual buyer is led to a surprise news conference where he is asked impromptu questions. The buyer responds by saying, “I wasn’t going to buy another car that was bailed out by the government. I was going to buy from a manufacturer that’s standing on their own: win, lose, or draw. That’s what America is about is taking the chance to succeed and understanding when you fail that you gotta’ pick yourself up and go back to work.”
The Detroit News reports:
Ford pulled the ad after individuals inside the White House questioned whether the copy was publicly denigrating the controversial bailout policy CEO Alan Mulally repeatedly supported in the dark days of late 2008, in early ‘09 and again when the ad flap arose. And more.
With the announcement from the Commerce Department that the sale of new homes in August fell by 2.3 percent compared to July, the Los Angeles Times took on a decidedly gloomy tone, concluding, “Sales of newly built homes in the U.S. appear to be stuck at the bottom.” The report noted that the August numbers translated into an annual rate of 295,000 sales, which is close to the low of 278,000 recorded in August last year, and down from the 1.3 million new homes sold in 2005.
Missing was any attention, however, to two important pieces of the economic housing puzzle in that report. First, the trend for new home sales has been flat for the last 16 months, and the 162,000 newly-built homes presently on the market represent a supply of six months and two weeks. A healthy housing market usually has a six months’ supply of new homes. Translation: The housing market in new homes has hit a bottom, and the supply/demand ratio is almost back to normal.
Last week the President introduced his deficit reduction plan by saying that it would start to pay down “the big pile of IOUs” the government has issued in order to pay its bills, through a combination of spending cuts and tax increases. He asserted, “We have to cut out what we can’t afford [in order] to pay for what really matters. We can’t just cut our way out of this hole. It is going to take a balanced approach.” And to make his point clear, he declared,
I will veto any bill that changes benefits for those who rely on Medicare but does not raise serious revenues by asking the wealthiest Americans or biggest corporations to pay their fair share. [Emphasis added.]
One piece of his proposal, which has been dubbed the “Buffet rule,” would not allow millionaires to pay a lesser share of their income in taxes than middle-income earners pay, such as Warren Buffet’s secretary. And that is the first of several fallacies underpinning his proposal. When all the taxes that Buffet pays are taken into account, his share is vastly larger than Buffet publicly admitted. As noted by Richard Rahn, senior fellow at the Cato Institute, “Buffet appears to prefer to take much of his compensation in the form of capital gains rather than salary….
What's the common thread between Europe's financial mess, particularly among the PIIGS (Portugal, Ireland, Italy, Greece and Spain), and the financial mess in the U.S.? That question could be more easily answered if we asked instead: What's necessary to cure the financial mess in Europe and the U.S.? If European governments and the U.S. Congress ceased the practice of giving people what they have not earned, budgets would be more than balanced. For government to guarantee a person a right to goods and services he has not earned, it must diminish someone else's right to what he has earned, simply because governments have no resources of their very own.
The first order of business in reaching a solution to the financial mess in Europe and the U.S. must be the recognition that governments have been doing a class of unsustainable things, mostly giving people special privileges and things that they have not earned. It's a matter of not simply what's good or bad for the beneficiaries but what its effect is on society at large and the welfare of a nation.
The hint given to Bob Woodward and Carl Bernstein by their mysterious informant “Deep Throat” regarding President Nixon’s involvement in the Watergate scandal was: “Follow the money.” If the same counsel is followed today with regard to President Obama’s fundraising, the discoveries are disturbing.
With the Solyndra controversy still unraveling, President Obama has moved undauntedly on to the next suspicious entanglement with corporate beneficiaries of federal largesse.
It is being reported that in a couple of weeks President Obama will be the benefactor of a fundraiser being organized by a Missouri businessman “whose company benefited from a $107-million federal tax credit to develop a wind power facility in his state.”
The name of this Friend of Barack is well-known in the Show Me State and in Democratic Party circles. Tom Carnahan is the 42-year-old son of the former Governor of Missouri Mel Carnahan and former U.S. Senator Jean Carnahan. The younger Carnahan was an attorney and is the founder of Wind Capital Group.
In keeping with his governing style, that is, rule by decree, "President" Chávez recently nationalized Venezuela’s gold mining industry. With its expropriation, the dictator continues his campaign of “21st-century Socialism.”
Over the past decade, Hugo Chávez has radically altered Venezuela’s economic landscape. Executing a pernicious, politically driven, nationalization program, the government has systematically taken over key sectors. In doing so, Chávez stripped private industry, its investors — not to mention political opponents — of infrastructure, private property, and profits. Since 2002, almost 1,000 companies have been seized. For socialists and statists the world over, this is something of a guide, a graduate seminar in confiscation and class warfare. But for the rest of us, it remains a lesson in economic decay and failed leadership.
The takeover of gold mining operations should surprise no one. With gold commanding upwards of $1,600 dollars an ounce, the industry is highly profitable. And it is the profit of private enterprise that Chávez endeavors to exploit for his ends. As the dictator himself once said, “We can't have socialism if the state doesn't have control over its resources!"
Apparently the Federal Reserve is not the only entity threatened by gold. Central banks in Europe are restricting the sales of precious metals, presumably threatened by the fact that citizens are increasingly abandoning the devalued paper currencies and preserving their wealth by purchasing gold and silver.
Most countries in Europe — with the exceptions of Germany and Switzerland — have already mandated that residents may acquire gold only by purchasing it directly from local bank branches. Banks have justified the new policies by claiming that they are intended to prevent money laundering.
Drop what you’re doing. I mean it. Stop whatever it is that you’re doing and go online to find out when the next showing is. Take a friend, go alone, doesn’t matter. Moneyball isn’t about baseball. No way. This is about taking a chance, taking a risk, putting it all on the line. This is what it feels like to try to (and succeed in) overthrowing the existing order of things. It’s about finding out not only who your friends are, but how it feels to be alone.
I don’t even like baseball. And I don’t particularly care much for Brad Pitt. You probably don’t, either. Doesn’t matter. In this movie he is Billy Beane, GM of the Oakland Athletics, which just lost the American League Division Series to the New York Yankees in 2001. No wonder. The Yankees had a $114 million salary budget to finance their race for the pennant, compared to the A’s $39 million.