“Civilizations die from suicide, not by murder,” said British historian Arnold Toynbee.
We’re seeing exactly that today in Greece, Italy, Portugal, and Ireland. In all those cases, the ineptness of government and the mismanagement of domestic economic policy have turned once-great nations into beggar states.
In Italy, bloated levels of government spending, rising levels of red ink, political opposition to any meaningful austerity package, and the prospect of a debt default have spooked investors, ignited a capital flight from Italian bonds and raised borrowing costs.
In August, Italy paid buyers of a new 10-year bond a yield of 5.22 percent. By October, the rate was 6.06 percent. In early November, the price of borrowing to Italy via the same 10-year bond rose to 6.73 percent, an escalation in costs that only added to the red ink and deepened the debt crisis.
Economist Mario Monti, a former European Union Commissioner, was named “senator for life” by Italian President Giorgio Napolitano on November 9, followed several days later by the appointment of Monti as Italian prime minister after Silvo Berlusconi stepped down.
A year ago Dagong Global Credit Rating reduced its rating on the sovereign debt of the United States from AA to A+. In August it dropped it another notch to A. In an interview on Saturday the agency’s chairman, Guan Jianzhong, said it is nearly inevitable that the agency will further reduce its rating of U.S. sovereign debt: "We are continuing to monitor this closely. First of all we need to look at this year’s economic growth [in the US] and then predict next year’s trends. If in the year 2012 the overall projections are not very good, meaning that the sources of payment – and liabilities – are bad and cannot be changed, or change for the worse, then we will lower the rating once again."
American taxpayers are sending over $100 million per year to a bloated international bureaucracy that has morphed into a “cartel enforcer” for welfare-state politicians seeking to prevent tax competition, according to a new study.
Entitled "Cartelizing Taxes: Understanding the OECD's Campaign Against 'Harmful Tax Competition,'” the paper examines the Organization for Economic Cooperation and Development and its increasingly fierce campaign to “cartelize” global taxes. And the picture that emerges is troubling to say the least, according to experts.
Competition between nations for jobs, capital, and business has served to restrain big government and harmful policies for centuries. If one regime raised taxes too much, companies and workers could simply move to another jurisdiction.
But now, with massive U.S. taxpayer subsidies representing about a quarter of the bureaucracy’s budget, the OECD is working feverishly to end tax competition, according to the paper. And the schemes are designed to benefit high-tax welfare states determined to stem the flight of businesses and capital to more business-friendly environments.
After voters rejected a measure on November 8 to rein in public-servant unions in Ohio, activists who led the successful campaign to nullify ObamaCare in the state are now trying to end government-mandated membership in labor organizations. The constitutional amendment, known as the “Workplace Freedom Amendment,” would make Ohio one of almost two dozen “right-to-work” states in America. If approved by voters it would allow government and private-sector workers to freely choose whether or not to join a union and pay union dues.
The list of crimes committed by members of the leftist Occupy Wall Street movement has grown to at least 204. And John Nolte, of BigJournalism.com, reports that the leftist media is hiding the scope of criminality and hatred the OWS movement represents to mislead the public about the movement’s true nature. Nolte keeps a tally of OWS crimes at the Big Journalism website. At least six people have died at OWS events, Gateway Pundit has reported, including two men shot to death on Thursday, one in Oakland and one in Burlington, Vermont.
In his Forbes magazine article published Thursday, Nathan Lewis makes it sound easy to get back to a gold standard. After all, it has been accomplished numerous times in history around the world, including in America following the Civil War.
The first way is a “return to prior parity,” which would mean making a dollar redeemable in gold at $35 an ounce. Lewis points out that this would be impossible as it would entail a huge shrinkage in the money supply and a consequent depression. So option one is out.
The second way is to make a dollar redeemable in gold at a figure close to gold’s current price at between $1,500 and $1,700 an ounce. Lewis notes that this would also require a major restructuring — “a long price adjustment” — in his words, and “would probably cause a recession.” Not such a good option.
Lewis says there is a third option: Simply replace the currency with another one and make it redeemable in gold at some arbitrary value that the present gold supply would support. He points out that although the dollar is weak and getting weaker, few are ready for this. This option would apply only after the complete destruction of the dollar, something similar to what happened in the German Weimar Republic in the early 1920s. So that option isn’t feasible either. At least not yet.
It remains unclear exactly why or how the Gadhafi regime went from “a model” and an “important ally” to the next target for regime change in a period of just a few years. But after claims of “genocide” as the justification for NATO intervention were disputed by experts, several other theories have been floated.
Oil, of course, has been mentioned frequently — Libya is Africa‘s largest oil producer. But one possible reason in particular for Gadhafi’s fall from grace has gained significant traction among analysts and segments of the non-Western media: central banking and the global monetary system.
According to more than a few observers, Gadhafi’s plan to quit selling Libyan oil in U.S. dollars — demanding payment instead in gold-backed “dinars” (a single African currency made from gold) — was the real cause. The regime, sitting on massive amounts of gold, estimated at close to 150 tons, was also pushing other African and Middle Eastern governments to follow suit.
And it literally had the potential to bring down the dollar and the world monetary system by extension, according to analysts. French President Nicolas Sarkozy reportedly went so far as to call Libya a “threat” to the financial security of the world. The “Insiders” were apparently panicking over Gadhafi’s plan.
CNN’s article by Charles Riley quoted several of the Republican candidates for President out of context and then asked several unknown Keynesian economists — Keynesians believe in growing and empowering the government to stimulate the economy — to comment on those quotes. The result was a one-sided dismissal of anything the candidates had to say about the economy and how they might fix it.
For instance, Riley quoted Jonathan Lanning, an assistant professor at Bryn Mawr, as saying that "there are so many economic ‘misstatements’ being made, and it isn’t confined to any one candidate.” He went on to contend that if any of the Republican candidates were in his introductory economics class, Econ 101, they certainly wouldn’t move up to his 200-level classes next semester: “I can say that none of the rationales for various policies that I have heard display a basic 200-level understanding of key economic concepts.”
After receiving heated criticism from Republicans and conservative groups, the White House swiftly delayed implementation of a proposed 15-cent tax on fresh-cut Christmas trees. In what critics were calling a government attack on Christmas, Acting Administrator of Agricultural Marketing David Shipman announced Tuesday that the Secretary of Agriculture would appoint a new federal board contrived to help market the Christmas tree industry.
Rep. Steve Scalise (R-La.) was quick to criticize the program, describing the tax as a "Grinch" move by the Obama administration. The program was intended to launch Wednesday, but public outcry spurred a quick retraction from the White House. "I can tell you unequivocally that the Obama administration is not taxing Christmas trees. What’s being talked about here is an industry group deciding to impose fees on itself to fund a promotional campaign," White House spokesman Matt Lehrich assured Fox News. "That said, USDA is going to delay implementation and revisit this action."
The alleged purpose of the Christmas Tree Promotion Board is to operate a "program of promotion, research, evaluation, and information designed to strengthen the Christmas tree industry’s position in the marketplace; maintain and expand existing markets for Christmas trees; and to carry out programs, plans, and projects designed to provide maximum benefits to the Christmas tree industry." The program of "information" involves a marketing campaign to "enhance the image of Christmas trees and the Christmas tree industry in the United States."
As the debt crisis in Italy and other European Union countries spirals out of control, reports said the French and German governments have started early discussions on a possible collapse of the single currency. Publicly, however, EU bosses are denying problems and demanding more “integration.”
Several possibilities have been mentioned by analysts including the outright breakup of the euro-zone altogether or at least expulsion of some of its more irresponsible member governments. And there are more than a few in that category.
The massively indebted Italian government, with its bond yields soaring to new heights, is thought to be too big to rescue. And hundreds of billions have already been poured into the socialist Greek regime to no avail. The socialist governments of Spain and Portugal are in terrible financial straits, too.
But Italy — the euro-zone’s third largest economy — is dominating the headlines for now. The supranational regime’s bailout fund does not have nearly the amount of money needed to rescue the Italian government.
The European Central Bank (ECB) has so far resisted calls to print even more money to completely paper over the Italy problem. But some analysts believe the central bank is secretly plotting to buy up Italian government bonds in the near future.