Saturday, December 12, 2009

Greek tragedy for the world economy

The gloomy thoughts below are from a much-published German economist presently working in Australia. It would certainly be very disruptive if countries stopped being able to pay interest on their debt. The USA can just print money to pay what it owes to China (etc.) but other countries that owe dollars cannot do that. And the US dollar is already devaluing rapidly under the impact of Obama's huge debt-financed spending -- so a large part of the world's savings (held in U.S. dollars) is being wiped out at a rate of knots. And that (inflation) is always very disruptive

By Dr Oliver Marc Hartwich

Just when many thought the global financial crisis was over, it re-emerges with a bang. This week, Greece and Spain both had their credit ratings downgraded. Standard & Poor’s changed Spain’s outlook from ‘stable’ to ‘negative.’ For Greece, the news was even worse: Fitch revalued Greece’s creditworthiness to BBB+, just a few steps above junk status.

Dramatic as these developments sound, they are hardly surprising. When Greece was allowed to join Europe’s Monetary Union in 2002, it benefitted enormously from the Eurozone’s lower interest rates. Unfortunately, the Greeks did not use this opportunity to consolidate their finances. Instead, they took it as an invitation to run even higher deficits.

Only in one year, 2006, was Greece able to comply with the EU Growth and Stability Pact, which sets a budget deficit limit of 3% of GDP. Following the financial crisis, this deficit has now ballooned to 12.7%. At 121% of GDP, Greece’s public debt is much larger than its economy, making it the most indebted country in the European Union.

Australians could be forgiven for thinking that Greece’s problems are those of a small, faraway country. But they matter for at least two reasons. First, the GFC has demonstrated how interconnected the world economy has become. There are no faraway places anymore. Second, the Greek troubles could be a harbinger of much worse. It is only a matter of time before one of the world’s other sovereign debt time-bombs detonates.

That even Greece could trigger a financial domino effect is not least due to its membership of the Euro currency. There is no political way the other Euro member states could let the Greeks go under. Having just supported their banks, French and German taxpayers may now have to bail out a whole country. This will have implications for the Euro and economic stability, generally. It could even break the European Union with unforeseeable consequences.

Whether Greece will be the next country to declare bankruptcy is by no means certain. Other hot contenders are the Baltic states, Spain, Dubai, Ireland and, threatening even greater disruption, Japan and Britain. US public finances hardly look reassuring, either.

There is a real possibility that some countries have overstretched themselves so much that they cannot service their debt in the near future. It now looks more like a question of ‘when’ rather than ‘if’ that will happen. We are anxiously awaiting the next act of this Greek tragedy.

The above is a press release from the Centre for Independent Studies, dated December 11. Enquiries to Snail mail: PO Box 92, St Leonards, NSW, Australia 1590.


Time to Put the Squeeze on Palestinian Aid

At the 1993 Oslo signing ceremony in Washington, President Bill Clinton called the Oslo accords a "brave gamble." Actually, Oslo turned out to be a tragic gamble that cost Israel almost 2,000 lives, with thousands more maimed. The reason: a concessionary policy that ignored continuing Palestinian rejection of Israel's existence as a Jewish state and support for terrorist violence against it.

Now, the Obama administration is doing the same thing. And it is Barack Obama's own secretary of state, Hillary Rodham Clinton, who is pretending that Palestinian terrorism -- and the incitement to hatred and murder that feeds it -- is nonexistent or unimportant.

Recently, Sen. Arlen Specter (D-Pa.) wrote to Clinton, stating that he was "deeply concerned" about Palestinian leader Mahmoud Abbas' Fatah Party conference this past August.

He noted that "posters of children brandishing weapons" were displayed; senior Fatah officials routinely "glorified perpetrators of terrorism"; and leaders addressing the audience "continuously championed the notion that Palestinians maintain the right to commit violence against Israel."

Accordingly, Specter urged that the $800 million in U.S. aid to the Fatah-controlled Palestinian Authority be "predicated on at least some level of assurance that the beneficiaries are committed to long-term peace."

How did Secretary Clinton reply? With a flat-earth letter of rebuttal to Specter, claiming that the Fatah conference showed "a broad consensus supporting President Abbas, negotiations with Israel, and the two-state solution."

She also claimed that Abbas and Fatah "reaffirmed" their "strategic choice to support a peaceful resolution of the conflict." She noted that "some individual Fatah delegates issued problematic texts and statements ... . It is important to note that those texts and statements did not represent Fatah's official positions."

In fact, as the Zionist Organization of America has documented, the conference reaffirmed Fatah's refusal to accept Israel's existence as a Jewish state and did not commit itself to a nonviolence. On the contrary, Abbas himself declared: "We maintain the right to launch an armed resistance." Jailed Fatah terrorist leader Marwan Barghouti, often touted as future leader, said: "Resistance to the Israeli occupation is a national obligation, and it is a legitimate right."

Another senior Fatah figure, Fahmi Al-Za'arir, said: "It is not possible to rule out or to marginalize the military option. The Al-Aqsa Martyrs Brigades [Fatah's armed force and a recognized terrorist group under U.S. law] are the jewel in Fatah's crown."

These are not merely the views of "individual Fatah delegates," as Clinton claims; they are unequivocal statements of support for terror by senior leaders of Fatah from Mahmoud Abbas down.

Moreover, the Fatah platform calls for increased international pressure on Israel, and opposes any normalization of relations between Israel and Arab states. It also calls for a "strategic channel with Iran to be opened," at a time Iran is defying the world by seeking to acquire nuclear weapons.

Moreover, at this conference, Fatah openly honored terrorists, including Khaled Abu-Isbah and Dalal Mughrabi, responsible for a 1978 coastal-road bus-hijacking, in which 37 Israelis, including 12 children, were slaughtered.

In view of these easily ascertainable facts, Clinton's response to Specter is deeply troubling.

Ironically, as a senator, Clinton distinguished herself by pointing to the incitement to hatred and murder that permeates the P.A. She stated that such incitement would have "dire consequences for peace for generations to come." Now, however, confronting this matter and in a position to act, she ignores her own insights and advice. Worse, she praises Fatah for its commitment to peace.

The time has come for American Jewish and pro-Israel organizations to demand conditioning U.S. aid to the P.A. on the dismantling of terror groups, and an end to incitement to hatred and murder in its media, mosques and schools.



Why are Americans so pro-Israel?

Of all the ways in which the United States marches to the beat of its own drummer, few are more striking than the American people's consistent and deep-rooted support for the Jewish state. In a recent nationwide survey, the Gallup organization asked Americans: "In the Middle East situation, are your sympathies more with the Israelis or more with the Palestinians?" For the fourth year in a row, 59 percent -- nearly 6 in 10 -- said their sympathies were with Israel, while just 18 percent sided with the Palestinians. When respondents were asked for their opinion of various countries, 63 percent said they had a favorable view of Israel (21 percent said very favorable), compared with just 15 percent who thought highly of the Palestinian Authority.

Conversely, only 29 percent of Americans told Gallup that their opinion of Israel was negative, even as a whopping 73 percent expressed a negative attitude toward the Palestinians.

This overwhelmingly positive feeling for Israel is normal for the United States, but it puts Americans sharply at odds with the rest of the world. At the United Nations, for example, nothing is more routine than the castigation of Israel. Similarly, any time Israel is forced to use its military power in self-defense, it comes under the harsh glare of the international media, which subject it to a scrutiny far more unforgiving than any other country receives. It was only a few years ago that a poll commissioned by the European Union found that a plurality of Europeans regarded Israel as the greatest threat to world peace -- more menacing than even North Korea or Iran. So what makes Americans different?

Foreign policy "realists" could certainly suggest reasons why close friendship with Israel is not in America's interest, beginning with the fact that most of the world doesn't share it. There are 300 million or more Arabs in the world, and they sit atop a vast share of the world's oil supply. Why endanger American access to that oil by maintaining such close ties to a nation with only 6 million people and no petroleum to export? Why risk incurring the wrath of Islamic terrorists by supporting Israel, a nation most of them detest? Surely it would make more sense -- so a "realist" might argue -- for Americans to distance themselves from the world's lone Jewish state, and tilt instead toward the much greater number of nations and governments that are hostile to Israel.

Yet most Americans instinctively reject such advice. The national consensus in support of Israel is longstanding and durable, and it isn't grounded in economics, energy policy, or a quest for diplomatic popularity. Nor, as some conspiracy-minded critics have claimed, is it because a "Zionist lobby" in Washington routinely hijacks US foreign policy, manipulating America into serving Israel's ends. The roots of America's bond with Israel lie elsewhere.

First, Americans stand with Israel because in it they recognize a liberal democracy much like their own: a nation in which elections are lively, fair, and democratic; in which freedom of speech and the press are core values; in which the political rights of minorities are respected; and in which a commitment to civil liberties and justice is woven into the very fabric of society.

Second, Americans know that Israel is a stable ally in one of the world's most critical and volatile regions. Its intelligence service is perhaps the world's finest, its military is the best in the Middle East, and its painfully acquired expertise in counterterrorism is invaluable -- all the more so as we wage our own war against jihadi terrorists.

Third, Americans sympathize with Israel because they understand that the enemies of Israel state hate the United States as well. The suicide bombers who revel in the death of innocent Jews, the fanatics who chant "Death to Israel," the Iranian- and Syrian-backed forces that launch rockets from Gaza or Lebanon with the aim of shedding Israeli blood -- they are steeped in the same murderous ideology as Osama bin Laden and the Islamists who slaughtered so many Americans on Sept. 11, 2001.

And fourth, there is a deep religious bond between American Christians and the Jewish people, a bond that stretches back to the earliest era of American history. More than a century before the Revolutionary War, the Puritan leader Increase Mather taught his followers to anticipate the day when the Jews would return to their homeland and establish "the most glorious nation in the whole world." In 1819, former President John Adams wrote of his wish to see "the Jews against in Judea an independent nation." Today, tens of millions of American evangelicals passionately support -- even love -- the Jewish state, and consider it nothing less than their duty as Christians to stand with Israel and her people.

Why are Americans so pro-Israel? For reasons practical and idealistic, religious and strategic. They are linked by the kinship of common values -- an affinity of strength and decency that reflects the best of both nations, and sets them apart from the other nations of the world.




Hating and beating up on 'f------ white people' in Denver: "To Gregory Kane's column of today on hate crimes legislation, I'd add these recent incidents in Denver, Colo., in which, once again, the perps and victims were "the wrong color." The series of brutal beatings and robberies was clearly racially motivated -- tinged with such shouted statements as "I hate you f---ing white people." According to the television news, the perps will likely face state hate crimes charges. But will we see the new, redundant federal hate crimes law applied here? That is to say, if any of the suspects are somehow acquitted in state court, will federal prosecutors re-try them in federal court, as that new law allows -- an apparent violation of the constitutional protection against double jeopardy? Will any grants from the new hate crimes law be given to local prosecutors if they pursue such charges, as that new law also allows?"

Obama's Nobel speech: "In his Nobel acceptance speech this morning, President Obama justified his decision to raise the stakes in the Afghan War. It was also another arrogant, self-referential Obama Special: "As someone who stands here as a direct consequence of Dr. King's life's work, I am living testimony to the moral force of non-violence." Dr. Martin Luther King won the Nobel in 1964, after years of being arrested and persecuted for his pursuit of basic human rights. One would hope that his legacy amounts to much more than a president who praises himself while accepting awards he clearly doesn't deserve, and who sounds more like George W. Bush with each speech he gives on foreign policy."

Enabling ACORN's Comeback: "Congress -- and possibly Citigroup -- may be gearing up to start funding the organized crime syndicate ACORN again. The current federal funding ban expires Dec. 18. On Tuesday evening the House Appropriations Committee rejected on a party line vote of 9 to 5 an amendment offered by Rep. Tom Latham (R-Iowa) that would have blocked federal funding of the radical advocacy group. The amendment was needed because the Obama administration thumbed its nose at a provision in spending legislation that banned ACORN funding until the end of next week. In a ruling revealed late last month by the Justice Department the Obama administration invented a loophole allowing the government to continue funding the president's friends at ACORN. Through the magic of legal interpretation, the language forbidding funding the group was transformed by Acting Assistant Attorney General David J. Barron into a requirement not "to refuse payment on binding contractual obligations that predate" the original funding ban. Latham's amendment would have closed the loophole"

Progressives vs. democracy: "At press time, the House-Senate reconciliation over some version of a health care bill was still lurching along. Although key details were changing daily, one fact has remained constant: Any legislation that might end up passing through the Democrat-controlled Congress will involve enormous new government subsidies, onerous mandates on private insurance companies (and their customers), and tighter government controls on a large and growing percentage of the U.S. economy. Yet the process has already proven to be an unconscionable disappointment to many liberal legislators and commentators. Their increasingly shrill reaction to the debate has revealed a disturbing strain of American political thought that cannot comprehend how anyone could disagree with a big-government solution to health care without being evil, stupid, insane, or all three.”

Life in a mahogany bubble: "In our nation’s curious capital, people know nothing of uneducated young waitresses who juggle long hours and children, without having even one illegal nanny. DC is a world of secure jobs and money, where everyone has been to university, often to a Calvin Klein universities like Harvard, and brains in the ninety-ninth percentile seem unremarkable. We are making three hundred grand a year; why can’t they? This otherworldliness accounts I think for a certain surreal quality to Washington’s debates. For people with high-end Blue Cross, health care has something to do with Keynes and free enterprise and ideological catfights. For a young mother with a sick kid and no money, it doesn’t. But Washington doesn’t know this. Let them eat cake, but is there cake?”

Out of the mouths of babes come a conniving adult’s words: "The Copenhagen meeting opened with a video of terrified children begging adults to stop global warming. Green fanatic Clive Hamilton writes creepy letters to my children to make them scared, too. A crying 18-year-old confronts Canada’s chief negotiator at a Copenhagen briefing (?). The Age today publishes an op-ed allegedly written by a 17-year-old who says she is also “scared”, and wants “a climate agreement”. There is something profoundly immoral about terrifiying children for a political cause, and something profoundly anti-intellectual in demanding adults then heed the children’s cries to settle immensely complex questions of science and economics. This tactic alone suggests on which side of this debate reason lies."


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The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialist) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party" (In German: Nationalsozialistische Deutsche Arbeiterpartei)



William Dunigan said...

Greetings to one and all:

On this Christmas day let us not forget the most important aspect of Christmas. For what most know, and some may not know...Christmas is about the "Christ Child" the one who was born in a manger and also died on a cross...this was done for us. He gave his life, that we may have life and that more abundantly.

Robert said...

I found similar comments on Greece and the Baltics with respect to the unfolding global depression. The worst is NOT over, it's just around the corner.