Richard Fernandez

While the US is focused on its own domestic dramas, Europe as the Economist puts it, “is bleeding out”. Silently, exsanguinating below the fold, but bleeding all the same.

It is a car crash of a data release. One simply can’t look away. Hard to know precisely which part of the euro area’s latest unemployment report is the most grimly compelling. …

Individual country numbers inspire their own brand of horror. Greek joblessness topped 27% in January (the most recent month for which data there are available), while Spanish employment has risen to 26.7%. Joblessness in France rose by slightly more in the year to March than it did in Italy. And did you know that Dutch unemployment rose by 1.4 percentage points over the past year? German unemployment, of course, has held steady at 5.4% since last summer.

It is the youth figures that are most remarkable, however: 59.1% of those under 25 are unemployed in Greece, 55.9% in Spain, 38.4% in Italy, 38.3% in Portugal, 26.5% in France—3.6m youths in all.

Yet that would not appear remarkable to anyone who understands what state-controlled economies really are. Hope and Change economies are crony capitalist systems which pick winners and losers. They maintain the status quo at all costs — and reward those who have captured government over those who innovate. Thus the Reuters headline “Banks saved, but Europe risks ‘losing a generation’” is perfectly comprehensible.

What else would happen but that?

Naturally this plight is explained to the desperate voters as the consequence of the remaining vestiges of capitalism. The growing impoverishment, we are told, is occurring because socialism hasn’t gone far enough.  Only give the government more power and all will be well. And so the low information voters turn out in the streets offering to exchange what little freedom they have left for some low paying jobs and a little welfare.  The poorer they are the more eager they become to trade their last liberties for one more benefits check.

It wasn’t supposed to be that way.

The ability of young people to study and work anywhere in Europe as part of the EU’s single market ideal was also supposed to deliver vastly improved opportunities for all.

But instead, as a result of the banking and debt crisis that has cast a shadow over Europe since 2008, those sunny prospects never materialized for millions of young people.

“Greece, Spain and Italy have perhaps the best educated generations they have ever had in their countries, their parents invested a lot of money in the education of their children, everything they did was right,” said Schulz.

“And now they are ready to work the society says, ‘No place for you’. We are creating a lost generation.

May Day rallies erupted all over Europe with a single resounding message: end “the excesses of reckless capitalism”, put a stop to the abuses of the “laissez-faire parties on the European right” and in their place implement more “tax and spend”. And whatever the shortcomings of that approach, the Left will surely insist on that solution.  They will insist on even more progressives being appointed. And when these numerous icons of the left worsen the plight of the “lost generation” it will still be capitalism’s fault…

Given a chance to freeload, many will.

Socialism seems to work best in homogenous nations. Denmark is that in spades: 95% are Evangelical Lutheran, 3% other Christian and 2% Muslim.

But they’re not reproducing and that kills the financial basis for socialism.

Suzanne Daley in the NYT

COPENHAGEN — It began as a stunt intended to prove that hardship and poverty still existed in this small, wealthy country, but it backfired badly. Visit a single mother of two on welfare, a liberal member of Parliament goaded a skeptical political opponent, see for yourself how hard it is.

It turned out, however, that life on welfare was not so hard. The 36-year-old single mother, given the pseudonym “Carina” in the news media, had more money to spend than many of the country’s full-time workers. All told, she was getting about $2,700 a month, and she had been on welfare since she was 16.

In past years, Danes might have shrugged off the case, finding Carina more pitiable than anything else. But even before her story was in the headlines 16 months ago, they were deeply engaged in a debate about whether their beloved welfare state, perhaps Europe’s most generous, had become too rich, undermining the country’s work ethic. Carina helped tip the scales.

With little fuss or political protest — or notice abroad — Denmark has been at work overhauling entitlements, trying to prod Danes into working more or longer or both. While much of southern Europe has been racked by strikes and protests as its creditors force austerity measures, Denmark still has a coveted AAA bond rating.

But Denmark’s long-term outlook is troubling. The population is aging, and in many regions of the country people without jobs now outnumber those with them.

Some of that is a result of a depressed economy. But many experts say a more basic problem is the proportion of Danes who are not participating in the work force at all — be they dawdling university students, young pensioners or welfare recipients like Carina who lean on hefty government support.

“Before the crisis there was a sense that there was always going to be more and more,” Bjarke Moller, the editor in chief of publications for Mandag Morgen, a research group in Copenhagen. “But that is not true anymore. There are a lot of pressures on us right now. We need to be an agile society to survive.”

The Danish model of government is close to a religion here, and it has produced a population that regularly claims to be among the happiest in the world. Even the country’s conservative politicians are not suggesting getting rid of it.

Denmark has among the highest marginal income-tax rates in the world, with the top bracket of 56.5 percent kicking in on incomes of more than about $80,000. But in exchange, the Danes get a cradle-to-grave safety net that includes free health care, a free university education and hefty payouts to even the richest citizens.

Parents in all income brackets, for instance, get quarterly checks from the government to help defray child-care costs. The elderly get free maid service if they need it, even if they are wealthy.

But few experts here believe that Denmark can long afford the current perks. So Denmark is retooling itself, tinkering with corporate tax rates, considering new public sector investments and, for the long term, trying to wean more people — the young and the old — off government benefits.

“In the past, people never asked for help unless they needed it,” said Karen Haekkerup, the minister of social affairs and integration, who has been outspoken on the subject. “My grandmother was offered a pension and she was offended. She did not need it.

“But now people do not have that mentality. They think of these benefits as their rights. The rights have just expanded and expanded. And it has brought us a good quality of life. But now we need to go back to the rights and the duties. We all have to contribute.”

In 2012, a little over 2.6 million people between the ages of 15 and 64 were working in Denmark, 47 percent of the total population and 73 percent of the 15- to 64-year-olds.

While only about 65 percent of working age adults are employed in the United States, comparisons are misleading, since many Danes work short hours and all enjoy perks like long vacations and lengthy paid maternity leaves, not to speak of a de facto minimum wage approaching $20 an hour. Danes would rank much lower in terms of hours worked per year.

In addition, the work force has far more older people to support. About 18 percent of Denmark’s population is over 65, compared with 13 percent in the United States.

Do you think this will make California rethink its carbon trading scheme? Think again.

FOR YEARS, European leaders have flaunted their unwavering commitment to fighting climate change — and chastised the United States for lagging behind. But last week brought yet more confirmation that the continent has become a green-energy basket case. Instead of a model for the world to emulate, Europe has become a model of what not to do.

The centerpiece of the European Union’s climate plan — indeed, the only major climate policy that acts across all member countries — is a slowly declining continent-wide cap on emissions. By allowing companies to buy, sell and bank permits to pollute under that cap, the program puts a price on European carbon dioxide emissions. Designed properly, the scheme should encourage companies and consumers to reduce the carbon-intensity of the goods they purchase and invest in cleaner alternatives.

But the Europeans didn’t design the policy properly. For a variety of reasons that E.U. officials should have anticipated, the market for carbon permits has all but collapsed. And in a Tuesday vote, the European Parliament rejected a slapdash rescue plan.

If the continent wants to rediscover its ambition on climate change, individual member states will probably have to do it on their own. But European governments have proved themselves to be incompetent central planners, counter-productive and wary of thinking pragmatically.

Germany is irrationally shutting its nuclear power plants — which produce lots of steady, reliable electricity and no carbon dioxide emissions — and promising that renewables will somehow pick up the slack. Perversely, that approach has led power companies to ramp up coal burning, the dirtiest fossil fuel, in a country that has also lavished its public money on the solar industry. Spain, too, has over-invested in expensive renewables. To its credit, France hasn’t decided to shutter its nuclear plants, but it is one of many countries that refuse to open up natural gas reserves, a resource that could help wean the continent off coal.

Britain is comparatively better, developing its own carbon-pricing program and permitting gas development. But that hasn’t kept Europe’s carbon emissions from notching up in the last few years — even as those of the United States have decreased.

Only a few years ago, it would have been outrageous to claim that the United States would ever be on a better emissions trajectory than Europe. Yet it is now burning less coal even asEurope burns more. That partially reflects the fact that the United States is only now taking steps mandating greater fuel efficiency for cars. But it is also the result of a practical embrace of natural gas and the continued use of nuclear power.

The United States consequently has the opportunity to turn itself into the world leader in fighting climate change, a role it has long shied from. To lock in its progress, U.S. policymakers must learn from Europe’s dysfunction. That means putting a price on carbon emissions that is simple, predictable, aggressive and comprehensive, and then getting out of the way.

Meanwhile, the fear of radiation caused Germany and others to radically curtail their nuclear power generation. Thus we have people with “green” sensibilities, moving away from the one reliable power source that does not emit carbon.

And they fancy themselves the “reality-based community.”

Robert Peter Gale & Eric Lax at Bloomberg News

It is two years since Japan’s 9.0- magnitude earthquake, one so powerful it shifted the position of the Earth’s figure axis by as much as 6 inches and moved Honshu, Japan’s main island, 8 feet eastward. The tsunami generated by the earthquake obliterated towns, drowned almost 20,000 people and left more than 300,000 homeless. Everyone living within 15 miles of Fukushima was evacuated; many are still in temporary housing. Some will never be able to return home.

More than 300,000 buildings were destroyed and another million damaged, including four reactors at the Fukushima Daiichi nuclear power plant on the northeast coast. The earthquake caused the immediate shutdown of this and three other nuclear-power facilities.

Since the earthquake, a powerful movement gained momentum to halt Japan’s use of nuclear energy, which provided 30 percent of the country’s electricity. The last of 54 nuclear reactors was shut down in May 2012. Two facilities were restarted in June 2012; 52 remain shut. Japan has therefore had to increase its imports of natural gas, low-sulfur crude oil and fuel oil at a substantial economic and environmental cost. Seventy-five percent of the country’s electricity now comes from fossil fuels.

Accustomed to large trade surpluses, Japan, in 2012, had a record $78 billion trade deficit, thanks to increased energy imports and a drop in exports as Japanese goods became more expensive to produce.

Radiation Threat

And what of the lasting threat from radiation? Remarkably, outside the immediate area of Fukushima, this is hardly a problem at all. Although the crippled nuclear reactors themselves still pose a danger, no one, including personnel who worked in the buildings, died fromradiation exposure. Most experts agree that future health risks from the released radiation, notably radioactive iodine-131 and cesiums-134 and – 137, are extremely small and likely to be undetectable.

Even considering the upper boundary of estimated effects, there is unlikely to be any detectable increase in cancers in Japan, Asia or the world except close to the facility, according to a World Health Organization report. There will almost certainly be no increase in birth defects or genetic abnormalities from radiation.

A French psychiatrist whose patient hacked an elderly man to death was found guilty of manslaughter on Tuesday in a groundbreaking case that could affect the way patients are treated.

A court in Marseilles said Daniele Canarelli, 58, had committed a “grave error” by failing to recognize the public danger posed by Joel Gaillard, her patient of four years.

Gaillard hacked to death 80-year-old Germain Trabuc with an axe in March 2004 in Gap, in the Alps region of southeastern France, 20 days after fleeing a consultation with Canarelli at Marseilles’s Edouard Toulouse hospital.

Canarelli was handed a one-year prison sentence and ordered to pay 8,500 euros to the victim’s children, in the first case of its kind in France. Defense lawyers said the ruling would have serious repercussions for treatment of the mentally ill.

“If a psychiatrist lives in fear of being sentenced, it will have very real consequences and probably lead to harsher treatment of patients,” said Canarelli’s lawyer, Sylvain Pontier.

Ya think?

What can be more traditional than watching Donald Duck on Christmas? In Sweden, not much:

Columnist Janet Daley writing in the London Telegraph, Nov. 10:

The United States has now acquired an electorally powerful liberal bourgeoisie who are convinced, as their European counterparts have been for several generations, in spite of all evidence to the contrary, that public spending is inherently virtuous, that poverty can be cured by penalizing wealth creation, and that government intervention can engineer social “fairness.”

But just when some of Europe’s political class has begun to appreciate the dangers of this philosophy—that taken to its logical conclusion, it leads to economic stagnation and social division—America seems to have decided that it is the quintessence of enlightened sophistication.

Alberto Sisto

Six scientists and a government official were sentenced to six years in prison for manslaughter by an Italian court on Monday for failing to give adequate warning of an earthquake that killed more than 300 people in L’Aquila in 2009.

The seven, all members of a body called the National Commission for the Forecast and Prevention of Major Risks, were accused of negligence and malpractice in evaluating the danger and keeping the central city informed of the risks.

The case has drawn condemnation from international bodies including the American Geophysical Union, which said the risk of litigation may deter scientists from advising governments or even working in seismology and seismic risk assessments.

“The issue here is about miscommunication of science, and we should not be putting responsible scientists who gave measured, scientifically accurate information in prison,” Richard Walters of Oxford University’s Department of Earth Sciences said.

“This sets a very dangerous precedent and I fear it will discourage other scientists from offering their advice on natural hazards and trying to help society in this way.”

The scientists, Franco Barberi, Enzo Boschi, Giulio Selvaggi, Gian Michele Calvi, Claudio Eva and Mauro Dolce as well as Bernardo De Bernardis – a senior official in the Civil Protection Authority – were convicted of criminal manslaughter and causing criminal injury.

The 6.3 magnitude earthquake struck L’Aquila, in the Abruzzo region, at 3:32 a.m. on April 6, wrecking tens of thousands of buildings, injuring more than 1,000 people and killing 308.

Ambrose Evans-Pritchard in the London Telegraph

“The situation is very serious. Some business leaders are in a state of quasi-panic,” said Laurence Parisot, head of employers’ group MEDEF.

French business has called for “competiveness shock” of business tax cuts to claw back lost ground against Germany. Instead, it faces an extra €10bn (£8.1bn) of business costs from the budget unveiled in September.

Mrs Parisot said the policies border on economic illiteracy: “The idea of aligning taxes on capital with those on wages is a profound economic error. It is scandalous that the French have been left in such economic ignorance for years.”

“The pace of bankruptcies has accelerated over the summer. We are seeing a general loss of confidence by investors. Large foreign investors are shunning France altogether. It’s becoming really dramatic.”

An alliance of private organisations in France has issued a protest entitled “State of Emergency for Business”, warning that confiscatory tax rates threaten lasting damage to the French economy.

This analysis ignores Norway’s vast oil wealth, but that’s fine: it is mostly about Sweden. Key point: Sweden socialism has worked because the populace share a common work ethic.

Nima Sanandaji in New Geography

The Nordic nations, and Sweden in particular, are seen by many as the proof that it is possible to combine innovative and entrepreneurial economies with high tax rates. It is often argued that nations such as the US can gain the attractive social features of Denmark, Sweden, Norway and Finland — such as low crime rates, high life expectancy, and a high degree of social cohesion — simply by expanding the welfare state. An in depth analysis, however, shows that this line of reasoning is flawed.

To begin with, one should remember that free-markets have been at the core of the Nordic success stories. Sweden, for example, was an impoverished nation before the 1870s; one indication of that was massive emigration to the United States. As a capitalist system evolved out of the agrarian society, the country grew richer. Property rights, free markets, and the rule of law, in combination with large numbers of well-educated engineers and entrepreneurs, created an environment in which Sweden enjoyed an unprecedented period of sustained and rapid economic development. Globally famous companies such as IKEA, Volvo and Tetra Pak were founded during a period when Sweden was characterized by business-friendly economic reforms and relatively low taxes.

Then the country turned hard left, raises taxes to absurd levels, before swinging back somewhat.

Taxes still remain high in the Nordic nations, particularly in Denmark and Sweden. The high tax pressures create high costs for the societies. A report recently published by the European Central Bank finds that both Denmark and Sweden are on the tip of the Laffer curve when it comes to both taxes on income and on capital. This means that capital taxes are so damaging that reducing them by one Kronor would stimulate the economy to grow, so that more than one Kronor in additional taxation could be levied (at the lower tax level). Many entrepreneurs relocate their businesses to other countries in order to avoid Sweden’s high taxes. Skype, for example, was founded by a Dane and a Swede, but they chose to startup in free-market oriented Estonia, and later move the ownership to another free-market oriented nation, Luxembourg.

So how come the Nordic nations are so prosperous? A key reason is that they, particularly since the 1980s, have compensated for high tax regimes by implementing a range of market reforms. These reforms range from Flexicurity — a combination of strategies to provide flexibility for employers and security for workers — in the Danish labor market, to partial abolition of rent-control in Finland, to school vouchers and partial privatization of the pension system in Sweden. Indeed, the Nordic nations have risen sharply in both the Heritage/WSJ and the Frasier Institute indexes of economic freedom over the years.

It is also important to realize exactly why the Nordic nations have been able to implement large welfare states, and what the benefits have been. The cultural and economic systems in the Protestant Nordic nations have historically given rise to very strong norms related to work and responsibility. Coupled with uniquely homogeneous societies, these norms made it possible to implement larger welfare states in the Nordic nations than those in other industrialized countries. Since the norms relating to work and responsibility were so firmly rooted, Nordic citizens were not as likely as other Europeans or Americans to try to avoid taxes or misuse generous public support systems. Also, the “one-solution-fits-all” systems of the welfare state are typically less disruptive in a strongly homogeneous social environment, since most of the population has similar norms, preferences, and income levels.

However, with time the norms have evolved. In the World Value Survey of 1981-84, almost 82 percent of Swedes responded that “claiming government benefits to which you are not entitled is never justifiable”, but in the survey of 1999-2004, only 55 percent held the same belief. It is no coincidence that much of the public policy debate in Norway, Sweden, Denmark and Finland has focused on curbing overutilization of welfare systems.

From “The Local” Sweden’s English language newspaper.

Annika Eriksson, a lunch lady at school in Falun, was told that her cooking is just too good.

Pupils at the school have become accustomed to feasting on newly baked bread and an assortment of 15 vegetables at lunchtime, but now the good times are over.

The municipality has ordered Eriksson to bring it down a notch since other schools do not receive the same calibre of food – and that is “unfair”.

Moreover, the food on offer at the school doesn’t comply with the directives of a local healthy diet scheme which was initiated in 2011, according to the municipality.

“A menu has been developed… It is about making a collective effort on quality, to improve school meals overall and to try and ensure everyone does the same,” Katarina Lindberg, head of the unit responsible for the school diet scheme, told the local Falukuriren newspaper.

However, Lindberg was not aware of Eriksson’s extraordinary culinary efforts and how the decision to force her to cut back had prompted outrage among students and parents.

“It has been claimed that we have been spoiled and that it’s about time we do as everyone else,” Eriksson said.

She insisted, however, that her creative cooking has not added to the municipality’s expenses.

“I have not had any complaints,” she told the paper.

Eriksson added that she sees it as her job to ensure that the pupils are offered several alternatives at meal times.

The food on offer does not always suit all pupils, she explained, and therefore she makes sure there are plenty of vegetables to choose from as well as proteins in the form of chicken, shrimp, or beef patties.

Instead of hiring her to teach the other school cooks to be better, it was easier to compel mediocrity.

UPDATE:

Andrew Stuttaford at The Corner recalls this Kurt Vonnegut short story:

The year was 2081, and everybody was finally equal. They weren’t only equal before God and the law. They were equal every which way. Nobody was smarter than anybody else. Nobody was better looking than anybody else. Nobody was stronger or quicker than anybody else. All this equality was due to the 211th, 212th, and 213th Amendments to the Constitution, and to the unceasing vigilance of agents of the United States Handicapper General.

Some things about living still weren’t quite right, though. April for instance, still drove people crazy by not being springtime. And it was in that clammy month that the H-G men took George and Hazel Bergeron’s fourteen-year-old son, Harrison, away…

Not people, apparently. Raccoons:

The bandit lay curled up in a metal cage, its drowsy expression turning to wariness, then narrow-eyed aggression as Trautmann-Winter approached.

“They look very smart, but I think they are very dangerous,” she said, as the captive hissed and bared its teeth. “And they are a problem for us.”

A big one, it turns out. A species first imported from the United States in the 1930s, Germany’s raccoon population is exploding and encroaching on the human environment more than ever before. That has many residents here up in arms — literally, in the case of hunters strapping on their rifles and heading into the woods to help stem the tide of hungry ring-tailed pests.

But they’re fighting a losing battle. Their furry, fertile and firmly established enemy fills an unoccupied niche in the local ecology, unmolested by natural predators, and has successfully colonized this country in less than a century since arriving from its faraway native habitat.

…

“We’re getting 50 calls a day…. I know of at least 500 raccoon families in the city,” Ehlert said. “They are the most intelligent mammals in Europe. They’re very quick.”

Unlike, say, the French.

The French are going off the deep end. But what about all those feminine and masculine words?

France is set to ban the words “mother” and “father” from all official documents under controversial plans to legalise gay marriage.

The move, which has outraged Catholics, means only the word “parents” would be used in identical marriage ceremonies for all heterosexual and same-sex couples.

The law would also give equal adoption rights to homosexual and heterosexual couples.

The draft law states that “marriage is a union of two people, of different or the same gender”.

It says all references to “mothers and fathers” in the civil code – which enshrines French law – will be swapped for simply “parents”.

Maybe they should all switch to English which has no gender. Sacrebleu!

The French elected a socialist bozo, and surprise, he’s behaving like a clown.

WSJ

For a man who’s staked his presidency on restarting France’s economy, François Hollande seems oddly averse to the stuff that fuels growth. Last week, he announced his government will levy €20 billion in new taxes. Now he says he will not permit hydraulic fracturing for natural gas.

France imports 98% of the natural gas it uses each year. Yet according to U.S. Department of Energy data, the country’s technically recoverable shale gas is second only to Poland’s in Europe, and equal to more than a century’s worth of French gas consumption. Those numbers are still tentative, but the short history of shale-gas exploration suggests preliminary estimates often prove low.

The Hollande government has also been tussling with utilities over the prices consumers pay for gas. The retail price of natural gas is controlled by the state in France, and the utilities have complained that the price increases the government has allowed aren’t sufficient to cover their rising costs. In July, France’s energy regulator agreed. Yet the Hollande government has limited the price rise to 2% anyway. It also promises to expand energy subsidies for consumers.

So the French government could compel utilities to sell at a loss. How’s that for long-term thinking?

Mr. Hollande could have opened the door to a potentially transformative energy opportunity, brought down consumer prices and created a new domestic industry, with all the jobs that go with it. Too bad he once again chose ideology over prosperity.

Apparently Hollande fails to understand the relationship between le supply and le demand.

First, they instituted public school vouchers. Now they’re adopting policies that actually work.

Matt Kibbe in Forbes

The headlines from across the pond read “Europe Rejects Austerity” as the French and Greeks elected socialists and even some neo-national socialists to office. These new officials have promised tax rates as high as 75 percent on millionaires, and have vowed to continue government spending unabashed in the wake of staggering levels of debt and anemic economic growth and persistent double- digit unemployment. However, there is one finance minister in one European nation that is bucking the trend, and, instead of ridicule and failure, he’s been named Europe’s best finance minister by the Financial Times. He’s not from Britain or Germany and certainly isn’t Greek. He isn’t some old fat cat in a suit either. In fact he’s famous for rocking a pretty awesome ponytail and gold earring. His name is Anders Borg and he’s Swedish.

That’s right, the European nation famously stereotyped for having aggressive taxation to fund an omnipresent state has actually decided that in response to the Eurozone crisis and the continued effects of the global economic downturn, or “Great Recession”, that it’s time to ease up on taxes and reduce the size of government. While Sweden is not technically in the Eurozone, as it does not use the Euro as currency, it has been drawn into the financial mess of the Eurozone by sheer proximity. Unemployment in 2011 was north of 7.5 percent and GDP growth was anemic at .4 percent projected for 2012.

While the rest of Europe and the United States have gone on massive spending sprees fueled by government borrowing and tax hikes, Sweden took a different approach. In the Spring 2012 Economic and Budget Policy Guidelines, the Swedish Government and its Finance Minister, Anders Borg, have laid out a plan that is focused on lowering taxes. Their rationale? “When indviduals and families get to keep more their income, their independence and their opportunities to shape their own lives also increase.”

Borg also wants to lower the corporate tax rate as a way of meeting the government’s goal of “full employment”. The government has already cut property taxes and other luxury taxes on the rich to lure investors and entrepreneurs back to Sweden. The government has also slashed spending across the board, including on the welfare programs that used to be Sweden’s claim to fame. They’ve also installed caps on annual government expenditures: real and enforceable limits that the Swedes believe are pivotal to economic stability. They explain in their Policy Guidelines that “the expenditure ceiling is the Government’s most important tool for meeting the surplus.” Imagine that, a government that stays within its limits. So why didn’t Sweden hop on the stimulus bandwagon like the U.S. and much of Europe?

Anders Borg explains, “Look at Spain, Portugal or the UK, whose governments were arguing for large temporary stimulus… Well, we can see that very little of the stimulus went to the economy. But they are stuck with the debt.” We have now seen that attempts at austerity within the Eurozone have met a similar fate: none of it was serious. As spending increases have been squandered, spending cuts have been a charade, failing to target the big government programs at the core of the debt crisis. So Anders Borg and the Swedish Government have undertaken an economic and budget plan that slashes taxes and (more…)

Fools run France. We have fools here who will do the same if they get the chance.

Lucas Leger in the WSJ

Earlier this month PSA Peugeot Citroën announced it would shutter an assembly line in Aulnay-sous-Bois, north of Paris. Citing its high labor costs and sharp international competition, the company warned that some 8,000 jobs in France would have to go. Both President François Hollande and Minister of Industrial Renewal Arnaud Montebourg declared the decision to be “unacceptable.”

“The State won’t let it happen,” Mr. Hollande told a French television interviewer after Peugeot’s announcement.

The main tactic so far has been to publicly rebuke Peugeot’s management as “cheaters,” with Hollande officials now accusing the company of concealing or even lying about its labor costs. Simultaneously, the Élysée is proposing some €600 million in new subsidies for French-made hybrid and electric cars, while Mr. Montebourg rails against “unfair competition” from South Korea and vows to review the EU’s 2010 free-trade deal with Seoul.

The Hollandites are making some progress, sort of. Peugeot CEO Philippe Varin has now promised that “there will be no forced layoffs and that we will do what is necessary to reindustrialize the Aulnay site.” Workers who voluntarily retire will receive generous buyout packages. Naturally, that’s still not good enough for the unions, which have organized strikes to show their contempt…

Such policies end in disaster. Even the Red Chinese figured this out.

Academic Robert Zaretsky, in an LA Times op-ed, argues that the French have a more sophisticated view of liberty.

For many Americans, the liberty tree would shrivel and die in France’s tax-soaked, socialist soil, tended by a powerful state. Why is it, we wonder, that the bumpers of Peugeots and Renaults are not festooned with “Take France Back” stickers?

After all, like the English colonists, French revolutionaries were rebelling against monarchical despotism. The rubble-strewn space they left where the Bastille prison once stood reflected this newfound sense of “negative” liberty: It was freedom from. From arbitrary rule, from invasive institutions, from hereditary privilege. They were free, in short, from being thrown into the Bastille on the whim of a nobleman.

But, as it turned out, the French also wanted freedom from material insecurity, want and illness. During the revolution there also surged a “positive” understanding of liberty, most powerfully expressed by Jean-Jacques Rousseau, and based on the notion of the common good. By obeying the general will, individuals merge their particular, personal interests with those of others. Only on such foundations are men and women able to fully realize freedom. Here, the French became free to. To work with others, to commit to a greater good, to sacrifice their individual desires in order to achieve something bigger and better.

That sounds good until you ask, who will pay for it? The entire European social model is coming apart because there is no free lunch — Europe is slowly going broke.

Are French citizens committed to a “greater good” or are they just spoiled, entitled clients of a nanny state?

Well, they rioted when the retirement age was raised from 60 to 62, then elected a socialist who put it back to 60. Gimme gimme gimme.

In their comfy, cozy nation, are they procreating? Not in sufficient numbers to support their welfare state. You’d think in utopia folks would eagerly bring new babies into the world to share the joy.

In August 2003, 14,802 French citizens died in a heat wave, most of them elderly. Many were alone in their apartments, ignored by their neighbors who assumed the government would take care of the problem.

One for all and all for me!

Contrast that with Hurricane Katrina, a storm the size of England, death toll 1833.

While the news media obsessed over the failures of the federal government (a way to batter Bush while ignoring the more significant incompetence of the state and local government), it ignored a fabulously successful rescue story.

Lou Dolinar wrote:

…Do you remember the dramatic TV footage of National Guard helicopters landing at the Superdome as soon as Katrina passed, dropping off tens of thousands saved from certain death? The corpsmen running with stretchers, in an echo of M*A*S*H, carrying the survivors to ambulances and the medical center? About how the operation, which also included the Coast Guard, regular military units, and local first responders, continued for more than a week?

Me neither. Except that it did happen, and got at best an occasional, parenthetical mention in the national media. The National Guard had its headquarters for Katrina, not just a few peacekeeping troops, in what the media portrayed as the pit of Hell. Hell was one of the safest places to be in New Orleans, smelly as it was. The situation was always under control, not surprisingly because the people in control were always there.

From the Dome, the Louisiana Guard’s main command ran at least 2,500 troops who rode out the storm inside the city, a dozen emergency shelters, 200-plus boats, dozens of high-water vehicles, 150 helicopters, and a triage and medical center that handled up to 5,000 patients (and delivered 7 babies). The Guard command headquarters also coordinated efforts of the police, firefighters and scores of volunteers after the storm knocked out local radio, as well as other regular military and other state Guard units.

Jack Harrison, a spokesman for the National Guard Bureau in Arlington, Virginia, cited “10,244 sorties flown, 88,181 passengers moved, 18,834 cargo tons hauled, 17,411 saves” by air. Unlike the politicians, they had a working chain of command that commandeered more relief aid from other Guard units outside the state. From day one.

It’s worth reading the whole thing.

Bret Stephens:

When is an economic crisis more than just an economic crisis? When is it also a political crisis? And when is it something else altogether: social, demographic, institutional, moral, intellectual—in short, civilizational?

The euro zone’s troubles shouldn’t be difficult to understand: Pair overspending governments with over-regulated economies and sooner or later the Continent was bound to lose the confidence of the markets.

Normally, such a crisis could be resolved by slashing corporate and marginal tax rates and red tape in order to encourage investment, enterprise and risk-taking. Instead, European policy makers have pursued every conceivable fix, from serial bailouts to a banking union, in order to circumvent having to address the core problems. As a result, the crisis continues to worsen: In Spain, for instance, bank-deposit flight has only gathered pace since last month’s $125 billion bank bailout.

So Europe’s predicament is more than just economic. What about the politics? Why can’t Europe’s leaders just tackle the problems the way Margaret Thatcher did in the 1980s, under the clarifying banner, “There is no alternative”?

It’s not as if voters are giving politicians a pass, having thrown out incumbents from Athens to Dublin. Nor is it that the “wrong” parties are in power: The French just installed a Socialist in the Élysée, but Spain and Greece have elected conservatives and Italy’s prime minister is a nonpartisan technocrat.

Yet François Hollande, Mariano Rajoy, Antonis Samaras and Mario Monti are guaranteed failures, just like the men they replaced. This partly reflects the men themselves.

But it mainly reflects the ideological assumptions they share, the pan-European institutions in which they operate and the electorates they represent—that is, the totality of contemporary European civilization. European leaders will not cure what ails their economies because the people who voted them into office are addicted to what ails those economies.

In other words, they are addicted to entitlements. These aren’t only the entitlements as most Americans understand them, from Social Security to food stamps and corporate welfare. It’s also “free” medical care, “free” university education, 35-hour work weeks, guaranteed vacations, de facto job tenure. Try to modify any of this, as various European leaders have discovered in recent years, and you’ll have mass demonstrations, crippling strikes and old-fashioned rioting.

With the exception of Mrs. Thatcher during the coal miners’ strike of 1984-85, no modern European leader has been able to stand up to the pressure. That’s a testament to the Iron Lady’s political guts, and to the gutlessness of would-be reformers like Jacques Chirac and Silvio Berlusconi.

Mainly, however, it’s a testament to the zombifying power of entitlements. It’s sometimes said that modern Europeans aren’t willing to fight for anything anymore. But that’s not true: Every time an entitlement is even slightly at risk—whether it’s raising the retirement age to 62 from 60 in France or tinkering with the legal architecture that guarantees jobs for life in Italy—Europeans go right to the barricades.

That’s not just because they are defending a financial benefit. They are also defending a way of being and a state of mind: a conviction that it’s up to somebody else to provide for their well-being; a terror of what might happen should that somebody else fail to provide…

That’s French for “no free lunch.” (At least I hope so — Google did my translation.)

The spoiled French brats who just elected the socialist are soon to be reacquainted with reality.

Having been in power for less than two months Francois Hollande is facing the first major test of his pro-growth election (related: 10 Game-Changing Elections) commitments after a warning from the national audit office that France’s economy is in the “danger zone” and risks falling into a “debt spiral.”

Late on Monday the national audit office said the French budget deficit will overshoot by 6-10 billion euros ($7.56-12.6 billion) this year and by 33 billion euros in 2013. In order to bring the budget in-line with EU rules, Hollande is going to have to make difficult decisions on spending and taxes that could draw criticism from his own party and unions who supported the pro-growth message that saw him beat Nicolas Sarkozy to the presidency in May.

“The country is in the danger zone in terms of its economy and public finances. We cannot rule out the possibility of a debt spiral,” Didier Migaud, head of the Court of Auditors said in a news conference reported by Reuters. “2013 is a crucial year. The budgetary equation is going to be very hard, much harder than expected due to the worsening of the economic picture.”

Native German Philip Oltermann in the UK Guardian, tries to explain the German sense of humor.

…On New Year’s Eve 1972, NDR, northern Germany’s regional television channel, screened the sketch at 6pm, and something clicked. In fact, something amazing happened: Germany fell utterly in love with it. People put down their plates of potato salad and left their frankfurters to cool; entire parties huddled around the television set. The following year, each of the regional channels showed Dinner for One at 6pm, and a few showed a repeat four hours later. Since 1963, the sketch has been screened 231 times to German audiences, making it the most repeated show on German television, and, according to the Guinness Book of World Records, the most popular show in TV history. In 2004, 15.6 million Germans watched it.

[You can watch the sketch referred to below here. The intro is in German, but the rest is English.]

The sketch is called Dinner for One, and it is easily described. The curtain opens on butler James laying a lavish dinner table. The lady of the house, Miss Sophie, wearing an elegant evening dress, descends a flight of stairs, and sits at the head of the table. We soon realise that it is her 90th birthday, and that something is not quite right. “Is everybody here?” Miss Sophie asks. “They’re all here waiting, Miss Sophie, yes,” James says, gesticulating towards the empty seats around the table. “Sir Toby?” Sophie asks. “Sir Toby is sitting here,” James says, patting the back of the chair on Miss Sophie’s right, and continues to assign seats to the imaginary guests named by his mistress: “Admiral von Schneider”, “Mr Pommeroy” and “my very dear friend, Mr Winterbottom”.

The evening continues in this vein. James serves four courses: mulligatawny soup, haddock, chicken and fruit. With each, Miss Sophie requests a different drink: first sherry, then white wine, then champagne, then port. In the absence of any actual people around the table, James impersonates the different guests and toasts the host on their behalf. With each course, James’s walk becomes less stable, his tour around the dining room more haphazard.

Much of the comedy in Dinner for One is slapstick, knockabout stuff: James spills wine, drops food, crashes into furniture and downs the water in the flower vases instead of what’s in the port glasses. But the most memorable comic moment in the sketch is verbal. Before each change of wine, James stops short: “By the way, the same procedure as last year, Miss Sophie?” The mistress of the house looks accusingly at her servant: “The same procedure as every year, James.” At the end of the sketch, Miss Sophie decides to retire to her bedroom. James, now completely drunk, offers his arm. For a final time, there is the catchphrase – but this time, the effect is different: “Same procedure as last year, Miss Sophie?”

“Same procedure as every year, James.”

“Well, I’ll do my very best.”

As he is dragged offstage, James winks at the audience, baring his gappy teeth for a Cheshire-cat grin.

Originally scripted by the variety playwright Lauri Wylie in the 1920s, Dinner for One, also known as The Ninetieth Birthday, used to be a staple in the music-halls of seaside resorts from Blackpool down to Brighton: a very British kind of pleasure. Very British, that is, until German TV show host Peter Frankenfeld and director Heinz Dunkhase watched the sketch at Blackpool’s Winter Gardens in August 1962. Straight after the show, Frankenfeld convinced the two performers – veteran comic Freddie Frinton and 72-year-old May Warden – to record their act for German TV, even though it took the show almost another 10 years to find an audience there.

On New Year’s Eve 1972, NDR, northern Germany’s regional television channel, screened the sketch at 6pm, and something clicked. In fact, something amazing happened: Germany fell utterly in love with it. People put down their plates of potato salad and left their frankfurters to cool; entire parties huddled around the television set. The following year, each of the regional channels showed Dinner for One at 6pm, and a few showed a repeat four hours later. Since 1963, the sketch has been screened 231 times to German audiences, making it the most repeated show on German television, and, according to the Guinness Book of World Records, the most popular show in TV history. In 2004, 15.6 million Germans watched it.

I grew up in the north of Germany and know Dinner for One practically by heart. The first time I watched it I was five – it must have been either the first New Year’s Eve that I was allowed to stay up late, or the first time I actually had the stamina to. Through my teens, the sketch stayed with me and continued to reveal new layers of interest: when puberty stirred, the double entendre of the line “Same procedure as every year” mystified me. “I’ll do my very best.” Best what? He didn’t mean that, did he? They’re so … old. And if so, where? And how? And for how long? The ambiguity drove me insane. Perhaps the fact that Dinner for One dealt in such universal taboo subjects as sex between the elderly accounted for some of its cult status. But then why was the sketch so particularly popular in Germany?

One reason might be that there is so little talking in the film. By wooing the audience for laughs with physical gestures rather than words, the sketch managed to tap into a specifically German distrust of language – the same mindset that had made it the natural home of silent cinema in the 1920s.

Spike Milligan famously said that “the German sense of humour is no laughing matter”, and it will take time to shift that cliche: a poll last year revealed the Germans are still considered the unfunniest nation in the world. Of course, it’s not as simple as that: it’s just that German comedy speaks its own language. Even today, most comedy in Germany is generally more physical and knockabout than in Britain, though this is not to say that it is all as crude and basic as a Benny Hill sketch.

I was reared on a wide range of comic acts: at one end of the spectrum was Otto Waalkes, a modern version of the circus clown, with oversized dungarees, a bald pate, a trademark bunny-hop walk and goofy laughter. At the other end was the late Vicco von Bülow, better known as Loriot: a more subtle act, whose sketches were usually set in the socially awkward realm of the upper middle class, a world of fine dining, book clubs and boardroom meetings. And yet the core of Loriot’s act was essentially physical. One of the most popular Loriot sketches is reminiscent of Dinner for One: a couple are at a table in a restaurant, eating soup; the man noticeably nervous. As he wipes his mouth with his napkin, a noodle gets stuck on his chin. The woman tries to point this out, but the man interrupts her. For the rest of the sketch, the rogue noodle travels from his chin to his finger to his forehead to his earlobe. The comic effect is heightened by the fact that the man is trying to have a serious conversation about their relationship, but the popularity of the sketch is essentially all down to the noodle.

German humour’s reliance on the physical is not just apparent on television, but also in the way Germans act on a day-to-day basis. After or before they have made a joke, many Germans will make a physical gesture to signpost their intention: sometimes just an expressively raised eyebrow, sometimes something more emphatic. Not for nothing are jokes also known as Schenkelklopfer, “thigh-slappers”.

The decorum of English joking couldn’t be more different. When I first moved to London in 1997, and the boys at my school made jokes, there was nothing in their body language to demonstrate it – no funny voice, no grimacing, no slapping of thighs. Particularly in my first year, I was caught out innumerable times by this. There was the vocabulary test that my classmates had warned me about that never happened, the boy who said his father was the prime minister who wasn’t, the teacher who said he had been drafted into the Oxford and Cambridge boat race at the last minute who hadn’t. They had all told blatant lies without raising an eyebrow. Deadpan joke-telling seemed to come from the same mentality as the British art of understatement: the point was that you would by all means avoid making an outward show of what was going on inside your head…

Today’s Wall Street Journal has an astonishing column written by Hannes Swoboda, a member of the European Parliament.

Europe Can Spend Its Way to Growth

…The Merkel dogma “Yes to growth, but no to debt” can only be understood as a polemic, an ideological statement. Because it makes no sense for the economy or for society.

Should companies that seek to grow not be allowed to take out loans anymore? Should states, in order to fight recession and unemployment, not assume debt? If that is the line of argumentation, what can possibly be the result of Wednesday’s informal summit on European growth?

I’m no economist, but I can distinguish between a private company borrowing in order to grow and a government borrowing to spend.

Private enterprise creates wealth. Government spends wealth created by private enterprise.

When the government borrows to fund its deficits, it sucks up capital that could have created wealth.

(Yes, government spending can help business by becoming its customer, but long-term this is a perpetual motion machine — an unsustainable fantasy.)

Hannes continues:

In view of the rising levels of debt compared with gross domestic product in most European countries, we must take stock of the disastrous effects of the one-sided austerity politics and also recognize their antisocial character, proven by record unemployment figures. The collapse of some governments—notably in France and Greece—and the increasing strength of extremist parties further demonstrate the political danger. How many more facts does it take to end these austerity policies?

Austerity in France was defined by some as raising the retirement age from 60 to 62. Greece is another story altogether.

Here is Michael Lewis, author of The Blind Side, Moneyball and other good books, on the Greeks.

..As it turned out, what the Greeks wanted to do, once the lights went out and they were alone in the dark with a pile of borrowed money, was turn their government into a piñata stuffed with fantastic sums and give as many citizens as possible a whack at it.

In just the past decade the wage bill of the Greek public sector has doubled, in real terms—and that number doesn’t take into account the bribes collected by public officials. The average government job pays almost three times the average private-sector job. The national railroad has annual revenues of 100 million euros against an annual wage bill of 400 million, plus 300 million euros in other expenses. The average state railroad employee earns 65,000 euros a year. Twenty years ago a successful businessman turned minister of finance named Stefanos Manos pointed out that it would be cheaper to put all Greece’s rail passengers into taxicabs: it’s still true. “We have a railroad company which is bankrupt beyond comprehension,” Manos put it to me. “And yet there isn’t a single private company in Greece with that kind of average pay.”

The Greek public-school system is the site of breathtaking inefficiency: one of the lowest-ranked systems in Europe, it nonetheless employs four times as many teachers per pupil as the highest-ranked, Finland’s. Greeks who send their children to public schools simply assume that they will need to hire private tutors to make sure they actually learn something. There are three government-owned defense companies: together they have billions of euros in debts, and mounting losses.

The retirement age for Greek jobs classified as “arduous” is as early as 55 for men and 50 for women. As this is also the moment when the state begins to shovel out generous pensions, more than 600 Greek professions somehow managed to get themselves classified as arduous: hairdressers, radio announcers, waiters, musicians, and on and on and on. The Greek public health-care system spends far more on supplies than the European average—and it is not uncommon, several Greeks tell me, to see nurses and doctors leaving the job with their arms filled with paper towels and diapers and whatever else they can plunder from the supply closets.

Ace of Spades:

Perfect Gaul: Obama Advises French Not To End Austerity Measures (???)

Austerity abroad, profligacy at home?

I can’t wait for the French’s response.

President Obama’s spokesman warned the new socialist president-elect of France not to implement his campaign agenda of ending austerity measures, indicating that such a reversal could damage the world economy….

President-Elect Francois Hollande called for an increase in government spending and taxes.

So France’s new socialist President is looking for higher taxes and government spending — which is Obama’s plan for America. And he tells them they shouldn’t do that, because it will damage the world economy?

I think Obama senses several interrelated dangers here.

If France crashes, it offers America a preview of where Obama’s policies will take us, so he… doesn’t want France to implement Obama’s policies. He doesn’t want that heads up. Not before the election.

In addition, of course, a second official recession would just about wrap things up for Romney.

In 2010, the French government under Sarkozy increased the retirement age from 60 to 62 and this is what happened:

Like spoiled children who’ve been promised the moon by successive governments, their reaction was  a public tantrum.

The tantrum climaxed Saturday when they elected a socialist who promises to keep the good times rolling by increasing government spending — money borrowed from future generations — and by taxing the rich. (Sound familiar?)

Tim Cavanaugh at Reason writes:

Hollande has promised to raise income tax rates from 41 percent to 75 percent. He has also pledged to accelerate the departure of French troops from Afghanistan. His election comes at a time when unprecedented levels of public debt coupled with work-averse political cultures are threatening to break up of the eurozone.

The problem with gouging the rich is they can move themselves, and their money, elsewhere.

Rob Long

…something new may be happening to the beleaguered French entrepreneurial and investor class. From today’s Financial Times:

Wealthy French people are looking to London as a refuge from fresh taxes on high earners pledged by candidates in the country’s presidential elections.

The “soak the rich” rhetoric that has punctuated the presidential campaign has prompted a sharp rise in the numbers weighing a move across the Channel, according to London-based wealth managers, lawyers and property agents specialising in French clients.

And if you switch some of the countries around, is this a preview of coming attractions for American high-earners?

The departure of France’s business people, entrepreneurs and the young for opportunities overseas is not a new phenomenon. When Nicolas Sarkozy visited London in 2007 he called for its French residents to return to a reformed France under his presidency. But the trend has been accelerated by the growing possibility of a Socialist victory in Sunday’s decisive second round of the presidential election.

Mr Blanc says some French clients were even contemplating acquiring British or other nationality in order to safeguard assets from fears that France could move to collect more tax from citizens overseas. “A lot of people are extremely worried,” he said.

As Margaret Thatcher aptly noted: “The problem with socialism is that eventually you run out of other people’s money.”

France’s Socialist presidential frontrunner Francois Hollande said on Saturday he was expecting a wave of lay-offs to follow next weekend’s election, but pledged his government would not stand idly by as companies dismissed their workers.

Hollande is on track to win the May 6 runoff against President Nicolas Sarkozy, due largely to the conservative leader’s failure to meet promises to lower stubbornly high unemployment in the euro zone’s second largest economy.

So he plans to force companies to keep employees they cannot afford?

Who will make up the companies’ losses to their stockholders?

Who will buy the French products that will become more expensive?

Is this the French way, to take money from one pocket and put it in another?

So it seems.

Mark Steyn on the rise of anti-Semitism in Europe

…If the flow of information is really controlled by Jews, as the Reverend Jeremiah Wright assured his students at the Chicago Theological Seminary a year or two back, you’d think they’d be a little better at making their media minions aware of one of the bleakest stories of the early 21st century: the extinguishing of what’s left of Jewish life in Europe. It would seem to me that the first reaction, upon hearing of a Jewish school shooting, would be to put it in the context of the other targeted schools, synagogues, community centers, and cemeteries. And yet liberal American Jews seem barely aware of this grim roll call.

…Here’s Toulouse rabbi Jonathan Guez speaking to the Jewish news agency JTA in 2009: “Guez said Jews would now be ‘more discreet’ about displaying their religion publicly and careful about avoiding troubled neighborhoods. … The synagogue will be heavily secured with cameras and patrol units for the first time.”

This is what it means to be a Jew living in one of the most beautiful parts of France in the 21st century.

Well, you say, why are those Jewish kids going to a Jewish school? Why don’t they go to the regular French school like normal French kids? Because, as the education ministry’s admirably straightforward 2004 Obin Report explained, “En France les enfants juifs — et ils sont les seuls dans ce cas — ne peuvent plus de nos jours être scolarisés dans n’importe quel établissement”: “In France, Jewish children, uniquely, cannot nowadays be provided with an education at any institution.” At some schools, they’re separated from the rest of the class. At others, only the principal is informed of their Jewishness, and he assures parents he will be discreet and vigilant. But, as the report’s authors note, “le patronyme des élèves ne le permet pas toujours”: “The pupil’s surname does not always allow” for such “discretion.”

Metropolitan Toulouse has a population of 900,000 or so, about the size of Jacksonville, Fla. Imagine if, in Jacksonville, synagogues were firebombed, and kosher butchers shot up, and Jewish schoolkids gunned down, and, in the dull, placid months between the spasms of front-page attention, the cold, ongoing Jew-hate were so routine that it was no longer safe for a Jew to walk his own city with any identifying mark of his faith, or for his child to reveal his Jewishness at school.

In Toulouse, much of the Jewish community arrived after the religio-ethnic cleansing of French North Africa in the Sixties and Seventies. What they fled has followed them to the Midi-Pyrénées, and now it’s time to move on again — as it is elsewhere in Europe. “Jews with a conscience should leave Holland, where they and their children have no future, leave for the U.S. or Israel,” advised Frits Bolkestein, the former EU commissioner and head of the Dutch Liberal party. “Anti-Semitism will continue to exist, because the Moroccan and Turkish youngsters don’t care about efforts for reconciliation.”

Thus, posterity’s jest. Pre-war Europeans would never have entertained for a moment the construction of mosques from Malmö to Marseilles. But post-war Holocaust guilt, and the revulsion against nationalism and the embrace of multiculturalism and mass immigration, enabled the Islamization of Europe. The principal beneficiaries of the Continent’s penance for the great moral stain of the 20th century turned out to be the Muslims — with the Jews on the receiving end, yet again.

It won’t stop there. Mijnheer Bolkestein is not (yet) asking what else those “youngsters” don’t care for, but like many other secular Continentals with no interest in Jews one way or the other he’ll soon find out.

From theWSJ’s Notable and Quotable:

Since becoming Sweden’s finance minister, [Anders Borg's] mission has been to pare back government. His “stimulus” was a permanent tax cut. To critics, this was fiscal lunacy—the so-called “punk tax cutting” agenda. Borg, on the other hand, thought lunacy meant repeating the economics of the 1970s and expecting a different result.

Three years on, it’s pretty clear who was right. “Look at Spain, Portugal or the UK, whose governments were arguing for large temporary stimulus,” he says. “Well, we can see that very little of the stimulus went to the economy. But they are stuck with the debt.” Tax-cutting Sweden, by contrast, had the fastest growth in Europe last year, when it also celebrated the abolition of its deficit. The recovery started just in time for the 2010 Swedish election, in which the Conservatives were re-elected for the first time in history. . . .

“It was surprising that Europe, given what we experienced in the 1970s and 80s with structural unemployment, believed that short-term Keynesianism could solve the problem.” Non-economists, he says, “might have a tendency to fall for those kinds of messages.”

Germans have been living large for a long time.

Conservatives have long said that the German social welfare state was unsustainable. Liberals have long been intent on emulating it (Obama still is).

Guess who was right.

GERMANY is proposing to levy extra taxes on the young to pay for the costs of the country’s growing numbers of old people, under government plans for a ”demographic reserve” levy.

Angela Merkel’s Christian Democrats have drafted proposals that, if law, would require all those over 25 to pay a proportion of their income to cushion Germany against a looming population crisis.

The German Chancellor’s ruling party is seeking extra sources of revenue to pay for soaring pensions and bills for social care costs as Germany’s ”baby boomer” generation ages amid a decline in the birth rate.

The proposals, to be adopted by Dr Merkel’s party cabinet after the Easter break, have not yet set a figure on the age tax but officials are considering a special levy of about 1 per cent of income.

So, in the land of so much plenty, the German fertility rate is 1.41 (it takes 2.1 to remain even).

Now the grandkids without siblings will be taxed to pay for their parents’ lack of fertility.

Like all pyramid schemes, the first in reap the rewards, the last are suckers.

Andrew Breitbart did not mislead anyone about Shirley Sherrod, no matter what the obituaries say.

Scientific American:

Drilling at Poland’s first shale gas exploration well using the controversial technique known as fracking has not harmed the environment, according to a government study published on Friday.

Stone-age Europeans were the first to get to North America.

Obama’s car of the future temporarily halts production. He’s planning to drive one once he gets out of the White House, he says.

Welfare reform worked, says LAT oped. That’s not exactly news, as the ten year anniversary stories made clear.

The Other GM Bailout: $18 billion in tax breaks

Times are tough for the EU.

Christopher Caldwell, writing in The Weekly Standard, explains why.

…The EU was launched in the wake of the Second World War as a way to organize Europe through economics, not war. This is a polite way of saying it was meant to keep Germany from dominating Europe with its army. A decade ago, the EU acquired a common money, the euro, which replaced the franc, the lira, the peseta, and the super-strong deutsche mark. The new monetary regime was meant to keep Germany from dominating the continent with its currency.

But the euro has backfired. In 1990 British trade secretary Nicholas Ridley was forced to resign for calling the EU “a German racket designed to take over the whole of Europe.” Ridley was quite wrong about Germany’s intentions, but he was right about the result. Joining Germany in a currency union meant playing by its rules. In fact, so big and rich is Germany—particularly now that reunification has brought its population to 80 million—that joining it in anything means playing by its rules. This is not Germany’s fault. It is the classic “German problem” that has confronted Europe for the whole modern era. It was camouflaged for six decades only by Germany’s reluctance to express any wishes whatsoever.

As long as Germany wasn’t complaining, others could make free with Germany’s credit card. Once in the euro, Greece, Italy, Spain, and other countries that bankers used to consider reckless or unstable could borrow at the same rates. (The treaties that bound all these dissimilar countries together stipulated that there would be no bailouts for those who borrowed too much, but bankers obviously didn’t believe that.) A boom in lending pushed up wages and prices in those “peripheral” countries, rendering them uncompetitive. After the financial crisis of 2008, the countries that had overborrowed were saddled with more debt than they could comfortably repay. The eurozone’s Mediterranean members have come to think that Germany ought to rescue them. But the Germany to which they are addressing their petitions is not the penitent, diffident, and easily browbeaten land that they came to know over the last three generations. Germany has its own ideas about economics and morality, and it is ready to insist that its weaker neighbors adhere to them.

Germany is different because Germans are different, almost old-fashioned in their work ethic and attitude toward credit.

Credit is frowned on. There are quite elegant restaurants that don’t take credit cards, and installment buying in general has been slow to take hold. Walmart tried to expand into Germany in recent years but had to close all 85 of its stores in 2006. Germans didn’t take to the faux-smiley demeanor of Walmart’s employees, and the company found it hard to keep prices low while complying with national labor laws. The car loan market is underdeveloped. Home equity loans are practically unknown. That is one reason why Germany had no mortgage bubble of the sort that upended so many Western economies over the last decade. Another is that Germany does not really have an investment banking sector as we would understand it.

Germans usually explain their eccentricities about credit by referring to the hyperinflation with which their leaders tried to mitigate the burden of reparations from World War I. Germany’s treasury printed so much money that, in 1923, prices were quoted in the trillions of marks, shoppers pushed their shopping money around in wheelbarrows, and restaurant menus were edited hourly. That inflation, and the austerity required to purge it, may have played a role in the rise of Hitler.

Germans associate their emergence from the rubble of World War II, by contrast, with the deutsche mark, the currency set up under American military rule, and the Bundesbank, the conservative, incorruptible, and coldly competent institution established to preserve its value. Bundesbank presidents were revered figures, more often than not at loggerheads with the elected chancellors they served. And they cast their shadow over German democratic politics, according to Klaus-Dieter Frankenberger, foreign editor of the Frankfurter Allgemeine Zeitung. “You don’t advance your electoral prospects by loosening the tap of monetary policy,” Frankenberger said this fall.

The German public was dragged into the euro reluctantly and would never have consented to it had they been consulted. “The euro has always been the ‘Golden Calf,’ so to speak,” says Barclays’s economist Thorsten Polleit. “It was forced upon Germans.” There is still a lot of debate about how it was forced upon Germans. The most common explanation is that French president François Mitterrand insisted on the euro as a condition of Germany’s reunification. A number of Germany’s top politicians and economists assured citizens that the new currency would hold prices stable. That turned out to be right. They also promised that this would not mean sharing wealth and bailing out laggards. That turned out to be wrong—and perhaps catastrophically, apocalyptically wrong…

Read the whole thing.