Posts Tagged ‘PIIGS’
Sunday, January 25th, 2015
Greece’s far left-wing Syriza Party has won a big victory there, claiming about half the seats in Parliament.
What does it mean? I took a stab at analyzing it before. Even with a majority, there’s a good chance Syriza will have to continue meeting the EU’s demands (which means pretending to impose austerity measures) if they want mean old Aunt Angela to keep loaning them money. Remember: Greece has never practiced real austerity. Not once since the European Debt Crisis hit has Greece balanced its budget, and its deficit for 2014 was 12.2% of GDP.
But even the fake austerity imposed has been too much for the Greek people, who collectively want a cushy welfare state but don’t want to pay the sky-high taxes required to pay for it. Promising people something for nothing has been the left’s popular electoral strategy for more than a century, but reality can only be held off for so long. Germany is not due for a federal election, so it’s entirely possible Merkel might still underwrite another bailout or two if Syriza is willing to continue the farce. A Greece shorn of the Euro would still be broke and badly in debt, and newly Drachma-backed securities would likely be toxic investments for all but the most speculative of bond traders. (Perhaps Syriza should investigate how well that printing money thing is working out for Venezuela.) “Forgive our debts or we won’t let you give us more loans!” is a proposition Merkel would probably find quite easy to refuse, and I suspect the risk of a Greek exit from the Euro is already priced into European markets. If Syriza insists on anything more than (possibly) a token debt haircut, the EU will probably be willing to call their bluff.
It’s generally best for the driver of a 1974 Ford Pinto to avoid engaging in a game of chicken with a Tiger tank…
Tags:Angela Merkel, European Debt Crisis, Foreign Policy, Germany, Greece, PIIGS, socialism, Syriza, Welfare State
Posted in Budget, Communism, Foreign Policy, Welfare State | No Comments »
Monday, December 29th, 2014
Just because the European Debt Crisis hasn’t been in the headlines much as of late doesn’t mean it’s gone away.
Greece’s government has fallen again and they’ll be holding general elections next month. “Opinion polls point to a victory by the radical leftist Syriza party, which wants to wipe out a big part of Greece’s debt, and cancel the terms of a bailout from the European Union and International Monetary Fund that Greece still needs to pay its bills.”
The problem is that Greece wants to continue spending other people’s money to prop up a bankrupt welfare state, and the rest of Europe has decided they would really prefer to stop pouring money down that particular rathole. Syriza is against “austerity,” which is to say they oppose the Greek government even pretending to practice fiscal restraint. Because pretending is all they’ve done.
Remember, real austerity is reducing outlays until they match receipts. All those “austerity” street protests were over lowering Greece’s budget deficit from 9% of GDP to 7.5% of GDP. The rest of Europe didn’t ask them to stop digging their own grave, they just asked them to dig more slower. And this year, Greece’s budget deficit stood at 12.2% of GDP. Evidently even fake austerity is too much to ask of them; even the illusion of fiscal restraint is intolerable. This is why all news that Greece has “balanced” next year’s budget should be taken with several grains of salt.
So we’ll see another election, and if Syriza wins we’ll see another round of demands for more bailouts and debt writedowns, with Greece threatening yet again to exit the Euro. We’ve seen this movie before. The most likely outcome is that another cabal of EU-phillic insiders in the Greek government will engineer a last-minute cave-in to demands from Brussels and Frankfurt, ram another toothless austerity measure through parliament in exchange for still more credit (and perhaps even a small symbolic measure of debt forgiveness), dissolve the government again following the inevitable public outrage, then have the Greek bureaucracy ignore even those woefully inadequate reforms, setting the stage for the farce to repeat itself in another 12-18 months, or until mean old Aunt Angela finally cuts up the credit card.
Europe has had several years to acclimate itself to the fact the Greece might exit the Euro, and the possibility of a “grexit” has been priced into the markets for some time now. I do not pretend to understand the intricacies of the European banking system, but my impression is that much of the “stress testing” of European banks this year was to prepare for one or more of the PIIGS leaving the Euro. I suspect that the European elite have minimized their own exposure to a Greek default (which is really all they care about), and that the EU and the European Central Bank has found new, sneaky ways to put taxpayers on the hook for any possible sovereign defaults, strengthening the banking system without addressing Europe’s long-term economic problems (unsustainable levels of debt to support cradle-to-grave welfare states for shrinking populations).
It would be great if Greece actually undertook real structural reforms of their bloated, dysfunctional government, but I see precious little evidence that they’ve actual done so. Expect more pain ahead, and at least one more bailout…
Tags:Budget, Economics, Euro, European Central Bank, European Debt Crisis, Foreign Policy, Greece, PIIGS
Posted in Budget, Economics, Foreign Policy | 1 Comment »
Wednesday, January 29th, 2014
Lots of news from around the world, where the global economy is handing like a Kia that’s just started losing traction on an icy hill:
Bundesbank: Don’t look at us, broke PIIGS, you’re going to have to screw your own people.
Does a big default loom in China?
Russian bank halts all cash withdrawals?
Meanwhile, reports that Chinese banks have stopped allowing withdrawals turns out to be a false alarm.
European earnings outlook: Zero.
Problem: Greek economy still sucking wind. Solution: change how GDP is calculated.
Japan hits record trade deficit. Remember when they were supposed to take over the world?
The ruble flirts with record lows.
Obama and the Democratic Party’s numbers are worse than they were in 2010.
Planned Parenthood wonders what’s the big deal with a little statutory rape among friends?
Florida heroin kingpin is an illegal alien on food stamps.
Another Democrat convicted of that vote fraud that doesn’t exist. (Hat tip: Dwight.)
Democrats actually polling worse than they were in 2010. And that’s from Dem pollster/booster John B. Judis.
Target’s part-time workers get ObamaCared.
We have a winner for troll of the year:
Every time I hear someone say that feminism is about validating every choice a woman makes I have to fight back vomit.
Do people really think that a stay at home mom is really on equal footing with a woman who works and takes care of herself? There’s no way those two things are the same. It’s hard for me to believe it’s not just verbally placating these people so they don’t get in trouble with the mommy bloggers.
Having kids and getting married are considered life milestones. We have baby showers and wedding parties as if it’s a huge accomplishment and cause for celebration to be able to get knocked up or find someone to walk down the aisle with. These aren’t accomplishments, they are actually super easy tasks, literally anyone can do them. They are the most common thing, ever, in the history of the world. They are, by definition, average.
Amy Glass, come down and collect your coveted Trolly! (Hat tip: Instapundit.)
“Woman Takes Short Half-Hour Break From Being Feminist To Enjoy TV Show”
In case you didn’t notice, Iran’s mullahs are still lying, violent scumbags.
Strangely enough, Israeli’s trust Netanyahu more than Obama. Funny how a mere 40+ years Palestinians breaking every agreement they’ve signed will sour people on the peace process…
Michael Totten wanders around Cuba some more, where he let’s us know that Cubans can be arrested for unauthorized shrimp.
California Court determines that disgraced serial journalistic liar Stephen Glass is too dishonest to be a lawyer.
In other news, Eugene Volokh stuns Washington Post readers with non-liberal thoughts on guns and other topics.
Have you ever considered the possibility that Woody Allen isn’t a child molester?
Drive a Fit, a Prius, a Yaris, or a Fiat 500? Hope you’ve made out a will.
Anthony Weiner forced to downsize to an apartment whose rent is a mere 6 times my mortgage.
Tags:2014 Election, abortion, Amy Glass, Anthony Weiner, Benjamin Netanyahu, Border Controls, California, cars, China, Communism, Crime, Cuba, Democrats, Elections, Eugene Volokh, feminism, Florida, fraud, Germany, Greece, Iran, Israel, Japan, Jihad, John B. Judis, Media Watch, Michael Totten, ObamaCare, PIIGS, Planned Parenthood, Russia, Stephen Glass, Welfare State, Woody Allen
Posted in Border Control, Communism, Crime, Democrats, Economics, Elections, Foreign Policy, Jihad, Media Watch, ObamaCare, Waste and Fraud, Welfare State | No Comments »
Friday, September 20th, 2013
Here’s a Friday LinkSwarm. I have a big piece brewing on the ObamCare battle I may or may not have out on Monday.
Poland seizes half of private retirement funds.
Republicans in the House actually manage to cut something.
On the other hand, if you’re a Republican congressman, and you make $172,000 a year, you don’t get to complain about it. That means you, Rep. Phil Gingrey.
Ted Cruz says the ObamaCare fight is just beginning.
Speaking of Cruz, nothing says class quite like the Communications Director of the Sacramento Democratic Party wishing for the children of a Ted Cruz staffer to die of a horrible disease. If a Republic staffer said that about Obama’s children he’d be gone faster than Domino’s could get there. (Bonus: An extra evidence to Allan Brauer’s extreme classiness, he also refers to a woman as “cumrag.”) Sacramento Democrats have taken down Brauer’s page, but you can still find it on the Wayback Machine.)
“Like your health care plan? Then you can keep it” suck it up and get shoved into an ObamaCare exchange by your employer.
The IRS scandal just keeps getting worse.
Congressional Budget offices says that the deficit is going to get much, much worse.
Biggest story you’re not hearing much about? German elections this weekend. If Angela Merkel’s party should lose, and be replaced with a party less enthused with endless PIIGS bailouts, well, things could get interesting.
Obama official refuses to release information pertaining to a a Freedom of Information Act request. Stonewalling the press and withholding evidence? Obviously he must be bucking for a promotion.
Obama Express busted for paying cash for food stamps.
FEMA grounds UAVs, preventing them from providing mapping of Colorado flood victims for free.
Mainly read this Ann Althouse piece on “lean-in” circles for the catty comments.
Amarillo restaurant closes, evidently pens insulting message to patrons?
Remember China’s “Ghost Cities”? They’re bigger, and emptier, than ever:
Tags:Allan Brauer, Amarillo, China, Colorado, FEMA, Germany, Ghost Cities, Phil Gingrey, PIIGS, Poland, Republicans, Ted Cruz
Posted in Democrats, Media Watch, ObamaCare, Republicans | No Comments »
Monday, July 22nd, 2013
It’s shaping up to be another busy week, so here’s a quick update on the European Debt Crisis front:
EU Debt burden hits an all-time high.
Greece shuts down its bloated, money losing ERT public television/radio network. “Problems with Greek democracy are not the reason that ERT was shut down. ERT was an extravagant public company. Many, though not all, employees were hired under suspicious conditions, due to favoritism and nepotism, and receiveddisproportionately large wages (8000 Euros per month through the financial crisis and 13000 Euros per month before).”
Taki (who is Greek) offers some pungent assessments of his home country’s continual crisis.
In Europe, the law is seen is “an obstacle rather than a foundation.”
Spain steals from tomorrow’s retirees to pay for today’s retirees.
Portugal refrains from blowing up for a little while longer.
Germany’s finance minister tours his vassal state.
Don’t expect the EuroZone to explode before German elections on September 22. Plus calls for an “EMU Truth and Reconciliation Commission.”
First review of UK’s relationship with EU comes to the conclusion that everything is just hunky dory.
Tags:Budget, Economics, Euro, Germany, Greece, PIIGS, Portugal, waste, Welfare State
Posted in Economics, Waste and Fraud, Welfare State | No Comments »
Friday, May 31st, 2013
The season has switched from not Summer to Summer here in Texas, so here’s a hot, humid LinkSwarm:
In Europe, youth unemployment is climbing to scary, stratospheric heights. So scary I’m going to swipe their chart:
Notice how countries that have kept their deficit spending relatively low (Germany and even the UK, where deficits has at least decreased under Cameron) are doing much better than the PIIGS. Again, Austerity hasn’t failed in Europe, it’s been declared difficult and left untried.
Harry Reid calls his close personal friend and business associate Harvey Whittemore (and his wife) “wonderful people.” Oh, and Whittemore is now also a convicted felon.
Eric Holder: Obama’s sin eater. “The attorney general has done little in his tenure to protect civil liberties or the free press. Rather, Holder has supervised a comprehensive erosion of privacy rights, press freedom and due process. This ignoble legacy was made possible by Democrats who would look at their shoes whenever the Obama administration was accused of constitutional abuses.”
Pentagon Papers lawyer James Goodale talks about just how bad Obaama is for freedom of the press.
ObamaCare rates next year in California: “Obamacare will increase individual-market premiums by an average of 116 percent.”
Britain remains in denial over Islamic terror.
The Gang of 8 proposal implements amnesty and gives conservatives nothing in return.
Ted Cruz actually tries to fix the bill. Gang of 8 tells him to get stuffed.
The Chicago Sun-Times lays off their entire staff of photographers. Including a Pulitzer Prize winner.
Tags:Border Controls, California, Chicago Sun Times, Eric Holder, Europe, European Debt Crisis, Harry Reid, Harvey Whittemore, IRS, James Goodale, Jihad, Media Watch, Obama Scandals, ObamaCare, PIIGS, Ted Cruz, UK, unemployment, Welfare State
Posted in Border Control, Democrats, Economics, Media Watch, Obama Scandals, ObamaCare | No Comments »
Monday, May 27th, 2013
Forbes makes the same point that I have made repeatedly: Austerity has not been tried and failed in Europe, it has been found difficult and left untried.
The official figures show that PIIGS governments embarked on massive spending sprees between 2000 and 2008. During this period, their combined general government expenditures rose from 775 billion Euros to 1.3 trillion – a 75 percent increase. Ireland had the largest percentage increase (130 percent), and Italy the smallest (40 percent). These spending binges gave public sector workers generous salaries and benefits, paid for bridges to nowhere, and financed a gold-plated transfer state. What the state gave has proven hard to take away as the riots in Southern Europe show.
Then in 2008, the financial crisis hit. No one wanted to lend to the insolvent PIIGS, and, according to the Keynesian narrative, the PIIGS were forced into extreme austerity by their miserly neighbors to the north. Instead of the stimulus they desperately needed, the PIIGS economies were wrecked by austerity.
Not so according to the official European statistics. Between the onset of the crisis in 2008 and 2011, PIIGS government spending increased by six percent from an already high plateau. Eurostat’s projections (which make the unlikely assumption that the PIIGS will honor the fiscal discipline promised their creditors) still show the PIIGS spending more in 2014 than at the end of their spending binge in 2008.
Remember: Real austerity is cutting budgets until receipts match outlays. In Europe this hasn’t been tried outside the Baltic states. Meanwhile, Japan has been trying Keynesian stimulus for two decades and has nothing to show for it but a mountain of debt.
Or take this abstract (I’m still working through the actual paper) from German Institute for Economic Research economist Georg Erber: “The core thesis of the paper is that taking a close look at the actual statistics available from Eurostat on the PIIGS-countries plus Cyprus, one finds little empirical evidence that the governments there have de facto reduced their total public expenditures.”
Keynesian pump-priming hasn’t worked in Europe. Could real austerity (i.e., cutting budgets until they’re balanced) work to restore growth in Europe (and here)?
Why not actually try it and see?
Tags:Budget, Economics, European Debt Crisis, PIIGS, Welfare State
Posted in Budget, Economics, Welfare State | No Comments »
Tuesday, April 30th, 2013
Take a look at these charts. Unemployment in Spain is up over 25%, and most have been unemployed more than 2 years. Matthew O’Brien is correct when he says that Spain’s inflexible labor laws contribute greatly to the unemployment, but errs when he says that “austerity hasn’t been the path to prosperity. It’s been the path to perma-slump.”
Austerity hasn’t failed in Spain. It hasn’t been tried.
Spain last ran a budget surplus in 2008, and since then it has engaged in deficit spending. In 2012, Spain’s budget deficit was 9.4% of GDP, and this year it will be 10.6% of GDP.
Remember, real austerity isn’t trying to tax-and-spend your way to prosperity. Real austerity is cutting budgets until outlays match receipts. Estonia bit the bullet and balanced its budget, and its economy is now growing at a steady clip. Meanwhile, governments all across Europe continue to try the same deficit spending Keynesian pump-priming, and keep having the same recession. In most of Europe, “austerity” has meant digging their own graves more slowly rather that stopping digging.
And European elites refuse to stop digging because their power and perks all stem from swaddling voters in an unsustainable cradle-to-grave welfare system.
If all this sounds familiar, that’s because it is. Europe makes the same mistakes, gets the same results, and keeps doubling down on stupid, content to keep the farce running as long as they possibly can. Instead actually of solving the interrelated problems of debt, unsustainable entitlements, and the Euro, the Euroelite seem content to preside over the world’s slowest, most boring train wreck. Yes, it’s a pity the train is sliding inexorably toward the chasm, but there’s such fine vintages to be had in the saloon car, and it offers such a magnificent view of the coming crash…
Tags:Budget, debt, Economics, Euro, Europe, European Debt Crisis, PIIGS, Spain, unemployment, Welfare State
Posted in Budget, Economics, Welfare State | No Comments »
Wednesday, April 17th, 2013
While attention was focused on the Boston bombing, Gosnell, and gay marriage, Greece just got another bailout. This is in exchange for further “austerity.”
What sort of “austerity” is Greece practicing? The sort that involves deficit spending at 10% of GDP, which is up from 9%. It was supposed to be cut to 7.5%.
So Greece wants more money because it can’t even keep to its previous promises on its fake austerity goals.
Let me explain it once again: Real austerity is cutting spending until it matches incoming receipts. Not reducing the rate of deficit spending. Not raising taxes so politicians can continue to spend.
No country in the EU (at least outside the Baltics) has practiced real austerity. That Forbes piece on the Baltic nations includes a lot of good advice that EU nations are largely ignoring:
Don’t run up big debts. It is a lot easier to manage when things go bad if you aren’t overextended to start. Observed Rosenberg: “Estonia’s experience shows that prudent policies during the boom may not avoid a bust, but they can put the country into a better position to deal with shocks.”
Don’t engage in an orgy of “stimulus” spending. That will run up big debts without generating long-term growth. When budgets eventually are cut, as they will have to be, the economic loss and political pain will be even greater.
Make tough decisions early. People typically are ready to act after the crisis hits. In the case of Latvia, argued Asmussen, by acting swiftly “most of the required painful budgetary decisions could be passed before the so-called ‘adjustment fatigue’ kicked in.”
Maintain fiscal responsibility. Otherwise any progress will be transitory. Growth is the natural result of reform. Delaying reform exacerbates the problem while prematurely terminating reform short-circuits the recovery.
Emphasize budget cuts. Expansive and irresponsible public outlays usually contribute to economic crisis. Moreover, the state as well as citizens should sacrifice after a crash. The answer is to cut expansive and irresponsible public outlays. In fact, economists Alberto Alesina and Silvia Ardagna found that “spending cuts are much more effective than tax increases in stabilizing the debt and avoiding economic downturns. In fact, we uncover several episodes in which spending cuts adopted to reduce deficits have been associated with economic expansions rather than recessions.”
Finally, don’t rest on one’s laurels. There always is more to do. Even nations which have implemented serious reform programs, like the Baltic States, could make further improvements.
As far as I can tell, none of the core EU states (and certainly none of the PIIGS) has tried this approach since the 2008 recession hit. They keep trying Neo-Keynesian pump-priming and deficit spending to keep both the Euro and their unsustainable welfare state afloat, and they keep experiencing endless recession. Their fake austerity comes in slightly reducing the amount of their deficit spending enough to pretend they’re in compliance to keep the bailouts coming. Ireland hasn’t practiced real austerity. Neither has Portugal, Spain, or Italy (though Italy has come closest).
The shell game of bailouts and fake austerity will continue as long as the Eurocrats can keep getting away with it.
Tags:Euro, Europe, European Debt Crisis, Greece, PIIGS, unions, waste, Welfare State
Posted in Budget, Economics, Foreign Policy, unions, Waste and Fraud, Welfare State | 1 Comment »
Friday, April 5th, 2013
Been a while since the last Friday LinkSwarm, so here it is!
The problem with Europe’s economy? It’s the spending, stupid.
Government spending on bailouts, subsidies, grants, salaries and entitlements commands a much larger share of these economies than it did just a few years ago. European austerity has been focused on the private sector — namely, taxpayers with high incomes.
That is the second thing the PIIGGS have in common. The highest income tax rate was recently increased in every one of the troubled PIIGGS except Italy (where it was already too high at 43%). The top tax rate was hiked from 40 to 46.5% in Portugal, from 41 to 48% in Ireland, from 40 to 45% in Greece, from 40 to 50% in Great Britain, and from 48 to 52% in Spain.
Immigration “reform:” Distrust and Then Verify.
News flash: Getting a PhD in Literature is not a surefire path to financial security. Stop the presses!
Female Princeton grad tells current Princeton women that maybe they should consider getting married in college. Naturally the Ivy league/feminist/MSM complex threw a fit. (Pro-tip: There are few surer signs of leftwing PC think than the word “hetronormative.”)
Homicide Trends in the US: 1980 to 2008.
Dwight brings up another case of journalistic malpractice. “Meet the Sniper Who Killed 2,200 People in Iraq.” As Dwight notes, anyone with even passing knowledge of snipers should know that this claim is ludicrous from the git go. In sports terms, it’s like someone claiming they threw 20 Major League no hitters, or ran a two minute mile. It reminds me of Scott Thomas Beauchamp’s smears about troops in Iraq in The New Republic. (If you remember the Beauchampo affair, it turns out that he was engaged to Elspeeth reeve, who just happened to be a TNR fact-checker. Somebody should make them read Stolen Valor.
Also from Dwight: This interesting piece about a gay man talks about coming out at Jerry Falwell’s Liberty university.
Texas Attorney General Greg Abbott: UN Treaties don’t trump the Bill of Rights.
Left-wing bigots pat themselves on the back.
Tags:education, Europe, Greg Abbott, Guns, LinkSwarm, PIIGS, Texas
Posted in Crime, Economics, Texas, Welfare State | 1 Comment »