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Europeans Wake Up With Severe ‘Hope and Change’ Hangover.



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I return from vacation with an epic Morning Jolt, if I may say. There’s a look at the massive protesting crowds in Egypt, a dissection of the Paula Deen controversy, three key paragraphs from a particular book you’ve heard a lot about lately, and more pictures and one-liners than usual.

Man, You Europeans Were a Bunch of Suckers for Obama’s 2008 Rhetoric.

Hope and change, baby! Back in 2008, Germans overcome with enthusiasm for the Democratic presidential nominee referred to their own country as “Obamaland.”

Now . . . well, I’ll let this picture from AFP sum it up:

“Stasi 2.0.” Dang, that’s going to leave a mark. Obama’s just lucky that these latest revelations broke after he gave his overhyped Brandenburg speech.

According to Der Spiegel, the NSA has been going through the phones, computers, and who knows what else of European Union officials. If European politicians were any angrier, they would be commenting on Daily Kos. They’re so mad, Islamic Rage Boy is telling them to calm down. Alec Baldwin is imploring them to not lose their temper.

Really, they’re ticked:

Senior European Union officials are outraged by revelations that the US spied on EU representations in Washington and New York. Some have called for a suspension of talks on the trans-Atlantic free trade agreement.

Europeans are furious. Revelations that the US intelligence service National Security Agency (NSA) targeted the European Union and several European countries with its far-reaching spying activities have led to angry reactions from several senior EU and German politicians.

EU and German politicians on Sunday, however, were reacting primarily to the revelations that the US had specifically targeted the 27-member bloc with its surveillance activities. “If these reports are true, then it is abhorrent,” said Luxembourgian Foreign Minister Jean Asselborn. “It would seem that the secret services have gotten out of control. The US should monitor their own secret services rather than their allies.”

Asselborn characterized the operation as a breach of trust. “The US justifies everything as being part of the fight against terrorism. But the EU and its diplomats are not terrorists. We need a guarantee from the very highest level that it stops immediately.”

A guarantee from the president of the United States that we will no longer collect intelligence on officials in EU countries? “Bzzz! Sorry Hans, wrong guess. Would you like to go for Double Jeopardy where the scores can really change?”

If you’re a European diplomat, and you didn’t already assume that your phone calls, e-mails, and files are constantly being targeted by intelligence agencies from all kinds of countries, hostile and friendly and everything in between . . . well then, fire your counterintelligence staff. Welcome to the real world, Hans. If you’re got information worth having, then somebody, somewhere, is trying to get it.

There’s a line of dialogue from Heat: “Assume they got our phones, assume they got our houses, assume they got us, right here, right now as we sit, everything. Assume it all.” It’s good advice for anyone connected with sensitive information, because even if U.S. intelligence agencies never contemplated snooping in those EU diplomats’ files, the Russians, Chinese, and who knows who else did it, and continue to do it, too. You’re only as secure as your countermeasures.

As an American, I’m not particularly bothered by the NSA giving a technological colonoscopy to every electronic gadget used by every European diplomat. That’s just good old-fashioned intelligence-gathering. The U.S. Constitution’s Fourth Amendment doesn’t say Jacques merde about unreasonable searches on foreign officials.

Of course, it doesn’t bother me because I’m not a European diplomat and I never really thought Obama was the embodiment of hope and change. If I had gone to that big rally in Berlin in 2008 and told my constituents that this president really was the polar opposite of George W. Bush in all the ways that mattered to those kumbaya-minded Europeans, well . . . yeah, I’d feel like a fool, too.

Let’s close with a few words from Obama’s speech in Berlin:

Even as we remain vigilant about the threat of terrorism, we must move beyond a mindset of perpetual war. And in America, that means redoubling our efforts to close the prison at Guantanamo. (Applause.) It means tightly controlling our use of new technologies like drones. It means balancing the pursuit of security with the protection of privacy. (Applause.)
 
And I’m confident that that balance can be struck. I’m confident of that, and I’m confident that working with Germany, we can keep each other safe while at the same time maintaining those essential values for which we fought for.
 
Our current programs are bound by the rule of law, and they’re focused on threats to our security — not the communications of ordinary persons.

Congratulations, EU officials. We don’t think you’re ordinary!

Tags: Barack Obama , NSA , Europeans

The 2003–08 Liberal Foreign-Policy Vision Lies in Ruins



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The front page of today’s Washington Post previews President Obama’s trip to the EU summit in Northern Ireland, observing that Europeans are deeply disappointed, and feeling betrayed, by Obama’s policies on long-delayed assistance to Syrian rebels, widespread NSA eavesdropping, and expansion of drone warfare.

In his use of drones and the NSA, Obama is acting more like the European caricature of President George W. Bush. Le Monde, in fact, referred to him as “George W. Obama.”

What the five years of Obama’s presidency have taught us is that the dominant worldview in the American Left and Europe in the preceding five years — 2003 to 2008 — was an unrealistic, idealistic fantasyland wishing away complicated problems of terrorism, security, and the politics and culture of the Middle East. As discussed in today’s Jolt . . . 

A Foreign-Policy Shift That Obama Won’t Even Personally Discuss, Much Less Explain

From 2003 to 2008, we were served up large heaping piles of crap that somehow managed to become foreign-policy conventional wisdom:

  • A major obstacle to Middle East peace was that the Bush administration wasn’t making it enough of a priority.
  • The Iraq War was the main cause of alienation and anti-American attitudes in the Muslim world.
  • Greed for oil and war profiteering drove American interventions in the Middle East, not humanitarian concerns or desire to check aggressive, inherently dangerous forces.

After taking the wheel of American foreign policy, the Obama administration pushed and pushed and pushed and pushed the Israelis and Palestinians, and five years later, we see that the basic obstacle to peace — i.e., one side wants to destroy the other, and the other side refuses to accept destruction — remains. The troops are home from Iraq, and the United States is still hated in much of the Muslim world. (They actually hate us even more now in Jordan and Pakistan than during the Bush years.)

And now the United States will be sending some sort of military assistance to the Syrian rebels, finding the brutal actions of Ba’athist Arab dictator — including use of sarin gas — too dangerous to ignore any further.

Although apparently the president doesn’t really want to do this. This weekend, the New York Times reported:

[Obama’s] ambivalence about the decision seemed evident even in the way it was announced. Mr. Obama left it to a deputy national security adviser, Benjamin J. Rhodes, to declare Thursday evening that the president’s “red line” on chemical weapons had been crossed and that support to the opposition would be increased. At the time, Mr. Obama was addressing a gay pride event in the East Room. On Friday, as Mr. Rhodes was again dispatched to defend the move at a briefing, the president was hosting a Father’s Day luncheon in the State Dining Room.

Come on, man! Mr. President, own your decision. If you don’t think this is the right decision, tell your advisers and former President Clinton and McCain and Graham and everyone else that you think they’re wrong, and stick by it. Don’t adopt a policy that you don’t really believe in just because you want the complaining to stop.

Tags: Barack Obama , Syria , Drones , Europeans , NSA

Is the Fed Pursuing Our Interest or Banks’ Interests?



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The Fed signals that it intends to hitch our national wagon to Europe just as Europe is going over the edge, and the Dow jumps 4 percent. Maybe I’m missing something.

All that Bernanke & Co. did yesterday was to lower the dollar-financing cost for banks in Europe, where inter-bank lending is locking up — for good reason. But Europe’s problem is not its banks and their access to dollars. Europe’s banks are in trouble because European government bonds are in trouble, and European government bonds are in trouble because European governments are in trouble. European governments are in trouble because they spend too much money. The Fed can’t change that, and hasn’t tried.

The question is: What is the Fed thinking? Is it looking out for the United States, or is it looking out for the banks?

The generous interpretation of the Fed’s action goes like this: The Fed hasn’t really risked anything — it’s just making it easier for them to borrow from one another, because a European banking crisis would cause a 2008-style credit crisis worldwide. With U.S. economic indicators improving modestly, the main worry of U.S. policymakers right now is economic events outside our own borders. The Fed can’t work out the Europeans’ finances for them, but it can soften the blow to international credit markets, and thereby do a service to the American economy.

The ungenerous interpretation of the Fed’s action goes like this: Everybody knows the jig is up, but lo these many years after the 2008 crisis, trillions in bailouts later, the banks are still in weak shape, we haven’t really reformed our financial rules, there’s insufficient transparency to really know what kind of shape everybody is in, and the world’s biggest banks just got downgraded on Tuesday. We’re buying time and hoping for the best, and giving all our favorite bankers an extra little margin of error to get their acts together before the big kaboom gets heard ’round the world.

I’m open to either interpretation, and to other interpretations.

But here is what is beyond debate: Europe has not solved its fiscal problems. Europe shows no sign of being on the verge of solving its fiscal problems. Europe shows no sign that it wants to solve its fiscal problems. If Ben Bernanke is having “in for a penny, in for a pound” thoughts, he needs to think again: We do not have the resources to bail out Europe, and nobody has the resources to bail out the United States.

Congress should make it clear — today — that the Fed’s mandate does not extend to bailing out Europe’s banks and Europe’s governments. This is especially true after the secrecy and unaccountability with which it conducted the $7.7 trillion shadow bailout on top of TARP.

Market indicators suggest that investors are expecting interest rates to go lower and money to remain easy — even the ChiComs loosened up a little bit yesterday. And why had Beijing been so tight up until now? Inflation. In a poor country such as China, a little inflation can cause civil unrest. But rich countries aren’t any different, just richer. Years of low interest rates and loose money haven’t solved our fundamental economic problems, but they have created the potential for seriously disruptive inflation, and you’ll notice that gold prices and oil futures have been going up, too. That isn’t a sign of confidence in the dollar or the euro.

One of the big problems at MF Global (as at Lehman Bros.) was off-balance-sheet accounting, using various bookkeeping shenanigans to hide the fact that liabilities were dwarfing assets. The United States government does that both in the obvious sense — pretending that future entitlement liabilities don’t really exist — but in a more subtle sense, too: Wealth isn’t abstract numbers. Wealth is real stuff: food, oil, steel, houses, people performing useful services, etc. You can flood the world’s financial systems with liquidity and create the impression of economic activity, but that does not create one automobile, pair of shoes, or bag of coconuts. You can finesse the economic metrics, but that doesn’t make you any richer.

Government spending in the United States (at the federal, state, and local level) is about 40 percent of GDP, and we’re borrowing 40 cents of every dollar we spend. We’re spending the money now, with promises of future benefits that amount to (literally) more than all the money in the world, and promising to pay off today’s spending out of future taxes, as though the future is not going to want to spend the money on itself. That is not a program for stability. Not in Europe. Not here.

—  Kevin D. Williamson is a deputy managing editor of National Review and author of The Politically Incorrect Guide to Socialism, published by Regnery. You can buy an autographed copy through National Review Online here.

Tags: Debt , Deficits , Europeans , Fed , Fiscal Armageddon

Of German Bonds and American Prosperity



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The question I am asked most often is: What will it take to get the government to stop running up the debt? A Republican president? A Republican president with a Republican House and a Republican Senate? A Republican president named Ron Paul?

My guess is that none of these is sufficient. The government will continue to borrow money for as long as the market remains willing to lend it money. Which is why Germany’s failed bond auction is of interest. From the Financial Times:

Germany saw one of its poorest debt sales on Wednesday in what was seen as a failed auction by many market participants amid fears the eurozone’s debt crisis is spreading all the way to Berlin.

Marc Ostwald, at Monument, said “I cannot recall a worse auction … If Germany can only manage this sort of participation, what hope for the rest. Yields are at completely the wrong level.”

Germany is suffering because of pan-European problems, not because of specifically German problems. But when Europe’s most solid economy is having a hard time raising money in the marketplace, that should be a wakeup call.

When governments take bonds to market and the market doesn’t want them, governments have two options: One, stop borrowing money. Two, raise interest rates in order to make bonds a more attractive investment. The ability to borrow money is the thing that makes being in politics fun and rewarding, so No. 2 is the go-to option.

In the United States, we have historically low interest rates right now. We’re also monetizing a great deal of debt, which is an invitation to inflation, and governments also raise interest rates to fight inflation. So there is good reason to suspect that interest rates will go up in the future. (No, I’m not guessing when or by how much. If I could forecast that with any accuracy, I’d have Lloyd Blankfein skimming the bubbles off my Moët-filled swimming pool.) But we do have some historical precedents to consider. As recently as June of 1984, interest rates on 30-year Treasury bonds went to 13.44 percent. To do a little thought experiment: What would happen if it suddenly cost Washington 13.44 percent to finance our deficit spending?

At an interest rate of 13.44 percent, it would cost just a little over $2 trillion a year to finance our current $15 trillion or so in debt — not counting future borrowing. Total federal revenue in 2010 was also just over $2 trillion. Which is to say that if financing costs should return to what they have been within recent memory — hardly a historically unprecedented level — then the cost of financing our debt could equal or exceed all federal revenues combined. If you’re in a position necessitating that you borrow money just to pay interest on your current debts, you’re in a pretty weak credit position, and so there will be pressure for interest rates to go even higher. A government isn’t a household, but to use the household comparison: If your income is $5,000 a month and the minimum on your credit cards is $5,500 a month, you’re going to have a hard time getting new loans.

In that situation, we could cut all federal spending beyond debt service to $0.00 and still not be able to pay our bills. No turkey on our national table that Thanksgiving.

There are two ways of looking at American prosperity. One way is say: Wow, Americans are only 5 percent of the world’s population, but they get to divvy up nearly 25 percent of the world’s economic output — lucky Americans! The other way is to say: Wow, Americans are only 5 percent of the world’s population, but they produce nearly 25 percent of the world’s economic output — lucky world! Thanks, Americans!

Both are valid. But however you look at it, it is absurd that a country with 5 percent of the world’s population and a quarter of its economic output cannot responsibly manage its public finances. As we count our blessings this week — and our national cup truly runneth over — it is worth keeping in mind that American prosperity is neither random nor accidental, nor is it a fixed state of affairs. This didn’t just fall out of the sky: We are prosperous in no small part because we had good ancestors — and we should work to be better ancestors ourselves, that future Americans may continue to count the prudence of their forefathers among their many blessings.

—  Kevin D. Williamson is a deputy managing editor of National Review and author of The Politically Incorrect Guide to Socialism, published by Regnery. You can buy an autographed copy through National Review Online here.

Tags: Bonds , Debt , Deficits , Europeans , Fiscal Armageddon

Default Is In Our Stars



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It’s not getting better:

 

Officials in Berlin told The Telegraph it is “more likely than not” that investors will suffer fresh losses on holdings of Greek debt, beyond the 21pc haircut agreed in July.

The exact level will depend on findings by the EU-IMF “Troika” in Athens.

“A lot has happened since July. Greece has fallen back on its commitments, so we have to assume that the 21pc cut is no longer enough,” said one source.

Finance minister Wolfgang Schäuble told the Frankfurter Allgemeine that the original haircuts were “probably” too low, saying banks must have “sufficient capital” to cover greater losses if need be. Estimates near 60pc have been circulating in Berlin.

The shift in German policy has ominous echoes of last year when Chancellor Angela Merkel first called for bondholder haircuts, setting off investor flight from Ireland and a fresh spasm in the EU debt crisis.

It’s not just the Europeans, of course. U.S. banks are sitting on tens of billions in Greek debt, but the whole thing is one big knot of pain: French banks hold a ton of Greek debt, and guess who holds a lot of French bank debt? U.S. banks, that’s who, with Morgan Stanley alone facing some $39 billion in exposure. As usual, Goldman Sachs is thought to be ahead of the curve — it helped to restructure the Greek debt, and apparently got good and scared by what it saw. 

But keep in mind: This isn’t Europe’s problem. This is your problem, Sunshine:

 

The latest round of American financial assistance came Thursday with a promise by the Federal Reserve to swap as many dollars for euros as European bankers need. In the short run, those transactions won’t have much impact because the central banks are simply swapping currencies of equal value. If the move helps avert a wider crisis, it could help spare the global economy from another recession.

But over the long term, consumers could feel the impact of central bankers flooding the financial system with cash, according to John Ryding, chief economist at RDQ Economics.

“This is a lender of last resort function,” he told CNBC. “With the dollar injections that the Fed has done, it’s like giving a patient medicine with really bad side effects.”  Ryding said the bad side effect in the U.S. has been inflation, which has picked up to 3.8 percent year over year.

The bailouts never end.

Tags: Debt , Deficits , Despair , Europeans

Citi: Ireland, R.I.P.



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Ireland does not have enough money to both bail out its banks and pay its government debts, Citi’s top economist says.

Accessing external sources of funds will not mark the end of Ireland’s troubles.The reason is that, in our view, the consolidated Irish sovereign and Irish domestic financial system is de facto insolvent. The Irish sovereign cannot from its own resources ‘bail out’ the banks and make its own creditors whole. In addition, a fully-fledged bailout (permanent fiscal transfer) from EA [that's euro area] partners or the ECB is most unlikely. Therefore, either the unsecured non-guaranteed creditors of the banks, and/or the creditors of the sovereign may eventually have to accept a restructuring with an NPV haircut, even if it is not a condition for accessing the EFSF or the EFSM at present.

But in our view, it has long been clear that the sustainability of the debt of an EA sovereign — however difficult it is to establish in the first place — is not the only, and maybe not even the most important, factor to determine the incidence of sovereign debt restructuring, including haircuts. Political concerns about the survival of the EA play a role. But importantly, concerns about the liquidity of fragile banking systems (the risk of deposit runs or a freeze in wholesale funding) or the solvency of banks (the ability to stem losses resulting from haircuts on holdings of sovereign debt) have led EA policymakers to delay the day of reckoning for the sovereigns in the hope of muddling through without another round of bank bailouts. Less visibly, potential losses from sovereign restructuring to pension funds and insurance companies may also have featured.

If two insolvent halves make one insolvent whole, what do 27 or so insolvent states out of 50 add up to?

– Kevin D. Williamson is deputy managing editor of National Review and author of The Politically Incorrect Guide to Socialism, to be published in January.

Tags: Bailouts , Debt , Deficits , Despair , Europeans

The Irish Bailout a “World Record”



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That’s gonna sting!

The additional €35bn (£29.8bn) being ploughed into Ireland’s banks has shocked experts, who have expressed concern that tonight’s bailout would not contain contagion in the eurozone.

Brian Lucey, associate professor of finance at Trinity College Dublin said he was “stunned”, adding: “We’ve already put at least €32bn into them, so that’s going to be €67bn, which is 50% of GNP, that’s a world record”.

He also warned that a new government next year could rip up the deal. “Sovereign governments have a right to effectively do whatever they want,” he said.

The EU authorities had hoped that the Irish bailout would draw a line in the sand and halt the threat of Spain and Portugal needing international assistance. But tonight, investors and analysts were far from certain that this would be achieved.

Ashok Shah, chief investment officer at investment firm London & Capital, said Ireland might now enjoy some “temporary relief”, but that bond investors’ concerns could now switch to Portugal and Spain.

“Portugal is already in the borderline, it will have to be rescued soon, maybe within a matter of weeks. The market will also focus on Spain. It will remain very volatile.”

A bigger-than-expected bailout for Ireland — does anybody expect Portugal or Spain (or Italy) to do any better? And what if it’s not just the PIIGS?

Years ago, a fellow calling himself Gekko wrote a column for National Review, called “Random Walk.” He predicted that the euro would be inherently unstable, because the economies it covers are so different from one another. I suspect Gekko is starting to feel vindicated, and I hope he has invested accordingly.

Prediction: The fiscal imbalances about to be worked out, probably violently, in the markets and budget committees will change our lives more than Islamic terrorism has or will.

The European disease is headed to these shores. As Michael Barone points out today, California, Illinois, New Jersey, and possibly New York are headed toward insolvency. Once you look at the crisis in public-employee pensions, twenty or thirty U.S. states may be headed for insolvency. We may end up in a situation in which 35 states are looking to the other 15 to bail them out. And when the house of cards starts to tumble, it will happen faster than anybody expects. Texas isn’t going to be able to carry the Union by itself.

I am surprised to find myself writing so many agreeable words about Erskine Bowles lately, but the former Clinton man hit it right upside the head with this one:

“The markets will come. They will be swift and they will be severe and this country will never be the same.”

On the other hand, once politicians are cut off from the endless stream of free money that has made being in government so much fun for the past couple of generations, maybe they will make less trouble. I find that possibility inspiring.

Less inspiring is this from Mark Zandi of Moody’s:

It may seem odd given all this, but I’m optimistic. Our problems are big, but they are manageable. As the economy improves (believe me, it will) the deficit will narrow, tax revenue will grow, and the extraordinary government spending used to combat the Great Recession will wind down. Under reasonable assumptions, the annual deficit will shrink from its current $1.3 trillion to $800 billion. Unfortunately, this isn’t good enough. We have to knock an additional $350 billion off our annual deficit, otherwise the interest payments on our outstanding debt will swamp us. This will be difficult – for context we spend more than $100 billion a year in Iraq and Afghanistan – but it is doable.

Particularly encouraging is the intellectual consensus now forming. You can see it happening around recent proposals from two different bipartisan commissions formed to tackle long-term federal budget issues. While the proposals will not become law, they lay down important benchmarks and establish the basis for a healthy and ultimately successful debate.

What part of “unacceptable” is eluding Mr. Zandy, I wonder? That’s how Nancy Pelosi described the bipartisan proposal around which he believes a consensus may be forming. The Democrats are standing by her, the unions are howling, and President Obama is showing no signs of getting behind the chairmen of the deficit commission he appointed.

There will be reform. It may come from Republicans, over the protests of Pelosi, Reid, et al. I think more likely it will come from the bond-market vigilantes, and that it will be “swift and severe, and this country will never be the same.”

But, hey, everybody ran up their credit cards last Friday, and it some alternate universe that apparently is good news. Don’t worry: You’ll get to pay that Visa bill off in devalued dollars. Merry Christmas, suckers.

– Kevin D. Williamson is deputy managing editor of National Review and author of The Politically Incorrect Guide to Socialism, to be published in January.

Tags: Bailouts , Debt , Deficits , Despair , Europeans , General Shenanigans

Britain Cuts Its Military Budget -- Should We?



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So David Cameron wants Barack Obama to know that Britain is still America’s “wingman,” as he put it. The reassurance was necessitated by Cameron’s announcement that the United Kingdom will be cutting its military budget by about 8 percent — a steep but endurable reduction in defense outlays.

Among the items lost to the budgeteers’ scalpel: MHS Ark Royal, the flagship of the Royal Navy, and the fleet of Harriers attached to it. The new, downsized British military would not be able to carry off its current supporting role in Iraq.

Some wingman: one who reduces his beer budget by 8 percent but assures you he’ll still be available to go out on the weekends — just so long as you buy an extra round. It is frustrating, to be sure, but we Americans really have no one to blame but ourselves: With our monster military budget, it is only natural that the nations residing safe (if occasionally resentful — we’re lookin’ at you, Canada) under our abundantly fortified security umbrella should choose military spending as the first target of opportunity when it comes to budget reductions. There are upsides to America’s overgrown national-security apparatus, to be sure, but the downsides, in addition to the walloping direct expense of the thing, is the indirect expense: Our over-large military is a shadow subsidy for the over-large welfare states of Europe, Canada, and our other allies around the world, including their protectionist corporate-welfare measures. American military protection helps to make South Korea, Germany, and Japan more effective global competitors — and also forces the United States to carry most of the political baggage for looking out after the West’s security interests around the world.

Why do we do this? Mostly because we regret what happened the last time we left the Europeans in charge of anything more consequential than Nokia.

Hypothetical: What happens if Atlas shrugs off his global military commitments? What if the United States decides that we’ve got Hitler and Stalin whipped and do not need all those troops in Germany? What if we decide that it’s too expensive to send American soldiers to do sentry duty just as easily performed by landmines in South Korea? (Seriously, I doubt the Norks could afford to buy enough diesel to get their army to the DMZ, much less to invade a civilized country like the Republic of Korea.) What if we take the Okinawans at their word that they want us out, and we get the hell out?

I do not pretend to be ready to analyze the military implications of a general (if minor) retrenchment of the global military presence of the United States. But it seems to me that it would carry with it some distinct political benefits — and save us a hell of a lot of money. If we followed Britain’s lead and reduced military spending by 8 percent, that’s $67 billion a year off the deficit, or . . . 4.7 percent off of the 2011 deficit, estimated to hit $1.4 trillion.

Okay, so tell your peacenik friends: Pentagon cuts won’t balance the budget. In fact, our deficit currently is running at about twice the size of the entire national-security budget. Trimming the military will do the Brits’ balance sheet a world of good — and will cost them very little other than a piece of their already diminished national self-respect — so why not? But it is going to take more radical moves to bring the American fiscal house into order.

– Kevin D. Williamson is deputy managing editor of National Review and author of The Politically Incorrect Guide to Socialism, to be published in January.

Tags: Debt , Defense Spending , Deficits , Despair , Europeans , Fiscal Armageddon

Exchequer vs. Economist



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Some fellow at The Economist has taken me to task for my description of socialism and communism: “The difference between communism and socialism: Under communism, politics begins with a gun in your face; under socialism, politics ends with a gun in your face.”

Writes “M.S.” (am I supposed to know who this is? must confess I do not):

I have lived or spent time in several of the northern European social-democratic countries that are often described by American conservatives as “socialist”, and I don’t remember seeing anything like this going on. Let’s see, the Netherlands, Denmark, France . . . nope, don’t remember seeing The Man coming to anyone’s house with a gun to tell them to go serve the community.

Well, bully for northern Europe and journalists with anecdotes! It’s not as though gunpoint politics has no history in Europe: Wait for the next all-European war and let me know how the Dutch and the Danes do.

I, too, have lived in a socialist country, one of the hot and messy ones, and I saw plenty of gunpoint politics. Different kinds of states draw the line on violence in different places.

Never mind, for now, that there is a world of difference between having a large and expensive welfare state, such as Sweden’s, and having a socialist state, such as Venezuela’s or North Korea’s or pre-reform India’s; it’s fair enough to write that some American conservatives would call France “socialist.” They would be wrong, but they would do so. (Hey, I have some thoughts on that!) Socialist or otherwise, all states finally rest on force: You decline to participate in whatever is the Netherlands’ version of serving the community through the instrument of the state long enough, they send a guy to your house with a gun to seize your stuff or haul you off to jail; resist and there will be violence. That’s what states do, and it is not necessarily illegitimate.

The resort to violence is what makes the question of what kind of things it is legitimate for states to do an important moral concern. It seems to me perfectly reasonable to shove a gun in somebody’s face to stop him murdering, raping, or robbing. It seems to me entirely unreasonable to shove a gun in somebody’s face to extort from him money to fund a project to get monkeys high on cocaine. Those seem to me fairly reasonable distinctions. It is illegitimate for government to use force or the threat of force for projects that are not inherently public in character.

The question of how much illegitimacy a state may perpetrate before becoming generally illegitimate itself is of real interest and has been, of late, the subject of some spirited discussion between some of my colleagues here and me. (You probably can guess on which side of the fault line I stand.)

But I would like to make it clear that I am not indulging in a figure of speech: I think it’s a pretty useful heuristic: If you’re not willing to have somebody hauled off at gunpoint over the project, then it’s probably not a legitimate concern of the state.

This is the sort of talk that gives the (always well informed, excruciatingly sober, generally sensible) folks at The Economist the howling fantods, inasmuch as they seem to operate under a kind of distributed version of the divine right of kings — always asking whether the rulers rule wisely, seldom asking whether they have the right to rule at all, and never asking whether and how much we actually need them. That’s why The Economist is the in-house newsletter of The Establishment. That and those great classifieds.

UPDATE: William Saletan tosses off another response on the masturbation = socialism debate. He is having a hard time distinguishing between that which one does out of shame or pressure and that which one does out of fear of government violence. It is all social control, he argues, as though a tut-tut were a tank.  In other words, he is either morally and politically sophomoric or he is being intentionally thick.

– Kevin D. Williamson is deputy managing editor of National Review and author of The Politically Incorrect Guide to Socialism, to be published in January.

Tags: Divine Right of Kings and Bureaucrats , Europeans , Guns , Socialism

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