American Elephants

Is the European Union Economy Going Down the Toilet? by The Elephant's Child
December 11, 2010, 8:55 pm
Filed under: Economy, Europe, History, Military | Tags: ,

Of course this is meant to be a humorous take on the Euro Crisis, as only the Brits can do it.  But it’s not all that far off.  Europe’s leaders have perfected two techniques, says an essay in Der Spiegel, since the start of the debt crisis, scrambling to catch up with events, and playing them down.  Again and again, they have been forced to assemble bailout packages to prevent the euro zone from breaking apart.  And after each new one, they insist that the measures are purely psychological and will probably never be needed.

First there was Greece, then Ireland.  To be followed by Portugal, Spain and Italy.  Governments claim they have come up with an idea that will end the crisis for once and all.  On Sunday, the euro group of finance ministers from the 16 euro-zone member states approved the outlines of a long-term European Stability Mechanism (ESM) to come into force in mid-2013.  It is intended to provide states with more options to fight debt crises.

At the end of World War II, free Europe was desperate to end the centuries of warfare that had swept back and forth across the continent. That latest bout with Fascism, Nazism, Communism, Socialism and the Holocaust was more than they could bear. But how to unite all these disparate countries with different languages, different customs and uncertain borders into something stronger. Countries that often hated each other. The Common Market was fairly successful, but the European Union may have overreached.  It’s a hope struggling to become some kind of reality. without a very clear idea of what is is they’re hoping.  Centuries of custom and identity don’t shift to becoming “Europeans” that easily.

When Valéry Giscard d’Estaing set about devising a constitution for the new union, he bragged that he had studied the two hundred year old American Constitution, only 12 pages long, beginning “We the people”. The most recent version of the EU Constitution is somewhere over 70,000 words and growing.  Their first version began “His Majesty, the King of the Belgians.”

The union seems to have held together largely because the government is almost completely unrepresentative.  It’s even illegal to criticize the EU. The Union seems to be slowly disintegrating even without the current debt crisis. They are not having enough babies to replace themselves and are slowly depopulating, except for in-migrating Muslims who are not assimilating, and Europe has no method to help them assimilate. It is a puzzlement.

This map shows just why they felt the need to form a union.  Can human nature be overcome?  Enlarging this to full screen size doesn’t work for me — type is still too fuzzy to read.

Representative-Elect Kristi Noem (R-SD) by The Elephant's Child

Newly elected Representative Kristi Noem was chosen to give the Republican response today 12/11/10, and to represent the new Freshman class of legislators.  Bright, articulate, and right on top of the issues.  January will be an interesting month.

Wondering Why the Federal Government Wants More of Your Money? by The Elephant's Child
December 11, 2010, 5:09 pm
Filed under: Capitalism, Democrat Corruption, Economy, Statism | Tags: ,

Earlier this week, economists John F. Cogan and John B. Taylor, both senior fellows at the Hoover Institution, wrote in the Wall Street Journal about their research on Obama’s $862 billion stimulus — the 2009 American Recovery and Reinvestment Act (ARRA). The impact of the stimulus on the economy?  Zero, zip, nada.  Liberals are still arguing that the federal spending stimulus wasn’t large enough.

In September 2009, the economists reported on their research showing that the temporary tax rebates and transfer payments in the Bush and Obama administration’s stimulus programs were ineffective.  This time, they studied new data on the impact of increases in government purchases, and found that in spite of the large size of the program, the dollar volume of additional government purchases that it generated was negligible. (Keynesian economics doesn’t work)

The AARA grants to states and local governments were similarly ineffective.  A 1979 study by a former Federal Reserve governor and professor at the University of Michigan determined that federal grants to state and local government had little effect on their purchases of goods and services. (Ditto)

I was chatting this morning with an insulation contractor.  A big effort to provide jobs for minorities and poorer workers was to provide them with “green” jobs, insulating homes. Classes were offered free to those who applied.  It seemed a little strange at the beginning to me, for we have an industry already supplying those services.  My contractor said that after graduating from the program, there just isn’t much, if any, work for these people,  for there was already plenty of competition in the industry.

Just before the midterm election, Congress appropriated $900 million to build part of a high speed rail line in California.  Instead of focusing on Los Angeles or San Francisco, they apparently appropriated the money for a mostly rural district that just happened to have a Democrat Congressman facing a difficult election.  The line runs from Borden to Corcoran — and this month the rail authority approved construction on the first 65-mile segment of a 500 mile bullet train.  The $4.5 billion segment will not begin operating until more of the line is completed, which could be never.

The rail authority told voters that for a one-way $55 ticket, the system would serve 94 million passengers between Los Angeles and San Francisco and create hundreds of thousands of “sustainable” jobs.  It assured voters that the bullet trains would operate at a surplus and without subsidies.  Welcome to Oz.  Only two segments of railways in the world have ever broken even, from Tokyo to Osaka, and one in France. A consulting firm, Infrastructure Management Group, told the authority that companies would not operate the railway without a revenue guarantee–a subsidy— because the ridership projections were so flaky.  Voters approved the $9.95 billion bond issue, but the authority has yet to come up with a credible economic plan.  Estimates run up to $623 billion, and federal seed money of $19 billion.

Enter the newly-elected  governors from Wisconsin and Ohio, Scott Walker and John Kasich who said they would follow through on their campaign promises not to waste their states’ money on high speed rail.

So Transportation Secretary Ray LaHood rescinded nearly $1.2 billion in stimulus funds.   Use the unneeded funds to balance the budget?  Pay for unemployment benefits?  No.  He’s going to spend it anyway.  It’s going to California’s “train to nowhere” boondoggle– at least another $624 million.

Included in the plan for the “train to nowhere” are tracks, station platforms, bridges and viaducts which would elevate the line through urban areas.  The initial section, however would not be equipped with maintenance facilities, locomotives, passenger cars or an electrical system necessary to power high-speed trains.

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