Sweden’s capital Stockholm is surrounded by rundown, crime-ridden public housing projects. For the fourth night in a row these housing projects are erupting in riots, encircling Stockholm with a ring of burning cars, firebombed schools, with garages, recycling stations and other structures engulfed in flames. Mobs of immigrant youth – of which there are plenty in Sweden – attack shopping centers, mass transit and even fire and rescue teams called out to put out the fires they start.
The mobs aggressively charge at police, hurling rocks and other objects at them. They have vandalized at least two police stations and one train station. Last night (Wednesday), the fourth night in a row with riots, the unrest spread to most of the housing projects around Stockholm (there are two about dozen, each of them with roughly 8-10,000 residents). Cars and other property were being burned on at least 15 locations around the capital.
The riots are beginning to spread to other cities, primarily Gothenburg, Malmö and Uppsala. An inept government is sitting on the sidelines, confounded and clueless like Chamberlain when Hitler invaded Poland.
Sweden is just one example of a welfare state in decline and disintegration. The housing projects where the riots are erupting often have unemployment rates above 50 percent, with the vast majority of the residents being dependent on welfare. Contrary to the general perception in Europe as well as in America, Sweden is not a peaceful society that went through the recession largely unscathed. Their government finances are in good order, but that only means that they have over-taxed the private sector for a very long time, combined with moderate but frequent cuts in welfare programs. The cumulative effect over time has been that the private sector is being drained for life blood by taxes while the spending cuts are pushing the most vulnerable people into utter despair.
It is hardly surprising that Sweden has one of the highest crime rates in the industrialized world.
Unlike other countries in Europe, Sweden has been subject to a slow but steady austerity policies. Instead of causing an eruption of social and political protests at once, as has happened in countries like Greece and Spain, this Swedish strategy has worked like a slowly progressing venom in the economy. Eventually, the pressure from these cuts, combined with equally slow-progressing cuts in health care, public education and general income security programs, breaks out in one big eruption.
That is not to say there were no warnings. In my book Remaking America I tell the behind-the-scenes story of a crumbling welfare state, of how a young, frustrated generation burns down hundreds of public schools every year and how practically every social institution under the realm of the welfare state has turned from being benevolently user-friendly to being maliciously focused on balancing their budget under steady spending cuts.
Since the welfare state still maintains monopoly on all its services, people whose lives are being cut by austerity have nowhere else to go. The result is riots, social unrest, high crime rates and political extremism.
We are seeing all of this in Sweden, and in many other European countries. What we are not seeing is a realization among Europe’s political and intellectual leaders of how deep the crisis really is. George Friedman, chairman of Stratfor, provides an excellent analysis at RealClearWorld.com:
Spain invites endless historical considerations, but on this trip I was struck by something more immediate and prosaic. We were on the road from Granada, near the coast, to Madrid, the capital in the center of the country. It was a four-lane highway, what Americans would call an interstate. The road was clean, well maintained and, as we moved north, nearly empty. Every few kilometers a car would pass in the opposite direction, or we would run alongside another car heading north. It was not the paucity of cars that struck me; it was the almost complete absence of trucks. This was, after all, the road from the coast to the capital, not the only road but still a significant one. It was early afternoon on a weekday. The oddest moment came when we reached a tollbooth not too far from Madrid. There was only one booth open and when we pulled up there was no one in it and no coin or credit card slot. We waited, then we left. Perhaps the attendant was in the bathroom. Perhaps the revenue didn’t justify paying a toll taker. Perhaps this was one of the austerity measures they had taken. I will never know. What I do know is that the drive had a sort of post-apocalyptic feel, except that it was very clean.
A glimpse of an economic wasteland, emerging from the rubble as the austerity storm moves to the next country.
We marveled at it and then realized that there was nothing that ought to have surprised us about it. The unemployment rate in Spain is more than 27 percent. Gasoline costs 1.4 euros a liter (more than $6.50 a gallon). At that price, a drive is no longer a casual undertaking; it has to justify itself. As for trucks, when that many people are out of work — and have been for many months — the demand for goods declines to the point that trucks will be rare on the road.
An excellent way to put abstract reasoning into a real-world context. But there is more:
We stayed in a very nice hotel in Granada. In the morning when we left the hotel, there was a beggar sitting on the sidewalk, his back to the wall, to our right. … He was in his mid-to-late 20s, wearing glasses and reading a book. He was dressed in khakis and a decent shirt. He wasn’t mad, he wasn’t drunk and he wasn’t like the hippies of my youth. He wasn’t playing an instrument. He was sitting, absorbed in a book and begging. There were other beggars in Granada of the more conventional sort but also several more who looked like this one.
Youth unemployment in Spain is epidemic. It almost tripled in six years, from 17.9 percent in 2006 – a disturbingly high number in itself – to 53.2 percent in 2012. Preliminary numbers for 2013 point to 57 percent and rising.
An entire generation is being sentenced to a life in the ruins of the welfare state. The consequences of this are almost unfathomable. Friedman again:
When a young man is unemployed because he is a musician or an artist awaiting discovery or because he has lived carelessly, that’s one thing. But this is different unemployment. It is a generation whose dreams are shattered. They may have hoped to be a businessman or a craftsman, but that’s not going to happen now. Unemployment of this sort doesn’t go away in a few months or years. This is the level of unemployment the United States experienced in the Great Depression, the kind of unemployment that scars an entire generation.
Just as the Great Depression was prolonged by reckless welfare-statist policies, the crisis in Europe has taken a choke hold on the economy and is not going to let go any time soon:
No one knows how long this will last but everyone suspects that it will be a long time, and I share that suspicion. How do you accept a situation that says you, at the age of 22, will live on the margins of society along with half of your friends? More important, how do you live with that fact if you worked hard preparing for a career? … when nearly half a generation, most from middle-class families, finds itself at the bottom, there is no explanation to provide solace.
One of the factors that define industrial poverty is that the growing generation will live a life less prosperous than the life their parents have. Europe has been on the doorstep of industrial poverty for some time now, and this economic crisis was all it took to push the entire continent over the edge. And they will not climb back up again in at least a generation.
If the political leaders of Europe stick to defending the hollowed-out welfare state as a political ideology, the continent is doomed to being an economic wasteland for the rest of this century.
Add to that the risk for political extremism. Friedman sees this, too:
In its place there is, quite reasonably, a sense of victimhood. Whatever explanation one gives for the Spanish crisis — the stupidity of politicians, the laziness of the public, the greed of bankers or whatever else — the generation that is bearing the burden is the only one that is not guilty — at least not yet. This — being the victim in personal calamity shared by half a generation — is the foundation not just of political instability but also for the politics of rage. The older middle-class citizens, with the lives they thought they had secured shattered, hurled into the ranks of the permanently impoverished, represent the vanguard, if you will. But those who will never live the lives they thought they would, they are the explosive mass.
Then Friedman makes an outstanding observation:
I think the reason things are so calm — occasional riots hardly count — is that no one really believes that they won’t awake from the nightmare. There is a firm belief that this period will end. The denial of what has happened is not confined to Spain.
When the denial washes away; when one million young, unemployed, Spaniards join forces with 645,000 young, unemployed French, 200,000 young Greeks without work and another 3.8 million young in the EU with no job to go to; when they wake up and realize that this nightmare is not going away… that is when politicians like the leaders of Golden Dawn in Greece will be there, ready to scoop up their rage, funnel their frustration into political action.
And transform Europe in a way that Stalin nor Hitler may have had wet dreams about, but neither of them was able to do.
Make sure to read the rest of George Friedman’s excellent article. He does not seem to understand the root cause of the crisis and therefore cannot prescribe any solution, but his projection of where Europe is heading is intelligent and well worth the time.
It has been said that those who cannot remember the past are condemned to repeat it. It has also been said that someone who repeats the same action over and over, expecting different results, is an idiot.
If so, the EU Commission is a bunch of condemned idiots.
Sorry for the colorful opening, but just when the Commission has started talking about backing off austerity, they are forcing Greece to put to work perhaps the most devastating austerity package to date. Without even a hint of remorse over the past, blaming instead the negative results of previous packages on “mistakes” by the Greek government, the Commission charges ahead with demands that Greece cut away 6.5 percent of its GDP in the next austerity round.
I am not even going to attempt to predict the social, economic and political fallout of this complete fiscal madness, though it might be a good idea to remember that in last year’s Greek election the Nazis returned to the European political scene. I will say this, though: the Germans tried a decade of austerity during the Weimar Republic. Greece is now six years down the same path.
Before we get to the report on more Greek austerity, let us first note a new report from Pew Research Center. It presents some seemingly bizarre data, showing that a majority of Europeans still support austerity:
The countries still backing cuts over spending included Italy and Spain, which are both in the grip of prolonged recessions made worse by their efforts to bring down government borrowing. On average, 59% backed further austerity in the survey, against 29% in favor of more spending to stimulate the economy.
You would expect the victims of austerity to demand something better. But in order to do so the Europeans would have to know of an alternative – and it does not exist in their world view. For a good decade now, the public policy debate in Europe has been almost entirely lopsided in favor of austerity. Everyone from leading economists to political leaders to business leaders have been telling the public for years that the alternative to austerity is Hell on Earth.
When people see no alternatives, then after a while they tend to believe that there are indeed no alternatives.
Besides, the very issue of austerity is technical in nature and not likely to stimulate the average Joe to go off looking for alternative views on his own.
One would think that the hardships suffered in, e.g., Greece and Spain would be enough to make the general public back off from austerity. After all, the benefits they have been promised from austerity never seem to materialize. This is a valid point, but at the same time, history is full of examples of man’s ability to accept and endure hardships in the name of some abstract goal. It will probably take an entire generation before Europeans start questioning the changes for the worse that they are now living through.
With this in mind, it is easier to understand why Greece – ground zero of European austerity – is entering yet another cycle of fiscal torture. From Fox Business:
Greece is on track to meet its budget targets this year and next but may have to make further cuts in 2015 and 2016, the European Commission said in a report that will provide the basis for a decision Monday on whether to release more bailout loans for the country. The report sums up the findings of the three institutions overseeing Greece’s bailout–the Commission, the International Monetary Fund and the European Central Bank–which sent a team of auditors to Athens earlier this spring to review the country’s finances.
As I explain in Austerity: Causes, Consequences and Remedies, a country will always see a reduction of its government deficit the year after an austerity package is implemented. Then, as the negative multiplier effects of austerity kick in, the budget improvement is reversed. That is why the European Commission is forecasting more austerity in 2015 and 2016. However, you only need to take a quick look at macroeconomic data from Eurostat to realize that the notion of no budget cuts in 2014 is optimistic.
And now, Fox News delivers the big number:
It is the first time in Greece’s three-year-old aid program that the country is deemed to have met its goals. In past years, a deeper-than-expected recession and government missteps led Greece to miss its targets. The draft notes that the Greek government has followed through on most of the austerity measures it promised for 2013 and 2014–also in sharp contrast with previous assessments of Athens’ efforts to ease its crushing debt load. ”The very large and highly front-loaded package of fiscal consolidation measures for 2013 and 2014–totalling over 6.5% of gross domestic product–agreed in the previous review has been largely implemented,” the report says.
Six and a half percent of GDP.
Let’s leave the technospeak behind for a moment. An austerity package of 6.5 percent of GDP means that government is going to increase what it takes from the private sector by 6.50 euros for every 100 euros that people earn. Not for every 100 euros it currently takes in – it is 6.50 euros for every 100 euros of GDP.
The 6.5 percent number is a net tax increase on the Greek economy. It does not matter what the combination is of spending cuts and tax increases: the Greek government is telling its taxpayers that it is going to raise the price of whatever it provides them by 6.5 percent of all the money that all taxpayers earn.
If all of the austerity comes in the form of spending cuts, and taxes do not go up, then government is saying “we are going to sell you a 2011 car at 2013 prices”; if all of the austerity comes in the form of tax hikes, and spending is not cut, then government is saying “we are going to sell you a 2013 car at 2015 prices”.
Either way, government will increase its net drainage from the economy by 6.5 percent of GDP, and front load the plan so most of it shows up in one year. All this in a country that has already lost 25 percent of its GDP in five short years, all due to austerity.
I would not want to set my foot in Greece over the next year.
Apparently, the EU Commission has an eerie feeling that something bad might come out of this. According to Fox Business they are quick to add fine print to their optimism:
Beyond 2014, the outlook is uncertain and depends “on the strength of the recovery and improvement in taxpayer capability to service their tax obligations,” the commission says. It estimates the country’s budget gap at around 1.8% and 2.2% of GDP in 2015 and 2016 respectively.
This is B.S., Barbara Streisand. They have made similar predictions in the past, all of which have turned out to be outlandishly optimistic. So long as they believe that austerity somehow will improve the performance for the Greek economy, they will continue to believe that the first-year effect of an austerity program will become permanent.
I would not want to be a Greek politician saddled with implementing this chainsaw massacre of an austerity program. Perhaps some of the elected officials in Athens are on the same page, or why else would they according to Fox Business be so eager to promise that “there will be no more belt-tightening”?
Fox Business does not elaborate on this. Instead they conclude their report with a couple of notable factoids:
The country is in its sixth year of a deep recession made worse by waves of austerity. Unemployment, already over 27%, is expected to continue rising.
So if they acknowledge that the waves of austerity have made the recession worse, then why doesn’t Fox Business ask the EU Commission why this particular austerity package would do the trick?
In case anyone is still in doubt what this new austerity package will do to the Greek economy and to Greek society, please re-read the statement above about unemployment.
The Greek government is sitting on one side of an open powder keg. On the other side the EU Commissioners are sitting, smoking big fat cigars. The Greek government is holding out an ashtray where the Commissioners are supposed to kill their cigars. It’s dark, so it’s hard to see the ashtray.
There’s the future of Greece for you.
Years of austerity and a bad economy have stirred up quite a bit of hostility in Europe against the EU. Political extremism is steadfastly gaining terrain. This is not surprising to anyone who is a regular reader of The Liberty Bullhorn, but it is news to the Eurocracy. And the resentment toward the EU has now grown to such proportions that it is beginning to seriously worry Europe’s political elite, especially one of the EU Commissioners.
More on that in a moment. First, let’s hear what a pale liberal in the European Parliament has to say about the same topic. From Euractiv:
The European Union should brace for “chaos” after the European elections a year from now if the surprise victories by renegade, anti-EU parties in recent Italian and British elections are any sign of what is to come, European liberal leader Graham Watson said. Watson, leader of the Alliance of Liberals and Democrats for Europe (ALDE), told journalists in Brussels that mounting euroscepticism could break the balance between the European People’s Party (EPP) and the Socialists and Democrats (S&D) in the European Parliament.
That is the least of his problems. His alliance ALDE has been behind the austerity policies that the EU has shoved down the throats of about 100 million Europeans. Those policies have the EU’s trademark all over them, so when people lose their jobs, lose their health care, see their college tuitions skyrocket; when they have to pay a lot more for food because the value-added tax has gone up; when young adults realize that they have no chance of ever attaining the standard of living that their parents have; well, where do Europe’s voters turn? To the liberals whose policies are destroying their lives?
Of course not. They turn to radical socialists as in Portugal, to old-fashioned hyper-statists as in France, to Nazis as in Greece or to complete nut jobs as in Italy. In short, they turn to anyone who gives a voice to ordinary people. The votes that went to Golden Dawn and other extreme parties were votes against a European political elite that no longer listens to those who feed them and give them legitimacy.
Back to Euractiv:
“The logic that has been behind the elephant marriage of the EPP and the S&D has always been the logic that between the two parties, they can guarantee having 62% of the MEPs, which is the co-decision majority,” said Watson. If the two main parties lose ground in the May 2014 elections and they get fewer than the 62% of the MEPs, or they are so close that they cannot guarantee a majority, politicians will face a more fractured European Parliament, leading to “chaos”. “Under those circumstances the two groups might work closer together to ensure that the European Union is governable,” said Watson.
Like this is the biggest of Europe’s problems. Greece is not governable, especially not after the EU’s austerity war on the country’s economy. Portugal is not governable. The Spanish government is walking a thin line without safety net between pleasing the Eurocracy and keeping the provinces from seceding. Italy is even more of a political chaos now than it was during the very turbulent 1970s.
But none of that matters when a Europhile liberal is worried about the future political composition of the only parliament in the free world that has no real legislative power.
Beppe Grillo’s surprise showing in the February parliamentary elections in Italy and the anti-EU UK Independence Party’s strong finish in recent British by-elections have eroded the power of the more traditional, Europe-focused political parties. Across Europe, fringe groups have seen a surge of support.
Please note how the UKIP is included as one of these “fringe groups”. This is revealing, as it shows how the EU Commission is becoming seriously worried about what the future might hold for them. One of its most ignorant members is from Sweden:
Earlier this year, the European Commission warned that political extremism was on the rise, spurred by a long economic crisis that has caused record-high unemployment and social exclusion on the continent. Support for far-right parties is growing, said EU Commissioner for Home Affairs Cecilia Malmström, urging European leaders to fight the rise of racist and populist rhetoric that pose a threat to the European project.
I knew her 20 years ago. She is a complete and utter political hack, totally willing to compromise with any value, any moral creed, any principle to climb the Eurocrat ladder. She wanted a top EU job already before Sweden was a formal member, and she has done absolutely everything in her power to get there. She has won one election, and one election only, and she did it based on a long list of promises of what she was going to accomplish as a member of the Swedish parliament. The second she got a chance to get on the track to become a Eurocrat, she walked away from her voters, her promises and her seat in the parliament.
This is the person who passes judgment on who people vote for.
Back to the Euractiv story:
If no strong action is taken, Malmström said, extreme political groups could gain wider support in the next European Parliament elections. “We need more European leaders to express their opposition to rising extremism. We must have the courage to stand up and protect our common European values. We must have all the courage to stand up for what we have agreed upon and protect our values that are now being challenged in many countries in Europe,” Malmström told a news conference on 28 January.
And who should they vote for, Ms. Malmström? Your kind? The kind who speaks out of both sides of their mouth? The kind who talks about “European values” and then forces governments in country after country to destroy the economic future of tens of millions of young people? The kind who thinks austerity is an abstract idea with no consequences in real people’s lives?
There is no doubt that the entire EU project is in deep trouble. But the reason is not that there are extremists marching on the horizon. The reason is that people like Cecilia Malmström have turned the idea of European unity into a political behemoth with career paths for those who are loyal to the bureaucracy and a democratic deficit that makes Russia look like a reliable democracy. The problems for the EU began the day when the EU Commission – including Ms. Malmström – decided to subjugate the Greeks by means of reckless spending cuts, destructive tax hikes and complete and utter disregard for the consequences of those policies for the man on the street.
Extremists like Golden Dawn are the consequence of the crisis, not its cause. And while we are at it, let me make crisp clear that the discussion here about political extremism has nothing to do with Britain’s new party, UKIP. They are by no means extremists. If anything, the UKIP is the ideological and moral disciples of Lady Thatcher: good, old-fashioned classical European conservatism at its best.
It’s been said that freedom is just another word for having nothing left to lose. While I disagree with the notion, I do believe it can explain to some degree why people make radical changes to how they vote in desperate economic times. If the so called democratic parties no longer listen to, let alone work for the best of, voters and taxpayers, then what does the middle-class family in Greece have left to lose if the Nazis take over? If the parties that claim to protect parliamentary democracy force an entire country through the fiscal grinds of austerity and destroy one quarter of that nation’s economy, then why should people expect life to become any worse if they put Hugo Chavez-style communists in power?
A chilling wave of political violence is sweeping across Sweden. None of this makes it in to European or American mainstream media. This is a shame because the situation in Sweden is destabilizing rapidly. Here are some examples of what is going on right now.
On March 29 Dispatch International reported (with the website’s own rugged translation from Swedish):
It is 1 PM on Saturday 23 March, still a full hour yet until the Swedish Defence League (SDL) is to hold its support rally for a democratic and secular society with free expression. The leftist political partyVänsterpartiet stands perched at the statue of Swedish king Karl X, encouraging those assembled to give the demonstrators from nearby Möllevångstorget a warm welcome. They have barely unfolded their banner with the slogan ”No Breivik soldiers in our streets” before all hell breaks loose in Stortorget. As if on cue, one firecracker after another goes off, and the city squared is drowned in red/green Bengal flames, while the counter-demonstrators attack the riot fence, and with a deafening sound carry it 20-30 meters backwards. It is like being in a war zone, where one becomes worried about surviving it. Although hundreds of police officers are in the streets in order to ensure safety during the SDL rally, they seem taken by surprise. They have permitted the counter-demonstrators to walk up to the outer riot fence, and seem not to have imagined that the counter-demonstrators would turn violent a full hour before the object of their hate, the SDL, was to appear.
The SDL members allegedly had to be transported out of the area under heavy police protection. It was only a matter of good luck that the rioters did not use anything more powerful than large, noisy and smoke-generating fireworks. That said, such devices can be dangerous as they are, and it is impossible to understand that the Swedish police tolerate their use in public, especially in situations like this one.
Barely a month later, Dispatch International reporter Ingrid Carlqvist – one of Sweden’s most experienced investigative journalists and co-founder of Dispatch International – had a terrifying experience while trying to cover a political event in the southern university city of Lund:
For more than 30 years, I have been a tough reporter who never hesitated to go on an assignment, no matter what was. I take journalism very seriously and know that when the media no longer write about what goes on in society, no longer scrutinize those in power, then democracy is on the skids. This past Monday I encountered the end of my courage. Right in front of several police officers and ordinary citizens, I was hounded away from the gravel area in front of AF-Borgen in the Swedish city of Lund. Furious, masked and hateful “anti-racists” threatened me, pushed me around and forced me to leave the place. As photographer Roger Sahlström saw what was happening and caught one of the craziest attackers by his neck, two police officers finally reacted and came to our corner of the gravel area. But as soon as Roger let go of the demonstrator, they left again – leaving us to our fate. With a whole gang of spitting and extremely hateful gangsters in front of us, we were forced to give up. For the first time in my life, I left an assignment before it was complete. … The hatred, in particular the white hot unreasonable hatred, is what scares me. What kind of people are these? Where do they come from? What has happened to these young people who claim to be good ”anti-racists”, but behave as at any time they would throw themselves at me and tear me to shreds? Without hesitating. In spite of the presence of the police 20-30 meters away. But they do not see me. Or do they not care?
On May 1 the nationalist Party of the Swedes, with roots in Nazi movements, marched through the city of Jönköping. They were confronted by very aggressive activists, who made several serious attempts at penetrating police lines. Just like at the event in Malmö in March the activists threw fireworks and other objects at the participants in the march. The activists also set to cars on fire, one of which belonged to a high-ranking official of the Party of the Swedes. The following video gives a glimpse of what went on (go here for the original news report in Swedish). At about 0:35-0:40 two minor fireworks explosions can be heard, and at 0:52 a larger piece of fireworks can be seen burning on a side street. None of the fireworks reached the march, thanks only to aggressive barricading by riot police. However, in other news reports the police admit that their abilities to keep the activists from attaching the marchers were stretched to the limit:
Scenes like the ones in this video are now so common in Sweden that they don’t make national headlines unless a number of people are hospitalized as a result of the violence.
The violent events in the streets only scratch the surface of the political violence currently plaguing Swedish politics. Recently a former member of parliament for the Swedish Democrats, Mr. Erik Almqvist, decided to leave Sweden for fear of his own safety. Reports the Swedish website Avpixlat:
Former member of parliament for the Swedish Democrats, Erik Almqvist, announces that he is moving to Hungary. A main reason is that Almqvist is the subject of serious threats from hateful, violent leftist movements but is no longer eligible for personal protection from the parliamentary security service that he had while he was a member of parliament.
Mr. Almqvist’s party, the Swedish Democrats, is a patriotic party of the same brand as UKIP in Britain or FPÖ in Austria. It has nothing in common with the Nazi-rooted Party of the Swedes, except a skepticism toward immigration. However, while the Party of the Swedes are calling for ethnic cleansing in Sweden, the Swedish Democrats want to preserve Swedish culture and have a sensible level of immigration, tuned to what the country’s cultural, social and economic stability can absorb.
Ever since the Swedish Democrats made national headlines in 2006 by capturing many seats on city and county councils, their leading officials have been targeted by serious, politically driven and often very violent attacks. Officials of the Swedish Democrats have been assaulted in the public and at events organized by the party. National chairman Jimmie Åkesson admits to sleeping with a baseball bat next to his bed – despite the fact that he and many other party officials have bodyguards provided for them by the parliamentary security detail.
Many Swedish Democrat officials have also been attacked in their homes, including window smashing and arson attacks. One example is Mr. Ulf Prytz, precinct captain of the Swedish Democrats in the city of Ängelholm. On March 1 he was attacked in his own home. He was badly beaten, but recovers from the incident without permanent physical harm. However, in the weeks both before and after the assault Mr. Prytz has been the subject of various forms of threats and harassment. On May 1, two months after the assault in his home, Mr. Prytz once again finds himself on the receiving end of vicious violence, clearly related to his political activities:
A cabin belonging to Swedish Democrat official Ulf Prytz burned to the ground on Wednesday – one in a series of incidents directed against the Ängelholm politician this year. ‘It is terrifying and I am considering quitting politics altogether’ Ulf Prytz said the day after the fire. … There have been a lot of incidents, worse than what happened [on May 1]. Twelve difference incidents.
Due to the ongoing police investigation Mr. Prytz does not want to elaborate. We will, however, return to his case and other examples of political violence in Sweden. The situation is spinning out of control and it is no longer entirely certain that the country will be able to hold an entirely impartial national election in September next year. For the first time since parliamentary democracy came to Sweden there is a distinct possibility that political violence will compromise the integrity of the election.
Amazingly, despite a century of evidence to its disastrous consequences, socialism still sticks its ugly face out in the public arena from time to time. Before the Berlin Wall fell its demagogues were trying to pick what they thought were the cherries out of the Soviet pie and present them as a palatable, even tasty option to Capitalism. Then the Soviet empire crumbled, and after a decade in the wilderness the socialist ranters came back with a vengeance.
They had found “global warming”.
We who went to school in the ’70s and early ’80s were told by our science teachers that the world was steadfastly heading for a new ice age. Science books came with frightening images of cities, far down in southern Europe, buried in ice and snow. On the horizon, a mile-thick glacier that slowly pushed south.
Some time during the ’80s the preachers of climate change stopped talking about the pending ice age. Perhaps they could not get enough research grants to continue to stay away from teaching at their colleges, so they invented a new climate change story: global warming.
A couple of years ago the climategate scandal put a big, fat nail in the coffin of the global-warming fairy tale. In January of this year news broke that there has been no global warming for 16 years now. By now, even moderately intelligent liberals should start wondering what their climate preachers have been up to, and why they can’t deliver the climate disaster they have promised for so long.
While the world is slowly beginning to see the light with sober eyes, many leftists have invested far too much of their careers in the global-warming fairy tale to let go of it. One of them is a South African socialist by the name of Jay Naidoo. Like so many other socialists of late, he is trying to use “global warming” as a moral carte blanche to impose his collectivist nonsense on his fellow man.
Naidoo is former minister of reconstruction and development in the South African government and currently chairs an organization called Global Alliance for Improved Nutrition. He gets plenty of space on the Euractiv website to rant about everything between “climate change” and poverty, except what really matters:
“The drought is brutal in the north of Kenya around Lake Turkana. The rains seldom come and the lake is drying up. So is the hope of the Turkana, a proud people. They are mainly pastoralists. But the grazing lands are fast disappearing as are the fish in the rapidly receding lake.
Right here, Naidoo has put the blame on the hardship of the Turkana on non-existent global warming. Without offering the slightest evidence to the claims he makes about their environmental situation, he takes it as the starting point of a long rant on poverty and the evil West.
Even more amazingly, in the next paragraph he tells us that the Turkana are the victims of lawlessness and anarchy – yet somehow the poverty of the Turkana is still caused by evil Capitalism:
Heavily armed marauding bands of bandits from the Horn of Africa regularly raid lands and seize the cattle of the Turkana. As one herder said, “They take our wealth and our food. Our cows are our bank. We are alone. There is no government here to protect us. It is the rule of the gun. Our homes are torched, our innocent are murdered. They want to drive us from our land. Our children are not safe. They must go to the city.”
Any common-sense minded person would immediately ask why the Kenyan government, who claims jurisdiction over the territory where the Turkana live, is not interested in enforcing the rule of law. Another question is why property rights are so weak in this part of the world. Could it be because socialists look down their nose at private property?
In the next sentence Naidoo takes all the blame for the poverty of the Turkana away from the thugs who assault them, as well as from the Kenyan government:
Here poverty is driven by climate change, a precursor to the new resource wars to be fought over water, land, food and competition over scarce resources.
Like mankind has never lived under resource scarcity before. Mother of all ignorance…
Any time the price of an item is higher than zero, it is because that resource is scarce. Scarcity, in fact, is one of the driving forces that makes a society evolve – it does not motivate societal evolution on its own, but it is one of the key ingredients. But scarcity is universal and affects all mankind one way or the other. We all have to adjust our lives to the fact that we cannot get everything we want, in an instant, for free.
The question is why some societies evolve under scarcity, while others don’t. The best and most obvious answer to that question is found on the Korean peninsula. South Korea, with a population twice the size of North Korea’s and on a smaller piece of land, is able to feed itself, clothe its population, cure the vast majority of their diseases, educate them and keep them safe. The North on the other hand cannot even feed its own children.
Most people would dismiss the comparison between South and North Korea with something to the effect that “well, everybody knows that Communism isn’t working”. But the point is that despite this knowledge – despite the glaringly obvious, ocean-wide difference between Capitalist South Korea and socialist North Korea – socialism is still given a valid presence in the global public policy debate. For some reason there are people who still believe that you can blend South and North Korea, yet what they find out too late when they try is that the ingredients from “North” that go into the blend are venomous to vital organs of “South”.
The very essence of socialism is the transferal of property rights from the individual to the “collective”, almost always represented by a government. The “collective” is given the right to seize parts or all of what the individual acquires through work, trade and investment. Yet when the “collective” is given this right there is a proportionate loss of rights for the individual, and with the loss of right to the proceeds of his work, trade and investment, the individual also loses the incentive to pursue those proceeds.
This is the first and most important reason why societies with socialist economies are poorer than societies that rely on Capitalism.
As for the Turkana in Naidoo’s story, their reason to evolve and become more prosperous is robbed from them by the thugs who can come and seize their cattle with impunity. The thugs have de facto become their socialist government that imposes a heavy tax on them.
Naidoo, of course, is blind to this fact. On the contrary, he continues to cast the blame for the Turkana’s poverty on everyone else except the thugs who steal their cattle. Euractiv again:
The poverty is chronic, systemic and leaves many in despair, abandoned by the political and economic elites of the world.
Then he globalizes his warped views:
That story is repeated in the many villages I have been to in the India subcontinent, in the slums of Africa and Asia where families live in a space that is barely bigger than the bathroom of middle class families. In these communities people feel that God has forsaken them. While we have undoubtedly made progress, when I see the official reports suggesting “Enormous progress has been made towards achieving the Millennium Development Goals (MDGs). Global poverty continues to decline, more children than ever are attending primary school, child deaths have dropped dramatically; access to safe drinking water has been greatly expanded…” I wonder when these gains will trickle down to the billion people I encounter at the edges of our humanity.
My native country, Sweden, was one of the poorest nations in the northern hemisphere back in the mid-19th century. It went from being an agricultural backwater on the northern edge of Europe to a dynamic economy with rapidly growing prosperity in the 1930s. What happened? Did the world suddenly give Swedes foreign aid? Did the rest of the world suddenly impose a hate-the-rich tax in order to give handouts to Swedish farmers?
No. The reason was the same that allowed industry and entrepreneurship to thrive and prosperity to grow all over Europe: limited government and respect for property rights. (That Sweden later abandoned those principles is another story.) The smaller a government is, the more concentrated it becomes on its only real function in society, namely to protect life, liberty and property. By contrast, the bigger government gets the farther away it will drift from that function. That is why socialist governments – which includes the Kenyan government – lose track of things like people’s right to the proceeds of their own hard work.
Hence the disaster in Turkana.
Back to Euractiv, where Naidoo starts pushing for a global welfare state:
What the bottom half of humanity sees is a new apartheid that divides a global rich and predatory minority from the overwhelming majority’s growing poverty, joblessness and social inequality.
And here we go. A man who purports to be some kind of compassionate caretaker over the poor in the world finally comes out as what he truly is: a socialist hate merchant.
People who live in free countries with democratic governments, who have the right to own the proceeds of their work, who get up in the morning, provide for their loved ones, obey the law and donate to charity – they are characterized as a “predatory minority” by Naidoo. People who live honest, decent, productive lives and do their best to be contributing members of society – they are castigated as “predatory” by Naidoo, simply because they happen to live in a rich, industrialized, free country.
Even worse, Naidoo’s rhetoric is aimed at those who create jobs for hundreds and hundreds of millions of people. Entrepreneurial visionaries like IKEA’s Ingvar Kamprad or Microsoft founder Bill Gates; industrialists like the Toyoda family; around-the-clock working corporate executives who make sure their businesses continue to provide the world with clothes, food, cell phones, medicines, light bulbs, tools, appliances, water purifiers and other essential consumer goods. All these men and women are a “predatory minority” in the eyes of Jay Naidoo.
This is the level that all socialists eventually sink to. Their world view is one of relentless, ongoing conflict. To them, people do not cooperate voluntarily. People do not by their free will take a job with a large corporation – they are forced into that job by the “system”. To socialists like Naidoo there is no other cooperation than that which is enforced by government.
Even more pathetic is the fact that socialists like Naidoo are so totally and utterly blind to the free will of individual human beings. Ask any young engineer who works long, hard hours for the car manufacturer Hyundai in South Korea if he has been forced into that job by an evil Capitalist. Ask him if he would rather live and work in North Korea instead.
When Naidoo resorts to referring to the high-productive people who take advantage of economic freedom as a “predatory minority”, he gives away his true identity. His rhetoric is nothing more than the same old, dingy class warfare rhetoric that socialists have been using for a century and a half by now – and what has that rhetoric given us?
It has given us the Gulag Archipelago; the Berlin Wall; the Killing Fields in Cambodia, Cuban prison camps and children starving to death in the streets of North Korea. And don’t forget the Third Reich brand of socialism, according to which the “predatory minority” should bear a yellow six-point star and be exterminated in death camps.
Wherever socialists have gotten the chance to identify a “predatory minority” they have brought about war, chaos, starvation, depravity and death.
Naidoo’s rhetoric is the same kind of divisive, aggressive, conflict-driving language that has caused so many wars, civil and other, around the world over the past century. Naidoo’s class warfare rhetoric fueled the Leninist revolution which ended up costing 25 million Russians their lives. Naidoo’s class warfare rhetoric falls in the same line as that which Josef Göbbels used to fire up the masses against a small, innocent group of fellow citizens. Naidoo’s class warfare rhetoric built an Iron Curtain across Europe and is still today being used to defend the North Korean tyranny.
It does not help Naidoo’s case that when he gets to the practical side of his rant, he focuses entirely on “equality” and totally ignores the variables that really matter:
We need to go beyond measuring progress as a set of narrow input and output indicators. We need to address the underlying drivers of poverty and that the data has hidden a growing social and economic inequality which has risen dramatically in the world.
Suppose Jack and Joe earn $1 per day on Monday. On Tuesday Joe starts manufacturing gobbletigooks in his basement. He sells them with great success and rapidly increases his daily income. On Wednesday he earns $2 per day, while Jack still earns $1.
Where there was income equality on Monday there is now income inequality. How is Jack worse off under income inequality than he was under income equality?
On Friday, Joe needs to hire help. He now earns $4.50 per day and hires Jack to do the simple manufacturing work at $1.50 per day. The income inequality is now bigger than ever, but comparatively low-earning Jack has increased his income by 50 percent thanks to Joe’s entrepreneurship.
How is Friday’s income inequality worse for him than income equality was on Monday?
Of course, socialist Naidoo does not answer this question. Instead he dismisses China’s enormous strides toward prosperity in the past two decades:
Poverty has been defined as an income of less than $1.25 a day. Because figures are not disaggregated what is ignored is the fact that China accounts for the bulk of this success. Sub-Saharan Africa, on the other hand, is not on track on its poverty reduction
Of course not. That region is still ruled by dictators and war lords, and its largest country, Nigeria, is being torn apart by radical, Medieval islamists whose respect for individual and economic freedom we know from the Taliban era in Afghanistan. Once again, Naidoo proves the point about the correlation between on the one hand the lack of respect for life, liberty and property and on the other hand prosperity and opportunity for all.
In his position as chair of a large lobbying organization, Jay Naidoo has considerable influence on the global public policy arena. His divisive, hate-mongering socialist rhetoric is wrapped in dangerously seductive, superficial compassion for the poor, yet when push comes to shove all he wants is more government, more bureaucracies and more redistribution from the rich to the poor. He totally ignores the economic mechanisms that bring about prosperity. He turns a blind eye to the forces that have successfully lifted more than a billion people out of abject poverty in the past two decades.
Jay Naidoo is the kind of person who would rather see everyone equally poor than everyone wealthy, if that meant some got wealthier than others.
At the end of the day, that is precisely what socialism is all about. It turns people into instruments for an idea, an ideology, reducing them to bricks in a game of political power.
Socialists have had a century to prove that their ideology can work. On every occasion where they have gotten the chance, they have failed. And they have failed on every account imaginable.
Socialism is nothing more than a highway to poverty, tyranny and serfdom – for all.
First you send your tanks in and pound away at schools, hospitals and private businesses. When people are laid off and flock to unemployment offices you direct your bombardment at those instead. When the unemployed and homeless former middle-class citizens go scavenging for food in dumpsters behind McDonald’s, you hammer away at them with yet another round of big-caliber fiscal ammunition. Then you tell everyone that this invasion may be a bit hard on them right now, but at some point, somewhere in the long run, their lives will get better.
When people still defy your fiscal army you keep fighting them until they have lost a quarter of their income and their jobs and their entire country has been transformed from a relatively prosperous European nation to an economic wasteland.
You keep going until your austerity storm troopers have wreaked havoc and destruction on country after country and reached the outskirts of Paris. Then, but only then, do you pause and try to brush off the image of a fiscal imperialist. From the EU Observer:
European Commission chief Jose Manuel Barroso on Monday (22 April) indicated that the EU’s budget-slashing response to the economic crisis has run its course. Speaking in Brussels at a meeting of European think tanks, Barroso commented that “while I think this policy [austerity] is fundamentally right, I think it has reached its limits.”
Of course. When austerity robbed the Greeks of 25 percent of their GDP, they got what they deserved. When Spain is risking regional secession and political and economic disintegration, and when Portugal is simmering at the point of civil unrest, that is all right and good in Barroso’s playbook.
In reality, what really concerns Barroso is the presence of public opinion in the way of his fiscal tanks. The EU Observer again:
In a reference to rising public discontent at the severity of spending cuts and tax rises, he noted that “a policy to be successful not only has to be properly designed, it has to have a minimum of political and social support.” ”We have to have tailor-made solutions for each country, we cannot apply a one size fits all programme to the European countries,” he added.
What exactly does this mean? Different combinations of tax hikes and spending cuts depending on what country you are in? More tax hikes in Portugal and more spending cuts in France? Do note that Barroso still believes in austerity – his only reason for not charging ahead to conquer France is that the French prime minister’s cabinet is not united in the desire to greet the invading austerity army at the border.
In the words of the EU Observer:
Barroso’s remarks are a further sign that Brussels is ready to give the likes of France, Spain and Italy more time to force through unpopular economic reforms to reduce their budget deficits. For his part, speaking at the same event, EU Council President Herman Van Rompuy conceded the economic crisis is “lasting too long. He added that “patience is understandably wearing thin and a renewed sense of urgency is setting in.” He underlined the need to “move faster on the reforms with the biggest immediate growth impact.”
The problem with Barroso and van Rompuy is that they have absolutely no idea of what really gets an economy going, nor do they have an interest in learning about it. Their only goal is in expanding their own power, and they have discovered that austerity is a formidable tool that can conveniently be applied to further that goal. Right now they are hesitant because France is a big chunk of real estate to bite off, and French politicians are a bit less inclined to bow their heads to the new fiscal masters than they were in Athens, Rome, Madrid and Lisbon.
As the EU Observer notes, the critics of the EU’s fiscal invaders have just been given more ammunition to use in the defense of their national fiscal sovereignty, as the EU Commission’s own economic forecasts…
make grim reading, especially for countries on the Mediterranean rim, which have been among the worst hit by the eurozone’s economic crisis. … Portugal and Spain saw their deficits swell to 6.4 percent and 10.6 percent of GDP, respectively, while Greece’ deficit rose to 10 percent. The ongoing recession also forced up average EU government debt levels to 90.6 percent, well above the 60 percent threshold set out in the EU’s Stability and Growth Pact.
In other words, the countries that have been subjected to austerity the longest, are the ones with the biggest deficit and GDP growth problems. Austerity is sold as a recipe for smaller deficits and stronger economic growth, yet the outcome is the exact opposite.
I have only one thing to say to my many European readers: don’t let yourselves be fooled by what Barroso says about austerity reaching its limits. He has stopped his barrage for now because you are paying attention. Once you let your guard down and look the other way, his fiscal stukas will be taking aim at your country again before you know what hit you.
I have written several articles about the decline of the African National Congress, South Africa’s ruling party, into a mess of corruption and power-grabbing socialism. Any common-sense minded observer can see that the ANC has lost whatever they had in the form of credibility and respect after the historic 1994 end to Apartheid. The economy is in poor shape, with private businesses struggling to stay afloat under a barrage of taxes, regulations and high crime; the majority of the blacks are trapped in poverty, either on the government dole or in very low-paying jobs, and far too many of them still live in squalor.
On top of that there is an ongoing genocide against white farmers, of proportions that clearly the ANC government must know about – yet they refuse to even acknowledge the genocide.
The massacre at Marikana revealed how the ANC government has lost its way and become just another superficially democratic yet de facto authoritarian socialist regime. This begs the question how far it really is from Sharpeville to Marikana.
Apparently, some within the ANC are beginning to ask themselves that question. According to the Mail and Guardian, Desmond Tutu is among the worried:
Tutu said at a ceremony in Cape Town on Thursday to celebrate winning the Templeton Prize, that South Africa became the “flavour of the month” when apartheid was abolished in 1994, the Truth and Reconciliation Commission was set up, and citizens were riding on the victory at the Rugby World Cup. “We can’t pretend we have remained at the same heights and that’s why I say please, for goodness sake, recover the spirit that made us great.”
He points to violence as one of the most pressing symptoms of the ANC’s failure:
“Very simply, we are aware we’ve become one of the most violent societies. It’s not what we were, even under apartheid,” he said. Rape, murder and the high number of road accidents, especially over the holiday season, were worrisome, he said.
But then he falls into the same old tirade that all socialists revert back to when their ideological map does not match reality:
Tutu added that one did not have to look at statistics to see that South Africa was one of the most unequal societies in the world, and the problem was underpinned by a lack of spirituality. “This is why we ought to be saying it is utterly blasphemous that we should still have people who live in shacks. It’s not politics, it’s religion.”
When it comes to solutions, though, he delivers nothing. All he says is that he hopes the young generation will fix the problems his generation caused:
According to Tutu it was everyone’s responsibility to see the divine in others, even in the man sleeping in the street. Tutu said he had great faith in the youth being able to deliver on this aspiration. “There is no question at all that young people know what they are looking for and almost all would say it’s a spiritual thing,” he said.
Not a very good strategy, especially when viewed against the backdrop of South Africa’s enormous problems. Another story from the Mail and Guardian speaks of rampant corruption in South Africa, which Tutu did not even bother to mention (inequality, though…):
On the edges of Diepsloot stands a half-completed municipal building. Once intended as a library and offices, it was surrendered to decay before it even came to life. A few years ago, it seemed to symbolise a governmental intent to recognise and modernise Diepsloot. Now it is just an unexplained shell, a free supply of building material for locals. It must have cost tens of millions of rand before construction was abandoned. One guesses that its halt was related to corruption: another dodgy tender to another incapable contractor.
Corruption and socialism go hand in hand. Socialism is the unabridged grab for power; corruption is the attempt by suppressed agents of the free market to survive in an environment of unabridged government power.
The Mail and Guardian insightfully recognizes this, though not in such blunt words:
After 1994 political commentators should have been wise to the likelihood that corruption would become a blight on our new democracy. The arms deal shows how the new government was immediately prey to an established global elite of corruptors, people well trained in statecraft, aware of opportunities for grand theft. Observers would have done well to point out, then, that the government would be at risk from a new generation of home-grown baby criminals, who would make corruption a growth industry and a redistributive system.
I cannot remember when I saw such a well-worded analysis of how corruption rides the coat tails of socialism.
Had political scientists stressed these risks at the time, our then bona fide government and its exhilarated, trusting citizenry might have been less naive.
A good point indeed. However, if you were around in 1994 and remember the euphoria surrounding the release of Nelson Mandela, the end of Apartheid and Mr. Mandela’s swearing-in as South Africa’s first black president, then you can also easily imagine what people would have said of you if you had sounded the corruption alarm at that time. The Mail and Guardian are asking for something necessary, yet undeliverable at the time. This, however, does not take away from their analysis of the destructive effects of corruption, which, they say…
involves the theft of value created through real economic production. It is the theft of money, originally collected as tax, intended for reinvestment in economically or socially productive parts of society. Instead, this value exits the economy. It cannot be invested in the real economy because it must be hidden. So it is salted away in hidden accounts, spent on imported luxury items, houses and cars.
Well, technically speaking the corrupted money re-enters the economy at this point. Some people get jobs building, renovating and maintaing those houses; people get jobs importing, selling and maintaining those luxury cars. But the point is well taken: the very economic activity where corruption takes place distorts the allocation of economic value, disrupts free markets and erodes, even shuts down the functioning of democratic government. Which may be the worst of all the costs that corruption inflicts on society. The Mail and Guardian concludes:
The most common mines for corruption are municipalities and the public education and health systems. For example, about R20-billion is stolen every year from the public and private health sectors. This theft makes people sick – literally. People who do not get treatment are less able to progress at school or work.
However, if the ANC government is ever going to be able to do something about the mess they have created, they have to sever their ties to their own dogmatic past and openly admit what has gone wrong during their two decades of being in charge of South Africa. It would take a lot more than Desmond Tutu’s candid but shallow attempt at speaking frankly; but even his short inroad into a very sensitive but even more necessary territory of political introspection is met with resistance from the ANC establishment. This is well illustrated by a story from The Times of Johannesburg about the ANC’s relation to South Africa’s old Apartheid legacy:
There is no contradiction between what President Jacob Zuma and Minister in the Presidency Trevor Manuel have said about the legacy of apartheid, the presidency said on Thursday. “Stating that the apartheid legacy and impact still exists and will linger on for a long time does not mean that the president is saying that public servants should use it to excuse laziness and incompetence,” spokesman Mac Maharaj said in a statement.
The controversy has to do with ANC’s eagerness to maintain Apartheid as a political tool, available for them to use whenever it is expedient:
“To suggest we cannot blame apartheid for what is happening in our country now, I think is a mistake, to say the least,” he said, in an apparent reference to the comments made by Manuel. “We don’t need to indicate what it is apartheid did. The fact that the country is two in one — you go to any city, there is a beautiful part and squatters on the other side — this is not the making of democracy and we can’t stop blaming those who caused it,” said Zuma.
So after the ANC has been in charge for two decades, President Zuma thinks it is perfectly fine to continue to blame Apartheid for the fact that millions of black South Africans live under worse conditions now than they did under Apartheid. He is betting in part on the fact that all South Africans 25 or younger will have no real personal experience with Apartheid and therefore no independent memories of what life was like back then.
Personally, I always found Apartheid a totally unacceptable, race-based, government-imposed invasion in people’s private lives. It was a reprehensible institution that does not belong in any society with modern aspirations. But just as it is important to recognize the wrongdoings of the Apartheid regime, it is crucial for the ANC to recognize how its policies have actually made life worse for most South Africans.
In a matter of speaking, when the ANC came to power it sat down at a table already laid for them, with food on the plates. There was a well-working economy, relative peace except for the violence stirred up by the ANC. Farming, mining and manufacturing were thriving. The one big thing missing was racial equality.
The ANC could easily have accomplished that by simply removing restrictions for the black population. But they did not stop there. They went ahead and started building a massive welfare state, soaked in corruption and spiced up with a vengefulness that to date has cost thousands of white farmers their lives.
The vengefulness and bitterness over years of Apartheid was certainly genuine to many, but to the new political elite it became a power tool, an emotional button to push when they wanted the masses to forget that their lives were actually deteriorating under the new, “democratic” regime. As the ANC’s notorious failures are stacking up, their leadership is desperately trying to hold on to their old way of ruling – not governing – a nation that is at least as divided today as it was under Apartheid. Only for different reasons.
Fortunately, some are trying to point out that the emperor is naked. The Times again:
Speaking to reporters on the sideline of a government leadership summit last week, Manuel said the government should take responsibility for its actions when it came to service delivery. “We [the government] should no longer say it’s apartheid’s fault. “We should get up every morning and recognise we have responsibility. There is no longer the Botha regime looking over our shoulder. We are responsible ourselves.” Addressing public servants at the summit earlier, Manuel said the government had run out of excuses and had failed the people of South Africa repeatedly in terms of service delivery. “We cannot continue to blame apartheid for our failings as a state,” he said in speech prepared for delivery. “We cannot plead ignorance or inexperience. For almost two decades, the public has been patient in the face of mediocre services. The time for change, for ruthless focus on implementation has come.”
This is the kind of attitude that can save South Africa. It falls well in line with what Desmond Tutu is trying to say.
President Zuma, on the other hand, holds on to the old ANC rhetoric:
Zuma said: “While wanting to see change happening fast in every corner of the country, we are under no illusion that South Africa will automatically and comprehensively change in only 20 years. That is impossible.” However, Zuma said as leaders of public servants, the government had to work harder, faster and more efficiently to ensure true freedom reached the poor and working class in a shorter time.
Nothing is impossible in 20 years. Look what the former Communist countries in Europe have accomplished in less time. Look at the transformation of China, the rise of India… President Zuma is using Apartheid the same way some black American grievance merchants are trying to use slavery (which ended a century and a half ago) as an excuse for why many black neighborhoods are poor, unsafe and socially and economically destructive.
The ANC has become the same authoritarian power machine that the Apartheid government was before them. Its effects on the economy and on society as a whole is even worse, though, because they are both ideologically arrogant (a character trait they share with the Apartheid regime) and economically illiterate. This is a destructive combination that has already done a great deal of damage to South Africa.
It is time for the ANC to either man up or get out of the way. If they stay on their current course they will eventually destroy the prosperity that many South Africans still enjoy.
Poverty shared by all is indeed the ultimate price for socialism, but let’s hope it does not come down to that.
If you want to know why Europe is becoming an economic wasteland with nothing but a life in industrial poverty to promise its youth, you need look no further than at the report on so called macroeconomic imbalances that the European Commission released on Wednesday (April 10).
The Commission, which is the de facto executive office of the EU, is the main culprit in destroying the economies of several euro-zone countries – what with wiping out one quarter of the Greek GDP – and its members are as ignorant about macroeconomics as the Soviet communists were about consumer choice.
Yet despite this the Commission has authored a report about the “prevention and correction of macroeconomic imbalances” that is full of pretense and completely void of substance. The gap between the two is called the degree of perbertility (the phrase coined from the name, Per Bertil, of the hands-down most incompetent college professor I ever had) and illustrates two things:
- The arrogance of the speaker – the more you think you know, relative to your actual knowledge, the more arrogant you are; and
- The potential harm that the speaker can do.
A college professor does harm in that he pretends to teach students things he does not know. But his negative influence usually stops at the doorstep of the classroom. A group of powerful politicians, on the other hand, can do enormous harm by exhibiting a high degree of perbertility.
The EU Commission hits a perbertile home run with its report on “macroeconomic imbalances”. Let’s listen to what these clowns have to say:
The on-going economic and financial crisis has prompted a profound restructuring of our economies.
I just love it when people use the term “restructuring of our economies”. It shows that they have absolutely no understanding of what the term “structure” means. It gets even better when the EU Commission is referring to some kind of restructuring that did allegedly take place as a result of a recession.
The structure of an economy is the relative size and significance of its components over time. If, e.g., 75 percent of all output in an economy is from the agrarian industry, then the economy has an agricultural structure. If most of the output is industrial, either in the form of manufacturing or in the form of high-end services (engineering, consulting, high-quality health care, banking and legal services), then obviously the economy has an industrial structure.
There is also a structural aspect to the role of government. A big government plays a different structural role than a small govenment. That role does not change over a recession – it changes over a period of time that is longer than at least two business cycles.
Now back to the clownocrats:
This [non-existent restructuring] needs to be accompanied by a new kind of economic governance in the EU that recognises the interdependence between our economies and which builds the foundations for future growth and competitiveness that will be smart, sustainable and inclusive. Correcting the problems of the past and putting the EU on a more sustainable development path for the future is a shared responsibility of the Member States and the EU Institutions, as our economies are closely intertwined.
From the perspective of the EU Commission this “shared responsibility” is like a marriage where the normal give-and-take between loving and respectful spouses has been replaced with one party’s “You give, I take” attitude. For the better part of the Great Recession the EU has been dictating to member states that they need to subject their economies and their citizens to ever tougher, ever more destructive austerity policies. When people have expressed their disagreement with the policies, the EU has doubled down and even forced democratically elected officials to step aside for appointed bureaucrats.
That’s the EU Commission’s definition of “shared responsibility”.
The perbertility fest continues:
In the decade leading up to the outbreak of the crisis, not enough attention was paid at the EU level to developments in the economies of individual Member States. This was due in part to an insufficient recognition of the spillover effects of economic policies pursued in one Member State on the economies of other Member States – spillover effects that were particularly acute in the euro area, due to the close economic interdependence of countries sharing a currency.
So now the Commission is trying to say that they had no idea that countries that share a currency union would be closely tied together! The currency union has existed for a decade and more, and the volume of research that preceded its inauguration was so big it could fill the entire cargo bed of a Ford F-150. (I know – I had all of it stored in my office for some time.) The three main points of that research was: economic integration, economic integration and economic integration.
And this research was not published now… ten years after the currency union went into effect. It was published in the 1990s.
Are we to believe that the EU Commission was totally ignorant of that research when the Great Recession opened up? If so, we can only draw one conclusion: they are all a bunch of fools whose feet are far too small for the shoes they are wearing.
Had enough? If not, here’s more:
But it was also in part due to the lack of tools at the disposal of the EU to help detect, prevent and where necessary correct such imbalances. As a result, imbalances were allowed to develop unchecked, with negative consequences both for the economies of several Member States and for the proper functioning of the Economic and Monetary Union. Drawing on the lessons of the past and determined to avoid repeating similar situations in the future, the EU has put in place a new system of economic governance.
This is how the Commission explains why it is treating its member states like French geese, force-feeding them a debilitating dose of austerity and using loans from the ECB as the “enticer”. If the member states are good and compliant and do as they are told by the Commission, there is a nice little check from the ECB on the way to them in the mail.
When the Commission says it has now “put in place a new system of economic governance”, this is exactly what they are referring to. To paraphrase The Godfather of Chicago, the EU Commission turned the economic crisis into an opportunity to expand its own power even more.
Cleverly, the Commission disguises its new power grab in some technical terms that shield its true content from probably 90 percent of all the people who even bother to read their report on “macroeconomic imbalances”:
As part of this new way of working, on a proposal of the Commission, the legislator set up a Macroeconomic Imbalances Procedure (MIP) to help detect, prevent and correct problems at an earlier stage. The MIP – together with the reinforced Stability and Growth Pact, with its focus on sustainable public finances – is at the heart of the EU’s strengthened economic governance.
So from now on the EU Commission has institutionalized its austerity measures in the “Macroeconomic Imbalances Procedure”. It is now de facto the law of the land, primarily in the euro zone but secondarily across the entire EU. The austerity measures that destroyed the lives of some 30 percent of all people in Greece, that has ravaged Spain to the brink of provincial secession, that nearly destroyed parliamentary democracy in Italy and is now tearing apart Portugal; these austerity measures, which the IMF have found to be essentially ineffective, have now become part of European law.
No elected legislator has had the chance to vote on, let alone review the law. Nowhere in Europe have people had the chance to cast an up-or-down vote on whether they would like to give such enormous power over their livelihood – their lives – to such a small group of people.
This is as far from democracy as you can get without putting marching boots on the streets. This is Eurotarianism on full display.
I could go on from here. I could comment on the absolutely ridiculous statements in this report about how “structural rigidities” are to be blamed for the persistent recession in some EU countries – when in reality it is the EU’s own war of austerity on prosperity that is turning the continent into an economic wasteland.
But I’ve said enough about the report already. Anyone who feels that they need more of the Commission’s perbertile nonsense can of course download a copy of the report and see for themselves. Just remember to continue to come back here, to The Liberty Bullhorn, for a healthy, daily dose of clarity, common sense and crisp economic analysis!
As the world is now beginning to realize, the Cyprus Bank Heist was not a one-time, exceptional measure to save banks, never to be applied again. On the contrary, as I explained earlier this week the idea of confiscating bank deposits to save banks is catching on internationally.
This is a frightening perspective on the issue, because it means that we, the Western civilization, is about to turn our backs on one of the most important cornerstones of our prosperity: the property rights contract between banks and their clients.
There is no doubt that more governments are going to apply the Cyprus Bank Heist model to their own jurisdictions. You would think that this was bad enough – but it is not. Today we can report that the Cyprus Bank Heist model is soon going to expand into other assets than bank deposits.
More on that in a moment. First, let us note that the Eurotarians who govern the EU are temporarily in damage-control mode. Mario Draghi, the president of the European Central Bank, is trying to blow cute little smoke screens to draw people’s attention away from the devastating consequences of the Cyprus Bank Heist. EU Observer reports:
European Central Bank chief Mario Draghi on Thursday (4 April) admitted that an initial plan to tax small savers in Cyprus was “not smart”, but stressed that the island is “no template” for others.
Really… Every finance minister in the euro zone has endorsed it. Finland, Ireland and Estonia have vowed to use it themselves. The Canadian parliament will soon consider a bill that would legalize confiscation of deposits in “systemically important” banks. New Zealand is allegedly considering a similar law. Et cetera.
No, the Cyprus Bank Heist was “no template” at all. Not at all.
Back to the EU Observer works hard to draw people’s attention to small details instead of the big, freedom-shattering principled questions that the Cyprus Bank Heist give rise to:
Draghi said that the ECB had not been the source of the original (and subsequently rejected) idea to impose a tax on small savers, but did agree to it as part of an overall deal on 15 March. “That was not smart, to say the least, and it was quickly corrected the day after in the Eurogroup conference call,” Draghi said during a press conference in Frankfurt after the monthly meeting of the ECB governing council.
Draghi’s strategy is to get people bogged down in some kind of nonsensical debate over who should lose the most. Once people talk about technical details they have de facto accepted the architecture itself.
Draghi’s support for the Cyprus Bank Heist as a template for the future is revealed later in the EU Observer article:
“A bail-in by itself is not a problem, it’s the lack of rules known to all parties which can make a bail-in a disorderly event, and the lack of capital buffers. Absence of rules give this impression of ad-hoc-ary in these cases,” Draghi said. The quicker eurozone-wide rules are in place on how to deal with failing banks and who picks up the bill, the better, he indicated. “We would like these rules not in 2018-2019 as it’s foreseen, but way, way earlier – in 2015.” “It is very urgent that we have in place a European framework for resolution, restructuring and recapitalisation of the banking systems. These are the lessons I would draw from the Cyprus event,” he said.
So first you create an “event” – a government seizes private bank deposits – then you say that the lesson from the event is that we must do it again.
Why do I come to think about the staged Polish invasion of Nazi Germany just prior to September 1, 1939? Hmm…
But regardless of what hot air Mario Draghi is producing, others have already grabbed the torch and carried it to new places where they can set private property rights on fire. First off is the CEO of Unicredit, a large, international bank. From Goldcore.com:
The CEO of Unicredit Federico Ghizzoni said yesterday that it is “acceptable to confiscate savings to save banks.” He said that the savings which are not guaranteed by any protection or insurance could be used in the future to contribute to the rescue of banks who fail and that uninsured deposits could be used in future bank failures provided global policy makers agree on a common approach. He called for “a common solution in Europe” saying that the “EU should pass laws identical and shared in different member states”. Indeed he went a step further and called for a global coordination of deposit confiscations to rescue failing banks.
So what do you think will happen when all depositors have depositors’ insurance? Exactly! There will be a new clause added to some existing law that voids that insurance under “exceptional circumstances” such as when the government needs to seize your assets to save a bank – or a government with unsustainable deficits.
If we add Mr Ghizzoni’s words to the Canadian bill to make it legal for banks to “turn liabilities into assets”, and hold them up against the background of the European chorus of praise for the bank heist model, we get a clear, chilling and very dangerous picture of how this destruction of private property rights is going to spread to every corner of the world.
And once it has conquered all free nations, it will start spreading to other assets as well. Also from Goldcore.com:
An interesting development in the precious metals market is the largest Dutch bank, ABN Amro, has said that they will no longer be providing physical delivery of precious metals including gold, silver, platinum, and palladium bullion coins and bars. ABN AMRO, one of the largest banks in Europe announced in a letter to clients that it would no longer allow clients to take delivery of their metal and instead will pay account holders in a paper currency equivalent to the current spot value of the precious metal. Thus, instead of legally owning a risk free, physical asset (a bullion bar or a bullion coin), the bank’s clients are now unsecured creditors and are now exposed to the bank and the financial system – somewhat defeating the purpose of owning precious metals. The move highlights the importance of owning physical bullion either in your possession (be that be in a safe or vault in a house, in the attic, under the floorboards or elsewhere in your possession) or in a secure vault in a country that is stable and respects property rights.
Indeed it does. But it also highlights a new turn in how the global banking system is trying to prevent people from escaping the next Cyprus Bank Heist.
If you don’t want to keep your money in a regular bank account, but instead own something that we cannot physically take from you – then we are going to make sure we can physically take it from you anyway.
It is shocking to watch the spreading of the bank heist model. It is even more shocking when you realize that this is actually an assault on the oldest, currently existing form of private property right. The entire, modern banking system stands and falls with the banks honoring this property right. This very same banking system has done an enormous amount of good for all countries who have embraced the pillars of Western Civilization – among them economic freedom – and helped create prosperity and wealth of proportions previously unknown to man. Private banking, honoring property rights, has been instrumental in allowing desperately poor nations to lift themselves to a Western-style standard of living.
And now – what is this going to lead to? What will come of this, when the accumulation of wealth has been reduced to a form of fodder for banks and governments?
Are we watching the beginning of the end of free-market capitalism as we know it?
So far, no Cyprus Bank Heist legislation has been introduced here in the United States. Let us pray that it won’t happen. But if that happens, or if it becomes de facto law through some kind of international treaty, then… well, where do we stand then?
After four years of austerity, with drastic government spending cuts and higher taxes, the euro zone countries should have been on a path back to prosperity by now.
That is, if austerity had been the right medicine.
It was not, though, and there is ample evidence to prove that, both empirically and analytically. Today we can add even more evidence to the pile: in the lastest study of unemployment, Eurostat reports that the euro-zone countries that have taken the hardest austerity beating exhibit the highest unemployment numbers. This is logical to anyone properly trained in economics, and it appeals to common sense. However, Europe’s political elite is apparently as baffled as your average Austrian economist. Euractiv reports:
Employment and Social Affairs Commissioner László Andor called new unemployment rates released by Eurostat yesterday (2 April) “unacceptable” and “a tragedy for Europe”. The eurozone has hit the 12% mark for job-seekers, compared to 7.7% in the USA.
The main reason why the United States does not have a higher unemployment rate is that we have yet to subject ourselves to fiscal torture, a.k.a., austerity. That said, unless Congress does something before the end of this year we are going to face a significant increase in taxes as Obamacare goes into full effect. That will undoubtedly cost us the fledgling recovery we are in now.
Back to Euractiv, which reports that the 12-percent level of unemployment in the euro zone is up from 10.9 percent a year ago:
In total, the number of job-seekers in February jumped to 19,071 million, almost two million more that the previous year. For the EU 27, the total number of unemployed stood at 26,338 million, more that two million more that in 2012. … “Such unacceptably high levels of unemployment are a tragedy for Europe and a signal of how serious a crisis some eurozone countries are now in. The EU and its member states have to mobilize all available instruments to create jobs and return to sustainable growth,” said Employment and Social Affairs Commissioner László Andor, as quoted by spokesperson Chantal Hugues.
This is typical hot air coming from a representative of the bureaucracy that has forced country after country into the dungeons of austerity. Greece has lost a quarter of its GDP in four years under the EU’s boots of an unforgiving combination of spending cuts and tax increases. Portugal has been brought to the brink of social unrest by similar policies, and some provinces in Spain are moving toward secession – again a result of reckless fiscal policies.
Now the same commission that authorized – not to say ordered – the jobs-destroying policies is demanding – and presumably soon ordering – more jobs to be created.
On one topic, though, the commissioner’s empty words do have a bit of substance. Euractiv again:
“Young people need more support to acquire the right skills to increase their chances of getting a job and finding vacancies that exist. This is why the Youth guarantee, agreed by EU ministers on 28 of February, must be put in place urgently,” Hugues added.
While a “youth guarantee” won’t create any jobs, the concern for the young is at least a sign that there is some sort of contact with reality in the Eurotarian hallways. Perhaps the good commissioner and his colleagues have seen enough of the surge in activity by the Nazis in Greece to realize what is about to happen in Europe?
The concern for the consequences of high youth unemployment is also reflected in an article in The EU Observer:
Unemployment among the under-25s is particularly high. More than one in two young people are without work in Greece (58.4%) and Spain (55.7%). In Portugal, it is 38.2 percent and in Italy 37.8 percent.
Europe is turning into an economic wasteland, right before our eyes. Years of increasingly invasive regulations and taxes, combined with a work-discouraging welfare state, laid the groundwork for economic stagnation. Then, as the Great Recession came sweeping across the world, deficits opened up in the government budgets of Europe’s over-bloated welfare states. In response, ill-informed and arrogant members of Europe’s authoritarian political elite – the Eurotarians for short – began demanding destructive austerity policies in return for deficit-funding grants and other forms of short-sighted support.
The price for this colossal economic mismanagement of an entire continent is now being paid by the young. The EU Observer again:
The high unemployment rates, particularly among the youth, have led politicians to increasingly speak of a “lost generation” with little prospect of finding work. “We are in a double dip recession. Unemployment is up, up and up. When is growth going to come?,” Bernadette Segol, the head of the European Trade Union Confederation asked recently.
A glimmer of hope, though:
She suggested the persistent focus on austerity measures is leading to “doubts” about the benefits of belonging to the European Union. The eurozone’s growth prospects also compare badly with other regions. While the 17-nation currency area economy is expected to contract by a further 0.3 percent this year, the US economy is expected to grow 1.7 percent in 2013. China’s GDP is growing at about 8 percent a year.
I would not take the Chinese number very seriously. There is still a lot of political inflation in growth numbers coming out of that country. The ruling communist party demands regional leaders to “produce” certain levels of growth year after year. If the regions don’t deliver, their leaders are punished. Therefore, in order to keep their jobs and remain in good standing with the rulers in Beijing, many regions simply report the growth rates that the commycrats want.
That said, the Chinese economy would only have to grow at two percent per year to do better than the European economy – in itself a fact that speaks volumes to the complete and utter disaster that is unfolding in the Old World.
And worst of it all is that it is entirely politically generated. A Godzilla-size government filled with over-paid, politically arrogant bureaucrats listened to Austrian economists who suggested that austerity was the way forward. From the deliberate destruction of economic activity would, the Austrians said, rise a phoenix of prosperity and jobs.
Of course, that would all happen in the long run.
Europe’s young are waiting to learn just how long that run is going to be.