George Rebane
Progressive organs around the world are starting to hyper-palpitate about the EU economy, sovereign debts, and unexpected violence in the streets. The Economist and Time are in general agreement that Europe is โabout to blowโ. And itโs all due to the planned and announced budget cuts because their governments are rapidly running out of other peopleโs money. The continentโs social programs have finally started taking down entire nations, and there is no end in sight to the spreading economic blight.
The post-Wall economic boom of 1991-2008 has come to an end. Eurozone and socialism was supposed to โbring about economic stability and remove traditional barriers to growth such as tariffs and regulations.โ Donโt get excited that these mavens have finally discovered that tariffs and regulations are frictions to business. No, no โ they only apply to trans-national barriers that must be removed, before growth can resume.
You see, the entire problem is that the EU has become a โselfish union in which flailing economies feed rising nationalism, angst over immigration, and simmering distrust between rich and less affluent countries.โ And again, all this because the continentโs political union is yet incomplete.
The 22aug11 issue of Time points out that, just like people, entire countries go for the gold ring in their own inimitable ways determined by their culture and resources โ no one holds back. And when a country provides economic freedom to its people, guess what, some people tend to do better than others. All of these factors are raining down on the European policy naifs, they never thought such inequalities could come about. Their models of socialist altruism prohibited these realities.
Today the UKโs Gini Index (0.34) is quoted to demonstrate its โwealth gapโ, which it is hoped that the uninformed will equate with the poor end getting poorer. But the importance of the GI as a bamboozling tool will grow in the coming months. You will see it being cited more and more as redistribution arguments grow in intensity. (GI = 0 denotes that everyone in an economy earns exactly the same amount โ โperfect equalityโ; GI = 1 says that all income goes to a single earner, everyone else gets zero.)
The GI says nothing of how its value relates to quality of life (QoL). The socialists, especially in the UN, hope that you will interpret lower values to come with an increased QoL. The truth is that the GI, like the Laffer curve, is double valued โ along with GDP, QoL goes down percipitously at both ends of zero and one. (RR readers were informed of this index here.)
The UN placed Americaโs GI at 0.40, and some may even place it higher. (And now that those dastardly Chinese have departed from the teachings of Mao and Marx, their income inequality and GI are increasing โ itโs already at 0.47, more unequal than ours.) The message here is that there must be better ways to hold good people down so that they can only earn their fair share. We in the US know, of course, that President Obamaโs administration has legions working on programs that do just that โ Social Justice ลฐber Alles!
There is grudging acknowledgement that EUโs politicians have long led America in vote buying policies that have brought them to the edge of an economic abyss. But according to Time, to โclean up their actโ would require a โreal political unionโ. In other words, they need more socialism with big guns to enforce the dictates of a big continental government. This will guarantee redistribution from the industrious to the laggards, and overcome such things as Germanyโs selfish hesitation to write the big checks. It is then that we see EU (and US) businesses no longer โstruggle with โฆ stagnating demandโ that is the real cause of this โ second Great Contractionโ (the first was during the 1930s).
There is no mention of higher taxes, stifling regulations, striking unions, unskilled workers, and all manner of other frictions that may have contributed to todayโs crisis. None of this seems to reside between any ears that sit in the European Parliament. Instead, the reason for the unrest is that the UK and US have a โlarge, immobile underclassโ. According to a survey, in the UK only two out of five feel they have upward mobility. In the US two out of three have the same feeling. (Given the literacy and skill levels of American adults, Iโm amazed that only one of three of us feel so encumbered.)
Coming full circle, the immediate blame for blood in the gutters is put on UK government cuts. But Prime Minister Cameronโs cuts have not yet taken effect, and data shows that people fared no better during the Tony Blair years. It then appears that the rioting has been fomented by a bit of class warfare; itโs all about who Cameron and his crowd are, and not what they have yet done.
The Brits are in a poor position to put down this large scale โthuggeryโ in their cities. Established during the previous centuries of cultural homogeneity, Englandโs constabulary have worked on policing through community โtrust and consentโ. It is clear to even the most socially liberal of them that this doesnโt work anymore within a multikulti society. After 190 years of unarmed bobbies, it took them only two days to get out the rubber bullets and water cannons. Full metal jackets are next. You cannot garner consent from people whose behavior is foreign to you, and whom you no longer trust.
The truth is that the British government long past gave up trusting its people โ the peopleโs guns were taken years ago. Now the new problem is โknife violenceโ, with hundreds recently arrested to confiscate knives. It will be sad entertainment to see what means are left to Her Majestyโs subjects for fending off their cretins who donโt observe such civic restrictions.
All this said and done, the only thing left that our media mavens and their economic experts recommend is a โwhiff of inflation to wipe out debtโ. In short, begin destruction of the euro, for a whiff never got anyone anywhere unless they followed Napoleonโs classical nostrum โ and, dear reader, it may yet again come to grapeshot to muzzle the masses.
Finally, with nothing but bankrupt policies to offer, the lamestream globalists conclude that โItโs the end of an era in which the West and Western ideas of how to create prosperity succeeded.โ And we are next.
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