Militant Irish Nationalists still Planting Bombs in Northern Ireland

Posted by PITHOCRATES - April 28th, 2012

Week in Review

Ireland and England have a history.  And it isn’t a very good one.  With things getting really bad when the English went Protestant.  And the Irish remained Catholic.  Which aligned Ireland with England’s Catholic enemies on the continent.  France and Spain.  England would go on to conquer Ireland.  But it didn’t stop the Catholics from rising up against English rule.  So the English colonized Northern Ireland with Protestants in the 17th century.  Plantation of Ulster.  To dilute the Catholic threat.  With English Anglicans.  And Scottish Presbyterians.   Which did nothing to improve relations between the Irish and the English.  Even to this day (see Bomb defused in Northern Ireland would have caused devastation by Ivan Little posted 4/28/2012 on Reuters UK).

Two bombs planted by militant Irish nationalists, including one packed with enough explosives to have killed anyone within a 50-metre (yard) radius, were defused in Northern Ireland on Saturday, police said…

Army bomb disposal experts defused a similarly sized bomb in the border town of Newry this time last year. Another bomb was also found near the main Dublin-to-Belfast motorway earlier this month that police said had the potential to kill.

The other bomb also made safe by the army on Saturday was discovered under a parked car in Belfast where 80 people were moved from their homes for five hours overnight. There was no confirmation yet of its size…

The 1998 peace agreement called a halt to more than three decades of violence between mainly Catholic Irish nationalists opposed to British rule of Northern Ireland and predominantly Protestant unionists who wanted it to continue.

The British founded America.  While the Irish built much of it.  The British gave us our language, our representative government, our institutions and our economic principles.  Despite two wars we’ve remained close.  The Irish helped us to win our independence from the British.  And subsequent waves of immigration swelled our population.  And, later, our cities.  Filling our factories.  And building our infrastructure.

We have great numbers of both Catholics and Protestants living peacefully together.  Which makes this continuing struggle between Ireland and England difficult for many Americans.  For we probably would not be who we are if it wasn’t for both of these people.  We abhor this violence.  Especially when those who suffer this violence are not responsible for the sins of their distant ancestors.  But worse for Americans is that both the Irish and English are our ancestors.  And they’re not that distant from us.  Which is what makes this struggle so difficult for us.  They’re both family.  Unlike they are to each other.

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Japan’s Future is Bleak thanks to their Welfare State and their Aging Population

Posted by PITHOCRATES - April 28th, 2012

Week in Review

Japan made two great mistakes since World War II.  Establishing a great welfare state.  And interfering into the private sector economy during the Eighties.  Causing a great asset bubble.  And a deflationary spiral lasting a decade or two.  Which has compounded their first mistake (see As Japan strains to care for elderly, sacrifices begin by Chico Harlan posted 4/28/2012 on The Washington Post).

In recent months, Prime Minister Yoshihiko Noda has staked his job and bet his support on a tax increase designed to fund Japan’s soaring social security costs.

And the potential tax hike is only a sneak preview of the burdens to come as Japan grows into the world’s grayest society, a nation where two decades from now seniors will outnumber children 15 and younger by nearly 4 to 1.

Economists and government officials say that Japan, in the coming years, will probably raise the retirement age, again increase taxes and trim spending on everything from education to defense, all to care for its elderly.

Young Japanese — those entering the workforce amid two decades of stagnation — will face the greatest burden: They will earn less in real terms than their parents, pay higher pension premiums, receive fewer social services and, eventually, retire with a less-generous pension package.

Talk about inverting the pyramid.  Which is what social security is.  A pyramid scheme.  Which will work as long as those entering the scheme outnumber those collecting benefits from the scheme.  Because everyone pays a little to support the big consumers at the top.  But what happens when the big consumers at the top outnumber those paying into the system 4 to 1?  You suffer.  And sacrifice.  With a capital ‘s’.  Especially those at the bottom.  Who will pay in more than those at the top ever did.  While only collecting a fraction of their benefits.  If they collect anything at all.

This is the problem an aging population causes a spendthrift government.  You simply can’t spend at a greater rate than the rate your population is growing.  Because all government spending has to be financed by the taxpayers.  Those with jobs.  In the private sector.  So if the population growth rate falls (i.e., the population is aging) the tax contributions from the individual taxpayers must increase.  Basically enslaving the younger generation to the older generation.  The lesson of Japan should be a cautionary tale to governments everywhere.  For it will happen to you if you try to be too generous with your state benefits.

As it rose into an economic power after World War II, Japan created a generous social security net, with a universal health-care system and a universal pension system in which people were covered as employees or via a basic national program. But since the collapse two decades ago of the real estate and stock market bubble, the foundation of that system has started to crack. Tax revenue has dropped amid deflation, forcing Japan, whose debt-to-GDP ratio is highest among developed countries, to fund its social programs with more and more borrowing…

Kakuta [a 20-year-old college student] said he didn’t think the cutbacks to the current system were coming fast enough. And he doubted the ability of Japanese politicians to draft the right policies.

“To me,” he said, “it sounds more and more like we’re passing this on to the younger people. . . . I feel especially bad for the generation after mine. And that certainly doesn’t motivate me to have more children.”

Who would want to burden their children with a life of near-subsistence?  So it is not surprising that the younger generation may not have the same number of children that their parents did.  Which is the worst thing possible for the government.  For there will be fewer people entering the workforce.  While the population of those leaving the workforce will grow ever larger.  Making the burden on the young even greater.  For each individual will have to support more retirees.  The retirees will, in effect, become their children.

The U.S. is following the Japanese.  For we already know Social Security and Medicare are going bankrupt.  And now with Obamacare thrown in the mix the U.S. will run to catch up with Japan.  As the Europeans are trying to do as well.  Perhaps heralding the end of Western Civilization.  As we turn the hands of time back.  To when there was a ruling elite and impoverished masses.  Who will work for no one but the state.  In exchange for their meager state allowance.

Marx and Engels had it all wrong.  You don’t destroy the middle class with a revolution of the working class.  You do it with the welfare state.  And let the middle class destroy themselves.  By demanding ever more from the welfare state.  It may take a little longer.  But it is so much easier to do.  All you have to do is give people lots of free stuff.  And the people will take it from there.  To the European sovereign debt crisis.  Or to something worse.  To something like that lurking in Japan’s future.

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The US and UK following Keynesian Policies and Suffering Jobless Recoveries

Posted by PITHOCRATES - April 28th, 2012

Week in Review

The US is not the only country suffering through a ‘jobless’ recovery.  Which is just another way of saying continued recession.  Or double-dip recession.  The UK is having the same problems we’re having.  And using inept government policies to try and fix them.  Just like in the US (see A recession made in Downing Street – but not caused by cuts by ALLISTER HEATH posted 4/26/2012 on City A.M.).

The first problem has been the composition of the austerity package. Much of the tightening has been via tax hikes rather than spending cuts – capital gains, national insurance, stamp duty, value added tax, and now pasties and the rest. That was the wrong choice: lower taxes are good for growth, higher taxes are bad. The trick is to deliver austerity by cutting spending, not by hiking taxes.

The next issue is that the government’s supply-side agenda has failed miserably. By now, developers should have been set free to build new airports and even cities; the labour market should have been liberalised; job-reducing red tape eliminated; the top rate of tax abolished; mad EU rules abolished, and so on and so forth. Britain needed a revolution; it was granted a few over-hyped reforms…

…excessive inflation has slashed real incomes and real wealth; this, rather than cuts, is what has depressed spending the most…

Last but not least, banking rules. It was right to ensure banks held more capital and that credit became priced rationally – but the reforms have spiralled out of control…

What is most depressing is that the double-dip (if that is indeed what it is) will wrongly discredit austerity, even though the state remains incredibly profligate…

President Obama has broken deficit and debt records.  While he chastises the Right for irresponsibly spending beyond their means.  Demanding that they raise taxes to pay for this irresponsible spending.  That somehow higher taxes will fix all of America’s ills.  Or, at the least, address the social injustice of prosperity.  And happiness.

Both the UK and the US are steadfastly following the failed policies of John Maynard Keynes.  Demand-side Keynesian economics.  Tax and spend.  Because they’ve ‘worked so well’ in the past.  Of course they haven’t.  They never have.  And they never will.  What works are supply-side economics.  Those policies embraced by Margaret Thatcher.  And Ronald Reagan.  Who enjoyed real economic recoveries.  The kind that created jobs.

Politics never change.  Politicians dumb down public education so the people never learn the lessons of history.  That all of their policies are tried and failed.  So they make the same arguments every election cycle.  And the young believe in the goodness of these policies.  The fairness of these policies.  Never knowing the lives they have destroyed through the years.  Which is why politicians work so hard to get the youth vote.  Before they learn the truth.  And become conservative.

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Mary O’Grady cites the Problems of Latin America as too Much Socialism and not Enough Economic Liberty

Posted by PITHOCRATES - April 28th, 2012

Week in Review

Latin America has the will and the way for prosperity.  If only they give up on oppressive equality (see Destroying Latin America: Journalist Mary O’Grady on Populism, Protectionism, and Prohibition by Zach Weissmueller posted 4/28/2012 on Reason).

“The inequality produced by liberty: This, for the socialist, is the soft underbelly of pro-market rationale and the best place to attack,” says Mary O’Grady, a columnist who covers Latin America for the Wall Street Journal. “I would argue that it’s the intellectual stream that prevails in Latin America, and it’s the reason the region can not hope to reach its potential any time soon.”

O’Grady made a presentation at Reason Weekend 2012, Reason Foundation’s annual donor event. [Sh]e talked about why Latin American countries are so susceptible to socialism and identified the “three P’s” of “Populism, Protectionism, and Prohibition” as the primary sources of the region’s biggest problems.

To briefly summarize the ruling elite in Latin America are anti-capitalistic.  Because capitalism leads to income inequality.  So they discourage any capitalistic activity.  The politicians and rulers.  Intellectuals.  And academia.  Which squashes the entrepreneurial spirit.  Because entrepreneurs could become rich.  And that wouldn’t be fair.  So they nationalized industries.  And forced equality on the masses.  Which has kept the masses mired in poverty.  Yet when these same people leave their forced equality and move into capitalistic countries their lives improve.  They become entrepreneurs.  Further expanding the middle class.  Adding more to the vibrant economies they’ve joined.  All of which they could have in Latin America.  If only they stop oppressing the people in the name of equality.

Good presentation by Mary O’Grady.  Watching this video is 32 minutes well spent.

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Illegal Immigrants leaving the U.S. in Search of a Better Employment Opportunities

Posted by PITHOCRATES - April 28th, 2012

Week in Review

According to the Obama administration the economy has been improving ever since they took office.  There were all those shovel-ready jobs in the Obama Stimulus bill.  There was the Recovery Summer in 2010.  And all those falling unemployment numbers.  With the Obama administration touting the U-3 unemployment rate while the U-6 rate (that counts everyone who can’t find a full-time job including those who’ve quit looking and those who can only find part-time jobs) is still in Great Depression territory.  And even these U-3 numbers are quietly revised upward later. 

But there is an even better barometer on the jobs picture.  Illegal immigration.  Those people who enter the country illegally for a better job than they can find in the country they’re leaving.  If the numbers on illegal immigration reverses then you know the economy is really in the toilet.  And guess what?  They’re reversing (see For first time since Depression, more Mexicans leave U.S. than enter by Tara Bahrampour posted 4/23/2012 on The Washington Post).

A four-decade tidal wave of Mexican immigration to the United States has receded, causing a historic shift in migration patterns as more Mexicans appear to be leaving the United States for Mexico than the other way around, according to a report from the Pew Hispanic Center…

The reversal appears to be a result of tightened border controls, a weak U.S. job and housing construction market, a rise in deportations and a decline in Mexican birthrates, said the study, which used U.S. and Mexican census figures and Mexican government surveys. Arrests of illegal immigrants trying to enter the United States have also dropped precipitously in recent years.

Not every illegal immigrant is coming into America for nefarious reasons.  Most of them are coming in for the jobs so they can better take care of their families.  These are hardworking people.  Many of them Catholic.  For Mexico is Catholic.  So they have some pretty strong religious values.  They take care of their families.  And are good neighbors.  Even help their communities.  Even though they are here illegally it’s hard not to like these good neighbors.  And these are the people who are returning to Mexico.  For the jobs.  So they can better take care of their families.

This is both good news and bad.  The good news is that the Mexican economy is doing well.  Creating better opportunity.  And a stronger middle class.  Which will pick more people up out of poverty.  Without having to leave the country they call home.  Or leave their families.  Great news indeed for our friends south of the border.  The bad news is what this says about the American economy.  That after almost 4 years of the Obama administration and record government spending the economy only has grown worse.  With nothing to show for that exploding federal deficit.

It’s rather ironic.  For the prevailing wisdom on the Right says the Obama administration wants to make it easier for these illegal immigrants to vote.  For the conventional wisdom is that they are coming here for the free government handouts.  So they would vote for the party promising the most free handouts.  The Democrats.  But these immigration numbers blow this conventional wisdom to pieces.  For it would appear they are here for the jobs.  Not the free handouts.  So if we asked these immigrants if things are better for them in America than they were 4 years ago their answer would probably be ‘no’.  And probably vote Republican.  If they could vote.  Like I said, ironic.

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Medicare on Track to go Bust in 12 Years or Less

Posted by PITHOCRATES - April 28th, 2012

Week in Review

This election season we had the war on women.  Added to that in the coming years may very well be the war on seniors.  And unlike the war on women the war on seniors will be real.  Especially if Obamacare isn’t repealed.  Because the rising health care costs of an aging population will force rationing and death panels into the health care equation within the decade.  Or thereabouts (see Medicare trustee report hangs on uncertain assumptions by David Morgan posted 4/24/2012 on Reuters UK).

Medicare, the U.S. healthcare program for the elderly, should be able to stave off insolvency for the next 12 years, depending on a number of financial and political assumptions that may prove unrealistic, officials and other experts said on Monday…

But the outlook is based on assumptions that may be unlikely, including a scheduled 31 percent pay cut for doctors in 2013, which Congress is almost certain to override.

The forecast also assumes that a deficit-reduction agreement to slash Medicare spending by 2 percent a year can be sustained over the coming decade and that the U.S. Supreme Court will not overturn President Barack Obama’s healthcare reform law in June.

Do you know why Congress is almost certain to override that 31% pay cut?  Because that pay cut is already written into law.  So unless they override it doctors will lose 31% of their pay on Medicare patients.  And will probably stop seeing Medicare patients.  Which is why Congress always overrides this pay cut.  Because if all our seniors lose their doctors this very large voting bloc will be very unhappy.  And they will make their unhappiness known at the voting booth.  By throwing every incumbent out of office.

Let’s do a little math.  Let’s say someone is turning 65 this year.  And that they’ve worked since the age of 18.  Which means they’ve paid their Medicare payroll taxes for 47 years.  So they paid into the system for 47 years.  A system that can only pay for 12 years of their retirement.  Which takes them to age 77.  While the average life expectancy is about 79 years.  Which means, on average, those turning 65 this year will not be able to consume any health care services in the last two years of their lives.  Of course the bigger problem is this.  What about those who are 53 this year?  Who spent 35 years paying Medicare payroll taxes?  They’ll get nothing when they turn 65.  Worse, they won’t get a refund for 35 years of ‘premium’ payments.  Which means the money we pay into Medicare is not our money.  They spend it on others long before we even become eligible for benefits.  Which will add generational warfare to class warfare as the politicians spend beyond our means to pay for it.  Pitting one ‘greedy’ group against another.  Until they all finally turn on the ones responsible for our financial mess.  The politicians.

Medicare will fail because the population is aging.  And as people live longer they can have more health problems.  You put the two together and it’s a big problem.  You expand Medicare into Obamacare and you have a train wreck.  A shrinking population of healthy, younger people paying ever higher taxes to pay for an expanding population of older, sicker people.  In a word, unsustainable.  

This isn’t Canada.  Or the UK.  We have more people.  Far more people.  The growth in government spending to pay for Obamacare will require taxes the private sector can’t pay.  This growth of government will cross the Rubicon.  And the U.S. will go the way of the Roman Empire.  Brought down by her own unsustainable government spending.  Throwing much of Western Europe into chaos for a thousand years or so.  And the sad thing is that history repeats.  Chaos is on the rise already in Europe.  As people riot in protest against cuts in unsustainable spending.  Which often happens when you take away benefits from people long accustomed to them.  This is a very dangerous road to be on.  And Obamacare is hastening the U.S. down this road to catch up with the Europeans. 

You’d think someone by now would have learned this lesson of history.

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