The First, Second and Third Reich

Posted by PITHOCRATES - April 1st, 2014

History 101

The Holy Roman Empire was the First German Reich

At the height of the Roman Empire the Mediterranean Sea was a Roman Lake.  For the Romans controlled all the land around the Mediterranean Sea.  As the Roman Empire controlled most of the civilized world.  From Africa to Britain.  From Spain to the Middle East.  And its presence in Europe would shape Europe and the world we know today.  But before the Romans could shape our world the barbarians had to destroy theirs.

The northern frontier of the Roman Empire ran along the Rhine and Danube rivers.  West of the Rhine and south of the Danube was the civilized Roman Empire.  On the other side of those rivers were the Ostrogoths, the Visogoths and the Vandals.  Barbarians.  Germanic people.  Who would sweep down (along with the Huns from Central Asia) and conquer the Western Roman Empire.  With a Germanic chieftain, Odoacer, deposing the last Roman emperor in the West.  Romulus Augustus.

After about 3 centuries Charlemagne, King of the Franks (Germanic tribes in and around modern day France), would unify Western Europe.  In a Christian kingdom.  Pleasing Pope Leo III.  Who went on to crown Charlemagne emperor of the Roman Empire.  But after he died his empire broke apart.  Meanwhile to the east Otto I was unifying the Germanic tribes into a single kingdom.  A German empire that stretched from northern Italy to the North and Baltic seas.  Encompassing a huge swathe of Central Europe (including but not limited to modern day Germany, Austria, Belgium, Czech Republic, The Netherlands, Switzerland, France (eastern lands), Italy and Poland).  A Christian empire.  Pleasing Pope John XII.  Who crowned Otto emperor.  And the First Reich (the first German empire) became the Holy Roman Empire.

Winning the Franco-Prussian War ushered in the Second German Reich

The First Reich would last for about 850 years.  Coming to an end in 1806 when the last Holy Roman Emperor, Francis II, abdicated after fighting and losing to Napoleon.  Who reorganize it into the German Confederation.  And reduced the First Reich to a French satellite.  Up until this time there were two large powers in the Reich vying for power.  Austria in the south.  And Prussia in the north.  Otto von Bismarck was a Prussian.  And Prussia was a militaristic nation.  That believed less in diplomacy and more in power.  And Bismarck would use force to unite the German states into a Prussian-dominated Germany.  While getting rid of its rival.  Austria.

War followed.  The Austro-Prussian War (1866) ended the German Confederation.  Prussia replaced the German Confederation with North German Confederation that excluded Austria.  This confederation included much of the northern lands of the First Reich.  To sooth the feelings between the north (led by Prussia) and the south (led by Austria) Bismarck made the French declare war on Prussia.  And when they did the southern German states sided with Prussia.  The Prussians and Germans moved quickly into northern France.  And after a long siege of Paris the Germans won the Franco-Prussian War (1870-1871).  They took back a lot of lands lost to France.  Including Alsace-Lorraine.  Much to the chagrin of the French.  And unified the German states into a German Empire.  The Second Reich.

The German Empire industrialized.  Greatly increasing its economic and military might.  Shifting the balance of power in Europe.  Germany was now the most powerful nation in Europe.  Which concerned the other powers of Europe.  So they began to enter treaties with each other.  Such that if Germany attacked one nation another nation (or nations) would declare war on Germany.  To provide a deterrent against German aggression.  And rebalance the balance of power in Europe.  But then Archduke Franz Ferdinand of Austria, heir to the Austro-Hungarian throne, traveled to Sarajevo.  Where Gavrilo Princip assassinated him.  Pushing the first domino in a sting of dominos to fall as all of Europe honored their treaties.

The Third Reich was the Largest and Shortest-Lived German Reich

Austria-Hungary invaded Serbia.  In support of Austria-Hungary Germany invaded Belgium and Luxembourg on their way to France.  Causing the United Kingdom to declare war on Germany.  In support of Serbia Russia declared war on Austria-Hungary.  Allying with France and the United Kingdom.  The Ottoman Empire declared war on Russia.  Then nation after nation joined a side and entered the war.  Even the United States.  By the time it was all over some 16 million people were dead.  As were the Russian, Austro-Hungarian, Ottoman and German empires.  The map of Europe changed.  And the Second Reich was over.  Having lasted 47 years.  Large chunks of the Second Reich were taken away.  Including Alsace-Lorraine.  And much of Prussia.  Which was restored to Poland.  Which infuriated a lot of Germans.  Especially one German war veteran in particular.  A corporal.  Adolf Hitler.

World War I ended in an armistice.  Meaning that no one surrendered.  But the American entry into the war pretty much meant that the Germans were going to lose.  All the nations had long grown weary of the war.  But here was a fresh nation that could field fresh troops against Germany.  Which was exhausted.  It had nothing left.  Which gave the Allies the upper hand in the peace that followed.  And it was a bitter peace for the Germans.  Who were singled out as the sole responsible party for the war.  Well, one thing led to another and Adolf Hitler inaugurated the Third Reich.  And he set about retrieving all that lost German territory.  He annexed Austria.  The Sudetenland in Czechoslovakia.  Then he took the rest of Czechoslovakia.  A country that conveniently ran along the southern border of Poland.  And then he kicked off World War II.

The Third Reich invaded Poland.  Norway.  The Low Countries.  France.  And the Soviet Union (the former Russian Empire).  Reclaiming all lost German lands.  Including Alsace-Lorraine.  And unifying them once again.  Even adding on to them.  Through the use of force.  The Prussian way.  The Third Reich was the largest German Reich yet.  But it was the shortest lived Reich.  Lasting only 12 years.  By the time World War II was over some 70 million people were dead.  Making the Third Reich the bloodiest Reich.  The Allies helped to rebuild West Germany (East Germany was behind the Iron Curtain) to keep her out of the Soviet Sphere.  To give it a thriving free market economy.  And prosperity.  By providing full employment.  Which also helped to prevent gangs of unemployed young men from getting nationalistic fervor.  Again.  West Germany integrated into the west.  Away from the Soviets.  And away from her Prussian past.


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Posted by PITHOCRATES - March 27th, 2014

Politics 101

Twice in little over One Century an Enemy Invaded and Overran Russia/the Soviet Union

On June 24, 1812, Napoleon’s Grande Armée invaded Russia.  And made it all the way to Moscow.  Which they took.  But the Russian army didn’t want anything to do with Napoleon or his Grande Armée so they kept retreating in front of it.  Foiling Napoleon’s plans of engaging and defeating the Russian army.  While drawing them deeper and deeper into Russia.  In a scorched earth retreat.  Leaving nothing for the French.  Making it difficult to feed his massive army.  Then the bitter Russian winter came.  Having expected the Russians to have sued for peace by then they had no winter clothing.  Leaving Napoleon no choice but to retreat.

On June 22, 1941, Joseph Stalin’s ally, Adolf Hitler, broke the Treaty of Non-aggression between Germany and the Union of Soviet Socialist Republics.  And invaded the Soviet Union.  About one month later than planned due to some trouble their Italian allies were having in the Balkans.  The Nazi armies advanced through the Soviet armies and reached Leningrad, Moscow and Stalingrad.  Then the bitter Russian winter came.  And like the French the Germans had no winter clothing.  Having expected a victory before the onset of winter.  They tried to hold their ground as they froze and starved.  But the Soviets pushed them back.  Eventually all the way to Berlin.  But not after some 20 million Soviets died.

Twice in little over one century an enemy invaded and overran Russia/the Soviet Union.  Never again vowed the Soviets.  So when they chased the Nazis back into Berlin they kept the territory they were on after the war.  Which is why Estonia, Latvia, Lithuania, Poland, East Germany, Czechoslovakia, Bulgaria, Hungary, Romania and Albania became Soviet satellites.  Countries behind the Iron Curtain.  To provide a buffer to slow down another invasion before it reached Soviet soil.

For the Latter Part of the 20th Century the Soviets tried to extend their Communist Revolution to other Nations

Of course, following World War II it was the Soviets that had an expansionist policy.  A little thing called the communist revolution.  The assault on capitalism.  Replacing it with socialism first.  Then communism.  And as revolutions go they are fought.  With guns.  So the communist revolution was a perpetual state of war interrupted with moments of peace.  A war the Soviets forced onto their neighbors to get them to join them in their socialist/communist utopia.  Something their neighbors didn’t want.  And something their other neighbors, the Western Powers, would try to help them avoid.

The German capital, Berlin, fell in East Germany.  Berlin, however, was a city divided between the Western Allies and the Soviet Union.  The Western Allies supplied West Berlin via truck and rail transport.  Until the Soviets closed the borders.  In an effort to force West Berlin into the social utopia that was East Berlin.  Something the West Berliners wanted no part of.  So the Western Powers helped them by supplying the city via the Berlin Airlift.  Eventually the Soviets relented.  And opened the truck and rail transport into West Berlin.

The Soviets tried to spread their socialist utopia to other countries that didn’t want it.  Greece.  Turkey.  Iran.  South Korea.  The United States and the Western Powers helped these countries resist these Soviet advances.  Even fighting a shooting war on the Korean peninsula to push the Soviet and China backed North Korea out of South Korea.  So through the remainder of the 20th century the Soviets tried to extend the communist revolution to other nations.  While the United States tried to thwart their designs.  And stared each other down with their nuclear weapons in the Cold War.  Developing the doctrine of Mutually Assured Destruction (MAD).  Meaning that any country that started a nuclear war was going to lose, too, in that nuclear exchange.  It was mutually assured but it really was a warning to the Soviets.  Who had designs on conquering other nations.  Including the United States.  Who had no designs on waging war with the Soviet Union.

Geopolitics is about the Balance of Power

To balance the threat of the Soviet Union the Western Powers formed the North Atlantic Treaty Organization (NATO).  For Belgium, the Netherlands, Luxembourg, etc., had no chance by themselves against an attacking Soviet Union.  They did as a member of NATO, though.  Where an attack on one was an attack on all.  Which meant if the Soviets attacked the Low Countries they were also attacking France, the United Kingdom, Canada and the United States.  The Americans even deployed armor units in West Germany.  The Soviets replied with the Warsaw Pact.  A NATO-like organization between the Soviet Union and some of those countries in Eastern Europe they never left after the end of World War II.

And there was peace.  What we call the Pax Americana.  The American peace.  For it was the awesome might of the American military that gave NATO its teeth.  With troops deployed around the world.  Air forces stationed within striking distances of potential hotspots.  The mightiest navy ever to ply the oceans.  A huge nuclear arsenal.  And the greatest economy in the world that could pay for all of this while the American people still lived a happy and carefree life with all of the comforts a capitalist society could give.  Something the socialism/communism of the Soviet Union could not.  For the people in the Soviet sphere waited for apartments, cars and groceries.  Large extended families crowded into small apartments.  And people waited in lines at stores with empty shelves.  Which explains why the Soviets required a brutal secret police force.  The KGB.

People in the Soviet sphere who learned of how much better life was in the West tried to escape to the West.  This is why they built the Berlin Wall.  Not to keep West Berliners from sneaking into that socialist utopia inside East Berlin.  But to keep the East Berliners from escaping that socialist utopia.  For the only way you can get people to live in that socialist/communist utopia is by force.  And you have to spread the communist revolution not to make life better for people in capitalist societies.  But to destroy that better life across the border from communist societies.  To extinguish that beacon of liberty that keeps luring their people from their oppressive police state.  Something Russia is returning to.  As Vladimir Putin slowly but surely reassembles the Soviet Union.  Not to reconstitute the buffer to protect Russia from another invasion.  But simply because he wants to.  And can.  So far, at least.

Geopolitics is about the balance of power.  Some like to maintain a balance of power to keep the peace.  Like the Romans, the British and the Americans did with their Pax Romana, Pax Britannica and Pax Americana.  Where the prevailing superpower kept the peace.  While others are more interested in acquiring power than peace.  Like Napoleon Bonaparte, Adolf Hitler, Joseph Stalin and Vladimir Putin.  Who didn’t have strong economies.  And used force to get what they wanted.  Raw materials.  Food.  Or a warm water port in the Crimea.  And they are always looking for a weakness in their enemies to alter the balance of power.  For they were/are masters of geopolitics.  And want to redraw the borders of the world.  To restore the former glory of a past empire.  Or to realize some glorious destiny they believe God has planned for the nation.


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The Shifting Borders of Eastern Europe

Posted by PITHOCRATES - March 18th, 2014

History 101

By 1300 the Mongol Golden Horde took all of Kievan Rus

Vladimir Putin took Crimea from Ukraine.  Because he said the people there are more Russian than Ukrainian.  The people there wanted to be a part of Russia instead of Ukraine.  And that the land historically has belonged to Russia.  But that’s not true.  Yes, if you go back in time the land was Russian.  But if you go further back it wasn’t.  In fact the borders of Eastern Europe have changed so much that today’s borders bear little resemblance to what they have been over time.  You can watch 1,000 years of this change play out in a video on (see Watch as 1000 years of European borders change).  We’ll recap some of the changes in century intervals.

In the early 1100s the Western Roman Empire was gone.  In its place was the Holy Roman Empire stretching from central Italy to the North Sea.  Spain was mostly Muslim.  France was taking shape.  The Eastern Roman Empire (the Byzantine Empire) was still in modern day Turkey, Greece and the Balkans.  Going north there was Hungary.  Then Poland.  And Lithuania.  To the east of these countries was the large expanse of Kievan Rus.  Modern day Ukraine, Belarus and western Russia.  And the Crimea was held by the Turkic Cumans.  But this land would change hands many times in the centuries to come.

By 1200 the Byzantine Empire moved further north into the Balkans.  While the Muslims moved into Byzantine territory from the south.  Hungary, Poland and Lithuania adjusted their borders slightly.  The Holy Roman Empire pushed further west in Europe.  The Cumans pushed into southern Kievan Rus.  While Kievan Rus moved south between the Black and Caspian seas.  By 1300 the Mongol Golden Horde (northwest part of the Mongol Empire) took all of Kievan Rus.  Hungary pushed out her borders while Poland shrank hers.  With East Prussia taking her northern lands.  Lithuania reshaped her borders in part to East Prussia.  The Byzantine Empire was reduced to a small area of the southern Balkans.  The Mongols were in Crimea.

Russia, Prussia and Hungary reduced Poland to the Grand Duchy of Warsaw by 1800

By 1400 the Ottoman Empire had replaced the Byzantines in the Balkans.  Hungary adjusted her borders a little.  East Prussia remained the same.  Poland and Lithuania had joined in a commonwealth and pushed their border south and east.  Into the lands that were once Kievan Rus.  Except for Crimea and the area just north of Crimea.  Pushing the Mongols east.  As the Republic of Novgorod and Muscovy pushed down on the Mongols from the north.  By 1500 the Ottoman Empire pushed further into southern Europe.  Into Hungary.  Crimea.  And Poland-Lithuania.  Which pushed north into East Prussia.  While Russia replaced the Republic of Novgorod and Muscovy and pushed south into Poland-Lithuania.

By 1600 the Ottoman Empire adjusted her northern borders a little.  Poland replaced the Poland-Lithuania Commonwealth.  And pushed her border slightly east into Russia.  Russia pushed her southern border to the Caspian Sea.  Sweden was across the Baltic Sea into modern day Finland and Estonia.  On Russia’s most western border.  By 1700 Hungary had pushed the Ottoman Empire back into the Balkans.  Prussia formed on the Baltic Sea west of Poland.  With East Prussia to the east of Poland on the Baltic Sea.  The Russian Empire pushed west to the Baltic Sea.  Pushing the Swedes out of Estonia and part of Finland.  Russia had also pushed south through Lithuania and pushed deep into Poland.  The Ottoman Empire was still on the northern side of the Black Sea at Russia’s southern border.

By 1800 the Russian Empire had pushed their southern border all the way to the Black Sea.  Pushing the Ottoman Empire back.  The Russians also pushed their southern border further south between the Black and Caspian seas.  They pushed west through modern day Finland to the sea.  They pushed their western border through half of what was Poland.  Hungary pushed north into what was Poland.  Prussia and East Prussia joined together, taking land from Poland on the Baltic Sea.  Russia, Prussia and Hungary left little of Poland.   What was left of her lands became the Grand Duchy of Warsaw.

Vladimir Putin has said one of the Greatest Catastrophes of the 20th Century was the Collapse of the Soviet Union

By 1900 the Ottoman Empire was pushed almost completely out of the Balkans.  Greece and Bulgaria were now on the lands the Ottomans once held.  Russia pushed their southern border between the Black and Caspian seas further into the Ottoman Empire.  Hungary pushed her southern border to Greece and Bulgaria.  And west into Austria (which would later form the Austria-Hungary Empire).  The Germanic states had formed into a greater Germany that stretched from France to Russia.  Absorbing the Grand Duchy of Warsaw.  And even pushing into Russia’s western border.

Then came World War I.  And afterwards the borders of Europe were greatly changed.  The Austria-Hungary Empire was broken into Romania, Yugoslavia, Austria, Hungary and Czechoslovakia.  The eastern half (approximately) of the greater Germany was given to a reconstituted Poland.  With East Prussia bordering Poland on the north and separated from Germany (Hitler’s opening shots in World War II was to recover this lost territory).   To the north of Poland and East Prussia were Lithuania, Latvia and Estonia.  Russia was now the Soviet Union with her western border pushed slightly back from where it was before World War I.  Bordering Estonia, Latvia, Poland and Romania in the west.  And pushed back out of Finland.  The Soviet southern border between the Black and Caspian seas was pushed back a little.  And Turkey replaced what was left of the Ottoman Empire.

After World War II the Soviet Union pushed her border through Lithuania, Latvia and Estonia to the Baltic Sea.  After the Soviet Union fell Lithuania, Latvia and Estonia restored their borders.  And the former lands of the Kievan Rus are now divided between Russia in the north and east.  Belarus between Poland and Russia.  And Ukraine bordering Poland, Slovakia, Hungary, Romania and Moldova to the west.  The Black Sea to the south.  And Russia to the east.  With Crimea a part of Ukraine.  Well, until recently, that is.  As Russia has recently annexed Crimea.  And may be looking further west.  For this former KGB officer—Vladimir Putin—has said one of the greatest catastrophes of the 20th century was the collapse of the Soviet Union.  Which he began to put back together with his annexation of Crimea.


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Cult of Personality

Posted by PITHOCRATES - February 20th, 2014

Politics 101

Hitler received the Iron Cross for Bravery which carried a lot of Currency in a Militaristic Germany

Adolf Hitler could give a speech that fired up the masses.  People loved him.  The Nazis rose to power by winning elections.  People elected them because they liked what the Nazis were saying.  Things were not that good in Germany.  The victorious Allies blamed World War I on them even though all nations jumped in enthusiastically.  And then to add insult to injury the Allies made Germany pay reparations.  Burdening Germany with the cost of World War I.

This was especially galling as Germany didn’t lose the war.  The war ended in an armistice.  Which is a mutual cessation of warfare.  Not unconditional surrender.  And yet here was Germany.  Being treated as if they surrendered unconditionally.  It made a lot of people feel angry.  And betrayed.  Enter Adolf Hitler.  Who could tap into that anger and feelings of betrayal.

Hitler was a war veteran.  He served as a dispatch runner in World War I.  Wounded by artillery.  And blinded temporarily by mustard gas.  He even received the Iron Cross for bravery.  Although it may have had more to do with spending so much time with senior officers at headquarters that issued those dispatches.  But for a militaristic Germany an Iron Cross carried a lot of currency.

When the Reichstag burned down Hitler blamed the Marxists and turned Germany into a Police State

So Hitler was a brave war hero.  Even though he didn’t actually use a weapon.  Which was a good foundation to build on.  For war heroes don’t stab people in the back after fighting bravely for them in war.  Which is how many Germans felt about the politicians.  Betrayed.  Victims of the evil, conniving politicians.  So the people felt victimized.  And they were looking for someone to stand up for them.  To right these wrongs.

Hitler wanted to be an artist.  But when that didn’t work he turned to politics.  And learned what a good speaker he was.  He even studied how to become a better speaker.  How to look.  How to use his hands.  How to inflect his voice.  His speeches became very moving.  Very dramatic.  He made the defeated Germans feel better.  For he told them that it wasn’t their fault.  It was the politicians, and the Marxists, that stabbed Germany in the back.  And he was the one man that could do something about it.

When the Reichstag burned down he blamed the Marxists.  Who the Nazis shared power with in the Reichstag.  But didn’t want to.  It’s still debated who started the fire (the communists, the Nazis, others) but what it did was allow the newly appointed chancellor, Adolf Hitler, to urge President Hindenburg to suspend all civil liberties so they could hunt these communists down like the dogs they were.  President Hindenburg did.  And the government rounded up the communists.  With them out of the government the Nazis no longer had to share power.  And turned Germany into a police state.  To keep that power.

The Equation Brutal Dictators use to stay in Power is Victimization + Demonization + Emotion = Power

Hitler was charismatic.  He could give a powerful speech.  And after the Reichstag fire he controlled the people.  Using censorship and propaganda he made himself god-like.  The war hero.  The savior of the German people.  To undo all the injustice of the Versailles Treaty.  Standing up to the Allies.  Punishing those who stabbed Germany in the back (first the Marxists and then the Jews).  And restoring German pride.  Because he got even with those who wronged the German people.  The people loved him.  He could do no wrong in their eyes. No matter how much wrong he did.  Which he could hide from the people.  Thanks to his censoring of the free press.  And his state propaganda machine.  Which is why people packed stadiums and the sides of roads.  Showering him with their adoration.

Adolf Hitler was Germany.  Germany was Adolf Hitler.  His national socialism provided for the people.  In return the people were subservient to the state.  Germany was more important than the individual.  And Adolf Hitler was more important than Germany.  So anything he did was okay.  For he could do no wrong.  As there was nothing more important than Adolf Hitler.  For Hitler was a cult of personality.  Above the law.  And god-like.  Where people believed he was the only one that could save the nation.  And would do anything for him.  With the most devout joining the SS.  Fighting with unbounded fanaticism in combat.  And carrying out the Holocaust with ruthless efficiency.  They pledged their loyalty to Adolf Hitler.  Not Germany.  And would do anything for him.  Anything at all.  Even torture and kill their fellow Germans.  If that was what their Führer wanted.

This is how dictators were able to do some of the things they did. Because they were a cult of personality.  Mao Zedong.  Saddam Hussein.  Benito Mussolini.  Muammar Gaddafi.  Kim Il-sung.  Kim Jong-il.  Kim Jong-un.  These brutal dictators were/are all worshipped by their people.  At least the people they weren’t/aren’t torturing or killing.  For they had an equation they used to remain in power.  Victimization + Demonization + Emotion = Power.  Similar to the equation the Democrats use to win elections.  Victimization + Demonization + Emotion = Democrat Votes.  Where they victimize the people.  Find someone to demonize for this victimization.  Such as Marxists and Jews in Nazi Germany.  Or Republicans in the United States.  Then use state propaganda to disseminate their lies.  Like Joseph Goebbels did in Nazi Germany.  And like the mainstream media in the United States disseminates Democrat talking points.  And then use fiery rhetoric to incite the people’s emotions.  Like Hitler, Hussein, Mussolini, Gaddafi, Kim Il-sung, Kim Jong-il, Kim Jong-un and every other cult of personality did.  Like these ‘god-like’ people still do today.


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Marx, Lenin, Trotsky, Stalin and the Soviet Union

Posted by PITHOCRATES - February 18th, 2014

History 101

Marx called for a Dictatorship of the Proletariat where the Workers controlled the Means of Production

Karl Marx did not like capitalism.  Or middle class people that used money to make money.  The bourgeoisie.  Who exploit the working man.  The proletariat.  The bourgeoisie used their capital to exploit the labor of the working man (i.e., taking a risk and investing in land, factories, machinery, labor, etc.) to make money.  While the working man slaved away at slave wages creating all the great things we have in the world.  Of course, the proletariat could not do any of this unless others took risks and invested in land, factories, machinery, labor, etc.

This was just not fair to Karl Marx.  Because the industrial bourgeoisie had all the power.  And their exploitation of the proletariat was nothing more than a dictatorship of the bourgeoisie.  So Marx created a socio-economic philosophy to address this dictatorship.  Marxism.  And called for a social transformation.  For working men everywhere to unite.  And break the chains that bound them in the dictatorship of the bourgeoisie.  Calling for a dictatorship of the proletariat.  For the workers to control the means of production.  In a new system that replaced capitalism.  Socialism.  Until they could usher in the true ideal.  Communism.

In capitalism the bourgeoisie get rich creating neat things people discover and want to buy.  In communism there would be no bourgeoisie using the means of production to make a buck.  Instead, wise and selfless people would determine what was best for the people.  Instead of free markets allocating scarce resources economic planners would.  And they’d do it better.  Because they are selfless.  Creating large surpluses that would go not into some rich capitalist’s bank account.  But they would fairly distribute this surplus among the working class.  So society as a whole would be better off.  Sounds great.  But if the market didn’t make the decisions of what to produce who did?  As it turned out for Marxism that was a very difficult question to answer.

Leon Trotsky was a Like-Minded Marxist and the number two Communist behind Lenin

The Russian people were growing tired of World War I.  And Tsar Nicholas.  In fact they had it with the Russian Empire.  Even before World War I.  Although serfdom was abolished in 1861 the lives of peasants didn’t improve much.  There was still famine.  And the serfs had to pay a lot to their former landlords for their freedom.  So there was revolutionary fervor in the air.  And a few peasant uprisings.  As well as a few revolutionaries.  Such as Vladimir Ilyich Lenin.  Who was a Marxist.  His anti-Tsarist political activity got him arrested and exiled a few times.  In fact, during World War I he was living in exile in Switzerland.  Hoping that the Germans would weaken Tsarist Russia enough to kick off a socialist revolution in Russia.

When revolution did break out Lenin was anxious to return to Russia.  But being in Switzerland posed a problem.  It was surrounded by warring countries.  Lucky for him, though, the Germans were anxious to close the eastern front of the war.  And a little revolution in Russia could do just that.  So they transported Lenin through Germany and helped him return to Russia.  They travelled north.  Took a ferry to Sweden.  Then by train to Petrograd.  Formally Saint Petersburg (Peter the Great’s new capital on the Baltic Sea).  Which was later renamed Leningrad.  And then later renamed Saint Petersburg.  Where he would lead the Bolshevik Party.  And the world-wide socialist revolution against capitalism.

Leon Trotsky was a like-minded Marxist.  And an anti-militarist.  He had a falling out with Lenin but eventually reunited.  With Trotsky becoming the number two communist behind Lenin.  Trotsky addressed a problem with Marxism for Russia.  Socialism was to be the final step AFTER capitalism.  Once there was a strong industrial proletariat.  Russia didn’t have that.  For it was one of the least advanced countries in the world.  An agrarian nation barely out of the Middle Ages.  So Russia had to industrialize WHILE the proletariat took over the means of production.  Which brought up a big problem.  How could a backward nation industrialize while having a revolution?  How could they do this without other advanced capitalistic countries coming to the aid of the bourgeoisie?  Which Trotsky answered with his Permanent Revolution.  For the Russian socialist revolution to be successful there had to be socialist revolutions in other countries, too.  Thinking more in terms of a worldwide revolution of industrialized states.  And not just in Russia.  Something another Marxist disagreed with.  Joseph Stalin

Communist States have Guards on their Borders to prevent People from Escaping their Socialist Utopia

During these revolutionary times workers’ councils were appearing throughout the country.  Soviets.  Which helped stir up the revolutionary fervor.  In 1917 the imperial government fell.  The Bolsheviks killed the Tsar and his family.  And Russia fell into civil war.  Which the Bolsheviks won in 1922.  And formed the Soviet Union.  Or the Union of Soviet Socialist Republics (USSR).  That stretched from Eastern Europe to the Pacific Ocean.  Under the rule of Vladimir Ilyich Lenin.  Until he died in 1924.  Then Joseph Stalin took over after a brutal power struggle.  Even exiled Leon Trotsky.  And established totalitarian rule.  Stalin created a planned economy.  Rapid industrialization.  And collectivization.  As well as famines, forced labor, deportation and great purges of his political enemies.  To strengthen his one-party rule.  To protect the socialist revolution from a return of capitalism.

The Russian Revolution was the only successful socialist revolution in Europe.  The dictatorship of the proletariat did not happen as Lenin and Trotsky had envisioned.  So Stalin abandoned the idea of Permanent Revolution.  And adopted Socialism in One Country instead.  To strengthen the Soviet Union.  And not support a world-wide socialist revolution against capitalism.  In direct opposition of Trotsky.  To aid in the USSR’s industrialization Stalin made a pact with the devil.  Adolf Hitler.  And entered an economic agreement that would allow Hitler to build and test his war machine on Soviet soil that he would use in World War II.  Then came the Treaty of Non-aggression between Germany and the Union of Soviet Socialist Republics.  And the secret protocol.  Where Nazi Germany and the Soviet Union agreed to conquer and divvy up the countries located between them.

Trotsky did not like what the Soviet Union became under Stalin.  An oppressive dictatorship of Joseph Stalin.  Not the dictatorship of the proletariat envisioned by Karl Marx.  And he didn’t like that pact with a militarist Nazi Germany.  He predicted that Stalin’s USSR would not last.  Either suffering a political revolution like Tsar Nicholas suffered.  Or it would collapse into a capitalist state.  Stalin disagreed.  And killed him and his family.  Getting rid of the last of the old Bolsheviks.  Leaving him to rule uncontested until his death in 1953.  Exporting communism wherever he could.  Where it killed more people than any other ideology.  Until the great and brutal socialism experiment collapsed in 1991.  For Trotsky was right.  It could not survive when a better life was just across a border.  Which is why all of the communist states have guards on their borders.  To keep their people from escaping their socialist utopia.


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Thanks to Fukushima the Germans are Returning to Coal

Posted by PITHOCRATES - February 15th, 2014

Week in Review

Germany was going green.  Between renewables and nuclear power they were really shrinking their carbon footprint.  But then along came Fukushima.  And the melting of the core in a nuclear power plant.  Sending shockwaves throughout the world.  Causing the Germans to shut down their nuclear reactors.  Of course, that created an energy shortage in Germany.  And how did they fill it?  By building more new wind farms?  No (see Germany Is Relocating Entire Towns To Dig Up More Sweet, Sweet Coal by Kelsey Campbell-Dollaghan posted 2/14/2014 on Gizmodo).

Most of us think of Germany as one of the most energy-progressive countries in the world. But in recent years, it’s also increased its dependence on a form of energy that’s anything but clean: coal. And it’s demolishing or relocating entire towns to get at it.

While Germany has some of the largest brown coal deposits on Earth, a valuable chunk of it resides underneath towns that date back to the Middle Ages. Most of these are located in the old East Germany, and in the 1930s and 40s, dozens of them were destroyed to make way for mining. The practice ended when Germany established its clear energy initiatives. But now, dirty brown coal reemerging as a cheaper option than clean energy. And the cities are in the way again.

Sunshine and wind are free.  They may be unreliable but they are free.  But to capture that energy requires an enormous and costly infrastructure.  That could still fail to produce the electric power they need when the wind doesn’t blow.  Leaving them but one option to replace those efficient nuclear power plants.  Efficient coal-fired power plants.  Which is the only option they have.  Because renewables can never provide baseload power.  The power that is always there and can be relied upon.  Like nuclear power plants.  And those big, beautiful coal-fired power plants.  Rain or shine. Night or day.  Wind or calm.  Coal is always there for us.


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Cairo Speech, Treaty of Rapallo, German-Soviet Non-Aggression Pact, and Operation Barbarossa

Posted by PITHOCRATES - January 14th, 2014

History 101

President Obama’s Cairo Speech of Islamist Appeasement Emboldened our Enemies

Candidate Barack Obama said during the 2008 presidential campaign that he would talk to our enemies.  Without preconditions.  He would discontinue the gunboat diplomacy of George W. Bush.  Instead he would open a dialogue with the people who wanted to kill us.  Find out why they wanted to kill us. And then resolve those issues that caused our enemies to want to kill us.  Which was the core of his foreign policy.  Being nice to our enemies to get them to like us.  And once they did they would stop killing us.

Some say this started with the Obama apology tour.  With his message of appeasement in Cairo in June 2009.  Where he told our militant Islamist foes, those people who have a tendency to kill Americans, we only want to live together in peace.  And that there is a level of conservative Islamism that was acceptable to the United States.  When the Arab Spring began in Iran (a sponsor of anti-American/Western terrorism) in June of 2009 (after Mahmoud Ahmadinejad had won reelection despite reported irregularities) President Obama did nothing to support the Iranian protestors.  And the enemies of the United States took notice.  The Cairo speech of appeasement.  Not condemning the Iranian election results and telling Mahmoud Ahmadinejad that he had to go (as he would tell Egyptian president Hosni Mubarak).  The message was clear.  America’s enemies could do whatever they wanted.  Even become a rogue nuclear power (see Iran: US and others ‘surrendered before the great Iranian nation’ in nuclear deal by Alexander Smith posted 1/14/2014 on NBC News).

Iranian President Hassan Rouhani said world powers including the United States “surrendered before the great Iranian nation” in agreeing an interim nuclear deal with his country, state media reported Tuesday.

Iran reached the deal with the five permanent members of the United Nations Security Council — the U.S., Canada, Britain, China, and Russia– and non-member Germany…

Speaking to a crowd gathered in the oil-rich province of Khuzestan on Tuesday, Rouhani said: “Do you know what the Geneva agreement means? It means the big powers have surrendered before the great Iranian nation.”

Apparently appeasing our enemies only makes our enemies bolder.  And stronger.  Which is probably not a good thing.  North Korea is a rogue nuclear state.  But their need for food and energy make it unlikely that they will launch a nuclear weapon.  They have so far used the threat of doing so just to get what they desperately needed.  Food and energy.  Militant Islamists, though, want to rid the world of anyone who is not a militant Islamist.  Even if they have to die in the process.  Which they don’t mind.  Because for them this world is only the prelude for the far better afterworld.  Whereas the regime running North Korea has no desire to die.  They enjoy living in the here and now.  And know that won’t continue if they launch a nuclear weapon.

Neville Chamberlain opened a Dialogue with a Lying Adolf Hitler who lied to Chamberlain

The Allies blamed Germany for World War I.  And the Versailles Treaty made the peace following the war a difficult one for Germany.  Blame for the war, war reparations, loss of territories, emasculation (severe limits on Germany’s military strength), etc.  It did a number to German esteem.  Especially when they didn’t technically lose World War I.  The war ended in an armistice.  Where the combatants agreed to a cease fire as they were all exhausted by war.  Of course, America’s entry into the war would have most likely led to a German surrender.  For they were not yet exhausted by years of war.  And could extend the conflict indefinitely until Germany did surrender.  But that didn’t happen.  Which made for a lot of angry Germans when the Allies treated them as if they had surrendered unconditionally.  Setting the stage for an Adolf Hitler to come to power.  Which is what happened.

The war left the Germans isolated.   Russia pulled out of World War I before its completion and devolved into revolution.  Bringing the communists to power.  Replacing Russia with the Soviet Union.  These developments left them, too, isolated in the post-war world.  And then these two isolated nations found each other.  Signing the Treaty of Rapallo in 1922.  Renouncing any territorial or financial claims between them from the war.  And becoming trading partners.  Among other things.  Such as using Soviet soil to rebuild German armed forces in direct violation of the Versailles Treaty.  Where they trained for armor warfare.  Built an air force.  And even developed chemical weapons.  This new eastern friendship had another shared interest.  Poland.


Germany and Russia lost portions of Poland following World War I.  And they wanted them back.  But Hitler tested the waters first.  To see how the war-weary allies would react.  He marched troops into the demilitarized Rhineland in violation of the Versailles Treaty.  And the Allies did nothing.  Hitler sent an ultimatum to the Austrian chancellor to hand over power to the Austrian NSDAP (i.e., Austrian Nazi Party) or he would invade Austria.  The Austrian chancellor did.  And Hitler’s Wehrmacht marched triumphantly into Austria the following day.  And the Allies did nothing.  Then Hitler turned his eyes to Czechoslovakia.  And the Sudetenland.  Which he wanted to annex into the Third Reich.  And he was willing to do this with an armed invasion.  Something that got the war-weary Allies’ attention.  For the last thing they wanted in Europe was another war.  British Prime Minister Neville Chamberlain met with Hitler.  And opened a dialogue with him.  Finding Hitler to be a reasonable man.  And the Allies agreed to give Czechoslovakia’s Sudetenland to Hitler.  With Czechoslovakia having little say in the matter.  But it was for the greater good.  “Peace in our time.”  And it was the last territorial acquisition he wanted.  He promised.  So Hitler got the Sudetenland.  And within 6 months Hitler took the rest of Czechoslovakia.  Without firing a single shot.  Because the Allies were so eager to appease Hitler that they never considered that he was lying to them.  Which he was.

The Treaty of Rapallo allowed the Nazis to build the War Machine they eventually Unleashed on the Soviet Union

With the southern border of Poland secured thanks to the Allies giving Czechoslovakia to Germany it was time to recover their lost territory in Poland.  All they needed was a little help from their new best friend.  The Soviet Union.  And it came in the form of a non-aggression pact with the Soviet Union.  The Treaty of Non-aggression between Germany and the Union of Soviet Socialist Republics signed August 23, 1939.  Promising that neither would go to war with the other.  Or ally with a nation that does.  As well as the secret agreement to invade and divide Poland.  As well as dividing up Bessarabia, Estonia, Finland, Latvia, Lithuania, Romania, etc.  Then, on September 1, 1939, Hitler invaded Poland.  Launching World War II.  Something they couldn’t have done if it weren’t for their new best friend.  The Soviet Union.

After Poland came Norway.  Then France and the Low Countries.  The British held the Nazis off in the Battle of Britain.  Then came North Africa.  Yugoslavia.  And Greece.  Then came Operation Barbarossa.  Starting on June 22, 1941.  Something Hitler thought about since writing about it in Mein Kampf back in 1925.  Finding Lebensraum (i.e., living space) for the German people.  In particular the Bread Basket of Europe.  The Ukraine.  Which if you know your history, and your geography, was part of the Soviet Union.  Yes, that’s right.  Hitler lied to Joseph Stalin to get what he wanted.  Launching off points for the conquest of the Soviet Union.  A land he viewed as filled with sub-humans he would kill off with famine after taking their food.

The Soviet people paid a dear price for their leader’s treachery.  Enduring hell on earth on the Eastern Front.  With some 20 million dead by the time it was over.  It was these innocent Soviets who won World War II.  Who wore down the Germans with their wholesale dying.  At times 10 Soviets dying for every one German.  None of which would have happened if Stalin had read Mein Kampf.  Or if he didn’t make a pact with the Devil that led to World War II.  The secret agreements in the Treaty of Rapallo.  Letting the Nazis develop the war machine they eventually unleashed on the Soviet Union.  Which just goes to show you that you need to understand who your enemies are.  And once you do you cannot try to make nice with them.  For they will turn on you once you’ve served your useful purpose.  Just like Hitler turned on Stalin.  As Iran will turn on the United States after they served their useful purpose in getting them their nuclear weapons.  And when that time comes the cost of that war will be far greater than it would have been if it was fought before they had nuclear weapons.  With scenes from that war looking more like Hiroshima and Nagasaki than the hell on earth of the Eastern Front


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Post Office, Telegraph, Telephone, Cell Phones, Texting, Technology, Productivity, Savings, Investment, Japan Inc. and Eurozone Crisis

Posted by PITHOCRATES - August 13th, 2013

History 101

(Originally published August 28th, 2012)

Ben Franklin’s Post Office struggles to Stay Relevant in a World where Technology offers a Better Alternative

Once upon a time people stayed in touch with each other by mailing letters to each other.  Benjamin Franklin helped make this possible when he was America’s first Postmaster General of the United States.  And it’s in large part due to his Post Office that the American Revolutionary War became a united stand against Great Britain.  As news of what happened in Massachusetts spread throughout the colonies via Franklin’s Post Office.

In America Samuel Morse created a faster way to communicate.  (While others created this technology independently elsewhere.)  Through ‘dots’ and ‘dashes’ sent over a telegraph wire.  Speeding up communications from days to seconds.  It was fast.  But you needed people who understood Morse code.  Those dots and dashes that represented letters.  At both ends of that telegraph wire.  So the telegraph was a bit too complicated for the family home.  Who still relied on the Post Office to stay in touch

Then along came a guy by the name of Alexander Graham Bell.  Who gave us a telephone in the house.  Which gave people the speed of the telegraph.  But with the simplicity of having a conversation.  Bringing many a teenage girl into the kitchen in the evenings to talk to her friends.  Until she got her own telephone in her bedroom.  Then came cell phones.  Email.  Smartphones.  And Texting.   Communication had become so instantaneous today that no one writes letters anymore.  And Ben Franklin’s Post Office struggles to stay relevant in a world where technology offers a better alternative.

As Keynesian Monetary Policy played a Larger Role in Japan Personal Savings Fell

These technological advances happened because people saved money that allowed entrepreneurs, investors and businesses to borrow it.  They borrowed money and invested it into their businesses.  To bring their ideas to the market place.  And the more they invested the more they advanced technology.  Allowing them to create more incredible things.  And to make them more efficiently.  Thus giving us a variety of new things at low prices.  Thanks to innovation.  Risk-taking entrepreneurs.  And people’s savings.  Which give us an advanced economy.  High productivity.  And growing GDP.

Following World War II Japan rebuilt her industry and became an advanced economy.  As the U.S. auto industry faltered during the Seventies they left the door open for Japan.  Who entered.  In a big way.  They built cars so well that one day they would sell more of them than General Motors.  Which is incredible considering the B-29 bomber.  That laid waste to Japanese industry during World War II.  So how did they recover so fast?  A high savings rate.  During the Seventies the Japanese people saved over 15% of their income with it peaking in the mid-Seventies close to 25%.

This high savings rate provided enormous amounts of investment capital.  Which the Japanese used not only to rebuild their industry but to increase their productivity.  Producing one of the world’s greatest export economies.  The ‘Made in Japan’ label became increasingly common in the United States.  And the world.  Their economic clot grew in the Eighties.  They began buying U.S. properties.  Americans feared they would one day become a wholly owned subsidiary of some Japanese corporation.  Then government intervened.  With their Keynesian economics.  This booming economic juggernaut became Japan Inc.  But as Keynesian monetary policy played a larger role personal savings fell.  During the Eighties they fell below 15%.  And they would continue to fall.  As did her economic activity.  When monetary credit replaced personal savings for investment capital it only created large asset bubbles.  Which popped in the Nineties.  Giving the Japanese their Lost Decade.  A painful deflationary decade as asset prices returned to market prices.

Because the Germans have been so Responsible in their Economic Policies only they can Save the Eurozone

As the world reels from the fallout of the Great Recession the US, UK and Japan share a lot in common.  Depressed economies.  Deficit spending.  High debt.  And a low savings rate.  Two countries in the European Union suffer similar economic problems.  With one notable exception.  They have a higher savings rate.  Those two countries are France and Germany.  Two of the strongest countries in the Eurozone.  And the two that are expected to bail out the Eurozone.

Savings Rate

While the French and the Germans are saving their money the Japanese have lost their way when it comes to saving.  Their savings rate plummeted following their Lost Decade.  As Keynesian economics sat in the driver seat.  Replacing personal savings with cheap state credit.  Much like it has in the US and the UK.  Nations with weak economies and low savings rates.  While the French and the Germans are keeping the Euro alive.  Especially the Germans.  Who are much less Keynesian in their economics.  And prefer a more Benjamin Franklin frugality when it comes to cheap state credit.  As well as state spending.  Who are trying to impose some austerity on the spendthrifts in the Eurozone.  Which the spendthrifts resent.  But they need money.  And the most responsible country in the Eurozone has it.  And there is a reason they have it.  Because their economic policies have been proven to be the best policies.

And others agree.  In fact there are some who want the German taxpayer to save the Euro by taking on the debt of the more irresponsible members in the Eurozone.  Because they have been so responsible in their economic policies they’re the only ones who can.  But if the Germans are the strongest economy shouldn’t others adopt their policies?  Instead of Germany enabling further irresponsible government spending by transferring the debt of the spendthrifts to the German taxpayer?  I think the German taxpayer would agree.  As would Benjamin Franklin.  Who said, “Industry, Perseverance, & Frugality, make Fortune yield.”  Which worked in early America.  In Japan before Japan Inc.  And is currently working in Germany.  It’s only when state spending becomes less frugal that states have sovereign debt crises.  Or subprime mortgage crisis.  Or Lost Decades.


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With a Great Trust in Technology Germany may go all Green in Power Generation

Posted by PITHOCRATES - April 7th, 2013

Week in Review

In 2003 one power plant went off line for maintenance in Ohio.  As their electrical load switched over to other power lines the extra current in them caused them to heat up and sag.  Coming into contact with some tall trees.  And the electric power flashed over to the trees.  This surge in current opened some breakers and transferred this electric load to other cables.  Overloading these lines.  More breakers opened.  More lines disconnected.  And with the electric load switching around it caused some electric generators to spin a little wildly.  So they disconnected from the grid as designed to protect themselves.

Eventually this cascade of failures would cause one of the greatest power outages in history.  The Northeast blackout of 2003.  Affecting some 55 million people.  And taking 256 power plants offline.  Apparently there was a software bug in the computer control system that didn’t warn them in time to rebalance the grid on other power sources before this cascade of failures began.  Once the event was over it took a lot of time to bring the power back online.  Three days before all power was restored.  Because you have to reconnect generators slowly and carefully.  As you are connecting generators together.  If these generators are not running in phase with each other fault currents can flow between them.  Damaging them and starting another cascade of failures.

So the electric grid is a very complex network of generators, cables, switches and computer control systems.  The more generation plants added to the grid the more complicated the switching and the computer controls.  Which makes having large-capacity power generation plants highly desirable.  For it reduces the complexity of the system.  And their large power capacity makes it easier for them to take on additional loads when another plant goes offline or a cable fails.  It provides a safe margin of error when trying to balance electric loads between available generation.  In Germany, though, the politics of green energy may take precedence over good engineering practices (see Linked Renewables Could Help Germany Avoid Blackouts by Paul Brown and The Daily Climate posted 4/5/2013 on Scientific American).

Critics of renewables have always claimed that sun and wind are only intermittent producers of electricity and need fossil fuel plants as back-up to make them viable. But German engineers have proved this is not so.

By skillfully combining the output of a number of solar, wind and biogas plants the grid can be provided with stable energy 24 hours a day without fear of blackouts, according to the Fraunhofer Institute for Wind Energy and Energy System Technology (IWES) in Kassel.

For Germany, having turned its back on nuclear power and investing heavily in all forms of renewables to reduce its carbon dioxide emissions, this is an important breakthrough…

Kurt Rohrig, deputy director of IWES, said: “Each source of energy – be it wind, sun or biogas – has its strengths and weaknesses. If we manage to skillfully combine the different characteristics of the regenerative energies, we can ensure the power supply for Germany.”

The idea is that many small power plant operators can feed their electricity into the grid but act as a single power plant using computers to control the level of power…

The current system of supplying the grid with electricity is geared to a few large producers. In the new system, with dozens of small producers, there will need to be extra facilities at intervals on the system to stabilize voltage. Part of the project is designed to find out how many of these the country will need.

The project has the backing of Germany’s large and increasingly important renewable companies and industrial giants like Siemans.

If you are a heavy electric power consumer in Germany you might want to build your own power plant on site.  For if they go ahead with this they are going to create one complex and costly monster.  Which is why IWES and Siemens no doubt are on board with this.  For it would give them a lot of business in a recession-plagued Eurozone.  But the amount of switching and computer controls to make this work just boggles the mind.

Just imagine a night of high winds that shuts down all wind farms.  Which is something a wind turbine does to protect itself.  You can’t switch over to solar at night.  So you will have to switch that load over to the remaining power lines that are connected to active generation.  Heating those wires up.  Causing them to sag.  Perhaps flashing over to a tall tree.  If these lines disconnect from the grid will those small producers be able to pick up the demand?  Or will they disconnect to protect themselves from an overload?  Once the event is over how long would it take to bring all of these generation sources back in phase and back online?

If they move forward with this chances are that the Germans are going to learn a very painful and costly lesson about green energy.  It may make you look like you care but it won’t keep the lights on like a coal-fired or a nuclear power plant can.  Which they may learn.  The hard way.


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Bad Keynesian Policies cause influx of Romanian and Bulgarian Migration into Germany

Posted by PITHOCRATES - February 10th, 2013

Week in Review

It is interesting that countries that get into trouble using Keynesian economic policies tend to go to countries that relied on Keynesian policies less for help.  States with high government spending and bloated public sectors turn to countries with less government spending and less bloated public sectors for help.  Yet Keynesian economic policies are still the dominant polices of many nations.  Including the US, the UK, China, countries within the Eurozone, Bulgaria and Romania (see German warning over Romanian and Bulgarian migration by Rosa Silverman posted 2/6/2013 on The Telegraph).

German cities have warned that an influx of Romanian and Bulgarian economic migrants will cost them dear and put the “social peace” at risk…

Berlin, Hamburg, Dortmund and Hanover have seen a six-fold increase in economic migration from the two countries since 2006, which they say has left them struggling to cope…

The warning comes amid fears in Britain that tens of thousands more Romanians and Bulgarians will come here each year after formal restrictions on the numbers of low-skilled workers from the two countries end next year.

A report by the campaign group Migration Watch UK warned last month that up to 70,000 migrants could arrive annually from then.

Of course the question that just begs to be asked is why are Romanians and Bulgarians leaving their countries in the first place?  The Cold War is over.  The communists are gone.  These are beautiful countries.  Blessed with farm land.  And natural resources.  With some great people.  And a lot of history.  So why leave?  Because they caught the Keynesian contagion during the Nineties.  Their central banks kept interest rates artificially low to stimulate economic activity.  Which they did.  But a lot of that economic activity was artificial.  A bubble.  Times were good.  They expanded government employment.  And government pay and benefits.  And then the 2007-2008 financial crisis came along.  Bursting that bubble.  Leaving these nations with budget deficits.

Both nations were on track to join the Eurozone.  Working hard to meet the Maastricht criteria.  Conditional for entry into the common currency of the Eurozone.  After the financial collapse meeting the Maastricht criteria became more difficult.  As the fall in economic activity and the rise in the unemployment rates of these countries caused tax revenue to fall.  Creating deficits that approached or exceeded those permitted under the Maastricht criteria.  And the Keynesian cure for a recession, easy credit and more government spending, just made those deficits worse.  And it caused inflation to rise to or above that permissible under the Maastricht criteria.  They had to borrow money to meet their spending obligations.   And a condition of those loans was to bring their spending down to acceptable levels.  Like that to meet the Maastricht criteria.

Long story short the damage these Keynesian policies caused required very painful austerity to fix.  High unemployment and austerity makes people want to leave home for sunnier economic climes.  As Germany has been the bedrock of the Eurozone because of their more responsible governing and restraint in government spending these people went to Germany.  And to the UK.  Who didn’t join the Eurozone.  And aren’t mired in the Eurozone sovereign debt crisis.  Though they are implementing a little austerity of their own to bring down their budget deficits.

High government spending and large deficits cause trouble.  The U.S. has numbers worse than both Bulgaria and Romania.  Which means there is trouble ahead.  But unlike other nations the United States’ population won’t be able to travel to sunnier economic climes.  For no country will be able to absorb that amount of migration.  Not even Germany.  Or the UK.  Combined.


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