Venice votes to Secede from Italy over High Taxes

Posted by PITHOCRATES - March 23rd, 2014

Week in Review

I remember learning long ago that there were two Italys.  A prosperous north.  And an impoverished welfare state in the south.  Apparently that was and still is true (see Venice votes to split from Italy as 89% of the city’s residents opt to form a new independent state by Hannah Roberts posted 3/21/2014 the Mail Online).

Venetians have voted overwhelmingly for their own sovereign state in a ‘referendum’ on independence from Italy…

The floating city has only been part of Italy for 150 years. The 1000 year–old democratic Serenissima Repubblica di Venezia, was quashed by Napoleon and was subsumed into Italy in 1866.

Wealthy Venetians, under mounting financial pressure in the economic crisis, have rallied in their thousands, after growing tired of supporting Italy’s poor and crime ridden Mezzogiorno south, through high taxation…

Campaigners say that the Rome government receives around 71 billion euros  each year in tax from Venice – some 21 billion euros less than it gets back in investment and services.

The five-day poll came in the same week that Crimean residents chose in a landslide vote to leave Ukraine and become part of Russia.

Crimea is no Venice.  Venice was one of the great Italian city-states that rose after the fall of the Western Roman Empire.  They were an economic powerhouse.  Trade made Venice the richest city in Europe.  Their navies dominated the Mediterranean.  And they helped usher in the Renaissance.  Venice was an independent republic for 850 years longer than they were part of Italy.  So Venice has some esteemed history.  And they know a thing or two about economic activity.  Such as income redistribution does not work.

If you keep taxing the economic producers more and more eventually they’re going to do something about it.  Such as moving their economy underground.  Out of reach of the greedy hands of the taxman.  Or they may just vote to secede.  That vote may not be constitutional.  But apparently that doesn’t matter these days.  At least it didn’t matter in Crimea.  But one thing for sure.  Based on the flow of money between Venice and Rome it is fair to say that Rome needs Venice more than Venice needs Rome.

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The Russian Empire

Posted by PITHOCRATES - February 11th, 2014

History 101

The Europeans built Larger Ships and used Advanced Navigational Skills to sail from Europe to the Far East

The Anatolian peninsula (roughly the area of modern day Turkey) has long been a trade crossroads.  It’s where the Black Sea (and the rivers into Europe and Russia) met the Mediterranean Sea.  It’s where Europe met Asia.  Where East met West.  All important long-distant trade traveled through the Anatolian peninsula.  Right through the Bosporus.  The straits between East and West.

The Greeks, the Persians, the Romans and the Ottoman Turks all coveted this region.  When the Western Roman Empire fell the great Italian city-states rose.  They dominated the Mediterranean.  And the trade through the Bosporus.  Where the Silk Road for centuries brought riches from the Far East into Europe.  The Italian merchant banks controlled that trade.  Until the Eastern Roman Empire (the Byzantine Empire) fell to the Ottoman Turks.  Which, lucky for the Europeans, happened at the time of the Renaissance.  Bringing an end to the Middle Ages.  And ushering in the modern era.

It started in Italy.  And then spread into Europe.  A rebirth (hence Renaissance) of all that Greek learning.  Which shifted the trading center from the eastern Mediterranean to Europe.  Where the Europeans built larger ships and used advanced navigational skills to sail from Europe to the Far East.  Bypassing the Silk Road.  And the Ottoman Turks in the Anatolian peninsula.  Making the Europeans the new rich traders.  Knowledge and wealth created more ships for trade.  And advanced armies and navies.  Making the Europeans the masters of the world.

Peter the Great pulled Russia out of the Middle Ages by making it more European

While the Mediterranean and European nations were ushering in the modern world not all of Asia followed them.  Russia in particular remained in the Middle Ages.  A vast land full of disparate peoples.  Not a unique and singular Russian people.  Until Ivan the Terrible came along.  The Grand Prince of Moscow from 1533 to 1547.  Then Tsar of All the Russians.  Ivan the Terrible united Russia by conquering it.  But at a cost.  Continuous wars killed a lot of Russian people.  Which left a lot of farmland fallow.  Giving Russia a chronic problem they would have for centuries.  The struggle to feed themselves.

Tsar Peter the Great (1682 – 1725) modernized Russia.  To be a more modern country like those in Europe.  He even went to Europe incognito to learn as much as he could about advanced European ways.  And had Europeans help him pull Russia out of the Middle Ages.  He made his army to be like European armies.  Learned about shipbuilding.  And built a Russian navy.  Which was a problem as the only access to the sea Russia had was the Arctic Ocean via the White Sea.  Which meant, of course, war and conquest.  He fought the Swedes for access to the Baltic Sea.  And he fought the Ottoman Turks for access to the Black Sea.

The disparate people of Russia were not all that happy with his ideas or the money he spent.  So he brutally suppressed any discontent.  Peter built his navy.  And a new capital on the Baltic Sea.  Saint Petersburg.  A European cultural center.  And the Imperial capital of Russia.  He also attacked the Ottoman Empire.  And lost.  Losing his Black Sea ports.  But Russia would return to fight the Ottoman Turks.  Under Catherine the Great.

The Bolsheviks killed Tsar Nicholas and his Family and ushered in the Oppressive Soviet Union

Catherine the Great ruled during Russia’s Golden Age.  Continuing the work started by Peter the Great to modernize Russia.  Making Russia a great European power.  Through military conquest.  And diplomacy.  She was even an international mediator.  And established the League of Armed Neutrality to protect neutral shipping from British attacks during the American Revolutionary War.

Catherine pushed Russia’s borders out largely at the expense of the Ottoman Empire.  And the Polish–Lithuanian Commonwealth.  These conquests cost, though.  And she turned to the nobility to pay for them.  In return she supported the nobility.  But the wealth she got form the nobility came from the serfs (basically slave laborers) working their land.  Which took a lot of work to pay for her conquests.  Leading to a peasant uprising or two.  But serfdom would continue in Russia.  Tsar Alexander I advanced the status of Russia with his defeat of Napoleon.  They even called him the Savior of Europe.  But serfdom remained as the Industrial Revolution took off in Europe.  Halting the modernization of Russia.

Tsar Alexander II emancipated the serfs in 1861.  Ending the landed aristocracy’s monopoly of power.  Serfs left their lands.  And moved into the cities.  Selling their labor.  Industrializing Russia.  Still, their freedom favored the landed aristocracy.  Who were compensated for their serfs’ freedom with a tax paid by the freed serfs.  Which little improved the life of the freed serfs.  And did little to ease the revolutionary fervor long simmering in the Russian people.  Especially those outside the nobility.

When Tsar Nicholas II entered Russia into World War I things did not go well for Russia.  Military losses, food shortages, fuel shortages, inflation and striking factory workers made the nation ripe for revolution.  Tsar Nicholas went off to command the Russian Army personally.  Leaving his wife Alexandra to run the country in his absence.  Who turned to Grigori Rasputin for help.  Which didn’t help quell the revolutionary fervor simmering in the Russian people.  They didn’t like Rasputin.  Or the Tsar.  And made Tsar Nicholas the last emperor of the Russian Empire.  Which the Bolsheviks made permanent.  By killing Nicholas and his entire family.  Which ultimately ushered in the Soviet Union.  One of the most oppressive regimes of all time.

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The Line of Diocletian, the Byzantine Empire, Italian City-States, Banking, Usury and the Protestant Reformation

Posted by PITHOCRATES - January 3rd, 2012

History 101

Europe began to Awake from its Slumber of the Dark Ages in about 1300 Italy

Once upon a time the only lending was to help someone in need.  Such as someone with a poor harvest to survive the winter.  We did it out of the goodness of our hearts to help others in need.  So to charge interest for a loan like this would have been cruel.  Taking advantage of someone’s misfortune wasn’t the Christian thing to do.  Or the Jewish.  Or the Muslim.  That’s why no one then charged interest for loaning money.  You just didn’t kick a person when he or she was down.  And if you did you could expect some swift justice from the religious authorities.  As well as the state.

Rome was once the center of the civilized world.  All roads led to Rome, after all.  Then Diocletian split the Empire into two in 285.  Along the Line of Diocletian.  Into East (Greek) and West (Latin). The West included Rome and fell around 486, ushering in the European Dark Ages.  Meanwhile the Eastern half, the Byzantine Empire, carried on.  And skipped the Dark Ages.  Its capital was Constantinople (named in 330) .  Formerly Byzantium.  Modern day Istanbul.  Where all Asian overland trade routes led to.  This city of Emperor Constantine.  His city.  Who reunited East and West.  And adopted Christianity as the Empire’s new religion (381).  Located at the crossroads between Europe and Asia, trade flourished and made the Byzantine Empire rich.  And long lasting.  Until weakened by the Venetian-financed Fourth Crusade (1202–1204).  (The Latin Christians’ attack on the Greek Christians was fallout from the Great Schism of 1054 where Christianity split between Latin Catholic and Greek Orthodox).  And then falling to the Ottomans in 1453.

Europe began to awake from its slumber in about 1300 Italy.  Great city-states arose.  Genoa.  Pisa.  And Venice.  Like those early Greek city-states.  Great ports of international trade.  Rising into trade empires with the decline of the Byzantine Empire.  Where these Italian merchants bought and sold all of those Asian goods.  Putting great commercial fleets to sea to bring those Asian goods into Genoa, Pisa and Venice.  Getting rich.  But to make money they had to have money.  Because in the international trade game you had to first buy what you sold.  Which included the cost of those great merchant fleets.  And how did they pay for all of this?  They borrowed money from a new institution called banking.

That Europe that Slumbered during the Dark Ages Arose to Rule International Trade

Modern finance was born in Italy.  Everything that makes the commercial economy work today goes back to these Italian city-states.  From international banking and foreign exchange markets to insurance to the very bookkeeping that kept track of profits and losses.  It is here we see the first joint-stock company to finance and diversify the risk of commercial shipping.  London would use the joint-stock company to later finance the British East India Company.  And Amsterdam the Dutch East India company.  Where the Dutch and the English sent ships across oceans in search of trade.  Thanks to their mastery of celestial navigation.  And brought back a fortune in trade.  Putting the great Italian city-states out of business.  For their direct sea routes were far more profitable than the overland routes.  Because the holds of their ships could hold far more than any overland caravan could.

The Catholic opposition to usury (charging interest to borrow money) opened the new banking industry to the oppressed Jews in the European/Christian cities.  For it was one of the few things the Christian rulers let the Jews do.  Which they did.  Even though it was technically against their religion.  And they did it well.  For they had an early monopoly.  Thanks to that same Catholic Church.  Then came another schism in the Christian church.  The Protestant Reformation.  Where, among other things, Protestants said the Old Testament did not bind them to all rules that the Jews had to follow.  Then John Calvin took it a step further and said commercial loans could charge interest.  And, well, the rest is banking history.

Europe was then the dominant region of the world.  That region that slumbered during the Dark Ages arose to rule international trade.  Thanks to their navigational abilities.  And their banking centers.  Which financed their trade.  And the great things to come.

The Enlightenment led to the Modern World, Limited Government, the Industrial Revolution and Beyond

With the fall of the Byzantine Empire and the rise of the Italian city-states, Greek thinkers left the Byzantine Empire and went West.  To those rich Italian city-states.  Bringing with them great books of Greek knowledge.  The intellectual remnants of the Roman Empire.  Translated them.  And massed produced them on the new printing press.  And kicked off the Enlightenment.  Which then spread throughout Europe.

The Enlightenment led to the modern world.  From limited government.  To the Industrial Revolution.  And beyond.  All thanks to those Italian city-states.  International trade.  And banking.

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Bloated Public Sectors Responsible for the Eurozone Crisis

Posted by PITHOCRATES - January 1st, 2012

Week in Review

The Eurozone was Europe’s answer to the United States of America.  One large, single-currency, free-trade zone.  And it worked.  For awhile.  During good economic times.  Like most things work during economic times.  Like it does in business.  A business could have a lot of cost problems and inefficiencies.  But if sales are good people don’t tend to see them.  Because healthy sales revenue can fix any problem.  It’s when you don’t have healthy sales revenue that high costs and inefficiencies hurt a business.  And the cost cutting, nay, the cost slashing begins.  Which is what has happened in the Eurozone.  Only they haven’t started the cost slashing yet (see The Eurozone Crisis For Dummies by Simone Foxman posted 12/30/2011 on Business Insider).

Since joining the euro back in 1999, the governments of Greece and Portugal (among other offenders) have gotten used to spending a LOT of money. When times were good, it wasn’t a problem — banks and other investors were willing to lend them money on the cheap and their public sectors became bloated.

When the financial crisis hit, however, problems came to a head. Debt levels in Portugal, Italy, and Greece became unsustainable, and taxes in a contracting economy are no longer enough to pay the bills.

Greece, Portugal, and Ireland are still struggling to bring their public debt under control, after receiving billions of euros in bailout aid from the European Commission, the International Monetary Fund, and the European Central Bank (the so-called troika). Some of this aid was provided through a temporary Special Purpose Vehicle called the European Financial Stability Facility (EFSF).

For a complete summary of the Eurozone crisis follow the above link to the full article.

Some say Europe’s spending is the problem.  Others say it’s the austerity they’re pushing onto the high-debt states that has taken a non-problem and created a crisis.  Some blame outside economic factors such as the American subprime mortgage crisis that ruined a good thing.  To point the finger of blame you need to look at when the crisis became a crisis.  And when was that?  When these countries could no longer pay the bills for their bloated public sectors.  Regardless of what caused it.  It happened.  And when it did they showed us that they could only support their government spending during exceptional economic times.  Which can mean but one thing.  They were spending too much.

When a business finds itself in this predicament the long knives come out and they start slashing costs.  And the businesses that weren’t spending too irresponsibly usually survive.  Those who spent too much or don’t slash enough don’t.  And that’s where the Eurozone is right now.  But they have a peculiar problem.  They may have a currency union but they are still independent nations.  Rich with history and tradition.  And set in their welfare-state ways.  These great social democracies of Europe.  The Eurozone as a whole can only hope the problem states do the right thing and cut back their spending.  Which they haven’t yet.  And appear to be doing only with the utmost reluctance.  Which explains the ongoing crisis.

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The Eurozone Contagion Spawned in Spain, Greece and Italy has Infected French Banks

Posted by PITHOCRATES - December 11th, 2011

Week in Review

Here is how a contagion spreads (see Moody’s downgrades top three French banks posted 12/9/2011 on UPI).

Credit rating agency Moody’s Investors Service lowered credit scores for three of the largest banks in France Friday…

The rating service said it was concerned the conditions in Spain, Greece and Italy could deteriorate further, which would mean the French banks would suffer deeper losses on the government bonds they hold.

The whole point of the Eurozone is to replicate the massive free trade economy of the United States.  And it’s been somewhat successful.  The economy of the united states of Europe has matched and even exceeded the economic output of the United States.  But some of the member states cheated to get into the common currency.  The Euro.  By lying about their true debt levels.  And their deficits.  These states are now in trouble.  The costs of their welfare states grow.  Which requires more government borrowing.  And these continuous and growing deficits add to that massive debt.

There comes a point when people doubt whether these states will be able to repay their debt.  And that’s what private investors are now thinking.  So they’re not buying anymore of their debt.  Unless they make it worth their while.  With very high interest rates.  Which increases the cost to service the debt.  In fact their borrowing costs have grown so great that they have to borrow money to pay the interest on the money they borrow.

Of course, this makes it even more doubtful that these countries will be able to repay this debt.  Which scares away more private investors.  Despite those high interest rates.  And threatens the solvency of these countries.  And the common currency itself.  The Euro.  And if the Euro goes so does the Eurozone.  Including the economic powerhouse of the united states of Europe with it.

So other countries of the Eurozone step in and buy these worthless bonds.  To try and save the Euro.  And their own economies.  Now the financial problems of Greece, Spain and Italy are now everyone’s financial problems.  Because of those worthless bonds sitting on the balance sheets of healthier banks.  Which are not quite so healthy anymore.  Because of their exposure to this contagion.

It’s a dangerous game they play.  To save the Eurozone they have to infect themselves with the contagion.  And hope that they are financially immune enough to live through this sickness.  But they are teetering on the brink with their own massive debt.  Their own massive welfare states growing their deficits.  Which will be a problem.  For they refuse to take the same medicine Greece, Spain and Italy are refusing to take.  Austerity.  So the chances are pretty good that they will fall to the contagion, too.  As it continues to spread and infect everyone in the Eurozone.  Until there will be no Eurozone.  Or a united states of Europe.

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Move over Greece, there’s a new Financial Crisis in Town and it goes by the Name of Italy

Posted by PITHOCRATES - November 13th, 2011

Week in Review

Another social democracy in the Eurozone is having a financial crisis.  And it’s even worse than the crisis in Greece.  In fact, it makes Greece’s problems look tame in comparison.  Because it’s Italy this time.  And their economy is huge.  As is their debt.  The Euro may not be able to survive if Italy doesn’t.  It’s so bad Berlusconi will reign.  To save Italy.  And the Eurozone (see Italy at Breaking Point, Merkel Calls for ‘New Europe’ by Reuters posted 11/9/2011 on CNBC).

“It is a step in the right direction,” Swedish Finance Minister Anders Borg said when asked about Berlusconi’s plan to resign.

“There has been no proper understanding of the problems being faced in Italy.” Even with the exit of a man who came to symbolize scandal and empty promises, it will not be easy for Italy to convince markets it can cut its huge debt, liberalize the labor market, attack tax evasion and boost productivity.

Huge debt?  A costly labor market.  Tax evasion?  Poor productivity?  These are the hallmarks of a social democracy.  The welfare state.  Because those generous benefits are costly.

A costly labor force makes the products they make uncompetitive.

The more people consuming taxpayer pay and benefits the fewer people pay taxes.  And the higher the tax rates on those who still pay taxes must be.

The higher the tax rates the unhappier the taxpayer.  And the more they try to evade paying those taxes.

An uncompetitive work force is a nonproductive work force.  And a nonproductive workforce does not grow the economy.  Because expansion capital is paying for a nonproductive workforce.  Not expansion.

It is inevitable.  The collapse of a social democracy.  Because the welfare state consumes more than it produces.  Which is why all the social democracies in the Eurozone have debt crises.  Because spending is always increasing.  And they borrow ever more to pay for that spending.

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Solving Public Spending and Debt Crises with Privatization

Posted by PITHOCRATES - May 23rd, 2011

To Privatize or not to Privatize the NHS

Some want to start privatizing parts of the National Health Service (NHS).  Some don’t.  Some want to improve quality and cut costs.  Some don’t.  But as people live longer into retirement, there is no place for costs to go but up.  Especially when there is no competition (see Where lucre is still filthy posted 5/19/2011 on The Economist).

THE profit motive is alive and well at the Circle hospital outside Bath, in south-west England. The hospital was designed by the architect Norman Foster, and is run by Circle Healthcare, a firm part-owned by its employees and set up by Ali Parsa, a former banker at Goldman Sachs, in 2004. It treats a mixture of National Health Service and private patients. Corridors are wide and gleaming, operating theatres newly equipped. Doctors and nurses have more say in management decisions than in many English hospitals.

So a private, for-profit hospital is well run, clean and has new equipment.  Which implies that the run of the mill NHS hospital is bureaucratic, cramped, dirty and outdated.  Hmmm.  Based on this it would appear that the private, for-profit hospital is a better hospital than your run of the mill NHS hospital.  At least, from a patient’s viewpoint.  And who could argue?

Trade unionists and lobby groups are queuing up to denounce any expansion of the private sector’s role in health care.

So trade unionists and lobby groups are against cleanliness and modernity.  They prefer bureaucratic, cramped, dirty and outdated.  One can only presume so because of the money.  For it usually is.  Of course, they will deny this.  And say they are just looking out for what’s best for Britons.

To some foreign observers, this reticence about private involvement looks odd. There is ample international evidence that competition among private providers yields better results. For example, a report last year by America’s National Bureau of Economic Research found that increased competition in health care was correlated with improved financial and clinical outcomes; adding a rival hospital and instigating patient choice substantially increases the quality of management. As Nick Seddon, of the British think-tank Reform, points out, “It’s a fallacy to think you can choke off the profit motive without losing momentum and innovation.”

And the current debate somehow overlooks the fact that for-profit companies are already delivering many support services in health, education, prisons and other public services. Family doctors have been private operators since the foundation of the NHS in 1948. The profit motive has been making further steady advances in the state sector since Margaret Thatcher’s outsourcing campaign in the 1980s. Tony Blair let privately owned treatment centres provide specialist services within the NHS. His wider reforms were restricted by internal battles in the Labour Party; all the same, a recent report from the London School of Economics found that introducing competition among NHS hospitals in 2006 helped to reduce patient deaths.

The history appears to side with privatization.  Both in the UK.  And the USA.  That is if you’re measuring by the quality of patient care.  And by the number of people you prevent from dying.  Which is a rather important statistic in any hospital I would think.

Let’s take a closer look at this ‘not dying’ thing.  Suppose there is only one hospital serving an area.  And suppose that 5 out of every 10 patients that enter dies.  Now suppose a second hospital opens up.  Where only 1 out of every 10 patients that enter dies.  Which hospital would you want to go to?  I’m guessing the 1 out of 10 one.  Because that ‘not dying’ thing is pretty relevant when choosing a hospital.  And when more people do in this example, the ‘5 in 10’ hospital will have no choice but to improve.  To become a better hospital.  This is what competition does.  It makes everything better.  And it’s just not the UK and the USA seeing this.

Britain is unusual among rich democracies not in how much private involvement there is in its public services, but how little. Only 4% of acute-care beds are provided by private companies. In Germany, the proportion of hospitals run for profit (32%) overtook the number of publicly run ones (31%) two years ago (charitable and voluntary organisations account for the rest). The Spanish region of Valencia allows for-profit firms to run over 20% of its health-care services, with the sort of long-term deal British providers hanker for. New European democracies are experimenting with similar public-private mixes. Two-fifths of Slovak hospital provision is delivered by private operators.

It’s rather ironic.  The people who did so much to improve the life of the individual coming out of the Middle Ages is now among the least free nations when it comes to health care.  They’re talking about privatizing more health care to improve quality.  And cut costs.  Because the NHS, as all state monopolies do, is trending in the wrong way in areas of quality and costs.  The fact that there is a debate proves this.  Now, don’t get me wrong, the NHS is full of good people.  It’s not the people in the system.  It’s the system.  And the people managing the system.

But old bureaucracies are hard to reform.  People trust them.  Because they’re used to them.  Like a comfortable pair of filthy, worn slippers.  But people are living longer.  Consuming more health care in their retirement years.  Vastly increasing health care costs.  Which the NHS has to pay.  Either by more taxation (which can reduce economic activity, which will reduce tax receipts across the board).  Rationing services to make what they have cover more people.  Or by more deficit spending.  Borrow and spend for today.  Leaving a debt bomb for future generations to worry about.

Italy and Spain Circling the Drain?

And speaking of debt bombs, a couple more are about to go off in the European Union (see U.S. stocks plunge on European debt worries by the Associated Press posted 5/23/2011 on the Los Angeles Times).

Stocks plunged Monday after warnings about the finances of several European countries stoked fears that the region’s debt crisis is worsening. The euro dipped briefly to its lowest level against the dollar in two months…

Italy is the latest European country to be affected by the region’s widespread debt problems. Standard & Poor’s said Saturday that country was in danger of having its debt rating lowered if it could not reduce its public borrowing and improve economic growth.

Too much public sector spending has caught up to the Italians.  High taxation to support that spending is hindering economic growth.  And they’ve borrowed so much that people are starting to think that they won’t get their money back.  Making people that much more reluctant to loan (i.e., buy Italian bonds) them money again.

Spain’s public finances are also worrying investors. Spain’s ruling Socialist party was roundly defeated in local elections, raising concerns that political instability would keep that country from enforcing spending cuts. The Ibex 35 index on the Madrid stock market fell nearly 2 percent in midday trading.

The 10-year U.S. Treasury yield fell to 3.10 percent, its lowest level this year. Bond yields fall when prices go up, so the drop is a sign that investors are clamoring for the safety of long-term U.S. debt.

And the Spanish are in the same boat.  Even with their partial privatization of health care, there’s still just too much public spending.  And a political atmosphere that won’t take kindly to spending cuts.  Unemployment among the young and educated is high.  Close to 50%.  Making their prospects for future borrowing not that favorable either.  So they, like the Italians, will not be able to pay their bills one day.  Which will eventually bring about those spending cuts.  The hard way.

Greece too far gone to Save?

The big public sectors in the social democracies of the European Union (EU) are taking their toll.  Their costs are crippling some of their economies.  And it all started in Greece.  Who is still trying to dig themselves out of their debt hole (see Greece mulls deeper spending cuts as borrowing rates hit record by Derek Gatopoulos, Associated Press, posted 5/23/2011 on thestar.com).

Greece’s borrowing costs surged to another record Monday, as the crisis-hit country’s prime minister chaired emergency talks to deepen austerity measures beyond his own government’s term in office.

A Cabinet meeting began as yields rose above 17 per cent for Greek 10-year-bonds, hitting a record margin — or spread — over the benchmark German rate.

Greece suffered another bond downgrade late Friday from the Fitch ratings agency, lowering its investment ranking by three notches deeper into junk status. Prime Minister George Papandreou conceded over the weekend that plans to return to bond markets next year may not be achievable.

Junk status.  Wow.  That’s bad.  That means few people think they’ll get their money back if they loan any to Greece.  And according to Papandreou, no one will next year.

Greece’s economy is being kept afloat by €110 billion ($156.6 billion), in a 2010-2013 package of rescue loans from European countries and the International Monetary Fund.

But that rescue package does not cover all of Greece’s financing needs for 2012, and EU countries are demanding tougher cost-cutting action from Greece before considering offering another financial lifeline.

In return for the bailout, the government imposed a series of austerity measures, including pay cuts in the public sector, tax hikes and social security reforms, and is under strict supervision from the EU and IMF to ensure the country is meeting the conditions for the rescue loans.

And here we see why they have such a debt crisis in Greece.  High salary and benefits for a bloated public sector.  And state benefits that are too generous.  Things that are hard to cut.  As is evident by the requirement of another bailout.  And the demand by those doing the bailing for tougher cost-cutting.  Because what they’ve done so far isn’t enough.

In Vienna, top financial official Olli Rehn said Greece needed to take more steps “in the coming days and weeks” to convince other EU nations and lending institutions that it is serious about overcoming its huge monetary deficit.

He urged the crisis-hit national to urgently step up its ambitious privatization program. General elections are due in Greece in 2013.

And here again we come to that wonderful panacea.  Privatization.  For the EU countries with the greatest debt crisis are the ones with the least privatization.  Whereas the strongest economy in the EU, Germany, has quite a bit.  Even in the one area people fear most.  Health care.  Germany has more private hospitals than public ones.  So profit (i.e., lucre) isn’t a dirty word in Germany.  They have a strong economy.  And fiscal restraint.  Which is why Germany is doing a lot of the bailing in the EU.  Of course, they have experience rehabilitating financially weak nations.  They no doubt learned a lot when they reincorporated the former East Germany into a reunified Germany after the Cold War.

Ticking Debt Bombs

Public spending has grown in countries big and small.  And it is crippling countries big and small.  Privatization is a way to cut public spending.  But it doesn’t help win elections.  So it’s not easy to do.  People get set in their ways.  And once people grow up on generous state benefits, it’s hard to convince them that things will be better if they start paying for what they once got free.  So few try.  It’s easier to just keep promising more of the same.  And close your eyes to that ticking debt bomb.  Hoping that it will blow up later rather than sooner.  And that the people continue to enjoy their comfortable pair of filthy, worn slippers.  No matter how filthy and worn they get.

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Competency and Constitutionality in Question in Obama’s Libyan War

Posted by PITHOCRATES - March 21st, 2011

The Libyan War as Popular as the Iraq War

The attacks on Libya have been authorized by the UN.  There is multilateral support.  And a coalition of the willing.  So we’re standing on the side of moral authority.  And legality.  Unlike the Iraq War.  At least this is what the supporters of this Libyan operation are saying.  And they speak with a united voice.  Or do they (see EDITORIAL: Obama’s illegal war by The Washington Times posted 3/18/2011 on The Washington Times)?

Five Security Council member states sat out the vote, including permanent members Russia and China, in addition to Germany, India and Brazil. China in particular objected to any action that would compromise Libya’s sovereignty, but did not veto the resolution. This may have been a political move, since the abstaining countries are now in a position to raise principled objections to whatever happens once force is utilized. To claim the United States forged an international consensus seems premature when Resolution 1973 did not have the support of countries representing 42 percent of the world’s population.

Russia, China, Germany, India and Brazil oppose this multilateral action?  And that 42%?  It appears that Libya at best may match the Iraq War in popularity.

Very Little Arab Participation in this Arab Matter

All right, we can expect some of this dissent.  But what about one of our allies.  One of the coalition of the willing (see The House of Commons reacts to Libya assault by Peter McHugh posted 3/21/2011 on the UK’s Channel 4 News)?

[The Prime Minister] was just seven minutes into his defence before the first doubt appeared. How would he avoid “mission creep” asked the SNP’s Angus Robertson. Politicians on all sides now use military phrases as short hand for much more serious questions and what he really wanted to know was how do we avoid the Iraq experience when George W Bush said the war was over in days but thousands were to die in the unplanned years that followed…

He said the campaign against Gaddafi was well supported but only Qatar,out of all the arab states were committing troops. Starting a war was easy, said Dennis Skinner, ending it much harder especially if we did not know what would mark the end.

The unease continued to expose itself in a series of interruptions. “What about the £230m of arms we had sold to Libya last year?” asked one MP and “What about Yemen and Bahrain?” said Labour’s Jeremy Corbyn. Would the Prime Minister resign if British “boots” were ever on the ground in Libya?

The UK and France are the two big European nations in charge of this thing.  And one of them is already having a lot of second thoughts.  They’re worried about mission creep.  It becoming another Iraq.  And for a “well supported” mission, there’s only one Arab state on board.  Strange, for it is Arab killing Arab in Libya.  And the Arab League supported the UN resolution to create the no-fly zone.  This lack of Arab participation can be unsettling for the coalition.  For without Arab participation, it can look like European Christians fighting Muslims on oil-rich land.  And that just won’t be good for the mission.

The Nobel Peace Prize Winner Initiates War

Across the pond, Republicans and Democrats alike are questioning the Libyan action.  Some of the stronger criticism may be coming from Republicans (see Rep. Roscoe Bartlett Says President Obama’s Unilateral Choice to Order U.S. Military Force Against Qadhafi is an Affront to Our Constitution by Rep. Roscoe Bartlett posted 3/21/2011 on bartlett.house.gov).

“The United States does not have a King’s army. President Obama’s unilateral choice to use U.S. military force in Libya is an affront to our Constitution. President Obama’s administration has repeated the mistakes of the Clinton administration concerning bombing in Kosovo and the George W. Bush administration concerning invading Iraq by failing to request and obtain from the U.S. Congress unambiguous prior authorization to use military force against a country that has not attacked U.S. territory, the U.S. military or U.S. citizens. This is particularly ironic considering then-Senator Obama campaigned for the Democratic nomination based upon his opposition to President George W. Bush’s decision to invade Iraq.

Some serious charges there.  But is it only partisanship?  I mean, right now, President Obama isn’t all that popular these days with his war on Libya.  He’s letting down some of his most avid supporters.  Who are no doubt stunned.  Their Nobel Peace Prize winner initiating war?  How can this be?

The Russians Call the Coalition Christian Crusaders after Libya’s Oil

Remember when Hillary Clinton went to Russia with that button?  To reset Russian-American relations?  They got the Russian translation wrong on the button.  But the Russians still praised the Obama administration for the effort.  But they’re not praising him anymore (see Russian Duma Leader Wants Obama Stripped of Nobel Peace Prize by Kenneth Rapoza posted 3/21/2011 on Forbes).

The controversial leader of the Russian Liberal Party, Vladimir Zhirinovsky,  said in a statement on Monday that he will ask the Nobel Committee to strip President Barack Obama of the Nobel Peace Prize.

Zhirinovsky said in the letter that the prize, awarded in 2009 for Obama’s historic presidential victory and his work on nuclear non proliferation, was now hypocritical in light of recent missile strikes in Libya…

“These developments in Libya are another outrageous act of aggression by NATO forces and, in particular, the United States,” he wrote, calling it a “colonial policy” with the goal to control Libyan oil…

Zhirinovsky’s protest to the Nobel Committee is most likely a cry in the wilderness.

However, Russian officials have stated no interest in military adventures to punish Gadhafi for waging a civil war against anti-government forces. On Monday, The Economic Times of India reported Russian Prime Minister Vladimir Putin calling the airstrikes on Libya a “medieval call for crusades.”

Strip the Nobel Peace Prize?  You could say that the missile strikes are a far cry from what he did to win the Peace Prize.  Which was nothing.  He was elected in 2008.  Took office in 2009.  Not a whole lot of time to do anything.  But Zhirinovsky is a small player in Russia these days.  It doesn’t really matter what he says.  Putin is the power in that country.  And he called Obama’s airstrikes a “medieval call for crusades.”

I think we’re going to need another button.

Obama Attacked for Attacking his own Kind

And it gets worse.  Even some of his most ardent supporters are turning on the president (see Farrakhan To Obama: “Who The Hell Do You Think You Are?” by Alan Colmes posted 3/21/2011 on Liberal Land).

You’re a liar and a hypocrite, and I warn my brother don’t let these wicked demons move you in a direction that will let you absolutely ruin your future with your people in Africa and throughout the world…My advice would be, why don’t you organize a group of respected Americans and ask for a meeting with Qaddafi? You can’t order him to step down and get out. Who the hell do you think you are, that you can talk to a man that built a country over 42 years, and ask him step down and get out? Can anybody ask you?

Your people?  Why, that sounds a bit racist.  His people in Africa is code for black.  His people throughout the world is code for Muslim.  Louis Farrakhan, leader of the Nation of Islam, is slamming Obama for attacking his black brothers.  And his Muslim brothers.  Even though Obama is a Christian.  Confusing, yes, but for whatever reason Muslims around the world (even Gaddafi looks at him as a son) have adopted this Christian as one of their own.

Mission and Command Structure Poorly Defined

So despite all the talk about a multilateral coalition of the willing, the actions against Libya are pretty unpopular.  Which means support will probably not last long.  So they better get in fast.  Complete the mission with all possible speed and efficiency.  Declare mission accomplished.  And get out.  Shouldn’t be too hard (see Confusion Over Who Leads Libya Strikes, and for How Long by Steven Erlanger posted 3/21/2011 on The New York Times).

As the military operation continued over Libya on Monday, there was some confusion about which country or organization is actually leading it, and for how long. France, Britain and the United States are in charge of their own operations, which each have different code names.

The participants are being “coordinated” by the United States, but not commanded by it, according to the French Defense Ministry. The Americans, with the most assets, seem to be the lead coordinator, but Washington has said it wants to step back after the initial phase and have NATO take charge of maintaining a no-fly zone and arms embargo.

Britain wants NATO to take over but France does not, and Italy is threatening to rethink its participation unless NATO takes command.

Okay, so there is some confusion about the command structure.  But if France is the only holdout in turning over command to NATO we should be able to make a persuasive case to them.  Then that problem will be solved.

Foreign Minister Alain Juppé said in Brussels on Monday that “the Arab League does not wish the operation to be entirely placed under NATO responsibility…

Turkey is also reluctant to have NATO take charge, since it is the only Muslim member of the alliance, has opposed the use of force in Libya and was excluded from a Saturday planning meeting in Paris. But Turkey, which has kept lines open to the Libyan leader, Col. Muammar el-Qaddafi, is likely to allow NATO to run the operation as long as it does not invade Libya with any ground forces or occupy the country.

Okay, that’s a bigger problem.  The whole Arab world is against NATO assuming command of operations.  Perhaps the British and the French can run the coalition.

Washington may be willing to have France and Britain run the operation as a coalition, but that would be hard for the two countries to do without using NATO assets for command and control, most of which belong to the United States. But Washington has never been willing to put its troops under the command of any other nation, one reason that even in NATO, the Supreme Commander Europe, is always an American.

Good night nurse.  Did anyone think this through?  Before we committed to military operations?  The coalition will fall apart before the popular support for the war does.  Command and control issues.  Mission uncertainty (regime change or no regime change).  If we’re this unclear now that we’re in a shooting war, exactly what clarity was there when we committed to the use of force?

Obama says Libyan Civil War is a US Security Threat

Well, the President explains why in a letter to Congress (see Obama explains Libya mission to Congress by Greg Sargent posted 3/21/2011 on The Washington Post).

Qadhafi’s continued attacks and threats against civilians and civilian populated areas are of grave concern to neighboring Arab nations and, as expressly stated in U.N. Security Council Resolution 1973, constitute a threat to the region and to international peace and security. His illegitimate use of force not only is causing the deaths of substantial numbers of civilians among his own people, but also is forcing many others to flee to neighboring countries, thereby destabilizing the peace and security of the region. Left unaddressed, the growing instability in Libya could ignite wider instability in the Middle East, with dangerous consequences to the national security interests of the United States.

Threatening the United States?  Really?  Losing Egypt to the Muslim Brotherhood could threaten our security.  Losing Bahrain to Iran-friendly Shiite control could threaten our security.  But Libya?  While we have suffered at the hands of Gaddafi, it was more tit for tat.  When he retaliated after receiving a military ass-kicking from the US.  His weapon of choice?  Terrorism.  He blew up a Berlin disco frequented by American Servicemen.  And blew up Pan Am Flight 103 over Lockerbie, Scotland.  If the pattern follows, we are at greater danger by our action.  Inaction would have been the safer bet for American security.

Note the mention of the “consequences to the national security interests of the United States.” Some Dems are arguing that Obama needs Congressional authorization under the War Powers Resolution, which only allows the President to initiate military action without Congress if America is under attack or under serious threat.

Indeed, Dennis Kucinich is citing this quote from Obama himself back in 2007: “The President does not have power under the Constitution to unilaterally authorize a military attack in a situation that does not involve stopping an actual or imminent threat to the nation.” Obama’s insistence that our national security is at stake if Gaddafi is not repelled by force tacitly asserts the President’s authority to invade without Congressional authorization.

Not only are we not safer, there are serious questions about the constitutionality of Obama’s actions.

George W. Bush more Constitutional than Barack Obama

The United Nations Participation Act (UNPA) of 1945 is U.S. law governing our actions with the United Nations (UN).  It defines what the president’s authority is when working with the UN.  And it’s not much (see The false defenders of Obama’s war in Libya by Michael Lind posted 3/21/2011 on Salon).

The only rational way to interpret these sections of the UNPA is to read them as authorizing the president, without congressional approval, to supply fewer than a thousand noncombatant troops to the U.N. for Article 41 actions short of war, and also to negotiate agreements to supply armed forces to the U.N. under Article 43 — but only with prior congressional approval. In Article 42 situations, like the situation in Libya, where the U.N. Security Council calls on members to go to war, the UNPA did not grant the president to act without congressional approval — presumably because the Congress that passed the UNPA understood that all Article 42 enforcement actions approved by the Security Council would have to be separately and independently approved by congressional declarations of war before the U.S. could take part.

Far from delegating the president vast discretion to wage war in pursuit of U.N. requests, the U.N. Participation Act jealously guards the constitutional prerogatives of Congress.

In other words, the Constitution grants war making powers to Congress.  Not the UN.  Or the President.

The Constitution cannot be amended by statute. It cannot be amended by treaty. It cannot be amended by precedent. It cannot be amended by public opinion poll. It cannot be amended by election result. It cannot be amended by humanitarian pity. The U.S. Constitution can only be amended by the procedures set forth in Article V of the Constitution itself.

People are free, if they wish, to propose a 28th Amendment to the U.S. Constitution that would read as follows: “The President of the United States shall have power to initiate war on his own authority, without the prior approval of Congress; provided, however, that Congress may refuse to appropriate funding for the continuation of a war the president has begun.” Such an amendment would create the situation that many people falsely claim to be the case today. Until such an amendment is ratified and goes into effect, however, the law of the land remains what it has always been, and President Obama’s war in Libya, even if it is moral, prudent and legally authorized under international law by the Security Council, is plainly unconstitutional.

Obama is president of the United States.  He swore an oath to support and defend the Constitution of the United States.  He did not swear an oath to the UN.  His authority is defined in the U.S. Constitution.  And it is clear he exceeded his constitutional authority.

Obama supporters are just exasperated to no end.  Because they know that George W. Bush went to war in Iraq with more Constitutional authority.  And this fact is just killing them.

The Libyan War already a Mess

The international community is not united in the attacks on Libya.  There is dissent within the coalition.  Uncertainty about mission.  Exit strategy.  Disagreement over command and control.  And legality.  It’s a mess.  It begs the question why Obama would do this to himself.  Especially with the 2012 elections around the corner.  He looks at the world through political eyes.  One can only assume that he has a plan to make this work to his advantage.  But it sure is hard to see how from here. 

Or is it just like JFK’s/LBJ’s whiz kids during the Vietnam War?  Completely out of their element.  Inept.  And making one bad decision after another.  Guess we’ll find out at the 2012 election.

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LESSONS LEARNED #26: “If we need Big Government to protect us from ourselves, then our public schools can’t be the best place to learn.” -Old Pithy

Posted by PITHOCRATES - August 12th, 2010

WE ARE WHAT they teach us.  And here is a little of what our teachers taught us.  And a little of what we learned by observation.

WHEN I WAS in grade school, our teachers went on strike.  It was great.  Another week or so of summer vacation.  But I saw a curious thing.  Some of my classmates were carrying picket signs.  And there they were, walking with the teachers.  I could not understand why anyone would want to help to end an extended summer vacation.  That’s all I knew about a teacher’s strike.  I had no idea why they didn’t want to go back to work.  I just knew it meant I didn’t have to go back to school yet.

The signs my fellow students carried said something about making our schools better.  As kids typically don’t like being in school, I couldn’t imagine they thought much about improving the educational system.  Other than greatly shortening the school day.  And school year.  But giving a pay raise to our teachers?  Giving them more benefits?  How, exactly, was that going to make school better?  I mean, if they got more pay and benefits, our education would get worse, not better.  They would just transfer money from the classroom to the teachers.  Unless the city raised property taxes to replace the classroom money that was given to the teachers.  And that would only increase the household costs of these kids’ parents.  Meaning less presents at Christmas.  Couldn’t these kids see the folly of their ways?

Of course they couldn’t.  They were just useful pawns.  They hadn’t the foggiest idea why teachers go on strike.  The teachers told them what to say.  What to think.  And they lied to these kids.  They weren’t striking because they wanted more money and better benefits.  Which they were.  No.  They told these innocent children that they were striking so they could have a better art department.  A better music department.  Better field trips.  That’s why these teachers were on the picket lines.  For the children.  And that every time there were cuts in the classroom, it was because of the greed of their parents who didn’t approve a millage.  Or who bitched about rising property taxes.  It was never their OWN greed.  Never that.

WE HAD A mock election when I was in 7th grade.  It was an ‘exercise in democracy’.  I remember voting for the Democrat candidate.  I don’t know why.  I knew nothing about politics.  I had only recently quit playing with my toy cars.  I was still reading The Hardy Boys mystery novels.  And thinking about the pretty girls in class.  What I don’t remember was spending much time thinking about the presidential election.  But there I was, voting for the Democrat candidate.  Who won in our little mock election.  But how did I, as well as my fellow students, know enough about politics to vote for the Democrat candidate?

Obviously, they taught us what to think.  That the Democrat candidate was the better candidate.  Because he was for the working man.  And cared about the little people.  That the Democrats cared about education.  Not profits.  All these touchy feely things.  Which was about all a kid could understand.  A kid can’t understand monetary or fiscal policy.  The intricacies of foreign policy.  They don’t have a clue about those things.  But kids do know that they should play nice.  And that’s what the Democrats are all about.  Playing nice.  And providing political muscle for the teachers’ unions in exchange for votes.  And obedient little minds of mush that will one day become voters.

I HAD A speech/debate class in high school.  Our teacher used the latest in progressive teaching methods.  A lot of touchy feely stuff.  Feel more than think.  We often did these exercises where the class as a whole debated the pros and cons of a particular position.  One day we went through a list of five or so.  I found the last one interesting.  It was about a ‘death ray’.

I had recently watched a program about nuclear weapons.  I learned that the size of their warheads was a function of the accuracy of the weapons.  They needed a big radius of destruction to guarantee the destruction of the target.  This is true for all weapon systems, conventional or nuclear.  The less accurate they are, the bigger the destructive force required.  (Whereas smart weapons today can have smaller warheads because they can be steered onto target.)  The more accurate the weapon, the less destructive it can be.  The less collateral damage there would be.  Less civilian dead.  The lesson described the ‘death ray’ as a weapon of pinpoint accuracy.  Based on what I just recently learned, I thought that it would be very interesting to discuss the pros of such a weapon.

When we finished discussing the position before the ‘death ray’, he said something like it was obvious that no one would argue for such a weapon system.  So there was no point in discussing it.  And then, as an afterthought, he said “unless someone does” with a condescending smirk.  I raised my hand.  I began to make some positive points.  He cut me off.  There was to be no discussion in favor of any weapon system in his class.  Turns out he was anti-war.  Free speech was one thing but not when you disagree with the program.

TWO BOOKS THAT that stand out from high school that were required reading are The Grapes of Wrath and Johnny Got His Gun.  You couldn’t find a couple of more depressing books if you tried.  The Grapes of Wrath was about the plight of a family who lost the farm during the dust bowl of the Great Depression.  In it you learned that bankers were evil.  Rich people were evil.  That Big Business was evil and exploited the poor.  Whereas poor people were virtuous.  And only poor people helped other poor people.  That Big Government was good and helped the poor people.  That FDR’s New Deal was good and helped the poor people.  That unions are good and protect those who Big Business exploits.  You get the picture?  Democrats good.  Republicans bad.  Because the Democrats take care of the little guy.  And evil bankers and fat cats are all Republicans.  Or so we were taught.

Johnny Got His Gun is an anti-war book.  It’s about a U.S. veteran of World War I.  Joe Bonham.  He lost about every part of the human body you could.  And yet they kept him alive.  I read it in the 10th grade.  Young and impressionable, I saw the folly of war.  War hurt good, young men like poor Joe Bonham.  (Incidentally, the name ‘Bonham’?  It’s from the French ‘bon homme’, good man.)  A pity only the anti-war crowd read it.  Apparently no one read it in Germany or Italy or the Soviet Union.  Maybe if their citizens did read it World War II would not have broken out.  Thankfully for the free world, though, men did serve in the armed forces despite what happened to poor Joe Bonham.  And they saved liberty.  And the burning of books did not spread further.  And books like this, because of men who did pick up a gun, remain in the public school curriculum.

Of course, you know why they (the public school teachers) are anti-war, don’t you?  It’s simple.  Any money spent on the military is money not spent on them.

I HAD AN electronics teacher in high school who was really cool.  He let us drink coffee in class (or, should I say, cream and sugar with some coffee).  He’d send a student across the street to buy donuts to eat with our coffee.  And he taught us how to build little black boxes that could unscramble scrambled television.  He was also a pretty good teacher.  A PNP transistor symbol?  The arrow was P-N (peein’) on the base.  (An NPN transistor symbol pointed away from the base.)  The resistor color code?  Bad boys rape our young girls but Violet gives willingly.  The whore.  (Hey, this stuff was funny when you’re only 16 years old.)  He even set up an interview for me at an electronic repair shop.  He liked being a teacher.  But he enjoyed doing concrete flatwork, too.  One of those things he did to pay the bills while in college.  And kept doing after college.  And that’s what he did during the summer, the peak of the construction season.  And made good money doing it.

MY MOM WORKED as a volunteer at my grade school.  She got to know the teachers pretty well.  She even went to their homes.  One lived not too far away from us.  I went with her once or twice.  Talk about surreal.  Seeing your teacher outside the school.  Acting so un-teacher-like.  Wearing something she doesn’t wear to school.  Having fun.  Laughing and joking.  And seeing her being a mom to her own kids.  That was weird.  We treated her politely and with respect in school.  Her kids whined “maaaa” at home just like I did when I was at home.  My teacher was just a normal person.  Human, almost.

But what really struck me then was that though they lived in the same general area as we did, they had more.  Bigger house.  With nicer stuff.  A newer car in the driveway.  More presents under their Christmas tree.  And in bigger boxes.  It was a ‘blue-collar’ neighborhood.  Her husband was a ‘blue-collar’ worker.  Just like my dad.  But my mom volunteered.  My teacher was, well, a teacher.  The ultimate second income in a two income family.  Good pay and benefits.  And no child care to worry about.  Teachers are off when their kids are off.  Holidays.  Breaks.  Snow days.  And, of course, summer vacation.  It just didn’t get better for a working mom.

IT IS INTERESTING that people become more conservative with age.  They may start out Democrat.  But after working awhile or raising a family, they often become Republican.  Not all of them.  But a lot.  The net number of people changing from Democrat to Republican far exceeds those changing from Republican to Democrat.  If there are any.  Other than for political reasons (in a desperate attempt to get reelected by switching parties).  That’s why the Democrats depend on the youth vote.  Because the youth vote is an uninformed voted.  They haven’t been deprogrammed yet.  They still toe the party line.  Because they don’t know any better.  Yet.

As we work and live in the real world, though, away from the insulated life of home or the college campus, things change.  We get older.  And wiser.  Less naive.  Less idealistic.  Less ignorant.  That’s why there is a net change from Democrat to Republican.  We grow up.  And start thinking for ourselves.  And try as they might during our public school indoctrination, we stop being sheep.  Eventually.  We strop bleating their mantra.  ‘Big Government good.  Private sector bad’.  Why?  Because we see that public school teachers and government workers live a lot better than we do.  This privileged few, this ruling elite, continue to take from us and respond with condescending arrogance when we complain.  Angry that we don’t mind our place in the lower strata of society.  Where we belong.

And they are nervous.  They can only maintain their elite status as long as we pay for it.  The more we learn, though, the less we are willing to support this aristocracy.  And they know it.  So they try to keep us dumbed down.  For an educated constituency is the greatest threat to Big Government.  And the public school system.  This self-proclaimed aristocracy.

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LESSONS LEARNED #25: “War is costly. Peace, too.” -Old Pithy

Posted by PITHOCRATES - August 5th, 2010

AT THE HEIGHT of the Roman Empire, the empire reached from North Africa to Britannia (England), from Hispania (Spain) to Mesopotamia (approximately modern day Iraq).  When Roman power ruled the civilized world, there was peace.  The Pax Romana (Roman Peace).  The Romans built empire through conquest.  And Rome grew rich with the spoils of conquest.  For awhile, peace was only those quiet intervals between growth and conquest.  But with secure borders, a uniform government, a rule of law, a stable currency, bustling trade & markets and a military to be the world’s policeman, peace broke out.  For some 200 years.

Life was good for the Roman citizen.  As well as for those living in the empire.  The Romans modernized the provinces they conquered.  Made life better.  Even for the conquered people.  Although there were those who hated being subjugated by a foreign power.

Reg: They bled us white, the bastards. They’ve taken everything we had. And not just from us! From our fathers, and from our father’s fathers.

Loretta: And from our father’s father’s fathers.

Reg: Yeah.

Loretta: And from our father’s father’s father’s fathers.

Reg: Yeah, all right Stan, don’t belabor the point. And what have they ever given us in return?

Revolutionary I: The aqueduct?

Reg: What?

Revolutionary I: The aqueduct.

Reg: Oh. Yeah, yeah, they did give us that, ah, that’s true, yeah.

Revolutionary II: And the sanitation.

Loretta: Oh, yeah, the sanitation, Reg. Remember what the city used to be like.

Reg: Yeah, all right, I’ll grant you the aqueduct and sanitation, the two things the Romans have done.

Matthias: And the roads.

Reg: Oh, yeah, obviously the roads. I mean the roads go without saying, don’t they? But apart from the sanitation, the aqueduct, and the roads…

Revolutionary III: Irrigation.

Revolutionary I: Medicine.

Revolutionary IV: Education.

Reg: Yeah, yeah, all right, fair enough.

Revolutionary V: And the wine.

All revolutionaries except Reg: Oh, yeah! Right!

Rogers: Yeah! Yeah, that’s something we’d really miss Reg, if the Romans left. Huh.

Revolutionary VI: Public bathes.

Loretta: And it’s safe to walk in the streets at night now, Reg.

Rogers: Yeah, they certainly know how to keep order. Let’s face it; they’re the only ones who could in a place like this.

All revolutionaries except Reg: Hahaha…all right…

Reg: All right, but apart from the sanitation, the medicine, education, wine, public order, irrigation, roads, the fresh-water system and public health, what have the Romans ever done for us?

Revolutionary I: Brought peace?

Reg: Oh, peace! Shut up!

(From Monty Python’s The Life of Brian, 1979.)

Maintaining a peaceful empire is costly.  As people got more accustomed to peace and plenty, they began to complain about taxes.  Citizens refused to volunteer to serve in the Roman Legions maintaining that peace.  Barbarians began to serve in the Legions.  Some rose to command them.  Some Roman commanders came from the very people they were fighting in the border regions.  Soon Rome would rely on mercenaries (hired soldiers) to defend their borders.  All of this cost the empire.  It had to pay more and more to maintain the loyalty of the military.  Ditto for the huge bureaucracy administrating the empire.  And they lost control.  Trouble on the borders and economic collapse ended the peace.  And, ultimately, the empire.  The civilized world broke down and collapsed.  And barbarian leaders on the borders, hungry for conquest, attacked.  Plunging the former Roman provinces into war and instability.

RISING FROM THE ashes of the Roman Empire were the seeds of new empires.  And the ground that proved most fertile was the northern limit of the old empire.  England.

England started to assert herself with the growth of her navy.  With her borders secured, a uniform government, a rule of law, a stable currency, bustling trade & markets and a military to be the world’s policeman, peace broke out.  Again.  For about a hundred years.  During the Industrial Revolution.  After the defeat of Napoleon. 

Imperial Britain stretched across the globe.  The sun never set on the British Empire.  And wherever she went, she brought the rule of law, modernity, a sound economy and political stability.  Her old colonial possessions went on to be some of the richest, most prosperous and peaceful nations in the world.  India.  Australia.  New Zealand.  South Africa.  Canada.  And, of course, the United States of America.  She achieved her century of peace (Pax Britannia) by a balance of power.  She maintained peace by intervening in disputes, often on the side of the weaker nation.  She prevented stronger, aggressive nations from threatening her weaker neighbors.   And she provided a safe environment for the weaker nation to live peacefully in the shadows of stronger, more aggressive neighbors.

For a hundred years Britannia kept the peace.  In large part due to her Royal Navy, the most powerful and potent navy at the time.  If you ate any imported food or used any imported goods, it was thanks to the Royal Navy that kept the world’s sea lanes safe.  But this peace came with a price.  The rise of nationalism, the quest of new empires to establish their own overseas colonies and a change in the balance of power in Europe with the rise of Germany added to that price.  And then a shot fired in Sarajevo by a Serbian terrorist ignited a tinderbox.  The assassination of Archduke Franz Ferdinand by Gavrilo Princip started World War I.  The most bloody and expensive war at the time, it bankrupted Great Britain and ended her empire.  And left the world a less safe place. 

From the ashes of World War I rose new leaders with aspirations of world conquest.  Fascist Italy led by Benito Mussolini.  Nazi Germany led by Adolf Hitler.  Communist Russia led by Joseph Stalin.  Imperial Japan led by Hideki Tojo.  And the nation that led the victors in World War II would, by default, become the new world power.  The new world policeman.  The United States of America.

SO WHAT HAPPENED during the inter-war years that led to World War II?  War exhausted Britain and France.  Neither had the stomach for another war.  Britain continued to rely on the Royal Navy for protection (as an island nation, sea power is indispensable).  France built fixed fortifications (the Maginot Line).  Both were primarily defensive strategies. 

In America, General Billy Mitchell demonstrated the vulnerability of battleships to air power by sinking a battleship with an airplane (greatly flustering the naval high command).  Colonel George S. Patton developed an armored doctrine for an unenthused army and eventually transferred back to the horse cavalry.  Meanwhile, Imperial Japan was building aircraft carriers.  And Nazi Germany, Fascist Italy and Communist Russia developed air and armored doctrine while fighting in the Spanish Civil War.

Fascist Italy attacked Ethiopia in 1935 to rebuild the Roman Empire and make the Mediterranean Sea a Roman lake once again.  Nazi Germany launched World War II in 1939 by an armored assault on Poland with tactical air support.  Poland resisted with horse cavalry.  And lost.  Imperial Japan attacked Pearl Harbor in 1941 to destroy American naval power in the Pacific.  They did a lot of damage.  But the American carriers, their prime objective, were at sea.  They would eventually meet those carriers later at the Battle of Midway.  Where they would lose four of their best carriers and many of their best aviators.  This tipped the balance of power in the Pacific to the Americans.

America was ill-prepared for war.  But American industry, the Arsenal of Democracy, ramped up and built the planes, tanks, guns, rifles and ships that would win the war.   It would come with a heavy price tag.  Global wars typically do.  Had there been a balance of power that would have checked the territorial ambitions of the aggressor nations, it would have been a different story.  Of course, having the power is one thing.  How you use it is another. 

France had more tanks than Germany before the outbreak of hostilities.  But the Nazis quickly overran France.  Why?  Doctrine.  France’s doctrine was to hide behind the security of the Maginot Line.  It was a defensive-only strategy.  She developed no armored doctrine.  The lesson they learned from World War I was that armies killed themselves attacking fixed defenses.  Germany, too, learned that lesson.  So their doctrine called for going around fixed defenses with fast-moving armor spearheads with tactical air support (i.e., blitzkrieg).  Formidable though the Maginot Line was, it could not attack.  And if the Nazis didn’t attack it, it did nothing but concentrate men and firepower away from the battle.

WHEN WE PULLED out of South Vietnam, we agreed to use American air power if North Vietnam violated the terms of the treaty ending that war.  Watergate changed all of that.  Even though JFK got us into Vietnam, it became Nixon’s war.  And a vindictive Congress wouldn’t have anything more to do with it.  The North tested the American will.  Saw that there was none.   Attacked.  And overran South Vietnam.  The message was clear to tyrants.  America will quit in the long run.  Especially after a large loss of life.

Other ‘retreats’ would reinforce this perception.  Especially in the Arab world.  The withdrawal from Lebanon after the bombing of the Marines’ barracks.  The withdrawal from Somalia after the Somalis dragged dead American troops through the streets of Mogadishu.  The Arab world even saw the victory in Desert Storm as a retreat.  The anti-American Arab world said that our invasion was about oil.  That what we really wanted was to topple Saddam Hussein and take his oil.  It was just another Christian Crusade into holy Islamic lands.  When we didn’t do that, the Arab world saw it as another American retreat.  That America didn’t have the will to endure a bloody battle to conquer Iraq. 

So some in the Arab world would test America.  Al Qaeda.  Headed by Osama bin Laden.  They started small and became more daring.  World Trade Center bombing.  Tanzanian Embassy bombing.  Kenyan Embassy bombing.  Khobar Towers bombing.  The USS Cole attack.  And they paid little for these attacks.  America didn’t fight back.  But their luck ran out on September 11, 2001.  Because America finally fought back.

PUBLIC ENEMY NUMBER one, Osama bin Laden, belonged to the conservative Sunni sect of Islam called Wahhabi.  They have a large following in Saudi Arabia.  The Wahhabi have a delicate relationship with the Saudi Royal family.  They disapprove of the Western displays of wealth in the House of Saud. 

Al-Qaeda was a shadowy enemy.  We confronted them in the mountains of Afghanistan where the Taliban gave them a safe sanctuary.  We attacked.  Knocked the Taliban from power.  Drove al-Qaeda underground.  But we could not stop their funding.

Wahhabi money from Saudi Arabia financed 9/11.  And the money continued to flow.  The Saudis would not intervene on behalf of America.  They feared any crackdown on the Wahhabi could unleash a civil war.  So America needed leverage to get Saudi cooperation.  And they found it in an old nemesis, Saddam Hussein. 

A Sunni minority ruled Iraq.  The Saudis did not like Saddam Hussein.  However, they liked the balance of power he offered to Iran.  Iran was Shiite.  As much as the Saudis did not like Saddam, they disliked Shiite Iran more.  This was the American lever.

After some diplomatic gymnastics, the invasion of Iraq was set.  The Saudis thought we were bluffing.  They didn’t believe we would invade Iraq.  Never in a million years.  If we didn’t do it in Desert Storm when we had the force in place to do it and didn’t, there was no way the Americans would amass another coalition and redeploy forces to the region again.  Especially because America doesn’t like long, drawn out, bloody wars.  Which an invasion of Iraq would surely be.

They asked us to remove our forces from the Saudi bases.  We did.  Now they were getting nervous.  That was the political game.  Make some noise to show the Arab world you weren’t an American toady.  But, secretly, you want those American forces to remain.  That American presence did provide security.  And stability.  After the invasion of Kuwait, it sure looked like Saudi Arabia would be next.  It was only that large American force in the desert that changed that inevitability. 

The Americans invaded.  And conquered.  Now the Saudis had a vested interest in helping the Americans.  They needed them to be successful in Iraq.  To contain Iran.  The lever worked.  The Saudis stemmed the flow of Wahhabi money to al-Qaeda.  The invasion of Iraq proved to be one of the most effective battles in the war on terrorism.  

HISTORY HAS SHOWN that a balance of power can lead to peace.  It has also shown that a superpower can enforce a larger peace.  But it also has shown that there is good and bad when it comes to power.  The Romans could be cruel, but so were most in that time.  The road to empire, after all, started out simply as a quest to provide a buffer between Rome and the hostile barbarians on her borders.  Rome, then, expanded in pursuit of peace.  (Initially, at least.)  And then used her power to maintain peace.

Many view Great Britain as the successor to the Roman Empire.  And many view America as the successor to the British Empire.  These powers share many things (rule of law, an advanced civilization, political stability, etc.).  Perhaps the greatest, though, is a powerful military.  And how it was/is used.  As a powerful deterrent to an aggressor nation.  To protect trade routes.  To maintain peace.  Malign these empires/nations all you will, but the greatest periods of world peace were due to their military power.  And their will to use that military power.  Expensive as that was.  Is.

So, yes, wars are costly.  Peace, too.  Sometimes, though, we must fight wars.  But we can avoid a lot of them.  By a peace-time military force that acts as a deterrent.  Because there are bad guys out there.  Who only respect one thing.  And it isn’t diplomacy.  Often the only thing preventing them from waging a cruel war of conquest is a potent military and a willing leader to use it.  If a tyrant knows he will face a military consequence for acting, he may not act.  When he knows that consequence will be devastating, he will not act.  But if he knows a nation hasn’t the military power or the will to use military power, he will act.  Just as Hitler did.  As Mussolini did.  As Tojo did.  And as Osama bin Laden did.

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