Category Archives: Italy

Misplaced charity


Pres. Barack Obama’s proposal for what would be a substantial new entry of Syrian refugees is a major miscalculation of traditional American morality and generosity.
It is true that the 13.5 million Syrian refugees, half of them expelled or hounded out of their country, are a momentous human tragedy. And America has almost always responded to some calamities.
But the question of additional Syrian refugees coming to the U.S. is part of a challenging failing American immigration policy which has become an extremely divisive political issue.
While generally unrecognized, it has arisen because of the profound changes which have taken place in worldwide migration patterns and the traditional one of entry into the U.S. Rapid and cheap transportation and communication has changed the pattern of the lives of newcomers to America.
In the great wave of American immigration of the late 19th and early 20th century, Europeans abandoned their homelands with a desire to build a new life in The New World. Ties to the old country, while culturally deep, dissolved – and, indeed, some ethnic and religious groups such as the Jews did not want to look back on persecution. Even the Italians, with their celebrated family ties, came and for the most part to their new neighborhoods, only occasionally maintained their European ties, mainly for remittances for family to follow them.
In the 21st century, immigrants to the U.S. may have much of the same motivation. But large numbers come for economic benefits and either maintain their relationships with their home countries, return at frequent intervals, or, indeed, return to their original homelands.
Those New York City Indian and Pakistani taxi drivers, for example, rarely bring their families, and return on long “vacations” to their families with whom they are in constant contact through cheap communication. This group, like other migrants with similar patterns, have no intention of becoming ‘Americans” in the traditional way although they might acquire U.S. citizenship for convenience and profit. Important, often influential, groups such as these exist today at every level of American society including the highest echelons of business and culture in our major cities.
Another significant difference from past patterns of immigration is that welcoming ethnic or religious communities in the U.S. which once helped integrate the newcomers are no longer prominent if they exist at all. Syrian Moslems, for example, find little institutional aid from coreligionists when they immigrate to the U.S. And, in fact, some of the existing Moslem organizations are suspect with ties to the Moslem Brotherhood, the fountainhead of Islamic terrorism. Ostensibly pursuing an electoral policy [The Brotherhood’s strategy of “One man, one vote – one time!”], Its attempt to establish an Islamic dictatorship was proved quickly to the satisfaction of the Egyptian electorate which welcomed the military back to power.]
On August First U/S. Homeland Security Jeh Johnson issued “temporary protected status” to some 8,000 Syrian, many of whom had arrived in the U.S. illegally. He did so, he said, because ““Syria’s lengthy civil conflict has resulted in … [A]ttacks against civilians, the use of chemical weapons and irregular warfare tactics, as well as forced conscription and use of child soldiers have intensified the humanitarian crisis.” Another 7,000 Syrian refugees – many of them persecuted Christians and other non-Moslem minorities — have been admitted legally to the U.S. since Oct. 1, 2015. Obama announced in September that the U.S. would admit 10,000 Syrian refugees by Sept. 30, 2016.
But GOP presidential candidate Donald Trump has attacked this decision, arguing that – as FBI Director John Comey has admitted – despite elaborate UN and US procedures to process them, little is known of the refugees’ background. Daesh [ISIS or ISIL] like other Mideast terrorists has made no secret of their attempt to infiltrate refugee communities. Only a few such subversives, given the gruesome “effectiveness” of suicide bombers, could defeat efforts to defend Americans against attacks such as took place in Orlando, San Bernardino and Ft. Hood by immigrants.
American charity might better be directed toward relief efforts for the Syrian refugees in the region. Oil-rich neighbors in the Persian Gulf have not met demands that they absorb, at least temporarily, Syrians [and other Mideasterners masquerading as Syrians] who have moved into Jordan, Turkey and Western Europe by the hundreds of thousands. [Germany took in more than a million migrants from the Mideast last year, and difficulties of absorbing them and with highly dramatized attacks on women and other crinmes, are now producing a backlash against Chancellor Angela Merkel’s welcome].
Illegal migration from Mexico and Central America has already become a major problem for U.S. immigration policy, developing into a political football between the parties based on a still nebulous growing influence of Spanish-speaking voters. Adding the Syrian problem to this controversy neither benefits the humanitarian goals of its sponsors nor the formulation of new American immigration policies to meet a new world of migration.
sws-08-4-16

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Special Relationship II


Back in 1887 the famous poet and storyteller Oscar Wilde quipped: ‘We [English] have really everything in common with America nowadays except, of course, language’. We got another example of this malediction in the blah-blah-blah which has attended Britain’s decision to leave the European Union. What is most apparent to all but the Talking Heads is that London’s negotiating a two-year exit from the EU will result in a revival not only of the vestiges of empire – as much legend as reality – but a renewed emphasis on the Anglo-American alliance, “the Special Relationship”
Like so much of traditional diplomacy, Pres. Barrack Obama and his former secretary of State, Hillary Clinton, gave that relationship short shrift. Obama, imbued with the Left’s religion of anti-colonialism – a view of the world which is not only unrealistic but ignores the actual relationship of the Metropoles of Britain, France, Italy, and once Germany, to their 19th centuries acquisitions. True, they were exploitive relation ships but they also accelerated the arrival of at least portions of modernism to pre-industrial societies.
As Obama’s attempts to “transform” American foreign policy have either miscued or collapsed over the last seven-plus years, his attempt to derail the historic relationship between the U.S. and Britain has also gone astray. Common language, shared democratic values and concepts, special interests throughout the work, have made a working relationship between Washington and London an irreplaceable part and parcel of U.S. internationalism.
The combination of Obama’s war on this tradition, his buffoonish attempt to influence British voters on withdrawal from the EU which boomeranged, and the U.S.’ expanding interests in the post-World War II world have tended to eclipse that relationship. That illusion was enhanced when London seemed to be throwing in its lot with the movement for a united Europe, one which had been a special project of American strategy for a half century, but not always with its final destination in view.
Now, the latter project is in deep trouble. Few Europeans want to face the reality of German domination as by far the largest and economically the most powerful of the EU states. That will halt the perfectly “logical” calls by Berlin that the EU must go forward to further political integration or collapse. But the French, once Germany’s twin partner in European unity, in a miraculous and real transformation, are for the first time abandoning dirigisme, French promotion of economic planning and control by the state, under the pressure of the competitive drive of “globalization” is being abandoned – and that under a socialist government! The concept had defined the distinctive character of French politics, inherited in part from its royal and multi-republican past, and which it had passed on to the Brussels Eurocrats it had largely supplied and still dominated.
London ‘s withdrawal — although it will continue to bargain for special trading and other economic rights inside the EU, whatever it means in the short-term — means a return to Britain’s diminished but continuing role as a world economic power. The good sense and good luck that kept Britain out of the EU’s now faltering monetary union means that once again, in parallel with the dollar, sterling will resume an stronger international character.
London’s City, which was ceding its role to Frankfurt and Zurich, will be reinvigorated in the longer term by the British withdrawal. That role of London as the world’s second financial center after New York will be felt all the way through the Middle East oil countries [with their traditional ties to the Colonial Office] to Hong Kong and beyond. [What the Japanese will do with their heavy investments in British manufacturing as a base for the EU remains to be seen. But it would not be the first time that Japanese business has had to make major adjustments to its successful formula for being the only non-European power to have made it to First World status].
The revival of the Special Relationship will have new and totally different aspects – again, despite Obama’s original high-priced energy policies, the U.S. and its Shale Revolution has put a new floor under world energy prices. It is one the Mideast producers can meet, of course, but not without cutting back on their enormously spendthrift policies of the past. It could well be that Special Relations II will see the U.S. as Britain’s major supplier of energy and energy technology for development of its own shale resources, environmental freaks notwithstanding.
Prime Minister David Cameron may have to go as a sacrifice on the altar of City business interests and the universal “internationalization” panacea which has dominated both U.K. and U.S. politics under his Conservatives – as well as the Democrats in Washington. And that may introduce new uncertainties along with some disturbing personalities.
But the dye is cast: Special Relationship II has begun with the British voters’ decision that they wanted autonomy and not collaboration at too high a price in cultural values with a Continental bureaucracy and its economy That bureaucracy, too, is now fatally wounded and events will lead to new and likely unpredictable changes in Paris, Berlin,.Brussels and the other EU capitals.
sws-06-24-16

Twilight for social democracy


Ironically, at a time when American politicians are flirting with social democratic concepts, their historic parties are fading in Western Europe where those political slogans originated.
The prime example is Spain. There the PSOE [Partido Socialista Obrero Español], the Party of the Spanish Worker, the country’s oldest, has weathered many crises. During the 40-year-long Franco dictatorship, it maintained its role as the principal anti-Communist left opposition operating among refugees in France.
After governing in Madrid 21 of the last 39 years, the PSOE will probably lose its commanding position in this month’s elections, even losing role as leader of Spain’s left where the majority of the voters self-identify. Shorn of their old Soviet attachment and command structure, a revolutionary movement on the left, Podemos, and a right of center party, are likely to reduce the PSOE to less than 20% of the vote. Spanish political theory is highly influential throughout the whole Ibero-American world, and Latin American styles are almost certain to follow – as already demonstrated in Brazil, Argentina, Peru, and soon in Venezuela, where left-wing regimes are being ousted.
The loss of popularity of the social democrats in Spain echoes throughout Western Europe where for more than a half century they have played a dominant role. In Germany, the original home of social democratic concepts, the socialists are polling new lows. The ruling French Socialists have become increasingly unpopular under their Pres. François Holland, in part because he has adopted a program of economic and labor reforms ignoring traditional socialist nostrums.
In the early 90s, Italy’ socialists – in the early postwar years with a Soviet line by far the largest party, an ally of the Communists — under their first prime minister, Bettino Craxi, was almost wiped out by corruption. Three Socialist deputies committed suicide as a result of the scandals. Splinters of the early socialist parties, from anti-Communist to those fellow-traveling in the Soviet era, have joined forces forming the Socialist Party (PS), renamed Italian Socialist Party (PSI) in 2011. But many former social democrats have deserted the socialists for four-time Prime Minister Silvio Berlusconi’s bigger tent, largely a right-of-center grouping.
Europe’s social democrats have become discredited through their growing association with the policies of the moderate right — austerity, deregulation, liberalization and free trade. Virtually the whole technocratic community has seen these as necessary economic measures to restore prosperity. These have been increasingly seen by the media and among many younger politicians as the cause of Europe’s present economic decline.
But as voters of the traditional left have grown bitter as they saw their party of the welfare state, the public sector and of the blue-collar workers, reverse its governing strategy. That feeds a growing separation between social democratic politicians who view these policies as the only options as jobs have disappeared and economies flattened and the street, always ready to find leaders for protest and violence..
In Spain, an inconclusive general election last December left the socialists in a dilemma: either adopt the centre-right promises of tax cuts and more supply-side reforms, or bend to a new left that calls for an end to austerity and channels the anger of the mob.. In the U.K., this dilemma has produced a new leftwing leadership in the Labor Party, But whether, even with the conservatives in disarray over the question of withdrawal from the European Union, they have a formula to gain power is dubious.
It seems unlikely that this paradox won’t be present for the European socialist movement for the indefinite future. Whether it has application to the American scene – current political fashions to the contrary – seems highly unlikely. The U.S. economy, while not roaring forward, still is the envy of most of the Western world, with few calls even from the “progressives” for the nationalization and “socialization” of the major industries.
sws-06-22-16

Greece: the real question


When the Euro was being proposed and in its early days, some of us had a question: could a common currency be possible within a group of countries all of whom maintained their own individual economic, monetary and fiscal policies?
When we got an answer back, which wasn’t too often, it came in myriad voices.
On one end were those who “promised” us that in some mysterious way this fundamental problem would be solved. At the other end of the spectrum were a few brave if somewhat idealistic souls who advocated the abolition of individual nation states for at least a federal if not a unitary political union for which the common currency would be a handmaiden.
In between, were all the spoken and unspoken solutions, verging from a seemingly commonsense vow that progress toward a commanding central bank and one policy would emerge out of the various European institutions – the bureaucratic European Commission, the nominal multilateral executive, the Council of Ministers and the relatively powerless European Parliament. In addition, this Christmas Tree was decorated with an additional four high-sounding named institutions such as the European Court.
Britain, of course, in the usual pragmatic way of the Anglo-Saxon constitutional process, opted out. It would not and could not abandon sterling, if no longer a challenge to the dollar as a world reserve currency, still served as a handmaiden to The City and the continuing profitable dominance and profitability of London as a leading world currency exchange.
Of course, in what could have easily been predicted would be the new order, each country went its own way. There was even continual conflict between Paris and Berlin, the two central pillars of the new money, with France always flirting with “dirigisme” – central planning – and Germany pretending, at least, to be a full-fledged market economy.
But while the big boys discussed the major issues interminably, the cat was away and the mice, they did play. It was far too easy for Athens [and to an extent Lisbon, Madrid and even Rome, a major EC player] to use their unlimited draw on the common currency to finance lifestyles to which they would like to become accustomed but for which they were either incapable of producing or for which they were unwilling to work hard enough to attain.
True, much of the Greek mess is historical. It has always been easy – with some tjustification — to blame it on the hated Turks’ Ottoman Empire heritage, but now a hundred years away.
Yet no one now speaks above the intense and infinitely complicated negotiations to trim Greece’s exceseses without killing its economy altogether, a game in which Athen’s shrewd if amoral leftwing government pulls the cat’s tail and dares it to take a fatal snap that would destroy the figment of a voluntary association of free nations.
sws-07-06-15

Strategy, any one?


 

“Okay, smart-a___, what is your strategy?”

In a [rather large] nutshell; here are the tactics which when pulled together make up a grand strategy:

Domestic

Make an “America is back!” speech from the Oval Office in the White House modeled on Harry Truman’s “Doctrine” speech of 1947. http://www.americanrhetoric.com/speeches/harrystrumantrumandoctrine.html   Its principal theme would be recognition that the U.S. and its allies are launched in an extended war — and still far from being won — against the Islamic jihadists.

Immediately ask Congress for emergency lifting of all Sequestration applying to the Department of Defense, the CIA and other security agencies for five years. Halt and reverse with continuing extension and recruitment the personnel cutbacks now decimating the American armed forces.

Reverse energy policies to provide the U.S. economy and our allies with a noninflationay stimulus of cheaper fuel, simultaneously directly providing hundreds of thousands of new jobs, by:

 

  • Administratively, opening up all federal lands [including offshore Virginia, etc.] to fracking,
  • Administratively, waiving all EPA regs on fracking for five years.
  • Administratively, fast-tracking applications for the dozen or so outstanding applications for liquefied natural gas export facilities, putting on hold any Environmental Protection Agency regulations concerning them for a five-year period.
  • Asking  Congress to lift all oil and gas export restrictions, including a waiver on EPA fossil fuel export regs for five years. [These exports would begin to supply allies in Europe and Asia and simultaneously help mend the balance of payments hemorrhage against the dollar.]
  • Immediately okaying the XL Keystone Pipeline and other Canadian applications for pipelines into the U.S. directed at Houston refineries and their export facilities.
  • Pushing Detroit and foreign-owned auto companies to organize and subsidize a national network of filling stations for an expanded production and use of LNG-fueled vehicles.

To reinforce federalism, begin the rescission of the 17th amendment, restoring the original intent of the Founders by returning the power on how to elect senators to the states, freeing the states to determine their own method including indirect election by the various legislatures. [Most of the turn of the 20th century arguments for direct election are now better ones for indirect election, e.g., “it’s a millionaire’s club”.]

Resurrect the independent U.S. Information Service with a cabinet post and assistant secretaries from State, Defense and CIA. The new department would incorporate the Board of International Broadcasting, expanding Radio Liberty [with renewed local language broadcasts to Central Asia] in order to tell “the American story” to the world.

Mideast

            Bomb the ISIL in Syria and Iraq “back to the stone age” with a massive WWII type aerial bombardment. In riposte, sanction all banks and financial institutions – including third parties, and, of course, including all Russian and the Chinese institutions – doing business with the al Assad regime.

“Pressure” Turkey to accept a NATO mission on its southeast flank to work directly with the secular and “moderate” Islamic anti-Assad forces from a Turkish sanctuary. Organize with our NATO partners a joint “request” that Ankara release immediately all imprisoned Turkish journalists as the first step in reinaugurating the movement toward a civil society. Let Pres. Recep Tayyip Erdogan know if he does not acquiesce to these quiet pressures and move back from his drift into Islamism, Washington will demand Turkey’s expulsion from NATO.

Reinvoke strict sanctions on Tehran until the mullahs accept a NATO – not the UN IAEI which has been so notoriously inept — inspection of their nuclear activities. Slam the possibility of military intervention “back on the table” and be prepared for surgical strikes to slow if not deter the Mullahs’ acquisition of WMD.

Administratively, add the Moslem Brotherhood to the State Department’s terrorist list, and direct the FBI to insure that all domestic Islamic organizations [including mosques] with formal and informal ties to the Brotherhood be put on a terrorist alert list.

Lift all restrictions on arms to Egypt now being temporarily enforced and invite al Sisi to visit the U.S. before mid-summer 2015.

Persuade al Sisi to abandon his dicey Second Suez Canal Project. Instead round up  Gulf States, Israel’s Dead Sea Works, the World Bank [IBRD] and private European, American and Japanese capital to fund the Qattara Depression Project to provde Egypt with cheap hydropower and a new chemical industry. http://en.wikipedia.org/wiki/Qattara_Depression_Project

Immediately and with considerable public fanfare accept Sheik Tamim bin Hamad Al Thani’s request for stationing additional American forces [he has called for 10,000] on the world largest air base at Al Udeid [Abu Nakhlah Airport], the U.S. Army base at Sayliyah and the U.S. base at Doha. Then, “encourage” the Gulf States [UAE, Dubai, Saudi Arabia] in concert with the United Arab Republic [Egypt] to ultimatum the Sheik to end all payments and subsidies to the Moslem Brotherhood, Hamas, al Nusr and ISIL and to both Arabic and English al Jazeera networks — “or else”. Compensate by helping the EU, and especially Germany, to negotiate greater LNG purchases from Qatar, if necessary using additional European storage facilities, to negate the Russian fossil fuels blackmail.

Immediately supply Ukraine with necessary heavy weapons and technical assistance to meet Pres. Vladimir Putin’s aggression.

Reoccupy with significant ground forces and maximum publicity the old Wheelus U.S. Air Force base at Mitiga International Airport in eastern Libya. “Encourage” Gen. Khalifa Belqasim Haftar to negotiate merger of Libya with the United Arab Republic [Egypt] with the help of ENI [Ente Nazionale Idrocarburi ] whereby the huge oil revenues could be stolen and wasted more beneficially.

“Persuade” the UN to amalgamate the UNWRA [special Palestinian UN organization with its enormous budget] with the UN Refugee Organization with the appointment of an American administrator by withholding the major part of both their fundings from the American taxpayer [as was done earlier to reform UNESCO and ILO]. Insist on a purging UNWRA staff, ejecting all those who have worked for or been active in Hamas, a terrorist organization so designated by the US and its allies.

Europe

Put the ruffles and flourishes back into the Anglo-American alliance with its attendant links to Canada, Australia and New Zealand as the cornerstone of NATO and America’s world alliance strategies.

Deliver SAPiest heavy weapons and technical assistance to Ukraine in its fight against the invasion by Russian Pres. Vladimir Putin’s forces and block Moscow intervention in rewriting the structure of the Kyiv regime.

Establish a NATO base in Estonia.

Move into lock-step with the French in tamping down West and Central African violence [see below].

See that the NATO Rapid Deployment Force becomes a reality SAPiest with the training on a level with the U.S.’ and Britain’s Special Forces.

Prepare for the eventual collapse of the Euro.

East & South Asia

Quietly assign a senior U.S. diplomat to a special U.S.-Japan-Korea commission to sit sine die to help sort out issues between Tokyo and Seoul with special personal representatives of Prime Minister Shinzo Abe and Pres. Park Geun-hye. [Their grandfather and father, respectively, established postwar relations between the two countries.] This would aim to smooth over the most important obstacle in an American-led defensive alliance in Asia against North Korea and Communist China threats.

Reinvoke the strict sanctions earlier used to induce the North Koreans to come to heel, including third party sanctions against any financial institutions who deal with them, openly or clandestinely. They would be lifted when an international inspection team consisting of Americans, Japanese and the NATO allies certify its weapons of mass destruction programs have been ended.

Nudge ASEAN to resurrect the intent of Sec. of State John Foster Dulles’ 1950s Southeast Asia Treaty Organization with the headquarters again in Thailand, and hold out admission possibility to Vietnam [if it makes major “reforms”, that is de-Communize] in its feud with Communist China.

Push Taiwan rearmament and “invite” the Republican Party to cuddle up to the Democratic Progressive Party to pressure the Kuomintang back into a stronger line against amalgamation with the Mainland to maintain the oinly democratic society in Chines history.

Latin America

Initiate “tough love” with Mexico, e.g., introduce legislation to subsidize American investment in Mexican oil and gas in exchange for joint paramilitary border operations to halt illegal flow of immigrants to the U.S. with reinforced joint patrols on both sides of the border and a joint U.S.-Mexican undercover immigration control force on the Mexican-Guatemala border. Reach agreement on new “modalities” for protecting American citizens traveling, visiting and doing business in Mexico, matching those affording Mexican citizens in the U.S.

Swap new legal provisions for bond concessions to the Argentines for their cooperation in U.S. Latin American projects, especially cleaning up “ice” trafficking through Rosario and Iranian penetration of neighboring Paraguay, and a quit-claim to the Falkland Islands.

Introduce legislation to reinstitute the macro aspects of the Cuban embargo at the same time removing all restrictions on movement to and from Cuba by American and Cuban citizens.

Africa

Move U.S. Africom to a new joint U.S.-French-Portuguese-NATO base to be built rapidly with port and air facilities on São Tome e Principe in the Gulf of Guinea while pursuing a campaign of destruction with African and Eruopean allies against Boka Harum.

If this seems a formidable list, it is indeed. It it seems an impossible list, remember that a population less than half the present one in the American war mobilization between 1939 and 1944 doubled real wages in the U.S., produced 229,600 aircraft, added 5,000 ships to the existing merchant fleet, even though two-thirds of the economy was devoted directly to military equipment — and simultaneously won a war against two formidable enemies. It took leadership and political resolve. But just as the attack on Pearl Harbor alerted a recalcitrant nation, however far current leadership has drifted away the country should be reminded that 9/11 was proof that “the splendid isolation” of the U.S. from the rest of the world’s troubles during the 19th century is long past history.

But no amount of posturing over strategy and tactics will suffice if the leadership is irresolute and tries to wish away the dangers of that world jungle that has now physically encroached.

sws-09-07-14

Living with ambiguity


An old Chinese curse, “May you live in interesting times”, has become a bromide. I suspect those old Chinese savants were smarter: Confucius [and his St. Paul, Mencius] codified rules and ceremonies for all princes for all eternity, undoubtedly suspecting, rightfully, all eras would have many if not most of the same difficulties. [What would the old boy have thought of Beijing leaders using his dogma, once trashed when they were Marxists, now in the service of Chinese “soft power” and espionage “institutes” around the world?]

These are, indeed, “interesting times”. Although our media and intellectuals increasingly try to entice us into believing the digital revolution has made all things knowable [after all we have google, Wikipedia and algorithms!], the world political economy is fraught with unpredictability. Wherefore, we resort to an even more ancient Indian piece of wisdom: “Arise, awake, and learn by approaching the exalted ones, for that path is sharp as a razor’s edge, impassable, and hard to go by, say the wise.” [Katha Upanishad – 1.3.14.]

Nowhere are ambiguities so manifest as in the current European geopolitical scramble. Furthermore, unlike earlier post-World War II European crises, the current debacle completely stymies Washington. While the U.S. is still the major world power looked to for leadership — if no more than for new fads – it has no remedies. It was all very well for Pres. Barack Obama to reassure the Europeans [and ourselves] they have the wherewithal if only they had the political will, but it was more than a little bit of hypocrisy. Not only is Washington not able to present a model of its own efficacy in solving debt problems, but quietly, the Fed joined other central banks a few weeks ago to extend short-term dollar loans to European banks virtually cut off from dollar credit — and not by those Occupy Wall Streeters.

The Fed moved because it is hard to exaggerate implications of any breakdown in the U.S.-EU economic relationship. In effect, North Atlantic trade represents virtual integration. Even with the economic downturn, more than a trillion dollars worth of goods traversed the Ocean in 2010; another $250 billion in services. Last year Europe invested another $100 billion in the U.S.; Americans put another $70 billion in Europe. A staggering $2.7 trillion was swapped in our markets.

Furthermore, Mr. Obama’s prescription is easier said than effected in societies increasingly dependent on nanny governments to sort their problems. European private initiative, never of the American intensity, has atrophied. [The European Union Commission at the moment is in hot pursuit of highly debated standards for bottled water!]

Nor will a pampered electorate go quietly to new temporary consumption restraints. Even now opposition to ending the French 35-hour work week could well become a major issue in next year’s presidential campaign. Firing some of every third Greek who works for government [and who notoriously does not pay his taxes] reawakened old postwar Communist-rightist confrontation. Even the recent boost given German exports, Berlin’s economic deus ex machina, was, ironically, the cheaper Euro. But a depreciating Euro hardly seems adequate for Europe’s legendary powerhouse as Germany’s population declines and ages rapidly, its labor force narrows, and there is more and more questioning of integration of four million Turkish Muslim “guest workers” who came in the 1960s — and stayed.

From day-to-day, it becomes increasingly clear the reserves of Euro governments and the banking system cannot cover the growing sovereign and commercial deficits of 17 members of the common currency. Credit has evaporated as lenders perceive their exposure more endangered by the moment, not only to whopping “haircuts” – “voluntary” discounts of outstanding debt — but by a growing possibility the debtors may not be able to amortize even those discounted tabs as their economies spiral downward under the eight of severe austerity and social disintegration. Nor is it certain “technocratic” governments in Greece and Italy can manage essentially political decisions.

For Americans, the question of the hour – carefully not asked by our talking heads — is whether this European financial “malaise”, with a continuing failure of the Europeans to address it more than sequentially, will spread to the U.S.? Do our bankers with all their handheld devices really know what their actual exposure is – or will we be treated to new surprises as we were in 2007-08?

That Atlantic bridge could be in for even heavier if snarled traffic.

sws-11-19-11

The Euro is dead, long live the euro!


In the spring of 1947, I was on deck as one of that dying breed of transatlantic liners was tugged into Le Havre. Despite decades of experience there was incredible confusion as French stevedores hassled over tying up ropes. A rail companion, a French Jewish refugee returning from American wartime refuge, declaimed, “Eh voila! L’élan francaise”. My 90 hours Berlitz preparation for being a “sois-dissant” Paris student, unabashedly imitating my 20s predecessors, had done me well. But I hadn’t a clue what “élan” meant, so he went into a “cartésien” dissertation on how Frenchmen were individuals as none other, cooperation comes hard if at all, and the genius of the civilization resides in that peculiarity. [Gen. Charles DeGaulle: How can anyone govern a nation that has two hundred and forty-six different kinds of cheese?]

As “Europe” falls apart, it’s natural each of its 27 members would be doing their thing. For the moment – while a search goes on for a missing one trillion Euros [$1, 400 billion] – the Euro has been rescued as a common currency for 17 members, and, hopefully, the whole Europe Project to unite a continent for peace and progress survives.

But continuing crisis, whatever its final outcome, is already rearranging geopolitical pieces on the European chessboard:

London smugly congratulates itself for refusing to enter what is now a failing common currency, preserving The City’s worldwide financial role. But Prime Minister David Cameron backbenchers’ called for a referendum on British EC membership. While put down, they will haunt his promised negotiations to rearrange the UK’s relationship with Brussels.

German Chancellor Angela Merkel will fiercely resist efforts to rearrange London’s other “special relationship”, perhaps forcing a showdown on whether you can be half in and half out. She has rammed through a call for more EC economic and political integration, swapping it for her recalcitrant Bundestag’s veto over more bailout. But at her back are obstinate voters reluctant to pick up the chips for southern bankrupt members of a common market Germany’s export drive exploited so shamelessly.

Chancellor Merkel bested French President Nikolas Sarkozy, facing a tough election next year after failing to produce his promised marketizing of the French economy. He wanted a super-Q-easing by the European Central Bank to save the Euro and inflate. In that grandiose French play, he proposed “comprehensive” settlement while the methodical Teutons wanted step by step – even at the risk of more minicrises and general economic doldrums as austerity brakes growth.

Italy’s tragicomedy starring Prime Minister Silvio Berlesconi featured parliamentary fisticuffs. Worse, his painful promised belt-tightening for the Italian welfare state built since it beat off a near successful attempted Communist coup d’etat in 1948 could get its ultimate test. Does the family, the cornerstone of Italian culture since the Romans, remain strong enough to buoy a society with the lowest birthrate in Europe, the mother of modern international immigration now facing invading hordes on the North African coastal periphery?

Initial market falderal was heartening. News that America, the heart of the world economy still for all the talk of shifting patterns, had grown in the last quarter instead of drooping into doubledip recession, heartened the optimists.

But there is bound to be a second look. And when the spectacles come out, analysts will find less detail to the Euro settlement than headlines. Germany is still keeping a staying hand on the throttle of the European Central Bank. The European Economic Stability Fund still looks more like an impoverished debt set-aside than a mini-IMF. And the controversial Eurobonds proposal hangs over the dusty debris left by two officials’ talkathons

President Sarkozy’s call to China’s Prime Minister Wen Jiapao for help in bailouts and recapitalizing European banks is fantasy. Beijing plays a completely mercantilist hand. With its exports threatened and repeated promises to its own increasingly restless to shift to a more consumer-oriented economy, China’s more than $3 trillion in monetary reserves [20% in vacillating Euros] is mortgaged by a deflating dollar and its own incipient inflation. Ditto, Brazil – in a welter of official corruption scandals – and India with seemingly uncontrolled inflation. President Barack Obama’s op-ed proposing a firewall against a European debacle added insult to injury. U.S. banks sometime back stopped Eurolending — with their exposure still unknown.

Help, if it comes, will look to those glorious European traditions – all of them, as varied and contradictory as they are.

sws-10-29-11