Via GQ: At a Mitt Romney event yesterday in Rochester, N.H., the two guys sitting next to me were both wearing hipster framed glasses and fitted sweaters—they looked, to put it mildly, much dandier than your typical Republican primary voter. “We’re from Denmark, which is in this sense a totally socialist, liberal country,” Tejs Laustsen
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Commie Heartache: European Socialists Disavow Barack Obama…
Are man-made global warming supporters using cult-like doomsday messages to gain support for their theories? Ross Kaminsky, a Heartland Institute fellow, seems to think so. In a post on The American Spectator , Kaminsky writes that many vocal global warming figureheads preach that disease and death will follow a warming planet, but notes that actual scientific studies are stating otherwise. Here are a couple of his examples: This week’s five-alarm fire (literally) comes from the NY Times which warns us that “Across millions of acres, the pines of the northern and central Rockies are dying, just one among many types of forests that are showing signs of distress these days.” The article, which implies that the earth will die if we don’t stop climate change from killing trees, is at least honest enough to use “if” six times, “might” three times, “may” seven times, and other qualifiers of their doomsday view such as “not sure,” “possible,” and “could.” While this particular Times story concerns North America, an actual study of African rainfall , done by scientists from NOAA and the National Center for Atmospheric Research in Boulder (both hotbeds of climate change alarmism), concludes that changes in rainfall levels in both northern and southern Africa are due to changes in sea surface temperatures, and that those temperature changes are not human-caused. Furthermore, when the UN’s IPCC tried to model the change in African rainfall based on human causes, they failed: “The ensemble of greenhouse-gas-forced experiments, conducted as part of the Fourth Assessment Report of the Intergovernmental Panel on Climate Change, fails to simulate the pattern or amplitude of the twentieth-century African drying, indicating that the drought conditions were likely of natural origin.” Or how about the association between global warming and a rise in malaria: a 2010 study led by scientists from the University of Florida concluded that “widespread claims that rising mean temperatures have already led to increases in worldwide malaria morbidity and mortality are largely at odds with observed decreasing global trends in both its endemicity and geographic extent.” Furthermore, they said that any increase in malaria cases from warming would likely be two orders of magnitude smaller than the reduction in cases due to “control measures” taken by humans, such as bed nets and anti-malarial drugs. (Two orders of magnitude means 100x, so 10 is two orders of magnitude smaller than 1000.) The key point is not that malaria cases won’t increase, but that they won’t increase because humans are smart and adaptable. Raminsky includes the long-term study by the Reason Foundation , which reviewed the trends in global mortality associated with extreme weather over a 111-year period (1900 to 2010), as further evidence that global warming is not increasing death rates. The study found that “aggregate mortality attributed to all extreme weather events globally has declined by more than 90 percent since the 1920s, in spite of a four-fold rise in population and much more complete reporting of such events.” Decreased mortality rates in the three following areas of extreme weather events, which are pillar examples for conditions in a changing climate, are what contributed most to this overall decrease: Deaths and death rates from droughts, which were responsible for approximately 60 percent of cumulative deaths due to extreme weather events from 1900–2010, are more than 99.9 percent lower than in the 1920s. Deaths and death rates for floods, responsible for over 30 percent of cumulative extreme weather deaths, have declined by over 98 percent since the 1930s. Deaths and death rates for storms (i.e. hurricanes, cyclones, tornadoes, typhoons), responsible for around 7 percent of extreme weather deaths from 1900–2008, declined by more than 55 percent since the 1970s. Kaminsky notes that people aren’t just skeptical of man-made global warming, but the solutions being proposed to help its victims. He includes Denmark professor of environmental economics Bjorn Lomborg as stating business-crushing regulatory policies is not the way to go, compared to simpler solutions like making clean water accessible in the third world. Scientists and government officials are also challenging some of the “mad scientist” ideas that are being proposed to prevent global warming, like geoengineering experiment in the United Kingdom that will use a giant balloon and 12-miles of garden hose to send particles in the stratosphere to block some of the sun’s warming rays. This illustration depicts the British geoengineering experiment that would send deflecting particles into the atmosphere to reduce global warming. (Image via BBC) A scaled-down version of this geoengineering experiment set to take place this month was postponed because officials need to discuss the potentially harmful impacts such a method would have, according to BBC . More: Column: Are Global Warming Scare Tactics Reminiscent of a ‘Cult?’
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Column: Are Global Warming Scare Tactics Reminiscent of a ‘Cult?’
If there’s one thing people notice about Herman Cain during the recent presidential debates, it is that he consistently focuses on specific solutions to specific problems. He is a consummate executive. Even Mitt Romney whose managerial experience is unquestioned somehow seems unfocused compared to the laser-like intensity with which Cain sticks to problem-solving. A perfect example came in the recent Fox News/Google Republican debate in which Mr. Cain was asked to name a department of the federal government which he would eliminate. After responding (to applause) that he’d get rid of the current EPA and start over, he pivoted to a solution for another problem: “Now, with the rest of my time, may I offer a solution for Social Security, rather than continuing to talk about what to call it? I have proposed the Chilean model. It’s been around 30 years, and it works.” Typical Cain, and part of what is so appealing about him. Of Mr. Cain’s many ideas, the most well-known — in part because of its clever sound-bite name — is his 9-9-9 plan which aims to replace most current federal taxes (including income tax, death tax, payroll tax, capital gains taxes, and double-taxation of dividends) with a 9% flat tax for business income, a 9% flat tax for individual income, and a 9% national sales tax. The plan would eliminate almost all deductions. While Mr. Cain’s consistent results-oriented approach is admirable — not least for its contrast with the other candidates — voters should be wary of the 9-9-9 plan despite its initial appeal. In short, it is somewhere between folly and economic suicide to implement a national sales tax, even at a modest rate, without simultaneously repealing the 16th Amendment to the Constitution (which permits a national income tax.) There is in economics a relatively new concept known as Hauser’s Law , named for its creator, economist Kurt Hauser of the Hoover Institution. Hauser’s law posits that the federal government cannot take more than about 19.5% of national income through taxation and that soaking the rich (or those whom President Obama defines as rich) will not generate the tax revenue that supporters of those higher taxes predict: “None of the personal income tax or capital gains tax increases enacted in the post-World War II period has raised the projected tax revenues.” (You can read Hauser’s original 1993 Wall Street Journal article here .) The Heritage Foundation notes that the 3-year average level of federal tax receipts as a percentage of GDP is about 18 percent . This number, as with Hauser’s number, represents all federal tax receipts, not just revenue from the individual income tax. To be sure, federal revenues as a share of GDP fell below that average in the current recession, down to about 15 percent in 2010, largely because the Bush tax cuts, so hated by the left, made our system more “progressive” than ever in our history. When the top 1 percent of earners pays more tax than the bottom 90 percent, and the top 10 percent pay 70 percent of all federal income taxes, it’s not surprising to see government revenue drop during economic turmoil and recession. However, the key point of Hauser’s law is not the low end of tax revenue as a share of GDP. It’s that the ability of high-income earners to time and shelter income, and the ability of many of them simply to quit working if the tax and regulatory environment becomes too onerous, make it extremely difficult to collect more than about 19.5% of the nation’s total income in federal taxes. But the only reason that Hauser’s law holds in America — because it doesn’t in Europe — is that America does not have a national sales tax. For a fair comparison, we must look at total tax burden as a percent of GDP, since our states collect sales taxes whereas European countries collect sales tax, usually called Value Added Tax (“VAT”), at the national level. According to OECD data , using an average of the years 2000, 2007, 2008, and 2009 (with 2000 being an usually strong year and 2009 an unusually weak one), the United States’ total tax revenue (not just federal) as a share of GDP was 27.8 percent, fifth lowest on a list of over 30 names. Here are a few European countries for comparison: • United Kingdom: 36.1% total taxes/GDP, with a VAT rate of 17.5 percent taking 6.8% of GDP . (The UK’s VAT rate has since been raised to 20 percent.) • Germany: 36.7%, with a 19 percent VAT taking 6.7% of GDP. • France: 43.7% total taxes/GDP, with a 19.6 percent VAT taking 7.3% of GDP In other words, governments of these countries which have national sales taxes take far more of the national wealth than we do in the United States. There are several European countries with even more punishing VAT and income taxes, with Denmark’s government confiscating an astonishing 48.8 percent of national income. Here’s the important history lesson: Sales taxes almost never fall. The UK’s VAT was introduced in 1973 with an initial rate of 10 percent, which was shortly thereafter changed to 8 percent for most items but 25 percent on gasoline. Since then, other than a recent one-year experiment lowering the rate from 17.5 percent to 15 percent, it has never been lowered. Germany implemented the tax in 1968 at a rate of 10 percent. It has been raised many times but never lowered. France implemented the first VAT in 1954, and raised the rate to 20 percent by 1976. It has stayed between 18.6 percent and 20.6 percent since 1984. As Milton Friedman taught us, “In the long run government will spend whatever the tax system will raise, plus as much more as it can get away with.”
Back in the 1980s, pop singer Belinda Carlisle topped the charts singing that heaven was in fact a place on Earth. Prophets are often ahead of their time, and notoriously underappreciated in their own land. But Miss Carlisle ended up being proved right. Heaven is indeed a place on Earth. It is called Greece. It is possible, amid the recent footage of riots, tear gas, burning buildings, and pepper spray, to get the wrong idea. But if you have lived and worked there over recent decades, you know Greece is the only place to be. You are one of the blessed, a lotus-eater, a dweller in the happy isles. Let’s say that you’re in your fifties, and have worked for 30-odd years in one of the world’s toughest professions — something sweat-inducing, a real ball-buster — on the front lines defending civilization as we know it. Hairdressing, for instance. If every weekday since leaving coiffure school you have been in the salon, providing first aid to split ends and sun-damaged hair, then from the age of 50 you could put your feet up. The state would support you for the rest of your natural life. And it’s not just hairdressers who enjoy this privilege. Other hazardous occupations that the Greek government decided deserved decades in retirement clover included street peddling, radio broadcasting, and nightclub singing. I don’t doubt those nightclub crowds in a seaside resort like Faliraki can be tough, but why should belting out the hits to sunburned tourists for 35 years single you out for four or five decades of the good life on a full state pension? The answer is that you’re not singled out. Nearly 600 jobs are similarly rewarded by the Greek authorities. Pastry chefs and trombone players are also deemed at risk, the former from breathing all that flour dust, the latter from gastric reflux. Radio announcers are considered to be vulnerable to microphone bacteria, while the toilers in Greece’s hair salons deserve compensation for handling the lethal chemicals used in hair products. It all makes Greece sound like a mighty dangerous place. Except that it’s not. It’s wonderful. Life expectancy is higher than in many other European countries, including Denmark and Great Britain. The average retirement age nationwide last year was 61, compared to 65 in Britain and 67 in Germany and Holland. What’s more, when they do retire, Greek citizens can expect to receive 80 percent of their final salary — not average or median, but final. So Greek retirees can live the rest of their lives in the manner to which they most recently became accustomed. In Greece recently I took the opportunity to hang around with the locals. It was a mind-altering experience. The government’s first round of so-called “austerity measures” was going through, but hadn’t made any palpable difference to the high life. It wasn’t just the easy talk of yachts and holidays I heard, but the everyday talk of endless entitlements. Civil servants employed to begin work at 9:30 in the morning and finish at 2:30 in the afternoon don’t pick up the phone after 2 o’clock. And even this is not as onerous as it sounds. Because these civil servants don’t actually have to be at work at 9:30. In fact there is a bonus scheme rewarding those who actually do turn up on time. And after that optional early start, the lunch break is certainly deserved. It’s all a foretaste of the civil service early retirement package. The more you listen and the more you look into it, the more it becomes clear that Greece is a social first, the fulfillment of an elemental human dream: the Greeks have created a country with no consequences. When they entered the eurozone they simply lied, concealing the truth of their woeful financial situation from Eurocrats too excited about extending their base to bother with due diligence on the cooked Greek books. When, at the end of this year, Greek debt hits 160 percent of its GDP, it will still have almost no impact on the majority of Greeks. Having had one bailout already from the European Union, they now await another. Since being saved from the precipice of financial catastrophe, the Greek government has finally been forced to rein in some of its worst excesses. So it has finally stopped paying final-status pensions at the rate of 14 months a year. That’s right: state pensions counted 14 months in a year, or rather two months a year which acted as double months — special pensioner bonus months. But even that’s assuming you’re one of the four out of 10 Greek citizens who actually pay any income tax. Considerably more than half the population find the whole tax business beneath them, or claim to be beneath it. So alongside the virtual and unreal real economy is a shadow, unreal, unofficial economy. And perhaps it’s this that keeps the whole party boat afloat. BUT WHATEVER the reason: this is the place. The weather is beautiful. The scenery is magnificent, and if you’re one of those smart Greeks who have found a way to live the high life at the expense of others, then there’s nowhere better in the world. The country is often talked about by doom-mongers as a foretaste, a warning, of what could happen to Spain, Italy, Britain — even America. But the truth is that as cautionary tales go, it’s not very scary. Because anyone who actually tries the Greek life will love it and do anything to get a piece of it. What is happening in Greece is the culmination of the European welfare dream. As if to prove it, the United Nations’ independent expert on foreign debt and human rights just consoled the dreamers by warning the Greek government that its belated austerity measures may be impermissible. The “basic human rights” of the Greek populace must be protected, said Cephas Lumina, particularly “their economic, social and cultural rights.” The reality suspension seems endless. It’s not only a basic right to live the high life — it’s against your human rights to be denied it. Heaven is a place on earth where you get to spend not only beyond your own means, but beyond the means of all your neighbors as well. You run up tabs you’ll never pay. And then you do it again. It is a country where no failure — either governmental or personal — is punished. And when the money runs out, it doesn’t. There are simply new ways to invent more. And on it goes. And nothing has consequences. The money grows on foreign trees. The party rolls on. And nobody will permit the music to stop. Because if it does then the lights will come up. And the aging Greek nightclub singer won’t be the only one looking ugly in the ensuing glare.
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The Good Life, Greek Style
Skies are dark with chickens coming home to roost as the European Union faces its worst existential crisis since its founding. But EU officialdom has other creatures than chickens on its mind, namely, hamsters. Not just any hamster, but none other than the Great Hamster of Alsace. After thorough investigation and due deliberation the Union’s highest court, the European Court of Justice in Luxembourg, has solemnly threatened France with $24.6 million in fines if it does not better ensure the wee, timorous beastie’s favorite diet of grass and alfalfa. Thus goes “Europe” — the quotation marks distinguish the artificial creation from the real thing — today. The Eurocrats’ 20th-century dream was to force Europe’s vastly diverse nations, each with its own proud history, culture, language, and currency, into a single politico-economic mold — an early example of cookie-cutter globalization. Today’s 21st-century reality is something else: a surreal multinational botch run by a Brussels-based oligarchy. Busily fiddling while Rome burns, it spouts Eurospeak and produces a Eurofudge of questionable statistics, fake achievements (it claims to have singlehandedly brought peace to the Continent), and intrusive, pettifogging regulations. The Eurocrats’ two most radical measures for forging “Europe” were the 1992 Maastricht treaty creating a monetary union with the euro single currency, and the 1985 Schengen accord abolishing borders between the 17 EU member states that adopted it. With the euro and passport-free travel, the official propaganda went, Europeans would celebrate their newfound brotherhood, merrily mingling freely. Everybody would feel more “European.” Initially these were the EU’s most popular innovations, seemingly greasing the wheels of integration and making life easier. The irony is that today’s twin European crises are precisely the result of 1) a rigid, unworkable monetary union and 2) a borderless area open to uncontrolled population movements. Now Europeans are rebelling from Madrid’s Puerta del Sol, where tens of thousands of Spanish indignados this summer chanted their refusal to pay for the Eurocrats’ errors, to Athens’s Syntagma Square, where outraged Greek aganaktismenoi rioted in clouds of tear gas against punishing austerity measures imposed to save the endangered euro. Anger is also boiling in Ireland and Portugal, where economies have gone bust due to soaring consumer prices and disastrous credit bubbles created by the artificially low interest rates of an easy-money euro. The revolt has caught the Eurocracy by surprise. It shouldn’t have. After all, the Common Market/European Community/European Union, or whatever it will be called next year, was never put to a Europe-wide popular vote. This oversight is delicately described in Eurospeak as “the democratic deficit.” But on the few occasions when Europeans have had the chance to express their opinion in national referendums, they have shown contempt born of clear-sighted common sense. The Danes voted against the Maastricht treaty; the French and Dutch both tried to shoot down the new EU constitution. The Eurocracy’s reaction was to order them to vote again (and again, and again, if necessary) until they got it right. When a majority of British and French citizens dared tell pollsters life had actually gotten worse under the EU, the oligarchy dismissed them as “nostalgic and insecure.” Postwar Europe’s leaders were blinded by their vaulting ambition to create an ever bigger “Europe” as fast as possible before anyone noticed its flaws. It was, they explained, like riding a bicycle: you had to keep moving or you would fall. Or, as one European Commission president, the French Socialist Jacques Delors, baldly put it in the 1980s, “We don’t know where we’re going, but we’re on our way.” Otherwise they would have realized the folly of a politically motivated monetary union, with fixed, one-size-fits-all interest rates and no possibility of individual member-states devaluing in times of -crisis. It should have been obvious that it was impossible to combine strong economies like Germany and France with weaker “periphery” countries like Greece and Portugal. American free-market economists like Milton Friedman early questioned the validity of the euro, a currency based on utopian dreams instead of economic reality. But they reckoned without the European practice of arranging facts to obtain the desired result. Thus countries applying to join the eurozone were allowed to qualify by cooking the books, using off-budget accounting, getting special waivers, and other typical Eurofudge. IN THE CASE of Greece, epicenter of the current euro crisis, the fudge was particularly thick. To start with, Greece flagrantly failed to meet the required fiscal criteria for membership when the eurozone was set up in 1999. Not to worry. In 2001, Brussels turned a blind eye to Athens’ phony budget numbers and admitted Greece. Monetary union marched triumphantly on. With that, Greece was eligible to borrow at much better interest rates than it could have with the lowly drachma as its national currency. Thanks to abundant cheap money, the Greek economy, rife with chronic corruption, cronyism and tax evasion, suddenly boomed. The Greeks knew they were living high on credit. They also knew that, when the crunch came, the hardworking Germans would bail them out to save the euro, for which they reluctantly had sacrificed their cherished deutsche mark. When Greece’s inevitable debt crisis hit last year, the solution was more Eurofudge: in breach of the Maastricht treaty, which forbids financial aid to a member state that gets into fiscal trouble, Brussels put together a $158 billion bailout. When that wasn’t enough, it kicked the can further down the road last June with a $17.4 billion loan to keep the government running through summer. And that loan was just to tide Greece over until the EU, after a series of embarrassingly futile summit meetings, could deliver still another billion-dollar rescue package. In return for continuing life support, the Greek parliament went through the motions of passing an emergency austerity package of spending cuts to public services, tax increases, and the sale of state-owned assets like the ports of Piraeus and Salonika. (And if you believe those deeply unpopular measures will ever be applied, thereby increasing unemployment and prolonging the recession, I have a tower in Paris I’d like to sell you.) With Greek bonds downgraded to junk status by rating agencies, few believed the country could avoid default. (The agencies, like Moody’s and Standard & Poor’s, were American and therefore biased against Europe, sniffed the Eurocrats, attacking the messenger who brings bad news). Default by one member could put the entire eurozone in danger of domino-like contagion–Portugal’s bonds are already junk grade, and there are doubts about Spain and Italy–and catastrophic financial failure, a Lehman Brothers disaster on a Europe-wide scale. As the economic journalist Robert Samuelson says, “It has come to this. A year after rescuing Greece from default, Europe is staring into the abyss. There is no easy escape.” HAD IT NOT been in such a hurry to achieve its fait accompli , the Eurocracy also might have foreseen the inevitable problems caused by its other grand projet , a passport-free Union. After their initial enthusiasm for leaving passports at home when heading for Mediterranean beaches, Europeans began to realize that free movement within the 25-nation Schengen area meant just that: once accepted in any member country after a cursory procedure, a new arrival from anywhere on the planet can roam freely and eventually settle in next door. He may not speak the language, he may not have a job, but he is eligible for free medical care and other generous social benefits paid for by local taxes. This is now running head-on into the instinct for self-preservation and enduring nationalism of ordinary Europeans, especially now that public opinion is being increasingly influenced by right-wing parties from France to Finland, Austria to Italy. One telling sign can be found in the usually liberal Netherlands. From the creation of “Europe” half a century ago, the Dutch have been stalwart promoters of greater integration. No more. Now Dutch leaders are warning Eurocrats to heed the growing populist anger. “The most stupid thing is to neglect this and tell these people they are behind the curve, that they don’t understand what’s going on in the world,” says Ben Knapen, the Dutch EU affairs minister. Pushed by the right-wing, anti-EU Freedom Party, the Dutch government is considering expelling EU migrants who have been unemployed for more than three months, and cutting benefits for those who fail a Dutch language test. As one Dutch parliamentarian puts it, “We don’t want jobless Poles, Romanian beggars and people from North Africa or Turkey.” In Denmark, the populist Danish People’s Party, a coalition partner in the government, recently forced the reopening of Denmark’s long-closed border checkpoints and customs houses. This direct challenge to the Schengen treaty–and the trend it represents–creates painful angst among EU faithful and draws frowns from the Eurocracy. “Stopping free movement endangers solidarity among Europeans and jeopardizes the European project,” lectures José Manuel Barroso, a former Maoist and now, most appropriately, president of the unelected, unaccountable, Politburo-like European Commission in Brussels. “Nationalists in every country will get the same idea,” warns a foreign ministry official in Berlin. “They will model themselves on Denmark.” How true. Denmark’s new policy on border checks was hardly announced when France’s National Front, led by the charismatic Marine Le Pen, began putting up posters with the slogan, “Denmark patrols its borders. Why not us?” The campaign resonates in a country like France, struggling to accommodate tens of thousands of refugees fleeing the chaos of the Arab Spring. At last count some 40,000 Tunisians and Libyans had reached the Italian island of Lampedusa just 70 miles off the African coast. Silvio Berlusconi threw up his hands and freely distributed “temporary” residence permits to all comers, opening the door to the rest of Europe. The French-speaking Tunisians have made a beeline for France, where many have friends or family. When Nicolas Sarkozy asked Brussels to put the Schengen open borders rules on hold so France could stanch the flow, the Eurocracy reacted with the usual fudge: “temporary” border controls could be set up, it agreed with a wink, undermining one of its own favorite measures. EUROFUDGE is melting under the heat of a threatened euro, failing immigration policy, and rising populist parties. You can, after all, fudge some of the facts some of the time, but not all of the facts all the time. Poland, the biggest and most important in geopolitical terms of the EU’s new Eastern European members, senses this. Rather than rushing to join the eurozone as expected, it is warily demanding better fiscal rules and crisis management before giving up its zloty and groszy for the dubious charms of the single currency. The question is whether this is only a temporary crisis or whether the crumbling foundations of “Europe” signal the beginning of the end of the European Dream. Even the Eurocracy itself is beginning to have its doubts. A recent survey of European Commission staff in Brussels revealed that 43 percent thought European integration had “evolved negatively” over the past 10 years, while a convincing 63 percent said “the European model has entered into a lasting crisis.” What is certain is that, with Nicolas Sarkozy and Angela Merkel more interested in their own political problems and upcoming elections, no major European leader today is energetically promoting integration the way French and German heads of state did from the 1960s to the 1990s. As the Financial Times suggests, “We may be witnessing a generational change in European political dynamics. Traditional left-right divisions have narrowed.… It may spell a new, unprecedented challenge to the European project.” Right now “Europe” is bobbing and weaving and playing for time. José Manuel Barroso, a president with no real power over anything, implores EU heads of state to resist what he calls the “populist temptation” created by rising regionalism, nationalism, and anti-globalism. But, while suffering what looks like the slow-motion collapse of the European Union in its present form, the real challenge to Eurocrats may be to salvage the things they do best. Like saving hamsters.
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The Slow Melting of Eurofudge
