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European Progressives Never Learn

Posted by Steve Markowitz on February 7, 2016

Thomas Piketty , a renowned economist from France who posted an op-ed in the New York Times titled “A New Deal for Europe”.  While Piketty’s topic is important, his conclusions are misplaced.  His logic shows just how unapologetic Progressives are for the problems their policies have inflicted on the world.

Piketty expresses concern for the growth of the far Right in Europe.  This Blog has been concerned for some time with the potential for fascism to once again rear its head in Europe.  This concern stems from Europe’s unsustainable economic path that has led to the large sections of its population being negatively impacted, creating a breeding ground for discontent.  This path started long before the meltdown of 2008 that Piketty refers to.  Its roots stem from the Left’s Progressive policies that have dominated European politics for decades.

Piketty blames mismanagement by European governments for not only poorly creating the EU, but also managing their economic policies.  While true, the EU’s creation was so poorly done that it guaranteed the current result, as economist Milton Friedman predicted in 1997:

The drive for the Euro has been motivated by politics not economics. The aim has been to link Germany and France so closely as to make a future European war impossible, and to set the stage for a federal United States of Europe. I believe that adoption of the Euro would have the opposite effect. It would exacerbate political tensions by converting divergent shocks that could have been readily accommodated by exchange rate changes into divisive political issues.”

Piketty concludes that Europe’s challenges can best be addressed by governments now doing the “right thing.”  Expecting the same group that created the current mess to do a better job this time is incredulous.

Piketty states: “Only a genuine social and democratic refounding of the eurozone, designed to encourage growth and employment, arrayed around a small core of countries willing to lead by example and develop their own new political institutions, will be sufficient to counter the hateful nationalistic impulses that now threaten all Europe.”  He also says: “The objective would be to reduce public debt as a whole, starting with a system of allocation of payments based on the increases in debt that have occurred since the crisis began.”

Nicely said, but politically and economically unrealistic.  Europe’s political, social and welfare programs make this kind of reform impossible.  Reducing government debt will cause pain to much of society.  Piketty ignores this, much like some of the BS we hear from Republicans in this country who believe that we can grow ourselves out of the excessive debt.

Piketty also concludes: “Such a process demands a new form of democratic governance, one that can assure that such disasters are not allowed to recur.”  Economic realities are disconnected from a “form of democratic governance”.  The laws of supply and demand will prevail in the long run, irrespective of interventions.  While Piketty acknowledges that governmental interventions caused the problems in the first place, he then suggests that further interventions in infrastructure, universities social welfare, etc. are the appropriate response now.  Again, why should we expect these next interventions to work better than the last ones?

Irrespective of one’s belief as to the appropriateness of governmental spending on any particular project; military, green energy, social programs, etc., from a macro economic standpoint the issue is straightforward.  Governments; i.e. the people, can only borrow so much from the future to pay for today’s lifestyles.  We have hit the economic wall with additional borrowing and deficit spending becoming a drag on growth, not simulative, as suggested under Keynesian economic theory.

Excess debt is the basis of our current macro-economic problems.  Central banks worldwide have likely come to this same conclusion, which is why some in Europe and Japan, and likely to come to the United States, are going to negative interest rates.  Given the ineffectiveness of historically low interest rates in the past eight years, central bankers understand that pushing the rates still lower will unlikely to lead to economic growth.  Irrespective of this they are taking this radical step in an attempt to debase fiat currencies, which will lead to a crisis that would enable governments to create a new currency (currencies) that will result in writing off the debt that is unrepayable.  While not a pretty solution, this method for sovereign debt abandonment does not require political will or approval.

The European Union as created will likely not survive.  It has only been held together this long because member countries fear the results of undoing the union.  The Europeans may continue to use Band-Aids to hold off the inevitable, but they do not have the political will or courage to take the steps necessary to make the EU viable. This will have serious consequences.  The blame rests solely on those Progressive politicians who created an entity based on desires, rather than economic and political realities.  Still they have the gall to suggest that the same approach going forward will work better this time.

Posted in economics, European Union | Tagged: , , , , , | Leave a Comment »

Former Atty. Gen. Eric Holder uses Race Card to Endorse Hillary

Posted by Steve Markowitz on February 2, 2016

Democratic politicians use the gender and race cards to further their political aspirations.  This has divided the Country into “warring” factions and significantly hindered America’s social progress and economic growth.

In a recent example of race-baiting, former US Atty. Gen., Eric Holder said the following in an advertisement for Hillary Clinton’s South Carolina presidential campaign (emphasis added):

If the Republicans win, we’ll all lose.  They want to roll back the clock on civil rights.  They want to make it harder for African-Americans to vote — not easier.  And they’ve got no plan to deal with gun violence or any of the issues we’re facing in our communities.”

Incredibly, this same Eric Holder refused to review the case of voter intimidation against the New Black Panther Party in 2009.  The same man, supposedly a champion of the underprivileged, played a key role in Pres. Bill Clinton’s pardon of wealthy financier Marc Rich.

As a chief law enforcement officer of the United States, Holder was cited for criminal contempt by the Congress for withholding documents relating to the fiasco called “Fast and Furious”.  This vote included 17 Democratic Congressman making it a bipartisan vote.

There are many dubious legacies left to the American people by Barack Obama.  Certainly a disastrous foreign policy will be in the forefront.  Not far behind will be a disintegration of race relations in America caused by the President and his party’s lust for power.  This legacy has a champion and it is Eric Holder.

Posted in Democrats, Racism | Tagged: , , , , , | Leave a Comment »

Billionaire Paul Allen’s Environmental Hypocrisy

Posted by Steve Markowitz on February 1, 2016

Allen YachtCo-founder of Microsoft, Paul Allen is one of the 20 richest Americas owning all sorts of assets including the Seattle Seahawks in Portland Trailblazers sports teams.

Allen is also a well-known environmentalist.  For example, as reported in thehill.com, in 2014 Allen sued the federal government claiming that the Bureau of Land Management (BLM) did not properly study the effects of greenhouse gases that were caused by the coal rights the government leased.  As reported by the Huffington Post, Allen said: “The leasing of coal from federal lands undermines President Obama’s climate policy goals.  We have no comprehensive understanding of the air pollution and climate impact of the federal coal-leasing program because the Bureau of Land Management has failed to analyze the available data for more than three decades.”

While Paul Allen speaks environmentally, he lives by different rules.  The billionaire owns a yacht that cost nearly $170 million.  That extravagant play toy consumes much fuel and blows out significant carbon is not in the best interest of the environment.  Couldn’t Mr. Allen live with a minimalist $25 million yacht that burned less fuel?

Adding insult to injury, Reuter’s reported that Mr. Allen’s yacht recently did significant damage to the coral reef located near the Cayman Islands.  Reuters reported that the yacht’s anchor damaged nearly 14,000 ft.² or nearly 80% of the coral reef in one diving area.

While Paul Allen travels around in a $170 million yacht, he would likely advocate for commoners to drive Chevy Volts.  More elitist hypocrisy.

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Federal Reserve is Getting Nervous

Posted by Steve Markowitz on January 27, 2016

President Barack Obama often touts his administration’s achievements relating to the economy. Often the President uses the decreasing unemployment figure and the strength of the equities’ markets as proof statements.  Both are red herrings.

The unemployment figures are ginned-up by the government to back a chosen narrative.  In recent years of this rate has been reduced mainly by Americans dropping out of the workforce and therefore not counted as unemployed.  In addition, Americans have been forced to take less than full-time work.

As stock prices have shown in recent weeks, what goes up will come down.  The Dow Jones Industrial Average is down this year by 1,800 points or approximately 10%.  This significant drop has occurred even though the Federal Reserve has maintained historically low interest rates for nearly 8 years.

The Federal Reserve today released a statement indicating that it too was concerned with the direction of the economy.  In a statement released today, the Fed said: “The [Fed] is closely monitoring global economic and financial developments and is assessing their implications for the labor market and inflation, and for the balance of risks to the outlook.”  This typical Fed gibberish that in simple English means the economy is shaky.

The Federal Reserve’s near zero interest rate policies created an economy that is out of balance.  Cheap interest rates have not fueled real economic growth, but instead created financial bubbles, as exemplified by equity valuations.  This has placed the Fed in a quandary.  If the economy weakens, the Federal Reserve will either have to allow the forces of supply and demand to correct the imbalances; i.e. a significant recession, or use even more radical easy money policies to keep the party going.  Realistically, the only ammo left in the Fed’s arsenal is negative interest rates.  The implications of banks requiring payments from depositors for savings deposits are hard to imagine.

Posted in Federal Reserve | Tagged: , , , , , | Leave a Comment »

Thomas Sowell Blasts “Conservative” Trump Supporters.

Posted by Steve Markowitz on January 26, 2016

sowellRenowned economist, Dr. Thomas Sowell, is a brilliant economist and social scientist.  Besides having impeccable academic credentials, Sowell’s conservative credentials are unblemished, at least in the way it was defined in more sane times.

Earlier this week Dr. Sowell published an op-ed that was highly critical of front running Republican presidential candidate, Donald Trump.  In it Trump says (emphasis added):

“Those of us who like to believe that human beings are rational can sometimes have a hard time trying to explain what is going on in politics.  It is still a puzzle to me how millions of patriotic Americans could have voted in 2008 for a man who for 20 years — TWENTY YEARS — was a follower of a preacher who poured out his hatred for America in the most gross gutter terms.

Today’s big puzzle is how so many otherwise rational people have become enamored of Donald Trump, projecting onto him virtues and principles that he clearly does not have, and ignoring gross defects that are all too blatant.”

Sowell correctly concludes that Trump has a history that has a “history has demonstrated no principles at all, other than an ability to make self-serving deals,….”

By relating America’s response eight years ago to Barack Obama with its response today to Donald Trump, Dr. Sowell correctly points to the biggest deficits facing America today; the lack of conviction, moral compass and common decency.  These deficiencies have unfortunately affected the broad-spectrum of America, from Left to Right.

Posted in Politics, Thomas Sowell | Tagged: , , , | Leave a Comment »

Hillary Clinton Stands by a Sex Predator

Posted by Steve Markowitz on January 21, 2016

The dearth of accusations concerning predatory sexual behavior against former President Bill Clinton is damning.  The number of women that have come public with complaints, as well as his behavior with an intern at the White House, indicates the treatment of women that feminists should recoil from.  However, that has not been the case, which seems to indicate that the so-called feminists are more concerned with one’s political views than the treatment of women.

Hillary Clinton has not only been Bill Clinton’s wife during the period that many of these complaints were lodged, but has been his political partner as well.  While some might think it noble that she stood by her man, it is reasonable to ask if she has culpability in attempts to cover up the sexual harassment complaints against her husband.

Earlier this month on the Morning Joe show on MSNBC, cohosts Joe Scarborough and Mika Brzezinski interviewed Hillary Clinton backer, former congressman Harold Ford Jr.  Ford was asked about Hillary’s potential culpability in covering up her husband’s mistreatment of Women.   Ford refused substantive response, an example of disingenuous behavior by the Left when it comes to women’s rights.  The same behavior does not allow many on the Left to criticize Islam for its misogynistic practices.

Posted in Politics | Tagged: , , , , , , | Leave a Comment »

Sarah Palin Endorses Donald Trump

Posted by Steve Markowitz on January 21, 2016

PalinEarlier this week former Alaska Governor and vice presidential candidate Sarah Palin publicly announced her endorsement of billionaire Donald Trump as the Republican presidential candidate.

Donald Trump, in a most conservative interpretation, it is more akin to the liberal wing of the Republican Party exemplified in earlier times by Nelson Rockefeller, than he is to conservative Ronald Reagan.  His Progressive views have related to big government, the Clintons, abortion, and financial bailouts.  These positions are diametrically opposed to those espoused by Palin in her Tea Party days.  Her willingness to do an about-face and endorse Trump indicates that Palin waffles in the wind like so many Washington politician’s she has criticized.


Posted in Politics, Sarah Palin | Tagged: , , | Leave a Comment »

Byron MacGregor – The Americans

Posted by Steve Markowitz on January 20, 2016

Since World War II, Progressive Leftists have been successful in re-creating a narrative of American history that demonized America, focusing on racism and international relations.  Under this narrative, the total of the American experience revolved around racism and imperialistic aspirations.

Slavery is an ugly blight on America.  Rarely discussed, however, is how far this Country has traveled since that repulsive part of our first one hundred years.  Also not discussed is the fact that the corrective actions taken were not a result of foreign intervention.  Those corrections, which began with the Civil War, led to the deaths of hundreds of thousands of Americans.  Since, more insidious parts of racism have been and continue to be addressed by the greater society.

As for America’s supposedly imperialistic desires, this narrative is a canard.  While some American international actions have been less than noble, they are more than offset by the sacrifices this Country made to protect so other countries .  This included our forced interventions into European and Asian wars.

The Progressive revisionist history of America is also promoted by Barrack Obama.  But, he is not the first Leftist to promote this narrative.  In the 1960s and 1970s, America was under assault by the Left worldwide for its intervention in Vietnam.  In hindsight, this intervention was handled poorly.  At the same time, the geopolitical atmosphere that led to the intervention was European-based.  As the imperialistic empires of Europe disintegrated after World War II, there was a power vacuum created that was a fertile breeding ground for conflict between the two superpowers, the United States and Soviet Union.

There were those in the 1970s who correctly saw the attack on America and its history as a broader attack on personal freedom and basic good.  .One was Canadian Gordon Sinclair who wrote an editorial “Commentary About America” that not only promoted American exceptionalism, but chastised other countries for their lack of charity and spine.  This editorial ultimately became a best-selling single record narrated by Byron MacGregor with background music by the Detroit Symphony Orchestra.  The link below it is reminder from the past of American’s generosity and exceptionalism.

Posted in Constitution | Tagged: , , , , , | Leave a Comment »

Unintended Consequences of Dodd-Frank Act

Posted by Steve Markowitz on January 17, 2016


In reaction to the 2008 financial meltdown, the government came up with the Dodd-Frank Wall Street Reform and Consumer Protection Act.  Signed into law in 2010 by President Obama, its name implies consumer protection.  Reality does not match the implication.

The 2008 financial meltdown occurred because of bad behavior on the part of consumers, lenders and financial institutions.  This led to the possibility that major financial institutions would fail worldwide leading to governmental bailouts of mega banks and other corporations, justified by the claims that the institutions were too big to fail.  It is impossible to determine the accuracy of this claim.  However, the possibility of systemic economic failure in itself seemed to justify the interventions.

Successful capitalism demands that the imprudent borrowers, lenders, and shareholders should have suffered catastrophic losses as a result of their behavior that so badly damaged society.  Instead the bailouts saved those who most deserved punishment.  Worse this has led to increased likelihood of such imprudent behavior being repeated.  Instead of allowing this appropriate economic response, the government gave us the Dodd-Frank Act, which is not only ill-conceived, but too complex to fully comprehend, let alone its consequences.

If indeed the banks were too big to fail the government should have responded by breaking them up so that they could not cause systemic damage to the economy in the future.  Not only have the banks not been broken up, but Dodd- Frank resulted in banking consolidation with the large banks becoming even larger and more dangerous to greater society.  This increases the potential need for even larger bailouts in the future.

Some of the unintended consequences of Dodd Frank remain unknown.  Others, such as banking consolidation, are apparent.  Another consequence was announced earlier this month by insurance giant MetLife.  They will divest a large part of their US life-insurance business, which generates approximately a fifth of their total revenues.  Because this MetLife falls within the purview of Dodd-Frank, it was required to increase its capital base.  Instead of taking this step MetLife will make the announced divestiture with its spokesman saying: “aAn independent new company would be able to compete more effectively and generate stronger returns for shareholders…[and] this risk of increased capital requirements contributed to our decision to pursue the separation of the business.”

The fact that MetLife is making a divestiture of a major business unit is not in itself problematic.  However, making this decisions based on governmental regulations is an inefficient way to regulate economic activity.  This divestiture will allow both MetLife and the newly created life insurance company to skirt Dodd-Frank and will likely result in weaker companies providing life insurance to consumers increasing consumer risk.

In typical governmental action, Dodd-Frank attempts to corral horses that already left the barn.  Like Sarbanes-Oxley before it, Dodd-Frank will increase the cost of doing business, create more regulatory jobs, and be a boon for the accounting and legal industries.  Ultimately, consumers will suffer and the politicians and bureaucrats that gave us this mess with be retired on huge government pensions.

Posted in Governmental Intervention | Tagged: , , , , | Leave a Comment »

Deteriorating Race Relations an Obama Legacy

Posted by Steve Markowitz on January 13, 2016

Typically, a president’s last State-of-the-Union address is not focused on future legislative action, given the chief executive’s lame-duck status.  Instead, focus is on legacy building for the departing president.  Unfortunately for Barack Obama, it is hard to see a positive legacy given the myriad of chaos internationally, as well as an economy that is weakly limping along.

tavis_smileyObama’s legacy will also be damaged by the state of race relations within the United States during his tenure, an area that should have been a strength for this President.  Obama was elected with a mandate to bring hope and change to the country.  Here was the Country’s first African-American president who could bridge the gap between races.  Instead, the President used race to further his political agenda and the results of been catastrophic as race relations in the United States has significantly deteriorated s under Obama’s.  This has been exemplified in the various American cities where racial tensions have broiled over to rioting.  While the reasons and/or justifications for the rioting can be argued, the fact that these events have increased during Obama’s tenure is undeniable.

It is natural for those who are right-of -enter to be critical of a liberal president.  But, when this comes from individuals that are left-the-center, it is hard to argue that partisanship is the cause.  Such was the case this week with the comments made by PBS host Tavis Smiley during an interview with Megyn Kelly of Fox News that included the following exchange

Kelly – “On the subject of race, are we better off now than we were seven years ago?”

Smiley “I’m not sure we are, and I think ultimately the president missed a moment”. Who further went out the state: H “on every leading economic issue, on the major economic issues black Americans have lost ground in every one of those leading categories.  So for the last 10 years it hasn’t been good for black folk.”

This is the president’s most loyal constituency that didn’t gain any ground really in that period.  Now, the debate’s going to be for years to come whether he wasn’t bold enough, or whether he obstructed.

Smiley correctly concludes: “I think the answer’s both.  Historians are going to have a field day juxtaposing how in the era of the first black president, the bottom fell out for black America.  Black people are still in many ways politically marginalized, socially manipulated, and economically exploited.  That’s a lot to try to square how all that happened in the era of the first black president.”

Why, given this history of failure under Leftist policies to improve the well-being of minorities in America, do African-Americans continue to give nearly unanimous support to the Democratic Party?  It is time for reasonable people on the Left including Mr. Smiley, to bring this question to the forefront of political discourse in America.

Posted in President Obama, Racism | Tagged: , , , , , , | Leave a Comment »


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