Sunday, July 7, 2013

Home of the Brave, Party of the Few

Senatorial districts are called “states.” They cannot be redistricted or Gerrymandered. And in any state, even the red ones, there is generally vastly more diversity among constituents than in a Gerrymandered House district designed so that only a Republican can win. As I have noted before, Gerrymandered GOP House districts pretty much eliminate any remote possibility that a Democrat could win that seat… the local Dems are too small a minority ever successfully to mount that challenge and win.
So Republicans only have the primaries to fear, and these days, the extreme right is smacking down any candidate willing to compromise their very right-wing values by withdrawn support for the incumbent and over-funding the rightist challenger. Thus, the U.S. House of Representatives is populated by representatives who are not allowed to compromise with their Democratic counterparts to get legislation passed.
The ability of a local GOP House candidate to survive a local election too frequently depends on steadfastness and stubborn defiance. That’s why the Senate can still get legislation done, and the House is merely a road block. But what may be a local down-home issue that keeps a right-wing GOP candidate in office is also precisely the kind of extreme voting record – away from that vast ocean of middle-of-the-road Americans who actually elect the President of the United States – that keeps senior GOP policy-makers awake at night, knowing that such extreme view make a GOP presidential candidate an increasingly unlikely national mandate.
If the GOP is seen as catering only to incumbent white elites, as the nation veers into becoming a “majority based on minorities,” the Republican Party is marginalizing itself out of a national presence. Hence the focus on the immigration bill, which passed the Senate, is becoming a litmus test for long-term GOP survivability at a national level.
For the well-heeled campaign-contributors, whose real goal is eliminating regulation and lowering taxes (and much less social issues), the lack of the potential of a Republican president is a genuine threat to their ability to find a voice, even with the massive campaign contributions they are permitted under the Citizens United case. They also know that with growth among Caucasians hitting negative numbers, having more legal consumers with dollars to spend is, as the Congressional budget report notes, a big potential boost to the economy.
Even as the GOP-right is labeling conservative Florida Republican Senator Marco Rubio as a turncoat for championing immigration reform, fighting to counter his success in the Senate with defeat in the House, influential powerhouse GOP contributors are using their vast pools of cash to counter what they see as local extremists who are destroying the Party’s ability to win a national election.
Their well-financed media message is clear: “Fox News viewers in Florida will see a new commercial in the coming weeks urging them to call Senator Marco Rubio. ‘Thank him for keeping his promise, and fighting to secure the border,’ a narrator says in the ad, which is paid for by the conservative American Action Network.
“Another group, Americans for a Conservative Direction, led by former Gov. Haley Barbour of Mississippi and other top Republicans, has been running ads in Iowa lately that implore those watching to ‘stand with Marco Rubio to end de facto amnesty.’
And when the Americans for Prosperity Foundation, the Koch brothers’ political advocacy group, decided to move its signature annual conference outside Washington [D.C.] for the first time, it picked a spot right in Mr. Rubio’s political backyard: Orlando. The keynote speaker? Mr. Rubio…
Weighing heavily on conservative leaders is a reminder of how immigration policy bedeviled Mitt Romney last year. His ‘self-deport’ comments about what should happen with the 11 million immigrants living illegally in the United States became an easy punch line for Democrats and helped drive Latinos even farther away from the Republican Party… And many see the success of an immigration reform package shaped with considerable input from Republicans like Mr. Rubio as key to their future, and his.” New York Times, July 1st.
But unless there is a groundswell of local support for immigration reform in heavily right-wing Gerrymandered districts, local GOP candidates might be committing political suicide by voting in line with Marco Rubio’s (and his influential supporters’) supplication to pass the new bill. Even if some version of immigration reform can be passed, this complete willingness to alienate the bulk of the middle-of-the-road voters to preserve right wing purism will remain an Achilles heel for GOP national ambitions. Expect to see Democrats focus on this clear and extreme set of views that are rather out of step with what most Americans view as the path for their country.
I’m Peter Dekom, hoping that healthy debate and the ability for both sides of the aisle in the House to implement compromise will return to our excessively Gerrymandered world.

Saturday, July 6, 2013

By Their Own Rules, Rights & Privileges

Fārūq al-Awwal  - a/k/a King Farouq I – was the last non-military ruler of Egypt until the election of Mohammad Morsi about a year ago. Farouq (1936-1952) was deposed by a military coup that installed Gamal Abdel Nasser as the new president. Anwar Sadat and Hosni Mubarek, both selected by and from the military, succeeded Nasser. When the Arab Spring toppled Mubarek in 2011, Mohamed Hussein Tantawi, chairman of the Supreme Council of the Armed Forces stepped into the void until free elections on June 24, 2012 placed the first non-military Egyptian leader in six decades, Mohammad Morsi, at the helm.
With little in the way of functional leadership experience and ties to Islamists seeking to install greater religiosity in what had been a secular nation for a very long time, President Morsi grappled with moving his nation’s nascent constitution more in the direction of his Muslim Brotherhood roots while still walking a relatively neutral line in dealing with the outside world, Palestinian autonomy and US relations (Egypt is America’s fourth largest recipient of foreign aid, most of which supports the military: a total of approximately $1.5 billion a year).
However, Morsi’s appointments and ministerial functionaries were simply unable to get Egypt on a path that was remotely close to the operational viability that existed during the Mubarek regime. Egypt began to unravel for most citizens. Unemployment skyrocketed, infrastructure crumbled without repair, social services vaporized, schools were closed early, and the economy seemed to be in rudderless free-fall. Day-to-day life in Egypt moved from difficult to miserable.
Still, the military watched. With an estimated 450,000 troops, Egypt’s army is the largest in the Middle East. While ordinary soldiers and junior officers live pretty low on the economic spectrum, its senior officers have their own economic super-benefits, privileges and power, secure in the knowledge that anyone purportedly running Egypt is ultimately serving only as long as the powerful military will allow such rule. “For decades, however, its tens of thousands of elite officers have jealously guarded their privileged station. They live as a class apart, with their own social clubs, hotels, hospitals, parks and other benefits financed by the state [and U.S. foreign aid].
Many have also grown wealthy through government contracts and business deals facilitated by their positions. It is, in some respects, a hereditary Brahmin caste, in which sons follow their fathers’ careers and they all live inside a closed social circle… ‘It is a tightly knit group,’ said Robert Springborg, a professor at the Naval Postgraduate School in Monterey, Calif., and an expert on the Egyptian military. ‘They tend to think alike and they are a force to be reckoned with because, besides the Brotherhood, they are the only really cohesive institution in the country.’” New York Times, July 3rd.
The military really didn’t care who was in power as long as their special status remained intact. As civil unrest escalated, protesting against conditions that the Morsi government seemed incapable of correcting, the army began to make plans. Violence in the streets exploded. This level of instability was bad for business and hurtful to the benefits and privileges of the military elite. The Muslim Brotherhood thought they had a deal with the military… until the army felt too much irreparable damage had been done to the nation.
The military pressured Morsi to step down, and he refused. “With tanks and soldiers in the streets and around the presidential palace, the military’s top officer, Gen. Abdul-Fattah el-Sisi, did not even utter Mr. Morsi’s name as he announced that the president had been deposed and the Constitution suspended.” Morsi was taken into custody, and the relatively low-profile head of the Supreme Court (Adli Mansour) was installed as an interim caretaker until new elections could be held.
As the military moves to clamp down on members of the Muslim Brotherhood as well as members of the press who are interviewing those the army wishes to displace, regional reaction is hardly uniformly supportive: “Turkey, which had formed an emerging alliance with Egypt's ousted Islamist leader Muhammed Morsi, on [July 4th] slammed the democratically elected leader's overthrow by the military as ‘unacceptable’ and called for his release from house arrest… Turkish Prime Minister Recep Tayyip Erdogan's Islamic-rooted government [which recently faced its own wave of secular protests] has been watching developments in Egypt with concern as the armed forces ousted Morsi, an Islamist and Egypt's first democratically elected president.” Huffington Post, July 4th. Pro and anti-Morsi protestors continue to clash, the military is actively involved in the violence, and the death toll is rising.
For the United States, this change has also placed our policy-makers in a very difficult position. Having championed the Arab Spring and the free elections that brought Morsi into office, the United States bent over backwards to support this new regime. The U.S. wanted to show the world that it could work well even with a regime that was backed primarily by a pretty radical Islamist party. The opposition saw such American efforts as cozying up to Morsi and keeping him in the saddle way beyond what was useful or prudent.
Our Cairo ambassador isn’t cushy political appointee. 63-year-old Anne W. Patterson (pictured above), an Arkansas native, is a distinguished career Foreign Service officer who has served as our envoy to Egypt since 2011. But now, many Egyptians are blaming the United States for trying to interfere in their country at too many levels. Patterson has now become the rather clear and personal target of a very large number of protestors. “Her image has been plastered on banners in Tahrir Square, crossed out with a blood-red X or distorted and smeared with insults. She is too cozy with Egypt’s deposed president and the Muslim Brotherhood, the signs say, and should leave the country…
As her bosses in Washington struggle to exert even modest influence over the events in Cairo, Ms. Patterson, 63, has been portrayed as a sinister force by pro- and antigovernment protesters alike: a defender of the status quo as well as a troublemaker who schemes with the opposition. …‘She’s being lambasted because she’s the face of America,’ said Vali Nasr, a former State Department official who worked with Ms. Patterson when she was ambassador to Pakistan. ‘But the fact that she’s being excoriated instead of the president only represents the fact that the rest of the American administration is absent.’
“In his first reaction to Mr. Morsi’s ouster, Mr. Obama warned of the dangers of violence and tried to steer Egypt’s military toward a prompt resumption of democratic rule. But the flurry of White House meetings and phone calls on Wednesday served to underscore the lack of leverage the United States has over Egypt, once a crucial strategic ally in the Middle East but lately just another headache.” NY Times.
When a military coup is staged, the general mandate is for the U.S. government to cut off military aid to that nation instantly… with a few potential exceptions. And you can pretty much bet that the Obama administration will find a way to keep funding the only real power in Egypt that has mattered in six decades!
I’m Peter Dekom, and when taking a walk in a minefield, one must expect explosions and losses.

Friday, July 5, 2013

On a Wing and a Prayer

Edward, Edward, where will you fly? If you look at the regularly scheduled flights between Moscow and either Caracas, Venezuela or Havana, Cuba, Eddie’s got a problem. The regular Aeroflot route to Havana slides a bit over Florida, and you know the United States ain’t letting NSA spill-meister Edward Snowden escape directly over U.S. airspace. The regularly scheduled flights to Caracas require a stopover somewhere in Europe. And dem big European nations are quite prepared to adhere to U.S. requests to bring Snowden back to America where he faces a litany of charges that could keep him in prison for the rest of his life.
When unmentioned U.S. “authoritative sources” passed the word that Bolivian President, Evo Morales, had smuggled Snowden aboard his private jet as he was leaving a Moscow summit on July 2nd, sequentially, one European country after another (France, Italy, Portugal and Spain) denied allowing Morales flight passage over their airspace. Morales’ plane was rerouted amid and, being low on fuel, was forced to land in Vienna, Austria, where Morales gave authorities permission to search the plane.  Folks had become suspicious after Morales indicated that Bolivia would seriously consider Snowden’s request for asylum. Morales was really, really pissed!
Spanish Foreign Minister Jose Manuel Garcia-Margallo defended his nation’s actions, despite Bolivian Foreign Minister David Choquehuanca’s written assurances that Snowden was not on the plane: “Spain does not have to make any apology… The airspace was never closed.” Left wing leaders all over Latin America joined Morales in his general condemnation of American bullying, and he told the BBC, “My hand would not shake to close the US embassy… We have dignity, sovereignty. Without the United States, we are better politically and democratically.”
Because Russian President Vladimir Putin has taken the position that since Snowden has not cleared airport immigrations and customs, he has not formally entered Russia, Snowden is reliving Tom Hanks role in Terminal. But Russia is running out of patience. Eddie has asked 21 nations for asylum, but on Venezuelan Independence Day (July 5th), President Nicholas Maduro made the following offer: “As head of state and government of the Bolivarian Republic of Venezuela I have decided to offer humanitarian asylum to the young US citizen Edward Snowden so he can come to the fatherland of Bolivar and Chavez to live away from the imperial North American persecution.” Woo hoo! Caribbean beaches and hot Latina babes! WikiLeaks founder Julian Assange told Eddie to focus on Latin America! And let’s face facts: Venezuela definitely does not like the United States!
So Eddie, assuming you are going to accept Maduro’s offer (or at least follow Assange’s advice and settle somewhere in Latin America), exactly how are you going to get there? There was a private jet at Hong Kong airport reach to whisk Snowden to Iceland if that is where he elected to go, but the flight from Moscow to anywhere in Latin America, even the northern edges, will need a larger plane with enough range to skirt any European airspace… if that is even possible. But U.S. authorities really want Mr. Snowden… and perhaps someday… maybe not too far into the future… Osama bin Laden he is not.
I’m Peter Dekom, and Eddie’s life is going to be very, very difficult for a very, very long time.

Thursday, July 4, 2013

Death by Life

It can’t come as a big surprise that the world is a dangerous and violent place. Wars, civil and against external enemies, rage everywhere, particularly in the Middle East, Central and South Asia. But according to Switzerland’s Graduate Institute, violent death is generated much more by factors other than war and other conflicts… 90% to be more precise.
The Graduate Institute’s annual survey [sponsored by the Swiss foreign ministry] found an average of 526,000 people a year died violently between 2004 and 2009, and that 90 percent of the armed violence did not involve international conflicts or civil wars…The survey also found that between 42 percent and 60 percent of lethal violence occurs with a firearm, and that civilians hold about three-quarters of the approximately 875 million weapons worldwide.” Huffington Post, July 2nd.
Many factors influence the choice of weapons. For example, there is a very strong correlation, according to the above survey, between the cost of ammunition and resulting casualties: “A strong correlation between the rise and fall of ammunition prices in Lebanon and the popularity of certain rifle models used by Syrian rebel fighters. For example, Belgian-made FN FAL rifles became ‘useless’ to Syrian fighters when the price of cartridges reached $3. But the most commonly available military rifles, including the Russian-made AK 47s and American-made M16s in Lebanon and Pakistan, command higher prices when ammunition prices tend to be low… The Institute's senior researcher Glenn McDonald said ammunition prices reflect the course of armed conflicts like the one in Syria, and added that the survey overlapped with the first year and a half of the conflict there.” Huffington Post.
For women, the statistics are particularly chilling: “Between 40 percent and 70 percent of female murder victims are killed by an intimate partner, often with a gun. Around 66,000 women are killed violently each year around the world – equivalent to 17 percent of all intentional homicides – usually by a current or former partner.” Huffington Post.
With one gun per 94.3 residents (Wikipedia), the United States is far and away home to the world’s highest per capita private gun ownership in the world. Violence-plagued Yemen is pegged at one gun per 54.8 residents and sits in a distant second place. While gun deaths are falling in the United States, according to a 2012 report issued by the United Nations Office on Drugs and Crime, 2/3s of all U.S. homicides are by firearm, around 5 per 100,000 residents according to the Guardian UK (slightly lower according to the U.N.).
While murder/homicide rates in third world countries, particularly in areas of insurrection and general instability, are much worse, when compared to the rest of the developed world, America’s murder/homicide-by-firearm rates lead the pack, way ahead of the rest of this global segment: “Even Italy, the G-8 member with the second highest rate of homicides by firearm, comes in far behind the United States. According to United Nations data, a person is 4.5 times more likely to die from gun violence in the United States than Italy… In France and the United Kingdom, the homicide by firearm rate is 0.1 per 100,000 people. That’s one in a million.” ABCNews.com, December 18, 2012.
We have rates that aren’t that far from countries with severe incumbent terrorist cells, but try and get some rationality into our notion of gun ownership, and the exceptionally powerful extremist NRA – which continues to ignore the “well-regulated” words in our Second Amendment (above) – will move heaven and earth (and more than a small degree of campaign contributions) to crush such efforts. We pay for that legal failing, the hubris behind the NRA message, with our flesh and blood.
The big experiment, where a nation with a tradition of gun ownership (Australia) banned such private weapons after a massacre, should be a model for any nation seeking a change: “But one of Howard’s other lasting legacies is Australia’s gun control regime, first passed in 1996 in response to a massacre in Tasmania that left 35 dead. The law banned semiautomatic and automatic rifles and shotguns. It also instituted a mandatory buy-back program for newly banned weapons…
“So what have the Australian laws actually done for homicide and suicide rates? Howard cites a study … by Andrew Leigh of Australian National University and Christine Neill of Wilfrid Laurier University finding that the firearm homicide rate fell by 59 percent, and the firearm suicide rate fell by 65 percent, in the decade after the law was introduced, without a parallel increase in non-firearm homicides and suicides. That provides strong circumstantial evidence for the law’s effectiveness.” Washington Post, August 2, 2012.
Sure, there are riots and a military coup that usurped the Morsi regime in Egypt, Taliban executions in Pakistan, suicide bombing in Baghdad and unmitigated chaos in Syria… but looking at ourselves, including our massive manufacture, consumption and export (particularly illegal export to places like Mexico) of small arms intended for civilians, we are a very big part of the problem and not remotely a part of the solution.
            I’m Peter Dekom, and I do remember the Biblical admonition that reminds us that we reap what we sow.

Wednesday, July 3, 2013

Man Overboard!

Once upon a time, all men of working age… worked. We called that time the 1950s. “The ‘participation rate’ for men ages 25 to 54 stood at 97.7% in early 1956, but drifted downward to a post-war record low of 88.4% at the end of 2012. (It ticked up very slightly at the start of this year to 88.6%.)” CNN.com, June 19th. The recession was devastating – pushing the number below 90% for the first time since measurements began – but the trend lines had already begun pushing the percentage of men in the workforce downwards long before that debacle.
So where have all the men workers gone? … Some went into prison. Others are on disability. And still others can’t find jobs and have simply given up looking…  The trend is particularly pronounced among the less educated. As the job market shifted away from blue-collar positions that required only a high-school degree to more skilled labor, many men were left behind, labor analysts say. It's harder these days to find well-paying jobs in manufacturing, production and other fields traditionally dominated by men without college diplomas.
“But college men are leaving, too. The participation rate of those older than 25 and holding at least bachelor's degree fell to 80.2% in May, down from 87.2% in May 1992…  ‘The proportion of guys doing nothing has risen,’ said Gary Burtless, a senior fellow at the Brookings Institution.” CNN.com. Too many men with advanced degrees actually prefer to remain idle rather than accept the lower-level jobs that are available. And once a worker goes on disability, very, very few ever return to the workforce.
Prison was a minor statistic for those born immediately after WWII: 1.9% of those white males and 9% of those black males had been incarcerated by 2004. Contrast that with those born three decades later: the numbers rose to 3.3% and 20.7% respectively. And in a recession, those with prison records don’t get back into even slightly good jobs.
The ups and downs of recessionary and boom times has wiggled the numbers a bit, but the overall trend has been a steady decline. Buying power for average Americans who do work has also steadily declined, year-by-year, since 2002.
What’s the message here? What do these numbers really tell us? Folks just don’t have the same expectations that past generations have had. Global competition has moved manufacturing jobs overseas in droves… but in a stunning twist of fate, the fiber optic trunk that wraps around this planet has also enabled outsourced legal research, accounting and reporting functions, medical transcription and analysis, payroll, writing computer codes, and creating CGI special effects and animation for American major studios.
Old world values of hard work with hope for advancement have been replaced by hard work solely to increase efficiency with a whole lot fewer opportunities to move up in a downsized corporate world… particularly if you are a “subcontractor” with very limited benefits…  not even an employee entitled to be promoted. Further, more women are enrolling in college these days than men. More competition for fewer jobs puts a downward pressure on wages.
CNN posits an even more devastating prediction: “The decline of men in the labor force has broad implications for families, taxpayers and the economy. Fewer employed men means more people on the dole and fewer taxpayers to contribute to the nation's economic growth…  Also, fewer of these men are in stable family relationships, contributing to growth of single-parent households. That fuels the widening income inequality gap and stunts the upward economic mobility of the next generation.” From struggling single parent households to two-couples-working-to-make-what-a-single-breadwinner-used-to-make families, expectations for a solid economic future seem to be vaporizing from our notion of an American dream.
What’s the answer? Create incentives for children to stay in school (make school relevant and interesting), pick up the tuition tab for those pursuing engineering, science, medicine and math, fund research to create technologies for the jobs of the future. The alternative? Well, just begin reading this blog from the top again.
I’m Peter Dekom, and we really do need the will to do what is obviously necessary to right this ship and steam forward!

Tuesday, July 2, 2013

Activision

It’s not a video game! It’s the new U.S. legislature with the voice of a very few! Five right wing judges who have adopted a legislative role as super-judicial activists. They are having a thrilling time ignoring constitutionally-supported statutes and even their own precedents. They are going out of their way to create new laws allowing corporations and unions virtually unlimited rights to finance political campaigns as long as such financings are not controlled by the actual candidates themselves (Citizens United). Wink, wink! They just sent the heart of a law back to Congress because it needs updating (Shelby County vs Holder), a power that the Supreme Court has never had before. They say that Congress was still relying on information generated four decades ago… even though Congress, in its legislative capacity, had four chances to review the underlying research… four amendments later… including the last amendment/extension under the Bush administration in 2006. Hmmmm… that would be… let’s see… er… seven years ago?
Passed in 1965, the Voting Rights Act targeted states with a long history of both low voter registration and erecting barriers that effectively discriminated against certain classes of minorities. “Echoing the language of the 15th Amendment, the Act prohibits states from imposing any ‘voting qualification or prerequisite to voting, or standard, practice, or procedure ... to deny or abridge the right of any citizen of the United States to vote on account of race or color.’” Wikipedia. Maybe the majority justices know if they send something back to our do-nothing, deadlocked Congress for new findings, they have effectively reversed and repealed that law.
Guess they didn’t like the law and really had no justifiable basis for overturning the operative provisions that Congress has been reviewing with rather consistent frequency over the years. Swing note Anthony Kennedy made the difference in this narrow 5-4 decision. The only African American on the panel, Clarence Thomas, wrote a separate opinion which would invalidate the entire Voting Rights statute. To illustrate the volatility of the Roberts court, the next day, Associate Justice Kennedy moved to the other side and cast the vote (and wrote the majority opinion in Windsor vs. United States) that invalidated the sections of the 1996 Defense of Marriage Act that stopped the federal government from recognizing same sex marriages. The court (in Perry vs. Hollingsworth), citing procedural reasons, also refused to overturn a lower court invalidation of a California ballot initiative – the infamous Proposition 8 – that banned such same sex unions.
Specifically on the Voting Rights Act, the court struck down section 4 of the act, the provision that defines the states to which the provision of the act applies, and while they didn’t overturn the operative section 5 of the act, without section 4 to designate the criteria and the states, section 5 is now meaningless. Literally hours after SCOTUS released its decision, Texas reinstated its voter photo ID law.
So why was that law necessary? “The 15th Amendment, ratified on February 3, 1870, provided that, ‘The right of U.S. citizens to vote shall not be denied or abridged by the United States or by any State on account of race, color, or previous condition of servitude.’ Additionally under the Amendment, the Congress was given the authority to enforce those rights and regulate the voting process…
“Soon after the end of Reconstruction, starting in the 1870s, Southern Democratic legislators found other means to deny the vote to blacks, through violence, intimidation, and Jim Crow laws. From 1890 to 1908, 10 Southern states wrote new constitutions with provisions that included literacy tests, poll taxes, and grandfather clauses that permitted otherwise disqualified voters whose grandfathers voted (thus allowing some white illiterates to vote), some with the aim and effect of re-imposing racially motivated restrictions on the voting process that disenfranchised blacks. State provisions applied to all voters and were upheld by the Supreme Court in early litigation, from 1875 (United States v. Cruikshank) through 1904…
“During the early 20th century, the Supreme Court began to find such provisions unconstitutional in litigation of cases brought by African Americans and poor whites. States reacted rapidly in devising new legislation to continue disfranchisement of most blacks and many poor whites. Although there were numerous court cases brought to the Supreme Court, through the 1960s, Southern states effectively disfranchised most blacks.” Wikipedia. So racism is dead, and voting laws aimed at limiting minority access to the vote aren’t needed anymore. The case was brought in Texas to fight a voter ID law that particularly burdened lower-income minorities. But let’s say that racism is dead (Not!)… why does this court have the right to implement that assumption?
Bottom line: this was a fully constitutional statute, passed or extended with Democratic and Republican support, even Presidential signature from both parties. But this court didn’t like that law, and made a decision that is such a departure from Supreme Court protocol and precedent that it seriously jeopardizes the credibility of this court in just about any decision it might make. Whether you like the law or not, the proper venue for reversal - given the court’s own reasoning - is Congress… not the court!
I’m Peter Dekom, and this is a profoundly dangerous precedent.

Monday, July 1, 2013

Living in Euro Hell

Our job market is still pretty bad, and as mortgage interest rates start to rise the housing growth we expected to resume is likely to stop or at least slow and our stock market has become a roller coaster, presenting even more volatility than even the trading junkies on Wall Street demand. Europe is still shuddering from a failure to beginning anything that looks like a recovery, consumer confidence in France has plunged to new lows, and Germany’s Angela Merkel isn’t offering much in the way of German concessions to ease the pain... she faces some tough voter sentiments in the upcoming elections.
Still, as a technical recession has resumed for much of the Eurozone, the cry from conservative EU politicians is that the pain of austerity is a continued necessity. But the debate on continuing this tough march of continued cutbacks, without much to show for it but further contracting economies, has placed new questions about the efficacy of this German-directed march to frugality.
On June 27th, unions shut down most of Portugal, a debtor nation with a rescue package from the European Union. “In their fourth general strike in two years, trade union leaders hailed the massive turnout of five million [roughly half the population], though no official figures were released… Workers are angry over new austerity measures being imposed… ‘I’m unemployed for the second time, businesses are closed, there are no places to work,’ exclaimed one protester… Trains, buses and the metro remained idle as the strike hit public transport the hardest. Support outside the public sector was scant – as one worker put it – if they don’t work, they won’t eat.”EuroNews.com, June 28th.
The tradeoff for a $102 billion bailout (given two years ago) is continued implementation of one of the most severe programs of governmental austerity imposed on any rescued nations. Yet Portugal’s leadership is committed to staying the course, even as the pain in that country is overwhelming.
Nevertheless, the outlook for Portugal is grim. The jobless rate, currently at a record 17.8 percent, is forecast to hit 18.5 percent next year. The bailout creditors predicting a contraction of 2.3 percent this year after the Portuguese economy shrank 3.2 percent in 2012. The budget deficit stood at 6.4 percent of annual GDP in 2012 – higher than the 5 percent target for that year though much lower than the 10.1 percent recorded in 2010.
“Already, the government has raised sales tax to 23 percent from 13 percent, while income tax hikes have costing many middle-class workers more than a month’s pay. A European Commission report published Wednesday forecast further declines in household income this year and next… Unions are also angered by the government's latest plans, which include increasing the working time of state employees to 40 hours a week from 35; increasing their monthly pension deductions while lowering their pension entitlements; and laying off some 50,000 government workers out of the total of about 583,000.
“The crunch won't stop there, however… The government, which has to find another 3.4 billion euros of savings in 2014, is due to present next month details of a deep and broad reform of how the state is run. The proposal is expected to order a further streamlining of state services and will likely fuel more protests.” Huffington Post, June 27th. The Portuguese constitutional court has rejected some of the austerity measures, and clearly they are anything but popular except with the most fiscally conservative players. So it is no small surprise that Portugal’s Finance Minister Vitor Gaspar quit on July 1st. Next Finance Minister: Maria Luis Albuquerque. That’s just Portugal! And then there’s Greece… and Spain… and Italy…
We all know that unsustainable government spending has to stop. But we also have to look at mistakes that other nations make in cutting back. In Europe, the issue is cutbacks when economies are still deeply in trouble. Suffering lower-end Europeans will have lost exceptional opportunities for longer term growth, just in terms of the timing of their sacrifice. Further, as some unions are learning, there really can’t be any clear sacred cows that cannot be spared the axe. In Europe, it is social programs and labor benefit mandates. In the United States, it’s the military. We need to look at the biggest expenses and ask exactly what we are getting for the money spent… and not cut programs that prepare our nation for a tough competitive world, programs that can generate the longer-term growth that can in fact reduce that deficit.
I’m Peter Dekom, and the clearest lesson from all of this is that there are no simple, slogan-driven solutions to complicated economic quandaries.