Some days there is so much going on that it is hard to decide what to write about. So, before getting to today’s subject, let me reference two articles that should be on your reading list.
From The Hill, is this story that has seemingly passed under the radar. “The Commerce Department is considering naming Arab Americans a socially and economically disadvantaged minority group that is eligible for special business assistance.” That’s what America needs another protected class of people. I have to wonder if, in twenty years, when whites will become a minority (unless there is a significant change to current demographic trends), if they too will be designated a protected class? Then we will all be assigned to our own tribe. Won’t that be great?
Robert Maginnis, writing for Human Events, has a thought provoking article on the escalating crisis in Syria. It’s a lose-lose situation for the United States and he makes a sound case that America’s strategy should be one of non-intervention.
On to today’s subject.
John Ellis has written an article for Real Clear Politics that has my blood boiling. Mr. Ellis starts out by referencing two articles. One article is by Ezra Klein, which concludes that “the outcome of the Eurozone crisis will tip the balance between President Obama’s re-election or defeat.” the second article is by Walter Russell Mead:
Walter Mead has a smart piece about the two simultaneous games of chicken being played out in the Eurozone as we speak. Game #1 is the mutual assured destruction stare-down between Germany (pay or die) and Greece (we die, everyone pays). Game #2 is the German-French face-off on the under-writing of Club Med (southern European) debt.
So far, so good. Klein and Mead are both correct. But, then Mr. Ellis shares his view of the European crisis.
The solution to the Eurozone crisis is, of course, a massive bailout. Everyone knows this. Part two of the solution is a series of gigantic loans to jump start growth across the Continent. There’s considerable argument about how this should be done (to say the least), but without economic growth the aging demographics of the Eurozone point to an almost endless economic stagnation – at best. Growth has to be on the agenda. (Bold added)
Oh, really? A massive bailout is “of course” the solution??? I’ll get back to this “of course” solution in a moment. In support of his contention, Mr. Ellis goes on to describe what he believes is a third game of chicken.
The question is: where does this bailout/loan money come from? The answer from all the Europeans (except the Germans, of course) is Germany. The answer from the Germans is: we know that eventually we will have to underwrite some of the bailout, but we will do it on our terms and we will not do it alone.
This is the third game of chicken that is being played out as we speak. German Chancellor Angela Merkel is facing off against President Obama in an advanced game of mutual assured destruction.
Basically, her message to the US president is this: “I will not lose a single vote if I force Greece out of the Eurozone. If the Grexit is messy and leads to contagion, which it almost certainly will, then the crisis will escalate to a much more menacing level. At that point, the US will have to demand that the IMF under-write a massive Eurozone bailout or we’re looking at 1930s Europe on steroids.”
“So, Barry, step up now if you hope to have any chance of re-election. We’ll help finance the bailout, but only if the IMF under-writes it. We can talk about percentage splits when you’re ready. But get ready and fast. Events may soon be in the saddle.”
“And one last thing: don’t send little Timmy Geithner over here to lecture us anymore, okay? Deals like this get done at the presidential level, Barry. So man up, get off the golf course and come to the table.”
Okay, a cute story. I will admit that it would not be out of character for Angela Merkel to play such a game of chicken with Obama. But, let’s get back to the “of course” solution of massive bailouts.
Even our sock puppet president is not ready to commit political suicide, in my opinion. and, agreeing to an IMF bailout of the EU would be political suicide. Furthermore, how would such a bailout work? The European sock puppets are not just going to divide it up between the Club Med basket cases. Their plan, to borrow a term from our Fearless Leader, would be for the EUC to make “investments” in projects of the Club Med that they believe will help grow their economies. But, Europe does not need more infrastructure. So, they would be picking and choosing winners and losers using crony
capitalism socialism. Sound familiar? My friends, it will not work any better in Europe than it did in the US.
i happen to agree with those that say growth must be part of the solution in Europe. The same is true here at home. But growth will not come from government spending and higher taxes. Why is it that no one is talking about promoting growth by coupling spending cuts with tax cuts? To answer that question, I will need to put on my tin-foil hat. The sock puppets of Europe and the US, for the most part, do what the puppet masters tell them to do. The puppet masters are very smart. They always have a plan and back-up plans. If you think the economic chaos that is infecting the world is a coincidence or if you think the chaos in the Middle-East is a coincidence, you may want to re-think your opinions. World-wide economic collapse and/or world-war are on the horizon. The puppet masters, or as some call them, the banksters, win either way. They have all of their chess pieces in position.
Well, that’s what I’m thinking. What are your thoughts?
22 thoughts on “Is The European Crisis A Game Of Chicken?”
I think you’re right and we are living in perilous times.
Ideed we are, Roxy.
My hunch is that we are already up to our eyeballs in giving them our stash via the IMF and our banks as well. I hear on cnbc that they are up to exotic investment strategies to make some bucks. One way or another we will end up with the bill.
Will we ever learn to stop digging and start filling the hole?
Jim, Talking about wanting growth is like talking about “peace” or about “motherhood”, of course everybody is for it. The problem is that different people mean different things about “growth”, specially they differ substantially on how to get it.
But there is one European nation that is getting it right – Germany – and better than the US of Obama. The Germans are saying that to get growth one must reduce deficits, cut tax rates, reduce regulation, and reform labor laws (meaning: relax labor firing and hiring).
They are right!
In the United States the interpretation of “growth” of the Democratic Party is that of all the European nations. The interpretation for the Republican Party is that of Germany.
PD. By the way, where are all those that excoriated me and America’s Chronicle for publishing articles espousing the absurdity of all those that thought that the Republican nomination was going to be other than Romney?
Did that really happen here? 🙂
Sorry, Jim, it is a rhetorical question not pertaining to this site directly but to the many bloggers to the right of most conservatives.
You are right, in spite of the site’s leanings towards Ron Paul, and not exempt of criticizing Romney, it was done with a lot of balance and absence of direct reference.
Don’t put much stock in what John Ellis says… he’s not an economist… he doesn’t understand of what he speaks… he is just parroting what Paul Krugman and Robert Reich say… hence the misuse of the phrases “of course” and “everyone knows this”.
The eurozone needs a pro-growth policy coupled with strong fiscal responsibility.
It is a fine line they tread and very difficult to navigate… It would not be as big a pickle if only they had been fiscally responsible in the first place.
“It would not be as big a pickle if only they had been fiscally responsible in the first place.”
You are right, AZ. But, geez, a blind man could have sen this coming!
Jim. I could never buy into the sock-puppet, conspiratorial thing.
In the case of the Euro bailout subject, I have not looked at the situation long enough to fully understand all the dynamics. My first impulse is to say, let the Greeks sink. Let the Portuguese sink. Let the Spanish sink. Screw the French and Germans.
However, whatever happens in Europe does not stay in Europe. Whatever route the Euro’s take will affect our economy, as everything here cascades into their economies as well.
If it were reasonable to bail out the bad players, I might be in favor of the Europeans doing just that. However, even bailouts offer no guarantee of the basic problems being corrected.
They have gotten themselves into a classic, “damned if you do, damned if you don’t” situation. Obama’s advice is all he knows. I think we will probably pay, one way or another.
Bob, I hope you are right about the sock puppets and I hope you are wrong about our paying, one way or the other. We are already broke.
Laundering our tax dollars through the IMF is the key to the grift. Too many Americans are too stupid to realize that the IMF money comes from their pockets
SF, I had not considered the direct monetary IMF pipeline to the ET’s (EuroTrashers). My comment of us having to pay was that Europe will be in a recession whatever course they take, and our economy will slow down as the result.
Yep! And I can believe Obama will go along with what Merkel wants. I think even the MSM would jump all over him.
Didn’t France actually try to cut spending and benefits, we saw how that worked out as there is now a socialist in charge.Until people get serious about this issue it will never be solved.I fear we are headed on the same path as Europe.
I’m nit sure France actuakky did much cutting. It was mostly talk by Sarkosy. Interestingly, Germany is the one that has practiced austerity and it has worked very well for them.
Lest we forget, much of the TARP money went directly to European interests (some $100 billion+ as I recall).
Naturally, when their policies are repeatedly shown to NOT work, the answer must be because ‘we didn’t go big enough.’ I mean, why settle for Europe when you can destroy the whole world.
But then, that heats things up enough to allow one in position of power to “mold the world closer to the heart’s desires.”
(hint: you might want to look that up if you do not recognize the phrase 😉 )
We are not doing a very good job of sving ourselves and we want to save the rest of the world? Not a good plan, is it?
Spending cuts? Why that’s insane talk! Anti-statist!!!!!
Yeah. How crazy is that?