back in Dublin
Had a great trip to Venice, seeing good friends, old neighbours, eating in fav eateries, working on the panto (Sleeping Beauty), riding the vaporetti…seeing the Giudecca Canal again…
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The Shifting Od…
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The Shifting Odds on the GOP Nomination & Obama’s Clichés I receive press releases from Paddy Power, “Ireland’s largest bookmaker and a leading provider of gaming services in the UK, Australia and Ireland.” Most of the releases reflect predictable shifts in odds, but today’s release indicates how suddenly and dramatically the Republican primary changed in South Carolina: “While Romney remains the favourite for the Republican nomination, his odds have taken a significant slide from 1/14 to 2/5, while Gingrich’s odds have been chopped from 6/1 before the South Carolina Primary to 2/1.” (The legality of betting on elections is a bit vague. Chicago-based Nadex filed a request with the Commodity Futures Trading Commission to list contracts on the victor of the 2012 presidential race and the majority parties in the House and Senate.) You can also bet on which cliché Obama will use first in Tuesday’s State of the Union Address:
“Don’t get me wrong”? Well, his critics would probably say he’s less of a doer than aPretender . . . |
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Beware of Greek Debt
Greek government debt crisis
 Greek debt crisis |
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Greece’s debt percentage between 1999 and 2010 compared to the average of the Eurozone.
From late 2009, fears of a sovereign debt crisis developed among investors concerning Greece’s ability to meet its debt obligations due to strong increase in government debt levels.[1][2] This led to a crisis of confidence, indicated by a widening of bond yield spreads and risk insurance on credit default swapscompared to other countries, most importantly Germany.[3][4]
Downgrading of Greek government debt to junk bond status created alarm in financial markets. On 2 May 2010, the Eurozone countries and the International Monetary Fund agreed on a €110 billion loan for Greece, conditional on the implementation of harsh austerity measures.
In October 2011, Eurozone leaders also agreed on a proposal to write off 50% of Greek debt owed to private creditors, increasing the EFSF to about €1 trillion and requiring European banks to achieve 9% capitalization to reduce the risk of contagion to other countries.
Contents[hide] |
[edit]Causes
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Combined charts of Greece’s GDP and Debt since 1970; also of Deficit since 2000. Absolute terms time series are in current euros.
The Greek economy was one of the fastest growing in the eurozone from 2000 to 2007; during that period, it grew at an annual rate of 4.2% as foreign capital flooded the country.[5] A strong economy and falling bond yields allowed the government of Greece to run large structural deficits.
According to an editorial published by the Greek right-wing newspaper Kathimerini, large public deficits are one of the features that have marked the Greek social model since the restoration of democracy in 1974. After the removal of the right-wing military junta, the government wanted to bring disenfranchised left-leaning portions of the population into the economic mainstream.[6] In order to do so, successive Greek governments have, among other things, customarily run large deficits to finance public sector jobs, pensions, and other social benefits.[7] Since 1993 the ratio of debt to GDP has remained above 100%.[8]
Initially currency devaluation helped finance the borrowing. After the introduction of the euro in Jan 2001, Greece was initially able to borrow due to the lower interest rates government bonds could command. The late-2000s financial crisis that began in 2007 had a particularly large effect on Greece. Two of the country’s largest industries are tourism and shipping, and both were badly affected by the downturn with revenues falling 15% in 2009.[8]
To keep within the monetary union guidelines, the government of Greece had misreported the country’s official economic statistics.[9][10] In the beginning of 2010, it was discovered that Greece had paid Goldman Sachs and other banks hundreds of millions of dollars in fees since 2001 for arranging transactions that hid the actual level of borrowing.[11] The purpose of these deals made by several successive Greek governments was to enable them to continue spending while hiding the actual deficit from the EU.[12]
In 2009, the government of George Papandreou revised its deficit from an estimated 6% (8% if a special tax for building irregularities were not to be applied) to 12.7%.[13] In May 2010, the Greek government deficit was estimated to be 13.6%[14] which is one of the highest in the world relative to GDP.[15] Greek government debt was estimated at €216 billion in January 2010.[16] Accumulated government debt was forecast, according to some estimates, to hit 120% of GDP in 2010.[17] The Greek government bond market relies on foreign investors, with some estimates suggesting that up to 70% of Greek government bonds are held externally.[18]
Estimated tax evasion costs the Greek government over $20 billion per year.[19] Despite the crisis, Greek government bond auctions were over-subscribed in early January 2010 (as of 26 January).[20] According to the Financial Times on 25 January 2010, “Investors placed about €20bn ($28bn, £17bn) in orders for the five-year, fixed-rate bond, four times more than the (Greek) government had reckoned on.” In March, again according to the Financial Times, “Athens sold €5bn (£4.5bn) in 10-year bonds and received orders for three times that amount.”[21]
| 1999 | 2000 | 20011 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 (estimates) | 2012 (forecasts) | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Public debt, billion €[22][23][24][25] | 122.3 | 141 | 151.9 | 159.2 | 168 | 183.2 | 195.4 | 224.2 | 239.3 | 263.1 | 299.5 | 329.4 | 354.7/356.5 | 371.9/384.9 |
| Public debt, % of GDP[22][23][25][24] | 94 | 103.4 | 103.7 | 101.7 | 97.4 | 98.6 | 100 | 106.1 | 107.4 | 113.0 | 129.3 | 144.9 | 161.8/162.8 | 172.7/181.4 |
| GDP growth, annual %[26][27][24][25] | 3.4 | 3.5 | 4.2 | 3.4 | 5.9 | 4.4 | 2.3 | 5.5 | 3.0 | −0.2 | −3.2 | −3.5/−5.5 | −2.8/−5.5 | 0.7/−2.5 |
| Budget deficit, % of GDP[28][23][25][24] | – | −3.7 | −4.5 | −4.8 | −5.6 | −7.5 | −5.2 | −5.7 | −6.5 | −9.8 | −15.8 | −10.6 | −8.5/−8.9 | −6.8/−7 |
1 Year of entry into the Eurozone.
[edit]Downgrading of debt
On 27 April 2010, the Greek debt rating was decreased to the upper levels of ‘junk‘[29] status by Standard & Poor’s amidst hints of default by the Greek government.[30] Yields on Greek government two-year bonds rose to 15.3% following the downgrading.[31] Some analysts continue to question Greece’s ability to refinance its debt. Standard & Poor’s estimates that in the event of default investors would fail to get 30–50% of their money back.[30] Stock markets worldwide declined in response to this announcement.[32]
Following downgradings by Fitch and Moody’s, as well as Standard & Poor’s,[33] Greek bond yields rose in 2010, both in absolute terms and relative to German government bonds.[34] Yields have risen, particularly in the wake of successive ratings downgrading. According to The Wall Street Journal, “with only a handful of bonds changing hands, the meaning of the bond move isn’t so clear.”[35]
On 3 May 2010, the European Central Bank (ECB) suspended its minimum threshold for Greek debt “until further notice”,[36] meaning the bonds will remain eligible as collateral even with junk status. The decision will guarantee Greek banks’ access to cheap central bank funding, and analysts said it should also help increase Greek bonds’ attractiveness to investors.[37] Following the introduction of these measures the yield on Greek 10-year bonds fell to 8.5%, 550 basis points above German yields, down from 800 basis points earlier.[38] As of 22 September 2011, Greek 10-year bonds were trading at an effective yield of 23.6%, more than double the amount of the year before.[39]
[edit]Danger of default
Interest rate of Greek two-year government bonds traded in the secondary marketreflecting the markets’ assessment of investment risk (source: Bloomberg).
Without a bailout agreement, there was a possibility that Greece would prefer to default on some of its debt. The premiums on Greek debt had risen to a level that reflected a high chance of a default or restructuring. Analysts gave a wide range of default probabilities, estimating a 25% to 90% chance of a default or restructuring.[40][41]
A default would most likely have taken the form of a restructuring where Greece would pay creditors, which include the up to €110 billion 2010 Greece bailout participants i.e. Eurozone governments and IMF, only a portion of what they were owed, perhaps 50 or 25 percent.[42] It has been claimed that this could destabilise the Euro Interbank Offered Rate, which is backed by government securities.[43]
Some experts have nonetheless argued that the best option at this stage for Greece is to engineer an “orderly default” on Greece’s public debt which would allow Athens to withdraw simultaneously from the eurozone and reintroduce a national currency, such as its historical drachma, at a debased rate[44](essentially, coining money). Economists who favor this approach to solve the Greek debt crisis typically argue that a delay in organising an orderly default would wind up hurting EU lenders and neighboring European countries even more.[45]
At the moment, because Greece is a member of the eurozone, it cannot unilaterally stimulate its economy with monetary policy. For example, the U.S. Federal Reserve expanded its balance sheet by over $1.3 trillion USD since the global financial crisis began, temporarily creating new money and injecting it into the system by purchasing outstanding debt, that money to be destroyed when the debt is paid back, later.[46]
[edit]International ramifications
Greece represents only 2.5% of the eurozone economy.[47] Despite its size, the danger is that a default by Greece will cause investors to lose faith in other eurozone countries. This concern is focused on Portugal and Ireland, both of whom have high debt and deficit issues.[48]Italy also has a high debt, but its budget position is better than the European average, and it is not considered among the countries most at risk.[49] Recent rumours raised by speculators about a Spanish bail-out were dismissed by Spanish Prime Minister José Luis Rodríguez Zapatero as “complete insanity” and “intolerable”.[50]
Spain has a comparatively low debt among advanced economies, at only 53% of GDP in 2010, more than 20 points less than Germany, France or the US, and more than 60 points less than Italy, Ireland or Greece,[51] and it does not face a risk of default.[52] Spain and Italy are far larger and more central economies than Greece; both countries have most of their debt controlled internally, and are in a better fiscal situation than Greece and Portugal, making a default unlikely unless the situation gets far more severe.[53]
[edit]Austerity packages
Greece adopted a number of austerity packages since 2010. According to research published on 5 May 2010 by Citibank, the fiscal tightening is “unexpectedly tough”. It will amount to a total of €30 billion (i.e. 12.5% of 2009 Greek GDP) and consist of 5% of GDP tightening in 2010 and a further 4% tightening in 2011.[54]
[edit]First austerity package
The first round came with the signing of the memorandums with the IMF and the ECB concerning a loan of 80 billion euro. The package was implemented on 9 February 2010 and included a freeze in the salaries of all government employees, a 10% cut in bonuses, as well as cuts in overtime workers, public employees and work-related travels.[55]
[edit]Second austerity package (Economy Protection Bill)
On 5 March 2010, amid new fears of bankruptcy, the Greek parliament passed the Economy Protection Bill, which was expected to save another €4.8 billion.[56] The measures include (in addition to the above):[57] 30% cuts in Christmas, Easter and leave of absence bonuses, a further 12% cut in public bonuses, a 7% cut in the salaries of public and private employees, a rise of VAT from 4.5% to 5%, from 9% to 10% and from 19% to 21%, a rise of tax on petrol to 15%, a rise in the (already existing) taxes on imported cars of up to 10%–30%, among others.
On 23 April 2010, after realizing the second austerity package failed to improve the country’s economic position, the Greek government requested that the EU/International Monetary Fund (IMF) bailout package be activated.[58] Greece needed money before 19 May, or it would face a debt roll over of $11.3bn.[59][60][61] The IMF had said it was “prepared to move expeditiously on this request”.[62]
Shortly after the European Commission, the IMF and ECB set up a tripartite committee (the Troika) to prepare an appropriate programme of economic policies underlying a massive loan. The Troika was led by Servaas Deroose, from the European Commission, and included also Poul Thomsen (IMF) and Klaus Masuch (ECB) as junior partners. In return the Greek government agreed to implement further measures.[63]
[edit]Third austerity package
On 1 May 2010, Prime Minister George Papandreou announced a new round of austerity measures, which have been described as “unprecedented”.[64] The proposed changes, which aim to save €38 billion through 2012, represent the biggest government overhaul in a generation.[65] The bill was submitted to Parliament on 4 May and approved on separate votes on 29 June and 30 June.[66][67] It was met with a nationwide general strike and massive protests the following day, with three people being killed, dozens injured, and 107 arrested.[65]
The measures include:[68][69][70]
- An 8% cut on public sector allowances (in addition to the two previous austerity packages) and a 3% pay cut for DEKO (public sector utilities) employees.
- Public sector limit of €1,000 introduced to bi-annual bonus, abolished entirely for those earning over €3,000 a month.
- Limit of €500 per month to 13th and 14th month salaries of public employees; abolished for employees receiving over €3,000 a month.
- Limit of €800 per month to 13th and 14th month pension installments; abolished for pensioners receiving over €2,500 a month.
- Return of a special tax on high pensions.[which?]
- Extraordinary taxes imposed on company profits.
- Rise in the value of property (and thus higher taxes).
- Rise of an additional 10% for all imported cars.
- Changes were planned to the laws governing lay-offs and overtime pay.[specify]
- Increases in value added tax to 23% (from 19%), 11% (from 9%) and 5.5% (from 4%).
- 10% rise in luxury taxes and sin taxes on alcohol, cigarettes, and fuel.
- Equalization of men’s and women’s pension age limits.
- General pension age has not changed, but a mechanism has been introduced to scale them to life expectancy changes.
- A financial stability fund has been created.[specify]
- Average retirement age for public sector workers will be increased from 61 to 65.[71]
- The number of public-owned companies shall be reduced from 6,000 to 2,000.[71]
- The number of municipalities shall shrink from 1,000 to 400.[71]
On 2 May 2010, a loan agreement was reached between Greece, the other eurozone countries, and the International Monetary Fund. The deal consisted of an immediate €45 billion in loans to be provided in 2010, with more funds available later. A total of €110 billion has been agreed.[72][73] The interest for the eurozone loans is 5%, considered to be a rather high level for any bailout loan. The European Monetary Union loans will be pari passu and not senior like those of the IMF. In fact the seniority of the IMF loans themselves has no legal basis but is respected nonetheless. The loans should cover Greece’s funding needs for the next three years (estimated at €30 billion for the rest of 2010 and €40 billion each for 2011 and 2012).[54] According to EU officials, France and Germany[74] demanded that their military dealings with Greece be a condition of their participation in the financial rescue.[75]
As of 12 May 2010 the deficit was down 40 percent from the previous year.[71]
[edit]Fourth austerity package (Mid-term plan)
2011 saw the introduction of further austerity. In the midst of public discontent, massive protests and a 24-hour-strike throughout Greece,[76][77] the parliament debated on whether or not to pass a new austerity bill, known in Greece as the “mesoprothesmo” (the mid-term [plan]).[78][79] The government’s intent to pass further austerity measures was met with discontent from within the government and parliamentas well,[79] but was eventually passed with 155 votes in favor[78][79] (a marginal 5-seat majority). Horst Reichenbach headed up the task force overseeing Greek implementation of austerity and structural adjustment.[80]
The new measures included:[81][82] raise 50 billion euros by denationalizing companies and selling national property, an increase in taxes for anyone with a yearly income of over 8,000 euro, extra tax for anyone with a yearly income of over 12,000 euro, an increase in VAT in the housing industry, an extra tax of 2% for combating unemployment, an increase in taxes for pensioners by means of lower pensions ranging from 6% to 14% from the previous 4% to 10%, the creation of a specialized government body with the sole responsibility of exploiting national property, and others.
On 11 August 2011 the government introduced more taxes, this time targeted at people owning immovable property.[83] The new tax, which is to be paid through the owner’s electricity bill,[83] will affect 7.5 million Public Power Corporation accounts[83] and ranges from 3 to 20 euro per square meter.[84] The tax will apply for 2011–2012 and is expected to raise 4 billion Euro in revenue.[83]
On 19 August 2011 the Greek Minister of Finance, Evangelos Venizelos, said that new austerity measures “should not be necessary”.[85] On 20 August 2011 it was revealed that the government’s economic measures were still out of track;[86] government revenue went down by 1.9 billion euro while spending went up by 2.7 billion.[86]
On a meeting with representatives of the country’s economic sectors on 30 August 2011, the Prime Minister and the Minister of Finance acknowledged that some of the austerity measures were irrational,[87] such as the high VAT, and that they were forced to take them with a gun to the head.[87]
In October, Greek Prime Minister George Papandreou won parliamentary backing for the further austerity required, firstly, for the next instalment of international loans that were preventing a sovereign default and, secondly, to keep open the possibility of a partial write-off of Greek debt at forthcoming EU summit.[88] At this summit on combating the EU sovereign debt crisis,[88] Greece was granted a quid pro quoof further austerity for a €100bn loan and a 50% debt reduction.[89] Within a week, Papandreou, backed unanimously by his cabinet, announced a referendum on the deal, sending shockwaves through the financial markets.[90][91] The prime minister’s announcement also resulted in the issuance of an ultimatum on Greece’s eurozone membership by Angela Merkel and Nicolas Sarkozy who declared that, unless the proposed referendum quickly affirmed the agreed-to summit plan, they would withhold an already overdue €6bn loan payment to Athens, money that Greece needed by mid-December.[90][92] Papandreou cancelled the referendum the next day, saying that it was no longer needed now the opposition New Democracy Party had given backing to the agreement.[90]
Papandreou resigned as prime minister on 10th November,[93] and was replaced temporarily by unelected technocrat Lucas Papademos who was to promulgate laws associated with implementing the EU summit plan; his appointment was criticised by left-wing parties and branded “unconstitutional”.[94] By contrast, three separate polls taken when Papademos assumed office revealed that around 75% of Greeks thought that temporary, emergency technocratic rule was “positive”.[94] The EU insisted that whichever government was elected after Papademos in 2012, it must be bound to honour the agreed upon EU-IMF austerity strategy.[95] It thus demanded that Greek party-political leaders sign legally-binding letters to this effect, as well as to any additional measures that might be required in future as part of the second rescue-package.[95] Papademos argued in favour of signing, even in the face of opposition from major pro-austerity factions in his government.[95]Such letters would bind Greek governments to austerity and structural adjustment through to 2020.[95] At the end of December, it was announced that the general election to replace Papademos’ technocratic administration was to be delayed until April 2012, as more time was needed to finalise plans for austerity and structural adjustment, as well as to complete negotiations over the Greek debt reduction.[96]
Inspectors from the troika will assess how the Papademos government has improved on that of Papanderou in meeting the targets of the first bail-out scheme, as well as how it has begun to institute the second programme.[96][97]
[edit]Objections to proposed policies
The crisis is seen as a justification for imposing fiscal austerity[98]on Greece in exchange for European funding which would lower borrowing costs for the Greek government.[99] The negative impact of tighter fiscal policy could offset the positive impact of lower borrowing costs and social disruption could have a significantly negative impact on investment and growth in the longer term.Joseph Stiglitz has also criticised the EU for being too slow to help Greece, insufficiently supportive of the new government, lacking the will power to set up sufficient “solidarity and stabilisation framework” to support countries experiencing economic difficulty, and too deferential to bond rating agencies.[100]
As an alternative to the bailout agreement, Greece could have left the eurozone. Wilhelm Hankel, professor emeritus of economics at the Goethe University Frankfurt suggested[101] in an article published in the Financial Times that the preferred solution to the Greek bond ‘crisis’ is a Greek exit from the euro followed by a devaluation of the currency. Fiscal austerity or a euro exit is the alternative to accepting differentiated government bond yields within the Euro Area. If Greece remains in the euro while accepting higher bond yields, reflecting its high government deficit, then high interest rates would dampen demand, raise savings and slow the economy. An improved trade performance and less reliance on foreign capital would be the result.[citation needed] Polls have shown that despite the awful sitution, the vast majority of Greeks are not in favour of leaving the eurozone.[102]
In the documentary Debtocracy made by a group of Greek journalists, it is argued that Greece should create an audit commission, and force bondholders to suffer from losses, like Ecuador did.
On a poll published on 18 May 2011, 62% of the people questioned felt that the IMF memorandum that Greece signed in 2010 was a bad decision that hurt the country, while 80% had no faith in the Minister of Finance, Giorgos Papakonstantinou, to handle the crisis.[103]Evangelos Venizelos replaced Mr. Papakonstantinou on 17 June. 75% of those polled gave a negative image of the IMF, and 65% feel it is hurting Greece’s economy.[103] 64% felt that the possibility of bankruptcy is likely, and when asked about their fears for the near future, polls showed a fear of: unemployment (97%), poverty (93%) and the closure of businesses (92%).[103]
The social effects of the Greek austerity measures have been severe, including on poor and needy foreign immigrants, with even some Greek citizens turning to NGOs for healthcare treatment,[104] and had to give up children for adoption.[105] On 17 October 2011 Minister of FinanceEvangelos Venizelos announced that the government would establish a new fund, aimed at helping those who were hit the hardest from the government’s austerity measures.[106] The money for this agency will come from the profits made by tackling tax evasion.[106]
[edit]See also
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Never has America been more assimilated, integrated, and intermarried — as is evident in everything from politics to popular culture, from statistics to anecdotes. Yet from late 2007 to 2012, Barack Obama has been establishing new rules of racial referencing. In general, his utterances follow a disheartening pattern. When he is ahead in the polls, has won an election, and is not campaigning, then he emphasizes the unity of the country. But when he is running for president, or campaigning for others, or sinking in the polls, he and his closest associates predictably revert to charges of racial bigotry, albeit usually coded and subtle. America is redeemed when it champions the Obamas, but retrograde when it does not.
Obama’s race-based strategy is predicated on some unspoken assumptions: Any short-term damage incurred by engaging in racial tribalism can easily be later erased by soaring teleprompted speeches on racial harmony; the media will either not widely report his emphases on race or generally support his charges; a person of color can hardly be culpable of racial polarization himself given the history of racial discrimination in this country.
In a recent speech before a Latino audience, President Obama, in blasting congressional Republicans, recalled that he had run for office because “America should be a place where you can always make it if you try; a place where every child, no matter what they look like, where they come from, should have a chance to succeed.” The obvious conclusion from his increasingly frequent “look like” trope is that his critics predicate success in America on just the opposite criteria. That is, supposedly racist opponents do not wish every child to succeed, and so it certainly matters to them a great deal what Americans should “look like.”
Recently, First Lady Michelle Obama complained about a description of her White House infighting in an otherwise favorable account of the first family, written by a New York Times reporter. She suggested that the book’s criticism was unfair because “That’s been an image that people have tried to paint of me since, you know, the day Barack announced, that I’m some angry black woman.”
Oddly, the first lady did not cite anyone who, in fact, had tried to stereotype her as an “angry black woman.” To be sure, “people” have characterized her as “angry,” given her prominent role in the 2008 campaign, during which she repeatedly found herself in dramas of her own rhetorical making (saying Americans were “just downright mean”; never having been proud of America before the nomination of her husband; etc.). But no one suggested that her overt anger derived from being either “black” or a “woman.”
Again, these invocations of race always raise logical antitheses: Do only those who do not find Mrs. Obama “angry” escape her charge of racism? Second, the race-obsessed Mrs. Obama forgets that outspoken first ladies, especially those like herself who have refined tastes and are political infighters, are always natural media targets. The press savaged Nancy Reagan on topics as diverse as her purchase of new White House china, her reliance on astrology, and her legendary infighting with chief of staff Don Regan. Fairly or not, Mrs. Reagan never quite shook the stereotype that she had roamed the West Wing as a sort of Lady Macbeth with aristocratic appetites — a theme of Mr. Regan’s memoirs. It is likely that Michelle Obama will not either.
Attorney General Eric Holder has often found race a convenient refuge from criticism — most recently accusing his congressional auditors of racism, for their grilling him over government sales of firearms to Mexican cartel hitmen. Again, there is an obvious inference: To the degree that you do not criticize Eric Holder you are not racist; to the degree that you do, you may well be. Holder, remember, earlier called his fellow countrymen “cowards” for not sharing his own particular take on racial relations, as if all of a craven America had now become Barack Obama’s clueless Pennsylvania clingers. In exchanges over his office’s dismissal of voter-intimidation charges against New BlackPanther Party members, Holder described African-Americans as “my people.” Again, note the natural corollary once we descend into these racial quagmires: If Holder can talk of his “people,” are those who do not share his racial heritage not then quite the attorney general’s “people”?
Our new racial profiling ripples out from the top. When Rick Perry referred to “a big black cloud that hangs over America — that debt that is so monstrous,” he was accused of racism; the second half of the quote was conveniently omitted. Chris Matthews referred to Perry’s support of federalism with the quip, “This is going to be Bull Connor with a smile.” Lee Siegel just wrote in the New York Times that “Mitt Romney is the whitest white man to run for president in recent memory.” Think for a minute of prominent public figures who at one time or another have been accused by the Obama team of either being racist or playing racial politics against them: Bill Clinton, Hillary Clinton, Newt Gingrich, Darrell Issa, John McCain, Sarah Palin, Rick Perry, and Rick Santorum. The list grows in direct proportion to the uncertainty of Obama’s political fortunes.
President Obama and his supporters insist that they de-emphasize matters of race, but their record in just the last four years reveals a veritable obsession with it, in a manner that was never true of prior minority members serving in high office — think of Colin Powell, Condoleezza Rice, or Alberto Gonzales. We are not that far away from Obama’s appearance on the national scene as a serious presidential candidate in early 2008. Yet he has already reformulated racial discourse in America, most famously blasting Pennsylvania whites who “cling to guns or religion or antipathy to people who aren’t like them,” and introducing “typical white person” into the national lexicon and the racist Rev. Jeremiah Wright into the national consciousness. The mythography of the 2008 campaign was that Barack Obama overcame the burdens of racism; the reality was that racial intemperance during that long year came principally from Barack Obama himself or his personal pastor — and, in our disturbed culture, even to acknowledge that fact earns the charge of “Racist!”
Obama has mainstreamed the practice of profiling friends and enemies on this reactionary basis of racial identity. In a Democratic National Committee video in April 2010, Obama called on “young people, African-Americans, Latinos, and women . . . to stand together once again.” Are those not included in his categories, then, not to stand “together” again? Shortly before the November 2010 congressional elections, Obama suggested told a huge audience in Philadelphia that Republicans “are counting on black folks staying home.” In one of his most surreal speeches before the Congressional Black Caucus, Obama in affected fashion adopted the supposed patois of Black America in defining collective interests by shared race: “Stop grumblin’. Stop cryin’. We are going to press on. We’ve got work to do.” Separately, he appealed to Latino voters not to stay home from the 2010 election, but instead to “punish our enemies” — and not to fall prey to the Republicans’ “cynical attempt to discourage Latinos from voting.” I don’t think a president of the United States has ever, at least since the pre–Civil War era, openly called on a racial group to join with him to punish political adversaries.
Obama stereotyped the Cambridge police department as having “acted stupidly” for detaining his friend Henry Louis Gates, an African-American Studies professor at Harvard. He allegedly complained to political supporters that racial bias explains much of the Tea Party’s opposition to his administration. The wonder is not only that the president of the United States constantly refers to race, but that his serial obsession now earns snores rather than surprise.
Indeed, President Obama’s example has radically brought the politics of race into almost every conceivable forum. Members of the Black Caucus now routinely either allege outright racism or exhibit racist attitudes themselves if opposition arises to the Obama agenda. That is a serious charge, but it is one supported by numerous examples. For Rep. Emanuel Cleaver (D., Mo.), white presidents must be “pushed a great deal more” to address black unemployment than would a black president. For Rep. Sheila Jackson Lee (D., Tex.), argument over the debt ceiling is proof of racial animosity toward Barack Obama; for Rep. Barbara Lee (D., Calif.), Republicans are trying to deny blacks the vote; for Rep. André Carson (D., Ind.), the Tea Party wishes to lynch blacks and hang them from trees; for Rep. Charles Rangel (D., N.Y.), Rick Perry’s job creation in Texas is “one stage away from slavery,” and on and on and on. Icons of popular culture — whether a Morgan Freeman (“It’s a racist thing”) or a Whoopi Goldberg (“I’m playing the damn [race] card”) — routinely accuse Americans of racism for their growing unhappiness over the record of the Obama administration.
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bye bye O
John Podhoretz
President Obama’s executive power-grab this week — making four “recess” appointments when the Senate isn’t in recess — is a mark not of his strength, but of his relative weakness. He is asserting an authority he does not possess through the Constitution because he has precious little personal authority left to assert.
He had it and he lost it, and he can’t figure out how to get it back — so he’s just going to take it.
“When Congress refuses to act, and as a result hurts our economy and puts people at risk, I have an obligation as president to do what I can without them,” Obama said Wednesday as he trumpeted his installation of Richard Cordray as head of his new consumer-activism bureau.
This is rhetoric designed to thrill liberals and Democrats, who (like all partisans and ideologues) love what they take to be the “good fight,” and don’t particularly care how it’s waged. That’s true even if they spent eight years screaming about supposed unconstitutional actions on the part of the Bush administration, every one of which had a far firmer foundation in constitutional law than Obama’s unprecedented action this week.
They also love it because they think it represents an awakening by Obama to the nature of the obstructionist efforts against him (and a winning re-election strategy) when he says he’ll do “what I can” to combat Washington’s brokenness.
This supposedly a) acknowledges the public sentiment against the city whose most powerful resident he is, b) alleges he’s not the reason for the problems and c) places the blame on the recalcitrant Congress.
Maybe it’s the best hand Obama has to play, but it’s not a very good hand. For one thing, the voters who have turned on him don’t think he has exercised too little power, but rather too much — so bragging about doing things without congressional sanction may not play well.
Second, no matter how resolute he sounds, the fact that he has to act in a somewhat rogue manner is an expression of a profound loss of presidential authority — and one that he can’t successfully blame on Congress.
Obama lost his ability to push his agenda through Congress when he received what he himself called a “shellacking” in the November 2010 elections. That shellacking was primarily the result of massive policy overreach when he had a Democratic Congress in his pocket.
He spent 2009 and 2010 getting what he wanted: a trillion dollar stimulus. Auto-industry nationalization. And, of course, his health-care law. It was a wildly successful first 18 months — and it led directly to the bruising defeat he suffered as soon as the American people could render their judgment on those actions.
The independent voters who’d put him over the top in 2008 were horrified by the results. Exit polls showed a 24 percent swing among them, from 8 percentage points in favor of Obama and the Democrats in 2008 to 16 points against in 2010.
What may have been even more painful for Obama’s vanity was his discovery in 2011 that his rhetorical gifts had lost their oomph. He gave speech after speech on topics dear to his heart — and found, each time, that the talk was either ineffectual or actually convinced more people to oppose him.
His failure to move the needle on public opinion for his second round of stimulus last fall — remember “pass this bill now” and “we can’t wait,” after which the bill didn’t pass because evidently we could wait? — indicated he could no longer use the presidency’s “bully pulpit” to his advantage.
He doesn’t frighten Republicans in Congress, and he doesn’t seem able to convince the American people of much.
And yet, even in these circumstances, he has managed to get his way in a limited sense. Misguided Republicans didn’t get their way in their efforts against raising the debt ceiling in August, even after GOP toughness succeeded in preventing a tax hike. And the strange decision by the same Republicans to take a stand against extending the payroll-tax holiday in December met a similar fate last month.
In those cases, Obama’s position was the more rational, the more moderate, and it carried the day. Making recess appointments when the Senate isn’t in recess is neither rational nor moderate. It’s a raw misuse of executive power by a president whose love of government is his most vulnerable spot with the electorate.
And it will come back to haunt him.
Read more: http://www.nypost.com/p/news/opinion/opedcolumnists/this_power_grab_sign_of_weakness_B95SE4zOZsyjuJxn63PSEO#ixzz1iihaRD7r
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It proved as hard to break up the bankrupt European Union as it was to create it. For all the hundreds of stories predicting the imminent end of the union, insolvent Greece, Italy, Portugal, and Spain still hung in. Apparently if these debtors keep promising to end their spendthrift ways, quit calling the historically sensitive Germans bad names, and welch only on serial billion-euro loans — rather than default all at once on massive trillion-euro obligations — the Germans will keep doling out enough money for the EU to whimper on a bit longer.
Meanwhile, the world’s failed states, such as Iran, North Korea, and Pakistan, just keep on failing. Getting the bomb and acting crazy are about all these pariah nations can do. Otherwise, who would care that the adolescent-looking Kim Jong Un just took over North Korea? How else can we explain giving away billions each year to anti-American Pakistan? Without monotonous threats of acquiring nuclear weapons and closing the Strait of Hormuz, would anyone pay attention to the nutty theocracy in Iran?
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If tottering states can keep convincing successful nations that they are willing to suffer a lot to make their betters suffer a little, then they win a little political clout, some small influence — and a little more time to cause others misery. What is needed for these volatile countries to survive another year is to occasionally test a nuke, shoot off a missile, or threaten to obliterate a neighbor. Kidnapping some foreigners or sending out terrorists works, too — any sort of occasional taunting just short of provoking the United States and its allies into a full-fledged war. Only with many enemies and lots of crises can these sick regimes hobble on for a bit longer.
Solyndra, Climategate II, and the massive new finds of American gas and oil have for now postponed the promised era of the government-subsidized windmill and solar panel. In 2011, there was no more talk of cap-and-trade and new public/private green companies, but instead discoveries of oil and gas in unlikely places such as the Dakotas and Ohio. None of this was supposed to happen: Energy Secretary Steven Chu had dreamed of $9-a-gallon, European-priced gas to soften our carbon footprint. Candidate Barack Obama had long ago promised that our electricity bills would skyrocket. We are still supposed to buy Chevy Volts and not incandescent bulbs. But for now, American entrepreneurial ingenuity may have cooled our new government-run green lifestyles.
The great story of 2011, however, was crushing public debt and how it was incurred — and how it is to be paid back. The imploding European Union, the contrast between blue-state California and red-state Texas, and the record $16 trillion in American debt offered lessons that even the most zealous Keynesians could not explain away. Whether in the case of European state jobs, California pensions, or out-of-control Medicare and Social Security costs, the results of voters voting themselves entitlements were all too familiar.
So were the common patterns of blaming “them” for our own self-created messes. Abroad, the insolvent European nations faulted the thrifty Germans as too greedy. Here at home, the “1 percent” — millionaires, billionaires, corporate-jet owners, and fat cats — were supposedly responsible for making too much money at the expense of others. But even if the 1 percent of top earners paid half, rather than nearly 40 percent, of all income taxes, we still could not afford to spend as before. Relief will not come from printing more money or explaining away the debts as an accounting problem, but by tightening our belts and encouraging individuals to create wealth for themselves, and in the process for others, too. Paying back each billion in debt will prove far slower and harder than was eagerly borrowing each trillion we now owe.
In 2011, President Obama expressed a desire to be reelected on the grounds that he inherited a mess from George W. Bush that he needed more than four years to clean up. That story requires believing that growing the government, putting far more regulations on businesses, and forgoing new sources of gas and oil are making things better rather than worse. But Barack Obama’s last federal budget was almost $1 trillion larger than was Bush’s in 2008. We owe over $4 trillion more than we did in 2008. And the unemployment rate for the last year of the Bush administration averaged 5.8 percent, but in 2010 averaged 9.6 percent. Never have more Americans been on food stamps. Presidents are rarely reelected on the grounds that “otherwise it could have been worse.”
The year 2011 taught us that when things logically should not go on, they usually don’t — though they end not with a bang but with a whimper.
— Victor Davis Hanson is a classicist and historian at the Hoover Institution, Stanford University, and the author, most recently, of The End of Sparta, a novel about ancient freedom. © 2012 Tribune Media Services, Inc.
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panto time
You may know that we are performing ”Sleeping Beauty” at Teatro Avogaria with show 12, 13 14 January, Venice, the scene of earlier successes. Entrance is by donation to the charity.
. Laurie wrote the script, she plays Fairy Cobweb and I am playing a Catholic Cardinal and a Blues Brother (a dancing role).. I did he same last year. I love the Cardinal’s costume with its eccliastical bling.
The show, written by my wife is a fundraiser for an Indian children’s orphanage. If you happen to be in Italy, hop a train to Venice and join us.
We did Cinderella in 2010. A big success.
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Meanwhile, we a…
Meanwhile, we are approaching the third year of the long winter Obama once celebrated as a “recovery summer.” Its chief selling points are an unemployment rate statistically lowered by more Americans giving up hope of finding a job, and the claim that millions of jobs have been “created or saved.” This bogus locution allows Obama to claim every job he doesn’t destroy as a win.
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