The dark heart of Europe

Whether it is the European Commission, involuntary euthanasia, or murderous pedophiles, there always seems to be something deeply amiss about those bloody Belgian bastards:

The organs of people killed by euthanasia in Belgium are being harvested for transplant surgery, a report revealed yesterday. A quarter of all lung transplants in Belgium are from people killed by lethal injection….

‘Given that half of all euthanasia cases in Belgium are involuntary it must be only a matter of time before the organs are taken from patients who are euthanised without their consent. The matter of fact way the retrieval process is described in the paper is particularly chilling and shows the degree of collaboration that is necessary between the euthanasia team and the transplant surgeons – prep them for theatre next to the operating room, then kill them and wheel them in for organ retrieval. All in a day’s work in Brave New Belgium.’

He added: ‘Doctors there now do things that those in most doctors in other countries would find absolutely horrific.’

So much for the Hippocratic Oath. Once the medical community threw it out on behalf of evil women demanding abortions, it didn’t take very long for doctors to start killing adults. Remember that the next time someone asserts that there is no slippery slope in ethics.

WND column

The End of Europe

Few Americans realize that the European Union is among the most deceptive institutions on the planet. It is even less democratic than the Third Reich ever was, with ambitions that rival the erstwhile thousand-year plans of the late, unlamented Reichskanzler.

Born amidst deceit and lies that dwarf those told by the most famous 20th century titans of mendacity, the Eurofascists not only kept their totalitarian political aims under wraps, but outright denied that they had any intention of infringing national sovereignties. For more than 40 years, they swore up and down that their only objectives were economic, until the moment that their vast bureaucratic infrastructure appeared to be sufficiently emplaced to permit a naked grab for overt political rule.

But fittingly, since economics was the sword they used to conquer an unwitting Europe, economics is also the sword by which their dark visions of a Fourth Reich will die

NB: I note that I am no longer one of the very commentators anticipating the demise of the European Union:
The vision of a united Europe still has a powerful hold on the elites of Europe, who see the transfer of power from nation-states to an unelected bureaucracy as insurance against future wars and, if truth be told, a relief from democratic pressures. In addition, the prospect of a euro that would replace the dollar as the world’s reserve currency, or at least weaken its role in world trade, has a powerful hold on the French, who make no secret of their antipathy to Anglo-Saxon capitalism. The “European project” won’t go quietly into the night. But it just might go noisily into the ashcan of history if the Germans decide they cannot convert the Greeks into hard-working, tax-paying euro-citizens worthy of continuing handouts.

NB2: Holy cats, I didn’t notice this on the first read-through:
“Ireland’s debt now appears to be bigger, in relation to its economy, than the reparations imposed on Germany after the First World War,” according to economist Anatole Kaletsky.

First the euro, then the EU

Simon Heffer sees the end of both in sight:

The failure of the euro will signify the failure of the European ideal, and that is why eurocrats fight so hard for it. What should have been a club of free-trading nations over-reached itself, and sought to unite people with little or no common culture, politics, language or economic history into one coherent federation. It could never work. The generation that thought it could is either dead, senile or (in Chris Patten’s case) governing the BBC. The dream is over: it only remains to be seen how much more German money will be squandered before everyone finally admits it.

Countries who have bail-outs must survive for years afterwards on austerity measures. They will never have the industrial power of a Britain or France, let alone a Germany, so to stay in such a strong currency means permanent privation. Portugal will soon have an election, but so what? Ireland just had one, and it was irrelevant who won. The most important thing a country has – the right to set its own economic policy – was forfeited by the Irish, and the Portuguese, when they joined the euro. All aggrieved people in those countries can do if they want a different policy is write to Frankfurt and ask politely – or riot. And I fear there will much more of the latter before this charade comes to its inevitable end.

Some of us in Britain have resisted the EU in all its manifestations because what is politely called “loss of sovereignty” actually means “loss of democratic rights”. Our votes as electors become pointless. As the eurocrats become more desperate to hold things together, more and more unreasonable demands will be made upon us – whether we are in the euro or not. That is the nature of dictatorships such as the EU. We do not vote for the commissioners who initiate, on the advice of their unelected advisers, the policies they inflict upon us. Napoleon and Hitler tried to unite Europe, but neither did so with the pretence of democracy. As Europe’s currency fails, and a last desperate attempt is made to save it, the price will be our freedom.

The comparison of the EU to Napoleon and Hitler is astute, because the only significant difference is that the EU has used banks to subvert national sovereignty rather than ranks and tanks. And like Napoleon and Hitler, their efforts will ultimately go for naught after a brief period wherein it looked as if they had been successful.

Eventual Irish default

Ireland is caught in the debt trap:

Ireland’s new leader Enda Kenny faces a daunting task as he tries to change the terms of his country’s €67bn (£57bn) EU-IMF package, either by cutting the penal rate of interest or changing the remit of the rescue fund to help Ireland claw its way out of a debt trap. The three parties in Chancellor Angela Merkel’s coalition have issued a paper ruling out use of the bail-out machinery to purchase the bonds of eurozone states in trouble, or engineer a “soft” debt-restructuring by lending to these countries so that they can buy back their own debt cheaply from the market.

They’re going to default sooner or later. They have to. It’s not as if they can even convincingly play Extend-and-Pretend, given that what they’re pretending is a mathematical impossibility in the short term. At least in the case of the United States, the pretense is still potentially credible in the short term.

It is irrelevant if Merkel and the Euzi bankers manage to cow the new Irish government into backing down again. Ireland will not be able to pay the debt however it is framed and decorated. Better Kenny and company follow the example of Iceland and tell the bankers that they’ll have to pay their own debts with their own money… and if they don’t have it, then their creditors will have to book the loss.

An Irish Hitler?

Economist Barry Eichengreen reconsiders the European Union:

It pains me to say this. I’m probably the most pro-euro economist on my side of the Atlantic. Not because I think the euro area is the perfect monetary union, but because I have always thought that a Europe of scores of national currencies would be even less stable. I’m also a believer in the larger European project. But given this abject failure of European and German leadership, I am going to have to rethink my position.

The Irish “program” solves exactly nothing – it simply kicks the can down the road. A public debt that will now top out at around 130 per cent of GDP has not been reduced by a single cent. The interest payments that the Irish sovereign will have to make have not been reduced by a single cent, given the rate of 5.8% on the international loan. After a couple of years, not just interest but also principal is supposed to begin to be repaid. Ireland will be transferring nearly 10 per cent of its national income as reparations to the bondholders, year after painful year.

This is not politically sustainable, as anyone who remembers Germany’s own experience with World War I reparations should know.

I like Eichengreen’s work, but he is incorrect. The failure of the European Union is not a failure of French and German leadership, it is the structural failure of yet another European experiment in authoritarian, anti-democratic, centralized empire. Now, I tend to doubt that Ireland is going to develop into the 21st century version of National Socialist Germany for numerous reasons, chief among them the fact that it is an island without a navy. But given the harsh burden being imposed on the Irish people by their European and Irish governments for the foreseeable future, one can see where The Economic Consequences of the Peace might make for a timely read right about now.

Lest Ireland forget

Daniel Hannan’s little photo essay reminds everyone that the Irish government and all the major Irish parties forced the Irish people to vote a second time on the EU ConstitutionLisbon Treaty and sold it to them on the basis of economic recovery, specifically including more “jobs and investment”.  And he asks “Well, guys, here we are a year on. How’s the recovery working out for you?”

One has to wonder about a “bailout” courtesy of governments who are already robbing pension funds in order to continue their maddened spending:

>Asset managers will have the chance to get billions of euros in mandates in the next few months for the €36bn Fonds de Réserve pour les Retraites (FRR), the French reserve pension fund, after the French parliament last week passed a law to use its assets to pay off the debts of France’s welfare system….

The move reflects a willingness by governments to use long-term assets to fill short-term deficits, including Ireland’s announcement last week that it would use the country’s €24bn National Pensions Reserve Fund “to support the exchequer’s funding programme” and Hungary’s bid to claw $15bn of private pension funds back to the state system.

Don’t worry, it’s not as if the US government is heavily indebted or would ever even contemplating the seizure of pensions or tax-free retirement funds….

Krugman dabbles in Austrian theory

Needless to say, he doesn’t do so consciously nor does he show any signs of having learned the relevant empirical lessons. But in this particular situation, he is correct in placing the blame for the present Irish debacle on a credit bubble and in recommending the right economic policy:

The Irish story began with a genuine economic miracle. But eventually this gave way to a speculative frenzy driven by runaway banks and real estate developers, all in a cozy relationship with leading politicians. The frenzy was financed with huge borrowing on the part of Irish banks, largely from banks in other European nations.

Then the bubble burst, and those banks faced huge losses. You might have expected those who lent money to the banks to share in the losses. After all, they were consenting adults, and if they failed to understand the risks they were taking that was nobody’s fault but their own. But, no, the Irish government stepped in to guarantee the banks’ debt, turning private losses into public obligations….

In early 2009, a joke was making the rounds: “What’s the difference between Iceland and Ireland? Answer: One letter and about six months.” This was supposed to be gallows humor. No matter how bad the Irish situation, it couldn’t be compared with the utter disaster that was Iceland.

But at this point Iceland seems, if anything, to be doing better than its near-namesake. Its economic slump was no deeper than Ireland’s, its job losses were less severe and it seems better positioned for recovery. In fact, investors now appear to consider Iceland’s debt safer than Ireland’s. How is that possible?

Part of the answer is that Iceland let foreign lenders to its runaway banks pay the price of their poor judgment, rather than putting its own taxpayers on the line to guarantee bad private debts. As the International Monetary Fund notes — approvingly! — “private sector bankruptcies have led to a marked decline in external debt.”

Where Krugman goes awry is in stating that the Irish are “bearing a burden much larger than the debt — because those spending cuts have caused a severe recession so that in addition to taking on the banks’ debts, the Irish are suffering from plunging incomes and high unemployment.”

It’s not the spending cuts that have caused the severe recession, it is the debt-deflation that inevitably followed the end of the credit bubble that caused it. And while Krugman is correct to note that the Keynesian solution to “restore confidence” is not working, he doesn’t realize that is because it is irrelevant and cannot work. He does, however, recognize that his usual recommendation of currency devaluation (printing away the debt) is not an option due to the financial straightjacket imposed by the Euro, which leaves the correct option of the Irish government defaulting on the bank debts, which is exactly what Austrian theory dictates should have been done in the first place.