On the wrong side of the tipping point

George Rebane

[This is the submitted version of my regular Union column that appears in the 10dec11 edition of the newspaper’s print edition and here in its online edition.]

Our leadership has committed to take the country down the Hugo Chavez path.  Last week Venezuela’s portly leader shouted “Socialism, socialism, and more socialism!” as the solution to his country’s mounting economic and social problems.  While our president can’t use those exact words, he does promote the policies that will get us to the same place.

It was American socialist Upton Sinclair who in 1951 said, "The American People will take Socialism, but they won't take the label.” – the Left has made this their watchword ever since.  Today the socialist will accuse anyone of name calling if they dare call him that in an open forum.

Europe is now roiling in the inevitable throes of socialism.  Recently its voters have sought to tilt their governments to the right, but it is too late.  The decades’ long doses of government handouts and entitlements have made European addicts by the tens of millions.  And like addicts, they fear the cure much more than delaying their next fix, no matter how that worsens the inevitable reckoning.  But the death spiral of Europe’s eurozone, and perhaps the EU itself, is not reported by the media by using the true name of the dreaded disease.

So in America, half of our politicians continue to sell dope to masses of voters that are already hooked.  And they tell those of us addicted that there is nothing to worry about the cost of all that social narcotic being pumped into our welcoming veins.  It makes us feel good right now, and it will continue to be paid for through the never ending loans from our global storefront lenders.  The best part is that we addicts will never have to pay it back.  Incredulously you ask, how does that work out?

The answer, we are told, is that we’ll get the rich to pay off the loans some day.  And when they run out of money or just run out, we’ll have (wink, wink) other means.  Well, the rich will not have enough money.  And the same lenders are already telling Europeans that they don’t want to throw good money after the bad money which countries like Greece, Italy, Spain, Belgium, …, and even France will never pay back. 

All this has finally caught the attention of the drowsy analysts at Standard & Poors – remember those guys who gave corporations about to fail top AAA ratings the night before.  S&P has now put the world on notice that Europe may not be as creditworthy as its lenders, many already sporting 50% haircuts, continue to hope.  So the people who today lend 40 cents of every dollar our government generously spends, they are saying that the AA+ downgrade America now wears is beginning to worry them.

And here’s where the ‘wink, wink’ comes in.  Since there is no way that we can, or even have the will to work ourselves out of debt, we’re going to stiff our lenders.  And we’ll do it with freshly printed worthless dollars that add up exactly to the amounts owed everybody.  We are not going to default on our loans, no sirree; cause we’re Americans and we pay our bills.

Now some of you may protest and say that we’re going to do the right thing – cut spending, raise revenues through a new tax code, get our workforce re-trained, and put our shoulders to the wheel – and then hold a big national celebration when our are accounts are cleared.  Not even close.

No such plan exists on God’s green earth, and no politician would dare put one forward if it did.  But that’s not even the bad part.  The bad part is that along with the Chinese and other lenders, we will screw ourselves when we print our way out of debt.  Yes, the accounts will be cleared, but so will our pocketbooks, retirement accounts, and our wealth-generating economy to boot.  And none of us addicts have the gumption to do anything about it.  Do we?

So look around you today, this is the view from the other side of the tipping point – a firm and unshakeable belief that we’re not on the wrong side yet, and that the cavalry will come charging from over that hill yonder to save us all.  Oh yes, anyone who says differently will be tarred and feathered to nip such fear mongering and foolish reports in the bud.  That’s the spirit.

George Rebane is an entrepreneur and a retired systems scientist in Nevada County who regularly expands these and other themes on KVMR and Rebane’s Ruminations (www.georgerebane.com).

Comments

[D. King]

Not a pretty picture George. The E.U. and all their swooning supporters need a little more than tough love. When I think of all the time spent freeing them from the iron curtain, and then to watch them forge and don their own shackles, it makes me sick!

Since they all live in some sci fi fantasy world, maybe this will convey my feelings best.

http://www.youtube.com/watch?v=5b1a-hqvGNI

[Russ Steele]

George,

Did your post appear in the dead tree version, I cannot find on the Union webpage this morning. I searched the site by name and this article never showed up in the listed articles.

[George Rebane]

The piece appeared as scheduled in the print version, however, I couldn't find it the online version either. Will provide link to it as usual if it appears later.

[RL Crabb]

I had the same problem with my Tuesday cartoon. (And it was one of my best drawings too...oh well...)

[Bob W]

I can just see them all out there laughing and guffawing, holding their fat collective stomachs. "There goes that crazy Rebane again." "We've got em in the bag." "That's just the rich squealing while we pick their blotted pockets."

Famous last words.

[Paul Emery]

Actually my friends n Europe are doing quite well. They don't have to worry about loosing their house if they have a heart attack.

[Russ Steele]

I fear after the austerity measures kick in the European hospitals are going to be flooded with heart attacks. Life in the EU is going get very tough, as they are running out of other peoples money. If we bail them out, the life is going to get very tough here as well. Savings, 401Ks and bank accounts are going to be drained as the value of the dollar drops, for very extra billion printed. Lots of heart attacks on the horizon! A few strokes as well, might even see some window jumpers.

[D. King]

A little perspective for our friends on the left.

http://www.pagetutor.com/trillion/calculations.html

[Account Deleted]

Thanks for your 'proof' Paul. "My friends are doing quite well". Obama says the same thing every day. Nothing wrong here either. Keep telling yourself all is well, Paul.

[D. King]

Paul Emery | 10 December 2011 at 04:26 PM

"They don't have to worry about loosing their house..."

No Paul, just their sovereignty.

[Bob White]

Paul, Is there any way to impress upon you how far out of the logic loop your comment puts you?

What George is trying to bring to your attention is that where Europe is headed means that in case of a heart attack your house won’t matter. There won’t be any medical services. YOU WILL DIE INSTEAD!

Your complacent willingness to embarrass yourself is amazing to me.

[Account Deleted]

Come to think of it, Paul, I wouldn't lose my home here in the US if I had a heart attack and the same goes for my friends. So, what's your point?

[Todd Juvinall]

Is it the Kosovo, Bosnia, part of Europe or maybe the New Russia Europe Paul says his friends are doing well in? Or is it Italy? How about Greece, or maybe Portugal, hey maybe Spain?

[bill tozer]

Using monetary policy to fix fiscal policy is a waste of time as long as fiscal policy is controlled by girlie man politicians. Well, not totally a waste of time if total collapse is the goal. What ever happened to the old saying "the difference between a rut and a grave is just the dimensions"? Or when are we going to stop digging and climb out of the hole? No, we won't dig our way all the way to China. If we continue on our current course, we will come out in the Indian Ocean. "Surprise, surprise, surprise!" as Gomer Pyle would say. And what is this bashing of Portugal, Greece, and Spain and not our Irish ancestors? Gotta throw in the Irish (representing Northern Europe) to complete the anachronism PIGS for Euroland. Now the Brits are being left out of Euro rescue. Guess British banks still prefer the pound and sterling. Sorry to miss Mr. Crabb's cartoon. Its the second best thing in The Union, behind the police blotter. Meanwhile, back in the smoke filled rooms of Chicago....

[Mikey McD]

George, anyone with 3rd grade logic can see the writing on the wall. The subheading of your blog says it all "last great century of man." So what should we be doing today to prepare for the decline of quality of life?

I think the 'organice movement' spreading through the US (world?) is providentially getting the masses focused on self reliance, sustainability... which will serve society well as the standard of living decreases (# of household cars, cell phones, etc).

I have said since 3rd grade... "Those who put their trust in government(s) get what they deserve"

[Mikey McD]

We all want progress, but if you’re on the wrong road, progress means doing an about-turn and walking back to the right road; in that case, the man who turns back soonest is the most progressive.
“— – C.S. Lewis

[George Rebane]

Mikey 851am - As we adjust to that more self-reliant and lower standard of living, the big thing to keep in mind is incipient tyranny. Maintaining our liberties as we ratchet down is the watchword, because belt tightening always has come with the government's bayonet as the goad. In this regard I will repeat my 859am from the 'US Budget ...' piece.

Our two main parties do have a duopoly in the political arena, and I have no doubt that they have been in a more/less stable position as kings on the hill. I don't see a significant chance of change until someone besides a small group of economic watchers (that includes me) will declare that we are in Depression2. Right now, I feel very lonely but no less certain in holding this view. When Depression2 is declared, then we will definitely see a 'Man on a White Horse' Party emerge while entering a new level of polarization that will make us recall these as the days of harmony.

[Paul Emery]

More and more people are unable to have basic health insurance every day in this country meaning if they have a heart attack without insurance they WILL lose their equity in their home to pay off the bills. While you argue the hypothetical future of Europe this is occuring today in this country. Get real, look around your own community and see what's happening. Europe will be fine. It's this country I'm concerned about.

The problem is you have only empty rhetoric and no solutions.

Oh sure, let's go back to 1910. What a "hoot"

[Todd Juvinall]

I thought the equity in a persons home was theirs PaulE. Millions of Americans took out seconds on their homes, utilizing the equity for buying a boat or some killer vacations. Why can't it be used for medical care?

[D. King]

"Actually my friends n Europe are doing quite well. They don't have to worry about loosing their house if they have a heart attack."

Let's see, Paul wants us to worry about this country, but points to his friends in Europe as the solution.

"Get real, look around your own community and see what's happening. Europe will be fine. It's this country I'm concerned about."

"Europe will be fine."

Glad to hear it.

Someone call Bernanke.

Maybe if people here stop following your clueless friends in Europe, things will get better.

[George Rebane]

Actually PaulE 438pm should be the one to call Merkel, Sarkozy, and Draghi with his good news about Europe. Those guys have been focusing on the wrong continent. Some progressives here actually think that the northern Europeans are worried about the profligate southern Europeans. No, those misguided national leaders are worried about the imminent collapse of northern Europe. Call 'em Paul, or write them a letter. If there is no problem there, there is no problem of "contagion" to our shores. And then Paul will soon have to brush off his tux and be on his way to Oslo or Stockholm to accept his well deserved accolades.

[Dixon Cruickshank]

Paul - The problem is you have only empty rhetoric and no solutions.

Oh sure, let's go back to 1910. What a "hoot"

I thought thats what the Globel Warming thing was all about?? Their going back as fast as they can even bringing back the windmills - I bet the newest versions even have options for milling grain

[D. King]

"I bet the newest versions even have options for milling grain"

LOL, kinda like this:

http://fantes.com/images/7805-1mixer_acc.jpg

But, maybe if the millionaires and billionaires were to chip in, well, that would solve the problem.

http://www.youtube.com/watch?v=gh9dfaSOn5o

[Paul Emery]

It seems Europe been through just about everything and they are in pretty good shape today because they have a healthy opinion of what the role of government should be. Are there problems? You bet but it doesn't mean they'll swap their social democratic systems for some untried retro throwback pre 1910 American model. This is a well trodden rhetoric. The next thing I'll ask is what is the path out of this. There is a resounding silence when solutions are requested. Also "show me were it works today" is another silencer.

[D. King]

"Also "show me were it works today" is another silencer."

Overspending, overtaxing doesn't work anywhere.

Hey, maybe blowing up hydro-electric dams and levees will work. Let's cut off water to the central valley, yeah that's the ticket!

[D. King]

Let's try this.

http://www.nature.com/nclimate/journal/v1/n8/fig_tab/nclimate1265_F1.html

Oops! What happens to the price of food?

[D. King]

You may have to cut and paste that link.

[George Rebane]

PaulE 720pm - I do believe that it is only you who knows why ascribing the "pre 1910" solution to the rest of us gives you pleasure. It most certainly is not a claim that any of us have made, so in that sense you are debating with yourself.

With regard to ever going back to "show me where it works" reveals that indeed the progressive mind is a mind in stasis - nothing new is possible to contemplate. We most certainly can show where today's intended collective path has never worked.

The path out of this quandry? I've already outlined it. We in the west will have to revamp our economic and social systems, and then enter into a competitive state as peers of countries now growing their economies through adoption of liberties and naturally evolving inequalities.

But to do that we have to survive the coming collectivist inspired revolution where those who can't/won't will seek to take by force from those who can. And that survival is not fore-ordained. Tyranny has always been a more stable form of governance than republican democracy. I'm afraid that you and yours will fight this outcome tooth and nail, and continue to point yourselves toward what looks like the failing 'social democracies' of Europe that may themselves soon opt for a stable tyranny like in the Russian tradition. (And Islam is waiting in the wings to offer its tender mercies to the European population.)

[D. King]

Maybe da Global Varming is de answer.

http://www.5min.com/Video/The-New-Economical-Engines-of-Growth-61735195

and guess who bought 2 Bil. in MF Global (farmers money)

[Paul Emery]

Okay let's make it 1913 with Woodrow Wilson. Here's Todd from 07 September 2011 at 12:38 PM

"The battle is raging (in a political sense) about where the country is headed and it started with President Wilson. Before him the country was simple and opportunity abounded."

There are several other examples of the "good old days" before we went astray from Mikey and others.

What you have here is a theory of political evolution that is based not taken very seriously except with the most fundamentalist of Conservatives. Not even scholars from the AEI go this far but instead point to bank regulation as the essential path to resolving the European economic problems.

"In sum, time is of the essence. Actions to address the European crisis in a credible sustained fashion are urgently needed, while bank capital regulation throughout the world must be fundamentally reformed. "

http://www.aei.org/article/economics/financial-services/the-eurozone-crisis-a-roadmap-for-urgent-and-decisive-action/

While the AEI believes reform is essential nowhere in their well written opinion do they refer to bayonets in the streets by commie armies that you consistently describe as the inevitable consequence of the progressive path.

[George Rebane]

PaulE 920pm - in the event that you're addressing me (else ignore), I am unable to follow such leaps of logic that you so succinctly summarize in your last sentence. AEI's argument for bank reform to "bayonets in the streets by commie armies"??? My simple mind is left in the dust.

[Paul Emery]

George

I may have misunderstood you but isn't Socialism an entry drug to communism and therefore rule by the sword? Actually progressive theology is the seductive pathway to socialism.

The leap was to illustrate that your view is not shared by the AIE as a concern at least not in the views of the analysis I referred to.

Your views represent a fringe minority opinion even among Conservatives.

[George Rebane]

PaulE 920pm, 1208am - The AEI analysis you cite is a confabulation of long known nostrums for attempting to correct what most of us (including the Chicago School, Heritage, Cato, ...) knew would never work - monetary union without political union. I'm afraid you're reading more into that little summary than the author intended. This was not an analysis of the progress of collective forms of governance.

Nevertheless, you are probably not alone in your interpretation of what's going on in Europe. For example the banks are not in need of more regulation because of their usual commercial activities, but because they are also the lenders to sovereign government whose socialistic policies have now bankrupted them and caused a lot of the loans held by the banks to go bad, hence portending bank failures.

No one else wants to lend to the profligate socialists at any affordable rates, so the banks must now become formalized instruments of Brussels and ECB in order to pump newly printed euros into southern Europe. This requires new regulations and guarantees of the banks by the ECB. And in the end it won't work, because socialism is not addressed and will continue eating country after country.

[Account Deleted]

Paul - re your post at 9:20. First of all, many on the left speak glowingly of the 1950s as a wonderful time as well. Do you really want to go back there? I think not. Most of us conservatives do point to a period of American history when the "progressives" started to take power. It was a wrong turn, but it doesn't mean we want to go back there. It means we wish that the evolution of American society and govt had not taken that turn back then.
As to Europe, are you really sure you want to stand by your assessment that "It seems Europe been through just about everything and they are in pretty good shape today because they have a healthy opinion of what the role of government should be." Pretty good shape? Are you talking about the Europe that exists right now in the real world? The leaders of Europe sure don't think so, but what do they know?
As to the position statement from AEI - I think you had better read the whole thing. There is a lot more than bank regulation. BTW - conservatives do believe in bank regulation, it's just the left that paints a false picture that we don't. Since the left will lose every debate as to the kind of, and extent of regulation, it's easier just to constantly complain (falsely) that the conservatives are "against regulation". You might notice that the AEI would like the countries to get their budgets under control.
Not an easy thing for a socialist country to do. The AEI has no pretensions that Europe will suddenly throw off socialism, they are offering a cautionary on what is to come and how best to manage it. Even with their "solution" will come a hard reality that most Euro-volk won't like one bit. You lefties laughed at George's talk of blood in the streets, but now that it's arrived, you feel the need to further marginalize him.
Time will tell and I'm afraid that the conservative narrative that jumping off a cliff eventually results in a lot of broken stuff is coming to pass.

[D. King]

Nigel Farage: EU kills democracy in Greece

http://www.youtube.com/watch?v=0NbxBglFO9g

[George Rebane]

DaveK 923am - thanks for pointing us again to Farage's forthright speech. What continues to amaze this conservetarian is that, with all the headlines, videos, and reports pouring in, the American Left continues to ignore the collapse of Europe or even point out that all is well there.

[D. King]

Yes, they are relentless in forging their shackles.

http://www.youtube.com/watch?v=1MtWefXMHNs

[Account Deleted]

There's a story in today's SacBee about a major employer departing the Sac area for Texas. The comments from the lefties are basically saying 'good ridance'. The tax base is further eroding and they're too oblivious to know or care. The left will never get it.

[George Rebane]

ScottO 1036am - Yes, on NC2012 Russ Steele says “When will the useful idiots in Sacramento get the message, they are killing (the) California economy with regulations?”

My response there was, "Yes, and how about the useless idiots who spread across the countryside in 2010 to convince the sheeple that AB32 was an economic boon to California, and that they should therefore vote down Prop23. The Rebane cars will continue to proudly sport their Prop23 stickers – their message is more clear with every passing day."

[Douglas Keachie]

I'm sure you all no how Germany has the worst economy in Europe. Here's why:

http://inhabitat.com/german-village-produces-321-more-energy-than-it-needs/wildpoldsried-germany/?extend=1

[George Rebane]

Germany has the fourth largest economy in the world, and the largest one in the EU. It is fighting tooth and nail now to keep its economy intact against the financial tsunami that is heading toward it from the eurozone, and the socio-demographic disaster that is quietly overtaking it at home (Muslim settlements combined with a declining workforce and growing population of pensioners demanding maintenance of their QoL).

[Account Deleted]

Love the article on the 'green' German village. Fine - let's do it here too. Oh wait, - we can't - the Sierra Club and every lawyer on the left would throw up road blocks. I love the comments from the person that said that 'big oil' would pass laws to stop it. No, friend, it would be 'big govt'. Doug, go ask the greenies in Davis what happened to their big plan at making electricity. It seems there are to many onerous regulations by the govt. Can you just imagine that photo of the windmills superimposed over a shot of Nevada City? And a computer generated image of a few new hydro dams on the Yuba? All hell would break lose from the left. But you can still blame Bush and his oil buddies if it makes you feel good.

[Todd Juvinall]

Here Scott, check this out. You are right about the lawyers.

U.S.A.: There is one lawyer for every 265 Americans.

Brazil follows closely with one lawyer on every 326 Brazilians.

Clarification: While it looks like the US has the most number of lawyers, the per capita numbers suggest Spain and Italy are not "by far" the most although the 1MM+ number is staggering.

Country Lawyers Population People/Lawyer

US: Lawyers: 1,143,358 Pop: 303MM P/L:265
Brazil: Lawyers: 571,360 Pop: 186MM P/L: 326
New Zealand: Lawyers: 10,523 Pop: 4MM P/L 391

Spain Lawyers:114,143 Pop: 45MM P/L:395
Italy Lawyers:121,380 Pop: 59MM P/L:488
UK Lawyers:151,043 Pop: 61MM P/L401
Germany Lawyers:138,679 Pop: 82MM P/L: 593
France Lawyers:45,686 Pop: 64MM P/L: 1,403

Among the Top 7 "lawyerly countries" listed above, the US has about 50% of the lawyers, with 37 percent of the population of this group.

Read more: http://wiki.answers.com/Q/What_country_in_the_world_has_most_lawyers_per_capita#ixzz1gMEU5pDp