Ignatius on European Finances

Daniel Gross laid out some of the opportunities and pitfalls for the U.S. in the European debt crisis. (See my previous post.) David Ignatius writes about the roots of the panic, and the key statement may be this: "Investors keep pounding Europe in part because they don't yet see the mechanisms that will enforce discipline."

Ignatius asserts, with the backing of Italian President Napolitano, that much of the problem is that Europe has a single currency, the Euro, in use by 16 countries with independent fiscal policies. The need to enforce consistent policies to support the Euro and make the market-wide economy work confronts the nationalist feelings of the people.

We saw this in the Greek riots, in the signs condemning the IMF and the EU. Well, Greece joined the Euro because they Greeks thought they'd get the advantages of a strong, well-managed currency, without having to change their lax fiscal policies. Now they get the pain of fiscal discipline, and the currency in question is hitting new lows against the dollar. Such is life!

The Silver Lining in the Greek Cloud

There is an old, old saying: "Every cloud has a silver lining."

Years ago I came up with my own variation, "Every silver lining has a cloud."

Daniel Gross is looking at the silver linings in the Greek debt crisis, and then at the clouds behind those silver linings. Because of the European reaction to the Greek (and Portuguese, and Spanish) debt problems, the price of oil is down. This could be why we did not see the usual Memorial Day hike in gasoline prices, at least, not here in Colorado. So that's good for the U.S. economy.

But a lot of our recovery has been based on exports, and a weakening Euro means that U.S. goods are more expensive in Europe. More Italian wine may be imported, and less California wine exported, than might have been the case without the Euro's recent problems.

Cloud, silver lining, cloud, silver lining - out of all this alternation and uncertainty, some sort of balance has to arise.

Is Western Conservativism Taking Over the GOP?

The attached is a very nice article about the differences between the Western and Southern brands of Republican conservatism. A shorthand expression would be that Western conservatives (among whom the author includes, a little confusingly, Rand Paul of Kentucky) descend from Barry Goldwater, while Southern conservatives descend from George Wallace. Actually, the inclusion of Rand Paul in the Western branch makes sense, in that his defense of his questioning of the Civil Rights Act of 1964 is clearly based on property rights rather than any racial bias at all. In fact, one could argue that this is what has gotten Paul into trouble; his questioners, such as Rachel Maddow, take it for granted that opposition to "civil rights" is proof of racism. Paul, who is clearly no racist, is confused and baffled by this line of attack.

One of the problems with pushing limitations on the government's ability to intervene in private business decisions, in "property rights," is that it's hard to take into account the motivations of the actors, or the circumstances surrounding their actions. It's all very well to say that Lester Maddox had a right to refuse service to anyone he chose, and that, as a private property owner, he should have been shielded from government interference. But when Maddox's sole principle for exclusion was race, the result of allowing him to exercise his private property rights was that a black person couldn't get a meal or find a hotel room at all in some towns.

It was, in fact, a stretch to use the interstate commerce clause to apply the Civil Rights Act to local businesses that participated very little, if at all, in interstate commerce. But it actually makes more sense today, when so many restaurants are owned by large corporations with operations in many states, and use central suppliers who ship goods across state lines. And while the public face of this fight was about the ability of black people to be served in restaurants owned by white people, the arguably more important point was about the right of black people to be employed in restaurants, stores, and other businesses.

Which gets into a larger question. Suppose we take Rand Paul at his word. He deplores racism, and he wouldn't do business with any company with racially biased policies. But he thinks that private property rights trump civil rights, because the Federal government simply does not, under the Constitution, have the power to enforce racially unbiased policies. Would he then, as a US Senator, vote for against a bill that would deny Federal contracts to companies that did not adhere to equal employment opportunity standards?

The Death Spiral of the Welfare State

Is death spiral an over-dramatic term? Robert J. Samuelson doesn't think so, and he explains why in this column.

How does the Greek crisis relate to us here in the United States? Well, we have an aging population. It isn't as bad as the situation in Greece or much of Europe, let alone China and Japan, but it's bad enough. One of the factors which has kept our population younger, and thus provided us with a broader base of working-age people to support the welfare state, has been our relatively high immigration rate. And a lot of people want to kill that particular golden goose.

One way to look at it is that we need to encourage lots of young people from other countries to move to the U.S., get jobs, and contribute to Social Security and Medicare, or those programs will go broke.

And at least we have that option.

The Greek Riots and the Markets

Daniel Gross provided a quick reaction to the response of the financial markets to the deadly riots in Greece. What I don't get is the extent to which the markets were apparently surprised by the reaction of the pampered Greek people to the idea that they were going to have to adjust to a new reality. Greece had a system under which people could retire on full pay at age 53, there were lots of cushy government jobs (the technical term is "sinecures"), and tax laws were only loosely enforced. Now the government is cutting jobs and subsidies, promising to enforce the tax laws, moving out retirement ages, and cutting pensions.

Say you're a 45-year-old Greek looking forward to retiring on full pay in only eight years. Now they tell you that you can't retire for several more years, and when you do retire you're not going to take home as much, and the government is going to take more out of your pay in taxes than they have in the past. This is supposed to be make you happy?

Better Late Than Never: Joe Ellis on Original Intent

Okay, it's May 23, and this article by Joseph Ellis, the well-known historian, appeared on May 7. So I'm a little slow sometimes.

But Ellis, whose speciality is the history of the era in which the Constitution was written and ratified, makes a very important point here. Rather, he makes two points:

First, the doctrine of original intent is just that, a doctrine, a teaching propounded by one side in an ideological debate. Original intent is not some privilege mode of understanding the Constitution.

Second, the key problem with original intent is that it is impossible to identify that intent. A few years ago I read a book by Jack N. Rakove, Original Meanings, in which the same point was made. The essential problem is that the Constitution was adopted in a process involving a number of parties, and it is difficult to decide which of these parties, if any, had a particular set of intentions to which we ought to defer.

A good column by Ellis, and something which we should all consider, especially in light of the weird, biassed, and sometimes baseless statements coming from the Tea Partiers and others on the extreme right.

Adjustments to the Reading List

I just added a new book to the Current Reading sidebar. This was a little tardy, as I started the book back on May 11, and I finished it yesterday.

The book is:

David Weber. Off Armageddon Reef. New York: Tor Books, 2007. 605 pages. Characters. Glossary. Hardcover. ISBN: 978-0-765-31500-7. $25.95.

I should note that this is the first of series of books by Weber set on the Earth colony world of Safehold, which has become the last refuge for humankind from an alien culture called the Gbaba. Also on the reading list is By Heresies Distressed, the third in the series, but the one I saw first at the library and, thus, read first.

More comments and, perhaps, a review to follow.

Global Warming - Again

There is a discussion thread at the Two Masters blog that those interested in global warming might find of interest.

There is, to state it briefly, a big space between the position that the magnitude and the effects of anthropogenic global warming are still uncertain, and the position that no real evidence exists for the phenomenon. My feeling is that many of the people who claim that there was a scandal at a lab in England, and that the evidence for global warming is faked, oppose the idea of anthropogenic global warming for a number of personal, political, and business reasons. Their desire to have the evidence go away doesn't mean that the phenomenon is not real.

If I owned a coal mine or a coal-fired power plant, I, too, might be reluctant to believe that my actions are leading to a disaster. But, if I owned a coal mine, I'd also be used to having my actions lead to disasters, and I'd be used to lying about it.

Time will tell. Do you have your liferaft?

An In-Progress Problem

I was watching a video clip of Ken Schwaber talking about scrum software development, and he got into an interesting problem. (Well, interesting to some of us.) This is the "in-progress problem." It arises when you find that you have many tasks started, but few or none of them are being brought to a conclusion.

In my case, this applies to my reading habits. I tend to start a book because it seems interesting, or I've been thinking about something related to its subject, or just because it's handy or will soon be due at the library. But then I start another book, and another, and I sometimes find it hard to get back to the earlier book and finish it.

On the current reading list accompanying this blog you can see that I started The Rise of Napoleon Bonaparte, by Robert Asprey, back on St. Patrick's Day (March 17th, for you heathens in the audience). I started another book, The Vampire Archives, edited by Otto Penzler, on the same day. That in itself is probably a bad sign. Starting two books on the same day indicates that I was not of a very settled disposition. So far, I've read only through page 21 of the 580 pages in The Rise of Napoleon Bonaparte, or 3.62%.

I haven't done all that well in The Vampire Archives, either, as I am now at page 158, in a story called "Ligeia," by Edgar Allan Poe. That's about 15% of the 1034 pages in the book. But I do have the excuse the I received The Vampire Archives for Christmas 2009, along with a whole CARE package of books. The Rise of Napoleon Bonaparte I bought in a small gift and bookstore in Pagosa Springs, Colorado, in 2003, so it's been cluttering up my bookshelves for nearly seven years.

What am I going to do about this situation? Well, if experience is any guide, someday, perhaps a rainy, gloomy day like today, unfit for other pursuits, I'll pick up Asprey's book and start reading it. At some point, I'll be so far into it, and it will have engaged my mind in such various ways, that the reading will acquire a momentum of its own. And then I'll finally finish the book.