Monday, December 16, 2013

Economists Propose Roosevelt's New Deal for Resolving European Crisis

By Con George-Kotzabasis

Professor Varoufakis loves metaphors, especially those penned by him! So I too will use a metaphor even if he will hate it. The Modest Proposal (MP) is the offspring of the comely wedlock of Stewart Holland and Yanis Varoufakis but as time passes even beautiful grooms and brides show their wrinkles and need to do something about their withering state and recover their ‘Bo Derek’ status. Thus a new younger bride was added to the old hag this time with a reputable name, though devoid of any accomplishments, that of James Galbraith, the son of the famous John Galbraith. In the two years of the MP”s existence it was unable to entice any eminent economist to support it and only one economist of run-of-the-mill standing added his name to it, i.e., James Galbraith.

The intellectual weight of both Varoufakis and Galbraith has been amply and brazenly demonstrated by a profound article of theirs published in The New York Times, in which they argued that only the left-wing party of Syriza, a potpourri of Marxists, Trotskyists, and green fear mongers, under its leader Alexis Tsipras, a populist demagogue and a mediocrity to boot, could save Greece from the crisis. That the two professors placed the salvation of Greece on the by now historically obsolete and defunct Marxism, vividly reveals their intellectual credentials and on such reputations they are trying to inveigle and persuade first class economists and serious politicians on the European continent that their MP is the panacea that will pull Europe and its periphery out of its virulent crisis.

But to come to the policies of their MP, which they are re-Christening as The European New Deal in imitation of Roosevelt’s New Deal that presumably pulled America out of the crisis and decreased substantially unemployment, they seem to be unaware that the ‘boom’ between 1933 and 1937 still occurred in conditions of depression as unemployment was still at the level of 15% and the depression only ended with America’s entry into the war as a result of the preparation for the latter and as the unemployed were recruited in the armed forces to fight the axis powers on the seas and beaches of the Pacific and on the deserts and fields of Africa and Europe. Moreover, other countries in the depression recovered more quickly than the U.S.A., for example Canada, as during the Hoover administration, from 1930 to 1933, U.S. unemployment was on average 3.9 points higher than Canada’s unemployment and during Roosevelt’s New Deal, from 1934 to 1941, unemployment on average was 5.9 points higher than Canada’s. But it was one of the greatest economists in America Joseph Schumpeter who passed his withering judgment on the New Deal when he blamed it “for the fact that the U.S.A. which had the best chance of recovering quickly was precisely the one to experience the most unsatisfactory recovery.”

The quackery, however, of their MP lies in its implied claim, after the multiple malinvestments, non-investments, and the gargantuan increase of the inefficient public sector and profuse consumption on credit all of which economically devastated the landscape of Southern Europe, that the recovery of the European Union and its periphery can be achieved without pain. That is why they are silent about any structural reforms and the privatization of the public sector, and the need of increasing competitiveness--which are primal conditions for any sustainable recovery--that inevitably involve severe pain for the majority of the people, especially in conditions of depression. But this is understandable as to admit the necessity of pain would shatter their wish and fanciful fantasy to live in the best of all possible painless worlds, and thus would debunk them from the comforts of an idyllic existence on an earth bound paradise.

Furthermore, and this is the most important factor, the crux of their MP is based on an assumption, whose chances of being realized is infinitesimally small, that the issuing of bonds by the ECB and the European Investment Bank (EIB) will be bought by public and private institutions as well as individuals to the degree necessary so the former can fund their programs and thus start the roll of the recovery. It will be hardly reassuring to these institutions and individuals however, to know that their money will be invested in countries of the European periphery with their chronic record of being economically underperforming and default looming is the order of the day. Who would be willing to invest in a seat on the Titanic? It is easy to buy bonds during a time of prosperity but is it as easy to buy them in conditions of economic crisis when there is greater uncertainty about future prospects? Moreover, what reassurance and confidence will render to the public a clause of “super-seniority status” that clearly adumbrates a high probability of “hard default?” It is precisely in highly risk conditions that such clauses are necessary. And once one inadvertently flags such a high risk one turns the market more bearish and scares members of the public from purchasing bonds. In such conditions Keynes’s “liquidity trap” reigns! So what is the fate of the MP, if the bonds purchased by institutions and the public are not adequate in number to finance the grandiose scheme of a European New Deal, other than its inglorious burial! And what will happen to Yanis Varoufakis? Will he abdicate from his vocation as an economist and enter successfully another profession, such as futurologyto compensate for his failure as an economist?

Lastly, what real resources other than artificial ones, such as the printing press and inflation, have the ECB, the EIB, and the European Stability Mechanism for launching a program of such huge dimensions? These are the questions that make the scientific validity of the Modest Proposal dubious. And these unanswered questions by the sires of the MP turn the latter intellectually untouchable to serious economists.

I rest on my oars: your turn now

Wednesday, December 4, 2013

Terrorist Barbarians Inside the Gates of Western Civilization

By Con George-Kotzabasis

A deadly Trojan horse has been placed in the midst of the metropolises of Western civilization and, like Troy, is threatening its destruction. Throughout Europe, North America, and Australia, the belly of this deadly Horse is already bursting open delivering and unleashing a horde of fanatic barbarians on the cities of the civilized world, whose holy agenda decrees the wiping -out of Western institutions and their open, tolerant and free societies, and the genocide of their peoples by the fire of Allah's hell. 

This is the nightmare scenario that countries of the economically developed and free world are facing as a result of their humanitarian and generous, but replete with folly, immigration policies that allowed such vast numbers of mostly unassimilable Muslim immigrants with 'exponential' birth rates, to become permanent residents and citizens of their countries. (In the Netherlands almost one third of children under the age of thirteen are Muslim. No wonder that the great Islamic scholar Bernard Lewis argues, that "Europe will be Islamic by the end of the century".) As inexorably, not an insubstantial number of these Muslims of the diaspora will become terrorist - fodder for the likes of bin Laden, as Mohammed Atta, the Western educated ringleader, as well as so many other terrorists who have been also been educated in Western universities, of the murderous group of 9/11 has shown, whose terrorist cell was hatched in Hamburg Germany. This is especially so for many young unemployed Muslims in the West, who have been brought up within the strict confines of their rigid religion and who are therefore psychologically more susceptible to the calls of their fundamentalist imams for a Jihad against the infidels, making them therefore prone to become martyrs in this holy war against them. Hence the terrorist barbarians are not at the gates of civilization but inside its gates

September 11 was a wake up call to all governments of the democratic world to the mortal threat that Muslim fundamentalists posed to their peoples. However, despite the exploding sound of this call, only a few governments are willing to recognize this great danger -whose gathering dark clouds teeming with lightning bolts are hovering over the cities of the world threatening their peoples with total annihilation -and stand-up against it. Apparently, only a handful of them have the intellectual capacity, imagination, and historical insight to perceive this great danger, and the resolve and moral mettle to take the necessary relentless measures and actions to prevent this catastrophe of biblical proportions from happening. America, Britain, Australia, Italy, Poland and the thirty other countries who have deployed their armed forces to fight global terror in Iraq under their politically and morally strong and historically savvy leaderships, will be acknowledged and renowned by history as the countries that saved Western civilization from this lethal attack by this horde of fanatically necrophilous barbarians. The no quarter given, relentless retaliation of these governments to this existential challenge of global terrorism to the civilized peoples of the world, will be totally justified by future historians, as has been the stand of those nations who fought against Nazi and Communist totalitarianism and who made the necessary and stupendous sacrifices to save the world from these two regimes of evil in the Twentieth century.

DESPITE US ERRORS AN WITHDRAWAL IS UNTENABLE

Even if one concedes that serious mistakes have been made by the Americans post March 2003 after the defeat of Saddam, which was part and parcel of the war against global terror, such as indiscriminately disbanding all Iraqi military units, and not dealing with the incipient insurgency of urban terrorists last April by using overwhelming force against it and nipping it in the bud, instead of ceasing their military offensive, as they did in Fallujah, and passing the control of that city to a former Iraqi general, who proved to be completely inept in disarming the insurgents. The strategic goal of the military planners against the insurgency, should have been the prompt and devastating defeat of the insurgents in this city, either by their mass capture or mass annihilation, which would serve as a deadly example to all other insurgents in other hot-bed provinces in Iraq, with the high probability that this would have led to their complete demoralization and surrender, as I had suggested in a previous paper of mine last April, which was sent to the U.S. Embassy in Canberra. (It seems now that the Pentagon is using exactly this strategy, as the capture of Samarra by American and Iraqi forces and the elimination of the insurgents, has shown.) 

As the outcome of this erratic implementation of the Pentagon's military plan, by starting an offensive against the insurgents and then stopping it halfway before achieving its goals, Iraq has now become "the crucible of global terror", to quote Tony Blair. This is the glaring fact that all governments who have committed themselves to fight global terror are presently confronting. To turn tail and run now from Iraq would not be merely foolish, it would be the greatest military error against the war on terror, as it would deliver a tremendous victory to the terrorists on a global scale. It would reinforce in the minds of the terrorists, as the withdrawal of US forces from Beirut and Mogadishu had done, as a result of the casualties Americans had suffered in these two cities, by presidents Reagan and Clinton respectively, that America and other Western nations lack the resolve to stand-up to them and fight, and will induce them to be even more lethally aggressive against the 'cowardly' West. Hence the critics and opponents of the war, who blame the Bush administration for exacerbating terrorism in Iraq and call for the US withdrawal from Iraq, are purblind and cannot see that such action would be the greatest error that one could commit against the war on global terror. It would surpass by a great order of magnitude all the mistakes that the Pentagon committed in Iraq. 

If indeed the opponents of the war are right, that the US incursion of the country and the overthrow of Saddam has strengthened and intensified terror in Iraq, then the reasonable course for nations who believe that there is no other alternative but to fight and defeat this global menace, would be for these nations to deploy their armed forces in Iraq and inflict a deadly blow on global terrorism, by defeating the insurgents decisively. Or if they are unwilling to spill the blood of their own soldiers, they should at the least support morally and politically the soldiers of the nations, i.e., the American - led coalition, who are brave enough to sacrifice their own lives in the cause of global security and freedom. This would be the wise course to follow, to correct the mistakes of the Americans, instead of aggravating and compounding these mistakes, by running away from Iraq, and in spite of these errors (in all wars errors are made ), to unflinchingly support America in this historic and deadly confrontation with these medieval barbarians, whom only America's military might can defeat comprehensively, among all other nations in the world. 



THE ENEMY WITHIN 

But the war against global terror and Muslim fanaticism will not be won, unless the governments who have pledged themselves to fight global terror also deal with and tackle the cunning and deceitful enemy that lies within their borders. To carry out this far from easy task, these governments have to realize that they can no longer be tolerant, on the basis of laws of non-discrimination on religious grounds, to the breeding grounds of terrorism that entangle, ivy-like, the edifices of Western cities, i.e., the mosques and Islamic schools, of whom a minority of, but highly influential, imams and teachers, preach hate against the mores of Western civilization and of their peoples, inciting young Muslims to enlist in a holy war against the Great Satan, America, and on all other nations that embody the cosmopolitan values of Judeo-Greco-Roman civilization.

The cardinal question therefore is, how to sterilize and make barren the breeding grounds of terrorism that are ensconced in the cities of the West whose deadly offspring are the enemy within. Since the idea of repatriation and resettlement by means of a monetary incentive for millions of Muslims, who have now made their home in Western countries, is no longer feasible - fathered by that prophet of British politics Enoch Powell, who in his Birmingham "Rivers of Blood" speech on April 20 1968, clearly and ominously predicted the deadly conflicts that would arise between Britons and British citizens of colonial background who had settled in England, and who with prescience had opposed the so called humanitarian immigration policies of both Labor and Conservative governments - one has to consider other lines of action. One of them would be the immediate cessation of funding these mosques and schools by governments, unless the former adopt in their curricula a primary undiluted course of 'no leaks' assimilation for their students to the mainstream culture of the nation that they have chosen freely to live in, and put an end to all 'traffickers' of the disastrous policy of multiculturalism, which with mathematical precision divides a nation. 

Another one would be the swift passing of special, indeed emergency, legislation that would make it easier for the police and for the relevant government officials to jail or deport, radical imams and teachers who propagate, either openly or cunningly and insidiously, a holy war against the West. 

Furthermore, to attenuate and diminish the high birth rate of Muslim families, governments should introduce a policy of negative incentives, which could stop this high birth rate such as paying to all families of the nation, children’s allowances up to the number of four children. Any children born beyond that number would not be entitled to any allowances. Nor would any allowances be paid to children born from a second marriage, whose fathers or mothers already have four children from their previous marriages. This measure would bring the birth rate as close as it is possible to the common standard of Western societies and to the ethos and aspirations of motivated modern nuclear families. It would also stop the 'racketeering' of phony separations and single motherhoods, whose deliberate purpose is to abuse and defraud the system of family payments, and whose side - effect is, the perennial continuation of voluntary unemployment among this group of men and women. 

Undoubtedly, these harsh measures will raise a hurricane of protests from Muslim organizations of the diaspora and from Muslim states. This will be followed by a chorus of international lawyers and of the liberal intelligentzia from the well-heeled countries of the West, who will denounce these measures as brutal and heartless to poor families, viciously racist, and chauvinistic, striking a terrible blow to democracy and opening the way to an authoritarian state and even worse. But this soft potpourri of legal and intelligence gnomes are unwilling to recognize, and it might be beyond their depth, that the grossly mistaken immigration policies of the nations of the West are now coming to haunt them with their destruction. And the only way to prevent this destruction is for the governments of these nations to take tragically severe measures to correct this gross mistake of past governments that now threatens their peoples with extinction, either by weapons of mass destruction or by the upshot of demographics. 

DEFEAT OF TERROR LIES IN ITS LACK OF SUCCESS

One must recognize that the terrorists are technically educated barbarians, with PC's in one hand and with the distorted fragments of the Koran in the other - who consider it to be the only fountain of knowledge - lacking the open- mind of a universal education; unread in the great writings and literature of all peoples and of all ages; mentally untouched by their rich Arab culture, literature and philosophy; unread in the great philosophical writings of Al-Farabi, who placed rationality above the revealed truth of the Sharia nor in the equally brilliant writings of Ibn-Sina (Avicenna ) and of Ibn-Rushid (Averroes ), who both placed human reason above religion, and of Omar Khayyam, who never believed in Providence or in any other World but this one, valuing the sensual pleasures of this world as the fill to the brim of life. Being ignorant of the existence of this great Arab intellectual treasure, that was an essential element of the cornerstone of Western civilization and of the Italian Renaissance, their minds locked in the fanaticism of fundamentalist Islam and its death-cult, they have no respect for any other peoples' religions except their own. Instead they zealously believe that the followers of all other religions are destined to go to hell and only Muslims will enter the gates of infinite paradise, especially if they are anointed by martyrdom. It is of such stuff that these implacable enemies of Western civilization are made. 

Confronting such suicidal fanatics, who fervently believe that the West and its Great Satan, America, are responsible and culpable for all the ills that have befallen upon Muslim countries; determined to destroy this source of evil by chemical, biological and nuclear weapons, as soon as they are in their possession, the political leaders of the West, and especially of America, are deprived of any soft options and are forced to take on the hard option of the "unsheathed sword". 

The art of diplomacy, the laudable deliberations of the United Nations for peace making, which could be effective when one deals with a rational foe, are totally ineffective when one confronts an irrational enemy, whose only 'rational' communication, in his hearing, is with God. That is why the academics who teach their students the 'management' of terrorism by a diplomatic demarche as the only rational way to counter and thwart it, rather than war, which is so costly in human and economic terms and without making certain its defeat, are not only starry-eyed, but also debar themselves from the disciplines of politics and of war strategy. Management presupposes and involves rational processes, which to the terrorists is terra incognita, and therefore with algorithmic precision is bound to fail.

But wherein lies the answer to this conundrum of how to defeat global terror and its state sponsors? History's edict provides the clear and indefeasible answer to this intricate issue. When a nation fights a swarm of religious fanatics, depriving these fanatics of the ability to launch successful operations against their enemies is the most effective way to defeat them, as the terrorists, being no longer successful in their attacks against the West and in their attacks against the American-led coalition in Iraq, will find the "mouse of doubt" implanted in their hearts (a doubt whose epiphany will reveal to them, that after all they might not be in God's favor) gnawing, slowly but surely, at their belief that they are the instruments of Allah. This, in itself, will compel them to abandon their cause.

This is why the successful outcome of the war in Iraq for the U.S. - led coalition and the introduction of democracy to its ravaged people, is of such vital importance. The decisive defeat of the terrorist insurgents will unfold a dawn of a bright future for the people of Iraq, and also commence the beginning of the quick end of global terror.

I rest on my oars:Your turn now
This paper was written on
October 9, 2004

MELBOURNE AUSTRALIA