The Bloom May Be Off the Bloom Box Fuel Cell because the Politicians Cluster Around.  A Farce in the Making? II: Update

I must include an analysis of this Bloom Box from [1] By Chris Nelder. He has more extensive research on the details and we now find out this runs on natural gas. He raises some of the same questions I did below with these salient additions to mine:[2]

[1] “One cell produces 25 watts. A "residential sized" stack of cells produces 1 kilowatt (kW), which Sridhar claims could be on the market at a price point of $3000 in five years.”-- Is the Bloom Box Energy's Holy Grail? By Chris Nelder Friday, February 26th, 2010 [Emphasis is mine in all quotes.]

[2] “First, a 1 kW unit isn't enough to power a house in the U.S. I know from my experience in the solar business that 2.5 kW on an averaged demand basis is more like it. [now $7000 plus cell replacement costs e.d. so payback will be 15 years or longer]

[3] “Second, since nearly all customers will run the unit on natural gas, it doesn't fulfill the claims of clean, abundant, or cheap power.”

[4] “The short lifespan of the device and the need to swap out the cell stack every five years must be factored in as well. The cost of maintenance and the availability of service technicians are important questions that still loom over the Bloom.”

[5] “I remain staunchly rooted in numbers and of the mind that it's better to have no hope than false hope, because it pushes us toward real solutions.”

Right On Chris!! 

Previous blog:

Want to see a scam in the making? You have only to look for places where flocks of politicians cluster to get some face time and show their feathers.  The scam usually unfolds by first offering something that is too good to be true and then the suckers are all serviced by attendant groupies trained in both bordello and political tactics until the bloom is off the onion, economic realities set in, and the suckers can face the Magic Mirror on the wall without blushing.

Such a potential scam is roiling up in California over a new fuel cell that offers electricity at a fraction of the cost from the power grid. This new gadget may be a quantum leap beyond what we now have and many homes and businesses might well buy these and save on energy costs and also meet stringent emissions standards for pollutants and non pollutants such as carbon dioxide. We shall see. We should note that fuel cell technology dates back way beyond a hundred years.

First, we need to ask some hard questions and see if the barkers blush or evade the probes. If they turn tail and resort to bold rhetoric, wild promises or the testimony of politicians or attempt to hide critical costs then we know we are on our way to a Coney Island Freak Show. Let us reserve judgment and ask the pertinent questions and then wait for a response. We can then find out.

From previous experience:

“The quest for cheap energy by the rabid left has fashioned such follies as Cold Fusion [3], the counterfeit Bluewater Wind platforms[4] that might generate electricity at $ 0.12 per Kwh, probably more,  while currently we get it form coal at $0 .03. Then there is the question of solar energy. The ugly facts here are that these ‘alternative’ forms of energy are very expensive and highly inefficient.  A trip to Home Depot in 2006 to look at solar power systems for an average house shows that they could supply, at best, 25% of the power consumed in the home, about $600 worth of electricity per year in Mid Atlantic terms.  But, this would cost $14,000 to install the solar collectors.  That modification requires a 25 year payback period, which does not include financing, which could push it to 40 years. And, who would believe that such a device would even last 20 years? Those kinds of economics make sense to the political hacks at the New York Times. “It’s for the children.” Let us all freak out and bawl about global warming.”[5] Bluewater Windmill Follies has pushed up the cost to 14.75 cents now in Delaware.

Here is the potential chum:

“Computerworld - A Silicon Valley start-up is getting ready to unveil an energy device this week that executives say could one day power individual homes and businesses while replacing the traditional power grid.

“Bloom Energy, one of the 26 companies named in the World Economic Forum's list of top 2010 Tech Pioneers, took some of the wraps off its Bloom Box in a story that ran last night on the CBS TV newsmagazine60 Minutes.:” [6]-- Fuel cell of the future promises cleaner energy

By Glenn Chapman February 25, 2010 - 2:26PM

Here is the juicy claim:

“Electricity generated by Bloom servers costs about nine cents per kilowatt/hour as opposed to the 14 or 15 cents typically charged here by utilities.”-- Fuel cell of the future

Then, a few caveats start to be almost mentioned:

“The cost of the servers is recovered in three to five years by energy savings, Sridhar said. The servers are guaranteed for 10 years. Sridhar would not disclose the life spans of the fuel cells.”-- Fuel cell of the future [Emphasis is mine in all quotes.]

Now, we need to ask some serious questions:

[1] If the fuel cell can deliver at 9 cents can this efficiency be maintained at all levels of power load? According to the experts[7] the efficiency of the cell drops with power output. We need to see “…graphs of voltage versus current (so-called polarization curves)…” [for these] fuel cells.  Are they available? What if the voltage drops at a mere 20% load and the cost rises above the average 9 cents? How high does it go? If we cannot depend on this device delivering electricity at a cost of 9 cents with a 90% load then this may be just another shiny walnut shell in the usual Three Card Monte game.[8]

[2] How long does this cell last? If we look at the financials of this device, the path to break even on a cost basis is the total cost of the device with installation and financing amortized over the expected lifetime of the device with repairs and component and periodic fuel replacements included in the calculations.

[3] Is it cost-effective everywhere? The average of the cost of electricity per Kwh in the entire United States is 11.76 cents per kilowatt-hour.[9] This is an average compiled from all US states that range in cost from a high of 26.45 in Hawaii, 19.17 in New York State, 14.75 in Delaware to 9.58 in Indiana, 8.39 in Missouri, and 8.15 in Idaho. California is 14.08 the highest on the West Coast.

What bothers me is the presence of Arnold and Powell as this circus celebration may turn out be just another Colonic Discharge[10] to soak the voters with another phony social program.

We need to press the makers of this cell for pertinent facts on costs and lifetimes and efficiency before we throw some more taxpayer’s money into the latrines.

rycK

Comments: ryckki@gmail.com

The Bloom May Be Off the Bloom Box Fuel Cell because the Politicians Cluster Around.  A Farce in the Making?

Want to see a scam in the making? You have only to look for places where flocks of politicians cluster to get some face time and show their feathers.  The scam usually unfolds by first offering something that is too good to be true and then the suckers are all serviced by attendant groupies trained in both bordello and political tactics until the bloom is off the onion, economic realities set in, and the suckers can face the Magic Mirror on the wall without blushing.

Such a potential scam is roiling up in California over a new fuel cell that offers electricity at a fraction of the cost from the power grid. This new gadget may be a quantum leap beyond what we now have and many homes and businesses might well buy these and save on energy costs and also meet stringent emissions standards for pollutants and non pollutants such as carbon dioxide. We shall see. We should note that fuel cell technology dates back way beyond a hundred years.

First, we need to ask some hard questions and see if the barkers blush or evade the probes. If they turn tail and resort to bold rhetoric, wild promises or the testimony of politicians or attempt to hide critical costs then we know we are on our way to a Coney Island Freak Show. Let us reserve judgment and ask the pertinent questions and then wait for a response. We can then find out.

From previous experience:

“The quest for cheap energy by the rabid left has fashioned such follies as Cold Fusion [1], the counterfeit Bluewater Wind platforms[2] that might generate electricity at $ 0.12 per Kwh, probably more,  while currently we get it form coal at $0 .03. Then there is the question of solar energy. The ugly facts here are that these ‘alternative’ forms of energy are very expensive and highly inefficient.  A trip to Home Depot in 2006 to look at solar power systems for an average house shows that they could supply, at best, 25% of the power consumed in the home, about $600 worth of electricity per year in Mid Atlantic terms.  But, this would cost $14,000 to install the solar collectors.  That modification requires a 25 year payback period, which does not include financing, which could push it to 40 years. And, who would believe that such a device would even last 20 years? Those kinds of economics make sense to the political hacks at the New York Times. “It’s for the children.” Let us all freak out and bawl about global warming.”[3] Bluewater Windmill Follies has pushed up the cost to 14.75 cents now in Delaware.

Here is the potential chum:

“Computerworld - A Silicon Valley start-up is getting ready to unveil an energy device this week that executives say could one day power individual homes and businesses while replacing the traditional power grid.

“Bloom Energy, one of the 26 companies named in the World Economic Forum's list of top 2010 Tech Pioneers, took some of the wraps off its Bloom Box in a story that ran last night on the CBS TV newsmagazine60 Minutes.:” [4]-- Fuel cell of the future promises cleaner energy

By Glenn Chapman February 25, 2010 - 2:26PM

Here is the juicy claim:

“Electricity generated by Bloom servers costs about nine cents per kilowatt/hour as opposed to the 14 or 15 cents typically charged here by utilities.”-- Fuel cell of the future

Then, a few caveats start to be almost mentioned:

“The cost of the servers is recovered in three to five years by energy savings, Sridhar said. The servers are guaranteed for 10 years. Sridhar would not disclose the life spans of the fuel cells.”-- Fuel cell of the future [Emphasis is mine in all quotes.]

Now, we need to ask some serious questions:

[1] If the fuel cell can deliver at 9 cents can this efficiency be maintained at all levels of power load? According to the experts[5] the efficiency of the cell drops with power output. We need to see “…graphs of voltage versus current (so-called polarization curves)…” [for these] fuel cells.  Are they available? What if the voltage drops at a mere 20% load and the cost rises above the average 9 cents? How high does it go? If we cannot depend on this device delivering electricity at a cost of 9 cents with a 90% load then this may be just another shiny walnut shell in the usual Three Card Monte game.[6]

[2] How long does this cell last? If we look at the financials of this device, the path to break even on a cost basis is the total cost of the device with installation and financing amortized over the expected lifetime of the device with repairs and component and periodic fuel replacements included in the calculations.

[3] Is it cost-effective everywhere? The average of the cost of electricity per Kwh in the entire United States is 11.76 cents per kilowatt-hour.[7] This is an average compiled from all US states that range in cost from a high of 26.45 in Hawaii, 19.17 in New York State, 14.75 in Delaware to 9.58 in Indiana, 8.39 in Missouri, and 8.15 in Idaho. California is 14.08 the highest on the West Coast.

What bothers me is the presence of Arnold and Powell as this circus celebration may turn out be just another Colonic Discharge[8] to soak the voters with another phony social program.

We need to press the makers of this cell for pertinent facts on costs and lifetimes and efficiency before we throw some more taxpayer’s money into the latrines.

rycK

Comments: ryckki@gmail.com

Deflation and Defaults: The Path Downward from Debt and Excessive Spending.

Abstract: The answer to the question whether any economy is experiencing inflation or deflation depends critically on precise data on prices and the money supply. Since the US system uses masked or archaic methods to determine these parameters the question cannot be easily answered until one effect or the other becomes obvious from wide changes in prices or the money supply. Furthermore, the assessment of sovereign debt is difficult as the Fed can print money off-balance sheet. Our debt levels are outrageous and now approach 100% of our GDP while our deficit ranks up there with tottering states like Iceland, Greece, Britain and Spain. They are also locked in a socialist spend mania where the loss of political power can only happen when spending is cut.  California has now decided to ‘wait’ and see if they get some federal alms of almost 7 billion dollars and hope that their tax revenues will increase as they willingly drive businesses out of the state with high taxes, fees and anti-capitalist bias.  Thus, we are in some grey area in terms of inflation or deflation but that matters little as the continuation of our current spending is terminal in inflation terms. We will default on our debt along with many other countries either piecemeal as in the cases of California and New York or as a federal union. We are all locked into socialist governments now and they will not cut spending as they are dominated by greedy unions or in power. Those greedy unions will strike and prevent spending cuts thus resulting in more borrowing and more debt.

The topic of deflation, in particular, always induces a contentious political and economic dispute[1] consisting of those players who insist this phenomenon is in progress, and can actually prove the existence thereof, in a fierce battle with the opposing forces who insist we are inflating. The analysis process to solve this riddle is seemingly wrought with technical difficulties because there are many varied financial inputs and calculations that must be assessed by the jury in this trial until a final verdict is returned. It appears that identical economic elements can be used to argue either case thus leading to a conundrum.

Lessons from the Great Depression: The Deflation fundamentals from Irving Fisher:

“Following the stock market crash of 1929 and the ensuing Great Depression, Fisher developed a theory called debt-deflation. According to the debt deflation theory, a sequence of effects of the debt bubble bursting occurs:”[2]

1.     Debt liquidation and distress selling.

2.     Contraction of the money supply as bank loans are paid off.

3.     A fall in the level of asset prices.

4.     A still greater fall in the net worth of businesses, precipitating bankruptcies.

5.     A fall in profits.

6.     A reduction in output, in trade and in employment.

7.     Pessimism and loss of confidence.

8.     Hoarding of money.

9.     A fall in nominal interest rates and a rise in deflation adjusted interest rates

Is there anybody reading this who can not see all of these nine points not glare out from this page if you are watching our economy? So, the forces of disinformation are now aided by politics and thus surge forth to ‘correct’ the deflationary model alarm and attack its adherents.[3] We are certainly deflating as the fed threw some 7.36 trillion dollars into the rescue pot that we know of.[4] This was in September of 2008 and the money supply M2 only budged from about 7.95 trillions to 8.4 trillions months later suggesting that this money was swallowed up in  some financial black hole.  M3 was masked so we cannot add in certain credit items that contracted with the financial crisis in September 2008.

Arguing for deflation in addition to Fisher’s Nine Points above,  we can look for four factors: a decrease in the CPI [Consumer Price Index[5]], hoarding of money, decreases in bank credit and the more unusual case of Confiscatory deflation whereby deposits are frozen or attached. That hasn’t happened yet as banks that experienced active runs such as Wachovia and Indy Mac[6] were rescued.  Arguing for inflation in a given case we should look for the diametric opposite change in the price of goods and services—increasing  prices rather than falling—and an increase in the money supply M2. Here is where the elegant simplicity of this apparently simple algebraic exercise fails because exact estimates of prices and the true money supply are influence by politics, questionable algorithms for their determination and other matters. It turns out that ‘money’ has four categories all rather independent:

M0: The total of all physical currency, plus accounts at the central bank that can be exchanged for physical currency.

M1: The total of all physical currency part of bank reserves + the amount in demand accounts ("checking" or "current" accounts).

M2: M1 + most savings accounts, money market accounts, retail money market mutual funds, and small denomination time deposits (certificates of deposit of under $100,000).

M3: M2 + all other CDs (large time deposits, institutional money market mutual fund balances), deposits of Eurodollars[sic]  and repurchase agreements.

Unfortunately for the purist, the money [M to be general] here is difficult to assess as the government ceased to publish M3 for some reason, probably political.  M2 is published and is about 8.4 trillion at this writing. So the quest for accurate prices is complicated by the fact that the CPI is wrought with calculation difficulties such as using critical mathematical weights and assumptions for an entire decade thus ignoring numerous current price effects from the introduction of new products or from consumers switching purchase choices among similar commodities.[7]

This means, quite simply, that the absence of precise data reduces the argument to a level of absurdity until the pertinent numbers become very large. Since there is confusion and uncertainty any politician can make a grand case for either process being currently dominant or the equally rational case that neither is present. Since the current position is hazy the prospect of spending aids those in office.

Now, excessive debts influence the money supply and prices and can, theoretically, force deflation or inflation from the direct effects of government’s attempts to correct for economic problems.  Here, we must include an accurate assessment of debt and this quest becomes as difficult as the calculation of prices or the money supply. For example, we recently found out that Greece hid their debt. Rogoff “speaking in Tokyo,  actually used the phrase "out of control" to describe Japanese fiscal policy (debt to GDP is over 200% there), but also focused on Greece, the EU, and the U.S.[8] We have no idea how much money the Fed has spent off-balance sheet and cannot know what the FOMC[9] is buying or selling.

Excessive spending with funding by borrowing creates asset bubbles and when these burst wealth is summarily lost thus decreasing the possibility of addressing the debt and frequently prompts the printing of money to mollify the problem.  I predict California is building its own ‘green’ asset bubble by forcing higher energy costs with solar collectors and windmill machines using deficit funding.[10]Such an asset bubble is presumably starting to reach a critical phase in China[11] according to Kenneth Rogoff coauthor of the new book This Time is Different: Eight Centuries of Financial Folly with Carmen M. Reinhart.[12]

Debt is economically and politically dangerous and here is a quote[13]:

“Feb. 24 (Bloomberg) -- Ballooning debt is likely to force several countries to default and the U.S. to cut spending, according to Harvard University Professor Kenneth Rogoff, who in 2008 predicted the failure of big American banks.

Following banking crises, “we usually see a bunch of sovereign defaults, say in a few years,” Rogoff, a former chief economist at the International Monetary Fund, said at a forum in Tokyo yesterday. “I predict we will again.””-- Harvard’s Rogoff Sees Sovereign Defaults, ‘Painful’ Austerity [Emphasis is mine in all quotes.]

Now, when the Core CPI[14] changes abruptly from some long term trend then the experts become upset. We can read dire warnings from Michael A. Kamperman  on this matter:

“The Core CPI index was reported as minus .1%.  This is the first time since 1982 the core rate has been negative.  It won’t be the last.  We are in store for many more negative Core CPI readings over the next couple of years.  Housing costs in the form of rent and owner’s equivalent rent make up over 40% of the Core CPI rate.  While the government should be using an estimate of actual home prices to calculate the cost of home ownership, it remains wedded to the concept of using owner’s equivalent rent  which was introduced in 1983.”[15]-- More Core CPI Deflation is Inevitable [look at his charts at this link]

Thus the Core CPI is ignoring the house asset bubble in some respects as it offered the false indication that home ownership was rising based on rent estimates.  For proof of this, today, the US stock market dived briefly as “… the Commerce Department reported that new-home sales skidded 11.2% in January from December. Economists had expected sales would rise 3.8%. The drop erased all gains made in the housing market during the past year.”[16]

As for spending we hear:

“Although the federal funds rate is likely to remain exceptionally low for an extended period, as the expansion matures, the Federal Reserve will at some point need to begin to tighten monetary conditions to prevent the development of inflationary pressures,” Mr. Bernanke said in a prepared statement.”[17]-- Bernanke Reaffirms ‘Extended Period’ of Low Rates

February 24, 2010, 10:24 AM 

This spending is what is driving our deficit into an ocean of debt[18] and we rank high amongst the list of other losers who may soon default on their sovereign debts:

* Figures from OCED forecast in November 2009. [19]

The debt is crushing. Since there are only 65 million workers to handle 12 trillion dollars in National Debt [soon to be 14 and rising] and only half of them pay taxes above the median of $32,000 then this works out to $192,000 each for these workers and that ignores Social Security, Medicare, Medicaid and state debts.[20][21] But, there is no signal to stop spending even th0ugh massive debts cannot be managed without gifts as we see in the Greek Case, soon to bring at least some of the EU architecture crashing down:

“It has three main aspects. The first is the well-known fiscal bit. The Greeks have overspent and over-borrowed. Now they face national bankruptcy. The EU offering loans will buy time but won't solve the underlying problem. If it makes gifts – thereby effectively making Greek debt its own – it will encourage other countries, especially Spain, Italy and Portugal to behave in the same way. In this case, the credibility of the euro in the markets will be shredded and support for the currency in the rest of Europe will crumble. As the ECB's former chief economist put it last week, why should German taxpayers fund excessive Greek public sector pensions?”[22]--The current Greek crisis is merely act one of a much wider tragedy By Roger Bootle Published: 9:15PM GMT 14 Feb 2010 [Emphasis is mine in all quotes.]

Does this sound like the California, New York, New Jersey drama with the federal government?  This Greek Problem reminds me of California[23][24][25][26] [Our National Leper[27]] and its incompatibility with financial fitness, morality, sobriety and society.[28] How do you narrow economic differences between prudent states and cavalier spendthrifts?  None of these states can even imagine how or when their debts will be paid off. California now hopes for a miracle in revenues and will ‘wait.’ The federal stimuli had a very short and shallow effect on the economy. Attempts to provide “stimuli” lead to disasters like the previous ‘jobs’ program that spent $92,000 per job![29] And, then, we spent $24,000 per car on the Clunker Follies and a mere $43,000 per house on the housing scam. [30] This is a farce.

“Officially, the state has another gap of about $20 billion, and Schwarzenegger has proposed a budget that relies, incredibly, on getting an extra $6.9 billion in federal aid. But the Legislature, while making some moves on the current year's shortfall, appears to be joining Schwarzenegger in the "rosy scenario" approach.

While Schwarzenegger hopes for a federal bailout, Democratic legislative leaders are hoping that a surge in revenue in January is a portent of economic recovery that would soften otherwise deep cuts in health, welfare and education spending.”[31]-- Dan Walters: Rosy scenario peddled as California budget savior [Emphasis is mine in all quotes.]

This is insanity. And what, might we ask, would California or Greece do about a similar or larger budget deficit in 2011? Oh, they would address that! Sure.  The unions have strangled California, Greece, other failing parts of Europe, New York State, Michigan and other entities.

All they can do is tax and spend and they cannot, as yet, tax but they will try soon.

All the Rogoff/ Reinhart warnings are lost in the shuffle to grab and sustain political power. We know that socialist governments can only sustain their power by continuous spending and that means spending other people’s money. We are on the same path as the U.K. and Greece and will experience the same fate and pay the same price: poverty and chaos.  We will default soon with the government’s cleptocratic method of controlled inflation then Asia will halt buying our debt and we will have to print more money leading to more inflation and so on and so forth.

Those who make such decisions in Washington and Sacramento have to be voted out at all costs.

rycK

Comments: ryckki@gmail.com

The British Left Now Hail the Expert Advice of Keynesian Economists: Spend More and More. New Political Support for California’s Spending Revealed.

Abstract: A socialist politician has secured the advice of several Keynesian economists to keep on spending for the good of the British subjects and reject a plan by the opposition for any deficit reduction at that time. Joseph Stiglitz leads the charge to support Brown’s massive spending drama that will bankrupt the British economy and bring more chaos in the EU as if the  current financial woes of Greece and Spain were not enough to sink the European Union. Wondering about his credentials and ability to help out, we find that one of Stiglitz’s hand maidens, Peter R. Orszag, now Director of the Office of Management and Budget for Obama, previously joined with Stiglitz in 2002 to tell us that Fannie Mae and Freddie Mac were sound and wouldn’t fail.  California needs to enlist either of this pair to educate the people of California on the urgent need for more spending so they can finesse the debt and enjoy more marijuana. The teachings about debt that crashed Iceland, Argentina, Brazil and others in the past are being rewritten with novel nuances on how massive spending is necessary at all costs. This folly will crash most of Europe thus giving them ample proof that capitalism has failed so the leftist government can nationalize everything and bring peace and prosperity though Marxism or some similar variant.

Addiction to bad advice is a mental problem:

There is a dependent psychological aberration in which the clinical mental patient can always justify their atypical behaviour by citing some appropriate ‘expert advice’ from some obscure source.  Thus, any action is deemed positive by the patient and thus decidedly advisable in his cloudy mental state and this builds self confidence, attracts friends and admirers who can now testify to his competence and forward vision and offer support along with more similar advice. This affliction seems to be more prevalent in politicians as a cadre of such experts seems to spontaneously blossom and haunt the core leadership of any party so as to be able to supply wonderful scenarios for just about any political choice the leader must make. “God told me to do this” is frequent claim that is difficult to refute and can be compared with the also effective “I hear voices and they tell me to do…whatever.”  Gordon Brown can now attest that Nobel Prize laureate Joseph Stiglitz told him to do it. Arnold Schwarzenegger needs to pay close attention to this notion as he needs experts of this caliber.  Arnold should not accept any “loosey goosey[1]" criticisms of spending and taxation encouraged by the drug-crazed left in Sacramento without experts to stand at his back. Go ahead and spend more and lift California[2][3][4][5] [Our National Leper[6] and counterpart of Greece] into prosperity they chant. Experts and advisors have an interesting history of assisting their charges:

Hitler, for example, listened attentively to his astrologer Ernst Krafft while the British also had their own specialist Louis de Wohl at hand to divine what the paper-hanger-turned-politician was up to.[7] Sometimes the mentoring process leads to some final outcome that makes one wonder exactly what the specific advice was as in several cases such as: Oliver Wendell Holmes, Jr. (former US Supreme Court Justice) mentored the criminal and Soviet spy Alger Hiss[8] (lawyer, peace activist),  how Malcolm X might have  advised Louis Farrakhan in various matters or we can cite the strange case of the interactions among Julius Caesar,  Mark Antony and Caius Trebonius[9], who distracted Mark Anthony outside the Senate during the March assassination.[10] Sometimes the details of the advice seem to have been lost in the shuffle of politics as there is little to connect Augustin de Robespierre’s apparent mentoring advice that might have influenced the life and times of Napoleon Bonaparte if we look at the respective outcomes of this pair.

A cynical scenario[11] thus springs forth from all this in the form of reasoning that any politician can conjure any ‘plan’ from the vapors, the  wraithlike lights or from the crass requests from  his patrons or handlers  and then identify some stooge masquerading as a ‘expert’ who will sanctify the plan with pomp and circumstance and proudly justify its implementation.

Today, we inspect the curious advice given Gordon Brown by a group of some 60 ‘economists’ who now advise the continuation of massive government spending:

“''They are using the talk of action on debt to conceal the hard fact that their real position is that they remain wedded, as they have always been, to an ideology that would always make government the problem and deny people the helping hand that government can be.''”[12]--Gordon Brown warns voters of Conservatives' ideological 'hatred' of the state Telegraph 19 Feb 2010 [Emphasis is mine in all quotes]

I wonder if we could include Stalin or Lenin when talking about helping hands. We can be assured that the government is not the problem in this case because Gordon Brown tells us so in flat terms. It never is. This is a classical diversion technique used in advanced propaganda missives. Here the prospect of debt burying the sovereign state and threatening sovereign default, as is the case in Greece[13] and Spain, is being masked with oratory and Broadway Bravado whereas the opposition is blamed for threatening the future of the good people. Brown must be doing the right thing and he has experts to testify to this fact in public!

Blame the opposition:

“''Instead of helping the recovery in our country, Conservative dislike of government, bordering on hatred of government action, would risk recovery now,'' he said”-- Gordon Brown warns voters

Brown claims that cutting spending would put the people at risk in terms of the ‘recovery.’ It turns out that this list of 67 economists refutes a previous list of 14 economists who supported the opposition with recommendations to cut spending.[14] They win by the vast majority. We have the battle of the experts to witness to the truth! Which truth side do we choose? It is interesting that Stiglitz[15] gained fame for his criticism of markets that was attributed to the  lack of precise information  by participants  in those  markets thus inducing inefficiencies and hence the obvious need for government intervention. He also lectured numerous times and shares a book with Peter R. Orszag “…that the risk to the government from a potential default on GSE [Fannie Mae and her challenged little brother Freddie Mac e,d.] debt is effectively zero."[16] Orszag is currently Director of the Office of Management and Budget under President Barack Obama. Does he support the massive US spending with TARP and stimuli and jobs programs and clunkers and all that? Can there be a coincidence here?

Can Brown take advice from California or conversely?

“California's situation in some ways is more worrisome than Greece's. Having a state that is one-seventh of the national economy in dire straits is a threat to the nation's economic recovery. It is analogous to having Germany struggling instead of Greece, striking at the heart of Europe.”[17]-- Lessons for Europe from California The financial aftershocks being felt in Greece will show the EU what 'union' really means By  Steven Hill,  guardian.co.uk,  Wednesday 17 February 2010[Emphasis is mine in all quotes]

“But California and the US do have one advantage over Greece and the European Union. Certainly Europe has the capacity to handle this crisis – its economy is nearly as large as the US and China combined – but that's only if its big euro zone economies, Germany and France, are willing to lead. While the American federal government is used to playing the role of financial backstop for the states, making loans and other guarantees to weaker EU members is a new role for Germany or France to play.”-- Lessons for Europe from

The garbled message from the  leftist Guardian is hereby deciphered to enlighten us that: somebody ought to bail out these entities and maintain their jobs, healthcare desires and the status of their illegal aliens and must find the money somewhere  to do so.  The notion that Europe can ‘handle this crisis’ apparently is derived from estimating how much wealth France and Germany have  and offering a significant fraction of that sum to the Greeks as gifts. The essay also appears to omit the salient fact that Spain [with 20% unemployment and 7 continuous quarters of negative growth to mention a few problems[18]], Portugal, Ireland, Italy and some neighbors in the area of Old Prussia need help as well. The article also reaches back to the idea that California receives only 0.80 return on federal taxes while other states get more thus implying some latent debt that might be repaid like the Greeks asking for more reparations from World War II.  I wonder if the federal government would have any revenues if all the states received 100% of their tax contributions. Perhaps Alabama can hustle up some speedy reparations for California as settlement for their ‘sins of the past.’ This is also a bold and unsubstantiated proclamation since the US is now nearly 14 trillion in national debt alone and struggling with some 30 trillions in Social Security liabilities and some think that is a lot 0f money since the net worth of all our citizens is only 54 trillions. US national debts are massive and Californian bears a massive load of debt of its own.  Maybe California and Greece can simply swap debts, mutually default on the loans and null them out!

The tax load:

Since there are only 65 million workers to handle 12 trillion dollars in National Debt [soon to be 14 and rising] and only half of them pay taxes above the median of $32,000 then this works out to $192,000 each for these workers.[19] California has 36,756,666 million people while the US has 304,059,724 with about 65 million total workers above the median.[20] Thus California has about 12.1% of those workers and since about 21.1 % of the workforce on average across the country pays the taxes we find that the 7,850,000 are liable for the total CA tax burden and that works out to about $8,100 in state debt per worker in the upper half of the income bracket. This puts the total tax burden at $200,000 each. For households with two workers and a total income of at least $62, 000 or twice the median this gives the household debt exceeding $400,000 at this time. So, at a time of high debt we are listening to the environmentalists by generating more debt to fund projects that will produce the goods and services at a higher cost using the cases of electric cars, solar power and windmills. This is the way the thinking goes now in leftist circles. This is probably the new economics as long as it lasts.[21]

Some humorous solutions from ‘moderates:”

“Some think the Terminator ought to resort to his own devises. One solution is for California to secede from the Union, declare war on the United States by firing an unmanned, unarmed missile from Vandenberg Air Force Base, concede defeat and receive foreign aid to rebuild. At least the feds can print its own money which states can’t as well as that tacky requirement of balancing their budgets.”[22]-- California’s Case for Worst Posted by Jerry Remmers

I favor secession as Mexico needs some more ‘education’ to help them and they could work up an annexation scheme and hold a plebiscite and win by letting Mexicans living anywhere on the planet vote. We continue to add to this the looming debt from the green revolution [EcoNazism] in California and Europe with monstrous Cap and Trade taxes.[23] But, getting back to the experts:

Stiglitz concludes [2002] that Fannie Mae and Freddie Mac have a slight risk assessment:

“Conclusion

This analysis shows that, based on historical data, the probability of a shock as severe as embodied in the risk based capital standard is substantially less than one in 500,000 – and may be smaller than one in three million. Given the low probability of the stress test shock occurring, and assuming that Fannie Mae and Freddie Mac hold sufficient capital to withstand that shock, the exposure of the government to the risk that the GSEs will become insolvent appears quite low.”-- Joseph E. Stiglitz, Jonathan M. Orszag and Peter R. Orszag.

Well, now that was sound advice and this conclusion was based on much banter and froth over well-studied risk management and other follies. These GSE institutions are now bankrupt and our society is now trapped with some 3-5 trillion dollars in worthless mortgages known now as ‘toxic assets.”

The solution is always bigger government:

“"The theories that I (and others) helped develop explained why unfettered markets [indicating need for bigger government intervention e.d.] often not only do not lead to social justice [crass redistribution of wealth rhetoric e.d.], but do not even produce efficient outcomes. Interestingly, there has been no intellectual challenge to the refutation of Adam Smith’s invisible hand: individuals and firms, in the pursuit of their self-interest, are not necessarily, or in general, led as if by an invisible hand, to economic efficiency"[24]-- Joseph E. Stiglitz

We can wonder if governments control too much of the GDP and participate in the markets that the resulting debt from over spending is ‘efficient’ in market terms. If we look at this conundrum we can ask the following questions: If Stiglitz can divine market efficiencies by the proving the existence of some presumed absence of information [circular logic and an attempt to prove a zero] then how could he miss predicting the collapse of our G.S.E.s and simultaneously dismiss the notion of an invisible hand [the term economists use to describe the self-regulating nature of the marketplace[25]] that guides the natural supply and demand process? Stiglitz might examine the possibilities that many markets worked smoothly with little government interference since ancient times, a bit before Stiglitz was born.  Capitalism and free markets did work fairly well until Stiglitz told us we didn’t know what we were doing.

This essay by Stiglitz is just a sophistic manifesto and a boiler plate excuse for people like Obama and Brown to grab wealth and power and divert them to their own nostrums. I failed to find out if Paul Krugman signed this letter.[26] He is famous for having two special views of government participation in society: [1] tax and spend, or [2] spend and tax.  I am sure he approves.

This is actually a race against the Depression Clock when some state or nation finally collapses from debt, socialist government or a combination of the two and the world can witness the wreckage and study the rehabilitation antics with riots, succession and poverty. The Greeks now blame Goldman Sachs for assisting them in ‘hiding their debt’ from their EU overlords and pencil pushers.’[27] If true, wouldn’t they be thankful?

Losers need lots of excuses and forming a merry band of excuse mongers to blindly justify whatever you are doing is now popular or even functional is the political new games. Next, we may hear that unsustainable debt is merely an ‘investment’ in the future as we heard from Bill Clinton in a similar comment about taxation.

Greece is too stubborn to take advice from other members of the EU  in exactly the same way California repels advice from states with positive balance sheets like Texas or Utah. I have to wonder if these people are that ignorant or if they have a separate agenda to grab power[28] Mussolini-style amidst the certain collapse of the economy. Benito had the Italian king Victor Emmanuel III[29] on his side but Brown has Stiglitz.

The EU may collapse before the US does.

rycK [a 5^th generation Californian in exile]

Comments to: ryckki@gmail.com

Friedman of the NYT Mumbles Weird Songs about Global Weirding. Propaganda at its Finest as he Defends Junk Science.

Abstract: Friedman of the New York Times plays the simple bait and switch propaganda game with his loyals by contrasting little easily refutable quotations and fluff from the opposition with his sculpted version of Global Warming while failing to address the cancerous core problems that infect his environmental experts: sleaze, lies and subterfuge.  The cabal of phony scientists who couldn’t force their models, even with manufactured data,  to predict the decrease in surface temperature on the earth were embarrassed when their antics were unexpectedly  exposed to the world, but their nasty grams and other e-mails are not even mentioned here. Tommy scurries to the rescue. Some ethereal form of faith apparently binds together this sticky mass of socialists while they diligently grunt and grab for more taxes and political power and that is all that matters.  The tax revenues from the phony Cap and Trade Tax Scheme are now in jeopardy as many corporations exit the ph0ny cabal of the U.S. Climate Action Partnership (USCAP)[1]. So, he mumbles and tries to claw back some support from the rubble. The NYT is true to any fault if it means keeping the leftist fires burning for a while longer or until they go bankrupt.

The New York Times Propaganda Machine:

The word tautological[2] would be quite obscure in the political lists if not for biased propaganda machines like the New York Times and some of their sorrier sisters like The Guardian, Washington Post, L.A. Times, The Nation and others. The NYT writers[3][4][5][6][7][8][9][10] and staff[11] thrash about in an ideological gala to vie for who might be voted noble enough to match the elegant essays of their honored Pulitzer Prize winner Walter Duranty.[12] They analyze the news and reports and comments of the political masters but somehow always manage to morph all this into at best a diminutive caricature of their honored Weird Walter. They just cannot seem to sniff the right rugs and scrape out the essence of their best times while supporting the Soviets and their understandable gulags. But, little fingers are busy on little keyboards with little minds plunking the keys in hope of a chance for greatness. Today we get to read one of these amusing attempts.

The current chum chucker:

One of their less-stellar wordsmiths, since the Old Red Lady [13] is apparently off today, is Tommy Friedman who begins his slow but valiant grind uphill toward the lower fringes of literary mediocrity with a hackneyed political diversion valiantly supporting the humiliated Global Warming Follies in his op-ed. He is trying his best to cover Dowd’s coveted chair in her welcome absence. He begins by employing the proper propagandistic theorems, which are dutifully orchestrated in the stale manner of setting up the reader for a fall by pointing out some selected inane nostrums from the enemy, and then noisily offering sophomoric criticisms thereof:

Krugman’s Festival of Nonsense in his own terms:

“Of the festivals of nonsense that periodically overtake American politics, surely the silliest is the argument that because Washington is having a particularly snowy winter it proves that climate change is a hoax and, therefore, we need not bother with all this girly-man stuff like renewable energy, solar panels and carbon taxes. Just drill, baby, drill.”[14]--Global Weirding Is Here By Thomas L. Friedman Op-Ed Columnist Published: February 17, 2010 [Emphasis is mine in all quotes.]

How petty. Nobody has made a firm stance on this subject lately because of the bad press so Friedman looks foolish with this bluster and fluff. Now, he cleverly plays the propaganda game by first offering a concession to give the appearance of being ‘objective’ and later in the same paragraph offers this strange conclusion:

“The climate-science community is not blameless. It knew it was up against formidable forces — from the oil and coal companies that finance the studies skeptical of climate change to conservatives who hate anything that will lead to more government regulations to the Chamber of Commerce that will resist any energy taxes. Therefore, climate experts can’t leave themselves vulnerable by citing non-peer-reviewed research or failing to respond to legitimate questions, some of which happened with both the Climatic Research Unit at the University of East Anglia and the United Nations Intergovernmental Panel on Climate Change.”-- Global Weirding Is Here

Friedman acts as if he was recently demummified in a big jar of Chardonnay and has not read the citations used by his beloved  ‘experts’ on such matters as the melting of the Himalayan mountains[15] now regrettably retracted.[16][17]

Comments and criticisms like this that describe the ‘science’ in this project seem to be everywhere:

“Margaret Wente in The Toronto Globe & Mail on Feb. 5. [wrote]  "Although not fatal to the science, they revealed a snake pit of scheming to keep contradictory research from being published, make imperfect data look better, and withhold information from unfriendly third parties. If science is supposed to be open and transparent, these guys acted as if they had a lot to hide.

"But the claim (made just prior to the recent climate change summit in Copenhagen) was rubbish, and the world's top glaciologists knew it. It was based not on rigorously peer-reviewed science but on an anecdotal report by the World Wildlife Fund.""[18]—Tom Ward - Inconvenient truth [Emphasis is mine in all quotes.]

This is all very sleazy but acceptable ‘science’ to the drooling left who dream of getting tax monies to fund their continuing ‘research’ on important political matters.  Apparently, if you are even of moderate scientific strength you are supposed to keep mum when your ‘peers’ make outlandish statements about Global Warming and corrupt your selected slice of  science if the prize is leftist political success or more grant money.  Places like Salon.com’s Table Talk are awash with True Believers who will support any form of sloppy 0r insulting science if it attacks the right or can punish capitalism.[19]Friedman’s support of junk science[20] is almost as dedicated as his colleague Paul Krugman’s are for deficit spending and massive debt here and abroad.[21]

Undaunted by all this news and phony science our heroic Friedman now offers some ‘points’ he would like to stress:

“1) Avoid the term “global warming.” I prefer the term “global weirding,” because that is what actually happens as global temperatures rise and the climate changes.

Why not avoid the word science when some of these guys speak?

2) Historically, we know that the climate has warmed and cooled slowly, going from Ice Ages to warming periods, driven, in part, by changes in the earth’s orbit and hence the amount of sunlight different parts of the earth get.

That is very enlightening but the Sumerians knew that. What do you know?

3) Those who favor taking action are saying: “Because the warming that humans are doing is irreversible and potentially catastrophic, let’s buy some insurance — by investing in renewable energy, energy efficiency and mass transit — because this insurance will also actually make us richer and more secure.”

A circular essay that would make Aristotle proud to restate his errors in science.

4) Even if climate change proves less catastrophic than some fear, in a world that is forecast to grow from 6.7 billion to 9.2 billion people between now and 2050, more and more of whom will live like Americans, demand for renewable energy and clean water is going to soar. It is obviously going to be the next great global industry.”

 Even if it isn’t true we need to spend the money on our little political projects anyway.

How phony! How silly!

Where is the data, the reference to the climate model that predicts the current 15 years or anything else substantive? He offers this offal?  He might as well have consulted the fresh pigeon droppings on 5^th Avenue and Lexington Avenue in the city for a superior rebuttal.[22] There are many who blindly support any leftist cause and ignore the facts.[23] Phil Jones of East Anglia now admits “… that for the past 15 years there has been no ‘statistically significant’ warming.” Wasn’t he the Big Enchilada what done drove this project? Michael Mann of Hockey Stick Fame is under investigation at Penn State for his alleged part in this mess.[24] I wonder if Tommy reads anything else but the New York Times.

Friedman seems to be ecstatically ignorant of the blatant scientific subterfuge operating underground in the past few years  that consisted of fudging data, excluding critics and conveniently ‘losing’ critical data that might used to reconstruct some of these phony computer models that predicted this mess. The current ‘science’ in the GW arena is a silly as the famous and phony ‘computer study’ conducted by MIT in 1970 and published in a book title: Limits to Growth [25] whose sophistical computer models clearly predicted, with ringing praise from the ‘scientists,’ that we would run out of oil, copper and lead by 1992 by and natural gas reservoirs by 1993.  Much of this junk science resembles the political works of  Carl Sagan (big time pot smoker) who was twice refused AAAS membership because of his sloppy, inaccurate, sophomoric and juvenile articles about the “Nuclear Winter” he submitted in the respected scientific journal Science. His ‘computer model’ was analyzed and shown to be a farce by respected scientists. Any high school algebra student could have defeated Sagan’s phony hypothesis. It was found that very small changes in parameters and numbers into his math model would convert the predicted ‘winter’ into an instant sauna. The math model waxed hot and cold like a flopping fish on the pier with small changes in inputs. It is numerically unstable and any undergrad math student would be given an F on this rubbish by any respectable university except, perhaps, for Cornell or Harvard or now Penn State. There was a grand political point to be made so they could afford to neglect the defects.[26]

Phil Jones is not mentioned in this op-ed today nor is Mike Mann  or Wei-Chyung Wang of SUNY Albany[27] who are all in trouble on professional grounds for potentially corrupting science or their professional ethics.

There are no firm data, no believable reports, lots of sleaze and the political rants of the sordid criminal and bribe-taker Al Gore all plastered up in the walls in this sordid dung heap, but the NYT can always identify some stooge who will pop tall and endorse any political point on any subject while ignoring whatever is necessary that might defeat the topic as in this case or any other tax scam. Anything for money for the left it seems. And, that is understandable as they have difficulties making money on their own.

Lysenko would be proud to read this.

rycK [a 5^th generation Californian in exile]

Comments to: ryckki@gmail.com

Krugman UnMakes a Euromess and Recommends a California-style Mess. Bigger Government is Always the Solution

Abstract: Paul Krugman apologizes for the Greek and Spanish government-induced debts with the suggestion that they weren’t ready for a single-currency system so Europe should build up a bigger collective government. His signals and recommendations seem to fly in the face of the salient fact that California, just as broke as Greece or Spain also participates in such a monetary system. He fails to mention the USSR that was a ‘union of socialist republics’ and parts of Eastern Europe who formed a similar union although not with a common currency. He suggests bigger government as usual and howls about the potential expulsion of Greece and Spain from the EU.

The New York Times frequently creates a splendid candyland array of tarts and sweets and goodies for those to enjoy who can only exist on spending of other people’s money. The paper, bankrupt in more ways than just financial, sport a brilliant cadre of ‘journalists’ [1][2][3][4][5][6][7][8] and staff[9] that consciously, or unconsciously,  directs their readership into new and wonderful avenues to achieve political mastery and success with bigger and bigger government.  They analyze the news and reports and comments of the political masters, but somehow always manage to morph all this into a caricature of their honored Pulitzer Prize winner Walter Duranty and echo his propaganda style of the 1930s.[10] Government is always wonderful but it is best when it controls everything.  Paul Krugman[11][12][13] is one of these gifted soothsayers in the ideological and financial propaganda games, specializing in tautological singsong about the unavoidable utility to infect every nation with his personally-modified and discredited Neo-Keynesian economics. His magnificent pronouncements and enlightened endorsement of the far-left political spheres of influence and intellectual prowess brightens the  New York skyline with gold stars and tufts of whiffle dust and other illuminations driven by the fame and fortune of his mindspring offerings endowed by his Nobel Prize.[14] He is so wonderful.

Today, he apologizes for the Idiot Greeks their Spanish brethren-in-sorrow and their phony Marxian socialist societies who have spent themselves into oblivion and wasted all the patience that the sober members of the European Union have offered during their participation in this profligate wreckage. As is usual in propaganda tracts, he starts off with some concessions and gives a few points to the howling opposition before slipping, like a Mickey Finn, a fatal pill into the common soup bowl:

“Lately, financial news has been dominated by reports from Greece and other nations on the European periphery. And rightly so.”[15]--The Making of a Euromess By Paul Krugman Op-Ed Columnist Published: February 14, 20 [Emphasis is mine in all quotes.]

Since the Greeks threaten to bring down most of Europe and cast them into the poor house I can agree that this might drift into the news in a place or two.

The caveat is niftily inserted:

“But I’ve been troubled by reporting that focuses almost exclusively on European debts and deficits, conveying the impression that it’s all about government profligacy — and feeding into the narrative of our own deficit hawks, who want to slash spending even in the face of mass unemployment, and hold Greece up as an object lesson of what will happen if we don’t.”-- The Making of a Euromess By Paul Krugman

The Rule here is that we cannot cut spending for this reason. If we had employment at 100% or more we would still have to resist spending cuts.

As is routine in propaganda pieces, the salient issue that vectors directly into the problem is given an oblique nod and the reader is left with the impression that the critics are, again, on the trail of the wrong culprit, but our good economist will show us the errors in our thinking. He is correct in stating that wild spending and uncontrolled debt are parallel transcontinental concerns in many of our states and federal government. A lot of nervous taxpayers are watching Greece. The object here is to finesse this linkage with a grand solution for Europe and drop the matter and hope that the reader will also forget our problems and beg for tax hikes and more spending.

Debt and excessive spending were not the cause of this disease!

“For the truth is that lack of fiscal discipline isn’t the whole, or even the main, source of Europe’s troubles — not even in Greece, whose government was indeed irresponsible (and hid its irresponsibility with creative accounting).

No, the real story behind the euromess lies not in the profligacy of politicians but in the arrogance of elites — specifically, the policy elites who pushed Europe into adopting a single currency well before the continent was ready for such an experiment.”-- The Making of a Euromess By Paul Krugman

I suppose the Brits escape blame in this one instance. Swiss too?

Here, we simply witness and suffer though a stilted dissertation concerning the connectivity of two independent variables that have no fixed relationship to each other. We are encouraged to assume that the debt and excessive spending would not have occurred if the Greeks had not been subjected to participation in a single-currency system although they begged to be admitted and then lied about their debt to do so and to meet entry requirements. That explanation makes sense to a liberal.

Krugman sets a trap for himself here as he now swings broad and wide down a rose peddle-strewn pathway with banners and song waving the apparent virtues of a single-currency state while ignoring that California is just as bad off as Greece and Spain and we, strangely, also have a single-currency system, for the time being, unless California finds a way to print IOUs in a novel way or exits the union and prints their own.

Ancient history now redacted:

“Consider the case of Spain, which on the eve of the crisis appeared to be a model fiscal citizen. Its debts were low — 43 percent of G.D.P. in 2007, compared with 66 percent in Germany. It was running budget surpluses. And it had exemplary bank regulation.

But with its warm weather and beaches, Spain was also the Florida of Europe — and like Florida, it experienced a huge housing boom. The financing for this boom came largely from outside the country: there were giant inflows of capital from the rest of Europe, Germany in particular.”-- The Making of a Euromess By Paul Krugman

43% debt to GDP is not low.  There have been lots of sovereign defaults at 31% or lower. Then, they had a debt-driven asset bubble. Gee, didn’t we have a bubble machine too?[16] Was this obvious or predictable?? 

Flashing back to Krugman’s own words from the past:

“… And let’s not forget that Wall Street — which somehow failed to recognize the biggest housing bubble in history — has a less than stellar record at predicting market behavior”[17]-- The Phantom Menace Nov. 22, 2009.

Only Wall Streets counts here? What about Congress? Gee, did Europe have some people who thrust giant inflows of capital into Spain who were trained to watch for similar bubbles? Were the Spaniards introduced to bubble politics or bubbly economics before they got into debt?

This is the mix-and-mismatch switcheroo ploy used by propagandists who select the identical financial or economic attribute and force it to be eminently suitable and desirable in one political sphere and improper or criminal in another. I don’t follow the reasoning where Spain could not see this bubble bursting. Does the Wall Street Journal publish in Spanish? Then, there is the similar case of Ireland too and they even speak a form of English. Apparently, the laws of economics that Krugman knows work differently according to some liberal index that rates their leaders or policies. This is strange. Did Newton have two sets of mathematical kinetics for the birds and bees? Does his calculus offer different solutions for the flight of apples as compared to bananas?

“And there’s not much that Spain’s government can do to make things better. The nation’s core economic problem is that costs and prices have gotten out of line with those in the rest of Europe. If Spain still had its old currency, the peseta, it could remedy that problem quickly through devaluation — by, say, reducing the value of a peseta by 20 percent against other European currencies. But Spain no longer has its own money, which means that it can regain competitiveness only through a slow, grinding process of deflation.”-- The Making of a Euromess By Paul Krugman

Deflation is the standard remedy for a bubble. We are still deflating and many of our government employees will suffer from lower salaries and reduced benefits and entitlements. The implication here is that Spain needs some gifts:

Leave the EU!! No??

“Now what? A breakup of the euro is very nearly unthinkable, as a sheer matter of practicality. As Berkeley’s Barry Eichengreen puts it, an attempt to reintroduce a national currency would trigger “the mother of all financial crises.” So the only way out is forward: to make the euro work, Europe needs to move much further toward political union, so that European nations start to function more like American states.”-- The Making of a Euromess By Paul Krugman

That is the solution! More government! Bigger government.  Our American state system has obviously prevented the impending bankruptcies of California, New York, Michigan, New Jersey and probably Maryland with our federal system and single currency! What a wonderful idea!! The United States of Europe.

Then why are Germany and the Dutch so against this gem of an idea?

“Holland's Tweede Kamer has passed a motion backed by all parties prohibiting the use of Dutch taxpayer money to bail out Greece, either through bilateral aid or EU bodies. "Not one cent for Greece," was the headline in Trouw. The right-wing PVV proposed "chucking Greece out of EU altogether"[18]-- Germany growls as Greece balks at immolation By Ambrose Evans-Pritchard Published: 7:49PM GMT 14 Feb 2010 [Emphasis is mine in all quotes.]

To be fair, we need to realize that many had reservations about a single currency system for Europe:

“It has three main aspects. The first is the well-known fiscal bit. The Greeks have overspent and over-borrowed. Now they face national bankruptcy. The EU offering loans will buy time but won't solve the underlying problem. If it makes gifts – thereby effectively making Greek debt its own – it will encourage other countries, especially Spain, Italy and Portugal to behave in the same way. In this case, the credibility of the euro in the markets will be shredded and support for the currency in the rest of Europe will crumble. As the ECB's former chief economist put it last week, why should German taxpayers fund excessive Greek public sector pensions?”[19]--The current Greek crisis is merely act one of a much wider tragedy  By Roger Bootle Published: 9:15PM GMT 14 Feb 2010 [Emphasis is mine in all quotes.]

But, this now is kindling for the socialists to spread the net and catch the fat fist for the frying. We all know that various states and nations have their problems and that under one currency budgets and spending are crowded in terms of flexibility but we can offer a comparison of California with Texas or Utah as example of single-currency systems where the financial problems can be directly tied to spending and inefficiency of government. Thus, Greece has no excuse. Neither does Spain.

But, now this is unfair to select a favorite leftist term. Why let those who were irresponsible go crawling as beggars and not be allowed to participate in the same standard of living as those frugal states who can manage debt and spending? The ugly response is that they are hopeless and will drag you down with them as they cannot be regulated or trained and we offer Greece and California as proof. They are lepers.[20]

Mindless blather and the tortuous recirculation of  leftist theorems and redacted histories of failed states do not a constitute a proper lesson: the people have to suffer a bit  and go without things and then realize what they have done in supporting the unions and progressive ideas of leftist  governments. Better them that us I say. They made their owns beds.

rycK

Comments: ryckki@gmail.com

The Proud March of the Financial Lepers: Greece Leads the Way Down for California and Other Beggars.

Abstract: The world is sinking in debt and our political leaders have no clue or solution to the problems. Their only response is apparently to print more money and salvage errant states like Greece and California. We have no responsible financial leadership on the planet anymore, at least not in power, and equity markets will not be happy with this uncertainty.  The EU may crumble over this mess as Germany will not keep wasting money on financial lepers such as Greece and Spain. Watch the Dow plunge 1000 points on this news.

The angry Germans want to throw out the Greeks:

“BERLIN, Feb 14 (Reuters) - A majority of Germans want debt-ridden Greece to be thrown out of the euro zone if necessary and more than two-thirds oppose handing Athens billions of euros in credit, a poll published on Sunday showed.”[1]--Germans say euro zone may have to expel Greece-poll By Madeline Chambers Berlin, Feb 14 (Reuters) [Emphasis is mine in all quotes.]

We always have to wonder about government and its tacky relationships with their citizens and how they handle elementary elements of reason. There must be some magical veil that protects politicos from scrutiny in their dealings in their respective societies, wranglings with international leaders, debt, spending and other matters. Apparently, many citizens, such as in Greece, believe that some popcorn peddler can pony up to the podium and promise jobs, benefits and a Great Society to the cheering crowds and then drive the whole system into bankruptcy and default along with currency debasement and other pains and make the outcome rosy and sweet. According to the new book This Time is Different: Eight Centuries of Financial Folly [2] by Carmen Reinhart and Kenneth Rogoff this process of overspending, massive debt, bank crises and defaults are very common in the last several centuries. Here is a link to a transcript of an interview.[3] Since this happens so often we must assume that the headlong flight into debt is some intrinsic human attribute in the low or mentally disnimble classes. The elitists, crowned with PhDs and other honors such as Nobel Prizes seem to offer ‘advice’ that encourages more government and more spending and a faster track into financial oblivion. This must be the Ivy League Plague.

Rogoff now counsels Germany to assist Greece:

“Harvard University economist Kenneth Rogoff even warned Germany could face similar problems to Greece.

"Germany's public finances are not on a sustainable path," Rogoff told Welt am Sonntag. "There will come a time when Germany will have its own Greece problem ... it won't be as bad as in Greece, but it will be painful," said Rogoff.

“Germany's budget deficit is forecast to grow to 5.5 percent of gross domestic product in 2010 and Merkel has vowed to consolidate the deficit as soon as the recovery allows.”

“However Rogoff, a former International Monetary Fund chief economist, said helping Greece was unavoidable.”

"As long as Germany isn't ready to kick Greece out of the euro zone, it must help," said Rogoff who also said an option would be for the Greek government to secure bridging credit.” -- Germans say euro zone may have to expel Greece

One fails to see the solution here. Germany is also spending too much so along crawls a leper and refuses to do any thing abut her diseases and begs for alms and her sisters are encouraged to throw money at the problem at their own financial peril. Germany is advised to throw money after bad!? For what purpose? To preserve the European Union? If Germany has some financial problems then do they improve if the Germans hand over some cash to the Greeks? How does that help?

Apparently, and only apparently as the financial facts are not all that transparent to any inquirer, the EU is an ensemble of states all on the brink of financial disaster:

“"We fully support the Greek government and their commitment to do whatever is necessary. A quote from  Mr. van Rompuy "”[4]-- How Greece exposed the slippery slopes of Europe.  As European leaders gather to discuss the fate of Greece, Andrew Gilligan finds half of Europe broke, the currency tottering, and a president that can't read a speech. by Andrew Gilligan  Published: 7:00AM GMT 14 Feb 2010  [Emphasis is mine in all quotes.]

We can only guess what that means.

This was the concluding analysis by Andrew Gilligan:

“For all its pretensions of unity, Europe is made up of two very different kinds of country.

Greece is the most extreme example of the first kind – corrupt, profligate Mediterranean places where tax evasion is rife and governments have brazenly lied about their finances. Germany is the opposite – northern, thrifty, and responsible, the EU's cash cow. The two kinds of nation, whose economies are not really compatible, were not ready to share a single currency at all, but the political desire for the broadest possible union was so great, and the Mediterraneans' wish to join the club so strong, that blind eyes were turned. In the long term, the euro can only succeed if the Mediterraneans and northerners narrow their economic differences.”-- How Greece exposed the slippery slopes of Europe. 

This Greek Problem reminds me of California[5][6][7][8] [Our National Leper] and its incompatibility with financial fitness, morality, sobriety and society.[9] How do you narrow economic differences between prudent states and cavalier spendthrifts?

Let’s have bigger government!

“The French, and indeed Mr van Rompuy, are pushing the idea of an European "economic government" – a political semi-union that can simply impose, from Brussels, the reforms needed to achieve convergence across the euro area. To hard-core Eurocrats, this week's crisis is just one more opportunity to press ahead with Project Superstate. An economic union is, of course, the logical consequence of a currency union.”-- How Greece exposed

Well! There you have it!  What is important is to just let the Greeks slide into financial oblivion because they know some well-meaning public servant will crawl around and then dish up other people’s money and shovel it into their own private Greek conduit for their pleasure. Doesn’t the prospect of spending other people’s money make you all fuzzy and happy inside?

The price for not being independent and being to manipulate their own currencies:

“Denied the usual economic remedies – lowering interest rates, or devaluation – by their membership of the single currency, they will suffer economic stagnation, mass unemployment and shrinking public services.

For a long time to come, the people of Greece, Italy, Spain, Portugal and Ireland will pay a terrible price for buying into the euro dream. If the euro itself did not die last week, the dream certainly did.”--How Greece exposed

Of course, the EU has no plan to deal with all of this and don’t need IMF help they say.[10] We must wonder here that what would be different if the PIGS exited the EU [or never joined in the first place] and tended to their own devices. Would we expect less socialism and more financial competence?