Why European Socialism is Failing, despite Austerity Measures

Yesterday, Francois Hollande defeated Nicholas Sarcosy in what can only be described as a big Left turn for French politics.  The narrative being pushed by the main stream media and by socialists is that austerity measures have not worked, and most European countries are mired in double dip recessions.  The left is trying to argue that these "right wing" austerity measures have failed, and that only a return to the European Socialism will fix what is ailing these countries.

The problem with this thinking is simply untrue.  The first is that the austerity measures are to any degree "right-wing."  If right wing is defined as any departure from the central planning models that have dominated European politics for the last two decades, then yes these austerity measures are right wing.  The reality is that "conservative" in the US and conservative among European socialist countries means two different things. And finally just austerity measures are not the only thing that needs to be done.

What is really happening is that Europe is reaping what they have sown.  This is what happens when two or three generations have lived in such a cradle to grave social democracy.  They have a whole generation of people who think they are entitled to a free ride after doing so little.

What is worse is that the social democracies of Europe have reached the tipping point on taxation.  Countries such as the UK, France, Spain, Italy, etc, have tax rates that are close to 50% and that does not even count the 17% minimum VAT tax on everything bought in Europe (Some Countries VAT Taxes are higher).  Austerity will not work, because it is not addressing the real cause of the real problems in Europe, that taxes on  businesses are so high that they cannot generate enough capital to invest or to hire new workers.  High VAT and income taxes take away disposable income from consumers who might otherwise spend their extra cash on goods and services.

The only way for Europe to solve their financial problems, is to cut back on social programs and cut taxes.  The problem is that when the population is not willing to buy into what is wrong, and demand services that a country can no longer afford, that country is ripe for financial ruin.

The Unemployment Numbers Game

Isn't it interesting that as the November elections creep upon us, that the unemployment numbers seem to marginally improve. Today's unemployment rate is being reported to have dropped by a 10th of a percentage point to 8.1%.  This is fools gold however.  Only 115,000 new jobs were created in the month of April.  This number is outright pathetic.  It was such a bad number that stocks have reacted very negatively on the report.  As of this writing, the Dow Jones industrial average is down 115 points.  By any measure this is not good.

The only reason that unemployment has gone down is because the BLS cannot count those people who have stopped looking for work.  The labor force participation rate is what shows this.  The LFPR is simply the rate of people over 18 who are working, versus those who are not.  In the last 30 years we have seen the LFPR continually trend upward, mostly because more women are working, than prior to 30 years ago.  In the past several years, and particularly in the last three years, the LFPR has dropped significantly.  In fact the LFPR is currently at its lowest level since 1981.  Some of the LFPR are people who are retiring, but since women have been the cause of the LFPR trend moving upward, these numbers should really cancel each other out.  And if one looks at the trend on this graph, it is clear that the LFPR has dropped tremendously since 2008, when the economy really started to tank.

The big question that has not been asked is this.  Why, if we are in a recovery and jobs are being created, has the LFPR number not cratered.  Perhaps part of this is that baby boomers are beginning to retire. But one must, even with that pressure, wonder why the LFPR rate is STILL declining at the rate it is.  Some of those losses should be mitigated by people going back to work.

The other thing is the fact that net job creation during Obama's tenure is still at negative 1.6 million jobs.  When you put this all together, it seems that there is some major manipulation going on with regards to the unemployment rate.

In contrast to Obama's number of 1.6 million lost jobs under his watch.  Ronald Reagan, who inherited a horrible economy in recession, created more than 6 million jobs during his first four years in office.

There is no way around this one.  Obama's record on jobs is horrible.

Update on the Cheng Guancheng Ordeal.

The Cheng Guancheng fiasco just gets worse.  Here are some of the more recent developments. Here is Secretary Of State Hillary Rodham Clinton's statement about Cheng.

"I am pleased that we were able to facilitate Chen Guangcheng's stay and departure from the U.S. embassy in a way that reflected his choices and our values. I was glad to have the chance to speak with him today and to congratulate him on being reunited with his wife and children.


Mr. Chen has a number of understandings with the Chinese government about his future, including the opportunity to pursue higher education in a safe environment. Making these commitments a reality is the next crucial task. The United States government and the American people are committed to remaining engaged with Mr. Chen and his family in the days, weeks, and years ahead."

Who wrote this Hillary or the Ministry of Truth from 1984?


Now read the story located here at the Daily Beast:


http://www.thedailybeast.com/articles/2012/05/02/activist-chen-guangcheng-let-me-leave-china-on-hillary-clinton-s-plane.html


This excerpt casts a different light on the ordeal:

When U.S. officials escorted him out of the U.S. embassy shortly after 3 p.m. Wednesday, Chen thought he’d extracted a promise that at least one of them would stay with him at the hospital, he said. “Many Americans were with me while I checked into the hospital and doctors examined me. Lots of them,” he told me from his hospital bed, where he’s being treated for broken bones in one foot, an injury sustained when he fell after climbing a wall during hisdaring escape from house arrest late last month. “But when I was brought to the hospital room, they all left. I don’t know where they went.” The ordeal was all the more bewildering because Chen is blind and was hurt during his escape; he needs crutches or a wheelchair to move around.

Then there is this story that details the unraveling of the "deal" that had been supposedly put into place


http://thecable.foreignpolicy.com/posts/2012/05/02/state_department_we_did_not_relay_threats_to_chen


Here is the most important excerpt from this story:

The State Department insists that blind Chinese activist Chen Guangcheng left the U.S. Embassy of his own volition Wednesday and that U.S. officials in Beijing did not convey threats to harm his family by Chinese officials, as Chen claims.

"At no time did any US official speak to Chen about physical or legal threats to his wife and children. Nor did Chinese officials make any such threats to us," said State Department Spokeswoman Victoria Nuland. "U.S. interlocutors did make clear that if Chen elected to stay in the Embassy, Chinese officials had indicated to us that his family would be returned to [their home in] Shandong, and they would lose their opportunity to negotiate for reunification." 

Nuland was responding to accounts by Chen supporters, now repeated by Chen himself to the Associated Press, that said Chen was pressured into leaving the embassy via threats to the safety of his wife and family. Chen told the AP that U.S. officials told him the Chinese would take his family back to their home province in Shandong, where they had been under extrajudicial house arrest and in some cases physically abused, if he didn't leave the embassy.

Why is the State Department now so vociferously defending themselves against the thought that they had conveyed threats to Cheng?  I am reminded of Shakepseare's Hamlet when Gertrude said, "The woman doth protest too much methinks."


If one reads between the lines however, it is clear that the message conveyed by embassy officials to Cheng most likely was taken as a threat by Cheng, since the home that they were being returned to is the place where Cheng and his family were subjected to persecution and abuse.


Ultimately this fiasco illustrates one of two possibilities.

1. That the State Department and then by association the Obama Administration is incredibly naive and incompetent.  
2. The Obama administration has intentionally misled Cheng and others in order to appease the ChiCom government so that they will continue to buy US Treasury bonds and further fund the massive overspending that has been engaged by the Obama administration.

Either one of these possibilities sends the clear message that Obama is incompetent and needs to be defeated in November.  

The US is no Longer a Defender of Liberty!

When Reagan was POTUS, he often defended or provided verbal support to those people behind the Iron Curtain.  Lech Walesa, who was an outspoken Human Rights activist, and later President of Poland.  He was a man that stood up to the Polish puppet regime.  He was persecuted and was even imprisoned for a time because of his outspoken words against his government.  During this time Ronald Reagan offered the following to Lech and the movement he was defending.

"For too long the Polish Government has tried to make Lech Walesa a non person and destroy the free trade movement that he helped to create, but no goverment can destroy the hopes that burn in hearts of a people."

It was words like these that Lech Walesa and others behind the iron curtain heard, that buoyed  them up during the dark times and encouraged them to keep fighting the good fight.( Walesa said as much during a speech when unveiling a statue of Ronald Reagan in Warsaw)   The message the Ronald Reagan was trying to convey was, "We in America stand with those seeking freedom and Democracy."

Flash forward to the story of Cheng Guangchen, a blind Chinese dissident who had been imprisoned first and more recently had been under house arrest for four years.  He just last week made a daring escape from his house arrest and found temporary refuge in the US embassy in Beijing.  Cheng is a self educated lawyer and outspoken critic of China's forced sterilization and abortion policies that are a part of China's totalitarian government mandated one child per family policy.  In contrast to Reagan, here are President Obama's words in response to a news reporters question about Cheng.

“We want China to be strong and we want it to be prosperous, and we’re very pleased with all the areas of cooperation that we’ve been able to engage in.  But we also believe that that relationship will be that much stronger and China will be that much more prosperous and strong as you see improvements on human rights issues in that country,”

No mention of Cheng.  There is not even a statement condemning China's deplorable civil rights record. Following this statement, the US embassy turned Cheng over to China's government.  The initial report was that this was a welcome and voluntary move by Cheng.  I personally heard NBC radio news state that Cheng willfully had left the embassy and was happy to get back to his family.  It was also reported that assurances were made about Cheng and his treatment and safety.

However a few hours later, news stories started to surface that Cheng's family had been threatened with recriminations for Cheng's actions, if he did not return home.   Cheng was reported to have been taken to a hospital to be treated for injuries sustained during his escape from house arrest.

The only reason that I can think of that explains the Obama administration's lack of support for human rights in China, is that they need China to keep financing America's debt.

The US used to be a defender of liberty against totalitarianism.  Now we defend and provide cover to totalitarian governments so that we can continue to borrow money from them. The fact that the US cannot be a defender of human rights against a regime and country that represents all of the ideals that the US opposes, shows that we are certainly a nation in decline.