Saying Something Nice about Germany's Chancellor

I've been pretty hard on Germany and its Chancellor, Angela Merkel, the past few blogs. So, I think it's time to balance the story of the European Union and the Eurozone a little.
Germany had a very strong currency, the Deutsche Mark, before the Euro was created. The DM was in the same league as the then strong US Dollar, the Swiss Franc and the Japanese Yen.
It used its financial and industrial superiority to help the European Union find its way as the Euro was created in 1999. The Eurozone benefitted from Germany's financial market strength and from its determination to keep the European Union going, at a time when many of its member states were considering rejecting the EU's governing document.
It had already partnered with France to bind the wounds caused by World War II and their solidarity made the EU as we know it today, possible. It also made the likelihood of another European war much less likely.
During the same period, in 1990, what was then West Germany agreed to take East Germany back as a fully integrated part of what had been Germany before it was divided during the period after WWII. This "reunification" as it is called by Germans, cost Germany (read that West Germany) billions of DM and Germany is still supporting the former East Germany because its Soviet legacy has made it very difficult to revive its entrepreneurial talents. Today, the unemployment rate in the east of Germany is still approximately double that of the western part of Germany. This effort is still very costly for German taxpayers.
Add to those burdens, the problem of the defaulting Eurozone countries, who either fudged their government accounts in order to meet the fiscal standards needed to get into the Eurozone or lost their way in managing their fiscal house. One can argue that Germany should have done a much better job of due diligence before agreeing to admit Greece or Portugal or Spain or Ireland into the Eurozone, but the euphoria of the new currency that would bind the EU into a real union was an overwhelming temptation for all the countries involved.
Those less-than-honest Eurozone countries have more recently fallen prey to their own fiscal policies and to their banks who, much like the rest of Europe and the USA, bought into the idea that they could buy and sell sliced-up and rebundled pieces of valueless mortgages forever. Granted, their banks were not properly supervised, but neither were the banks in America or the most of Europe.
An exception is France, whose very conservative banking system did not fall so deeply into the same trap and so were not badly hit by the 2008 financial crisis. However, it should be said that France has debt problems for other reasons, namely because it is paying for a social welfare system that is far above its means, and this may yet cause problems unless President Sarkozy can convince French citizens to abandon some of their perks.
Germany could be considered a victim of its success. Success in rebuilding itself after WWII. Success in developing a national conscience that is determined never again to be a cause of war. Success in integrating East Germany into the democratic West after the fall of the Berlin Wall. Success in powering the EU into a commercial prominence built on unity.
Today, it is desperately trying to hold the Eurozone and the European Union together. France is its unfaltering partner in this. And, despite all the negatives and the siren call of some Germans to abandon the EU and the Euro for the comfort of the Deutsche Mark and complete independence, Germany seems determined to win, even at the cost of depleting its treasury in the name of European unity.

Is the Euro on a Short Path to Extinction ?

The world is watching Ireland writhe over in its debt crisis. Meanwhile the European Union Eurozone members meeting in Brussels decided to grant it the 85 Billion Euro rescue package that the Irish government requested. The terms imposed on Dublin for the loan are a 5.8% interest rate on its repayment schedule, but the important “haircut for bondholders” so often touted by German Chancellor Angela Merkel has, for the time being, been put aside for further discussion. But, the mere possibility that bondholders, who are always preferred creditors and don’t normally share in the financial problems of the entities they lend money to, has continued to shake European bond markets today.

Ireland needs to survive the debacle without defaulting on its sovereign debt (i.e., government bonds, like US Treasury notes and bonds). It probably will do this, but its citizens are in the streets demanding early elections and asking the government to explain just how it got innocent citizens, who are now paying the price in unemployment and drastic loss of property values, into this mess.

On the sidelines, investors are already making bets that Italy or Portugal will be next - bets in the form of demanding more interest for lending money to Portuguese or Italian governmental entities or banks.

In a move meant to calm the markets, the European Central Bank felt obliged today to say that the EU as a whole will have 1.6% GDP growth in 2010 and that that level will rise in 2011-12. But, mystifyingly, the ECB also said that Spain is not doing enough to institute the austerity measures that would prevent it from falling into the Greece-Ireland trap. And, even Belgium got caught up in the turmoil, issuing 2 Billion Euro of government bonds at a higher than normal interest rate.

So, the bond markets are nervous and the stock markets in Europe followed suit in a downtrend of about 2% today.

The Euro is also on the firing line. It has lost 1.5% against the Dollar and more against the Swiss Franc today. Both the Dollar and the Swiss France are refuge currencies, that is, they are bought when the rest of the world’s currencies look less attractive because of economic or geopolitical trauma.

One thing is abundantly clear. The European Union is ill-prepared by its very nature to deal with the current banking and fiscal problems of its member states. This is most obvious in the fact that no one is really in charge. The chairman of the European Central Bank makes statements, Germany’s Chancellor Merkel makes statements and nobody has the power to demand a pre-publication review or to demand agreement among the members before anything is said. That has been papered over in the past, mostly because the topics of discussion were not nearly as important as the topics related to the present financial crisis Europe finds itself in.

One need only look at Great Britain to see the difference. Britain, while a member of the European Union, is not part of the Eurozone. It has kept its Pound Sterling.  A new government was elected several months ago. It set out an austerity plan for putting its fiscal house in order. The plan calls for sacrifice and citizen support. The prime minister speaks for the government and so there is not the cacophony of voices we are hearing in the EU right now. And, the plan seems to be working.

If we look at the United States, the real message of the recent mid-term elections was to do what David Cameron and his Conservative Party have already started to do in Britain, “get the US fiscal house in order.”

It will be much more difficult because the US Congress is split between the two parties, but the House of Representatives is controlled by the GOP, which campaigned on fiscal restraint and cleaning up the spending spree mess left behind by the last House controlled by Democrats. Since it is the House that initiates spending and oversees government budgets, it will have a strong voice.

If the President is smart, he’ll work with the GOP. He can only win by doing what the majority of Americans want him to do. And he can only win if he abandons his policy that says “spend the USA into prosperity” and adopts the more prudent austerity of Great Britain and the newly elected GOP House members.

As for the European Union, it has serious work to do and it would be a very good idea to find common ground that all members can support. That, in part, means not letting the German government, which admittedly has bought the majority of Eurozone government bonds, ride roughshod over the rest of the Eurozone in an effort to save its own fiscal house. If cacophony continues to reign, there will be no hiding place for the Euro, or for the European Union, which will be forced into "third world" status, with a mountain of debt and a never-ending line up of member states begging for more. 

Switzerland Has Voted Today

The last time a Swiss vote got international attention, it was because its citizens decided to outlaw the construction of minarets. That was a year ago.
Today, the Swiss voted again, this time on two important issues presented as referendums.
The first was a proposal by the Swiss Socialist Party to skew the tax index so that "rich" residents pay additional taxes while "poorer" residents pay less. The Swiss voters defeated this referendum, and if commentary and political advertisements before the vote are any indication, they voted "no" because they want to keep the wealthier residents who already pay significant taxes and who were suggesting that they'd find another country for residence if the referendum were passed (a lot like wealthy New Jersey residents who were fleeing the state until the current governor eliminated an onerous tax burden on "the wealthy") . But, more importantly, for the most part, the Swiss are opposed to solving undefined fiscal problems by raising taxes, and this most recent vote is just the latest example of their determination to raise taxes only when the goal and need are clear and the tax is time-limited.
The second referendum concerned cancelling the passports of naturalized citizens who commit what Americans would call felonies (serious violent crimes) within five years of receiving a Swiss passport. The referendum won handily.
The European Union is threatening to take the question to the International Court of Human Rights, just as they did with the minaret decision. It will probably fail, as did the first. In addition, the European Union has several member states which are considering doing the same Switzerland has voted positively on today. France is the most prominent, having announced that killing a policeman, among other crimes, should be grounds for withdrawing a French passport in the first ten years after granting it. Such a law would require a constitutional change and President Sarkozy seems ready to take on the battle.
This is an idea that is receiving much discussion in Europe generally and Switzerland is simply the first to step up to the plate and be heard. If you live in Europe, it is easy to understand the public outcry. Drug-related gang wars and itinerant petty criminals make a strong case for some sort of residence and citizenship control.
I have been opposed to the idea of a "fortress Europe" but living here has given me another perspective. Europe can absorb only so many foreigners in any given time frame.
The same question is being discussed  in the United States, where illegal immigrants are the issue - should they be "regularized" or deported? These are not easy questions and they deserve serious discussion, not knee-jerk responses.
Switzerland has kick-started the debate and it will find many supporters in the rest of Europe.

The Two Koreas

As if the North Korean bombing of a South Korean island, complete with civilian and military casualties, weren't enough, we now have the United States and South Korea preparing to engage in war games near the North Korean coast, if journalists are accurate in their reporting. And, China is calling for everyone to calm down and get back to the table - which table, I'm not sure. But, if it's the six-party table, the US says now is not the time.
In a sense, the United States is right. Now is not the time. The time was long ago, when, in 1953, General MacArthur told President Truman he could take over the North Korean territory. The President blinked, fired MacArthur, and the rest of the story is well-known. The 17th parallel has become one of the most tightly controlled borders in the world.
The United States is treaty-bound to defend South Korea in the event of an attack by the North. War games are not defense, they are muscle-flexing, to a lesser degree than the flexing the North did when it launched rockets at the South. What good does it do? Not much, unless the South Koreans are sleeping better at night, something I doubt.
And, why is China being so diplomatic? Because it is the only "friend" North Korea has, and because it has a political system that, while more modern, closely resembles the terrorist family affair that is North Korean politics. Perhaps China knows that the North will not advance toward the South. Perhaps China knows that the US will not attack the North, no matter what it does. Perhaps, like all of us except the North Korean dictators, China knows that this will all end with a UN Security Council meeting and a few speeches. Everyone will then go home and the North Koreans will have learned that their irrational activities have just won them a little more space and time in which to plan the next step in their mindless search for legitimacy.
But, at the bottom of all this, the lonely voice of Douglas MacArthur rings loud and true. He was right to want to stop the North while it still could be stopped. We could add to his voice that of General Patton when he was fired for wanting to stop the Soviets from taking over Berlin. We could also add the voice of General Schwartzeneger, who wanted to end the Iraqi regime in 1991-2. 
What do generals know? That politicians do not have the will power, unless they are backed up against the final wall, to deal with "rogue" nations. Politicians talk and lament and threaten and meet. They do not, for the most part, act. Generals act.
Firing a few rockets may not seem the stuff to launch a war, but what if those rockets had carried nuclear warheads. What if today, instead of lamenting and meeting, we had a nuclear attack and its casualties on our hands.
And, lest we forget, the same drama is playing out in Iran. They will dodge and parry until their nuclear weapon capacity is ready. Then, who will respond when Israel is bombed with nuclear weapons? Not the Security Council, not China, not Russia who has made the nuclear arming of Iran possible, and not most of the rest of the world.
If President Obama is serious about protecting everyone and making the world safer, he ought to concentrate on the present nuclear capacity of North Korea and the potential nuclear capacity of Iran. That would do a lot more for the world than all the current dithering while the rogues build their nuclear arsenals.

Happy Thanksgiving

Whether you're celebrating Thanksgiving Day or St. Catherine's feast day today, I hope it's happy and with not too much snow.
Thanksgiving Day is the celebration and thanks-giving to God by the Pilgrims who settled in Massachusetts in 1620 and were helped by the local Indian tribes. They taught the Pilgrims how and what to plant and kept them from starving in the wilderness they found when they stepped off the Mayflower, the little ship that had brought them to the New World. The Thanksgiving feast was not only religious but also meant to share with the Indians the bounty that would not have been possible without their help.
St. Catherine, by contrast, is the patron saint of unmarried women, who traditionally wore yellow and green hats on St. Catherine's Day to advertise the fact. She was an early martyr who is also a doctor of the Catholic Church. In many European countries, St. Catherine's Day marks by tradition the first snowfall, not unlike Thanksgiving in the USA. It is also the day for local fairs that celebrate the harvest and the coming of winter.
So, whatever you are celebrating today, I hope it is a happy and blessed occasion with your families and friends.

The European Union and Einstein

Albert Einstein once defined insanity as doing the same thing over and over again and expecting different results.

That seems to me to be the perfect definition and explanation of the debt crisis the European Eurozone is suffering.

We all remember Greece. It had to be bailed out by the European Union, the European Central Bank (read both of these largely as Germany) and the IMF because the country had gotten itself into a financial mess that was leading it rapidly to sovereign bankruptcy. Greece almost went belly up because it lied about its debt burden (every candidate country for entry into the Euro currency zone had to certify that its current debt was not more than 3% of its Gross Domestic Product) to get into the Eurozone.

Greece’s systemic corruption, admitted publicly by its prime minister, and poor private sector performance make it the worst managed country in Europe. The rest of Europe knew then and still knows this. But, in the rush of euphoria that led to the creation of the Euro, Greece was warmly ushered in. Finally, Greece had too much debt to cover it up any longer, and the rest of the story is a 90 Billion Euro (120 Billion USD) bailout.

Now, we have Ireland. It’s a completely different story with the same result. Ireland didn’t supervise its banks (if that sound familiar vis-à-vis the USA, you’re right on target). So, the banks lent and lent and lent and covered all of Ireland with housing mortgages that ultimately fell into default when the 2008 global financial crisis hit. So, the Irish government made a promise to insure all the debt of its banks, to the tune of approximately 130% of the Irish GDP. Evidently, that was doomed to failure and so today we have Ireland preparing to receive a 90 Billion Euro (120 Billion USD) bailout. And to cover its needs until the bailout details are worked out, the UK is providing a 7 Billion Euro bridge loan.

Now, every financial eye has turned to Portugal, where similar facts lead almost everyone to conclude that the result will be similar, too. And, those with wider horizons are already looking toward Spain.

So, to go back to Einstein...have we got European or Eurozone insanity on our hands? Are we watching the repeat ad nausea until every Eurozone country is bailed out, or until the IMF, Germany and the European Central Bank run out of funds.

Is there another solution? May I whisper, “Yes, there is.”

The Eurozone could rethink itself. Its fundamental problem is that historically successful countries like Germany, The Netherlands, Austria and France have been lumped together in the great Euro currency experiment with chronically debtor countries like Greece, Spain and Portugal.

The logical solution might be to swallow their pride and admit that their Euro-dream was just too big. They could gracefully and on an agreed timetable, let the countries that never should have been admitted to the Eurozone leave it. They could take back their original currencies, revalue their debts in their historical currencies, repay them over longer periods with their own currencies, and leave the Euro to those countries that will make it work.

Germany, France, Austria, The Netherlands and Denmark (and maybe Italy) will be able to build a strong and successful Eurozone, if they aren’t collectively bankrupted by the Eurozone hangers-on who shouldn’t be there in the first place.

European Union Regulation

A reader wants to know why Ireland's tax rate should matter to the European Union.
The short answer is, "It shouldn't."
The European Union is always trying to find itself in the federal system of the United States, mistakenly believing that the USA forces lock-step conformity on its citizens, leaving no room for independent state action. That's just plain wrong, as every American can tell you, but the EU is determined to out-federalize us. It doesn't work like that in America and it won't work for the EU.
Who really cares if every lawn mower in Europe operates at the same sound level??? Who really cares if some countries like cheese made with unpasturized milk (it hasn't seemed to do much harm during the past 600 years or so)? And, do Europeans really lose sleep at night because the English buy their beer in pints instead of liters?
If the EU concentrated on the things that really matter : honest dealings between the European states on what their budget deficits really are -  making concrete the promise of free entry into every EU country for the purpose of work - revising their governing documents so that the European Commissioners and Parliament actually represent European constituencies and are held responsible for their actions by them. That's what federalism is all about. Not lawn mower noise.

Mr. Lincoln's Beard

Dear Mitt Romney

You are one of the Republicans who most often beats or equals President Obama in polls that are asking who voters would be most likely to vote for, one-on-one against Obama, in 2012.
You are also one of the few Republicans who has an appreciable level of support from all groups within the GOP. And, you are popular with independents, a group that will in all probability decide the outcome of the 2012 presidential election.

When I watch you on TV, I admire your position on most issues, and I feel sure you can explain why your great gamble into public health care as Governor of Massachusetts failed to deliver the expected results. Perhaps, it is even to your advantage to have tried it, because now you have a much better understanding of what will work and what will not work. That could be important for the future of federal ventures into the health care arena.

Certainly, your business experience will serve to protect America from intellectuals and academicians who have no practical experience but plenty of untested ideas to fob off onto innocent Americans.

But, Mr. Romney, I would like to take you back 150 years to Mr. Lincoln.

The thin-faced and pockmarked visage of the tall and lanky lawyer and former Congressman from Illinois received gentle criticism from a 12-year old girl. Her letter to him, possibly, is what ended Mr. Lincoln’s clean-shaven days. The little girl from Westfield, New York, named Grace Bedell, promised to get her brothers to vote for Lincoln if Mr. Lincoln grew a beard. She insisted that he “...would be much improved in appearance, provided you would cultivate whiskers. You would look a great deal better as your face is so thin,” young Grace wrote, “All the ladies like whiskers and they would tease their husbands to vote for you and then you would be President.”

The letter was dated October 15, 1860, written before the November presidential election, and Lincoln replied to it immediately on October 19th, “As to the whiskers, having never worn any, do you not think people would call it a piece of silly affect[ta]tion if I were to begin now?” He was reportedly so amused by the letter, that he carried it long afterward to make a joke of himself.

But, Mr. Lincoln heeded the little girl’s advice and grew a beard - a beard that became the hallmark of Abraham Lincoln and distinguishes his face for the world even today.

Now, Mr. Romney, I’m not asking you to grow a beard. I don’t think it would suit you. But, have you ever considered changing your hairstyle? I think something a little less lacquered and more modern, with perhaps a bit of grey at the temples, would become you. It would lighten your appearance and give you a more human touch, less like an ad for Pantene. And it might win over the undecided.

It worked for Mr. Lincoln. Why not for you?

 

Ireland and the Eurozone

It's going to be a long and difficult negotiation for Ireland, the European Central Bank and the IMF. Ireland needs their financial support to the tune of almost 100 billion Euros but the country does not want to give up its low corporate tax rate which has been fixed at 12.5% for many years.
In a comment that was balanced and moderate, something that one can't always say, German Chancellor Merkel said that the Irish corporate tax rate should not be part of the negotiation because every Eurozone country has the the right to independently fix its tax rates.
This is no small matter for Ireland because much of its Celtic Tiger rapid growth came from foreign companies choosing Ireland for their European or international headquarters because of the Irish corporate tax rate, and also, it must be added, because of the highly educated labor pool available in Ireland. To take away its only remaining attraction for corporate investment would make it even harder for Ireland to recover from its current banking disaster.
And Ireland is not alone in this dilemma. Eurozone countries have corporate tax rates for foreign corporations that are 5 to 10 percent higher than Ireland's. And they are feeling the effect in the loss of investment and, with it, jobs. France is a good example. Every time President Sarkozy tries to explain to the French labor unions and the left of the political party spectrum that lower taxes would make it possible to attract new foreign investment into France, with the additional benefits of more taxes coming into the French Treasury and and more jobs being created for French workers, they scream that it would ruin their way of life. Just the opposite is, in fact, true.
The argument was bitterly fought in the United States in the 1970s and 1980s, when businesses moved from higher tax-rate states with aggressive union activity to lower tax, union-free states. The jolt was severe. But, finally, the high tax rate states got the message, lowered their taxes, made union membership voluntary, and the corporate activities that had deserted them began to flow back.
It's easy to say that Europe wants to be a homogeneous unity. But, in fact, that's almost impossible to achieve. The United States is certainly not homogeneous in many of the areas where Europe forces unanimity on its members. Each one of the fifty states, for example, fixes its own state tax policies and the federal government cannot interfere.
It's something to think about in Europe. Unity does not need to mean a straight jacket of imposed laws and regulations that are better left to local country jurisdiction.

Getting Out of Afghanistan

Well, it's official now. The Allies (mostly America, with French and British alongside) are withdrawing their military combat forces in 2014. Military advisors will stay on to help the Afghan government manage its affairs. President Karzai seems pleased, but that's because he's already negotiating his deal with the Taliban and Al-Qaida. You would be doing the same if you were in his position.
If that makes you more than a little nervous, maybe it's because your brain is computing and it says, " Vietnam, Iraq." The Americans announced in advance their combat departure from both Vietnam and Iraq. The results were twofold: more guerrilla attacks during the interim and an opposition already in place when the troops left. It was simple enough to win the "hearts and minds" of civilians who knew they'd be exposed to the opposition in any case when abandoned by America.
The West probably ought to get out of Afghanistan. The truth is they shouldn't have been there at all. The Soviet Union surely gave us the only lesson about fighting in Afghanistan anyone with a little common sense would have needed. But, we marched in despite all that. And now, we're marching back out with no "mission accomplished" and no real improvement in the lives of the Afghan population, especially women and children.
It's curious that the West seems to be able to get into wars so easily - wars that are not its business and that would be better left to those who actually have vital stakes in the outcome. That we freed Afghanistan from the Taliban was a good deed. But, it should have ended there. Now, we have to try to leave behind a country that will not be further torn apart in civil war and terrorist attacks. We will have to try to understand that the Taliban and Al-Qaida have a place in Afghan governmental affairs, legitimate or not. And, we will have to forge ties with them in order to contain the terrorist disease that is slowly consuming the region.
The next time someone tells you that the West needs to be in most places in the Middle East because of its own vital interests, just say, "Afghanistan" and wait for the response. It'll be slow coming because there is no explanation, except naivety and an overblown sense of invincibility.

Why is Germany in Control?

A reader asked why Germany is so powerful in Europe. Here's my answer.
Germany has a lot to say because it's the richest country in Europe - honestly, maybe in the world - today. That means that when the Eurozone that runs on the Euro currency wants to support a country financially, Germany is the country that steps up to the plate. Think USA and the Marshall Plan, but not so big, and you've got the idea. And, German citizens are getting a little bit wary and maybe frightened of the prospect of bailing out every Eurozone country that finds itself in a hole financially, especially if they come to believe that Germany will bail them out, no matter how irresponsible they are...Greece, Ireland, Portugal Spain. Germany is fiscally sound and conservative, and it also has a manufacturing sector that exports to every other European country, and to Asia, mainly China. So, Germany wins when other Eurozone countries have to depend on its imports coming from Germany. There's the rub. A lot of Eurozone countries are beginning to feel gouged by Chancellor Merkel and her government.

Finding a Thread

It's one of those days when everything I hear or see about the world points to a dangerous jumble.
President Obama arrives in Lisbon for the NATO meeting, with the top agenda item seeming to be whether 2014 is the year when Afghanistan can start looking out for itself. European leaders hope so, because their citizens are increasingly unhappy about any European military role in Afghanistan except for training missions. Americans are not far behind when it comes to dissatisfaction about our military presence in the country. Many Americans would like to see us pull out as soon as it can be done with some semblance of control and "mission accomplished" aura.
Then, there is yesterday's not very veiled threat made to France, whose five citizen-hostages have been in the hands of the North African El-Qaida group for several months now. The terrorists have told France that it will have to negotiate directly with Osama bin Ladin in order to gain the release of their citizens - that is, after France pulls all its troops out of Afghanistan. The newly appointed French Foreign Minister has predictably responded that no foreign elements will dictate French policy.
The backdrop to all these unsettling military situations is the confusion and near-panic in Europe over the Irish bank debt problem that threatens to sink the European bond market if a solution is not found soon. The Euro itself is holding up rather well in the face of all this, and the European Central Bank Chairman has said that Ireland will be saved and the European bond market will be fine.
The problem is that Ireland is reluctant to be "saved" because it means giving up a large chunk of its sovereignty to the European Central Bank and Germany, who will undoubtedly be the ultimate insurer of the Irish bank debt. Other European financial ministers are also not happy with Germany's insisting that some semblance of fiscal order and austerity be accepted by Ireland and the rest of Euorpe that is still in a financial black hole caused by the 2008 worldwide financial crisis. America, again, is not far behind, with Federal Reserve Chairman Bernanke having to go to Congress yesterday to explain why his QE2 approach of throwing money at the black hole is the only way to fill it. German Chancellor Merkel is not any more pleased with Mr. Bernanke's approach than she and Germany are with the European debtor nations.
So, there we are. The entire world is in Afghanistan while most of the world's citizens believe the country is an unsolvable political black hole and wish Afghanistan would just step up and take responsibility for itself.
The entire world is still in the grip of a financial crisis not seen since the 1930s and most world citizens are afraid that it may still drag all of us into a financial black hole. 
Oh yes, one entity seems to be stepping out of its personal black hole - GM. Is there room for hope there? We'll soon find out. 

Celebrating Beaujolais Nouveau

This convivial feast in the third week of November is more and more becoming the occasion for the French to go to the Beaujolais region to taste the regional wines, eat authentic regional foods in bistros and celebrate Beaujolais Nouveau, a wine that was first marketed in 1985 and for many years was called by the French the Beaujolais for Americans and Japanese.  

This year Beaujolais Nouveau will be released on the 18th of November at midnight. There will be excitement in New York City and Tokyo, as well as in many other cities around the world, as this once-a-year wine becomes available.

Beaujolais Nouveau is a red wine produced by a short method of vinification that makes it ready for drinking in less than a month after the grapes are harvested and pressed. But, Beaujolais Nouveau must be drunk within about 6 months after it is bottled. This is not wine for storing.

For many years, the French pooh-poohed Beaujolais Nouveau and avoided drinking it, out of fear that they would be seen to be as silly as the Americans and Japanese who first created the market for it. But, French winemakers soon realized that Beaujolais Nouveau was here to stay and so they began to apply their unique wine-making expertise to Beaujolais Nouveau. It has worked.

And, the French have come around. After all, it’s hard to be French and not want to try a new wine, even if it is favored by Americans and Japanese. So, along with the ritual of a midnight release that is synchronized around the world, there are now festivals and other events in the French Beaujolais region, and indeed all over France, to honor the early wine.

There will be village winetastings and food fairs, French-style, complete with fireworks, torchlit parades and traditional French guinguettes, a French “tea dance” of sorts, with accordion music and French traditional popular songs. Think Edith Piaf and you’ve got the idea.

This year one town in Beaujolais is staying up all night to celebrate its favorite wine. It’s a “nuit blanche” or white night, when shops and restaurants and wine bars stay open till dawn so that everyone can enjoy the celebration. You’ll probably find jugglers, mimes, and musicians roaming the streets, giving the impression that it’s a mediaeval fair.

Another town is having a marathon - hopefully the runners will save their winetasting till they cross the finish line.

Even Paris, the epitome of French sophistication and haute culture, has succumbed. So, it’s now okay to raise your glass of Beaujolais Nouveau anywhere in the world and say, Thank-you, France, for yet another beautiful treat.

Obamacare and the European Model

The battle has not really started, but after the new US Congress is seated in January, the new American universal health care law, i.e., Obamacare, is going to be a hot topic in the halls of Congress.
Republicans and Tea Partiers, and a lot of independent voters, want the law repealed. That probably won't happen. But, there will certainly be some drastic changes in the bill that was passed by the Pelosi Democratic Congress last summer. We can only wait to see how it all plays out, but there are a  few things American lawmakers ought to consider as they approach the problem.
First, universal health care is a myth. There will still be millions of Americans without coverage. In Europe, where universal health care has been in effect since the Second World War, there are still holes in coverage, certainly not as gaping as those in America, and more subtle. The coverage is "universal" but the procedures and medications covered are controlled. And, as the populations of most European countries age rapidly, the question of elderly care and home-vs-institutional care is becoming a huge topic because of the cost consequences.
Second, the costs will almost surely be much greater than Congress has predicted. France and Germany are seeing their national health care budgets expand substantially as the medical community finds new medicines and new treatments that always cost more than the older items they are replacing. Add to that the problem of the aging population, and the obsolescence of the medical infrastructure - hospitals, clinics, laboratories - and the costs are rising faster than the governments can find suitable ways to pay. Complementary insurance, paid for by the individual, or co-pays, fill in the holes and save money for the government health care system, but poorer citizens fall through the cracks.
Adding Great Britain to the equation gives a good picture of what is in store for the rest of Europe and the United States. Medical access is more and more tightly controlled, waiting times for non-emergency procedures can stretch out for six months or more, medicines are being eliminated from the qualified list so that costs can be held at current levels, and some treatments and medicines have age cutoffs so that elderly patients do not have access to them. And, more to the point, medical services in Britain are drastically out of touch with the population. Gatekeepers and practice groups make it almost impossible to have a relation with a generalist who knows the patient over a long period of time and understands his or her real problems and needs. That alone is costly in the longer term. Many British citizens pay the cost for private medical care, outside the government system, because it's the only way they can get meaningful, timely treatment.
Switzerland has an "everyone pays" system, in which each citizen (including children at a slightly reduced rate) pays approximately 400 Swiss Francs (about 400 US Dollars) per month for coverage, as well as co-pays. There are many who cannot make such a large monthly payment and the government pays the difference for them.
So, universal health care sounds wonderful, but what are its characteristics? Less service, more gatekeeping by remote medical bureaucrats, the need to buy personal private complementary or primary insurance to get real medical care, deteriorating medical infrastructure because there is no money left to upgrade public facilities, and rising costs that seem to be uncontrollable for the most part.
I have not mentioned the Canadian health care system because I'm not familiar enough with its characteristics, but I cannot believe that similar problems don't exist there as well.
So, US lawmakers, be careful and don't be fooled by pleasant sounding phrases. Universal health care is a multi-headed monster that will eventually be so costly that no government will be able to provide it without making severe and arbitrary cuts in services. Don't toss out private health insurers and employee-provided insurance unless you are sure it can be replaced effectively and at costs Americans can afford.

A Good Summary of What China and Germany are Inflicting on the World

This is from the Black Swan - the website is below is you're interested in reading the Black Swan regularly. This article is so on point that I couldn't say it better, so here it is. Casey-pops.

 Foreign ExchangeTrading – Sick and tired of “sanction of the victim”

“It is a moral crime to give money to support ideas with which you disagree. It is a moral crime to give money to support your own destroyers.”  _Ayn Rand

Is it a stretch to say the Chinese wish to destroy the United States? Maybe! But it isn’t a stretch to say that China wants to become the primary global economic and military power in the world. It is why the G-20 was so fresh with irony. We have China and Germany teaming together for the “sanction of the victim” -- the United States. Even though it is US liquidity that is keeping both their economies afloat, now that Germany has become attached at the Chinese hip.

You know what they say boys: Be careful what you wish for ... it may come true! I guess it doesn’t translate well into either Chinese or German.

Bashed, indeed, Mr. Obama was at the G-20; and for a lot of good reasons. But, the reality is this problem in the global economy is first and foremost a global imbalance problem with China and Germany (to a lesser degree) as the two spoiled children creating a problem they fail to admit.

German Finance Minister Schauble, tell us again how that single currency regime, structured primarily by your country to your own benefit by creating a captive market for your industrialists knowing all too well by locking the other countries into a system whereby they cannot adjust to compete with Germany’s efficiencies, i.e. the straightjacket of the euro, is working for you?

Oh yes, you are correct Mr. Schauble -- it is working very well. Germany is sucking the air completely out of the eurozone as the others are wheezing on life support. Nicely done! And you hammer the US for liquidity generation? That is fresh!

Why so fresh? Well it is US liquidity and ability to take on China’s huge manipulated trade surplus that is creating the demand for Germany’s industrial orders, Mr. Schauble, in case you hadn’t noticed. Ahh ... no good turn goes unpunished, does it Mr. Schauble?

But not to be outdone in the hypocrisy department, China, always one to love sanctioning its victims, tries to turn the G-20 into a US bash fest. And because the so-called leaders of most other countries are a bunch of weenies, afraid China will turn it’s power on them with even more predatory practices should they speak up, remain quiet as doves cooing in their pens.

One again, in case the rest of the world hasn’t noticed, the US in all its so-called foreign exchange manipulation has once again taken on the bulk of Chinese exports, keeping the game alive through both US demand and the Fed’s QEs.

We can’t remember China ever complaining about the dollar’s decline when demand was brisk before the credit crunch. We can’t remember China complaining about US consumers spending like drunken sailors and over leveraging then. But much seems to have changed since US demand has fallen after the credit crunch. But much is still the same because it is the US demand that is keeping the commies in power. It is the US demand that is still delivering the goods to the powerfully politically connected spoiled brats known as the “Princelings.” And it will be interesting to see what happens to these “industrial wizards” once the US finally gives them what they are asking for -- less liquidity.

How come nobody seems to mention China’s massive quantitative easing program which on a relative scale was much larger than that of the US? Because my friends, the vested powerful interests inside and outside the US who make huge money inside China would be showing the emperor with fewer cloths than he currently appears.

“Chinese credit expansion was 9.6 trillion yuan in 2009 and will be 7.5 trillion yuan this year from 5.8 trillion in 2008. This immense credit goes to the state-owned enterprises at 5.5% interest, lent by state-owned banks that amass captive household savings at 2.25% deposit rates.”   ______Leto Research

China GDP growing at 10% and they pay 2.25% to depositors? Talk about incredibly suppressed market interest rates, Batman! And the US is typically the recipient (rightfully so) of bashing criticism for its artificially low rates. Just close your eyes ... push the China-Cheerleading stuff and the “US is always the bad guy” stuff you hear from the financial press out of your head for a moment ... then think of the massive displacement of capital inside the Commie Kingdom; it will end badly. The only question is when. And we know the answer to that riddle.

It ends badly when the leaders of the US government reach around and finally find some spine!

This maybe a bit egocentric; it may sound a bit like your typical ugly American yahoo; it may sound like yet another philistine in the wilderness that has not come to grips with the new power structure of one world order; it may appear my blue-collar roots are showing; to all that I plead guilty as charged; proudly so. But I am sick and tired of watching the US enrich poor Asians on the backs of blue collar workers and the rest of the middle-class so platform companies, and the powerfully politically connected can enrich themselves and their shareholders as they transfer massive industrial power and research to a country that wants to bury them. And then they dicker around the edges of econometrics bullxxxx wondering why the US has a structural unemployment problem. It is to laugh, but so pathetic it makes you cry.

So when does it all end badly? When the US finally erects very high tariffs against Chinese goods flowing into the US economy -- that’s when. The latest election cycle should make it very clear to the Chinese that this game is about over. The victims are sick and tired of being sanctioned.

Jack Crooks

Black Swan Capital LLC

www.blackswantrading.com

Getting Ready for the Next Election

Yesterday, the French President, Nicolas Sarkozy, reappointed his prime minister and re-arranged his cabinet in a bid to pull his government back toward the Gaullist right that is its natural base. The most startling and, in a sense, reassuring appointment was that of Alain Juppe to the position of Defense Minister.
Juppe is a former prime minister who got caught up in the questionable practices of the period when Jacques Chirac was mayor of Paris and supposedly used "ghost" employees to fatten the coffers of his party, the RPR, also Gaullist. Mr. Chirac will stand trial on charges related to that affair, but Alain Juppe has already paid, being convicted and barred from office for 5 years. He went to Montreal and was a university professor during that period, and then came back to France and was elected mayor of Bordeaux, his stronghold in French Gaullist politics. Now, he's been tapped to regain the national stage as Defense Minister. He's a street-smart and intelligent politician who can only help Sarkozy's position.
I've always admired Alain Juppe and thought he "took the rap" for a lot of questionable practices that weren't really of his doing. Now that he's back, with his powerful position in French rightist politics, we can bet that Sarkozy is counting on Juppe to help cement Sarkozy's position with the "real" Gaullist right in France, in preparation for a second run for the French presidency in 2012.
Sarkozy has had a government that was a little bit of "something for everyone" with several ministers from the French left and center named to top positions in an effort to "open" French presidential politics to a broader group. This seemingly has failed, because to coin a phrase, "you can take the French leftists out of their party but you can't take their party out of French leftists." So, it seems Sarkozy's going home to his political  roots in order to be re-elected.
Does that sound at all familiar?
It reminds me of the 2008 presidential elections in the United States, when Obama won by staking out a blurry center left position and then, after winning, naming a White House staff full of what Americans call "extreme left" advisors. The results, as for Sarkozy, have been loss of popular support with the people who elected him, and and a desire for change that better suits their right-of-center political leanings.
If President Obama is smart enough to do what President Sarkozy has done  -  re-set his position by naming new advisors with a more centrist background, he may yet pull out the 2012 US presidential election. But, nothing is less sure.
The problem is that Sarkozy is a political creature, astute enough to understand why he was losing and to correct the errors he had made.
Will Obama have the savvy or political sense to do the same? The verdict is still out and every day he waits, the GOP is taking away more of his ability to find the centrist position he needs for victory in 2012.

Posting Comments

Hi, dear readers,
 I've been asked about comments and why they don't appear below the blogs posted. I think I've got it sorted out. You'll see a comment below yesterday's blog. Try it, please, because I really would like to have comments. Happy Weekend, Casey-pops

Sometimes America's Image Surprises Even Me

Last evening my husband and I attended a visit to the only operating salt mine in either Switzerland or France. It's more than 250 years old, and when you see the tiny tools the miners used to chisel out the huge underground caverns in the 18th century, you have to wonder if we moderns would have had the stamina and courage to even try.
But, that was simply history and technology. Interesting but not revolutionary.
The evening was sponsored by a local Swiss Rotary Club, one in which my husband's cousin is president this year. What was most surprising was dinner. It was in a large underground cavern, and we were told that miners were several hundred meters below us working on pressure salinating water for future extraction and drying into salt.
We were eight at each table. I was, obviously, the only American in attendance. I always expect to be bombarded by difficult questions about President Obama, the war in Afghanistan, and why America is doing so poorly economically these past years. Nothing could have been further from the truth.
The questions were -
What's the World Series and have you ever visited San Francisco? It must be the prettiest city in America.
Why is Kennedy Airport so unwelcoming? One guest said he and his wife always try to go to Cincinnati or Chicago for US entry.
When is Hillary going to be president - yes, even in Switzerland !
With America being so big and powerful how can you be happy in such a tiny country as Switzerland?
Do you know that  Rothlisberger is Swiss? (Don't bother trying to explain that his family came to the USA several generations ago. He's on TV here because he's Swiss and so don't bring up unwanted facts.)
Have you ever seen the Grand Canyon? We'd like to someday.
Where was George Washington born?
We like Americans because they're so polite (there's a shocker for you because we're always being portrayed as Ugly Americans).
Something to keep in mind when we travel is that the world is curious about all things American. You don't need to push them, just wait for the questions to start. Then, it's time to answer slowly to make up for the fact that English is often a rather shaky second or third language for most Europeans. Don't brag. Be polite. They'll love it and you and America.

Armistice Day

It's the 11th of November and everywhere in Europe there have been ceremonies in villages, towns and cities to commemorate the combattants who lost their lives during the Great War of 1914-1918.
The First World War was vicious and deadly for France, as well as most other European countries. France lost 6 million young men between the ages of 18 and 40. The generation lost was never really replaced and it led to a continuing lack of manpower at a time when machines were just beginning to replace the hard work of human beings. The same could be said of England and Germany. It is often cited by historians as a major cause of the decline of 20th century Europe.
It was the trenches that took the greatest toll - even for those who survived. The soldiers, most without any military training, were thrown into the trenches to be led out into the no man's land where most were shot or bayonneted. The Germans used mustard gas to attack the soldiers while they were waiting in the damp trenches for their turn to die. Being "gassed" was the road to physical and mental problems that lasted all their lives.
Today, at a time when we are likely to glorify war in the name of freedom and to celebrate the young men and women who volunteer to defend democracy, it would be well to reflect on World War I.  When we ask our youth, whom we all would agree are our best hope for the future, to give up their lives or be maimed physically or mentally by the horrors of war, it would be wise to remember the trench warfare of 1914-1918. Modern equipment and technology may have distanced soldiers from trenches, but they are still just as vulnerable to death and injury, both physical and psychological.
My father was a professional soldier, and was very good at his job, but he hated war with a passion. He never used a gun in civilian life. He always stayed in contact with the families of every soldier who died under his command. And, he often said that any politician who sends young men and women into battle ought to have to go with them, at least once.
I'm not advocating peace at any price, but it pays to be prudent. To be sure of our goals. To be clear that we are not aggressively engaged in war, but defending places and people who ask for help. Pre-emptive war as a policy seems to me to be the recipe for the degradation of our American ideals and historical values. The more we spread our military mantle over the entire world, the more we will find ourselves in debased conflicts which will only alienate America and its values from those who are caught up in our aggressivity.
Something to think about on Armistice Day. 

Is It 2012 Already ?

The latest US polls show that almost anybody but the CEO of Ford Motors would be able to beat Barak Obama in 2012 if they were to run for president.
But, the clear leader is Hillary Clinton with a 60-40% margin over Obama in every age group and political leaning. Mrs. Clinton says she's not going to run in 2012 and will wait till 2016 to decide if another run at the presidency would make sense. But, she'll be well into her 60s by 2016 and my instincts tell me that if she's serious about a second try, it's 2012 or nothing.
The real problem is that the Democratic Party will have a sitting president on its hands, in the form of Obama, during the 2012 primary season. Sitting presidents are almost not touchable if they want to try for a second term. Should the Democrats force him out, thus alienating Blacks voters and the left of their party, or should they go with him, insuring a loss to almost any Republican who gets the GOP nomination.
That, my dear friends, is the dilemma. Watch the Democrat pro's squirm and try to wriggle out of the trap they're in. Watch the possible Democrat frontrunners who could beat Obama shower him with "kisses" while they work on arranging his exit.
And, don't forget the GOP in all this. They have to "run" against a broad range of possible 2012 Democratic candidates. So, they need to be moderate without losing the right wing and conservative without losing the moderate and liberal wings of the Republican Party.
It's going to be a feast for political creatures, like me.

Beware the Retirement Political Trap

Ron Paul and other libertarians are increasing the volume of their demands for Social Security overhaul. That's a fine and honorable goal, I suppose, without knowing any of the details of their plan, but it is a dangerous political gamble that could lead the GOP into another black hole in 2012 and beyond.
Here's why.
I don't think it makes any difference what we call it - welfare or social insurance or trust fund - the truth is that the vast majority of Americans have for several generations considered Social Security as a fundamental part of their retirement planning. And with good reason. They have paid monthly or quarterly taxes that have been considered payments to enhance their retirement income. And those taxes / payments have degraded their capacity to invest for their retirement in other ways to the extent they would have needed to in order to replicate Social Security payments.
So, it seems the United States government has entered into a contract with these Americans which we are bound by honor to fulfill.
If we want to create another contract with younger Americans, refund their Social Security payments and tell them it will now be their responsibility to provide for their own retirement needs, that would be acceptable, or at least comprehensible.
The 2010 mid-term election represents many things - reductions in tax burdens, smaller government, less federal intervention in state and individual affairs - but, to undercut the "Social Security contract with America" in such a vital area as retirement seems to me, a lifelong Republican and advocate of fiscally responsible government, to be the recipe for disaster for the GOP. And rightly so. 

 

Am I Missing Something ??

When I listen to President Obama talk about his plans for the next two years, when I hear Nancy Pelosi say she's staying on as minority leader, when I see political analysts on NBC or BBC or Bloomberg discuss the election results as if the GOP had just barely eeked out a fragile victory, I think I must have been hallucinating on November 2nd. Just to give my hallucinations some flesh -

1. the GOP took 61 House seats and probably more when the last few stragglers are decided.
2. the GOP now holds more state legislatures than at any time since 1928.
3. the GOP won six Senate seats and Murkowski will probably win in Alaska, making it seven.
4. the GOP now has a large majority of sitting governors.

To hear the network media tell the story, it was "the mid-term curse" of sitting presidents - do they really believe O'Donnell is a witch, or what??
The only curse I can find is that Obama, the White House, Mrs. Pelosi, Harry Reid and their adoring media followers were "cursed" into listening only to each other for two years. It led to a debacle that I haven't witnessed before in my lifetime.
So, the GOP and all Americans who wanted to throw the rascals out, and who did so as often as they could on November 2nd, are in for two more years of listening to why the GOP victory was meaningless, why it was possible only because Obama forgot to explain his policies clearly enough (as if we're too dumb to understand his Newspeak), why it will have no impact on the 2012 presidential election, and why it was simply the product of tea partiers whose only joy comes from carrying large signs at rallies meant to destroy the American democratic model.
Ho-hum. It just proves how out of step they really are. The 2010 election stood for getting the Washington mess into some kind of manageable order. It stood for taking back the country from a government hell bent on telling the American public what is good for it even when the public is screaming "STOP". It stood for saving America from the clutches of a faceless leftist-leaning elite that wouldn't recognize a real American if one walked up and bit him.
If you don't believe that, just watch the spin that's about to be put on President Bush's new book and his publicity tour to promote it.
Is Jay Leno the only guy on TV who actually understood the election results. Seems so.

The New Obama Presidency

We've got an inkling about how the next two years will play out politically in the USA, even if the details are not yet clear.  It started on November 3 when the President suggested he'd need to work with Republicans but they'd have to come around a lot to his way of seeing things or he'd resort to governing by Executive Order.
My upbringing included the axiom that you can catch more flies with sugar than with vinegar. Maybe the President ought to consider this downhome truth before he embarks on a course that will put him on a collision path with a solid House GOP majority that he can't override every time and that he needs for minor things like his budget.
Why can't Obama just admit that he lost, that his ideas and programs were not acceptable to the majority of Americans? I think it's because he's never had to compromise about anything. Heaven knows, Chicago is not the great political debating society. It's rough, precinct politics that gets the job done within or without the niceties of the law. It rides roughshod on anyone who deviates from its programs and decides in back rooms who will be elected to which offices. The ward bosses then turn out the vote, alive or dead. That's not a pretty picture, but it rather succinctly describes Chicago politics. And that's where Barak Obama learned whatever he could about politics and governing.
He brought those Chicago politicians with him to Washington and they ramrodded through their agenda of Obamacare and spend-till-you-drop social policies.
Many of the Chicagoans have gone home. That leaves the President alone to figure out how to win in Washington. One thing is sure - it's not by emulating Chicago or trying to govern by decree and edict. That's not America and it's certainly not democracy at work.

Betting on Germany for Now

Mr. Bernanke is at it again. Everyone is worried about the decline of the Dollar, exacerbated on 3 November by the Federal Reserve’s decision to pour another USD 600 Million into US Treasury bonds. Don't be fooled. What the Fed is actually doing is printing dollars.

The reaction in world financial markets was as swift as it was expected. On 4 November, world stock markets rose, commodities, especially oil, gold and silver, rose dramatically, and the US Dollar fell against almost every other currency. 

What to do to save your capital or avoid the coming defacto devaluation of the US Dollar? My bet is on Germany and the Euro.

Germany is the driver of the Eurozone - countries that share the Euro currency. Its manufacturing and export sectors are the backbone of the European Union’s export economy, representing 25% of its output. Germany’s heavy equipment is the most important export sector from the Eurozone to other European countries and Asia, especially China. Germany’s GDP rose at a 2.2% rate in the first half of 2010, far outperforming any other Eurozone economies, which couldn’t manage even 1% growth. Germany growth beat the US, too. And with that 2.2%, the Euro rose as well.

France and the other Eurozone countries are dependent on Germany’s engine to support the Euro. If one wonders why the Euro is so consistently strong, why it rises and outstrips the US Dollar, the answer lies in Germany. The Euro has become the surrogate for the Deutsche Mark, sadly missed by most Germans. In fact, I believe that the Euro already would have been greatly devalued or even disappeared if the Germans were not determined to maintain its stature in the range once possessed by the DM.

For example, Germany sets the agenda when Eurozone countries try to work out how to deal with those member countries whose debt burden has far over-reached the agreed 3% of GDP level embedded in the Treaty of Lisbon that governs Eurozone financial matters. Germany decides whether it will allow its Euro reserves to be the backstop for Irish, Greek, Portuguese or other members debt, because these countries would not able to borrow funds to provide for their public needs unless someone is willing to guarantee the debt. That someone is Germany.

Where’s the safe haven?

I would bet on the Euro and Germany going forward, at least until Mr. Bernanke decides he’s pumped enough Dollars into the world’s reserves, or the Dollar falls so precipitately that even he has to acknowledge that he’s got a disaster on his hands.

The President's Unlearned Political Lesson

I watched TV most of the night last night and all of today, trying to find the common threads, the big issues, the way forward. And, then, at 1 pm, the President started his press conference with prepared remarks.

"The American people sent us here to rebuild the American dream, to change the way Washington does business, to make our country work for ordinary citizens again. We've made a good start by cutting the deficit, by reducing the size of the Federal Government, by reinventing much of our Government to do more with less. We have increased our investment in education and expanded trade, and our economy has created more than 5 million jobs. We've also made a serious start in the fight against the terrible plague of crime and violence in this country. I remain committed to completing the work we have done.
Still, in the course of this work, there has been too much politics-as-usual in Washington, too much partisan conflict, too little reform of Congress and the political process. And though we have made progress, not enough people have felt more prosperous and more secure or believe we were meeting their desires for fundamental change in the role of Government in their lives....
To those who believe we must keep moving forward, I want to say again, I will do everything in my power to reach out to the leaders and the Members of this new Congress. It must be possible to make it a more effective, more functioning institution. It must be possible for us to give our people a Government that is smaller, that is more effective, that reflects both our interests and our values..."

Sound familiar? It's not Obama. It's Bill Clinton after the 1994 mid-term losses suffered by the Democrats. It would have been nice to hear some of those words today, but President Obama chose to blame the defeat on the economy and on his failure to adequately stay in touch with the American public and to explain his programs.

Now, that's just not what we saw last night when the election returns rolled in. We saw a tidal wave of one resounding theme - nothing is working in Washington because the government's too big and expensive and the President has done nothing but magnify those errors.

Today, Obama was not in the frame of mind to say he'd do his best to reach out or cooperate with the GOP. He never said his programs were unpopular, choosing to defend Obamacare as being popular with most Americans. When a reporter called him on the fact that 50% of Americans oppose Obamacare and want it repealed, his answer was, "...so, 50% of Americans support it."

Mr. Obama said he accepted responsibility for the defeat, but he pushed home the idea again and again that cooperation will not be easy in the next two years and that the GOP will have to find ways to cooperate with him. He couldn't find it in his heart or mind to simply say, as Clinton did, "I will do everything in my power to reach out to the leaders and the Members of this new Congress."  

Barak Obama campaigned on going to Washington to change things. He was never specific about what he'd change, so everyone naively assumed he'd change things as they would like him to. What he did was ram through immensely unpopular legislation on health care and raise the deficit by an outlandish amount  by taking advantage of a Democrat-controlled Congress.

It's easy, relatively speaking, for a President to do what he wants when all the pieces of the Washington machine are on his side. Today, the change Americans were clamoring for in 2008 may finally have come to Washington, but the President doesn't seem to realize it or is too proud to acknowledge it directly, except for a joking remark about taking a beating last night.

Politics is a demanding vocation. It takes years to learn the art of spar and parry, of give and take that saves one's heartfelt ideals while continuing to have a voice that counts. That's not "politics as usual," it's simply the fact of the matter. No one expects a soldier to become a general right after basic training, and no one should expect a neophyte Democrat Senator with no real political experience or training to be a good President who is expert in the art of spar and parry and compromise needed to get things done on the national level.

Perhaps, at the end of the day, we all feel some compassion for Mr. Obama because we are the ones who put him in harm's way. He wasn't ready, but he didn't know it. We should have.  

 

 

T'was the Night Before the Elections

  T’was the Night before Elections

(with apologies to Clement Moore)

T’was the night before the Elections, when all through the house
Not a creature was stirring, not even a mouse.
The posters were hung by the volunteers with care,
In hopes that a victory soon would be theirs.

The children were nestled all snug in their beds,
While Election excitement danced in their heads.
And mamma in her ‘kerchief, and I in my cap,
Had just settled our brains for a pre-election nap.

When out on the lawn there arose such a clatter,
I sprang from the bed to see what was the matter.
Away to the window I flew like a flash,
Tore open the shutters and threw up the sash.

The moon on the face of the new-posted stickers
Gave the lustre of hope to my fast-beating ticker.
Then, what to my wondering eyes became clear,
A tall gaunt old man with a short dark beard.

His eyes sparkled so brightly, so lively and brave,
I knew in a moment it must be Old Abe.
More rapid than eagles his candidates they came,
And he shouted and waved, and called them by name!

"Now Beohner! now, Angle! now, Sarah and Whitman!
On, Toomey! On, Miller! on, on Carly and Boozman!
To the top of the list! to the front of the hall!
Now dash away! Dash away! Dash away all!"

As dry leaves of tea that before a wild hurricane fly,
When they meet with an obstacle, mount to the sky.
So up to the house-top the candidates they flew,
With the sleigh full of votes, and Old Abe, too.

And then, in a twinkling, I heard on the roof
The telling and laughing after each Old Abe spoof.
As I drew in my head, and was turning around,
Down the chimney Old Abe came with a bound.

He was dressed all in black, from his head to his foot,
And his clothes were all tarnished with ashes and soot.
A bundle of ballots he had flung on his back,
And he looked like a peddler, just opening his pack.

His eyes-how they twinkled! his smile how happy!
His cheeks were like roses, his beard like a pappy!
His droll fine-lined mouth was drawn up like a bow,
And the beard of his chin was as black as his coat.

The stump of a pipe he held tight in his teeth,
And the smoke it encircled his head like a wreath.
He had a long lean face and a slightly rounded chest,
That bounced when he laughed, like a candidate at his best!

He was friendly and open, a right jolly Old Abe,
And I laughed when I saw him, perhaps not too sage!
But, a wink of his eye and a twist of his head,
Soon gave me to know I had nothing to dread.

He spoke not a word, but went straight to his work,
And counted all the ballots, then turned with a jerk.
And laying his finger aside of his nose,
And giving a nod, up the chimney he rose!

He sprang to his sleigh, to his candidates gave a whistle,
And away they all flew like the down of a thistle.
But I heard him exclaim, ‘ere he drove out of sight,
"Happy Elections to all, and to all a good-night!"