Friday, July 10, 2015

Friday's Thoughts: Greece & Sanctuary Cities

Well, the Greeks had a referendum and voted Oxi! Or, “no” in Greek. To figure out how we got here, a bit of back-story and I've been waiting all week to discuss where things will be going and we still have only a dim idea about what will happen next.

Also, a Superman review will be up by Noon tomorrow. So check by the Film site often. When it is up, I will post the link both in the comments and here.

Update! Superman the Movie Review up! LINK

First, Greece

As so many other conservative and libertarian pundits have pointed out, the Greeks are being taught (but, it seems, not learning from) a hard lesson in Margaret Thatcher’s famous dictum: “The problem with socialism is that eventually you run out of other people’s money.”

The Greeks, like the Nordic states, have created a massive welfare and entitlement state but, unlike the Nordic states, they don’t produce, well, anything really. The the Nordic countries, which Andrew describes fairly well here, have long since learned that in order to fund a welfare state you need a growing and prosperous private sector to grow and increase in wealth, thus increasing the amount of taxable revenue (that can be used to fund the welfare state). The Greeks, however, have a large public sector that consumes wealth the same way a Lovecraftian eldritch abomination consumes worlds and the minds of mortals.

Only the private sector can create and grow wealth in a substantial way. Yes, the public sector can, on occasion, give it a boost here and there but, that is limited by both special interest groups lobbying for favorable treatment from the government (see, Greece) and the simple fact that no one person or small group of people has the know-how to properly plan an economy in a way that it will grow. Only the free market, driven by prices and the Laws of Supply and Demand, can truly increase and, if you like, spread the amount of wealth in a society (and societies) to many people at every income level*.

Of course, it doesn't help that Greece's two national past times appear to be cheating on your taxes and welfare fraud.

The Euro

When the Euro was introduced most people praised it, it would promote trade and could even lead to greater political unity across Europe (it’s ultimate aim). However, there were a few dissenters, among them, famed Chicago economist Milton Friedman, who predicted that a common currency would, by preventing individual countries, with a wide variety of legal, economic, and financial structures, from adjusting their inflation.

If Greece were on the Drachma they could increase inflation by lowering the Drachma’s value, which would Geece to pay off its debts easier and quicker. Of course, this would be hell for the Greeks. Those of you who were old enough (or even alive, unlike me) during the Seventies may remember what it was like when the United States did this. The value of the money in your wallet goes down while the prices on products, foods, gas, everything, goes up. It is, as many on the right correctly called it, an invisible tax.

But it does make paying off the public debts easier. And it has some side benefits. Such as boosting tourism, an American tourist’s dollars will take him much farther in a Greece with massive inflation, And, as in Japan, it caused a boost in exports. Though that would require Greece to actually start producing things other than footage of public sector riots.

Bailouts, Governments, and Referendums

To quote Amy Pond, “This is where it gets complicated.” I have neither the time nor the space to get into all the events that led up to this. Nor do I have all the details. But I can give you the short of it.

The 2008 Global Financial Crisis hit, starting a tumble in the house of cards built upon massive public spending and a common currency. From what I can tell, just about every European country underwent a change of leadership after the financial crisis except for Germany’s Angela Merkel. The UK’s Gordon Brown lost his seat to David Cameron, France booted Sarkozy in favor of the left-wing Francois Hollande, Italy’s famous playboy septuagenerian Prime Minister Silvio Berlusconi finally fell from power (for now, at least), and Greece cycled through 4 prime ministers before reaching its current and 5th since the financial crisis began, the far-left socialist Tsipras, who was elected earlier this year on a platform of ending austerity measures.

A few weeks ago, negotiations broke down when Greece rejected the current debt terms, which would have resulted in austerity measures in Greece, demanded mostly by the European Central Bank (ECB), the International Monetary Fund (IMF), and the various German private creditors, as well as the EU leadership as a whole. Tsipras called a snap referendum and took the deal to the Greek people. Greece defaulted (the first Western developed country to do so), causing banks across Greece to close down, and Tsipras took the deal to the Greek people.

The Greeks were given two choices: “Nai”, or Yes for the bailout terms or “Oxi” or No against the bailout terms. Last Sunday the people voted resoundingly “Oxi”; 60% to 40%. So that is where we are today.

What Now?

Banks across remain closed at least until Monday.

Whatever the deal is, we will have some idea Sunday, which is apparently the deadline for the deal.

Some interesting developments. Within 24 hours of the election, Tsipras fired his Financial Minister Yanis Varoufakis, a a firebrand and self-proclaimed “libertarian Marxist” (how is that possible?), who famously accused Greece’s creditors of “terrorism” and replacing him with someone who was less inflammatory.

Updates will come in as I receive them so stay tuned!

Sanctuary Cities Thoughts

I've long contended that Sanctuary Cities are a symptom, not the disease. They are a product of a situation involving large numbers of illegals where the responsible body, the federal government, is either unable or unwilling to stop them.

Further it is often forgotten by conservatives that Rudy Guilliani made New York City a sanctuary city, as have many other cities that were dealing with both high crime and a large number of illegal immigrants. And they found some measure of success —provided it was combined with other measures. 

An illegal immigrant in Guilliani's New York knew he was safe from the INS but he also knew there were rules, rules that were enforced. A situation that I'm not sure exists in the People's Republic of San Francisco, who I don’t think made their city a sanctuary for illegals out of concern for high crime.

In any event, if we want to bring an end to sanctuary cities our national government must first show it is serious about dealing with the issue of illegal immigration.

OPM Hack

21.5 million people have had their personal information accessed by the hackers. And no, no one has been fired over this.


Anthony said...

Astonishingly, Obama says he has complete faith in the OPM director and she states that she has complete faith in her entire staff.

Like I've said before, I really hope for the good of the country that our next president has exec experience/is a competent administrator.

Critch said...

The problem with the Greeks is that they are lazy, lazy, lazy..they want the rest of Europe to take care of them..the rest of Europe might not like this. This administration is way in over it's head, they haven't been able to do much because they really don't know what they're doing...and frankly they (Obama and friends) don't have the gonads to deal with China, Russia and militant Islam.

Kit said...

"Astonishingly, Obama says he has complete faith in the OPM director and she states that she has complete faith in her entire staff. "

Astonishing and appalling.

"I really hope for the good of the country that our next president has exec experience/is a competent administrator."

I wholeheartedly agree.

Kit said...

Update on OPM Hack: The head of the OPM has resigned.

Kit said...

Superman: The Movie review is up!

AndrewPrice said...

Kit, Greece is really a mess. The problem is that they've cheated the system so long and so hard that they broke it and now they want someone else to reload it for them so they never have to suffer the consequences of their actions. But why should anyone agree to that? They aren't even really proposing to fix anything. Basically, they just want more money so they can keep right on doing what they've been doing.

Kit said...

"why should anyone agree to that?"

Because it might keep the Euro going. I have to hand it to the Eurocrats, they sure are determined to keep the single currency in place.

Kit said...

Also, Andrew, I'm glad you are back,

AndrewPrice said...

Thanks Kit! Glad to be back. :)

I honestly think the Euro would be better off if they punted the Greeks. For one thing, it will end the drama. For another, it will act as a warning to the others who won't get their crap together.

Kit said...

"I honestly think the Euro would be better off if they punted the Greeks. For one thing, it will end the drama. For another, it will act as a warning to the others who won't get their crap together."

I think the leaders of the EU are afraid that Grecce will do better if they leave the Euro.

USS Ben USN (Ret) said...

Here's a good, comdensed post on how Greece got to this point:

Of course, the Greek govt. has been corrupt for several decades.

USS Ben USN (Ret) said...

BTW, excellent post, Kit. IMO when the Euro collapses, and it will, that will be the end of the EU as we know it. Countries like Greece, Italy, Spain, etc., will only make it happen faster.

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