In America, the state with the lowest unemployment and best rating for business is, according the New York Times, Oklahoma. Oklahoma has a balance of payments plus. They pay out much less in taxes than they get back in government resources. That is true of many states in the United States. Most of those are Red or Republican states. New York, New Jersey, California and most of the blue states have a balance of payments deficit, they pay out more in taxes than they get back and New York even had to sue the Clinton Administration to get proper payments for things that they were legally owed. New York State with Daniel Patrick Moynihan and the New York City Mayor won that suit but the payment deficit is still there. It's been there for as long as I've lived here. (forty years.)
Europe has to decide whether being united and the most powerful entity on the planet is better than aiding their individual economies. What Europe will have is a super culture of the super wealthy who are international and have homes and citizenships across borders. It's no wonder that the minor Austrian aristocrat Friedrich von Hayek called social equality and unity, the road to serfdom. But that's only true if you are aristocracry and living high on the hog to begin with. When the poor classes are trained, what you get are Beethovens and Mozarts and the flowering German Art from the 19th century and Netrebko, Tan Dun and Gergiev in the present. All three, and many more, products of school systems based in testing and merit rather than affordability. Europe has to decide that they all grow together or no one grows. When they learn the message and power of unity then they can make that decision for themselves. It has to be made every election and every moment by the electorate. It's hard work being a team but it's far more powerful than being a king on a small hill. Most European countries are the size of American states or smaller. Go to the CIA book and read the figures. Compare them to the unity of the Japanese people with almost no resources except their intelligence or the South Koreans living in a country the size of New Jersey. Of course everyone has to get control of their bankers and speculators or what they will have is an old fashioned European Feudal economy with a super culture of a few families running the whole show. That's my opinion. REH From: [email protected] [mailto:[email protected]] On Behalf Of Ed Weick Sent: Friday, November 26, 2010 5:45 PM To: RE-DESIGNING WORK, INCOME DISTRIBUTION, EDUCATION; [email protected]; [email protected] Subject: Re: [Futurework] [Ottawadissenters] Thinking the unthinkable - eurozone breakup I really do wonder how long the European Union will last, now that the wealthier countries are required to bail out the poor ones. Probably not for very much longer. My wife and I visited Ireland in the late 1970's. It was a very dark place then, dark and disorganized. We visited several ancient monuments and what struck us was that we could just walk in. Nobody was looking after the monuments or watching the people that came to see them. The country looked rundown. There were a lot of tinkers (gypsies) parked in ditches along the roads, a lot of mule drawn carts and a lot of obvious poverty. We next visited Ireland in 2001 and could not get over how different everything looked -- new housing everywhere, the most up to date cars, and the tinkers had moved out of the ditches. To get into the ancient monuments, you had to buy tickets and you were closely watched. At some of the larger sites, buses took you in. Everything was organized. I couldn't help but wonder where they'd got all the money to so completely transform the country. Well, they didn't find much of it in Ireland. They borrowed quite a lot of it from EU banks. And EU firms invested in Ireland. Ireland had a relatively well-educated population that could be adapted to high-tech and other industries that required brain power. What's happened now is that the money borrowed to fix the country up cannot be repaid by Ireland itself. The industries and growth that developed because of EU (and other) investment have not done nearly as well as expected, and certainly not well enough to provide the revenues needed to repay foreign investors. The EU was established in the relatively good times of the early 1990's. It was a great idea, but like ever so many great ideas it was based on an optimism that the good times would continue into perpetuity. Greece and Ireland have now demonstrated that the idea was wrong and Spain, Italy and Portugal are waiting in the wings to provide further demonstration. Meanwhile, the Germans are getting cranky and cranky Germans aren't inclined to be cooperative. The EU may limp along for a time, but given the darkness on the economic horizon, it won't limp along forever. Ed ----- Original Message ----- From: Michael Gurstein <mailto:[email protected]> To: [email protected] ; 'RE-DESIGNING WORK, INCOME DISTRIBUTION,EDUCATION' <mailto:[email protected]> ; [email protected] Sent: Friday, November 26, 2010 3:23 PM Subject: Re: [Futurework] [Ottawadissenters] Thinking the unthinkable - eurozone breakup http://www.newser.com/story/106238/irish-citizens-pay-the-price-for-sins-of- bankers.html?utm_source=2cents <http://www.newser.com/story/106238/irish-citizens-pay-the-price-for-sins-of -bankers.html?utm_source=2cents&utm_medium=email&utm_campaign=20101126> &utm_medium=email&utm_campaign=20101126 Newser) - "Private wheeler-dealers" caused Ireland's mess, but the Irish government has been punishing its citizenry for three years now with austerity programs to repay the debt incurred, writes Paul Krugman. This pain is necessary to restore confidence, say all the "wise heads," even though the deep spending cuts are actually turning the nation's recession from bad to worse, writes Krugman in the <http://www.nytimes.com/2010/11/26/opinion/26krugman.html?partner=rssnyt&emc =rss> New York Times. The latest pain comes via the so-called "bailout," which isn't really a bailout. "What really happened was that the Irish government promised to impose even more pain, in return for a credit line-a credit line that would presumably give Ireland more time to, um, restore confidence." The markets, alas, seem unimpressed with the draconian measures. "You have to wonder what it will take for serious people to realize that punishing the populace for the bankers' sins is worse than a crime," writes Krugman. "It's a mistake." -----Original Message----- From: [email protected] [mailto:[email protected]] On Behalf Of Arthur Cordell Sent: Friday, November 26, 2010 11:08 AM To: [email protected]; 'RE-DESIGNING WORK, INCOME DISTRIBUTION, EDUCATION' Subject: RE: [Ottawadissenters] Thinking the unthinkable - euro zone breakup All good questions. I imagine the investors are those managers of hedge funds, pension funds etc. ie., people "looking after our savings" and trying to maximize returns so they can earn bonuses. I suppose they have power because they have power, ie., they are in the "drivers seat" As to your last question, I haven't a clue. arthur From: [email protected] [mailto:[email protected]] On Behalf Of Michael Gurstein Sent: Friday, November 26, 2010 1:01 PM To: [email protected]; 'RE-DESIGNING WORK, INCOME DISTRIBUTION, EDUCATION' Subject: RE: [Ottawadissenters] Thinking the unthinkable - euro zone breakup What I don't understand about all this is who are these nameless "investors" whose opinions and emotional responses to short term financial situations seem to be governing the financial future of much of the Developed World? And who has ascribed this power to them and what would it take to bring this power back under some sort of democtratic control? M -----Original Message----- From: [email protected] [mailto:[email protected]] On Behalf Of Arthur Cordell Sent: Friday, November 26, 2010 9:45 AM To: 'RE-DESIGNING WORK, INCOME DISTRIBUTION, EDUCATION' Cc: [email protected] Subject: [Ottawadissenters] Thinking the unthinkable - euro zone breakup Thinking the unthinkable - euro zone breakup - Business - World business BERLIN - Contagion spreads from Ireland to Portugal and then to Spain, forcing European leaders to exhaust the $1 trillion bailout fund they set up only half a year ago to defend their ambitious single currency project. Sniping within the 16-nation euro zone mounts and popular support for the euro erodes as German taxpayers rebel against a series of costly rescues and austerity fatigue in the bloc's periphery reaches breaking point. Eventually one or more countries decide enough is enough and break away or are forced out, reintroducing the national currencies they used before tying their fate to Europe's audacious economic and monetary union. Unthinkable only a few weeks ago, a small but growing number of experts now believe some version of this nightmare scenario could become a reality for the euro zone if policymakers fail to unite behind a more forceful strategy for saving the euro and address investor concerns about fiscal and economic imbalances. Until now, doomsday predictions of a euro zone breakup have come mainly from Anglo-Saxon skeptics, some of whom saw the single currency bloc and its one-size-fits-all monetary policy as fatally flawed from the very start. Over the summer, British economist Christopher Smallwood of consultants Capital Economics produced a 20-page paper entitled "Why the euro zone needs to break up" and U.S. economist Nouriel Roubini, alias Dr. Doom, predicted euro members would be forced to abandon the single currency. But as the second wave of Europe's debt crisis gathers pace, engulfing Ireland and heaping pressure on Portugal and Spain, a new group of doubters is emerging. They believe it may be difficult for the euro zone to hold in its current form, even if many think that remains the most likely scenario. Some, like Financial Times commentator Gideon Rachman, say Germany could bolt if public frustration with bailouts mounts or if Berlin is unable to convince its euro partners to back its controversial plan for a new permanent rescue mechanism. Dissident academics have challenged the legality of German participation in the Greek rescue in the Federal Constitutional Court. If they won, the impact on the euro could be devastating. Others see a risk that economic divergence between Europe's stable core and debt-saddled periphery could end up splintering the bloc into a two-tier "Euro-North" and "Euro-South." Still others believe Germany could engineer the expulsion of euro weaklings like Greece that it feels should never have been allowed in. "I don't think we'll see a breakup of the euro and Germany returning to the deutschemark, but what we could see is a more homogeneous euro area purged of its low performers," said Domenico Lombardi, a former executive board member at the IMF who is president of the Oxford Institute for Economic Policy. These voices still represent a small minority, and few of the skeptics are convinced the euro zone will fracture anytime soon. Close observers of Europe, and the policymakers charged with defending the euro, dismiss the possibility of a breakup out of hand. They cite the huge emotional as well as economic investment in the project, the political will behind it, and the pain, complexity and humiliation an exit would bring. They point to the resilience of the euro itself, which has lost some 6 percent of its value against the U.S. dollar in the past three weeks but remains a strong, stable currency by historical standards. German Bundesbank president Axel Weber said Wednesday there was "no way back" from the euro, reassuring his French audience that politicians would simply come up with more money if their $1 trillion safety net proved insufficient. "My guess is that for quite a few years yet policymakers will do whatever they can to save this thing," said Katinka Barysch, deputy director of the Centre for European Reform. "If you sit in London, it's doomed. They don't understand the political investment. They look at the bond spreads and think it's doomed." Jacob Funk Kirkegaard, a fellow at the Peterson Institute for International Economics in Washington, said a breakup remained "unthinkable" and pointed to the bloc's response to the Greek meltdown, in which, after repeated delays, it tore up the rulebook and took decisive action to stop the rot. "If the euro were seriously at risk one could expect a much more forceful response," he said. "You would see the ECB printing 500 euro notes and dropping them from helicopters before Spain was forced to default or could endanger the euro." Still, if the recent turbulence has proven anything, it's that "shock and awe" measures are unlikely to appease investors for long, nor change their view that the bloc is fundamentally flawed because of a steep competitiveness gap that only a closer fiscal union may be able to solve. Going down this path is a non-starter for Germany, which has insisted instead that peripheral euro countries push through deflationary wage cuts and painful structural reforms to boost productivity, in line with its own successful economic model. The Greeks, Irish and Portuguese are going along with these policies for now, but skeptics worry that in the years to come this strategy will be exposed as deeply flawed and that destabilizing imbalances within the bloc will re-emerge. Copyright 2010 Thomson Reuters. Click for restrictions. 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