The Problem of Libya is Europe's Problem

After the American Century

There are daily calls for the United States to do something dramatic to tip the balance in Libya. The clamor comes from many places, from Republicans like John McCain to some European politicians to the Libyan rebels themselves, who have asked for a "No Fly" zone. Once again, the United States is being asked to serve as the world's policeman, even though it is still not extricated from that role in Iraq or Afghanistan. And in case no one remembers, the US has a gigantic budget deficit. It actually cannot afford to do much policing right now, because the Republicans have lowered taxes to the point that the budget is deeply in the red.

Far fewer people call for the EU to do something, perhaps because the EU has never managed to create a common, visible, and enforceable foreign policy. Since Libya is literally on the doorstep, almost as much as Kosovo, one might think the Europeans had learned something from its inaction in that earlier crisis. Apparently not.

This would seem to leave NATO as the most plausible actor, if anyone is going to do anything. But NATO apparently is going to wait to see if the UN gives it permission to do anything. Meanwhile, the Libyan dictator is crushing the rebels, relying in part on mercenaries. He is bombing civilians and committing crimes against humanity (as he has been doing for 42 years, actually.) 

It was so much easier in the case of Egypt or Tunisia, where the local population was able to throw off their dictators with little bloodshed. But the problem with Libya (and also with Iran) is that the government is quite willing to imprison, torture, and slaughter its own people in order to remain in power. Europeans need to stand up and represent something in the world. There are many things that can be done short of military action. These include breaking diplomatic relations, freezing Libyan assets in European banks, blockading Libyan ports, stopping all flights to and from Libya except those helping foreign workers to escape, refusing to buy Libyan oil until the present government abdicates, and so on.

So far, however, the EU is acting not like a single power but like a herd of cats, all going off in different directions. This sort of thing was supposed to end with the Treaty of Lisbon, but the crisis in Libya has exposed the EU's lack of central authority and its inability to respond effectively to events on its own doorstep. This should not be a problem for the United States at all. The EU has all the resources and military might necessary to deal with Libya. Perhaps it will pull itself together and do something before it is too late.
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27 Oct. 2011:  I am pleased that Europe did rise to the challenge, and used NATO to back the democratic forces that threw out the Libyan dictator. Next, can Europe also help Libya to a lasting peace?

What the Republican Budget Cuts Would Mean

After the American Century

According to MoveOn, the political action group, the cuts that Republicans have proposed to the Federal budget would have devastating effects on health and education. I have found their analysis to be generally correct in the past. Their proposals are many, but here are the ten worst ones:

1. Destroy 700,000 jobs, according to an independent economic analysis.

2. Eliminate all federal funding for National Public Radio and public television.

3. Cut $1.3 billion from community health centers—which will deprive more than 3 million low-income people of health care over the next few months.

4. Cut nearly a billion dollars in food and health care assistance to pregnant women, new mothers, and children.

5. Cut funds for Head Start, which would drive more than 200,000 poor children out of pre-school programs that for decades have proven an effective way to improve their chances to do well in school.

6. Cut educational funds, which will force states to fire 65,000 teachers and aides, dramatically increasing class sizes.

7. Cut some or all financial aid for 9.4 million low- and middle-income college students.

8. Slash $1.6 billion from the National Institutes of Health, which would affect investigations into many diseases and force some researchers to stop their work.

9. End the only federal family planning program, including cutting all federal funding that goes to Planned Parenthood to support cancer screenings and other women's health care.

10. Send 10,000 low-income veterans into homelessness, cutting in half the number  who get housing vouchers this year.

The same Republicans, notably John McCain, are calling on President Obama to get involved in Libya, which would further drain the US Treasury and create more veterans.

Danish Politics: The Ministers Have No Clothes

After the American Century

The gap between Danish political rhetoric and Danish lived reality is reaching epic proportions. Assuming the national character has not changed too much, it is no wonder Hans Christian Andersen wrote a famous story called "The Emperor's New Clothes." Readers will no doubt recall that the Emperor thought he was being arrayed in extremely fine clothing, but actually was putting on nothing at all. Even his subjects (or the public) went along with the fantasy, until finally a child pointed out that the King was in fact naked.

Most of the Ministers in Denmark are now similarly naked. The Minister in charge of finance cannot come close to balancing the budget, and yet keeps claiming that the tax reductions for the wealthy put through just two years ago, cannot be the cause of the problem. Rather, he argues, everyone should work longer hours, many public employees should be fired, libraries closed, and retirement laws be changed, so people will work longer. Meanwhile, everyone knows that the nation has a huge problem with black market labor (typically labor in people's homes such as plumbing and electrical work), which the government has not been able to deal with. 

But the finance minister actually has fewer problems than most of the others. The government has continually insisted that its policies will raise the level of the schools and universities, but now everyone can see that in fact schools are closing, faculty are being fired, and the number of hours of teaching received by students has been in decline for years. The Ministry involved now is trying to put the blame on the schools and universities, as if they had cut their own budgets. These politicians are nakedly fools.

Then there is the pathetic figure of the Minister in charge of allowing (well, mostly preventing) immigrants and refugees into the country. She and her predecessors in the post have, for more than a decade, broken the UN guarantees to stateless persons. A whole line of Ministers from this government have consistently misinformed people who had a right to Danish citizenship, people who were born in Denmark, educated in Denmark, and are now adults working in Denmark. These people have been denied citizenship, over and over, illegally. This would seem to be a serious breach of law and call for an investigation. But the same people who broke the law will now "investigate" themselves. A few right-wing politicians are now complaining about the UN, as if it were the problem!

Then there is the pathetic government organization that is supposed to ensure that the banks in Denmark are solvent. This institution decided that the Amager Bank was credit worthy, though in trouble, and lent that bank more than two billion dollars. Given this apparent certificate of good health, many kept their money in that bank, including several local governments. One quarter of a year later, Amager Bank lies in ruins, and those who owned stock in it, and those who had deposits larger than those insured by the  government, have lost their money. The loss is the equivalent of $200 for every man, woman, and child living in Denmark. The failure also weakens the Danish kroner, forcing up interest rates. A fine government, indeed! One mistakenly had thought that a conservative government could at least manage the business side of things.

The list is by no means complete, but how much naked incompetence and mismanagement should one put into a single blog? Suffice it to say that the current Foreign Minister performed so badly that her own party forced her to resign as their leader. But she is still in office.  

Then there is the former Minister in charge of research who intervened, illegally, and leaked confidential documents, in an attempt to help a researcher whom he liked, though it is now clear that her "results" were cooked up, based on non-existent rats in a non-existent Spanish research lab.  So he, too, is naked. But will there be a real investigation?

The list could go on, but how many naked Ministers can one stand to look at?

Governemnt is not a Business, and it should not be allowed to claim bankruptcy

After the American Century

In the US there is suddenly talk of lettering state governments declare themselves insolvent, and go through some form of bankruptcy. This is a very bad idea, and not just, as several people immediately pointed out, because such talk will immediately raise fears on the bond market. States will start to pay a premium in interest to get anyone to buy their bonds, as the New York Times has noted. Such bonds have long been thought to be the epitome of what is safe to invest in. Not much profit, but not much danger either. Take away the security of state bonds, and the markets are going to become restless.

But that is not my main argument against this idea. The chief problem is that allowing states to declare bankruptcy allows them to become irresponsible. It allows legislators to start things they cannot finish. It invites them to pass bills, to make promises, to offer pensions to state employees, that are not funded through sufficient taxation. This is the modern form of Greek democracy, and it has been tried already in Greece, and found wanting.

The American people are among the richest per capita on earth. If they do not have enough money in their state budgets, it is because they have resisted paying taxes sufficient to meet their obligations. California is the most obvious example, as its population voted to cap taxation at an unreasonably low level. Their tax revolt in the late 1970s was irresponsible then, it was irresponsible since, and it remains so.

If the Republican Party were really a party of fiscal responsibility, it would oppose this idea with every ounce of its collective energy. Instead, it seems to be part of the problem. Members of both parties are exploring this idea. If it comes to fruition, the United States will have taken a step toward self-destruction. The US will be correctly judged a more dangerous place to invest money. State employees will live with the threat that their pensions may never be paid out. And all citizens will find that the cost of government rises, in the form of higher borrowing rates, while the money available to provide services correspondingly falls.

This may be the worst idea to come along since the courts decided that corporations were "persons." Government is not a business that can periodically fail. It is the foundation of society. It is a contract between the citizens that cannot be broken, not a corporation that can be reconstructed by and for bankers. Talk of letting government fail financially cannot be separated from a more general failure of trust between the citizens. Government is about mutual obligation. It is not an investment that one pulls out of.

Americans have lived with a stable system so long that they have no historical experience of the disasters that come with fiscal irresponsibility. Undermine the state government, and you undermine the dollar itself. I am not talking about the dollar losing a few percentage points against the Euro. I am talking about the Japanese and the Chinese deciding not to buy dollar debt anymore, because it is too risky. For a taste of what that might mean, look at Greece, right now, with the difference that the EU has come along to bail out Greece. But no economy is big enough to bail out the United States.