Plagued by seemingly perpetual debt problems due to large welfare states, the Euro-zone, the 17 countries that make up the European Union, has fallen into a recession for the second time since 2009:
The euro zone debt crisis dragged the bloc into its second recession since 2009 in the third quarter despite modest growth in Germany and France, data showed on Thursday.
The French and German economies both managed 0.2 percent growth in the July-to-September period but their resilience could not save the 17-nation bloc from contraction as the likes of The Netherlands, Spain, Italy and Austria shrank.
Economic output in the euro zone fell 0.1 percent in the quarter, following a 0.2 percent drop in the second quarter.
Those two quarters of contraction put the euro zone’s 9.4 trillion euro ($12 trillion) economy back into recession, although Italy and Spain have been contracting for a year already and Greece is suffering an outright depression.
A rebound in Europe is still far off. The debt crisis that began in Greece in late 2009 is still reverberating around the globe and holding back a lasting recovery.
Analysts said even the euro zone’s top two economies were likely to succumb in the final three months of the year.
International Data on Living Standards Show that the United States Should Not Become More Like Europe
I’m not a big fan on international bureaucracies, particularly the Paris-based Organization for Economic Cooperation and Development. The OECD, funded by American tax dollars, has become infamous for its support of statist pro-Obama policies.
President Obama showcased his ignorance of world political history at the G-20 summit in London recently when he made a crack at his political predecessors’ penchant for back-room brandy sessions:
Well, if there’s just Roosevelt and Churchill sitting in a room with a brandy, that’s an easier negotiation. But that’s not the world we live in, and it shouldn’t be the world that we live in.
I realize that every generation likes to think of itself as unique and facing problems their ancestors did not. It’s the easiest way to excuse failure. No one will blame a world leader for poorly handling a challenge that the world has never seen.
When President Obama arrives in London this week he will meet with the leader of Germany, a nation where his election has brought newfound goodwill towards America; but will the goodwill be enough to force the hands of Germany to conform to Washington’s desires for additional stimulus and bailouts? If the latest media reports, which point towards an Administration attempting to dial down expectations, are any indication, then the answer is most likely a soft no.
The NYT is reporting that little ground is expected to be made in regards to additional German stimulus, with Chancellor Angela Merkel expected to cite fiscal discipline as a reason for German non-cooperation with President Obama’s Administration on the issue-
This past weekend, I took my wife to see the film Valkyrie. Featuring Tom Cruise, Valkyrie is already ranked among the top five films of the season. Valkyrie details the plot of July 20, 1944 devised by German officers to assassinate Adolph Hitler. Cruise played the mastermind of the plot Colonel Claus von Stauffenberg.
I make no claim to have a depth of understanding of Hitler’s National Socialism and the details of the War effort. However, I was raised by a father who was a World War II veteran who was present on D-Day and both uncles served in the European theater during that great War.
Cyprus clinched a last-ditch deal with international lenders to shut down its second-largest bank and inflict heavy losses on uninsured depositors, including wealthy Russians, in return for a 10 billion euro ($13 billion) bailout.
Swiftly backed by euro zone finance ministers, the plan will spare the Mediterranean island a financial meltdown by winding down the largely state-owned Popular Bank of Cyprus, also known as Laiki, and shifting deposits below 100,000 euros to the Bank of Cyprus to create a “good bank”.
Deposits above 100,000 euros in both banks, which are not guaranteed under EU law, will be frozen and used to resolve Laiki’s debts and recapitalize Bank of Cyprus through a deposit/equity conversion.
The deal has caused friction between Russia and Germany, which orchestrated the bailout. As noted in the excerpt above, many wealthy Russians had money in Cypriot banks, but have now seen their assets disappear over night.
Some folks over at MTV better lock up their doors, because a couple of videos they just created (EDIT: Apparently, these videos are old, but they are still incredibly relevant to what’s going on right now. Thanks, northnodes.) are making a very interesting argument about the National Defense Authorization Act, and I doubt that will keep them in the government’s good graces.
There’s the old Internet rule called “Godwin’s Law,” but after seeing what our government is trying to do, I’m not convinced anyone should ever bring it up.
On one hand, we have SOPA threatening to remove our internet access if we so merely link to a music video, and on the other, we have the NDAA threatening to lock us up on the whims of some government bureaucrat. Between them? Well, no it’s not that dwindling area of freedom, its the Transportation Security Administration, conducting its campaign of government sponsored sexual molestation at our nation’s airports.
The Federal Reserve, which has faced much criticism in recent years over its constant intervention in the nation’s economy, did something it hasn’t done in its 98 year history; it held a press conference. Ben Bernanke defended the Federal Reserve’s actions to reporters and alleviate concerns over inflation:
[Bernanke] mostly retraced familiar ground, and the markets rose only slightly as he spoke, suggesting that investors learned little of consequence, although the three major indexes ended the day strongly. The news was in the spectacle of a Fed chairman addressing public concerns on live television.
The central bank, so careful for so long to cultivate a sense that it was above politics, will now hold regular news conferences just like so many others in Washington, hoping to improve its image and build support for its policies.
Mr. Bernanke’s message Wednesday was that the Fed was doing all it could to spur growth and increase employment without causing inflation to rise. He said that inflation must take precedence over employment because inflation would result in job losses.
“While it is very, very important to help the economy create jobs and help to support the recovery, I think every central banker understands that keeping inflation low is absolutely essential to a successful economy, and we will do what we can to make sure that happens,” he said.
He spoke after the Fed lowered its projections for domestic economic growth in 2011, predicting growth of 3.1 to 3.3 percent. In January, the Fed had predicted growth of 3.4 to 3.9 percent, but Mr. Bernanke said that exports, construction spending and military spending had all been lower than expected.
President Barack Obama is getting an economics lesson from German Chancellor Angela Merkel:
Chancellor Angela Merkel championed German export strength as “the right thing” for her country, spurning President Barack Obama’s call to boost private spending as both leaders prepare for Group of 20 talks.
Merkel, addressing a business audience in Berlin today, said she told Obama in a phone call that cutting government debt is “absolutely important for us,” exposing a second point of contention ahead of the June 26-27 G-20 summit in Canada.
Reducing the budget deficit by 10 billion euros ($12 billion) per year “won’t put a brake on the world’s economic growth,” Merkel said, relating what she told Obama yesterday. Germans are more likely to spend money if they feel the government “is taking precautions” to ensure solid finances, she said.
While Obama is urging countries in the G-20 to spend, spend, spend. Merkel is basically saying that spending more money, or the Keynesian tactic of “stimulating” the economy through deficit spending, will only set Germany up for failure in the future.
Accepting fiscal advice from the United States is like going to a drug dealer to break a heroin habit.
The groundbreaking industrial rock band Rammstein has caught a storm of censorship in Germany for their new Liebe Ich Fur Alle Da (Love Is There For Everyone):
The news reached the band while it was preparing for its European tour, which starts in Portugal and takes it through the continent’s major concert venues. Rammstein’s new album “Liebe ist für alle da” (“Love is There for Everyone”), which was topping the German charts, was “indexed,” or censored, by the Federal Department for Media Harmful to Young Persons. As of last Wednesday, it was only allowed to be sold to adults with identification. It was an interesting coincidence that the celebrations marking the 20th anniversary of the fall of the Berlin Wall were beginning in Berlin at the same time, because the Rammstein case is also a tale of art in reunified Germany.
With a song titled “Pussy,” which features a music video where the band members literally have sex with several porn stars, it’s no wonder that Liebe Ist Fur Alle Da has raised the ire of Germany’s politicians.
While I would argue that Rammstein is a rock band of a calibre that the United States has few to match, this story provides a great example of why we should be grateful to live in the United States. The First Amendment of the Constitution has kept our Tipper Gores and Hillary Clintons from enacting their own American Federal Department for Media Harmful to Young Persons.