If Conventional Economic Weapons Work “Nuclear Option” is Out

The Samaras Government by stupendous, sagacious, and painful efforts, and by using “conventional economic weapons,” is pulling Greece out of its economic crisis. For the first time after four years, Greece next week will be able to borrow funds on the international financial markets.

I’m republishing this short reply that took place early in 2012, for the readers of this blog.

By Con George-Kotzabasis

A reply to Bruce Wilder, suggesting default for Greece and Italy as the remedy for their economic crisis.

In serious discussion it is wise to enter it carrying a sieve in one’s hands to separate the wheat from the chaff.

Your crystal clear “efficient calculating machine” that would implement your proposal of default, would be no other than a wise, brave, imaginative, and humane technocrat. So what exactly you have against technocrats? They are OK if they adopt your plan and only transported to Hades in toto for their ‘mortal sins’, if they don’t! Default was and is always an option. The distinguished economist Deepak Lal and exponent of the Austrian School of economics, long ago suggested such a schema. Lucas Papademos and Mario Monti, Prime Ministers of Greece and Italy respectively, both presumably have this option in their arsenal to be used as a last resort if everything else fails. But before they use this ‘nuclear’ option, they must try, and be given the right by all objective analysts and commentators, to resolve this economic crisis by ‘conventional’ means that could avoid a default which would open a big hole in their countries GDP and throw their people into pauperization for decades to come.

The Gravitational Force that Pulled European Nations into a Black Hole

As the superb and strong statesmanship of Antonis Samaras is pulling decisively Greece out of its economic crisis, I’m republishing this piece that was written in the midst of 2012, for the readers of this blog.

Government intervention always wills the good and works the bad.

By Con George-Kotzabasis

The European Union’s sovereign debt crisis was neither an act of fate nor an act of a free self-dependent man but an act of deluded ideology whose sails were blown by the long-lasting winds of government dirigisme, i.e., intervention, and welfare dependency. Once again it was the work, the social engineering, of the bien pensants in the form of a state directory of planning that would put a floor of security for the masses and protect them from falling into abject economic privation that was always, according to their thinking, the omnipresent and inevitable result of the unjust, harsh, and unequal regime of the capitalist competitive free market. The trouble was that this floor was made out of straw and at the first jump of an economic crisis–whose seeds were planted by government intervention,  loose monetary policy and low interest rates–would open a gaping hole through which this security would disappear and drown in a massive pool of unemployment and poverty.

The Eurozone’s one dimensional foundation of monetary union without banking and fiscal union could not sustain the European edifice in the long run with the differentiating regime of taxes, social benefits, and pensions that existed among its constituent states. The proliferation and prodigality of unsustainable Entitlement Economies, which have been the characteristics of the welfare states of Europe especially in the south, could not have been continued without cracking the economic underpinnings of the Eurozone. Also, the European Central Bank’s enabling of low risk premiums on interest rates of government debt, encouraged Greece, Portugal, Spain, Italy, and Ireland to go on an orgy of borrowing and overspending. The inevitable outcome was a stampede of budget deficits that were unsustainable and the eventual loss of all credibility in the financial markets that the afflicted States would be able to pay back their debts and thus the shutting out of the latter from the global financial lending pool.

Since no private person would hazard to lend money to states lassoed in sovereign debt the only alternative left was for the richest countries in the Eurozone, such as Germany, to become the lenders and continue to finance the former for their economic survival. But such help would be given under very severe terms encapsulated in strict Memoranda to the receiving countries with the stipulation that the latter would adopt and implement stringent austerity measures that would decrease substantially government expenditure, would restructure and reform their economies making them more competitive, and privatizing public enterprises, whose inefficiency and lack of a diligent working ethos can only be sustained by a continuous expensive staple of government subsidies.

These austerity measures, however, whose formulators have been the European Commission, the European Central Bank, and the International Monetary Fund, the so called Troika, are forcefully rejected by the people of those countries who for decades have been inured to the social and economic comforts and benefits engendered by the reckless spending of their governments, and are refusing to accept any cuts to these benefits even when some are aware that the latter can no longer be provided since the governments’ coffers are empty and the convenience of funding these benefits by borrowing, as they have done in the past, is no longer available due to their nation’s sovereign debt. Moreover, these austerity measures initially had not being complemented with policies of economic development and thus led to the worsening of the economic conditions of those countries that adopted them, such as Greece, leading to unprecedented massive unemployment by the closure of large and small business enterprises and to the smashing of the middle class which is the cornerstone of free societies.

This situation is dangerously engendering the fragmentation of social cohesion in those countries and giving rise to political parties of the extreme right and left, coming out of the foam of waves of violent demonstrations that imminently threaten democracy. A latest illustration of this danger are the attacks by petrol bombs and other incendiary devices by hooded youths of anarchists and extreme leftists in Greece against the homes of outspoken journalists, offices of the governing coalition of New Democracy, Pasok, and the Democratic Left, and the burning of Bank’s ATMs. And of particular significance are the attacks on journalists, which are a blatant violation of free speech and a sinister attempt to intimidate them from expressing their opinion about events and criticizing politicians of Syriza, the official opposition, of whom obviously the fire carrying mobs are its ardent supporters.

This will be the tragic legacy of European big government and its ill-considered, indeed, destructive intervention in the processes of the free market that for at least two centuries have delivered prosperity and an unprecedented increase in the standard of living of the masses; as the socialist politicians from Francois Mitterand to Jaques Delors–the architects and enforcers of the European Monetary Union that forced Germany to succumb and pay the price of the unity of west and east Germany as demanded by France–and their present disciples of  etatisme are in the process of killing the goose that laid the golden egg, i.e., the unimpeded free market, and by doing so unconsciously and unwillingly are generating and  unleashing the brutal forces of fascism and leftist directorates of totalitarianism on the landscape of Europe.

To avoid this slide to the hell of totalitarianism only the rise of statesmen who “can act beneath heaven as if they were placed above it” is consummated. The fiscal and balance of payments crisis can only be remedied by substantial cuts in government spending and the euthanasia of big government, and by the privatization of debt ridden public enterprises–that are the last strongholds of obtuse and doctrinaire unions– and by the freeing of private enterprise to pursue profit by competition and entrepreneurial creativity and dynamism, respectively. These ‘bitter’ remedies can only be administered by statesmen of the calibre of Lee Kuan Yeu and Antonis Samaras. The latter, indeed, might not only be the progenitor of the Greek Renaissance but also the paradigmatic leader of other European politicians to imitate for their own European Renaissance. The Newtonian apple that will stop the European ‘discord’ that currently threatens the demise of the EU will fall to the gravitational force of such statesmanship.

Hic Rhodus hic salta

 

The Danger of Tyros Handling War Strategy

I’m republishing this short piece that was written on October, 2007, for the readers of this blog.

A short reply by Con George-Kotzabasis to:

Clinton’s Statement on Kyl-Lieberman Resolution Washington Note, September 30, 2007

Like the two eminent commentators of the New York Times Paul Krugman and Frank Rich, respectable in their own professions as an economist and art critic respectably, and a bevy of politicians like Nancy Pelosi and Harry Reid, not so respectable because of their populist stunt, all of them being novices par excellence in the affairs of war who have attempted to pass judgment on the war in Iraq and cashier its victory despite evidence to the contrary, we now have another “tired less” tyro joining them in war strategy. The scholar and blogger Steven Clemons of the Washington Note. Clemons indirectly rebukes Senator Clinton for her support and vote of the Kyl-Lieberman resolution that designates the Iranian Revolutionary Guard as a terrorist organization, fearing that this will allow Bush to manipulate this resolution and use it to attack Iran.

He calls therefore on Senator Clinton to exercise “leadership in passing an explicit Senate resolution forbidding Bush from taking action against Iran without clear advice and consent from Congress”. But such action is not a declaration of war against Iran needing the authorization of Congress. It’s a strategic force de frappe on the part of the US against Iran in which the elements of secrecy and surprise are pivotal and decisive in the success of such an attack. Therefore Clemons’ call is strategically oxymoronic.

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Pasok Jeopardizes Greek Government by Refusing to Pay Twenty-five Euros

By Con George-Kotzabasis

The present politically negative stand of Pasok to the Samaras government introduction of the payment of twenty-five euros for medical treatment in public hospitals for those who can afford to pay it is utterly unwise and politically reprehensible and condemnable as it could destabilize the coalition government of New Democracy and Pasok. The latter must realize that its political fortune and éclat is tied up solely with the success of the Samaras government in pulling the country out of the crisis and by putting it on the trajectory of economic development and hence to the gradual reduction of unemployment, and not on any ephemeral gains, on the polls. In the event which is most unlikely that the electorate will not render to Pasok the justified plaudits for the economic success of the government, history will pass the ultimate judgment and write in golden letters the prudent participation of Pasok in the formation of the Samaras government as its ultimate contribution toward saving Greece from economic and political catastrophe.

This stupendous success of the Coalition Government will erase all other parties, from Syriza to the Golden Dawn, from the electoral map and will be their Nemesis for their sinister and perfidious populist policies that shamelessly deceived a sizeable part of the people by their totally false promises and completely screwball inapplicable policies. Only New Democracy and Pasok will reap the fruits of this tremendous success that had prevented Greece from falling into the abyss of disaster. It is for this reason that Pasok must immediately cease its adverse stand toward the twenty-five euro payment whose raison d’etre is the restructuring of the medical system so it can render better services to its more indigent patients.

Serious economic analysts both within and outside Greece are forecasting that the country by the end of 2014 will be out of the economic crisis as a result of the painful but necessary austerity measures that the Samaras government had taken, by reducing the public sector that impeded economic growth, by privatizing public corporations, and by making the economy more competitive and entrepreneurial. Hence the prudent policies of the Samaras government would draw foreign investment into the country that in turn would lead to the resurgence of the economy and for the first time in six years 2014 would show, according to economic predictions, a fiscal surplus and a small growth of 0.5 in Gross Domestic Product.

Needless to say political stability is a prerequisite for starting a spree of investment. Pasok by foolishly shaking this stability for electoral interests apparently seems to be unaware that by doing so it hinders and discourages indigenous and international entrepreneurs from making any investments that are so vital for the economic recovery of the country.

It is this great achievement of the government in pulling Greece out of the crisis that Pasok in an unprecedented conduct of political frivolity could jeopardize by refusing to pay a twenty-five euro fee for treatment in a public hospital, which could bring about the collapse of the Samaras government.

Obama Diminishes Trust of Allies and Increases Confidence of Enemies

I’m republishing this piece that was written on October 2011.

By Con George-Kotzabasis

Barack Obama has been elected as president of the most powerful nation in the world that since the end of the Second World War has been the bulwark of freedom against its infernal enemies, i.e., the former Soviet Union and its allies. In the twentieth-first century Western civilization is threatened by a new implacable and irreconcilable enemy, fanatical Islam; and the USA is the only nation in the world that can defeat this foe. But president Obama has already failed both tests of “knowing thy enemy,” and as a sagacious strong respectful leader. He has weakened America both before the eyes of its friends and allies and, most dangerously, its enemies.

The nations of Eastern Europe are rapidly losing their trust toward the US that the latter will protect and defend their interests and security, since Obama’s withdrawal of the missile defence shield from Poland and Czechoslovakia and his concessions to the Russians. And the enemies of America, such as Iran and its multiple terrorist proxies are heartened and have increased their confidence that in Obama they have before them a giant eunuch who is incapable and unwilling to use force, even as a last resort, against them. Since Obama has replaced America’s superpower ‘Jupiterian’ bolt diplomacy with olive branches toward them.

The “dangerous scenarios,” of which you are concerned with, are already in their incubatory stage: a nuclear armed Iran that would start a proliferation of nuclear weapons in the region with all the great dangers that would issue from such proliferation, especially in a region that is replete with the votaries of fanatical Islam. Thus to your question what kind of advice one would give to Obama in such an impending crisis, it would be the most heavily ‘armed advice’ that would fall on his shoulders. But Obama has neither the spine nor the balls to carry such heavy advice on his morally rickety frame, and least of all bring it to fruition as a last resort. Thus any strong advice given to a congenitally weak president would be a barren exercise.

The Mechanistic Thinking of Civil Libertarians

I’m republishing this short piece for the readers of this Blog.

A reply by Con George-Kotzabasis to: Keeping Australia Safe By An Improper Exercise Of Power  By Surya Deva

On Line Opinion  July 28, 2007

The mechanistic thinking and unimaginative conclusions of this article are typical of someone who has been trained in legal studies and who carries proudly and aloft the banner of the civil libertarians. The latter as yet cannot see the great distinction between a crime committed and a crime prevented and the distinct ways and means that are needed to apprehend its felons in each case.

Everyone knows when a crime is committed. But no one knows when a crime is going to be committed. And it’s much easier to search and find the suspects of the former, but it’s by far more difficult to identify the suspects of the latter. And while it might be easy to catch a felon who committed a crime and bring him/her to justice with the existing laws, it’s almost impossible to apprehend and bring to justice someone who is preparing to commit a crime with the same laws. It’s like in medicine. While one can cure a known and an occurring disease with the current remedies of medical science, one cannot prevent a relatively unknown deadly disease from spreading with the same remedies and one has to resort to hard and drastic measures to stop it from happening.

Likewise in the age of terror to prevent a terrorist action from occurring, one has to take drastic, if not draconian, measures against it, because the conventional existing laws are totally ineffective to stop it.It’s because of this cerebral inability mechanistic thinking of civil libertarians to see the fundamental distinction between a crime committed and a crime prevented and the different “remedies” that apply in each case, that all their strictures and arguments against the incursions of governments on people’s civil liberties, are trite, irrelevant, and intellectually out of depth. 

Your opinion on this issue… 

 

President Obama Appeaser of Radical Islam

By Con George-Kotzabasis

Barack Obama was, is, and will remain an appeaser of radical Islam, as it is a constituent part of his weak character and more dangerously of his effete leadership. Like a fearful child he avoids his fears by hiding his face under the bed-sheets. This is clearly illustrated by his fudging of the word “jihadist” with its inherent fanatical murderous action –which he fears to admit– by changing it to the less fearsome one of “workplace violence,” his description of the Fort Hood massacre, whose jihadist perpetrator Dr Nidal Hasan was sentenced to death today. It is by such changes and meaningless laughable words within the scenario of terrorism that the commander-in-chief of the most powerful nation purports to fight the existential threat that radical Islam poses to Western civilization. A black comedy ham is the occupier of the White House.

Reply to American that to Miss Opportunity for Rapprochement with Iran will Have Big Consequences

By Con George-Kotzabasis

It will have even bigger consequences if it succeeds by wishful thinking.  Rapprochement in itself is meaningless unless there is clear and unambiguous understanding and agreement between the parties about the conditions of such rapprochement. It would be a mistake to deduce from the rhetorically conciliatory statements of President Rouhani that Iran has abandoned its desire to acquire nuclear weapons. And to differentiate himself from the holocaustian statements of his predecessor, Ahmadinejad, is hardly an indication that the new regime is repudiating its clandestine goal to develop a nuclear weapon. Only if Rouhani allows open and rigorous inspections in all areas of Iran where Western intelligence cogently suspects the secret development of a nuclear weapon will the experts be convinced that Iran has changed tack in regard to its nuclear arsenal.

It is more probable, because Rouhani perceives a weak president in the United States, he will be exploiting that weakness to achieve Iran’s historic and Islamic aim to enter the nuclear club by persuading Obama about the peaceful purpose of Iran’s nuclear build-up. Rouhani is aware that Obama needs and desires a suspension of tensions so he will have the excuse to take all options off the table and thus as an incompetent and effete president tranquilize himself by false hopes. And Rouhani and his advisors know, that this détente can be achieved on promissory notes that will never be cashed. Thus by providing Obama the confidence that he can come to a reasonable agreement with Iran, Rouhani achieves two diplomatic goals. (1) He defers USA action from resolving speedily and decisively the issue of nuclear weapons by creating the euphoria that this matter can be resolved by prolonged negotiations, a dilatoriness that Obama is most happy to accept as he desires to push the hard options, if they are needed, in the future ahead with the hope that they will never be used, and which also suits Rouhani perfectly as it will give Iran more time to achieve its strategic goal to build the bomb. And (2) weakening Israel’s resolve to unilaterally attack Iran’s nuclear installations, if other Western states are found to be wanting in stopping Iran from acquiring nuclear armaments, by isolating Israel from its major ally, the USA, and from other Western nations, and thus making it more difficult for Israel to strike.

It is for this reason that Clemons should be more restrained in his optimism of the opportunity of reaching a rapprochement with Iran when a more sinister and malign opportunity could be hidden behind the apparently benign talk of Rouhani.

Senator Schumer Lambasts Obama’s Stupid and Inconsistent Diplomacy

In view of Obama’s variable inconsistencies in the Syrian Crisis declaring on the one hand that he would be attacking Syria for breaking his “red line,” for using chemical weapons against its own people, and, on the other, dithering and postponing this attack until its authorization by Congress, I’m republishing the following article that was written three years ago for the readers of this blog.  

By Con George-Kotzabasis

Would Edward Luce and Daniel Dombey, and by implication Steve Clemons, expect Robert Gibbs, the Press Secretary, to say that Barack Obama agrees “with what Senator Schumer said? It is astonishing to see Clemons diverting the issue of the total freeze of settlements, which Schumer correctly criticized as a grave error on the part of Obama contra Israel, to what Schumer’s stand was to Jesse Helms and to John Bolton “few years ago.”

Clemons is entitled to his opinions but he is not entitled to his facts. The facts are that the foolish imposition of the total freeze of settlements on the Netanyahu government by the Obama administration’s lack of foresight that it would be politically unrealizable for Israel and that it would evolve and become for the Palestinians, as it did, a rigid condition for their participation with any talks with Israel, was the major factor that derailed Obama’s engine of diplomacy from its track that would bring the two belligerents to the negotiating table. It was precisely this quintessentially wrong and injudicious policy of Obama that Senator Schumer rightly criticized as being the reason of the administration’s abysmal failure in the Middle East. Another fact is that Obama’s diplomacy is inconsistent, rewarding his enemies and penalizing his friends. While he claims that his diplomacy is indiscriminate and is based on soft and smart power coming on doves’ feet and extends his hand in a velvet glove to the enemies of America, he carries a bludgeon in his hand in his relations with his strongest and most loyal ally, in this case Israel.

Throughout history there has never been a case when a nation engaged in war with implacable enemies would chastise and alienate its most steadfast and reliable ally for the purpose to placate its enemies. Obama will go down in history as the only leader who not only doltishly and doggedly opened the door of diplomacy to an enemy such as Iran which has been training in its own country members of the Taliban and supplying them with weapons–as well as its proxies, Hamas and Hezbollah–to kill American soldiers in Afghanistan, but who was also willing to sacrifice the vital interests of his most staunch ally against Islamist terror, Israel, on the altar of this spineless, strategically unprincipled, and totally fallible diplomacy.

The above emitted the two following responses:

Posted by Dan KervickApr 27 2010, 6:54AM – Link

Kotzabasis, WigWag seemed to be wondering a few days ago why those posts in which you make a serious, debatable point are ignored. But can there be any doubt why people habitually turn you off, when so many of your posts consist in cowardly, third-person personal characterizations of other contributors, lamely shouted out to no one in particular?

 

Posted by WigWag, Apr 27 2010, 9:45AM – Link

Actually why the interesting point Kotz made is never debated is rather plain. His point was an astute one, but as I am sure Kotz would be the first to admit, it was hardly an original one. Kotz was making precisely the same point Schumer was; that by offering to conduct their negotiations for them, the Obama Administration provides an incentive for the Palestinians not to negotiate at all. Kotz, Schumer and many other sage observers have also made the point that by making demands on Israel that Obama knew, or should have known, that it wouldn’t comply with, it was Obama himself who was making his stated goal of getting negotiations started much more difficult.

Steve Clemons in his diatribe against Schumer never responded to this point and Dan Kervick hasn’t either. Neither has any other serious commentator as far as I can tell.

It seems to me that the lack of response to the Schumer/Kotz allegation is evidence of the fact that the point is irrefutable.

If it’s not, someone should give it a try.

Greece: The “Closure” of the National Broadcaster

By Con George-Kotzabasis

The politically thoughtless and opposing stand of Pasok and Demar (Democratic Left) to the closure of the corrupt, wasteful, and non-transparent opaque ERT, by the Samaras government, that needed three or eight times more staff than it was necessary, and its replacement in the next few months by a new public broadcaster employing its personnel on axiocratic criteria and not on corrupt government appointments, could endanger the cohesion of the tripartite coalition that is so crucial of Greece’s exit from the economic crisis. Venizelos and Kouvelis must realize that the political fortunes of their parties, since they made their intelligent, brave, and politically responsible decision to support a New Democracy government, are tied-up with the success or not of the Samaras government of extricating the country from its economic woes and thus saving the country from a devastating and calamitous bankruptcy. The electorate will not remember or extol their parties for their stand against the closure of ERT or for any other issue that is secondary to the main goal, i.e., pulling Greece out of the crisis, but will punish them electorally if the Samaras government fails in this great task.

That is why it is stupendous foolishness on the part of Pasok and Demar to jeopardise the up till now correct policies of the Samaras government that show clearly, according to all serious economic commentators and institutions such as Standard and Poor’s and Finch, that Greece has been put on the right track to overcome the crisis and these policies will reignite its economy at the beginning of next year.

The respective leaders of Pasok and Demar must be constantly alert and on guard not to derail the Samaras government, either by inadvertence or by frivolous, doltish, and politically irresponsible stunts, which with accelerating speed reaches the goal of putting an end to the crisis. As the corollary to the derailment of the Samaras government will be the total political obliteration of Pasok and Demar as a result of their association with a failed government. But it will be worse; their destruction will lead to the destruction of Greece itself. The collapse of the Samaras government will be followed by the rise to power either of the extreme left or the extreme right. Thus Pasok and Demar by contributing accidentally if not stupidly to the collapse of New Democracy will be opening the doors of totalitarianism to the country. Will they persist to oppose the Samaras government on secondary issues with the danger of creating an unstoppable momentum against it that could fracture the ideologically brittle composition of the tripartite government? Will Venizelos and Kouvelis foolishly sow their political wild oats on a ground whose pernicious crop will be the fascistic twins, Syriza or Golden Dawn?

Hic Rhodus hic salta