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Thursday, May 20, 2010

Glorious multiculturalism

Group Backs Ritual ‘Nick’ as Female Circumcision Option

The group in question being none other than the American Pediatric Association.

In a controversial change to a longstanding policy concerning the practice of female circumcision in some African and Asian cultures, the American Academy of Pediatrics is suggesting that American doctors be given permission to perform a ceremonial pinprick or “nick” on girls from these cultures if it would keep their families from sending them overseas for the full circumcision.

The academy’s committee on bioethics, in a policy statement last week, said some pediatricians had suggested that current federal law, which “makes criminal any nonmedical procedure performed on the genitals” of a girl in the United States, has had the unintended consequence of driving some families to take their daughters to other countries to undergo mutilation.

“It might be more effective if federal and state laws enabled pediatricians to reach out to families by offering a ritual nick as a possible compromise to avoid greater harm,” the group said.


This reminds me of an old shopworn argument for welfare: if we don't pay these people just to sit around, then they'll mug us! Not, of course, how about you--welfare recipient--worry over testing our limits and being grateful for the fruits of a civilized nation.

In similar fashion, we give Muslim pediatricians the okay to 'nick' an infant girl's genitals because, heaven forbid, these people might leave! What on earth would we possibly do without them? Can anybody even imagine the hell on earth that would be a society without people who want clitorectomies performed on their infant daughters? Has there even existed such a strange, utopian land where the question of what degree we would harm an infant girl's genitals never came up? Where? When?

Some questions it is not even within the mind of man to comprehend ...

Thursday, May 13, 2010

How to deal with high seas piracy

Freed Somali pirates "probably died" - Russian source
Ten suspected Somali pirates captured by the Russian navy last week may have perished after their release, a defence source in Moscow has told reporters.

Marines seized them during a dramatic operation to free a hijacked Russian oil tanker far from shore, killing an 11th suspect in the gun battle.

They were released in an inflatable boat without navigational equipment.

Within an hour, contact was lost with the boat's radio beacon, the defence source said.

"It seems that they all died," the unnamed source was quoted as saying by Russia's Interfax news agency.

Russia initially said the 10 pirates would be taken to Moscow to face criminal charges over the hijacking, but they were released instead because there were not sufficient legal grounds to detain them, the defence ministry in Moscow said.

The UN Convention on the Law of the Sea, to which Russia is a signatory, gives sovereign nations the right to seize and prosecute pirates.

Western officials were very surprised when the Russian authorities dropped plans to put the pirates on trial in Moscow, the BBC's Richard Galpin reports from Moscow.

Now there is even more surprise the pirates were set adrift in the Indian Ocean to make their own way home, he adds.


Surprised? The Russian government acts swiftly and decisively to defend the interests of the Russian people. Only a hyper-lawyered elite who are openly antagonistic to their own nations would be 'surprised.'

Tuesday, May 11, 2010

Greece, and everything else

From Stefan Molyneux at freedomainradio.com, via mises.org.

There are no footnotes to Mr. Molyneux's comments. Corrections welcomed.

Greece has a long and complicated history with democracy, but the future of Greek democracy will be short and brutal.

Largely as a result of 400 years of savage Turkish occupation, Greeks retain an innate distrust of and hostility towards the State – as one Greek said: “We never had the Enlightenment because of the Turks.”

As a result -- and this is no different in America -- political power has only been maintained through outright bribery of special interest groups. Chief among these are the military-industrial complex, born out of military rivalry with Turkey, which costs over €14 billion, or 6% of GDP. Naturally, nearly 80% of the Defense Ministry budget is spent on administrative costs and payments to Army staff.

20%-30% of the entire Greek population works for the government; they cannot be fired, and many are allowed to retire with a pension in their 40s. Tens of thousands of unmarried or divorced daughters of civil servants collect their dead parents’ pensions, and pension outlays are projected to rise to 12% of GDP, over four times the EU average. Some civil servants receive bonuses for using a computer, speaking a foreign language and even arriving to work on time - and all workers get 14 monthly salaries a year, the result of a plan to keep monthly wages -- and so future pensions – low.

Two weeks extra salary is paid out at Easter, and also during the summer -- the 14th salary is paid to government workers at Christmas. Until 2008, the government owned Olympic Airways, whose employees and their families were allowed to fly around the world for “free.” It was only able to sell the money pit after lavishly paying or rehiring almost 5,000 employees. Overall, the Greek government owns 74 companies, mainly utilities and transport firms, most of which are overstaffed and bleeding money. The state rail company warehouses over 9,000 people and reported 2008 losses of 800 million Euros.

Nebulous and pointless committees infest government payrolls -- one committee is supposed to manage Lake Kopais, which actually dried out in the 1930s.

Greece was able to gain entry to the European Union by cooking its books and hiding debt through swap agreements, with the help of US financial services firms. Greece then continued to fake its budget numbers until 2008, when it ran out of money, and revealed that its deficit was four times larger than reported – 14% of GDP. It is important to note that this GDP measure is completely misleading, since the government does not have access to the entire GDP – it's like planning to pay down your debts by using your pre-tax income and ignoring your interest payments. The Greek public sector consumes about 40% of GDP, which represent a cost to the state, not an income, while taxation rarely rises above 50% – so at best only 10% of the GDP is available to address the debt, which basically means that debt levels are in reality 10 times the numbers commonly reported.

Like all doomed governments, Greece imagines that it can “grow itself” out of its fiscal crisis, referring to the fantasy that the Greek economy grew by almost 4% per year between 2003 and 2007. However, even if these numbers are true - and the source is not at all credible – this was due largely to massive infrastructure spending for the 2004 Athens Olympic Games, and consumer borrowing as a result of easy credit -- even before this crisis, Greece was a major beneficiary of EU aid, equal to about 3.3% of GDP. If past growth was an illusion, future growth is an impossibility.

What about increasing government income? There is little room to raise taxes; the top income tax rate is already 40%, and the sales tax is 21%. In addition, 44% of salary is taxed for Social Security, with employees paying 16%, and employers paying 28%. These ridiculous tax rates, combined with a historical mistrust of government, have created an enormous black market and a culture of tax evasion. In one wealthy Athenian neighborhood, 324 residents admitted on their tax forms that they owned pools, while satellite photos revealed almost 17,000 pools. More than half of the doctors in a trendy neighbourhood claimed incomes of less than $40,000, while a quarter claimed less than $13,000, and so were tax exempt.

It is an axiom of statism that compulsion and control must always expand, and the current bailout of Greece is an inevitable result of the long-term subsidization that has already occurred. S&P has already downgraded four Greek banks to junk status. Euro zone banks are holding about 75 billion Euros of Greek bonds (about $97.5 billion). French and German banks are holding about 34 and 20 billion Euros respectively, so a noticeable amount of their capital is at risk. A retreat of investors from the debt of Greece, Spain, and Portugal could lead to high interest rates, declining investment, and slow economic growth in Europe. This will affect countries, including the U.S., that export to Europe.

Greece’s dismal economic performance has in part occurred because it is already being bailed out by the EU, and has been for the past 11 years -- first because Greek bonds are priced relative to the economic strength of the EU as a whole, rather than its own basket-case economy, and second because the European Central Bank accepts Greek government bonds as collateral. European banks that buy Greek government bonds (paying higher interest than German bonds, because of the additional risk) use these Greek bonds to obtain a loan from the European Central Bank at 1% interest.

Without a doubt, and with no possible alternatives, the EU is doomed, and Greece is just the start of the avalanche. Since wages and social benefits constitute 75% of total (non-interest) public spending, the Greek government will attempt to stave off the inevitable by targeting public wages and pension bills. Daniel Gros, an eminent EU economist, argues that for each 1% of GDP decline in Greek government spending, total demand in the country collapses by 2.5%. If the government reduces spending by 15% of GDP — the initial shock to demand could be well over 30% of GDP. These sorts of transitions from public to private employment can work in a low tax, low regulation environment -- think of the millions of soldiers returning from the Second World War -- but the Greek economy is crippled by suffocating state controls and crushing taxation.

Firing government workers provokes violent, expensive and destructive conflicts, raises short-term costs for severance packages and legal battles, and the resulting unemployment destroys income tax receipts, and raises welfare and retraining costs.

What is rarely mentioned is the basic economic reality that every EU nation is currently running enormous deficits, carries catastrophic debt levels, and so has no actual money to give to Greece. Germany remains the strongest European economy, but German voters, already weary from decades of bailing out Eastern Germany, will find themselves hard pressed to muster the motivation to cut back on bratwurst in order to pay for the sundrenched retirements of Greek public servants. England is beyond useless, since its own budget deficit is poised to surpass Greece’s as the worst in the European Union.

The entire European Economic Union is a house of cards, with governments all loaning money to each other in order to hide their true deficits from potential bond purchasers. Bailing out Greece with imaginary fiat currency is not a solution to a problem, but only a brief respite, designed so that those at the top of the political class can finish their looting before escaping the collapse.


This is not rocket science. Debt to get out of debt is just kicking the can down the road. Does anybody seriously believe the Greeks are going to scrimp and save and work to pay more taxes? This is not a bailout of Greece; it is a bailout of Greece's creditors. The Greek people have no stake in this bailout.

The US is fundamentally no better off. School boards, municipalities, and states are billions in debt. At the top of the heap, the Fed is flat out monetizing debt and even then, month after month, the Treasury is stuck with billions in unsold tenders.

There is simply too much sovereign debt for the markets to soak up at the current rate of interest. So ...

1) interest rates must be allowed to rise in order to attract bidders, or

2) the world's central banks must inflate to absorb the debt at below-market prices.

Option 1 means a classic bust (another one), as credit is choked off and the economy heads down a deflationary spiral. Option 2 means ruinous inflation and large sectors of the economy going underground to escape confiscatory taxation and a depreciating dollar.

Either way, this sucker is going down.