Germany

March Madness

by Fred Smith on March 28, 2011

in Deregulate to Stimulate, Economy, Energy, Environment, Features, International

Post image for March Madness

In the closing days of March, not only are sports fans a bit crazy, so also are the electorate. Consider the German state of Baden-Wuerttemberg, long secure within the Christian Democratic “right-of-center” view (recall this is Europe, so “right” is at best “moderate” American conservatism), has moved left. More alarming, the Green Party gained most in the election and the Greens, one will recall, are anti-nuclear and anti-coal. The prospects for reversing the earlier German government decision to close down nuclear plants have dropped sharply and the increased clout of the climate change alarmists makes the prospect for new coal plants dim also.

As one unhappy CDU official noted, The election was decided in Japan, referring to the tsunami created nuclear disaster. That tragedy turned a side-issue in the German election into a major concern and led to the CDU defeat.

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Record Federal Spending Increase Due to Wasteful Spending Like the Failed Stimulus Package

by Hans Bader on September 1, 2010

in Bailout Watch, Deregulate to Stimulate, Economy, Employment, Energy, Environment, International, Natural Resources, Politics as Usual, Precaution & Risk, Regulation, Sanctimony, Stimulus to Nowhere, Trade, Zeitgeist

Federal domestic spending increased by a record 16 percent this year, thanks to wasteful spending by the Obama administration, such as its “huge economic stimulus package.”

The $862 billion stimulus package increased unemployment by wiping out thousands of jobs in America’s export sector, while giving 79 percent of its green-jobs funding to foreign firms.

Obama falsely claimed that the $787 billion stimulus package was needed to prevent “irreversible decline,” but the Congressional Budget Office admitted that it would actually shrink the economy “in the long run.”  As the Washington Examiner notes, “If his stimulus program was approved, Obama promised, unemployment would not go above 8 percent . . . The reality is that it passed 10.3 percent.”

“Nearly two-thirds of Americans do not believe the $787 billion stimulus package the president passed last year has helped create jobs, according to a new Pew Research Center poll.”As the Washington Examiner notes, “a recent survey of business economists showed they didn’t think the stimulus was creating jobs, either.”  President Obama falsely claimed that virtually all economists supported his stimulus package, but this was patently untrue at the time he made this claim, when at least 200 economists publicly opposed it, and it  is even more untrue now.

Unemployment has skyrocketed past European levels, as big-spending countries have fared worse than thrifty ones.   Germany, which avoided adopting a huge American-style stimulus package, has an unemployment rate much lower than ours, and experienced a massive 9 percent growth rate in the second quarter of 2010.

“President Obama’s policies would add more than $9.7 trillion to the national debt over the next decade, congressional budget analysts said” earlier.

Bailout Supporters Lose Elections in Germany and Utah; Obama Administration Presses Ahead With More Bailouts

by Hans Bader on May 13, 2010

in Bailout Watch, Economy, International, Legal, Politics as Usual, Regulation, Sanctimony, Zeitgeist

Senator Robert Bennett lost reelection in Utah’s Republican primary amidst anger over his vote for the $700 billion bank bailout known as TARP.

German voters punished Chancellor Angela Merkel for supporting the international bailout of Greece by removing her party from office in Germany’s “most populous state” and stripping her party of control of Germany’s upper house of Parliament. European countries like Germany will pay for most of “the unpopular multi-billion dollar bailout of Greece,” but American taxpayers will also pay $6.8 billion, thanks to the Obama administration.

The Obama administration is ignoring these losses and pressing ahead with more bailouts for the corrupt mortgage giants Fannie Mae and Freddie Mac.

In a party-line, 56-to-43 vote on May 11, Senate Democrats blocked any reform of Fannie Mae and Freddie Mac, the corrupt, government-backed mortgage giants that even Administration officials admit were at the “core” of “what went wrong” in the financial crisis.

Obama received $125,000 in contributions from Fannie Mae and Freddie Mac executives as a Senator, second only to the corrupt Senator Chris Dodd, who is retiring this year over financial improprieties (such as his real estate gift from a lobbyist and “sweetheart mortgage from Countrywide Financial“), yet is the chief drafter of the financial “reform” legislation expected to pass the Senate by next week.

The financial “reform” bill would devastate the venture capital markets needed to create jobs and small businesses, by imposing onerous restrictions on so-called “angel financing.”  It would also give government officials the ability to nationalize businesses that they claim are at risk of failing — and block meaningful judicial review of such seizures by shareholders alleging violations of their constitutional rights.  (That will increase the ability of Presidents to shake down businesses for donations to their political allies, since a business in danger of being seized by the government will try to curry favor with government officials.)  The bill’s House architect, Barney Frank, boasts that it will create “death panels” for American companies (this is the same Barney Frank who for years blocked any reform of Fannie and Freddie).

Mortgage giant Fannie Mae is seeking another $8.4 billion in federal bailout money, after the Obama administration earlier lifted a $400 billion limit on bailouts for Fannie Mae and Freddie Mac, two mortgage giants known as the Government-Sponsored Enterprises (GSEs).   Last week, the other GSE, Freddie Mac, asked for $10.6 billion more in bailouts. The Obama administration is certain to approve the new bailout request: “Late last year, the Obama administration pledged to cover unlimited losses through 2012 for Freddie and Fannie,” reports the New York Times.

Obama’s so-called financial “reform” proposal does nothing to reform Fannie Mae and Freddie Mac, admits Obama’s Treasury secretary, Timothy Geithner, who concedes they were “a core part of what went wrong in our system.” (At the direction of the Obama administration, Freddie Mac is now running up $30 billion in losses to bail out mortgage borrowers, some of whom have high incomes.  Federal regulators sought to make Freddie Mac hide the resulting losses from the SEC and the public.)  By contrast, the Republican alternative “aims to wind down, and break up” Freddie Mac and “limit taxpayer exposure” to its losses.

“American taxpayers are paying for $6.8 billion of the Greek bailout” through contributions to an international bailout fund backed by the Obama administration.   Greece is being bailed out by Europe and the international community because it is running up huge budget deficits due to a bloated bureaucracy and government pensions that let many Greeks retire in their 50s. “The Obama administration wants to use U.S. tax dollars to bail out a nation that is in a financial death spiral brought on by years of amazingly irresponsible deficit spending and similar behaviors often found in socialist states.”

Rioters in Greece killed three bank employees last week in their rage over possible budget cuts.  “The protesting civil servant workers trapped the bank employees in a burning building.”

The Obama administration earlier lifted the $400 billion limit on bailouts for Fannie Mae and Freddie Mac, so that they could continue to buy up junky mortgages at taxpayer expense, and showered their executives with $42 million in compensation.

Fannie and Freddie helped spawn the mortgage crisis by acting as loan toilets, buying up risky mortgages and thus creating an artificial market for junk.  “From the time Fannie and Freddie began buying risky loans as early as 1993, they routinely misrepresented the mortgages they were acquiring, reporting them as prime when they had characteristics that made them clearly subprime.”  They paid their CEOs millions, and engaged in massive accounting fraud — $6.3 billion at Fannie Mae alone — to increase the size of their managers’ bonuses.  As Government-Sponsored Enterprises, they were exempt from the capital requirements that apply to private banks, so they did not have enough reserves to cover their losses when their mortgages started defaulting.

Banking expert Peter Wallison, who warned for years about the risky practices of Fannie and Freddie, says Obama’s proposals will lead to “bailouts forever.”  Obama claims that it will not lead to more bailouts.  But as Congressman Brad Sherman (D-Calif.) admitted, the “bill has unlimited executive bailout authority. . .The bill contains permanent, unlimited bailout authority.”

Government pressure on banks to make loans in economically-depressed neighborhoods was a major cause of the mortgage crisis.  If Obama has his way, that pressure will increase.  The House earlier approved Obama’s proposal to create a politically-correct entity called the Consumer Financial Protection Agency. “The agency would be in charge of enforcing the Community Reinvestment Act, a law that prods banks to make loans in low-income communities.”  It would do so without regard for banks’ financial safety and soundness, even though the Community Reinvestment Act was a key contributor to the financial crisis.

Regulation of the Day 122: Home-Schooling in Germany

by Ryan Young on March 3, 2010

in Regulation of the Day

It is illegal to home-school your children in Germany. Even so, German parents Uwe and Hannelore Romeike believe home-schooling will give their children a better education than sending them to a school. So they pulled their children out of school, hoping the law would not be enforced.

They were wrong. The New York Times lists what they were threatened with:

[F]ines eventually totaling over $11,000, threats that they would lose custody of their children and, one morning, a visit by the police, who took the children to school in a police van. Those were among the fines and potential penalties that Judge Burman said rose to the level of persecution.

Facing the facts, the family decided to pack up their belongings and move to Morristown, Tennessee.

A Memphis judge recently granted the family asylum so they could remain in the U.S., and so they can educate their children the way they see fit.

The Romeikes’ troubles are not over, however. Immigration and Customs Enforcement is appealing their grant of asylum. It is unclear why the agency would do such a thing. Neither Mr. nor Mrs. Romeike pose a threat to national security. They are not criminals. They are not a drain on the economy; Mr. Romeike earns an honest living as a piano teacher.

American parents don’t have much in the way of educational choice. But it does appears they do have more than German parents do. Immigration and Customs Enforcement should stand up for the Romeikes’ rights.

(Hat tip: Megan McLaughlin)

Unemployment Skyrockets: “U.S. now beating European unemployment rates”

by Hans Bader on November 10, 2009 · 15 comments

in Deregulate to Stimulate, Economy, Employment, Energy, Environment, Global Warming, Healthcare, Insurance, International, Legal, Personal Liberty, Politics as Usual, Regulation, Stimulus to Nowhere

Unemployment is now higher in the U.S. than in Europe,  reports the Washington Post.  “The official U.S. unemployment rate, reported last Friday, now stands at 10.2 percent,” compared to “9.7 percent” in Europe.   This is the highest rate in more than 26 years, and marks a huge change from the recent past, in which unemployment was double the American rate in much of Europe, such as in France.

Unemployment is at 10 percent in France, which refused to adopt a U.S.-style stimulus package, and only 7.6 percent in Germany, which adopted a stimulus package that was smaller relative to its economy than ours was.  (Countries that refused to adopt big stimulus packages have fared better than those that imitated President Obama. And the biggest-spending countries have suffered worst in the recession.)

A “broader measure of U.S. unemployment,” including discouraged workers, puts U.S. unemployment at 17.5 percent, reports the New York Times.

As the Post notes, “For many on the left, the lament for years has been: Why can’t America be more like Europe? Why can’t rustic Americans be more like sophisticated Europeans? The sentiment has resurfaced in recent months as the health-care debate has raged on — why can’t the American health-care system be more like Europe’s?”

Well, America is now more like Europe when it comes to unemployment.  But not when it comes to social benefits and protections.  The American Left knows how to import Europe’s failures, but not its successes.

The massive health-care bill passed by the House on Saturday is a classic example.  It would expand health care coverage somewhat, but not to European levels, and it would vastly increase the costs of our health care system, rather than reducing it to European levels.   It would also increase taxes to “European levels of taxation.”  The health care bill contains politically-correct provisions that Europeans would never put up with, like pork for trial lawyers and racial preferences.  And restrictions on national competition in health insurance, which do not exist in Europe.

In France, doctors don’t need to be paid as much, because competing professions, like lawyers, are paid less.  French law is much more conservative than American law when it comes to lawsuits, including lawsuits against doctors.  There are NO punitive damages, and France discourages lawsuits by making unsuccessful plaintiffs pay the other side’s legal bills.  (Other European countries have specialized health courts, rather than American-style jury trials, to cut lawyers’ bills, speedily compensate the injured, and prevent American-style baseless lawsuits against doctors.)  There are no racial preferences — even my Marxist father-in-law, a French trade unionist who likes Michael Moore’s book Stupid White Men, thinks that racial preferences are evil.  French people do not let political correctness shackle their minds the way American leftists do.

Europe is not as far to the left of America as people think, and America’s business climate is already not much more favorable than Europe’s.  For every three ways in which Europe is more socialistic than America, there are two ways in which it is less socialistic than America.  The Obama administration is getting rid of our advantages, but not our disadvantages.

American tort law and family law are much more burdensome, anti-business, and bent on redistribution of wealth, than Europe’s.

Confronted with the specter of new burdens under the health-care bills and global-warming bills backed by the Obama administration, many businesses with the money to do so are afraid to hire people and create jobs lest they be stuck with a large tab for things like health care benefits for newly-hired, less-skilled employees.

The Congressional Budget Office has repeatedly admitted that Obama’s stimulus package will shrink the economy “in the long run.”  It contained welfare and repealed welfare reform.  Unemployment is higher now than if Congress had voted it down.

Hot time in EU

by Tatiana Kryzhanovskaya on October 20, 2009

in International, Politics as Usual

The first half of Fall 2009 was a busy season in European politics.

On September 27, the general elections took place in Germany. The results were pretty optimistic–conservatives won the elections and kept the top spot, socialists lost and left the coalition, while liberals became a new member of a ruling coalition. The same weekend, elections took place in Portugal. The results were less optimistic, as the socialists stayed in power and will probably form a coalition with the Left Bloc, another socialist political party. And on October 4, Greece elected a new socialist government.

In the first weekend of October, Ireland voted for the second time on the referendum concerning the ratification of the Lisbon treaty, which would further concentrate political and economic power in Brussels. This time Irish citizens approved ratification, which now makes Czech President Václav Klaus the lone holdout. With the Lisbon treaty close to being ratified, things are heating up on the EU political stage. The treaty would create two significant vacancies for the top body of the European Commission. And even though the treaty is not yet ratified, there are already huge debates among the EU countries about the candidates for these two posts. But for these two positions–that are supposed to be the most important ones for the EU–European citizens are not expected to be asked for their opinions or suggestions. Now it will all be decided for them…

Obama Backs Costly Health-Care Status Quo, and Limits on Choice and Competition

by Hans Bader on August 15, 2009 · 3 comments

in Healthcare, International, Legal, Personal Liberty, Politics as Usual, Sanctimony

Germany is a lot smaller than the U.S., but it has a lot more health insurers to choose from, and cheaper health-care costs. One reason might be more competition: in the U.S., you can’t buy individual health insurance from an out-of-state insurer, since an obsolete federal law lets states block purchases across state lines, taking away interstate-shopping rights that citizens would otherwise enjoy under the the Constitution’s Interstate Commerce Clause. That leaves patients with fewer choices, higher prices, and less competition among insurers, who may control as much as 80 percent of the market in a particular state. In Germany and France, by contrast, you can buy from an insurer anywhere in the country.

The so-called health-care “reform” bills backed by Obama actually worsen this situation, by extending the reach of this anti-consumer restriction on competition beyond individual health-insurance policies to many employer-based health-insurance policies. They do this by gutting the preemption provisions of a federal law known as ERISA.

When John McCain proposed cutting the cost of health insurance by letting Americans shop for cheaper insurance across state lines — the way they can buy almost any other product across state lines — he was bashed by the Obama campaign and Joe Biden.

Washington Post columnists explain how ObamaCare would make the status quo even worse in many other ways as well, while exploding health-care costs. ObamaCare will cost far more than its predicted trillion-dollar price tag. Charles Krauthammer explains how the cost-savings Obama keeps talking about are mythical and non-existent.

Fact checkers say Obama is lying about health care.

One of Obama’s own advisers says the Obama Administration’s health-care plan will harm people with insurance while raising their taxes. Obamacare will take away 5 important freedoms, notes a CNN commentary. It will also destroy many affordable health-care plans while breaking Obama’s campaign promises.

ObamaCare also contains costly racial preferences and affirmative action, subsidies for left-wing community organizers, and preferences for illegal aliens, who are exempt from its taxes and penalties, but could access its benefits due to lack of meaningful eligibility verification safeguards.

Obama is also reenforcing the corrupt political status quo that helped trigger the financial crisis and mortgage meltdown. He wants to create a new bureaucracy to increase the pressure on banks to make risky, low-income loans.