A Government may be legal...and still be illegitimate

The United States has just gone through an intense election and the European Union is seeing its member nations involved in an almost universal crisis of confidence in membership in that union.

Most of us have been angry, disturbed or perhaps just uncomfortable with actions that have been judged by our respective national justice systems to be legal even as we "knew" that they were wrong.  Sometimes this has been because of badly worded laws, sometimes because of very good defenses coupled with inadequate or inept prosecutions (or the reverse), and sometimes because it seemed as everyone was so very worried about the individual tree as the forest was left to burn or wither.

In America Free Speech, originally defined to mean that there could, with rare exceptions, not be prevention of the right to say something, has become defined as meaning that whatever and however something is said, there shall be no consequences for it.  That is just a perversion of the original intent.  No longer is it necessary to be certain that your speech is a truthful statement lest you be brought into court for libeling someone...say whatever you want.  This may be legal...but any sane person would suggest that such action should be judged as illegitimate.

The legal system in America has become a tool to enable people to avoid consequences for doing and saying illegitimate things.  Just one example is the treatment of those entering and remaining in our country illegally.  Our Constitution is a contract between its government and its citizens;  it basically establishes that the government will protect its citizens and the country's borders and the citizens will obey the laws that govern the land.  How on earth does any person or group who has NOT obeyed the laws of the United States get the right to claim that the government provide them the protections promised to its citizens?  Those here illegally come to the table as non-parties to the contract and, moreover, they come with unclean hands, having already broken the laws that a citizen, as part of the contract, agrees to obey and abide by.

In France, the people voted NOT to join the European Union...but somehow (who know by what technical legal maneuvers) they are a member.  The fact that France's politicians have done something that they argue was legal, does not make it legitimate.  All over the world, the increased ability to communicate without prior constraint by governments is revealing to the people that their governments are run for the self-defined elites of each country, that the citizens are being made to support the lives of elites who care not one wit for the citizenry.

Strange that the elites seem unable to understand why the people are upset, angry and growing closer and closer to violence each day.  How quickly the elites around the world forget the lessons of the Russian and French revolutions, among many others.  When the government(s) show contempt for the law or use it for their own privileged purposes,  why should they not understand that the citizens will see that they need to act in their own interests regardless of the laws, in the same way that the politicians have done to mistreat the citizens, to regain control of their own lives.

Those in power can only avoid "consequences" for so long before they must account.  And the longer they delay that accounting, the more extreme the consequences.

So...the European Union is now financially sound, right?

Well, how wonderful. The European Union high brass apparently, they say, solved the restructuring of the Greek debt situation this past week. So everything is just hunky-dory, right? I mean, the stock market went up almost 3% on Thursday and everyone was singing the praises of a done deal. That has to be good news, right? Well...sort of, but there are a couple of unfortunate realities that no one seems to be considering. I wonder how the world markets and economies will react when those realities suddenly dawn after the hangover of the one averted crisis passes. "What are you talking about?" you ask.

May I suggest that the whole idea of referring to a "Greek" problem is both inaccurate and misdirecting. Remember the original discussion of the challenges to the EU...remember the reference to the "PIGS" countries; Portugal, Italy, Greece, and Spain. No matter how you cut it, Greece is only one of four bad situations presumably "solved," and I would point out that with the ongoing rioting in Greece, even that matter is still open as many in Europe still see Greece defaulting on its obligations...this latest maneuver has only put it off, sort of the equivalent of Congresses actions in America in "kicking the can down the road." But...back to the larger problem. The ECB (European Common Bank) has now set, with political approval, a precedent on allowing a member country to cancel part of its contractual financial debt. That means, of course, that all other members of the EU are eligible for the same treatment, does it not? Do you really think that political winds will be able to say "no" in the face of a beginning "yes" to removing at least a portion of the consequences for poor administration and planning?

So, may I suggest you take a closer, more jaundiced view of the situation in Portugal. How many of you are aware that the Public and Private debt in Portugal will reach 360% of that nation'g GDP (Gross Domestic Production) next year? Anyone? I know that until recently I sure did not know. Remember, we in America are nowhere close to that and we are at least aware (or giving lip service) to the problem. The cost cutting necessary in Portugal to try to deal, at least partially, with this problem is throwing them into a national recession that, in turn, will harm business outlook in the entire EU. And they are not out of the woods by any means.

The financial fiaco in the PIGS countries have resulted in their inter-european trade situation relative to Germany (a country which has governed it's finances splendidly) decrease by 30%, and there is a limit beyond which Germany will not (and cannot, politically) go to bail out other countries. After all, why should they put their citizens at financial risk for the profligacy of citizens in other countries? A boost in the EFSF(the European bailout fund) from 440 billion euros to 1 trillion euros ... or more...is supposed to create an economic firewall, but the success of that is questionable. And there is a secondary concern for those of us in the United States, since if Europe goes into a broad recession, the United States will also suffer the consequences. The rise of free trade agreements has made all companies global and if Europe gets a financial cold, we will start sneezing too...and we are already feeling poorly, financially.

One solution to the European crisis would be to print more money. The trouble with that "solution" is that rampant inflation would result. Of course, that kind of printing of money is unlikely to happen because Germany would never allow it as the result would be to weaken it's financial position, which they have been very vigilant in protecting and fostering. There is a limit to how far they will go in supporting the less than intelligent or financially viable foibles of their EU brethren.

We in America have no such compunctions, of course. We continue, under the auspices and quiet encouragement of the current administration, to watch our Fed and associated agencies blithely print money (which the EU cannot do without specific authorization from the member nations) without a declared plan or explanation...and more especially, accountability of those making the decisions.

So, lest any of you be surprised, the economic challenges in Europe are far from over. They are just beginning. The government safety nets are only delays that prolong the harm and period of recovery, put into place as a political act by those in power to project an image that they are "doing" something. The desired inference is that those acts are helpful; they are not. They amount to peeling off a bandage a millimeter at a time instead of just yanking it off; years and perhaps decades of financial woe, instead of 2 to three years of recession or even depression. The laws of physics and the laws of finance are similarly immutable; excesses and violations of those laws must correct...all governments can do is to drag them out, or allow them to equalize. We, the people, err in allowing governments to sell us the proposition that they can change those laws. They can't. We prove our stupidity by allowing them to even finish a promise that is contrary.

Remember, the United States contributes to the European Bank. We contribute to the bailouts...and we share in the losses they incur. We are already borrowing money to finance the defense of a large portion of the free world. Why? I have no idea...except perhaps for vanity, the Devil's favorite sin. Tighten those seat belts, my friends, the rough ride is just beginning...

California could become our Greece

It is both entertaining and hopeful to focus on the now open Presidential Political Season. We will, of course, tire of it in time and whine about just getting it over with, but for now it is a chance for renewed hope and optimism...for some of us,at least. But there is an ugly threat on the horizon that threatens to make the storms in the South seem minor by comparison and that we have been "helped" to ignore by both the media and the politicians: the failure of California to take any steps to solve their insolvency.

If we are not careful, California will become to America what Greece is about to become to the European Union...a death knell and cause of economic catastrophe...we won't have to wait for the deficit bills to overwhelm us, California's failure will kick us over the cliff way earlier than that.

We all should follow what is happening in and with Greece if we want to see our own future. The European Union (EU) has rules against bailouts and debt restructuring, but that is apparently going to happen shortly. They (the EU) have already done this with Portugal...against their own rules. What does this mean? Well, Germany has indicated that they, if the process continues, will abandon the EU. Whether that happens or not (and the odds are that the German Electorate will demand it), the value of the Euro will plummet. 

Consider then our own beautiful state of California...

Known by some as "the land of fruits and nuts", they do not have a balanced budget. They have no (realistic) plan to balance their budget, and, if they were a public company, would no be rated as a penny stock with no value whatsoever. Yet they continue on unafraid and promising a continuation of the "free" lunch...oh, excuse me..."free" everything.

Guess who they will ultimately expect to pay for it? Yep You and Me! The rest of the United States. And we do not have the money to do it even if we decided it was right. But the worst thing (for California) is that we don't think it is the right thing to do. But...will Obama and the Congress declare that "California is TOO BIG TO FAIL." Where have we heard that one before.

Just think...a political decision that would accelerate our financial demise. Think it won't happen under President Obama? Really? What are you smoking...because I want some! And if you thing this can turn out well for the United States of America, just keep following the developments in the EU and Greece (and the other PIGS [Portugal, Ireland, Greece, Spain]).

It is absolutely as important to us as is the Presidential campaign.