France and Greece Take a Left Turn

Published By: kassie on May 17, 2012

 

(By  Paul Quanrud of American Citizens for Economic Freedom. ACEF (www.truecapitalism.org) is a newly formed PAC, led by prominent business entrepreneur, Peter Vessenes.

France and Greece Take a Left Turn

Election results are in for Greece and France, and for the world economy it’s not pretty. Currently, the European Central Bank (ECB) pays bailout funds to Greece in exchange for the country lowering government spending and reforming entitlements (otherwise known as austerity). Greek citizens have had enough. With the most votes going to the anti-bailout Syria movement, pro and anti-bailout parties split the election outcome and no new government formed.[1]

 

The momentum for “no bailouts” signaled in last week’s election may form the basis for a coalition government with Socialists after June’s elections. Syriza greatly extended its influence from 16.8% of the vote to 27.7% in the latest polls, excluding undecided voters.[2]

 

For Greece, the situation is dire. Unemployment increased to an incredible 21.7% in February from 21.3% in January. In the 15 to 24 age group, unemployment rose to a staggering 54%, which explains the higher anti-bailout vote in that age group. Their economy slowed for the fifth year in a row.[3] Fewer than 4 million people are working to pay off the country’s bailout package and debt, which at last check was about 200% of the Greek GDP.[4] Without jobs, desperation has spilled into suicides.

 

In France, political opponents of President Nicholas Sarkozy made the most of his publicized personal life. Newly-elected President Hollande has challenged the Germans, who Sarkozy effectively worked with to drive austerity reforms particularly in Greece. France and Greece aligned in anti-austerity votes as Germany’s Chancellor Angela Merkel is drawing an ever-hardening line on additional bailout funds after the next round of Greek elections in June.[5]

 

If ECB bankers refuse payment of more bailout funds after June’s Greece elections, the Greeks may choose to leave the ECB. However, if the Greeks stay in the ECB in spite of rejecting austerity, then the Germans may leave. With Spain and Portugal likely facing default, events in Greece start a timetable that will likely end Europe’s ECB monetary union.[6]

 

As events in Europe continue to spiral downward, we will not avoid the Greek tumble. Our markets are intricately linked: The ECB prints Euros to pay for Greek debt. We swap dollars for Euros, buy European bonds, and depend on European trade.

 

Experts are beginning to say that world markets are weaker as corporate earnings begin to slow.[7] The global economy hit the skids in 2008 due to the bursting bubble in U.S. housing. We are witnessing the beginning of something worse. It’s time to wake up to Europe’s warning signals as momentum builds toward a deafening crash globally.

 

More Voting: Iran’s Religious Conservatives Advance, Egypt Election is Next

Results of recent Iran parliamentary elections show a move toward Islamic hardliners and the tightening grip by Ayatollah Ali Khamenei, Iran’s Supreme Leader. The biggest loser was President Mahmoud Ahmadinejad, as Khamenei-aligned candidates picked up seats in both urban and rural areas. As economic sanctions from the U.S. and Europe take a toll in Iran’s economy, Khamenei may further seize political advantage by gaining support to eliminate the Presidential position in favor of a Prime Minister. If so, a Prime Minister would be less independent-minded – like Ahmadinejad – and carry out the Islamic agenda.[8] As he finishes his last presidential term, Ahmadinejad won’t enjoy being a “lame duck” with little ability to chart Iran’s course toward nuclear capability.

ACEF resources:

 

Upcoming Egyptian presidential elections demonstrate opposing loyalties of the two leaders in the race, and dramatic consequences. Amr Moussa was former President Hosni Mubarak’s foreign minister. Aboul Fotouh was a leader in the Muslim Brotherhood prior to being removed one year ago. The two met in a heated televised debate with the public remaining largely undecided prior to voting on May 23 and 24.[9] As a strong ally of the U.S. under Mubarak and recipient of our military aid, Egypt is battling internally, leaving our defense and leadership in the region in question.

ACEF resources:

 

Political Tactics Deflect Real Issues

Back in the U.S., the Progressive legacy of massive government spending and entitlements causing Europe’s tumble, reflects the White House agenda. How could we expect a better outcome in our own economy as entitlement programs expand and government spending continues?

  • Healthcare costs explode as ObamaCare costs us $17 trillion in unfunded expenses.[10]
  • With the lowest participation rate of workers in the last 30 years (64.3%),[11] people are giving up looking for work.

 

With a devastated economy weighing on Americans, the timing of President Obama going on record supporting gay marriage is telling. VP Joe Biden’s comment on Sunday talk shows kicked off the affair saying he is “absolutely comfortable” with gay marriage.[12] Then, North Carolina joined neighboring states in passing a constitutional amendment defining marriage as between a man and woman. The very next day, Obama publicly switched his position, stating his personal support of gay marriage.[13]

 

While the news played well to a Hollywood fundraiser on May 10th, it will not be well with North Carolina voters and many others. The president offered only personal support to gay marriage advocates. By saying states are responsible to decide gay marriage, he left gay marriage supporters in the cold with no federal action.[14] Implied in his words is a confirmation of the Constitution’s tenth amendment limiting powers of the federal government and leaving all other powers to states.

 

Resources:

 

Supporting Wisconsin’s Turnaround; No More Federal Automatic Increases?

Remember scenes of the 2011 Wisconsin legislative session with 14 Democratic legislators AWOL and massive protests in the Madison Wisconsin rotunda? To help balance the budget and limit the growing costs of government workers, Gov. Walker and the Republican legislature passed legislation limiting collective bargaining by state workers.[15]

 

Economic results are in. Based on projections by the Wisconsin Department of Revenue, the state is expected to have a surplus on June 30, 2012 of $275.1 million and $154.5 million on June 30, 2013. For the first time in its history, the state will add to their rainy day fund two years in a row. State projections are based on larger than expected tax collections through April and estimates from the federal Bureau of Economic Analysis showing better than expected personal income growth in 2011.[16]

 

Governor Scott Walker deserves congratulations and support more than ever. In the midst of prosperity being sparked in his state, a recall election by disgruntled Democrats is set against Walker on June 5, in addition to recalls of four other Wisconsin Republicans.

 

Wisconsin is a model for government transformation at state and national levels.

Action: Fight Scott Walker’s recall at https://donate.scottwalker.org/s/?gclid=COrg0dWZ_68CFcVk7AodyWMvpQ

 

The U.S. House Republicans shows the same courage to address core cost issues. In February, the House passed a measure to cut automatic increases for government agencies. Rep. Todd Young (R-Indiana), sponsor of the bill said, “It’s time to bring Washington’s definition of a spending cut in line with Americans’ definition of a spending cut: That is an actual cut in spending.”[17] No word yet from the Democrat-controlled Senate on this vital action.

 

ACEF Resources:

 

Stay Informed, Take Action

Just Released! ACEF Founder Peter Vessenes’ interview with The Heritage Foundation – ACEF is proud to partner with The Heritage Foundation on a special podcast to help Americans understand what we must do now. Listen to this fast-paced interview as Peter Vessenes defines capitalism, how Progressive policies undercut a level playing field, and five “must do” economic policies to turn our country around. http://blog.heritage.org/2012/05/08/podcast-american-citizens-for-economic-freedom/

Time is short with fewer than 180 days until the election. Remember Greece and Europe: remaining under seductive Progressive policies is disastrous. Our goal is a change in the White House, 62 Republicans in the Senate, and adding to our lead in the House. With Wisconsin’s recall election in mind, governor and state elections are important to gain a level playing field through each level.

 

Join the battle at your local level (Tea Party, caucus, neighborhood) to deliver the message and get voters to the polls. We must ignite Conservatives with a single focus and be better at tactics. Our country’s future is secure, only if we act now.


[2] Ibid

[6] Ibid

[14] Ibid

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