Wednesday, May 9, 2012

Regarding Greece, Spain and Others ... Don't Worry, Be Happy

Here's why I'm happy today.

In the U.S., perhaps we are witnessing the beginning of the end of the decades long U.S. government led "progressive" movement. And the end of politician sponsored deficit spending based on the fallacy of  Keynesianism as well. If so, that's great for all future Americans, and especially the poor and middle class among us.

While the world trembles these past and next several days and weeks watching events unfold in Greece, Spain and the rest of Europe, please be assured that we definitely are nowhere near the beginning of the end in America.

My take on Greece is simple; Germany should just say "bye-bye" to them. If it did, Spain and the rest of the countries may just get the message and head down the right track to adult driven fiscal responsibility, painful as it will be. {We'll get to the juveniles in Greece in the next post.}

So in the future, I'll do my best to articulate why I'm so optimistic about our American prospects.  To reap the benefits of all their mistakes, all We the People have to do is study what happened in the various European countries and what would be down the road for us if we don't take appropriate action to turn things around.

As for the big spenders and the big union backers, as well as the Democratic Party in the U.S., it's time to change or suffer the consequences. The decades long government induced "stimulus" party is over.

So take a look at what  Hard Times = Tough Year for Incumbents has to say to us and then get ready to throw the bums out this November:

"This just in from Europe for American politicians: In case you hadn't noticed, the aftermath of the worst economic decline in eight decades makes this a really bad time to run for re-election.

Events of the past few days have sent that message stateside with an exclamation point. French President Nicolas Sarkozy is gone, felled in a weekend election. Greece's two main parties were shredded in voting there, leaving them too shrunken to form a government, while fringe parties, including the neo-Nazi Golden Dawn, fill the vacuum.

But the carnage hardly stops with France and Greece. German Chancellor Angela Merkel's ruling coalition suffered a defeat in an important state election during the weekend as well. The Dutch and Romanian governments fell in late April.

All told, a dozen governments in the 17-member euro zone have fallen or been ousted in the past two years.

This amounts to a wave of anti-incumbent sentiment sweeping through the Western body politic.

There is no guarantee of immunity for politicians in the U.S., which doesn't have the same kind of backlash from austerity politics seen in Europe, but which does have a similar level of disillusionment with the established parties and their performance.

On Tuesday, a titan of the U.S. Senate, Indiana's Richard Lugar, was defeated in his Republican Party's primary after 36 years in office. Last month, entrenched incumbents from each party were thrown out in Ohio and Pennsylvania.

All that represents a warning sign for President Barack Obama as he gears up his re-election campaign—but also for incumbents of all stripes, and for the two major parties more broadly.

Indeed, the real lesson for American politicians is that voters' unhappiness is a powerful motivator.

"We know they will react to anger," says Vin Weber, a longtime Republican strategist who also is a director of the National Endowment for Democracy, a nonprofit that tries to strengthen democracies around the globe.

"We see that all across the Western world," he said. "We saw that in Republican victories in 2010. The untested proposition is whether they will respond to a message of hope."

There is ample precedent showing political trends can move back and forth across the Atlantic. Margaret Thatcher's conservative revolution in Britain in 1979 was matched a year later by Ronald Reagan's in the U.S. Moderate conservatives arose simultaneously on both sides of the Atlantic late in the 1980s, and the centrists Bill Clinton and Tony Blair overlapped in the 1990s.

At the moment, there is no discernible ideological direction to Europe's wave of change. Mr. Sarkozy is being succeeded by a new president to his left. In Greece, the parties suffering are the ones in the center. When Spain's government changed, it moved to the right.

The unifying theme in Europe is simply unhappiness—specifically unhappiness with the austerity measures the continent has imposed to deal with a rolling succession of debt crises. It is hard to know whether voters are reacting more to the pain of government cuts or to the pain of high unemployment that has accompanied austerity. . . .

But while American economic confidence has rebounded somewhat, it remains at uncomfortably low levels, and the past two months' job-creation numbers are underwhelming. It is no coincidence that Mr. Obama's job-approval ratings are only middling, and that recent national polls put his re-election race against presumptive Republican nominee Mitt Romney as virtually even.

At the same time, Congress's approval ratings are far worse, and poll numbers reveal no hidden reservoir of love for either party or for Mr. Romney.

So there is plenty of disenchantment—but fewer signs of overt anger—than in Europe. Matt Bennett, a vice president of Third Way, an organization of moderate Democrats, argues that

Americans held their "anger" election in 2010, when they threw out the Democrats who controlled the House.

This year, he says, will bring instead "an anxiety election.…There is disillusionment driven, we think, by anxiety about the future."

That is a different emotion from the anger coursing through Europe, but potentially just as powerful."

Summing Up

European countries have a lot to teach Americans. Intentionally or not.

To begin, let's look at the size of governments and the European welfare entitlement states.

Lots of debt, lots of unemployment and little economic growth.

And since they spend virtually nothing on defense, laying the blame on national security spending in America won't work either.

We'll try to develop the thesis as we go along.

For now suffice it to say that America's best days lie ahead, assuming we take the time to learn the lessons Europe has to teach us. And we will.

Thanks. Bob.