Come September we can become “Old Europe” or keep the course of “New America”

It is frightening to me how we have an election coming up that will decide the faith of the entire world.  Yet, I see both our enemies, and most of our friends rooting for us to make the wrong pick.  I can understand our enemies, like China and North Korea, because it is in their interest for America to have a weak president that will prefer to talk than act to protect American interests.  The excuse given by our friends is that Bush is not a nuanced diplomat – he says what he means and does exactly what he says he is going to do instead of nothing – like Kerry.  What those real nuanced diplomats of the world mean is Bush is not so concerned about America being liked – something that will never happen – and thus will do things that will not benefit them.  Like going after Sadaam and stopping the gravy train (oil-for food program) the UN, France, Germany and Russia where all riding.  We are faced with a choice:  we keep the course of the lean and mean fighting machine, or we revert to a bloated bag of wind that talks a mean talk but can’t do anything. 

And that is what made me realize the similarities between issues underlying our choices and what is happening in Europe right now, where they are faced with choices that can improve their lot, but the old countries revert to form and decide to keep the status quo.  Yes, what we face in America is really keeping the course with our new strategy vs. returning to the old ways.  And while these are the opposite, I have said the underlying conditions are the same.  So here I go:

First, a bit of news and history for those that might not be as informed. A few weeks ago the then 15 member EU – comprised mostly of nations that Donald Rumsfeld referred to as “Old Europe” expanded by adding 10 ex-Soviet block nations.  While the pro-EU media has made much fanfare and touted this as a great historical occurrence, it is not as simple or clean as they would like us to believe.  There are quite a few serious sticking points that are causing Brussels – the capital of the EU – to experience some serious heart ache.  And at the center of this is the fact that these new members are much more inclined to follow the American/British approach to growing an economy than that practiced by “Old Europe”.

Of the economic powers in “Old Europe”, Britain, Spain, Ireland, Luxemburg, and Italy are the only ones with anything close to a growing and expanding economy.  And that is a direct result of practices that are both business and people friendly.  Britain is doing quiet well living of the largess the sweeping changes made by Margaret Thatcher – following Ronald Reagan’s lead – made back in the ‘80s.  This, despite having a liberal (read democrat-like) government for the past decade plus.  Their luck has been that their PM, Tony Blair, was smart enough to leave the bulk of what Thatcher did untouched.  And the British economy has grown faster than inflation allowing that country to maintain a considerable and very costly social net without bankrupting itself.

Spain was lucky to have Jose Maria Aznar, who did the same things Thatcher did – sweeping pro-business reforms, cuts in a ridiculously overstretched socialist system, and across the board tax reductions - a decade before for Britain, and fired up that country’s economy.  In just a decade, the Spanish have gone from one of the poorest and weakest economies in Europe, to one of the strongest.  This story repeats itself in Ireland, which is now considered the European jewel because of its business friendly environment and the sky rocketing standards of living, and in Italy thanks to businessman turned politician Silvio Berlusconi.  Luxemburg similarly had made sweeping changes to its corporate tax system, and had managed to stay way ahead of the growth curve because of that.  And because of the changes in government caused by recent elections the Dutch, are showing sings that they have also waken up and smelled the coffee and are making many of these same changes, the number of countries tied down by the old doctrines are shrinking.

The same can’t be said for France and Germany, two of the biggest economies in Europe, and a smattering of smaller nations such as Belgium, Austria and Portugal, who stuck to their old socialistic and anti-corporate ways.  The decision to keep the status quo has resulted in negligible GDP growth accompanied by skyrocketing expenditures.  These have in turn forced both France and Germany to break one of the EU’s most sacred rules – that no country could spend more than 3% of their budget without incurring sanctions and penalties - in order not to see their social net collapse (note that before they got to break this rule, no other country was allowed to do so without getting clobbered by Brussels).  Needless to say, the economies of the true “Old Europe” nations are stagnant and show no sign of getting fixed any time soon as the changes needed are not popular with the coddled masses that have made sure nobody willing to implement these changes gets elected.

And that brings us to the 10 new countries that joined the EU.  Make no illusions about it; they all joined the EU for one and only one reason. Economics.  The prospective exponential market size growth and potential for economic capital influx accompanying that move was simply too stupid to pass up on.  These new members understood that they had one thing in abundance – cheaper and work hungry skilled labor forces – that could produce a whirlwind of new income for them.  Yet, before their inclusion, many of the more prosperous EU partners –led by France and Germany where 35 hour work weeks and countless unbelievable perks made labor costs the most expensive in the world - passed laws to prevent this massive cheap labor influx from these new members. Even the political class among the prosperous – like England – followed suit for fear their populace would give them the boot in the next election. But it did not end there.

Each of these then prospective new member nations, understanding the implications of the labor restriction move made by the other nations, took a page right out of the Ronald Reagan book of economics, and proceeded to make changes to their own systems in order to create the best possible environment to bring the denied capital to them.  They practically all instituted very low flat taxes (ranging from 10-18%), passed incredibly business friendly laws, and made any and all possible changes to create the best possible environment to assure capital growth in their nations.  In short, they decided and made the needed changes to guarantee that if they could not go eat at the buffet table, the buffet table would come to them.

But these changes where not well received in the west, especially in France and Germany where the bloated economies, near collapse due to the socialist obligatory burden, simply could not compete.  So now the big bureaucratic machine in Brussels, under French and German direction, is pushing through legislation to force these nations to raise their taxes and pass laws to prevent this competition.  In short, instead of doing what is right and taking the needed steps to cure their terminally ailing economies, they have decided to implement a solution where basically they would infect all the healthy nations with their malady. 

Now some details about America. George Bush figured out what was ailing America, and once in office began taking steps to fix that. We got tax cuts, accountability in education, and several other programs aiming at firing up an economy that was in a bad recession. Unfortunately, the cancer of radical Islam, which has as its objective to wipe Western civilization as we know it, reared its head.  The WTC/Pentagon attack had an associated direct cost of almost $12 billion dollars, and the damage to our economy was measured in the hundreds of billions of dollars, not to forget the most important of all, the horrible loss of 3000 lives. Bush, in a moment of epiphany, understood we could not continue to treat terrorism as crime and that the only solution was to destroy those wishing to do us harm.  And make no mistake about it, unless we wipe out these terrorists, they will attack us again.  It also became clear that we could no longer ignore hostile nations pursuing WMDs.  WMDs these nations could then pass to terrorists to use, while trying to keep the pretense they had clean hands.

Consequently America has taken the steps in a long and sure to be protracted war, to go find out the radicals and implement the only solution that guarantees our security: kill the terrorists, and deny the nations that would support them WMDs.  But doing so has both a high financial and human cost.  Costs, that although high, if we choose to avoid now, we will have to pay 10 come the next attack. And yet despite these war costs, the American economy is leading the world in growth, and these deficits will eventually be overcome. And that finally brings me to my real point:  the elections here in the US.

Kerry, on the only two issues that he has not flip-flopped on, wants to repeal the tax cuts, and proposes as his solution to terrorism to return to the days where it was treated as a crime and not a matter of war.  Even worse, Kerry wants to hand over responsibility for Iraq to the UN, a corrupt and horribly inept organization.  Like France and Germany – countries Kerry admires – he can’t make the sacrifices needed to join the healthy world, and instead proposes to pull us back into that old sickly world.  Unfortunately, the end costs of these moves will destroy America.  And what frightens me most is that I believe liberals know this but think we deserve that faith.  And that is why they hate George Bush and would vote for a nobody like Kerry, someone they don’t even like.

Posted by Alex at 01:18 PM on May 24, 2004
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Categories: The Stupidity Of Man,  War,  Politics,  The Federal Government
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