Question of the Day|
Would you ever vote for a politician that comes right out, while in office, and admits their policies aren't working or need a massive tweak?
Click here to post your answer and let Charles know what you think. He will air some on the Payne Nation radio show.
I never promised you a rose garden.
Along with the sunshine,
There's gotta be a little rain sometimes.
When you take, you gotta give, so live and let live,
Or let go.
I beg your pardon,
I never promised you a rose garden.
I've written over and over that I think the Euro survives because of centuries old dreams of a united Europe. It's unlikely such a goal will ever again be contested on battle fields, but there is a war going on right now and at stake is nothing less than a single continental Europe under a single umbrella. How interesting that all the talk has been about the fiscal crisis unraveling this dream rather than bringing it closer to reality. In fact, as I watch, read, and listen to coverage of this situation I'm reminded of an episode of the Twilight Zone.
In that episode ("The Midnight Sun") a woman deals with the earth moving closer and closer to the sun. There are all the elements of panic, fear, and contemplation as earth hurtles toward the sun. The woman deals with these issues with a neighbor and the overall sense of hopelessness. As it turns out the earth wasn't hurtling toward the sun but away from the sun. Most of the episode was a daydream of sorts; the women dealing with circumstances, wondering if it was the exact opposite. Neither sounds like a lot of fun, yet almost all coverage of the European crisis has held that there are two outcomes.
The Euro and EU unravels
The Euro and EU survive but barely
I Beg Your Pardon
There is a scenario that I figured a long time ago would prevail:
The Euro survives, but nations give up more sovereign rights. There will be some trillions of Euros eventually spent to resolve decades of wasted potential and lavish lifestyles. Going into this past weekend Mariano Rajoy said Spain is "not on the edge of a precipice," adding "it's not a bed of roses, but this is not the eve to the apocalypse either."
But over the weekend the tune changed a little with Rajoy asking for a new fiscal authority to handle all of Europe's finances. The suggestion is such an authority would also keep Greece in the mix. The thing is such an authority would also move the European Union closer and that means giving up sovereign rights. This was the main goal for many at the very start, so while there will be feigned shock and resentment there really can't be true surprise. It does create yet another challenge. How much more will European counties be willing to give up for Germany to make their lives easier?
Spain is only a couple months into its austerity, and the new conservative government is blinking big time.
In the meantime, Angela Merkel is really positioning better and better. She has proven she can take the heat from fellow leaders including the President of the United States, and despite recent election losses at home, her nation isn't ready to abandon her leadership. Recently several union members got sweet pay raises, and Germany's economy is still humming.' Now it appears she is softening her steadfast opposition to Euro Bonds-with certain conditions. In fact, in an interview Merkel borrowed a line from the same song Rajoy was singing.
When you take, you gotta give, so live and let live
Or as Merkel put it: "You can't ask for euro bonds, but then not be prepared to take the next step towards closer integration."
The bottom line is that there is a ton of debt that will not go away and a bunch of people that want the easiest way out, even if that means chipping away at more of their ability to self-govern. These are the choices that are evolving but have been embedded in the promise of a united Europe from day one. In Italy Mario Monti has already hinted there would have to be a reasonable compromise for debtor nations that are asking for even more money to give something up in return. That something is huge.
This is going to go beyond money because in the end Greece, Spain, Portugal and maybe even Italy will not have enough firepower to ever pay back their debts in money. So, they'll have to pay it back with their souls.
Along with the sunshine
On Friday, Barack Obama seemed like the most detested president ever. I'm serious; he was way too upbeat at that Honeywell (NYSE:HON) plant and exhibited no shame over attending six fundraisers on the same day America's economic pain was laid out for all to truly see. Moreover, not only could we see it officially but we all felt a twinge. People with jobs had to feel somewhat sheepish knowing at this late date in the recession or post-recession if you believe in official timestamps they are still in the mix, but someone in their family, circle of friends, and neighbors are on the sidelines or working in a job a million miles beneath their skill level.
I hope we get away from a political system that is now lurching into Vaudevillian territory, the song and dance and happy faces, when there should be faces etched with concern, caring and even contrition. We can handle the truth. We actually live the truth, so we would appreciate the truth. Can the incumbent ever admit to any mistakes or to a sense of urgency to alter policies that aren't working?
I for one would love to see this happen. Don't talk about shared pain and raise $7.2 million the same day news reflects a nation in immense pain and obviously vulnerable.
Ugh ... when will they stop bringing out these phony economists to bitch about income inequality in America as we watch countries with better ratings melt before our very eyes? I think it's a moral topic, not economic. People are not brainless and have choices in America. But, when you make mistakes like dropping out of school, or accept a slacker mentality like sleepwalking through work and bolting at five on the nose to grab a few brews and make it home in time for "Dancing with the Stars" you are not going to make a lot more money. If we get caught up in not being honest about why a giant chunk of people are on the economic treadmill then we are going to kill the nation in a cloud of envy-driven policies that attempt to reward mediocrity.
These economists think we're moving closer to the sun, and attacking successful people is like burning all the coats, but in fact we are moving further away from the sun.
The futures act better than I anticipated, but we aren't going to force the issue this morning.