"I am encouraged by the sharp rejection of austerity by the people of Europe."

The author makes a big leap of faith here that after the inevitable collapse, people will all of a sudden see the light. I believe that the more natural course is for people attempting to gain influence to use greed and envy to point their fingers at the successfull, start the scapegoating and catapult themselves into positions of power. There will, most likely, be a period, possibly a long one, of even less free conditions.

Some of the to-big-to-fail rent seekers will get taken down along with a lot of honest wealth creaters. Other, more odious, rent-seekers will take their place, probably with less wealth creaters in the mix. I don't see a good outcome to this, at least within my lifetime.

If you have read Murray's "Coming Apart" and believe what he is saying, a small government based free society requires the four pillars of Family, Industriousness, Honesty/Integrety and Religiousity. These institutions are in serious disrepair and in danger of total collapse. The masses have been conditioned to rely on the nanny state as opposed to themselves and their local communities. When our pseudo-capitalist nanny states collapse people will look for easy answers and that will most likely be some form or authoritarianism.

I really hope I'm wrong.

RaughKee, you probably right and Menno Troyer might get more than he wishes for. Collapses of that magnitude generally do not end well. The falling for politician's "Easy answers" did not have a happy ending in Russia or Germany to name a few.

The author is taking a large leap of faith that the right thing will prevail. More than likely a catastrophic failure of the EU will take down the entire world monetary system, as we are all too interconnected worldwide today.

That being said I see the fall and failure of the EU as inevitable, and think the first country to bail out will be Germany.

This is not going to end well.

Ken, I agree with you, Texas and RaughKee. The author is ignoring the fact that very high degrees of economic stress produce very high degrees of political extremism. We've already started to see this in Greece with the election of Golden Dawn MPs, something not seen since the 1960s.

Texas, I think its the other way around. Other EU members are going to discover that they cannot afford a common currency with Germany. They will be forced to bail out through sovereign default. But the end result will be the same. You are right; this is not going to end well at all.

@EBD

France also went to the fringe in very strong numbers. Sarkozy was the status quo, the vote for extreme right and left in the first ballot was a definate repudiation of centrist policies. That the left won is inconsequential. The real story here is that the people wanted easy answers and the extremes provide those answers without forcing people to look inward.

And who will they blame? Why "W" of course.

Let us not forget that France has been a basket case country before, so perhaps they just want to return to that state.

In the past they could just devalue their currency, but not so easy now that they are tied together in the socialist nirvana of heaven otherwise known as the European Union.

The Germans are probably asking themselves why on earth they ever signed up for the Union. But what really amazes me is how all of those in Europe cling to the EU idea like a baby clinging to its blanket. Their obsession with socialist ideas seems to trump any logic, time and time again. So in the end they will reap what they sow.

Europe is cooked. Because the decline is slow but sure, it gives the illusion that perhaps it can get better. But it won't. The trend is clearly down.

The trick for Canada will be to make sure we don't go off the cliff with the rest of the Western world.

what's that about austerity ?

$90 million should buy more than a few houses, let alone trailers, but $50k buys a new SUV for the chief...guess which is more important....

http://cnews.canoe.ca/CNEWS/Politics/2012/05/10/19741906.htm

OTTAWA - The chief of the Attawapiskat First Nation is threatening to call a state of emergency again at her reserve unless the federal government coughs up $50,000 a month with no strings attached for the band to use for housing.

Chief Theresa Spence has told federal government officials some trailers on her Northern Ontario that house about 90 people are no longer suitable and she wants to move the people into the community's healing lodge.

The trailers are not the ones shipped to the reserve this spring but were brought to the community in 2009 by the mining company DeBeers.

Earlier this year, Spence asked the federal government to repair and modify the DeBeers trailers and, on Feb. 15, she indicated in writing those trailers had been fixed.

This week, a teleconference meeting between band officials and federal bureaucrats was convened to discuss a range of housing issues. During that meeting, Spence was asked if she had prepared a housing plan for her community, something the government has been pushing the community to do for several months.

But when pressed about a housing plan, Spence simply hung up the phone.

Attawapiskat has received $90 million from the federal government since 2006.

In the memo, obtained by QMI Agency through access to information laws, the elders said band members "support a forensic audit as they want to know where the funds were spent."...

I agree with the majority's rejection, here, of the author's analysis. His view was that the socialist policies, which the people deliberately just chose by rejecting austerity measures, will then lead to bankrupt nations. Then the people will 'see the light' and opt for conservative fiscal and social policies.

I doubt it. When a population has been raised for a generation with a focus on entitlements and Consumption and an ignorance of the role of Investment and Production, they aren't going to suddenly become aware of these two (I and P) and put their money into them rather than into Consumption.

As cgh noted, in the other thread dealing with the economy and the EU, the notion of a 'perfect life' is aligned with the singular focus on Consumption. People are not going to readily reject this imaginary world, this notion that not only We Technological Men can do anything but, as the left constantly point out, It's Our Human Right to have and do everything and anything.

What do people do when they live within an imaginary rather than the real world, and when this virtual world does not produce those desired results? Do they move into realism as the author suggests? Or further into the imaginary world?

We saw one result in the Third Reich. We see another in Islamic fascism - and I suspect that, contrary to Obama's political narcissistic claim that it is weakening and disappearing (all due to Him of course), I'd suggest that in the West, Islamic fascism will increase.

What would help the situation? If the US leads the way and rejects socialism (and Obama) and accepts reality - which means, acknowledging the requirement that Investment and Production are the basic economic infrastructure and must remain within each nation and within private enterprise.

Keep outsourcing to China!

"The trick for Canada will be to make sure we don't go off the cliff with the rest of the Western world."

HAHAHAHAHAHA. Look around you. Start with the office or shop you may be working in, then have a look at the idiots running your local community, then the "leaders" of your province/territory, then look at the 62% who wish Harper and his government were politically dead. They live right next door.

Feel secure now?

There is no turning back. We are too far down the road. But looking forward, we can either take our medicine and get back on track in a couple of years, or we can keep denying what has happened to us a do as Japan did, 23 years, and counting, of moving sideways.

So, how are things going in Haiti?

Other than the Red Cross building a hotel there so they can become financially independant of donations, nothing much. (What does the Red Cross know about running a hotel and why with my donated $s?) I digress...

My point being is that the human condition does not change much around the world. The Euros will go down and the influence peddling and angling for personal advantage will continue until the end. ET's comments were bang on!

Federal Finance Minister Jim Flaherty deserves more recognition than he’s received for telling the IMF to go blow last month.

The bailouts for Europeans who “reject austerity” for their debit to the central banksters need to come from somewhere. They ultimately want it coming from us.

http://blogs.canoe.ca/lilleyspad/contributor-columns/column-kent-canadas-refusal-to-bailout-the-imf-deserves-praise/

Global socialism at its finest.

I read the article. This person is an idiot who has not read history.

Communism came on the scene in 1917 after the Tzars ruined Russia, and we are still cleaning up almost 100 years later. 100 million people died.

The Nazis came in 1933 Germany after another collapse, it took until ~1975 to fix that. Nobody remembers this, but -Fascist- General Francisco Franco was absolute dictator of Spain from the Spanish Civil War until his death in '75. Israel is still embattled, so the last front of WWII is still being contested. Millions died.

Japan became fascist and we had to nuke them. Millions died.

China became Communist and still is. Korea became Communist and still is. Vietnam became Communist and still is. Et Cetera. Millions died and continue to die.

France could -easily- go full-on Communist or Fascist any time now. Hollande wasn't kidding, Sarkozy probably did massively understate the budget hole in France. Given that Sarkozy was screaming for cuts to government, its doubleplus ungood.

So if WE let the socialists win in the hope that they will fail, WE are going to get our collective Conservative butts stuck on a collective farm in the Yukon trying to grow pecan trees because the new Grand Poobah believes in Glowball warming.

Plus there's the millions of soon-to-be-dead people to consider.

I agree with our boys and disagree with the article - bad times are in store for Europe. The problem with socialists isn't political ideology (although that's part of it) - the problem is they are lazy, greedy and stupid.

They've proven it already: they will riot, kill and burn - even commit suicide - before they will pick a tool and go do productive work for a fair day's wages.

When the system fails they won't see the errors of their ways; they will try to find some other means of spongeing off others.

While one tends to agree with the central tenet of this article, I hardly see the Europeans seeing the errors of their way and embracing freedom and the free market. Rather, Europe seems to have gone the opposite way in the past with the result being many young men dying in the mud of France. If I may paraphrase Churchill, should the European experiment fail; "The whold of Europe...will sink into a dark abyss, made more sinister by the light of a perverse science" Just pick your version of the science of socialsim: communism or the national variety.

My guess is this will be the recognition of the value of "red & purple" U.S. State ordinary citizens understanding of the situation by the gutless politicans. The result, significant change in America.

These Americans recognize and support the basic difference of the United States from all other Nations/States, "we the people".

In Canada the "we know better attitude" of the Political/Justice system shown with the attatude of the Judge in the "Tori" Stafford will mean a delayed acceptance of this.

However; a different relatioship with Quebec will happen within five years. They will either be gone or "knuckle under" to a sustainable Regional Equalization funding situation. Cheers;

Let me fix that headline for you

I am encouraged by the sharp rejection of reality by the people of Europe.

There. That's better.....

The inevitable result of universal suffrage and a severely degraded education system.

Perhaps dropping history classes for social justice programs wasn't such a great idea.

Ron Paul is our only hope.

Let them cake! And let them have it too!

Sure, that's the ticket! First we eat the cake, and then we all vote that we still have the cake, and we will! It's magic and always works and the suggestion never leads to trouble.

On the bright side, with austerity kicking in and causing conservative/libertarian values being kicked out of government. The left once in power, will be forced to deal with their own creation. That my friends, is bound to leave a mark!

Just to be clear, the fact that I linked to the article in Reader Tips doesn't mean I approve of or agree with with the author's premise, which I did characterize as being born of a perhaps "schadenfreude-tinted" view.

Troyer is right about one thing, though: the profligate, insane, and essentially suicidal European spending spree isn't going to magically end by itself because, as he put it, the increasingly "nanny-state addicted masses" view the prospect of a dramatic reduction in government spending as "a threat to their way of life."

If the "crash and burn" he foresees does happen -- and I would think that it's nearly guaranteed to happen at some point, barring in the interim a sudden demand on the part of the electorate for austerity -- there's no way of knowing what the result would be. I tend to agree with RaughKee, Ken Kulak, ET, Phantom, and others that the outcome of a crash and burn, should that happen, won't result in a widespread call by the electorate for freer markets and capitalism. Recent events in Greece, which is close to crashing and burning, are instructive in that regard: the citizens don't attribute their dire situation to excessive and unsustainable spending, they blame it on the institutions/nations who, having lent them untold billions, are asking that some of that money be repaid. The Greek citizens' emotional reaction, in other words, has been to (angrily) repudiate capitalism and the free market economic philosophy rather than see the error of their (and their government's) profligate ways.

(Most) People NEVER see the light - they take their illusions to their graves.

Don't assume the fall of social democracy-which is inevitable and good-will herald freedom. SD can be replaced by worse, such as in Hungary with its quasi-fascist government.

Exactly, EBD - people who have been raised within the socialist mode of massive government entitlements have no understanding of economics. Their focus is only on the Consumption phase of an economy; they have no awareness of the vital modes of Investment and Production.

They don't understand that the goods and services they Consume must be paid for. They have been socialized to accept and to expect these goods/services as theirs simply by the fact of their existence. It's their 'human right'.

We have our own examples. Think how often we've heard people declare that Canadian health care is free. People don't move beyond the Consumption phase; they never acknowledge that this health care requires Investment and Production, both of which must be paid for.

Think about the Quebec students, actually rioting because their lowest-in-Canada college tuition is going up by three hundred dollars a year. They view education as a human rights entitlement - and it never occurs to them that someone 'out there' must pay for it.

The gradual loss of our own ability to produce wealth, as Production moved out of the West and into Asia and India and elsewhere, meant that we could not ourselves support these entitlements. So, we borrowed from those nations who were producing wealth. Insane - we've become as fiscally dependent on a Mother Nation as a colony was legally dependent on its Mother Nation.

So, since we have raised a generation of the world population, since WWII, in societies that focus primarily on Consumption of goods and services and have outsourced Investment and Production to 'far off developing nations', and have set up governments as the source of our Consumer needs - then, how do we, or even, can we, move out economies back into participating in Investment and Production?

There are several possible roads to take after a fiscal collapse. One road is fascism; that is, a perception that utopian perfection is possible if we manipulate and regulate people. That is, this road rejects freedom and individual enterprise, insists on homogeneity of behaviour, and focuses on an imaginary world. We saw it in Germany under the Third Reich and see it now in Islamist nations. I reject tactics that move us into imagined realms as not feasible in the long run.

Another road, and I maintain it is possible, is to gradually release government restrictions on setting up small private businesses. That is, you release the utopian ideology with its concomitant regulations - and sit back and watch the businesses start up ON THEIR OWN.

It's like pruning the overhanging trees and shrubs. Then, you simply sit back and watch the flowers that have been stunted by the shade - come to life and grow.

This is what Harper has been doing; removing the strangling regulations of the environmentalists and others, removing the crippling business taxes - and sitting back and watching new enterprises start up.

Some austerity measures are needed - but they are gradual, such as the change in retirement from 65 to 67, but the key focus is on freeing the economy from the mindset that we can manage and control everything to create perfection (see cgh's excellent analysis of this in the old Eu thread).

Note how the US under Obama has chosen instead to strangle small businesses with more and more regulations, to smother them with the highest taxation in the world, and to increase the ratio of the population dependent on government entitlements. That's disastrous.

Now that France has chosen entitlements over austerity, can it and the other European nations choose to reduce business regulations and taxes and sit back and allow small businesses to emerge?

It should be further noted that outside of Greece and Ireland there is NO AUSTERITY. Even Germany spends more than a few years ago. (Funny thing it's 'socialist' Sweden that is actually being a bit austere.). The nominally centre-right governments elected some years ago were either far too tepid or they were actually left-wing (Sarkozy). When Cons don't deliver they get swept out...hmmm that seems oddly familiar...in a close to home kind of way.

Europe is going to get austerity one way or the other because a society cannot consume more than it produces. What happens when the banks decide to stop lending?

"Reality always avenges itself" - Ayn Rand

Just wondering, when has austerity ever actually worked? Any specific examples?

@ 2kevin at May 12, 2012 12:01 AM
"when has austerity ever actually worked?

Both world wars.

@ 2kevin at May 12, 2012 12:01 AM
"when has austerity ever actually worked?

Canada in the '90s.

Even if the Europeans did adopt more austerity measures it would only delay the inevitable.

Every fiat money system throughout history has collapsed and the Euro will as well.