The Gingrich Project Reaches its Tipping Point

DECEMBER 27, 2011

The Gingrich Project Reaches its

Tipping Point

Commentary and Analysis

By

Jay B Gaskill

This article is also Posted in htm format at –

http://jaygaskill.com/GingScale.htmlon the Policy Think Site.

As 2011 draws to a close, we notice that the remaining effective campaign period is only ten months. When Newt’s entire campaign staff resigned in the summer of 2011*, it was a sign that they already knew about the potentially fatal weakness I’m about to identify. It takes two years of full-on preparation to capture the presidency from an incumbent.

* How soon we forget: ”Newt Gingrich’s top fundraisers have quit his presidential campaign, weeks after his top aides and strategists in key states such as Iowa and South Carolina resigned en masse.” USA Today 7-21-11

It is almost too late to be distracted by talk about Mr. Gingrich’s flaws and baggage, and whether they matter. …Because in the real world – right now in the 2012 presidential election cycle, just three factors trump everything else: (1) preparation, (2) organization and (3) staffing.

For each of those three factors, there is one critical differential. It is the margin that defines winners, losers, players and bystanders: This differential is presidential scale. This is the key differential that defines a serious, credible presidential run, and rules out the rest. Serious attention to scale is especially critical when challenging an incumbent president.

Governor Perry’s early debate lapses revealed a truly embarrassing deficit in subject-matter preparation. But hen former governor Palin mused in pubic whether it is o is not now “too late”, she was acknowledging the reality and relevance of the scale problem, especially as it relates to organization and staffing.

The Newt Gingrich campaign faces a major scaling challenge.

I am reminded of the early Dot Com bubble days when hundreds of would-be IPO millionaires were emboldened with a couple of good ideas and some V-Cap seed money. Trolling for their first customers, these proto-successes sold projects and promised deliveries that could never be credibly launched, let alone brought to fruition, without staff support they did not yet have. In those dizzy days of irrational exuberance the dot-communist entrepreneurs believed in an infinitely available supply of willing, able, highly motivated coworkers who would be hired as needed – much as you can snag a taxi at a metropolitan airport.

The sales forces of these startups had much in common with the style and bluster of Mr. Gingrich himself: Think of the well-articulated creative imagination coupled with a promised implementation that is fueled mostly by bluster and hope. More often than not, this is a fantasy construct masquerading as a scalable organization. It reflects the dot-communist notion that sales generate products and services, instead of the reverse, in effect a “buy it and somehow we will make it happen” campaign. As in the dot-com failures, the Gingrich campaign is based on the oft promised but rarely realized notion of rapid, reliable scalability.

At this point only one GOP POTUS candidate has a widely distributed staff, numbering in the hundreds…and it’s not Mr. Gingrich.

Iowa is a major pivot point.

In an 11-18-11 report we learned that Gingrich rehired two of the Iowa staff members who quit during the referenced mass resignations.

On 12-21 we learned that “The Rasmussen Reports survey of Iowa caucus participants shows Romney on top with 25% of the vote followed by Paul at 20% and former House Speaker Newt Gingrich at 17%. Texas Governor Rick Perry and former Pennsylvania Senator Rick Santorum, both at 10%, are the only other candidates in double-digits.” […as reported in the Weekly Standard]

Iowa is an essential win for the GOP nominee in the general election, very important to Romney, but critical to Gingrich campaign in the primary process. The January 3rd Iowa caucus is just a bump in the road for a well funded, well organized candidate like Governor Romney, but represents a potential stumbling block for a work-in-progress like Speaker Gingrich. Unless the Gingrich campaign pulls off a decisive win in Iowa, there may well not be sufficient momentum to build a full fledged national campaign infrastructure before “super Tuesday” on March 8.

On 12-24, we learned that the Gingrich campaign failed to collect the minimum number of qualifying signatures to have a place on the Virginia ballot.

A one man show needs more than mesmerizing stage magic to stay competitive in, say, 40 states on the way to earning 270 electoral votes in November. Because the Gingrich campaign still lacks credible scalability, January 2012 will be the ‘now or never’ month, and the January 31st Florida primary will be the last pivotal Gingrich event.

Note: I am not suggesting that no one other than Romney will be nominated, including, especially Newt Gingrich. My point is that, at present, no candidate other than Romney has achieved the organizational scale to win a national campaign, or for that matter sufficient to assemble a transition team that is fully ready to govern on day one.

My read on the uncertainties, threats and instabilities afoot in the USA and the world tells me that any new president will arrive at a traumatic moment in American history.

Flash forward to late October 2012, say, about 10 days before the general election for POTUS. I believe that the American people will be deeply unsettled, discontent and – more to the point, very worried and insecure about their future. They will be receptive for a change in leadership, to be sure,but they will not to eager to risk just any change, not willing to try out just any leader.

Try a thought experiment: Imagine that you have booked a flight on a smaller plane – a trip than can’t be delayed or avoided. It is one of those stormy nights with worse weather predicted to come. With some misgivings and great apprehension, you take your seat. Then the pilot comes on board. Everyone strains to catch a glimpse. Think through three scenarios in which one pilot resembles Barak Obama, one looks like Newt Gingrich, and is more one like Mitt Romney. You and the other passengers are hoping for the calm assurance, the disciplined competence and the reassuring demeanor of, say, Captain Chesley “Sully” Sullenberger of the Hudson River landing fame.

To be fair, appearances are often deceiving (as those who are disappointed in our current president’s actual performance can attest) moreover, analogies and thought experiments like that bad weather in a small plane, are not always apt. But when you hear a pilot’s over the ambient flight noise voice intone “The only thing we have to fear is fear itself”, you hope to God he knows how to manage a safe landing.

JBG

Copyright © 2011 by Jay B Gaskill, Attorney at Law. First published on the Policy Think Site and the Dot -2- Dot Blog. Forwards and links with attribution are welcome and appreciated. For other permissions and comments, contact the author at – law@jaygaskill.com .

LIVING IN THE AYN RAND UNIVERSE

LIVING IN THE AYN RAND UNIVERSE

Commentary

By

Jay B Gaskill

In Ayn Rand’s[i] famous novel, Atlas Shrugged, there is a capitalist strike, i.e., a concerted work stoppage by a number of key movers and shakers of industry.  The book is really an extended thought experiment in which the sudden absence of productive, creative managers, entrepreneurs and inventors brilliantly limns the core flaw in Marx’s labour theory of value.  When the creative and organizational contributions of the “capitalists” are suddenly subtracted, the economic engine stalls, and workers lose jobs.

As the Italian revolutionary nationalist, Garibaldi reportedly observed, “The more things change, the more they stay the same.”  I submit that the current economic stall is the slow-motion version of Atlas Shrugged. I’ll develop that argument in more detail, but first, allow a brief sketch of some relevant background.

Karl Marx invented the term “capitalist”.  It was used as an intentionally crude caricature of a much more complicated reality.  At the time Marx’s first volume of Das Kapital was published[ii], the USA was struggling with nascent capitalism in the immediate aftermath of the Civil War; the British were still practicing Imperial mercantilism; and the rest of Europe had so entangled politics and commerce that what we call “free enterprise” was mostly confined to micro zones inhabited by unregulated street merchants, often dealing in barter.

In the mercantilist model, key sectors of the “private” economy are actually “chartered” monopolies (think of the colonial English East India Company) and all trade is a highly controlled instrument of nationalist or imperial policy. Barter capitalism is as old as the street merchants of Byzantium.

I believe that modern crony capitalism is the direct successor of mercantilism.

At the time of Marx’s Das Kapital, truly free markets were very rare, and the accumulation of wealth was almost always the result of a political partnership with the ruling elites of the day and place.  Stage One communism switched out royal elites for party bosses and substituted party apparatchiks for company executives.  This was a recipe for stagnation and poverty, beautifully captured in the widely quoted aphorism of one Polish communist worker who lamented, “They pretend to pay us and we pretend to work.”

When Stage One communism failed, both Russia and China adopted neo-mercantilist models.  Russia is now practicing a gangsta version of mercantilism while China is attempting to invent Stage Two communism by using a mix of wild-west capitalism, police state executions and mercantilist trade policies.  To describe the Chinese experiment as unstable is an understatement.

Meantime, Western Europe and England experimented with Marxism-Lite (renamed as “social democracy” or Fabian socialism and its variants) while tolerating a small, beleaguered private sector.

In Europe, China, Russia, and in the post-depression era USA, capitalists have been tolerated by the predominantly leftish elites as a source of wealth to be exploited for public purposes.  The ambivalence of the American left towards capitalist figures like the late Steve Jobs is emblematic of the dynamics attendant the American brand of crony capitalism[iii].

Honest-to-goodness free-market capitalists still operate best on the margins – i.e., in the less regulated cracks that appear in the world’s vast overlapping web of regulations and restrictions, much like their street-vendor cousins.  But thanks to the communication and transportation revolution, the “cracks” themselves have rapidly and radically expanded to include the entire world-wide commercial web.

Compare California and Italy.  Both have severely overspent their limited tax-based income on pensions, social services and other constituent-friendly programs.  Both face a reckoning.  Neither can reasonably expect a bailout.  Both are actively seeking new tax revenue sources.  California experimented in the 1990’s with extra top bracket to its state income tax, but reversed course based on anecdotal evidence that the targeted earners were fleeing the state to friendlier tax environments.  Italy has briefly flirted with a similar tax increase but has balked because of a similar belief that high earners would leave the country.  Actual personal behavior is complicated because other factors affect net personal incomes and constrain movement.  But businesses are notoriously sensitive to tax changes that affect net returns, especially those enterprises with high volume and low per unit profit margins.  Over time, entire populations do relocate themselves to increase net income.

This is one of several ways that free movement constrains sovereign behavior. Short of reinstituting slavery or serfdom, all sovereigns in the modern world face the same four elemental problems: (1) people who are unable to retain their earnings eventually vote with their feet; (2) expropriating their left-behind assets virtually guarantees they will not return as long as a hungry sovereign waits for them; (3) government puppet institutions, whether nominally “private” or overtly public, do not often fare well in a competitive environment; (4) the world economy has generated a very competitive environment.  Among the many lessons of the four enumerated problems that have not yet been absorbed by the first world governments are these: (a) the fruits of constructive freedom cannot forever be bottled or contained; (b) undisciplined parasites eventually bleed out the host.

Of course, investments do not follow exactly the same escape patterns as some portable taxpayers have – especially when investors find themselves trapped by political exploitation in mid-enterprise.  A key difference is that investments, especially startup investments, can adjust their positions in time as well as in space.  Location, location, location is part of the picture to be sure.  Stable, Western-style democracies with mature legal, banking and financial systems are greatly preferred locations by investors, and other factors like proximity to customers, talent, affordable work forces and shipping are strong location considerations as well.  But timing is almost everything where investment decisions are finally made.

At the present time there are trillions of private investment dollars (actual and equivalent, domestic and foreign) that remain effectively parked (think of grounded aircraft in bad weather), quite possibly more than the current US administration has caused the federal government to borrow over the last three years.

If is as if we are witnessing an Atlas Shrugged style capital strike.  But no conspiracy was needed.  The operators of aircraft and ships don’t need to hatch a conspiracy to sit out a storm, nor do capitalists need to form a cabal to hold back taking investment risks when profit-making conditions have been rendered unfavorable by political interference in the marketplace.

Granted, not all of the parked trillions are poised to invest in the USA.  But when and if the time is once again is ripe for it, an investment surge will be available turn around the American economy, propel sustainable growth, restore robust employment and repair the depleted government fisc.  That is the good news.  The sobering news is that major changes in the US political, regulatory and investment climate must first take place and be perceived by the larger investment community as sufficiently stable for any such economic turnaround to take hold.  Short term political adjustments produce bubbles.  The US needs something better this time.

The volatile stock markets should not be confused with the parked investment money.  Much of it that money is tied up is real assets like energy and commodity reserves.  Such money is not readily risked, especially when the financial system itself is overleveraged and potentially subject to a further brutal correction.

Last year there was a private meeting in Beijing between an important American entrepreneur and a very important Chinese official.  Both must remain unnamed here[iv].  The American was complaining about business conditions in the US at the time, and mentioned our president by name in that context.  The Chinese official wryly cracked, “How do you like life under communism?”

Even if the current occupant of 1600 Pennsylvania Avenue were to experience a second term, Clintonesque triangulation, an authentic shift-to-the center epiphany, it just will not be quite enough, because our current president’s credibility has been squandered, possibly irrevocably so.

The other good news in all this is that the USA is sitting on massive unexploited energy reserves[v] and has a huge unrealized agricultural production potential.  These are real, not paper assets.

A new team in the White House may or may not succeed in healing a wounded economy in the short term, but there is no realistic way forward without a real change in leadership.  We can kvetch and pontificate about Ms. Rand’s “selfish” philosophy, but her critique of Karl Marx and his latter day disciples was spot on. Creative genius and entrepreneurial risk takers are not propelled by selfless altruism, but the cumulative fruits of their constructive activities have lifted the lives of countless millions of the so-called 99 percent.

JBG

Copyright © 2011 by Jay B Gaskill, Attorney at Law

Forwards and links are welcomed and encouraged. For comments and all reprint permissions, contact the author: law@jaygaskill.com

End Notes


[i] Ayn Rand is the pen name for the daughter of a commercial family whose property was confiscated by the Soviets. Alisa Zinov’yevna Rosenbaum escaped to the USA, eventually changing her name to Ayn Rand.  In her breakout novel, The Fountainhead, the nexus between creative freedom and intellectual property was explicit, and in Atlas Shrugged, the underlying links between artistic innovation, invention and commercial freedom were central to the storyline.  Her philosophical writings, loosely grouped under the rubric, Objectivism, have been scathingly dismissed by the left as amoral.  But Ms. Rand’s passion for creative freedom as a moral imperative was a specific commitment that transcended “mere” greed and belied the parodic attempts to marginalize an original, serious ethic, sharply relevant to the modern human condition.

[ii] Volume 1 was published in 1867, followed after Marx’s death in 1885 by Volume 2 (from KM’s notes assembled and amplified by Fredrick Engels). The first English translation appeared in 1887. At that time, outside of the USA, there were few examples of free market “capitalism” anywhere in the world.

[iii] Isaacson’s brilliant biography demonstrates that the late Steve Jobs was definitely not a crony-capitalist.  His special cachet among liberals is attributable to his lifestyle affinity and strong identification with the anti-corporate creative sub-culture.  But Steve Jobs was a classic entrepreneurial capitalist in the purest sense who displayed in his passionate devotion to the perfection of his craft and products a distinct thematic kinship with Ms. Rand’s fictional architect hero of The Fountainhead, Howard Roark.

[iv] One degree of separation separates me from this conversation.

[v] For a quick and heartening review, read Hoover scholar Victor Davis Hanson’s article, “Oil Rich America?” http://www.victorhanson.com/articles/hanson121211.html.

Published on The Policy Think Site [www.jaygaskill.com]

& The Dot-2-Dot Blog [http://www.jaygaskill.com/dot2dot/]

Addendum

A comment – “Tell us, Mr. Gaskill, do you acknowledge that Krugman’s three unpleasant truths really are true? If so, what would you want the next Congress and President to do about them? Do you think there is any chance that the next Congress and President will in fact do anything about them?”

My answer: The current administration has run out of time and ideas.  Here are the three truths that are most relevant, IMHO: The next president needs to be able to govern in the context of stalled private investment, catastrophic sovereign debt  and a riotous sense of entitlement.

And a fourth truth looms, to wit: The prescriptions of John Maynard Keynes no longer work in the global economy.

For more, please follow the links at the end of my short piece

We have only one president at a time.  The next one will face some very heavy lifting indeed.

JBG

PAUL KRUGMAN WAS

Paul Krugman Was

By

Jay B Gaskill

When Paul Krugman delivers unpleasant truths, he uses his redistributionist ideological predispositions as camouflage.

Compare his three recent New York Times columns: Monday, December 4, “Send in the Clueless”, Friday, December 8, “All the GOP’s Gekkos” and Monday, December 12, 2011, “Depression and Democracy”.

Last Monday: Paul Krugman opined that “2012 should be a year of Republican triumph.” Then he added that “The larger point, however, is that whoever finally gets the Republican nomination will be a deeply flawed candidate. And these flaws won’t be an accident, the result of bad luck regarding who chose to make a run this time around; the fact that the party is committed to demonstrably false beliefs means that only fakers or the befuddled can get through the selection process.” Then, referring to “… the proverbial tale of the dog who had better not catch that car he’s chasing” Krugman added “If the [GOP] dog actually catches the car — the actual job of running the U.S. government — it will have no idea what to do…”

On Friday he wrote that “The truth is that what’s good for the 1 percent, or even better the 0.1 percent, isn’t necessarily good for the rest of America — and Mr. Romney’s career illustrates that point perfectly. There’s no need, and no reason, to hate Mr. Romney and others like him. We do, however, need to get such people paying more in taxes.”

On the following Monday, December 12th, Krugman opined, “It’s time to start calling the current situation what it is: a depression. True, it’s not a full replay of the Great Depression, but that’s cold comfort.” The piece was mostly about Europe, put pointedly Dr. Krugman did not omit the USA.

The New York Times’ Paul Krugman was an economist.  But because we define ourselves by or most public acts, Krugman is a polemic columnist.

Decoding these three columns is easy enough.  On the first Monday of December, Paul Krugman was telling us that the GOP will take the presidency; on Friday he told us that he hopes the nominee will tax the 1% more, and on the following Monday (today as I wrote this) he predicts a world-wide depression.

The New York Times columnist Paul Krugman is a real world Ellsworth Toohey* endowed with well-earned credentials in traditional economic theories at a moment in history when the core assumptions of those theories –that Keynesian economics could painlessly and safely fund the redistributionist policies of the progressive left forever without any painful reckoning – have been fully discredited by events.

What Paul Krugman is not telling us is that Mr. Obama was the first dog to catch the car.

__

*If the literary reference escapes you, ask any well-read libertarian friend.

Copyright 2011 by Jay B Gaskill, Attorney at Law

Forwards & links are welcome and encouraged.

For other permissions, or comments & inquiries, please contact the author at law@jaygaskill.com . Visit the Policy Think Site at  www.jaygaskill.com where you will find links to the Dot-2-Dot Blog and other articles and sites of interest to realistic liberals and intelligent conservatives. Mr. Gaskill’s mind-bending collection, “The Lost Souls Coffee Shop”, is available for your iPad or reader from Amazon, Barnes and Noble and other e-vendors.

LINKS:

http://jaygaskill.com/KeynsianCollapse.pdf

http://jaygaskill.com/ChinaKrugmanGreatAdjustment.htm

http://jaygaskill.com/ConservativeSurge.htm

http://jaygaskill.com/CreativityAndSurvival.htm

MONSTERS WITHOUT GRACE

MONSTERS WITHOUT GRACE

By

Jay B Gaskill

Marxism is a repellant caricature of Judeo-Christian ethics[i], the brutal substitution of faux material equality and collective political justice for equality before God and individuated personal justice. It is as if some ballet impresario trotted out Frankenstein’s monster on stage, miming the dance with crude mechanical movements, deprived of all grace, beauty and spirit.

The temptation to achieve via the levers of political power that which we are called to do in our individual personal relationships[ii] is the ultimate Faustian bargain, as the hell-on-earth reigns of Communist socialism and National Socialism appallingly demonstrated.

The Nazi movement was a reactive form of nationalist socialism, erupting in opposition to the internationalist communist template.  In place of the “scientific socialism” of Marx and Engels the Nazis produced “scientific” eugenics, infused with triumphalist racist mythology.[iii] Marxism and its nemesis, National Socialism, were twins separated at birth.  Neither represented authentic science, but both were dedicated to remaking the human race, using faux scientific means, one though economic leveling, one through “purity” leveling.  Both movements trumpeted “social justice”, by which was meant the socialist justice of the Party.

Whether we are ruled by Marxism-Lite[iv] or Nazism Lite or the full-on brutal versions of these monsters, ultimately we end up living the same nightmare.[v]

At the end of freedom, it matters little whether power was seized in a sudden stroke or acquired at the end of a chronic withering disease. Rulers may achieve dominance via the blitzkrieg, the putsch, the coup or the revolution, or they may creep into power though the stealthy consolidation of political and bureaucratic control: all these means lead to the same sorry outcome[vi].  When freedom is suffocated, the death of its supporters follows.

Beware the authoritarian-Lite – it is darkness in disguise. As Abraham Clark, one of the signatories to the Declaration of Independence put it, “Freedom or a halter.”[vii]

__

Copyright © 2011 by Jay B Gaskill, Attorney at Law

Forwards and links are welcomed and encouraged.  For reprint or other permissions, and comments, contact the author: law@jaygaskill.com

The Policy Think Site – www.jaygaskill.com

The i-2-i Blog – http://jaygaskill.com/i2i/

The Dot-2Dot Blog- http://www.jaygaskill.com/dot2dot

End Notes


[i] One common thread in these two great religious traditions is that all individuals are equally accountable to the Creator notwithstanding rank, position or wealth.  While individual religious sub-communities may volunteer in communal sharing of resources (thinking of the rules of certain monastic groups) these religious traditions have not called for or even approved the large scale forcible expropriation and redistribution of property among society at large.  Indeed, the Decalogue condemns envy and disapproves the coveting of the property of others.

[ii] The injunction to love one’s neighbor as one’s self is shared in both traditions. Note that this expresses an ideal nuanced, individual relationship, not a bureaucratic collectivist one.

[iii] The later mutations of Nazi eugenics have taken several contemporary forms, including the preferential female abortions in China, the racially weighted abortions in the USA, actually credited by some defenders with “reducing the inner city crime rate”, and in form of the “let’s thin out the human overpopulation” elements of the of a growing cohort environmentalist activists- some of whom are willing to use violent means.  An enduring lesson: Malignant ideas never die out, they just return in mutated forms.

[iv] Progressivism needs to be distinguished from ordinary liberalism in that it contemplates (as did the British Fabian Socialist movement) a gradual implementation of comprehensive egalitarian socialism (Marxism by another name) over several decades of time. This strategy of progressive gradualism was adopted on the grounds that a democratic society would never agree to the rapid implementation of comprehensive socialism, except in extremis.  But the ultimate progressive goal was and remains the same as that of the revolutionary communists.  While traditional liberals are willing to reserve permanent protected zones for free enterprise (in the “mixed economy” models), progressives regard this only as a temporary tactical pause in the inevitable march to enforced economic equality.

[v] Leveling is the enemy of creative achievement. Whatever the contrary protestations and early behaviors of authoritarian levelers may be, when they consolidate power, the creative men and women who are able always seek asylum elsewhere.  The vitality of the US musical and artistic communities greatly benefitted from Nazi and Soviet émigré creative artists. Creative communities are the mine-canaries of all authoritarian leveling-regimes.

[vi] The consolidation of economic power under political control and management will always reach a tipping point after which the exercise of political freedom is sharply limited, and the realistic prospects of the recovery of all other lost freedoms, creative, entrepreneurial and personal, becomes remote.

[vii] “Our Declaration of Independence I dare say you have seen; a few weeks will probable determine our fate: perfect freedom or absolute slavery; to some of us, freedom or a halter. Our fates are in the hands of an Almighty God…”

Four Related Links:

Political liberalism is a Secular Religion (This essay has a circulation in the thousands.)

http://jaygaskill.com/liberalismasreligion.htm

The Marx Virus Strikes (Read a single page example.)

http://jaygaskill.com/TheMarxVirus.html

When the Sleeping Giant Awakes (Populist rebellions tend not to end well, even for the common people.)

http://jaygaskill.com/WhenTheSleepingGiantWakes.htm

&

Creativity & Survival, Building a World Renaissance Using the American Model

(Renaissance minds of the world unite.  The only thing you have to lose is your pessimism, your ambivalence and the future of civilization. 17 pages)

http://jaygaskill.com/CreativityAndSurvival.pdf

Europe is our Crash Dummy

THANK THE CRASH DUMMY

By

Jay B Gaskill

Since 2002, the collective European sovereign debt has outgrown the gross domestic products of the same nations by about 20 trillion Euros. There simply are not enough free euros to prevent even one small European default, certainly not enough capital for a bailout on the required multi-state scale… period.   Several countries are headed to a daisy-chain default sometime within the next 12 to 20 months.   They include Greece, Portugal, Spain Italy and even France.   There is a tipping point somewhere down this timeline, after which events will move very quickly.

The current maneuvering within the EU is a thinly disguised kick-the-can down-the-road maneuver for one last time.  It is not designed to prevent default (because default is inevitable), but only to buy more time to try find effective ways to protect some comparatively solvent healthy EU banks.  Whatever protective steps are taken in the next few weeks, when several countries capsize and go under in nearby waters, there will be a great sucking vortex.  Boats will toss in Europe and the UK and unsettling ripples will reach the shores of US commerce.

Only the US has enough time to take the austerity measures that can head off a bloody reckoning here.

“NEW YORK (Dow Jones)–U.S. companies are beginning to discuss a once-unthinkable possibility: life after the euro. Europe’s sovereign debt crisis has dragged on for over two years, but it wasn’t until the last few weeks that banks and other big currency market participants began warning that one or more countries could leave the euro. European leaders have yet to agree on how to assist countries that cannot finance their debt, a task made all the more difficult as the euro zone teeters on the edge of a recession.”

The Wall Street Journal, 12-1-11

“The European problem is a ballooning welfare entitlement state that is bankrupting most of Europe’s governments. And high European tax rates are strangling economic growth. And the debt that private investors won’t buy is held by a banking system that is increasingly vulnerable. And Germany, the strongman of Europe, doesn’t want to pay to bail out the southern countries or anyone else — including, it would seem, France.” Larry Kudlow, host of CNBC’s “The Kudlow Report”.

Do we take to the hills or what?

Realistic optimism is grounded in the understanding that three forces in human affairs – rational self-interest, moral clarity and the thirst for freedom – will always converge in to rescue us from stupidity and denial.  The combined impact of these three forces cannot forever be denied or marginalized even by the most sophisticated elites.

It is not in the rational self-interest of a comparatively healthy enterprise or country to commit fiscal suicide by accelerating its own demise in a futile attempt to rescue another enterprise or country bent on self-destruction.  Common sense is founded in moral clarity.  The collectivization of failure is a form of suicidal behavior bordering on evil.  When a healthy organism, enterprise or country refuses to accept the “wisdom” of governing elites who are asking it to fatally damage itself in order to join or remain in a sick system, that is manifestly not evil.  It is an exercise of rational self-interest and an assertion of freedom and common sense.

We can be cautiously optimistic because a pivotal moment inevitably arrives when good people recover their common sense, courage and will, because history always provides them with an “oh shit epiphany”.   You hear it on the black box flight recorders as the last words of the hapless pilots just before impact.  It is a gift.  Pray that epiphany arrives when we still have enough time to pull out of a dive.  Reality is a stern teacher.  Belated foresight sharply punctures the balloon of the prevailing illusions.  But there are always survivors.  The key is to be among them.

Why were the prophets so often ridiculed and berated in their lifetimes?  …Because the four words that most foolish elites hate to hear above all others are – I told you so.

Europe is the crash dummy of our time.  It is a gift.  Take heed, there is still time for us.

JBG

Copyright © 2011 by Jay B Gaskill, Attorney at law As first published on The Policy Think Site www.jaygaskill.com – And the Dot-2-Dot Blog.