AmSpec Blog readers, and particularly those of you who have read Power Grab, are all too aware of President Obama having serially told us to examine Spain and Germany to understand his models for a ‘green’ — meaning, centrally planned — economy. Then when Spain was proven to be a disaster threatening to actually bankrupt the country, without explanation Obama simply switched to saying Denmark and Germany.
Germany was soon also debunked as “a cautionary tale of massively expensive environmental and energy policy that is devoid of economic and environmental benefits” (by an old-line, state-funded think tank no less). Then, too, was Denmark — a risible model for America, having a population half the size of Manhattan, but hey, he called it — whose boondoggle was further affirmed in the Telegraph last week.
With all three case studies debunked and exposed as disastrous affairs requiring massive debt and further drags on the economy and competititveness,* in early August the New York Times engaged in a little two-step of hey, look over there, Portugal and Ireland are where success is really to be found. Yeah, that’s it.
Huh. OK. Oh, and here is today’s sub-headline in a piece on the Eurozone bailout fund from the Open Europe daily press briefing:
Goldman Sachs warns clients of “measurable risk” that Ireland and Portugal will tap fund
The major credit rating agencies Standard & Poor’s and Fitch have both granted the eurozone’s €440 billion rescue fund, known as the European Financial Stability Facility (EFSF), an AAA credit rating. The Telegraph notes that Goldman Sachs has warned its clients of a “measurable risk” that both Ireland and Portugal may have to tap the EFSF, though “probably only early next year” since both countries have adequate funding for several months.
…[T]he Guardian reports that the cost of borrowing for Ireland and Portugal reached record highs yesterday, with the head of Ireland’s central bank, Patrick Honohan, acknowledging that even tougher action on public spending may be required to win back investor confidence. An article in Handelsblatt also notes that doubts are increasing in Brussels over Ireland’s ability to solve its financial problems on its own. A comment piece in the paper suggests that “the EU had better prepare to use its big aid package for the first time”.
So, to paraphrase Obama in support of the Times’ attempt to save his plans, think about what’s happening in countries like Portugal and Ireland if you want to see the economic miracle that is the Left’s latest vehicle-slash-excuse for central planning.
* Yes, there are different ways to shift the burden, as I detail in Power Grab; Denmark seeks to escape the drag on competitiveness by exempting industry from the higher energy taxes, only to shift the pain to households, who pay Eruope’s highest residential electricity rates, three times the US household average (a truth elided by Tom Friedman’s praise for teh scheme, but which leaves the Danes, including members of family, living in very un-Friedman-like little houses, as I also detail). Peter’s business or household budget or both must be robbed to pay for Paul’s boondoggle.