Ukraine's Perilous Path Between Merkel and Putin

A Geo-Political Scylla and Charybdis
Everyone has a cheery smile, far-away eyes and a check book.

Rough Water: the EU and the RF's Customs Union [image]

With opportunities the Argo's Jason might have envied, Ukraine still faces a seemingly exclusive choice between two aggressively competitive courses -- and allies.  Interestingly,  in this awkward mix the Ukraine's attraction to neither enjoys much advantage from either closer geographical proximity or greater cultural similtudes.

Yet, there is history.

However, at this point the compelling attraction derived from that history depends on "how historical" the scope of its consideration will be.  Looking back through the annals of the place, there was, after all, a time when Ukraine was "more Russian" than even Russia is today.  Glimpsing at another second in the long story, Ukraine had to battle for its autonomous life amid the rapacious, colonial kingdoms in Balkan Europe when that place was inhabited by players such as the Hapsburgs, Poland and others.

When the various "pieces" of modern Ukraine were assembled 95 years ago, the Soviets had been violently in and out of Kiev and the Germans' post war capacity to "keep promises for assistance" were vaporizing in the ruins of the European economy.  In the ensuing century, those "pieces" were tediously and painfully consolidated by the typical factors -- ambition, greed, exhaustion, Xenophobic Soviet geopolitical colonialism and, perhaps most irritating among them all, inertia, isolation and neglect.

All of this history manifests itself in the present moment for Ukraine, but the action in the streets of Kiev today has far more to do with determining the future than with reconciling the chaotic past.

For ancient Jason and his Argonauts, the obsession was the distant city of Colchis where he hoped to find -- and probably steal -- the "Golden Fleece."  The tale became famous thanks to the almost relentless string of supernatural hardships placed as obstacles for his journey -- all emotion drenched vagaries imposed at the whimsy of the deific residents of Olympus.

Almost ironically, the location ancient kingdom of Colchis happens to be only a

[Map source}

couple of day's voyage across the Black Sea from Yalta. Jason was not fortunate enough to have disembarked from a port in near-by Crimea and, consequently, kept having supernatural "tentacle problems" all along the way.

Too much mythology?  Here's a recap and some links.

Jason's ARGO [painting source]

In some versions of the story, the sirens or sea monsters, Scylla and Charybdis, represented an alternate route which could be chosen by a captain wishing to avoid "The Clashing Rocks."

"While Scylla was bathing in the sea, the jealous Circe poured a potion into the sea water which caused Scylla to transform into a monster with four eyes, six long necks equipped with grisly heads, each of which contained three rows of sharp teeth. Her body consisted of twelve tentacle-like legs and a cat's tail while four to six dog-heads ringed her waist. In this form she attacked the ships of passing sailors, seizing one of the crew with each of her heads." [Read more.]

"The sea monster Charybdis lives under a small rock on one side of a narrow channel.Three times a day, Charybdis swallows a huge amount of water, before belching it back out again, creating large whirlpools capable of dragging a ship underwater." [Read more.]

All this mythology sets the stage for the point of this post.  Ukraine is currently "making its own journey," and its route seems chillingly similar to the tale of Jason and the Argonauts.  Standing firmly on this overly poetic, flimsy platform, perhaps MeanMesa can modernize Ukraine's epic course by suggesting clear eyes and a strong hand on the rudder -- even while being hypnotized by the sirens' call which seems to come from both sides.

Putin's Gambit

 For the Ukrainian Chess Match

Creating a "Game of Thrones" from a "Game of Pawns"

We can hardly fool ourselves at this point.  Ukraine faces the avarice of the same rapacious economic forces that are now ever present here in the US, the European Union and the Russian Federation.

Oligarchs.

As the Russian Federation emerged from the dismal grey of Soviet Communism, there was the predictable "unleashing of long constrained free market" which had been so passionately proselytized by propagandists and other half blind ideological dreamers west of the Warsaw Pact.  In other words, from their dank, shadowy, Soviet hiding places, the Russian oligarchs timidly traced their first uncertain foot steps into the light  By midnight of that first day they had established a saleable sort of an obedient, hybrid democracy which was already in their death grip at the moment of its joyous birth.

These ambitious corporatists did everything possible to gain control of the Russian Federation's new government, making significant headway even after a few "bumps in the road," but events now have left the ultimate oligarch, Vladimir Putin, in the undeniable seat of "decider."  [Those of us here in the US know this position quite well from our own experience with autocrat Bush II.]

Ukraine watched as this new Russian power structure flexed its muscles during a recent, violent, corrective denouement as the "decider," irritated with a billionaire's constant complaining, quietly transformed oil magnate Khodorkovsky from the richest man in Russia to inmate on a "judicial assembly line."

At issue here is the unavoidable fact that the Russian Federation today hosts an entire cloud of surviving "Khodorkovsky's."  They have private lines to the Kremlin, plenty of Rubles and sociopathic ambitions for all sorts of things -- including Ukraine's future.  They are attracted by all reservoirs of potential opportunity no matter who might otherwise be the legitimate inheritor.

This is the way they see Ukraine.  Putin's offer of Russian billions for a devious concoction of "economic development" and "debt relief" was approved by them, the design of that assistance was engineered by them [They not only intend to benefit from Ukraine's resurrected economy but also, they already hold plenty of Ukraine's debt.] and the outcome of Ukraine's acceptance of the plan will inevitably appear on the books of their asset accounts.

This innocent, compassionate "infusion" of cash will not look like Russian Federation colonialism on the day the agreement is finalized, but five years later, it will.

"In statements that seemed aimed at avoiding further antagonism of the thousands of protesters who remain camped on the streets here, officials in Kiev and Moscow emphasized that the possibility of Ukraine joining Russia’s customs union with Belarus and Kazakhstan would not be discussed at the meeting. 

At the same time, the increasing likelihood that Russia, not the West, would bolster Ukraine, which is facing a severe economic crisis, was being viewed as a potentially significant turning point in the now more than three-week-old civil uprising here." [Read the NYT article here.]

"Ukrainian President Viktor Yanukovych proposed Friday the creation of an advisory council with representatives from Ukraine, the European Union, and the Russia-led Customs Union, Itar-Tass reported.

Yanukovych’s comments came on the heels of a meeting with President Vladimir Putin in Minsk on Thursday evening. 

'We are mutually troubled regarding trade relations with Ukraine after the creation of a free trade zone with the EU,' Yanukovych said. 'Therefore we have proposed forming a standing advisory body with Ukraine, the EU and the Customs Union.'”  [Read the Moscow Times article here.]
 
While it might be attractive to imagine Vladimir Putin deep in thought, exploring the subtle mechanisms of Ukraine's successful future, this would be over generous and imprudent. Vlad is currently occupied with fabricating a labyrinthine scheme to neutralize the pro-EU protesters, resuscitate the daily more lack lustre Yanukovich and patiently, quietly and, importantly, "unofficially" add Ukraine's future to the already impressive holdings of The Russian Federation's oligarchs.

The EU's Promise

The European Unions' last few decades of deceptive gentrification has imaged those corresponding to Russia's oligarchs as "bond holders."  Beyond the modified title, and a lack of attraction to Samovars,  the dangerous psychology is almost a precise duplicate.  Perhaps the most notable discrepancy is in the measure of experience.  The European "bond holders" have been "practising their trade" for centuries.

The EU's "pitch" to Ukraine is dismally similar to the destructive "economic assistance" model of the IMF in its own recent expeditions.  While discussions of the general theme of the EU's offer are manifold in current "news" releases," MeanMesa finds this article from The Economist a remarkably frank, fresh, exception amid the horde. Original links remain enabled. [Read the original Economist article here.]

 

 

Charlemagne

Keep the door open

How Europe nearly lost Ukraine—but may yet regain it

Feb 8th 2014 | From the print edition

  

“WE ARE not in a bidding war with Russia” is the refrain of senior Europeans whenever they talk about the turmoil in Ukraine. In fact, they sometimes are. Now events in Kiev, particularly back-handed attempts to suppress its protests by force, have given the European Union an unexpected chance to try again with the offer that went spectacularly wrong two months ago. Indeed, the EU could yet help to pull Ukraine back from civil strife and salvage its battered European ideals. 

 

November’s Vilnius summit with the EU’s eastern neighbours was meant to be crowned by the signing of an association agreement and all-encompassing trade deal with Ukraine. It would have extended to it most of the EU’s single-market rules. But President Viktor Yanukovych unexpectedly rejected the deal and turned instead to Russia, which had threatened to squeeze out imports and also offered a $15 billion loan and cheaper gas—all in hopes of luring Ukraine into its own Eurasian customs union.

Outraged Ukrainians took over Kiev’s Independence Square (Maidan), rather as in the Orange revolution in 2004 (also directed at Mr Yanukovych). The president’s attempts to deal with the challenge with violence only made things worse. In January Mr Yanukovych pushed through repressive legislation, copied from Russian laws, and tried to clear the streets by force. This led to bigger protests, the death of several demonstrators, concerted pressure (rather more effectively from America than from the EU) and a semi-revolt by oligarchs. Taken aback, Mr Yanukovych sacked his prime minister, offered a conditional amnesty and is now seeking a deal with his foes.

Thanks to this, the EU is back in the game. Its foreign-policy chief, Catherine Ashton, went to Kiev this week to encourage a deal between Mr Yanukovych and the opposition. So did Victoria Nuland, America’s assistant secretary of state for European affairs. The two weeks of the Sochi Olympics hosted by Russia’s president, Vladimir Putin, may offer a window for diplomacy to pull Ukraine back from what Leonid Kravchuk, a former president, has called “the brink of civil war”. Thereafter, Mr Yanukovych may feel less restrained from more violent tactics.

The Europeans disagree over what went wrong. To some, Mr Yanukovych played them as fools, using the EU deal to improve Russia’s offer. To others, the EU was wrong to insist on the release of Yulia Tymoshenko, a former prime minister jailed by Mr Yanukovych. A third theory holds that the EU offer lacked a crucial element: the promise of eventual EU membership. A fourth says the very notion of an “eastern partnership” was misconceived. It was born out of the failure in 2008 to put Ukraine and Georgia on the road to NATO membership. Extending the EU’s economic border, as opposed to NATO’s military one, was seen as less provocative. But Russia came to treat it as equally objectionable.

All these debates have now been overtaken by events. The brutishness of Mr Yanukovych and the feistiness of the protesters (despite less savoury radicals in their midst) means the key question is no longer the terms of any deal with the EU but the nature of government in Ukraine. Is Mr Yanukovych a man the EU can do business with? Little matter. Lady Ashton is focusing on a constitutional settlement to reduce the president’s authority, and possibly early elections. Was it a mistake to stake all on the flawed Mrs Tymoshenko? She is now a sideshow. The immediate issue is the proposed amnesty for jailed protesters. Did the EU make the right offer? Irrelevant for now. The association agreement has been set on one side.

Attention is now on a new economic package from the EU and the IMF. This is not necessarily dependent on the association agreement, but rather on a new government undertaking economic reform. “Our offer is easier,” says one European minister. “Our condition is that Ukraine should start fixing its economy. Russia’s condition is that Ukraine should become a vassal.”

Europe’s task

None of this offers certainty that Ukraine can resolve its conflict or become a modern European democracy. Russia cares more about losing Ukraine than the EU cares about winning it. Still, the sight of protesters flying the EU’s blue flag with gold stars over the snow-covered barricades with a fervour unseen in the drizzle of Brussels should give Europeans pause for thought. If the cause of Europe has any meaning, it is surely the idea of promoting liberty and democracy, and overcoming divisions, across the continent.

It must ultimately be for Ukrainians to decide where they stand between east and west. But beyond immediate crisis management, the EU can do two things. Right now it should make clear, like the Americans, that it will impose sanctions on those who use force to steal the country’s wealth, and on oligarchs who support a rotten system. Even without Belarus-style visa bans and asset seizures, much can already be done: Schengen countries can blacklist individuals, and money-laundering rules require banks to watch out for suspicious activity in the accounts of “politically exposed persons”. In the medium term, Europe needs fully integrated energy markets and grids, including Ukraine’s, to reduce the scope for Russian blackmail.

In the longer term, Europe can give Ukrainians new hope by keeping the door open to Ukraine’s membership of the EU. True, enlargement is not a popular cause in times of crisis. But Ukraine will not become a candidate in the near future. The EU needs only to reaffirm article 49 of its own treaty: any European state that abides by European values is eligible to join. The “perspective” of membership will not solve everything. But it helps reform-minded countries to undergo wrenching economic and political change. Europe is not omnipotent. But it still offers a potent symbol to its neighbours.

After the EU's finance ministers correctly diagnosed out of control -- and economically ineffective -- government spending among its member states such as Greece, Portugal, Spain and Italy, the "ever present" bond holders were attracted to austerity like night flying mosquitoes to a bug zapper.

According to their values, any pain which could enable -- and compel -- these debtor states to maintain their interest payments were on the table.  Unhappily, the brutal, largely German, imposed form of this EU austerity remained in place long enough to mortally wound these "debt ridden economies targeted for assistance" before the first thoughts about a "different path" emerged. [After the continuing collapse of these national economies under austerity measures, we heard the first few words about "maybe considering focusing on growth."]

Let's just say that these patients were removed from the ICU, separated from their IV's and relocated to rolling gurneys in the hall way.

The "different path" idea is an important one, that is, important to Europe, but also especially important to Ukraine.

Strangely, it seems that all oligarchs, bond holders and their ilk remain tragically hypnotized by some of the very worst ideas of the thirty year old "supply side" Reagan-nomics.  This same complaint can be extended generally to the individuals and policies in those countries which, in turn, borrowed and spent all this money which now comprises the debt of these debtor nations.

All the national economies mentioned -- now including the Ukraine -- are not suffering from a "supply side" crisis.  They are suffering from a "demand side" crisis.  Their economies are facing the current dilemma due to a lack of demand.

The EU's idea of assistance for Ukraine is firmly rooted in improving "opportunities" for increased trade.  "Improving opportunities" means enhancing "supply side" possibilities.  Ironically, in The Economist article the Europeans quoted characterized the Russian offer with the term: "vassals."

They should know.
 

Ukraine's Third Course

Yanukovich is no Jason

Amid the passion of those in the streets of Kiev the temptation to slide into a false dualism can grow overwhelming, but history is littered with tragedies derived from absolutist type "either/or" thinking.  When the future seems to hold forth only two choices, all sorts of alternate opportunities can be too easily dispatched in the process.

This is not to say that Ukrainians have that "third option" at this moment,  but it is to say that everyone there should start thinking about what that kind of an option might be.  Further, that "everyone" means "everyone."

Ukrainians in the streets, the state police confronting them, Ukrainians who supported Yanukovich, religious Ukrainians, modern Ukrainians and even Ukranians who still sentimentally reminisce about the old Soviet times all have a "dog in this fight."  Every Ukrainian will pay a high price for not getting this right, and every Ukrainian will benefit greatly from getting this right.

MeanMesa would be callous indeed to make a shallow, prefunctory division of the players in the present conflict, but for sake of establishing "generalized interests" for a convenient reference let's say that Ukraine is divided along the lines of East and West.  This is important because any long term resolution for the interests manifest in the passion on the streets of Kiev will, of necessity, need to embrace the respective interests of both sides.

The answer required will be a blend of the corresponding advantages and disadvantages offered by both Merkel and Putin.  From what is lurking in the shadowy details of what has already been proposed one can, given sufficient motivation and effort, piece together a Ukrainian solution which might be acceptable to all parties.

Let's look at what might be "on the plate" for a new government of reconciliation -- including a reasonable bit of austerity.  Ukrainian austerity.

The whole country needs investment, but the agreeable part of that prospect pretty much ends right there.  Both "ends" of Ukraine need markets and demand.  Putin's offer includes access to a Russian demand for the products of the industrial East, while Merkel's offer centers on a European demand for products of a mercantile West.

The "rub" comes from EU's implied offer to embrace the West's as-of-yet unrealized production capacity.  The promise is that, once austerity has been imposed, the EU will open its rather deep pockets to provide the capital to develop West Ukraine into this "European style" industrialized economy.

The obvious problem is revealed in example.  "Industrialized economies" within the EU are hardly dangling the bait as attractive, successful role models.  Almost without exception, they are -- today -- still staggering forward with depressed markets, high unemployment and the stubborn investment "cash vacuum" lingering after the last attack on the global economy by the oligarchs, autocrats, bond holders and bankers.

Ukraine really doesn't need to go here.

Whether Ukraine does, in fact, "go there" will depend almost entirely on the government which emerges from the opposing forces we see in the "news."  While MeanMesa would never suggest a policy endorsing isolationism, it would be a good time to direct all development resources to domestic targets and domestic opportunities.

It is not a fact that a successful, future Ukrainian economy must be supported primarily by the export of manufactured production, yet this quiet implication seems permanently embedded in what's being proposed from both the East and the West.

If money is to be borrowed to reinforce the economy, borrow it for infrastructure.  If jobs must be created to reinforce the economy, hire Ukrainians to build infrastructure.  If there must be incentives for industrial development, target those incentives on the manufacture of goods which can be consumed by Ukrainians.

Stifle corruption -- both domestic and foreign.  Place a high priority on establishing a government that is trustworthy.  Sell reconstruction bonds to the domestic population.  Create a Ukrainian stock market and a national bank.  Done well, these can become the bulwarks of economic nationalism.  Economic nationalism, once functioning in a credible manner, will inspire Ukrainians to participate in their government, not a minor accomplishment.  [For anyone questioning the priority of that last idea, just take a hard look at what has happened to the United States.]

Finally, be aware that climate change is impacting the global food production. Next, have a look at Ukraine's flag.  That golden band represents wheat fields.  It may be the "Golden Fleece" after all. Economic theories always seem to be infatuated with industry, but that may well be a thing of the past.  The whole world is awash with industry producing products with no market.

There is nothing -- absolutely nothing -- more foundational for a demand economy than food.

God speed, Ukraine.

Скорость бог Украине

Don't Be Too Generous With French Austerity

Of course the college students were in the streets.  What else might one reasonably expect in Paris?  MeanMesa just supposes that the latest "economy mending" scheme from Mr. Sarkozy wasn't such a big hit with the working class folks.

The semi-comatose News Hour viewer arrives at the carefully crafted, pre-conclusion attitude very easily.  The French economy is in shambles -- thanks largely to the same forces which have plunged our domestic US economy into shambles.  

Oh my.  Something must be done to re-establish economic order!

How about scratching out a couple of extra years before we have to pay the pensions to all those French lefties when they retire?  Not a bad plan.  Naturally, there seem to be a few loose ends in the decision, but after a few days of mayhem on the streets, everyone will settle down and live with it. 

After all, something had to be done.

However, as MeanMesa tries to size this up and make sense out of it, a few other "flies in the ointment" keep buzzing about in an otherwise calming suave.  For one thing, there aren't enough jobs in the French economy to go around now, that is, with the current population of French workers.   Why add even more?  For another, a 62 year old Frenchman is going to have roughly the same difficulty earning a living wage there as he would here.

France has seen the same "out shipment" of jobs we've seen here -- and, unhappily, for the same reason.  Savage greed doesn't end at our shores nor do our oceans protect us from it -- especially not when the savage greed has sprouted in our own garden.  When the oligarchs seize control of any government, every regulation and incentive which might even remotely serve the national good is immediately branded socialistic and discarded.

Except in France, of course, the brand socialist doesn't carry quite the same stink as it does around here.  However, even this concept represents a task a bit too complicated for Fox "News" to teach the hill billies.  Better to just coast on the ideological terror campaigns of the Cold War.  If there's not enough paranoia left over, even after all these decades, to keep the old "Godless Communist" fires stoked, at least  there's enough to keep them smoldering.

So, what about all this European austerity?   Is it really the out right result of a too liberal social program for the working poor or is there a little more to its actual causes -- and benefactors?  Yes, the economies of Portugal, Ireland, Greece and a few others are in the dumpster, but does the largesse of these respective governments in providing unfunded social safety nets really represent the foundation of the whole problem?

Over here, it is apparently against the law to even so much as hint otherwise here in the "land of the free."  

However, in that MeanMesa is not actually one of the major players in managed media, an un-noticeably small infraction of the law might not bring the rapid exit of our corporate sponsors, especially given that we have none.  So, there seem to be a few untended, irritating observations still bubbling over the "lid of the pot."  Let's take a quick look at a few.

The Quantity and Price of Labor

We already know that the gleefully crafted Republican Recession has, as one of its fundamental root causes, an appetite on the part of the extremely short sighted oligarchs for lower labor costs.  Of course, for them there is the obvious answer of simply going off to the nearest third world dictatorship to shop for slave labor.  However, if American workers have no jobs and no money, these rich boys are left with a market where their customers are broke.

The only money maker left at that point is to increase the amounts these workers can borrow, leaving the desolated ruling class no option but to simple struggle ahaead, left with only a few bloody scraps of credit card and pay-day loan interest.

In the "austerity countries," there are the same sickening collection of "post free marketers" as here.  Blinded by their suicidal short term profit epileptic fits, lower labor costs are the "cat's meow."  Their wet dream is that the old musical chairs scheme will leave some other oligarch over extended in the no money, no customers, no business lurch after they have extracted the last few cents and left town.

So, for them, "austerity" means austerity for the working class.  The higher unemployment rises, the more desperate the workers.  Shuffling a few million 62 year old geezers in the fast food shops increases the available labor quantity.  Jobs become even harder to find, and wages being offered -- for every job -- continue to plunge.  Labor becomes more and more economical until, gosh, it's just as low as Bangladesh.

A Correction for Poverty Distribution but not Wealth Distribution

Not a one of these "austerity" countries went over the brink repairing roads, providing health care, subsidizing education or the like.  Yes, every one of them did those things, but not with "pretend money" which was claimed by the oligarch class out of the goodness of their socialistic hearts.  The working classes in these countries made regular payments for those programs every time they took home a pay check.  It was their money -- money contributed from the wages of the workers -- which had been voted on, levied and collected to provide those services.

Wealth only needed to be "re-distributed upward" when the oligarchs had  finally -- and mortally -- failed to recklessly continue looting the treasuries to make good their outrageous gambles of risk and greed.  Only when these plutocrats saw their paper castles collapsing like piles of autumn leaves did they, once again, trot out the "socialism" song bemoaning the greed of the lower classes.

The grotesque "austerity" programs were no more than the next step on the ladder.  The elite had already made all necessary provisions for their exclusive place on the life boats.  To make the trip across the Atlantic, only the nouns needed to be changed in the story.  Over here we use the term "entitlements" to characterize the old age pensions we wage earners have so loyally paid over the years.

Why, those Social Security checks, according to John Boehner's cronies, are nothing but extortion "gifts" we have extracted from the pockets of those who rightfully owned all that money all along.  Now, our domestic version of "austerity" means giving up our fraudulent "entitlements" without damaging the dollars made legitimately by the "masters of the universe" and their hacks in the Congress.

But wait.  Didn't the people getting Social Security pay for it?

This unsettling line of reasoning runs even deeper into the quick.  When we review the immense deficits of the W's autocracy, can we actually see that all those red-lined costs benefitted the public?  Was our country's infrastructure the proud recipient of all those billions?  Did education improve?  Did much of anything improve?  That is, "much of anything" beyond the accumulating wealth of the billionaire class?

Hell.  Did our aging public schools got so much as a roof repair?

To see the European "austerity" policies in "down home terms," we need not look beyond the W's deficit spending record.  In a sickening "mirror image" of the economic calamities in Europe, through an arcane collection of redistribution schemes tax money was first diverted to the "ownership class" without limit, then the ensuing economic disaster was blamed on the "uppity" working class who so selfishly demanded schools, roads and jobs.

After the "capitalistic" prosperity had been surgically removed from the economy, the "socialist" wasteland was left for the working class.

Another Reorganization of Ownership

Further, we shouldn't assume that the billionaires -- either domestic or European -- are losing sleep worrying about having accidentally initiated some sort of revolution.  The primary irritant in their lives is impatience.  They have to wait until the collapse progresses far enough that the prices of all the commercial assets they want to buy has reached "rock bottom."

After that, the portfolio of the oligarchs will once again stabilize.  When the mergers and acquisitions of all these "bargain basement" assets has been finally accomplished, those oligarchs know that the Congress and Senate will become even more interested in "serving up desert."  The role -- and even the existence -- of a middle class will fade to nothing more than a past-times phenomenon which was ultimately corrected in 2010.

Now that's some real "free market" capitalism by golly!

Just try to save as much as possible.  Times will get a bit rocky for a while -- at least two years, but MeanMesa sees all of this as a temporary glitch.  History tells us that the process of economically subjugating the masses may seem to lead to "high times," indeed, but time has a habit of correcting such momentary fantasies.

Even poor people remember the sensation of a full stomach, a warm, well fed family and hope for the future.  Not even Will Durant's expansive long time models present any historical evidence that an entire class of people will simply forget these things.

So, John Boehner and Fox "News," good luck with disguising everything about your latest  "austerity" scheme.  Just don't plan on the prospect that it will go on forever.

Speeches We'd Like to Hear - Obama on the Deficit

Of course, any blog as megomaniacal as MeanMesa entertains fleeting fantasies of our President "lowering the boom" on his prevaricating detractors.  However, reality is what it is, and our President is not an inflammatory, finger pointing imbecile.  

The citizens of the country have been edged into a neurotic state of expecting more of the autocrat's three syllable "hate phrases," and the far more genteel Obama seems unsettling secure -- and mature -- by comparison, not to mention literate.

Still, there remains the fantasy.  Wouldn't it be nice to "put words in his mouth?"

The most recent flood of lies and misrepresentation of fact deals with the deficit.  As the President's approval rating dips to the 50% range, we have to conclude that the relentless barrage of fear mongering and sleazy incitation is inflicting is damage.  However unpalatable to the Commander in Chief, the consequences of this latest, cynical manipulation of uninformed voters is approaching the gravity of a national security threat.

It is time for Barack Obama to become the "teacher."  In this case, the class subject must be the deficit.

"Greetings my fellow Americans,

This evening I can no longer 'mince words' about a serious threat which is confronting our nation.  Although my political advisers warned me in strongest terms not to introduce 'charts and graphs' in this message, I find it necessary to be completely frank and open about certain facts.  Those same advisers counseled me to avoid what might seem political references to past administrations.  Regrettably, I also find it necessary to break my own rule in this respect.

I have no interest in using this opportunity to make political advantages.  However, we have no choice at this point but to face facts, and some of those facts have names associated with them.


Recent days have seen great efforts being made to confuse or misrepresent the information I intend to present tonight.  In the Congress my Republican colleagues have attempted to color the facts concerning our deficit and the resulting national debt into a political advantage for themselves.


Perhaps my talk tonight will help make these sometimes complicated matters clear.  Make no mistake.  The economy of our country is my responsibility.  That happened when I took the oath of my office.  However, as Americans we are all in this together.


For this reason and because a growing misunderstanding of the difficulties we face as a nation has begun to cloud our best common sense as a people, this speech tonight is reserved for this single topic.


Now to the charts.  I ask that every one of you give me the following few minutes to go over the facts about our deficit and our national debt.

 (Image source - MeanMesa)

The first chart shows the annual deficits our government has incurred since 1975.  Each year is shown, red bars representing the years of Republican administrations and blue bars the years of Democratic administrations.  To make this even more clear, the names of the respective Presidents are shown above the bars.


The scale on the left is marked in 'Billions of Dollars.'  The actual deficits for each year, in billions of dollars, is marked above each bar for each year.


We can see that the Federal Budget of this country has operated at a deficit for the entire span of the years on the graph.  We have continually spent more money than we have received in taxes.


Each of these annual budget deficits gets added to make the total of our national debt.  We, as a nation, find ourselves borrowing the money required to 'service' this debt.  Some of the borrowing is from citizens in the United States, but much of it is borrowed from other countries.  The interest we pay on this borrowed money is immense, getting higher and higher every year.


That interest cost is now so high that it is beginning to harm our national economy.  Our national debt has grown so large that it is becoming more difficult to borrow more money.


As we look over this first chart -- by the way, there are only two of them -- we see that some of the loudest voices in the Senate and the House of Representatives who are now attacking this administration on the deficit of our budget were voting in favor of the exact spending which sky rocketed our debt.


My Republican colleagues have voted lock step against every piece of legislation we have introduced to 'bend the curve' on this deficit and debt problem.  They recently voted against an extension of unemployment payments.  They voted against childrens' health care, against regulations for banks and Wall Street, against mortgage foreclosure assistance and against plans to spur jobs growth.


In every one of these cases, their complaint was that such legislation would increase the deficit.  Yet, when we look at this chart, we have to think that such a position is a new one for them.  These same Congressman and Senators voted for more deficit with every Republican administration since Ronald Reagan, the first American President to preside over a $1 Trillion dollar debt.

(Image source - MeanMesa)

Now, I really have some explaining to do.  This year, my budget showed a $1 Trillion deficit -- roughly twice as high as the last year of the previous administration.  Why am I sitting here saying these things about past deficits when my own record is even worse?  Why were we spending money at that rate?

I added the actual cost of the wars in Iraq and Afghanistan to my budget.  They had always been 'emergency supplemental' bills before. 

The answer is in my first chart.  As the national debt sky rocketed, especially in the last few years before I became President, our economy began to feel the heat.  Unemployment shot up out of control during the last seven months before I took office.  The economic downturn of the recession and other regulatory problems reduced the entire national wealth of the United States by roughly one third.

Everyone with a 401K plan or a house which has lost value knows that first hand.  The value of the stock in your retirement accounts went down.

As our economy contracted, the revenue the government receives from taxes also went down sharply.

My advisers told me two important things, and it turns out that they were right on both counts.  First, we needed to spend money to get cash back into our economy and create jobs.  We did that with the American Recovery Act, and that part of their plan is working out fairly well.

However, the second thing they told me was that just as soon as we emerge from this recession, it would be time to cut the deficit, and not just a little tweeking here and there.  I intend to do that.

The news from Europe is about austerity programs designed to drastically cut budgets there.  We face many of the same type of cuts.  We already see teachers, policemen and fire fighters giving salary reductions or being laid off in communities which simply can no longer afford the policies they had previously.

We will likely see more.  Our economy is larger and healthier than those European cases, but some of the same kinds of austerity will be necessary here.  These changes will be painful, but they are unavoidable.  When such sacrifices are necessary for all of us, each American must understand clearly what has caused this and what we must do to correct it.

Tonight, I am asking all my fellow Americans to stay with me. We, as a nation, will get through this so long as we remain clear-headed and  keep our American common sense.  My administration is doing everything we can to make this work.  I am counting on Americans to get through this with me.

Thank you, and God Bless America."

MeanMesa's compliments to the President.