By every appearance, we are entering the final, calamitous act of the European debt crisis, a sprawling, slow-motion debacle that is about to engulf the world in financial turmoil more acute than the American meltdown of 2008. For roughly two years, European authorities have struggled to keep the debt crisis from spinning out of control, doling out bailouts to small, heavily indebted nations such as Ireland, Portugal, and Greece. “Contagion” — the notion that a sovereign default in, say, Athens, might trigger a cascade of woes elsewhere — has been and remains the watchword.
Europe’s crisis took a dramatic turn for the worse with the sudden awareness, reflected by a steep increase in government bond yields, that the Italian economy may soon be on the financial chopping block alongside those of Greece, Portugal, and Ireland.
Europe’s slow-motion economic collapse continues apace as Eurozone governments and banks continue to wring their hands over what to do to postpone the inevitable Greek default. And now there’s a new wrinkle: Italy, whose level of sovereign indebtedness relative to GDP is second only to that of Greece, has suddenly appeared on investors’ radar screens. If Italy — the second largest economy in the Eurozone — goes the way of Greece, Ireland, and Portugal, there will not be enough money in Europe’s rapidly-dwindling rescue fund (the European Financial Stability Facility or EFSF) to effect a bailout.
The walls are closing in on the eurozone, as options for resolving the European debt crisis are about to narrow dramatically. After many months of drama and handwringing, the sovereign debt bailout express is about to run off the rails, leaving the European central bank, and probably a number of megabanks across Europe, in financial ruins, and most likely spelling the demise of the euro and of the entire eurozone experiment.
In defiance of all logic, the eurozone weathered a week of harrowing instability this past week, with Portugal, Spain, and Italy managing to persuade the bond markets that their sovereign debt is still worth the risk. Portugal was the primary focus of concern in this latest iteration of European economic upheaval, with speculation rife that the Iberian nation would be forced to accept an international bailout along the lines of what Greece and Ireland have already received. The Portuguese government spent the week leading up to last Wednesday’s successful auction of government bonds denying that Portugal needed outside assistance to solve its debt problem, and Wednesday’s results appeared to vindicate those claims.
The topic of the14th Amendment of the United States Constitution is continuing to stir debate in Washington, with those who favor increasing the debt limit at any cost raising the specter of President Obama simply overruling Congress and authorizing the issuance of new debt without the consent of lawmakers. According to this storyline, the president need only invoke Section 4 of the 14th Amendment, which states that “the validity of the public debt of the United States, authorized by law … shall not be questioned.” If Congress refuses to abide by its constitutional obligation to ensure government debts are paid, argue certain of Obama’s supporters, then the president would be justified in simply imposing his will on Congress to ensure that the 14th Amendment’s prohibition of government default is honored.
It’s a sad commentary on the state of affairs in Washington that the only occasions on which the United States Constitution is invoked with any reverence by the political establishment is when it appears to support the expansion of federal power. The topic du jour in the capital is the 14th Amendment, and whether it authorizes President Obama, in effect, to ignore the congressionally-imposed debt ceiling and instruct the Treasury to issue new debt to pay for old. For the record, the 14th Amendment’s Section Four states:
Although William F. Buckley, Jr., died more than three and a half years ago, his spirit clearly lives on in the National Review, the neoconservative political magazine he founded in 1955. The September 19 cover story, “Ron Paul’s Last Crusade,” by Kevin D. Williamson, purports to be an investigative piece about Congressman Ron Paul and his latest run for the presidency, but is instead a snide character assassination of Paul and an all-purpose smear on anyone who shares his convictions, including The John Birch Society.
Ben Shapiro’s bombshell, Primetime Propaganda, an exposé of left-wing propaganda at the movies and on television, is making Hollywood squirm. In a series of interview snippets available on Youtube, Tinseltown movers and shakers openly profess their support for discrimination against conservatives and for using their shows to catechize the public on behalf of the full gamut of liberal conceits.
Some of us remember our first reading of Atlas Shrugged like our first time behind the wheel of a car: intoxicating but inexplicably discomforting in spots. The 1,000-plus pages of Ayn Rand’s magnum opus positively pulse with the sorts of stuff that those of us in the freedom camp embrace: heroic capitalists, a strident anti-collectivist cant, and the unapologetic championing of individual rights.