Marxist Dreams and Soviet Realities
by
Ralph Raico
The sharp contrast that Alexis de Tocqueville drew in 1835 between
the United States and Tsarist Russia — “the principle of the former is
freedom; of the latter, servitude”
[1] — became much sharper after 1917, when the Russian Empire was transformed into the Soviet Union.
Like the United States, the Soviet Union is a nation founded on a
distinct ideology. In the case of America, the ideology was
fundamentally Lockean liberalism; its best expressions are the
Declaration of Independence and the Bill of Rights of the U.S.
Constitution. The Ninth Amendment, in particular, breathes the spirit of
the worldview of late-18th-century America.
[2]
The Founders believed that there exist natural, individual rights that,
taken together, constitute a moral framework for political life.
Translated into law, this framework defines the social space within
which men voluntarily interact; it allows for the spontaneous
coordination and ongoing mutual adjustment of the various plans that the
members of society form to guide and fill their lives.
The Soviet Union was founded on a very different ideology, Marxism,
as understood and interpreted by V. I. Lenin. Marxism, with its roots in
Hegelian philosophy, was a quite conscious revolt against the
individual rights doctrine of the previous century. The leaders of the
Bolshevik party (which changed its name to Communist in 1918) were
virtually all revolutionary intellectuals, in accordance with the
strategy set forth by Lenin in his 1902 work
What Is to Be Done?[3]
They were avid students of the works of Marx and Engels published in
their lifetimes or shortly thereafter and known to the theoreticians of
the Second International. The Bolshevik leaders viewed themselves as the
executors of the Marxist program, as those whom History had called upon
to realize the apocalyptic transition to Communist society foretold by
the founders of their faith.
The aim they inherited from Marx and Engels was nothing less than the
final realization of human freedom and the end of the “prehistory” of
the human race. Theirs was the Promethean dream of the rehabilitation of
Man and his conquest of his rightful place as master of the world and
lord of creation.
Building on the work of Michael Polanyi and Ludwig von Mises, Paul
Craig Roberts has demonstrated — in books that deserve to be much better
known than they are, since they provide an important key to the history
of the 20th century
[4]
— the meaning of freedom in Marxism. It lies in the abolition of
alienation, i.e., of commodity production, production for the market.
For Marx and Engels, the market represents not merely the arena of
capitalist exploitation but, more fundamentally, a systematic insult to
the dignity of Man. Through it, the consequences of Man’s action escape
from his control and turn on him in malign ways. Thus, the insight that
market processes generate results that were no part of anyone’s
intention becomes, for Marxism, the very reason to condemn them. As Marx
wrote of the stage of Communist society before the total disappearance
of scarcity,
freedom in this field can consist only in socialized man,
the associated producers, rationally regulating their interchange with
Nature, bringing it under their common control, instead of being ruled
by it as by the blind forces of Nature.[5]
The point is made most clearly by Engels:
With the seizure of the means of production by society,
production of commodities is done away with, and with it the dominion of
the product over the producers. Anarchy of social production is
replaced by conscious organization according to plan. The whole sphere
of the conditions of life which surround men, which ruled men up until
now comes under the dominion and conscious control of men, who become
for the first time the real, conscious lords of nature, because and in
that they become master of their own social organization. The laws of
their own social activity, which confronted them until this point as
alien laws of nature, controlling them, then are applied by men with
full understanding, and so mastered by them. Only from then on will men
make their history themselves in full consciousness; only from then on
will the social causes they set in motion have in the main and in
constantly increasing proportion, also the results intended by them. It
is the leap of mankind from the realm of necessity to the realm of
freedom.[6]
Thus, Man’s freedom would be expressed in the total control exercised
by the associated producers in planning the economy and, with it, all
of social life. No longer would the unintended consequences of Man’s
actions bring disaster and despair — there
would be no such consequences.
Man would determine his own fate. Left unexplained was how millions
upon millions of separate individuals could be expected to act with one
mind and one will — could suddenly become “Man” — especially since it
was alleged that the state, the indispensable engine of coercion, would
wither away.
Already in Marx and Engels’s day — decades before the establishment
of the Soviet state — there were some with a shrewd idea of just who it
was that would assume the title role when the time came to perform the
heroic melodrama, Man Creates His Own Destiny. The most celebrated of
Marx’s early critics was the Russian anarchist Michael Bakunin, for whom
Marx was “the Bismarck of socialism” and who warned that Marxism was a
doctrine ideally fitted to function as the ideology — in the Marxist
sense: the systematic rationalization and obfuscation — of the power
urges of revolutionary intellectuals. It would lead, Bakunin warned, to
the creation of “a new class,” which would establish “the most
aristocratic, despotic, arrogant, and contemptuous of all regimes”
[7]
and entrench its control over the producing classes of society.
Bakunin’s analysis was extended and elaborated by the Pole Waclaw
Machajski.
[8]
Despite this analysis — or perhaps as a confirmation of it — the
Marxist vision came to inspire generations of intellectuals in Europe
and even in America. In the course of the vast, senseless carnage that
was the First World War, the Tsarist Empire collapsed and the immense
Imperial Russian Army was fragmented into atoms. A small group of
Marxist intellectuals seized power. What could be more natural than
that, once in power, they should try to bring into being the vision that
was their whole purpose and aim? The problem was that the audacity of
their dream was matched only by the depth of their economic ignorance.
In August 1917 — three months before he took power — this is how Lenin, in
State and Revolution,
characterized the skills needed to run a national economy in the “first
phase” of Communism, the one he and his associates were about to embark
upon:
The accounting and control necessary for this have been
simplified by capitalism to the utmost, till they have become the
extraordinarily simple operations of watching, recording and issuing
receipts, within the reach of anybody who can read and write and knows
the first four rules of arithmetic.[9]
Nikolai Bukharin, a leading “Old Bolshevik,” in 1919 wrote, together
with Evgeny Preobrazhensky, one of the most widely read Bolshevik texts.
It was
The ABC of Communism, a work that went through 18
Soviet editions and was translated into 20 languages. Bukharin and
Preobrazhensky “were regarded as the Party’s two ablest economists.”
[10]
According to them, Communist society is, in the first place, “an
organized society,” based on a detailed, precisely calculated plan,
which includes the “assignment” of labor to the various branches of
production. As for distribution, according to these eminent Bolshevik
economists, all products will be delivered to communal warehouses, and
the members of society will draw them out in accordance with their
self-defined needs.
[11]
Favorable mentions of Bukharin in the Soviet press are now taken to be exciting signs of the glories of
glasnost, and in his speech of November 2, 1987, Mikhail Gorbachev partially rehabilitated him.
[12]
It should be remembered that Bukharin is the man who wrote, “We shall
proceed to a standardization of the intellectuals; we shall manufacture
them as in a factory”
[13] and who stated, in justification of Leninist tyranny:
Proletarian coercion, in all its forms,
from executions to forced labor, is, paradoxical as it may sound, the
method of molding communist humanity out of the human material of the
capitalist period.[14]
The shaping of the “human material” at their disposal into something higher — the manufacture of the New Soviet Man,
Homo sovieticus — was essential to their vision of all the millions of individuals in society acting together, with one mind and one will,
[15]
and it was shared by all the Communist leaders. It was to this end, for
instance, that Lilina, Zinoviev’s wife, spoke out for the
“nationalization” of children, in order to mold them into good
Communists.
[16]
The most articulate and brilliant of the Bolsheviks put it most plainly and best. At the end of his
Literature and Revolution,
written in 1924, Leon Trotsky placed the famous, and justly ridiculed,
last lines: Under Communism, he wrote, “The average human type will rise
to the heights of an Aristotle, a Goethe, or a Marx. And above this
ridge new peaks will rise.” This dazzling prophecy was justified in his
mind, however, by what he had written in the few pages preceding. Under
Communism, Man will “reconstruct society and himself in accord with his
own plan.” “Traditional family life” will be transformed, the “laws of
heredity and blind sexual selection” will be obviated, and Man’s purpose
will be “to create a higher social biological type, or, if your please,
a superman.”
[17] (The full quotation can be found in the article on Trotsky in this volume.)
I suggest that what we have here, in the sheer willfulness of Trotsky
and the other Bolsheviks, in their urge to replace God, nature, and
spontaneous social order with total, conscious planning by themselves,
is something that transcends politics in any ordinary sense of the term.
It may well be that to understand what is at issue we must ascend to
another level, and that more useful in understanding it than the works
of the classical liberal economists and political theorists is the
superb novel of the great Christian apologist C. S. Lewis,
That Hideous Strength.
Now, the fundamental changes in human nature that the Communist
leaders undertook to make require, in the nature of the case, absolute
political power in a few directing hands. During the French Revolution,
Robespierre and the other Jacobin leaders set out to transform human
nature in accordance with the theories of Jean-Jacques Rousseau. This
was not the only cause but it was surely one of the causes of the Reign
of Terror. The Communists soon discovered what the Jacobins had learned:
that such an enterprise requires that Terror be erected into a system
of government.
[18]
The Red Terror began early on. In his celebrated November 1987
speech, Gorbachev confined the Communist Reign of Terror to the Stalin
years and stated:
Many thousands of people inside and outside the party
were subjected to wholesale repressive measures. Such, comrades, is the
bitter truth.[19]
But by no means is this the whole of the bitter truth. By the end of
1917, the repressive organs of the new Soviet state had been organized
into the Cheka, later known by other names, including OGPU, NKVD, and
KGB. The various mandates under which the Cheka operated may be
illustrated by an order signed by Lenin on February 21, 1918: that men
and women of the bourgeoisie be drafted into labor battalions to dig
trenches under the supervision of Red Guards, with “those resisting to
be shot.” Others, including “speculators” and counter-revolutionary
agitators, were “to be shot on the scene of their crime.” To a Bolshevik
who objected to the phrasing, Lenin replied, “Surely you do not imagine
that we shall be victorious without applying the most cruel
revolutionary terror?”
[20]
The number of Cheka executions that amounted to legalized murder in
the period from late 1917 to early 1922 — including neither the victims
of the Revolutionary Tribunals and the Red Army itself nor the
insurgents killed by the Cheka — has been estimated by one authority at
140,000.
[21]
As a reference point, consider that the number of political executions
under the repressive Tsarist regime from 1866 to 1917 was about 44,000,
including during and after the Revolution of 1905
[22]
(except that the persons executed were accorded trials), and the
comparable figure for the French Revolutionary Reign of Terror was
18,000 to 20,000.
[23] Clearly, with the first Marxist state something new had come into the world.
In the Leninist period — that is, up to 1924 — fall also the war
against the peasantry that was part of “war communism” and the famine
conditions, culminating in the famine of 1921, that resulted from the
attempt to realize the Marxist dream. The best estimate of the human
cost of those episodes is around 6,000,000 persons.
[24]
But the guilt of Lenin and the Old Bolsheviks — and of Marx himself —
does not end here. Gorbachev asserted that “the Stalin personality cult
was certainly not inevitable.”
“Inevitable” is a large word, but if something like Stalinism had not
occurred, it would have been close to a miracle. Scorning what Marx and
Engels had derided as mere “bourgeois” freedom and “bourgeois”
jurisprudence,
[25]
Lenin destroyed freedom of the press, abolished all protections against
the police power, and rejected any hint of division of powers and
checks and balances in government. It would have saved the peoples of
Russia an immense amount of suffering if Lenin — and Marx and Engels
before him — had not quite so brusquely dismissed the work of men like
Montesquieu and Jefferson, Benjamin Constant and Alexis de Tocqueville.
These writers had been preoccupied with the problem of how to thwart the
state’s ever-present drive toward absolute power. They laid out, often
in painstaking detail, the political arrangements that are required, the
social forces that must be nurtured, in order to avert tyranny. But to
Marx and his Bolshevik followers, this was nothing more than “bourgeois
ideology,” obsolete and of no relevance to the future socialist society.
Any trace of decentralization or division of power, the slightest
suggestion of a countervailing force to the central authority of the
“associated producers,” ran directly contrary to the vision of the
unitary planning of the whole of social life.
[26]
The toll among the peasantry was even greater under Stalin’s collectivization
[27]
and the famine of 1933 — a deliberate one this time, aimed at
terrorizing and crushing the peasants, especially of the Ukraine. We
shall never know the full truth of this demonic crime, but it seems
likely that perhaps ten or 12,000,000 persons lost their lives as a
result of these Communist policies — as many or more than the total of
all the dead in all the armies in the First World War.
[28]
One is stunned. Who could have conceived that within a few years what
the Communists were to do in the Ukraine would rival the appalling
butcheries of World War I — Verdun, the Somme, Passchendaele?
They died in hell,
They called it Passchendaele.
But what word to use, then, for what the Communists made of the Ukraine?
Vladimir Grossman, a Russian novelist who experienced the famine of 1933, wrote about it in his novel
Forever Flowing, published in the West. An eyewitness to the famine in the Ukraine stated,
Then I came to understand the main thing for the Soviet
power is the Plan. Fulfill the Plan.… Fathers and mothers tried to save
their children, to save a little bread, and they were told: You hate our
socialist country, you want to ruin the Plan, you are parasites,
kulaks, fiends, reptiles. When they took the grain, they told the
kolkhoz [collective farm] members they would be fed out of the reserve
fund. They lied. They would not give grain to the hungry.[29]
The labor camps for “class-enemies” had already been established under Lenin, as early as August 1918.
[30]
They were vastly enlarged under his successor. Alexander Solzhenitsyn
compared them to an archipelago spread across the great sea of the
Soviet Union. The camps grew and grew. Who were sent there? Any with
lingering Tsarist sentiments and recalcitrant members of the middle
classes, liberals, Mensheviks, anarchists, priests and laity of the
Orthodox Church, Baptists and other religious dissidents, “wreckers,”
suspects of every description, then, “kulaks” and peasants by the
hundreds of thousands.
During the Great Purge of the middle 1930s, the Communist bureaucrats
and intellectuals themselves were victims, and at that point there was a
certain sort of thinker in the West who now began to notice the camps,
and the executions, for the first time. More masses of human beings were
shipped in after the annexations of eastern Poland and the Baltic
states; then enemy prisoners of war, the internal “enemy nationalities,”
and the returning Soviet prisoners of war (viewed as traitors for
having surrendered), who flooded into the camps after 1945 — in
Solzhenitsyn’s words, “vast dense gray shoals like ocean herring.”
[31]
The most notorious of the camps was Kolyma, in eastern Siberia — in
actuality, a system of camps four times the size of France. There the
death rate may have been as high as 50 per cent per year
[32]
and the number of deaths was probably on the order of 3,000,000. It
goes on and on. In 1940 there was Katyn and the murder of the Polish
officers; in 1952, the leaders of Yiddish culture in the Soviet Union
were liquidated en masse
[33]
— both drops in the bucket for Stalin. During the Purges there were
probably about 7,000,000 arrests, and one out of every ten arrested was
executed.
[34]
How many died altogether? No one will ever know. What is certain is
that the Soviet Union has been the worst reeking charnel house of the
whole awful 20th century, worse even than the one the Nazis created (but
then they had less time).
[35]
The sum total of deaths due to Soviet policy — in the Stalin period
alone — deaths from the collectivization and the terror famine, the
executions and the Gulag, is probably on the order of 20,000,000.
[36]
As
glasnost proceeds and these landmarks of Soviet history
are uncovered and explored to a greater or lesser degree, it is to be
hoped that Gorbachev and his followers will not fail to point an
accusing finger at the West for the part it played in masking these
crimes. I am referring to the shameful chapter in 20th-century
intellectual history involving the fellow travelers of Soviet Communism
and their apologias for Stalinism. Americans, especially American
college students, have been made familiar with the wrongs of McCarthyism
in our own history. This is as it should be. The harassment and public
humiliation of innocent private persons is iniquitous, and the U.S.
government must always be held to the standards established by the Bill
of Rights. But surely we should also remember and inform young Americans
of the accomplices in a far different order of wrongs — those
progressive intellectuals who “worshiped at the temple of [Soviet]
planning”
[37]
and lied and evaded the truth to protect the homeland of socialism,
while millions were martyred. Not only George Bernard Shaw,
[38] Sidney and Beatrice Webb, Harold Laski, and Jean-Paul Sartre, but, for instance, the Moscow correspondent of the
New York Times, Walter Duranty, who told his readers, in August 1933, at the height of the famine:
Any report of famine in Russia is today an exaggeration
or malignant propaganda. The food shortage which has affected almost the
whole population in the last year and particularly in the
grain-producing provinces — the Ukraine, North Caucasus, the lower Volga
region — has, however, caused heavy loss of life.[39]
For his “objective” reporting from the Soviet Union, Duranty won a Pulitzer Prize.
[40]
Or — to take another fellow traveler virtually at random — we should
keep in mind the valuable work of Owen Lattimore of Johns Hopkins
University. Professor Lattimore visited Kolyma in the summer of 1944, as
an aide to the Vice President of the United States, Henry Wallace. He
wrote a glowing report on the camp and on its chief warden, Commandant
Nikishov, for the
National Geographic.[41] Lattimore compared Kolyma to a combination of the Hudson’s Bay Company and the TVA.
[42]
The number of the influential American fellow travelers was, in fact,
legion, and I can think of no moral principle that would justify our
forgetting what they did and what they did it in aid of.
In his speech of November 2, Gorbachev declared that Stalin was
guilty of “enormous and unforgivable crimes” and announced that a
special commission of the Central Committee is to prepare a history of
the Communist party of the Soviet Union that will reflect the realities
of Stalin’s rule. Andrei Sakharov has called for the full disclosure of
“the entire, terrible truth of Stalin and his era.”
[43]
But can the Communist leaders really afford to tell the entire truth?
At the Twentieth Party Congress in 1956, Nikita Khrushchev revealed the
tip of the iceberg of Stalinist crimes, and Poland rose up and there
took place the immortal Hungarian Revolution, when they did
high deeds in Hungary
To pass all men’s believing.
What would it mean to reveal the entire truth? Could the Communist
leaders admit, for instance, that during World War II, “the losses
inflicted by the Soviet state upon its own people rivaled any the
Germans could inflict on the battlefield”? That “the Nazi concentration
camps were modified versions of Soviet originals,” whose evolution the
German leadership had followed with some care. That, in short, “the
Soviet Union is not only the original killer state, but the model one”?
[44] If they did that, what might the consequences not be this time?
But the fact that the victims of Soviet Communism can never be fully
acknowledged in their homelands is all the more reason that, as a matter
of historical justice, we in the West must endeavor to keep their
memory alive.
Did Bernanke Prevent Another Depression?
In a lecture given at George Washington University on March 27, 2012,
the chairman of the Fed said that the US central bank’s aggressive
response to the 2007–2009 financial crisis and recession helped prevent a
worldwide catastrophe. Various economic indicators were showing ominous
signs at the time. After closing at 3.1 percent in September 2007, the
yearly rate of growth of industrial production fell to minus 14.8
percent by June 2009. The yearly rate of growth of housing starts fell
from 20.5 percent in January 2005 to minus 54.8 percent in January 2009.
Also, retail sales came under severe pressure — year on year, the
rate of growth fell from 5.2 percent in November 2007 to minus 11.5
percent by August 2008. The unemployment rate jumped from 4.4 percent in
March 2007 to 10 percent by October 2009. During this period, the
number of unemployed people increased from 13.389 million to 15.421
million — an increase of 2.032 million.
In response to the collapse of the key economic data and a fear of a
financial meltdown, the US central bank aggressively pumped money into
the banking system. As a result, the Federal Reserve balance sheet
jumped from $0.884 trillion in February 2008 to $2.247 trillion in
December 2008. The yearly rate of growth of the balance sheet climbed
from 1.5 percent in February 2008 to 152.8 percent by December of that
year. Additionally the Fed aggressively lowered the federal-funds rate
target from 5.25 percent in August 2007 to almost nil by December 2008.
Despite this pumping, the growth momentum of commercial-bank lending
had been declining with the yearly rate of growth falling from 11.9
percent in January 2007 to minus 5.3 percent by November 2009. As a
result of the fall in the growth momentum of lending, the growth
momentum of the money supply would have followed suit if not for the
Fed’s aggressive pumping to the commercial paper market. This pushed the
yearly rate of growth of our measure of US money supply from 1.5
percent in April 2008 to 14.3 percent by August 2009.
In his speech Bernanke blamed reckless lending in the housing market
and financial engineering for the economic crisis. He also acknowledged
that the supervision by the Fed was inadequate. According to Bernanke,
once the crises emerged the Fed had to act aggressively in order to
prevent the crisis from developing into a serious economic disaster. The
Fed chairman holds that a highly accommodative monetary policy helps
support economic recovery and employment.
We hold that various reckless activities in the housing market
couldn’t have emerged without the Fed’s previous reckless policies.
After closing at 6.5 percent in December 2000, the federal-funds rate
target was lowered to 1 percent by May 2004. The yearly rate of growth
of our monetary measure, AMS, jumped from minus 0.9 percent in December
2000 to 11.5 percent by December 2001. In short, the strong increase in
the growth momentum of money supply coupled with an aggressive lowering
of interest rates set the platform for various bubble activities, or an
economic boom.
A reversal of the Fed’s loose stance put an end to the false boom and
put pressure on various bubble activities. The federal-funds-rate
target was lifted from 1 percent in May 2004 to 5.25 percent by June
2006. The yearly rate of growth of AMS plunged from 11.5 percent in
December 2001 to 0.6 percent in May 2007. As it happened, the effect of
this tightening was felt in the housing market first before it spilled
over to other bubble sectors. (A tighter monetary stance slowed down the
diversion of real savings toward bubble activities from
wealth-generating activities.)
Contrary to Bernanke, we suggest that his loose monetary policy of
August 2007 didn’t save the US economy but saved various bubble
activities that had come under pressure from the previous tighter
monetary stance.
Note the loose monetary stance has been aggressively diverting real
funding from wealth generators towards bubble activities, thereby
weakening the wealth-generation process. The only reason why loose
monetary policy supposedly “revived” the economy is because there are
still enough wealth generators to support the Fed’s reckless policy.
Also, note that all the gains from the previous tighter stance have now
been wasted to support bubble activities.
As long as the pool of real savings is still growing, Fed policy
makers can get away with the illusion that they have saved the US and
the world economies. Once the pool of real savings starts stagnating, or
worse, declining, the illusory nature of the Fed’s policy will be
revealed — note that the economy follows the state of the pool of real
savings. Any aggressive monetary policy in this case is going to make
things much worse.
The actions of Bernanke to revive the economy run contrary to the
basic principles of running a company. For instance, in a company of 10
departments, 8 departments are making profits and the other 2 losses. A
responsible CEO will shut down or restructure the 2 departments that
make losses — failing to do so will divert funding from wealth
generators toward loss-making departments, thus weakening the foundation
of the entire company. Without the removal or restructuring of the
loss-making departments, there is the risk that the entire company could
eventually go belly up. So why then should a CEO who decides to support
nonprofitable activities be regarded as a failure when Bernanke and his
central-bank colleagues are seen as heroes who saved the economy?
Bernanke is of the view that by pumping money he has provided the
necessary liquidity to keep the financial system going. We suggest that
this is false. What permits the financial sector to push ahead is real
savings. The financial sector does not have a life of its own; its only
role is to facilitate the real wealth that was generated by the wealth
producers. Remember that banks are just intermediaries; they facilitate
real savings across the economy by means of money (the medium of
exchange).
By flooding the banking system with money, one doesn’t create more
real savings but, on the contrary, depletes the pool of real funding.
Most commentators are of the view that in some cases when there is a
threat of serious damage to the financial system the central bank should
intervene to prevent the calamity, and this is precisely what
Bernanke’s Fed did.
We suggest the severe threat here is to various bubble activities
that must be removed in order to allow wealth generators to get on with
the job of creating wealth. If a lot of bubbles must disappear, so be
it. Any policy to support bubbles, be it large banks or other
institutions, will only make things much worse. As we have seen, if the
pool of real savings is not there, a central-bank policy to prop up
bubbles will make things much worse. After all, the Fed cannot generate
real wealth.
Bernanke’s policy — which amounts to the protection of inefficiency,
i.e., bubble activities — runs the risk of generating a prolonged slump
with occasional rallies in the data. It could be something similar to
the situation in Japan (which Bernanke has in the past criticized).
Summary and Conclusion
We can conclude that, contrary to Bernanke, his loose policies didn’t
save the US economy from a depression but have instead damaged the
process of real wealth generation.
Bernanke’s loose policies have provided support to bubble activities,
thereby destabilizing the economy. So in this sense his policies have
saved the bubbles, thus undermining wealth generators.
We suggest that the more forceful the Fed’s response to various
economic indicators is, the more damage this does to the pool of real
savings. This runs the risk that at some stage the United States could
end up having a stagnating or worse, declining, pool of real savings.
If this were to occur, then we could end up of having a severe
economic slump. If anyone needs examples in this regard, have a look at
countries such as Greece, Spain, and Portugal.
Over a prolonged period of time the policies of these countries (an
ever-growing government and central-bank involvement in the economy)
have severely damaged the heart of economic growth — the pool of real
savings.
Again, if the pool of real savings is to become stagnant, or worse,
starts declining, any attempt by the Fed to make things better is going
to make things actually much worse by depleting the pool of real savings
or funding further. If the pool of real funding is stagnating, then no
matter how much pumping the Fed does, banks will not be able to lift
lending. Remember: without expanding real funding any expansion in
credit could lead to financial disaster.
Is There No Escape from the Euro?
As I
discussed recently, the costs and risks of maintaining the
eurozone system
are already immense and rising. So is an exit possible? Intuitively,
the exit from the euro should be as easy as the entrance. Joining and
leaving the club should be equally simple. Leaving is just undoing what
was done before. Indeed, many popular articles discuss the prospects of
an exit of countries such as Greece or Germany.
[1]
However, other voices have rightly argued that there are important exit
problems. Some authors even argue that these problems would make an
exit from the euro virtually impossible. Thus, Eichengreen (2010)
states, “The decision to join the euro area is effectively
irreversible.” Similarly, Porter (2010) argues that the large costs of
an exit would make it highly unlikely. In the following we address the
alleged exit problems.
Legal Problems
The
Maastricht Treaty does not provide for a mechanism to exit the European Monetary Union (
EMU).
Thus, several authors maintain that an exit from the euro would
constitute a breach of the treaties (Cotterill 2011, Procter and
Thieffry 1998, Thieffry 2011, Anthanassiou 2009).
[2] In an
ECB working paper from 2009 Anthanassiou claims that a country that exits the EMU would have to leave the
EU as well. As the
Lisbon Treaty allows for secession from the EU, withdrawal from the EU would be the only way to get rid of the euro.
The solution to this legal problem could be an exit from both the EMU
and EU with an immediate reentering of the EU. This procedure could be
negotiated beforehand. In the case of a net contributor to the EU budget
such as Germany, the country would probably not face any problem
getting immediately readmitted to the EU.
In any case, the referral to the Maastricht Treaty when discussing
the legal possibility of exit is intriguing, because the Maastricht
Treaty, especially the “no-bailout clause,” has been violated through
the bailouts of Greece, Ireland, and Portugal. The
European Financial Stability Facility effectively serves to guarantee debts of other nations, not to mention the plans to introduce eurobonds.
In addition, the European Central Bank has violated the spirit of the
Maastricht Treaty by purchasing debt of troubled nations. It seems to
be a justification, if not an obligation, to leave the euro after the
conditions for its existence have been violated.
[3]
Indeed, the German Constitutional Court ruled in 1993 that Germany
could leave the euro if the goals of monetary stability were not
attained (Scott 1998, p. 215). After the last couple of years, it is
clear that the eurozone and the euro are far from stable. Apart from
these considerations it should be noted that a sovereign state can
repudiate the treaty (Deo, Donovan, and Hatheway 2011).
Another legal problem results from the possible redenomination of
contracts in the wake of an exit from the euro. A government may
redenominate euro contracts into the new currency (applying
lex monetae
— the state determines its own currency). It may do so without problems
if the contracts were contracted in its territory or under its law. But
what about private and public bonds issued in foreign countries? How
would foreign courts rule (Scott 1998, p. 224)?
Imagine a German company that sold a bond in Paris. Will the bond be
paid back in euros or in the new currency if Germany leaves the euro?
The French court would probably decide that it can or must be paid back
in euros.
[4]
Possibly also the European Court of Justice would rule on such issues.
Thus, in the case of an exit, there would be some uncertainty caused by
court settlements. There may be one-time losses or profits for the
involved parties. However, it is hard to see why these court rulings
would constitute important disturbances or insurmountable obstacles for a
euro exit.
[5]
Introduction Costs
An exit from the euro may imply the issuing of a new national
currency. This involves the costs of printing new notes, melting new
coins, exchanging vendor machines, etc. There are also logistic costs
exchanging the new currency against the old one. These costs are not
higher than the costs of introducing the euro. The costs for introducing
the euro in Austria have been estimated at €1.45 billion euros or
around 0.5 percent of GDP.
[6]
Wage Inflation and Higher Interest Rates
Sometimes it is argued that peripheral countries with uncompetitive
wages could just exit the euro and magically solve all their problems.
Greece, for instance, suffers from too-high wages mainly because there
is no free labor market. Labor unions have caused wages to be too high.
The resulting unemployment had been attenuated by government deficit
spending and debt accumulation made possible by the
Eurosystem. The Greek government employed people at high wages, paid unemployment benefits and retired people early with high pensions.
As strong labor unions prevent wages from falling to recuperate
competitiveness, some people recommend that Greece exit the euro,
depreciate the currency, and thereby increase competitiveness. This
argument contains a problem. If labor unions remain strong, they may
simply demand wage increases to compensate for higher import prices
(Eichengreen 2010, p. 8). Such a compensatory increase in wages would
eliminate all advantages from depreciation.
[7]
The exit would have to be accompanied by a reform of the labor market
in order to improve competitiveness. In any case, after an exit from the
EMU, the Greek government could no longer use EMU monetary
redistribution and deficit spending to push up wages artificially.
Similarly, an exit without further reforms could lead to a
repudiation of government debt. This would imply higher interest rates
for the government in the future (Eichengreen 2008, p. 10). An
accompanying reform of fiscal institutions such a constitutional limits
for budget deficits could alleviate this problem.
The End of Monetary Redistribution between Countries
Some countries benefit from the monetary setup of the EMU. They pay
lower interest rates on their debts than they otherwise would. If a
country like Greece exits the euro and repays its debts with a devalued
new currency, it will have to pay higher interest rates for its debts.
In addition, countries such as Greece could no longer benefit from
the monetary redistribution. The Greek government, and indirectly part
of the Greek population, benefits from the high Greek deficits and the
flow of new money into the country. This process allowed Greece to
finance an import surplus and standard of living it would not have
achieved otherwise. At least in the short term, an exit from the euro
would, ceteris paribus, mean a deterioration of artificially high living
standards. In other words, after an exit from the EMU, the size of its
public sector and standard of living would likely fall as the EMU
subsidies end. These redistribution costs only apply to countries that
have been on the receiving end of the redistribution. For fiscally
sounder countries, the opposite reasoning applies.
Trade Losses
Some authors argue that European trade would collapse in the wake of a
euro exit. Trade barriers would be re-erected. In any case there could
be an appreciation of the new currency like a new deutschemark (DM). In a
UBS research paper, Flury and Wacker (2010, p. 3) estimate that the new DM would appreciate about 25 percent.
In contrast to another UBS research paper (Deo, Donovan and Hatheway 2011) that comes up with horrific costs of a euro break up,
[8]
we do not regard such trade barriers as very likely for several
reasons. First, such barriers would be an economic disaster for all
involved parties and would lead to a severe and long depression and a
reduction of living standards. Second, net contributors to the EU, such
as Germany, could still use their contributions to the EU budget as a
negotiating card to prevent such barriers. Third, trade barriers are a
blatant violation of EU treaties. Fourth, tariffs could provoke severe
tensions between nations, possibly leading to war.
Political Costs
Sometimes it is maintained that an exit implies high political costs.
Most importantly, an exit could trigger the dissolution of the euro.
[9]
The disintegration of the EMU could endanger the development of a
federal European state. At least, it would mean an important blow to the
“European project.” It could mean the end of the EU as we know today.
The EU could “degenerate” into a free-trade zone.
Politicians of the exiting country would lose influence on the
policies of other EMU countries. The politicians of the exiting country
would also lose appreciation of other EMU politicians and in the
mainstream media that has supported the euro staunchly. However, for
supporters of a free-trade zone in Europe, these political costs imply
immense benefits. The danger of a federal European state would disappear
for now.
Procedural Costs and Capital Flows
An exiting nation has to print new notes, mint new coins, reprogram
automatic teller machines, and rewrite computer code (Eichengreen 2008,
p. 17).
[10]
This takes time. The case of machines may not be tragic, because,
during the transition period, old machines may be in use without chaos. A
public parking place using euro coins will not bring the economy down.
The notes-and-coins problem has a fast solution, because on both the
country’s origin is visible. Coins have a country-specific image and
notes bear a country-specific letter. In a German exit from the euro,
all German coins and notes would be redenominated into the new currency
and later gradually exchanged into the new notes and coins.
[11]
Of course, the transition period would involve some checking costs as
people have to look at the symbols when transacting in cash.
The most severe problem of a euro exit — one that according to
Eichengreen (2010) would pose “insurmountable” barriers — is capital
flows when the option of exiting is discussed.
[12] Such a discussion takes time in democracies. During this time there may be important capital inflows and outflows.
[13]
Let us first discuss the problem of capital outflow such as in the
case of an exit of Greece with no accompanying reforms. If Greek senior
politicians seriously discuss an exit from the euro, Greek citizens will
expect a depreciation of the new currency, a new drachma. Greek
citizens will transfer their euros held at Greek banks to accounts in
other EMU countries. They will probably not turn in their euro notes to
be exchanged for the new drachmas voluntarily.
Greek citizens may also acquire other currencies such as Swiss
francs, US dollars, or gold to protect themselves from depreciation. In
this way Greece could practically be immunized against the new drachma
even before its introduction. As a consequence, the Greek banking system
may get into liquidity and solvency problems. Meanwhile, Greek citizens
would continue to transact in euros held outside Greek jurisdiction.
This is the so-called “problem” of capital outflows. Yet these
outflows are not a problem for ordinary Greek citizens. For them these
outflows are a solution to the problem of an inflationary national
currency. Moreover, capital outflows are already occurring. The
discussion in parliament of a Greek exit would only speed up what is
happening already.
The opposite reasoning applies when a more solvent country like
Germany discusses an exit from the eurozone. If people expect an
appreciation of a newly introduced currency, there would be capital
inflows into Germany. The money supply of euros within Germany, which
would later be converted into a new currency, would increase. Prices of
German assets (e.g., housing and stocks) would increase in advance of
the actual German exit, benefitting the current owners of such assets.
A Systemic Banking Crisis
Finally, there may be negative feedback for the banking system as
there will most likely be losses for banks both domestic and foreign.
[14],
[15]
Eichengreen (2010) fears the “mother of all financial crises.” Due to
connectivity, it does not matter if Germany or Greece leaves the euro.
If Greece leaves the euro and pays back its government bonds in a
depreciated new currency or defaults outright, there will be losses for
European banks that could get into solvency problems. Similarly, if
Germany leaves the euro, the implicit guarantee and support to the
Eurosystem will disappear. The result may be a banking crisis in Greece
and other countries. The banking crisis might negatively affect German
banks.
[16]
The banking crisis would also negatively affect sovereigns, due to
possible bank recapitalizations. Other countries may be regarded as
possible defaulters or exit candidates leading to higher interest rates
on public debts. A systemic financial crisis infecting weak governments
would be likely (Boone and Johnson 2011).
Recently, the
IMF suggested that European banks face €300 billion in potential losses and urged the banks to raise capital.
[17]
We should emphasize that the problem of bank undercapitalization and
bad assets (most importantly, peripheral government bonds) does already
exist in the EMU and will deteriorate without an exit.
It is almost impossible to leave the euro without already-unstable
structures collapsing. Yet this collapse would have the beneficial
effect of quickly purging unsustainable structures. Even if there are no
exits from the euro, the banking problem exists and will have to be
solved sooner or later. Potential bank insolvency should therefore be no
argument against an exit.
[18]
In the EMU taxpayers (mostly German) and inflationary measures by the
ECB are momentarily containing the situation. An exit would speed up a
restructuring of the European banking system.
At this point I would like to give the following recommendation for a
solution of the banking crisis. There are important free-market
solutions to bank-solvency problems.
[19]
- Banks with nonviable business models should be allowed to fail, liberating capital and resources for other business projects.
- A debt-to-equity conversion may put many banks on a healthy basis.[20]
- Banks may collect private capital by issuing equity, as they are already doing.
A free-market reform has important advantages:
- Taxpayers are not hurt.
- Unsustainable banking projects are resolved. As the banking sector
is oversized, it would shrink to a more healthy and sustainable level.
- No inflationary policies are used to sustain the banking system.
- Moral hazard is avoided. Banks will not be bailed out.
The Problem of Disentangling the European Central Bank
The Eurosystem consists of the ECB and national central banks. The
task of disentangling is facilitated because national central banks
still possess their own reserves and have their own balance sheets.
Scott (1998) argues that this setup may have been intentional. Countries
wanted to retain the possibility of leaving the euro if necessary.
On January 1, 1999, the ECB started with capital of €5 billion. In
December 2010 the capital was increased from €5.76 billion to €10.76
billion.
[21]
Only part of all EMU reserve assets have been pooled in the ECB,
making a disentangling easier. On January 1, 1999, national central
banks provided €50 billion in reserve assets pro rata to their capital
contribution (Procter and Thieffrey 1998, p. 6). National central banks
retained the “ownership” of these foreign reserve assets and transferred
the management of the reserves to the ECB. (Scott 1998, p. 217). In the
case of an exit, both the return of the contribution to the ECB’s
capital and the foreign assets transferred to the Eurosystem had to be
negotiated (Anthanassiou 2009).
Similarly, there is the problem of TARGET2 claims and liabilities. If
Germany had left the EMU in March 2012, the Bundesbank would have found
TARGET2 claims denominated in euros of more than €616 billion on its
balance sheet. If the euro depreciated against the new DM, important
losses for the Bundesbank would result.
[22]
As a consequence, the German government may have to recapitalize the
Bundesbank. Take into account, however, that these losses would only
acknowledge the risk and losses that the Bundesbank and the German
treasury are facing within the EMU. This risk is rising every day the
Bundesbank stays within the EMU.
If, in contrast, Greece leaves the EMU, it would be less problematic
for the departing country. Greece would simply pay its credits to the
ECB with the new drachmas, involving losses for the ECB. Depositors
would move their accounts from Greek banks to German banks leading to
TARGET2 claims for the Bundesbank. As the credit risk of the Bundesbank
would keep increasing due to TARGET2 surpluses, the Bundesbank might
well want to pull the plug on the euro itself (Brookes 1998).
[23]
Intellectual honesty requires us to admit that there are important
costs to exiting the euro, such as legal problems or the disentangling
of the ECB. However, these costs can be mitigated by reforms or clever
handling. Some of the alleged costs are actually benefits from the point
of liberty, such as political costs or liberating capital flows.
Indeed, other costs may be seen as an opportunity, such as a banking
crisis that is used to reform the financial system and finally put it on
a sound basis. In any case, these costs have to be compared with the
enormous benefits of exiting the system, consisting in the possible
implosion of the Eurosystem. Exiting the euro implies ending being part
of an inflationary, self-destructing monetary system with growing
welfare states, falling competitiveness, bailouts, subsidies, transfers,
moral hazard, conflicts between nations, centralization, and in general
a loss of liberty.
Britain’s Future Lies With America, Not Europe
Welcoming Britain back into the North Atlantic economic community would be a win-win for all involved.
In 1952, then-U.S. Secretary of State Dean Acheson said that “Britain
has lost an empire but has failed to find a role.” Sadly for Britain,
it decided to renounce its longstanding global cultural, legal and
philosophical links to North America and instead looked for that role in
Europe. Despite its geographic proximity to Britain, the Continent is
nevertheless home to a host of cultures, legal systems and governing
philosophies very different from those of traditionally liberal Britain.
The consequences from that bad choice have bedeviled Britain for
decades.
Now, as a result of Prime Minister David Cameron’s stance at the
recent EU summit, Britain and Europe are at a crossroads. America could
help Britain make the right choice, to both countries’ mutual benefit.
French President Nicolas Sarkozy helpfully summed up the results of
this month’s summit. He told Le Monde that there are now two Europes,
one that “wants more solidarity between its members and regulation, the
other attached solely to the logic of the single market.” The Europe of
regulation wants to press forward with deeper integration, stringent
budget rules and a transition away from nation-state democracy.
The problem is that no one asked the peoples of Europe whether they
wanted this. Nationalism is on the rise. Budget rules have been
flagrantly ignored in the past, and the Franco-German plan does nothing
to deal with the euro’s structural problems, which make southern
European countries grossly uncompetitive.
It is obvious to most outsiders that the euro zone’s problems remain.
The rating agencies have been unimpressed, and downgrades of most
euro-zone members and their banks are now more likely than ever. This
meant that Mr. Cameron was left with two choices: strike out for the
shore or drown with the rest.
Perhaps the most interesting thing about Mr. Cameron’s decision is
the way he made it. It is now clear that he made an attempt—as he had
promised British voters—to repatriate powers away from Brussels. This
attempt was rebuffed with some prejudice. Given the outright hostility
to Britain now evident in the European Union establishment, any further
attempt at repatriation will be a non-starter. The implications are
considerable.
Enlarge Image
alt=murray apple-width=yes apple-height=yes v:shapes=”_x0037_2dd4643-5e7d-4450-9255-0a85a25311a7″>
alt=murray apple-width=yes apple-height=yes v:shapes=”acce4f7a-2d1a-439f-803f-252ae65a8118″>
Bloomberg
British Prime Minister David Cameron, left, with U.S. President Barack Obama.
The European Economic Community (EEC) for which the British signed up
in a 1975 referendum—a community of free trade and cooperation, not
supranational bureaucracy—is long gone. Worse, even today’s
less-palatable EU will soon no longer be on offer. Sometime in the next
few years at most, Britain will likely face the choice between immersion
in a powerful centralized European mega-state and full exit.
Most probably, the choice will be made in an atmosphere of crisis,
with dramatic media coverage proclaiming impending doom for Europe.
Britain today needs to think seriously about a Plan B, so that it does
not have to take an option it will regret for lack of coherent
alternatives.
Britain does have other choices. To find the country’s new role, British leaders should look to North America.
Alone among EEC members, Britain narrowed some of its major trade
networks when it joined. It also traded ordinary Britons’ right to
virtually bureaucracy-free movement, temporary or permanent, between the
U.K. and British Commonwealth nations. This meant losing easy access to
prosperous places like Canada, Australia and New Zealand, which enjoy
plentiful jobs and high standards of living, for the largely theoretical
right to take a job in Düsseldorf or Lille. While much trust was lost
between Britain and the rest of the Commonwealth because of this move,
strong personal, cultural and economic ties remain and could be revived.
Ask the average Briton where he’d feel more at home, Paris or Toronto.
Canada and Australia have well-managed, vibrant economies. Both
countries sit on huge deposits of natural resources of ever-increasing
value. Britain’s top-tier financial sector and still-excellent technical
capabilities already play a role in Canada’s economy. These ties could
be much strengthened.
Britons also feel at home south of the Canadian border. Contrary to
an oft-repeated myth, links between Britain and the United States are
not reducible to the personal relationships between presidents and prime
ministers. The U.S. and the U.K. have always been each other’s primary
financial partners. A few simple measures could substantially deepen
this relationship, especially once Britain no longer needs to adhere to
EU rules.
Foremost among these would be to admit a post-EU Britain to the North
American Free Trade Agreement. Nafta is not a perfect vehicle, but it
has the enormous advantage of already existing, with a nearly 20-year
track record behind it. And unlike the EU, Nafta would not seek to
impose a single social vision on its members. For example, Nafta has had
no effect on Canadian social policy, which is very similar to
Britain’s—except for Canada having more revenue to pay for it all.
The ongoing euro crisis will not be resolved any time soon, and
America will continue to be impacted by bank write-downs and declines in
U.S.-European trade. Increasing U.S.-U.K. trade would be one relatively
quick and effective way of taking up some of the slack.
Up to now, however, the U.S. has pursued a policy of propping up the
euro while discouraging British independence from Brussels. This is
incredibly short-sighted. Using the vehicles of the Federal Reserve and
the International Monetary Fund to try to fill the gaping hole in
Europe’s finances will get everybody nowhere. Instead, British, American
and Canadian policy makers (along with their Nafta partners in Mexico)
should be taking the long view and preparing for a future in which the
unsustainable euro zone inevitably collapses. Welcoming Britain back
into the North Atlantic economic community would be a win-win for all
involved.
—Mr. Murray is a vice president at the Competitive Enterprise
Institute in Washington. Mr. Bennett is author of “The Anglosphere
Challenge: Why the English-Speaking Nations Will Lead the Way in the
Twenty-First Century” (Rowman & Littlefield, 2004).
A few months ago my friend Pablo Kleinman, invited me to do a radio
interview at Univision in Los Angeles. Pablo is someone who was educated
in Europe and the USA so, I immediately accepted knowing that the event
would be a real interesting experience.
The goal of the interview was to explore the reasons why the
southwest states of the USA, which use to be part of Mexico, are so rich
and Mexico so poor and underdeveloped. It was a real tough job to find
answers to an unquestionable reality: the states of California, Arizona,
Colorado, Nevada, New Mexico, Texas etc report a GNP close to 4
trillion dollars while my country of Mexico can only show less than a
trillion.
I received another invitation from Pablo for a new interview. It took
me some time to decide whether to participate because of the complexity
of the subject now suggested by Pablo: the new immigration law approved
by Arizona.
This law is controversial for many reasons. Perhaps the most
important one can be found in the appearance of the attorney general
before congress to explain why he was about to file a suit against
Arizona to block this new law. When one of the senators asked him if he
had already read the text of the law, in an unbelievable and shameful
way he answered that he had not.
In other words, the attorney general of the USA was about to file a law suit against a law in which he did not know its content.
Well, I have read the law so I know what is in it, but besides that, I
want to share other credentials I have which I feel give me the right
to express a responsible opinion about it. I was born and grew up in
Sonora—the Mexican state border with Arizona—I have been legally
residing in Arizona for years and I have always interacted between
Sonora and Arizona. For five years I attended college at Tec of
Monterrey in a city 100 miles south of Laredo Texas. During college
vacations we use to drive Monterrey, Laredo, Del Rio, Eagle Pass, El
Paso, Las Cruces, Nogales and then to my home town of Hermosillo. So, I
know the border.
I married an Arizonan and I have 3 daughters who were born in
Arizona. They married kids from Arizona and it is where they now live.
For five generations my family has been a cattle exporter and we have
crossed our cattle through all the Arizona—Sonora ports of entrance for
more than 100 years. In a partnership with my friend from Sinaloa,
Adolfo Clouthier, I participated in a company marketing Mexican produce
all over the USA headquartered it in Nogales, Arizona. I was governor
Bours’ representative in the US residing in Phoenix with big
responsibilities about all kind of relations between Sonora and Arizona.
I am not a lawyer but, in my intellectual formation I had a big
influence from a couple of real bright jurists. My father who had a
degree of international law from the University of Brussels and my uncle
Gilberto Valenzuela, who was jurist of the Mexican Supreme Court and
also a jurist of the International Court at Holland. Someone whose life
is described in a book title: “Gilberto Valenzuela, a life devoted to
the principle of legality.” So, I strongly believe that countries with
no rule of law are condemned to failure.
As a free market economist I believe that supply and demand will
always meet, legally or illegally. And the most dramatic example of it,
is the insane war that my country is fighting against an enemy which
they will never subdue; the war against drugs. However, I also think,
like my good friend Alberto Mansueti say in his book; ‘The Bad Laws’;
some countries have only real bad laws. But my purpose is not to analyze
the legal aspect of the problem; we have another one much more grave
and important.
A few weeks ago the Mexican Secretary of State made a real
irresponsible affirmation. “The only root of this problem is the refusal
of the USA to approve a new immigration reform.” Oh, that sounds very
simple. What about the one implemented in 1986? Through that process the
USA legalized more than 10 million people and was the problem solved,
no? Twenty years later the USA has another 20 million undocumented
people who, running away from their countries, entered the US illegally
and some experts say, in the background are another few million waiting,
making this situation a very profitably business for international
mafias
The real problem is not to come up with a new immigration reform to
document those millions of people. We can find the real problem just
asking a question. Why in the last 30 years 40 million people left their
countries to, illegally, enter the USA?
A few years ago Tony Blair said something really wise. You can
measure the greatness of countries by keeping track of the people
leaving them, or people arriving in them. If that is the case, we can
affirm that we come from midget countries. We come from countries where
they don’t want to build the conditions to make their economies grow,
the conditions to create jobs because, when people don’t find them, they
are pushed to go to the USA. We are manufacturers of poverty and
misery.
But we have political leaders showing up in Washington scolding
congress, because they are not opening the doors for the people we are
expelling from our countries because of our corruption, ineptitude and
insecurity.
Blind with fear and irresponsibility we charge against bad gringos,
racists, bullies, unjust. But we don’t see that we are the ones
providing those miserable human beings as the raw material to build this
tragedy. I can’t understand those masses of people, from all over Latin
America, wearing the war paint to, without respecting the rule of law,
demand some imaginary rights when in their countries never had the
freedom to do the same thing against the tyrants who expelled them. I
can’t understand why the whole Latin America’s GNP is less than 20% of
the USA, and the only solution we have is to demand aggressively that
the gringos take the many poor people we manufacture and expel.
We Mexicans will never get it. The new Arizona law doesn’t penalize
immigration. The law only authorizes and gives the tools to the police
force to secure the rule of law. If people enter the USA without the
kind of requirements the law demands, they became outlaws and should be
prosecuted.
The only thing that Arizona has done, is to approved the laws they
consider necessary to promote a civilize way of living for their
societies. The only difference with Mexico is that they do enforce the
rule of law and we don’t know the meaning of those words.
The political correct people in Mexico City went so far, in the
middle of their ignorance, to glorify delinquents who penetrate the USA
breaking the law, they are just that, criminals.
Why don’t we abandon that role of beggars armed with big sticks? Why
don’t we take down that flag of imaginary racism and stop barking to the
moon on the water? If we want to find the causes and solutions to this
sad and painful problem, we just have to take a look of our faces in the
mirror, then make an act of contrition and stop manufacturing poor
people and a lot of migrants invading the USA out of desperation.
No comments:
Post a Comment