Eurozone bailout of Cyprus includes seizing portion of individual savings accounts

How well is socialism working in Cyprus? The Financial Times explains what happened. (H/T ECM)

Excerpt:

International lenders agreed to a €10bn bailout of Cyprus early on Saturday morning after 10 hours of fraught negotiations, which included convincing Nicosia to seize €5.8bn from Cypriot bank deposits to help pay for the rescue, a first for any eurozone bailout.

However an emergency parliamentary session on Sunday to discuss the levy on bank savings was postponed until Monday, according to the Cyprus News Agency. Earlier, Cyprus president Nicos Anastasiades postponed an informal meeting of lawmakers also scheduled for Sunday morning.

The cash from Cypriot account holders will come in the form of a one-time 9.9 per cent levy on all deposits over €100,000 that will be slashed from their savings before banks reopen Tuesday, a day after a Cypriot holiday. An additional 6.75 per cent levy will be imposed on deposits below that level.

Cypriot finance minister Michalis Sarris said his government had already moved to ensure deposit holders could not make large withdrawals electronically before Tuesday’s open; Jörg Asmussen, a member of the European Central Bank executive board, said a portion of deposits equivalent to the levies would likely be frozen immediately.

[...]Mr Asmussen justified the measure by saying it broadened the number of people who will shoulder the burden of the bailout. Without the measures, he said, much of it would fall on Cypriot taxpayers; by going after all large deposit holders – many of whom are Russian or British – outsiders would help fund the rescue.

[...]While Jeroen Dijsselbloem, the Dutch finance minister who chairs the group of eurozone finance ministers that hashed out the deal in all-night talks, declined to categorically rule out hitting depositors in future bank bailouts, he insisted that it was not being currently considered for any other country.

Got that? Even Russian and British depositors are having their funds confiscated, and all electronic transfers have been frozen to stop them from getting their money out. My prediction is that anyone with any money in these poor-performing socialist countries will be pulling it out in the next few days. Property rights are not respected by European socialists – that’s the clear message to people who earn and save their money.

Filed under: News, Austerity, Bailout, Bank, Bank Account, Cyprus, Debt, Deficit, Economics, Europe, European Union, Eurozone, Greece, Italy, Keynes, Keynesian Economics, Nicos Anastasiades, Paul Krugman, Seize, Socialism, Spain, World

Food stamp president: nearly 16 million more people getting food stamps since Obama’s election

From CNS News.

Excerpt:

 Since taking office in 2009, food stamp rolls under President Barack Obama have risen to more than 47 million people in America, exceeding the population of Spain.

“Now is the time to act boldly and wisely – to not only revive this economy, but to build a new foundation for lasting prosperity,” said Obama during his first joint session address to Congress on Feb. 24, 2009.

Since then, the number of participants enrolled in food stamps, known as the Supplemental Assistance Nutrition Program (SNAP), has risen substantially.

When Obama entered office in January 2009 there were 31,939,110 Americans receiving food stamps.  As of November 2012—the most recent data available—there were 47,692,896Americans enrolled, an increase of 49.3 percent.

Not only are we borrowing trillions of dollars to pay for all these handouts, but being dependent on government is not good for people.

Arthur Brooks explains in the Wall Street Journal.

Excerpt:

Earned success means defining your future as you see fit and achieving that success on the basis of merit and hard work. It allows you to measure your life’s “profit” however you want, be it in money, making beautiful music, or helping people learn English. Earned success is at the root of American exceptionalism.

The link between earned success and life satisfaction is well established by researchers. The University of Chicago’s General Social Survey, for example, reveals that people who say they feel “very successful” or “completely successful” in their work lives are twice as likely to say they are very happy than people who feel “somewhat successful.” It doesn’t matter if they earn more or less income; the differences persist.

The opposite of earned success is “learned helplessness,” a term coined by Martin Seligman, the eminent psychologist at the University of Pennsylvania. It refers to what happens if rewards and punishments are not tied to merit: People simply give up and stop trying to succeed.

During experiments, Mr. Seligman observed that when people realized they were powerless to influence their circumstances, they would become depressed and had difficulty performing even ordinary tasks. In an interview in the New York Times, Mr. Seligman said: “We found that even when good things occurred that weren’t earned, like nickels coming out of slot machines, it did not increase people’s well-being. It produced helplessness. People gave up and became passive.”

Learned helplessness was what my wife and I observed then, and still do today, in social-democratic Spain. The recession, rigid labor markets, and excessive welfare spending have pushed unemployment to 24.4%, with youth joblessness over 50%. Nearly half of adults under 35 live with their parents. Unable to earn their success, Spaniards fight to keep unearned government benefits.

Meanwhile, their collective happiness—already relatively low—has withered. According to the nonprofit World Values Survey, 20% of Spaniards said they were “very happy” about their lives in 1981. This fell to 14% by 2007, even before the economic downturn.

If we really cared about people, we would give incentives to job creators (“the rich”) to create jobs for them. Earned success makes people happy.

Filed under: News, Arthur Brooks, Bailout, Big Government, Capitalism, Debt, Deficit, Dependence, Earned Success, Economics, Employment, Enterprise, Food Stamps, Free Enterprise, Freedom, Government, Handout, Happiness, Independence, Jobs, Liberty, Morality, Personal Responsibility, Self-Sufficiency, Social Programs, Spending

How much did taxpayers lose in Obama’s GM bailout?

Investors Business Daily does the math on the GM bailout.

Excerpt:

Sale of the U.S. government’s stake in General Motors Corp. ends a sorry saga. Not only were Americans lied to about the costs, but the bailout underscores why replacing market forces with federal bailouts doesn’t work.

The Obama administration says it will unload 200 million shares — or about 40% of its holdings — back to GM right away. The rest, 300 million shares, are to be sold by March 2014.

[...]Well, GM on Wednesday said it will buy back the 200 million share government stake for $5.5 billion, or $27.50 a share.

The break-even point on the government’s total holdings was $53 a share. But now, with $20.9 billion in taxpayer funds left to pay off from 300 million shares, the break-even point has risen to $69.72 a share.

In other words, at current prices, taxpayers are sitting with a loss of 61%, or nearly $15 billion, on their investment.

So where did the money go, then?

According to a study last summer by the Heritage Foundation, the $80 billion auto bailout gave the UAW and its members nearly $27 billion due to the fact that GM couldn’t shed its outrageously expensive labor contracts, something it could have done in a normal bankruptcy.

As such, Obama didn’t bail out the auto industry; he bailed out the unions. Without the unions’ added costs, taxpayers would have owed nothing.

It’s not hard to see how this happened. The UAW and its affiliates give tens of millions of dollars each election cycle, almost entirely to Democrats.

This union influence explains why Obama’s auto czars, Steve Rattner and Ron Bloom, arranged a government bankruptcy for GM that flew in the face of hundreds of years of bankruptcy law and violated investor rights.

Bondholders took huge losses, while unions got a big chunk of ownership in GM stock that they weren’t legally entitled to.

In a shocking display of favoritism and blatant unfairness, GM’s union workers kept their pensions, while nonunion workers at GM spin-off Delphi lost theirs.

Those unions paid Obama back by working hard to get him re-elected. That’s how socialism works.

Filed under: News, Auto Unions, Bailout, Bankruptcy, Campaign Contributions, Corruption, Cronyism, Democrat, Democrat Party, General Motors, GM, Obama, Political Contributions, Spending, UAW, Union Dues, Unions, Waste

Explosion at government-run Amuay refinery, nationalized by Venezuela in 1976

Are Barack Obama and Hugo Chavez very different?

In the United States, we’ve been seeing some efforts by the Marxist Obama administration to nationalize the auto industry and health care, too. This is what communists favor as the alternative to the free-market system. It makes sense, then, to look at how well the nationalization of assets, especially those owned by foreign-owned private companies, works out in the real world.

Let’s see:

The Creole Petroleum Corporation was an American oil company, formed in 1920 to produce fields on Lake Maracaibo, Venezuela.^[1] The company was acquired by Standard Oil of New Jerseyin 1928. Until 1951 Creole Petroleum was the world’s number one oil producer.^[2]

In 1950, Creole opened its refinery at Amuay.^[3] This is now a part of the Paraguaná Refinery Complex.

The Venezuelan assets of Creole Petroleum Corporation were nationalized along with those of other foreign oil firms on January 1, 1976, becoming part of Lagoven, a Venezuelan government-owned operating company.^[4]

And here is the latest triumph of Marxist economics in Venezuela:

A huge explosion rocked Venezuela’s biggest oil refinery early Saturday, killing at least 24 people and injuring more than 80 others in the deadliest disaster in memory for the country’s key oil industry.

Balls of fire rose over the Amuay refinery, one of the largest in the world, in video posted on the Internet by people who were nearby at the time.

At least 86 people were injured, nine of them seriously, Health Minister Eugenia Sader said at a hospital where the wounded were taken. She said 77 people suffered light injuries and were released from the hospital.

Officials said those killed included a 10-year-old boy, but that most of the victims were National Guard troops stationed at the refinery.

Filthy capitalist dogs! Making money on the backs of the poor workers! Making them work in filthy, unsafe – oh, wait. When workers are left free to take their skills to a number of private employers, then those employers are pressured to provide them with better working conditions, wages and benefits. Otherwise the employees leave for better companies. The only problem is that it doesn’t work if all the industries are state-run monopolies. Then, you just get KA-BOOM!

All you have to do to understand economic systems is to compare capitalist Chile with communist Venezuela. The people are the same, and both started out poor. One embraced free trade and privatization, and now that one is rich. The other one gets Chernobyl explosions because they elected a Marxist.

Venezuela’s economic policy is the same economic policy that Barack Obama wants to force on us with his takeover of General Motors, his frequent bailouts, his give-aways to campaign fundraisers, his blocking of free trade deals, his heavy-handed anti-business regulations, and his other intrusions into the private sector. Our entire economy is going KA-BOOM right now because of Marxism.

Related posts

• Socialist Hugo Chavez begins to use his new dictatorial powers
• Obama’s buddy Chavez nationalizes an American company
• Venezuela legislature votes to nationalize 11 US-owned oil rigs
• 80,000 tons of food rotting in Venezuela government warehouse
• Hugo Chavez confiscates private property as Venezuelan economy declines
• Owner of the last anti-Chavez TV station arrested in communist Venezuela
• OAS report details violence and lost freedoms in communist Venezuela
• Photos from the revolution against communism in Venezuela
• Venezuelans riot as communist Hugo Chavez seizes control of TV channel
• Hugo Chavez says that Haiti earthquake was caused by secret US weapon
• Chavez marches Venezuela down the road to serfdom at gunpoint
• Communist Venezuela introduces energy rationing in 2010
• Hugo Chavez shuts down 34 radio and TV stations in Venezuela
• Venezuela nationalizes Spanish-owned bank
• Obama restores diplomatic ties with Venezuela and Syria

Filed under: News, Amuay Refinery, Anti-American, Bailout, Barack Obama, Communism, Creole, Crown Corporation, Efficiency, Envy, Explosion, Government, Greed, Hugo Chavez, Lagoven, Leftism, Marxism, Nationalisation, Nationalization, Nationalize, Paraguaná, Petroleos de Venezuela, Piracy, Private Sector, Privatization, Privatize, Protectionism, Public Sector, Refinery, Regulation, Socialism, South America, Spending, State, Union, Venezuela, Worker, Worker's Rights

Democrats join Republicans in demanding probe into Delphi pension scandal

From the Daily Caller.

Excerpt:

Twelve lawmakers wrote to House oversight committee Chairman Rep. Darrell Issa and Senate Homeland Security and Governmental Affairs Committee Chairman Sen. Joe Lieberman asking that they expand current probes into a Department of Treasury scandal that left 20,000 non-union Delphi retirees without their pensions after the 2009 General Motors bailout.

The members — Sens. Rob Portman of Ohio, Thad Cochran of Mississippi and Roger Wicker of Mississippi, and Reps. Pat Tiberi of Ohio, Steve Stivers of Ohio, Mike Kelly of Pennsylvania, Dan Burton of Indiana, Bill Johnson of Ohio, Paul Gosar of Arizona, Marcy Kaptur of Ohio and Gregg Harper of Mississippi — are led by Ohio Republican Rep. Mike Turner.

“We are writing to request that the committees which you chair submit additional requests for documents from the Department of the Treasury and the Pension Benefit Guaranty Corporation (PBGC) on matters pertaining to the unjust termination of Delphi salaried retiree pensions in the federal government’s bailout of General Motors,” the lawmakers wrote. “As you may know, the pensions of Delphi salaried retirees were significantly reduced in the aftermath of the bailout, while their union counterparts were made whole. These retirees, regardless of labor affiliation or not, spent their careers working alongside one another and should not be treated differently in their retirement. This decision of the Auto Task Force, Treasury, and the PBGC continues to affect roughly 20,000 current and future retirees across the nation.”

The bipartisan support for this renewed investigation call — Kaptur is a Democrat — undercuts the Obama campaign’s accusations that his GOP rival, Mitt Romney, and Turner are trying to “politicize” this scandal.

Portman, who’s widely considered to be on Romney’s short list of potential vice presidential candidates, said in a statement that he has “met with these hard-working Ohioans who lost a significant portion of their pension benefits while other retirees from the same company received far better treatment.”

“The idea that the administration played politics with their pensions is beyond disappointing, and it deserves answers,” Portman said. “The administration’s decisions have caused pain and loss to thousands of workers and their families as a result of their reduced benefits. This matter deserves continued scrutiny from Congress, and the administration must be called upon to account for its decisions.”

Remember way back in 2009 about how the auto bailouts favored the unions over the private sector creditors who would normally be paid more of whatever could be saved? This isn’t the first time that the private sector – which funds the government –  was screwed by the government. But “the private sector is fine”.

Filed under: News, Auto Bailout, Auto Unions, Bailout, Barack Obama, Corruption, Cronyism, Labor Unions, Pensions, Private Sector, Probe, Public Sector, Socialism, UAW, Unions