Most of our readers are familiar with this famous quote of Frederic Bastiat, excerpted from his Essay on Government:
“Government is the great fiction through which everybody endeavors to live at the expense of everybody else.”
Bastiat was charitable in his definition – but even this statement from the mid-1800’s recognizes the basic parasitic nature of government. Amended and amplified for our world in complex modern times, Bastiat’s definition becomes:
“Government is the great pain that man chooses to inflict upon himself, the agony of which he seeks to relieve by incurring even more pain.”
When I saw what was happening in Cyprus as a result of the Eurozone “rescue”, I thought of the old story of the Byzantine Emperor Alexius III who would gain temporary relief from gout by applying a red-hot poker his feet – because the pain of the searing skin was less than the pain from the gout:
European finance ministers have agreed an £8.7bn bailout for Cyprus which includes all Cypriot bank customers handing over up to 10% of their savings.
Cyprus becomes the fifth country after Greece, Ireland, Portugal and Spain to turn to the Eurozone for financial help amid the region’s debt crisis, but also faces a possible run on its banks as depositors try to avoid losing up to 10% of their savings.
The savers, half of whom are thought to be Russian, will raise almost €6bn. It is the first time a bailout has included such a measure.
“I wish I was not the minister to do this,” the Cypriot finance minister, Michael Sarris, said after 10 hours of late-night talks in which Eurozone finance ministers agreed the package. “Much more money could have been lost in a bankruptcy of the banking system or indeed of the country.”
So what Sarris is saying is that they better steal the money now before they can’t and the hot-poker is going to hurt less than the gout – which none of this will cure because apparently only the Second Coming can save the EU.
Without a rescue, Cyprus would default and threaten to unravel investor confidence in the Eurozone, a renewed confidence fostered by the European Central Bank’s promise last year to do whatever it takes to support the euro.
However, on Cyprus, initial incredulity at the decision gave way to anger. Co-op credit societies, normally open on Saturdays, were shut for business in the coastal city of Larnaca as depositors started queuing early in the morning to withdraw their cash.
“I’m extremely angry. I worked years and years to get it together and now I am losing it on the say-so of the Dutch and the Germans,” said British-Cypriot Andy Georgiou, 54, who returned to Cyprus in mid-2012 with his savings.
“They call Sicily the island of the mafia. It’s not Sicily, its Cyprus. This is theft, pure and simple,” said a pensioner.
The bailout was smaller than initially expected and is mainly needed to recapitalise Cypriot banks hit by sovereign debt restructuring in Greece.
Cypriots with savings of under €100,000 will pay a one-off levy of 6.75%, which rises to 9.9% for those with larger deposits.
The levy on bank deposits will come into force on Tuesday, after a bank holiday on Monday. Cyprus will take immediate steps to prevent electronic money transfers over the weekend.
“As it is a contribution to the financial stability of Cyprus, it seems just to ask for a contribution of all deposit holders,” the Dutch finance minister, Jeroen Dijsselbloem, who chaired the meeting in Brussels, told reporters.
This is theft, nothing but out and out theft, by the very organizations that caused the problems in the first place. People who were prudent and actually saved money are going to be punished only because they chose to save money.
Unbelievably craven, isn’t it? Unfortunately, it is par for the course with the elitist political classes on both sides of the pond. Obama’s quotes during the debates on taxes, the fiscal cliff and the sequestration battle betray this fact:
“A simple premise of my campaign for president was to change the tax code that was too skewed toward the wealthy at the expense of working middle-class Americans. Tonight, we’ve done that,” Obama said, standing beside Vice President Biden in the White House briefing room just before 11:30 p.m.
Once again, many have noted that our tax codes are the most progressive in the western world and the top 10% of taxpayers (a bracket that begins at $112,124 – hardly rich for a family of 4) paid 70.5% of all income tax. The evil 1% paid 36.7% with an average tax rate of 24.01%. This data is from 2009 IRS numbers and is posted for all to see at the Tax Foundation.
This is “too skewed toward the wealthy at the expense of working middle-class Americans”? He also forgot to mention that the 2% increase in payroll taxes hit every worker, not “the rich”, the bulk of income of which doesn’t come from hourly wages or a salary.
On the fiscal cliff:
While I will negotiate over many things, I will not have another debate with this Congress over whether or not they should pay the bills that they’ve already racked up through the laws that they passed,” he said. “Let me repeat: We can’t not pay bills that we’ve already incurred. If Congress refuses to give the United States government the ability to pay these bills on time, the consequences for the entire global economy would be catastrophic — far worse than the impact of a fiscal cliff.”
“What I’m asking them is are there ways, for example, for us to accommodate school groups … who may have traveled here with some bake sales,” Obama told ABC News’ George Stephanopoulos in an interview on “Good Morning America.” “Can we make sure that kids, potentially, can still come to tour?”
Obama’s comments suggested, contrary to previous statements by the administration, that the decision to scrap the tours fell solely to the Secret Service.
“I have to say this was not a decision that went up to the White House,” Obama said in the interview. “But what the Secret Service explained to us was that they’re going to have to furlough some folks.
“The question for them is, you know, how deeply do they have to furlough their staff and is it worth it to make sure that we’ve got White House tours that means that you got a whole bunch of families who are depending on a paycheck, who suddenly are seeing a 5 percent or 10 percent reduction in their pay,” he said.
Hypengyophobic? Perhaps – but constantly creating problems, disavowing responsibility and then punishing people who weren’t responsible in the first place is commonplace with despots, autocrats and tyrannical governments. When it is this common in a global setting, it is hard to argue that it is incompetence and not intentional. Call it Cloward-Piven, call it socialism, call it what you will – but in each case, albeit to different degrees, it indicates a worldwide effort for elites in governments to subjugate people to their rule. People have lost faith in themselves and have ceded control for “the mundane things” to a political elite that is as dumb as a box of hammers and as clueless as a deer in the headlights.
The people created government, government did not create the people – the people can change it. The answer isn’t more government, it is less. Governments are made of men, men are corruptible – ergo government is corruptible.
Bad men need nothing more to compass their ends, than that good men should look on and do nothing.
– Edmund Burke
You don’t have to sit next to fat, naked men. If the people of Europe don’t stand up and be counted – if we don’t – Marx’s vision of a worldwide communist state is just over the horizon. A corrupt individual is an isolation of corruption; a corrupt government is the institutionalization of it.
Government is the great pain that man chooses to inflict upon himself, the agony of which he seeks to relieve by incurring even more pain.
We have to end the pain.