In America’s Economy, What Is Growing Fastest? Income Inequality

Paul Krugman has the story.

UPDATE: in other news, Reuters reports Jobless Claims Fall to Lowest in 4 Years. Some say it won’t last, but I think one is still permitted to hope… do I have to get a permit for that, too?

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  • L'Enfant de la Haute Mer  On Thursday January 19, 2012 at 12:34 pm

    Steve, get a permit to hope, you never know!
    🙂

    Over here now:
    No money for retirement – but for tanks!
    Athens depends on funds from EU and IMF, has to cut pensions and fired tens of thousands of state employees. Nevertheless, the government increased defense spending and wants to take over 400 U.S. tanks. For nothing, but not free. M1A1 Abrams tanks were deployed in Iraq and arouse the desire of Greek military.
    The objects of desire are in the U.S. state of Nevada, Las Vegas near the players paradise: over a thousand worn-out M1A1 Abrams tanks of the type the U.S. Army has parked here. Most were scrapped after the first Gulf War in 1991. The dry desert air protects the mothballed war machines against corrosion. But soon could rev up the engines again and rattle the tank tracks. For there is a buyer for the Abrams tanks. Of all the highly indebted Greece, which is on the brink of bankruptcy, wants to take around 400 tanks of the U.S. armed forces and put into service.
    The Athens government had to cut the pensions and dismissed tens of thousands of state employees, the Greek finance minister stands at construction companies and suppliers with 6.6 billion € in debt, schools lack textbooks, state hospitals, lack sometimes even bandages, and the armed forces owe it to the refiner Hellenic Petroleum double-digit million amount for delivered fuel.
    http://www.handelsblatt.com/politik/international/kein-geld-fuer-pensionen-aber-fuer-panzer/6077224.html?p6077224=all

    and:
    Unassailable prosperity
    That Greece with empty coffers and unpaid invoices. will now raise hundreds of tanks seems absurd.
    The then government spokesman denied more vigorously: “There is not even a thought of such a business, which would further strain the state budget.”
    But the spokesman said apparently not the truth. Since the beginning of December 2011 an Expert Committee of the Greek General Staff came to Nevada to inspect the tanks. They should select from the more than 1000 vehicles, the 400 best-preserved for the Greek armed forces. The General Staff had already made contact with Greek shipowners to solicit proposals for ship transporting the tanks from the USA over to Greece. Defense Minister remained silent when he faced an interview from Reuters Online.

    Greek politicians live out their weapons illusion
    The U.S. was planning to give the tanks give for free. Nevertheless, the acquisition could be costly for the Greeks. Only the transport to Greece should cost between five and eight million €. A two-digit million amount, could make the mothballed tanks to be used again. Also the gas turbine, which drives the M1A1 Abrams consumes a third more fuel than the comparable diesel tanks. The Abrams tanks are to be stationed in northern Greece, near the border with Turkey – to be able to fend off a feared invasion of NATO’s Partners.
    Even if one accepts this threat scenario, it is questionable whether Greece requires 400 U.S. tanks at all. Finally, it has already more than 1600 tanks in its arsenal – the equivalent to the population more than any other NATO country in Europe. Only three years ago, the Greek army got 170 Leopard tanks from the German manufacturer Krauss-Maffei Wegmann (KMW). Cost: € 1.72 billion.
    Thus Greece has a total of around 350 Leopard. However, they are largely worthless. Because due to the financial straits the Defense Department has not been able to procure ammunition for the tanks.
    While the taxpayers of the eurozone countries assist Greece with billions of loans, Greek politicians live in their illusion of military weapons. Reason: the alleged threat from neighboring Turkey. According to calculations by the OECD, the Greek military expenditure in 2010 reached 4.3% of gross domestic product. The OECD average is 1.7 percent.
    In the past decade, Greece increased its military budget from 4.5 to 7.6 billion €. The ruinous arms race with the Turks is one of the causes of the debt disaster. Although the government stopped short in the wake of the 2011 crisis, the budget for arms dropped from the planned 1.5 billion to 600 million €. This year, however, it rose again to a billion €.
    Greece is traditionally the best customer of the German weapons. Orders from Athens made in the years from 2005 to 2010 at least 15% of their total sales. Also, the German shipyard HDW in Kiel was able to appreciate Greek submarine contracts worth almost three billion €.

    Defense contracts in exchange for aid loans?
    Chancellor Angela Merkel urged during a summer 2007 visit to Athens the then Prime Minister Kostas Karamanlis, to finally sign the order discussed since 1996, over 60 EuroFighter-bombers. Karamanlis promised a decision in 2009. But because he was no longer prime minister, in early February 2010, when the Greek financial problems began to emerge already in all its drama, Foreign Minister Guido Westerwelle made Athens to order new aircrafts,
    Tenacious rumors persist in Athens, that Chancellor Merkel and French President Nicolas Sarkozy, even in early November 2011 at a crisis meeting in Cannes, urged the Greek Prime Minister George Papandreou to have, in return for more aid credits, new defense contracts with both countries .
    A Greek-French arms deal was at the time, however, already threaded: Greece wants to order from the French shipyard DCNS parastatal up to four new FREMM frigates. Because the country cannot not currently afford the purchase price of approximately € 300 million per ship, France wants the Greek navy frigates for five years free of charge. Then the Greeks can either pay for the ships, where they will receive a discount of € 100 million, or return them to France. German competitors, who had also hoped to sell frigates protested: they see in the business a violation of the subsidy and the EU procurement rules.

    http://www.wiwo.de/politik/ausland/griechenland-kein-geld-fuer-pensionen-aber-fuer-panzer/6077354.html
    (grosso-modo translated from german via Google translate and reviwed)

    I am sorry for the ‘queen size’ sheet.

    • Steve  On Thursday January 19, 2012 at 4:09 pm

      Enfant, pardon me if you quoted this and I missed it, but I know you will be interested in what the hedge funds are trying to do:

      Hedge Funds Putting Together “Chutzpah Lawsuit” to Sue Greece for Debt in Human Rights Court

      Human rights court? There is no shame left in the world, or perhaps I should say there is no shame left unexploited.

      • L'Enfant de la Haute Mer  On Thursday January 19, 2012 at 4:33 pm

        I know, I know…

      • L'Enfant de la Haute Mer  On Friday January 20, 2012 at 2:50 am

        Steve,
        the above comment was about the defense contracts between the USA (and the EU) and Greece; thought you might be interested in this aspect of the issue!

        • Steve  On Friday January 20, 2012 at 9:34 am

          Enfant, I did read your entire comment. The performance of the M1A1 Abrams tank was a public issue here when it was new; I’m not surprised the U.S. government would try to pawn off the ones worn out in the deserts of Iraq onto someone else. But it sounds as if Greece has leaders as paranoid as America’s, and pressure from other powerful nations.

          George W. Bush found that America’s being at war, continuously, relentlessly, while he was president, gave him opportunities he would not have had if he were not a “wartime president,” so he and his minions (his keepers?) arranged for us to be always at war. In the long run, it destroys a nation… mine or yours… but some leaders find it politically irresistible. I am sorry you are having to suffer such leadership.

  • L'Enfant de la Haute Mer  On Friday January 20, 2012 at 2:42 am

    Taxes at the Top (and Mitt Romney doing the Dance of the Seven Veils):
    http://www.nytimes.com/2012/01/20/opinion/krugman-taxes-at-the-top.html?_r=1&ref=paulkrugman

    • Steve  On Friday January 20, 2012 at 9:42 am

      Thanks, Enfant. Every time I see a reference to the “Dance of the Seven Veils,” I think of the rendition in Tom Robbins’s 1990 novel Skinny Legs and All.

      I know it is a cliche to say this, but if Romney had nothing to hide, he would not make such an issue of releasing his tax records. It is, as Krugman noted, utterly standard in America for people seeking high office to release their tax records. No law requires it, but if you don’t do it, people assume you’re some sort of crook. And indeed that’s what I think about Romney.

      If he loses South Carolina to Gingrich (Gingrich, for goodness’ sake!), perhaps we will be done with him. But I anticipate that the outcome of all remaining Republican primaries is irrelevant, and that the powers-that-be will see to it that Romney is nominated.

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