Democrats of Europe, wake up!

Daniel Cohn-Bendit is a notorious Franco-German leftist.

In 1968, he would be a fighter at the barricades of Paris; his nickname has been Danny the Red (Dany le Rouge) ever since. In the 1970s, he would "love" children in an "anti-authoritarian kindergarten" which is why he also fought for the sex with the children to be legalized in the 1980s. Germany's Green Party recently made a huge U-turn and it now seems to claim that it was "unacceptable" to demand the legalization of peadophilia.

In a normal society, such a man would probably oscillate in between a mental asylum and a prison but we live in countries that have incorporated themselves into the European Union so this chap is much more than a rank-and-file member of the European Parliament. He co-leads the Greens-Marxists in the EU legislative body and is just planning to create a new, modern incarnation of the Communist International that should overtake Europe.




That's the main "planned action" according to his and Felix Marquard's 5-days-old article (also published by The New York Times),

The Fix For Europe: People Power,

where they plan to screw Europe and take the power from the people and democrats on the continent. Marquard is a dropout who did fine thanks to his rich parents and runs a P.R. agency – a spoiled brat Engels for the Marx-Bendit, I would say. In Poland, the article was reprinted under the headline Get rid of the nation state. Wow.

Normally, I would consider Danny the Red to be a marginal figure who is not worth an answer from many of us. His job in the EU Parliament is good for him (he announced that he won't run again in May 2014 elections) but I would doubt that his power goes beyond his preposterous individual existence. That doesn't mean that his opinions and plans aren't shared by a scary percentage of the people. But I would just feel that this particular politician doesn't have the power to change things today.




But I may be wrong. Czech ex-president Václav Klaus, his aides, and a few pro-freedom European politicians and pundits such as Nigel Farage have initiated the following manifesto:

Democrats of Europe, Wake Up!

You may join the supporters by sending a kind e-mail to democracy@vkinstitute.cz.

Klaus explains that some modernization of the language notwithstanding, Cohn-Bendit's and Marquard's rant structurally mimics Marx's and Lenin's projects and/or a roadmap to rebuild the EU into a federal melting pot of nations analogous to the USSR.

See also Bruce Bawer's analysis, "Europe's Would-Be Masters", of the Cohn-Bendit's and Marquard's rant written for the Front Page Magazine.

I agree with Klaus that those people do think in a more or less isomorphic way to the Marxists, Leninists, and Stalinists. I do agree that they're not a negligible fringe group that may be ignored. I do agree that democrats must show their teeth before the left-wing radicals insert their teeth into the flesh of necks of our European nation states and their democratic regimes.

It's just not clear to me whether the planned creation of yet another radical party is something that crosses the red lines, something that should suddenly energize and unite the opposition to these dangerous plans across the old continent. But maybe I will change my opinion later today. ;-) So far, it just seems to me that he will at most regroup some extremist parties enjoying something like 5% percent in the EU.

Am I wrong?

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Spanish train crash: quantifying the acceleration

A tragically motivated homework problem in mechanics

Chances are that you have already seen the dramatic video of the Wednesday Santiago de Compostela derailment. Warning: the following video is brutal.



78 people died and 145 extra ones were injured. In total, it's 223 people – more than the number of passengers, 218 (homework for you: why?). A map allows one to determine that the crash occurred at the top middle point of this Google map.

Using a piece of paper, I estimated the radius of this arc of circle to be \(R\sim 380\,{\rm m}\) or so.




Now, we will need the formula for the centrifugal acceleration\[

a = \frac{v^2}{R}.

\] We will calculate the acceleration for the official speed limit as well as the actual speed.




The official speed limit is \[

v_1=80\,{\rm km/h}\approx 22\,{\rm m/s}

\] while the actual estimated speed was\[

v_1=190\,{\rm km/h}\approx 53\,{\rm m/s}.

\] It's not hard to approximately extract this speed from the video at the top. Google Maps (see the link above) indicates that the distance between the two bridges above the tracks is 250-280 meters and the train made it in 5 seconds or so, between 0:02 and 0:07 of the video. Divide 265 meters by 5 seconds and you get 53 meters per second.

Recall that the speed gets squared when we compute the acceleration. Because the driver exceeded the maximum allowed speed \(2.375\) times, the maximum centrifugal acceleration was surpassed by the factor of \(5.64025\) (all this precision is bogus, of course: it's for you to accurately verify your calculations). That's quite a factor. At any rate, the two accelerations are – using the simple formula\[

a_1 \approx 1.3\,{\rm m/s}^2,\quad a_2 \approx 7.3\,{\rm m/s}^2.

\] While the first, allowed one is about \(1/7\) of \(g\), the second one is about \(3/4\) of the Earth's attractive gravitational acceleration. And that makes a difference.

The train is subject to \(9.8\,{\rm m/s}^2\) of the vertical acceleration and \(1.3\) or \(7.3\,{\rm m/s}^2\) of horizontal acceleration. The angles (away from the vertical axis) determining the direction of the total centrifugal-plus-gravitational acceleration (the "total gravity" from the passengers' viewpoint in the sense of general relativity) obey \[

\tan\alpha_{1,2} = \frac{a_{1,2}}{g}

\] and they are \[

\alpha_1\approx 0.13\,{\rm rad}\approx 7.5^\circ \text{ and }\alpha_2\approx 0.64\,{\rm rad}\approx 36.7^\circ

\] for the speed limit and the actual speed, respectively. The first angle is modest; the second, actual angle is stunning. Even if the tracks were optimized (non-horizontal) for the recommended speed limit, \(80\,{\rm km/h}\), the direction of the total acceleration during the actual ride of death would still be almost \(30^\circ\) away from the vertical direction.

Should it be enough for derailment? Well, experimentally speaking, it was enough.

Theoretically, it's useful to imagine that the direction of the total acceleration as the vertical one; the actual "down the train" direction deviates from it by those \(36.5^\circ\).

In the most naive model, if the cross section of the train were a square, the center-of-mass were in the middle of the square, and the wheels were at the extreme left-and-right endpoints of the square, then the critical angle would be \(45^\circ\). In reality, the train is a "slightly tall" rectangle and the wheels are "somewhat closer to each other". Both of these deviations from the simplest model make the overturning more likely i.e. they reduce the critical angle. The wheel flanges are pushing in the opposite direction and make the train somewhat more stable in similar situations but it wasn't enough. I don't know what was the height of the center of mass of the wagons. There are many subtler points in derailment that you may learn e.g. from Wikipedia.

At any rate, I wonder whether the driver was calculating the angle of the total acceleration before he or she tried whether \(190\,{\rm km/h}\) is an OK speed for that curve. He or she should have. I am saying "he or she" to fight against the stereotype that killers are male, and to fight against the underrepresentation of women among killers. I hope that the Feminazis will praise me for that. It seems to me that the Spanish bureaucrats spend much more time by overwhelming self-employed babes with impenetrable paperwork than by verifying a remotely acceptable speed of the trains. ;-)



Don't forget about the "conical wheels" explanation by Feynman why trains don't need a differential, why they don't get derailed in curves under normal circumstances (low enough speeds), and why the flanges aren't the heart of the right answer.

BTW if you want to see that Czech kids are better engine drivers than Spanish adults, see this 2-minute 1960 video on the Pioneer Railway in front of the Pilsner zoo that was fully operated by kids between 1959 and 1976. The adults only donated the trains to the kids and they decorated the kids by the communist symbols. My father (who was living just 200 meters away from the tracks) was already building capitalism as a kid – during the very construction, he was taking some iron/tracks from the Pioneer Railway and selling it as a raw material. ;-)

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America spying on Germany, EU

An ugly image of a double-faced, hypocritical America emerges

Off-topic, philosopher's birthday: One of the greatest polymaths of the history, Gottfried von Leibniz, was born on July 1st, 1646. See this biography written in 2008. His father, a professor of moral philosophy in Leipzig, East of Germany (who was half-German, half-Sorbian i.e. Slavic: I couldn't understand a Sorbian song, looks like a countryside Czech dialect pronoucation of Polish words inspired by some Yugoslav speakers), died when Gottfried was six. From that moment on, he had access to the dad's huge library and was affected by his mother's teachings. He wrote often valuable things in dozens of disciplines but his standards and ingenuity in natural sciences couldn't match Newton's.

Edward Snowden hasn't been assassinated by the U.S. government yet so he is starting to make some real impact, unfortunately a negative one so far. The media such as the Guardian told us about the anger in Europe that erupted after some European countries' officials were shown documents indicating that Prism is spying on EU in general and Germany in particular:

Berlin accuses Washington of cold war tactics over snooping

The extremely promising Euro-American free-trade pact has been threatened after we learned that half a billion of phone calls, text messages, and e-mails are tapped by the U.S. every month. I can't really imagine how this huge amount of information may be effectively monitored, how many (invisible?) people the U.S. intelligence services are employing etc.



It would be great if people kept their heads cool because the trade pact could be a great thing and if they tried to see all the things in the context – every major power is spying on someone and Snowden actually indicated that the U.K. is more brutal in this respect than the U.S., a subtlety that the Guardian and others fail to mention – but on the other hand, I won't hide that I am kind of troubled by the revelations, too.

I generally like the Americans' character but this story highlights some of its darker sides including an unmatched level of hypocrisy, a hardwired hardcore centralization sentiment, and a generally poor understanding of (and respect for) other nations' culture and inner working. I will get to these points momentarily.




The NATO headquarters in Brussels, Belgium were the starting point for the NSA to obtain some EU politicians' (and many other people's) sensitive data in an unfriendly way. The offices of the European Union have been a major target. Well, let me say that these Eurobastards should be monitored – but they should be monitored by the European citizens because the European citizens are those who are affected by the Eurobastards' acts most intensely.

The NSA hasn't told us anything about these acts – without Snowden, we wouldn't even know that the spying was going on – so it is hard to present the U.S. spies' behavior as a friendly one even if I dislike most tendencies in the EU today.




But Germany is the main targeted nation state. The American scrutiny of Germany was elevated to a new level sometime in 2010 – clearly during Obama's tenure. In fact, Germany was placed in the same box as China, Iraq, and Saudi Arabia while the English-speaking countries such as the U.K., Canada, Australia, and New Zealand were included in the less monitored, more friendly category. It is hard to convince oneself that this surprising categorization of Germany occurred because the U.S. services haven't detected the violent resignation of Adolf Hitler as the German chancellor yet.

All these revelations are worrisome because they're so hostile. It isn't hard to understand that stealing half a billion of secret messages from a nation every month isn't exactly a friendly behavior. But aside from the intrinsic hostility and the lack of trust, the documents unmask some troubling aspects of Obama's America's thinking – and perhaps America's thinking in general.

First, you can't really believe current American officials – and perhaps other Americans – when they praise you as a great ally and friend. In particular, Obama has repeatedly praised Germany as an extraordinary ally. He did so a few days ago. But even if you return to November 2009, a moment a few months before the new wave of spying began (and a moment when it was probably already under construction), he said things like:

"I should just note that Germany has been an extraordinarily strong ally on a whole host of international issues," Obama said. "Chancellor Merkel has been an extraordinary leader on the issue of climate change [oops]. And the United States, Germany, and countries around the world I think are all beginning to recognize why it is so important that we work in common in order to stem the potential catastrophe that could result if we continue to see global warming continuing unabated [blah blah blah]."

He has always had a big mouth but a sensible person just can't take his words seriously. These comments don't apply just to his remarks about the friendship.

America has been among the most vocal defenders of the preposterous meme that the ethnically, culturally, and historically defined nations and their interests belong to the past. We may hear this total rubbish all the time – after all, nations are defined by their territory and values only, and so on. But when you look under the surface, you may see who are the "real" allies and who are not. The "real" allies just happen to be those who speak the same language. A coincidence? I don't think so.

Also, America repeatedly claims that individual citizens and all the ethnic groups are participating in the decision-making process. That's how America – according to its public proclamations – imagines the mechanism of the decision-making process, at least in democracies. However, as soon as you look under the lid, you see something entirely, entirely different. The U.S. agencies are literally obsessed by the (fundamentally misguided) question "who is really controlling Europe". So we have learned that they have decided that some politicians in Brussels and Berlin have this power.

It's just amazing. This obsession breathtakingly contrasts with the publicly available proclamations, with America's declared will to help the oppressed nations and ethnic minorities to decide about their fate. In reality, the power in Europe isn't as centralized as the naive, geography-challenged folks in the U.S. agencies seem to imagine. Most political decisions are still being made at the national level. This is true even (or especially?) when it comes to the foreign policy issues.

Germans represent about 1/6 of the EU population (the most populous single nation) and Germany's contribution to the European GDP (22%) is somewhat (a little bit) larger than that, much like Germany's contribution to the power and decision-making in the EU (30%?). But it's just nowhere near 100 percent. Germany's opinions may be correlated with the ultimate decisions by the EU in a percentage of cases that may approach 100 percent but that doesn't mean that Germany is actually behind this correlation. In most cases, it just means that other EU countries or politicians agree with those in Germany and Germany agrees with them – in a balanced way.

At any rate, the revelations do reinforce the picture in which a majority of the Americans – including most of the bureaucrats in the intelligence services – are just too stupid and too disrespectful when it comes to foreign countries and the idea that Europe is composed of dozens of largely independent nations seems just too difficult for them to grasp. They're obsessed by the idea to simplify this complex world and look for a framework in which the political arrangement of Europe is fully analogous to the arrangement of the U.S. Well, it's not! American spies may spend decades by the search for Henry Kissinger's notorious and proverbial "one telephone number of Europe" but after they penetrate through trillions of telephone calls, they won't find anything because there is no single telephone number of Europe.

Politicians from many European countries are demanding explanations. I don't think that there's much to explain here. The stories are almost certainly true. It's pretty normal for countries to spy on others which is the actual explanation why America is doing it, too. We shouldn't investigate whether the U.S. spies on Europe – it clearly does. Instead, people should try to find out who else may be spying because some of the analogous information that we weren't shown yet may be much more dangerous for us.

To summarize, the very fact that Prism has targeted the communication in Europe isn't too surprising to me. The detailed ideology – ideas about the way how Europe and the world do operate and how they should operate – seem more troublesome to me. At any rate, a sensible person should learn that big words about friendship, equality of nations, and democracy spoken by folks like Barack Obama – and his very smile – shouldn't be taken seriously. In your real decisions, all these things should be ignored. While Obama himself has won the 2008 and 2013 elections as the ultimate king and symbol of hypocrisy and the search for the most politically correct, kitschy image (and yes, something as irrelevant as his colorful racial background was the main fad that was helping him to win both recent elections), I am afraid that these revelations tell us about the character of many more people than just Barack Obama.

And that's the memo.

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Dobrodošli u EU, Hrvatska

It means Welcome to the EU, Croatia, just to be sure

In two days, Croatia will become the 28th member state of the European Union. I think it is positive news for Europe and Croatia's parameters justify its membership because they don't differ too much from those of Slovenia, so far the only post-Yugoslav EU member state.



Vinetou and Old Shatterhand, two most famous Americans, on a lake in the Plitvice Lake Region, Croatia

The European Parliament has already welcomed Croatia as well: by creating a Facebook web page with a huge coat-of-arms of the puppet fascist state of Croatia during the World War II. ;-) Nice. This shows how much understanding the EU has for its citizens and nations.




Croatia has been a part of Yugoslavia (with one name or another) between 1918 and the early 1990s when the federal state violently decayed. Before that, it belonged to the Roman Empire, Austria-Hungary, and other empires. Whenever I had to think about their wars against the Serbs, I just couldn't fully understand the tension as they speak the same language, really.

Now I learned that it's not just the religion – Croatia is mostly Roman Catholic. Their ethnic (I really mean biological, genetic) origin may actually be Iranian, not Slavic (Serbs are surely Slavs) and it can make some difference. If you think about the contemporary Iran, you may find it genuinely ironic when you realize that the more Iranian part of the Yugoslav nation is the most Roman Catholic one, the most Western one, in a sense.




Croatia is a top tourist destination for us. Almost every Czech has been vacationing there at least once. I have been there about 4 times. The Croatian economy is based on services, including tourism. The GDP per capita is $18,000 or so, about 3/4 of the Czech figure. Their current president and prime minister are left-wing. The economy isn't doing too well, with the unemployment near 20%, about 2% annual GDP drop, and so on (I would probably blame many things on their excessively high salaries), but these are temporary details. I am confident that in the medium and long run, it is pretty much a healthy economy.

Their currency is one kuna, which means "marten" (both in Croatian and Czech), because in the Middle Ages, marten pelts were used as banknotes. One euro is about 7.5 kunas. So kuna is still over 3 korunas which isn't too tiny and it means that they still actively use the fractions. 1/100 of a kuna is called a lipa (in Czech: lípa; it's actually our national tree) which means a linden lime tree.

I think that the Croats are friendly. Financially, they probably prefer German tourists who spend somewhat more money than the Czechs but the times when a Czech tourist would be assumed to be a nomad who eats his own sandwich in the middle of a road and spends nothing belong to the past. The Czech and Croato-Serbian languages sound familiar to one another, they use similar roots. However, sometimes the similarity is deceiving. The meanings of similar words may be slightly different as well as completely different.

For example, "plivat" means "to spit" in Czech but "to swim" in Croatian (to swim in Czech is "plavat"). Also, perhaps more seriously, "cura" [tsura] is a girl, a babe, a neutral or positive word for a young woman in the Croatian language. The closely related word "coura" means a "slut" in Czech. The Czech tourists and their Croatian hosts are usually aware of these basic traps and they make fun out of them. If you think about the diversification of the meaning of the word "c[o]ura" that had to occur in the past, it probably means that there had to be a moment in one of the two countries' history when it was either normal for a young girl to be a slut or when being a slut was viewed as a positive thing by the society (at least the part of the society that had power over the mutation of the meaning of similar key words). Otherwise the meaning of the world couldn't have drifted in this way. Do you agree? ;-)

Czechia's T-Mobile, a telephone service operator, produced about a dozen of TV commercials in the most recent year that play games with various Croatian words known to Czechs. For example, there's a town (and/or name) Zadar in Croatia that sounds like "zadara", a Czech word meaning "for free". So a group of ski jumpers wants to "call Zadara" (call Mr Zadar or call for free) and they do lots of crazy things. The Yugoslav languages sound a bit funny to us. The more Southern related languages may sound more funny to the people in the North – something that the Poles who find the Czech language immensely entertaining know very well. I don't claim that Polish doesn't sound funny to us but there's some sense in which more Southern languages sound more similar to a child speak.

The Croatian landscape is pretty. Croatia controls most of the Adriatic Sea's coastline that belonged to Yugoslavia. There are the Plitvice lakes and other cool things, too. Last night, they were airing the last "Vinetou and Old Shatterhard" movie from the series shot by Germany and others in 1968 or so. Some of the picturesque scenes claiming to be North America (including the image at the top) were shot in the Plitvice Lake Region of Croatia. The movies are based on novels about native Americans written by Karl May, a German author. As kids, we would probably name Vinetou (an Apache) and Old Shatterhand (his pale-skinned "brother") to be the two most famous Americans. I have always been amazed that almost no one knew these two guys in the U.S.! ;-)

The EU membership may tame some problems of Croatia that result from their location in the Balkans and from the hot temperament associated with the nations that live there. On the other hand, the increase of diversity and common sense that Croatia (and its 4.3 million citizens) brings may dilute some ultracentralization, Soviet-like tendencies in the EU and countries like mine may be gaining a new natural ally in various questions that matter. Slovenia hasn't really played this role because this nation seems to be obsessed with the right behavior that the EU overlords will like (I mean that the Slovenes have been a bit like swots). I am sure that the Croats are less opportunist and submissive.

Dobrodošli u EU, Hrvatska.

Croatia is great but there can only be one country that wins the most important discipline. Czechia has safely won the Bloomberg tournament searching for the most vice-prone nation in the world. With 64.5 points, it was well ahead of Slovenia at 58.8 and others such as Australia, Armenia, Bulgaria, and Spain. The subdisciplines were alcohol, drug use, cigarette consumption, and losses in gambling over GDP. Too bad that other disciplines such as the divorce rate, out-of-wedlock births, the working womanhours of prostitutes per capita, and so on weren't included because our hegemony would be even more striking. ;-)

More seriously, I am surely not a typical representative of my nation in those things but I do view this high score as correlated with the atheism and the "true freedom" that exists in Czechia. Whether you find it a blasphemy or not, smoking, drinking, sniffing, and gambling are usually not lethal and they even increase the sense that "life is worth living" for those who do such things. I think that in most countries beneath us, such ideas are taboo.

On the opposite side of the table, you find Zambia. Would you prefer to live in Czechia or Zambia? Paradoxically enough, the drug-civil-war-stricken Mexico was among the 5 least vice-prone countries, too.

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Trade war: Chinese solar panels vs EU wine

Business Week and many other news outlets tell us about another worrisome development in a possibly looming trade war between the EU and China (or EU and the rest of the world).

Some EU apparatchiks have decided that China is selling solar panels below cost so they imposed 11.8% tariffs on them – but this fee is meant to grow to 67.9% within two months. Holy cow. China is clearly going to revenge. At this point, they are preparing actions against the European wine. The French who believe that they produce some of the best wines in the world aren't happy but it's their own fault, to a very large extent. And of course that the Chinese investigation of possible subsidies for the European agricultural products should naturally end up with the "guilty" verdict: the European agriculture is subsidized and manipulated with from A to Z. Needless to say, the wines were only picked for symbolic reasons; things would become tougher if China began to target Airbus aircraft, for example.

It's truly concerning to see that among the Chinese communists and the European Union officials, it's the latter who are much more fanatical, unhinged anti-market Mujahideen who don't hesitate to put our continent's and the world economy's health (and perhaps the global peace) at risk whenever they decide to pursue their sick anti-market policies. China says that now, during these trade conflicts, Europe must recognize its decline. It may sound tough but I completely agree with that. If Europe is becoming uncompetitive etc., and there are probably good reasons for that (to a large extent, it's someone's fault, the fault of some very bad policies), it is just completely wrong to try to mask this fact by spitting on others.

The EU "leaders" have already distorted the market conditions so brutally that it may be hard to decide what is actually "normal" and "fair" in the business relationships between Europe and the rest of the world. Incidentally, India and others are still not paying the ransom that the EU imposed upon the foreign airlines operating in Europe and India and probably others are readying reprisals. Not too good.




But let's return to the topic of the tariffs for solar panels.

First, under normal market conditions, there should be no tariffs. If China is helping its products by dumping prices, it's good for the consumers – most of us. Every company – and China is a very large company if you view it in the right way (and some communist policies are its inner issue – every company has the right to organize itself in a way it prefers) – has the right to run campaigns and offer discounts in order to promote its products. It's a completely normal part of the competition. Such a dumping isn't for free; it costs something. The possible benefits include an advantage over competition (especially if the competition can't afford to generate losses or debt, not even temporarily) but this outcome isn't guaranteed. It makes no sense to regulate such things. Dumping and similar things help the consumers to test products they wouldn't otherwise try – and all these things help to make the markets more efficient and consumers more satisfied.

We may find it problematic if a very large "company" such as China, with giant cash reserves, is using dumping prices to prevail in the long run. But whether you like it or not, this extra power does come with the cash reserves. The Chinese have behaved more responsibly in fiscal matters and their greater ability to test the resilience of their competition by dumping prices is one of the prizes you win if you manage to produce savings instead of debt. The converse holds for Europe and its debt-creating policies, of course. So don't whine about it, EU commies and populists: this comparative disadvantage of Europe is your fault.



The tariffs on solar panels are even more insane if you realize that the EU apparatchiks have claimed that "renewable" energy sources were a good thing; they even introduced a huge system of subsidies for these economically unfeasible energy sources themselves. If they were a good thing, they should enthusiastically thank China for sending us solar panels – especially cheap enough solar panels. But quite suddenly, the desire of these officials to irrationally promote excessively expensive "renewable" energy sources is beaten by another hardwired far left-wing instinct, protectionism, and this explosive mixture can't lead to anything good.




China has the unquestionable right to revenge for the disgusting, anti-market harassment launched by the EU officials and start to harass exporters who are sending stuff to China by comparable policies. Europe is the side that started these annoying steps; the EU is the Adolf Hitler of this new war if one is getting started. But do we really want such a thing? Do we want to lose the right to buy cheap foreign products? Do we want our producers to lose the option to export their products to whole and very important parts of the world or to any foreign country?

Do we understand and do the EU apparatchiks understand what this kind of protectionism does to the continental and world economy?

In Europe, the market for many things has been distorted by many illogical and pathological interventions so that sometimes you no longer know what is the actual price of many things. (These things – multiple prices that have nothing to do with each other – are even worse in countries like Argentina, a Latin American visitor recently assured me.) Some imported products are twisted by heavy tariffs. Some products are made cheaper if they agree with some pseudoscientific, ideologically driven criteria of "fighting against the global warming". Others have already been made more expensive with the same excuse, because their production or consumption "contributes to the global warming".

Couldn't we just eliminate all this mess? All this stuff is a road to hell. Every billion dollar that you redirect using these ad hoc regulations is potentially a billion that has been stolen or used for criminal activity according to someone else. You just shouldn't behave that these things can be done routinely.

A trade war may start because of any product but it's no coincidence that products whose prices have been manipulated with – using tariffs, carbon taxes, carbon credits, and similar things – are the most likely products to lead to a trade war because people (and nations) simply can't possibly agree about the right extent to which the prices should be manipulated, subsidized, increased by tariffs and carbon taxes, and so on. And even the same people – in this case the shameful EU apparatchiks – aren't ethical enough to stay consistent in their principles, in their methods to manipulate all these prices, as their sudden opposition to cheap solar panels proves.

Let me tell you once again what is the right extent to which prices or air tickets, solar panels, and hundreds of similar products and services should be manipulated with by tariffs, carbon fees, carbon taxes, carbon credits, and similar fudge factors. The right extent is zero. Everything else is a crime and if the ongoing row will result in a full-fledged trade war with China (or a greater bloc of countries), all the EU apparatchiks and global warming alarmists and protectionists and similar left-wing garbage people deserve a heavy punishment, at least a life in prison. The Old Continent can't afford to let such people escape unpunished.

And that's the memo.

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Investigation of the largest Czech credit union: assaulting the victims

...including your humble correspondent...

Another annoying event occurred to me on Friday – and it's still happening and will be happening for quite some time.

I learned that the Czech National Bank, the supervisor of our financial markets, began to audit MSD (imsd.cz) or Metropolitan Credit Union (the largest Czech credit union) where I sent a very large amount of money on Tuesday. The transaction wasn't completed (which is why I started to be interested in the situation on Friday) and the money should have been returned but they remained in the air, invisible at both places. (Update, June 14th: After exactly 1 month, this particular amount of money was returned from the air to my account in the original bank.) Today, I learned from the chairman of MSD that a reverse transaction (sending the money back from MSD) was ordered by MSD last Wednesday but it wasn't allowed because the authorities began to block outgoing payments (approximately) on that very day (?) and they didn't do it right.

Between Friday and today (Monday), I was gradually learning what was happening. The audit by the Czech National Bank that found it suspicious that the percentage of "loans given by MSD that need monitoring" is extremely low, was apparently combined with another (totally independent?) intervention, an investigation (by the Supreme Office of Prosecutors in Prague, whatever is the right English translation) of two large loans worth $50 million in total which are apparently fraudulent (attempts to rob most of the members of MSD such as myself by some individuals).




The credit union has 15,000 members – only members may have deposits and/or loans – and the balance sheet is about $750 million. You may calculate the average member's savings (well, the right number is actually higher than that because you should only count the members who are savers and not those who are members to borrow the money). Most of the growth of the members occurred in the last 2 years (I was added a month ago or so: a very unlucky timing, indeed), after years in which the credit unions regained their good name (damaged by failures in the 1990s; no insurance existed at that time).

About a quarter of that balance sheet may be available in cash. The financial situation of MSD seems very healthy according to their documents, much like the business model. It's the ultimate super-simple bank with a single savings account offering a reasonable interest rate; and just several types of CDs (three or four different maturity dates). They lend their members money for 10% a year in average (a large percentage of them is returned OK); and they can therefore afford to pay 2+ percent on the savings account and 2.5-4.5% or so on the deposits (the savers must be members of the credit union, too). No large expenses for complicated software (the internet banking is only passive), employees giving plush bears to clients, and so on.

I have always thought that a 10% interest rate for loans is reasonable. Near-zero interest rates are a pathological component of the postmodern age; they always amount to some government institutions' campaign to cram the banknotes down the people's throats. Such government institutions may think that they're helping the economy but they only help to distort it and screw it. It is just not natural to lend the money for near-zero interest rates. Such a habit completely ignores the (often unpredictable) risks as well as the pain associated with the "postponing of the consumption". Lenders wouldn't naturally demand that low interest rates; they're only willing to do so because the banking market has been heavily distorted by activists trying to "revive the economy" who actually just create one bubble after another, one crisis after another.

Moreover, in conservative nations such as Czechia (which inherited the conservative approach to finances from the Austrian Empire), the lowering of the interest rates really reduces the consumption because the economically most relevant people are "more savers than borrowers" and they just feel poorer when the interest rates are low, so they reduce their consumption. No one cares about these rather self-evident facts and one-size-fits-all dogmas about "good low interest rates" are parroted by pretty much all central bankers etc. in our country, too.




So I learned today that my large amount of money is "hanging in the air" today, from the chairman of MSD. I sent it while the Czech National Bank was already blocking the incoming payments. But the payment was still accepted and added to a shared "collecting" account of MSD but no longer moved to my account in MSD internally (because the people executing the block didn't do it at the right place).

Aside from that very large amount of money, I also have about 2.5 times the very large amount of money in MSD which is still far from my only assets but it's very, very large. I haven't had any contacts with any credit unions throughout my life but a month ago, I found the near-zero-percent (and less-than-inflation) interest rates in the large banks really obscene and moved a significant portion of my savings, encouraged by the full insurance of savings up to €100,000 (I wouldn't be attracted to a credit union without this insurance).

You may imagine that I wrote some number of e-mails to the Czech National Bank, to the prosecutors, to various banks etc. today, in order to fix the situation – especially with the not-fully-completed transactions (a problem that MSD is totally aware of but the government institutions never seem to care if they screw something). It's annoying. Well, it's not an existential thing for me, either. I've seen postings by a 60-year-old man who had all his life savings in MSD and can't pay his rent and food now because he didn't diversify at all. A possible millionaire-turned-homeless.

I can't resist to say a broader point: it's just another episode that is teaching me that the regulation and the government is a cure that is (much) worse than the disease. It seems to me that the prosecutors in particular are fanatics who are obsessed by the hope of catching a criminal – or a likely criminal – but they don't hesitate to shoot 15,000 innocent people (actually victims) along the way. More generally, the government institutions are bodies where one isn't really responsible for his or (in this case, mostly) her acts, in which he (or she) isn't really forced to compare costs and benefits. The costs of some potential achievement may be many times higher than the benefits (in this case at least 15 times) but these folks may still decide it's the right thing to do. They're ready to block a whole credit union because of two suspicious/bad loans. They're ready to destroy your national economy because of one totally bogus problem (e.g. "global warming") or anything of the sort. They have no sense of proportion because the "omnipotent" character of the government allows them to remain ignorant about all proportions.

Needless to say, there are always some people who support these more-harmful-than-useful activities by the government: it's the jealous voters who are more hateful towards other, successful people than the degree to which they want to enjoy their own life. So a government that does more harm than good is what they actively prefer.

So the members of MSD who are really victims of the two large possibly fraudulent loans are forced to spend at least a week or weeks (and maybe months or perhaps years, who knows) enhanced by some extra anxiety. Some of them probably become homeless because of that – the status of the credit union is probably going to remain uncertain for quite some time which makes it impossible to pay 100% of the savings from the insurance fund. The people in the government and state-organized independent supervising bodies aren't able or willing to distinguish criminals from their victims. They're not even able to properly block the transfer of money between a credit union and the rest of the world so that some money remain floating in the air (on the shared "collecting accounts"). If I am dissatisfied with a bank, I may try a competitor; if I am dissatisfied with some government bureaucrats or agencies, I am just screwed. Of course that the effectively two-choice elections have no chance to find the right recipes to improve the situation in hundreds of government bodies.

Speculations exist that the interventions are controlled by large banks that find the more effective competition from the credit unions inconvenient. I have nothing to say about these speculations except that I see no way to prove them invalid.

The investigators and regulators just don't seem too competent or helpful in any sense but all of us are paying these people (and they have obscenely high salaries) to "improve" the free markets. The free markets aren't, can't be, and shouldn't be perfect – but the government ain't a way to improve them. In the present crisis, government is not the solution to our problem; government is the problem.



And that's the memo (thanks, Mr Reagan 1981).

---

An article claims that MSD has been giving loans – up to 4 billion crowns (1/4 of the balance sheet) – to foreign firms with no history, probably represented by puppet representatives. These firms were probably supposed to rob the money out of the savings bank and never return them. If true, it's good that they stopped it, of course, if they did. If the fraudulent loans represent 40% of the currently available loans out there, it seems very likely to me that MSD will converge towards failure (or violation of the financial-situation conditions that savings banks have to satisfy) once the fraudulent loans are closed because the good loans can't produce enough profit to cover the interest rates etc. On the other hand, MSD should have enough cash to cover all the savers when it's closed so maybe no money will have to be used from FPV.

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New Czech president attacks EU regulation

A way to summarize why I have been decided for quite some time to vote for Miloš Zeman as Václav Klaus' successor is to say that among the candidates who had a significant chance, he was the most right-wing one. He was the clearest for of the green politicians and NGOs; he was the most candid one when it came to jokes vs political correctness; he is a much stronger hawk when it comes to foreign policy (especially the threats posed by the Muslim world) than Václav Klaus (he talks about the Anticivilization spreading from Northern Africa through Indonesia that makes living partly by drugs and partly by oil; he wants to invite Israel to NATO to help us fight against this major threat); regardless of his talk, he has done a lot for capitalism in Czechia, e.g. by his having privatized the banks 15 years ago.

Zeman is a self-described leftist. Still, those of us who remember all the developments right before, during, and after the Velvet Revolution must know that this "leftism" is a part of the image that Zeman has to preserve not to negate his life but there's no genuine "leftism" of the kind that irritates me so much. In some sense, he is a conservative fifth column within the Left which is a good thing.




I remember his analyses he wrote shortly before the fall of communism. They were rather brave and I never thought that they would be too much on the left from the opinions of Václav Klaus; well, they were somewhat on the left. When Klaus managed to establish the standard, strong, right-wing political party in Czechoslovakia in the early 1990s, Zeman wanted to remain competitive so he gradually redefined himself as the leader of the modern left – successfully so. He had to because the other side was already taken. ;-)




Last time he made me upset about some left-wing comments on the economy was probably in 1992. My perception of Zeman after 1992 is completely different and everything I know about his later conflicts with the rest of the social democratic party's establishment is compatible with the idea that he wasn't left-wing enough for those bastards.

Zeman also calls himself a eurofederalist but those folks who are satisfied with this naive, superficial label had to become disappointed once they learn some "details". ;-)

Just to be sure, he can imagine a European federation – so can I but I just don't want any such thing – and he wants Czechia to join the eurozone within 5 years – which is irrelevant because all the other major politicians and economists are against.

However, that's been pretty much the complete list of the attitudes in which Zeman is pro-EU. The rest of the EU attitudes hiding in the head of this politician is a chain of anti-EU nuclear timebombs which is a major reason why I preferred him. ;-)

Zeman is just visiting Austria. He didn't cause any real scandal worth the name but he made it clear that his opinion about the expulsion of ethnic Germans in 1945 wasn't just a cheap trick to get national votes in the presidential election. It's an important part of his seeing of the world. So he insisted on judging the expulsion in the historical context. He said something tough that I totally agree with – after all, I've said it many times years before Zeman.

He said that the expelled Germans should have felt lucky because the alternatives were tougher. A highly conceivable alternative was a death penalty for these – hundreds of thousands or millions of – [so far] Czechoslovak citizens who had arguably committed high treason by happily becoming citizens of the Third Reich and allowing this monstrous regime to overtake their homeland. Various things could have taken place in 1945; all the people who were actually expelled could have been executed. Perhaps 1/2 of them or 1/3 of them. It would still bring almost every German family a huge sorrow. In this sense, the Czechoslovak government was extremely generous; we may even say it was protecting the ethnic German from a potentially uncontrollable revenge by the ethnic Czechs. Moreover, the expelled people were allowed to escape the looming communism which was really great for their freedom and which was great for them economically, too.

Zeman despises the murders etc. during the "wild expulsion" phase just like I do but these trees shouldn't prevent us from seeing the forest – the question what should have been done with the millions of Czechoslovak citizens of German ethnicity after it was clear once again that they did a seriously wrong thing – high treason and related acts (which helped to cripple the life of many other Czechoslovaks: 300,000 Czechoslovak citizens were killed during the war, for example).

These are not just some irrelevant ghosts from the history. We must reach sufficiently compatible opinions about these matters if we want to preserve the "thick line" after the history. The historical bills must remain paid and people have to agree with the outcome. Also, we must know whether the context should influence the current policies and decisions. It should. People who don't learn the history are bound to repeat its mistakes.

But let me return to the EU.

Zeman has signed the European Stability Mechanism but he actually opposes all the ideology and planned action behind this project. He thinks it is crazy for the EU to help countries like Greece and Cyprus; he "cannot imagine" that a Czech finance minister would approve such things. You could suggest that his opinions are inconsistent but they aren't. The purpose of ESM – officially – isn't to pour money to undisciplined, screwed countries. It's supposed to be an arrangement encouraging countries to act responsibly and helping them with loans if they're in trouble that occurred despite their disciplined behavior. I can imagine that such a mechanism could be morally justifiable in my eyes. It just differs from the "real-world ESM" which is a gadget for large-scale redistribution of money within the EU.

You could also say that his desire to join the eurozone is incompatible with his negative opinion about bailout for troubled EU countries. But I don't see any incompatibility here, either. A single currency just doesn't imply a single wallet! Many people or nations may use the same currency even though they hate each other; they would never pay a penny to the others. It's just a damn unit of wealth! Paying with the same banknotes or coins as someone else doesn't transform you into her sister.

Of course that I may also imagine that within 5 or 10 years, Czechia will be in the eurozone. We may pay with the same unit. I think that the crown should strengthen before the merger – well below CZK 20 per euro while the current exchange rate is CZK 26 per euro – but at the moment when I don't have any clear remaining expectations about a future trend of the exchange rate, switching to the euros is just about dividing some numbers by a fixed, particular, well-known conversion factor. There's nothing wrong about it. If the inflation targeting by the ECB is similar to the inflation targeting by the Czech National Bank, nothing really changes. We must be sure that we're approximately in the same optimum currency area as the true core of the eurozone – which I still assume to be Germany – and I think we clearly are. Otherwise there's no problem about the transition.

The only problems are the fiscal and redistribution policies that some people are trying to add on top of the innocent fact that some people use the same unit of money. These are the real problems. If we join a currency that is doing these insane things, it's very bad. If we remain in a system that doesn't expect this unlimited redistribution, things are just OK.

But the main topic I wanted to mention was Zeman's attack – in an interview for Profil, an Austrian journal that will be published on Monday – on the EU regulation. It was far from the first time when he criticized such things. In the past, he has repeatedly complained about the fluorescent light bulbs whose ugly light was forced on his room by the crazy EU regulation of light bulbs.

Today, we learn something else.

Can you imagine that the European Union would prevent Shakespeare from writing Hamlet? Pretty much the same – equivalent – thing happened to Zeman. If Hamlet is one of the main characters that define Shakespeare – so Hamlet's ban is a serious attack on the very identity of William Shakespeare – we should ask what is the main thing that has defined the identity of Miloš Zeman for decades.



Yes, it's Becherovka, a herbal liquor from Carlsbad, Western Bohemia, with 38 percent of alcohol (only 2 people have access to the full recipe today). Zeman would always drink a lot of it. But for nearly a decade, we were told, Zeman would be drinking Slivovice instead (40-55 percent of alcohol). Why did he switch? Why did our Shakespeare has abandoned his Hamlet?

Some people who followed it knew that Zeman probably didn't like the amount of sugar in Becherovka anymore. But only now, we may learn the actual reasons: a decade ago, the European Union would actually rule that liquors have to contain at least XY percent of sugar. Becherovka was forced to transform itself into a sweet lemonade of a sort and it just wasn't good for Zeman anymore!

So he switched to Slivovice. You may see that the European Union is seriously crippling people's lives, even the life of the most important Czech politician at this point. ;-)

Zeman is probably even more shocked by the EU's attempts to regulate smoking. As a passionate smoker, he was once able to convince his "fellow Texan", staunch non-smoker George W. Bush, to be allowed a cigarette somewhere in the White House. Zeman jokingly counts it as some of his most important achievements in the foreign policy. ;-) Of course, unlike Klaus, he smokes at the Prague Castle all the time, too. He must really be scared by the ongoing plans to ban smoking at an increasing fraction of places. During his visit to Slovakia, they kindly allowed him to smoke in the presidential palace and surrounded him with ashtrays but he was later told that his smoking was illegal, anyway. ;-)

As you can imagine, I don't really care about the right of smokers to smoke anywhere – an isolated would-be right of a group I don't love in any elevated way – but whether you want it or not, the smoking bans are just another step to restrict the human freedom, to take their sometimes elementary life decisions from them. And in this more general form, it's just extremely dangerous.

The European Union shouldn't try to intervene into smoking, liquors, and light bulbs, Zeman importantly says. In some sense, he is protecting his own rights and hobbies which makes his defense less morally clear but on the other hand, it makes the negative impact of the EU decisions on actual people more visible and tangible.

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Holy week with the EU: an insane EU propaganda video

The iDNES.cz news server and other Czech media have brought us a trailer of a new movie funded by the national branches of the top EU institutions. The movie is called "Holy Week With The EU" and it describes the EU from the viewpoint of high school students preparing for the GCSE (final) exam.

The trailer is just stunningly repulsive. Fortunately, over 90% of the Czech citizens seem to agree with me. The hugely negative reaction has led the film director to demand that the trailer shouldn't be aired anywhere because it was created by amateurish cherry-picking by some jerks among the EU officials.

However, whether cherry-picking took place or not, these 6+ minutes surely appear in the movie and probably show the spirit of the film. And it's bad enough.




If you don't understand Czech, I must tell you how they speak. They speak in perfect, official, standardized Czech and their articulation is very clear. At the same moment, they try to be cool by extremely cheap, suggestive, sexually oriented remarks. This combination sounds horrible.

But what seems most disgusting to me is the careerist approach by the main "hero" of the movie. One could perhaps argue that the EU differs from the Third Reich and from the USSR in certain subtle and not only subtle respects. However, this guy doesn't differ from the functionaries of Hitler Jugend or Komsomol. A self-centric, shallow, sleazy bootlicker who instantly buys anything from the sources that may help him in his career.

At the same moment, the movie seems to paint a gloomy picture about the contemporary high school curriculum which arguably seems more tendentious than what I remember from my times as a (dissident) teenager during communism.




Here is the video:



Fast translation:

Girl I: We're lacking a commander here a bit. Can't you give us an advice? If you have already accumulated those experiences...

Boy: About what?

Girl II: Probably beverages...

Girl I: With the GCSE!

Boy: What is on the ticket?

Girl I: Institutions of the EU.

Boy: This is my cup of tea! Madam will surely lend me her notes. Yes, my head is pretty large but I can't store everything in it! So... We will show it visually. ... Ann will be the European Council. She will take the highest place. Hop. What isn't in the head must be in the hands.

Imagine a simple scheme, a male figurine. A head, heart, and two legs. We will omit the other organs today [he is saying it towards Girl II who has crush on him]. Ann will be one who is thinking. She will stand at the highest place. She will represent the head and the brain of the whole European Union, the European Council. It determines the priorities of the EU as a whole. For example, it stands behind the authorship of important documents such as the Treaty of Lisbon.

[Girl III arrives, also horny.] And you will be the European Commission. The heart not only of mine but of the whole European Union. Its motor, if you will. The Commission is the driver of integration and it proposes new regulations to be debated by the Council of the EU and the European Parliament.

[1:29 Stop this. Another scenery.]

Maverick boy: Do you want to make a career in bureaucracy?

Boy: Why not? I surely want to work abroad, at least for a while. And the work for the EU is a good opportunity.

Maverick boy: You want to build the EU by a spade, right?

Boy: Why?

Maverick boy: Do you think that they're waiting for you with open arms?

Boy: If you can speak languages, you may try to get a job in the institutions of the European Union. People are sending applications to the EU in all the official languages and they have to receive an answer in the same language. And that's where native speakers are needed.

Maverick boy: And it's a child's play for those who have studied languages, isn't it?

Boy: Not only that. Look at eures.cz where you find lots of jobs across the EU. And not all of them are for students and alumni.

Maverick boy: Everyone would be looking down his nose at me.

Boy: I don't know why. For example, Germany has a clear shortage of native workers in certain sectors. And they're happy to get some foreigners.

Maverick boy: Because they don't have to pay them equally much.

Boy: No, they have to pay the same.

Maverick boy: Maybe using the same currency.

Boy: Where did you get so much negativism?

Maverick boy: I am not negativist. I am just not used to okay anything just because they bring it right under my nose. I am using my brain. I want to know what are the benefits of our membership. For example, I am interested in the history, e.g. about the Second World War.

[Long break. Kids memorizing and dating.]

[3:25, staircase] Girls: Relationships. They are complicated in general.

Boy with beard: On the contrary, they're the simplest things. The European Union is the largest trade block in the world. It has the second most important currency. And it has signed trade and partner treaties with most countries in the world.

Another boy: For example, the EU is promoting its interests within the World Trade Organization or inside G20 which includes the most developed countries of the world.

Boy with beard: And the EU is also organizing summits. EU-Russia, EU-USA, EU-China...

Girl I: And Russia is an important partner due to its resources.

Girl II: And the U.S. are the largest trade partner of the EU while China is the largest importer into the EU.

Boy with beard: But the union is also focusing on less developed countries and within its development policies, it spends more than EUR 7 billion.

Female teacher: Radek [boy with beard], come here.

Classmates: Good luck.

Committee boss: So you drew the process of integration and expansion of the European Union. So what will you tell us about it?

Boy with beard: The European Union was created with the intent to prevent new wars between neighbors that would culminate in the Second World War.

Narrator: In 1951, the economic and political integration of the European countries began. It was supposed to bring permanent peace. There were 6 founding members of the initial community, the European Coal and Steel Community. The Cold War between the West and the East was the dominant factor determining the atmosphere of the 1950s. In the late 1950s, the integration was getting deeper. New communities were founded which, in 1967, were merged to the single European Community according to the merger treaty.

[Credits.]

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Cyprus bailout savings tax is better than alternatives

First, let me start with some background. Cyprus is an island in the Mediterranean Sea, South of Turkey. De iure, there is the ethnic Greek "Republic of Cyprus" covering the whole island. De facto, the Northern 40% is controlled by an independent Turkish Republic of Northern Cyprus. The problematic co-existence of Greek and Turkish Cypriots is a major cause of the continuing military tensions between Greece and Turkey.



The total population of the island – a member of the EU and the eurozone – is 1 million people. At most, the Greek problem is 10% larger than we thought: I don't think that any realistic development on the island is a legitimate reason for hysteria. Their banking sector is overbloated and close to bankruptcy (which would quickly cripple the whole Cyprus as an economy), primarily – but not only – because of its exposure to troubled assets in Greece; in particular, look at the Laiki Bank website. The European creditors including the European Central Bank have offered them a bailout but they demanded that Cyprus will show its ability to collect a part of the required money – perhaps by a "tax" that cuts a part of the savings stored on the island.




This step is generally criticized by the libertarians including Tomáš V. and the Václav Klaus Institute. I happen to disagree. I think that the proposed solution is better than all the alternatives I can imagine.




Well, the savers – many of whom are foreign individuals or companies – would pay for something they have no responsibility for. Really? I think that if someone saves his or her money in Cyprus banks, whatever his or her reasons are (and be sure that the reasons were certain financial advantages of the saver – who only saw these advantages but overlooked the risks, many of which are inseparably associated with the advantages), he or she is displaying some degree of faith in the state that has sovereignty over that territory and he or she preferred those banks because of higher interests or tax haven status of Cyprus (so yes, they have benefited and risked). The banks don't exist in the vacuum.

(When the saver is a Cypriot, the guilt is clear: he or she helped exuberant and populist politicians to be elected and he or she has probably personally benefited from the money that was spent. Most of these people have lived beyond their means and they have made wrong investments, too.)

When someone robs the bank, it's the task for the enforcement forces – the police paid by the government – to find and punish the thieves. When the government that is responsible for these important services faces an existential threat, it's obvious that it may use some non-standard tools. Those who deposit their savings in foreign banks are surely showing some degree of faith in the local government. This faith is not terribly reasonable in countries such as Cyprus.



Exactly 100 years ago, in March 1913, Turkey lost the Battle of Jannena in Greece. Czech soldiers were helping the Greeks, too.

Now, when such a tax is imposed, it's obvious that the people who will pay are not exactly the same people who caused the problems – or at least their contribution to the funds isn't exactly proportional to their guilt. And there are lots of arguments such as "all savings are insured" or "all savings up to EUR 100,000 are insured" – claims that clearly can't be mindlessly believed because such guarantees only make sense if the guarantor is able to fulfill the commitments, if he's alive and kicking, and if the commitments may be enforced by someone. But the Cypriot savers are still a more accurate "proxy" for the culprits than some other groups that would pay if other solutions are picked.

What are these other solutions? Well, one of them involves the European taxpayers. A simple alternative that has been very close to the solutions that were chosen in all similar situations is that the pan-European funds of a sort simply pay whatever these troubled countries and banks need. I think that the correlation between the culprits and those who pay is much weaker in this scenario than it is if the Cypriot savers pay.

Cyprus may get the money differently – e.g. from an extra loan backed by some public assets or as a gift from Russia compensated by some semi-transparent, semi-opaque advantages that Russia may earn in the region. For example, there's some oil around the island and Russia would like to control it except that it's not too attractive. The total volume of the sweet liquid is unknown and Russia would be at risk that Turkey would claim the ownership rights for the deposits. (Update: it seems pretty clear at this moment that the negotiations with Russia and Russian subjects are over and no money will arrive from Russia.)

Greece has proposed to overtake the Cypriot banks. I had to laugh. That would be the same jump to safety and stability as something that the Czechs describe by the idiom "hiring a billy goat as a gardener" (borrowed from a fairy-tale), whatever is the English counterpart of this idiom.



If the savers were stolen something like 10%, it would be annoying and some mostly innocent people would get poorer, too. But I think that the precedent would be a good one. The moral message would be that if someone gets a bailout, it costs something. This elementary message hasn't been conveyed for many years. Irresponsible nations such as Greece were getting arbitrary amounts of money and they never paid anything for them. They never faced any disadvantages. What a surprise that the bad behavior has been spreading if no one has ever been punished for it in any way.

Now, the markets may realize that Cyprus is a small country but they may be afraid that such a solution – if it is ultimately accepted (the bailout savings tax was unanimously rejected by the Parliament because voting "Yes" would probably be a political suicide for any lawmaker) – will become a precedent for larger countries such as those in PIGS. This could make investors poorer, more anxious, and so on.

Well, I understand that people are psychologically unstable even if the reasons are infinitesimal or downright irrational. Nevertheless, I think that the precedent would be a helpful one. It would not only help to fight against the moral hazard. But it would also force governments, banks, and others to behave in a more fiscally sustainable and responsible way in the near future. Soon or later, that could improve the fiscal soundness of the governments, banks, and others.



Lucie Vondráčková: Fear

People, banks, and nations dislike pain and fear. Pain and fear is what sends the stock indices to the South. But pain and fear exist for good reasons: they inform us about some real dangers that are coming or that may come in the future. A tax reducing the account of a saver who is using the services of banks on a problematic island is a pain and others may be scared of such a pain, too. But all these things are just perceptions that help to prevent the really bad, big events such as the disorderly collapse of the continental financial system or, less dramatically, a long, slow, but inevitable downward spiral of the continental economy.

So whatever the detailed procedure is, I think it would be great if some of these countries and banks that are broke – or people around them – started to pay and if they were no longer getting arbitrarily large bailout funds literally for free. This desire of mine seems much more important to me than some comments about the EU oppressors etc. The EU and the ECB may be annoying power groups with authoritarian tendencies but they're still subjects that are paying to someone and this status comes with certain rights, I think.

Incidentally, Bundesbank has concluded that the German households are vastly poorer (several times!) than the households in PIGS countries. I find this fact stunning. Germans are hard-working, disciplined, and modest. I feel that the world is sort of wrong because of this anomaly, too.

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Reasons to be grateful to Václav Klaus

After 10 years in office, Václav Klaus is leaving the Prague Castle, the traditional workplace of Czech kings and presidents, tonight. Tomorrow, the new president Miloš Zeman will be inaugurated.

Throughout his presidential years, Klaus often enjoyed as high as 70% approval rate. However, things like the New Year 2013 Amnesty restored the natural tendency of a large part of the Czech nation to stupidly criticize Klaus so his departure is accompanied by lots of bitterness at many places. I can't watch TV programs about Klaus for more than 10 minutes because soon or later, some idiotic critics appear and I just can't stand these folks.




Even people who consider themselves Klaus' critics should realize that there's a lot of reasons why one should be grateful to him. Some of the points discuss acts that benefited the Czech citizens; others have continental or global consequences.




Fast liberalization of the economy

At the end of 1989, when the Velvet Revolution exploded, Václav Klaus was ready. He had lots of years to sort his knowledge and opinions about the economic systems. He instantly became the first post-socialist finance minister who was promoting fast privatization, fast liberalization of the markets, job market, and many other things.

Some people haven't understood it as of 2013 but those who think at least a little bit realize that the delays would have improved nothing and all the third ways were just roads to hell with a detour. In some respects, Klaus the executioner wasn't as fast as Klaus the ideologue so he left things like the privatization of banks to his successors such as Miloš Zeman but in the grand scheme of things, these are details.

Restoration of standard political parties

Communism was overthrown by the Civic Forum, an excessively diverse movement that contained everyone from reform communists and trotskyists to Thatcherites like Klaus. This sort of uncrystallized organization of politics was something that some folks – including Václav Havel himself – actually rooted for.

Klaus realized that an advanced society can't work like that. There have to be competing ideologies and programs with well-defined carriers who compete. Klaus helped to restore the system of standard political parties, left-wing and right-wing parties, and de facto defeated various ideas about "apolitical politics" and similar pernicious junk that would lead the country to a new era of the absolute power of a group of the self-anointed ones who have no responsibility.

While we often think about Klaus as a carrier of a particular political "flag", he was also the "above the politics" builder of the proper democratic political system based on parties, too.

Politics as the confrontations of ideas, not dirt

Even if you disagree with Václav Klaus' particular opinions about anything or everything, you should be able to admit that he was a man who preferred particular ideological questions and attitudes – in which the politicians differ and should differ – over colorless personal ambitions and accusations that would produce a competition between politicians who are ideologically the same or who don't care about ideologies at all.

He has offered his opinions on lots of things (including some unexpected issues that were humiliated when Klaus was semi-jokingly called a polymath – the authors of these jokes must have realized that they weren't pure jokes) and by doing so, he ignited some debate in the society, at least the layers of the society that are willing to think about things (which aren't necessarily the self-described "elite" layers).

National identity

Václav Klaus has been a politician who wasn't afraid to defend certain traditional values, namely the national identity and patriotism, in an era when it became fashionable among many to spit on these things. His Europe is a Europe of nation states. The immense friction that the artificially unified Europe has faced in recent years (and the economic downturn that resulted from it) has shown that Klaus' traditional Europe of nation states is a better model.

Correct identification of structural problems of the creeping unification of Europe

From the beginning, Klaus was warning that the eurozone wasn't an optimum currency area. He was able to foresee many problems largely resulting from the existence of the common currency. The validity of these warnings was established by recent events that were plain obvious to human eyes.

Klaus has been warning about many other undesirable trends in Europe – centralization, loss of democracy etc. – and the relevance of these warnings is getting obvious to most careful observers, too. People who don't like to overlook the obvious must have noticed how many important things have been foreseen by Klaus.

Political support for the oppressed ones who are right

The academic environment and other intellectual circles are currently controlled by numerous politically correct delusions – feminism, climate alarmism, humanrightism, reverse racism, and so on. I don't want to enumerate too many of them because I would have trouble to eat my dinner afterwards.

Those members of the intellectual circles who realize that (and why) these delusions are delusions may have felt hopeless for many years as they were oppressed by the politically correct fascist establishment. With his courage and naturally acquired political power and influence, Václav Klaus gave them some hope and a reason not to feel as renegades just because they haven't lost common sense about certain important things.

Stripping AGW and other holy cows of their holy status

The status of fashionable opinions such as environmentalism and its most radical variant, the global warming alarmism (this is a typical description that Klaus would use) has become so indisputable that most people in the West, especially the politicians, were afraid to even question the good intentions of the climatologists and others.

Klaus, having had quite some experience with the dishonest behavior of many left-wing intellectuals, was always able to see that these climatologists are still folks who try to strengthen their political pets – many of them are recycled Marxists – and/or ordinary people who are using the apparently simplest way to get to the money (grants).

Those people who are able to think critically started to realize that people aren't saints or infallible just because they call themselves "scientists". One must be somewhat cautious and critical while evaluating the data from some people who glued some sexy labels on their faces.

Vocabulary: new words

While he was presenting his opinions on many social problems, he was self-confidently using various newly created linguistic constructions. The most typical example are various types of -isms such as humanrightism, climate alarmism, and others. By using these words, Václav Klaus wanted to emphasize an important point – that is otherwise invisible to way too many people – that these attitudes to various questions are ideologies, they're largely ideologically driven, and it is legitimate to question them and/or propose and defend competing ideological systems if we see something wrong with these ideologies.

Just to be sure, I don't think that e.g. climatology is "just" an ideology. But when it becomes just some background meant to produce supportive arguments for a particular plan to reorganize the industry, the economy, or the whole society, it becomes critical to notice that the core of this structure is an ideology, not pure science.

It's natural to use many of these words, some of them did catch up, others didn't. But the phrase "climate alarmism" has become so standard that we may overlook that Václav Klaus has probably played an important role in the spreading of this language. It's not to say that no one else would use the words or invent the words but many people were afraid to do so and he was able to "codify" the terminology rather quickly.

Thanks, Mr President, and please keep on doing great work. This is not the end of the time.

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Czech president's alleged high treason: a childish yet harmful game

Even followers of stations such as Fox News could learn about a story that makes my homeland look like a banana republic:

Czech president could face high treason charges for his controversial amnesty

Czech president Václav Klaus will leave his job in 9 days – after 10 years which he spent at the Prague Castle by bringing inspiration and ideas to everyone and by impressively defending common sense, conservative values, and the Czech national interests – and the Club of Czech Klaus haters has prepared a nice gift for the economist: a trial to investigate whether Klaus has committed high treason by having declared a partial amnesty in the New Year Address. And perhaps by other things that Klaus' mindless, euronaive critics have considered politically incorrect for quite some time.

Needless to say, the accusation is completely absurd and the hypothetical "sins" have nothing to do with high treason. Most of the proponents of the trial know that it's absurd and unjustifiable. Nevertheless, they're complete slaves of their infinite hatred and the ends always justify the means in their eyes.




The Czech constitution clearly defines the crime of "great treason" that only the president may commit. I will deliberately use a different phrase; "high treason" (vlastizrada, literally "betrayal of the fatherland") is something that everyone may be guilty of. On the other hand, the "great treason" ("velezrada") is an exclusive crime of the president constitutionally defined as "acts of the president done with the purpose of eliminating the sovereignty or integrity of the republic or its democratic system". If a Czech politician in the recent 500 years has worked most effectively not to belong into this description, it was Václav Klaus. The defense of the sovereignty and integrity of his country and of its democratic system is what he's been working on most of the time.




Much like Czech kings, Austrian emperors, as well as Czechoslovak and Czech presidents since 1918, he had the right to declare an amnesty and he did it once – less frequently than many others. Amnesties took place in every system, with a possible exception of the Nazi protectorate era when it took minutes to execute an inconvenient Czech (is that the period someone considers our example?). But it was abused by Klaus haters, decorated with all kinds of idiotic conspiracy theories, and a routine yet infrequent event – and amnesties should be routine yet infrequent – became a minefield.

There's no doubt about the right of the president to declare the amnesty, much like about his right to delay the approval of various controversial international treaties etc. But the Klaus haters just want to find a way to create problems for him – and it doesn't matter a tiny bit to them whether the procedure to create the problems is justifiable.

A paradoxically important new motor behind these Klaus haters is a guy who is a complete zero in the standard politics of a democratic country as we have known it since 1989 – a billionaire and algorithmic trader Mr Karel Janeček, an almost high school classmate of string theorist Martin Schnabl. He has no clue about politics whatsoever but his hatred towards president Klaus is unlimited. He collected 70,000 signatures and 27 out of 81 Senators to support his crusade claiming that Klaus has committed "great treason". If the majority of the Senate decides, the Constitutional Court will have to seriously think whether or not Klaus has committed great treason.

Even if the verdict were Yes, it wouldn't mean much for Klaus. He would lose his $2,500 a month presidential pension but it's not such a significant amount of money relatively to his wealth as well as expected future income from the CATO Institute, a university, and perhaps other sources. But I think that what it would do to the image of the Czech Republic would be significantly bad.

Klaus himself said that this "great treason crusade" is just a "political frolic", if I use a literal translation constructed with the help of a dictionary. Clearly, he doesn't want to suggest he is afraid of these political dwarfs, he doesn't want to produce advertisements for them, he knows that their efforts will almost certainly be unsuccessful, and he realizes that a "guilty" verdict wouldn't be a personal catastrophe for him, anyway.

But the prime minister, center-right trained plasma physicist Mr Petr Nečas, said that these efforts are petty and its champions should be ashamed. Nečas' ODS party – which was founded by Klaus 20 years ago but has kept some distance from him in recent 10 years – is the only party in the Senate that has a clear opinion about the "great treason trial": it's bullshit. All the other parties' clubs are split. Miloš Zeman, the nominally left-of-center President Elect, is against the lawsuit and considers the term "great treason" exaggerated (while he counts himself as a critic of the amnesty). Zeman's strength not to participate in similar absurd games just because a strange would-be smart majority does is a reason why I was voting for him.

Whenever I was thinking about the political processes in the Nazi era or the early communist era of the 1950s, I couldn't understand how it was possible for the people to be that nasty, dishonest, and how those political trials could have accumulated a sufficient support by the citizenry to be defensible at the national level. But when I see how easily people may propose similar witch hunts and how many ordinary people defend this utterly immoral fascist game, my surprise disappears. I have very little doubt that if Mr Karel Janeček were in charge of the Holocaust, he would be able and willing to use an arbitrarily unrelated law to exterminate millions of Jews, too. These people have absolutely no morality – and they love to talk about it as if they were the Messiahs. They're fascist scum.

The communist regime has "framed" itself as the natural latest stage in the old battle of the mankind for a better society. As you must know – e.g. from the official name of China – the communist totalitarianism calls itself "people's democracy" which is an even better, probably even more democratic, version of democracy. The fact that it is pretty much the opposite of democracy isn't important for the totalitarianism's champions. A lie repeated 100 times "becomes" the truth.

Both Nazism and communism have used some traditional laws and principles to destroy the old and basic values of democracy, freedom, and human dignity. In this respect, the likes of Mr Janeček are doing exactly the same thing. The "great treason" – acts against the existential interests of the country – is the only crime that may be committed by the sitting president according to the constitution and this rule has a very good reason. It protects the head of the state against coups that could be justified by less serious excuses while the protection of the existential interests of the country is ultimately the only "lethally important" thing that the president has to do. And Klaus has undoubtedly protected these interests at every moment of his political career.

But they don't care that it's really them who are the traitors according to these constitutional principles. While they know that the "great treason" accusation is absurd, they realize that its applicability will be decided by real-world people and many real-world people are as corrupt, dishonest, and hateful as the authors of the "great treason crusade" themselves – so they (correctly) realize that their witch hunt has a nonzero chance to succeed even if the accusations are self-evidently absurd. It's enough for these efforts if the questions will be decided by sufficiently fanatical and dishonest Klaus haters.

In the same way, they want to invent some contrived explanation why it might be a "great treason", after all. In the Charter of Rights and Freedoms, an amendment to the Czech constitution, there are some comments about courts – the charter guarantees a fair trial to everyone, and so on – so it could perhaps be used to argue that Klaus has worked to undermine the democratic system.

This justification is highly contrived because details about the work of courts are not what democracy is all about. Democracy is about the control of the citizens over the political institutions of the country, not about particular damages paid by a criminal to someone else or something like that. Most laws, bills, and charters in the legal system are simply not about the very existence of democracy so their violation can't be considered an assault against democracy. But even more importantly, the Charter actually says nothing that could be used against Klaus. After all, the very purpose of the Charter of Rights and Freedoms is pretty much exactly the opposite: it is meant to protect the accused individuals from a system that could go awry, against mobs that would like to harass or murder an inconvenient individual, against premature verdicts decided without the accused person's proper defense, and so on. It's very clear that the Charter of Rights and Freedom was pretty much designed exactly to protect folks like Klaus against immoral fanatic mobs such as the assholes currently led by Mr Janeček.

They must know that the Charter is against them much like all other documents that are meant to protect democracy and the sovereignty and integrity of the country. And I am really convinced that they do know. But they hate this arrangement. They hate democracy and the rule of law as we have known it for quite some time. They're just not courageous enough to admit (or they – perhaps rightfully – think that it would be strategically unwise to admit) that democracy and the rule of law are the main principles they really despise.

So they say something else instead: that the purpose of the documents that should protect democracy, the rule of law, the individual freedoms, and the sovereignty of the country is exactly the opposite: to transfer the power to self-appointed mindless mobs with 70,000 heads, to pay no attention to clear laws that give some authorities the right to make certain decisions (e.g. amnesties), to suppress individual rights and freedoms in favor of the rights of mobs who hate certain individuals, and to force politicians to immediately endorse every treaty that reduces the national sovereignty. They don't care that the documents were designed to protect exactly the opposite principles than the principles they find dear.

Mr Janeček and his soulmates are the new Nazis and Stalinists who will never hesitate to harass, prosecute, or kill an individual if they feel some hatred or jealousy. Of course that the latter is the primary driver, after all. All these pseudointellectuals hate the fact that relatively to Prof Klaus, they are intellectual dwarfs and constantly whining wee-wees.

These folks are disgusting and I don't have to explain you how high their concentration is in the Czech Academia and in the "cultural battlefront" of the nation. They may be a minority but they're such a loud minority that they determine the "etiquette" in numerous occupations, especially those considered "intellectual ones". That's a pity.

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