Austrians Show They Have The Sense Not To Chuck Their Nation Into History's Dumpster

Yours truly outside Schloss Schonbrunn, in Vienna, Austria last September.

On our visit to Vienna last September, we beheld a thoroughly civilized and cosmopolitan city full of life and culture. Alas, it also had the reputation of being one of Adolf Hitler's haunts as he tried to scrabble together a career as an artist. (He failed). One theory is that his failures in the artistic sphere propelled him to become the notorious German Chancellor-Dictator by 1933. My suspicion is his mind was already made up for mischief long before that, and as an authoritarian narcissist he'd never have been satisfied - even as an acclaimed artist. His goal was to dominate other people.  And like the Germans, Austrians also remember with trepidation how an unhinged fascist took control of their nation more than 77 years ago.

So it was yesterday  the whole Austrian nation waited with bated breath for the outcome of an election that pitted an extreme right wing nationalist (and proto-fascist) against a leftish, former leader of the Green Party .  But in this case, the guy who got only 46 percent of the popular vote, the Nazi -glorifying Norbert Hofer - whose party traces its ideological roots back to the strident neo-Nazism of its best-known leader, the late Jörg Haider- was the one defeated.  This was compliments of Alexander van der Bellen, whose 53% popular vote win ushered in sighs of relief across Europe.

In the words of Sigmar Gabriel, the German Vice-Chancellor, "A load has been taken off the mind of all Europe. This is a clear victory for good sense against right wing populism."

Ulrich Kelber- a German minister-  went further, suggesting the Austrian vote represented a 'backlash' against the nominal election of Trump last month in the U.S.  Well, maybe, maybe not. More likely not. I would define a "backlash" as a more significant difference in popular vote, say at least along the lines of 67% to  33%.  But at least we may declare it a temporary repudiation of right wing nationalism which remains alive and well in other nations, including France and Britain. (In France, with the Socialists now in disarray, Marine Le Pen  and her National Front will face off against a center rightist, Francois Fillon.)

Jubilant Austrians - many likely mindful of Hitler's Anschluss, hold a sign reading "Thank God!" after the election.

Europe had won at least a reprieve, and Austria escaped the calumniation and scorn had it elected a Trump-like populist Nazi sympathizer. Until the election many Austrian rightists and neo-Nazis believed Hofer would benefit from the manic wave that sent Trump to a minority victory in the U.S. A minority victory because had the same voting template in Austria been used in the U.S. Trump would have been dumped like Hofer.

At the run-off vote in May, 50.35% of the population voted for Van der Bellen and 49.65% for Hofer. This slight difference sent political tremors through the small nation.  In addition, many negative nabobs - maybe hoping for a Hofer win- predicted the Austrian public, facing cold temperatures and fatigued after almost a year of campaigning would stay home. They were wrong. The voter turnout was 73.8%, up from 72.65% in May.

Austrians - unlike too many Americans (namely millennials, African-Americans) -  knew what was on the line and understood they couldn't allow this election to be remotely close. According to the public broadcaster ORF’s first exit poll, Van der Bellen had gained 53.4% of the vote with over 60% of voting districts counted – too strong a lead to be turned around by Hofer, who had 46.6% of the vote. By 7pm local time with almost 100% counted, Van der Bellen was still on 53.3% – an improvement of 3% on the May vote. In Vienna 65% supported Van der Bellen and only 35% voted for Hofer.

Another note for optimism: It seems the British rightist  nationalist Nigel Farage went too far in some of his comments and angered the Austrian rightists.  Anton Mahdalik, a Freedom party member of the Vienna city council, criticized  Farage for contributing to the party’s defeat after claiming on Fox News that Hofer would hold a referendum on Austria leaving the EU. “  According to Mahdalik: "That didn’t help us, it hindered us,” saying that an overwhelming majority of Austrians support EU membership.

Hofer himself described Farage’s comments as a “crass misjudgment”, adding that “it doesn’t fill me with joy when someone meddles from outside”.

Meanwhile,  Le Pen took to Twitter to cheer on the Freedom party, which sits in the same party bloc in the European parliament as hers, saying “the next parliamentary votes will be those of our victory”.   Don't bank on it if sanity continues to reign!

Also yesterday, another, native born right fruitcake - actually an overgrown adolescent named Donald Trump - took to Twitter. This time to try to tear into Alec Baldwin's terrific SNL portrayal of him re-tweeting mentally unstable adolescents (kindred spirits?).  Baldwin returned to Saturday Night Live to mock President-elect Donald Trump and his Twitter habit, which this week included retweeting a 16-year-old high school student.

Seems the unhinged twerp Trump, like his splenetic followers, couldn't keep his mitts off his Twitter and had to expel his BS yesterday, not only at Baldwin but China too.. If he finally gets sworn in will he also be using Twitter to make his foreign policy? Maybe what we need is to get this guy 4 years worth of diapers and a sippy cup  as opposed to access to a cell phone or telephone.

BWAAAAHAHA! Kellyanne, You pwomised I could keep me Twitter!"

The best thing the corporate media could do is to cease re-broadcasting this overgrown baby's tweets, enabling them to virtually become an alternate media standard - when it embodies cartoon lingo.  Ignore the damned tweets, often fired off recklessly at anything that gets his goat, and force him to hold an actual press conference where he's held accountable. Respecting Donald Dump's tweet storms merely legitimizes an alternative,  deformed, infantile reality which ought to be rejected by sane citizens. I.e. grownups.

One thing you don't want to do is antagonize a nation that holds nearly $1.5 trillion in U.S. bonds.

Meanwhile, our Austrian friends are aghast a nincompoop like Trump could also be rejected by 53 percent of a population but manage to get in, based on an anachronistic electoral vote system. A system which, ironically, was intended to prevent the very sort of populist demagogue like Trump from being President.  The Trump Nazis and racist hate mongers seem to forget that James Madison - writing in The Federalist No. 10- argued that the electoral college is intended to protect the Republic from mischief of faction, i.e. instigated by a common impulse from misguided voters that is adverse to the rights of the majority of citizens. But don't hold your breath. It will likely go over their heads.

But most of us who accept Madison's principle would insist the electors on December 19th have the moral responsibility and constitutional right to support the popular vote winner in this election - like the Austrians did in theirs. That means becoming "faithless" electors in the interest of preserving the Republic, as opposed to allowing it to be finally hurled into history's dustbin.

See also:

http://smirkingchimp.com/thread/p-m-carpenter/70137/trump-and-taiwan-merely-a-blundering-taste-of-whats-to-come

The Brexit Vote -What It Means, Including To Your 401k

One of the triggers for the 'Leave' vote in the UK had been images such as this showing migrants near Calais, France ready to bolt across the 'Chunnel" to England.


Back in July, 1978, on my first trip to the UK and London (where we stayed with a friend of Janice's) the character of "old England" was ubiquitous. The beauty of the London transport system was that one could take  the "underground" wherever he or she chose, from Piccadilly Circus, to Earl's Court (where we watched a medieval jousting match) to the Royal Albert Hall where we were privileged to see (and hear!)  a fantastic performance of Tchaikovsky's 1812 Overture.  Along the way foreign tongues were seldom heard, either in the tube stations or the venues themselves.

There were no mullahs standing in any area we went (and we covered a lot of London) ordering women to shield their faces with burkas or whatever. The only terror incidents were carried out by the IRA, including one bombing which killed several London police and some of their horses.

Now, flash almost forty years later and all that's changed, the whole UK landscape. Migrants have been pouring in from many nations - particularly Middle Eastern and African - for decades, and the character of the place has altered. One will now often hear as many foreign tongues as native Brit (whether Cockney, Yorkie, or whatever other dialect).

This altered character of the nation, coupled with loss of what is perceived as a British identity since the Maastricht Treaty - otherwise known as the 'Treaty to Integrate Europe' - ultimately drove the "Leave" majority yesterday (winning by 52% to 48% in the "Brexit" vote).  Despite London and Scotland voting to remain, most of the rest of the UK and especially rural or working class areas saw things differently.

Many on the Right, including the odious Nigel Farage (who use scare tactics such as thousands streaming through Slovenia) to depict a direct migrant threat to the UK, are now cheering about "Independence Day".   But as Richard Haas pointed out on MSNBC this morning, it is more akin to dissolution day, given Ireland and Scotland (which voted remain) will now themselves likely call referenda to leave England to itself - dissolving the UK.

Despite the Farage exaggerations, it is true that migrants have been making their way into the UK in greater numbers, often gathering near Calais in France before attempting to bolt across the Channel tunnel otherwise known as the "chunnel".  The spectacle of this happening, added to the existing tensions with mainly Islamic immigrants (recall one of them running amok and chopping off a head barely two years ago)  has enraged many to the point they'd had enough.

Economics was the other rallying point though not as passionately framed as arguments from the anti-migrant segment. Those on this side were basically tired of Brussels calling the shots regarding trade despite the fact the Brits were allowed to keep their own currency (the pound) as opposed to using the euro.  The econ leavers insisted they would carry on just fine, thanks, and no need to worry about repercussions.

But that may be akin to whistling in the dark as the wolf comes to the door.  The fact is the UK had been sending 44 percent of all its exports to the single EU market. That can simply no longer happen any longer since the UK will not have that privileged advantage. They will now have to "go to the end of the line". German Finance Minister Wolfgang Schäuble put it bluntly barely three days ago in The Financial Times: "In is in and out is out". Meaning if the UK votes 'out', they are out of the EU market - no special benefits or advantages conferred. The extreme case? The EU, if it really wanted to be punitive, could force the UK to make separate deals with each of the 27 remaining EU nations.

This means exports will likely shrink and drastically, with whatever factories left shuttered and their workers laid off.  This is what happens when your biggest customer is now effectively taken away, or at least its impact drastically reduced. It will be even worse if Ireland and Scotland themselves vote to leave England al alone, and remain with the EU. Then England will truly be "little England" with an emphasis on little.

This is what caused the  global markets to react badly early this morning, with the German DAX (.GDAX) dropping 731 points and the Nikkei Index more than 1286.  The DOW is expected to take a dump too, and I'd be amazed if is less than 700 points drop. Further, the turmoil could go on for months as the UK attempts to sort out its new position, and get a new government (David Cameron is now out as PM having called the Brexit vote)

In the end, the vote for Brexit means chaos in the short and possibly long term. It means European issues will be roiled and possibly other EU members now also emboldened to try to leave. We already saw last year the fomenting for "Grexit" or Greek exit, but the Greeks eventually came to their senses and realized they might be better in than out, even with a lot of debt. ('Out' and they likely wouldn't even be able to muster a loan)

For your 401k, as financial guest Melanie Hobson noted yesterday on CBS Early show, it will mean a lot of volatility. I myself expect to see massive dives in the stock market in the coming weeks until the issues are resolved to the markets' liking. Remember, that includes all the markets, not just the U.S. ones.  Keep in mind also that Britain's economy is the 5th largest in the world - meaning a "sneeze" in the UK (as with Brexit fallout) could trigger pneumonia in some places. Pneumonia there (in the UK) could trigger....well, you don't want to know!

Anthony Mason, covering the Wall Street markets opening this morning stated a "pretty bleak opening is expected", which may be an understatement.  The main barometer to watch, I think, is the extent of the flight to safety. Already we're hearing about foreigners buying up treasurys which will have implications for the bond markets, and it also could for money markets.

At the very least, given the low global GDP of barely 3%, the Brexit vote likely brings interest rates down further, and slows growth significantly. (Some even warn the UK could go into recession, but we will have to see what happens in any Scottish or Irish separate referenda to leave the UK.)

On the positive side, central banks are still propping up the markets around the world with their next to zero interest rates thereby  providing a "balm" as the turmoil continues over the next  few years. If nothing else, Janet Yellen  will plausibly assert:  "Well, because of the economic uncertainties inherent in the Brexit vote, no more interest rate increases for at least 3 years". This will make Wall Street's day and so provide a counter force to the Brexit negative influences.

So those with 401ks, while they will sustain some stomach-churning days, shouldn't go into hysterics. Yet.....

See also the related articles here: 

http://www.theguardian.com/us

See also:

http://www.ft.com/cms/s/0/bbd593ee-39d4-11e6-9a05-82a9b15a8ee7.html#axzz4CWIGLKRv