Is Europe dancing to Mark J’s tune?

Note from Dan: Back in January Mark Jurkevich weighed in with the column below. It’s aimed at American corporations, but the same issue is rather suddenly rankling Europeans. Voters in Switzerland have overwhelmingly approved a recent law that (gasp!) gives corporate shareholders at least some limited control over executive compensation, and the European Union seems headed in that direction to a lesser extent, with bankers. Mark called me Monday from Poland to tell me about those, and we decided to recycle this one, below. Could the U.S. be next?

By Mark Jurkevich

Executive pay in public U.S. corporations has evolved into an out-of-control racket. Left unchecked, the resulting huge and growing income gap between the elites and the shrinking middle class will soon resemble typical third-world patterns.

According to a widely referenced Congressional Budget Office statistic, since 1979 the income of the top 1 percent grew 275 percent, while that of the middle 60 percent grew only 40 percent. The U.S. owns the highest gap in the developed world, according to New Republic.

The trend is continuing unabated. In 2011 the top 500 CEOs of publicly traded companies received 16 percent increases in compensation, while the average American worker received 3 percent, according to Forbes Magazine. Read more »

(From left) the author with Pawel Koslowski, owner of Mustang Trading, and his trusty customer-service manager, Robert. Without them, he never would have been able to get his 1997 VW Jetta GLX registered in Poland.

By Mark Jurkevich

Here in Warsaw, I have a corporation that’s more or less the American equivalent of a subchapter S. At the urging of my Polish accountant, I finally decided to register my 1997 Volkswagen Jetta GLX to this company. For some years I’d been skating by with New Jersey tags. Not only did this confer certain advantages I’ll get into below, but I have a somewhat morbid fear of government bureaucracy and red tape. I wanted to steer clear of those potential tangles.

Before making the decision, I overcame my reluctance about the bureaucracy by consulting with Mustang Trading, a U.S. car specialist in Warsaw. They assured me this would be a slam dunk, and they would walk me through the process of converting the car to European Union operating standards and getting it registered.

I committed to this decision in late December when I chose not to renew my New Jersey registration, set to expire the end of January. The Polish conversion and registration was estimated as a one- week job costing $1,500.

Almost immediately I was figuratively sucked into a Salvador Dali painting, from which I barely found my way out a month later. Or maybe it was Dante’s Inferno. If it was the latter, my Virgil was Pawel Koslowski, the owner of Mustang Trading. Here’s that story. Read more »

Note from Dan: Mark Jurkevich has been traveling a lot lately so he’s taking a break. Here’s one of his columns from last March, with a new headline and art. With  foreign-sponsored chaos in Syria, Europeans evacuating Benghazi and Islamists streaming over the Libyan border into Mali and Algeria, it’s no less apropos today.

By Mark Jurkevich

Here we go again – the ritualistic drumbeat is reaching a frenzied finale preparing Americans for a U.S.-supported bloody overthrow of a sovereign state’s government in the name of spreading democracy; this time, Assad in Syria.

The Left and the Right are in a testosterone-driven race to lead the charge; Secretary of State Hillary Clinton at the “Friends of Syria” conference in Tunisia declared the Assad government illegitimate, while Republican leadership demands “safe passage corridors” for rebels. Since Assad is not using jets, they can’t call it a no-fly zone.

Over the last fifteen years Americans have been conditioned by this ritual – a long standing sovereign government starts being referred to as a “regime,” we are told it’s undemocratic, the “freedom loving” opposition is suddenly armed to the teeth, then, after much bloodshed and expenditure of U.S. treasure, the sovereign government is toppled. Inevitably, the fruits of this ritual are – well, like most big government programs – a costly mess with myriad undesirable consequences.

Democracy Building is indeed a big government program. The total estimated costs of the Iraq and Afghanistan projects are $4 trillion, according to a Brown University study. Add in the other half dozen “democracy project” costs during this time, and it’s enough to solve the U.S. debt crisis. The usual big program waste and fraud are well documented for these projects. They also have a 100% failure rate for replacing a tyrant with a peace-loving democratic government.

Given the enthusiastic support for the Democracy Building program by the GOP’s conservative wing, the Tea Party and evangelical Christians, one can only conclude that they believe their core unifying value of shrinking big government programs stops at the U.S. border. Yet, these democracy projects, wars of choice, are more wasteful and ineffective than the big domestic programs conservatives want to cut. There’s also a side effect of these projects that should be of particular concern to the evangelicals: they have consistently caused the destruction of ancient Christian communities.

To date, the track record includes: Read more »

Monument in Purnuskes, Lithuania, which since 1989 has been considered the most widely accepted geographic center of Europe. | Wikimedia Commons

By Mark Jurkevich

The inward-looking tendencies of European Union politicians has not only perpetuated their financial crisis, but has also created a delusional view of geography.

For example, last week the press office for UK’s Prime Minister Cameron advised that he will shortly be giving a major speech “on Europe.”

What they really meant is that he will be giving a speech on the UK’s views of the European Union.

There is a big difference.

The EU is a political structure of 27 countries that combined make up a surprisingly small part of the continent called Europe.

Cameron himself is guilty of this chauvinistic view of the EU.

In advance of his speech, he told the BBC:

“Right now, I think there are a lot of [British] people who say ‘I want to be in Europe, but I’m not happy with every aspect of the relationship, so I want it changed.’ “ 

Obviously, Cameron can no more pull Great Britain out of Europe than he can change his biological mother. What he can do, theoretically, is pull Britain out of the EU.

One can only shake his head every time a Brussels bureaucrat lectures about what countries like Ukraine or Belarus must do if “they want to join Europe,” or what Russia must do to “improve relations with Europe.”

It’s a safe bet that few folks in Brussels know the EU capitol is approximately twice as far as Moscow is from the geographic center of Europe – 1,750 vs. 950 kilometers.

Those distances are only estimates. While I can smugly declare that only an act of God can remove the island of Great Britain from Europe, defining the borders of Europe is much more complicated. Read more »

(Above) Palestinian Authority President and Fatah leader Mahmoud Abbas, right, shakes hands with Palestinian Prime Minister Ismail Haniyeh, the leader of Hamas, as he hands him a letter of appointment authorizing him to form the new coalition government in Gaza City. (Below) President Barack Obama with Israeli Prime Minister Benjamin Netanyahu.

By Mark Jurkevich

Recent Israeli and U.S. policies have considerably strengthened Hamas, although it’s labeled a terrorist organization by both countries. This has been achieved by making concessions in response to Hamas’ violent resistance to Israeli occupation, while simultaneously punishing rival Fatah for pursuing a solution through peaceful political means.

Since 2007, Palestinian authority has been split into Hamas-controlled Gaza and the Fatah-controlled West Bank. The split occurred after the surprise victory by Hamas in Gaza elections supervised and certified as free and fair by international observers, including former President Jimmy Carter.

The election results caught U.S. and Israel by surprise. They strongly favored Fatah. In response, while heaping additional financial rewards on Fatah controlled West Bank, they applied punitive economic sanctions on the people of Gaza, including one of the harshest blockades on civilians anywhere since World War II. My November essay  “The human-rights-tragedy in Gaza” gives a taste of what life is like under the Israeli blockade.

The split between Fatah and Hamas is of great strategic value to Israel. For decades it has been under international pressure to negotiate a two-state solution with the Palestinians. But thanks to the split, Israel has been able to justify avoiding meaningful negotiations, arguing that it has nobody to negotiate with, as long as the Fatah-Hamas power schism continues.

Cynically, key Israeli and U.S. policies are designed to continue the split indefinitely. For example, via The Palestinian Accountability Act Congress links Fatah’s financial support to guarantees it will not reconcile with Hamas. Financial handouts are critical to West Bank Palestinians, given that the Israeli occupation makes it impossible for the people to develop a self-sustaining economy. Read more »

Congressional Budget Office

By Mark Jurkevich

Executive pay in public U.S. corporations has evolved into an out-of-control racket. Left unchecked, the resulting huge and growing income gap between the elites and the shrinking middle class will soon resemble typical third-world patterns.

According to a widely referenced Congressional Budget Office statistic, since 1979 the income of the top 1 percent grew 275 percent, while that of the middle 60 percent grew only 40 percent. The U.S. owns the highest gap in the developed world, according to New Republic.

The trend is continuing unabated. In 2011 the top 500 CEOs of publicly traded companies received 16 percent increases in compensation, while the average American worker received 3 percent, according to Forbes Magazine.

The historical income gap charts show an arc from 1915 (the peak of the Gilded Age just prior to U.S. entry into World War I) to present, as shown here and here. In 1915, the top 1 percent’s share of income was over 18 percent, while today it is over 20 percent.  The 1950s, 60s and 70s represent the bottom of the arc, during which the top 1 percent’s share of national income was approximately 10 percent.

History has shown that great countries, and empires, derive strength from a broad middle class, and fail over time when wealth is concentrated at the top 1 percent. But often the cures prescribed are worse than the disease. Read more »

Frank Vincentz | Wikimedia Commons

By Mark Jurkevich

In Cold War-era Eastern Europe, the appearance of bananas on grocery shelves was a sure sign Christmas and New Year’s were nigh. The imported holiday treat for the masses was a costly hard currency splurge by communist central planners.

Bogusia, my Polish wife, recalls her father braving 2-hour lines in 15- degree December weather to buy bananas. Timing was always nerve racking. If her father bought too early, the bananas would begin turning brown by Christmas Eve; if he waited too long, the bananas might be sold out and the children would be heartbroken. After the Christmas Eve dinner, Bogusia and her younger siblings would eagerly rush to find elaborately wrapped bananas under the Christmas tree. It was the highlight of the evening.

While bananas were associated with the year-end holidays behind the Iron Curtain, the fruit has also been at the center of political intrigue and conflict elsewhere more or less continuously since the late 19^th century. From the beginning, the United Fruit Company, and its successor, Chiquita Banana, has played a central role.

Registered in New Jersey, United Fruit was founded in 1899. By the 1920s it operated in 10 Central American and Caribbean countries. It dominated the world banana market, including an 80% share in the U.S. alone.

The banana market was not the only thing United Fruit dominated. Bradley Palmer, its driving co-founder, developed a strategic relationship with the U.S. government. He was an advisor to many Presidents and Congress. With both overt and covert U.S. government assistance, United Fruit took control of much of the infrastructure in the countries it operated in.

This included the postal service, railroads, ports and telecommunications. United Fruit’s Tropical Radio & Telegraph Co. played an historically important role in the development of radio communications. It had a controlling interest in a number of national telecom companies, including those of Cuba and Guatemala. Read more »

AP Photo

Note from Dan: Mark Jurkevich had to unexpectedly fly to Istanbul Sunday to tend to some affairs. While he’s gone, here’s a post of his from Feb. 2, 2011 (merely just an email to me) regarding the U.S., Israel and its 2010 invasion of Gaza, and the latter’s effect upon Egypt. Nine days later, President Hosni Mubarak was deposed. Civil unrest in Egypt continues.

By Mark Jurkevich (Feb. 2, 2011)

Assuming President Hosni Mubarak falls, this will pretty much wipe out the U.S./Israel long standing regional strategy, in my opinion

I believe the likely scenario to unfold would have a lot of parallels to the 1979 Iranian revolution (and for that matter the 1917 Russian revolution); first a transitional moderate government will flounder around for a few months and then a more ideological group will grab power on a long term basis. That latter group in this case will be controlled by the Muslim Brotherhood.

In my opinion, what irreversibly set in motion the undoing of Mubarak is the Israeli invasion of Gaza two years ago.

With that, the U.S. and Israel did not leave Mubarak, their “partner,” any good choices. In that sense, the Gaza invasion will likely prove to be a catastrophic strategic mistake for Israel and the U.S.

Ahhh, it seems that more and more frequently Israeli’s testosterone fueled decisions are turning into costly mishaps:  the aggression on Lebanon, the war-crime filled invasion of Gaza, giant murder squads operating in United Arab Emirates.

I would welcome your thoughts on the subject.

European dairy farmers spray police officers with milk during a demonstration outside the European Parliament in Brussels on Monday. | AP Photo

By Mark Jurkevich

European dairy farmers used more than 1,000 tractors and milk transport trucks to gridlock Brussels on November 26 and 27. They were protesting low milk prices. Using high pressure hoses, the farmers sprayed with milk the European Union Parliament Building, as well as the riot police trying to keep order.

The European Milk Board (EMB) claims 157,000 dairy farmers have gone out of business since the 2009 dairy regulatory reforms came into effect.

European milk farmers drive their tractors down a main thoroughfare in the European Quarter of Brussels on Monday, Nov. 26, 2012. Farmers drove their tractors into the European Quarter of Brussels on Monday for a two-day demonstration to protest against what they believe are unfair milk prices. | AP Photo

Under those reforms, production quotas are raised 1% per year for each country. They define the maximum amount of milk farmers can produce. By limiting supply, government kept prices artificially high. Government also makes direct payments to farmers in return for accepting production limits.  In short, the consumer gets hit twice: with higher milk prices, and by paying additional taxes to finance the direct payments to the farmers.

As production limits are gradually raised under the 2009 regulatory reform, and farmers continue producing to the higher limits, the supply has begun to exceed demand. Thus, prices for milk began to go down.

In short, the 2009 reforms are gradually phasing in free-market principals.  As the milk market was freed, it exposed the obvious fact that there are far too many dairy farmers with far more capacity than demand can absorb.

The EMB would prefer to go back to the good old days when its members got paid by the government while they tended to cows and enjoyed their farms without having to think about how much milk the consumers really wanted to buy or how much they were willing to pay.

“Our message today is that we need new market regulations to ensure prices that cover costs of production. Milk prices are far too low. Farmers can’t make a living and are closing their businesses,” EMB President Romuald Schaber said in The Daily Telegraph.

Cleverly, the EMB gives its proposed new quota regime a free market sounding name – “Flexible Supply Management.” Under Flexible Supply Management, the farmer would have no flexibility in deciding on how much product to produce; that would be strictly dictated by the government, again.

Currently more than 25% of the total EU budget is spent on the Common Agricultural Policy, or CAP. Of course, government distortions of agricultural markets are not unique to the EU. The United States has its own regulations that match the EU in complexity and market distortion. Read more »

Lencer | Wikimedia Commons

By Mark Jurkevich

A dark link binds two events that occurred last week half a world apart: the Israeli military action in Gaza, and Congress’ vote to repeal the Jackson-Vanik Amendment.

Like most initiatives in foreign affairs, the 1974 Jackson-Vanik Amendment had a declared idealistic objective, and an undeclared practical objective. Officially, it was designed as a human rights bill, tying U.S./Soviet trade to facilitating Soviet Jewish emigration from behind the Iron Curtain, where, it was claimed, antisemitism was rampant.

The practical objective was to help Israel build Jewish settlements in the newly occupied Palestinian territories. At the time, much to the consternation of Zionists, there were too few American and European Jews willing to move to move to Israel proper, let alone the Palestinian territories.

Thanks to Jackson-Vanik, today Israel is a trilingual country, with a constantly growing Jewish settlement presence in the occupied lands. The pro-Israel organization JINSA honors the former Senator with its annual Henry M. Jackson Distinguished Service Award.

On the opposite end of Jackson-Vanik’s human-rights success are the people whose lands have been systematically confiscated and settled as a matter of Israeli governmental policy since the early 1970s– the Palestinians. There are many authoritative sources about the human-rights plight of the Palestinians, including America’s very own former president Jimmy Carter. Read more »