Daily Archives: 14 August 2019

They Do

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Hong Kong closed its airport for several hours Monday because protesters were thronging the terminals in protest of the People’s Republic of China’s Hong Kong—Carrie Lam—government’s attack on the “semi-autonomy” of the city, and of the police’s growing violence against what have been fundamentally peaceful protests over the last several weeks.  The movement into the airport is a recent development of these peaceful protests.

Then Lam’s Chief Secretary Matthew Cheung said this regarding the protests at the airport:

[P]eople should cherish the future of Hong Kong, which is the collective hard work of everyone over many years.

That’s exactly right, although not in the way Cheung meant.  The Hong Kong people do cherish the future of their city and environs. That’s why they’re in the streets, and now the airport, protesting an overweening government that’s so plainly in the hands of the PRC’s autocrat President Xi Jinping.

Their city most assuredly is the outcome of the result of the work of all those people, effort expended over so very many years.

Their city most assuredly is very much at risk at the hands of that misbehaving government.

The Roll of Central Banks

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In his piece about Brexit and the UK’s second quarter contraction, Paul Hannon wondered about the role of central banks generally in keep[ing] the global economy growing if trade disputes escalate. Can they even do so, he asked.

I say the question is a non sequitur. It’s not up to central banks to keep the global economy growing. It’s each central bank’s job to maintain stable prices in its respective nation. Central banks certainly can coordinate their actions with each other, but that can be done legitimately only with each bank’s own national interests in mind, not those of any other nation or collection of them.

If central banks stick to that simple (and not so simple) task, their respective nations’ economies will have a better chance of staying healthy and growing, and that will aggregate to a healthy and growing “global” economy.

Against that, trade disputes are relatively minor bumps.  Economic wars, such as the one the PRC has been waging against the US and against the West generally for decades, are much more serious threats to the global economy and to individual national economies, but that doesn’t alter in the slightest the responsibility of national central banks.