“An Explanation of Modern Monetary Theory”

A Tuesday Wall Street Journal Letters to the Editor writer offered one.

[I]nflation is the only reason to limit budget deficits. The national debt is never a valid reason in countries with their own currencies; they can always make payments as they come due and can never be forced to default.

In particular,

The debt can always be paid by creating money.

Here are a couple more thoughts on the matter.

“Credible Military Capabilities”

The European Union needs some, says Ursula von der Leyen, European Commission President.

In order to respond to crises, the EU needs “credible military capabilities,” the leader of the EU Commission Ursula von der Leyen said at the World Economic Forum in Davos on Wednesday.
The bloc has already “set up the building blocks of a European defense union,” the former German defense minister said in her speech.
“It is complementary to NATO and it is different,” she added. “There is a European way to foreign policy and foreign security policy where hard power is an important tool […] but it is never the only one.”

Some Thoughts on Impeachment and Trial

Some thoughts. Alan Dershowitz has some, and so do I. His last is irrelevant to the present context; I’ve included it solely for completeness’ sake. The core of the present context is in his (3 of 3) tweet.

Trade Dispute

Deutsche Welle is worried about President Donald Trump reignit[ing a] trade battle with Europe.

US President Donald Trump vowed on Wednesday to make good on threats to impose high tariffs on European cars if the bloc doesn’t agree to a long-delayed trade deal with Washington.

The US leader said that the tariffs, which would Germany’s car industry especially hard, could amount to 25%.

Tariffs and Fairness

In a Wall Street Journal article centered on the way tariffs involved in the People’s Republic of China/US trade “dispute” and the simmering EU/US trade dispute impact a Scottish town, Alistair MacDonald posed a question.

Is it fair for the US, in its pursuit of trade concessions, to hurt smaller businesses that make iconic products in nations such as Scotland?

The question is a non sequitur.  The correction is, “Is it fair to single out particular subgroups for special treatment when addressing the rest of the group or the group as a whole?”

No, of course not.

Losing our Free Market?

And not just through Progressive-Democrats’ Big Government demands and planned impositions.  Now it’s fund MFWICs with bugs up their noses about their currently favored special interest, exemplified by BlackRock’s Larry Fink.

BlackRock, along with Vanguard and State Street, are the three most powerful investment funds, holding as they do roughly 20% of the S&P 500 through funds they run for investors.  And now Fink is starting to dictate to the companies his company owns shares in what they must do vis-à-vis climate change, Fink’s issue du jour.

Mr Fink is surely right that investors should worry about climate risks leading to big shifts of capital, and therefore big price moves.

The Contempt of the Left

Progressive-Democratic Party Presidential candidate Joe Biden says it’s time to start censoring private enterprise eliminate protections for tech platforms that publish user posts [emphasis added].

“Section 230 should be revoked, immediately should be revoked, number one,” Biden said in the interview, which was published on Friday.
The law, which was enacted in 1996 as part of the Communications Decency Act, gives websites like Facebook, YouTube, and Twitter broad legal immunity—essentially, it eliminates the possibility of legal consequences over what their users post. The statute was created to protect free speech on the internet.

Biden went further:

Medicaid Block Grants

The Trump administration is planning to set up procedures for allowing States to convert the Medicaid funding they receive from the Federal government from matching funds to block grants.

The new procedures would represent a large change.

Medicaid funding is open-ended, meaning the federal government matches state spending. If that funding is converted to a block grant, a state could get a limited, lump sum of federal money instead.

There are two key differences here. One is that the funding would go from strings-attached matches to no-strings block grants. The other is that the decision to go to block grants would be each requesting State’s, resulting in less Federal control over that State’s internal affairs.

Political Parties

Joseph Sternberg, in his WSJ op-ed last Thursday, opined that the Democrats aren’t the only liberal party in collapse, averring that Great Britain’s Labour Party and Germany’s Social Democratic Party are in similar straits. He claimed early in his piece that

three of the West’s major economic powers are undergoing leadership turnover within their main center-left parties.

While the US’ and Great Britain’s leftist parties are threatened with leadership turnover (Germany’s SPD has already undergone one, and it may be continuing), Sternberg is operating under a false premise with most of his claim. Neither the US nor Great Britain have a center-left political party anymore.


Now the House Progressive-Democrats have deigned deliver their Articles of Impeachment to the Senate, and the Senate’s trial will begin in earnest (the Chief Justice of the Supreme Court has been sworn in, and the Senators have been sworn in) tomorrow right after lunch Eastern Time.  There remains speculation about whether the Senate will call additional witnesses in the course of the trial or whether the Senate should simply dismiss the case.

The matter seems clear to my august self.