Tag Archives: markets

EU Version of Brexit

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EU Commission President Jean-Claude Juncker says that the risk of a no-deal Brexit is very real.  He also says he told British Prime Minister Boris Johnson

…I have no emotional attachment to the backstop.  But I made clear that I do have an intimate connection to its commitments. I have asked the prime minister to make, in writing, alternatives.

The commitment of the backstop, the open border between Northern Ireland and the Republic of Ireland, which violates a central premise of the vote to leave the EU—British control of British borders—still amounts to a backdoor to partitioning Great Britain. Keep in mind that one of the EU’s early offers on this backstop was that Great Britain could put its hard border on the Irish Sea coast—an offer quickly deleted when its purpose was recognized as too obviously presented.

On top of that, Juncker has shown his unseriousness in these “negotiations” with his demand that Great Britain offer all the alternatives. Juncker has no need, apparently, to stoop so low as to offer his own.

Indeed, led by chief negotiator Michel Barnier,

EU negotiators say that he [Johnson] is yet to offer a viable replacement solution.

Because if they offered their own solution, and Great Britain accepted it, then Juncker and his court would have actually to say, “Yes,” finally.

It’s hard to see how negotiations can get more bad faith than this.  Juncker is like an emperor on the throne awaiting the pleas of his supplicant.

Continued Intransigence

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European Commission President Jean-Claude Juncker makes it clear.

Britain has still not proposed any workable alternatives to the Northern Ireland “backstop” within the Brexit withdrawal agreement, the EU said on Monday.

And

President Juncker underlined the commission’s continued willingness and openness to examine whether such proposals meet the objectives of the backstop. Such proposals have not yet been made[.]

Juncker knows full well that the “backstop” is not just a deal-breaker, it’s a non-starter for the British. It demands that a core feature of the Brexit vote three years ago was so that Great Britain gets control of its own borders back, yet the “backstop” requires Great Britain to surrender its Irish border to the EU.  That can only be taken as a first step to dismantling Great Britain.

What demonstrates the cynicism of the EU and of Juncker is that they, and he, have steadfastly refused even to offer their own “workable alternatives.”  It’s the EU’s backstop.  Full stop.

In place of counter-offers, Juncker is offering only vapid, uselessly rhetorical pretense and empty willingness to “discuss the next steps.”

He plainly wants Great Britain to drop its Brexit plans and meekly beg for forgiveness for its effrontery. Despicably, so do Labour and too many so-called Tories.

Oil Strikes and our Economy

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“Economists” cited by The Wall Street Journal say that the Iranian/Houthi strikes against a couple of major Saudi Arabian oil production facilities are unlikely to do much to our economy. Despite their anonymity, those…sources’…assessment is accurate.

Among other things, we’ve made ourselves essentially self-sufficient in oil and natural gas production, have become the world’s leading producer, and we’re a net exporter of oil and natural gas.  That last, especially, means we’ll easily be able fill any shortfall from the Saudis’ damage.  (Production cuts from that damage are likely to be short-lived in any event.)

In addition,

Today, energy accounts for about 2.5% of household consumption, down from around 8% in the 1970s

The Federal Reserve still has its misconception regarding the proper execution of its role, though:

The Saudi oil-field attack adds a new factor to consider for Federal Reserve officials, who have been weighing how a variety of geopolitical risks will influence the economic outlook, including the US-China trade war, unrest in Hong Kong, and Britain’s impending departure from the European Union.

Those things are irrelevant to the Fed’s task, which is to maintain stable pricing and full employment. The optimal way to achieve this is simply to set its benchmark interest rates at levels consistent with its inflation rate goal, and then—rather than chasing market responses to this or that “geopolitical risk,” or trying to anticipate and preempt them—sit down and be quiet.  The resulting sound economy will produce full employment.

The Fed’s inconstancy is a bigger problem for our economy than hits, even major ones, on another nation’s energy production capability.

On the other hand, the People’s Republic of China burns through three times the oil that it produces; it badly needs oil imports, much of which it got from Saudi Arabia.

Japan imports nearly all of the oil and natural gas that it consumes.  That’s a shortfall we easily can, and should, fill.

Regulatory Capture

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America’s automotive companies want ever stricter emissions standards.  Or so says Fred Krupp, President of the Environmental Defense Fund.

This, of course, is nonsense.

If car companies truly want stricter emission standards, they can do so without the cover of a government mandate.  Nothing is stopping them from setting and meeting their own stricter standards.  This is, after all, a (largely) free market economy, and it’s at the heart of a (largely) free nation.  Car companies can make their own decisions without Big Brother’s instruction.

Unless, of course, they have a different agenda.  Like, for instance, writing the regulations in a way to protect them from competition from upstart (as in impudent) companies that might have better products or better consumer appeal, or both. That’s classic regulatory capture.

Or, maybe it’s a path to writing the regulations in a way that beats the EDF climatista drum but that has little or nothing to do with producing quality, efficient, cost-effective cars that consumers actually want.

Surrendering to the Extorter

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This is what Europe is getting ready, meekly, to do.

European diplomats are getting behind a French initiative to provide Iran economic relief from US sanctions in return for its full compliance with a multinational nuclear accord….

The “initiative” centers on these articles of surrender:

preliminary agreement aimed at allowing Iran to be able to sell at least 700,000 barrels of oil a day—more than double its current exports.
It also envisions a credit line of some $15 billion so Iran could draw on hard currency….

What makes this timidity especially bad is that, even with Iran actually complying with the terms of the JCPOA, the nuclear weapons agreement expires—and then, by the terms of that same agreement, Iran will be entirely free to resume developing its nuclear weapons, with nary a peep allowed by the signatories.

And here’s an example of Iranian integrity and a demonstration of its willingness to honor the commitments it pretends to make, including its acceptance of those terms:

On Friday, an Iranian tanker was set to offload crude onto ships that would take it to Syria, breaching terms of its release following its seizure by Gibraltar….

These European diplomats, including the French ones, know all of that full well.