Tag Archives: markets

Lost Brexit?

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Great Britain’s Prime Minister, Theresa May, went begging to the EU for a delay on Great Britain’s date of departure from the EU, and she got it—31 October, with a caveat that if the Brits can get their act together sooner, they can leave sooner.

European Council President Donald Tusk:

…the call for action will be entirely in the UK’s hands.
… But he added that the UK can also use the time to “reconsider the whole Brexit strategy.”
Tusk…warned the UK: “Please do not waste this time.”

Especially with that “reconsider” bit, I’m no longer convinced Great Britain will leave the EU.  Instead, it’s increasingly likely they’ll meekly beg forgiveness, and with their humiliation plain, simply ask, wide-eyed, “Please, Sir, I want some more.”  Please, let me stay.

EU-PRC Trade Relations

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There’s a new tone in the relationship between the People’s Republic of China and the European Union. The two have agreed the following:

  • A commitment toward “broader” and “non-discriminatory” market access
  • On surrendering intellectual property to gain access to China’s market, both sides agreed “there should not be a forced transfer of technology”
  • Increase efforts to strengthen international rules against state subsidies for industries

A commitment. We’ve seen in US-PRC trade discussions over the years, in the PRC’s responses to WTO rulings—indeed its own commitments made as conditions to its accession to the WTO—in its treatment of those with whom it deals along its Belt and Road efforts, in its treatment of South China Sea rim nations the value of PRC commitments.

No forced transfer of technology.  But perhaps some encouragement.  “Nice company you got there. Be too bad if something was to happen to it.”  And not a word about required backdoors into a company’s proprietary or operating software so the PRC’s government men can come and go on the claim that those men need to ensure the company is…behaving.

Increase efforts regarding state subsidies.  The PRC will try very hard.

We’ll see if there’s more than just a change in tone.  I’m not holding my breath.  The EU, and the US, has a venerable history of credulity regarding the PRC’s rhetoric.

Regulating State Tax Incentives

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There Ought to be a Law was the title of an old Reader’s Digest humor column: every little pet peeve came in for a jokingly recommended law barring it.  Because More Government is always the solution.

Barton Swaim, in his Wall Street Journal op-ed, actually takes that seriously, and he wants to apply it to the idea of States and cities offering businesses tax incentives to get them to build in those jurisdictions.  He wants the Federal government to…regulate…what those State and local jurisdictions can do to entice businesses.

He’s even holding up the European Union as a paragon in this venue.

The European Union imposes significant restrictions on how much member states or regional governments can offer companies to entice them to expand or relocate.

This is the same EU, keep in mind, that is constantly trying to bully low-tax member nations to charge more and higher taxes, rather than encouraging high-tax member nations to lower and lessen theirs.

Never mind that, though.

Why couldn’t Congress impose a simplified version of this principle on state and local governments?

It’s true enough that many of those incentive deals the States and locals turn out to be lousy from the States’ and locals’ perspective.  Why, then, shouldn’t the Federal government dictate to the States and local governments what those bodies should do with their own citizens’ and residents’ money? For their own good, you see.  Besides, isn’t it the Federal government’s money, anyway, and not those citizens’ and residents’?

Be more like Europe, and be more infested with central diktats than we already are. Yeah, that’s the ticket.

Because, after all, States (and the local jurisdictions within them), to paraphrase John Jay, have the same relationship to the Federal government that counties have to the States: mere political jurisdictions set up to facilitate enforcement of Federal laws.

Federal republic be damned.

Sure.

Tax that Rich Man Behind the Tree

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Now the Progressive-Democrats, in their fever pitch to increase taxes, want to tax phantom profits.

Oregon Senator Ron Wyden (D) [is] reviving plans to make capital gains taxes due annually….

Another Progressive-Democrat, Jon Summers (ex-Communications Director for ex-Senator Harry Reid (D, NV)) rationalized this chimera tax this way:

We’re spending way more money, billions of dollars more, a year than what we are actually bringing in in revenue. We’ve got a debt of $22 trillion, a record debt that has only skyrocketed under this administration. So, Democrats are trying to come up with a solution to bring some sanity back[.]

No, they’re not.  They just want to tax anything they can dream up. Were they serious about trying to come up with a solution to bring some sanity, they’d look for ways to cut spending—but that’s literally inconceivable to them.

Most Americans—the vast majority of us with a sane understanding of revenue flows—know that there are no gains, capital or otherwise, unless and until the underlying asset is disposed.  Until then, any perceived change in value is nothing more than hope or dismay.

Most Americans—the vast majority of us with a sane understanding of the American sense of property—know that the asset, the unrealized gain or loss, and the eventually realized gain or loss are those of the asset owner; they’re private property.

Sadly, Wyden and his cronies don’t believe that.  They act as though the asset and the associated money is Government’s, and those men of Government only let a citizen use the things for a time.

Take It or Leave Us

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Here is one of the final steps in Brussels’ studied refusal to deal in good faith with Great Britain’s leaving the EU in all the long “negotiations.”  With the Brits’ departure now set for 12 April, the EU’s Chief Negotiator for the United Kingdom Exiting the European Union, Michel Barnier, has issued the EU’s ultimatum:

  • The possibility of a successful “meaningful vote” on the withdrawal agreement in the next few days. “The only way to avoid a no-deal Brexit is and will be through a positive majority. We should continue to make this point in the public debate,” Barnier said.
  • Leaving without an agreement should the meaningful vote fail: “No deal was never my desired or intended scenario, but the EU 27 is more prepared. It becomes day after day more likely.”
  • Requesting an extension to Article 50, should the deal fail. “Such an extension would carry significant risk for the EU,” said Barnier. “A strong justification would be needed.”

In other words, there can be no extension (which would be a foolish, if not humiliating, surrender by Great Britain, in any event) to the departure.

Barnier added, to obfuscate the nature of these “choices,”

If the UK so wish we’re ready to rework the political declaration so long as the principles of the EU are respected.

In other words, the rework will continue to require Great Britain to accede to Continental requirements rather than exercise its own national sovereignty—the purpose of the Brits’ Leave vote.

This is no choice. It’s designed solely to thoroughly denigrate Great Britain both as punishment for Leaving and as a message for other EU nations contemplating going out from the Union.