Tag Archives: economics

Brexit and a Pan-European Military Establishment

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Recall the year-old EU effort with PESCO (the EU’s carefully euphemistically named Permanent Structured Cooperation), the bloc’s effort to form an EU army that would represent and act in the (sovereign) name of the European Union in defending Europe from outside incursions.  Oh, and be less dependent on us and our nuclear umbrella, our treasure, and our blood for their defense.

We’re seeing yet another example of the too-broad effort to unite all of Europe under one political flag, as this PESCO effort continues to lag.  More importantly, we’re seeing the cost to the EU of Brexit.  As Handelsblatt Today observed, the current situation is one of military failure:

The German Council on Foreign Relations (Deutsche Gesellschaft für Auswärtige Politik, DGAP) and the International Institute for Strategic Studies (IISS) recently reported that the EU at best has only a third of the resources needed for its ambitions to intervene in armed conflicts in Europe or neighboring regions, provide humanitarian aid in catastrophes, help in rebuilding programs, and to free hostages and evacuate civilians.
The EU does not have enough ships, planes, aircraft carriers, or even reconnaissance equipment to accomplish these goals, especially after the UK leaves the EU.

Notice that last.  Aside from the minor detail that the Brits will take with them half the EU’s carrier complement (France has the other one), they’re taking with them manpower, equipment, a serious (by European standards) defense budget, and a strong innovative capacity.

Prime Minister Theresa May is badly missing another strong bet in her series of missed bets as she “negotiates” Great Britain’s departure from the EU.

Trump and Powell to Meet

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Oh, the danger.  At least what Peter Nicholas and Paul Kiernan worried about in their Friday Wall Street Journal piece.  President Donald Trump might exert too much pressure on Federal Reserve Chairman Jerome Powell.

[A] sit-down could pose serious risks to the perceived independence of the Fed, according to lawmakers, former Fed officials, and longtime central bank watchers.

Maybe even fire Powell, or threaten him with that.

Most of the ones making such claims are Progressive-Democrats manufacturing a beef for the sake of having something Trumpian about which to whine.

To the extent the threats exist, those exclaiming over them are insulting Powell, saying he’s such a limp-kneed coward that he’d take such threats seriously—as though they think Powell would consider his having the job to be more important than his own integrity or the duties levied on him and the requirements levied on the Fed he leads.

…it [the meeting] could give rise to outside speculation that Mr Trump is seeking to sway Fed policy given his public objections to higher interest rates, these people added.

Of course Trump would, or I hope he would.  That’s part of his duty as this nation’s Chief Executive.  Along with every Congressman, the President has a duty to speak his piece on economic policy—including to members of the Fed’s governance—and to push for his position. Including with members of the Fed’s governance.

The Fed is a part of our government; it is not above it; it cannot require audiences to be begged for before anyone can come before it.  No one in the Fed is too holy or beyond approach.  By anyone.

Powell understands that; he’s not the Milquetoast he’s made out to be by such…concerns.  Alternatively, if he is, he should be fired.  That personal weakness would amply satisfy the “for cause” requirement for a President to fire a Fed Chairman.

The Party of Expansionist, Acquisitive Government

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That’s what we can see made plain in the incoming Congress’ House of Representatives.  Congresswoman Bonnie Watson Coleman (D, NJ) had this on her Progressive-Democratic Party’s plans:

There are dozens of measures…that have been languishing with Republicans at the helm for years, and I expect to see many of them finally come to the floor under Democratic leadership[.]

Plans like rolling back the just enacted tax cuts and preventing the individual income tax cuts from becoming permanent.  Because the Progressive-Democrats know more about how to spend our money than we do.

Plans like Medicare for all, free education for all—paid for by raising those taxes.  So much for “free.”

Guaranteed jobs, especially, “green” jobs—at the Progressive-Democrat’s mandated minimum wage because, like all workers, “green” workers are just too stupid to be trusted with freely negotiating their own compensation package.  And hired by whom?  Not so much a free economy employer; “greenery” isn’t competitive, so the Progressive-Democrats intend to centrally plan our energy economy and require greenery along with subsidizing it.  That can be expected to work as well as the Progressive-Democrats’ centrally planned health economy.

Oh, and they want to deepen the central planning on that: as part of their “Medicare for all” bit, they intend for Uncle Sugar to be sole dispenser of and sole payer for each citizen’s (and illegal alien’s) health care.

Block border security by blocking any wall and by eliminating Immigration and Customs Enforcement.  And hamstringing US Customs & Border Protection generally.

It’s going to be an ugly, wasted two years with no serious legislation coming out of the House—only the Party’s nakedly socialist claptrap.  Socialist and Government-run because, these worthies insist, the average American is inadequate to the task of his democratic duty.

Why I’m Not Worried

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I’m not Alfred E Neuman, but I do have some history on my side.  The current market situation seems ugly—and it is.  Aside from my preferred stock portfolio, I’ve gone to cash equivalents for my investments.  Here are some tables illustrating recoveries from past ugly market quarters, via Wall Street Journal‘s Market Watch column of, fittingly enough, Christmas Day.

Here we are without the Great Depression:

1932’s recovery isn’t here, but maybe that period was too high a price to pay for the recovery: 163%, 345%, these were from a severely lowered baseline.

Those are large capitalization stocks; here’s recovery for the Russell 2000, an index focused on small stocks:

For the just concluding quarter, the S&P 500 is down (so far—as of market close noonish last Monday) 17.1%.

Notice that recovery magnitude.  Things get better both economically—and politically because good economics leads to good political outcomes for the party in power.

Update: Disregard yesterday, though; that was an aberration, not anything related to the Tables’ historical predictions. Harken to the trends, not the individual incidents.

Border Wall Funding

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Senate Minority Leader Chuck Schumer (D, NY) is continuing to insist—brag, really—that there aren’t the votes in the House or the Senate for funding for a border wall.  Presently, he’s focused on the Senate:

Schumer maintained that Trump does not have the votes for a wall, at least in the Senate.

Schumer’s prior remarks might have been right about the House; the Republican caucus there has been as unfocused and undisciplined and dither-ridden as they’ve been for the last several years regarding border security.  Thursday, though, President Donald Trump injected some backbone into the caucus and sharpened its focus: he told Speaker Paul Ryan (R, WI) and other Republicans present in a mid-day meeting—in no uncertain terms—that he would veto the CR that the Senate had so cravenly passed because it had no border wall money in it.  Thursday evening, the House responded, passing 217-185 (with 8 Republicans voting with the Progressive-Democrats) an amended CR with $5.7 billion in it for a border wall.  That bill has been passed to the Senate.

However, the reason President Donald Trump doesn’t have the votes in the Senate is because Schumer actively, proudly, blocks such a thing, even as he claims the Republicans control the Senate—as though in his fantasy world 60 is less than 51 (or next year, 53).  Of course, Schumer knows better, he’s just proud of his obstructionism.  He’s also proud of his hypocrisy, having supported several more billions of dollars than just five for a border wall—the 2006 Secure Fence Act, for instance—and as recently as last January, after which he welched on an agreement that involved solutions for 1.8 million DACA people (more than the 800 thousand for whom Progressive-Democrats had been seeking help) along with a parallel $25 billion for the wall.

Prepare to greet the Schumer Shutdown redux.