Tag Archives: economics

Snapback

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The nuclear weapons deal President Barack Obama signed with Iran provided for snapback of sanctions on Iran if Iran violated the terms of the agreement. One of those terms was to abide by UN requirements. One of those requirements was to accept the UN’s embargo on arms shipments by or for Iran.

Russia has helped Iran deliver weapons into Syria twice a day over the past 10 days, western intelligence sources tell Fox News.

Those sources say Russian cargo planes transported the weapons. The planes were spotted earlier this month on the tarmac at the Russian air base in Latakia, Syria’s primary port city.

The flights are not registered….

That last puts Russia in violation of the arms embargo, also.

Yet Obama—and his ex-Secretary of State and current Democratic Party Presidential candidate—support the nuclear weapons agreement, and they both trust Russia. What is it, exactly, that has or will be snapped back?

Hmm….

Threats and Returns

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Poland, prior to the recently concluded elections, agreed under EU pressure to accept 4,500 Syrian refugees as its quota, even though the Polish people didn’t want that. The Law and Justice Party, a populist political party, was swept into power in those elections (the refugee item actually was a relatively minor factor in the PiS’ (the acronym for the Polish language name of the party) strong mandate), and they have said Poland will accept no refugees from “war-torn countries such as Syria.”

Eurogroup Chairman Jeroen Dijsselbloem is objecting.

Dijsselbloem said that Poland should show something in return for Europe’s largesse. “And if not, we could take a part of the EU’s budget that flows to countries like Poland, the Czech Republic, and Hungary in the form of subsidies….”

Here are three things Poland does show in return for Europe’s largesse:

  • a growing economy, which is more than southern European countries are showing
  • respect for national sovereignty, which is more than the Know Betters of Brussels (including the Eurogroup) are showing
  • the courage to stand up to Russian threats and outright aggression, which is more than even the powers of the EU—France and Germany—are showing.

Debt Limits

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The reason we need to raise the national debt limit is to be able to borrow to pay existing obligations. Treasury Secretary Jack Lew’s threats that he can’t won’t pay our veterans, soldiers, and retireds is nothing but politically motivated, dishonest foolishness. He can pay these; the tax revenues are plenty for that. What he won’t be able to pay are the payables to Federal contractors and a number of other bills. Those are legitimately owed, though, and they need to be paid.

There’s also plenty of money coming in to pay the interest on our national debt—so there’ll be no default, either. That’s just nonsense.

What’s unacceptable, though, is the Democrats’ refusal to go along with a debt-raise bill that includes spending cuts that will obviate the need to raise the debt ceiling next year and in the out years. President Barack Obama has even said he’ll veto a debt-raise bill that includes such preventive measures. He’s said it’s nonnegotiable.

That’s unconscionable. The Democrats’ addiction to spending—and it is an addiction—has got to be broken. If the only way to cut spending so we don’t need to increase our borrowings next year is to close the Federal government, so be it.

But the Republicans, including the right side, and their “communications” directors had better be able to sell the shutdown to the nation’s public. Democratic Whip Steny Hoyer (D, MD) said it:

[T]hey ought to all be fired[.]

Unfortunately, he wasn’t looking in a mirror when he said it.

Turn the rascals out in a year and a month.

Minimum Wage Laws

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Some empirical data are starting to accumulate. The following graphs are from AEIdeas. The first one shows the apparent impact of Seattle’s minimum wage law, which hiked the minimum to $15/hr, with the first increment to $11/hr taking effect last April. The graph shows restaurant employment in the Seattle Metropolitan Statistical Area and Washington other than the Seattle MSA from 2010 through Sept 2015.RestaurantJobs

There are a couple of things of interest here. One is the headline comparison: Restaurant jobs went up nearly 6% since January (5,800 jobs added to an original value of 87,000 jobs), while the city’s restaurant employment fell those 700 jobs (a drop a skosh under 1%). The other is the trend. Since January, restaurant jobs have risen at a high month-month rate, while Seattle’s restaurant job growth rate has been flat.

There’s another tale in this graph.RestaurantJobsRecessions

The shaded area are recessions. Only one other time since 1990 has Seattle’s restaurant employment fallen outside of a recession. That was in the year leading into the dot-com bust, with Seattle being nearly as techy as California’s Silicon Valley.

Hmm….

Stimulus

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European Central Bank President Mario Draghi has indicated that he intends to expand the EU’s version of quantitative easing as economic stimulus: he’s looking to increase the ECB’s bond-buying program and cut even further the ECB’s already negative deposit rate.

His rationale for this is to boost economic growth in the EU, a growth that has been stunted since the global Panic of 2008.

No, Mr Draghi, adding to a failed program won’t convert it to a success, it’ll compound the failure and make digging out from under it the more expensive.

What you need to do is jawbone the EU governance bodies to do what they need to do: jawbone the sovereign (more or less) EU member nations to do what they need to do. What those governments need to do is to get out of the way of their national economies by cutting government spending and commensurately reducing taxing.

Leaving the people’s money in their hands will let them apply their money to their purposes, not government’s, and they’ll do that with far greater skill than even a well-meaning government can hope to do. Reducing government competition for goods and services by cutting government spending will further expand the reach of that private money left in those private hands.

Now, there’s a stimulus worth applying.