Tag Archives: freedom

Germany and Eurobonds

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George Soros says that Germany must either support Eurobonds or she must leave the euro.

Given this choice, Germany should leave the eurozone.  They’ll be far better off.

Soros began his op-ed with a false premise:

The euro crisis has already transformed the European Union from a voluntary association of equal states into a creditor-debtor relationship from which there is no easy escape.

The nations of Europe were never equal states, though, and a common currency cannot make them so.  All a common currency can do is facilitate trade—which is no mean thing, but equality it cannot create.  Proceeding from a false premise, the rest of his argument has no meaning, but let’s look at some of it, anyway.

Soros thought he had identified the problem underlying the current crisis thusly [emphasis added, italics in the original]:

By creating an independent central bank, member countries have become indebted in a currency that they do not control.   At first both the authorities and market participants treated all government bonds as if they were riskless, creating a perverse incentive for banks to load up on the weaker bonds.  When the Greek crisis raised the specter of default….  [D]ebtors were treated as if they were solely responsible for their misfortunes and the structural defects of the euro remained uncorrected.

However, these questions are separate from each other.  The one is true, regardless of Soros’ negative attitude.  No one stuck a gun in any national ear and forced that country’s government into their profligate, irresponsible spending and borrowing ways, no more than, say US states—or States under the Articles of Confederation—have been forced to borrow excessively in currencies [sic] which they do not and did not control.

Moreover, the common currency did, indeed, create those perverse incentives, but it did so by pretending that the member countries actually were the equals of each other—hence the perversity: those nations were not, and are not, equal in the relevant context, in the context of their credit worthiness.  Given that inequality, the interest rates demanded by the market were widely divergent, and of course market participants loaded up on the higher-return debt: the common currency created an unsatisfiable belief that repayment by all nations actually was equally assured.

Separately, the structural defects do, indeed, remain uncorrected.

Soros then offered his solution:

If countries that abide by the EU’s new Fiscal Compact were allowed but not required to convert their entire stock of government debt into eurobonds, the positive impact would be little short of miraculous.  The danger of default would disappear, as would risk premiums.  Banks’ balance sheets would receive an immediate boost as would the heavily indebted countries’ budgets.  …  Most of the seemingly intractable problems would vanish into thin air.

No.  A miraculous disaster is all that would result.  There is no moral—or economic—reason for the taxpayers of one country to be required to indemnify the citizens of another country for that second country’s spendthrift ways—ways that those citizens actively support with their elections.  Instead, lacking incentive to correct their behavior, they simply would drag down the responsible with them.

Also, a mandatory eurobond does nothing more than substitute a common debt instrument for a common currency, with the same built-in failure: it will not make equals out of unequal nations.

Soros went on:

If a member country ran up additional debts [in his eurobond régime] it could borrow only in its own name.

And

A tighter Fiscal Compact would practically eliminate the risk of default.

The borrowing restriction, though, is supposedly the present case—and certain nations still overborrowed.  His view of the Fiscal Compact shows a breathtaking misunderstanding by so successful investor.  If there’s no risk of default, there’s no incentive to behave responsibly, no danger to borrowing excessively, at least to the borrowing nation.

He also got into a German departure from the euro.

If a referendum were held today, the supporters of a German exit would win hands down.   But…[t]hey would discover that the cost to Germany of authorizing eurobonds has been greatly exaggerated, and the cost of leaving the euro understated.

No.  The cost of participating in eurobonds has not at all been exaggerated: there is no reason at all for German taxpayers to be held liable for another nation’s fiscal irresponsibility when those German taxpayers, in Soros’ words, do not control that nation’s behavior.  The existence of such a risk means that the cost has not at all been exaggerated.

Germany would be the better off for departing the euro, if its only alternative is to accept responsibility for a share of eurobonds that are used to bail out the irresponsible without the structural changes—at a national level—that are necessary to correct the nation’s problems.  Especially since those necessary structural changes both are necessary in their own right, and their execution would eliminate the need for a common debt instrument.

In the end, as described in the first link above, the eurozone is itself founded on a false premise, and it would better function as a collection of smaller comities that honored the diversity of Europe.

Public Trust

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The Missouri State Highway Patrol has admitted that on two separate occasions it has given to federal investigators, without benefit of a court’s warrant or other order, personally identifying information concerning 163,000 Missourians who also had Missouri-sanctioned concealed weapons permits.  The claimed purpose of the federal demand was a fishing trip concerning potential Social Security benefit fraud, but only gun owners seem to have been singled out for this treatment.

Missouri law makes it illegal (at the misdemeanor level) to disclose information about concealed gun permit holders.

Governor Jay Nixon and members of his administration, in wide-eyed innocence, are insisting that there’s nothing wrong with this.  Andrea Spillars, Department of Public Safety Deputy Director had this justification:

There’s nothing in the law that prevents [a federal investigator] from getting that information in batch form[.]

It’s likely that these are honest men and women who actually believe their claim.  They just don’t understand, apparently, the distinction between “illegal” and “wrong.”

This is why we can’t trust Progressives in government.  They simply have not even the first particle of understanding of the difference between right and wrong.

More Government Intrusion

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Although the Internal Revenue Service denies that it actually does this, of course.  Documents obtained from the IRS by the ACLU pursuant to an FOIA request demonstrate that the IRS believes that it can snoop into private email without first obtaining a search warrant.  The warrant, of course, would require the IRS to convince a court both that they know with some specificity for what they’re searching and that they have probable cause for the searching.

According to a 2009 IRS employee handbook, though, the tax agency said the Fourth Amendment does not protect emails because Internet users don’t “have a reasonable expectation of privacy in such communications.”

And

…the current online version of the IRS manual says that no warrant is required for emails that are stored by an Internet storage provider for more than 180 days.

Never mind the degree of mind reading required of the IRS (and the courts) to arrive at a conclusion concerning what a private citizen has in his own mind concerning his own expectations.  This is a blatant attempt by the IRS simply to slide past our courts as if they had no existence—or relevance to the Internal Revenue Service.

On that matter of email older than 180 days, or on opened email not requiring a warrant, it seems to me that the age and opening criteria create a false dichotomy in privacy and 4th Amendment rights.

Age is wholly irrelevant.  Privacy has no expiration date.

Having opened a correspondence in no way puts that correspondence, of necessity, into the public arena.  Opening a letter and leaving it on a table next to my couch at home certainly does not, nor does leaving an email on my personal PC or laptop.  Nor does having a copy of my email on an Internet service provider’s servers, whether I’ve opened the email or not.  The ISP’s failure to manage its storage in no way causes any alteration of my privacy.

Too, in what way are providers required to turn over that which does not belong to them—they’re pipelines, not publishers or authors in this context, after all?

Finally, a question: what’s the government’s “view” on encrypted correspondence that’s been left on a provider’s server for more than 180 days?  Am I obligated by that, somehow, to give up the encryption key on government demand with no warrant extant?

Following Up On Gun Rights Abridgments

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Will some states become gun-free zones?

PTR, Inc, a Bristol, CTl-based fun manufacturer, has said it will leave Connecticut, and most of its 40 employees have agreed to move with it.  Additionally, Ammunition Storage Components, an employer of 150, and Stag Arms, with 200 employees, both of New Britain, CT, are looking at leaving the state.

Connecticut, a bit over a week ago, joined New York in passing some of the most stringent gun control laws in the US.

Hmm….

A Thought on Gun Control

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Recall that last November the 2nd Circuit upheld a New York law requiring those who want to carry handguns to show “a special need for self-protection.”

There is an underlying problem with this.  The Federal Constitution does not allow the Federal government to decide the purposes for which it will permit citizens to “keep and bear arms.”  The Constitution requires the Federal government not to infringe citizens’ right to keep and to bear, period.  There is no “except for when the government deems otherwise” caveat; the clause reads the right of the people to keep and bear Arms, shall not be infringed.

This also is clear from the authors’ understanding of the terms of relevance here: from the 10th edition of Johnson’s Dictionary we have: Infringe: 1. To violate; to break laws or contracts.  2. To destroy; to hinder.  That definition has not changed much, if at all, in the intervening more than one hundred years since the Constitution was written.

Additionally, the right to keep must mean the right to bear anywhere, else the keeping has no import.  Moreover, the right to bear is as explicitly stated in the Clause as is the right to keep, and that right has no limit on where stated, and so there is no limit.

On top of that, in A well regulated Militia, being necessary to the security of a free State, “State” refers to the constituent States of the United States, not to the United States itself.  Again, the Federal government has no say.

Finally, Heller and McDonald made explicit the extension of these 2nd Amendment clauses to the inside of the individual States—all of them.

It should be clear, then, even to a New York-based 2nd Circuit, that the government has nothing to say on the purpose a private citizen, of any State or of the United States, might have for possessing or carrying about his privately owned weapon.  Indeed, as Judge Richard Posner of the 7th Circuit notes, a citizen’s need can be acute everywhere, and with particular reference to “a special need for self-protection,” Posner had this in his opinion in Moore v. Madigan:

Twenty-first century Illinois has no hostile Indians.  But a Chicagoan is a good deal more likely to be attacked on a sidewalk in a rough neighborhood than in his apartment on the 35th floor of the Park Tower.  A woman who is being stalked or has obtained a protective order against a violent ex-husband is more vulnerable to being attacked while walking to or from her home than when inside.  She has a stronger self-defense claim to be allowed to carry a gun in public than the resident of a fancy apartment building (complete with doorman) has a claim to sleep with a loaded gun under her mattress.

It’s certainly true that some reasonable State-level (but not Federal) limits on the where might be applied.  It’s reasonable, for instance, to uphold the right of a private business owner to bar weapons from his establishment.  It’s reasonable for a State to bar private citizens’ weapons from a courtroom.  It’s reasonable for a State to bar the bearing anywhere (and so to bar the keeping) by those convicted of violent crimes.  It’s reasonable for a State to bar the bearing in public by any other citizen absent that citizen’s possession of a license demonstrating his understanding of the handling and maintenance of his weapon.

But there’s very little else that a government might do to inhibit those 2nd Amendment rights.