Tag Archives: government

Republicans, and Republicans

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[Screwed up this weekend.  Got distracted buying a car at a busy dealership and didn’t get anything up yesterday.  My apologies.]

Buried in a Howard Kurz op-ed last Thursday was this bit from Senator John McCain (R, AZ).  Kurz described McCain’s…dismay…with Senator Ted Cruz’ (R, TX) speech against funding Obamacare, then quoted McCain:

[W]e fought as hard as we could in a fair and honest manner, and we lost.

One of the reasons was because we were in the minority, and in democracies, almost always the majority governs and passes legislation….

No, John, you haven’t lost until you surrender.  You, personally, didn’t lose when you were captured by the North Vietnamese and held prisoner all those years, all those years ago.  You fought the next battle—in prison, a years-long battle—and you fought the next battles, lots of them, in your subsequent political career.

McCain, and the Republican Party generally, need to remember that example from (personal) history and fight on.  The minority party lost a battle in 2010.  That’s no excuse for surrendering the struggle now.

There’s a difference between “almost always” and “always.”  There’s a difference between courage and meekly accepting points for a good, but losing, try.

European Central Budget Authority?

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The IMF wants a central budget authority for the European Union: it wants the member nations of the EU to subordinate their sovereign budgetary duties to the demands of a “higher authority.”  However, it wants that without the federalism that must accompany such a subordination.

Worse, the IMF claims—they’re serious about this, mind you—that everything would be all right.  In answer to objections of nations like Germany, who wish to preserve their budgets and their sovereignty from the persistent demands of economically weaker nations, the IMF insists that such “risk sharing”

means that, at any point in time, countries experiencing better cyclical conditions support those at the other end of the spectrum; it does not mean the same country is always on the giving or receiving end[.]

Except, of course, that it means exactly that.  The nations rimming the Mediterranean, for instance, have entirely different concepts of the role of government in men’s lives and even of the purpose of money than have, for instance, the nations of central Europe—Germany, e.g., and Poland, whose concepts are different yet from those of England (not a member of the euro zone, to their benefit) or France (who is a member).  The risk transferors always will be the same, and those forced to accept the risk under the IMF’s scheme, also always will be the same.

The IMF says further:

A full-fledged budget at the euro-area level would allow for risk sharing both through revenues…and through spending.

Sound economies would be required, under the IMF’s scheme, to take on the risk the profligate economies are inflicting.

Unfortunately, the differences in fundamental principles make federalism across Europe a pipe dream.  The impossibility of federalism means a central budget authority can only be a disaster for the perennially stronger economies, while doing nothing at all to help the weaker.

It isn’t necessary to go any farther than that, except to note an example of the IMF’s breathtaking…naiveté.  They propose, for instance,

a “rainy day” fund that would distribute money to countries experiencing economic shocks.  The IMF says that annual contributions of 1.5%-2.5% of the euro zone’s gross national product would have been sufficient to provide…shock absorbers….

A built-in, automatic bailout fund.  No need for economic discipline by a government here.  There are other hare-brained schemes in the IMF’s…suggestions…but they’re all variations on this idea of automatic bailouts for the needy countries.

Wages of Government Controls

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…Cyprus example.  Deposits continue to shrink (read: disappear from the country) in the country’s banking system.  As the Wall Street Journal last week cited the European Commission as reporting [emphasis added],

the radical shake-up of the banking sector coupled with unprecedented restrictions on the movement of capital in and out of the tiny island have left it exposed to deep economic pitfalls.

And

Confidence in Cyprus’s banks has plunged after the bail-in of depositors, culminating in the gradual flight of deposits despite the government’s imposition of capital controls to stem the outflow[.]

Why?  Not despite the government’s controls, but because of them.  The Cypriot government

appropriate[ed] all uninsured deposits above €100,000 [$135,000] to pay for [Cyprus Popular Bank]’s resolution.  The biggest bank, Bank of Cyprus, underwent a long, deep restructuring, during which 47.5% of uninsured deposits were blocked and then converted into shares in the new bank.

Whether the depositors wanted a slice of a failing bank or not.  Whether that slice could be used to put food on a depositor’s table, or pay his rent, or not.

People found a way to get their money and get it out of the government’s reach.  And now it’s hard to find money to loan, even to a willing borrower.  Because there’s no money to lend to support business expansion, it’s hard to hire.  Because there’s no money to lend to roll existing debt, bankruptcies occur, and jobs are lost.  Because there’s no money to lend to cover the time gap between payouts due (e.g., existing debt or payroll) and money arriving (e.g., payments for goods sold), bankruptcies occur.  And so on.

Thus:

17% of the Cypriot workforce would be out of a job this year [reported the EC], up from an original projection of 15.5%, while unemployment will hit 19.6% in 2014, not 16.9% as previously thought.

The wages of government controls are lost jobs.

The Danger of Accepting Federal Money

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…made manifest.

Labor Secretary Thomas Perez…threatened to cashier federal grants for 83 local transit agencies because he claimed California’s pension reforms violate the Federal Transit Act, which requires the Labor Department to certify that “protective” arrangements are made for workers (i.e., the Teamsters) before the feds dole out dough.  Nearly $2 billion in federal funds are at stake this year alone.

And there’s this:

In July, HUD published…”Affirmatively Furthering Fair Housing” in the Federal Register…a sweeping set of land-use regulations…. The agency wants the power to dismantle local zoning so communities have what it considers the right mix of economic, racial and ethnic diversity.  A finding of discriminatory behavior, or allegations of discrimination, would no longer be necessary.  HUD will supply “nationally uniform data” of what it thinks 1,200 communities should look like.

Local governments will have to “take meaningful actions to further the goals identified.”  If they fail to comply, HUD can cut federal funding.

Of course, if the States weren’t addicted to Federal handouts, the Feds’ pushers wouldn’t be able to make such threats, much less have this control over a State’s internal affairs.

Of Gas and Men

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From historian Andrew Roberts, in The Wall Street Journal, comes this:

There is a long and honorable history of the civilized world treating those dictators who use poison gas as qualitatively different from the normal ruck of tyrants whose careers have so stained the 20th and 21st centuries.

President Obama, who talks endlessly of the importance of civilized values, must now uphold this one.

What he said.  RTWT.