MCViewPoint

Opinion from a Libertarian ViewPoint

Posts Tagged ‘EU’

Who will salute Trump’s man in Berlin? – UnHerd

Posted by M. C. on August 14, 2020

But in some respects, Macgregor has gone even further than the president and will doubtless spell out some hard truths to the German government if he becomes the next US Ambassador to Berlin. Just last year, he called NATO a “zombie”. Even more controversial during a period of bogus “Russiagate” fanaticism, Macgregor has inconveniently reminded us that “the promises given to President Mikhail Gorbachev by President George H. W. Bush, Prime Minister Margaret Thatcher, President Francois Mitterrand, Chancellor Helmut Kohl and their foreign ministers in 1990 — not to expand NATO eastward; not to extend membership in the NATO alliance to former member states of the Warsaw Pact—were ignored.”

https://unherd.com/2020/08/how-trumps-new-hire-subverts-the-status-quo/

BY and

Two centuries ago, the British statesman John Bright warned against “following visionary phantoms in all parts of the world while your own country is becoming rotten within”.

It is symptomatic of how diseased American strategic thinking has become over the past 30 years that so few Americans in a position to influence the direction of US foreign policy would have the guts or insight to issue a similar warning today.

That cannot be said of President Trump’s nominee to become ambassador to Germany, retired US Army Colonel Douglas Macgregor. It’s a selection that sends a clear message in the run-up to the 2020 election.

Colonel Douglas Macgregor’s selection sends a clear message in the run-up to the 2020 election

Macgregor, who has previously been on the shortlists to be either US national security advisor or Undersecretary of Defense for Policy, would be that rarest of creatures in Trumpworld: an appointee actually in line with the policies the President campaigned on in 2016.

In him, Trump would at long last have a high profile advocate for foreign policy positions that arguably won him the election four years ago. Macgregor has been a staunch supporter of the President’s efforts to finally bring a real and lasting peace to the Korean peninsula. He has also long been an outspoken proponent of a worldwide US military drawdown, in particular calling for a serious rethink of the benefits of NATO. Read the rest of this entry »

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Why the EU Keeps Fighting Brexit | Mises Wire

Posted by M. C. on July 11, 2020

To put this into perspective, the UK is as rich and powerful as the nineteen weakest economies in the EU combined. This shows that although Brexit is not an easy transition for the UK, it will not be without consequences for the EU.

Although Brexit now appears to be a done deal, the EU bureaucracy may find ways to punish the UK for its independence. Moreover, the EU may use the Brexit experience as a reason to further limit the freedom of member states so as to avoid any future exit by other member states. This represents a sort of bait-and-switch for member states that were sold on membership as an opportunity to join a free trade bloc and a chance to participate in a more cooperative Europe. The reality today is something much different.

 

https://mises.org/wire/why-eu-keeps-fighting-brexit?utm_source=Mises+Institute+Subscriptions&utm_campaign=c96eb260b4-EMAIL_CAMPAIGN_2020_07_10_03_38&utm_medium=email&utm_term=0_8b52b2e1c0-c96eb260b4-228343965

The 2016 Brexit referendum was the culmination of a debate which had been ongoing for years. While the Leave promoted rhetoric targeting the EU as an illegitimate and despotic entity threatening the freedom of all British citizens, the EU institutions together with politics and media supporting the Remain disregarded most of the concerns raised by the Leave to focus on the pieces which could be easily labeled as either xenophobic or anti-European. It was difficult to find any constructive conversation about the motivations of citizens supporting the leave option. Nevertheless, listening to what the Leave said shows that behind Brexit is a complex of interconnected issues about what the EU has become and what perspectives the EU proposes for the future.

But opposition to the EU has long been about the growing power of the EU bureaucracy over the member states and their populations. During his last speech in front of the EU parliament, UK deputy Nigel Farage summarized his viewpoint by reminding them that the UK had signed an agreement to facilitate business relationships, reciprocity, and exchanges of scientific and technical expertise, all of this to foster collaborations among Europeans. Mr. Farage pointed out that the initial agreements never included the legal framework for the implementation of a bureaucracy made up of unelected technocrats interfering with affairs normally controlled by the states. He also reminded his audience what problems appear and worsen with bureaucracies designed so that a minority of individuals is granted power without accountability.

Brexit in a Nutshell: What Is (Really) at Stake

The EU’s power rests in many ways on its revenue, and this is among the reasons why the EU has so long fought a British exit.

To understand the importance of the UK’s exit from the EU, one should keep in mind that the UK is the fifth-largest economy in the world. With a population of 65 million, the UK represents around 13 percent of the EU’s population while its economy accounts for 18 percent of Europe’s GDP. This makes the UK the second-largest economy of the EU. To put this into perspective, the UK is as rich and powerful as the nineteen weakest economies in the EU combined. This shows that although Brexit is not an easy transition for the UK, it will not be without consequences for the EU.

The EU should feel the economic consequences of Brexit in three stages. In the short term, there is the loss of the British contribution to the community budget. As the contribution of member states to the EU budget is dependent on their GDP, it is understandable that behind Brexit there will be considerable financial consequences. It was sometimes said that the negotiations, from the day after the initial Brexit vote and through their interminable duration, only served to perpetuate the English contributions to the EU budget which should have otherwise been compensated mainly by Germany and France. In the medium term, both parties need to redefine agreements to ensure the continuity of trade and business relationships. Trade talks should continue until December 31, 2020, when it will be known whether the transition period has allowed the two sides to establish strong points of convergence. Finally, in the longer term, the UK having freed itself from all European regulations, there is a good chance of seeing there develop an economic and social model competing with that advocated and imposed by the EU on its members. The UK will be free to conclude trade agreements with new partners and could reach an advantageous agreement with an EU that cannot do without either the British market or its army, whereas with the withdrawal of the British, the military expenditure of Europe is cut by 21 percent.

EU Destiny: From Fostering Collaboration to Empowering a New Form of Continental Statism

In any case, the regulatory power of the EU has grown over time.

Until the Maastricht treaty of 1992, the European Economic Community applied the principle of subsidiarity by confining itself to its areas of exclusive competence. The exclusive powers of the union were the Customs Union; the establishment of the competition rules necessary for the functioning of the internal market; monetary policy for member states whose currency is the euro; the conservation of marine biological resources within the framework of the common fisheries policy; common commercial policy; and the conclusion of international agreements. In terms of barriers to trade, the EU has been beneficial when it has put an end to customs barriers and to repeated devaluations which were a means for companies to avoid the need to make productivity gains. European integration, as it took place up to and including the Single European Act of 1986 (which preceded the 1992 treaty), has made European economies more modern and more competitive.

The EU in its current form is different in the sense that it has “shared competences” with the member states, “competences to support, coordinate or supplement the action of the Member States,” and, finally, “competences to take measures to ensure that member states coordinate their policies.” To the Europe of free trade was added the Europe of standards, regulations, and lobbying. There is no longer any principle of subsidiarity, and the EU can interfere in fields such as culture or social policies. With the extension of its prerogatives, the EU has turned into a bureaucratic organization whose institutional bodies continuously centralize powers. The EU pushes to reduce economic and societal disparities among its members, and this induces conflicting relationships between some European countries and European institutions. The UK often dissented within the EU and argued against EU policies while requesting exemptions. During the debates at the EU parliament, one deputy claimed that the Brexit started when the EU granted exceptions and that it was this that impaired integration under a homogeneous regulatory scheme. Far from questioning this quest for homogenization of the EU political and economic spaces, he asserted that the solution for avoiding such catastrophes was to ensure that no similar treatment would ever be granted in the future.

There remain many defenders of EU institutions, which are seen as guardians of “continental stability.” It is also argued that the EU is a powerful tool that constitutes a system of balances to protect individual rights against encroachment by member states. For the proponents of minimum governance, it would be preferable to decrease the government power at the national level rather than adding a layer of institutions acting at the continental level. The EU might look like a protective entity, but centralized structures are never politically neutral and are not exempt from regulatory overreach or abuses of power. Over time they tend to distance themselves from the viewpoint of the citizens. Technocrats working from within become convinced that they know better and that this justifies intrusions and interference in the business of others.

Although Brexit now appears to be a done deal, the EU bureaucracy may find ways to punish the UK for its independence. Moreover, the EU may use the Brexit experience as a reason to further limit the freedom of member states so as to avoid any future exit by other member states. This represents a sort of bait-and-switch for member states that were sold on membership as an opportunity to join a free trade bloc and a chance to participate in a more cooperative Europe. The reality today is something much different.

 

 

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The Things You CANNOT Say About Coronavirus

Posted by M. C. on April 6, 2020

This is a very bad situation but…

don’t take any statistics at face value. It will take months or maybe years before anything close to accuracy is available.

Consider that Italy is bankrupt and the EU periodically threatens to shut off the euros if Italy doesn’t do as is told.

The more casualties the more the euros and free stuff will flow.

Sad to say, there is money to be made…and not just in Italy.

and…if you don’t know many caught C and didn’t go to the doctor because of mild or no symptoms, you DO NOT KNOW rates.

https://off-guardian.org/2020/04/03/the-things-you-cannot-say-about-coronavirus/

James Corbett

…But there’s some problems with those numbers. As Prof Walter Ricciardi—scientific adviser to Italy’s minister of health—recently revealed, “The way in which we code deaths in our country is very generous in the sense that all the people who die in hospitals with the coronavirus are deemed to be dying of the coronavirus.”

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Social Engineering - Lamar University

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Who’s Next to Fail in the Post-COVID World?

Posted by M. C. on April 1, 2020

Europe’s troubles are multiplying because the basic premise of how to fight this virus and the deflation it is engendering is functionally flawed. More money dropped from helicopters isn’t the solution.

Freeing Europe from the euro is.

And then there won’t be enough credit in the world to keep the engine of the world from sputtering and dying. That’s when real leadership is needed.

https://tomluongo.me/2020/03/30/whos-next-engine-world-failure/

As much as I hate to invoke The Ayn Rand lest I give off the impression I’m some kind of Objectivist, which I am most certainly not, the engine of the world is coming to a halt.

Money velocity has been falling for years. It is now cratering as we hide in our homes from a bug that eventually we will all have to reconcile with. Credit is the engine of the world of today.

It is the gas which fuels the engine of the world.

COVID-19 has cratered the global economy exposing the internal rot within our hyper-financialized global economy as nothing more than a pyramid of Ponzi schemes…

… piling credit on top of credit until there are no more greater fools to sell the new debt to.

That’s the system we have. And it is collapsing precisely because the world is situated at the point where there is little more productive capacity to monetize and pull that capital from the future to fund the new debt.

It won’t matter if we replace this system with pure helicopter money without debt as the Modern Monetary Theory proponents argue. We’re already doing a version of this by having the central banks buy debt they never intend to sell on the open market. So, the debt itself is without value. The money printed from those bonds is as much scrip as if the bond had never been issued.

But the time lost by people in pursuit of uneconomic ends by mispricing risk and servicing debt they are legally obligated to service is real.

The engine is sputtering as trillions are printed to kick it back over one more time. But the gas has too much ethanol in it. There’s not enough air.

The engine is dying.

And it can no longer outrun the abyss swallowing the world staring back at us saying, “Thanks for the snack, those frackers and restaurants are tasty, but I’m still hungry. Who’s next?”

I’ve been very clear that Europe is the next big meal for the Abyss.

In the end, a home builder here, an over-leveraged bank there are nice. These are but apéritifs in the grand scheme of things. They are like sugar to a starving child, revving it up but not fulfilling its real needs.

Europe’s troubles are multiplying because the basic premise of how to fight this virus and the deflation it is engendering is functionally flawed. More money dropped from helicopters isn’t the solution.

Freeing Europe from the euro is.

And it will set Italy in the post-COVID-19 world at odds completely with the rest of Europe.

Ambrose Evans-Pritchard adds more color to what happened at last week’s meeting of EU national leaders in which both sides of the fiscal divide dug in their heels.

Dutch premier Mark Rutte has become the spokesman for the hardliners – giving political cover to Germany – categorically ruling out emergency “coronabonds” or other forms of debt mutualisation. “It would bring the eurozone into a different realm. You would cross the Rubicon into a eurozone that is more of a transfer union,” he said. “We are against it, but it’s not just us, and I cannot foresee any circumstances in which we would change that position.”

Enrico Letta, Italy’s former-premier and an ardent EU integrationist, accused the Netherlands of leading the pack of “irresponsibles” and trying to “replace the United Kingdom in the role of ‘Doctor No’”. The reflexive use of the UK as a rhetorical foil evades of the true issue. It was not London that blocked moves to fiscal union over the last decade; it was Germany.

Pritchard brings up the spectre of Lega’s Matteo Salvini coming back into the picture, especially as the mood sours among even the most ardent Euro-integrationists like Italian President Sergio Mattarella.

Merkel is hiding behind her quarantine and letting Dutch Prime Minister Mark Rutte speak for her. And that is driving the Italians to the point of no return.

Giuseppe Conte’s government is at a loss to fight the virus. It was ignored by the EU when it asked for help it paid for when this began. As Pritchard points out, what purpose does the EU serve when it won’t act to help a member in need as it is supposed to do?

The answer is the EU’s purpose is to be obeyed.

Italy’s two ways out of this mess is leaving the euro or forcing the northern bloc to cry uncle. But that has to occur within the prospect of removing so many internal roadblocks to Italian economic growth, starting with the euro but entailing much wider reforms, which are most definitely not on the post-Keynesian/MMT technocrats’ agenda.

Italy’s debt numbers are a large part of the hunger of the Abyss and no amount of blackmail by them and France will get Germany to go along with bailing them out.

I discussed these issues and more at length with Alexander Mercouris of The Duran in this series of videos we recorded over the weekend (here, here, and here) in which we tie Europe’s collapse to all the other things we’re experiencing in the world right now.

Most EU economies are fundamentally hampered by the ossified bureaucracy of the EU which is an over-layer of domestic bureaucracies.

And, as such, these national systems are barely capable of acting in a coordinated manner normally, no less with the EU enforcing its fiefdoms at the same time in the face of overwhelming strain.

In all situations the primary objective of all organizations is survival. All else is secondary.

The more credible the threat the more extreme their response.

They will dig in to protect against that threat rather then fulfill their stated mission. In the case of the EU that means using this crisis as the excuse to force fiscal integration and monetary reform on those that don’t want it as a means to survive.

Because in a crisis period there is no time for such luxuries as national sovereignty. There isn’t any reflection that the organization itself is the source of the problem. The organization is a default setting.

And now both sides of the fiscal debate are seeing the other for what they are and the result will most likely be an irreparable fracturing of the European Union.

Italy has now seen the true face of the EU. Conte has now tried histrionics to get his bailout, which won’t actually solve anything, because he’s aligned with the Euro-integrationists. What his country needs is a new currency and different leadership.

But he’s held onto power because his opposition would have already broken with the EU.

Like the obsequious worm that he is, instead of doing the right thing, issuing mini-BOTs, to free up domestic liquidity issues, Conte is looking at putting up the whole of the Italian government’s holdings as collateral against new debt to pay for stimulus of Einsteinian proportions.

This is the ultimate sellout of Italy to the EU. As a proposal it is the ultimate betrayal of the Italian people. These buildings and infrastructure are their legacy and they will be sold as collateral to loan sharks as opposed to reclaiming their national dignity.

There is no market for these bonds. So,who will buy them? The ECB.

Who then owns all of this property, ultimately?

The ECB and therefore the EU.

This is a proposal designed for Merkel to take back to home to the Bundestag and sell to the German people. If they bail out Italy, they will get something in return for their risk.

It’ll be just like they did with Greece in 2015, except then it was Germany forcing this upon them rather than the satrap Italian government offering themselves up like lambs.

But even with this desperation attempt to find buyers for their debt, Italy is facing a bleak future without serious reform.

And the odds are about equal at this point as to whether Germany or Italy breaks the EU. Because neither side can live with the other under the other’s terms.

At it’s core, however, this fight is a symbolic one over the continued belief that government can provide the solutions to our problems rather than being the source of them in the first place.

Socialized markets with bureaucratic controls are incapable of reacting in real time to swiftly changing conditions. No amount of helicopter money will change that. No amount of taxation as social engineering tool will create preferred outcomes.

Because remember when you advocate for things like that, you’re putting in charge of those taxes the same people who are mismanaging them now. Our governments aren’t staffed and run by angels. These are the same misinformed, mal-educated, biased, myopic, flawed people as everyone else.

In short, they are human.

And they have the same pretense to knowledge everyone else does. And they will make the same mistakes as everyone else. Under the pressure of outrunning the Abyss the character of the people in charge of the money reveals itself.

All that does is create the false signal of stability while perpetuating systems that are wholly inadequate to the job. COVID-19 has exposed them ruthlessly.

And still the Abyss stares back, like an implacable kidnapper, demanding its payday. Because there is no escaping the it.

So, while you can chuck funny money in there for as long as you want it doesn’t create value. It doesn’t produce sustainable outcomes. It produces theft and graft, it extends the grift, bails out the unproductive and punishes those that honestly went about their business.

Digging holes and filling them in doesn’t produce wealth anymore than breaking a window stimulates aggregate demand for glass.

It just creates an accounting fiction which costs twice as much as having not dug the hole or broken the window in the first place. It may delay the Abyss from swallowing you until tomorrow.

Until, of course, you run out of time.

And then there won’t be enough credit in the world to keep the engine of the world from sputtering and dying. That’s when real leadership is needed.

Be seeing you

 

 

 

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Russia and China Assist European Nations – LewRockwell

Posted by M. C. on March 26, 2020

US/NATO bombs Serbia, EU ignores it, Russia and China save it.

https://www.lewrockwell.com/2020/03/yvonne-lorenzo/russia-and-china-assist-european-nations/

By

Lew Rockwell recently in his powerful “War on China?” wrote that “People are understandably upset about the coronavirus epidemic, but if we’re not careful, an even greater danger lies ahead. Sinister forces in American political life are using the crisis to incite war with China and to stir up bad feelings towards the Chinese people. The Chinese people are in fact heroic. They are our friends, not our enemies. But the forces of evil want you to think otherwise.”

I don’t know if Washington would consider or China would be interested in providing medical protective gear and respirators to America, given recent statements by President Trump and Secretary of State Pompeo. But even if the Chinese government is “authoritarian,” certainly, as I and others have written recently, America too has an authoritarian bent as well.

As is documented both on China’s CGTN channel on YouTube, and on RT, both nations are helping, especially in the case of Serbia whose request for EU aid was refused. Today, as I write these words, is the anniversary of the NATO bombing campaign on Serbia. From the article:

“Twenty-one years ago, NATO, without obtaining permission to intervene from the United Nations, launched armed aggression against Serbia, thus crudely violating the UN Declaration, the Helsinki Accords, a number of other international conventions and its own act on the creation of NATO of 1949,” the statement runs. “It has been and will remain a crime against peace and humanity. The act of aggression, committed in alliance with the terrorist Kosovo Liberation Army, left an estimated 3,500-4,000 people dead and 12,500 others injured and caused tremendous economic damage. The use of depleted uranium rounds and other prohibited weapons was a long-term hazard to the people and the environment. NATO turned itself into an aggressive, interventionist alliance with an outspokenly expansionist policy targeting the East first and foremost.”

Therefore, I am not surprised that the EU refused Serbia’s request for assistance and China has been a major help, as these videos from CGTN show. This video posted on March 16th.

Serbia’s state of emergency: ‘China is the only country that can help’

This video also posted:

Serbian landmarks lit up red to salute China

“A number of landmarks in the Serbian capital were lit up in red on March 21 and 22 as a tribute to China. The local government used this gesture to thank the Chinese government for providing medical assistance and to pay tribute to the Chinese medical expert group.”

And this video was posted as well:

“Serbian president kisses Chinese national flag as support team arrives.”

“Serbian President Aleksandar Vucic greeted Chinese medics who arrived in Serbia on Saturday. He kissed the Chinese national flag in a show of gratitude for China’s timely support against the COVID-19 outbreak. Read the rest of this entry »

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In the Pandemic, It’s Every Nation for Itself – LewRockwell

Posted by M. C. on March 18, 2020

But what governments in Europe are saying by closing their borders, what Americans are saying by banning travel from Europe, is that while all men may be created equal, we will always put our own people first, ahead of the rest.

When a crisis comes, be it a war in which the survival of the nation is at stake or an epidemic where the health and survival of our people is at stake, we take care of our own first.

This is human nature. This is the way the world works.

https://www.lewrockwell.com/2020/03/patrick-j-buchanan/in-the-pandemic-its-every-nation-for-itself/

By

“The lamps are going out all over Europe, we shall not see them lit again in our life-time,” said Foreign Secretary Sir Edward Grey to a friend on the eve of Britain’s entry into the First World War.

Observing from afar as the coronavirus pandemic ravages the Old Continent, Grey’s words return to mind. And as the Great War changed Europe forever, the COVID-19 pandemic seems to be changing the way European peoples see each other.

“All for one and one for all!” These were the words by which “The Three Musketeers” of Alexandre Dumas lived their lives.

This was the ideal upon which the EU and NATO were built. An attack against one is an attack against all. The Schengen Agreement by which citizens of Europe are as free to travel through the countries of their continent as Americans are to travel from Maryland to Virginia is rooted in that ideal.

Yet, suddenly, all that seems to belong to yesterday.

How the EU’s nation-states are reacting to the coronavirus crisis brings to mind another phrase, a French phrase, “Sauve qui peut,” a rough translation of which is, “Every man for himself.”

The New York Times has written of the new reality. In Sunday’s top story, “Europe Locks Up and Faces Crisis as Virus Spread,” the Times wrote:

“While some European leaders, like President Emmanuel Macron of France, have called for intensifying cooperation across nations, others are trying to close their countries off.

“From Denmark to Slovakia, governments went into aggressive virus-fighting mode with border closings.”

Describing a host of countries heeding the call of tribalism and nationalism, the Times laments Monday:

“Today, Europeans are… erecting borders between countries, inside their cities and neighborhoods, around their homes — to protect themselves from their neighbors, even from their own grandchildren.”

“Confronting a virus that knows no borders, this modern Europe without borders is building them everywhere.”

In a few days, the Europe of open borders has become history.

“As the pandemic spreads from Italy to Spain, France, Germany,” reports the Times, “there is a growing sense of the need for harsh, even authoritarian methods, many of them taken from China.

“Europe has been terrified by Italy. Suddenly, many of the continent’s countries are trying to lock down, to protect themselves and their citizens. The idea of European solidarity, and of a borderless Europe where citizens are free to travel and work, seems very far away.”

Italy, hardest-hit country after China, is on lockdown. Germany is closing its borders with Austria, Denmark, France, Luxembourg and Switzerland. The Czech Republic, Cyprus, Denmark, Latvia, Lithuania, Poland and Slovakia have announced they will close borders to all foreigners. President Donald Trump has expanded his travel ban on Europe to include two of America’s oldest friends, Britain and Ireland.

Slovenia has closed its border with Italy. Norway is on lockdown. International travelers who arrive in Norway risk a mandatory 14-day quarantine, regardless of their health.

Prime Minister Justin Trudeau has announced that Canada is barring entry to all travelers who are not citizens or permanent residents. The only exceptions are air crews, diplomats, and, “at this time,” U.S. citizens.

What we are witnessing is the clash of the claims of human nature and of ideology.

Through history, most men have put attachments of family, tribe, faith, country, race and nation above the claims of liberal ideology.

But while all citizens may have the same God-given right to life and constitutional right to “equal protection of the laws,” all people do not have equal rights to our affections or concerns.

For most men, the claims of the heart are superior to those of the mind. Foreign folks do not have the same claims upon us as our own. In a crisis, people put families, friends and country first.

In the Declaration of Independence, Jefferson declares that, “all men are created equal.” Yet, what truly seems to enrage him and to justify the rebellion against George III are the crimes the king had committed and that he had been “deaf to the voice of justice and of consanguinity.”

The king had violated the claims of our common blood while we Americans had not been “wanting in attentions to our British brethren.”

Closing borders is a grievous offense against liberalism that is supposedly rooted in the sin of xenophobia. But what governments in Europe are saying by closing their borders, what Americans are saying by banning travel from Europe, is that while all men may be created equal, we will always put our own people first, ahead of the rest.

When a crisis comes, be it a war in which the survival of the nation is at stake or an epidemic where the health and survival of our people is at stake, we take care of our own first.

This is human nature. This is the way the world works.

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The EU’s Latest Screw-You to the UK Shows a Big Problem with Trade Agreements | Mises Wire

Posted by M. C. on February 29, 2020

Let me translate that for you: European politicians are concerned
there might be too much freedom in the UK after Brexit is finished.
Brussels fears producers in the UK might use that freedom to produce
goods and services that will be more affordable to European consumers.

Thus, the EU’s negotiators want to force British producers to labor
under all the same entrepreneurship-crushing and innovation-destroying
regulations that Europeans now must endure.

Should they refuse, the EU plans to hike tariffs or employ other trade-blocking sanctions.

A free trade agreement longer than one page is not “free” and is benefiting someone that’s not you.

https://mises.org/wire/eus-latest-screw-you-uk-shows-big-problem-trade-agreements?utm_source=Mises+Institute+Subscriptions&utm_campaign=323a87f091-EMAIL_CAMPAIGN_2019_12_31_06_15_COPY_01&utm_medium=email&utm_term=0_8b52b2e1c0-323a87f091-228343965

All too often, discussion over trade deals focuses almost solely on tariffs.

It’s true that tariffs—i.e., taxes—are always a significant barrier to free exchange at all levels, but there are also plenty of ways to block or lessen trade that are not primarily tariff-based. Recent conflicts over the pending negotiations between the UK and the EU are a reminder of this.

For instance, The Guardian reported yesterday “The EU will demand the right to punish Britain if the government fails to shadow the Brussels rule book in the future….The bloc will demand that the British government apply EU state aid rules in their entirety as they evolve.”

Specifically, EU countries—especially France—want to make sure

that Britain must comply with strict “level playing field” provisions to ensure that the UK does not undercut the EU on issues like the environment, state aid and workers’ rights.

Let me translate that for you: European politicians are concerned there might be too much freedom in the UK after Brexit is finished. Brussels fears producers in the UK might use that freedom to produce goods and services that will be more affordable to European consumers.

Thus, the EU’s negotiators want to force British producers to labor under all the same entrepreneurship-crushing and innovation-destroying regulations that Europeans now must endure.

Should they refuse, the EU plans to hike tariffs or employ other trade-blocking sanctions.

The Creation of a Global Trade Bureaucracy

This isn’t to say that the EU is the only state or quasi state guilty of working to limit trade while also claiming to be expanding it.

The United States-Mexico-Canada Agreement (USMCA, the successor to NAFTA) features the use of government regulations to manage trade and limit foreign freedoms that might be used to “undercut” other countries.

As with NAFTA, under the USMCA Mexico can’t export goods to the United States unless those producers are subject to new labor laws demanded by US negotiators. Mexican firms must also adhere to US-approved environmental regulations and to intellectual property laws that extend corporate monopolies (mostly patents) into ever longer time periods.

And, of course, Mexico must conform to “country of origin” rules designed to ensure that other countries aren’t using Mexico as a pass-through for their goods.

What if Mexico doesn’t comply? Well, then tariffs go up, thus illustrating that the agreement was never really about free trade in the first place.

After all, under both the USMCA and the EU agreements, enforcement of all these regulatory provisions requires a whole host of bureaucratic agencies designed to monitor and regulate trade so as to ensure compliance.

When your “free trade” agreement depends heavily on thousands of pages of rules and regulations, then somebody has to check to make sure “40 to 45 percent of automobile parts must be made by workers who earn at least $16 an hour,” or that 75 percent of a manufactured good’s components come from an approved location. There must be inspections, reports, audits—and when necessary—judicial-type proceedings designed to determine guilt and punishment.

We should also expect these requirements, regulations, and mandates to get worse over time. Ever since NAFTA was inked, there have been complaints that the agreement did not impose enough new requirements on the Mexicans to suit the desires of environmentalists and labor union advocates. And, of course, huge corporations are always demanding ever-more-exploitive intellectual property rules. We should not expect those demands to go away with the USMCA.

Meanwhile, Europe isn’t exactly in any danger of liberalizing its regulatory regime. If the past decade is any indication, the next ten years will bring a host of new regulations. Through it all, the EU is now telling us the British will be expected to “keep up” or “harmonize” its own laws with those of the EU. Otherwise, Britain will be accused of abusing the system by providing a means for employers and producers to avoid some regulations but still get access to the EU trading bloc.

Poor Countries Often Get the Worst of It

But at least the UK is already a rich country. In the case of Mexico, as with other developing countries, these nontariff trade barriers “may erode the competitive advantage that developing countries have in terms of labour costs and preferential access.”1

Yes, poor countries can offer cheap labor to bring down costs of producing goods. But when exporting those goods requires jumping a host of regulatory burdens, costs can quickly climb again. Moreover, these regulatory requirements can be stacked on top of each other. Under EU rules, for example, a trading partner in Africa might need to meet “sanitary” requirements around food quality while also meeting labor requirements and quality control mandates on manufactured goods. In many cases, these requirements are difficult to meet because producers in poorer nations lack the expertise and capital to achieve compliance at a level far above what the market itself demands.

For this reason, “tariff liberalization alone has generally proven unsuccessful in providing genuine market access [and] has drawn further attention to non-tariff measures (NTMs) as major determinants in restricting market access.”2

Nor are these “regulatory harmonization” efforts the only sort of nontariff barriers at work. According to this 2017 study,3 these can include domestic subsidies designed to make domestically produced goods more competitive than foreign ones. Other nontariff barriers include straight-up quotas on foreign goods and laws requiring governments procure goods and services only from domestic firms. Given the size of the public sector in many countries—including the US, which heavily employs this type of trade barrier—those kinds of provisions have a sizable impact on international trade.4

Global non-tariff barriers, 2009-2016:

ntb
Source: Erdal Yalcin, Gabriel Felbermayr, Luisa Kinzius, Hidden Protectionism: Non-Tariff Barriers and Implications for International Trade (Munich: Liebniz Institute for Economic Research, 2017), p. 8.​

Of all of these, though, it may be the use of regulatory mandates as a trade barrier that is the most insidious. By requiring trade partners to expand their own regulatory states so as to “harmonize” their legal environments with those of trading partners, trade agreements actually expand the power and jurisdictions of bureaucratic regimes.

Trade Bureaucracy Destroys Innovation and Entrepreneurship in Rich and Poor Countries Alike

Like all trade barriers, this may be a net win for certain interest groups within the country where the state is pressing for greater regulatory mandates. But these measures also cut out much of the benefit of expanded international trade for entrepreneurs and consumers.

For example, imagine a small chain of US restaurants discovers a new much more affordable source of avocados in El Salvador. The restaurant chain then begins to demand more avocados than it could afford to buy before. Farmers in El Salvador start to hire more workers to harvest the avocados and ship them north. The American restaurants then hire more truckers to deliver the avocados and more waiters to serve their customers.

But then it turns out that the El Salvador farmers aren’t paying the workers the wage mandated in the trade agreement between the US and El Salvador. US trade negotiators then demand that the farm owners pay higher wages or submit to a 20 percent tariff. As a result, El Salvador workers are laid off and become once again unemployed. Meanwhile in the US the restaurant chain must scale back its operations and close stores as a result of rising food costs. Had there been real free trade, of course, the workers, the restaurant owners, and the diners would have all been free to produce avocados in a way that everyone could agree on. But then regulators got involved and imposed regulations to make sure Salvadoran workers and farmers weren’t “undercutting” US workers and farmers. The enforcement of these provisions might be a win for certain American farmers and labor unions. But it’s a loss for everyone else.

So much for “free trade.”

Here we see again the dark side of economic integration: what was billed as a lowering of taxes, barriers, and “transaction costs” was in many ways just an expansion of the state’s jurisdiction. We are witnessing something very similar in the Brexit negotiations. The UK is angling for an agreement to facilitate trade, but in the end it may just end up increasing Brussels’s power over British consumers.

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Brexit: Why the Threat of High Tariffs Wasn’t Enough To Stop It | Mises Wire

Posted by M. C. on February 6, 2020

But much of the concern over EU membership has focused on issues that are hard to quantify, such as government regulations and lost opportunities. How exactly does one quantify a new regulation on British businesses handed down by EU bureaucrats? An individual business might be able to hazard a guess, but aggregate data is far less reliable and far less available.

Even harder to count is the opportunity cost of EU membership. As noted by EU critics, for example, membership in the EU has limited the ability of the UK to expand trade outside the EU bloc. There’s no way to put a number on how much these lost opportunities have cost British households. Certainly some researchers have tried. But we end up debating the accuracy and relevance of the research. Ultimately, it all requires a judgment call as to whether or not EU membership is “worth it” to a specific person.

When government tells you something, start wondering what it doesn’t tell you.

https://mises.org/wire/brexit-why-threat-high-tariffs-wasnt-enough-stop-it

Chris Johns at the Irish Times is dismayed by all the support he sees for Brexit. He’s vexed by the fact so many of Brexit’s boosters are — in Johns’s eyes—going against their own economic interests.

Johns notes, for example, that Brexit may take a significant toll on British manufacturing, and may be problematic for income growth and tax revenues. Resigned to Brexit as a fact, Johns suggests trying to make the transition as painless as possible, but insists, “Britain will either be poorer or much poorer.” But it’s too late the avert at least some damage. Thus, the narrative goes something like this: “we tried to warn you people about the dangers of Brexit to your pocketbook. But you went ahead and supported it anyway. So now you’re worse off.”

Johns’s is missing a big part of the economic argument made by Brexit supporters.  At the moment, even the economic data suggests the British are better off today, but the Brexit gambit for many has always been one in which supporters calculate political independence will bring long-term economic gains, even if there are problems in the short term.  This hardly proves supporters are acting against their own economic interests, or that they don’t understand economic realities. It simply shows their predictions of the future are different from Johns’s.

[RELATED: “Brexit: Predictions of Economic Doom Show Why People Ignore ‘Experts’” by Ryan McMaken]

But Johns’s misunderstanding is bigger even than this.  A big part of why he assumes people will soon be worse off thanks to Brexit is because he is too limited in how he understands the process of calculating costs and benefits. Once we move beyond “homo economicus” notions of benefits being limited to monetary gains, we realize the benefits of Brexit can be found in ways that aren’t tracked by any government office, and don’t show up in any statistical data.   Economists and pundits who limit their calculations to measurable statistics are missing a big chunk of how humans measure and value the world around them.

We Can’t Put a Number on the Opportunity Cost of EU Membership

Government statistics have been devised to keep track of identifiable and countable events and dollar amounts. This is why numbers such as “unemployment rates” and “median incomes” form the backbone of government stats. They can be identified and counted with relative ease based on survey data or direct observation. But these numbers are hardly comprehensive in measuring the real world.

[RELATED: “The Homo Economicus Straw Man” by Ryan McMaken]

But much of the concern over EU membership has focused on issues that are hard to quantify, such as government regulations and lost opportunities. How exactly does one quantify a new regulation on British businesses handed down by EU bureaucrats? An individual business might be able to hazard a guess, but aggregate data is far less reliable and far less available.

Even harder to count is the opportunity cost of EU membership. As noted by EU critics, for example, membership in the EU has limited the ability of the UK to expand trade outside the EU bloc. There’s no way to put a number on how much these lost opportunities have cost British households. Certainly some researchers have tried. But we end up debating the accuracy and relevance of the research. Ultimately, it all requires a judgment call as to whether or not EU membership is “worth it” to a specific person.

The “Psychic Profit” of Leaving the EU

Other things are even harder to quantify than lost opportunities. These are what many voters perceive as the intangible benefits of leaving the EU.

For example, a pro-Brexit voter might argue that British laws should be decided in Britain—even if this means paying higher tariffs. Thus: political independence is more valuable than selling goods to France at a lower tariff rate. Obviously, there’s no way to determine exactly how much benefit “political independence” produces for a person who values it. But the value is real.

We’re now in the realm of “psychic profit,” which is the profit that a person perceives in his own mind from a certain action or state of affairs. The problem with psychic profits is that they are not quantifiable as money profits are. As economist Ludwig von Mises noted, at a fundamental level, profits and lossses are “psychic qualities and not reducible to any interpersonal description in quantitative terms.” Moreover, Mises notes that the “psychic phenomena” from which these valuations derive involve “incalculable intensive magnitudes.” Even if a person values Brexit more than low-tariff trade, it’s impossible to put a number on how much more.

A similar accounting problem arises with the immigration issue. Some voters support Brexit because they suspect or hope that it will reduce immigration. In this case, some have concluded that their psychic profits are improved by being surrounded by people of similar language and culture.

Faced with the idea that greater controls on migrant labor could push up the cost of living, some may nonetheless conclude the psychic loss resulting from immigration outweighs the monetary benefits of low-cost labor at the supermarket.

All of this should illustrate that when we’re talking about a voter’s decision to support a certain policy, we’re not exactly employing an exact science. By supporting policies that might ultimately lead to higher prices or higher foreign tariffs, one is not necessarily falling victim to economic illiteracy. One is simply taking a position that, in one’s mind, something that can’t be measured in pounds is more valuable than something that can be measured in pounds. There is a rational—and possibly well-informed—process of calculation going on here. It’s just a calculation that’s impossible to quantify.

Some economists find this sort of thing quite irksome, however. Johns, for instance, bemoans the fact that the “culture war” behind Brexit has led to ” the economy tak[ing] acceptable collateral damage.” He apparently means that voters have abandoned what he considers to be sound economic thinking in favor of “benefits” that can’t be counted in any ledger.  In the minds of pundits like Johns, people are “irrational” if they chose a policy that might reduce their incomes as measured in dollars or pounds.

The Real Problem: Majorities Forcing Policies on Minorities

Brexit critics like Johns would do well to admit their adversaries aren’t necessary irrational economic illiterates. But even if we all agree different people calculate economic benefit in their own non-measurable ways, we haven’t solved our political problems.

Policies like Brexit will always be problems so long as people who make very different value judgments are forced to live under a common government.  We have a problem because the democratic majority can impose a preferred policy on the losing minority.

In the case of Brexit, for example, nearly half the population appears to be either indifferent to membership in the EU or actively in support of it. And just as statistical economic data can’t tell us whether or not pro-Brexit supporters are “right,” it can’t make a judgment about EU supporters. Many EU advocates simply like the fact the EU hands down lots of environmental regulations to all member states. Supporters may like that EU membership (presumably) increases total immigration for reasons totally unrelated to economic factors. Some feel they benefit emotionally from a politically united Europe.

But this doesn’t mean that this minority of voters ought to be forced into leaving the EU because 51 percent of the population says so.

The ideology underlying democracy offers no answer to this. We have a situation in which about half of the population believes that it profits (psychically or otherwise) from one policy. But about half of the population believes it profits from the opposite policy. This problem becomes even worse when reduced to a regional level. An outright majority of residents in Scotland, for example, apparently opposes Brexit. Now that Brexit is a reality, a slim majority of Scots support independence. It would seem to violate basic notions of justice to insist that Scotland be held to the dictates of the English majority forever.

Scottish Separatists Are Now the “Irrational” Ones

In spite of years of being told how economically inept they are for supporting Brexit, some are now turning the same arguments on the Scots. This pundit, for example, might as well be saying  “look at those crazy Scots. They want to cut themselves off from their best trading partner (England)!” In the minds of those opposing independence, the dictates of economic good sense mean that Scotland should stay in the UK. But the anti-independence pundits may be making the same mistake the anti-Brexit pundits were making. It could be pro-independence Scots feel that they would gain more from independence than from unity—even if government stats say otherwise. If many Scots truly believe this strongly, it will be very hard to convince them otherwise, no matter how many studies by economists are trotted out.

Ultimately, we’re still left with a political problem that can’t be solved by insisting all the intelligent people agree with us because our spreadsheets and bean counters tell us which political position is “best” for us.

None of this should be construed to suggest that sound economics is wrong. Yes, low tariffs are better than high tariffs. Yes, business owners ought to be free to hire workers regardless of what country those workers are from. Yes, government regulations on businesses are a destructive burden, whether imposed by London or by Brussels. But the Brexit debate wasn’t really about whether high tariffs are better than low tariffs. It was about who should decide tariffs, and where and how. It was about issues far beyond whether or not an additional 1 percent growth could be wrung out of GDP next quarter. Many have tried to turn Brexit into just a debate about economic policy. But economics as imagined by mainstream number crunchers has never been sufficient to understand how people calculated the value of leaving the EU.

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Brexiteers Don’t Want Democracy; They Want Freedom | The American Spectator

Posted by M. C. on January 31, 2020

American satirist H. L. Mencken was devastating in his critique of the common voter. “He not only doesn’t long for liberty, he is quite unable to stand it,” he wrote scornfully. “All else is affectation, delusion, empty words.” But Mencken never met a Brexiteer, for whom liberty is the sine qua non of his existence.

https://spectator.org/brexiteers-dont-want-democracy-they-want-freedom/

And by George, they’ve got it: The UK leaves the EU this weekend.
When the United Kingdom exits the European Union late on Friday, Brexit will be hailed as a victory for British democracy. Three times Britons voted to leave the EU and “take back control”: in June 2016, when the Leave campaign won at the EU referendum; in the general election the following June, when the vast majority of voters cast ballots for parties promising to fulfill the referendum will of the people (even though the Conservative party itself only achieved a minority government); and finally in December 2019 — the second general election in as many years — after months and months of Remainer parliamentary obstruction, Britons overwhelming elected Boris Johnson on the pledge to “get Brexit done.” Third time’s the charm.

But is this really a victory for democracy? Yes, on the face of it, if by democracy you mean one person, one vote. On the other hand, Britons were subjected, figuratively and literally, to months of their elected representatives in the House of Commons hell-bent on frustrating that self-same will, all in the name of parliamentary democracy.

The prime minister and no less than Elizabeth II, fulfilling their legitimate constitutional powers to prorogue Parliament, were vetoed by an unaccountable UK Supreme Court, “miraculously” imbued with the ability to augur that the Head of State and her First Minister were motivated by malevolent intent against democracy. Thus vetoed, Boris Johnson was forced to return to the Commons, cap in hand, to the repellent glee of Remainers. Brexiteers were rightfully outraged, while the establishment was unconvincingly nonplussed. They hear “the fury in your words, but not your words,” to summon up Shakespeare.

What is it about democracy that Brexiteers dislike? Most would never put the question so bluntly and, if queried, would proclaim themselves the most proud and patriotic democrats in all of England. Except … Why do politicians and more perniciously, “public” servants, put their interests above those whom they have sworn to serve?

Were justification required, we could put the blame on Edmund Burke, who infamously told his Bristol electors that MPs “owe you, not his industry only, but his judgment.” Furthermore, “he betrays, instead of serving you, if he sacrifices it to your opinion,” Burke protested.

Burke’s political nostrum, however, had its limits even in his own day, let alone in ours. In truth, we need go no further than to admit that public officials are usually no more “public-spirited” than the general run of the populace. Perhaps even less so.

Brexiteers who are fully committed to British independence don’t stop at limiting the power of Brussels. They’ll extend it to Westminster, too. Here they enjoy the support of the late Victorian political economist and (classical) Liberal MP, W. E. H. Lecky. “This increase of State power means a multiplication of restrictions,” Lecky wrote. “It means an increase of bureaucracy”— them again! — and a “constant increase of taxation, which is in reality a constant restriction of liberty.”

Lecky was an early opponent of the evils attending democracy and taxing powers, joining John C. Calhoun before him and Ludwig von Mises and F. A. Hayek (as well as many others) after him. “No danger in representative government was deemed greater than that it should degenerate into a system of veiled confiscation,” Lecky observed, “one class voting the taxes which another class was compelled to pay.”

So while not disavowing democracy outright, few Brexiteers are happy with its results. Like most public disaffection, democratic dissatisfaction has been roiling under the surface of public discourse for decades. UK governments shifted from Conservative to Labour and back again, sometimes even comprising a coalition when circumstances warranted, but nothing seemed to change for the better. If anything, the state of British politics only worsened. Until Brexit came along.

American satirist H. L. Mencken was devastating in his critique of the common voter. “He not only doesn’t long for liberty, he is quite unable to stand it,” he wrote scornfully. “All else is affectation, delusion, empty words.” But Mencken never met a Brexiteer, for whom liberty is the sine qua non of his existence.

We may no longer need question why the Brexiteer has an uneasy relationship with democracy, seeing as how the burgeoning State robs him not only of his liberty but of his tax dollars, too. More to the point, however, is just how far Brexiteers are willing to go to regain both their freedom and their hard-won earnings. Is their outrage confined to Brussels, or are they willing to take on Westminster, too?

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Will the Secessionist Epidemic Ever End? – LewRockwell

Posted by M. C. on December 17, 2019

https://www.lewrockwell.com/2019/12/patrick-j-buchanan/will-the-secessionist-epidemic-ever-end/

By

Fresh from his triumphal “Get Brexit Done!” campaign, Prime Minister Boris Johnson anticipates a swift secession from the European Union.

But if Britain secedes from the EU, warns Scotland’s first minister Nicola Sturgeon, Scotland will secede from the United Kingdom.

Northern Ireland, which voted in 2016 to remain in the EU, could follow Scotland out of Britain, leaving her with “Little England” and Wales.

Not going to happen, says Boris. His government will not allow a second referendum on Scottish independence.

Yet the Scottish National Party won 48 of Scotland’s 59 seats in Parliament, and Sturgeon calls this a mandate for a new vote to secede:

“If (Boris) thinks … saying no is the end of the matter then he is going to find himself completely and utterly wrong. … You cannot hold Scotland in the union against its will.”

She has a point. If a majority of Scots wish to secede, how does a democratic Great Britain indefinitely deny them the right of self-determination?

Is Scotland fated to become for Britain what Catalonia is to Spain?

Where does this phenomenon, this continuing unraveling of old and proliferation of new nations, this epidemic of secessionism, end?

The most recent population explosion of new nations began three decades ago, when 15 republics of the USSR became independent nations. Soon, several of the 15 began to unravel further.

Transnistria seceded from Moldova. South Ossetia and Abkhazia seceded from Georgia. Chechnya sought to break free of Russia, only to be crushed. Since 2015, the Donbass has sought to secede from Ukraine.

When Josip Tito’s Yugoslavia collapsed, six “nations” seceded from Belgrade.

When did secessionism begin? The Americans started it all.

The first great secessionist cause was the Revolution, when the 13 American colonies declared and won independence from the British crown.

It is solemnly declared today that our Revolution was about ideas, such as the equality of all men. But the author of the Declaration did not believe in equality.

Jefferson was a Virginia plantation owner, some of whose slaves were with him in Philadelphia. He described Native Americans in the Declaration as “merciless Indian Savages.” The British are fraternally called “brethren” with whom we share “ties of a common kindred,” but who have been “deaf to the voice of consanguinity.”

I.e, our cousins have been deaf to the call of our common blood.

John Jay, in Federalist 2, before the Constitution was even ratified, spoke of the elements that formed the nation — “one connected country to one united people … descended from the same ancestors, speaking the same language, professing the same religion … similar in their manners and customs.”

A second secessionist movement, six decades later, created a second American nation. Texans under Sam Houston rose up and ripped that vast province away from its young mother country, Mexico.

The third secessionist movement united 11 states that sought to create a new confederated nation outside the Union, as the revolutionary generation had created a new nation outside of Britain. Read the rest of this entry »

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