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Archive for March 8th, 2010

An incredible 93 percent of voters in Iceland voted against financing British and Dutch bank bailouts. The politicians in England and the Netherlands argued that they were bailing out local subsidiaries of an Icelandic bank, so Iceland’s taxpayers should pick up the tab, but those branches was operating under the rules of the European Economic Area. More important, as Hannes Gissurason explains in the Wall Street Journal, endless bailouts encourage reckless behavior. It’s time someone took a stand, so give a cheer  for Iceland’s voters(they don’t deserve three cheers since it is easy to reject bailouts for foreign depositors and this is far from the right way to reduce government guarantees):

Icelanders sent a resounding message to the rest of the world: We are not paying the debts of reckless financiers. While we are few and powerless, we refuse to be bullied by our European neighbors. Some 93% said “No” to a recent deal negotiated by their government with its British and Dutch counterparts; only 7% voted for it. The deal concerned the so-called Icesave accounts that an Icelandic bank, Landsbanki, operated from 2006 in the U.K. and later also in the Netherlands. When the Landsbanki collapsed in October 2008, the British and the Dutch governments rushed in to pay depositors in their respective countries the amount insured under EEA (European Economic Area) regulations. They then demanded reimbursement from the Icelandic government, which reluctantly agreed to pay, against the wish of the great majority of Icelanders. The Icelanders argued that there was no legally binding government guarantee of the deposits. The Icelandic government had fully complied with EEA regulations and set up a Depositors’ and Investors’ Guarantee Fund. If the resources of that fund were not sufficient to meet its obligations (which was almost certainly the case), then the Icelandic government was not legally bound to step in with additional resources. Thus the British and the Dutch governments had no authority to create new obligations on the part of the Icelandic government by paying their nations’ depositors. …The Icelandic government was forced to sign the deal by not-so-veiled threats of financial isolation and by the use of the IMF as a bounty collector, as the Icelanders put it, for the British and the Dutch: The IMF refused, in effect, to render any assistance to the beleaguered Icelanders unless they signed the deal. …There is however a more general point: If you reward recklessness, you will fill the world with reckless people. Why should any government accept the “Too Big to Fail” argument about banks? Why should depositors be able to shift the risk they take over to the public? In the case of Icesave, the British and Dutch governments chose to bail out their fellow countrymen for their own reasons, with an eye toward stemming a panic within their own banking system. This they were free to do, but it wasn’t done to benefit Iceland or its banks, and Icelanders are right to question whether they should have to pay for decisions made in Amsterdam and London. This in turn raises the broader question implicated in all the bailouts around the world during the panic that started in 2008: Should taxpayers have to cover the losses of reckless bankers, and their customers, while not sharing but indirectly in their possible profits? For their part, the Icelanders have answered: No.

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I’m not sure how to categorize this story from England. Local governments are surreptitiously adding microchips to garbage cans to weigh the amount of rubbish each household is unloading according to a report in the Daily Mail. It is generally thought that this is the beginning stage of a government tax based on weight, though it’s also possible it could be somehow used to monitor intrusive recycling rules:

The growing threat of a stealth tax on the rubbish we throw away was exposed by startling figures yesterday. More than 2.5million homes now have wheelie bins fitted with microchips to weigh their contents. This is an increase of nearly two-thirds in just a year. The bins, which can be electronically identified and weighed, are designed for ‘pay-as-you-throw’ rubbish tax schemes. …Disclosure of the rapid spread of chipped bins followed the announcement this week of the first council to bring in a bin tax. Bristol City is presenting its scheme as a reward for recyclers, with cash payments to homes that leave out less rubbish. …research by the Big Brother Watch campaign group showed that the use of chipped bins has quietly spread over the past year. In March 2009, a survey based on Freedom of Information inquiries showed there were 42 councils which used bins with microchips. But the latest check, also based on FOI requests, put the number of authorities with electronic bins at 68 – one in five of all those that collect household rubbish. According to the responses from town halls, 2,629,052 homes have now been given bins with chips. …Alex Deane of Big Brother Watch, said: ‘The number of local councils placing microchips in bins is increasing, despite the fact that only one of them has volunteered to trial the Government’s pay-as-you-throw scheme. ‘Councils are waiting until the public aren’t watching to begin surveillance on our waste habits, intruding into people’s private lives and introducing punitive taxes on what we throw away. The British public doesn’t want this technology, these fines, or this intrusion. ‘If local authorities have no intention to monitor our waste then they should end the surreptitious installation of these bin microchips.’

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During the Cold War era, there was something known as the Brezhnev Doctrine, which was the notion that once a nation was taken over by communists, there was no going back. A similiar principle takes place in the battle between statism and freedom in America. The left understands that once people get hooked on government dependency for some aspect of their basic needs, it is very difficult, if not impossible, to restore liberty. This is why the Democrats are willing to temporarily lose Congress in exchange for imposing a collectivist healthcare system – especially since they are confident Republicans will never have the cojones to undo the damage. Mark Steyn explains:

…the governmentalization of health care is the fastest way to a permanent left-of-center political culture. It redefines the relationship between the citizen and the state in fundamental ways that make limited government all but impossible. In most of the rest of the Western world, there are still nominally “conservative” parties, and they even win elections occasionally, but not to any great effect (let’s not forget that Jacques Chirac was, in French terms, a “conservative”). The result is a kind of two-party one-party state: Right-of-center parties will once in a while be in office, but never in power, merely presiding over vast left-wing bureaucracies that cruise on regardless. …Once the state swells to a certain size, the people available to fill the ever expanding number of government jobs will be statists — sometimes hard-core Marxist statists, sometimes social-engineering multiculti statists, sometimes fluffily “compassionate” statists, but always statists. The short history of the post-war welfare state is that you don’t need a president-for-life if you’ve got a bureaucracy-for-life: The people can elect “conservatives,” as the Germans have done and the British are about to do, and the Left is mostly relaxed about it…. Look at it from the Dems’ point of view. You pass Obamacare. You lose the 2010 election, which gives the GOP co-ownership of an awkward couple of years. And you come back in 2012 to find your health-care apparatus is still in place, a fetid behemoth of toxic pustules oozing all over the basement, and, simply through the natural processes of government, already bigger and more expensive and more bureaucratic than it was when you passed it two years earlier. That’s a huge prize, and well worth a mid-term timeout. …government health care is not about health care, it’s about government. Once you look at it that way, what the Dems are doing makes perfect sense. For them.

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