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Archive for May, 2011

Way back in February of 2010, I wrote that a Greek bailout would be a failure. Not surprisingly, the parasites at the International Monetary Fund and the political elite from other European nations ignored my advice and gave tens of billions of dollars to Greece’s corrupt politicians.

The bailout happened in part because politicians and international bureaucrats (when they’re not busy molesting hotel maids) have a compulsion to squander other people’s money. But it also should be noted that the Greek bailout was a way of indirectly bailing out the big European banks that recklessly lent money to a profligate government (as explained here).

At the risk of sounding smug, let’s look at my four predictions from February 2010 and see how I did.

    1. The first prediction was that “Bailing out Greece will reward over-spending politicians and make future fiscal crises more likely.” That certainly seems to be the case since Europe is in even worse shape, so I’ll give myself a gold star.

    2. The second prediction was that “Bailing out Greece will reward greedy and short-sighted interest groups, particularly overpaid government workers.” Given the refusal of Greek politicians to follow through with promised cuts and privatizations, largely because of domestic resistance, it seems I was right again. As such, I’ll give myself another pat on the back.

    3. My third prediction was that “Bailing out Greece will encourage profligacy in Spain, Italy, and other nations.” Again, events certainly seem to confirm what I warned about last year, so let’s put this one in the win column as well.

    4. Last but not least, my fourth prediction was that “Bailing out Greece is not necessary to save the euro.” Well, since everybody is now talking about two possible non-bailout options – either a Greek default (a “restructuring” in PC terms) or a Greek return to using the drachma – and acknowledging that neither is a threat to the euro, it seems I batted 4-4 in my predictions.

But there’s no reward for being right. Especially when making such obvious predictions about the failure of big-government policies. So now we’re back where we were early last year, with Greece looking for another pile of money. Here’s a brief blurb from Reuters.

The European Union is racing to draft a second bailout package for Greece to release vital loans next month and avert the risk of the euro zone country defaulting, EU officials said on Monday.

If this second bailout happens (and it probably will), then I will make four new predictions. But I don’t need to spell them out because they’ll be the same ones I made last year.

We’ve reached the lather-rinse-repeat stage of fiscal collapse for the welfare state.

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I’m back in Bermuda, but not for sun and fun. Instead, I’m like the little Dutch boy with his finger in the dike as part of my ongoing effort to thwart high-tax nations in their attacks against tax competition and tax havens at the “Global Tax Forum” of the Organization for Economic Cooperation and Development.

There are some really horrifying developments at the this meeting, most notably the genesis of an International Tax Organization. I’m in the midst of analyzing this wretched proposal, which has the full support of the Obama Treasury Department folks at the conference, so hopefully I’ll be able to post something later today.

In the meantime, here are two videos I just found, featuring a British member of the European Parliament talking about the issue of tax competition. Unlike most politicians, he has the right view of the issue. This one was just released.

And here’s one from last year.

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After sharing lots of jokes (here, here, here, here, and here) about the much-deserved death of Osama bin Laden, I figured I had beaten that horse enough and re-focused on policy-oriented blogging.

But I’m a sucker for good political humor. So even though this is a remake of a joke I shared last year, it brightened up my Memorial Day and I figure others will enjoy it as well.

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What’s the difference between a real job and working for the government? I used the think the answer was that bureaucrats are overpaid, usually for being in positions that shouldn’t even exist.

Then I thought the difference was that bureaucrats got lavish benefits, about four times as much as people in the productive sector of the economy.

But now I realize that a government job means you get to dump on taxpayers, both figuratively and literally. Here are the unseemly details from KOMO News.

A mail carrier who was caught using a yard as his personal toilet will not be fired. The incident happened last month at a home in southeast Portland and a neighbor, Don Derfler, captured the man in the act with his camera. …The incident was an embarrassment to the post office and the worker was immediately placed on unpaid leave. Now, a decision has been made to keep the worker but he will be transferred to a different route. A spokesperson said the administrative action was taken based on a postal service investigation but he did not elaborate. He also did not say which route the mail carrier has been assigned to cover.

I’m almost at a loss for words. I knew that it was virtually impossible to fire a bureaucrat. But surely this was an example of crossing the line?!? But I was wrong.

Two final thoughts: How many of us would keep our jobs if we did something like this? And isn’t it wonderful that the Postal Service monopoly isn’t giving any warning to the potential victims on the bureaucrat’s new route.

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The Pope took a couple of days off to visit the mountains of Wyoming for some sightseeing. He was cruising the wilderness in the popemobile when there was a frantic commotion just at the edge of the woods. A helpless hippie, wearing sandals, shorts, a “Save the Whales” hat, and a “Greenpeace” T-shirt, was screaming while struggling frantically and trying to free himself from the grasp of a 10-foot grizzly.

The Pope then saw a group of loggers come racing up. One quickly fired a .44 magnum into the bear’s chest. The other two reached up and pulled the bleeding, semiconscious environmental from the bear’s grasp. Then using long clubs, the three loggers finished off the bear and two of them threw it onto the bed of their truck while the other tenderly placed the injured activist in the back seat.

As they prepared to leave, the Pope summoned them to come over. “I give you my blessing for your brave actions!” he told them. “I heard there was a bitter hatred between loggers and environmental activists, but now I’ve seen with my own eyes that this is not true.”

As the Pope drove off, one of the loggers asked his buddies, “Who was that guy?”

“It was the Pope,” another replied. “He’s in direct contact with heaven and has access to all wisdom.”

“Well,” the logger said, “he may have access to all wisdom, but he sure doesn’t know anything about bear hunting! By the way, is the bait holding up, or do we need to go back to Massachusetts and get another one?”

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I can’t say I’m surprised, but I’m nonetheless still nauseated to read that Mitt Romney has decided to endorse ethanol subsidies. Here’s a blurb from Fox in DC.

“I support the subsidy of ethanol,” Romney told an Iowa voter. “I believe ethanol is an important part of our energy solution for this country.” …Romney’s renewed support came just days after former Minnesota Gov. Pawlenty officially announced his candidacy and said the nation could no longer afford to subsidize ethanol, a position that he said backed up his claim to be the truth teller in the race.

I’ve written about ethanol subsidies before, noting that they rank as one of the most corrupt and inefficient special-interest programs in Washington. By endorsing ethanol, Romney demonstrates that he is a profoundly flawed candidate.

Indeed, he seems eerily similar to Richard Nixon. Not in the sense of being corrupt, but in his totally amoral approach to public policy.

From a policy perspective, Nixon was a terrible president. He raised taxes, created new government agencies and programs, imposed wage and price controls, and implemented many other policies to expand the burden of government. But he did those things for reasons of political expediency, not because of any set of beliefs.

Romney seems to have the same shallow approach. It appears that he will say anything and do anything to advance his own political ambition. Doing what’s right for America doesn’t seem to be a factor when he makes decisions.

By imposing Romneycare on Massachusetts, Romney paved the way for Obama to impose a similar policy on the entire nation. Now Romney has embraced one of the sleaziest scams in Washington, one that lines the pockets of a rich special interest and screws over taxpayers and consumers.

That does not bade well. If he makes it to the White House, I will predict right now that he would destroy America’s fiscal future with a value-added tax.

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It’s not often that I am unenthusiastic about the possibility of a nation reducing its corporate tax rate. But when the country is doing the right thing for the wrong reason, I hope that feelings of ambivalence are understandable.

In this case, some Irish politicians are talking about using a lower corporate tax rate as a weapon to extract more favorable bailout terms from other European nations. That’s an embarrassment, and it makes good tax policy seem like some sort of scam.

Indeed, I’m quite irritated with everything that’s happened in Ireland in the past couple of years. For a period of time, the nation was a positive example of the benefits of lower corporate tax rates and spending restraint. But Irish politicians did not handle prosperity well, and they went on a spending binge with all the tax revenue that was generated by a rapidly growing economy.

And the icing on this unpalatable cake was the decision to engage in the “Mother of all Bailouts” when the big banks became insolvent. That meant not just holding depositors harmless, but also bailing out all bondholders as well.

Given these unfortunate developments, I hope you will share my lack of excitement about the possibility of a lower corporate tax rate in the land of my ancestry.

Here’s the relevant part of a story in the Irish press.

The Government’s failure to secure a cut in the penal interest rate being charged on Ireland’s so-called ‘bailout’ and worsening diplomatic relations with France over corporation tax have been the catalyst for a surprising increase in Euro-scepticism within Government circles. Last week in Europe, Finance Minister Michael Noonan — who has previously been markedly restrained in his comments — sharply criticised the current ECB bailout strategy and, for the first time, openly asked if it offered a realistic road to success. Now, the Sunday Independent has learned that senior political figures are not ruling out the possibility that the under-fire Irish corporation tax rate of 12.5 per cent might be cut to 10 per cent or an even lower rate — rather than being increased — if the Irish Government does not soon receive a similar cut to that secured by Greece to the interest rate being on its bailout.

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