Posted in Bailout, Big Government, Europe, Germany, Uncategorized, tagged Bailouts, Big Government, Czech Republic, Germany, Merkel, Prague on May 19, 2010 |
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I spoke today in Prague at the second installment of the Free Market Road Show. I gave a standard presentation about fiscal policy, including strong warnings that all industrialized nations run the risk of Greek-style fiscal collapse because of entitlement programs and demographic changes. What’s remarkable, though, is that nobody pretends anymore that this isn’t happening. The question and answer session saw many people ask when the world was coming to an end (from a fiscal perspective) and whether certain nations would be good places to escape when welfare states descend into lawlessness and chaos. Meanwhile, in the Nero-fiddles-while-Rome-burns category, Europe’s statist Chancellor, Angela Merkel, confirmed to the world that she is a blithering idiot and/or a shallow and reprehensible political hack by imposing a ban on “short selling,” which occurs when investors make decisions based on an assumption that an asset (such as a Greek government bond) will fall in value. In the real world, short sellers perform a valuable role by helping to limit speculative bubbles. In the political world, however, short sellers are targeted by demagogues. If Merkel is right and short sellers are guilty of causing assets to fall, then thermometers are guilty of causing fevers. Bloomberg reports on Germany’s national embarrassment:
German Chancellor Angela Merkel laid out proposals to gain control over “destructive” financial markets, after she imposed a unilateral ban on naked short- selling that sent stocks sliding. …“The lack of rules and limits can make behavior in financial markets driven purely by the profit motive destructive and lead to an existential threat to financial stability in Europe and even the world,” Merkel told lawmakers in Berlin today.
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Posted in Big Government, Cronyism, Debt, Deficit, Hypocrisy, Uncategorized, Value-Added Tax, VAT, tagged Big Government, Debt, Deficit, Hypocrisy, Value-Added Tax, VAT, Volcker on May 19, 2010 |
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Paul Volcker is a typical Washington insider who maintains his favorable connections by endorsing bigger government. In recent months, he’s been busy supporting a value-added tax. Now he is saying that it is absolutely critical to address the deficit. Here’s and excerpt from a Bloomberg report:
Former Federal Reserve Chairman Paul Volcker, a top outside adviser to President Barack Obama, said time is “growing short” for the U.S. to address problems ranging from its budget deficit to Social Security obligations. “We better get started,” the 82-year-old former central banker said in a speech yesterday in Stanford, California. “Today’s concerns may soon become tomorrow’s existential crises.”
This is the same Volcker, though, who defended Obama’s $800 billion so-called stimulus. And a quick Google search does not reveal any evidence that he opposed the giant fiscal sinkhole of Obamacare (I only spent five minutes searching, so I definitely feel comfortable stating that any opposition – if it existed at all – was very muted). In other words, Volcker is a typical beltway hack. When politicians are engaged in an orgy of new spending, he either supports them or stays quiet. But when the discussion turns to taxes, then suddely the deficit is the worst thing in the world and tough steps need to be taken. It would be nice if hypocrites like Volcker just dropped out of sight and played golf all day.
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Sleazy politicians from France, Germany, England, and the United States want a bank taxes that would finance national piggy banks to bail out politically favored companies and industries. But they are not stupid, so they realize that nations that impose bank taxes will lose deposits to nations with more sensible policy. This is why the statists want to convince all nations to adopt the same policy. Fortunately, some nations are resisting harmonized bank taxes, and Canada is taking the lead. Canadian leaders rightfully explain that their banks never got in trouble, largely because Canada does not have foolish housing subsidies. Let us hope that Canada, as well as other nations such as Brazil and Australia, block the corrupt policies being pushed by statists such as Obama and Merkel.
Canada will “resist” a bank tax, Industry Minister Tony Clement said Tuesday as ministers fanned out across the world to raise opposition to the proposal for avoiding another financial crisis. “Canada is, and will remain, opposed to a tax that would penalize financial institutions that remained strong and prosperous while many of the world’s banks failed,” Clement told a press conference with Foreign Minister Lawrence Cannon. …Attempts to reach international agreement on coordinated bank taxes at last month’s G20 and IMF meetings ran aground. Nations including Canada and Brazil, whose banking sectors emerged largely unscathed from the financial crisis, objected to the plan, favoring higher capital reserve requirements instead. But it is expected to be revived at the next meeting of G20 leaders in Toronto next month, with Germany’s Angela Merkel vowing to press for the proposal supported by many in Europe. Clement said the bank tax would “encourage risky behavior” if it is used to create a bank bailout fund and “reward bad behavior” of those institutions responsible for the recent financial crisis in the first place. …”This tax would reach into consumers’ pockets and punish our financial institutions which have taken precautions to avoid the very turmoil that is afflicting other parts of the globe,” Clement lamented.
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