With international eyes focusing on the potential ‘stimulus versus austerity’ scrap between different member states, Canadian citizens meanwhile have reacted in uproar at news that the weekend’s bill is set to total over $1 billion. Although 90 percent of that cost comes under the ‘security’ heading, it is a artificial lake intended to impress journalists in the press area that has come in for the heaviest criticism. The controversy may not be helped by the forecast lack of tangible results set to emanate from the two sets of meetings… The need for a global bank levy provides one the more concrete topics for discussion, but there is no guarantee that participants around the table will come to an agreement. “In the G20, the idea of a bank levy is not supported by at least half of the members,” Russian ambassador to the EU Vladimir Chizhov told a group of journalists on Friday morning in Brussels. “Neither is it acceptable to Russia,” he continued, arguing that banks would merely pass on the extra costs to their clients.
Canadian Boondoggles and Russia Is More Capitalist than the U.S. (Again)
June 26, 2010 by Dan Mitchell
The G-20 gab-fest is in Canada this weekend, but Canadian taxpayers are definitely not winners. In a display of waste that might even embarrass a French politician, the Canadian government somehow is going to squander $1 billion hosting the event. I can’t even conceive of why such an event should even cost $10 million. Maybe hookers are very expensive up north. One interesting policy issue at the meeting is that the United States is siding with Euro-socialist nations in pushing a bank tax. Fortunately for taxpayers and financial consumers, the former communists in charge of Russia are helping to block this money-grab. This adds to the irony of Russia recently proposing to eliminate capital gains taxation while Obama (and the U.K.’s Cameron) are increasing the tax rate on entrepreneurship and investment. The world is upside down. The EU Observer reports:
My favorite quote about the $1B G-20 security bill:
“I guess if you have almost destroyed the global banking system, the global financial markets, turned home ownership from a lifetime achievement reward into a daily nightmare, robbed the soon-to-be retired of their nest egg with a zero return over the previous decade, while paying actual retirees next to nothing for the use of their principal, and insisting that everyone’s standard of living for the next decade must become austere, for the greater good, then, protection to the tune of $21M an hour, including overtime, over a two day period, is necessary.”
http://seekingalpha.com/instablog/130038-marvin-clark/78798-the-perfect-l-shaped-recovery
Not only is the world upside down Mr. Mitchell, but those who are up are going down.
Europe seems poised for long term growth rates in the 1.7% range. This perpetual subpar performance in a world that grows at 4% average, results in a compounding 2.3% yearly deficit which will halve European economic standing in the world in a mere 30 years [1.023^30=1.98] i.e. roughly in one generation. In spite of European rhetoric about caring for children, this is actually the future that Europeans are planning to leave to the next generation. In the longer term, the Welfare State does not look that compassionate, does it?
The new America does not seem that far behind. The fact that the recovery from the last recession is so weak compared to other downturns may indicate that we have already downgraded to steady state growths in the dismal 2% range. So, the US is going down too.
http://online.wsj.com/article/SB10001424052748703485304575330762820003670.html?mod=WSJ_hpp_MIDDLETopStories
“Wolfgang Schaeuble [Germany’s finance minister], used an interview in the French newspaper Le Monde to throw a jab at the U.S., saying Mr. Obama’s deficit increases to fund stimulus funding has had little impact on the country’s jobless rate, which remains well above 9%.”
Things are not going well at all if we’ve come to the point where Europeans are lecturing the US about too much centralized state intervention in the economy.