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I was in Bratislava earlier today as part of the Free Market Road Show, where I spoke about how European nations are in trouble because of excessive spending and aging populations.

But I’m not going to write about my presentation because Peter Gonda of the Konservatívny Inštitút M.R. Stefánika shared some data on the post-World War II economic performance of Czechoslovakia that is far more interesting.

As you can see from his chart (the English title would be “The Economic Reality of Socialism”), Czechoslovakia, West Germany, Austria, and Finland all had very similar levels of income in 1948. But over the next 40 years, the socialist Czechoslovakian economy (CZ) fell further and further behind the market-oriented economies of those other countries.

Indeed, after just four decades, the market-oriented nations averaged twice as much per-capita economic output at the beleaguered Czechoslovakian economy.

By the way, things have improved since the collapse of communism.

Czechoslovakia in the early 1990s peacefully split into two nations, the Czech Republic and Slovakia. And both of them have since adopted a decent amount of pro-market reforms and have begun to converge with Western Europe.

So our story has a semi-happy ending (though I wrote last year that I’m worried about Slovakia backsliding a bit).

P.S. If you want other compelling examples that show – over multiple decades – the superior performance of market-oriented nations, click here and here.

P.P.S. Under Soviet rule, Czechoslovakia was genuine socialism (i.e., government ownershipcentral planningprice controls), which obviously is more damaging than what many people think of today as socialism (i.e., punitive taxes and a big welfare state).

P.P.P.S. Ludwig Erhard deserves much credit for West Germany’s post-war recovery.

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As an economist, I admire Switzerland for its sensible approach to issues such as spending restraint and taxation.

As an observer of political systems, I admire Switzerland for its robust federalism.

As a supporter of human rights, I admire Switzerland’s protection of financial privacy (sadly weakened because of external pressure).

As an advocate of freedom, I admire Switzerland because there is a tradition of gun rights.

Indeed, there is a gun store less than a mile from the federal parliament in Bern that sells (gasp!) military-style assault rifles.

Sadly, it wasn’t open when I walked by this past weekend, so I could only snap a photo of the display window.

I couldn’t help but mentally compare the Swiss capital, where guns are sold, with the U.S. capital, where favors are sold.

There’s also a pro-gun culture in Switzerland, as reflected in this article.

“Shooting is becoming increasing popular again among the young, and the federal decision to lower the age of access to lessons is a big part of it,” says a happy Christoph Petermann, deputy chief of communications for the Swiss Target Shooting Federation. In 2016, the government lowered the age at which young people can attend target shooting lessons from 17 to 15. “In addition, we’re particularly pleased with the number of girls and young women who choose shooting…” When it comes to training children how to shoot, …Children are admitted from the age of five – but not to shoot with an assault rifle. This young, they train with pistols, air rifles, crossbows or bows. It gets serious from the age of ten – with small-calibre weapons – and from 12, in general, with assault rifles.

Unfortunately, Swiss gun rights are being attacked.

The problem isn’t the politicians in Bern. It’s the bureaucrats at the European Commission.

The Swiss media is covering the issue.

…the EU gun control plans, due to be completed by 2019, aim to curb online weapons sales and impose tight restrictions on assault weapons. …Swiss army-issue weapons would still be allowed to be kept at home after military service, in keeping with tradition. Hunters are also not affected by the plan. But certain semi-automatic weapons – such as those with magazines holding over 20 rounds of ammunition – and some high-capacity shoulder-supported rifles would be banned. …Gun collectors will be required to catalogue and report their collections to the authorities.

Needless to say, Swiss gun groups are not happy.

Critics…say the government proposal was decided undemocratically and the clampdown will have no influence on public safety or terrorism in Europe. They are concerned about its impact on their right to bear arms and are particularly unhappy with restrictions on certain categories of semi-automatic weapons and magazines, the possible impact on army-issue guns, and additional bureaucracy. …Jean-Robert Consolini, the owner of Lagardere Armoury, said he would fight the proposal. “These terror attacks were carried out by people using guns from the black market, not from a legal trade via an armoury. So, this directive won’t prevent the traffic of weapons…” Today, Switzerland has among the highest gun ownership rates per capita among Western countries. It is thought that around two million are in circulation. High rates of ownership and existing gun laws reflect the country’s deep-rooted belief in the right to bear arms and the needs of its militia army.

Monsieur Consolini is completely correct, by the way, about the EU directive having no effect on terrorists, who invariably can get weapons on the black market.

In any event, American gun groups have sympathy for their Swiss counterparts.

The National Rifle Association has opined about the controversy.

Switzerland…has the most civilian-owned firearms per capita in Europe and ranks third worldwide… The experience of Switzerland, just like many parts of the United States, serves to refute gun control advocates’ contention that more firearm ownership means more violence. Unfortunately, …a tradition of peaceful gun ownership will not dissuade gun prohibitionists. …the latest push for gun control in Switzerland stems from the updates to the European Union Firearms Directive Brussels adopted in April 2017. …The most controversial change to EU gun law…classified handguns equipped with a magazine with a capacity greater than 20 rounds and long guns equipped with a magazine with a capacity greater than 10 rounds as Category A firearms. Category A firearms are generally prohibited for civilian use. Further, the legislation required EU Member States to create firearms registries… Switzerland is not a member of the EU, however, the country is a member of the Schengen Area… As such, Switzerland is obligated to conform to the EU’s firearms restrictions.

Here are more details from the NRA report.

On April 9, Swiss gun rights organization ProTell (named for legendary marksman William Tell…) expressed their opposition to the EU changes to the Swiss legislature. Calling Switzerland’s gun laws “an expression of trust and respect between citizen and state,”… In December, ProTell made clear that it is willing to fight any further restrictions on gun rights through the referendum process. The Swiss People’s Party has also registered its staunch opposition to the new EU restrictions.

So what’s going to happen?

There are two possible positive outcomes.

First, as I noted last year, the Czech Republic is on the right side of this fight. And its government is challenging the European Commission’s interference in what should be a matter decided by national governments.

The Czech Republic filed a lawsuit…against a new European Union directive tightening gun ownership, aimed at limiting access to semi-automatic and other weapons… EU interior ministers gave a final nod to the changes…despite the Czech Republic, Luxembourg and Poland voicing opposition. The Czech Interior Ministry said the directive was too harsh, affecting for example thousands of hunters – a popular activity with a long tradition in the central European country. …“Such a massive punishment of decent arms holders is unacceptable, because banning legally-held weapons has no connection with the fight against terrorism,” Interior Minister Milan Chovanec said in a statement. “This is not only a nonsensical decision once again undermining people’s trust in the EU, but implementing the directive could also have a negative impact on the internal security of the Czech Republic, because a large number of weapons could move to the black market,” he said. …The lower chamber of the Czech parliament approved a bill in June putting gun owners’ rights in the constitution.

In theory, the Czech government’s legal argument should prevail since “subsidiarity” is ostensibly enshrined in European treaties.

But I fear that principle of decentralization will be overlooked because of the pro-harmonization ideology that is so prevalent in EU institutions.

So the second option for a positive outcome is a referendum in Switzerland, which has a long tradition of direct democracy.

And since the Swiss tend to be very sensible when voting on national issues, we can hope that they reject gun control and – for all intents and purposes – tell the European Commission to take a hike.

Let’s hope so. There are very few libertarian-minded jurisdictions in the world. It would be a shame if the Swiss rolled over and let EU bureaucrats dictate their gun laws.

P.S. For more info on global gun control data on information, click here and here.

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Defenders of civil liberties have won big victories against gun control in the United States.

The fight certainly isn’t over, to be sure, but most Americans have some degree of freedom to own guns, carry guns, and protect themselves with guns.

By contrast, the situation in Europe tends to be grim. Many nations strictly limit the freedom of people to keep and bear arms. As you might expect, the “sensible Swiss” are an exception, and nations such as Monaco, Austria, and the Nordics are semi-reasonable.

But it’s just about impossible to own a gun in countries such as the United Kingdom, France, Germany, and Italy. Even groups that are targeted by Islamic fanatics, such as Jews, aren’t allowed to defend themselves.

And that is good news for terrorists. They can plot murder and mayhem with considerable confidence that they won’t meet armed resistance until police show up (just as mass killers in the USA seek out gun-free zones for their evil attacks).

But that passive approach may be changing in some European nations.

According to a column in the Washington Post, the President of the Czech Republic believes an armed citizenry is a safe citizenry.

A couple of months ago, Czech President Milos Zeman made an unusual request: He urged citizens to arm themselves against a possible “super-Holocaust” carried out by Muslim terrorists.

The column notes that he’s almost certainly over-stating the risks.

…there are fewer than 4,000 Muslims in this country of 10 million people.

But some citizens decided it’s better to be safe than sorry.

…gun purchases spiked.

Now the government is seeking to make it easier for citizens to use those guns for self-defense.

…the country’s interior ministry is pushing a constitutional change that would let citizens use guns against terrorists. Proponents say this could save lives if an attack occurs and police are delayed or unable to make their way to the scene. …Parliament must approve the proposal.

The good news is that the Czech Republic already has fairly good laws. At least by European standards.

The Czech Republic already has some of the most lenient gun policies in Europe. It’s home to about 800,000 registered firearms and 300,000 people with gun licenses. Obtaining a weapon is relatively easy: Residents must be 21, pass a gun knowledge check and have no criminal record. By law, Czechs can use their weapons to protect their property or when in danger, although they need to prove they faced a real threat.

Hopefully there are lots of unregistered firearms as well.

Though I’m unsure what the Interior Ministry is proposing with regards to gun use against terrorists. Why would the law need to be changed if Czechs already are allowed to use weapons for self-defense?

In any event, the bad news is that the meddling bureaucrats in Brussels are trying to make it more difficult for law-abiding people to protect themselves.

…much of Europe…has long supported much more stringent gun-control measures.  In the wake of the 2015 terror attacks in Paris, France pushed the European Union to enact even tougher policies. The European Commission’s initial proposal called for a complete ban on the sale of weapons like Kalashnikovs or AR-15s that are intended primarily for military use. Ammunition magazines would be limited to 20 rounds or less. …the EU passed a compromise last month… The final measure bans the sale of most military-style rifles and requires all potential buyers to go through a psychological check before they can buy a weapon. …it’s not yet clear if gun owners will have to turn in newly illegal weapons.

How typical of the French. They want to make it more difficult for law-abiding people to have guns, an approach that presumably won’t have much – if any – impact on terrorists who presumably can get weapons illegally.

And the EU once again ignores its own federalist rhetoric on subsidiarity to push for statist continent-wide policy.

Moreover, Kalashnikovs and AR-15s are no more dangerous or deadly than other rifles, so targeting guns that “are intended primarily for military use” is irrelevant nonsense.

The bottom line is that more gun control in Europe won’t help the fight against terrorism. Instead, it simply means citizens don’t have the right to defend themselves.

So I’m glad the Czechs are trying to do the right thing, in spite of the paternalistic left-wing ideologues elsewhere in Europe. And I hope there will be lots of civil disobedience as more gun control policies emanate from Brussels.

P.S. If you enjoy sarcasm, here’s a clever video showing how leftists think about gun control. And here’s another one.

P.P.S. If you enjoy when leftists accidentally make the argument against gun control, you’ll enjoy the exploding cigars by Trevor Noah and the New York Times.

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I’m not sure I could pick out a significant victory for human freedom in 2012.

Maybe I’m missing something, but the only good policy that’s even worth mentioning was the decision in Wisconsin to rein in the special privileges and excessive compensation for government workers.

But there definitely have been lots of sad developments.

The hard part is picking the most disappointing story.

1. Was it the craven decision by John Roberts to put politics before the Constitution and cast the deciding vote for Obamacare? This certainly could be the most disappointing event of the year, but technically it didn’t represent a step in the wrong direction since the Supreme Court basically gave a green light to unlimited federal power back in the 1930s and 1940s. The Obamacare case is best characterized as a failure to do the right thing. A very tragic decision, to be sure, but it maintained the status quo.

2. Was it the lawless decision by the Internal Revenue Service to impose a horrible regulation that forces American banks to put foreign law above U.S. law? This was a very bad development in the battle for tax competition, financial privacy, and fiscal sovereignty. But in the grand scheme of things, it’s just another in a long line of policies (such as FATCA) designed to increase the power of governments to impose and enforce bad tax policy.

3. Was it the Japanese government’s decision to double the value-added tax? I’m definitely not a fan of adding a VAT on top of the income tax, but Japan made that mistake years ago. The choice to increase the tax rate just shows why it’s dangerous to give politicians any new source of revenue. So this isn’t the worst policy development of 2012, particularly since the new Japanese government may suspend the tax hike.

4. Was it the delusional decision by 54 percent of California voters to impose a big, class-warfare tax hike? I thought the vote for Prop 30 was a very troubling development since it signaled that voters could be tricked into enacting class-warfare tax policy, even though they should have realized that more revenue for the state’s politicians would simply exacerbate the eventual fiscal collapse. But since I think this will be a learning experience on what not to do, I can’t put this at the top of my list.

5. Was it the French government’s punitive decision to impose a 75-percent top tax rate? This is a spectacularly misguided policy, and it’s already resulting in an exodus of entrepreneurs and other successful people. But just as I enjoy have California as a negative role model, I like using France as an example of bad policy. So it would be a bit hypocritical for me to list this as the worst policy of 2012.

6. Or was it the envy-motivated decisions by politicians in both Slovakia and the Czech Republic to replace flat tax systems with so-called progressive tax regimes? This is a strong candidate for the worst policy of the year. It’s very rare to see governments do the right thing, so it’s really tragic when politicians implement good reforms and later decide to reinstate class-warfare policies.

All things considered, I think this last option is the worst policy development of 2012. To be sure, I’m a bit biased since my work focuses on public finance issues and I’ve spent 20 years advocating for tax reform.

But I think there’s a strong case to be made, by anyone who believes in freedom, that politicians from Slovakia and the Czech Republic deserve the booby prize for worst public policy development of 2012.

Alvin Rabushka, sometimes referred to as the Father of the Flat Tax , summarizes the grim news.

On December 4, 2013, the center-left parliament of Slovakia modified the country’s historic 19% flat-rate tax…  Effective January 1, 2013, the income tax rate for corporations was raised from 19% to 23%, while that on individuals earning more than €39,600 (€1=$1.30) a year was raised to 25%, thereby creating two brackets of 19% and 25%. …On November 7, 2012, the lower house (Chamber of Deputies) of the national parliament approved a proposal to impose a second higher rate of 22% on annual income exceeding Czech Koruna (CZK) 100,000 ($5,200) per month.  President Vaclav Klaus signed the bill on December 22, 2012, which will take effect on January 1, 2013.

What’s especially depressing about these two defeats is that the supposedly right-wing parties deserve the blame.

Two nations filled with brain-dead conservative politicians

In Slovakia, all but one of the right-leaning parties in the old government decided to support the Greek bailout, leading to the collapse of the government and the election of a new socialist government that then sabotaged tax reform.

And in the Czech Republic, the current right-of-center government decided to scrap the flat tax for “fairness” reasons. I’m sure that will really be comforting to the Czech people as the economy suffers from less growth.

To understand what the people of those nations are losing, here’s my video on the flat tax.

Now for a bit of good news. There are still more than 25 flat tax jurisdictions in the world, including two of my favorite places – Hong Kong and Estonia.

So there are still some pockets of rationality. It’s just very unfortunate that the scope of human liberty is getting smaller every year.

P.S. The absolute worst thing that happened in 2012, if we look beyond public policy, was Georgia falling 4 yards short of beating Alabama in the Southeastern Conference Championship.

P.P.S. Speaking of sports, the best thing about 2012 occurred in Virginia Beach back in October.

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I periodically mock Republicans for being the stupid party. Yes, some of them probably mean well, but they have this lemming-like instinct to throw themselves on hand grenades.

But I noted back in April that the supposedly right-wing Christian Democrat party in Slovakia put on a display of stupidity that was so mind-boggling that it made GOPers look like rocket scientists.

Notwithstanding their original protestations to the contrary, the Christian Democrats (who were the lead party in the governing coalition) decided to support the bailout of Greece.

And when Slovakia’s pro-freedom SAS Party (part of the governing coalition) refused to support this terrible idea, the top Christian Democrat politicians decided that the bailout was so important that they struck a deal with the Social Democrats to get their votes in exchange for early elections.

Which, of course, meant that Social Democrats prevailed and the Christian Democrats lost power. And, much to my dismay, the Social Democrats are now poised to repeal the flat tax.

But that terrible development is only happening because the Christian Democrats were so breathtakingly stupid that they threw away power in the first place. And they gave up power so they could do something bad for Slovakia. Amazing.

It seems stupidity is infectious, because something similar is now happening next door in the Czech Republic.

Just as was the case in Slovakia, there’s a supposedly right-wing government in charge of the Czech Republic. So you would think that this government would be focused on controlling spending and lowering tax rates.

But that’s based on the assumption of competence, intelligence, and principles. Those characteristics seem to be in short supply. Here’s an excerpt from a report in the Washington Post.

The lower house on Wednesday rejected a 1 percent increase in the sales tax on retail goods and a 7 percent income tax increase for the highest-earners. The parliamentary refusal came after six lawmakers from the conservative Civic Democratic Party of Prime Minister Petr Necas voted against because they said the tax hikes are against their party’s values. Necas said Thursday a new vote should take place in three months and the government is linking it to a confidence vote. If that vote also fails, the coalition government will fall.

Just in case you’re not familiar with the workings of parliamentary systems, the Prime Minister of the Czech Republic is throwing a tantrum and threatening to have an election (which he almost certainly will lose) and turn the country back over to the leftists.

“Read my lips, let’s screw the people”

Unless, of course, he can convince a handful of principled lawmakers from his own party decide to stab taxpayers in the back and support a big tax hike. But not just a big tax hike. The Prime Minister wants to get rid of the flat tax by imposing a special, Obama-style class-warfare tax rate on the so-called rich.

I hope the six lawmakers mentioned in the news report hold firm, even if they’re only doing the right thing for non-principled reasons. It soon will be very obvious that they are/were on the side of the angels and that the Prime Minister and the other members of the party are a bunch of hacks who are willing to screw taxpayers in a lame and pathetic effort to buy votes with other people’s money.

I’m not sure which politician is most deserving of scorn. Is it Prime Minister Necas, who is channeling the spirit of George H.W. “read my lips” Bush as he leads his party over the cliff? Or is it Prime Minister Radicova of Slovakia, who got her party tossed from power because she decided her nation’s taxpayers should support the corrupt vote-buying schemes of Greek politicians?

Or maybe I should augment the list by including other supposed right wingers of Europe, such as Sarkozy, Merkel, Cameron, and Rajoy, all of whom seem to specialize in betraying taxpayers.

I’ve had friends tell me that this is inevitable because smart right wingers go into business, leaving the dregs for politics. It’s just the opposite for the left, they say. The smart leftists have no desire to dirty their hands with real work (Obama viewed his tiny bit of experience with the private sector “working for the enemy”), so they gravitate to government.

I think that’s way too simplistic of an explanation. I suspect the answer can be found in the insights of public choice economics, which explains that government and politics are corrupting institutions.

Perhaps that’s why it is so rare to find right-wing politicians – such as Reagan and Thatcher – who generally do the right thing.

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I wish the title of this blog post referred to the President of the United States, but instead our praise is directed across the Atlantic, to the President of the Czech Republic, who wisely has warned against giving “global governance” powers to the international bureaucrats at the United Nations. President Vaclav Klaus is a great man, who has battled against immense odds to preserve national sovereignty, resisting statist initiatives such as the new EU Constitution (aka, the Lisbon Treaty) and global warming schemes. Klaus understands that international bureaucracies are staffed by leftist ideologues who reflexively distrust markets. Equally important, he recognizes that governments will use “global governance” as a scheme to create tax and regulatory cartels that inevitably expand the burden of government and reduce competition among nations. Here’s a Reuters report on the strong speech Klaus gave to the kleptocrats at the United Nations.

Czech President Vaclav Klaus on Saturday criticized U.N. calls for increased “global governance” of the world’s economy, saying the world body should leave that role to national governments. The solution to dealing with the global economic crisis, Klaus told the U.N. General Assembly, did not lie in “creating new governmental and supranational agencies, or in aiming at global governance of the world economy.” “On the contrary, this is the time for international organizations, including the United Nations, to reduce their expenditures, make their administrations thinner, and leave the solutions to the governments of member states,” he said. …Klaus, a free-market economist who oversaw a wave of privatization in the 1990s after communism collapsed in his homeland, also said the world was “moving in the wrong direction” in combating the economic crisis. “The anti-crisis measures that have been proposed and already partly implemented follow from the assumption that the crisis was a failure of markets and that the right way out is more regulation of markets,” he said. Klaus said that was a “mistaken assumption” and it was impossible to prevent future crises through regulatory interventions and similar actions by governments. That will only “destroy the markets and together with them the chances for economic growth and prosperity in both developed and developing countries,” he said.

A couple of years ago, I had the honor of introducing Klaus at a conference in France. Very rarely do I meet a politician that exudes philosophical integrity. Klaus was one of those unusual cases. And if you want to know why it is important to preserve jurisdictional competition, here is a video on the specific issue of tax competition. This is rather timely since I leave tomorrow for Singapore, where I will be doing everything I can to undermine the pampered bureaucrats at the OECD and their sinister plans to create a global tax cartel to prop up Europe’s inefficient welfare states.

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Faithful readers will remember that my recent speaking tour of Europe for the Free Market Road Show featured stops in Slovakia and the Czech Republic.

As part of a venerable Washington tradition of taking credit for things even when your role is too small to even measure, I’m delighted to report that my speeches must have had a big impact. The parties sympathetic to free-markets and limited government prevailed in the recent Czech elections. Then, just this past weekend, the pro-market parties won a majority in the Slovak elections.  When Dan Mitchell speaks, people listen.

On a more serious note, the Slovak elections are particularly important since the victorious parties include some remarkably good people such as Ivan Miklos, Richard Sulik, and Martin Chren. Here’s a blurb from an election summary in the Wall Street Journal:

Preliminary results showed the Slovak Democratic and Christian Union, or SDKU, with 15.4% of the vote, followed by the liberal Freedom and Solidarity Party, or SaS, with 12.1%, the Christian Democratic Movement KDH with 8.5%, and the Hungarian minority party Most-HID with 8.1%. Final election results are expected late Sunday. The new parliament will thus be dominated by right-of-center parties led by the Christian Democratic SDKU, and the Hungarian minority party Most-HID. This coalition of four that will also include the Christian Democratic KDH and the liberal Freedom and Solidarity Party, and will hold a total of 79 parliament seats, compared with 62 seats to be held by Smer. The remaining nine mandates will be in the hands of the extremist Slovak Nationalist Party, or SNS. The Freedom and Solidarity Party was formed last year by Richard Sulik, an economist who designed the flat-rate tax system introduced by the previous SDKU-led governments that ruled in 1998-2006.

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