Tag: Euro

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ideological culture local leaders national politics & policies responsibility

From Brexit to Calexit

CalExit, Brexit, UKip, Nigel Farage, Euro, California, Arron Banks, secession

When last we touched upon the strangely over-​the-​top Californian reaction to the Trump presidency, the secession movement, I took the occasion to bring up the rather less radical separatists in the north. “Already 21 of the 23 northernmost counties,” I wrote, “have made declarations to form the State of Jefferson.”

But now there is a new wrinkle. 

“Former UKip leader Nigel Farage and Leave backer Arron Banks recently helped raise $1 million for Calexit, which would split California into eastern and western regions,” we learn from the Daily Mail and the World Tribune. Banks, citing the high disapproval ratings Californians give their government, said that “he and Farage wanted to show people in California ‘how to light a fire and win’ the Calexit referendum.”

Their proposal is distinct from complete secession. It would amount to a California split, with the west coast (Los Angeles and north to the border) splitting off from the rest of the state. This would form an East California and a West California. 

Politically, this might appease the conservatives and moderates who live in more rural east and Southern California, especially since they are coming to increasingly despise Left Coast “liberals” (read: progressives). Whom they not implausibly blame for ruining the state.

But it leaves some Jefferson secessionists stuck with those “liberals.” This, if an oversight, is a big one. Would this not doom the scheme?

While the failed initiative effort of 2014 to split the state into six separate states was far too complicated to wrap one’s head around, the new Calexit effort seems too … simple.

This is Common Sense. I’m Paul Jacob.

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Categories
free trade & free markets ideological culture

Competition in Currency

Monopoly control of money is at the root of all kinds of evil.

As the Euro faces collapse, and the dollar’s value becomes increasingly unsteady, central bankers the world over worry about what to do next.

But it doesn’t have to be this way.

Last Thursday I mentioned monetary experimentation, including Ron Paul’s support for F.A. Hayek’s idea of competing currencies. In my Townhall column this weekend, I noted that Rep. Paul has done more than promote the idea “that government policy should allow all currencies to float, favoring none.… Last year he introduced the Free Competition in Currency Act, as Hayekian a piece of legislation as you could imagine.”Monopoly Money

Paul’s proposal is not merely a sign of the times, it is a sign of intellectual seriousness — in a politician, no less. In the early 1980s he had introduced a measure to return the United States to the gold standard. But now he is willing to let “the market decide” which monies should circulate.

We may know a lot more about money than we used to, but one of the things we’ve learned is that no one knows for sure how to manage an entire monetary system, the whole kit and kaboodle.

So, just as we don’t need a grocery czar or an “industrial policy” to micromanage either technological production or R&D, centrally managed money is just too hard for any one set of persons … to manage.

Competition in money and banking (sans today’s progressivist doctrine of “too big to fail”) would not only work, it would keep politicians from the extremity of irresponsibility.

For yes, today’s politicians rely upon the Federal Reserve. They need to keep the “printing presses” running to supply that special, hidden tax that funds their deficits: inflation.

This is Common Sense. I’m Paul Jacob.

Categories
Accountability national politics & policies too much government

Fearing Free Fall

The European Union is bailing out Greece. Fearing financial contagion, EU’s policy wizards decided to throw 100 billion euros at Greece, in tandem with demands for austerity.

New spending restrictions are tough enough to elicit the verdict of “savage” from Greece’s public employee unions. But are they “savage” enough?

The euros-​to-​the-​rescue scheme occurred only after collapses of Portuguese and Spanish bonds. As mentioned last Friday, things aren’t good on Europe’s other southern peninsulas, either.

The “Domino Theory” remains a dominant metaphor. Once, we feared countries would fall like dominos to communism. Now, it’s like dominos into insolvency.

But propping up a tipped domino isn’t easy.

Drastic solutions, like expelling the duplicitous Greek nation-​state from the EU? Not on the table. The apparent aim of the bailouts? Keep as many of the major players responsible for the fiasco in as good a shape as possible.

If, on the other hand, every politician were fired and every contract with unsustainable giveaways to public employee unions were dissolved as part of bankruptcy, might future policy makers be a little more cautious?

Meanwhile, the dominos keep falling. The day after announcing the bailout, the euro plummeted.

My question: What happens when “too big to fail” is applied not to a tiny country like Greece, but to the good ol’ US of A?

What if we’re too big to bail out?

This is Common Sense. I’m Paul Jacob.

Categories
national politics & policies too much government

The Inglorious Mess That Is Greece

Ah, the glory that was Greece! Too bad the modern country is anything but. The nation-​state of Greece is going broke, and going broke spectacularly.

And, dare I say it, instructively?

Everybody’s blaming everybody else, there. But the simple truth of the matter is that the politicians of Greece — both socialist and “conservative” — enticed citizens to go along with a sustained binge of spending, spending far beyond revenues.

And then the government lied to European Union HQ in Brussels about how much it was spending over revenues.

And, you guessed it, Greece continued to borrow even more.

Yes, public spending in Greece was more out-​of-​control than government spending here in America. And that’s why it’s instructive. What is happening right now to Greece is happening elsewhere in Europe — Italy, Spain, Portugal — and is on pace to happen to us, too. 

Greece does have one option the good ol’ US of A doesn’t have: It can go begging to the European Union. So far, saner heads in the EU are saying “no,” but that may not last. 

While we don’t have that option, Greece lacks ours: With the Euro as its standard, it’s constrained from the monetary fiddling that American leaders are tempted with. Inflation. Hyperinflation.

When things get worse here, we’ll hear talk of huge tax hikes, confiscations, and sovereign default. 

But also expect a lot of what Greek politicians did: Lying.

Inglorious, eh?

This is Common Sense. I’m Paul Jacob.