Category Archives: Political Economy

Save the People; Fail the EU

Economy, EU, Europe, Federal Reserve Bank, Foreign Policy, Free Markets, Iran, Political Economy, Propaganda, Trade

“The EU is our biggest trading partner. We cannot afford to let it fail. We send much of our goods and services to Europe. We share their values. We want to crush Iran with our European pals. They bomb and regulate the world with us. If the Eurozone goes down in flames; if we let them—we’ll be next.” So said President Barack Obama on November 28. Well, sort of. (Okay, I’ve ad-libbed a LOT, but I think I know my president by now.)

Obama was entertaining leaders of the European Union. He promised them that America would stand ready to do its part to help them withstand the Eurozone crisis.

The stakes are too high, you say? For whom, Mr. President? Cui Bono? Who Benefits, Barack?

Ask yourself that question each time you hear a reporter/pundit/analyst/politician insist that the EU and the Euro zone cannot be allowed to fail.

In reply to the question as to what will happen if this colossus collapses, the stakeholders above parrot a bunch of non sequiturs or circular arguments. In the tradition of “a statement that does not follow logically from what preceded it,” these reasons don’t necessarily obtain:

We can’t allow the thing to fail because the stakes are too high. Again: For whom?

David Böcking of Spiegel Online (a most intelligent newspaper; the Germans are impressive) advances the arguments against the break-up of the Eurozone. These are mostly legalistic, and are not rooted in real economic realities. The treaties, observes Böcking, don’t allow for easy disengagement. Legal disputes could arise over debt owed if the seceding country had borrowed money. And, mostly, sinecured EU official would lose sway on the world stage.

Brace for impact, if you believed these bastards, but here are the economic realities:

We flesh-and-blood Americans trade not with Barack or with Brussels, the seat of the European central government, but rather with the people of Belgium, the Netherland, Germany, France. If the financial institutions into which Europeans and Americans have been herded by bureaucrats on both sides of the Atlantic collapse, well then, individual producers and traders will find a way to make a living without these artificial, inorganic structures.

This is a failure of government, not of all the people, although some of the governed, maybe even the majority, have failed. The people who’ve failed are those who have eaten the state’s forbidden fruit.

Pipes on Private Property (Courtesy of JIMS)

Individual Rights, Israel, Political Economy, Political Philosophy, Private Property, Pseudo-history, Russia

Sponsored by the Jerusalem Institute for market Studies, the “Property and Freedom” lecture below was given by Prof. Richard Pipes, author of the book Property and Freedom. Here’s a shocker: historians of the West have paid scant attention to the role of private property in the annals of America and Europe. “If you look for the word ‘property’ in the index of American books dealing with evolution of American [and European] attitudes you tend to find nothing there,” says Pipes.

(Property and Freedom is cited in Into the Cannibal’s Pot.)

You already know what this writer thinks. It should be, life, property, liberty. In that order. Property trumps liberty, for liberty can be variously defined. Our government insists we are free so long as we can vote. We know this to be untrue. Property, moreover, is harder to redefine by the state. If our rights to property were fully upheld—the same state that tells us to consider ourselves free (and be grateful) would be unable to control huge areas of our lives—bedroom, boardroom, deathbed, you name them.

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PART III:

Zero, His Magic Number

Barack Obama, Debt, Economy, EU, Europe, Labor, Political Economy

Under Barack Obama, the misery index has risen dramatically.

“Food stamp rolls have risen 8.1% in the past year,” reports the WSJ. “[I]n August, the number of recipients hit 45.8 million.” That’s an astounding figure.

Whatever BHO claims to the contrary, the debt is only increasing: $203 Billion in the month of October. The national debt is approaching 15 trillion dollars.

Officially, close to 14 million Americans are unemployed. However, the liars at Labor (U.S. Bureau of Labor Statistics) ought to use the U-6, which includes the unemployed and people who would like to work, but who have not looked for a job recently, as well as those involuntarily working part-time. The latter is closer to 25 million. It’s all very sad.

For his part, BHO has gone tripping in Europe. Evidently, “we have the standing to lecture them.” Or perhaps the president has traveled to the Continent, ostensibly to convince Europeans to continue on the road to ruin Obama has set the US upon? Who knows? Except that his contribution to a debate about debt will be … zero, his magic number.

Centrally Planned Scarcity

Barack Obama, Business, Capitalism, Economy, Free Markets, Political Economy, Regulation

In a free market, consumers direct supply and demand. And in a free market, increased demand leads to increased supply, as producers compete with one another to meet the demand.

We are being told that there is a “shortage of crucial medicines including cancer drugs,” and that “President Barack Obama on Monday signed an executive order aimed at remedying the shortage.”

Remedying? Really? At least one of Mr. Obama’s regulatory sleights of hand will increase the scarcity it seeks to remedy: hounding drug sellers for “charging exorbitant prices for scarce medicines.” High prices for scarce goods are what help to harmonize supply and demand.

Alas, “You can’t fix stupid”. The reported shortages in 178 drug—most involving older, generic, cancer drugs administered by injection, as well as antibiotics to treat infections and nutritional drugs for patients who can’t eat—would have been rectified in an unimpeded market:

The shortfall of supply has obviously followed a sudden urgent demand for these drug. Large demand and short supply would initially send the prices of these drugs rocketing. Profits in an unhampered pharmaceutical market would signal to the many drug makers that it’s time to enter into production.

Mr. Obama, however, has taken further action to shortcircuit the street signs of the market—profits.

When there is a shortage of a good in a highly regulated market such as ours, it is safe to say that it is a result of government incursion into the economy. Somethings gets between the market and the consumer—in the case of these drugs, the culprits are Food and Drug Administration regulations and the patent system, which gives a drug company a lengthy monopoly over manufacturing.