Sunday, April 17, 2016

A proper rejoinder to an empty threat

From yesterday's Open Europe news summary:

French Economy Minister: UK “won’t be in a position to negotiate something better” after Brexit

French Economy Minister Emmanuel Macron told an audience in London yesterday, “After a Brexit vote, you are not in a position to negotiate something better…Leave the club and you will be alone. What will be your position with the Chinese? I’m sorry to say, but exactly the same as Jersey and Guernsey with the EU.”

The proper response to M. Macron is "Why would the UK have to negotiate anything?" The UK--or any nation, for that matter--can freely open its borders to the imports of the entire world. It does not have to negotiate something that it can do unilaterally. Of course, the French Prime Minister is speaking about his own country's trade barriers to deny the importation of UK goods. No nation can control the self-defeating actions of others. If France wants to embargo goods from the UK, it certainly can do so and there is nothing that the UK can do about it. But so what? Who is harmed? The French! The French do not enjoy UK products that they would prefer over products from anywhere else, including France. Otherwise, what is the purpose of embargoing UK goods? When the French sell goods into the UK market, they take pounds in payment. What are the French to do with these pounds? Stack them in the vault of the Bank of France and never spend them? Fine. Now the French have given UK citizens free gifts of their goods.

One of the greatest and most persistent fallacies in economics is that a nation suffers when it lowers its barriers to imports and the exporting country does not reciprocate.

Tuesday, April 12, 2016

My letter to the Philadelphia Inquirer re: Was the Libyan intervention legal?

Re: White House is seeking to share blame over Libya

Dear Sirs:
As described in the above report by Josh Lederman and Kathleen Hennessey, found on page A10 of yesterday's Inquirer, the White House is concerned primarily with seeking a better outcome from future military interventions based upon its past failures. The bigger and more important question for Americans is whether the Libyan intervention was legal. Muammar Gadhafi, whom NATO helped depose and who later was killed, asked the right question. Why was NATO attacking his country when his country had not attacked a NATO country? Is America is a nation of laws or of men? President Obama--and, I fear, most politicians-- believe the latter.

Patrick Barron

Friday, April 8, 2016

German and Dutch objections to ECB QE are ignored

From today's Open Europe news summary:

ECB Minutes show deep divisions over stimulus measures
Minutes of the March meeting of the ECB governing council, released on yesterday reveal deep divisions amongst its members over the latest round of ECB stimulus. The Dutch and German members were fiercely against, The Financial Times reports, with the minutes noting that some feared the measures could result in “market distortions,” and that “the costs and risks of engaging further in public sector asset purchases, particularly in the medium to long term, would outweigh their potential benefits.”
As usual, Germany's (now joined by the Dutch) objections to the ECB's quantitative easing program is ignored. It is a mystery why Germany continues to use the euro, since it is no one's interest, not even the rest of the Eurozone countries, that it do so. The euro is a mechanism for the rest of Europe to steal German capital in order to prop up unsustainable welfare programs. This process will not cease until Germany's economy is shattered. How can this be in the best interest of anyone, even the irresponsible countries of Europe? I believe the answer is that the rest of the Eurozone countries are led by opportunistic politicians who will line their pockets so that they themselves will not be affected by the coming collapse.