Radio Free Market

Re: Income Inequality May Take Toll on Growth

Dear Sirs:
The fallacy that equality of incomes and wealth are just and beneficial goals of society to be advanced by “an aggressive series of changes to tax and spending programs” cannot be supported by empirical research or deductive logic.  In his magnum opus Human Action Ludwig von Mises explained that the “inequality of individuals with regard to wealth and income is an essential feature of the market economy.” (page 285 of the Scholars’ Edition)  Furthermore he stated that “Its elimination would entirely destroy the market economy.” (page 836)  In a society without government enforced privileges each man produces according to his own abilities for the benefit of his fellow man.  The only way to create a society of equal outcomes would be to hobble the natural abilities of the more able, because it is impossible to transfer those innate abilities to others.  Of course, this would result in a less productive society in which even those at the lowest income tier would be worse off.  Patrick Barron

by Godfrey Bloom, member of the European Parliament

History’s greatest propagandist, what a singular honour, Josef Goebbels warned all politicians if you wanted to lie to be believed it had to be a whopper.

The Nobel Prize committee have certainly hauled this one on board. I have watched in wonder as they award some of the most extraordinary recipients often economists, wrong on a truly awesome scale often not even in hindsight, intellectually and academically discredited as they mount the podium. How the early scientific winners must spin in their graves. I thought I had seen it all when they awarded Obama a peace prize, one can only assume the committee now consist of some reincarnation of the Marx Brothers. Dull though it may be it is worth looking at this on a bit more detail.

• The EU claimed at the outbreak of the Bosnian civil war in 1991 that ‘The hour of Europe has come’. Jacques Poos, who held the rotating presidency of the EU at the time boasted the EU would stop the war in Bosnia. Four years later, the EU had still done nothing, 250,000 Bosnians were dead or displaced, and it took the Americans to put it right.

• The EU sold Gaddafi’s Libya around €300 million worth of arms and arms licenses over a 5 year period before his overthrow. The Guardian has a very revealing exposé of this. Not very peaceful now is it? Source:

http://www.guardian.co.uk/news/datablog/2011/mar/01/eu-arms-exports-libya

• Interesting that this was the same Gaddafi’s Libya they said in a joint statement from Van Rompuy and Barroso was one of ‘repression and despotism’. If it was so bad, and the EU was so peaceful, why were they so gleefully selling it arms for years? Source: http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/en/ec/125447.pdf

• How EU ‘peace keepers’ in the Congo during Operation Artemis were accused of torture. Heavily armed Europeans torturing Africans isn’t exactly peaceful. Hardly the behaviour that should attract a peace prize. Source: http://www.dw.de/dw/article/0,,3223692,00.html

• The EU is a major arms dealer on the world market, making over $400 billion. The liberal New York Times has called the EU hypocritical. Again, being a multi-billion dollar arms dealer is not really the stuff of a Nobel Peace Prize winner.

http://www.nytimes.com/2012/03/06/world/europe/06iht-letter06.html?_r=1&

• Somali piracy. In the 1990s, EU fishing fleets destroyed the fish stocks off the Horn of Africa. As a result, desperate former fishermen in Somali resorted to piracy. The African Prospects Magazine estimates that EU fleets stole five times the commercial value of fish from Somali waters that Somali receives in foreign aid each year. The destruction of the Somali coastal economy has bred piracy and violence. Economically devastating poor countries and pushing its people into armed criminal gangs is hardly what I’d call the actions of a Nobel Prize winner.

http://www.ukipmeps.org/news_622_Farage-Colonialism-by-fishing-boat-rather-than-gunboat.html

• Now piracy off the Horn of Africa is one of the most serious challenges to global security. It has been estimated that it costs the global economy $8 BILLION a year. Around 80% of these costs are born by commercial shipping firms, who have to pay much higher insurance premiums, pay for armed guards on board and put extra fuel in their boats so they can pass through danger spots quicker. Creating one of the world’s most serious security threats is hardly what I’d call the actions of a Nobel Prize winner.

http://rt.com/business/news/somalia-piracy-cost-report-877/

• The Nobel Peace Prize has an interesting list of former nominees. Soviet dictator Josef Stalin was nominated twice in 1945 and 1948. The nomination was on the grounds he was going to help end world war 2, and thus create peace. This was the same Stalin who oversaw mass murder, gulags and secret police summary executions.

http://www.nobelprize.org/nobel_prizes/peace/shortfacts.html

• One former winner is Yasser Arafat who won it in 1993. Arafat is on record as saying “Peace for us means the destruction of Israel. We are preparing for an all-out war, a war which will last for generations”. http://www.brainyquote.com/quotes/authors/y/yasser_arafat.html#S0YXEqrEFeL18leQ.99

Facts :

• Barack Obama was given the prize just two months into office. He beat Morgan Tsvanagarai to the prize, who had bravely faced down Mugabe for years in Zimbabwe. Obama went on to expand the war in Afghanistan and backed NATO attacks on Libya.

• What will the EU do with the prize money? Will it donate some to the EU mechanism for stability? Maybe the EU will give some of the prize money to Spain, which is now so poor thanks to the Euro, that the Red Cross are handing out food parcels, much as they do in Africa, Asia and conflict zones.

http://www.dailymail.co.uk/news/article-2215479/Red-Cross-urges-Spanish-donate-money-food-parcels-to-countrymen-2-3-million-deemed-extremely-vulnerable.html?ito=feeds-newsxml

Nobel Committee President Thorbjørn ‘Groucho’ Jagland was good enough to acknowledge the EU’s problems but clearly there is no fool like an old fool! EU Commission President Manuel Barroso twittered his delight as he slid the cheque into his pocket, presumably to fund the next boondoggle.

BBC Europe’s correspondent Matthew Price was equally tickled but only queried the timing. But I suppose if your ultimate boss Lord Patten is an ex commissioner whose pension depends on your towing the line he would wouldn’t he? I suppose if young Matthew did not have the EU he would have to get a real job, perish the thought!

By the by, what about NATO? All those nights I spent freezing as a young officer on the inner German border don’t seem to count. Gissa medal, please!

From today’s Open Europe news summary:

German Finance Minister: “In one way or another, we’ll change the EU Treaties”; UK criticises for calling for swift euro crisis resolution while threatening to veto further integration DPA reports that German Finance Minister Wolfgang Schäuble has said he wants quick EU Treaty changes to establish a specific eurozone Commissioner – potentially as “powerful” as the Commissioner in charge of competition – with the mandate to send national budgets back to national parliaments, if not within the eurozone’s fiscal rules. He also wants a specific Eurozone parliament, an off-shoot of the European Parliament. Handelsblattreports that Angela Merkel will demand an EU treaty change as quid pro quo for bailing out Greece, with proposals floated as early as at this week’s EU summit. Schäuble is quoted saying that “in one way or another, we’ll change the European Treaties.”Schäuble also said of the UK that “one can’t, on the one hand, demand a quick resolution to the eurozone crisis and on the other, torpedo each step which aligns fiscal policies within the eurozone.” The article adds that Germany may seek an intergovernmental Treaty, however it reports that this may be problematic following the latest German Constitutional Court judgement.

Separately Der Spiegel reports that German Chancellor Angela Merkel, allegedly frustrated by the UK government’s unwillingness to compromise, has come to terms with the fact that there “will no longer be a path back to the centre of the [EU] for the British.” Handelsblatt FAZ Spiegel Mail Express

This explains in very clear terms the two differing sides.  The Euro-elite, represented here by Merkel and Schauble, believe that the EU can and should have veto power over national budgets.  This is the same as loss of sovereignty, which I doubt the Greeks or anyone else would ever accept and which is unenforceable in any event.  What will the EU do when Greece fails to pass a budget acceptable to the EU or fails to implement it?  Will the EU invade Greece?  Perhaps it will throw Greece out of the EU.  Just listen to Schauble himself, who says in the above report that “one way or another, we’ll change the European Treaties.”  Coercion is the Euro-federalists’ last option, which illustrates the inherent contradiction of what the EU has become.  It started as a supposedly voluntary organization of sovereign members who cooperate on matters of mutual interest.  But, since the very beginning of what is now the EU and which started as the European Coal and Steel Community in 1950, the Euro-federalists have dreamed and schemed to establish a new sovereign organization to supplant the nation-state.  They thought they had succeeded with the launching of the euro, which would be the tool for running the continent according to their wishes.  But the euro has merely exposed the unresolvable problems with the Euro-federalists’ dreams.  The euro has been plundered by its members, as was predicted by Austrian economists and which is explained by Professor Philipp Bagus in Tragedy of the Euro.  Rather than admit that the euro was misconstructed, the Euro-federalists insist on changing the European Treaties “by any means”.  This is ominous.  Patrick Barron

Zhang Weiying: China’s Anti-Keynesian Insurgent

This is an excellent article from the Wall Street Journal’s Abheek Bhattacharya about the rise in China of an Austrian school economist.  China’s free market reforms were sidetracked by a resurgence of Keynesian stimulus.  But now this is increasingly seen by many in China’s leadership as a mistake; i.e., that Keynesian stimulus did not deliver the promised results.  Could China be the first country to scrap Keynesian economics?    Patrick Barron

This is a “MUST SEE”  interview with Nigel Farage, leader of the euroskeptic UKIP party, about the ridiculous notion that the EU deserves the Nobel Peace Prize.  The reality is the opposite, as Farage explains.  Here in a five minute interview is a great lesson in history, politics, and real democracy.

             PLEASE, PLEASE WATCH IT!

[youtube http://www.youtube.com/watch?v=hfvK2wqaf7E]

EU Wins Nobel Peace Prize

What could be more ridiculous?  The Nobel committee grants its “Peace Prize” to the European Union, as riots break out all over Europe in protest to austerity measures that are a direct result of unsustainable government spending made possible only by the EU’s flagship monetary tool, the inflationary and misconstructed euro.  Here’s just one example among many.  Earlier this week Greeks rioted over the visit to Athens by German Chancellor Angela Merkel, who is seen by the Greek citizenry as the cause of their financial plight.  You see, the Germans are reluctant to hand over even more euros to sustain the Greek’s overblown welfare state.  In Greek eyes that makes Germany responsible.  There is even talk of demanding German reparations payments for the misery perpetrated on Greece by the German army almost three-quarters of a century ago.  Oh, what a blessing has been the European Union!  It has created probably the worst continent-wide financial crisis since the 1930s and has rekindled animosities for which no living person is responsible.  But this is par for the course for the Nobel committee’s Peace Prize recipients, who have included terrorists (Yasser Arafat) and communist dictators (Mikhail Gorbachev).  Patrick Barron

From today’s Open Europe news summary:

Thousands of Greeks protest against austerity as Merkel visits Athens; Bild Chief Editor: “The Greece that showed itself in the centre of Athens yesterday does not belong in the euro” During her visit to Athens yesterday, German Chancellor Angela Merkel told Greek Prime Minister Antonis Samaras that Greece would get the next tranche of its bailout funds in November providing the coalition finalises its latest austerity package and pushes ahead with structural reforms, reports Kathimerini. At a press conference, Merkel said that she had not come as a “taskmaster” but as a “friend and partner”, and praised the country’s efforts in tackling the crisis so far, although she warned that the austerity and reform package “should be seen through”, comparing it with the struggle undertaken by East Germany after re-unification. Open Europe Director Mats Persson is cited in the Telegraphas saying that eurozone leaders are keen to keep Greece in the euro to prevent further contagion spreading to Spain.Thousands of people demonstrated against the visit and the austerity programme yesterday – which included the burning of Nazi flags – in protests that were mostly peaceful but with some outbreaks of violence. The visit was broadly considered a success by the Greek government and media, although reporting the protests on its front page, Bild commented that “Germany does not deserve this”, with chief editor Nikolas Blome arguing that “The Greece that showed itself in the centre of Athens yesterday does not belong in the euro”. Meanwhile Die Welt reports that German coalition MPs have strongly criticised Die Linke co-chairman Bernd Riexinger for “going against German interests” by joining the protests. Kathimerini Kathimerini 2 EUobserver Guardian Independent Times Mail Bild Welt Welt 2 Welt: Schmidt FAZ Süddeutsche Zeit Kathimerini 3 WSJ Irish Independent IHT Telegraph Le Figaro WSJ 2

Germany is blamed for Greece’s problems only because of the misconstructed euro, which allowed profligate countries like Greece, Spain, Italy, and others to borrow at will and at artificially low rates.  Now that the consequences of this misconstruction are evident to all, rather than accept responsibility for problems of its own making, the Greeks are blaming the Germans.  This inevitable animosity between profligate countries and more responsible ones should not exist and would not exist except for the misconstructed European Monetary Union.  Rather than expel Greece from this misconstructed monetary union or attempt to force it to change its profligate ways, Germany should leave.  It should reinstitute the deutsche mark and anchor it in gold. Then it would become apparent to all, most importantly to the Greeks themselves, that their problems can be solved only by themselves and no one else.  Patrick Barron

The vice president of the European Parliament, Senor Alejo Vidal-Quadras, has called for the Spanish military to put down Catalonia’s attempt to place a separation referendum on the upcoming election ballot.  Catalonia is a province of Spain, whose GNP is larger than either Portugal or Ireland.  It was a sovereign country itself for two short years in the 1930s.

Just as individual nations are chaffing at what seems to be unstoppable plans to force a centralized government on currently sovereign countries in a futile attempt to save the overly ambitious “European Project”, provinces within currently sovereign countries are chaffing at their own national government’s fiscal mismanagement.  The Basque province of Spain has been most boisterous for independence for many years, but now Catalonia, a much more important industrial province, has taken the lead.

It is typical of those whose current policies have failed to seek ever more coercive power over larger geographic areas as the solution.  Napoleon sought to unite Europe with his army after the French Revolution deteriorated into the socialist nightmare of the guillotine.  Hitler and Stalin tried to conquer Europe after the failures of their two forms of socialism, national socialism and international socialism.  Now, as Europe deteriorates economically, the European Union pleas for greater powers over banking and demands direct taxing power over the people of sovereign countries via an open-ended financial transaction tax.  None of these measures will solve the crisis, because they do not address the underlying causes of the crisis–the increasingly socialistic tendency toward monetary and capital destruction that is the hallmark of the regulatory welfare state.  Patrick Barron

Re: Spain Recoils as Its Hungry Forage Trash Bins for a Next Meal

The European Union’s labor laws are the most stringent in the world.  Its economic regulations are the most stringent in the world.  Its taxes are some of the highest in the world (and increasing…Spain recently raised the value added tax to twenty-one percent!).  Now its protection of trash bins is the most stringent in the world.  As EU labor and business regulations destroy jobs and industry and as the European Central Bank destroys the common currency, Europe’s destitute turn to bankrupt governments for the promised handouts in times of need…only to find the helping hand withdrawn.  Now even trash bins are being padlocked by government decree.  Ludwig von Mises explained long ago that socialism is not sustainable, because it is a system of redistribution and not one of production.  Eventually there are no resources to plunder.  Patrick Barron