Sunday, January 27, 2019

Redistribution profiteers have a vested interest in hindering people from reaching the pot they promise will be there waiting for them, at the end of their Marxists rainbow.

"From each according to his ability, to each according to his needs"

In the Marxist view, such an arrangement will be made possible by the abundance of goods and services that a developed communist system will produce; the idea is that, with the full development of socialism and unfettered productive forces, there will be enough to satisfy everyone's needs

I do not agree.  First and foremost because I believe that free markets (capitalism) has by far the greatest capacity to extract the most from the citizens’ abilities. 

But also because, while traveling on such Marxist route, some few would have to redistribute any production of goods and services that is insufficient to satisfy the demand. And those taking the decisions fall too much in love with the political and financial profits such redistribution franchise can produce. As a consequence, the redistribution profiteers will never want to let loose of their power and their interference will never allow the production of abundance.

That said, as a citizen, I can nonetheless see the need for some redistribution of income and wealth to occur, not only in order to keep our society at peace but also out of simple plain need of social justice. For that I firmly believe the redistribution should primarily be done, not top down, but bottom up. 

An unconditional universal basic income would do so and it would also be the best way of keeping the distortion of the productive forces of a free market at minimum. 

That societal dividend would have to absolutely meet two criteria:

Be large enough to help you out of bed but never large enough to allow you stay in bed.
Be 100% fiscally sustainable, nothing of having our grandchildren pay for our income today. 

It should be easy to understand why the redistribution profiteers abhor the UBI… and one of their arguments against are precisely: that it will inspire laziness and keep people in bed; and proposing that it should be so big so as to guarantee its fiscal unsustainability, so that they will have to be kept in their role as redistributors.

There are many funding sources for an UBI. In an oil exporting country obviously those oil revenues should be a prime source, as already done in Alaska.

Info: Though in Spanish, below is a short YouTube in which three important members of the odious Chavez/Maduro Bolivarian Revolution confess their needs of keeping the poor poor: 

Tareck El Aissami, former Vice President and current Minister of Industries and National Production,“The poorer the people the more loyal they are to the revolutionary project.”

Héctor Rodríguez, a former Minister of Education and currently the Governor of Miranda, “We are not going to take the poor to the middle class so that they then aspire to join the opposition.”

Jorge Giordani Minister of Planning, “Our political strength is given to us by the poor, they are the one who votes for us and that’s why our discourse of defending the poor. The poor will have to remain poor, we need them so.”

Saturday, January 12, 2019

Here’s the moment it struck me that if Brexit falls apart, there might not be a EU for Britain to remain in.

It’s now twenty years since the Euro was introduced, more in order to strengthen a union than the result of a union. As I wrote in an Op-Ed at that time, it brought on important challenges to its 19 sovereigns. First it meant giving up the escape valve of being able to adjust their currency to their individual economic needs and realities, and second, much less noticed, also by me, was that they would hence be taking on debts in a currency that de facto was not denominated in their own domestic (printable) currency.

To face those challenges required the Eurozone to extend much more the Euro mutuality to other areas, like to monetary and fiscal policies. In that respect there’s no doubt that way to little has been done.

For more than a decade I thought the Eurozone applied Basel Committee’s Basel II standardized credit rating dependent risk weights in order to set the capital requirements for banks, when lending to sovereigns. I never approved of that because I considered those risk weight way too statist, tilting bank-lending way too much in favor of the sovereign and against the citizen... and that should do the Eurozone in

But then, by mid 2017, I found out that it was all so much worse. EU authorities, most probably the European Commission, I really do not know who and when, assigned all Eurozone sovereigns a 0% risk weight.

I could not believe it. That meant that European banks could hold sovereign debt, of for instance Greece, against no capital at all. How could something crazy like that happen? That basically doomed the Euro. How on earth can it now get out of that corner it has been painted into, especially when Europeans sing their national anthems with so much more emotion than EU’s anthem, Beethoven’s Schiller’s “Ode to Joy”

And that’s the moment it struck me that if Brexit falls apart, there might not be a EU for Britain to remain in.

My November 1998 Op-Ed "Burning the bridges in Europe"

PS. When Greece fell into the trap then EU authorities had it sign a Versailles type treaty.

We citizens need a clear global definition on what constitutes odious credits to sovereigns.

A letter to the Washington Post (not published)

I refer to Washington Post’s “Jaw-dropping corruption” recounting illicit investment relations between China and Malaysia, January 12.

It shows that though there have been discussions on odious debts, odious credits merits perhaps even more attention.

For decades I have begged for the establishment of clear and defined international rules that, either because of corruption or too nonchalant credit analysis or due diligence, should declare credits as odious, and therefore null, or at least not enforceable through normal channels.

In 2004 I published an Op-Ed titled “Odious Credit” in El Universal, Caracas. Can you imagine how much odious financing Venezuela could have avoided to contract with China, had such regulations been in place?

There’s way too much global camaraderie between governments all interested in taking on debt. We need much more global camaraderie between citizens interested in their governments not contracting odious debts.