Monthly Archives: June 2015

Time For Greece To Leave The Euro

This week, much has been made of the possibility that it is looking increasingly likely that Greece will be forced (or choose) to leave the euro. While some have been saying for a long time (years) that the Eurozone will be fine without Greece and that Greece (eventually) will better off with its own currency, this is just now coming around to being recognized. Why?

For starters, conventional wisdom has the tendency to become entrenched; even more so when it is self-interested conventional wisdom. Europhiles have seen a Greek-exit from the euro (and maybe even the E.U., although this is unlikely) as breaching the principle that entrance into the euro (and the E.U.) is a one-way decision that can never be reversed. They see this principle of “no-exit” as key to holding together their vision of a politically/economically united Europe that will be a global player in a multi-polar world along with the U.S., Russia, and China. With it breached, they fear that the Euro (and the E.U.) could unravel (again, not likely). Consequently, they have been keen to play up all the horror scenarios that could happen if Greece were to leave the euro/E.U. The latest one is that pushing Greece away from the West could be geo-politically to Russia’s advantage. The idea that an economy that represents about 2% of the E.U. could cause global contagion and therefore needs to be kept on what amounts to a permanent welfare program was always unconvincing. It would be as if Vermont, Montana, Rhode Island, Wyoming, South Dakota, and Maine decided that they were going to use a currency other than the dollar, and there was fear that would cause the dollarzone that is the United States to collapse. The comparison isn’t exact as the U.S. is much more politically integrated than is the E.U., but if a marginal economy in the E.U. has the power to blow everything up economically, then the situation is so unstable that something else is going to come along in the future that would have the same effect.

The second reason why it has taken so long to be recognized is that the world (financially speaking) is a more stable place that it was a few years ago. While I personally am skeptical that there was ever a danger of ‘contagion’ from Greece that would have blown up the Eurozone/E.U., the fact is that with Spain, Portugal, and Italy apparently on more solid footing, the idea that investors panicked by Greece would end up forcing more countries out of the Eurozone has become much more remote. A few years ago, the possibility of a Grexit could roil financial markets. Today, it doesn’t seem to do it that much.

Thirdly, this recognition has also been driven by an acceptance of the fact that Greece will never get out the mess that it is in without either A.) a massive forgiveness of the debt that it owes, or B.) an exit from the Eurozone (or C. both). As time has gone on, it has become obvious that the longer the inevitable is postponed, the worse things will be when the inevitable finally happens. Greece never should have been let in the Eurozone and effectively defrauded its way in. If the E.U. had kicked Greece out of the Eurozone at that time this was discovered when the world was an economically strong footing, they wouldn’t have been throwing good money after bad all these years. But they decided to hope that Greece would eventually become Eurozone worthy. But it never has.

Finally, this recognition has come about by the lessening of a psychological effect that allows people to not see things coming simply because it hasn’t happened before. For example, nobody foresaw WWI happening, even though it seems obvious to us in hindsight. Likewise nobody believed that the Holocaust was actually happening because they could not imagine a regime being that vicious. Finally, the collapse of the Soviet Union was completely missed by everyone (especially the CIA) because it had been a fixture on the global stage for so long that nobody could imagine a world without it. Likewise, the idea of a country leaving the Eurozone has been seen as ridiculous, mainly because it hasn’t happened before. After Greece exits, whether next week, or next year, or the year after, its exit will be seen as obvious in hindsight as WWI and the Soviet Union’s collapse.

My Political/Economic Platform

With many people announcing their candidacy for the Presidency and other political offices, I thought that I would “announce” what my platform would be, were I running for the Presidency myself. Unlike most of what you are likely to hear, my plan is based on what I think should actually be done, not what I think you want to hear so that you will vote for me. Please contact my campaign for more information and with donation pledges at baeconomist@badasseconomist.com.

Plank # 1: Abolish the income tax, the IRS, and replace it with a national sales tax.

Ronald Reagan said that Democrats thought that every day was April 15th. Under my plan, this would be reality. My plan would increase economic efficiency and prosperity. Instead of being used by government as a poor man’s attempt at economic central planning and by politicians looking to pay off their politically connected friends with tax breaks, my tax code would return to its intended purpose: raising needed revenue for government functions. The tax code, by some estimates, costs Americans over $100 billion to comply with. Saving this amount annually and simply growing it at a 3% rate of inflation would result in an economy that would be over $7.7 trillion larger than it would otherwise be 40 years from now. That would be like adding another economy nearly half the size of today’s economy.

Plank# 2: Eliminate regulations, bureaucracy, and forcibly retire a significant fraction of the federal workforce.

Virtually every candidate on the Republican side will promise to do something similar. However, I am the only candidate for President who actually will as I don’t actually care about getting elected, or being re-elected. Regulations are not free. They have economic costs. They cost businesses and individuals a lot of money and time to comply with. This is time that they could be using enjoying life and/or building prosperity for themselves and their businesses. A significant fraction of the regulations serve little to no purpose, and are not really necessary. One need only look at the mountains of regulations that have been generated in the last 20 years to question how many of them are really necessary for a functioning society. As for slimming down the bureaucracy, it is all a question of incentives. In my Administration, we will move to reward individuals within an agency that we wish to reduce or eliminate by putting one year of the savings into an annuity for those whose jobs are eliminated. In addition, those who lose their jobs will be awarded their pension as if they had worked a full career to be paid immediately for life. Reducing regulations and eliminating bureaucracy currently standing on the throat of the economy will unleash economic growth that will put the U.S. in a much stronger economic position.

Plank# 3: Secure the U.S. border and control immigration.

Uncontrolled immigration has increased the pool of labor and undercut the wages of working Americans. Under my Administration, this will stop. The purpose of American government is to represent and fight for the interests of Americans; not be some sort of neutral arbiter between Americans and the rest of the world that wants to come to America. I have nothing against those who want to come here. I would try and do the same thing were I in their shoes. But my job as President will be to secure and support Americans. Under my Administration, the border will be secure, by militarization if necessary. American workers will no longer be forced to watch their government stand by as an uncontrolled wave of immigrant enter the country illegally to compete for their jobs and undermine their bargaining position with employers. For those who complain that American government is held in low regard by large swathes of the citizenry, maybe if the government actually stood up for the interests of actual Americans relative to the rest of the world, it might be held in higher regard.

Plank# 3: Make government work better.

My Administration isn’t just about making government smaller. It is also about making government work better. Today, government services are lousy Government workers can’t lose their jobs, even if they cause the death of someone. Under my Administration, this will stop. I will work with Congress to produce legislation that will force the federal workforce to function more like a private sector workforce. Specifically, something that would clearly result in a firing in the private sector will now result in a firing in the public sector. Something that would cause an employee to be personally and/or criminally liable in the private sector will produce the same result in the public sector. A government that wants to be held in high esteem has to hold itself to a higher standard.

Plank # 4: Withdraw the federal government out of as much as possible and leave the states and municipalities to sort things out for themselves.

Part of making government work better means that it should function in a way that is relevant to the people who it is meant to serve. This means having as many decisions as possible made as close to the people as possible, by individuals who might actually be forced to run into said people in line at the grocery store. Dishonest government is easier when the people making decisions never have to worry about coming face to face with the people who they have screwed. In addition, being closer to the people means that those making decisions have to balance a narrower range of interests, have a better chance of understanding the day-to-day lives of those they are impacting, and have a better chance of crafting laws/regulations that will make sense in the context in which they are being applied.

Plank #5: Force reform on the college/university system.

The college/university system today has largely become a place where normal constitutional rights of students are trampled, a mockery is made of due process, and in many cases has become little more than a left-wing seminary. America is weakened when the elite of this country are essentially taught that half the country’s political views are evil (not mistaken, evil) and illegitimate. We would rightly be up in arms if taxpayer funds were used to promote a religion, and this is no different. This has come about because those with center/right views have been routinely discriminated against in faculty and staff hiring for almost two generations. In a perfect world, professorships that would have gone to first class center-right intellects, allowing the clash of ideas with first class center-left intellects, have instead gone to leftists with 3rd or 4th rate intellects. Students and faculty are robbed of the opportunity to have their beliefs questioned and be exposed to people who see the world fundamentally different than they do. The result is students (and professors) on one side of the political aisle who can arrive at the heights of academia and politics only being exposed to an echo chamber of one side of the political aisle. For a country as large and diverse as ours, having an elite that is divorced from, and has no experience with, a large fraction of the country is not healthy. So, my Administration will come up with a plan that will force universities to achieve intellectual balance in hiring, and implement procedures to ensure that constitutional rights of students AND faculty are not infringed upon, and institute due process for any disputes. Any university/college that accepts federal funding and whose students get federally subsidized loans will have to meet these standards, or their funding will be eliminated.

Plank# 5: Produce a coherent foreign policy that makes America safe and promotes our interests around the world.

The current Administration seems to have an ad hoc foreign policy that appears to be incoherent and cooked up in a university whose members have been isolated from reality. This is what happens when you have an elite that has never encountered people who see the world completely differently from themselves. My foreign policy will be based on the reality, experience, and shared interests. Far from hating our freedom, sometimes a country or a people is opposed to us for no other reason than their interests are diametrically opposed to ours. Sometimes, we are culturally incompatible. Sometimes, our moving to defend our interests displaces them. Such is the way of the world. Such is the way it has always been. Such is the way it will always be. American exceptionalism has been based on a certain set of unique cultural and historical factors that often cannot be transplanted into other places. Strengthening our country and strategic position will ensure that a place such as America will continue to exist. To that end, my foreign policy will not be about defending the underdog, or reacting to a heart-rending massacre on T.V. To the extent that we need to understand our enemies, it is only to be better able to destroy them. To the extent that we enter into trade agreements, it will only be if we get something out of it. To the extent that we commit troops to battle, it will be because there is a strategic interest at stake (i.e. it improves our position relative to our enemies and rivals), not because it makes us “feel better about ourselves”.

In conclusion, my fellow Americans, we need a President with a vision for transformation, but also with a recognition of what America can do, would like to do, and absolutely has to do. We need a President committed to changing the structure of government. The way our government functions was designed in the 1940’s and 1950’s. That worked for awhile. But we have reached a point at which these institutions no longer function. The world has changed, and we have to change with it. Or stagnate.  If we were starting to build today, we wouldn’t design a government/regulatory structure like this. So why put up with one now? If elected, we won’t have to much longer.

Vote for me.