Tuesday, March 29, 2016

My letter to the Philadephia Inquirer re: The consumer always pays

Dear Sirs:
I have been following your reporting of Mayor Kenney's proposed tax on sugary drinks. Please keep one thing in mind--consumers pay every tax; corporations merely collect it. Coca Cola and Pepsi must pass on the cost of any tax to the consumer or go out of business. Do not be confused with supposed "research" that shows that not all previous taxes were passed on to consumers. ALL business expenses are borne by the consumer of the final product.

Patrick Barron

Do what I say or I'll shoot myself!

From today's Open Europe news summary:

Spain warns of consequences for Gibraltar if Britain votes for Brexit

The Times reports that Spain may end its agreements with Gibraltar, and could even close the border if Britain votes to leave the EU. A Spanish official told the paper that “We do not see Britain leaving the European Union as an opportunity but you have to understand that if Brexit happened it would change our obligations to Gibraltar… No longer would we have to respect the free movement of capital and goods which Brussels demands. We could even close the border if wanted to.”

This "Spanish official" should ask all the Spaniards who work in Gibraltar if they would support closing the border. No wonder Catalonia wants its independence.

Pat Barron

Saturday, March 26, 2016

Part 2 of my interview re: The end of dollar hegemony

Part 2. Thirty minutes.

Pat Barron

Show notes page: http://www.wakeupcallpodcast.com/dollar-hegemony-2/

iTunes link: https://itunes.apple.com/us/podcast/wake-up-call-podcast-foreign/id1089024518?mt=2&ls=1
Embed code (embed a player on your site):
YouTube link: https://www.youtube.com/watch?v=Mw1dmiwdCMk
In case you missed it, here is Part 1, also thirty minutes.
Pat Barron
Show notes page: http://www.wakeupcallpodcast.com/dollar-hegemony/

iTunes link: https://itunes.apple.com/us/podcast/wake-up-call-podcast-foreign/id1089024518?mt=2&ls=1
Embed code (embed a player on your site):
YouTube link: https://www.youtube.com/watch?v=z9PkT2m_vd4

Sunday, March 20, 2016

The history, meaning, and probable end of "dollar hegemony"

This thirty minute interview is part one of a two part series. Part two will be released next week.

In this interview I explain how the dollar became the world's leading reserve currency, what it means to be a reserve currency, how the US has benefited financially from this arrangement, and how delinking the dollar to gold has allowed our military empire to expand in an irresponsible manner.

Pat Barron


Wednesday, March 16, 2016

My letter to the Financial Times, London re: The fallacy underlying the cause of Irish bank failures

Re: Anglo Irish Bank executive appears in court after US extradition

Dear Sirs:
The failure of Anglo Irish Bank--whatever the reason--did not cause the collapse of other financial institutions. Mr. Boland's article leads one to view banks as dominoes in which one collapse necessarily leads to the collapse of all, but such is not the case. Something more fundamental was at work that led to what the great Austrian school economist Murray N. Rothbard called a "cluster of errors". Why should all banks collapse at roughly the same moment? Some banks may have invested unwisely or suffered from incompetent or even criminal management, but why all banks? We don't see this in other industries. For example, a restaurant's failure does not lead to a collapse of the restaurant industry, or an airline's demise does not lead to the collapse of all airlines. But banking is different. Banking is subject to adverse consequences stemming from the manipulation of the interest rate, usually downward, by the central bank. More businesses appear to be eligible for bank loans at the lower interest rate. The subsequent increase in lending causes an artificial and unsustainable boom that eventually must be liquidated due to lack of real capital. Anglo Irish Bank was the first to succumb to this central bank caused collapse, but it did not cause the collapse of other Irish banks. That bill may be delivered to the central bank itself.

Thursday, March 10, 2016

ECB to stimulate Europe by taking its citizens' money

From today's Open Europe news summary:

Further ECB stimulus expected to aid flagging Eurozone economy

The European Central Bank is widely expected to announce further stimulus measures to aid the struggling Eurozone economy as it meets in Frankfurt today. Most analysts expected the deposit rate to be cut further into negative territory to between -0.4% and -0.5% and the quantitative easing programme to be expanded by between €10bn and €20bn as the ECB struggles to lift the Eurozone out of deflation.
One of the consequences of the demise of sound money is that government spending now is characterized as good for the economy. Imagine a society with sound money. What government would dare claim that taking the citizens' money and spending it was a good thing? The citizens are that much poorer by the amount of money taxed. Yet this is exactly what the Keynesian mindset claims. Now the ECB is so far down the Keynesian rabbit hole that it sees nothing bizarre in considering that it take more of the citizens' money in order to make them wealthier. Welcome to Nineteen Eighty-four.

Tuesday, March 1, 2016

My letter to the Philadelphia Inquirer re: mayor wants to impose a soda tax

(Philadelphia's mayor wants to impose a three cent PER OUNCE! tax on sodas.)

Re: Mayor Kenney: Soda tax would fund $400 million in projects

Dear Sir:
Philadelphia Mayor Kenney joins the too-long list of economically ignorant politicians. One begins to wonder whether ignorance of basic economics is a prerequisite for running for elected office. Gee, I didn't think I would ever say this, but I agree with the Teamsters; i.e., the three cent per ounce tax on sodas will destroy jobs. Has the mayor really not considered that money spent on a soda tax will NOT be spent elsewhere? Let's suppose that the people spend the same total dollars, including the new tax, to buy sodas as in the past. The revenue to the soda-providing industry will go down, because the tax comes off the top, and the number of units of sodas sold will be less.  Got that? So, the soda bottlers will produce fewer bottles of soda. Materials and manpower used by the soda bottlers will go down, both in gross revenue and number of units. Soda delivery workers, the Teamsters, will deliver fewer bottles, resulting in layoffs. The retail stores will sell fewer units, resulting in lower net revenue--the price of the soda less the tax--and earn lower profits. Everyone involved in any way with the soda retail selling industry, such as the store owners and their employees, will be negatively affected. In short, Mayor Kenney's soda tax will impoverish the people of Philadelphia in addition to depriving them of their right to consume a legal product, which apparently is the goal of the social engineers. How about this...the people of Philadelphia refuse to buy a soda anywhere in the city. Tax revenue from soda sales would be zero. The social engineers who are oh so concerned about the health of Philadelphians would have to seek another outlet for their busybody inclinations.

Patrick Barron