Day: March 6, 2024

Европейский Союз запрещает использование одноразовой упаковки для пищевых продуктов и предметов домашнего обихода. Речь идет о мини-упаковках фруктов и овощей, средствах гигиены в заведениях быстрого питания или гостиничных номерах, а также пластиковой пищевой таре. Целью нового постановления, которое будет полностью реализовано с 2030 года, является сокращение отходов. По данным POLITICO, после запрета предприятиям, работающим на […]

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Armenian MP Highlights Concerns Over Russian Arms Supply Comments Amid Strained Ties  BNN Breaking

Many of Donald Trump’s supporters say they like him because “he shakes things up” (presumably the stuffy political establishment). An extreme example of this blowtorch approach was Trump’s recent comment that unless delinquent European allies paid their bills to NATO, not only would the United States not defend them, but he would “encourage” the Russians “to do whatever the hell they want against them.”

Of course, this utterance sounds more like a mob boss trying to enforce an extortion racket than a former U.S. president trying to regain office. Also, Trump grandiosely claimed he could end the war between Ukraine and Russia in “one day.”

It is correct that wealthy western European countries should take greater responsibility for European security, including contributions to NATO and Ukraine, and that after Ukraine’s failed offensive against Russia, that country should begin negotiating an end to the war. However, the former goal should not be attained by prodding Russia to toss European security into shambles by attacking a NATO country, and the latter should not be achieved quickly by pressuring Ukraine to cave into Vladimir Putin’s demands.

Although Trump is on the right track in both matters, he lacks the basic knowledge to make good policy in the first case, and his motives vis-à-vis Russia are questionable.

Even though he had four years in the presidency to learn about NATO, Trump still thinks members pay dues to belong to the alliance—much like they do at his Florida Mar-a-Lago club/residence.

Although the alliance has some common funds to which all members contribute, most of its power comes from the members’ armed forces and their individual military spending. After Russia’s initial invasion of Crimea and eastern Ukraine in 2014, all alliance members pledged to spend 2 percent of their GDP on defense. To date, only countries that are on the front line of a potential threat from Russia or Belarus (a band of countries from Finland to Romania), those on the front line of another possible threat (Greece perceiving a threat from fellow NATO member Turkey), or are global powers attempting to police an informal global empire (the United States) or a commonwealth of nations of a past one (the United Kingdom) have met the pledge.

The Russian invasion of Ukraine has improved the performance of some alliance members, again motivated by fear. Yet, the bulk of NATO members regularly have failed to meet the goal—in some cases spectacularly, such as the large countries of France, Italy and, until recently, Germany.

The European Union has created a joint financing mechanism to fund armaments to Ukraine, but it has not fulfilled its pledges for deliveries. For example, the EU is projected to fill just over half of the 1 million artillery shells promised by March 2024. In 2023, according to the International Monetary Fund, the European Union has about the same GDP (in purchasing power parity terms) as the United Statesbut almost 10 times the size of Russia’s GDP.

Yet, the combined yearly defense spending of the European Union nations, even with a post-invasion rise to $345 billion, is only about 40 percent of the hefty $877 billion annual U.S. total. 

European NATO (not considering the United States) already leads Russia in almost all military categories, except armored ground vehicles, and Europe is much more technologically advanced than Russia, which has an economy dominated by the export of natural resources. Thus, Trump is correct that wealthy Europeans can do more for their own defense than they do now, especially when the Russian military has been devastated by the war in Ukraine.

Some NATO countries that border Russia—for example, Poland and the three Baltic countries—are screaming that they are next on the diabolical Vladimir Putin’s list of countries to invade. However, the Russian military has been set back decades by its disaster in Ukraine; it is in no shape to take on European NATO, let alone a U.S.-led NATO. Instead, Russia is likely to be deterred from further aggressive action by the fact that its corrupt military has had trouble subduing the much weaker Ukraine.

As for aid to Ukraine, the EU has contributed more than the United States, but the vast majority of it has been financial assistance; the United States has utterly dominated the provision of military aid.

As European arms production increases, the United States can transfer to the Europeans the burden of providing weapons to Ukraine. After all, the Europeans should be doing more than the United States since the Russian threat is more acute to Europe than to the United States. The United States must be freed up to counter a rising China, especially when the Europeans are already vastly outpacing Russia economically and technologically.

As for Donald Trump, although he has always been right that the Europeans should do more in the military, getting them to do so by inviting a hostile Russia to attack delinquent countries is as dangerous as trying to scare your kids into an appreciation of money and financial responsibility by inviting an armed robber into the house.

Trump’s son Eric once said that much of the money flowing into the Trump Organization was coming from Russia. Considering the 2016 Trump campaign’s many contacts with Russians and that the campaign provided a Russian intelligence agent with expensive and detailed private campaign data, the apparent public coordination between the candidate and Russian hackers, and Trump’s deference to Putin at every turn, statements inviting Russia to attack any NATO member should once again raise many eyebrows about Trump’s seeming affinity for a man who has already brutally invaded a weaker country.

This article was also published in Inside Sources/ DC Journal 

Most of what the political class calls policies are really aspirations with no policy content. They are feel-good statements that promote goals most people would support, with no associated policies that would move toward those goals. The following is an example.

The White House’s web page for the National Climate Task Force (skip down to the section “President Biden’s Actions to Tackle the Climate Crisis”) lists emissions goals for 2030, 2035, and 2050, well after President Biden will have left office, even if he serves out a second term. These are aspirations and aspirations that would have to be met by his successors, letting the president off the accountability hook.

What prompted me to write about this subject was this article titled “Biden’s scaled-back power rule raises doubts over US climate target,” which reports on an actual policy. The Biden administration has decided to exclude natural gas power plants from upcoming emissions standards.

The key point in this example is that the president’s actual policy works against the president’s stated goals.

Further down, the website lists the Biden administration’s accomplishments toward fulfilling his climate aspirations. They include a record number of electric vehicles and charging stations, new solar and wind projects, and supporting domestic manufacturing of clean energy technologies.

Those may be good things, but they are things the private sector is doing. “Support” isn’t a policy; it’s an attempt to take political credit for private sector action. If these things count as accomplishments, they are private sector accomplishments, not Biden administration accomplishments.

The website also credits the Biden administration for finalizing the strongest vehicle emissions standards in American history and proposing more robust standards for greenhouse gas and air pollution emissions. Those are not policies; they are aspirations. Should those aspirations be realized, it will be because the private sector has figured out how to reduce its emissions.

As the political season ramps up this year, notice that the “policies” that politicians will propose are not really policies at all; they are aspirations. They say, “Here are some good things I would like to accomplish if I am elected,” but they don’t say how they intend to accomplish them. They amount to feel-good slogans rather than actual public policies.

Most people will be in favor of mitigating climate change, reducing crime, securing the border, and reducing the budget deficit. Those are feel-good aspirations. Fewer people will favor specific policies aimed at realizing those aspirations. That’s why politicians talk about aspirations rather than specific policies. That’s also why those aspirations often fail to be realized.

The aspirations are popular; the policies to accomplish them are less so. That’s why the Biden administration is enacting a policy that works against his own stated goals.

This article was published at The Beacon

By Jane L. Johnson

Stephen Anderson, in his Mises Wire essays of February 1 (“Are Bankruptcies of Some US States in the Future?”) and February 23 (“US States Have a Long History of Defaulting”), worries that some US states may be on the precipice of bankruptcy. While a potential problem—especially in light of high debt levels among federal government, businesses, and consumers—possible state bankruptcies and defaults must be clarified before we conclude that state bankruptcies lie ahead.

Mr. Anderson is correct that federal bankruptcy law does not allow states to declare bankruptcy. According to the contracts clause of the US Constitution—Article 1, Section 10—states are barred from impairing the obligation of contracts, and the Supreme Court has interpreted this to mean that a state cannot refuse to meet its financial obligations to pay debt service (principal and interest on bonds) just because it would prefer to spend the funds for some other public purpose.

Operating Budgets and Capital Budgets

State and local governments operate under two budgets: one for operating expenses, and another for repayment of interest and principal on debt that they have issued in the past for capital expenditures. Funds in the capital budget are earmarked for debt service payments, which are contractual obligations.

Operating Expenses and Capital Expenses

Operating expenses include those for employee salaries and benefits, education, healthcare, road repair and maintenance, and social welfare programs. Capital expenses include those for which bonds have been issued to build roads and bridges, state buildings, public transit facilities, prisons, and other projects that will last past the current generation of taxpayers. Debt service on these bonds is paid from either revenues charged for use of facilities (e.g., road and bridge tolls) or from general tax revenues.

Bond investors will know whether bonds are “revenue bonds” or “general obligation bonds,” and a state bond issuer’s credit rating is based on whether the revenue source or general tax base is deemed sufficient to pay the debt service required. Thus, the capital budget involves a contract to pay investors by the terms agreed to.

Conflating State-Level Debt Service and Operating Expenditures

Mr. Anderson’s two essays focus almost entirely on state-level debt service payments of interest and principal on outstanding bonds, almost entirely ignoring state operating losses. But operating losses figure largely in the financial status of large states like California, which currently faces a projected 2024–25 operating budget deficit of $38 billion (the governor’s figure) or $68 billion (the state’s independent Legislative Analyst Office’s figure). This budget deficit, the largest among all fifty states, refers to budgeted state spending in excess of state tax revenues. Debt service obligations, on the other hand, cannot be commingled with general operating expenditures.

The state constitutions of nearly all US states cannot run operating deficits, so if facing operating deficits, they must either draw down available reserves, cut expenditures, or raise taxes. Short-term borrowing to cover operating deficits is considered irresponsible state fiscal management because it requires additional budgeted funds to meet debt service payments on the debt that was issued to cover the operating deficits.

The February 1 essay devotes several paragraphs to bond defaults in states such as Arkansas in 1933, possible upcoming defaults in Illinois and New Jersey, then pivots to the California budget deficit and spending trends in New York, Connecticut, and Michigan that could lead to “future defaults and possible bankruptcy unless budget and policy reform is enacted.” The February 23 essay presents further details of Arkansas’s bond defaults, stating in its initial paragraph that “we might call a state government bond payment default a bankruptcy.” These statements further conflate operating and capital budgets and expenditures.

Is Mr. Anderson suggesting that state governments may decide to use contractually obligated debt service funds for other general public purposes instead of honoring bond holders’ promised interest and principal payments? If so, this would breach the US Constitution’s contracts clause cited above, inviting legal action.

US Federal Government Budgeting versus State-Level Budgeting

Note that the US federal government does not have two budgets, instead only one very large budget that covers both operating and capital expenditures. This is why the federal government can go into debt with impunity, relying on its AAA credit rating to assure investors that its debt service will always be paid. One credit rating agency recently did lower its rating from AAA to A+. If this were to occur more frequently and by additional rating agencies, the US could have difficulty issuing additional debt instruments. Governments at any level are always sensitive to their credit ratings, as are bond investors.

Conclusion

Neither state-level bond defaults nor state deficit spending is considered responsible fiscal management, and neither should be countenanced by taxpayers and bond investors. To think rationally about these matters requires recognition of separate operating budgeting and spending versus contractual obligations for debt service payments. When contemplating state-level finances, it is important not to conflate operating budgets and expenditures, on the one hand, with capital budgeting and debt service on the other hand.

• About the author: Jane Johnson is a retired college economics instructor who currently teaches economics at the Osher Lifelong Learning Institute in southern California. She is a graduate of Vassar College, and has graduate degrees from UC-Berkeley, and the University of Washington.
• Source: This article was published by Mises Institute

By Saimum Parvez

On 7 January 2024 the incumbent Awami League (AL) was re-elected in Bangladesh in an election that was neither free nor fair. The election was described by the international media as a bad day for democracy and a charade, while many doubted the legitimacy of the election results. Due to major opposition parties’ boycott of the election, only the AL and its affiliates competed. For the competing candidates, winning the elections was dependent on pre-election negotiations with the ruling party. 

The lead-up to the election was rife with protests and counter-protests by the opposition and ruling parties. The opposition, led by the Bangladesh Nationalist Party (BNP), drew huge crowds to Dhaka and other urban centres.

Their key demand was the establishment of a neutral, interim caretaker government to oversee the election. The opposition’s demand was grounded in previous controversial and rigged elections in 2014 and 2018 under the regime of AL Prime Minister Sheikh Hasina. In contrast, the four elections held under a caretaker government in 1991, 1996, 2001 and 2008 were recognised as free, fair and credible. The opposition and a section of the civil society have been demanding the reinstatement of the caretaker government system since the AL abolished it in 2011.

US Secretary of State Antony Blinken announced a new visa policy in May 2023 that ‘restrict[s] the issuance of visas for any Bangladeshi individual, believed to be responsible for, or complicit in, undermining the democratic election process in Bangladesh’. This seemed to invigorate opposition leaders and activists, who hoped that the 2024 election would be different to 2014 and 2018 with the international community watching more closely. 

The visa restrictions also attracted attention from Russia and China, who sided with the Hasina regime and condemned ‘Western interference’ in Bangladesh. India, Bangladesh’s influential neighbour, has also supported the Hasina regime thanks to its business and security interests in Bangladesh. 

In this game of influence the real losers were the people of Bangladesh, who have been deprived of their democratic rights for more than a decade. In October 2023 the Bangladeshi government began a violent crackdown and subjected millions to show trials on trumped-up charges. In addition to arrests, custodial deaths and extrajudicial killings of opposition leaders and activists, the incumbent government expedited judicial persecutions in fictitious and politically motivated cases. 

At least 27,000 opposition activists and leaders have been jailed and more than 100,000 political activists have been charged since August 2023. Journalists, cartoonists and social media activists have been charged, arrested and imprisoned under the now-scrapped Digital Security Act. 

When the opposition BNP and 62 other political parties boycotted the 2024 election, the main challenge for the ruling AL was to make the election look participatory. The ruling party propped up dummy candidates to give the election a competitive veneer for the international community. The independent candidates, who were themselves ruling party leaders, were strategically planted to show some non-AL victories. But the fact remains that every candidate was a member of the AL or an AL affiliate.

On the morning of election day, polling stations were empty all over the country. Just before foreign observers visited, people repeatedly came and stood in polling lines to create a false appearance of voter participation. There were rampant cases of ballot stuffing and even minors were observed casting votes. Despite the empty polling stations and boycotts, the Election Commission claimed a turnout of 41.8 per cent. 

Among the 298 elected members of parliament, 295 were either officially nominated by the ruling party, were independents who were in fact members of the party, including former ministers and parliamentarians, or were members of the allied Jatiya party. 

Bangladesh witnessed several economic downtrends in 2023, including a hike in the cost of living, inflation, declining foreign reserves and rampant corruption. The extremely low voter turnout could be seen as a sign of public dissatisfaction with the current regime’s economic mismanagement. Garment workers protested in 2023 to demand wage hikes and these protests were violently crushed with police killing several workers. 

Any democratic government would be fearful of this kind of economic mismanagement and brutal repression if there were fair elections where people were able to vote against the incumbent. But since the main opposition party boycotted the election, people had only one choice left to express their dissatisfaction — not showing up to vote.

Despite the visa restriction policy, several high-profile delegation visits and letters sent to major political parties, the United States’ attempts to ensure free and fair elections did not materialise. After the flawed election, the United States issued a somewhat timid statement declaring that the elections were ‘not free and fair’. The United Kingdom also stated that the standards of credible, open and fair competition were not consistently met during the election period. 

But the Western world has also expressed interest in working with the Bangladeshi government. As the current government is increasingly leaning towards China, 2024 could witness a stronger Chinese footing in the country. Domestically, the mounting authoritarian tendency of the one-party government, deteriorating economic conditions and a worsening energy crisis could give rise to violent unrest in 2024.

• About the author: Saimum Parvez is a Marie Curie Postdoctoral Research Fellow at Vrije Universiteit Brussels, Belgium.
• Source: This article was published by East Asia Forum