Crumbs

• UK trails the world in vaccinating its population
• Trump caught trying to rig election count in Georgia,
• Janet Yellen caught out taking millions of dollars in speaking fees from Wall St. Not illegal, but not a good look. Compare Edward Luce pointing out that the Fed has created political instability in America,
• $LMND is a fraud, and like many frauds it is associated with something people associate with virtue: ESG.
• Boris Johnson’s father applies for a French passport,
• This recession has insane levels of job losses: ,
• It’s not only US money supply which is exploding:

To devolve or to not devolve

I recently read ‘The Conscience of a Conservative’ by Barry Goldwater. He was the candidate that made it possible for Reagan to win about twenty years later. The book argues passionately to give power to the individual states of the USA, because the constitution says that any power that is not explicitly granted to the Federal Govt. is to be retained by the state (assuming that it is given up by the individual at all). This protects diversity and also protects minorities from being oppressed by a (narrow) national majority. It allows individuals the option of moving state, as a modest antidote to a bad state government. Goldwater argued that once, e.g. education becomes regulated by the Federal govt. it ends up funding it and providing a stifling blanket of mediocrity over the whole country.

I was listening to the MMT Podcast, where Warren Mosler was talking about MMT (what else?). In it, he happened to talk about AOC, and her hostility to Amazon and her campaign against it which coincided with it’s contemplation of starting a second national headquarters in NY State. In this he made the argument that states should not be allowed to set their own levels of taxation and spending, because this would result in a ‘race to the bottom,’ as large corporations like Amazon played off states against each other in order to get a better tax deal. He was very critical of the EU, which allows states like Ireland and Luxembourg to be tax havens, of a kind, while enjoying all the benefits of being in a large economic block.

I am a Coasian Libertarian. I recognize the vital role the state fills both in providing public services and in setting a level playing field (and enforcing the rules of the game which is played on that field). These two arguments both have merit. I think the key is to mandate transparency of outcomes, but I am not sure even I am convinced by this.

What I have noticed, in practice, is that Mosler’s argument holds. A national government finds it hard to tolerate local governments doing their own thing, especially if there is any danger of this thing showing up the top level. So, on the grounds of banning the ‘postcode lottery’, all competition is banned and one-size-fits-all rules are applied to all regions. The result is stifling mediocrity, at best, and at worst rules which are very unsuited to peripheral regions. A classic example is a national minimum wage (cunningly rebranded ‘living wage’ in the UK, even though it’s a hourly minimum and if you only work part time it probably isn’t enough to live on). This is probably fine in London, but catastrophic in Merthyr Tyfil.

Anyway, power floats upward, concentrates in the hands of national governments and corrupts them completely, eventually.