The German Court’s Unexpected Blow to the ECB

That there are inherent benefits in diversity is a common article of faith in our democratic/populist times. We hear it in and about universities, businesses, politics, entertainment, etc. Typically, though, we hear about it in terms of forcing more diversity on those whose diversity in a particular dimension doesn’t measure up to someone else’s arbitrary standard.

Today’s brand of the left-leaning politician is all about substituting what sounds good for what actually works. Modern politics, whether in the US or Europe, is about taking a chainsaw to everything that produced even a modicum of success to appease the deities espousing progressive orthodoxy.

According to the US Labor Department, worker productivity in the non-farm sector increased at an annual rate of 1.4 percent in the fourth quarter of 2019 after declining by 0.2 percent in the previous quarter. For the year, productivity increased 1.7 percent, up from 1.3 percent in both 2017 and 2018. It was the best annual showing since the 3.4 percent increase in 2010.

During the early 1990s, as the world of the old Soviet Bloc was rapidly falling apart, Murray Rothbard saw it all for what it was: a trend of mass decentralization and secession unfolding before the world’s eyes. The old Warsaw Pact states of Poland, Hungary, and others won de facto independence for the first time in decades. Other groups began to demand full blown de jure secession as well.

[This article is excerpted from a talk delivered on February 22, 2020 at the Austrian Student Scholars Conference, hosted by Grove City College in Pennsylvania.] I. Introduction What a wonderful gathering of students today, on this impressive and beautiful campus. We can see why Hans Sennholz loved this place, and why Drs. Herbener and Ritenour so enjoy living and teaching here.

On December 12, Christine Lagarde introduced her goals and vision in her first rate-setting meeting as the new president of the European Central Bank (ECB). On the actual policy front, there were no surprises. She remained committed to the path set by her predecessor, Mario Draghi, and kept the current monetary stimulus unchanged.

A unique feature of the Swiss Federal Constitution is the fact that the central government’s power to impose direct taxes on citizens expires every decade or so. In fact, the current taxing authority expires at the end of 2020. Fortunately for the Swiss republic’s central government, voters approved an extension (the “New Financial Regime 2021”) for another fifteen years in a March 2018 election.

It remains unclear how much the stock market implosion of recent days will affect the larger economy. As David Stockman has noted often, the Wall Street economy is not synonymous with the Main Street economy, contrary to what the advocates of rampant bank bailouts and financialization would have us believe.