Tuesday, July 07, 2015

Is Massive Eurozone Lending by Strong EU and Other Nations to Weak Economies a Clever Long Term Plan of Indirect Currency Devaluation?

The Economist has a piece on the Greek debt crisis.

Here is our question for the pundits.

Let's say for purposes of calculation that there are ca. 10000000 Greeks (it is actually more like 11 million) with a government debt of ca. €300000000000 (some say 320 billion). Reduce both by 7 zeros and you get ca. €30000 per Greek. The question then becomes why it was permitted to loan out that kind of money to a basically non-industrial 3rd world nation that has no structural basis to ever repay that kind of exorbitant debt.

Is the indirect devaluation of the Euro over time actually a clever long-term financial plan instituted by strong nations via absurdly exorbitant lending to weak borrower nations? What other rational explanation is there?

Sunday, July 05, 2015

Sizing Up the Debt Situation in Greece

Zachary Goldfarb at the Washington Post Wonkblog sizes up the debt crisis in Greece.

Saturday, July 04, 2015

The Top New Gear of Summer: Golfboard Water Bikes Electric Quadrofoil Speedboat E-Skateboard and More

Is futuristic "gear" the new trend in gadgets and inventions? Robb Report clues us in on the top new gear of summer, if you can afford it and have the time to enjoy it.

For stand-up golfers, check out the new golfboard that carries bag, clubs and player. It is a hit and already available at nearly 100 golf courses.

Have you ever dreamt of water-biking? We want a couple of these for the family!

A "quiet" electric "Quadrofoil" speedboat is straight out of tomorrow. 21 knots!

How about an electric skateboard that goes 20 mph and ranges 20 miles?

Who can resist a light designer kayak you fold up into the size of a college football tote bag? Take it with you!

Handcrafted standup paddleboards to keep you fit are at the same time also works of art. Take a look.

Climb the heights with a high end mountain bike made through cooperation of bicycle and automobile engineers.

Imagine a cast concrete no-warp billiard table or the same construct for table tennis. Weatherproof, at a cost.

Photograph it all with an innovative Leica Q that has great specifications but is nearly light as a feather.

Faster, lighter, better. That is the design-oriented but practical future of gear.

Friday, July 03, 2015

Free Windows 10 Will Be Licensed to the Device, Not to the User as Such

Coming at the end of July.... See Tech Republic for the details regarding the practical scope of the free installation of Windows 10 on PCs running Windows 7 and 8.1.

Thursday, July 02, 2015

The USA and the UK are also Big Creditors of Greece

A list of countries to whom Greece owes money is found in a BBC News article titled 'No' vote 'won't help Greece'. Surprisingly, also the United States of America and the United Kingdom are big creditors of Greece.

Saturday, June 27, 2015

New York Times Editorial Board Op-Ed on SCOTUS Obamacare Decision

The New York Times has an Editorial Board op-ed  regarding the U.S. Supreme Court's decision in Obamacare II at The Supreme Court Saves Obamacare, Again - NYTimes.com. We agree with their assessment, but it is substantially more political than the Greely piece referred to in the previous posting.

At Stanford Lawyer Law Prof Henry T. Greely Has a Rational Assessment of the U.S. Supreme Court Decision in Obamacare II

To get away from all the biased partisan assessments online of the U.S. Supreme Court's most recent decision on Obamacare see On King v. Burwell and the Survival of the Affordable Care Act « Stanford Lawyer.

Friday, June 26, 2015

The Greek Financial Crisis and the Eurozone: Has Anything Substantial Changed in the Last Four Years? Are There Any Solutions?

We have always been fans of Greece, particularly ancient Greek history, and have even written about it. See The Phaistos Disc: An Ancient Enigma Solved: Two corroborative Old Elamite scripts can be deciphered using the Greek syllabic values obtained for the Phaistos Disc by A. Kaulins in 1980.

Greece is a marvellous country and we have also vacationed there -- some years ago, enjoying superb Greek hospitality, food, music and lifestyle.

Ever since antiquity, and surely since the days of the Trojan Horse, the Greeks have always had the reputation of being keen and clever persons, a cleverness that modernly extends deep into the business and economic world.

As written at Bloomberg in Billionaire Greek Ship Owners Surface While Home Economy Sinks:
"Greeks have long dominated the shipping business. The nation’s fleet, numbering 3,669 vessels in 2013, is the largest in the world, according to the annual report of the Union of Greek Shipowners, making up more than 7 percent of the Greek economy and providing 192,000 jobs in 2013.

Greece’s shipping magnates control 23 percent of the world bulk carrier fleet, according to the report, even as their home country accounts for less than 0.4 percent of the world economy. 

...
As social pressures mount, the privileged tax status of the shipping industry has come under increasing scrutiny as successive Greek governments look to boost revenue. The industry pays no tax on international earnings brought into the country under rules incorporated in Greece’s constitution in 1967." [emphasis added]
But that cleverness poses modern problems.

Given the above knowledge about the virtual non-taxation of shipping in Greece, many observers in the world and in the European Union viz. Eurozone have little sympathy for the present Greek financial crisis. A government that does not tax its major industries is not going to have much money.

Moreover, observers are astounded that Greece not only has the highest pensions spend in the Eurozone, but seems unwilling to reform its vast overspending habits or to make major reforms to a totally skewed national economy that has ca. 800000 civil servants, whereas, by population, if compared to the number of civil servants in the United Kingdom, it should have maximally only 80000 civil servants, i.e. 1/10th that amount.

The reality is that e.g. citizens in France and Germany have saved their money over decades and have saved that money in banks who have loaned that money out inter alia to Greece, in effect, as it turns out, to finance Greek overspending and to subsidize the Greek shipping business, which, as noted above, pays virtually no taxes.

Now that is cleverness on the part of the Greeks and one should view it as such. We live in a world where people get what they can, if you let them.

But now the trick is known, and it should not go on indefinitely.

It turns out that the Greek government owes so much money to banks that Greece has little hope of ever repaying the vast monies that have gone to finance the past decades of Greek overspending with money financed north of the Alps. As written by Mehreen Khan at the Telegraph: "Greece's debt mountain is set to rise to 180pc of GDP this year."

Is there a workable path out of the situation?
or is this now the end for Greece in the Eurozone?
See
Greece talks to go down to the wire amid fears of imminent banking collapse

The problem of the European Union, the Eurozone and the Greek financial crisis was discussed in understandable form at the London Review of Books by John Lanchester in Once Greece goes…: Any hope for the euro? · LRB 14 July 2011.

That was FOUR years ago.

If one reads the article now, and one really should read it to understand the core essentials of the problem, it would appear to this observer that virtually nothing substantial has changed in the last four years in terms of any truly effective structural economic and financial improvements in Greece.

As Paul Krugman has long pointed out, simple austerity is not working and of course can not work. It never has, because it shrinks an economy that needs to be growing fast to meet its spiral of increasing debts. Austerity has merely led to increasingly high levels of unemployment and many other social evils.

As for obtaining more government money via taxation, a government must focus on the people who have that money, and not on those who do not have it. In Greece, the rich pay few taxes, and, indeed, the richest industry, shipping, is virtually freed from taxation. How is government finance then supposed to work? Where is the money to come from if home industry does not pay it? The answer has been that loans from northern nations have been paying the bills.

In other words, it is no wonder that the problem of Greece persists still today.

It is equally understandable that there are many proposed solutions:
  • The Greeks themselves, as could be expected, are pragmatic. As written by John Hooper at the Guardian in Greece’s plight at odds with public's lack of concern as default deferred – for now (this was in May):
    "Kostas Panagopoulos, of Alco Polls, said a survey he carried out last month indicated the public was already resigned to compromise: 52% of respondents said they wanted a deal with Greece’s creditors “even if the prime minister had to step over those red lines”.
    Hence, we expect a compromise whose reaching Greece will surely prolong as long as possible simply to win time.
  • No Simple, Painless Solutions for Greece: Das - "Risk Consultant and Author Satyajit Das discusses Greece’s attempt to get new bailout terms from Germany and the ECB with Bloomberg’s Rishaad Salamat on “On The Move.
  • Mikio Kumada - Greece Should Sign Any Deal, LGT Capital's Kumada Says - "Mikio Kumada, a strategist at LGT Capital Partners Ltd., talks about the standoff between Greece and its creditors. He speaks in Hong Kong with Angie Lau on Bloomberg Television's "Asia Edge." (Source: Bloomberg)"
  • At Zero Hedge, Tyler Durden's picture - The Austrian Solution to Greece
  • A Greek exit from the Eurozone as the last option - Michael Nevradakis interviews Economist Roger Bootle in "Grexit" Is the Only Solution for Greece
We have a simpler solution: nationalize the shipping industry, confiscate private and business assets of the rich, wherever found, pay off the nation's debts, and go from there.

Of course, that will never be done, but our proposed solution, easily implemented, very clearly puts the focus on the cardinal question which is always: who pays????????

The clever ones seldom do.

Look at the digital era companies Apple and Google in the USA, who pay little corporate income tax, which is not "tax avoidance", as Tim Worstall has correctly pointed out at Forbes in Can We Please Get This Straight, Apple And Google Do Not Avoid US Corporate Tax, but is simply utilisation of tax rule options provided to them by the laws, i.e. the government. It is comparable to the tax preferences viz. "exemptions" granted to the shipping industry in Greece. And Greece shows us where that kind of preferential treatment of corporations -- who make full use of the free infrastructures of government -- ultimatley leads: to government insolvency.


Thursday, June 25, 2015

The White House Letter Regarding Today's Supreme Court Decision Upholding Obamacare

The White House just sent out this email (as follows in content) regarding today's U.S. Supreme Court decision upholding Obamacare:

"On March 23, 2010, I sat down at a table in the East Room of the White House and signed my name on a law that said, once and for all, that health care would no longer be a privilege for a few. It would be a right for everyone.

Five years later, after more than 50 votes in Congress to repeal or weaken this law and multiple challenges before the Supreme Court, here is what we know today:

This law worked. It's still working. It has changed and saved American lives. It has set this country on a smarter, stronger course.

And it's here to stay.

If that means something to you today, add your voice here.

This morning, the Supreme Court upheld one of the most critical parts of health reform -- the part that has made it easier for Americans to afford health insurance, no matter where you live.

If the challenges to this law had succeeded, millions would have had thousands of dollars in tax credits taken away. Insurance would have once again become unaffordable for many Americans. Many would have even become uninsured again. Ultimately, everyone's premiums could have gone up.

Because of this law, and because of today's decision, millions of Americans will continue to receive the tax credits that have given about 8 in 10 people who buy insurance on the new Health Insurance Marketplaces the choice of a health care plan that costs less than $100 a month.

If you're a parent, you can keep your kids on your plan until they turn 26 -- something that has covered millions of young people so far. That's because of this law. If you're a senior, or have a disability, this law gives you discounts on your prescriptions -- something that has saved 9 million Americans an average of $1,600 so far. If you're a woman, you can't be charged more than anybody else -- even if you've had cancer, or your husband had heart disease, or just because you're a woman. Your insurer has to offer free preventive services like mammograms. They can't place annual or lifetime caps on your care.

And when it comes to preexisting conditions -- someday, our grandkids will ask us if there was really a time when America discriminated against people who got sick. Because that's something this law has ended for good.

Five years in and more than 16 million insured Americans later, this is no longer just about a law. This isn't just about the Affordable Care Act, or Obamacare.

This is health care in America.

Today is a victory for every American whose life will continue to become more secure because of this law. And 20, 30, 50 years from now, most Americans may not know what "Obamacare" is. And that's okay. That's the point.

Because today, this reform remains what it always has been -- a set of fairer rules and tougher protections that have made health care in America more affordable, more attainable, and more about you.

That's who we are as Americans. We look out for one another. We take care of each other. We root for one another's success. We strive to do better, to be better, than the generation before us, and we try to build something better for the generation that comes behind us.

And today, with this behind us, let's come together and keep building something better. That starts right now.

Thank you,

President Barack Obama"

U.S. Supreme Court Upholds Congress's Patient Protection and Affordable Care Act (Also Known as "Obamacare") in a 6-3 Vote in an Opinion Written by SCOTUS Chief Justice John G. Roberts and Joined Inter Alia by Justice Anthony Kennedy

It is a great day for America.

The Supreme Court of the United States (SCOTUS) has upheld The Patient Protection and Affordable Care Act ("Obamacare") in a 6-3 vote of the nine Justices. Read the majority opinion and dissent at SCOTUS.

We anticipated both the result and the reasoning of the holding in this case in our previous LawPundit posting of June 21, 2015 in Does Upholding Dewsnup in Caulkett Mean Obamacare Will Be Saved by the U.S. Supreme Court?

The majority opinion was written by Supreme Court Chief Justice John Roberts, joined by Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan, and to his great credit now, after dropping the ball on the first SCOTUS Obamacare case, by Justice Anthony Kennedy, who thereby returns to our good graces. When the going gets tough, the tough get going ... and do the right thing. Well done, Justice Kennedy!

Kennedy's shift to the majority from his minority stance in the first Obamacare case is in our opinion a strong signal that Obamacare-opponents are playing a losing game in their attacks on Obamacare.

The "terrible trio" of Justices Antonin Scalia, Clarence Thomas and Samuel A. Alito Jr. dissented, suggesting that they have learned little since the first Supreme Court Obamacare decision, in which they were also in the minority. It would be good if these three Justices would at some time in their careers rise above their personal political prejudices and private intellectual theories about law and the Constitution and be the wise and impartial Justices they should be, but are not, in deciding matters of great importance to the nation.

The U.S. Supreme Court should never overturn major laws as passed by Congress for linguistic hair-splitting reasons, and we say this as co-author of a dictionary, who knows how difficult pinpointing the meanings of words can be in reality, and how little proper attention is paid to linguistic detail in lawmaking.

If the nation ultimately wants it, nothing prohibits Congress from repealing Obamacare, which is unlikely, however, since it has been a success. What Scalia writes in his dissent -- even resorting to calling Obamacare "SCOTUS-care" -- is ridiculous, and unfit for a Supreme Court Justice. Not worthy of that position.

 Indeed, as Roberts observes in the majority opinion concerning "the words":
"The Affordable Care Act contains more than a few examples of inartful drafting.
...
Several features of the Act's passage contributed to that unfortunate reality. Congress wrote key parts of the Act behind closed doors, rather than through "the traditional legislative process." Cannan, A Legislative History of the Affordable Care Act: How Legislative Procedure Shapes Legislative History, 105 L. Lib. J. 131, 163 (2013). And Congress passed much of the Act using a complicated budgetary procedure known as "reconciliation," which limited opportunities for debate and amendment, and bypassed the Senate's normal 60-vote filibuster requirement. Id., at 159-167.  As a result, the Act does not reflect the type of care and deliberation that one might expect of such significant legislation.
Adam Liptak at the New York Times in Supreme Court Allows Nationwide Health Care Subsidies pinpoints the most important issue in the Roberts opinion:
"Chief Justice Roberts wrote that the words must be understood as part of a larger statutory plan. “In this instance,” he wrote, “the context and structure of the act compel us to depart from what would otherwise be the most natural reading of the pertinent statutory phrase.”

“Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them,” he added. “If at all possible, we must interpret the act in a way that is consistent with the former, and avoids the latter.”
That was, as we predicted, the essential and critical core of the case.

We quote Roberts directly from the opinion:
"We have held that Congress "does not alter the fundamental details of a regulatory scheme in vague terms or ancillary provisions." Whitman v. American Trucking Assns., Inc., 531 U. S. 457, 468 (2001).  But in petitioners' view, Congress made the viability of the entire Affordable Care Act turn on the ultimate ancillary provision: a sub-sub-sub section of the Tax Code. We doubt that is what Congress meant to do. Had Congress meant to limit tax credits to State Exchanges, it likely would have done so in the definition of "applicable taxpayer" or in some other prominent manner. It would not have used such a winding path of connect-the-dots provisions about the amount of the credit.5

Petitioners' arguments about the plain meaning of Section 36B are strong.  But while the meaning of the phrase "an Exchange established by the State under [42 U. S. C. §18031]" may seem plain "when viewed in isolation," such a reading turns out to be "untenable in light of [the statute] as a whole." Department of Revenue of Ore. v. ACF Industries, Inc., 510 U. S. 332, 343 (1994).  In this instance, the context and structure of the Act compel us to depart from what would otherwise be the most natural reading of the pertinent statutory phrase.

[LawPundit note: The text of Footnote 5 is omitted in this excerpt.] 
Reliance on context and structure in statutory interpretation is a "subtle business, calling for great wariness lest what professes to be mere rendering becomes creation and attempted interpretation of legislation becomes legislation itself." Palmer v. Massachusetts, 308 U. S. 79, 83 (1939). For the reasons we have given, however, such reliance is appropriate in this case, and leads us to conclude that Section 36B allows tax credits for insurance purchased on any Exchange created under the Act. Those credits are necessary for the Federal Exchanges to function like their State Exchange counterparts, and to avoid the type of calamitous result that Congress plainly meant to avoid.
                                                *   *   *
In a democracy, the power to make the law rests with those chosen by the people. Our role is more confined
—"to say what the law is." Marbury v. Madison, 1 Cranch 137, 177 (1803). That is easier in some cases than in others.  But in every case we must respect the role of the Legislature, and take care not to undo what it has done.  A fair reading of legislation demands a fair understanding of the legislative plan.
Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them.  If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter. Section 36B can fairly be read consistent with what we see as Congress's plan, and that is the reading we adopt."
Exactly. Right on the money. That is good, solid jurisprudence.

Bravo, Justice Roberts and bravo to the majority on the U.S. Supreme Court!

Roberts and the majority of Justices have done their job, which is to interpret laws rationally. The minority trio have -- again -- dropped the ball.

The Mainstream Press

We refer here to other early reports about this event in the mainstream press:

Wall Street Journal, Washington Wire
Supreme Court Upholds Health-Care Subsidies–Live Blog

The Boston Globe - Mark Sherman
Supreme Court rejects challenge to Obama’s health care law

NPR - Krishnadev Calamur
Supreme Court Rules Obamacare Subsidies Are Legal

USA Today - Richard Wolf and Brad Heath
Supreme Court upholds Obamacare subsidies





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