The Cynical Economist

From The Telegraph

Brussels bureaucrats were ridiculed yesterday after banning drink manufacturers from claiming that water can prevent dehydration.

EU officials concluded that, following a three-year investigation, there was no evidence to prove the previously undisputed fact.

Producers of bottled water are now forbidden by law from making the claim and will face a two-year jail sentence if they defy the edict, which comes into force in the UK next month.

Last night, critics claimed the EU was at odds with both science and common sense. Conservative MEP Roger Helmer said: “This is stupidity writ large.

“The euro is burning, the EU is falling apart and yet here they are: highly-paid, highly-pensioned officials worrying about the obvious qualities of water and trying to deny us the right to say what is patently true.

read the rest here

The new water bottle label proposed by the TCE…

It is just too damn bad that the USA are walking the same road to perdition.

Right now we have on the books so many laws, rules and regulation, that I can bet you, that at this very moment, anyone of us is in some violation of some law…

I hope those EU paper pushers did it, just to piss off the Greeks, denying them the roots of the word “HYDRO”. You see we bailed you out, but in return “hydro” is now not going to mean what it used to mean…

Obama: My Plan Makes Electricity Rates Skyrocket – Barack Obama: “Under my plan of a cap and trade system, electricity rates would necessarily skyrocket.” (That video is from January 2008)

Now we have those news stories in May and June 2011 ….

Coal Regs Would Kill Jobs, Boost Energy Bills –

Two new EPA pollution regulations will slam the coal industry so hard that hundreds of thousands of jobs will be lost, and electric rates will skyrocket 11 percent to over 23 percent, according to a new study based on government data.

Overall, the rules aimed at making the air cleaner could cost the coal-fired power plant industry $180 billion, warns a trade group.

“Many of these severe impacts would hit families living in states already facing serious economic challenges,” said Steve Miller, president of the American Coalition for Clean Coal Electricity. “Because of these impacts, EPA should make major changes to the proposed regulations before they are finalized,” he said.

The EPA, however, tells Whispers that the hit the industry will suffer is worth the health benefits. “EPA has taken a number of sensible steps to protect public health, while alsoworking with industry and other stakeholders to ensure that these important Clean Air Act standards—such as the first ever national Mercury and Air Toxics Standards for coal-fired power plants—are reasonable, common-sense, and achievable,” said spokesman Brendan Gilfillan. [Read Rep. Darrell Issa: Obama's Bad Policy, Harmful Regulations Add to Gas Prices.]

What’s more, officials said that just one of the rules to cut sulfur dioxide and nitrogen oxide emissions will would yield up to $290 billion in annual health and welfare benefits in 2014. They say that amounts to preventing up to 36,000 premature deaths, 26,000 hospital and emergency room visits, and 240,000 cases of aggravated asthma. “This far outweighs the estimated annual costs,” says an official on background.

You see they are doing it for our own good….Right?

We may not have jobs but we will live longer (presumably)

Never mind that on the other side of the globe, China is using 3 times more coal than America.

What is EPA going to do about that? How are they going to prevent Chinese pollution in the air from entering through the American borders?

Answer that EPA!

China Overtakes U.S. As Top Energy Consumer

The report says China’s consumption rose by 11.2 percent last year compared with 3.7 percent in the United States. China’s surge led a 5.6 percent increase in global energy demand, the biggest one-year jump since 1973.

China was by far the world’s largest consumer of coal, taking 48 percent

China is Coal country

Obama Administration Spends $17.4 Million to Explore Market for Carbon Credits

The Department of Agriculture (USDA)announced that it has awarded $17.4 million for pilot projects that will begin exploring how to establish a market for greenhouse gas (GHG) credits, a key component of a cap and trade system, to help reduce carbon and other emissions that apparently contribute to global warming.

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In a cap and trade system, farmers, ranchers, and other agriculture producers theoretically stand to make money by selling credits to other, GHG-intense businesses such as manufacturers and power companies.

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The Agriculture Department was getting involved in the establishment of carbon markets, which currently exist only in states like California and the Northeast, was to better integrate the federal government into regional cap and trade systems, so that the government has a better understanding of how GHG offset markets function.

But in reality what is happening in Europe that instituted the cap and trade? Millions of pollution permits in Europe’s emissions trading scheme do very little for the environment….Here is a story from January 2011

Europe must ban flawed carbon credits

European emitters of greenhouse gases, mostly power companies, find it easier to buy in carbon credits from China and India to meet their targets than to cut the emissions of their own operations.

So who loses out? The environment, of course. Instead of the money going to schemes that genuinely tackle emissions and slow global warming, it pays for a scheme in which there is a massive incentive for industrial plants to keep producing the gases they are then paid handsomely to destroy.

What we are doing in America with the coal industry can be compared with what European Union is doing with their Airline industry…. Committing economic suicide

EU carbon trading scheme to burden European airlines

With the European Union’s emissions trading scheme (ETS) set to affect airlines next year, Lufthansa CEO Christoph Franz has warned the cap-and-trade plan will put Europe’s airlines at a competitive disadvantage.

Those additional costs couldn’t completely be passed on to customers because of intense fare competition in the sector, Franz explained. Chinese officials told him during a trip to the country this month they would consider imposing fees on European flights to counter the costs of ETS credits, he added.

Karin Holm-Müller, an environmental economist at the University of Bonn and a member of the German government’s advisory board on environmental policy, said airlines aren’t the first industry branch to fear cap-and-trade arrangements will dull their competitive edge.

“Considerations have been made to some degree about whether individual industries are too affected in competition [by cap-and-trade system],” she told Deutsche Welle. “One could consider how significantly air travel is affected… but in principle air travel should be included in the cap-and-trade system because it offers an additional opportunity to reduce greenhouse gas emissions.”

According to Michel Adam, environment manager for the Association of European Airlines (AEA) in Brussels, airlines from other continents are only affected when they touch down in Europe under the ETS plan.

“If you travel from North America to Asia and your journey includes a stopover at an EU airport, then the whole journey will be covered by the ETS and will have to include its price,” Adam said. “So flying via Dubai or North Africa would be cheaper than flying through the EU.”

From Spiegel Online
By Peter Müller

Surveys show that many Germans are worried about the future of the euro, but the country’s political parties are not taking their fears seriously. The number of grassroots initiatives against the common currency is increasing, and political observers say a Tea Party-style anti-euro movement could do well.

As a playwright, Rolf Hochhuth knows how to use timing to achieve the greatest possible impact. In the 1960s, he criticized the pope for remaining silent about the Holocaust. When everyone in the world was talking about globalization, he took to the theater stage and unmasked consulting companies like McKinsey as exploitation machines.

Now Hochhuth is campaigning against the euro — and his stage is Germany’s Constitutional Court. “Why should we help rescue the Greeks from their sham bankruptcy?” he asks. “Ever since Odysseus, the world has known that the Greeks are the biggest rascals of all time. How is it even possible — unless it was premeditated — for this highly popular tourist destination to go bankrupt?”

In the spring, he joined a group led by Berlin-based professor Markus Kerber that has filed a constitutional complaint against the billions in aid to Greece and the establishment of the European stabilization fund, which was set up in May 2010. Hochhuth wants the deutsche mark back. “I don’t know if this is possible. I only know that Germany lived very well with the mark.”

It’s an opinion that suddenly places this nearly 80-year-old man in a rather unusual position, at least for him: on the side of the majority of Germans…

read the rest

Leaders of the EU intend to amend the Lisbon Treaty to allow bailouts of weak and poorer members. Is this the beginning of the end of the EU?

From The Guardian
by Ian Traynor

European commission proposal would end Britain’s rebate
Brussels wants to borrow large sums for infrastructure projects

The EU executive made its case today for a new system of European taxation to streamline and underpin Brussels’ budget, replacing the contentious regime of national contributions as the basis for EU funding.

In the opening salvo of what promises to be a bruising, two-year battle to set EU spending up to 2020, the European commission argued for a phased end to, or reduction of, national contributions and the introduction of new budgets based on “own resources”, tax revenue directly levied by Brussels.

The new system could involve a dedicated European VAT rate, with the money raised going to Brussels, as well as EU taxes on air travel, carbon emissions, banks or financial market transactions.

“The current system of EU financing has evolved piecemeal into a confusing and opaque mix of contributions from national budgets, corrections and rebates,” the commission said. “A fresh look is essential, to re-align EU financing with principles of autonomy, transparency and fairness.”

The commission, presenting its budget reform plan to the European parliament in Strasbourg, also said that Brussels should be empowered to borrow large sums on the markets, using the EU budget as collateral by issuing bonds to underwrite major infrastructure projects. It also wanted the current seven-year budget planning periods extended to 10 years.

“The commission does not believe that the current mix of member state contributions and own resources is the right one,” said José Manuel Barroso, the commission president. “This is not a question of an EU tax but of finding new sources of financing to gradually replace member states’ contributions.” He added: “We also need to look at the byzantine set of corrections and trade-offs,” indicating an end to the £2.6bn annual rebate to the UK.

This year’s EU budget is €132bn (£116bn), 2.5% of public spending across the 27 states. Three-quarters of that comes from countries’ contributions, with the remainder generated by a proportion of states’ VAT and customs receipts.

While today’s proposals concerned 2014-2020, the commission is also pushing for a 6% increase in next year’s budget, prompting warnings of “a backlash against Brussels” by Vince Cable, the business secretary.

The logic of today’s proposals would be to do away with “Margaret Thatcher’s rebate”, the refund, about €3bn a year, won by the Tory prime minister in 1984 and a perennial source of friction between Britain and the rest of the EU.

Last month in Brussels, George Osborne, the chancellor, insisted the rebate was non-negotiable.

TCE thinks that Joseph Stiglitz is right, that the euro may collapse, but the reason will be completely different, than the “wave of austerity”.

I think the reason would be that the wealthiest countries will be soon fed up paying billions of euros to poorest in the union for different projects, without any return on their “investment”.

The poorest continue to be politically corrupt and fake their budgets, so they show growth, but in reality they cannot show where the money are being spend.

According to Transparency International: Bulgaria, Greece, Romania most corrupt EU states, but they are the countries that receive a lot more money from EU than they give…

Sorry, but that is how the economic laws work – if you make the richest country give, and give, and give, as EU does and they cannot see incentive to give more of  their money, but only promises like :”Please pay up ! It is for the best of all of us”….

At the end the rich will say “fuck it” and they will stop paying one way or another…

From Telegraph
By Kamal Ahmed

Joseph Stiglitz, one of the world’s leading economists, has warned that the future of the euro is “looking bleak” and the fragile European economic recovery could be irreparably damaged by a “wave of austerity” sweeping the continent.

he former chief economist of the World Bank and a Nobel prize winner also predicted that short-term speculators in the market could soon start putting pressure on Spain, which is struggling with a large deficit and high unemployment. Last week, Moody’s cut the country’s credit rating from AAA to Aa1.

The former adviser to President Bill Clinton also says that the banking sector has gone back to “business as usual” too quickly and that there are still risks of another financial crisis despite some improvements in regulation.

Mr Stiglitz, now a professor at Columbia Business School, makes the arguments in an updated edition of his book, Freefall, on the credit crunch. In the new material, exclusively extracted in today’s Sunday Telegraph, he reveals fears that governments around the world will attempt to cut their deficits too quickly and risk a double dip recession.

Tomorrow, George Osborne will outline the Government’s latest plans for multi-billion pound public sector cuts to tackle the historically-high UK deficit. He has faced criticism that the Coalition is in danger of cutting too hard and too fast but the Chancellor has said that without a credible programme for getting the UK economy into balance, interest rates will rise and growth will be choked off.

“The worry is that there is a wave of austerity building throughout Europe and even hitting America’s shores,” Mr Stiglitz said. “As so many countries cut back on spending prematurely, global aggregate demand will be lowered and growth will slow – even perhaps leading to a double-dip recession.

“America may have caused the global recession but Europe is now responding in kind.”

Mr Stiglitz warned that Spain, similarly to Greece, was now in the speculators’ sights.

“Under the rules of the game, Spain must now cut its spending, which will almost surely increase its unemployment rate still further,” he said. “As its economy slows, the improvement in its fiscal position may be minimal.Spain may be entering the kind of death spiral that afflicted Argentina just a decade ago. It was only when Argentina broke its currency peg with the dollar that it started to grow and its deficit came down.

“At present, Spain has not been attacked by speculators, but it may be only a matter of time.”

Turning to the euro, Mr Stiglitz said that the different needs of countries with high trade surpluses, particularly Germany, and those running deficits such as Ireland, Portugal and Greece, meant that the single currency was under intense pressure and may not survive. He suggests that one way to save the euro would be for Germany to leave the eurozone, so allowing the currency to devalue and help struggling countries with exports.

“Countries that share a currency have a fixed exchange rate with each other and thereby give up an important tool of adjustment,” he said. “So long as there were no shocks, the euro would do fine. The test would come when one or more of the countries faced a downturn.”