So the Financial Transaction Tax is back in the headlines, with the European Court of Justice dismissing the British government’s legal challenge on the frankly not unreasonable grounds that the FTT does not exist yet and therefore that there is nothing for the UK to be challenging at the moment. No doubt the lawyers still got paid. All we have to go on is the European Commission’s October 2011 draft directive, titled in fluent Eurospeak ‘Proposal for a Council Directive on a common system of financial transaction tax and amending Directive 2008/7/EC’ (COM/2011/594), which would apply to securities trades where at least one of the contracting parties is in the EU.
The so-called ‘Robin Hood Tax’ is advertised as a revenue measure, which is hardly surprising given that it was put forward in the midst of the Eurozone crisis brought about by unfunded government spending commitments. Indeed, the very first paragraph of the proposal states that, “There is a strong consensus within Europe and internationally that the financial sector should contribute more fairly given the costs of dealing with the crisis and the current under-taxation of the sector.” As usual with EU proposals, then, the problems start to appear from the first sentences and pile up from there. Read more
In his 1976 essay Criticism, the musician and broadcaster Hans Keller wrote that, “in order to prove its phoniness beyond reasonable doubt, a profession has to create grave problems which it then fails to solve.” Since he had been active in most of the professions which he then proceeded to demolish by setting out the false and often self-serving assumptions on which they are based, we found ourselves thinking of Keller when we read James Rickards’ excellent new book The Death of Money, for this is a financier’s deconstruction of much of the general thinking about finance, much of it mistaken and sometimes wilfully so.
Could there be a more phoney profession than monetary policymaking – that High Priesthood of the Age of Finance Socialism? Perhaps only its devoted acolytes, the private-sector investment advisers and financial pundits who profess the ability to read between the lines of the policymakers’ public statements and thereby predict their next move. Or worst of all, those academic economists who so perfectly fit the second part of Keller’s definition: “[a]ll phoney professions…stand or fall with their capacity to criticise somebody or something or both – to criticise both negatively and self-righteously, with moralising aplomb.” Fortunately, we have The Death of Money: an essential manual for understanding the dangerous undercurrents of the monetary system and the world economy by a real as opposed to a phoney professional. Read more