We are all suspects now.

Ambrose Evans-Pritchard on the prospects for the European Union as the crisis develops:

The euro fathers did not dispute that the euro might not survive a crisis, but they saw EMU as an instrument to force the pace of political union. They welcomed the idea of a “beneficial crisis”. As ex-Commission chief Romano Prodi remarked, it would allow Brussels to break taboos and accelerate the move to a full-fledged EU economic government.

What a horrifying thought.

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Reflecting on the demise of Lehman Brothers and on Bank of America’s purchase of Merrill Lynch, I revisited an article by recent US presidential candidate Ron Paul, posted on mises.org:

Capitalism should not be condemned, since we haven’t had capitalism. A system of capitalism presumes sound money, not fiat money manipulated by a central bank. Capitalism cherishes voluntary contracts and interest rates that are determined by savings, not credit creation by a central bank. It’s not capitalism when the system is plagued with incomprehensible rules regarding mergers, acquisitions, and stock sales, along with wage controls, price controls, protectionism, corporate subsidies, international management of trade, complex and punishing corporate taxes, privileged government contracts to the military-industrial complex, and a foreign policy controlled by corporate interests and overseas investments. Add to this centralized federal mismanagement of farming, education, medicine, insurance, banking and welfare. This is not capitalism!

It’s hard to agree with Paul on the requirement for a gold or other commodity-based currency: another great believer in freedom, Friedman, dismisses the idea convincingly in Capitalism and Freedom, before asking:

If we can achieve our objectives neither by relying on the working of a fully automatic gold standard, nor by giving wide discretion to independent authorities, how else can we establish a monetary system free from irresponsible governmental tinkering, a system which will provide the necessary monetary framework for a free enterprise economy yet be incapable of being used as a source of power to threaten economic and political freedom?

We need some fine minds on this problem, minds that can find a sound alternative to the present system that will enable the restoration of competitive, free market capitalism and the prospect of avoiding boom and bust.

I see the European Commission is pressing ahead with legislation to “beef up” bank supervision: let’s hope they get it right.

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An illuminating article from Chris Heaton-Harris MEP. Some example budget items:

• National support programmes for the wine sector – £662m.
• European Foods Safety Agency – £58.3m.
• Jean Monnet programme and similar, to “support institutions active in the field of European integration” – £779m.
• EU as a Global Player – £6.2bn.
• Contributions to European political parties “which contribute to forming a European awareness” – £8.3m.

Recommended reading.

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EU propaganda, now withdrawn, but thanks to the Wayback Machine, you can still view the site:

What fun.

Thank you Ireland:

“Where is the humility? Where is the sense of them listening to the people’s concerns?” the Sinn Féin spokesman asked on Irish radio.

Who would have thought I would ever agree with a Sinn Fein spokesman? (I clearly recall checking under my car, every drive, for IRA bombs.)

So will the EU respond by genuinely reforming to restore sovereignty, diversity and democracy to the nations of Europe, or will they blunder on, perhaps illegally, with further sophistry?

I think this will get worse before it gets better but, tonight, champagne.