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Richmans' Trade and Taxes Blog
The Gods of the Copybook Headings are in Cyprus Now, and Coming Here Soon
The above you-tube video shows Glenn Beck reading Rudyard Kipling's 1919 poem, The Gods of the Copybook Headings. In that poem, Kipling compares the truths of the real world ("the Gods of the Copybook Headings") with the promises of social progressives ("the Gods of the Market Place"), and he concludes that nations which follow the false promises of the social progressives eventually rediscover reality, often when it is too late.
In his April 2 column (Today, Cyprus, Tomorrow…) Pat Buchanan sees the Gods of the Copybook Headings at work in Cyprus today. He argues that those investors who loaned their money to Cypriot banks were ignoring reality, writing:
Buchanan is correct, but the failure to pay attention to reality goes much deeper. It was not only those who loaned money to Cyprus who were ignoring reality, it was also the Cypriot government itself, along with the governments of the other southern European countries that foolishly joined the euro zone.
If there ever was an economic folly perpetuated by the Gods of the Market Place, it was the idea that if each country in Europe gave up its own currency, that they would all be more prosperous. After all, goods and services could flow freely over borders without need to exchange currencies. And besides, weren't they all making progress toward a one-world government which would bring about world peace? What a beautiful idea!
Instead, with interest rates the same all over Europe, the northern European peoples, whose cultures were formed in forbidding climates, saved more than the southern European peoples and loaned the southern European peoples money. The northern European countries got trade surpluses and prosperity and the southern European countries lived beyond their means and lost their industries. Countries cannot forever add on debt, eventually they become bad credit risks -- Cyprus and Greece today, Portugal, Spain, Italy and France tomorrow.
Meanwhile, in the United States, the Gods of the Market Place have taught us that the free movement of savings across borders is good and that tariffs are bad. So we let Asian countries manipulate the exchange rates between their currencies and ours, and we never charge a trade balancing tariff. Their governments buy the dollars that their exporters earn from trade and lend them to us so that we can continue to buy their products, and they can continue to keep out ours. They get industries; we get debt.
The Gods of the Copybook Headings are in Cyprus now, and will be coming here soon.
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