This was a week to cause sleepless nights. The refugee crisis got worse. Infighting and border closures across Europe made it look as if the short-lived age of free movement within the European Union has come to an end. We all thought far too much about possible movements in US interest rates. And Jeremy Corbyn was elected leader of the Labour party. It's all been rather exhausting.
Sadly, we suspect it's going to get more so. The migration crisis is nearer its beginning than its end. That's because, regardless of the media obsession with Syria, it isn't really about Syria. And it isn't about war either. Instead, says James Fergusson, it is all about water scarcity. That means it isn't just displaced people from Iraq, Syria, Afghanistan and Yemen who want to come to our wet north. It's all of sub-Saharan Africa too. And there isn't anything we can do about that. This crisis will run and run, getting more politically fraught along the way. And it might well break the EU.
The eurozone's long-term survival lies in it having the political will to turn a monetary union into a fiscal union. But if it can't even keep its internal borders open for a month in a crisis, what chance does it have of completely merging the finances of its member states? Almost none. And if it can't do that, what chance does it have of making it through the next financial crisis? We'd say none at all.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
On the plus side, this may not be an issue for the UK. It's highly unlikely we'll ever again see a good case made for us to join the eurozone, and Corbyn's election might have taken us a step closer to leaving the EU (he sees it, as he sees everything else, as some kind of banker-led capitalist conspiracy and his supporters may vote his way).
John Stepek looks at this and the other financial/economic consequences of Corbyn in this week's issue. They mostly fall into the 'awake at night' category. But, as is our way, we've also tried to look on the bright side this week to think about things we might agree with Corbyn on, and come to appreciate his lobbying on. One is tax relief. The idea that the various tax reliefs on offer to corporates in the UK add up to the £90bn-odd Corbyn's advisers claim is nonsense. But there are still far too many ways to opt out of paying tax here (tax relief on interest being the worst) and we don't mind some light being shone on that.
Then there are wealth taxes. We are interested in land value taxation, and we gather Corbyn is too. We also think wealth is undertaxed, as does he. The problem, of course, is that he wants new taxes on top of old (we would prefer to slash income taxes in favour of wealth/land taxes).
But still, if he starts some of these conversations it may be no bad thing. I suspect we won't agree with much else (most of Corbyn's ideas add up to economic and social suicide). But I'd be interested to hear from you. I suspect not many of you voted for him as leader. But has he any policy ideas you approve of? Let us know in the comments below.
-
FTSE 100 hits record highs – why is it rising and will we see more gains?Advice UK equities have been described as unloved for a long time but as the FTSE 100 hits new highs, we explain if now is the time to buy British.
-
How to invest in copperIt may be time to invest in copper as the red metal appears poised for a big jump. Dominic Frisby looks at what should investors should buy
-
Inflation may be slipping but there is still plenty of misery aheadEditor's letter Inflation may be a little lower than last month as the prices of petrol and diesel fall back, but it remains structural and long-term, says Merryn Somerset Webb. And there are no painless solutions.
-
Beat the cost of living crisis – go on holidayEditor's letter As inflation rages, energy bills soar and the pound tanks, what’s a good way to save money this winter? Go on holiday, says Merryn Somerset Webb.
-
How capitalism has been undermined by poor governanceEditor's letter Capitalism’s “ruthless efficiency” has been undermined by poor governance, a lack of competition and central banks’ over-enthusiastic money printing, says Andrew Van Sickle.
-
Don't be scared by economic forecastingEditor's letter The Bank of England warned last week the UK will tip into recession this year. But predictions about stockmarkets, earnings or macroeconomic trends can be safely ignored, says Andrew Van Sickle.
-
The biggest change in the last 17 years – the death of the “Greenspan put”Editor's letter Since I joined MoneyWeek 17 years ago, says John Stepek, we’ve seen a global financial crisis, a eurozone sovereign debt crisis , several Chinese growth scares, a global pandemic, and a land war in Europe. But the biggest change is the death of the “Greenspan put”.
-
The wolf returns to the eurozone’s doorEditor's letter The eurozone’s intrinsic flaws have been exposed again as investors’ fears about Italy’s ability to pay its debt sends bond yields soaring.
-
Things won't just return to normal – that's not how inflation worksEditor's letter You might think that, if inflation is indeed “transitory”, we just need to wait and everything will return to “normal”. But this is a grave misunderstanding of how inflation works, says John Stepek.
-
The public may have reached its limit for tax risesEditor's letter The UK tax burden is now at a 70-year high. And, while there may be some reason to hold off on cuts right now, taxes are too high because the state tries to do too much. Perhaps it should do less, says Merryn Somerset Webb.
