'Sanctions': a shot in the arm for Russian Economy?

UPDATE
Since I posted the comment the Rouble has taken a beating but this only supports my argument that Russia will be forced to produce more of the goods that its citizens desire. In addition countries like Turkey, India and China are more than capable to supply imports that the Sanctions bloc refuses to supply. Shooting oneself in the foot is the appropriate word for what the 'Elites' in Nato, EU etc are pursuing.

Comment 25 July 2014
Contrary to ill-informed media speculation the proposed 'Western' sanctions (imposed in an undemocratic knee-jerk reaction, like a toddler throwing his toys out of a pram) may well do a lot of good for the Russian economy.
Trade is always based on exchange. So the Daimlers, Apples, Burberrys of the West will lose a customer as it would not make sense for Russia to accept sanctions that hit their industries while selected and favored Western exporters are supposed to carry on as if nothing had happened.
But a reduced level of the Rouble and imports of Western capital and consumer goods may be a spur to develop domestic substitutes. No one can deny that Russia has a lot of qualified and highly educated engineers and with the targeted hiring of Western experts any number of industries could be made highly competitive. Levels of income tax are attractive and engineers in the West that live in the shadow of overrated financial experts would jump at the opportunity to double their after-tax pay, especially if they are young or have already grown-up children.

What comes first - Supply or Demand?

Interesting controversy - is there a demand deficiency in Europe, and if so what can or should be done to boost demand? I tend to support Frank Shostak's argument that supply comes first. Demand is never 'sufficient' and we all have 'demands' that are larger than our incomes can support. Microeconomic arguments (The Baker producing bread in this case) are severely neglected by the economics and policy tribes - including the media commentators. Maybe Shostak's example is a bit simplistic and needs refining but I think he is on the right track. Just pumping money out of thin air (Martin Wolf, FT, The curse of weak demand) just papers over the cracks in the economy.

100 Billionaires control half the World's Wealth?

Depending on who you believe this statement may or may not reflect the truth. But it is beyond doubt that a tiny number of Super Rich control a vastly disproportionate share of global wealth. It does not matter whether they number 100, 400 or 1000. The sad story is that beyond the establishment Economists focus so little on the issue of inequality in incomes and wealth. Maybe this is due to the fact that most of them are just little cogs in the system that seems to be designed to create these disparities. They work in safe jobs in Universities - usually taxpayer-funded jobs for life - or in 'independent' think tanks or research institutes that are either taxpayer-funded or funded by rich individual that act as 'sponsors' or 'trustees'. Employer organisations and Financial Institutions also keep a stable of Economist but these can also hardly be expected to bit the hand that feeds them.

The European Central Bank’s House of Cards

"Europe is a runaway train with a certain crash in its future." (Frank Hollenbeck, Mises Daily)

How to protect US subsidiaries

As the excesses of the US legal and regulatory process become more and more extreme it is time that companies - especially large ones with deep pockets - start thinking about protecting themselves against compensation claims and punitive damages that are in a direct line from the infamous McDonald's coffee scalding case.
In the run up to WWII certain large companies protected their overseas assets, in particular their US assets, from a potential takeover by Nazi Germany in the event their country was invaded and occupied. All these assets were put into a separate company that would have been out of reach for the occupiers.
Maybe it is time that major companies isolate their US assets in a similar fashion by setting up legal entities that shelter the parent company against any US claims. Special care should be put into designing a capital structure that would make it easy to cut loose this entity.
Of course, it would be helpful it the EU in particular could take a tougher line against the US overreach but at present that seems to be no more than a vain dream. The wet rags in Brussels and the major EU capitals are all in the pocket of the 'International' (i.e. Washington-inspired) consensus.

Inequality - Facts and Causes

The recent debate about rising inequality is welcome. But even more welcome would be substantive suggestions about possible solutions. The old ideological divide (should taxes be higher or should there be more 'free market' economics) will not do. What is really needed is an investigation of many policy measures that set the rules for the way business is conducted under the present economic framework. To mention just the most obvious ones: ownership of businesses, inheritance taxes, copyright protection, fair taxation, access to education, design of welfare system.

Times Rich List, Piketty and Inequality

At a time when there is heightened awareness about inequality it is astounding that serious (?) media commentators suggest that the (Times) Rich List 'should be taught as a set text to inspire the next generation of risk takers'.
Quite how this inspiration should work in detail the author leaves to our imagination. It certainly is not possible to become the next Duke of Westminster, one of the rare true British members of the top ten entrants in this year's list.
And how one should emulate the various oligarchs and tax exiles - some of feature only because they chose the right parents - could also be of great interest to those lucky or unlucky enough to be given the benefit of these lectures.
It would also be interesting during which class these lectures would be held. Religion, Philosophy, Politics or Economics?
The really sad thing with this sort of fawning at the superrich 0.01% is the fact that there is very little reporting about the reasons such extreme wealth can be accumulated and what should be done to prevent it. Not a word about fairer tax laws, more effective inheritance taxes, better regulation, less generous copyright protection or a wider spread of ownership of productive assets.