This Little Piggy Bent The Market – John Mauldin

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Oct 29, 2014

About 18 months ago, I had a very pleasant chat with a gentleman by the name of Luzi Stamm.

You may detect some measure of surprise in my words, and the reason for that is quite simple: Luzi Stamm is a politician; and, as regular readers will know, I am no fan of that particular class.

But Herr Stamm was different.

An MP representing the Swiss People’s Party, Stamm was spearheading a federal popular initiative that needed 100,000 signatures in order to comply with the Swiss parliamentary system’s rigid framework regarding referendums. (OK, all you “referenda” people out there, I know, OK? But I’m going with “referendums,” so pipe down).

That initiative was one of three being pursued: first, a motion to limit immigration into Switzerland to 0.2% per year; second, a drive to abolish the flat tax system and for resident, nonworking foreigners to be taxed based instead on their income and their assets; and third, Stamm’s initiative. ... Well, we’ll get to that shortly; but before we do, we need to understand a little about how Swiss democracy works.

(Wikipedia): Switzerland’s voting system is unique among modern democratic nations in that Switzerland practices direct democracy (also called semi-direct democracy), in which any citizen may challenge any law approved by the parliament or, at any time, propose a modification of the federal Constitution. In addition, in most cantons all votes are cast using paper ballots that are manually counted. At the federal level, voting can be organized for:

Elections (election of the Federal Assembly)

Mandatory referendums (vote on a modification of the constitution made by the Federal Assembly)

Optional referendums (referendum on a law accepted by the Federal Assembly and that collected 50,000 signatures of opponents)

Federal popular initiatives (vote on a modification of the constitution made by citizens and that collected 100,000 signatures of supporters)

Approximately four times a year, voting occurs over various issues; these include both referendums, where policies are directly voted on by people, and elections, where the populace votes for officials. Federal, cantonal and municipal issues are polled simultaneously, and the majority of people cast their votes by mail. Between January 1995 and June 2005, Swiss citizens voted 31 times, to answer 103 questions (during the same period, French citizens participated in only two referendums)

In Swiss law, any popular initiative which achieves the milestone of 100,000 signatures MUST be put to the citizens of the country as a referendum, and in a country of just 8,061,516 people (according to the July 2014 count — never let it be said that the Swiss aren’t precise), that’s a pretty big ask; but the Swiss do love their votes — so much so that, since 1798, there has been a seemingly never-ending procession of issues which the Swiss people have been entrusted by their leaders to decide:

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In 2014 alone there have already been three referendums concerning such diverse issues as the minimum wage, abortion and the financing and development of railway infrastructure. (For those of you just dying to know the outcomes, the abortion referendum, which would have dropped abortion coverage from public health insurance, failed by a large margin, with about 70% of participating voters rejecting the proposal. The railway financing was approved by 62% of the voters, and the motion that would have given Switzerland the highest minimum wage in the world — 22 francs ($23.29) an hour — was soundly defeated, with 76% of the voters saying “nein.”)

continue reading: http://www.mauldineconomics.com/ttmygh/this-little-piggy-bent-the-market