Monthly Archives: June 2017

Currency Valuations and Economic Growth

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There’s an interesting piece in The Wall Street Journal that looks at the economic theory that suggests that a nation’s devaluing currency, by making its exports cheaper, would spur domestic production and so economic growth.  As the article says, Great Britain is offering a real-time experiment that tests that theory.

In that experiment, the pound has lost value in the exchange markets to a significant degree, but exports—and the British economy—have not expanded as much as was expected by some under the theory.  This “failure” of the theory is being blamed on globalization.  For example,

Chemicals made at Chemoxy International Ltd’s factory in Middlesbrough are worth about 20% more in the export market after last June’s fall in sterling, given the beefed-up value of the currencies used to buy those goods overseas. Higher costs for imported materials, however, all but erased that advantage.

And

Car maker Aston Martin, which exports 80% of its vehicles…. Before Brexit, when the pound traded at $1.50, sports cars sold in New York for $150,000 would bring home £100,000. With the pound now at $1.27, such sales bring an extra £18,000. But over half the car’s components must be bought from abroad, blunting the effect.

In fact, though, the theory tying a domestic economy’s prosperity to changes in that nation’s currency exchange rate never looked at exports and imports in isolation from each other; the two, along with the overall domestic economy, have been understood to be tightly intertwined all along.  It’s just that the expansion of globalization over the last generation, or so, have increased the influence of exchange rate impacts on imports to a large degree.

The outcome of globalization—so long as free market principles dominate international trade activity—is a long-run loss of the ability to manipulate exchange rates for nationalistic purposes.  Short-term effects can remain powerful, though, and such manipulations cannot be ignored to good effect.

A Couple of Disparate Thoughts

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Thoughts triggered by a piece by Richard Fernandez on the dislocation of the Left…triggered…by The Brits voting to leave the EU, Donald Trump’s election as President, Emmanuel Macron’s election as French President, the resounding defeat of Theresa May and her Conservative party’s defeat in Britain’s snap elections, and Macron’s La République En Marche! party’s in-progress accession to strong power in the French National Assembly.

One thought is this.  Van Jones, ex ex-President Barack Obama’s advisor, complained about the selfishness of Democrats’ spending in the last Presidential campaign season while speaking to a crowd at the People’s Summit in Chicago’s McCormack Place.

The Hillary Clinton campaign did not spend their money on white workers, and they did not spend it on people of color. They spent it on themselves.  They spent it on themselves, let’s be honest.

Let’s be honest, indeed.  This is the identity politics of the Left, repeated.  And it’s Jones’ own selfish version of identity politics.  His beef isn’t that the money wasn’t spent to further the campaign or the interests of the American citizenry.  He’s not even decrying the spending in favor of party officials and cronies.  No, his beef is that the money wasn’t spent on his groups of Americans in particular rather than other groups of Americans—or even on Americans in general.

The other thought is illustrated by this graph, which Fernandez got from the Cato Institute, to which he linked in his piece (the Cato Institute article is worth reading in its own right).  It’s a five-year-old graph, but it remains valid.

Notice that while keeping in mind the predominance of union control of teaching in our K-12 schools coupled with the Left’s increasing influence on the slant of the subject matter being taught in required subjects other than science and arithmetic.  Total spending per student has nearly tripled over the last 45 and more years with no effect at all on student performance outcomes beyond a slight degfradation in science performance.

The Left just doesn’t care about performance, even at the foundation of our citizenry.  It only cares about spending and the power that brings them, and here, the Left’s ability to shape successive generations of voters.

Which dovetails nicely with the Left’s dedication to identity politics.  The thoughts aren’t so disparate, maybe.

Wages or Benefits

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Every month, the Labor Department’s jobs report helps shine a light on the growth of overall wages, which has been slow in recent years. But what gets far less attention are the other components of compensation—health insurance, paid leave, retirement benefits—that in recent years have generally outpaced wage growth, as shown in new Labor Department data released Friday.

And isn’t that a travesty?  Used to be, in the ’50s and early ’60s, these benefits—including the pensions that were those retirement benefits were perks an employer used to induce top performers to work for him and not someone else.  Remember when “full dental” was such a big deal?

It needs to go back to that.

I’d rather have the pay, and I’m happy to be responsible for my own outcomes.  Depending on others for my benefits leaves me…vulnerable to those others, from changing attitudes of those others to the ability of those others to continue paying the benefits.  See, for instance, all the public pension bankruptcies and impending bankruptcies and all the private company pension plans that are underfunded.

Note here, too: it’s not the 401(k) plans and other defined contribution retirement plans—plans for which the individual contributor is solely responsible—that are going broke.  If they’re underfunded, too, that’s the choice of the plan holders; it’s not inflicted on them by their employers, their unions, or their government “pension” legislator/managers.  Furthermore, the failure of an individual defined benefit plan affects only that plan’s holder; it has no effect on others.  The failure of a retirement plan managed by others for entire groups hammers everyone in those groups dragooned into participating.

Timidity

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A group of perpetually-offended atheists, agnostics and freethinkers are threatening to sue a small Wisconsin town because of two welcome signs.

Here’s an example of the signs, which have been up 50 years or more:

The churches extend the welcome, not the town’s government in the name of any church or all of them.

Of what are these folks so terrified?  There’s nothing stopping them from putting up their own welcome sign: “Atheists of Oconomowoc Welcome You.”  If the town’s government objected to that, only then might there be an actual beef.

Or: these folks are just terrified of how foolish they’ll look in an open contest of ideas, so they’re suing in the hope of using that to extort acquiescence.

I trust the town of Oconomowoc will show themselves made of sterner stuff than these snowflakes and welcome them into court—and then refuse to settle the matter.

A Party’s True Character

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A Party’s True Character

The Progressive-Democratic Party leader of the time, President Woodrow Wilson, said of segregation, “segregation is not a humiliation but a benefit, and ought to be so regarded by you gentlemen.”  The Progressive-Democratic Party also is the party of Jim Crow and the Ku Klux Klan.

The Progressive-Democratic Party is the party that made national minimum wage laws for the explicit purpose of keeping blacks on the plantation—literally—instead of migrating north and competing for jobs by being willing to work for less than white union members were.

The Progressive-Democratic Party is the party of racist and sexist affirmative action programs.

The Progressive-Democratic Party is the party of the welfare cage that keeps our poor, of any stripe, trapped in poverty and dependent on government handouts.

Jason Riley in The Wall Street Journal has some insights on the current nature of the matter.

[Now] race-consciousness is once again ascendant, not only among “alt-right” types, but more tellingly among self-styled progressives and left-wing institutions that once worked so hard to combat Jim Crow policies. The liberals who are cheering the recent removal of Confederate monuments to racial separatism also indulge the separatist rhetoric of groups like Black Lives Matter. Dr Martin Luther King Jr’s calls for colorblind policies seem as dated as concerns about interracial hookups.

And

College campuses offer near-daily examples of this liberal devolution on racial matters. The most prominent recent episode involves Bret Weinstein, a biology professor at Evergreen State College in Olympia, WA, who has come under fire from students and fellow faculty members for criticizing the school’s “Day of Absence” protest, which involved whites quitting campus for the day.

And

Sadly, these antics have become commonplace in recent years. Students at the University of Wisconsin have demanded free tuition and housing for blacks. At the University of Michigan, a student group that previously complained about the lack of racial “diversity” and “inclusion” at the school has since requested a safe space on campus reserved for students of color to gather. At the University of Missouri, only students of color were invited to participate in a “die-in” protesting the shooting death of Michael Brown in Ferguson.

And

Last year, at the urging of the school’s black student union, California State University, Los Angeles began offering segregated housing for black students. The University of Connecticut, the University of California, Davis and the University of California, Berkeley are among the colleges that have similar arrangements in place.

And

This year, Harvard held its first-ever commencement ceremony for black graduate students. The New York Times reported that racially segregated end-of-year ceremonies like the one held at Harvard have become more mainstream, more openly embraced by universities and more common than ever before.

The Progressive students of the campuses and those institutions’ management are demanding exactly what that Progressive icon, Woodrow Wilson, promised them: the “protection” of segregation.  This is what the Party’s Big Government-mandated dependency has wrought.