Author Archives: eehines

Why Indeed

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Elizabeth Braw, of the Atlantic Council, in her Friday Wall Street Journal op-ed, wondered why the People’s Republic of China would want to undermine global shipping.

Undermining the global maritime order seems an odd strategy for a country that owes its rapid economic rise to the oceans.

It’s not an odd strategy at all. The PRC has observed the economic, political, and military power that has accrued to the United States since WWII by our nation’s control of the seas and protection of global shipping. The aggressively acquisitive PRC (South China Sea; East China Sea; naval bases around the world, including Atlantic Ocean coastal Africa and Caribbean Sea and Pacific Ocean coastal South America) is now sailing a formidable combat navy and a very large dual use merchant marine fleet. The PRC also has publicly stated its goal of supplanting the US as the global hegemon.

The PRC, with that globally capable navy and merchant marine, now believes it can achieve that.

The straight and simply stated answer to Braw’s question is that the PRC doesn’t want to undermine global shipping at all. It wants to be the power that controls it, with all of that economic, political, and military power redounding to it and with the parallel result of a reduction of the US by the same magnitude.

Sometimes political science isn’t rocket science.

A Good Start

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Arizona State Senator Warren Petersen (R), who also is the President of the Arizona Senate, promoted his State’s agency sunset law as a model for the Federal government. To make his promotion concrete, he offered this language, based on that Arizona statute, for the incoming Congress and President:

Notwithstanding any other law, beginning on an eight-year rotating basis on September 30, 2025, the statutory authorization for each agency, as defined in 5 USC § 551, shall expire, and such agency shall have no authority to engage in rulemaking, adjudication, licensing, other agency action, or enforcement of any law or rule from that date forward until Congress passes a separate joint resolution of reauthorization for the agency for an additional eight-year period.

That’s short and sweet, as appropriate for all statutes Congress seeks to enact (but fails to do across the board, a separate problem), but I’d take it a bit further, without too much more verbiage.

I’d add substitute in some words that make this law applicable to all agencies created after this law’s enactment, particularly including agencies created by Executive Order (vis., the Committee on Foreign Investment in the United States, which has ruined itself through politicization, aided and abetted by the Biden administration) and the Consumer Financial Protection Bureau, a combination of Congressional statute and Executive Branch fiat.

Rather than simply having the statutory authorization expire, I’d make explicit that that includes zeroing out its budget, including payroll; returning the employees to the private sector rather than merely reassigning them elsewhere in the Federal government Leviathan; and that the agency no longer exists.

I’d require, too, the reauthorization actions to be via stand-alone bills, with nothing included that is apart from this single subject.

Finally, to ensure the reauthorization isn’t simply a mindless rubber stamp by the Congress, I’d require the reauthorization to be by separate House of Representatives and Senate vote, with each house’s vote required to be by a supermajority of 60% of elected Congressmen (not 60% of those present or those voting Abstain or Present).

Thus:

Notwithstanding any other law, beginning on an eight-year rotating basis on September 30, 2025, the statutory authorization for each agency, as defined in 5 USC § 551 or created after September 30, 2025 by statute or by Executive action, shall expire, and such agency shall cease to exist, no agency personnel reassignable elsewhere within the Federal government, until each house of Congress separately passes by a 60% majority vote of sitting Representatives and by a 60% majority vote of Senators a separate, standalone reauthorization for the agency for an additional eight-year period.

Retreating from Net-Zero?

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That’s the claim of The Wall Street Journal editors.

The climate policy retreat is accelerating as Citigroup, Bank of America, and Morgan Stanley this week joined an exodus from the Net-Zero Banking Alliance. Energy reality can bite.

The “retreat” consists of five banks out of the 140 that are members of the NZBA, a gang of banks sworn to refuse the business of any enterprise that isn’t sufficiently climate-sensitive and -activist enough to suit the syndicate. It’s true enough that the five are major players in the world of banking, but they’re still only five.

The editors wrote, also, that mutual fund manager Vanguard had pulled out of the Net Zero Asset Managers pledge. That’s one out of 350 enterprises that took that pledge. The editors wrote further that JPMorgan Asset Management, BlackRock, and State Street Global Advisors have left Climate Action 100+, a collection of some 600 investors who pressure businesses to comply. Three are part of this “retreat.”

However.

Leaving these syndicates and changing their ways of climate-woke behaviors are two different things. We need to see these banks’, investors’, and business’ altered behaviors over some period of time before it’s believable that they’ve changed more than their public rhetoric.

A Flat Tax

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Steve Forbes, Chairman and Editor-in-Chief of Forbes Media, and Stephen Moore, a Heritage Foundation economist, proposed last Monday.

Collapsing the personal-income and corporate tax rates to 15% would have huge economic benefits. America would suddenly have one of the lowest tax rates in the world, resulting in trillions of dollars of new capital flow and a spike in take-home pay.

And this:

The simplicity of a flat tax would reduce the deadweight costs associated with tax compliance—and the headaches. The White House Office of Information and Regulatory Affairs calculates that Americans spent almost eight billion hours filling out tax forms in 2024.

Using a naïve estimate of 97.2 million households (and even more naively assuming all households pay taxes, which provides an upper bound on the number of households relevant here), that works out to over 80 hours per household—two working weeks—of tax compliance labor.

This, too:

The Tax Foundation estimates that this cost the economy $413 billion in lost productivity, and the Internal Revenue Service estimates that we spent $133 billion on out-of-pocket compliance costs.

That’s $4,250 per year in lost productivity for each household, with an added $1,370 per year per household of unreimbursed spending just to comply with current tax law. Most households could find other uses for those $5,620.

Still, I don’t think Forbes and Moore go far enough.

I’d add getting rid of the corporate income tax altogether. Business’ customers pay the bulk of those taxes, anyway, rather than the taxed business; for the taxed business, the tax is just another cost center to be covered proximately through product/service pricing and indirectly through reduced spending on innovation, expansion, hiring, and raises.

Forbes and Moore suggest getting rid of some deductions, but I’d go farther here, too. Get rid of all deductions, subsidies, and credits, too, and tax all income from all sources as ordinary income. Let businesses make their expansion and financing decisions based on purely business and market criteria instead of having to game the tax implications of borrowing or stock issuances. Individuals also would go back to making their spending and investing decisions based on what’s good for their individual/family situations instead of having to game a byzantine tax system in the course of their decisions.

And those optimal decisions would include how to use those $5,620.