Category Archives: Economics

Miscellaneous economy stuff

Biden’s Union Push

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Or maybe it’s Biden’s union putsch.

The Labor Department on Tuesday proposed a rule that aims to reclassify millions of independent contractors as employees. About 20 million Americans work as independent contractors, which have more autonomy than employees and can set their own hours and work for multiple companies at the same time.

But that autonomy is anathema to the Left: it’s much harder to unionize all those independent contractors, much harder to bring them under control until they’re created formal employees and so can be forced into unions in closed shop States. And make no mistake: the Progressive-Democratic Party is bent on eliminating all right-to-work laws so that every State becomes a unionized closed shop State.

This move by the Biden administration is just an early one on its path to making it easier to convert these free market jobs to mandatory union jobs. And to increase government control over average Americans and so to increase Party power.

Continued Inflation Pressure

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The Producer Price Index rose 0.4% in September (against analysts’ expected rise of 0.2%), and it’s up 8.5% year-on-year.

This matters because the PPI reflects the prices—and price increases—that suppliers face for the components of goods that they must acquire in order to produce those goods. Those supplier prices are then passed up the supply chain to subsequent suppliers and on through to the final product that consumers buy.

That means that consumers can expect commensurate price increases—continued inflation—in the weeks and a few months into the future, a lag whose delay depends on the specific product being produced and sold/bought, but a lag whose outcome is unavoidable.

That’s not just a prediction with a high degree of confidence behind it, either. Much of that future consumer inflation is concrete because it’s built in.

The Bureau of Labor Statistics estimates that trillions of dollars in long-term contracts are pegged to versions of the PPI.

Bank of England Fails

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The Bank of England, in its panic over the British bond market repricing, is extending its intervention into that market. The purpose of the BOE’s intervention, though, is exposed by the beneficiaries of the move [emphasis added].

The central bank on Tuesday said it would add inflation-linked government bonds to its program of bond purchases after a fresh attempt on Monday to help pension funds failed to calm markets.

And [emphasis added]

The central bank first launched its bond purchases on September 28 in an effort to help pension funds that held large positions in derivative-based investments that were upended by the surge in UK government bond yields.

Clearly, the BOE is not in the business of maintaining a stable pound; it’s in the business of protecting special interests from the results of their foolishness—like “investing” pensioners’ and future pensioners’ money in risky vehicles like those derivatives.

The proper move would be for the BOE to stand aside and let the market do what it will—which is to say let the market investors, all of them buyers and sellers according to their own imperatives, do what they will according to their own, independently arrived at, imperatives. That will be painful during the (re)adjustment period, but the outcome will be what investors, with their pounds, say they want.

After all, a properly free and open market is self correcting; a government intervened-in market never can be. Aside from the fact that a centrally directed market cannot respond quickly enough, those interventions color those investors’ imperatives, driving them necessarily away from independent development. Such politically-created market distortions permanently block corrections from running to completion.

National Defense Authorization Act

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This bill is intended to fund our national defense effort, it’s an annual bill, and the one for 2023 is being put together these days.

Here’s some of what the Progressive-Democratic Party Senators insist on including in it, things which they insist are critical to our national security.

  • an amendment to address high credit card fees
  • an amendment to exempt foreign graduates of American universities with advanced degrees in science, technology, engineering, and math from annual green card limits
  • an amendment to stop federal employees from being reclassified as political appointees without the consent of Congress

To the extent that some of these are good ideas, they should be put into separate bills and debated and voted on separately. That they’re not is a pretty clear indication that the Progressive-Democrats don’t really believe in them; they’re only using them to obstruct and to push their unrelated agenda.

Catch-22?

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No, typical Leftist “misunderstanding.”

In a piece about the possibility of an inflation-related increase in Social Security payments, Megan Henney, writing for FOXBusiness, cited this remark from Mary Johnson, The Senior Citizens League‘s Policy Analyst/Editor, about the supposed downside of the increase.

Higher Social Security payments are a bit of a Catch-22. They can reduce eligibility for low-income safety net programs, like food stamps….

That demonstrates a complete misunderstanding of safety net programs. With greater income, there’s less need for the safety net, so of course eligibility should be reduced commensurately.

Only a Leftist, who believes in ever-growing government, could say such a thing with a straight face.