Category Archives: Economics

Miscellaneous economy stuff

Words

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Progressive-Democrat Vice President and Progressive-Democratic Party Presidential candidate Kamala Harris is “subtly” changing what she says about her economic plans, should she be elected. Her advisers’ claim is

While President Biden’s agenda focused on jobs, Harris is focused on costs. Where Biden sees voters foremost as workers, she sees them more as consumers.
As a result, her policies are aimed at trying to help middle-class Americans afford the things they need and want, and helping them build wealth that can be passed along to their children, her advisers say.

She may be changing the style of her rhetoric, but her plans remain to raise taxes on our income, in the name of making the billionaires “pay their fair share” without specifying what that share is, and which tax increases will reach down into our middle class through their effect on small businesses and large businesses’ employment plans.

She may be changing the style of her rhetoric, but her plans remain to increase government spending on Party special interests, including subsidies for her “green new deal” businesses while hamstringing our oil- and gas-based energy production ability.

She may be changing the style of her rhetoric, but her plans remain to institute price controls on a broad range of products from pharmaceuticals to food in our grocery stores, all in the name of her mythical price gouging.

She’s also said in so many words that her values haven’t changed. Her values are made plain through those plans. What she’s saying now, those “subtle changes,” are as her Senate colleague Bernie Sanders (I, VT) says, just empty words uttered to curry votes.

Nothing more.

ILA Featherbedding

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Railroad unions are pikers here.

[T]here were 50,000 or so ILA strikers but only 25,000 or so port jobs. That’s right, only about half of the union’s members are obliged to show up to work each day. The rest sit at home collecting “container royalties” negotiated in previous ILA contracts intended to protect against job losses that result from innovation.

This ILA monopoly abuse is aided and abetted by Progressive-Democrat President Joe Biden. Biden, far from invoking Taft-Hartley, which he doesn’t believe in, openly made his own extortionate threats against management:

President Biden had threatened the United States Maritime Alliance (USMX) with legal action this week if it didn’t give in further to union demands. “My Administration will be monitoring for any price gouging activity that benefits foreign ocean carriers, including those on the USMX board,” he said in a statement. This was a direct threat to Maersk and other ocean carriers if they added a surcharge because of the disruptions from the ILA strike.

Keep in mind, too, that this was just for the precondition the ILA demanded in order for the union to agree to negotiate at all. The union will be back with its still-open strike threat on 15 January. And to hell with the rest of us Americans:

Mr Daggett [the ILA MFWIC] was happy to put countless truck drivers, warehouse employees, retail clerks, and auto workers out of work so he and his “connected” members can buy another yacht.

This is what a Progressive-Democratic Party-dominated Federal government will do to all of our economy and to us American citizens’ right to work and to choose for ourselves whether to join a union or not—and to keep all of our paycheck if we choose to not join a union.

The Utility of Automation

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The International Longshoremen’s Association is demonstrating that, in spades, with its strike and its intent on inflicting maximum damage to our nation and our economy. Here’s the ILA MFWIC, Harold Daggett:

We’re going to show these greedy bastards you can’t survive without us!

Pretty nice business you got there. Pay up, suckers.

People are going to sit up and realize how important longshoremen jobs are. They won’t be able to sell cars. They won’t be able to stock malls. They won’t be able to do anything in this country without my f—ing people.

Automation will make such threats to business’ ability to function at all destructions of the past.

In today’s world, I’ll cripple you[.]

That’s Daggett’s response to speculation that the Biden/Harris administration might invoke Taft-Hartly to force the union workers back to their jobs. In the process of crippling our nation, he’s said he’d include slow-walking every step of every task.

Oh, and robots won’t hold out for a 77% pay raise as a precondition to entering into any negotiations at all.

The sooner this union is replaced with automatic facilities at the docks, the better off we’ll all be—including those dockworkers.

Government “Influence” over US Industry

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The headline says it all:

Harris Puts Government Intervention at Heart of Economic Policy

And this:

Her plans are largely an extension of Biden’s yearslong effort to use government tools and finances to boost key sectors of the economy. The approach, known in economic parlance as “industrial policy,” is also increasingly supported by some Republicans, who have relaxed their free-market convictions….

Harris’ policy proposals are reminiscent of 1930s Italy and modern-day People’s Republic of China. Too many Republicans are going along with this sort of degradation of our economy.

Borrow More and Spend More

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The People’s Republic of China economy is continuing its malaise and apparent downward spiral from falling prices and its festering real estate crisis. International trade tensions aren’t helping.

A solution:

The central government in Beijing needs to borrow and spend more to drive up growth and inflation, he said, and should give its local counterparts more freedom to use their borrowing quotas to support consumption.

“He” is Julian Evans-Pritchard, Singapore-based Capital Economics‘ Head of China Economics. He doesn’t, however, suggest from whom the PRC should borrow.

The population of potential lenders includes the good citizens of the PRC, who are reluctant to lend any further, having been burned by their own borrowing into that real estate market, and whose pullback is feeding that problem. Lenders include those who might lend to those local counterparts who already are not consuming the yuan already borrowed. More room in those local borrowing tills seems scant, and those potential lenders already are debt-strapped on their own. Lenders also include international buyers—individuals, businesses, and governments—of the various PRC government debt instruments. Those instruments already issued have lost and are continuing to lose market value to the detriment of those current lender/holders; this drives up the interest rate the government must offer on new issues, which increases the cost of that borrowing. After a point those increasingly elevated interest rates become prima facie evidence of the current and increasingly risky nature of those instruments.

Evans-Pritchard also doesn’t seem to recognize the inherent weakness of borrowing based on declining value asset collateral—which is what borrowing for consumption is.

It all adds up to the foolishness of Modern Monetary Theory, the theory that money is leaves on an infinite tree. What the People’s Bank of China has done—offering 500 billion yuan in loans to funds, brokers, and insurers to buy Chinese stocks; putting up another 300 billion yuan to finance company share buybacks—is just the first step of pulling leaves off that tree. To be sure, cutting its benchmark interest rate and lowering bank cash reserve requirements, which the PBOC also has done, ordinarily is a standard central bank move to stimulate economic activity, but when they’re done on concert with those other moves, they lose their stimulative effect and just become the sharp sugar high before the crash. The end result of this will be yet more borrowing, but this time from the futures of the PRC’s current children and of their children’s children—whose generational sizes are shrinking.

There are lessons here for us, were our politicians interested in learning them.