Category Archives: markets

Part of the Agreement

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…on Reduced-Build Back that Senators Joe Manchin (D, WV) and Chuck Schumer (D, NY) settled on last week is this Progressive-Democratic Party gem, and which illustrates in no small part the depth of the betrayal that is Manchin’s agreement.

The Senate drug agreement would require the Health and Human Services Secretary to “negotiate” prices for 10 of the top-spending drugs in Medicare starting next year and 20 by the end of the decade. If drug makers don’t accept the government’s offered price, they would get slapped with a 95% excise tax on their sales. Take his offer or else.

If that’s not the opening shot in the destruction of the American pharmaceutical industry, it’s certainly the beginning of the end of the industry’s interest in innovating and in leading the world in innovation.

That’s to the severe detriment of every American citizen who gets sick.

Some Lipstick for the Pig

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Here’s some of what’s in the Build Back Reduced bill—formally styled Inflation Reduction Act—that Senator Joe Manchin (D, WV) and Senate Majority Leader Chuck Schumer (D, NY) agreed, which Manchin euphemizes as an all-in energy policy:

[T]he Interior Department would be required to offer up at least two million acres of federal land and 60 million acres of offshore acreage to oil and gas producers every year for the next decade. If Interior officials fall short, they wouldn’t be able to advance some permitting aspects of the wind and solar projects on federal land.

Offer up. But at what price? And for what duration before the leases expire? Look for the Biden administration to use lease pricing to actively discourage producers from buying leases, to slow walk the subsequent permit applications that would enable the leases to be acted on, and to use the failure to get the permits on time as excuses to terminate the leases/allow them to expire.

Is the Iron Curtain Come to California?

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It seems that the University of California Los Angeles has decided to move from college’s PAC-12 Conference to the Big 10 Conference, effective with the 2024 academic/athletic year.

It seems also that California’s Governor Gavin Newsom (D) is unhappy about the alma mater of Lew Alcindor, later becoming the NBA great Kareem Abdul-Jabbar, joining the exodus from the State, if only functionally and not physically.

Nobody said, “Mother may I?” to Newsom, and that angrifies him as much as UCLA’s decision to go out from a West Coast conference to a more economically sound area of our nation.

I read about it (is how I found out). No big deal. I’m the governor of the state of California. But maybe a bigger deal is that I’m the chair of the UC Board of Regents. I read about it. Is it a good idea? Did we have a chance to discuss the merits (of the decision)? I’m not aware anyone did. So it was done in isolation. It was done without regental oversight or support. It was done without any consideration to my knowledge.

Now, it may be that there is/was a contractual obligation for UCLA to advise the Board of Regents of the school’s discussions and intentions. However, Newsom didn’t mention any of that in his plaint—only that His Nibs wasn’t consulted.

Regarding those more economically sound areas of our nation—in the new era of Name, Image, and Likeness requirements that allow college athletes to personally profit form the use of their NIL material—here is, UCLA’s Athletic Director Martin Jarmond:

…the move was mostly about increasing “exposure” in the NIL era. By opening the school up to potentially more nationally televised games and East Coast markets, Jarmond says they can now provide an enhanced opportunity for student-athletes to find “their voice and their brand and what’s important to them.”

But not so fast: His Nibs is looking for ways to block the move.

Trust me when I say this: We are not going to be looking into. We are already looking into it within (and have been) minutes after reading about this in the newspaper.

No veiled threat there….

Rent Control vs Market Competition

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Here’s an example of the failure of no competition in affordable housing, this one in St Paul, MN. The residents of St Paul last November voted to cap rent increases at 3% per year, forever, with no exceptions.

Mercatus Center [Senior Research Fellow and Director of the Urbanity project] Salim Furth compared St Paul building permits in the five months after passage of rent control with the average of the same months in the three years prior [i.e., immediately preceding the Wuhan Virus situation onset]. By that metric, St Paul’s multifamily permitting is…down 55%.

And

City data shows St Paul’s building permit revenue from January to May 2022 was $3.699 million, down from an average of $4.176 million from 2018 to 2021.

The claimed purpose was to protect affordable housing availability.

However.

St Paul’s rent control creates an incentive for developers to build luxury apartments to recoup their construction costs. But builders are also opting to leave St Paul. Citing rent control, investors recently paused development on the 3,800-unit Highland Bridge project. Its builders would have set aside 20% of units for affordable housing, with 10% going to those earning 30% or less of area median income.

The only ones who wouldn’t have predicted this outcome, who don’t understand its inevitability, are those who can’t stand the thought of individuals or private businesses making their own decisions, or free markets making their own aggregated decisions, independently of the limits and requirements set by Know Betters.

Relations with the People’s Republic of China

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Maurice Greenberg, Chairman and CEO of CV Starr & Co, an insurance and investment company with subsidiaries domiciled in the PRC and Hong Kong, said in his Wall Street Journal Wednesday op-ed that he wants the US to “rebuild relations” with the People’s Republic of China.

It is in our national interest, now more than ever, to do all we can to improve U.S.-China relations.

And

The US and China have a long history of collaboration dating to before World War II. When the People’s Republic of China reopened to the world, the US extended favorable trade terms to foster China’s economic growth….

What Greenberg ignored is that the People’s Republic of China has no relation to the pre-World War II China beyond sitting in the same geography. What he also ignored is that since the PRC “opened” and we extended favorable trade terms, the PRC has been running a campaign of stealing our intellectual property through outright theft, hacking, and coerced transfers as a condition of doing business within the PRC. That nation also has been running a parallel campaign, using the same techniques, to steal our national defense and foreign policy secrets.

Frank talks can build trust relationships with the PRC? No, the only thing we can trust of what the PRC’s government men say is their commitment to replace us on the world stage and to subordinate us to them.

We don’t to rebuild relations with the PRC. Let the PRC want to build, from the beginning, relations with us.