Category Archives: markets

Biden is Tough on the PRC

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Progressive-Democratic Party Presidential candidate Joe Biden says so. And he’s actually going to run on that thesis.

However.

Leaving aside Hunter’s profiteering on Daddy’s coattails in the People’s Republic of China—that’s just the scummy topping on the gruel—Biden’s track record in dealing with the PRC as Senator and as Vice President is one of failure after failure to get, even to try to get, balanced trade deals and even-handed treatment of American companies wanting to do business inside the PRC.

It was, for instance, during the time frames about which Biden brags that the PRC successfully began demanding US companies to take on PRC company partners as a prerequisite to doing business there, to “share” company and American technologies and company proprietary materials and intellectual properties with those partners, and to allow PRC government backdoor access to US companies’ critical software.

All of this was done without Biden objecting, which he could have done, forcefully, whether or not he could have brought those administrations along with him.

Biden chose to be silent on all of these. Every single one of them.

A Supreme Court Error

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No, I’m not talking about the Court’s cowardice on gun rights. This one concerns the Court’s nearly unanimous decision regarding any Congress’ ability to undo what a prior Congress has done and the Executive Branch’s obligation to spend money that hasn’t been appropriated.

The Court upheld health coverage providers’ demand, under Maine Community Health Options v US for

payments to health insurers for so-called risk corridors in ObamaCare’s first three years[.]

Never mind that the 112th Congress, in 2010, undid what the prior 111th Congress had done and both refused to appropriate funds for those “risk corridors” and explicitly forbade the Executive Branch from making any risk corridor payments from other funds.

Never mind that money must actually be appropriated before it can be spent. Article I, Section 9 of our Constitution makes that clear.

No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law….

At least it used to be clear.

Now none of that matters. In addition to the “implied rights” that the Supremes are wont to manufacture, now it has manufactured out of whole cloth an implied obligation.  The health coverage providers are owed the money because a prior, overridden, Congress wanted the money paid out.

And We the People are the ones who’ll be left paying for this egregious error of the Court. Pay up, suckas.

Overseeing PRC Telecomm

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The Senate has started looking into tightening oversight of People’s Republic of China telecomms that are operating in the US.

In a forthcoming report, the Senate Permanent Subcommittee on Investigations will level sharp criticism at a group of telecom regulators for failing to scrutinize the Chinese companies and the way they handle data going back nearly two decades. Senate investigators who briefed The Wall Street Journal on their findings said that without proper oversight the Chinese companies “present an unacceptable amount of risk.”

It’s a start.

But even with suitably proper oversight, a larger question remains unaddressed, much less unanswered: why are these companies allowed to operate in the US at all? They are, after all, arms of the PRC government, not free enterprise entities competing on their own recognizance and beholden to the laws of the political jurisdiction within which they operate.

And this:

Representatives for American carriers warned the Senate investigators that the US moves could cause Beijing to retaliate by cutting off their business with Chinese carriers to provide services. That, the carriers have said, would potentially hurt their customers in China, such as US companies, and hinder the carriers’ ability to cooperate with US intelligence-gathering requests.

Couple things about this. Cutting off American carriers’ business inside the PRC would be relatively minor for operations in a nation that demands domestic partners and technology sharing as a condition of doing business within that nation and that demands government-accessible backdoors into foreign companies’ critical software suites as a condition of doing business within that nation.

The bit about hindering US carriers’ ability to cooperate with US intelligence-gathering requests emphasizes a critical difference between us and the PRC. US carriers’ cooperation with our government’s intel requests is entirely voluntary, for all the political pressure a carrier might face for noncompliance. PRC telecomm companies operating in the US have no such option: PRC government requests for intel-related information are required to be satisfied. The only request aspect relates to the type of information the PRC government requires to be collected.

Export Incentives Coupled with Domestic Disincentives

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The People’s Republic of China has moved to shut down the domestic marketing of wild animals on fears [wild animal traders’] goods sparked the coronavirus pandemic. This is a seeming response to growing international pressure on the PRC to cut that out for that reason.

[The People’s Republic of] China’s National People’s Congress on February 24 imposed a ban on the sale and consumption of wild animals in the country.

However.

Less than a month later, [The People’s Republic of] China’s Ministry of Finance and tax authority said on March 17 they would raise value-added tax rebates on nearly 1,500 Chinese products, including offering a 9% rebate on the export of animal products such as edible snakes and turtles, primate meat, beaver and civet musk, and rhino horns….

As the Congressional Research Service, cited in the article at the link, mentioned, the export move

could spread the risk to global markets[.]

You think?

The CRS’ report further noted,

Absent in [The People’s Republic of] China’s policy push are incentives to encourage the sale of pharmaceuticals, PPE, and other medical products overseas[.]

Hmm. Makes me wonder just what the PRC is up to, really.

 

The CRS’ report can be read here.

Capitalism

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William McGurn had a piece in Monday’s Wall Street Journal about Bernie Sanders’ (I, VT) attitude toward capitalism, centered on Sanders’ view that every economically successful person is necessarily selfishly greedy, and by extension, that that person’s success is from the fundamental zero-sum nature of capitalism.

Sanders is wrong.

At the bottom of capitalism is an entirely voluntary exchange between two people, each seeing to his own interest. At the end of the exchange, each has satisfied his own interest: each is better off from the exchange than he was before it because each has gained something that he wanted and didn’t have.

And: each, with that exchange, has made the other better off, too.

It scales up. Businesses prosper by making their customers better off, and by giving those businesses their custom, customers make those businesses better off. The better each does—at satisfying both themselves and the others—the better the other does, too.

Both of these are lost on folks like Sanders, and Joe Biden. They don’t even conceive the notion.

Their blinders notwithstanding, though, it’s hard to find a more moral economic system. It’s also hard to find a less zero-sum economic system.