Corporate Free Rides

Alex Sanchez, Florida Bankers Association President and CEO, is worried about corporate welfare.

The problem with modern American credit unions boils down to a simple question: why should a family of four pay more income taxes than a $90 billion financial institution? That’s the total amount of assets held by Navy Federal Credit Union. Yet it is exempt from federal and state corporate income taxes, as well as sales taxes (and, in my home state of Florida, intangible taxes). This is corporate welfare.

Income Equality

William Galston doesn’t think we have enough, and it’s the successful one’s fault.

[T]his [trade leaving nations generally better off] is small comfort to those who lose out, especially because the winners rarely compensate them commensurately.

Galston is operating from a blatantly false premise here.

He does have a couple of solutions to offer.

First, they [government] could significantly expand the earned-income tax credit to bolster the incomes of workers somewhat higher up the income ladder. Second, they could implement a broader program of wage subsidies that would raise the wages of lower- and middle-income earners toward a specified hourly target.


Writing on the topic of our applying economic pressure on Turkey as a means of getting an American hostage (among others) freed, Greg Ip expressed surprise and worry about the weaponization of trade in his Wednesday Wall Street Journal article.

Trade wars may be morphing into something more dangerous: financial wars.

This, though, merely exposes his misunderstanding of international trade.  Such trade is far more about national policy applied internationally than it is about economics, and international finance is just a tool of that trade venue.  Trade has always been “weaponized;” it has always been about achieving national political goals, of which economics is merely one.

A Crisis Deepens?

The People’s Republic of China has a serious debt problem, but its economy is still slowing (note, though: slower growth still is growth).  To try to control and reverse the trend, the PRC’s central bank is lessening capital requirements for the nation’s banks, pumping more money into the financial system, and urging commercial lenders to offer more loans at cheaper rates to small businesses.  Their answer to too much debt seems to be to pile on more debt, lower the backstop against failing loans, and devalue through inflation the currency needed to repay the debt.

Turkey and Natural Gas Pipelines

War on the Rocks has an interesting piece on Turkey’s desire to become a natural gas transshipment hub feeding Europe and perhaps Russia.  I think, though, that WOTR underplays the purpose of Turkey’s transshipment goal.

Recall the existing conflict between Turkey and Europe over immigration, economics, rule of law EU-style rather than as Recep Erdoğan does it, and a host of other excuses for Turkey to claim to be put upon.


Now Facebook wants to hook up with banks to collect our financial information and our shopping habits as revealed by our credit card charging history.

No. Not ever. Not with Facebook’s lack of concern for our privacy or our personal data.

Facebook said it wouldn’t use the bank data for ad-targeting purposes or share it with third parties.

Sure. I might know about some beachfront property for sale north of Santa Fe, too.

Any bank that hooks up with Facebook in any way loses my business altogether.  Full stop.

A Next Step

A step has been taken to mitigate the destructiveness of Obamacare.  A new rule has been promulgated by the Trump administration that will

allow for the proliferation of cheaper, less-comprehensive health plans that have been restricted by the former Obama administration.

Under the rule, actual health insurance plans will be allowed that cover a range of health-related matters that more closely align with a customer’s interests.  These plans also will be good for a year and be renewable for a total of three years, a drastic improvement over Obamacare’s limit of 90 days.  A further improvement of this rule:

Equal Outcomes

New York has them.

A 7-yr-old in New York tried to sell lemonade from his stand last week, and he was shut down by the State’s Health Department.  He didn’t have the required business license, you see.

Up stepped Governor Andrew Cuomo (D), who offered to pony up for the boy’s license next year.  As if a child needs one.  However, as the WSJ put it regarding this Progressive-Democrat version of largesse,

will [Cuomo] pay for every child in New York caught up in illicit lemonade sales?


Paying for Health Care

John Cochrane correctly decried the costs of health care in today’s economy, but he has the wrong solution.

Why is paying for health care such a mess in America? Why is it so hard to fix? Cross-subsidies are the original sin.

No, cross-subsidies, “sinful” as they are, are not the original sin.  The original sin is government involvement at all in the form of any sort of subsidy.  Far from the subheadline’s claim that “honest subsidies” (eliding the oxymoronic nature of that label) would encourage competition and innovation, they’d do the opposite, as all subsidies do: they’d suppress competition and innovation by giving the government-favored recipients a government-mandated advantage over their government disfavored competitors, freeing the one from competition’s pressures to innovate and reducing the other’s access to resources needed to innovate—and stifling competition’s engine, the need to innovate to stay ahead of rivals.

Are Tariffs Protectionist?

Certainly, they can be.  And tariffs, for a long time, were intended to protect domestic industry from foreign competition as well as being a major source of income for a nation.  Our own nation was a skilled practitioner of the tariff arts for our first 125+ years and again during the Great Depression and the aftermath.

And that’s the line the Koch brothers are taking with regard to President Donald Trump’s tariff impositions.

The urge to protect ourselves from change has doomed many countries throughout history.  This protectionist mind-set has destroyed countless businesses.