Category Archives: political economy

A Solution

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Last year, a People’s Republic of China-owned and -operated mine in Zambia had a catastrophic failure of a mine tailings wall, creating an environmental disaster for Zambian citizens.

[A] tailings dam owned by Sino-Metals collapsed and unleashed toxic sludge into the Kafue River, farmlands along the river valley are scorched, hundreds of people lack a source of clean drinking water and residents continue to live on land contaminated with heavy metals.

The Zambian government meekly aided the PRC and its mine operators in covering up this disaster, trying to hide it from the public. To hell with its own citizens who still are paying with their health and their lives for the failure, now of their own government in addition to that of the PRC and its mine operators.

According to a US House Select Committee on China,

The Zambian government, which owes $6.6 billion to the Chinese government and Chinese lenders, has held back from pressing Sino-Metals over the disaster, fearing retaliation from China….

Retaliation. Here’s an alternate solution: cancel the contract with Sino-Metals and all other PRC “investments” and “loans” in Zambia, declare the $6.6 billion debt reclassified as the PRC’s and Sino-Metals’ debt to Zambia for the cleanup, and dare the PRC to retaliate in any material way.

No actual dollars would flow from this, but two salutary things would result: Zambia would be freed from a debt it never should have taken on in the first place—PRC terms are notoriously usurious and are designed for to force default and confiscation of the collateral (here, the mine itself) put up for the loan. Zambia also would be out from under the PRC’s thumb and free(r) to trade its wealth of natural resources to more honorable nations under more equitable terms.

Mistake

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President Donald Trump (R) is pushing Congress to include in its next budget enactment a 50% increase in the US quota contribution to the IMF, a dollar increase of some $55 billion.

The mistake is in this:

the cost to US control over IMF resources, which Treasury conceals with its claim in the budget that the “equiproportional” quota increase “would be fully offset by a reduction in” the use of debt, “all of which will keep the IMF’s overall lending capacity constant.” What Treasury doesn’t disclose is the hit to US power when the IMF gets more of its resources from equity than debt.

That hit comes from voting on IMF lending which depends on the fund’s use of debt via New Arrangements to Borrow which it does in order to raise lendable monies. This is loosely akin to a bank’s need for extending savings accounts to customers in order to raise funds to lend to other customers.  It takes approval by 85% of IMF voting shares for the IMF to borrow, and the US has had, heretofore, 16% of the voting shares, giving us veto power over IMF’s borrowing.

So long as the IMF has to borrow to lend, the US can exercise a large measure of control over IMF lending. But the US quota increase would shift the IMF’s ability to lend to those quota funds, and with that shift, the US would lose its current voting veto power, IMF could lend without serios oversight.

One upshot of all this, if it is passed, is an increase in the People’s Republic of China’s ability to borrow from the IMF and thereby to prop up its own internal excessive borrowing. And helping out an enemy nation like that is a very serious mistake.

Progressive-Democrats Destroy Again

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This time they’re Illinois’ Progressive-Democrat governor, the inestimable JB Pritzker, and the State’s Party-dominated legislature. (The Wall Street Journal misattributed the fiasco to Pritzker, but even within Party, Governors need the complicity of Party’s legislative syndicate.) Following is from the Chicago Tribune, from which the WSJ quoted.

The owner of two-thirds of a massive natural-gas-fired power plant in Will County is moving their part of the facility to Texas.
Literally.
As in, putting huge turbines on flatbed trucks and driving them south to friendlier climes.
We’ve learned that two-thirds of the capacity at the 1,350-megawatt Elwood Energy facility—the largest natural-gas-fired peaker power plant in Commonwealth Edison’s territory and one of the biggest in the nation—now is being shut down thanks to Illinois’ landmark clean-energy law [Climate & Equitable Jobs Act] enacted in 2021. The sudden removal of that whopping 900 megawatts of capacity could well drive up local electric bills that already have been rising.

And this:

The remaining three units at Elwood will continue to operate at the site and now will be permitted to do so under the law until 2045. Why? Because the previous owner, J-POWER, sold those three units to Dairyland Power Cooperative, of LaCrosse, Wisconsin, which by virtue of being a nonprofit is allowed by CEJA to operate gas-fired power plants over the next few decades that otherwise would have to shutter in a few years.
So those emissions also will continue well into the future, but only because ownership changed from a private company to a nonprofit.
Yes, that’s how CEJA works. If you’re not a privately held gas-plant operator, you can continue to pollute.

This is far more than the empty virtue signal that the WSJ article suggested. This is the wanton foolishness resulting in destruction that Party is so enthusiastically pursuing for reasons only Party members can have a glimmer of understanding.

A Problem of their own Making

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In a Wall Street Journal article centered on the People’s Republic of China’s setting up trade-centric “retaliatory tools,” there’s this bit in the middle of the piece:

The rules could put US and other Western companies in a bind: they need to comply with US restrictions on trade with China and often want to reduce their reliance on Chinese production, yet such actions expose them to punishment by Beijing and even possible expulsion from the world’s most important manufacturing hub.

Of course, if those companies weren’t in the PRC in the first place, the PRC couldn’t “punish” them. They’ve had plenty of time to move their supply chains and businesses out of that nation and plenty of warning regarding the necessity of doing so.

Still, there remains no time like the present to take serious heed and get moving on those adjustments.

A Conundrum

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A town in Massachusetts has laid it out. South Hadley had a referendum put in front of them that proposed a 50% property tax hike. Voting it down, said its pushers, would be the end of the town as residents knew it.

Override backers argued that the measures were vital to preserve schools and town services. Without a revenue infusion, officials had warned, major cuts loomed: no school sports or extracurriculars, slashed Advanced Placement classes, reduced police and public-works staffing, and more.

That “more” included slashed Advanced Placement offerings, along with hits to police and public-works staffing.

The town’s residents, though, made it clear they’ve had enough of tax increases with little to show for them but empty promises by the taxers. The referendum was voted down in no uncertain terms, 65% to 34%. The message of this defeat was clearly articulated by Rudy Ternbach, semiretired and leader of the anti-override group Alliance for Fair Taxes:

I think the results of the election show voters do not want to try and fix the government by increasing taxes on those least able to pay. They want more efficiencies in government and less taxes.

Sadly, but entirely predictably, the message was not received by Leftist tax-and-spenders. Lisa Wong, South Hadley’s Progressive-Democrat Town Manager:

“We will regroup and continue to communicate with the public on the changes ahead,” she said by text, adding that the town would also push for policy changes and greater support at the state and federal levels.

Politicians of the Progressive-Democratic Party cannot conceive of cutting spending or leaving taxes alone, much less reducing them. Efficiencies in government? Pfft. Progressive-Democrats only want to increase people’s dependency on government, if not at their own level, then further up the government’s food chain.

This is a message to the rest of us and a lesson to be heeded come November.