Category Archives: regulation

“Banking System is Safe”

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That’s what President Joe Biden (D) claims after the Silicon Valley Bank collapse.

Americans can rest assured that our banking system is safe. Your deposits are safe. Let me also assure you that we will not stop at this. We will do whatever is needed.

But that’s true only if regulators do their job and enforce the rules in place—as they chose not to do in the runup to SVB’s failure—and if risks are well-known and left to the responsibility of the risk-takers in a free market rather than laid off to us taxpayers to make those taking the risks whole.

That last just transfers the risks to us and leaves the risk-takers entirely free of risk. That last, also, is what concerns Senator Tim Scott (R, SC), even though Biden claims that taxpayers won’t cover the losses. Yes, we will. SVB doesn’t have enough book value, even were its liquidation not done at fire sale prices, to cover the billions of investor—venture capitalists, startups, bond holdings, and on and on—losses that will occur. Scott’s concerns:

We just heard recently that they’re going to really have the greatest form of corporate cronyism that we’ve seen in a very long time. They’re going to insure all the deposits, even the ones over the $250,000 limit, which means that the most sophisticated investors are now going to have the insulation of the federal government. That is problematic. It sends a very negative statement to the marketplace….

Scott’s concerns are well-founded. Here’s what Treasury Secretary Janet Yellen, Fed Chairman Jerome Powell, and FDIC Chairman Martin Gruenberg said in their Sunday joint statement

Today we are taking decisive actions to protect the US economy…providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth.

That bailout is destructive of our banking system and of our economy at large.

I’ll have more on that last tomorrow.

Rules for Investing in the People’s Republic of China

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The Biden administration is starting to pay lip service to setting rules for American businesses’ investing in the People’s Republic of China. It’s

preparing a new program that could prohibit US investment in certain sectors in China, a new step to guard US technology advantages during a growing competition between the world’s two largest economies.

And, of course, the effort will need new taxpayer money.

Treasury and Commerce departments said they expected to finalize their policy on the issue in the near future. Both agencies said they expected to seek additional resources for the investment program in the White House budget, which will be released next week.

Naturally, the administration isn’t prepared to specify which sectors would be included, or how these departments propose to enforce their rules. Just give them money.

Since the Federal government is in the business of regulating American business’ investing in enemy nations, I have my own proposal for a rule for investing in the PRC: No. No investments in the PRC, and those businesses with investments there have two years in which to wind down those investments and withdraw from the PRC.

That won’t cost nearly as much. Just require public companies to report their investments in their quarterly SEC filings, and private companies to report same in their Federal tax filings—which would easily fall within the requirement, with only the smallest adjustment, to report on accounts held in foreign nations. Require those particular reporting subjects to be available to the public via FOIA requests. These requirements would come close to paying for themselves in the early years by assessing fines equal to the size of the investments not reported or inaccurately reported.

I have an alternative rule proposal: for every dollar an American business wishes to invest in the PRC, it must invest three dollars in the Republic of China. If the RoC can’t absorb all of the investment, then the business cannot invest at all in the PRC. This alternative would carry the same reporting requirements and penalties as my first proposal.

A final alternative: spread those three dollars among any number, greater than one, of the nations rimming the South China Sea in addition to the RoC. Again, with the same reporting requirements and penalties.

Illinois and the 2nd Amendment

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In a Just the News article concerning an Illinois district judge’s impending order declaring unconstitutional that State’s Progressive-Democratic Party-run government ban on a broad range of firearms and the requirement for citizens to register with that government those firearms they already possess, there’s this closing paragraph.

In federal court, four cases consolidated in the Southern District of Illinois have a hearing set for April 12. The state filed its response to a motion for a preliminary injunction Thursday arguing the ban addresses dangerous and unusual weapons the Founders of the US Constitution couldnt imagine in the 18th Century. Plaintiffs argue the law violates the Second Amendment right to keep and bear arms.

Which leads me to ask: what would be more dangerous than privately owned artillery and sea-going combat ships? Yet those weapons were privately owned and contributed heavily to the war effort in our Revolution against another government that was, among other things, seeking to disarm us.

For the benefit of those Illinois Progressive-Democrats, here is the 2nd Amendment:

A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.

Those personages should note carefully that there are no caveats in that short sentence. In particular, there is no caveat for “Arms of which Government disapproves from time to time.”

Gun Control and Racism

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Jacob Gershwin opened his Wall Street Journal piece on gun control with this lede:

Historical, racist gun laws are taking on new relevance in legal battles over modern-day gun regulations, following a Supreme Court ruling that expanded the right to bear arms.

He followed up [emphasis added]:

In the 1700s and 1800s, states across the country passed laws to keep guns out of the hands of slaves, free Black people, Native Americans and Catholics. Such discriminatory gun restrictions would be unconstitutional today, but they have entered the gun-rights debate as judges look to apply the Supreme Court’s decision last June that said gun restrictions must be anchored in historical traditions.

Now, despicably, many Federal and State government “lawyers” are claiming that those old, ugly, and by-design racist and anti-religion—those Evil Catholics—are part of that historical tradition as they continue their efforts to disarm all of us average Americans, in toto. US prosecutors in front of an appellate court:

They [[those racist gun control laws] nevertheless show that the Framers understood that legislatures could make such judgments to categorically disarm groups of people deemed to be dangerous.

Dangerous groups of Americans like those of us who might want to demur from Government behaviors, behaviors like the IRS targeting conservative American political groups, like the Department of Justice targeting mothers disputing with local school boards as domestic terrorists, like the FBI targeting traditional Catholics (those folks again…) as right-wing extremists and “investigating” them.

What prosecutors like those so carefully ignore is that that prior set of laws, that prior “tradition,” was wholly erased from the American body politic—the honest body politic—by the Civil War, the 13th and 14th and 15th Amendments, and the recognition that all Americans are equal under American law—under all American laws.

For those persecutors prosecutors to argue that those racist gun control laws are somehow still part of our historical traditions is for them to ignore critical parts of gun control law history: the part that had post-Civil War South and too many jurisdictions in the North enacting gun control laws explicitly to disarm and keep unarmed and helpless black Americans—freed and newly freed—along with their white supporters against depredations, that ranged from rape through lynching, at the hands of racist groups like the Ku Klux Klan and other white supremacists.

Those prosecutors are showing their own invidious racist bent.

Yet Another Reason…

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…for State and local jurisdictions to stop taking government funds. This one is from HUD.

In proposed regulations that would touch any jurisdiction that accepts any sort of HUD funding, fair housing must mean a plan to “promote equity in their communities, decrease segregation, and increase access to opportunity and community assets for people of color and other underserved communities.”

Sounds reasonable.

However.

Those required to comply will include more than 1,200 cities and counties receiving HUD funding. All will be required to develop “equity plans.”
Such equity could mean anything from building low-income housing to redrawing school district lines for racial or socio-economic integration, all as assessed by the HUD bureaucracy.

Because folks moving from here to there still will be told, on arrival there, where they will be permitted to live and where their kids will be permitted to go to school and on and on—they’ll still be under government control. If they want, for good or bad reasons, to live with folks who look like them, or who share their values, or…, central government under these rules will not permit them that choice.

Racial discrimination in housing is pernicious, Husock concluded his piece (at the link). But he doesn’t go far enough in his conclusion. For Washington to invoke it to socially engineer neighborhoods across America is dangerous. No. For the Federal government itself to give special treatment to one group of Americans over other groups of Americans is especially pernicious racism.

This is another example of Federal government funds that are being transferred to State and local jurisdictions coming with strings attached, for good reasons or ill. Government strings only increase the central government’ ability to dictate terms to locals, to reduce our States to the same relationship to the central government as counties have relative to their States: merely convenient districts whose sole purpose is to enforce Federal law. That works for counties in States, but the structure of our system of federal government puts the States—individually as well as a group—on par with our central government on nationally domestic matters—and on higher authority on matters domestic to an individual State.

It is this federal republican structure, the role of our several States as [50] separate experiments in democracy, that string-loaded Federal funds transferred to States and locals so severely deprecates.