No Nation is an Island

That’s the concern of The Wall Street Journal in one of its Thursday editorials.

President Trump’s biggest achievement has been the revival of faster US economic growth, but past performance is no guarantee of future results. The White House should be worried about growing economic strains in the rest of the world, and policy makers need to prepare. The US is not an island.

The WSJ went on to note that the Germany economy shrank 0.2% in the last quarter, the Japanese economy shrank by 0.3% in the same quarter, and the PRC’s economy “only” grew by 6.5% year-on-year in the same quarter.  The WSJ particularly worried about the German auto industry.

A Thought on Amazon’s Choices

Amazon.com has made its selection (-s, plural as it turns out) for its alternate corporate headquarters: Arlington County, VA’s Crystal City and New York’s Long Island City, with a booby consolation prize—or a scrap bone—tossed to Nashville, TN.

I have a couple of thoughts about this.

San Antonio, in Texas, had misgivings and declined to play Amazon’s game.

“Blindly giving away the farm isn’t our style,” wrote San Antonio officials in an open letter to Mr Bezos.

Others openly groveled and kissed the ground on which Amazon officials walked when those worthies deigned visit.

A Bit of Perspective

The 1%-ers, the Evil Rich.  How much does it take, really, to become of member of the world-wide crowd of really rich folks, or how much would have to be given up to leave that group?  Jade Scipioni, of FOXBusiness, offered some information from Credit Suisse Research Institute’s 2018 Global Wealth Report last week.

  • the global top 1% requires a net worth of US$871,320
  • the global top 10% requires a net worth of US$93,170
  • the global top 50% requires a net worth of US$4,210

Quick Thought on Tax Reform

The Progressive-Democrats won a majority in the House, and the Republicans look like they’re going to expand their majority in the Senate.  That looks like legislative paralysis in the next Congress.

However.

The next Congress won’t be sworn in until 3 January 2019.  That gives two months for the present Congress, with Republican majorities in both houses, to get some remaining stuff done.

Top on that list in my august view is tax reform.  This Congress needs to move to make permanent the individual income tax cuts that otherwise will expire in 2025.  Get it done now, before the Progressive-Democrats, with their gridlock, take sufficient office to block the reform.

A Government Personnel Shakeup

This one in the Republic of Korea.  RoK President Moon Jae-in has removed many of his economic cabinet members because the RoK’s economy has continued to stagnate.

So far, the government’s prescribed medicine—big increases in public-sector hiring and the minimum wage—hasn’t proved an elixir.

What a surprise—government crowding out the private sector, competing with the private sector for labor, demanding that workers be paid more than their work is worth isn’t economically stimulative.

Unfortunately, Moon is only changing personnel; he’s not correcting policy. Here’s Lee Sang-jae, Eugene Investment & Securities macroeconomy analyst:

Brexit Talks

In a Wall Street Journal article about the general government paralysis in Great Britain as the Brexit question is allowed to consume all of Parliament’s energy, one statement jumped out at me.

Instead, her [Theresa May’s] premiership is being defined by the Brexit negotiation itself.

What negotiations? Brussels is dictating punitive terms, and May and her team are meekly rolling over and accepting them. They’re even agreeing to discuss an effective partition of Great Britain rather than rejecting the question out of hand and walking out of all of the “negotiations” over the calculated insult and attempt to dismantle Great Britain.

Censorship

The ramp-up in political spending across Facebook’s social networks, which also include Instagram, is breathtaking: In 2014, digital ad spending was 1% of all political ad spending. Now it’s 22%, or about $1.9 billion, according to the nonpartisan Center for Responsive Politics. Facebook says that politicians have spent nearly $300 million in the US on Facebook ads since May.

And

Politicians who want to reach the same voters their competitors are reaching on Facebook have little choice but to go there, too.

Which helps explain why Facebook was so willing to censor conservative political ads.

Federal Reserve Bank Regulations

The current iteration of the Federal Reserve Bank Board of Governors, with several President Donald Trump appointees, is proposing a rule that would significantly ease the amount of cash big banks must keep on hand to cover bills due within 30 days.  The savings from this are expected to aggregate to $77 billion per year—not a lot compared to the total of liquid assets held by those banks already.

There is a rumbling, though.  An Obama appointee to the BoG, Lael Brainard, is objecting to the regulatory easing.

She added that banks are “providing ample credit and earning ample profits” under current liquidity requirements.

A Useful Step

It’s even a step toward my goal of privatizing Social Security.  Tom Giovanetti, Institute for Policy Innovation President wrote of an idea for an additional tax cut in Wednesday’s Wall Street Journal.

[I]nstead of an impotent income-tax cut or, say, a payroll-tax cut of 4% of income, why not redirect that same 4% into personal retirement accounts for every worker? … With no decline in disposable income, American workers would suddenly be investing for retirement at market rates in accounts they own and control, instead of relying on Congress to keep Social Security solvent.

The Wages of a Minimum Wage Law

Recall Seattle’s 2015-2016 minimum wage law that mandated a rise in minimum wage from $9.47/hr to $12 for small businesses and $13 for large businesses.  The University of Washington early on published a study that demonstrated a drop in hours worked by low-wage workers of some 9% with a resulting decrease in actual income for those low-wage earners—ones least able to afford the cut—of some $74/mo.

New, updated numbers are in, reflecting in particular tracks folks with jobs at the time the mandated minimum wage went up.