A Thought on a Thought on Bank Reserves

Neel Kashkari, President of the Federal Reserve Bank of Minneapolis and active member of the Federal Open Market Committee, had the thought that’s the object of my thought in a recent op-ed in The Wall Street Journal.

…increase capital requirements on the biggest banks—those with assets over $250 billion—to at least 23.5%. It would reduce the risk of a taxpayer bailout to less than 10% over the next century.

No.  Have the banks publish their reserve holdings and the total of the loans outstanding in their portfolio together with the per centages of the latter that are current, late, or in default.  Let each bank’s creditors—depositors and other lenders—and investors make their own assessments of the bank’s viability.  Government need not be involved.

A Terrible Nightmare for Bureaucrats

Here’s Joe Pizarchik, ex- Office of Surface Mining Reclamation and Enforcement Director in the Interior Department, for all of the Obama years:

My biggest disappointment is a majority in Congress ignored the will of the people.  They ignored the interests of the people in coal country, they ignored the law and they put corporate money ahead of all that.

Wow.  Just wow.  Because the people, exercising their will in electing the majority of Congress—all the members of Congress, come to that, every single one of them—had their will ignored when the majority that they elected executed on their will by rejecting a bad regulation.

Another “Drop Dead” Moment for New York City?

That was The New York Daily News‘ cynical characterization of President Gerald Ford’s refusal to waste taxpayer money on the city’s profligate irresponsibility with its own budget and spending habits.  Is Mayor Bill de Blasio (D) exposing New York City to another round of badly needed tough love from the Federal government?

One New York City Council member wants to expand a summer jobs program for youth.
Another is seeking millions to push the city’s bike-share program deeper into poor neighborhoods.
And another wants to increase funding to legal services for immigrants and adult literacy programs.
Such is budget season at City Hall, where the budget is expected to grow substantially for the fourth year in a row, to some $84.67 billion, up from about $70 billion for fiscal year 2014….

A Carbon Tax Proposal

No less a pair of lights than George Shultz and James Baker III have one regarding atmospheric carbon emissions.  They’re prefacing their case on their then-boss, President Ronald Reagan’s successful negotiation of the Montreal Protocol to rein in the failures of atmospheric CFCs that were destroying the ozone layer.  Not that the two have anything to do with each other, but it makes for good obfuscation.

Shultz and Baker have four “pillars” to their proposal:

A National Parental Leave Policy

AEI has a piece on this; unfortunately, their piece proceeds from some false premises.

Developing a National Paid Parental Leave Policy

It’s interesting that folks of a bent proceed from such claims. They always decline to establish, for instance, that we need a national policy for parental leave. It’s such a widespread failure that I have to conclude it’s deliberately Alinsky-esque in its attempt to control the discussion.

The United States is one of two countries without a national policy providing new mothers with rights to paid leave following the birth of a child.

The Noise of Freedom

European Central Bank President Mario Draghi is worried.  The European is afraid of any relaxation of banking regulations in the US; it might cause some instability.  Never mind that instability is a Critical Item for innovation and growth, whether economic, political, technological, or anywhere else.  As he testified before the European Parliament Committee on Economic Affairs,

The last thing we need at this point in time is the relaxation of regulation….

The fact that we are not seeing the development of significant financial stability risk is the reward of the action that legislators and regulators and supervisors have been undertaking since the crisis erupted[.]

Transparency or Government Snooping?

Senator Ben Cardin (D, MD) had a letter to The Wall Street Journal‘s editor over the weekend.  He’s objecting to Congress’ removal of his (and Senator Richard Lugar’s (R, IN) Cardin-Lugar piece of Dodd-Frank that required public companies to disclose their payments to foreign governments.  Ostensibly, this was to track bribery actions, but like the rest of Dodd-Frank, it overstepped.

There’s nothing like a Democrat desperate to protect his legacy (Lugar was not silent on the matter; he voted for its repeal).

There is no unreasonable burden to businesses in asking them to track operating payments that should be part of the normal course of legitimate business.

What Should a Health Plan Cover?

Anna Wilde Mathews wondered about that in her piece in The Wall Street Journal.  First, a couple of asides.  Notice the tacit acknowledgment that we have no health insurance plans available.  That industry was eliminated in toto by Obamacare, which replaced the industry with a Federally mandated, publicly/privately funded health coverage welfare program.  Next, notice the tacit assumption in the piece’s subhead: that the law should mandate business decisions.

To the piece itself:

The 2010 health law created a new set of federal requirements for plans sold to individuals and small businesses, including a list of 10 benefits, among them prescription drugs, mental-health services and laboratory tests. It also mandated that plans cover preventive services such as vaccinations at no cost to enrollees.

Free Markets and Medical Care

Under Obamacare we have no free market in medical insurance or in medical care itself.  In fact, before Obamacare we had no free markets in those two industries, either: individual States controlled the premiums they would permit (within bands, but it was the States’ bands) and the measures required to be covered within each premium band.  Medical care was subject to what doctors and hospitals would be reimbursed by the insurance companies.  And insurance policies could not be sold across State borders, for all that insurers like Blue Cross\Blue Shield could sell substantially similar policies in various States: if someone moved, they could not take their original policy with them—even if they’d gotten it through their employer and in the new State they worked for that same employer—they had to buy the new policy.

Evil Tax Deduction for Trump Businesses

The Wall Street Journal has decided to put its collected knickers in a twist over a Trump tax-overhaul proposal that would preserve millions of dollars in savings for companies controlled by his family.  True.  His proposal would preserve the ability of companies to take a tax deduction for interest payments on company debt.

Companies that are part of the Trump Organization pay more than $20 million a year in interest on their debts, according to a Wall Street Journal analysis of financial disclosures and other public information about the companies’ outstanding loans and their interest rates.

The Journal‘s estimate of $20 million is conservative, meaning Mr Trump’s or his companies’ tax savings from being able to deduct interest payments from taxable income might be higher.