Tag Archives: economics

Yet Another Reason

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…to stop trading with and to bar exports altogether to (and imports from) the People’s Republic of China.

A US manufacturer of X-ray equipment had a decade-old patent invalidated by a Chinese legal panel. A Spanish mobile-antenna designer lost a similar fight in a Shanghai court. Another Chinese court ruled that a Japanese conglomerate broke antitrust law by refusing to license its technology to a Chinese rival.

This is the PRC weaponizing its legal system as that nation prosecutes the economic axis of its cold war against the US and against the West in general.

This goes further, to include efforts to extend PRC legal jurisdiction into other nations:

In December, the EU sued China in the World Trade Organization on behalf of Swedish telecom-equipment maker Ericsson AB and other companies, complaining that China has barred EU companies from suing to protect their patents in courts outside China. The EU called China’s policy “extremely damaging,” saying Chinese companies requested the intervention “to pressure patent right holders to grant them cheaper access to European technology.”

This is just naked theft by a nation that insists on using its laws and courts as weapons of war rather than as tools for protecting its citizens.

It’s time for us and for the EU to stop technology transfers—under any guise—to the PRC, and that must include what I wrote in my lede: bar all exports to the PRC and stop trading with that enemy nation. The transition will be deucedly expensive, but it’ll only get more so the longer we dither and delay taking that step.

Debt Limits and Spending

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The Congressional Budget Office is out with its projection for our nation’s economic future.

As for the much-discussed federal debt, the nearby chart shows how fast it has grown in the last several years. Debt held by the public—the kind we have to pay back to creditors like the Chinese and Japanese based on contracts—is now 97% of the economy, and will soon rise to 100% and keep going to 118.2% in 2033. How high can it go before creditors stop lending? No one knows, but it will be ugly if they do.

Here is that nearby chart:

This illustrates the tight relationship between spending and debt limits, and why future spending cuts must be part of negotiations related to raising today’s debt ceiling limit. It’s barely possible to see any effect from the 2011 debt limit increase that was agreed in exchange for some “freezing” of Federal spending levels, a pseudo-freeze that in the end ended rather quickly.

There need to be real reductions in Federal spending, not just a reduction in spending growth or even a pretend freeze. There’s plenty of room in welfare spending, for instance, for cutting. Furthermore, all Federal spending is discretionary, the bad habit of calling some spending mandatory notwithstanding. Finally, to put a legitimate floor under spending (which doesn’t contradict the forgoing because it’s a floor not a mandatedly ever-increasing level), there’s a Constitutional requirement to spend adequately on national defense and debt repayment.

In the end, too, tax rate cuts, leaving more money in the hands of private economy actors—us average Americans and our businesses—leads to increases in Federal revenues. This has been empirically demonstrated by every tax rate cut since President John Fitzgerald Kennedy’s reduction of the top rate from the neighborhood of 90% to the region of 70%.

Federal spending cuts coupled with Federal tax rate cuts—they’re win-win for our economy and our nation, if only the Progressive-Democratic Party politicians in Congress and the White House would get out of the way.

Caveat Emptor

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In a Wall Street Journal editorial centered on the rule-making moves by the Biden administration’s Consumer Financial Protection Bureau and Federal Trade Commission to cap or to outright ban so-called junk fees, there’s this tidbit offered in all seriousness by the FTC’s Lina Khan (the WSJ didn’t directly attribute this to her, but she’s the FTC’s Chair, so the tidbit wasn’t offered without her prior permission):

Consumers who select and travel to dealerships based on an advertised offer, only to learn late in the process (if at all) that the advertised offer does not apply, have often spent hours trying to purchase a car[.]

This, of course, is nonsense. Every car maker in the US, from “ordinary” car makers and dealers to luxury car makers and dealers, offer on their Web sites options to “build your car” for every model on offer, and the build options present every option available to the model along with the effect of option’s inclusion or removal on the car’s final price. Consumers who select and travel to dealerships, even if the selection is originally based on an advertised offer, will have already built their going-in preferred model and have their eyes wide-open to counteroffers and to other options offered or no longer available—together with their costs and savings identified during those discussions.

These proposed rules are nothing more than Government attempting to dictate to businesses how they must operate and to us average Americans what we will be permitted to buy. And that’s not just the exampled car-buying, it’s how this government wants to control how we do our banking, our investing, how we and our businesses in general operate in an economy.

Maybe it’s not caveat emptor. Maybe it’s cave imperium that we should operate under.

Debt Ceiling “Negotiating”

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In a Wall Street Journal op-ed centered on ways to “save” Social Security and Medicare, Progressive Policy Institute‘s Director of the Center for Funding America’s Future, Ben Ritz, opened with this bit for his lede:

The Biden administration has sensibly rejected attempts by some far-right Republicans to hold the full faith and credit of the US hostage in exchange for spending cuts. The administration now must show it will be open to good-faith budget negotiations after the impasse over the federal debt limit is resolved.

Leave it to a Left-winger to say, once again, “Trust us.”

No. Debt limits are reached and need lifting because of prior spending excesses.  And continued spending excesses because there follow no “good faith” budget negotiations from the political Left after the impasses. The current debt-ceiling is no exception.

It is the Progressive-Democratic Party politicians, from the White House on into both houses of Congress, who are holding our nation’s credit-worthiness and our economy as a whole hostage against their demand to continue their profligate spending.

The debt ceiling cannot be lifted, sensibly, without being paired with actual spending cuts (not reduced rates of increase) as part of the package so as to obviate future need to raise the limit once again.

If the Progressive-Democrats were serious about our credit-worthiness and our economy, they’d get out of the way of serious negotiations.

Idiocy

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The Washington Post published an op-ed about the cost of eggs, and how they’re really cheap, and both WaPo and the writer were serious. Why eggs are cheaper than you think goes the headline. Then, with a straight face,

If you look at old cookbooks, you will notice that the authors seem to view eggs and chicken as almost a luxury good. My 1950 “Betty Crocker’s Picture Cook book” contains recipes for making mock chicken dishes—out of veal. Go back further and the 1896 Fannie Farmer cookbook sternly informs readers that, “eggs, even at twenty-five cents per dozen, should not be freely used by the strict economist.”

The writer then went on in great length about how much incomes have risen in those 125 and more years since, the time committed to cooking has decreased in those 125 and more years since, and on and on.

All true, too.

However.

We don’t live those 125 and more years ago; we live today, and we’ll live tomorrow. Yesterday is gone. And as even the writer of this WaPo op-ed admits:

…the price of eggs has spiked so much—from $1.79 in December 2021, to $4.25 a year later….

That price spiked far higher—over $11 the dozen—in some places. That’s today’s money for today’s eggs. The real world is today, not yesterday. Regardless of those old timey prices, we’re still paying today’s inflated prices for our eggs, and for all of our food, for which eggs are only a stand-in in this context.

This is the idiocy of the Left.