Tag Archives: markets

Another Assault on US Intellectual Property

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Beijing has proposed requiring cloud-computing services providers to turn over essentially all ownership and operations to Chinese partners and could result in the transfer of valuable US intellectual property, according to the letter, viewed by The Wall Street Journal.

Not “could result”—technology theft transfer is the point of the requirement.  This comes against the backdrop of the People’s Republic of China’s ongoing technology requirements.

China already places restrictions on investing for foreign cloud providers operating in the country under rules passed in the last two years…including forced collaboration with rivals and technology transfer.

Is the PRC market really worth these losses?

House Freedom Caucus of No

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Yesterday, the membership of the House Freedom Caucus of No forced the American Health Care Act, the first stage of a three-stage Obamacare repeal and replace program offered by the majority of the House Republican Conference, to be withdrawn from the day’s backup vote (recall that these No-ers already had forced a delay from Thursday’s vote over their demand to have their way or there could be no Act), and so there will be no AHCA.

As a result of the No-ers’ our way or nothing attitude, the American people now get nothing at all.  We’re forced to stay with Obamacare and the disastrous failure of that program. Of particular interest, included in those American people are these No-ers’ own constituents, whose interests these No-ers so loudly pretend that they’re protecting.  Yet, with their performance, they’ve ensured that their own constituents also get nothing; the No-ers have betrayed their own electorate.

I have to ask: on whose side are the No-ers; their tactics have led directly to the continuation of Obamacare?  Are they on the side of the Progressive-Democrats whose program Obamacare is?  Or are they in Congress for their own benefit?

They’re certainly not interested in the welfare of the American people, or of their own constituents.

For your reference in the 2018 election cycle, here are the members of the House Freedom Caucus of No, who put their demands ahead of the nation’s citizens’ needs:

  • Mark Meadows, North Carolina, Chair
  • Justin Amash, Michigan
  • Brian Babin, Texas
  • Ted Poe, Texas
  • Randy Weber, Texas
  • Rod Blum, Iowa
  • Dave Brat, Virginia
  • Tom Garrett, Jr, Virginia
  • Morgan Griffith, Virginia
  • Jim Bridenstine, Oklahoma
  • Mo Brooks, Alabama
  • Ken Buck, Colorado
  • Warren Davidson, Ohio
  • Jim Jordan, Ohio
  • Ron DeSantis, Florida
  • Bill Posey, Florida
  • Ted Yoho, Florida
  • Scott DesJarlais, Tennessee
  • Jeff Duncan, South Carolina
  • Mark Sanford, South Carolina
  • Trent Franks, Arizona
  • Paul Gosar, Arizona
  • David Schweikert, Arizona
  • Andy Harris, Maryland
  • Jody Hice, Georgia
  • Raúl Labrador, Idaho
  • Alex Mooney, West Virginia
  • Gary Palmer, Alabama
  • Steve Pearce, New Mexico
  • Scott Perry, Pennsylvania

Delays

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The House Republicans were forced to cancel yesterday’s scheduled American Health Care Act vote.  The Freedom Caucus, the Caucus of No, couldn’t be satisfied.  Congressmen like Jim Jordan (R, OH) and Caucus of No Chairman Mark Meadows (R, NC) refused late compromises, all the while insisting by implication from their refusals that constituents of other Congressmen, for instance Tom Cole (R, OK), worked for them and not that Cole worked for his Oklahoma constituents—and that those Oklahoma constituents might have different imperatives than those Congressmen of the Caucus.  So, no compromise from the No-ers.

Even after regulation changes that were part of Phase II of the overall three phase repeal and replace plan were offered to be brought into this Phase I AHCA, the No-ers refused.  Never mind that even the need to make such an offer displayed a monumental distrust by the No-ers of their ex-Congressional colleague, Tom Price, now Secretary of Health and Human Services and the gentleman who would have carried out those regulation rescissions of Phase II.  Even the No-ers’ plaint that they wanted those regulation removals written into law rather than merely rescinded makes no sense: that could have been legislated next year, by this same Congress, and that, as change to a done, deal would have thereby much easier to do.

Nor did a single member of the Caucus of No offer either any plan for getting the changed bill past a Senate filibuster from these too-large changes or any explanation of why their demanded changes would have permitted the bill still to go through via reconciliation and a majority-only vote.

It’s clear that the Freedom Caucus, this Caucus of No, is little more than a collection of yapping porch dogs, or alternatively just a bunch of right-handed virtue-signaling snowflakes, with little interest in actually improving our health provision system or restoring our health care to us constituents and our doctors.

Obamacare Replacement

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One aspect of the plan on offer in the House is this:

…whether it includes enough reform to arrest the current death spiral in the individual insurance market.

Notably, the bill includes a new 10-year $100 billion “stability fund” that allows states to start to repair their individual insurance markets. Before ObamaCare, it wasn’t inevitable that costs would increase by 25% on average this year, or that nearly a third of US counties would become single-insurer monopolies. With better policy choices, states can make coverage cheaper and more attractive for consumers and coax insurers back into the market, and the stability fund is a powerful tool.

Right idea, but it needs a tweak.  As with all Federal transfers to the States (even though nearly all of them do not have this), this transfer needs a sunset (ideally, but not as a deal breaker, on a declining balance to the sunset date) by which the transfer will cease to exist.  States need time to adjust their budgets as their addiction to Federal money is broken, but in the end the costs a State inflicts on itself must be the sole responsibility of that State.

Then there’s this:

The larger goal is to start to restore the traditional state regulatory authority over health insurance that ObamaCare supplanted for federal control. Local governments understand local needs best. With more flexibility, autonomy and accountability, the GOP hope is that reform Governors can pry open markets and help promote a larger and more dynamic business.

The larger goal still, and an even better one, should be to reduce regulation altogether to a great degree, and let the markets regulate health insurance products and costs.

In the end, too, local governments do understand local needs better than remote Federal, and State, governments.  But the greatest understanding is even more local: the patient and his doctor.  These are the participants in a free market for health insurance products—nation-wide and freely crossing State borders—whose “regulatory” activities should prevail.

A Thought on Free Trade

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…which I’ll assume for this post is structured between participant nations as fair trade, since it’s possible to have free and unfair trade, and it’s unfair trade that should be anathema.  Not all free trade is unfair; the parameters of any trade agreement, parameters that make the trade fair or unfair, are matters of mutual agreement (or perhaps not so mutual in the case of unfairness) among those participants.

Don Boudreaux triggered my thought with his piece in US News & World Report.

It’s true that trade destroys some particular jobs. … Being concentrated in a handful of industries, jobs lost to trade are easy to see. But the same trade that destroys jobs also creates jobs elsewhere in the American economy. These job gains, being spread across many industries, are difficult to see. But they are real.

In fact there is a net gain in jobs, albeit it’s a small net.  Being diffuse, that gain doesn’t get noticed any more than do the sets of jobs themselves.

Foreigners who sell to Americans get dollars in return. And like Americans who are paid in dollars, foreigners either spend or invest their dollars. When foreigners spend their dollars, American exports rise. More jobs are created in American industries that export.

And

American jobs are created also when foreigners invest their dollars. For example, when the Canadian company Tim Hortons opens new stores in the United States, not only are American workers employed to build or refurbish these stores, Americans are also employed to staff them. Or when Koreans use dollars to buy stock in Apple or Caterpillar, these companies become better able to expand operations.

About those last two quotes.  Those outcomes also apply from the trade partner’s perspective.  Simply swap in “partner” and “partner currency” and swap out “American” and “dollars” as applicable in those two paragraphs to see the application.

Both (all—there’s no need to suppose only bilateral arrangements) sides to international trade agreements make absolute gains, just as in a domestic free market economy, all citizens participating in a freely agreed exchange make absolute gains.  Even though among those individual participants, one man has a net outflow of his money, and the other man has a net outflow of his goods he’s presenting in trade, both men have gained from their trade.

This is where the demand of some who are pleased to call themselves economists in the Trump administration go so badly wrong.  Their demand for balance in absolute terms—no import/export imbalance, no greater outflow of money than inflow—is impossible to achieve in a truly free and fair international trade environment.  Balance requires trade to be a zero-sum gain.  Free trade isn’t, though; all participants gain from free, fair trade.  Balance not only cannot be achieved, it’s undesirable.