Expanding their Empire?

The SEC—the Securities and Exchange Commission—doesn’t have enough power; it wants to convince more private companies, over which it has no jurisdiction, to go public so it can regulate them, too?

To spur more companies to go public, the new head of the Securities and Exchange Commission has turned to a veteran Silicon Valley lawyer whose career has involved some of the biggest deals in history.

SEC Commissioner Jay Clayton seems to be sincere in this effort, but he won’t be around forever, and his predecessor had different regulatory ideas, and so likely will his successors.

Then there’s this:

The USPS and Price Increases

The United States Postal Service lost more than $560 million in the previous quarter (!), and it wants a pay raise to pay for it, a rise in the price of stamps by a penny.  Now, a penny might not seem like much, especially against the current price for a first class stamp on a 1oz letter, but it is symptomatic of a much larger problem: the USPS, a protected monopoly in the first class mail niche and so lacking actual competition and associated innovative pressures, is a money-losing (to the tune of two and a quarter billion dollars each year) proposition.

Going Soft

Senate pseudo-Republicans are balking at one good item that was contained the House-passed American Health Care Act: repeal of Obamacare’s trillion dollars’ worth of taxes.  These guys actually don’t see the value of that repeal.  Senator Susan Collins (R, ME) is typical:

I don’t see how you can repeal all of the pay-fors…and still meet the goal of providing health-insurance coverage for people who truly need assistance[.]

Aside from the false premise of needing Federal government “pay-fors” as a default position, rather than a last result, the Lady from Maine and her fellows plainly either don’t understand free market principles, or they have no confidence in free markets.

The Durbin Amendment and Price Fixing

Senator Dick Durbin (D, IL) added to Dodd-Frank an amendment that mandated the maximum price large banks could charge merchants who process debit-card payments.  The House’s Financial Services Committee, in marking up Chairman Jeb Hensarling’s Financial Choice Act, included repeal of the Durbin Amendment.

Naturally, Durbin has demurred, and he did so, among other place, in a Letter to the Editor of The Wall Street Journal.

The Freedom Caucus of No

Daniel Henninger had some thoughts in Wednesday’s Wall Street Journal on this group’s first 100 days; read the whole thing.  I’m interested in one aspect of the No-ers’ first 100 days that Henninger was too polite to say out loud.  Henninger pointed out

Back in 2016, Speaker Paul Ryan and the House leadership held public hearings, conducted negotiations inside the House conference, and published texts of the proposed legislation to repeal and reform ObamaCare. The American Health Care Act that emerged from this process had both a political and policy purpose.

Free Markets

President Donald Trump revived his tough talk on the North American Free Trade Agreement Tuesday, warning Canada it must stop protecting its dairy farmers from US competition.

Canada’s trade policy, after all, manages dairy production through a quota system (which is anathema in itself to a free market, but that’s mostly a Canadian domestic problem), and it seriously impedes foreign competition with tariffs designed for the task.

Circularly, Canada controls dairy prices by matching them to “average” production costs, and then controls production by setting allowed quotas.  With prices thus under government control, Canada sets tariffs to achieve prices for imports of foreign dairy products that aren’t competitive.

Obamacare

As The Wall Street Journal rightly pointed out, regarding the failed Obamacare repeal and replacement effort and the failing renewed discussions between the House Republican Conference and the Freedom Caucus of No,

The fury…suggests that some Freedom Caucus opposition is more cynical than sincere. Do its members want to appear to negotiate in good faith but insist on changes that centrists can’t accept, so they can then accuse centrists of killing the reform revival?

And

…perhaps there’s still hope for health-care reform. But first Republicans have to decide if they can accept progress that is short of perfection. If they can’t, then they’ll blow their best, and maybe only, shot at repealing and replacing a failing entitlement.

Trade Barriers

Since the meeting between PRC President Xi Jinping and President Donald Trump is a matter of concern these days, and the trade negotiations that are part of that meeting also are a matter of concern, herewith a concern of my own.

Maybe this is the right time for the two leaders to cut a deal to slash Chinese trade barriers.

The three biggest PRC trade barriers are these:

  • the PRC’s demand for government backdoors into American foundational software used by companies wanting to do business in the PRC

Contrasts

As the Trump administration begins to shape its policy on drugs, tension is growing between a treatment-focused approach, embodied in a new commission on opioids headed by New Jersey Gov. Chris Christie, and the aggressive prosecution of drug crimes promised by Attorney General Jeff Sessions.

There need there be no tension because there is no contradiction.  The two approaches—nail hard those who prey on the vulnerable and the addicted—and working to free the addicted from the controls of their addiction (“free from the controls” because an addict never loses his addiction; he can only reach a point where he can say reliably, “not today.”  That’s where current medical technology has us) rather than simply jailing them, too, potentiate each other.

Another Assault on US Intellectual Property

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?