Tariffs and National Security

In response to President Donald Trump’s of tariffs to be applied to imports of steel and aluminum at some unspecified in the (presumably relatively near) future and coming from as yet unnamed nations, Japanese Trade Minister Hiroshige Seko said

I believe there is absolutely no impact on America’s national security from imports of steel and aluminum from Japan, which is an allied nation.

I agree in principle with the generally negative attitude toward tariffs.

However, Seko has misunderstood the national security question. Stipulate that Japan (and the Republic of Korea, another staunch ally and key exporter of steel to us) is a strong and reliable ally.

Big Government and Responsibility

The Progressive-Democratic Party-run States and the Republican-run States are demonstrating what they think of the intelligence and capability of ordinary American citizens.

The roughly half of states controlled by Republicans are therefore moving aggressively to roll back the law widely known as Obamacare, while the smaller number of Democratic states are working to bolster it.

One party does not believe that Americans in a free market, here for health care and for health care coverage plans, are capable of making sound decisions.  They need Big Government to think and act for them.  The other party believes the opposite: the ordinary man is fully capable of thinking for himself and doesn’t need Big Government to tell him what to do.

Statutes, Judges, and DoJ

The Supreme Court last Tuesday heard a case between Microsoft and DoJ concerning whether the emails of an alleged drug dealer must be turned over to the government pursuant to a search warrant to that effect.  The catch is that the emails are stored exclusively on servers in Ireland—nominally beyond the reach of the US’ long arm of the law.

The statute in question is the Stored Communications Act, enacted 30 years ago before email and similar electronic communications were available.

Investment Acumen

Investment managers at Harvard and the State of Hawaii—and a potful of others—have made big bets [sic] on the low volatility of the stock and bond markets and on the apparent permanence of that low volatility.

After interest rates collapsed on the heels of the financial crisis, they [pension funds, endowments, and family offices] ran into challenges paying pensioners and filling university budgets, and added riskier bets on hedge funds and venture capital in the hopes of winning better returns.

Don’t Pay It

The Federal National Mortgage Association, Fannie Mae, the government-run (never mind that it’s supposedly only government-sponsored, it began life as a government agency, it was set out on its own and failed, and now it’s under Federal Housing Finance Agency management regulation) mortgage securitizor, is failing again.  And now this agency wants a taxpayer bailout.

Fannie said Wednesday its regulator, the Federal Housing Finance Agency, would seek a fresh taxpayer infusion of $3.7 billion from the Treasury Department as a result of the loss [of $6.5 billion in the last quarter alone]….

A New Insurance Plan

Idaho has one.  Blue Cross of Idaho says it’s going to take advantage of newly issued State regulations to start marketing a plan that won’t meet Obamacare requirements, and they’re going to sell the plan alongside its existing Obamacare-compliant plans.

The Idaho Department of Insurance last month became the first state regulator to say it would let insurers begin offering “state-based plans” for consumers that involved practices generally banned for individual insurance under the ACA, including tying premium rates to enrollees’ pre-existing health conditions.

In particular,

A New Welfare Trap

This one is in the offing at the State level, and comes as a result of the punitive tax for not buying health coverage was repealed last December.

At least nine states are considering their own versions of a requirement that residents must have health insurance….

And

Maryland lawmakers are pursuing a plan to replace the ACA mandate, which requires most people to pay a penalty if they don’t have coverage. California, Connecticut, Hawaii, Minnesota, New Jersey, Rhode Island, Vermont, and Washington, as well as the District of Columbia, are publicly considering similar ideas.

Martin Feldstein Thinks the Markets are Headed for a Fall

He’s right, to an extent.  The Price-Earnings ratio for aggregated publicly owned businesses is at historic highs.  His reasoning centers on four factors: the Fed’s raising of its benchmark interest rates, which will make money cost more for businesses; the Fed’s reducing its own government bond holdings, which will contribute to upward pressure on interest rates generally; the Federal government’s needing to borrow to cover its still enormous deficits; and heretofore easy money has made the labor market too tight.

However.

“Insurance” Costs

My Medicare-aged wife broke her wrist, which necessitated surgery, and our health plan provider sent us an accounting of the costs involved.  Following are the high points of those costs.  It’s necessary to emphasize that the surgery is relatively routine following a wrist “fracture,” since the wrist is little different from a sack of pig’s knuckles, and where the arm bones, the ulna and radius join the wrist is more of an abutment than a joining.  The “fracture” was more of a slight jumbling of those pig’s knuckles and small breaks of the ends of the ulna and radius; the surgery was to rearrange the knuckles and repair the fractures with a plate and some bolts.  Really quite routine and minor (save the post-op pain and the long recovery time and discomfort); that emphasizes the nature of the costs.

Spotify and Crony Capitalism

Spotify AB wants to do an initial stock offering, an IPO, on the New York Stock Exchange, and the company wants to do it without benefit of bank underwriters.  Oddly, the NYSE has to ask the SEC for permission to amend its own rules to allow this.  Even more strange, the SEC is dithering over granting that permission—to allow the private enterprise, the NYSE, to conduct its own business as it sees fit, and more proximately, to allow the private enterprise, Spotify, to conduct its business as it sees fit.  The SEC is claiming, with a straight face, that it has until the middle of February to make up its mind.