Tag Archives: political economy

No More Private Ventures

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Our Progressive-Democrat-controlled government is continuing its actions to limit our private economy, this time moving explicitly against private enterprises.

In a meeting that starts at 10 am ET [last Wednesday], the Securities and Exchange Commission plans to vote on a proposal that would force hedge funds and private-equity funds to provide basic disclosures to their investors and guard against conflicts.

Because “private” can’t be allowed; Know Better Government must control what private companies do.

Because Know Better Progressive-Democrats must “protect” us grindingly stupid average Americans from our own foolishness or stupidity. Never mind that no one forces us to invest in hedge funds or private-equity funds, with or without knowing the financial details of those funds.

Such decisions used to be our responsibility. But now Progressive-Democrats insist on arrogating our responsibilities to themselves.

A USPS “Upgrade”

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The USPS is being pressured by President Joe Biden (D) and his EPA to go greenie-er in its vehicle upgrade. So,

The proposed action, which we are evaluating under the National Environmental Policy Act (NEPA), includes an initial order plan for 5,000 electric vehicles, and the flexibility to increase the number of electric vehicles introduced should additional funding become available.

The US Postal Service wants to convert 10% of its 230,000 vehicle fleet to battery-operated “in the coming years,” but says going all electric would cost an additional $3.3 billion beyond its normal budget of $6.3 billion.

What jumped out at me, though, was this comparison between the replacement vehicles for which the USPS has contracted and its present fleet:

In response to a report that the NGDV [Next Generation Delivery Vehicle] only achieves a fuel efficiency of 8.6 mpg in typical use, compared to the Grumman’s 8.2 mpg, the USPS pointed out that the comparison was flawed because it was conducted with the NGDV using its air conditioning system, which the LLV [Long Live Vehicle] does not have. With it turned off, the NGDV achieves 14.7 mpg, according to the USPS.

A 70% increase in mileage with the a/c turned off? That seems to me a poorly designed air conditioning system, even with the windows open for mail delivery every few feet. That just means the compressor is running all the time; it shouldn’t be imposing that big a load on the engine. And: what’s that bump going to do to the battery in the electric NGDV, both its miles between charges and its charge-discharge lifetime?

The Fed and Social Engineering

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President Joe Biden (D) wants our Federal Reserve System to engage in economic social engineering, so he’s nominating as the Fed’s banking supervisor the climate activist Sarah Bloom Raskin. Among her lately remarks concerning credit allocation and climate change was her last-spring op-ed in The New York Times. She led off that piece with this:

Climate change poses the next big threat. Ignoring it, particularly to the benefit of fossil fuel interests, is a risk we can’t afford.

She had this, too, in the same piece:

The Fed is singularly poised to seed strategic investments in future economic stability.

And this:

The decision to bring oil and gas into the Fed’s investment portfolio not only misdirects limited recovery resources but also sends a false price signal to investors about where capital needs to be allocated[.]

Raskin had this in her September 2020 Project Syndicate op-ed, reprinted by Duke Law:

US regulators need to be encouraged to think more imaginatively about how they can engage with local transition efforts. For example, how might financial policies from diverse agencies be stitched together to produce outcomes that enable firms to hit their net-zero targets? How can financial policy be used to help accelerate a transition that redeploys workers for new jobs, or to assist households that are being asked to change their spending habits? And how can regulatory changes relating to disclosure, access to credit, and pricing of risk support a rapid and just green transition?
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In short…[f]inancial regulators must reimagine their own role so that they can play their part in the broader reimagining of the economy.

That’s not the Federal Reserve’s role, though. The Fed’s statutorily required goals are to maximize employment, stabilize prices, and moderate long-term interest rates. There’s nothing in there about climate change, or “guiding” lending to this or that government-favored group of Americans and away from that or this government-disfavored group of Americans, or any other sort of social engineering.

One more thing. Aside from Raskin’s own altered-state understanding of the Fed, a larger problem regards the present administration’s overall attitude. That Biden-Harris actually nominated Raskin says volumes about his own view of law and his own willingness to disregard it in order to increase his administration’s power.

Taxing the Rich

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Washington State is at it.

Washington state multibillionaires would pay a wealth tax under a proposal that got a public hearing before the Senate Ways and Means Committee.
Senate Bill 5426 would impose a 1% tax on intangible financial property such as stocks, and bonds, futures contracts, and publicly traded options. The first $1 billion of assessed wealth would be exempt from the tax, which “equals one percent multiplied by a resident’s taxable worldwide wealth.”

Leave aside questions of the legitimacy of taxing an American citizen’s foreign-held wealth, intangible or otherwise. The bill’s sponsor, State Senator Sam Hunt (D, Olympia) has given the larger game away.

This is a great attempt to bring fairness to our tax structure which is pretty upside down with the lower income paying 17% of their income in taxes and the upper 1% paying 1% or less[.]

That is pretty upside down.

Another solution would be to lower the tax rates on those with the lower income. However, that would involve lowering tax rates rather than increasing them, and lowering tax rates is completely inconceivable to Progressive-Democrats.

Update: Some have interpreted my “lower the tax rates on those with the lower income to mean lowering income tax rates. Washington has no income tax, only sales taxes (State and local), business taxes, and property taxes. Sales and property taxes are highly regressive and hit the lower income folks the hardest, the former directly through taking a far higher per centage of their income and the latter through driving up the cost of housing, whether owning or renting.

Lowering business taxes (eliminating them, I say) would foster job growth, which would benefit the lower- and no-income folks the most.

Government-Funded Pre-K Schooling

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Vanderbilt University has a longitudinal study of the effects of such a program on children’s academic success through the 6th grade.

Researchers at Vanderbilt University have been running a long-term study on Tennessee’s state pre-K program, following 2,990 low-income children. The program was oversubscribed, so researchers followed applicants who ended up in a program versus those who were turned away. This means all the children had parents motivated to sign them up for pre-K, which makes for a statistically appropriate control group.

The researchers found, in sum,

[C]hildren randomly assigned to attend pre-K had lower state achievement test scores in third through sixth grades than control children, with the strongest negative effects in sixth grade.
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A negative effect was also found for disciplinary infractions, attendance, and receipt of special education services, with null effects on retention.

In a spate of academic integrity, the researchers also wrote,

…no distinctive characteristics of the Tennessee program have yet been identified that are a likely explanation for the disappointing findings.

The Wall Street Journal offered one possible explanation:

One theory worth a hearing is that these programs expose children to more rigid academic settings before it is developmentally appropriate.

I offer another possibility, one that is not at odds with the WSJ‘s. It may be that the parents of children who got into the Pre-K program, thinking their children’s future is secured, relaxed their close and constant oversight of their children’s schooling, performance, execution of homework, and so on relative to that of the parents whose children didn’t get in. That parental oversight and supervision also is a Critical Item in children’s academic performance, especially in those first years of school.

Either possibility, especially in combination with the study’s outcome, suggests that, particularly from the Federal level, government funding of grade school programs is at best a waste of taxpayer money.

The study itself can be found behind this paywall.