Tag Archives: political economy

Dangerous Naivete

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Secretary of State Antony Blinken has it. During a 60 Minutes interview, the man actually said that our nation does not have the luxury of not dealing with China.

That’s a blatantly raised straw man. No one is arguing that we should have no dealings with the People’s Republic of China. The debates are centered on how we should deal with it. Leave aside the fact that a total boycott of trade with the PRC is dealing with it, rather than not dealing with it, a means that no one is touting.

Instead, the debates involve moving our supply chain away from the threat the PRC poses, as illustrated by that nation’s attempt to cut off supplies of rare earth metals to other nations. They involve jawboning businesses to stop doing business with PRC suppliers operating with Uyghur slave labor. They involve how to pressure the PRC to desist from its Uyghur genocide in progress. They involve how to respond to the PRC’s occupation of the South China Sea and the islands within it that are owned by other nations (even if ownership is often disputed among those other nations.

Blinken said this, too, in that interview.

I want to be very clear about something. Our purpose is not to contain China, to hold it back, to keep it down. It is to uphold this rules-based order that China is posing a challenge to.

This, especially, is an example of Blinken’s naivete. Our purpose most assuredly must include containing the PRC, holding it back. At least until it’s ready to stop being our enemy, to stop its genocide, to stop its slavery, to leave the South China Sea and respect the ownership of sovereign nations’ territory.

In fine, until the PRC is ready to join the community of civilized nations.

The full interview can be seen here.

Fair Share and Government’s Revenue

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President Joe Biden’s (D) Council of Economic Advisers Chairwoman Cecilia Rouse had some very instructive things to say on Fox News Sunday last weekend.

One was this:

The idea is to make sure that corporations are paying their fair share, to button up some of the loopholes, which have meant more corporations were actually putting more money offshore—off of US soil—and having a global minimum tax so that we’re working with the rest of our trading partners, so that we’re working with the rest of the world so that corporations are paying their fair share worldwide[.]

Couple things on this. One is that business of “paying their fair share.” Once again, a Progressive-Democrat declines to say what that “fair share” is, leaving us to conclude that “fair share” to Party is “more” until Government is getting all of it.

Sadly, too, Fox News Sunday‘s host Chris Wallace chose not to ask her what she considered to be that fair share, choosing instead to let that slide.

Another instructive remark from the FNS segment was this one by Rouse.

Yes, internationally we don’t want to be disadvantaged, so he’s also working with other countries so that we have a minimum tax internationally so there’s not a race to the bottom.

This is another example of the Progressive-Democratic Party politicians pushing us to be more like the European Union. Every nation must charge high taxes with no economic competition among the nations to attract real innovation, real business, real economic activity which can only redound to the citizens of each nation.

Rouse, like the administrative state running the EU from Brussels, insists that a tax rate race to the bottom, a race to leave ever more money in the hands of the folks working to earn that money, is somehow a bad thing.

And that flows from a third instructive Rouse statement.

What we’ve seen over the past several decades is that the wealthiest Americans, the big corporations are getting wealthier, and they’re contributing less in terms of federal revenue[.]

“[I]n terms of federal revenue.” Because it’s not Americans’ money, it’s not (big) corporations’ money, it’s Government’s money.  Never mind that Party (nor Republicans nor Conservatives) have for far too long, justified Government’s claimed need for the money.

Other Implications

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Automakers are starting to adjust their level of dependence on Just in Time manufacturing, a technique whereby manufacturers vastly reduce inventory holding costs by having the relevant inputs—car parts, for instance—arrive at the factory just before they’re needed. In some of the more extreme cases, that includes arriving on the moving assembly line just before it’s needed for addition to the growing product.

The hyperefficient auto supply chain symbolized by the words “just in time” is undergoing its biggest transformation in more than half a century, accelerated by the troubles car makers have suffered during the pandemic. After sudden swings in demand, freak weather, and a series of accidents, they are reassessing their basic assumption that they could always get the parts they needed when they needed them.
“The just-in-time model is designed for supply chain efficiencies and economies of scale,” said Ashwani Gupta, Nissan Motor Co’s chief operating officer. “The repercussions of an unprecedented crisis like Covid highlight the fragility of our supply-chain model.”

That’s true, and it’s also good that that fragility finally is being taken seriously.

There are two other factors in JIT supply chain fragility beside those largely innocent ones. One is the fact that an enormous amount of trade goods, including raw materials and components for assembly into larger components or finished products, passes through the South China Sea. A large majority of Japan’s inputs and trillions of dollars of value for the US pass through the that Sea. Those shipping lanes are at increasing risk from an increasingly aggressive and acquisitive People’s Republic of China.

The other source is supply chain disruption by union strikes. Strikes generally and supply disruption by strikes are ways in which unions extort concessions out of manufacturers.

Inventory on hand, rather than on trucks or rail cars, helps manufacturers get through those deliberate disruptions.

C Boyden Gray vs NASDAQ

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I know who should be winning. I know how the matter should be resolved.

Recall that NASDAQ wants to require companies, as a condition of being listed on the NASDAQ exchange, to have quotas of particular groups of Americans on those companies’ boards of directors:

“at least one director who self-identifies as female,” and “at least one director who self-identifies as Black or African American, Hispanic or Latinx, Asian, Native American or Alaska Native, two or more races or ethnicities, or as LGBTQ+.”

And

Noncompliant firms must publicly “explain”—in writing—why they don’t meet Nasdaq’s quotas.

Gray’s and his colleague, Jonathan Berry’s, summary of their Comment filing before the SEC is spot on.

Nasdaq’s discriminate-or-explain rule is unlawful, unconstitutional, and unsupported by the evidence. Quota systems like this unjustifiably classify people by arbitrary categories of sex and race in violation of equal-protection principles, and the “alternative” of explaining why a firm won’t discriminate compels speech in violation of the First Amendment.

Yet, this is the damage the social justice warriors that infest our government at all levels would inflict.

“How to Save the Post Office, Maybe”

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That’s the headline of a Monday Wall Street Journal editorial.

In response to which I ask, why do we need to?

After all, using the Editors’ own numbers,

the USPS says in 2006 there were 5.6 daily pieces of mail per delivery point. Last year: three. By 2030 the estimate is 1.7.

Why? It’s a shrinking need; the Internet is supplanting mail delivery. In-person communication is done by telephone, Skype, Zoom, and a plethora of other applications. Written correspondence is handled, in among other ways, by a plethora of email facilities.

The Postmaster General, and the Editors, think it would be a good idea to extend the delivery time for long distance first class mail from three days to as many as five. The horror.

They also want to boost the price of using the mail system—the stamps we use.

Here’s a thought about an alternative, though, and one that has a chance of saving both our taxpayer dollars and reducing our consumer costs.

Our Constitution mandates only that the Federal government establish Post Offices and Post Roads. There’s no requirement that the Federal government—or any other level of governance—run the post office and post roads. The latter especially are everywhere, from the Interstate highway system and Federal highways to State highways, County roads, Farm to Market roads, etc, etc, etc.

Let private enterprise run the post offices, too, and handle all mail delivery.

Everything other than first class mail and junk mail and advertising fliers (but I repeat myself) already is handled competitively and efficiently (because competition) by private enterprises.

There’s no reason those private enterprises, or others that would appear in the competitive market, can’t handle first class delivery and junk mail and advertisements, also. And in the latter case, digital junk and ads already are ubiquitous. The paper needn’t be. Think of the trees.