Tag Archives: political economy

Another Reason

Posted on by
Reply

…to move our supply chains out of the People’s Republic of China, a reason the rest of the world ought to take seriously, also. The PRC government has been lying about its African swine fever epidemic, after the disease has killed 120 million of the PRC’s hogs. That’s a bit over 1/6 of the PRC’s hogs.

As China has largely brought the coronavirus pandemic under control within its borders, another highly contagious disease—one affecting livestock [African swine fever]—is reappearing and raising questions about the accuracy of the country’s reporting.
…
Since mid-March, China’s Ministry of Agricultural and Rural Affairs has reported a spate of new cases across the country, supporting what some independent veterinary and farming consultants have been saying since late 2019: the disease is still rife.

Maybe the PRC has its Wuhan Virus epidemic under control.  More and more evidence is coming up that indicates the situation there is far worse than that government has been reporting.

Regarding the African swine fever, here’s the USDA on the PRC’s livestock in general, per its April report:

Underreporting is rampant as government agencies at all levels face serious challenges in collecting and reporting outbreak information from swine farms. Some farms are reluctant to report outbreaks for fear of economic losses, while others report being actively discouraged [from disclosing cases of African swine fever].

There are a couple of problems with this. One is that while the African swine fever isn’t a threat to humans, it’s 100% fatal to pigs. What happens if some number—even small—of PRC hogs get shipped to other nations and spread the effects? The world’s hog farms and pork food supply would be put at risk.

The other problem is, given the PRC’s lies about these two viruses, what else are the nation’s government and its Communist Party of China lying about that puts the world at risk, but that we haven’t discovered yet?

It’s…difficult…to do business with a nation whose government lies and coverups are such evident and serious threats to the security of other nations.

It’s impossible to be dependent, through supply chain dependency, on such a nation and maintain one’s own national security at the same time.

An Inconvenient Political-Economic Truth

Posted on by
Reply

Politico-Europe had a piece last week that talked about Germany’s putative responsibility to help the southern European EU nations during the current Wuhan Virus situation.  Buried in the piece was this bit of eurozone political-economic history:

The euro was sold to Southern Europe, which had been less successful than the north for decades, as a path to lasting prosperity. By eliminating exchange rate risk and lowering interest rates, Southern Europe would become more competitive.
But after the initial economic boost that followed the euro’s introduction, the picture for the region darkened. Though countries that had historically high inflation benefited from lower interest rates, the cheaper financing had the unintended consequence of removing the pressure on governments to enact economic reforms.

The bottom line, though, the inconvenient bottom line is that the politicians manning those governments chose not to enact the needed economic reforms. The reduced pressure to do so is not relevant to the simple fact that the reforms were and are needed, and those politicians, of their own volition, chose otherwise.

Yet this is, somehow, Germany’s fault.

Do Germany—and France, and the other wealthier nations of the EU—have any obligation toward these profligates? From a humanitarian perspective, of course, can any aid be delivered directly to the people and their businesses, bypassing their governments entirely.  But even here, with strings attached: it is these same people, after all, who keep electing those fiscally irresponsible politicians.

From a political perspective, no, the wealthier nations have no responsibility.

“State Governments are Broke”

Posted on by
Reply

That’s New York Governor Andrew Cuomo’s (D) claim as he pitched President Donald Trump for a Federal bailout of his State.

“You know the state governments are broke, to use a very blunt term. You know the state governments are now responsible for the reopening and the governors are going to do the reopening, and they have no funds to do it,” New York Governor Andrew Cuomo said….

No, no one “knows” that State governments are broke. They most assuredly are not. Not as long as they have taxing power, which they do.

Not as long as they have absolute control over their own spending, which they do.

Cuomo knows this full well. He’s just ducking away from having to make those hard decisions and ducking away from the fight with New York’s legislature as those politicians duck just as thoroughly from the same decisions.

All the politicians populating those governments need do is have the political will and the integrity to act on those authorities.

Sunset Clauses

Posted on by
Reply

Here’s another example of their utility. To help out the furloughed and fired during the current Wuhan Virus situation, the Federal government enhanced existing unemployment insurance payouts with an extra $600 per week. The plus-up doesn’t expire until the end of July, more than three months hence.

Many businesses, especially the small and mom-and-pops that are at the heart of our employment environment, are starting to re-open as they figure out ways to operate at least partially or as State-level restrictions start to ease.

However.

Employees say they’ll take the unemployment check for as long as they can make more money by not working. One internal Trump Administration analysis estimates that this work disincentive applies to millions of Americans.

That’s not laziness, as the Wall Street Journal‘s editorial correctly emphasizes. That’s workers making economically sound, rational decisions. Especially at the lower end of the economic scale, taking a functional pay cut to go back to work is…suboptimal.

Such a plussing up of unemployment payouts could have been made marginally acceptable—this particular jobless spike came about due to Government fiat rather than business decisions or economic cycles—had the addenda been accompanied with a hard milestone rather than an arbitrary date. A milestone like, oh say, an employer being ready to hire back and offering to do so, or a more blanket State-level easing of restrictions that would allow ranges of businesses to start re-expanding their operations or re-opening altogether—and so hiring or re-hiring.

It’s possible this oversight can be fixed in the next round of Wuhan Virus situation responses, but I’m not holding my breath.

GIGO

Posted on by
Reply

Garbage in, garbage out. That doesn’t only apply to modeling or to the utility of software functions.

Deutsche Welle had an article earlier discussing the potential of the present Wuhan Virus situation and the emphasis on working from home to drive increasing digitization of the work being done.

[M]any firms and a considerable proportion of workflows in administration and the education system are still paper-based, using postal letters and fax machines. However, the coronavirus crisis has been a wake-up call for many of them.
Smaller firms are now hoping to jump on the bandwagon, [Bitkom Head of Digital Business Processes Nils] Britze notes. “By using cloud technology, every company can quickly find a digital solution to processing documents or setting up video conferences.” Direct investment in IT infrastructure complete with servers would have been too costly for many, but cloud-based services have proven a real game changer.

However, and this is key, Britze also pointed out that

just using digital tools to improve workflows isn’t enough. Work processes have to be enhanced across the board to use the full potential of digitization. “If you just digitize an inefficient analog process, you end up with an inefficient digital process[.]”

Even work processes optimized for digitization and a work-from-home environment, though, are insufficient. That home environment must be optimized for the work, too: there is a large reduction in direct oversight, and there are myriad distractions in the home environment that need to be handled, also. Folks aren’t fundamentally lazy, but routinely working from home presents a business work culture change that wants handling that’s as carefully done as the digitization itself.

Digitization, after all, is like most things in the human endeavor: it’s is a tool, not an end, and the utility of any tool is in the efficiency of the use of it, not in its mere existence.