Tag Archives: political economy

Lack of Understanding

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This is demonstrated in the lead paragraph of a recent Wall Street Journal article.

Chief executives are taking vocal stands on issues like gun control, climate change, and immigration, but global affairs bring a different complexity and calculation, especially for companies doing business in China*.

After all,

In the aftermath of Houston Rockets general manager Daryl Morey’s now-deleted tweet, the National Basketball Association has found the consequences of even implicitly criticizing Chinese policy can be swift and sizable.

Not to pick on the NBA in particular (although its behavior has been especially public, cowardly, and so reprehensible), Apple and Alphabet, among lots of others, also have sacrificed principle for company “security” in the PRC, while favoring yuan, also, over principle.

No, taking principled positions don’t get complexified by the environment in which they’re taken. The fundamental tenets of ethics, of morality, are universal and constant; the only adjustments are in the manner of their implementation.  There’s nothing at all complex about that. Company personnel are either principled, ethical, moral, or they are not. These are not matters of situation or convenience.

And this:

Executives have to thread a needle when a company’s commercial and financial interests clash with the CEO’s personal values and the cultural values of an enterprise and its home country, said Jeffrey Sonnenfeld, a leadership expert at the Yale School of Management. “One of the rarely discussed downsides of globalization is you get caught in those crosscurrents,” he said.

Those “cross-currents” are irrelevant. Either the CEO or the enterprise have principles worth standing by and sacrificing for, or the CEO or the enterprise have no principles. It’s that simple.

Another misunderstanding is this one by Paul Argenti, Dartmouth College’s Tuck School of Business Professor of Corporate Communication:

The job of a CEO is not to save the world or make the world safe for democracy[.]

No, but it is a core part of his job to be, at all times and in all circumstances, ethical, moral, and not hypocritical.  An example of business’ glaring hypocrisy: the Business Roundtable. That group is carefully and with deliberation silent on the NBA’s, et al., meek acquiescence to the PRC’s tyrants.

One last misunderstanding, this one by Rick Wartzman, Drucker Institute’s Director of the KH Moon Center for a Functioning Society [paraphrased by WSJ]:

The fracas sparked by ephemeral statements can distract from more substantive questions of social responsibility[.]

And

“What concerns me is whether statements, while important, become a substitute for the more meaningful work around what it means to be a responsible company and take care of all your stakeholders[.]”

Again, no. The only way such things can distract is if the statement maker chooses to be distracted. Staying focused on the business of the company in such a circumstance may be hard to do, but being hard means it’s eminently possible.

 

*The WSJ, like most of the NLMSM, refers to the People’s Republic of China as though it were the one and only. They ignore the nation just across a narrow straight from the mainland, the Republic of China that sits on the island of Taiwan.

Lies of a Progressive-Democrat

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Progressive-Democratic Party Presidential candidate and Senator Elizabeth Warren (D, MA) now is claiming that when she became pregnant at a teaching job early in her career, she was let go from that teaching job.

I loved it, and I would probably still be doing it today but back in the day, before unions, the principal, by the time we got to the end of the first year, I was visibly pregnant. And the principal did what principals did in those days: they wished you luck, showed you the door, and hired someone else for the job. And there went my dream.

We’ve seen that her lie has been contradicted by her own earlier words: “As I became pregnant, I realized this just wasn’t working for me.”

…my first year post-graduation I worked in a public school system with the children with disabilities. I did that for a year, and then that summer I didn’t have the education courses, so I was on an “emergency certificate,” it was called. I went back to graduate school and took a couple of courses in education and said, “I don’t think this is going to work out for me.” I was pregnant with my first baby, so I had a baby and stayed home for a couple of years….

Now we learn that her lie also is contradicted by the public record of that school district.

The Riverdale Board of Education approved a second-year teaching contract [as a substitute teacher] for a young Elizabeth Warren, documents show, contradicting the Democratic presidential candidate’s repeated claims that she was asked not to return to teaching after a single year because she was “visibly pregnant.”

The minutes of that Riverdale school district meeting can be seen here.

And this bit. A couple months after that contract offer, the Board had this:

“The resignation of Mrs. Elizabeth Warren, speech correctionist effective June 30, 1971 was accepted with regret,” the June 16, 1971, minutes say.

Those minutes can be reviewed here (scroll to near the bottom).

This is the level of integrity we can expect from this Progressive-Democrat, were she to get elected President. Indeed, given Warren’s constant flow of lies, from her claim of being part Native American, through this sequence, her lie about being the first nursing mother to take a bar exam in the state of New Jersey, I have to wonder whether she can discriminate reality from fantasy at all.

 

h/t Dana Loesch via Eliana Johnson

An Elizabeth Warren Demand

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Progressive-Democratic Party Presidential candidate and Senator Elizabeth Warren (D, MA) has begun issuing her orders to our private business executives.  And she’s not even the Progressive-Democratic Party nominee for the office, much less the President [bold face emphasis added].

I write in regard to the Business Roundtable’s (BRT) new Statement on the Purpose of a Corporation issued on August 19, 2019. … I write for information about the tangible actions you intend to take to implement the principles, including whether, to make good on your commitment, you will implement the steps laid out in the Accountable Capitalism Act I plan to reintroduce in the coming weeks.

And

If you, and the other 181 corporate executives who signed the BRT’s new Statement on the Purpose of a Corporation, plan to live up to the promises you made, I expect that you will endorse and wholeheartedly support the reforms laid out in the Accountable Capitalism Act to meet the principles you endorse.

And so on.

A key part (among several key parts) of Warren’s Accountable Capitalism Act is her requirement that all businesses above a minimum size must get Federal—not State—charters to continue to operate.

Do what I tell you to do with the corporations you run in my Government’s name, if you know what’s good for you.

This is the core aspect of socialism: Government ownership of an economy’s means of production—the businesses operating in that economy—or Government direction of what nominally privately owned businesses will be permitted to do.

Warren’s letter to those executives can be read here.

WTO, Tariffs, and the EU

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The WTO ruled in favor of the US regarding a 15-yr-old dispute over French subsidies of Airbus that directly harmed The Boeing Company, to the tune of $7.5 billion.  The ruling allows the US to impose those $7.5 billion as tariffs, and the Office of the US Trade Representative says that we’ll apply

a 10% tariff on aircraft imported from Europe and apply a 25% import tax on other agricultural and industrial items on October 18….

France says they’ll respond with retaliatory tariffs if we go through with this.  French Finance Minister Bruno Le Maire:

If the American administration rejects the hand that has been held out by France and the European Union, we are preparing ourselves to react with sanctions[.]

EU Trade Commissioner Cecilia Malmstrom agrees with Le Maire:

If the US decides to impose WTO authorized countermeasures, it will be pushing the EU into a situation where we will have no other option than do the same[.]

Couple things about that.  One is that the US has already proposed both no-tariff-at-all and no-tariffs-on-autos trade régimes, but the EU has refused to discuss either, despite then-European Commission President Jean-Claude Juncker’s promise to take the matters up.

The other thing is that, under WTO rules, it’s illegal to apply retaliatory tariffs in response to tariffs applied pursuant to a WTO judgment.  The French and EU threats regarding the WTO-permitted tariffs on the Airbus affair clearly demonstrate EU (and French) bad faith by themselves. Coupled, though, with the Eu’s refusal to discuss the no-tariff offers already on the table, it’s clear that the EU has no intention at all in dealing honestly with us on trade.

Our own effort at good-faith negotiation is just as clear:

The WTO had approved up to 100% tariffs, but the US decided to limit the tax.

Raise the Price

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…of a product, and with that, lower demand for it.  This is the sort of thing taught in high school introductory economics courses.  One way to raise the price is to raise taxes related to it, and to reduce tax deductions related to it.

The Manhattan real estate market [a generally hgh-end market] stumbled in the third quarter of 2019, new reports show, as prices plunged and fewer buyers were willing to purchase higher-priced properties in the wake of two recent tax increases.
The median sales price for properties fell 17% from the same quarter last year…. The average sales price dropped 12%….
Condo sales fell 8%….

Maybe this had something to do with it:

In July, New York City increased its mansion tax—a progressive tax that applies to home sales of more than $1 million—to a maximum of 3.9%, up from a flat-rate of 1%. The tax rates vary from 1.25% for $2 million sales, to 3.9% for sales of $25 million and higher. The city also increased a one-time charge on properties worth more than $2 million—known as the transfer tax.

And maybe the $10,000 cap on state and local tax (SALT) imposed by the 2017 tax reform bill is having an impact.