Tag Archives: political economy

Some Basic Arithmetic

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Washington State has spent $143 million to get homeless folks out of camps from state property near roads and housed.

About 1,300 people were swept from roadside camps as of July 31, with roughly 430 of those rejecting help getting into temporary or permanent shelter. That means it took $165,000 per person to clear the camps and house 870 people.
The department says 126 people have successfully exited the program into permanent housing….

Washington has 25,200 homeless folks (that makes Washington’s homeless population the fourth largest in the nation, for those of you keeping track at home). Those exited from the program represent less than 10% of those 1,300 swept. The State’s Progressive-Democratic Party Governor, Jay Inslee, says he needs more money:

You can’t do this with zero dollars. We’ll need the legislature in January to step up to increase funding….

Now the third grade arithmetic. The State blew through $143 million to deal with 1,300 homeless. That means Inslee wants $2.772 billion to handle all of the State’s homeless.

Inslee is willing to spend Other People’s Money, those $2.772 billion, in order to house 16,900 of those 25,200 homeless, or, still $165,000 per homeless person accepting the State’s housing offer.

Inslee is willing to spend Other People’s Money, those $2.772 billion, in order to permanently house 2,440 homeless, or $1.135 million per permanently housed.

Of course, my arithmetic ignores economies of scale, and duplication of fixed costs, but you get the idea. The only solution to this problem, or any other, that Progressive-Democratic Party politicians can conceive is to throw ever more Other People’s Money at it.

Greedy UAW

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The United Automobile Workers Union, per its president Shawn Fain, is threatening to strike the three automakers GM, Ford, and Stellantis (nee Chrysler) simultaneously after midnight Thursday (as I write Thursday midday). The union is demanding

  • 36% pay raises over the next four years
  • raises to correspond to the cost of living
  • an end to tiered-wages for factory jobs
  • a 32-hour work week with 40 hours of pay
  • pension increases

Some of those would seem legitimate, or at least open to discussion, and typical union wants that most employers could find some sort of agreement on. The pay raise demand is egregious, and the demand to be paid for hours not worked is simply greedy, glorified featherbedding.

Furthermore, the strike is a direct attack on the companies’ ability to function at all: by the design and purpose of the strike, it closes the businesses and prevents it from earning any revenue. From that, it closely approaches extortion. In the present case, the UAW plans to maximize the damage they intend to inflict with what Fain is calling a “Stand Up Strike:”

“…keep the companies guessing as to where and when the next local walkout would be,” Fain said.

The car companies need to stand tall and refuse to negotiate as long as the union holds this metaphorical gun to their heads.

Aside from that, in a world where unions weren’t given special considerations—they’re even exempt from antitrust law, even though they have a monopoly on workforces in union shops and in unionized industries like the auto manufacturing of Michigan—such overt attacks would invalidate any contract to which management is coerced into agreeing.

Update: The UAW has, indeed, struck all three automakers, one major plant each. The union has shut down GM’s Wentzville, MO, plant, a 4.25 million sq-ft facility that was producing mid-size trucks and full-size vans under the GMC and Chevrolet brands; Stellantis’ Toledo, OH, 3.64 million sq-ft facility that was producing Jeep Wranglers and Jeep Gladiators; and Ford’s Wayne, MI, 5 million sq-ft facility that was producing Rangers and Broncos.

But, But—Bidenomics is Working

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That’s the claim of President Joe Biden (D) as he insists our eyes are lying, and we should believe him, instead. These two lede paragraphs say otherwise:

Surging inflation gobbled up household income gains last year, making 2022 the third straight year in which Americans saw their living standards eroded by rising prices and pandemic disruptions.
Americans’ inflation-adjusted median household income fell to $74,580 in 2022, declining 2.3% from the 2021 estimate of $76,330, the Census Bureau said Tuesday. The amount has dropped 4.7% since its peak in 2019.

It’s true enough that the Biden inflation runup has ebbed, but it’s still nearly double what it was in the fall before he took office. It’s also true that, over the last couple of months, wage increases have been greater than current inflation.

We still have, though, that overall shrunken income, and it’ll be a long time before that recovers. Recall the income loss during the Obama-Biden years post-Panic of 2008, a loss which lasted for several years, until roughly 2015. Keep in mind, too, that even with the lower inflation today than the Biden peak, the prices us ordinary Americans pay remain badly elevated. What we pay for critical items like food and energy—items typically excised from inflation measures because they’re so “volatile”—still is 16% higher than when Biden took office.

There’s this tidbit, too:

Total [Federal tax] receipts are down 10%, year over year, owing to slower growth….

But ’twas a famous victory, by Biden and his cronies. Over truth and the facts, but not over reality and the straits our economy truly is in.

The Judge Got It Wrong

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Matthew Whitaker, former Acting US Attorney General, disagrees with a Puerto Rico bankruptcy judge’s ruling regarding the Puerto Rico Electric Power Authority’s bankruptcy and the subsequent handling of the utility’s creditors. He wrote in his Fox Business op-ed that

[US District Judge Laura Taylor] Swain…concluded that special revenue bondholders do not hold a secured claim on current and future net revenues. As The Wall Street Journal explained in March, “A federal judge curbed Puerto Rico bondholders’ rights to the electric revenue generated by its public power utility.”
Furthermore, the ruling stated that the original legal obligation of the borrowers is not the face value of the debt, but rather what the borrower (in this case “PREPA”) can feasibly repay.

This is wrong. Whitaker is right. The borrower committed to repay what it borrowed, not what it might feel like repaying be able to repay in some speculative future.

This judicial error, though, has much broader implications than just the damage done PREPA’s creditors. Her ruling sets the ugly precedent that no borrower is liable for what he borrows, only for what he might be able to repay. That drastically altered risk terrain can only mean that lenders will be more reluctant to lend, particularly to lower income (and so with higher debt risk) folks and businesses, and that those lenders that do lend will do so only at markedly higher interest to account for the risk the amount they lend will not be recoverable in any guise, especially in the public—municipal—arena.

We’re the Government, and We’re Here to…Help

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Not some government personnel saying they’re from the government; they are the government. The People’s Republic of China plans to form a new government entity whose purpose, ostensibly, is to help out the PRC’s economic private sector.

[The PRC’s] National Development and Reform Commission, the country’s top economic planner, said Monday that it would set up a bureau to coordinate policies across different government bodies and help development of the private economy, the source of most of the new jobs and economic dynamism in the country.

This says it all, though:

The new bureau will be tasked with monitoring the country’s private economy and establishing channels for regular communication with private enterprises….

Those channels will become channels of control. “This is what you ought to do to increase performance. Be too bad if you don’t do these things.”

The NDRC’s claim is this:

Unlike the recently formed national data bureau, which also falls under the NDRC’s umbrella, the new department announced Monday won’t hold a vice-ministerial rank, suggesting it is unlikely to be a policy heavyweight in a vast government bureaucracy that has long favored the country’s powerful state-owned enterprises.

That won’t last. The new department will increasingly gain power as its controls strengthen. That’s not particularly unique to the PRC; all governments are populated by bureaucrats whose primary personal imperative is to hold onto/increase their power as part of their justification for their jobs. It’s just a stronger imperative for the bureaucrats of the PRC government, and especially for Emperor President Xi Jinping.

Thus, this is the government of the People’s Republic of China extending its control over the nation’s economy through a back window. I don’t write “the nation’s private economy” because that term in the PRC is a cynical euphemism for government-controlled businesses that are nominally privately owned. Mainland Chinese companies, along with those on Hong Kong and Macau, are too beholden to the PRC’s intelligence community’s “information” demands and to the PRC’s newly enacted “report on your friends’ and neighbors’ suspicious espionage activities” law.