Tag Archives: political economy

Progressive Idiocy

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The New York City Council is striking again. These wonders are pushing their cutely named Choose 2 Reuse bill, which

aims to improve sustainability in the restaurant business, but would add some friction to a customer experience that is typically defined by its convenience. Consumers would be asked to later return their reusable food containers, knives, forks, and chopsticks either through delivery or logistics partners who come to pick them up or in person via receptacles at participating restaurants. The bill doesn’t require reusable beverage containers.

It’s interesting that the City Council excludes beverage containers. There was a time when beverage containers—soda bottles, for instance—could be returned for a return of a deposit paid when the (sodas) were sold, a practice that enabled more than a few boys and girls to earn a bit of extra money by collecting up the bottles and doing the return. And there never was a problem cleaning the then-glass bottles for reuse, nor was there a liability problem arising from the reuse of inadequately cleaned bottles.

That sort of thing fell into disfavor when tin, and later aluminum, cans proved easier and cheaper to manufacture (and wend their way through the bottling process)—and far from being one-use disposable, they could be recycled through a different chain.

Now NYC is bent on reverting to that greater cost—never minding that one-use food containers for takeout are easily manufactured for breakdown and return to the soil when disposed of in landfills. Or in many jurisdictions, converted to mulch for DIY gardeners. Or recycled for yet other non-food related uses.

Now, in addition to the added costs inflicted on restaurants and consumers alike, the Wonders of the Council also want to expose the city’s restaurants to liability through suits centered on real or imagined food poisoning from allegedly inadequately cleaned-for-reuse containers and utensils. Even stipulating that utensils would no longer be included (presumably by restaurant choice; nothing in the proposed bill suggests this)—requiring consumers to use their own—the containers would need to be made sturdy enough to survive the restaurant’s dishwashers—or to survive the consumers’ dishwashers, should they be offered a discount for doing the cleaning for the restaurant. And which the restaurant would have no guarantee that the consumer had cleaned the containers well enough to meet the government standards imposed on the restaurant.

More Government Overreach

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This time it’s in the Federal government’s Securities and Exchange Commission move to force businesses to disclose their carbon emissions and other climate data. The demand is centered on the claim that inquiring investors want to know this stuff, so Government should force the disclosure.

Indeed, some investors do want to know this stuff, and some businesses think their profit intake will benefit from releasing such information. Other businesses say the proposed diktat mandate would inflict costly, complicated, and useless drags on their bottom lines.

The push, though, along with the push’s supporters and decriers, wholly ignore the key segment in our economy: us ordinary Americans consumers, and investors who are in large part us ordinary Americans.

If we and the investors, both big and small, institutional and retail, among us want this information, we’ll demand it of the companies we want it from, and we’ll do it—and get it—through the market force which we are in our aggregate.

The move by the SEC, though, is typical of beltway politicians of all parties and independents: if it’s a good idea for some or even for many, Government must require it for everyone. This is government overreach.

A Tax Picture

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This is for the benefit of those who demand the Evil Rich “pay their fair share.” The rest of us—us ordinary Americans—already know the facts of the matter.

As noted at the bottom of the graph, the data are from the Congressional Joint Committee on Taxation, which is comprised of nonpartisan tax specialists. WSJ staff did the analysis.

Those Evil Rich, boy, they’re only paying 39% of the total income taxes remitted, nearly two-and-a-half times their proportion of income earned across the nation, while the working poor are paying a whopping 6%, or just under a third of their proportion of income earned.

No wonder no Progressive-Democratic Party politician, or anyone on the Left, is willing to say what “fair share” is.

“Auditors Didn’t Flag”

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Silicon Valley Bank’s third-party auditors did not mention the underlying risk to SVB’s viability in its report, which the group issued two weeks before the bank’s collapse.

When KPMG LLP gave Silicon Valley Bank a clean bill of health just 14 days before the lender collapsed, the Big Four audit firm flagged potential losses on loans as a so-called critical audit matter. But the audit opinion was silent on what actually brought down the bank—its unrealized bond losses and ability to hold them given a reliance on potentially flighty deposits.
“The auditors failed to mention the fire in the basement or the box of dynamite on the first floor, but they did point out the peeling paint on the flower box,” said Erik Gordon, a University of Michigan business professor. “How could they miss the interest-rate risk?”

And this from Martin Baumann, ex-Chief Auditor at the Public Company Accounting Oversight Board and who had a leading role in designing the new measure:

Silicon Valley Bank’s unrealized losses in its bond portfolio appear to “meet every definition of a possible critical audit matter[.]”

A critical audit matter is a tool intended to help investors decode risks and uncertainties buried in financial statements, to make audit opinions actually useful.

Thus, how could the auditors have missed the larger risk? Why did they?

Or did they? Maybe this is a demonstration of the weakness of auditors being paid by the auditees for the audits.

One apparent weakness in the PCAOB’s existing requirements, though, is that banks can hide the risks in their portfolios by (re)characterizing some or all of their bond holdings as “hold to maturity” rather than as marketable and so required to report their (fluctuating) market value. But when the bonds are being held in even partial satisfaction of reserve requirements, maybe those “hold to maturity” bonds still should have their current market value reported to the public. After all, SVB had no intention of selling even its “marketable” long-term bonds. That is, until it began to experience deposit withdrawals at rates it could not fill without selling those long bonds immediately, and so at losses driven by the environment’s rising interest rates.

So—again I ask: why did SVB’s auditors not report that interest rate risk? KPMG may well have a valid reason for its silence on that risk, but it should say what that risk is.

In any event, it would be useful to see the timesheets of those auditors—when I worked as a defense contractor, my timesheets were required to be submitted with 10-minute intervals—so we in the public can know what those auditors were doing instead of their jobs.

Typical Arrogance of the “Experts”

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US District Judge Matthew Kacsmaryck, of the Northern District of Texas, has ruled that the FDA’s approval of the abortion drug mifepristone must be withdrawn and the drug pulled from the market while an existing court case makes its way through, and he made his ruling nation-wide.

The Court does not second-guess FDA’s decision-making lightly. But here, FDA acquiesced on its legitimate safety concerns—in violation of its statutory duty—based on plainly unsound reasoning and studies that did not support its conclusions[.]

No, no, no—leave our precious technocrats alone is the Leftist Lawyer cry. Only Government knows best. How dare anyone challenge Government’s experts. Areta Kupchyk, ex-FDA Associate Chief Counsel:

If the court does not defer to FDA, it would undermine FDA’s authority and set a precedent for second-guessing by judges wholly unqualified to evaluate scientific data[.]

This is the typical arrogance of Government “experts.” No one but these bureaucrats who hold one or another science degree are qualified to reign over the scientific world—and over us citizens.

No. It’s time Chevron Deference-style foolishness was done away with. It’s time our Article III courts acted like the coequal branch of our Federal government that they are instead of meekly bowing and subordinating themselves to junior agencies of a separate coequal branch.

That doing-away may finally be beginning.