California Congresswoman Rosa DeLauro, the Progressive-Democratic Party member who chairs the House Appropriations Committee, claims she’s open to a tax cut deal.
Our ask is simple: if we can provide tax cuts for America’s corporations, we can certainly provide a tax cut for America’s kids[.]
I agree, and it is a simple ask. Provide the tax cut for America’s kids by reducing the personal income tax rates their parents have to pay.
Sadly, DeLauro isn’t at all serious.
Federal Reserve Chairman Jerome Powell had this to say about handling the burgeoning inflation extant in today’s American economy:
Slowing demand growth should allow supply to catch up with demand and restore the balance that will yield stable prices over time.
It’s impressive that a government official as steeped in economics as Powell is has such a deep misunderstanding of the situation.
It’s not a matter of slowing demand growth, it’s a matter of slowing government demand growth. The private economy, especially when it’s not competing with government for goods and services—and for the inputs to those goods and services—will easily and efficiently take care of itself, with changing supply and demand comprising self-correcting stabilizers on our economy.
Even if it might be politically difficult and short-term expensive.
Recall that EU member Lithuania expressed support for the Republic of China and in naked retaliation, the People’s Republic of China imposed a nearly complete trade embargo on Lithuania and blocked import of any other EU member’s products that contained Lithuania-originated parts.
Now, a year later, the EU is haling the PRC into the WTO in a suit over that embargo. Be still, my heart.
There’s a better and more effective and permanent solution to this sort of behavior from the PRC.
A year later, Lithuania has learned that it can get along without trade with the PRC, and by that example, so has the EU (and so have the US and non-PRC Asia, come to that).
The solution includes these straightforward steps.
Sadly, the parties involved make such moves politically difficult with their own fear of PRC retaliations. And certainly, through the middle-term, it would be economically expensive to locate and develop alternative markets and to move supply chain steps—from dirt in the ground to component parts to finished products—completely out of the PRC. However, once those transfers are completed, we’d all be better off politically and economically from no longer having our economies dependent on the good offices of an aggressive and acquisitive enemy nation.
The PRC’s behavior toward Lithuania and its attempt to extort Japan through withholding shipments of rare earths to that nation are just two examples of that benefit.
There’s an oil tanker traffic jam at the Turkish Straits junction with the Black Sea. That jam is being caused by tanker insurers’ refusal to honor a Turkish demand that the tankers produce letters from their insurers assuring Turkey that the tankers’ Protection and Indemnity Insurance policies remain in effect following the G-7’s, EU’s, et al., imposition of a price cap on Russian oil that bars insurers from covering oil tankers carrying Russian oil for sale above the cap. The International Group of P&I Clubs provides 90%, by tonnage, of the policies covering the world’s oil tanker fleet.
That Club’s problem with that demand for proof of effectivity of its policies post-cap is this:
The insurers said they couldn’t agree to the Turkish request because it could lead them to violate sanctions….
Isn’t that rationale for the Club’s reluctance interesting. What sanctions do Club insurers think they might violate if their policies comply with the requirements of the cap? It’s certainly possible that Russian oil shippers and/or traders could lie to the insurers about the prices of their oil, but that just puts a premium on the insurers exercising due diligence before they issue their policies. And on refusing to insure further if the Russian shippers/traders are discovered after the fact to have lied.
An example is in the housing market, provided by this bit in a Wall Street Journal article centered on housing costs as a major component of our current economic inflation. The article suggests, among other things, that housing cost inflation may be abating.
If shelter inflation does drag overall inflation closer to 2%, that doesn’t mean the inflation problem is over. Economists assume increases in rents and home prices will remain subdued, given the slowing economy and high mortgage rates.
Say that the shelter inflation is easing and that it does, indeed, drag overall inflation down. Inflation is a measure of the rate of price increases, it is not a measure of prices themselves. If shelter prices stop rising so fast, the cost of shelter—rent, house purchase (and associated interest rates on those mortgage), rent/housing utilities—and of fuel, food, and on and on all will remain at their current levels; they most assuredly will not fall back.
But those prices must be paid out of a household’s income, and that income—wages and salaries—has increased only at half to three-quarters the rate of inflation. That means that in real, practical, terms, a household has less money with which to pay those costs: a larger per centage of monthly household income will be absorbed by those monthly rent/mortgage payments and those monthly household utility, fuel, food, etc bills than was the case before this inflation explosion.
That’s the failure of the Biden administration’s and Congress’ fiscal policy of throwing trillions of dollars at our economy with no means for it to absorb that money though increased production and productivity. That failure is exacerbated by the Powell Federal Reserve’s monetary policy failure in artificially suppressing interest rates for so long, and in printing dollars like the presses would run out of ink tomorrow through its bottomless purchases of Treasury debt instruments.