Tag Archives: politics

Tariffs and Reindustrialization

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This seems to be my day for letter-writers. Another writer in The Wall Street Journal‘s Sunday Letters section wrote about the current lack of effectivity of (protectionist) tariffs in stimulating moves toward reindustrialization in our economy.

Through initiatives such as Operation Warp Speed and strategic invocation of the Defense Production Act, the government took risk out of domestic production through substantial direct investment, guaranteed purchase agreements, prioritized allocation of critical materials and equipment, and streamlined regulatory processes.

He then proposed a similar program to spur reindustrialization.

He’s right as far as he went, but it’s too one-sided, lacking as it does any requirement for the targeted industries to do their part. Aside from the addictive nature of protectionist tariffs, it’s far too often the case that the “protected” industry companies merely take advantage of the increased prices of tariffed imports to raise their own prices accordingly, collect the increased revenue, and do nothing to improve their own competitiveness.

What’s also needed, as a part of these tariffs, is a requirement that the “protected” industry companies use the large majority (60%-75%, say, just to have a starting point for discussion) of the increased revenues accruing from the increased sales at their immediately pre-tariff prices to achieve the following:

• increase market share via their largely unchanged price
• increase spending on innovation
• increase spending on capital plant maintenance, improvement, and expansion
• increase spending on line worker wages
• increase spending on line worker hiring

And one more fillip: a hard expiration date of the protectionist tariff, in the range of 5-10 years, that cannot be extended except by Congressionally enacted statute.

That’s the route to actually reindustrializing: doing concrete things to achieve concrete goals.

Why Must They Be Mutually Exclusive?

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A letter-writer in The Wall Street Journal‘s Sunday Letters section objected to an op-ed whose writer touted Federally mandated IVF insurance provided by private economy insurers as a means to elevate our nation’s too low birth rate.

The letter-writer proposed, instead, a tiered cash baby bonus: bigger for married women, smaller for unmarried women.

My question: why must it be one or the other? Why not both?

Follow-on question: why not consider the system of which these are just two components? If the Federal government, or at least the Republicans in the government, are going to work for increasing our birth rate and against the related universal and easily obtained abortion rate—and they should, on both—and on the underlying economic situation of the middle and lower class individuals and families, why not provide women—married or not—in parallel with a range of incentives to have more babies, with financial, educational, and medical support during their pregnancies and in the period surrounding birth, and in the first years (until kindergarten?) of the baby’s life, expanding that to include the baby/toddler/child in the support mechanisms?

If our government and us are going to be serious about birthrates and about right to life, government and we need to get serious about achieving those goals.

Price Fixing

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And this time it’s by the Republican caucus in the House. Among the moves they’re making in the reconciliation bill currently being debated in the various House committees is a badly needed move to reform the cost of college/university education and so improve the value of that education. The goal is to hold colleges accountable for student outcomes and curb the open-ended loan buffet.

The specific plan under consideration, though, is a terrible idea.

The House would reduce the aggregate limit for undergraduate loans to $50,000 from $57,500. The bill would also impose a $100,000 borrowing limit for master’s degree and doctoral programs and $150,000 for professional programs like law degrees. Graduate student loans are currently uncapped.

This is just price-fixing by another name, though, and worse than not addressing the underlying problem, it hides—like any price-fixing scheme does—the true costs and gains of the services being offered.

Better, and more efficient, would be to let free market forces solve the problem. I’ve offered this alternative before; it bears repeating, with a couple of additions.

• statutorily require colleges and universities to publish the average, median, and range of income at the five years employment mark for their graduates in each of the major fields offered
• [added] statutorily require colleges and universities to publish their graduates’ employment percentages at the five year post-graduation mark for each of the major fields’ graduates
• statutorily require student loans to be originated by private lenders or colleges and universities
• statutorily require colleges and universities to guarantee at least 50% of each loan granted their students [added:] by private lenders
• [added] bar any government or government-affiliated entity from guaranteeing any part of any student loan
• statutorily allow current and future student loans to be discharged in “ordinary” bankruptcy proceedings

With private lenders and colleges/universities having skin in this student loan game—and being the only players in the game—loans and their borrowers would be carefully screened for repayment risk. Just as importantly, prospective students and parents could better evaluate which majors to pursue and which schools best teach those majors. A happy side effect of that will be better use of us taxpayers’ money.

A Correct EO

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In early March, President Donald Trump (R) wrote an Executive Order that rescinded the security clearances of the law firm Perkins Coie and its lawyers individually. The EO also barred Perkins Coie from access to a number of Federal buildings and instructed other Executive Branch agencies to exam contracts with Perkins Coie with a view to ending them.

Last week DC District Judge Beryl Howell ruled the EO unconstitutional. Among other things,

Howell wrote that the text of the executive order, and Trump’s statements about it, made clear that he targeted Perkins Coie because it represented clients he doesn’t like, and clients challenging some of his actions.
“That is unconstitutional retaliation and viewpoint discrimination, plain and simple,” wrote the judge, an appointee of former President Barack Obama.

She’s not far wrong in that, and this is a case where Trump’s rhetoric contaminated the legitimacy of his move. Perkins Coie made an argument in its suit, though, that is and should have been so considered wholly irrelevant.

It told the court it was at risk of losing its most lucrative clients, as they frequently work with the federal government, and many are major government contractors. In fact, the firm told the court, it did lose clients.

That confers no obligation on the government to grant or continue security clearances to Perkins Coie or any other enterprise. No business must be allowed to arrange its business model in such a way as to compel our government to grant it a security clearance.

The President of the United States is the final arbiter of security clearances, of what is classified, and of who has declassification authority.

From that, this: a better—and entirely constitutional—Executive Order would require all Departments and agencies in the Executive Branch, including the President and his White House, that have security clearance authorities to rescind all security clearances of personnel who leave their Departments or agencies on the day of their departure—even if those employees are transferring to another Department or agency. The new Department or agency, and any nongovernment entity who employs the departed person, if they want the person to have a security clearance, must do a de novo background investigation before granting a clearance, and the Department, agency, or outside entity must justify the level of clearance requested.

The EO should do this, as well: recast security clearances, extant or newly granted, held by nongovernment enterprises and their employees as for the duration of the particular contract with automatic rescission on the end of the contract. New contracts must have de novo background investigations of all enterprises and individual employees contemplated for work on the contract. If an existing contract is extended for a second time, those security clearances must be explicitly renewed via de novo background investigations.

Security clearances give access to our nation’s most important secrets, and no person and no entity has an intrinsic right to one. No person and no entity has any sort of Constitutional right to a security clearance. Neither does our government have any obligation to grant a security clearance, of any level, to any person or entity. This fundamental concept is one that is too often unconsidered in disputes over clearances.

There’s the Problem

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In an article centered on President Donald Trump (R) centralizing foreign policy in his office, Richard Haass, former president of the Council on Foreign Relations and staffer at State, NSA, and Pentagon, had this to say:

This is the most top-down administration in recent memory. This isn’t a staff-driven administration.

And there it is, in so many words. In the particular case, the President of the United States is, by Constitutional design, our nation’s foreign policy chief. The foreign policy-influencing centers in the Executive Branch—State, NSA, et al.—all work for him. And so do those centers’ staffers, albeit through their Department and agency Secretaries and Directors.

More broadly, this is a career government staffer (before joining the left-leaning think tank) decrying the reduction in control exercised by the deep state/bureaucratic state/staffers. He’s an echo of Fiona Hill’s angry objection that earlier-President Trump wasn’t listening to and obeying her ad hoc committee regarding Ukraine.