Tag Archives: regulation

Private Enterprises as Government Jobs Welfare Programs

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That’s the position of the Pennsylvania Progressive-Democratic Party’s Representative G Roni Green. She’s proposing, with an absolutely straight face, a State law that would require businesses with 500 or more employees to cut their employees’ 5-day, 40-hour work week to 4-day, 32-hour work weeks—with no change in pay. That’s a government-mandated 25% pay raise.

Jobs welfare doesn’t get much better than that.

Green’s rationalization centers on two premises. One is that society looks and operates differently than it once did in 1938 (when the government-mandated 40-hour work week was enacted). That’s true enough. Society has grown more complex, more technologically capable, and consumers’ needs (consumers being, after all, at the core of society) have grown quite a bit.

All of that, though, requires continued and increasing employee productivity to enable us Americans to continue, and continue to improve, our standard of living. That growing productivity isn’t possible with the proposed 25% reduction in hours of productivity Green is proposing.

That last brings us to Green’s second rationalization.

Technological advancement alone have [sic] significantly increased the productivity of workers allowing more work to be accomplished in less time.

That’s also true. Indeed, technological advancements have advanced to the point that entire worker jobs have been replaced. Technology does a lot of things that employees currently do at least in part. One result of Green’s move, were it to become law, likely would be a further reduction in employee hours, this time on business’ initiative: to substantially less than 32 hours, converting full-time employees to part-time, with commensurate reduction in pay and in most cases reduction or outright elimination of benefits. The eliminated hours of work would be done by robots…technology.

Green further claims (as cited by Fox Business) research [that] has shown that companies have been able to adopt a shorter workweek without compromising productivity. What isn’t looked at in such “research” is the degree to which such a shorter work week caps productivity growth so that there is no longer any improvement, merely maintenance. So much for keeping up with “society’s” increasing complexity and consumer needs.

Technological advancements—spurred by this government interference—will accelerate this trend in reducing human employment and reducing human income.

Why Johnny Can’t Read

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An increasing number of States are looking at passing laws blocking third-graders who can’t read (well enough) from being passed on to fourth grade.

Tennessee, Michigan, and North Carolina are among at least 16 states that have tried in recent years to use reading tests and laws requiring students to repeat third grade to improve literacy. Louisiana, Arkansas, Alabama, and Nevada have all passed similar laws that will go into effect in the coming years.

Those laws, too, typically include extra tutoring, summer school, and…teacher training (what a concept that last is).

Johnny’s troubles began long before the Wuhan Virus Situation, but the school lockouts lockdowns during that period exacerbated the problem, and they were made manifest when parents, as a result of being locked out of their jobs at the same time, were able to see what actually was happening with their children’s “schooling.” Johnny’s situation was made even more obvious he went back to in-person school.

Know Betters and Coddlers, of course, object. Katherine Bike, a Knox County, TN, school board member, is typical:

I understand they might want to be tackling learning loss, but it’s truly the wrong way to do it. I think the whole thing is unfair.

Her idea of fair: she successfully “appealed” to keep her son from repeating third grade. Because promoting unqualified children to the next grade is what’s fair.

The Know Betters and Coddlers’ fear of what happens when Johnny is held back:

a defeated 18-year-old high-school junior dropping out against [Johnny’s mother’s] wishes.

No. The 18-year-old high-school junior will be defeated by his inability to read, not by his being a year or two older than his classmates.

This is the modern reason why Johhny can’t read. Know Betters and Coddlers don’t care that “can’t read” means can’t read.

Right, But for a Different Reason

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The Wall Street Journal‘s editors’ headline and subheadline is on a reasonable track:

Punishing Banks for Regulatory Failure
Regulators want to saddle midsize banks with new capital rules.

The editors the proceed to disparage the regulators’ move, and they’re correct about that. They’re mistaken in their lede, though, and that leads them to the erroneous aspect of their disparagement:

Silicon Valley Bank failed owing to rising interest rates and lapses by regulators, not a shortage of capital.

It’s true that a shortage of capital did not cause SVB’s failure, except as the proximate outcome of the real cause of the failure, an outcome that made the failure inevitable.

SVB did run short of capital value, and that meant it couldn’t survive the rapid outflow of cash through depositor withdrawals. But rising interest rates were only the means of that capital shortfall and bank failure, not the cause. Nor were lapses by regulators—and there were some serious ones, including their lack of oversight diligence, which should have led to better enforcement of existing rules—involved in the bank’s failure.

The bank’s managers failed in their own fiscal duties, overbalancing as they did the nature of their capital holdings in the face of those rising interest rates: those managers chose not to balance the interest rate risk related to their deposits and the rates they were paying against the interest rate risk related to their capital holdings and the way rising rates were devaluing their holdings.

Those managers could see as well as any of us, and as well as their depositors, what rising rates were doing to their bank’s capital, and those managers could see as well as any of us, and as well as their depositors, the increasing risk to the bank of the decreasing interest rate spread between what the bank paid depositors and what it earned on its loans, loans the bank was increasingly unable to make in the face of those rising interest rates. And that exacerbated the impact of the bank’s decreasing capital holdings, which those managers could see as well as any of us, and as well as their depositors.

Nor did lack of overt regulator intervention have much of anything to do with SVB’s failure. Bank managers, any enterprise managers, are paid to act on their own initiative, not to wait until they’re told what to do and then, subsequently, told to go ahead and do it.

SVB’s managers were no exception to that.

This was an SVB management failure, and Regulators have no place for writing new capital rules. It’s sufficient for the market place to apply the appropriate sanctions, even if that deprives government bureaucrats of an opportunity to feel good about themselves by Doing Something.

The Quiet Part…

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…out loud, to coin a hackneyed, but cogent, phrase.

On the matter of Federal government industrial farm policy, the Biden administration has made itself crystalline. This is the backdrop:

In January 1994, the North American Free Trade Agreement went into effect, followed by other trade pacts, which significantly increased commercial opportunities for American farmers. Those arrangements have borne great fruit: US agriculture exports stood at $196 billion in 2022, up from $62.8 billion in 1997.

President Joe Biden’s (D) National Security Advisor, Jake Sullivan, doesn’t like that, but in a recent speech, Sullivan went even more broad than just NAFTA, to openly disparage the general policy environment surrounding the development of that treaty. Sullivan lamented that this era of policy was one that

championed tax cutting and deregulation, privatization over public action, and trade liberalization as an end in itself.

Because leaving more money in the hands of us ordinary citizens by taking less of it as taxes, by reducing our cost of doing business by getting regulations out of our way, is inherently bad, says this maven of the Progressive-Democratic Party. Even more: public action must take precedence over private action—because, apparently, Government Knows Better than us ignorant ordinary citizens. And trade liberalization, which further reduces our costs, is a bad end in itself.

This demand that Government must control what our private enterprises produce is a well-understood and textbook…ideology…regarding the importance of government control over our lives. And it’s a central plank of the Progressive-Democratic Party platform.

Occupying Floodwaters

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It seems a Wisconsin man owns some property near Ixonia, and that property has been flooded, gets flooded fairly frequently, by the Rock River against which the man’s property lies. He’s gotten fed up with the airboats that go running across his land, taking advantage of its temporarily flooded condition, and he’s filed suit in Wisconsin’s Jefferson County Circuit Court to put an end to the practice.

At the heart of the issue is the so-called public trust doctrine, which are provisions in the Wisconsin Constitution that guarantee public access to navigable waters generally defined as any waterway with a bank upon which someone can float a canoe or other small watercraft on a regular basis.
State Department of Natural Resources policies state that the doctrine grants access rights to any part of a navigable waterway as long as the person remains in the water.

At the heart of the man’s suit is this:

public access [the suit holds] ends at the ordinary high water mark, a point on the bank or shoreline where the water regularly stops, and that the DNR’s position has left law enforcement confused.
“DNR’s authority to implement and enforce the public trust doctrine is limited to navigable lakes, streams, sloughs, bayous and marsh outlets,” the lawsuit says. “Flooded yards do not fit into these categories and are not subject to DNR’s public trust jurisdiction.”

The man has the right of it, and a key phrase is that “regular basis” bit. There’s nothing regular at all about floods—that’s why they’re called floods and not rivers, or bayous, or swamps, or ponds or lakes. Another key phrase is that waterway with a bank bit. Floods don’t have banks; they’re floods because the water has overflowed the waterway’s banks.

Beyond that, there are basic private property rights. A man owns his private property, whether it’s in its normal state or flooded by a temporary overflow. There are no “navigable waters” in a flood sitting on private property, however easily someone else’s boat might float on the flood.

Wisconsin’s constitution is fairly explicit on the matter of private property. Art I, Sect 13:

Private property for public use. SECTION 13. The property of no person shall be taken for public use without just compensation therefor.

There is no clause or collection of clauses that authorizes the DNR’s navigable water policy. The DNR’s…policy…looks an awful lot like a taking without just compensation. Just a “shut up and deal with it” misinterpretation of the State’s constitution.

The cynicism of the DNR’s position regarding floods and navigability is demonstrated by this definition of navigable waterway in the DNR’s own policy regarding waterway jurisdiction:

A navigable waterway is defined through case law as any waterway that has a defined bed and bank, and upon which it is possible to float a canoe or small watercraft on a recurring basis.

This directly contradicts the DNR’s Public Trust Doctrine definition of navigable waterway on which it’s hanging its hat in defense in the law suit:

The Public Trust Doctrine applies to all navigable waters, which are defined as any waterway on which it is possible to float a canoe or small watercraft at some time during the year.

That internal-to-DNR contradiction by itself ought to be enough for summary judgment in the man’s favor and the striking of DNR’s navigable water policies. With that internal contradiction, DNR has demonstrated that it has no concept of navigable waters.