Fixing Itself

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A question arises: can France fix itself so it can fix its economy so it can get its debt under control and on a downward path to a sensible level?

That answer depends on whether it can fix its national method for settling questions and the disputes that give rise to those questions.

A free democracy has one primary method for settling national questions and disputes: debate, argument, and then voting for one or another of the politicians the people want to represent them and to lead the government, or voting against another or one of those politicians.

France is unique in that it has a second method of settling national questions and disputes. This method has been in prominent use since the months and days leading into the Revolution of 1793: rioting in the streets, destroying businesses, attacking police personnel. Over the course of the Fifth Republic, extant since the 1950s, the technique of rioting and destruction has become elevated to the same level as voting. That elevation has resulted from the French government’s inability to quell the rioting and to restore order—an inability that results, not from a true lack of capacity, but from utter cowardice on the part of the men and women in charge of the government, especially the President, Prime Minister, and members of the National Assembly and the Senate.

So far, the rioters have succeeded in intimidating the government personnel into backing down and giving them what they demand, however bad for the nation as a whole over any timeframe beyond tomorrow. See the Yellow Vests riots of 2020 and the current “student” and “teacher” riots today.

Macron’s government men and women, including Macon himself, were intimidated into significant watering down of economic reforms that Yellow Vesters disapproved, and his government today is on the verge of giving prima donna pupils and (union) teachers whatever they want.

The answer to the question, then, at least for what France is confronting for its future, is…No.

A Frivolous Suit

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The Supreme Court heard oral arguments on a case, Anderson v Intel, centered on what investment vehicles are suitable for inclusion in 401(k) accounts, defined contribution retirement accounts that are entirely directed by the account holder.

The plaintiff, a former Intel employee, accused the company of violating its fiduciary duty by including private equity and hedge funds in its defined-contribution retirement plan, and alleged these investments performed worse than standard equity funds would have.
Tuesday’s Supreme Court debate hinged on whether a plaintiff needs to show underperformance versus an appropriate benchmark for a suit to survive a motion to dismiss.

The debate wholly missed the point. The question is not—or should not have been—whether this or that investment vehicle was underperforming by some threshold amount or in comparison with this or that benchmark and so should not be on offer in a 401(k). The central question is whether 401(k) account holders, grown adult human beings fully capable of independent and clear thought, are actually too stupid to make their own investment decisions. There is, after all, no requirement that an account holder must invest in a vehicle just because it’s available in the account.

Anderson and his fellow plaintiffs plainly think that every account holder must be as stupid as they apparently think themselves to be, and so they’ve engaged their foolish suit. Alternatively, they don’t want to be the only ones not capable and so they’re busily deprecating as many others’ intelligence as they can.

This case should have been squashed utterly at the district level. It has no business having gotten this far, and the Supreme Court, as it takes this frivolously cynical case seriously, needs to put it into the garbage landfill where it belongs.

The case is insulting as the plaintiffs insist that account holders are, in fact, too grindingly stupid to decide for themselves what investment vehicles included in a 401(k) account are suitable for a person to invest in.

It’s a Start

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If it passes, a draft bipartisan Federal permit reform bill that’s circulating in the Senate would be a good start. As is the usual case in politics, it wants improvement, but first pass this first step, then return forthwith with improvements, and pass those.

What the bill has, if the Senate as a whole can pass it and then the House do so, too:

  • strict deadlines for agencies to complete environmental reviews—two years for bigger projects and one for smaller ones—and lets developers sue if their reviews are delayed
  • requiring plaintiffs to challenge permits within 150 days of their publication—they now have six years—and to have suffered direct harm or face imminent injury
  • 150-day statute of limitations would apply to challenging so-called biological opinions
  • if a judge faults an environmental review, agencies could correct the purported lapse rather than restart the permitting process
  • repair and replacements of critical infrastructure, including transportation, water, grid and energy projects, would be exempt from NEPA reviews
  • generally prohibit federal agencies from rescinding or suspending permits and allow permit holders to sue for damages if they do

I suggest the following improvements for enactment in the next legislative session:

  • one year to complete large project environmental review, six months for smaller projects. If the deadline passes without Agency action, the permit is deemed issued with no caveats or conditions and cannot be challenged in court. Agencies also must have the burden of proving they didn’t just rubber stamp a rejection in order to meet the deadline. Agencies have these newfangled devices called computers along with software with which to facilitate reviews. There’s no need to mosey along with manually done procedures
  • require plaintiffs to challenge within 60 days. They also have access to modern computers and software with which to review the permit and produce their challenges
  • 60-day statute of limits to challenge all opinions, not just biological ones. See the above about computers and software
  • generally prohibit federal agencies from rescinding or suspending permits, period

I know; it’s a pipedream to get the initial step passed, much less the improvements. But I dream.

Rahm Emanuel’s Latest Installment

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Over the last several weeks, Progressive-Democratic Party Presidential candidate hopeful Rahm Emanuel has been publishing sections of his campaign platform in The Wall Street Journal. His latest installment is here. Emanuel talks a good game, but as Long Time Reader might expect, I have thoughts on it.

The carried-interest rule suggests that those in the business of buying and selling companies need the incentive of a special tax break. They don’t.

This is a conveniently plausible assertion, but it’s wholly unsubstantiated. Let Emanuel supply the facts and logic underlying his claim.

To be effective, reforms will need to work hand in hand with an enforceable international floor.

Absolutely not. Such a move gives foreign governments too much influence over our domestic economic policies. The only legitimate “international floor” needs no enforcement mechanism; the floor is however low individual nations let their domestic tax policies go and stay competitive. Progressive-Democrats spend ‘way too much time and energy trying to limit competition.

[R]aise the capital-gains rate closer to the rate that prevailed during the late 1980s, when it was the same as the tax on ordinary income. … You can’t claim that narrowing the gap between passive income and earned income would undermine the incentive to invest when we saw robust growth in exactly those conditions.

Yes, I can. Emanuel first needs to prove–or at least provide evidence–that the growth under those conditions would not have been even more robust had that gap not been narrowed. Showing a counterfactual is hard, but Emanuel isn’t even trying.

[E]liminate the stepped-up basis that allows them to pass fortunes from one generation to the next free from capital-gains taxes. This policy has nothing to do with driving economic growth and serves only to preserve inherited wealth.

 Contra Emanuel, there’s nothing wrong with a family preserving its wealth. Aside from that, it’s not for Government, or for Progressive-Democrats who want to run Government, to dictate to the rest of us the proper way to handle our wealth.

It’s instructive, too, that Emanuel is not proposing even working toward a single low (in the range, I suggest, of 10-15%) tax on all income regardless of source (viz., those capital gains), with no deductions, credits, subsidies, loopholes, or other froo-froo.

In that environment, private-equity fund managers, firefighters, police officers, and teachers–and Warren Buffet and his (ex-?) secretary–all would be paying the same rates, with the rich still having their bigger bills.

Bombers and RAF Fairfield

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Our B-1s and B-52s have been redeployed Stateside (cynics might term the transfer a retrograde movement, but they’d be overstating the case) from RAF Fairford after the recent intercepted terrorist attack attempt.

My own not very humble take on that is this. Fairford has no bunkers for protecting aircraft based there; the aircraft are just parked out in the open for anyone with a long gun to take potshots at should the notion strike. The UK government’s apparent disdain for restraining terrorist wannabes—the terrorists were out on bail within hours of their arrests—emphasizes that exposure. Our bombers had no business being there for any reason other than a maintenance problem that prevented an individual bomber from reaching a serious air base.

Diego Garcia, on the other hand, is the same distance from Tehran as is Fairford. It has the same lack of bunkers, but it’s much harder for terrorists to approach.

Deployment to Diego Garcia has an additional benefit: getting there, and back at the end of a deployment, enables a number of aerial refueling squares to be filled.