Monthly Archives: December 2017

“major distortive impact on international trade”

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That’s the claim of European nations–Germany, France, Italy, Spain, and the UK—as they worry about the drop in corporate tax rates that the House and Senate bills propose.

Well, of course.  They also don’t like the highly competitive tax rates applied by Ireland and Luxembourg and routinely excoriate those nations for having the temerity of competing via tax treatment for business.  While the nations bleat about double taxation and how European businesses operating in the US would be at a tax disadvantage compared to US companies operating in the US, here’s the nub of the thing:

Even without those provisions, the reform would leave US businesses facing lower domestic-tax rates than some of their European peers, putting governments under pressure to reciprocate.

The horror.  And those nations—and the EU generally—still have not justified either their high tax rates or their high spending rates that underlie those tax rates.  The nations also have exposed their hypocrisy:

[T]he proposed “base erosion and anti-abuse tax provision” contained in the Senate bill could harm international banking and insurance businesses because it would treat cross-border financial transactions between a company and a subsidiary as nondeductible, subjecting it to a 10% tax[.]

Never mind that the EU already is attacking the international banking industry (and the insurance industry won’t be far behind) by demanding a tax on all financial transactions (currently masqueraded as a tax on investment transactions, but what else does an international bank do?), which itself can only depress international banking.  But hey, it’s a tax, so it’s all good.  Or so insist the Know Betters of EU Big Government.

The UK’s concern is especially interesting both as that nation drifts away from Thatcherism, even in its allegedly Conservative coalition and as the UK stands to make out like bandits in international trade following Brexit and the loss of EU fetters on its economy (always assuming the timid May government doesn’t surrender the farm in the face of EU intransigence).

Individual Mandate and Risk Pools

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Louise Radnofsky and Stephanie Armour had a piece in The Wall Street Journal that looked at the small and shrinking impact of removing the Individual Mandate (or more accurately, removing the penalty Supreme Court-created tax imposed for not satisfying the IM) on the health coverage providing industry.  The piece is worth the read, but there was one remark quoted at the end that wants a particular look.

“Making the risk pool stable is a vital part” of keeping individual insurance premiums in line with the overall cost to cover a person insured through a larger group or employer, said Andy Slavitt, a top health official in the Obama administration.

You bet. However, in order to stabilize a risk pool, it’s necessary to understand risk pools. A healthy young man does not have the same risks as an elderly man or woman, and so he does not belong in either of their risk pools, either of them in his, and neither of those two in each other’s. A healthy woman of child-bearing age does not share the same risks as a post-menopausal woman, and neither share the same risks as a man of any age. None of those three groups belong in the same risk pool as any of the others.

Health-related risk pools, to be effective and accurate at estimating future health coverage costs and so arriving at reasonable fees for accepting the transfer of the risks involved, need to be reasonably homogeneous.  Belonging to the species homo sapiens is not sufficiently homogeneous.

An Infrastructure Program

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In the coming year, the Trump administration intends to push for an infrastructure improvement program for its next major legislative effort.  It’s certainly true that we need much improvement in our roads, bridges, and transportation networks in all mediums, for both economic and national security reasons (bonus points to those who can identify President Dwight Eisenhower’s motivation for pushing the Interstate Highway System like he did).

It’s also true that such a program would be broadly popular among American citizens.

It’s also true that the proposal coming onto offer, rather than being another Federal boondoggle, would only commit $200 billion as seed money, with the States and locals putting up the bulk of the funding and work.

That’s all well and good, but it’s insufficient: the program would remain vulnerable to inflated costs.  To complete the effort and make the overall program more efficient, Congress and President Donald Trump, in parallel with the infrastructure effort, need to get rid of the Federal requirement that contractors pay union prevailing wages instead of competitive wages, and the administration also needs to encourage the States to get rid of their own, similar, requirement.

Safe Spaces and Timidity

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Antonia Okofor is an advocate for empowering women, and she argues that the 2nd Amendment is a valuable tool in the empowerment.

She was scheduled to speak at two Liberal (note: not Liberal Arts—they’ve long ago lost that breadth) colleges, Hampshire College and Mount Holyoke.

Hampshire College canceled Okofor’s engagement on short notice—two hours’ notice—claiming that her speech was “too controversial.”  Then the place thought better of its excuse and claimed the trivial technicality of a student application not being complete as the premise for canceling.  This is nonsense: if that had been the reason, school management would have said so in the first place.  On the other hand, the lack of dotted i’s and crossed t’s would have been just as indefensible as an excuse.  This is fear, instead, fear of a better argument.

Mount Holyoke “allowed” Okofor’s speech to proceed, but here the pupils displayed their own timidity.  Their “angst” was centered on the horror of “the idea that women’s rights and safety is being linked with their right to bear arms.”  Empower women, sure, but only in terms of the power of others to protect them.  The Holyoke pupils’ solution was to set up a separate “safe space” where their own Precious Ones could go to hide from such uncomfortable subjects.

We feel that creating a deliberately separate space for conversation rather than holding a direct act of protest will be a more productive action for us without fueling the messaging of the Right.

Because actual participation would require determination and positive action.  Because actual participation would require the effort of rational thought and debate instead of the comfort of inchoate feelings and ducking away.

This is the pseudo-education that our children are getting at Liberal not-Arts places like these two.

The Decision

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After President Donald Trump announced that the US would officially recognize Jerusalem as the Israeli capital—a long-standing fact away from which US administrations had been ducking away for over 20 years—global (or at least European and Middle Eastern) expressions of angst have been loud.

Out come the pop psychology analyses.

Martin Indyk, former US Special Envoy for Israeli-Palestinian negotiations, former US Ambassador to Israel, and current Executive Vice President of the Brookings Institution:

It was an appeal to his evangelical Christian base, pure and simple[.]

Of course it was.

No, wait.  Steven Spiegel, UCLA’s Center for Middle East Development Director [paraphrased by Deutsche Welle]:

Trump’s inclination to shake things up….

That must be it.  Yeah, that’s the ticket.

It couldn’t possibly be simply because it was a right thing to do, especially after decades of failure to achieve peace while using Jerusalem as a bargaining chip.  Nor could it matter that the Palestinians aren’t interested in peace with Israel, and they’ll object—violently—to anything an American administration might do.

Mm, mm.

Feelz, especially feelz of European nations and those of the Middle East, must take precedence, must be obeyed.  Oh, the ego-driven horror of not being listened to on this.