Category Archives: Economics

Miscellaneous economy stuff

Government Control of the Means of Production

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And it begins with Government control of the means of financing the means of production (among other things to be financed).

The acting head of the US’s top banking regulator called for banks to be screened for climate risk as part of their periodic stress tests and said the agency’s own regulatory approach was focused on maintaining the safety and soundness of the financial system.
“Banks face all sorts of risks everyday—credit risk, market risk, liquidity risk,” said Michael Hsu, acting comptroller of the currency. “What’s emerging now is that climate change is going to be impacting a number of those risks in different ways, and we need banks to prepare for that.”

This is nonsense. The risk that banks must be able to manage, in this venue, is the risk involved in Government reaction to the “climate change,” whether global warming is real or not.

Hsu’s attempt has nothing to do with the safety and soundness of our nation’s financial system; it has everything to do with an attempt to increase Government control of our nation’s financial system.

He Said It Out Loud

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While using the subject of reparations and the claimed need for them, as his tool, Congressman Jamaal Bowman (D, NY) said the truth out loud.

When you analyze the landscape of the country, and when you see the leaders of our corporations, the CEOs, the majority of the presidents of this country, and when you look at who in this nation has wealth and power and influence and it doesn’t represent you, that is a trauma in and of itself[.]

This has nothing to do with reparations, whether or not such a thing is warranted based on events of more than 160 years—six and seven and more generations—ago. This, Bowman made crystalline, is all about jealousy of success and all about capping those successful, taking what they’ve earned away from them and giving it to others for no reason but those others aren’t as rich.

This call for redistribution also calls those who aren’t jealous of the wealthy’s success liars for their insistence that they aren’t jealous, that they aspire to become wealthy, also.

This call for redistribution also denies those who aren’t wealthy their opportunity to achieve their own wealth—they’ll only be capped in their turn.

This call for redistribution only concerns the Progressive-Democrats’ drive to “fundamentally change America,” to turn our nation into a socialist State.

One other thing: listen to Bowman’s (who’s black, which matters only in this context) phrasing.

intergenerational trauma that our people have experienced…. …form a commission to study the impact of these traumas on our people.

Our people. Not “Americans.” Not “the American people.” Bowman doesn’t even consider 10s of millions of Americans actually to be Americans. He’s segregating them out from America. That’s the Progressive-Democrats’ racist identity politics in action.

“It’s Paid For”

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That’s the Biden-Harris reconciliation bill that the House passed a version of Friday morning that’s “paid for.” And, no, that’s not Joe Biden’s quote—he said the bill would cost zero, which of course contradicts the headline quote, there being nothing for which to pay.

It’s Treasury Secretary Janet Yellen who said that when the CBO report on the bill was published before the House vote. Here’s her claim as cited by yahoo!news:

[T]he Built Back Better (BBB) Act is “fully paid for, and in fact will reduce our nation’s debt over time….”

What the CBO said, in summary:

The CBO determined the spending bill would add $367 billion to the federal deficit over 10 years, not including the IRS plan’s impact. Separately, the nonpartisan agency determined increased IRS tax enforcement would generate about $127 billion in new revenue, far below the $400 billion estimate touted by the Treasury Department and the White House.

Not only is the Biden-Harris administration disregarding out of touch with what us average Americans need or want, critical segments of this administration are out of touch with reality.

Fannie, Freddie, and the Housing Bubble

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The Federal National Mortgage Association, Fannie Mae, and the Federal Home Loan Mortgage Corporation, Freddie Mac, are about to start backstopping million-dollar mortgage loans. The rationale rationalization for this is that the jump is a

reflection of the rapid appreciation in home prices nationally over the past year.
The increase may make it easier and cheaper for some borrowers to buy a home….

But such a move only creates a vicious circle of rising prices into an already growing bubble.

But, but—Steve Walsh, President of Scout Mortgage in Scottsdale, AZ, says,

Housing prices are expensive. I don’t believe these people are looking for a castle, just a three-bedroom house with a backyard[.]

Well, NSS. How does Walsh think those prices for what used to be an ordinary home got to be so high?

There’s this bit on that:

By law, the loan limits are updated annually using a formula that factors in average housing-price increases nationwide.

Nothing like building in guaranteed inflation.

One way to slow the growth of this housing bubble would be for the Federal government to stop guaranteeing such high prices and price growth through its mechanism of guaranteeing or otherwise backing such enormous loans and loan growth.

Granted, that would be hard for the Feds to achieve, since the folks who can afford such enormous prices are the largest donors to Government’s politicians. However, “hard” means “possible.”

Build Back Better is Good

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Jason Furman, ex-Chairman of ex-President Barack Obama’s (D) White House Council of Economic Advisers and currently a Harvard Professor of something styled “Practice,” is all about the Biden-Harris reconciliation collection of policies known as Build Back Better.

He even wrote this in all seriousness in his piece in Tuesday’s Wall Street Journal:

Build Back Better would have a minuscule impact on inflation over the medium and long term.

Even were that true, though, in the short term where most of us live, especially the lower middle class and poor among us who live especially short-term—paycheck to paycheck—we’re facing not just inflation, which is a rate, but actual steady-state higher prices; higher prices which will last into Furman’s medium and long terms, and beyond.

Meanwhile, wages won’t rise fast enough to reduce those higher prices to the status quo ante‘s buying power any time soon, leaving our lower middle class and poor worse off in Furman’s medium and longer term, and beyond.

That wage rise, further, will be held back by Biden-Harris’ and Progressive-Democrats’ penchant for regulation, which will hinder the rise in productivity that’s necessary to facilitate wages’ rise.

Furman knows this full well; he’s one of the Smart Ones of the Left.