Category Archives: Economics

Miscellaneous economy stuff

This is Backwards

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In a Wall Street Journal article on the difficulty of estimating ridership on roads and highways to be built in the future and so the need for them, and the poor allocations of costs and Federal dollars that result from the inaccuracies, there was this statement.

If lawmakers enact the $550 billion bipartisan infrastructure bill now before the House, state and local officials will have to decide which projects to spend money on.

This is backwards. State and local officials should have to decide first what infrastructure projects they want to complete, their cost, their priority, and have contracts already let contingent on receiving Federal dollars before Congress contemplates an infrastructure bill that would send taxpayer money to any of those States.

Those are critical first steps in getting to shovel-ready jobs to which to commit funds.

What Should the Fed Do?

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Nick Timiraos, in his Wall Street Journal piece expressed some concern about the tightrope the Federal Reserve bankers must walk (his phrasing) regarding its bond purchase taper and what others, especially market players, might say about the Fed’s dot plot—a graph that’s generated from individual board members’ views of raising and lowering interest rates and to what level.

Getting that message [regarding bond purchasing] to stick could be tricky when the central bank’s two-day meeting concludes Wednesday if new interest-rate projections—the so-called dot plot—show officials are considering rate increases at the same time….

The only way to make any message stick is for the Fed to do what it says it will do in its “messaging,” regardless of any outside dumpster-diving interpretations of their tea leaf scraps. Seers are going to claim to see regardless of what the Fed does. If the Fed says it’s going to taper its bond purchase program, that’s what it should do. Full stop.

Rather than tapering, though—my humble opinion—it’s long past time for the Fed to reduce, to below zero, its bond buying, selling off the bonds it already holds to enormous excess. Put an end to half-measure tapering.

Separately, the WSJ asked

What action, if any, should the Fed take on interest rates?

The Fed should set their benchmark interest rates at levels historically consistent with their target inflation rate of 2%, more or less, and then sit down and be quiet. Stop trying to micromanage market rates.

Neither case is complicated, except that Government bureaucrats overcomplicate them with overthinking.

Ratification Bonuses

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Mondelez International has settled its dispute with its workers as the company and the union representing the workers, the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, signed a new four-year deal.

One importance of this, as far as I’m concerned, is that the supply of Oreo cookies is secured for that period. But what do I know; I’m a sucker for chocolate- and sugar-based junk food.

The deal, however, consists in large part, of

ratification bonuses, hourly wage increases, and a higher company match for 401(k) contributions….

The real importance of the deal is the inclusion of those ratification bonuses. Mondelez isn’t alone in agreeing to these artificial demands, made by unions for no serious reason, but only as an exercise of union strike-based extortion power.

Businesses need to stop being so meek; they need to stop bending over and accepting “ratification bonuses.” The only thing these things do is serve as an incentive for striking again so the unions can collect yet more vig for ending that one. And the next one. And….

The Failure of the Department of Veterans Affairs

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It’s gotten even worse, astoundingly.

The Department of Veterans Affairs wants to hear from its customers, so to speak, but check your skin color before raising your hand. The VA is holding dozens of “listening sessions” for patients at its medical facilities. Eight cities are being virtually canvassed, with hearings for “racial/ethnic minorities,” “LGBTQ+ veterans,” and so forth.

For instance:

At a session on race last week in Augusta, Ga., a woman who described herself as white spoke in favor of inclusive language and safe spaces. “I appreciate your being upfront about the fact that you’re not a person of color yourself,” the VA’s facilitator chided, “because this listening session is for those from racial and ethnic minorities, to give them that kind of safe space.”

The woman was a member of a VA- and Government-disfavored group of Americans, and so she was told to shut up and sit down.

Now the VA has gone openly racist and sexist, and that’s not only damaging to our nation, it’s despicably harming those who defend and have defended our nation.

The VA is long past reparability; it must be eliminated entirely and all personnel returned to the private sector, not merely reallocated to other government sectors.

Veteranos Administratio delende est.

Let it Fail

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Progressive-Democrats are moving to attach a debt ceiling increase, or “temporary” waiver to the debt ceiling, to a continuing resolution that would fund the Federal government for a few more months. House Speaker Nancy Pelosi (D) and Senate Democratic Majority Leader Chuck Schumer (D):

The legislation to avoid a government shutdown will also include a suspension of the debt limit through December 2022 to once again meet our obligations and protect the full faith and credit of the United States[.]

This proposal is both unnecessary and disingenuous. It’s unnecessary because as the Schumer Shutdown and the Obama Shutdowns both showed, the Federal government isn’t all that necessary in its present size. Indeed, some agencies and departments, forced to furlough employees due to the length of those closures, discovered that as many as 90% of their employees were unneeded, at least in those short- to mid-term periods.

The proposal is disingenuous because the debt ceiling needn’t be raised at all were Federal spending reduced to fit within existing revenue collections. The Progressive-Democrats, though, are hell-bent on passing their splendiferously wasteful multi-trillion-dollar reconciliation bill.

If the Progressive-Democrats insist on shutting down our government in favor of their out-of-control spending, let them. If their continuing resolution contains a debt ceiling raise or waiver, let the bill fail. Let a “clean” continuing resolution fail, too.

There’s an election coming up.

Update: Late last night, the House passed their version of a Continuing Resolution and debt ceiling raise bill along party lines: 220-211. Shamefully, the House Progressive-Democrat managers stripped out $1 billion that would have gone to Israel to replenish its Iron Dome system, depleted during the last terrorist rocket attacks from Gaza. Then Party voted down a resolution that would have restored the billion dollars to the bill.

That election….