Category Archives: Economics

Miscellaneous economy stuff

Federal Aid to States

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Dead equine pounding time.

Brian Blase, ex- of President Donald Trump’s National Economic Council, had a thought on this. While generally skeptical of expanding Federal aid to the States qua States during the present Wuhan Virus situation, he did suggest guidelines within which Congress should act in the event it does decide to provide any Federal dollars to the States.

If it must incur additional debt to help states, Congress should abide by four principles. usw.

No, there’s only one principle by which Congress should abide here.

The States don’t need help; it’s the many (even most in the present Wuhan Virus situation) citizens of, and businesses in, those States who need help. Any Federal dollars should go directly to those citizens and businesses, bypassing the States’ governments entirely.

The only State government involvement that might be useful here would be to make available to the Federal government the State unemployment insurance data bases and the identification of those small businesses applying for loans under the Feds’ various Wuhan Virus situation relief programs.

One bonus principle: once the current situation is reasonably under control, the Feds’ copies of those data should be certifiably and verifiably destroyed.

Federal Money for Local Communities?

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That’s what Congressman Tim Ryan (D, OH) wants—and not just for States; he wants Federal dollars for local communities within the States.

I talk to my mayors every day, township trustees, they’re in a world of pain here. There’s no money coming in. There’s gonna be huge layoffs at the local level.
I think that [McConnell’s plan is] a strategy to let these states go bankrupt so that they can renegotiate the pensions and…renegotiate the contracts for the police and fire and get the wages down[.]

This is ignorant on a number of levels. On one level, Ryan obviously slept through his junior high school civics class. In our federal democracy structure, those mayors, township trustees, et al., lead the governments of communities of the State in which they’re resident, not communities under the jurisdiction of the Federal government. John Jay wanted the States to be nothing more than political bodies established for the purpose of enforcing Federal diktats, but fortunately, he lost that debate at our Constitutional Convention all those years ago.

It’s the State governments that are responsible for the communities within them.  Those mayors and trustees should be looking to their State governments for fiscal help, and it’s solely on those State governments to provide it, or to say “No, clean up your spending.”

On another level, Ryan slept deeply through those civics classes. States cannot go bankrupt, not as long as they have taxing authority. They have no need of Federal dollars.  Beyond that, the States that are in fiscal trouble need first to get their budgets in order, to cut their spending to fit within their revenues—to, among other things, fix their irresponsibly profligate public pension programs rather than demand money from the citizens of all the other States—which is what Federal monies are—to pay for their own foolishness.

On yet another level, there’s Ryan’s threat of huge layoffs at the local level. That would simply expose the government bloat that exists as much at the local level as it does at the State and Federal level. Most of those folks would be better off working in the private economy and so would those communities. The police and firemen about whom Ryan shed his crocodile tears would be better off, too: the payroll funds allocated to that bloated work force could be reallocated to the police and fire departments—and at no extra cost to the rest of the citizens of those local communities.

Control of the Internet

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ICANN (Internet Corporation for Assigned Names and Numbers) is the American manager of Internet domains and Domain Name Service under contract to the Internet Assigned Numbers Authority, the globally agreed agency responsible for the global Internet. It had been about to sell the Internet domain .org to a private enterprise.

The .org registry is a database of more than ten million websites managed since 2003 by the nonprofit Internet Society. The group decided .org could be better served by a company that could invest returns back into the service.

The sale would have been for $1.1 billion, which ICANN could have put to good use, too.

No more.

California Attorney General Xavier Becerra instructed ICANN just two and a half weeks ago that it “must” refuse the sale. ICANN’s acceptance of Bacerra’s diktat was prompt.

As the WSJ put it,

Some readers may remember when Senator Ted Cruz [R, TX] in 2016 warned that ICANN would come under the influence of authoritarian countries once it became independent of the US government.

With its abject surrender, ICANN has placed itself under the influence of [the] authoritarian California Attorney General. The authority consciously ceded to this far left Attorney General sends an ugly message to other companies headquartered, or otherwise operating, in California. Look for further bullying of those companies whose business imperatives clash with Bacerra’s whims. Such businesses might want to think again about their locations.

Biden is Tough on the PRC

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Progressive-Democratic Party Presidential candidate Joe Biden says so. And he’s actually going to run on that thesis.

However.

Leaving aside Hunter’s profiteering on Daddy’s coattails in the People’s Republic of China—that’s just the scummy topping on the gruel—Biden’s track record in dealing with the PRC as Senator and as Vice President is one of failure after failure to get, even to try to get, balanced trade deals and even-handed treatment of American companies wanting to do business inside the PRC.

It was, for instance, during the time frames about which Biden brags that the PRC successfully began demanding US companies to take on PRC company partners as a prerequisite to doing business there, to “share” company and American technologies and company proprietary materials and intellectual properties with those partners, and to allow PRC government backdoor access to US companies’ critical software.

All of this was done without Biden objecting, which he could have done, forcefully, whether or not he could have brought those administrations along with him.

Biden chose to be silent on all of these. Every single one of them.

A Post-Wuhan Virus Situation Supply Chain Environment

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The South China Morning Post, a Hong Kong-based news outlet, has a five-part series in progress regarding outcomes potentially stemming from the current situation. My comments here concern remarks from the SCMP‘s third part.

Consensus is growing in Beijing that the coronavirus pandemic is set to make the world more hostile towards China, undermining the accommodating international environment that underpinned the country’s spectacular rise from a closed communist backwater into a global economic powerhouse.

With considerable justification, given the PRC’s steady drumbeat of coverup, lies, and subsequent shipment of dangerously shoddy masks and Wuhan Virus testing kits.

Aside from that, the PRC’s “spectacular rise” more accurately has been from a closed communist backwater into a closed communist global economic powerhouse.

There’s this, too:

Beijing’s pledge that China will remain investor-friendly and open its market further to foreign businesses.

This pledge is another broken commitment. The PRC has never been investor friendly.

The PRC government continues to require foreign businesses to take domestic companies as partners, for all that the domestics’ “participation” is no longer required to be a controlling interest. Such partnerships remain required, and the foreign company remains required to share critical technologies and intellectual properties with those partners. Given that PRC law requires all domestic businesses to cooperate with the government’s intelligence collecting agencies, that means those foreign companies still will be…sharing…their technologies and intellectual properties with the PRC government.

In the end, the necessary realignment of the world’s value chains needs to be an alteration of those chains to remove the PRC from any participation in any step that leaves other nations dependent on PRC production for their own national or economic (which is national) security. It may, or may not, be useful to include, to an extent, PRC production or communications facilities in those chains. However, with the lack of reliability and quality of output that the folks manning the nation’s government have chosen to ship in their response to the global crisis Beijing has unleashed, such an inclusion must necessarily be sufficiently constrained that a PRC disruption cannot threaten the security or weal of other nations.

Keep in mind, too, that PRC has long history of choosing to export dangerously bad products: powdered milk adulterated with melamine, baby food preparations with…impurities, poisoned pet food, sheets of plywood made with formaldehyde that outgasses into homes to poison the occupants.