Category Archives: Economics

Miscellaneous economy stuff

Second Thoughts?

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The New York City city council has decided to hold a series of hearings on the just concluded Amazon HQ2 deal cut with the city.  The council’s beef is the secretive nature of the negotiations between amazon.com and the folks purporting to represent the city.

Deputy Mayor Alicia Glen, Economic Development Corp President James Patchett, and Amazon executives have been invited to the hearings, which will take place during the next few months, City Council Speaker Corey Johnson’s office said Thursday.

There’s nothing wrong with the negotiations themselves being done behind closed doors; that’s the only place “frank and open” discussions can occur.

However.

Now that the negotiations are concluded, and before the city council has to vote on accepting or rejecting the deal—especially over what the negotiated deal wants to commit the city to—it’s time for the city council and its members’ constituents to hear the full details of the arrangement.

The council’s hearings should be open to the public and moved to a larger venue if needs be.  If the constituents don’t like what they hear, the deal should be voted down.  Or maybe the deal should be put to a referendum.

If amazon.com walks away from that, that would demonstrate the uselessness of the deal to the city’s residents.

Veterans Administration Fails Again

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Recall the VA’s failure regarding paying our veterans all of the funds they’re due under the GI Bill; those student veterans are being shorted the money they’re owed.  That shortchanging will continue next year due to a “software glitch” that the VA isn’t fixing any time soon.

Now we get the VA’s Undersecretary of Benefits, Paul Lawrence, saying that the agency has no plans to retroactively pay shortchanged GI Bill recipients or to make next year’s VA victims whole.  He didn’t even have the integrity to admit this to the House Committee on Veterans’ Affairs subcommittee before which he was testifying—under oath, mind you, as is typical for witnesses before Congressional hearings—until he’d been pressed on the matter by several Congressmen.

After that admission, VA Secretary Robert Wilkie said otherwise:

To clear up any confusion, I want to make clear that each and every post-9/11 GI Bill beneficiary will be made 100 percent whole—retroactively if need be—for their housing benefits for this academic year based on Forever GI Bill rates, not on post-9/11 GI Bill rates[.]

Whom to believe?  Based on what evidence?  It’s true enough that of the two, only one was under oath, and it wasn’t Wilkie, but that doesn’t count for much here.

And this: that software glitch is being blamed on an outmoded computer system that hadn’t/couldn’t be upgraded due to lack of funds.  Molly Jenkins, a spokeswoman for that House VA committee had a different view, though:

It’s laughable that VA is blaming Congress for its IT issues, especially given the fact that Congress just passed the largest VA budget in history[.]

She also emphasized that the VA was allotted $30 million to improve its system.

She then pointed out a few other things: one is that the VA’s problems are “inexcusable, decades-long and well-documented.”

And that that the agency already is six months late with a required progress update.

And

[VA] sounded no alarms in their May 2018 report that there would be any delays at all[.]

It’s hard to tell whether VA management is not trying, is breathtakingly incompetent, or is actively defying Congress—and our veterans, whom the VA was created to support.

In any event, the VA needs to be eliminated and its once and future budgets committed to vouchers for our veterans.

Veteranos Administratio delende est.

Desperation

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With his legacy mostly erased, and more of it on the way after the current temporary interruption—an outcome ex-President Barack Obama (D) will thank us for in the fullness of time and his clearer understanding—Obama is desperate to preserve such of it as he can with his revisionist history.

Former President Barack Obama on Tuesday took credit for the boom in US oil and gas production, saying, “That was me, people.”

Of course, it was.  His sequestration of Federal lands and offshore fields from oil and gas exploration with his slow-walking of the necessary permits were instrumental in triggering the boom.

You wouldn’t always know it, but it went up every year I was president. That whole—suddenly America’s like the biggest oil producer and the biggest gas….

Never mind that those year-on-year increases—small as they were—were driven by exploration and exploitation of those fields on private and other non-Federal lands.  The increases didn’t get serious until Obama and his administration were out of the way, but we’ll not mention that.

Another bit of history that the revisionist Obama carefully elided was provided by ex-Shell Oil Company President John Hofmeister:

…he tried to remake the power generation industry without involving Congress, and the Paris accords—again without involving Congress.

That remake was his threat—which he tried most enthusiastically to carry out—to eliminate our carbon-based (mostly coal, but oil and gas, also) electricity production industry, along with the wholesale destruction to our overall economy that acting on his Paris Accord would have wreaked.

The extent of Obama’s desperation is sad.

Paying for Groceries

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A farm bill is wending its way through Congress, finally, as the House and Senate have agreed to a common version.  What’s in this version?  Good question.

Lawmakers for months have been deeply divided over the farm bill, which funds crop insurance and farm subsidies, as well as programs to help low-income people pay for groceries.

But these…lawmakers…won’t talk publicly about the details of their compromise.

There are a couple of things here, though, that are clear despite the lack of transparency.  One is the inconsistency of having farm price supports—farm subsidies—along with funding programs to help the poor pay for that artificially costly food.  The other is the premise that Government belongs in the insurance business.  One would have thought Obamacare would have driven home the utter foolishness of that, even as it concerns such long-standing involvements like crop insurance.  Silly me.

No.  It’s long past high time for price supports to be eliminated and to let competition drive food prices to their naturally lower levels.  It’s also long past high time to get Government out of the crop insurance business (all insurance business, come to that), and let free market-competing private enterprises sell the relevant policies—and relieve tax payers of the burden.

As for the poor who still wouldn’t be able to afford those free market lower prices, the Senate-passed version that went to House-Senate committee (and about which outcome we’re told nothing) had no work requirement as a criterion for eligibility for welfare support/food stamps: the Progressive-Democrats won’t hear of any requirement to take steps to earn one’s way off welfare.  That work requirement needs to be a part of the bill that goes to the President for signing; those folks should have the opportunity to escape the Progressive-Democrats’ welfare cage.

“We Need to Decide”

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So says President Xi Jinping of the People’s Republic of China.

Speaking in Spain while enroute to the G-20 conference in Argentina, Xi said

I think we are at a crossroads. In economic terms we need to decide if we are going to follow the economic globalization and free market or if we are going to choose unilateralism and protectionism.

“Crossroads” may be a bit much.  Certainly, we’re at cross purposes on international trade matters, but I think “crossroads” overstates the case.  The current budding crisis will fade before it breaks, or we’ll recover after it breaks.  In either case, the situation is not at all irrecoverable.  Irrecoverability was a serious risk in WWII.  Irrecoverability was a serious risk during the global depression of the 1930s due to all the government interventions—interferences—into their domestic economies, which badly slowed those recoveries.  We’re not near that today.

The larger question, though, is the falseness of Xi’s remark about globalization vs unilateralism, free market vs protectionism.

We do need to follow free market tenets along with free trade principles and the degree of globalization that will ensue from those freedoms.  It would be good if the PRC followed those tenets and principles, too.  Instead, Xi’s government engages in theft of proprietary material, theft of intellectual property, extortion of those things as a price of doing business inside the PRC.  It requires government backdoors into the software used by companies doing business inside the PRC.

Xi’s government sets trade barriers including requirements to take on a PRC company as equal or majority partner as a condition of doing business inside the PRC (Xi talks of waiving that requirement in a couple of cases; neither of those waivers actually have occurred), heavily subsidizes domestic businesses, blocks economically useful mergers between international companies headquartered in other nations—other continents—for noneconomic reasons, routinely intervenes in its domestic stock “markets,” manipulating its currency value, and on and on.

Xi’s government tried to abuse its monopoly power in rare earth elements by limiting its exports to other nations below economic, free market demand levels.  Its occupation of the South China Sea and the islands—owned by other nations—is for the purpose of controlling the resources on/below the sea bed and the food supplies in the waters.

Xi’s government exports substandard—even dangerous—products like poisoned pet food, plywood sheets laced with formaldehyde, baby formula spiked with melamine powder.  The list goes on.

It would be good if the PRC did join the consensus for free and open trade.  To do that, though, the PRC would have to move away from its current business model, a model of theft and coercion rather than a model of honest markets and freely done international trade.