Category Archives: Economics

Miscellaneous economy stuff

A Change in Tone?

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Recall the start of President Donald Trump’s response to the People’s Republic of China’s economic conflict with us, when he began imposing tariffs on PRC goods over their continued theft of American companies’ intellectual property.

Vice President Wang warned US business chieftains there would be corporate casualties. President Xi told others that Beijing would “punch back” at the US.

Now we’re getting sweet words.

Liu He, President Xi Jinping’s economic-policy chief, told visiting American business representatives that US companies’ China operations won’t be targeted in Beijing’s trade-brawl counterattacks. “We won’t allow retribution against foreign companies,” Mr Liu said[.]

We promise.

Sure.

No, this is not a change in tone.  It’s smoke-blowing and just a change in tactics.  The PRC still is requiring foreign companies—especially American companies—to take on a majority partner as a condition of doing business in the PRC.  Sure, the government is making noises about only requiring a minority partner (49% ownership), but they’ve enacted nothing.

The PRC still is requiring foreign companies—especially American companies—to install backdoors in their operating system software and their software products so the government can enter and poke around to its heart’s content.

The PRC still is hacking into American businesses and our government facilities to steal our companies’ and government’s secrets.

On the other hand, that last may indicate that the change in tone is serious.  The PRC may have gained enough confidence in its hacking chops that it doesn’t feel the need to demand the surrender of our secrets; it may be confident that it can steal them at will.

Either way, there’s no reason to take Liu at his word.  Actions matter.

Greece and Austerity

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Greece finally is out from under its EU/IMF bailout yoke, and now it wants give its citizens relief from the austerity measures it implemented during its years-long crisis.

[Prime Minister Alexis Tsipras]…announced ambitions to cut taxes as well as increase spending to boost employment and on welfare programs.

Reducing taxes is consistent with reducing austerity—provided the government also tightens its tax collection regime.

Increasing spending, though, increases austerity: it crowds out private businesses as government, which doesn’t have to worry about the cost of money, outcompetes businesses, both for sales and for the resources needed for production. That increased spending also drives up the cost of money for those private enterprises.

Government Diktat

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California style.  That state has passed a law.

The law requires a company to appoint one woman to its board of directors by the end of 2019. By the end of 2021 a five-member board would need to have two women, while boards with six or more directors would need three. The Legislature, always alert to possible micro-aggressions, defines female as “an individual who self-identifies her gender as a woman, without regard to the individual’s designated sex at birth.”

(One wonders whether the law would be satisfied by a male Board member self-identifying as a woman for the purpose of Board-related activities.  [/snark])

The number of women selected for Board membership has much to do with the lack of women with actual qualifications for those positions.  Forcing quotas onto private enterprises won’t produce qualified women out of thin air.

The lack stems from two major sources (among others).  One is the way we teach our girls and young women throughout K-16.  Our “educators” generally don’t push them as hard or in the same direction as they push our boys and young men.  This is an example of the bigotry of low expectations.

The other major source is in our various corporate cultures.  Women don’t get the same support, encouragement, or kicks in the fannies to do better that men do, so they don’t develop, over the course of their careers, the qualifications needed for Board seats.

Along these lines, women employees don’t spend the same continuous time on their careers as do men: many women take significant time off from their careers to have and raise children.  As a nation, we still haven’t worked out a way around this difference in time commitment.  Paid parental leave might be a step in that direction, but even were it, it’s wholly inadequate.

This law does not address any of these.

“Trump is a symptom, not the cause”

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Ex-President Barack Obama (D) said that in his Friday speech at the University of Illinois.  I agree with him, but not for the reason he might think.

President Donald Trump might have triggered our economic recovery with lower taxes and reduced regulation.  He might have begun restoring our nation’s position around the world with his firm rhetoric regarding responsibilities and his refusal to apologize—indeed, his willingness overtly to celebrate—American uniqueness and greatness.

But his election, and his performance in office, are symptoms of the malaise under which our nation labored during eight years of Obama’s economic failures, constant apologies for our nation’s historic successes around the globe, and timidity in enforcing even the most glibly offered red lines.

The Trump administration is the result of Americans’ disgruntlement with the dysfunctional policies of the prior administration.

Nike

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Nike makes shoes, among other things.  It also has chosen to use Colin Kaepernick in its new Just Do It campaign.  You recall Kaepernick: ex-49er quarterback who’s the instigator and leader of the NFL players’ campaign of contempt for our national anthem and our flag and of insult for the generations of our veterans who’ve fought, been maimed, and died for our freedom, including these players’ right to be stupid and to engage in contemptible and insulting behavior.

But wait—aren’t the players protesting police brutality, discrimination, and other social injustices?  That’s certainly their claim.  However, if their claim were accurate, they’d protest police brutality, discrimination, and other social injustices instead of attacking our anthem, flag, and veterans.  They’d also go into the neighborhoods where these things are occurring and actively help the locals, as many of the players who aren’t behaving so contemptibly and insultingly are doing.

Further, even if that had been their message at the outset, it’s clear that their message has been not understood that way by much, if not most, of their audience.  They would, then, clarify by changing their message delivery in order to have their message better understood.  Instead, the players have continued their delivery unchanged in the slightest.  From that, it’s clear that either their message never was what they claimed it to be, and they’ve been attacking these symbols and defenders all along, or they’ve walked away from their message and now are simply engaged in a toddler’s ego trip of out-stubborning those who disagree with them.

The players know all of this; in particular, Kaepernick knows all of this; and Nike knows all of this.  Yet,

Nike has said it “opposes discrimination of any type and has a longstanding commitment to diversity and inclusion.”

Too bad that doesn’t apply to our anthem, our flag, or our veterans.

I’ve bought my last Nike product.  I’m Just Doing It.