Category Archives: Economics

Miscellaneous economy stuff

Rescissions and Politics

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Senator Richard Burr (R, NC), recall, voted against a rescission of $15 billion  in unspent money because he wanted to preserve $15 million in unspent money in the Land and Water Conservation Fund.

The good Senator, objecting to The Wall Street Journal having called him out, wrote a Letter to the Editor, explaining himself.  The center of his argument is this:

The LWCF isn’t, as you suggest, a “slush fund” or a “land grab.” Nor is it a piggy bank Washington should raid at its convenience. Instead, it is a rare example of an effective government program that costs taxpayers nothing and benefits them entirely.

So, the Senator voted to tank a multi-billion dollar reclama of unspent money over a bit of trivium with a value of a bare one-tenth of one per cent of the total being reclama-ed.  Never mind that if the LWCF were all that useful, it would have been spending that pocket change, and that if it were that valuable, it could be restored in the next budget.

In any event, the money, not having been used by the LWCF and having been reclama-ed, would have been lost to the LWCF not at all.

Brilliant.

Privatize It

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Among the proposals the Trump administration has offered for drastically restructuring and shrinking the Federal government is one for privatizing the US’ Postal Service.

Of course, the American Postal Workers Union opposes the move, but that’s just wind in the trees and nothing to take seriously.  The union claims that such a move would harm e-commerce and rural America as well as do away with regular mail and package service at affordable costs.  Because competition in the market place doesn’t drive down costs or spur innovation.  And because we all need our regular, daily fix of junk mail.

The administration’s proposal isn’t yet ready for prime time, though.

A privatized Postal Service could be structured like an investor-owned utility and continue to be regulated by the Postal Regulation Commission or another governmental body, “consistent with the existing models of privatization in Europe,” the plan said.

There’s no need for the postal entity to be a regulated monopoly, nor is there any rational reason to imitate Europe for the sake of imitating Europe.

Either privatize the USPS or don’t, but don’t waste even more money on halvesies.

Ransomware and Government Entities

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The Wall Street Journal, in an article about ransomware being used to hack city (and other) computer systems, asked the question Should Cities Pay?

Not only no, cities (and others) should not pay, but no2.

Aside from paying the ransom being an act of cowardice, it aids and abets the criminals—which is amoral, if not yet a felony.

Sure, it costs more in the moment to refuse and rebuild, but what costs are saved by not telling the hacker world that the city will gladly pay the ransom and so be hacked repeatedly?  What’s the cost to other, similarly situated, cities and towns (and public libraries) when one gladly aids and abets?

What’s the excuse, today, with ransomware so well known, for cities not hardening their systems against this hack (and other hacks) before the hack occurs?

Protecting US Technology

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The Trump administration is moving toward a set of rules that would heavily restrict the People’s Republic of China’s ability to acquire American technology-developing companies and American technology.

Of course, there are objections to protecting our stuff.

Industry groups…are mainly concerned that the export controls could negatively affect their businesses by preventing them from using their technological edge.

If such groups were truly serious about this, they’d be truly serious about hardening their member companies’ facilities against hacking.

And

While many object to the investment restrictions, they are seen as having less practical impact because Chinese investment has fallen off so drastically.

This is short-sighted to the point of being disingenuously so.  The PRC’s investment has fallen off because, through theft, hacking, and their extortionate requirement of “sharing” technology and inserting backdoors into core software as a condition of doing business in the PRC, they’ve largely caught up.  When we get our edge back, the PRC’s “investment” efforts will pick back up.  The restriction objectors know this.

Bad Bonds?

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Recall that Michigan State University agreed to pay $500 million to victims and associates of Larry Nassar’s sex abuse victims while he was pretending to treat our women gymnasts’ injuries.

Now the school intends to float bonds to raise the money to pay the bill.

Were I an investment advisor—which I’m not, nor do I play one on the radio—I’d advise against buying these bonds; I’m not satisfied Michigan State will be able to pay them off in the end, even with OPM.

Aside from their investment quality, or lack, I also think it’s immoral to bail out the school until there has been a serious cleaning house of school management, from middle management layers all the way up through the top layer.  This house-cleaning must include the athletic department as well as HR, student affairs, extracurricular affairs, and the President’s office.  Especially in the latter and in the athletic department, no one should be left but the secretaries.

And none of this gets to the fact that the bond offering is just a cynical back-door effort to get taxpayers to pay for the school’s failure.  That’s also morally unacceptable.

And this:

[The school] is in talks with its insurers and has said it expects to recover at least some funds through them.

Is the school seriously suggesting that it bought insurance against the risk that its medical personnel would engage in sexual abuse?  I can think of no other way in which insurers would be liable for a payout here.