Category Archives: Economics

Miscellaneous economy stuff

Mindset

Posted on by
Reply

Here’s the new US offer regarding the Iran nuclear weapons deal; we’ll soon see pretty clearly the mindsets of Germany, France, and the UK.  And of Iran.

Iran must

  • end nuclear weapons development in perpetuity
  • stop all uranium enrichment
  • never preprocess plutonium
  • allow nuclear unqualified access to all sites throughout the country
  • withdraw all forces from Syria
  • end support for militant groups like Hezbollah in Lebanon, youths militia and Taliban in Afghanistan, and the IRGC Quds Forces
  • stop sending arms to the Houthi militia in Yemen
  • release all US citizens
  • cease threats to destroy Israel
  • stop missile launches
  • stop development of nuclear-capable missiles
  • respecting Iraqi government sovereignty

In return, the US would

  • be willing to lift all economic sanctions
  • restore full diplomatic and commercial ties with Iran
  • allow it to access advanced technology
  • support modernization of Iranian economy
  • help it reintegrate into the global financial system

Big gains for Iran in recompense for serious Iranian behavior.

So: do the European parties to the existing nuclear weapons deal want stability and prosperity in the Middle East, or do they prefer appeasing Iran?  Do they care about Israel’s prosperity and safety in a nuclear weapons free Middle East, or do they prefer appeasing Iran?

Do they accept the terms on offer or have concrete, viable counteroffers (vis., include a demand for release of all British citizens), or…?

How Bad is a Vocational Education?

Posted on by
Reply

Especially compared with a formal college education?  Oren Cass, Senior Fellow at the Manhattan Institute, had some thoughts on that in a recent Wall Street Journal piece.

Elevating vocational education, and prioritizing its students, must begin with a substantial reshaping of American high schools. Vocational education will not succeed so long as culture and public policy consign it to second-class status—a dumping ground for students who interfere with what school districts consider their real mission, college prep.

It’s absolutely true that we shouldn’t be deprecating the status of those with or who prefer, for any reason, vocational educations.  These folks—the VoTech graduates, the OO graduates—the trades and secretaries are critical to our economy. What road gets built, what office buildings or houses get built, what communications networks get laid out without the trades?  What office is operable without the secretaries and office managers who do the actual nitty-gritty of running things?

What will a designer or an engineer or an architect do without the trades and secretaries to turn ideas into action?

Cass is spot on.

Italy and the Eurozone

Posted on by
Reply

Since the last Italian election all those interminable months ago, which yielded no party with even a serious plurality, the several (and I do mean several) political parties have been trying to form a coalition of some sort so they could form an actual government with which to operate the country.  The coalition most likely to succeed in forming a government, if not in actual governing, consists of the far-left 5Star Movement and the equally far-right League (Lega Nord, Northern League).  What’s of interest to me is less the irony of these two parties trying to govern together and more the impact on the eurozone and the EU if these two parties actually succeed in allying and governing Italy.  They want

renegotiation of EU treaties, including the Stability and Growth Pact, the cancellation of €250 billion in Italian government debt by the European Central Bank, and a revision of Italy’s contribution to the EU budget.

Although formally walking back much of that, they’re not walking that far back.  Among the things included in those three items, and one that directly impacts Italy’s debt, is the 3% of GDP limit on government deficit that every eurozone nation’s government must meet.  The coalition wants that waived for Italy.  Not raised, gotten rid of.

The coalition didn’t include a commitment to hold a national referendum on whether Italy should remain in the eurozone, or even the European Union, if Italy doesn’t get satisfaction these items, but you can bet that’s still there in the background.  A significant fraction of the population would vote to leave, too; although whether that fraction is large enough to reach a majority is iffy so far.

I’ve suggested before that all of the nations of Europe are a bad fit when jammed together under one imitation government.  Italy is one of those nations that, in concert with the rest of the Mediterranean EU members, would be better off outside.

US Corn Exports

Posted on by
Reply

The Trump administration is working on a deal with the People’s Republic of China to reduce the trade imbalance we have with them (whether the trade imbalance really is a bad thing and whether the PRC is working the deal as hard as the Trump administration are questions outside this post).  American farmers would have trouble producing enough to meet their part of the goal, were the deal to go through.

US corn exports could jump from $150 million to about $10 billion annually within a few years if China vastly expanded its quotas and reduced its duties that are as high as 65%, according to one estimate.

The farmers—particularly corn farmers—would get a great deal of help in ramping up their exports if they weren’t…encouraged…to divert significant fractions of their crop to ethanol production.  This is another consequence of ethanol mandates and another reason to get rid of them.

Update: In 2016, the US diverted 5.28 billion bushels of corn to ethanol production, or 36% of our total corn production that year. At roughly $3.45/bushel, that works out to $18.2 billion of corn production that was diverted.  Simply eliminating this useless diversion would seem to cover that production jump cited in the quote above.  It also would seem to leave $8 billion of production to mitigate food costs that are inflated by the diversion.  This, in turn, would help our poor and mitigate the need for food stamps and therewith reduce the tap on taxpayer pocketbooks.

It’s Not Your Company

Posted on by
Reply

Seattle wants to charge a head tax on businesses operating in the city, a tax whose amount would be just what it sounds like—a tax based on the number of hours worked by each employee the business has on its payroll.

In response to the proposal, Jeff Bezos, Amazon CEO, paused construction on a 17-story office tower in downtown Seattle.

In response to Amazon, the Left in Seattle, spearheaded by the Service Employees International Union-backed activist gang—Working Washington—wants Amazon charged with a felony.

Amazon, after all, doesn’t belong to its investors, and it’s not run by Bezos.  No, the activists, the SEIU, and the city’s governing machine that wants the tax, all insist that Amazon is public property, and it must do what they demand, not what its owners want.

Because those owners don’t own that.  They only hold it in conditional fee from these city Know Betters.

Is Seattle as much a harbinger of future Progressive-Democrat demands as is Jerry Brown’s California?

Update: The Seattle City Council on Tuesday voted 9-0 to impose the head tax, although rather than being based on hours worked per employee, it’s a flat head tax: $275 per employee per year.