Category Archives: Economics

Miscellaneous economy stuff

Mid-Term Elections

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At their retreat last week, Republicans indicated that they intend to run heavily on the tax reform they got through at the end of last year.  It’s good to have something positive on which to run, especially since, at least for the near term, the Progressive-Democratic Party has nothing on which to campaign other than its #NeverTrump and #NothingRepublicanNoWay platform and its standard disparagement of ordinary Americans like House Minority Leader Nancy Pelosi’s (D, CA) claim that the tax reform’s aftermath of bonuses and pay raises are just crumbs.

As an aside, it must be good to be as rich as Pelosi, that a $1,000 bonus or an increase in take-home pay of some $2,000 per year is just chump change.  President Donald Trump is stinking rich, Vstly more so than Pelosi, and he doesn’t think this added money is trivial.  I’m not stinking rich; I’m not even as rich as Pelosi—not by a long shot—those $1,000 matter to me, as do the added $2,000/yr take-home.

Back to my point.  Republicans can’t only run on their tax reform, though.  They need to add three things to their campaign.  The first addresses, preemptively, the fact that the personal income tax rate cuts—that increase in take-home—expire in about eight years.  Republicans need to emphasize that the only way that rate cut expiration actually would occur would be if Progressive-Democrats in Congress (especially in the Senate where they can filibuster) block those cuts from being extended or made permanent.

The second thing is to go on the offensive regarding DACA.  Most Americans, and it’s pretty much evenly spread across party and independent lines, want the children who were brought by their parents into the US illegally dealt with compassionately and with finality: no more doubt hanging over these folks’ heads.  A couple of Republican proposals for achieving this are on offer. The Republicans currently in office need to push heavily and loudly one or the other or both of them this year, even though—even because—it’s an election year.  Demonstrate that they’re not the ones too timid to do something major and concrete in an election year.

Republicans also need to hammer on Progressive-Democrat Congressmen constantly saying “No.”  Republicans need to be asking loudly, both in their own districts, in their neighboring Progressive-Democrat incumbents’ districts, and in neighboring open districts why Progressive-Democrats so vociferously oppose any plan on offer that takes care of the DACA children—and that does so largely on Progressive-Democrat terms.  Or do the Progressive-Democrats see these folks only as a talking point and not as a group of human beings?

It would have been good if President Donald Trump, during his SOTU speech last week, had pointed to the Dreamers (not the same group as DACA, but there’s tremendous overlap) in the gallery as guests of Progressive-Democrat Congressmen and said to them, “I have a proposal put before Congress that addresses your needs, including a path to citizenship.  Why are the Democrats so opposed to that?”  But that’s water under the bridge, and he still has time to ask that.  Often.

The third thing Republicans need to add to their campaign is their plan for the future.  What do these guys want to do to make American lives better, and how—concretely, an aspect Republicans never have done well—will those things actually make our lives better?

He’s Missed the Point

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John Downs, President and CEO of the National Confectioners Association, wrote a Wall Street Journal Letter to the Editor objecting to Maine Governor Paul LePage’s (R) effort to get junk food off the list of foods for which Maine’s food stamps can be used.

Downs supplied a lot of numbers indicating that everyone, food stamp recipient or other, eats junk food and touting the limits of sugar in the junk food consumed.  But he missed the point.

As long as folks are going to use OPM to buy their food (and for the most part, us OP are perfectly willing to have our funds used for a hand up for those having even an extended rough patch), us OP get to say how our M will be spent in such matters.  And the fact is, food stamps should be used to buy staples only.  Everything else is a luxury, and luxuries should be outside any welfare program.

Like anyone else, of course food stamp recipients want to enjoy some of luxury, including junk food.  In that case, they should get a job so they can afford to spend their own money on their luxuries.  I sympathize with those who can’t find a job (perhaps they’ve been priced out of one by minimum wage laws), but that doesn’t legitimize luxury in a welfare program.

Downs missed the point of the proposed restriction.  But he has a vested interested in missing it.

Living Democracy

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I’ve written that a fractious Republican Party, compared with a monolithic Democratic Party (now a Progressive-Democratic Party), demonstrates with that fractiousness that it lives democracy while that other party merely talks about it.

Are the Conservatives in Great Britain, with their own fractiousness, demonstrating that they live democracy, too, rather than merely talking about it?

Maybe.  But there are differences between the Republicans’ internal arguments and the Tories’ internal arguments.

The Republican Party’s fractiousness centers on arguments over policy, whether immigration, health care provision and health plan provision reform, tax reform, or….  The Tories, though, their fractiousness seems more centered on personality.

Chancellor Philip Hammond must go.  It’s not that Party members disagree with his policies and they want to debate in favor of different ones, he must be removed.  Prime Minister Theresa May must resign.  Not because Party members disagree with her policies and want to argue for the Party supporting others, she must resign.  Foreign Affairs Minister Boris Johnson must be removed.  Not because Party members disagree with his policies, he’s just a boor and must be removed; there’s nothing to debate here.

That’s not a recipe for democracy or for a party’s success.  The Wall Street Journal closed its piece (at the third link above) with this:

If Conservatives think defenestrating Mr Hammond will help, that’s their choice. But they shouldn’t expect any better from a successor—on Brexit or in elections—unless the party unites behind an economic growth plan.

Indeed.  A policy debate, instead of a personal argument.

Disparate Impact

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High-tax States, principally States run by Progressive-Democrat regimes, don’t like the tax reform’s cap on State and local taxes.

The governors of New York, New Jersey, and Connecticut said on Friday that they would sue the federal government to overturn the new US tax law, saying the measure unconstitutionally discriminates against Democratic-leaning states.

This is just the raw sewage of disparate impact being spread across a tax bill—never mind that the tax reform is uniformly applied across all States, across all businesses and individual taxpayers.  Never mind, too, that if some taxpayers, if some taxing jurisdictions, are impacted differently than others, it’s solely a result of the conscious individual, business, and State and local government choices.  At least when “disparate impact” is imputed to matters of race, the alleged victims have no choice in their position in the differences alleged.

Here’s an example of the foolishness and disingenuousness of the suit:

The legal action will argue that the new tax law’s cap on state and local tax deductions infringes on states’ rights and amounts to double taxation[.]

The States have no “right” to a Federal income tax deduction.  Beyond that, the cap can’t possibly represent double taxation; the only tax here is the SALT applied by those State and local jurisdictions.  Not being able to deduct a fraction of that (or any of it, come to that) from a Federal income tax bill is no tax at all.

One hopes the Federal trial judge dismisses the suit out of hand and strongly sanctions the governments and Attorneys General of New York, New Jersey, and Connecticut for bringing such a frivolous suit.  Failing that, one hopes the Supreme Court, where the suit will end regardless of the trial court outcome, itself firmly chastises the State governments and Attorneys General.

PRC Economic Opening

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Liu He, head of the People’s Republic of China’s Office of the Central Leading Group for Financial and Economic Affairs, says,

We’ll open wider to the world across the board[.]

Liu promised that the PRC would

  • “substantially” open up the services industry, particularly the financial sector
  • let foreign securities firms own majority stakes in their Chinese ventures and…scrap foreign ownership limits on Chinese banks
  • reiterated past promises to relax restrictions on foreign companies in manufacturing, including in railway equipment, and to gradually lower tariffs on imported products such as automobiles

Even if they do these things (and that’s no certain thing: notice those past, unkept, promises), Liu’s—and Xi’s—rhetoric is just wind in the trees as long as the PRC demands that

  • foreign companies partner with domestic companies as a condition of doing business in the PRC
  • foreign companies are required to “share” technology and other intellectual property
  • foreign companies are required to give backdoors to the PRC government for the latter’s entry into those companies’ critical software and other proprietary information.

This not only is “legalized” theft, it’s backdoor protectionism.