Category Archives: Economics

Miscellaneous economy stuff

They’ve Been Called Out

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The Left is always on about the need to raise taxes, the need for folks (especially the rich, but in general, too) to pay more to government in order to get all the services government is supposed to provide.

Now they’ve been called out and their hypocrisy exposed empirically, at least in one nation that our own Left wants us to emulate.

Hammered by the opposition for slashing taxes and going on a spending spree with the country’s oil money, the center-right government [of Norway] has hit back with a bold proposal: voluntary contributions.

Launched in June, the initiative has received a lukewarm reception, with the equivalent of just $1,325 in extra revenue being collected so far, according to the Finance Ministry.

Finance Minister Siv Jensen:

The tax scheme was set up to allow those who want to pay more taxes to do so in a simple and straightforward way.  If anyone thinks the tax level is too low, they now have the chance to pay more.

Jonas Gahr Store, with a net worth of $8 million (and a leading Labour Party politician), is one of those refusing to pay more than tax law requires, even though the rate, he insists, is too low.  Now it’s personal, though; he’s not dealing with anonymous OPM.

“Pay up, Sucka–”

“No.”

Misguided Reporting

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A Dodd-Frank requirement to report the pay ratio between a company’s leadership and its rank and file—specifically, the total earnings of the chief executive compared with those of the median employee—is on the chopping block.

Supporters of the rule, part of the post-financial crisis Dodd-Frank Act, hope disclosure at an individual-company level might focus more attention on inequality and sky-high CEO pay.

This sort of pay ratio metric may well have value to a company’s investors, but it has no value at all to the Federal government beyond a cynical social-justice virtue signal kind of mandate from the Progressive-Democrats.  The requirement needs to be chopped (along with the whole of Dodd-Frank, but that’s a different story).

If investors find value in this, they can push the company of interest to publish the ratio on their own; government should not be involved.

Food Stamps and Work

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Now that the Obama administration’s waiver of work requirements for families without dependent children in order to be eligible to obtain food stamps has been rescinded, the vast numbers of recipients are being greatly reduced.  Alabama, for instance, this year resumed the work or work training requirement in a pilot program involving 13 of its counties and has seen its food stamp enrollment fall by 85%.  Georgia is running a similar program, and it’s seen a 58% drop.

It’s all well and good that the work/work training requirement has moved people off the food stamp rolls, but the flip side of that is what happens to those that are: are they actually working or training, or are they just shoved off the rolls, still unemployed, now deeper in poverty?  The Maine results give an indication.

An analysis of a group of 7,000 Mainers who left SNAP in 2014 found their total earnings increased from $3.85 million in the third quarter 2014 to $8.24 million in the last quarter of 2015.

That’s more than a doubling in earnings in just over a year.  These folks, clearly, are getting work; they haven’t just been shoved over a cliff.

Kansas is getting similar results.

…60% of former beneficiaries found employment within 12 months and their incomes rose by an average of 127% per year….

Hmm….

Bank Bailout, Italian Style

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Italy has nationalized Monte dei Paschi di Siena, a major bank that otherwise would have gone into bankruptcy. In the process, the bank’s €26.8 billion ($32.5 billion) “nonperforming loans” will be “disposed of,” and the Italian government taxpayers will feed the bank €5.4 billion and get a 70% stake in the failing bank.

Under the bad loan disposal plan, €26.1 billion will be bundled and sold at 21% of gross book value, the vast majority to the government-organized Atlante II fund, while the bank retains 5%.

This is the third time Monte dei Paschi had gotten capital injections, and for some reason, the men of the Italian government thinks this third time will be the charm.  Of course, that’s an easy choice for them to make; it’s not their money being used in this risk.  It’s the Italian taxpayers’ money being cavalierly gambled.

No, instead the bank’s creditors and other investors should be the only ones on the hook; they’re the ones whose money is at stake, and they’re the ones whose management oversight was…absent.

The New Protectionism?

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A deep cultural divide between the US and Europe in their approaches to Silicon Valley has thrust European officials into the role of global tech-industry cops.

Notice that.  The EU is looking to dictate to the world how other nations’ businesses must conduct themselves, whether in Europe or not.  This “thrust” is an economic matter, too, so the question arises concerning just how much culture actually plays—or is it an economic matter.  And since the economics of the thing is aimed at protecting EU companies, the underlying question comes clear: is the EU protecting against unfair practices, or is it just protecting its domestic businesses from competition, a competition EU companies lose because they can’t keep up—especially under the costs inflicted by, for instance, the EU’s own labor laws?

And this:

Just Friday, Germany approved new legislation imposing €50 million fines on social-media companies that fail to quickly remove hate speech and terrorist content—over strident opposition from and other tech companies, which advocate self-regulation to tackle those problems. That step followed the €2.42 billion ($2.76 billion) fine that the European Union’s executive arm levied this week against Alphabet Inc’s Google for abusing its dominance as a search engine.

The concept of “free” speech is dragged in through the EU’s and now Germany’s imposed limitations on that, which have economic opportunity implications far beyond the mere freedom question raised in that post.

The Republic of Korea is considering using this sort of thing nakedly for protectionism.

South Korea’s antitrust chief told the Yonhap News Agency he will examine how to curb the market clout of Google and Facebook.

No fair.  Those guys are competing too successfully.

My thought isn’t new.  Ex-President Barack Obama (D)

said the EU’s investigations into big US tech companies were “more commercially driven than anything else,” suggesting the EU was trying to help out European competitors.

It’s just becoming more obvious.