Category Archives: Economics

Miscellaneous economy stuff

Republic of China and President-Elect Donald Trump

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It’s time to start correcting some errors of long standing, and it may be (it is too soon to be confident of this) that President-Elect Donald Trump is beginning to do that with his telecon with the President of the RoC.

“The one-China policy is the cornerstone of the healthy development of China-US relations and we hope this political foundation will not be interfered with or damaged,” [Chinese Foreign Minister Yi] Wang was quoted as saying.

This illustrates one of those errors.  The Republic of China is separate from the People’s Republic of China—that’s why Chiang Kai-shek and his Kuomintang followers and lots of others left the mainland for the island of Taiwan.  They wanted no part of Mao Tse-tung’s butcherous communist state, including declining to be a part of that.

[RoC President Ing-wen] Tsai also told Trump that she hoped the US would support Taiwan in its participation in international affairs, the office said, in an apparent reference to China’s efforts to isolate Taiwan from global institutions such as the United Nations.

It said the two also discussed “promoting domestic economic development and strengthening national defense[.]”

Indeed.  We need to be plusing up the RoC’s ability to defend itself and loudly repeating our commitment to the nation’s defense, especially against the backdrop of the PRC’s naked aggression in the East and South China Seas and its occupation of the latter.

Of course, the Obama administration objects to this apparent show of non-timidity.  A carefully anonymous “senior Obama administration official,” who’s not supposed to be talking at all “because of the sensitive diplomatic relations involved” complained

The White House learned of the conversation after it had taken place

No hypocrisy here at all.  Its not at all like Congress learning of the White House’s immigration moves with “refugees” that Australia had rejected only after the fact.  Nossir.  Never mind that the President-Elect, nor does any American, have any obligation to seek the President’s permission to make or take a telephone call.

The administration isn’t the only gang with trouble with this call, though.  The whole of the Left is up in arms; their dismay is exemplified by this from Bonnie Glaser of the Center for Strategic and International Studies:

I think privately, they [the PRC] will definitely seek to educate this incoming president and ensure that he understands the sensitivity of Taiwan[.]

Because an American President should be taking guidance—education, even—from America’s enemies.  Glaser (and the PRC) are right, though, that matters relating to the RoC are sensitive–just not for her reasons.  The island nation’s freedom is hanging on a thread.

Along these same lines, I look forward to the new President Trump hosting the Dalai Lama at a State Dinner sometime this winter.

A couple of small nits from the article at the link, too: it’s the Republic of China; the island on which the nation sits is Taiwan.  Also, the citizens of the RoC have been increasing their push for independence from the People’s Republic of China over the last several years; Tsai Ing-wen was just elected President of the RoC in no small part because of her and her party’s long-standing push for independence.

In sum, we absolutely need to tighten and strengthen our relationship with the RoC, and that includes working closely with them politically, economically, and militarily.

Some Context For The Latest Headline Unemployment Rate

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Here are some graphs, via The Wall Street Journal, that show why that headline rate of 4.6% isn’t all it’s cracked up to be.outdidelaborforce

The WSJ emphasized two points here, aside from the fact that this age group being outside the labor force has nothing to do with retirement or being in school:

First, a small but ever growing minority of 25-54-year-old men are no longer in the labor force. In the 1960s, just 2.7% of men that age were outside the labor force. As of November, it’s 11.5%.

Second, from the 1960s to late 1990s, 25-54-year-old women became less and less likely to be outside the labor force (this is primarily driven by a decline of stay-at-home mothers, as more women took jobs). But in the last 15 years, the share of women outside the labor force has been growing too. It’s now up to 25.3% from 23.2% in November of 2000 just before George W. Bush took office.

Which might contribute to and why, perhaps, there’s so little wage growth, as shown in this graph:wagegrowth

There’s just too much slack in the population’s ability to work.

Obstruction

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With full control of Congress and the White House, Republicans have anticipated being able to repeal the law using a special budget maneuver that would allow them to get around a filibuster by Democrats in the Senate.

Yes and no.  The budget maneuver is reconciliation, and it’s usable only on budget matters.  That means that Obamacare will be defunded pretty straightforwardly, but the law itself still will be on the books—for a future Progressive-Democratic Party-controlled Congress to re-fund using the same budget reconciliation maneuver.  The law itself needs to be fully repealed, too; defunding it can only be a stop-gap measure.

Eight honest Progressive-Democrats are going to have to find the moral courage to step up and support actual repeal.

And there’s this.

[T]o replace it, they likely would need the support from eight Democrats and all 52 Republicans in the Senate (if Republican John Kennedy wins a December 10 runoff in Louisiana) to reach the 60 votes needed to clear the chamber’s procedural hurdles.

That procedural hurdle is the filibuster.  For this, too, eight honest Progressive-Democrats are going to have to find the moral courage to step up and support replacement with legitimate health insurance market paradigms.

Fat chance, but the fight needs to be carried out loudly, with no room for Senate Progressive-Democrats to hide behind their excuses and their crocodile tears over Americans being too stupid to take care of themselves and so need these Know Betters to do for them.

Senate Minority Whip Richard Durbin, a Democrat from Illinois, predicts Republicans will have difficulty passing a replacement health law.

Yup.  Look for continuation of Progressive-Democrats’ past six years of obstructionism into the next two or more years.

Tax Cuts and Deficits

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The Wall Street Journal had a piece earlier in the week that focused on Republicans’ dismay over President-Elect Donald Trump’s tax cut plans, his infrastructure spending plans, and the deficits that would seem to result from the two.

However.

Once again, the pundit takes tax cuts (and individual spending items) in isolation. Of course, he knows better: broad spending cuts must accompany tax cuts—and isolated spending items—even dynamically, in order to achieve budget surpluses and so reductions in our debt.

The last two times Republicans reclaimed the White House from Democrats—in 1981 and 2001—they also successfully pushed for large tax cuts. Deficits nonetheless rose during their administrations.

This happened because both times Republicans accepted Democrat promises to support spending cuts “later,” and both times Democrats welched on their promises. Since Democrats cannot be trusted, the Republicans this time around will have to cut taxes and spending while arranging spending increases on particular items without Democrat “help.”  And they have the numbers to do that, including without Democrat involvement at all, since all those worthies are interested in is their knee-jerk obstruction of all things not Democrat.

The Courts Get Another One Right

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This case involves how much Federal control over land deeded by the Feds to a State the Feds retain when they make the deed.  In the particular case, the Feds, ‘way back in 1949, deeded land to Ohio (in particular, the Muskingum Watershed Conservancy District) subject to the criteria that the land had to be used for flood control, conservation, and recreation.  Lately, Ohio began allowing fracking under the land.

“Environmentalists” objected and sued to try to force the land back into Federal hands.  The relevant Federal district court dismissed the suit, and it wound up in the Sixth Circuit.  The Sixth waived the BS Flag at the suit.  Although much of the Court’s ruling was based on a technicality (the suit was brought as a violation of the False Claims Act perpetrated by Ohio for allowing the fracking; the Court demurred), there is another reason to applaud the outcome.

In ruling that there was no violation of the FCA, the Court also said in part,

neither the relators’ [the “environmentalists”] complaint nor their proposed amended complaint includes facts that show how MWCD would have known that the fracking leases violated the deed restrictions or how MWCD “act[ed] in deliberate ignorance” or in “reckless disregard” of that fact.

Indeed, fracking occurs well underground and so well away from any activities related to flood control, conservation, and recreation, which are surface or near-surface activities.  Thus, since fracking does not interfere with or otherwise impact such activities, it cannot violate deed restrictions that involve strictly those activities.

This was just a naked attempt by these relators to prevent us from getting cheap energy out of the deep earth cheaply.

The Sixth Circuit’s ruling can be seen here.

 

h/t Institute for Justice