Category Archives: Economics

Miscellaneous economy stuff

Wealth Redistribution

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Now it’s threatening to spread to our education institutions.

Lawmakers have a new solution for the high cost of college: make the wealthiest universities pay for it.

Of course.  Because competition among colleges to bring down costs, or reducing Federal funding for them under [pick an excuse] programs to reduce the non-student population money available to drive up costs just can’t be done.  Too many special interests would be perturbed by such a thing.

Elite US schools have grown richer since the 2008 financial crisis by investing their endowment money in everything from California vineyards to Chinese startups.  State and federal policy makers now want to tax those profits….

Gotta punish that success.  How dare these institutions accrue moneys without a government’s faretheewell?

…or force the wealthiest schools to spend down their endowments—to defray soaring student bills and refill depleted higher-education budgets.

Which governments could do easily by not sending so much taxpayer dollars to these schools.  But…special interests.

Interestingly, Republicans are in on this move.

Congressman Tom Reed (R, NY)…floated a plan late last year that would require endowments bigger than $1 billion to pay out a quarter of their earnings in grants to working-class families or face steep penalties or even the loss of their tax-exempt status.

It isn’t Government’s place to tell these schools—or any other institution—how to spend its money.  It is Government’s place to not send taxpayer dollars to these schools—or to any other institution.

No wonder Conservatives are so angrified.

An Arms Race

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And we should welcome it.

Russia is creating three new divisions to counter the North Atlantic Treaty Organization’s planned expansion along its eastern flank, Defense Minister Sergei Shoigu said Wednesday, in a move that comes amid rising tensions in the region.

Moscow has threatened it will respond to NATO plans to boost its troops’ presence along its border with Russia.  Western officials said last week the alliance will send four battalions—about 4,000 troops—to Poland and the ex-Soviet Baltic countries.

These three divisions are being created, in part, by adding men and equipment, and they’re being created, in part, by reassigning men and equipment from existing units.  It’s the latter that’s instructive.

With the Russian economy in shambles—among other shortfalls, it needs oil priced above $100, remember, the ruble still is in the tank, and inflation remains high and growing—it can ill-afford the expansion on which it’s embarking.  In addition to these “new” divisions, Russia is spending its money on modernizing its military, developing and deploying nuclear weapons near the Baltics and Poland (since before it began creating these three divisions), supporting its occupation forces in Georgia and Ukraine, and on and on.  Although Russia certainly can sustain its buildup for a time, it can’t go on indefinitely.

We should welcome this arms race.  We should accelerate our technological developments and production.  We should answer those three divisions with further deployments into eastern Europe, with an expansion of our Baltic fleet (which we should move deeper into the eastern reaches of the Baltic Sea), and with arms transfers and sales to Ukraine and Georgia.  Every buildup by Russia should be answered with a bigger, more technologically capable one by us.

The Soviet Union couldn’t sustain its arms race; neither can Russia.  It will take an administration different from the current one or its potential Progressive-Democratic successor to engage, though.

Federal Bailout “Prevention”

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Asset managers such as Pacific Investment Management Co look set to lose hard-fought protections against the cost of a bank failure, when the Federal Reserve on Tuesday proposes yet another rule aimed at preventing taxpayer bailouts for financial firms.

How disingenuous does this sort of administration get?  No rules are needed to prevent taxpayer bailouts for financial firms, or any other enterprise, government (Fannie Mae or Freddie Mac, for instance) or private.  There’s no need for preventing what ought not exist in the first place; there’s only need for firing politicians and bureaucrats who keep trying for taxpayer bailouts.

Free Speech PRC-Style

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Chinese authorities are training their sights on a new set of targets: economists, analysts and business reporters with gloomy views on China’s economy.

Securities regulators, media censors and other government officials have issued verbal warnings to commentators whose public remarks on the economy are out of step with the government’s upbeat statements….

And

Early this year, Mr Xi [Jinping] visited the country’s three big state news organizations—Xinhua, the People’s Daily and China Central Television—to lecture them on the need to toe the party line, “tell China’s stories well” and enhance the nation’s influence in the world.

But, of course.  Can’t have truth conflict with Party.  After all, “truth” means that 2 + 2 will be 5 whenever the situation warrants.

The Left Doesn’t Like Free Speech

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Especially when it differs from the Left’s holy writ.

The political left is threatening to boycott companies that contribute to a GOP convention that could nominate Donald Trump.

Color of Change, MoveOn.org, CREDO and UltraViolet, et al., are threatening to job businesses that support this year’s Republican convention, but not this year’s Democratic convention.

Of course, the rank cowardice of today’s business “leaders” contributes to the Left’s assault.

The campaign appears to have already succeeded in getting Coca-Cola to limit its GOP convention support to $75,000 this year, compared to $660,000 in 2012.

And

In 2012 Color of Change led a similar assault on companies supporting the American Legislative Exchange Council, which promotes free-market policies in the states.  …  ALEC’s reward for decades of pro-growth advocacy was to see its biggest contributors—Coke [again!], General Electric, Kraft, McDonald’s, Wal-Mart —drop funding and head for the tall grass.

Such cowardice shouldn’t be rewarded; this surrender to threatening speech merely contributes to further assaults on speech—one of the most basic freedoms of our Republic.  But, then, cowards don’t like free speech, either.