Category Archives: Economics

Miscellaneous economy stuff

Change the Subject

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At the Federal level, Republicans in Congress are attempting to take national-level steps to curb union abuses of members and nonmembers. The particular abuse is union use of dues to fund a particular party’s candidates, whether the union members support that party or candidate or not for now, at least, the Congress is ignoring union states’ practice of collecting dues from non-union members—which the employees are required to pay as a condition of keeping their jobs—and using those coerced dues also for political work rather than union activities related to work).

The Employee Rights Act, introduced Monday by Senator Orrin Hatch (R, UT) and Congressman Tom Price (R, GA), would allow union members to tell their bosses they don’t want their share of dues going to certain candidates or causes, without fear of retaliation.

The response?

…Democratic strategists are accusing Republicans of ignoring the needs of hardworking union members, and instead just trying to re-route sizable campaign contributions.

Don’t address the subject of the bill. Talk about “rerouting.” Never mind that the bill doesn’t reroute a penny of union money.

Never mind, too, that the bill takes care of the “needs of hardworking union members,” particularly those hard workers who don’t want their dues to go to political causes they don’t support.

Changing the Subject

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Planned Parenthood and President Barack Obama are partners in this misbehavior.

Recall the hoo-raw over the videos published by Center for Medical Progress showing Planned Parenthood doctors discussing the best way to harvest valuable (monetarily) body parts from freshly aborted babies. Planned Parenthood President Cecile Richards spent her time decrying the videos as “edited” and insisting that Planned Parenthood behavior was both legal and ethical.

Obama’s only comment on the matter came through his Press Secretary Josh Earnest, and it was centered on the editing and a repeat of Richards’ claim of “ethical behavior.”

Neither of them addressed the question of aborting babies and cutting out the good parts for resale (or “donation”). Both of them ran screaming from the subject.

Medicare Funding

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The fund Medicare uses to pay hospitals will run out in the next 15 years, and experts say there are no easy answers to solve it.

Certainly not politically easy answers, and that does matter. However, the practical answer is quite simple, if expensive in the transition.

Keep everyone 55 and older in the current Medicare system, with the individual option to leave that system in favor of the one I’ve proposed many times and summarize here. It’s important to note also that the “experts” are referring only to Medicare Part A, the hospitalization part. My reform is broader and applies to Medicare Parts B, payments to physicians, and D, drug coverage.

Rescind the payroll taxes from both the employer and younger-than-55 employee, while requiring the employee to put his payroll tax equivalent into what would be essentially a Health Savings Account. This New Model HSA would contain investment vehicles of the account owner’s choosing—including stocks, bonds, mutual funds for the same, bank savings accounts, etc—and be held for the benefit of the account holder. Unlike the Old Model HSA, with its shameful limits, the NMHSA would have no income limits on contributions, no annual limits on contributions, no requirement to have a High Deductible Health Coverage Policy, none of those government-mandated limits.

Of course, this can’t happen in a vacuum. In conjunction with this, the bankrupt* Social Security system needs to be similarly privatized, also, and the overly expensive Medicare system blocked granted, on a declining-to-zero schedule, to the States. These need to be done, too, with significant tax rate reductions and Federal spending cuts (and not just one-time gimmicks or reductions in spending growth).

Most, if not all of the cost of the transition can be covered by that spending and taxing reform.

 

*Bankrupt: not strictly so because in a few short years, while the Social Security Trust Fund will be emptied of money, current payroll taxes still will be available to make the payouts, requiring the payouts to drop to 75% of their presently scheduled values.

Update: Corrected an empty reference to Part C to the correct reference to Part D.

The PRC’s Markets

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Beijing thought they could “rescue” the PRC’s stock market. Recall that those markets had tanked collapsed last month, with no bottom in sight. Then the government stepped in:

There is the buying program financed by the central bank. A state pension fund has gone into equities for the first time. Beijing mandated that anyone holding 5% of a company can’t sell for six months. And brokerage firms, directed by regulators, are sitting on a boatload of shares as inventory, notes Erwin Sanft of Macquarie.

There’s also the government rule that stocks aren’t allowed to fall more than 10% in a day—at that threshold, trading in the stock must halt. This, of course, only adds sell-off pressure to the next day…. There are additional overt government interferences, but you get the idea. Associated with this, the markets stopped falling and rose quite a bit. And there’s the PRC buying for its government accounts shares of Chinese blue chip companies, ostensibly to prop up those share prices.

Monday, all that propping up came to a screeching halt. Those markets fell, in that single day, 8.5%, and the representative indices stand at just 5% above the pre-intervention low of three weeks ago.

All of that fall represents investors—at least the ordinary citizenry and those investors not directly under government control—leaving the PRC’s markets. At this pace, the only players left will be the government and its agencies and government run “private” institutions. And the government’s blue chip stock holdings.

That’s a centrally planned economy by another name.

Democrats and Unions

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Illinois’ Democrat-controlled legislature—both houses—passed a budget earlier this year that spent $4 billion more than it intended to collect in revenue: a $36 billion spending bill against a $32 billion revenue bill. Never mind the rank dishonesty of this—bankrupt Illinois has no hope of raising those $4 billion except by borrowing, and these Democrat legislaturists know that. They have no intention, then, of repaying the borrowing, and that’s the dishonesty.

But leave that aside for a moment, and consider the following.

Governor Bruce Rauner (R) vetoed the bill because of that deficit, so the State is operating without a budget. Nevertheless, Rauner said the State would keep paying its government employees; as AFSCME said in support of Rauner’s decision,

public service workers in state government are on the job despite the lack of a state budget…and they should be paid for their work on time and in full.

Well, not so fast. Illinois’ Democrat Attorney General Lisa Madigan (just by happenstance, she’s also the daughter of the State’s Democrat Speaker of the House, Michael Madigan, whose own father was a New Deal pusher), with the full backing of her Democrat legislaturists, went into Illinois’ courts to block payment for those same “public service workers.”

Strictly to make a political point for their own benefit, these legislaturist Democrats are trying to prevent their employees from being paid, and they’re using their (erstwhile?) union allies as speed cushions for their bus. The Democratic Party of Illinois is typical of the national Democratic Party.