Category Archives: Economics

Miscellaneous economy stuff

Gina “Joe” McCarthy

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…is at it again. Operating carefully in the proverbial dead of night, burying its new rule in the 80,000 page Federal Register and unadorned by any other announcement,

The Environmental Protection Agency has quietly floated a rule claiming authority to bypass the courts and unilaterally garnish paychecks of those accused of violating its rules….

The EPA also has fast-tracked passage of this rule in an effort to get it into effect before anyone knows it’s there. Until it’s applied. The EPA has justified the fast-tracking by claiming, with an absolutely straight face, that this isn’t a “significant regulatory action.”

On top of that, Gina “Joe” doesn’t feel any need to explain herself.

EPA officials did not respond to repeated questions by The Washington Times about why they thought it was necessary to garnish people’s wages.

The explanation she’s reluctant to say out loud, though, clearly is, “Courts? We don’t need no courts! I don’t have to take you into any stinkin’ courts!”

A Thought on a European Polity

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I wrote about this a bit ago. Daniel Hannan, Conservative Party MEP for South East England, has a more recent thought.

Churchill [as early as 1946] makes clear that this United States of Europe should not include Britain:

There is already a natural grouping in the Western Hemisphere. We British have our own Commonwealth of Nations. Why should there not be a European group which could give a sense of enlarged patriotism and common citizenship to the distracted peoples of this turbulent and mighty continent and why should it not take its rightful place with other great groupings in shaping the destinies of men?

In case anyone had missed the point, Churchill ended with a call for Britain and the Commonwealth, along with the United States and perhaps even Russia, to “be the friends and sponsors of the new Europe, and champion its right to live and shine”.

Hannan and a number of his fellow Center-Right MEPs are working out the details of a new proposal to achieve that:

a European Common Market—a lightly but effectively regulated free trade area, stretching from Iceland and the Faroe Islands to Turkey and Armenia—within which a smaller group of states could form a political union without prejudice to the non-participants.

At this point, it’s a long shot, but today is different from 1946. There’s a better chance. I say good luck to Hannan and his fellows.

Another Thought on Immigration

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Gordon Crovitz, in a recent Wall Street Journal op-ed, pointed out some statistics.

The Congressional Budget Office last year estimated that legalizing the 11 million undocumented immigrants would boost federal revenues by $48 billion over 10 years while costing $23 billion in public services. Adding more skilled workers would bring in $100 billion over a decade, mostly from increased income taxes.

In addition to this, I add (and reiterate) immigrants start more businesses than Americans who’ve been here for two or three or more generations. Those businesses employ people, and more so than “just” immediate family members.

There’s also the demographic question: the Unites States has only just returned to a birth rate that even barely replaces our death rate. We need immigration for continued population growth; we don’t want to face the population implosion risk from aging that Russia, the People’s Republic of China, the Federal Republic of Germany, France, and lots of other nations are facing. When Social Security was enacted, there were seven workers to contribute to the SS payments for every retiree, and that retiree had a retired life expectancy of some five to seven years. Today there are three workers per retiree, and that retiree has a retired life expectancy of nearly fifteen years. If we don’t intend to change the structure of Social Security, we need immigration.

Friday’s Jobs Report

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…which came on a Thursday last week…. Some tidbits from the BLS, behind the headline number, the unemployment rate of (now) 6.1%.

The number of unemployed persons decreased by 325,000 to 9.5 million.

That’s a couple million and four or five years late, but still: cool. Who is it, though, who’s newly employed now?

  • The number of long-term unemployed (those jobless for 27 weeks or more), while declining by 293,000 in June, is still 3.1 million
  • The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) increased by 275,000 in June to 7.5 million.
  • 2.0 million persons still are only marginally attached to the labor force, even though this is down by 554,000 from a year earlier. … These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.
  • Among the marginally attached, there still were 676,000 discouraged workers in June; although this is a decrease of 351,000 from a year earlier. … Discouraged workers are persons not currently looking for work because they believe no jobs are available for them.
  • The number of people employed full-time (according to the household survey that also counts self-employed) declined by 523,000, while the number of part-time workers increased by 799,000 [see the various tables available at the above link for these two aggregated data]

Hmm….

Contradictions of the Export-Import Bank

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The Export-Import Bank is a hoary, old financial institution with the purpose of facilitating American exports by providing financing or guaranteeing loans for cross-border transactions in which the private sector declines to participate.

There’s a hint there.

It may be that such government involvement might have done some good in the bad, old days before widespread free trade agreements. It may be, too, that tariffs were a good idea a long time ago. Or maybe not.

Free trade agreements signed since those days have facilitated lower prices, more freely moving “factors”—economist-speak for the goods that companies take in and process into goods that they then sell—and more freely moving labor.

Free trade agreements, in this way, have resulted in a broader range of goods for American consumers and American companies and have produced them at lower prices than heretofore.

The hint is this: if no one in the private sector wants a part of a deal, it’s likely to be a waste of taxpayer money for the Ex-Im Bank to get involved.

Some supporters of the function of an Ex-Im, if not of the bank itself, mention as William Galston did in a recent Wall Street Journal op-ed that

Ex-Im supported the exports of more than 3,400 small businesses that probably could not have obtained commercial financing, for reasons unrelated to the creditworthiness of the prospective borrowers or to the quality of their proposed transactions.

There is, however, nothing stopping those small businesses from forming their own private-enterprise association to support each other with such needed financing.

Galston cited other supporters who see the aircraft industry as an industry desperately needing the Ex-Im Bank [emphasis added].

[T]he manufacture and sale of commercial aircraft is far from a free market. Boeing’s major competitor—Airbus—receives massive export subsidies from a European consortium. In the best case, Europe and the US would negotiate the mutual elimination of subsidies. But until that happens, say Ex-Im’s supporters, it would be self-destructive for the US to stand down unilaterally.

These supporters, apparently, think this is another area where the US should lead from behind.

No, let the Ex-Im’s authorization expire, say I.