Category Archives: Economics

Miscellaneous economy stuff

Missed in the Discussion?

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The People’s Republic of China has a “national team” of investors who work at the government’s behest to maintain a measure of stability in the PRC’s stock market.

The group is known by market players as the “national team,” and it functions as a market stabilization fund. It has been a fixture in the Chinese stock market for more than a decade, usually buying exchange-traded funds, and was widely noted when it intervened to prop up prices during a 2015 crash. After Trump announced his “liberation day” tariffs in April 2025, triggering a global stock selloff, the national team stepped in to relieve the pain as a buyer of index funds.

On the other hand,

The CSI 300 benchmark, which tracks shares listed in both Shanghai and Shenzhen, has risen more than 20% over the past year, despite the April dip. Last month, trading volume across mainland Chinese stock exchanges reached a record high.
…
“Substantial yet well-paced selling by the national team is curbing—but not killing—the positive market momentum,” analysts at Morgan Stanley said in a note earlier this month.

Maybe this is the government doing a slow pump-and-dump, which is one way to make money (not legally in most western nations), maybe not. In any event, it’s also textbook investing: buy low and sell high. Either way, this is making a lot of money for the PRC government, which in turn provides serious money for subsidizing its cost of goods production and for offsetting the effects of foreign (mostly US) tariffs on PRC exports. More the former, most likely, since the PRC has been able to increase its exports to Europe and South America, to their economic dependency peril.

“Shouldn’t We Care?”

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A MarketWatch op-ed writer is worried about grown, adult American citizens having more retirement funds in our IRAs than in our 401(k)s.

The shift from 401(k)s to IRAs moves employees’ money to a different regulatory environment. The Employee Retirement Income Security Act of 1974, which covers 401(k) plans, requires plan sponsors to operate as fiduciaries who always act in the best interest of plan participants.
In contrast, the standards of conduct for broker-dealers selling IRA investments are much less protective than the ERISA fiduciary duties of loyalty and prudence, which have consistently been characterized by the courts as “the highest known to the law.”
In addition, in the 401(k) environment, much greater emphasis is placed on the disclosure of fees in an understandable format than is the case for IRAs. And most important, 401(k)s place much more emphasis than IRAs on keeping the funds in the plan until retirement.

Those are, no doubt, useful items and anyone investing for his own retirement should care about them. The problem arises, though, when the system—here employer 401(k)s—uses these to interfere with an employee-investor’s decisions regarding what is supposed to be his own money.

As the opinion writer notes in her piece, withdrawals from either program that are made prematurely or outside of a very few exceptions (there are fewer in 401(k)s than in IRAs), are subject to a 10% tax penalty in addition to Federal and State income tax assessments. Those guardrails and limits are well-known to us Americans, and they’re all we need to make our own decisions regarding our money. If our decisions are ill-informed, that’s on us, or should be.

The opinion-writer closed her piece closed with this:

Shouldn’t we care that only 45% of assets in the private sector are protected by ERISA? And what should we do about it?

No, we should not care. We do not need Big Brother constantly looking over our shoulders, constantly using that perch to interfere with our decisions.

Americans are too dumb to manage our own fiscal affairs? One way to try to push that on us is to keep interfering with our decisions instead of letting us make our own mistakes and—critically importantly—learn from them.

That leads into what we should do about it. TL;DR: nothing. Complete answer: nothing at all. Stay out of our way.

A Couple of Regulatory Environments

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These need to be dealt with along with the EPA’s effort to deregulate energy production. “These” are the FAA’s regulation of rocket launches—the conservative right blames the FAA’s climate impact concerns, but those are not the only ones—and the FCC’s regulation of satellite deployment. Here, Progressive-Democrats are letting their hatred of all things Evil Rich get in the way of intelligent decision making.

The Federal Aviation Administration separately evaluates the environmental impact of rocket launches in the US, which has in the past delayed satellite launches.

And

Maria Cantwell objected because the bill [that would streamline and accelerate FCC satellite approvals] would help Mr Musk’s AI space ambition.

As The Wall Street Journal‘s editors closed their piece,

Permitting difficulties are America’s economic Achilles’ heel. Let’s hope they don’t get in the way of US space innovation.

Reapportionment

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There is a flurry of domestic migration from Blue States to other States, usually Red. That could prove costly to the Blue States’ representation in the US House of Representatives.

The left-leaning Brennan Center has taken a look at the Census and finds Democratic-controlled states are likely to lose at least 10 House seats.
If recent trends in population growth and migration continue, the Brennan Center projects that Texas would gain four seats, Florida three, and Georgia, Arizona, Utah, North Carolina, and Idaho one each in the reapportionment after the 2030 Census. California would lose four, and New York two. Oregon, Minnesota, Wisconsin, Illinois, Pennsylvania, and Rhode Island would give up one apiece.
This would give Southern states 164 House seats, which is 19 more than in the 2000s. The Northeast would have 81 seats, down from 92.

That representation reallocation isn’t all. That’s also a shift of Electoral College votes from Blue States to Red to the tune of 30 votes shifting right.

Which is why the Progressive-Democrats are so shrilly against requiring US citizenship as a criterion for voting in Federal elections, requiring proof of US citizenship in order to get a ballot for Federal elections, and—especially—against excluding non-citizens present in their States from the census count that’s used for apportionment. It’s also why Progressive-Democrats so shrilly push for open US borders and welcoming all comers, including illegal aliens, into their jurisdictions. If they succeed in keeping non-citizens in the apportionment count and blocking Voter ID, that would strongly favor apportionment toward them, even with the ongoing domestic outmigration from those States.

Progressive-Democrats are more interested in their political power than they are in free and fair elections.

Electricity Price Controls

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New Jersey’s newly elected Progressive-Democratic Governor, Mikie Sherrill wants them.

Ms Sherrill used her maiden speech to lay out her plans to ease electric rates. “In short, you are sick of the status quo,” she said, “Well, guess what, guys, so am I.” Guess what: Her proposals are more of the same progressive policies that have fueled higher prices: Subsidies, mandates, and price controls.

Especially those price controls.

Her worst idea is a pause on utility “rate increases or cost recoveries to the extent permitted by law.” This is a price control that will reduce grid investment, including in new supply. ….
If utilities can’t pass on their costs, they will skimp on maintenance. It’s that simple.

Of course, those rate increases or cost recoveries permissions are specified by State laws, and Sherrill and her legislature can alter those laws at will. Her “extent permitted” is disingenuous.

Maintenance skimping is well-known to renters in rent-controlled apartments.

If the provider—landlord or utility (or any other)—can’t recoup his costs as those increase, whether they’re supply costs, regulatory compliance costs, or taxes, he has less money to spend on procuring the items he needs to produce electricity or rental housing or… and especially critically, he has less to spend on simply maintaining what he has. Rental homes/apartments and power generators deteriorate, those residences become badly substandard to the point of uninhabitable, and power generation becomes unreliable. That last is bad in a hot summer, and it’s deadly in a cold winter.

With unreliable power generation, we get rolling blackouts where broad areas in succession see the lights go out; oil, natural gas, and coal generators, all of which depend at bottom on electricity, stop; and electric heating (or cooling) systems stop. On-off cycling from those rolling blackouts, even if in longer intervals than shorter, adds to the wear and tear on the generators, and on the heating and cooling systems, requiring increased maintenance for which those price controls, and rent controls, severely limit the money available to pay.

But never mind. Progressive-Democrats want those price controls because that’s their exercise of political power.