Category Archives: political economy

An Excellent Opportunity in the Offing

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The Bank of England is keeping its benchmark interest rates unchanged for the time being, and it says it’s changing the way it would change the way it reduces its holdings of government bonds at a time when gilt yields have risen to multidecade highs, including pausing auctions of those bonds until next year.

The BOE is doing this in part because gilt yields are at multidecade highs. Those highs also mean that the market prices for the gilts are at multidecade lows. Which creates the opportunity.

Instead of pausing its auctions, or perhaps in conjunction with them, the BOE might take advantage of those near historic low prices and buy back a passel (to use the technical term) of the gilts, particularly those with the longest time yet remaining to maturity, and retire them.

Of course, that would have its maximum effect only if the British government were to get its fiscal house in order and cut out its addiction to spending like there’s no tomorrow, which there won’t be if the government doesn’t. That, though, is another story.

A Faux Angst

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There is growing upset over the CDC having not yet opened its ordering process for States to order “their” supplies of Wuhan Virus vaccines for children.

It’s a falsely created upset. Leave aside the minor matter that it’s difficult to predict when the right time in the year is to administer a Covid booster shot, former CDC leaders said.

Reasonably healthy children, even sick ones with comorbidities extant, don’t need vaccine: between about six months old and pubescence, they are already immune to the virus. Before six months, their immune systems are not established, so the vaccine would do those babies no good, and it could be dangerous for them.

Here, though, is this, from Dr Demetre Daskalakis, formerly in charge of overseeing CDC’s immunization efforts:

Even if there’s a little delay, that’s creating a disparity[.]

It’s not fair. The angst has nothing to do with any actual need, only to do with equity. Some who don’t need the vaccine are getting it, so everyone who doesn’t need the vaccine should get it.

Another Brief Thought on Responsibility

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A WSJ Letters letter writer representing Share our Strength wrote to protest the paring back of Federal outlays to State SNAP programs. He had this early in his missive, and he was right:

We can agree that states should ensure eligible families get the proper benefits.

In the very next sentence, though, he had this contradiction:

But penalizing states without providing the resources to improve administration leaves more children hungry by pushing more parents away from SNAP.

The latter part of that may be true, but it’s not the Federal government’s responsibility to improve any State’s SNAP administration, nor is it the Federal government’s responsibility to provide resources for that improvement. Both of those requirements lie strictly and solely with the State involved.

And, using New York as his example, he offered this naked excusal for States’ failure to perform:

Honest mistakes can happen when overworked caseworkers using outdated technology to calculate benefits have to factor in a gig worker’s fluctuating income or a parent picking up occasional extra shifts.

If [New York] truly were serious about those error rates, it would satisfy its own (not the Federal government’s) responsibility and hire more (well-trained) caseworkers and upgrade the technology those caseworkers must use.

At bottom here is a State’s own decision regarding its own spending allocations. Nothing is stopping any State from changing what it chooses to fund and what set of Federal dollars it chooses to try to freeload off of.

All the Federal government can do, all it should do in our federal republic, is provide incentives to States to carry out their own responsibilities. Withholding financial transfers from States that choose to shirk their own responsibilities is a perfectly fine incentive, and one the Federal government should apply more broadly regarding money transfers to States.

The Price of Doing Business in the PRC

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Take Driscoll’s, a grower of fruit—blueberries in particular here—that chose to expand into the People’s Republic of China. Driscoll’s invested in the PRC in a big way, sending experts over to expose PRC farmers and consumers to blueberries, to help the farmers learn to grow them, and to set up Driscoll’s own growing facilities, based on a modern, technologically based hydroponics method.

The intellectual property underlying those techniques and Driscoll’s proprietary plants were bought under false pretenses, propagated, and spread across a plethora of PRC farmers for them to grow unlicensed blueberry bushes.

Even though PRC courts do often rule against domestic growers in many of the cases Driscoll’s, and others, have brought, the damage has been done, and it’s permanent. The intellectual property associated with the berries and with growing them has been stolen and cannot be given back. The proprietary berry plants have already been proliferated without licensing and cannot be eradicated.

Competing growers, both using stolen intellectual property and unlicensed plants and those using legally obtained technologies and plants, are heavily subsidized by the PRC government and by local governments. The artificially low prices resulting from those subsidies, driven even lower by that exploding competition, have begun crowding out foreign growers like Driscoll’s, even though the latter, in particular, still thinks it can successfully chase the chimera, now by growing off-season blueberries.

Until PRC growers start using inexpensive state-backed financing to scale up—and sometimes play fast-and-loose with intellectual property regulations in this off-season venue, too, to enter the game.

Count me entirely unsympathetic.

Other American businesses, large and small, need to take this lesson to heart. It’s a big world. There’s no need to do business with the PRC. Africa beckons. South America beckons. Non-PRC Asia beckons.

There’s Another Way, Also

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Environmental Protection Agency Administrator Lee Zeldin has submitted to Congress a number of California “climate” waivers for repeal under the Clean Air Act. This is a necessary step, and the Republicans in the House and Senate need to find the personal courage to take them up without delay and rescind them, an action that’s straightforwardly doable with simple majority votes in both houses and the President’s signature.

There’s another way, a parallel path, though, and it’s the responsibility of We the People and our businesses and enterprises.

One EPA waiver lets California mandate “zero emission” commercial vessels, including ferries and whale-watching boats. Another allows California to require that container ships and oil tankers docked at California ports plug into the state’s electrical grid or install technology to capture their emissions.

And

Another EPA permit lets California mandate that new lawn mowers, leaf blowers, chain saws, and other “small off-road engines” sold in the state must be electric.

And

[An EPA] waiver approved by the Obama team…allowed California to impose EV quotas through 2025.

It’s straightforward, also, for our private enterprises to adjust their supply chains and sales paradigms to avoid doing business in California altogether. These businesses need to do so promptly and broadly.