Category Archives: political economy

Typical Arrogance of the “Experts”

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US District Judge Matthew Kacsmaryck, of the Northern District of Texas, has ruled that the FDA’s approval of the abortion drug mifepristone must be withdrawn and the drug pulled from the market while an existing court case makes its way through, and he made his ruling nation-wide.

The Court does not second-guess FDA’s decision-making lightly. But here, FDA acquiesced on its legitimate safety concerns—in violation of its statutory duty—based on plainly unsound reasoning and studies that did not support its conclusions[.]

No, no, no—leave our precious technocrats alone is the Leftist Lawyer cry. Only Government knows best. How dare anyone challenge Government’s experts. Areta Kupchyk, ex-FDA Associate Chief Counsel:

If the court does not defer to FDA, it would undermine FDA’s authority and set a precedent for second-guessing by judges wholly unqualified to evaluate scientific data[.]

This is the typical arrogance of Government “experts.” No one but these bureaucrats who hold one or another science degree are qualified to reign over the scientific world—and over us citizens.

No. It’s time Chevron Deference-style foolishness was done away with. It’s time our Article III courts acted like the coequal branch of our Federal government that they are instead of meekly bowing and subordinating themselves to junior agencies of a separate coequal branch.

That doing-away may finally be beginning.

NPR’s New Label

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Twitter has applied a US state-affiliated media label to National Public Radio‘s Twitter account. Twitter’s label defines such media as

outlets where the state exercises control over editorial content through financial resources, direct or indirect political pressures, and/or control over production and distribution[.]

What interests me, though, aside from the fact that there is a measure of affiliation just from the fact that the Federal government provides some funding to NPR, is the reaction to the label by NPR‘s CEO John Lansing in his statement—which he posted on Twitter:

NPR and our Member stations are supported by millions of listeners who depend on us for the independent, fact-based journalism we provide[.]

This is mostly irrelevant to whether NPR is state-affiliated. Voice of America, for instance, also is state-affiliated, and it provides fact-based journalism to the world—along with a strong measure of state-provided propaganda.

Mostly irrelevant: there’s this claim from NPR‘s Web site [emphasis in the original]:

Federal funding is essential to public radio’s service to the American public and its continuation is critical for both stations and program producers, including NPR.

And yet, just above that claim is this graph delineating NPR‘s funding sources as recently as its2020 fiscal year:

Plainly, NPR‘s support does come primarily from Lansing’s millions of listeners. Only 8%, plus a taste, of his funding comes from the Feds. That level may well be important, but it’s far from essential.

Lansing can’t even keep his stories consistent with each other. Which makes his objection even more irrelevant, both on substance and on the funding question.

Even so, that funding gives the Federal government that measure of influence over NPR‘s editorial decisions. And there’s the Federal government’s empirical use of its power to pressure Facebook’s Meta’s and pre-Trump Twitter’s editorial decisions. State-affiliated is warranted.

Sort of aside: it seems likely to this poor, dumb Texan that those State and local governments listed in the graph above, being much closer to Lansing’s millions of listeners than the Federal government, could well fill any shortfall were the Federal government to reduce or eliminate its funding share. That is, if the listeners resident in any of those more localized jurisdictions agreed that NPR was worth their tax money.

Update: As of 12 April, NPR has decided to no longer actively maintain its flagship @NPR Twitter account or any other official NPR accounts on Twitter over the site’s attaching the state-affiliated media label to its posts.

Buh by, luv ya, mean it. Watch out for that door closing behind you.

Ignore Them

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The People’s Republic of China’s latest weapon in its economic war against the West, and against the United States in particular, is to slow-walk merger approvals on anti-trust grounds when either party to the merger, or its result, does or would do business within the PRC.

As preconditions for approving some of the transactions, the people said, officials at the State Administration for Market Regulation, China’s antitrust regulator known as SAMR, have asked companies to make available in China products they sell in other countries—an attempt to counter the US’s increased export controls targeting China.
The Chinese demands could put US companies in an impossible position as Washington has enacted legislation restricting American companies’ ability to sell to China and expanding certain types of production there.

And this, especially [emphasis added]:

For multinationals, it doesn’t take much for a merger to trigger a Chinese antitrust review. For instance, if two companies in a deal have revenue of more than $117 million a year from China, the merger needs Beijing to sign off.

This is an easy enough conundrum to solve. The two companies, along with the merged result, could simply stop doing business within the PRC and with businesses domiciled within the PRC, rendering that nation’s slow-walk irrelevant from the PRC’s lack of standing to object.

Companies should already be stopping doing business inside the PRC or with businesses domiciled in the PRC, so a merger agreement that asserts “no business to be done in the PRC” seems completely straightforward.

It’s Everybody Else’s Fault

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That’s the claim of Treasury Secretary Janet Yellen, as described in Sunday’s Wall Street Journal editorial. The editors are correct as far as they go, but I do have a quibble and a more serious disagreement with some of the things they said.

First my quibble:

Yet here we are with major banks failing, and the government having to bail out uninsured depositors and offer lifelines to protect bank assets that are underwater.

No, the government most certainly did not have to “bail out” uninsured depositors or offer lifelines to other banks. The Biden administration, through Yellen, chose to do those things. By doing so, though, they set the ugly precedent of bailing out everyone else in all other banks without regard to whether those depositors are FDIC insured and without regard to the risks other banks may or may not be running, the Biden-Yellen blather to the contrary not withstanding. By doing so, Biden and Yellen have indemnified uninsured depositors and careless bankers from risk, laying that risk off onto us taxpayers instead.

My more serious disagreement:

The main culprit [regarding Silicon Valley Bank and the deposit runs at midsize banks] was duration risk from the failure to properly hedge against rising interest rates…. …. There’s no excuse for the examiners at the San Francisco Federal Reserve not to have acted on the problem as the West coast bank regulator.

Again, no. There’s certainly room to decry the failure of the SF Fed regulators to regulate, and those worthies should be terminated for cause over their negligence.

However, the first, proximate, and last responsibility for SVB’s failure and those other banks’ problems lies with the managers of those institutions. Interest rate risk, which underlies duration risk, is the risk taken when buying a debt instrument: when market interest rates rise, the debt instrument’s market price falls, and that reduces the value of the debt instruments already bought—for instance, the long Treasury bonds SVB’s managers had bought in satisfaction of its reserve requirements. Any first year economics student learns that, if he hadn’t already learned it in high school.

Duration risk, which matches long term debt assets with short term debt obligations (or not…) is something that same first-year economics student learns later in that same semester. And it’s something about which any first-year Finance student learns early in the first semester.

It was those managers’ decision to ignore those risks, or their careless laziness in not bothering to deal with those risks, or some combination of the two, that lay at the heart of the failure of the one and the problems of the others. The San Francisco Fed’s failure to act was only a (actually quite minor, given where the primary responsibility, and initiative, lies) contributing factor.

Taxing the Middle Class and Poor

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Arizona’s Progressive-Democrat Governor Katie Hobbs has vetoed a bill that would have barred cities and municipalities from taxing food purchases. Hobbs’ rationalization went like this:

The bill, originally unveiled as a way to mitigate inflation, does not take effect for more than two years. What’s more, it does nothing for the more than 800,000 Arizonans who use SNAP and WIC benefits for their groceries, as these constituents are already exempt from the tax.

Hobbs’ first beef might seem like a reasonable objection, and one easily corrected. However, it’s reasonable, also, to give those cities and municipalities whose budgets currently use those food taxes time to adjust their budgets.

Hobbs’ second beef, though, is just…silly. It wholly ignores those who aren’t on food stamps, the upper reaches of Arizona’s second income quintile, the third quintile, and into the fourth—the rest of the poor, and the middle class. And those Arizonans who are Evilly Rich and have more money than the Progressive-Democrats think they should have.

Just—pay up, suckers.