Category Archives: political economy

Medicare-for-All and Middle Class Taxes

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Even Stephen Colbert wants to know: under Progressive-Democratic Party Presidential candidate and Senator Elizabeth Warren’s (D, MA) payment scheme for her Medicare-for-All scheme, will middle class Americans’ taxes go up? He put the question to her in so many words:

You keep being asked in the debates how are you going to pay for it, are you going to be raising the middle-class taxes…. How are you going to pay for it? Are you going to be raising the middle-class taxes?

Warren’s answer:

So, here’s how we’re going to do this. Costs are going to go up for the wealthiest Americans, for big corporations…. and hard-working middle-class families are going to see their costs going down.

Colbert tried again:

But will their taxes go up?

Warren evaded again:

Health care is a basic human right. We fight for basic human rights, and that’s Medicare-for-all.

The plain and simple meaning of Warren’s evasive answers is yes, middle class taxes will go up as part of her payment scheme. Their taxes will go up a lot.

EU Version of Brexit

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EU Commission President Jean-Claude Juncker says that the risk of a no-deal Brexit is very real.  He also says he told British Prime Minister Boris Johnson

…I have no emotional attachment to the backstop.  But I made clear that I do have an intimate connection to its commitments. I have asked the prime minister to make, in writing, alternatives.

The commitment of the backstop, the open border between Northern Ireland and the Republic of Ireland, which violates a central premise of the vote to leave the EU—British control of British borders—still amounts to a backdoor to partitioning Great Britain. Keep in mind that one of the EU’s early offers on this backstop was that Great Britain could put its hard border on the Irish Sea coast—an offer quickly deleted when its purpose was recognized as too obviously presented.

On top of that, Juncker has shown his unseriousness in these “negotiations” with his demand that Great Britain offer all the alternatives. Juncker has no need, apparently, to stoop so low as to offer his own.

Indeed, led by chief negotiator Michel Barnier,

EU negotiators say that he [Johnson] is yet to offer a viable replacement solution.

Because if they offered their own solution, and Great Britain accepted it, then Juncker and his court would have actually to say, “Yes,” finally.

It’s hard to see how negotiations can get more bad faith than this.  Juncker is like an emperor on the throne awaiting the pleas of his supplicant.

Continued Intransigence

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European Commission President Jean-Claude Juncker makes it clear.

Britain has still not proposed any workable alternatives to the Northern Ireland “backstop” within the Brexit withdrawal agreement, the EU said on Monday.

And

President Juncker underlined the commission’s continued willingness and openness to examine whether such proposals meet the objectives of the backstop. Such proposals have not yet been made[.]

Juncker knows full well that the “backstop” is not just a deal-breaker, it’s a non-starter for the British. It demands that a core feature of the Brexit vote three years ago was so that Great Britain gets control of its own borders back, yet the “backstop” requires Great Britain to surrender its Irish border to the EU.  That can only be taken as a first step to dismantling Great Britain.

What demonstrates the cynicism of the EU and of Juncker is that they, and he, have steadfastly refused even to offer their own “workable alternatives.”  It’s the EU’s backstop.  Full stop.

In place of counter-offers, Juncker is offering only vapid, uselessly rhetorical pretense and empty willingness to “discuss the next steps.”

He plainly wants Great Britain to drop its Brexit plans and meekly beg for forgiveness for its effrontery. Despicably, so do Labour and too many so-called Tories.

A UAW Strike

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The United Autoworkers Union sent 49,000 members and employees of GM out the door and on strike Sunday night.  The strike will hammer GM plants in Michigan, Ohio, Tennessee, Kentucky, New York, and Texas among other areas.

Here is another case of a union saying it won’t let a business operate at all, unless and until that business’ managers surrender completely and give the union everything it wants.

Strikes are legalized extortion and a refusal to negotiate in good faith.  It’s impossible to reach an honest deal with a gun in management’s ear.

Oil Strikes and our Economy

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“Economists” cited by The Wall Street Journal say that the Iranian/Houthi strikes against a couple of major Saudi Arabian oil production facilities are unlikely to do much to our economy. Despite their anonymity, those…sources’…assessment is accurate.

Among other things, we’ve made ourselves essentially self-sufficient in oil and natural gas production, have become the world’s leading producer, and we’re a net exporter of oil and natural gas.  That last, especially, means we’ll easily be able fill any shortfall from the Saudis’ damage.  (Production cuts from that damage are likely to be short-lived in any event.)

In addition,

Today, energy accounts for about 2.5% of household consumption, down from around 8% in the 1970s

The Federal Reserve still has its misconception regarding the proper execution of its role, though:

The Saudi oil-field attack adds a new factor to consider for Federal Reserve officials, who have been weighing how a variety of geopolitical risks will influence the economic outlook, including the US-China trade war, unrest in Hong Kong, and Britain’s impending departure from the European Union.

Those things are irrelevant to the Fed’s task, which is to maintain stable pricing and full employment. The optimal way to achieve this is simply to set its benchmark interest rates at levels consistent with its inflation rate goal, and then—rather than chasing market responses to this or that “geopolitical risk,” or trying to anticipate and preempt them—sit down and be quiet.  The resulting sound economy will produce full employment.

The Fed’s inconstancy is a bigger problem for our economy than hits, even major ones, on another nation’s energy production capability.

On the other hand, the People’s Republic of China burns through three times the oil that it produces; it badly needs oil imports, much of which it got from Saudi Arabia.

Japan imports nearly all of the oil and natural gas that it consumes.  That’s a shortfall we easily can, and should, fill.