Category Archives: political economy

A Good Start

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President Donald Trump (R) has signed an Executive Order that sets up a mechanism for the US to mine and harvest minerals and metals from the ocean floor under international waters. It’s for more than just international waters, but this is the part of importance to me.

Environmentalists and legalists don’t like it, the former because they don’t want the pristine sea floors disturbed at all. It seems unimportant to them that the metals and minerals are critical to our nation’s economy and our defense establishment and that without them, we’d be unable to provide any sort of environment within which environmentalists could environmental.

The latter don’t like it because there’s no international law that regulates or even permits such mining. It’s apparently lost on these that the lack of regulation or permission means that the mining and harvesting is entirely legitimate to do.

At least one mining enterprise, The Metals Co, a Canadian firm that’s still interested in doing business with the US, has said that given the EO and a 40-ish year old American law, the Deep Sea Hard Mineral Resources Act, it can start mining in a year or so.

Given that, the first mines should be set up in the Gulf of America, and done so promptly. The second mines should be set up in the South China Sea, and done so just as promptly.

Merit-Based to Depoliticize

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The Trump administration is moving to consolidate Federal employment/termination decisions in the OMB and out of the several separate Departments and agencies.

[DOGE personnel embedded in OMB began issuing] orders that have weakened other agencies’ control over their own workforce, in many cases bringing hiring, firing, and performance evaluation—which for some employees, will soon be based primarily on execution of the president’s agenda—under the purview of OPM.

Previously,

Most of the government is made up of mid- and low-level civil servants whose jobs have historically been sheltered from political hiring decisions.

That’s the problem that badly wants fixing.

Government hiring and firing, at any level of government, needs to be politicized to an extent in order to maximize the likelihood that government employees work to carry out the policies of the incumbent President, Department Secretaries, and agency heads. This does not require a return to full-up patronage, but it does require that what constitutes an assessment of merit include how hard and how effectively that employee works to execute those policies and how well a prospective employee can be expected to do so.

A Useful Self-Identification

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The People’s Republic of China has decided not to apply its across-the-board 125% tariffs on certain goods that it imports from the US.

China’s government has exempted some US imports that the country would struggle to immediately source from elsewhere from its retaliatory tariffs, people familiar with the matter said.
Chinese authorities have told some importers of American goods that they would waive the most recent 125% increases in tariff rates for certain US imports. Those products include certain semiconductors and chipmaking equipment, medical products, and aviation parts, the people said.

These, then, are precisely the goods that we should cut off from exporting to the PRC.

On the other hand,

The Trump administration, similarly, announced exemptions on its “reciprocal tariffs” for China-made smartphones, laptops, and other electronics earlier this month, a recognition of the US’s reliance on China for such goods.

This is a mistake if the purpose is anything other than a negotiating tactic. There is a critical difference between the two sets of goods. The goods the PRC is exempting are critical components and component-making goods whose cutoff would severely impact that nation’s ability to make downstream products. The goods the Trump administration is exempting are finished products. Their supply chains can be adjusted to flow from non-PRC sources, including domestic, an adjustment that might be difficult, but an adjustment that both is eminently possible and is absolutely necessary: we should never have ourselves dependent on an enemy nation for such goods.

What’s Missing?

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A Wall Street Journal news writer wrote about the accumulation of additional wealth by the already wealthiest in the United States.

New data suggest $1 trillion of wealth was created for the 19 richest American households alone in 2024. …
It took four decades for the top 0.00001% of Americans share of total US household wealth to grow from 0.1% in 1982—when 11 households made up that rarefied group—to 1.2% in 2023, according to an analysis by Gabriel Zucman, an economist at the University of California, Berkeley and the Paris School of Economics.

What’s missing is any discussion of economic mobility, which always has been at the center of our nation’s economic development and overall wealth increase. Who are these households, and who were they?

Those in Zucman’s research on the top 0.00001% in the US are worth at least $45 billion per household and include Elon Musk, Jeff Bezos, Mark Zuckerberg, Bill Gates, Warren Buffett, and private-equity investor Stephen Schwarzman.

All of these, with the possible exception of Buffett, are Johnny-come-latelies to this tier—that’s upward mobility, and part of that eight household increase.

JPMorgan Chase’s private bank estimates US billionaires numbered nearly 2,000 last year, up from about 1,400 in 2021, when it began tracking billionaires. Wealth-data firm Altrata, meanwhile, estimates the figure at 1,050 billionaires in 2023, the most recent year for which it has data, up from 975 in 2021.

There’s a hint there. General wealth is increasing and individual folks and households move up the economic ladder. With mathematical certainty, others move down: even with a growing population—and ours is only barely growing—0.00001%, 0.01%, 50% of our population are finite numbers, and while more are rising than falling, some still must be moving down.

That’s economic mobility. And this: even as wealth is getting concentrated, it’s getting concentrated in an ever-increasing number of households.

It’s good to be rich. It’s even better to live in a free market economy where any of us can get there. After all, it’s not the concentration of wealth that matters so much, it’s the ability of any of us to accumulate that wealth and move up the economic ladder in the first place that’s important.

Americans’ Intellectual Property at Risk

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And that risk stems from President Donald Trump’s (R) alleged trade wars according to Daniel Gervais, a Vanderbilt professor and Director of Vanderbilt’s Intellectual Property Program, who should know better. In his letter to The Wall Street Journal‘s Tuesday Letters section, he wrote

The US is turning its back on the multilateral trading system it helped create after World War II, threatening Americans’ intellectual property…. Embodied by institutions such as the World Trade Organization (WTO), this system has provided stability through clear trade rules and dispute-settlement mechanisms….

And

The most important set of international rules protecting IP rights is the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights, or Trips. The agreement obligates member countries to provide IP rights, with limited exceptions, and enforce them at their borders and in national courts.

What Gervais ignored is that it is the PRC that’s been busily blowing up the global trading system ever since its accession to the WTO. Politically, the PRC ignores WTO rulings it doesn’t like, including one regarding its seizure and militarization of South Sea islands that belong to other nations and not the PRC. Specific to that ruling, the PRC is ignoring the Republic of Philippines’ ownership of—not mere responsibility for—the islands in its EEC.

Regarding intellectual property, Gervais also ignored the PRC’s assault on other nations’—particularly the US’—intellectual property and proprietary technologies. The PRC has long had (for all that the current regime recently has begun paying lip service to limiting) requirements that foreign companies partner with PRC-domiciled companies and agree to intellectual property and proprietary technology transfers that comport with PRC-mandated requirements at zero compensation beyond the privilege of doing business. These requirements go far beyond the WTO’s minimalist transfers with compensation for the transferring company.

Gervais also ignored the PRC’s long standing and extremely extensive intellectual property and technology thefts through corporate espionage.

It’s not the current administration that’s turning its back on the multilateral trading system and the WTO, it’s the PRC with its long-extant studied efforts to destroy them.