Category Archives: political economy

In Which I Agree with Obama

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…to a point.

Currently, many companies that do business with the Federal government can get Uncle Sugar to pick up as much as $763,000 of their executives’ pay—a cap that, in today’s world of the Evil Sequester, is going to go up to $950,000 at the start of the new fiscal year this October.  And it will be retroactive for all of the current fiscal year of 2012.  That’s your and my money going into a paycheck that companies in the private world cover entirely out of their own revenue flows.  President Barack Obama wants the cap lowered to $400,000.

I agree.  Cord Sterling, Vice President of the Aerospace Industries Association, does, too:

Arbitrary caps are not the best approach and do not account for competition among all hi-tech industries in the market for talent.

Indeed, and to that point: why are we taxpayers subsidizing any part of these guys’ pay?  This is a subsidy that needs to be eliminated altogether.

Some Just Can’t Be Helped

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California is on the verge of a new gold rush. Expanded hydraulic fracturing—or “fracking”—at the Monterey Shale formation is sparking estimates that 15 billion barrels of oil could be accessed, along with millions of jobs and huge contributions to the domestic energy supply.

Even the state’s green-friendly Democratic governor, Jerry Brown, says “the potential is extraordinary.”

But standing in the way is a flurry of anti-fracking bills.  At last count, 10 were on the table, all introduced by Democrats seeking tighter controls over the controversial technology.

Never mind that there’s nothing controversial about fracking, except in the minds of “journalists” looking to peddle their stories and in the minds of “environmentalists” who would rather trash our economy—and so our environment—than do anything serious vis-à-vis our environment, or our economy.

Indeed, as Tupper Hull, Vice President of Strategic Communications with the Western States Petroleum Association notes,

Why would you want to curtail energy production, with a technology that has proved to be safe, and (deny) the folks in the regions of the state where those benefits are going to accrue?  That just doesn’t make any sense[.]

Aside from the general stupidity of this, my concern is that when California goes bust, they’ll come a-runnin’, demanding help, trying to con the Federal government into bailing them out.  With the tax dollars paid by the citizens of functionally bankrupt Illinois, paid by the citizens of nearly bankrupt New York, paid by the citizens of fiscally responsible Texas, paid by the citizens of….

Government Regulations

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…state variety.

North Carolina is moving a bill along that would protect automobile franchisees in the state from competition.

Tesla says it is cutting out the middleman by allowing people to view different options in a showroom, but then ordering the car direct from the company online rather than buying from a salesman.  …lobbying groups say franchise dealers invest more locally and provide customer service that Tesla cannot.
…
The North Carolina law…prevents customers in the state from making electronic purchases directly through manufacturers….

The premises may or may not be true that franchise dealers invest more locally (probably true) or provide better customer service (possibly true), but these are business decisions, and performance in these two areas should be assessed by the buying public in a competitive market.  Government has no business regulating this; this law is solely to protect government-favored enterprises from competition.

Yet Another Thought on Taxes

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The Wall Street Journal has reported that

Apple, Inc paid no corporate income tax to any national government on tens of billions of dollars in overseas income over the past four years, Senate investigators found, a revelation that fuels the debate over whether the US tax code needs an overhaul.

The Senate thinks this is a bad thing, even as they acknowledge that Apple actually paid all the taxes it legally owed.  Senator John McCain (R, AZ), ranking Republican on the Senate Permanent Subcommittee on Investigations that hectored Apple’s CEO, Tim Cook, on that dastardly legal behavior earlier this week, gripes that

What they often leave out is the second part of the story, that Apple is one of the largest tax avoiders…Apple [is] the most egregious offender [among US corporations trying to avoid tax bills].

This despite the Subcommittee’s already completed investigations finding that Apple has, indeed, behaved entirely legally.  (Which makes me wonder, as an aside, whether McCain has outlived his usefulness and become just another RINO who needs to be terminated in his next primary.)  Regardless of any findings, though, in the finest Federal government tradition (can you say, “IRS,” boys and girls?), we’re going to hector and harass, anyway.  That was the point of haling Cook before the subcommittee to answer their inquisition.

This comes as part of a debate that the

US is undergoing…about the earnings that US companies are keeping overseas.  The profit at foreign subsidiaries are out of the reach of the IRS, and largely unusable to their US operations.

The sums amount to an estimated $1.9 trillion, according to an analysis by Audit Analytics….

However, instead of thinking about how to get their grubby mitts on all that money—which they then can dole out to select groups in return for votes and political power—these politicians should think about how much good that money would do in terms of jobs and innovation (and so more jobs) and lower product costs (and so more demand and so more jobs) were that money allowed to come home by an intelligent tax régime that would contain rates that encouraged rather than prevented repatriation of the money.

But thinking about that would require these politicians to “ask not what they can do for themselves, ask what they can do for their country.”

Obamacare Fail

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…again.

Employers are increasingly recognizing they may be able to avoid certain penalties under the federal health law by offering very limited plans that can lack key benefits such as hospital coverage.

Benefits advisers and insurance brokers—bucking a commonly held expectation that the law would broadly enrich benefits—are pitching these low-benefit plans around the country.

This, of course, is backwards.  The coverages here should be paid out of pocket.  The better policy would cover only catastrophic events—like hospitalization.

Then there’s this:

[E]mployers and benefits experts have understood the rules to require robust insurance, covering a list of “essential” benefits such as mental-health services and a high percentage of workers’ overall costs….

But a close reading of the rules makes it clear that those mandates affect only plans sponsored by insurers that are sold to small businesses and individuals, federal officials confirm.

The money-saving bare bones policies are only available to large companies.  The jobs producers remain stuck with the expensive, overwrought mandated policies that they cannot afford.  Nor can they afford the penalties Obamacare exacts for not affording them.

And this from Kansas Insurance Department Special Counsel Linda Sheppard:

The whole idea is to get healthy people in and not-so-healthy people in.

Never mind that healthy people don’t need to be in, since they don’t need the coverage, and so they shouldn’t be being forced in.