Whose Inheritance Is It?

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A son wrote to The Moneyist, worried that because he makes so much more than his siblings and freely lives like it he’ll be cut out of his parents’ will. He closed his letter with this paragraph, and Quentin Fottrell seems to have made a meal out the distraction contained in it, instead of giving the short and sweet answer that the question needed.

My siblings don’t make nearly as much as me. They’d say I’m crass or rude for saying that. I’m concerned that my parents are going to strike me from any will/inheritance. If siblings earn different amounts, should that be the primary driver for how much they should get?

Fottrell opened with most of the right answer.

Your parents can divide their estate as they see fit.

Unfortunately, he went on to talk about siblings being differentially poorly- (or well-) off, and so the lesser well-off can receive a larger slice of their parents’ pie. He then proceeded to suggest, over several paragraphs, that the letter-writer’s arrogance and self-importance could well play a role in any parental inheritance decision. Never mind that Fottrell had no evidence in the letter that that played a role, although the letter-writer seems to have made no effort to hide his financial success under a bushel.

Fottrell would have done well to end his response with that opening sentence. He would have done better to add this short bit to that opening: the estate, the inheritance, is the parents’ money and assets and no one else’s. It’s their property to do with as they see fit, and no one else has any claim on it, whether child, parental sibling, or stranger. Parents have no intrinsic duty to leave their money, their assets, to anyone in particular, and they can leave it to no one at all and let the State sort it out.

Full stop.

Weasel Words

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The People’s Republic of China’s governing claque of men and women are engaging in them. Again. Or still. This is The Wall Street Journal‘s lede:

China will loosen its export restrictions on semiconductors made by Nexperia, its Commerce Ministry said….

However.

China will allow exports of Nexperia chips for eligible cases, the Commerce Ministry said Saturday, without specifying the criteria.

Meaning, I fearlessly predict, that Nexperia’s exports from the PRC will be slow-walked, blocked, and otherwise interfered with for the foreseeable future. Just as with any other non-PRC company doing semiconductor business from inside the PRC. Lacking export criteria, the PRC has left itself wiggle room for blue whale pods in which to employ those weasel words. The PRC’s Commerce Ministry also made no mention at all regarding loosening export restrictions on rare earth magnets or rare earth ore.

Nexperia—and everyone else outside of the PRC—would do well to move their raw material production, assembly, and manufacturing facilities—all of them, not just those related to rare earths—entirely outside of the PRC.

Immorality

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The men and women of the People’s Republic of China government, led overwhelmingly by President Xi Jinping, are behaving in an utterly immoral fashion when it comes to lethal, illegal drugs and the precursors for manufacturing them.

Those men and women have been continually welching on the agreements they pretend to make to curb fentanyl and fentanyl precursors exports.

Even when Beijing toughens regulations on individual precursors, as it has done several times in recent years, including this summer, Chinese producers can get around the rules by slightly altering the chemical structure of their products.

This bit saucers and blows it.

China calibrates its cooperation on counternarcotics in response to the overall US relationship, said Vanda Felbab-Brown, a counternarcotics expert at the Brookings Institution.

That’s a polite way of saying that the PRC’s government men and women will continue to poison our children unless and until we kowtow to their demands.

Or maybe Xi and his syndicate simply are amoral, with no concept of what’s right or wrong or the differences between the two—only naked power for themselves, nationally, and egoistically globally.

This, more than any military or cyber superiority, is what makes the PRC exceedingly dangerous.

Wrong Answer

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Senator Bill Hagerty (R, TN) and Treasury Scott Bessent disagree with The Wall Street Journal‘s editorial How to Make Banks Less Safe, an editorial with which I also disagreed. However, Hagerty and Bessent are wrong in their proposed solution.

They insist that the recent intermediate-sized bank “failures” (my euphemism quotes) stemmed from an intrinsic imbalance in protection for banks.

What explained the flight? A competitive imbalance: the biggest banks benefit from a perceived government guarantee that smaller institutions lack.

That protection imbalance is the Dodd-Frank entrench[ment of] the biggest banks as “too big to fail,” as Hagerty and Bessent correctly identified. Their solution is wrong, though.

…fortify our community banks against existential headwinds by raising the Federal Deposit Insurance Corp. limit. This would put community banks on a more even playing field with their larger competitors, and provide small businesses more certainty to maintain their payroll and other operating accounts with community banks in times of stress.

The correct answer is to take the “too big to fail” protection away from the allegedly systemically important banks and put them on the level of play on which their smaller competitors operate. There is no such thing as too big to fail in a competitive free market. Instead, hold all banks, regardless of size, to the quality of their management teams and those teams’ risk decisions. Do this further in large part by leaving the FDIC’s insurance cap at $250,000. The big players using the big banks will do a better job of moving among banks that are better led than others.

The market, which is individuals, small business, and international behemoths, will in its aggregate do a far better job of identifying well- and poorly-run banks, and imposing performance discipline on all of them, than can any government decision-making, which by design, is rife with political input rather than limited to economic input.

Silliness

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President Donald Trump (R) has directed DoD to begin nuclear weapons testing. It’s unclear, at this point, whether he wants to test the existing arsenal or test delivery systems under development or to be developed.

Rhode Island’s Progressive-Democratic Senator Jack Reed has the present installment of silliness, as paraphrased by The Wall Street Journal.

[B]reaking the testing moratorium would prompt Moscow and Beijing to restart full-fledged testing.
US nuclear testing, he added, would also provide justification for Pakistan, India, and North Korea, which last tested in 2017, “to expand their own testing regimes, destabilizing an already fragile global nonproliferation architecture.”

Russia already is in the early stages of full-fledged testing, as evidenced by Russian President Vladimir Putin’s bragging about his new nuclear hypersonic missiles, nuclear-powered nuclear-armed cruise missiles, and nuclear-armed torpedoes. The People’s Republic of China is expanding its own nuclear arsenal as fast as it can; such expansion doesn’t occur without testing.

Pakistan, India, northern Korea? The last has shown no restraint in testing nuclear missiles; it’s not even bound by the Nuclear Nonproliferation Treaty. Baby Kim’s only reason for pausing is his publicly stated decision to focus on parallel development of his conventional forces. Pakistan and India have nuclear arsenals aimed at each other, and India faces a nuclear-armed and threatening enemy in the PRC. Neither Pakistan nor India are members of the NPT. There should be no doubt they’ll engage in testing as they develop their arsenals.