Tag Archives: economics

Another CFPB Overreach

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Now it’s preparing to force banks to make whole those their customers who are conned by money-transfer service scams, regardless of whether the bank had anything to do with the scam.

Bank customers no longer should be responsible for their own decisions, even their foolish ones. We average Americans, holds the CFPB and its MFWIC, Rohit Chopra, are just too grindingly stupid to be responsible for ourselves.

Currently, banks must repay customers for charges they did not authorize. Chopra and his CFPB want banks, in addition, to have to refund these third-party transfers, done on the banks’ systems, if the customer authorizes the transaction and later changes his mind and cries foul. Customers are no longer expected to do their own due diligence regarding their money. That’s too much responsibility, you see.

This is one more reason this creature of Elizabeth Warren, this Consumer Financial Protection Bureau, needs to be disbanded, the law creating it wholly rescinded, and metaphorical salt poured on the pages of the Code of Laws of the United States of America, our USC, and the child pages in our Code of Federal Regulations, our CFR, that contained it.

In a Nutshell

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In a Wall Street Journal article on the rising price of natural gas resulting from the current spate of hot weather, there’s this regarding the broader role of natural gas prices in inflation.

Pricier natural gas adds not just to the cost of dialing down the thermostat but also to that for making fertilizer, steel, cement, plastic, and glass.

And, through that fertilizer price increase, the cost of food—directly in the cost of wheat-, corn-, soya bean-based foodstuffs, and indirectly in the cost of beef, chicken, and other meat animals that are fed these plants.

And, through corn’s role in ethanol production, the cost of fuel.

Which is pretty much the full reach of our economy.

The inflation resulting from limits on natural gas production also results from similar limits on oil and coal production.

But hey, we can all just go out and buy electric cars….

Damping the Benefits of Globalization

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In one of the few sensible pushes members of the Biden administration is making, Secretary of the Treasury Janet Yellen, in her meetings in Seoul, Republic of Korea, pushed for the US and our friends and allies to shift away from dependency on the People’s Republic of China for supplies and instead to friend-shore the supply chain: get the supply components and raw materials either domestically or through trade with friends and allies.

Friend-shoring is about deepening relationships and diversifying our supply chains with a greater number of trusted trading partners. The purpose is to lower risks for our economy and theirs[.]

There are, of course, criticizers of such a change in emphasis.

…some economists have cautioned that such a shift could damp the benefits of globalization and lead to higher prices.

But this is to misunderstand, or to ignore, the real risks to globalization: dependency on our enemies for Critical Items in our supply chain. The PRC, for instance, already has attempted to corner the market on rare earths, and it already has attempted to use that monopoly to coerce Japan by embargoing rare earth sales and shipments to them. Russia is already restricting supplies of natural gas to Europe.

Walking away from the PRC, and Russia, and our other enemies on supply chain matters may or may not lead to higher prices; most likely, higher prices will be limited to the period of transition away from our enemies.

The higher cost, though, from continuing dependency on enemy nations is to our national security and to the uncertainty premium resulting from those enemies engaging in restricting or outright embargoing critical supply items in order to coerce.

Is the Iron Curtain Come to California?

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It seems that the University of California Los Angeles has decided to move from college’s PAC-12 Conference to the Big 10 Conference, effective with the 2024 academic/athletic year.

It seems also that California’s Governor Gavin Newsom (D) is unhappy about the alma mater of Lew Alcindor, later becoming the NBA great Kareem Abdul-Jabbar, joining the exodus from the State, if only functionally and not physically.

Nobody said, “Mother may I?” to Newsom, and that angrifies him as much as UCLA’s decision to go out from a West Coast conference to a more economically sound area of our nation.

I read about it (is how I found out). No big deal. I’m the governor of the state of California. But maybe a bigger deal is that I’m the chair of the UC Board of Regents. I read about it. Is it a good idea? Did we have a chance to discuss the merits (of the decision)? I’m not aware anyone did. So it was done in isolation. It was done without regental oversight or support. It was done without any consideration to my knowledge.

Now, it may be that there is/was a contractual obligation for UCLA to advise the Board of Regents of the school’s discussions and intentions. However, Newsom didn’t mention any of that in his plaint—only that His Nibs wasn’t consulted.

Regarding those more economically sound areas of our nation—in the new era of Name, Image, and Likeness requirements that allow college athletes to personally profit form the use of their NIL material—here is, UCLA’s Athletic Director Martin Jarmond:

…the move was mostly about increasing “exposure” in the NIL era. By opening the school up to potentially more nationally televised games and East Coast markets, Jarmond says they can now provide an enhanced opportunity for student-athletes to find “their voice and their brand and what’s important to them.”

But not so fast: His Nibs is looking for ways to block the move.

Trust me when I say this: We are not going to be looking into. We are already looking into it within (and have been) minutes after reading about this in the newspaper.

No veiled threat there….

Tax Compliance and Pressure

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This time, pressure on another nation to comply with a global minimum tax regime. The Biden administration is unhappy with Hungary for standing in the way of the EU’s agreeing a global (or at least Western World) regime that would contain a minimum tax level. That minimum level was designed to eliminate tax rate competition among nations.

On Friday the Treasury said the US is withdrawing from a 1979 bilateral tax treaty with Hungary.

Eliminating that nearly 45 year agreement actually is a boon to Hungary, though, rather than pressure, since Yellen and the Biden administration have withdrawn a tool for pressuring that nation.

Never mind that pressuring Hungary on minimum tax compliance is economically idiotic—the race to the bottom of tax rates is a race all nations should be striving to win. Or at least those nations that believe their own citizens aren’t drooling imbeciles and actually can make their own decisions concerning what to do with the money lower tax rates would leave in their hands rather than being forced to give their money into the hands of remote bureau- and technocrats.