A Post-Wuhan Virus Situation Supply Chain Environment

The South China Morning Post, a Hong Kong-based news outlet, has a five-part series in progress regarding outcomes potentially stemming from the current situation. My comments here concern remarks from the SCMP‘s third part.

Consensus is growing in Beijing that the coronavirus pandemic is set to make the world more hostile towards China, undermining the accommodating international environment that underpinned the country’s spectacular rise from a closed communist backwater into a global economic powerhouse.

With considerable justification, given the PRC’s steady drumbeat of coverup, lies, and subsequent shipment of dangerously shoddy masks and Wuhan Virus testing kits.

Aside from that, the PRC’s “spectacular rise” more accurately has been from a closed communist backwater into a closed communist global economic powerhouse.

There’s this, too:

Beijing’s pledge that China will remain investor-friendly and open its market further to foreign businesses.

This pledge is another broken commitment. The PRC has never been investor friendly.

The PRC government continues to require foreign businesses to take domestic companies as partners, for all that the domestics’ “participation” is no longer required to be a controlling interest. Such partnerships remain required, and the foreign company remains required to share critical technologies and intellectual properties with those partners. Given that PRC law requires all domestic businesses to cooperate with the government’s intelligence collecting agencies, that means those foreign companies still will be…sharing…their technologies and intellectual properties with the PRC government.

In the end, the necessary realignment of the world’s value chains needs to be an alteration of those chains to remove the PRC from any participation in any step that leaves other nations dependent on PRC production for their own national or economic (which is national) security. It may, or may not, be useful to include, to an extent, PRC production or communications facilities in those chains. However, with the lack of reliability and quality of output that the folks manning the nation’s government have chosen to ship in their response to the global crisis Beijing has unleashed, such an inclusion must necessarily be sufficiently constrained that a PRC disruption cannot threaten the security or weal of other nations.

Keep in mind, too, that PRC has long history of choosing to export dangerously bad products: powdered milk adulterated with melamine, baby food preparations with…impurities, poisoned pet food, sheets of plywood made with formaldehyde that outgasses into homes to poison the occupants.

Wuhan Virus and Higher Education

Our colleges and universities are being confronted with “hard choices” as a result of the Wuhan Virus situation.

Every source of funding is in doubt. Schools face tuition shortfalls because of unpredictable enrollment and market-driven endowment losses. Public institutions are digesting steep budget cuts, while families are questioning whether it’s worth paying for a private school if students will have to take classes online, from home.
To brace for the pain, colleges and universities are cutting spending, freezing staff salaries, and halting plans for campus building.

But in bracing for that pain, colleges and universities don’t seem to be considering their curricula. They don’t seem to be considering cutting out the fluff and froo-froo courses that have proliferated—courses like women’s studies, gender studies, sexuality studies. Courses like intersectionality.

Colleges and universities don’t seem to be considering deemphasizing intercollegiate sports—most programs of which lose money and all programs of which have lost the student athlete aspect and, with NCAA approval, have codified their semi-pro athlete aspect.

Colleges and universities don’t seem to be considering focusing their instructional programs on things that will prepare their students for making their way in the real world of post graduation: skills like critical thinking, skills like doing the work the businesses in our economy need done, whether building or programming computers, building or programming or operating factory equipment, business skills associated with operating farms and businesses.

Colleges and universities are failing the challenge.

Bail Out the States?

A letter writer in The Wall Street Journal‘s Wednesday Letters section had a thought about Illinois’ fiscal situation and how to resolve it.

Why a bailout? How about a low-interest loan from the Treasury with fixed payments due on specific dates?

Illinois has chosen to renege on its promises to its public pension facilities. Why would anyone with two neurons to bump together into a ganglion believe Illinois would keep any promise to repay a loan to the Feds?

Aside from that, what would be the enforcement mechanism for a welched-on fixed payment or sequence of such welches? Would Treasury send Revenooers to seize State government bank accounts? To seize physical assets and sell them at auction? Fat chance.

No, there should be bailout in any form, no Federal money at all for Illinois. The State’s government must correct its profligate spending misbehavior and honor the commitments it already has on its books. That those requirements exist in some opposition to each other is a problem of Illinois’ creation, and it’s on Illinois to fix it without other taxpayers’ money.

New Jersey Wants Federal Dollars

But it’s not a bailout, Governor Phil Murphy (D) insists.

“I wouldn’t call it a bailout. I would just say this is a war, we’re at the front lines,” Murphy said, stressing that his state does not want federal help at this time for “legacy” budget issues that predate the pandemic.
“We know what we got to do with the old legacy stuff, we need help with the here and now: educators, police, fire, EMS, the front-line stuff.”

Of course…. To the extent that any Federal dollars should go to States, New Jersey for instance, those dollars should go directly to the educators, police, fire, EMS, the front-line stuff; they should not pass through the State government on the way.

And: to mitigate the fungibility of money, those Federal dollars should be matched by State dollars. A State government should not be able simply to reallocate the funds it would already have been sending to “the front-line stuff” to other purposes on the premise that Uncle Sugar is picking up the front-line tab.

…if we do not get significant direct and flexible financial support from the federal government, we will be forced to make many difficult decisions about programs we all rely upon and which we will lean on in the months ahead.

What decisions to make vis-à-vis excessive public pension commitments and payouts, for instance. Regarding excessive and overwrought regulations that cost tremendous amounts to enforce and tremendous amounts for businesses and individuals to satisfy, and so that divert monies from their more efficient allocations and thereby restrain economic activity and reduce revenues to the State’s government.

Difficult decisions, indeed.

A Supreme Court Error

No, I’m not talking about the Court’s cowardice on gun rights. This one concerns the Court’s nearly unanimous decision regarding any Congress’ ability to undo what a prior Congress has done and the Executive Branch’s obligation to spend money that hasn’t been appropriated.

The Court upheld health coverage providers’ demand, under Maine Community Health Options v US for

payments to health insurers for so-called risk corridors in ObamaCare’s first three years[.]

Never mind that the 112th Congress, in 2010, undid what the prior 111th Congress had done and both refused to appropriate funds for those “risk corridors” and explicitly forbade the Executive Branch from making any risk corridor payments from other funds.

Never mind that money must actually be appropriated before it can be spent. Article I, Section 9 of our Constitution makes that clear.

No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law….

At least it used to be clear.

Now none of that matters. In addition to the “implied rights” that the Supremes are wont to manufacture, now it has manufactured out of whole cloth an implied obligation.  The health coverage providers are owed the money because a prior, overridden, Congress wanted the money paid out.

And We the People are the ones who’ll be left paying for this egregious error of the Court. Pay up, suckas.