Tag Archives: economics

Reporting To/Working For

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Texas Governor Greg Abbott (R) is going to release an Executive Order this week outlining requirements for safely beginning to reopen the Texas economy as the Wuhan Virus situation begins—begins, mind you—to start [sic] to wind down.

The details of the order were not immediately clear.

The NLMSM isn’t, yet, particularly upset by this lack of clarity at this point, and neither should they be. Still, the statement invites a remark from me (if for no other reason than that it’s my blog, and I’ll blog if I want to, blog if I want to, blog if I want to).

The details needn’t be made available to the press at all before the EO is published for the public’s consumption. That’s not a matter of withholding information from the press, it’s a matter of priorities.

Abbott doesn’t work for the press; he works for us Texas citizens. Of course he should report to his bosses before he reports to anyone else. The press is only a tool—and not the only tool—for carrying out that responsibility.

Full stop.

Progressive-Democrat Extortion

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The Progressive-Democrats in Congress held up the last Wuhan Virus Federal aid program for four critical days, led by House Speaker Nancy Pelosi (D, CA) and Senate Minority Leader Chuck Pelosi (D, NY). These persons tried to force inclusion in the aid an array of programs irrelevant to it but central to the Progressive-Democrats’ ideology and platform.

They’re at it again. The new aid effort, currently under way in the Senate, is centered on small businesses and their employees: an additional $250 billion for the Paycheck Protection Program

Two top [Progressive-]Democrats—House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer—in a statement on Wednesday morning said they want the additional $250 billion for PPP to get packaged with other provisions, such as $100 billion for health-care institutions, $150 billion for state and local governments and extra help for food-stamp recipients.

These two, and their cronies in both houses of Congress, are holding up the aid while they try to force inclusion of $100 billion for health-care institutions, $150 billion for state and local governments and extra help for food-stamp recipients.

This is just naked extortion. Nice aid program you have there. You need to pay some protection fees for it.

Never mind that additional funding—from some source, not necessarily on the taxpayers’ backs, but maybe so—for hospitals, et al., for state and local governments who’ve a long history of fiscal irresponsibility, for those on food stamps could easily be discussed and debated in a separate bill or three.

Never mind, too, that not a single red penny of the $150 billion already appropriated for health care and medical-related stockpiles has been spent. Piling more money behind that bottleneck serves no purpose beyond virtue-signaling.

No. Small businesses and their employees can just go hang unless Progressive-Democrats get their demands met. As The Wall Street Journal put it, [t]ens of thousands of small businesses are heading for bankruptcy without short-term liquidity from the feds. That’s OK, though, if Party can’t get its demands met.

Again, no. Paying the vig, paying the ransom—paying the Danegeld just gets the payer stuck with the Dane forever.

Sounds Like a Market Niche

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Some credit card companies, Visa and Mastercard come to mind, have been looking at raising the fees they charge merchants for using their cards. While the present Wuhan Virus situation has crimped those plans, the delay is only temporary and will last only as long as the virus problem and associated economic problem lasts. The fee increases, though, when they are implemented,

in some cases would be hardest on small businesses[.]

After all,

the abrupt global slowdown has been most acute for the smallest businesses, which tend to operate on thinner profit margins and smaller cash reserves.

Such a move by the major credit card players would seem to create a market niche. Maybe small businesses—perhaps by industry association, perhaps by geographic association, perhaps generally—could band together to create, issue, and support their own credit card(s). Bypassing the name cards and bypassing the banks that issue them also would allow the small business card issuers to charge a lower fee for use of the cards.

Which, ultimately, would be good for the businesses’ customers, and so for the businesses, a multi-win situation.  Small businesses in these new credit card associations would find their costs lowered—no longer having to pay the major card players such high fees—and so fewer costs to pass on to their customers or to eat, and so more customers entering their stores.

We’re Not the only Ones

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There’s this bit, via The Independent, a British online news publication, regarding the reliability of (medical) products from the People’s Republic of China:

The UK government’s new testing chief has admitted that none of the 3.5 million antibody tests ordered from [the People’s Republic of China] are fit for widespread use.
Professor John Newton, who was appointed by health secretary Matt Hancock to oversee testing, reportedly said the tests were only able to identify immunity in people who had been severely sick with coronavirus.
The tests did not pass the evaluation stage, and he was quoted by The Times as saying they were “not good enough to be worth rolling out in very large scale”.

The Brits, too—along with, I strongly suspect, all of Europe, North and South America, the Middle East, and on and on—need to adjust the supply chains of their nationally critical items so as to eliminate the PRC from them.

It’s generally appropriate not to ascribe to malevolence what incompetence can adequately explain. However, sometimes it really is malevolence, when it’s on the scale the PRC is perpetrating.

Critical Supplies

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I’ve written earlier about the need to recreate a core ability to produce certain items critical to our national security entirely domestically, from dirt in the ground to final product.

The need isn’t only driven by our enemies having critical places in our supply chains.  Our friends and would-be friends have similarly critical places, and they act as enthusiastically for their own self interest as we do. And those self interests can conflict.

Take India and hydroxychloroquine. India has decided to ban the export of any of its production of the drug. Worldwide demand is expanding greatly in response to its apparent (though not yet clearly demonstrated) effectiveness in treating Wuhan Virus infections, while production capacity has not—cannot—expand as rapidly to meet that demand. India has a very large population with diseases for which on-label use is wholly warranted.  India’s ban is not borne of enmity toward us but of national need and so self interest.

We can retaliate against India and its ban, as President Donald Trump has threatened to do, but that sort of response doesn’t address the underlying problem (it should be noted that retaliations prove unnecessary; India has enacted an exception to its ban that allows export to us). We need to be able to produce our own hydroxychloroquine from scratch, entirely domestically. We still should get the drug, and intermediate production chemicals, from the most efficiently done sources, including internationally, but we absolutely need to have an ability to produce at least some entirely domestically. That would give us a core capability from which to expand, should a need arise, rather than leave us to do without or vulnerable to extortion, as our enemies will apply.