Tag Archives: economics

Avoid Debate

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It might make some folks uncomfortable.  That seems to be the position of Lance Morrow, a Senior Fellow at the Ethics and Public Policy Center, in his Wall Street Journal piece.  After all, goes the subhead on his piece:

It would push the country to angrier extremes on either side, stimulating fresh antagonisms.

Morrow urged us all to “stop and think” about the implications of having a debate, here on the matter of reparations for past slavery-related transgressions.

The notion may be too volatile to indulge in a presidential-campaign year.

Leaving aside Morrow’s other major concern—

By pressing the issue they may ensure the re-election of Donald Trump….

—the question remains: if not now, when?  Apparently, “later.”

Better to keep monsters, old and new, locked in the basement, and to let the conversation upstairs in the living room be as genteel as possible—even hypocritical. In matters of race hate, candor is overrated. Hypocrisy may be the moral way to go—until, as time passes, people become more civilized.

Yeah, it’s better just to let the matter fester, building to a later, vaster explosion.

Sure.

Puzzling Through Tax Breaks

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The Progressive-Democrats, and too many Republicans, in Congress are trying to sort out what should be done about expiring tax breaks.

Here are some of the expiring or about to expire tax breaks:

  • incentives for biodiesel production
  • deductibility of private mortgage insurance
  • tax credits for investing in low-income areas
  • employers’ family-leave plans
  • expansion of the earned-income tax credit

The answer is really quite simple and straightforward, if extremely difficult politically: let them all expire. Our Federal tax code should not be used for social engineering; it should be used solely for its constitutionally mandated purpose: to fund our Federal government.

Favorable Jobs Report, Therefor Cut Interest Rates?

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That’s the latest push, this time by Vice President Mike Pence.  He’s as wrong, though, as President Donald Trump, for all that he’s more genteel in his push.

There’s no inflation happening here. The economy is roaring. This is exactly the time not only to not raise interest rates, but we ought to consider cutting them[.]

Pence made this remark on the heels of Labor’s employment report announcing strong job growth, rising wages, and 3.6% unemployment.

No.  Interest rates where they are aren’t hindering our economy; on the contrary, they’re still a tad low.  Our economy is flourishing for a number of reasons, one of which is that interest rates are approaching more natural levels, not being held at below free market rates.  “Natural” here is defined in terms of the Federal Reserve’s legislated mandate—to maintain stable prices and low unemployment—and the Fed’s long-held optimal stable pricing goal of 2% inflation.

Cutting rates on the basis of a favorable jobs report (and one not entirely favorable: the labor force participation rate fell for the second straight month, and that rate is a factor in calculating the headline unemployment rate) would be a mistake.  Instead, the Fed should move its benchmark rates to levels consistent with its 2% inflation goal and then sit down, be quiet, and accept that the economy and employment rates will be noisy around that level (or any other level).

Animal spirits, after all, are hormonal, but within surprisingly broad ranges, they keep correcting back.

Socialism and Good Intentions

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Carol Roth, in her op-ed for FOXBusiness, said that Socialism begins with good intentions.

No, socialism does not.  Perhaps the first attempts did, but with its unbroken history of wealth concentration, power concentration, and utter failure—even for those in the concentrated top—before us and well known, that much is clear.  On the contrary, those proselytizing for and instigating socialist regimes have as their sole goal the accretion of wealth and power to themselves—and this time it’ll be different, this time they’ll pull it off.

Roth’s piece had a number of internal contradictions that illustrate the origins of socialist regimes, even though she seems to have missed them.

The first is her quote from Margaret Thatcher:

The problem with socialism is that eventually you run out of other people’s money.

Those pushing socialism know this a priori, though.  They have no concern for the future, just the current seizure of all that OPM.  They’ll get theirs, and to hell with anyone else.

Then she wrote,

Socialism is quite like robbing Peter to pay Paul….

That’s not starting out with good intentions.  Unless it’s a Good Thing to rob someone, especially if it’s someone you don’t like.

And this bit:

Socialism starts out with noble intentions, preying on the envy of the population….

It’s noble to “prey on” the base instincts of the poor?  It’s noble to take advantage of others’ envy, to encourage the weak immorally to act out that envy?  How does that “logic” work, exactly?

Socialism, in each of its iterations over the last 100 years has not started with good intentions.  It has started with the greed of the few with the skill to peddle snake oil.  Socialism accelerates downhill from there.

The EU Blows Things out of Proportion

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…again.  This time it’s over the US’ decision to implement all of the Helms-Burton Act, to stop waiving Title III of the Act.  Helms-Burton, you’ll recall, is a law passed in 1996 that pressured Cuba and its trading partners to not traffic in Cuban government-appropriated -stolen private property, property that was seized by that government over the course its power-grabbing in the days following Fidel Castro’s successful rebellion.

Title III created a private cause of action, allowing private citizens whose property had been confiscated by the Cuban government to sue those trafficking in that property for monetary compensation for the loss, plus court and attorney costs associated with the suit.  The Title also contained within it authority for the President to waive the Title for six-month periods.

The EU is up in arms over this.

The EU considers the US move to be “contrary to international law” and “will draw on all appropriate measures to address the effects of the Helms-Burton Act, including in relation to its WTO rights,” according to a statement from the EU’s top diplomat, Federica Mogherini.

Because it’s contrary to international law and a violation of WTO rights for persons whose property has been stolen to go into court in order to be compensated for the loss ensuing from the theft.  No, the EU and a few member nations simply are worried about the inconvenience of protecting justice:

[A]ctivation of the Title III provision could bring about dozens, if not hundreds, of lawsuits and also generate trade conflicts between the US and European countries such as Spain, France and Britain. It is also likely to negatively affect the already lagging levels of foreign investment in Cuba.

That last is especially risible.  The point of Helms-Burton is to pressure the Cuban government to cut it out and make its victims whole.  Negatively pressuring Cuba’s reception of foreign investment is a valuable tool in gaining the compensation.  Beyond that, if European companies lose money as a result of the suits, that’s on them for trafficking in stolen goods in the first place, and their beef is between them and the Cuban government, not between them and the victims of the crimes.

And there’s the matter of perspective.

The US State Department has certified some 6,000 claims worth some $8 billion (€7.14 billion) in current values. Another 200,000 claims have yet to be certified, but could have a value amounting to tens of billions of dollars.

Tens of billions.  The level of trade between the US and the EU (because Spain and France, and Great Britain so far, cannot conclude trade agreements apart from the EU), even in the present parlous trade environment, is $1.1 trillion (€1.23 trillion).  The Europeans are raising their misguided tempest deep inside a teacup.

The Helms-Burton Act is summarized here, and the Act itself can be read by following the first link in that cite.