An oldie but goodie that demonstrates the awesome durability of the New York Times‘ writer’s acumen. Uncovered by my wife.
Paul Krugman Struck Again
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Tag Archives: economics
Deficits as Cudgel?
Gerald Seib says that’s what the Progressive-Democrats in Congress fear the Republicans will use them for.
Democrats worry that Republicans will simply use the rising deficits they are creating as an excuse to cut government spending on domestic programs important to Democrats—in the vernacular, that the tax bill will “starve the beast” of the federal government of the money it needs to keep spending at current levels.
I certainly hope those deficits will be used as the reason for cutting government spending. The Federal government spends way too much of our money, and it does so without regard for whose money it is and without regard for the amount of revenue that taxes bring in—deficit spending is enthusiastically pursued regardless of tax rates or revenues.
Federal spending needs to be cut back drastically, not just on domestic programs important to Progressive-Democrats, but on all domestic programs (other than defense, which already is so low that our military cannot reliably win a war against a regional power like Russia, much less a rapidly expanding one like the People’s Republic of China. We’ve even had to abandon our Cold War mission of being able to fight and win two separate wars simultaneously). A good start would be a 10% across the board cut on all extant programs, and then begin cutting seriously from there.
And yes, that includes privatizing Social Security and Medicare and block granting Medicaid transfer payments to the States without strings—they know better than the Feds how to spend those funds State-domestically, anyway. After conversion, the Feds then should reduce those Year Zero block grants by [10%] per year after that until there are no more Federal Medicaid transfers.
An additional step for Federal spending curtailment is to consolidate all current Federal transfers into a single block grant for each State and then reducing the size of that grant along the schedule above. In this way, States like New York, California, and the rest of the dozen or so States that send more of their citizens’ tax money to the Federal government than they get back could keep all of their citizens’ money and spend it within their State in accordance with those citizens’ imperatives. Surely even Progressive-Democrats could get behind a program that lets their constituents keep their money local—that’s more for the local Progressive-Democrats to spend.
Net recipient States would be able to keep all of their citizens’ tax money, also, reducing the alleged “need” for Federal transfers.
Additional cost saving: the middle-man bureaucracies, with their inherent costs, would be eliminated, too.
The only deviation from eliminating such knee-jerk routine transfers should be in times of declared State or regional emergency.
The Disappointing Joe Manchin
Senator Joe Manchin (D, WV) seemed, initially, like a center-left Democrat and a man who was capable of bipartisan work when he came on the scene a few short years ago. Recall, for instance, his firm support of our 2nd Amendment and his opposition to much of Obamacare and to then-President Barack Obama’s (D) war on coal.
Now, though, he’s a proud member of the Progressive-Democratic Party’s caucus in the Senate, and the conflict between his claimed values and his voting against the just passed tax reform bill is showing.
“There’s some good in this bill. I acknowledge that,” Manchin said, when West Virginia radio talk show host Hoppy Kercheval asked the senator why he opposed legislation that will benefit the “vast majority” of taxpayers and businesses in the state.
“The things that you mention are correct. Initially people will benefit and see some changes in their taxes[.]”
But
Manchin blamed his opposition on projections from some analysts that the tax overhaul would increase the national debt, and that cuts directed at individuals and married couples is temporary and sunset in 2025 without further action from Congress, versus the corporate cuts, which are permanent.
And
Why did the permanency have to go on the big end, and not on the individuals who really got left behind?
He’s carefully eliding a number of things, though, with his rationalization. One is that if he’s truly concerned about the national debt, he should get out of the way of Congressional efforts to cut Federal spending. But he’s a Party man. And the only way those temporary cuts actually will expire is if he and his fellow Progressive-Democrats go against Party tenets and prevent their extension or being made permanent rather than demanding the tax increases expiration would create. But he’s a Party man; so are Progressive-Democrats all, all Party men.
Further, businesses plan—must plan—farther into the future than do us individual citizens. They are far less agile than we can be; their costs for things like production supplies and for labor, to name just two factors, have to be planned for far in advance. Businesses need the stability of permanence far more than we do; eight years is close enough to permanent for us. Manchin knows this, or he’s too economically ignorant for national office.
And
He [Manchin] also complained of a coming increase in health care costs because the legislation repealed Obamacare’s individual mandate to purchase insurance.
He’s eliding another fact here, too. Health coverage (not care) costs have been skyrocketing under Obamacare since the first months after it was enacted. All that repealing the penalty for disobeying the Individual Mandate is doing is freeing up 13 million Americans—especially those at the lower end of the economic scale—from having to buy an Obamacare plan they can’t afford or that the rest of us can’t afford to subsidize. Those health care costs have been sky-high all along—due to the lack of a free market in that particular industry; Obamacare only exacerbated this. Manchin knows—or should know—this, as well.
Keep this in mind as this Progressive-Democrat runs for reelection in West Virginia next fall.
Spotify and Crony Capitalism
Spotify AB wants to do an initial stock offering, an IPO, on the New York Stock Exchange, and the company wants to do it without benefit of bank underwriters. Oddly, the NYSE has to ask the SEC for permission to amend its own rules to allow this. Even more strange, the SEC is dithering over granting that permission—to allow the private enterprise, the NYSE, to conduct its own business as it sees fit, and more proximately, to allow the private enterprise, Spotify, to conduct its business as it sees fit. The SEC is claiming, with a straight face, that it has until the middle of February to make up its mind.
That the Government agency even thinks it needs to think about this is shady. Government mandating bank involvement in a private enterprise company’s public offering? That would be textbook crony capitalism.
The SEC had concerns that Spotify’s direct listing could open the door for other companies with potentially risky financial profiles to access the public markets without giving investors sufficient protection[.]
Caveat emptor. Government-favored bankers Us investors don’t need the protection of Big Brother. I understand that personal responsibility is anathema to Government bureaucrats, but this is a shield too far.
The SEC needs to reject such…stuff…stop dithering, and grant the permissions out of hand.
Ex-Im Bank Nominee Confirmation
The Senate Banking Committee rejected Scott Garrett, President Donald Trump’s nominee to head the Export-Import Bank. The Wall Street Journal is casting that as “a win for crony capitalism” on the grounds that as a New Jersey Congressman, Garrett had twice voted against renewing the Ex-Im charter.
It’s not the end of the world, though; far from it. Confirming the nomination of a guy who doesn’t like the Ex-Im would have been better, but absent a quorum, which this refusal to confirm extends, the bank is unable to approve financing arrangements over $10 million. This not a bad outcome; Ex-Im is well hamstrung, and that’s a good interim condition.