Tag Archives: economics

YGTBSM

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This is from a Food and Drug Administration warning letter to the owners of Nashoba Brook Bakery, via The Wall Street Journal:

Your…products are misbranded…because…the labels fail to bear a complete list of all the ingredients by common or usual name….

Your Nashoba Granola label lists ingredient “Love.” Ingredients required to be declared on the label or labeling of food must be listed by their common or usual name…. “Love” is not a common or usual name of an ingredient, and is considered to be intervening material because it is not part of the common or usual name of the ingredient.

The utter idiocy of this bureaucratic foolishness wants no further comment beyond a simple question: why are the letter writer and his supervisor still on the taxpayer’s payroll?  There are other complaints identified in the letter that would appear to be serious, but they’re deprecated, and the letter cannot be taken seriously with this kind of nonsense included.

Another Example

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…of government regulatory failure.  The Financial Industry Regulatory Authority, which regulates, among other financial institutions, brokerage houses, has its own investment portfolio.  FINRA charges fees from those it regulates for their privilege of being regulated.  And

In years when FINRA’s fee revenue exceeds forecasts and investment gains are strong, the regulator can rebate fees paid by firms it regulates.

Investment gains are strong.  However, FINRA turns out to be a crappy investor, getting just two-thirds of the return since 2004, when the regulatory body’s investment portfolio was created, that a simple-minded standard portfolio mix of 50% each of bonds and stocks would have gotten in the same period.  Its return shortfall, 3.4% vs that standard portfolio’s 6%, is a real money shortfall: $440 million for a portfolio of $1.6 billion.

And that has real impact on the regulatees that are so privileged: not only have there been no fee rebates since 2014, FINRA is raising fees on its regulatees to make up for its failure as an investor.

Go figure.

Some Early Thoughts on the Tax Reform Proposal

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…triggered by Laura Saunders’ piece in Wednesday’s Wall Street Journal.

Beginning with the headline and thesis of her piece: Winners and Losers Under the Trump Tax Plan. Because Government should be about picking winners and losers instead of just protecting a level free market for all.  Sure.

Now a couple of specifics.

People with large medical or disaster deductions. Each of these write-offs on Schedule A has significant hurdles and is only available to taxpayers with large unreimbursed expenses

This one isn’t particularly relevant to tax reform. It just means that four Republican Senators who prefer preserving Obamacare intact over even a first step toward repealing/replacing it need themselves to be replaced with Republican Senators who are serious about getting rid of Obamacare and its destructiveness.

Losing the State tax deduction? That only impacts a couple of States with enormous spending habits; those citizens need to correct their State government errors.  The citizens of the other States don’t need to be dragooned into indemnifying the foolishness of those couple of States.

The mortgage deduction loses value under tax reform? Yeah, and? Punish those who don’t itemize by taxing them more (vis., not raising the standard deduction) so others can have a deduction? Beyond the cynicism of this special interest nonsense, our tax code shouldn’t be in the business of social engineering in the first place.

This proposal is a good first step in tax reform.

Now we just need to disabuse politicians that every bill is the last word on a subject rather than an interim as we move toward our goal: a flat tax in the neighborhood of 10% on all income, regardless of source, and the elimination of all deductions, credits, and other froo-froo.

Hacks and Hack Disclosures

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Equifax took six weeks to get around to bothering to tell us about it so we individual consumers could begin to take our own corrective and defensive action.  That’s unconscionable, Equifax isn’t alone in delaying telling us about hacks into personal information those companies are holding for us, and it’s giving impetus to legislation that would force companies to disclose such hacks much sooner.  One such proposed bill is Congressman Jim Langevin’s (D,RI) reintroduction of the Obama era’s Personal Data Notification and Protection Act.

I don’t like regulations, but one here is necessary. The hacks aren’t exposing company property; they’re exposing individual personal property entrusted to the company. Companies have an obligation to safeguard that personal property, and that obligation is strongly expanded by a company’s demand for that personal property as a condition of doing business with it.

Companies don’t want to be embarrassed…[by] having to disclose when people’s data is leaked….

People don’t want to be harmed by those leaks or by delays in finding out their data have been leaked. I’m trying to weight the one against the other in my balance. Oh, wait….

Under this proposed legislation, Equifax would have had to disclose its breach within 30 days….

No, there’s no need for any delay, indeed, delay simply compounds the damage that can be done to us individuals.  As Christopher Mims put it at the end of his piece at the link,

When Equifax was breached, hackers got birthdates, Social Security numbers, and other hard facts about most of us. This data has the power to ruin our financial lives….

Any delay, let alone 30 days, is far too long to be held defenseless against that.  The legislation’s proposed 30 days are forever in today’s information and financial world, an entire month within which hackers could work their nefarious ends without our being able to defend against those ends.  Equifax, et al., should be required to disclose on the day the hack is discovered and then to keep us current on developments with frequent updates that, at the least, explain what’s being done about the hack to reduce the likelihood of a subsequent hack, what’s being done to mitigate the damage to us of the present hack, why the hack wasn’t discovered sooner, and what’s being done to speed discovery for next times.

We need to be able to act in our defense, too.

And contra the attitudes of those who defend delay, we Americans are not too stupid to understand what we’re being told—so long as it’s prompt and truthful—and we can make good use of the information which, aside from our being better able to defend ourselves, would let us see quickly what companies develop a history of exposing our personal information and so are unworthy of our business.

The Not Good Enough Legacy

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Here are some stats regarding Obamacare’s impact on our poor, courtesy of The Wall Street Journal.

More than one in three of taxed [via the individual mandate penalty] households earned less than $25,000, which is roughly the federal poverty line for a family of four.

And

More than 75% of penalized households made less than $50,000 and nine in 10 earned less than $75,000.

And

Fewer families paid the tax in 2015 than in 2014, yet government revenues increased to more than $3 billion from about $1.7 billion, as the financial punishment for lacking coverage increased.

Never mind that these honest Americans can’t afford what Obamacare has on offer, they still have to pay the tax.  Never mind that what is on offer is so bad they won’t buy it; they’d rather pay a tax they can ill afford.

This is what Senator John McCain (R, AZ) has said he prefers to Graham-Cassidy, never minding that the Arizona governor (for whom McCain claims great admiration) has strongly endorsed the bill.  This is what Senator Rand Paul (R, KY) has said is better than a bill that repeals much of the funding for Obamacare and sends it instead to the States so they can set up their own health insurance/health coverage plan markets—including State-level Obamacare, if that’s their preference—never minding that States’ Rights has been part of his mantra since his first Senate election campaign.  This is what Senator Lisa Murkowski (R, AK) seems to want to preserve over Graham-Cassidy‘s elimination of her State’s exploding premiums and imploding plan provider participation.  This is what Senator Susan Collins seems to want to preserve, never minding Maine’s governor endorsement of the bill.

The WSJ pointed out that

…the point of this coercion was to substitute the government’s political preferences for individual judgment….

Just as these four Senators are substituting their own political preferences for the individual judgments of their constituents—whom the four are betraying with their support for Obamacare over Graham-Cassidy.

Remember this for the coming primary election season.