Tag Archives: economics

Republicans and Obamacare

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Too many now are begging for surrender on repeal and replace.

[F]ew congressional Republicans have signaled they are ready to let the health-care market deteriorate while their constituents are still battling higher premiums and fewer insurers to choose from on the individual marketplace.

This means those Republicans are signaling that they don’t have the stomach to repeal Obamacare at all, which would be the ultimate deterioration of it.

This is a betrayal of their constituents along two dimensions: the cynical destruction of their promise to repeal and replace, and their decision to continue inflicting Obamacare with its steadily increasing premiums and fewer insurers to choose from on their constituents.

President Donald Trump’s move to just let Obamacare die on the vine and hope for something better to rise out of the sewage is just as foolish and immoral.  Republicans need to remember what they promised and who sent them to Congress to honor their promise and get back to work on repeal and replace.  On that score, Trump is entirely correct, even if the doable path is stages as originally proposed last winter or via another path proposed by Senators Lindsey Graham (R, SC) and Bill Cassidy (R, LA) whose bill (as an interim step, I say) would “take ACA funding and distribute it to the states through block grants.”

Voters should remember this pending abject failure in the upcoming primary elections.

Some Labor Day Questions

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First published in 2015, I’ve updated it for today.  In an ideal world, I’ll be able to update it again next year, with a more optimistic tone.

The Wall Street Journal asked some questions on Labor Day 2012, and supplied some answers.  Here are some of those questions and answers, which remain as valid this Labor Day.

  • Q: How are America’s workers doing? Not good. Over the past decade, over the ups and downs of the economy, taking inflation into account, the compensation of the typical worker — wages and benefits—basically haven’t risen at all. … The Labor Department recently said that 6.1 million workers in 2009-2011 have lost jobs that they’d had for at least three years. Of those, 45% hadn’t found work as of January 2012. … Federal Reserve Chairman Ben Bernanke said Friday that unemployment is still two percentage points higher than normal….
  • Q: Things ARE getting better, though. The US economy is creating jobs, right? Back in December 2007 when the recession began, there were about two jobless workers for every job opening.  When the economy touched bottom in mid-2009, there were more than six unemployed for every job.  At last count, the BLS says there were 3.4 jobless for every opening.
  • Q: How much of this elevated unemployment is because the unemployed just don’t have the skills that employers are looking for right now?  …the bulk of the evidence is a lot of the unemployment really is the old-fashioned kind: the kind that would go away if the economy was growing at a stronger pace. Mr. Bernanke said as much at the [2012] Jackson Hole conference….

The Democratic Party President has taken a bad situation and done little to improve it, even though he’s had four more years in which to do so.  He has, though, actively attacked businesses—the hirers—demonizing them, (over)regulating them, demanding to raise taxes on them.

At least as importantly, the current Democratic Party Presidential candidate has vowed to continue these Democratic policies, and to extend them.  Even with nearly eight years of empirical data demonstrating the bankruptcy of these policies.

Under the new Trump administration, the jobs situation seems, at least superficially, to be improving, although still too slowly.  The headline unemployment rate is at an historic low; however, the labor force participation rate—the denominator in that headline rate—remains at an historic low, also.  And, wages aren’t growing as they would in a normal, more robust economic recovery.

Further, the Federal Reserve Bank management, aided and abetted by the Progressive-Democratic Party Representatives and Senators, are highly resistant to removing job- and job growth-restricting regulations that were emplaced 10 years ago (under Dodd-Frank, for instance) with the ostensible purpose of mitigating the Panic of 2008.  With that dislocation long behind us, those regulations no longer serve a useful purpose.

Happy Labor Day.

Chips and the PRC

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The Committee on Foreign Investment in the US seems to be preparing to block the purchase of Lattice Semiconductor Corp, a maker of chips for civilian electronics, by Canyon Bridge Capital Partners, a company backed and funded by the government of the People’s Republic of China.  This is upsetting the deal’s backers.

Lattice management and other deal backers think we should all be “satisfied with their efforts to address national security concerns,” and they’re preparing to appeal to President Donald Trump to overrule the expected CFIUS decision.  This is nonsense.  Canyon Bridge is an arm of the PRC government; it isn’t possible to address successfully national security concerns when the government of an enemy is involved in buying one of our technology companies.

CFIUS is correct, if expectations of its ruling prove accurate, and Trump would be wise to decline to overrule.

Update: President Trump has, in fact, declined to overrule, on national security grounds.

“Credible evidence leads me to believe” the buyers of Lattice “might take action that threatens to impair the national security of the United States,” Trump said in his order.

Financial Crises and Regulation

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The increasingly politicized Federal Reserve Bank is getting politicized, and its Chairman, Janet Yellen, and her Vice Chairman, Stanley Fischer, are upset over financial deregulation.

They’re…misguided.  Here’s Yellen’s plea for retaining current, irrelevant and unuseful regulations:

Already, for some, memories of this experience may be fading—memories of just how costly the financial crisis was and of why certain steps were taken in response.

Here’s her deputy’s pretense of superiority:

[O]ne can understand the political dynamics of this thing, but one cannot understand why grown, intelligent people [would] reach the conclusion that [should] get rid of all the things you have put in place in the last 10 years.

What one cannot understand is why grown, intelligent people would reach the conclusion that the age of “all the things” is a useful measure of their continued efficacy.  However, the bureaucratic turf protecting is patently clear.

We’re no longer in a national-level financial crisis; the regulations put in place to attempt to mitigate that long-expired crisis no longer are appropriate.  What is appropriate is for the Fed and that portion of its management that—properly—is apolitical to take steps to help it identify in advance the next national-level financial crisis and to identify—in top-level, general outline form—steps that would seem to be useful to reduce that crisis’ onset and to mitigate the effects of what does arise despite that reduction.

It’s important, too, for the Fed’s apolitical management team to understand that no two financial crises will be alike, and so appropriate pro- and reactive step suites will need to be unique to those crises.  The typical Government one-size-fits-all solution will be destructive, not constructive.

We don’t need a Federal Reserve Bank management team that puts its bureaucratic imperatives ahead of the national financial weal.

Sale of a Stock Exchange

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Good idea?

The Chicago Stock Exchange wants to sell itself to Chongqing Casin Enterprise Group, a Chinese conglomerate whose parent is CHX Holdings Inc.  Never mind that this would be a camel’s nose of the People’s Republic of China into our financial system and expose it to PRC hacking, disruption, theft, etc, etc, etc.

Fortunately, a collection of Congressmen persuaded the SEC to indefinitely delay the sale and purchase.  Unfortunately, the deal hasn’t been killed altogether.

Casin…says it is independent of the Chinese government.

Of course it is. In a nation that is increasing its autocratic control over its economy and the businesses in it.  Sure.

Contra such blandishments, there aren’t any businesses in the PRC that aren’t under government control, whether those businesses are owned by the government or the CPC or operate outside formal ownership: mainland Chinese businesses have government apparatchiks, “advisors,” and CPC monitors in their management staffs.

CHX…says its policies will prevent confidential data from being shared with the new Chinese owners.

And we believe them. In a nation that rules by law instead of being a nation under rule of law, a nation that changes its laws for the convenience of those persons in power, CHX would never alter—or simply ignore—”policy;” it would never steal confidential data.

Sure.

No, not a good idea.  Not this time.  Not this buyer.  Not a good idea at all.