Tag Archives: economics

Of Course He Does

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California has an infrastructure failure problem that involves everything from its roads to its dams and other water control facilities.  Governor Jerry Brown (D) says it will cost $187 billion to fix its infrastructure, and he wants $12 billion per year of Federal funding to help with that.  In actuality, Brown doesn’t want Federal funding, he wants what Federal funding consists of: money taxed by the Federal government from the good citizens of financial straitened New York to help pay for his needs, he wants money taxed by the Federal government from the good citizens of nearly bankrupt Illinois to help pay for his needs, he wants money taxed by the Federal government from the good citizens of fiscally responsible and so flush Texas and Utah to help pay for his needs.

He doesn’t care that his State’s infrastructure is in such poor shape because he and prior administrations of both parties deferred maintenance they knew at the time was promptly needed.

When asked why California hadn’t spent more on infrastructure before, Mr Brown said it wasn’t seen as a priority before. “This is the way the world works,” he said. “The immediate takes precedence over the more fundamental.”

Leadership wouldn’t acquiesce so meekly to the immediate, though.  Leadership would push the matter and get his bosses, the citizens of California in the present case, behind the more fundamental.

Oh, and there is the “green” lobby, too.  Amid all the current plenty of water, all that’s happening is flooding (those badly maintained dams are part of this problem, to be sure), denial of that plentiful water to farmers, and routing of plentiful water that isn’t flooding straight to the sea.  For instance,

the Central Valley Project Improvement Act[] diverted 1.5 million acre-feet of water—roughly a fifth of the total water delivery—annually to wildlife and green hobbyhorses. That ultimately means flushing it out into the ocean. “Basically, they’ve now legislated a permanent drought in the San Joaquin Valley,” Mark Borba, a cotton farmer….

That’s still going on.  And this:

The San Joaquin River Restoration Program, the result of a 2006 settlement in a lawsuit over fish habitat, took away another some 225,000 acre-feet of water annually.

Progressive-Democrats are willing only to spend OPM; fiscal responsibility, discipline in spending their own money is an alien concept.

It’s certainly true that in a republican democracy all of the States are in the nation together, and all of the States need to, are bound to, support each other, as Brown and others have also claimed.  But a major part of that mutual support is each State not creating itself a burden on any of the other 49 through its own wanton profligacy.

Domestic Protectionism

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Illinois State Congressman Michael Zalewski (D), after consulting heavily with General Motors, wants car makers to be able to operate self-driving taxis—which, of course, those same car makers would make.

However.

His bill, introduced February 8, would limit access to the business to companies that make their own vehicles. That means GM would be eligible, but not tech companies like Uber Technologies Inc that are developing their own self-driving cars and don’t make their own vehicles.

Nor would Google be allowed in.  Or Lyft, were they to want to get into the business.  Or an IBM, should it want to build a Watsonmobile.  Or….

After falling behind in self-driving cars, GM has unleashed its powerful lobbying team to cultivate relationships with statehouses. The largest US vehicle maker by sales has a long history of backing legislation to preserve its interests, including a bill in Indiana last year that would stop electric-vehicle maker Tesla Inc from operating its own stores there.

What a surprise.

Of course, GM is denying ulterior motives, but this is just internal protectionism—anti-competitive and monopolistic.  Rather than competition pushing car companies to produce better cars, including self-driving ones, the fearful ones like GM are pushing to squelch competition.

It’s no wonder that a bare nine years ago GM was facing bankruptcy up close and personal.

Immigration—Whose Rights?

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Here’s Mexican Secretary of Economy, Ildefonso Guajardo, on the question of whether NAFTA should be renegotiated:

Logically, there wouldn’t be incentives to continue collaborating on the issues most important to national security in North America, such as the issue of migration[.]

And this:

[T]he Trump administration’s effort to step up deportations have already prompted an aggressive campaign by some Mexican officials, governors and public figures to fight the policy by jamming up US immigration courts.

That particular bit of business has been noted earlier.

Because foreign individuals or those who are part of a flow of migrants have their own right to enter another country, or to be in another country, just because they want to or are on the move?

This is, in many respects, the obverse of my piece yesterday: does a foreign national retain his home country’s rights when he’s inside the US (for instance, Mexico has made it illegal to prevent a Mexican citizen from leaving Mexico)?  Does a foreign national have an intrinsic right to be in our country, independently of our wishes, even our law?

Note to Self: Delete notes to self before publishing a piece.

The Left Gives the Game Away

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Again.  Buried at the bottom of a Wall Street Journal piece on the auto industry’s effort to get the Obama administration’s last-minute (almost literally) attempt to make permanent fuel standards (also last minute because the underlying research wasn’t even going to be complete until 2018) is this rationale from Roland Hwang, at the National Resources Defense Council’s Director, Energy & Transportation Program, as paraphrased by the WSJ.

relaxing standards could hurt Americans depending on clean-car technology jobs.

Because EPA regulations are all about creating jobs and not about mitigating pollution.

Foolish

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Bill Gates, the co-founder of  Microsoft and world’s richest man, said in an interview Friday that robots  that steal human jobs should pay their fair share of taxes.

He said, and he was serious,

Right now, the human worker who does, say, $50,000 worth of work in a factory, that income is taxed and you get income tax, Social Security tax, all those things.  If a robot comes in to do the same thing, you’d think that we’d tax the robot at a similar level.

No, I wouldn’t.  Leave aside his blithe assumption that that money is the government’s in the first place, and not the property of the human worker.  Leave aside his blithe assumption that the government needs the money.  Leave aside his blithe assumption that a human worker should be taxed for a stranger’s current retirement and medical needs (Gates omitted the Medicare-related taxes also collected) instead of his own future retirement and medical needs.  Leave aside Gates’ omission of the employer’s payroll taxes on that human worker’s labor.

The whole point of automation is to hold down costs, is to be competitive with other companies, and an outcome of all of this is lower costs to the consumers who are using—in some cases dependent on—the goods and services being sold.

Recode, citing a McKinsey report, said that 50% of jobs performed by humans are vulnerable to robots, which could result in the loss of about $2.7 trillion in the US alone.

Loss to whom?  One “loss” is to government revenues—but there is no submission of a justification for Government’s need for the revenue.  Another loss seems more real: to the private sector.  The money isn’t lost, though, it’s misallocated—to unnecessarily high cost labor, which translates into unnecessarily high cost to consumers.

Besides—the robots already pay taxes, at every company along the production path that leads to a completed robot: costs of acquisition of that stage’s components—from the mine on up—and income tax on their part of that stage company’s income, and on the final assembly’s cost allocation in the production of the final good or service.

Human workers don’t pay much of this at all.  This is just another backdoor effort to prop labor costs artificially above the value of the labor.  And it’s foolish.