Tag Archives: economics

Tough To Do Inside the EU, Though

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Here’s an area where it really would be good to look like Europe, or at least the UK part of it.

UK Treasury chief George Osborne unveiled a major shake-up of corporate taxes in Britain on Wednesday, saying he intends to lower the main rate companies pay to less than half the rate levied on firms in the US.

Of course, such tax rate competition is hard to do in the EU, what with the European Commission’s utter dislike for it.

It may be that the British really will need to leave the European Union, if they want to compete in the global economy.

The House Budget Blueprint On Offer

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The debate is well worth having.

House conservatives have vowed to block a fiscal 2017 budget put forth by Republican leadership Tuesday, saying it doesn’t cut spending enough and creating uncertainty over the GOP’s ability to pass a fiscal blueprint this year.

Never mind that the blueprint cuts spending by $6.5 trillion over the next 10 years and, if future Congresses stick to the plan would eliminate deficits and so permit beginning to pay down the nation’s $19 trillion debt.  The cuts in the first year of these 10 years don’t go far enough to suit these self-styled conservatives (small-c, you’ll note).

It’s certainly true that real cuts in the hand are worth two (or more) promised cuts in later years; however, this is the first budget plan in decades that actually, explicitly promises those later cuts and to that concrete end.

But: as these guys consider blowing up another budget plan, they need to ask themselves how much spending they’ll be able to cut if they force a plan that has no hope of being enacted?  What do they think will be the value of their political symbolism?

Federally Mandated Wages

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Here’s another fiasco-in-waiting being manufactured by the Progressive-Democrat Party and its leader, President Barack Obama.

The Obama administration has advanced to the final stages a contentious rule that will make millions more Americans eligible for overtime pay….

The Labor Department sent its final version of the overtime-pay regulation to the White House Office of Management and Budget on Monday for review, according to an administration official.

This rule will force employers to pay overtime for hours worked beyond 40 in a week to salaried workers whose annual basic salary is $50,440 or less—an increase of more than 200%.

As any grade schooler who’s on an allowance knows, when the price of something goes up, the grade schooler buys less of that thing.  When the price of labor goes up….

This government interference in the private economy will have two effects: salaried employees who used to put in the overtime now will be barred from that—to the overall detriment of the company’s productivity and so competitiveness, and from that to the detriment of the jobs of that company.

Alternatively, the company, in an effort to maintain company-level productivity, will suck up and pay the overtime.  This will drive up the cost of the company’s products, reduce the funding available for R&D, and from that harm the competitiveness of the company to the detriment of the jobs at that company.

Alternatively, the company will hire fewer workers, replace fewer workers who depart for any of a variety of reasons, to the detriment of employment generally.

These folks of the Left know that; they’re some of the smartest people around, as they assure us.  But, hey—union votes.

Central Management

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China is having a harder time managing a property market that is diverging, the country’s housing minister said Tuesday.

“The differences are severe, and it is worsening,” Chen Zhenggao said at a news conference on the sidelines of the National People’s Congress on Tuesday.  “The situation in the first-tier cities and the third- and fourth-tier cities are different, which brings about challenges to our regulatory work, and is a major issue.”

[emphasis added]  And this:

“This is a trade-off,” said Rosealea Yao, an analyst at Gavekal Dragonomics.  “On one hand, you want rural workers to buy homes,” she said.  “But there is a need to prop up housing prices because Chinese people only buy homes when prices are rising.  Inadvertently, this then fuels sharp gains in home prices in first-tier cities.”

There’s a hint there about the utility of managing a large, complex economy from a center that’s far distant from that economy.  Maybe, just maybe, the PRC should lay off from those one-size-fits-all rules.  Or even lay off from regulating so much at all.

Of course, that would mean a lessening of personal power for the men of the PRC government….

The Truth

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…is beginning to come out.

At a CNN Ohio coal country Townhall involving Progressive-Democrat Party Presidential candidates Hillary Clinton and Senator Bernie Sanders (I, VT), Clinton said, in all seriousness,

I’m the only candidate which has a policy about how to bring economic opportunity using clean renewable energy as the key into coal country, because we’re going to put a lot of coal miners and coal companies out of business.

Her campaign then clarified, in a post-Townhall statement, that her plan “would also safeguard workers’ retirement and health benefits.”  But do nothing about their current jobs so they can get to retirement, apparently.

In an MSNBC-hosted Townhall, Clinton also said this with a straight face:

Now, is Libya perfect? It isn’t.  Libya was a different kind of calculation [from Syria] and we didn’t lose a single person….

Because #FourLivesDon’tMatter.

Hmm….