Tag Archives: economics

The PRC’s Markets

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Beijing thought they could “rescue” the PRC’s stock market. Recall that those markets had tanked collapsed last month, with no bottom in sight. Then the government stepped in:

There is the buying program financed by the central bank. A state pension fund has gone into equities for the first time. Beijing mandated that anyone holding 5% of a company can’t sell for six months. And brokerage firms, directed by regulators, are sitting on a boatload of shares as inventory, notes Erwin Sanft of Macquarie.

There’s also the government rule that stocks aren’t allowed to fall more than 10% in a day—at that threshold, trading in the stock must halt. This, of course, only adds sell-off pressure to the next day…. There are additional overt government interferences, but you get the idea. Associated with this, the markets stopped falling and rose quite a bit. And there’s the PRC buying for its government accounts shares of Chinese blue chip companies, ostensibly to prop up those share prices.

Monday, all that propping up came to a screeching halt. Those markets fell, in that single day, 8.5%, and the representative indices stand at just 5% above the pre-intervention low of three weeks ago.

All of that fall represents investors—at least the ordinary citizenry and those investors not directly under government control—leaving the PRC’s markets. At this pace, the only players left will be the government and its agencies and government run “private” institutions. And the government’s blue chip stock holdings.

That’s a centrally planned economy by another name.

Democrats and Unions

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Illinois’ Democrat-controlled legislature—both houses—passed a budget earlier this year that spent $4 billion more than it intended to collect in revenue: a $36 billion spending bill against a $32 billion revenue bill. Never mind the rank dishonesty of this—bankrupt Illinois has no hope of raising those $4 billion except by borrowing, and these Democrat legislaturists know that. They have no intention, then, of repaying the borrowing, and that’s the dishonesty.

But leave that aside for a moment, and consider the following.

Governor Bruce Rauner (R) vetoed the bill because of that deficit, so the State is operating without a budget. Nevertheless, Rauner said the State would keep paying its government employees; as AFSCME said in support of Rauner’s decision,

public service workers in state government are on the job despite the lack of a state budget…and they should be paid for their work on time and in full.

Well, not so fast. Illinois’ Democrat Attorney General Lisa Madigan (just by happenstance, she’s also the daughter of the State’s Democrat Speaker of the House, Michael Madigan, whose own father was a New Deal pusher), with the full backing of her Democrat legislaturists, went into Illinois’ courts to block payment for those same “public service workers.”

Strictly to make a political point for their own benefit, these legislaturist Democrats are trying to prevent their employees from being paid, and they’re using their (erstwhile?) union allies as speed cushions for their bus. The Democratic Party of Illinois is typical of the national Democratic Party.

Democrats and Regulation

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Uber is successful in competing with the established taxi industry, and New York City Mayer Bill de Blasio (D) is all upset about it. He wants to freeze Uber’s (and other ad hoc rides-for-hire companies’) growth until he can figure out how to regulate them:

[W]e support a short pause in the rapid increase of for-hire vehicles to make sure that the future growth of this industry lives up to the policies and principles we set out as a city.

“Short pause.” Sure. He supported his argument in that piece by citing other jurisdictions where Uber had resisted…being over-regulated.

Hillary Clinton is his BFF on this:

while the “gig economy” may be “exciting” and “unleashing innovation,” “it is also raising hard questions about workplace protections and what a good job will look like in the future.”

Because. Just because. It exists; it has to be regulated.

Democrats abhor anything that’s not under their regulation, not under their control. Americans just are too stupid to see to their own affairs without Know Betters instructing us. And our Know Betters are the only ones qualified to define “what a good job will look like in the future.”

Update: de Blasio seems to have recognized the error of his ways. For now.  Clinton has not.

An Excess Profits Tax

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In 1917, Progressive icon Woodrow Wilson instigated an excess profits tax running from 20%-60% because, of course, the Progressive knew better how American business owners should spend their money than did the Americans who’d actually earned it through their businesses.

During the Great Depression, Democrat (and Progressive) icon Franklin Roosevelt instigated two excess profits taxes while openly slandering American businessmen as being on a capital strike: Roosevelt actually accused businesses of refusing to spend—at rates satisfactory to the Democrat (and Progressive)—the profits they’d earned.

Now we get the proud early 20th Century Progressive, Hillary Clinton, with her proposal for a “tax credit…to encourage more businesses to offer profit-sharing to their workers.”

Progressives still claim to Know Better what American business owners should do with their money than those business owners who did the work to earn that money. Progressives now also claim to Know Better what labor agreements are fit to be negotiated between employee and employer than those employees and employers—American citizens.

Now, the Progressive wants to foist tax credit onto us, to “encourage” businesses to spend their excess profits—her definition—because, of course, she Knows Better.

She also knows full well that with a tax credit, she’s intends to force all of us to pay a tax on a business’ “excess profits.” She knows full well where the money must come from in order to pay that “credit:” from higher taxes or more borrowing.

She closed her proposal with this bit:

I really think our corporations are missing a big bet. Because credible studies prove that profit-sharing with your employees is good for the employees, good for the businesses, good for the economy. I want to incentivize more companies to do just that.

Never mind that businesses are in the business to make money, not to serve as privately funded, government mandated jobs welfare programs. Never mind that in a competitive—that is to say, a free—market economy, businesses have to compete for employees as well as for customers. Never mind that the incentives are present in a free market economy for businesses to get the most out of their employees.

And so never mind that to the extent “credible studies” are right about the efficacy of profit sharing, in a competitive, free market economy businesses already would have profit-sharing plans.

Oh, wait, they’re just not set up in a way that suits this Progressive. The businesses are missing her bet. And so she demands that we all pay.

As an aside, some homework: crunch some numbers, and see whether a $750 credit for a $5,000 profit-sharing payout makes any sort of sense for a company laboring under the US’ highest corporate tax rate in the world—35%—on all profit, “excess” or not. See whether Clinton has any clue at all.

There’s Science

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…and there’s…science.

The Environmental Protection Agency for years has issued costly clean air rules based, in part, on two ’90s-era studies linking air pollution with death.

But, critics say, the same agency has stymied efforts to access the data behind them.

EPA Administrator Gina McCarthy thinks that suppression is entirely jake [emphasis added in the summary of her position].

For its part, the EPA has argued that releasing the data could compromise confidential personal information, and that it didn’t have access to all the research anyway, among other issues. The agency made an effort to contact the original institutions behind the studies in 2013, but Republicans say they again would not hand over everything.

There’s so much wrong with that, so much that’s wholly dishonest. For starters, what rule-making data has personal information among them? The data clearly were aggregated and stripped of personal information, since they were gathered by responsible researchers. The data clearly were aggregated and stripped of personal information, also, because such information is completely irrelevant to the studies for which they were collected and would only have cluttered the data.

Then, on what basis is EPA making rules when they don’t have all the underlying data? Is this another case of We Know Best, we don’t need no stinkin’ data?

To add insult to her disingenuosity, McCarthy added this to her testimony in front of the House Science Committee:

The EPA totally supports both transparency as well as a strong peer-reviewed independent science process, but the bill I’m afraid I don’t think will get us there. I don’t actually need the raw data in order to develop science, that’s not how it’s done. … I do not know of what value raw data is to the general public.

Wow. “I don’t actually need raw data….” We don’t need no stinkin’ data. And the transparency bit that McCarthy so fatuously claimed: she’ll be transparent, but only with her chosen few.

She doesn’t know the value of the data to the general public? Here’s all she needs to know about the value of raw data to the general public: her boss—that general public—wants it.