Tag Archives: markets

What Did They Expect?

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Russia has cut off natural gas deliveries to Poland and Bulgaria as Putin prosecutes his invasion of Ukraine.

European officials denounced the move, which threatens the continent’s energy supply, as blackmail by Russia.

This is war. What did these “European officials” expect when they made the conscious decision to create themselves dependents on the energy good offices of an enemy nation? And how could they not recognize Putin’s Russia as an enemy nation, given his years of rhetoric laying out his plans for and goal of restoring the Russian empire that was the Soviet Union—an empire that includes Eastern European nations, many of which are part of NATO, and one of which has been absorbed into a NATO member nation?

Other large European gas consumers like Germany and Italy haven’t been affected so far.

Of course not. Germany and Italy are much more compliant dependents. Germany in particular has been busily slow-walking, if not outright obstructing, weapons support for Ukraine. Never mind German Chancellor Olaf Scholz’ talk about freeing up arms shipments to Ukraine. All he’s done, despite two such rounds of word-based commitments, is talk. No concrete movement, beyond an insultingly puny shipment of helmets, has followed his chit-chat.

Latvia’s Prime Minister Krišjānis Kariņš is much more clear-eyed on the matter.

This is part of the war; this is how the war affects us. The Ukrainians are paying with their lives, we are paying with higher energy prices.

But, then, Latvia, along with the rest of Eastern Europe, well remember what it’s like to live under Russian jackboots. Central and Western Europe, safe and secure and rich and fat and soft three and four generations after WWII and with all those Eastern Europe nations as buffers for their comfort, have chosen to not remember.

Corporate Tax Rate Cuts

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…must lead to Federal government tax revenue reductions. Or so Progressive-Democrats claim. Say it ain’t so, Joe. President Joe Biden (D) won’t say it, though, so I will. It ain’t so, as this table from The Wall Street Journal illustrates.

When you leave money in the hands of private economy operators—individual or corporate—they do productive things with their money. That productivity leads to more R&D, more innovation, more physical capital improvement, physical capital expansion, wage increases, more jobs (which represent the mothers of all wage increases, for many, from zero wage to an actual paycheck), the latter two leading to human capital improvement, which leads to greater private economy demand for goods and services, which leads to greater production of those goods and services, expanding the economic virtuous circle.

In comparison, Government merely redistributes from one operator—individual or corporate—to another its collected revenues, producing very little. Even the redistributions to noneconomic operators—individuals on welfare, for instance—the resulting production has less value than the transferred funds. The recipients of those redistributions have very small demand increases from the redistributions since they start out with small demands: they’re unemployed or employed only in low-wage, low-value jobs, and all those redistribution payments do is trap those folks in those two statuses.

All of that is even before any discussion of any need for the tax revenues Big Government Progressive-Democrats claim exists.

Insufficient

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People’s Republic of China government securities regulators are offering a change to PRC securities laws that would remove a requirement that

audit inspections of overseas-listed Chinese companies be done mainly by Chinese regulators.

Another part of the PRC regulators’ offer:

Under the draft rules, the burden of protecting state secrets now falls to private companies as well. They have to report to the financial watchdog and other authorities before cooperating with overseas regulators.

Far from being a serious offer, this is insulting.

PRC regulators of companies possessing PRC state secrets—or held to possess them by the PRC government—will have too easy a time using the secrets excuse to delay, obfuscate, or outright censor any effort at an audit.

Audits not being done “mainly” by PRC regulators are not the same as agreeing to let host nation auditors—American auditors in our case—have full, complete, open access to PRC company books immediately on request, including no-notice requests.

Anything less is too much interference with the audits of companies listed on our exchanges, whether foreign companies are PRC-domiciled or elsewhere.

The SEC must not take this move by the PRC seriously.

Idiocy

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David Cameron, once (and future?) British Prime Minister, thinks that if Russian President Vladimir Putin attends the upcoming G-20 meeting, everyone else should boycott the meeting.

Cameron griped, among other things that when Putin and then-President Barack Obama (D) attended the G-20 meetings in ’14 and ’15,

the conversations with Mr Putin were worse than pointless.

Then Cameron gave the game away, amusingly, without recognizing it.

What does or doesn’t happen at the G-20 won’t change the world.

Indeed. The G-20 is a coffee klatch wherein previously and behind the scenes decisions are announced. Otherwise, the gathering is just a see-and-be-scene show for the political glitterati of the developed world.

Conversations with Putin are, indeed, worse than pointless, but avoiding the G-20 because Putin shows up is the wrong answer.

Instead, boycott Putin, don’t waste time on conversations with him. Don’t interact with him at all. For those two seated next to him at dinners, they should turn their backs on him and converse with the dinner companions on the other side.

Boycotting the G-20 if he shows up would be just a toddler-ish face-spiting nose-cutting temper tantrum. Or a cowering away from the Big Bad Man.

A Thought on Gasoline Production

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I had one. Take a breath.

California citizens pay a far higher price for a gallon of gasoline than even the average nation-wide: $5.79 against $4.29. Most of that difference comes from California’s State-unique regulations imposing, for instance, a low-carbon fuel standard and cap-and-trade taxes.

Separate from President Joe Biden’s (D) war on fossil fuel-sourced energy inflating the price of energy generally and gasoline in particular, that California price-inflating set of requirements also inflates the cost of gasoline nationally, since refiners are reluctant to produce separate kinds of gasoline for separate markets. Which brings me to my thought.

Refiners should produce a single type of gasoline related to carbon content, cap-and-trade taxes, and other froo-froo, based on the lower levels of regulatory interference in the rest of the nation, and sell that gasoline virtually nation-wide. Then they should offer to sell that single type to California buyers together with license(s) so those buyers can to modify the refiners’ product as they wish to bring that gasoline to within California desires.

In this way, drivers in the other 49 States would get a lower cost fuel from the refiners’ not having to impose some of that California cost on the rest of us, and the refiners would be able to recoup in the form of license fees most, if not all, of the putative costs of not selling directly into the California driver market.