Tag Archives: political economy

Japan is Learning the Reasons

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Reasons for ceasing doing business with and within the People’s Republic of China, that is. In response to Japanese Prime Minister Sanae Takaichi’s remarks that a PRC attack on the Republic of China (Takaichi referred to “Taiwan”) would trigger a Japanese defensive response,

China has unearthed its old playbook of informal coercive moves. Unlike clear-cut export controls, these disguised measures are harder to manage and pose escalatory risks. Governments and companies must grapple with how to respond.
Since Nov. 14, China has issued a series of escalating restrictions: cautioning tourists and students against travel to Japan; postponing the release of at least two Japanese films; and reinstating a blanket ban on Japanese seafood imports.

The WSJ‘s op-ed authors, Victor Ferguson and Audrye Wong, Hitotsubashi University Assistant Professor of International Relations and USC Assistant Professor of Political Science, respectively, claimed

It is hard for governments and companies to respond to such disguised measures effectively and cohesively.

It’s only hard politically. It’s completely straightforward as a practical and economic matter. It’s time for the Japanese to suck up and grunt through the unavoidably disruptive period of disruption and discontinue doing business with PRC-domiciled companies, with the PRC government, and business of any sort inside the PRC.

No Government Bailout

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Not even by city governments, and not even for this.

The Wall Street Journal‘s editors noted that

The New York Housing Conference, a nonprofit that promotes so-called affordable housing, warns in a new report that landlords will need $1 billion in government aid to avoid default. “A significant number of affordable housing buildings in New York City are experiencing operating deficits, where rents are not covering expenses,” the report says.

The buildings are publicly financed, and their costs are skyrocketing—costs ranging from insurance to maintenance to unpaid rents.

This is the problem with government paying for stuff, no matter how glitteringly wonderful the intent might seem.

The city government, the State government, the Federal government—none of them—should be forking over any more of the taxpayers’ money for this sort of thing. The best way to solve this kind of shortfall does not include throwing ever more money into the ever expanding maw of city resident dependency.

Instead, cut the buildings’ costs: get out of the way of rent collections, greatly reduce insurance regulations, property taxes (even public housing must pay these), zoning requirements. Lower sales taxes that drive up the cost of maintenance supplies. Let the market determine wage rates, not bureaucrats snug in their government job sinecures.

Globalism

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New York City Mayor-elect and Progressive-Democrat and Socialist Zohran Mamdani has laid it out quite clearly. In his renewed statement that he would uphold an International Criminal Court (to which the US is not signatory) arrest warrant for Israel’s Prime Minister Benjamin Netanyahu, Mamdani said this:

I’ve said time and again that I believe this is a city of international law, and being a city of international law means looking to uphold international law[.]

No. New York City is an American city, and so it is bound by American law. And that means that at the city level (at the State level, come to that), international law is irrelevant. In the case of the ICC, this is doubly so. With the US not being a part of the ICC or the treaty that created it, neither the ICC nor any of its warrants or rulings have any standing in the US.

Whatever one thinks of globalism, this is globalism run amok. This is how far to the left the Progressive-Democratic Party has gone.

If They Depend on Subsidies…

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…then they shouldn’t be in business. The subheadline laid it out:

Republicans want to shift subsidies away from some of the frailest companies in the industry

In this context, “the industry” is the health care coverage industry, and the subsidies are those paid health coverage providers in the Affordable Care Act. I claim, though, that “private” companies that require government handouts are neither all that private nor deserving of staying in business. If they cannot survive without taxpayer money as anything more than a shortish-term loan to survive a catastrophe, they should be left to go out of business.

The news writer at the link made a big deal out of the need for the subsidies to those coverage providers in order to hold down the prices—the premiums—the customers pay for the policies, jerking tears especially for the lower income customers. What he does not address, though, is the deductibles and the out-of-pocket caps those Obamacare policies have. The deductibles and caps each separately represent significant fractions of those lower income customers’ income. They, especially, had better not get sick. If they do, their strait is not much different from that of those folks who are uninsured at all.

The subsidies paid into their hands directly would at least give them a little relief, but that’s only a stop gap. The real solution is to eliminate the ACA altogether and free up the health care coverage industry, restoring it to a health insurance industry in a free market with policies marketable nationwide, rather than limiting them to intrastate sales with the permissions and regulations of fifty different States.

Companies providing health care coverage or insurance should see their prosperity in how well they treat their customers and how well they serve them. Their prosperity should not come from government handouts—transfers from us taxpayers who don’t use their services.

New Acquisition Strategy

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Defense Secretary Pete Hegseth wants one, and he’s on the right track. Critical to that will be his willingness and ability to fire the bureaucrats in DoD who stay in the way of the critical changes Hegseth wants, but that’s a separate story. What Hegseth wants is faster, more flexible acquisition processes that enable, rather than hinder, competition in acquisition and production and that foster rapid contract letting and fast production of the contracted for articles. In loose sum,

… Overregulation, diffused accountability, and insufficient competition [must be eliminated]. “Every process, every board, and every review must justify its existence,” the secretary said.
The Pentagon essentially wants to make faster and more flexible contracting authorities the default instead of the exception, and give more priority to the private economy to solve military problems.

One step along this evolution was this that the WSJ editors noted:

Welcome is concentrating more authority in a “portfolio acquisition executive,” who could oversee a suite of programs and make tradeoffs on cost and performance. The current system includes far too many layers of authority. “Program managers answer to dozens and dozens of folks” and “have to go get permission to move a dollar to a better priority,” a former US Navy secretary for acquisition told Congress this year.

Hegseth needs to be absolutely draconian in removing those extraneous layers and terminate the vast majority of the bureaucrats incumbent in them. Very few bureaucrats will warrant reassignment within DoD, and there are—or should be—very few open slots for reassigning into.

I add a couple of improvements to all of this. Hegseth wants to buy the 85% solution and iterate together over time to achieve the 100% solution, but as articulated, it’s insufficient, with too much room for weasel-wording added pricing costs by the contractor. Rather than simply jawboning against endless specs, requirements creep must be stopped cold. Changes to the specs often are warranted, but better is the enemy of good enough, preventing the good enough from being acquired at all, leaving us completely without. “Better” should be included in follow-on contracts—or new contracts—and only after “good enough” has been in operation for some years. That will determine whether that “better” really is and, if so, will provide justification for that “better” going to testing and production.

In parallel with cutting off requirements creep by the contractor, requirements creep by DoD personnel must be cut off, also. Those new and better requirements that come from Pentagon bureaucrats (and here I include the myriad flags and O-6s and O-5s looking for Efficiency Report material for the sake of their personal careers and/or for post-retirement employment with those contractors) must only be considered after the system they’re “improving” has been in the field, operationally employed for some years.

A second parallel is cutting off mission creep by DoD personnel. The system under consideration is being designed, built, and employed for a particular class (narrow or broad) of missions. If the mission changes, or a new mission is identified—and they will be—those needs can only be considered for the next upgrade to the existing system, or the changed/new mission’s needs will call for a new system.

And this: those systems will consist of a platform for carrying and delivering to the targets those bullets, bombs, missiles, drones, what-have-you that will do the destruction of the targets. Those platforms must be as generic as possible so as to be able to carry new and improved bullets, bombs, … with as little physical modification as possible, requiring only software upgrades (which means the platform’s computers must be capable handling the newer generations of software). The flip side of that must include the requirement that the upgraded/replacement bullets, bombs, … and software must be designed to fit onto the existing platform as much as possible. It’s certainly the case that a platform will wear out or the new and improved bullets, bombs, … and software will truly need a new platform, but those should be the greatly infrequent exception rather than the norm.