Tag Archives: political economy

Veto Authority

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The People’s Republic of China has once again reached into American businesses to control what they do.

This time, it was the proposed acquisition by Cisco Systems of Acacia Communications, both of which are American companies. The PRC condescended to approve this acquisition—subject to certain conditions the PRC dictated.

The PRC also is actively interfering with the American company Applied Materials’ proposed acquisition of Kokusai Electric Corporation, a Japanese company.

Earlier, the PRC interfered with, to the point of blocking, a merger between Qualcomm, an American company, and NXP Semiconductors NV, a Dutch company.

A question that the Biden administration must answer: why do we allow an enemy nation—the PRC—to have veto authority over American business’ decisions such as mergers and acquisitions?  I’m not sanguine that the administration will even take on the question, much less answer it in any way favorable to our businesses.

Related to this is why Europe’s nations, the European Union, or Asian nations cede similar authority over their businesses to the PRC.

None of us need the PRC market that badly, especially since the non-PRC Asian markets are readily available, as are those of South America and Africa—the latter two which could easily lose much of their own government graft with the greater economic prosperity that would result from greatly increased trade and business penetration.

These are private companies making these decisions, to be sure. The PRC, though, isn’t only dictating how those companies must operate within its border–a right of any nation–the PRC is dictating how those companies must operate anywhere in the world. The PRC’s vetoes of mergers and acquisitions are global.

In aggregate, such companies’ desperation to do business in or with the PRC at the expense of acceding to the global diktats of our common enemy threatens the security of each of our nations.

More Bigotry of the Progressive-Democratic Party

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This time as espoused by President Joe Biden (D). In describing one way his administration would fight the Wuhan Virus situation, then-President-elect Biden said this:

Our priority will be Black, Latino, Asian, and Native American owned small businesses, women-owned businesses, and finally having equal access to resources needed to reopen and rebuild.

He went on to call this “equal access to the resources needed to reopen and rebuild.”

That’s not equal access; that’s preferential access. And that preference isn’t based on merit or actual need, it’s based—in Biden’s own words—on race and gender. Progressive-Democrat disapproved of Americans are to be sent to the back of the bus—if they’re allowed to board at all.

This is a racist- and sexist-based form of “assistance.”

Biden also commented on working to get around “systemic barriers to relief.” As a Supreme Court Justice has already noted, [t]he way to stop discrimination on the basis of race is to stop discriminating on the basis of race. The concept easily extends to sex and to all other forms of non-merit discrimination.

The Progressive-Democratic Party, now as openly espoused by its head, has chosen not to do so.

Too Much Dependence

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…on the central government in DC.

Sunday’s Wall Street Journal had a piece decrying the problems with getting the Wuhan Virus vaccines “the last mile” into folks’ shoulders. They’re right that that’s a serious problem. Even though the Federal government is behind schedule on getting vaccine doses into the States’ hands, those States have the bulk of those delivered vaccines still in the refrigerators, uninjected—they’re vastly behind schedule.

The States and locals, though, are mischaracterizing the problem. Typical is this:

Jeff Duchin [Health Officer & Chief, Communicable Disease Epidemiology & Immunization Section, Public Health], Seattle and King County, WA, said the federal government succeeded in helping fund and purchase vaccines that were developed in record-breaking time, but said it didn’t do nearly enough to ensure that the “last-mile” distribution efforts would be successful.

He’s badly mistaken, and that’s dangerous for Washington’s citizens, and the error itself is dangerous for all Americans. That “last mile” is, and can only be, the responsibility of the States. The Federal government has no authority there.

That’s the nature of our federal republic structure of governance.

The States—Progressive-Democrat-run and Republican-run alike—had been told for months that vaccines would be available by the end of the year. Where was their planning? Even if they didn’t believe the ability to execute commitment, or the commitment itself, that prior planning would have been useful whenever the vaccines arrived. The States chose not to bother.

An Empirical Test?

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Ex-Progressive-Democratic Party Presidential candidate and ex-entrepreneur Andrew Yang now is running for mayor of New York City, and he wants to implement there his Universal Basic Income scheme.

We can eradicate extreme poverty in New York City. If you put just a little money in their hands it can actually be what keeps them in their home and, again, avoids them hitting city services that are incredibly expensive.

Or not.

Keep in mind that demand is not the number of people who want a product, it’s the amount of money being spent for the product.

The problem with giving unearned money to everyone—using the $1,000/mo, or $12,000/yr, from his Presidential campaign for concreteness—is that you increase demand (this time artificially) by those $12k/yr. Since production won’t increase much—the money representing demand won’t be earned from production, it’ll be printed, or it’ll come from taxes, or it’ll come from borrowing (future taxes)—the result will be pure inflation.

That inflation will rise to fully absorb those $12k, leaving buying power where it was before the UBI started getting handed out. The $2 candy bar will cost $24, and the UBI will be completely absorbed. The recipients will be no better off than before.

In fact, everyone will be worse off. Inflation will leave everyone’s buying power fundamentally unchanged, but money taken out of the economy by those taxes or that debt will lead to an overall reduction in economic activity. Taxes or debt (either one) will reduce businesses’ ability to innovate—which is jobs—or to give bonuses/pay raises—which is jobs—or to improve existing plant—which is jobs—or to hire more employees—which is jobs—since absent innovation, there’ll be reduced ability to expand.

Or, Yang is onto something.

If so, what better place to run the test than in the aftermath of Bill de Blasio’s New York City?

On-Line Sports Betting

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That’s the venue, but the question is much larger.

New York Governor Andrew Cuomo (D) is moving to authorize mobile sports betting, by having his government conduct “competitive bidding” for government permission to host such.

State Senate Racing, Gaming, and Wagering Committee Chairman Joe Addabbo (D, Queens) said in an interview that

he was glad the Democratic governor had shifted away from his opposition to online betting but believed the state should enact a more expansive system.
“I am not a believer that one sportsbook provider, or operator, can handle the volume in New York[.]”

Both miss the larger problem. In a truly competitive process, private economy entrepreneurs would start their own mobile sports betting enterprises, and they would compete—on the basis of product quality and breadth of services—for the consumer’s dollar. They wouldn’t be forced to compete—on the basis of politics—for the government’s imprimatur.

This is another Progressive-Democrat-run government’s attempt to control businesses.

As Michael Corleone (almost) said, It’s not business. It’s strictly politics.