Tag Archives: political economy

Time to Buy

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Ex-President Barack Obama (D), he of the open contempt for ordinary Americans, us bitter Bible- and gun-clinging denizens of flyover country (i.e., the vasty expanse of America that lies between the western coast and the northeastern coast), is at it again.

Former President Barack Obama, in his latest memoir, criticized Americans for liking “cheap gas and big cars” more than they care about “the environment”—even during a catastrophic event like the 2010 Deepwater Horizon oil spill.

And

…many American voters for decades had “bought into the idea that government was the problem and that business always knew better….”

That last is fully vindicated by the arrogant Know Better attitude of Obama and his ilk, who insist that Government is the only solution, and us petty voters need to sit down, shut up, and do what we’re told.

It’s true enough that business is imperfect and often screws up. However, even with that, it’s axiomatic that business always knows better than Government.

With Obama spouting off again, it looks like it’s time to go out and buy a Humvee and a muscle car or two.

A Start

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But badly insufficient. The Trump administration is trying to form an ad hoc coalition of Western nations that would respond to the People’s Republic of China’s economic aggression. The effort would

create an informal alliance of Western nations to jointly retaliate when China uses its trading power to coerce countries, administration officials say. They say the plan was sparked by Chinese economic pressure on Australia after that country called for an investigation into the origins of the Covid-19 pandemic.
…
“The West needs to create a system of absorbing collectively the economic punishment from China’s coercive diplomacy and offset the cost.”
Under the joint retaliation plan, when China boycotts imports, allied nations would agree to purchase the goods or provide compensation. Alternatively, the group could jointly agree to assess tariffs on China for the lost trade.

Taking defensive measures is necessary, but it’s badly insufficient. This coalition needs also to be ready, willing, and able to take offensive action, action that would inflict far more damage and cost on the PRC than its own economic assaults would inflict. Tit-for-tat tariffs would be less than useless, they’d only be practice bleeding.

So far, though, “the West” other than the US has shown little backbone for facing down the PRC’s aggression, economic or otherwise. Sadly, too, Progressive-Democratic Party Presidential candidate Joe Biden has shown little inclination to do anything that might upset the men and women of the PRC government.

The Business of Business and the Wuhan Virus

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Another precinct is passing in its results.

After scrambling to hoard cash in the spring, some large US companies that halted their dividend payments are reversing their decision, a sign that their leaders believe the worst of the crisis is behind them.

Mark Zandi, Chief Economist at Moody’s Analytics:

The resumption of corporate dividend payments is an encouraging sign that executives believe that the pandemic will soon be behind us.

And

[Kohl’s r]evenue fell 14%, compared with a 23% drop in the previous quarter. Kohl’s said it would resume its dividend in the first half of 2021.

And

Retailer TJX Cos said last week that it would resume its dividend, but at a 13% higher rate than it last paid in March, citing its cash flow and $10.6 billion in cash on its balance sheet. The company has reopened most of the TJ Maxx, Marshalls, and HomeGoods stores it had closed in the spring.
“We are very bullish on the longer-term outlook because that feels significantly better than it did at the beginning of [the third quarter] when we didn’t know where all of this was heading,” CEO Ernie Herrman said on a conference call.

Those are just a few of the myriad illustrative examples that aggregate into the trend. It’s time the bureaucrats in our governments, at all levels of jurisdiction, stopped abusing their authority and stopped their panicky responses to the Wuhan Virus situation.

Full stop.

Tyranny and the First Amendment

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On the matter of Target’s initial attempt to ban a book (Irreversible Damage: the Transgender Craze Seducing Our Daughters for those following along) because some folks objected to it, followed by Target’s reversal and decision to sell the book after all, a letter-writer published in The Wall Street Journal‘s Thursday Letters had this remark:

Lobbying the government to make a book illegal is pro-book banning. Lobbying Target to take a book off the shelves is pro-capitalism.

This is not even close to correct. Lobbying Target to take a book off the shelves is suppression of speech, even when done by private citizens.

Not buying the book is capitalism. Encouraging one’s fellows to not buy the book—boycotting the book—is capitalism.

Demanding the book not be sold denies others those same choices, along with denying them their opposing choice to buy the book. That’s at the core of tyranny.

Tax Breaks

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In particular, child tax credits and their proposed expansion, but the principle below applies across the board.

…pair the expansion of the child tax credit with extensions of expiring business-tax provisions, some of which have Democratic support.

Pairing in order to get the credit passed, one being a bell for the other’s whistle.  Refundable credits, too, so those who don’t pay much, if any, income tax can get their own taste. Here’s Progressive-Democratic Party Presidential candidate Joe Biden’s offer on the credit:

…a temporary expansion of the child tax credit that would bump the $2,000-per-child credit to $3,000 for most children and to $3,600 for those under age 6. He would expand the credit to include 17-year-olds and allow monthly payments, so families wouldn’t need to wait for lump sums at tax-filing time.
Mr Biden’s proposal would cost more than $100 billion a year.

Leave aside the fact that refundability is spending increase, not taxing cut.

Here’s a better idea: lower income tax rates (permanently) across the board, for both businesses and individuals.

Leaving all that money in the private economy, which is to say in the hands of the businesses and individuals who are earning the money, pays far more benefits far more quickly, running from the folks more efficiently spending their money than can any government spend it for them through businesses having more—again, of their own—money for capital improvement, product/service development, R&D, wages, hiring.

All that increased economic activity—real activity, not the fiction of government spending as economic activity—is what will help families with children. And if Government—or rather the politicians populating Government—take the additional step of not singling out particularly favored groups of Americans for special treatment, that increased economic activity will particularly help minority families, who are the ones most needful of access to that increasing prosperity.