Tag Archives: political economy

Second Verse Same as the First?

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The last time France tried a wealth tax, just a few years ago, it lost a lot of economic income, and the associated tax revenue on it, as the tax-targeted wealthy pulled up stakes and headed to other nations.

Now it looks like the French government is fixing to try that again.

France’s slide into political and fiscal dysfunction is generating a groundswell of support for a sweeping wealth tax that would represent a radical break from the pro-business agenda of President Emmanuel Macron.
The proposal is the work of French economist Gabriel Zucman, a former adviser to US Senators Bernie Sanders [I, VT] and Elizabeth Warren [D, MA]. He wants to impose a 2% tax on the assets of people with net wealth of 100 million euros, equivalent to $118 million, or more.

Here, though, it’s not just the politicians who have trouble even saying the words “cut spending.” The French unions continually demanding their cushy short work weeks and their even cushier pensions are actively aiding and abetting the government’s wastrelly profligate spending and those politicians who push that spending.

This is a tax that won’t end well for France.

Yeah, And?

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The headline says it:

The US Is Forfeiting the Clean-Energy Race to China

The article’s news writers then went on to decry the Trump administration’s decision to do away with “green” energy/renewable energy production subsidies and to push increased production of hydrocarbon-sourced energy.

They had no answers to oil, natural gas, and coal being far more reliable and lower cost than those renewable sources, sources which cannot compete in the market place without those subsidies. They mentioned the alternative, equally reliable nuclear energy production only as an afterthought.

But the argument over green vs hydrocarbon energy, while at the center of the debate, really is only a sideshow.

Why should we care about producing, or not, green energy? Aside from the fact that atmospheric CO2 is plant food rather than a pollutant, the whole underlying premise of human-caused global warming is false.

Earth has been warming since if was formed because the sun has been heating up since it lit off its fusion core.

Today, some 11,000 years after the last glaciation, we’re still cooler than that geologic warming trend. Some 6,000 years after the glaciers retreated, we were warmer than we are today.

Epochs of higher and temperatures than today and higher and lower atmospheric CO2 than today are unrelated to each other: life was lush during both higher temperatures and higher atmospheric CO2. In those times when higher atmospheric CO2 coincided with cooler-than-today temperatures, life suffered.

Ice cores reaching back 400,000 years indicate that atmospheric CO2 increases coincide with, or lag, planetary warming.

Too much national weal has been wasted on chasing the chimera of global disaster from warming already. Let the People’s Republic of China waste its treasure chasing renewables. It’s a foolish race that has no meaning and so can have no serious winner.

It’s time to knock it off.

A Compromise for the SEC?

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A letter-writer to The Wall Street Journal‘s Wednesday Letters section offered a compromise for the SEC’s proposed change to company reporting from all of them reporting quarterly to all of them reporting semi-annually.

Large companies should continue to report quarterly so that stakeholders have timely signals for pricing and risk management. Micro-caps, by contrast, could move to semiannual reporting without leaving investors in the dark if a few safeguards stay in place. Material developments should still be disclosed promptly between reports; companies should provide a short, standardized mid-period update with such core metrics as sales trend, liquidity and interim financials. Whatever the frequency, they should retain a light auditor review to discourage aggressive accounting.

Aside from ignoring the myriad of companies whose sizes are intermediate between micro-caps and large, most of his suggestions are not materially different from the current quarterly reporting requirements. Quarterly reporting, after all, is quintessentially intermediate to semi-annual periods, and his standardized mid-period updates are those quarterly reports.

The only concrete suggestion, material developments reporting, already is required by law: that’s what Form 8-K is for.

And this from the letter-writer:

This approach targets the real pain point—fixed compliance costs that bite hardest at the smallest issuers….

Moving to semi-annual reporting would be a boon for all companies, large, micro, and intermediate. That large companies “can afford quarterly reporting” while smaller companies cannot is a tired and useless trope used to harry the rich and successful in too many milieus already. The trope doesn’t need to be expanded here.

A Constitutional Amendment Proposal

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As  Nicholas Ballasy, of Just the News, wrote Saturday, the Federal government is once again nearing the end of a fiscal year with no serious plan for funding the next year. His lede:

Congress is on its way to missing a “basic” budget deadline for the 29th year in a row, according to the Committee for a Responsible Federal Budget.

And just to emphasize the point:

Meanwhile, the deficit so far into the current fiscal year is larger than the same period last year.

Hence my Constitutional Amendment in its outline if not in its final wording:

If, at the end of any fiscal year, the following year is not fully funded—that is all 12 of the necessary appropriations bills are not enacted into law—then the only Continuing Resolution that is allowed is this one, which is automatically implemented beginning on the first day of that following fiscal year:
All spending by the Federal government is reduced by 10% of the prior year’s level, with the exception of spending on our national debt and our national defense. These two will have their spending held unchanged from the just concluded fiscal year. The spending reduction includes all Federal government spending, including so-called entitlement spending and all “off the books” spending.

This Continuing Resolution will continue in effect until the Federal government is fully funded for a fiscal year by enacting each of the dozen appropriations bills for that year. The Continuing Resolution, including the year-on-year spending reductions, will continue in effect for all subsequent consecutive fiscal years across which the funding failure continues. This means that if Year0 concludes at a spending level with Year1 not fully funded, then Year1’s spending level will be reduced to 90% of Year0. If the funding failure continues into Year2, then Year2’s spending level will have an additional 10% reduction, for a total reduction to 81% of Year0’s, and so on into Year3, Year4, etc.

Amending our Constitution is, by design, a difficult process, and that’s correct: our Constitution is our blueprint for governing ourselves rather than for us being governed; it cannot function as a limit on government if it’s reduced to a reflection of what we think ought be done in the moment and from moment to moment. Nor is a Convention necessary; We the People can convene ourselves to create and then push through an Amendment. It is time, though, to get started; it does take time to propose, write, and then ratify the thing.

Dealing with the PRC

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The People’s Republic of China has decided that the American company Nvidia has violated PRC anti-trust laws and is holding the company hostage in trade negotiations with the US.

China’s antitrust regulator said Monday that a preliminary investigation found Nvidia violated the country’s antimonopoly law in connection with an acquisition of an Israeli company that was completed in 2020. The regulator said the investigation was continuing, and it didn’t elaborate on the alleged violations or say whether it would punish Nvidia.

The PRC is centering its case on Nvidia’s commitment to not cut the PRC off from its chips as a condition of PRC approval of the acquisition. That might make a basis for a legitimate anti-trust beef; however:

Since 2022, the US. government has blocked Nvidia and other American chip vendors from selling many of their top-flight artificial-intelligence chips to China.

Here is the PRC threatening an American company for its compliance with American law.

There are now two strong reasons for American companies to walk away from the PRC and discontinue all business with PRC-domiciled companies or within the PRC under any guise. One is the overt interference with the domestic affairs of our nation. If the PRC doesn’t like our government’s block of Nvidia, et al., selling their best chips into the PRC, its beef is with our government, not with the American businesses it tries to take hostage in its “negotiations” with our government.

The other reason is the PRC’s presumption that it should have veto authority over whether an American company acquires, or otherwise takes a stake in, any non-PRC-domiciled company. If American companies stop doing business in/with the PRC, then the PRC has no approval/disapproval authority over acquisitions—it becomes irrelevant. And that’s as it should be with an enemy nation.