Tag Archives: political economy

Export Incentives Coupled with Domestic Disincentives

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The People’s Republic of China has moved to shut down the domestic marketing of wild animals on fears [wild animal traders’] goods sparked the coronavirus pandemic. This is a seeming response to growing international pressure on the PRC to cut that out for that reason.

[The People’s Republic of] China’s National People’s Congress on February 24 imposed a ban on the sale and consumption of wild animals in the country.

However.

Less than a month later, [The People’s Republic of] China’s Ministry of Finance and tax authority said on March 17 they would raise value-added tax rebates on nearly 1,500 Chinese products, including offering a 9% rebate on the export of animal products such as edible snakes and turtles, primate meat, beaver and civet musk, and rhino horns….

As the Congressional Research Service, cited in the article at the link, mentioned, the export move

could spread the risk to global markets[.]

You think?

The CRS’ report further noted,

Absent in [The People’s Republic of] China’s policy push are incentives to encourage the sale of pharmaceuticals, PPE, and other medical products overseas[.]

Hmm. Makes me wonder just what the PRC is up to, really.

 

The CRS’ report can be read here.

Capitalism

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William McGurn had a piece in Monday’s Wall Street Journal about Bernie Sanders’ (I, VT) attitude toward capitalism, centered on Sanders’ view that every economically successful person is necessarily selfishly greedy, and by extension, that that person’s success is from the fundamental zero-sum nature of capitalism.

Sanders is wrong.

At the bottom of capitalism is an entirely voluntary exchange between two people, each seeing to his own interest. At the end of the exchange, each has satisfied his own interest: each is better off from the exchange than he was before it because each has gained something that he wanted and didn’t have.

And: each, with that exchange, has made the other better off, too.

It scales up. Businesses prosper by making their customers better off, and by giving those businesses their custom, customers make those businesses better off. The better each does—at satisfying both themselves and the others—the better the other does, too.

Both of these are lost on folks like Sanders, and Joe Biden. They don’t even conceive the notion.

Their blinders notwithstanding, though, it’s hard to find a more moral economic system. It’s also hard to find a less zero-sum economic system.

Tariff Relief

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Several US companies are saying that the existing tariff regime that’s applied to imports from the People’s Republic of China is hurting imports of chemicals necessary for the manufacture of disinfectants and sanitizers. Accordingly, medical supply companies and other businesses have filed dozens of applications for tariff relief/exception related to those imports.

If such relief is granted to an importing company, it should be contingent on that company acting expeditiously to move its supply chain out of the PRC. The move also must include non-PRC suppliers that import their own component supplies from the PRC. “Expeditiously” should be explicitly defined in the relief document as a time frame or a production milestone, and the relief should automatically expire if that deadline/milestone isn’t met.

Tariff relief should be granted to all Wuhan Virus-related imports from the PRC, with the same “expeditious” criterion attached, and existing relief should be modified to include the criterion.

Reporting To/Working For

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Texas Governor Greg Abbott (R) is going to release an Executive Order this week outlining requirements for safely beginning to reopen the Texas economy as the Wuhan Virus situation begins—begins, mind you—to start [sic] to wind down.

The details of the order were not immediately clear.

The NLMSM isn’t, yet, particularly upset by this lack of clarity at this point, and neither should they be. Still, the statement invites a remark from me (if for no other reason than that it’s my blog, and I’ll blog if I want to, blog if I want to, blog if I want to).

The details needn’t be made available to the press at all before the EO is published for the public’s consumption. That’s not a matter of withholding information from the press, it’s a matter of priorities.

Abbott doesn’t work for the press; he works for us Texas citizens. Of course he should report to his bosses before he reports to anyone else. The press is only a tool—and not the only tool—for carrying out that responsibility.

Full stop.

Progressive-Democrat Extortion

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The Progressive-Democrats in Congress held up the last Wuhan Virus Federal aid program for four critical days, led by House Speaker Nancy Pelosi (D, CA) and Senate Minority Leader Chuck Pelosi (D, NY). These persons tried to force inclusion in the aid an array of programs irrelevant to it but central to the Progressive-Democrats’ ideology and platform.

They’re at it again. The new aid effort, currently under way in the Senate, is centered on small businesses and their employees: an additional $250 billion for the Paycheck Protection Program

Two top [Progressive-]Democrats—House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer—in a statement on Wednesday morning said they want the additional $250 billion for PPP to get packaged with other provisions, such as $100 billion for health-care institutions, $150 billion for state and local governments and extra help for food-stamp recipients.

These two, and their cronies in both houses of Congress, are holding up the aid while they try to force inclusion of $100 billion for health-care institutions, $150 billion for state and local governments and extra help for food-stamp recipients.

This is just naked extortion. Nice aid program you have there. You need to pay some protection fees for it.

Never mind that additional funding—from some source, not necessarily on the taxpayers’ backs, but maybe so—for hospitals, et al., for state and local governments who’ve a long history of fiscal irresponsibility, for those on food stamps could easily be discussed and debated in a separate bill or three.

Never mind, too, that not a single red penny of the $150 billion already appropriated for health care and medical-related stockpiles has been spent. Piling more money behind that bottleneck serves no purpose beyond virtue-signaling.

No. Small businesses and their employees can just go hang unless Progressive-Democrats get their demands met. As The Wall Street Journal put it, [t]ens of thousands of small businesses are heading for bankruptcy without short-term liquidity from the feds. That’s OK, though, if Party can’t get its demands met.

Again, no. Paying the vig, paying the ransom—paying the Danegeld just gets the payer stuck with the Dane forever.