Tag Archives: political economy

Nationalizing Companies

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The Wall Street Journal editors are badly mistaken here.

Mr Trump accused Kamala Harris of being a socialist, but the Biden Administration never nationalized companies.

Routine political polemics on the first part of that; functionally, and obviously, wrong on the second part.

Nationalizing individual companies is piffle. The Obama reign nationalized a whole industry—our health care “insurance” coverage industry via Obamacare, which required all of us to buy an Obamacare policy whether we wanted to or not, whether we needed one or not.

It’s true that the Biden administration didn’t formally nationalize any companies, but it functionally nationalized far more industries than that piker Obama with the Biden administration’s excessive regulation: ICE-powered vehicles and our energy production industries, our banking industry with its pressure to lend to these types and refuse to lend to those types, and even our press with its pressure to spike these news reports and to push those news reports, all the while pushing for editorials that favored administration ideologies while panning or ignoring policies of which Biden and his minions disapproved.

None of this is to suggest that the Federal government taking an ownership stake in Intel or any company is a good idea or even an acceptable one. It isn’t. But it’s telling that these opinion writers can make such an obviously wrong claim at the outset of their piece.

Vast Rightwing Conspiracy?

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Nah. Just a vast force out there. That’s the view of some venture capitalists who are launching PACs to support political candidates who favor as little AI regulation as possible and to oppose candidates who want strong regulation of AI and of AI development regimes. Josh Vlasto and Zac Moffatt, for instance:

There is a vast force out there that’s looking to slow down AI deployment, prevent the American worker from benefiting from the US leading in global innovation and job creation and erect a patchwork of regulation[.]

The polemics from the other side are just as extreme: AI will be the death of society, even the death of us all.

It’s certainly true that AI—like all sharply new technologies—carries risks for the current order of things in our economy, as well as benefits for us all on the other side of the disruption, but the extremes from either side and both sides’ ignoring those benefits do none of us any good.

There does need to be serious discussion and debate regarding the appropriate level of regulation of AI and of AI development, and serious discussion and debate regarding how that regulatory setup should itself evolve as AI and AI development evolve.

Notice that word “serious,” though. That takes the discussion and debate, or should, out of the realm of politics and into the realm of tech experts and, critically, us citizens who must live with the outcomes of regulatory decisions. Especially, us citizens must have the final decision regarding these (and all other, come to that) regulations.

An Alternative

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Or two. The Trump administration is kicking around the idea of taking a stake in companies that receive Federal funds pursuant to the 2022 Chips Act (formally the Chips and Science Act), 10% in Intel being one of the ideas in play. I have an alternative, although it likely would require a legislative modification to the Chips Act: structure the funding as a loan, the [10%] stake as collateral, and dissolve the stake when the loan is repaid.

Another alternative, also likely necessitating modification to the Chips Act, would be to structure the funding as a grant, with the stake dissolved after a [five] year period on satisfactory performance under the grant—suitably boosted domestic research and manufacturing.

Either of these alternatives would mitigate the risk of government-run “capitalism” by getting government back out of these enterprises once performance has been confirmed durably established. They’re similar, too, to the government bailout program of the Panic of 2008, with the critical addendum of a hard withdrawal of government on clearly measurable achievement of tightly defined milestone.

Disingenuous

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The Canadian government has ordered binding arbitration in the dispute between Air Canada and its flight attendants union, the latter which struck the airline a week ago last Saturday. The union is crying foul over not having gotten its way, accusing the airline, in typical union fashion, of sandbagging (the union’s term) the negotiations.

On the other hand, there’s this, also, from the union regarding those negotiations.

The airline said it offered its flight attendants a 38% increase in total compensation over a four-year period. The proposal also offered a 12% to 16% rise in hourly pay in the first year. The union said the pay offers failed to help its members recover after historically-high inflation this decade.

Leave aside the minor fact that the airline didn’t cause the inflation, the Canadian government’s response to economic factors did, so the union’s beef regarding the effects of inflation is properly between it and the government.

What the union is choosing to ignore in its inflation beef is that the airline suffers just as much from that historically-high inflation and must also deal with the resulting price increases and current elevated price levels.

Raise Those Taxes

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Progressive-Democrat-run States are looking at ways to cover putative budgetary shortfalls.

  • Minnesota State Representative Aisha Gomez, a Democrat…sponsored legislation that would implement a higher tax rate for joint filers in Minnesota making over $1 million a year if federal Medicaid cuts take effect
  • Connecticut legislators have proposed a bill that would raise income-tax rates on couples making at least $500,000 and individuals making at least $250,000
  • Washington Governor Bob Ferguson, a Democrat, in May signed into law a budget that includes an increase in the capital-gains tax, among other things
  • Maryland Governor Wes Moore, a Democrat, in May signed into law his tax proposal, which includes higher income-tax rates for state residents making more than $500,000 a year
  • Rhode Island in June imposed a new tax on certain vacation homes valued at $1 million or more

And this:

Many states face projected budget deficits after increasing spending and cutting taxes in the flush postpandemic years….

Notice that. Profligate spending leads to revenue shortfalls, so—raise those taxes, especially on the rich, who Owe Us. That’s akin to a business losing money, so it raises the prices it charges for its products.

Nowhere in there is any Progressive-Democrat-run State reallocating its spending to stay within existing revenues, much less cutting spending to do so.

I repeat a long-standing challenge of mine: can any Progressive-Democratic Party politician even say the words, “Cut spending?”