Tag Archives: political economy

Financial Transaction Tax

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The Progressive-Democratic Party Presidential candidates (with, for now, the lonely exception of Joe Biden) all want one.  Fred Hatfield, once a (Democrat) commissioner on the Commodity Futures Trading Commission, correctly identified one downside of such a thing.

The tax would be bad for farmers, whose support is critical in the Feb 3 Iowa caucuses.  Farmers manage risk by entering into futures contracts, a type of derivative. Under Mr [Progressive-Democratic Party Presidential candidate and Senator Bernie (I, VT)] Sanders’s proposal, trades of corn and soybeans futures would be taxed at a rate of 0.5 basis point [0.5%].

Even if farmers could somehow be exempted from a financial transaction tax, their cost of hedging would rise because the general cost of trading—of any sort—in commodities would rise, both from the tax and from the reduced liquidity of the derivatives as other traders eschew those markets. Such a tax could only negatively distort the market—as any tax in any market will do.

Moreover, those distortions would extend to other markets: grocery prices would rise from the increased prices faced by farmers and passed on to farm product buyers, beef and chicken prices would rise from the increased cost of feed, alternative farm produce would rise as other crops would substitute in (with their own increased demand-driven prices), and on and on.

And that’s just in agriculture.  The same cascading consequences would occur in all equity and debt markets, in all other commodity futures and forward markets—like metals: iron, aluminum, copper, in addition to “currency” metals—and on and on.

Investment in general, including for plant improvement and innovation, would be depressed by such a tax.

Sanders’, et al., financial transaction tax would have all the broadly negative impact on our economy as does any other social engineering-motivated tax.

National Sovereignty

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The Paris Peace Forum met earlier this week; fortunately, we didn’t send any government representative to it.  National sovereignty, this claque held, is a danger to the world.

French President Macron advocated for multilateralism and a “balanced cooperation” between the nations.

Balanced cooperation is good, but that requires not the open borders and come one, come all—no matter who the one or the all are—but coalitions built for specific times and purposes.  And those coalitions, even treaties between or among States requires…nation-states with actual borders, nation-states with internal, coherent cultures, nation-states that put their own interests first.

Easy immigration, certainly, but immigrant prospects who are carefully vetted before they’re allowed in, immigrant prospects committed to assimilating into the culture of the nation they wish to enter and become a part of.

National sovereignty, nationalism.

Emmanuel Macron doesn’t want this.

… unilateralism is “very risky. …  Nationalism is war.”

Never mind that balanced cooperation requires nations actually to be willing to cooperate with each other to do something that’s necessary.  The necessary thing needs doing, though, whether or not nations are willing to cooperate, and that requires, occasionally, unilateralism.  Occasions like Iran, openly and bluntly committed to the destroying Israel and supporting terrorism throughout the world, rapidly pursuing nuclear weapons—while Europe not only stands by, but actively funds Iran’s effort with trade and efforts to circumvent unilaterally applied economic sanctions.

Occasions like the People’s Republic of China seizing and occupying the South China Sea, with only the US willing even a little bit to object, the PRC’s economic, intellectual property, and technology thefts while Europe not only stands by, but actively seeks out new trade deals with the PRC.

Occasions like Russia occupying and partitioning parts of Georgia and Ukraine, engaging in cyber war against each of the Baltic States, deploys tactical and intermediate range nuclear weapons on its western border while Europe stands by and watches—and actively facilitates Russia’s ability to export natural gas to…Europe.

But nationalism, putting one’s own nation ahead of an amorphous multiculturally international entity is anathema.

This is who one of our putative friends is.

How Terrible Is That?

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Jeremy Corbyn, British Labour Party’s MFWIC, has “accused” British PM Boris Johnson of pushing for US-style deregulation of health care.  The horror.

As the UK election campaigns got underway, Corbyn said his rival wanted to “unleash Thatcherism on steroids” once the country was no longer bound by EU trading treaties and regulations.

Channeling our own Progressive-Democratic Party Presidential candidate and Senator Bernie Sanders (I, VT), Corbyn thinks “capitalism” is a dirty word.

He went further:

Corbyn also said…that Johnson wants to strike a trade deal with US President Donald Trump to sell off parts of the UK’s National Health Service, or make it easier for US pharmaceutical firms and medical companies to sell into the UK healthcare market.

Because all that foul capitalism would lower health costs to British citizens and deprive Government of control over their health choices.

Then Corbyn made plain the breadth of the wicked that the Brits’ way comes:

They want to move us towards a more deregulated American model of how to run the economy.

It’s clear that Corbyn—and his fellow Labourites—think British citizens are just too blind stupid to make their own health decisions; he and his insist those unwashed masses must be led by his Know Betters.  Just like our own Progressive-Democrats.

They’re Only Uighurs

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People’s Republic of China President Xi Jinping and his government henchmen are sending their representatives to “sleep with” the wives of Uighurs whose husbands have been interred in the PRC’s concentration camps reeducation locations for the crime of being Muslim.

The excuse for this?

Party officials who are called “relatives” (but not actually related) visit Uighur families every two months, stay for up to a week, and in some reported instances, share a bed with the women, [Radio Free Asia] reported.

Because, says a PRC Government Man,

They help [the families] with their ideology, bringing new ideas. They talk to them about life, during which time they develop feelings for one another.
…
Normally one or two people sleep in one bed, and if the weather is cold, three people sleep together.

Right.  Two on one; the wife is especially helpless.

After all, it’s not like those PRC government men see Uighurs—especially the women—as human beings: they’re just receptacles for those government men’s…fluids.  And with over a million Uighurs locked away, that’s a lot of women available for…comfort service.

Congresswoman Jackie Speier (D, CA) has the right of this one.

It’s difficult to imagine a more intimate form of political violence against an already terrorized minority.  The United States must speak out about the systemized enslavement and attempted cultural obliteration of the Uyghurs.

More than just talk though.  Maybe we, and the world at large, don’t need to be engaging in any sort of economic trade with such a willfully barbaric nation.

Boeing and Foolish Questions

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In a Wall Street Journal article on the tortuous path to criminal prosecution that prosecutors would have in bringing Boeing to criminal trial over its 737 MAX crashes, Andrew Tangel, Jacob Gershman, and Andy Pasztor asked what seems to me to be a very narrow, short-sighted question.

Should prosecutors weigh Boeing’s importance to the economy and national security when deciding how to proceed with a criminal case over the 737 MAX crashes?

Of course prosecutors should—must—not. What’s truly important is the concept of weighing the risks to liberty and to national security of criminals being too big to be punished. We can never allow such a thing to enter even the run-up to criminal prosecutions.

If criminal actions can be seriously alleged against Boeing—based on the company’s behaviors—the company must come to trial. Only if found guilty, so there’d be a criminal sanction phase, could Boeing’s importance to our economy and our national security legitimately be considered—and then, not on the magnitude of the penalty(s), which absolutely must fit the crime(s), but only on the penalty(s)’s schedules of application, with interest accruing on any fiscal penalties not paid “promptly.”

The question of criminal trials for various individuals of Boeing’s management (and its aircraft testing function?) is an entirely separate matter.  The company’s importance to anything is wholly irrelevant here; the company can easily survive any number of its managers being locked up in a Federal hoosegow.