Tag Archives: political economy

They Know the Answer to This

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There is a growing recognition around the world of the economic dangers posed by the People’s Republic of China’s export dominance, achieved as it has been through its domestic overproduction and overseas sales at below-cost prices of that overproduction, with the losses to the PRC’s businesses made good by PRC government subsidies.

A Group of 20 statement implicitly criticizing Beijing for its overreliance on exports for growth marks a new stage in international pressure. The statement, issued Tuesday at the G-20 meeting of finance ministers and central-bank chiefs in Asheville, NC, was a striking example of agreement in an otherwise-fractious affair that featured disputes over Russia and President Trump’s policy toward Canada.
Countries across Europe and Asia worry domestic industries in areas such as autos, electronics, and heavy machinery won’t survive China’s push to export its way out of domestic economic troubles.

The US Treasury issued a statement summarizing the matter, although Treasury Secretary Scott Bessent shied away from mentioning the PRC by name.

It said “countries with excessive and persistent external surpluses” should end policies that “result in an overreliance on exports for growth” and cause harmful spillovers around the globe.
Those countries should “eliminate nonmarket policies” and “remove distortions that constrain domestic consumption….”

Of course all of the G-20 players know full well that the PRC won’t do anything of the sort. Those exports are too important an economic weapon for the PRC to lay them down.

Last year, China responded to American tariffs by restricting the export of rare earths to every country, pummeling global manufacturers. Beijing also cut off certain mineral exports to Japan after a spat over Taiwan.

These world “leaders” know this weaponization. They just need to stop importing from the PRC, whether by serious tariffs, or complete refusal to buy PRC products. The doing would correct the economic damage, and from that, greatly reduce the political risk to their national sovereignty (a risk those “leaders” still don’t seem to see). The doing in the longer run also would more than pay for the disruption of shifting their supply chains. They just lack the courage to do it, satisfying themselves, instead, with yapping about it from the safety of their porches, and so they’re failing their people.

Progressive-Democrats as Taxmen

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There is a way for the Evil Rich to provide for their heirs in a remarkably tax favored, if not tax-free, way—private-placement life insurance, a customizable insurance contract that allows unlimited investments to grow tax-free. The contents would go to the beneficiary(s) on the account creator’s death as a death benefit, and so be free of income taxes at that point, also. These accounts were designed that way explicitly to encourage folks to provide for their dependents. The tradeoff is that the account must be under the control of an independent account trustee of some sort; the account creator cannot have even influence over how his money is invested within that contract. The mechanics of how this works isn’t relevant to this post. The outcome, though, is.

In one relatively extreme case, one Rich Person’s account, set up in this way,

could [could, mind you; the account’s manager may make bad or unlucky investment decisions] one day be worth hundreds of millions of dollars, and he won’t have paid a dime in ordinary-income or capital-gains taxes on their growth. He can take withdrawals or loans against the policy’s cash value but generally doesn’t expect to tap the proceeds. When he dies those will go to beneficiaries income-tax-free in the form of a death benefit.

Enter Progressive-Democrats with their hatred of the wealthy and their jealousy of the wealthy’s success and their demand to confiscate other people’s money, especially that of the so hated rich.

Senator Ron Wyden (D, OR) has introduced legislation that would separate these insurance policies from traditional life insurance, making those earnings and losses taxable to the policyholder as they are earned each year.
“We cannot have a bunch of ultrarich tax dodgers abusing its special tax treatment to set up tax-free hedge funds and shelter mountains of cash[.]”

It’s abuse to follow tax law? And: why can’t we have successful people take advantage of the government’s tax law to take care of their families? Never mind that. The Evil Rich Man cannot be allowed to pass his good luck on to his dependents. He owes Government and must pay the Progressive-Democrat government’s vig.

“Sophisticated Free-Market Pricing”

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That’s how a letter-writer in Wednesday’s WSJ Letters section, a university professor who should know better, characterizes campus economies.

Whether the general campus environment fosters particular political or economic attitudes is a legitimate question, but the pricing of campus amenities isn’t evidence of socialism. If anything, it is evidence of sophisticated, free-market pricing.

If it’s a matter of free-market pricing, then since tuition and fees cover all of that extra, colleges and universities have no need of Federal funding or of student loan guarantees.

Research conducted at colleges and universities is a separate matter, and Federal funds, if any, should be carefully controlled. All outcomes from programs partially or fully funded by the government should be strictly in the public arena and beyond the ability of school researchers to patent or otherwise personally profit from them.

Speculation and So What

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The Paramount–Warner Bros. Discovery merger that California’s Progressive-Democrat AG Rob Bonta, along with some dozen of other Progressive-Democrat-led States and a union, have gone into court to block may be entering “settlement” talks. The situation as it stands, from Paramount:

Paramount has warned it is prepared to move the company out of California if it can’t reach a deal with the states, with a potential move starting as soon as October 1. Tennessee is seen as a likely potential landing spot for Paramount.

October because that’s when Paramount starts owing fees to Warner Bros. Discovery related to delayed signing of the deal. Tennessee is the most likely gaining State, although there are a number of States with much more congenial business environments than those Progressive-Democrat-run States.

From Bonta:

As it stands today, the proposed Warner Bros./Paramount merger will mean higher costs, less competition, lower wages, job cuts, and fewer movies and TV shows[.]

That’s pure speculation based on nothing other than ephemeral economic studies that try to predict the future, here in an environment very much changed from the environment in which those studies were conducted. Speculation should form no basis, even in the Ninth Circuit’s region (the first stop for the inevitable appeals), for blocking a business deal.

From the union:

The Writers Guild of America also sued over the merger, saying that the deal would eliminate jobs and career opportunities for Hollywood screenwriters.

That may or may not be true, and it’ll be influenced largely by the willingness of those Hollywood screenwriters to relocate and become Tennessee screenwriters. At bottom, though, while any job loss would be too bad for those terminated, the WGA‘s plaint is a big so what. Nobody, not even Hollywood screenwriters, have an intrinsic right to any job, not even screenwriting.

Paramount, in the absence of a deal with the States that’s entirely satisfactory to Paramount and Warner Bros. Discovery by COB 30 September, should make its move out of California on 1 October and conclude the merger. There’s no need for Paramount or Warner Bros. Discovery to delay past that date.

The Tennessees of our nation will greatly benefit from the revenue gains that making movies, ancillary businesses associated with movie-making, businesses supporting ancillary businesses, and further business rippling will bring to the gaining State (and in the case of Tennessee, the rippling will flow into Kentucky, Arkansas, Mississippi, Alabama, Georgia, and South and North Carolina). Los Angeles and California can take up that loss of revenue with Bonta, et al.

An Alternative Solution

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The lede lays out the foolishness and government union disingenuousness simultaneously. A twofer.

Do government unions have a vested interest in saddling students with more debt? So they argue in a new and revealing lawsuit against new graduate loan limits.

The situation:

One of the biggest achievements in the 2025 tax bill was limiting the amount of federal loans that students could borrow to a total of $100,000 ($20,500 a year) for most graduate degrees and $200,000 ($50,000 a year) for professional ones. ….
Graduate programs have become cash cows for universities, and the caps could impel them to reduce prices and spending. … The caps are forcing some universities to reduce their bloated workforces. Hence, the union lawsuit….

Never mind how generous those limits remain, even for university incomes. Of course the government unions are objecting; those loans—uncapped—are cash cows for the unions, also, washed as they are through those bloat employees’ union dues.

Still, there is a solution, and it even serves the useful purpose of getting government out of the business of making loans. A tangential beneficial side effect is that what government gives away, here in the form of those loans, it must first take, here in the form of government borrowing.

One way to cap Federal student loans, a way which would render the question of caps irrelevant (and which would eliminate that small tangential vicious circle), would be to stop doing Federal student loans altogether. No loans, no caps.

Easy peasy.