Tag Archives: political economy

A Good Start

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Congress is considering RESA, the Retirement Enhancement and Savings Act, a bill that would represent a massive change to our retirement system, in particular our 401(k) system.  This bill would, among other things,

encourage more small employers to offer retirement savings plans and make it easier for companies to offer annuities that turn workers’ savings into a guaranteed annual income.

Among specific things that the House wants in such a bill are

  • a universal savings account, funded with post-tax dollars but with tax-free earnings and more flexible withdrawal rules than existing retirement accounts.
  • allow[ing] small employers to band together to offer 401(k)-type plans. By joining a so-called multiple-employer plan, or MEP, small companies can spread plan administrative costs over more participants, lowering fees.
  • encourag[ing] 401(k)-style plans to offer annuities, which help participants transform their balances into a lifetime income stream.

And

[Chairman of the House Ways and Means Committee Kevin (R, TX)] Brady said any new ability for people to tap into tax-preferred savings would be “very limited.”

Despite the support of AARP, the same organization that full-throatedly supported passage of Obamacare, this is a good start.

The ability to convert a retirement savings plan, if left to the option of the saver, can have advantages, even if I do continue to hold that annuities are not as good, in the long run, as investing.  However, once retirement starts, stability and predictability of income becomes important, and the long run will be shorter.

Too, the general moves toward making it easier, mechanically and fiscally, to save for one’s own retirement should be heavily supported.  And controlled to prevent bells and whistles to satisfy this or that Congressman’s (or lobbyist’s) pet wish from being added, cluttering the reform to the point of prevention.  The more we as individuals save for our own futures (and by extension, the futures of our families), the less dependent we’ll be on a failing social “safety” net of Social Security and Medicare.  And the more we’ll be exercising our own responsibilities instead of relying on others.

Finally, as long as we’re modifying our retirement plans, of large importance to me is the removal of existing limits to contributions on IRAs, Roth IRAs, HSAs, and 401(k)s—both traditional and Roth.  Let us put by as much as we want without Government limits.

An Example of Irrationality

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Here’s Donald Trump decrying Germany’s willingness make itself dependent on Russian energy supplies by pushing for Nordstream 2, which will mean that Germany will get 60% of its natural gas from Russia, to go with the 40% of its oil imports that already are from Russia.  Aside from becoming so dependent on an enemy for its energy, Germany will be paying Russia billions of euros for the privilege.

I have to say, I think it’s very sad when Germany makes a massive oil and gas deal with Russia, where you’re supposed to be guarding against Russia, and Germany goes out and pays billions and billions of dollars a year to Russia.

The Progressive-Democrats went hysterical over Trump’s remark.  Here’s House Minority Leader Nancy Pelosi (D, CA) and Senate Minority Leader Chuck Schumer (D, NY) in a joint statement:

President Trump’s brazen insults and denigration of one of America’s most steadfast allies, Germany, is an embarrassment.  His behavior this morning is another profoundly disturbing signal that the President is more loyal to President Putin than to our NATO allies.

Because not wanting billions of euros to go to Russia in return for dependency on Russian good offices is somehow being loyal to Putin.

Sure.

Not Far Wrong

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In an interview with the British newspaper The Sun, President Donald Trump said that Prime Minister Theresa May’s Brexit “blueprint” for Brexit would likely kill any opportunity for special trade deals with the US.  A critical part of that blueprint would have Great Britain

stick[ing] to a common ­rulebook with Brussels on goods and agricultural produce in a bid to keep customs borders open with the EU.

The EU’s trade rulebook, not just on goods and ag products, but covering all trade, explicitly blocks nations from entering into unilateral trade deals with non-EU nations.  Trade deals with non-EU nations can only be EU trade deals.  Sticking to the EU’s trade rulebook, then, would make it impossible for Great Britain to enter into its own deals with other nations—including with the US.

If they do a deal like that, we would be dealing with the European Union instead of dealing with the UK, so it will probably kill the deal.

If they do that, then their trade deal with the US will probably not be made.

Trump isn’t far wrong on that.

At a joint news conference the day after the Sun interview, though, May said that

the leaders had agreed to pursue an “ambitious” trade deal between the two nations that “works for both countries right across the economies.”

That would seem encouraging for Great Britain, implying as it does that May’s blueprint doesn’t, or will be modified to not, include a commitment to the EU’s trade rulebook.

A Couple of Interesting Graphs

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This, via Stratfor, illustrate the level of commitment and its nature of NATO member nations toward their own defense.  The first shows the breakdown of expenditures of those monies aimed at each member’s commitment to spend 2% of GDP on defense.

Notice who’s spending the most on equipment—that actual teeth of defense.  Most of the nations spending the most are right across the fence from the Russian Bear.

This graph shows which nations actually are meeting their 2% commitment.

In case the note is unreadable, the asterisk for Bulgaria notes that its figure does “not include persons.”

There are four nations that didn’t meet their 2% commitment in 2017, but that are expected to meet it in 2018: Poland (which was very close in 2017), Romania, Latvia, and Lithuania.  France, which was nearly as close to its commitment as were Romania and Latvia, will not meet its commitment in 2018.  Germany, well down the list, isn’t even trying.

Union Politics

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Here’s what the American Federation of Teachers union “agency fees” would have been spent on absent the favorable ruling in Janus vs AFSCME, which said that public unions can no longer make non-union employees pay into union coffers as a condition of employment.  These are actual resolutions to be offered at the AFT’s convention this weekend.

Keep in mind, too, that those agency fees typically ran to 60% to 80% of member union dues—which gives an idea of how much a public union’s intake was spent on politics rather than on member matters.

  • single-payer health care
  • opposition to the Dakota Access pipeline
  • President Donald Trump’s “immediate resignation or removal”
  • denounce[ing] Mondelez for moving Nabisco cookie production to Mexico [and non-union plants]
  • urg[ing] local affiliates to pressure “employers to sell or carry only Nabisco products made in free union workplaces in their schools and on their campuses.”
  • support for “anti-war groups”
  • removal of the US’s Terminal High Altitude Area Defense system in South Korea, which “enhances the effectiveness of a US first strike with nuclear weapons by drastically weakening any nuclear retaliation by a potential target nation such as China or North Korea”

Regarding that last, I certainly wish it were true that THAAD would drastically weaken an enemy’s second strike, especially after its first strike.  That’s secondary, though.  Primary is the lack of relationship with actual education or with enhancing a teacher’s ability to teach that these AFT resolutions have.

The union does have a couple of education-related resolutions.

  • free college
  • [urging] “school districts, colleges, and universities to offer their students diverse views about military service and the Reserve Officers’ Training Corps, balancing arguments for military service and ROTC training with the arguments of critics of military service, including its health risks.”

Yeah, those are serious education proposals.