Tag Archives: political economy

Bad Bonds?

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Recall that Michigan State University agreed to pay $500 million to victims and associates of Larry Nassar’s sex abuse victims while he was pretending to treat our women gymnasts’ injuries.

Now the school intends to float bonds to raise the money to pay the bill.

Were I an investment advisor—which I’m not, nor do I play one on the radio—I’d advise against buying these bonds; I’m not satisfied Michigan State will be able to pay them off in the end, even with OPM.

Aside from their investment quality, or lack, I also think it’s immoral to bail out the school until there has been a serious cleaning house of school management, from middle management layers all the way up through the top layer.  This house-cleaning must include the athletic department as well as HR, student affairs, extracurricular affairs, and the President’s office.  Especially in the latter and in the athletic department, no one should be left but the secretaries.

And none of this gets to the fact that the bond offering is just a cynical back-door effort to get taxpayers to pay for the school’s failure.  That’s also morally unacceptable.

And this:

[The school] is in talks with its insurers and has said it expects to recover at least some funds through them.

Is the school seriously suggesting that it bought insurance against the risk that its medical personnel would engage in sexual abuse?  I can think of no other way in which insurers would be liable for a payout here.

AHPs

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Association Health Plans are new plans that, by regulation, allow small businesses to band together across industries and state boundaries to form health insurance buying consortiums.  Using this larger size-generated buying power, they should be able to acquire cheaper, better tailored, more flexible plans for their employees, plans that those employees actually will want.

However.

The left says association plans are junk insurance that will blow up ObamaCare.

Some AHPs likely will be; that’s a fact of life in any market, free or centrally planned. However, a free market is self-regulating and quickly so; junk plans will be few and far between.  Blow up Obamacare?  That’s win-win.

A Proposed EU Budget

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French President Emmanuel Macron and German Chancellor Angela Merkel have agreed a proposed EU budget.  As you might expect, I have a question.  One of the points of agreement is the purpose of the “single eurozone budget” they want to create:

The EU will set up a single eurozone budget to boost investment and promote economic convergence among all 19 member states.

What does this purpose statement mean, exactly?  Who will pay into the budget and in accordance with what parameters?  Who will pick the investments to be supported and on what basis?  On these two matters, details are yet to be worked out, certainly; it’s early in the process.

But the larger matter is what these two mean by “economic convergence.”  Do they seriously intend to move the successful nations—the ones fiscally responsible, that don’t tax heavily or spend profligately, that actively enforce their (tax) laws—toward those nations that are less responsible, even irresponsible, that see their tax laws as suggestions rather than requirements, in addition to seeking to move (with what enforcement mechanisms?) those less responsible, even irresponsible, nations toward the successful ones?

That is, after all, what convergence means: bringing the two sides toward each other, rather than just one side toward the other.

So: why should the successful nations, the fiscally responsible nations, be held back in favor of those nations that have chosen a lower course?  Or is that not what Macron and Merkel meant with their convergence plan?

Why Should There Be a Cap?

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Scott Atlas wrote in a recent Wall Street Journal that all of us should have access to health savings accounts, instead of just the few well-off among us who can afford the high deductible health coverage plan that’s currently a prerequisite for having an HSA.  He also wants to raise the cap for contributing to one to $7,350 per year.

He’s on the right track, but he stopped short.  Why should there be a cap on HSA contributions?  Why can’t we contribute as much or as little as we want instead of what Government will permit?

Of course, with a properly low, flat income tax rate, tax reduction/avoidance/savings facilities like HCAs, IRAs, 401(k)s, etc, would have less value because there’d be less taxes to be avoided.  We’d have more of our money in our hands to spend as we see fit and to save for the purposes that suit us rather than suit the men of Government.

Child Abuse

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We have children being separated from their parents as those parents are detained for their illegal crossing of our border, their illegal entry—some might say break-in—into our nation.  Some point out that many of those children, the ones who arrive unaccompanied, were callously separated from their parents by their own parents in their country of origin.  Others point out that many of those allegedly accompanied children are not members of a family unit but are simply pawns of drug and human traffickers being used to facilitate those traffickers’ illegal entry.  There are, though, many children/parent family units that have parents detained for their illegal entry and the children separated from them rather than being locking up, too.

The Progressive-Democrats in Congress could help resolve this, were they interested.  However, they steadfastly refuse to negotiate with Republicans–#NeverRepublicanNoWay.  Indeed, Senate Minority Leader Chuck Schumer (R, NY) said on Tuesday that there was no Republican bill he was willing to let his members approach Republicans over.  They much prefer to use children as hostages to keep open the question of immigration reform for their personal political gains in the fall.

House Minority Leader Nancy Pelosi (D, CA), House Minority Whip Steny Hoyer (D, MD, and possessed of an especially apt title in this context), Senator Chris Van Hollen (D, MD, and Chairman of the Democratic Senatorial Campaign Committee), and Schumer all bleat about child abuse.

They’re dissembling.  Their hostage-taking and children-as-political-fodder are the child abuses.  Their behavior is disgusting.