Tag Archives: political economy

Good for Workers, Good for Business

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Recall the National Labor Relations Board’s case of a couple of years ago, Browning-Ferris Industries.

Browning-Ferris concerned a recycling center staffed by contractors. The original [NLRB] ruling found the contractors were jointly employed by a staffing firm and Browning-Ferris.

This ruling, if allowed to stand (the case also is in the Federal court system) would have allowed contractors like those at Browning-Ferris, McDonald’s, and any other franchise-centered corporation not only to form unions at individual franchises (which they’ve always been able to do), but also to form a grand union across the corporation.

President Donald Trump appointed a couple of folks to the NLRB to fill vacancies created when two ex-President Barack Obama (D) appointees quit in a snit over Trump’s election.  Now the NLRB has voted to overturn that prior NLRB ruling.

This is good for both business and for employees.  It’s good for business because modern unions have devolved into extortion rackets that threaten a business’ ability to exist through crippling strikes unless the unions get pay and benefits that they demand, even when those things cost more in their per-employee aggregate than the employee’s work is worth.

It’s good for the workers because it means, with labor costs allowed to match the value of the work done, labor won’t be replaced by automation that’s cheaper than the union-elevated labor costs.  Jobs will be preserved, and more hiring will occur.  It’s also good for workers because it frees them to negotiate their own wage and benefit package instead of being dragooned into whatever a union might impose on them.

The Question is a Non Sequitur

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John McKinnon and Brent Kendall, in their Wall Street Journal piece, asked Is FTC Up to the Task of Internet Regulation?

His piece is about the split between what the FCC (the erstwhile “regulator” of the Internet, courtesy of the Obama administration) and the FTC are qualified to regulate.

The question is a bit of a non sequitur, though. The Internet is merely a transport medium, and it needs very little regulation. The FTC is fully up to the task of regulating (ideally with a similarly light touch) trade, which is independent of the medium—highway, railroad, snail mail, or electronic—over which the traded products are transported.

And: lightly regulated commerce is highly conducive to innovation.  Just look at our communications system since the breakup and deregulation of Ma Bell.  And the Internet between its inception and the Obama FCC-imposed impediment.

“SALT and School Taxes”

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That’s the title of a recent Wall Street Journal Notable and Quotable.  The excerpt cited a Bloomberg piece (link in the N&Q) in which that piece’s author, Sahil Kapur, went on at length about how the tax reform and rate reduction bill currently on offer in the Congress will hurt the poor, over-taxed citizens of New Jersey and the State’s education capacity.  Because for the children.

How cynical.

If Kapur and others of his ilk don’t like New Jersey’s high taxes (or New York’s, or California’s, or Illinois’) or how those revenues are allocated, they should stop looking for Federal handouts and get to work on their State governments. After all, it’s Kapur and his fellows, and the rest of the citizens in those States, who’ve been busily electing those overtax and misspend governments.

It’s also true enough that some of those States send more of their citizens’ tax money to the Feds for redistribution than they get back from the Feds, but that just emphasizes the need to put an end to such redistribution of OPM.  It has nothing to do with whether the SALT tax distorting deduction should be preserved.

Disappearing Insurance

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First it was health insurance, dysfunctional as it was, being replaced by the health coverage plan welfare program known as Obamacare.  Now auto insurance is under attack.

New York financial regulators have banned the use of education and occupation as factors in setting auto-insurance premiums….

Never mind that these are useful, if imperfect by themselves, correlates with driving skill and so of insurance risk. The companies accepting the risk transfer by selling a policy don’t get to know that information, they don’t get to assess the level of risk being accepted.  They can’t charge an accurate premium.  That hurts the driver as much or more than it does the insurer.

When insurers are not allowed to learn all the factors that go into the level of risk an insuree is seeking to transfer to an insurer, the policy being agreed ceases to be insurance.  New York’s auto “insurance” program isn’t yet approaching State welfare status, but it is ceasing to be insurance.

The Complexity of the Fed’s Interest Rate Angst

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A Wall Street Journal piece on how Amazon (and online comparison shopping in general) is making life difficult for the Federal Reserve had this remark early on:

Web-driven comparison shopping complicates Fed decisions on how much and how fast to raise interest rates.

No, it doesn’t. Only the bureaucrats at the Fed and reporters in the NLMSM think this is complicated. The Fed wants inflation stable at 2%. The Fed knows that interest rates—the cost of money—are inherently inflationary. The Fed knows what benchmark rates historically are consistent with 2% inflation.

The Fed should set its benchmark rates at those levels consistent with 2% inflation, and then it should sit down and be quiet. Neither its bureaucrats nor its inherently bureaucratic political appointees need to manufacture busywork by artificially complexifying a simple function in order to preserve their jobs. Reporters don’t need to complexify this matter, either; their interns can find lots of other things about which they can write.

Easy peasy.