Tag Archives: political economy

Dithering

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A brief word.  There are three speeds that are important in this world: the speed of politics, the speed of business, and the speed of national security.

The speed of politics can be useful when trying to build Congressional and Congress-White House coalitions to enact legislation of a general domestic nature.  Such a speed can be useful, for instance, in developing such coalitions to enact legislation for local and national infrastructure repair and development, or for serious tax reform, or for reducing Federal spending (as opposed to reducing the rate of growth in Federal spending), or for immigration reform.

The speed of business, on the other hand, is optimal when rescinding overweening Federal regulations (for instance, eliminating unnecessary regulation-mandated spending), canceling or creating Executive Orders, pushing nominations through the Senate, enacting specific legislation—spending bills for each of the twelve appropriations venues, for instance.  There’s no need for politics here; businesses—our free market economy—are hurting, and such specifics do not need to be dithered over while politicians virtue signal.

Finally, the speed of national security must needs be very rapid: our nation’s safety demands it.  The speed of national security, to take a current example, involves working with the Republic of Korea, Japan, and Israel to beef up their missile defense capability.  Why Israel?  Iron Dome works.  The speed of national security includes advising the People’s Republic of China that it no longer can dither, stall, engage in idle chit chat; concrete action must be taken by them to cut off their client’s access to the outside world’s economy, resources, funds, technology.  It must force northern Korea to stand down from their nuclear weapons and missile programs and do so with more concreteness and permanence than past efforts—by us, too—have done.  The PRC must do this now, or we’ll act in concert with the RoK and Japan or unilaterally, but without the PRC’s involvement; we won’t wait on them.  And the PRC won’t like the outcome.

Three speeds, each useful in its own milieu.  Using the slower speed in the faster lanes is just dithering, and it threatens our national welfare.

Prioritize, Guys

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President Donald Trump’s national infrastructure plan centers on glorified seed money directed to the localities looking to improve/build out their infrastructure.  The idea is that the locals know their needs best, those needs should be funded primarily locally or from within the nation’s private economic sector, and the building out will aggregate into a vastly improved national infrastructure—real bottom up development, with a little help from the Feds.

To that end, Trump is going to propose $200 billion in Federal spending be committed to a total $1 trillion infrastructure development collection of projects (OK, considerable help).

Right now the dynamic is: come, ask for a whole lot, bang on the table, have your economic studies showing the tens of thousands of jobs that will be created, have your regional study saying this will transform America, bang on the table some more, hire some lobbyists and you get money.  We’d rather have people come and say, “Listen, we’re chipping in this much, give us this little increment and we can make this thing happen.”

Naturally, the locals are getting their knickers twisted.  The ones with the biggest projects

say that local cost-sharing and private financing efforts would fall well short of making up for sharply reduced federal funding.

Nonsense.  You don’t get to freeload off Uncle Sugar, anymore.  Project leads in Chicago or Dallas don’t have a claim on the (tax) money of the good citizens of New York or California, and under the administration plan, they won’t be allowed to exercise their false claim to OPM.  New York and California will be able to keep their money for their own local projects.

This is an example of the deer in the headlights response of folks so used to the Government teat that they can’t conceive of better alternatives [emphasis added]:

Republican New Jersey Governor Chris Christie and Democratic New York Governor Andrew Cuomo have said they expect the federal government to cover half the cost of the Gateway project, which also includes bridges and track improvements.

“There’s no people or economic activity in that region that could possibly cover the cost of that?” said the administration official, when asked about a recent appeal by Mr Cuomo for federal aid for the project. “I think that’s a tough sell, would be my response.”

The suggestion that New York and New Jersey could pay their own way on the project…shocked some of the tunnel’s advocates.

Prioritize, guys.  On what are you spending your citizens’ money that you think is more important than your Gateway?  Say that out loud, so your citizens—your constituents, your bosses—can hear you.

Republicans and Obamacare

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Too many now are begging for surrender on repeal and replace.

[F]ew congressional Republicans have signaled they are ready to let the health-care market deteriorate while their constituents are still battling higher premiums and fewer insurers to choose from on the individual marketplace.

This means those Republicans are signaling that they don’t have the stomach to repeal Obamacare at all, which would be the ultimate deterioration of it.

This is a betrayal of their constituents along two dimensions: the cynical destruction of their promise to repeal and replace, and their decision to continue inflicting Obamacare with its steadily increasing premiums and fewer insurers to choose from on their constituents.

President Donald Trump’s move to just let Obamacare die on the vine and hope for something better to rise out of the sewage is just as foolish and immoral.  Republicans need to remember what they promised and who sent them to Congress to honor their promise and get back to work on repeal and replace.  On that score, Trump is entirely correct, even if the doable path is stages as originally proposed last winter or via another path proposed by Senators Lindsey Graham (R, SC) and Bill Cassidy (R, LA) whose bill (as an interim step, I say) would “take ACA funding and distribute it to the states through block grants.”

Voters should remember this pending abject failure in the upcoming primary elections.

Some Labor Day Questions

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First published in 2015, I’ve updated it for today.  In an ideal world, I’ll be able to update it again next year, with a more optimistic tone.

The Wall Street Journal asked some questions on Labor Day 2012, and supplied some answers.  Here are some of those questions and answers, which remain as valid this Labor Day.

  • Q: How are America’s workers doing? Not good. Over the past decade, over the ups and downs of the economy, taking inflation into account, the compensation of the typical worker — wages and benefits—basically haven’t risen at all. … The Labor Department recently said that 6.1 million workers in 2009-2011 have lost jobs that they’d had for at least three years. Of those, 45% hadn’t found work as of January 2012. … Federal Reserve Chairman Ben Bernanke said Friday that unemployment is still two percentage points higher than normal….
  • Q: Things ARE getting better, though. The US economy is creating jobs, right? Back in December 2007 when the recession began, there were about two jobless workers for every job opening.  When the economy touched bottom in mid-2009, there were more than six unemployed for every job.  At last count, the BLS says there were 3.4 jobless for every opening.
  • Q: How much of this elevated unemployment is because the unemployed just don’t have the skills that employers are looking for right now?  …the bulk of the evidence is a lot of the unemployment really is the old-fashioned kind: the kind that would go away if the economy was growing at a stronger pace. Mr. Bernanke said as much at the [2012] Jackson Hole conference….

The Democratic Party President has taken a bad situation and done little to improve it, even though he’s had four more years in which to do so.  He has, though, actively attacked businesses—the hirers—demonizing them, (over)regulating them, demanding to raise taxes on them.

At least as importantly, the current Democratic Party Presidential candidate has vowed to continue these Democratic policies, and to extend them.  Even with nearly eight years of empirical data demonstrating the bankruptcy of these policies.

Under the new Trump administration, the jobs situation seems, at least superficially, to be improving, although still too slowly.  The headline unemployment rate is at an historic low; however, the labor force participation rate—the denominator in that headline rate—remains at an historic low, also.  And, wages aren’t growing as they would in a normal, more robust economic recovery.

Further, the Federal Reserve Bank management, aided and abetted by the Progressive-Democratic Party Representatives and Senators, are highly resistant to removing job- and job growth-restricting regulations that were emplaced 10 years ago (under Dodd-Frank, for instance) with the ostensible purpose of mitigating the Panic of 2008.  With that dislocation long behind us, those regulations no longer serve a useful purpose.

Happy Labor Day.

Chips and the PRC

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The Committee on Foreign Investment in the US seems to be preparing to block the purchase of Lattice Semiconductor Corp, a maker of chips for civilian electronics, by Canyon Bridge Capital Partners, a company backed and funded by the government of the People’s Republic of China.  This is upsetting the deal’s backers.

Lattice management and other deal backers think we should all be “satisfied with their efforts to address national security concerns,” and they’re preparing to appeal to President Donald Trump to overrule the expected CFIUS decision.  This is nonsense.  Canyon Bridge is an arm of the PRC government; it isn’t possible to address successfully national security concerns when the government of an enemy is involved in buying one of our technology companies.

CFIUS is correct, if expectations of its ruling prove accurate, and Trump would be wise to decline to overrule.

Update: President Trump has, in fact, declined to overrule, on national security grounds.

“Credible evidence leads me to believe” the buyers of Lattice “might take action that threatens to impair the national security of the United States,” Trump said in his order.