Tag Archives: political economy

Quotas

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German businesses better add women to their governances.  Or else Germany’s Großer Bruder will do it for them.  Regardless of qualification.

Big German companies need to put more women on their executive boards, said Germany’s Women’s Affairs Minister Katarina Barley. The official threatened legal measures if the firms fail to fix the problem within the year.

Bad idea.

Quotas just stigmatize those who got in via quota, whether they were truly qualified for the position or not.  And those who are not, and so fail, only strengthen the stigma.  Quotas are especially damaging to black women.  My GP was contemptuously treated as a twofer in med school because she allegedly filled two squares: she’s a woman, and she’s black.  It stinks.

The way to get more favored group into organization is to train those folks up for those positions in the first place so they can compete effectively.  That means the educational system needs to do a better job of training women to lead businesses (to take the present example) and to convince them they want to compete for those positions—which the German educational system already does, it seems, for boys and men.

That, though, would take time—years, a generation or two or three—and politicians (Germany’s are not unique here) don’t care about tomorrow, only about today.  And today’s virtue signaling.

Bogus Beef

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Congressmen don’t pay their interns.  Who knew?

At least 174 of the 184 lawmakers who support legislation raising the federal minimum wage to $15 per hour do not pay their interns, according to a recent Employment Policies Institute analysis.

It’s a bogus beef, though.  Folks employed in minimum wage jobs are low-skill workers doing low-value work, and they’re doing it to build general work experience and ethic, to earn summer spending money, to earn money for college, to build a resume, to supplement an existing family income.

Interns do very little of that.  They’re in the position in order to gain specific experience in the particular job, to build a resume, for college/graduate school course credit, and in many cases with an expectation of being hired by the company for which they interned after graduation.  The “compensation” of expectation for an intern isn’t a dollar income; it’s that particularized experience.

Stuart Varney, a Fox News contributor and host of Fox Business News‘ Varney & Co, added this:

If you don’t pay them anything, then you’re simply giving jobs to the sons and daughters of the rich.  You’re giving opportunity to the rich so that they can get in on the ground floor.

That may be true, but it’s not inherent to the concept of internships; it’s specific to the employers—in this case, the politicians.

Technology Theft

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In a piece on American CEOs’ (and Apple’s in particular) cowardice in their dealings with the People’s Republic of China’s government—censor your stuff or you can’t operate in the PRC, give up your technology to or you can’t operate in the PRC, and these worthies meekly comply—comes this reminder on the latter bit:

Just about everybody in the US capital is complaining about how China forces foreign companies to give up technology in return for market access.

In truth, the PRC isn’t alone in this: willing participants are those American CEOs who acquiesce in the name of short-term profit rather than long-term gain.

This collusion (is that a word?  Can I use it?) is especially irritating in the Apple case given CEO Tim Cook’s willingness to stand up to the US government over decrypting an Apple smartphone used by the San Bernardino terrorists.  Cook is willing to collude with the PRC, but he’s not willing to collaborate with our own government.  He was right in the terrorist case, too….

It’s time to inject some backbone into these CEOs.  The Committee on Foreign Investment in the United States, which is used to pass on or to block acquisition of American companies by foreign investors if the resulting technology transfer would harm our national security.  CFIUS needs to be broadened with the authority similarly to pass on American companies doing business in foreign jurisdictions if the resulting technology transfer would harm our national security.

Worried about other nations’ companies getting in in place of American ones?  We’re proud of our technology lead over the rest of the world, and justifiably so.  Even were those other nations’ companies actually able to fill the vacuum of the absence of ours, that would just leave the PRC to extort access to second best.

Labor Law

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Recall the 2015 ruling by the National Labor Relations Board that said, via Browning-Ferris Industries v NLRB, that a joint employer was not an employer that shared direct control over a temp agency’s employees with that temp agency, as the long-established 1984 standard held, but that such a joint employer is one that exercises merely tenuous control.

The case is before the DC Circuit on appeal from the ruling.  The Wall Street Journal is properly skeptical of the permanence of a favorable court outcome, as it is with the possibility of a reversing ruling by an NLRB populated with President Donald Trump appointees.

The WSJ is hopeful regarding another path, the Protecting Local Business Opportunity Act, which would codify that earlier standard.

That certainly would be a step in the right direction, but there’s no reason to believe a later NLRB wouldn’t simply ignore that or find a way to work around the standard—by creatively reinterpreting it to match it to then supposed social imperatives, as judges do too often with their own rulings.

No, the longer term and more effective solution is for Congress simply to abolish the NLRB altogether and not replace it.

Tax Reform and Charities

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Charities stand to lose billions in donations if Republicans advance their tax overhaul, prompting the nonprofits to carefully attempt to persuade lawmakers to reshape their plan.

As a result of a proposal to double the standard deduction and prevent people from deducting state and local taxes from federal taxable income, fewer taxpayers—5% instead of 30%—would have a financial incentive to itemize their deductions, including their charitable gifts, according to several estimates.

Especially estimates by charity associations, who also have a vested interest in claiming that, with no deduction incentive, Americans won’t donate to charity as much as we do presently.  Americans, though, at least the vast majority who do donate to charity, do so because it’s a right thing to do, not because we get a tax deduction for the donation.  That last simply makes no financial sense. Say a donor is in the 39.6% bracket.  If he makes a $1,000 donation, he’ll get a deduction of $396.  His donation still will cost him $604: he’s lost money on the donation/deduction exchange.  The cost to the donor increases as we go down the brackets.  American taxpayers aren’t stupid.

When we put a charitable contribution and its deductiblilty in the context of the rest of the deductions, we see even further the foolishness of the concern.

For example, a married couple with costs of $7,000 in mortgage interest and $6,000 in local taxes would exceed today’s $12,700 standard deduction. That couple would have an incentive to itemize and deduct every dollar of charitable contributions.

The totality of deductions must exceed a threshold before the deductions can be taken, and then only the amount exceeding the threshold can be deducted—all of them together.  Thus, a charitable deduction in combination with a mortgage deduction gets the deduction spread across both costs together—driving the cost of the charitable donation even closer to the amount actually donated.

American taxpayers aren’t stupid.

David Wills, President Emeritus of the National Christian Foundation has a different take.

We don’t think that anybody should have their charitable giving taxed. Anybody[.]

Leaving aside the illegitimacy of using our tax code for social engineering, the tax on a charitable donation would become pretty unimportant to the donor under any serious tax code reform, including the present one that’s on offer.

American taxpayers aren’t cheap, either.

In short, I’m not convinced charities will suffer overmuch with a combination of lower tax rates and elimination of the charitable tax deduction (among other deductions also being eliminated)—especially given the doubled standard deduction that’s in the current proposal.  With more money in our pockets instead of Uncle Sugar’s, Americans will be freer to donate.

We Americans are neither stupid nor cheap.