Tag Archives: political economy

Domestic Protectionism

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Illinois State Congressman Michael Zalewski (D), after consulting heavily with General Motors, wants car makers to be able to operate self-driving taxis—which, of course, those same car makers would make.

However.

His bill, introduced February 8, would limit access to the business to companies that make their own vehicles. That means GM would be eligible, but not tech companies like Uber Technologies Inc that are developing their own self-driving cars and don’t make their own vehicles.

Nor would Google be allowed in.  Or Lyft, were they to want to get into the business.  Or an IBM, should it want to build a Watsonmobile.  Or….

After falling behind in self-driving cars, GM has unleashed its powerful lobbying team to cultivate relationships with statehouses. The largest US vehicle maker by sales has a long history of backing legislation to preserve its interests, including a bill in Indiana last year that would stop electric-vehicle maker Tesla Inc from operating its own stores there.

What a surprise.

Of course, GM is denying ulterior motives, but this is just internal protectionism—anti-competitive and monopolistic.  Rather than competition pushing car companies to produce better cars, including self-driving ones, the fearful ones like GM are pushing to squelch competition.

It’s no wonder that a bare nine years ago GM was facing bankruptcy up close and personal.

A Sense of Self-Importance

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That’s the sense of the European Union as it desperately seeks validation from the US for its existence—as if, as The Wall Street Journal put it, an American Administration is responsible for the EU’s fate.  Here’s European Commission President Jean-Claude Juncker:

I do think the United States needs a strong, united European Union on all possible issues.

We’d certainly benefit from a united front on the continent on matters relating, for instance, to Russia.  But this doesn’t need an EU; it simply needs a common understanding by the continental nations of the threat posed by Russia.

Such a united front, also, isn’t likely in the form of an EU, as fractured and divided as that institution is on matters of border sanctity, immigration, national debts and who’s responsible for their repayment, taxing régimes, trade with nations outside the EU’s nominal boundaries, membership and desirability of membership, and on and on.

The EU’s overblown sense of its own importance is a sign of its entirely justified insecurity.

Immigration—Whose Rights?

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Here’s Mexican Secretary of Economy, Ildefonso Guajardo, on the question of whether NAFTA should be renegotiated:

Logically, there wouldn’t be incentives to continue collaborating on the issues most important to national security in North America, such as the issue of migration[.]

And this:

[T]he Trump administration’s effort to step up deportations have already prompted an aggressive campaign by some Mexican officials, governors and public figures to fight the policy by jamming up US immigration courts.

That particular bit of business has been noted earlier.

Because foreign individuals or those who are part of a flow of migrants have their own right to enter another country, or to be in another country, just because they want to or are on the move?

This is, in many respects, the obverse of my piece yesterday: does a foreign national retain his home country’s rights when he’s inside the US (for instance, Mexico has made it illegal to prevent a Mexican citizen from leaving Mexico)?  Does a foreign national have an intrinsic right to be in our country, independently of our wishes, even our law?

Note to Self: Delete notes to self before publishing a piece.

The Left Gives the Game Away

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Again.  Buried at the bottom of a Wall Street Journal piece on the auto industry’s effort to get the Obama administration’s last-minute (almost literally) attempt to make permanent fuel standards (also last minute because the underlying research wasn’t even going to be complete until 2018) is this rationale from Roland Hwang, at the National Resources Defense Council’s Director, Energy & Transportation Program, as paraphrased by the WSJ.

relaxing standards could hurt Americans depending on clean-car technology jobs.

Because EPA regulations are all about creating jobs and not about mitigating pollution.

Foolish

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Bill Gates, the co-founder of  Microsoft and world’s richest man, said in an interview Friday that robots  that steal human jobs should pay their fair share of taxes.

He said, and he was serious,

Right now, the human worker who does, say, $50,000 worth of work in a factory, that income is taxed and you get income tax, Social Security tax, all those things.  If a robot comes in to do the same thing, you’d think that we’d tax the robot at a similar level.

No, I wouldn’t.  Leave aside his blithe assumption that that money is the government’s in the first place, and not the property of the human worker.  Leave aside his blithe assumption that the government needs the money.  Leave aside his blithe assumption that a human worker should be taxed for a stranger’s current retirement and medical needs (Gates omitted the Medicare-related taxes also collected) instead of his own future retirement and medical needs.  Leave aside Gates’ omission of the employer’s payroll taxes on that human worker’s labor.

The whole point of automation is to hold down costs, is to be competitive with other companies, and an outcome of all of this is lower costs to the consumers who are using—in some cases dependent on—the goods and services being sold.

Recode, citing a McKinsey report, said that 50% of jobs performed by humans are vulnerable to robots, which could result in the loss of about $2.7 trillion in the US alone.

Loss to whom?  One “loss” is to government revenues—but there is no submission of a justification for Government’s need for the revenue.  Another loss seems more real: to the private sector.  The money isn’t lost, though, it’s misallocated—to unnecessarily high cost labor, which translates into unnecessarily high cost to consumers.

Besides—the robots already pay taxes, at every company along the production path that leads to a completed robot: costs of acquisition of that stage’s components—from the mine on up—and income tax on their part of that stage company’s income, and on the final assembly’s cost allocation in the production of the final good or service.

Human workers don’t pay much of this at all.  This is just another backdoor effort to prop labor costs artificially above the value of the labor.  And it’s foolish.