Tag Archives: political economy

A Foreign Policy Fallout

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Prime Minister Malcolm Turnbull announced Tuesday that the biggest military contract in Australia’s history, a $40 billion tender to build 12 submarines, will go to a French naval contractor.  That’s a defeat for Japan’s bid, and with it a lost opportunity to deepen cooperation among the leading Pacific democracies facing China’s rising military.

For all of Turnbull’s rationalizations, this was a major factor in rejecting the Japanese offer:

The most significant influence may have been China, Australia’s largest trading partner, which openly campaigned against Japan’s bid. Chinese Foreign Minister Wang Yi warned his Australian counterpart in February to remember World War II….

Yeah.  The PRC disapproved, and Australia, with the strength of its American ally demonstrated by our response to the PRC’s occupation of the South China Sea, knuckled under.  Don’t think Japan, in the face of our response to the PRC’s occupation attempts in the East China Sea, isn’t watching this very carefully, and not only for the implications to its shipbuilding industry.

Divide and conquer works.  Especially when the two being divided from each other have been abandoned by a United States become timorous in the face of PRC behaviors.

Minimum Wage Revisited

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Kevin Williamson, at National Review, had a thought that’s only now percolating to the surface of thinking Americans and that still is avoided by the American Left.

Properly understood, raising the minimum wage—and having a minimum wage at all—is camouflage, something to talk about and fight about while we’re not talking about and fighting about the more important underlying issue.  Declaring that all American workers shall be paid at least $15 an hour is not the same as ensuring that all American workers produce $15 an hour worth of value, and, eventually, the disconnect between those two considerations must make itself felt.

That part is well understood, and that’s a part that is deliberately ignored by the Left.  But there’s this, too.

Krugman, Clinton, Sanders, et al., have a backward and primitive view of government.  For them and for their fellow Hobbesians, the Middle Ages never really ended, and the role of the sovereign is to distribute benefices and issue decrees.  Unhappy with your wages?  Petition the prince to decree that they shall be otherwise, and dare any gimlet-eyed economist to point out that the imperial tailor is skimping on the ermine.

Yeah.  Minimum wage mandates are just an excuse for governing by fiat, for substituting rule by law for rule of law.

Williamson took a more gentle position on that; he suggested that it’s a lack of understanding by minimum wage proponents of the facts of economics and of human complexity.

I don’t think the leadership of the Left is that ignorant, or that naïve.  They know full well the facts of economics and of human complexity.  That’s why they carefully elide those things enroute to their rule by (Left’s) law: minimum wage mandates are a tool, not a goal.

Saviors

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Don Boudreaux, at Cafe Hayek, had some thoughts on this sort of folk.  Here’s one:

Saviors need victims who need saving.  And if such victims are not real and readily available, the saviors conjure them up by convincing themselves that this or that group of people are helpless victims eager to be raised from the muck of their misfortunes by the saviors.  Sometimes the saviors convince even the groups they seek to save that they—the members of these groups—are indeed mired in a muck from which they can be extracted only by the saviors.

This much is true, but I think Boudreaux missed a couple of other characteristics of these saviors.

One is that these become addicted to their saviorism: the addiction of needing victims is the saviors‘ desperate need for the ego rush of their helping, whether that help is real or a figment of the pseudo-benefactor’s imagination.  This sort of savior cannot get along without the dependency of others on their own largesse.

The other missed characteristic is pure, raw power.  That dependency of other on these ones’ handouts is, for these, nothing more than an enhancement of their own personal power, whether political, economic, or social.  The dependent ones represent votes, or tools for gathering donations from third parties (a significant fraction of which goes to “overhead”), or prestige among peers and credulous acquaintances and strangers.

One way by which we readily can discriminate such saviors from legitimate benefactors is the nature of the benefaction.  The latter offers hands up, temporary aid, means by which the beneficiary can get back on his own feet and become/resume independence and personal responsibility.  The former gives handouts, which serve only to maintain the “beneficiary’s” dependency on his savior.

Another Intrusive Government Regulation

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US regulators proposed requiring the nation’s largest banks and financial firms to hold back executives’ bonus pay for four years, extending by a year the common industry practice on Wall Street incentive payouts.

The plan would also require a minimum period of seven years for the biggest firms to “claw back” bonuses if it turns out an executive’s actions hurt the institution.

In a free market economy—that is to say, a healthy economy—this would be a business decision, validated or rejected by that business’ owners and its marketplace customers.  However, in this Progressive-Democrat Party administration, this is a Government Decision, made by Government Know Betters, because those actually participating in an economy, with their own money on the line, can’t possibly understand the situation.

Another hint of a Government with too many employees and too little work: this…rule…was developed by no less than six agencies.

Who Enrolls in Obamacare?

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What’s the effect of that on costs under Obamacare?  The Blue Cross Blue Shield Association rudely conducted a study of the matter, and they found

  • New enrollees in individual health plans in 2014 and 2015 had higher rates of hypertension, diabetes, depression, coronary artery disease, HIV and Hepatitis C than those enrolled before ObamaCare.
  • New enrollees received significantly more medical care, on average, than those with individual or employer-based plans.
  • New enrollees had more inpatient admissions, outpatient visits, prescriptions filled and emergency room visits.
  • Medical costs for new members were, on average, 19% higher than for employer-based members in 2014, and 22% higher last year. Average monthly medical spending for those newly enrolled members also rose at a higher rate in that period.

And

A recent Daily Caller examination of annual reports from insurers also found storm clouds on the horizon of the exchanges.  It found that 8 of the 11 remaining exchanges may fail this year, despite assurances from the Obama administration.

All of which will lead to rising costs.  That increased use of medical care and health coverage plans, paid for with OPM, will drive health plan providers’ costs and so their premiums charged the customer (read: the government/your tax money).  The greatly reduced ObamaMarts will drive costs to the health plan provider customer, since subsidies—OPM—will be lost to them, also.

A report from Freedom Partners earlier this year showed premiums on the individual market are rising by double digits in most states.

Didn’t President Barack Obama (D) promise the contrary?  Both the current Democratic Party Presidential candidates are promising to extend this even further, too.

Elections have consequences.