Tag Archives: political economy

Tax Pollution

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That’s what Richard Revesz thinks we should do, instead of subsidizing this or that energy company or industry. In his Wall Street Journal piece, Revesz thinks that “greenhouse gases, smog precursors and other pollutants” should be taxed and all those subsidies done away with.

He’s half right. Subsidies have no place in American economics. To the Democrats who say “green” energy companies need the subsidies in order to grow (quickly or at all), they’ve answered the claim themselves, although they’re loathe to admit it: if a company needs a government subsidy to exist or to grow in our competitive economy, it isn’t ready for our economy. To others who say the oil and gas companies need the subsidies (a relative pittance, anyway, compared to green’s subsidies), the answer also is no they don’t. They can compete.

Revesz would be fully right if we could arrive at an accurate definition of “pollution.” Consider the current en vogue “pollutant,” atmospheric carbon dioxide. Pseudo-climatologists and other “environmentalists” like to fear-monger over CO2 in our air. They carefully ignore the fact that increases in atmospheric CO2 come after planetary warming by some 800-1,300 years. Far from being a pollutant, it’s the ordinary output of respiring life and with those lagging increases it confirms the increasing health of the planet and its burgeoning life.

Until facts stop getting in the way of the money flow, there’s no possibility of accurately defining “pollutant,” and so there’s no reasonable way to tax it.

A Thought on Trump and Fiorina

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I report, you decide. Donald Trump has suggested that Carly Fiorina doesn’t have the face of an American President. He doesn’t comment, though, on whether he has the hair of an American President.

More importantly, though, Trump also has insisted, of his four business bankruptcies, that they were just

routine corporate deals allowed by law and repeated by “many, many others on top of the business world.”

I anticipate that, in tonight’s debate, he’ll attack Fiorina’s record at Hewlett-Packard (yes, the debate is expected to center on foreign policy. For good or ill, Trump has never stayed on script). What he’ll carefully not mention though, is that HP didn’t go bankrupt—it prospered heavily during an economic downturn—while Fiorina led the company. HP has never gone bankrupt.

Neither Fiorina’s HP nor any other stage of HP’s history has the corporation even had to hide behind the euphemism of “routine corporate deals.” Fiorina’s HP is not one of those “many, many others on top of the business world.”

Our country can’t afford to go bankrupt* once, much less four times.

 

*Yes, yes, I know the nation can’t go bankrupt in a legal sense, it can print dollars to its heart’s content. But doing so is an admission of functional bankruptcy even if not of legal bankruptcy.

Walker and Unions

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Governor Scott Walker has some plans for unions, if he’s elected President. Walker says he would

eliminate the National Labor Relations Board, prohibit federal employee unions; institute right-to-work laws nationwide; and repeal the Davis-Bacon Act of 1931, which requires the payment of local prevailing wages to workers on federal construction projects, often boosting pay and project costs.

There’s much to like here. All of these boost competition and lower costs to American consumers, which in turn will be highly stimulative of our economy.

The only one I disagree with is the elimination of federal employee unions. Unions greatly simplify contract negotiations, and that can lower costs, even for a government employer. However. The right-to-work position applied to federal unions, and as Walker applied to Wisconsin government unions, is a good move. What Walker did in Wisconsin was to take away the unions’ privilege of collecting union dues from non-union members as a condition of working at all. He also took away the privilege of state government unions to direct a portion of member dues to political purposes unless the member agreed to the diversion. He also took away the privilege of state unions to strike. These all are worthy of application at the Federal level.

On his right-to-work proposal as a Federal law: it’s not a blanket right; Walker fully respects the 10th Amendment. Accordingly his proposal is structured to make right-to-work the baseline, but individual states can vote themselves as union shops if they wish.

Of course, if these proposals look like they’re taking off, we can expect very vociferous misbehavior by unions and their Democratic Party pets as they try to intimidate the proposals into defeat. It’s only necessary to review union and Democrats’ thuggery in Wisconsin as Walker worked his will there a few short years ago. Here, for instance. And here. And here.

Most of these are sound ideas, regardless of union fireworks and threats and actions, and they should be supported by whomever gets the Republican nomination for President, and they should be pressed for in Congress should that candidate be elected. That President, too, should go over Congress’ heads to their—and his—boss, us American citizens if Congress hesitates. That President should identify, clearly and by name, those Representatives and Senators who remain in union pockets.

The Fed, Everybody Else, and Interest Rates

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Will the Fed start raising benchmark interest rates this week? Lots of folks, including folks in the Fed are getting wobbly. I’ve written before about being wobbly in an economy.

Harriet Torry and Jon Hilsenrath, in a Wall Street Journal piece, were careful to point out that central banks raising rates doesn’t work very well:

In the seven years since the world’s central banks responded to the financial crisis by slashing interest rates, more than a dozen banks in the advanced world have tried to raise them again. All have been forced to retreat.

No, they weren’t. They all chose to retreat. That’s the minor point, though. The larger point is a big so what? Those economies named by Torry and Hilsenrath (generally European, Asian, and Australia) aren’t ours. They’re not as large, they’re not structured the way ours is, and none of them have the same imperatives ours does. Their economies, too, are largely influenced by our economy; ours is that large and globally dominant.

That other central banks do this or don’t do that is wholly irrelevant to what our central bank does or doesn’t do. There’s no symmetry here; it really is a one-way street.

Independently of all of that, the Fed has for a number of sound reasons set 2% as its inflation goal, and our economy hasn’t approached that rate in years. If the Fed wants 2%, it’s going to have to let interest rates rise to levels consistent with that inflation rate.

The Fed needs to start raising its rates this week as more or less scheduled. No waffling. No wobbling. No timing the thing. Just do it. Full stop.

Bad Tactics

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On the subject of removing Federal funding from Planned Parenthood, there’s no shortage of bad tactics floating about.

The conservative (note: small “c” conservative) wing of the Republican Party want to shut down the Federal government until they get the President to sign a defunding bill, whether in stand-alone or as part of the Federal budget. Never mind that they have no plan whatsoever for selling the shutdown to the public, they want to have their toddler’s temper tantrum.

On the other side of the question, Senate Majority Leader Mitch McConnell (R, KY) seems excessively timid even to try.

The way you make a law in this country (is) the Congress has to pass it, and the president has to sign it.

The president’s made it very clear he’s not going to sign any bill that includes defunding of Planned Parenthood—so that’s another issue that awaits a new president hopefully with a different point of view.

It may be true that it’ll take a different President to sign a bill that defunds Planned Parenthood. One important step on the path to getting a different President is for Congress to defund Planned Parenthood and force President Barack Obama to veto it. And then use that plain, immoral obstruction to get a decent President elected.

One wing of the Republican Party needs badly to grow up. Another wing of the Republican Party needs just as badly to grow some backbone.