Tag Archives: political economy

Projecting Again

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Recall the union violence threatened and inflicted in Wisconsin when Governor Scott Walker (R) was working to break union strangleholds on the state government and local school districts.

Now, in nearby Illinois, we get this.

The American Federation of State, County and Municipal Employees union sent a memo to its members expressing fear that in the face of union intransigence in negotiations with the State’s government, Governor Bruce Rauner (R) might use the National Guard and retired state workers to keep the government open should the AFSCME decide to strike.

Of what is the union afraid? That the work might actually get done, despite the union’s extortion attempt strike?

Or that the Guard might inflict violence on the strikers? If this, then it seems the union is projecting.

Medicare Funding

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The fund Medicare uses to pay hospitals will run out in the next 15 years, and experts say there are no easy answers to solve it.

Certainly not politically easy answers, and that does matter. However, the practical answer is quite simple, if expensive in the transition.

Keep everyone 55 and older in the current Medicare system, with the individual option to leave that system in favor of the one I’ve proposed many times and summarize here. It’s important to note also that the “experts” are referring only to Medicare Part A, the hospitalization part. My reform is broader and applies to Medicare Parts B, payments to physicians, and D, drug coverage.

Rescind the payroll taxes from both the employer and younger-than-55 employee, while requiring the employee to put his payroll tax equivalent into what would be essentially a Health Savings Account. This New Model HSA would contain investment vehicles of the account owner’s choosing—including stocks, bonds, mutual funds for the same, bank savings accounts, etc—and be held for the benefit of the account holder. Unlike the Old Model HSA, with its shameful limits, the NMHSA would have no income limits on contributions, no annual limits on contributions, no requirement to have a High Deductible Health Coverage Policy, none of those government-mandated limits.

Of course, this can’t happen in a vacuum. In conjunction with this, the bankrupt* Social Security system needs to be similarly privatized, also, and the overly expensive Medicare system blocked granted, on a declining-to-zero schedule, to the States. These need to be done, too, with significant tax rate reductions and Federal spending cuts (and not just one-time gimmicks or reductions in spending growth).

Most, if not all of the cost of the transition can be covered by that spending and taxing reform.

 

*Bankrupt: not strictly so because in a few short years, while the Social Security Trust Fund will be emptied of money, current payroll taxes still will be available to make the payouts, requiring the payouts to drop to 75% of their presently scheduled values.

Update: Corrected an empty reference to Part C to the correct reference to Part D.

The PRC’s Markets

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Beijing thought they could “rescue” the PRC’s stock market. Recall that those markets had tanked collapsed last month, with no bottom in sight. Then the government stepped in:

There is the buying program financed by the central bank. A state pension fund has gone into equities for the first time. Beijing mandated that anyone holding 5% of a company can’t sell for six months. And brokerage firms, directed by regulators, are sitting on a boatload of shares as inventory, notes Erwin Sanft of Macquarie.

There’s also the government rule that stocks aren’t allowed to fall more than 10% in a day—at that threshold, trading in the stock must halt. This, of course, only adds sell-off pressure to the next day…. There are additional overt government interferences, but you get the idea. Associated with this, the markets stopped falling and rose quite a bit. And there’s the PRC buying for its government accounts shares of Chinese blue chip companies, ostensibly to prop up those share prices.

Monday, all that propping up came to a screeching halt. Those markets fell, in that single day, 8.5%, and the representative indices stand at just 5% above the pre-intervention low of three weeks ago.

All of that fall represents investors—at least the ordinary citizenry and those investors not directly under government control—leaving the PRC’s markets. At this pace, the only players left will be the government and its agencies and government run “private” institutions. And the government’s blue chip stock holdings.

That’s a centrally planned economy by another name.

Democrats and Unions

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Illinois’ Democrat-controlled legislature—both houses—passed a budget earlier this year that spent $4 billion more than it intended to collect in revenue: a $36 billion spending bill against a $32 billion revenue bill. Never mind the rank dishonesty of this—bankrupt Illinois has no hope of raising those $4 billion except by borrowing, and these Democrat legislaturists know that. They have no intention, then, of repaying the borrowing, and that’s the dishonesty.

But leave that aside for a moment, and consider the following.

Governor Bruce Rauner (R) vetoed the bill because of that deficit, so the State is operating without a budget. Nevertheless, Rauner said the State would keep paying its government employees; as AFSCME said in support of Rauner’s decision,

public service workers in state government are on the job despite the lack of a state budget…and they should be paid for their work on time and in full.

Well, not so fast. Illinois’ Democrat Attorney General Lisa Madigan (just by happenstance, she’s also the daughter of the State’s Democrat Speaker of the House, Michael Madigan, whose own father was a New Deal pusher), with the full backing of her Democrat legislaturists, went into Illinois’ courts to block payment for those same “public service workers.”

Strictly to make a political point for their own benefit, these legislaturist Democrats are trying to prevent their employees from being paid, and they’re using their (erstwhile?) union allies as speed cushions for their bus. The Democratic Party of Illinois is typical of the national Democratic Party.

Democrats and Regulation

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Uber is successful in competing with the established taxi industry, and New York City Mayer Bill de Blasio (D) is all upset about it. He wants to freeze Uber’s (and other ad hoc rides-for-hire companies’) growth until he can figure out how to regulate them:

[W]e support a short pause in the rapid increase of for-hire vehicles to make sure that the future growth of this industry lives up to the policies and principles we set out as a city.

“Short pause.” Sure. He supported his argument in that piece by citing other jurisdictions where Uber had resisted…being over-regulated.

Hillary Clinton is his BFF on this:

while the “gig economy” may be “exciting” and “unleashing innovation,” “it is also raising hard questions about workplace protections and what a good job will look like in the future.”

Because. Just because. It exists; it has to be regulated.

Democrats abhor anything that’s not under their regulation, not under their control. Americans just are too stupid to see to their own affairs without Know Betters instructing us. And our Know Betters are the only ones qualified to define “what a good job will look like in the future.”

Update: de Blasio seems to have recognized the error of his ways. For now.  Clinton has not.