Tag Archives: political economy

Here Comes the Extortion

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Nice business you got there. Be too bad if it got shut down for some reason.

The United Steelworkers union told its workers at nine US refineries and chemical plants to strike early Sunday morning….

And they’ve gone ahead and walked out, trying to shut down nine refineries from Houston to LA. For demurring on paying the union vig. USW’s threat to the viability of these refineries ultimately could affect

30,000 workers at 230 refineries, oil terminals, pipelines, and petrochemical plants[.]

USW threatening the viability of a company for not paying up is an overstatement, you think? These refineries still have to make payroll—even of those union workers who no longer are working and earning their paychecks—they still have supplier bills to pay, they still have maintenance bills to pay, they still need to run their R&D programs, they still…. They can’t, though, if they can’t refine petroleum and have a product to sell to earn the revenue needed to pay those bills.

The USW knows that. It’s why they’ve chosen to strike—to attack the viability of their target companies and so to force their surrender.

In the final days of negotiations, the union rejected multiple offers from Shell, which led negotiations on behalf of US refinery operators.

Notwithstanding that, USW International President Leo Gerard claimed in wide-eyed innocence,

Shell refused to provide us with a counteroffer and left the bargaining table. We had no choice but to give notice of a work stoppage.

It’s time unions lost their exemption under the Clayton Antitrust Act, the successor law to the Sherman Antitrust Act which bars companies—and the USW is a company—from abusing their monopoly power. A monopoly power the USW clearly has with its near total control over the labor force of these refineries, and a monopoly power the USW clearly is abusing with its naked threat to the viability of those companies through its refusal to work—its refusal to let those companies earn the revenue they need to pay their bills.

Death Taxes

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Or, as President Barack Obama likes to call them, “trust fund taxes.” Either way, it’s another Progressive attempt to steal the gains of one family—now with its parent safely dead—to transfer them to another group of “families” of whom Obama approves.

As the graph below demonstrates, this latest wealth “redistribution” grab by Obama would represent, if it’s passed, a 36% increase to a world-beating 68% of a family’s hard-earned accumulated prosperity.InternationalDeathTaxRates

Not even the famously social-tax heaven of the UK confiscates that much of a family’s wealth on the death, nor do the social democracy nations of France, Belgium, Spain, Finland, Norway, etc. Russia and the People’s Republic of China have no death taxes at all.

Here’s the deal:

Under current law, when a parent or grandparent dies, the increase in the valuation of his or her asset from when it was originally purchased is not taxed.

This is to offset the effects of the estate tax.

But

Obama’s plan would tax estates and impose the regular capital gains tax on inherited assets—a business, property, or stocks.

That business, far from being a Buffet’s holdings in Berkshire Hathaway, or a Gate’s holdings in Microsoft, is typically the family’s only asset: a mom and pop business that mom and/or pop have spent a lifetime building, with little to no outside cash available with which to pay the Obama vig. They’d have to sell the business; they’d have to sell their children’s future to pay up. That property usually is the family home, which the family finally was able to afford in the late afternoon of the deceased parent’s life. Those stocks…. No trust funds here.

But, no worries. Obama and his Democrat Party Know Better. Their money, temporarily reposing in our hands for a few years, will be well used. Obama says so.

Austerity

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President Obama called for an end to “mindless austerity” on Thursday as he announced his desire to end “sequester” spending cuts in his budget for 2015.

No, Obama wants to perpetuate—even expand—the deliberate austerity of excessive government spending and ever-rising taxes. His “budget” calls for a 7% increase in Federal spending to be paid for with increased taxes, including increases in the death tax on inheritances (which Obama is attempting to disguise by calling it a “trust fund” tax). Indeed, Obama’s “thinking” on taxing was exposed by his attempt to tax Americans’ savings for our children’s college, our 529s.

If the Republicans and Conservatives in Congress are smart, they won’t waste time on the Obama stuff. They won’t even respond to his nonsense. They’ll just ignore it and pass a conservative budget that includes both tax reform and tax rate reductions.

Obama’s going to veto anything this Congress passes, anyway; his vetoes should simply be used to shape the ’16 elections.

Unemployment and Unemployment “Benefits”

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From the Abstract of the Naitonal Bureau of Economic Research’s just-released paper, The Impact of Unemployment Benefit Extensions on Employment: The 2014 Employment Miracle? by Marcus Hagedorn, Iourii Manovskii, and Kurt Mitman [emphasis added]:

We measure the effect of unemployment benefit duration on employment. We exploit the variation induced by the decision of Congress in December 2013 not to reauthorize the unprecedented benefit extensions introduced during the Great Recession. Federal benefit extensions that ranged from 0 to 47 weeks across US states at the beginning of December 2013 were abruptly cut to zero. To achieve identification we use the fact that this policy change was exogenous to cross-sectional differences across US states and we exploit a policy discontinuity at state borders. We find that a 1% drop in benefit duration leads to a statistically significant increase of employment by 0.0161 log points. In levels, 1.8 million additional jobs were created in 2014 due to the benefit cut. Almost 1 million of these jobs were filled by workers from out of the labor force who would not have participated in the labor market had benefit extensions been reauthorized.

If you want more of something, you subsidize it. The Democrats, since the Panic of 2008, have demanded ever more unemployment benefits, and it was only over their objections that the repeated extensions were halted and unemployment benefits stopped.

Hmm….

Obama and “Energy”

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President Obama announced Sunday that he’ll use his executive authority to designate 12 million acres in Alaska’s Arctic National Wildlife Refuge (ANWR) as wilderness, walling it off from resource development. This abrogates a 1980 deal in which Congress specifically set aside some of this acreage for future oil and gas exploration.

He also did this without so much as a faretheewell to any of Alaska’s leadership, including, explicitly its Republican delegation in Congress. Not a what do you think. Not a heads up. Nada.

Here’s his cynical divide-and-conquer bribery attempt:

The Obama administration is poised to unveil a draft plan for selling offshore oil and gas leases that is expected to rule out auctioning drilling rights in parts of the Atlantic Ocean as well as in some Arctic waters and along the West Coast between 2017 and 2022.
…
The draft plan is expected to keep the door open for selling oil and gas leases off the coasts of Virginia, North Carolina and South Carolina, though with a larger buffer zone than previously outlined. Possible oil and gas leases in the Chukchi Sea [off the northwest coast of Alaska] also would be set back further from the coast than during a previous 2008 auction of drilling rights in those Arctic waters.

This draft also would set off limits areas in the Beaufort Sea, off the north coast of Alaska, that had been available before this. It’s a naked attempt to get Republicans to abandon Alaska in return for the promise of future drilling elsewhere.

None of this has anything at all to do with energy or energy independence for the US. It’s entirely, and tightly, centered on an insecure man trying to show how powerful he is to those lesser men and women impudent enough to disagree with him.