Tag Archives: regulation

It’s a Start

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The Centers for Medicare & Medicaid Services has been instructed by President Donald Trump to adjust its rules to allow the States to adjust their own rules to require work for Medicaid payments.

This is a very good start.  There are two remaining steps, though.  The funds transferred to the States in support of Medicaid need to be converted to block grants with no strings attached.  Each State knows its own medical support needs far better than does the Federal government.

The last step is to begin reducing, over a short number of years, the size of those block grants until no funds at all are being sent to the States.  This will get the Feds out of the States’ business, remove an extortion tool from the Feds’ kit which the Feds use to push the States into doing (or not doing) things the Feds demand be done or not done, and it will greatly reduce Federal spending.  In 2016, the Federal government sent almost $350 billion to the States in Medicaid transfers.

Facebook Revamp?

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Christopher Mims had a piece on this, that Facebook MFWIC Mark Zuckerberg says he’s interested in doing.  Mims opened his article with an important question:

So here’s the multibillion-dollar question: is Mr Zuckerberg willing to sacrifice revenue for the well-being of Facebook’s two billion-plus users?

Unfortunately, his piece centered on the potentially addictive nature of Facebook (among other virtual, interactive social media).  Important as money is to running a business, and important as addiction is to handle, Mims missed a number of larger questions—which bear on addiction, but not exclusively so.

  1. making sure that time spent on Facebook is time well spent Whose definition of “time well spent?” Is Facebook going to dictate that to its users?
  2. encourage meaningful social interactions Whose definition of “meaningful?” Is Facebook going to dictate that, too?
  3. push us away from harmful ways of using the service Whose definition of “harmful?” Will Facebook dictate that to users, going beyond the possibly addictive nature to other definitions convenient to Facebook?
  4. steps include [what] Facebook…believes will reduce engagement on the service, including hiding click bait and fake news Whose definition of “click bait?” Of “fake news?” How will Facebook prove it’s not merely censoring? It already has been exposed as having an unbalanced coterie of “content moderators” who censor what they personally view as unacceptably conservative.

All of this, also, elides Facebook’s well-known lack of concern for user privacy, invading it at will for “business” purposes.

Trade Reciprocity

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When the Committee on Foreign Investment in the US refused to approve a deal between the People’s Republic of China’s Ant Financial Services Group and MoneyGram International Inc, wherein the former would acquire the latter, Anjani Trivedi in a Wall Street Journal article lamented the demise of “deal making” between American companies and PRC companies.

Beijing has softened its attitude somewhat recently, relaxing its foreign-investment policies to lure more capital into specific sectors, including financial services. With the CFIUS decision on Ant and MoneyGram, it’s clear such moves aren’t going to be met with much reciprocity.

And

For investors, the takeaway is that the “China bid” that has helped boost global asset prices this century may be gone for good….

Leave aside the artificial hysteria of “gone for good.”  The PRC’s “moves” are empty rhetoric, as their limited nature demonstrate. Further, such “moves” can only be tokens as long as the PRC demands that partnership with Chinese companies; or transfer of technology, including proprietary tech; or PRC-run back doors into foreign business’ software be accepted by the foreign business as the price of doing business in the PRC.  Such “moves” can only be tokens so long as PRC acquisitions of US companies are aimed not at strengthening a business but at “acquiring” US technology.  Such “moves” can only be tokens so long as Chinese companies are arms of the PRC’s government.

There’s nothing with which to reciprocate.

A Thought on Student Loans

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Education Secretary Betsy DeVos is taking steps to redress the Obama administration travesty of a student loan program, but these can only be interim steps and by themselves are entirely insufficient.

Unfortunately, the student loan programs are entirely dysfunctional and want complete revamping. My high-level suggestions:

  1. student loan discharge only via bankruptcy, no special treatment of these loans
  2. let schools and students write their own loan agreements, including interest rates and payback provisions, without Government interference
  3. hold those schools and students to those agreements
  4. if Government guarantees any student loans, do so IAW the following:
  • interest rates charged must be commensurate with the employability and median first-five-year pay of the major being pursued; higher rates for lower employability and median pay. Higher risk loans should pay higher rates
  • in the event of bankruptcy discharge of a loan, the school floating the loan must completely reimburse the government, NLT the following fiscal quarter, for the taxpayer loss from the bankruptcy discharge.

Spotify and Crony Capitalism

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Spotify AB wants to do an initial stock offering, an IPO, on the New York Stock Exchange, and the company wants to do it without benefit of bank underwriters.  Oddly, the NYSE has to ask the SEC for permission to amend its own rules to allow this.  Even more strange, the SEC is dithering over granting that permission—to allow the private enterprise, the NYSE, to conduct its own business as it sees fit, and more proximately, to allow the private enterprise, Spotify, to conduct its business as it sees fit.  The SEC is claiming, with a straight face, that it has until the middle of February to make up its mind.

That the Government agency even thinks it needs to think about this is shady.  Government mandating bank involvement in a private enterprise company’s public offering? That would be textbook crony capitalism.

The SEC had concerns that Spotify’s direct listing could open the door for other companies with potentially risky financial profiles to access the public markets without giving investors sufficient protection[.]

Caveat emptor.  Government-favored bankers Us investors don’t need the protection of Big Brother. I understand that personal responsibility is anathema to Government bureaucrats, but this is a shield too far.

The SEC needs to reject such…stuff…stop dithering, and grant the permissions out of hand.