Tag Archives: regulation

Apparently Bureaucrats Don’t Have Enough Control Already

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The European Commission is considering unilaterally expanding the scope of its authorities.

The European Union’s antitrust authority on Friday said it was considering changes to its merger review rules to include a wider swath of technology and pharmaceutical deals that normally wouldn’t fall within its purview but could possibly harm the bloc’s internal market.

…the European Commission said it was fielding opinions from the public on whether the regulator should also probe mergers involving companies with smaller revenues.

Because instructing the big companies on the business decisions the Commission would permit them to take doesn’t have enough juice for them anymore.

Such a move would be especially significant for the digital and pharmaceutical sectors, the EU said, where an acquired company might generate little turnover but holds commercially valuable data or owns products under development that haven’t yet been marketed.

That’s an area of regulatory vacuum, and we can’t have that, now can we?  Besides those data and nascent products represent action on which the EU wants its vig.

Restricting Supply or Demand?

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Only in a centrally planned economy would either be tried, much less both on the same item.

Seventeen Chinese cities have imposed restrictions on buying real estate in the past week as China’s leadership tries to cool a home-purchasing frenzy that is sending prices soaring.

These restrictions come with the justification that demand is too high—there’s too much money running in—for the supply of housing that’s actually available.  And, in addition to increasing the down payment required to get into a house (which should be a bank decision, not a government one (except that the PRC’s banks are controlled by governments at various levels of the hierarchy)), the government is requiring that

families who have two or more properties [are barred] from taking out mortgages and buying more.

By restricting demand in this way, the government also is restricting the supply.  While it’s true that capital projects—house and apartment building, in this case—take more time to come to fruition than money takes to come into the demand side, this artificial restriction on demand eliminates incentive to supply.

The PRC is ignoring the fact that, in a properly free market, supply and demand do a fine job of restricting each other—and at prices satisfactory to both suppliers and demanders.

Why Does Seattle Hate The Unskilled?

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The Seattle city council, in its infinite Know Better wisdom, has passed what it’s pleased to call a “secure scheduling” ordinance.  This is an ordinance that requires “certain” employers

to tell their workers two weeks in advance which shifts they will be working.

Should an employee be called in for extra hours, say, to replace a sick co-worker, the employer will have to pay him added “predictability pay.” Should an employee be sent home early—maybe because business is slow or a delivery is late—the employer must compensate him for half the hours he was scheduled to work.

And, if you can believe it,

[O]n-call staff will earn half pay for shifts when they are not called into work, while those employees that have less than 10 hours between two shifts will receive time and a half. Managers will also be required to offer any additional hours to current employees before taking on new hires.

Never mind some well-known actual facts.

In response to Seattle’s recently passed minimum wage law that will quickly raise the minimum to $15/hr, a University of Washington study released last summer

found that the mandated wage increase has led to fewer hours worked per-employee and slightly less overall employment for Seattle’s lowest-paid workers, compared to similar earners in other parts of the state.

And last spring the San Francisco Chronicle reported that in response to San Francisco’s “secure scheduling” ordinance,

1 in 5 surveyed businesses had cut back on the number of part-time hires, and a similar number were scheduling fewer employees per shift[.]

Of course, the worthies on Seattle’s city council know these things—the histories are much too recent for them not to know—hence the question in my title.

Federal Funding for Medicaid

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Medicaid is a State-run program for providing a measure of medical service for that State’s relatively indigent citizens.  The program is State-run, but it’s jointly funded by the State’s taxpayers and by the nation’s taxpayers via Federal funds transferred to each State for the purpose.  I’ve often written that Federal funds for Medicaid should be ended and that the States should  be allowed to fund and manage their Medicaid programs alone—without Federal funding and associated Federal interference.

Here’s another reason to end Federal funding for a State’s Medicaid program.

US District Judge Kristine Baker issued a preliminary injunction preventing Arkansas from suspending payments to Planned Parenthood for any services to Medicaid patients in the state. Republican Governor Asa Hutchinson last year terminated the organization’s Medicaid contract because of secretly recorded videos made by an anti-abortion group.

Baker also expects that Planned Parenthood would win at trial, hence her injunction.

Unfortunately, the Federal judge is right on the law, if only on 14th Amendment grounds, and on the courts’ Taney-esque position that unborn babies aren’t fully human.

Other than changing that law, though, the way around this sort of thing is that elimination of Federal funds for any State’s Medicaid program.  With that elimination, States that disapprove of Planned Parenthood’s funding of abortions could stop funding Planned Parenthood, and States that approve of easy abortions could continue to do so.

Some Data on the Obama Economic Recovery

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And on Democratic Party Presidential candidate Hillary Clinton’s policy impact on that recovery from the Panic of 2008, since Clinton has promised, proudly, to continue and extend President Barack Obama’s (D) economic policies.  These data are via Robert Barro’s (Harvard University economics professor and American Enterprise Institute visiting scholar) piece in The Wall Street Journal.  He and a colleague, Tao Jin, looked at

macroeconomic disasters in 42 countries, featuring 185 contractions in GDP per capita of 10% or more. These contractions are dominated by wartime devastation such as World War I (1914-18) and World War II (1939-45) and financial crises such as the Great Depression of the 1930s.

Among other things, they found that blaming the slow- to non-recovery on the Panic’s severity or on global financial crises, in their gentle phrase, “conflicts with the evidence.”

Among the specifics of their findings:

The growth rate of total nonfarm payrolls averaged 1.7% a year from February 2010 to July 2016, despite the drop in the labor-force participation rate. The post-2009 period is not a jobless recovery; it is a job-filled non-recovery.

And

[T]he drop in the unemployment rate—from 10% in October 2009 to 4.9% in July 2016—has been impressive, though overstated because of the decrease in labor-force participation.

Never mind that half the GDP lost during the contraction is typically recovered within two years of a recovery’s start.

So, what policies led to this failed recovery?  There have been lots, ranging from attacking hydrocarbon-based energy production and the destruction of jobs with the subset of the Democratic administration’s war on coal (and growing war on oil and natural gas), the Obama EPA regulations intruding onto private property (no cattle ponds on private ranches, recall), Labor Department’s and NLRB’s restrictions on non-union labor, and so on.  The primary policy, though, has been this administration’s increase in government transfer payments.

Federal social benefits to persons (things like Medicaid, Medicare, Social Security, and food stamps) as a fraction of GDP rose from 8.7% in 2007 to 10.9% in 2015.  That’s a 25% rise in the fraction of GDP that’s money taken out of the private economy, washed through a middleman government, and the remainder then passed along to others.  In real dollar terms, that’s an increase from a skosh over $1.3 trillion in 2007 to a skosh under $2 trillion in 2015, an increase of more than 50%.

That’s money not applied to actual economy-stimulating and job-creating activities: free trade, rolling back inefficient regulations, fiscal discipline, and, yes, public infrastructure such as highways and airports.  That’s money not applied to enhancing productivity.

The growth rate of GDP per worker from 2010-15 was 0.5% per year, compared with 1.5% from 1949 to 2009.

Instead, Clinton not only wants more of the same.  She was for the Pacific and Atlantic free trade deals on offer (and one soon to be before Congress) before she lately found it politically expedient to be against them.  She favors increasing regulation—evil Wall Street and political speech are her targets du jour—not reducing it.

Her idea of fiscal discipline is increased spending, partially paid for with higher taxes.  She wants “free” education, paid for with higher taxes; reduced borrower liability for student loans, paid for with higher taxes; free day care, paid for with higher taxes; free health care—single payer, yet (never mind that contradiction)—paid for with higher taxes; free family leave from employment, paid for with higher taxes and higher prices since the employer must pay, also, if only through reduced output and so reduced sales; and on and on.

And that infrastructure work?  She is for that—so long as it’s done by Government approved union labor, and not by the most cost efficient contractors.