Tag Archives: regulation

Fairness

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Columbia College Chicago Professor of Philosophy Stephen T Asma is quoted in a recent Wall Street Journal:

Our contemporary hunger for equality can border on the comical.  When my six-year-old son came home from first grade with a fancy winner’s ribbon, I was filled with pride to discover that he had won a footrace.  … “No, it wasn’t just me,” he explained.  “We all won the race!” …. Everyone who ran the race was told that they had won, and they were all given the same ribbon.

More troubling than the institutional enforcement of this strange fairness is the fact that such protective “lessons” ill-equip kids for the realities of later life. … The focus on equality of outcome may produce a generation that is burdened with an indignant sense of entitlement.

Oh, wait….

Overregulation?

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Is this an example?  Shalini Ramachandran described Dish Network’s travails in expanding into the cell phone network.

The Federal Communications Commission is leaning toward putting limits on how [Dish Network Corp Chairman Charlie] Ergen can use the billions of dollars of spectrum he controls, FCC officials said.

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The commission…is seriously considering requiring him to limit his use of a slice of the spectrum to protect against interference on a neighboring spectrum band, the officials said—a move that Mr. Ergen said in an interview Thursday “would be a game changer for us.”

…

Current FCC rules require operators using satellite spectrum to offer handsets with a satellite chip, making the devices more expensive.  Dish has been awaiting the FCC’s decision on whether to allow the satellite operator to use its spectrum for a solely ground-based cellular network.

…FCC is close to approving Dish’s request, but with a buffer zone in which Mr Ergen could only operate at low power, which could mean worse wireless service.  …that limit would reduce the capability of Dish’s “uplink” spectrum—which handles the pathway from the cellphone to the tower—by 25%.  An additional 25% on top of that would be impaired due to interference…endangering Dish’s ability to compete in the wireless business….

This raises some questions in my poor, plebeian mind.  An FCC mandate concerning how a private entity might use his private property would seem to be an interference with the property rights of that private entity.  Is the restriction actually necessary to protect the neighboring property owner’s rights?

Should government be involved before the two private entities have had a chance to try to work things out on their own?

How does a satellite chip that uses a part of the spectrum create less interference from that spectrum than the absence of such a chip and continued use of that same spectrum?

Obama’s Economic Policies

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…are actively hurting our economy and our businesses—and so us.  Here are two illustrations.

First, The Wall Street Journal:

Half of the nation’s 40 biggest publicly traded corporate spenders have announced plans to curtail capital expenditures this year or next, according to a review by The Wall Street Journal of securities filings and conference calls.

Nationwide, business investment in equipment and software—a measure of economic vitality in the corporate sector—stalled in the third quarter for the first time since early 2009.  Corporate investment in new buildings has declined.

…

…business investment fell at a seasonally adjusted annual rate of 1.3%, according to a preliminary estimate from the Commerce Department.  The latest drop included a decline in investment in structures, such as buildings, at a 4.4% annual rate.  Investment in equipment and software stalled after growing at a roughly 5% annual pace in the first six months of the year.

It’s not just Big Business, though, the whole article from which the above excerpt came notwithstanding:

Of the four ways government can principally influence the economy for better or worse—fiscal policy, regulation, monetary policy, and trade—it appears that investors will continue to be forced to rely on monetary policy for help. Taxes will undoubtedly rise for some, and the one effective way the federal government could effectively ease more—regulatory policy—seems less likely now than ever before.  The Wall Street law firm Davis Polk has created a new business of simply keeping track of the seemingly infinite number of rules that will need to be written to complete the process of financial regulation put into place by Dodd-Frank.  Sadly, only 33% of the 398 required rulemakings have been finalized.  (Only 265 rules to go!)  Another 33% have yet to have even been proposed.  Is it any wonder the Fed has had trouble turning excess reserves into effective monetary stimulus?

What are we doing as a company in light of this uncertainty?  We’ve put on hold business expenses short of pencils, and any capital spending we were considering, including an update of the men’s bathroom some have begun to call “the latrine.”  Instead of calling clients and focusing on our research, we are scheduling, probably in vain, conference calls (read fees) with our attorneys and accountants to try to create contingencies against potentially bad outcomes for us in the tax code.  It has forced us to ask ourselves questions that seem at odds with economic growth, like, are there any unintended consequences of employing more than 50 people?

 

h/t for the second for The Spirit of Enterprise

Good News

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There really is some coming out of the election last Tuesday.

Reelecting President Obama notwithstanding, voters validated central conservative tenets:

  • Exit polls demonstrate that by a 51%-43% margin, Americans believe that today’s government already does too much that more properly belongs to the private sector.
  • By a 63%-33% spread, Americans said not to raise taxes as a means of cutting the Federal budget deficit.
  • Concerning the economy, the national debt, and the budget deficit generally, the voters preferred the Republican over the Democrat.
  • Voters also reelected an overwhelmingly conservative and Republican House, thereby explicitly and materially validating the House’s expression of those conservative tenets over the last two years.

There’s more.

In California, Democrats won voter approval to raise the top income tax rate to 13.3%.  More importantly, they also won a legislative supermajority.  California has in its state constitution an amendment requiring a two-thirds majority of both houses of the state’s government in order to raise taxes.  The Democrats have won that two-thirds majority in both houses.

Now we’ll have an object lesson, fresh in our minds at the time of the 2016 elections, about the outcome of Progressive policies implemented wholesale.  California will be that demonstration.  Watch carefully.

Welcome to Obamacare

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Here are some handy facts that my insurance company sent me the other day.

  1. Limit on flexible spending account (FSA) contributions.  Today, employers set their own caps on how much employees can contribute to these plans that let them use pretax money to pay for health care expenses.  For 2013, the government will enforce a $2,500 limit per employee.  [Because government Knows Better than you or your employer.]
  2. A new Medicare surtax on investment income.  Until now, Medicare taxes have only applied to earned income. For 2013, taxpayers filing individually with wages and self-employment income above $200,000 ($250,000 for married couples filing jointly) will pay a 3.8% surtax on the lower of:
    • Their net investment income—which includes interest, dividends, capital gains and other amounts.
    • The amount of their modified adjusted gross income that is greater than $200,000 ($250,000 for married couples filing jointly)
  3. An additional Medicare tax on wages and self-employment income for some.  The existing Medicare payroll tax of 2.9% (of which 1.45% is paid by a taxpayer through payroll deductions) will be increased by 0.9% on wages or self-employment income that exceeds $200,000 for single and qualifying head of household and widow(er) filers ($250,000 for married couples filing jointly).
  4. Higher hurdle for deducting medical expenses.  Currently, out-of-pocket medical costs only are deductible to the extent they exceed 7.5% of your adjusted gross income.  For 2013, that hurdle will rise to 10%. But if you’re 65 or older, that threshold remains frozen at 7.5% through 2016.  [Then it rises—with 2013’s 65-year-old then 68.]

And what do we get for our money?

  • Reduced access to medical care for seniors from reduced payments to doctors and hospitals by Medicare.
  • Reduced access to medical care for the rest of us from a shrinking doctor population.
  • Elevated health insurance premiums to pay for the tens of millions of Americans now covered by fiat.
  • Elevated health insurance premiums to pay for those who still don’t buy insurance until they’re already at the ER.
  • Elevated health insurance premiums to pay for pre-existing conditions which companies are required to cover at “no additional cost.”
  • Elevated insurance premiums to pay for coverage for grown adults on their parents’ policies until these adults are 26.
  • An insurance board that will tell your doctor and hospital what illnesses, injuries, and procedures for which they will reimbursed for treating you.

It’s a brave new world.