Socialism Is Economic Foolishness

David French is off The Donald beat and writing about Bernie Sanders and school choice at NRO.  It makes David sound much better.  He seems almost surprised that Act Naturally would favor public schools.  It is not a misguided attack by the candidate.  Act Naturally is a socialist and he supports lack of choice for deodorants, schools, and everything else.  He, Bernie, always thinks he knows better than the consumer.  David has an almost beautiful conclusion:

Sanders makes his intentions crystal clear. In his plan, he writes, “We do not need two schools systems; we need to invest in our public schools system.” This is exactly wrong. One size does not fit all. Sanders looks at parents and declares that he knows best. Parents should look back at him and respond, quite simply: I know my child, and I want to shape his destiny. Your collective solutions cannot meet my family’s [educational] needs.

It is almost beautiful because it needs one more sentence after we have inserted education above.  The sentence might go like this: Your collective solutions cannot meet my or my family’s needs in any area.

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Economic Foolishness Sweepstakes

The economic foolishness sweepstakes is on.  The Donald has planted his flag by raising taxes (tariffs) on Americans to punish China and other countries.  He also failed to allow exceptions to the Jones Act for LNG.

Speaking of natural gas, Andrew Cuomo has stopped a natural gas pipeline so New Yorkers can’t get natural gas by sea (because of the Jones Act) or land.  The WSJ reminds us that it is part of a pattern for Andrew:

He has also banned drilling for natural gas in the rich Utica and Marcellus Shale that lie under the state, and he has blocked another natural gas pipeline upstate. Due to pipeline constraints, the utility Con Edison in March suspended natural-gas hookups in Westchester County north of New York City.

Kamala Harris want to fine companies that don’t achieve [“]pay equality[“].  We can’t have that term without quotes.  Really, we are not making this up.  CNN says:

In an interview with CNN on Sunday, shortly before Harris headlined a town hall in Los Angeles, the California Democrat called pay equity a “really big issue” where “if you lift up the economic status of women, you lift up the economic status of families and communities and all of society benefits.”

We need to give you a long quote to show you what she is saying:

“This will radically change the way we enforce equal pay in America,” reads the plan. “Our current equal pay laws rely exclusively on proving instances of individual discrimination and place the burden entirely on employees to hold big corporations accountable. … Under our plan, for the first time in American history, companies will be held responsible for demonstrating they are not engaging in pay discrimination.”
Under the plan, companies with 100 or more employees will be required to obtain a certification from the Equal Employment Opportunity Commission within three years of the plan’s passage by handing over employment data to the government. Companies with more than 500 employees will have two years to receive the certification. And each company will be required to display whether they met the certification on their company’s website.
Those companies that do not receive the certification will be met with a stiff penalty: For every 1% gap in pay between men and women that persists after the EEOC accounts for experience and job titles, a Harris administration would fine companies 1% of their daily profits during that fiscal year. [Emphasis added]

With Kamala companies will be guilty until they can prove themselves innocent.

Meanwhile the Morning Jolt tells us that  Pete has called for four tax increases:

A “fairer, which means higher” marginal income tax, a “reasonable” wealth tax “or something like that,” a financial transactions tax, and closing “corporate tax loopholes.”

We have no idea why higher taxes are fairer.  It would have been a good question as would have been why would any wealth tax be reasonable.  We would also like to know what he thinks a loophole is.  If fairer is higher then we would expect him to find many loopholes.

Sidebar: We have not used the word crazy to describe any of these proposals.  We thinks this speaks well for our restraint.  End Sidebar.

We are not sure who will win the economic foolishness sweepstakes.  We are only sure that America will lose.

Be Fast To Beat A Stroke

The stroke folks have a new acronym: Be Fast.  To celebrate it one of the local hospitals had a run walk to raise money for stroke awareness.  As the Lady de Gloves is a stoke survivor we were sure to go.  She got a spiffy red shirt while MWG was stuck with a bland grey one.

Interestingly, there seems to be a minor dispute over the meaning of the last letter.  At our walk, T stood for Terrible headache while the site above has a different T, time:

Balance – Is there a sudden loss of balance or coordination?

Eyes – Is there sudden blurred or double vision or sudden, persistent vision trouble?

Face – Ask the person to smile. Is one or both sides of the face drooping?

Arms – Ask the person to raise both arms. Does one side drift downward? Is there weakness or numbness on one side?

Speech – Does the person have slurred or garbled speech? Can he/she repeat simple phrases?

Time – Call 911 for immediate medical attention if you notice one or more of these signs. Also, take note of when symptoms began.

We like Terrible headache because Be Fast seems to make the time message clear.  Either way, if you are concerned about the possibility of a stroke time is of the essence.  The main reasons is tPA:

We treat ischemic stroke with a clot-busting drug called tissue plasminogen activator (tPA). The drug dissolves the clot [you might think of it as extra strength blood thinner], and blood flow to the affected part of the brain improves. If tPA is given within three hours of an ischemic stroke, the patient has a much better chance of a full recovery. Unfortunately, too many stroke victims don’t make it to the hospital in time for tPA treatment. [Emphasis added].

The Lady de Gloves was one of those folks from paralyzed on one side to a full recovery with tPA in about an hour.  It can be a miracle drug but the time window is small so Be Fast.

A Ray Of Sunshine

We are depressed with The Donald raising taxes (tariffs – Hokey smokes, Pete is right) on Americans to show the Chinese.  We are with the editors at NRO:

Trump responded to the setback in talks by raising tariffs, and China reciprocated. The escalation of the trade war poses increasing risk to our economy, as stocks have been signaling. The best course for the U.S. now would be to reach a swift resolution in the current talks — getting back to the deal that seemed to be on the table before China miscalculated — and then switch to a strategy for changing Chinese behavior that does not depend so thoroughly on possibly backfiring tariffs.

Meanwhile, here was a ray of sunshine from Mark Perry at Carpe Diem:

RelatedCNBC reported today that “Walmart’s U.S. store managers earn an average of $175,000 per year and receive benefits including parental leave, health benefits and 401(k) contributions. That’s higher than the average salary of some of the country’s best paying jobs, including dentists, who make an average $174,110 a year, according to U.S. News & World Report, and lawyers, who make an average of $141,890.”

Who-d a-Thunk It? Walmart managers make more than dentists and lawyers on average? And I’d bet [we were sure before the update] many of them started as hourly associates and worked their way up to store manager…. but, but, but I always heard those retail jobs at Walmart were dead end jobs….??

Update: According to Walmart “75% of its Walmart U.S. store operations management team members started as hourly employees.”

It is the natural financial life cycle of humans in our age of abundance.  Folks build skills while working low paid (and often menial) jobs and fighting financial challenges while they are young.  They use these skills to manage their finances and build a career.  There are lots of individual exceptions.  Some folks like Bill Gates go for it and make it big early.  Other folks go for it and fail.  Check out the restaurant turnover in your hometown.  Some folks fail to build skills because of chemical dependency or other issues. Still it is what most people do and a good plan for most folks.

This is why increasing the minimum wage is such an insidious idea.  It doesn’t just throw people out of work but it can ruin their lives.  The ray of sunshine from Mark reminds how well the natural financial cycle does work.

 

A Little Disagreement With Deirdre

Deirdre Nansen McCloskey was one of our favorite people even before she became who she is now.  MWG was a grad student with a few toes in economics but more in accounting and The Rhetoric Of Economics really helped us understand the differences between the two disciplines.  Her insight into the significance of what she calls The Great Enrichment (Jonah Goldberg calls “The Miracle,”  we like Deirdre’s name) are priceless.  Deirdre is at work on NRO debunking the myth that Sweden is a socialist country.  Ian Burell is over at The Herd talking about the economics of soccer in How Football Raised Its Game.  It is a bit confusing because he calls soccer football and he is specific that he is discussing English soccer.

Sidebar: The English part of English soccer is not exactly right either.  England, Scotland, Wales, and Northern Ireland all have their own separate national teams but England and Wales are join together in professional soccer so Welch teams can play in the Premiership league.  Cardiff City did this year but was relegated.  End Sidebar

Deirdre takes those to task who use Sweden as an example of socialism starting right with her NRO title, Sweden Is Capitalist.  You must read it all but here is a taste of it:

If “socialism” means government ownership of the means of production, which is the classic definition, Sweden never qualified. When little Sweden’s economists were second in academic standing only to big Britain’s, in the early 20th century, they were “liberal” in the European sense: free-traders opposed to central planning and governmental ownership. None of Sweden’s manufacturing or extractive industries has ever been socialized, this in contrast, for example, to the experiment after 1946 in the world’s first innovative economy [that’s Britain], when the Labour party’s Clause IV nationalized the Bank of England, coal, inland transport, gas, steel, health services, and much else. Sweden never followed even the more modest example of America’s temporary nationalization of railways during the First World War. Sweden’s Systembolaget, the state liquor store, was sold off in 2008, as it has not yet been in all the U.S. Apoteket, the maddeningly inefficient Swedish-government drug-store monopoly, was privatized, too, praise the Lord.

We know Deirdre is right but we have a soft spot in our heart for the state liquor stores in New Hampshire.  Well, one in particular.  New Hampshire has made a few miles of I-89 a toll road so there is the New Hampshire State Liquor Store and Safety Rest Stop right on the highway.  It is a great way to speed you on your vacation.

Our disagreement with Deirdre comes from the last two words of this:

Like the Land of 10,000 Lakes [that’s Minnesota], Sweden is a place of private ownership and thrusting [that’s what it says] inventors, Swedish bachelor farmers and pretty generous social provision, pretty good schools (with vouchers) and terrible weather. [Emphasis added]

We would agree that Minnesota can get a little hot in the summer but Sweden sounds like a lovely place.  The southern part is close to perfect for us:

In Götaland, where you’ll find the cities Gothenburg and Malmö, winters are shorter and milder, while daytime summer temperatures normally range from 15 to 25 degrees Celsius.

Malmo is almost 56 degrees north (a little south of Juneau, Alaska) so the sun isn’t too intense.  It is as close to perfect as weather gets for us.

Ian is trying to generalize from soccer to all labor markets

Clearly there are costs to progress. Yet ultimately we should give thanks to the power of globalisation in transforming our national game, which has been revived by the free movement of labour and capital – and bear in mind the wider lessons for other parts of the economy as we cheer on these teams.

Another comparison of European countries and the US is that the teams in European soccer leagues have much more economic freedom than American teams.  European teams do not have restrictions like salary caps so the rich teams almost always win.  They also play in multiple competitions.  There are exceptions as Ajax almost broke through in the Champion’s League this year and Leicester City won the Premiership in 2015-16 but such events are rare.  More common is that Bayern Munich has won the Bundesliga the last six years and is poised to make it seven next week.  The poor teams are often fighting relegation.  Relegation means that the better teams from the lower leagues are promoted consistent with economic freedom.

Top soccer players and coaches, as Ian explains, are extraordinarily talented.  The players are also extraordinarily expensive costing teams (called transfer fees) as much as €222 million to buy their contract.  Ian’s argument supports restricted immigration for talented individuals rather than open borders.  That’s the wider lesson.

We have four lessons about Sweden and soccer.  First, capitalism makes countries and the individuals in them rich.  The same capitalism makes soccer great and soccer players rich.  Second, Sweden is both rich and capitalistic.  Both Deirdre and Heritage agree that Sweden and the US have about the same degree of economic freedom.  They both agree that there are differences but some are in one direction and some in the other.  Thirdly, the impact of importing extraordinarily talented soccer players might tell us to bring in similar folks in other lines of work but it does not suggest that we have open borders.   Lastly, weather preferences are personal.  The weather preferences for Deirdre and MWG don’t seem to match.

 

Bigger Fool Theory

Paul Mirengoff over at Powerline is discussing the dance of The Donald and the Chinese over tariffs.  It appears that The Donald is going to slap a substantial tariff on Chinese goods coming into the US.  We are not convinced by Paul’s arguments but read it all and see what you think.  We are most concerned when Paul says:

China is notorious for its bad faith in international relations, so we shouldn’t be surprised that it apparently has reneged on commitments made during negotiations. The proper response is to do exactly what Trump plans to do — inflict more pain on China. [Emphasis added.]

We are OK with the first two sentences but not the third.  As we have said, we don’t like being The Donald’s human shields.  Paul is wrong because The Donald is not inflicting pain on China.  He is inflicting pain on us by raising the prices we pay.

Now it is possible that there are rational rationales for The Donald’s behavior.  First, it might play well in his upcoming election.  Second, it might be a good negotiating strategy for both this round of talks and upcoming issues with the Chinese.  There are sure to be some of those.  Third, it will provide a little revenue to finance the government.  The first is surely a version of the bigger fool theory.  The third is a variant of it.  The Donald implements a regressive tax (tariffs) and the folks taxed love it.  We hope the second is the reason but we are not convinced.

Shoot The ******

We need Mel Brooks.  He would have the Donald and Xi each holding himself at gunpoint and, like Cleavon Little in Blazing Saddles, threatening to shoot themselves and using some racist name to make it even more silly.  Kevin D. Williamson is on it at NRO and Mark Perry is all over it at Carpe Diem but we really need Mel because this situation needs humor rather than logic.

It is too silly.  The Chinese harm their folks by raising taxes and raising prices for their citizens.  The Donald says he will harm Americans [we don’t really understand why] perhaps to get even with the Chinese for harming their people.

Sidebar: One almost rational rationale is that The Donald is using bluster to negotiate.  The problem is: what is he negotiating?  He is trying to get the Chinese to lower their taxes and help out the Chinese.  That is nice but we don’t like being a human shield.  End Sidebar.

The Marx Brothers were good on this topic but Mel would be great. Unfortunately if The Donald raises our taxes (tariffs) then as Mel has Slim Pickens say, “We’re gonna need a sh*tload of dimes.”