Sunday, December 04, 2016

Credit to Sarah Palin; She's Against Crony Capitalism Again

After making no criticisms during the last year about Trump plans to punish Carrier for moving its jobs to Mexico, Sarah Palin has finally discovered that government interference with Carrier policies via threats or bribes might be crony capitalism.
Foundational to our exceptional nation’s sacred private property rights, a business must have freedom to locate where it wishes. In a free market, if a business makes a mistake (including a marketing mistake that perhaps Carrier executives made), threatening to move elsewhere claiming efficiency’s sake, then the market’s invisible hand punishes. Thankfully, that same hand rewards, based on good business decisions.
But this time-tested truth assumes we’re operating on a level playing field.
When government steps in arbitrarily with individual subsidies, favoring one business over others, it sets inconsistent, unfair, illogical precedent. Meanwhile, the invisible hand that best orchestrates a free people’s free enterprise system gets amputated. Then, special interests creep in and manipulate markets. Republicans oppose this, remember? Instead, we support competition on a level playing field, remember? Because we know special interest crony capitalism is one big fail. (emphasis added)
Palin calls such government interference "corruption" and "socialism". And says government interference in homes, schools, churches and businesses "is never the solution. Never."
However well meaning, burdensome federal government imposition is never the solution. Never. Not in our homes, not in our schools, not in churches, not in businesses.
Gotta’ have faith the Trump team knows all this. And I’ll be the first to acknowledge concerns over a deal cut by leveraging taxpayer interests to make a manufacturer stay put are unfounded – once terms are made public.
Though Palin has faith that the details of the deal will show that Carrier wasn't offered tax rewards not available to other businesses, it's obvious her faith in Trump and his team has been misplaced all this time. Let's hope she finds her way back to conservative and freedom loving principles.

Not Good for Anyone: Businesses Making Decisions to Please Politicians

But more broadly, this [Trump/Carrier type deals] is all terrible for a nation's economic vitality if businesses make decisions to please politicians rather than customers and shareholders. Yet America's private sector has just been sent a strong signal that playing ball with Trump might be part of what it now means to run an American company. Imagine business after business, year after year, making decisions based partly on pleasing the Trump White House. In addition, Trump's hectoring on trade and offshoring distracts from the economic reality that automation poses the critical challenge for the American workforce going forward.
The real political divide in the country is between those who look to the past and state power keeping basic features of the past intact for the good life and those who look to new forms and change in the future for the good life.
In her 1998 book, The Future and Its Enemies, Virginia Postrel saw the major dividing line in American politics as less left vs. right than the "dynamists" vs. the "stasists." The former values change and experimentation, as messy as those things can be. Dynamists live in anticipation of the future because they just know it will be a great place. The stasists often are nostalgia-ridden and willing to use top-down control to keep things as they are or try to shape them into familiar forms. Today they fight globalization, tomorrow it might be robots and artificial intelligence in order to "save jobs."

Wednesday, November 30, 2016

Draining the Swamp? Trump Swelling It with Carrier

Carrier gets a sweet deal from President-elect Trump and VP-elect Pence to keep jobs in Indiana. 
In the end, UTC agreed to retain approximately 800 manufacturing jobs at the Indiana plant that had been slated to move to Mexico, as well as another 300 engineering and headquarters jobs. In return, the company will get roughly $700,000 a year for a period of years in state tax incentives.
But Indiana is still losing more jobs than it is gaining. It will keep 1,100 jobs and lose 1,300.
Some 1,300 jobs will still go to Mexico, which includes 600 Carrier employees, plus 700 workers from UTEC Controls in Huntington, Ind. The company has plans in place to offer displaced workers employment and relocation in UTC’s aerospace business, or to provide funding for reeducation.
Apparently Carrier isn't new to this game. They've already gotten lots of tax breaks. But, with Trump's campaign posturing, they were able to get more.
This is congruent from what we know about the sort of tax breaks Indiana and Indianapolis has already offered the firm. Back in 2011, the city gave the company a six-year property tax abatement, which allowed them to forgo paying $1.2 million in taxes, according to the Indianapolis Star. The company has also taken advantage of funds the state allocates for job retraining, and had reached a deal with Indiana to return several hundred thousand dollars for contributions it made to the company’s retraining programs as a part of the state’s Skills Enhancement Fund.
Though most small businesses would jump through hoops to get a $63,600* subsidy per employee for years, it may be small potatoes for Carrier's parent company. The real problem is the stick of a Trump administration taking away United Technology's military contract business if the company doesn't make Trump look good on this.
Furthermore, there is reason to believe that this deal isn’t just about the tax breaks. The New York Times points out that United Technologies may very well be more concerned with angering the President than it is with saving the small amount of money relative to its overall revenue that the Mexico-relocation would provide. “While Carrier will forfeit some $65 million a year in savings the move was supposed to generate, that’s a small price to pay to avoid the public relations damage from moving the jobs as well as a possible threat to United Technologies’ far-larger military contracting business,” according to the Times.
Isn't this exactly the sort of carrot/stick strategy Republicans and conservatives would have praised had it been the Obama administration "urging" energy companies to support policies combating climate change (né global warming)?

Good life in the swelling swamp.
*This is for jobs paying $20 to $25 per hour. That's $800 to $1,000 per 40 hour week; $41,600 to $52,000 per year before withholding. So, depending on fringe benefits these are likely "free" employees.
Even with that, however, once the layoffs were to begin in mid-2017, most of the workers would have had a hard time finding jobs that paid anywhere near the $20 to $25 an hour that veteran line workers earn.
Most anyone could run a profitable business with free labor. Nice!

Saturday, November 26, 2016

Ben Sasse

I not only like this man, I think he has more understanding in his little finger than the people in the highest offices have in their whole body. And when he talks, he explains so that people can understand.

Thursday, November 24, 2016

Oh give thanks to the Lord, for He is good . . . [though] we have behaved wickedly

Abraham Lincoln's proclamation, October 3, 1863
1 Praise the Lord!
Oh give thanks to the Lord, for He is good;
For His lovingkindness is everlasting.

2 Who can speak of the mighty deeds of the Lord,
Or can show forth all His praise?

3 How blessed are those who keep justice,
Who practice righteousness at all times!

4 Remember me, O Lord, in Your favor toward Your people;
Visit me with Your salvation,

5 That I may see the prosperity of Your chosen ones,
That I may rejoice in the gladness of Your nation,
That I may glory with Your inheritance.

6 We have sinned like our fathers,
We have committed iniquity, we have behaved wickedly.
. . .
44 Nevertheless He looked upon their distress
When He heard their cry;

45 And He remembered His covenant for their sake,
And relented according to the greatness of His lovingkindness.

46 He also made them objects of compassion
In the presence of all their captors.

47 Save us, O Lord our God,
And gather us from among the nations,
To give thanks to Your holy name
And glory in Your praise.

48 Blessed be the Lord, the God of Israel,
From everlasting even to everlasting.
And let all the people say, “Amen.”
Praise the Lord!

Psalm 106

Wednesday, November 23, 2016

Trump: They've used you. They've stolen your votes . . . and given you nothing.

"Politicians like Hillary Clinton have failed you, and they've failed you badly. It's all talk. It's no action. They have failed. They've used you. They've stolen your votes for decades, and they've given you nothing. I will give you everything. I will give you what you've been looking for thirty, forty, fifty years. They have given you nothing, and you need something new." (emphasis added)
Donald Trump, May 2016
Donald Trump has "moderated" some of the positions popular with his voters.

1. He's not so high on torture. Yay!
"After sparking controversy during the campaign by saying he would allow waterboarding, Mr Trump suggested he had been swayed by James Mattis, a retired general being considered for defence secretary, who told the president-elect at the weekend that he “never found it to be useful”."
2. He may keep the climate treaty after saying he was going to cancel it and stop all payments of U.S. tax dollars to U.N. global warming programs.
In an interview with the New York Times, Mr Trump said he would “keep an open mind” about whether to abandon the climate treaty.
Also, probably why Sarah Palin isn't on the short list for heading up the Department of Energy. (Or apparently on any list. Kellyanne Conway said a couple of nights ago: "I haven't seen her as part of the cabinet mix." 6:25 mark)

[Update: Apparently Palin is on the list for Secretary of the Interior.Up against Jan Brewer among others.]

3. He will not prosecute Hillary Clinton. Okay with me but not with lots of the people who voted for him and believed he would appoint a special prosecutor.
The moves were capped by Kellyanne Conway, Mr Trump’s campaign manager, saying the president-elect had decided not to prosecute Mrs Clinton over her handling of secret information, arguing the move would help her “heal” from her loss. In the interview with the New York Times, Mr Trump said: “I don’t want to hurt the Clintons.” 
4.  Trump was going to "drain the swamp" of personal enrichment in Washington, D.C., but now, meh--at least regarding his own enrichment.
Speaking to the New York Times, Mr Trump pushed back against allegations he is using the presidency to advance his business interests, saying that conflict of interest rules did not apply to the president. 
For all Trump voters who believed him, my condolences.

Friday, November 18, 2016

Problem for Trumpcare: Ban on Pre-Existing Conditions Is a Primary Cost Driver for Health Insurance Premiums

If you like your perks, you can keep your perks--but at a cost.

Philip Klein of the Washington Examiner explains in health care terms why there is no such thing as a free lunch.
President-elect Trump has made waves by saying that though he plans to repeal Obamacare, he wants to keep the aspect of it that bans coverage for those with pre-existing conditions. But this is not possible without broader changes to the healthcare system.
The pre-existing condition ban is ultimately one of the primary drivers of the premium hikes we're seeing within Obamacare. The reason is that with insurers forced to offer coverage to anybody who applies, they incur higher medical costs, and they thus require more signups from younger and healthier people — but those signups aren't materializing in a large enough volume to offset costs.
The problem with the pre-existing condition ban is that it's a perfect example of how bigger government begets bigger government. That is, once lawmakers ban pre-existing conditions, they have to come up with a way to make it affordable. Otherwise, insurers could just say, "Sure, we'll cover people with heart problems, but for $2,000 a month."
There are some proposed fixes.

1) Have a high risk pool subsidized by the government. (The old it doesn't cost money if the government pays for it trick.)

2) Allow people to sign up only once every two years instead of every year. (Why Avik Roy thinks this would make a significant difference is beyond me. Younger people don't usually think: "I can make it for a year at a time without health insurance, but two years is way too dangerous." I don't think so.)

3) Health status insurance (which is kind of the old catastrophic insurance). (This would bring more people into the insurance pool, but not a lot more money, and it's money that's lacking.)

4) Klein doesn't mention the single payer insurance plan, but some suggest that. Sort of the VA expands to cover everyone. (Given the VA's poor showing in some areas, this probably wouldn't be popular and has the same money problem as idea 1.)

Klein ends with a warning:
So, there are various ideas out there for addressing coverage for those with pre-existing conditions, but it would have to be done as part of a broader effort to replace Obamacare. Republicans couldn't simply repeal all of Obamacare and carve out the pre-existing condition provision without decimating the insurance market.