by | BLOG, BUSINESS, COVID, ECONOMY, GOVERNMENT
Charles Passy’s article in the WSJ was a veiled plea to save the culinary scene of New York City. With two specific outrageous proposals, Passy’s economic bias here is unbearable.
First, he describes how “bar and restaurant owners throughout the city say such claims are being denied at the present time because of policy exclusions, despite the businesses having paid thousands of dollars for their property and casualty insurance over the years.” As a result, Passy argues that insurance companies should be forced to cover things they never intended to cover (nor could it ever have been an insurable event).
Second, Passy endorses a “measure to prevent landlords of commercial properties from enforcing provisions that hold tenants, such as bar and restaurant owners, personally liable for rent should they be unable to pay because of the pandemic.” In other words, Passy wants to allow tenants to not be personally responsible for paying rents though they specifically agreed to it.
New York doesn’t have the right to pass such laws, giving money out and interfering in contractual relationships in which they are not a party. Not only is it illegal and immoral, but unconscionable. It is astounding that the WSJ would allow such an outrageous article.
by | ARTICLES, BLOG, HYPOCRISY
The New York Times continued its ludicrous partisan writing in its coverage of the Flynn affair, calling his position a “reckless gamble.” At the same time, note that the reason why Flynn was recently exonerated is not even mentioned! Of course, it was clear that there was no basis to start the questioning in the first place, which as a matter of law makes the “lie” irrelevant. Also, since at the time the prosecuting parties had all testified that there was no Flynn or Trump wrongdoing about Russia (the underlying crime being investigated), the “lie” could not possibly have been “material” – a factor necessary for the “lie” to have been a crime.
This was an intentional attempt to 1) create a lie, 2) threaten Flynn’s family to force him to admit to a crime, and 3), and have everyone from Schiff, Obama, etc. lie about it to the public to gain political advantage. For the NYT to completely omit any mention of the FBI’s ambush interview and its lack of protocol handling the Flynn case is journalistic malpractice.
by | BLOG, COVID, ECONOMY, GOVERNMENT
One of the burgeoning problems of opening the country back up is that many employers are struggling to properly restaff their businesses. It appears that many employees are refusing to go back to work because they prefer unemployment benefits. But workers are only entitled to these benefits if they cannot find work. They should legally lose the unemployment benefits if they refuse going back to work. Yet reporters covering this emerging situation seem ignorant of the concept.
I have been reading on far too many newspapers and websites regarding the inability of businesses (particularly restaurants) from all over the country unable to induce their employees to come back to work. The primary driver of this is the $600/week federal supplement to State unemployment insurance (“UI”) payments. This results, in many situations, in the employee being financially better off by being on unemployment than by working.
But this makes no sense. An employee is OBLIGATED to represent that he has no employment opportunity in order to get UI in the first place. Even asking his employer to not take him back is unethical, if not illegal. It is likewise unethical, if not illegal, for an employer to agree to such a request.
What were these writers thinking when they wrote these articles?
by | BLOG, ELECTIONS, POLITICS
For years I have been following the candidates that have been supported by the Club for Growth, contributing to both their campaigns and to the Club. Although overall they do a decent job finding and supporting candidates , there are two areas in which they are weak.
The Club For Growth has always been an advocate of the free market, limited government, and low taxes — the same thing that the Tea Party originally intended to be. However, within this realm, there are four things that the Club For Growth does not focus on, but they need to. These are: immigration, tariffs, the Jones Act, and ethanol. So you can have a good libertarian, free market candidate, but if that person turns out to also have unfavorable stances in one or more of those areas, they weaken their position. The Club For Growth needs to expand their vetting to include these four areas in their overall approach.
Additionally, the Club For Growth needs to continue to monitor those who have taken office. While it is understandable that with somewhat limited resources, they want to use most of those resources to find new candidates, it does no one any good if the people they have recommended end up going off the rails. There has to be some sort of follow up. For instance, Marco Rubio, Tom Cotton, and Josh Hawley are all examples of people elected in no small part by the Club, but for which we now have serious buyers remorse. These three have taken inexcusable positions on tariffs, free markets, big government, etc.
It is disappointing and unacceptable to see Club For Growth focus only on getting new people elected while neglecting to hold these and other candidates accountable for their changed positions. It would be wise for the Club For Growth to practice better vetting and consistent follow up if they want to maintain being a trusted voice in the political landscape.
by | BLOG, BUSINESS, COVID, ECONOMY, FREEDOM, GOVERNMENT
The WSJ had a thoughtful opinion piece a couple of days ago. The author wanted to “quantify how many deaths were caused by delayed shutdown orders on a state-by-state basis”as a means to examine the efficacy of quick shutdown. Below are some key takeaways, and you can read the piece in full here.
“To normalize for an unambiguous comparison of deaths between states at the midpoint of an epidemic, we counted deaths per million population for a fixed 21-day period, measured from when the death rate first hit 1 per million—e.g.,‒three deaths in Iowa or 19 in New York state. A state’s “days to shutdown” was the time after a state crossed the 1 per million threshold until it ordered businesses shut down.
We ran a simple one-variable correlation of deaths per million and days to shutdown, which ranged from minus-10 days (some states shut down before any sign of Covid-19) to 35 days for South Dakota, one of seven states with limited or no shutdown. The correlation coefficient was 5.5%—so low that the engineers I used to employ would have summarized it as “no correlation” and moved on to find the real cause of the problem. (The trendline sloped downward—states that delayed more tended to have lower death rates—but that’s also a meaningless result due to the low correlation coefficient.)
No conclusions can be drawn about the states that sheltered quickly, because their death rates ran the full gamut, from 20 per million in Oregon to 360 in New York. This wide variation means that other variables—like population density or subway use—were more important. Our correlation coefficient for per-capita death rates vs. the population density was 44%. That suggests New York City might have benefited from its shutdown—but blindly copying New York’s policies in places with low Covid-19 death rates, such as my native Wisconsin, doesn’t make sense.”
The author then went on to examine Sweden’s policies (less restrictive than ours) and integrated those into his analysis:
“How did the Swedes do? They suffered 80 deaths per million 21 days after crossing the 1 per million threshold level. With 10 million people, Sweden’s death rate‒without a shutdown and massive unemployment‒is lower than that of the seven hardest-hit U.S. states—Massachusetts, Rhode Island, Louisiana, Connecticut, Michigan, New Jersey and New York—all of which, except Louisiana, shut down in three days or less.
We should cheer for Sweden to succeed, not ghoulishly bash them. They may prove that many aspects of the U.S. shutdown were mistakes—ineffective but economically devastating—and point the way to correcting them.”
Only time will tell what methodologies worked and what didn’t, but this is an important conversation to have, especially since the economy continues to worsen.
by | BLOG, BUSINESS, COVID, ECONOMY, GOVERNMENT
It might not be so crazy after all for relatively young people who are going broke and having their lives torn out from under them to try to get back to normal in as careful a way as possible: going to gyms, salons, and other businesses. Might it be reasonable for some people to try it out to see if it can help with the infection rate? Can we trust people to be careful?
Some businesses such as FedEx, supermarkets, and medical practices are open and more are starting to or trying to open up, and yet they are not getting a lot of business because people are afraid, or told they need to be afraid. But why not open up and if people are willing to take the risk and practice social distancing and mask-wearing, we should let them.
The economy is horrific the way it is, and it just cannot remain like this. Many people’s lives are now devastated. For many, we have probably passed the point where the cure is worse than the disease.
We know by now that the virus does pose a risk of death, but we also know that in the vast majority of situations, the virus is more mild than it is lethal – especially for certain cohorts. People are well-educated enough to be able to make an informed decision as to what level of socializing they want to engage in for themselves. We should let them make that choice and start to get back to the business of doing business.
by | BLOG, COVID, ECONOMY, FREEDOM
One of the most important takeaways from this COVID affair is the clear evidence of how critically important free markets are. While the free market is developing workarounds for providing necessities and developing relevant new products, the government can’t get out of its own way in terms of what it is trying to do and is finding that an overabundance of regulations has hampered its responsiveness.
There have finally been some recent changes, such as allowing telemedicine across state lines, modifications of certificates of need, and loosening of licensing requirements; perhaps the CDC, FDA, and other agencies will realize they don’t need as much regulation in the first place and such barriers actually inhibit health and economic well-being. Temporary, but more importantly, permanent reductions in regulations would be a step in the right direction. Because what is missing right now is the robustness of the private sector – but we can see its potential.
We are witnessing the incredible ingenuity of the American people as they are finding new ways to respond to this crisis. People are out there trying to figure out how to meet toilet paper demands, create new testing mechanisms, make and provide medical equipment, ventilators, masks, and vaccines. Nearly all of this is being done without the government. It’s the 325 million people out there trying to figure out what they can do to make things better and providing for a new and different need. Services are being changed to provide a product without prolonged human interaction. Door-to-door deliveries are being established. Companies are learning how to find their own ways to adapt.
All of this, it must be noted, has virtually nothing to do with the government. Whether it’s Amazon, pharmacies, FedEx, or restaurants, people know their own industries. They’re changing for their customers and for their company. This is, quite simply, real people knowing best what they need to do instead of some faceless government bureaucrat or rule telling them what to do because someone thinks he knows better about industry operations than the movers and shakers do.
The COVID crisis is a great opportunity for growth and deregulation. This will be the strength of our economic recovery. This is the free market at its best.
by | BIDEN, BLOG, BUSINESS, ECONOMY, ELECTIONS, TRUMP
Democrat Presidential Candidate Joe Biden not only wants to return capital gains to Obama-era rates, but furthermore he would increase them while simultaneously returning the top rate on ordinary income. Biden has said, “I believe we should, in fact, the capital gains tax should be at what the highest minimum tax should be; we should raise the tax back to 39.6 percent instead of 20 percent.”
Add to that the 3.8% Obamacare tax (NIIT) instituted in 2013, and he would have some taxpayers effectively paying a 43.4% long-term capital gains tax! The current total top rate is 23.8%
Biden should know better. The actual impact of raising the capital gains rate by the Obama administration was devastating to the economy. By discouraging the sale of assets, there was reduced capital available for new projects and opportunities, reducing job creation and wages, and resulting in lower revenue collection. Furthermore, the expected after tax rate of return on new projects went down, assuring that fewer of them went forward.
Additionally, there were a number of localities, like the state of California and New York City, which have tax rates of 12% or more and also a large concentration of wealthy people and high performing businesses. Obama’s capital gains rates of more than 37% brought elective capital projects to a crawl. And Biden wants to raise them even higher?
Shame on Biden. Why sell an asset to fund further investment and opportunity when the government takes a large share of the gain with the loss remaining all yours? It makes virtually no economic sense to do so. A higher capital gains rate put a stranglehold on risk-taking and available capital, and would negatively impact the economy.
