The Delusion of a Win-Win Trade War

It is no surprise that President Trump’s trade war has many supporters. An understanding of the law of comparative advantage has never been a prominent feature of people’s knowledge in the USA or anywhere else. And special interests have honed their propaganda over centuries of angling for the use of government power to protect them from foreign competition, maneuvering to pick the pockets of consumers in their own country.

But even as Trump spouts venerable fallacies to justify and seek support for his destructive trade policies and related ad hoc actions, he and his supporters have sometimes offered a strange defense of their tactics: they purport to be seeking, at the end of the game, universal free trade, a world in which all countries have abandoned tariffs, quotas, subsidies, and other government intrusions in international exchange. In Wilsonian terms, they claim to be waging the trade war to end all trade wars. The idea is that by raising U.S. tariffs, they will induce other governments to lower and ultimately eliminate their own.

Why Dozy DMV Is Dangerous

According to Investigations of Improper Activities by State Agencies and Employees, a new report from California’s state auditor, “A key data operator at the Department of Motor Vehicles failed to perform her essential duties over a period of nearly four years because she slept at her desk for extended periods of time during work hours. From February 2014 through December 2017, the employee misused more than 2,200 hours of work time as a result of sleeping on the job, costing the State more than $40,000.” The unnamed employee still works at the DMV, national news coverage noted, but that left some back stories uncovered.

DMV workers are represented by the powerful Service Employees International Union, which parades outside the state capitol chanting “This is our house!” Whatever misconduct DMV employees indulge, the SEIU will stick up for them. Taxpayers should not be surprised that the DMV sleeper kept her job, but nobody should think that incompetence is the only problem. 

Proposition 47 a Smashing Success for Criminals

“‘Very, very unusual’: 50 car break-ins in 24 hours near Galleria mall and across Roseville,” reads the July 20 headline in the Sacramento Bee. Police received several calls but “instead of two or three burglarized cars, officers found 30.” These were hit at the Galleria Mall and Hyatt hotel and 20 others occurred around the city. Thieves took everything from spare change to luggage to computers and police found it all “very, very unusual.” Actually, it isn’t, ever since Proposition 47, the 2014 ballot measure that treats property theft of nearly $1,000 as a misdemeanor.

As NBC News reports, car break-ins in San Francisco alone rose from 22,029 in 2014 to 26,040 in 2015, then to 24,624 in 2016 and a full 28,984 in 2017. Of those nearly 30,000 break-ins, police made arrests in just 1.7 percent of cases and most of those taken into custody were never sentenced to jail time. So reductions in prison populations come at the expense of increased crime, as critics of Proposition 47 predicted. As San Francisco police Lt. Mike Nevin told NBC, “They find the reward greater than the risk” and now break into more than 80 cars every day.

Will Janus Decision Mean Payback Time for Workers?

The recent Supreme Court decision in Janus v. AFSCME means that government employee unions can no longer confiscate money from non-members and use it to fund causes those workers do not support. A current court proceeding gives some sense of how much money the government unions have been grabbing. 

The National Right to Work Foundation is demanding that the Service Employees International Union (SEIU) Local 1000 in California return approximately $100 million to about 40,000 current and former state workers who paid more than necessary because of the SEIU’s difficult “opt-out” procedures. During a similar lawsuit in 2013, SEIU members were paying up to $90 a month in dues, and state law required nonmembers to pay 65 to 70 percent of full dues. That translates into tens of millions of dollars for a government employee union that parades outside the state capitol chanting “This is Our House!” So by the admission of SEIU bosses, they used the money they took from nonmembers to buy politicians. Now those workers want it back, to spend as they see fit, but the old-line establishment media don’t see it that way.

The Fiscal Impact of President Trump’s Tax Cuts

When the U.S. Congress passed tax cuts in December 2017, there were two main schools of thought about their impact on the U.S. government’s fiscal situation:

  1. The tax cuts would stimulate faster economic growth such that the tax cuts would pay for themselves.
  2. The tax cuts would “explode” the U.S. government’s budget deficit.

These are two diametrically opposing arguments that have been voiced by some of the most partisan politicians and media organizations in Washington D.C. As you might imagine, in the real world beyond the Beltway, in the first six months after the Tax Cuts and Jobs Act of 2017 was signed into law the true answer is falling somewhere in between.

The following chart shows how much revenue that the U.S. government has collected in each month of its fiscal years from 2015 through the first nine months of its 2018 fiscal year. Since the federal government’s fiscal year begins on October 1 of the preceding calendar year, the months shown in the chart run from October through September to coincide with that odd timing.

The Equalizer 2 Is More Than Just Another Vigilante Movie

I almost skipped the second installment of The Equalizer movie franchise, but, fortunately, Denzel Washington’s strong performance as vigilante Robert McCall in the first movie was a draw. Fortunately, The Equalizer 2 turned out to be as good, perhaps better, than the first one. Along the way, audiences will gain a much greater appreciation for the life of taxi drivers.

As a character, Robert McCall is an example of what thriller novelist Gregg Hurwitz might call “positive masculinity”–a man who is fundamentally good, courageous, and takes risks to achieve their objectives. I would add they also accept and embrace the consequences of their actions. The result is a complex and strong character that elevates The Equalizer 2 to be much more than just another vigilante movie.

Rearmed Pillage People Ride Again

Back in 1990, Gilbert Hyatt invented the first single-chip microprocessor, which earned him a lot of money, so he moved to Nevada, which has no state income tax. California’s Franchise Tax Board (FTB) claimed Hyatt lied about his residency, and that he owed millions in state income taxes. Despite a 2008 ruling in his favor by a Nevada court, FTB snoops kept after the inventor. By the time his case arrived at California’s Board of Equalization last August, the FTB was claiming that interest had run up Hyatt’s tab to $55 million. Trouble was, a 3-2 vote by California’s Board of Equalization determined that Gilbert Hyatt was indeed a Nevada resident when state tax collectors said he lied about his residency. So the BOE waived $5.7 million in fraud penalties and $5.7 million in taxes from 1992, That left Gilbert Hyatt with a 1991 tax bill of $1.9 million, including interest, a far cry from $55 million. California’s pillage people didn’t like it and are now deploying in new uniforms. 

Feds Spend $3M to Find Out Why Clubbers Get Drunk and Aggressive

Perhaps unaware of centuries of evidence that suggests some kind of connection between excessive alcohol consumption and aggressive behavior on the part of revelers, including its own, the U.S. government launched a series of studies to learn more in 2014. Since then, the cumulative tab for the ongoing studies into the behavior of alcohol-consuming nightclub customers has cost U.S. taxpayers nearly $3 million.

Stockton, Chicago Money Giveaways a Guaranteed Bust 

Back in 2012, Stockton, California, was one of the first cities to declare bankruptcy, and the cause of the collapse was clear. The city gave “free” health care to retirees, which left it with an unfunded liability of $417 million. Stockton also allowed police officers to retire at age 50 with pensions based on 3 percent of final pay for each year in service. City workers in government employee unions could retire at 55 with 2 percent of final pay multiplied by years of service. This spending spree was an easy sell but drove the city into bankruptcy. So it makes sense that Stockton is the first city in the country to launch Universal Basic Income (UBI). 

Two-way Trade in the “Same” Commodity

Sunday, when my grocery guy Lucio came to my gate, his truck contained, along with the usual variety of produce and other foodstuffs, a box of beautiful strawberries, which I snatched up along with my other purchases. As often in the past, these berries came from Driscoll’s in Watsonville, California, where—interestingly enough—they were almost certainly harvested by Mexican and Central American workers.