Tag: economy

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Accountability folly political economy

Inflation & the Infirm Incumbent

Joe Biden, inflation, economy

“From President Joe Biden’s point of view, Americans ought to be thrilled with the recent trends in inflation,” writes Eric Boehm at Reason, who quotes the president: “Wages keep going up and inflation keeps coming down.”

True enough, but, Mr. Boehm goes on, “pointing at the charts and regurgitating economic figures doesn’t seem to be as convincing as the president might hope.”

You’ve seen the left-​of-​center memes mocking Americans for thinking the economy is bad when it is, instead, g‑gr-​great!

But prices for food and gasoline, after the big bulge caused by all those COVID checks and subsidies, did not go back down to previous levels. And rising wages after the “Great Suppression” of the lockdowns seem at best a verypartial return to better times.

Boehm offers some context. “It makes sense that the recent run of inflation would leave a psychological scar. After all, the peak inflation rate of 9.1 percent in June 2022 was not only the highest annualized rate seen in more than four decades, it was also more than twice as high as the average inflation rate in any year since 1991.…” And inflation has not stopped. “In March, the annual inflation rate was 3.5 percent. Yes, that’s 60 percent lower than the peak rate in June 2022, but that’s still higher than the average annual rate in every single year between 1991 and 2021, except for 2008.”

And then there’s the higher interest rates, which, Boehm plausibly asserts, compounds our perceptions that “inflation is a major problem.”

This is a huge issue for Biden. Boehm cites the political lore: “If you’re explaining, you’re losing,” and notes that, “unfortunately for Biden, his task in the run-​up to November’s presidential election is explaining to people that they shouldn’t feel like inflation is still a problem.”

Who you gonna believe: Your cash register receipts or a feeble, corrupt, multi-​millionaire lifelong politician?

This is Common Sense. I’m Paul Jacob.

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free trade & free markets international affairs repeal

The Milei Option

Argentina, socialism, communism, Milei, president, economy

Argentina’s new president promised to take a chainsaw to the high taxes and controls that have been killing the country’s freedom and prosperity.

He has had successes. One of his decrees removed rent controls, and as a result the supply of rentals has jumped and rents have dropped.

But Milei cannot simply issue decrees to free up markets. He’s got to go through the legislature. And Argentina’s Senate recently rejected a mammoth Milei-​issued emergency decree to deregulate the economy apparently in one fell swoop — revising or killing some 300 regulations.

The Financial Times reports that Milei’s coalition, La Libertad Avanza, “controls less than 10 per cent of Senate seats.” Many of the “centrist” senators could have helped pass Milei’s reforms over the objections of the adamantly leftist members. But these centrists profess to have constitutional reservations about the decree.

The real problem is probably that there is still a very large constituency for the subsidies and grift that have impoverished so many Argentinians.

The decree remains in effect until the House votes on it too. Milei’s administration is negotiating with the lawmakers of that chamber and with others who may have an impact on their vote.

If President Milei loses this fight in the near term, he must keep reminding voters why he can’t do more to lift them out of poverty and serfdom. His election to the presidency was a huge political change. But it’s not the only one Argentina needs.

This is Common Sense. I’m Paul Jacob.

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Accountability deficits and debt international affairs

The Shock of Surplus

Rooting for Argentina and President Milei

The current president of Argentina is an avowed “anarcho-​capitalist.” He isn’t really — but close enough for government work.

It’s more accurate to say that Javier Milei is a capitalist and libertarian. He has taken on the job of extricating the Argentinian economy from the mire of socialism and corruption — unleashing outlawed market processes.

He seeks to do it not by pushing for micro-​changes around the edges of the margins of government spending and intrusions but by figuratively wielding the chainsaw that he literally wielded during his election campaign.

One sign of the success of his “shock therapy” cited by The New York Sun is the “first budget surplus in more than a decade.” A monthly surplus of almost $600 million is the first surplus since the summer of 2012.

But, the Sun quickly adds, Milei’s various radical proposals still face an uphill battle in the legislature. All those people who created the mire are still around.

There are hopeful signs. The lower chamber has already passed a preliminary or framework agreement to make various basic reforms. These include privatizing of currently state-​operated companies, deregulation, and revamping of criminal and environmental laws.

The lawmakers “chose to end the privileges of the caste and the corporate republic, in favor of the people,” Milei says.

Meanwhile, though, egged on by unions, thousands of Argentinians have taken to the streets in a general strike to protest the reforms. Milei can win, but it won’t be easy.

This is Common Sense. I’m Paul Jacob.

PREVIOUS COMMENTARIES ON JAVIER MILEI

Milei Defends Capitalism
January 24, 2024

Market Rents Work in Argentina
January 23, 2024

Milei’s Chainsaw
January 6, 2024

To End the Great Declension
December 13, 2023

The Outsider Who Won
November 20, 2023

The Ultimate Outsider
October 24, 2023

Two Libertarians, North and South
September 19, 2023

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deficits and debt national politics & policies political economy

The Economy Is Great-ish

Joe Biden, economy, inflation, Bidenomics

“We have the highest share of working-​age Americans in the workforce in 20 years,” Biden recently told reporters. “It’s no accident. It’s Bidenomics.”

Bidenomics being that old standby, tax-and-spend-omics.

So why do so many Americans think the economy is getting worse? Why do 84 percent say that their costs have gone up?

Well, says President Biden, the media mislead them. “You all are not the happiest people in the world [in] what you report,” is his view. “You get more legs when you’re reporting something that’s negative.”

The media do often mislead us; the negative news bias is real.

But I don’t think that our left-​leaning, in-​the-​tank-​for-​Biden media can be blamed for the impression so many of us have that it’s harder to make ends meet.

Biden isn’t the only one professing puzzlement. Breitbart Business Digest observes that a “small army of establishment media types and economists” are intent on “unraveling what they take to be the great mysteries of our time.” As described by a recent Brookings Institution paper, this mystery is the “disconnect between consumer sentiment and the state of the macroeconomy.”

As BBD points out, the Brookings researchers simply start by assuming that everybody is wrong, then try to figure out why.

“A simpler explanation would be that the economy is falling short of the public’s expectations” because of things like high inflation, higher interest rates, and greater difficulty paying for groceries, Christmas presents, vacations. And rent, and medical bills, and tuition.

Saying it’s all in our heads won’t make tough times go away.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets ideological culture national politics & policies

Can You Bank On It?

Old Glory, bank, money, savings

With major financial institutions going belly up lately, now may not seem the best time to start a new bank.

But economic conditions are always dicey. 

In any case, much depends on whether the partners in such a venture follow sensible policies or treat depositors’ funds as gambling chips to be flung about in accordance with wishes, prayers, and prejudices.

Singer John Rich, doctor and politician Ben Carson, and pundit Larry Elder are teaming up to run Old Glory Bank. They’ve got at least one thing right. They see a market for “digital-​first banking solutions” that is expressly anti-cancel-culture.

The three purchased an existing bank, First State Bank of Elmore City, Oklahoma, and are giving it a new name and modified mission.

According to Elder, Old Glory Bank, currently accepting account reservations, will be guided by principles of “liberty, privacy, security, community, family, and faith.” It’ll eschew what Rich calls “the political weaponization of the financial system.”

This sentiment contrasts with the animus animating outfits like PayPal, which cancels customers for having PayPal-​disapproved views or political goals. (A pro-​democracy group in Hong Kong is one victim of this policy.)

Some standard banks, too, have begun spurning customers involved in certain legal but politically controversial industries, like the firearms industry.

According to a press release issued late last year, Old Glory Bank “will never cancel law-​abiding customers for their beliefs or for exercising their lawful rights of free speech.”

We will hold you to that.

This is Common Sense. I’m Paul Jacob.

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too much government

Unnatural Disaster

California, gig, economy, regulations, freelancing, labor, employment,

Just get rid of it.

The “it” is AB‑5, the absurd new law attacking California freelancers. 

And those articulating the good riddance are the “151 Ph.D. Economists and Political Scientists in California” who have signed an open letter to California Governor Gavin Newsom and the state legislature.

The lawmakers who last year foisted the measure on Californians pretended that they were doing gig workers a big favor by making it impossible, in many cases, for companies to hire them for regular short-​term jobs.

After the legislation passed, many independent contractors quickly lost work — lots of work. For example, Rev, which produces transcripts and captions, said goodbye to all of its freelancers based in California. Many other companies — reluctant to be prosecuted for the crime of engaging in voluntary economic relationships between consenting adults — also ended relationships with freelancers.

Apparently, the anti-​gig lawmakers did not realize that losing one’s means of paying for food and rent is not that helpful. 

Tornadoes, hurricanes, and pandemics have a way of highlighting the importance of the economic and other institutions that make human survival and civilization possible. 

AB‑5 is like a natural disaster in its effects … but not natural.

“By prohibiting the use of independent contractor drivers, health care professionals, and workers in other critical areas,” the open letter explains, “AB‑5 is doing substantial, and avoidable, harm to the very people who now have the fewest resources and the worst alternatives available to them.” 

The solution is “suspend AB‑5.” 

It was always the solution, the obvious solution. 

But now it is even more obvious.

This is Common Sense. I’m Paul Jacob.

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California, gig, economy, regulations, freelancing, labor, employment,

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