Sleepless in Midland

Economic boom coming

When WWII ended thousands of men came home and went to work. Some started companies, some went to school, and some got good jobs.

As this coronavirus shutdown ends, we are likely to see the same thing as people go back to work.

Mark Cuban was on Charles Payne's TV show on FBN answering viewer questions. And in one response Cuban said now was the best time ever to start a company. Cuban is a very successful entrepreneur, and his advice is worth listening to.

However, government could get in the way. Currently, there are a lot of people making more money from the Cares Act than they were while working. And common sense tells them to stay off the job until the gravy train stops.

But eventually we'll have a great economy again. Buckle up and prepare for liftoff.

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1:10 PM 5/23/2020

Which is better for a country's economy, autocracy or democracy? -- conflicting studies

A few months ago we noted a study which concluded that democracy may not be that important to prosperity. See Poli Sci profs say democracy isn't necessary for prosperity previously at this blog.

The science isn't settled, apparently. For now we see Strongman leaders make for weak economies, study shows. Excerpt:

Autocrats whose countries experienced larger than average economic growth were found only as frequently as you would predict based on chance alone.

In contrast, autocrats overseeing poor economic growth were found significantly more frequently than chance would predict.

There was no evidence to suggest dictators had a positive influence over growth trajectories in the five or ten years after taking power. ...

The same analysis, carried out on dictators overseeing poor economies, to see if they had merely found themselves in the wrong place at the wrong time, found instead that economic growth dropped significantly after the entry into power of an economically ‘bad’ autocrat.

In short, dictators were shown to have little influence in driving economies up, but often more influence in driving them down.

Confirmation bias has a strong influence on my own analytical abilities, so I'm going with the freedom-is-better theme.

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3:36 PM 10/7/2019

Quote of the week -- from Nicole Ault about Austrian economics

Colleges Go to Court Over a Donor’s Intent, by Nicole Ault, was about a dispute over whether funds were being applied to “dedicated and articulate disciple of the free and open market economy (the Ludwig von Mises Austrian School of Economics)” as the donor wished.

And the quote below pertained to a mind-set that leads to socialism. To wit:

I majored in economics at Hillsdale, and “Austrian I” was one of the most absorbing and inspiring classes I took. It taught me to appreciate the unpredictability of human behavior and fallibility of markets. It also showed me how mainstream economic thought feeds the socialist temptation. When people conceive of economic knowledge as purely factual and objective, Hayek pointed out, they may also assume they can engineer society.

As socialism grows chic—particularly among college students—the humility supplied by the Austrian view is critical.

(Bold added.)

The socialist movement in the U.S. today is not a positive development. If that is a result of our current education system then reform certainly is in order.

Meanwhile, the University of Missouri, the school which the donor wanted to add an articulate disciple of free and open market economy, appears not to have complied with the donor's wishes.

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1:41 PM 9/28/2019

Bernie Sanders' shrewd move -- calling corporate welfare socialism

This seems like a pretty shrewd move on Bernie's part, but it's not likely to get much traction.

He is credited with authorship of an article titled Trump Is the Worst Kind of Socialist in which he details some of the corporate welfare that he's calling corporate socialism.

Both Republicans and Democrats pay lip service to opposition to corporate welfare, and it's debatable which party is the worst offender. It all depends on which groups one thinks should get government handouts. Ideally, the government would stop trying to pick winners and losers and let the free market decide.

Nonetheless, Sanders has hit on a subject that should resonate. But it won't. Voters have been opposed to corporate welfare for years, but it never seems to matter.

By the way, maybe Sander has provided a clue as to what Democratic Socialism is. It's the same as corporate welfare, but with different special interest groups on the receiving side of the equation.

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4:06 PM 6/29/2019

Let's not give too much credit to AOC for the Amazon pullout of NYC

That Thanks for Nothing AOC sign in NYC got a lot of coverage for its message. But it gave too much credit to AOC for Amazon's decision not to place its new HQ2 in New York. Members of the NYC Council and union leaders put the scare in Amazon. Check out Amazon’s New York Project Foundered on Labor Organizing, Opposition to Subsidies:

After the announcement, a group of state and local leaders seized on the incentive package and questioned why one of the richest companies in the world was getting subsidies at all. Cries of corporate welfare and vulture capitalism became refrains among progressive Democrats, including the state’s newest political star, U.S. Rep. Alexandria Ocasio-Cortez, as well as from within the newly Democratic state senate.

Those politicians, together with union leaders, also beat a drum about Amazon’s stance against organized labor. Members of the New York City Council joined in, grilling company executives at hearings in December and January over their record with unions and about the closed-door negotiations with state and city officials that had produced the biggest project-based incentive package in state history.

“This was a secretive process intentionally structured to avoid a substantive public review in advance of any commitments being made,” City Council Speaker Corey Johnson said at a Jan. 30 hearing.

Amazon executives were completely unprepared for the backlash, according to the people familiar with the matter. Polls showed a majority of New Yorkers supported the new campus, but Amazon grew more wary when state Sen. Mike Gianaris, who represents the project site in Queens, was nominated on Feb. 4 to the Public Authorities Board. The seat meant Mr. Gianaris, an outspoken critic of the deal, could potentially veto the proposed campus.

(Alternate link)

Give credit where credit is due. She probably deserves a little of the blame for chasing away a vibrant large scale employer. But to give her full credit is misplaced.

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1:43 PM 2/24/2019

High profile Californian moving to Texas -- SpaceX Mars rocket

Californians are on the move. And many are coming to Texas, including this high profile outfit. In blow to Los Angeles, SpaceX is moving some Mars spaceship and booster work to Texas:

In a reversal of a deal local officials had touted as a win for Los Angeles tech, SpaceX will no longer build its Mars spaceship and rocket booster system at the Port of Los Angeles. Instead, work to build and test the prototype will be done in south Texas.

SpaceX said in a statement Wednesday that the decision was made to “streamline operations.”

In a tweet, Chief Executive Elon Musk said: “Starship & Raptor [engine] development is being done out of our HQ in Hawthorne, CA. We are building the Starship prototypes locally at our launch site in Texas, as their size makes them very difficult to transport.”

SpaceX has completed assembly of a prototype of the Starship hopper vehicle at its Boca Chica facility in south Texas, where it also plans to conduct tests in which the prototype will launch and go up in the air briefly before returning to Earth.

Elon Musk's car company has had its problems, and it's anyone's guess whether SpaceX will turn out to be a good investment. But the Midland Development Board members who committed taxpayer money to the ultimately bankrupt maker of Xcor and the conversion of the local airport to an air and space port must be crying in their cervesa.

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2:57 PM 1/21/2019

Banks and other lenders hardest hit by gov shutdown

Most of us out here in flyover country wonder why anyone but government employees, clients, and subsidy recipients should be anxious about the government shutdown.

Banks and lenders will probably not get a lot of sympathy, but they'll suffer when their government employee borrowers and credit card customers delay payments or don't make payments at all during the shutdown. Furthermore, banks and lenders will be under increasing pressure to waive late fees. Some have done it already. See the following headlines, for example:

Auto lenders offer payment relief to U.S. government workers during shutdown;
Wells Fargo to Waive Mortgage Late Fees Tied to Government Shutdown;
Chase to Assist Federal Employees Affected by Government Shutdown.

There will always be people looking for someone to brand as a villain. Trump is their favorite target, and lenders who don't cave may be their next target.

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2:14 PM 1/6/2019

For what it's worth, stock market fear index is in bullish territory

We talked about the Fear & Greed Index a month ago when it was 18 which they called "extreme fear."

Currently it's at 5 which which also qualifies as "extreme fear." But with no blood in the streets, who can really know? Although, in this stock market environment it won't take much good news to spark a rally.

Previously: Is this bear market pause on stocks over yet?

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2:26 PM 12/21/2018

CFPB may relax payday loan rules

Lefties like Elizabeth Warren were tone deaf to the needs of low income people, and they came out with misguided efforts, such as the CFPB's restrictions on payday lending which made it harder for anyone wanting a payday to get one. However, the Trump administration aims to make it easier.

A payday loan might have a high interest rate that the upper class folks like Warren would never want for themselves. So they think of it as "predatory lending" and want to slap strict rules on them.

J.D. Vances' book "Hillbilly Elegy" was an excellent glimpse into the lives of poor folks. And one part of the book explained how the author used such loans to get through the month when he was working for very little money. It turns out that paying the interest on the loans was cheaper than paying late payment fees for ordinary monthly bills. There was a rational, economic, non-predatory, use for the loans.

Now we hear that the payday loan rules are about to be relaxed. See CFPB watchdog looks to rescind crucial part of payday loan rules:

The CFPB finalized rules last year that would, among other changes, force payday lenders to take into account the ability of their customers to repay their loans in a timely manner, in an effort to stop a harmful industry practice where borrowers renew their loans multiple times, getting stuck in a cycle of debt. Those “ability to repay” regulations will now be revisited in January 2019, the bureau said. ...

The cornerstone of the rules enacted last year would have required that lenders determine, before approving a loan, whether a borrower can afford to repay it in full with interest within 30 days. The rules would have also capped the number of loans a person could take out in a certain period of time. ...

The CFPB’s ability-to-repay rules are complex, spanning hundreds of pages, and govern only short-term loans that many payday lenders rely on. The payday lending industry was adamant in their opposition, and even made an unsuccessful push for the Republican-controlled Congress to use their authority under the Congressional Review Act to veto the rules.

The industry argues that the CFPB’s rules are too complex and would lead to the closing of hundreds of payday lending stores and a substantial decline in lending volumes.

Proponents of the rule should read J.D. Vance's book.

Update:  Related link: New Documents Reveal How Obama Unjustly Targeted Payday Lenders.

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2:01 PM 10/29/2018

Mark J. Perry explains why socialism is doomed to fail

The brilliant economist Mark Perry dissects socialism in a four part series. Anyone who thinks socialism is right for the U.S., or any other nation, should read it.

See Part I: ‘Why Socialism Failed: A 2018 Update,’ Part I.

Part II: ‘Why Socialism Failed: A 2018 Update,’ Part II.

Part III: ‘Why Socialism Failed: A 2018 Update,’ Part III.

Part IV: ‘Why Socialism Failed: A 2018 Update,’ Part IV.

And finally, the full version in PDF: Why Socialism Failed: A 2018 Update.

Meanwhile, Mr. Perry responded to some critics in this post.

Unfortunately, given that adherents to socialism seem drawn to the free stuff they'll get, Mr. Perry's article is likely TLDR for most of them. But here's a snippet that may be a teaser but might provide provide some incentive to read the whole thing.

A centrally planned economy without market prices or profits, where most of the property is owned or controlled by the state, is a system without an effective incentive mechanism to direct economic activity. By failing to emphasize incentives, socialism is a theory inconsistent with human nature and is therefore doomed to fail. Socialism is based on the theory that incentives don’t matter!

(snip)

However, the choice of economic and political institutions is crucial in an imperfect universe with imperfect beings and limited resources. In a world of scarcity, it is essential for an economic system to be based on a clear incentive structure to promote economic efficiency. The real choice we face is between imperfect capitalism and imperfect socialism. Given that choice, the evidence of history overwhelmingly favors capitalism as the greatest wealth-producing economic system available, while socialist economies like Venezuela destroy wealth and leave its citizens impoverished, malnourished, sick and desperate.

The strength of market-based capitalism can be attributed to an incentive structure based upon the three Ps: (1) Prices determined by market forces, (2) a Profit-and-Loss system of accounting, and (3) Private Property Rights. The failure of socialism in countries like Venezuela can be traced directly to its neglect of these three incentive-enhancing features.

Anyway, happy Labor Day!

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1:08 PM 9/3/2018

Supreme Court just created a huge new business -- software for small internet sellers who now have to collect local taxes

How much would a small business spend for software that would do the meticulous calculation for the sales tax amount and supply remittance addresses for every taxing entity in jurisdictions in which they make internet sales? My guess would be thousands, if they could hike the price of the product they sell to pay for this additional expense.

In deciding in favor of tax collectors in South Dakota v. Wayfair, Inc., Justice Kennedy didn't need to bring up the Keynesian Broken Window Fallacy as he had tax revenue in mind -- it's not just for the common good, it's for fairness!

But that famous Broken Window Fallacy has some application. All that money spent by customers on taxes and by vendors on the collection process is money that could have been used elsewhere.

We don't need taxing entities to decide how best to use our money. Out here in the Permian Basin tax collectors are awash in sales tax revenue already. The dilemma they see is how to spend all that money. Nowhere is there a serious consideration of the concept of giving it back to the people.

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12:50 PM 6/23/2018

Electric cars not so green after all

One of the main appeals of the Toyota Prius was the snob factor. Owners could drive through town in proof that they were so much more righteous than the deplorables. And now the electric car is taking their world by storm.

But there's a cost. Those vehicles are highly subsidized, and taxpayers get little to show for it. Furthermore, not only does the manufacturing process burn energy, but the process of making usable energy is dependent on fossil fuels. The dream of actually improving the environment is just that, a dream.

This has been understood by many for a long time. So it's nice to see something about it in a publication popular among lefties. Take a look at this at politico.com Are electric cars worse for the environment? The answer is in the subhead: "Crunch the numbers, and it looks like all those subsidies might be counterproductive." Jonathan Lesser notes that new vehicle internal combustion engines are very efficient, and air pollution would likely increase with widespread use of electric vehicles. And this:

And as for that electric car: The energy doesn’t come from nowhere. Cars are charged from the nation’s electrical grid, which means that they’re only as “clean” as America’s mix of power sources. Those are getting cleaner, but we still generate power mainly by burning fossil fuels: natural gas is our biggest source of electricity, and is projected to increase. And coal, while still declining, will remain the second largest source of electricity for some time. (Third is nuclear power, which doesn’t generate emissions but has other byproducts that worry some environmentalists.) Even with large increases in wind and solar generation, the EIA projects that the nation’s electric generating mix will be just 30% renewable by 2030. Based on that forecast, if the EIA’s projected number of electric vehicles were replaced with new internal combustion vehicles, air pollution would actually decrease—and this holds true even if you include the emissions from oil refineries that manufacture gasoline.

Mr. Lesser goes on to note that electric vehicle owners are typically wealthier than the non owners as the poor might not be able to afford even a subsidized one much less have the capability to keep it charged. He suggests that the wealthy have the most to gain from owing them. Let me paraphrase: It's not easy being green, unless you are rich.

Oh, and the snob appeal. Don't forget the snob appeal.

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1:32 PM 5/20/2018

Rent Is Too Damn High Party's effect in California

We laughed at this particular special interest that sprang up in New York a few years ago. It was the Rent Is Too Damn High Party, and even SNL didn't shy away from mocking this offshoot from the Democrat party.

Whether Californians know it or not, the party apparently had an impact there. See this from OCregister.com: Rent-control initiative could obliterate state housing markets.

A 1995 California law prevents cities from making regulations that would establish rent control on single family dwellings and condominiums, and new apartment units. The law also prevents property owners from raising the rent once the current renter vacates the premises or gets evicted for cause. Source.

That law protecting property owners is on the ropes. The November ballot will contain a measure that will end those restrictions. It's hard to imagine Californians voting to keep in place anything that helps a landlord.

Landlords must really be sweating.

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2:32 PM 5/10/2018

Los Angeles mayor is so compassionate he's giving away your space to the homeless

L.A. Mayor Eric Garcetti should feel some responsibility for the homeless in Los Angeles. It's not because he's so compassionate, it's because housing is so heavily regulated few can build anything, so he's part of the problem.

Not to worry. The government is here to help. Andrew Malcolm tells us about the proposed solution in How about housing some homeless in your backyard?. Here's how the proposal would work:

Under the program the county would lend $75,000 to homeowners to build a backyard house or $50,000 for a garage-type renovation for up to six units. Loan principal would be reduced for each year a formerly homeless person occupies the unit.

After 10 years, the loan would be forgiven and homeowners would be free to do as they want with the building.

One should wonder whether the formerly homeless residents of these dwellings would care enough about them to perform regular upkeep and what recourse, if any, the homeowner would have if they didn't.

Meanwhile, this video uploaded on Christmas day 2016 made the rounds a while back. It's rather astonishing to see how many people live on the streets in downtown Los Angeles. Aside from refugee camps, there's really no worthwhile solution.

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1:13 PM 4/12/2018

Tesla -- note to Democrats, conservatives don't hate Tesla, it's the tax subsidies they hate

A few years ago a Democrat relative sent a screen shot and a link to Consumer Reports calls latest Tesla best vehicle they've ever tested, right wing goes nuts along with a note that one of her friends was buying one. I questioned why conservatives would go nuts. But without reading the article, I assumed it was because Elon Musk and Teslas were so highly subsidized with tax dollars.

I, as a conservative, love to see entrepreneurs succeed. And I would love to see Tesla succeed AND wean itself off subsidies. I would also like to see more established companies, like Toyota, make an electric vehicle with the high quality Toyota buyers expect from that company.

Because Tesla is having some problems. For example, Tesla employees report flawed parts are causing Model 3 delays.

Not long ago I watched a TV show with a title something like, "How They are Made," which featured in that episode about how the Tesla automobile was made. It was a very slow building process with a very high "hand made" aspect to it. Sometime later when Elon Musk announced a very ambitious production rate for the cars, I didn't go nuts, but I did question whether he could pull it off with so much hands-on work involved. Turns out he couldn't.

In any event, good luck Musk. But please quit clamoring for tax dollars.

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12:45 PM 3/16/2018

Larry Kudlow -- Free market capitalism is the best path to prosperity

Proponents of free markets are opposed to Trump's threat to put tariffs on imported steel and aluminum. And Gary Cohn, Trump's chief economic adviser reportedly resigned because of that threat. The man chosen to replace him in that job is Larry Kudlow.

Kudlow is a very smart fellow who isn't afraid of the camera. He would be a good choice, but what about those tariffs? Kudlow's mantra is this:

Free market capitalism is the best path to prosperity!

(Sources here and here.)

We don't know all the details about the proposed tariff. It could be a big bluff by the artist of the deal. But if they come to pass, they will probably be targeted like a smart bomb against those countries who are using tariffs themselves to hurt U.S. businesses. One for one, tit for tat. Take that. It might work.

Meanwhile, Trump's two main criteria for his hires seem to be smarts and loyalty. They have to have both. Kudlow has the smarts, but he would have to prove his loyalty. He may be out before he's in. We'll see.

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10:51 AM 3/14/2018

Tariff's are not always a bad thing

Ben Stein was on the Fox Business Network the other day getting a reminder of the scene in "Ferris Bueller's Day Off" in which his character attempted to lecture students about how the Smoot-Hawley Tariff Act worsened the great depression. So wouldn't the same theory apply today with President Trump's tariff threats?

Not quite. Watch his response in this Youtube video.

In summary, the cold war may be over, but there is real danger of conflict. In certain categories we do need to protect our own industries. Steel and aluminum are vital materials to the United States. And we shouldn't cede them to countries that could be enemies. Furthermore, the cost to American consumers won't be that much. Listen to it at the link above.

Meanwhile, Tim Carney points out that while the grand view that the theory that free trade "improves the welfare of all nations involved in the trading" is likely true, it ignores the hardship inflicted on those involved in the industries that shut down. For many of the individuals affected, there's no recovery. He made the case in Free-traders oversimplify their case against tariffs, to no-one's benefit.

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1:50 PM 3/3/2018

Hilarious -- "Why Socialism Works" by Harrison Lievesley

This book supplied our quote of the week: In answer to the title question, "It doesn't."

Found at Carpe Diem, the blog by well known free market supporter Mark J. Perry, is this book recommendation: Why Socialism Works.

After scratching my head a few times, I had to see the Amazon page for it. The reviews gave it quite favorable ratings which furthered the mystery. But click the link to see inside. It's a joke! And a good one, too!

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2:27 PM 12/15/2017

It's time for Net Neutrality to go

Net Neutrality was an example of government picking winners and losers among businesses. Stopping it will allow businesses in the industry large and small to innovate and provide customers with the products they want. Net neutrality would have protected the big guys from competition.

Basically, Net Neutrality would require ISPs to treat small data packets the same as large video streams. For a fairly simple to understand article about this, see Harry Khachatrian's article Everything You Need To Know About Why Net Neutrality Is A Terrible Idea. (Same article here, re-titled Everything You Need to Know About the Net Neutrality Debate.)

There, Mr. Khachatrian explains the difference between IXPs and Tiers 1, 2, and 3 ISPs. Further, he goes on to explain, companies like Google, Netflix, and Facebook connect directly with the IXPs and then to the ISPs as peers. That means that Google is not a customer of an ISP. Google simply connects to these internet exchange points where it peers with service providers. Here are Mr. Khachatrian's words:

This way, Google has far more control over how its content is delivered to users. If Google wants to treat YouTube video packets differently than the packets transferred for uploading Google Docs files, it can.

Net Neutrality laws will not affect Google because Google does not pay transit providers to deliver content to users. It peers with them.

Google likes Net Neutrality because it would stifle competition. And we should celebrate its end.

But here's a mystery. Why would anyone demonstrate against FCC Chairman Ajit Pai over this? Do they really know what they are protesting or are they simply following marching orders?

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11:17 AM 11/28/2017

Taking a knee and biting the hand

All those rich professionals ball players on the field who refuse to respect the U.S. flag have every right to do so. They should thank our founding fathers for giving them that right, but that wouldn't fit the narrative.

In any event, the politicization of pro sports could have a positive effect. The case for taxpayer funded ball parks for pampered professionals and wealthy owners has always been a misuse of tax dollars. Voters who will inevitably be asked to pay for new sports stadiums might have second thoughts about that concept.

So maybe voters will balk the next time some pro team owner comes to them with his hand out. The ballot box is where conservatives protest. Let the millionaire players pay for their own stadium.

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9:13 AM 9/24/2017

In defense of price gouging

The only alleged price gouging I've seen was back during the gasoline shortage in the 70s in Houston. There were long lines at all the stations, except one. One gasoline station owner raised the price of a gallon of gasoline to a price that at the time was way in excess of the pre-shortage price. Then the MSM discovered him. And the TV and print media rained holy hell down on him.

He was portrayed a some kinda robber baron, and he caved in short order. However, he was merely a provider of a product to those who were willing and able to pay extra for it in exchange for their not having to fight the crowds at the other stations. Think of first class air travel compared to the cheap seats.

Fast forward to today, when some are making claims against alleged price gougers in Houston. The Texas Attorney General helpfully explains that price gouging is illegal. It shouldn't be.

The brilliant Thomas Sowell explains why in his article from 2004, 'Price gouging' in Florida. Excerpt:

What do prices do? They not only allow sellers to recover their costs, they force buyers to restrict how much they demand. More generally, prices cause goods and the resources that produce goods to flow in one direction through the economy rather than in a different direction.

How do "price gouging" and laws against it fit into this?

When either supply or demand changes, prices change. When the law prevents this, as with Florida's anti-price-gouging laws, that reduces the flow of resources to where they would be most in demand. At the same time, price control reduces the need for the consumer to limit his demands on existing goods and resources.

In other words, with price controls, the first people to get there buy up all the available supplies. And there's little incentive for the retailer to restock.

Finally, for those who think only the government can come to the rescue, see Mark J. Perry's excellent piece, Private sector to the rescue in Texas: Never underestimate the power of the private sector to rise up to any challenge, in which he relates how dozens of companies have come forth with people and supplies to help flood victims. It's a must read.

Here's an idea -- owners of unpopular statues should lease them to highest bidder

The other morning on C-SPAN's Washington Journal, Steve Scully was entertaining calls from angry Democrats decrying President Trump's movement to undo previous presidents' orders that declared thousands of acres of land as national monuments making them off limits to developers. Here's an article about that proposal: Trump orders review of national monuments, vows to ‘end these abuses and return control to the people’.

Democrats calling into C-SPAN were livid. But it's ironic that many of those same Democrats would probably cheer the removal of a monument to a historic figure who has fallen out of favor with the left.

Let's expand the theory. Why not let local governments decide whether an unpopular statue needs to stay or leave? If they decide it should go, instead of knocking it down, they could put it up for rent. The highest bidder could rent the statue for 10 years, leave it where it is, or take it wherever they want, so long as they promise to relinquish it intact in ten years. That would be a much better use of George Soros' money than hiring mobs to commit mayhem.

Meanwhile, on the subject of offensive statues, ya gotta love this: Concerned Citizens Demand Removal of Offensive Statue That Glorifies an Alleged Rapist. Spoiler alert: It's a statue of Bill Clinton. (Heh heh.)

Is Elon Musk ready to battle the plaintiffs' lawyers after Tesla Model 3 rolls out?

Car magazines are gushing over the Model 3, and if all the hype is true, it really could be a ground breaking automobile. But with the hurried roll out, will the car be fault free right off the assembly line?

The old school vehicle manufacturers test new models extensively, but many of the problem come to light only after their vehicles have been driven off the lot by paying customers. Anyone who has bought a new car in the past few years has probably encountered at least one of those ubiquitous recalls that seem to plague every manufacturer. The most infamous one was the recall to replace those Takata airbags which sometimes sprayed shrapnel at the passenger. It was an extremely expensive recall, and it's not over yet.

More recently, we learned that plaintiffs' lawyers are seeking another billion dollars from the GM bankruptcy trustee over a faulty ignition switch.

Will the Tesla company be able to weather these type storms? Mr. Musk has a lot of friends in government, and he has done well by them. He'll probably be calling on them for a bailout should some faulty part plague his new car.

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11:00 AM 8/12/2017

Good bye Sears -- we appreciated you when we could

Sears is on the way out. That's a shame, at least for those of us over a certain age who were prodigious Sears shoppers back in the day. At one time it was the go-to store for Levis, long-johns, and lug nuts. They had tools of any type, and the simple hand tools had a lifetime guarantee.

My last major purchase at Sears was a set of five new tires for my old SUV. The purchase included a flat tire repair service. But the last time I took a tire in for a puncture repair they weren't able to do it because they had no one working in the garage that day. I ended up buying a can of Fix-A-Flat and pumping it into the tire. That worked, but eventually the tire started leaking air.

Took it back to the Sears garage for a real repair and was told I would have to purchase a new tire because they couldn't repair a tire that had Fix-A-Flat in it. Wait, why wasn't I warned about that when they sold me the can of Fix-A-Flat?

I took the tire to Bill Williams Tire Center, and they patched it up without problem. Thanks guys!

Anyway, if the local Sears store survives this latest round of closures smart shoppers will probably hesitate before buying anything there that could conceivably require some attention in the future.

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4:13 PM 7/8/2017

Mike Lee has a rational suggestion for the BCRA

The Better Care Reconciliation Act of 2017 (BCRA, i.e., Son of Obamacare) is hanging before the Senate, and as we noted the other day, five senators have come out against it. Let's take a look at one of them, Mike Lee of Utah. See The Missing Ingredient in BCRA: Humility. Here's the meat of that sammich:

And so, for all my frustrations about the process and my disagreements with the substance of BCRA, I would still be willing to vote for it if it allowed states and/or individuals to opt-out of the Obamacare system free-and-clear to experiment with different forms of insurance, benefits packages, and care provision options. Liberal states might try single-payer systems, while conservatives might emphasize health savings accounts. Some people embrace association health plans or so-called “medishare” ministry models. My guess is different approaches will work for different people in different places – like everything else in life.

When we last talked about Mike Lee he was discussing Iroquois Chief, federalism, and the founding fathers. You know, I like that cut of that guy's jib.

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12:50 PM 6/26/2017

universal basic income -- not such a bad idea if it really means extinguishing all other subsidies

Mark Zukerberg is the latest prominent person to advocate for it.

And conservatives are vehemently opposed to it, because after all, our nation was built on personal responsibility. They have a point. But we're on the verge of socialism anyway with that "safety net" propping up a lot of able bodied citizens already.

The beauty of the basic minimum guaranteed income as it's been proposed by Charles Murray and others it that extinguishes all over subsidies. That would include welfare, social security, SSI, food stamps, and all other forms of subsidies. Overall, they say it will be cheaper.

If it were to be implemented as they propose, it probably would be cheaper. But all those stuck cows will be screaming like stuck pigs. Under the guise of opposition to socialism, those beneficiaries of government largess will stop it from ever happening. Too bad.

As much power to influence as Mark Zukerberg has with the Facebook mind control tool, it's doubtful he could change attitudes enough to get this one through. Heck, Congress is so set in the status quo that it can't even adopt something as beneficial to the people as tax reform.

Meanwhile, as conservative argue it goes too far. Progressives argue that it doesn't go far enough and should also ensure a guaranteed job. Now we're talking real socialism.

Progressives have way too much emotion invested in Net Neutrality

Years ago a friend described a Democratic party precinct meeting he attended. He told how the group was fairly united about the headline topics. But truck deregulation was on the list, and the attendees were asking each other, "what's the liberal position on that?" They didn't know much about the trucking industry, but they knew they wanted to have the "liberal position" on it.

The brouhaha about Net Neutrality reminds me of that. A weekend article in the Wall Street Journal was about an interview with FCC Chairman Ajit Pai available at Why ‘Net Neutrality’ Drives the Left Crazy behind the paywall.

There he says that radical leftists have invaded the neighborhood where he lives, hanging pamphlets on doorknobs with his photo asking "have you seen this man," and taking photos of the inside of his house through the windows. Harassment is ordinary lefty behavior these days.

All this is over "Net Neutrality" which is a euphemism for government control of the internet, something which the protesters probably know little about. But they were inspired by a comic named John Oliver who beseeched his viewers to go activist against Mr. Pai.

Too bad they can't appreciate the advantages of free markets and instead think they want the internet regulated like a utility.

An editorial at Investors.com explains the advantages of an internet not burdened with heavy regulations. In short, there are a lot of competitors vying to provide internet service to customers. And they are constantly trying to improve their product and make it more affordable. Throwing in heavy handed government regulations will stifle this expected result of free markets.

Keep the internet free from government regulators. Bury Net Neutrality once and for all.

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2:17 PM 5/23/2017

Trump should get credit for economic optimism we're seeing

This type of thing gets buried under the news of the Comey firing and Democrats' screeching for an independent counsel to investigate something, anything, however small, that they can use to discredit Donald Trump.

But there's increasing evidence that Trump having gotten elected and focusing on helping the economy is actually helping the economy. The economy consists of people making something and other people buying it. Both sides of the transaction had to have enough optimism to proceed.

Having endured a stagnant economy for the past eight years, it refreshing to see some optimism. And here we have this headline: Fewest workers getting unemployment benefits in 28 years:

Just 1.9 million people received unemployment insurance benefits at the end of the month, the fewest since 1988. Benefits are available for up to 26 weeks in most states.

Even more engouraging [sic]: Averaging over the past four weeks, total unemployment benefit claims are running at the lowest rate since 1974, despite the workforce being 75 percent bigger.

Thursday's report also showed new jobless claims dropping to 236,000 in the first week of May, an extremely low level.

Donald Trump, making America great again!

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1:23 PM 5/11/2017

Is Trump a Keynesian?

That's a possible conclusion from a remark he made about priming the pump. Source is Trump Priming.

Conservatives reject Keynesianism outright. But actually the results are mixed. If it's done right, then there can be a return on the investment better than one for one. Most of the time it doesn't work, though. And that's probably because those doling out the money are merely handing out money to cronies. Obama's stimulus package was a good example of that, and it left a sour taste in a lot of people's mouths.

So now we have to wonder whether Trump can pull it off. Ramesh Ponnuru explains in the above linked article why he probably can't. But Trump can make deals. That's a given. And it's possible he just might be able to do what few have done and actually make Keynesianism work. We'll see.

Aside: Fans of political satire may recall the time when some sneaky individual held a sign at an Obama rally that asked: "Is Obama Keynesian?" Hilarity ensued as Obama fans, insecure about his background, leaped to denounce any suggestion that he was "Kenyan."

Guaranteed basic income -- the concept grips the imagination and won't let go

WSJ.com has a review of a took titled "Basic Income." Hyperlink here: Cash Handouts for Everyone. That link is behind a paywall, but another discussion on the book topic can be found at WaPo here: How to ensure everyone a guaranteed basic income.

We talked about it at this blog almost a year ago in Charles Murray makes the case for a universal basic income.

The concept sounds simple: The government gives everyone a modest income -- just enough to pay for minimum existence. There will be some for whom that will be enough so long as they don't have to work. Others will work at jobs or their own businesses to better their lives. By eliminating all other forms of welfare and government payments the overall cost to taxpayers will be lower.

Would it work as predicted? It's an intriguing concept, especially the part that eliminates welfare and subsidies. While most Americans are probably curious, they/we are not likely to want to uproot the economic system in the U.S. for such a grand experiment. What we need is some country to do it first and offer some proof that a guaranteed basic income would accomplish all those lofty goals.

Addendum: It's interesting, although not surprising, that so many of the tech billionaires -- those geniuses whose inventions are probably responsible for the loss of more American jobs than were lost to the factories in China -- are in favor of it.