"These Sugar Barons Built and $8 Billion Fortune With Washington's Help" is the headline over a pretty good Bloomberg News article outlining the Fanjul family's business: "it's held up by a quota system that restricts imports to give producers some 85 percent of U.S. sales, and by a federal loan program that, basically, puts a floor under prices." The result is higher prices for consumers.
As is often but not always the case, government interference in the free market winds up helping politically influential very rich people and making them even richer, while hurting the average person buying sugar (or something else) at the supermarket. Journalists have been writing one version or another of this same story about the Fanjul family for years (here is a nearly identical version that appeared in Time magazine in 1998, nearly 20 years ago), and it never seems to change.
On a brief visit to New York City earlier this week, I stopped in at a McDonald's restaurant and encountered a machine that replaces the human being who used to take your order. This is, of course, an entirely predictable consequence of Governor Cuomo and the legislature creating a special minimum wage for fast food workers. That wage, which is being phased in, reached $12 an hour in New York City on December 31, 2016, and is scheduled to climb to $15 on December 31, 2018.
The Lincoln Review podcast had me on to talk about President Trump and immigration. You can listen here or watch below or by clicking here. I think the production values are higher on the audio version. The host is Jeff Semon, who is a Republican cable news commentator in Boston and a former congressional candidate, and the other guest is Mike Stopa, another former Republican congressional candidate. It's (a lot) less formal than television, but it was fun. Your feedback is welcome in the comments.
An Eduardo Porter column in the New York Times reports:
Virtually every economist contends that paying for current Social Security and Medicare benefits into the future will require not just higher taxes on the rich, but also more money from everyone. There are fewer workers paying taxes for every retiree collecting benefits. The choice is between slashing the retirement package and raising taxes on the young.
Bloomberg reports on the new Tesla Model 3, which it notes "has a starting price of $35,000." It notes further that "The U.S. government provides a tax rebate of $7,500 for electric cars. Some states offer additional incentives. In California and New York, for example, a base Model 3 might cost as little as $25,000."
The comparison between President Carter and President Trump — which both the Wall Street Journal and the New York Times have aired in the past week — is the topic of my latest column. Please check the column out at the New Boston Post (here), New York Sun (here), and Newsmax (here).
Even with what Michael Kinsley says is his own diminished mental capacity owing to age and disease, he is one shrewd observer. He writes:
It would be nice, I have long thought, to have an openly opinionated press as Britain does, with papers such as The Guardian in London. Instead of hiding their biases, writers and correspondents could say what they think, and readers could discount accordingly.
Well, since Mr. Trump became a serious possibility for president, we have had that world I longed for, and I'm not so sure I want it.
The Roosevelt Institute has a new report out about monetary policy that is skippable, but within it are some newsworthy paragraphs, on the page numbered 17, making what the group calls "a progressive case for growth":
sustained high growth and low unemployment almost always pulls up wages disproportionately, especially at the bottom of the distribution....Finally, low-productivity jobs and underemployment are generally less intrinsically rewarding, more tedious and often more physically taxing, less secure and enjoy less respect and status than productive jobs. So an argument that the economy is still far from potential is in part also an argument for better jobs for ordinary Americans.
The proliferation of animal metaphors that the left is hurling at capitalists — snakes, vultures, fat cats — are the topic of my column this week. Please check it out at the New York Sun (here) or Newsmax (here).
One of the most viewed stories on Bloomberg.com the past view days is headlined "The Man Who Got Americans To Eat Trash Fish Is Now a Billionaire." It reports on Trident Seafoods founder Chuck Bundrant. What struck me about the article is the way it shows two different ways to make money. The first way is to innovate and then popularize the innovation — build a better mousetrap.
As Bloomberg tells it:
At the time, most fishermen took their haul back to the docks where processing companies pulled the crab meat out before sending it to market, leaving them with less time on water. Bundrant outfitted the Billikin with crab cookers and freezing equipment on board, allowing workers to remain at sea. ...Bundrant decided to turn to pollock, a so-called groundfish that was swarming in the Bering Sea. Pollock was popular in Asia but not so much in the U.S. Bundrant thought Americans would like the taste once exposed to it.
A Toronto man who spent $550 building a set of stairs in his community park says he has no regrets, despite the city's insistence that he should have waited for a $65,000 city project to handle the problem. The city is now threatening to tear down the stairs because they were not built to regulation standards.
Retired mechanic Adi Astl says he took it upon himself to build the stairs after several neighbours fell down the steep path to a community garden in Tom Riley Park, in Etobicoke, Ont. Astl says his neighbours chipped in on the project, which only ended up costing $550 – a far cry from the $65,000-$150,000 price tag the city had estimated for the job....
Astl says he hired a homeless person to help him and built the eight steps in a matter of hours...
Area resident Dana Beamon told CTV Toronto she's happy to have the stairs there, whether or not they are up to city standards.
A joint white paper from the Hoover Institution and the American Enterprise Institute economists John Cogan, Glenn Hubbard, John B. Taylor, and Kevin Warsh contends that tax reform, regulatory reform, spending restraint, and "budget reform and monetary reform" can "raise the economic growth rate to 3 percent."
They may or may not be right, but what strikes me is the modesty of the goal. They are aiming low. For comparison's sake, President Kennedy aimed, ambitiously, for 5% growth and achieved it, and the George W. Bush Institute organized a conference in 2011 on the topic of how to get America's GDP growing at a 4% annual real rate.
The Massachusetts Fiscal Alliance, a center-right budget watchdog group, has a post about Governor Baker's new budget that has some national implications in respect of the urgency of Washington taking some action on health care:
In the past six years, MassHealth enrollment has increased from 1.3M to 1.9M... spending on the program doubled from $8.7B to $16.5B. MassHealth currently accounts for over 40% of the state's budget.
MassHealth is the state's version of Medicaid, the health insurance that covers the poor. Baker is a former health insurance executive, so he has some expertise in the area and might be able to get a handle on it if he can get the Democrat-controlled legislature to cooperate rather than demagogue the "cuts" as a political bludgeon against Baker, who is up for re-election in 2018.
The U.S. Securities and Exchange Commission has affirmed the dismissal of an administrative case against a former Wells Fargo & Co trader after two commissioners split on whether the evidence proved he engaged in insider trading.
The ruling on Thursday came in an appeal by the SEC's enforcement division of an administrative law judge's 2015 ruling dismissing the case against Joseph Ruggieri, who was accused of trading on tips supplied by a Wells Fargo analyst.
It marked a rare loss for the SEC's enforcement division in a case pursued through an in-house administrative proceeding. Critics call such fast-tracked proceedings unfair to defendants, some of whom have challenged the system in court....
In Thursday's ruling, the two commissioners deciding the case deadlocked on a different issue, of whether Ruggieri had indeed placed his trades while aware of non-public information.
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