Tag Archives: #Economics

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An economics lesson in The Philadelphia Inquirer I suspect it was unintentional

One of my concerns when naming The First Street Journal was that I wanted to concentrate more heavily on economics, and, to be honest, The Main Street Journal name had already been taken, actually by more than one site. Mrs Pico suggested The Center Street Journal, which I considered, but, at the time we actually lived on Center Street, in Jim Thorpe, so even though I use my real name, I thought that unwise.

More, Center Street could be interpreted as implying that I am a political centrist, and I most certainly am not.

Sadly, I’ve spent so much time on politics, that I’ve neglected economics.

Philly renters should probably expect new leases to include higher rent to account for new tax assessments

Increases in rent because of landlords’ higher property tax bills will hit low-income renters the hardest.

by Michaelle Bond | Friday, July 15, 2022 | 6:00 AM EDT

Anthony Krupincza, who owns five rental units in North and West Philadelphia, usually pays his tenants’ water bills. But now that some of his property tax bills will nearly triple because of the city’s new assessments, he’s telling new tenants they have to pay. And he’s raising rents for tenants who move in or renew.

“I have to explain to them it’s not like I’m making more money. It’s not like the extra money is going in my pocket,” he said. “The difference is to pay the tax bill. And if you really do the numbers, it doesn’t fully pay for the tax bill.”

That The Philadelphia Inquirer printed this is a bit amazing, because it teaches a lesson — at least for anyone willing to read and learn — that has been known for a long time, but wholly ignored by many: when the expenses of a business are increased, the prices the business must charge must also increase, or the business fails. The left think that we ought to tax those evil ol’ corporations more, but all that corporations do is pass on their costs of doing business, and taxes are very much a cost of doing business, on to their customers. The final consumer of their products, the individual, must pay all of the taxes heaped upon businesses throughout the production chain.

Rent increases due to higher property taxes demonstrates only a single level, but it’s something on which to learn for the multi-level.

Think about the price of a gallon of milk, which like everything else these days, is experiencing significant inflation. Included in the price of a gallon of milk are:

Photo by Dana R. Pico, © July 15, 2022. Free use is granted, with appropriate credit. Click to enlarge.

  • The taxes imposed on the dairy farmer for the fuel used around the farm;
  • The fuel, business, and income taxes paid by the trucker who takes the raw milk to the dairy processing plant;
  • The fuel, business, and income taxes paid by the producer who manufactures the packages for milk;
  • The fuel, business, and income taxes paid by the trucker who transports those packages to the dairy;
  • The fuel, business, and income taxes paid by the dairy which processes and packages the milk;
  • The fuel, business, and income taxes paid by the trucker who hauls the packaged milk to the grocery store; and
  • The fuel, business, and income taxes paid by the grocery store.

All of those expenses are bundled into the price you have to pay for that gallon of milk. If everyone up the production and delivery chain doesn’t have all of his expenses paid, he goes out of business! How hard is that to understand? And if any elements in that supply chain fail, the consumer doesn’t get to buy milk.

We noted here that the gallon of 1% milk at the Kroger on Eastern Bypass Road in Richmond, Kentucky was 99¢ when Donald Trump was President, rose to $1.79 on January 4, 2022, and was up to $2.19 by February 23rd.

It’s too soon to say the extent to which rents across the city might rise as a result of the city’s first property reassessment in three years, which increased Philadelphia’s total property value by 31%. Tax bills based on the new values will be mailed in December and are due March 31.

But landlords in the business of operating rental properties aren’t eligible for the city’s tax relief programs that were adjusted to soften the impact of the reassessment. So they will most likely pass on at least some of the extra costs in taxes — in addition to the operating costs inflation has driven up — to new and returning tenants, who already have faced historically high rent growth.

Of course, landlords in America are frequently thought of as Snidely Whiplash, tying Sweet Nell to the railroad tracks, so naturally Philadelphia wouldn’t make them eligible for programs to soften the impact of the reassessment. 52.8% of Philly’s housing units are owner occupied, according to the Census Bureau, a lower rate than the 64.4% nationwide, which means that 47.2% of Philadelphians rent their homes, and 47.2% of Philadelphians are not going to see any relief from programs to soften the impact of property value reassessments. After all, giving landlords relief would be welfare for the well-to-do, so who cares about them? But the lesson ought to be obvious: increasing expenses on landlords,[1]Full disclosure: My wife and I own rental property, and are technically landlords, but we are not running that business for a profit. We bought a house last December, to rent to Mrs Pico’s … Continue reading increasing expenses on any business, means increasing prices downstream. Politicians, Democrat and Republican alike. don’t want you to know, and hope that you are too stupid to figure it out, so that they can raise taxes on businesses, and the public will remain serenely unaware that they actually raised taxes on individuals.

That’s why City Councilmember Kenyatta Johnson said his “Save Our Homes” tax relief plan included $15 million in rental assistance in the fiscal year 2023 budget “to support those individuals who will be significantly impacted in seeing an increase in their rents” because of increases in tax assessments. Black and Latino neighborhoods face the highest increases in their tax bills due to the new assessments.

“We wanted to make sure not only homeowners were protected but also renters as well,” Johnson said.

Well, of course the Inquirer had to let readers know that black and Hispanic citizens would be hurt worst, because that “anti-racist news organization” always has to come up with a racial angle, but there are plenty of working-class whites living in the City of Brotherly Love as well, and their rents are going to rise as well. One wonders if Kenyatta Johnson care about that!

Economics, on the other hand, definitely does not care: there are no different principles of economics based on a person’s race or ethnicity. The Inky managed to eke out an economic lesson for its falling readership, but it might not be a lesson the editors actually wanted their readers to learn.

References

References
↑1 Full disclosure: My wife and I own rental property, and are technically landlords, but we are not running that business for a profit. We bought a house last December, to rent to Mrs Pico’s sister, and we are simply hoping to break even. When we go to our eternal rewards, the house will be inherited jointly by our two daughters and my sister-in-law’s son.

From September of 2014 through June of 2017, we were also landlords, renting out our current home while we marked time until I retired and we moved back to Kentucky. We made a very slight profit, roughly $2,200 a year, doing that, but it wasn’t the kind of experience that makes me want to be a landlord for real profit.
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Bidenflation!

We need Gerald Ford’s “Whip Inflation Now” buttons!

On May 10th, we noted in Forbes telling us that the high inflation rate might not drop as quickly as some had forecast:

Inflation May Fall Slower Than Expected

by Chuck Jones | Monday, May 9, 2022 | 8:45 AM EDT

The rapid rise in inflation is causing the Federal Reserve to aggressively raise interest rates along with deleveraging its $8.9 trillion balance sheet. This has thrown stocks into correction territory or bear markets. Two of the major reasons for the increase in inflation have been the upsurge in demand coming out of the pandemic and supply chain issues.

April’s CPI estimate will be announced Wednesday before the stock markets open. Expectations are for the all items rate to drop from 8.5% to 8.1%. To hit 8.1% the month-to-month inflation rate will have to fall from 2.3% in January, 2.6% in February and 3.8% in March to no more than 1.25% to hit the expected number.

“Expectations,” were not met. Not only did the May inflation rate not drop to 8.1%, not only did it not even remain steady, but the rate rose slightly, to 8.6%.

Energy prices rose 32% on an annualized basis in March. In April Gasoline and Diesel prices were fairly flat, which will help lead to a lower inflation increase since they comprise about 4% of the inflation CPI Index and were up 48.2% year-over-year in March. However, natural gas prices increased in April, which will somewhat offset gasoline’s impact.

Well, guess what actually happened. From The Wall Street Journal:

U.S. Inflation Hits New Four-Decade High of 9.1%

Prices up broadly across the economy, with gasoline far outpacing other categories

by Gabriel T Rubin | Wednesday, July 13, 2022 | 12:08 PM EDT

U.S. consumer inflation rose last month from the year before at the highest rate in more than four decades, as prices climbed throughout the economy.

The consumer-price index rose 9.1% in the 12 months ended in June, the fastest pace since November 1981, the Labor Department said on Wednesday. The June increase also eclipsed May’s 8.6% rate, which led Federal Reserve officials to shift to a faster pace of benchmark interest-rate increases in its campaign to bring down inflation.

The report likely keeps the Fed on track to raise its benchmark interest rate by 0.75 percentage point at its meeting later this month. Stocks dropped and bond yields jumped following the inflation report.

Core prices, which exclude volatile food and energy components, increased by 5.9% in June from a year earlier, slightly less than May’s 6.0% gain, the Labor Department said.

There’s more at the original, but as I’ve asked before: why are “volatile food and energy components” excluded from the core inflation rate. Food and energy, in the form of gasoline and utility bills, have to be purchased every month, often several times a month. You see it when you fill your gasoline tank, and you see it when you go to the grocery store, and you see it when you get your electric and natural gas bills. Economics reporter for The New York Times noted that:

Gas prices rose 11.2% in June alone, and are up nearly 60% from a year earlier. Grocery prices were up 1% in June (a bit slower than in May) and were up 12.2% from a year earlier.

And:

One big reason “core” inflation accelerated in June: Rents rose 0.8% in June, the fastest one-month gain since 1986. “Owner’s equivalent rent,” the BLS’s (confusing) way of accounting for owner-occupied housing, is also picking up. Over the past three months, rents have risen at an annual rate of 8.2%. (Owner’s equivalent rent rising at 7.3% rate.) That’s especially worrying because rents don’t tend to turn around quickly.

You know what has happened? Virtually every single projection of the economic “experts,” or at least the great majority of them, has been wrong.

Back to the Journal:

Despite June’s inflation reading, economists point to recent developments that could subdue price pressures in the coming months.

Investor expectations of slowing economic growth world-wide have led to a decline in commodity prices in recent weeks, including for oil, copper, wheat and corn, after those prices rose sharply following the Russian invasion of Ukraine. Retailers have warned of the need to discount goods, especially apparel and home goods, that are out of sync with customer preferences as spending shifts to services and away from goods, and consumers spend down elevated savings.

“There’s a pretty serious recession fear affecting a broad range of asset prices,” said Laura Rosner-Warburton, senior economist at MacroPolicy Perspectives.

Retailers’ ability to shed unwanted inventory could test whether pricing is returning to prepandemic patterns, Ms. Rosner-Warburton said. Some retailers, such as Target, have already said they are planning big discounts. Others with robust warehouse capacity, such as Walmart Inc., could be more likely to hold on to their excess inventory, analysts say.

The first guesstimate of second quarter Gross Domestic Product figures is scheduled to be released on Thursday, July 28th, with a second, supposedly more refined guesstimate on THursday, August 25th. GDP decreased by 1.6% in the first quarter — the initial guesstimate was -1.4% — so if the figures show any negative reading at all, we will officially be in a recession. The second quarter already being over, there’s no time to change things.

I’m old enough to remember the last heavy inflation cycle, 1974-1982, and, after years of President Ford’s Whip Inflation Now buttons, and President Carter’s “malaise,” inflation was tamed the old-fashioned way: with a deep recession.

This isn’t 1982: inflation is not (yet) being accompanied by serious unemployment, but that’s in part due to people who should be working or looking for jobs still being paid, with phony money, not to work.

I’m not some fancy economics professional, and don’t have a PhD to my name. BUt it seems to me that things are going to get worse before they get better. The fer-mongers are attempting to scare us with dire warnings about the BA.5 Omicron sub-variant, and while those warnings are not being taken too seriously by the public in general, there’s at least the possibility that the warnings will be reasonably accurate. The Fed has been raising interest rates in an attempt to depress consumer demand, to fight inflation, but if they foul that up, such interest rate hikes could hasten a recession. Ukraine, the breadbasket of Europe, has seen its wheat crop and exports devastated by the war, and the economic restrictions put on Russian gas and oil, though they haven’t hurt Russia yet, could really mess things up in Europe, especially when winter arrives.

My wife is more worried about the economy than I am, and she’s pretty smart — smart enough to have married me, anyway! — but I am concerned enough. Perhaps it’s unfair to place all of the blame on President Biden, but hey, you know that he’ll take the credit for any good news; we might as well lay the responsibility for bad news at his stinky feet.

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The West are about out of non-military actions to take against Russia Economic sanctions are hurting democracies as much as Russia

The recent Supreme Court decisions in New York State Rifle & Pistol Association v Bruen and Dobbs v Jackson Women’s Health Organization have pushed almost all discussion of other issues off the front pages, but there is still that nasty little war going on in Ukraine. I have made my position clear: Russia’s invasion of Ukraine was very wrong, and almost everyone wants to see Ukraine win against the Russians. But I, at least, do not think it is worth risking what Major Kong called “nuclear combat, toe to toe with the Russkies.”

President Joe Biden and the leaders of the NATO nations have all said that Russia’s invasion is wrong, wrong, wrong, and that something ought to be done, but reality has a way of biting people in the gluteus maximus, and as the G-7 leaders meet in Berlin to decide just what to do, that reality is staring them dead in the eye. From The Wall Street Journal:

G-7 Summit Exposes West’s Challenges in Tackling Russia

Economic fallout is hampering further sanctions against Moscow as Ukraine demands more weapons to halt the Russian advance

By Bojan Pancevski | Tuesday, June 28, 2022 | 9:31 AM EDT

The original picture caption is: “G-7 leaders displayed some unity during their summit as they pledged their unwavering support to Ukraine.
Photo: Jonathan Ernst/Reuters.” Click to enlarge.

BERLIN—The Group of Seven rich democracies ended their summit with an agreement to discuss a batch of new sanctions against Russia, but the gathering underlined the limits of using economic tools to punish Russia four months after its invasion of Ukraine.

While weapons deliveries have made an immediate difference on the battlefield and Ukraine has been clamoring for more equipment to repel Moscow’s forces, sanctions have proven slow to take effect, some of them have backfired against the West, and new ones have so far been too complex to deploy quickly.

G-7 leaders displayed some unity during their three-day summit in the German Alps as they pledged their unwavering support to Ukraine, with no sign of dissent on public display. Yet Kyiv and some Western experts said the Russian advance could only be halted in the short term with more heavy weapons.

The unprecedented sanctions against Russia implemented by the G-7 and other nations—targeting Moscow’s economy, energy exports and central-bank reserves—have caused global market volatility and raised energy costs.

Now high inflation, slowing growth, and the specter of energy shortages in Europe this winter are damping the West’s appetite for tougher sanctions against Moscow.

The photo caption originally said that the G-7 leaders “pledged their unwavering support to Ukraine,” but, of course, that support is wavering, because the sanctions imposed so far are hurting their own people. The only thing I see in the photo is further evidence that British Prime Minister Boris Johnson still doesn’t know how to brush his hair. Continue reading →

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An economist actually admits that he was wrong It's not as though we didn't know this already

“I was wrong” is not something you expect to hear from an economist. When they are wrong, economists are far more likely to push the reason for them being wrong onto things totally unforeseeable, or Donald Trump, or bad data coming from outside sources. Well, last Thursday, an economist admitted that he, and others, got things way, way wrong!

What economists like me got wrong about inflation

Predicting an end to inflation now comes down to three factors: the pandemic, Russia’s war in Ukraine, and decisions by the Federal Reserve.

by Mark Zandi | Thursday, June 23, 2022

If you are like most Americans, your number-one financial problem these days is runaway inflation. You’re desperate to know when inflation will peak, and when it will be back down to a level you can live with.

The economic pain and suffering caused by more than a year of spiking in inflation — which has dramatically raised prices on everyday goods and services — has been tough to bear. The typical family must shell out $460 more a month to buy the same items and services they bought a year ago — a huge bite out of that family’s $70,000 in annual income. For lower-income households living paycheck to paycheck, this is unmanageable.

Prices are up a lot for almost everything, but most disconcerting are the big price increases for basic staples. The nationwide cost of gasoline has soared to a record near $5 per gallon, nearly all items on grocery store shelves have suddenly become much more expensive, and rents are increasing at a double-digit pace.

I’ll admit it: it was so gratifying to see the “We were wrong” subtitle that I just had to screen capture it!

Many of us have never seen this kind of inflation before, making it especially difficult to fathom. The last time inflation was so high was two generations ago when Ronald Reagan was president. And it comes on the heels of more than a decade of inflation so low that the Federal Reserve, whose job it is to manage inflation, worried it was too low for the economy’s own good.

Also irksome is how wrong the Fed, the Biden administration, and economists, including me, were in thinking that the high inflation would quickly recede. It hasn’t.

I’m old enough that I have seen inflation this high, and much higher, from the last year under Gerald Ford, — and yes, I remember President Ford’s “Whip Inflation Now” buttons — all through Jimmy Carter’s abysmal presidency, and into the first year of the Reagan Administration. I also remember what finally did ‘whip’ inflation: a deep recession in 1981 and 1982.

Mr Zandi continued to blame the COVID-19 panicdemic, and he’s right, but he’s also wrong. It was the response by governments, in the United States and around the world, to the virus that fried the economy. He blames workers continuing to stay home, having dropped out of the economy because they are afraid of the virus, but that fear was driven by governments’ messages of panic. Even now the message is being spread, at least by the media, that there are new sub-variants of the Xi Omicron variant, which “appear to escape antibody responses among both people who had previous Covid-19 infection and those who have been fully vaccinated and boosted.” That, coupled with the unprecedented government largess with borrowed money, have worked to keep people who should be working out of the job market. It isn’t as though serious inflation wasn’t predicted due to the government borrowing so much money! Production and supply chain disruptions caused by people not being on the job, and they are not on the job because the government has enabled them to survive without working, has to lead to inflation: they have money to spend, but fewer things on which to spend it, which drives up prices; the laws of supply and demand are not subject to government revision!

Naturally, Vladimir Putin has to be blamed, for invading Ukraine. The European Union decided to stop buying oil from Russia, which meant that they had to buy it elsewhere, putting a large increase in demand on the remaining supply. Despite the pleas of the global warming climate change emergency activists, people need fossil fuels now, to the point where very, very green Germany is going to reopen coal fired power plants to meet electricity demands.

Of course, Europe also needs natural gas, so the energy companies have found a fig leaf of cover to keep buying gas from Vladimir Vladimirovich! Soviet Russian troops in Ukraine is far less important than keeping the lights on in Europe! Remember: we told you that even before the invasion.

Also see: William Teach: Biden Minions To Travel Around Country Telling People What Biden’s Doing On Inflation

Mr Zandi, chief economist of Moody’s Analytics, continues to tell readers who the high prices for oil are so pernicious in the economy, but somehow, some way, he missed the fact that the price of oil is not that high. What really happened is that the price of oil came down pretty dramatically, as oil producers, Russia especially, dumped a lot of oil onto the market, which brought prices down dramatically. This persisted for several years, resulting in the new, lower costs for oil being priced into the market, and when prices shot back up, quickly, it produced a shock in the economy.

In 1980, the average price of 87 octane regular gasoline in the United States was $1.19 per gallon. Using this inflation calculator, gasoline should have cost $3.74 per gallon in 2020, but it was $2.17 per gallon, and had, on April 27, 2020, dipped to $1.77.

The same inflation calculator puts that 1980 price at $4.22 per gallon now, but that includes the inflation caused by oil price increases itself, so is of somewhat limited value. Nevertheless, regular gasoline prices, while somewhat higher than $4.22 per gallon right now, are not extraordinarily higher; they’re still in the $4.00 to $5.00 range, albeit higher in that range. At the station closest to me, regular gasoline id $4.56 per gallon, having come down from $4.80 a couple of weeks ago.

Mr Zandi, having admitted that he, and many others, were wrong, now gives us a new projection:

  1. if the panicdemic pandemic continues to “wind down”; and
  2. if “the worst of its economic fallout” from the invasion of Ukraine is already at hand; and
  3. if the Federal Reserve “successfully calibrate(s) monetary policy”;
  4. then “the odds are good that inflation is peaking and soon will moderate to a level we can be comfortable with.”

So, what does all of that mean? It means that governments have to abandon their idiotic responses to COVID-19, and let us just live with it, which is what most of us in the United States have already done. I did notice that, in the Tour de Suisse bike race, the Swiss had abandoned the face masks that I had seen in the Giro d’Italia. The riders don’t wear masks while competing, of course, but previously everyone was masking up at the celebrations at the ends of each stage.[1]These European bike races are our vicarious vacations, enjoying the scenery even if we can’t be there. The Tour of Norway was particularly spectacular.

It means that, sorry to say it, Russia must carry on and win its war against Ukraine in some acceptable fashion, without the United States and NATO doing something to intervene more thoroughly and prolong, and perhaps intensify, the war. Russian oil and natural gas must come to back to the market and the ‘normal’ order of things be restored.

And it means that the Federal Reserve has to get everything right. Anyone here want to bet €10 on that?

Inflation will be whipped the same way it was in 1982, by a significant recession. The economy already contracted 1.4% in the first quarter of this year; if it contracts again in the second quarter, which ends this month, we will officially be in a recession . . . again.

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↑1 These European bike races are our vicarious vacations, enjoying the scenery even if we can’t be there. The Tour of Norway was particularly spectacular.
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Pennsylvania Democrats always double down on policies that have failed in the past

Jennifer Stefano, from her Commonwealth Foundation biography page. Click to enlarge.

I will admit to some surprise that The Philadelphia Inquirer gave OpEd space to Jennifer Stefano, the executive vice president of the Commonwealth Foundation and a fellow at the Independent Women’s Forum. After all, Miss Stefano and the Commonwealth Foundation support “transforming free-market ideas into actionable public policies, we’re ensuring all people can flourish.”

Good luck taxing the rich when they’re gone

Pennsylvanians are moving to red states in search of smaller government, school choice, and lower taxes, writes Jennifer Stefano.

by Jennifer Stefano | Monday, June 13, 2022

Widespread shortages. Economic tumult. Disappearing businesses. When Ayn Rand released her magnum opus, Atlas Shrugged, in 1957, her critics considered it a work of fiction. She did not.

Her art is now imitating life in Pennsylvania. Fiction or not, Rand was prescient.

She predicted a world where government and “looters” (as she called them) exploited producers. A mysterious man named John Galt gets those business owners and workers to leave and recreate a free and fair society elsewhere.

In Pennsylvania, leaders like Gov. Tom Wolf and Philadelphia Mayor Jim Kenney demonize financially successful individuals, with promises that if the all-powerful government bureaucracy could just take more of their money, our problems would be solved. Wolf, Kenney, and their supporters operate under the misguided belief that bigger government will heal the Earth, defeat racism, and end poverty.

Worthy goals, wrong solutions — and Pennsylvanians know it. While some will wait for November to register their discontent at the ballot box, many are already voting with their feet.

Honestly, I wish I could reproduce the entire thing, but you can read it for yourself if you follow the embedded link. Alas! in my search to see if it had been published elsewhere, I could not find it, and the Inquirer’s articles are hidden behind a paywall; I pay for a subscription so that you don’t have to! However, the inquirer does allow people a few free articles a month, so if you haven’t followed too manty of my links, you might be able to read the whole thing.

Miss Stefano continues to document for us the strong net emigration from the Keystone State, and notes to where Pennsylvanians have been moving, Texas, Arizona and, especially, Florida, all states with lower state taxes and more business-friendly laws and regulations.

It is a familiar story for Philadelphia, where the nearly century-long run of one-party rule and unrealistic policies has sent people fleeing to the suburbs. Now it’s driving them into the waiting arms of Florida Gov. Ron DeSantis — and the rest of Pennsylvania is following.

Miss Stefano’s points are a bit too economic specific, not that they are not valid, but such ignores the rest of Philadelphia’s horrible mismanagement, as made plainly obvious by the city’s homicide rate. As of 11:59 PM EDT on Sunday, June 12th, 227 Philadelphians had been sent untimely to their eternal rewards, and if the South Street shootings made for big headlines, only three of those victims, at least one the criminal who shot the first bullets, actually died. In the week since then, nine more people were butchered in the city’s mean streets.

A poll by the Pew Charitable Trust found that 70% of Philadelphians believe that public safety is the most important issue facing the city, and also noted that in the very diverse overall, but internally highly segregated, black and Hispanic residents felt unsafe at significantly higher rates than whites.

The Inquirer’s Editorial Board was appalled, though seemingly more appalled that whites didn’t feel as unsafe as others:

What does it mean to be a segregated city in a gun violence crisis? According to the Controller’s Office’s gun violence mapping toll, the zip codes of Rittenhouse Square and Chestnut Hill, where about 70% of the population is white, haven’t experienced a fatal shooting since before 2015. Contrast that with nearly 200 fatal shootings in North Philadelphia-Strawberry Mansion, where more than 90% of the population is Black, or nearly 240 in the Kensington-Port Richmond area, with a Hispanic population of 50%.

From The Philadelphia Inquirer, August 12, 2021. Click to enlarge..

Given that white Americans are, in general, wealthier than black and Hispanic citizens, white Philadelphians have the greater ability to head for the Sunshine State. What that means as far as emigration is concerned, because white Philadelphians are simply safer, in general, than black or Hispanic residents, needed to be further explored.

We do know, however, that the white population of the city has dropped precipitously.

It’s easy to see why. Florida lawmakers have spent the last 22 years slashing government spending, zeroing out the income tax, lowering others, creating a vibrant school choice model with state education dollars, and fostering a business-friendly climate. . . . .

The key to righting the ship in Pennsylvania is simple and should be bipartisan. As the Commonwealth Foundation’s poll shows, a majority of voters across parties want what Florida has: low taxes, less government spending, school choice, and jobs and opportunity for themselves and their children.

The solution offered by Wolf and Kenney? Increase property taxes. Let crime run rampant. Stifle any opportunity to foster an education landscape that puts parents in the driver’s seat. Push endlessly for tax hikes against middle-to-upper-income earners.

It’s simple: Philadelphia is ruled by Democrats, has been for three generations, and Governor Wolf’s and Mayor Kenney’s plans fall right in line with standard Democratic Party tropes.

Going after people with money has become the one solution that unites Democrats. It’s a populist cause with devastating results. As Rand foretold, there will always be a Ron DeSantis (or John Galt) creating a place where all people can flourish. When wealthy people leave, those of us without the means or opportunity to follow are left behind. That means fewer tax dollars for government programs, fewer jobs, and less opportunity.

The wealthy should pay taxes just like everyone else. But good luck getting the money when they’re already gone.

One thing has become painfully clear: Democratic policies simply do not work. Conservatives have been telling the left that for decades, but the response of the left has always been to claim that the only problems are that they just didn’t go far enough; Democrats always double down.

I stated that I was surprised that the Inquirer gave Miss Stefano the OpEd space, but, on the front page of the newspaper’s website, at least as of 7:45 PM EDT on Monday, June 13th, immediately below Miss Stefano’s article was another entitled “Too much property tax relief will put city schools at risk“. The Inquirer never misses an opportunity to advocate for the policies which have failed in the past.

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Sanctions against Russia go up in gas

It seems that the Europeans, who are angry, angry, angry! at Vladimir Vladimirovich Putin aren’t angry enough to do without Russian natural gas. From The Washington Post:

Europe accepts Putin’s demands on gas payments to avoid more shut-offs

By Chico Harlan and Stefano Pitrelli | Tuesday, May 24, 2022 | 1:22 PM EDT

ROME — European energy companies appear to have bent to Russian President Vladimir Putin’s demand that they purchase natural gas using an elaborate new payment system, a concession that avoids more gas shut-offs and also gives Putin a public relations victory while continuing to fund his war effort in Ukraine.

The system, which involves the creation of two accounts at Gazprombank, enables Europe to say it is technically paying for natural gas in euros, while Russia can say it is receiving payment in rubles — a requirement Putin imposed on “unfriendly” nations.

Putin’s insistence on rubles may be more about forcing European countries to scramble at his behest than about shoring up his country’s currency, some economists and energy experts suspect. European Union countries have been touchy about the notion they might violate their sanctions on Russia, and questions about the arrangement tested European unity, leading to weeks of chaos and contradictory guidance from Brussels. It also got countries talking about how much they still need Russian gas, even as they debate a Russian oil embargo.

Well, of course they need Russian gas! And they’ll continue to need Russian gas, especially as worsening economic conditions force reductions in investments on alternative energy sources. In the end, Mr Putin has them in a place in which their hearts and minds will follow.

But that also means sending money to Russia even as they condemn the Kremlin-launched war, sanction oligarchs and supply weapons to Ukraine.

Russia had already used strict capital controls and a massive interest rate hike to stabilize the ruble. With Europe now signaling that it will use the payment system as bills come due this week, the currency is strengthening all the more.

The system set up is a face-saving one, but it really doesn’t save a lot of face, not to anyone who has even a remote understanding of what is being done. The Europeans will pay their bills in euros, not the rubles President Putin had demanded, and then a special account at Газпромбанк will take the euros and convert them to rubles.

On February 24, 2022, the White House announced severe sanctions against Russian banks:

Today, the United States, along with Allies and partners, is imposing severe and immediate economic costs on Russia in response to Putin’s war of choice against Ukraine. Today’s actions include sweeping financial sanctions and stringent export controls that will have profound impact on Russia’s economy, financial system, and access to cutting-edge technology. The sanctions measures impose severe costs on Russia’s largest financial institutions and will further isolate Russia from the global financial system. With today’s financial sanctions, we have now targeted all ten of Russia’s largest financial institutions, including the imposition of full blocking and correspondent and payable-through account sanctions, and debt and equity restrictions, on institutions holding nearly 80% of Russian banking sector assets. The unprecedented export control measures will cut off more than half of Russia’s high-tech imports, restricting Russia’s access to vital technological inputs, atrophying its industrial base, and undercutting Russia’s strategic ambitions to exert influence on the world stage. The impact of these measures will be significantly magnified due to historical multilateral cooperation with a wide range of Allies and partners who are mirroring our actions, inhibiting Putin’s ambition to diversify Russia’s brittle, one-dimensional economy. The scale of Putin’s aggression and the threat it poses to the international order require a resolute response, and we will continue imposing severe costs if he does not change course.

It appears, however, that “full blocking and correspondent and payable-through account sanctions” are somehow less important when it comes to Europe’s need for natural gas!

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I don’t want to be an [insert slang term for the rectum here], but sometimes it is necessary to be an [insert slang term for the rectum here], for the good of our society and of ourselves.

William Teach, who graciously pinch hits for me on the days I cannot attend to my poor site, noted:

Hot Take: Pro-Life Republicans Want Illegal Alien Children At Border To Die

by William Teach | Saturday, May 14, 2022 | 7:00 AM EDT

This is one of the reasons it’s really just about impossible to have conversations with the hardcore leftists: they take a small conversation and dial it up to 11, as we see from this Rolling Stone piece:

‘Pro-Life’ Conservatives Are Mad the Government Isn’t Letting Migrant Infants Starve to Death

William Vaillancourt | Friday, May 13, 2022 | 2:08 PM

There’s a baby formula shortage in the United States. Republican lawmakers and conservative media members are taking frustration out on immigrants.

Fox News hosts have spent the past 24 hours raising hell over immigrant babies at the U.S.-Mexico border receiving formula, arguing that it should instead be distributed to Americans first. “[For] American families there’s a shortage, but if you’re a migrant, don’t worry because Uncle Sam has a stash of that,” Fox & Friends host Steve Doocy said Friday morning.

There’s more at Mr Teach’s original.

No, Republicans do not want illegal immigrant babies to starve; we want them to thrive, but we want then to thrive in Mexico!

If the illegals know that there’s food, including baby formula, waiting for them, north of the border, they will try to come north of the border. If they are made aware that there is no food, and no baby formula, waiting for then north of the border, they won’t cross the border.

We put cheese in mousetraps to lure the mouses[1]Yes, I know that the plural of mouse is mice, but mouses is a Picoism. into the traps; set a mousetrap without bait, and mice won’t get trapped in it. The same logic applies to humans; if there’s no food awaiting them, they won’t show up!

I’ve said it before: to be a conservative, you have to be willing to be an [insert slang term for the rectum here], because being a Nice Guy™ simply brings about the bad behavior you want to prevent. That’s why George Soros-sponsored prosecutors like Larry Krasner generate an increase in crime, because in the course of being a Nice Guy™ and not locking up the bad guys, they enable the bad guys.

I don’t want to be an [insert slang term for the rectum here], but sometimes it is necessary to be an [insert slang term for the rectum here], for the good of our society, and of ourselves.

References

References
↑1 Yes, I know that the plural of mouse is mice, but mouses is a Picoism.
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Bidenomics: you are poorer in real terms, and your retirement plan is worth less Are you better off today than two years ago?

Due to taking Staff Sergeant Pico to her reassigned Army Reserve unit in advance of her deployment to Kuwait, Mrs Pico and I spent a few days in William Teach’s home state of North Carolina. When we fueled up in Kentucky, last Tuesday, before leaving, gasoline was $3.779. Naturally, I noticed that gasoline prices were higher in the states through which we traveled, West Virginia, Virginia and North Carolina, but not being familiar with fuel taxes in those great states, I didn’t pay very much attention.

Until yesterday, that is, as gasoline prices are now around $4.299 back in the Bluegrass State! Continue reading →

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A “solution” from a leftist stuck in 1930s thinking

When I spotted this article on my feed, I went to the New York Magazine original, because I prefer to cite from the original. Alas! the original is hidden behind a paywall, but it doesn’t matter, since MSN is providing it for free!

The Democratic Party Is Wasting Its Grassroots Energy

Opinion by Sam Adler-Bell | Sunday, April 24, 2022

Sam Adler-Bell, from his Twitter biography.

When I was young, my activist friends and I would often speak of something we called the movement. “This will be good for the movement,” we’d say.” Or, “They do good movement work.” He was a “movement lawyer”; she, “an artist dedicated to the movement.” I assumed this expression referred to something real: international socialism, maybe, or the trade unionism. I wasn’t sure. Surely, I thought, there must be a movement out there to which we all belonged, and to whose future victory our meager efforts — as environmentalists, labor organizers, anti-war activists — were contributing. But that wasn’t so. Later, I realized the term was more like an incantation, the expression of a wish that all this various activism might one day coalesce into something worthy of the name. For the time being, “the movement” was a linguistic gesture with no referent, a half-ironic shibboleth with which we signaled our belonging and our willingness to nurture each other’s precious illusions and beliefs. Playfully we toasted “to the movement,” unsure whether our cheeks reddened out of shame at our cynicism or our sincerity.

I’m reminded of these episodes when I contemplate the sorry state of the Democratic Party. No doubt, the Democrats’ gruesome midterm prospects are, as the social scientists say, overdetermined. Midterms tend to punish the president’s party anyway, and basically every other input is bad: Biden is unpopular, inflation soars, and Putin’s war has pushed food and fuel prices even higher. It’s a bad hand, and none of the plausible last-ditch, Manchin-approved policy interventions or executive orders seem like aces.

But surveying the landscape from a few hundred feet higher, another striking deficit looms into view: There appears almost no grassroots energy or urgency of any kind on the Democratic side. After four years of fever-pitched marching and movement-building by anti-Trump resistors, antifascists, Democratic Socialists, and Black Lives Matter militants, the sudden quiet from the country’s left flank has been deafening. Where, I find myself asking, is the movement?

By contrast, the conservative grassroots are ablaze. The parents, pundits, and propagandists behind the “critical race theory” crackdown, and now, the moral panic over LGBTQ educators, have been startlingly successful — not only at creating media spectacles, but at recruiting activists, electing school board members, and passing laws. Anti-abortion measures, meanwhile, sweep the country in anticipation of a possible repeal of Roe v. Wade. And, all along, one-term president Trump has defied political gravity, attracting crowds to his rallies and playing de facto party boss from his spray-tan Tammany Hall in Palm Beach. The right, in other words, is on the march. The left is nonexistent.

Could it possibly be that the left had nothing other than hatred for Donald Trump? Their policy was never more than Get Trump, to the point that it devolved into Trump Derangement Syndrome.

A couple paragraphs further down:

Democratic efforts to capture the energies of the 2020 BLM uprisings were similarly demoralizing for all involved. Mayors made fitful, largely self-defeating gestures at constraining their police forces, while party leaders gave a pathetic half-hug to the movement and tip-toed around its politically inconvenient slogan. The abolitionist critique — that the problem is not merely police departments, but a social order that requires them — was then metabolized by elite liberalism into a surfeit of yard signs, nonprofit donations, and various Robin DiAngeloisms of the board room. (Not to mention a $6 million house for a few of the BLM movement’s most savvy self-promoters.)

While it’s true that I concentrate most heavily on Philadelphia, 2021, the year after the evil reich-wing President Trump left office, and as all sweetness-and-light Joe Biden moved into the White House, the homicide rates skyrocketed, setting new records in Philly and jumping dramatically in other major cities, cities which have been controlled by the Democrats for decades. Philadelphia’s last Republican mayor left office when Harry Truman was President! The effects of the ‘defund the police’ attempts were huge increases in violent crime. While newspapers like The New York Times and The Philadelphia Inquirer kept their reporting on such to a minimum, the more visually oriented television news media put the stories in front of viewers, and in most places residents get their news from television, not the paper.

Mr Adler-Bell’s seeming throw-away line that the problem is “a social order that requires” police departments is wholly naïve”: he seems to think if there are no police and no laws, everything will be peaches but the cream, that there will be no violence and no theft.

And the trouble is, at the moment, (when it comes to movement mobilization) the right is doing it better. Movements of the right are reaching deeper into communities, finding them in the places where they already gather, and strengthening the solidarity they already feel for one another — in many cases, channeling it toward cruelty. As Schlozman told me, “the great rediscovery” of people like Christopher Rufo and Ron DeSantis “is that parents know other parents, and right-wing parents know other right-wing parents, and they can talk to each other, and that is a great reservoir of connection to be politicized.”

Here’s where Mr Adler-Bell gets it way, way wrong. What he forgets is that parents are almost exclusively heterosexual, and while some are sympathetic to the homosexual rights movement, and even transgenderism, they almost exclusively support it for other people. Homosexuality or transgenderism is not something normal parents wish on their own children, because those things are prescriptions for a difficult life. Those with gender dysphoria are looking ahead to unnatural hormone treatments and surgical intervention which produces only a simulacrum of the opposite sex; it doesn’t turn males into real women, nor females into real men. Those who are homosexual are looking ahead to more difficulty in finding long-term mates, and the traditional expectations of middle-class life, a home with children in a suburban home just appear alien to many of them.

Then you get people like Will Thomas, the biologically male swimmer who has decided that he’s a woman named ‘Lia,’ going out and dominating women’s collegiate swimming, and demonstrating for the public at large to see that no, he isn’t really a woman. Even for very liberal parents, there may be a lot of support for Mr Thomas’ case, but it’s not something that they want for their own children!

The civic bonds on which Trumpism is built are often the inheritance of past injustice (as Gabriel Winant once provocatively put it, “Whiteness itself is a kind of inchoate associational gel …”), but they are real. And while the right builds a movement, the Democrats attempt to call one into being — by giving more and more money to insular activist NGOs that speak an alienating language to people in places where they do not frequent, among people they do not already know.

The Philadelphia Inquirer, in publisher Lisa Hughes’ ‘ant-racist’ mode, has tamped down on reporting about the violence in the city, but the public know about it anyway. When Mr Adler-Bell complains about “whiteness”, he’s forgetting one important thing: white liberals are very much part of the white community, and in some of our very liberal but nevertheless internally racially segregated cities, those white liberals can see, just as well as we evil conservatives that much of the crime and violence in the cities is not all that big a problem in the white areas. Even the Inquirer has said that the key to reducing violence in the city is greater racial integration. “Whiteness,” it seems, has an actual value

The alternative — and you’ll be just shocked to hear me say this — is the only one that has ever worked. That is, the labor movement: a movement of the left that mobilizes and draws us together on the basis of our most basic associations and material interests. As Tammi and Marvin once put it, “Ain’t nothing like the real thing.”

Here Mr Adler-Bell again misses the mark. The unionization movement has long been in decline in this country, because the nature of work has changed. We are, sad to say, no longer a nation of large industrial production, but one of financial, information technology and consumer service workers. It takes a whole day’s training to replace a clerk at Seven-Eleven, not the months or even years of training in some industrial jobs. Automobile companies, for example, no longer need trained welders, but people who can run the computers which run the welding robots.

The response to COVID-19 has exacerbated it: people working from home are difficult to unionize because they are largely setting their own working conditions.

But there’s something much more subtle happening that Mr Adler-Bell has missed. Retirement plans have gone from the defined pension benefits ideas — and I personally know of people who had really great company pension plans which all fell apart when the Pennsylvania steel industry collapsed — to individual contribution with company match 401(k) plans. 401(k) plans are great: you can take them with you if you change jobs, rolling them over to your new company’s plan, rolling them over into an individual retirement account, or sometimes just leaving them with your old company’s plan. But the key factor is that most of them make money by investing your retirement funds into stocks and bonds. All of a sudden, employers are no longer the enemy, but a company workers want to see prosper, because there’s no cutting off your own nose quite like wishing failure on a company in which you are invested! Employees and companies are no longer enemies, but partners.

401(k) plans have made us all capitalists!

Mr Adler-Bell does not like that at all! His writing “the Marxist in me” tells us that he is at least sympathetic with socialist goals, if it isn’t quite an admission that he is an out-and-out socialist, but 401(k) plans and frequent job switching and remote work are things which contribute to individualism among people, not socialism. I may have discussed my 401(k) investment options with co-workers, but my choices are mine and their choices are theirs. If my investments are out-performing one of my friends, I would tell him about it, and leave the choice up to him about whether to change his investment strategy, but those would still be individual choices, not some sort of union/worker solidarity.

Mr Adler-Bell seems stuck in the 1930s, when Walter Duranty was sending us glowing propaganda reports about that workers’ paradise, the Soviet Union. He dreams of a labor movement that never was, based on a vision of a society that doesn’t exist.