The View from Right Field

Illinois Had a Budget Stalemate, Too: With Democratic Supermajorities*

Last October, Governor J.B. Pritzker was campaigning for re-election on his stewardship of Illinois and its budget.  Things were so good he was sending out checks from the state, just in time for the election, to people who had paid property taxes. 

But, of course, things were not that good.  Illinois’s budget was balanced not because Governor Pritzker was doing a good job, but because the state was getting so much Covid relief money from the federal government.  It should have been obvious last fall that the money from the federal government was ending.  And, with the stock market going down last year, it should have been obvious, to anybody who was paying attention, that Illinois would get a lot less money from taxes on capital gains this year.  With stock prices down, the gains would be less if people sold, and many people would decide to wait for the market to go back up before selling, which would mean there were fewer gains to tax in 2022.

How to Know Economists Have a Sense of Humor – or of the Absurd

Actually, I first heard the answer to the question, “How do you know economists have a sense of humor?” from the EconTalker, Russ Roberts.  I don’t know if he came up with it, but since I heard it first from him, I will credit him with it (at least purposes of this post).^1,2

But I am going to change the question a little, though the answer is still the same.  Here is my phrasing: “How do you know economists have a sense of the absurd?”

The answer to both ways of phrasing the question is the same: They use decimal points. 

Ukraine and the Failure of Sanctions – One More Time

I’m sorry to keep harping on the failure of sanctions, but it’s important because they are not working, or at least not doing enough, in Russia’s war against Ukraine.  As I mentioned here, there were two articles in the Financial Times last week about how sanctions against Russia are being violated and how they are aren’t getting the job done. 

There was another article in yesterday’s FT¹, this one about the “ghost trade” in dual-use goods.  Dual-use goods are products that can be used for civilian purposes and for military or intelligence purposes.  The ghost trade is when goods are ordered by a company in one country and never show up there.  What is happening, among other things, is that the dual-use goods are ordered by companies in places such as Kazakhstan, Kyrgyzstan, and Georgia and are shipped, from EU countries, through Russia to get to their destination,  But the goods are never arriving.  They are disappearing.

The Feel-Good Purpose of Sanctions

A couple of weeks ago, I wrote a post asking: “Can Even More Sanctions Beat Russia?”  My answer was no.  More evidence to support this view came last week in both the Financial Times and The Wall Street Journal. 

The FT had two articles.  One was about a Russian spy network that is buying machine tools and microchips Russia needs to maintain its military-industrial complex.¹  While people from Washington are traveling to western Europe to talk about tightening enforcement of sanctions, the point is the Russians are still able to get around them.

Marco Rubio Wants to Prohibit the Use of SNAP Money to Buy Pop and Dessert

Senator Marco Rubio (R, Fla.) wrote an Op-ed in yesterday’s Wall Street Journal, “No More Subsidies for Junk Food,” proposing a ban on the use of SNAP monies, i.e., food stamps, to buy soda (called “pop” where I’m from) and prepared desserts.¹  Senator Rubio claims this would promote healthier diets, reduce “food deserts” in low-income neighborhoods by encouraging stores to carry healthy foods, and reduce long-run medical expenses, a veritable policy three-for-one.

Of course, all this is assuming his idea would work.  But if SNAP funds can’t be used for pop and desserts, people could easily use SNAP money for other things and save their cash for what they really want.  Or they could buy SNAP-approved products and then trade them for pop and desserts.  They could even sell their excess SNAP money for cash, at a discount, of course, so they could buy the banned items.

Whose Drones Are Attacking the Kremlin and Why Can’t Russia Stop Them?

In a week of big news (for example, Matt Mervis made his major league debut with the Cubs yesterday), one of the more bizarre stories was the “attack” on the Kremlin by two drones.  The Russians blamed Ukraine, accusing them of trying to assassinate Vladimir Putin.

Whether is what actually happened or whether it was a Russian “false flag” operation or something else is completely unclear.¹  In any case, what I don’t understand is why the Russians would accuse Ukraine of flying these drones to Moscow.  If I were Vladimir Putin, I would be embarrassed if the Ukrainians could fly two drones all the way to the Kremlin.  Instead of trumpeting it to the world, I would be trying to hide the fact.  What does this say about Russia’s air defenses if two slow moving drones can get all the way to Moscow and crash into the Kremlin? 

The ComEd Four: Yet Another Political Corruption Conviction in Illinois.

Yesterday, the so-called ComEd Four were convicted.  The four included a former state legislator and long-time lobbyist who was a big friend of former Illinois House Speaker Michael Madigan, a couple of ComEd¹ executives, including a former CEO, and a lobbyist who worked for ComEd for 30 years.  The charges were basically bribery by ComEd.  Here is a description from the Chicago Tribune:

“The indictment alleged the four conspired to funnel $1.3 million in payments to ghost ‘subcontractors,’ largely through Doherty’s company, who were actually Madigan’s cronies.

The utility also hired a clouted law firm run by political operative Victor Reyes, distributed numerous college internships within Madigan’s 13th Ward fiefdom, and blatantly backed former McPier chief Juan Ochoa, the friend of a Madigan ally, for an $80,000-a-year seat on the utility’s board of directors, the indictment alleged.

Can Even More Sanctions Beat Russia?

The Financial Times reported on Tuesday that the United States is proposing to the other G7 countries that they replace the current sector-by-sector regime of sanctions against Russia with a ban on all exports to Russia except for a few exemptions.¹  The EU and Japan are pushing back, but they trade more with Russia, so this kind of a ban would cost them more than it would the United States.

The frustrating part of this proposal is that it’s just another attempt to try to beat Putin with sanctions.  Too many people in our government seem to think Russia can be defeated in Ukraine if we just impose one more set of sanctions, if we just limit a few more things we sell to Russia or cut back a little more on what we buy from Russia.  It seems so easy – and cheap. Just impose enough sanctions and poof, Russia loses.  Except it doesn’t work that way, and it certainly hasn’t stopped Vladimir Putin so far.

Biden Announces for Reelection; Trump Is Already Running. Sigh.

Joe Biden announced his reelection bid in a video released on Tuesday¹, saying “It’s time to finish the job.”  The snarky response would be: Well, it makes sense that you need more time.  Things take longer when you get old.  

Others have already announced their campaign for 2024.  Former President Trump may have been the first, announcing in November of last year, though I am not sure whether he is running for election in November, 2024 or he is still trying to get the “stolen” election of November of 2020 “corrected” so he can take over right now. 

The Air Force Wants to Get Rid of the A-10 Warthog – Again

The Wall Street Journal has a long article about the Defense Department’s effort to get rid of the A-10 Warthog in today’s paper.  The title of the article, “Why Is America Still Flying the A-10 Warthog, a Cold War Relic?,” pretty well tells the writer’s view.  But the story of the A-10 Warthog is more than just the Defense Department struggling to build the Air Force we need for the future against parochial members of Congress caring only about jobs in their states or districts. 

The Warthog has a specialized mission: providing close-in aerial support for ground troops.  And it has done a great job of it from the first Gulf War to Afghanistan.  But the Air Force says the A-10 doesn’t work on the modern battlefield.  Actually, though, the Air Force has been trying to get rid of the A-10 for years.  The Warthog is not a fancy plane.  Its top speed is 420 mph.  It is not “stealthy.”  And its main purpose is to support the Army, not a job that appeals to Air Force generals who like advanced bombers and supercharged fighter jets.

NATO: And Finland Makes 30*

Finland officially joined NATO on yesterday, becoming the 30th 31st* member of the alliance.  And yesterday, a Kremlin spokesman said that Finland’s membership was an “aggravation of the situation” and “an encroachment on Russia’s security.”¹  I suppose it is true that Finland’s membership did aggravate Vladimir Putin.  As for it encroaching Russia’s security, it might have done so if Russia’s security is defined as being able to invade any country it wants to.

Also, Russia’s Defense Minister, Sergei Shoigu, said that it was Finland’s membership was an “anti-Russian policy,”¹ which is actually 100% true.  There is no way Finland would have joined NATO if Russia had not renewed its invasion of Ukraine in February of last year.  Finland didn’t join NATO so it could attack Russia; Finland joined NATO so Russia wouldn’t attack it.  So, yes, it was an anti-Russia policy.  Or at least, an anti-Vladimir Putin policy.

If Russia wants to stops its neighbors from joining NATO because they are scared of Russia, maybe Russia should stop doing things that scare them.
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¹ Henry Foy and Anastasia Stognei, “Kremlin vows retaliation after Finland signs up to ‘anti-Russian’ Nato alliance,” Financial Times, April 5, 2023.
* Oops, 31st member.  I forgot about North Macedonia joining in 2020

Jack Ma’s Back. But the CCP Won.

On November 3, 2020, I was thinking that the most significant event that day might be the Chinese government’s decision to cancel the IPO of Jack Ma’s Ant Group Co., and not the U.S. presidential election.  Mr. Ma had given a speech in late October in which he very publicly criticized Chinese government regulators.  The speech did not go over well, and Ant Group’s IPO was cancelled, reportedly by President Xi Jinping himself.  In any case, Donald Trump fairly quickly put my original thought aside.  Still, the cancellation of Ant Group’s IPO was, and still is, a big deal.

The matter came up again last week when Jack Ma went to China to talk to a school in Hangzhou, the hometown of Alibaba (another of his companies), and it was announced that Alibaba Group Holding Ltd, the e-commerce empire Mr. Ma built up, was going to split up into six parts.  Articles talked about how Alibaba was getting too big to manage and how investors didn’t know how to value a company with so many unrelated businesses (not unlike the conglomerates of the 1970s and 1980s in the United States).  The articles said the smaller companies would be more nimble, and growth would be easier.  All of which may be true but is irrelevant.

We Need to Give Ukraine More. Now.

Joe Biden is doing a pretty decent job in Ukraine, but he could be doing better.  In fact, if we want Ukraine to prevail, we need to be doing better.  Americans are still supporting Ukraine – so far.  But how long will that last?  Americans lose interest.  We get tired, our attention lags, and we abandon our commitments.  So those of us who want Ukraine to prevail need to push to get it done now.

This is especially true with Donald Trump lurking in the background.  Who knows what he would do if he were elected again.  Or if some Republican gets nominated who tries to appeal to what he/she sees at the populism/isolationism of the Trumpian base.¹  Not to mention, how long will progressive Democrats support aid to Ukraine if we have a Republican president, instead of a Democrat?

Bank Bailouts: Once Is Precedent; Twice Is Tradition

If “once is precedent, twice is tradition,” then bank bailouts are now tradition – though they might have already been tradition if the 1980s bailout of the savings and loan industry constituted bank bailout number one.  In any case, we are definitely now in “tradition” territory when it comes to bank bailouts.  I know Joe Biden said what was done over the weekend was not a bailout, but President Biden says lots of things.  It may be true that the stockholders of Silicon Valley Bank and Signature Bank will not be bailed out, but:

• Any depositor who deposited more than $250,000 in SVB or Signature will be covered for their whole deposit, not just the first $250,000.  That’s a bailout.
• Anybody who owns stock in a bank whose stock might have tanked or might have even gone belly up but for the government’s actions over the weekend in bailing out depositors at SVB and Signature, is getting a bailout, too.

Break

I have some other stuff to do.  I'll be back about the Ides of March. 

“Getting mad at oil majors will not solve climate crisis”

This is a letter to the editor published in the Financial Times on today under the heading quoted above: 

“The title of your Big Read on energy ‘Big Oil: still profits before planet’ (February 11) was misleading.¹  Regardless of what environmentalists and elites may think, it is not the job of oil companies to solve climate change.

Climate change requires more than world leaders agreeing to a set of lofty ideals in Paris and then having businesses do all of the work for them.  It requires leaders to actually convince people that governments need to pass laws and adopt regulations to cut emissions.  Climate change isn’t going to be solved by getting mad at oil companies.  It’s going to be solved by adopting a carbon tax that will put the real cost of carbon emissions in the price of products.  Or establishing an emissions trading system, with a decreasing cap on total annual emissions, that guarantees emissions will be cut.

An Operation Warp Speed for Weapons and Ammunition?

Defense Secretary Lloyd Austin said, while in Brussels earlier this week, that the West hopes better training will help Ukrainian forces to use less ammunition and artillery in defending against Russia’s attacks.  Russia is already using up to four times as many artillery shells as Ukraine, but somehow we think better training is the answer for Ukraine.¹  This is silly.  Better training is always good, but why can’t we get ammunition and artillery to Ukraine? 

It has been obvious since May or June of last year, if not before, that Ukraine needed ammunition and lots of it.  If we didn’t have enough, why weren’t we entering into contracts with suppliers last summer, so they could open plants, buy machinery, and hire workers to produce more ammunition?  If President Biden didn’t realize it, why didn’t the Pentagon tell him?

Helping Ukraine. Defending Taiwan. Talk Is Cheap. Actually Doing It Costs Money.

If you support Ukraine in its war with Russia, if you think the United States needs to defend Taiwan’s right to choose if it unites with China, then you need to support more money for defense.  The Russian attack on Ukraine is a new kind of war.  Actually, it’s not a new kind of war, but it is a kind of war that we have not seen for a long time.  It is a war of attrition, which means it is a war of weapons, supplies, and ammunition.

We are rapidly using up our inventories of all kinds of weapons and supplies in supporting Ukraine.  If we are going to continue to support Ukraine, we are going to need more of these things.  Right away.  And if we support the right of Taiwan to decide its own fate, we need to get supplies of these things to them – right away.  Plus, we need to replenish our own supplies because who knows where else trouble might arise.  There are countries and groups that might think now is a good time to take advantage.

Chicago Is Electing a Mayor - And It’s Déjà Vu All Over Again

The headline on Sunday’s Chicago Tribune read: “Pension debt, property taxes and budget holes: Huge financial problems await next Chicago mayor, whoever wins.”  My question is: How is that different than the situation that faced Mayor Lightfoot when she was elected four years ago – or her predecessor when he was first elected twelve years ago. 

For that matter, does anybody think this headline won’t still be true when Chicago votes for mayor in 2027?  After all, when it comes to finances in Chicago, and Illinois, for that matter, it’s always, in the immortal words of Yogi Berra (or not), “Déjà vu all over again.”

Secret Documents. First Trump. Then Biden and Pence. Who’s Next?

Donald Trump kept confidential/secret documents from when he was president.  Joe Biden kept the same kind of documents from when he was vice president.  And so did Mike Pence.  (Not surprisingly, former President Trump was the most obstreperous about it, but that is true for pretty much everything.)

What I’m wondering is when we’re going to check on Barack Obama, George W. Bush, Dick Cheney, Bill Clinton, Al Gore, Dan Quayle, Jimmy Carter, and Walter Mondale.  For that matter, why should the fact that George H.W. Bush, Ronald Reagan, Gerald Ford, Nelson Rockefeller, Richard Nixon, and Spiro Agnew are dead make a difference?  Shouldn’t their papers/libraries/museums be checked, too?  (Well, I don’t suppose former Vice President Agnew has a library or museum.)

Other than obstreperousness and sloppiness, it might be interesting to figure out just how different former President Trump is on this issue.