US Shipbuilding and the Jones Act

Last month, I had the chance to sit down with 60 Minutes correspondent Lesley Stahl for a piece on the moribund state of US commercial shipbuilding. That story, “Turning the Ship Around,” aired last weekend, and having now seen it, I’d like to offer a few thoughts.

The segment opens with Stahl describing the US commercial shipbuilding industry as “nearly extinct.” The numbers back her up. As she points out, US shipyards produce around three ships per year. That’s less than what South Korean shipbuilder Hanwha produces in a month. But even that may be too charitable. Three is the US average over the last 25 years. This decade, US shipyards are on track to average roughly one per year.

But that’s just oceangoing cargo ships. Widening the aperture to include other vessel types does little to improve the picture. The most recent data show that the United States, the world’s second-largest manufacturing country, accounts for just 0.04 percent of global commercial shipbuilding output—good enough for 19th place. Over the past decade, the US has averaged 0.24 percent of global output. And it’s trending down.

South Korean firm Hanwha, however, says it will reverse the matter. According to the CEO of its Philly Shipyard, which the company purchased in 2024 for $100 million, the yard is set to transform into a 21st-century enterprise...

Read the rest here.

The UK is a Warning to the Rest of the World

HT Blog reader Kurt.

I had never heard of this guy before but found the arguments presented to be cogent and well backed by sources and statistics. 

What's Wrong with Chicago?

The word bankruptcy has been hanging over Chicago like a storm cloud about to burst. Mayor Brandon Johnson is the latest leader to attempt to close Chicago’s gaping fiscal gap: He proposed a $300 million property tax increase to partly fill Chicago’s $982 million projected budget deficit, only to be unanimously rejected by the City Council. The City Council narrowly passed a budget on Dec. 16, with far less in tax increases than the mayor had initially demanded.

The Windy City’s woes are the product of decades of fiscal profligacy and a cautionary tale to policymakers in every region and at every level of government: Retirement benefits are like free junk food to politicians — everyone loves them, and the bills don’t arrive until later. They can be ruinous for a city’s long-term fiscal health.

At the heart of Chicago’s deficit are decades of increasingly generous retirement benefits offered by Chicago’s leaders to more than 30,000 public employees, a politically powerful constituency. Today, a city employee retiring after 35 years with a final salary of $75,000 would receive combined pension and retiree health benefits of about $77,000.

The City government has failed to fund those pension promises fully and the bill has come due. Retirement benefits and debt service together made up 43 percent of Chicago’s budget in 2022, the highest rate of any U.S. city. Chicago spends more on debt and pensions than it does on the police and infrastructure, according to an analysis from the Illinois Policy Institute, a libertarian-leaning policy group. In other words, Chicago is paying for the past, not investing for the future.

Chicago’s pension actuary warned in a letter to the plan’s leadership last year that “the Fund is still at risk of potential insolvency if an economic recession or investment market downturn were to occur in the near term.” (He wrote it in boldface to get policymakers to take notice.)

Read the rest here.

Chicago is basically spending money like the Federal Government. This country is drowning in debt at every level of government and that is not sustainable. For most of the last quarter century the spending habits of our political leadership (from both parties) can be summed up as; "If you've got it, spend it. And if you don't have it, spend it anyways." A reckoning is coming, and it's a lot closer than it was ten or fifteen years ago.

Worth noting; the bond market is flashing warning signs. Despite two successive rate cuts by the Federal Reserve, interest rates on bonds, have been rising. Wall Street is getting nervous about all the red ink.

Why?

People sometimes ask why I'm generally so hostile to government. 

Read this.

(No "Trump will save the squirrels" commentary please. Dictatorship is not the answer to governmental overreach.)

San Francisco is Giving Free Booze to Homeless Alcoholics

Words fail.

New York City (what's wrong)

This is a really good video explaining what's wrong with New York from somebody who is obviously not hard right in their politics.

Why San Francisco Flushed $1.7 Million Down A Toilet They Couldn't Build

...Fifteen months after city officials were ready to throw a party in the Noe Valley Town Square to celebrate funding for a tiny bathroom with a toilet and sink, nothing but mulch remains in its place.

The toilet project broke down the minute taxpayers realized the city was planning an event to celebrate $1.7 million in state funds that local politicians had secured for the lone 150-square-foot structure. That’s enough to purchase a single-family home in San Francisco — with multiple bathrooms.

Even more confounding was the explanation that the tiny bathroom would take two to three years to install because of the city’s labyrinthine permitting and building process. City leaders quickly canceled their potty party, and Gov. Gavin Newsom of California took back the funds.

Read the rest here.

You know that you have lost it when even the New York Times is roasting your city for its dysfunctional moonbat government that can't build a single seater public relief station with a budget of more than a million and half and spends another half million on designer trash bins that run $12k a pop. (They decided not to go ahead with that one either.)

All these official 'fill in the blank' days...

I think may be getting a little out of hand. 

In Congress a Bipartisan Push to Rein in Big Tech

House lawmakers proposed a raft of bipartisan legislation aimed at reining in the country’s biggest tech companies, including a bill that seeks to make Amazon.com Inc. and other large corporations effectively split in two or shed their private-label products.

The bills, announced Friday, amount to the biggest congressional broadside yet on a handful of technology companies—including Alphabet Inc.’s Google, Apple Inc. and Facebook Inc. as well as Amazon —whose size and power have drawn growing scrutiny from lawmakers and regulators in the U.S. and Europe.

If the bills become law—a prospect that faces significant hurdles—they could substantially alter the most richly valued companies in America and reshape an industry that has extended its impact into nearly every facet of work and life.

One of the proposed measures, titled the Ending Platform Monopolies Act, seeks to require structural separation of Amazon and other big technology companies to break up their businesses. It would make it unlawful for a covered online platform to own a business that “utilizes the covered platform for the sale or provision of products or services” or that sells services as a condition for access to the platform. The platform company also couldn’t own businesses that create conflicts of interest, such as by creating the “incentive and ability” for the platform to advantage its own products over competitors.

A separate bill takes a different approach to target platforms’ self-preferencing. It would bar platforms from conduct that “advantages the covered platform operator’s own products, services, or lines of business over those of another business user,” or that excludes or disadvantages other businesses.

The proposed legislation would need to be passed by the Democratic-controlled House as well as the Senate, where it would likely also need substantial Republican support.

Each of the bills has both Republicans and Democrats signed onto it, with more expected to join, congressional aides said. Seven Republicans are backing the bills, with a different group of three signing on to each measure, according to a person familiar with the situation.

“Unregulated tech monopolies have too much power over our economy,” said Rep. David Cicilline (D., R.I.), the top Democrat on the House Antitrust Subcommittee. “They are in a unique position to pick winners and losers, destroy small businesses, raise prices on consumers, and put folks out of work. Our agenda will level the playing field.”

Rep. Ken Buck (R., Col.), the panel’s top Republican, said he supports the bill because it “breaks up Big Tech’s monopoly power to control what Americans see and say online, and fosters an online market that encourages innovation.”

Read the rest here.

Anti-trust laws have largely fallen into a coma over the last forty or so years and the new tech economy urgently needs some regulation. I haven't read any of these bills, but in principle I support doing something to check the dangerous level of power these monster companies now wield. The fact that both parties, that otherwise can't seem able to agree on what time their committees should take a bathroom break, seem to be moving in the same direction here, is encouraging. 

Daniel Turner: Goodbye, Washington DC.(Must read)

Mayor Bowser broke her contract with residents like me. So we’re leaving...

Read the rest here.
HT: MCJ

This is one of the best pieces I've read in a while.

Rescue bills hide huge tax breaks for the wealthy

...One provision tucked into the federal economic-rescue law increases the amount of deductions companies are permitted to take on the interest they pay on large quantities of debt. Only companies with at least $25 million in annual receipts can qualify for that break.

Another change lets people deduct even more of their businesses’ losses from any winnings they reaped in the stock market, sharply reducing what they owe in capital gains taxes. Only households earning at least $500,000 a year — the top 1 percent of American taxpayers — are eligible.

And yet another provision in last month’s rescue package allows companies to deduct losses in one year against profits that they earned years earlier. The tax break most likely won’t put any extra cash directly into the hands of companies hit by the current crisis for at least a year.

The bottom line is that, barely two years after congressional Republicans and President Trump lavished America’s wealthiest families and companies with a series of lucrative tax cuts, those same beneficiaries are now receiving a second helping.

Many of the tax benefits in the stimulus are “just shoveling money to rich people,” said Victor Fleischer, a tax law professor at the University of California, Irvine. While the 2017 tax-cut package was a bonanza for big companies and wealthy individuals, in order to keep the law’s overall costs down it  imposed a number of restrictions on who could take advantage of certain tax breaks and how much those taxpayers could reap.

Read the rest here.

Get ready for the recovery of the 1%

There were two important economic events on Thursday. The government reported that 6.6 million Americans filed for unemployment, an all-time record. And the Federal Reserve announced a new program to flood the economy and financial markets with $2.3 trillion in liquidity — including buying up junk bonds from debt-laden companies.

Which one moved the market? The Fed move, driving the Dow Jones Industrial Average up 500 points by midday.

The market jump, unemployment surge and Fed rescue efforts all converged to form a new split in the economy, between the asset-rich and the rest of America.

Much like the early days of the financial crisis recovery, the wealthy (or the top 10% who own more than 85% of the stocks and financial assets) were quickly saved by the Federal Reserve and Congress.

In 2009, the stock market jumped more than 50% from its low, thanks to the TARP program and other Fed and government support. It took the rest of American almost a decade to recover lost wages and their home values.

The diverging fortunes of the haves and have-nots led to a massive, post-crisis backlash against the wealthy. It gave rise to the Occupy Wall Street Movement, the Tea Party, anti-establishment politicians and a roaring debate over inequality.

Now, while the root cause of the crisis is vastly different, and no one is talking about greedy sub-prime bankers who brought the trouble on themselves, the coronavirus and response is likely to lead the country down a similar anti-elite path...

Read the rest here.

C.D.C. Officials Warn of Coronavirus Outbreaks in the U.S.

The coronavirus almost certainly will begin spreading in communities in the United States, and Americans should begin preparations now, officials at the Centers for Disease Control and Prevention said on Tuesday.

“It’s not so much of a question of if this will happen anymore but rather more of a question of exactly when this will happen,” said Dr. Nancy Messonnier, director of the National Center for Immunization and Respiratory Diseases, said in a new briefing.

The news caps weeks of fear that the coronavirus spreading from China may become a pandemic, disrupting the global economy and political landscape in ways that are difficult to forecast.

Iran, South Korea and Italy are now grappling with clusters of infection, even as the epidemic in China’s Hubei Province seems to be slowing.

The emergence of these new hubs underscored the lack of a coordinated global strategy to combat the coronavirus, which has infected nearly 80,000 people in 37 countries, causing at least 2,600 deaths.

Officials at the C.D.C. said they did not know whether spread of the disease to the United States would be mild or severe. But Americans should be ready for a significant disruption to their daily lives, she added.

“We are asking the American public to prepare for the expectation that this might be bad,” Dr. Messonnier said.

Read the rest here.

People are fleeing San Francisco

SAN FRANCISCO – Social media influencer Sarah Tripp and her husband, Robbie Tripp, moved to San Francisco in 2016 brimming with optimism.

“We thought, here’s a city full of opportunities and connections where you go to work hard and succeed,” says Tripp, 27, founder of the lifestyle blog Sassy Red Lipstick.

But after a year-long hunt for suitable housing in San Francisco only turned up “places for $1 million that looked like rundown shacks and needed a remodel,” the couple packed up and moved to Phoenix.

They went from paying San Francisco rents of $2,500 for a one-bedroom, one-bath apartment that was far from shopping and other amenities, to purchasing a newly constructed 3,000-square-foot, four-bedroom, four-bathroom home where they’ll raise their newly arrived baby boy.

“It was cool to be living near all those high-tech startups,” Tripp says of her time in the Bay Area. “But you quickly saw that if you weren’t part of that, you’d be pushed out. It’s just sad.”

For the better part of two decades, the Bay Area has been a magnet for newcomers lured by a modern-day technology Gold Rush. But increasingly only those who have struck it rich can afford to stay.

Once a bohemian mecca that welcomed the Beat poets and '60s hippies, San Francisco now lays claim to the most expensive housing in the West, with a median home price of $1.4 million. There's also $5 a gallon gas, private schools priced like universities and chic restaurants that cost nearly double the national average.

Earlier this year, the San Francisco Bay Area was second only to New York – and ahead of Los Angeles, Washington and Chicago – when it came to people leaving major U.S. cities. More than 28,190 departed in the second quarter of 2019, almost double 2017's rate, according to a regular Migration Report from real estate brokerage Redfin.

Read the rest here.

When local governments are run by greedy *bleeps*

The city of Dunedin, Florida, wants to foreclose on a private home because the owner, Jim Ficken, owes the city over $29,000 in fines. The crime for which he is threatened with home loss? Having his lawn grass be too tall (over 10 inches) for a period of eight weeks last summer. The city fined him $500 per day of violation, with no warning.

Ficken was out of town at the time, settling his mother's estate. Ficken hired a handyman to deal with his lawn while he tended to his dying mother and then to her estate, but in a cruel twist, the handyman also died during the Fickens' ordeal, leaving the lawn uncut.

Ficken is 69 years old and lives on a fixed income. He was unaware that he was racking up the daily fines, but cut his grass within two days of finally being informed by a city code inspector that there was a problem. In a sane world, Ficken's explanation for neglecting his lawn and the fact that he remedied the problem as soon as he learned of it, would seemingly resolve the issue. No harm, no fine.

But the Dunedin government is apparently not sane. Because Ficken was also cited for overly tall grass in 2015, the city—unbeknownst to Ficken—classified him as a "repeat violator." This classification doubled his daily fine from $250 to $500 and relieved the Code Enforcement Board of providing him notice. Because Ficken cannot afford the fines he didn't know he was accumulating, the city of Dunedin insists that it can now take his home to pay off his debt.

Read the rest here.


All of which reminds me of a stretch of old US Rt 301 that was a short cut for people driving south on I 95 and who wanted to cut over to I 75 heading towards south Florida. There were no less than four small towns that were infamous for their old fashioned speed traps. By which I am not referring to the honest cop parked on the side of the road with a radar gun looking for people going more than ten over the posted speed limit or driving like they were drunk. I am talking about towns with a population of maybe a thousand and a ten man police force solely dedicated to zero tolerance traffic enforcement on a stretch of highway, perhaps a couple of hundred feet, that happen to fall within their jurisdiction. People, especially those with out of state plates, were routinely pulled over for going 1 mph over the speed limit, which changed suddenly and without much warning.  It got so bad that AAA used to post giant billboard signs warning motorists of the danger ahead.

Eventually there was a formal investigation by a committee of the Florida state legislature over whether or not to strip these towns of their municipal charters. All of them were sanctioned and three were forced to disband their police departments.

California abandons $77 billion high-speed rail plan

SACRAMENTO, Calif. (AP) — California Gov. Gavin Newsom announced Tuesday he’s abandoning a plan to build a high-speed rail line between Los Angeles and San Francisco, a project with an estimated cost that has ballooned to $77 billion.

“Let’s be real,” Newsom said in his first State of the State address. “The current project, as planned, would cost too much and respectfully take too long. There’s been too little oversight and not enough transparency.”

The idea championed by Newsom’s predecessor, Jerry Brown, is years behind schedule. The latest estimate for completion is 2033.

Newsom, though, said he wants to finish construction that’s already under way on a segment of the high-speed train from Bakersfield to Merced, through California’s Central Valley, arguing it will revitalize the economically depressed region.

He’s also replacing Brown’s head of the state board that oversees the project and pledged more accountability for contractors that run over on costs.

Read the rest here.

Sweden Isn't Socialist (mostly)

For years, I've heard American leftists say Sweden is proof that socialism works, that it doesn't have to turn out as badly as the Soviet Union or Cuba or Venezuela did.

But that's not what Swedish historian Johan Norberg says in a new documentary and Stossel TV video.

"Sweden is not socialist -- because the government doesn't own the means of production. To see that, you have to go to Venezuela or Cuba or North Korea," says Norberg.

"We did have a period in the 1970s and 1980s when we had something that resembled socialism: a big government that taxed and spent heavily. And that's the period in Swedish history when our economy was going south."

Per capita GDP fell. Sweden's growth fell behind other countries. Inflation increased.

Even socialistic Swedes complained about the high taxes.

Astrid Lindgren, author of the popular Pippi Longstocking children's books, discovered that she was losing money by being popular. She had to pay a tax of 102 percent on any new book she sold.

"She wrote this angry essay about a witch who was mean and vicious -- but not as vicious as the Swedish tax authorities," says Norberg.

Yet even those high taxes did not bring in enough money to fund Sweden's big welfare state.

"People couldn't get the pension that they thought they depended on for the future," recounts Norberg. "At that point the Swedish population just said, enough, we can't do this."

Sweden then reduced government's role.

They cut public spending, privatized the national rail network, abolished certain government monopolies, eliminated inheritance taxes and sold state-owned businesses like the maker of Absolut vodka.

Read the rest here.

California to require solar panels on all new dwellings

California has a major housing crisis and people at the lower end of the socio-economic scale are leaving in droves because of the high cost of living in the Golden State. A large part of that is the result of high taxes on just about everything and one of the most unfriendly environments for business in the Union. Adding around $10k to the price of a new house doesn't strike me as likely to help with that.

Romanian court tells man he is not alive

In a case reminiscent of a Kafka novel, a Romanian court has ruled that a 63-year-old man is dead despite what would appear to be convincing evidence to the contrary: the man himself appearing alive and well in court.

Constantin Reliu asked the court in the town of Barlad to overturn a death certificate obtained by his wife after he had spent more than a decade in Turkey, during which time he was out of contact with his family. The court told him he was too late, and would have to remain officially deceased.

“I am officially dead, although I’m alive,” a bemused Reliu told local media outlets. “I have no income and because I am listed dead, I can’t do anything.”
Reliu left Romania for Turkey in 1992, apparently to seek employment. He last returned to the country in 1999, and appears to have cut off all contact with his family. After years of silence from her estranged husband, Reliu’s wife obtained a backdated death certificate for him.

The Romanian daily Adevarul said Reliu’s wife had argued in court that having heard nothing from her husband since 1999, she had assumed he had died in an earthquake while in Turkey. The paper said Reliu believes she sought the death certificate in order to annul the marriage and allow her to remarry.

Read the rest here.

It's official

The United States no longer has a conservative political party. In case there was any doubt, the Republican Party is a prostitute for Wall Street and the uber wealthy. We are actually going to borrow $1.5 trillion in order to subsidize billionaires and big business. This is like handing your Visa or MasterCard to Jeff Bezos and telling him to have fun with it.

Who is going to pick up the tab for all of this? Well we know who isn't.

My advice, live for the moment and enjoy. But you don't want to live too long because one day the bill for all of this high living is going to come due, just like your credit card tab. And when it does... things are going to get ugly.

The National Debt Clock 
(Note this only counts the current debt outstanding. It does not include the tens of trillions in unfunded future liabilities, i.e. promises we have made without any clue where the money is coming from.)