Random Friday: Heinz, China subsidies, legal weed

News Story of the Day: One of the market’s favorite value stocks is crashing on Friday. Kraft Heinz (NASDAQ:KHC) plunged 30% at the end of the trading week as a Securities and Exchange Commission (SEC) probe was launched. The company also reported higher operating costs and slashed its dividend from $0.63 to $0.40.

Warren Buffett and Charlie Munger lost $4 billion on Heinz’s performance.

How much more could the stock crash? Time will tell, but it could be a heck of a buy considering how its post-IPO price was about $80.

Chart of the Day: So, where are all the jobs at in America today?

Here they are:

Illustration of the Day: Did you hear? Senator Bernie Sanders (I-VT) is running for president. We already know what his first act as president will be:

Quote of the Day: China’s subsidies only harm Americans, right? Wrong. Cafe Hayek’s Don Boudreaux perfectly puts this myth to bed:

Mr. Arain:

Thanks for the e-mail in which you argue that I am “perhaps wrong to discount the economic damage Chinese subsidies may impose on the US.”

Respectfully, I disagree with you. To explain why, let me put to you two alternative scenarios.

Scenario 1: a private Chinese citizen invents an amazing device that doubles overnight the output of all manufacturing workers whose employers possess this device. She produces this device exclusively with private funds and sells it profitably across the globe, including to businesses in America. As a result, millions of American manufacturing workers lose their particular jobs.

Scenario 2: Beijing subsidizes the invention, production, and export of an amazing device that doubles overnight the output of all manufacturing workers whose employers possess this device. Among the buyers of this device are businesses in America. As a result, millions of American manufacturing workers lose their particular jobs.

Do you see any economic differences separating scenario 2 from scenario 1 that are relevant for Americans? I don’t. The consequences for Americans in scenario 2 are identical to those in scenario 1. Yet the same protectionists – and they are many – who grant that in scenario 1 we Americans enjoy net benefits, insist that in scenario 2 we Americans suffer such insufferable net harm that Uncle Sam must punitively tax our commerce with the Chinese to protect us from this alleged menace to our prosperity.

Scenario 2 differs from scenario 1 from the perspective only of the Chinese people. In scenario 2 the Chinese people are taxed to subsidize the invention, production, and export of the amazing labor-saving device, while in scenario 1 they are not so taxed. And so while I grant that the Chinese people have both an economic and an ethical basis for complaining about Beijing’s actions in scenario 2, I cannot begin to see that Americans have any such basis for complaining. Can you?

Tweet of the Day: Dave Rubin gets it:

Bernie must forfeit two of his houses to remain ideoligically pure. (And if he really wants to be consistent he should then move into a socialist style green cement room with a flickering fluorescent bulb and a leaky faucet.) https://t.co/5xAotMjzBp

— Dave Rubin (@RubinReport) February 22, 2019