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Luetkemeyer: Democrats’ Reckless, out of Control Inflation is Crushing America’s Small Businesses

By Peter Roff • American Action News

Gage Skidmore via Wikimedia Commons

Missouri Congressman Blaine Luetkemeyer is taking on the Biden administration over policy moves that have caused higher prices and the return of noticeable inflation.

“Gas, milk, fruit, televisions, furniture, washing machines, car rentals, hotel rooms – what do all of these things have in common? Their prices have gone up under the Biden administration,” Luetkemeyer, the ranking Republican on the House Committee on Small Business wrote in an op-ed published Friday by Fox Business. 

Data published by the U.S. Bureau of Labor Statistics showed prices up 5.4 percent last month over June 2020, the highest jump since the economic difficulties that began when the market for sub-prime home mortgages collapsed in 2008. That’s higher than the interest rate setting U.S. Federal Reserve expected and marks the sixth straight month in which prices have risen.

“While Democrats in Washington bulldoze a path for reckless government spending, small businesses and middle class working American families alike are left to pay the bill,” Luetkemeyer wrote, singling out the damaging impact the newest round of inflation is having on family-owned business.

“Small businesses are the backbone of the United States economy, and they were making huge economic strides before the Biden administration took over. Now, small businesses nationwide are facing the consequences of the Democrats’ massive government spending agenda in all sectors,” he wrote. 

The U.S. says government nearly half the country’s small businesses were forced to increase prices in May, which Luetkemeyer said was “the largest percentage reported in 40 years.”

“From increased gas prices for delivering goods to rising food costs for restaurants, small business owners are bearing the brunt of Democrat-induced inflation,” he continued. “As more American consumers are spending and patronizing small businesses following the COVID pandemic shutdowns, this increased immediate spending has given our economy a bit of a shock. But rather than acknowledge this problem and correct the course, President Biden and Congressional Democrats are doubling down.”

“Make no mistake – inflation is taxation. Prices of the goods you buy go up, meaning the dollars in your pocket are worth less. It then takes more of those hard-earned dollars to purchase these goods. 

“The Democrats’ proposed $3.5 trillion package will severely exacerbate the inflation problem for middle-class families and further crush Main Street U.S.A. 

“Simply put, small businesses cannot afford the inflation tax that comes with the Democrats’ failed economic policies.

“As Republican Leader of the House Small Business Committee, my colleagues and I have worked tirelessly to provide much-needed relief for small businesses across the country as they regain their footing and reopen their doors to local communities. 

“Unfortunately, there is no single COVID relief package that can simply fix inflation – the Democrats must stop their spending spree. As if the pandemic didn’t create enough of an economic burden for American families and workers, they now face an increased cost of living and consumer prices across the board with no end in sight.”

Luetkemeyer’s criticisms are being echoed by economists and others concerned about the effects ongoing inflation will have on the post-pandemic recovery. 

Writing in mid-July for the Carsey School of Public Policy at the University of New Hampshire, Michael Ettlinger and Jordan Hensley observed that “As measured by Real Gross Domestic Product (GDP), 35 states and the District of Columbia have smaller economies, as of the first quarter of this year, than they did before COVID-19, while 14 states have seen a modicum of economic growth. Nationally, GDP remains 0.9 percent lower than it was before the pandemic struck.”

President Biden and others in his administration seem happy to claim credit for the good economic news but are rather cavalier about the impact the bad news is having, saying the spike in inflation is at worst temporary. 

Biden himself recently dismissed the issue, saying his multi-trillion-dollar spending initiatives will “reduce inflation, reduce inflation, reduce inflation.” Some economists and business leaders fear, however, it is that very spending that is driving the hike in prices and that they will not stabilize or return to the levels at which they were at before the pandemic struck any time soon. 


Coalition Warns Against Broadband Proposals

By Katie McAuliffe • Americans for Tax Reform

Photo Credit: Denny Müller

Americans for Tax Reform led a coalition with other center-right organizations flagging concerning developments in the infrastructure bill negotiations. Price controls and rate regulation; dramatic expansion of executive brand and agency authority; and government-controlled internet should never be on the table.

You can read the letter below or click HERE for a full version:

July 23, 2021

RE: Broadband Infrastructure Spending

Dear Senators:

We write to you today over some concerning developments in the bipartisan infrastructure negotiations on broadband. We are guided by the principles of limited government and believe that the flaws in the infrastructure framework go well beyond the issues discussed here. Nonetheless, our present aim is to advocate specifically against proposals that would enact price controls, dramatically expand agency authority, and prioritize government-controlled internet. 

The infrastructure plan should not include rate regulation of broadband services. Congress should not authorize any federal or governmental body to set the price of any broadband offering. Even steps that open the door to rate regulation of broadband services will prove harmful in the long run.  

Nor should Congress continue to abdicate its oversight responsibilities to executive branch agencies like the National Telecommunications and Information Administration. Giving NTIA unchecked authority to modify or waive requirements, renders all guardrails placed by Congress meaningless. There must be oversight of the programs to ensure that taxpayer dollars go toward connecting more Americans to broadband as opposed to wasteful pet projects. 

Historically, attempts by NTIA to close the digital divide through discretionary grants have failed, leading to wasteful overbuilds, corruption, and improper expenditures. The American Recovery and Reinvestment Act of 2009 created the $4 billion Broadband Technology Opportunities Program (BTOP) grant program administered by NTIA. From 2009, when BTOP was instituted, to 2017, at least one-third of all the reports made by the Inspector General for the Department of Commerce were related to the BTOP program, and census data showed that the BTOP program had no positive effect on broadband adoption. And this was with only $4 billion in taxpayer dollars. We cannot afford to make the same mistake with much greater sums.

Legislation must be clear and not create ambiguities that are left to the whims of regulators. While “digital redlining” is unacceptable, the FCC should not be allowed to define the term however it sees fit and promulgate any regulations it thinks will solve problems—real or imagined. Doing so would give the agency carte blanche to regulate and micromanage broadband in any way it desires. This would be an egregious expansion of FCC authority. Moreover, definitions and regulations could change whenever party control of the agency changes, leading to a back-and-forth that creates uncertainty for consumers and businesses. 

Legitimate desire to ensure that low-income Americans have access to broadband infrastructure should not be used as a smokescreen to codify aspects of the recent Executive Order on Competition, which should not be included in any bipartisan infrastructure agreement. Republicans fought hard to support the FCC’s Restoring Internet Freedom Order. Any legislating on the functions and deployment of Internet technologies must move as a standalone bill through regular order with committee review. These questions are far too important to shoehorn into a massive bill without rigorous debate.   

Any funding for broadband buildout must target locations without any broadband connection first, and this should be determined by the Congressionally mandated FCC broadband maps. Congress has oversight over the FCC and the FCC has already conducted several reverse auctions. Reverse auctions get the most out of each taxpayer dollar towards closing the digital divide. Areas where there is already a commitment from a carrier to build out a network, should not be considered for grants, and the NTIA should not be able to override the FCC’s map to redefine “unserved” and subsidize duplicative builds.  

Government-controlled Internet should not be prioritized in any grant program. With few exceptions, government-owned networks (GONs) have been abject failures. For example, KentuckyWired is a 3,000-mile GON that was sold to taxpayers as a $350 million project that would be complete by spring of 2016. Those projections could not have been more wrong.   More than five years past the supposed completion date, fiber construction for KentuckyWired is still “in progress” in some parts of the state and a report from the state auditor has concluded that taxpayers will end up wasting a whopping $1.5 billion on this redundant “government owned network” over its 30-year life. NTIA should certainly not encourage these failures to be replicated.

We appreciate your work to help close the digital divide and agree that access to reliable internet is a priority, however we should not use this need to serve as a cover for unnecessary

government expansion. Please feel free to reach out to any of the undersigned organizations or individuals should you have questions or comments. 

Regards

* individual signer; organization listed for identification purposes only


Yellen to Pelosi: Congress Must Raise the U.S. Debt Limit

By Peter Roff • American Action News

Gerald R. Ford School of Public Policy via Flickr

U.S. Treasury Secretary Janet Yellen told House Speaker Nancy Pelosi Friday that unless Congress acted quickly to raise the statutory limit on the amount of money the federal government can borrow, she would be forced to “start taking certain additional extraordinary measures” to prevent the United States government from defaulting on its financial obligations. 

In a letter sent to Pelosi and other members of the congressional leadership in both parties, Yellen asserted that an increase or continued suspension of the debt limit “does not increase government spending, nor does it authorize spending for future budget proposals; it simply allows Treasury to pay for previously enacted expenditures.”

With just days to go before the statuary suspension of the debt limit ends at noon on July 31, the need for congressional action has already become a political football. Both parties are trying to use the issue on Capitol Hill to gain leverage over the other to either stop or move through to final passage several pieces of legislation that are a top priority for the Biden Administration.

The full text of the letter is as follows:

Dear Madam Speaker:

As you know, the Bipartisan Budget Act of 2019 suspended the statutory debt limit through Saturday, July 31, 2021.  I am writing to inform you that beginning on Sunday, August 1, 2021, the outstanding debt of the United States will be at the statutory limit.  

Today, Treasury is announcing that it will suspend the sale of State and Local Government Series (SLGS) securities at 12:00 p.m. on July 30, 2021.  The suspension of SLGS sales will continue until the debt limit is suspended or raised.  If Congress has not acted to suspend or increase the debt limit by Monday, August 2, 2021, Treasury will need to start taking certain additional extraordinary measures in order to prevent the United States from defaulting on its obligations.   

Increasing or suspending the debt limit does not increase government spending, nor does it authorize spending for future budget proposals; it simply allows Treasury to pay for previously enacted expenditures.  The current level of debt reflects the cumulative effect of all prior spending and tax decisions, which have been made by Administrations and Congresses of both parties over time.  Failure to meet those obligations would cause irreparable harm to the U.S. economy and the livelihoods of all Americans.  Even the threat of failing to meet those obligations has caused detrimental impacts in the past, including the sole credit rating downgrade in the history of the nation in 2011.  This is why no President or Treasury Secretary of either party has ever countenanced even the suggestion of a default on any obligation of the United States.

The period of time that extraordinary measures may last is subject to considerable uncertainty due to a variety of factors, including the challenges of forecasting the payments and receipts of the U.S. government months into the future, exacerbated by the heightened uncertainty in payments and receipts related to the economic impact of the pandemic.  Given this, Treasury is not able to currently provide a specific estimate of how long extraordinary measures will last.  However, there are scenarios in which cash and extraordinary measures could be exhausted soon after Congress returns from recess.  For example, on October 1 alone, cash and extraordinary measures are expected to decrease by about $150 billion due to large mandatory payments, including a Department of Defense-related retirement and health care investment.

In recent years Congress has addressed the debt limit through regular order, with broad bipartisan support.  I respectfully urge Congress to protect the full faith and credit of the United States by acting as soon as possible.

It is highly unlikely members in either party will allow the deadline to be reached without reaching some kind of compromise agreement to forestall the U.S. defaulting on its debt. Such a move would, most economists agree, that even a technical default would put in motion a disruption in the global financial markets of what one economist called “a global disruption of unknown and unknowable proportions.” 

Such a collapse, which would provide China an ample boost in their campaign urging the replacement of the dollar as the global reserve currency, would likely be blamed on the Republicans. Fear that it might in turn limits the ability of spending restraint advocates to argue the deadline should be allowed to come and go unless reforms are made.

This game of economic chicken has been tried before, with the first one to blink generally considered the loser.


Missouri Teachers, CRT Advocate Plotted to Hide Social Justice Curriculum from ‘Trump Country’ Parents

Teachers questioned how they could teach history and social studies through a social justice lens without rankling parents in the 'highly conservative county ... in the middle of Trump country.'

By Ryan Mills • National Review

Opponents of Critical Race Theory protest outside of the Loudoun County School Board headquarters in Ashburn, Va., June 22, 2021. (Evelyn Hockstein/Reuters)

The curriculum-writing team in a suburban St. Louis school district plotted with a critical race theory advocate on how to keep parents in the dark about their efforts to inject leftwing social justice advocacy into their classrooms, according to a video of their meeting leaked online.

The video, posted on rumble.com in early July, is alleged to be a condensed version of a September 2020 webinar that members of the Francis Howell School District’s curriculum-writing team participated in. The webinar was hosted by their equity consultant, LaGarrett J. King, an associate professor of social studies education at the University of Missouri. He was described on the call as a specialist in the study of “race, critical theories and knowledge.”

It’s unclear who edited the video, which appears to have been posted anonymously by someone with the online moniker “wokeatfhsd.”

During the webinar, King told the predominantly white team members that “This is not a safe space,” but rather a “racialized space,” because “In many ways a safe space is a space where white people tell us how not racist they are. And this is not that space.”

King said “the first thing we have to understand is that our social studies and our history curriculum is political and racist,” and “there is no such thing as neutral history.” He then asked the team members to question whether they are developing black history curriculums through the historical lens of the oppressor. “We have made those who have oppressed people, the oppressor, we have humanized them,” he said.

The nation’s founding “means nothing to black people,” he said, calling history “psychologically violent” but one-sided. He also seemed to justify violence in the name of racial justice.

“All of our wars was about freedom, violence,” King said. “But yet, when black people say, ‘Hey … we need to take over, man. We need to burn this place down, we need to do this, we need to do that.’ ‘Oh no, you should do non-violence to achieve freedom.’ It’s silly. It’s prejudice.”

During a question-and-answer portion of the webinar, teachers and staff on the call questioned how they could reframe their classes to look at history and social studies through a more racialized social justice lens without rankling parents in the “highly conservative” community, which one teacher described as “the middle of Trump country.” King agreed that teachers could do away with verbiage like “white privilege,” while still getting the progressive message across to students.

One white teacher on the call said she’s been teaching about white privilege for a decade.

“Kids are way more open,” she said, “but then they go home and they tell their parents, and then their parents get upset. I don’t advertise to my students when I’m teaching U.S. history that sometimes I would consider myself the anti-U.S. history teacher.”

Another white teacher said because they teach in a conservative county, “Sometimes I think we have deferred to letting that stop progress. We let noise keep progress from moving forward.”

In a paper he co-authored in 2018, King acknowledged that critical theory was developed in the 1920s by German thinkers who “sought to extend Marxist theory into the changing social, political, and economic landscape of the twentieth century by talking about how culture and ideology encourage and sustain social inequality.” In order to “remain true to critical pedagogy,” the authors wrote, “teachers should work to identify questions that are important to students’ lives and that encourage them to reflect on the ways that they are either privileged or oppressed by social dynamics.”

While the district’s teachers have privately discussed their efforts teach students through a decidedly progressive social justice lens, school leaders have publicly denied this is occurring. At a recent school board meeting, superintendent Nathan Hoven said the district has not adopted critical race theory into the framework of its curriculum. “We are not and have no interest in advancing any political agenda,” he said.

“While we support the work and many of Dr. King’s contributions, we vehemently disagree with any suggestions that teachers or staff hide the work we’re doing from parents and taxpayers,” the district told National Review in a statement provided by spokeswoman Jennifer Jolls. “We always strive to make decisions that we believe are in the best interests of students, and do so in a way that is transparent and accessible to all stakeholders.”

School board members recently voted to approve black history and black literature courses as high school electives, according to local media reports. “Students and parents requested these courses be added to the curriculum and we are proud to offer them for those who choose to expand their learning on these topics,” the district said in its statement.


Biden’s Border Crisis Is About To Make History

If the current trend continues, this will be a record-breaking year for illegal immigration on the southwest border.

By John Daniel Davidso • The Federalist

Biden’s Border Crisis Is About To Make History

You would never know it by perusing headlines in the corporate press, but the border crisis is getting worse, not better, as the summer goes on. In fact, it might well turn out to be historic.

Late last week U.S. Customs and Border Protection finally released June border apprehension numbers, which hit a 21-year high with more than 188,000 arrests last month and more than 1.1 million so far this fiscal year.

But that’s not all. Contrary to the usual seasonal rise and fall of illegal immigration, which typically spikes in the spring and then recedes during the hotter summer months, the number of people crossing the border illegally is increasing — as it has been every month since last April.

If this trend continues, we’ll break the decades-old record for southwest border apprehensions, which is more than 1.6 million back in 2000.

Beyond the sheer numbers are the changing demographics of illegal immigration. A growing share of illegal immigrants are now coming from countries other than Mexico or the Northern Triangle countries of Guatemala, Honduras and El Salvador.

CBP data for June show a sharp and sustained increase in other nationalities crossing the Rio Grande, rising from just 11,909 in February to more than 47,000 in June. Migrants from Nicaragua and other South American countries have increased three-foldsince the beginning of the year, and the number of Haitians and Cubans encountered by Border Patrol is 2.5 times higher than it was in January.

In addition, the number of families and unaccompanied children crossing over continues to rise, last month surpassing the total for June of 2019, during the height of the last border crisis. Indeed, more unaccompanied children have been taken into federal custody so far this year than in all of 2019. The number of single adults taken into custody, still by far the majority of all apprehensions, declined last month for the first time since last April.

Some on the left and in the corporate press like to point out that these figures represent apprehensions, not people, because some of those who are apprehended and expelled are repeat offenders. This has always been the case, but the use of Title 42, a public health measure invoked by former President Trump at the onset of the pandemic last year, allows for the rapid expulsion of some migrants, mostly single adults. Since expulsion under Title 42 carries no criminal penalty (like deportation does), many adult migrants are making multiple attempts to cross even after being arrested more than once.

But even taking these multiple offenders into account, in June there were more than 123,000 “unique individual encounters,” as CBP puts it, meaning these are people who are crossing for the first time. (For perspective, at the height of the 2019 crisis there were 144,00 apprehensions that May.)

Then there’s COVID. Fox News reported this week that COVID cases among illegal immigrants in the Rio Grande Valley — by far the busiest section of the border — are up 900 percent in the first two weeks of July compared to the previous 14 months after 135 detainees tested positive for the virus.

For months now, border officials and nonprofit shelters have worried that COVID infection rates among migrants were higher than the 5 percent figure widely repeated in the press. Testing has been haphazard and inconsistent along the border, but COVID outbreaks in emergency shelters for migrant youth have been ongoing, with infection rates hovering between 15 and 20 percent.

Meanwhile, the Biden administration continues to reduce the number of people being expelled under Title 42. Initially, Biden maintained Trump’s Title 42 authority in order to expel single adults and families out of concern that processing large numbers of people in border facilities would contribute to the spread of COVID-19, while admitting unaccompanied minors (and quickly overwhelming federal facilities).

But now, the Biden administration is releasing the vast majority of families apprehended at the border. Out of 55,000 family units apprehended in June, only 8,000 (about 14 percent) were expelled under Title 42. That’s a drastic drop from January, when 62 percent of all family units were expelled. Although less drastic, the administration is also gradually decreasing the number of single adults it expels under Title 42, from 92 percent in January to 82 percent in June.

Corporate Media Can’t Spin The Numbers

So much for the numbers. What they point to is a border crisis of historic proportions — one that’s unfolding with almost no coverage from a corporate media establishment that wants above all to protect the Biden administration.

Amid this self-imposed media blackout, Republicans in Congress have been trying to draw attention to the crisis as best they can. This week Reps. Jim Jordan, R-Ohio, and James Comer, R-Ky., released a reportanalyzing the crisis six months into the Biden administration, including a timeline detailing all the Trump-era policies and programs Biden dismantled soon after taking office, as well as subsequent policies enacted by the Biden administration that have further exacerbated the crisis.

Among these are major shifts that largely flew under the radar, like a 62 percent drop in arrests by Immigration and Customs Enforcement during Biden’s first month in office, which indicates interior immigration enforcement plummeted just as the border was becoming overwhelmed.

The media can continue to ignore what is shaping up to be an historic crisis at the border, but ordinary Americans know something is wrong. According to a recent Washington Post-ABC News poll, a majority of Americans disapprove of Biden’s handling of the border, and in Texas, which is bearing the brunt of Biden’s immigration policies, another recent poll found that immigration and border security are the top concern of voters in the state.

One reason for this disapproval and concern, despite so little media coverage, is that every month CBP releases its border numbers, and every month for the last six months, those numbers have said the same thing: there’s a crisis on the border, and it’s getting worse.


China’s Attacks on Tech Are a Losing Strategy in Cold War II

Forcing DiDi and Alibaba to toe the Communist Party line may help Xi build a police state but will stall the nation’s dynamic industry.

By Niall Ferguson • Bloomberg

Fiddle Didi.
Fiddle Didi. Source: AFP/Getty Images

“Investors have to rethink the entire China structure,” David Kotok of Cumberland Advisers said last week. For Hong Kong, the One Country, Two Systems principle was “dead.”  As for the crackdown on some of the nation’s tech giants, the Beijing government’s treatment of Alibaba “is not a one-off. Neither is DiDi. Everything China touches must be viewed with suspicion.”

Wait, you’re saying that investing in the other side in the early phase of Cold War II might have been a bad idea? You’re telling me that “long totalitarianism” was not a smart trade?

For the past three years, I have been trying to persuade anyone who would listen that “Chimerica” — the symbiotic economic relationship between the People’s Republic of China and the United States of America, which I first wrote about in 2007 — is dead. The experience has taught me how hard it can be for an author to kill one of his own ideas and replace it with a new one. The facts change, but people’s minds — not so much.

Chimerica was the dominant feature of the global economic landscape from China’s accession to the World Trade Organization in 2001 to the global financial crisis that began in 2008. (I never expected the relationship to last, which was why I and my co-author Moritz Schularick came up with the word: Chimerica was a pun on “chimera.”)  At some point after that, as I have argued in Bloomberg Opinionpreviously, Cold War II began.

Unlike with a “hot” war, it is hard to say exactly when a cold war breaks out. But I think Cold War II was already underway — at least as far as the Chinese leader Xi Jinping was concerned — even before former President Donald Trump started imposing tariffs on Chinese imports in 2018. By the end of that year, the U.S. and China were butting heads over so many issues that cold war began to look like a relatively good outcome, if the most likely alternative was hot war.

Ideological division? Check, as Xi Jinping explicitly prohibited Western ideas in Chinese education and reasserted the relevance of Marxism-Leninism. Economic competition? Check, as China’s high growth rate continued to narrow the gap between Chinese and U.S. gross domestic product.  A technological race? Check, as China systematically purloined intellectual property to challenge the U.S. in strategic areas such as artificial intelligence. Geopolitical rivalry? Check, as China brazenly built airbases and other military infrastructure in the South China Sea. Rewriting history? Check, as the new Chinese Academy of History ensures that the party’s official narrative appears everywhere from textbooks to museums to social media. Espionage? Check. Propaganda? Check. Arms race? Check.

A classic expression of the cold war atmosphere was provided on July 1 by Xi’s speech to mark the centenary of the Chinese Communist Party: The Chinese people “will never allow any foreign force to bully, oppress, or enslave us,” he told a large crowd in Beijing’s Tiananmen Square. “Anyone who tries to do so shall be battered and bloodied from colliding with a great wall of steel forged by more than 1.4 billion Chinese people using flesh and blood.” This is language the like of which we haven’t heard from a Chinese leader since Mao Zedong.

Most Americans could see this — public sentiment turned sharply negative, with three quarters of people expressing an unfavorable view of China in recent surveys. Many politicians saw it — containing China became just about the only bipartisan issue in Washington, with candidate Joe Biden seeking to present himself to voters as tougher on China than Trump. Yet somehow the very obvious trend toward cold war was ignored in the place that had most to lose from myopia. I am talking about Wall Street. Even as China was ground zero for a global pandemic, crushed political freedom in Hong Kong and incarcerated hundreds of thousands of its own citizens in Xinjiang, the money kept flowing from New York to Beijing, Hangzhou, Shanghai and Shenzhen.

According to the Rhodium Group, China’s gross flows of foreign domestic investment to the U.S. in 2019 totaled $4.8 billion. But gross U.S. FDI flows to China were $13.3 billion. The pandemic did not stop the influx of American money into China. Last November, JPMorgan Chase & Co. spent $1 billion buying full ownership of its Chinese joint venture. Goldman Sachs Group Inc. and Morgan Stanley became controlling owners of their Chinese securities ventures. Just about every major name in American finance did some kind of China deal last year.

And it wasn’t only Wall Street. PepsiCo Inc. spent $705 million on a Chinese snack brand. Tesla Inc. ramped up its Chinese production. There were also massive flows of U.S. capital into Chinese onshore bonds. Chinese equities, too, found American buyers. “From an AI chip designer whose founders worked at the Chinese Academy of Sciences, to Jack Ma’s fast-growing and highly lucrative fintech unicorn Ant Group and cash cow mineral-water bottler Nongfu Spring Co., President Xi Jinping’s China has plenty to offer global investors,” my  Bloomberg opinion colleague Shuli Ren wrote last September.

Recent months have brought a painful reality check. On July 2, Chinese regulators announced an investigation into data security concerns at DiDi Global Inc., a ride-hailing group, just two days after its initial public offering. DiDi had raised $4.4 billion in the biggest Chinese IPO in the U.S. since Alibaba Group Holding Ltd.’s in 2014. No sooner had investors snapped up the stock than the Chinese internet regulator, the Cyberspace Administration of China, said the company was suspected of “serious violations of laws and regulations in collecting and using personal information.”

The cyberspace agency then revealed that it was also investigating two other U.S.-listed Chinese companies: hiring app BossZhipin, which listed in New York as Kanzhun Ltd. on June 11, and Yunmanman and Huochebang, two logistics and truck-booking apps run by Full Truck Alliance Co., which listed on June 22. Inevitably, this nasty news triggered a selloff in Chinese tech stocks. It also led several other Chinese tech companies abruptly to abandon their plans for U.S. IPOs, including fitness app Keep, China’s biggest podcasting platform, Ximalaya, and the medical data company LinkDoc Technology Ltd.

To add to the maelstrom, on Thursday Senators Bill Hagerty, a Tennessee Republican,  and Chris Van Hollen, Democrat of Maryland, called on the Securities and Exchange Commission to investigate whether DiDi had misled U.S. investors ahead of its IPO. Also last week, U.S. tech companies such as Facebook, Twitter and Google came under increased pressure from Hong Kong and mainland officials over doxxing, the practice of publishing private or identifying information about an individual online.

For several years, I have been told by numerous supposed experts on U.S.-China relations a) that a cold war is impossible when two economies are as intertwined as China’s and America’s and b) that decoupling is not going to happen because it is in nobody’s interest. But strategic decoupling has been China’s official policy for some time now. Last year’s crackdown on financial technology firms, which led to the sudden shelving of the Ant Group Co. IPO, was just one of many harbingers of last week’s carnage. 

The proximate consequences are clear. U.S.-listed Chinese firms will face growing regulatory pressure from Beijing’s new rules on variable interest entities as well as from U.S. delisting rules.

The VIE structure has long been used by almost all China’s major tech companies to bypass China’s foreign investment restrictions. However, on Feb. 7, the State Council’s Anti-Monopoly Committee issued new guidelines covering variable interest entities for the first time. Recognizing them as legal entities subject to domestic anti-monopoly laws has allowed regulators to impose anticompetition penalties on major VIEs, including Alibaba, Tencent Holdings Ltd. and Meituan. This new framework substantially increases risks to foreign investors holding American deposit receipts in the tech companies’ wholly foreign-owned enterprises. For example, Beijing could conceivably force VIEs to breach their contracts with their foreign-owned entities. In one scenario, subsidiaries of a Chinese variable interest entity that are deemed by Beijing to be involved in processing and storing critical data could be spun out from the VIE — just as Alibaba was reportedly forced to spin out payments subsidiary Alipay in 2010.

The stakes are high. There are currently 244 U.S.-listed Chinese firms with a total market capitalization of around $1.8 trillion, equivalent to almost 4% of the capitalization of the U.S. stock market.


BDS & Jerry’s

The woke ice cream company veers into anti-Semitism

By The Editors • The Washington Free Beacon

Ben & Jerry’s CEO Matthew McCarthy / Getty Images

The left-wing ice cream company Ben & Jerry’s announced on Monday that it will stop selling its ice cream in the West Bank and East Jerusalem—or, as the company termed them, Occupied Palestinian Territory. In a move that perfectly captures how left-wing activism is increasingly bleeding into naked anti-Semitism, Ben & Jerry’s said that selling ice cream in the West Bank is “inconsistent with our values.”

Yikes.

We’re not clear how exactly removing Ben & Jerry’s ice cream from grocery stores in the West Bank will benefit the Palestinians. The move appears to be primarily an act of guerrilla theater and a demonstration of base prejudice.

The most common expression of anti-Semitism on the left is the application of double standards to Jews and the Jewish state.

Look no further than Ben & Jerry’s partnership with Unilever, which acquired the ice cream company in 2000. There is no comparison between Israeli policy in the West Bank and the practices of the world’s greatest human rights abusers. Unilever happily does business everywhere from occupied Northern Cyprus to occupied Tibet and Xinjiang, home to Uyghur concentration camps. We won’t hold our breath for the ice cream boycott of China or Russia. But hey, there are no Jews in Xinjiang.

This sort of casual anti-Semitism is not a one-off for Ben & Jerry’s or its left-wing allies. The company defended its partnership with the anti-Trump and anti-Semitic Women’s March as three of its leaders, including the execrable Linda Sarsour, were pushed out thanks to their anti-Semitic remarks.

First, the social justice warriors at Ben & Jerry’s assured us the Women’s March had been “unequivocal” in its denunciations of anti-Semitism—even as it praised Sarsour for her “undeniably important” work. Then the company issued a mealy-mouthed statement that said little about the Women’s March but declared, “Ben & Jerry’s is neither anti-Semitic nor do we support anti-Semitism in any form.”

Monday’s move gave the lie to that blather, and we urge friends of Israel and the Jewish people to vote with their spoons. Morton Williams co-president Avi Kaner is leading the way: He said late Monday that his board would meet to discuss ridding its supermarkets of Ben & Jerry’s.

As the new Israeli prime minister, Naftali Bennett, told Israeli reporters, “There are many ice cream brands, but only one Jewish state.”


Democrats Want Kids Masked, Vaccinated Before Returning to School

By Peter Roff • American Action News

 The rapid spread of the COVID-19 delta variant has spooked people who thought the pandemic had ended. Policymakers have called the rise in new infections associated with the strain first encountered in India alarming even though the data suggest strongly the latest variant strain, while perhaps easier to contract, is far less lethal than the original. 

Like the disease for which it is named, America’s COVID crisis continues to evolve. The end of the lockdowns in most states has people back to work, unmasked, and happy – even as some public health professionals are urging a renewed mandate to put them back on. All that, combined with the lack of clarity coming from groups like the National Education Association and American Federation of Teachers means that no parent can be sure the schools run by the government will offer full-time, in-class instruction when and if they reopen in the fall.

All this could have been avoided if the rush to lockdowns had been slowed and while greater thought was given to a plan to segregate out and protect the most vulnerable populations which, it has been lost on some people, does not include K thru 12 school-age children. Given the difference in approach to containing COVID taken by the governors of red states compared to those who lead blue states, it is not surprising to learn Democrats are hoping that masks and vaccines not yet approved for children under the age of 18 will be mandated before schools are allowed to return to pre-COVID instruction.

According to a recent survey by Rasmussen reports, just over a third of all Americans said they believed children should have to be vaccinated for COVID before they can return to the classroom. Of those, more than half – 56 percent – were Democrats. Only 29 percent of Republicans agreed.

The data, Rasmussen reports said, showed a “strong correlation” between support for masking children and for forcing them to be vaccinated. “Among Americans who think schools should require children to wear masks to protect against the coronavirus, 68 percent also think schools should require children to get the COVID-19 vaccine. Among those who oppose schools requiring children to wear masks, 79 percent are also against schools requiring children to get the coronavirus vaccination.”

The split along party lines on the issues is clear. Majorities of Republicans (61 percent) and independents (52 percent) said they opposed a vaccine requirement. Likewise, on the issue of masks, 58 percent of Democrats said they thought masks should be required as part of the basic back-to-school outfit while only 27 percent of Republicans thought this would be a good idea. Almost two-thirds of GOPers – 60 percent – and as well as a plurality of independents, the polling firm reported, said they were opposed to the mandatory classroom masking in K thru 12 classrooms.

The pollster found white Americans “slightly more in favor of schools requiring children to get the COVID-19 vaccine than blacks or other minorities” while blacks were “more supportive” than whites or other minorities regarding a requirement children wear masks. And that upper-income Americans were more in favor of requiring children to get vaccinated, with 48 percent of those earning $200,000 a year or more “favoring mandatory vaccination” while just 36 percent of those earning less than $30,000 a year agreed.The survey of 1,000 U.S. American Adults was conducted on July 13-14, 2021. The margin of sampling error is +/- 3 percentage points with a 95 percent level of confidence.


Big Tech’s Immunity in Jeopardy

By Peter Roff • American Action News

Anthony Quintano from Westminster, United States via Wikimedia Commons

A federal appellate court’s decision to rehear a case in which a controversial provision of 1996’s Communications Decency Act protecting Big Tech firms from civil suits because they are “distributors of content” rather than “publishers” is giving people hope the recent wave of Internet censorship may soon end. 

The U.S. Court of Appeals for the Second said July 16 it would rehear the arguments “en banc” following a ruling by a three-judge panel that upheld a lower court’s decision in Dorman v Vimeo, in which it was argued the tech platform was insulated from liability after it terminated the video streaming feed of a group posting videos of individuals saying they’d abandoned homosexuality to pursue a Christian way of living. 

Vimeo, the Epoch Times reported, argued successfully its terms of service agreement prohibited the streaming of materials promoting “conversion therapy,” a controversial technique legislators in several blue states are currently trying to ban, especially for children under the age of 18.  Others including the plaintiff argue however that the tech firm’s action is censorship and is damaging in both the legal and common sense of the word.

Robert Tyler, general counsel for the Advocates for Faith & Freedom said the decision to have the appeal reargued in front of the entire court puts the immunity provision of Section 230 “in the crosshairs of judicial review.” 

“Section 230 was not intended to give Big Tech the right to exclude persons from their platform just because the customer is black, Muslim, white, Christian, homosexual, or formerly homosexual. That is plain invidious discrimination,” Tyler said.

The case is important because the digital age has moved the public square from inside the local community to well out into cyberspace. Facebook and Twitter are now the host of the national conversation, fueled by information people gather by using search engines like Google. This is a new reality, leaving more than a few conservatives fearful their opinions and publications and websites are being censored by the “woke” individuals inside the Big tech companies that make decisions about search engine rankings and what can be seen. 

The appellate court’s latest action suggests Section 230, which many of its critics believe is the legal justification for online censorship, may not long survive. It is rare for an entire appellate court to rehear a case just to reaffirm a three-judge panel’s decision. Even if it doesn’t, however, those who follow tech platforms and the laws that govern them say there is no guarantee the censoring of individual messages, the de-platforming of people like former President Donald J. Trump, or the termination of services would come to an end if this one part of the CDA is ruled unconstitutional. 

Without Section 230 protection – or something like it – platforms and Internet service companies might someday be held responsible for what appears on screens and servers in much the same way the publishers of newspapers are responsible for what appears in print. Not that it would get anyone very far. The bar for proving damages in cases where libel or defamation are alleged was high even before the United States Supreme Court sent it into the stratosphere in its 1964’s Times v Sullivan decision.

Now, the standard of proof in such cases is so rigorous it is rarely met and, even if it is, the requirements involved in proving damage are so onerous as to hardly be a deterrent to sloppy reporting, deliberate maligning, and censorship. 

Trump’s recently announced class-action suit against Big Tech CEOs over his de-platforming may be another matter. He contends his first amendment rights were violated following the disruption inside the U.S. Capitol on Jan. 6 by these companies acting as agents of the federal government. If he can prove that to be the case, it invokes constitutional scrutiny and potentially tilts the outcome in Trump’s favor. 

Ultimately, the court will probably rule in a way that protects the most speech for the most people. The first amendment is an American absolute, not necessarily applicable in all cases – the government can’t imprison me over what I tell my children – but we generally believe as a country that even private institutions should give the amendment due deference. If Big Tech can be shown to have failed in this regard, the consequences could be interesting. 


The US should make a stand in Lebanon to push back against Iran’s ambitions

By RUSSELL A. BERMAN • The Hill

Lebanon is facing a dangerous combination of accelerating crises — economic, political and societal. Although Lebanon is a small country, important issues for U.S. national interest and geo-strategy are at stake. Yet, currently, American Middle East foreign policy is devoted to the single obsession of the Iran negotiations, leaving little oxygen for other matters. This is a mistake. The Biden administration should develop a more nuanced engagement with the region and especially a robust response to Lebanon’s pending collapse. 

The Lebanese currency has lost close to 90 percent of its value, pushing much of the country below the poverty line, with many families relying on remittances from relatives abroad. Yet even those lifelines cannot make up for the shortages in commodities: gasoline, medications and food are all in short supply. Add to this a crumbling infrastructure that can supply electricity for only a few hours every day. 

Meanwhile, a political stalemate blocks the formation of an effective government that could institute reforms that might alleviate some of the problems. Instead, the political class, largely viewed as incorrigibly corrupt, is making no effort to meet the needs of the public. One bright light is the emergence of vibrant oppositional forces. But they remain fragmented, and elections will not take place until next year.   

Leadership change may therefore be too far in the future to rescue the crumbling institutions that once enjoyed a strong international reputation, especially Lebanese universities and hospitals. Now the talented personnel on which those institutions depend are trying to leave for better paying jobs abroad. After the troubled decades of civil war and occupations, after the devastation of COVID-19 and the massive destruction of the explosion in the port of Beirut on Aug. 4, 2020, this already fragile country faces even greater disorder.  

Given the extent of the suffering, there is every reason to provide humanitarian assistance to Lebanon, as the United States is already doing. The U.S. also provides important training support to the Lebanese armed forces, although the scope of that mission has been shrinking. Otherwise, American engagement is quite limited. Washington should do more and put Lebanon higher on the list of foreign policy priorities for four reasons   

1)  Grand Strategy: Lebanon presents a clear case of the deleterious consequences of a pivot away from the region, given the reality of great power competition. If the U.S. does not provide leadership, it opens the door for other powers, notably Russia. Its naval repair facility in Tartus, Syria, is less than a 40-mile drive from the Lebanese port of Tripoli, which could be ripe for Moscow’s taking. Lebanon could become one more stepping-stone for Russia’s advance in the Middle East, unless the U.S. reasserts its role there.  

2)  Terrorism: The discrepancy between the degradation of living conditions in Lebanon and the immobility of the political class can lead to social unrest, a breeding ground for the sort of Islamist terrorism that has plagued the larger region. One should not discount the possibility of a resurgence of ISIS or intentional spillover effects from the Syrian civil war, which led to bombings in Beirut and Tripoli only eight years ago. The more such violence proliferates, the greater the chance that terror incubated in the region can spread beyond it, including to the U.S.   

3) Refugees: Unless the Lebanese crises are addressed, the resulting social disorder is likely to produce a new wave of refugees, fleeing the ravages of a collapsed economy or, in a worst-case scenario, the resurgence of sectarian conflict. The Assad regime in Syria is not above provoking violence in Lebanon in order to achieve the sort of demographic reengineering it has undertaken at home, where it has forced targeted populations to flee, a cynical form of ethnic cleansing. The U.S. should be concerned about the destabilizing effects of renewed refugee flows into allies such as Jordan and Turkey, already hosting large refugee populations, or into the European Union, where the 2015 refugee wave continues to have disruptive political repercussions.   

4) Iran: A collapse of the Lebanese state can only benefit Iran and its most anti-American political forces. Iran’s proxy in Lebanon, Hezbollah, might see an opportunity to seize power directly or, more strategically, it might prefer to consolidate its control in its strongholds and let the rest of the country dissipate, precisely in order to demonstrate the weakness of western democracy. In either case, Tehran would win, unless the U.S. engages in strategic ways to address Lebanon’s dilemmas.  

Arguments that it is in the U.S. national interest to engage more strongly in Lebanon run counter to current foreign policy predispositions in Washington. A prevailing orientation deprioritizes the Middle East in general in order to shift attention to the Indo-Pacific. But that viewpoint does not need to lead to a full-scale abandoning of the Middle East that hands the region over to America’s great power adversaries.  

In addition, the Biden administration views the region primarily in terms of Iran and a renewed Joint Comprehensive Plan of Action (JCPOA). Many Lebanese understand this and correctly fear that Hezbollah will benefit from a windfall when the U.S. lifts sanctions on Iran. There is no indication that the U.S. negotiation team is seriously demanding a termination of Iran’s regional destabilization campaigns, including its support for Hezbollah. Yet getting to a new deal with Tehran without such a constraint basically means appeasing Iran by trading away Lebanese sovereignty.    

American national interest, including American values, requires a different path: Instead of misusing Lebanon as an accommodation to Tehran, the U.S. should make a stand in Lebanon, with policies designed to renew its democracy (and purge its corruption) and to protect its sovereignty by diminishing Hezbollah, as first steps toward pushing back against Iran’s broader expansionist ambitions.

Lebanon is a small country, but the current crisis has outsized geo-strategic implications for the U.S. 


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