By George Landrith • RealClear Defense
It is time to upgrade our military’s heavy-lift helicopter capabilities. The current workhorse, the CH-47 Chinook, has served our country since 1962. Despite its age, the Chinook is still the most capable heavy lift helicopter on the planet — flying at almost 200 miles per hour which is roughly the speed that the Army wants its next-generation Scout aircraft to fly. Our allies use the Chinook as well — precisely because of its utility and capability.
Over the years, the Chinook has been upgraded and new technology built in. As a result, our allies use the Chinook because it is a highly capable platform, and it is the world class heavy lift helicopter. However, the military’s needs have grown, and additional capabilities are needed. The question is how to most effectively and efficiently meet those needs.
Given the Chinook’s inherent strengths and capabilities, the wisest approach is to update and upgrade the Chinook so that it can increase payload, range, and other vital capabilities. With the right upgrades to the drivetrain, rotors, and other systems, this capable and proven aircraft will continue to be the world class heavy lift helicopter platform for decades to come. Following this approach means our heavy lift needs are amply met and at a much lower cost — which means we also have available resources for other crucial national security needs. That’s a win-win.
However, recently, Army Secretary Mark Esper made remarks that suggested he wasn’t interested in upgrades, but would instead start over from scratch. Sometimes starting over from scratch makes sense. But often it doesn’t. This is one of those times where starting from scratch will waste taxpayer dollars and leave our military in a lurch while a brand new helicopter is developed and produced at a much higher initial cost and increased sustainment costs.
If the Pentagon starts over from scratch, the new helicopter fleet will not be available to our warfighters for another 30 to 40 years or longer. In contrast, an updated and upgraded Chinook is already in the works and can be rolled out relatively rapidly and at a much lower cost. This approach would give our military the world-class heavy lift helicopter it needs going well into the future, and it would save money so that other critical military needs are not neglected.
The Chinook can carry dozens of fully equipped infantry or special operators. It can transport 10 tons of supplies and equipment. It can even carry the new Joint Light Tactical Vehicle (which replaces the older up-armored Humvee and provides a more capable and survivable vehicle) or a 155m howitzer in a sling below the aircraft. Cost effective upgrades and updates can increase payload, range, and other important capabilities. All of these upgrades can be done at a fraction of the cost of simply starting over.
Special operators who fly the most dangerous and demanding missions in the Army swear by the Chinook and trust their lives in it. Even Espers, while signaling he wants to move on, admits that the Chinook “is a very good aircraft” and that it should continue to be used by our special operations forces. He even admits that perhaps the future is simply “a version of the [Chinook]. I don’t know.” Clearly, there’s nothing fundamentally wrong with the Chinook as a platform. It is battle tested and battle proven.
The wise choice would be to update and upgrade the Chinook — that would give our warfighters the capability they need and do so in the most efficient way possible. That means other mission-critical tools required by our warfighters can also be afforded.
The truth is that the Chinook can continue to serve American warfighters with the right updates and upgrades. And these updates are already in the works. It would be foolish to shut that down and waste money by starting over. This doesn’t require much imagination. With a new drivetrain, upgraded and redesigned rotors, and other new or upgraded systems, the lift capability, range and speed, can all be increased — even beyond its current world-class capability. This makes sense for the warfighter and the taxpayer. Esper would be wise to pursue the truth that even he admitted — our future heavy-lift helicopters “may be a version of [the Chinook.]”
In a world where the government needs to do more with less, upgrading the Chinook makes a lot of sense. This will give our warfighters the greater range, speed, and payload capacity that will be needed in the future. And while achieving all of these milestones, it will keep both production costs and sustainment costs lower. Ditching the Chinook and starting from scratch makes no sense at all — either for the warfighter or the taxpayer.
Since the Tax Cuts and Jobs Act became law in 2017, government officials in high-tax states have been frantically trying to find a way to overturn the provision that limits taxpayers’ deduction for state and local taxes to $10,000. That limit makes taxpayers in high-tax jurisdictions feel the impact of their local governments’ tax-and-spend policies more keenly, and those governments will do anything (short of actually cutting taxes) to prevent that from happening.
First they resorted to weird workarounds that will surely be ignored by the Internal Revenue Service and struck down by the courts as the ruses that they are. Then they sued in federal court to stop Congress from changing the tax law. The lawsuit is without merit—it’s so bad, even California declined to join it.
Now at least one state, Connecticut, is considering radically reordering its tax system in a way that will be objectively worse for its citizens, all to spite the federal government. Sooner or later, these tricks will be used up and the high-taxing states will have to face reality.
Any analysis of the federal income-taxing power must begin with the Sixteenth Amendment to the Constitution, which is brief but sweeping: “The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.” While Article I always gave Congress the power to impose direct taxes, the Sixteenth Amendment removed the constitutional restrictions on that power that made its exercise practically impossible.
That power, with the pre-1916 restrictions removed, is as broad as it gets. If you have income, the federal government can tax it. From the beginning, courts have recognized the sweeping nature of the Sixteenth Amendment and, in 1955, clarified further just how broad the amendment is in the landmark case of Commissioner v. Glenshaw Glass Co. In that case, the upheld the Internal Revenue Code’s definition of income as being truly “all-inclusive.”
To admit this does not require an endorsement of high taxes, or indeed of any taxes at all. To say that the government can tax all income does not mean you think they shouldtax all income. It is only to admit a fact that, until recently, Democrats were especially fond of acknowledging: the government has the power to tax your income.
Admitting that also does not mean that the government must tax all income. We have never had a truly flat tax. The 1916 Revenue Act, for example, allowed a deduction for foreign taxes as well as state and local taxes (commonly abbreviated as SALT). It also contained deductions for depreciation, depletion, and interest that are similar to those still in the code.
But none of these deductions were a matter of right; they were legislative choices, undertaken to reduce the burden of taxation in ways that Congress thought made the income tax fairer. That’s a fine idea, but it does not create an inalienable right to that tax deduction.
Connecticut’s plan to beat the system is clever—too clever, really. Jared Walczak of the Tax Foundation explained the details in a recent article: “the state’s graduated-rate income tax would be largely replaced by a 5 percent payroll tax, plus an additional 2 percent tax on income above $200,000, which would raise more money than the current income tax. The state’s Earned Income Tax Credit (EITC) would be increased to offset the higher tax liability for low-income earners, and because the payroll tax is a deductible expense for businesses, taxpayers subject to the $10,000 [SALT] deduction cap would get a federal tax cut even as the state generates more money.”
Walczak’s article points out the main problems with the complicated proposed tax structure. Getting the thing to work at all without creating bizarre incentives is a problem. For example, a payroll tax with multiple brackets will inevitably require massive end-of-year adjustments for anyone working multiple jobs. It also results in a different tax structure for wage workers and independent contractors, as well as people who live off investments.
Does the Nutmeg State really want to shift the tax burden away from one group of people based purely on the terms of their employment? If so, regular jobs are going to shift to other states and freelancers are going to move in, creating a hole in the state budget. The idle rich will come out ahead, too, as their non-wage income becomes non-taxed.
That’s a strange thing for a supposedly liberal state to do, but ordinary concerns fly out the window when the overriding goal of thwarting the president enters the equation. Democrats have made a cottage industry out of saying richer people need to pay more taxes. When that becomes slightly true because of a Republican initiative, however, all of the well-heeled blue staters want to use corporations to hide income from the federal government.
The pending case of New York v. Mnuchin, to which Connecticut is also a party, makes even less sense. The attorneys general of these four high-tax states suggest that the federal taxing power was never intended to interfere with the states’ taxing power. There is no citation for this point, which tells you about all you need to know: the claim is invented out of thin air.
The idea that the reduced SALT deduction impairs the states’ taxing power is also nonsensical; the states retain the power to tax, they just can’t use a federal deduction to hide how high their taxes are. As Joseph Bishop-Henchman wrote for the Tax Foundation, “Tax deductions and carve-outs are a matter of legislative grace.”
Even the idea that federal taxation must exempt all state taxes is unsupported by history. Bishop-Henchman cites several instances when the deduction was limited, including in 1964, 1969, 1986, and 1993. And from the start, federal tax never completely excluded state and local taxes: it was a deduction, not a credit. While taxpayers did not pay taxes on the portion of their income that they paid to their state, they did not get a full credit for that amount, either. The deduction only saves the marginal rate on the income devoted to state taxes—the fraction of the fraction.
The complainants say that “at ratification, it was widely understood that the federalism principles enshrined in the Constitution would serve as a check on the federal government’s tax power.” That’s true, but not in the way they think it is.
Federalism did result in informal limits on federal power, but only because the states, represented in the Senate, kept the federal government from fully exercising its powers at their expense. If those limits have been eroded in the past century, it is because progressives went out of their way to erode them, first by requiring the direct election of senators and later by appointing judges who allowed them to ignore all limits on federal power, written and unwritten.
These same progressives now want you to believe that one of those unwritten, informal restrictions must override the law. The change of heart is cynical, if predictable. Rich people in high-tax states are paying more federal tax, not because the federal tax rate has gone up, but because Congress decided to stop helping the states hide the effect of their unsustainable tax-and-spend policies. Those who destroyed the norms of federalism now wish the courts to re-erect them—but only insofar as it helps their friends.
All of these lawsuits and legal hedges are rooted in the same complaint: the rich blue states want to keep imposing high taxes on their people and want the federal government to help them obscure the consequences.Their argument here is that imposing the same rule on all taxpayers is unfair.
“By decreasing state tax revenue and making state taxes more expensive,” they write in the complaint, “the new cap on the SALT deduction will ultimately force the Plaintiff States to choose between maintaining or cutting their public investments and level of services, and the taxes supporting them. As such, the new cap on the SALT deduction directly and unfairly interferes with the Plaintiff States’ sovereignty, by depriving them of their authority to determine their own taxation and fiscal policies without federal interference.”
Their argument here is that imposing the same rule on all taxpayers is unfair. That’s a definition of “unfair” that only a small child could love. What it really means is, “I didn’t get what I want.” What they want, as the complaint plainly acknowledges, is to avoid making hard choices to balance their budgets. Every other state has had to make hard choices, but these four states don’t want to. Unfair!
Even if it were true that the law is unfair, this would be a political argument, not a legal one. Politicians on the far left want the courts to impose rules that the people and their legislators have rejected. Even their own statements confuse to whom exactly the law is unfair.
New York Gov. Andrew Cuomo attacked the tax law as one “that benefits the 1% at the expense of middle-class families.” But the loss of the deduction hits only those families who pay more than $10,000 in state and local taxes—hardly the average Joes Cuomo awkwardly attempts to evoke.
This lawsuit will fail, and Connecticut’s too-clever workaround probably will, too. What happened in the Tax Cuts and Jobs Act of 2017 was a result that politicians from these four states found distasteful. It will force them to make the kind of hard choices that they were elected to make. It will make their previous bad decisions more obvious to their voters and put pressure on them to fix them. It will, in short, force them to govern.Twenty-first-century politicians will do nearly anything to avoid governing.
Twenty-first-century politicians will do nearly anything to avoid governing. The arguments are flimsy at best, and the remedy is uncertain. Asking the courts to strike down the partial limitation of a tax deduction is novel enough, but what comes in its place? Do they want the courts to impose taxes directly, an act that is at the core of a legislature’s functions?
They know this lawsuit is a damp squib, a feeble attempt to show the folks back home (and especially their rich donors) that they’re “doing something” to stop taxes on the rich from going up. Connecticut’s radical reform is somewhat better thought-out, but will certainly inflict unintended consequences on that state’s already struggling economy, even if the IRS doesn’t decide to ignore the whole shell game they are playing.
Like a child throwing a tantrum, they will flail and kick for as long as they can before finally having to do what they were elected to do: set a level of taxing and spending that their people can afford.
By Madeline Osburn • The Federalist
Before New York Mayor Bill de Blasio even officially announced his presidential bid on Thursday, New Yorkers were already pleading for him give up his White House ambitions.
De Blasio, who has been mayor of America’s largest city since 2014, is now one of the 25 Democratic candidates seeking a presidential nomination, despite the lack of support from his own constituents. His approval rating sits at 42 percent, and an April poll found that 76 percent of New York City voters did not want de Blasio to run for president. In March, a Monmouth poll found that de Blasio was the only Democrat asked about with a negative favorability.
While one would think his socialist policies, such as universal pre-k and the New York City Green Deal, would make him popular among his progressive-leaning constituency, he is consistently mocked for blunders and disingenuous attempts to relate to the working class.
For starters, it is well known that de Blasio’s hands are stained with the blood of Staten Island Chuck, the Staten Island Zoo’s groundhog whose real name is Charlotte, after he dropped her during a 2014 Groundhog Day ceremony. She died a few days after the incident from internal injuries.
Each morning, the mayor insists on traveling from his mansion on the Upper East side with a police escort to work out at the YMCA gym in Park Slope. In April, a concerned citizen hung a flyer at the Y with the disclaimer, “By entering these premises you agree not to run for President of the United States in 2020 or in any future presidential race. You agree to focus solely on your current job here in New York City, which you are not excelling at.”
And while these complaints may seem trite, there are plenty of other more weighty accusations against de Blasio for corruption, bribery, waste, rising homelessness, and public housing scandals under his watch.
A recent New York City Department of Investigation report revealed how de Blasio violated ethics laws in raising millions of dollars to help promote his own policies, and just a few weeks ago, two of his own donors pleaded guilty to campaign finance law violations. Another de Blasio donor was convicted in January for bribing NYPD officers.
Since the rollout of his decision to run began this week, the backlash has only intensified. On Monday, in an attempt to generate media attention, de Blasio held a rally inside Trump Tower to tout his record on climate change, and to criticize the president’s own emissions. The rally quickly backfired as the mayor was drowned out by the noise of protestors who were riding the Trump Tower escalators with “Worst Mayor Ever” signs.
On Thursday morning, when MSNBC asked New Yorkers on their morning commute what they thought of the mayor’s announcement, responses were overwhelmingly dissatisfied. “Is that a joke?” one citizen asked.
Perhaps de Blasio truly believes his New York toughness gives him an edge over the other 24 candidates to defeat Trump, the incumbent New Yorker. Or maybe he’s jealous of the wave of media attention the mayor of small-town South Bend, Indiana, a city that is 1 percent the size of NYC, has received since entering the race.
“I’m running for president because it’s time we put working people first,” de Blasio said in his official 2020 announcement video. If de Blasio’s message and aptitude are failing to resonate in his own city, which is heavily made up of “working people,” then it’s hard to see the potential of it catching on anywhere else across the nation.
In a recent rally, the septuagenarian former vice president flashed his pearly set and declared, to the utter confusion of foreign policy analysts across the Euro-Atlantic, that China is no threat to the West: “China is going to eat our lunch? Come on, man.”
Beijing is the world’s second-largest economy, and increasingly isolated due to its revanchism in the Asia Pacific. It is confronting Australia, India, and Japan simultaneously, challenging the U.S. Navy and British Royal Navy every day. It’s returning to Maoist totalitarianism and Chinese civilizational exceptionalism, the leader of artificial intelligence and genetics research, with advanced space warfare capabilities and highly advanced stealth and hypersonic warfare capabilities.
China is a chronic thief of intellectual property, a great power extensively buying lands (and governments) across the world, a manufacturing giant in a trade war, and a great power engaged in espionage, cyber warfare, and naval buildup. Yet, according to the front-runner of the Democratic presidential field, it is no threat to the United States and the West.
Biden is obviously wrong about China. In fact, Biden is wrong about a lot of things. Like Johnny English, it is his job to know nothing, be wrong, and goof around. He has a glowing smile, 1950s social mannerisms, righteous rage at social justice issues to update himself for the kids, and is catastrophically wrong about every single foreign policy position possible.
Let’s start with the biggest position that would come back to haunt him as president. I was a rookie reporter covering the U.S. vice presidential candidates’ debate when I saw the difference between a quietly earnest if wonkish Paul Ryan, and a smug, condescending Biden, with a media fully disposed in the latter’s favor. It was Biden who dismissed whether Russia was a revanchist power.
While one can argue about how much Russia was a “threat” per se, no one would deny that Russia is and will be an adversarial power, and something Biden’s administration not only didn’t perceive, but when informed, dismissed mockingly.
But that is not all. Biden is stuck in time, as the world changed around him. For example, Tucker Carlson writes in his book, “Ship of Fools,” “In the fall of 2002, a total of seventy-seven senators voted in favor of the Iraq War resolution. This included the majority of Democrats, and 100 percent of the party’s rising stars. Two future presidential candidates who voted for the war, John Kerry and Hillary Clinton, also happened to be future secretaries of state. The future vice president, Joe Biden, voted for it…”
He also notes that, during Vietnam evacuation, “Senator Joe Biden of Delaware agreed; he introduced legislation to curb the arrival of Vietnamese immigrants, accusing the Ford administration of not being honest about how many refugees would be arriving.” Vietnamese immigrants, needless to say, are one of the most successful and assimilated groups in the United States, but that’s beyond the point.
The point is Biden never thought independently about what might be good or bad, but said the things the Democratic base wanted to hear. In 2002, Iraq War support was simply good politics, even though now no one talks about it.
Biden also argued for a renewed troop surge in Afghanistan, a conflict that has long transformed from a war to an imperial law and order mission, similar to what the British did in the 1890s, against Afghan rebels in North West Frontier Province. Funnily enough, when the most consequential decision of the Obama administration came, such as the raid to kill Osama Bin Laden, Biden argued against it. Obama, of course, took the advice of his generals instead.
To Biden’s credit, like a broken clock he was right about foreign policy twice. During one of the most catastrophic foreign policy decision in modern Western history, when Hillary Clinton, Samantha Power, and Susan Rice were arguing for toppling Muammar Gaddafi, which turned Libya into a slave trading hub and mass migration springboard, Biden apparently argued against it. He was also apparently overruled and then went on to fully support the Obama intervention, even when he despised Clinton, according to his aides.
Likewise, he was the first one to publicly state that there are no good Syrian rebels, because all are Qatari-funded Islamists. But then he promptly backtracked, genuflected, and apologized. He should have stuck by both, because history could have proved his caution and restraint right. But he did not.
The problem for Biden is much more than that. He reminds me of the grandmother in “Good bye, Lenin!” who fell in coma during the Soviet years, only to wake up after the fall of the Berlin Wall in a unified Germany, yet her grandson must continue an elaborate hoax to assure her that she is still in communist Germany, so she doesn’t have another shock and suffer a stroke.
Biden, likewise, is also stuck in the heady days of early 1990s triumphalism, with an expanding North Atlantic Trade Organization, an European Union that is a prospective trade ally, and the world fit for liberal interventionism and democracy, with a hope that China would eventually be entrenched as a pillar in the liberal order.
Unfortunately, none of that came true, and China is pretty much the biggest rising great-power rival challenge to an established superpower, compared to the history of rising-power challenges, from Sparta to Athens, Carthage to Rome, the Spaniards, Napoleon and Germans twice, to the Brits. There’s an academic consensus about it, and Uncle Joe is wrong once again.
Most importantly, however, he is opposed to his own base. Recent studies suggest, that Americans overwhelmingly, distinctly support a restrained foreign policy and less liberal interventionism and democracy promotion abroad, this stance is even stronger among the Democratic base.
The findings in this survey suggest that American voters are not isolationist. Rather, voters are more accurately described as supporting ‘restrained engagement’ in international affairs—a strategy that favours diplomatic, political, and economic actions over military action when advancing U.S. interests in the world. American voters want their political leaders to make more public investments in the American people in order to compete in the world and to strike the right balance abroad after more than a decade of what they see as military overextension.
Guess who won an election promising just that?
It is a mystery that President Trump cannot transform his foreign policy instincts into electoral support, but one can blame Trump’s poor PR, lack of strict message discipline, and continuous mainstream media opposition for that. The fact remains, however, that Trump is more attuned to a non-interventionist America than his prospective rival Biden.
It is still too early to say what would happen. The primaries and the debates haven’t started yet. While one can be sympathetic to an affable grand-fatherly figure, one should be careful about someone who has repeatedly, to use a liberal catch-phrase, been on the “wrong side of history.”
I used to laugh every time I heard someone like Elon Musk say that we are living in a Matrix-like simulation. These days, not so much.
Don’t call the funny farm just yet. On the major question of the nature of sense experience, I remain with Aristotle and against Bishop Berkeley. Matter is real. But there is also the question of how we perceive “the news”; how established media institutions present and frame information; how we are supposed to respond to the “takes” purportedly expert and knowledgeable voices serve up to us by the second on social media. And here, I’m skeptical.
It’s hard not to be. Think of the headlines we’ve encountered since the beginning of this year. We were told the Covington Catholic boys were smug racist Trump supporters on the basis of a snippet of video. A young man, a private citizen, whose only offense was traveling to Washington, D.C., to march for life, was transformed at light speed into a symbol of hate and systemic oppression. However, just as Nick Sandmann’s reputation as a villain was about to set in stone, additional videos revealed that the students’ encounter with a far-left American Indian activist and the Black Hebrew Israelites was far more complicated than initially reported. The Covington Catholic boys had been smeared. People who cast themselves as agents of professional knowledge, expertise, and moral authority had circulated and amplified a lie in the service of a political agenda. Not for the first nor last time.
We were told Jussie Smollett, a rising gay African-American actor and singer, had been the victim of a hate crime committed by MAGA-hat-wearing Trump supporters in the dead cold of a Chicago night. Journalists and bloggers who asked questions about Smollett’s story were decried as bigots, even as key details went missing and the shifting timeline became more and more curious. Then the city’s African-American police commissioner announced Smollett had been arrested for orchestrating a bizarre hoax. The state’s attorney filed charges—charges subsequently dropped after behind-the-scenes lobbying by Michelle Obama’s former chief of staff.
We were told that Donald Trump and Vladimir Putin were in cahoots to hack the emails of the Democratic National Committee and the Hillary Clinton campaign; that Trump might have been a Russian agent since the late 1980s; that the key to the conspiracy might be a server in Trump Tower relaying information to a Russian bank; that the indictment of Donald Trump Jr. was imminent; that Trump Sr., according to the former director of the Central Intelligence Agency, had committed “treason”; that Michael Cohen had met with Russian intelligence operatives in Prague; that Trump had directed Michael Flynn to speak to the Russians prior to Election Day 2016; that Trump had instructed Michael Cohen to lie to Congress; that Paul Manafort had met with Julian Assange in the Ecuadoran embassy in London during the campaign; that secret indictments in an Alexandria courthouse would be unsealed on the day Robert Mueller filed his report on possible collusion between the Trump campaign and Russia. None of it happened.
We were told that Michael Avenatti, a trial attorney who appeared seemingly out of nowhere to represent Stephanie Clifford, aka “Stormy Daniels,” in her (tossed-out) defamation suit against Donald Trump, was a defender of the rule of law and election integrity who posed, in the words of Stephen Colbert, an “existential threat” to the Trump presidency. Avenatti appeared incessantly on cable news, earning the equivalent of $175 million in media exposure between March and May 2018. Last September, an article in Politico Magazine carried the headline, “Michael Avenatti Is Winning the 2020 Democratic Primary.” When Avenatti said he represented a client who had been a victim of gang rapes and druggings at parties attended by Brett Kavanaugh during high school, NBC News interviewed the client despite being unable to verify her (ludicrous) accusation. By last November, when he was arrested for domestic assault in Los Angeles, Avenatti had appeared on television more than 200 times in the space of 8 months.
On the morning I wrote this column a federal grand jury indicted Avenatti on 36 counts, including fraud. “Defendant AVENATTI would embezzle and misappropriate settlement proceeds to which he was not entitled,” reads just one sentence of the mind-boggling 61-page indictment. What media authorities had presented as true—that Avenatti was a serious attorney whose evidence would destroy the Trump presidency—has been revealed, once again, as utterly fallacious, a con. It’s up to the jury to decide if Michael Avenatti is a criminal. What’s beyond dispute, has been for a while, is that he is an unserious person, out for attention, celebrity, the notoriety and status fame brings. In the months of his ascendance, however, cable anchors and journalists did their best to avoid or downplay the truth of Avenatti’s character, lest it distract from their attack on the president’s.
As the influence of establishment media outlets has waned, their attempts to control the narrative have intensified. The cable networks and major print outlets have become more politicized, not less, as social media and streaming video make it much easier to expose hoaxes and puncture holes in the received wisdom. The Sentinels who protect the liberal media matrix are vigilant against thoughtcrime, they anathematize dissent, but they are less interested in the canons of professional journalism, such as presenting both sides of a story and refraining from baseless speculation. Right now they are heralding Ilhan Omar for her courage, turning Alexandria Ocasio-Cortez into the flag-bearer of the Democratic Party, and confident that no matter the opposition Trump will be defeated. Best be skeptical. As with all the other bogus stories, reality will make itself felt in the end. It always does.
Something feels off in the timing of our debate over the economy. A loss of faith in free markets, among intellectuals and the public alike, was only natural in the 1930s. But today? Intellectuals on the left and the right are more convinced than ever that our economic policies are deeply misguided, at the same moment that unemployment rates and wage growth are the best they have been in decades. When Americans answer polls, they express less and less confidence in free-market capitalism — even as they express more and more satisfaction about economic conditions.
Perhaps people are evaluating these questions against different time horizons. They may, that is, think that the economy is performing well at the moment but has become less capable of delivering broad-based prosperity over the course of a generation. If today’s conditions persist long enough, then, the reputation of capitalism may recover.
Timing is relevant to our evaluation in another way. If our economy has gotten worse at generating sustained prosperity, worse enough to make a loss of faith in capitalism understandable if not justified, then it matters when this decline began.
In 2015, during the last presidential campaign, Hillary Clinton suggested that “for decades” the economy had been offering a worse deal for most people. Her explanation: “For 35 years, Republicans have argued that if we give more wealth to those at the top — by cutting their taxes and letting big corporations write their own rules — it will trickle down. It will trickle down to everyone else.” The election of Ronald Reagan, in other words, was the turning point. It followed that many of his policies should be reversed: The top tax rates should go back up and unions should be strengthened.
If economic conditions have been deteriorating for an even longer period, however, then merely reversing Reaganomics might not be enough. And it is common to run into claims, apparently backed by data, that suggest as much. The Pew Research Center notes that the average wage, adjusted for inflation, fell between 1973 and 2018. It had risen steeply from 1964 (when the data series began) through 1973. Then it dropped for roughly two decades, and over the next two recovered but did not get back to its peak.
If real wages have truly been stagnant for longer than most Americans have been alive, then the economy has not worked in anything resembling the fashion we expect. Economic growth has been mostly an illusion: We have more stuff only because more of us work, large numbers of women having joined the paid labor force. If this picture is accurate, we need to make radical changes either to the economy or to our expectations of ever-rising prosperity.
There are, however, two big reasons to doubt the stagnation thesis. The first is that non-wage benefits have become a larger and larger element of compensation. Perhaps they have become too large an element: The tax code encourages employees to get health insurance through their companies rather than take higher wages and buy coverage themselves, and there are reasons to think we would be better-off if the tax code did not do that. But non-wage benefits have economic value to employees, and so looking at wages alone will cause us to underestimate employees’ material welfare.
The second reason for doubt is that a common method of adjusting for inflation — the one used in the Pew numbers cited above — overdoes it. The center-right social scientist Scott Winship has been indefatigable in explaining why using the Consumer Price Index (specifically a measure called “CPI-U”) as the gauge of inflation is a mistake, and how it warps our understanding of economic trends. It overestimates housing inflation before 1983, and ignores how consumer behavior responds when prices change.
Since inflation compounds, small errors each year add up to major changes over decades. Use a better measure of inflation, one based on personal-consumption expenditures, and the average wage rose by 21 percent from 1973 to 2018. (Average compensation must have risen more.)
The data on median family income also show a reassuring amount of growth. The family in the middle of the pack in 2015 made 45 percent more, with the right inflation adjustment, than its counterpart in 1970.
But the same numbers may also explain some of the public’s dissatisfaction with the economy. Median family income grew by a spectacular 58 percent in the 15 years from 1955 to 1970, then grew another 11 percent from 1970 to 1985, and 24 percent from 1985 to 2000. But the median family income of 2014 was slightly lower than it was in 2000.
What happened is that after the turn of the millennium we went through an extended period of slow growth punctuated by one mild and one severe recession. Median family income dropped more than 7 percent from 2007 through 2011, the sharpest decline since this data series started in 1953. It did not recover completely until 2015.
We have had a few good years since then. But it is not surprising that during the last two decades many Americans came to feel that their economic circumstances were stagnant and insecure. It is not surprising, either, that many of them have the sense that things used to be better — or that a generation of young people who started their work lives in a slow-growth economy tend not to have positive attitudes toward capitalism.
Instead of five decades of economic stagnation, we have had two decades of weak growth. That record does not suggest that the pro-market policies of the 1980s and 1990s were fundamentally mistaken. It suggests, rather, that we have discrete problems that deserve to be tackled.
High on the list of needed changes should be a reform of our monetary regime. It failed badly over the last dozen years. In 2008, excessive fear of inflation led the Federal Reserve to signal that it was going to tighten monetary policy even as the economy was sinking into a recession. It kept monetary conditions too tight after the crisis hit, too, for example by encouraging banks to hold additional reserves. These policies made the recession more severe and the recovery weaker. That these failures are not more widely appreciated is symptomatic of the misguided thinking that continues to govern monetary policy.7
Reforms should be undertaken in other areas, too. Our higher-education system is not working for most young people. Our immense health sector includes immense inefficiency. Regions of the country with high economic growth have imposed regulations that make it prohibitively expensive for less fortunately situated Americans to move there.
So we are called to be ambitious, but not revolutionary. Capitalism does not need to be overthrown or even rethought. Rather, the principles that make markets work need to be applied to some areas where they have not been present. Our economic system does not need dismantling. But it does
By George Landrith • Frontiers of Freedom
The taxpayer provided $7,500 subsidy to manufacturers of electric vehicles is about to expire. Not surprisingly, two of the biggest beneficiaries of this huge subsidy — General Motors and Tesla — are frantically trying to extend the subsidy and keep taxpayer money flowing into their bank accounts. Most of this effort is predictably supported by Democrats in Congress — the same people who enthusiastically lent there verbal support to the idiotic and laughably impractical “Green New Deal.”
Unfortunately, there are also a few Republicans who are joining the effort to extend the flow of taxpayer dollars to special interests like Tesla and GM. Elon Musk has made a handsome fortune by getting government to subsidize his businesses. For any Republican to support this approach is shortsighted and foolish. Giving the hard left political cover by making this insanity appear “bipartisan” is counterproductive. Serious minded legislators should not breathe life into extraordinarily bad ideas that are about to expire.
The Green New Deal is on its face absurd. No serious thinker can support the idea of government outlawing automobiles and planes, or mandating that every building in America either be entirely retrofitted or demolished and rebuilt. If a high school senior suggested this in a civics paper, he would have to be given a failing grade for proposing something that is not remotely plausible. Just as a research paper that calls for the licensing and regulation of unicorns, should be met with laughter and a failing grade, so too should the Green New Deal. Extending and expanding taxpayer provided subsidies for electric vehicles is simply taking bits and pieces of the zany Green New Deal and implementing them a piece at a time. The Green new deal is stupid as a whole and also stupid if taken a piece at a time.
Too often special interests with large lobbing operations wield their insider influence to get government to give them benefits and subsidies that are both indefensible and unjust. Government power should not be used to take money from single mothers struggling to make ends meet and then give that money to well-to-do professionals who want to drive fancy electric sports cars or to the corporations that make them. Yet, that is precisely what the subsidies for electric vehicle does — take money from hard working Americans and give it to wealthy corporations and individuals.
But the Left doesn’t merely want to extend the subsidies for electric vehicles, they also want to expand and grow the subsidies. Under current law, the subsidies are limited to 200,000 vehicles per manufacturer. But if the subsidy is revived, those doing the reviving, want to lift that 200,000 car limit and simply give Tesla and GM an unlimited supply of taxpayer cash.
When this subsidy was created, it was when the US was concerned about our dependence on foreign oil. But now America is a net oil exporter so the rationale is no longer there. And those who claim that electric vehicles are “cleaner” do not take into account things like the electricity that these vehicles use is generated at power plants that burn coal and natural gas. So to call them “zero emission vehicles” is, quite frankly, not honest or accurate. Moreover, the batteries used in electric vehicles are extraordinarily unfriendly to the environment. And gasoline vehicles are now so much more clean, efficient and environmentally friendly, that electric vehicles provide no substantial environmental benefit, according to a recent study by the Manhaattan Institute for Policy Research. So arguing for these subsides on environmental grounds is pretty lame.
But the real kicker is that the electric vehicle subsidies go almost exclusively to the rich. More than half claiming the subsidy earn more than $200,000 a year and nearly 80% claiming the subsidy earn more than $100,000 a year, according to a recent study by the Pacific Research Institute. There is no good reason to extend and expand a government program that taxes working class Americans so that a few rich guys can get some help to buy an expensive electric sports car. And the idea that large corporations with vast lobbying operations like Tesla and GM should be getting taxpayer cash is manifestly absurd.
If Americans want to buy electric cars, let them! But don’t require their neighbors or even worse, the working poor, to help pay for their fancy, new electric sports car! It is time for Congress to stop the insanity and stop taking money from hard working Americans and giving it to the rich to help them pay for their vanity sports car purchases. Congress should let the subsidy for electric vehicles die. Extending the subsidy would be an act of political avarice, cowardice and mendacity.
By Madeline Osburn • The Federalist
On Saturday, U.S. Sen. Josh Hawley addressed the class of 2019 at The King’s College in New York, where he called on the graduates to reject the Pelagian worldview that dominates our public way of life.
Hawley, who has also recently questioned the uses of social media and railed against Facebook for data and privacy violations, noted that Pelagius was loved by the wealthy, educated aristocrats of Rome, “because he validated their position and their power.” He called out the elites of Wall Street and Silicon Valley in his commencement address for the same Pelagian love of hierarchy enforced on Americans today.
Pelagius was a British monk and a moralist who rejected Saint Augustine’s views on sin and grace for a different view of human freedom and prosperity, in which freedom was earned. Hawley discussed how the elites of American society implement a Pelagian worldview, and ultimately threaten freedom for all humans.
A society that is divided by class, where one class has all the advantages, is a society gripped by hierarchy. It is also a society defined by elitism. Of course, our elites don’t use that word. They say their privileged position comes from merit and achievement. They point to their SAT scores and prestigious degrees. They talk about economic efficiency.
How Pelagian of them.
The truth is, the people at the top of our society have built a culture, and an economy, that work mainly for themselves. Our cultural elites look down on the plain virtues of patriotism and self-sacrifice. Things like humility and faithfulness. They celebrate self-promotion, self-discovery, self-aggrandizement. Self. Self. Self.
And then when industry shifts jobs overseas they say, well, workers should find another trade. I mean, capital must be allocated to its most efficient use.
When workers without college degrees can’t get a good job, they say, that’s their fault – they should’ve gone to college.
Now, I rather suspect – it’s just a hunch – that if globalization threatened America’s tech industry or it’s, say, banking sector, that we would hear a different tune. I slightly suspect we would hear that these industries are the lifeblood of the American economy and must be defended at all costs. And that’s just my point. The elites assume that their interests are vital, while everyone else’s can be done without. They assume their value preferences should prevail, while denigrating the loves and loyalties of the great middle of America. That’s the nature of elitism. And at the end of the day, this hierarchy, and this elitism, threaten our common liberty. For the steady erosion of working-class jobs and working-class life for millions of Americans means losing respect, it means losing their voice, it means losing their standing as citizens in this nation.
Our Pelagian public philosophy says liberty is all about choosing your own ends. That turns out to be a philosophy for the privileged and for the few. For everybody else, for those who cannot build an identity around what they buy, for those whose life is anchored in family, and home, and nation, for those who actually want to participate in our democracy, today’s Pelagianism robs them of the liberty that is rightfully theirs. And we cannot afford to let it to happen any longer. The age of Pelagius must end.
By George Landrith • RedState
Just days after President Trump called out House Republicans for supporting legislation promoted by presidential candidate Sen. Elizabeth Warren (D-Mass), Democrat leaders are scrambling to determine whether they can ram the bill or one of similar profile through the House this week.
Warren has been promoting legislation that would grant a Massachusetts-based Indian-tribe, called the Mashpee Wampanoags, recognition of land over 40 miles away from its tribal headquarters to build a $1 billion casino.
The political show heated up on May 8, when the president tweeted, “Republicans shouldn’t vote for H.R. 312, a special interest casino Bill, backed by Elizabeth (Pocahontas) Warren. It is unfair and doesn’t treat Native Americans equally!” This denouncement caused Democrats, who recognized that the bill would now never receive two-thirds majority approval as required, to scramble and pull the scheduled vote from the House floor.
Nevertheless, bad ideas never seem to die in Washington, and the special interests seldom give up. This case is no exception, and with the news of Trump’s twitter opposition fading, members of the Massachusetts delegation are now back at work pushing H.R. 312, as well as H.R. 375 – a bill that makes H.R. 312 look like the epitome of ethical D.C. governance by comparison. As such, allow me to take a step back and walk you through the current state-of-play.
Aside from the fact that the Massachusetts senator pushing this bill is the same one that once said, “gambling can be a real problem economically for a lot of people,” there are plenty of reasons to be skeptical of the intentions of those pushing the legislation.
The first among them is that both the Supreme Court and Department of Interior agree “the Tribe does not satisfy the ‘under Federal jurisdiction’ requirement of the…definition of ‘Indian’,” which it would need to receive any handouts of land from the federal government.
In accordance with the Indian Reservation Act, that would require the tribe to have received recognition from the federal government before 1935. Michael Graham at The Boston Herald noted that not only did they miss this deadline but, “The Mashpees weren’t federally recognized until 2007. And that only happened because of the money they poured on notoriously corrupt D.C. lobbyist Jack Abramoff.”
In addition to H.R. 312, which would specifically grant the well-heeled Massachusetts tribe a casino away from their reservation, another bill being pushed in the House, H.R. 375 would not only grease through the casino long sought after by Warren and the Mashpees; it would also allow for the same to occur for every tribe in the country – creating an endless cycle of lobbying victories in place of Supreme Court precedent, the rule of law, and states’ rights.
Should H.R. 375 pass, all that the roughly 600 recognized tribes in the country would have to do to strong-arm the federal government into recognizing their land is demonstrate that their tribe has received acknowledgement from the Department of Interior. And as we’ve seen from the Mashpee’s lobbying efforts, often all that will require is having enough lobbying connections and sums of cash to influence the right bureaucrats and representatives with key committee assignments.
The Native Americans that have sharply called out the Mashpee’s land claims would ostensibly agree that by advancing the interests of crony capitalists, this bill is a raw deal for the Native American people. Should the legislation go into effect, the rich and powerful will succeed at the expense of everyone else, and that’s simply not fair.
Republicans should not be fooled. Elizabeth Warren is just trying to provide crony favors for groups with strategic political value to her and Republicans should reject both bills outright.
(George Landrith is the President and CEO of Frontiers of Freedom — a public policy think tank devoted to promoting a strong national defense, free markets, individual liberty, and constitutionally limited government.)
By Dr. Miklos K. Radvanyi • Frontiers of Freedom
Ukraine, the geopolitical plaything de jour of Europe, held its latest presidential elections on March 31, 2019, and April 21, 2019, respectively. In the first round, 62.8% of the eligible voters cast their ballots. The challenger, Volodymyr Oleksandrovych Zelenski, won the first round with 30.24% of the votes. His opponent, President Petro Oleksiyovych Poroshenko, garnered 15.9% of the votes. In the second round, 61.37% of the eligible voters participated. Zelenski received 73.23%, while Poroshenko ended up with 24.46% of the votes.