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China’s Propaganda Centers On U.S. Campuses Must Be Shut Down

Our national security should require that all remaining Confucius Institutes on American soil be shut down — immediately.

By Tom Lindsay • The Federalist

A concerned student at Binghamton University, a public university in New York, challenged the propriety of the school’s partnership with the China-funded Confucius Institute on its campus earlier this year. Last month, the university published an imperious rebuff to the inquiry.

“The campus is confident that the concerns you raise in your email do not apply to Binghamton University’s [Confucius] Institute,” wrote the school’s attorney.

Simply put: Move along. There’s nothing to see here.

But the FBI is moving in the opposite direction. In 2018, FBI Director Christopher Wray testified before a Senate committee, declaring his intention to investigate the Chinese Communist Party-funded Confucius Institutes on American college campuses.

Confucius Institutes are ostensibly educational partnerships between the Chinese government and host schools in foreign countries. Their stated purpose is to teach language and culture, but they do much more than that.

Confucius Institutes Are Propaganda Machines

Professor Jonathan Lipman of Mount Holyoke College explains, “By peddling a product we want, namely Chinese language study, the Confucius Institutes bring the Chinese government into the American academy in powerful ways. The general pattern is very clear. They can say, ‘We’ll give you this money, you’ll have a Chinese program, and nobody will talk about Tibet.’” Tibet is one of the three “T-words” (Tibet, Taiwan, and Tiananmen) that cannot be discussed at the institutes, in violation of academic freedom and free speech.

Confucius Institute funding is tied to China Politburo member Liu Yandong, who formerly led the United Front Work Department. Steven Mosher of the Population Research Institute testified before Congress that the United Front Work Department’s purpose is “to subvert, coopt, and ultimately control Western academic discourse on matters pertaining to China.”

New York University historian Jonathan Zimmerman cautions that Confucius Institutes bear an alarming resemblance to the 1930s “Mussolini model” of funding “Italian language centers” in the United States to promote fascist propaganda. In light of academic freedom and transparency violations, Wray testified again in 2019, saying Confucius Institutes are “part of China’s soft power strategy and influence,” which “offer a platform to disseminate Chinese government or Chinese Communist Party propaganda, to encourage censorship, to restrict academic freedom.”

In announcing the FBI’s planned probe into campuses with Confucius Institutes, Wray corroborated what higher education researchers have warned for some time: These Confucius Institutes are not really educational projects and have no business being associated with higher learning institutions. They are propaganda centers planted on America’s campuses as part of China’s worldwide intelligence operations.

American colleges and universities depend for their existence on academic freedom and the transparency that supports it. Confucius Institutes, however, have been shown to abuse academic freedom and mock transparency.

It is thus heartening to see that roughly two dozen U.S. universities have moved to close their Confucius Institutes since 2014. In 2013, University of Chicago Professor Emeritus Marshall Sahlins penned an articleasking, “China U: Confucius Institutes censor political discussions and restrain the free exchange of ideas. Why, then, do American universities sponsor them?” He urged his university to set an example by revoking its partnership. In 2014, his university did just that, as did Penn State.

That said, about 80 schools still continue their ill-advised “partnerships” with these propaganda organs of the Chinese Communist Party.

Schools Are Waking up to the Propaganda

Joining in opposition to Confucius Institutes in America are the national executive board of the College Democrats of America (along with 15 of its state presidents), the executive committee and national committee of the College Republican National Committee, Students for a Free Tibet, the Intercollegiate Taiwanese American Students Association, Students for Falun Gong, and a number of other organizations, all of which can be found by going to the website of the movement’s organizing body, the Athenai Institute.

The American Association of University Professors — hardly a right-wing organization — called on universities in 2014 to drop their Confucius Institutes, finding that they “function as an arm of the Chinese state and are allowed to ignore academic freedom.” The Canadian Association of University Teachers urged universities to get rid of them as well.

This exodus is not restricted to American educators. This year, Sweden closed its last remaining Confucius Institute. A 2014 Washington Post editorial argued that “academic freedom cannot have a price tag,” urging that Confucius Institute partnerships should be terminated if universities refuse to publish the terms of their contracts with them.

However, too many American universities continue muzzled. According to the National Association of Scholars (NAS), which has been keen to this threat for some time, as of May 1, there are a total of 86 Confucius Institutes in this country. “This includes six that are scheduled to close in summer 2020: the University of Maryland, New Mexico State University, the University of Missouri, the University of Arizona, Miami University of Ohio, and the University of California-Davis.” NAS also found seven institutes at K-12 public school districts.

It’s Time to Shut Down Confucius Institutes for Good

That roughly 80 universities have failed to safeguard their institutions’ commitment to free speech against these propaganda efforts means that either they lack the moral fiber required to defend American core values, or they were never that hot about American values in the first place.

Consider the recent survey conducted by the nonpartisan Foundation for Individual Rights in Education, which found that 77 percent of colleges now use secret social media blacklists “to censor the public, in violation of the First Amendment.” Or perhaps it’s a third option: Is it all about the money? Lipman remarks, “In this economy, turning [Confucius Institutes] down has real costs.”

NAS reveals that the Chinese government “selects and pays the teachers, sends free textbooks, and offers upwards of $100,000 a year in annual funding” for the institutes. Although universities “are supposed to match” China’s contributions, they “typically do so by volunteering classroom and office space. The result is that colleges can charge tuition for courses that are being funded — and whose content is largely being decided — by the Chinese government” (emphasis added).

NAS’s findings are supported by a study published in The China Journal by Brookings Institution fellow David Shambaugh, who found that the funding “is in fact laundered through the Ministry of Education.” Laundered from where? From communist China’s External Propaganda Department.

If you still wonder about the purpose of Confucius Institutes, consider this assessment from someone who should know. Li Changchun, a member of the Politburo Standing Committee, praised the institutes as “an important part of China’s overseas propaganda set-up.”

What can be done? A number of proposed remedies are already circulating. In addition to sounding the alarm, NAS has called on schools that accept Confucius Institute dollars to refund the same amount back to the federal government, as well as enforce federal transparency requirements on the institutes. These and like measures would be a good start.

Better still, our national security should require that all remaining Confucius Institutes on American soil be shut down — immediately.


The Virus Rules

Column: How a microbe will decide the 2020 election

By Matthew Continetti • The Washington Free Beacon

On March 18, at a press conference flanked by high-ranking officials, President Trump described himself as a “wartime president” fighting an “invisible enemy” known as the coronavirus. The president, it seemed, was beginning to reckon with the extent of the economic, epidemiological, social, and psychological damage the pandemic would cause, and to act appropriately. “We must sacrifice together,” Trump said, “because we are all in this together, and we will come through together.”

An anxious populace welcomed the appearance of a strong leader at a time of national emergency. The president’s job approval ratings rose in the following weeks, reaching a high of 47 percent in the Real Clear Politics average on April 1. The gap between Trump and former vice president Joe Biden narrowed to five points.

How long ago that seems. Some 122,000 deaths and tens of millions of lost jobs later, and in the middle of a cultural revolution sparked by the viral video of George Floyd’s death at the hands of Minneapolis police, President Trump finds himself backed into a corner. The rhetoric of a wartime presidency is gone. His coronavirus task force is barely visible. In a symbol of declining levels of support among white voters critical to his reelection, attendance at the Keep America Great rally in Tulsa failed to live up to expectations raised by Trump’s own campaign. The president’s job approval rating has fallen to the low 40s. Biden’s lead has widened to 10 points.

There is no shaking the coronavirus. It is the ever-present backdrop against which our national nervous breakdown is taking place. The good news is that deaths have declined to fewer than 1,000 per day. But that number is still higher than the casualties reported by other liberal democracies in Asia and in Europe, and it may rise in the coming weeks. Sclerotic bureaucracies, poor decision-making, and ill communication at every level of government wasted the opportunity to suppress the virus through relentless testing, contact tracing, and quarantine.

By the time testing ramped up to the point where it could become the centerpiece of a suppression strategy, Americans had grown tired of lockdowns enforced throughout the country without regard to local conditions and to basic freedoms, and weary of a public health establishment whose pronouncements—New York good, Florida bad; protests good, yeshivas bad—seemed driven by partisanship and ideology.

The virus exposed racial, ethnic, and class cleavages that inflamed elite opinion and increased demands for social justice. And the economic devastation left an environment permeated by anxiety and filled with bored and unemployed people, some of whom felt as if they had no stake in the system and no reason not to smash things. The civil unrest of the past month has analogues in earlier pandemics. Local, state, and federal leaders met the disorder with the same woolly-headedness, indecision, posturing, and lack of compassion that they have applied to this one.

Trump has tried to reinvigorate his candidacy by resuming a normal schedule. Recently, in addition to Oklahoma, he has traveled to Arizona and Wisconsin, but at each stop he has run up against the agent of his electoral distress: the plague.

The arena wasn’t full in Tulsa because of a justified fear, on the part of some who otherwise would have attended, of participating in a large gathering in an enclosed space. During his monologue the president remarked, as case numbers rose in 29 states, that he had told his team to “slow the testing down please.” The content of his speech to a youth group inside a Phoenix megachurch had to compete with questions over how widely face masks were distributed among the crowd. As the president traveled to Green Bay for a town hall with Sean Hannity, Texas governor Greg Abbott paused his state’s reopening and halted elective procedures at hospitals in four counties.ADVERTISING

The spread of the virus results in panic, and the panic results in economic losses, social isolation, and polarized media and culture primed for incitement. That is why 80 percent of registered voters say the country is out of control, why 68 percent say the country is on the wrong track.

What the coronavirus has done is rob President Trump of his ability to control events. The president has a knack for putting his human opponents on their toes, for establishing facts on the ground that are difficult to contest. But the coronavirus doesn’t read Tweets, doesn’t watch television, and doesn’t go away if ignored. It has to be defeated, or endured. America prides itself on having a government of, by, and for the people. But here, today, the virus rules.


Increasingly Cheap Nat Gas Will Help Fuel Econ. Recovery

By George Landrith • Real Clear Markets

After months of sheltering in place, Americans are finally returning to their favorite restaurants, stores, and barbershops. As of June 1, all 50 states have started to reopen.

We may not know what life after the coronavirus looks like, but one thing is certain. As life returns to normal, millions of Americans will rely on natural gas to refuel their cars and reopen their businesses.

Fortunately, America’s energy sector was well prepared to survive the coronavirus outbreak. Having weathered the storm, natural gas producers will help get the economy humming in a way that benefits American consumers and the environment alike.

COVID-19 certainly caused problems for America’s energy sector. But even despite these recent setbacks, natural gas has proven quite resilient. U.S. natural gas prices have remained relatively steady over the past few months. And the U.S. Energy Information Administration expects average natural gas consumption to fall by less than 4 percent this year.

This shouldn’t come as a surprise. America’s shale energy boom helped make natural gas the leading source of electricity nationwide. More than 38 percent of the nation’s power came from natural gas in 2019. With demand expected to rebound as early as next year, it seems like natural gas will remain the nation’s go-to energy source for the foreseeable future.

That’s great news for Americans. Ever since the United States became the world’s leading producer of natural gas, households across the country have seen their energy costs plummet. Americans will continue to benefit as the country grows more reliant on natural gas. Low gas prices will add $2,700 to the average household’s disposable income this year, according to an analysis from the research firm IHS. That number is expected to rise to $3,500 per household by 2025.

By moving the country away from coal, the natural gas boom also helps the environment. Last year, America once again led the world in reducing energy-related CO2 emissions. Between 2000 and 2019, the United States achieved a whopping 1 gigaton emissions reduction — more than any other country during that period.

These environmental gains will continue as gas-fired plants displace more of their coal-fired counterparts. The EIA projects that domestic energy-related CO2 emissions will keep falling well into the next decade.

America’s energy renaissance has even helped Europe reduce its emissions. Thanks to record-high natural gas imports, Europe saw a 15 percent increase in power generation from natural gas in 2019 — and a 20 percent decrease in the use of coal. Unsurprisingly, the European Union and the United Kingdom saw a 12 percent decrease in power sector CO2 emissions last year. Globally, CO2 emissions flattened in 2019.

Such a sustained drop in global carbon pollution would have been unthinkable just two decades ago. But thanks to the natural gas renaissance made possible by hydraulic fracturing, reductions like these have become the new normal.

It will take a lot to recover from the economic disruption of COVID-19. But come what may, the country can rely on natural gas to power the economy and clean up the environment.


For The Moment, Axe The Taxes

By Peter Roff • Townhall Finance

For The Moment, Axe The Taxes
Source: AP Photo/Susan Walsh

President Donald Trump has so much on his plate right now, it’s difficult to see how he prioritizes the actions he must take for the country’s good. There’s so much going on in so many different areas it’s hard to recall any president in recent memory having to face so much at any one time at any one time.

All presidents must deal with crises. How they lead is part of the way we judge their fitness for office. And there are a lot of folks who say his leadership lately has been lacking as the nation deals with the novel coronavirus.

That’s remarkably ungenerous. The president mobilized the federal government and private industry to respond in ways not seen in decades. It’s impossible to be certain but is nonetheless highly likely the interventions he led produced faster testing on a broader scale, more ventilators than needed, and helped keep the spread of COVID-19 under control.

We may never know. All the models produced by the so-called public health experts working in the smart institutions were way off, even when early-stage interventions are accounted for. Meanwhile, as the result of actions taken by many of the nation’s governors, mostly in blue states, the U.S. economy tanked, a record number of jobs were lost in a single month, and Congress spent so much money on relief that might not even have been necessary it will take at least a decade of above-average economic growth to recover.

For the immediate future, President Trump would be both politically smart and doing the best thing for the country if he focused on measures to get the economy open and off its back. Businesses need to reopen. Lockdowns, if they are needed again (if a still-at-this-point hypothetical second wave hits), need to be localized, targeted, and well thought out. People need to get back to work, pay down their debt, and start saving again.

Several steps can be taken to help bring about the V-shaped recovery most everyone is hoping for. There are lots of positive indicators in the economy that its possible. Every policy decision from now until at least the end of summer ought to be taken specifically to enhance the possibility that will occur.

Just as the president was right to postpone tax filings and payments from April 15 to July at the height of the crisis, he would be right to have Secretary of the Treasury Steve Mnuchin tell the U.S. Internal Revenue Service to postpone the payment of those taxes until sometime in 2021.

The economy has just started showing signs of life. Taking $1 trillion out of it – which is what it would be if all the federal personal and corporate income taxes, estimated payments for the self-employed, federal excise taxes, the taxes paid by job-creating small businesses, and the outstanding balance due on returns from prior years – would almost assuredly plunge it back into a recession and push the recovery off by months.

The National Bureau of Economic Research says the recession caused by the lockdowns resulting from the coronavirus panic started in February. The NBER – and they’re the ones who get to make the decision – called it steep but short-lived. July 2020 should be a month of recovery because of strong, perhaps stronger than normal, economic activity. But that only happens if people are engaged in productive activity, buying and selling goods and services in the marketplace rather than sending Uncle Sam back a good chunk of the so-called stimulus.

Several prominent economists have endorsed this idea as being curative. Influential political groups including the National Taxpayers Union and Americans for Tax Reform have also signed on. The president and Secretary Mnuchin have it within their power to make this happen. They should order it be done with all dispatch. Certainty is important as businesses plan what to do next, whether to hire or fire, whether to stay open or close, and whether to expand. Knowing that the taxes due would not have to be paid until sometime early next year gives them that much more time to use their available cash to put people back to work. Making America Great and Keeping America Great can only be accomplished if America is working.


New York Times Embraces Partisan ‘Truth’ Over Objectivity

By Andrew Stiles • The Washington Free Beacon

The New York Times continues to shake up its editorial page after the resignation of James Bennet, the opinion editor who angered many of his former colleagues by publishing an op-ed written by a Republican.

In addition to hiring Charlotte Greensit, former managing editor at the Intercept, the Times announced the promotion of Talmon Smith to the position of staff editor. Smith, who has previously written for Salon, the New Republic, and HuffPost, has a history of what some would describe as blatant partisan bias on social media.

“All I want for Christmas is impeachment,” Smith wrote in November 2017. That was before he started working for the Times, which maintains a strict social media policy under which its journalists “must not express partisan opinions [or] promote political views.” The Times demoted a deputy editor for suggesting on Twitter that big cities (Minneapolis, Atlanta) are not representative of the broader regions (Midwest, Deep South) in which they reside.

It is not clear whether Smith’s descriptions of President Donald Trump as a fascist “dick” and “openly bigoted white man” who is “AS RACIST AS THE SKY IS BLUE” would run afoul of that policy.

Smith even criticized the Times in 2017 for a headline suggesting Trump had a chance to “unify” the country in the wake of Hurricane Harvey. He has also dabbled in failed punditry, asserting in 2018 that former vice president Joe Biden “has an approximate zero percent chance of winning a 2020 primary.”

Smith’s promotion comes as professional newsrooms, and the ornately educated liberal youths who populate them, debate the merits of objectivity in journalism. Restrictive social media policies such as those at the Times have come under fire for limiting the ability of journalists to express their feelings about politically charged issues.

Some outlets, such as Axios, have responded by allowing their employees to take part in public protests. “We trust our colleagues to do the right thing, and stand firmly behind them should they decide to exercise their constitutional right to free speech,” Axios founder Jim VandeHei said in a statement.

That statement, and the willingness to allow journalists to take part in protests, appeared to conflict with the opinion VandeHei expressed in a 2018 column advising media outlets to “ban their reporters from doing anything on social media—especially Twitter—beyond sharing stories.” VandeHei argued that “snark, jokes and blatant opinion are showing your hand, and it always seems to be the left one. This makes it impossible to win back the skeptics.”

This view may be prevalent among media bosses, but it is increasingly under attack by younger journalists who consider their profession a form of political activism.

“What if we built a journalism where instead of judging a reporter’s ability to be fair and accurate based on their tweets, we instead judged them based on their journalism?” tweeted Pulitzer Prize-winning race journalist Wesley Lowery while promoting his widely disseminated (among elite journalists) piece on the media’s “Reckoning Over Objectivity, Led by Black Journalists.”

Smith’s tweets have become more subdued since joining the Times but continue to address controversial topics. For example, he retweeted more than one positive assessment of disgraced editor James Bennet’s humanity and suggested that liberals should stop shaming people for not social distancing following the mass protests in response to the police killing of George Floyd. Smith also tweeted in praise of Dave Chappelle, who some have criticized as anti-transgender, and said he “will happily take a memorial day [part] 2 based on white guilt,” in reference to the recent observance of Juneteenth.

The entire media industry is in the midst of a revolution of sorts. At the very least, it’s a hasty attempt on behalf of white industry leaders to express their opposition to racism and support for left-wing activism. It’s the new normal, for now.


Trump’s controversial rally

A lot to argue about!

By Dr. Larry Fedewa • DrLarryOnline.com

Trump held his first post-lockdown rally last evening in Tulsa, Oklahoma. There was controversy before, during and after the event. Criticism was not confined to the content of the speech as usual but spread over the unusual areas of the timing, location, venue, and attendance of the rally.

The earliest criticism concerned the timing of the event. A Trump rally, held in an indoor arena, was criticized as a blatant violation of the CDC current (and often changing) recommendations regarding safeguards against the “Chinese virus”, as Trump calls it. Among the most obvious violations were the lack of social distancing in the densely packed house, without compulsory masks, and held indoors (as opposed to outdoors).

After the rally, much was made of the lower attendance. Not only were there noticeable empty bleachers (which the network cameras showed frequently), but also the scheduled outdoor appearance by the President was cancelled because the only crowd out there was the ever-present (thankfully peaceful) protesters. Nevertheless, there were approximately 18,000 or more in attendance, counting the seating on the floor of the arena, out of a published capacity of 19,000. One unaccounted-for factor was the absence of the 0ver-65 crowd who tend to be among the most loyal of the Trump base.

So, what to think about all this? First of all, there is the symbolic significance of the scheduling. The President has shown in various ways that the public health contingent – which essentially scared him (and all of us) into the lock-down in the first place – is no longer calling the shots in the White House response to the pandemic.    

This column remarked very early in the process the fact that the public health perspective is necessarily limited. Never before in American history has this group been given such control over public policy. At the first sign of a public health threat, Mr. Trump, in typical CEO practice, called into service the finest experts he could find in this field – which he admitted was far from his own experience. He then followed their advice, quite uncritically. As I pointed out at the time, this was a huge gamble: if it went wrong, it could, among other things, cost him the election and even his place in history. (See https://drlarryonline.com/trumps-huge-gamble/)

After a while, he did begin to appreciate the narrowness of that perspective. But he was stuck in the middle of a lock-down which he had ordered! Thus, began the journey back to recovery, to normalcy. His diffusion of power to local politicians was a stroke of genius. Not only did he gradually shed the sole responsibility for the lock-down, but he made friends and evoked loyalties among an entire new group of politicians with whom he had had little prior contact. And it was acting out the essence of the Constitution, which sees the sovereign states as surrendering and thereby validating some of their powers to create the federal government.

This entire scenario was moving along quite nicely. Then two unexpected things happened: the Washington Democrats in Congress began to “adopt” the public health establishment, endorsing ever more stringent limitations on the population in the name of the pandemic. As this attitude began to percolate out to the state governors, the recovery slowed down.

By this time Trump and his people had fully realized that the lock-down had nearly ruined the economy and still threatened to do so. They went into overdrive to speed up the recovery. Trump was still winning, however, until the next shoe dropped: a cellphone video of the brutal murder of a defenseless Black man by a White policeman in Minneapolis went viral on social media. The reaction was a worldwide protest against civil authority in America. After a few peaceful marches, the movement turned violent and radical leadership emerged.

Among other secondary effects, the total attention of America — and much of the world – turned away from the economic recovery and toward the protesters and the rioters.

Some past events of this type have elicited soaring rhetoric from leaders such as the Reverend Martin Luther King, Jr. and Senator Robert Kennedy to begin healing the wounds. Soaring rhetoric is not one of Mr. Trump’s talents. Nor does he have the soothing, compassionate manner of a Bill Clinton or a George Bush. In the face of these disasters, Donald Trump stumbled.

The Democrat opposition immediately made him the face of the disaster. His poll numbers have tumbled, yielding to the reclusive Mr. Biden whose silence has served him well.

Trump may not be a great orator or an instinctive healer, but he does excel at one thing: he can draw thousands of impassioned participants to his rallies. This is his unique sandbox and he felt the urgency to activate it.

The Tulsa Rally was the first step on Trump’s road to recovery. It was an act of defiance to the public health establishment and their new sponsors, the Democrats and the press. It also emphasizes the simple truth that the virus is going to be around for a long time, and we have to learn to live with it while carrying on our normal economic activity. Our financial survival as a nation depends on it.

Whether Trump’s new strategy succeeds or not depends on the next steps. In one of Mr. Trump’s favorite sayings, “We’ll see what happens.”

Indeed, we will.


CA Dems Want $20 Million to Enforce Anti-Gig Law Amid Budget Crisis

Critics say law will exacerbate $54 billion deficit, economic downturn

By Collin Anderson • The Washington Free Beacon

California Democrats allocated $20 million in a recently passed budget to enforce a controversial labor law that some experts say has hampered the state’s economy and pandemic response.

The budget, which passed the Democrat-controlled state legislature on a party-line vote, provides $20 million to enforce Assembly Bill 5 (AB5), a law that limits employers’ ability to classify workers as independent contractors. The money is divvied up between three state agencies—the Department of Justice, Department of Industrial Relations, and Employment Development Department—to conduct audits, carry out prosecutions, and levy fines and penalties on employers. Republican assemblyman Kevin Kiley said that ramped up enforcement will only hurt businesses struggling in the wake of statewide shutdown orders tied to the coronavirus.

“That’s what the money is for, specifically—to go after small businesses and independent contractors at a time when they’re struggling more than they ever have before,” Kiley told the Washington Free Beacon.

The budget provision comes as the state faces an impending $54 billion fiscal deficit. Democratic governor Gavin Newsom revised his initial $222 billion budget proposal in May, saying that he would fund only the “most essential priorities.” The $20 million allocated to enforce AB5 survived the chopping block in the $143 billion budget passed by the assembly and state senate. Newsom, who did not respond to a request for comment, slashed education funding and said that first responders would be “the first ones to be laid off.”

The budget proposal sparked criticism from House Minority Leader Kevin McCarthy (R., Calif.), who said that the proposal will hurt his constituents. He called the multimillion-dollar allocation for enforcement “disappointing, but not at all surprising.” He criticized state leaders for misplacing their priorities and refusing to adapt to the economic challenges brought on by the pandemic.

“Gig economy workers have felt the ramifications of this legislation for months now, and the coronavirus pandemic has only made securing work that much more difficult,” he told the Free Beacon. “California’s independent contractors deserve a government that can adapt to unanticipated challenges, not one that exacerbates problems by continuing to pursue a half-baked idea.”

Democratic leadership in the state assembly and senate did not respond to requests for comment.

Newsom in April rebuffed calls from state and federal legislators, small business owners, and more than 150 economists to suspend AB5, touting the law as an example of the state’s national leadership. Under AB5, employers must meet strict requirements in order to classify their workers as independent contractors. Its 2019 passage led to widespread layoffs as businesses struggled to afford the increase in legally imposed labor costs. Experts argue that the law has made it nearly impossible for unemployed workers to take on temporary jobs from home, further exacerbating the economic downturn caused by the pandemic. More than 5.4 million Californians have filed for unemployment—more than the population of 28 states.

“You’d think at a time when we shut down small businesses for months, we’d be doing everything we can to help them out,” Kiley said. “It’s a failure to understand the need of the moment, which is to propel economic recovery, to help small businesses get back on their feet, to promote workers.”

Reallocating the $20 million set aside to enforce AB5 would hardly alleviate the state’s budget shortage—the Los Angeles Police Department alone has spent $40 million in overtime pay for officers handling ongoing Black Lives Matter protests. But according to Pacific Research Institute fellow Kerry Jackson, Newsom’s refusal to suspend AB5 has contributed greatly to the fiscal crisis, and stricter enforcement will only exacerbate the problem.

“The pandemic lockdown dried up tax revenues because so many jobs were lost. Some of the lost revenues could have been made up if those who’d been laid off had been able to work as independent contractors,” Jackson told the Free Beacon. “But the law made it illegal for them to work. So no work, no income tax revenues.”

While Monday’s budget is unlikely to be signed by Newsom in its current form, the governor’s own budget proposal also includes $20 million to enforce AB5, meaning the money is unlikely to be cut. Kiley said that Democrats’ unwillingness to budge on the law reflected the power of special interest groups in the state—AB5 was written by the AFL-CIO, the country’s largest federation of labor unions.

“Unfortunately, so far there hasn’t been any movement towards doing away with the $20 million or redirecting it somewhere else,” Kiley said. “It shows how influential these special interests are, that the governor and the legislature will not budge, no matter how strong the arguments are for doing things differently.”

Newsom has until June 30 to sign the budget into law.


IAEA: Iran Engaged in Secret Nuclear Work

U.N. reprimands Tehran amid ongoing nuclear ramp-up, development of missiles

By Adam Kredo • The Washington Free Beacon

A general view of a heavy water plant in
The Arak heavy water plant in Iran / Getty Images

Iran engaged in covert nuclear work that breached international accords as recently as 2019, according to nuclear inspectors who have been blocked from accessing these contested military sites.

The International Atomic Energy Agency’s (IAEA) board of governors officially reprimanded Iran on Friday for denying inspectors access to at least two sites now known to have been part of Tehran’s secretive atomic weapons program.

The two locations have remained off limits to the IAEA despite evidence they were used for illicit nuclear operations in the last year. At least one of these sites contained a secret high-explosives testing site that could have been used to advance Tehran’s nuclear know-how.

The resolution was forwarded by France, Germany, and the United Kingdom, all of which are still party to the nuclear accord with Tehran. While these nations have sought to preserve the accord, their willingness to publicly reprimand Iran is a new sign of mounting frustration with the country’s behavior. In addition to blocking IAEA access, Iran has ramped up its development of advanced missiles and enrichment of uranium, the key component in a nuclear weapon, to levels needed for a bomb.

The resolution highlights what these nations described as a “continued lack of clarification regarding Agency questions related to possible undeclared nuclear material and nuclear related activities in Iran.”

The move was met with anger by Iranian officials, who said they will continue to block access until the international community offers greater concessions, particularly relief from biting economic sanctions that have crippled the country’s economy.

Secretary of State Mike Pompeo said Iran’s behavior is proof that it continues to lie to the world about its development of nuclear arms and has no intention of curtailing its nuclear program.

“Iran’s denial of access to IAEA inspectors and refusal to cooperate with the IAEA’s investigation is deeply troubling and raises serious questions about what Iran is trying to hide,” Pompeo said in a statement.

Meanwhile, Iranian military leaders announced on Thursday the successful test-firing of both short- and long-range cruise missiles, which could be used in a conflict with the United States and allied partners operating in the region. The firing of these missiles runs counter to United Nations restrictions on Iran’s missile program.

The tests were conducted in the Indian Ocean and Sea of Oman, according to reports from Iran’s state-controlled media. Tehran claims the military operation was “more sophisticated” and “more difficult” than previous drills.

The launch marks a significant escalation in Tehran’s ongoing standoff with U.S. military vessels operating in the region. Iranian military boats have routinely harassed American ships and sought to choke off access to key shipping lanes in international waters. The display of new cruise missiles is a warning to the United States that the Iranian regime is ready for a military confrontation.

A United Nations embargo on Iran’s purchase of advanced weaponry is set to lift later this year. If the United States fails to extend the ban, nations will be able to legally sell Iran missiles and other offensive weapons. The Trump administration is currently pressing its allies at the U.N. to extend this embargo, though these efforts are likely to be blocked by Russia and China, Tehran’s top patrons.

If the arms embargo lapses, the United States is likely to push for a so-called snapback, the reimposition of all international sanctions that were lifted as part of the nuclear deal.

An Iran analyst said Tehran’s latest moves are a ploy to stave off international scrutiny.

“All eyes should be on Iran now to see how it will make good on its threats which were intended to scare and prevent the vote on this critical [IAEA] resolution,” said Behnam Ben Taleblu, a senior fellow at the Foundation for Defense of Democracies, a hawkish think-tank with close ties to the Trump administration. “Tehran often uses such flashpoints to incrementally ratchet up the pressure through expansion of its nuclear program.”

Ben Taleblu said that nations such as France, Germany, and the U.K. will have to get tougher on Iran if they want to change its behavior. Although they backed the IAEA’s latest censure, these nations also have worked to block the reimposition of major sanctions on Tehran.


How a So-Called “Expert Witness” Derailed an East Texas Jury

Pat

The dynamic nature of our tech sector fosters a flow of new startups entering markets constantly.  The speed at which companies can collaborate and innovate can significantly influence which may be the next Apple or Google and which will fail in their first year.  These innovations, often the result of tireless investment in R&D, are frequently safeguarded through our system of intellectual property – through protections like patents and trade secrets.

However, abuse exists in nearly every system, and a 2018 Texas trade secrets decision boasts record-setting spoils for potential abusers and how a so-called expert witness can derail a jury. This case, if left unchecked, is a stark warning of just how high the cost of collaboration can be.

As I’ve previously written, since the enactment of the Defense of Trade Secrets Act (DTSA) in May 2016, the United States has experienced a rapid spike in trade secret lawsuit filings – with the number of civil trade secrets cases filed in federal and state courts increasing by 30%. 

For example, in 2018 a suit involving autonomous-driving technology trade secrets between Uber and Waymo resulted in a $245 million settlement in San Francisco early last year. In another California-based lawsuit, a jury awarded the U.S. branch of a Dutch semiconductor maker, ASML, $223 million in its suit against a local rival, XTAL, for misappropriating trade secrets.

But the $740 million award handed down in Bexar County, Texas’ Title Source v. HouseCanary takes the cake for 2018’s most costly verdict in a trade secrets case. This record-setting award is especially concerning because just days following the decision it emerged that the victor, HouseCanary, may never have possessed any of the trade secrets at issue in the first place.

Title Source, now known as Amrock, sued Silicon Valley-based HouseCanary for breach of contract when the company failed to develop an automated valuation model (AVM) mobile application. In the meantime, Amrock developed their own AVM based off common industry practices and publicly available information. HouseCanary, in turn, accused Amrock of trade secret misappropriation.  

The case is currently under appeal with the Texas Fourth Court of Appeals, which rests on the new evidence that emerged only after the award was already handed down. Whistleblower testimony from four former HouseCanary employees confirms that the app they were hired to develop was not a “functioning product,” was “vapor ware,” and had “none of the [promised] capabilities.”

Notably, the high-dollar remedy was awarded with reliance on suspect “expert” testimony from HouseCanary’s witness, Walter Bratic. As it turns out, Bratic knows his way to the witness stand, having established a career as an expert witness willing who doesn’t let logic or facts inhibit his “expertise,” so long as the check clears. Several of his lofty uncorroborated damages estimates have ultimately resulted in reversal on appeal with his logic-defying damages figures cited prominently among the reasons why the lower court had erred in its initial findings.

In what would have been one of the largest patent awards to date, a U.S. District Judge in East Texas in 2011  overturned a $625 million jury verdict in Mirror Worlds LLC v. Apple Inc.  The judge  pointed out “the scope of Mirror Worlds’ case and Apple’s potential liability exposure changed during the course of trial” and “Mr. Bratic did not adjust his damages calculations after dismissal of Mirror Worlds’ indirect infringement claims,” – which would have reduced damages by approximately 50% to about $300 million.

In his opinion overturning the verdict, the judge wrote the record “lacks substantial evidence to support the jury’s award of damages” liable for patent infringement, taking particular issue with the damages in Bratic’s dubious valuation suggesting Apple should pay whopping royalties.

However, these damages are only considered if it was proven that the infringed patent was so central to the entire product that it can be considered key driver of customer demand. On whether or not that standard was met, the appellate judge  stated, “The record lacks substantial evidence to support the jury’s award of damages. The Court grants Apple’s request for Judgment as a Matter of Law to vacate the jury’s damages award.” 

Bratic’s handiwork doesn’t end there. In 2013, his testimony in Xpertuniverse v. Cisco was deemed baseless and thrown out after he employed a bizarre “hypothetical negotiation” in which he contended both parties would have agreed to a $32.5 million lump sum royalty.

In the 2015 case IVS v. Microsoft, in which IVS accused Microsoft’s Xbox and Kinect of infringing on a facial recognition patent, the court ruled that Bratic erred in opining that royalty damages should be a running royalty of 3x the court-ordered royalty rate based on a prior case involving handheld controllers.

Likewise in his damages valuation testimony for HouseCanary, Bratic used an outrageous price of $11 per use for the AVM, which emails between Amrock employees from February 2015 make clear would never have been the agreed upon rate.

This case is the epitome of trade secrets litigation abuse – potentially an ominous high-dollar indication of an even costlier problem with broader impact on American innovation and competitiveness in a global technology sector. If the decision stands, the established precedent will further open the floodgates for abuse of IP protections – offering an attractive option for companies looking for a way around fair market competition and innovation.

What began as a $5 million contract has morphed into three-quarters of a billion dollars and a legal spectacle – in large part due to faulty reasoning and voodoo math of an expert witness with a history of over valuating for his clients and being overturned by the courts. Legal scholars and the entire tech sector are closely watching to see how this case plays out for the future of American innovation. 


The Marketplace Drives Prices Down and Quality Up

By George Landrith • Townhall

Unexpected expenses are never welcome and no one likes a costly surprise. So it’s no wonder that there is a lot of talk in Washington and Congress about “protecting” patients from surprise medical bills. Current legislation — SB 1895 — sponsored by Senators Lamar Alexander (R-Tenn) and Patty Murray (D-Wash.) makes such claims. It sounds good until you realize that all the “protecting” talk is just that — talk.  Even worse, is that rather than protecting consumers, it will make things worse. 

The most common cause of a surprise medical bill is when a person uses a healthcare provider that is not in their insurance plan’s network of providers. While it doesn’t happen that often, it most typically happens in a hospital emergency room — either because the patient is not able to consent to care or because the patient received inaccurate information about insurance coverage.  

Insurance companies have contracts with healthcare providers (both doctors and hospitals) to provide medical services at pre-negotiated discounted rates. That makes them “in-network.” The “out-of-network” providers charge a price without any pre-negotiated discounted rates, meaning the out of network costs are greater. 

While it is true that most doctors are in most insurance networks and hospitals often have ways to shield their patients from higher costs, there are occasional gaps that remain. And while it is uncommon, it can be costly when it occurs. But despite their rarity, these circumstances are used by politicians to make us think they are proactively solving problems for our benefit. Sadly, they are doing nothing of the sort.  

There are a number of proposals currently under consideration in the halls of Congress to fix surprise billing, but they have a couple important things in common. In one-way or another, all of these pieces of legislation entrust the government with the power to set prices. This will impose heavy costs even if executed properly, an idea that is almost laughable given the government’s track record on reducing costs.

This reminds me of the Obama-Biden repeated promise that they had a plan that would save us all thousands of dollars every year and allow us to keep our healthcare plan if that’s what we wanted. Obviously, Obama and Biden failed to deliver on that promise. It was the lie of the year even as judged by liberal fact checkers. Literally, millions of Americans lost their preferred plans and virtually everyone saw their health insurance costs increase, not decrease, by thousands. 

So a healthy dose of skepticism about promises to fix surprise billing with government price controls is entirely justified. It should not be enough for politicians to repeat over and over the mantra that they’ve got the fix. We’ve seen this play before. It doesn’t end well.  

Government-imposed price controls skew incentives and reduce the availability of quality healthcare.  To make things worse, government-imposed price controls also reduce the likelihood of future healthcare innovations and slow the development of promising medicines and procedures. But the bad news doesn’t end there — current proposals shift more and more power to health insurance companies, rather than giving consumers more control over their own healthcare. 

Regardless of what their true motives were or are, the results we have witnessed in the last 50 years from politicians promising “fixes” has been that things end up costing a lot more than promised, and government gets more and more control. Those who can afford lobbying efforts may escape the costly impact of these government mandates. But rarely do these promised fixes on balance help the average citizen.   

The marketplace — and the negotiations that take place when you have two or more parties all trying to maximize the value that they receive — has a knack for providing high quality goods and services for the lowest possible prices. That is the process that has brought us smart phones that have more computing power than was used in the 1960s in the Apollo program. It’s also the process that allows consumers to own huge flat screen televisions at a cost of several hundred dollars. We need to harness that power and that drive to high quality and low prices in the medical arena.

Instead of continuing to empower government and those who can afford lobbyists to protect their interests, let’s try reforms that put economic power back in the hands of healthcare consumers. Let’s trust the marketplace to do what it does so well — boost quality and keep prices comparatively low. We trust the marketplace to provide us with food, housing, technology, and a thousand other things, why not our healthcare as well? 

Today, the average American eats better and spends a lot less to feed themselves than our great grandparents did. As a result, we have access to all manner of foods — something even kings didn’t have a few generations ago. Additionally, we work far fewer hours to obtain that food. As a result, we have more money for larger, more comfortable homes, nice automobiles, vacations, and hospitals — something average Americans in 1776 didn’t even dream about.   

So if we want to see more affordable and better quality healthcare available to us all — why not harness the power of the marketplace? Where’s the proof that government-run schemes produce the needed quality and low costs? In contrast, the marketplace has a strong track record. Let’s try it! 


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