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Economic Freedom

Medicare For All: Progressive Campaign Killer

Column: Harris and Warren fell for the fool's gold of socialized medicine

By Matthew ContinettiThe Washington Free Beacon

Pundits have a ready explanation when one of their favorites loses or ends a campaign: The voters just didn’t get to know the candidate the way media do. He or she was too wonky, or eager to please, or insular, or revealing, or uncertain for the masses. The electoral process made it impossible for him or her to connect with voters. The classic example is Hillary Clinton, who has reintroduced herself to the public umpteen times over the decades. A friend who knows her once told me I would like Clinton if only I got to meet her informally. I had a good laugh at that one.

A similar lament greeted the news that Kamala Harris had dropped out of the Democratic primary. Last year CNN ranked Harris first among the contenders. Now it’s back to the Senate. The Washington Free Beacon compiled a short video of media types saddened by Harris’s departure. A New York Times op-ed asked, “Did We Ever Know the Real Kamala Harris?” Writers for the Washington Post said that Harris failed because she lacked “a theory of the case” and wasn’t able “to explain why she was running for president.” Yes, it helps to have a reason for your candidacy beyond media reports that you check all the right boxes. But the argument that Harris flopped because of a failure to communicate lets her off easy.

The Times piece didn’t mention the policy initiative upon which Harris launched her campaign: Bernie Sanders’s Medicare for All legislation that would eliminate private and employer-based health insurance. Harris signed on as a cosponsor to the bill last April. It’s haunted her ever since. Medicare for All might look like the sort of “big, structural change” that sets progressive hearts aflutter. For most voters it causes arrhythmia.

The proposal is liberals’ fool’s gold. It appears valuable but is actually worthless. It gets the progressive politician coming and going: Not only do voters recoil at the notion of having their insurance canceled, but candidates look awkward and inauthentic when they begin to move away from the unpopular idea they mistakenly embraced. That’s what happened to Harris earlier this year, and is happening to Elizabeth Warren today.

Harris moved into second place nationwide after her ambush of Joe Biden over busing during the first Democratic debate. But her position soon began to erode. Her wavering position on eliminating private insurance dissatisfied voters. She had raised her hand in support of the policy during the debate, but the next day she walked it back. Then she walked back the walk back. Then, ahead of the second debate, she released an intermediary plan that allowed for certain forms of private insurance. She stumbled again when Biden called her to account for the cost of the bill. Tulsi Gabbard’s pincer move on incarceration, using data first reported by the Free Beacon, made matters worse. By September, Harris had fallen to fifth place.

This was around the time that Warren, bolstered by adoring press coverage and strong retail politics, began her ascent. For a moment in early October, she pulled slightly ahead of Biden in the RealClearPolitics average of national polls. Her rivals sensed an opportunity in her refusal to admit that middle-class taxes would have to increase to pay for Medicare for All. The attacks took their toll. Support for Warren fell. She then released an eye-popping payment scheme that failed to satisfy her critics. In early November, she released a “first term” plan that would “transition” the country to Medicare for All. In so doing, she conceded the unreality of her initial proposal. She came across as sophistical and conniving. Her descent continues.

The national frontrunner, Joe Biden, and the early state leader, Pete Buttigieg, both reject Medicare for All in favor of a public option that would allow people to buy into Medicare. They reflect the polls. Democrats support a public option at higher levels than they do Medicare for All. A November Des Moines Register poll of likely Democratic caucusgoers found that only 36 percent supported a Medicare for All plan that would cancel private health insurance. More than half supported some other alternative to a one-size-fits-all universal government program. The November Quinnipiac survey found that 71 percent of Democrats and Democratic leaners were for a Medicare buy-in. That is 12 points higher than the support for Medicare for All.

One reason for Bernie Sanders’s polling stability is that Democrats remain open to the idea of Medicare for All. They just want a candidate to be direct about the costs and tradeoffs associated with the program. Voters in general are not as credulous. When told that Medicare for All would mean additional taxes and the end of private insurance, voters reject it.

A Global Strategy Group poll of 1,113 registered voters in June concluded that support for Medicare for All depends on the way the question is phrased. While the survey found that 51 percent of respondents supported a Medicare for All program in the abstract, support fell to 47 percent when respondents were told that it “would provide the Medicare program to all Americans and eventually eliminate all private health insurance.” Opposition spiked to 53 percent.

The mid-November Kaiser Family Foundation Health Tracking Poll of adults found that 53 percent favored a version of Medicare for All “in which all Americans would get their insurance from a single government plan.” A 65 percent majority, however, favored a public option “that would compete with private health insurance plans and be available to all Americans.” That’s music to Biden and Buttigieg’s ears.

When Kaiser asked adults if they favored a Medicare for All plan that would “require many employers and some individuals to pay more in taxes, but eliminate health insurance premiums and deductibles for all Americans,” support fell to 48 percent. And when Kaiser asked if they favored Medicare for All that would “increase the taxes that you personally pay, but decrease your overall costs for health care,” support fell to 47 percent. Forty-eight percent were opposed.

Quinnipiac found that support for Medicare for All among all voters has fallen from a high of 51 percent who said it was a good idea in August 2017 to 36 percent today. The picture looks even worse for progressives in the swing states. The most recent Blue Wall Voices project of the Kaiser Family Foundation and the Cook Political Report found that a 62 percent majority of swing voters in Michigan, Minnesota, Pennsylvania, and Wisconsin called Medicare for All a “bad idea.” The top health care priority for voters was lowering prescription drug costs. Medicare for All was last.

Once thought to be the fulfillment of the age-old dream of universal health care, Medicare for All is more like one of those ingenious Acme devices Wile E. Coyote uses to catch the Road Runner. It’s a catapult that launches you into the stratosphere. And right into a wall.


CONSERVATIVE LAWMAKERS RECEIVE REMINDER THAT PRICE FIXING IS A “BAD IDEA”

By David AlmasiNational Center for Public Policy Research

Raising concern “about the direction the health care policy debate is moving” – particularly among conservative lawmakers – the National Center for Public Policy Research has joined with more than 70 other conservative and free-market organizations to warn Congress about the dangers of price fixing.

In trying to remedy the issue of surprise medical bills for out-of-network emergency treatment, and insurers balking at covering all of such costs, some typically conservative politicians are favoring proposals to essentially enact price controls on these health care services. This would prohibit doctors and hospitals from setting their own rates and potentially make them operate at a loss.

Senator Rand Paul has explained that this could compromise the quality of American health care by driving people out of the medical field. “If you fix the price that ER doctors work at,” he said, “you will get a shortage.” He suggested that what has happened to the economy in Venezuela could happen in the United States as a result of such changes to the marketplace.

In a letter to conservative lawmakers on Capitol Hill, the National Center and others note:

[W]hat is troubling is how often otherwise right-of-center policymakers are resorting to one of the key pillars of the Medicare for All playbook – government imposed price controls. Whether it is called price fixing, rate setting, subsidy capping or inflation capping, government price controls have wormed their way into the healthcare reform plans of too many of our friends in Washington.

The National Center is joined on the letter by organizations including Americans for Tax Reform, the Competitive Enterprise Institute, Frontiers of Freedom, the Discovery Institute, the Institute for Policy Innovation and Eagle Forum.

The coalition letter concludes:

This was a bad idea a half century ago with gasoline line rationing, and it’s a bad idea today in health care. Something can only be affordable if it’s available to buy in the first place.

To read the entire letter and see all of its signers, click here.


The Broken China Model

Column: A weak and unstable China is also more dangerous

By Matthew ContinettiThe Washington Free Beacon

You see it in the maps. In 2015, 1.4 million Hong Kongers voted in elections in which pro-Beijing candidates swept the city’s 18 district councils. Last week, 2.9 million Hong Kongers voted and pro-democracy candidates won every district but one. That is an increase in turnout of more than 100 percent and a stunning rebuke both of Beijing and of chief executive Carrie Lam, who has failed to respond adequately to the demands of the pro-democracy movement that has disrupted Hong Kong for the past six months. Maps of the city once shaded pro-mainland blue are now pro-liberty yellow.

Yes, the vote was symbolic. The councils have little say in the operations of government. But symbols matter. For Hong Kongers to express discontent with their rulers through one of the last vehicles for accountability is no trifle. Beijing was surprised. It had counted on a supposed “silent majority” of voters tired of the upheaval and violence to legitimize the mainland’s authority. That was a mistake. The prefabricated copy that Communist propagandists had been ready to spread was abandoned. “The problem is that under the increasingly paranoid regime of Xi Jinping, even these internal reports have become much more geared toward what the leadership wants to hear,” writes James Palmer, who a decade ago worked for the pro-China Global Times.

Hong Kong is the most visible reminder of the tenuous nature of Communist rule. The city has become a postmodern battleground where masked protesters wield social media and lasers to avoid armor-clad police and facial recognition technology powered by artificial intelligence. When one looks at Hong Kong one sees a possible future where champions of freedom the world over employ desperate measures against the overwhelming resources of a mechanized Leviathan. One also sees the brittleness, confusion, and embarrassment of despotism when challenged by subjects assumed to be grateful for growth and security and immune to the will to freedom.

What is happening in Hong Kong is not isolated. The China model of authoritarian development is damaged and scarred. What seemed as sturdy and invulnerable as a Borg Cube looks more like a fragile and wobbly mobile by Alexander Calder. The regime of Xi Jinping is under economic and political and diplomatic pressure that it is not handling well. This beleaguered combatant in an era of great power competition is more dangerous to the United States than before.

What legitimacy the Communist Party possessed was based on the decades of economic growth inaugurated by Deng Xiaoping in 1978. But growth has slowed to its lowest level in decades as the Chinese workforce ages, low-hanging investment opportunities disappear, and the trade war with the United States reduces manufacturing output and sends supply lines to Vietnam and Mexico. Capital is fleeing China at a record pace as the bourgeoisie hedge against stagnation and turmoil.

For all of the Chinese government’s much publicized investments in research and development and defense, and despite the size of its economy, per capita gross domestic product is $10,000, slightly less than that of the Russia Federation ($11,000) and a fraction of that of the United States ($65,000). Recent weeks have brought an uptick in bank runs. The government’s response to slowdown has been to tighten state control. “Between 2012 and 2018, assets of state companies grew at more than 15 percent annually, well over twice the pace of expansion of China’s GDP and double the pace of growth of gross domestic capital formation,” writesNicholas R. Lardy of the Peterson Institute for International Economics. This is not state capitalism. It’s statism.

The Chinese authorities use mechanisms of repression to maintain control over what can only be described as an internal empire. The New York Times recently published a horrifying and damning trove of documents relating the extent of Beijing’s efforts to detain, imprison, intimidate, and reeducate Uighurs, Kazakhs, and other minorities in western Xinjiang Province. China wants to override the Dalai Lama’s choice of successor in its continuing efforts to police Tibetan Buddhism and aspirations to sovereignty. China leads the world in the number of political prisoners, its Great Firewall has become more difficult to penetrate, and its influence operations in Taiwan, Australia, and other democracies more sophisticated. Defector Wang Liqiang has told Australian officials of his personal involvement in the disappearance of five Hong Kong booksellers who had the temerity to advocate democracy.

These are not the moves of a regime confident in its ability to win the allegiance of a multi-ethnic population of 1.4 billion people. They are the policies of an insular and jittery faction whose uncertainty toward a changing economic and demographic landscape has made it suspicious of and opposed to even the slightest hints of liberal democracy. The ambitions of Chairman Xi for a Eurasia integrated under the Belt and Road Initiative, where the preponderance of the latest equipment in key sectors is manufactured, are both grand and mismatched for a nation whose leaders are concerned most with the operation of the surveillance state that keeps them in power.

The resistance to Beijing is both domestic and foreign. Lost in all the predictions of Chinese dominance were the voices of China’s neighbors in the Pacific. Neither Japan, nor Vietnam, Taiwan, the Philippines, nor Australia want to live in a Chinese lake. Most extraordinary has been the response of the United States. Within four years, the American elite has swapped its belief in China’s “peaceful rise” for the recognition that it may be in the opening phase of a Second Cold War whose outcome will determine the ideological character of the 21st century. While Tariff Man wages his trade war, opposing Chinese theft of intellectual property and arguing for structural changes to China’s state owned enterprises, Vice President Mike Pence, Secretary of State Mike Pompeo, and Secretary of Defense Mark Esper speak of the political and security challenges presented by Chinese authoritarians who become more willing to lash out as they lose their grip.

Senator Josh Hawley spoke for the emerging consensus when he wrote in the November 24 Wall Street Journal: “And everywhere, in every region, we must ask whether our actions are contributing to the great task of this era, resisting hegemony in the Asia-Pacific.” A few days before Hawley’s op-ed, Congress passed the Hong Kong Human Rights and Democracy Act of 2019. Though the president already may possess the authorities to sanction Chinese officials granted him by Congress, the bill remains both a powerful statement of American support for the principles of liberty and democracy and a sign of American resolution before the specter of autocracy.

Good for President Trump to have signed the Democracy Act—and better still if he would link human rights to trade and refrain from speaking of his “friend,” the “incredible guy” who seeks nothing less than the defeat and displacement of the United States.


Extending, expanding or enlarging the electric vehicle tax credit is bad policy and robs the taxpayers

By George LandrithFrontiers of Freedom

Any extension, expansion or enlargement of the electric vehicle tax credit is a profoundly bad idea and essentially robs the taxpayers to pad the pockets of the wealthy who can afford the best lobbyists money can buy. 

When the original legislation giving tax credits and subsidies for electrical vehicles passed more than a decade ago, its sponsors promised that it would be temporary and were only designed to help new technologies gain a foothold in the marketplace.  Now more than a dozen years later, some irresponsible legislators are ready to move away from temporary, limited subsidies and are headed towards a permanent and almost unlimited subsidies. 

This is both bad policy, and dangerous. Government’s power to tax should not be used to transfer wealth to those who can afford the best lobbyists. Single parents working two jobs to make ends meet should not be forced to take an extra shift so that they can support this sort of wasteful spending.  If rich car purchasers want to buy new expensive electric sports cars, they should be free to do so. But the idea that they should be able to reach into the wallet of the single parent struggling to make ends meet is unconscionable! 

Virtually 80 cents of every dollar spent on subsidies went to households with more than $100,000 of income.  And, of course, all of the taxpayer provided cash benefits wealthy and profitable car companies — like Tesla and its billionaire founder Elon Musk. It is revealing that almost 1/2 of all the subsidies for electric vehicles go to just one state — California. 

This is a wealth transfer from the working poor and middle class to the wealthy.  And it is a wealth transfer from 49 states to 1 state.  Before anyone votes for these wealth transfers, they must provide an explanation. Why is this good for America? Why is this good for taxpayers? I know it is good for Mr. Musk and Tesla. But why is it good for that single parent who is working so hard to provide her children with a better life? 

There is no need to extend, expand or continue subsidies for electric vehicles.  Sales of electric cars have been on the increase for years. The original rationale was that the temporary aide would help them get established and build economies of scale that would drive prices down.  Twelve years is more than enough time. 

Some argue that the subsidies are justified because electric cars are “zero emission” vehicles. But that is a lie. Electric cars are plugged into the power grid to recharge and whatever emissions were created while generating the electricity needed to recharge the car are the car’s emissions.  Nationally, that won’t be anything close to zero. Moreover, recent studies indicate that full life-cycle emissions from electrical vehicles may exceed those from new internal combustion engines. So it is unlikely that electric vehicles provide the environmental benefits promised. 

Since there is no longer any plausible or rational reason for the subsidies, the real reason is laid bare — car companies want more taxpayer cash and they’ve lobbied Congress hard to get it. Mr. Musk and Tesla and others who receive the benefits of this taxpayer provided subsidy would love to extend and expand it. But that isn’t a good reason to give them more taxpayer cash or to reach into a single parent’s wallet so that some rich guy can get some help to buy that very cool electric car.  

Moreover, the public doesn’t support the idea of taxpayers helping people buy expensive and trendy electrical cars. By landslide proportions, 2 in 3 Americans oppose these subsidies, and with good reason. 

The truth is most people would love to receive a perpetual gift of cash. There’s an old saying, “A government that robs Peter to pay Paul can always count on the support of Paul.”  That’s what we have here.  Paul is in favor of Paul getting millions of dollars provided by Peter.  This is clearly just based on greed. 

Even more important, our constitutional system cannot devolve into a system in which one group gets to vote itself cash from another group.  But that’s what we have here.  Nothing more.  A vote to extend, expand, or enlarge this subsidy is a grotesque violation of the public trust.


The Most Important News Story Right Now Isn’t Impeachment, It’s The Crisis In Mexico

Cartels in Mexico aren’t just fighting over drugs, they’re fighting over industries, and it might well trigger a new and much bigger migrant crisis on the U.S. border.

By John Daniel DavidsonThe Federalist

Two important and interrelated news stories largely passed under the radar Wednesday as the House impeachment hearings continued to dominate the headlines. Both stories concern the deteriorating state of affairs in Mexico and have huge implications for immigration, the southwest border, and U.S. national security. It’s a shame more Americans aren’t paying attention.

The first was a report from BuzzFeed that as of Wednesday the Trump administration began carrying out a controversial plan to deport asylum-seekers from El Salvador and Honduras—not to their home countries, but to Guatemala, which the administration has designated a “safe third country,” meaning that migrants from those countries must first apply for asylum in Guatemala before seeking asylum in the United States.

The move is part of the administration’s broader strategy to reduce the number of Central Americans seeking asylum at the southwest border, which last year saw a dramatic increase in illegal immigrationlargely driven by families and minors from the so-called Northern Triangle countries of Guatemala, Honduras, and El Salvador.

The second story was a Los Angeles Times dispatch from the Mexican state of Michoacán, where rival cartels are waging war not over drug trafficking routes but over control of the multibillion-dollar avocado industry. More than a dozen criminal groups are fighting over the avocado trade in and around Uruapan, the capitol of Michoacán, “preying on wealthy orchard owners, the laborers who pick the fruit and the drivers who truck it north to the United States,” writes reporter Kate Linthicum. Organized crime in Mexico, she explains, is diversifying—it isn’t just about drugs anymore:

In parts of Guerrero state, cartels control access to gold mines and even the price of goods in supermarkets. In one city, Altamirano, the local Coca-Cola bottler closed its distribution center last year after more than a dozen groups tried to extort money from it. The Pepsi bottler left a few months later.

In Mexico City, bar owners in upscale neighborhoods must pay taxes to a local gang, while on the nation’s highways, cargo robberies have risen more than 75% since 2016.

Compared with drug trafficking, a complex venture that requires managing contacts across the hemisphere, these new criminal enterprises are more like local businesses. The bar to entry is far lower.

The report also notes that homicides are at an all-time high in Mexico, and that cartels have taken control of migrant smuggling in the state of Tamaulipas, which borders the Texas’s Rio Grande Valley, the busiest stretch of the border for illegal immigration.

All this comes on the heels of the massacre of an American family in Mexico, including three women and six children, earlier this month by cartel gunmen, as well as the defeat of a detachment of the Mexican National Guard by cartel forces in the city of Culiacan last month. Mexican President Andres Manuel Lopez Obrador has no strategy to reduce cartel violence and no intention of fighting the cartels.

The Chaos South of Our Border Won’t Stay There

So what do these two news stories from Wednesday have to do with one another, and why would they have major implications for the United States? Simply put, what has happened in Central America is now happening in Mexico. The difference is, when asylum-seekers from Mexico start turning up on our border we won’t be able to deport them to a third country or easily turn them away. If you thought the border crisis was bad last year, wait until hundreds of thousands of families in Michoacán and Tamaulipas decide to flee the cartels and seek asylum in the United States.

To really appreciate the gravity of the situation in Mexico you have to understand some of the dynamics behind the border crisis, which has been driven by Central Americans fleeing societies that are in a state of collapse. Widespread extortion, kidnapping, and violence from gangs throughout the Northern Triangle, combined with grinding poverty and scarce economic opportunities, has prompted hundreds of thousands of Central American families to head north.

One of the reasons this mass exodus turned into a crisis is that unlike earlier waves of illegal immigration, these migrants weren’t single adults from Mexico who could be quickly deported under U.S. law. They were migrant families and minors seeking asylum from noncontiguous countries, which meant they had to go through an entirely different legal process that takes much longer.

The Trump administration, like the Obama administration before it, faced a choice: either release large numbers of people who had crossed the border illegally or detain them in inadequate facilities that were never designed to hold children and families. The administration responded with a host of new policies, some of which have been struck down by the courts, designed to deter Central American asylum-seekers and reduce illegal border-crossings.

Designating Guatemala as a safe third country is one of those policies, despite the reality that Guatemala is by no means a “safe” country (like El Salvador and Honduras, it’s one of the most violent countries in the world). The Migrant Protection Protocols, also known as “remain in Mexico,” is another such policy, which forces asylum-seekers to await the outcome of their case in Mexico, often in dangerous border cities where they are vulnerable to exploitation by cartels and corrupt officials.

The upshot is that as Mexico descends into warlordism marked by widespread criminality and gang warfare, we should expect ordinary Mexicans to respond the way ordinary Central Americans have. Eventually, they’ll leave. Many of them, perhaps hundreds of thousands, will at some point head north and claim asylum. When they do, the border crisis that we’ve been dealing with for the past year will seem insignificant—a prelude to a much larger and intractable crisis, for which there will be no easy fix.


European Union Slaps ‘New Kind Of Yellow Star On Jewish-Made Products’

A survey of 2,504 French adults found that 69 percent of respondents would not buy products labeled ‘made in Israel.’

By Melissa Langsam BraunsteinThe Federalist

Europe’s highest court isn’t exactly telling everybody to boycott Israeli food and wine. But they’re doing their darnedest to ensure Europeans don’t buy them.

For anyone who missed the news, the Court of Justice of the European Union (CJEU) ruled last week that food and wine produced by Jewish Israelis beyond the Green Line must be explicitly marked: “‘Israeli settlement’ or equivalent needs to be added, in brackets, for example. Therefore, expressions such as ‘product from the Golan Heights (Israeli settlement)’ or ‘product from the West Bank (Israeli settlement)’ could be used.”

Eugene Kontorovich, director of the Center for International Law in the Middle East at George Mason University Scalia Law School, considers the new labels “a new kind of Yellow Star on Jewish-made products.” He told The Federalist that the CJEU’s labeling requirements “are not geographic—they are not about where something was made but by whom.” Kontorovich added, “They’re not even pretending that the rules they’re applying to Israel are the rules they’re applying to the rest of the world.”

Readers may recall that when the court’s advocate general suggested such labeling earlier this year, his reasoning was that consumers needed “neutral and objective information.” But this outcome is neither neutral nor objective. As Marc Greendorfer, president of Zachor Legal Institute, which battles Israel boycotts, emailed, “That the court contravened established principles of international law to wrongly stipulate the status of the disputed areas (as occupied) exposes the fact that this ruling was about taking sides in a political dispute.”

“Labels are not the place to engage in political debate,” Brooke Goldstein, executive director of the Lawfare Project, which participated in this case, told The Federalist.Indeed, product labeling is supposed to be about health and safety. Labels also help consumers shop “ethically” or “responsibly.” But if a consumer factors politics into those decisions and wants to avoid Israeli goods, why is it so important to specify where in Israel those goods are produced?

According to a 2017 poll conducted by Opinion Way for the Lawfare Project, a survey of 2,504 French adults found that 69 percent of respondents would not buy products labeled “made in Israel.” That number rose to 75 percent if labels read “West Bank, Israeli colony/settlement.” So more detailed labeling would clearly shift some shoppers’ habits, but those figures are already startlingly high.

While the CJEU may not be declaring a boycott with this ruling— after all, it remains legal to import Israeli goods — they are nudging consumers in that direction. Even the U.S. State Department, which typically avoids criticizing allies, expressed “deep concern,” calling “the circumstances surrounding the labeling requirement . . . suggestive of anti-Israel bias.” They also rightly noted that “this requirement serves only to encourage, facilitate, and promote boycotts, divestments, and sanctions (BDS) against Israel,” a movement Germany’s own parliament considers antisemitic, and even Nazi-like.

This decision is not focused on informing consumers about unconscionable behavior across the globe (e.g., the Chinese government’s treatment of Uyghurs) or highlighting the world’s many disputed territories (see: Western Sahara, Cyprus, and Crimea for starters). It is about ostracizing the world’s only Jewish nation and unilaterally redrawing Israel’s borders via economic pressure.

The aforementioned French survey underscores just how widespread popular prejudice against Israel is in France, long home to Europe’s largest Jewish community. Rather than calm that prejudice, the CJEU panders to it, inflames it, and now embeds it in law. So it won’t be surprising if antagonism to Israel keeps rising in France and the rest of Europe. Stigmatizing Israel now has the gloss of official, legal respectability.

The whole episode is offensive. Consider, this long-awaited decision was scheduled for release on November 12. The U.S. Holocaust Memorial Museum reminds us that date is significant, as “just 2 days after the end of Kristallnacht [in 1938], the Nazi government issued the Decree on the Elimination of the Jews from Economic Life. Banned from owning shops or selling any kind of good or service, most Jews lost their livelihoods entirely.”

Further, by establishing a unique standard for Israel, this decision fits the internationally accepted definition of antisemitism, cited in the United Nations’ recent report on global antisemitism. So it’s rich for the European Commission to tell Fox News, “Any suggestion that indication of origin on products coming from Israeli settlements in the occupied Palestinian territory or in the occupied Golan has anything to do with targeting Jews or anti-Semitism is unacceptable. The EU stands strongly and unequivocally against any form of anti-Semitism.”

Check out that loaded word choice. Then consider that such critiques are fair game. The EU does not stand unequivocally against antisemitism. There are bright spots, like Austria’s second largest city banning support for BDS. However, European Jews are acutely aware that antisemitism is widespread and dangerous.

EU officials like Michael O’Flaherty, director of the European Union’s Fundamental Rights Agency, know that in spite of the many reported antisemitic crimes across the EU, 80 percent remain uncounted. “As one person asked [O’Flaherty], ‘Why would I report antisemitism to an antisemite?’” Over in Britain, which has not quite left the EU, nearly half of British Jews have said they “would ‘seriously consider’ emigrating if [Labour Party leader Jeremy] Corbyn is elected prime minister [in December].”

Seventy-four years after the Holocaust’s end, the EU is no haven for Jews. Nor is it a particularly reliable friend to Israel. Calling the decision “disgraceful,” Sen. Ted Cruz (R-TX) told The Federalist, “This labeling singles out Jews who live in communities where Europeans don’t think they should be allowed to live and identifies them for boycotts. It is reminiscent of the darkest moments in Europe’s history.”

Indeed, the CJEU may have forgotten, but world Jewry hasn’t. We also know that discrimination and other harms that start with Jews never end with us. So whether or not the timing was coincidental, Secretary of State Mike Pompeo’s announcing a reversal of Obama-era policy regarding Israel’s settlements certainly looks fortuitous, because this fight is far from over.


How A Russian’s Grocery Store Trip In 1989 Exposed The Lie Of Socialism

The fall of the Berlin Wall was indeed a watershed in the collapse of the Soviet Empire, yet one could argue the true death knell came two months before at a small grocery store in Clear Lake, Texas.

By Jon MiltimoreThe Federalist

The fall of the Soviet Union is sometimes remembered as Nov. 9, 1989, the day the Berlin Wall symbolically collapsed. While the physical barrier endured for some two more years, on that day, East German Communist Party officials announced they would no longer stop citizens of the German Democratic Republic from crossing the border.

The fall of the barrier that scarred Germany was indeed a watershed in the collapse of the Soviet Empire, yet one could argue the true death knell came two months before at a small grocery store in Clear Lake, Texas.

An Unexpected Trip

On Sept. 16, 1989, Boris Yeltsin was a newly elected member of the Soviet Parliament visiting the United States. Following a scheduled visit to Johnson Space Center, Yeltsin and a small entourage made an unscheduled stop at a Randalls grocery store in Clear Lake, a suburb of Houston. He was amazed by the aisles of food and stocked shelves, a sharp contrast to the breadlines and empty columns he was accustomed to in Russia.

Yeltsin, who had a reputation as a reformer and populist, “roamed the aisles of Randall’s nodding his head in amazement,” wrote Stefanie Asin, a Houston Chronicle reporter. He marveled at free cheese samples, fresh fish and produce, and freezers packed full of pudding pops. Along the way, Yeltsin chatted up customers and store workers: “How much does this cost? Do you need special education to manage a supermarket? Are all American stores like this?”

Yeltsin was a member of the Politburo and Russia’s upper political crust, yet he’d never seen anything like the offerings of this little American grocery store. “Even the Politburo doesn’t have this choice. Not even Mr. Gorbachev,” Yeltsin said.

A Sickening Revelation

It’s difficult for Americans to grasp Yeltsin’s astonishment. Our market economy has evolved from grocery stores to companies such as Walmart and Amazon that compete to deliver food right to our homes.

Yeltsin’s reaction can be understood, however, by looking back on the conditions in the Soviet Union’s economy. Russia grocery stores at the time looked like this and this:

Now compare that footage to the images of Yeltsin shopping at a U.S. supermarket. The contrast is undeniable. Yeltsin’s experience that day ran contrary to everything he knew. A longtime member of the Communist Party who had lived his entire life in a one-party system that punisheddissent harshly, Yeltsin had been taught over and over that socialism wasn’t just more equitable, but more efficient.

His eyes were opened that day, and the revelation left the future Russian president feeling sick.

“When I saw those shelves crammed with hundreds, thousands of cans, cartons and goods of every possible sort, for the first time I felt quite frankly sick with despair for the Soviet people,” Yeltsin later wrote in his autobiography, “Against the Grain.” “That such a potentially super-rich country as ours has been brought to a state of such poverty! It is terrible to think of it.”

Yeltsin was not the only person fooled, of course. There is copious documentation of Western intellectuals beguiled by the Soviet system. These individuals, who unlike Yeltsin did not live in a state-controlled media environment, saw the Soviet system as both economically and morally superior to American capitalism despite the brutal methods employed in the workers’ paradise.

“I have seen the future, and it works,” the Progressive Era journalist Lincoln Steffens famously said.

Paul Samuelson, the first American to win the Nobel Prize in economics and one of the most influential economists of the 20th century, was a longtime enthusiast of Soviet central planning and predicted it would lead to a higher standard of living. “Who could know that [the data] was all fake?” Samuelson is said to have asked a fellow economist following the empire’s collapse.

The Truth About Socialism Revealed

Despite decades of propaganda and obfuscation, the great fiction of socialism was eventually fully exposed with the fall of the Soviet Union and the publication of its archives in the 1990s. No longer could academics deny the truth that the people of the Soviet Union endured a painfully low standard of living despite the vast wealth of its empire.

“Their standard of living was low, not only by comparison with that in the United States, but also compared to the standard of living in countries with far fewer natural resources, such as Japan and Switzerland,” the economist Thomas Sowell observed in “Basic Economics.”

Yeltsin deserves credit for laying bare the lie of socialism that so many others had refused to see. “[T]here would be a revolution,” Yeltsin told his entourage that fateful September day in 1989, if the people in the Soviet Union ever saw the prosperity in American grocery stores. Yeltsin was more right than he knew.


FTC – Coalition Letter on Data Sharing Practices of Ring

Dear Chairman Simons, 

The Federal Trade Commission (“FTC” or “Commission”) should open an investigation into Ring—a subsidiary of Amazon—and its data-sharing practices with law enforcement officials. Ring’s conduct raises a number of concerns, including fears that (1) the emerging technology may result in discriminatory law enforcement activity, (2) sensitive consumer data may be jeopardized as a result of misuse by Amazon and (3) consumers may be subjected to heightened physical security risks. Given these concerns, which are outlined in greater detail below, and Amazon’s history of data mishandling, the FTC should more deeply examine the damaging effects of these practices. 

While innovative, Ring’s home security doorbell and its use of consumer data are cause for significant concern as this conduct has the potential to result in considerable consumer harm. So-called “smart home” technology, still very much in its infancy, and its misuse have the potential to cause lasting damage to consumers if the necessary precautions are not taken. 

Despite the potential benefits of “smart home” technology like the Ring “smart” doorbell, the data collected by Amazon opens consumers to exposure under the promise of additional security. As a result, not only is consumer data made more vulnerable, but their physical safety is put at unprecedented risk.  

 As the Commission is well aware, as more data is collected by Amazon, potential data breaches become more damaging. A data breach of consumers’ home security system by nefarious actors could have direct consequences on consumer physical safety. For example, should home security video footage fall into the wrong hands, consumers’ daily routines—including when they leave home and when they are alone and most vulnerable—would be easily discernible by criminals intending to cause harm. 

 According to reports, Ring has already misled consumers about its data handling practices. The Washington Post reports that Ring has partnered with over 400 police departments in the U.S., “granting them potential access to homeowners’ camera footage.”[1]  Amazon was able to secure hundreds of partnerships by capitalizing on artificially low prices funded through taxpayer resources.[2]  Making matters worse, Ring engages in these partnerships without first informing its users. This deceptive practice raises, at best, tremendous ethical concerns. 

Amazon’s record on data security is already cause for concern. Recently, two prominent senators have asked the Commission to investigate Amazon’s role in the Capital One data breach, which affected nearly 100 million customers.[3]  Given Amazon’s potential involvement in this historic breach and its reckless handling of consumer data captured through Ring, it would be unwise to allow this activity to continue without at least some examination from the Commission. 

In addition to the data security concerns, Ring’s video-sharing arrangement raises questions about the potential for profiling. In an open letter to lawmakers,[4] more than 30 civil rights action groups described the threat to civil liberties posed by Ring’s partnership with law enforcement. In the letter, the organizations explain the dangers of this arrangement:

“With no oversight and accountability, Amazon’s technology creates a seamless and easily automated experience for police to request and access footage without a warrant, and then store it indefinitely. In the absence of clear civil liberties and rights-protective policies to govern the technologies and the use of their data, once collected, stored footage can be used by law enforcement to conduct facial recognition searches, target protesters exercising their First Amendment rights, teenagers for minor drug possession, or shared with other agencies […].” 

These sentiments were echoed by another prominent senator in a letter to Amazon CEO Jeff Bezos.[5] In the letter, the lawmaker outlined the privacy and civil liberty concerns noted above. Amazon has not yet responded to this letter—a clear indication that, unless pressured by government officials, the company will only act in accordance with its own interests, rather than address the genuine threats expressed here. Because of this, it would be wise for the FTC to act before the situation spirals out of control. 

Inaction in light of these facts would subject consumers to risks that are all too dangerous. As the top “cop on the beat,” the FTC has a public responsibility to protect consumers from unfair and deceptive business practices. Given the data security and civil liberty concerns, it would be wise for the FTC to undertake a review of the partnership between Amazon and Ring and law enforcement authorities. 

This issue—that of data security and physical safety—is bipartisan in nature. In fact, it transcends politics entirely.

Thank you for your attention to this matter. 

Sincerely,

[1] Harwell, D. (2019, August 28). Doorbell-camera firm Ring has partnered with 400 police forces, extending surveillance concerns. Retrieved October 24, 2019, from https://www.washingtonpost.com/technology/2019/08/28/doorbell-camera-firm-ring-has-partnered-with-police-forces-extending-surveillance-reach/.

[2] Guariglia, M. (2019, August 30). Five Concerns about Amazon Ring’s Deals with Police. Retrieved October 24, 2019, from https://www.eff.org/deeplinks/2019/08/five-concerns-about-amazon-rings-deals-police.

[3] https://subscriber.politicopro.com/f/?id=0000016d-fde0-d909-abff-fde145f70001

[4] Fight for the Future (2019, October 7). Open letter calling on elected officials to stop Amazon’s doorbell surveillance partnerships with police. Retrieved October 24, 2019, from https://www.fightforthefuture.org/news/2019-10-07-open-letter-calling-on-elected-officials-to-stop/.

[5] https://www.markey.senate.gov/imo/media/doc/Ring%20Law%20Enforcement%202019.pdf 


Ukraine’s Opening

By Dr. Miklos K. RadvanyiFrontiers of Freedom

There are uncountable narratives when it comes to the actual and perceived domestic as well as international predicaments of the newly independent state of Ukraine. As a rule, known facts are mixed with unsubstantiated rumors, which, in turn, give birth to fantastic conjectures, ungrounded intuitions, and outright lies in the service of partisan political interests. In reality, the Ukraine question is extremely complex. Yet in the United State of America, both politicians and the media present this complexity to the public from a one sided, exclusively distorted American perspective.

Meanwhile, successive and mostly short-lived Ukrainian governments have tumbled from ever escalating crises to misguided revolutions and repeated implosions in predictable intervals. First the two high ranking former communists dubbed the “Red Barons”, former President Leonid Kravchuk and former President Leonid Kuchma, made half-hearted attempts at the privatization of the state owned economy. Called the “voucher privatization” and originally aimed at distributing state assets judiciously among all Ukrainians, this privatization scheme resulted in the creation of the Ukrainian oligarchy. This development, in turn, deepened the already pervasive corruption that was the essence of the Soviet Union.

Then, following a badly botched presidential election, came the “Orange Revolution” that brought forth the allegedly enlightened and pro-Western Victor Yushchenko. Paralyzed by his petty and incessant bickering with Prime Minister Yulia Tymoshenko, he lost badly to his main rival, the pro-Russian Viktor Yanukovych. The latter was chased from office before his term expired by what was termed by the Kremlin as a coup d’etat but was viewed by the West as a popular revolution against Yanukovych’s vacillation to sign an association agreement with the European Union in Vilnius on November 28, 2013.

Almost immediately after the foiled signing of the association agreement, protests against President Yanukovych commenced. What later was elevated to the mythical heights of the “Revolution of Dignity” forced President Yanukovych to flee Ukraine. In the subsequent presidential election of May 2014, Ukrainians elected with overwhelming majority one of their country’s oligarchs, the “Chocolate King” Petro Poroshenko. In the interim, Russia invaded and then annexed the Crimea. To add insult to injury, Russia also has triggered an armed uprising in eastern Ukraine that has a significant concentration of ethnic Russians.

True to the past of the sovereign state of Ukraine, President Poroshenko did fail in an abysmal fashion, too. In the second round of the presidential election, on April 21, 2019, 73% of the Ukrainian voters chose a non-politician by the name of Volodymyr Zelensky as their new president. Clearly, the vast majority of Ukrainians decided to close the book on almost three decades of arrogant incompetence and shameless corruption by their politicians and oligarch allies. Finally, they expressed their desire to live and raise their children in a normally functioning, peaceful, and transparent state, politically as well as economically.

Although the lion’s share of the blame must be assigned to the Ukrainians themselves, American policy toward the independent sate of Ukraine was burdened by glaring incompetence, unrealistic illusions, erratic oscillations between Russia and Ukraine, and outright idiocy. Instead of assisting the newly independent Ukraine to establish the political and economic foundations of a unified state by harmonizing the old and new forces, the late President George H. W. Bush and President Bill Clinton paid little if any attention to the troubled country. The formers son and his successor President Barrack Obama’s, attempts at interference in Ukraine’s domestic affairs generally only made the situation worse. Especially, the Obama administration’s role in the early and violent removal of President Yanukovych proved to be a double edged sword. On the one hand, President Poroshenko was unable to accomplish the objectives of the Maidan revolution. On the other hand, it triggered Russia’s direct intervention in the Ukrainian mess. Moreover, Vice President Joe Biden’s private diplomacy to help his son Hunter Biden enrich himself and the family gave license to President Poroshenko and the oligarchs to continue unabated their corrupt and destructive activities within and outside Ukraine.

As a result, President Volodymyr Zelensky has inherited a situation in which the oligarchic system was discredited and the democratic values of the United State of America have become objects of ubiquitous scorn. Presently, Ukrainian society is completely traumatized and gripped by an existential fear of enormous proportions.

What can and needs to be done? One does not have to look further for a possible solution that to the almost identical history of the Republic of Finland and its troubled relations with imperial Russia, the Soviet Union and today’s Russian Federation. For centuries, Finland had managed to balance its relationship with Russia and its loyalty to the rest of Europe. From the Grand Duchy of Finland within the Russian Empire to the wars against the Soviet Union in 1939 and in 1944, which resulted in Finnish territorial losses, the country survived the Cold War’s Finlandization period. Presently as a full member of the European Union and a close cooperating state with NATO, Finland follows highly pragmatic policies vis-a-vis the Russian Federation. In a recent interview with Bloomberg: Business News, Finnish President Sauli Niinisto described his country’s attitude toward its powerful neighbor thus: “A Cossack takes everything that is loose. You have to be very clear and not let things become loose.”

President Zelensky would be well advised to follow this old Finnish wisdom. He will have to show firmness and resolve with Russia. Furthermore, he must be practical. He must know Ukraine’s strengths and limitations. Becoming a member of the European Union is clearly attainable. Full membership in NATO presently is not. However, being prepared for future Russian aggressions is within the capabilities of Ukraine. To achieve these goals, the Zelensky administration will have to move ever closer to the West by relentlessly promoting Western values inside Ukraine and simultaneously maintaining normal relations with Moscow.

Peace, stability, and prosperity have always been the Sisyphean endeavors of mankind. No doubt, President Zelensky will have to show real leadership. Otherwise, he and Ukraine will end up on the dust heaps of history.


Sunset The Sun Power Tax Credit Now

By Peter RoffTownhall Finance

The good times are back. The U.S. economy is performing at levels not seen in more than a decade, with unemployment at its lowest level in a lifetime.

Still, it wasn’t all that long ago when crude was selling for more than $100 a barrel and people were talking seriously about the problem of “peak oil.” The growing global demand for energy made from fossil fuels has U.S. policymakers pushing hard for subsidies intended to accelerate the development and commercialization of energy alternatives mace from agricultural products and coming from the wind and the sun.

The American faith in technology is almost never misplaced. The fracking revolution has turned the U.S. into a net energy exporter. The explosion in the use of natural gas and the development of microgrids powered by it in liquid form have made cheap power a reality once again, without the widespread adoption of renewables. Policymakers, though, have yet to come to grips with the reality and are, under pressure from special interests, trying to keep Bush/Obama-era energy policies in place that do more harm than good.

In 2005, the U.S. Congress adopted the Solar Investment Tax Credit with an eye to speeding the commercial adoption of energy from the sun as a way to heat and cool the nation’s homes and businesses. Whether it helped or not is debatable yet there are calls, even now, to ensure its renewal past its intended expiration at the end of the year.

The renewable lobby is politically powerful, especially given the nexus between those invested in and those who make generous contributions to elected officials. Remember Solyndra? And yet, despite its spectacular failure – which left taxpayers on the hook for who really knows how much – the ITC was already reauthorized in 2015 for solar PV, solar water heating, solar space heating and cooling, and solar process heat.

Right now, under current law, the industry is set to benefit from a 30 percent tax credit extended to consumers who purchase systems used in both residential and commercial properties that are under construction before 2020. Beginning in 2022 the credit decreases, dropping to 10 percent and useful only in commercial settings.

That’s what policymakers agreed to in 2015 to mollify the demands of the green groups who still believe, or at least claim they do, that the nation’s base power needs can be met by renewables without utilizing either nuclear or fossil fuels.

Science tells us that is a pipe dream and will remain one until the technology to store the energy generated by solar fields over the medium term (never mind the long) exists. Battery technology has not yet caught up to the increases the solar and wind energy industries have managed to achieve, meaning lots of generated power is left stranded and unused.

Nonetheless, the demand for another increase in the ITC as well as an expansion of what is covered is being pressed on legislators. The last extension was part of the deal that allowed for the U.S. to enter the crude export market which, while bad policy, makes it worth the price paid.

There are no such opportunities for a similar trade on the table now. The greens will never drop their opposition to energy exploration in the Arctic National Wildlife or the construction of new pipelines to move crude and natural gas produced by fracking to market. And since there’s no opportunity to trade for good policy, the ITC should be allowed to expire, especially since there’s plenty of evidence it’s no longer needed.

Solar, the web site GreenTechMedia reports, “will soon be able to out-compete gas-fired plants around the world on a levelized cost basis.” Large investments from foreign-based solar module manufacturing companies such as Hanwha Q Cells have led to the opening of manufacturing facilities in the United States. And solar energy experienced explosive growth between 2010 and 2016.

According to GTM Research, annual installations grew from just 849 MW in 2010, to more than 15,000 MW in 2016, a record-breaking year when the U.S. solar market nearly doubled its annual record for installations – while tax incentives are factored into the growth, efficiency and affordability have driven the adoption of the technology.

If the ITC worked as intended, as there’s evidence to suggest it did, it’s not needed anymore. And if it didn’t work as those who voted for and voted to extend it planned, it’s also not needed anymore. Either way, it’s time for it to be allowed to expire, if for no other reason than to show members of Congress they can allow special interest tax breaks to disappear and survive when they run for re-election.


Washington Post Reporters Uncover Racial, Gender Pay Gap at Own Paper

By Alex GriswoldWashington Free Beacon

A study conducted by Washington Post reporters uncovered evidence of a gender and racial pay gap at their own newspaper.

A contractual agreement between the Washington Post Newspaper Guild and the Post allowed the union to compile a report detailing how female reporters and editors as a group were paid less than their male counterparts. The analysis, released Wednesday, also found that people of color were paid less than white men even when controlling for age and job description.

“The pay disparity between men and women is most pronounced among journalists under the age of 40,” the union said in a press release. “When adjusting for similar age groups, which in most cases is a good stand-in for years in journalism, it becomes clear that the pay disparity between men and women exists almost exclusively among employees under the age of 40.”

The report also found racial disparities in the paper’s performance evaluation results, which are a key metric for determining compensation.

“The Post tends to give merit raises based on performance evaluation scores, but those who score the highest are overwhelmingly white,” it continues. “But in 85 percent of instances in which a 4 or higher [out of 5] was awarded to a salaried newsroom employee, that employee was white…. On the flip side, 37 percent of scores below 3 were given to employees of color in the newsroom (the newsroom is about 24 percent nonwhite).”

The full report, compiled by a team of dozens of Post reporters and led by Pulitzer Prize-winner Steven Rich, also contained testimonials of pay discrimination in the workplace. One female reporter described how she learned that “the man who previously held her job, a reporter of the same age with more managerial experience but a fraction of her experience at the Post, was making $50,000 more than her.”

Another woman described learning that every single male journalist on her reporting team was paid more than her, “even though she’s been at the Postlonger than all of them and has been working in journalism longer than most of them. One of the men on her team is paid more than $30,000 more than her.”

In one bright spot for the paper, the report found that men and women on the commercial side of the business are paid about the same, though the median pay for employees of color was about 5 percent lower than their white employees. That disparity increases when adjusted for age, “suggesting that employees of color in commercial are paid less than their white peers despite having more experience.”

The Post has run frequent editorials lamenting the existence of a wage gap in America.

In a statement to the Free Beacon, the Post said it is “committed to paying employees fairly for the work they perform, and we believe that we do so, taking into account relevant factors like position, years of experience, and performance. It is regrettable that the Guild published a report on pay that does not appear to accurately account for these and other relevant factors, which have nothing to do with race or gender.”

“We believe the report is seriously flawed,” they added. “It is disappointing that the Guild chose to issue it—the Post told the Guild before its release that we had many questions about their methodology.”


Frontiers of Freedom Policy Alert: The Truth About the Jones Act

The Jones Act is a necessary and vital part of not just the United States maritime sector, but the economy itself.  According to the Transportation Institute, the Jones Act contributes more than $150 billion and more than 650,000 jobs annually to the American economy.  These numbers should only increase as we continue to invest in the growing Liquefied Natural Gas (LNG) market.  Currently, our domestic shipyards have built, and are in the process of building, assets capable of moving and delivering LNG. Conrad Shipyard delivered the first LNG bunker barge built in North America at its Orange, Texas shipyard. VT Halter has recently launched their LNG Articulated Tug & Barge, which should be eligible for work in early 2020.  Building Jones Act compliant LNG vessels comes with the added advantage of having the option to custom build them for the exact market they will be serving.

While the economic gains provided by the Jones Act do enough to justify its existence, the massive national security and defense benefits that it contributes reinforce the importance of this nearly century old act.  The law itself states that it “is necessary for the national defense and the development of the domestic and foreign commerce of the United States to have a merchant marine owned and operated as vessels of the United States by citizens of the United States composed of the best-equipped, safest, and most suitable types of vessels constructed in the United States and manned with a trained and efficient citizen personnel.”  During times of war, an overwhelming majority of the United States’ weapons, supplies, and even troops themselves are carried into war zones by vessels.  This practice is guaranteed in no small part by the Jones Act.  

Furthermore, maintaining a fleet of domestically flagged and crewed vessels allows us as a country to quickly assist our allies, as well as respond to any global crisis in an incredibly efficient manner.  The Jones Act also decreases the threat of a maritime related attack on U.S. territory, as it encourages increased monitoring of foreign vessels.  It also ensures the United States maintains control of our shipping routes.  Elimination of the Jones Act opens the door for adversarial countries such as China or Russia to seize control of our inland waterways, potentially creating massive national security risks.   

The United States is well on their way to creating and sustaining a strong LNG industry, one that is directly supplied and backed by the Jones Act.  Elimination or waiving of the Jones Act would be a rash decision, one that sets the United States up for failure on a number of fronts.  It would cost our economy hundreds of thousands of jobs, as well as billions of dollars in revenue, all while opening the door for opposing countries to capitalize on our losses.  Notably, we would also be creating a number of security risks and exposing ourselves to serious defense risks.  The numerous benefits of the Jones Act (economic, financial and defense related) far outweigh the uncertainty and danger of removing it.


Big Minimum Wage Hikes Harm Those They Are Intended to Help. Make These Reforms Instead.

By Peter CoveRealClear Policy

In 2017, Target announced it would raise its minimum wage to $15 an hour by the end of 2020, drawing praise from labor advocates who have called for other retailers to pay their employees a “living wage.”

But the new wage hike isn’t all it cracked up to be. Harry Holzer, in a 2016 Time Magazine article argued that “most minimum wage earners are not poor adults. They are, instead, young people (ages 16 to 24) or second earners in families where a spouse has a higher-wage job. So minimum wage increases help some poor heads of households, but are not well-targeted on them.”

Then there is this. A  new report by CNN BUSINESS, found the big-box retailer has been slashing employees’ hours since the announced wage hike. So have TJMAXX, Marshalls, The Gap and Old Navy, and fast food chains such as Burger King. Nearly half of D.C. employers said they have laid off workers, and reduced hours due to a minimum wage hike

Heidi Shierholz, who was the chief economist at the Labor Department during the Obama Administration, said the wage hike is being counter-attacked by the company slashing employees’ hours, “Most workers aren’t getting any more of what they really need.”

Since the wage increase, Whole Food employees have told reporters that they have experienced widespread cuts that have reduced schedule shifts across many stores, often negating wage gains for employees. Further, companies often move to a nearby city or state to avoid the increase.

And that’s not all. A recent study suggests minimum wage hikes lead to automation replacing low-skill workers’ jobs. In New York City, the rise had people in a panic fearing the loss of other government subsidies, such as section 8 housing due to the added income.  

Few would argue that finding a way to create living wages is a bad idea. But the unintended consequences of large raises in the minimum wage are clearly not worth the price. Here is a better way.

We now have a successful, if limited, device to raise wages without interfering in the marketplace. It is the Earned Income Tax Credit (EITC).  It is a refundable tax credit for low- to moderate-income working individuals and couples, particularly those with children. Many states already have state EITC’s, which further expand total income for a household. Critically, the EITC encourages work since the credit is only available to those with earned income.

  • The EITC reached 28.5 million tax filers in 2014. Under the 2015 tax rules, a single taxpayer is eligible for an EITC if he or she has an annual income up to $39,131 and if they claim one child as a dependent, up to $44,454 with two children, and $47,747 with three or more children. The refund available from the EITC can be as much as 45 percent of a family’s pre-tax income;
  • The benefits of the EITC have been shown to extend to maternal and children’s health, as well as to children’s development.

What needs to be done is to expand the EITC for single and childless couple workers. Also the 2009 changes in the EITC that reduced the marriage penalty and increased the credit for households with three or more children should be made permanent. These changes combined with a refundable child tax credit could be the basis of a broad wage supplement program. Finally, a reform should be instituted so that the EITC comes on a weekly or bi weekly basis, not the following year.

Holzer wrote that “when the minimum wage increases are moderate in size — up to, say, $10 an hour — such employment losses are very small, so the likely tradeoff between higher wage levels and lower employment becomes worthwhile.”

But when the minimum rises so dramatically, we will likely see much larger employment losses among young or low-income workers. The hard truth is that too many of them have too few skills to merit such high wages, at least in the eyes of prospective employers. Some (particularly immigrants) might instead be hired off the books, and paid in cash, while many more will lose employment entirely”.

Proposals such as those suggested by Isabel Sawhill and Quentin Karpilow along with Holzer combine a modest increase in minimum wage with revisions to the EITC.  This may be the best alternative to large increases in the minimum wage. 

The tsunami of minimum wage hikes comes from a well intentioned benevolence. Its results have been disastrous for the very people they were intended. A small increase in minimum wage combined with smart revisions to the EITC will benefit low wage earners without marketplace disruption and harm to the working poor.


Study: Free College Plans Leave Vast Majority Worse Off

'Over 86% of all households would lose' from free tuition policies

By Yuichiro KakutaniThe Washington Free Beacon

The “free” college plans touted by Sen. Elizabeth Warren (D., Mass.) and other Democratic presidential hopefuls will require radical tax hikes and leave 86 percent of American households worse off, a recent study found.

Warren and Sen. Bernie Sanders (I., Vt.) often promise tuition-free higher education and student debt cancellation on the campaign trail. However, a National Bureau of Economic Research study conducted by University of Wisconsin researchers found that free college translates to a hollowed-out higher education system that leaves many Americans worse off.

Researchers simulated two scenarios: one in which the federal government forces states to adopt tuition-free public colleges and another in which it provides subsidies to encourage states to do so. They calculated how each plan would affect the welfare of American households. The welfare function was derived from, among other things, the positive and negative impacts of higher tax rates and lower education costs.

“Over 86% of all households would lose while about 60% of the lowest income quintile would gain from such policies,” the study found.

In both scenarios, the free tuition policy benefited a group of the poorest Americans at the expense of everyone else. For the vast majority of U.S. households, any benefit derived from a free college plan was outweighed by its negative consequences.

Sens. Warren and Sanders, as well as former Obama official Julián Castro, want to make public college free for all Americans. Other presidential candidates, including South Bend mayor Pete Buttigieg and Rep. Tulsi Gabbard (D., Hawaii), backed a less ambitious plan that removed tuition costs only for middle- and low-income families.

Such proposals could end up hurting students before they get to college. For example, Warren said she would pay for her free-tuition plan by levying an up to 2 percent wealth tax on “ultra-millionaires.” She claims in her policy plan that states will split the cost of college tuition with the federal government but still “maintain their current levels of funding” for academic instruction even after her plan is implemented.

Warren’s plan would force state governments to withdraw resources from public K-12 education to fund the free college program, worsening the overall quality of education students receive before college. The lower education quality, along with higher tax rates, would contribute to a decline in welfare for U.S. households, according to researchers.

“The idea of ‘free’ public colleges is politically seductive. But of course a college education can’t actually be free—someone must pay for it,” the study said. “Allocating additional resources to the college stage may be self-defeating if this entails a reduction of public expenditure in the earlier stages.”

Some scholars, however, argue that lower per-pupil costs do not necessarily lead to lower education quality, but may reflect a more efficient school system. Analysts at the Heritage Foundation found that D.C. public school students drastically underperformed despite the district spending nearly double the national average per pupil.

Other academics have found flaws in existing free college programs. A Harvard University study found that a Massachusetts tuition-free college program for high-performing students actually lowered the students’ college completion rate, complicating claims from 2020 Democrats that their education plans would allow more students to graduate.


Elizabeth Warren’s Untenable Plans

If you’ve been having trouble finding someone to walk your dog, don’t worry. Any day now, Elizabeth Warren will announce “a plan for that.” It will undoubtedly be comprehensive, detailed, and replete with subsidies for lower- and middle-class dog walkers and underserved breeds. It will cost tens of billions of dollars and will receive widespread positive notice from the media. However, to judge by her other recent plans, the one thing it won’t include is any discussion of how she plans to pay for it.

The Massachusetts senator has challenged and possibly overtaken former vice president Joe Biden as the front-runner for the Democratic nomination, largely based on having a plan for the government to tackle every problem facing this country, no matter how big or how small, from issues with military housing to Puerto Rican debt to climate change.

The price tag for this massive expansion of government is enormous. Much of the attention in recent weeks has been focused on Warren’s embrace of Medicare for All, which she refuses to admit would require an increase in middle-class taxes. Even Vermont senator Bernie Sanders has conceded that such proposals, which would cost $30–40 trillion over 10 years, cannot be financed without tax hikes. Warren’s refusal to address this obvious fact makes her look less like a would-be policy wonk and more like a typical politician.

But even setting aside Medicare for All, Warren’s plans are likely to dump oceans of red ink onto our growing national debt. Her non-health-care spending proposals already total some $7.5 trillion per year over the next 10 years. Although these are not quite Bernie levels of government largesse, her proposals would still require nearly double our current levels of spending.

To pay for all this, Warren proposes a variety of tax hikes, mostly designed to hit corporations or high-earners: higher payroll taxes for those earning more than $250,000 per year; a 7 percent profits tax on companies earning more than $100 million; a 60 percent lobbying tax on firms that spend a million or more on lobbying, and so forth. But the biggest chunk of money would come from Warren’s proposed “wealth tax,” a 2 to 3 percent levy on net worth above $50 million. Warren estimates that this wealth tax will pull in more than $2.75 trillion over ten years. It won’t.

First, there is the slight problem that a wealth tax is probably unconstitutional. Of course, constitutional constraints are quaint notions in the Age of Trump. Regardless, it is worth noting that the Constitution permits the federal government to impose only “direct taxes,” such as a property tax. That’s why it required a constitutional amendment to enact the federal income tax. Many constitutional scholars warn that a wealth tax is neither a direct tax nor income tax.

Even if Warren can find a way around the constitutional guardrails — perhaps by something such as a retrospective wealth tax in which you wait until a taxpayer sells assets or passes away — a wealth tax is unlikely to raise anywhere near the amount of money she predicts.

Simply look at Europe’s experiments with wealth taxes. At one time, a dozen European countries imposed wealth taxes. Today, all but three have abandoned those levies. Among those repealing their wealth tax are the Scandinavian social democracies that Warren admires, Denmark, Finland, and Sweden. Norway retains a wealth tax but has significantly reduced it in recent years. Additional countries abandoning the tax include Austria, France, Germany, Iceland, Ireland, Luxembourg, and the Netherlands. Other countries, such as Great Britain, have considered wealth taxes and rejected them.

They did so because wealth taxes are administratively complex and difficult to enforce. Also, they significantly reduce investment, entrepreneurship, and, ultimately, economic growth. According to the Organization for Economic Cooperation and Development, European wealth taxes raised, on average, only about 0.2 percent of GDP in revenues. By comparison, the U.S. federal income tax raises 8 percent of GDP.

Two groups, however, would benefit substantially from a wealth tax. The tax would be a full-employment opportunity for the tax-preparation industry and for lawyers. After all, we would now have to determine fair market value for everything from homes and vehicles to artwork and jewelry to family pension rights and intellectual property. The other big winner would be lobbyists, who could be expected to descend on Washington en masse seeking exemptions and exceptions for their clients. If you think the tax code is a mess today, just wait until D.C. is done with Warren’s plan.

There is an old Yiddish proverb that goes “Mann tracht, un Gott Lacht,” or “Man plans, and God laughs.” It is all well and good that Senator Warren has a plan for everything. But until she actually figures out how to pay for everything without crippling our economy, such plans really don’t add up


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