Our increasingly ugly inflation problem is a perfect illustration of the Biden administration’s uncanny ability to get everything everywhere wrong all at once.
The Biden administration’s first response to any problem is to pretend that it isn’t a problem. That’s how inflation went from a minor problem to a major one. Unwilling to take the necessary steps to rein in inflation early — pushing the Fed to raise interest rates and slowing down the torrent of money going out the Treasury’s doors — Biden and congressional Democrats at first insisted that inflation wasn’t a real problem: “Transitory,” they called it.
And then when inflation turned out not to be transitory, they thought they could just pin it on the Russians. Jen Psaki sniffed smugly at the “Putin price hike,” as though Americans were too stupid to understand that inflation at home had started long before the Russian invasion of Ukraine. That gambit fizzled, too.
When you don’t have any fresh ideas or real principles — and when your long-term goals are limited by the fact that the president, who was born during the Roosevelt administration, isn’t exactly buying any green bananas — then the easiest thing to do is to throw money at every problem.
Throwing money at things is how you make inflation worse.
Washington had already thrown a lot of money at the economy during the COVID-19 emergency, and, predictably, the emergency spending outlasted the emergency. By the time Biden was elected in 2020, Washington had thrown $2.6 trillion in budgetary resources at COVID and had authorized as much as $4 trillion in subsidized federal lending. That was new money amounting to about a third of GDP sloshing around the economy. Biden’s first priority was pushing out another $1 trillion in a phony infrastructure bill (that has little to do with actual infrastructure) and a $1.9 trillion stimulus bill, even though the Consumer Price Index was already rising steeply, according to the Federal Reserve.
Our inflation problem is only partly an issue of dovish monetary policy and reckless spending. There are problems in the real-world physical economy, too, those “supply-chain issues” we hear about. The Biden administration has done extraordinarily dumb things to make these worse, too, keeping in place the worst of the Trump administration’s anti-trade policies. That “Made in the USA” talk sounds good on the stump, but the truth is we need a lot that we don’t make at home and aren’t going to — including much of the steel and other vital inputs for the high-value manufacturing we actually do here.
The incredible fact is the Biden administration still had punitive tariffs on Ukrainian steel while it was seeking financial aid for the Ukrainians — it wasn’t until the Chamber of Commerce and conservative critics started making a stink that the administration changed its stance.
Biden has rejected obvious reforms such as waiving the Jones Act, which keeps goods — and fuel — from moving from one US port to another via ship. It has backed union efforts to prevent operators from improving the capacity and efficiency of our ports through automation, sacrificing that progress in favor of a make-work policy for the benefit of longshoremen. Nearly none of that “infrastructure” money has made its way to any project that would actually ease supply-chain issues.
Interfering with trade during a supply-chain crisis is how you make inflation worse.
The United States, Canada and Mexico together make up a formidable energy superpower. But it does not matter how much oil and gas you have if you cannot get it to refineries and then get the refined products to consumers. Biden killed the Keystone XL pipeline, and his EPA is standing on the neck of developing any new conventional energy infrastructure. As gasoline prices skyrocket, US refineries in the Gulf are sending much of their gasoline to Mexico to be sold, because there is no economic way to get it to the Northeast or the West Coast.
Biden is contemplating a trip to Saudi Arabia to beg OPEC to produce more oil —apparently, nobody has told him that Midland, Texas, is a hell of a lot closer.
Driving up energy prices for no good reason is how you make inflation worse.
Inflation is sometimes associated with a booming economy, but our economy shrank in the last quarter. Biden, who was in the Senate in the 1970s, is old enough to remember the word “stagflation,” which is what you get when you have a stagnant economy and inflation at the same time.
And it is what you get when you combine the wrong monetary policy with the wrong fiscal policy, the wrong trade policy, the wrong regulatory policy, and the wrong energy policy.
And that’s how you make inflation worse.
Obsession with reversal of Trump policies proving disastrous
On 30 September 1938, British Prime Minister Neville Chamberlain joined France and Italy in the Munich Agreement which pledged that these countries would not interfere with Germany’s annexation of the Sudeten section of Czechoslovakia, which was inhabited by ethnic Germans.
This treaty became known as the “Munich Betrayal” because it violated mutual defense treaties signed in 1924 and 1925 by France and Czechoslovakia. Subsequent events showed that this treaty simply allowed Adolph Hitler the additional time he needed to conquer Europe one victim at a time. Eventually, he turned on Britain as well. For those reasons, Neville Chamberlain’s name has become synonymous with “appeaser”, “coward” and “naïve”.
In 2022, Joseph Biden is facing a similar dilemma. Russia and China are both asserting the same claim that Hitler used as an excuse to begin his invasion of most of Europe, namely, the ethnic heritage of the target countries. To date, Biden, like Barack Obama, seems inclined to imitate Chamberlain rather than Churchill.
The irony is that Biden himself has created this dilemma. His predecessor had implemented a set of solutions aimed at avoiding the very problems Biden is now facing. Underlying all of these problems is the Bidens’ lack of understanding that many actions taken in governing the homeland have foreign policy consequences as well. Biden and his cohorts appear to be living in a little bubble.
The present situation in Europe is a case in point. Much to the satisfaction of the radical Left, the new President cancelled the Keystone Pipeline, then the Anwar Pipeline in Alaska, followed by declaring all federal lands and seas off limits to all new oil drilling and pipelines, effectively crippling the energy industry in America and, incidentally, eliminating the USA’s energy independence as well as our ability to export energy products to other countries, especially Europe, Japan and China.
In a spasm of righteousness, he also reversed America’s withdrawal from the Iran nuclear materials production agreement as well as the other “green planet” agreements of the Obama administration. He also abandoned Israel and Afghanistan. And Germany got to keep the Nord Stream Pipeline. What he seemed to miss was the effect all this would have on Germany, NATO and Russia – with China, Taiwan, South Korea and Japan in the wings.
Our adversaries are watching all this. They have also seen the invasion of foreigners through our southern border, the steep inflation of our economy, the deep division of our population, and the paralysis around the COVID 19 pandemic.
They decided to take advantage of all this and make their play for their own dreams of conquering new territory. Russia covets control of Ukraine now, with the rest of the former Soviet empire on its agenda. China, having already broken its treaty with the UK and taken control of Hong Kong, now wants to annex Taiwan on its way to replacing the USA as the dominant power in the Western Pacific. (USA interests are commercial trade relationships rather than territorial – including China.)
So, let’s connect the dots. The most urgent issue at the moment is Russia’s interest in Ukraine. Why is that a concern of the United States? That is a good question. The answer really goes back to 1945.
World War II ended when Nazi Germany found the eastern half of the country occupied by the Soviet Union and the other half by the Allies, led by the United States, which had saved Europe from the Nazis, aided by the UK and France.
The Americans wanted to stop fighting and go home. The Soviets, however, saw no reason not to extend their occupation and they had the army standing by to replace the Germans as the conquerors of the rest of Europe.
Actually, the Allies faced the distinct possibility of that happening if they did in fact go home. To avoid the possibility of the Soviet Union using its army to occupy the rest of Europe after the surrender, US President Roosevelt and UK Prime Minister Churchill were able to persuade their other ally, Soviet Leader Josef Stalin, to divide Germany into four zones: USA, Soviet Russia, UK, and France, thus leveraging their power which Stalin still needed to win the war. (That treaty was the controversial Potsdam Agreement.)
When the actual surrender came, then, General Dwight Eisenhower, as Supreme Allied Commander, authorized the Soviet occupation of what came to be called East Germany (for which he was criticized in some quarters).
This caution was further justified in 1948 when the Soviets blockaded Berlin. Only the outstanding performance of President Harry Truman’s US Army Air Force in the Berlin Airlift avoided another war. This incident led to the formation in 1949 of the North Atlantic Treaty Organization (NATO) to protect Europe from the Soviet Union.
The ultimate concern of the NATO countries with Ukraine (not a member of NATO – although they want to join) is the same that Chamberlain faced in in 1938 with the Nazis, namely, that Russia will keep conquering one country after another until they control all the European countries – by far the major trading partners of the United States. Already, Russian President Vladimir Putin has added Georgia, Belarus, and Crimea and now he is threatening Ukraine (again). At some point in this scenario, World War III would start. Nevertheless, the objections to US involvement in Ukraine are already starting in America.
The force that stands in the way is NATO. It was formed for this purpose and has been successful for 72 years. The mainstay of this alliance on the European continent has been Germany, the most prosperous nation in Europe. However, Germany has a soft underbelly, namely its lack of sufficient sources of energy to support its population. This has become a critical concern of German authorities in recent years.
The closest source for 40% of the energy Germany needs is the new Nord Stream Pipeline which has been built under the Baltic Sea to link Russian oil directly to Germany. This creates a dependence of Europe’s largest and most prosperous nation on the European continent to the Russian Federation. This dependence gives Russia a potential weapon which can be used at any time to cripple the German economy as well as that of France.
The Trump administration dealt with this threat by succeeding in stopping the construction of the pipeline and substituting American energy for Russian energy, thus diffusing the entire issue. At the same time, President Trump strengthened NATO by requiring member nations to contribute their share of the cost of the Alliance and re-arming Poland and other nations bordering Russia one more time. Putin’s hands were tied by this strategy and the threat of war averted.
Joe Biden doesn’t’ have any of these levers. With childish delight he killed America’s energy industry, so that instead of supplying Europe with LNG, we are now pleading with Putin to sell us more of his supply. We have gone from seller to buyer. Biden has painted himself into a corner.
To add to his inept diplomacy, his administration has openly threatened Russia with an American cyber attack, not realizing apparently that American intelligence is unanimous in estimating that Russian cyber warfare capabilities exceed America’s. Russia is thought to possess EMP (electromagnetic pulse) technology which could cause a nuclear explosion powerful enough to cripple our entire electrical grid – a catastrophic weapon. The Americans have spent little on hardening our electrical grid, and our military spends more time on CRT briefings than on developing an offensive EMP weapon. So, Biden is playing with fire. We can only hope that we don’t get burned.
The bottom line is that there are consequences to every major action of an American president. To ignore these consequences is to disqualify oneself and one’s advisors from office.
Maybe impeachment isn’t such a bad idea after all. . .
Republicans call new perks "disgusting" and "out of touch."
House Speaker Nancy Pelosi belatedly jumped into America’s baby formula crisis on Friday, calling nationwide shortages “unconscionable” and setting an emergency vote next week. But while she tried to get Democrats caught up on a crisis that caught them by surprise, her administrative office was busy ramping up new perks for lawmakers.
House members were alerted to two new perks this week compliments of the chamber’s Democrat leadership: fully paid memberships to Peloton gyms as well as a brand new liquor and drinks outlet.
Republicans immediately seized on the optics, saying doling out additional benefits to lawmakers when everyday Americans are struggling to fill gas tanks, grocery carts or baby bottles was a bridge too far, even for Washington.
“Washington Dems couldn’t be more out of touch,” Rep. Drew Ferguson (R-Ga.) wrote as he tweeted out a new announcement by the House Chief Administrative Officer announcing a new “House Drinks storefront” in the Rayburn House Office Building where lawmakers and staff can buy beverages, wine and liquor.
“Whether you’re hosting a meeting or an office event or just want to stock up on your favorite drinks, House Drinks sells water, soda, juice, alcohol and spirits,” the announcement boasted. “Six, twelve and 24-packs are available depending on the drink.”
Ferguson, a member of the powerful purse-strings-controlling Ways and Means Committee, sent out his tweet with the hashtag “FirePelosi” and noted “your tax dollars can be used for purchases.”
“Americans can’t afford to buy groceries or put gas in their cars, and Nancy Pelosi decides now is a good time to open a congressional liquor store on Capitol Hill,” he added.
Meanwhile, multiple members of Congress confirmed to Just the News that the Chief Administrative Officer has also decided to provide all lawmakers, staff and Capitol Police officers with free VIP memberships to Peloton gyms.
An email obtained by Fox Business said the “premier employee benefit” will provide employees with both Peloton All-Access and a Peloton App membership at no monthly cost. The network said the deal involved a $10,000 upfront payment and $10 per month per staffer who used the perk.
Peloton confirmed to Fox Business that the “the US House of Representatives is extending Peloton Corporate Wellness to all House staff and Capitol police.”
The new perks follow other benefits Congress has received — and in some cases abused — over the years, like a post office, a bank, and fat pensions. And they come after Pelosi has faced murmurs about multiple instances of being out of touch, including when she boasted about her expensive freezer filled with ice cream during the pandemic, a move some progressives claimed hurt Democrat election chances.
The gym deal resonated all the way to the campaign trail, where Tennessee House candidate Robby Starbuck decried Washington’s tone deafness.
“Moms and Dads are going to 8 stores looking for baby formula while paying for gas they can barely afford but at least the Democrats are using our tax dollars to do Peloton,” Starbuck tweeted. “Disgusting.”
Biden gets desperate
A wise man once said: “When the economy is bad, people blame the party in power. When the economy is good, people look at other issues.”
Well, the economy is bad. Nice-sounding growth, job, and wage numbers do not count for much when the American standard of living is in decline. Inflation has outpaced income gains since last year. It remains at a 40-year high. Gas costs more than four dollars per gallon—sometimes much more—in every state. Americans under 40 years old are experiencing consumer delays, shortages, and scarce necessities, including baby formula, for the first time in their lives. According to the Pew Research Center, 70 percent of Americans say that inflation is “a very big problem.”
It’s also a very big problem for the party in power. President Biden’s economic approval rating is 34 percent in the most recent CNN poll. His overall job approval rating is 41 percent in the FiveThirtyEight average of polls. Republicans have held a slight but durable lead in the congressional generic ballot since last October. The midterm election is less than six months away. To preserve their narrow majorities in Congress, Democrats need to change the trajectory of this campaign. Right now.
Their solution? Pretend that the election isn’t a referendum on Biden’s job performance but a choice between Biden and Donald Trump. Scare voters with references to the extremism of the right. Invoking Trump alone is not enough, however. Terry McAuliffe tried that approach during last year’s Virginia gubernatorial campaign and it flopped. McAuliffe lost. Running against Trump and the Make America Great Again (MAGA) movement doesn’t work when Trump is neither president nor on the ballot. Democrats have convinced themselves that victory in the fall requires something scarier than MAGA. It requires Ultra-MAGA.
On May 10 Biden contrasted his policies with the “Ultra-MAGA Agenda.” Haven’t heard of it? According to Biden, it’s the brainchild of Senator Rick Scott of Florida, head of the National Republican Senatorial Committee. (In his remarks, Biden erroneously said Scott hails from Wisconsin.) Back in February, Scott released a policy document that remains controversial within the Republican Party and that few Republican candidates have endorsed in full.
Biden isn’t subtle. He wants to use Scott’s proposals as an electoral cudgel, just as Barack Obama campaigned against Paul Ryan’s “Path to Prosperity” in 2012. Hence Biden’s description of “the ultra-MAGA plan put forward by congressional Republicans to raise taxes on working families; lower the incomes of American workers; threaten the sacred programs American count on like Social Security, Medicare, and Medicaid; and give break after break to big corporations and billionaires.” Biden says that his foes are not ordinary Republicans. They are not run-of-the-mill Trump voters. They are “Ultra-MAGA Republicans.”
Someone has been spending too much time in focus groups. The Biden administration and congressional Democrats must think that the prefix “ultra” makes a noun sound spooky. But the president and his underlings will have to specify who really counts as an Ultra-MAGA Republican, what the Ultra-MAGA agenda entails, and when “ultra” should be capitalized before voters stop worrying about rising prices, violent crime, insecure borders, and craziness in schools. In its current usage, “ultra-MAGA” comes across as comical. It’s a hackneyed slogan. Some people may even find it appealing.
White House press secretary Jen Psaki told reporters the other day that “ultra-MAGA” is the president’s coinage for Republicans who support Rick Scott’s plan, Justice Samuel Alito’s draft opinion returning abortion law to the states, and Governor Ron DeSantis’s (R., Fla.) fight with Disney. “And so,” said Psaki, “to him, adding a little ‘ultra’ to it, gives it a little extra pop.”
A little extra pop? What is Psaki talking about—a new flavor of Pringles?
The Democrats are unable or incapable of running on their accomplishments. Their economic agenda is discredited among voters grappling with inflation. Their traditional advantage on education has narrowed because of parental fury at school closures, mask rules, confusing COVID guidance, and politically correct school boards. They have fallen back on scaremongering and name-calling.
Not for the first time. Nor for the last. Expect the alarm bells to ring louder as autumn approaches. By Election Day, Biden will have moved from “Ultra-MAGA” to “Mega-MAGA,” “Super-Duper MAGA,” “MAGA Deluxe XXL,” and, in homage to his love of ice cream, “All-Out Triple Scoop Chunky Monkey MAGA with Extra Deplorables.” Voters will respond as they usually do when Biden speaks. They will ignore him.
Billions of dollars in taxpayer funds intended to keep schools open during the COVID-19 pandemic will instead be used to push Critical Race Theory on children.
$122 billion from President Joe Biden’s “American Rescue Plan” is slated for the Elementary and Secondary School Emergency Relief Fund. Under the law, those funds are supposed “to help safely reopen and sustain the same operation of schools and address the impact of the coronavirus pandemic on the Nation’s students.”
Fox News reports schools in some states plan to instead spend those funds on “implicit bias” and “anti-racism” training, which teaches children that all white people are racist and global socialism is the only hope for racial reconciliation.
Fox News reports:
Applications were due on June 7, 2021, and at least $46.5 billion from the ARP ESSER fund has been allocated to 13 states, including California, New York and Illinois, that are planning to use the funds to implement CRT in their schools.
The California Department of Education was awarded $15.1 billion in ARP ESSER funding to implement its schools reopening plan, which included $1.5 billion for training resources for school staff regarding “high-need topics,” like “implicit bias training.”
The California DoE used funds to “increase educator training and resources” in subjects such as “anti-bias strategies,” “environmental literacy,” “ethnic studies,” and “LGBTQ+ cultural competency,” according to the plan.
[Secretary of Education] Cardona said in November 2021 that he was “excited” to approve California’s plan, and that it laid the “groundwork for the ways in which an unprecedented infusion of federal resources will be used to address the urgent needs of America’s children and build back better.”
The U.S. Department of Education claims the political re-education classes are necessary to “meet student and educators’ social, emotional, and mental health needs” and are part of a larger government-driven “culture shift” to ensure schools “reopen equitably for all students.”
One wonders what the Democrats in charge of the party’s economic program are thinking—if they indeed think at all. Their proposals are frighteningly similar year after year, decade after decade and now century after century.
The truth is that their objective is not fairness so much as it is to punish the successful. As it is, because honesty and other important virtues got tossed out the window long ago, the public continues in ignorance, counseled by fools and pretenders who explain their troubles away as being someone else’s fault.
Democrats’ worldview does not include certain proven realities, such as the fact that higher tax rates on income do not necessarily raise more revenue than lower ones. Each time the federal government has enacted major rate cuts, revenues increased because the corresponding increase in activity caused the economy to grow, as happened under Presidents Harding, Kennedy and Reagan.
It also happened under Trump. According to the Congressional Budget Office, the 21 percent corporate income tax generated revenues of $372 billion in 2021—nearly as much, the Wall Street Journal recently observed, as the CBO projected would come in at the previous rate of 35 percent.
Somehow, today’s Democratic Party leaders missed all that. When you recall that people used to refer to them as the party of “sound money,” the shift is comical. Consider Senate Majority Leader Chuck Schumer‘s latest gambit to reduce energy prices—which spiked after the Biden administration attacked the production of energy from domestic sources—by raising energy taxes.
“A wide array of Democrats, including Sens. Maria Cantwell (Wash.), Ron Wyden (Ore.), Elizabeth Warren (Mass.), and Tammy Baldwin (Wis.), are now finalizing measures that would impose steep fines for abuse, crack down on corporate consolidation or set up new taxes on oil and gas companies’ profit windfalls,” The Washington Post recently reported, without bothering to explain how making energy more expensive (which is what more taxes on energy will do) will bring the price down.
Up is up and down is down unless someone convinces you somehow that two plus two equals five.
The problem of economic mismanagement isn’t confined to Washington. Some politicians believe subsidies are forever. In Kentucky, Democratic governor Andy Beshear vetoed legislation bringing the COVID state of emergency to an end—not because the disease remained a threat, but because he wanted to preserve the flow of relief money to fight the sudden reappearance of inflation by distributing it to folks who are most severely affected. These same people are probably more likely to vote for him when he runs for reelection than those who can better manage the rise in the price of essentials occurring on Joe Biden‘s watch, but Beshear almost certainly never gave that a moment’s thought.
The latest gambit, also backed by Schumer, is the Biden plan to tax unrealized capital gains. As the Democrats see it, when the value of an asset—such as stock shares, real estate holdings or artwork—increases, the owner should have to pay a tax on its newly assessed value. Why that won’t work, at least in economic terms, is that the owner of an unsold asset realizes no actual “gain.” That makes the proposal a wealth tax, which is constitutionally dubious.
Those who understand economics, and believe the government should preserve value rather than loot the stores of the successful, have argued in response that real fairness would lead to the indexation of the value of capital assets to take inflation into account. Without indexation, as data from the Committee to Unleash Prosperity created by Dr. Arthur Laffer show, “the effect of high and persistent inflation in the 1970s pushed the tax rate on REAL gains to 100 percent or more. In other words, investors paid a tax on real capital losses.”
Inflation, which occurs most often because of government mismanaging the economy, destroys the real value of assets even if their price appears to go up. Taxing the apparent appreciation of those assets without considering whether their real value has gone down is confiscatory.
Therein, as Shakespeare wrote, lies the rub. Republicans see tax policy as a tool useful for producing economic growth—which is a good thing. Jobs are created, wages rise, gains in productivity are achieved and living standards improve. Unfortunately for us all, including the disadvantaged, that’s not how progressives see them.READ MORE
To progressives, taxes are a way to redistribute income and punish the successful. The concept of progressive taxation is based on the idea that equalization of outcomes is a good thing. Somehow though, year over year, decade over decade and century over century it never happens.
When the economy doesn’t grow, the rich generally manage to stay rich or get richer while the poor get poorer. Nevertheless, progressives continue to promote these policies as they have since before the creation of the income tax under Woodrow Wilson. That’s because, as historian Ryan Walters writes in his new book on President Warren G. Harding, “The idea of a national income tax had always excited those who wanted to expand the size and scope of government.”
Such proposals, Walters writes, bring inherent danger. “When men once get in the habit of helping themselves to the property of others, they are not easily cured of it,” The New York Times once wrote during the debate over the income tax amendment, according to Walters. The great grey lady of American journalism was, that time at least, absolutely right.
An unlikely coalition of senators is backing a bill by Sen. Amy Klobuchar, D-Minn., to drastically overhaul the nation’s antitrust laws. They may want to give her proposal another read, because there are things about it that might not be what they seem.
Klobuchar wants to be president and is counting on this legislation, Senate Bill 2992, the “American Innovation and Choice Online Act,” to establish the progressive bona fides she needs to leap to the front of the pack running for president the next time the Democratic presidential nomination is up for grabs.
If she expects her effort to excite the people whose spines once tingled at the thought of President Bernie Sanders, she’s off base.
The Republicans who signed onto her bill generally did so in the belief it gives the government the power to ensure “Big Tech” plays fair with conservatives. It doesn’t, and letting federal bureaucrats determine what to censor online would be worse.
The legislation would also make life more difficult for social media companies the Democrats have allied with in pursuit of election victories. The framework her legislation would erect would take a big bite out of the hand that feeds her.
The impact on Big Tech isn’t the only reason politicians should be concerned. Those issues are largely political. The way some businesses are treated is not — and has given rise to complaints favorable treatment is being extended to some kinds of firms because of what it doesn’t address.
What kind of crony capitalism may we be seeing? The Klobuchar bill overlooks — because it’s not included in the list of discriminatory conduct by “covered platform” — the use of pharmacy benefit managers, also known as PBMs, that negotiate with pharmaceutical manufacturers and health insurers to set the price of prescription drugs.
Proponents say these companies produce lower prices for consumers. Critics say the opposite, arguing they are too open to inducements from manufacturers to set prices higher than they need be in exchange for some kind of remuneration.
Their involvement in the health-care system is, for the moment, a political hot potato second only perhaps to continuing quest by House Speaker Nancy Pelosi, D-Calif., to impose a regulatory scheme to impose price controls on drugs.
According to Health Industries Research Companies, CVS has the biggest share at 34% of total 2021 adjusted claims. Express Scripts is second at 25% and OptumRx has 21%.
Now 80% control doesn’t corner the market exactly, but progressives like Klobuchar used to argue it comes uncomfortably close.
Critics were disappointed when members of the Federal Trade Commission voted along party lines back in February not to investigate allegations of anti-competitive behavior by these pharmacy benefit managers. Nonetheless, they keep trying to call on the heavy hand of government regulation to swipe them into line.
Klobuchar cannot be unaware of this ,yet for some reason, her bill (which also has the support of Rep. David Cicilline, D-R.I., chairman of the House Antitrust, Commercial and Administrative Law Subcommittee of the House Judiciary Committee, doesn’t mandate or include a mechanism triggering their scrutiny under the proposed new track taken by the proposed legislation. Has cronyism crept into the process?
Some say yes, pointing to the fact UnitedHealth OptumRx, the No. 3 company, has its headquarters in Klobuchar’s Minnesota. CVS, which has the largest single share of the market, is based in Rhode Island, just like Cicilline,
UnitedHealth has given $154,820 in campaign contributions to Klobuchar while CVS gave $50,085 in political money to Cicilline, who also backed the company’s proposed $69 billion merger with Aetna, one of the largest of the nation’s health insurers.
That’s just the kind of business deal the legislation looks to stop because Klobuchar and friends believe mega-mergers are bad for consumers.
Coincidence? Probably. Still, the taint of corruption touches so much of what Washington does these days it’s hard to be sure.
What is clear is that big is not necessarily bad and that the consumer welfare standard, which has been the prevailing justification for most antitrust actions taken for nearly five decades, is a sound enough approach to dealing with legitimate antitrust issues when they arrive.
Klobuchar’s bill should be allowed to go no further.
Two years ago, millions of Americans were summoned into lockdowns, throwing families into financial crises and kicking kids out of school. And it was counterproductive, finds a new study, not only not reducing Covid-19 hospitalizations and deaths but inflicting additional harms such as millions of missed cancer screenings, increased suicide and anxiety, and ruining children’s educational futures.
“The correlation between health and economy scores is essentially zero, which suggests that states that withdrew the most from economic activity did not significantly improve health by doing so,” says the National Bureau of Economic Research study out this month.
According to the study, a stricter lockdown in states was correlated with the worst Covid outcomes, exactly opposite of what the corporate media and public health establishment told Americans. Fittingly, these freedom-restricting states were mainly Democrat-run. In contrast, the Republican-governed states with shorter and looser lockdowns showed lower Covid mortality while reducing the harms lockdowns cause people.
The study found the worst outcomes were found in New Jersey, Washington DC, and New York state, and the best in Utah, Nebraska, and Vermont.
Due to ill-advised lockdowns, many young Americans were deprived of a consistent education for nearly two years. Even when Covid cases dropped, numerous leftist school boards across the country voted against in-person learning. The study found in-person learning to be safer than remote learning both for children’s mental health and Covid prevention. This is because Covid poses a very low risk of danger to children, while lockdowns a high degree of risk.
“School closures may ultimately prove to be the most costly policy decision of the pandemic era in both economic and mortality terms,” says the NBER study. “One study found that school closures at the end of the previous 2019-2020 school year are associated with 13.8 million years of life lost… The OECD estimates that learning losses from pandemic era school closures could cause a 3% decline in lifetime earnings, and that a loss of just one third of a year of learning has a long-term economic impact of $14 trillion.”
According to a study published by Fair Health, during lockdowns children under the age of 18 showed an increase in anxiety disorders, major depressive disorder, and intentions to self harm. Despite such evidence, Democrats refuse to take responsibility for damaging Americans’ health and well-being.
The NBER study also notes that Florida, a state that reversed its lockdown early and faced years of media criticism for it, had better outcomes than many severely locked down states.
“Although sometimes criticized as having policies that were ‘too open,’ Florida proved to have average mortality while maintaining a high level of economic activity and 96 percent open schools,” the study notes.
Even today, after dozens of studies finding similar results visible as early as April 2020, just one month into U.S. lockdowns, the Biden administration is still reluctant to officially waive Covid restrictions and give kids the childhoods they deserve. The administration recently renewed the face mask requirement for airplane travel and is keeping more Covid restrictions on the table.
Governments and employers also continue restricting economic activity and damaging public trust by mandating certain Covid treatments for people to participate fully in society.
For a party whose representatives cried for the children at the border, what about American children who were robbed of an education and locked inside for nearly two years?
For at least a decade, American progressives have been waging war on the nation’s energy sector. They’re all in on wind and solar and are using scare tactics, tax breaks, and government preferences to push a Green Agenda that leaves zero room for oil, coal, or natural gas.
That’s the real Biden policy, fulfilling a vow he made in September 2019: “I guarantee you, we are going to end fossil fuel.” And for the past 15 months, the president has done his best to keep that commitment.
Such grandiose plans come at a price. Biden’s anti-fossil energy positions are causing tremendous political harm to himself and his party. Prices are up. His approval is down. His solution? Pass the buck, as the White House did recently when it called the spike in energy costs “Putin’s Price Hike.”
The people aren’t buying. Only 27 percent of voters in a recent Winston Group survey agreed America must “reduce reliance on oil and gas even if it means higher costs because that is the only way to ensure a transition to alternative energy.” By more than two to one they believe, the nation should continue to rely on oil and gas to meet current energy demands while “transitioning over to alternative energy” sources.
America’s current energy needs conflict with the Biden Administration’s climate policy priorities, but that doesn’t stop progressives from arguing the need for more green energy and less traditional fuels. Even when the average national price at the pump is well over $4 a gallon.
Energy costs are the main driver of inflation. In 2021, they were up 29 percent over the previous year. The price of gasoline surged, fuel oil costs jumped 41 percent, and overall yearly inflation hit an alarming 7 percent. The Biden people haven’t got a clue. In early March White House Press Secretary Jenn Psaki incorrectly claimed the administration’s energy policy was not to blame for increased prices. When pressed, she argued “The Keystone Pipeline was not processing oil through the system. That does not solve any problems. That’s a misdiagnosis or maybe a misdiagnosis of what needs to happen.”
It’s Psaki who made the “misdiagnosis.” An operational Keystone XL would have augmented the capacity of an existing pipeline running from Alberta, Canada to Superior, Wisconsin, delivering 830,000 additional barrels of oil a day.
Biden’s vilification of the oil and natural gas industry at a time when it’s needed to keep the economy and the country going is not new. Since its earliest days, his administration has pushed the cost of conventional fuels up through the Keystone XL Pipeline cancellation and the moratorium on new oil and gas leases on federal lands. Republican Rep. Jim Banks of Indiana recently released a study identifying more than 80 specific actions the Biden Administration has taken on energy-related matters that have helped boost the price at the pump. In Banks’ words, “President Biden has waged an unprecedented, government-wide assault on our nation’s ability to produce cheap, reliable energy.”
That’s why Americans have seen a steady increase in energy prices, not the invasion of Ukraine. Biden’s moratorium on federal leases is another problem. Many current leases are tied up in litigation. New leases on federal land were brought to a halt. The administration’s refusal to renew the Interior Department’s five-year offshore leasing plan, set to expire at the end of June has imposed a further strain on production. If the plan is not renewed, expect overall fuel production to drop by the tune of 500,000 fewer barrels of oil and gas produced per day from 2022 to 2040.
The United States Energy Information Administration’s Annual Energy Outlook 2022 predicts petroleum and natural gas will be the most used fuels in the U.S. through the year 2050. That’s reality – unless the government intervenes by imposing mandates that restrict or ration the production and use of fossil fuels.
That’s a problem domestically and internationally. Having the ability to turn the spigot on here at home, means there’s no need to reach out to hostile countries with offers to alleviate economic sanctions placed on them over their disregard for human rights and the threats they pose to the United States in exchange for access to their oil reserves. That’s a fool’s bargain – but one America’s current leadership is telegraphing it is ready to make.
Even without the war in Ukraine, people have realized we need abundant, reliable oil and gas “made in America.” Going to other countries is not the answer, nor is making an expensive, lengthy, transition to renewable sources that compromises our economic strength and national security.
We must increase oil and gas production in the U.S. now. We have the resources – we need the administration to get out of the way of developing them.
Increased energy prices in the wake of Russia’s war on Ukraine have caused critics of the Jones Act to claim the law is contributing to more expensive domestic petroleum products.
The law merely limits waterway shipping within the U.S. to American-built and -owned ships crewed by Americans, but its detractors falsely claim that repealing it would help lower costs.
The fact is the cheapest and safest way to move petroleum and natural gas products across a nation — and even a continent — is through pipelines.
The real culprit behind the high cost of transporting energy are extremists who oppose pipelines and prevent them from being built. Without such needed pipelines we will continue to pay too much to transport petroleum.
The Jones Act has nothing to do with these costs and in fact has many benefits. It is time for its opponents to stop playing politics.
As Americans have vividly seen in the last few years, building a pipeline is a political football. It takes years, even decades, to obtain the required political approvals.
And even once obtained, such permits can be reversed by know-nothing political activists. So this political circus arranged by these pipeline circus clowns means we overpay to transport oil.
The U.S. has more than 3 million miles of pipelines linking natural gas production and storage facilities with millions of American consumers — including homes. Those who argue that pipelines are inherently dangerous are simply wrong.
We have decades of data with millions of miles of pipelines — even going through neighborhoods. Pipelines are reliable, economical and safe.
Likewise, gasoline isn’t typically shipped in tanker trucks from refineries to local gas stations. There are pipelines that bring the gasoline to regional terminals. Then trucks take the gasoline from those terminals to local gas stations — thus limiting the miles that gasoline is transported via highway.
When extremists make it unnecessarily difficult to build this needed energy infrastructure, we can’t pretend the Jones Act is why we are overpaying to transport energy.
On the other hand, the Jones Act has a number of important benefits that its detractors would like to ignore.
The Jones Act simply requires that waterway shipping within the U.S. is done by American-built, -owned and -crewed ships. It doesn’t prevent foreign shippers from coming to our shores. But they can’t sail up our rivers and make multiple stops.
The Jones Act was intended to ensure that we have a viable shipbuilding and repairing capability to support our military. In a world where many foreign nations heavily subsidize their shipping industries, we must not allow ourselves to become dependent upon other nations to maintain our naval capability.
Former Vice Chairman of the Joint Chiefs of Staff, Gen. Paul Selva said, “I am an ardent Supporter of the Jones Act. [The Act] supports a viable shipbuilding industry, cuts cost and produces 2,500 qualified mariners.”
Likewise, Former Coast Guard Commandant, Admiral Paul Zunkunft said, “You take the Jones Act away, the first thing to go is these shipyards and then the mariners. … If we don’t have a U.S. fleet or U.S. shipyard to constitute that fleet how do we prevail?”
The military understands that the Jones Act is critically important to our national security.
Our adversaries would like a weaker America, not a stronger one. And the Jones Act helps keep us strong. If we haven’t learned in the past few years that being dependent upon hostile powers is both risky and costly, we haven’t been paying attention.
The Jones Act also has a significant impact on homeland security.
Dr. Joan Mileski, head of the Maritime Administration Department at Texas A&M, said, “If we totally lifted the Jones Act, any foreign-flagged ship could go anywhere on our waterways, including up the Mississippi River.” This would make our defenses incredibly porous as we have more than 25,000 miles of navigable inland waterways.https://e04e5a828992561bbe9773e12b110d72.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.html
Michael Herbert, Chief of the Customs & Border Protection’s Jones Act Division of Enforcement said: “We use the Jones Act as a virtual wall. Without the Jones Act in place, our inland waterways would be inundated with foreign-flagged vessels.”
Without the Jones Act, Chinese Communist Party leader Xi Jinping or Russian President Vladimir Putin could gain access to America’s heartland, sending ships to operate up and down the Mississippi River. They could spy and even unleash weapons from container ships.
The Jones Act protects America. Blaming the Jones Act for the fact that extremists have hamstrung our nation’s energy infrastructure and driven prices up is a profoundly stupid argument.
The world is a dangerous place, filled with adversaries that will be all too happy if the Jones Act is weakened.
The president's $5.8 trillion budget shows he wants more of the same government spending that is already sending prices through the roof.
“My dad had an expression,” said President Joe Biden as he announced his budget plan for FY 2023. “Don’t tell me what you value, show me your budget, and I’ll tell you what you value.”
So at the very moment that we’re experiencing the highest inflation in 40 years, what does Biden value? The same sort of government spending that is already sending prices through the roof.
You’d figure that with Covid receding, debt rising, and a tidal wave of unfunded liabilities staring us right in the kisser, Biden would take the opportunity to radically reset the federal government’s balance sheet. Instead, his budget plan could be titled Rearranging Deck Chairs on the Titanic.
The president wants to spend $5.8 trillion, which would include jacking spending on defense, education, and police. He talks about levying a controversial—and probably unconstitutional—wealth tax on billionaires to help pay for it all but still expects a budget deficit of $1.2 trillion (see Table S1 in Summary Tables)! If you’re going to tax unrealized capital gains, President Biden, at least spend it on something pretty!
It’s debt-financed spending that helps spur inflation in the first place. Rather than cutting spending and reforming entitlements, the government borrows and prints money so it can keep giving more goodies to its favored citizens. You get more dollars chasing the same amount of goods, and that leads to price hikes.
Meanwhile, at least a dozen states—including such far-flung places as California, Georgia, Hawaii, and Maine—are thinking about giving residents money to spend on things like gas, the price of which has gone through the roof. “Direct relief will address the issue that we all are struggling to address,” says California Gov. Gavin Newsom. “That’s the issue of gas prices, not only here in our state, but of course, all across this country.”
Is he serious? Doling out tax dollars to alleviate the pain of inflation is like drinking a beer in the morning to ease your hangover. It’s only setting up the next binge.
Federal Reserve Chairman Jerome Powell has announced a series of interest rate hikes to help tame inflation, but in a recent speech, he made no mention of the increase in the money supply measured by M2, which has risen by a record 41 percent in two years, or of the Federal Reserve’s holding of U.S. debt, which has jumped $3.5 trillion over the same time period.
Powell’s interest rate hikes will be small enough that it’s unclear whether they will have much impact. Back in the 1980s, Fed Chairman Paul Volcker allowed the fed funds rate to more than double in less than two years’ time to over 20 percent, which helped kill inflation but also caused the most severe recession since the Great Depression.
According to recent conservative estimates from the Congressional Budget Office, as the federal budget grows, the cost of paying interest on the debt will keep increasing until it accounts for about 24 cents of every dollar spent by 2050. And that’s assuming interest rates will remain historically low.
So even moderate increases in the fed funds rate would push the cost of servicing the debt much higher, causing the government to borrow more money and kicking us into a vicious cycle of economic despair.
Biden can talk a good game about “returning our fiscal house to order,” but it’s clear he doesn’t understand why prices are going up—and that his policies will keep them high for the foreseeable future. That might cost Democrats control of the House and the Senate in the fall and perhaps Biden the White House in 2024.
That will be too bad for him and his party. But his unwillingness to confront massive spending and debt is going to cost all of us a lot more than that.
The president has an unerring instinct to make problems worse
“This is a wartime bridge to increase oil supply into production,” President Biden said during his announcement Thursday that he would release more barrels of oil from the nation’s Strategic Petroleum Reserve than at any point in American history. His decision was also a concession. None of the policies Biden has enacted throughout his short presidency have alleviated the problems they were meant to solve. Quite the opposite: In practically every case, Biden has made things worse.
Energy? Killing the Keystone pipeline was one of the first things Biden did when he took office. In February, Biden delayed approval of new oil and gas leases. He continues to blame the increase in gas prices on Vladimir Putin’s invasion of Ukraine, even though prices began to rise early in Biden’s term. Biden scapegoats oil companies for sitting on profits, while he could be doing everything in his power to ramp up domestic production of available fuel sources—including nuclear.
The fallout from Putin’s war was bound to make energy scarce and thus more valuable. Biden could have lessened the pain on the American consumer by pursuing an all-of-the-above energy dominance policy from the start, and by reducing the size of the American Rescue Plan so that it didn’t contribute to inflation. He chose to ignore the warnings of economists such as former Treasury secretary Lawrence Summers and followed his advisers who incorrectly predicted that inflation would be temporary. By turning to the Strategic Reserve, Biden is promoting a temporary fix while the long-term solutions are plain to see. He’s relied on similar gimmicks before. They haven’t worked.
Consider Biden’s immigration policy. He spent his early days as president tearing up President Trump’s agreements with Mexico and several Central American countries that forced asylum-seekers to stay in third-party nations while U.S. judges decided on their claims. The rush for the border was swift and ongoing. This week, Biden is expected to reverse a rule Trump enforced during the coronavirus pandemic that allowed border agents to repatriate illegal immigrants swiftly because of the public health emergency. Homeland Security officials tell the New York Times that because of Biden’s decision they are planning on unauthorized crossings to double from an already high level. Republicans must be giddy with anticipation at the coming headlines.
Immigration and the border were the first places where you saw erosion in Biden’s job approval numbers last spring. Now he’s about to do something that will undermine border security and his political standing, and for no discernible reason. The pandemic is not over. Border crossings aren’t falling. We know that Biden’s decision will attract additional illegal immigrants. Nothing about this policy makes sense.
Biden doesn’t make sense. His Europe trip was a substantive success but a stylistic failure. The Western alliance is holding. But the president gaffed his way across Eastern Europe—saying the West would respond “in kind” to a Russian chemical attack, denying the deterrent value of sanctions when his subordinates have said precisely the opposite, telling U.S. troops that they would see the horrors of war in Ukraine firsthand, then raising the possibility that America’s strategic goal is regime change in Russia. Then, when Fox’s Peter Doocy soberly asked him about these inadvisable statements, Biden denied that he had said anything problematic.
I happen to believe that the world would be a safer place if Vladimir Putin were out of power—that indeed one possible consequence of a Russian defeat in Ukraine is Putin’s demise. I also believe that presidents shouldn’t sound like me. They need to watch their public statements because, as we were reminded throughout the Trump administration, words matter. Biden’s sentiment in Warsaw was correct. His sense of timing was wrong. After all, you never get in trouble for what you don’t say. Biden’s problem is that he rarely lets his actions speak louder than his words. And the words are garbled.
People notice. They don’t like what they hear, they can’t stand what they see. The public verdict on Biden is grim. He has not benefited from a rally-around-the-flag effect. His approval rating continues to fall. He’s at 41 percent approval in the FiveThirtyEight average of polls. He fell under 40 percent approval in this week’s Marist poll. Republicans continue to lead the congressional generic ballot. Democrats recognize that the electoral battlefield has widened. Biden is running out of time to improve his standing. And he hasn’t demonstrated an ability to bounce back as president.
Biden entered office at a time of national emergency. He benefited from the public’s desire to see Donald Trump off the airwaves for the first time in years. He oversaw the successful implementation of the vaccination program Trump had started. The resilience of the American economy helped him too.
Then the situation went sideways. Biden’s problems started on the southern border, ramped up with the Delta variant of coronavirus, accelerated with inflation, spread with the debacle in Afghanistan, and haven’t abated since. His rallying of the West in support of Ukraine is laudable, but he still hasn’t done enough to help the Ukrainians and he keeps stumbling on his own message. His commitments to the left wing of his party keep him from embracing the center. And damaging leaks about the federal investigation into his son’s finances only will mount if Republicans take Congress in November.
Biden’s reliance on the Strategic Petroleum Reserve is telling. This is a presidency that is running out of gas.
The administration wants to double the funding for a federal program that has failed in its aim to close achievement gaps between low-income and higher-income students.
This week, President Joe Biden released his $5.8 trillion budget proposal for 2023 which included a plan to more than double Title I education funds for low-income students. Biden’s 2022 budget proposal included the same plan to double federal Title I spending, but in the end, Congress only approved a 6% increase, about $19 billion less than what the administration requested.
While Congress is equally unlikely to pursue the president’s proposal this year, it’s important to note why doubling down on Title I funding would be such a flawed strategy. Research consistently shows the program, intended to provide federal funding for schools with higher percentages of children from low-income homes, has failed in its aim to close achievement gaps between low-income and higher-income students since its inception in 1965 as part of the Elementary and Secondary Education Act. For example, a study by researchers at George Mason University concluded:
“Given the modest evidence on academic gains and gaps closure attributable to Title I, and considering that the program costs about $15 billion per year, we conclude that Title I compensatory program has been largely ineffective in accomplishing its goal of closing the achievement gaps between disadvantaged and non-disadvantaged students.”
The ineffectiveness should come as no surprise to those familiar with how Title I works. After Biden proposed the 2022 Title I windfall last year, my colleague Christian Barnard and I highlighted just a few of the program’s faults in National Review:
“The current formulas are riddled with complexity, including political provisions that have nothing to do with students’ needs. For example, states are guaranteed a minimum amount of funding even if their share of Title I–eligible students doesn’t warrant it. As a result, Title I dollars are delivered like buckshot, ranging from Idaho getting $984 per eligible student in 2020 to Vermont getting $2,590 per eligible student — 163 percent more per pupil than Idaho. Title I spending needs to be fixed, not increased.”
Keep in mind that President Biden’s Title I proposal comes at a time when many public schools are already flush with cash, thanks to $190 billion in federal COVID-19 relief funding that is supposed to prioritize students in high-poverty school districts. Not only that, but public schools are also facing sharp enrollment declines, meaning the budget proposal calls for spending more money on fewer kids when K-12 spending is already at record levels.
Policymakers should be skeptical of continuing to pour more money into a broken federal program. Instead, they should pursue reforms that make Title I dollars flexible, so they support giving families more opportunities and the ability to customize their education. For example, Congress could update the program’s allocation rules and ensure the aid follows students to their public or private school of choice.
Lawmakers could also overhaul the program’s complex web of formulas and non-transparent compliance rules that contribute to school districts’ ineffective spending of the federal funding.
There are a lot of needed reforms to reduce achievement gaps and improve outcomes for low-income students, but pouring more money into Title I isn’t one of them.
The U.S. central bank must move “expeditiously” to bring too-high inflation to heel, Federal Reserve Chair Jerome Powell said on Monday, and will, if needed, use bigger-than-usual interest rate hikes to do so.
“The labor market is very strong, and inflation is much too high,” Powell told a National Association for Business Economics conference. “There is an obvious need to move expeditiously to return the stance of monetary policy to a more neutral level, and then to move to more restrictive levels if that is what is required to restore price stability.”
In particular, he added, “if we conclude that it is appropriate to move more aggressively by raising the federal funds rate by more than 25 basis points at a meeting or meetings, we will do so.”
Fed policymakers last week raised interest rates for the first time in three years and signaled ongoing rate hikes ahead. Most see the short-term policy rate – pinned for two years near zero – at 1.9% by the end of this year, a pace that could be achieved with quarter-percentage-point increases at each of their next six policy meetings.
By the end of next year, Fed policymakers expect the central bank’s benchmark overnight interest rate to be at 2.8%, bringing borrowing costs to a level where they would actually start biting into growth. Most Fed policymakers see the “neutral” level as somewhere between 2.25% and 2.5%.
Powell repeated on Monday that the Fed’s reductions to its massive balance sheet could start by May, a process that could further tighten financial conditions.
U.S. stocks extended earlier losses after his remarks and traders boosted bets that the Fed will deliver a half-percentage-point rate hike at its policy meeting in May.
“This is not just going to be a near-term tactical phenomenon,” said Kevin Flanagan, head of fixed income strategy at WisdomTree Investments in New York. “This is a more strategic type of messaging, I think, from the Fed.”
A consensus for more aggressive tightening – or at least an openness to it – appears to be growing
Atlanta Fed President Raphael Bostic, who expects a slightly gentler path of rate increases than most of his colleagues, said earlier on Monday he is open to bigger-than-usual rate hikes “if that’s what the data suggests is appropriate.”
Speaking on Friday, Fed Governor Chris Waller said he would favor a series of half-percentage point rate increases to have a quicker impact on inflation.
The U.S. unemployment rate currently is at 3.8% and per-person job vacancies are at a record high, a combination that’s pushing up wages faster than is sustainable.
“There’s excess demand,” Powell said, adding that “in principle” less accommodative monetary policy could reduce pressure in the labor market and help stabilize inflation without pushing up unemployment, generating a “soft landing” rather than a recession.
Inflation by the Fed’s preferred gauge is three times the central bank’s 2% goal, pushed upward by snarled supply chains that have taken longer to fix than most had expected and that could get worse as China responds to new COVID-19 surges with fresh lockdowns.
Adding to the pressure on prices, Russia’s war in Ukraine is pushing up the cost of oil, threatening to move inflation even higher. The United States, now the world’s biggest oil producer, is better able to withstand an oil shock now than in the 1970s, Powell noted.
Although the Fed in normal times would not likely tighten monetary policy to address what in the end may be a temporary spike in commodity prices, Powell said, “the risk is rising that an extended period of high inflation could push longer-term expectations uncomfortably higher.”
Last year, the Fed repeatedly forecast that supply chain pressures would ease and then was repeatedly disappointed.
“As we set policy, we will be looking to actual progress on these issues and not assuming significant near-term supply-side relief,” Powell said on Monday. Policymakers began this year expecting inflation would peak this quarter and cool in the second half of the year.
“That story has already fallen apart,” Powell said. “To the extent it continues to fall apart, my colleagues and I may well reach the conclusion we’ll need to move more quickly and, if so, we’ll do so.”
Fed policymakers hope to rein in inflation without stomping on growth or sending unemployment back up, and their forecasts released last week suggest they see a path for that, with the median view for inflation falling to 2.3% by 2024 but unemployment still at 3.6%.
Powell said he expects inflation to fall to “near 2%” over the next three years, and that while a “soft landing” may not be straightforward, there is plenty of historical precedent.
“The economy is very strong and is well-positioned to handle tighter monetary policy,” he said
Professional golfers competing for million-dollar prizes may not appear to be disadvantaged in the labor market, but they actually provide a good example of America’s deteriorating Gig Economy landscape nationwide. As independent contractors, not playing for a team or working for an employer, pro golfers are in a class with millions of hard-working folks who seriously lack rudimentary legal and ethical protections in their jobs.
Unlike their peers in baseball, football and basketball, PGA Tour golfers have to cover their own expenses, from travel to coaching to health services. Caddies alone can cost $3,000 per tournament, in addition to a percentage of the golfer’s winnings. But worse, the PGA Tour restricts ways for players to earn extra money, including banning participation in competitor tournaments, appearance fees, and media and licensing income. At the same time, unlike pro sports leagues, the Tour does not even provide golfers with minimum compensation.
In order to play in the Asian Tour last month (February 3rd-6th), at the same time as a PGA Tour event in Pebble Beach, some of the biggest names in golf, including Dustin Johnson, Bryson DeChambeau, and Phil Mickelson, had to beg the Commissioner for a waiver. It was reluctantly granted, but only if the players guaranteed they would play in Pebble Beach in future years. What kind of independence is that?
Rory McIlroy, four-time champion in golf’s Majors and chairman of the PGA Tour Players Council, decided not to play in either event that weekend, but in an interview Jan. 26, he said of golfers who chose the Asian Tour event: “At the end of the day, it’s their job and livelihood…. I like being my own boss. I don’t want to be told what to do. I don’t want to be told where to show up or when to show up.”
The good news is that protecting workers’ rights in a Gig Economy is an issue gaining traction in Washington. The Biden Administration supports the idea that tens of millions of workers should have the flexibility of independent contractor status and still be treated fairly, with and proper protections and benefits.
In its landmark ruling against the NCAA’s restrictions on the money-making activities of college athletes, the U.S. Supreme Court last June reportedly seemed to find that the NCAA provided no evidence in its filings to suggest that fans would be less interested in college sports if athletes receive greater benefits. Likewise, the PGA has scant evidence to suggest that pro golfers participating in supplemental competitions, or making money outside of the event, would negatively impact the PGA Tour.
As of 2019, there were 36 million U.S. workers subject to non-competes, denying them the right to sell their services to any organization they wish. Non-competes violate the spirit of the Gig Economy, harm wage growth, and even limit the ability of workers to leave and start their own business. Fans of the PGA Tour ideally want the best for the players, and the sport overall. It would be in the fans interest to grow the sport by supporting the end of the PGA Tour’s non-compete practices.
Last year, Sen. Chris Murphy (D-Conn.) led the charge against anti-competitive practices with an astute legislative proposal, the Workforce Mobility Act, which would limit non-competes to extraordinary cases and require employers to inform their employees explicitly of the limitations when a non-compete is allowed.
California has been a leader by largely prohibiting non-competes, and President Biden’s wide-ranging Executive Order last year encouraged the Federal Trade Commission (FTC) to restrict or ban such agreements, including the type the PGA Tour currently imposes.
It can be perfectly appropriate for employers to protect their trade secrets and intellectual property, but the idea that employers should be able to broadly limit an employee’s future employment options and earning potential is simply unfair and sounds like an unjust contract of adhesion.
This is a conversation across all industries. Thousands of lawsuits are pending that would extend the rights of Gig Economy workers, and the Administration recognizes that independent contractors lack equity in reasonably seeking earnings because the scales are tipped heavily in the favor of large employers and governing bodies.
If PGA Tour golfers lack the ability to seek their livelihoods freely and fairly, then imagine how little power lower-income independent contractors have to secure decent treatment and adequate compensation. Deliberate steps need to be taken now to truly protect Americans who want and need flexibility in the workplace. Yes, including professional golfers.