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The Opportunity-Killing Minimum Wage

By David R. HendersonHoover Institution

“The Right Minimum Wage: $0.00.” That was the title of a 1987 editorial in a major American newspaper. The editorial stated: “There’s a virtual consensus among economists that the minimum wage is an idea whose time has passed. Raising the minimum wage would price working poor people out of the job market.” You might expect the Wall Street Journal editors to write something like that. But the editorial wasn’t in the Wall Street Journal. It did appear, though, in a prominent New York newspaper. Which one? The New York Times.

In a 1970 economics textbook, a famous Nobel Prize–winning economist wrote of 1970’s minimum wage rate of $1.60, “What good does it do a black youth to know that an employer must pay him $1.60 per hour if the fact that he must be paid that amount is what keeps him from getting the job?” Who wrote that? It must have been free-marketer Milton Friedman, right? Wrong. The author of that statement was liberal economist Paul Samuelson.

Among non-economists and politicians, the minimum wage is one of the most misunderstood issues in economic policy. President Biden and almost all Democrats and some Republicans in the US Congress advocate increasing the federal minimum wage from its current level of $7.25 an hour to $15 an hour over four years. They argue that many of the workers earning between $7.25 and $15 will get a raise in hourly wage. That’s true. But what they don’t tell you, and what many of them probably don’t know, is that many workers in that wage range will suffer a huge drop in wages—from whatever they’re earning down to zero. Other low-wage workers will stay employed but will work fewer hours a week. Many low-wage workers will find that their non-wage benefits will fall and that employers will work them harder. Why all those effects? Because an increase in the minimum wage doesn’t magically make workers more productive. A minimum wage of $15 an hour will exceed the productivity of many low-wage workers.

The reason some workers earn low wages is not that employers are greedy exploiters. If exploitation were enough to explain low wages, then why would employers ever pay anyone over $7.25 an hour? Wages are what they are because they reflect two things: (1) workers’ productivity and (2) competition among employers.

Employers don’t hire workers as a favor. Instead, employers hire workers to make money. They hire people only if the wage and other components of compensation they pay are less than or equal to the value of the worker’s productivity. If an employer pays $10 an hour to someone whose productivity is $15 an hour, that situation won’t last long. A competing employer will offer, say $12 an hour to lure the worker away from his current job. And then another employer will compete by offering $13 an hour. Competition among employers, not government wage-setting, is what protects workers from exploitation.

We all understand that fact when we see discussions on ESPN about why one football player makes $20 million a year and another makes “only” $10 million a year. Everyone recognizes the twin facts of player productivity and competition among NFL teams. The same principles, but with much lower wages, apply to competition among employers for relatively low-skilled employees.

Open up almost any economics textbook that discusses the minimum wage and you’ll likely see a demand and supply graph showing that the minimum wage prices some low-wage workers out of the market. For textbooks published in the past twenty years, though, you might also find a statement that although some workers will lose their jobs, there’s controversy among economists about how many jobs will be lost. According to the textbook writers, some economists think the number will be large and others think it will be small or even imperceptible. You could easily conclude that there’s no longer a consensus among economists that an increase in the minimum wage would cause much job loss.

But that conclusion would be wrong. UC-Irvine economist David Neumark and Peter Shirley, an economist with the West Virginia Legislature’s Joint Committee on Government and Finance, showed that in a January 2021 study published by the National Bureau of Economic Research. Neumark is one of the leading scholars on the economic effects of minimum wages.

Neumark and Shirley chose a clever methodology. They read every published study of the effects of the minimum wage on employment in the United States that was done between 1992 and the present. They identified for each study the core estimates of the effect of minimum wages on employment. When that was difficult to do, they contacted the studies’ authors to ask them what they regarded as their bottom-line estimates. Sixty-six studies met their criteria and these criteria had nothing to do with the size or direction of the estimates.

Here’s what they found. The vast majority of studies, 79.3 percent, found that a higher minimum wage led to less employment. A majority of the studies, 55.4 percent, found that the negative effect of a higher minimum wage on employment was significant at the 10 percent level. Translation: for those studies, the probability that there was a negative effect on jobs was 90 percent. Almost half the studies, 47.9 percent, found a negative effect on jobs at the 5 percent confidence level. For those studies, in other words, the probability that there was a negative effect on jobs was 95 percent.

Moreover, found Neumark and Shirley, the evidence “of negative employment effects is stronger for teens and young adults, and more so for the less-educated.” They concluded that the commonly heard refrain that minimum wages don’t destroy jobs “requires discarding or ignoring most of the evidence.”

Moreover, virtually all the studies of the effects of minimum wages in the United States have considered increases in the minimum wage of between 10 and 20 percent. The US government has never raised the minimum wage by anything close to the 107 percent envisioned in the increase from $7.25 to $15.

Why does that matter? Because the higher is the increase as a percent of the existing minimum wage, the more certain we economists are that it will hurt job opportunities for unskilled workers. We are sure of that because of the law of demand, which says that for any good or service, the higher the price, the less is demanded. That applies whether we’re talking about iPhones, skateboards, or labor. So raise that price a lot, and the amount demanded falls more than it would fall if you raised it a little. And what employers don’t demand, willing workers can’t supply.

The effect of the $15 minimum wage would vary a lot from state to state. In New York in 2019, the median hourly wage was $22.44 and the average hourly wage was $30.76. So a $15 minimum would affect a fairly small percent of New York’s labor force. In Alabama, by contrast, the median hourly wage in 2019 was only $16.73 and the average was only $21.60. So the $15 minimum in Alabama could hurt a much greater percent of the labor force.

The University of Chicago’s Booth School has an Initiative on Global Markets (IGM) that occasionally surveys US economists on policy issues. Possibly because of the surveyors’ understanding that the $15 minimum wage would hurt some states more than others, the IGM recently made the following statement and asked forty-three economists to agree or disagree: “A federal minimum wage of $15 per hour would lower employment for low-wage workers in many states.” Unfortunately, the question did not specify what is meant by “many.” Is it ten, twenty, thirty? Some economists surveyed pointed out that ambiguity. That ambiguity could explain why a number of the economists answered that they were uncertain. But of those who agreed or disagreed, nineteen agreed that it would cause job loss in many states and only six disagreed.

One economist who disagreed, Richard Thaler of the University of Chicago, gave as his explanation this sentence: “The literature suggests minimal effects on employment.” No, it doesn’t. As noted earlier, the federal government has never tried to raise the minimum wage by such a large amount and so there is no scholarly literature on such an increase. Would Thaler say that if putting a cat in the oven at a temperature of 72.5 degrees Fahrenheit doesn’t hurt the cat, then putting a cat in the oven at 150 degrees wouldn’t hurt the cat either?

While few economists have actually estimated the effects of such a large increase in the minimum wage, the US Congressional Budget Office (CBO) presented its economists’ estimate earlier this month. According to the CBO, the increase would reduce US employment by 0.9 percent. That might not sound like much, but 0.9 percent translates into 1.4 million workers put out of work.

But wouldn’t the increase in the minimum wage also increase wages for a lot of workers who keep their jobs? Yes, it would, and the CBO estimates that although the workers who lose their jobs would lose income, their loss over the years from 2021 to 2031 would be “only” 34 percent of the gain to the workers who gained wages.

But the gain in wages is not an unalloyed benefit to those who gain. The reason is that, as noted above, an increase in wage rates doesn’t automatically make workers more productive. So employers, looking for ways to avoid paying more to workers than their productivity is worth, would search out other ways of compensating. They might cut non-wage benefits, work the employees harder, or reduce training, to name three. Interestingly, on its website in 2006, when Congress was considering an increase in the federal minimum wage, the Economic Policy Institute (EPI), an organization funded partly by labor unions, admitted the last two of these three. It stated, “employers may be able to absorb some of the costs of a wage increase through higher productivity, lower recruiting and training costs, decreased absenteeism, and increased worker morale.” How would an employer make his workers more productive and reduce absenteeism? Probably by working the employees harder and firing those who miss work. How would he reduce training costs? By providing less training. In an article in the winter 2021 issue of the Journal of Economic Perspectives, UC-San Diego economist Jeffrey Clemens noted a negative correlation between minimum wages and employer-provided health insurance. In the workplace as in the rest of the world, there’s no free lunch.

The late economist Walter Williams has written about how, as a teenager, he learned many skills on the job that made him more productive and ultimately higher paid. I wrote recently that he could get those early jobs because the minimum wage was so low. Low-paid jobs are often crucial for black youths and other youths who need to build their work skills and work histories. These skills might be as simple as learning to show up on time. In 1967, when I was sixteen, I worked in a kitchen at a summer resort in Minaki, Ontario. The minimum wage at the time was $1 an hour and I was paid, if I recall correctly, $1.25 an hour. For the first three days of the job, I showed up about twenty minutes late. On the third day, the chef told me that if I was late the fourth day, I shouldn’t bother showing up because I would be fired. I was never late again. I learned the “skill” of punctuality. We adults take such things for granted. Kids don’t. Raise the minimum wage enough and a whole lot of young people won’t learn the basics, or won’t learn them until later in life. That would be tragic.


America’s Excessive Government Spending Must Stop

Before his death on February 6, George P. Shultz, a former US Secretary of the Treasury and Secretary of State, co-authored a final commentary warning of the dangers posed by the vast increase in US government spending in recent years, including during the COVID-19 crisis.

By GEORGE P. SHULTZ , JOHN F. COGAN , JOHN B. TAYLORProject Syndicate

shultz2_Liu JieXinhua via Getty Images_federal reserve

STANFORD – Many in Washington now seem to think that the US federal government can spend a limitless amount of money without any harmful economic consequences. They are wrong. Excessive federal spending is creating grave economic and national-security risks. America’s fiscal recklessness must stop.

The COVID-19 crisis has provided the latest impetus for government spending, even to the point of steering the American mindset toward socialism – a doctrine that has always harmed people’s well-being. But some say there is no need to worry about excessive spending. After all, they argue, record-low interest rates apparently show no sign of increasing. The economy was humming along just fine until the pandemic hit, and will no doubt rebound strongly when it ends. And is there even a whiff of inflation in the air?

This thinking is dangerously short-sighted. The fundamental laws of economics have not been repealed. As one of us (Cogan) demonstrated in his book The High Cost of Good Intentions, profligate government spending invariably has damaging consequences.

High and rising US national debt will eventually crowd out private investment, thereby slowing economic growth and job creation. The Federal Reserve’s continued accommodation of deficit spending will inevitably lead to rising inflation. Financial markets will become more prone to turmoil, increasing the chance of another big economic downturn.

Financial markets’ current relative calm and low consumer-price inflation are no cause for comfort. Previous periods of sharp increases in inflation, rapidly rising interest rates, and financial crises have followed periods of excessive debt like a sudden wind, without warning.

Shultz and Taylor’s book Choose Economic Freedom shows that economic indicators in the United States gave no hint in the late 1960s of the subsequent rapid rise in inflation and interest rates in the early 1970s. Likewise, financial markets during the years immediately preceding the 2007-09 Great Recession provided little indication of the calamity that would ensue.

So, what should today’s US policymakers do? Higher tax rates are not the answer. Even before the pandemic hit, every federal tax rate would have had to be increased by one-third in order to finance the current level of federal spending without adding to the national debt. Such an increase would have harmful effects – similar to those of mounting public debt – on economic growth and job creation.

Congress may be tempted to reduce defense spending to help close the deficit, as it often has done in the past. But these previous efforts demonstrably failed. Rather than reduce the budget deficit, Congress instead used the savings from lower defense outlays to finance additional domestic spending.

Unless policymakers abandon their misguided beliefs about budget deficits, cutting defense expenditure now would produce the same result. More importantly, it would be a grave strategic mistake, weakening US national security and emboldening the country’s foreign adversaries – particularly now that China is flexing its muscles in Asia and investing heavily in its military.

Throughout US history, the federal government’s ability to borrow during times of international crisis has proven to be an invaluable national-security asset. Two hundred years ago, the ability to borrow was instrumental in America maintaining its independence from England. During the Civil War, it was crucial to preserving the union. And it proved decisive in defeating totalitarian regimes in the two world wars of the twentieth century.

The US government’s careless spending is jeopardizing this asset. If the country continues along its current fiscal path, the federal government’s borrowing well will eventually dry up. When it does, America will be far less able to counter national-security threats. As hostile foreign governments and terrorist organizations recognize this, the world will become a far more dangerous place.

US policymakers’ mistaken belief that deficits and debt don’t matter is the sad culmination of a long downward slide in fiscal responsibility. From 1789 to the 1930s, the federal government adhered to a balanced-budget norm, incurring fiscal deficits during wartime and economic recessions, and running modest surpluses during good times to pay down this debt. This prudent management of the federal finances was instrumental in establishing America’s strong position in world financial markets.3

President Franklin D. Roosevelt’s New Deal broke this norm, and deficit spending has since become a way of life in Washington, with the federal government outspending its available revenues in 63 of the 75 years since the end of World War II. At first, elected officials were deeply concerned about the adverse consequences of their excess spending. But over time, this anxiety gradually lessened. Annual deficits grew so large that by the mid-1970s the US national debt was growing faster than national income.Sign up for our weekly newsletter, PS on Sunday

During the last decade, any remaining fiscal concerns in either the Democratic or Republican parties have seemingly vanished. Freed from a belief that rising deficits and debt are harmful, policymakers unleashed a torrent of new spending. By fiscal year 2019, the federal government was spending $1 trillion per year more in inflation-adjusted terms than it had a dozen years earlier. In fiscal year 2020, the federal government added nearly another $2 trillion of new spending in response to the pandemic, raising the national debt to 100% of national income. This year, another trillion dollars of new spending – if not more – appears to be on the way.

The momentum toward more spending and exploding debt may currently appear unstoppable. But sooner or later, people will look at the facts, see the destructive path fiscal policy is now on, and recognize that they and the US economy will be better off with a different approach. At that point, America’s democratic system will say the expenditure growth must stop.


Americans Expect Masking to Continue Even as COVID Numbers Crash

By Peter RoffAmerican Action News

Covid-19, coronavirus

The number of new COVID infections is declining rapidly, suggesting to some that the novel coronavirus pandemic may be on the verge of ending. Nevertheless, even with the advent vaccines that apparently prevent its transmission from person to person, most Americans believe the protective measures adopted over the last year like mandatory masking will continue for some time. 

A recent Rasmussen Reports poll found that nearly three out of every four Americans over the age of 18 expect the requirement that masks be worn outdoors will remain in place for at least another six months. Almost a third – 36 percent – said it would be more than 18 months before it would be acceptable to be barefaced in public once again.

“It’s an indictment of the media that so many people expect mask mandates to persist for months,” said the Committee for Prosperity’s Phil Kerpen who has for months been crunching the numbers related to the pandemic and its spread. 

Kerpen and his group produce a free daily hotline that provides short and timely insider updates on what is happening with the economy and the virus. It was one of the first to notice that New York’s Democratic Gov. Andrew Cuomo seemed to be fudging the numbers connected to COVID-19 in nursing homes, a story most news outlets missed. 

With Vice President Kamala Harris and others inside the Biden Administration claiming, falsely, that they’ve had to begin the fight against the coronavirus “from scratch,” the recent acknowledgment by Dr. Rochelle Walensky, the director of the U.S. Centers for Disease Control and Prevention that the number of new cases and hospitalizations are indeed coming down. 

“We continue to see a five-week decline in COVID cases, with cases decreasing 69 percent in the seven-day average since hitting a peak on January 11th.  The current seven-day average of approximately 77,000 cases is the lowest recorded since the end of October,” Dr. Walensky said during a White House briefing Friday. 

“Like new COVID-19 cases, the number of new hospital admissions continues to drop.  The seven-day average of new admissions on February 16th, approximately 7,200, represents a 56 percent decline since the January 9th peak,” the doctor continued. 

The problem remains what to do until what many medicos refer to as “herd immunity” is reached.  Some, like Biden COVID advisor Dr. Anthony Fauci, have suggested it may be prudent to double up on masks while the CDC’s latest recommendation is “placing a sleeve made of sheer nylon hosiery material around the neck and pulling it up over either a cloth or medical procedure mask.” Others, like Kerpen, suggest the best possible thing would be for states to open up and for people to be allowed to go about their business once again, and for children to be permitted to return to school on a five-day-per-week schedule. 

“More governors need to exercise the leadership of Florida’s Ron DeSantis, the Dakota’s Kristi Noem and Doug Burgum, and Kim Reynolds of Iowa and proclaim a return to normal now – now, forever, months in the future,” Kerpen said. 

His suggested approach appears to be the wise one. Recent comparisons of the spread of COVID-19 in Florida and California show little difference in how things have turned out. This would seem to deflate the dire predictions Gov. DeSantis’s decision to re-open the economy in the nation’s third most populous state would push the number of infections and death off the charts. 

None of that seems to have happened. What is different is that Florida’s been open for business for some time while California’s economy, which for months has been in a lockdown state, is floundering badly. The performance of the two economies, which are about as different at this point as night and day, are worth further study. There may be valuable clues regarding the best ways to fight a pandemic hidden in the data, waiting to be unmasked.


New Budget Reconciliation Resolution Portends Dangerous Debt Trends

The resolution predicts the national debt will reach $41 trillion in 2030.

By Marc Joffereason foundation

Congressional Democrats are currently using the budget reconciliation process to advance President Joe Biden’s $1.9 trillion COVID-19 relief and stimulus measure, the American Rescue Plan. The budget reconciliation process can be used to move federal spending, debt, and budget bills more quickly through the legislative process.

Friday, Senate Democrats used this process to approve a concurrent resolution that calls for a $3.8 trillion federal deficit this fiscal year followed by a $1.5 trillion deficit in 2022. Committees in the House and Senate still need to draft the actual coronavirus stimulus legislation but the resolution, which also includes 10 years of projected federal budget data, forecasts the national debt reaching a total of $41 trillion in the 2030 fiscal year. The national debt is currently over $27 trillion.

Because the national debt includes intragovernmental borrowing—money that the federal government owes to itself—it is a less useful measure of overall federal indebtedness than debt held by the public. Debt held by the public consists of all Treasury securities held by individuals and organizations that are not part of the federal government. Much of the debt held by the public has been purchased by the Federal Reserve, which is technically not part of the federal government. The budget anticipates this debt will rise to $36.5 trillion in 2030.

It is possible to compute projected debt-to-gross domestic product (GDP) ratios by dividing the publicly held debt projections from the Senate resolution by the Congressional Budget Office’s new GDP forecasts, which were released on Feb. 1.

The results of such a comparison are worrying. As shown in Figure 1, by the end of the current fiscal year, publicly-held debt as a percentage of GDP is forecast to eclipse its previous peak of 106 percent reached just after World War II. The ratio continues to rise gradually through 2030 when it is expected to reach 115 percent.

Figure 1: Federal Debt Held by the Public As a Percent of GDP

As the chart shows, there was a large uptick in recent years, with President Donald Trump adding nearly $8 trillion to it during his four-year presidency.  And these projections for future budgets through the 2030 fiscal year could be underestimating the debt, as the report assumes the federal government will make an unlikely return to budgets with sub-trillion-dollar deficits in 2024, 2026, and 2027.

The debt forecast also does not include the impact of potential new spending, like the infrastructure package President Biden has called for, which Congress may attempt to pass through a second budget reconciliation.

While debt-to-GDP ratios in excess of 100 percent may be manageable in an environment with low interest rates, if interest rates spike upward then debt service costs could quickly crowd out other federal spending and economic activity. In the most extreme cases, spiraling debt could eventually help cause a sovereign debt crisis like those seen in Argentina and Greece in recent years.


New Mexico, Other Western States, Native American Tribes All Up In Arms Over Biden Energy Decisions

By Nick AramaRed State

AP Photo/Evan Vucci

We touched on the concerns of folks in New Mexico over Joe Biden’s 60-day moratorium on new oil and natural gas leases and drilling permits. 

But it’s a huge problem now and would devastate the state if that were made permanent, according to leaders in New Mexico. Not to mention if Biden then forbids fracking on public lands. 

Half of New Mexico’s production is on federal lands. It provides over 100,000 related jobs and it’s what provides money for education and other government programs. It will crush the state’s economy which is already struggling, according to Carlsbad Mayor Dale Janway. 

From AP: 

“During his inauguration, President Biden spoke about bringing our nation together. Eliminating drilling on public lands will cost thousands of New Mexicans their jobs and destroy what’s left of our state’s economy,” Carlsbad Mayor Dale Janway told The Associated Press on Friday. “How does that bring us together? Environmental efforts should be fair and well-researched, not knee-jerk mandates that just hurt an already impoverished state.”

Plus the order is halting all regulatory activity, even that which does what Democrats claim they want, requests for rights of way for new pipelines to reduce venting and flaring which Democrats claim exacerbates climate change. 

One could say all this was out there to know, but New Mexico was called for Biden. So what were the people who actually voted for Biden there thinking? They were seduced by media about President Donald Trump’s ‘mean tweets.’ Meanwhile now they’re going to get hit hard. 

It’s not just New Mexico that’s going to suffer, it’s other Western states as well, including the states who didn’t vote for Biden. 

Utah said that such a widespread suspension is unprecedented and incredibly harmful and they asked Biden to reconsider his “arbitrary decision.” 

But it’s not just states that Biden is attacking with this, as a Native American tribe points out. Luke Duncan, the chairman of the Ute Indian Tribe Business Committee, minced not words when he called Biden’s decision a “direct attack on our economy, sovereignty, and our right to self-determination.”

Here’s what their letter said.

From Daily Wire: 

The Ute Indian Tribe of the Uintah and Ouray Reservation respectfully requests that you immediately amend Order No. 3395 to provide an exception for energy permits and approvals on Indian lands. The Ute Indian Tribe and other energy producing tribes rely on energy development to fund our governments and provide services to our members.

Your order is a direct attack on our economy, sovereignty, and our right to self-determination. Indian lands are not federal public lands. Any action on our lands and interests can only be taken after effective tribal consultation.

Order No. 3395 violates the United States treaty and trust responsibilities to the Ute Indian Tribe and violates important principles of tribal sovereignty and self-determination. Your order was also issued in violation (of) our government-to-government relationship. Executive Order No. 13175 on Consultation and Coordination with Indian Tribal Governments, and Interior’s own Policy on Consultation with Tribal Governments.

The order must be withdrawn or amended to comply with Federal law and policies. Thank you for your prompt attention to this matter. We look forward from hearing from you.

While we might say if any of these folks voted for Biden, they should have known better, unfortunately this is not going to just hurt all these people, but it’s going to hurt all of us, translating in more expensive energy prices and losing that energy independence that President Donald Trump worked so hard to get for us.

It’s only Day 4 into this calamitous mess. How’s it going so far?


Contradicting Her Own Claim, Yellen Says Minimum Wage Hike Would Result in ‘Minimal’ Job Loss

Yellen backed 2014 report forecasting 500,000 lost jobs from minimum wage hike

By Collin AndersonThe Washington Free Beacon

Treasury secretary nominee Janet Yellen previously backed a 2014 report that found a $10.10 federal minimum wage could kill half a million jobs. On Tuesday, she claimed that a $15 minimum wage would result in “minimal” job loss.

Yellen testified before the Senate Finance Committee Tuesday morning, nearly two months after President-elect Joe Biden announced her nomination to head the Treasury Department. When Sen. Tim Scott (R., S.C.) criticized Biden’s plan to raise the minimum wage to $15, noting that it could “hurt our economy as much as it would improve our economy,” Yellen defended the proposal.

“I think that the likely impact on jobs is minimal,” Yellen said. “That’s my reading of the research.”

But Yellen endorsed a 2014 report from the nonpartisan Congressional Budget Office predicting up to 500,000 lost jobs as a result of a $10.10 minimum wage. While the Obama administration lambasted the report, Yellen defended the CBO, calling the agency “good at this kind of evaluation” and adding that she “wouldn’t argue with their assessment.” The CBO later found that a $15 minimum wage could kill as many as 3.7 million jobs, with total real family income dropping by $9 billion.

Biden has made a $15 minimum wage a key pillar of his economic package, but the policy is likely to face hurdles in an evenly split Senate. At least 10 Senate Republicans must back Biden’s proposal to avoid a filibuster, and many GOP lawmakers have already expressed their opposition. Sen. Pat Toomey (R., Pa.), for example, said that the proposal would cause “many low-income Americans” to “lose their current jobs and find fewer job opportunities in the future.”

Employment Policies Institute managing director Michael Saltsman echoed Toomey’s claim, telling the Washington Free Beacon that a $15 minimum wage would harm small businesses struggling to stay afloat during the coronavirus pandemic.

“It’s frankly irresponsible for the Biden administration to propose this at any time, but especially at a time when restaurants are dealing with huge 2020 losses, continued mandatory closures, and millions of jobs that haven’t come back since the start of the pandemic,” Saltsman said.

The Biden transition team did not return a request for comment.


Watchdog Calls for Transparency from University of Pennsylvania’s Biden Center

Calls come as center's director, Biden's secretary of state nominee, undergoes Senate confirmation process

By Alana GoodmanThe Washington Free Beacon

Biden secretary of state nominee Antony Blinken / Getty Images

A good-government watchdog is calling on secretary of state nominee Antony Blinken to disclose any foreign-funding sources for the University of Pennsylvania’s Penn Biden Center, where Blinken served as director, as part of his Senate confirmation vetting process.

The National Legal and Policy Center (NPLC) is arguing thatany foreign money that made its way into the Penn Biden Center could pose a conflict of interest for Blinken, who served as the center’s director from 2017 to 2019 and received a more than $79,000 salary, according to his financial-disclosure records. The watchdog group said the university also saw a significant spike in contributions from China after the Penn Biden Center opened in 2017, raising questions about whether the funding had any connection to the policy center.

While President-elect Joe Biden has vowed to tighten ethics standards for his incoming administration, the Penn Biden Center’s lack of financial candor raises questions about the Biden cabinet’s commitment to transparency as Blinken testifies before the Senate Foreign Relations Committee on Tuesday afternoon.

“The Penn Biden Center is the poster child for revolving-door conflicts of interest,” said Tom Anderson, director of the NPLC’s Government Integrity Project. “It’s time they disclose their donors and allow the American people the opportunity to evaluate whether any lines have been crossed.”

The Penn Biden Center was founded by Joe Biden at the University of Pennsylvania in 2017. Biden’s other policy-research institute at the University of Delaware has faced similar criticism over a lack of transparency and has no plans to disclose its donors after the president-elect takes office. Both organizations have served as cabinets-in-waiting, employing former Biden advisers who are now expected to join his administration.

Stephen MacCarthy, a spokesman for the University of Pennsylvania, told the Washington Free Beacon that the Penn Biden Center “is funded entirely with University funds” and doesn’t engage in fundraising.

“The University has never solicited any gifts for the Center. Since its inception in 2017 there have been three unsolicited gifts (from two donors) which combined total $1,100. Both donors are Americans,” said MacCarthy.

MacCarthy declined to discuss additional details of the center’s funding, or the sudden spike in donations from China, on the record.

Foreign contributions to the University of Pennsylvania tripled since the Penn Biden Center’s soft opening in March 2017, rising from $31 million in 2016 to over $100 million in 2019. The largest foreign contributor was China, which significantly increased its gifts to the university after the Penn Biden Center opened.

The University of Pennsylvania took in around $61 million in gifts and contracts from China between 2017 and 2019, according to records from the Department of Education. This was a substantial uptick from the prior four years, when the university received $19 million from China.

Many of the Chinese contributions were listed as coming from “anonymous” sources, according to the university’s disclosure records. Between March 2017 and the end of 2019, the university received a total of $22 million in anonymous gifts from China—a spike from less than $5 million during the preceding four years.

Blinken’s work outside of the Penn Biden Center also involved China and university funding.

Blinken cofounded the consulting firm WestExec, which helped U.S. universities raise money from China without running afoul of Pentagon grant requirements, the Free Beacon reported last month. WestExec scrubbed the details of this work from its website over the summer.

Anderson said his group is preparing to file a supplement to a Department of Justice complaint filed against the University of Pennsylvania last year.

The NLPC’s complaint asked the DOJ to look into whether the University of Pennsylvania or the Penn Biden Center violated the Foreign Agent Registration Act by accepting foreign funding in exchange for promoting the interests of foreign governments. Anderson said the new complaint will include Blinken’s work assisting universities that receive funding from China.

Sen. Robert Menendez (N.J.), the senior Democrat on the Senate Foreign Relations Committee, told reporters that the committee will likely vote on Blinken’s confirmation on Monday.


San Francisco’s “Progressive” Drug Policies Kill Hundreds Annually

By Lee OhanianHoover Instituion

Last year, 621 people died of drug overdoses in San Francisco. To put this in perspective, 173 people died from COVID-19, which is identified as the primary public health crisis in the Bay Area. 

For years, San Francisco has tacitly encouraged drug abuse with remarkably lenient policies, and those policies are now inadvertently killing hundreds of people annually. San Francisco uses a policy approach called “harm reduction,” which stresses “culturally competent, non-judgmental treatment that demonstrates respect and dignity for the individual.”

But this approach, as it is practiced within San Francisco, is inhumane and cruel. It is destroying the dignity of the lives that some could have with more sensible policies. In addition to overdose deaths skyrocketing, drug abuse has increased in San Francisco, and it is becoming more difficult for addicts to affect positive change.

If you spend much time in San Francisco, you know this, as several areas of the city have become de facto open-air drug bazaars, with drug abuse and drug sales taking place for all to see. Harm-reduction policies are expanding drug use among youths through the dispensation to homeless adolescents of “safe snorting kits” and “safe smoking kits” for crack use. As if any crack use could be considered “safe.”

There are an estimated 25,000 drug users in San Francisco, which if anything is too low of a count since that estimate is nearly two years old. This exceeds San Francisco’s high school population by more than 50 percent and works out to about 522 drug users per city block.  Sadly, thousands of human tragedies unfold every day, eviscerating those who use drugs, and forever affecting the lives of those who see it daily, including many children.

Drug abuse is challenging to treat, but a recent handbook of best practices for substance abuse treatment by the Department of Health and Human Services shows that targeted treatment can be very effective, particularly when intervention occurs early.  

But a drawback to San Francisco’s acceptance and facilitation of drug use is that it prevents early intervention. Unless San Francisco completely changes how it views drug abuse, these numbers will become even worse. The country’s most progressive city needs to understand that their policies are creating implicit death sentences for many who could be helped with a different policy approach.

Understanding this begins with the simple economics about drug use, which highlights why harm reduction has failed. On the demand side, drug users come to San Francisco from elsewhere because they know the city tolerates and facilitates drug use, which includes providing free hypodermic needles. While giving away nearly 5 million clean needles annually (which boils down to nearly 6 needles for every San Franciscan) admirably reduces communicable diseases, it has created a public health hazard, because about two million used needles are disposed of on city sidewalks. Over $30 million has been spent on dealing with drug abuse within the public transit system, but one could hardly tell this by viewing transit stations that anything has been done to deal with this issue. 

On the supply side, selling drugs in San Francisco has become extremely profitable, given a demand side of 25,000 consumers and the city’s tolerant policies. In contrast to most other cities, the drug trade in San Francisco operates within what is almost a normal marketplace setting, where buyers and sellers can find each other easily, and with a relatively small chance of being arrested. Both of these factors promote relatively low prices, which stimulate demand, and high profits, which stimulate supply.

By normalizing drug abuse, San Francisco has created a perfect storm of a vibrant, well-functioning market of buyers and sellers who trade drugs much like a basket of fruit is traded at a farmer’s market. Unfortunately, the basket that is being traded in San Francisco’s drug bazaar is increasingly becoming the opioid Fentanyl, which can be 100 times more powerful than morphine.

Fentanyl is sufficiently strong that much less than one milligram is used as general anesthesia during major surgery. Just two milligrams—the equivalent of about 25 grains of sand—can be lethal. Emergency personnel responding to a Fentanyl overdose must take precautions so that they do not accidentally inhale Fentanyl. And yet Fentanyl is now being widely traded every day in San Francisco, driving up overdose deaths to about two daily.

What to do? Drug addiction can be treated medically and compassionately without viewing it as part of normal, everyday life, which is what is being practiced today in San Francisco. The city currently allocates over $5 billion to community health and human welfare.

Surely those budgets can be repurposed to treat drug abuse using best practices as outlined by the Department of Health and Human Services in conjunction with greater efforts to identify family members who can assist with treatment and support. At the same time, the city must reduce the amount of Fentanyl and other lethal drugs that are being sold routinely in open-air markets.

Many of San Francisco’s drug users have lost control over their lives. The last thing that drug addicts need is another drug pusher, but this is what San Francisco’s policies have created. Lives can be saved, but not unless policies are changed.


United States Cut China Aid In Half In 2020

By Alex NesterThe Washington Free Beacon

Getty Images

President Donald Trump cut aid to China by 52 percent over the last year, the Spectator reported Friday.

The United States slashed $32 million in aid to China in fiscal year 2020, from $62 million in 2019 to $30 million, according to an Office of Management and Budget report.

The first government-wide China spending report comes as Trump enters the final days of his presidency. His administration implemented aggressive economic policies against China in an effort to thwart the Chinese Communist Party’s growing influence in the United States and the global market.

Trump campaigned in 2016 on combating Chinese economic policy, which he said “took advantage” of American citizens through trade imbalances and the manipulation of currency values.

The president’s efforts to curb Chinese influence in global politics and markets heated up last year after the onset of the coronavirus pandemic: In July, Trump moved to pull out of the World Health Organization for its failure to hold China accountable for its role in the deadly COVID-19 outbreak. He levied additional sanctions on companies that supported the Chinese military and fought Chinese influence at the United Nations. Additionally, the United States imposed $60 billion in tariffs on Chinese imports during fiscal year 2020.

Trump also cracked down on Confucius Institutes, which are tied to the Chinese Communist Party, for propagating Chinese disinformation at American universities.

Last week, Trump imposed sanctions on two Chinese apps over concerns that Chinese Communist Party officials could use them to collect data on Americans, including federal employees.

President-elect Joe Biden (D.) has criticized the president’s trade war with China. But he could face backlash from Congress if he softens the United States’ stance on Beijing, as politicians on both sides of the aisle support implementing economic measures to punish China for its human-rights abuses and combat the communist regime’s growing influence abroad.


Union Corruption Hurts Everyone. But It Harms the Most Vulnerable the Most.

By George LandrithTownhall

Union Corruption Hurts Everyone. But It Harms the Most Vulnerable the Most.
Source: AP Photo/Paul Sancya

This past year was one of the most tumultuous in memory. Widespread economic collapse, social and societal upheaval, violent riots, an acrimonious election cycle, and a worldwide pandemic are just a few of the major sources of upheaval.

These sorts of massive disruptions to the norm create opportunities for change and improvement. Some use those opportunities productively to work for solutions that fix real problems and improve lives. But sadly, many use these disruptions to cynically advance their own agenda while feigning concern for the plight of others. Unfortunately, organized labor falls into this latter group. 

In a time when so many Americans desperately want a job and a way to fund the hopes, dreams and aspirations of their family, too many union leaders are slamming the door shut on the very people they claim to serve. To make matters worse, too many union leaders are also padding their own pockets and working to advance their own power and influence at the expense of their members.

Here are a few recent examples. Dennis Williams, the former president of United Auto Workers (UAW), pled guilty to embezzling hundreds of thousands of dollars from the union. And this scandal was preceded by his successor at the UAW, Gary Jones, admitting that he helped steal more than a million dollars from union workers. That’s a bad trend line! 

James W. Cahill, a powerful and politically well-connected union leader, was indicted on racketeering and fraud charges. Federal prosecutors allege that he and others accepted bribes to aid companies that had hired nonunion labor. So the charges include accepting under the table money to work against your own members. But we are supposed to believe that the union is working to help union workers.

Chuck Stiles, the Director of the Teamsters Solid Waste and Recycling Division, has allegedly been taking large annual payouts of $65,000 for a “phantom job” on top of his $150,000 annual salary. These allegationsdon’t come from some union-hating critic, they come from an active member of the Teamsters Union. On top of that, there are allegations that Stiles’s son has also received a difficult-to-explain $10,000 payout from union funds. 

This sort of double self-dealing, if true, is very troubling and it raises the question — are these unions really representing their members or are they simply pretending to, and then enriching themselves while carrying on the charade.  

The cynicism doesn’t end with corrupt payments or self-dealing. For example, Stiles has decided to try to leverage the Black Lives Matter (BLM) movement to increase support for the struggling labor movement. Yet the labor movement has not historically been the friend of racial minorities. And Stiles has no history of supporting minority candidates or causes. Interestingly, a public photo of Stiles in blackface has also recently emerged. So the idea that Stiles has some deep commitment to helping blacks or other minorities is a little hard to swallow. It is a fair question to ask — how serious and how sincere is this newfound interest in minorities and their economic welfare? 

More than five million manufacturing jobs disappeared from the American economy between 1999 and 2011. The exodus of good paying jobs continued through 2016. China was the single biggest factor. This massive jobs exodus harmed working-class blacks, yet BLM has been silent on China and refused to support policies that would reverse our economic losses to the Communist Country. Instead, they’ve focused on odd conspiracy theories about obesity and diabetes in the black community — as if that has been more consequential to black employment and poverty than jobs being exported abroad.

Given all that has transpired, when BLM and unions claim to be teaming up to protect and promote the interests of working-class blacks, a huge dose of realism is needed. Who actually benefits when unions “team up” with BLM but they both refuse to actually do what is needed to promote good paying manufacturing and other skilled labor jobs? It won’t be minority workers. 

Someone who claims they support workers, must point to how they’ve helped make real improvements in the lives of workers — more jobs, higher wages, etc. This is not the track record of unions or BLM in the past two decades. They have done a good job of enriching themselves and raising money and obtaining political power for themselves. But where is the evidence that they have done anything for the average American worker — black or white? And why haven’t they supported policies that have actually worked and benefited American workers — and particularly minority workers?  

These questions answer themselves. Both unions and BLM do more posturing than actual good, and they are teaming up hoping to hide this inescapable truth so that they can continue to prosper while feigning concern for those they claim to represent.


‘The Elements of the China Challenge’: A Reply to Critics

By Peter BerkowitzRealClear Politics

In mid-November, the State Department’s Policy Planning Staff — I serve as the director — published “The Elements of the China Challenge.” The paper argues that the core of the challenge consists of the concerted efforts by the Chinese Communist Party to reconfigure world order to serve the CCP’s authoritarian interests and aims. It explains the errors that nourished the hope on both the right and the left that economic liberalization in China, coupled with Western engagement and incorporation of Beijing into international organizations, would bring about China’s political liberalization. It describes the characteristic practices of the communist dictatorship, traces China’s brazen programs of economic co-optation and coercion in every region of the world, examines the Marxist-Leninist dogma and hyper-nationalist beliefs that provide the intellectual sources of the CCP’s quest for global supremacy, and surveys China’s vulnerabilities — both those endemic to authoritarian regimes and those specific to the People’s Republic of China. In conclusion, the paper lays out a framework for securing freedom.

Reaction to the paper has been instructive. The Chinese Communist Party responded with ritual denunciation. In contrast, public intellectuals, scholars, and public officials from around the world have expressed appreciation for the Policy Planning Staff’s efforts to gather in one place the evidence of the CCP’s  predatory policies, to distill the party’s governing ambitions, and to sketch a way forward for the United States and all nations dedicated to preserving the free, open, and rules-based international order. The best of the American responses to the paper have coupled praise, in some cases grudging, with strictures, sometimes angry, about the paper’s limitations. The domestic criticisms are especially revealing, both for the serious issues they raise and for the misconceptions that they promulgate.Recommended  

“The Elements of the China Challenge” has its origins in Secretary of State Mike Pompeo’s reorientation of the State Department — consistent with the Trump administration’s 2017 National Security Strategy and a number of other administration documents — around the new round of great-power competition launched by the CCP. The administration’s attention to the China challenge does not entail — as many mistakenly suppose — that the United States must turn its back to the rest of the world. To the contrary, the Policy Planning Staff paper stresses that to counter China’s quest for global supremacy, the United States must renew its alliance system and must reform international organizations so that they serve America’s vital interest in preserving an international order that is composed of free and sovereign nation-states and that is grounded in respect for human rights and the rule of law.

Trump administration policy reflects this reorientation. For starters, the administration has led in exposing the CCP’s initial cover up of the COVID-19 pandemic and its subsequent disinformation campaign. The administration intensified efforts to combat China’s massive intellectual property theft. It placed the United States at the forefront of efforts to hold China accountable for gross human rights violations, especially the brutal imprisonment of more than a million Uyghurs in re-education camps in Xinjiang — the United States is the only nation to impose sanctions on CCP officials for these unconscionable abuses. It terminated Hong Kong’s special trading status in the spring, when the CCP crushed freedom in the city. It increased weapons sales to Taiwan, embarked on an inaugural U.S.-Taiwan economic dialogue, and signed a Memorandum of Understanding with Taiwan on health, science, and technology. It invigorated the Quad (Australia, India, Japan, and the United States) and, with its strategy for a Free and Open Indo-Pacific, affirmed the region’s critical importance. It revamped the Development Finance Corporation and reformed the Export-Import Bank to improve the ability of United States and its allies and partners to invest in other nations’ physical and digital infrastructure. And, the Trump administration has convinced more than 50 countries and counting to join the Clean Network, which promises secure telecommunications — unlike the technology offered by Chinese “national champions” Huawei and ZTE, which are CCP extensions whose hardware and software threaten individual privacy and national security.

By stepping back, taking a broader view, and documenting the pattern and purpose of China’s actions, “The Elements of the China Challenge” explains why these policies are urgently needed, and why much more must be done. And by identifying 10 tasks that the United States must undertake — from restoring civic concord at home to, where possible, cooperating with Beijing based on norms of fairness and reciprocity, and to championing freedom abroad — the Policy Planning Staff paper lays the foundations for refashioning U.S. foreign policy to meet the China challenge.

A common theme of the critics, reputable as well as disreputable, is that the paper falls short of the work of George Kennan, a career foreign service officer who in 1947 founded the Policy Planning Staff and became its first director. At the dawn of the Cold War, Kennan’s 1946 “Long Telegram” from Moscow and his 1947 Foreign Affairs article “The Sources of Soviet Conduct” illuminated the threat to freedom posed by the Soviet Union. The most influential documents produced by a State Department official, they served as sources of inspiration for the Policy Planning Staff, but we did not seek to replicate them since, as Kennan well understood, different challenges and moments demand different undertakings and emphases. Above all, today’s Policy Planning Staff learned from Kennan’s insistence on the combination of “ideology and circumstances” that determines great-power conduct, and took to heart his counsel that “to avoid destruction the United States need only measure up to its own best traditions and prove itself worthy of preservation as a great nation.”

As for the disreputable critics, they give no evidence of having read the paper. The Global Times, a daily tabloid and wholly owned subsidiary of the Chinese Communist Party, was first out of the gate. The CCP newspaper dismissed “The Elements of the China Challenge” the day after it appeared as an “insult to Kennan” amounting to little more than “a collection of malicious remarks from Secretary of State Mike Pompeo and other anti-China U.S. politicians and senators.” At his regular press conference the following day, Foreign Ministry spokesperson Zhao Lijian denounced the Policy Planning Staff paper as “just another collection of lies piled up by the those ‘living fossils of the Cold War’ from the U.S. State Department.”

It would have been more accurate to refer to “the living victors of the Cold War,” but more telling still is the CCP’s failure to notice that the Policy Planning Staff distinguishes the China challenge from the Soviet challenge. While underscoring that, like the former Soviet Union after World War II, China today presents the foremost threat to freedom, the paper also stresses the distinct forms of power at work. “The Soviet Union,” the paper argues, “primarily enlarged its dominions and sought to impose its will through military coercion.” In contrast, and notwithstanding its development of a world-class military, China “primarily pursues the reconfiguration of world affairs through a kind and quantity of economic power of which the Soviets could only have dreamed.”

Of the reputable critics, Odd Arne Westad, a Yale history professor and China scholar, is among the most distinguished. In a Foreign Affairs essay titled “The U.S. Can’t Check China Alone,” he asserts that the “report correctly sees China as the greatest challenge to the United States since the end of the Cold War, showing how Beijing has grown more authoritarian at home and more aggressive abroad.” The paper also, according to Westad, “rightly recognizes how China has tried to gain an advantage by applying economic pressure and conducting espionage — as well as by exploiting the naiveté that causes many foreigners to miss the oppressive nature of the Chinese Communist Party.”

Nevertheless, Westad charges, “the report is limited by ideological and political constraints; given that it is a Trump administration document, it must echo President Donald Trump’s distaste for international organizations, even though they are key to dealing with China.” The professor also takes the paper to task on the grounds that it “almost completely ignores the most basic fact about the current situation, which is that the United States can compete effectively with China only through fundamental reform at home.”

A meticulous scholar of Chinese history, Westad imputes to the Policy Planning Staff paper opinions not found there and overlooks arguments it prominently features. It is not true that our paper, as Westad writes, “suggests that it is now in the United States’ interests to destroy and then selectively rebuild existing international institutions.” Rather, the Policy Planning Staff calls for a reassessment of international organizations to determine where they serve freedom and where they no longer advance the objective for which they were created, arguing for reform where possible and the establishment of new institutions where necessary.

Contrary to Westad, moreover, the Policy Planning Staff highlights the domestic foundations of effective foreign policy. Five of the 10 tasks we identify as crucial to securing freedom involve reform at home — from the renewal of American constitutional government and the promotion of prosperity and civic concord to restoring the U.S. educational system at all levels.

Hal Brands, another reputable critic and leading scholar, finds “valuable insights” in “The Elements of the China Challenge.” Despite the juvenile taunt in the title of his Bloomberg op-ed, “There’s No George Kennan in the Trump Administration,” Brands — a professor of international relations at Johns Hopkins University’s School of Advanced International Studies as well as a Bloomberg columnist — writes that the paper “explains, more completely than any prior U.S. policy document, the sources of Chinese conduct — namely the mix of Marxist-Leninist ideology, extreme nationalism and quasi-imperialism that drives the Chinese Communist Party.” In addition, according to Brands, the paper “shows that China’s objectives are not limited to its immediate periphery, but include fundamental changes in the international system”; it “details the troubling aspects of Chinese behavior, from economic predation to Beijing’s menacing military buildup, as well as the deep vulnerabilities — endemic corruption, inescapable demographic problems, economic instability — that threaten its continued ascent”; and it “outlines reasonable steps America should take to strengthen its position.”


McConnell’s Right – The $2000 Checks Are a Bad Idea

By Peter RoffNewsweek

How much is enough? It’s a question America is going to have to answer, and soon, lest the need for additional COVID relief packages overwhelm the nation’s ability to pay for them. The national debt, which was close to a single year’s gross domestic product when Donald J. Trump came into office four years ago, has more than doubled, thanks in no small part to efforts to alleviate the impact of the economic lockdown used to prevent the disease from spreading.

As the numbers show, it didn’t work. The states with some of the most severe restrictions on commercial activity, like California and New York, continue to lead the rest of the states in deaths per capita and new infections. It’s almost as if the wearing of masks, the requirements that people stay six feet apart from one another and not venture out into public and the closures of small businesses like restaurants and churches have done almost nothing to keep COVID-19 from spreading.

There are more than a few commentators who’ve been bold enough to suggest that outright. It’s going to take a lot more study of the data to determine if they’re right but what we now know is sufficient to suggest there’s more truth to these presumptions than many of the so-called experts driving the national dialogue are willing to entertain may be the case.

All that is for later. What matters now is whether the latest COVID-19 package is enough or, as President Donald J. Trump, House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer believe, if the American people need another round of so-called stimulus checks from Washington to make it though.

They don’t—and Senate Majority Leader Mitch McConnell was right when he stopped the bill to do just that from moving forward. If he erred, and it is not clear he did, it was in offering his own version of the bill that, along with the $2000 checks would eliminate a provision of federal telecommunications law that conservatives say allows major platforms like Twitter and Facebook to censor posts with impunity and establish a federal commission to make recommendations to combat voter fraud.

The Democrats could never vote for such a measure—big tech has invested too much in the party’s electoral success for them to sign on—so offering it as an alternative is a crafty way for McConnell to kill the so-called stimulus while making it look like the fault of Schumer and company, not the GOP. Some of his partisan colleagues up for reelection in 2022 may need the political cover his effort provides but, in all honesty, he should have stood his ground and just said “no.”

Mitch McConnell Trump stimulus checks Republicans twitter
Right-wing Republicans on Twitter are praising Senate Majority Leader Mitch McConnell of Kentucky over President Donald Trump after a McConnell introduced a Senate proposal which could deny Trump and Democrats an increase in COVID-19 stimulus checks intended for American adults economically harmed by the ongoing pandemic. In this September 30, 2020 photo, McConnell talks to reporters following the weekly Senate Republican policy luncheon in the Hart Senate Office Building in Washington, DC.CHIP SOMODEVILLA/GETTY

It’s not that the money would go to families that don’t need it. The economics of the distribution algorithm would allow families making several hundreds of thousands a year declared eligible to receive a check, perhaps for more than $2000 depending on marital status and number of dependents. They don’t need it but—as both Sen. Schumer and Speaker Pelosi have many constituents among the caviar-consuming, designer-ice-cream-eating, Louis Vuitton-carrying crowd who would qualify, it’s little surprise they’re on board. They probably also appreciate the optics associated with seeming like Santa Claus while McConnell comes across as Scrooge.

Except McConnell isn’t, at least not as far as the economics are concerned. A one-time payment of $2000 may help some families clear some debts but it won’t do anything to get the economy going. What we know from the available data is that the open states, most of them red states, are doing better than the mostly blue states where the lockdowns continue.

If the lockdowns aren’t doing much to mitigate the impact of COVID, if the disease is still mostly passed from person to person in home and family settings, and if most all the people who die from it would have shortly died from something else—all things much of the available data show are true—then the best stimulus the economy could have would be for the shuttered states to reopen so everyone could go back to work.

If stopping the checks means more people clamoring for a return to normalcy, then McConnell has done the nation a great service. Larry Summers, the liberal economist who served as Bill Clinton‘s treasury secretary and director of Barack Obama‘s National Economic Council has said: “There is no good economic argument” for universal checks. The economy is roaring back, in fits and starts, with third-quarter 2020 growth at a never-before-seen 33 percent, adjusted on an annualized basis. The checks Trump, Pelosi and Schumer want can’t improve on that. They can put our children and grandchildren deeper into debt than they already are.

McConnell should maintain his hard “no.” As Ronald Reagan said, “The best welfare program is a job” which, expanded out, means the best form of stimulus—and what we need right now—is to let the American people get back to work, not subsidize their continuing to stay home.


Will The Covid-19 Pandemic Confound Or Enable China’s Strategic Ambitions?

By Robert G. KaufmanHoover Institution

Will China’s negligence unleashing the coronavirus and mendacity exploiting it catalyze a reckoning with the PRC, comparable in significance to the Czech Coup of 1948? And will it crystallize long-term American determination to contest China’s scheme to supplant the United States as the world’s preeminent power? Or will China ultimately emerge as the winner from the devastation it has wrought because of a deficit of strategic and moral clarity within the United States and among our allies?

The answer to these questions depends considerably on the policies adopted by the next president. Start with the good news. Negative views of China have soared to a record high of 73 percent of Americans, according to a Pew Foundation Poll released in late July 20201. Chinese behavior during and since the coronavirus also has elicited strong negative reactions across the Indo-Pacific, especially in Japan, India, and Australia, where views of China’s ambitions and behavior already trended strongly in a negative direction. Even in Western Europe, long committed to engaging and conciliating rather than confronting China, COVID-19 has generated an anti-China backlash, more muted on the continent but stronger in Britain where British Prime Minister Boris Johnson joined President Trump in imposing a complete ban on Chinese 5G vendor Huawei.

Even so, this contingent good news might prove ephemeral rather than enduring if the United States and our allies should waver in the reckoning with China that President Trump deserves credit for initiating. The reelection of President Trump would have offered the best practicable option for building and intensifying the Administration’s first term strategy of contesting China comprehensively and vigorously—a vital condition for bolstering deterrence, or defeating China at the lowest possible cost and risk should deterrence fail. Unlike his predecessor––who “welcomed China’s rise,” who significantly shrank American defense spending while China armed prodigiously, and whose national security statements of 2010 and 2015 omitted naming China or any other great power as an adversary––the Trump Administration designated China from the outset as our number one adversary. The President has not only increased the American defense budget substantially, but invested in threshold technologies such as strategic defense and created an independent Space Force. The President has pushed back hard against China’s implacable economic warfare against us on trade and intellectual property that his predecessors rationalized away. The President’s economic policies before COVID-19 intervened had generated prodigious economic growth on which American military preeminence depends. Trump began, too, the long overdue decoupling of the U.S. economy from China’s, the imperative of which our inordinate dependence on China for essentials such as antibiotics exposed in high relief during this pandemic. President Trump strengthened relationships with a decent democratic India and Japan, vital, value-based allies who share our strategic priorities and alarm about the trajectory of China’s policies at home and abroad—relationships his predecessor, with the support of Vice President Biden, allowed to languish while courting China and other adversaries.

Trump’s recalibration of our China policy that COVID-19 has broadened, deepened, and accelerated is a good start, but only the end of the beginning of what is necessary for the United States and our allies to prevail. For all the considerable merits of President Trump’s approach towards China, the President would enhance the effectiveness of his policies by doing some recalibrating as well. The President’s rhetoric has undervalued the importance of American ideals as well as self-interest in identifying friends, foes, threats, and opportunities. Many Americans who are increasingly alarmed by China rightly advocate calling out China with no pale pastels on human rights, stressing the tyrannical nature of the Chinese regime, while championing the importance of a value-based alliance system of fellow democracies in the Indo-Pacific, grounded firmly in geopolitics. The President’s spokesmen—particularly Secretary of State Pompeo and Vice President Pence—have done much better articulating this dimension of the contest with China than the President, whose actual policies on this and many other issues are often better than he makes them sound. A greater emphasis on human right also may elicit greater support for sterner policies towards China from our Western European allies, where resolve—especially in Germany—is fragile at best even now with disillusionment with China running much higher than usual.

A second term Trump presidency also would run the risk of undermining the significant progress the Administration achieved in the first term if the President decided to settle for a deal rather than staying the course. This temptation is not only organic to President Trump’s nature, but would loom large for whoever became president because of the huge budgetary deficits that COVID-19 has compounded. President Trump’s salutary hectoring our allies to do more—yielding impressive results in Europe his predecessor failed to match—also ran the risk of reaching a culminating point counterproductive to forging a muscular strategic consensus that actively counters China’s ambitions.

With President Trump’s defeat, the odds diminish that China loses more than it gains by unleashing and exploiting COVID-19. Granted, the most recent Pew Foundation Poll found that many Democrats as well as even more Republicans advocate tougher policies on toward China on human rights and trade. An increasing number of prominent Democrats have become rhetorically more willing to criticize rather than conciliate China. Even so, President-elect Biden has a long record of advocating engagement with China while downplaying the idea that the PRC has become a serious strategic rival. The leftward lurch of the current Democratic Party also does inspire confident that a Biden Administration will follow through on President Trump’s policy of robust resistance towards China’s predatory behavior. On the contrary, Senator Biden had moved steadily in a more dovish direction on national security even before becoming President Obama’s Vice President and cheerleading for Obama’s Dangerous Doctrine President Trump has repudiated in its entirety. Neither Biden nor his surrogates said much of anything about China at the Democratic convention despite the urgency of addressing the paramount national security threat of our time.

Will a Democratic Party reluctant to condemn the breakdown of law and order in a growing number of municipalities its leaders have governed for decades—a party seriously considering deep cuts in law enforcement amidst the mayhem—pursue the types of muscular national security strategies essential for credibly reassuring our terrified real and prospective allies in the Indo-Pacific that it is safer to stand up to China rather than to capitulate? Will a party committed to a vast expansion of government domestically—with deficits cascading, taxes poised steeply to increase if President Biden has his way—have the resources much less the inclination to spend enough on defense to counter China’s relentless military buildup aimed at driving the United States out of the Western Pacific? Will a Biden Administration also designate China’s grandiose ambitions and predatory behavior as danger number one? Or will the President-elect and his party revert instead to the default position of President Trump’s predecessor, who considered climate change the paramount gathering danger, envisaging China as a partner in fighting it?

Concluding with an optimistic plausible caveat about the consequences of a Biden victory for our struggle with China, history furnishes ample examples of policies confounding expectations. Recall the Truman Administration’s decision to resist North Korea’s June 1950 attack on South Korea just six months after Secretary of State Dean Acheson seemed to exclude South Korea as a vital interest in his speech to the Washington Press Club in January 1950. Recall, the strategic metamorphosis of heretofore isolationist Senator Arthur Vandenberg of Michigan into a stalwart supporter of President Truman’s policy of vigilant containment. In the immortal words of the Beach Boys, “Wouldn’t It Be Nice” if a Biden Presidency underwent a similar metamorphosis in this direction. It would be a triumph of hope over experience, however, to count on it. This version of the Democratic party has purged itself of all vestiges of the Truman/Scoop Jackson tradition of muscular Cold War liberalism congenial to the President’s hawkishness on China. The party’s political banishment of Former Senator Joseph Lieberman—the last of the Cold War Democrats—sadly attests to that.

May a Biden Presidency, too, be better than it sounds. Otherwise, the COVID-19 pandemic may turn out to be a strange and stinging defeat for the United States instead of a defeat for its perpetrator.


Retailers stepping up in more ways than one

By Peter RoffNew Rockford Transcript

Despite the grim economic news, the V-shaped economic recovery President Donald Trump has talked about may soon be a reality.

The news that several novel coronavirus vaccines will soon be available may allow the lockdowns to end. If all goes as planned, Operation Warp Speed could lead to the nation recovering lost economic ground in months rather than years, even if the number of cases continues to rise.

Retailers across the country are contributing to Operation Warp Speed by ordering freezers, thermometers, and the additional medical gear needed to administer vaccines once they’re available. It makes sense. Since grocers and pharmacies offer flu shots, their support in delivering the vaccine is crucial given their thousands of locations in every city and county in the nation.

These public-private partnerships in Operation Warp Speed not only show we can beat this pandemic, but also highlight the benefits when America’s private sector steps up.

Over the last 10 months, retailers have taken the lead, offering “hero pay,” additional bonuses, and greater safety measures to keep their employees and customers safe. Their story is just one of many waiting to be told once all of this is behind us. But that’s not the only way this one segment of American business is stepping up to address the nation’s critical problems.

Employees from Albertsons, Kroger, and Ahold recently ratified agreements with 27 local unions to withdraw from a union multi-employer pension fund circling the drain and join the newly formed UFCW and Employer’s Variable Annuity Pension Plan. This change includes investments of nearly $2 billion from these companies that will improve the security and stability of future benefits for employees and modernize retirement benefits.

The issue of pension reform has been before Congress for some time, but it’s been stuck. If the nation’s pension plans fail in any significant way, with far too many of them currently underfunded, the required bailout that would follow would imperil any recovery, as well as long-term future prosperity.

What has just been accomplished is great news for all involved. Millions of workers in other pension plans may not be so lucky. Rather than bicker over the best way back to a pre-COVID economy, policymakers ought to be focusing on the pitfalls ahead. Many of them, like the need to reform the pension system, are not hard to spot.

Pension reform has long been an issue that elected officials on both sides of the aisle have recognized and have attempted to address but that never went far enough. For example, there are about 1,400 pension funds that are, according to the federal Pension Benefits Guaranty Corporation “collectively bargained plan(s) maintained by more than one employer, usually within the same or related industries, and a labor union” that are potentially in trouble.

Policymakers must take a balanced approached to the issue of troubled multi-employer pension funds that provide participants with the retirement income they depend on while not placing undue burdens on the employers who participate in them. A solution must be found soon to protect the 10 million or so workers millions enrolled in employed by manufacturers and retailers and mining and shipping concerns to prevent them from having their benefits reduced significantly or cut entirely.

The PBGC’s safety net for pension funds that default is shrinking. Insolvency may come as soon as 2025 as more and more multi-employer plans face financial challenges and member companies fail or enter bankruptcy. Many of these companies have been hit hard by the coronavirus lockdowns and been unable to keep up their contributions.

Companies like Albertsons, Kroger, and Ahold did not wait for government incentives to make the switch. They moved ahead because it’s the right thing for workers and that’s good for the corporate bottom line. Other companies and industries will hopefully follow suit because it’s good for workers, good for taxpayers, and great for America.

If Operation Warp Speed is to be deemed a success in the months ahead, it will be thanks not only to the pharmaceutical companies who created the vaccines but to the retailers who distributed and vaccinated Americans at record rates. Should our recovering economy continue its current trend, we will prevail because private companies invested their profits and resources to make it happen.


California’s Democratic dominance may soon prove deadly

By Bill WhalenThe Washington Post

Demonstrators demand the recall of Gov. Gavin Newsom (D) on Nov. 21 in Huntington Beach, Calif. (Marcio Jose Sanchez/AP)

As of Sunday, most Californians are under strict stay-at-home orders. Gov. Gavin Newsom’s (D) lockdown shutters businesses, bars and cultural centers; makes restaurants takeout-only; and sends religious services outdoors. Gatherings with people in other households are banned — through Christmas.

That’s a lot for authorities to ask — especially when they appear so out of touch with the people they’re trying to govern.

Many residents are furious over being asked to make sacrifices that state and local officials themselves won’t. Newsom is by now notorious for his minimum $350-a-plate meal at the ultra-elite French Laundry in violation of his own guidance to Californians, exacerbated by his lieclaiming the meal followed outdoor distancing policies.

The mayor of San Francisco, London Breed, had her own coronavirus-noncompliant dinner at the same tony venue. Los Angeles County Supervisor Sheila Kuehl was spotted dining alfresco at an Italian restaurant in Santa Monica not long after voting to ban outdoor dining for her 12 million fellow Angelenos. San Jose’s mayor had to apologize after traveling to his parents’ house for a Thanksgiving dinner in violation of state requirements. When five state lawmakers were busteddining out in Sacramento this week by a reporter, one asked, “Can we not have dinner?” before pulling his mask out of his pocket.

Why are these officials so flagrantly violating rules they expect their own voters to follow? Is it arrogance? Delusion? Indifference? All of the above?

Perhaps. But I have another theory: The tone-deafness is what comes from living in a bubble where political competition is scant. In California, Democratic voters outnumber Republicans nearly 2-1. Only two Republicans have won statewide office since 2000. Newsom, Breed and Kuehl received 62 percent, 71 percent and 76 percent of the vote, respectively, in their last races.

In other words, it is precisely because California is so heavily Democratic that Democratic officials don’t feel the need to be responsive to their constituents. But there is mounting evidence that even in this one-party state, voters are no longer unquestioningly swallowing what their leadership is feeding them.

In the case of the pandemic crackdown, residents are mounting resistance to lawmakers’ hypocrisy. One county plans to challenge Newsom’s covid-19 policies in court. Cities are exploring forming their own public health departments to avoid county-level restrictions. Sheriffs are refusing to enforce state curfews. Business owners are planning open rebellion.

This year’s ballot initiatives, too, should raise alarms, as measures that Democratic tail winds should ordinarily have swept to victory instead went down to surprising defeat. One was Proposition 15, which sought to hike commercial property taxes, ostensibly to fund public schools (the state’s teachers’ union spent $20 million trying to push the measure through). Proposition 16, meanwhile, would have reinstated the use of affirmative action in California public university admissions and public sector hiring.

Both measures enjoyed overwhelming support from progressive activists, state Democratic elected officials and Newsom. And both should have benefited from anti-Trump turnout. But Prop. 15 received nearly 2.9 million fewer votes statewide than President-elect Joe Biden did. Prop. 16 trailed Biden by almost 3.9 million votes.

Newsom and state Democratic leaders were also embarrassed by Proposition 22. In September 2019, Assembly Bill 5 — a law mandating that companies treat “gig workers,” such as Uber and Lyft drivers, like full-time employees — passed easily in the overwhelmingly Democratic state legislature, with a 29-11 vote in the state Senate and a 61-16 vote in the Assembly. The measure was eagerly signed into law by Newsom. Then Prop. 22 took the matter to voters, who decisively rejected their Democratic overlords — 59 percent to 41 percent.

These measures failed, in part, because their Democratic champions were clueless about where voters actually were on the issues. Prop. 15, for example, rested its hopes on an ambitious media blitz featuring teachers railing against corporate loopholes that allegedly deny schools deserved money. But at a time when shuttered schools and substandard virtual learning are shortchanging millions of California kids, was a plea for sympathy for teachers’ unions a wise tactic?

These rebukes point to an unsettling phenomenon. Because relatively little is demanded of them, California’s elected leaders have an easy time getting elected, but haven’t yet mastered the part that comes after — leading.

Newsom, for example, was nurtured, educated and sent up the political ladder in a deep-blue range from Marin County to the southern end of Silicon Valley — coasting from one Democratic-friendly post to another, never having to develop shrewd professional and personal judgment. He and his fellow state and local lawmakers apparently still need to master the arts of convincing and persuading, of finding the right policies that appeal to broad coalitions, of being the role models they expect voters to follow.

In a few months, the embarrassments of failed ballot propositions will probably have faded. But in the case of the covid-19 resistance, Democratic officials’ alienation from their voters could prove deadly. If there’s a silver lining to the crisis, maybe it will be that it finally prompts complacent politicians such as Newsom to look beyond their own whims to what their voters actually want and need.


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