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Tag Archives: Economy


Progressives Say Biden’s Campaign Tax Pledge Has Been Broken

By Peter RoffAmerican Action News

Gage Skidmore via Flickr

A leading liberal think tank analysis shows the Biden overall tax plan would shred the president’s 2020 campaign pledge that taxes would not be increased “by one thin dime” for anyone making less than $400,000 a year.

According to the Tax Policy Center, if Biden’s combined tax initiatives became law this year, 75 percent of middle-class families would see the amount they pay in taxes increase in 2022, and that 95 percent of middle-class families would pay more in taxes by 2031. At the same time, Biden Treasury Secretary Janet Yellin is refusing to rule out the restoration of special interest tax breaks that would disproportionately benefit the ultra-wealthy. 

Testifying recently before the House Committee on Ways & Means, Yellin refused to say whether the president and his advisers would move ahead on demands by Democratic governors like Andrew Cuomo (NY) and Phil Murphy (NJ) and members of Congress from the blue states that state and local tax payments be made fully deductible on federal returns once again. The provision known as SALT was capped from the tax code in the 2017 Tax Cuts and Jobs Acts as a “pay for” that made it possible for other rates to be reduced. 

When asked whether Biden would support eliminating the cap if it was included in any compromise infrastructure package. Yellen said, “I’m not going to negotiate here on behalf of the president.”

Biden policies, some lawmakers say, are forestalling the onset of a full-blown recovery caused by the pandemic-related lockdowns that plunged the U.S. closer to financial disaster than at any time since the so-called great recession of 2008.

“Through the first five months of this year, the Biden Administration added 500,000 fewer jobs than the last five months of 2020 – some of which were during the height of Covid cases and deaths. A half-million jobs short. And due to inflation, real wages have declined since President Biden took office,” Brady said in a statement.

The White House has repeatedly denied this is because the enhanced unemployment benefits authorized at the beginning of the lockdown period have been allowed to continue. A study recently published by the Committee to Unleash Prosperity’s Steve Moore, Casey Mulligan, and E.J. Antoni shows the relationship between the two to be direct and economically harmful, a view shared by Federal Reserve Chairman Jerome Powell who has made clear he believes these benefits have discouraged workers from returning to work and harmed recovery.

While Biden policies may be cooling job growth here at home, they’d incentivize job creation and fuel an expansion overseas – especially if the president’s agreed-upon among the G-7 plan for a global minimum corporate tax is eventually adopted

The 15 percent GMT, which must be approved by Congress before becoming law, would make it better to be a foreign worker or company than an American one. If it’s imposed, it would incentivize U.S. companies to move U.S. jobs overseas and to “offshore” themselves which, before the 2017 Tax Cuts and Jobs Act’s creation of a global intangible low tax income provision was a common occurrence in the American market. 

The proposal the Biden administration has endorsed holds out the prospect of a global tax code in which American companies operating overseas have to pay higher taxes than their foreign competitors. This would give foreign competitors an advantage to target American companies and jobs and erode the U.S. tax base. As Brady described it, The White House is “leading a global race to the bottom” for America’s competitiveness and our workers.


Voters Leaving California Take Billions with Them

By Peter RoffAmerican Action News

JD Lasica from Pleasanton, CA, US via Wikimedia Commons

California’s high tax, generous welfare state policies, and the dominance of progressive politics have combined to create an environment causing voters to leave the state at can only be described as an alarming rate. For the first time since statehood in 1850, California is losing rather than gaining a congressional seat as a result of the decennial census and the ensuing reapportionment of the 435 districts in the U.S. House of Representatives among the 50 states. It’s an alarming reality for the state Ronald Reagan and his sunny optimistic brand of growth-oriented conservatism once called home.The economy is in the doldrums, and not just because of the strict lockdowns instituted by Democratic Gov. Gavin Newsom in the face of the coronavirus pandemic. Even with that, the state budget surplus for 2021 is projected to exceed $75 billion which, instead of being returned to the taxpayers through tax relief, is likely being socked away for the day when it’s needed to bail out the generous social welfare programs and government employee pensions the Democrats trade in exchange for votes to keep them in power.“California used to be a place where everyone wanted to live, but now California has become a place where people want to leave,” Brandon Ristoff, a policy analyst with the California Policy Center told Center Square driven out by “bad policies on the economy, education and more.” State-to-state migration data recently released by the U.S. Department of Internal Revenue (IRS) shows a net loss of nearly 70,000 households plus – which works out to about 165,000 taxpayers and their dependents – between 2017 and 2018.If that’s not bad enough, lawmakers in Sacramento now must worry about the impact of their departure on future budgets since they took nearly $9 billion in adjusted gross income with them when they left, The Epoch Times reported.Like New York City, California working hard to drive its tax base out of the state. Longtime residents are retiring elsewhere. Younger voters are leaving to pursue job opportunities in other states. Major businesses are relocating. Too many people, especially those who make up the middle class, are adversely affected by the high cost of living there – especially the housing market which is soaring to unaffordability for so many people – are now finding the Golden State an impossible place to live.Where are they going? Texas and Nevada – which have no state personal income tax, and Arizona – where the governor and members of the GOP-controlled state legislature are exploring ways to get rid of it.

-Texas experienced a net inflow of 72,306 taxpayers and their dependents, and a gross income boost of some $3.4 billion.

-Nevada welcomed 49,745 California taxpayers and their dependents, along with a gross income of $2.3 billion.

-Arizona saw an estimated 53,476 Californians relocated to Arizona, bringing with them around $2.2 billion in gross income.

Some policymakers still refuse to believe tax rates matter, that they have no incentive effect. Economist Arthur Laffer – developer of the famous “curve” that bears his name – proved they do. California has a state-local effective tax rate of 11.5 percent, the 8th highest in the nation in 2019 according to a recent Tax Foundation study. The effective state-local tax rate in Texas is 8 percent, in Nevada, it’s 9.7 percent, and in Arizona it’s 8.7 percent, making them (in order) 47th, 45th, and 29thout of 50.A 2018 Cato Institute report also showed the relationship between state-local tax effective rates on out-of-state migration. Tax-related motivations could be inferred from the Census Bureau data, The Epoch Times reported, citing the think tanks’ observation that some of the questions asked of people choosing to relocate show the incentive effect at work.“The Census Bureau does not ask movers about taxes. But some of the 19 choices may reflect the influence of taxes. For example, people moving for housing reasons may consider the level of property taxes since those taxes are a standard item listed on housing sale notices. Similarly, people moving for new jobs may consider the effect of income taxes if they are, for example, moving between a high-tax state such as California and a state with no income tax such as Nevada,” CATO said.If California doesn’t change its ways soon, it may find it has taxed its way into default. Illinois and New Jersey are in similar straights. There’s a lesson here for Democrats and Republicans in Washington who, despite the apparent end of the pandemic, still spend like there’s no tomorrow. If they continue to do that, there won’t be.


Wall Street Must Stop Enabling Communist China

America’s financial elite is helping to finance America’s prime strategic adversary.

By Senator Marco RubioThe American Prospect

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After the Trump administration called for the delisting of Chinese companies tied to Beijing’s military last fall, Wall Street went to bat to ensure that three Chinese telecommunications firms, including China Telecom, were spared.

As a new, more skeptical consensus about America’s economic relationship with Beijing emerges in Washington, Wall Street is growing more tightly integrated with China than ever before. The disconnect highlights one of our nation’s biggest vulnerabilities in our confrontation with China over who will determine the course of the 21st century.

American capital markets are the most open, liquid, and valuable in the world. They are also increasingly a source of funds for China’s most strategically important companies. Chinese companies that produce surveillance technology and weapons of war that could one day kill Americans finance their investments with Wall Street capital.

Historically, both Republicans and Democrats have been weak when it comes to identifying and correcting these kinds of problems. Politicians in my own party have too often been reluctant to intervene over concerns about the “free market.” But things are changing. Faced with the catastrophic impacts of deindustrialization, which has choked opportunity for the American working class, and a growing reliance on an authoritarian regime, more of my colleagues in the GOP have awakened to the dangers of economic policymaking that prizes short-term economic efficiency over all else.

American capital markets are increasingly a source of funds for China’s most strategically important companies.

But just as many Republicans have grown more skeptical of big business’s cozy relationship with Beijing, large swaths of America’s financial and corporate sectors are making a play for a new base of political support—this time complete with deep-blue, progressive social stances on hot-button issues in our politics.

It’s the height of hypocrisy. U.S. corporations with lucrative business ties to the Chinese Communist Party will boycott states here over anti-abortion laws, while Beijing systematically sterilizes Uyghur women. They routinely inflame divisive race issues within the U.S. while marginalizing African American actors or erasing Tibetan characters to keep Chinese audiences happy.

And in instances when the U.S. government has acted, our financial sector, fearful of losing out on a lucrative investment opportunity, often intervenes to protect state-tied Chinese firms. For example, after the Trump administration called for the delisting of Chinese companies tied to Beijing’s military from the stock market last fall, it was Wall Street that initially went to bat to ensure that three Chinese telecommunications firms complicit in state censorship, China Telecom, China Mobile, and China Unicom, were spared. (After several reversals and a failed appeal process, the three ended up recently delisted.) And just this month, the Biden administration allowed one of China’s biggest companies, Xiaomi, to relist on U.S. exchanges.

Democrats should be skeptical of the opportunistic progressive social stances in our finance and tech sectors. The presence of a diversity and inclusion czar does nothing if a company is profiting off of slave labor in Xinjiang.

More fundamentally, Wall Street advances the goals of the CCP with its investment in China, which needs American capital to grow its economy. As China has evolved from an export-driven economy to one reliant on state-led investment, it needs foreign investment to help pay for its debts. Investing in China funds the Chinese companies powering Beijing’s economic strategy and industrial policy.

In 2019, the United States became a net investor in China for the first time in history. How did this happen? The answer lies with the fund managers. As China has “opened” its market to American financial companies and sought the listing of its businesses on American stock exchanges, the portfolios of American investors have been increasingly invested in Chinese companies. Many well-meaning Americans may inadvertently be propping up a genocidal regime because Wall Street does it for them.

Furthermore, Chinese firms listed on U.S. securities exchanges are widely shielded by their government from the full oversight of American financial regulators, putting teachers’ pensions and retirees at risk.

Thankfully, there are legislative solutions that both Republicans and Democrats should be able to support. First of all, we should ban any U.S. investments in Communist Chinese military companies. This is part of the reason why I first introduced my Taxpayers and Savers Protection (TSP) Act in 2019—to ensure the retirement savings accounts of federal workers and service members didn’t end up invested in Chinese companies tied to the People’s Liberation Army or engaged in human rights abuses.

In instances when the U.S. government has acted, our finan-cial sector often intervenes to protect state-tied Chinese firms.

Similarly, no Chinese company on the U.S. Department of Commerce Entity List or the U.S. Department of Defense list of Communist Chinese military companies should be allowed to access U.S. capital markets—a move that could simply be accomplished by passing my American Financial Markets Integrity and Security Act.

We can also require increased scrutiny of activist investors in companies tied to national-security work or supply chains—particularly ones related to China—through my Shareholder National Security Awareness Act. Finally, we must ensure that Chinese companies, the only ones in the world that routinely skirt U.S. regulatory oversight, are no longer welcome to publicly list on U.S. stock exchanges.

Americans from across the political spectrum should feel emboldened by the growing bipartisan awakening to the threat that the CCP poses to American workers, families, and communities. As we deploy legislative solutions to tackle this challenge, Democrats must not allow our corporate and financial sectors’ leftward shift on social issues to blind them to the enormity of China as a geo-economic threat.


A Carbon Tax Would Harm Working-Class Americans

By George LandrithInside Sources

A Carbon Tax Would Harm Working-Class Americans

U.S. Representatives Steve Scalise (R-La.) and David B. McKinley, P.E. (R-W.Va.) introduced a resolution that, if passed, would express the sense of Congress that a carbon tax would be detrimental to the United States economy and harm working-class Americans the most.

This is self-evidently true. In fact, it is so obviously true, a reasonable person might ask why such a resolution is even necessary. Do we really need a resolution that is as obvious as the sun rises in the east?

Sadly, even though the resolution’s point — that carbon taxes are harmful — is painfully obvious, the resolution is necessary. There are many voices on the national stage that support virtually any new tax and particularly any energy tax. The Biden administration has made it clear it considers the energy sector the enemy — killing pipelines, proposing new taxes, and advocating for new burdensome regulatory regimes and mandates. But this is counterproductive!

A carbon tax — no matter who they tell you will pay it — will hit the economy hard and will hit lower-income Americans the hardest. A carbon tax would increase the cost of everything Americans buy — from groceries, to electricity and gasoline, to home heating in the winter, to everyday household products. Moreover, having a reliable source of affordable energy is foundational to a strong job market and strong economic growth. The rich don’t need a strong job market or strong economic growth to build a better future for themselves and their families. They’ve already got that. But the working middle class and the working poor need a robust jobs market and economic growth to push wages higher.

The additional costs imposed on the working class by a carbon tax are difficult to bear. Their budgets are already tight. Are they going to go to work less often or heat their home less in the winter? They are kind of stuck. If you increase their energy costs, they have to give up other necessities. And if you damage the economy, their hope for better times and brighter days ahead evaporates. That’s way too high a price to pay for whatever false promises the elites are offering.

America achieved energy independence when only a few short years ago, it was widely perceived that we would always be forced to import energy and rely upon energy from hostile nations. Energy independence had obvious economic benefits, but it also had national security benefits. For much of the last two generations, American foreign policy had to worry about keeping the oil flowing from the Middle East. Given the volatility of the region, that often forced some unpleasant foreign policy considerations on American policymakers. But with energy independence, hostile powers could no longer hold us hostage or use energy as a leverage point. Thus, we were more secure. A carbon tax would put all of this at risk.

Some privileged elites see their support for a carbon tax as some sort of virtue. And they think it makes them look good. But what is there to feel so superior about in forcing working-class Americans to pay higher energy bills, transportation costs, and higher costs for food and household items — all while also being forced to suffer lower or suppressed wages?

This resolution tells Congress and the Biden administration that Americans expect accountability in their government. The Biden Administration is attacking energy through its attempts to force us into expensive electric vehicles and to use legitimate infrastructure needs as cover for redistributing taxpayer money to favored technologies like windmills and solar panels. This is all reminiscent of Solyndra, which gave away hundreds of millions of taxpayer dollars to well-heeled political donors in the guise of energy policy but was ultimately a boondoggle and nothing more.

Rather than trying to use energy policy as a way to push Americans into the buying preferences of a few political elites, let’s unleash the power of the free market and human creativity!  We can have reliable, affordable energy and a clean environment.  But only if we allow and encourage innovation, rather than imposing government mandates and taxes.


TRADING ONE DEPENDENCY FOR ANOTHER

By Nadia SchadlowWar on the Rocks

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Image: Xinhua

Several of the Biden administration’s key climate goals — particularly steps to reduce U.S. greenhouse gas emissions in the power and transportation sectors — are likely to be held hostage by China. A shift away from fossil fuels to renewables to produce electricity, and the deployment of more electrical vehicles on America’s roadways, depends upon batteries. Since China currently controls the entire life cycle of battery development, the Biden administration needs a strategy to mitigate China’s dominant position. While the president’s special envoy for climate, John Kerry, hopes to approach climate as a “critical standalone issue,” the fact is that geopolitics will shape the choices President Joe Biden will have to make. The Biden administration will not be able to “compartmentalize” its climate policies from the overall U.S.-Chinese relationship. China’s strength in the new green industries presents a strategic challenge.

Energy storage has been called the “glue” of a low-carbon economy, enabling the greater use of intermittent power sources such as wind and solar. The World Economic Forum argues that batteries are a critical factor in reaching the Paris Agreement goal of limiting rising temperatures to 2 degrees Celsius. By 2030, it stated, batteries could enable 30 percent of the required reductions in carbon emissions in the transport and power sectors.

Batteries and Bottlenecks

The battery supply chain is complex, but it can be reduced to four key elements: mining the critical minerals, processing them, assembling the battery parts, and recycling.

Under its “Go Out” investment strategy, China has spent the last two decades solidifying control over the main critical minerals for battery cells — lithium, cobalt, and graphite. Beijing now controls some 70 percent of the world’s lithium supplies, much of which is located in South America. More than two-thirds of the world’s cobalt reserves are found in the Democratic Republic of the Congo, and China has secured control over 10 of the country’s 18 major mining operations, or more than half its production. Beijing is also the world’s largest consumer of cobalt, with more than 80 percent of its consumption being used by the rechargeable battery industry. Graphite is the largest component by volume in advanced batteries, but spherical graphite, the kind that makes up the anode in electrical vehicle batteries, must be refined from naturally occurring flake graphite. And China produces 100 percent of the world’s spherical graphite.BECOME A MEMBER

Second, China has developed the largest minerals processing industry in the world. After these critical minerals are mined from the earth, they must be separated, processed, refined, and combined. This process is dirty and environmentally unfriendly. Lithium-ion batteries contain hazardous chemicals, such as toxic lithium salts and transition metals, that can damage the environment and leach into water sources. This is likely a key reason why few processing facilities are located in North America. The critical minerals the United States does mine are often shipped back to China for refining.

According to Benchmark Mineral Intelligence, Beijing also controls 59 percent of global lithium processing, 65 percent of nickel processing, and 82 percent of cobalt processing. And an important aside is that China produces roughly 90 percent of the magnets needed for the motors of electrical vehicles.

As early as 2008, China announced billions of dollars in infrastructure investments in the Democratic Republic of the Congo, by far the world’s largest cobalt producer, in exchange for mining rights. The partnership continues to flourish. In January of this year, the Democratic Republic of the Congo formally joined China’s “One Belt One Road” initiative. The Chinese mining company Tianqi Lithium has acquired stakes in major mines in Chile and Australia, giving it effective control over nearly half the current global production of lithium. China controls even more market share in the refining and processing parts of the mineral supply chain. Together, these state-backed investments have given Chinese battery makers like Contemporary Amperex Technology Co. Limited (CATL) an advantage over Japanese and American competitors.

Third, once these minerals are processed, they are packed into battery cells, which are combined into modules and which, in turn, are wrapped into battery packs. This process takes place in dedicated battery factories called “gigafactories.” Like the rest of the battery supply chain, very few of these specialized factories are located in North America. About 136 of the 181 lithium-ion battery gigafactorieseither planned or under construction worldwide are, or will be, located in China. Just 10 are planned for the United States. An important step in the right direction is General Motor’s consideration of building a second battery factory in the United States — it already has a new facility online in Ohio — but the United States needs to do more.

Finally, once batteries have reached the end of their life cycle, the critical minerals in each cell can be reused. But China dominates the battery recycling industry as well. This is partially because China has built infrastructure to recycle lithium-ion batteries for consumer electronics. In 2019, around 70 percent of lithium-ion batteries were recycled in China and South Korea. And because China is by far the world’s largest electric vehicle market, it will remain a key contributor to lithium battery waste — thus allowing Beijing to recycle at scale.

China has been strategic about building up its recycling capabilities, requiring manufacturers of electric vehicles to be responsible for setting up facilities to collect and recycle spent batteries. As a part of this initiative, automakers were required to establish a maintenance service network to allow consumers to repair or exchange old batteries.Going forward, recycling will only become more important. By 2030, 11 million metric tons of lithium-ion batteries are expected to reach the end of their service lives. Eventually, a robust recycling process could offer a way for countries to mitigate some Chinese-controlled bottlenecks in the supply chain. But taking advantage of this will require environmentally friendly recycling facilities in the United States.

Commanding Heights: Technology and Leverage

China’s dominance across this supply chain should come as no surprise. As in other key economic and technology sectors such as flexible manufacturing, solar panels, and wind turbines, China has achieved dominance by careful planning and investments — as well as unfair practices such as those that led to the dominance of China’s solar panel manufacturing industry. (And it’s worth noting that this issue became one of the most contentious issues between the European Union and China as well.) In addition, many pointed to China’s massive intellectual property theft as a key contributor to its dominance in these key sectors.

Because China takes a strategic national approach, it has been particularly good at identifying key foundational sectors or platforms to grow or control, thereby increasing its economic and geostrategic power. For example, it has used its dominance in financial technologies across Asia to increase the power of its surveillance state by collecting the data associated with payments. It has prioritized 5G, and, with state financing and other forms of support, it has built out its network and is far ahead of the United States in land stations. Notably, this 5G infrastructure will have direct relevance to China’s ability to develop autonomous vehicles, since self-driving vehicles and other platforms, like drones, depend upon the fast connectivity 5G networks provide. (And autonomous vehicles are closely related to the electrical vehicle industry.)

Beijing’s “Made in China 2025 plan,” announced some six years ago, called for major advances in semiconductor fabrication and provided more than $150 billion to support that goal. Some recent reports suggest that China aims to produce some 70 percent of its domestic chip needs within China by 2025 and to reach parity with international technologies five years later. As Jonathan Ward has pointed out, “the mastery of advanced technologies and the creation of a powerful industrial base for civilian and military purposes” are essential pieces of China’s global strategy and activities. While the United States now increasingly recognizes this reality — with legislation such as the Creating Helpful Incentives to Produce Semiconductors for America Act (CHIPS for America Act), as well as executive branch attention by both Presidents Donald Trump and Joe Biden — there remains a far gap between strategy development, desired outcomes, and actual implementation.

Advanced energy is another key platform. Thus, it is not surprising that the “Made in China 2025” plan also included “new energy vehicles” and “new energy” as one of its 10 areas of focus. Beijing considers advanced batteries and electric vehicles a key strategic sector worthy of extensive industrial planning. One report noted that, in the science and technology sector alone, the Chinese Communist Party has issued as many as 100 plans. Several of these, including its 2011 strategic emerging industries plan, focused on key strategic sectors, including the “new energy automobile industry.” In 2017, General Secretary Xi Jinping released an Outline of the National Strategy for Innovation-Driven Development that includes differentiated strategies to produce “modern energy technologies.” And China is using its “One Belt One Road” framework to make strategic investments around the world and vertically integrate its supply chain for battery production.

The Chinese Communist Party has recognized that pressure to address climate change will prompt a shift toward renewable energy around the world. With a regulatory push across Europe, some expertsanticipate that, by 2040, about 70 percent of all vehicles sold in Europe across different segments will be electric. Others believe that the global electric vehicle market — about $250 billion today — will grow to almost $1 trillion by 2027.

China has positioned itself well for this transition. On the one hand, China will have the benefit of cheap fossil fuels. China will not even begin to reduce its own carbon emissions for another 40 years, until 2060. It continues to build coal plants around the world. (In 2016 alone, Chinese development banks invested $6.5 billion in coal infrastructure overseas, mostly in neighboring developing countries). On the other hand, the Chinese Communist Party has positioned itself at the center of a global energy revolution.

If anyone has doubts about the determination with which this might unfold, China’s automobile market was virtually nonexistent until the early 1990s but surpassed the United States in 2009 to become the world’s largest.

Rewiring the global energy economy around China would provide Beijing with massive economic benefits. Experts have pointed out that China’s focus on energy security and technological self-reliance are key factors informing Beijing’s aim to reach carbon neutrality by 2060. Chinese ministries have estimated that achieving this goal could lead to over RMB 100 trillion ($14.7 trillion) in investments over the next 30 years.

As a result, China has made significant advances in energy storage, leading Europe’s top automakers to move most of their research and development operations to China. Since 2018, the largest European carmakers (BMW, Daimler, FCA, Groupe PSA, Renault, Volkswagen, and Chinese-owned Volvo) have chosen Chinese partners for 41 cooperation projects. And European carmakers have also directly invested in their own research and development centers in China, establishing nine such centers since 2018.

Whatever the real intentions behind General Secretary Xi’s effort to put China at the center of an “an ecological civilization,” it is shortsighted and ahistorical to think that China will not use this leverage. It has done so in the past. In 2010, a Chinese fishing boat rammed two Japanese coast guard vessels in the contested waters of the East China Sea. When Tokyo arrested the fishing boat’s captain, the Chinese Communist Party retaliated by placing an embargo on rare earth sales to Japan.

More recently, in June 2019, Chinese state-controlled media threatened disruption of rare earth supplies to the United States — this time targeting U.S. defense contractors. The threat noted that “military equipment firms in the United States will likely have their supply of Chinese rare earths restricted.” This past February, China threatened to use export controls to cut off U.S. access to the equipment used for processing rare earths, a ban that would be as devastating as cutting off production of rare earths themselves. And Australia is feeling such pressure as China has restricted imports of Aussie beef, wine, and barley — and reduced the flow of Chinese students to Aussie universities — unless Australia submits to a list of 14 politicaldemands by Beijing.

This behavior is consistent with China’s use of “sharp power” — diplomatic, economic, or technological coercion — to pursue its policy objectives. This fall, China passed its first unified export control law, allowing the Chinese Communist Party to control the export of items including very broadly defined “dual-use goods” to specific foreign entities. As the Merics institute has pointed out, any exports that fall under “overall national security” — and the law appears intentionally vague — could be prevented, thus allowing Beijing to retaliate against countries or companies for policy disagreements or geopolitical reasons. Given Beijing’s designation of the electric vehicle and battery sectors as strategic industries, the Chinese Communist Party could potentially weaponize key bottlenecks in the supply chain against the United States.

Biden’s Challenge

For much of 21st century, the United States was dependent upon the Middle East for oil. As the Biden administration seeks to shift to renewables and reduce carbon emissions through the deployment of more electric vehicles, it should not trade one dependency for another. As one expert group put it, the modern-day arms race revolves around super-sized lithium-ion battery cell manufacturing facilities and the mineral supply chains to support them.

Any successful effort to “position America to be the global leader in the manufacture of electric vehicles and their input materials,” as Biden has stated, cannot be based on a dependency on the United States’ most serious competitor. Rather, the United States should understand that American efforts will be contested — even if they are intended to help the “global good” of reduced carbon emissions. It is highly unlikely that Beijing, which has been working for years to “seize the commanding heights” in critical technologies such as batteries, will easily watch as its advantages melt away. In the eyes of the Chinese Communist Party, the battery race means that China and the United States are locked in a battle over market share and access to scarce resources.

Chinese Foreign Ministry spokesman Zhao Lijian has already reminded U.S. leaders that U.S.-Chinese cooperation in specific areas is interrelated and subject to the overall U.S.-Chinese relationship. Maintaining dominance in battery production — particularly as the world increasingly relies on batteries — provides Beijing with valuable geopolitical leverage. While the Biden administration would like to compartmentalize climate change and geopolitics, the likelihood of China not doing so is high.

Moreover, as Biden seeks to build technology alliances with Europe and other allies to counter China, China’s efforts will constrain his leverage. With European electric vehicle manufacturers dependent upon China, it is hard to imagine that the Chinese Communist Party will not use these dependencies to ask for concessions in other domains.

To avoid a potentially debilitating dependence on China, then, the United States should treat clean energy technologies as a competitive space.

The Biden administration cannot afford to start from scratch and should build on the work of its predecessor. As it begins its new supply chain review, of which advanced batteries are one part, it should keep in mind the lessons of the Obama era battery initiative. In 2009, the Obama administration announced $2.4 billion in funding to produce next-generation hybrid electric vehicles and advanced battery components. One goal at the time, was to “end our addiction to foreign oil” through a plan that “positions American manufacturers on the cutting edge of innovation and solving our energy challenges.” As part of this, the Department of Energy offered up to $1.5 billion in grants to U.S.-based manufacturers to produce these batteries and their components. So what happened to these efforts and others like it over the past decade? Without setting forth what went right and what went wrong, it is hard to see how new initiatives can make progress.

How will Biden’s current efforts to use green technology to stimulate the economy differ from past failed efforts? Despite a string of incentives in the stimulus act in 2009, the solar supply chain largely moved to China after that country’s government invested heavily in the industry.

In addition to specifying lessons learned from past efforts, any future policy initiatives  should take advantage of existing recent efforts. For example, Ellen Lord, the former undersecretary of defense for acquisition and sustainment, devoted significant time to identifying investment priorities, including the battery network. Since it takes five to seven years from the start of planning a battery-manufacturing plant and setting up a pilot production line to reach full operational capacity of a gigawatt factory that can produce several gigawatt-hours per year, the administration needs to concentrate some of its efforts on existing facilities, while encouraging new investments by U.S.- and foreign-owned suppliers.

The Biden team will also need to make choices, and fight for them internally. If the United States is to increase its processing of minerals for batteries in the United States, it will need to overcome the fact that such processing facilities are environmentally challenging. That tradeoff is worth it.

The new administration can make progress on its climate goals, but doing so will require a serious dose of climate realism, as well as a concomitant commitment to competitive policies to achieve U.S. independence from China in battery technology and manufacturing.


On Tax Day, Biden Plan to Hike Taxes Draws GOP Criticism

By Peter RoffAmerican Action News

If President Joe Biden gets his way, the business of filing taxes in 2022 will be more complicated, more expensive, and more progressive than they’ve been in about 40 years. 

Biden didn’t say much about taxes during the 2020 campaign besides his promise that those making less than $400,000 a year would not see their tax bill rise by “one thin dime.” The proposals he’s put forward as “payfors” for infrastructure, COVID relief, and other new spending programs are riddled with new taxes and hike existing levies to the point one can safely say the era of “tax and spend” has returned, in a punitive, almost vengeful way. 

As the Committee to Unleash Prosperity observed Monday in its free daily Hotline, the top 5 percent of U.S. income earners pay half of all income taxes while the top 1 percent – the left’s favorite whipping post – pay more than 40 percent of the total tax intake. Meanwhile, as the chart below shows, the bottom half of income earners have an effective federal tax that’s close to zero – even when payroll and gasoline taxes are factored in. Quoting the Cato institute’s Chris Edward, “Joe Biden’s comments about the rich having low rates are clearly off base. The highest earners have tax rates twice the income of those in the middle and almost ten times the rates at the bottom.” 

Biden’s plan to “soak the rich” is more about politics than economics. The numbers don’t add up and, if his tax cuts are enacted at the same time the United States is trying to emerge from a prolonged, lockdown induced recession, the results could be inflationary and job-killing rather than spark renewed growth in the economy as the 2017 Tax Cuts and Jobs Act did. Nonetheless, the Democrats are, as a party, committed to TCJA’s repeal in its entirety and, in the process, violate Biden’s campaign pledge. 

Republicans on the House Ways and means Committee said Monday that if Biden gets his way on TCJA, it will do families “real harm” even at the median income level. A family of four with a household income of $73,000 could expect to see its federal taxes increased by $2,000. A single parent with one child should plan to pay $1,300 more.

Additionally, the committee said, the child tax credit would be cut in half as would the standard deduction, millions of middle-class households would again have to pay the Affordable Care Act individual mandate tax, and the American corporate tax rate would once again become the highest in the industrialized world.

The policies of tax and spend reached their apex in the 1970s under Jimmy Carter. America literally can’t afford to go back. The inflation alone would have a potentially ruinous impact on government discretionary spending. No Democrat who claims to be a moderate could go along with Biden’s plan to undo any part of tax-cutting, job-creating law Congress passed in 2017 – especially given what the president has planned for phase two. The prudent force forward is to keep the rates where they are, reduce overall federal spending, and let the U.S. economy boom. There will be plenty of money later to do the things we’ve already put off doing over the last four years, economists say, once the country is flush again. 


Milton Friedman’s Revenge

The specter of inflation haunts Joe Biden’s presidency

By Matthew ContinettiThe Washington Free Beacon

Treasury Secretary Janet Yellen got into trouble Tuesday for telling the truth. That morning, at a conference sponsored by the Atlantic, she raised the possibility that one day the Federal Reserve may raise interest rates “to make sure our economy doesn’t overheat.”

Anyone with a basic understanding of economics knew what she was talking about. The combination of President Joe Biden’s gargantuan spending and the accelerating economic recovery may well lead to a rise in consumer prices and hikes in interest rates. But an end to the Federal Reserve’s program of easy money would hurt asset prices and possibly employment as well.

Which is not what most investors want to hear. When Yellen’s words reached Wall Street, the market tanked. By the afternoon she was in retreat, telling the Wall Street Journal CEO summit that she had been misunderstood. “So let me be clear,” she said. “That’s not something I’m predicting or recommending.”

No, of course not. But it still might happen anyway.

A specter is haunting the Biden administration—the specter of inflation. Past inflations have not only harmed consumers, savers, and people on fixed incomes. They have also brought down politicians. Among the risks to the Democratic congressional majority is a rise in prices that lifts inflation to near the top of voters’ concerns, coupled by the type of Fed rate increase that hits stocks and housing. Inflation is one more signpost on the road to Republican revival, along with illegal immigration, crime, and semi-closed public schools embracing far-left critical race theory.

The classic definition of inflation is too much money chasing too few goods. That might also describe America sometime soon—if not already. The economy has started its post-virus comeback. Jobs and growth are on the upswing. U.S. households sit on a trillion-dollar pile of savings. Over the last year, on top of its regular spending, the federal government has appropriated a mind-boggling amount of money: a $2 trillion CARES Act, a $900 billion COVID-19 relief bill, and a $2 trillion American Rescue Plan. And President Biden wants to spend about $4 trillion more.

Surging this incredible amount of cash into an economy that is rapidly approaching capacity may have unintended and harmful consequences. But the Biden administration is either unconcerned about inflation or afraid of bringing it up in public.

Why? Well, one reason is that earlier warnings, after the global financial crisis in particular, didn’t seem to come true. (The inflation may have shown up in the dramatic ascent in prices of stocks and bonds, as well as in odd places such as the market for high-end art.) Another reason is that some economists think a little bit of inflation would be a good thing. But the main explanation may be related to status-quo bias: Inflation hasn’t been a driving force in our economic and public life for decades, and so we blithely assume it won’t be in the future.

Which is why an experienced leader worries about repeating the mistakes of the past. And yet, for a politician who came to Washington in 1973, Joe Biden has a lackadaisical attitude toward inflationary fiscal and monetary policy. Was he paying attention? It was the great inflation of the ’60s and ’70s, caused in part by high spending, the Arab oil embargo, and spiraling wages and prices in a heavily regulated and unionized economy, that helped ruin the presidencies of Gerald Ford and Jimmy Carter.

Inflation led to bracket creep, with voters propelled into higher income tax brackets by monetary forces over which they had no control. And bracket creep inspired the tax revolt, supply-side economics, and the Reaganite idea that, “In this present crisis, government is not the solution to our problem; government is the problem.” The eventual cure for inflation was the painful “shock therapy” administered by Federal Reserve chairman Paul Volcker and what at the time was the worst recession since the Great Depression.

Why anyone would want to repeat this experiment in the dismal science is a mystery. Biden, however, is fixated not on inflation but on repudiating the legacy of the man known for describing it as “always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.”

Milton Friedman, whose empiricism led him to embrace free market public policy, was the most influential economist of the second half of the 20th century. But Biden has a weird habit of treating Friedman as a devilish spirit who must be exorcised from the nation’s capital. For Biden, Friedman represents deregulation, low taxes, and the idea that a corporation’s primary responsibility is not to a group of politicized “stakeholders” but to its shareholders. “Milton Friedman isn’t running the show anymore,” Biden told Politico last year. “When did Milton Friedman die and become king?” Biden asked in 2019. The truth is that Friedman, who died in 2006, has held little sway over either Democrats or Republicans for almost two decades. But Biden wants to mark the definitive end of Friedman and the “neoliberal” economics he espoused by unleashing a tsunami of dollars into the global economy and inundating Americans with new entitlements.

The irony is that Biden’s rejection of Friedman’s teachings on money, taxes, and spending may bring about the same circumstances that established Friedman’s preeminence. In a year or two, the American economy and Biden’s political fortunes may look considerably different than when Janet Yellen blurted out the obvious about inflation. Voters won’t like the combination of rising prices and declining assets. Biden’s experts might rediscover that it is difficult to control or stop inflation once it begins. And Milton Friedman will have his revenge.


Biden Plans Will Wreck the U.S. Economy

By Peter RoffAmerican Action News

Photo by Gage Skidmore

As slogans go, “build back better – which Joe Biden used to define his 2020 bid for the presidency – lags well behind “Happy Days Are Here Again,” “Make American Great Again,” and “I Like Ike” in clarity and vision. It’s not even close to “It’s the economy, stupid,” the unofficial campaign mantra of Bill Clinton’s successful run in 1992. 

What Biden’s been doing during his first one hundred suggests even he didn’t understand what he meant. If he planned to create millions of new jobs – good jobs at good wages with good benefits as the Democrats used to say – the April jobs report indicates he’s failing. 

What’s gone unreported is that jobs that are coming back – and there are some – are coming back as lockdowns are ending. The economic downturn that appears now to be ending was not the product of an expected downturn in economic activity but the direct result of state-by-state lockdowns that forced businesses to curtail operations or close as part of an ill-conceived effort to slow the spread of the coronavirus. 

To supplement lost income, the Pelosi-led Congress joined first with Donald Trump and then with Biden to put the nation on relief. It’s no wonder, therefore, that business leaders are complaining they can’t find people to fill the jobs they have available once the Washington politicians incentivized joblessness instead of work by extending and enhancing unemployment benefits. It should be obvious that when you pay people not to work, they won’t work but somehow the experts in D.C. missed this.

Biden and the Democrats are nevertheless still all in. They said their $1.9 trillion “American Rescue Plan” would save the economy. Instead, it looks like it’s dragging it back down while inflation, a monster the U.S. Federal Reserve was thought to have tamed, is once again rearing its ugly head. The price of goods and services on which the American people rely are increasing, suddenly and sharply, as the impact of trillions in new spending during the pandemic comes home to roost.

Now, according to the Washington Post and other outlets, the Democrats are having trouble building support for their latest $4 trillion tax and spend program. Moreover, Democratic Congressional Campaign Committee Chairman Sean Patrick Maloney, D-N.Y., is now warning the White House its planned tax hike “could hurt vulnerable House Democrats up for re-election in 2022.”

It’s an important message for Biden – who’s apparently sending it back marked “Return to Sender.” The president, it seems, remains intent on raising taxes on as many people, goods, and services as he can convince Congress to accept.

Biden’s initial proposal to take the corporate tax rate from 21 percent to 28 percent landed with such a resounding “thud” he was forced to offer up 25 percent as a compromise. Even so, that would still move the United States back into an uncompetitive position with the world’s other industrialized economies. What is being omitted thus far from the discussion is that, when state-corporate levies are added in, the average U.S. combined national and subnational tax rises to 25.77 percent.

At 25 percent, what Biden has now put on the table, the combined rate would be 29.5 percent, higher than what is levied by China and higher than the average rate for countries in the OECD.

Moreover, says Americans for Tax Reform, a non-partisan group opposed to tax increases, “Workers, consumers, and shareholders will bear the burden of an increased corporate tax rate. Such a hike will cause businesses to invest less in the United States and more overseas, resulting in fewer job opportunities and lower wages for American workers:”

According to ATR:

A Treasury Department study estimated that “a country with a 1 percentage point lower tax rate than its competitors attracts 3 percent more capital.” This is because raising the corporate rate makes the United States a less attractive place to invest profits.   

A 2012 Harvard Business Review piece by Mihir A. Desai notes that raising the corporate tax lands “straight on the back” of the American worker and will see a decline in real wages.   

A 2012 paper at the University of Warwick and University of Oxford found that a $1 increase in the corporate tax reduces wages by 92 cents in the long term. This study was conducted by Wiji Arulampalam, Michael P. Devereux, and Giorgia Maffini and studied over 55,000 businesses located in nine European countries over the period 1996-2003.  

Even the left-of-center Tax Policy Center estimates that 20 percent of the burden of the corporate income tax is borne by labor.   

Biden’s insistence the corporate tax be raised, the cornerstone of his economic plan, will not create jobs, reduce debt, or bring increased revenues into the U.S. Treasury. It will however be a boon to almost every one of America’s competitors in the global marketplace. 


Biden’s One Hundred Days of Hubris

Presidents who misremember history are doomed to repeat it

By Matthew ContinettiThe Washington Free Beacon

President Joe Biden / Getty Images

President Biden’s address to a joint session of Congress underscored this administration’s left turn. The speech was a laundry list of progressive priorities in domestic, foreign, and social policy with a price tag, when you add in the American Rescue Plan, of some $6 trillion. Biden’s delivery, heavy with improvisation, only slightly enlivened a prosaic and unoriginal text. Biden repeated lines from both Bill “the power of our example” Clinton and Barack “the arc of the moral universe” Obama. But it wasn’t just the words themselves that made me think of Biden’s most recent Democratic predecessors. The scope of his plans, increasing government’s role in just about every aspect of American life, also brought to mind the Democrats who tried to govern as liberals after campaigning as moderates.

I’m old enough to recall the last president who vanquished Reaganism. Obama spoke of “fundamentally transforming the United States of America,” and came to Washington in 2009 with the aim of changing the trajectory of the country just as Ronald Reagan had done three decades earlier. Shortly before his one hundredth day in office, he delivered a speech at Georgetown University where he promised to lay a “new foundation” for the country. His friends in the media hailed him as the second coming of Franklin Delano Roosevelt. “Barack Obama is bringing back the era of big government,” historian Matthew Dallek and journalist Samuel Loewenberg announced in the New York Daily News.

We know how that turned out. The GOP captured the House in 2010. By the time Obama left office, Republicans had full control of Washington and were dominant in the states. Reaganism survived. And now, 12 years later, the cycle is repeating. This time it’s President Biden who is likened to FDR. It’s Biden who is said to have interred the idea of limited government. It’s Biden who is marking his first 100 days in office with plans to spend trillions on infrastructure, green energy, health care, and elder and child care. The political setbacks of the Obama years didn’t temper Biden’s ambitions. They intensified his desire to leverage narrow congressional majorities into sweeping expansions of the welfare state.

Why does Biden think he can avoid Obama’s fate? Like a good lawyer, he has a theory of the case. It goes like this: Neither Bill Clinton nor Barack Obama spent enough money to ensure a strong economic recovery. They didn’t emphasize jobs above all else. Their caution was responsible for Democratic losses in the midterm elections. And all it takes is GOP control of one chamber of Congress to spoil a liberal revival. By opening the floodgates of federal spending, Biden hopes to deepen and extend the post-coronavirus economic boom. Growth and full employment will prevent a Republican takeover. And a second Progressive Era will begin.

The problem with this theory is its selective misreading of history. It wasn’t just the economy that sank the Democrats in 1994 and 2010. It was independent voters who turned against presidents who campaigned as moderates but governed as liberals. Nor did rising unemployment stop Republicans from picking up seats in 2002. And an economic boom didn’t save the House GOP in 2018. In every case, assessments of the president—among independent voters in particular—mattered more than dollars and cents. By committing himself to the idea that massive spending will safeguard the Democratic Congress, Biden may be inadvertently guaranteeing the partisan overreach that has doomed past majorities.

Biden doesn’t give enough credit to the record of his Democratic predecessors. The unemployment rate was 7.3 percent in January 1993 when Bill Clinton was inaugurated. By November 1994, it had fallen to 5.6 percent. Meanwhile, the economy grew by 4 percent in the third quarter of 1994. Nevertheless, the Republicans won control of the House for the first time in 40 years and the Senate for the first time in 8 years. Why? Because Republicans won independents 56 percent to 44 percent. Voters who had backed Ross Perot in 1992 swung to the GOP. Voters’ top priority in the exit poll wasn’t jobs. It was crime. And the failure of Clinton’s unpopular health plan didn’t help.

The 2010 midterm had similar results. The economy, while nothing to brag about, was nonetheless improving. Unemployment had been falling since October 2009. Growth, though anemic, had also returned. Republicans gained 63 seats in the House and 6 in the Senate because independents rejected President Obama’s governance. They backed Republicans 56 percent to 37 percent—an 8-point swing against a president they had supported in 2008. Why? Part of the reason was the economy. But the Affordable Care Act was also significant. Health care was voters’ second priority in the exit poll. A 48 percent plurality called for Obamacare’s repeal.

Biden’s theory also omits the contrary examples of recent Republican presidents. In November 2002 the unemployment rate was higher, and growth lower, than in November 2000. But the GOP had a good year anyway thanks to President Bush’s high post-9/11 approval ratings and a tough but effective campaign on national security.

The 2018 midterm is further proof that campaign results are not a direct function of economic performance. Democrats won control of the House despite full employment and sustained growth. Independents, who had narrowly backed President Trump in 2016, turned against him and voted for Democratic candidates by a 12-point margin. No mystery why: A 38-percent plurality of voters said they were voting to oppose Trump, whose strong disapproval rating was at an incredible 46 percent in the exit poll. Health care ranked as the top issue, with voters recoiling at the prospect of an Obamacare replacement that failed to cover preexisting conditions.

Not only do the data show that the economy is less important to the midterms than many assume, they are also a reminder that the first hundred days do not define a presidency. The fate of a president and his party depends more on his ability to maintain popularity and on his performance during unanticipated crises. While Biden’s approval ratings continue to be positive and his disapproval low, there are some warning signs: His approval among independents ranges between the mid- to high-50s, and a majority of voters disapproves of his handling of migration along the southern border. Focused on his grand plans for the economy, Biden might dismiss voter concerns over immigration, crime, and inflation until it is too late.

Sure, Biden might avoid making Barack Obama’s mistakes. But he has plenty of time to make mistakes of his own.


RNC Brackets Biden’s Speech – Calls Presidency a Failure

By Peter RoffAmerican Action News

In anticipation of President Joe Biden’s first-ever speech to Joint Session of Congress, the Republican National Committee released a list of what it referred to as “failure after failure” to mark his first 100 days in office.

“Here is just a shortlist,” the RNC said, of what it had identified as Biden’s “many broken promises, disastrous policies, and dangerous proposals: on a variety of issues including:

Joe Biden’s first 100 days have been marked by failure after failure.

Here is just a SHORT list of his many broken promises, disastrous policies, and dangerous proposals:

Biden’s Open Borders Agenda Created A Border Crisis

1. Biden’s open borders agenda has created a border crisis.

2. Biden tried to suspend deportations, weakening immigration enforcement.

3. He has obstructed border wall construction, including through his budget request, which would eliminate all funding for the border wall. Experts say border walls work, and Biden’s construction obstruction is literally throwing the border wide open.

4. Border state Democrats warned Biden’s White House about a border crisis fueled by his polices but the administration ignored their warnings.

Biden’s Border Crisis Boomed

5. Now, experts estimate 1,000 illegal immigrants are escaping into the U.S. each day during Biden’s border crisis.

6. There were 172,331 border apprehensions in March, 5 times the number in March last year.

7. Nearly 19,000 unaccompanied children were taken into custody in March, the highest monthly total ever recorded.

8. Customs and Border Protection forecasts 184,000 migrant children will cross the border by the end of FY 2021, which would be the highest number ever.

9. There has been a 233% increase in fentanyl seizures at the southern border from this time last year.

10. Thanks to Biden’s border wall obstruction, smugglers are exploiting gaps in the wall that were previously set to be built.

11. Officials warn of a “boom time for gangs,” traffickers, and smugglers as they take advantage of Biden’s border crisis.

Biden’s Crisis Of Leadership On The Border

12. In response, Biden has repeatedly tried to gaslight the American people about the seriousness of the crisis.

13. When Biden finally admitted there is a “crisis that ended up on the border,” the White House then insisted that is not their official position in a completely insane walk-back, and that “children coming to our border… is not a crisis.”

14. Biden still does not have any plans to visit the border.

15. Kamala Harris laughed when she was asked if she would visit the border, and still has not visited the border even after being named Biden’s crisis manager.

Border Officials Struggle To Cope With Biden’s Disastrous Agenda

16. The Biden administration is releasing some illegal immigrants caught crossing the border without a court notice, and sometimes without any paperwork at all.

17. Border facilities are “stretched beyond thin” because of the crisis.

18. The Donna, Texas facility, one of the few facilities exempted from Biden’s media blackout, is at more than 16 times its capacity. Even Dr. Fauci admitted that packed crowds of migrant children is a “major concern.”

19. To deal with the surge, the Pentagon was forced to approve multiple military bases to house unaccompanied migrant children.

Biden Is Doubling Down On His Border Failures

20. Biden is restricting media access at the border to hide the true extent of the crisis and dodge accountability. When asked why his administration is denying press access, Biden conceded he is purposefully waiting to provide transparency at border facilities.

21. Instead of reversing course, Biden has doubled down on his failing open borders policies.

22. Biden has even removed civil penalties for illegal immigrants for a “failure-to-depart.”

Biden’s Anti-Energy Agenda Is Destroying Jobs

23. Biden rejoined the Paris Climate Agreement, which could destroy anywhere between 400,000 and 2.7 million jobs.

24. On day one, Biden abandoned Keystone XL pipeline workers, forcing thousands into unemployment with the stroke of a pen. American workers and families effected by his job-killing decision are still struggling to get by.

25. We are still waiting for Biden to announce a plan for these workers. Psaki said she had “nothing more” when asked about how Biden plans to replace oil and gas jobs killed by his energy policies.

26. When asked about the workers forced out of work by Biden’s policies, administration officials have dismissed concerns, saying they need “different [jobs],” “different education,” and that there are “jobs that might be sacrificed.”

27. While Biden implements policies to kill American jobs, he is kowtowing to China and Russia so they cooperate with his environmental agenda.

28. Biden is blocking new oil and gas drilling on federal lands, which if kept in place threatens millions of jobs.

29. Biden nominated an Interior Secretary that believes oil and gas extraction on public lands should be permanently banned.

Biden Is Proposing Massive Job-Destroying Tax Hikes

30. Biden is proposing a job-destroying $2 trillion tax hike to fund a Green New Deal-style “infrastructure” package, which studies say would threaten 159,000 American jobs and lower workers’ wages.

31. Biden’s proposed tax hike would raise the combined tax rate on U.S. businesses to the highest of any country in the G7 or OECD.

32. Biden’s first tax proposals are already breaking his campaign pledge, “If you make less than $400,000, you won’t see one single penny in additional federal tax.”

33. According to reports, Biden is planning to propose even greater tax hikes, raising taxes on capital gains to over 43%.

34. According to administration officials, he is showing an increased openness to a carbon tax.

Biden’s Proposal Is Not An Infrastructure Package

35. Only 7% of the spending of Biden’s proposed “infrastructure” package is for roads, bridges, highways, airports, waterways, and ports.

36. His administration has lied about the job creation that’s possible under his infrastructure plan. Even CNN and The Washington Post called Biden out on misleading the American people on job predictions.

37. In terms of Biden’s broader Green New Deal agenda, The Washington Post and Associated Press have noted that many of Biden’s proposals will destroy more jobs than they create, and create jobs that pay less than the jobs they destroy.

Biden Brings Back The Climate Hypocrites

38. Biden has brought the left-wing swamp to run his climate policy, including private plane hypocrite John Kerry.

39. The Biden administration is promoting a business that Energy Secretary Jennifer Granholm is actively invested in to the tune of millions of dollars. Granholm is set to profit off of the hundreds of billions of dollars of taxpayer money Biden wants to spend as part of his infrastructure package.

  • At a climate summit last week, Biden touted that Granholm was in charge of his administration’s technology investment even as she continues to own this stock.

On Schools, Biden Has Put Special Interests First

40. Biden repeatedly campaigned with American Federation of Teachers boss Randi Weingarten, who is leading the anti-science charge to keep America’s schools closed. Now that Biden is president, he has refused to call out the group.

41. Biden has caved to Democrat special interest groups at the expense of millions of children and families across America, even though the science shows that keeping schools closed has devastating effects on the mental healthsocial and economic situation, and academic achievement of children.

42. His stimulus bill put special interests before schools. The $1.9 trillion wish list only spends $6 billion, 0.3% of the bill, on K-12 schools this fiscal year with NO REQUIREMENT that they reopen.

43. He has slow-rolled a return to normalcy for Americans while doing almost nothing to stop the spread of COVID on the border.

44. Biden has conceded he has no plan to open high schools.

Biden Is Refusing To Speak Out Against The Growing Anti-Police Rhetoric In The Democrat Party.

45. The Biden administration has refused to condemn anti-police comments from Democrat members of Congress.

46. Press Secretary Jen Psaki refused to condemn Maxine Waters’ inflammatory comments around the Chauvin trial that “we’ve got to get more confrontational.”

47. When Nancy Pelosi repeatedly defended Waters’ call for confrontation, Biden kept silent.

48. When every House Democrat voted to endorse Waters’ call for protestors “to get more confrontational,” Biden refused to speak out.

Biden’s Flip On Court Packing

49. Even though Biden criticized court packing for decades (check out these comments from 19832005, and 2019), he has refused to speak out against House and Senate Democrats abandoning decades of bipartisan agreement by proposing court packing legislation.

50. He is even going a step further and actually establishing a court-packing commission.

Biden Says Goodbye To Bipartisanship & Hello To Extremism

51. Despite his campaign promises Biden is rejecting bipartisanship in favor of a hyper-partisan process to pass trillions in spending without Republican support.

52. Even the left-wing New York Times editorial board and members of his own party are calling out Biden for refusing to reach across the aisle.

53. He has resorted to governing through executive order, issuing far-left decrees at breathtaking speed.

54. In 2005, then-Senators Barack Obama and Biden both argued against getting rid of the filibuster. Now, Biden is showing an openness to eliminating it.

55. Biden declared that “no amendment to the Constitution is absolute” when discussing the 2nd amendment.

56. Biden is filling his administration with far-left activists, including important positions at the Justice DepartmentHHS, and ATF.

57. Despite promising unity and compromise on the campaign trail, the only unity Biden has shown is with Xi Jinping and Vladimir Putin. He has spoken to Xi and Putin more times than Republican leaders Mitch McConnell and Kevin McCarthy.

Biden’s Georgia Boycott

58. Biden has led a misinformation campaign about Georgia’s election integrity law. Biden got 4-pinnochios from The Washington Post for lying about the Georgia election law.

59. Despite being called out on his lies, Biden’s administration DOUBLED DOWN on and refused to disavow the incorrect claim.

60. Aided and abetted by misinformation peddlers like Stacey Abrams, Biden encouraged a boycott of Georgia.

61. Thanks to Biden’s lies about a law that actually expands voting opportunities, Georgia’s Cobb County is set to lose more than $100 million in tourism revenue.

62. What’s worse, Biden supported the boycott KNOWING it would hurt Georgia’s businesses and workers the most.

  • Biden on April 6: “The other side to it too is when they in fact move out of Georgia, the people who need the help the most, people who are making hourly wages, sometimes get hurt the most.”
  • Biden Advisor Cecilia Rouse even said that hurting workers and businesses “was the point.”

63. After Democrat Raphael Warnock admitted to spreading misinformation about the Georgia law, Biden is rallying with the senator in Atlanta tomorrow. Biden should apologize to Georgians instead.

Biden Backs The Democrats’ H.R. 1 Power Grab

64. Biden is backing the Democrats’ H.R. 1 power grab that, among other things, eviscerates commonsense voter ID provisions that 75% of American support.

65. By supporting H.R. 1, Biden is supporting a bill that would force states to allow paid party operatives to harvest ballots.

66. H.R. 1 would also threaten freedom of speech by turning the FEC into a partisan organization.

Biden Embraces Far-Left Spending Proposals & A Minimum Wage

67. Biden has dedicated trillions in wasteful spending for progressive pet projects.

68. He passed hundreds of billions of dollars for a blue state bailout. New York is now set to spend $2 billion for taxpayer-funded checks for illegal immigrants.

69. Biden is backing a $15 federal minimum wage mandate, which the CBO says could eliminate up to 3.7 million jobs.

70. He is pushing defense cuts in his budget.

Biden Is Caving To America’s Enemies

71. Biden has refused to criticize Xi Jinping, even saying he didn’t “mean it as a criticism” when he called Xi undemocratic.

72. When discussing China’s human rights abuses, Biden downplayed those concerns, saying “culturally there are different norms.”

  • That disgusting dismissal came after Biden’s Secretary of State Tony Blinken admitted the Chinese are committing genocide against the Uighurs.

73. Biden is failing to confront China, with Psaki even saying Biden is “not in a rush” to counter China.

74. And in yet another broken campaign promise, Biden has not confronted China over COVID-19’s origins

75. In a patten of appeasing America’s enemies, Biden is caving to Iran.

Biden Is Now A Pro-Abortion Extremist

76. Biden rescinded the Mexico City policy, forcing American taxpayers to fund abortions overseas.

77. Biden’s HHS Secretary Xavier Becerra has a history of attacking religious freedom, and during his hearing, he refused to rule out using taxpayer funds to pay for abortions and defended his past votes supporting the horrific practice of partial birth abortion.

Obamacare & Biden’s Government Takeover Of Health Care

78. Biden has repeated Barack Obama’s “lie of the year” on health care, and now as president he is bringing those lies back to Washington by working to reinstitute Obama’s terrible health care polices.

79. Biden has pushed to expand the worst policies of Obamacare in his first 100 days. He even wants to bring back the individual mandate, a tax that primarily hits poor Americans.

80. In his time as president, he has worked to expand Obamacare as he proposes a further government takeover of healthcare. A Navigant study found that Biden’s health plan could threaten more than 1,000 rural hospitals across 46 states.

81. As Biden’s border crisis booms, he refuses to walk back his pledge that his government-run health plan will be open to illegal immigrants.

On Operation Warp Speed, He’s The Lying, Plagiarist In Chief

82. Biden keeps lying about vaccines, and his administration still pushes the debunked claim that there was no vaccine plan when he came into office.

82. Thanks to the previous administration’s development and distribution plan under Operation Warp Speed, which Biden has falsely tried to claim credit for, millions of Americans have been vaccinated.

84. In September President Trump pledged: “Millions of doses will be available every month, and we expect to have enough vaccines for every American by April.” It tuns out, he was right, and we have Operation Warp Speed to thank.

85. Biden has failed to apologize for his statements spreading doubt about the vaccine which he made on the campaign trail last year.

Biden’s COVID $1.9 Trillion Bill Was A Far-Left Boondoggle

86. Biden’s $1.9 trillion boondoggle was not a “relief” bill.

  • Only 9% will be spent on directly fighting the coronavirus.
  • Only 1 % will be spent on vaccines.
  • Only 0.3% will be spent this fiscal year on K-12 schools.
  •  Even Democrat Rep. Adriano Espaillat, the 8th most liberal member of the House and a member of the Congressional Progressive Caucus, conceded that he’s “not comfortable” with the pet project spending, and called it “embarrassing.”

87. Through Biden’s boondoggle, Democrats insisted on sending nearly $2 billion dollars in stimulus checks to prisoners, including violent felons like the Boston Marathon Bomber. Democrats blocked an amendment to restrict the stimulus payments when ramming through their partisan legislation.

88. In fact, hundreds of billions of the Democrats’ “relief” will not be spent for up to a decade from now.

Republican Coronavirus Policies Worked, Now Biden Wants To Rewrite History

89. Biden is trying to rewrite history on the coronavirus. After criticizing the Paycheck Protection Program and repeatedly visiting businesses that received PPP loans under President Trump, Biden baselessly claimed credit for their success.

90. After gaslighting the American people during the campaign, he proceeded to plagiarize the Republican’s coronavirus response at every turn, all while lying about the Trump administration’s robust COVID response.

91. Although he campaigned on a secret plan to “shut down the virus,” he now admits that he had no secret plan.

Biden Gives The Worst Governors In The Nation A Pass

92. Biden has failed to take responsibility for being one of Andrew Cuomo’s biggest cheerleaders.  Biden even declared: “Your governor in New York’s done one hell of a job. I think he’s the gold standard.” What was Biden declaring the “gold standard?” Anti-science nursing home orders that led to thousands of deathsrewriting reports to hide the higher death toll, and a cover-up in the face of a federal investigation so the data would not be “used against” the Cuomo administration.

93. During the campaign, Biden repeatedly applauded Whitmer’s terrible approach to the coronavirus, and now as we keep learning more about how awful her response truly was, he has refused to backtrack his endorsement of Whitmer.  The policies Biden endorsed? Renewing devastating nursing home orders three timesrefusing to release the data on nursing home deaths, and buying the silence of her former health director with a $150,000 taxpayer-funded confidentiality agreement.

94. Biden won’t insist hypocritical governors like Gavin Newsom open their economies. America can only recover economically if we allow our businesses to open, but instead of standing up to governors whose lockdowns are hurting Americans, Biden continues to take a backseat.

An Opaque Administration Where One Has To Wonder Who Is Setting Policy

95. The Biden administration is one of the least transparent in history, continually ignoring questions from the press.

96. Joe Biden holds the modern record for the number of days it took a president to hold his first press conference.

97. Biden has not kept his promise on ethics agreements, facing mounting pressure to disclose the ethics agreements of his appointees.

98. After establishing a cap on refugees not in line with the desires of his far-left base, Biden then backtracked and claimed that he didn’t say that the cap was “justified.”

99. Remember when Biden was silent as his press secretary claimed for days that his reopening goal was only 50% of the schools for one day a week? Was he just not paying attention all that time?

  • Biden later contradicted his own press secretary on reopening schools, claiming she made a “mistake.”

Joe Biden’s presidency has been one stumble after another.  It has only been 100 days, and the American people are already paying a steep price for his failures


Biden trade policy should focus on International Trade Commission

By Peter RoffImperial Valley Press

When you break it down, Donald Trump’s trade policy was simple. “No more bad deals,” he’d say while flexing America’s economic muscle and bringing miscreant trading partners back into line.

Joe Biden, on the other hand, has yet to make his trade priorities clear.

There are a few things we do know. One, he’s eager to reunite with partners on the world stage. With the pandemic and climate change as the centerpieces of his administration’s international efforts, we can expect trade pacts to be less important. Two, the president says he wants to fix or build back America before he launches any trade initiatives. Three, he wants to be sure trade initiatives will be “worker-centered” but hasn’t explained what that would look like.

Going forward, the priorities for U.S. trade policy overall ought to be bringing U.S. jobs and manufacturing back from overseas and encourage emerging industries to develop new technologies here in the United States. Internationally, as an example, the White House must convince much of the world to eschew products made by Chinese-owned Huawei when building out 5G networks.

At home, the president and his trade team need to make sure that the innovative activities of companies creating emerging technologies on which we’re all dependent are not being crushed by government bodies like the U.S. International Trade Commission, a six-member, independent, quasi-judicial federal agency that settles certain kinds of trade disputes.

Of late, the commission is a place where non-practicing entities (they’re more commonly called “patent trolls”) are violating patent rights. Through expensive and extensive litigation, patent trolls ask the International Trade Commission to find that a company manufacturing and innovating some product is making illegitimate use of a non-practicing entity’s intellectual property — and, because of it, any device using said infringed-upon patents must be banned from the U.S. marketplace.

That is exactly what Swedish telecom giant Ericsson is asking the commission to do to Samsung and a range of other smart devices and its 5G-related infrastructure equipment. Ericsson is a telecom infrastructure equipment manufacturer, but these days close to a third of its operating profit comes from IP licensing.

Ericsson is currently negotiating with Samsung to renew a patent cross-licensing agreement. Instead of continuing to negotiate, Ericsson is using the threat of a massive U.S. import ban on Samsung products to try to get its way.

If Ericsson’s backup strategy prevails and Samsung devices including cell phones and tablets are excluded from the U.S. market, or if it gets the International Trade Commission to block one of its key competitors in the 5G infrastructure market, it would be a disaster. The digital divide would widen just as the Biden Administration is proposing trillions in new infrastructure spending including broadband.

Spending billions of taxpayer dollars on broadband while at the same time excluding Samsung infrastructure equipment and devices from the market makes no sense. The International Trade Commission will have given Ericsson dominant market power in 5G infrastructure equipment and limited device choices for U.S. consumers. It would be shockingly counterproductive to give Apple a virtual monopoly on sales of sophisticated phones while opening the door to Chinese manufacturers like Huawei, ZTE or their home-grown rivals to service the rest of the U.S. market at a time when the U.S. government is working to prevent Chinese tech attacks on U.S. information security.

There is a better way to settle what is essentially a dispute over patent royalties – the traditional court system.

Ericsson took its complaints to the International Trade Commission because it knows that an exclusion order would nearly cripple its rival. At a minimum, it would give it tremendous negotiating leverage.

It’s time for the president to propose and for Congress to reform the International Trade Commission by addressing weaknesses that enable these kinds of manipulative and illegitimate cases.


Right Now, Infrastructure Policy Should Focus on Fixing and Maintaining What We Have

By Marc ScribnerReason Foundation

Right Now, Infrastructure Policy Should Focus on Fixing and Maintaining What We Have
Photo 25818448 © Frank Gärtner – Dreamstime.com

The COVID-19 pandemic introduced an unprecedented amount of uncertainty into transportation infrastructure planning. Travel fell significantly across all modes and remains depressed, particularly for shared transportation modes such as commercial air travel and mass transit. Changes in travel behavior may persist long after the coronavirus pandemic finally ends, particularly for commuting trips given that a large share of employees may continue working from home. Given this uncertainty, investments in new infrastructure meant to provide service for decades into the future are incredibly risky. As Congress considers surface transportation reauthorization in this low-confidence era, it should adopt a preference for the lowest-risk class of projects: maintaining and modernizing existing infrastructure under a “fix it first” strategy.

COVID-19 led to dramatic changes in travel behavior. By April 2020, when much of the country was under stay-at-home orders, road traffic fell 40%, mass transit ridership fell 95%, and air travel fell by 96%. Since then, road travel has largely recovered, with vehicle-miles traveled back to within 10% of the pre-pandemic baseline. 

However, travel by shared transportation modes, such as commercial aviation and mass transit, was still down by approximately two-thirds year-over-year by the end of 2020, according to data collected by the Bureau of Transportation Statistics. 

Travel is expected to continue its rebound as the number of people vaccinated grows and the pandemic wanes, but changes in travel behavior driven by factors such as the rise of remote work are likely to persist. To what degree pandemic-spurred changes in travel demand are permanent is unknown at this time, and this uncertainty has rendered pre-pandemic infrastructure planning and investment models nearly useless as accurate guides to the future.

While the drop in transportation demand and the fixed nature of transportation infrastructure supply has significantly reduced the productivity of existing transportation infrastructure, some are calling for large new investments by claiming that the nation’s infrastructure networks are crumbling. However, a review of the available evidence suggests a different and more complicated picture of infrastructure asset quality. 

For example, Reason Foundation’s most recent Annual Highway Reportfound, “Of the Annual Highway Report’s nine categories focused on performance, including structurally deficient bridges and traffic congestion, the country made incremental progress in seven of them.” 

Similarly, a June 2020 National Bureau of Economic Research (NBER) working paper on transportation infrastructure concluded, “Not only is this infrastructure, for the most part, not deteriorating, much of it is in good condition or improving.”

However, Reason’s Annual Highway Report shows large variation across states and the NBER analysis is limited in that it fails to account for transit infrastructure beyond rolling stock. Rail guideway assets such as tracks and signals have deteriorated in many cities. To be sure, there are sizeable transportation infrastructure needs in the United States.  Reconstructing the Interstate Highway System alone has been estimated by the National Academy of Sciences to cost at least $1 trillion over two decades and mass transit’s maintenance backlog likely exceeds $100 billion.

Given all we know about existing transportation infrastructure needs and the uncertainty surrounding future travel activity, Congress should adopt a risk-minimizing “fix it first” strategy to restore our existing transportation assets to a durable state of good repair. This approach has been endorsed by organizations and think tanks across the political spectrum, from the progressive Transportation for America to the free market Competitive Enterprise Institute

Building new infrastructure that will last three to five decades based on pre-pandemic travel modeling is fundamentally imprudent at this time. Physical capacity expansions such as highway widening and new rail lines should at the very least face heightened scrutiny from policymakers until there is more confidence in post-pandemic travel behavior that can be used in transportation infrastructure planning and investment decisions.


Giveaways Disguised As Infrastructure

By Richard A. EpsteinHoover Institution

This past week, President Joe Biden unveiled his new $2 trillion infrastructure plan, scheduled for implementation over the next eight years. He delivered a pep talk about it before a union audience in Pittsburgh: “It’s a once-in-a-generation investment in America. It’s big, yes. It’s bold, yes, and we can get it done.” One central goal of his program is to tackle climate change by reaching a level of zero net carbon emissions by 2035. Many of Biden’s supporters gave two cheers for this expansion of government power, including the New York Times columnist Farhad Manjoo, who lamented that the program is too small to work, but too big to pass. Huge portions of this so-called infrastructure bill actually have nothing whatsoever to do with infrastructure.

In one classic formulation by the late economist Jacob Viner, infrastructure covers “public works regarded as essential and as impossible or highly improbable of establishment by private enterprise.” Classical liberal theorists like Viner believe it is critical to identify a limited scope of business activity appropriate for government. And even here, while government intervention may be necessary to initiate the establishment of an electric grid or a road system, oftentimes the work is completed by a regulated private firm, overcoming government inefficiency in the management of particular projects.

Biden’s use of the term “infrastructure” is merely a rhetorical flourish, the sole purpose of which is to create an illusion that his proposed menu of expenditures should appeal just as much to defenders of small government as it does to progressive Democrats. A quick look at the proposed expenditures shows that they include large transfer payments to preferred groups that have nothing to do with either infrastructure or climate change. Consider this chart prepared by NPR, which breaks down the major categories of expenditure:

“Home/community care” and “affordable housing” constitute over 30 percent of the budget at $613 billion. Much of this money is for child and elder care. Both are traditional forms of transfer payments, which are already available in abundance. Why more? Why now? After all, these cash transfers are not taxable compensation for work done. They increase the motivation to stay out of the workforce, in fact, and thereby reduce the size of the tax base as overall expenditures are mushrooming. Moreover, large doses of home/community care are difficult to target exclusively to the needy. A correct analysis seeks to determine whether such payments are directed toward the truly needy and whether they induce people to leave the workforce to become tax recipients rather than taxpayers.

A similar analysis applies to affordable-housing expenditures, both for renters and owners. In the Biden plan, those expenditures operate as a combined program of disguised subsidies and disguised price controls. An affordable-housing mandate typically requires a developer to build some fraction of total units held for sale or lease at below-market rates to individuals who fall within certain broad income categories. In some programs, the losses to the developer may be offset in part by government subsidies.

These programs are not only costly but also a massive disincentive to new construction, especially when the fraction of affordable units is set too high, at which point the developers cannot recoup their losses on the affordable units by their profits on their market-rate units. A far more sensible regime that reduces both rent controls and subsidies over time allows housing resources to be allocated cheaply and sensibly by market forces. Housing markets are like all others insofar as people are willing to spend other people’s money for their own benefit, which leads to overconsumption. Similarly, price controls reduce the incentive to produce housing that people want, thereby creating systematic shortages, and the long queues and political intrigues that accompany them.

The rest of the initiative’s priorities include investments in electric vehicles at $174 billion, roads and bridges at $115 billion, the power grid at $100 billion, public transportation at $85 billion, and railways at $80 billion. There is absolutely no reason to believe that these expenditures will be made in a responsible fashion, given the political forces that will descend on Washington if the proposed funds become available. Nor is there anything inherently desirable about electric vehicles, for example, that merits their subsidization. To be sure, there is a constant risk of pollution from vehicles powered by fossil fuels, but the correct response is to tax the externality in order to reduce its incidence, not to guess which alternative technology merits a subsidy. Indeed, it is especially wrongheaded to subsidize both electric cars and public transportation when they should be allowed to compete with each other. More generally, any massive subsidy for energy investment is a bad idea for the same reason that it’s a bad idea for housing: it leads to overconsumption, such that total social costs exceed total social benefits.

Shifting to wind or solar energy—both centerpieces of the Biden strategy—is also a bad idea. Those energy sources are too precarious to make more than a dent in the overall energy market. As the US Energy Information Administration reports, fossil fuels account for about 80 percent of total energy production in the United States, as well as raw materials for making “asphalt and road oil, and feedstocks for making the chemicals, plastics, and synthetic materials that are in nearly everything we use.” Keeping crude oil and natural gas in the ground is not a winning strategy. Indeed, relying on wind and solar carries risks, as these forms of energy can respond poorly in extreme situations, a reality that became clear with the breakdown of the Texas power grid recently during an extreme cold snap.

The correct path to environmental soundness lies in the more efficient production and consumption of fossil fuels. This is why one of the best ways to deal with the externalities of fossil fuel consumption, such as air pollution and spills, would be to allow the development of the Keystone XL pipeline. Given how central fossil fuels are to the energy market, any small improvement in their production and distribution will result in enormous benefits. The effort to wean an entire economy off fossil fuels over the next two decades will provide short-term dislocations without any durable long-term relief.

The dubious nature of the Biden plan is made still more evident by looking at its rickety financing. As always, the two favorite targets for new taxation are increases in the corporate income tax and the income tax rates for wealthy individuals. The claim is that these targeted taxes will spare the rest of America from financial pain. Senator Elizabeth Warren made that case for her ultra-millionaire tax, saying her wealth tax would have no impact on 99.9 percent of the population. But that is one strong reason to reject her program or others like it: it encourages majorities to confiscate the wealth of the most productive. Those majorities, of course, would be far less eager if their own taxes were to rise at the same time.

Biden has rightly rejected that approach, but the price of his new, once-in-a-generation expenditure is an increase in the overall corporate tax rate from 21 to 28 percent. Yet this proposal has dangerous consequences too. The United States constantly competes with other nations for corporate investment. Biden’s policy will reduce the level of foreign investment in the United States while simultaneously increasing the level of American investment abroad. This in turn will reverse the beneficial effects of the Trump corporate tax cuts, which notably translated into higher wages. Additional taxes on the wealthy will barely make a dent in the anticipated financial shortfall.

Worse still, it is simply false advertising to say that even if these deferred revenues could be generated, they would cover the full costs of the Biden program. The public expenditures will take place over an eight-year period. As NPR reports, the government plans to keep the corporate tax in place for fifteen years to balance the books. That move will require the treasury to borrow money to cover the anticipated revenue shortfall. And there is no reason to think that the government will meet any of its revenue targets, let alone be able to find the revenues to cover the items on the Biden agenda.

At this point, Republican skepticism about the plan may perhaps peel away some Democratic support. To avert that result, Biden would be well-advised to unbundle the strange bedfellows in his omnibus bill, so that each component can be evaluated on its own merits. The likely result is a smaller program with better outcomes, both for Biden and everyone else.


Biden’s Infrastructure Plan a Boon for Unions

By Graham PiroThe Washington Free Beacon

President Joe Biden’s multitrillion-dollar infrastructure proposal includes a major union handout that would overhaul labor law in the United States.

The White House released a fact sheet Wednesday detailing Biden’s proposed $2 trillion infrastructure package that includes a call to pass the PRO Act, which is currently languishing in the Senate after passing the House. The law would overturn right-to-work laws in 27 states and expand the ability of the National Labor Relations Board to fine employers that violate employees’ organizing rights.

“[Biden] is calling on Congress to ensure all workers have a free and fair choice to join a union by passing the Protecting the Right to Organize (PRO) Act, and guarantee union and bargaining rights for public service workers,” the fact sheet states. The sheet also says that increased union membership can increase worker productivity. The labor overhaul, however, would overturn existing laws in more than half of the states in the country that allow employees to work without requiring union membership.

Biden’s infrastructure plan would also provide a massive handout to the Service Employees International Union by allocating $400 billion for in-home Medicaid health care. In many Democratic-run states, in-home Medicaid health workers are forced to join the SEIU, a major Democratic donor and labor union with nearly two million members.

Critics of the proposal said Biden is using the infrastructure package as “cover” to pass pro-union reform.

“By using his massive infrastructure proposal as cover for denying millions of American workers their right to decide for themselves whether or not to subsidize union activities, President Biden is proving that his top priority is really building the forced-dues empire of his union boss political allies,” Mark Mix, president of the National Right to Work Committee, said. “The so-called PRO Act will eliminate by federal fiat all 27 state right-to-work laws and give union bosses a whole host of other new coercive tools to force workers into compulsory dues payments and one-size-fits-all union ‘representation.'”

The infrastructure bill, which Democrats have called “must-pass” legislation, may be the best vehicle for advancing the controversial PRO Act. Biden’s strong endorsement of the labor law has not helped it advance through the Democratic-controlled Senate. Majority Leader Chuck Schumer (D., N.Y.) reportedly told AFL-CIO leaders that he would not bring it to the floor without 50 cosponsors, according to the Intercept. Sens. Joe Manchin (D., W.Va.), Mark Kelly (D., Ariz.), Kyrsten Sinema (D., Ariz.), Mark Warner (D., Va.), and Angus King (I., Maine) have yet to back the package.

Other union watchdogs said the Democratic holdouts are right to be skeptical of the bill. Charlyce Bozzello, communications director at the Center for Union Facts, said the passage of the act could harm workers who are struggling to recover from the economic impacts of the coronavirus pandemic.

“Far from providing a ‘free and fair’ choice for workers, the PRO Act is nothing more than a union wishlist,” Bozzello said. “The bill does little to support American workers who are struggling to get back on their feet after the pandemic. Instead, it would consolidate more control with our country’s labor unions, force more employees to pay union dues as a condition of employment, override the right to a secret ballot election, and threaten the livelihood of countless freelancers.”

Biden unveiled the infrastructure package at a speech in Pittsburgh on Wednesday. He urged quick congressional action on the package, which Democratic lawmakers have said they want to pass by Independence Day. He also said that he wants to include Republicans in negotiations, but other Democratic leaders have indicated that they could push the infrastructure package through via the budget reconciliation process.

The passage of the PRO Act would likely require the elimination of the Senate filibuster, however, which would allow the Senate to move forward on a number of other Democratic legislative initiatives. Manchin and Sinema have said they oppose ending the filibuster.

The Biden administration did not respond to a request for comment.


A Taiwan Crisis May Mark the End of the American Empire

America is a diplomatic fox, while Beijing is a hedgehog fixated on the big idea of reunification.

By Niall FergusonBloomberg

Diplomacy to a tee.
Diplomacy to a tee. Photographer: Tim Rue/Bloomberg

In a famous essay, the philosopher Isaiah Berlin borrowed a distinction from the ancient Greek poet Archilochus: “The fox knows many things, but the hedgehog knows one big thing.”

“There exists,” wrote Berlin, “a great chasm between those, on one side, who relate everything to … a single, universal, organizing principle in terms of which alone all that they are and say has significance” — the hedgehogs — “and, on the other side, those who pursue many ends, often unrelated and even contradictory” — the foxes.

Berlin was talking about writers. But the same distinction can be drawn in the realm of great-power politics. Today, there are two superpowers in the world, the U.S. and China. The former is a fox. American foreign policy is, to borrow Berlin’s terms, “scattered or diffused, moving on many levels.” China, by contrast, is a hedgehog: it relates everything to “one unchanging, all-embracing, sometimes self-contradictory and incomplete, at times fanatical, unitary inner vision.”

Fifty years ago this July, the arch-fox of American diplomacy, Henry Kissinger, flew to Beijing on a secret mission that would fundamentally alter the global balance of power. The strategic backdrop was the administration of Richard Nixon’s struggle to extricate the U.S. from the Vietnam War with its honor and credibility so far as possible intact.More fromArchegos Appeared, Then VanishedHedge Fund or Billionaire? For Tribune, It’s a No-BrainerIllinois Owes Georgia Voters a Debt of GratitudeOne Cheer for the Return of Earmarks

The domestic context was dissension more profound and violent than anything we have seen in the past year. In March 1971, Lieutenant William Calley was found guilty of 22 murders in the My Lai massacre. In April, half a million people marched through Washington to protest against the war in Vietnam. In June, the New York Times began publishing the Pentagon Papers.

Kissinger’s meetings with Zhou Enlai, the Chinese premier, were perhaps the most momentous of his career. As a fox, the U.S. national security adviser had multiple objectives. The principal goal was to secure a public Chinese invitation for his boss, Nixon, to visit Beijing the following year.

But Kissinger was also seeking Chinese help in getting America out of Vietnam, as well as hoping to exploit the Sino-Soviet split in a way that would put pressure on the Soviet Union, America’s principal Cold War adversary, to slow down the nuclear arms race. In his opening remarks, Kissinger listed no fewer than six issues for discussion, including the raging conflict in South Asia that would culminate in the independence of Bangladesh.

Zhou’s response was that of a hedgehog. He had just one issue: Taiwan. “If this crucial question is not solved,” he told Kissinger at the outset, “then the whole question [of U.S.-China relations] will be difficult to resolve.”

To an extent that is striking to the modern-day reader of the transcripts of this and the subsequent meetings, Zhou’s principal goal was to persuade Kissinger to agree to “recognize the PRC as the sole legitimate government in China” and “Taiwan Province” as “an inalienable part of Chinese territory which must be restored to the motherland,” from which the U.S. must “withdraw all its armed forces and dismantle all its military installations.” (Since the Communists’ triumph in the Chinese civil war in 1949, the island of Taiwan had been the last outpost of the nationalist Kuomintang. And since the Korean War, the U.S. had defended its autonomy.)

With his eyes on so many prizes, Kissinger was prepared to make the key concessions the Chinese sought. “We are not advocating a ‘two China’ solution or a ‘one China, one Taiwan’ solution,” he told Zhou. “As a student of history,” he went on, “one’s prediction would have to be that the political evolution is likely to be in the direction which [the] Prime Minister … indicated to me.” Moreover, “We can settle the major part of the military question within this term of the president if the war in Southeast Asia [i.e. Vietnam] is ended.”

Asked by Zhou for his view of the Taiwanese independence movement, Kissinger dismissed it out of hand. No matter what other issues Kissinger raised — Vietnam, Korea, the Soviets — Zhou steered the conversation back to Taiwan, “the only question between us two.” Would the U.S. recognize the People’s Republic as the sole government of China and normalize diplomatic relations? Yes, after the 1972 election. Would Taiwan be expelled from the United Nations and its seat on the Security Council given to Beijing? Again, yes.

Fast forward half a century, and the same issue — Taiwan — remains Beijing’s No. 1 priority. History did not evolve in quite the way Kissinger had foreseen. True, Nixon went to China as planned, Taiwan was booted out of the U.N. and, under President Jimmy Carter, the U.S. abrogated its 1954 mutual defense treaty with Taiwan. But the pro-Taiwan lobby in Congress was able to throw Taipei a lifeline in 1979, the Taiwan Relations Act.

The act states that the U.S. will consider “any effort to determine the future of Taiwan by other than peaceful means, including by boycotts or embargoes, a threat to the peace and security of the Western Pacific area and of grave concern to the United States.” It also commits the U.S. government to “make available to Taiwan such defense articles and … services in such quantity as may be necessary to enable Taiwan to maintain a sufficient self-defense capacity,” as well as to “maintain the capacity of the United States to resist any resort to force or other forms of coercion that would jeopardize the security, or the social or economic system, of the people on Taiwan.”

For the Chinese hedgehog, this ambiguity — whereby the U.S. does not recognize Taiwan as an independent state but at the same time underwrites its security and de facto autonomy — remains an intolerable state of affairs.

Yet the balance of power has been transformed since 1971 — and much more profoundly than Kissinger could have foreseen. China 50 years ago was dirt poor: despite its huge population, its economy was a tiny fraction of U.S. gross domestic product. This year, the International Monetary Fund projects that, in current dollar terms, Chinese GDP will be three quarters of U.S. GDP. On a purchasing power parity basis, China overtook the U.S. in 2017.

In the same time frame, Taiwan, too, has prospered. Not only has it emerged as one of Asia’s most advanced economies, with Taiwan Semiconductor Manufacturing Co. the world’s top chip manufacturer. Taiwan has also become living proof that an ethnically Chinese people can thrive under democracy. The authoritarian regime that ran Taipei in the 1970s is a distant memory. Today, it is a shining example of how a free society can use technology to empower its citizens — which explains why its response to the Covid-19 pandemic was by any measure the most successful in the world (total deaths: 10).

As Harvard University’s Graham Allison argued in his hugely influential book, “Destined for War: Can America and China Escape Thucydides’s Trap?”, China’s economic rise — which was at first welcomed by American policymakers — was bound eventually to look like a threat to the U.S. Conflicts between incumbent powers and rising powers have been a feature of world politics since 431 BC, when it was the “growth in power of Athens, and the alarm which this inspired in Sparta” that led to war. The only surprising thing was that it took President Donald Trump, of all people, to waken Americans up to the threat posed by the growth in the power of the People’s Republic.

Trump campaigned against China as a threat mainly to U.S. manufacturing jobs. Once in the White House, he took his time before acting, but in 2018 began imposing tariffs on Chinese imports. Yet he could not prevent his preferred trade war from escalating rapidly into something more like Cold War II — a contest that was at once technological, ideological and geopolitical. The foreign policy “blob” picked up the anti-China ball and ran with it. The public cheered them on, with anti-China sentiment surging among both Republicans and Democrats.

Trump himself may have been a hedgehog with a one-track mind: tariffs. But under Secretary of State Mike Pompeo, U.S. policy soon reverted to its foxy norm. Pompeo threw every imaginable issue at Beijing, from the reliance of Huawei Technologies Co. on imported semiconductors, to the suppression of the pro-democracy movement in Hong Kong, to the murky origins of Covid-19 in Wuhan.

Inevitably, Taiwan was added to the list, but the increased arms sales and diplomatic contacts were not given top billing. When Richard Haass, the grand panjandrum of the Council on Foreign Relations, argued last year for ending “strategic ambiguity” and wholeheartedly committing the U.S. to upholding Taiwan’s autonomy, no one in the Trump administration said, “Great idea!”

Yet when Pompeo met the director of the Communist Party office of foreign affairs, Yang Jiechi, in Hawaii last June, guess where the Chinese side began? “There is only one China in the world and Taiwan is an inalienable part of China. The one-China principle is the political foundation of China-U.S. relations.” 

So successful was Trump in leading elite and popular opinion to a more anti-China stance that President Joe Biden had no alternative but to fall in line last year. The somewhat surprising outcome is that he is now leading an administration that is in many ways more hawkish than its predecessor.

Trump was no cold warrior. According to former National Security Adviser John Bolton’s memoir, the president liked to point to the tip of one of his Sharpies and say, “This is Taiwan,” then point to the Resolute desk in the Oval Office and say, “This is China.” “Taiwan is like two feet from China,” Trump told one Republican senator. “We are 8,000 miles away. If they invade, there isn’t a f***ing thing we can do about it.”

Unlike others in his national security team, Trump cared little about human rights issues. On Hong Kong, he said: “I don’t want to get involved,” and, “We have human-rights problems too.” When President Xi Jinping informed him about the labor camps for the Muslim Uighurs of Xinjiang in western China, Trump essentially told him “No problemo.” On the 30th anniversary of the 1989 Tiananmen Square massacre, Trump asked: “Who cares about it? I’m trying to make a deal.”

The Biden administration, by contrast, means what it says on such issues. In every statement since taking over as secretary of state, Antony Blinken has referred to China not only as a strategic rival but also as violator of human rights. In January, he called China’s treatment of the Uighurs “an effort to commit genocide” and pledged to continue Pompeo’s policy of increasing U.S. engagement with Taiwan. In February, he gave Yang an earful on Hong Kong, Xinjiang, Tibet and even Myanmar, where China backs the recent military coup. Earlier this month, the administration imposed sanctions on Chinese officials it holds responsible for sweeping away Hong Kong’s autonomy.

In his last Foreign Affairs magazine article before joining the administration as its Asia “tsar,” Kurt Campbell argued for “a conscious effort to deter Chinese adventurism … This means investing in long-range conventional cruise and ballistic missiles, unmanned carrier-based strike aircraft and underwater vehicles, guided-missile submarines, and high-speed strike weapons.” He added that Washington needs to work with other states to disperse U.S. forces across Southeast Asia and the Indian Ocean and “to reshore sensitive industries and pursue a ‘managed decoupling’ from China.”

In many respects, the continuity with the Trump China strategy is startling. The trade war has not been ended, nor the tech war. Aside from actually meaning the human rights stuff, the only other big difference between Biden and Trump is the former’s far stronger emphasis on the importance of allies in this process of deterring China — in particular, the so-called Quad the U.S. has formed with Australia, India and Japan. As Blinken said in a keynote speech on March 3, for the U.S. “to engage China from a position of strength … requires working with allies and partners … because our combined weight is much harder for China to ignore.”

This argument took concrete form last week, when Campbell told the Sydney Morning Herald that the U.S. was “not going to leave Australia alone on the field” if Beijing continued its current economic squeeze on Canberra (retaliation for the Australian government’s call for an independent inquiry into the origins of the pandemic). National Security Adviser Jake Sullivan has been singing from much the same hymn-sheet. Biden himself hosted a virtual summit for the Quad’s heads of state on March 12.

The Chinese approach remains that of the hedgehog. Several years ago, I was told by one of Xi’s economic advisers that bringing Taiwan back under the mainland’s control was his president’s most cherished objective — and the reason he had secured an end to the informal rule that had confined previous Chinese presidents to two terms. It is for this reason, above all others, that Xi has presided over a huge expansion of China’s land, sea and air forces, including the land-based DF‑21D missiles that could sink American aircraft carriers.

While America’s multitasking foxes have been adding to their laundry list of grievances, the Chinese hedgehog has steadily been building its capacity to take over Taiwan. In the words of Tanner Greer, a journalist who writes knowledgably on Taiwanese security, the People’s Liberation Army “has parity on just about every system the Taiwanese can field (or buy from us in the future), and for some systems they simply outclass the Taiwanese altogether.” More importantly, China has created what’s known as an “Anti Access/Area Denial bubble” to keep U.S. forces away from Taiwan. As Lonnie Henley of George Washington University pointed out in congressional testimony last month, “if we can disable [China’s integrated air defense system], we can win militarily. If not, we probably cannot.”

As a student of history, to quote Kissinger, I see a very dangerous situation. The U.S. commitment to Taiwan has grown verbally stronger even as it has become militarily weaker. When a commitment is said to be “rock-solid” but in reality has the consistency of fine sand, there is a danger that both sides miscalculate.

I am not alone in worrying. Admiral Phil Davidson, the head of U.S. forces in the Indo-Pacific, warned in his February testimony before Congress that China could invade Taiwan by 2027. Earlier this month, my Bloomberg Opinion colleague Max Hastings noted that “Taiwan evokes the sort of sentiment among [the Chinese] people that Cuba did among Americans 60 years ago.”

Admiral James Stavridis, also a Bloomberg Opinion columnist, has just published “2034: A Novel of the Next World War,” in which a surprise Chinese naval encirclement of Taiwan is one of the opening ploys of World War III. (The U.S. sustains such heavy naval losses that it is driven to nuke Zhanjiang, which leads in turn to the obliteration of San Diego and Galveston.) Perhaps the most questionable part of this scenario is its date, 13 years hence. My Hoover Institution colleague Misha Auslin has imagined a U.S.-China naval war as soon as 2025.

In an important new study of the Taiwan question for the Council on Foreign Relations, Robert Blackwill and Philip Zelikow — veteran students and practitioners of U.S. foreign policy — lay out the four options they see for U.S. policy, of which their preferred is the last:

The United States should … rehearse — at least with Japan and Taiwan — a parallel plan to challenge any Chinese denial of international access to Taiwan and prepare, including with pre-positioned U.S. supplies, including war reserve stocks, shipments of vitally needed supplies to help Taiwan defend itself. … The United States and its allies would credibly and visibly plan to react to the attack on their forces by breaking all financial relations with China, freezing or seizing Chinese assets.

Blackwill and Zelikow are right that the status quo is unsustainable. But there are three core problems with all arguments to make deterrence more persuasive. The first is that any steps to strengthen Taiwan’s defenses will inevitably elicit an angry response from China, increasing the likelihood that the Cold War turns hot — especially if Japan is explicitly involved. The second problem is that such steps create a closing window of opportunity for China to act before the U.S. upgrade of deterrence is complete. The third is the reluctance of the Taiwanese themselves to treat their national security with the same seriousness that Israelis take the survival of their state.

Thursday’s meeting in Alaska between Blinken, Sullivan, Yang and Chinese Foreign Minister Wang Yi — following hard on the heels of Blinken’s visits to Japan and South Korea — was never likely to restart the process of Sino-American strategic dialogue that characterized the era of “Chimerica” under George W. Bush and Barack Obama. The days of “win-win” diplomacy are long gone.

During the opening exchanges before the media, Yang illustrated that hedgehogs not only have one big idea – they are also very prickly. The U.S. was being “condescending,” he declared, in remarks that overshot the prescribed two minutes by a factor of eight; it would do better to address its own “deep-seated” human rights problems, such as racism (a “long history of killing blacks”), rather than to lecture China.

The question that remains is how quickly the Biden administration could find itself confronted with a Taiwan Crisis, whether a light “quarantine,” a full-scale blockade or a surprise amphibious invasion? If Hastings is right, this would be the Cuban Missile Crisis of Cold War II, but with the roles reversed, as the contested island is even further from the U.S. than Cuba is from Russia. If Stavridis is right, Taiwan would be more like Belgium in 1914 or Poland in 1939.


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