Economy Archives - Page 96 of 123

Phoenix To Use Federal Funding for Universal Basic Income Pilot

September 28, 2021/in Economy, Liberty, Politics /by Cole Lauterbach

One thousand lucky Phoenix families will get $1,000 in taxpayer funding a month in 2022.

The Phoenix City Council has approved $12 million for a “Financial Assistance for Phoenix Families Program,” a lottery-based form of universal basic income that will begin in January 2022 if not sooner.

The program, which has yet to be finalized, will send approximately 1,000 families a monthly stipend of $1,000 for all of 2022. According to a city document, the funds would be limited toward “basic household necessities” such as housing, childcare, food and other staples.

The city would load money onto a debit card that wouldn’t allow the purchase of a list of forbidden items like alcohol and tobacco.

All low-income families making up to 80% of the area median income – a sliding scale that would be just over $63,000 for a family of four – would be eligible. A representative of the city said in the Tuesday session that anyone on public assistance, in public housing, or receiving public housing vouchers would qualify.

“We’ve seen a lot of cities across the country doing this direct assistance and I’m glad that we’ll be joining them in giving money to folks,” Vice Mayor Carlos Garcia said. “It’s not just for rent or utilities, but if they do have child care needs, if they do have to get medicine, whatever it is, I think people know best what their needs are.”

The program is paid for by the federal American Rescue Plan Act (ARPA). The city received $196 million this year and will receive another $196 million next year.

City documents say staff would recommend continuing this program with the second payout of ARPA funds in 2023.

Council members Jim Waring and Sal DiCiccio voted against the measure.

Phoenix joins a handful of other cities to test out the premise of universal basic income. California’s most recent budget includes $35 million to pay for a similar program. The cities of Los Angeles, Compton and Richmond, Virginia, have approved similar programs.

The city of Chicago is considering a similar program.

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This article was published on September 23, 2021, and is reproduced with permission from The Center Square.

China’s Crackdown on Debt, Tech & Evergrande Sends Frazzled Wall Street Titans to China

September 28, 2021/in Economy, National Security /by Wolf Richter

The property sector and its debts are possibly the biggest financial mess in China’s history.

The crackdowns by Chinese authorities on some of the biggest hype-and-hoopla industries have sent investors heading for the exits. There is a crackdown on debt to keep the financial system from imploding. There’s a crackdown on property speculation to tamp down on housing prices and on debt. There’s a crackdown on big tech – mostly internet, social media, and online gaming companies – for their monopolistic size and practices and a slew of other issues.

There’s a crackdown on education tech companies that sell off-campus educational courses that have driven the costs of education into the sky, discouraging Chinese couples from having more than one child. There’s a crackdown on all kinds of other activities that include reporting financial news and analysis in a way that the government doesn’t approve.

There are all kinds of reasons for these crackdowns, including the push by President Xi to create “common prosperity,” which has become a mantra to fight the ballooning wealth disparity linked to the surge in asset prices, including home prices that are now making homes unaffordable for the masses.

The crackdowns already resulted in some spectacular effects.

Wall Street is heavily involved in the stocks and bonds of these companies, both in the US and in China, many of which have dropped sharply, and some have collapsed.

Many Chinese companies have issued American Depositary Receipts, or ADRs, such as Alibaba. These ADRs aren’t actual stocks but were issued by an offshore mailbox entity in the Cayman Islands or wherever, that has a contract with the actual company in China.

Wall Street firms make a fortune setting up these ADRs, selling them to investors, managing them in their mutual funds and ETFs, etc. Wall Street makes money coming and going on these ADRs.

But those ADRs have unraveled. The Golden Dragon China ETF, which tracks these ADRs, has plunged by 46% since February, unwinding the entire pandemic hype-and-hoopla spike.

In the Chinese markets, China’s crackdown has caused the shares of affected companies to plunge by a combined $1.5 trillion in a matter of months at the low point a little while ago.

But now these Wall Street titans that made huge amounts of money from China’s debt bubble, from the wild property speculation, from monopolistic tech companies, from the hype and hoopla, from their dealings in China, well, they’ve had enough of these crackdowns.

A Wall Street delegation composed of top executives from Goldman Sachs, mega-asset manager BlackRock, PE firm Blackstone, Citadel, Fidelity, among others, had a three-hour powwow on Thursday with Chinese regulators that included the vice-chairman of the China Securities Regulatory Commission and the head of the People’s Bank of China…..

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Continue reading this article, published on September 22, 2021 at Wolf Street.

Essential Marxist Reading for Liberals and Conservatives

September 27, 2021/in Culture Wars, Economy, Education, Liberty, Politics /by Craig J. Cantoni

A review and overview of The Cult of Smart, by Fredrik deBoer, All Points Books, 276 pages.

Fredrik deBoer is the author of The Cult of Smart, a book that unwittingly explains the sharp left turn of the Democrat Party and a growing number of young Americans. It also shows why the widening chasm between the far left and liberals and conservatives will never be bridged.

For those reasons alone, it’s a very important book and should be read by traditional Democrats and Republicans, although a root canal would be less painful. If the book had been published when I was younger, I could’ve learned about Marxist thinking without having to labor through Das Kapital.

At the leading edge of the millennial generation, Mr. deBoer is an avowed Marxist, a professor with a PhD from Purdue, a former high school substitute teacher, a contributor to the New York Times and other mainstream liberal publications, a descendant of “red diaper babies” (his words), and an admirer of Bernie Sanders, Alexandria Ocasio-Cortez, Karl Marx, and Frederick Engels. Also, like so many ideologues in history, he is the product of an apparent unhappy childhood, stemming from his mother dying when he was a child and his father dying when he was fifteen, after a life of alcoholism and depression.

The author lambastes both liberals and conservatives for believing in meritocracy and in the power of education to significantly reduce inequality. Liberals will no doubt applaud his rebuke of conservative values, and conservatives will applaud his rebuke of liberal values; but they should be aware that he wants to put a ticking time bomb of social revolution under the backsides of both of them.

Mr. deBoer goes so far as to write:

That education is the great economic leveler stands as one of the ubiquitous nostrums in contemporary politics. Barack Obama, the pope of modern American progressivism, repeated the trope endlessly, insisting that the American dream could only be secured through an invigorated education sector.

. . . we should reject the idea of education as an anti-poverty tool for being wrong on its face. Because education is not a weapon against inequality; it is an engine of inequality. Far from making society more equal, our education system deepens inequality, sorting winners from losers and ensuring even greater financial rewards for the former. Nowhere is this dynamic more prevalent than in college.

A major premise of The Cult of Smart is that intelligence is hereditary and inherited to the same degree across all races. Genes help to explain why some people excel in school and in abstract thinking and some people don’t. Of course, such factors as parental influence and socioeconomic class come into play in how someone does in life, but, according to deBoer, inherited intelligence accounts for about half of success, especially in this era of knowledge work, where those with lower IQ are being left behind in increasing numbers.

The author understands the danger of the premise being misunderstood and how it can lead to racism and had led to the eugenics movement of the first half of the twentieth century, a movement that he admits was led by progressives. He makes clear that inherited intelligence, or a lack thereof, does not vary by race.

According to deBoer, it follows from the premise that additional spending on education is mostly a waste of money, because more money cannot overcome a lack of inherited intelligence, and because more money is not needed for gifted students with inherited high intelligence who are going to succeed regardless of spending levels. This goes against the liberal belief in more education spending and the conservative belief that everyone can succeed through hard work, no matter their personal circumstance.

Taken to an extreme, the idea of inherited intelligence can also go against the foundations of Western moral philosophy, namely Judeo-Christian beliefs about right and wrong, sinning and redemption, and crime and punishment. The idea calls into question how much free will and agency humans really have when all of the factors of nature and nurture are considered. This is not a new philosophical question, but it is complicated by new science, especially cherry-picked science.

It’s undeniable that humans don’t reach adulthood with a blank slate. On the nurture side, behavioral choices and learning are strongly influenced by the circumstances of childhood—by parenting, neighborhood mores, environmental factors, and socioeconomic class. On the nature side, as science is revealing but has a long way to go, behavior and learning are influenced by hormones, other bodily chemicals, and the condition of the parts of the brain that control impulses.

Take a kid who has two Nobel Prize-winning parents, who have an innate ability to concentrate and control impulses, and who lives in a house full of books in a neighborhood of college graduates. Certainly, that kid has a wider range of good choices than a kid who has a single parent on drugs, who has an innate difficulty in concentrating and controlling impulses, and who lives in a household with no books but a lot of TV, in a neighborhood of drug dealers and crime.

To that point, some behavior is so self-defeating that it’s hard to imagine that it’s the result of rationality and thoughtful consideration of the consequences.

This commentary isn’t the place to debate such deep questions of moral philosophy, but a debate is needed elsewhere in order to develop a counterargument to Marxists like deBoer, one that is geared to the way that young people obtain and process information.

To continue with the book:

Mr. deBoer is merciless in his criticism of liberals who feign concern for the poor and social justice but engage in selective breeding and do whatever they can to get their kids into the best k-12 schools and into elite universities, so that their ticket is punched for the rest of their life—and, as deBoer’s Marxist thinking goes, at the expense of the less fortunate. He questions whether the education is any better at elite schools and posits that the schools are key members of the “Cult of the Smart,” where credentialing takes precedence over other considerations and leads to self-reinforcing and self-replicating elitism.

Naturally, being an academic, he buys into the progressive zeitgeist about white privilege, about the goodness of wokeness, and about America being racist, sexist, and classist. At the same time, he lambastes his “fellow leftists” (as he calls them) for their phony virtue-signaling. He writes that if they were “simply a new kind of nouveau riche with culturally liberal politics, they would probably be harmless, if somewhat obnoxious. But there’s a far larger problem: simply by living upper-middle-class lives, these woke go-getters perpetuate inequality.”

To those who have attended elite colleges, he says:

Privilege theory, intersectionality, cultural studies—each has value and important insights to impart, but more important for your lived experience is their signaling value. Peppering your speech with abstruse academic vocabulary these fields have developed demonstrates to your social peers that you believe in the right things, that you are politically enlightened, that you are woke. And to be woke has come, in the past decade, to confer considerable professional benefits.

He goes on to cite the inconvenient truth that locales with a high number of such people have the most income inequality.

Continuing the skewering, he says that “it’s essential to bear this thought in mind: many of those who are ostensibly part of a political movement to change our society are the ones who most benefit from the status quo and who hold back others simply through living the lives they do.” Then he administers the coup de grace: “I am persistently pessimistic when it comes to progressive social change.”

He also dislikes the wealthy, as evidenced by this bloodcurdling statement: “Certainly, if I had the power, I’d ensure that the very wealthy didn’t exist.”

As with Marxists of yesteryear, deBoer has antipathy for the upper middle class, or what the Bolsheviks characterized as the petite bourgeoisie. I would add that many of today’s leftists in academe, politics and the media extend that antipathy downward to the middle class, especially the members of the middle class who have “white” values about work and marriage. However, as with deBoer, they’re largely silent about Asians having the same white values and being at the top in income in America, with a median household income of $94,903, versus $74,912 for non-Hispanic whites.

Likewise, deBoer says nothing about the realities of Marxism and one-party authoritarian government in general. Left unmentioned are the purges, gulags, mass starvations, privileges for top party cadres and their families, and, as can be seen in China today, discrimination against minorities, women, and what the party has called “sissy boys.”

Mr. deBoer even buys into the old Marxist trope that a worker paradise could be built upon the existing industrial foundation of capitalism, leading to a second phase of communism in which workers would be self-actualized and not have to toil in jobs they didn’t like. The second phase has never been realized, however. Drudgery, bad management, immovable bureaucracy, and an out-of-touch hierarchy are just as alienating, if not more so, under communism than under capitalism.

To his credit, deBoer is honest about pre-kindergarten and after-school programs being ineffectual in the long run in improving academic results. Yet he supports these programs for reasons of social welfare and because they can be a stepping stone to the kind of society he envisions.

Surprisingly, he has an objection to a universal basic income. To wit: “It has the same problem that liberal social programs almost always do: it does nothing to strengthen the hand of the poor and working-class relative to the rich, to the bosses, and to political leaders.”

Not surprisingly, he supports nationalized medical care and free college. But the latter seems to contradict his belief that college doesn’t benefit those without the intelligence to succeed in college.

He also disdains charter schools, repeats the popular canard that public school teachers are underpaid for their abilities and hard work, and claims that teachers are unfairly blamed for not being able to improve the test results of students who don’t have the intelligence to do well. He says nothing about how Norway dramatically improved its test results by making a degree in education one of the toughest degrees to obtain and raising the pay of those teachers who met the higher standards.

Speaking of standards, deBoer wants to eliminate one-size-fits-all state testing standards and curricula for public schools, a point that I agree with in concept as long as it results in furthering the education of the less gifted students who need a curriculum tailored to their intellectual capacity, and as long as it doesn’t crimp the education of the more gifted students. Easier said than done, however, given the difficulties in determining a student’s IQ and potential, as well as the political challenge of telling parents that their child doesn’t have what it takes to succeed in college.

All of the foregoing is but a prelude to what deBoer really believes and wants. He really believes that equal opportunity will never be achieved, even if all differences in individual circumstances were to be eliminated. As such, what he really wants is for the existing political and economic order to be replaced with the Marxist idea of “from each according to his ability and to each according to his need,” so that equal outcomes are achieved. He doesn’t say how that would be achieved and who would decide, but he no doubt sees ideologues like himself in charge.

Make no mistake: I, too, want to eliminate poverty and think that it’s unacceptable for a rich country like the U.S. to have widespread urban slums and rural poverty; to have high crime, broken families, and drug addiction in those places; and to have large numbers of homeless people living and dying on city streets like animals. This is particularly unacceptable in light of the trillions of dollars we have spent on foreign wars.

On the other hand, the last thing I want is for people of deBoer’s ideology to be in charge. Unfortunately, that’s what a growing number of Americans seem to want, especially younger Americans taught by the likes of deBoer.

Democrats’ $3.5 Trillion Socialist Dream Is Tax-and-Spend Nightmare

September 27, 2021/in Culture Wars, Economy, Liberty, Politics /by Deroy Murdock

House Speaker Nancy Pelosi plans a vote soon to push Sen. Bernie Sanders’ $3.5 trillion socialist dream budget one step closer to law

The news gets worse from there. Every other detail about this onerous legislation merits scorn, revulsion, and rejection.

The so-called Build Back Better budget resolution boasts a $3.5 trillion price tag. Taxpayers should be so lucky.

That figure assumes that several key initiatives, including the child tax credit, will expire in three to five years. Since government programs are virtually immortal, this is not wishful thinking. It’s pure fantasy.

Reasonably assuming that these programs grind on for 10 years swells the budget’s true price to $5.5 trillion. Add the Senate’s $1 trillion “infrastructure” bill, which most House Democrats hope to append, and Sanders’ budget hits $6.5 trillion.

Next, blend in $400 billion for interest payments on the exploding national debt. That pushes the “$3.5 trillion” package’s real cost to $6.9 trillion—nearly double its advertised price.

“Bernie’s budget is all about inserting the federal government into the daily lives of all Americans and spending as much money as possible while doing so,” warned Rep. Jason Smith, R-Mo., the ranking member of the House Budget Committee.

Democrats plan to underwrite this bachelor-party-like extravaganza by borrowing from the Chinese Communist Party and by hiking levies on America’s beleaguered taxpayers. Sanders’ budget constitutes the biggest tax increase since 1968—before man walked on the moon.

The Club for Growth Foundation counts $3.6 trillion in new taxes in this measure. Among them:

Higher revenues from growing the size and reach of the IRS: $266 billion.
A boost in long-term, combined capital gains taxes from 29% to 48.4%: $322 billion. (If the bill is enacted, investors seeking lower capital-gains taxes could find them in communist China.)
New IRS spying and subsequent taxes on transactions in bank accounts with balances of $600 or more: $463 billion.
A new global minimum tax on U.S. companies operating overseas: $534 billion.
A more-than-25% hike in the corporate tax, from 21% to 26.5%: $858 billion.

Add state levies on such enterprises, and U.S. companies would strain beneath the developed world’s highest tax burden. That’s dreadful for American businesses, jobs, and growth, and a boon to this country’s economic rivals.

Beyond spending and taxes, the Sanders budget would bludgeon the Land of the Free into a socialist “workers’ paradise.”

Among its far left social-engineering schemes:

An annual methane-emissions tax would cost dairy farmers an extra $6,504 per cow.
Tax credits for university “environmental justice programs”: $1 billion.
A $1,500 tax credit on electric bicycles that cost up to $8,000: $7.4 billion.
A $1,200 tax credit for “green” doors, windows, and skylights: $15 billion.
Individuals with incomes up to $200,000 could collect $82,000 in federal housing down-payment subsidies.
“Free” college: $50 billion
“The Democrat bill also shovels $3.5 billion of your money so D.C. bureaucrats can create something called the ‘Civilian Climate Corps’—a make-work program for young climate activists,” Americans for Tax Reform founder Grover Norquist said. “Perhaps they’ll knock on your door with a clipboard and tell you to put on a sweater instead of heating your home adequately.”

These taxpayer-funded eco-busybodies also would be unionized. And, of course, their union dutifully would kick back a chunk of their members’ mandatory dues into the Democratic Party’s campaign coffers.

“In the face of mounting inflation and economic instability, a rational Congress would enact pro-growth tax and spending reforms that pave the way to a smoother recovery,” Andrew Moylan, the National Taxpayers Union’s executive director said, adding, “Instead, current leaders are marching full speed ahead with the most sweeping expansion in the size and scope of government in decades. It’s like throwing a drowning child an anvil instead of a life preserver.”

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This article was published September 26, 2021 and is reproduced with permission from The Daily Signal.

4 Ways to Understand Democrats’ $3.5 Trillion Spending Bill

September 27, 2021/in Culture Wars, Economy, Liberty, News, Politics /by David Ditch

House Democrats have unveiled pieces of the $3.5 trillion spending bill over the past several weeks.

Most legislation focuses on specific issues, which makes it possible to have constructive debate. However, this bill covers welfare, immigration, taxes, energy, families, and much more, making it extremely difficult to comprehend.

Providing context on this tax-and-spend bill’s size and cost helps bring into focus just how radical it is, and why some Democrats are now pushing back against it.

1. $27,000 Cost Per Household
The U.S. Census Bureau’s 2020 data shows that there are 128.5 million households in the United States. If we divide the cost of the $3.5 trillion package across each household, the numbers are substantial in relation to a typical family budget.

This legislation would cost over $27,000 for every household in America. That’s more than the cost of a brand new Toyota RAV4 sport utility vehicle, or five years of groceries for a typical family, or 13 years of clothing purchases and tailoring for an average household.

The left tries to deflect from the exorbitant cost by pointing to tax increases focused on high-income households and businesses. Yet that fundamentally misunderstands how the economy works.

When the government increases taxes on investment, there is less incentive to start or expand a business, which is the source of the job creation and wage growth that all workers depend on.

In addition, the tax hikes in the massive spending bill would place American businesses at a severe disadvantage with our global competitors. Over time, high taxes mean lower wages, higher prices, and weak returns for individual retirement accounts.

In contrast, the 2017 Tax Cuts and Jobs Act (which would be gutted by the tax hikes) helped drive strong wage growth and low unemployment before the pandemic.

While we don’t yet know exactly how much the new legislation would add to the national debt, it would likely be somewhere between $1 trillion and $2 trillion. That burden would be layered on top of $28.4 trillion in existing debt, which amounts to $219,000 for every household in the country.

Adding recklessly to the debt would increase risks to the health of the economy and add to the immoral and unsustainable burden being handed down to future generations.

2. A 111-Year Spending Spree
Stores will occasionally have a contest where the winner gets to buy as much as he or she can over the course of a few minutes. Even under those circumstances, in most stores it would be impossible to grab $1,000 of goods per second.

The $3.5 trillion spending bill equates to spending $1,000 per second for 111 years straight.

Yet the spending would be crammed into just a decade, meaning that the legislation would enable a spending spree of over $11,000 per second for those 10 years.

What would Congress buy with all that money? An army of taxpayer-funded climate activists, new welfare programs that would disincentive work, corporate welfare for politically favored sectors like journalism and “green” energy, and an increased risk of 1970s-style inflation.

That’s not a good deal for the American public.

3. Far More Expensive Than Major Programs
The $3.5 trillion spending bill is enormous even when compared to other major pieces of legislation and long-term federal programs.

The inflation-adjusted cost of the interstate highway system through its completion in 1992 was $543 billion. The cost of veterans’ benefits from 1962 through 2020 was $2.9 trillion.

Amazingly, both decades-long federal efforts cost less than the $3.5 trillion spending bill.

A more recent example: The Coronavirus Aid, Relief, and Economic Security Act, which was the key federal response to the COVID-19 outbreak, cost $1.9 trillion.

The initial 10-year cost of Obamacare was $1.1 trillion in today’s dollars. The cost of those two enormous bills falls well short of the current package.

4. Over 2,400 Pages of Jargon, Legalese

Although final legislative text is still in flux, what has been released by House committees weighs in at over 2,400 pages—and there will likely be some additions before it’s said and done.

Moderate Democrats have made a modest request: that they have at least 72 hours to review the bill before a vote on the House floor. Yet that would be nowhere near enough time to ensure that the final product doesn’t include big mistakes or hidden handouts.

Reading legislative text isn’t like reading a novel. Rather, legislation is a dense soup of legalese and references to existing federal laws that takes serious time to consider.

At a pace of five minutes per page, someone would need 202 hours straight—not 72 hours—to properly read such a mammoth piece of legislation.

This legislation is simply too long, too expensive, and would do too much damage to the economy to properly justify it.

Rather than rushing to centralize power and control in Washington, D.C., through a series of tax hikes and new entitlement programs, Congress should take a different approach: restraining spending, maintaining a pro-growth tax code, and reforming existing benefit programs to make them financially sustainable.

This would pave the way for a post-pandemic economic boom that would benefit all Americans.

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This article was published on September 23, 2021, and is reproduced with permission from The Daily Signal.

U.S. Chamber of Commerce: Dems’ $3.5 Trillion Spending Bill ‘Existential Threat’ to Economy

September 27, 2021/in Economy, Politics /by Casey Harper

One of the nation’s leading economic and business groups is warning that the $3.5 trillion spending bill before Congress is an “existential threat” to the nation’s economy.

The U.S. Chamber of Commerce has launched a six-figure television ad campaign targeting the proposed tax hikes in the measure that would be “taking more hard-earned money from small businesses and working families.”

The initial ads will play in California, Minnesota, Virginia, New York and Iowa.

“This reconciliation bill is effectively 100 bills in one representing every big government idea that’s never been able to pass in Congress,” U.S. Chamber of Commerce President and CEO Suzanne Clark said. “The bill is an existential threat to America’s fragile economic recovery and future prosperity. We will not find durable or practical solutions in one massive bill that is equivalent to more than twice the combined budgets of all 50 states. The success of the bipartisan infrastructure negotiations provides a much better model for how Congress should proceed in addressing America’s problems.”

The chamber also sent a letter to the House of Representatives last week warning members to not support the legislation.

“This ‘everything but the kitchen sink’ approach to raising taxes and creating new government spending and regulatory programs is an existential threat to America’s fragile economic recovery and future prosperity, and will hamstring America as we work to compete globally, especially with China,” the letter said. “No member of Congress can achieve the support of the business community if they vote to pass this bill as currently constructed.”

But some lawmakers are threatening to sabotage a bipartisan infrastructure bill if the $3.5 trillion spending plan doesn’t pass. On Wednesday, 11 Democratic senators said they would kill the $1 trillion infrastructure bill without passage of the $3.5 trillion measure.

The senators, who released a joint statement, include Sens. Cory Booker, D-N.J., Kirsten Gillibrand D-N.Y., Mazie K. Hirono, D-Hawaii, Ed Markey, D-Mass., Jeff Merkley, D-Ore., Alex Padilla, D-Calif., Bernie Sanders, I-Vt., Brian Schatz, D-Hawaii, Tina Smith, D-Minn., Elizabeth Warren, D-Mass., and Sheldon Whitehouse, D-R.I.

“We voted for the bipartisan infrastructure bill with the clear commitment that the two pieces of the package would move together along a dual track,” the senators said in the joint statement. “Abandoning the $3.5 trillion Build Back Better Act and passing the infrastructure bill first would be in violation of that agreement. Congress must not undercut the President’s proposals that will create new opportunities for America’s families and workers. The House of Representatives should wait to pass the bipartisan infrastructure bill until the budget reconciliation bill, which enacts the rest of the President’s Build Back Better agenda, is sent to the President’s desk.

“We strongly support the Congressional Progressive Caucus and other members in the House who have said they intend to vote for the bipartisan infrastructure bill only once the Build Back Better Act is passed,” they added. “That is what we agreed to, it’s what the American people want, and it’s the only path forward for this Congress.”

This stance complicates things for Democratic leadership, especially after multiple Democratic senators have said they cannot support the larger bill because of its hefty price tag. Sen. Joe Manchin, D-W.V., and Sen. Kyrsten Sinema, D-Ariz., have both balked at voting for the $3.5 trillion bill.

“These are not indications of an economy that requires trillions in additional spending,” Manchin said. “Every elected leader is chosen to make difficult decisions. Adding trillions of dollars more to nearly $29 trillion of national debt, without any consideration of the negative effects on our children and grandchildren, is one of those decisions that has become far too easy in Washington. Given the current state of the economic recovery, it is simply irresponsible to continue spending at levels more suited to respond to a Great Depression or Great Recession – not an economy that is on the verge of overheating.”

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This article was published on September 23, 2021, and is reproduced with permission from The Center Square.

Eliminating Crude Oil Is Like Jumping Out Of A Plane Without A Chute

September 27, 2021/in Economy, Environment, Liberty, Politics /by Ronald Stein

The world and the Intergovernmental Panel on Climate Change (IPCC) are proposing banishment of fossil fuels and are focused on reducing emissions from fossil fuels at any costs, but a safety net of having a viable replacement should be in place before we jump off that cliff.

Banning oil imports, fracking, and ceasing oil production to focus on the symbolic renewable energy as the fossil fuels replacement is fooling ourselves as that “clean energy” is only electricity generated from breezes and sunshine.

Before the healthy and wealthy countries abandon all crude oil fracking and exploration that will eliminate the supply chain to refineries and put an end to that manufacturing sector, we should have a safety net to live without the crude oil fuels and derivatives that are manufactured from that energy source. Without any clones to access everything we get from crude oil; the termination of its use could be the greatest threat to civilization.

The more than 6,000 products including asphalt roofing, asphalt roads, fertilizers, and all the products in hospitals that come from the derivatives manufactured from crude oil are more important than the various fuels to the world to operate planes, trucks, militaries, construction equipment, merchant ships, cruise ships, and automobiles.

Electricity alone can recharge your iPhones and EV batteries, but wind turbines and solar panels cannot manufacture the derivatives that are needed to make the parts of those iPhones and Tesla’s and the components in solar panels, wind turbines, and automobiles.

Reliance on intermittent electricity from breezes and sunshine is unfathomable as electricity by itself is unable to support the prolific growth rates of the military, airlines, cruise ships, supertankers, container shipping, trucking infrastructures, and the medical industry that is already about 90 percent dependent for the products from petroleum, to meet the demands of the exploding world population.

Only healthy and wealthy countries like the USA, Germany, Australia, and the UK can subsidize electricity generation from breezes and sunshine, and then, its only intermittent electricity at best. The 80 percent of the 8 billion on earth living on less than $10 a day cannot subsidize themselves out of a paper bag.

Those poorer countries must rely on affordable and abundant coal for reliable electricity, while residents in the healthy and wealthier countries pay dearly for those subsidies with some of the highest costs for electricity in the world.

Before the healthier and wealthier countries cease all oil production, they need to focus on an answer to what safety parachute exists to replace what we get from crude oil.

Before the 1900’s we had NONE of the 6,000 products from oil and petroleum products. By ceasing oil production and fracking, the supply chain to refineries will be severed and there will no need for those manufacturing refineries.
Without refineries we would be terminating the manufacturing of the derivatives that make the thousands of products used in our daily lives and terminating the manufacturing of the various fuels for transportation infrastructures and the military.
Without crude oil, the world would be in desperate need for “clones” to those oil derivatives that provide the thousands of products from petroleum that are essential to our medical industry, electronics, communications, transportation infrastructure, our electricity generation, our cooling, heating, manufacturing, and agriculture—indeed, virtually every aspect of our daily lives and lifestyles.
The world has had more than 100 years to develop clones or generics to replace the crude oil derivatives. Without replacements for those derivatives manufactured from crude oil, there will be gigantic reductions in living standards of the population in the so-called industrial countries, and any attempt to develop the colonial countries would come to a dead stop.
The “green” preachers have yet to promote the need for clones to the oil derivatives that are the basis of billionaire’s lifestyles and worldwide economies.
Wind turbines and solar panels are not only incapable of manufacturing any such derivatives, but the manufacturing of the components for wind and solar are themselves 100 percent dependent on the derivatives made from crude oil, the same crude oil that the world wants to eliminate from our economies.

Energy is more than electricity from breezes and sunshine. Electricity by itself cannot provide the thousands of products from petroleum that are essential to our medical industry, transportation infrastructure, our electricity generation, our cooling, heating, manufacturing, and agriculture—indeed, virtually every aspect of our daily lives and lifestyles. Nor can electricity alone, support the military, airlines, cruise ships, supertankers, container shipping, and trucking infrastructures.

The greatest threat to civilization would be from the elimination of crude oil as that commodity is manufactured into the oil derivatives and transportation fuels that can bring the poor out of poverty and are the reasons, we have healthy and wealthy developed countries. Going cold turkey to electricity from breezes and sunshine is not the wisest move without a safety net to rely upon that can support worldwide lifestyles and economies as we now know it.

*****

This article was published on September 22, 2021, and is reproduced with permission from CFACT, The Committee for a Constructive Tomorrow.

American Investors Are At Risk If Congress Continues To Give Fraudulent Chinese Companies A Pass

September 27, 2021/in Economy, Liberty, National Security, News, Politics /by Helen Raleigh

Beijing’s refusal to comply with U.S. law while continuing to access our capital markets has subjected U.S. investors to the risk of enormous financial losses.

Concern this week about the possible collapse of China’s Evergrande, which has a massive debt burden of $305 billion, highlights one more reason Congress needs to act to protect U.S. investors from Chinese companies.

The Sarbanes-Oxley Act of 2002 mandates the Public Company Accounting Oversight Board (PCAOB) and the U.S. Securities and Exchange Commission (SEC) inspect audit paperwork of all companies that issue securities in the U.S. The goal is to “protect investors and further the public interest in the preparation of informative, accurate, and independent audit reports.” More than 50 foreign jurisdictions comply with this U.S. law. But in the name of national security concerns, the Chinese government has prevented both domestic and foreign auditors of Chinese companies listed on U.S. exchanges from submitting audit reports to PCAOB and the SEC for inspection.

SEC Chairman Gary Gensler issued a warning to Chinese companies listed on U.S. stock exchanges recently: comply with our audit rules or be delisted. But Gensler’s threat came with a caveat: Chinese companies will have a three-year grace period before they may have to face any consequences. Given all the known risks of investing in Chinese companies, Kyle Bass, Hayman Capital founder and a vocal critic of China, said the SEC’s delayed enforcement would allow Chinese companies to have an “open season on U.S. investors” for three more years.

For decades, Chinese companies have successfully tapped into the U.S. capital market and U.S. investors have helped fund China’s astonishing economic growth. As of May 2021, there are 248 Chinese companies listed on U.S. stock exchanges, with a market capitalization of $2.1 trillion.

Past Fraud at Chinese Companies Listed on U.S. Stock Exchanges

U.S. regulators have good reasons to be concerned about investors’ risk exposure because corporate fraud in China is a well-known epidemic. In 2018, auditors in China declined to endorse 219 annual reports prepared by Chinese companies because the auditors either found problems with these companies’ financial statements or had expressed concern about the companies’ likelihood of survival.

Last year, Luckin Coffee, a Chinese startup that went public on NASDAQ in May 2019, disclosed that several of its employees, including its chief operating officer, had fabricated the majority of the company’s 2019 sales. Two months later, NASDAQ delisted Luckin stock. At the time, Luckin’s share price was only $1.48, a stunning 97 percent decline from its all-time high of $51 per share less than a year ago. Investors of Luckin stock suffered massive losses.

Shortly after Luckin’s financial fraud was exposed, another U.S.-listed Chinese company, TAL Education Group, one of the largest education providers in China that offer K-12 after-school tutoring services, revealed that one of its employees had inflated the company’s sales by “forging contracts and other documentation.” The share price of TAL dropped 23 percent in one day. The accounting scandals of Luckin and TAL renewed the concern that Beijing’s refusal to comply with the U.S. law while continuing to access U.S. capital markets has subjected U.S. investors to significant investment risk.

A succession of U.S. administrations has engaged many rounds of diplomatic negotiations with Beijing, hoping that China would comply with U.S. law and let PCAOB and SEC inspect audit reports for Chinese companies listed on U.S. exchanges. Beijing never budged. In 2012, a frustrated SEC filed administrative proceedings against five Chinese accounting firms (all of them global firms’ Chinese subsidiaries), for failing to hand over audit records of the Chinese companies under SEC investigation. The five firms claimed that if they followed SEC’s order, they would violate Chinese laws.

Even if PCAOB or SEC were granted access to Chinese companies’ auditors, another ongoing concern is that some of China’s homegrown accounting and auditing firms are just as unreliable as their corporate clients. Rather than acting as gatekeepers, these firms have turned a blind eye to their clients’ fabricated financial statements to maintain lucrative business relationships. For example, Chinese regulators launched investigations of China’s accounting firms Ruihua and GP in 2019. The regulator found that one of GP’s corporate clients inflated its cash holding by $4 billion, and one of Ruihua’s corporate clients overstated its profit for four years by $1.7 billion.

Shell Companies Are Another Risk

Widespread corporate fraud of Chinese companies and lax oversight from Chinese auditors are only some of the many known problems investors and U.S. regulators have to deal with. Another significant problem is Chinese companies’ circuitous corporate structure.

Since Beijing bars foreigners from taking ownership in what it deems strategic sectors of the Chinese economy, many large Chinese companies created offshore holding companies or variable-interest entities (VIEs) to raise capital outside of China. Since these VIE shares do not represent ownership, they offer foreign investors minimal legal rights or protections. According to Paul Gillis, an economics professor at Peking University, in the event of any dispute between foreign investors and VIEs, foreign investors “risk finding themselves owning shares in a shell company with no assets and no business if the contracts fall apart.”

Chinese Communist Party Influence on Chinese Companies

While foreign investors do not have ownership of Chinese companies they invested in, the Chinese Communist Party (CCP) has vast influence over Chinese companies and their management. For example, between 2016 and 2017, more than 30 Hong Kong-traded Chinese companies required their boards to consult Communist Party committees before making major business decisions.

Yet, Chinese companies listed on U.S. exchanges have yet to disclose either the CCP’s ownership stake or its power to influence their business operations. Without such disclosure, foreign investors in these Chinese companies are in the dark regarding the magnitude of risks they are exposed to.

Congress Must Authorize the SEC to Act Now

U.S. lawmakers sought to protect U.S. investors and address China’s decades-long refusal to comply with the Sarbanes-Oxley Act by passing the Holding Foreign Companies Accountable Act (HFCAA) in 2020. President Trump signed it into law. HFCAA stipulates auditors of foreign public companies must allow PCAOB to inspect their audit reports of non-U.S. operations, and if “a company’s auditors fail to comply for three consecutive years, then the company’s shares would be prohibited from trading in the United States.”

The lawmakers clearly aimed at China when they drafted HFCAA, but a three-year grace period is too long to address problems we have known of for decades. While the SEC is still drafting new rules to implement HFCAA, new challenges from China have emerged.

Less than two months ago, foreign investors who have funded China’s economic growth by investing in Chinese companies had suffered their most significant loss since the 2008 financial crisis. The CCP launched a crackdown on China’s largest technology firms, private education businesses, video game makers, and food-delivery companies. Bloomberg estimates that the Chinese government’s action has wiped out $1.5 trillion in value of these companies. Even investors who do not own these stocks directly suffer losses because many mutual funds hold these Chinese stocks in their investment portfolios.

There are indications the CCP hasn’t finished its crackdown yet, as its leader Xi Jinping is determined to reshape China’s economy by will and consolidate power and control in his own hands. Xi announced in early September that China would launch a new stock exchange in Beijing to help small to medium-sized companies raise capital. China already has three stock exchanges: Shanghai, Shenzen, and Hong Kong. The establishment of the Beijing stock exchange is the latest indication that China intends to develop its own capital market further and reduce Chinese businesses’ reliance on foreign capital markets. The SEC would have very little leverage left if it waited three years to delist Chinese companies that don’t comply with U.S. law. By 2024, China’s capital market will be mature enough that these Chinese companies probably will be more than happy to take their businesses back to China and re-list on Chinese stock exchanges.

The U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act this summer, which, if enacted, would reduce the three-year grace period to two. But even two years in the investment world is still a long time. American investors continue to face the risk of enormous financial losses as Beijing stonewalls U.S. laws. To truly protect American investors, the U.S. Congress needs to authorize the SEC to take action now, not two or three years from now.

*****

This article was published on September 22, 2021, and is reproduced with permission from The Federalist.

From Diseases to Recessions, Government Failure Is Endemic

September 26, 2021/in Economy, Healthcare, Liberty /by Mihai Macovei

Massive government intervention in the aftermath of the global financial crisis has not prevented the Great Recession, but had actually deepened and prolonged it until the covid-19 pandemic and government lockdowns sent the economy into a tailspin in 2020. Larger monetary and fiscal growth stimuli followed, exacerbating previous economic distortions. In the same way that countercyclical macroeconomic policies have turned the financial crisis into depression, the authorities’ health response has been good at crippling markets but never seems to deliver what is promised.

A Counterintuitive and Risky Health Response

Early on, governments embraced an overambitious paradigm of reaching herd immunity via hard lockdowns and vaccination. The famous “flatten the curve” slogan promoting lockdowns as the only solution to avoid a collapse of the health infrastructure quickly morphed into “lockdown until vaccine.” Convincing arguments that hard lockdowns are not producing better health results, but unduly restrict civil liberties, create economic havoc, and cause severe social and health long-term problems were largely ignored. Most governments in the West kept the lockdowns into place until late spring 2021, when the mass vaccination campaign was well underway.

Vaccination has been the main pillar of the government’s health response while doctors were discouraged from experimenting and using early treatments. When confronted with a problem, most rational individuals are looking for a quick, simple, and cost-effective solution. But not the Western health bureaucracies. Inexpensive early treatments pioneered with promising results were dismissed and outright prohibited.

The only early treatment promoted by Anthony Fauci and endorsed by the US Food and Drug Administration (FDA) was Remdesivir, a drug with unproven efficiency and likely side effects. The drug is also very expensive at about $3,500 per treatment. This raises serious questions about unorthodox financial interests and the role of Big Pharma in steering the government health response.

The almost exclusive reliance on vaccination in the middle of the pandemic seemed over-optimistic and risky to many experts from the very beginning. It takes many years to develop an efficient vaccine for a virus that may suffer rapid mutations, and lengthy testing is also necessary to ensure vaccine safety, in particular for an epidemic with a low mortality rate. Such concerns have not been heeded by the health authorities, which poured dozens of billions of US dollars into subsidizing the development of covid-19 vaccines. About 5.6 billion doses have already been administered globally and billions more have been ordered to cover all population and booster jabs. Pfizer/BioNTech alone expects to produce 3 billion jabs this year and 4 billion next year, with sales estimated at about $50 billion in 2021 only. If corona vaccination becomes periodical like flu vaccination, it would become a highly lucrative business worth hundreds of billions of US dollars for the Big Pharma.

Mass Covid-19 Vaccination Is No Silver Bullet

Government health experts touted mass vaccination as the only way to cut the transmission of the virus and overcome the pandemic. Yet, other scientists doubted it, because the coronavirus mutates rapidly and vaccines were not certain to block its transmission. Experts such as Dr. Joseph Mercola, Dr. Robert Malone, and others even argued that “leaky” vaccines, i.e., those preventing the disease without stopping infections, would incite the virus to evade the stronger immune response in vaccinated people and mutate into more virulent strains. In other words, individual benefits of a lower risk of hospitalization and death could be counterbalanced by more dangerous virus mutations worsening the pandemic.

It is obviously not easy for the general public to assess the scientific evidence regarding the pros and cons of covid-19 mass vaccination. Governments have not allowed such a debate to take place in the mainstream mass media, anyway. In any case, the rapid spread of the delta variant in countries with high vaccination rates has raised serious doubts about whether mass vaccination could end the pandemic, in particular, if vaccine efficacy drops to worrisome levels after about six months and both the vaccinated and unvaccinated can show similarly high viral loads of the delta variant that are able to spread around.

If covid-19 vaccines have more therapeutic benefits rather than stopping the infection, then how could herd immunity ever be achieved? And if herd immunity cannot be reached, why segregate people by vaccination status or vaccinate children and teenagers, who are known not to get seriously ill from covid-19? These are relevant questions also due to the large number of immediate severe adverse effects and deaths linked to covid-19 vaccination in the US and the EU, and potential long-term side effects entailed by the use of relatively new vaccine technologies.

What Next?

Several experts advocate a shift in focus from mass vaccination to building up immunity and early treatments that reduce the number of patients developing severe symptoms. Voluntary vaccination should be recommended primarily to vulnerable people for whom benefits clearly exceed risks.

Yet many health authorities continue pushing for mandatory mass vaccination. Several countries, such as Israel, the UK and the US, have already started offering booster shots, while adjusting accordingly the validity of sanitary passes and extending vaccination to children. Recently, President Biden has unveiled plans to force all companies with more than a hundred workers to require coronavirus vaccinations or test employees weekly. This mandate would affect as many as 100 million Americans and has been criticized as both authoritarian and unconstitutional. President Biden claims that the vaccine is “safe, effective and free” and yet nearly 80 million Americans remain unvaccinated, allegedly undermining the government health response. This seems to defy reality given that the vaccine doesn’t prevent infection or transmission of the disease, loses its efficiency within a few months, and has been associated with numerous side effects and deaths. It is not “free” either, because the cost of the vaccination campaign, going into dozens of billions of US dollars, will be paid eventually by the American taxpayer, who is pressed hard to take the shot. By the way, when was the last time millions of consumers refused a useful good or service offered to them for free?

The covid-19 health strategy leaves us with an acute sense of déjà vu. Governments have stubbornly tried to “stimulate” economic growth for almost fifteen years to no avail. All along, mainstream economists have remained blind to arguments that government intervention is making things worse by prolonging resource misallocation and fostering long-term impoverishment. We can only hope that a similar story is not playing out with far more severe consequences in the medical field.

*****

This article was published on September 20, 2021, and is reproduced with permission from the Ludwig von Mises Institute.

How the Left Is Spreading Global Warming Alarmism on the Right

September 25, 2021/in Economy, Environment, Liberty, Politics /by Hayden Ludwig

If there’s one thing the Left knows cold, it’s deception. From Vladimir Lenin to Saul Alinsky, leftists are unparalleled masters of the art of victory through hoodwinking: Defeating opponents by fooling them into false agreement.

Owning the battlefield in this war starts with controlling the language. We’ve seen this play out in the debate over abortion access, with pro-choice activists redefining “pro-life” to mean anything but the conviction that life begins at conception—and swindling unwitting Christians into their ranks.

Now it’s spreading to the debate over climate change, with environmental activists claiming there’s nothing “partisan” about their one-sided campaign to fundamentally transform America. Radicals, socialists, and authoritarians know that global warming offers them the best chance to weaponize Big Government and dictate where Americans live and work, what they drive, eat, and buy, and even what beliefs they’re allowed to hold—all through fear.

Truth-loving skeptics are all that stand in their way. So what better way to defeat them than by undermining the skeptics’ unity with false promises?

Meet the “eco-Right,” the collection of lobbying, litigation, and activist nonprofits that identify themselves as free market yet who have bought the Left’s argument that the Earth is getting dangerously hot and we’re to blame. Groups like ClearPath, Citizens for Responsible Energy Solutions, and the Climate Leadership Council disagree over specific policies—some want a devastating carbon tax to reduce emissions, others want federal subsidies for expensive lithium batteries—but all want skeptical Republicans to compromise with uncompromising leftists on their global warming policies.

By doing so they threaten to undermine both affordable energy in America and the future of the conservative movement—which is why they’re often funded by the likes of George Soros as well as the Ford and Hewlett Foundations.

My colleagues and I at the Capital Research Center first broke the news on the secret liberal mega-donors bankrolling the eco-Right in order to rebrand radical environmentalism as “conservative.” Our new report, Rise of the Eco-Right, compiles years of research and investigative reporting to expose the funders, leadership, and lobbying of the eco-Right, exposing a web of overlapping boards and shared donors in service to a destructive and cynical agenda.

We’ve studied the professional Left for decades and are all too familiar with activists’ use of deception and misdirection to camouflage their agenda to the casual glance. Unlike Activism Inc., we believe that Americans should be free from fearmongering to listen to arguments from both sides and come to their own conclusions in the global warming debate. Rise of the Eco-Right aims to make it clear that climate-conscious conservatives cannot compromise with the Left because activists aren’t interested in anything less than a “green” socialist revolution.

Don’t take my word for it—that’s the crux of an open letter to Speaker Nancy Pelosi (D-CA) signed by 263 activist groups in November 2019, urging Congress to pass the Green New Deal—arguably the most sweeping legislation ever proposed in America—to combat “increasing income/wealth inequality and rising white nationalism and neo-fascism” in America.

Today’s environmentalists are more interested in “environmental racism” and “restitution for Black and Indigenous farmers” than the environment, and they’re no longer hiding it behind the fig leaf of saving the planet from greenhouse gases.

Recall the explanation that Green New Deal author Saikat Chakrabarti’s gave to the Washington Post: “Do you guys think of [the Green New Deal] as a climate thing? Because we really think of it as a how-do-you-change-the-entire-economy thing.”

Here’s the bottom line: carbon taxes, “green” tech subsidies, and greenhouse gas pledges will never be enough for Big Green because the debate isn’t really about those things, but power. Activists know this, which is why they’ve abandoned these “market-friendly” proposals for the ultimate prize: the utopia of socialized medicine, federal jobs for everyone, slavery reparations, and more.

The eco-Right offers the Left a backdoor for the kind of statist policies that conservatives would never support—if they weren’t falsely labeled. It’s a siren’s song that promises free-market answers to climate change but will only result in tyranny. Conservatives, you have nothing to gain and everything to lose by listening to the eco-Right—so don’t give up the ship.

*****

This article was published on September 17, 2021, and is reproduced with permission from Capital Research Center.

Tax and Spend: Arizona’s Battle over Proposition 208 Goes to the Courts

September 24, 2021/in Economy, Education, Politics /by Timothy Sandefur & Matt Beienburg

How progressives are using ballot initiatives to raise taxes.

Last year, as part of their efforts to expand government subsidies to teacher unions, progressives across the country targeted Arizona’s ballot box with an unusual initiative to impose a potentially devastating new income tax on the state. Fortunately, the Arizona Supreme Court effectively ruled the initiative unconstitutional last month. But the ruling won’t stop progressives from targeting other states.

Euphemistically called “Invest in Education,” Arizona’s Proposition 208 levied a burdensome tax “surcharge” that would have nearly doubled income taxes on anyone earning more than $250,000 — which sounds like a high figure until one realizes that it didn’t distinguish between the personal income and the business income of small-business owners, and included no provision to adjust for inflation. That meant owners of small businesses — the chief employer in Arizona, as in all other states — were deemed “rich” (as in “tax the”) based not on their actual earnings, but on how much their business earned.

The initiative also forced the state to send this money to school districts without regard to what the legislature was already spending on education. In other words, Prop. 208 imposed a devastating new tax on the state’s primary generator of economic growth and then deprived the legislature of power to make responsible funding decisions.

Prop. 208 marked the climax of years of agitation that first peaked in 2018 when activists staged an illegal strike to close the state’s schools and then tried to ram through their massive tax increase on Arizonans via an initiative just months later. The state’s Supreme Court threw this first attempted money grab off the ballot, ruling that the Yes campaign was fudging the numbers in voter-information materials. The second time around, however, the “Invest in Education” tax hike was narrowly adopted as Prop. 208 on the November 2020 ballot, thanks to the backers’ false claims that state lawmakers were depriving schools of funding.

In reality, Arizona lawmakers had just poured over a billion dollars of new funding into public schools, for 20 percent teacher-pay raises and other purposes. Nonetheless, the Prop. 208 campaign claimed with a straight face that Arizonans “have waited years for action from their leaders and got nothing.”

But Arizona made a prime target for tax-raisers, thanks to the fact that the state has an unusually low threshold for voter initiatives. Where other states require supermajorities to approve an initiative — or require initiatives to be approved in two separate elections — in order to ensure that voters are really sure they want to do whatever the initiative proposes, no such safeguards exist in the Grand Canyon State. That means a mere 51 percent of voters can dramatically alter important aspects of state law. That attracts demagogues who seek to manipulate voters with misleading ballot initiatives and, as was the case last year, impose policies that could wreck the state’s economy, just when it’s poised to break out of the doldrums imposed by a year of nationwide shutdowns…..

*****

Continue reading this article, published September 13, 2021 at National Review.

Elizabeth Warren Revives Terrible Pandemic Policy

September 23, 2021/in Culture Wars, DrRichSwier.com, Economy, Politics, Waste, Fraud and Abuse /by Foundation for Economic Education (FEE)

In late August, the Supreme Court struck down the Centers for Disease Control’s so-called “eviction moratorium.” The justices ruled that the federal agency did not have the legal authority to unilaterally extend a prohibition on the eviction of non-paying tenants in many circumstances. This was a win for both the rule of law and for a rental market destroyed by the order—but the victory could prove short-lived, if a new coalition of progressive lawmakers gets its way.

Sen. Elizabeth Warren and Rep. Cori Bush, progressive Democrats, just co-sponsored legislation to revive the eviction moratorium: the “Keeping Renters Safe Act of 2021.”

Their bill would explicitly give the CDC the authority to re-enact the moratorium and compel it to do so. This new moratorium would potentially go even further, applying automatically to all rentals without tenants applying, as previously required. So, too, it would remain in place until 60 days beyond the “conclusion of the public health emergency.”

“This pandemic isn’t over, and we have to do everything we can to protect renters from the harm and trauma of needless eviction, which upends the lives of those struggling to get back on their feet,” Warren said in a statement. “Pushing hundreds of thousands of people out of their homes will only exacerbate this public health crisis, and cause economic harm to families, their communities, and our overall recovery.”

While Bush and Warren’s compassion for hypothetical struggling renters is commendable, the alleged ongoing pandemic-fueled eviction crisis their law responds to does not, in fact, exist. An internal report from the Biden administration even found that the financial situation of renters actually improved, on average, during the pandemic.

Meanwhile, COVID-19 vaccines are available at no cost to almost all Americans who want them, and there are more than 10 million unfilled job openings waiting for anyone seeking work.

The eviction moratorium was always an unjustifiable overreach, but it has absolutely zero legitimate justification left at this point. If revived, though, it would have drastic consequences.

In stark contrast to progressive misconceptions, many landlords and property owners are not “rich” or members of “the 1%.” In reality, the eviction moratorium bankrupted and devastated countless working-and-middle-class landlords. Yet it wasn’t just hurting landlords; it was blowing up the rental market on both ends.

In response to the moratorium, which deprived them of any way to enforce rent collection, landlords were responding by leaving units empty and off the market, requiring 6 months rent upfront, raising rent, and selling off their properties. They’re only now finally regaining their feet with the crushing weight of the moratorium lifted. Reviving it would once again deliver a gut punch to landlords and devastate the supply of rental housing— increasing rent prices, fueling the housing shortage, and ultimately leaving more people unhoused.

If Elizabeth Warren, Cori Bush, and other progressive lawmakers really want to make housing more affordable, bringing back the eviction moratorium is the last thing they ought to pursue. Only getting the government out of the way and letting the housing market recover can get us out of this mess.

COLUMN BY

Brad Polumbo

Policy correspondent. (@Brad_Polumbo)

Tax Increases Cannot Pay for the Democrats’ Reconciliation Bill

September 23, 2021/in Economy, Liberty, Politics /by Travis Nix

With a projected deficit of $3 trillion for this year already, congressional Democrats are moving full speed ahead to spend an additional $3.5 trillion over the next 10 years with no clear plan to pay for it.

Despite claims by Speaker Pelosi and key Senator Mark Warner (D-VA) that the Democrats’ $3.5 trillion spending package will be fully paid for, it’s simply not possible. The math doesn’t add up.

This spending spree is too large to be funded through tax increases. That means the federal government will have to finance it through deficit spending. This additional borrowing will just raise already soaring inflation rates and raise the tax burden on future generations.

Joe Biden has repeatedly said that he would fully repeal the 2017 tax law to pay for his spending plan, but that alone would not come close to paying for this level of spending. The entire 2017 tax cut cost $1.456 trillion according to the Joint Committee on Taxation — that’s before taking into account the law’s positive economic effects that reduced its cost. Repealing the bill entirely would still leave Democrats over $2 trillion in the hole. And that doesn’t even take into account the crippling economic effects that higher corporate taxes would have on investment, productivity, and wages.

Democrats recognize the negative economic effects that a high corporate tax rate has on the economy, which is why President Biden is proposing “only” raising the corporate income tax rate to 28 percent, and why House Democrats have proposed a 26.5 percent rate. While these proposals are better for the economy than returning the US to the uncompetitive days of a 35 percent tax rate, they still raise less money.

Some House Democrats are also demanding that the spending package repeal the 2017 tax law’s $10,000 cap on the State and Local Tax (SALT) deduction. This repeal would cost the federal government $700 billion over the next 10 years and would benefit mostly high-income earners. It increases the price tag of the reconciliation bill, necessitating more tax hikes or deficit spending, for a huge tax subsidy to the rich.

New taxes on the rich could pay for this reconciliation bill, right? Wrong. Take President Biden’s proposal to tax carried interest as ordinary income as an example. According to the Tax Foundation, this proposal would raise only $7.4 billion over 10 years — that’s less than a quarter of one percent of the revenue needed to pay for the $3.5 trillion package, and it carries with it the negative economic consequences of raising the cost of investment and distorting financial markets.

The math does not lie. The Democrats’ spending bill won’t be fully funded. It will increase the federal deficit, possibly by trillions of dollars. With inflation rising already, all this spending will do is add fuel to the fire of already high inflationary pressures.

This package means that the value of Americans’ wages will decrease over time because inflation and interest rates will rise. And it will be middle-class Americans who feel the negative effects of this deficit spending most keenly.

This spending will also put pressure on American entitlement programs that are already nearly insolvent. Medicare Part A is projected to go broke in five years, Social Security in 13. Increased deficit spending, especially to this extent, just speeds this timeline along. All we will get is closer to what seems to be an unavoidable debt crisis.

An additional consequence that should scare lawmakers away from supporting this bill is the impact it will have on our children. This package, along with the bipartisan infrastructure bill, will increase federal debt per U.S. household from $179,000 today, to $288,000 by 2031.

Lawmakers who support this bill are marching the born and unborn into further debt and economic despair. Whether it be through job-killing tax hikes, or through slower economic growth resulting from increased borrowing and less private investment, our children will pay for this bill.

The United States needs major budget reform, not another underfunded multi-trillion-dollar spending bill that puts major burdens on Americans and future generations. During the pandemic, Congress passed multiple trillion-dollar bills to help keep the economy afloat. With the economy recovering, America does not need another one.

*****

This article was published on September 19, 2021, and is reproduced with permission from AIER, American Institute for Economic Research.

ANALYSIS: Biden’s Vaccine Mandate Hurts Working Class America The Most

September 22, 2021/in Culture Wars, DrRichSwier.com, Economy, Elections, Healthcare, News, Politics, Waste, Fraud and Abuse /by The Daily Caller

President Joe Biden’s executive action requiring most U.S. workers to get vaccinated hurts working class Americans the most, according to polling and vaccination data.
“Unfortunately, this disproportionately harms people of lower socioeconomic groups,” Jeffrey Singer, a health policy expert at the Cato Institute, told the Daily Caller News Foundation when asked about Biden’s vaccine mandate. “A significant number of people who don’t want to get vaccinated are mainly of lower socioeconomic status.”
Just 66% of U.S. adults with less than a college degree have been vaccinated, significantly fewer than the 76% of total adults who have received a vaccination, according to a Sept. 10-13 Morning Consult poll.

President Joe Biden’s executive action requiring most U.S. workers to get vaccinated hurts working class Americans the most, according to polling and vaccination data.

Americans with lower levels of education are less likely to get and be more hesitant about COVID-19 vaccinations, according to survey data from the Census Bureau. Separate polling data showed that those Americans are also more likely to oppose vaccine mandates including Biden’s recent order requiring the jab for millions of workers.

“Unfortunately, this disproportionately harms people of lower socioeconomic groups,” Jeffrey Singer, a health policy expert at the Cato Institute, told the Daily Caller News Foundation when asked about Biden’s vaccine mandate. “A significant number of people who don’t want to get vaccinated are mainly of lower socioeconomic status.”

“At this point, I think it runs the risk of doing more harm than good,” Singer added.

Just 66% of U.S. adults with less than a college degree have been vaccinated, fewer than the 76% of total adults who have received a vaccination, according to a Sept. 10-13 Morning Consult poll. Meanwhile, 84% and 88% of adults with a bachelor’s degree and graduate degree respectively have been vaccinated.

About 11% of adults with some college education or an associate degree, 14% of adults with a high school diploma and 14.6% of those with less than a high school diploma reported being hesitant to get vaccinated, the Census Bureau Household Pulse Survey found. By comparison, 5% of those with at least a bachelor’s degree are hesitant.

Biden ordered the Department of Labor last week to issue a rule forcing businesses with 100 or more employees to mandate vaccinations at their workplace. The order, which applies to more than 81.1 million Americans, allows workers to choose to submit weekly tests to their employer instead of getting vaccinated.

The White House hasn’t clarified if private sector workers who choose not to be vaccinated will be expected to pay for the weekly tests. Some experts have predicted that employers will be allowed to choose whether to pay for the tests or not, The New York Times reported.

The Labor Department didn’t respond to multiple requests for comment on how weekly tests will be paid for.

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EDITORS NOTE: This The Daily Caller column is republished with permission. ©All rights reserved. Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. For licensing opportunities of our original content, please contact licensing@dailycallernewsfoundation.org.

Biden Tax Proposal Would Cost Arizona Thousands of Jobs, ASU Report Estimates

September 21, 2021/in Economy, News, Politics /by Cole Lauterbach

President Joe Biden’s proposal to increase the United States’ Global Intangible Low-Tax Income (GILTI) tax will lead to job losses at 266 public companies in Arizona, according to research from Arizona State University.

The proposal doubles the GILTI rate to 21% from 10.5%. Ninety-four percent of U.S manufacturers believe the increase will harm their business, according to a National Association of Manufacturers (NAM) survey on Sept. 9.

The study by the Seidman Institute at ASU’s W. P. Carey School of Business and Ernst & Young’s Quantitative Economic and Statistics Team (QUEST) said the tax “is specifically targeted at the income earned by foreign affiliates of those companies from intangible assets including intellectual property such as patents, trademarks, and copyrights.”

The Seidman Institute and QUEST predicted a low of 1,508 direct annual job losses and a high of 27,728 direct annual losses if the current GILTI proposal is implemented, placing up to 47,000 jobs at risk in the next five years.

A $276.7 million loss to the state GDP was estimated in the first year after the tax increase implementation, rising to $348.9 million in the tenth year. This would mark an annual loss of 0.07% to 0.08% of GDP in Arizona, the study said.

The study concluded that the proposed GILTI changes could slow economic growth in the Grand Canyon state, resulting in a total annual job loss of 0.06% to 1.14% in Arizona.

NAM President and CEO Jay Timmins released a statement about the proposal’s potential effect on American businesses.

“The proposed tax increases would result in 1 million job losses in just the first two years,” he said.

*****

This article was published on September 20, 2021, and is reproduced with permission from The Center Square.

Democrats Aim To Choke Off Arctic Drilling With Provision Tucked Into Reconciliation Package

September 21, 2021/in Economy, Environment, Politics /by Tristan Justice

Tucked into the massive legislation are restored protections to bar drilling within the Arctic National Wildlife Refuge’s 1002 Area.

House Democrats are seeking to exploit the reconciliation process with a $3.5 trillion dollar package in pursuit of high-priority progressive programs. That wish list includes a litany of items on the left-wing green agenda, with protections against Arctic oil exploration at the top.

Tucked into the massive legislation last week by the House Natural Resources Committee are restored protections to bar drilling within the Arctic National Wildlife Refuge’s (ANWR) 1002 Area, a nearly 1.6 million-acre patch along Alaska’s northern coast opened for oil and gas extraction in 2017.

“There isn’t a more clear example of congressional confusion than the current move by ‘wildlife-above-human-life’ extremists to ban oil and gas drilling in ANWR’s Coastal Plain,” said Rick Whitbeck, the Alaska state director for the energy nonprofit Power the Future. “They forget that Congress authorized and encouraged development in that exact area previously, and that banning future development puts the local indigenous people in peril of having to out-migrate from their village to find jobs to sustain their families.”

If passed, the package would likely seal the fate of drilling prospects in ANWR until Republicans reclaim both chambers of Congress and the White House to reverse course. The Biden administration, meanwhile, has continued to pull every lever to keep operations offline, from suspending oil and gas leases on federal lands to ordering new environmental reviews reassessing proposed projects.

The 1.6 million-acre stretch opened for exploration in 2017 amounts to less than 10 percent of the total refuge (which is roughly the size of South Carolina) off limits to development in northeast Alaska. According to the U.S. Geological Survey, somewhere between 4.3 and 11.8 billion barrels of recoverable oil remain underneath the surface of the 1002 Area, which would make it one of the most productive oil fields in the country as gas prices reach seven-year highs.

The only tribe living within the proposed boundary for drilling, the Iñupiat, have lobbied Congress for decades to allow development projects to move forward. Radical environmentalists seeking to preserve the entire state — which constitutes nearly a fifth of the entire nation’s landmass — as an untouched museum they’d maybe like to visit one day, however, have successfully exploited the opposition of a rival tribe hundreds of miles south of the 1002 Area to cloak opposition under the moral righteousness of environmental justice.

“The Gwich’in Nation, living in Alaska and Canada and 9,000 strong, make their home on or near the migratory route of the Porcupine caribou herd, and have depended on this herd for their subsistence and culture for thousands of years,” wrote California Democrat Rep. Jared Huffman as he re-introduced legislation in February to permanently ban the Iñupiat from harvesting the resources in their own backyard.

A look into the Gwich’in tribe’s past, however, raises questions about its genuine opposition to drilling in the Arctic Refuge, which remains entirely outside the tribe’s territory.

In the early 1980s, the Gwich’in sought to lease every last inch of its Alaskan Venetie Reserve to oil companies seeking to drill what many thought would be lucrative underground reserves. After exploration turned up short of any prospects for profitable drilling, the Gwich’in became vehemently opposed to oil and gas development across the state and partnered with progressive interests in the campaign.

The caribou, meanwhile, remain unbothered by the oil and gas activity on the North Slope 60 miles southwest of the 1002 Area, with populations continuing to rise and decline with their natural cycle.

Matthew Rexford, the tribal administrator for the Iñupiat village of Kaktovik within the 1002 Area, labeled his own people “refugees on their own lands,” prohibited from accessing the lucrative resources under them even though they are located on a flat plain rarely even visited by Alaskans, let alone elites who can afford the high-dollar trip.

“We are frustrated that we are not being heard and the Iñupiat living in Kaktovik and elsewhere on the North Slope are an ‘inconvenient truth’ to an administration dead set on shutting down Arctic development,” Rexford told The Federalist.

In an August interview, Alaska Republican Gov. Mike Dunleavy shared the tribe’s frustrations.

“If we were able to do what we wanted to do, we’d be one of the richest states by far,” Dunleavy told The Federalist.

*****

This article was published on September 18, 2021, and is reproduced with permission from The Federalist.

Democrats’ “Climate Change” Is Fake But Their Taxes Are Real

September 21, 2021/in Economy, Environment, Liberty, Politics /by Seton Motley

Climate alarmism provides an excuse for increased taxation of fossil fuel companies, which inevitably shift this cost burden to the consumer.

Sports coaches preach having “no memory.” Meaning you have to forget your mistakes.

A football quarterback has to forget his last pass was an interception. Because he needs to think about his next pass.

Most, unfortunately, some of the least athletic people on the planet have taken this sports axiom to heart. And unlike in sports – they demand we don’t remember either.

Behold the Democrats – and their “imminent doom” climate change predictions.

It is quite possible there has never been a more error-prone business – than the climate alarmism prediction business.

Wrong Again: 50 Years of Failed Eco-pocalyptic Predictions(Editor’s Note: You need to read this.)

As the article demonstrates, Big Media has long been doing its part. It has spent the last half-century jamming climate alarmism down our throats. Trying to have us forget about the last failed prediction – by immediately pivoting to the next failed prediction. No memory, remember?

A fun part of Big Media: They incessantly lie to us – and then poll us to see if the lies have taken. And then they lie about the poll results – when their lies haven’t taken.

But Big Media doesn’t have to conduct the poll themselves. They’ll happily lie in support of other Leftists polling and lying about it.

Progressive Pollster: 65 Percent of Likely Voters Would Back Polluters Tax

It’s a progressive pollster, so…

The progressive pollster and Big Media lyingly mash together two very different groups of respondents:

“A survey of likely voters found that 77 percent believe fossil fuel companies have “a lot” or “some” responsibility to address climate change, including 86 percent of Democratic respondents, 66 percent of Republicans and 75 percent of independents.

“When pollsters described a proposal to levy a $500 billion fee against major creators of emissions like Exxon, BP, Shell and Chevron, respondents “strongly” or “somewhat” supported such a measure, 65 percent to 25 percent. This included 83 percent of Democrats and 65 percent of independents in support.”

I have “a lot” of interest – and am “strongly” interested – in five million dollars. I have “some” interest – and am “somewhat” interested – in five dollars. Lumping these two groups together – is a lie. The actual breakout – reveals the hugeness of the lie.

43% of all voters say energy companies have “a lot” of responsibility. The rest (34%) say “some responsibility.” So in fact a strong majority of voters agree that fossil fuel companies bear no – or a little – responsibility for the fake premise that is “climate change.”

And the “a lot” alarmist number – is almost entirely made up Democrats. They’re at 62% – compared to 39% of independents and 24% of Republicans.

So the entire presentation of this poll – is a lie.

Of course, Big Media does nothing in a vacuum. Everything they do is in support of everything other Leftists-Democrats are doing.

And, of course, Leftists-Democrats never allow facts to get in the way of a good beating. “You never want a serious crisis to go to waste” – no matter how fake and un-serious the “crisis.”

This fake story on a fake poll on real taxes imposed in the name of fake “climate change” – follows immediately on the heels of Democrats proposing real taxes in the name of fake “climate change.”

Why should a half-century of climate alarmism being very, very wrong – get in the way of Democrats really taxing the crap out of us in the name of climate alarmism? No memory, remember?

Senate Democrats to Introduce Measure Taxing Major Polluters:

“Senate Democrats are set to unveil legislation that would tax energy companies responsible for major greenhouse gas emissions to pay for the costs of climate disasters.”

Never mind the fact that NONE of the predicted climate disasters over fifty-plus years – have ever actually happened.

Never mind the fact that taxing real energy producers – means they will have to pass along the taxes to us…the real energy users.

So we will pay a lot more for energy – and the government will get a lot more of our money.

Which does nothing for the climate.

But does a lot for the government.

Of course, they’re hoping we’ll forget all of this.

*****

This article was published on September 15, 2021, and is reproduced with permission from The Heartland Institute.

Sorry, AOC, Rich Already Pay Their Fair Share

September 20, 2021/in Economy, Liberty, Politics /by David Harsanyi

Rep. Alexandria Ocasio-Cortez donned an elegant gown with the slogan “Tax the Rich” painted on the back at the Met Gala in New York, where guests selected by Vogue’s Anna Wintour ponied up around $35,000 a pop for tickets. The scene was reminiscent of Tom Wolfe’s “radical chic” — though rather than being guests of the well-heeled in Park Avenue duplexes, today’s revolutionaries own luxury condos and drive around in government-subsidized electric cars that most Americans could never afford.

My first question, though, is: Who doesn’t want to “tax the rich”? Judging from my social-media feed, there seems to be a growing segment of people under the impression that the wealthy pay little or nothing in taxes. When you ask Americans if they support a wealth tax, a majority support the idea. One recent poll found that 80% of voters were annoyed that corporations and the wealthy don’t pay their “fair share.”

Polls rarely ask these people what a “fair share” looks like. Is a quarter of someone’s earnings enough? A third? Because the rich have been shouldering an increasingly larger share of the cost of government. The United States already has one of the most progressive tax systems in the free world. Those who make over $207,350 now pay 35% in income tax. Those who make $518,400 or more pay a 37% income-tax rate. At some point, taxation should be considered theft.

Despite perceptions, the highest-income strata of taxpayers are the only ones who pay a larger share of taxes than their share of income. In 2018, the top 1% of income earners made nearly 21% of all income but paid 40% of all federal income taxes. The top 10% earned 48% of the income and paid 71% of all federal income taxes.

On the other hand, in 2021, Americans making less than $75,000 are projected to have, on average, no tax liability after deductions and credits. The average income-tax rate for those making between $75,000 and $100,000 is expected to be 1.8%. More than 61% of Americans — around 107 million households — owed zero federal income taxes for the year 2020.

You don’t have to agree with me that (over)taxing the wealthy undermines job creation and growth, or that a tax system that relies so heavily on the fortunes of the few creates more cronyism in Washington and more volatility everywhere else. But the idea that the rich don’t pay their “fair share” is absurd.

At this point in the conversation, progressives will set aside their calls for a “wealth tax” and start complaining about capital gains. Here, we simply have a point of disagreement: Ocasio-Cortez would see investment profits in the hands of Bernie Sanders, head of the Senate budget committee. I would rather see them in venture-capital projects and private-equity funds that churn investment dollars and boost technology and jobs. Progressives grouse about accumulation of wealth and then want policies that dissuade risk.

Those who believe what I do will be accused of being “market fundamentalists” or beholden to the wealthy. Progressives — the kind that like to hang out at Met Galas — believe everyone is as class-obsessed as they are. I don’t give one wit about the wealthy. In fact, I hope today’s entrepreneurs are tomorrow’s new rich. We know they will be — without compelled redistribution.

How many voters do you think know that nearly 70% of the Forbes 400 richest Americans are self-made? Or that the share of the self-made wealthy had risen from 40% in the 1980s to nearly 70% by the 2010s? How many people who have fallen for the scaremongering worries of “inequality” — another leading reason for the wealth taxation —understand, as economist Mark Perry recently pointed out, that the middle-class isn’t “shrinking” because it’s getting poorer, but rather because of a long-term trend in upper-middle class growth? Ocasio-Cortez’s entire philosophy is a zero-sum fallacy.

No, progressive taxation isn’t socialism. But the policy justifications made for tax hikes these days certainly are. Ocasio-Cortez is a fraud, of course, but it’s her retrograde economic theorizing that’s the real problem. And in this age of populism, increasing numbers of Americans are accepting Marxist conceptions of American life, in which the successful are parasites and everyone else is a victim of their greed.

The reality is that no politician is going to advocate raising middle-class income taxes, despite the ever-increasing cost of government. There is only the rich to tax. Consequently, it’s become easier to pass massive expansions of the state. Everyone expects someone else to foot the bill — either future generations or their wealthier neighbors. Meanwhile, taxation has gone from being a means of funding communal needs and projects to a means of technocratic wealth reallocation. This is no way to run a country.

*****

This article was published on September 17, 2021, and is reproduced with permission from The Daily Signal.

Treasury Department Seeks to Track Financial Transactions of Personal Bank Accounts Over $600

September 19, 2021/1 Comment/in Courts & Law, Culture Wars, DrRichSwier.com, Economy, News, Politics, Waste, Fraud and Abuse /by Foundation for Economic Education (FEE)

In May, the Treasury Department released the Biden administration’s revenue proposals for fiscal year 2022. One aspect of this document that has gone under-reported is the administration’s new plan for reporting requirements for financial institutions.

The document is unequivocal about the administration’s goal for financial reporting, stating, “this proposal would create a comprehensive financial account information reporting regime.”

The Biden administration’s goal here is to increase tax revenue by making sure no income avoids detection. How will the administration do this? It plans to leverage financial institutions like banks.

“[T]his requirement would apply to all business and personal accounts from financial institutions,” the proposal reads, “including bank, loan, and investment accounts, with the exception of accounts below a low de minimis gross flow threshold of $600 or fair market value of $600.”

In other words, financial institutions will report any flows in and out of business and personal accounts of more than $600.

This reporting requirement is far above any current requirements on financial institutions. As the document itself states, currently only information for certain types of revenue (including 1099 forms MISC, NEC, and K) require reporting.

Some may view this proposal by the Biden administration positively. After all, this isn’t an attempt at raising taxes. The goal of this policy is to ensure individuals pay what is legally required, isn’t it?

There are two issues with this way of thinking.

Cutting off Air to the Market

The first issue is highlighted by economist Ludwig von Mises’s insight that “capitalism breathes through [the] loopholes.” The great innovations and improvements in well-being made available through capitalism were not generated in a loophole-free system. Oftentimes, the most important innovations begin as small start-ups with razor thin margins. As loopholes close, the chance of these risky start-ups succeeding declines.

Entrepreneurs are not ignorant to the barriers of regulations and taxation. When something is taxed, you get less of it. If any entrepreneurs are right on the fence of whether a new business venture is likely to be worth it, increasing costs even a little bit may be enough to persuade them otherwise. Economists call this “being on the margin.”

Avoiding taxes and reporting on small dollar transactions (either intentionally or unintentionally) is another form of loophole. De jure businesses are required to follow strict tax reporting rules, but, much like driving the speed limit, the de facto reporting often departs from the official rule.

To understand the danger of making businesses comply with tax law to the letter, consider how difficult it would be for businesses to do so. The tax code is now so long that nobody, including government officials, are sure of its length. How can business-owners be sure they’re complying with a document of unknown length? Put simply, they can’t.

Therefore, not only will these increased financial reporting requirements raise taxes on entrepreneurs on the margin, they will also force businesses to expend more time and resources ensuring they pay the proper amount of taxes. Any tax audit with access to every account transfer over $600 will crush businesses without a team of accountants or lawyers able to justify every transfer.

The burden of this policy, then, will fall primarily on small businesses without access to a massive internal legal team. A policy that punishes small businesses like this may be good for large corporations, but it’s bad for market competition.

As Mises noted, capitalism suffocates without loopholes.

The End of Financial Privacy

The second issue associated with Biden’s proposal is its effect on financial privacy. The administration’s focus on increasing financial reporting is becoming a consistent theme. For example, the “information reporting regime” document also includes proposals for cryptocurrency reporting which can be seen as a precursor to the crypto reporting requirements shoehorned into the “infrastructure” bill.

The increase in financial scrutiny provided by access to every transaction greater than $600 associated with personal accounts would provide an unprecedented look into the finances of many Americans. Even the powerful political will behind the 2002 “Patriot Act” only led to requirements that banks report suspicious transactions of $5,000 or more.

Much like small businesses, most individuals don’t have access to a team of lawyers and accountants the same way DC politicians and bureaucrats do. As such, these new requirements are likely to hurt poor and middle income Americans whose primary source of income is non-traditional. This is unsurprising given the Biden administration’s record of threatening gig work, for instance.

Some may argue that privacy is unnecessary because you have nothing to fear if you have nothing to hide. But, again, individuals cannot be expected to perfectly comply with a document of unspecified length. Unfortunately, as the government approaches perfect information, perfect compliance becomes the standard.

At one time, perhaps community banks or other small financial institutions interested in keeping customers around could’ve provided resistance to this by generating political pushback or work-arounds for customers.

However, government policies have effectively destroyed a more decentralized network of financial institutions. Since the early 1990s the number of small banks has fallen from over 10,000 to below 5,000. Now politicians are proposing to leverage their relationships with the few big players who are “too big to fail” to examine every aspect of Americans’ finances.

Especially with the lockdowns, the federal government already has small businesses, independent contractors, and the economy in general in a stranglehold. This new “Information Reporting Regime” will only tighten its economically lethal grip.

Pelosi Says Capitalism Has Not Helped U.S. Economy, Argues ‘We Have To Correct That’

September 19, 2021/in Culture Wars, DrRichSwier.com, Economy, Elections, News, Politics, Taxes /by Pamela Geller

This is a communist coup on America.

Ayn Rand on Capitalism,

“Capitalism did not create poverty — it inherited it.” For much of human history, the vast majority of the population was mired in poverty. All too often, the average individual lived in unimaginably wretched conditions. It was only in the nineteenth century, and then only in the West, that the masses started to enjoy prosperity because of capitalism.

“The nineteenth century was the ultimate product and expression of the intellectual trend of the Renaissance and the Age of Reason, which means: of a predominantly Aristotelian philosophy. And, for the first time in history, it created a new economic system, the necessary corollary of political freedom, a system of free trade on a free market: capitalism.”

“No, it was not a full, perfect, unregulated, totally laissez-faire capitalism—as it should have been. Various degrees of government interference and control still remained, even in America—and this is what led to the eventual destruction of capitalism. But the extent to which certain countries were free was the exact extent of their economic progress. America, the freest, achieved the most.”

“Never mind the low wages and the harsh living conditions of the early years of capitalism. They were all that the national economies of the time could afford. Capitalism did not create poverty—it inherited it. Compared to the centuries of precapitalist starvation, the living conditions of the poor in the early years of capitalism were the first chance the poor had ever had to survive. As proof—the enormous growth of the European population during the nineteenth century, a growth of over 300 per cent, as compared to the previous growth of something like 3 per cent per century.”

“The flood of misinformation, misrepresentation, distortion, and outright falsehood about capitalism is such that the young people of today have no idea (and virtually no way of discovering any idea) of its actual nature. While archeologists are rummaging through the ruins of millennia for scraps of pottery and bits of bones, from which to reconstruct some information about prehistorical existence—the events of less than a century ago are hidden under a mound more impenetrable than the geological debris of winds, floods, and earthquakes: a mound of silence.”

“Capitalism is a social system based on the recognition of individual rights, including property rights, in which all property is privately owned.”

“The recognition of individual rights entails the banishment of physical force from human relationships: basically, rights can be violated only by means of force. In a capitalist society, no man or group may initiate the use of physical force against others. The only function of the government, in such a society, is the task of protecting man’s rights, i.e., the task of protecting him from physical force; the government acts as the agent of man’s right of self-defense, and may use force only in retaliation and only against those who initiate its use; thus the government is the means of placing the retaliatory use of force under objective control.”

“The moral justification of capitalism lies in the fact that it is the only system consonant with man’s rational nature, that it protects man’s survival qua man, and that its ruling principle is: justice.”

“In a capitalist society, all human relationships are voluntary. Men are free to cooperate or not, to deal with one another or not, as their own individual judgments, convictions, and interests dictate. They can deal with one another only in terms of and by means of reason, i.e., by means of discussion, persuasion, and contractual agreement, by voluntary choice to mutual benefit. The right to agree with others is not a problem in any society; it is the right to disagree that is crucial. It is the institution of private property that protects and implements the right to disagree—and thus keeps the road open to man’s most valuable attribute (valuable personally, socially, and objectively): the creative mind.”

“Capitalism demands the best of every man—his rationality—and rewards him accordingly. It leaves every man free to choose the work he likes, to specialize in it, to trade his product for the products of others, and to go as far on the road of achievement as his ability and ambition will carry him. His success depends on the objective value of his work and on the rationality of those who recognize that value. When men are free to trade, with reason and reality as their only arbiter, when no man may use physical force to extort the consent of another, it is the best product and the best judgment that win in every field of human endeavor, and raise the standard of living—and of thought—ever higher for all those who take part in mankind’s productive activity.”

Pelosi Says Capitalism Has Not Helped US Economy ‘As Well As It Should,’ Argues ‘We Have To Correct That’

By Brianna Lyman, Daily Caller, September 17, 2021:

Speaker of the House Nancy Pelosi said Friday capitalism “has not served our economy as well as it should” but insisted it is a system to improve rather than abandon.

“In America, capitalism is our system, it is our economic system, but it has not served our economy as well as it should,” Pelosi said at a Chatham House event in the United Kingdom, according to Reuters. “So what we want to do is not depart from that, but to improve it.”

Pelosi said “stakeholder capitalism” has historically been beneficial to the states as it has allowed both workers’ wages and management’s to rise as productivity increases, according to The Washington Post. Pelosi, however, criticized “shareholder capitalism” which she says causes employees’ salaries to remain the same despite a growth in productivity.

“You cannot have a system where the success of some springs from the exploitation of the workers and springs from the exploitation of the environment and the rest, and we have to correct that.”

Join @RobinNiblett and me at @ChathamHouse in London for a moderated conversation. https://t.co/r7uBXuZvP2

— Nancy Pelosi (@SpeakerPelosi) September 17, 2021

Pelosi has remained steadfast in her commitment to capitalism, albeit with some adjustments to the system.

When asked by a left-leaning student in 2017 whether Democrats should move farther left with “a more stark contrast to right-wing economics,” Pelosi immediately clarified Democrats are capitalists.

“I have to say, we’re capitalists, that’s just the way it is,” she responded, according to NYU Local. “However, we do think that capitalism is not necessarily meeting the needs with the income inequality that we have in our country.”

“We’re a capitalist system. The free market is – is a place that can do good things.”

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