In the face of growing regulatory risks to our preferred ways of life, the least we can do is see the perpetual crisis narratives for what they are: a tool to legitimize dangerous increases in the size and scope of government.
President Biden’s State of the Union speech was an overdue act of transparency. When Mr. Biden finally announces his re-election bid, he will be running as a democratic socialist. That is the clear takeaway from the more than 70 minutes Mr. Biden spent describing his plans to push federal spending and mandates into every nook of American life.
Still, there came a point in Mr. Biden’s speech when undecided voters in his audience had to wonder: Just what part of the American pie does this guy not want to get his fingers into?
Mr. Biden described what he had done or would do for women, election reform, marriage, gas prices, 20,000 infrastructure projects, lead in pipes, cancer, insulin, price controls on drugs, Medicaid expansion, 500,000 electric-vehicle charging stations, tax credits to buy electric cars and on and on.
He paused for a moment to assert out of thin air, “I’m a capitalist.” But then it got weird, even for anyone wanting a lot of control over the means of production.
Suddenly, Mr. Biden was identifying microscopic economic discrepancies he vowed to erase. He said he would ban resort fees, impose a cap on concert-ticket fees and ban fees for people wanting to sit together on planes. Then he said something about getting involved with whether a person can quit a job as a cashier at a burger joint to take the same job across the street. Even Karl Marx wouldn’t have thought to propose so much flat-earth socialism. Far from done, Mr. Biden moved on to home care, housing, pre-K, teachers pay, student debt, mental health and addressing the crime crisis with counselors, social workers and psychologists.
The economic populism proposals Mr. Biden outlined resemble Xi Jinping’s “national champion” policies for China.
Understandably, George Will is not optimistic that politicians will take the steps necessary to save Americans from being swept into an economic sewer by the U.S. government’s fiscal incontinence. Two slices:
The American Main Street Initiative, a think tank, says the Obama, Trump and Biden administrations compiled more debt held by the public, adjusted for inflation, than did all previous presidents combined. And if the national debt rises for 60 years at the rate it has risen during the previous 30, it will then exceed $1.5 quadrillion. (A quadrillion is a thousand trillions.)
The only adequate savings — savings commensurate with the structural debt crisis — require structural reforms of entitlement programs. Politically risky things cannot, however, be done in election years or years immediately preceding election years, which are the only years there are.
[W]e shouldn’t expect a transition from unified Democratic control to divided government to reduce the rate of growth in federal spending.
David Henderson explains that “taxing wealth is taxing work.” [DBx: Thomas Piketty, along with those persons who swallow his analysis, miss this reality because, in their view, wealth is created largely independently of human institutions and agency. Capital just grows. It oozes automatically from some mysterious source. Somehow. Miraculously.]
The dozens of disclosed emails are only a fraction of Twitter’s files and do not include still-undisclosed but apparent government coordination with Facebook and other social media companies. Much of that work apparently was done through the multi-agency Foreign Influence Task Force (FITF), which operated secretly it seems to censor citizens.
Finance professor Ken French once said about stock buybacks: “Buybacks are divisive. They divide people who do understand finance from those who don’t” Put Joe Biden and his administration in the “those who don’t” category. In last night’s State of the Union, the president proposed quadrupling the tax on corporate stock buybacks “to encourage long term investments instead.”
The concept of stock buybacks—when a public corporation uses its profits, or sells debt, to buy its own shares—may seem like a bad thing. After all, in theory, the company could have used that money to invest in its growth or to pay higher wages. But technically, a share repurchase is simply returning money to shareholders—just like paying a dividend, but more tax efficient.
AQR Capital Management’s Cliff Asness estimated that net investment did not decrease as stock buybacks became more popular. A corporation may buy back shares when it sees no profitable investment opportunities. In this case, it is better to return the money to shareholders; they can then invest that money in a company that might have better investment prospects.