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Poverty in the U.S. Was Plummeting—Until Lyndon Johnson Declared War On It [+Videos]

October 16, 2018/in Culture War, Economy, Policy, Politics, Waste, Fraud and Abuse/by Foundation for Economic Education (FEE)

One of the more elementary observations about economics is that a nation’s prosperity is determined in part by the quantity and quality of labor and capital. These “factors of production” are combined to generate national income.

I frequently grouse that punitive tax policies discourage capital. There’s less incentive to invest, after all, if the government imposes extra layers of tax on income that is saved and invested.

Bad tax laws also discourage labor. High marginal tax rates penalize people for being productive, and this can be especially counterproductive for entrepreneurship and innovation.

Still, we shouldn’t overlook how government discourages low-income people from being productively employed. But the problem is more on the spending side of the fiscal equation.

The Welfare State’s Effect on the Poor

In Thursday’s Wall Street Journal, John Early and Phil Gramm share some depressing numbers about growing dependency in the United States:

During the 20 years before the War on Poverty was funded, the portion of the nation living in poverty had dropped to 14.7% from 32.1%. Since 1966, the first year with a significant increase in antipoverty spending, the poverty rate reported by the Census Bureau has been virtually unchanged…Transfers targeted to low-income families increased in real dollars from an average of $3,070 per person in 1965 to $34,093 in 2016…Transfers now constitute 84.2% of the disposable income of the poorest quintile of American households and 57.8% of the disposable income of lower-middle-income households. These payments also make up 27.5% of America’s total disposable income.

This massive expansion of redistribution has negatively impacted incentives to work:

The stated goal of the War on Poverty is not just to raise living standards but also to make America’s poor more self-sufficient and to bring them into the mainstream of the economy. In that effort the war has been an abject failure, increasing dependency and largely severing the bottom fifth of earners from the rewards and responsibilities of work…The expanding availability of antipoverty transfers has devastated the work effort of poor and lower-middle income families. By 1975 the lowest-earning fifth of families had 24.8% more families with a prime-work age head and no one working than did their middle-income peers. By 2015 this differential had risen to 37.1%…The War on Poverty has increased dependency and failed in its primary effort to bring poor people into the mainstream of America’s economy and communal life. Government programs replaced deprivation with idleness, stifling human flourishing. It happened just as President Franklin Roosevelt said it would: “The lessons of history,” he said in 1935, “show conclusively that continued dependency upon relief induces a spiritual and moral disintegration fundamentally destructive to the national fiber.”

In another WSJ column on the same topic, Peter Cove reached a similar conclusion:

America doesn’t have a worker shortage; it has a work shortage. The unemployment rate is at a 15-year low, but only 55% of Americans adults 18 to 64 have full-time jobs. Nearly 95 million people have removed themselves entirely from the job market. According to demographer Nicholas Eberstadt, the labor-force participation rate for men 25 to 54 is lower now than it was at the end of the Great Depression. The welfare state is largely to blame… insisting on work in exchange for social benefits would succeed in reducing dependency. We have the data: Within 10 years of the 1996 reform, the number of Americans in the Temporary Assistance for Needy Families program fell 60%. But no reform is permanent. Under President Obama, federal poverty programs ballooned.

Edward Glaeser produced a similar indictment in an article for City Journal:

In 1967, 95 percent of “prime-age” men between the ages of 25 and 54 worked. During the Great Recession, though, the share of jobless prime-age males rose above 20 percent. Even today, long after the recession officially ended, more than 15 percent of such men aren’t working… The rise of joblessness—especially among men—is the great American domestic crisis of the twenty-first century. It is a crisis of spirit more than of resources… Proposed solutions that focus solely on providing material benefits are a false path. Well-meaning social policies—from longer unemployment insurance to more generous disability diagnoses to higher minimum wages—have only worsened the problem; the futility of joblessness won’t be solved with a welfare check… various programs make joblessness more bearable, at least materially; they also reduce the incentives to find work… The past decade or so has seen a resurgent progressive focus on inequality—and little concern among progressives about the downsides of discouraging work… The decision to prioritize equality over employment is particularly puzzling, given that social scientists have repeatedly found that unemployment is the greater evil.

Encouraging Dependency

Why work, though, when the government pays you not to work?

And that unfortunate cost-benefit analysis is being driven by ever-greater levels of dependency.

Writing for Forbes, Professor Jeffrey Dorfman echoed these findings:

…our current welfare system fails to prepare people to take care of themselves, makes poor people more financially fragile, and creates incentives to remain on welfare forever… The first failure of government welfare programs is to favor help with current consumption while placing almost no emphasis on job training or anything else that might allow today’s poor people to become self-sufficient in the future… It is the classic story of giving a man a fish or teaching him how to fish. Government welfare programs hand out lots of fish but never seem to teach people how to fish for themselves. The problem is not a lack of job training programs, but rather the fact that the job training programs fail to help people… The third flaw in the government welfare system is the way that benefits phase out as a recipient’s income increases… a poor family trying to escape poverty pays an effective marginal tax rate that is considerably higher than a middle class family and higher than or roughly equal to the marginal tax rate of a family in the top one percent.

I like that he also addressed problems such as implicit marginal tax rates and the failure of job-training programs.

Professor Lee Ohanian of the Hoover Institution reinforces the point that the welfare state provides lots of money in ways that stifle personal initiative:

Inequality is not an issue that policy should address… Society, however, should care about creating economic opportunities for the lowest earners… a family of four at the poverty level has about $22,300 per year of pre-tax income. Consumption for that same family of four on average, however, is about $44,000 per year, which means that their consumption level is about twice as high as their income… We’re certainly providing many more resources to low-earning families today. But on the other hand, we have policies in place that either limit economic opportunities for low earners or distort the incentives for those earners to achieve prosperity.

I’ve been citing lots of articles, which might be tedious, so let’s take a break with a video about the welfare state from the American Enterprise Institute.

And if you like videos, here’s my favorite video about the adverse effects of the welfare state.

Even (Some) Leftists Acknowledge the Problem

By the way, it isn’t just libertarians and conservatives who recognize the problem.

Coming from a left-of-center perspective, Catherine Rampell explains in the Washington Post how welfare programs discourage work:

…today’s social safety net discourages poor people from working, or at least from earning more money… you might qualify for some welfare programs, such as food stamps, housing vouchers, child-care subsidies and Medicaid. But if you get a promotion, or longer hours, or a second job, or otherwise start making more, these benefits will start to evaporate—and sometimes quite abruptly. You can think about this loss of benefits as a kind of extra tax on low-income people… Americans at or just above the poverty line typically face marginal tax rates of 34 percent. That is, for every additional dollar they earn, they keep only 66 cents… One in 10 families with earnings close to the poverty line faces a marginal tax rate of at least 65 percent, the CBO found… You don’t need to be a hardcore conservative to see how this system might make working longer hours, or getting a better job, less attractive than it might otherwise be.

To understand what this means, the Illinois Policy Institute calculated how poor people in the state are trapped in dependency:

The potential sum of welfare benefits can reach $47,894 annually for single-parent households and $41,237 for two-parent households. Welfare benefits will be available to some households earning as much as $74,880 annually… A single mom has the most resources available to her family when she works full time at a wage of $8.25 to $12 an hour. Disturbingly, taking a pay increase to $18 an hour can leave her with about one-third fewer total resources (net income and government benefits). In order to make work “pay” again, she would need an hourly wage of $38 to mitigate the impact of lost benefits and higher taxes.

Agreeing that there’s a problem does not imply agreement about a solution.

Folks on the left think the solution to high implicit tax rates (i.e., the dependency trap) is to make benefits more widely available. In other words, don’t reduce handouts as income increases.

The other alternative is to make benefits less generous, which will simultaneously reduce implicit tax rates and encourage more work.

I’m sympathetic to the latter approach, but my view is that welfare programs should be designed and financed by state and local governments. We’re far more likely to see innovation as policymakers in different areas experiment with the best ways of preventing serious deprivation while also encouraging self-sufficiency.

I think we’ll find out that benefits should be lower, but maybe we’ll learn in certain cases that benefits should be expanded. But we won’t learn anything so long as there is a one-size-fits-all approach from Washington.

Let’s close with a political observation. A columnist for the New York Times is frustrated that many low-income voters are supporting Republicans because they see how their neighbors are being harmed by dependency:

Parts of the country that depend on the safety-net programs supported by Democrats are increasingly voting for Republicans who favor shredding that net… The people in these communities who are voting Republican in larger proportions are those who are a notch or two up the economic ladder—the sheriff’s deputy, the teacher, the highway worker, the motel clerk, the gas station owner and the coal miner. And their growing allegiance to the Republicans is, in part, a reaction against what they perceive, among those below them on the economic ladder, as a growing dependency on the safety net, the most visible manifestation of downward mobility in their declining towns… I’ve heard variations on this theme all over the country: people railing against the guy across the street who is collecting disability payments but is well enough to go fishing, the families using their food assistance to indulge in steaks.

It’s not my role to pontificate about politics, so I won’t address that part of the column. But I will say that I’ve also found that hostility to welfare is strongest among those who have first-hand knowledge of how dependency hurts people.

P.S. If you want evidence for why Washington should get out of the business of income redistribution, check out this visual depiction of the welfare state:

P.S. The Canadians can teach us some good lessons about welfare reform.

P.P.S. The Nordic nations also provide valuable lessons, at least from the don’t-do-this perspective.

P.P.P.S. Last but not least, there’s a Laffer-type relationship between welfare spending and poverty.

This article was reprinted with permission from International Liberty.

Daniel J. Mitchell

Daniel J. Mitchell is a Washington-based economist who specializes in fiscal policy, particularly tax reform, international tax competition, and the economic burden of government spending. He also serves on the editorial board of the Cayman Financial Review.

EDITORS NOTE: This column with videos and images is republished with permission.

Ron DeSantis Statement on James Madison Institute Study

October 15, 2018/in Culture War, Economy, Elections, Policy, Politics, Taxes/by Dr. Rich Swier

Ron DeSantis released the following statement following the James Madison Institute’s “Election 2018: Platforms, Proposals, Projections” analysis of Florida Governor Candidates’ Economic Platforms:

“Today’s report from the James Madison Institute, a non-partisan, well-respected economic think-tank, proves what we’ve been saying all along—Andrew Gillum’s policies would be an economic disaster for every person in our state,” said Ron DeSantis. “Gillum’s proposals would cost Florida taxpayers $2.6 billion. Additionally, per the study, Florida would lose 150,000 jobs and $28 billion per year. My policies, on the other hand, would create over 200,000 jobs and add $25 billion in annual economic output. Floridians deserve a Governor who will work to ensure they get to keep more of their hard-earned money, create more jobs, and build on the economic success of our state, and that’s exactly what I will do as Governor.”

The James Madison Institute partnered with two of the nation’s leading and most widely respected econometric firms, The Washington Economics Group and Arduin, Laffer, and Moore, to produce this objective and non-partisan analysis of the economic platforms of each of the two major candidates vying to be Florida’s 44th Governor.

“Election 2018: Platforms, Proposals, Projections” dives into the central elements of each candidate’s economic agenda, analyzes the fiscal implications of major proposals, and projects the overall impacts from each on the economic climate of Florida.

EXECUTIVE SUMMARY

Florida faces a once-in-a-generation election in 2018. The confluence of term limits, macro-economic outlook, and the political environment have combined to place Florida as ground zero in the economic policy debate being waged nationwide.

The two candidates running for Governor of Florida could not have more diametrically opposed agendas.

In such a hyper-politicized atmosphere, it is imperative that Floridians become educated on the data and facts that will inform the choice they make on November 6.

Florida currently possesses the 17th largest economy on the planet – one trillion dollars of goods and services will be produced, distributed, and consumed in 2018. Our population has boomed over the past 20 years to more than 20 million residents – an increase of more than 1,000 every single day. Florida’s employment growth over the last two decades has been one of the strongest in the U.S., despite the 2007-2008 recession.

Florida’s economic policy agenda of low and stable taxes, combined with a pro-growth private sector oriented strategy, has led to a top business climate ranking among the 50 U.S. States. This has attracted, retained and expanded business activities, resulting in strong employment expansion among most industry sector categories.

The policy agendas of both principal candidates for governor are radically different, impacting economic activity and employment expansion. Every single sector of our economy will either reap the benefits or suffer the consequences of the decisions our elected leaders make.

Candidate Andrew Gillum’s policy agenda – to increase the corporate tax rate significantly, almost double the minimum wage, sharply expand government-controlled health insurance, and mandate a $50,000 starting salary for teachers – would adversely impact the business climate of the State through higher taxes, a sharply higher minimum wage and State mandates to expand government-controlled health insurance.

All told, the policy agenda Candidate Gillum proposes would require an increase in the corporate tax rate to the 2nd highest in the United States, an increase in Florida’s sales tax to 39 percent, or the imposition of a state income tax as high as 37 percent.

Consequently, the economic impacts of abandoning the current low tax/top business climate rankings of Florida, based on the experience of the higher tax states presented in this brief, would ultimately cost Florida direct employment losses of 155,000 jobs and $28.2 billion in economic losses per year.

Candidate Ron DeSantis agenda – to largely maintain the pro-growth-oriented strategy of Florida through low and stable taxes, would preserve and strengthen the state’s business climate, which supports the attraction, retention and expansion of employment-generating business enterprises. This agenda also includes investing in the “classroom” the savings from lower educational administration costs, and in technical/vocational programs to improve workforce development. Ultimately, this agenda would lead to the creation of 215,000 jobs annually and $26.6 billion in annual economic output.

Elections have consequences, and policy agendas have costs and benefits to them. Ultimately, it is up to Floridians to weigh the costs of each candidate’s agenda and determine what policies will bring about Florida’s more prosperous future.

On November 6, 2018 we will have our say. [Emphasis added]

To read the full report, CLICK HERE.

CORPORATE AMERICA’S WAR ON THE MIDDLE CLASS: H-1B visa program being used to displace Americans.

October 9, 2018/in Economy, Immigration, Policy, Politics, Waste, Fraud and Abuse/by Michael Cutler

Focus on the immigration crisis generally centers on massive numbers of illegal aliens who run our nation’s borders, particularly the violent U.S./Mexican border. Many political Conservatives are quick to take issue with the Democrats who purportedly see in those massive numbers of illegal aliens potential voters who will vote for the Democratic candidates.

Undoubtedly there is some truth to that, but in reality, the leaders of both political parties seek to flood America with foreign workers who are willing to work for substandard wages under substandard, often illegally dangerous conditions.

As I like to say, “There is always room for more oarsmen on a slave ship!”

The exploitation of foreign workers is not, however, limited to aliens who enter the United States illegally without inspection, but also includes aliens who legally work under the auspices of certain nonimmigrant (temporary) visas such as the infamous H-1B visa that permits aliens who have hi-tech education and skills to work because, ostensibly, there is a shortage of available and qualified American workers who are ready, willing and able to take those jobs.

While in some instances this is the case, all too often employers seek foreign workers because workers from Third World countries have Third World expectations of wages and working conditions and therefore will accept much lower wages American workers.

We have seen numerous instances where thousands of American workers were fired by their American employers in the United States, replaced by lower salaried foreign workers, often from India, particularly where IT jobs are concerned. In some instances, these hapless American workers were ordered by their soon-to-be former employers, to train their foreign replacement if they wanted to receive their severance packages.

This betrayal has been a major concern for both President Trump and his Attorney General Jeff Sessions who last year, got support from an unexpected source in the form of a Huffington Post commentary that was published on February 3, 2017. The author was Norm Matloff, a Professor of Computer Science, University of California at Davis.

The very title of his piece makes his position abundantly clear, Trump Is Right: Silicon Valley is Using H-1B Visas to Pay Low Wages to Immigrants. The subtitle went on to note, This drafted executive order could actually mean higher wages for both foreign workers and Americans working in Silicon Valley.

Here is an important excerpt from the article:

In a 2012 meeting between Google and several researchers, including myself, the firm explained the advantage of hiring foreign workers: the company can’t prevent the departure of Americans, but the foreign workers are stuck. David Swaim, an immigration lawyer who designed Texas Instruments’ immigration policy and is now in private practice, overtly urges employers to hire foreign students instead of Americans.

This stranglehold on foreign workers enables firms to pay low wages. Academics with industry funding claim otherwise, but one can see how it makes basic economic sense: If a worker is not a free agent in the labor market, she cannot swing the best salary deal. And while the industry’s clout gives it bipartisan congressional support concerning H-1B and green card policy, Congress’s own commissioned report found that H-1B workers “received lower wages, less senior job titles, smaller signing bonuses and smaller pay and compensation increases than would be typical for the work they actually did.”

Consequently, the Trump administration issued an Executive Order to have USCIS (United States Citizenship and Immigration Services), the division of the DHS that adjudicates applications for various immigration benefits, begin to issue Notices to Appear (NTA’s) to aliens whose applications for immigration benefits are denied, such as applications to extend the authorized period of admission for a nonimmigrant (temporary visitor).

The NTA is the equivalent of a summons that orders that the alien appear before an Immigration Judge who may order that alien deported (removed) from the United States.

On September 27, 2018 USCIS issued a policy memorandum (PM) that clarified the administration’s policies on the issuance of NTA’s. Disappointingly, the memo noted that employment-based petitions and humanitarian applications are exempt this program.

This is a reasonable approach because the legal remedy for an alien who violates his/her terms of admission is to required that they leave the United States.

When a guest at a hotel reserves a room for a specific number of days, that guest is required to vacate that room when his/her reservation expires. No one would say that the hotel that insists that the guest leaves to free the room for other guests is being evicted. Similarly, temporary (nonimmigrant) visitors to the United States are expected to depart from the U.S. when their authorized period of admission expires.

Aliens who violate the terms of their lawful admissions are no less illegally present than aliens who run our borders.

Nevertheless, on October 1, 2018 The India Times published a report, Expired visa? From October 1, US to start deportation proceedings.

On September 26, 2018 another website, True Visa, posted an article that was clearly opposed to this policy, USCIS allows deportation proceeding after H1B Extension or Transfer Denial.

In countering the Trump’s policies, the website included an internal memo from the Obama administration issued on November 7, 2011. Here is the sentence that includes the link:

Before this change, a criminal conviction was required to be deported forcefully by issuing NTA. Refer 2011’s USCIS policy on NTA.

The posting also noted, however that the Trump administration was, to an extent, backing down where H-1B visa holders, as opposed to all other visa categories, are concerned. For now, H-1B visa holders will not be issued NTA’s when their authorized period expires.

What is disconcerting is how/why the Trump administration apparently came to this decision. The article also included a link to a letter to the DHS signed by a veritable “Who’s Who” of corporate executives, particularly from Silicon Valley, making the claim that America needs these huge numbers of H-1B visa workers because Americans are not available and ready, willing and able to do these hi-tech jobs.

Here is the excerpt from this website that includes the link to that letter from the Business Roundtable:

Update August 24, 2018

Business Roundtable has sent an official letter to USCIS on their recent policy changes and how they affect the H1B families.

Letter in support of H1B is signed by Apple, ADP, American Airlines, Pepsi, Coca Cola among other CEOs to rethink their NTA policy:

In September 2016 the National Bureau of Economic Research published a working paper on the topic of High-Skilled Immigration and the Rise of Stem Occupations in U.S. Employment.

The paper made a number of statements that need to be carefully analyzed. For example, the paper reported:

Immigrants account for a disproportionate share of jobs in STEM occupations, in particular among younger workers and among workers with a master’s degree or PhD. Foreign-born presence is most pronounced in computer-related occupations, such as software programming.

e United States that noted:

In 2013, approximately 61.6 million individuals, foreign and U.S. born, spoke a language other than English at home. While the majority of these individuals also spoke English with native fluency or very well, about 41 percent (25.1 million) were considered Limited English Proficient (LEP). Limited English proficiency refers to anyone above the age of 5 who reported speaking English less than “very well,” as classified by the U.S. Census Bureau. Though most LEP individuals are immigrants, nearly 19 percent (4.7 million) were born in the United States, most to immigrant parents. Overall, the LEP population represented 8 percent of the total U.S. population ages 5 and older.

Ultimately, however, there will be a shortage of American STEM professionals as more American workers are displaced by foreign workers and American students will find it increasingly difficult if not outright impossible to get jobs for which they trained.

Education is supposed to be an investment. Students expend time and money to acquire an education and skills that will prepare them for success in the future. Today Americans are finding roadblocks have been erected by American companies and their political allies, to block their progress while our nation’s borders that are supposed to protect Americans, have been taken down particularly where foreign workers are concerned.

On April 30, 2009 Alan Greenspan, the former chairman of the Federal Reserve Bank testified before a hearing called by Chuck Schumer, then chairman of the Senate Immigration Subcommittee on the topic, “Comprehensive Immigration Reform in 2009, Can We Do It and How?”

Greenspan’s prepared testimony included this statement concerning the supposed “benefit” to opening up the number of H-1B visas:

The second bonus would address the increasing concentration of income in this country. Greatly expanding our quotas for the highly skilled would lower wage premiums of skilled over lesser skilled. Skill shortages in America exist because we are shielding our skilled labor force from world competition. Quotas have been substituted for the wage pricing mechanism. In the process, we have created a privileged elite whose incomes are being supported at noncompetitively high levels by immigration quotas on skilled professionals. Eliminating such restrictions would reduce at least some of our income inequality.

Unscrupulous and un-American employers are obviously taking the advice of Alan Greenspan, who has long been an advocate for driving down wages of highly skilled Americans by making them compete with foreign workers.

EDITORS NOTE: This column with photographs originally appeared on FrontPage Magazine. Republished with permission.

Cuban Doctors Say They Are Treated Like Slaves

October 8, 2018/in Culture War, Economy, Healthcare, Policy, Politics, Regulation, Waste, Fraud and Abuse/by Foundation for Economic Education (FEE)

You are trained in Cuba and our education is free. Health care is free, but at what price? You wind up paying for it your whole life.” –Dr. Yaili Jiménez Gutierrez

In 2013, the World Health Organization brokered a deal through which Cuba would export doctors to Brazil to serve in its poorest and most remote areas. Yet as Brazil began to reap the benefits of improved care and decreased mortality rates, the Cuban doctors began to see their home’s regime in a new light.

Freedom versus Slavery

“When you leave Cuba for the first time, you discover many things that you had been blind to,” says Yaili Jiménez Gutierrez, one of the program’s doctors, in a New York Times profile. “There comes a time when you get tired of being a slave.”

The Cuban doctors began noticing the disparity in their government’s “take” from the Brazilian government—nearly four times their own salary—as well as the higher wages and greater freedoms enjoyed by their fellow “export doctors” from other participating countries.

“We began to see that the conditions for the other doctors were totally different,” Jiménez explains. “They could be with their family, bring their kids. The salaries were much higher.”

In response, more than 150 Cuban doctors have now filed lawsuits in Brazilian courts, claiming equality protections under Brazil’s constitution and requesting that they remain in the country as independent contractors with the ability to earn a full salary.

The New York Times summarizes the situation as follows:

The seeds of the rebellion were planted a year ago in a conversation between a Cuban doctor and a clergyman in a remote village in northeastern Brazil.

Anis Deli Grana de Carvalho, a doctor from Cuba, was coming to the end of her three‑year medical assignment. But having married a Brazilian man, she wanted to stay and keep working. The pastor was outraged to learn that, under the terms of their employment, Cuban doctors earn only about a quarter of the amount the Brazilian government pays Cuba for their services.

…In late September of last year, she sued in federal court to work as an independent contractor. Within weeks, scores of other Cuban doctors followed Dr. Grana’s lead and filed suits in Brazilian courts.

As for how the Cuban government has responded thus far, some have been allowed to keep their jobs or return home, while others were fired and face exile:

Late last year, judges issued temporary injunctions in some cases, granting Cuban doctors the right to remain as independent contractors, earning full wages. One federal judge in the capital denounced the Cuban contracts as a “form of slave labor” that could not be tolerated.

But the federal judge who handled Dr. Grana’s case ruled against her, finding that allowing Cuban doctors to walk away from their contracts posed “undue risks in the political and diplomatic spheres.”

Soon after the first injunctions were issued, Cuban supervisors in Brazil summoned doctors who had filed suits and fired them on the spot, several doctors said. Each was given the chance to get on a plane to Cuba within 24 hours — or face exile for eight years.

The costs have been high for those who left family behind in order to pursue a better livelihood or improve their prospects upon returning home. But for many, the risks have been well worth it.

“It’s sad to leave your family and friends and your homeland,” says Maireilys Álvarez Rodríguez, a doctor who sued the government but managed to keep her job and bring her children to Brazil. “But here we’re in a country where you’re free, where no one asks you where you’re going, or tells you what you have to do. In Cuba, your life is dictated by the government.”

“Equality” Creates Oppression

We routinely hear critics of capitalism decry the supposed injustices of free wages set by free markets driven by the actions free people. Without the steady hand of heavy government control and redistribution—we are told—the ideals of equality and justice will never prevail.

Yet note how, in the present case, we see doctors from Cuba—a land that supposedly places excessive priority on “equality”—running from their government to the Brazilian constitution for equality protections. The irony is painful and shows the illusory nature of an equality based only on material outputs.

Without true freedom, self-constructed, arbitrary, materialistic notions about “equality” quickly devolve, crowding out new growth and creating other disparities in the process, whether among neighbors abroad or among workers at home.

Likewise, when given a taste of freedom, the view gets clearer, and the supposed communist ideals of “equality” are quickly placed in the context of what’s truly at the driver’s seat: control.

This article was reprinted with permission from the Acton Institute.

Joseph Sunde

Joseph Sunde is an associate editor and writer for the Acton Institute. His work has appeared in venues such as The Federalist, First Things, Intellectual Takeout, The City, The Christian Post, The Stream, Patheos, LifeSiteNews, Charisma News, The Green Room, Juicy Ecumenism, Ethika Politika, Made to Flourish, and the Center for Faith and Work. Joseph resides in Minneapolis, Minnesota with his wife and four children.

Is Amazon’s Minimum Wage Move a Political Ploy?

October 3, 2018/in Culture War, Economy, Policy, Politics, Waste, Fraud and Abuse/by Foundation for Economic Education (FEE)

Amazon made headlines yesterday after it announced it would raise its minimum wage to $15 an hour, a move that will impact more than 350,000 of its U.S. employees beginning November 1st. This decision came in the wake of harsh criticisms claiming that the online retailer both underpays and mistreats its workers. And while these accusations are largely exaggerated if not completely unfounded, CEO Jeff Bezos still caved in and appeased his critics.

To be sure, it is better for a private company to raise its own wage rates than for it to be forced to by the government. But how voluntary is it really when you have powerful government figures constantly making threats against the company? The minimum wage may be an act made under duress, in order to forestall government regulation and punishment.

Moreover, before we roll out the red carpet and celebrate Bezos for this move, it would be wise to take a closer look at why he did it. Once you look beneath the surface, the company’s motives seem less than pure.

The War on Amazon

Amazon is by no means an underdog in the world of online retail. However, while the company is beloved by consumers, it has been the target of politicians and leftists who hate the rich and are obsessed with income inequality. The higher Jeff Bezos’ net worth rises, the more criticism he seems to attract. But this criticism isn’t limited to the left alone.

President Trump has had a has had a love affair with condemning the company and has even accused Bezos of killing American jobs and chastised him for taking advantage of corporate tax breaks. Trump has also frequently blamed the company for the death of brick-and-mortar retailers, as well as for owning The Washington Post, which is sometimes critical of the president. But most of the flack Bezos’ has received has come from the left.

Senator Elizabeth Warren has routinely attacked the company and accused it of violating antitrust laws. And in a not-so-subtle blow, Senator Bernie Sanders recently introduced a bill blatantly named the “Stop BEZOS Act.” While the bill’s title is actually an acronym for “Stop Bad Employers by Zeroing Out Subsidies Act,” its name was clearly not an accident.

Sanders’s bill is a direct attack on Amazon and seeks to levy a 100 percent tax on government benefits, like food stamps, utilized by its employees. Though the bill would apply to any company with over 500 employees, Sanders called out Amazon by name and accused Bezos of paying his employees so little that they had no choice but to turn to the government for help.

Sanders also commented:

In other words, the taxpayers of this country would no longer be subsidizing the wealthiest people in this country who are paying their workers inadequate wages. Despite low unemployment, we end up having tens of millions of Americans working at wages that are just so low that they can’t adequately take care of their families.

The bill was introduced last month, right after it was announced that Amazon’s market cap had reached $1 trillion and that Bezos was now the richest man in the world—a level of success that progressives like Sanders despise. But accusing the company of forcing its employees on food stamps is extremely misleading. Many of Amazon’s employees are temp or seasonal workers who were already using government welfare programs prior to their employment with the company. In fact, when Snopes dug deeper into the claim, it found that 11.8 percent of Amazon’s Ohio employees might be on food stamps, but that this number was merely an estimate that could not be confirmed.

This perpetual criticism from progressives has turned Bezos into something of a hero to those who support the free market. But this latest wage increase may change all that, as it has led many to wonder if the tables have turned and the bullied has now become the bully.

The Bullied Becomes the Bully

It is one thing for Amazon to independently come to this decision on its own and to take it upon itself to actively encourage other companies to do the same. After all, in a truly free market, it would be up to each company to work with its employees to set wage rates without the government intervening. But that isn’t what Amazon has done. Instead, Bezos also recently announced that it would begin lobbying for an increase in the federal minimum wage, using the government to coerce other companies into raising their rates, as well. And the timing of this decision was not random.

The Wall Street Journal has astutely described Bezos’ decision as “political insurance.” Not only does the wage increase help the company look more sympathetic and provide some protection against the likes of Sanders and Warren, but it also helps squash the competition.

As it stands today, the market for warehouse workers is highly competitive. And with the holiday season quickly approaching, online retailers will be hiring a decent number of seasonal employees to keep up with increased consumer demand. Amazon, for example, plans to hire 100,000 temporary employees this season. And for the companies who cannot afford to shell out $15 an hour for seasonal employees, this means missing out on high-quality workers.

Competition, and especially competition for highly-skilled workers, is key to the market process, but this is not what Bezos is doing. As the Wall Street Journal says, “Mr. Bezos’s $15 wage would be a lot more praiseworthy if he hadn’t combined it with a plea for government to raise the labor costs of his competitors.” But unfortunately, the situation is actually even murkier than this.

Amazon has already begun automating many of its warehouse positions, especially in China. In fact, one of its warehouses in China currently has only four human workers. With the rapid rate in which Amazon has been automating, it is likely that the rise in the minimum wage won’t really impact the company. If only a handful of your employees are human, then raising the minimum wage means very little. And since other companies cannot afford to incorporate AI as quickly as Bezos can, this puts the competition in a rough spot.

Again, all this would be fine if Amazon wasn’t simultaneously pushing for the government to get involved in regulating the wage rates of its competitors, intentionally putting them at a disadvantage.

Summing up the entire situation perfectly, financial investor and commentator Peter Schiff writes:

Bezos is no fool. He will reduce his headcount, and step up his automation effort to eliminate as many low-skilled jobs from Amazon. Then he will lobby Congress to increase the minimum wage for his competitors that still employ lower-skilled workers. As these competitors will lack the resources to automate, they will be driven out of business, and all their workers will lose their jobs. Less competition will make it easier for Amazon to raise prices.

As an entrepreneur, Jeff Bezos is an absolute hero and a benefactor of the human race. But our crony-capitalist political system can corrupt even the best of us.

COLUMN BY

Brittany Hunter

Brittany is a writer and editor for the Foundation for Economic Education. Additionally, she is a co-host of Beltway Banthas, a podcast that combines Star Wars and politics. Brittany believes that the most effective way to promote individual liberty and free-market economics is by telling timely stories that highlight timeless principles.

EDITORS NOTE: This column with images was republished with permission.

Promise Kept. NAFTA Gone.

October 2, 2018/in Culture War, Economy, Policy, Politics, Waste, Fraud and Abuse/by Dr. Julio Gonzalez

A deal experts said was dead in the water materialized over the weekend when Canada announced it had reached an agreement with the United States to replace the North American Free Trade Agreement (NAFTA). The deal came about as a frustrated Prime Minister Justin Trudeau called a late night meeting with his cabinet. Indeed, the materialization of an agreement serving to improve America’s trade position in North America would not have occurred were it not for the negotiating prowess and vision of President Donald Trump.

The workings of the trade deal actually date back to before President Trump’s election. From the beginning of his campaign, then-Candidate Trump voiced his frustration at the United States’ involvement in a deal that was hurting American workers. Calling them “bad deals,” Trump expressed his befuddlement at how politicians could agree to such catastrophic trade deals. NAFTA quickly became a centerpiece of Trump’s campaign for president and the object of his ridicule.

Upon assuming power, President Trump wasted no time threatening the stability of NAFTA by announcing his intention to pull the United States out of it. Predictably, the naysayers took to the airwaves, arguing that NAFTA was a creator of jobs. Investor Dennis Gartman called such a move, “egregiously stupid,” and CNBC proudly published his opinion. Meanwhile at Forbes Magazine, Professor J. Bradford DeLong called the prospect of leaving NAFTA, “a disaster” while Stuart Anderson, the author of the article, mocked Trump by stating that visual aids were needed to teach the President why leaving NAFTA was a bad idea. Anderson held nothing back when he concluded, “Donald Trump does not know much about the trade agreement he has so frequently criticized.”

Undeterred, President Trump continued to place his disapproval of NAFTA at the center of public discourse. Recognizing his greater advantage over Mexico, he then pealed America’s southern neighbor into a separate agreement that did not include Canada calling it a “terrific agreement for everybody.”

With the Mexican trade deal solidified, Trump turned his attention to Canada, this time suggesting that he might leave Canada out of the deal if it did not negotiate.

Canada remained defiant. “We will only sign a new NAFTA that is good for Canada and good for the middle class,” said a spokesman for Canadian Foreign Minister Chrystia Freeland. For Canada, there were a number of sticking points to a new deal. First the NAFTA dispute resolution process that protected the cultural exemptions was “fundamental.” This “exemption” protected Canadian artistic products, including media outlets. Understandably, Canadians feel threatened that American networks might buy Canadian media affiliates and essentially control their media coverage. Further, the abandonment of Canada’s tariffs on American dairy products was considered too great a threat to be acceptable.

But President Trump remained undeterred. He imposed an October 1 deadline upon Canada, insisting that if it did not provide the text for a new trade deal to the United States Congress by that time he would move ahead with the deal with Mexico and exclude Canada.

Trudeau did the only thing he could and called for “common sense to prevail.” He appealed to Canada’s partners, including the European Union, to ramp up their pressure on the United States. But the reality was that Canada could ill afford to be kept out of a new North American trade agreement. The Canadian dollar was weakening, and the prospect of Canada continuing without a treaty seemed like a doomsday scenario for its economy; and for Trudeau’s impending reelection.

With negotiations seemingly hopelessly stalled as recently as late September, Canadian negotiators went to work. And by Sunday, September 30, the two countries agreed to terms. The new agreement, known as the United States-Mexico-Canada Agreement (USMCA) is nothing short of revolutionary. Among other provisions, the USMCA curbs Canada’s high tariffs and low quotas on American dairy product; drops the percentage of a car needing to be manufactured in China that would still allow it to be considered “North American;” includes provisions that help NFL advertising; and forces Canada and Mexico to respect American drug patents for ten years. And Canada gets to keep its cultural resolution process exemption.

In a very real sense, the trade deal vindicates President Trump. He identified a palpable problem in North American trade and placed his political capital on the line to see it terminated. As a result, Trump emerged much stronger, an important perception at a time when he is knee deep in trade negotiations with China. But more importantly, President Trump’s priority of protecting American workers and improving the environment for American businesses prevailed.

There is also the glaring realization that these new agreements would have never come to fruition without President Trump. The events leading to Sunday’s breakthrough would never have been possible without Trump’s aggressive, even bombastic style. Most importantly, when President Trump said he would walk away from the deal, he was believable, forcing all players to look hard at the possibility of having no deal at all.

Say what you want about President Trump, he has become America’s greatest weapon in international negotiations, much to the joy of the American worker.

EDITORS NOTE: This column originally appeared in The Federalist Pages. The featured photo by David Everett Strickler on Unsplash.

How Trump Rescued Our Economy From Obama’s ‘New Normal’

October 1, 2018/in Economy, Policy, Regulation/by The Daily Signal

It’s hard to believe that just two short years ago, our economy was limping along with no sign of a massive boom around the corner.

Beyond any shadow of a doubt, the pivotal factor in the last two years has been President Donald Trump.

Consider this. From 2009 to 2014, real median income fell overall. It did jump a few times between 2012 and 2014, but the overall trend was one of malaise. The reason? President Barack Obama’s regulations and taxes sat like a wet blanket over our economy.

Many of his policies aimed at curing perceived social injustices rather than promoting economic growth. He reasoned that it was an injustice that every American did not have health insurance, and that CEOs made hundreds of times more income than the average worker. It was also an injustice that banks and big business took advantage of consumers.

Obama convinced Congress to pass Obamacare in 2010, which resulted in health insurance being extended to an additional 6 percent of the population. But Obamacare came with new taxes—21 to be exact—and these helped suppress middle-class income, slowing economic growth.

Obamacare also forced employers to provide health insurance to all full-time workers or pay a fine, which could be as high as $3,000 per employee. This added to the cost of labor, which again had the effect of slowing growth. Since Obama defined a full-time employee as anyone working at least 30 hours per week, employers hired more part-time workers. This drove down household income and slowed economic growth.

Obama also made the 2001 Bush tax cuts permanent for all Americans, except for the highest income earners. For them, taxes increased by 10 percent. This reduced the amount of investment capital flowing into our economy, which slowed economic growth and tended to reduce household income.

Obama also said that the financial crisis was a result of predatory lending by banks. This occurred when households freely applied for mortgages that they simply could not afford. Because Fannie Mae and Freddie Mac were buying these predatory mortgages from banks, the banks made those loans.

Obama convinced Congress to pass the Dodd-Frank bill, which stopped banks from predatory lending. The problem was that Dodd-Frank reduced all lending, which slowed economic growth and resulted in countless small community banks having to close their doors.

And yet again, this had the effect of reducing household income.

It’s no wonder that Obama was the only president in history to never see economic growth above 3 percent. The economy averaged just over 2 percent for his entire two terms. He referred to 2 percent growth as the “new normal.”

Trump flatly rejected this “new normal.” After entering office in January 2017, he spent much of February and March reversing many of Obama’s counterproductive regulations. By April 2017, the economy was back growing at a healthy 3 percent, which has since been maintained or increased.

By the end of 2017, Trump had convinced Congress to cut income taxes for all Americans, including those who supply capital: high income-earners and corporations. Since April of this year, the economy has been booming at a rate of more than 4 percent.

That growth has driven down underemployment, increased the proportion of Americans in the labor force, increased the number of part-time employees finding full-time work, boosted wages, and reduced the unemployment rate overall.

This all will lead to ever higher incomes for families. The real median income is set to hit a record level by the end of 2018.

Some have said that most of the growth will affect the highest income-earners. Whatever benefit they are getting (and they are certainly getting a lot), the facts are plain and simple: Over 700 companies have boosted wages, given bonuses and other benefits to their employees because of tax reform.

As President John F. Kennedy said, “A rising tide will lift all boats.” It’s happening. Why would we try anything else?

COMMENTARY BY

Michael Busler

Michael Busler, Ph.D. is a public policy analyst and a professor of finance at Stockton University. Twitter: @mbusler.

The Daily Signal depends on the support of readers like you. Donate now

EDITORS NOTE: This column is reprinted with permission. The featured image of President Donald J. Trump is by Kevin Dietsch/UPI/Newscom.

CFACT public comment on Administration’s Endangered Species Act reform

September 28, 2018/in Economy, Policy, Politics, Regulation, Science/by Committee For A Constructive Tomorrow

Public Comments on the U.S. Fish and Wildlife Service’s (FWS) and the National Oceanographic and Atmospheric Administration’s Fishery Service’s (NOAA Fisheries)

Proposed Revisions to Regulations Implementing the Endangered Species Act (ESA)

Submitted by Bonner R. Cohen, Ph. D.,

Committee for a Constructive Tomorrow

September 17, 2018

Revisions of Regulations for Listing Species and Designating Critical Habitat and Revisions of the Regulations for Prohibitions to Threatened Wildlife and Plants

Several proposed changes relate to section 4 of the ESA, which deals with procedures for listing species recovery and designating critical habitat (areas deemed essential to support the conservation of a species). There are two key provisions in this section of the proposal. First, FWS and NOAA propose to revise the procedures for designating critical habitat by reinstating the requirement that they will first evaluate areas currently occupied by the species before considering unoccupied areas. Second, the agencies propose to clarify when they may determine that unoccupied areas are essential to the conservation of a species.

The proposal dealing with unoccupied critical habitat is no doubt rooted in the case of the dusky gopher frog. FWS’s designation several years ago of 1,544 acres of forested land in St. Tammany Parish, Louisiana as critical habitat for the endangered frog has triggered a legal dispute that is now before the U.S. Supreme Court. The Louisiana land in question contains no dusky gopher frogs. In fact, the only such frogs known to exist are in neighboring Mississippi. The designation of the unoccupied Louisiana land as critical habitat has devalued the property by an estimated $20 million. The case underscores the importance of the proposed revisions to the ESA’s critical habitat provisions.

By limiting the power of officials implementing the ESA so that they can no longer designate an area as critical habitat that is not currently, or even in the recent past, occupied by an endangered or threatened species, the proposed revision restores a much-needed measure of integrity to implementation of the statute. It also gives landowners some assurance that their property will not be arbitrarily designated as critical habitat for a listed species that does not reside there.

Vague language is a problem with many laws, and the ESA is no exception. The ESA defines a threatened species as one that is likely to become in danger of extinction within the “foreseeable future.” But the statute provides no definition of “foreseeable future.” For the first time, the reform proposals contain an interpretation of “foreseeable future” that makes it clear that it extends only so far that it can be reasonably be determined that both the future threats and the species’ response to those threats are probable.

In a similar vein, the proposal seeks to clear up confusion on what constitutes “destruction or adverse modification” of critical habitat under section 7 of the ESA. The ESA provides no definition, leaving it to regulators to apply the term as they see fit. The proposed rule simplifies and clarifies the definition by removing redundant and confusing language. This confusion has led to protracted litigation that has benefited neither species nor landowners and has been one of the key reasons behind the slow recovery of species.

Over the decades, government officials have developed different standards for listing and delisting a species. This has resulted in substantial delays in getting a recovered species removed from the endangered species list. The proposal seeks to have the same standard used to delist that are applied to list a species and will curtail the ESA’s often arbitrary enforcement.

In a significant change of policy, the Fish and Wildlife Service is proposing to rescind its blanket rule under section 4c of the ESA, which automatically conveyed the same protections to threatened species as for endangered species. The distinction between the two categories has become blurred over the years, and the administration’s proposal would end that practice, thereby restoring the original intent of the law.

Revision of Regulations for Interagency Cooperation

Poorly coordinated interagency cooperation has been a hallmark of ESA implementation since the statute was enacted in 1973. This has raised the level of confusion for communities harboring endangered species and brought additional and absolutely unnecessary delays to the recovery process. By clarifying how biological opinions and interagency submissions are to be formulated, the proposal will avoid, minimize, or off-set adverse effects on listed species and their habitats when conducting interagency consultations.

In summary, the biggest losers in the way the ESA has been enforced over the past 45 years have been landowners with listed species on their property and the species themselves. Landowners have been punished for having listed species on their land and have been given little if any incentives to cooperate in their recovery. Taken as a whole, the steps proposed by FWS and NOAA Fisheries will break some of the bureaucratic logjams that have plagued the ESA from the outset, and begin to give landowners incentives to restore and improve endangered species’ habitat.

About the Author: Bonner Cohen, Ph. D.

Bonner R. Cohen, Ph. D., is a senior policy analyst with CFACT.

EDITORS NOTE: The featured photo is by Jack Hamilton on Unsplash. Republished with permission.

Building a better world for female entrepreneurs

September 28, 2018/in Culture War, Economy, Labor & Unions, Policy, Regulation/by Dr. Rich Swier

While in New York for the 73rd Session of the United Nations General Assembly (UNGA), Advisor to the President Ivanka Trump took some time to focus on a message central to her work in the White House: economic empowerment for women across the globe.

“We know that investing in women is a priority in terms of our global security, in terms global prosperity, in terms of global peace. We also know that women around the world are one of the greatest under-tapped resources. When you invest in women, they invest back into their communities, they can invest back into their families, they invest in things that have a generational impact on their societies,” Ms. Trump said.

“At #UNGA 2018, I had the honor of joining @WorldBank @JimYongKim, @ConcordiaSummit + global leaders for impactful discussions on #WomensEconomicEmpowerment in furtherance of @POTUS’s National Security Strategy, as we strive for peace, prosperity & stability at home & abroad,” she tweeted.

Watch Ivanka Trump talk women’s economic empowerment at UNGA 2018:

EDITORS NOTE: The featured image of First Lady Melania Trump is courtesy of the White House.

Giving Credit Where Babies Are Due

September 28, 2018/in Economy, Policy, Regulation, Taxes/by Family Research Council

While the world’s eyes were on Brett Kavanaugh, the U.S. House did something worth celebrating!

After watching a year of trying, Republicans managed to do something no other Congress has done: they recognized the humanity of the unborn child in the U.S. tax code.Some of you might remember this debate from last year, when Republicans finally managed to pass the first round of tax cuts. As part of that bill, pro-lifers had worked to write this same provision into the language on 529 education savings accounts (ESAs). We were disappointed when Senator Steve Daines’s (R-Mt.) idea to give unborn children a tax credit never materialized, along with the House’s push to give expectant parents the opportunity to start planning for their future kids their ESAs. But unfortunately, those were the natural casualties of the reconciliation process. Unlike the House, which has a lot more freedom to think creatively, Senator Mitch McConnell’s (R-Ky.) party had to work within the tight confines of the budget rules. And when it came to this tax credit, Republicans would’ve had to prove to the parliamentarian that the concepts weren’t overly policy-driven. In the end, it proved too much of a struggle, and they dropped it.

That shouldn’t be a problem this time around, thanks to Rep. Mike Kelly’s (R-Pa.) Family Savings Account Act — part of the GOP’s second basket of tax cuts that are working their way to President Trump’s desk. This afternoon, the House passed the bill on to the Senate, giving parents, grandparents, or other relatives the unprecedented opportunity to open a 529 plan for an unborn child and begin to save for that child’s education.

But the good news didn’t stop there. The proposal also took a major pro-adoption step by letting people withdraw money from their retirement funds — without penalty — if it’s specifically used to pay for the costs associated with raising a child. Then, rescuing another part of last year’s tax bill that ended up on the cutting room floor, conservatives finally leveled the playing field for homeschool families, who weren’t allowed to participate in 529 education savings accounts — even though parents who enroll kids in private and religious schools could. This bill put an end to that discrimination and removes an obstacle for millions of moms and dads in exercising their right to educate their kids the way they see fit.

The House did its job. Now it’s time for senators to do theirs. Help us move the Family Savings Account Act to President Trump’s desk by contacting your senators. When families thrive, everyone benefits!

Tony Perkins’ Washington Update is written with the aid of FRC senior writers.

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EDITORS NOTE: This column originally appeared in Tony Perkins Washington Update. It is republished with permission.

Blame Cuba for the Mass Exodus from Nicaragua and Venezuela, not the U.S.

September 26, 2018/in Culture War, Economy, Must Read, Policy, Politics, Waste, Fraud and Abuse/by Foundation for Economic Education (FEE)

ontrary to statements from the former president of Spain, José Luis Rodríguez Zapatero, who alleges that sanctions issued by the United States are to blame for the current exodus from Venezuela, exiles affirm that the fault for the current exodus actually lies with Havana, not the United States.

Cuba’s Communist Oligarchy

“In Cuba, Venezuela, and Nicaragua there are three different governments, and they are the same regime: a Communist regime controlled by Castro’s intelligence services, which is using these countries to keep the Communist oligarchy in power,” said Orlando Gutiérrez Boronat of the Cuban Democratic Directorate.

“That is why the Cubans, Venezuelans, and Nicaraguans who are in struggle, who are in open resistance, against Sandinismo, have the support of the Cuban people, of the Assembly of the Cuban Resistance, in these key moments to free Cuba, Nicaragua, and Venezuela,” he says.

For his part, Juan José López-Díaz, an exiled Cuban lawyer and activist, argues that “the common enemy is Communism, this socialism of the 21st century, which has plundered Venezuela, which is destroying Nicaragua, and which has destroyed Cuba.”

“I feel very honored that the people who maintain an uncompromising position against this Latin American Communism that is damaging the freedom and prosperity of our peoples, come together to fight against it,” he concludes.

However, Zapatero, who presided over the motherland (from which Cuba was the last Latin American colony to gain independence), now argues that the United States is to blame for the current Venezuelan exodus. It should be noted that Zapatero was an observer of the widely criticized Venezuelan elections and did not notice any irregularities— even though key sectors of the opposition could not participate.

Communism Depends on Free Markets

It is curious that the defenders of socialism blame the misery in Cuba on the United States because of the embargo (which, of course, is not a blockade). Today they apply the same reasoning to Venezuela. Confessing that the solution is to turn to free markets, the irony is lost on them entirely.

“As always happens with the economic sanctions that produce a financial blockade, who ultimately pays the price is not the government, but the citizens, the people. This should lead to some reflection and consideration,” Zapatero said during a forum in Sao Paulo.

It was precisely in that city that, together with the union leader who later became president and is now imprisoned for corruption, Lula Da Silva, Fidel Castro set up the Sao Paulo Forum, which reorganized internationalist socialism after the fall of the Berlin Wall and served to rally the socialist bloc in Latin America, giving voice to their Marxist ambitions.

Brazil’s role was key because its geographic location (bordering all South American countries except Ecuador) was useful for logistics. Venezuela’s role would be to provide resources, thanks to oil.

Amid Chavez’s triumph in Venezuela, he gave Cuba more money than the Soviet Union did in almost 30 years. That is, Cuba went from feeding off of one socialist state to plundering another.

From January to May of 2018, Venezuela’s state-run oil company (PDVSA) delivered 11.74 million barrels (about 49,000 per day) of oil to Cuba. PDVSA has sent the regime an additional 4.19 million barrels since June.

Although the company is in such a crisis that it sells its oil to the United States and buys gasoline with the proceeds, they are still more than happy to give oil away to Cuba. At the same time, this shows that the blockade alleged by Zapatero and the defenders of socialism still allows for business between the two countries and does not prevent Venezuela from collaborating with its allies who are, in turn, historical enemies of the United States.

The Resistance Continues

Recently, exiles from Cuba, Venezuela, and Nicaragua met to repudiate the same regime and system that oppresses their respective countries: the Castros and socialism.

On September 15, in Little Havana, the exiles paid tribute to Nestor Izquierdo, who fought in a Cuban anti-communist brigade and later died in Nicaragua fighting against the Sandinista dictatorship, a satellite state of Cuban communists.

That same date marks the independence of Nicaragua and the birth of the Consejo Nueva Nicaragua, a coalition of opposition groups whose objective is “to strengthen the struggle for the liberation of Nicaragua from the Ortega-Murillo dictatorship and the Sandinista National Liberation Front.” The regime’s paramilitary forces have killed 448 Nicaraguans (according to human rights organizations; according to the Ortega government the figure is less than half that) for demonstrating against the government in the streets.

“We are not going to stop until we reach victory. And the victory is nothing other than the freedom of Nicaragua,” Nicaraguan activist Muñeca Fuentes assured the others.

“Long live Cuba! Long live America without Communism!” everyone shouted in unison.

This article was reprinted with permission from PanAm Post.

Mamela Fiallo

Mamela Fiallo Flor is a translator for the PanAm Post. She is a university professor, translator, interpreter, and the co-founder of the Cuban Libertarian Party.

EDITORS NOTE: This column and featured image is reprinted with permission from FEE.

The New York Times Explains Why the Minimum Wage Should Be $0.00

September 26, 2018/in Culture War, Economy, Policy, Politics, Regulation, Waste, Fraud and Abuse/by Foundation for Economic Education (FEE)

The minimum wage is the Jason Vorhees of economics. It just won’t die.

No matter how many jobs the minimum wage destroys, no matter how many times you debunk it, it always comes back to wreak more havoc.

Economic Literacy from an Unexpected Source

We’ve covered the issues at length at FEE, and quite effectively, if I do say so myself. But I have to admit that one of the greatest takedowns of the minimum wage you’ll ever find comes from an unlikely place: The New York Times.

There are many reasons people and politicians find the minimum wage attractive, of course. But the Times, in an editorial entitled “The Right Minimum Wage: 0.00,” skillfully rebuts each of these reasons in turn.

Noting that the federal minimum wage has been frozen for some six years, the Times admits that it’s no wonder that organized labor is pressuring politicians to increase the federal minimum wage to raise the standard of living for poorer working Americans.

“No wonder. But still a mistake,” the Times explains. “There’s a virtual consensus among economists that the minimum wage is an idea whose time has passed.”

But why has the idea “passed”? Why would raising the minimum wage not help the working poor?

“Raising the minimum wage by a substantial amount would price working poor people out of the job market,” the editors explain.

But wouldn’t the minimum wage increase the purchasing power of low-income Americans? Wouldn’t a meaningful increase allow a single breadwinner to support a family of three and actually be above the official U.S. poverty line?

Ideally, yes. But there are unseen problems, as the editors point out:

There are catches…[A higher minimum wage] would increase employers’ incentives to evade the law, expanding the underground economy. More important, it would increase unemployment: Raise the legal minimum price of labor above the productivity of the least skilled workers and fewer will be hired.

But if that’s true, why would progressives support such a law? What’s their rationale for supporting a minimum wage if it does more harm than good? Is it sheer political opportunism?

Not necessarily. The Times explains:

A higher minimum would undoubtedly raise the living standard of the majority of low-wage workers who could keep their jobs. That gain, it is argued, would justify the sacrifice of the minority who became unemployable.

There’s just one problem with this logic, the editors say:

The argument isn’t convincing. Those at greatest risk from a higher minimum would be young, poor workers, who already face formidable barriers to getting and keeping jobs. The idea of using a minimum wage to overcome poverty is old, honorable – and fundamentally flawed. It’s time to put this hoary debate behind us, and find a better way to improve the lives of people who work very hard for very little.

Times Have Changed

It’s a compelling, reasoned, and erudite argument. But it’s not exactly what one expects to see in The New York Times these days. (A naughty person might say the same about reason and erudition in general in the paper.)

So what gives? Alas, the editorial is a relic. It was written way, way back in 1987. A lot has changed since then.

We’ve had a couple wars. The internet was introduced to the masses. There was 9-11. We elected the nation’s first black president. The Cubs and Red Sox won the World Series. There was even a female reboot of Ghostbusters.

At least one thing, however, did not change. That would be the laws of economics. They hold as fast and true in 2018 as they did in 1987.

The Times’ editorial board might have changed. The perception of the minimum wage certainly changed. Relatively recent polls show seven out of ten Americans support raising the federal minimum wage. Several cities—Seattle, New York, and Minneapolis, among them—have passed laws that raised (or will soon raise) the minimum wage to $15 an hour.

So it’s safe to say the minimum wage laws have become more popular, no doubt in part from campaigns promoting them and an education system sympathetic to them. Still, economic laws do not change based on how popular humans find them. They remain true and constant whether they are popular or not.

In fact, some have observed that economic laws are inherently unpopular.

“In economics, the majority is always wrong,” John Kenneth Galbraith once allegedly quipped.

Now, there have been a lot of complaints directed at corporate media in recent years, but I believe in giving credit where credit is due. So let’s give the Times a hand.

The paper was right in 1987. And if politicians are genuinely interested in helping the poor, they’ll stick a stake in the heart of the minimum wage once and for all.

Jon Miltimore

Jonathan Miltimore is the Managing Editor of FEE.org. Serving previously as Director of Digital Media at Intellectual Takeout, Jon was responsible for daily editorial content, web strategy, and social media operations. Before that, he was the Senior Editor of The History Channel Magazine, Managing Editor at Scout.com, and general assignment reporter for the Panama City News Herald. Jon also served as an intern in the speechwriting department under George W. Bush.

EDITORS NOTE: The featured image is provided by FEE and is republished with permission.

FL GOP Gives 10 Reasons Andrew Gillum is Too Radical/Corrupt for Governor but Misses Number 11

September 26, 2018/in Economy, Elections, Featured, News, Policy, Politics/by Dr. Rich Swier

The Republican Party of Florida has released a new video about the Socialist candidate Andrew Gillum for governor of the sunshine state. It provides ten reasons that Gillum is too radical and corrupt for Florida.

There is an 11th reason that Andrew Gillum is to radical for Florida.

In The Washington Free Beacon article “DeSantis Calls Out Media for Double Standard in Coverage of Florida Governor Race” Jeffrey Cimmino reported:

Ron DeSantis, the Republican nominee in Florida’s gubernatorial race, on Monday [September 24th] castigated the media for not covering the election fairly, claiming they are trying “to create a narrative” around him while not challenging his Democratic opponent, Tallahassee Mayor Andrew Gillum.

“Have you asked Andrew Gillum why he had CAIR, the Council [on] American-Islamic Relations, to Tallahassee in 2016?” DeSantis asked a gathering of reporters. “He spoke to welcome them. They were an unindicted co-conspirator in the Holy Land Foundation terror financing trial, the largest terror financing trial in history. He welcomed them. He thanked them for what they were doing.”

“Why were they in Tallahassee? To protest the anti-BDS legislation that the legislature was doing, which was protecting our relationship with Israel,” DeSantis continued.

Read more.

In our column “Birds of a Feather? Democrat Socialist Andrew Gillum’s links to Florida’s Islamic Socialists” we wrote:

Gillum’s Connection to Florida Islamic Supremacist Organizations

According to Discover the Networks the Council on American Islamic Relations(CAIR),

[W]as co-founded in 1994 by Nihad Awad, Omar Ahmad, and Rafeeq Jaber, all of whom had close ties to the Islamic Association for Palestine (IAP), which was established by senior Hamas operative Mousa Abu Marzook and functioned as Hamas’ public relations and recruitment arm in the United States. Awad and Ahmad previously had served, respectively, as IAP’s Public Relations Director and President. Thus it can be said that CAIR was an outgrowth of IAP.

[ … ]

Writes Islam scholar Stephen Schwartz: “CAIR should be considered a foreign-based subversive organization, comparable in the Islamist field to the Soviet-controlled Communist Party USA, and the Cuban-controlled front groups that infiltrated ‘Latin American solidarity’ organizations in the U.S. during the 1980s. It has organized numerous community branches and has had immense success in gaining position as an ‘official’ representative of Islam in the U.S.”

Mayor Andrew Gillum appeared at the February, 2016 Muslim Capital Day hosted by the Florida chapter of the Council on American Islamic Relations(CAIR) and EMERGE USA. According to the CAIR website:

More than 200 Florida Muslim community leaders, businessmen and women, and students participated in the eighth Florida Muslim Capitol Day event this past Thursday [February 11, 2016] at the State Capitol. This year’s event was co-sponsored and prepared in close collaboration with EMERGE USA, another key American Muslim organization.

Attendees of the event were honored by a personal welcome from Tallahassee Mayor Andrew Gillum on the Wednesday evening before the event at the Islamic Center of Tallahassee. The mayor’s words were inspiring as he applauded the Muslim community’s participation in this civic engagement event that stressed the importance of political involvement in a political climate that is, unfortunately, filled with xenophobic rhetoric.

What is Florida based EMERGE USA?

According to Discover the Networks:

Over the years, EMERGE has held a number of events at terror-linked mosques, like: (a) Masjid Al-Qassam (a.k.a. Islamic Community of Tampa), which was founded by Palestinian Islamic Jihad leader Sami al-Arian, and (b) Masjid Darul Uloom (based in Pembroke Pines, Florida), where “Dirty Bomber” Jose Padilla was a student and the late al-Qaeda Global Operations Chief Adnan el-Shukrijumah was a prayer leader. EMERGE has also sponsored speeches made by various Muslim extremists, such as Sayed Ammar Nakshawani, who has called for the destruction of Israel.

EMERGE’s executive director, Nauman Sabit Abbasi, is the president of public relations for the Islamic Foundation of South Florida (IFSF), a radical mosque that seeks to “establish a powerful base for the growth of Islam in North America,” and whose youth leader once wrote on the Internet: “[Y]es, Allah … has Decreed that we will over-take the World in numbers…” Abbasi’s Facebook page urged to people to “support the true leadership of the world who are at war with Zoinists.”

We asked: Is Andrew Gillum Florida’s version of the nation’s first “Islamic Socialist Candidate?”

RELATED ARTICLE: Gillum Staffer Calls Republicans “Dumbf****”

How Congress Can Make Tax Cuts Permanent Without Worsening the Debt

September 24, 2018/in Economy, Elections, Policy, Politics, Regulation/by The Daily Signal

The economy is thriving under the Tax Cuts and Jobs Act. Wages are up, scores of jobs are being created, and small businesses are more optimistic than ever about the future.

Making those tax cuts permanent and passing additional pro-growth tax reforms would help sustain higher economic growth, creating long-term benefits for all Americans.

Even so, those benefits would be limited if policymakers fail to address the unsustainable mountain of debt we have already taken on. This part is critical because left unaddressed, the debt will inevitably lead to either an economic crash or decades of economic malaise.

The root problem is not low taxes. After all, the IRS collected record revenue in fiscal year 2018. The problem is excessive government spending, and no amount of tax increases can fix that.

Without restraining spending, further tax cuts today will only mean higher taxes in the future. To achieve fiscal sanity while respecting individual liberty, Congress should pursue tax reform 2.0 by eliminating tax credit spending in the tax code and reducing federal spending.

The Heritage Foundation’s Blueprint for Balance shows how this can be done. The blueprint would achieve an extra $735 billion in additional tax revenues by eliminating narrowly targeted and inappropriate tax credits, or disguised spending, in the tax code.

Getting rid of these credits would more than cover the estimated $657 billion drop in revenues over 10 years that would result from Tax Reform 2.0. Other measures would also help with this, like fully eliminating the state and local tax deduction so that people earning the same incomes across America pay the same in federal taxes.

The state and local tax deduction is deeply inefficient, as it mainly benefits the wealthy and does little for the poor. It also encourages fiscal mismanagement by subsidizing state and local tax increases and discouraging tax cuts.

Replacing this deduction and other narrow and inefficient tax credits with broad-based, pro-growth measures contained in Tax Reform 2.0 would achieve all the benefits of tax cuts without incurring the consequences and risks of higher debt.

An even better proposal would be to simply cut spending and use the tax savings described above to lower taxes even further.

Tax Reform 2.0 would solidify our economic growth and give a boost to working Americans. But regardless of whether or not Congress enacts it, and regardless of the revenue impact, one thing remains certain: Our current deficits are unsustainable.

Without significant cuts in federal spending, no amount of tax cuts can grow the economy out of its debt, and no amount of tax hikes can cover federal spending without crashing the economy.

If lawmakers want to prevent an eventual economic crash or a long period of meager or negative economic growth, they will need to reassess the size and scope of the federal government.

The Heritage Foundation’s Blueprint for Balance gives Congress specific ways that it can reduce spending by $12.3 trillion over the next decade, balance the budget by 2025, and cut the projected debt by 23 percent in 2028.

Tax Reform 2.0 has the potential to give our economy a significant long-term boost. To realize this full potential without future tax increases, lawmakers should couple Tax Reform 2.0 with commonsense tax policies that would get rid of narrow, perverse, and detrimental subsidies and credits in the tax code, as well as instituting structural spending reforms to reduce the size and scope of the federal government.

COMMENTARY BY

Rachel Greszler

Rachel Greszler is research fellow in economics, budget, and entitlements in the Grover M. Hermann Center for the Federal Budget, of the Institute for Economic Freedom, at The Heritage Foundation. Read her research.

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EDITORS NOTE: The featured image is by Pepi Stojanovski on Unsplash.

U.S. Spends $90 Million to Help a few Dozen Afghan Women Get Jobs

September 19, 2018/in Economy, Immigration, Taxes, Waste, Fraud and Abuse/by Judicial Watch

The U.S. government has blown almost $90 million on a doomed project to help Afghan women enter the workforce with a big chunk of the money going to a Clinton-aligned “development” company that reaped big bucks from Uncle Sam while Hillary Clinton was secretary of state.

The cash flows through the famously corrupt U.S. Agency of International Development (USAID), which is charged with providing global economic, development and humanitarian assistance. In this case USAID allocated $216 million to supposedly help tens of thousands of Afghan women get jobs and gain promotions over five years. Known as “Promoting Gender Equity in National Priority Programs,” the endeavor was launched in 2014 and tens of millions of dollars later it’s proven to be a major failure.

Someone must be pocketing the cash because the costly program has helped between zero and 60 women. This isn’t a joke, though it sounds like a bad one. All the dirty details are laid out in a scathing federal audit released this month by the Special Inspector General for Afghanistan Reconstruction (SIGAR).

Investigators found that around 55 women got “new or better” jobs in three years and they can’t even fully credit the U.S.-backed program for the women’s prosperities. SIGAR writes that it found “multiple problems” in the program, including security, staffing and economic conditions in Afghanistan.

“In addition, SIGAR found that USAID/Afghanistan’s records on the contractors’ required deliverables were incomplete and inaccurate because the agency’s management did not give contracting officer’s representatives enough guidance on record keeping,” the report states. Of interesting note is that one of the biggest contracts went to a company, Chemonics International, with close ties to the Clintons. The Washington-based development firm was awarded $38 million, according to the figures included in the SIGAR report.

“Chemonics thrived during Clinton’s tenure, nabbing more contracts during the Haiti reconstruction effort than any other company,” a 2015 news report reveals. “Peter Schweizer noted the extensive Clinton connections to development failures in Haiti in his book, Clinton Cash.”

Here’s a nugget from this month’s SIGAR report that illustrates how poorly this boondoggle was planned by the government; even when the Afghan women complete the program, there are not jobs waiting for them. The audit reveals that the Afghan government won’t sustain the program, referred to as Promote, because it can’t hire all the graduates.

“It is also unclear whether the graduates will obtain jobs in the private sector in large numbers due to the country’s low projected economic growth rate,” the report states. “This raises questions about whether Promote is sustainable at all and could put USAID’s investment in the program in jeopardy.” So, the U.S. government is spending enormous amounts of taxpayer dollars to train women in a crime-infested, third-world country for jobs that don’t exist. Afghanistan has a poverty rate of 39.1 %, according to the World Bank, and an unemployment rate of 22.6%.

The security situation has worsened and civilian casualties are at their highest since 2002, with an unprecedented level of conflict-induced displacement.

Nevertheless, in the summer of 2013 the Obama administration announced it was launching the “largest women’s empowerment program in [USAID] history.” The goal was to advance opportunities for Afghan women to become political, private sector, and civil society leaders and to build upon existing and previous programs for women and girls. Of course, this requires a lot of money so the administration allocated the $216 million to get the job done.

The money was supposed to educate, promote and train a new generation of Afghan women in order to increase their contributions to the country’s development. “Promote strengthens women’s rights groups,” USAID proclaims, and boosts female participation in the economy while increasing the number of women in decision making positions within the Afghan government. It also helps women gain business and management skills. The SIGAR report identifies Promote as the “largest single investment to advance women globally.”

A few years ago, Judicial Watch reported on another scandalous USAID program aimed at helping women in Afghanistan escape repression. After spending a whopping $64.8 million on 652 projects, programs and initiatives, a federal audit determined lack of accountability and follow up made it impossible to know if they made a difference. That disastrous project was also funded by the departments of State and Defense and federal investigators found that none of the three agencies had effective mechanisms for tracking the funding associated with the projects.

EDITORS NOTE: The modified featured image is by Unsplash/Jimi Filipovski @jimiburg.