Bruce Thornton, All Biden had to do was not mess with Trump’s success.
The Biden administration took over the government with the wind at its back thanks to Donald Trump. With the COVID vaccines reining in the pandemic and things getting back to normal, all Biden had to do was not get in the way of success. But a lingering Trump Derangement Syndrome, and a leftwing, noisy base eager to complete Barack Obama’s “fundamental transformation” of the U.S., have led at home and abroad to actions and policies seemingly calculated to compromise our interests and security and erode our political freedom.
We can start with our southern border. Trump’s initiatives such as building a wall, stepping-up deportations, and striking a deal that kept asylum seekers in Mexico had slowed considerably the number of illegal crossings, leading to a reduction in violence from gangsters like MS-13 that flourished in so-called sanctuary cities; the end of the catch-and-release policy that dumped unvetted aliens into the country’s interior; and limiting the cruel deaths of children on the trek north.
But these successful policies interfered with the bipartisan need for de facto open borders to provide cheap labor for Wall Street, and more voters for the DNC. More important, no matter how successful, such polices were tainted by the “wicked” Donald Trump, the populist bull that wrecked the political establishment’s remunerative china shop. So they had to go.
The result has been a return to the Obama era’s spectacle of children and teens packed into squalid holding pens, increased infestations of cartel traffickers in people and drugs, and two consecutive months of about 175,000 apprehensions of border-crossers each month––the highest in two decades. All reports from those on the ground––from border patrol agents to residents to local government agencies––indicate a serious crisis that will insidiously spread across the country. But president Joe Biden is instructed to say that such influxes happen every year at this time, that Donald Trump left a “Godawful mess,” and that “We’ve now got control” over the ongoing stampede of border-crossers.
Then there’s the paradox of 8 million job openings––thanks to the V-shaped economic recovery that was well underway when Biden took office––many of which can’t be filled. Even the promise of cash bonuses and higher pay can’t attract workers. Why? Because his $1.9 trillion “COVID relief” bill actually does little to alleviate the pandemic’s effects, but a lot for bribing voters with free money, and spreading around payola to blue states and “woke” businesses. One such provision bumped up state unemployment payments by $300 a week, largess that will continue until September.
Unsurprisingly, 44% of small business owners report that they can’t fill vacancies, and one-fourth of the openings have been left unfilled. And though a projected million jobs were supposed to be created in April, the actual number was 266,000. You don’t have to be an economist to know what’s going on. When you can make more money on unemployment than you do working, why work? And why create jobs you can’t fill? That moral hazard should have been considered before doling out more cash.
Nor is this a new phenomenon. Little discussed is the role of the “dark economy,” i.e. the off-the-books cash economy, which includes crimes like drug-dealing and trading in stolen goods. No matter the government program, whether state or federal, that gives people money, millions of the beneficiaries work in the cash economy, where no income tax or payroll tax is deducted from wages. That means the reward for not working goes beyond the extra $300 Biden bucks because it includes extra money from working off the books.
That’s just one of the economic disasters the Biden crew has wrought. Donald Trump, like almost every politician, was not averse to fecklessly spending tax-payer money on sketchy policy. But he also understood that economic growth and job creation had to be nurtured by economic policy. This meant lowering the corporate tax rate, which in the U.S. is one of the highest among the advanced economies, and lowering personal and capital gains rates to incentivize investment in the economy. It means as well pruning away the thickets of regulation that cost $1.9 trillion dollars a year and slow down infrastructure and new business development. On Trump’s watch, policies on taxes and deregulation unleashed an economic boom and record-setting job growth, as well as increased wage growth.
So of course, the Biden conglomerate is planning another $6 trillion of spending, raising marginal tax rates, and rolling back Trump’s cuts of corporate and capital gains tax rates. At the same time, he’s undoing Trump’s reforms of the federal regulatory burden on business. What’s astonishing is that there is copious empirical evidence that these methods of generating revenue, which Biden claims will pay for his extravagant tax-and-spend initiatives, don’t work. And don’t forget, these efforts have already contributed to a rate of inflation 4.2% higher than a year ago–– and the biggest jump since 2008. Flooding the economy with even more cash is likely to increase inflation.
As for the threats to raise taxes, recently Phil Gramm and John Early showed that raising tax rates doesn’t substantially increase the amount of revenue to offset the costs they exact from the economy. The main reason is that actual tax-rates matched statutory rates for only a small number of taxpayers, as history shows:
The top tax rate of 91% in 1962 applied to families with joint incomes, in today’s dollars, of $3.38 million. After deductions and credits, only 447 tax filers out of 71 million paid any taxes at the top rate. The top 1% of income earners paid only 16.1% of their income in federal income and payroll taxes, while the top 10% paid 14.4% and the bottom 50% paid 7%. This followed the pattern set by the top Depression-era and wartime tax rates. Only three filers out of six million paid any taxes at the top Depression rate and only 13 out of 50 million paid any taxes at the top wartime rate. The top 1% of earners paid 12.6% and 23.5% of their income in federal income and payroll taxes in 1938 and 1945, respectively.
And despite the specious rhetoric about the rich and corporations “paying their fair share,” the data show they already do pay a higher proportion of all taxes than their proportion of income:
Organization for Economic Cooperation and Development has found that high-income Americans already bear a higher relative share of the income-tax burden than the rich do in other developed nations. The top 10% of American households earn about 33.5% of all earned income but pay 45.1% of all income taxes, including Social Security and Medicare taxes. That progressivity ratio of 1.35 is far higher than the German ratio of 1.07, French ratio of 1.1 and Swedish ratio of 1. As a percentage of their incomes, the top 10% of earners in Germany, France and Sweden paid 21%, 19% and 26% less than the top 10% in America. And the bottom 90% of earners paid 17%, 34% and 21% more as a percentage of their incomes respectively than the bottom 90% in America paid.
This means that the expense of the social welfare and health-care programs in Europe that our progressives hold up as reproach to our stingy ones, is paid for by a regressive tax on consumption that hits the bottom tier of citizens the hardest. We can see a similar phenomenon in California, where plutocrat “woke” obsessions like “clean” energy have led to regulations that affect the poor and working class hardest through some of the highest gas taxes and electricity costs in the country.
Finally, our progressive executive branch is proposing Green New Deal pie-in-the-sky goals like replacing carbon-based energy with “sustainable” and “clean” energy, for example by replacing gas-powered cars with electric ones. We can leave aside the growing consensus that the catastrophes predicted to follow a few degrees increase in temperatures has not been established as a fact. As physicist Steven E. Koonin writes in his new book Unsettled. What Climate Science Tells Us, What it Doesn’t, and Why It Matters, “The science is insufficient to make useful projections about how the climate will change over the coming decades, much less what effect our actions will have on it.”
But even if catastrophic global warming is true, converting carbon-based energy to “clean” electricity is logistically impossible given the quantities of minerals and rare-earth elements required to make the millions of batteries used in electric cars. As the Manhattan Institute’s Mark C. Mills writes, “A single electric-car battery weighs about 1,000 pounds. Fabricating one requires digging up, moving and processing more than 500,000 pounds of raw materials somewhere on the planet. The alternative? Use gasoline and extract one-tenth as much total tonnage to deliver the same number of vehicle-miles over the battery’s seven-year life.” And much of this mining occurs in countries with no concern for child-labor laws or the destructive impact on the environment.
Electric car batteries, obviously, need to be recharged. If electricity production, as is mandated in California, is to replace carbon-based fuels, then wind turbines will and solar panels will have to be manufactured in the millions. But, as Mills explains, “Building one wind turbine requires 900 tons of steel, 2,500 tons of concrete and 45 tons of non-recyclable plastic. Solar power requires even more cement, steel and glass—not to mention other metals.” Those materials will also have to be minded or manufactured, which requires energy. And that energy will necessarily come from hydrocarbons whose emissions will cancel the reductions from using “sustainable” and “clean” energy, which in fact is neither.
Even attempting to reach Biden’s goal of replacing hydrocarbons with electricity will destroy our economy without achieving that utopian goal. What a contrast with the Trump administration, which promoted American energy independence and removed some of the regulatory shackles put on the energy industry during the Obama years. Biden instead has shut down the Keystone pipeline, banned fracking on federal land, and shoveled tons of cash to “clean energy” boondoggles, leaving us more dependent on imported energy.
And this is just 100 days of domestic policy. Much of these proposed tax-and-spend proposals as of now look unlikely to pass, but the Republicans can’t get complacent. This is no time to make deals or “bipartisanship” horse-trading. It’s time to fight tooth and nail against these assaults on our national sovereignty and economic well-being.