Category: reason

Everywhere, people trash capitalism.

But what they think they know about capitalism is usually wrong.

My new video debunks some myths about capitalism.

“No one ever makes a billion dollars,” complains Rep. Alexandria Ocasio-Cortez (D–N.Y.). “You take a billion dollars.” In other words, capitalists get rich by taking money from others.

That’s nonsense, and Myth Number One.

People believe that myth if they think that when one person wins, someone else must lose. It’s natural to believe that if you think there is a finite amount of money in the world. But there isn’t.

Free markets increase total wealth. Competition encourages entrepreneurs to find new ways to release more value from both people and resources.

Because capitalism is voluntary and consumers have choices, the only way capitalists can get rich is to offer us something that we believe is better than we had before.

That creates new wealth.

Steve Jobs became a billionaire. But by creating Apple, he gave us more: millions of jobs and billions of dollars added to our economy.

Research shows that entrepreneurs only keep 2.2 percent of the additional wealth they generate. “In other words, the rest of us captured almost 98 percent of the benefits,” says economist Dan Mitchell of the Center for Freedom and Prosperity.

“I hope that we get 100 new super billionaires,” he adds, “Because that means 100 new people have figured out ways to make the rest of our lives better off.”

But former Labor Secretary Robert Reich says we should “abolish billionaires.” He wants some form of wealth tax to hold their wealth down. “Entrepreneurs like Jeff Bezos would be just as motivated by $100 million or even $50 million,” Reich claims.

But Mitchell points out that if their income is limited, “maybe they just take it easy…retire…sail a yacht around the world…consuming instead of saving and producing.”

I want them saving and producing! Billionaires have shown that they’re good at cutting prices or improving products or both.

As Michell puts it, “I’m not giving Jeff Bezos any money unless he’s selling me something that I value more than that money.”

Even if they don’t—even if they run out of ideas—their wealth is useful.

One reader called me “a complete moron” for saying that. He argues that “more money in the richest hands means money sitting in the bank doing nothing.”

But that’s an ignorant view of banks. Because banks loan that money out, they enable other people to buy homes, start new businesses, and get educated.

Still, I hear that “the rich are getting richer, while the poor get poorer!”

That’s Myth Number Two. Yes, the rich got lots richer, but the poor and middle class got richer, too.

“The economic pie grows,” says Mitchell. “We are much richer than our grandparents, and our grandparents were much richer than their grandparents.”

For thousands of years, the world had almost no wealth creation. Only when some countries tried capitalism did gross domestic product grow.

Capitalists helped everyone, including the poor.

The media suggest that today’s wealth gap proves that’s no longer true. But they are wrong. Capitalism’s gradual progress continues. Census Bureau data shows that the average family today is almost a third richer than 40 years ago (yes, adjusted for inflation).

The media also say, “The middle class is in decline.”

It’s true, Mitchell points out. “It’s shrinking because more people move into upper-income quintiles! The rich get richer in a capitalist society. But guess what? The rest of us get richer as well.”

Next week, more myths about capitalism.

COPYRIGHT 2021 BY JFS PRODUCTIONS INC.

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President Joe Biden’s pledge not to raise taxes on American families earning less than $400,000 annually was a centerpiece of his campaign and of his first months in the White House. But a new analysis suggests that more than 60 percent of taxpayers will face a higher burden under Biden’s first budget plan.

The Tax Policy Center (TPC), a center-left think tank based in Washington, D.C., reports that “nearly all” of Biden’s proposed tax increases would be borne by American households earning over $800,000 annually. But while the tax increases are undeniably concentrated in the upper echelons, most taxpayers would see at least a small increase in what they owe the federal government via income, payroll, and corporate taxes. In fact, three-quarters of households earning between $75,000 and $100,000 annually would face higher taxes under Biden’s budget—with an average tax increase of $440.

The tricky thing is that those higher taxes would be somewhat hidden for most individuals and households because they would be the result of higher corporate taxes.

Biden has called for raising the corporate income tax to 28 percent, up from the current level of 21 percent. His budget also calls for raising the top marginal income tax bracket—which applies to individuals earning over $452,000 and couples earning over $509,000—to 39.6 percent, up from the current level of 37 percent.

That means, for example, a worker earning $80,000 annually would not see the government extract a larger share of her income via payroll taxes, which fund Social Security and health care entitlements, or via income taxes. But the higher taxes that Biden has proposed on corporations would, under the TPC analysis, be passed along to shareholders and workers in the form of lower investment earnings and compensation, respectively. As a result, many middle- and low-income individuals and households could end up with a larger tax burden even without seeing their taxes hiked directly.

“For those looking to see if Biden kept his promise to not raise taxes for those making $400,000 or less, the answer is: Mostly, but not entirely,” writes Howard Gleckman, a senior fellow at the TPC. As Gleckman explains, it depends whether you evaluate Biden’s pledge as a promise not to raise taxes directly on Americans earning less than $400,000 a year or whether you consider the full consequences of higher corporate taxes, which are ultimately paid by people.

If enacted, Biden’s tax policies would raise federal revenue by about $2.1 trillion over 10 years, according to an earlier TPC analysis. The corporate tax hike alone would reduce long-term economic growth by about 0.8 percent, kill 159,000 jobs, and reduce wages, according to a separate analysis by the Tax Foundation, a nonpartisan think tank.

Of course, a tax-focused analysis of Biden’s plans ignores the other side of the ledger. While most middle- and low-income families might face a higher tax burden in Biden’s budget, the president is also proposing a massive expansion of taxpayer-funded benefits that would certainly redistribute income downward. And the top 1 percent of earners, in TPC’s analysis, would end up paying on average $213,000 more in annual taxes—a far larger increase than what lower-earners would face.

It’s also true that any clear-eyed assessment of America’s fiscal status must leave room for tax increases as part of an overall strategy to balance the budget. The national debt now exceeds $28 trillion, and annual budget deficits will exceed $1.6 trillion every year for the rest of the decade under the sure-to-be-overly-rosy assumptions contained in Biden’s budget.

Still, as a matter of politics, the distribution of Biden’s tax increases matters because of the promises Biden has made.

Instead of promising that it’s possible for America to deal with its current fiscal mess and massively expand the size of government by merely taxing the rich, Biden should be honest about what he’s proposing. A more expensive government means higher taxes on almost everyone.

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A British court has given Ayesha Basharat a suspended sentence of five months in prison  after she pleaded guilty to theft and fraud by false representation. Basharat worked as a healthcare assistant on the COVID-19 ward of Heartlands Hospital in Birmingham. She took the bank card of an 83-year-old woman after the woman died. Basharat made six purchases of £1 each on the hospital’s vending machine just 17 minutes after the woman’s death. Basharat claimed she found the card and confused it with her own. But police say that the cards were different colors and hospital policy required her to turn in lost property.

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Pennsylvania legislators last week officially ended that state’s COVID-19 “disaster emergency,” which Gov. Tom Wolf repeatedly extended after declaring it 15 months ago. While the immediate practical effect of the legislature’s vote will be minimal, it exemplifies an important step toward reining in the vast powers that Wolf and other governors have exercised during the pandemic.

The Pennsylvania resolution was authorized by a constitutional amendment that voters approved last month, which changed the requirement for terminating a state of emergency from a two-thirds vote to a simple majority. Voters also passed an amendment that reduces the length of future emergency declarations from 90 days to 21 days and requires the legislature’s approval to extend them.

The election results and last week’s resolution amount to a sharp rebuke of the Democratic governor’s pandemic response, which a federal judge described as “shockingly arbitrary” and unconstitutional. The goal of the new limits, according to the state Senate’s Republican leaders, is “re-establishing the balance of power between three equal branches of government as guaranteed by the constitution.”

Pennsylvania’s governor has very broad powers once he declares a “disaster emergency.” Among other things, he can suspend statutes and regulations, commandeer private property, issue evacuation orders, and “control ingress and egress to and from a disaster area, the movement of persons within the area and the occupancy of premises therein.”

Wolf relied on that last power when he closed all K–12 schools and all “non-life-sustaining” businesses. He also cited it when he ordered Pennsylvanians to stay home “except as needed to access, support, or provide life sustaining business, emergency, or government services.”

By last week, Wolf had lifted nearly all of his COVID-19 restrictions, and he argues that the constitutional amendments won’t affect the legality of future responses to public health threats. In addition to his own emergency powers, he notes, the state Department of Health has a “duty” to “determine and employ the most efficient and practical means for the prevention and suppression of disease.”

On its face, that power is even broader than Wolf’s, authorizing any measure that the secretary of health considers appropriate. A bill that state legislators are considering would limit the secretary’s amazingly wide discretion, saying the health department may not close businesses, issue stay-at-home orders, restrict travel, or mandate a “specific hygienic practice” such as mask wearing or physical distancing except in cases where people have been “exposed or potentially exposed to a contagious disease.”

Sen. Judy Ward (R–Altoona), who introduced that provision, wants to require legislative approval of such far-reaching policy decisions, which she said “should not be made in a vacuum by someone who was not elected by the people.” According to Ward, her amendment “simply prevents one person from unilaterally throwing tens of thousands of citizens out of work, barring children from school, and spending millions of taxpayer dollars.”

Legislators in many other states—including, in some cases, legislators from the same political party as their governor—have similar concerns. USA Today reports that “lawmakers in 46 states, Guam and Puerto Rico have drafted 300 proposals this year to curtail their governors’ executive powers.” Such limits already have been enacted in several states, including New York, Florida, and Kentucky.

The impulse behind such legislation is understandable once you consider the vague, sweeping language of the statutes that were invoked during the COVID-19 crisis. After declaring an emergency, for instance, California’s governor can exercise “all police power vested in the state”; Michigan’s governor can “promulgate reasonable orders, rules and regulations as he or she considers necessary to protect life and property”; and Nevada’s governor assumes whatever “functions, powers and duties” he thinks are “necessary to promote and secure the safety and protection of the civilian population.”

Legislators gave governors the ability to unilaterally, dramatically, and indefinitely magnify their own powers, trusting them not to abuse that authority. The experience of the last year and a half suggests that trust may have been misplaced.

© Copyright 2021 by Creators Syndicate Inc.

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Though President Joe Biden is coming up on 150 days in office, many of the promises he made on the campaign trail have fallen flat. They came as part of his case against former President Donald Trump, which hinged in large part on crafting an immigration system that looked nothing like the one Trump presided over. But for many migrants coming to the Southwest border, the situation is little changed under Biden.

Biden has continued much of the Trump administration’s approach to immigration: separating families, overfilling detention facilities, and plainly telling people to stay away. One such holdover policy is Title 42.

Invoked by Trump in March 2020, Title 42 is a section of the Public Health Service Act that grants federal health officials broad discretion to enact disease mitigation measures. The Centers for Disease Control and Prevention (CDC) used it to issue an order barring certain kinds of arrivals to the U.S. borders with Mexico and Canada while permitting other forms of international movement to continue. It allows Customs and Border Patrol (CBP) officials to expel migrants immediately upon arrival.

In practice, the measure almost exclusively applies to asylum seekers arriving at the Southwest border. Between March and September 2020, for instance, the Southwest border saw 197,043 Title 42 expulsions compared to just 328 at the Canadian border. In total, CBP has carried out over 640,000 Title 42 expulsions in one year of the order’s application.

That all flies in the face of legal protections for migrants. According to David J. Bier, an immigration expert at the Cato Institute, it’s a massive disruption of U.S. asylum law, “which guarantees [migrants] the right to apply at any port of entry.” Presentation at a port of entry or on U.S. soil is a necessary component of the asylum-seeking process. Bier says it’s imperative that the Biden administration “afford asylum seekers every opportunity to make their claims” and “reopen ports of entry to allow asylum seekers to apply there.”

That’s all impossible under Title 42, though. Danilo Zak, senior policy and advocacy associate for the National Immigration Forum, notes that vulnerable migrants have been harmed by Title 42’s blanket approach to expulsions. “Even if an individual or family can provide evidence that they have been specifically persecuted and face a real risk of further persecution or death should they be returned to their home countries,” he says, they are expelled regardless.

Zak identifies several serious legal issues at the heart of Title 42. In addition to its conflict with U.S. asylum law, the Refugee Act of 1980 also “makes it very clear that arriving migrants seeking asylum must be allowed to make their case for protection.” Even so, “the Trump administration and now the Biden administration appear to believe that Title 42 allows us to disregard those asylum laws,” Zak says.

They supposedly did so in the name of public health, but the medical basis for Title 42 has long been questionable. Many studies and experts have cast doubt on the efficacy of closing borders to limit the spread of COVID-19. In early March 2020, Martin Cetron, who leads the CDC’s Division of Migration and Quarantine, refused to support the measure due to its flimsy public health basis. Only after White House and CBP officials strong-armed the CDC into complying was Title 42 put into practice.

The policy is a relic of an administration that actively sought to limit immigration. Olivia Troye, a former aide to Vice President Mike Pence, called it “a Stephen Miller special” after resigning in protest of the policy. Miller was the adviser behind many of the Trump administration’s most heinous immigration policies, including the “zero tolerance” policy, which separated children from migrant parents in an attempt to deter arrivals.

Migrants expelled from the U.S. under Title 42 face hostile conditions similar to those subjected to another Trump policy, the Migrant Protection Protocols (MPP). Known as “Remain in Mexico,” MPP relegated asylum seekers south of the border while they awaited decisions in their immigration cases. There, many faced murder, rape, and torture. Biden did away with the policy just weeks ago, but his continued operation of Title 42 contradicts his campaign promise to “restore our asylum laws so that they do what they should be designed to do.”

Those dangers to migrants continue under Biden. “These individuals are being pushed back into very dangerous environments in northern Mexico,” says Zak. “Migrants are at very serious risk of being exploited by gangs and traffickers.” He adds that “Human Rights First has documented 492 instances of publicly reported attacks and kidnappings against asylum seekers in Mexico since Biden took office,” many against those expelled under Title 42.

In spite of this harsh approach, Title 42 has likely exacerbated the very issue it sought to tackle: the high volume of asylum seekers crossing the border. Zak says that the recidivism rate—individuals who were apprehended, expelled, and apprehended again by CBP—has “skyrocketed.” That rate “tended to hover around 10 percent” prior to Title 42 and has hit 38 percent as of May 2021. Zak says this is partially because “individuals (particularly single adults) are expelled extremely quickly,” thus encouraging multiple crossings. There is also no formal penalty for repeat crossings under Title 42. With that uptick in mind, the reasons for increased apprehensions at the border become clearer—and Biden’s approach to immigration less so.

No border policy “will appease both sides,” says Bier, but there are ways to reinstate (and reform) the asylum-seeking process. For one, Bier says that the U.S. government should broaden the asylum statute, which currently excludes many types of persecution from warranting protection. He notes that family case management, which assigned case managers to migrant families and achieved a 99 percent compliance rate with immigration court requirements during its tenure, “could be a way to help maintain awareness of cases as they proceed through the courts.” Getting immigrants access to legal counsel is “the most important thing.”

The Biden administration has not yet taken those kinds of action. Recently, it quietly asked six humanitarian groups to recommend which migrants should be allowed to skate expulsion, though the criteria for their recommendations have not yet been made public. That approach has led to a modest number of asylum seeker admissions since early June. “It is better than not allowing anyone to enter,” says Bier, “but it is far worse than honoring U.S. asylum law.”

The Trump administration used the pandemic to justify immigration restrictions already within officials’ interests. Understandable enough. Why the Biden administration is keeping Title 42 on the books is less clear. Its public health basis is poor, it contradicts long-standing U.S. asylum law, and it puts already vulnerable migrants at further risk. Any administration committed to “following the science” and “ending Trump’s detrimental asylum policies” should not be upholding Title 42.

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