Machete Attack In Times Square Injures Three NYPD Cops As FBI Investigates As Possible Terror Incident
Chaos erupted in Times Square on New Year’s Eve when a machete-wielding man injured three New York Police Department (NYPD) officers.
New York Police Commissioner Keechant Sewell told reporters early Sunday that a 19-year-old man attempted to strike the first officer in the head with a machete, unprovoked. Sewell said the man hit two other officers on the head with the machete.
Sewell said one officer received a laceration to the head while the other received a skull fracture and a large laceration. Another officer discharged his firearm, striking the suspect in the shoulder.
Watch as Police Commissioner Sewell & Mayor Adams provide an update on a police involved incident in Manhattan. https://t.co/ha11b02Fvq
The incident occurred around 9:30 p.m. ET at West 52nd Street and 8th Avenue. One police source told NYPost that an investigation had been opened to see whether the suspect is a radical Islamic extremist.
“We are working with our federal partners for this investigation, and it is ongoing,” Commissioner Sewell said.
NYPD Crime Stoppers released a picture of the machete.
Mike Driscoll, assistant director in charge of the New York FBI Field Office, who is also investigating, told local news NBC New York that the knife attack appears to be the work of a “sole individual at this time, there’s nothing to suggest otherwise.” The FBI’s Joint Terrorism Task Force is also investigating.
Nearby onlookers were startled by the attack and gunfire — many revelers fled amid the chaos.
After more than $20 trillion in stimulus plans since 2020, the economy is going into stagnation with elevated inflation. Global governments announced more than $12 trillion in stimulus measures in 2020 alone, and central banks bloated their balance sheet by $8 trillion.
The result was disappointing and with long-lasting negative effects. Weak recovery, record debt and elevated inflation. Of course, governments all over the world blamed the Ukraine invasion on the non-existent multiplier effect of the stimulus plans, but the excuse made no sense.
Commodity prices rose from February to June 2022 and have corrected since. Even considering the negative effect of rising commodity prices in developed economies, we must acknowledge that those are positives for emerging economies and, even with that boost, the disappointing recovery led to constant downgrades of estimates.
If Keynesian multipliers existed, most developed economies would be growing strongly even discounting the Ukraine invasion impact, considering the unprecedented amount of stimulus plans approved.
Now we face a 2023 with even more disappointing estimates. According to Bloomberg Economics, global growth will decline from a poor 3.2% in 2022 to a worrying 2.4% in 2023, significantly below the pre-covid-19 trend but with higher global debt. Total global debt rose by $3.3 trillion in Q1 2022 to a new record of over $305 trillion-mostly due to China and the U.S., according to the IIF.
However, consensus estimates show an even worse outlook. Global growth should stall at +1.8%, with the euro area at zero growth and the United States at just 0.3%, with inflation reaching 6% globally, 6.1% in the euro area, and 4.1% in the United States.
Only a handful of countries are expected to reduce debt in 2023, with most nations continuing to finance bloated government spending with elevated deficits and tax hikes. A world where governments are constantly eroding the purchasing power of currencies and slashing disposable income of taxpayers with rising taxes is likely to show weaker growth trends and worsening imbalances.
The narrative all over the world is to try and convince us that past-peak but elevated inflation is “falling prices” and that everything is good when debt increases, growth stalls and the purchasing power of salaries and savings is wiped out slowly.
There is no success in stagflation. It is a process of impoverishment that hurts the middle classes immensely while the excessive government spending is never curbed.
2022 was the year that killed MMT, the science-fiction fallacy of Modern Monetary Theory. Countries with monetary sovereignty like Japan or the UK found themselves in an unprecedented turmoil created by the illusion that rising deficit and debt would never cause significant problems. It only took a few rate hikes to dismantle the illusion of perennial money printing as the solution to everything.
2022 also showed that it is false that massive deficits are reserves that strengthen the economy. The United States suffered the most severe inflation blow in thirty years even being energy independent and benefitting from exporting natural gas and oil to the rest of the world. If the ludicrous MMT narrative was true, the United States should have not suffered any inflationary pressure.
2023 is expected to be the year of stagflation. Of course, most strategists are betting on inflation falling rapidly in the second part of the year, but that seems inconsistent with their estimates of deficit spending and growth.
The uncomfortable reality is that nations have created a long-lasting decline by pushing the limits on demand-side policies and government intervention.
Many celebrated the decision to use governments and central banks as the lenders of first resort instead of the last option, and what has been created is a problem with difficult solutions.
There seems to be no incentive to reduce the fiscal and monetary imbalances built through two decades, and therefore the result will be weaker growth and impoverishment.
No government wants to acknowledge the risk of central banks reducing their balance sheet. Even the most aggressive strategist fails to dare to estimate a three trillion US dollar quantitative tightening because they all know that the effects could be devastating. However, to truly normalize, central banks should reduce their balance sheet by at least five trillion US dollars. Governments and investment banks fear a gradual three trillion tightening because it can lead to a financial crisis. Those same market participants know that a five trillion tightening would undoubtedly lead to a financial crisis.
The reason why everyone expects a 2023 divided in two parts, a first half of poor data and a second where growth picks up and inflation plummets, is because market participants need to create a narrative that shows a quick fix to the above-mentioned disaster. However, there is no quick fix, there is no soft landing and there is not a chance of solving the problem by keeping elevated deficits, massive central bank balance sheets and real negative rates. If we want to look at the options, there are only two: Fixing the problem created in 2020, which means a global recession but probably not a financial crisis, or not fixing it, which means elevated inflation, weaker growth and another bad year for risky assets which can lead to a financial crisis.
Unfortunately, when governments all over the world decided to “spend now and deal with the consequences later” in 2020 they also created the seeds of a 2008-style problem.
Netanyahu: “Despicable” UN Vote Has No Bearing On Israel
The United Nations General Assembly on Friday passed a resolution asking the International Court of Justice (ICJ) to evaluate the legality of Israel’s “prolonged occupation, settlement and annexation of Palestinian territory.”
In a video message, Prime Minister Benjamin Netayahu was quick to condemn the UN vote as a “despicable decision” that has no bearing on Israel — a government that sprang into existence in 1948 in the wake of a UN General Assembly recommendation to partition Palestine.
“The Jewish people are not occupiers in their own land nor occupiers in our eternal capital Jerusalem and no UN resolution can distort that historical truth,” said Netanyahu.
Friday’s UN resolution also asks the ICJ to give an advisory opinion on Israeli “measures aimed at altering the demographic composition, character and status of the Holy City of Jerusalem, and from its adoption of related discriminatory legislation and measures.”
Jewish settlers and Israeli authorities have been intensifying their efforts to push Palestinians out of occupied East Jerusalem, with the neighborhood of Sheikh Jarrah emerging as a particular flash point.
The UN vote comes after Netanyahu’s formation of the most ultra-nationalist and religious government in in the country’s history. Last week, Netanyahu’s government declared that “the Jewish people have an exclusive and inalienable right to all parts of the Land of Israel,” including the West Bank and Golan Heights.
With the new leadership bent on the even more expansion of West Bank settlements– and thus threatening to obliterate the long-running fictional pursuit of a “two-state solution” — a leery Biden White House is dispatching national security advisor Jake Sullivan to the Israel for a mid-January visit.
Friday’s General Assembly’s ICJ resolution passed by an 87-26 vote, with 53 members abstaining. In voting against the measure, Israel and the United States were joined by countries that included Australia, Austria, Canada, Germany, Italy and the United Kingdom. France abstained, while Russia, China, Ireland, Portugal and Saudi Arabia were among the yes votes.
The 15-member ICJ, which is in The Hague, Netherlands, is the UN’s senior court for managing international disputes. Though not obliged to take act on the General Assembly resolution, the court is widely expected to.
In September, Italian human rights attorney Francesca Albanese, acting as a UN Special Rapporteur, characterized Israel as an “intentionally acquisitive, segregationist and repressive regime designed to prevent the realization of the Palestinian people’s right to self-determination.” She officially urged that Israel dismantle its “settler-colonial occupation and its apartheid practices.”
This month, Israel accused Albanese of antisemitism, citing 2014 social media comments in which she used the term “Jewish lobby” in explaining why the United States “remain[ed] on the sidelines” as Israel brutally attacked Gaza, exacting a high proportion of civilian casualties.
Israel is a self-declared “Jewish state,” but, according to the Israeli government, “the term ‘Jewish Lobby’ is a well-known and millennia-old antisemitic trope. It has been used to direct hatred toward the Jewish people for hundreds of years with horrific consequences.”
Chanting at the “flag march”, celebrating the “unification” of Jerusalem which marching in Pal neighborhoods:
“Shuafat is on fire” (referencing the burning of Muhammad Abu Khdeir)
“A Jew is a soul, an Arab is a son of a whore”
“Muhammad is dead”
“May your village burn down” https://t.co/4me5U9dbwU
For Jewish supremacists too lazy to travel to Jerusalem, there are satellite “Death-to-the-Arabs!” marches in other Israeli cities, like this one in Lydda. Under police protection, aspiring pogromists stop at a school to sing about wiping out Palestinians https://t.co/lqUH3yIFz1
In very quiet post-Christmas trading, gold was $1815 in European morning trading, up $22 from last Friday’s close. Over the same timeframe, silver was up 11 cents at $23.82. By the last trading day of 2022, the dollar price of silver had risen 2.6%, while gold had fallen 0.8%. They comfortably outperformed bonds (US 10-year Treasury bond price was down 17.2%) and equity markets (S&P down 20%).
With interest rates rising, many investors will be surprised that precious metals have held up so well.
Admittedly, gold had fallen by 11% by end-September when bond yields were at their highest, but the falls in bonds and equities were somewhat greater at the same time.
One of the factors which supported gold in the final quarter, offsetting moderate ETF liquidation of about 300 tonnes over the year has been central bank demand, which the World Gold Council estimates to have been 364 tonnes by October. Including more recent purchases by China and others adds nearly 300 tonnes. The Chinese purchase was confirmed in recent days by Mark Bristow, CEO of Barrick Gold, the world’s second largest gold mining corporation, who claimed China had bought “tonnes of gold around the high 200-tonnes mark”.
Why China has bought this gold, when it has ample bullion additional to its declared reserves, is an interesting question. The answer probably lies with President Xi’s recent visit to Saudi Arabia, where it was agreed that sales of oil would be paid in yuan, replacing the petrodollar with petroyuan. According to Aljazeera, Saudi exports to China are worth $33.4bn equivalent, while its imports are $31.8bn, so the net surplus is $1.6bn. The official communiqué referred to “levelling up trade, investment and financial cooperation”.
We know that China is keen to internationalise its markets, which is what investment and financial cooperation is about. The international section of the Shanghai Gold Exchange will be used by Saudi Arabia for its yuan to gold transactions. It is therefore likely that some of China’s purchase of nearly 300 tonnes in recent weeks will be to provide liquidity to backstop this market.
With regard to prospects for next year’s gold price, it should be noted that the major factor will be the fate of the dollar. It appears likely that dollar oil prices will increase in the coming months, while foreign holders of dollars will continue to reduce their dollar exposure, which in the year to October declined by $3.8 trillion. But a rising interest rate trend leading to falling financial asset values and the petroyuan replacing the petrodollar, events could coalesce into a perfect storm for the dollar.
This is not how conventional analysts look at the gold price.
They would argue that higher interest rates, if they occur, will drive gold lower. But that is an argument that denies the role of gold as money.
Tell that to President Putin, who by cornering global hydrocarbon supplies probably has a greater influence on the dollar’s future than the US Treasury and the Fed combined.
Swiss National Referendum Will Limit Population To 10 Million Through Strict Immigration Control, To Save Environment
The most popular party in Switzerland, the Swiss People’s Part (SVP), known for its agrarian roots and opposition to mass immigration, is set to pursue a referendum calling for the renegotiation of international treaties, or even theircomplete abandonment, if the Swiss population hits 10 million.
As John Cody reports at Remix News, the proposed referendum comes at a time when Europe increasingly faces environmental catastrophe, a housing crisis, and huge strains on public resources due to soaring immigration levels. Many European nations are among the most densely populated nations in the world and life in them is only expected to become more crowded in the near future unless dramatic action is taken. Switzerland is no exception.
“Our country is cracking in every corner. We are going through the debacles of recent years. If we don’t intervene, we will be overtaken by events,” said Marcel Dettling, the SVP’s campaign manager.
“Today, there is very strong economic migration,” says Dettling.
“Whoever has set foot in Switzerland will never leave the country. Migrants from Africa have welfare rates of 34 percent.”
Dettling’s party is meeting on Jan. 6 and 7 in Thurgau, near the shores of Lake Constance, and the main topic of discussion is expected to be immigration, with the new referendum featuring the working title “initiative for sustainability.”
Explosive population growth
The text for the referendum has also already been completed and would stipulate that Switzerland’s population should not exceed 10 million until 2050. After 2050, this limit could be slightly increased but only due to organic, surplus births.
SVP National Councilor Thomas Matter says he must sound a “red alert” over Switzerland’s rising population, adding that “this is the last moment when we can still change something for Switzerland.”
“The migration figures are hair-raising,” he said.
“In 2022, Switzerland will have 200,000 more inhabitants, the population of the canton of Basel-City.”
There is also the threat that a conflict between Serbia and Kosovo would only ramp up the refugee numbers Switzerland is facing.
The country is already rapidly approaching 9 million residents. In 2022, 145,958 people arrived, raising the population to 8.89 million. It. is now only a matter of time until the population hits 9 million.
Over the past 20 years, Switzerland’s population has increased by 21 percent.
“If Switzerland grows so strongly again over the next 20 years, everything will collapse,” said Matter, who serves as a national councilor.
According to him, the country’s financial reserves for education, health and transport are exhausted.
“It is urgent to leave the model of quantitative growth for qualitative growth.”
Details of the referendum text
Just like the country’s debt brake, the referendum would serve as a brake on immigration. The text stipulates that if certain population limits are reached, the government must take certain steps to inhibit population growth. For example, if Switzerland’s population reaches 9.5 million, the Swiss Federal Council will have to take steps with new laws to counteract this growth.
However, if the country reaches 10 million, the government must respond with “rigorous measures,” including the Federal Council abandoning international agreements, such as the UN migration pacts or EU treaties relating to free movement.
It is important to note that Switzerland has featured a number of referendums on the topic of immigration in the past, including the famous 2014 referendum “against mass immigration,” which won with 50.3 percent of the vote. The SVP-backed referendum was designed to place strict quotas on immigration, but despite winning the vote, the referendum was more or less made toothless by the Swiss parliament.
Switzerland was threatened by the EU over any attempt to restrict free movement, with the EU warning Switzerland that any abandonment of free movement would have meant that all EU agreements became null and void, which would have presented severe economic consequences for the country.
The SVP harshly criticized the final agreement, which failed to implement immigration quotas but instead offered moderate improvements regarding job market conditions for the Swiss. The SVP called it “a betrayal of voters’ wishes” and unconstitutional, while the EU commission celebrated the “hugely watered-down version of the initiative.“
The SVP, this time around, will include language in the referendum that outright calls for Switzerland to ignore these international agreements, but Swiss business interests and the country’s left-liberal bloc are likely to put up a serious fight should the referendum win.
SPV argues that immigration does not equal endless growth
The current Western model promotes the idea of endless GDP growth through mass immigration. More immigrants equal more consumers, more housing construction springing up across the countryside, and more Third World peoples adopting a First World lifestyle.
Left-liberal and Green parties across the Western world have simultaneously called for Europeans to have fewer children to save the environment, while promoting mass immigration from Middle Eastern, African, and Asian countries, with these newcomers known for their notoriously high birth rates. At the same time, countries like Switzerland, Germany, and the United Kingdom are breaking population records due to immigration, leading to a severe strain on the environment and social welfare models within these European nations — a development that has been rejected by only a handful of nations such as Denmark and Hungary.
The right, if it wants to survive, may have to tie environmental causes and climate change, which the youth of Europe overwhelmingly believe is occurring, to soaring population growth through immigration. The Swiss referendum may be a nod to a growing reality. Any referendum that calls for immigration restriction is likely to fail given the growing pro-migration youth vote, but if it can be tied to green causes, such a referendum may have a chance.
Futhermore, the SVP argues that this endless population growth model is not only unsustainable, but actually will not result in the desired outcome of endless economic growth.
SVP National Councilor Manuel Strupler states that purely “quantitative” immigration does not guarantee higher per capita growth. Furthermore, this type of immigration “dilutes” the values of Switzerland.
“At some point, someone will have to pay the costs of our current policy. We have a duty to the next generation to preserve the values that have made Switzerland successful”
Thomas Matter argues that population growth has actually reached the point of harming economic growth and will help push the country into recession. He says that while the population will increase by 2.5 percent in 2022, per capita income will only rise by 2 percent:
“They want us to believe that immigration rhymes with growth. But in reality, we are heading towards a recession,” he said.
He notes that France and Germany have closed their borders to illegal immigration from Switzerland, with Switzerland increasingly seen as a transit country. He warns that “a disaster is brewing.”
Tensions are on the rise all over the planet, and global conflict will be one of the big trends that we will all be watching in 2023. And that is extremely unfortunate, because more global conflict won’t be good for any of us. Considering what we have been through the past several years, we could really use a time of peace. Sadly, as I write this article it appears that more war is inevitable. But where will it erupt first?
In recent days, the mainstream media has suggested several potential candidates…
Will it be Serbia?
Things haven’t been this tense between Serbia and Kosovo since Bill Clinton was president.
There have been several alarming incidents over the past month, and now it is being reported that the president of Serbia has just raised the alert level of his military to the “highest level of combat readiness”…
As Russia’s unprovoked war in Ukraine heads towards its one-year anniversary, another European flashpoint is in danger of reigniting a second war on the continent.
Kosovo was at the center of the last all out-war in Europe in the late ‘90s and tensions there have never fully dissipated.
Serbian President Aleksandar Vucic has this week put his army on its “highest level of combat readiness” to protect ethnic Serbian areas in northern Kosovo he says are under threat from Kosovo. Vucic says his military will “take all measures to protect our people and preserve Serbia.”
But I don’t think that Serbia will be first.
The major powers of western Europe are desperate to avoid a second war in their own backyard, and both sides still seem open to a diplomatic solution.
Will it be North Korea?
Just a few years ago, things were going so much better with North Korea.
But now with Joe Biden in the White House any hope for lasting peace has gone out the window.
The North Koreans have been getting increasingly aggressive, and this week they actually sent a drone almost all the way to Seoul.
South Korea’s military fired warning shots, scrambled fighter jets and flew surveillance assets across the heavily fortified border with North Korea on Monday, after North Korean drones violated its airspace for the first time in five years in a fresh escalation of tensions.
South Korea’s military detected five drones from North Korea crossing the border, and one traveled as far as the northern part of the South Korean capital region, which is about an hour’s drive away, South Korea’s Joint Chiefs of Staff said.
I think that the North Koreans were trying to probe South Korea’s defenses.
“Our military will thoroughly and resolutely respond to this kind of North Korean provocation,” Maj. Gen. Lee Seung-o, spokesman for the South Korean Joint Chiefs of Staff, said at a press briefing.
Tensions along the militarized border have already been high due to Pyongyang firing off a record number of ballistic and other missiles this year, including a pair fired last week toward Japan. With now days left in 2022, analysts have tracked over 90 missiles fired this year.
Tensions on the Korean peninsula are the highest that they have been in decades, but I don’t think that this will be the first major war to erupt in 2023 either.
Personally, it is my opinion that North Korea will not seriously consider an invasion of South Korea until China invades Taiwan.
Will it be China?
Years ago, a lot of people thought that I was nuts for warning that the U.S. and China would eventually go to war.
And I could definitely understand the skepticism, because our stores are filled with goods made in China and our ties with the Chinese just kept getting tighter and tighter.
But now “the Taiwan issue” has changed everything.
China’s military sent 71 planes and seven ships toward Taiwan in a 24-hour display of force directed at the island, Taiwan’s defense ministry said Monday, after China expressed anger at Taiwan-related provisions in a recently approved U.S. annual defense spending bill.
China’s military harassment of self-ruled Taiwan, which it claims is its own territory, has intensified in recent years, and the Communist Party’s People’s Liberation Army has sent planes or ships toward the island on a near-daily basis.
When China ultimately invades Taiwan, the U.S. and China will instantly be in a state of war.
And once that happens, the flow of goods from China immediately ends.
Are you prepared for that?
But I don’t think that such a scenario will play out just yet.
My personal opinion is that there is another major conflict that is likely to erupt even sooner.
Will it be Iran?
For years, Benjamin Netanyahu pledged that he would never, ever allow the Iranians to build their own nuclear weapons.
Well, the IAEA claims that the Iranians are now “one technical step away” from enriching weapons-grade uranium.
So it is put up or shut up time for Netanyahu.
Either he takes military action or he lives with a nuclear Iran.
Of course if Israel launches an attack on Iran, the Iranians will hit back extremely hard.
In fact, the Iranians just threatened to raze Tel Aviv “to the ground” if Israel decides to attack…
Iran has threatened to raze Tel Aviv ‘to the ground’ in a chilling video explaining how Tehran would respond to an Israeli strike on its nuclear plant.
The two and a half minute video – posted by @MEMRIReports – contains violent footage of missiles going off and several terrifying explosions to demonstrate what would happen to Tel Aviv.
‘This is what the first few minutes of the Iranian response will look like,’ the video explained.
Once this war starts, it is going to be incredibly destructive.
But I don’t think that it will start the way that most people are expecting.
As they say, stay tuned for future developments.
Meanwhile, I believe that things in Ukraine are about to get even more “interesting”.
On Monday, Russian Foreign Minister Sergey Lavrov issued a statement that some media sources are describing as an “ultimatum”…
“Our proposals for the demilitarization and denazification of the territories controlled by the regime, the elimination of threats to Russia’s security emanating from there, including our new lands, are well known to the enemy,” state news agency TASS quoted Lavrov as saying late on Monday.
“The point is simple: Fulfill them for your own good. Otherwise, the issue will be decided by the Russian army.”
Other Russian officials have also issued puzzling statements in recent days.
Are they trying to give diplomacy one final chance before they take this war to a point of no return?
The Russians continue to move more military assets into position for such a campaign, but that doesn’t mean that it will actually happen.
However, if Vladimir Putin does pull the trigger there will be no hope for a peaceful solution.
Meanwhile, the Russians continue to try to frame this conflict as a great battle between good and evil. In fact, a commercial has just been released that portrays Vladimir Putin as a Santa Claus figure that is delivering a boy from the twisted values of the western world…
Russian President Vladimir Putin has been portrayed as Santa in an anti-Western propaganda video released on the country’s social media.
The film – made by a production company called Signal – depicts ‘Santa Putin’ swapping a photograph of a child’s same-sex parents for one of a mother and father, and gifting the boy being raised as a girl a football, toy cars and a drum kit.
The video feeds into Russian prejudices about Europe and the United States which have been fuelled by pro-Kremlin propagandists during the war in Ukraine to frame the conflict as a clash of values between Russia and Ukraine’s western allies.
I would very much encourage you to watch the video. It will give you some insight into how the Russians really view their conflict with the west.
The Russians truly consider themselves to be “the good guys”, and they believe that the western powers are an existential threat to the future of their civilization.
Meanwhile, the Biden administration and the western European elite also consider themselves to be “the good guys”, and they believe that the Russians must be crushed at all costs.
Unfortunately, leaders on both sides are not exactly behaving rationally at this juncture, and this has brought us to the brink of a global war of cataclysmic proportions.
In case you haven’t noticed, Russia, China, North Korea and Iran have all been deepening ties with one another.
Three of them already have nuclear weapons, and Iran will be able to construct their own nukes soon.
Perhaps we should pull back from the precipice before the missiles start flying.
Rational leaders would be looking for a peaceful way out of this mess.
Sadly, rational behavior among our leaders is in very short supply at this point.
* * *
It is finally here! Michael’s new book entitled “End Times” is now available in paperback and for the Kindle on Amazon.
The Inflation Reduction Act (IRA) appropriated $369 billion toward cutting U.S. carbon emissions 40 percent by 2030, including tax credits for purchasing electric vehicles (EVs).
But good luck qualifying for them.
Since 2010, a U.S. taxpayer purchasing an electric car could claim a nonrefundable tax credit of up to $7,500. However, only 200,000 credits could be claimed per automaker. Tesla, General Motors, and Toyota have all reached the limit.
The IRA removes the manufacturer cap and introduces a new credit of up to $4,000 toward a used EV, which could help anybody who can’t or doesn’t want to buy brand new. But the law also established several prerequisites that a vehicle must meet to qualify.
Since August, vehicles have been subject to a “final assembly” requirement, which says the car’s final assembly must have occurred in North America. That single restriction is complicated, as you can see from the Department of Energy’s list of eligible vehicles. The agency recommends that shoppers research cars by Vehicle Identification Number (VIN) to determine eligibility. Those requirements carry over into 2023.
Starting January 1, individuals earning over $150,000 per year or households earning over $300,000 will no longer qualify for the EV tax credit. Electric cars that retail for more than $55,000, and electric trucks and SUVs over $80,000, are also not eligible. According to Kelley Blue Book, the average price for an EV is over $65,000.
Under the IRA, the credit also depends on the materials used to assemble a vehicle’s batteries. Certain minerals—chiefly lithium, cobalt, manganese, nickel, and graphite—are essential to constructing the lithium-ion batteries used in electric vehicles. Starting in 2023, qualifying for half of the $7,500 credit requires that 40 percent of the minerals used to assemble an E.V.’s battery be sourced from the U.S. or a country with which it has a free-trade agreement. To qualify for the other half, 50 percent of the battery’s parts must be sourced domestically or from a free-trade partner. Each of these percentages will increase over subsequent years.
In December, the Treasury Department suspended the mineral requirement until March, when it can issue final rules. But notably, the law requires that starting in 2024, no battery parts can be sourced from a “foreign entity of concern,” such as Russia or China. The same requirement applies to minerals the following year.
That provision was inserted at the insistence of Sen. Joe Manchin (D–W. Va.), who said of the bill, “I don’t believe that we should be building a transportation mode on the backs of foreign supply chains.” But China controls between 60 and 80 percent of the world’s critical EV minerals, and it manufactures more than 75 percent of all EV batteries. The U.S. imports more than half of every single one of the critical minerals listed above, including 100 percent of its manganese and graphite and 76 percent of its cobalt.
Manchin’s provision is consistent with the Biden administration’s overall “Buy American” policy, prioritizing domestic production even if a product can be made cheaper (or better) overseas. Free trade across borders is a net benefit for both buyers and sellers. Meanwhile, economic protectionism like “Buy American” harms consumers and isolates allies.
The E.V. tax credit is a convoluted mess. Because of the Treasury delay, most automakers will likely be able to offer half of the credit for two months. Then for the rest of the year, only certain models will qualify, forcing customers to check each individual car or truck to see. Finally, next year, fewer and fewer vehicles will qualify at all, as the U.S. is unable to source necessary materials from politically-favored places. Perplexingly, Treasury announced in late December that leases would be exempt from all sourcing and assembly requirements and eligible for the full $7,500 credit.
Subsidies drive up prices, as do rules that create scarcity further up the supply chain. If the Biden administration secretly wanted to slow down electric vehicle adoption while claiming to boost it, they could not have come up with a better plan.
Almost everyone will take Garett Jones’ The Culture Transplant as a forthright defense of not just maintaining existing immigration restrictions but tightening them. Every chapter strongly implies that liberal immigration policies are naive and myopic. Jones, an economist at George Mason University (where I also teach), concludes by warning that admitting millions from the poorest nations will impoverish all humanity: “Innovation would decline overall, and since new innovations eventually spread out across the entire planet, the entire planet would eventually lose out.” Even his support for high-skilled immigration is restrained: Jones wants to welcome “immigrants who have substantially more education, more job skills, more pro-market attitudes, than the average citizen” (emphasis mine), and he advocates “instantaneous citizenship” for “one-in-a-thousand minds” such as “Nobel laureates, great writers, and innovative scientists.”
Yet Jones’ evidence argues for radical liberalization of immigration: if not fully open borders, then at least 50 percent open borders—at a time when borders are somewhere around 2 percent open. Using Jones’ hand-picked measure of cultural quality, immigration from all of the following countries to the United States would be, by his argument, a clear-cut cultural improvement: Algeria, Argentina, Australia, Austria, Belarus, Belgium, Brazil, Canada, China, Costa Rica, Croatia, Denmark, Estonia, France, Germany, Greece, Hong Kong, Hungary, Ireland, Italy, Japan, Latvia, Lithuania, Netherlands, New Zealand, Norway, Poland, Portugal, South Korea, Moldova, Russia, Singapore, Slovakia, Spain, Sweden, Switzerland, Thailand, Tunisia, Ukraine, the United Kingdom, Uruguay, and Vietnam. Using a slightly different cultural measure adds the 1.7 billion inhabitants of India and Pakistan to the list. According to the research upon which Jones rests his book, we should expect migration from this long and populous list of countries to (a) substantially increase per-capita U.S. gross domestic product (GDP), (b) drastically increase gross world product, and (c) drastically increase global economic growth.
This research is called the “Deep Roots of Growth,” or just “Deep Roots.” Its punchline is that countries now inhabited by people whose ancestors were relatively economically advanced in the distant past have a strong tendency to be absolutely advanced today. “Now inhabited” is key; according to Deep Roots research, a major reason the United States is rich today is that modern Americans are mostly descended from people who were rich by the standards of their time. Economically, it doesn’t matter that in 1500 A.D., the current area of the United States was largely populated by hunter-gatherers, because the descendants of these hunter-gatherers are now (for horrifying reasons) a tiny sliver of the population.
The initial Deep Roots papers focus on the emergence of agriculture and government. They conclude that the earlier a country’s ancestors adopted farming and states, the richer the country is today. Later work, which Jones prefers, focuses on the adoption of key technologies. Above all, if a country’s ancestors were technologically advanced in 1500 A.D., their descendants tend to be much richer today. Critically, this isn’t merely fortuitous for the descendants. Jones spends a whole chapter on the world’s innovation leaders: China, France, Germany, Japan, South Korea, the U.K., and the United States. He calls them the “I-7.” Thanks to the product of august ancestry and high population, he argues, these seven countries deliver almost all the innovation that fuels the progress of humanity. If they let migration degrade their cultural quality, he argues, the domestic damage will spill over to the whole world.
Jones concedes that these are long-run results: “In the short run—a couple of decades, say—admitting an extra ten million people each year from the world’s poorest countries into the high-innovation I-7 nations would surely improve the lives of almost every immigrant. After all, government and culture rarely change much in the short run.” He admits Deep Roots predictions aren’t perfect—most notably, China and India, the world’s two most populous countries, are far poorer than the models predict. Still, he thinks the smart money should bet on the adage that “the best predictor of a people’s success in the long-run future is success in the people’s long-run past.”
Given this adage, the disconnect between Jones’ social science and his recommended immigration policies is vast. The most restrictive immigration policy the research supports is: “Freely admit anyone who improves your country’s Deep Roots.” This isn’t predicted merely to raise living standards in the receiving countries but also to fuel global growth by filling the I-7 with high-potential workers. For most of the world’s richest countries, this implies radical deregulation—especially for the United States, because despite our high living standards, our ancestry scores are mediocre.
Throughout The Culture Transplant, Jones talks about researchers “hiding the ball”: dazzling readers with technical prowess instead of patiently pondering what they’ve really shown. I submit that treating Deep Roots as an argument for anything other than radical liberalization of immigration is an egregious case of hiding the ball. And it gets worse: The mathematics of the seminal Deep Roots paper implies that if the entire population of the Earth moved to the United States, gross world product would still multiply. That’s even more dramatic than Michael Clemens’ famous result that open borders would “double global GDP,” which Jones also neglects to cite. If that isn’t “hiding the ball,” what is?
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At this point, a reasonable reader will wonder, “How solid is the research upon which Jones relies, really?” While Jones vocally “kicks the tires,” he should have kicked harder and longer. I started documenting major doubts about Deep Roots research almost seven years ago, and he replies to virtually none of them.
Jones responds to just one of my objections: that Deep Roots gives deeply false predictions for China and India, the world’s two most populous countries. (In fact, it gives deeply false predictions for the three most populous countries, because the United States sharply overperforms.) His reply: Since China and India are growing quickly, the anomaly is shrinking. Fair enough, but the anomaly can only shrink rapidly because the Deep Roots story flopped for both countries for centuries. Furthermore, with the help of the original researchers and the economist Nathaniel Bechhofer, I was able to show that if we statistically weigh countries by their populations and redo the entire analysis, the original Deep Roots results vanish. This doesn’t necessarily mean the Deep Roots literature is worthless, but it does raise doubts about Jones’ tire-kicking.
The Culture Transplant explores several other related topics, especially the speed of cultural assimilation and the dangers of diversity. Much of this research was new to me, so I’ll refrain from criticism until I have had the time to kick the tires to my own satisfaction. But I fear that I’ll find that Jones is again hiding the ball. Why? Because when I know a piece well, I often see the ball he’s trying to hide. Most strikingly, when he discusses Robert Putnam’s famous article on the effects of ethnic diversity on social trust, he neglects to mention that moving the U.S. from its current diversity to the maximum possible diversity would reduce trust by a microscopic 0.04 on a 4-point scale. Much ado about next to nothing.
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The Culture Transplant is enviably well-written. Jones affirms ugly truths like: “The many lives…that would be dramatically extended over the next half century if Indonesia’s 300 million citizens became twice as rich are, in my personal estimation, worth the genuine risk of an ethnic riot every decade that kills two thousand people.” We should all have such courage and eloquence.
This book is the most intellectually serious critique of the libertarian open borders position. As such, I expect that intellectually serious critics of the libertarian open borders position will hail it as a decisive refutation of a dangerous conceit. But even if you accept its evidence, those data argue for the radical liberalization of immigration, including from many Third World countries, though arguably with a different mix than we see today.
Jones is not a lifelong opponent of immigration. He signed a 2006 pro-immigration letter—and 10 years later, his book Hive Mind affirmed, “I’ve always been glad I signed this letter: it sums up the great promise of immigration. It’s always worth reminding citizens of high-productivity countries that immigration is still the most reliable way to raise the living standards of people in low-productivity countries.” The first sentence of Jones’ first chapter is a callback to his pro-immigration past: “This book tells a true story that this economist sincerely, truly does not want to believe.”
The good news is Jones can accept all the evidence he presents while renewing his earlier support for much more immigration. The bad news is that much of his evidence is overstated and undervetted, so neither he nor anyone else should use it to dramatically revise their views on immigration one way or the other.
