NATO and Mutual Defense Alliances

Secretary of State Rex Tillerson was in Europe at the end of the week, and among other things, he pushed for NATO member states to honor their decades-old commitment to spend 2% of their GDP on defense.

Germany, among other members, insisted that honoring their commitment was “unrealistic.”

German Foreign Minister Sigmar Gabriel said demands for 2% of GDP spending were “totally unrealistic.” He said that to meet the US target, Germany would have to increase spending by some €35 billion ($37 billion).

After all, Gabriel has argued,

…a strong defense isn’t enough to ensure security.

“Our Federal Dollars”

It doesn’t get any clearer than this.  Seattle Mayor Ed Murray has illustrated the addictive nature of Federal funds transfers to the States and lower government jurisdictions with that phrase.

In defending his city’s lawsuit against the Federal government over DoJ’s decision to withhold Federal monies from cities that violate Federal law by protecting illegal aliens from enforcement of immigration law, Murray said this:

The federal government cannot compel our police department to enforce federal immigration law and cannot use our federal dollars to coerce Seattle into turning our backs on our immigrant and refugee communities.

Port Automation

It’s coming to west coast ports, and the unions don’t like it.

The push over the last decade by international maritime ports to fully automate operations has sparked the ire of many US longshoremen whose high-paying jobs and way of life are at stake. The trend also sets up a battle between their unions and companies and governments who see automation as a cleaner, more efficient and more cost-friendly alternative to the current system.

Never mind that west coast ports—three in particular, Long Beach, Los Angeles, and Oakland—do 40% of the nation’s (not just the west coast’s) container traffic and so costs there have sharp impact on the nation’s economy.

Another Assault on US Intellectual Property

Beijing has proposed requiring cloud-computing services providers to turn over essentially all ownership and operations to Chinese partners and could result in the transfer of valuable US intellectual property, according to the letter, viewed by The Wall Street Journal.

Not “could result”—technology theft transfer is the point of the requirement.  This comes against the backdrop of the People’s Republic of China’s ongoing technology requirements.

China already places restrictions on investing for foreign cloud providers operating in the country under rules passed in the last two years…including forced collaboration with rivals and technology transfer.

Is the PRC market really worth these losses?

House Freedom Caucus of No

Yesterday, the membership of the House Freedom Caucus of No forced the American Health Care Act, the first stage of a three-stage Obamacare repeal and replace program offered by the majority of the House Republican Conference, to be withdrawn from the day’s backup vote (recall that these No-ers already had forced a delay from Thursday’s vote over their demand to have their way or there could be no Act), and so there will be no AHCA.

Delays

The House Republicans were forced to cancel yesterday’s scheduled American Health Care Act vote.  The Freedom Caucus, the Caucus of No, couldn’t be satisfied.  Congressmen like Jim Jordan (R, OH) and Caucus of No Chairman Mark Meadows (R, NC) refused late compromises, all the while insisting by implication from their refusals that constituents of other Congressmen, for instance Tom Cole (R, OK), worked for them and not that Cole worked for his Oklahoma constituents—and that those Oklahoma constituents might have different imperatives than those Congressmen of the Caucus.  So, no compromise from the No-ers.

The PRC’s Economic Opening

The People’s Republic of China is wining and dining major American companies, trying to convince them that the time is ripe for investing in the PRC.

Apple Inc’s Tim Cook and Jon McNeill of Tesla Motors were among dozens of western executives who spent a long and unseasonably warm weekend here strolling the grounds where Mao Zedong once lived, surrounded by blooming magnolia trees and gliding swans.

Vice Premier Zhang Gaoli:

China will push for a higher level of economic opening-up[.]

And Jake Parker, vice president of the U.S.-China Business Council

Obamacare Replacement

One aspect of the plan on offer in the House is this:

…whether it includes enough reform to arrest the current death spiral in the individual insurance market.

Notably, the bill includes a new 10-year $100 billion “stability fund” that allows states to start to repair their individual insurance markets. Before ObamaCare, it wasn’t inevitable that costs would increase by 25% on average this year, or that nearly a third of US counties would become single-insurer monopolies. With better policy choices, states can make coverage cheaper and more attractive for consumers and coax insurers back into the market, and the stability fund is a powerful tool.

Tax Rates and Tax Credits

One illustration of the value of the relationship between the two is provided in Laura Kusisto’s piece, Tax Overhaul Threatens Affordable-Housing Deals, in a piece in Tuesday’s Wall Street Journal.

The possibility of a tax-code overhaul is casting a shadow over the $10 billion affordable-housing industry, which receives tax credits so valuable they often determine whether or not projects get off the ground.

Members of Congress and President Donald Trump have proposed reducing the corporate tax rate to 15% to 20% from the current 35%, dimming the allure of a credit investors such as big banks and insurance companies receive to offset income taxes.

It’s a Start

The Trump administration is considering sweeping sanctions aimed at cutting North Korea off from the global financial system as part of a broad review of measures to counter Pyongyang’s nuclear and missile threat, a senior US official said on Monday.

The sanctions supposedly include economic sanctions against People’s Republic of China banks and other businesses having intercourse with northern Korea and northern Korean entities.

Separately, I have to ask in the current environment: how does this sort of thing get leaked?