Daily Archives: 6 April 2016

A Conservative’s View of American National Policy

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My new book is out; see the links at the right to get it in Kindle format from amazon.com.  The book also is available here.

A Conservative’s View of American National Policy is the companion piece to A Conservative’s View of American Domestic Policy. Whereas Domestic Policy discussed internal affairs, National Policy is about our actions on the global stage.

My exposition centers on two things, the first of which is this: foreign and defense policy are more than closely related. They are not even mirror-images of each other; rather, they aren’t even tightly intertwined; they’re the same thing viewed from different perspectives. There are few, if any, aspects of foreign policy that do not inform defense policy, and there are even fewer aspects of defense policy that don’t affect foreign policy. We discuss these general policies and we have separate departmental heads representing them in the Executive Branch Cabinet only to facilitate our general understanding and the Cabinet Secretaries’ more efficient execution.

Accordingly, we need to understand the unity of foreign and defense policy as a single concept, not two related ones, then develop a unitary national policy that recognizes that necessary unity and that coordinates and maximizes the strengths of each, using each to compensate for the weaknesses of the other.

The other thing is this: after having made my case regarding the essential unity of foreign and defense policy, the rest of this effort will be concerned with what we should do with that unity, how we can put a national policy to use in a practical manner for our own betterment as a nation in a globally entangled world.

I propose an active policy of political engagement and military power projection. When and where we must act overtly militarily (rather than merely project our power to act), our objective must be victory. We should never engage in a fight with the purpose of a draw, as we did, for example, in the Korean and Vietnam Wars.

Political engagement (and economic engagement as a tool of national policy) must be based on active policies designed to expand the geographic and popular reach of liberal democracy and individual freedom and contract the sphere of tyranny and oppression. In a world of global competition for hearts and minds, the contest between free men and subjects is most definitely a zero-sum game. We win and they lose, else it’ll be the other way around.

 

More Governance by Fiat

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This time regarding American businesses merging with overseas companies and moving to that overseas lower corporate tax environment.  This improves profits for the businesses’ owners, never mind that.  It reduces revenue for the Know Betters in our Government.

The new [Treasury Department] rules, the government’s third wave of administrative action against inversions, will make it harder for companies to move their tax addresses out of the US and then shift profits to low-tax countries….

[Emphasis added]

The aggressive nature of this latest round also comes

from a Treasury Department that has expressed frustration at the limits of its own powers in curbing these transactions.

Because Know Betters always want more power.  It’s not mete that the plebes and commoners should be in their way.  Here’s the gist of these rulers’ latest power grab:

The rules have two main parts….  First, the government would go after what it calls “serial inverters,” large companies created through multiple inversions or takeovers of US companies. The government would disregard US assets acquired by such companies over the previous three years.

And

To reap the full benefits of inverting, the US company’s shareholders should own between 50% and 60% of the merged entity, which requires a partner of carefully calibrated size.

Because business decisions concerning the details of a merger are better made by the Know Betters of Government than they are by the owners and managers of the businesses involved.

And

Treasury’s second action would limit what is known as earnings stripping, a practice that follows many inversions and other cross-border acquisitions that helps lower companies’ effective tax rates.

Inverted companies—in fact, all non-US-based companies—can lend money to their US subsidiaries.  Those moves create deductible interest in the US, reducing the income subject to the 35% US corporate tax rate and shifting income to a lower-taxed jurisdiction.

Because business leaders can’t be allowed to honor their fiduciary duties to the business’ owners by looking to maximize profit and to maximize revenue left in the business’ hands.  No, not when doing that runs counter to the demands of Know Betters for ever more money for Government.

Jack Lew, author of the rules in his capacity as Treasury Secretary had this bit of disingenuosity in defense of his latest stab:

After an inversion, many of these companies continue to take advantage of the benefits of being based in the United States—including our rule of law, skilled workforce, infrastructure, and research, and development capabilities—all while shifting a greater tax burden to other businesses and American families[.]

Never mind that inversions could better be discouraged by lowering our existing corporate tax rates to internationally competitive levels, and which thereby would shift no burden to other businesses and American families.  Lowering taxes is anathema to a gang that sees tax revenue as another path to their political power. (Certainly, Treasury can’t lower tax rates on its own, but Lew is carefully silent on this matter.)

Elections have consequences, folks.