Tag Archives: foreign policy

Sanctioning Russia

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Maybe. President Joe Biden (D) is acting like he’s taking action that would seem to respond to Russia’s SolarWinds hack and interference with the 2020 Presidential election. His potential action includes

  • expulsion of 10 Russian diplomats, includ[ing] representatives of Russian intelligence services
  • sanctions against “dozens” of people and companies
  • target[ing] Moscow’s ability to borrow money by prohibiting US financial institutions from buying Russian bonds directly from Russian institutions.

The sanctions will take effect on 14 June.

It turns out, on inspection that this move isn’t all that. Expelling some low-level diplomatic functionaries isn’t a very strong move. Neither is the action against Russian bonds very strong: that “sanction” explicitly allows US institutions to buy Russian bonds from resellers and elsewhere in the secondary markets. Rather than being a strong move, it just adds a trivial layer of bureaucracy.

And there’s the delay of a month-and-a-half before taking effect. It won’t take those diplomats six weeks to pack up and leave. It won’t take six weeks for business entities to adjust their relationships with the “dozens.” It won’t take six weeks for US institutions to adjust their buying procedures to focus on the secondary markets.

None of that even has to begin earlier than those six weeks.

However.

The Biden administration will have six weeks of distractions from the threat posed by the People’s Republic of China and from the Biden administration’s begging of Iran to let the US back into the nuclear weapons development deal.

The Biden administration will have six weeks in which to let its finger-wagging at the Russians die down, followed by quietly dropping the sanction threat.

Corporate Taxes

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Treasury Secretary and ex-Federal Reserve Chairman Janet Yellen opened her Wednesday Wall Street Journal op-ed with this:

When Congress enacted the Tax Cut and Jobs Act of 2017, the result was a dramatic reduction in corporate tax revenue. Over the past three years, corporate tax collections have fallen to their lowest level since World War II: 1% of gross domestic product.

Amazingly—shockingly—Yellen wrote that as if it were a Bad Thing.

Then she partially rationalized her disparagement with this:

Proponents of the TCJA said the US would get something in return for these tax cuts. Lower rates, the argument went, would lure production and investment to our shores, but that hasn’t happened—and for an obvious reason: other countries see what we’re doing and respond. When they see us lower our rates, they lower theirs to undercut us. In the end, no nation ends up more competitive. The result is a global race to the bottom….

Some of this is plain wrong. We did get trillions of dollars of corporate cash repatriated. We did get production and investment returned. And that spurred the outcome that Yellen so breathtakingly mistakes as a further Bad Thing. Other nations were spurred to compete on tax rates in order to retain their own businesses and to attract foreign investment.

Which drives the race to Yellen’s so-feared bottom.

But what is that bottom? Our Constitution specifies that the only things our Federal government is allowed, legitimately, to raise revenues for are three: to pay the Debts and provide for the common Defence and general Welfare of the United States. Those, with the general Welfare further specified by the remaining clauses of that Article I, Section 8, also, are the only things on which our Federal government may spend our taxpayer money. The other nations, particularly those competing with us on tax rates, have their own taxing (and spending) floors.

Racing to those bottoms may be bad for Government bureaucrats like Yellen, but they’re unalloyed Goods for the citizens of all of our nations, as we get to keep more of our money and make our own spending, saving, investing, and other allocating decisions with our money—and our decisions will be far better and far more efficiently done than any of our Governments can ever hope to do.

And at that natural bottom, nations can stop trying to compete on tax policy and focus on Adam Smith’s competition—providing better quality goods and services. Which is even better for us citizens, if not for the power of Government personages.

Only a Leftist or an entrenched bureaucrat can misunderstand that.

A Couple Errors about to be Reversed?

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Here’s one, maybe.

President [Joe, D] Biden on Tuesday announced that all adults will be eligible to get a COVID-19 vaccination by April 19, which is even earlier than the May 1st date that he announced last month.

That pretty tightly coincides with the predicted achievement date the prior administration made months ago and that until very recently Biden and his Progressive-Democrats had derisively pooh-poohed.

Here’s another.

Department of Homeland Security Secretary Alejandro Mayorkas told department employees he may restart border wall construction to plug what he called “gaps” in the current barrier.

OK, that’s only a partial correction that may be in the offing, but still….

Hmm….

Pesky Democracy

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We’ll have none of that here. Much too noisy. Much too disordered. Much to great a risk to our rule.

And so the People’s Republic of China has extended its despotism further into Hong Kong.

China has sharply reduced the number of directly elected seats in Hong Kong’s legislature in a setback for the democracy movement. The changes were announced Tuesday after a two-day meeting of China’s top legislature.
In the new make-up, the legislature will be expanded to 90 seats, and only 20 will be elected by the public. Currently, 35 seats, or half of the 70-seat legislature, are elected.
China’s top legislature approved amendments to Hong Kong’s constitution on Tuesday that will give Beijing more control over the makeup of the city’s legislature.

Those 20 will be carefully selected by the PRC’s Standing Committee of the National People’s Congress:

Local national-security officials will also get effective veto power over election candidates, allowing authorities to bar opposition figures from elected office.

This is not the behavior of a civilized, much less enlightened, nation. It is, though, of a piece with the barbarism of genocide against the Uyghurs, the occupation of Tibet and the South China Sea, and the threats of war against the Republic of China.

The PRC, American Business, and Decoupling

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Matt Pottinger, former President Donald Trump’s Deputy White House National Security Adviser, had a number of thoughts concerning the People’s Republic of China, and its targeting of American businesses, with unusual bluntness.

Beijing’s message is unmistakable: you must choose. If you want to do business in China, it must be at the expense of American values. You will meticulously ignore the genocide of ethnic and religious minorities inside China’s borders; you must disregard that Beijing has reneged on its major promises—including the international treaty guaranteeing a “high degree of autonomy” for Hong Kong; and you must stop engaging with security-minded officials in your own capital unless it’s to lobby them on Beijing’s behalf.
Another notable element of Beijing’s approach is its explicit goal of making the world permanently dependent on China, and exploiting that dependency for political ends.

RTWT.

What also drew my eye is this, near the end of his op-ed, in response to a PRC strawman that the US was working on decoupling our economy from the PRC’s.

No one in Washington is seriously threatening a wholesale decoupling of the two economies.

That’s sadly true, regardless of the fact that Pottinger, with that sentence, was setting aside the PRC’s nonsensical claim. Pottinger did suggest that we are decoupling in key technologies, but I think that’s inadequate.

Washington—and private enterprise—should be moving apace to decouple from the People’s Republic of China. Not just in “key technologies,” too, but all across our economy, from strategic minerals, through those key technologies, to ordinary consumer products, components, and raw materials.

It’s a wide world, and we have no need to trade with our enemies, much less one who’s clearly stated goal is to conquer us and that wide world.