Biden: "I'm a union guy. They built the middle class. It's about time they get a piece of the action. Not a contract will go out that I control that will not go to a company that is an American company with American products all the way down the line and American workers." That's what we can look forward to: bidders for unionized companies will be awarded contracts (even if they aren't low bidders?).
Biden Is FDR Reincarnated, and Just as Destructive
George Santayana (1863–1952), in The Life of Reason: Five Volume in One, wrote, "Those who cannot remember the past, are condemned to repeat it."
It appears as if Joe Biden can't (or won't) remember and is going to repeat what FDR (and others) did.
Politicians (primarily Democrats such as Schumer, Pelosi, Newsom, Cuomo, and Whitmer) wrecked the U.S. economy through a completely unnecessary and wildly inconsistent power-grab. Now Biden plans to finish it off.
Ian Haworth, on 17 May, wrote "Joe Biden Thinks the Failures of Big Government Can Be Fixed By...More Big Government." Biden actually suggested that the disastrous April jobs report is evidence to support his American Rescue Plan. Biden said, "So look, it's going to continue to improve. Today's report makes clear: thank goodness we passed the American Rescue Plan. Help is here, and more help is on the way, and more help is needed."
Infrastructure and Jobs
Biden proposed a $2.3-trillion infrastructure and jobs spending package, dubbed the American Jobs Plan. Its purpose is to elevate the American economy from the COVID-19 pandemic decline with the largest "jobs investment since World War Two." It is an eight-year initiative, requiring spending about 1% of the annual GDP to rebuild infrastructure for transportation, manufacturing, "affordable housing," tech research and development, and other investments in job programs. About his plan, he said, on March 31, 2021, in Pittsburgh, "It's not a plan that tinkers around the edges. It's a once-in-a-generation investment in America, unlike anything we've seen or done since we've built the interstate highway system or the space race." Biden claims spending on infrastructure will "help us compete with China, combat climate change, kickstart economic growth, and, incredibly, reduce the federal deficit."
Did Biden remember when he mentioned the interstate highway system and the space race? History informs us about an infamous megalomaniac who raised his country's economy out of the doldrums via an Infrastructure and Jobs program: Hitler. He built, among other things, autobahns and V-2 rockets.
Jim Powell, in his book FDR's Folly, offered this:
"Jobs" programs, such as the ones FDR introduced, must be avoided because they increase the cost and burden of government, making it more difficult for the private sector to function. "Jobs" programs don't increase the total number of jobs in the economy. By increasing the tax burden [see below], such programs reduce available funding for private sector jobs, resulting in the replacement of private sector jobs with government jobs. Additionally, government spending is driven by self-interested politicians eager to buy votes for the next election, which means the programs will end up having effects very different from what was intended.
Taxes
The Biden tax plan will:
- reduce GDP by 1.62 percent over the long term ($2.782 billion)
- result in a 1.9-percent decline in after-tax income for all taxpayers
- increase the corporate income tax to 28%
- establish a corporate minimum tax on book income
- result in the top capital gains tax rates on investment to approximately double
- drop full-time equivalent jobs by 542,000
- drop capital stock value by 3.75%
- double the global intangible low tax income (GILTI) tax rate and impose it country by country
Florida representative Vern Buchanan wrote, "President Joe Biden's latest barrage of proposed tax increases are aimed squarely at small businesses and working-class families that are the beating heart of communities around the country. In addition to raising taxes on our nation's small businesses, the White House is also proposing stiff new tax hikes on corporations which will inevitably hit working-class families through the increased cost of goods, services and utility prices."
Biden has promised he won't raise taxes on anyone making less than $400,000 a year. But...the tax he is levying upon all Americans is inflation, which will do far more harm to middle-class Americans than his proposed tax hikes. The trillions of dollars in infrastructure and jobs spending and money-printing by the Federal Reserve is already having an effect on prices. Inflation has reached its highest point in years and will probably reach the highest in two generations. Inflation was not a problem during the Great Depression. It was -1.75%.
Powell:
FDR signed into law higher taxes for everybody (he actually tripled taxes). Consumers had less money to spend. Employers had less money with which to hire people. It's crucial to cut taxes because taxes are the biggest burden millions of people face today. Tax cuts mean an expanding economy by returning money to the individuals who earned it. People are more likely to be careful about how their own money is spent than about how other people's money is spent, so giving individuals more control over their own money is likely to better promote prosperity. Efforts to "soak the rich" never work as planned because the investments of the rich are needed to create jobs. Tax cuts should be deep, should be for everyone, across the board, no conditions or limitations. There isn't any evidence that government officials possess the knowledge that would justify "targeted" tax cuts, aimed at encouraging people to do certain things which are supposedly more desirable than others.
Unions
The American Jobs Plan focuses on unionized American jobs (that, in itself, means that $2.25 trillion will buy a lot less infrastructure than it could — not a hit on unions, just an economic fact). Prevailing wage laws requiring federal infrastructure projects pay union rates to workers are a known contributor to America's outrageously high infrastructure costs. Plus "Buy American" mandates require federally funded infrastructure projects buy (usually more expensive) USA-made parts and materials (not a knock on USA manufacturers, just an illustration of "hand-tying").
Biden: "I'm a union guy. They built the middle class. It's about time they get a piece of the action. Not a contract will go out that I control that will not go to a company that is an American company with American products all the way down the line and American workers." That's what we can look forward to: bidders for unionized companies will be awarded contracts (even if they aren't low bidders?).
Powell again:
He [FDR] saw political advantages in helping the unions. The results were the National Industrial Recovery Act (NIRA) and the National Labor Relations Board (NLRB) who saw its mission as promoting compulsory union membership. Wage rates went up for those who had jobs. But the prolonged nature of the Great Depression was the result of rapidly rising money wages. This period [1933–1939] probably had the largest sustained peacetime increase in money wages in history, during the USA's worst depression. Consequently government mandates to use only union labor must end. Employers should be free to hire union or nonunion workers. Workers shouldn't be penalized if they choose not to join a union. Nonunion workers shouldn't be forced to pay union dues as a condition of employment. Nor should union workers be forced to pay for political activities with which they disagree.
Powell: "As a cure for the Great Depression, government spending didn't work."
But Biden is determined not to remember.
Image: Gage Skidmore via Flickr, CC BY-SA 2.0.
To comment, you can find the MeWe post for this article here.
Democrat-run, migrant-packed California leads the nation in poverty, according to a Census Bureau report which considers Americans’ housing costs alongside their income from wages and salaries.
The state of California is home to more illegal aliens than any other state in the country. Approximately one in five illegal aliens lives in California, Pew reported.
(ACCORDING TO LA RAZA FASCIST XAVIER BECERRA THERE ARE 10 MILLION ILLEGALS IN CA. NO ONE REALLY KNOWS OR WANTS TO KNOW)
Approximately a quarter of California’s 4 million illegal immigrants reside in Los Angeles County. The county allows illegal immigrant parents with children born in the United States to seek welfare and food stamp benefits.
The pregnant caravaner who calculatingly slipped across the U.S. in San Diego late last year, only to have her baby the next day, now, along with her entire family, gets that free ride on government housing.
California Has Highest Poverty Rate, with Housing Costs
Democrat-run, migrant-packed California leads the nation in poverty, according to a Census Bureau report which considers Americans’ housing costs alongside their income from wages and salaries.
The September 10 study shows 18.2 percent of California’s population is poor, far above the 13 percent poverty rate in Arkansas, 16 percent in Mississippi, and the 14.6 percent in West Virginia.
High housing costs also helped push New York’s poverty rate up to 14.1 percent, and New Jersey’s rate up to 14 percent, according to Table A5 on page 28 of the report, which is titled The Supplemental Poverty Measure: 2018.
The traditional wages-only measure of poverty shows 4.9 million Californians are poor, according to the measure.
But the cash-plus-housing Supplemental Poverty Measure shows 7.1 million California live below the poverty line. That means 18.2 percent — almost one-in-five — of the state’s 40 million residents are considered poor.
A huge factor in California’s nation-leading poverty is the escalating cost of real estate spurred by the growing number of wealthy people who compete for houses near the state’s coastline. “Coastal California is affordable for roughly 15 percent of residents, down from 30 percent in 2000,” said Joel Kotkin, a California expert.
Local politics also reduces the construction of the houses preferred by Californian families, Kotkin wrote in July 2019. “State and local regulations and fees that constrain housing supply, including measures … have blocked expansion of lower-density housing construction on the urban fringe,” he wrote.
But the housing costs are also being driven up by investors from Wall Street and overseas, but also by the federal and state pro-migration policies which are inflating the state’s population, and political hostility to cheap housing.
By 2017, for example, the government’s pro-migration policies had added 11 million people to the state’s native population of 29 million people. The huge inflow means that one-in-four residents are immigrants.
Many other coastal and immigration-inflated states also have high housing costs which spike their SPM poverty rates:
The 16 states for which the SPM rates were higher than the official poverty rates were California, Colorado, Connecticut, Delaware, Florida, Hawaii, Illinois, Maryland, Massachusetts, Nevada, New Hampshire, New Jersey, New York, Oregon, Texas, and Virginia.
States with less coastline, colder winters, and cheaper land, as well as fewer immigrants, tend to have lower SPM poverty rates. For example, only 7.9 percent of people in Wisconsin are poor, along with 8.3 percent in Utah, 8.2 percent in New Hampshire, 73 percent in Minnesota, and 6.8 percent in Iowa, according to the SPM study.
The 7.1 million poor Californians comprise one-in-six of the nation’s 42.6 million poor residents.
The cash-only measure shows that California’s 4.8 million cash-poor residents comprise one-in-eight of the nation’s 39 million cash-poor people.
California, however, has a slightly lower rate of SPM poverty than the District of Columbia, where the SPM poverty rate is 18.4 percent.
The Census Bureau explained the difference between the two poverty rates:
The official poverty measure, which has been in use since the 1960s, estimates poverty rates by looking at a family’s or an individual’s cash income. The new measure is a more complex statistic incorporating additional items such as tax payments and work expenses in its family resource estimates. Thresholds used in the new measure are derived from Consumer Expenditure Survey expenditure data on basic necessities (food, shelter, clothing and utilities) and are adjusted for geographic differences in the cost of housing.
Demand for housing is driven up by immigration, says a 2019 report by Harvard’s Joint Center for Housing Studies. “Immigrants are a major source of household growth and therefore of housing demand,” said the report, titled “The State of the Nation’s Housing 2o19.” The report continued:
Current projections call for the foreign-born population to drive an ever-larger share of household growth. If efforts to curtail immigration prevail, however, future housing demand will be much lower than projected …
…
even though about 30,000 more households moved out of California each year in 2010–2017 than moved in, in-migration still averaged 165,000 households annually. This made California third only to Florida and Texas in terms of gross household moves into the state.
Immigration impacts housing demands and costs, but it also affects Americans’ wages and salaries, say economists.
For example, Georgetown University professor Harry Holzer told Yahoo News immigration expands national economies but also lowers individuals’ wages and salaries:
This is probably the main reason that immigration generally is good for an overall economy … It increases the supply of workers in various fields, and often reduces the labor costs in those fields for two reasons. Number one … some immigrants are willing to work for less than their native-born counterparts. But also, it’s just extra supply, and an extra supply of workers reduces the costs.
If the immigrants weren’t there, the wages would likely be rising …. And that might be better for some of the native-born folks.
Middle class wages in progressive California have risen by one percent in the last 40 years, says a study by the establishment California Budget and Policy Center, Breitbart News reported September 3.
Accelerating automation may make the problem worse for lower-skilled Americans, Holder wrote in an August 2019 paper for the Migration Policy Institute:
More adaptable workers will likely reenroll in higher education and gain the requisite skills needed to land new (and perhaos better) jobs. But others will experience long periods of unemployment, and then either return to the labor market with lower earnings than before or withdraw from the market altogether.
California’s large scale use of H-1B visa-workers is also a problem for Californians. “Foreign workers on H-1B visas offer employers many advantages: they cannot typically quit the employer who hires them without losing their status, their opportunities in their home country often are substantially worse than these U.S. opportunities, and so forth,” according to Peter Cappelli, Wharton management professor and director of the school’s Center for Human Resources. He continued:
Wages do not rise to reflect the shortfall [of American workers], U.S. employees do not pursue these fields because of that, and employers then become completely dependent on H-1B workers to fill them. We have seen this play out in earlier periods where nurses and mid-level programming jobs were almost completely filled by foreign workers on these visas.
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