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Bernie Sanders Wants to End At-Will Employment, and That's a Truly Bad Idea That Would Increase Unemployment

December 8, 2019 in Economics

By Ryan Bourne

Ryan Bourne

Friday’s jobs report once again highlighted the strength of the US labor market. The unemployment rate hit a nearly 50-year low, with the total number of jobs added crushing expectations.

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Yet despite another strong indication that the US jobs market is an economic success story, Democratic presidential candidates continue to demand risky and radical plans to overhaul the way Americans work.

Chief among them is Sen. Bernie Sanders. The Vermont senator wants to introduce a slew of changes ranging from a ” jobs guarantee” to a hike of the federal minimum wage to $15 an hour.

But perhaps Sanders’ most eyebrow-raising labor market plan is the call to outlaw the American norm of “at-will employment.”

Despite US labor-market flexibility delivering much lower unemployment than more heavily regulated countries, Sanders thinks it’s time to move toward more onerous employment laws. Getting rid of at-will employment would not only make it much more difficult for inexperienced, young, and risky hires to find work, but it would also reduce wages and living standards.

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Sanders’ goal is laudable but the idea is misguided

Doing away with at-will employment means eliminating the presumption that employers should be able to fire workers at any time or for any reason, just as workers are free to walk away from a job if they choose.

Federal protections against termination already exist for discrimination against protected classes. And many states have additional safeguards for workers, such as laws that prevent companies from firing workers if it would breach implied promises to the employee or is a way to punish the employee for complying with public policies.

Yet Sanders’ plan goes much further. He wants a national “just cause” law, where the government would dictate what constitutes a fair layoff for personal or economic reasons, with the threat of court action and fines for employers found guilty of “unjust” dismissals.

His stated desire is laudable: improving job security for workers. But security isn’t free.

Making it costlier or riskier to fire people also makes it riskier …read more

Source: OP-EDS

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Wake Up, Business! You Could Be a Week Away from Socialist Disaster

December 5, 2019 in Economics

By Ryan Bourne

Ryan Bourne

Wading into election campaigns is fraught with danger for business people. “We are concerned by the direction of things, but won’t raise our head just to get it blown off,” an executive of a popular multinational explained to me this week.

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When even Bill Gates, a massive philanthropist, can be media-massacred for critiquing a US presidential candidate’s wealth tax plans, no business sees itself safe from the blowback of opposing populist Left-wing policies. Customer bases comprising all political persuasions make any electoral statement from individual companies highly risky.

No such excuses, however, can be made for organisations purporting to represent business interests, who have actively chosen to remain neutered. These groups have the licence to take the heat in defending members’ long-term economic interests. Yet in this campaign, the Institute of Directors (IoD), the Federation of Small Businesses (FSB), and the Confederation of British Industry (CBI) have been utterly supine in the face of Jeremy Corbyn’s socialist threat.

Here is a Labour Party wanting to confiscate shares in large companies, overhaul corporate governance, nationalise whole industries at prices set by politicians, impose rapid and destructive decarbonisation, reverse the Eighties’ trade union reforms and jack up all major taxes on capital.

Business groups, though, have reacted with unjustified political evenhandedness, passing up on highlighting the destructiveness of socialism to instead hang-wring about smaller policy gripes from both parties.

Consider the IoD. Last week, the organisation issued a robust defence of EU-style state aid laws. Conservative plans to change them to assist certain struggling industries and oblige public bodies to “Buy British” after Brexit were rightly savaged as a “retreat away from free and open markets … unfairly protecting and subsidising large incumbents at the expense of true competition”. Bravo! This was exactly what a defence of a competitive market economy should look like, although their head of trade’s claim that these mercantilist measures put her into “actual convulsions” seemed a tad over the top.

So what was their reaction to Labour’s more stringent calls for active industrial and regional planning, nationalisation for the purpose of cutting prices, and taking de facto government ownership stakes in large companies? Presumably, it sent them into apoplexy. Well, you wouldn’t know it from their media release, which read: “Taken as a whole, Labour’s measures on business risk being too much stick …read more

Source: OP-EDS

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American Soldiers Are Not Bodyguards for Saudi Royals

December 5, 2019 in Economics

By Doug Bandow

Doug Bandow

President Donald Trump believes in America First except when it comes to the Saudi royal family. Then it is Saudi Arabia first.

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At the end of November, U.S. military leaders were in Riyadh negotiating the employment terms for the royal’s new bodyguards. That is, the plan for an expanded American military presence in the Kingdom of Saudi Arabia (KSA), including Patriot missiles, Sentinel radars, a THAAD air defense system, fighter aircraft, and other equipment, as well as personnel, who will eventually number around 3,000.

Why is the president, who has loudly insisted that allies do more to defend themselves, even more determined to handle Saudi Arabia’s security?

Of course, the royals themselves want American backing. Having grabbed control of their people’s wealth, they long have hired others to do the hard, unpleasant, and dangerous work—including the U.S. military.

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The status-conscious KSA spends lavishly, especially on modern fighter jets. Last year Riyadh devoted $83 billion to the military. In 2017 defense expenditures ran $89 billion. That put the Kingdom in third place globally, after America and China. Alas, possession of fine equipment alone is not enough to ensure its good use.

In 2015 the Saudi regime attacked neighboring Yemen, one of the poorest nations on earth. De facto ruler Mohammed bin Salman, who became crown prince two years later, decided on war to reinstate a friendly ruler. Unfortunately, a campaign that was supposed to take a few weeks has lasted almost five years. Saudi pilots proved highly competent at slaughtering civilians, bombing weddings, funerals, hospitals, school buses, and markets. Humanitarian groups figure that three-quarters of the estimated 12,000 civilian deaths have resulted from air attacks—delivered by KSA aircraft provided, armed, guided, and, until recently, refueled by the U.S. The destruction of critical infrastructure has resulted in mass malnutrition and disease, which may have taken another 150,000 lives.

Nevertheless, the royals may prefer not to have a capable military, as it could threaten a system in which the few mulct the many. After all, who other than …read more

Source: OP-EDS

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NATO No Longer Serves American Interests

December 5, 2019 in Economics

By Doug Bandow

Doug Bandow

President Donald Trump returned early from the London NATO summit. Staged to satisfy British Prime Minister Boris Johnson—the official 70th-anniversary meeting was held in April—the latest gathering featured only one, mercifully short, session, to reduce the likelihood of a Trump eruption. Even so, before arriving he improbably chided French President Emmanuel Macron for being “nasty,” “insulting,” and “disrespectful” in suggesting that the alliance suffered from “brain death.” Then the session’s minimal substance was overshadowed by the president’s personal spat with Canadian Prime Minister Justin Trudeau.

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Of course, the assembled leaders filled their limited time together with happy talk. The greatest alliance ever is more necessary than ever as Europe faces the greatest security challenges ever. The Europeans are spending more and cutting Washington’s burden. NATO is preparing plans both to defend its members from conventional attacks and confront new threats. The Europeans even are ready to tackle the huge new challenge posed by increasingly aggressive China. All in all, the alliance is prospering greatly.

This is fantasy. A very pleasant one. But fantasy nonetheless.

NATO was formed in 1949 to shield European states from Soviet aggression as they recovered from World War II. The U.S. was only supposed to assist European governments in their defense efforts. For instance, Secretary of State Dean Acheson promised Congress that it would not need “to send substantial numbers of troops over there as a more or less permanent contribution.” Dwight D. Eisenhower, past wartime allied leader, first NATO commander, and future Cold War president opposed providing a permanent U.S. garrison which, he predicted, would “discourage the development of the necessary military strength Western European countries should provide themselves.”

Alas, these sentiments were ignored as the U.S.S.R. tightened its control over Central and Eastern Europe. The Europeans recovered economically but failed to increase their defense outlays accordingly. Washington maintained its dominant military presence while constantly urging its allies to do more. They routinely said yes but did little.

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After the Warsaw Pact and the Soviet Union …read more

Source: OP-EDS

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NATO’s Dirty Little Secret Is Out

December 4, 2019 in Economics

By Ted Galen Carpenter

Ted Galen Carpenter

Pro-NATO politicians and pundits never tire of citing polls and studies showing that a majority of Americans continue to support the Alliance. Frequently, that argument is presented as part of the larger case that President Trump’s periodic expressions of skepticism about NATO’s relevance are out-of-touch with the views of the American public. However, the pro-NATO case is built on a fundamental deception.

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Few (if any) surveys of U.S. public opinion about NATO even hint about the extent of the risks Americans incur because of Washington’s obligations under Article 5 of the North Atlantic Treaty, which commits the signatories to consider an attack on any member as an attack on all. A typical poll question will ask respondents whether the United States should defend country X, if Russia attacks that country. A more honest question would be whether the United States should defend country X from a Russian attack, even if doing so might result in a nuclear war with Russia that could kill millions of Americans.

Granted, such an outcome is a worst-case scenario, but Washington’s Article 5 obligations bring it into play. The escalation risk is especially relevant with respect to defending Estonia and the other Baltic republics. A 2016 RAND Corporation study concluded that it would be nearly impossible for NATO to defend its Baltic members against a full-scale Russian invasion for more than a few days without an extensive upgrade of the Alliance’s existing force deployment. Even after such an upgrade, the outcome of a struggle waged solely with conventional weapons would be uncertain. Escalation to the nuclear level would remain an ever-present danger.

Even without a robust “truth in advertising” requirement, U.S. public support for NATO is slipping. Mark Hannah, a senior fellow at the Eurasia Group Foundation, concedes that point following a survey his organization recently conducted. He notes: “For a second year in a row, when faced with a hypothetical scenario in which Russia invaded Estonia, a NATO ally, Americans were roughly split on whether they wanted the United States to respond militarily. And that was after respondents were reminded of Article 5, the part of the NATO treaty that obligates the United States to respond to such aggression, and after they were told that U.S. action could be the only way to expel Russia.”

In other words, even with wording designed to elicit …read more

Source: OP-EDS

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2020 Democrats Are School Choice Hypocrites

December 4, 2019 in Economics

By Corey A. DeAngelis, Tommy Schultz

Corey A. DeAngelis and Tommy Schultz

What’s good for the goose is good for the gander — unless you’re talking about the 2020 Democratic presidential candidates and education policy. The majority of the front-runners either attended private schools themselves or sent their own children to private schools, yet they’re fighting hard against programs that would grant similar options to the less fortunate.

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Here’s their latest school choice hypocrisy.

For starters, Sen. Elizabeth Warren recently released an education plan that is radically anti-choice. It would ban many high-quality charter schools, end federal funding of charter schools, and make it even more difficult to open new charters. She also calls to end private school choice programs — programs that overwhelmingly serve low-income families.

But about a month ago, one of us uncovered that Warren sent her son, Alex, to expensive private schools starting in fifth grade when she was teaching at the University of Texas at Austin. Then, cellphone footage shows the senator lied about it to an African American woman, moments after giving a speech about the rights of black women, before her campaign finally admitted Warren’s son attended private school.

Other Democratic candidates have also come out swinging against school choice. Sen. Bernie Sanders called for a moratorium on the expansion of charter schools, Mayor Pete Buttigieg denounced for-profit charter schools and is against vouchers because “they take away funding from public schools,” and Sen. Kamala Harris, who just dropped out of the race, said she’s “particularly concerned with expansions of for-profit charter schools” and said “our country needs an administration that supports public education, not privatization.”

But our new discoveries suggest these candidates are just as hypocritical as Warren.

It’s well-known that Mayor Pete Buttigieg exclusively attended private schools and that his husband, Chasten Buttigieg, taught at the private Montessori Academy in Indiana. What isn’t well-known is that Chasten’s Montessori school accepts students who use the state’s tax credit scholarship program. Unfortunately, Buttigieg opposes private school choice programs that provide disadvantaged children with financial resources to attend his husband’s private Montessori school.

To top it all off, although Sen. Bernie Sanders’ campaign did not respond to requests about where his four children went to school, his wife, Jane O’Meara Sanders, attended a Catholic private school in Brooklyn.

Even though she’s not campaigning anymore, Harris could run for president again in …read more

Source: OP-EDS

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Don't Fuel China's Paranoia in Hong Kong

December 2, 2019 in Economics

By Doug Bandow

Doug Bandow

The denizens of Zhongnanhai have never understood democracy. In the People’s Republic of China, people are expected to do and believe what they are told. Few disobey, especially under Xi Jinping, who has moved Chinese society back toward Maoist totalitarianism.

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Dictating to others does not work overseas, however. In 1996 Beijing’s leaders attempted to use missile tests to intimidate Taiwanese voters, who instead increased their support for Lee Teng-hui’s reelection.

In recent days the Xi government insisted that the Hong Kong authorities crackdown on democracy demonstrators and expected support from the special administrative region’s “silent majority.” Instead, the recent local election resulted in a popular tsunami against the PRC’s tightening noose. Even areas considered to be pro-China chose young freedom activists to dominate local councils.

Beijing was uncharacteristically stunned into silence. Eventually, the regime fell back on blaming America for manipulating public sentiment. As if pontificating diplomats convinced thousands of young Hong Kongers to create chaos on the streets and fortify universities against the unpopular, unrepresentative SAR government.

Such dedication comes from inside the person. In fact, despite having radically different perspectives, Mao Zedong and other early revolutionary leaders probably would have understood Hong Kong’s protestors. Why did the former sacrifice everything to make a revolution? Not because a Soviet diplomat urged them to do so.

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In contrast, the current Chinese Communist Party is dominated by ambitious, self-serving careerists. Membership long has been viewed as an important if not the most important means to rise and prosper. Xi took on the pervasive corruption which had dragged down the CCP’s reputation, but conveniently targeted political opponents. He may truly believe that the Chinese people are best served by reviving the party’s brutal authority, but much of his support undoubtedly comes from those who just want to be on the winning side. If he stumbled, many now serving him would effortlessly shift their allegiance elsewhere.

Which helps account for Beijing’s apparent surprise at the electoral wipe-out. PRC officials can’t imagine such outrageous …read more

Source: OP-EDS

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Elizabeth Warren's School Choice Blunder

December 2, 2019 in Economics

By Corey A. DeAngelis

Corey A. DeAngelis

Elizabeth Warren came out swinging against school choice when she released her education plan on October 21. The Massachusetts senator and Democratic presidential candidate called for ending federal funding for public charter schools, banning for-profit charter schools, increasing regulations for all charter schools, and making it more difficult to start new charter schools. She also said she wanted to stop private school choice programs.

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Warren then started tweeting that she was “#PublicSchoolProud” and that “we must stop the privatization of public schools.” She also bragged about how she attended and taught at public schools.

But the senator remained silent about where she sent her children to school. She’d been silent on the subject for a while, in fact, having failed to respond when Education Week asked where her children went to school. If Warren was so loud and proud about public schools, wouldn’t she be more than happy to tell everyone that she sent her two kids, Alex and Amelia, to public schools? Of course she would.

Unless, that is, she had the privilege to send her own kids to private schools while fighting against extending similar options to the less fortunate.

On October 28, using ancestry.com, I discovered a 1987 fifth grade yearbook photo of “Alex Warren” at Kirby Hall School, an expensive private institution. The school’s current tuition is $17,875, and it is located about half a mile from the University of Texas at Austin, where Warren was teaching at the time. The student’s year of birth—1976—matched Elizabeth Warren’s son’s. 

A few weeks after my discovery, Elizabeth Warren gave a speech in Atlanta about the rights of black women. The November 21 rally was interrupted by a group of black protesters from the Powerful Parent Network, a pro-school choice group that opposes Warren’s anti-choice education plan. 

After the rally, Warren tried to do the right thing by talking with the protesters. One of the parents, Sunny Thomas, recorded the 17-minute conversation and posted it on Facebook for the world to see. Warren probably regrets two things she said in that recording.

First, she accidentally made a good case against the idea that you can fix education by throwing more money at it, saying: “I told all of my folks back in Massachusetts, ‘You’re going to get an 85 percent raise’ …read more

Source: OP-EDS

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New York City Is a Hot Spot for Illegal Medicaid Enrollment

November 30, 2019 in Economics

By Brian Blase, Aaron Yelowitz

Brian Blase and Aaron Yelowitz

New York state is grappling with a Medicaid shortfall in the billions of dollars. And one of the main reasons is improper enrollment.

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Using annual information from the Census Bureau to assess the demographic make-up of Medicaid enrollees over time, researcher Aaron Yelowitz and I estimated that 2.3 million to 3.3 million Medicaid enrollees nationally make an income in excess of what is allowed.

This is of increasing importance given that ObamaCare massively expanded what was historically a welfare program for vulnerable populations like the disabled and low-income children and pregnant women — and tens of billions of taxpayer dollars are at stake.

Excluding traditional pathways onto Medicaid (such as through disability or pregnancy), Yelowitz and I concluded that the number of working-age New York state residents on Medicaid who have incomes above the eligibility threshold rose by more than 80 percent between 2012 and 2017. We estimated that between 337,000 and 433,000 working-age New York state residents with income above the allowed limit are improperly enrolled in Medicaid.

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And nearly half of this improper enrollment is in New York City, with 30 percent in The Bronx and Queens, where a few neighborhoods have among the highest percentage of improper enrollees of anywhere in the country.

In The Bronx, particularly the Concourse, Highbridge and Mount Eden regions, we found that roughly 40 percent of all working-age adults with incomes exceeding income eligibility thresholds were enrolled in Medicaid in 2017. The next-worst area is in Queens — the Elmhurst/South Corona, Jackson Heights/North Corona and Sunnyside/Woodside regions. In those areas, there are likely tens of thousands of ineligible Medicaid enrollees.

ObamaCare deserves much of the blame for the surge in improper enrollment. It created a new category of Medicaid recipients — lower-income, able-bodied, working-age adults — with the federal government paying a much larger share of their expenses than for traditional enrollees.

From 2013 — the year before ObamaCare’s Medicaid …read more

Source: OP-EDS

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Tulsi Gabbard: Wake up and Smell Our $6.4 Trillion Wars

November 29, 2019 in Economics

By Doug Bandow

Doug Bandow

The Democratic establishment is increasingly irritated. Representative Tulsi Gabbard, long-shot candidate for president, is attacking her own party for promoting the “deeply destructive” policy of “regime change wars.” Gabbard has even called Hillary Clinton “the queen of warmongers, embodiment of corruption, and personification of the rot that has sickened the Democratic Party.”

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Senator Chris Murphy complained: “It’s a little hard to figure out what itch she’s trying to scratch in the Democratic Party right now.” Some conservatives seem equally confused. The Washington Examiner’s Eddie Scarry asked: “where is Tulsi distinguishing herself when it really matters?”

The answer is that foreign policy “really matters.” Gabbard recognizes that George W. Bush is not the only simpleton warmonger who’s plunged the nation into conflict, causing enormous harm. In the last Democratic presidential debate, she explained that the issue was “personal to me” since she’d “served in a medical unit where every single day, I saw the terribly high, human costs of war.” Compare her perspective to that of the ivory tower warriors of Right and Left, ever ready to send others off to fight not so grand crusades.

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The best estimate of the costs of the post-9/11 wars comes from the Watson Institute for International and Public Affairs at Brown University. The Institute says that $6.4 trillion will be spent through 2020. They estimate that our wars have killed 801,000 directly and resulted in a multiple of that number dead indirectly. More than 335,000 civilians have died—and that’s an extremely conservative guess. Some 21 million people have been forced from their homes. Yet the terrorism risk has only grown, with the U.S. military involved in counter-terrorism in 80 nations.

Obviously, without American involvement there would still be conflicts. Some counter-terrorism activities would be necessary even if the U.S. was not constantly swatting geopolitical wasps’ nests. Nevertheless, it was Washington that started or joined these unnecessary wars (e.g., Iraq, Libya, Syria, and Yemen) and expanded necessary wars well beyond their legitimate purposes (Afghanistan). As a result, American policymakers bear …read more

Source: OP-EDS