Daily Archives: July 23, 2021

The rights muted response to Bidens orders underscores the remarkable ideological shift thats occurring in Washington, D.C. A Republican Party once closely allied with corporate America finds itself increasingly less so in the Donald Trump era. Indeed, in the aftermath of Bidens orders, even officials in Trumps orbit were saying the politics were smart.

Both [Biden and Trump] have elements in their constituencies that want this, and, by the way, theyre on solid ground with the rest of America, said a Trump adviser. America has a love-hate relationship with these companies.

But, so far, much of the GOPs newfound economic populism has been delivered in words rather than action. And thats given Democrats space to pursue an agenda that, even just five years ago, likely would have sparked massive blowback.

People will understand who's on their side and who's not, said Cedric Richmond, a senior White House adviser and director of the Office of Public Engagement. There will be Democrats who are on the side of working families, and not Republicans. For them, I think it's a terrible mistake.

The executive order Biden issued earlier this month included 72 initiatives in all. Among the most consequential were his moves calling for greater scrutiny of tech acquisitions, bolstering competition for generic drug makers and importers from Canada, allowing hearing aids to be sold over the counter, standardizing plans for health care shoppers trying to compare insurance options, and protecting certain meat-packing workers from what are seen as artificially low wages.

It was another prong in what economic observers view as an increasingly populist White House agenda. Earlier, Biden had stated his commitment to waiving intellectual property rights for Covid-19 vaccines and nominated Amazon critic and anti-monopoly advocate Lina Khan to chair the Federal Trade Commission.

Some of Bidens actions came on issues that already had Republican support, including the effort to bring down the price of hearing aids, discouraging agricultural consolidation and limiting so-called noncompete agreements that harm U.S. workers, among others. Twenty-one Republicans backed Khans nomination.

The cross-partisan appeal around anti-monopoly policies traces back even further. During the 2016 election, Trump ran on promises to combat big mergers and take on massive corporations that he said posed a huge antitrust problem. Following Trumps loss, Sen. Josh Hawley (R-Mo.) and Rep. Ken Buck (R-Colo.) have called for sweeping antitrust reform in Congress that at times echoes Democratic efforts. Fox News Tucker Carlson, one of the most influential voices to the right, cheered the choice of Khan to lead the FTC.

Sen. Josh Hawley (R-Mo.), pictured, and Rep. Ken Buck (R-Colo.) have called for sweeping antitrust reform. | Amanda Andrade-Rhoades/AP Photo

Theres an increased recognition that concentration across all corporate sectors is really stifling the economy and hurting people, said David Segal, executive director of digital rights group Demand Progress and co-chair of the Freedom from Facebook and Google coalition. In some cases its an actual recognition of that and in others theres a recognition at least of the political salience of the issue.

Instead of going after Biden for targeting big businesses, Republicans have focused on Covid-related policies and spending, immigration and fears of inflation. Meanwhile, party activists and much of the conservative media ecosystem are prioritizing cultural war issues, from conspiracies about Dr. Seuss works being prohibited to the teaching of critical race theory in schools.

Celinda Lake, one of Bidens lead campaign pollsters, called it a departure from Trump, who engaged repeatedly in cultural warfare but also weaved in economic populist threads. They seem to be only doing one right now. And that's surprising and its ceding a lot of terrain to us, Lake said.

The White House has been pleased with the open field theyve been given to chart a more populist path. In strategy calls with allied groups, administration officials have pointed to polling showing strong support for taxing the wealthy, while Lake said survey data shes reviewed found high popularity across the ideological spectrum for breaking up Big Tech and making companies like Amazon pay more in taxes.

I think [Republicans] are worried about getting on the wrong side of some of that, she said of the GOP elected officials who largely didnt cheer Bidens actions, but didnt criticize them either.

Segal, a former state lawmaker from Rhode Island, said the Biden administration reflects a more modern Democratic Party one animated by liberal figures like Sens. Elizabeth Warren (D-Mass.) and Bernie Sanders (I-Vt.) and more willing to embrace antitrust issues. Biden at several points has called out Amazon and Facebook, telling a TV reporter Friday that the social media giant is killing people by failing to police its users trafficking in vaccine disinformation.

Biden himself has moved. He's brought in some people who are progressive and very concerned and willing to use public power to regulate industries for the betterment of society, Segal said. And there are certain other people who might have been more corporatist in their leanings, a couple of decades ago, who seem to have shifted in their thinking about these issues, at least in some cases.

Biden said Friday that Facebook is killing people by failing to police its users trafficking in vaccine disinformation. | AP Photo/Matt Rourke

James Sherk, director of the Center for American Freedom at the America First Policy Institute, a policy nonprofit led by Trump White House officials, said there is agreement among the right and left on antitrust issues. But he argued that the agreement was limited.

I think there is a growing recognition on the right that some of these concentrated corporate powers can be a problem and its been used to drive a political agenda that folks on the right disagree firmly with, he said. I think that tech platforms de-platforming Trump was a watershed moment for people on the right.

Democrats though, he added, are quite happy with tech platforms playing ideological censor and policing discourse and taking down what they term misinformation.

Sherk predicted that instead of trying to work with the Biden administration, conservatives, including his group, would focus on changes at the state level instead. One recent example was legislation by Florida Gov. Ron DeSantis that would fine social media companies if they censored political candidates and other users. A federal judge in Florida issued a preliminary injunction against the law, which would have gone into effect at the beginning of July, citing the First Amendment and Section 230 laws.

Others in Trumps orbit concede that there is symmetry between the last administration and the current one on anti-monopoly issues. And they fear that the overlap may actually create a coalition for federal policy to be put in place.

Its really amazing, we have something Biden and Trump agree on, they want to go after big tech companies, said Stephen Moore, who was an economic adviser to Trump. Its a dangerous time because we have the Josh Hawleys of the world linking forces with the Elizabeth Warrens of the world, and its really troubling to me as a free market guy.

While elected Republicans have been relatively quiet about Bidens orders taking aim at corporate power, business groups have not. Neil Bradley, of the U.S. Chamber of Commerce, contended that the action smacks of a government knows best approach to managing the economy, while the Business Roundtables Josh Bolten added it could undermine rather than enhance U.S. competitiveness.

But the Chamber carries far less weight with Republicans than it has in the past, owing to its decision during the past election to back several Democratic candidates and its repeated breaks with Trump on issues like tariffs and immigration. And unlike during the Obama years when the Chambers opposition to legislative initiatives caused deep alarm inside the administration the Biden White House has shown no hesitancy around its anti-monopoly platform.

Instead, White House officials have proactively argued that new business formation has slowed considerably over the last four-plus decades because of corporate concentration of power. And in interviews, Bidens economic advisers and liaisons to corporate America framed the effort as needed to increase competition.

The pandemic has demonstrated how important it is to have a competent government that is looking out for people's best interest, Ramamurti said. And I think as a result, has opened the door to other types of competent targeted actions that are intended to improve people's lives.

Richmond said he wasnt surprised by the relatively staid pushback from the right. The administration is in frequent touch with major CEOs, business leaders and industry associations, and Biden himself telegraphed the trajectory of where he was headed during the campaign and in the White House.

Kitchen table issues are issues you win elections on, Richmond said. We have a robust economy coming back. I think those are the things that people will sit around the table and recognize.

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Its ceding a lot of terrain to us: Biden goes populist with little pushback - POLITICO

Marvel Studios superhero spy thriller Black Widow opened last weekend to the tune of $215 million in global revenue. Those earnings come partly due to the films dual release in theaters and on Disney+ the same day. Disney boasted that the $30 upcharge raked in $60 million, with domestic theatrical screenings clearing $80 million.

While the release initially appears to be a success, a closer look at variables like box office dropoff and multi-person viewing at home amounted to a muddled narrative. Further confounding the data is the pandemic, which makes it difficult to know how many viewers opted to stay home rather than go to the theater, and vice versa. With these different factors, its unclear what long-term effect(s) the dual theater-PVOD model has on the film industry.

On the TV side, nominees for the 2021 Emmy Awards were announced on Tuesday. The confusing and far-flung list of nods has left many scratching their heads, with only 12 shows receiving more than single-digit nominations. Prestige shows, like HBOs Mare of Easttown and Netflixs The Queens Gambit, received a fair share of recognition, but so did less typical popcorn fare like Netflixs Emily in Paris and Disney+s The Mandalorian, which earned 24 nominations, including Best Drama. Meanwhile, critical favorites like Showtimes The Good Lord Bird were snubbed.

The shake-up is partly due to a newly democratized Emmys voting system, allowing all Television Academy members to cast their ballots for an unlimited number of nominees in a broader range of categories. As a result, a slew of major and minor cast members from shows like Netflixs The Crown and the filmed version of Broadways Hamilton on HBO have crowded the major acting categories.

These nomination trends may indicate that Academy members are watching the same cluster of heavily-advertised shows that have received more media attention, rather than branching out to shows and actors that could greatly benefit from nominations.

The recent trend towards populist voting has sparked a movement over the past few years to try to streamline the system and get voter committees to commit to watching a certain number of shows towards a more representative breadth of nominees. This years nominees may finally push the Academy in that direction.

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The confusing success of 'Black Widow' and the populism of the Emmys - KCRW

WhatsApp founders Brian Acton and Jan Koum make a good case study. They launched a product that 2.5bn people use to freely communicate worldwide, generating $5bn (3.6bn) to $10bn in annual revenue. The pair pocketed $15bn upon selling to Facebook. Did they deserve it? Its an unimaginable sum, but as Nobel Prize winning economist William Nordhaus has explained, transformative innovators like this are only capturing a tiny slither of the total productive value to customers.

Investors clearly think top CEOs matter a lot too. With technology and tastes changing quickly, firms prospects can hinge on a few decisions over whether to adopt risky new products or overhaul corporate practice. Observe the diverging fortunes of BlackBerry and Apple.

When CEOs resign, get poached, or die, in fact, companies valuations shift in pronounced ways, suggestive of executives potential multiplicative impacts on businesses profitability. In 2013, Burberry CEO Angela Ahrendts left to join Apple, having overseen Burberrys market valuation growing from 2bn to 7bn. Burberrys share price fell 7pc.

It stands to reason that failure to compensate existing executives sufficiently harms value too. In 2019, Namal Nawana, then CEO of UK medical devices firm Smith and Nephew, resigned, saying his 1m plus base salary wasnt enough. Under him, the companys value had grown so much that even if his personal impact was just 1pc of it, the uplift was 10 times his base pay. His resignation wiped off 1.4bn in value.

These instances dont reflect random stock volatility either. When CEOs experience unexpected family deaths distracting them from their jobs, stock prices shift.

Those with skin in the game then think founders and CEOs make a substantive difference to companies fortunes, even if the Left-wing populist doesnt.

So what would abolishing billionaires achieve? The risks are clear: though not everyone is money-driven, confiscation will disincentivise at least some of the socially productive activity driving high wealth.

With so much of billionaires current wealth locked in businesses (just 2pc is in private property, such as houses and yachts), high-net wealth taxes would force firm sales, encourage more consumption, and incentivise billionaires to give more to tax-exempt, often political, causes. Why is this economically more desirable than reinvestment in productive business assets?

And for what public revenue gain? Confiscating all but a billion each from the top 10 British billionaires would have funded 2020 UK government spending for one and a half months. A more realistic annual wealth tax would be shot with exemptions to avoid harming asset rich, cash poor farmers and other essential businesses.

Wealth taxes were scrapped in most of Europe, in fact, as they became symbolic gestures, raising, on average, just 0.2pc of GDP, as millionaires and billionaires fled and carve-outs piled up. What would that sum pay for? The royal yacht and a few infrastructure projects?

The Lefts anti-wealth populism sells the public a pig in a poke. Economists have previously calculated that 83pc of the global Forbes billionaire list made money from productive activities, not political connections. Talk of abolishing billionaires runs aground on the historical experience of taxing wealth, let alone the implications of much cruder, blanket confiscation of resources.

Ryan Bourne is the author of Economics In One Virus and an economist at the Cato Institute

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The Left is on another planet if it thinks a billionaire tax will work - Telegraph.co.uk

Jul 24th 2021

RONALD REAGANs tub-thumper for Barry Goldwater in 1964, Barack Obamas silky-smooth Democratic Convention speech of 2004: the political annals are replete with moments when a significant new talent announced itself. Could it be that in February Ron DeSantis of Florida produced another? The scene was a press conference in Tallahassee. The subject under discussion was the Republican governors view that conservatives are discriminated against by social and mainstream media companies. Dont say it isnt so, he told the assembled reporters: You can whiz on my leg, but dont tell me its raining.

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Mr DeSantiss phrase, now available on a range of conservative merchandise, expressed the dominant Republican view of big tech and the media: both knowing and dismissive. And he was able to utter it with rare authority. Mr DeSantis, who is second only to Donald Trump in popularity among Republicans, owes his rise not only to his record of sticking it to the liberal media but also, more impressively, to his knack of being vindicated almost whenever he has done so.

Having entered the Republican gubernatorial primary as a little-known House member, he launched a campaign so sycophantically pro-Trump that he became a figure of fun for the national media. He proceeded to win the former presidents endorsement and the primary. That put him in a fight against Andrew Gillum which the polls gave him little chance of winning, especially after he was accused of making a racist dig at his black opponent. He denied the charge and won that one, too. Whereupon, instead of becoming the divisive, ineffective governor he was predicted to be (including by some of his former congressional colleagues), he swung amenably to the centre. He raised teachers salaries, launched an effort to protect the Everglades, took a relaxed view of medical marijuanaand watched his ratings climb. When covid-19 struck last year, Mr DeSantis was one of the most popular governors in the country, an impressive feat in one of Americas most polarised states.

His management of the pandemic has since cost him much of his non-Republican support. Defying the public-health experts in his own administration, he refused to introduce a state-wide mask mandate and, after an initial month-long lockdown, pushed for Floridas businesses and schools to get back to normal even as the virus raged through the state. Retreating into a kitchen cabinet dominated by his chief-of-staff and his wife, Casey DeSantis, a popular former television journalist who oozes the charisma that the bullocking governor lacks, he was said to have shunned the experts entirely. He was widely criticised (including in this column). Yet it must be acknowledged that, again bucking his critics, he got most of the big calls right.

He did a better job of protecting care-homes than several of his media-beloved Democratic counterparts, including Andrew Cuomo of New York. He was dead right on schools. The mask mandates imposed by Floridas local authorities largely compensated for his own reticence on the issue. No doubt Floridas outdoors lifestyle helped, too. Yet the net result is a death toll that puts the state in the middle of the national pack and, after the haranguing Mr DeSantis received, this has been interpreted on the right as his greatest, media-crushing vindication yet. Its cocaine to the base, says a grudging Republican admirer of the governor. In the event that Mr Trump does not run for re-election in 2024, 40% of Republicans say they would pick Mr DeSantis instead.

This has got conservative donors excited. Many loathe Mr Trump but fear that their preferred alternativesincluding Mike Pence, Nikki Haley or just about anyonecould not retain the former presidents diehard followers. Mr DeSantis, whose presidential ambition is no secret, is the first alternative to hint that he could. His name is being cheered raucously at right-wing populist gatherings even as Mr Pences is jeered and the politically discombobulated Ms Haley goes unmentioned. Ifas that and much else suggestsconservatives are still committed to Trump-style populism, Republican elites are beginning to hope that Mr DeSantis might be the man to smooth its rougher edges.

That at least seems plausible. His string of unheralded successes suggests he is an astute politician. He is plainly intelligent. Most of the rights faux populists (a group that also includes Tom Cotton, Ted Cruz, Josh Hawley and the debutant J.D. Vance) are alumni of Harvard or Yale; Mr DeSantis has degrees from both. Admiring former acolytes of the governor (a small bandhe has a reputation for being beastly to his staff) say he made his decisions on the pandemic after immersing himself in public-health policy, as well as politics. He would surely be better than Mr Trump.

That is setting the bar pretty low, however. And the beguiling idea of Mr DeSantis as a shy pragmatist and secret wonk could also soon seem out-of-date. An anti-government wrecker in the House, turned Trump populist, turned moderate governor, whose re-election campaign is now hawking Dont Fauci my Florida mugs, the governor appears to have no firm convictions of any kind. This makes it hard to imagine him channelling the wild enthusiasms of Mr Trumps supporters in a productive way.

Indeed, the closer he gets to national power, the more he is pandering to them. He has in recent months engineered a series of dire state laws, including bans on mask mandates, vaccine passports, critical race theory, the right of social media companies to suspend politicians and certain kinds of political protest. It remains to be seen how many of these measures will survive legal scrutiny. But even if none does, they constitute the record he wants to run on. The governor is an able politician and so far a winning one. But his rise does not augur an improved version of Trump populism so much as its triumph.

This article appeared in the United States section of the print edition under the headline "The rise of Ron DeSantis"

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Lexington The rise of Ron DeSantis - The Economist

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The Biden administration made its case on Wednesday for why multinational corporations should support an international tax agreement aimed at cracking down on tax shelters, with a top official arguing that the deal would restore order to globalization and blunt the forces of protectionism and populism that have posed a threat to business in recent years.

The comments, by Itai Grinberg, a Treasury Department official who is representing the United States in the negotiations, offered a new rationale for the agreement, which would entail the largest overhaul of the international tax system in decades. If enacted, the deal would usher in a global minimum tax of at least 15% and allow countries to impose new taxes on the goods and services of the largest and most profitable corporations regardless of where the companies are based.

But the Biden administration sees the agreement as more than an end to the race to the bottom on corporate taxes that has been a boon to tax havens.

We believe this deal is part and parcel of restoring the foundation for the continued success of the liberal international economic order as we have known it over the last 75 years, Grinberg, the Treasurys deputy assistant secretary for multilateral tax, told the National Association for Business Economics.

The Biden administration has been pushing for the agreement as part of its plan to raise taxes on companies in the United States without making them less competitive around the world and to get dozens of countries to drop new digital services taxes that have targeted American technology companies. More than 130 countries have signed on to a framework of the deal, which is being negotiated through the Organization for Economic Cooperation and Development.

Although large companies have been anxious about the prospect of higher taxes, Grinberg argued that they had more to gain from a tax agreement. He suggested that a lack of clarity and consensus in the international tax system was leading to greater double taxation that, if left unchecked, could cause corporations to pull back cross-border investment.

The effect of those diminished transactions would spread well beyond big companies and their shareholders, because the activity of multinationals is the backbone of the success of globalization, Grinberg said. And none of that would be good, because although it certainly has its flaws, globalization has brought benefits not just for multinational corporations but for people in the United States and around the world.

The Biden administration has argued that its international tax proposals would bring more fairness to the United States and to economies around the world. They would do so, it says, by putting an end to a system that allows corporations to pay less tax than middle-class workers and by giving nations more tax revenue that they could spend on infrastructure and other public goods. Grinberg said this would be in the interest of corporations, arguing that the sense of unfairness was creating a landscape that is problematic for global businesses.

Could globally engaged multinational business succeed if economic populism, protectionism and anti-immigrant sentiment were to become the order of the political day? he said.

Much remains to be done between now and October, when international negotiators hope to complete the pact. Ireland, Estonia and Hungary have yet to join the agreement, and their resistance could block the European Union from moving ahead with the plan.

This article originally appeared in The New York Times.

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Treasury official: Tax deal would help make globalization work - Finance and Commerce

There has been an avalanche of recent books about the degrading of democracy, the whys and now-whats of this backslide. Is democracy really facing an existential crisis? What is democracy anyway, and is there any firm framework to judge its crisis that is not partisan?

Indeed, there is. Democracy Rules by political philosopher Jan-Werner Mller is a primer on the first principles of democracy. He proposes a hard border for democratic conflict it cannot compromise the equal standing of all citizens, it cant say that some people are second-class citizens or cannot participate in the national community. By this definition, democracy can accommodate all kinds of disagreement and polarisation and friction, but not the deliberate othering or disenfranchising of any group.

Unlike those who believe the sky is falling on our heads, Mller doesnt think we are on the brink of fascism while authoritarian populism in Brazil, Hungary, Poland and the US has threatened democracy, he says that the mass mobilisation and militarisation of 1930s is absent now. Indeed, all these governments invoke democracy frequently.

But its easy to spot fake democrats populist leaders who claim to speak for the real people or the silent majority, implicitly saying that those who do not support them are not real people and are beyond the pale of consideration. While all parties speak to their own supporters, a base that they forge through their rhetoric and platforms, populists seek to comprehensively cast out certain groups from membership.

There are family resemblances in their style of governance nationalism (with racist or religious or ethnic overtones), the hijacking of the state for partisan loyalists, and weaponising the economy to secure power.

With a propensity for crony capitalism, they need to keep a grip on the judiciary and political system, he writes. In Hungary, for instance, Viktor Orbn promised German automobile makers Chinese conditions with pliant unions, he changed civil service law claiming that liberal left had occupied the levers of the state and had to be purged, he moved in to control courts and media. They also often simulate sovereignty, with a studied performance of collective self-assertion.

Liberals who deplore this tend to place the blame on the masses, suggestible and swayed by demagogues. In fact, no authoritarian populist has come to power without elite collaboration, says Mller. But rather than blaming the masses as liberals tend to do or the powerful few as others tend to do, we need institutional answers.

The critical infrastructure of democracy since the 19th century, says Mller, are political parties and the media. They should not be instrumentalised by other forces, they must remain open arenas for arguments and contests. Both these intermediaries the media and political parties are now troubled, he acknowledges, and suggests ways to renew their missions.

At the core, says Mller, it is institutionalised uncertainty. An election is not the sole and final word; it reveals the balance of political forces at a given time. A democratic opposition takes on the government without delegitimising the system, the government recognises the role of the opposition, knowing that their positions can be flipped. A leader cannot use force or the tax system to destroy the opposition; election losers gracefully accept defeat, knowing that it is limited and temporary. This uncertainty is crucial, says Mller. Whatever it is, democracy can never be predictable.

Views expressed above are the author's own.

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Uncertainty is vital to democracies: Authoritarians want predictability, and flourish in it - The Times of India Blog