Potatoes and Science

BANGOR, Maine (AP) — University of Maine researchers are trying to produce potatoes that can better withstand warming temperatures as the climate changes. Warming temperatures and an extended growing season can lead to quality problems and disease, Gregory Porter, a professor of crop ecology and management, told the Bangor Daily News. “The predictions for climate change are heavier rainfall events, and potatoes don’t tolerate flooding or wet conditions for long without having other quality problems,” Porter said. “If we want potatoes to be continued to be produced successfully in Maine, we need to be able to produce varieties that can be resistant to change.” Around the world, research aimed at mitigating crop damage is underway. A NASA study published this month suggested climate change may affect the production of corn and wheat, with corn yields projected to decline while wheat could see potential growth, as soon as 2030 under a high greenhouse gas emissions scenario. ADVERTISEMENT Maine is coming off of a banner potato crop thanks in part to the success of the Caribou russet, which was developed by UMaine researchers. But Porter fears that even that variety isn’t as heat tolerant as necessary to resist the future effects of climate change. Pests are another factor. The Colorado potato beetle and disease-spreading aphids have flourished with the changing climate, said Jim Dill, pest management specialist at the University of Maine Cooperative Extension. Breeding seemingly small changes like hairier leaves that make it difficult for insects to move around on the plant can cut down on pests’ destruction and also the need for pesticides, he said. Breeding such characteristics into potatoes is a long process of cross-pollinating different potato varieties. The process is well underway. They’re in a research testing phase right now at sites throughout the United States. Test potatoes in Virginia, North Carolina and Florida are testing high temperature stress. “It takes 10 years of selection after that initial cross pollination, and it might take two to five years before enough commercial evaluation has taken place to release a new potato variety,” Porter said. This story has been corrected to show that the NASA study suggests wheat production could grow, while corn yields could decline, under a high greenhouse gas emissions scenario. ___ Follow AP’s climate coverage at https://apnews.com/hub/climate

Medicare premium increase is not due to inflation, despite Fla. senator’s claim

As Republicans seek to take back control of Contress, a key voting bloc will be older Americans, and the GOP aims to illustrate how much worse life has grown for them under the Biden administration. Sen. Rick Scott, R-Fla., shown speaking during a Senate hearing in February, claims inflation is to blame for Medicare premium increases. That's just wrong, experts say. Sen. Rick Scott, R-Fla., shown speaking during a Senate hearing in February, claims inflation is to blame for Medicare premium increases. That's just wrong, experts say.ERIN SCOTT/Pool / MCT by Phil Galewitz, Kaiser Health News/Politifact Published Nov 27, 2021 An increase in Medicare Part B premiums means “America’s Seniors Are Paying the Price for Biden’s Inflation Crisis” — The headline of a press release from Sen. Rick Scott (R., Fla.) Republicans blame President Joe Biden for this year’s historic surge in inflation, reflected in higher prices for almost everything — from cars and gas to food and housing. They see last month’s 6.2% annual inflation rate — the highest in decades and mostly driven by an increase in consumer spending and supply issues related to the COVID-19 pandemic — as a ticket to taking back control of Congress in next year’s midterm elections. A key voting bloc will be older Americans, and the GOP aims to illustrate how much worse life has grown for them under the Biden administration. Advertisement Sen. Rick Scott (R., Fla.) issued a press release Nov. 16 suggesting that rising general inflation was behind the large increase in next year’s standard premiums for Medicare Part B, which covers physician and some drug costs and other outpatient services. Headlined “Sen. Rick Scott: America’s Seniors Are Paying the Price for Biden’s Inflation Crisis,” the press release from Scott says he is “slamming Biden’s inaction to address the inflation crisis he and Washington Democrats have created with reckless spending and socialist policies, which is expected to cause significant price increases on [senior] citizens and Medicare recipients.” Was the climbing annual inflation rate over the past several months to blame for the increase in Medicare Part B premiums? We reached out to Scott’s office for more detail but received no reply. Upon further investigation, we found there is little, if any, connection between general inflation in the past few months and the increase in Medicare Part B premiums. What’s the status of Medicare premiums? Medicare Part B premiums have been growing steadily for decades to keep up with rising health spending. The U.S. inflation rate, for years held at bay, has been above 4% since April, hitting 6.2% in October, the highest rate in decades. Advertisement On Nov. 12, the Centers for Medicare & Medicaid Services announced that the standard monthly premium for Medicare Part B would rise to $170.10 in 2022, from $148.50 this year. The 14.5% increase is the largest one-year increase in the program’s history. Scott’s press release refers to the CMS report. CMS cited three main factors for the increase: rising health care costs, a move by Congress last year that held the premium increase to just $3 a month because of the pandemic, and the need to raise money for a possible unprecedented surge in drug costs. Inflation was not on that list. In fact, half of the premium increase was due to making sure the program was ready in case Medicare next year decides to start covering Aduhelm, a new Alzheimer’s drug priced at $56,000 per year, per patient. It’s been estimated that total Medicare spending for the drug for one year alone would be nearly $29 billion, far more than any other drug. How big a hit will seniors feel? The Part B premium is typically subtracted automatically from enrollees’ Social Security checks. Because Social Security recipients will receive a 5.9% cost-of-living increase next year — about $91 monthly for the average beneficiary — they’ll still see a net gain, though a chunk will be eaten away by the hike in Medicare premiums. About 70% of Medicare beneficiaries won’t face a 14.5% increase, anyway, because a “hold-harmless” provision in federal law protects them from premium increases that exceed Social Security’s cost-of-living increase, said Gretchen Jacobson, a vice president of the nonpartisan Commonwealth Fund. So their increase will be limited to 5.9%. Advertisement Those not covered by the hold-harmless provision are mainly high-income beneficiaries (people with incomes over $91,000 for individuals), those newly enrolled in Medicare Part B, people who receive both Medicaid and Medicare, and enrollees not receiving Social Security because they are still working. Inflation’s role Several Medicare experts said the spike in the general inflation rate has little or nothing to do with the Medicare premium increase. In fact, Medicare is largely immune from inflation, because the program sets prices for hospitals and doctors. “This is so false that it is annoying,” Paul Ginsburg, a professor of health policy at the Sol Price School of Public Policy at the University of Southern California, said of Scott’s claim. “The effect of the inflation spike so far on prices is zero because Medicare controls prices.” Advertisement Medicare Part B premiums, he said, reflect changes in the amount of health services delivered and a more expensive mix of drugs. “Premiums are tracking spending, only a portion of which reflects prices,” Ginsburg said. “I can’t see that the administration really had any discretion” in setting the premium increase due to the need to build a reserve to pay for the Alzheimer’s drug and make up for the reduced increase last year, he said. Stephen Zuckerman, codirector of the Urban Institute’s health policy center, said a rise in wages caused by inflation could spur a small boost in Medicare spending because wages help determine how much the program pays providers. But, he said, such an increase would have to occur for more than a few months to affect premiums. Continued soaring inflation could influence 2023 Medicare premiums, not those for 2022. “The claim that premium increases are due to inflation in the last couple of months doesn’t make sense,” Zuckerman said. CMS faced the challenge of trying to estimate costs for an expensive drug not yet covered by Medicare. “It is a very difficult projection to make, and they want to have enough contingency reserved,” said Jacobson, of the Commonwealth Fund. Still, the 5.9% jump that will hit most enrollees is a relatively large premium increase, she added. Those beneficiaries will see an $8.76 monthly increase in premiums, or about $105 more for all of 2022. Our ruling Though his statement contains a sliver of truth, Scott’s assertion ignores critical facts that create a different impression. For instance, Medicare policy experts said, current general inflation has little, if anything, to do with the increase in premiums. CMS said the increase was needed to put away money in case Medicare starts paying for an Alzheimer’s drug that could add tens of billions in costs in one year and to make up for congressional action last year that held down premiums. And most seniors will not pay hundreds of dollars more for premiums because of the hold-harmless provision. About 30% of Medicare enrollees — those with high incomes and those who do not receive Social Security — will have to pay the full $21.60 a month, or about $259 for 2022, a 14.5% increase. People in this category either have higher incomes or are not yet receiving Social Security because they are still working. The other 70% of enrollees will face a 5.9%, or $8.76 a month, increase. This means most Medicare enrollees will see a $105 increase in premiums for all of 2022, not hundreds of dollars. We rate the claim mostly false. Published Nov. 27, 2021 PG Phil Galewitz, Kaiser Health News/Politifact

Facebook and Google Funding Misinformation

    An   [MIT Technology Review]   

Take the time and check out this very interesting article.  Be informed.

                                                                                                                https://www.technologyreview.com/2021/11/20/1039076/facebook-google-disinformation-clickbait/

 

                                                     Logic  for the Illogical

 

                        

Even after Biden tax hike, U.S. firms would pay less than foreign rivals y By Tom Bergin Reuters

                                                Don't Let  Big Corporations Fool You.

June 22 (Reuters) - U.S. companies pay less income tax than their overseas competitors and would likely continue to do so under a tax hike proposed by President Joe Biden, according to a Reuters analysis of filings by hundreds of U.S. and international firms.

The analysis undercuts arguments by some company executives and trade groups that Biden’s plan would leave U.S. firms paying some of the world’s highest taxes and struggling to compete against foreign rivals. Industry representatives have aggressively lobbied against the proposal, which would increase the corporate tax rate to 28%, from the current 21%. The president also wants a minimum tax of 21% on overseas income, up from 10.5%.

U.S. corporations typically pay less - sometimes much less - than those statutory rates because the U.S. tax code is unusually generous with tax breaks and deductions, and in allowing overseas tax planning, according to the Reuters analysis. The analysis was reviewed by four academics with experience in measuring corporate tax payments.

Reuters examined the effective tax rates – reflecting the actual tax payments companies reported – of 52 of the largest U.S.-based multinational firms, and then compared them to the rates paid by these companies’ main overseas competitors. The U.S. companies paid an average effective tax rate of 16% in 2020 compared to an average rate of 24% paid by 200 foreign companies that the U.S. firms named as their competitors in filings.

If Biden’s proposed tax rates were applied to the U.S. firms’ 2020 earnings, the companies would have paid effective rates averaging about five percentage points higher, or 21%, the Reuters analysis found.

That’s still lower than the average rate paid by their overseas competitors. Moreover, U.S. firms would likely retain a bigger tax advantage over their foreign rivals than the analysis shows, for two reasons. First, the Reuters calculations do not account for the impact of new tax breaks for U.S. firms that Biden proposes to encourage domestic manufacturing and clean-energy investments. Second, the Biden plan would also require foreign companies with U.S. operations to pay higher taxes on their U.S. income.

Business lobby groups have argued that the Biden proposal, which requires congressional approval, would leave domestic firms at the mercy of their foreign rivals.

“Such tax increases would make the United States uncompetitive as a place to do business and make U.S. companies uncompetitive globally,” said Joshua Bolten, chief executive of the Business Roundtable, which represents about 200 large U.S. companies, when the measures were first announced on March 31.

The trade group said comparisons of effective tax rates, as in the Reuters analysis, can be “informative” but are only one of many valid ways to analyze how taxes impact the global competitiveness of U.S. firms. The organization said that simpler comparisons of statutory tax rates among nations - without considering deductions, credits and overseas tax planning - also accurately reflect the incentives for firms to locate in one nation versus another.

Neil Bradley, chief policy officer at the U.S. Chamber of Commerce, declined to comment on Reuters’ findings but said: “Higher taxes will hinder investment and competitiveness for U.S. businesses, ultimately hurting U.S. workers.”

Senator Ron Wyden, an Oregon Democrat and chairman of the Senate finance committee, dismissed such arguments. “The data are clear: U.S. mega-corporations are contributing far too little to federal revenues, particularly in comparison to foreign counterparts,” Wyden told Reuters.

Reuters ran its findings by Biden’s Treasury Department and the White House. The White House said in a statement: “This reporting highlights that the corporate tax code is broken. The largest corporations don’t pay their fair share in the United States, and pay less in other competitor countries.” Biden’s proposal, the White House said, is designed to address “the tax games and giveaways that underlie the rock-bottom tax rates described by this reporting.”

Republican leaders who have said the proposed hikes will damage U.S. firms’ competitiveness, including Senator Pat Toomey of Pennsylvania and Congressman Kevin Brady of Texas, declined to comment on the Reuters analysis. Senate Minority Leader Mitch McConnell, a Kentucky Republican, did not respond to requests for comment.

Democrats in Congress are pushing a bill to implement Biden’s plan. It could come up for a vote any time in the divided Senate. Its success may rely on the support of one Democrat Senator, Joe Manchin of West Virginia, who has pushed for lower tax rates than Biden wants. All Republican senators are expected to oppose it.

All of the 52 U.S. firms Reuters examined, and in most cases their overseas rivals, published detailed reconciliations explaining the deviation between their actual tax bill and the statutory tax rate in their home countries. These disclosures show that the U.S. firms’ relatively low effective tax rates stem from business-friendly provisions unique to the United States.

For example, U.S. tax breaks to encourage research and other activities generate bigger savings than similar breaks in other nations. The U.S. allows tax deductions for many expenses - such as client entertainment, stock-based compensation and certain legal costs - that are not typically deductible elsewhere. And U.S. companies can save far more money by shifting profits into tax-haven nations than, for instance, their rivals in Japan, Germany or France, whose governments limit such maneuvers.

RIDDLED WITH LOOPHOLES

Analyses cited by several business groups have said U.S. businesses currently face an average combined state and federal statutory tax rate of nearly 26% and that Biden’s plan would raise their rates to 32%.

Consultancy PricewaterhouseCoopers noted the average nominal tax rate among developed countries was 23% - lower than Biden’s proposed rate of 28% - and urged companies to lobby against the increases. Johnson & Johnson’s Chief Financial Officer Joseph Wolk told analysts in April that Biden’s plan would make the U.S. rate the highest among developed countries.

Such simplified comparisons, however, do not reflect actual taxes paid after deductions, credits and other advantages enjoyed by U.S. firms. Johnson & Johnson, for instance, paid an effective tax rate of less than 11% in 2020, according to the company’s annual report. The pharmaceutical giant did not comment on Reuters findings but said tax policy should create a “level playing field” for U.S. firms internationally.

PricewaterhouseCoopers declined to comment.

In another typical example, Activision Blizzard Inc (ATVI.O) – the California-based publisher of hit video games such as Call of Duty and World of Warcraft – reported paying an effective tax rate of 16% last year. Two of its main competitors, Sony Corporation (6758.T) and Nintendo Co Ltd (7974.T), are based in Japan and paid effective tax rates of 22% and 28%, respectively, according to their annual reports.

Activision declined to comment for this story.

The company slashed its tax payments through tax breaks and deductions and by operating subsidiaries in tax-haven nations. Activision has, for instance, saved hundreds of millions in taxes over the past decade, company filings show, by reporting billions of dollars in profits through a subsidiary based in Bermuda, an island with no corporate tax. Activision reported that it reduced its overall effective tax rate in 2020 by 4 percentage points because of the low tax rates paid by its foreign subsidiaries.

Activision rivals Sony and Nintendo each generate about three-fourths of their revenues outside of Japan, compared to about half for Activision. And yet Nintendo reported that taxes on overseas income reduced its effective tax rate by just 0.6 percentage points, while Sony reported a decrease of 2.4 percentage points.

Tax havens such as Bermuda don’t provide the same benefit to Japanese firms. Japan has a law that allows authorities to levy Japanese corporate taxes of about 30% on any income reported from operations in foreign jurisdictions with a tax rate of less than 20%. Similar rules are common in industrialized nations other than the United States.

STATE TAX BREAKS

Another reason Activision paid a relatively low effective tax rate is that its tax payments to U.S. states only increased the company’s total rate by 2 percentage points. That’s typical: On average, the effective rates of the 52 U.S. multinationals examined by Reuters were raised by just 1 percentage point by state tax payments. Business groups often cite 4% or 5% as the typical state tax burden, based on averages of statutory state rates that usually do not equate to actual taxes paid.

A host of factors lower companies’ state tax payments. States often lure companies with tax breaks, and compete with one another to offer the most generous incentives. Also, companies only pay state taxes on their U.S.-based income. And they can lower the bill further by apportioning earnings to relatively low-tax states.

At the federal level, companies drive down their tax bill through a host of deductions or credits that are often unavailable or limited in other nations. U.S. firms, for instance, can deduct the cost of share grants as compensation to executives and staff. Activision reported lowering its effective tax rate by 1 percentage point through such deductions. On average, the U.S. firms examined by Reuters reduced achieved savings of 2.6% from that provision.

The video game firm shaved an additional 3 percentage points off its tax bill by collecting tax credits for research and development spending. Its competitors Nintendo and Sony reported smaller tax savings from research credits.

Such credits are available to an array of U.S. firms, and not just in research-intensive sectors such as pharmaceuticals. Sport apparel giant Nike Inc (NKE.N), for instance, lowered its effective tax rate by 2 percentage points in 2020 through R&D credits. Two-thirds of the 52 U.S. companies Reuters examined reported similar benefits, with an average tax reduction of about 3 percentage points.

Research tax credits are common outside the United States, but typically worth less, often not enough to warrant company disclosure. Just 18 firms of the 200 foreign competitors to U.S. firms examined by Reuters reported benefits from research or other tax credits.

Some U.S. companies, to be sure, will take a bigger hit than others from Biden’s tax plan. But even if U.S. companies collectively sustain a bigger tax hit than foreseen, they would still be well-placed to compete, the analysis shows. On average, the 52 U.S.-based companies examined by Reuters had profit margins of 24%, well above than the average margin of 14% among their 200 foreign competitors.

“The argument on ‘competitiveness’ is code for ‘corporations should pay no taxes’,” said Senator Wyden, “and it doesn’t hold water.”

 

                     

Get It Right Kevin!

Nov. 21, 2021 by Linda Qui- NYT

Representative Kevin McCarthy, Republican of California and the minority leader, mounted his case against President Biden’s social spending bill in a record-breaking speech that stretched for more than eight hours from Thursday to Friday.

Here’s a fact check of some of his remarks.

What Mr. McCarthy Said

“Just a few weeks ago, Congresswoman Abigail Spanberger said nobody elected Joe Biden to be F.D.R. This even spends more than F.D.R. while he was fighting a world war.”

This is misleading. Spending and tax cuts in the bill will add up to about $2 trillion over 10 years, and could snowball into $4 trillion if shortened programs are extended.

That is indeed a larger dollar amount than the New Deal programs passed under President Franklin D. Roosevelt, which cost about $800 billion after adjusting for inflation, according to a report from the Federal Reserve Bank of St. Louis. But World War II itself cost about $5 trillion.

Moreover, comparing New Deal programs with the social spending bill should account for the changes in the United States’ economy and population size. The report from the Federal Reserve Bank of St. Louis also noted that the cost of the New Deal amounted to 40 percent of annual gross domestic product.

In comparison, the $1.9 trillion stimulus package that Mr. Biden signed into law in March and his initial proposal for a $4 trillion economic plan — which became the whittled-down infrastructure measure and the social spending bill — together would amount to 28 percent of G.D.P.

What Mr. McCarthy Said

“You’re hiring 87,000 I.R.S. agents to come after them, 1.2 million more audits, and half of all those 1.2 are going after Americans who make $75,000 or less.”

This is misleading. The bill provides the I.R.S. with $80 billion in additional funding, including nearly $45 billion for enforcement. The Congressional Budget Office noted in September that the proposal would result in increased audit rates for everyone, with high-income earners facing the largest increase.

The bill does not contain any specifics directing how audits would be spread among taxpayers of different incomes, and the Biden administration and Republicans disagree on how it would play out.

The Treasury Department said in a May report about the proposal that tax audit rates would not rise for those earning less than $400,000 since the “compliance proposals are designed to ameliorate existing inequities by focusing on high-end evasion.”

A spokeswoman for Mr. McCarthy pointed to calculations from Republicans on the House Ways and Means Committee that compared historical audit data.

In the past decade, tax audit rates have fallen for higher-income earners and have stayed relatively stable for lower-income earners, which the Treasury Department attributed to the I.R.S.’s diminished resources and inability to retain specialized auditors needed to examine the filings of the wealthy.

The I.R.S. examined 1.4 million individual income tax returns in 2010, about 1 percent of the total number filed. In 2018, the latest year with available data, audits decreased to 370,000, or about 0.2 percent.

The Congressional Budget Office estimated that the bill would return enforcement to its 2010 levels. Doing so would indeed result in about 1.2 million more audits, and about 580,000 of those would affect people making less than $75,000.

But that is because a vast majority of tax filers — about 70 percent — make under that threshold. Looking at what fraction of returns are examined by income group, rather than the sheer number, shows that wealthier taxpayers would have a better chance of being audited than lower-income earners under the Democrats’ proposal.

Under 2010 levels of enforcement, about 0.5 percent of returns reporting between $1 and $75,000 in income would be audited, as would 1 percent of those with more than $75,000 in income. In comparison, those rates were 0.3 percent and 0.1 percent in 2018. For those making more than $10 million, more than 20 percent of returns would be examined under 2010 levels, compared with 5.3 percent in 2018.

What Mr. McCarthy Said

“All you have to do as an American is spend $28 and the I.R.S. is going to knock on your door.”

This is misleading. This was a reference to a proposal by the Treasury Department requiring banks to report aggregate annual flows of $10,000 or more in customer accounts to better tackle tax evasion. (A previous version of the proposal suggested monitoring flows of $600.) Wages and federal benefits are exempt from the reporting requirement, and banks will not report individual transactions. But this proposal did not make its way into the social spending bill.

In a fact sheet, the Treasury Department said it was a “misconception” that all Americans would face greater scrutiny under the proposal.

Michelle Nessa, an accounting professor at Michigan State University and expert on tax audits, said that the bank reporting requirement was “unlikely to meaningfully increase audit risk for most people.”

What Mr. McCarthy Said

“We’re going to take taxes from you so somebody who makes $800,000 can get a tax break to buy a Tesla.”

False. The Democrats’ bill would increase tax credits for electric vehicles to $12,500 from $7,500 if the car is made in the United States with union labor and if its battery is also produced domestically. The credits cover sedans that cost up to $55,000 and zero-emission vans, SUVs and trucks that cost up to $80,000, so the Tesla Model 3, which starts in the mid-$40,000s, would qualify.

But the hypothetical almost-millionaire in Mr. McCarthy’s example would not qualify, as only individuals making $250,000 or less (and joint filers making $500,000 or less) can claim the credits under the bill.

What Mr. McCarthy Said

“More than one million people who lost their job after President Biden was sworn in because he shut down a pipeline. ”

False. Early in his presidency, Mr. Biden rescinded the construction permit for the Keystone XL oil pipeline, and the company behind the project terminated it altogether in June. Mr. McCarthy wildly exaggerated the pipeline’s effect on employment.

The company itself has estimated that the pipeline would employ about 11,000 Americans. The State Department, in a 2014 report, estimated that it would support about 42,000 temporary jobs during two years of construction and 35 permanent employees after the initial phase.

Biden’s ​​Social Policy Bill at a Glance

---

Card 1 of 6

A narrow vote. The House passed President Biden’s social safety net and climate bill on Nov. 19. Democratic leaders must now coax the $2 trillion spending plan through the 50-50 Senate and navigate a tortuous budget process. Here’s a look at some key provisions:

Child care. The proposal would provide universal pre-K for all children ages 3 and 4 and subsidized child care for many families. The bill also extends an expanded tax credit for parents through 2022.

Paid leave. The proposal would provide workers with four weeks of paid family and medical leave, which would allow the United States to exit the group of only six countries in the world without any national paid leave.

Drug prices. The plan includes a provision that would, for the first time, allow the government to negotiate prices for some prescription drugs covered by Medicare. ​​

Climate change. The single largest piece of the bill is $555 billion in climate programs. The centerpiece of the climate spending is about $300 billion in tax incentives for low-emission sources of energy.

Taxes. The plan calls for nearly $2 trillion in tax increases on corporations and the rich. The bill would also suspend a $10,000 cap on the SALT deduction, mostly to the benefit of wealthy Americans in liberal states.

Mr. McCarthy may have been referring to a 2020 analysis from the American Petroleum Institute, the oil and gas industry’s biggest trade group, that estimated that nearly one million jobs would be lost by 2022 if drilling were banned on federal lands — not from the cancellation of one pipeline.

Mr. Biden banned new oil and gas leases on federal lands but did not rescind existing leases. Moreover, in June, a federal judge blocked the administration’s suspension of new leases. The approval of leases has actually increased under Mr. Biden, as has employment in oil and gas extraction.

What Mr. McCarthy Said

“Biden terminated every successful immigration policy put into place by President Trump, triggering the largest wave of illegal immigration in of all history.”

This is exaggerated. Mr. Biden has indeed rescinded many of President Donald J. Trump’s immigration policies, but he also has kept a key policy intact.

While the Biden administration has rescinded the so-called Muslim ban, halted construction of Mr. Trump’s border wall and stopped conducting workplace immigration raids, it is continuing to use a public health rule that allows officials to turn away hundreds of thousands of migrants at the border.

Additionally, the Biden administration tried to end a Trump-era program that forced asylum seekers to wait in Mexico while their applications were being reviewed, but it was ordered to restart the program.

What Mr. McCarthy Said

“You’re providing money, $450,000, for people who came here illegally, and you’re taking it from American hardworking taxpayers.”

This is misleading. The bill itself does not provide hundreds of thousands of dollars for unauthorized immigrants. Rather, this was a reference to a proposal to provide monetary compensation for damage inflicted by a Trump-era immigration policy.

The American Civil Liberties Union and others have filed lawsuits on behalf of migrant families separated at the border by the Trump administration. About 5,500 children were separated from their parents. The Wall Street Journal reported that the lawsuits seek damages of varying ranges and average $3.4 million per family.

The Biden administration and lawyers for the families have been in negotiations to provide $450,000 for each family member affected, but The New York Times reported that only a minority of families would be eligible as many have not filed complaints against the government.

When asked about the figure this month, Mr. Biden said “that’s not going to happen.” A White House spokeswoman later clarified that the Justice Department had told plaintiffs that the $450,000 figure was “higher than anywhere that a settlement can land.”

What Mr. McCarthy Said

“Mr. Speaker, you might remember the Iron Dome. Your party actually defunded that.”

False. Despite some opposition from progressive Democrats to providing funding for Israel’s Iron Dome missile defense system, the House voted 420 to 9 in September to provide $1 billion in new funding. Democrats voted overwhelmingly for the funding.

                                                    Logic for the Illogical 

 

Don't Blame it All on China

 

How American Leaders Failed to Protect American Workers

Greg Rosalsky

Reporter, Planet Money

Most blockbusters have sequels. Apparently, that's also true in economics. A new study by David Autor, David Dorn and Gordon Hanson offers another installment in their epic China Shock saga. You might call it China Shock: The Final Chapter. It may be the best one yet, with solid exposition and cutting-edge statistical effects. It kind of ties the whole thing together, offering important lessons for the political world on how to avoid another catastrophe for working-class Americans.

For those not caught up on the China Shock saga: About a decade ago, economists Autor, Dorn and Hanson began a groundbreaking research project to see what happened to the U.S. after China cannonballed into the global marketplace at the turn of the millennium. For competitors, it was like an earthquake followed by a tsunami followed by a flood. Between 1991 and 2013, China's manufacturing exports went from only 2.3% of the world's total to a whopping 19% of it.

Up until Autor, Dorn and Hanson began publishing about the China Shock, mainstream economists didn't really consider trade to be a crucial part of the story of rising inequality in America. They focused more on the effects of technological change and domestic policies. And to be fair to them, Hanson says, trade wasn't really an important part of the story before China came on the scene. "We had never seen a country that was this big and this specialized in manufacturing open itself that quickly."

t was not a surprise to economists that China, with its endless supply of cheap labor, killed American manufacturing jobs. But most economists, like most American leaders, had believed that workers would adapt somewhat smoothly to economic change and that they would find solid places to work in other sectors. "We had this notion that the American economy is this incredibly dynamic place," says Hanson, an economist at Harvard Kennedy School. "We create millions of jobs every year, and we destroy millions of jobs every year. We thought we could handle moving a couple of million manufacturing workers from one sector to another."

[Editor's note: This is an excerpt of Planet Money's newsletter. You can sign up here.]

Autor, Dorn and Hanson's first peer-reviewed papers from their China Shock saga were published in 2013. The economists found that between 1990 and 2007, trade with China killed about 1.5 million American manufacturing jobs, or about a quarter of all manufacturing jobs lost during that period. But what was even more startling: These losses were heavily concentrated in small- and medium-size communities dotting America's heartland — and workers who lost their jobs in those areas struggled to find other work. The China Shock created what looked like miniature Great Depressions in these places.

Standard economic theory said that the non-college-educated workers who lost their jobs would move or retrain and find work in other places or sectors. But they didn't. Most stayed put and were never fully employed again. "It ended up creating these pockets of distress," Hanson says. "That was the surprising part. That's what we economists didn't know was going to happen."

The initial China Shock research was pretty much as influential and eye-opening as any group of egghead academics could hope for. It has been talked about regularly in mainstream media outlets. It has been cited on Capitol Hill and in the halls of the White House. After Donald Trump got elected president with a populist China-bashing message, it helped explain an important part of the mystery of why so many working-class Americans in the Rust Belt supported him.

Spoiler alert: The sequel is depressing

In China Shock: The Final Chapter (OK, it's actually called "On the Persistence of the China Shock"), the economists tell the story of what has happened since the previous chapter. Their study period now goes from 2000 to 2019. There's quite a bit to chew on.

The first important thing to note is that the China Shock was basically over after 2010. "China had achieved enormous market shares in furniture and footwear and consumer electronics and held onto those market shares — but kind of stopped picking up market presence," Hanson says. Part of Hanson's explanation for the slowdown is that China reached the limits of its model of economic growth, which was powered by transforming an inefficient, agrarian, state-run economy into a modern industrial one. Around 2010, Hanson says, Chinese leaders also began turning away from their embrace of private enterprise and back to inefficient statism.

But even if China stopped its frenzied growth in exports, the scorched earth left by that growth still mars America's landscape. Chinese imports may have given the average American more purchasing power, allowing them to buy cheap stuff from Walmart and Amazon, but the American communities that had drawn their lifeblood from manufacturing never recovered from the evisceration of their industries. These communities just got poorer and poorer. Government programs did help a little bit, but, Hanson says, they find that government transfers offset only about 15% of the total income lost.

Surprisingly (to economists, anyway), even though these communities remain decimated, many people have still refused to leave them. Autor, Dorn and Hanson find that it was only foreign-born workers and native workers ages 25 to 39 who were likely to leave. Everyone else basically stayed, even if the economic rug was pulled out from under them. It contradicts the standard economic model, which says people will rationally move to where better opportunities present themselves.

Why did so many people who lost their jobs stay? It speaks to the power of friends and family and people's identities being intertwined with their communities and former occupations. In short, sociological and psychological complexities that economists traditionally haven't studied. But, Hanson says, there may also be some economic factors at work as well. For example, the housing markets in these places tanked after manufacturing dried up, and that likely left many people underwater on their mortgages. This may have made them reluctant to move and lose what equity they had.

The China Shock saga, Hanson says, seems to be a general story about what happens when a bomb explodes on a community's main industry. The community doesn't just bounce back. Workers don't just shift to new sectors or move to new places. The social fabric of the community gets ripped apart. Destitution, squalor and depression set in.

Autor, Dorn and Hanson draw a direct analogy to what happened to coal-mining towns in the 1980s, after the sinking price of oil and gas led to a catastrophe for the coal industry. "Those coal-mining towns had experiences that were remarkably similar to what happened in former manufacturing towns in the U.S.," Hanson says. "Job loss in one sector translated into lower overall employment rates and social breakdown: families being less likely to form, more kids living with single moms and poverty, and then more drug and alcohol abuse and substance-abuse-related mortality."

It's easy to paint China as the antagonist in the China Shock story, especially in the United States. And, Hanson says, China did do some nefarious things along the way. At the same time, trade helped hundreds of millions of Chinese people get lifted out of extreme poverty. The real failure, Dorn says, was U.S. policymaking, and he blames leaders in both parties. Leaders failed to create effective policies to help workers cope with the pain brought about by trade. Hanson says America's policies have been and remain pathetic when it comes to helping those who lose their jobs. He argues we should increase the generosity of unemployment insurance and trade-adjustment assistance and retool our programs aimed at retraining workers. Other advanced countries, he says, do a much better job on this front.

Hanson argues this is a really important lesson that American policymakers need to learn. We're going to see more shocks to communities in the future. He predicts the next one will come from the ongoing transition from oil and gas to alternative forms of energy.

So the sequel is super-depressing. In a desperate attempt for any levity, we asked what Hanson's favorite movie sequel is. He said Star Wars: Episode V — The Empire Strikes Back. We joked it's time for the Autor, Dorn and Hanson trio to release a Star Wars-style prequel to the China Shock saga.

Funny you should ask," Hanson says. "Some of the stuff that we're working on now is understanding whether job loss that is concentrated in these manufacturing towns is different today than it was in the 1960s and 1970s."

We econ nerds at Planet Money will be lining up for the China Shock prequel.

                                     The Dogs Ear Giving Logic to the Illogical

 

Federal Tax Cuts in the Bush, Obama, and Trump Years

 A report by Steve Wamhoff and Mathew Gardner of the Institute of Taxation and Economic Policy July 2018.

ITEP is a non-profit, non-partisan tax policy organization. We conduct rigorous analyses of tax and economic proposals and provide data-driven recommendations on how to shape equitable and sustainable tax systems. ITEP’s expertise and data uniquely enhance federal, state, and local policy debates by revealing how taxes affect both public revenues and people of various levels of income and wealth.

 OVERVIEW
Since 2000, tax cuts have reduced federal revenue by trillions of dollars and
disproportionately benefited well-off households. From 2001 through 2018, significant
federal tax changes have reduced revenue by $5.1 trillion, with nearly two-thirds of that
flowing to the richest fifth of Americans, as illustrated in Figure 1.1 The cumulative impact
on the deficit during this period is $5.9 trillion, including interest payments.
By the end of 2025, the tally of tax cuts will grow to $10.6 trillion. Nearly $2 trillion of this
amount will have gone to the richest 1 percent. By then, the total impact on the deficit
will be $13.6 trillion, including interest payments.
This analysis does not include hundreds of billions of dollars in so-called tax cut
“extenders” for corporations and other businesses that Congress has periodically enacted
under each administration.

The full report ca be found at https://itep.org/federal-tax-cuts-in-the-bush-obama-and-trump-years/

                                                                                                                                                                                          The Dogs Ear Giving Logic to the Illogical

 

Flooding and Critical Infrastructure

The Dog’s Ear Blog is back, showing logic to the  illogical.

Today’s first post deals with flooding and critical infrastructure risks. As many of you know or may not know the climate of the world is changing. Like it or not. President Biden has made climate change and infrastructure two of his top priorities. Why do members of congress refused to work with the president to invest in the future, even if it is detrimental to their own states welfare? And don’t say it’s about the money.

Recently First Street Foundation, the science and technology a nonprofit organization which deals with the problem of flooding came out on October 11, 2021 with a press release from a report titled “ National Resilience Report Findings that 25% of All Critical Infrastructure and 23% of Roads have Flood Risk” in this country.

Here is part of the report.

Roughly 25%, or 1 in 4 of all critical infrastructure in the country are at risk of becoming inoperable today, which represents roughly 36,000 facilities. Further to this, 23% of all road segments in the country (nearly 2 million miles of road), are at risk of becoming impassable. Additionally, 20% of all commercial properties (919,000), 17% of all social infrastructure facilities (72,000), and 14% of all residential properties (12.4 million) also have operational risk.

Over the next 30 years, due to the impacts of climate change, an additional 1.2 million residential properties, 66,000 commercial properties, 63,000 miles of roads, 6,100 pieces of social infrastructure and 2,000 pieces of critical infrastructure will also have flood risk that would render them inoperable, inaccessible, or impassable.

The highest concentration of community risk exists in Louisiana, Florida, Kentucky, and West Virginia, with 17 of the top 20 most at risk counties in the U.S. (85%) residing in these 4 states. Louisiana alone accounts for 8 of the top 20 most at risk counties (30%) and is home to the most at risk  county in the country, Cameron Parish.