In a time when the United States is desperate for economic recovery, President Biden marches the country toward a Venezuelan controlled economy.
By: Bobby Casey, Managing Director GWP
People were fed up with the government just pushing everything through with no regard for what the people actually wanted. Universal healthcare, for example, was not universally sought by Americans. Yet the ACA was forced into law. Americans are still paying for this.
Trump was a vote of exasperation. A sentiment that was ignored for eight years, if not longer. He really did cut to the heart of what many average Americans wanted.
A very rare thing happened in the 2020 election: Trump votes went UP. Even thought he lost the election, his overall popular vote count went UP from 2016. Perhaps some disenfranchised Republicans went over to the Biden camp. But he gained new support that replaced those losses and then some.
That population is being ignored… again. This time, in the wake of a pandemic; rather a global political emergency.
Doesn’t matter what you think of Trump or Biden, this is meant to point out the political climate in the US. As mentioned before, the public trust has taken a righteous beating. And hiding behind the calls for unity as a country are policies many conservatives and libertarians feared would come.
The US economy is struggling, yet what I’m seeing is some of the most surreal stuff I’ve seen in a while. It would appear that the United States and Venezuela are actually approaching each other in the economic stream.
Venezuela is shuffling stuff off — albeit quietly — back to the private sector. At the very least Nicolas Maduro recognizes that his bureaucrats are doing a terrible job of running state-assumed industries, and is looking to find people who actually know something about those industries to run them instead.
I say “at least” because this isn’t full privatization at all. For now, it’s the Maduro administration realizing there are better experts than his crew who can run stuff.
…[E]ven socialist leaders in Venezuela have conceded that they cannot run an economy with enough efficiency to avoid economic ruin. But while returning enterprises to private owners is a step in the right direction, it’s hardly accurate to call Maduro‘s strategy “capitalism.”
The Maduro government is still using everything from price controls on food to minimum wage hikes to currency manipulation to manage its economy, not to mention selecting which businesses get to participate in its privatization efforts (and who gets to invest)…
At best, Venezuela’s current economic system is a form of fascism, which Sheldon Richman once described as “socialism with a capitalist veneer.”
This is the more visible intersection: you have Maduro minimally recognizing that state agents cannot run private industry, while you have POTUS Joe Biden looking to control more industry and raise taxes.
With all the borrowing the US has done in the previous administrations (Trump being the latest and greatest of the bunch) no doubt the US is heading in the same direction as Venezuela with regard to inflation. You can’t have multi-billion dollar stimulus packages flying off the congressional shelves in rapid succession and expect to be immune to the economic consequences.
With regard to labor, Biden and his Democrats are looking to increase the minimum wage to $15 per hour, and they are already pushing the PRO Act to provide a federal definition of what a “contractor” and “gig” worker are… modeled of course, after California.
He — or more specifically hardline Democrats — are looking to control industry by entertaining the reintroduction of Net Neutrality. So far, the government has interfered with higher education and healthcare costs, to make it more accessible for everyone. In both cases, the quality has declined while the costs have skyrocketed.
I don’t expect much different from the internet.
Much like education and healthcare, Democrats consider internet service “essential”. That word has been brandished about a lot in the past year. With people working from home, and children now learning from home, both in greater number, the internet has been framed as an “essential utility” much like water and electricity.
Net Neutrality is about nationalizing the regulations on the internet… at least for now. The next step could very well be nationalization of internet as a public utility.
But on top of all this, Biden made a promise to repeal tax cuts. He promised that would be on day one, but here we are entering month three, and this still hasn’t happened. The talks are happening, however:
The planned increases reportedly include: raising the corporate tax from 21 percent to 28 percent; increasing the income tax rate on people making more than $400,000; expanding the estate tax; paring back tax preferences on pass-through businesses such as limited-liability companies; and setting up a higher capital gains tax rate for individuals making at least $1 million.
All this to raise $2.1 trillion over ten years. That hardly seems worth it. The added hardship placed on any productive aspect of the economy right now could protract the recovery period for years. And for what? The moratoriums are coming to an end. The amount of debt incurred during the last year per household has yet to settle.
Those who remain with means, will not stick around for the circus and the loss. With many jobs going remote, and many countries amenable to high income remote workers interloping through their jurisdictions, capital flight is an inevitability. If you see Biden as a problem, the solution isn’t Trump. The solution is to carve out your own path to independence. Protect your assets, your wealth and yourself.
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