newswars--2020-05-05--China Moves to Wean Itself off Dollar, Steps Up Digital Currency Testing

Reports that China was launching a pilot program to test its ambitious Digital Currency Electronic Payment made headlines in late April , amid the emergence of screenshots on social media showing the DCEP wallet .
As China expands globally , seeking significant financial autonomy and less dependency on America amid its trade war with Washington , the country has long sought to wean itself from the US-dollar dominated financial system .
Finally , after years of effort , China is gearing up to release the world ’ s first sovereign digital currency – DCEP ( short for Digital Currency/Electronic Payments @ @ @ @ @ @ @ launched a trial program across four cities – Shenzhen , Suzhou , Xiongan and Chengdu – to test the use of its digital currency , touted as incorporating some features of cryptocurrencies , but lacking the anonymity of such digital assets , the Digital Currency Research Institute of the People ’ s Bank of China confirmed to the South China Morning Post ( SCMP ) .
The acknowledgment came in the wake of reports triggered by a spate of screenshots on social media that supposedly showed the DCEP wallet .
DCEP trial runs @ @ @ @ @ @ @ of banks and end users , eventually spreading to a wider range amid improvements in the technology and system .
There are said to be three principal differences between DCEP and existing cryptocurrencies such as bitcoin , according to Terry Liu , CEO of VoneChain Technology , a blockchain consultancy based in Shanghai , cited by Wired UK .
First , while Bitcoin is mined , meaning the source is decentralised and controlled by an algorithm , DCEP is government sanctioned and centralized .
Secondly , the underlying technology is different .
The @ @ @ @ @ @ @ government and not distributed across the system .
And thirdly , it will operate like a normal currency and be integrated throughout the commercial system , the expert is cited as saying .
China ’ s digital currency breakthrough was widely trailed and comes against the backdrop of an escalating war of words with the US .
Amid the COVID-19 global pandemic and the economic fallout triggered by it , the US has been ramping up accusations against China , claiming it had covered up the initial outbreak of the virus and lacked @ @ @ @ @ @ @ recently , there have been statements uncorroborated by any evidence from US President Donald Trump and Secretary of State Mike Pompeo that the virus had originated at a laboratory in Wuhan , where the outbreak started in December 2019 .
China has emphatically dismissed the speculations as “ groundless accusations ” .
China has been seeking to shake off reliance on US dollar settlements that allow Washington to impose unilateral punitive sanctions on companies via the threat of exclusion from the SWIFT dollar settlement system .
DCEP as part of the further development @ @ @ @ @ @ @ serve to counter what Beijing has branded as “ weaponisation of the US dollar ” as a foreign policy tool , reported the China Daily on 24 April .
“ A sovereign digital currency provides a functional alternative to the dollar settlement system and blunts the impact of any sanctions or threats of exclusion both at a country and company level ” , said the outlet .
The ongoing Covid-19 crisis , with its protocols of social distancing and “ contactless ” payments might also enhance the appeal of a Chinese digital currency @ @ @ @ @ @ @ s Libra earlier this year also seen as accelerating China ’ s development of DCEP .
Previously , Beijing had taken bold steps to globalize the yuan and enhance its status to match the size of the Chinese economy , futures , yet these ambitions were fraught with challenges .
First and foremost , Chinese authorities restrict yuan conversion and capital outflow .
While not regulating yuan convertibility for trade payments , China imposes restrictions on conversion for capital transactions , Lee Chi-hyun , a researcher at the Korea Center for International Finance @ @ @ @ @ @ @ Times .
“ Fundamentally speaking , for the globalization of the yuan , its value should be stable , and there should be quality yuan assets so that yuan holders can make investment profits out of yuan holdings… Otherwise , people will not want to hold yuan , ” said Lee .
Now , many experts perceive China ’ s launch of a digital currency as part of its long-term play to underwrite the globalization of the yuan .
Most people don ’ t realize that as much as 90 % of the @ @ @ @ @ @ @

Reports that China was launching a pilot program to test its ambitious Digital Currency Electronic Payment made headlines in late April, amid the emergence of screenshots on social media showing the DCEP wallet.
As China expands globally, seeking significant financial autonomy and less dependency on America amid its trade war with Washington, the country has long sought to wean itself from the US-dollar dominated financial system.
Finally, after years of effort, China is gearing up to release the world’s first sovereign digital currency – DCEP (short for Digital Currency/Electronic Payments).
China’s central bank launched a trial program across four cities – Shenzhen, Suzhou, Xiongan and Chengdu – to test the use of its digital currency, touted as incorporating some features of cryptocurrencies, but lacking the anonymity of such digital assets, the Digital Currency Research Institute of the People’s Bank of China confirmed to the South China Morning Post (SCMP).
The acknowledgment came in the wake of reports triggered by a spate of screenshots on social media that supposedly showed the DCEP wallet.
Breaking: #China Central Bank Digital Currency #DCEP is coming! Pics show that Agriculture Bank of China is making internal test on DCEP wallet, and these pics are real! We downloaded the App and found that the first four pilot areas are Shenzhen, Xiong’an, Chengdu and Suzhou. pic.twitter.com/R0AeVi0eaK — BlockBeats (@BlockBeatsChina) April 14, 2020
DCEP trial runs will be piloted to a small range of banks and end users, eventually spreading to a wider range amid improvements in the technology and system.
There are said to be three principal differences between DCEP and existing cryptocurrencies such as bitcoin, according to Terry Liu, CEO of VoneChain Technology, a blockchain consultancy based in Shanghai, cited by Wired UK.
First, while Bitcoin is mined, meaning the source is decentralised and controlled by an algorithm, DCEP is government sanctioned and centralized.
Secondly, the underlying technology is different. The blockchain ledger will be controlled by the government and not distributed across the system.
And thirdly, it will operate like a normal currency and be integrated throughout the commercial system, the expert is cited as saying.
China-US Verbal War
China’s digital currency breakthrough was widely trailed and comes against the backdrop of an escalating war of words with the US.
Amid the COVID-19 global pandemic and the economic fallout triggered by it, the US has been ramping up accusations against China, claiming it had covered up the initial outbreak of the virus and lacked transparency regarding death toll numbers.
More recently, there have been statements uncorroborated by any evidence from US President Donald Trump and Secretary of State Mike Pompeo that the virus had originated at a laboratory in Wuhan, where the outbreak started in December 2019.
China has emphatically dismissed the speculations as “groundless accusations”.
China’s Long-Sought Ambition
China has been seeking to shake off reliance on US dollar settlements that allow Washington to impose unilateral punitive sanctions on companies via the threat of exclusion from the SWIFT dollar settlement system.
DCEP as part of the further development of an RMB-based trade settlement system could serve to counter what Beijing has branded as “weaponisation of the US dollar” as a foreign policy tool, reported the China Daily on 24 April.
“A sovereign digital currency provides a functional alternative to the dollar settlement system and blunts the impact of any sanctions or threats of exclusion both at a country and company level”, said the outlet.
The ongoing Covid-19 crisis, with its protocols of social distancing and “contactless” payments might also enhance the appeal of a Chinese digital currency, with the launch of Facebook’s Libra earlier this year also seen as accelerating China’s development of DCEP.
Previously, Beijing had taken bold steps to globalize the yuan and enhance its status to match the size of the Chinese economy, futures, yet these ambitions were fraught with challenges.
First and foremost, Chinese authorities restrict yuan conversion and capital outflow.
While not regulating yuan convertibility for trade payments, China imposes restrictions on conversion for capital transactions, Lee Chi-hyun, a researcher at the Korea Center for International Finance, was quoted as saying by Asia Times.
“Fundamentally speaking, for the globalization of the yuan, its value should be stable, and there should be quality yuan assets so that yuan holders can make investment profits out of yuan holdings… Otherwise, people will not want to hold yuan,” said Lee.
Now, many experts perceive China’s launch of a digital currency as part of its long-term play to underwrite the globalization of the yuan.
Most people don’t realize that as much as 90% of the medicine they use comes from China!


newswars--2020-05-05--18 Million People Entered the UK as the Coronavirus Pandemic Was Raging

18 million people entered the UK in the three months before lockdown with hardly any of them undergoing health screenings or being put into quarantine , it has been revealed .
“ Only 273 people out of 18.1million who came to the country in the three months leading up to the nation-wide lockdown were put into quarantine , ” reports the Mirror .
This means that “ tens of thousands of people were entering from coronavirus-affected countries , ” including Italy and Spain and were then allowed to circulate amongst the general population .
“ On what scientific basis were @ @ @ @ @ @ @ one from a Tokyo singled out for extreme attention ?
But not a single flight from Northern Italy , Spain or the US ?
” asked Labour MP Stephen Doughty .
“ The fact that many of these people then likely arrived and travelled onwards across the UK with little or no adherence to social distancing , and with no checks or protections at the border – barely a whiff of hand sanitiser – is deeply disturbing .
Let alone the arrival of 3,000 fans from Madrid as the pandemic picked up speed @ @ @ @ @ @ @ previously highlighted , 100,000 people arriving from foreign countries are still landing at UK airports every single week with virtually no health checks whatsoever .
Meanwhile , Brits who have been under government-imposed lockdown for 6 weeks are being told they might be allowed to go outside for picnics…in a month .
My voice is being silenced by free speech-hating Silicon Valley behemoths who want me disappeared forever .
It is CRUCIAL that you support me .
Please sign up for the free newsletter here .
Donate to me on SubscribeStar here .
@ @ @ @ @ @ @ a supercharged boost of clean energy without the comedown .

18 million people entered the UK in the three months before lockdown with hardly any of them undergoing health screenings or being put into quarantine, it has been revealed.
“Only 273 people out of 18.1million who came to the country in the three months leading up to the nation-wide lockdown were put into quarantine,” reports the Mirror.
This means that “tens of thousands of people were entering from coronavirus-affected countries,” including Italy and Spain and were then allowed to circulate amongst the general population.
“On what scientific basis were a handful of flights from Wuhan and one from a Tokyo singled out for extreme attention? But not a single flight from Northern Italy, Spain or the US?” asked Labour MP Stephen Doughty.
“The fact that many of these people then likely arrived and travelled onwards across the UK with little or no adherence to social distancing, and with no checks or protections at the border – barely a whiff of hand sanitiser – is deeply disturbing. Let alone the arrival of 3,000 fans from Madrid as the pandemic picked up speed,” he added.
As we previously highlighted, 100,000 people arriving from foreign countries are still landing at UK airports every single week with virtually no health checks whatsoever.
Meanwhile, Brits who have been under government-imposed lockdown for 6 weeks are being told they might be allowed to go outside for picnics…in a month.
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newswars--2020-05-05--Venezuela Captures Two American “Mercenaries” Involved In Failed ‘Invasion’ Attempt

An astounding and unexpected development which is about to launch US regime change efforts in Venezuela straight back into the headlines .
The Maduro government says it has captured two Americans who were leading a ‘ Rambo-style ’ armed coup effort .
CNN reports : Venezuelan President Nicolas Maduro says two American “ mercenaries ” have been apprehended after a failed coup attempt launched over the weekend .
In a live address on state television late Monday , Maduro brandished what he claimed were the US passports and drivers licenses of the two men , along with what he said @ @ @ @ @ @ @ a Florida-based security services company .
Silvercorp , it must be remembered from our reporting days ago based on the Associated Press , is a Flordia-based private security firm founded by a former Green Beret soldier who hooked up with Venezuelan military officer defectors for a half-baked ‘ armed invasion ’ of the socialist country in order to overthrow Maduro .
Airing photos of the men on state television , Maduro further described the pair were playing “ Rambo ” illegally in his country .
And further : Footage posted on Maduro ’ @ @ @ @ @ @ @ men in a boat with their hands in the air and a helicopter overhead .
The men in the boat were not identifiable in one video , but a separate photo more clearly depicted two men who Maduro claimed were American .
It total Maduro said 13 “ terrorists ” had been captured by authorities in connection with a bid to invade the country and stoke insurrection on Sunday .
Maduro paraded what were described as passports and other identification cards of Airan Berry and Luke Denman , described as employees of Silvercorp @ @ @ @ @ @ @ of the detained Americans has confirmed to the AP on Tuesday he is currently missing .
Per the NY Times : “ Kay Denman , the mother of one of the captured Americans , told The Associated Press that the last time she heard from her son was a few weeks ago when he texted her from an undisclosed location to ask how she was coping with the coronavirus pandemic .
She said she never heard her son discuss Venezuela and only learned of his possible capture there after his friends called when @ @ @ @ @ @ @ ” Most people don ’ t realize that as much as 90 % of the medicine they use comes from China !

An astounding and unexpected development which is about to launch US regime change efforts in Venezuela straight back into the headlines. The Maduro government says it has captured two Americans who were leading a ‘Rambo-style’ armed coup effort. CNN reports:
Venezuelan President Nicolas Maduro says two American “mercenaries” have been apprehended after a failed coup attempt launched over the weekend.
In a live address on state television late Monday, Maduro brandished what he claimed were the US passports and drivers licenses of the two men, along with what he said were their ID cards for Silvercorp, a Florida-based security services company.
Silvercorp, it must be remembered from our reporting days ago based on the Associated Press, is a Flordia-based private security firm founded by a former Green Beret soldier who hooked up with Venezuelan military officer defectors for a half-baked ‘armed invasion’ of the socialist country in order to overthrow Maduro.
Airing photos of the men on state television, Maduro further described the pair were playing “Rambo” illegally in his country. And further:
Footage posted on Maduro’s official Twitter account shows several unidentifiable men in a boat with their hands in the air and a helicopter overhead. The men in the boat were not identifiable in one video, but a separate photo more clearly depicted two men who Maduro claimed were American.
My bro, who takes their fucking mil ID card with them on a merc job to dispose of a foreign government? https://t.co/uN0Y5a8Dh7 — Jack Murphy (@JackMurphyRGR) May 5, 2020
It total Maduro said 13 “terrorists” had been captured by authorities in connection with a bid to invade the country and stoke insurrection on Sunday.
Maduro paraded what were described as passports and other identification cards of Airan Berry and Luke Denman, described as employees of Silvercorp.
President Maduro said Venezuela has detained two American citizens working with a U.S. military veteran allegedly involved in a plot to enter the South American country and oust him https://t.co/0ngHr7dQV6 pic.twitter.com/mm5nsiQLu7 — Reuters (@Reuters) May 5, 2020
Crucially, the family of one of the detained Americans has confirmed to the AP on Tuesday he is currently missing.
Per the NY Times: “Kay Denman, the mother of one of the captured Americans, told The Associated Press that the last time she heard from her son was a few weeks ago when he texted her from an undisclosed location to ask how she was coping with the coronavirus pandemic. She said she never heard her son discuss Venezuela and only learned of his possible capture there after his friends called when they saw the reports on social media.”
Most people don’t realize that as much as 90% of the medicine they use comes from China!


newswars--2020-05-05--In Defense of Landlords

In Defense of Landlords

Landlords have come under particular scrutiny in the last few months , especially with the coronavirus-induced shutdown of the economy .
Fannie Mae , Freddie Mac , and HUD suspended all evictions on their properties and several municipalities have done the same .
Petitions for a rent strike have also been floated amongst several advocacy groups .
These measures mostly have to do with the coronavirus and government ’ s power grab during it , but a more general hostility still exists .
The puzzling popularity of Marxism , even if muted by its continuous failures , is also still @ @ @ @ @ @ @ certainly gotten more vocal about its disdain for landlords recently .
One group called People ’ s Action has called for a “ National Homes Guarantee ” that would “ decommodify ” real estate by “ taxing the appreciation of privately owned homes.
” An even more radical group , Landlord Euthanization , even has Mao Zedong ( the man responsible for more deaths than any other person in world history ) as its avatar .
To sum up these sentiments , we can quote the utterly mundane , yet popular Twitter user @ @ @ @ @ @ @ provide ” housing .
Construction workers provide housing .
Landlords , in fact , do the opposite of providing housing .
They take the houses that were built for people to live in , hold them hostage for rent , and evict anyone who can ’ t pay .
While this has a ( small ) ring of superficial truth to it , if you dig deeper , it becomes rather absurd .
After all , construction workers are paid a salary .
Does Existential Comics want these construction workers to be paid @ @ @ @ @ @ @ own the property as well ?
Or does he want the construction workers to forgo their salaries and simply take ownership of whatever percentage of the property they contributed to afterward ?
How many construction workers would even accept such an arrangement ?
And if some did , would they be allowed to charge rent to a tenant after the property has been built or is that still theft ?
Profits and the “ Labor Theory of Value ” Right off the bat , many seem to have a grossly inflated view of @ @ @ @ @ @ @ investments .
They forget or downplay how much property taxes , insurance , maintenance , landscaping , common area utilities , and the like cost .
And that ’ s before the mortgage , which most properties have .
According to CBRE , in 2019 the cap rate for infill multifamily properties was 5.11 and 5.37 for suburban multifamilies .
A cap rate is the percent return that a property would make with no debt , so a 5.11 percent and 5.37 percent return , respectively .
Although that beats inflation , it @ @ @ @ @ @ @ .
As far as residential home developers go , the average profit margin in 2019 was 7.6 percent .
This would amount to an 8.3 percent raise for each construction worker if they were given the entirety of the profit .
How many would want to wait until a house was entirely built and sold ( often over a year ) before receiving their wages in a lump sum , even if it was 8.3 percent more ?
And this really comes to the crux of the matter .
Anti-landlord radicals and Marxists @ @ @ @ @ @ @ theory of value .
As Existential Comics makes perfectly clear , Rent is theft .
Profit is theft .
Interest is theft .
Look , it isn ’ t complicated .
If you are making money that didn ’ t come from your own labor , then it is coming from someone else ’ s labor .
You are stealing their money .
Perhaps some of this mindset comes from the term “ landlord ” itself , which is an antiquated term from the Middle Ages .
Regardless , the assertion that “ @ @ @ @ @ @ @ course , false .
The labor theory of value itself is rather absurd .
Marx required that only “ socially necessary abstract labor ” be embodied in a commodity , but this is just window dressing .
Wouldn ’ t the social necessity of something be on a continuum from useless to extremely useful ?
Why would there be a hard break between “ socially necessary ” and “ socially unnecessary ” ?
Spending ten hours piling up dirt could be considered not “ socially necessary ” and thereby of no value .
@ @ @ @ @ @ @ comparing something of little value to something of much value .
For example , spending ten hours putting together a box would be considered “ socially necessary , ” and by this theory the box would embody ten hours of labor .
But would that box be worth twice as much a computer that took only five hours to build ?
By what possible means do we address how “ socially necessary ” different types of labor are and how valuable they should be considered ?
And if they are valued differently , @ @ @ @ @ @ @ is valued higher earn a higher wage ?
And regardless of their income , shouldn ’ t they be allowed to invest any money that they don ’ t need or want to use on consumption immediately ?
Quite obviously , the amount of labor put into a product is irrelevant to its value .
No one thinks this way when mulling over a purchase , because it ’ s superfluous to their decision .
The value of a product is its subjective value to the end buyer on the open market .
@ @ @ @ @ @ @ look at the landlord and see that he or she offers three things : Managerial oversight includes everything from hiring maintenance technicians and leasing agents , to coordinating financing and capital improvements , to formulating policies , procedures , and so on .
Of course , not all landlords do this .
Many exchange money for time and outsource this responsibility to a property management company .
Even still , the capitalist offers the latter two list items .
Although it is unfortunate to lose one ’ s job , a construction worker @ @ @ @ @ @ @ a project going under .
At worst , the worker simply stops making a wage .
A real estate investment—be it a new development or the acquisition of an existing building—can and often does lose money .
Although the average profit on a new development is 7.6 percent and the average return on a multifamily infill property with no loan is 5.2 percent per year , some profits are higher and some are lower .
And some , of course , are negative .
How many construction workers would take 8.3 percent more @ @ @ @ @ @ @ substantially less or even negative ?
There ’ s something in stock investing called a “ beta , ” which measures an individual stock ’ s volatility .
The higher its volatility , the lower its price .
Given that there is risk in an investment such as real estate , including the risk of it losing money ( as we saw en masse in 2008 ) , having a guaranteed salary is often a better bet .
Same goes for a tenant whose rent is not contingent on their lease ’ s @ @ @ @ @ @ @ but on the volatile performance of the property they live in .
Such an arrangement doesn ’ t require Marxist twitter users .
It ’ s actually rather mundane , and is referred to as a housing cooperative , in which individuals buy membership in the cooperative instead of a unit ( as in condos ) or the building itself .
The final point is time preference , which was alluded to above .
This was the nail that Eugen von Böhm-Bawerk put in the coffin of the Marxist theory of labor exploitation @ @ @ @ @ @ @ Once you accept the subjective theory of value , you actually realize the laborer is getting the value of everything he puts in because of the time difference between the value of the labor and the output he creates that is going to be sold in the future….The reason the worker accepts this arrangement is because he does not have the means to sustain himself through this production process .
That ’ s what the capitalist does .
He bears the burden of uncertainty…and has the means to provide wages to the worker @ @ @ @ @ @ @ This example plays perfectly with the construction workers , who would rather receive 91.7 percent of the value of the home in wages than wait for the property to be sold or rented and risk any volatility in price .
It also applies to renters who either have yet to acquire the savings to purchase a property or would prefer not to use their savings to do so .
In fact , many tenants will eventually become landlords after they ’ ve saved up enough to purchase investment properties .
just as many @ @ @ @ @ @ @ at least for residential properties , rental properties are still a heavily middle-class investment : in 2015 74.4 percent of rental properties were owned by individual investors and not corporations .
If an individual makes more income than they need , should we really demand that they consume it all ?
Obviously , they should be allowed to invest their savings in long-term projects .
In this way , a property owner could just as well have put their money in the stock market or in bonds as into real estate .
To @ @ @ @ @ @ @ effectively to completely socialize it and go fully communist .
The barbarism and totalitarianism of previous communist regimes is almost certain to come with such a decision .
There are plenty of bad landlords out there to be sure .
But then again , there are plenty of bad tenants , including “ professional tenants ” who try to game the system or those who simply do major damage to their units .
That being said , most landlords and most tenants are decent people .
The “ bad ones ” are usually @ @ @ @ @ @ @ and have a difficult time paying rent or affording necessary repairs .
And let ’ s not pretend like the government has a good track record in this department as disastrous housing projects such as Pruitt-Igoe and Cabrini-Green have clearly shown .
Every industry has good and bad actors , and property ownership is no different .
It ’ s an important segment of the economy that , if overly restricted by the government , will push needed capital away from construction , renovations , and the like .
Real estate development provides @ @ @ @ @ @ @ fulfills the higher time preferences of construction workers while landlording does the same for tenants .

Landlords have come under particular scrutiny in the last few months, especially with the coronavirus-induced shutdown of the economy. Fannie Mae, Freddie Mac, and HUD suspended all evictions on their properties and several municipalities have done the same. Petitions for a rent strike have also been floated amongst several advocacy groups.
These measures mostly have to do with the coronavirus and government’s power grab during it, but a more general hostility still exists. The puzzling popularity of Marxism, even if muted by its continuous failures, is also still around. And the Marxist left has certainly gotten more vocal about its disdain for landlords recently. One group called People’s Action has called for a “National Homes Guarantee” that would “decommodify” real estate by “taxing the appreciation of privately owned homes.” An even more radical group, Landlord Euthanization, even has Mao Zedong (the man responsible for more deaths than any other person in world history) as its avatar. To sum up these sentiments, we can quote the utterly mundane, yet popular Twitter user Existential Comics,
Landlords do not “provide” housing. Construction workers provide housing. Landlords, in fact, do the opposite of providing housing. They take the houses that were built for people to live in, hold them hostage for rent, and evict anyone who can’t pay.
While this has a (small) ring of superficial truth to it, if you dig deeper, it becomes rather absurd. After all, construction workers are paid a salary. Does Existential Comics want these construction workers to be paid a salary by the developer and then own the property as well? Or does he want the construction workers to forgo their salaries and simply take ownership of whatever percentage of the property they contributed to afterward?
How many construction workers would even accept such an arrangement?
And if some did, would they be allowed to charge rent to a tenant after the property has been built or is that still theft?
Profits and the “Labor Theory of Value”
Right off the bat, many seem to have a grossly inflated view of how much landlords actually make on their investments. They forget or downplay how much property taxes, insurance, maintenance, landscaping, common area utilities, and the like cost. And that’s before the mortgage, which most properties have.
According to CBRE, in 2019 the cap rate for infill multifamily properties was 5.11 and 5.37 for suburban multifamilies. A cap rate is the percent return that a property would make with no debt, so a 5.11 percent and 5.37 percent return, respectively. Although that beats inflation, it’s nothing to write home about.
As far as residential home developers go, the average profit margin in 2019 was 7.6 percent. This would amount to an 8.3 percent raise for each construction worker if they were given the entirety of the profit. How many would want to wait until a house was entirely built and sold (often over a year) before receiving their wages in a lump sum, even if it was 8.3 percent more?
And this really comes to the crux of the matter. Anti-landlord radicals and Marxists are relying on the thoroughly refuted labor theory of value. As Existential Comics makes perfectly clear,
Rent is theft. Profit is theft. Interest is theft. Look, it isn’t complicated. If you are making money that didn’t come from your own labor, then it is coming from someone else’s labor. You are stealing their money.
Perhaps some of this mindset comes from the term “landlord” itself, which is an antiquated term from the Middle Ages. Regardless, the assertion that “rent is theft” is, of course, false. The labor theory of value itself is rather absurd. Marx required that only “socially necessary abstract labor” be embodied in a commodity, but this is just window dressing. Wouldn’t the social necessity of something be on a continuum from useless to extremely useful? Why would there be a hard break between “socially necessary” and “socially unnecessary”?
Spending ten hours piling up dirt could be considered not “socially necessary” and thereby of no value. But the whole concept breaks down when comparing something of little value to something of much value. For example, spending ten hours putting together a box would be considered “socially necessary,” and by this theory the box would embody ten hours of labor. But would that box be worth twice as much a computer that took only five hours to build? By what possible means do we address how “socially necessary” different types of labor are and how valuable they should be considered? And if they are valued differently, shouldn’t the person whose labor is valued higher earn a higher wage? And regardless of their income, shouldn’t they be allowed to invest any money that they don’t need or want to use on consumption immediately?
Quite obviously, the amount of labor put into a product is irrelevant to its value. No one thinks this way when mulling over a purchase, because it’s superfluous to their decision. The value of a product is its subjective value to the end buyer on the open market.
What Landlords Provide
Returning to property owners, we can look at the landlord and see that he or she offers three things:
Managerial oversight Risk mitigation Time preference
Managerial oversight includes everything from hiring maintenance technicians and leasing agents, to coordinating financing and capital improvements, to formulating policies, procedures, and so on. Of course, not all landlords do this. Many exchange money for time and outsource this responsibility to a property management company.
Even still, the capitalist offers the latter two list items. Although it is unfortunate to lose one’s job, a construction worker doesn’t bear the risk of a project going under. At worst, the worker simply stops making a wage. A real estate investment—be it a new development or the acquisition of an existing building—can and often does lose money. Although the average profit on a new development is 7.6 percent and the average return on a multifamily infill property with no loan is 5.2 percent per year, some profits are higher and some are lower. And some, of course, are negative. How many construction workers would take 8.3 percent more on average knowing that it could be substantially less or even negative?
There’s something in stock investing called a “beta,” which measures an individual stock’s volatility. The higher its volatility, the lower its price. Given that there is risk in an investment such as real estate, including the risk of it losing money (as we saw en masse in 2008), having a guaranteed salary is often a better bet. Same goes for a tenant whose rent is not contingent on their lease’s terms as set by the market, but on the volatile performance of the property they live in. Such an arrangement doesn’t require Marxist twitter users. It’s actually rather mundane, and is referred to as a housing cooperative, in which individuals buy membership in the cooperative instead of a unit (as in condos) or the building itself.
The final point is time preference, which was alluded to above. This was the nail that Eugen von Böhm-Bawerk put in the coffin of the Marxist theory of labor exploitation. As G.P. Manish explains,
Once you accept the subjective theory of value, you actually realize the laborer is getting the value of everything he puts in because of the time difference between the value of the labor and the output he creates that is going to be sold in the future….The reason the worker accepts this arrangement is because he does not have the means to sustain himself through this production process. That’s what the capitalist does. He bears the burden of uncertainty…and has the means to provide wages to the worker while the production process is underway.
This example plays perfectly with the construction workers, who would rather receive 91.7 percent of the value of the home in wages than wait for the property to be sold or rented and risk any volatility in price. It also applies to renters who either have yet to acquire the savings to purchase a property or would prefer not to use their savings to do so. In fact, many tenants will eventually become landlords after they’ve saved up enough to purchase investment properties. just as many landlords were once tenants. Indeed, at least for residential properties, rental properties are still a heavily middle-class investment: in 2015 74.4 percent of rental properties were owned by individual investors and not corporations.
Conclusion
If an individual makes more income than they need, should we really demand that they consume it all? Obviously, they should be allowed to invest their savings in long-term projects. In this way, a property owner could just as well have put their money in the stock market or in bonds as into real estate. To eliminate the landlord from an economy is effectively to completely socialize it and go fully communist. The barbarism and totalitarianism of previous communist regimes is almost certain to come with such a decision.
There are plenty of bad landlords out there to be sure. But then again, there are plenty of bad tenants, including “professional tenants” who try to game the system or those who simply do major damage to their units. That being said, most landlords and most tenants are decent people. The “bad ones” are usually just those who fall on hard times and have a difficult time paying rent or affording necessary repairs.
And let’s not pretend like the government has a good track record in this department as disastrous housing projects such as Pruitt-Igoe and Cabrini-Green have clearly shown.
Every industry has good and bad actors, and property ownership is no different. It’s an important segment of the economy that, if overly restricted by the government, will push needed capital away from construction, renovations, and the like. Real estate development provides managerial oversight, risk mitigation, and fulfills the higher time preferences of construction workers while landlording does the same for tenants.


newswars--2020-05-05--The Marshall Plan Myth Lives On

The Marshall Plan Myth Lives On

We are constantly reminded by the managerial classes that foreign aid is crucial to lifting the developing world out of poverty .
With the magic wand of public spending , money is sent to the developing world in hopes of pushing these countries out of their economic stupor .
We ’ ve seen this story play out domestically when politicians call for wealth transfer programs with the purported intent of “ investing ” in economically beleaguered sections of America .
With the universalist ethos of American politics , inevitably the domestic redistributionist logic is taken to the international level .
@ @ @ @ @ @ @ in politicians ’ constant appeals to the Marshall Plan as a source of inspiration for pushing new foreign aid ventures .
The Marshall Plan refers to the economic recovery package sent to western European countries after World War II .
Per conventional wisdom , Europe ’ s ability to bounce back from the devastation wrought by World War II is largely attributable to the Marshall Plan ’ s disbursements of aid , which totaled more than $ 100 billion in 2018 dollars .
Using the western European foreign aid program as a template @ @ @ @ @ @ @ region to experiment on .
During a news conference at the 2017 G-20 summit , French president Emmanuel Macron was asked about the viability of a Marshall Plan for Africa .
In a surprisingly brusque manner , Macron threw cold water on the idea .
The French leader averred , “ The Marshall plan was a reconstruction plan , a material plan in a region that already had its equilibriums , its borders , and its stability .
The problems Africa faces are completely different , it is much deeper .
It is @ @ @ @ @ @ @ blunt commentary disappointed the journalist class , who were hoping to get a politically acceptable response .
Political commentators did not have to wait long .
When former United States Secretary of Housing and Urban Development Julian Castro Julian Castro ran for the 2020 presidential candidacy , one of his selling points was a Marshall Plan for Central America—a region notorious for its socioeconomic and political strife .
In the former 2020 Democratic Party candidate ’ s view , a Marshall Plan is the missing ingredient in getting Central America over the hump @ @ @ @ @ @ @ .
I previously noted that foreign aid is no silver bullet for the developing world .
As a matter of fact , foreign transfers can foster bad behavior and prop up regimes with long-standing records of corruption .
Macron was correct in his assessment of the Marshall Plan and why replicating it in Africa will not yield similar results .
Europe was already prosperous and institutionally stable before most of the continent was ravaged during World War II .
It was only a matter of rebuilding infrastructure and letting private actors return to @ @ @ @ @ @ @ the factors of production that had been destroyed during the war .
Strictly speaking , the Marshall Plan wasn ’ t working with a blank slate , and functioned as a reconstruction plan that nominally sought to restore the pre–World War II equilibrium in the region .
Europe already had enough know-how and capital accumulated in previous decades that it could work around the tragic circumstances of World War II and get back on its feet in no time .
Like most historical narratives of twentieth-century events , several key points tend to @ @ @ @ @ @ @ Contrary to what many court historians would have us believe , the Marshall Plan may have not been the sole cause of Europe ’ s success in the postwar period .
Historian Tom Woods has argued convincingly that the economic liberalization in countries such as West Germany facilitated robust economic growth more than the aid from the Marshall Plan .
West German minister of economic affairs Ludwig Erhard ’ s economic reforms , such as lifting price controls and ending rationing , contributed to Germany ’ s incredible comeback after World War II @ @ @ @ @ @ @ Greece , which received considerable aid on a per capita basis , witnessed more sluggish growth and didn ’ t really take off until aid was phased out .
Despite what college textbooks say , the lifting of wartime economic controls was the decisive factor behind many European countries ’ growth following World War II , not the Marshall Plan .
All things considered , foreign aid is a feel-good policy that strokes the egos of DC do-gooders but has suboptimal results in the real world—the one place politicians seem to be perpetually @ @ @ @ @ @ @ inherent to the region and the flawed nature of foreign aid , a Marshall Plan for Central America would not pan out the way that many of its boosters such as Julian Castro would have us believe .
Just look at the region ’ s corruption levels .
According to Transparency International ’ s 2019 Corruption Perception Index , El Salvador , Guatemala , Honduras , and Nicaragua are ranked 113th , 146th , 146th , and 161st , respectively , for overall levels of corruption .
On the Heritage Foundation ’ s @ @ @ @ @ @ @ Salvador , Guatemala , and Honduras are middle-of-the-road countries at best , ranked 90th , 73rd , and 93rd .
Nicaragua found itself in shoddy 113th place .
Sending the modern-day equivalent of a Marshall Plan to the aforementioned countries is asking for corruption to proliferate and the compounding of previous problems .
Central America does find itself in a bind , but it can look at other developing countries for inspiration .
For example , Panama has steadily become one of the more unheralded economic success stories in the last three decades @ @ @ @ @ @ @ its economy to trade and foreign investment .
Now Panama is being dubbed the Dubai of Central America .
Chile is another successful model for Central America to look at .
The Southern Cone country escaped the clutches of Marxism and became Latin America ’ s greatest economic miracle of the last century by adopting deregulatory measures , privatizing previously state-owned enterprises , and opening up trade .
Even Botswana , which is situated in a part of the world not known for its stability , freed itself from the typical stagnation that @ @ @ @ @ @ @ the rule of law , defending property rights , and opening up its economy , it has separated itself from its Sub-Saharan rivals , such as South Africa and Zimbabwe , both of which have witnessed their share of economic trials and tribulations , the latter being a poster child for hyperinflationary collapse .
When most developing countries have been buying into Keynesian or Marxist development ideas hook , line , and sinker , we should not be surprised when they continue languishing .
Intricate policy papers calling for tweaks in foreign aid @ @ @ @ @ @ @ idea of the developing world breaking out of its self-imposed shackles is not so far-fetched thanks to a select few countries that have broken from the interventionist norm .
The question is : Will their political elites ignore Western policy wonks ’ half-baked advice and embrace markets instead ?
The key to economic success is not a matter of technocratic rocket science .
Comedian Jane Bussman has spent years abroad in Africa trying to figure out how to alleviate the region ’ s poverty .
After witnessing the foreign aid racket firsthand , @ @ @ @ @ @ @ If you want to help a country that ’ s troubled , buy their s & *t. Do a three-day stopover , even , and spend spend spend .
Economist Joseph Salerno simplified Bussman ’ s observation : “ In other words , trade ( and investment ) and not aid ” will break the poverty cycle .
At this point , the developing world should take its chances by following the advice of comedians rather than that of haughty elites who do not understand the intricacies of wealth creation .
At least @ @ @ @ @ @ @ value creation .
The same can not be said about your typical IMF or USAID bureaucrat .

We are constantly reminded by the managerial classes that foreign aid is crucial to lifting the developing world out of poverty.
With the magic wand of public spending, money is sent to the developing world in hopes of pushing these countries out of their economic stupor. We’ve seen this story play out domestically when politicians call for wealth transfer programs with the purported intent of “investing” in economically beleaguered sections of America. With the universalist ethos of American politics, inevitably the domestic redistributionist logic is taken to the international level.
The mythos of foreign aid lives on in politicians’ constant appeals to the Marshall Plan as a source of inspiration for pushing new foreign aid ventures. The Marshall Plan refers to the economic recovery package sent to western European countries after World War II. Per conventional wisdom, Europe’s ability to bounce back from the devastation wrought by World War II is largely attributable to the Marshall Plan’s disbursements of aid, which totaled more than $100 billion in 2018 dollars.
Using the western European foreign aid program as a template, policymakers regularly search for the next region to experiment on. During a news conference at the 2017 G-20 summit, French president Emmanuel Macron was asked about the viability of a Marshall Plan for Africa. In a surprisingly brusque manner, Macron threw cold water on the idea. The French leader averred, “The Marshall plan was a reconstruction plan, a material plan in a region that already had its equilibriums, its borders, and its stability. The problems Africa faces are completely different, it is much deeper. It is ‘civilizational.’” Macron’s blunt commentary disappointed the journalist class, who were hoping to get a politically acceptable response.
Political commentators did not have to wait long. When former United States Secretary of Housing and Urban Development Julian Castro Julian Castro ran for the 2020 presidential candidacy, one of his selling points was a Marshall Plan for Central America—a region notorious for its socioeconomic and political strife. In the former 2020 Democratic Party candidate’s view, a Marshall Plan is the missing ingredient in getting Central America over the hump.
Allow me to express some skepticism. I previously noted that foreign aid is no silver bullet for the developing world. As a matter of fact, foreign transfers can foster bad behavior and prop up regimes with long-standing records of corruption. Macron was correct in his assessment of the Marshall Plan and why replicating it in Africa will not yield similar results. Europe was already prosperous and institutionally stable before most of the continent was ravaged during World War II. It was only a matter of rebuilding infrastructure and letting private actors return to the private sector to resuscitate many of the factors of production that had been destroyed during the war. Strictly speaking, the Marshall Plan wasn’t working with a blank slate, and functioned as a reconstruction plan that nominally sought to restore the pre–World War II equilibrium in the region. Europe already had enough know-how and capital accumulated in previous decades that it could work around the tragic circumstances of World War II and get back on its feet in no time.
Like most historical narratives of twentieth-century events, several key points tend to be omitted about the Marshall Plan. Contrary to what many court historians would have us believe, the Marshall Plan may have not been the sole cause of Europe’s success in the postwar period. Historian Tom Woods has argued convincingly that the economic liberalization in countries such as West Germany facilitated robust economic growth more than the aid from the Marshall Plan.
West German minister of economic affairs Ludwig Erhard’s economic reforms, such as lifting price controls and ending rationing, contributed to Germany’s incredible comeback after World War II. Other countries such as Austria and Greece, which received considerable aid on a per capita basis, witnessed more sluggish growth and didn’t really take off until aid was phased out. Despite what college textbooks say, the lifting of wartime economic controls was the decisive factor behind many European countries’ growth following World War II, not the Marshall Plan.
All things considered, foreign aid is a feel-good policy that strokes the egos of DC do-gooders but has suboptimal results in the real world—the one place politicians seem to be perpetually detached from. Due to institutional shortcomings inherent to the region and the flawed nature of foreign aid, a Marshall Plan for Central America would not pan out the way that many of its boosters such as Julian Castro would have us believe. Just look at the region’s corruption levels.
According to Transparency International’s 2019 Corruption Perception Index, El Salvador, Guatemala, Honduras, and Nicaragua are ranked 113th, 146th, 146th, and 161st, respectively, for overall levels of corruption. On the Heritage Foundation’s 2020 Index of Economic Freedom, El Salvador, Guatemala, and Honduras are middle-of-the-road countries at best, ranked 90th, 73rd, and 93rd. Nicaragua found itself in shoddy 113th place. Sending the modern-day equivalent of a Marshall Plan to the aforementioned countries is asking for corruption to proliferate and the compounding of previous problems.
Central America does find itself in a bind, but it can look at other developing countries for inspiration. For example, Panama has steadily become one of the more unheralded economic success stories in the last three decades due to its efforts to open up its economy to trade and foreign investment. Now Panama is being dubbed the Dubai of Central America. Chile is another successful model for Central America to look at. The Southern Cone country escaped the clutches of Marxism and became Latin America’s greatest economic miracle of the last century by adopting deregulatory measures, privatizing previously state-owned enterprises, and opening up trade. Even Botswana, which is situated in a part of the world not known for its stability, freed itself from the typical stagnation that marks the developing world. By embracing the rule of law, defending property rights, and opening up its economy, it has separated itself from its Sub-Saharan rivals, such as South Africa and Zimbabwe, both of which have witnessed their share of economic trials and tribulations, the latter being a poster child for hyperinflationary collapse.
When most developing countries have been buying into Keynesian or Marxist development ideas hook, line, and sinker, we should not be surprised when they continue languishing. Intricate policy papers calling for tweaks in foreign aid won’t cut it. The idea of the developing world breaking out of its self-imposed shackles is not so far-fetched thanks to a select few countries that have broken from the interventionist norm. The question is: Will their political elites ignore Western policy wonks’ half-baked advice and embrace markets instead?
The key to economic success is not a matter of technocratic rocket science. Comedian Jane Bussman has spent years abroad in Africa trying to figure out how to alleviate the region’s poverty. After witnessing the foreign aid racket firsthand, she came to the following conclusion:
If you want to help a country that’s troubled, buy their s&*t. Do a three-day stopover, even, and spend spend spend.
Economist Joseph Salerno simplified Bussman’s observation: “In other words, trade (and investment) and not aid” will break the poverty cycle. At this point, the developing world should take its chances by following the advice of comedians rather than that of haughty elites who do not understand the intricacies of wealth creation.
At least the comedians actually understand the concept of value creation. The same cannot be said about your typical IMF or USAID bureaucrat.


newswars--2020-05-05--Facing Economic Disaster, France Turns Against Globalism

Since mid-March , the French people have been coping with one of the strictest lockdowns in Europe .
Large gatherings have been banned , and schools , bars , restaurants , and all shops ( except for grocery stores ) have been closed .
Only “ essential ” trips outside home are allowed , and most businesses and factories have shut down .
The enforcement of rules has been heavy-handed : police made 13.5 million checks and issued more than eight hundred thousand fines in just the first month of confinement .
On April 13 , President Macron announced a @ @ @ @ @ @ @ by a very gradual reopening of activity , subject to strict social distancing rules .
As if this were not bad enough for a nose-diving economy , Macron also unveiled a stunning vision about the postcoronavirus world .
In this new world , France would regain independence over its agriculture , industry , health , and technology sectors while reinventing itself ideologically .
Thus , President Macron embraced the antiglobalist and protectionist agenda of the fast-rising populist parties .
What may seem like just a shrewd political maneuver is actually a desperate attempt @ @ @ @ @ @ @ model at any cost .
Hampered by massive government intervention , the French economy has not been able to maintain a competitive edge in the euro area or in the world .
The annual growth rate of GDP per capita has slowed to below 1 percent on average in the last two decades , lagging behind those of the US , Germany , and the euro area ( Graph 1 ) .
This is a stark decline from average annual growth rates of 3 percent in the 1970s and 2 percent in the @ @ @ @ @ @ @ productivity growth declined to about 0.5 percent in 2018 , below German and US rates ( OECD 2019 ) , due to a sharp deceleration of both capital accumulation and technological progress ( Graph 2 ) .
For the past twenty years , French living standards have risen more slowly than the euro area average , while high market inequality has been alleviated by hefty income redistribution ( IMF 2019 ) .
Average wages fell further behind US and German levels ( Graph 3 ) but were still growing above labor productivity ( @ @ @ @ @ @ @ s dismal growth performance , the evolution of wages and incomes would have been even more sluggish if they had not been propped up by a steady increase in both public and private indebtedness .
Since 1995 , France ’ s total debt has increased by a whopping 150 percent of GDP to reach a historic high of about 365 percent of GDP in 2018 .
The private sector originated about two-thirds of the increase and is now much more indebted than its counterparts in the US and Germany .
The significant loss @ @ @ @ @ @ @ and relocation of companies is another sign of France ’ s economic woes .
Due to the rise of China and other emerging markets , many advanced economies have lost global market share since the 1990s .
Yet France ’ s export market share shrank more rapidly than those of many peer countries , most notably Germany ( Graph 5 ) .
A large number of company relocations and increasing outward foreign direct investment ( FDI , Graph 6 ) hampered capital accumulation and labor productivity .
In order to afford to pay @ @ @ @ @ @ @ both companies and the public sector became more and more indebted .
The record low interest rates in the euro area made the debt accumulation look sustainable , but this debt spiral can not continue ad infinitum .
Prior to the euro , when France was inflating the money supply and prices relative to Germany , the French franc would depreciate versus the Deutsche mark , reducing the purchasing power of wages and other incomes in international terms .
With a relatively strong euro , bolstered by more competitive euro area countries , @ @ @ @ @ @ @ anymore .
As a result , France ’ s current account moved into deficit and its external debt surged from 100 percent of GDP in 2004 to 180 percent of GDP in 2018 .
Public spending grew relentlessly , from only 10 percent of GDP at the beginning of the twentieth century to 57 percent of GDP in 2019 , the highest level among Organisation of Economic Co-operation and Development ( OECD ) countries ( Graph 7 ) .
According to the International Monetary Fund ( IMF ) , France has built a @ @ @ @ @ @ @ percent of GDP on social payout programs ( 20 percent more than peers ) , due to very generous pensions , unemployment benefits , rent subsidies , and family and child allowances .
France also spends about 8 percent of GDP on a practically fully socialized health sector ( 15 percent more than peers ) and nearly 6 percent of GDP on education , again more than peers , but with less favorable outcomes .
The very large sector of state-owned enterprises ( SOEs ) draws about 5 percent of GDP in budget @ @ @ @ @ @ @ more than peers .
France can not collect enough revenues to cover its colossal amount of public spending despite a high level of taxation .
The budget has been in a deficit since 1974 , and public debt has increased fivefold , from 20 percent of GDP in 1980 to 100 percent of GDP in 2019 ( Graph 8 ) .
The tax burden on businesses and labor remains substantial .
At about 35 percent , France has the highest statutory corporate income tax rate in the OECD .
Social contributions collected from @ @ @ @ @ @ @ at about 12 percent of GDP ( OECD 2019 ) .
This fuels capital outflows and unemployment , reinforcing the vicious circle between anemic growth and debt accumulation .
The government ’ s heavy intervention in the economy goes beyond the large public sector , which redistributes more than half of GDP .
A myriad of rules and regulations encumber free initiative and employment .
According to France ’ s ranking in the 2019 Global Competitiveness Index , domestic competition is restricted by the distortive taxes and subsidies and high entry barriers in @ @ @ @ @ @ @ barriers reduce foreign competition .
Most important , labor market rigidity is very severe on account of costly layoffs , powerful trade unions , and a high minimum wage , which distort the pay-productivity ratio .
In terms of labor taxation , France “ achieved ” the dubious honor of ranking last out of 141 countries .
It is no surprise that the unemployment rate has stubbornly remained above 8 percent since the global financial crisis , whereas it dropped below 4 percent in the US and Germany .
President Macron ’ s @ @ @ @ @ @ @ the French economy has been entering a negative spiral of slowing growth and rapid accumulation of debt .
The generous welfare model is even less sustainable in a globalized economy , and radical free market reforms are necessary to reignite growth .
As social resistance to reforms has been unbreakable so far , Macron seems poised to use the COVID-19 crisis to protect France ’ s sclerotic welfare model from international competition .
At the same time he is also calling for debt mutualization in the euro area to reinflate the French debt @ @ @ @ @ @ @ economic strategy is very likely to fail .
First , the French plans are incompatible with the current architecture of the European Union .
The EU ’ s single market is built on the principle of businesses competing freely across the continent , limited state aid , and a common foreign trade policy .
France would need to convince all the other EU members to turn protectionist , including the more competitive ones , which may be almost impossible .
Similarly , the more thrifty members of the euro area are likely to @ @ @ @ @ @ @ mutualization .
On the other hand , the “ Green Deal , ” which tops the political agenda in Europe and potentially involves a carbon tax on imports , may provide a tailwind for President Macron ’ s endeavors .
Second , autarky and debt monetization , reminiscent of France ’ s mercantilist and statist tradition , initiated by Colbert in the seventeenth century , will only accelerate the economic decline .
As Rothbard argues reductio ad absurdum , protectionism can indeed ensure “ self-sufficiency.
” However this “ sufficiency ” comes at @ @ @ @ @ @ @ living attained with a higher labor input , because a hampered international division of labor reduces productivity .
The unemployment problem could be alleviated and nominal wages could increase if most goods and services had to be produced domestically and the money were primarily used at home , in particular if an inflationary policy were also pursued , as France seems to favor .
But prices would go up too , and real wages would plunge dramatically .
Moreover , in the absence of international trade and social cooperation , It would be @ @ @ @ @ @ @ to be strongly marked by violence and perpetual war.

Since mid-March, the French people have been coping with one of the strictest lockdowns in Europe.
Large gatherings have been banned, and schools, bars, restaurants, and all shops (except for grocery stores) have been closed. Only “essential” trips outside home are allowed, and most businesses and factories have shut down. The enforcement of rules has been heavy-handed: police made 13.5 million checks and issued more than eight hundred thousand fines in just the first month of confinement.
On April 13, President Macron announced a thirty-day prolongation of the lockdown, followed by a very gradual reopening of activity, subject to strict social distancing rules. As if this were not bad enough for a nose-diving economy, Macron also unveiled a stunning vision about the postcoronavirus world. In this new world, France would regain independence over its agriculture, industry, health, and technology sectors while reinventing itself ideologically. Thus, President Macron embraced the antiglobalist and protectionist agenda of the fast-rising populist parties. What may seem like just a shrewd political maneuver is actually a desperate attempt to save France’s inefficient welfare model at any cost.
Decades-Long Economic Decline
Hampered by massive government intervention, the French economy has not been able to maintain a competitive edge in the euro area or in the world. The annual growth rate of GDP per capita has slowed to below 1 percent on average in the last two decades, lagging behind those of the US, Germany, and the euro area (Graph 1). This is a stark decline from average annual growth rates of 3 percent in the 1970s and 2 percent in the 1980s. As a parallel, labor productivity growth declined to about 0.5 percent in 2018, below German and US rates (OECD 2019), due to a sharp deceleration of both capital accumulation and technological progress (Graph 2).
For the past twenty years, French living standards have risen more slowly than the euro area average, while high market inequality has been alleviated by hefty income redistribution (IMF 2019). Average wages fell further behind US and German levels (Graph 3) but were still growing above labor productivity (Graph 4). Given France’s dismal growth performance, the evolution of wages and incomes would have been even more sluggish if they had not been propped up by a steady increase in both public and private indebtedness. Since 1995, France’s total debt has increased by a whopping 150 percent of GDP to reach a historic high of about 365 percent of GDP in 2018. The private sector originated about two-thirds of the increase and is now much more indebted than its counterparts in the US and Germany.
Dwindling External Competitiveness
The significant loss of export market share, deindustrialization, and relocation of companies is another sign of France’s economic woes. Due to the rise of China and other emerging markets, many advanced economies have lost global market share since the 1990s. Yet France’s export market share shrank more rapidly than those of many peer countries, most notably Germany (Graph 5). A large number of company relocations and increasing outward foreign direct investment (FDI, Graph 6) hampered capital accumulation and labor productivity.
In order to afford to pay wages that are growing above productivity, both companies and the public sector became more and more indebted. The record low interest rates in the euro area made the debt accumulation look sustainable, but this debt spiral cannot continue ad infinitum. Prior to the euro, when France was inflating the money supply and prices relative to Germany, the French franc would depreciate versus the Deutsche mark, reducing the purchasing power of wages and other incomes in international terms. With a relatively strong euro, bolstered by more competitive euro area countries, this correction mechanism doesn’t function anymore. As a result, France’s current account moved into deficit and its external debt surged from 100 percent of GDP in 2004 to 180 percent of GDP in 2018.
Bloated Welfare State and Heavy Tax Burden
Public spending grew relentlessly, from only 10 percent of GDP at the beginning of the twentieth century to 57 percent of GDP in 2019, the highest level among Organisation of Economic Co-operation and Development (OECD) countries (Graph 7). According to the International Monetary Fund (IMF), France has built a huge welfare state by spending about 24 percent of GDP on social payout programs (20 percent more than peers ), due to very generous pensions, unemployment benefits, rent subsidies, and family and child allowances. France also spends about 8 percent of GDP on a practically fully socialized health sector (15 percent more than peers) and nearly 6 percent of GDP on education, again more than peers, but with less favorable outcomes. The very large sector of state-owned enterprises (SOEs) draws about 5 percent of GDP in budget support every year, 1.5 percentage points more than peers.
France cannot collect enough revenues to cover its colossal amount of public spending despite a high level of taxation. The budget has been in a deficit since 1974, and public debt has increased fivefold, from 20 percent of GDP in 1980 to 100 percent of GDP in 2019 (Graph 8). The tax burden on businesses and labor remains substantial. At about 35 percent, France has the highest statutory corporate income tax rate in the OECD. Social contributions collected from employers are the highest in the EU at about 12 percent of GDP (OECD 2019). This fuels capital outflows and unemployment, reinforcing the vicious circle between anemic growth and debt accumulation.
Overregulation
The government’s heavy intervention in the economy goes beyond the large public sector, which redistributes more than half of GDP. A myriad of rules and regulations encumber free initiative and employment. According to France’s ranking in the 2019 Global Competitiveness Index, domestic competition is restricted by the distortive taxes and subsidies and high entry barriers in the services sector. Relatively high nontariff barriers reduce foreign competition. Most important, labor market rigidity is very severe on account of costly layoffs, powerful trade unions, and a high minimum wage, which distort the pay-productivity ratio. In terms of labor taxation, France “achieved” the dubious honor of ranking last out of 141 countries. It is no surprise that the unemployment rate has stubbornly remained above 8 percent since the global financial crisis, whereas it dropped below 4 percent in the US and Germany.
Conclusions
President Macron’s dilemma is understandable. For several decades the French economy has been entering a negative spiral of slowing growth and rapid accumulation of debt. The generous welfare model is even less sustainable in a globalized economy, and radical free market reforms are necessary to reignite growth. As social resistance to reforms has been unbreakable so far, Macron seems poised to use the COVID-19 crisis to protect France’s sclerotic welfare model from international competition. At the same time he is also calling for debt mutualization in the euro area to reinflate the French debt bubble. But this new political and economic strategy is very likely to fail.
First, the French plans are incompatible with the current architecture of the European Union. The EU’s single market is built on the principle of businesses competing freely across the continent, limited state aid, and a common foreign trade policy. France would need to convince all the other EU members to turn protectionist, including the more competitive ones, which may be almost impossible. Similarly, the more thrifty members of the euro area are likely to oppose France’s call for debt mutualization. On the other hand, the “Green Deal,” which tops the political agenda in Europe and potentially involves a carbon tax on imports, may provide a tailwind for President Macron’s endeavors.
Second, autarky and debt monetization, reminiscent of France’s mercantilist and statist tradition, initiated by Colbert in the seventeenth century, will only accelerate the economic decline. As Rothbard argues reductio ad absurdum, protectionism can indeed ensure “self-sufficiency.” However this “sufficiency” comes at the cost of a lower standard of living attained with a higher labor input, because a hampered international division of labor reduces productivity. The unemployment problem could be alleviated and nominal wages could increase if most goods and services had to be produced domestically and the money were primarily used at home, in particular if an inflationary policy were also pursued, as France seems to favor. But prices would go up too, and real wages would plunge dramatically. Moreover, in the absence of international trade and social cooperation,
It would be almost inevitable for such an autistic world to be strongly marked by violence and perpetual war.


newswars--2020-05-05--Mayor of Nice Calls For “Health Passports” Giving Citizens Permission to Travel

The Mayor of Nice has called for citizens to be required to carry “ health passports ” if they wish to travel .
“ Christian Estrosi , the mayor of Nice , posted a letter on Facebook one day after ( Prime Minister Edouard ) Philippe unveiled plans to ease stay-at-home restrictions for the country that would start in May , these rules could limit a person ’ s travel distance to 62 miles from their home , ” reports Zero Hedge .
Estrosi says the passport would work by showing that the owner had tested negative for coronavirus within @ @ @ @ @ @ @ next layer of draconian control is likely to be people having to prove they are either immune to or have taken a vaccine for coronavirus in order to be allowed to exercise freedom of mobility or freedom of assembly .
As we previously reported , Germany is also considering mandating “ coronavirus immunity cards ” that would allow those who have developed antibodies to COVID-19 to have more freedom than the as-yet uninfected .
After being told to obey drastic lockdown and social distancing rules in order to get back to normal , @ @ @ @ @ @ @ will never get back to normal and that the “ new normal ” is relentless surveillance and state restrictions on basic freedoms .
Meanwhile , hundreds of thousands of people from foreign countries continue to land at European airports with little or no health screenings whatsoever .
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The Mayor of Nice has called for citizens to be required to carry “health passports” if they wish to travel.
“Christian Estrosi, the mayor of Nice, posted a letter on Facebook one day after (Prime Minister Edouard) Philippe unveiled plans to ease stay-at-home restrictions for the country that would start in May, these rules could limit a person’s travel distance to 62 miles from their home,” reports Zero Hedge.
Estrosi says the passport would work by showing that the owner had tested negative for coronavirus within the 48-hour period before travel.
The next layer of draconian control is likely to be people having to prove they are either immune to or have taken a vaccine for coronavirus in order to be allowed to exercise freedom of mobility or freedom of assembly.
As we previously reported, Germany is also considering mandating “coronavirus immunity cards” that would allow those who have developed antibodies to COVID-19 to have more freedom than the as-yet uninfected.
After being told to obey drastic lockdown and social distancing rules in order to get back to normal, the public is now being told they will never get back to normal and that the “new normal” is relentless surveillance and state restrictions on basic freedoms.
Meanwhile, hundreds of thousands of people from foreign countries continue to land at European airports with little or no health screenings whatsoever.
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newswars--2020-05-06--Cruz: Hollywood Is ‘Complicit’ In Chinese Censorship; Introduces Bill To Restrict Production

Senator Ted Cruz has introduced legislation that would see Hollywood productions severely limited if they are found to be bowing to Chinese censors .
Appearing on Fox News with Tucker Carlson Tuesday , Cruz charged that Hollywood is “ fully complicit ” in enabling Chinese censorship .
“ The problem of censorship is a massive problem within China .
China ’ s own censorship and coverup of this [ coronavirus ] pandemic helped produce a 257,000 deaths worldwide and when it comes to Hollywood , Hollywood is not an innocent bystander here.
” Cruz urged .
“ Hollywood works with @ @ @ @ @ @ @ willing over and over and over again , there ’ s so much money at stake.
” Cruz noted , explaining that studios regularly change production elements in order to please the communist state so they can make money in China .
The Senator gave examples of the recent Top Gun sequel , wherein China demanded the flags of Taiwan and Japan be removed from the lead character Maverick ’ s flight jacket .
“ What are we saying to the world ?
That Maverick is afraid of the Chinese communists ?
” @ @ @ @ @ @ @ in regards to the musical film “ Bohemian Rhapsody , ” China demanded that all reference to the Queen ’ s lead singer , Freddie Mercury ’ s homosexuality be purged entirely .
“ Pause to think about how many Hollywood producers like to virtue signal about their courage and free speech and artistic integrity and yet they happily try to edit out the fact that Freddie Mercury is gay ?
” Cruz proclaimed , adding “ It ’ s extraordinary.
” The Senator continued , noting “ I pointed this out the @ @ @ @ @ @ @ attacking me : ‘ How dare Ted Cruz stand up and fight for gay rights.
’ Listen , I am against censorship and against Chinese communists and by the way , I believe in truth , ” Cruz said .
Cruz ’ s bill , called “ The Stopping Censorship , Restoring Integrity , Protecting Talkies Act ” ( SCRIPT Act ) , would ban Hollywood productions from using “ Pentagon assets ” if they enable Chinese censorship .
Many big budget action films require facilitation with the Defense Department to use the @ @ @ @ @

Senator Ted Cruz has introduced legislation that would see Hollywood productions severely limited if they are found to be bowing to Chinese censors.
Appearing on Fox News with Tucker Carlson Tuesday, Cruz charged that Hollywood is “fully complicit” in enabling Chinese censorship.
“The problem of censorship is a massive problem within China. China’s own censorship and coverup of this [coronavirus] pandemic helped produce a 257,000 deaths worldwide and when it comes to Hollywood, Hollywood is not an innocent bystander here.” Cruz urged.
“Hollywood works with the Chinese censors; Hollywood has been willing over and over and over again, there’s so much money at stake.” Cruz noted, explaining that studios regularly change production elements in order to please the communist state so they can make money in China.
The Senator gave examples of the recent Top Gun sequel, wherein China demanded the flags of Taiwan and Japan be removed from the lead character Maverick’s flight jacket.
“What are we saying to the world? That Maverick is afraid of the Chinese communists?” Cruz posited.
Cruz also highlighted how in regards to the musical film “Bohemian Rhapsody,” China demanded that all reference to the Queen’s lead singer, Freddie Mercury’s homosexuality be purged entirely.
“Pause to think about how many Hollywood producers like to virtue signal about their courage and free speech and artistic integrity and yet they happily try to edit out the fact that Freddie Mercury is gay?” Cruz proclaimed, adding “It’s extraordinary.”
The Senator continued, noting “I pointed this out the other day and several LGBT magazines began attacking me: ‘How dare Ted Cruz stand up and fight for gay rights.’ Listen, I am against censorship and against Chinese communists and by the way, I believe in truth,” Cruz said.
Cruz’s bill, called “The Stopping Censorship, Restoring Integrity, Protecting Talkies Act” (SCRIPT Act), would ban Hollywood productions from using “Pentagon assets” if they enable Chinese censorship.
Many big budget action films require facilitation with the Defense Department to use the latest equipment and technology .
“We aren’t going to facilitate Chinese communist censorship,” Cruz asserted.


newswars--2020-05-06--US & UK Intelligence Warn China Is Trying To Hack Bio-Labs Working ON COVID Research

Intelligence agencies in the UK and the US have jointly warned that ‘ rival states ’ are conducting ‘ malicious cyber campaigns ’ against universities , pharmaceuticals and research institutes carrying out research on the coronavirus .
A joint advisory published Tuesday by the UK ’ s GCHQ run National Cyber Security Centre ( NCSC ) , and the US Cybersecurity and Infrastructure Security Agency ( CISA ) , stressed that healthcare workers and medical research officials should up their security amid hacking attempts .
The briefing did not specifically name any countries involved in the cyber-attacks , However , @ @ @ @ @ @ @ to be behind the attempts to steal information .
The warning described “ advanced persistent threat ” ( APT ) groups carrying out the cyber attacks on medical research and healthcare organisations as well as local government “ to collect bulk personal information , intellectual property and intelligence that aligns with national priorities ” .
The intelligence agencies warned that the attacks consisted of “ password spraying ” campaigns , which involved repeatedly hitting a target with common passwords in the hope that one unlock sensitive systems .
Sky News reports that institutes @ @ @ @ @ @ @ NHS and pharmaceutical companies , have not successfully been infiltrated , but attacks on research centres elsewhere have been successful .
A security source last night told the Daily Mail that hackers had targeted the ground-breaking research programme at Oxford University .
British foreign secretary Dominic Raab described the attacks as “ particularly venal ” owing to the fact that they specifically targeted international and national organisations responding to the coronavirus outbreak .
“ There are various objectives and motivations that lie behind these attacks , from fraud on the one hand to @ @ @ @ @ @ @ government ’ s daily briefing Tuesday .
“ We expect this kind of predatory criminal behaviour to continue and evolve over the coming weeks and months ahead , and we are taking a range of measures to tackle the threat.
” he added .
“ We ’ re absolutely determined to defeat coronavirus , and also to defeat those trying to exploit the situation for their own nefarious ends.
” Raab further urged .
The news also dovetails with a warning that states such as China could easily shut down entire western cities @ @ @ @ @ @ @ surveillance systems .
The Brookings Institution in Washington published a paper in April written by three leading US academics in the fields of science , tech and law warning that “ The issue of malicious use is paramount .
Trolls could sow chaos for the malicious pleasure of it .
Protesters could trigger panic as a form of civil disobedience .
A foreign intelligence operation could shut down an entire city by falsely reporting COVID-19 infections in every neighborhood .
There are a great many vulnerabilities underlying this platform that have still yet @ @ @ @ @

Intelligence agencies in the UK and the US have jointly warned that ‘rival states’ are conducting ‘malicious cyber campaigns’ against universities, pharmaceuticals and research institutes carrying out research on the coronavirus.
A joint advisory published Tuesday by the UK’s GCHQ run National Cyber Security Centre (NCSC), and the US Cybersecurity and Infrastructure Security Agency (CISA), stressed that
healthcare workers and medical research officials should up their security amid hacking attempts.
The briefing did not specifically name any countries involved in the cyber-attacks, However, China, Russia and Iran are thought to be behind the attempts to steal information.
The warning described “advanced persistent threat” (APT) groups carrying out the cyber attacks on medical research and healthcare organisations as well as local government “to collect bulk personal information, intellectual property and intelligence that aligns with national priorities”.
The intelligence agencies warned that the attacks consisted of “password spraying” campaigns, which involved repeatedly hitting a target with common passwords in the hope that one unlock sensitive systems.
Sky News reports that institutes in the UK, such as the NHS and pharmaceutical companies, have not successfully been infiltrated, but attacks on research centres elsewhere have been successful.
A security source last night told the Daily Mail that hackers had targeted the ground-breaking research programme at Oxford University.
British foreign secretary Dominic Raab described the attacks as “particularly venal” owing to the fact that they specifically targeted international and national organisations responding to the coronavirus outbreak.
“There are various objectives and motivations that lie behind these attacks, from fraud on the one hand to espionage,” Raab said at the government’s daily briefing Tuesday.
“We expect this kind of predatory criminal behaviour to continue and evolve over the coming weeks and months ahead, and we are taking a range of measures to tackle the threat.” he added.
“We’re absolutely determined to defeat coronavirus, and also to defeat those trying to exploit the situation for their own nefarious ends.” Raab further urged.
The news also dovetails with a warning that states such as China could easily shut down entire western cities by hijacking proposed coronavirus contact-tracing apps and surveillance systems.
The Brookings Institution in Washington published a paper in April written by three leading US academics in the fields of science, tech and law warning that “The issue of malicious use is paramount. Trolls could sow chaos for the malicious pleasure of it. Protesters could trigger panic as a form of civil disobedience. A foreign intelligence operation could shut down an entire city by falsely reporting COVID-19 infections in every neighborhood. There are a great many vulnerabilities underlying this platform that have still yet to be explored.”


newswars--2020-05-06--US Universities Now Shutting Down ‘Arms Of China’s Propaganda Machine’

Another US university has announced that it is shutting down its Confucius Institute , the organization which is overseen by the Chinese Ministry of Education , amid charges that the ‘ cultural exchange ’ programs are being used by the communist state to indoctrinate Americans and spread Chinese propaganda .
The University of California-Davis is the latest of a string of Universities to axe the Confucius Institute , after heightened concerns among US officials that China is abusing the program .
Chancellor Gary S. May wrote a letter on April 28 to the Hanban division of China ’ s Ministry @ @ @ @ @ @ @ The time has come for us to consider new pathways by building on cultural exchange programs like those our Confucius Institute has fostered , ” May wrote .
Speaking to Campus Reform , UC-Davis News and Media Relations Specialist Julia Ann Easley said that “ The Hanban division of China ’ s Ministry of Education announced at the annual meeting of the Confucius Institutes in December that there would be a renewed focus on language instruction.
” “ The focus of the Confucius Institute at UC Davis has been Chinese food and beverage @ @ @ @ @ @ @ instruction .
Because of this , UC Davis is going to explore other ways of working with international universities.
” Easley added .
UC-Davis student Michael Gofman commented that the closure of the program after 7 years is “ absolutely a benefit , ” because “ The Confucius Institute is an arm of the Chinese government ’ s propaganda machine.
” “ The fact that it does dumpling workshops and language training does not change that.
” he added .
The stated aim of the Confucius Institutes is to promote Chinese language and @ @ @ @ @ @ @ , and facilitate cultural exchanges .
However , US intelligence agencies have previously labeled the organisations as a national security threat , and many universities have since trashed the programs .
In January , the Department of Justice also arrested a professor at Harvard , as well as two Chinese nationals for reportedly acting as foreign agents .
The problem extends beyond the US , with European officials also expressing concerns that China is using the programs to infiltrate and spy on other countries .
Some nations have outright banned the Chinese from @ @ @ @ @ @ @ .
LONDON , Oct. 22 , 2015– Chinese President Xi Jinping , right , and British Prince Andrew , the Duke of York , unveil the 1,000th Confucius Classroom , the Confucius Classroom at Hautlieu School , in London , Britain , Oct. 22 , 2015 .
Xi attended the opening ceremony of an annual conference of UK Confucius Institutes and Confucius Classrooms in London on Thursday .
( Xinhua/Pang Xinglei via Getty Images ) German Chancellor Angela Merkel ( R ) and XU Lin ( L ) , Director General of Hanban @ @ @ @ @ @ @ Headquarters , stand at the opening event of the Confucius Institute Stralsund in Stralsund , Germany , 30 August 2016 .
The city of Stralsund is now place of residence of a branch of the Chinese Confucius Insitute .
( Photo by Stefan Sauer/picture alliance via Getty Images ) The UC-Davis closure also comes as the US government vows to hold China accountable for withholding information on and profiting from the coronavirus outbreak .
Congressional Republicans have also expressed concerns that China is attempting to hinder US coronavirus research through such infiltration of @ @ @ @ @ @ @ seven House committees delivered a letter to Education Secretary Betsy DeVos this week that warns Beijing is indoctrinating American students .
“ China has strategically invested in U.S. academia to attempt to steal confidential information and technology from U.S. companies , and even the U.S. government , ” the lawmakers state in the letter , pointing to a 2018 report from the Hoover Institution identifying upwards of 110 Confucius Institutes operating on American colleges to facilitate China ’ s espionage and theft of intellectual property .
The Department of Education also instigated an @ @ @ @ @ @ @ determine if they had failed to disclose foreign funding .
In February , the department announced it has uncovered $ 6.5 billion so far in undisclosed foreign funding from Saudi Arabia , Qatar , China and Russia .
The investigation has since been expanded to include Harvard and Yale .
Last year President Donald Trump signed the 2019 National Defense Authorization Act which proposed an ultimatum to universities receiving financial assistance from the Pentagon : close the Chinese propaganda center on campus or lose funding .
Since that time , at least 49 @ @ @ @ @ @ @ according to Human Rights Watch .

Another US university has announced that it is shutting down its Confucius Institute, the organization which is overseen by the Chinese Ministry of Education, amid charges that the ‘cultural exchange’ programs are being used by the communist state to indoctrinate Americans and spread Chinese propaganda.
The University of California-Davis is the latest of a string of Universities to axe the Confucius Institute, after heightened concerns among US officials that China is abusing the program.
Chancellor Gary S. May wrote a letter on April 28 to the Hanban division of China’s Ministry of Education announcing the decision.
“The time has come for us to consider new pathways by building on cultural exchange programs like those our Confucius Institute has fostered,” May wrote.
Speaking to Campus Reform, UC-Davis News and Media Relations Specialist Julia Ann Easley said that “The Hanban division of China’s Ministry of Education announced at the annual meeting of the Confucius Institutes in December that there would be a renewed focus on language instruction.”
“The focus of the Confucius Institute at UC Davis has been Chinese food and beverage culture. It has not offered language instruction. Because of this, UC Davis is going to explore other ways of working with international universities.” Easley added.
UC-Davis student Michael Gofman commented that the closure of the program after 7 years is “absolutely a benefit,” because “The Confucius Institute is an arm of the Chinese government’s propaganda machine.”
“The fact that it does dumpling workshops and language training does not change that.” he added.
The stated aim of the Confucius Institutes is to promote Chinese language and culture, support local Chinese teaching internationally, and facilitate cultural exchanges. However, US intelligence agencies have previously labeled the organisations as a national security threat, and many universities have since trashed the programs.
In January, the Department of Justice also arrested a professor at Harvard, as well as two Chinese nationals for reportedly acting as foreign agents.
The problem extends beyond the US, with European officials also expressing concerns that China is using the programs to infiltrate and spy on other countries. Some nations have outright banned the Chinese from setting up the institutes at their universities.
LONDON, Oct. 22, 2015– Chinese President Xi Jinping, right, and British Prince Andrew, the Duke of York, unveil the 1,000th Confucius Classroom, the Confucius Classroom at Hautlieu School, in London, Britain, Oct. 22, 2015. Xi attended the opening ceremony of an annual conference of UK Confucius Institutes and Confucius Classrooms in London on Thursday. (Xinhua/Pang Xinglei via Getty Images)
German Chancellor Angela Merkel (R) and XU Lin (L), Director General of Hanban, Chief Executive of the Confucius Institute Headquarters, stand at the opening event of the Confucius Institute Stralsund in Stralsund, Germany, 30 August 2016. The city of Stralsund is now place of residence of a branch of the Chinese Confucius Insitute.(Photo by Stefan Sauer/picture alliance via Getty Images)
The UC-Davis closure also comes as the US government vows to hold China accountable for withholding information on and profiting from the coronavirus outbreak.
Congressional Republicans have also expressed concerns that China is attempting to hinder US coronavirus research through such infiltration of US universities.
Ranking GOP members across seven House committees delivered a letter to Education Secretary Betsy DeVos this week that warns Beijing is indoctrinating American students.
🚨🚨🚨 NEW: 7 top House committee Republicans announce probe into China’s infiltration of U.S. colleges “We cannot allow a dangerous communist regime to buy access to our institutions of higher education, plain and simple” – @Jim_Jordan More➡ https://t.co/GwgpkDFkhn pic.twitter.com/C3JQbJIGyJ — Oversight Committee Republicans (@GOPoversight) May 4, 2020
“China has strategically invested in U.S. academia to attempt to steal confidential information and technology from U.S. companies, and even the U.S. government,” the lawmakers state in the letter, pointing to a 2018 report from the Hoover Institution identifying upwards of 110 Confucius Institutes operating on American colleges to facilitate China’s espionage and theft of intellectual property.
The Department of Education also instigated an investigation into several universities last year to determine if they had failed to disclose foreign funding.
In February, the department announced it has uncovered $6.5 billion so far in undisclosed foreign funding from Saudi Arabia, Qatar, China and Russia. The investigation has since been expanded to include Harvard and Yale.
Last year President Donald Trump signed the 2019 National Defense Authorization Act which proposed an ultimatum to universities receiving financial assistance from the Pentagon: close the Chinese propaganda center on campus or lose funding. Since that time, at least 49 schools have closed their Confucius Institute, according to Human Rights Watch.