By Andy Kessler – A superb short lesson in basic economics Read More
Congress Can’t Enact a Chicken A
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Russia and China Eye a Retreating U.S. B
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By John Bolton – Over the longer term, Beijing and Moscow enjoy a natural division of labor in threatening America and its allies, in three distinct theaters: China on its periphery’s long arc from Japan across Southeast Asia out to India and Pakistan; Russia in Eastern and Central Europe; and the Russian-Iranian-Chinese entente cordiale in the Middle East. U.S. planning must contemplate many threats arising simultaneously across these and other theaters. This underscores how strained our defense capabilities are to protect our far-flung interests, especially given the unprecedented domestic spending demands President Biden is now making. Read More
Congress Needs to Rein In a Too-Powerful Federal Reserve AA
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By Judy Shelton – Our nation’s central bank has become too prominent, too political and too powerful. The Fed’s ability to purchase massive quantities of U.S. Treasury securities is the dominant factor influencing interest rates across the board and thus the valuation of financial assets. The entire term structure of bond yields reflecting the relationship between short-term and long-term rates is keyed to the 10-year Treasury note rate. What would that benchmark yield reveal if Fed purchases weren’t distorting the market?
The Fed’s prominence not only undermines supply-and-demand interactions for accurately pricing the cost of investment capital; it also compromises the relationship between fiscal and monetary policy. The Fed’s accommodation of deficit spending by lawmakers poses a conflict of interest with political implications. Besides ensuring that the government’s interest expense for servicing debt is reduced, the Fed remits back to Treasury the earnings on its own holdings. Read More
Chips Are U.S. Achilles Heel A
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By Gerald F. Seib – Yet both the economic vulnerability and geopolitical risk are more acute than that picture makes it appear. A single company in Taiwan, Taiwan Semiconductor Manufacturing Co. , makes almost all of the world’s most sophisticated chips. It is the world’s most important semiconductor company, and its 11th most valuable one.
And what if that Taiwanese company becomes a Chinese company? Chinese President Xi Jinping this month repeated his intention to complete “reunification” with Taiwan, and the head of U.S. forces in the Pacific recently warned China could invade Taiwan by 2027 to do exactly that. While other military leaders don’t think the Chinese timetable for action is that aggressive, a takeover of Taiwan would put China in an overwhelmingly dominant position in the semiconductor business, at a time when computer chips are becoming a strategic commodity just as important as oil became in the 1970s and 1980s.
In short, the specter of semiconductor dominance could provide China an added incentive to move on Taiwan, and the U.S. an added incentive to stop China from doing so. It’s no exaggeration to say that semiconductors have the potential to cause international tension and turmoil—and even, in an extreme scenario, war. Read More
What Children Should Be Learning AA
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By Wilfred M. McClay and Kathleen O’Toole – Parents are appalled by the reduction of American history to an endless exercise in identity politics and moral accusation. They fear that the study of the American past — rather than providing the young with a sense of something larger than themselves — has become something deeply negative: a way of separating us from our past and a weapon used to sow shame and resentment, and even hatred and despair, in the hearts of tomorrow’s citizens. This is a recipe for disaster. But it doesn’t have to be this way. Good, honest curriculum is not only possible; it’s come to pass… Read More