Ecuador’s Lasso proposes economic reforms to reactivate economy

Ecuador’s President Guillermo Lasso speaks during the annual gathering in New York City for the 76th session of the United Nations General Assembly (UNGA) in New York, U.S., September 21, 2021. Spencer Platt/Pool via REUTERS

September 24, 2021

By Alexandra Valencia

BOGOTA (Reuters) – Ecuadorean president Guillermo Lasso on Friday proposed new labor regulations and a tax reform targeting some $700 million in new revenue as part of a broad economic growth plan that will require approval from a skeptical legislature.

The oil exporting nation’s economy has for years struggled under low crude prices, and the pandemic left 5.8 million people without permanent employment. Lasso this year renegotiated a $6.5 billion financing agreement with the International Monetary Fund in order to speed up disbursements.

The labor and tax reforms will have to be approved by the National Assembly, where Lasso’s party does not have a majority. Lawmakers have already asked Lasso’s administration to make changes to the proposed budget for 2021.

“The proposal I am leaving in your hands today is of an urgent economic nature, and it is unpostponable,” said Lasso upon delivering the “Creating Opportunities” plan to the legislature. “What we are presenting is reasonable.”

The new labor regulations would seek to stimulate telecommuting and allow work hours to be distributed in different ways, according to the plan. Unions have complained that the changes could undermine workers’ rights, which Lasso denies.

The plan seeks an increase in income tax deductions for citizens who earn more than $24,000 annually, which Lasso says would affect 3.5% of the economically active population. It would also create a two-year tax for people with more than $500,000 in assets and a one-time tax on companies with more than $1 million in assets that turned a profit in 2020.

(Reporting by Alexandra Valencia; Writing by Brian Ellsworth; Editing by Sam Holmes)

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Lifting International Travel Restrictions Will Boost US Economy: Commerce Chief

WASHINGTON—U.S. Commerce Secretary Gina Raimondo said on Thursday that the decision by the Biden administration to lift international travel restrictions in early November will be a boost to the U.S. economy, especially for tourist destinations like New York and for business travel.

Raimondo said the decision announced Monday to allow fully vaccinated foreign nationals to fly to the United States “is huge. I think it will really be a boost to our economy, it will certainly be a boost to travel, tourism, hospitality.” To address COVID-19 concerns, the U.S. has barred most foreign nationals from coming to the United States who have recently been in 33 countries including China, South Africa, Brazil, India and much of Europe.


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Goldilocks Is Dying

Given today’s high debt ratios, supply-side risks, and ultra-loose monetary and fiscal policies, the rosy scenario that is currently priced into financial markets may turn out to be a pipe dream. Over the medium term, a variety of persistent negative supply shocks could turn today’s mild stagflation into a severe case.

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Joy Reid Blasts Republicans Over Debt Ceiling, Says They’ll Tank The Economy Just To Deny Democrats A Win

MSNBC’s Joy Reid launched a tirade against Republicans in Congress for refusing to vote to raise the debt ceiling.

The host of The ReidOut show targeted Republican Sen. Mitch McConnell of Kentucky on Wednesday, claiming that he “doesn’t actually care what happens to Americans,” and that Republicans are using the debt problem as a way to discredit Democrats. (RELATED: Democrats Unveil Government Funding, Debt Ceiling Bill That GOP Has Vowed To Oppose)

Reid asserted that the Republicans’ unwillingness to raise the debt ceiling would devastate the economy.

“Confronted with that reality, Republicans say that of course the U.S. can’t default on its loans,” Reid said. “But they refuse to help Democrats in any way.”

She then claimed that McConnell previously declared that defaulting would lead to “disaster,” but had changed his attitude to, “well, Republicans actually have no role to play in seeing the country stay afloat.”

“Well, it’s clear it’s a straight-up dereliction of duty,” Reid continued. “The thing is, Mitch McConnell doesn’t actually care what happens to Americans. He sees an opportunity here for Democrats to be forced to go it alone on increasing the debt limit so that he can run ads against them and get that Senate Majority Leader gavel back. That is really all that he cares about. We already saw the beginning of it today, with Republicans saying that this was the consequence of a liberal spending spree.”

Reid decried that accusation as a lie, and said that during former President Donald Trump’s time in office, Democrats had assisted Republicans in raising the debt ceiling.

The debt ceiling is the amount of money Congress authorizes the federal government to borrow to pay its debts.

The House passed legislation Tuesday evening to increase the debt ceiling. Senate Minority Leader Mitch McConnell vowed to block the bill because of Democrats’ attempt to push a $3.5 trillion budget package.

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Lebanon Economic Crisis: Currency Board Would Stabilize Economy

(johan10/Getty Images)

A currency board would stabilize the Lebanese economy.

After 13 months in limbo, Lebanon finally formed a government on September 10. It is led by Najib Mikati, a billionaire and veteran politician. As prime minister, Mikati faces the daunting task of bringing Lebanon’s economy back from the dead.

Lebanon’s death spiral began two years ago. After being pegged to the U.S. dollar at a rate of 1,507.5 for 22 years, the Lebanese pound’s peg broke, and a currency crisis erupted. As the pound plunged — eventually shedding 92 percent of its value against the dollar — inflation surged. In late July 2020, Lebanon became the first country in the Middle East ever to experience a bout of hyperinflation, with the monthly inflation rate hitting 53 per cent. Caught in the midst of the currency storm, banks became insolvent, and the economy collapsed. In a futile attempt to keep a lifeline of imports flowing, the central bank devised a concoction of multiple exchange rates. This massive import subsidy scheme drained over half of the central bank’s foreign-exchange reserves in two short years. What should Mikati do?

He could proceed conventionally by dusting off the government’s April 2020 recovery plan. Its centerpiece was a more flexible exchange-rate regime coupled with capital controls and foreign loans accompanied by conditionality. But when introduced during currency crises in countries that suffer from weak institutions and endemic anomie, such systems have a poor record. In Lebanon, failure would be guaranteed, mirroring Argentina’s recent experiences.

The only option that would bring Lebanon’s currency crisis to an abrupt halt is a currency board. Unlike Lebanon’s old pegged exchange-rate regime or Argentina’s similar ill-fated Convertibility System, which lasted from 1991 until it collapsed in 2001, a currency board issues notes and coins convertible on demand into a foreign anchor currency at a fixed rate of exchange. It is required to hold anchor-​currency reserves equal to 100 percent of its monetary liabilities.

A currency board has no discretionary monetary powers and cannot issue credit. It has an exchange-​rate policy but no monetary policy. Its sole function is to exchange the domestic currency it issues for an anchor currency at a fixed rate. A currency board’s currency is a clone of its anchor currency.

A currency board requires no preconditions and can be installed rapidly. Government finances, state-owned enterprises, and trade need not be reformed before a currency board can issue money. Currency boards have existed in some 70 countries. None has failed.

The most notable modern currency board is Hong Kong’s, installed in 1983 to combat exchange‐-rate instability. After the fourth round of Sino‐​British talks on Hong Kong’s future, market volatility reached epic levels. Between July and September 24, a date known as Black Saturday, the Hong Kong dollar shed 24 percent of its value against the greenback. Hong Kong’s economy was in a state of panic. The chaos ended abruptly on October 15 with the establishment of the currency board. The board hasn’t missed a beat since, weathering a myriad of crises — even during Hong Kong’s recent political troubles.

Estonia took less than a month to establish its currency board in June 1992. At that time, Estonia’s currency was the hyperinflating Russian ruble, and the newly independent Baltic state hadn’t yet approved a post‐​Soviet constitution. The currency board was installed, the Estonian kroon was issued, and inflation was extinguished instantly. After expressing initial skepticism, the International Monetary Fund heaped praise on Estonia’s currency board.

In 1994, neighboring Lithuania adopted a currency board to cut off the central bank’s funding of government expenditures. The currency board did in fact impose fiscal discipline. Subsequently, the IMF praised Lithuania’s turnaround and economic performance as one of the best in the European Union, which it joined in 2004.

In 1997, Bulgaria faced raging hyperinflation and banking crises. With the currency board installed in July, hyperinflation stopped immediately. By 1998 the banking system was solvent, money-​market interest rates had plunged from triple digits to an average of 2.4 percent, a massive fiscal deficit turned into a surplus, a deep depression became economic growth, and Bulgaria’s foreign-exchange reserves more than tripled. The IMF gave the currency board rave reviews. Today, thanks to its currency board, Bulgaria has the second lowest debt-​to-​GDP ratio in the EU, behind Estonia.

Bosnia-Herzegovina installed a currency board in 1997, as mandated by the Dayton/​Paris Peace Agreement ending the civil war. In the middle of ethnic strife and economic ruin, the currency board did what currency boards do: It established stability, a prerequisite for rebuilding.

The only way to end Lebanon’s nightmare and to succeed politically is for Mikati to establish a currency board. Indeed, it’s always better for one’s reputation to succeed unconventionally than fail conventionally.

Jacques de Larosière is a former managing director of the International Monetary Fund, governor of the Banque de France, and president of the European Bank for Reconstruction and Development. Steve H. Hanke is a professor of applied economics at the Johns Hopkins University in Baltimore. He is a senior fellow and the director of the Troubled Currencies Project at the Cato Institute in Washington, D.C.

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CRT Is Doing to America’s Culture What Marxism Did to Venezuela’s Economy

If you follow the news, popular culture or even the president of the United States, you might believe that America is “systemically” racist.

All of us, we are told, encounter racism daily, as victims or as beneficiaries of a racist system. Racism is why you are forced to sit in traffic. Racism is why you were denied a home loan.

The last time you last walked into a store alongside someone of a different race, racism is why you were greeted first. Or second. Either way, racism. That white stranger who rolled her eyes at you when you motioned for her to move out of your way? Racism.

People who see racism everywhere miss that racist attitudes are at an all-time low and that Americans are among the least racist people on earth. They focus instead on racial disparities as though disparate outcomes imply disparate treatment. They do not.

Consider income. Some groups earn more than others, on average. Does this suggest “systemic” discrimination? Not necessarily. As Thomas Sowell has demonstrated, some groups are older than others, on average, and earnings typically increase with age. Why should we expect Japanese (median age over 40) and Mexican (median age under 30) Americans to have similar incomes? Where does racism enter this picture?


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The white-black median age gap is smaller (44 vs. 35) but hardly trivial. At 58, the most common (modal) age for white Americans coincides with the age of peak lifetime earnings. At 27, the most common age for black Americans is far from it. It can be added that 18 groups earn more than white people, on average, including Nigerian-Americans.

None of this is to deny the contemporary relevance of past oppression. Moreover, present-day discrimination could contribute to the racial income gap. But the gap itself provides no evidence of this.

How about systemic racism in the criminal justice system? Black people are 2.5 times more likely than white people to be killed by the police and are 5 times more likely to be incarcerated. This gap is troubling, but is it caused by racism?

Consider that black people are disproportionately more likely than white people to commit “serious nonfatal violent crimes” and homicide. The claim that disparities are evidence of systemic racism doesn’t here work on its own terms.

Do you think CRT is destroying our institutions?

Black Lives Matter characterizes black communities as “overpoliced”; however, black people between the ages of 10 and 34 are 13 times more likely than white people to be murdered. Predictably, withdrawing police protection from black neighborhoods is killing black people. If defunding the police is “pro-black,” surely withdrawing American troops from Afghanistan was “pro-Afghan.”

If black lives mattered more, the policing disparity would be larger.

What about education; specifically, racial disparities in college admissions? Racial discrimination is widespread here, but it runs in the opposite direction. White people and Asians are overrepresented despite institutional discrimination (affirmative action) against them and in favor of other groups. Systemic racism claims again fall flat.

Why then are such claims ubiquitous? Clearly, part of the answer is that the disparate outcomes claim seems intuitive. Part of the answer is that, historically, racism was institutional in American society and its effects remain despite our best efforts.

In this context, it is more socially acceptable to attribute disparities to “the system” than to suggest either that disparities aren’t what they appear to be or that they have behavioral causes (“victim-blaming”). The systemic racism charge also deflects attention from policy failures and from questions like, “Who governs all of these impoverished and crime-ridden places?”


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It is striking that each of these answers could have been given 20 years ago, yet the systemic racism indictment has only now become widespread. To understand why, we turn to critical race theory, a radical ideology that recently spread from the academy to the major institutions of American society.

As Carol Swain and I discuss in our new book, “Black Eye for America: How Critical Race Theory Is Burning Down the House,” CRT constructs an all-encompassing narrative of racial oppression.

It borrows from Marxism a vision of society defined by group dominance but with racial groups now substituting for economic classes. CRT casts racial oppression as defining the American system and so demands revolutionary action to overthrow that system. To view racial disparities through this distorted lens is to see racism literally everywhere.

CRT in practice — as implemented in K-12 schools and in workplace diversity training — demeans designated “oppressor” and “oppressed” groups alike. White people are harassed and compelled to admit culpability for crimes they never committed. Black people and other minorities are infantilized (e.g., “math is racist” and hard work is a “white value”) and encouraged to resent their country and countrymen.

If American race relations are bleak, it is because the Marxist paradigm is doing for American society, culture and politics what it did for Venezuela’s economy.

But all is not lost. We can reforge our fractured nation if patriots have the courage to speak the truth in defense of American principles. And the truth is this: America is not systemically racist. Racism was never a founding value of our republic. It was always antithetical to our purpose and creed, and it remains so today.

We must be willing to challenge faulty reasoning and poisonous narratives regardless of the consequences. I won’t trivialize the costs of being “canceled” by the woke mob and its corporate allies except to say that past generations of Americans endured worse to defend our country. This is the challenge of our time, and we must rise to it.

The views expressed in this opinion article are those of their author and are not necessarily either shared or endorsed by the owners of this website. If you are interested in contributing an Op-Ed to The Western Journal, you can learn about our submission guidelines and process here.

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China Begins to Realize Cronyism and Big Tech Do Way More Harm Than Good – RedState

Monday’s stock market slide could have been a response to any of the very many awful economic indicators we are currently facing.

A lot of the blamers were blaming China’s over-leveraged monster property development company The Evergrande Group.  Evergrande just noted that perhaps they may not be able to pay back the $300+ billion they currently owe.  That they borrowed from suckers — oops, I mean lenders — all over the world.  So their looming default threatens the entire world’s economy.

China’s uber-cronyism made Evergrande into a global monster — #122 on Fortune’s August Global 500 hugest companies list.  Because no one succeeds in China unless the Communist government allows it to happen.  Many of the Communists’ favored companies have gotten really, REALLY huge.

Now it looks like China is realizing that having a few crony companies dominate the entire economy may not be the best way to run a railroad.  Over the last several months, China has started to undo its cronyism for once-favored companies.

No company is “too big to fail” when the government cuts off the cronyism.

It’s true of China’s Evergrande.  And it’s true of Big Tech companies.  In China, the US — and anywhere else they arise to stomp out the Main Street portion of the global economy.

Big Tech companies got to be Big Tech companies thanks to gobs and gobs of government cronyism.  Things were no different in China — until quite recently.

China Is Cracking Down Hard on Big Tech:

“Over the past few weeks, the Chinese government’s crackdown on Big Tech companies has intensified. The giants have all felt the brunt of heightened regulatory scrutiny.”

But this article makes the same mistake lots of people make:

“Given the economic benefits these companies bring to China, is the government shooting itself in the foot…?”

Actually, no.  To paraphrase Mark Twain, the reports of Big Tech’s economic benefits have been greatly exaggerated.  In China — and here at home.

China now realizes what we very quickly must learn: Big Tech and its cronyism do way more harm than good.

How Did Big Tech Get So Big? Massive Government Cronyism:

“A person who works for one of the biggest of Big Tech companies – a conservative I’ve known for years – was seated next to me. This person turned to me and whispered something along the lines of:

“‘If you get rid of Section 230 – it will kill these companies.’

“Really? Many of these near-trillion companies got to be near-trillion dollar companies – almost solely because of Section 230?

“And they can’t exist without it?

“That sounds like the quintessential definition of government cronyism.”

China Knows: Big Tech Hires Very Few People:

“Their Big Tech companies are like our Big Tech companies – ‘too big, too powerful, and all too willing to abuse their market share.’

“Big Tech abusing their market share – means killing competitors and potential competitors.  Which means killing jobs and potential jobs.

“Which means less Chinese people working – which means less Chinese people eating.  Which is ancient China’s ancient chief concern.

“China also views Big Tech’s massive money consolidation – as unproductive for the broader economy…and thereby the people.”

Google’s Biggest US Employee Tally Is Probably Its Lawyers:

“One of the VERY many downsides of Big Tech taking over this country? The very few employees they hire….

“(M)ost Big Tech companies – like Google, Facebook and Twitter – are mostly a bunch of computer servers. With a few hyper-compensated hyper-Left partisan executives. And some computer programmers to keep the servers up and running – and getting ever better at consuming our minds and existences.

“And Big Tech doesn’t even want to hire US citizens for those few programming gigs.  So they instead hire even more lawyers to get even more Big Government cronyism out of the government officials they own….

“‘Tech giants now spend as much or more (on lobbying) as big banks, pharmaceutical manufacturers and oil giants, the records show, led by Amazon, Facebook and Google….’

“(F)or what are Big Tech lawyer lobbyists lobbying? Even at the height of US citizen unemployment because of the Big Tech-enriching government lockdowns?

“Not hiring US citizens.

“‘Google, Amazon, Other Big Tech Companies Speak Out Against Trump Work Visa Restrictions:

“‘Nearly 2 of 3 approved H-1B applications in 2019 were for ‘computer-related occupations.’”

Amazon hires a few more people than that, but…:

“Jeff Bezos’ Amazon…(has killed) tens of millions of jobs in America and worldwide – while hiring thousands.”

Amazon’s No-Profit Model: Bleed Competitors to Death – Then Do Exactly What They Did:

“A key component of Amazon’s murderous business model – was operating for a quarter century making…almost no money whatsoever. And for many quarters at a time – actually losing coin….

“Amazon’s no-profit forced growth – comes at the expense of everyone besides Amazon selling…anything Amazon sells.

“Black Friday in brick-and-mortar retail circles – is the day after Thanksgiving, and marks the start of the Christmas shopping season.

“It is called Black Friday because most retailers operate in the red (i.e. at a loss) – all year until then. It is that day they break through into the black. So obviously, Christmas for them is life-saving crucial.

“Amazon knows this. So what do they do?:

“‘Amazon is cutting prices ferociously on its products as Christmas shopping picks up, to levels that are break-even or below.’

“They cut prices to sell at a loss – right in the heart of retailers’ most important time of the year….They are the biggest of behemoths – crowding out more and more and more competitors.”

Amazon’s Secret Weapon: Cloud Subsidizes Retail:

“Of course this massive…retail division would be not be possible if it were not for the profits coming in from the booming cloud services division.”

So China looks at Big Tech and what does it see?

A bunch of companies that got to be super-huge thanks to China’s government cronyism.  Cronyism China provided — to allegedly help its people.

Instead, Big Tech has consolidated way too much power and wealth.  To the direct detriment of the people China was trying to help when they propped up Big Tech.

So China has reversed course.  And started to rein in their Frankenstein monsters.

We should take note — and do the exact same thing.

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