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Leftists in Pennsylvania Outspent Conservatives 3 to 1 in 2020

Very little of this money can be traced back to its original donors.

It’s time for the myth that conservatives outspend liberal elections groups to go the way of the dodo. New research examining the 2020 election in Pennsylvania reveals that left-wing political action committees (PACs) blew away conservative PACs in independent expenditures—outside spending that isn’t coordinated with the campaigns of politicians seeking office.

According to data from the Pennsylvania Secretary of the Commonwealth, liberal PACs spent over $7.5 million helping Democrats and opposing Republicans in the 2020 race for control of the legislature and attorney general’s office. Conservative PACs spent just $2.3 million, or less than one-third of what their liberal counterparts poured out statewide.

That money was used to pay for ads on television, radio, and Facebook; for fees to political consulting firms; and for digital and direct mail marketing schemes that blanketed the state in the lead-up to the November election.

Where the money came from is revealing. On the right, Republicans could count on almost $159,000 from Americans for Prosperity, a free-market group bankrolled by the libertarian billionaire (and liberal bogeyman) David Koch. Gun Owners of America, a pro–Second Amendment group, spent almost $15,000 aiding Republicans. The Pennsylvania Family Council, a conservative family values group, spent $56,000 in the election.

The biggest conservative spender was the Pennsylvania Chamber of Business and Industry, however, which poured out $1.5 million aiding Republicans—most notably spending $172,000 helping Tim DeFoor in the auditor general race, $150,000 to unsuccessfully oppose the reelection of Democrat Sen. James Brewster (SD-45), and $304,000 to reelect Sen. John DiSanto (SD-15).

All these groups were dwarfed by their counterparts on the left.

Compare the left-right spending in particularly competitive districts Democrats hoped to flip in 2020. (Note: the figures are estimates due to inconsistencies in how groups reported independent expenditures.)

 

Who are these groups? Top spenders include:

  • $856,000 from Conservation Voters of Pennsylvania, an environmental litigation group that opposes coal, natural gas, and oil as “dirty fuels.” It’s associated with PennFuture, heavily financed by John Kerry’s Heinz Endowments.
  • $789,000 from Everytown for Gun Safety Victory Fund, a gun control group funded by liberal billionaire Michael Bloomberg.
  • $60,000 from Clean Wave, the PAC arm of the environmentalist Clean Water Action.
  • $270,000 from Commonwealth Communications, a firm founded by J.J. Abbott, a former aide to Democratic Gov. Tom Wolf.
  • $30,000 from the far-left Abolish the Electoral College PAC.
  • $170,000 from the Maryland-based pro–illegal immigration group Casa in Action.
  • $403,000 from the left-wing Better Pennsylvania PAC.
  • $158,000 from Stronger Pennsylvania PAC, a Democratic group.
  • $66,000 from Fair Share Action, part of a multi-million-dollar nexus of leftist activist groups known as the Public Interest Network.
  • $28,000 from Free the Ballot Incarcerated Voices, which supports restoring voting rights to convicted felons.
  • $260,000 from International Brotherhood of Electrical Workers (IBEW) Local 98.
  • $15,000 from Make the Road Action, a far-left immigration activist group associated with the Center for Popular Democracy, an anti-Republican agitation and voter mobilization group.
  • $28,000 from PACRONYM, the PAC arm of ACRONYM, a leftist digital strategy and voter mobilization group that gained infamy when its associated software arm, Shadow Inc., totally bungled the 2020 Iowa Democratic caucuses.
  • $197,000 from We the People PA Action, which aims to raise the state’s minimum wage, boost union power, and push Medicare-for-All.
  • $27,000 from Planned Parenthood PA Votes, the PAC arm of the nation’s largest abortion provider.

Yet the largest spender was the Pennsylvania Leadership Committee, which poured out close to $2.2 million in 2020. The PAC is associated with American Leadership Committee, which also funds Democratic campaigns in Alaska and North Carolina, the latter a leading battleground state.

The second-largest single spender, at $1.7 million, was Pennsylvania Fund for Change, a PAC that was identified as a leftist “dark money” group that attacked Republicans in 2018 and spent over $1 million attacking President Donald Trump in 2020. The Fund for Change is obscure, but its connections with trial lawyers and labor unions deserve a closer look.

In 2018, the Pennsylvania Fund for Change received $75,000 from the feminist group EMILY’S List Federal Fund, $350,000 from Working for Working Americans (a group backed by the United Brotherhood of Carpenters and Joiners), $100,000 from the National Democratic Redistricting Committee (a group founded and led by former U.S. Attorney General Eric Holder), $200,000 from a fellow named Edward Snowden in New York, and $20,000 from the Western Trial Lawyers Association Education Fund, along with a range of donations from other individual trial lawyers. The largest donor to the Fund for Change was the Pennsylvania Alliance Action, which donated more than $1.4 million in 2018.

Public records from the Pennsylvania Department of State show Pennsylvania Alliance Action is a 501(c)(4) group that was incorporated by PA Alliance LLC. The lone member of the LLC is Samuel Pond, a managing partner and a workers’ compensation attorney with the Pond Lehocky law firm. From here the money trail leads back to union operatives. The alliance has received hundreds of thousands of dollars in contributions from the Pennsylvania State Education Association, the state affiliates of the Service Employees International Union (SEIU), and the AFL-CIO, according to campaign finance records. The National Education Association donated more than $1 million to the Pennsylvania Alliance Action in 2018.

FEC reports indicate that the Pennsylvania Fund for Change is run by Victoria Perrone, president and founder of the Philadelphia firm Spruce Street Consulting, which has received payments from Democratic representative Karen Carter Peterson (LA-05) and the Democratic get-out-the-vote group New American Voices. Perrone is a former operations director for Organizing Together 2020, a nationwide effort to boost Democrats in six battleground states created by Paul Tewes, a strategist for Barack Obama’s 2008 campaign and Democratic National Committee (DNC). Tewes now runs Smoot Tewes Group (STG Results), an influential consultancy for Democrats and leftist groups in Washington, D.C.

In 2005, Tewes co-founded Americans United for Change (AUFC), a major activist group that got into trouble when it was revealed in late 2016 that the group’s field director, Scott Foval, had hired homeless people and the mentally ill to instigate violence at Trump rallies. AUFC later had a hand in seeding the Sixteen Thirty Fund with $221,745 in 2009, which is part of a $731 million “dark money” network run by the infamous Arabella Advisors.

So who provided that $1.7 million to Pennsylvania Fund for Change? We may never know. Very little of this money can ultimately be traced back to its original donors. What is clear is that these staggering figures reveal just how much the professional left carpet-bombed Pennsylvania with “dark” dollars in 2020—much of it from the consultant class in Washington, D.C.

Hayden Ludwig is a senior investigative researcher for the Capital Research Center.

Kevin Mooney is an investigative reporter for the Commonwealth Foundation and the Heritage Foundation.

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Why Small Firms Sell Out

Among some conservatives’ main complaints about Big Tech is the way it acquires smaller competitors, stopping them from displacing them like Facebook displaced MySpace. The practice has become so all-encompassing, the argument goes, that it undermines competition and requires strong antitrust action, perhaps unwinding some previous acquisitions in the process.

On the surface, this argument might make intuitive sense. A closer look reveals that the acquisitions strategy is a response to a pair of dilemmas, one genuine, the other wholly artificial, created by regulatory policy. Before breaking out the antitrust machete, we should consider whether a scalpel can improve the situation.

The first dilemma, which was explored by the renowned late Harvard professor Clayton Christensen, concerns how big firms innovate. Big firms by nature become less innovative as they grow. They become good at what they do, but the gains from innovation become smaller over time. Internal norms and procedures become set in stone, leading to the “not invented here” problem whereby managers react with suspicion to ideas from outside the organization.

What this means is that large, once innovative firms can appear to do everything right and still not see the disruption coming. The dilemma is that firms must choose between paying attention to their existing audience or to opportunities that will disrupt their existing business. They can be damned either way. Concentrate on refining your product and catering to your core audience can lead you to design the very best buggy whip just as the automobile appears.

On the other hand, diversification for its own sake can doom a company just as much. When Yahoo realized Google was offering better search and email products, it tried video streaming, job matching, and other new products. All failed. And remember the Amazon Fire phone? So does Jeff Bezos.

***

In the early 1990s, I studied for an MBA at Imperial College in London. One of the professors had just returned from a trip to the U.S. to advise Kodak on business strategy. He had told the company to pay attention to “still imaging,” the precursor to digital photography, which he thought could kill the business. He was right, of course. But why did the Kodak executives not see it? Probably because they were more concerned with beating emerging rival Fujifilm. They believed that Kodak’s position as market leader in film would transition naturally to still imaging and similar technologies. An effort to secure the new market for digital cameras in the 2000s paid off for a while, but then the iPhone came along. A late pivot to home printing was not enough to stave off bankruptcy. Kodak’s disruption was complete despite an attempt to move with the times and some genuinely innovative approaches.

Today’s Big Tech firms are acutely aware of this dilemma. Facebook, for instance, did not invent social media, but it was able to disrupt MySpace and other early social networks by, as Mark Zuckerberg famously put it, moving fast and breaking things. Amazon disrupted book selling and has since moved on to retail in general (though it does not dominate the broader retail sector, which still largely comprises brick-and-mortar stores).

Their solution to the dilemma is to try both approaches, to continually improve on the main product and grow that product’s audience while diversifying and trying new things. For example, Amazon realized that the computing power it needed to power its retail business could be a product in itself and created Amazon Web Services.

The tech giants seem well aware that the main source of potential disruption, and also potential growth, is outside the firm. That is why they constantly keep an eye open for new ideas from others and buy them up. Facebook bought an upstart photo filtering app called Instagram and turned it into a global social media business that in many ways competes with its main product.

The acquisitions do not always pan out. Amazon bought diapers.com but, despite putting a great deal of resources into it, failed to disrupt the diapers market dominated by grocery stores. (Amazon has been accused of having bought diapers.com in order to kill it, but that was not the case.)

The innovator’s dilemma explains why large tech firms want to buy up smaller firms. These companies are like Carroll’s Red Queen: “Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!” If they wanted to stay still, they would buy up firms and kill them off. But acquisitions enable them to keep running. That means they invest in new ideas, which benefits all consumers.

***

There is another dilemma, which I call the Entrepreneur’s Dilemma. Every for-profit entrepreneur wants to see his or her idea succeed and make money. In the past, the path to success was clear. You borrow seed money from relatives or the bank (or, in the case of Google’s founders, max out your credit cards) and then go on to build a company that gets financing to pay back investors, issuing additional stock and going public on a stock exchange. Traditionally, you could go public quite early, allowing you and your investors to share in your company’s growth. Home Depot, for instance, went public when it owned only four stores.

However, increasingly stringent financial regulation, which was initially aimed at preventing another Enron scandal and then at preventing banks from making overly risky loans, has broken that model. Borrowing seed money is now more difficult. Bank lending to startups and small businesses shrank by 20 percent after the financial crisis because of new regulations. Moreover, the complexity of going public has increased so much that even successful companies delay their IPOs until they have grown huge; see Uber and Facebook. This makes the entrepreneur much more reliant on angel investors and venture capitalists.

Investors, however, want to see a guaranteed return. Therefore, they will look for an exit strategy in the business plan. The easiest exit strategy for a tech entrepreneur is to sell the idea to a Big Tech firm.

That is the dilemma: endure the slings and arrows of financial regulation or sell out and lose control of the idea. It is telling how bad the regulation must be that so many entrepreneurs choose the latter option. Financial regulation has made the American dream of growing your own business to household-word status nigh impossible for most entrepreneurs.

So, if things seem out of balance, that’s because regulators have made it that way. If we are to restore the old model of competition and disruption and make the innovator’s dilemma a source of risk again, then rather than using the blunt edge of antitrust, we should first reform financial regulation using a fine scalpel. Policy makers simply need to make access to capital and investment easier for entrepreneurs. If we do that, then the chances that Facebook will go the way of MySpace will be much higher.

Iain Murray is a senior fellow at the Competitive Enterprise Institute.

This article was supported by the Ewing Marion Kauffman Foundation. The contents of this publication are solely the responsibility of the authors.

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When Earning a Living Becomes Illegal

TAC spoke with two business owners who are facing criminal charges for keeping their establishments open during COVID.

In 2020, Texas hair stylist Shelly Luther made national headlines for refusing to shut down her salon and spending time in jail due to COVID restrictions. A year later, across the country business owners continue to face jail threats for violating COVID mandates.

The American Conservative spoke with two such business owners: Melissa “Lisa” Hanson, who owns the Interchange Wine & Coffee Bistro in Minnesota, and Mike Carnevale, who previously owned Fitness 1440, a gym in Broward County, Florida.

Carnevale said he is facing up to six months in jail for refusing to uphold the mask mandate for those exercising in his gym. He was already fined, and his business was seized.

Though Florida’s Governor Ron Desantis has been known as one of the least restrictive state executives in the nation, local officials in parts of Florida have maintained COVID restrictions on the county level, particularly in Broward County.

“I sued Broward County,” Carnevale told TAC, “and one day later, I started getting arrested. So, I think it’s important to note that this was direct retaliation to a lawsuit I filed.” Carnevale has now been arrested three times for failing to enforce the Broward County mask mandate at his gym. “I was just suing because it violated the privacy clause,” Carnevale said. “If you know anything about the science, wearing a mask while working out is dangerous.”

But Broward County officials were not buying his reasons. In March 2021, he and his wife were arrested, and he told TAC the charges he faces carry up to six months in jail.

“Now they’re looking to take it a step further. They want to put us in jail and we’re not backing down to this,” Carnevale told the local CBS affiliate after his arrest. “We have an attorney that’s going to fight this until the very end. I’ll be fighting this until the very end. I won’t be backing down, that’s where we stand.”

Chronicling his plight on a personal website, Carnevale said his business was seized in October, when a judge signed off on a writ of possession. He said he has a court date coming up on May 18. In February, Broward County offered a plea deal with a 10-day sentence, which Carnevale rejected. He said the case is likely to go to trial and he faces up to 180 days for violating the mask mandate.

Hanson, meanwhile, alleges she also was targeted by law enforcement, with a warrant issued for her arrest shortly after she filed a lawsuit in April 2021. Hanson said she was indicted on six criminal counts in 2020, after Hanson kept her business open, despite a Walz mandate. Hanson said shutting down immediately was not possible: “We had employees we had to consider; we had customers we had to consider. We had vendors we had to consider, all our food orders.”

Hanson said she shut her business down as soon as she completed the orders which had already been placed. She said this was not good enough for local officials, and that an extra three charges were added because she did not close down immediately after the charges were filed; she now faces nine criminal charges. “These were for, I think, public nuisance,” Hanson said of the added charges.

“The really important [thing] that everybody…‘keeps getting hung up on’ is that there is a warrant for my arrest on missing a bail that I was not summoned to. What we stress here is those are absolutely invalid warrants; they are unlawful,” Hanson said. “I did not attend that court hearing because I did not receive the summons,” she added, saying that she had attended all previous hearings.

Hanson said she has no criminal record. The charges against her can carry up to 90 days in jail per charge, and right now, she is facing up to six months in jail for failing to make this court appearance, which occurred shortly after she filed her lawsuit.

“We actually have over 30 lawsuits and counterclaims against over 20 individuals in the State of Minnesota, local and state level,” she said. Governor Tim Walz is one of the defendants; the Minnesota governor’s office did not respond to a message for comment. Hanson said her civil lawsuit is based on the argument that Walz’s order is unlawful because he does not have the power to make laws. She said her decision to remain open was fueled by the desire to stand up against an unlawful order.

Hanson said that when Walz, like many governors, initially shut down all businesses in the spring of 2020, she went along, even though she did not agree. Minnesota businesses opened up again in the summer, but then Walz issued more shutdown orders in November, including a ban on all indoor dining.

“I happen to be a 95 percent [by revenue] indoor dining restaurant,” Hanson said.  “We cannot survive this a second time. We need to open fully, or we close permanently… We are Americans; we know that this is not right. This is against our rights as Americans.”

The city attorney of Albert Lea, which took out the charges, did not respond to a request for comment.

Michael Volpe has worked as a freelance journalist since 2009, after spending more than a decade in finance. He’s based in Chicago.

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Shed No Tears for Liz Cheney

Just because Republican leadership is ousting her for the wrong reasons doesn’t mean she needs to be defended.

Rep. Liz Cheney (R-WY) attends a press conference following a House Republican caucus meeting on Capitol Hill on April 14, 2021 in Washington, DC. (Photo by Drew Angerer/Getty Images)

The mainstream press has a perpetual revision process in place for Republicans. It works like this: GOP presidents are inevitably denounced in their time as bloodthirsty extremists, simultaneously lacking in IQ and in possession of off-the-charts authoritarian cunning. Then, 10 to 15 years after they leave office, they suddenly undergo a transformation. As soon as there’s a new Republican in the White House, they’re recast as sober-minded statesmen who would never dream of going so far as the current guy does.

So it was that Ronald Reagan was compared unfavorably to the more genteel Gerald Ford, only to morph into a compromising tax hiker in the face of mad George W. Bush, who himself was reimagined as a paintbrush-wielding model of civility next to that boor Donald Trump. And so it will continue to go. No doubt a decade from now CNN will be observing that, though Trump admittedly sent some harsh tweets, he at least didn’t try to ban puberty blockers in vending machines like this President DeSantis character.

It’s a stupid game to play. Yet even by its cheap and hypocritical rules, the attempt to rehabilitate Liz Cheney has got to be some kind of thudding rock bottom. Cheney, as of press time, is about to be ejected from House Republican leadership because she denounced Donald Trump after the Capitol riot. From there, she’ll face a 2022 primary in Wyoming full of fang-baring Trumpists, which she’s likely to lose. Her political career is almost certainly over.

A long time ago in a galaxy far, far away—i.e. 12 years ago—Cheney would have been portrayed in the media as a genocidal warlord. She’s an unreconstructed apologist for all the basest barbarisms of the Bush era. She’s defended waterboarding and the war on terror’s “enhanced interrogation” program. She’s opposed any serious attempt to reform FISA and rein in the government’s broad surveillance powers. Her PAC ran a comically fearmongering ad denouncing the Obama DOJ as the “Department of Jihad” because it employed lawyers who had dared to represent Guantanamo detainees. She’s railed against any attempt to withdraw American troops from anywhere, from Afghanistan to Syria to Germany. She’s continued to defend the Iraq war and even maintained that there was a connection between Saddam Hussein and Al Qaeda.

Yet lately she’s also expressed annoyance with Trump. And because the deafening churn of social media prevents anyone from remembering what happened more than two days ago, Cheney has been recast as a stovepipe-hatted, small-r republican moralist. Once upon a time, the mainstream press sighs, there was a more decent and virtuous conservatism that also occasionally tortured people in dungeons. This persuasion is exemplified by Cheney, yet now it’s is on its way out, overrun by the Trump cultists.

It is true that Cheney is being ousted because she criticized Trump. It’s also true that this is the wrong reason for this to happen. The problem appears to be, as Eliana Johnson has reported, less that Cheney finds Trump disagreeable—so do many other elected Republicans, however quietly—than that she insists on airing her contempt in public. January 6 is seen within the GOP caucus as an embarrassment and a liability, to be left in the rear-view in favor of attacking Joe Biden. And with some elected Republicans like Ted Cruz ditching corporate contributions in favor of smaller donations from the Trump-loving base, Cheney’s loathing threatens that which matters most in Washington: money.

That’s one view of Cheney, up on a pyre surrounded by murmuring MAGA cultists. Yet I have another narrative I’d like to propose. It goes like this: The conservative movement since the Bush administration has been in a state of upheaval. It understands instinctively that something went wrong during those years but it’s struggled to coalesce around an alternative. Hence the flirtation with Tea Party constitutionalism; hence the subsequent embrace of Trumpian populism. Yet at least on foreign policy, it’s managed largely to self-correct. The Bush Doctrine failed; Bush is no longer held in regard. Regime-change wars produced blood and misery; conservatives have since taken a more nationalist turn.

This is exactly what political movements are supposed to do: adjust to new circumstances, account for mistakes. It’s true that this reconsideration has come with an inflexible loyalty to Trump. But then what are we supposed to do? Defend Liz because, after decades of failure and destruction, she called Biden the duly elected president before most on the right? Whitewash everything else because she isn’t whitewashing January 6? Cheney’s defenders respond that the former is a mere policy disagreement while the latter is a matter of civic morality. Yet I wonder what could be more immoral than dripping water down prisoners’ noses and invading an impoverished country that posed no serious threat to us.

Doing her best Reagan imitation, Cheney recently declared in the Washington Post, “I am a conservative Republican, and the most conservative of conservative values is reverence for the rule of law.” Quite right. It’s for that reason that we ought to hold accountable those who shredded the Fourth Amendment, the Fifth Amendment, the Eighth Amendment; who mashed into pulp the 9/11 AUMF in order to prosecute pointless wars from Pakistan to Somalia; who tortured and eavesdropped and issued signing statements to ignore Congress; who distorted CIA intel and betrayed the public trust.

Cheney makes excuses for all of this. In which case, far be it from me to stand between her and the MAGA acolytes. I’m going out for a smoke.

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Big Tech’s Monopoly Creep | The American Conservative

If we manage not to descend into some kind of tech dystopia, then the generations that come after us will have the opportunity to wonder how on earth we had been duped for so long and so pathetically by a few Big Tech monopolists, how it was possible to have such a grand accumulation of power and wealth preserved by a system so bluntly corrupt in its modus operandi. Were we so transfixed by the shiny digital objects as to be oblivious to what was going on around us? Were we so keen on bludgeoning each other online as to allow the man behind the curtain to carry on?

The 2020 House report on competition in digital markets was damning in its content but feeble in its consequences, and the reason may be found within the report. At some point a particularly abusive tactic of Amazon is noted. Jeff Bezos, the Amazon oligarch, is shocked, as Captain Renault in the movie Casablanca, that such an abusive practice has been deployed by his company. “That is unacceptable” Bezos declares, “and I will look into that, and we’ll get back to your office with that.” Then the congressional report indicates that “to date, however, Amazon has not followed up with the Subcommittee to provide additional information.” Pooh-poohing Congress is possible when you know that your monopoly is relatively safe, and that the investigation will more likely end up as a performative political dance around the issue.

The Amazon abuse in question was about counterfeit PopSockets products sold on Amazon. The founder of PopSockets, David Barnett, “testified that ‘Amazon was aware that large quantities’ of counterfeit PopSockets products were selling on its platform, but that Amazon allowed the problem to continue until PopSockets agreed to spend nearly two million dollars on Amazon marketing services.” In a free market economy, Amazon would have readily apologized to PopSockets and got on with cracking down on the illegal products. But when 63 percent of the online searches for products start on Amazon, then PopSockets has to give in to what even Tony Soprano would call extortion. Basically, Bezos’s Amazon wanted a piece of the business if PopSockets wanted the problem to go away.

This, by the way, was not an isolated incident. The subcommittee had found that, in general, Amazon used the counterfeit products on its platform as leverage in order to force businesses to sell on its platform. Internally, those businesses were classified as “holdouts.” Even a large corporation like Nike had to cave in. Wall Street Journal reported that “Nike agreed to start selling some products directly to Amazon in exchange for stricter policing of counterfeits and restrictions on unsanctioned sales, according to a person familiar with the deal.”

Of course, leveraging its sales of counterfeits is only one of the ways that Amazon forces businesses across America to bend to its will. Amazon uses the data from the sales made by those businesses in order to discover opportunities and consumer trends for its private label, Amazon Basics. A former Amazon employee testified that his peers “were pulling private data on Amazon seller activity, so they could figure out market opportunity, etc. Totally not legitimate, but no one monitored or seemed to care.” Besides, a lot of data from third party sellers could be used in accordance with Amazon policies because significant loopholes exist in those policies.

Lina Khan, recently appointed to the Federal Trade Commission, has documented the case of Quidsi, once “one of the world’s fastest growing e-commerce companies.” Quidsi was very successful selling many different products through its subsidiaries, like Diapers.com. Amazon wanted to buy Quidsi back in 2009 but the founders of the company declined. It was then that Amazon used its size, reach, and financial heft to start a price war against Quidsi.

Quidsi executives saw that Amazon’s pricing bots—software “that carefully monitors other companies’ prices and adjusts Amazon’s to match”—were tracking Diapers.com and would immediately slash Amazon’s prices in response to Quidsi’s changes. In September 2010, Amazon rolled out Amazon Mom, a new service that offered a year’s worth of free two-day Prime shipping (which usually cost $79 a year). Customers could also secure an additional 30% discount on diapers by signing up for monthly deliveries as part of a service known as “Subscribe and Save.”

It was not long before Quidsi was sold to Amazon for $545 million.

According to the congressional report, Amazon had identified Quidsi as its “#1 short term competitor” and “was willing to bleed over $200 million in losses in diapers in one month.” Since the acquisition of Quidsi, Amazon has significantly reduced the discounts and the benefits of the Amazon Mom service.

Eliminating competition through acquisition is a strategy that all of Big Tech follows. In a 2012 email to the then CFO of Facebook, Mark Zuckerberg pondered “how much we should be willing to pay to acquire mobile app companies like Instagram and Path that are building networks that are competitive to our own.” Adding that “the businesses are nascent but the networks are established, the brands are already meaningful and if they grow to a large scale they could be very disruptive to us.” In a later email he further expatiated on how these acquisitions could provide competition protection for a company like Facebook.

There are the network effects around social products and a finite number of different social mechanics to invent. Once someone wins at a specific mechanic, it’s difficult for others to supplant them without doing something different. It’s possible someone beats Instagram by building something that is better to the point that they get network migration, but this is harder as long as Instagram keeps running as a product.

In a recent cover story of Barron’s, Instagram was presented as “the most important component of Facebook” from the investor’s point of view. “Its growth would surely get a higher multiple than the core Facebook platform business.” In a similar fashion, Instagram could achieve for Facebook what the YouTube acquisition had done for Google. “Even amid the pandemic, YouTube ad sales jumped 31% in 2020, easily outpacing the 6% growth from Google Search ads. Alphabet’s stock has returned 40% since the first YouTube disclosure, versus 24% for the S&P 500.” It is a pretty reasonable development when you realize that the giants of Big Tech contain within themselves so many of their would-be competitors.

Instagram for Facebook, Waze and YouTube for Google, Quidsi for Amazon, these are acquisitions in which at least the acquired party got to survive. Nowadays, it is more likely for a startup to be destroyed either by being cloned by the Big Tech, crashed by its predatory pricing, or just being bought in order to be shut down. “American tech giants are making life tough for startups” the Economistreported. “Big, rich and paranoid, they have reams of data to help them spot and buy young firms that might challenge them.” Startups like the giants are beginning to look like a bad investment. “Anything having to do with the consumer internet is perceived as dangerous, because of the dominance of Amazon, Facebook and Google (owned by Alphabet). Venture capitalists are wary of backing startups in online search, social media, mobile and e-commerce.” There is a weariness in the startups world, according to the Economist, about entering what is called a kill-zone—a military term meaning an area of engagement with a concentration of fatalities: “Snap is the most prominent example; after Snap rebuffed Facebook’s attempts to buy the firm in 2013, for $3bn, Facebook cloned many of its successful features and has put a damper on its growth.”

A paper by economists Ufuk Akcigit and Sina Ates argued that “the US economy has witnessed a number of striking trends that indicate rising market concentration and a slowdown in business dynamism in recent decades.” Presenting “new evidence on higher concentration of patenting in the hands of firms with the largest stock that corroborates declining knowledge diffusion in the economy.” In the year 2017, Facebook and Google captured “an astounding 99% of revenue growth from digital advertising in the US.” Thus, though astonishing, it is no surprise that, “due to Google and Facebook’s dominance, ‘the average growth rate for every other company in the sector was close to 0’.”

This month it was the turn of Tile, a company that produces tracking devices, to feel the kill-zone heat from the Big Tech giants. Apple introduced its own tracking device, the AirTag. There was a lot of fanboy-journalism coverage about the new product. On Bloomberg, the CEO of Tile, C.J. Prober, said

If you look at the history between Tile and Apple, we had a very symbiotic relationship. They sold Tile in their stores, we were highlighted at WWDC 2019, and then they launched ‌Find My‌ in 2019, and right when they launched their ‌Find My‌ app, which is effectively a competitor of Tile, they made a number of changes to their OS that made it very difficult for our customers to enable Tile. And then once they got it enabled, they started showing notifications that basically made it seem like Tile was broken.

The Tile devices are not broken. But in the Apple ecosystem the Tile devices need to be broken because that is what Apple decided. Competition and free markets are kind of broken, though, as the increasingly grim record of the adjacent tech monopolies is demonstrating. Previously, as Amazon was a big client of delivery companies like UPS, it was estimated that it was able to get discounts up to 70 percent “over regular delivery prices. Delivery companies sought to make up for the discounts they gave to Amazon by raising the prices they charged to independent sellers, a phenomenon recently termed the ‘waterbed effect.’” Big Tech has been getting huge discounts—economic, social and political—from America for some time now. The waterbed, having been subjected to extreme point pressures, is about to pop.

Napoleon Linarthatos is a writer based in New York.

This article was supported by the Ewing Marion Kauffman Foundation. The contents of this publication are solely the responsibility of the authors.

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Market Urbanist Zoning: A New Approach to Externalities

Why does America have zoning laws? Mainly to stop externalities.

Since it emerged in the Progressive Era, zoning was meant to prevent land development from negatively affecting people who live outside the development. Whenever an argument against zoning is made, skeptics inevitably ask something like: “then how will cities stop smokestacks from opening near daycares?” But this thinking is flawed.

Economist Edward Glaeser and legal scholar Cass Sunstein once proposed that all regulations undergo a cost-benefit analysis. What would such a look at zoning yield? The standard Euclidean codes that force separated uses have obvious costs: sprawl, auto-dependency, environmental hazards, deagglomeration, and more.

The benefits are less clear. Many argue that zoning protects abstractly-defined “quality of life” or “community character” goals, but those terms are subjective and difficult to define. The externality argument is used, too, but is often nebulous: externality concerns can range from traffic, to school crowding, to water supply. “Smokestacks near daycares” is the most extreme talking point, but that mix of uses would rarely occur today under market forces, and most zoning doesn’t address that exact scenario anyway.

To the extent there are valid concerns about development, Euclidean zoning poorly addresses them and fails the cost-benefit test, as do proposed alternatives like form-based codes, which police design rather than separating uses. So I’ve created an alternative: a Market Urbanist Model Zoning Code that addresses externalities while still encouraging development. Below is a graphic, followed by five defining principles for a Market Urbanist approach to zoning.

Parcels

Euclidean zoning is over-simplistic: It designates large swaths of a city for single uses, forcing every parcel to conform (for example, yellow often denotes areas zoned exclusively for single-family residential).

Market Urbanist zoning recognizes that every parcel is different. Requiring every parcel in a given area to serve the same function makes no more sense than forcing every storefront in a retail strip to sell hardware. Market Urbanist zoning does not police use, instead it merely calls for baseline rules, described below, that apply equally to them all.

Actions

Form-based codes also prevent land from being solely regulated by use, making more uses allowable by-right. Market Urbanist zoning goes further, however: characteristics that are contained within the lot line, and devoid of external effects, wouldn’t be regulated, period.

In other words, almost any building would be allowed if certain conditions are met. Aspects like height, aesthetics, setbacks, floor-area ratio, and dwelling units per acre aren’t externalities per se, and thus aren’t regulated as part of Market Urbanist zoning. It just depends on whether those characteristics affect the city beyond the lot.

Externalities

Possible outward effects of the development include “externalities”, which are nuisances imposed on other people, and “impacts” (discussed below). Externalities include air, light, and noise pollution, smells, runoff, and shadows.

Cities already have laws to stop many of these externalities. In a Market Urbanist code, those laws would remain in effect, and it would be the responsibility of a building developer or manager to follow them. But as long as a building does that, its characteristics, or “actions” as above, won’t matter.

Negotiations

Even if a proposed building would break certain nuisance laws, the developer can get around them by negotiating with the impacted parties, which would mostly include neighbors.

For example, let us say someone wants to build a pig pen in a residential area. With normal zoning, this would be illegal outright. With Market Urbanist zoning it may also be, due to the noise, smells, and other externalities. But the pen owner could make concessions—the builder could reduce the externalities, for example by using advanced berms or insulation; or neighbors might tolerate the externalities if they receive payoffs.

Municipal governments could organize and enforce such negotiations. For example, the pen owner could purchase easements on affected properties, so future neighbors must tolerate the pen too—but receive payouts. This bargaining method, described by the Coase Theorem, might sound like bribery. But Ronald Coase, the Nobel economist who formed the theory, viewed it as an efficient and voluntary way to settle disputes.

Impacts

Impacts, distinct from externalities, describe the infrastructure burdens from new development, like increased traffic, parking, and water use. Impacts are not viewed in a Market Urbanist code as a basis for obstructing projects.

But the impacts that new residents put on existing services does make the case for a user fee system. The amount the user pays depends on their usage level, and fee revenues help to maintain or expand that infrastructure.

For example, a skyscraper is proposed for a low-rise residential area. It meets all the externality codes, but neighbors fear its potential impacts. With Market Urbanist zoning, those impacts wouldn’t kill the project, but they can guide infrastructure policy. If on-street parking increases, the city can adjust curb pricing to manage demand. If the new residents cause school crowding, they can be charged school impact fees. And so on.

This model helps infrastructure scale to handle added burdens from population growth. It also dismantles the NIMBY (not in my backyard) arguments that existing residents might have about newcomers using “their” services. In a user-pays system, everyone is equal.

Pros and cons of Market Urbanism Zoning

Bottom line

This model may be unlikely in our current political context. But the philosophical point is crucial: Market Urbanist zoning doesn’t make any given building illegal. It identifies externalities and impacts that people dislike about a building and works to reduce them beyond the site.

The other point of a Market Urbanist code is to produce a better conversation about externalities, so there’s a clearer picture of what zoning even accomplishes. Right now, that doesn’t happen. For example, many cities require all parcels to have setbacks to prevent shadows, discouraging unique designs and consuming valuable space. Nobody asks how many of the city’s parcels actually need setbacks to prevent said shadows.

A Market Urbanist code could still have laws to prevent shadows, but that won’t mean every lot has setbacks. Instead, enforcement is case-by-case: If a proposed building would cast shadows on another, it could be set back or redesigned, or impacted parties can enter a private negotiation with the developer. Either option is less costly than requiring uniform setbacks citywide.

This thinking could apply to other zoning. If a community is worried about the mix of industrial and residential uses, must draconian use zoning apply to every lot? Or should noxious uses be addressed as they arise? If some businesses cause noise, should all businesses be separated from residential areas? Or should that too be enforced case-by-case, based on decibel levels? Market Urbanist zoning is meant to replace the inexactitude of top-down planning with precision and cost-benefit thinking to facilitate more permissive cities.

Scott Beyer owns Market Urbanism Report, and is a columnist for the Independent Institute, Governing, and HousingOnline.com.

Ethan Finlan is Market Urbanism Report’s content staffer.

This New Urbanism series is supported by the Richard H. Driehaus Foundation. Follow New Urbs on Twitter for a feed dedicated to TAC’s coverage of cities, urbanism, and place.

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Clown Show: Three Inept Foreign Policy Initiatives

Taking a look at a few less known blunders by the American foreign policy blob.

Washington has made an abundance of major, well-known foreign policy blunders over the decades, most notably the disastrous wars in Vietnam and Iraq. However, there have been numerous less prominent initiatives that seemed to defy basic logic and common sense. Although the negative consequences of those follies were less severe than the Vietnam and Iraq debacles (or the policies that have provoked a needless cold war with post-communist Russia), they still illustrate the arrogance and ineptitude of America’s foreign policy mandarins. Three especially ill-advised schemes stand out—two with respect to Mexico and one involving Syria.

In 2009, Barack Obama’s administration initiated a sting operation that entailed a flow of firearms to Mexican drug cartels. That initiative, Operation Fast and Furious, was similar to a more limited measure, Operation Wide Receiver, which George W. Bush’s administration had approved in 2006 and 2007 to track suspicious weapons moving from Arizona gun stores into Mexico. Instead of intercepting such firearms, U.S. authorities allowed the shipments to proceed, with the expectation that they could be traced to their final destinations. With Fast and Furious, the Obama administration adopted the same “gun walking” approach on a larger scale and supplied some of the guns directly. Both programs were run out of the Phoenix office of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF).

The goal was to infiltrate and undermine the drug cartels by following the trail of traceable guns to identify and neutralize those organizations and the kingpins who ran them. But Operation Fast and Furious backfired badly. ATF personnel assigned to maintain the traces lost track of where the weapons ultimately ended up. The cartels received more than 1,700 additional weapons, many at the expense of U.S. taxpayers. Not surprisingly, the Obama administration stonewalled and sought to conceal both the nature and the extent of the fiasco. Invoking “executive privilege,” Attorney General Eric Holder even defied a congressional subpoena and refused to testify before a House committee investigating the Fast and Furious debacle. Indeed, the administration’s principal response was to harass journalists, especially CBS News reporter Sharyl Attkisson, who had dared to expose the scheme and its failures.

Administration officials pursued an equally harebrained program in Syria, with equally dismal results. In its efforts to undermine Bashar al-Assad’s government, the Obama administration found itself supporting rather unsavory, Islamist factions in the anti-Assad insurgency. Although Washington proceeded with that strategy, some policymakers were uncomfortable with it and sought to create a new rebel formation that would be firmly committed to democracy and other Western values.

In June 2014, the administration asked Congress to authorize $500 million to vet, train, and equip a new force of “moderate” fighters. Officials spent all of those funds over the next 14 months, but the results were decidedly underwhelming. The program managed to graduate only a few dozen fighters, not the many hundreds that proponents had predicted. Worse, most of the graduates quickly defected or surrendered to more radical Islamist forces. In its report to the Senate in September 2015, the administration conceded that only “four or five” fighters remained in the field. Jonah Goldberg observed caustically: “The news that the Obama administration has spent $500 million to put ‘four or five’ fighters on the ground in Syria adds an almost comic irony to what is ultimately a tragic farce.”

Mexico, though, appears to be the favorite arena for bizarre U.S. policy ventures. During the final months of Donald Trump’s administration, U.S. Special Forces units reportedly were assigned to train enforcers for certain drug cartels. The apparent underlying logic for the program was that recipients of such training could be vetted to weed out the worst elements. U.S. training and support would then create cooperative, de facto allies to challenge and weaken rival cartels that posed a more lethal threat to the authority of the Mexican government and overall public order.

Indulging in such a fantasy was especially inexcusable since the United States already had been burned by a more rational program. During the late 1990s, Washington spent millions of dollars to train a new elite unit within the Mexican army to combat the increasingly powerful drug cartels. That unit soon defected en masse to the Gulf cartel and became that organization’s infamous enforcers, Los Zetas. When the ex-soldiers realized just how much potential profit existed in the illegal drug trade, though, they broke with their new employer a few years later and formed their own drug-running operation. For nearly a decade, Los Zetas became one of Mexico’s two most powerful cartels and gained a reputation for being the most violent operation.

Given that track record, it would be astonishing if U.S. officials even considered a new program that cut out the middleman and intended to train and equip cartel enforcers directly. Yet that appears to be exactly what has happened.

A common theme in all of these episodes is how U.S. officials initially seemed so impressed with their own cleverness and creativity. They exhibited breathtaking hubris that they could execute complex (and not terribly logical) ventures without a glitch.  In addition to a cavalier attitude about the expenditure of taxpayer dollars, there was an inattentiveness to possible adverse consequences. Supplying Mexican drug cartels with additional weaponry did not serve the best interests of the United States, nor did training more recruits for Islamist insurgent organizations in Syria. Yet there is little evidence that bungling policymakers suffered adverse consequences for their misjudgments. Given that outcome, it is likely we’ll see more ill-advised schemes in the future.

Ted Galen Carpenter, a senior fellow in defense and foreign policy studies at the Cato Institute and a contributing editor at the American Conservative, is the author of 12 books and more than 900 articles on international affairs.

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The Localist Legislator: Last Hope of the Middle Class?

Ronald Reagan chalked up his success in politics to its correlation with show business. Social critic Neil Postman ruefully agreed, adding that in American democracy “the idea [of politics] is not to pursue excellence, clarity or honesty, but to appear as if you are, which is another matter altogether.” Without reading Postman, middle America knows from experience that the politicians they send to Washington are not always as they appear. However, the ones who stay close to home—the elected members of state legislatures—are a different breed.

Members of Congress are notoriously out of step with their constituents. One example is Rep. Adam Kinzinger (R-Illinois), whose district voted for Trump in 2020 by 16 percent, but who constantly blasts Trump—even after the former president’s exit from public life—and any Republican who dared support him. When Kinzinger voted to impeach the President in February, he was censured by his county’s Republican Central Committee—and denounced by his own family via handwritten note obtained by the New York Times.

The D.C. smog of special interests is enough to cloud the thinking of any politician, even setting a congressman at odds with his own “flyover” family. And this disconnect is by no means limited to Congress. Today’s forgotten middle class finds itself just as much at odds with judges, bureaucratic appointees, and even many who bear the populist label. No matter the election results, America always seems just a few votes short of ending Obamacare, one Supreme Court justice shy of overturning Roe v. Wade, or one presidential election away from reforming the military-industrial complex and surveillance state.

COVID-19 added lockdown mayors and governors—including many Republicans—to the list of detached elites. Hypocrisy, scandals, and catastrophic mismanagement plagued the administrations of governors like Andrew Cuomo (New York), Gavin Newsom (California), Gretchen Whitmer (Michigan), and Tom Wolf (Pennsylvania). Texas Governor Greg Abbot drew praise in right-wing media for lifting his state’s mask mandate after nearly a year—but many Texans of the “forgotten” variety were asking why a conservative governor had ordered this restriction of civil liberties in the first place.

State legislators are the opposite. They don’t enter politics to fight a national culture war. Their thoughts are typically focused on small business growth, education, caring for seniors, fixing potholes, and beautifying historic parks and downtowns. But the crises of 2020 thrust many state legislatures into the limelight—and they haven’t yet retreated.

After the abnormal 2020 election—in which a majority of voters believe cheating affected the outcome—the forgotten middle class feared that the electoral system itself could no longer yield genuine representation or true change. But the events of the contested election revealed that state legislators, at least, still listen to their constituents and take action even when it’s not sophisticated or politically correct to do so.

During the post-election contest, large groups of Republican legislators in contested states such as Pennsylvania, Michigan, Wisconsin, Arizona, and Georgia made themselves pariahs in the eyes of corporate media outlets for their actions during the post-election controversy. State lawmakers held hearings, approved audits, signed on to lawsuits, and even appointed competing slates of electors to the Electoral College. And after the election was finally decided, 33 states introduced 165 election integrity reforms, including a comprehensive tune-up that recently passed in Georgia despite furious corporate outcry.

None of this would have happened without the close working relationship between state legislators and conservative grassroots. Agree or disagree with those who contested the 2020 election, these are clearly politicians who cannot be dismissed as owned by special interests. Governor Asa Hutchinson recently learned the same lesson when he tried to tangle with Arkansas’s General Assembly over gender reassignment for children—and lost. Despite the aggressive promotion of social change by the elite, the state legislator is still a formidable ally of the average American.

The left has long understood the populist power of state lawmakers—and it makes them furious. In 2019, New York Times writers attempted to prove that state legislators are just as detached as other politicians by forwarding a link to a mock website called “District Pulse” with constituent polling data to 2,346 randomly-selected state legislators. The lawmakers largely ignored the link, leading the Times journalists—who, strangely, were unused to being ignored—to conclude that state legislators “don’t care” what their constituents want. But clearly the opposite is true: These lawmakers care far more about a heartfelt voicemail from a local restaurant owner than a slick infographic from “District Pulse.” Their kinship with the middle class and dismissal of special interests has made them a special target of political spending by national union leaders, Democrat strategists, and Soros-backed NGOs.

To take an example from my own small town of Latrobe, Pennsylvania, a special election for state representative is currently being held following the tragic death of the former office-holder. The Republican nominee—who is practically guaranteed victory—is local conservative organizer Leslie Baum Rossi, mother of eight and creator of the famous Trump House, which is painted like an American flag and features a 14-foot steel cutout of the former president. If elected, Rossi would join a cadre of state legislators whose ears are more attuned to parents and small business owners at church cookouts than to journalists on CNN or Twitter.

Across the state near Allentown, small business owner Arthur Gillespie found his livelihood in jeopardy when his archery supply store was closed in March of last year. But thanks to the responsiveness of several state legislators he reached out to, he was able to secure an official waiver that reopened his store. At that point, he started receiving daily anonymous phone calls threatening physical violence—but continued to advocate with state legislators for pushing back on Governor Tom Wolf’s unilateral business shutdowns.

“As long as they’re sticking up for me, I’m sticking up for them,” Gillespie says. “They understand that Governor Wolf can’t keep dictating policy for the entire state on his own. They’re not perfect by any means—they’re still politicians—but they actually care about issues that impact my everyday life.”

Both in Pennsylvania and across the nation, state legislators have begun pushing back with bills, veto overrides, and state constitutional amendments limiting governors’ executive overreach and emergency powers. In just the last four months, 300 bills have been proposed in 45 states for this purpose, and many have already been enacted. This is not only happening on a partisan basis: Republican legislators in Arkansas, Utah, Ohio, and Indiana have shackled Republican governors. New York Democrats reached across the aisle for enough votes to slap down Governor Andrew Cuomo.

Pennsylvania lawmakers are just as intent on reining in Governor Tom Wolf, whose pandemic shutdowns of schools, gatherings, and businesses have had disastrous effects in the commonwealth. Over the past year, the legislature passed 10 bills focused on transparency and reopening, most of which the governor vetoed. Although several of Wolf’s shutdown orders were constitutionally questionable, the partisan state Supreme Court rubber-stamped them all—and has blocked most legislative pushback. Now, the General Assembly has advanced two state constitutional amendments that will permanently limit gubernatorial disaster declarations to 21 days, and require legislative approval to extend them. Pennsylvanians will vote on the measures in a statewide referendum May 18.

Yanking decision rights away from the governor to place them in the hands of Pennsylvania’s 7 million voters is emblematic of the populist power—and political courage—that state legislators wield. These local heroes may lack the showmanship of Ronald Reagan, but the work they do goes beyond keeping up appearances for their constituents. If the forgotten middle class has any hope in an age of COVID dictators, irregular elections, and out-of-touch D.C. swamp creatures, it is in the local representative’s small strip-mall office.

Andrew Cuff writes on conservative issues and policy reform from Latrobe, Pennsylvania. You can find him on Twitter @AndrewJCuff.

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The Hawks’ New Hero: Arthur Vandenberg

Elliott Abrams and company have a new initiative that once again seeks to thrash the “isolationists.”

CBS News reports from the 1948 Republican National Convention (G.O.P.), Philadelphia, Pennsylvania, June 25, 1948. Pictured in bowtie is Michigan Senator Arthur Vandenberg. (Photo by CBS via Getty Images)

In the cartoon version of U.S. national security policy, Republicans are stalwart and tough-minded defenders of freedom. If you want to keep America safe—and if you love the troops—you’ll vote GOP.

Democrats, in contrast, are wimpy and given to isolationism. Liberals view the armed forces of the United States chiefly as venue for social engineering. Given half a chance, they will eviscerate the Pentagon budget and allow the forces of evil to run riot around the globe.

All of this is bunk, of course, a point made definitively clear by the incoherent policies of our most recent Republican president.   When it comes to national security, the actually existing GOP has become the party of whimsy.

Yet even if this cartoon version bears no resemblance to reality, it may retain some remnant of political utility. That appears to be what Elliott Abrams and the other founders of the just-created Vandenberg Coalition are counting on.

The coalition’s declared purpose is to promote “a strong and proud American foreign policy responsive to the interests of Americans all across our country.” Mark me down as strongly and proudly favoring those sentiments.

Yet apart from warning against the imaginary danger of isolationism, nothing in the coalition’s generic statement of principles comes within a country mile of saying anything concrete. If the Vandenberg Coalition were a religion, Catholics, Protestants, Jews, and Muslims could all join without fear of violating any theological tenets.

So what’s actually going on here? The composition of the coalition’s advisory board hints at an answer.

It consists almost entirely of unreconstructed (and unapologetic) hawks, those who as senior officials or analysts promoted the militaristic turn that followed the end of the Cold War and reached its apotheosis after 9/11.

Going back to the presidency of Ronald Reagan, the hawks (Elliott Abrams not least among them) have enjoyed a good run. In 2016, however, Donald Trump chucked the tradition to which the hawks adhered and won the presidency. Although certain hawks (Elliott Abrams not least among them) joined the Trump team, they found themselves without influence. They could only watch as President Trump put a wrecking ball to all that they professed to stand for.

So the actual if unacknowledged purpose of the Vandenberg Coalition is to roll back the clock, undoing Trump’s pernicious legacy and restoring the good old days when the phrase “American global leadership” implied adherence to a recognizable if notably bellicose set of principles.

Implicit in the coalition’s founding is the claim that the present-day global order does not differ appreciably from the moment in 1947 when Senator Arthur Vandenberg, long-since forgotten Republican of Michigan, lent a veneer of bipartisanship to the Cold War strategy of containment. Abrams and his colleagues want to persuade their fellow Republicans to forget Trump and declare their fealty to the legacy of Arthur Vandenberg.

This is likely to pose a challenge, on a par with persuading Americans that Rosemary Clooney represents the future of American popular music. After all, however inexplicably, Trump’s hold on the Republican rank-and-file remains strong. Few pro-Trumpers are likely to take their cues from members of a foreign policy establishment that they have learned to despise.

Perhaps more importantly, nothing in the Vandenberg Coalition’s admittedly sketchy website suggests a willingness to revisit the events of the period that vaulted Trump to political prominence.

Chief among those events was the unnecessary and reckless 2003 invasion of Iraq that various coalition members enthusiastically endorsed. In that regard, a better name for the enterprise that Abrams is founding might be the No Second Thoughts and No Apologies Coalition.

Or better still: the No Fresh Thoughts Coalition, given the apparent eagerness of Abrams and his collaborators to embark upon a new Cold War with the People’s Republic of China standing in for the Soviet Union. That the present-day PRC may differ from Stalin’s USSR goes unmentioned, as does the possibility that the present-day United States may differ from what it was back when Arthur Vandenberg held forth on the floor of the United States Senate. And despite many references dangerous new threats, the Vandenberg Coalition website does not even mention climate change.

Washington is a funny place where strange things happen all the time. So I suppose it’s possible that the Vandenberg Coalition will figure prominently in charting the future of U.S. policy. But anyone looking for something other than warmed-over bromides offered by people with selective memories would do well to look elsewhere for enlightenment.

Andrew Bacevich is president of the Quincy Institute for Responsible Statecraft. His new book, After the Apocalypse: America’s Role in a World Transformed,will be published on June 8.

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China’s Propaganda War and How to Stop It

When President Richard Nixon took a chance on normalizing relations with China in 1972 after a quarter century of diplomatic freeze, China to most Americans was just a Third World country desperate to build its lagging economy and legitimize itself on the world stage. Americans knew enough about the way communism worked to know that propaganda is an integral part of its game. But here was a real cry for help from a nation left raw by years of socialist policies that led them down a one-way road to mass starvation and economic calamity.

Cut to nearly 50 years later, and Americans witnessed a sad display of political sniping at the March 2021 summit in Alaska between Chinese Communist Party foreign affairs director Yang Jiechi and new U.S. Secretary of State Antony Blinken. What many Americans may not have realized as they watched Yang insult Blinken and his country is that the Chinese propaganda on display in Alaska is not just reserved for political theater. In fact, it has been here for years, taught to American youth and progressive political activists and very likely playing an outsize role in the political turmoil and violence the U.S. has suffered in recent years.

In The Devil and Karl Marx (2020), Catholic writer Paul Kengor describes how Soviet Russia infiltrated American churches during the Cold War. Communist plants targeted the Catholic Church knowing that an influence-peddling operation would require very little manpower. “Communists understood that just a handful of saboteurs, operating from the inside through carefully calculated dishonesty, could go far in impacting if not redirecting and hijacking an organization,” Kengor explains.

China has put that premise on steroids. Much wealthier than Soviet Russia ever was, China has spent billions funding propaganda on college campuses and in American think tanks to control how Americans think about China and, perhaps more worrisome, how young Americans think about their own country.

In Alaska, Yang told a stunned Blinken, “Many people in the United States actually have little confidence in the democracy of the United States.” He was merely echoing what China has already trained many young Americans to think by directly or indirectly funding American nonprofits. Younger Americans had already heard this message on their college campuses and in some cases even earlier, in primary and secondary school. Given the state of political discourse leading up to the 2020 election, there’s evidence to suggest they were dutifully spreading the word as China no doubt intended.

***

The Trump administration began to suspect trouble sometime during the four years it spent trying to wrangle a trade deal with China while watching anarchists torch federal buildings in Seattle and Portland. In a speech given to the Georgia Institute of Technology in December 2020, Secretary of State Mike Pompeo noted that the U.S. Department of Education reported American schools had taken in roughly $1.3 billion from China since 2013, mostly in tuition and funding for the Chinese Communist Party–aligned Confucius Institutes.Confucius Institutes first began popping up on American college campuses in 2004, according to a National Association of Scholars report, Outsourced to China: Confucius Institutes and Soft Power in American Higher Education. They originally numbered just over 100. Many more showed up as “Confucius Classrooms” in K-12 schools across the country.

The Trump administration, suspecting these “educational and cultural” organizations were feeding Chinese state party propaganda to American students, began investigating. As a result, by March 2021 many had closed. The number in 2021, according to NAS, came in at less than 50, although some reports indicate the K-12 classrooms are simply rebranding under the banner of the Asia Society Chinese Language Partner Network to avoid scrutiny.

It was all a part of a broader effort to address what the Trump administration considered a serious national security threat from an ascendant China. In the several months leading up to the 2020 election, senior Trump administration officials, including Pompeo, National Security Adviser Robert O’Brien, Attorney General William Barr, and FBI Director Christopher Wray gave a series of speeches laying out the national security threats posed by China. Foreign funding of think tanks and universities, mostly by China, was prominently mentioned.

About a month before the election, Pompeo’s State Department went even further and issued a press release announcing the administration’s deep concerns over foreign funding of U.S. nonprofits, including “the academic community, think tanks, and various external sources of expertise in foreign affairs.” The release more than gently called for those entities to “disclose prominently on their websites funding they receive from foreign governments, including state-owned or state-operated subsidiary entities.”

In fact, on its way out the door following the 2020 election, the Trump administration proposed a rule—the Establishing Requirement for Student and Exchange Visitor Program Certified Schools to Disclose Agreements with Confucius Institutes and Classrooms—that, if it had been reviewed and accepted, would have required universities and K-12 schools with foreign exchange programs to disclose financial ties to Confucius Institutes.

***

Balancing a national security threat from a hostile nation seeking hegemony with the conservative value of donor privacy is no easy task. When a 2020 Department of Education report showed that many schools, especially in the Ivy League, were failing to adhere to already existing reporting requirements by taking billions in unreported foreign funding, it became an easier case. According to that report, “$6.5 billion in funding and resources from foreign sources including China, Russia, Saudi Arabia, the United Arab Emirates, and Qatar” went illegally unreported by 2020.This makes it even more important for those who work on issues of donor privacy to address how to strike the appropriate balance. Capital Research Center’s Special Projects Manager Robert Stilson, in his report Combating Foreign Government Influence in American Institutions, tried to address the need for donor privacy in an age that embraces “cancel culture,” purity tests, and smear campaigns. Stilson noted that the State Department’s disclosure request “applies to those groups that ‘wish to engage with the Department’—in other words: influence the U.S. government.”

But the Biden administration, shortly after inauguration in January 2021, scrapped the Trump administration’s proposed rule that would have required transparency in foreign funding, offering a weak justification by saying the rule had never been entered into the Federal Register.

While this seems to contradict the tough approach to China that President Joe Biden promised during the campaign, all hope is not lost. American legislators have gotten a bit more serious about the threat of a protracted CCP propaganda program carried out on American soil and targeting America’s youth.

Several new pieces of legislation have been reanimated or proposed to address the issue of shadowy foreign funding into American nonprofits in an effort to sway public opinion toward alignment with hostile ideologies and away from American values.

In early March, the U.S. Senate approved, by unanimous consent, a bill that would increase oversight of Confucius Institutes and cut funding to schools that failed to comply with new oversight rules. States like Tennessee have introduced legislation to outright ban Confucius Institutes in their public education facilities. The Republican Study Committee is leading a charge on federal legislation that would increase oversight and “unreported financing behind the research organizations and nonprofits shaping our foreign policy,” says Rep. Lance Gooden of Texas, who introduced the bill in late March.

There are also moves that could be made to criminalize reporting false information on federal grant applications and to create a Federal Research Security Council as an oversight organization policing federal funds, as the Safeguarding American Innovation Act proposes. Sen. Rob Portman (R-OH), who sponsored the legislation, released a statement in June that said his legislation would “help stop foreign governments from stealing American taxpayer-funded research and intellectual property developed at U.S. colleges and universities.” That bill reportedly has bipartisan support.

The FIRM Act, which would update the Foreign Agents Registration Act to include scientists and researchers, was introduced during the last congressional session but did not receive a vote. It could be revived by an enterprising legislator, should the balance of power in Congress shift following the 2022 midterm elections.

American legislators have begun to wake up to the propaganda threat China poses, even if the executive office is not yet quite on board. Congressional support for getting a handle on just how much foreign funding is changing hands to prop up the reputation of Communist China has been encouragingly bipartisan. The hope, as poisonous political discourse continues unabated on social media and democratic values are routinely smeared by many American young people as antiquated and even dangerous, is that it’s not already too late.

Sarah Lee is communications and external relations director at Capital Research Center in Washington, D.C.