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TL(PM) DIGEST: When industrial policy starts to work a little *too* well
Plus Trump backers float anti-DeSantis conspiracy theories, the Japanese PM visits South Korea for the first time in 12 years, and a crackpot reparations scheme in California
1. Biden’s industrial policy might be a little too effective
What happened? Companies are taking greater advantage of the clean energy tax breaks included in the Inflation Reduction Act than initially expected, the New York Times reports. While that means greater investment in clean energy manufacturing and more new jobs building factories, it also means the federal government will forgo more tax revenue than initially projected.
Why does it matter? To put it simply, the IRA will cost $180 billion more than expected. That’s necessarily not a bad thing—the IRA is working as intended and crowding in private investment in key industries—but it does complicate efforts to negotiate a resolution to the current debt ceiling hostage situation.
TLP’s take: In a sane world, we’d look at the fact that more companies are taking advantage of the IRA’s tax breaks as a major win for America’s industrial policy. But in the world we live in, it’ll serve as additional fodder for disingenuous deficit hawks and Republican hostage takers in the House.
2. Trump supporters deploy conspiracy theories to take out his chief rival
What happened? Florida Governor Ron DeSantis has yet to announce his candidacy for president but is being highly criticized by supporters of former president Donald Trump as “Ron DeSoros”—an apparent reference to billionaire George Soros’ recent comments that DeSantis is likely to be the nominee, according to the New York Times.
Why does it matter? Trump’s team doesn’t mess around, and they’re already peddling conspiracy theories to snuff out DeSantis’s campaign before it even begins. Arizona conspiracy queen Kari Lake jumped in on the action early:
Kari Lake, a Republican who lost her campaign for governor of Arizona last year, once praised Mr. DeSantis on the campaign trail. But in February, as Mr. Trump’s attacks grew, she shared a story claiming Mr. DeSantis was endorsed by Mr. Soros, calling it “the kiss of death.”
“The broader narrative is that he is connected to the shadowy forces that seek to bring down Trump,” said Mr. Bond, the Montclair professor.
Mr. DeSantis was forced to play catch-up, making broad appeals to conspiratorial groups within the Republican Party.
TLP’s take: Live by conspiracies, die by conspiracies—goes for politics as well as life.
3. Japan’s prime minister visits Seoul for the first time in over a decade
What happened? Japanese Prime Minister Fumio Kishida traveled to Seoul for a summit with South Korean President Yoon Suk Yeol over the weekend, the first time a Japanese prime minister has visited the South Korean capital in 12 years. Kishida’s trip follows Yoon’s March visit to Tokyo and marks the latest step in a slow but steady rapprochement between two of America’s closest Pacific allies.
Why does it matter? Though both allies of the United States, Japan and South Korea have remained at odds for decades over the legacy of Imperial Japan’s brutal rule of Korea during the first half of the twentieth century. That’s made strategic cooperation between the two countries hesitant at best—something that may not have mattered in decades past but very much does now and in the future as America and its allies seek to resist Chinese coercion.
TLP’s take: Any moves Japan and South Korea take to increase their strategic cooperation (if not resolve their historical differences) are welcome. It’s important to note that this recent diplomacy has been at the initiative of Seoul and Tokyo, not Washington—though of course the United States has always encouraged better relations between its two key allies.
4. California reparations activists present state taxpayers with an expensive bill of goods
What happened? A government-sponsored task force in California approved a lengthy list of recommended legislative measures for reparations for black residents that will now be sent to state officials for consideration.
Why does it matter? Economists estimate that the reparations proposals could cost the state nearly $800 billion—more than 2.5 times the annual state budget in California, according to NPR. The task force did not make any recommendations on how to pay for this expensive wishlist and did not consider the feasibility or desirability of the state spending such large sums of money in this manner.
TLP’s take: When people criticize the Democratic Party for being extremist, these are the kind of irresponsible proposals they have in mind. California residents can barely afford to live in the state, let alone work longer and harder to pay higher taxes to fund a dubious reparations package that is likely unconstitutional and will certainly bankrupt the state.
Lawmakers should instead look at the needs of all residents in the state and pass responsible investments in housing, transportation, schools, and jobs that benefit everyone equally.
Just one more thing…
That one time during World War II when the Royal Navy converted one of its auxiliary minelayers into a floating brewery to supply fresh beer to Allied troops fighting in the Pacific.