EU Budget Fight, California’s Housing Crisis and Trump’s Threats
Austria, Denmark and the Netherlands are unhappy about the European Commission’s proposal to eliminate rebates in the EU’s next seven-year budget.
The commission has proposed to cut solidarity spending by 7 percent and agricultural subsidies by 5 percent to make up for the loss of Britain’s contribution.
It also wants to eliminate “correction” mechanisms that benefit the wealthier member states.
The stakes are low. The rebates add up to €6 billion. The proposed budget — €1.25 trillion — altogether represents about 8 percent of the EU economy.
Expect a big fight nevertheless. For center-right leaders in Austria, Denmark and the Netherlands, who face competition from the nativist right, this is a perfect opportunity to bolster their Euroskeptic credentials. In the end, the commission will give in a little and everybody walks away happy. Read more
Rutte Survives Tax Debacle, Middle America Not Doing So Badly
The Netherlands’ Mark Rutte has been reprimanded by opposition parties for failing to disclose memos to parliament about internal government deliberations over the repeal of a business tax.
Rutte claimed he had not been aware of the papers, which were drafted by the Finance Ministry during the formation of his current government. The four parties in his coalition, which have a one-seat majority, accepted this explanation. All opposition parties but one voted to censure him.
Rutte surprised other parties by eliminating the dividend tax when he returned to power in October. Repeal had not been part of his election program. The suspicion in The Hague is that Rutte’s former employer, Unilever, and Royal Dutch Shell — two of the Netherlands’ largest companies — lobbied him to eliminate the tax. Read more
For the Future of the Democratic Party, Look to California
Peter Leyden and Ruy Teixeira argue that California’s Democrats are leading the way in developing a progressive vision for the twenty-first century:
The New California Democrats understand that a healthy society needs a strong government that’s well funded, and they don’t shy from raising public funds through progressive taxation. But the New California Democrats appreciate the market and the capabilities of entrepreneurial business. They are tech-savvy and understand the transformative power of new technologies and the vibrancy of an economy built around them. They understand that to solve our many twenty-first-century challenges, we need business to come up with solutions that scale and that grow the economy for all.
If the twentieth-century progressive model was the welfare state, the twenty-first century’s could be what Leyden and Teixeira call the “opportunity state.” Read more
Macron Takes Inspiration from California and Scandinavia
Patrick Chamorel, who specializes in comparing American and European politics, argues in The American Interest that French president Emmanuel Macron’s economic vision is a mix of the Californian and Scandinavian models:
On the one hand, an embrace of start-up culture, a preference for entrepreneurship over rent-seeking, outsiders over insiders and individual mobility over jobs-for-life; on the other, he evinces a belief in the positive role government can play to protect the weak and equalize access to opportunities.
Macron wants to free companies from excessive social costs and bureaucratic constraints, but he has also pledged €50 billion in public investments. Read more
California, the largest of America’s fifty states, is normally an afterthought in presidential politics. It is reliably Democratic in the general election and comes last in the primaries, meaning that by the time Californians vote both parties have usually found their nominees.
This year could be different.
If Donald Trump continues on the path he’s on, California’s 172 Republican delegates could make or break his presidential aspirations.
The Manhattan businessman has so far secured 950 of the 1,237 delegates he needs to win the nomination outright. If he falls short of a majority before the delegates convene in Cleveland, Ohio this summer, the party could nominate someone else instead on a second or third ballot when most delegates will be unbound. Read more
Californian Energy Policy, Cautionary Tale for America
No state better represents the bankruptcy of left-wing energy policy than California.
In prioritizing environmental concerns over energy costs and security, it has had made itself woefully unattractive to businesses. Californian taxpayers are left to pick up the tab. The once Golden State stands as a sad example of how not to do energy policy. Read more
There’s a proposal to split the state of California in half.
The fifty-first state would be called South California and encompass the city of San Diego as well as conservative countries while Los Angeles, San Francisco and the more liberal northern parts of the state would continue to be governed from Sacramento.
This new state would be the fifth largest by population, more populous than Illinois, Ohio and Pennsylvania. South California would take nearly a third of the population away from California, making the Golden State the second largest after Texas. Read more