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We recently had a conversation with a prominent lobbyist close to the world of supply-siders, and he told us about what supply-siders' priorities are for the 2025 tax fight. More in our exclusive report here.
The more your correspondent thinks about this upcoming fight over taxes and the budget, the more despondent he becomes. In part because of how the worsening economic situation and the interest rate situation might force some really hard choices.
It's going to be a big, ugly fight and we don't know the outcome. Let us know if you have thoughts on what's likely to happen, what should happen, or what aspects of it we should cover.
SEE ALSO: The PolicySphere Manifesto →
Policy News You Need To Know
#HurricaneHelene — As you know, we have been following the story of the response to the disaster from Hurricane Helene, particularly in East TN and Western NC, and trying to figure out if there has been any policy or governmental failure. JD Vance recently spoke to the press after the Trump rally in Butker, PA and was asked about the Federal response. We wanted to transcribe and share his answer (you can watch it here) because Vance is very good at summarizing complex information, but also because, we know, he has an incredible network of people from all walks of life who give him information on current events that he can then summarize. So here's the quote: "Look, there were not enough resources that were pre-staged, especially in western North Carolina, it's one of the reasons why the catastrophe has been so bad, but we are now a week into this, and the 82nd Airborne still only has about half of the troops they want there actually there, as I understand it. There's no command & control. I talked with Elon Musk about this earlier. I don't think there's anything malign going on, but there's a lot of basic bureaucratic incompetence that is delaying the delivery of communications resources, of food, of water, of medicine. That is what I'm so frustrated by. It's not the on-the-ground folks with FEMA, who I think are doing everything that they can. It's the leadership of our country that I think is letting a lot of bureaucratic incompetence delay the delivery of necessary resources." That sounds like what could be a very accurate assessment. (Watch this space.)
Previously on PolicySphere: Monitoring the FEMA Response to the Floods →
#HurricaneHelene — Speaking of, we also want to extensively quote from FCC Commish Brendan Carr about the work Starlink is doing to connect Americans affected by Helene, because it's both interesting and inspiring, and shows what a difference leadership makes: "I want to express my thanks and appreciation to Starlink for the remarkable work they’re doing to help connect Americans in Hurricane Helene’s wake. Importantly, this new direct-to-cell service is separate from the traditional satellite to flat panel dish service that Starlink has been offering, including to the benefit of so many communities in the disaster zone. This new direct-to-cell service skips the dish and can transmit directly to smartphones from special, dedicated direct-to-cell satellites. The focus is on enabling emergency alerts to smartphones. In addition, they may test some basic texting (SMS) in North Carolina on the T-Mobile network. It is important to manage expectations here. Starlink does not have a full constellation of direct-to-cell satellites in space yet. This service was not scheduled to go live until additional direct-to-cell satellites were in orbit. But Starlink is giving this a shot nonetheless to help address the serious need for connectivity in these disaster areas. Many companies probably would have held off and waited. I thank them for choosing to do everything they can to improve communications. Every little bit helps right now." More on this development here.
#SpaceX — Another reason why Starlink going above and beyond to help victims of Helene is relevant is because, meanwhile, the FAA seems to still be bullying SpaceX. There was a damning example just last week. On October 4, 2024, United Launch Alliance (ULA), SpaceX's main private sector competitor for a range of NASA flights, conducted the second test flight of their new Vulcan Centaur rocket. During that launch, a shower of sparks and what appeared to be debris fell away from one of the rocket's solid rocket boosters—because a rocket nozzle failed and then detached from the rocket. Despite what every non-rocket scientist can tell is a pretty bad failure, the FAA stated that no investigation was warranted for the launch. This shows a clear double standard vis-à-vis the way the FAA has been bullying SpaceX, grounding the company's launches over more picayune incidents.
#GlobalMacro — The yield curve, that is to say, the curve showing the difference in yields between Treasury bonds of various maturities, has inverted again. The yield curve "inverts" when short-term yields are higher than long-term yields, which is not the way it normally is. Historically, an inverted yield curve has been a reliable predictor that an economic recession is incoming. (Via)
#GlobalMacro — Speaking of, the yield on the 10-year Treasury bond has risen above 4%n for the first time since early August this year. (Via) This means higher interest rates on the US deficit which, again, is not good economic news.
#GlobalMacro — Meanwhile, the Shanghai Export Containerized Freight Index (SCFI) based on Settled Rates (Europe Route, Base port) fell by 15.9% week-over-week to 2,662.75. (Via CN Wire) The SCFI is a key indicator of shipping costs for containerized cargo leaving from Shanghai, one of the world's busiest ports. This is a big week over week drop. Shipping costs are a crucial factor in global trade. The most likely explanation is that Europe's economy is buying less stuff made in China and so doing worse than we think. The fragile economic situation in Europe is a risk to the global economy and therefore things like interest rates and upcoming budget & tax discussions in the US.
SEE ALSO: Is France About To Bring Down The Global Economy? →
#Healthcare — Very interesting news, relayed by John Walker and Parth Dahima at American Action Forum: "The Centers for Medicare and Medicaid Services (CMS) recently confirmed it would be rolling out a new access model for novel sickle cell disease (SCD) gene therapy treatments to help patients on state Medicaid programs." Here's the basic idea: the new model aims to improve access to gene therapy treatments for SCD patients on state Medicaid programs by having CMS negotiate directly with manufacturers to establish outcome-based payment frameworks, potentially reducing lifetime treatment costs for SCD patients. While the current gene therapies are expensive (around $2-3 million per patient), they could be more cost-effective than the lifetime medical costs associated with SCD. If CMS can negotiate prices for gene therapies that are close to or lower than the lifetime burden of medical costs for SCD, it could lead to significant long-term savings for the healthcare system. Payments to manufacturers would be tied to improved patient health outcomes, ensuring that money is spent on effective treatments. By potentially curing SCD, the model could eliminate or greatly reduce the need for ongoing treatments, hospitalizations, and management of complications associated with the disease. If successful, CMS has indicated that this model could be expanded to include other conditions, potentially leading to broader cost savings across multiple disease areas. One potential problem, which we discussed with American Action Forum President Douglas Holz-Eakin in a recent interview, is that determining the causal factors to improved patient outcomes is complicated, which means that outcome-based payment frameworks haven't, historically, been the huge money-savers that proponents expected them to be. It's still worth trying in this instance, though, because SCD is so damaging and expensive.
#ILAStrike — It looks like the ILA port strike has ended after the International Longshoremen’s Association and United States Maritime Alliance announced they would extend their current master contract until Jan. 15, 2025. So this is hardly a long-term settlement, though it will go back to the background for now, and stop affecting the Presidential race.
SEE ALSO: Opinion: How to Fix the ILA Strike →
#Cyber #Chyna — Hackers tied to the Chinese government successfully performed a devastating cyberattack against the US, tapping into the networks that US law enforcement uses to set up wiretaps, according to a report by the Journal's Sarah Krouse, Dustin Volz, Aruna Viswanatha, and Robert McMillan. In other words, it looks like any time US law enforcement listened in to someone, the Chinese government was listening in as well. One obvious way in which this is spectacularly damaging is that it gave the Chinese real-time information on who the US government suspected of being a Chinese spy. Just catastrophic.
#TaxPolicy — Does Kamala Harris understand her own policies? One of her famous policies was "$50K for new small businesses." The actual proposal is a tax credit, but describing it in a recent podcast interview, she seemed to believe her policy was a grant.
Chart of the Day
Ryan Burge is a sociologist of religion who puts out very good charts on facts about religion and society. This one is particularly striking: it seems to suggest, as demographer Lyman Stone put it, that "the wave of secularization may be peaking—particularly due to a rise of religiosity among men!" Burge has a Substack where he puts out his graphs, and it is very much worth checking out.
