INSIGHT Issue 24 (2022)

YOUR MONEY, THEIR AGENDA

Wall Street’s progressive financial agenda meets resistance at the state level

By Kevin Stocklin

JUNE 17–23, 2022 | $6.95

NO. 24

Editor’s note

Your Money, Their Agenda major financial institutions are

increasingly using the massive amounts of funds they represent to push society in a certain direction.

This new phenomenon has the potential to reshape America in fundamental ways.

Using “environmental, social, and governance” (ESG) measurements to direct investment decisions, institutions including banks, pension funds, and ratings agencies are pushing for a transition to “a net zero world.”

As BlackRock CEO Larry Fink said earlier this year, “You have to force behaviors and, at BlackRock, we are forcing behaviors.”

BlackRock is just one of many asset managers, but it’s the world’s largest, representing some $10 trillion in assets.

There is pushback against ESG-based investing, however.

“The problem here is that it’s other people’s money they’re using, and people don’t want their retirement money used for political purposes,” Missouri State Treasurer Scott Fitzpatrick said.

Besides the ideological nature behind the push, other reports have suggested ESG investing would give lower returns due to higher fees.

“If they were ever to admit what they’re really doing, they would be creating untold liability for themselves,” Fitzpatrick said.

As a result of these concerns, 23 states have taken some form of action to resist.

Read this week’s Insight cover story to learn about the impact of ESG and the push to transform society.

Jasper Fakkert Editor-in-chief

2 I N S I G H T June 17–23, 2022

JASPER FAKKERT EDITOR-IN-CHIEF CHANNALY PHILIPP LIFE & TRADITION, TRAVEL EDITOR

ON THE COVER Large financial corporations are using the assets they manage to reshape our society, but some states are pushing back.

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CHRISY TRUDEAU MIND & BODY EDITOR CRYSTAL SHI HOME, FOOD EDITOR SHARON KILARSKI ARTS & CULTURE EDITOR BILL LINDSEY LUXURY EDITOR BIBA KAJEVICH ILLUSTRATOR SHANSHAN HU PRODUCTION CONTACT US THE EPOCH TIMES ASSOCIATION INC. 229 W.28TH ST., FL.7 NEW YORK, NY 10001 ADVERTISING ADVERTISENOW@EPOCHTIMES.COM SUBSCRIPTIONS, GENERAL INQUIRIES, LETTERS TO THE EDITOR HELP.THEEPOCHTIMES.COM (USPS21-800)IS PUBLISHED WEEKLY BY THE EPOCH MEDIA GROUP, 9550 FLAIR DR. SUITE 411, EL MONTE, CA 91731-2922.

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vol. 2 | no. 24 | june 17–23, 2022

26 | Legalization Fails

49 | Gas Prices

28 | Bail Boomerang

50 | Healthy

Overdoses surged after a drug legalization experiment in Oregon.

High gas prices are an indictment of recent energy policy.

Criticism There are times when a healthy dose of truth is needed.

Seeing bail reform fail, a lawyer enters politics to buck the trend.

30 | No Deal,

52 | China’s Leverage

Green Deal Treasurers in states battered by ESG ratings are fighting back.

The U.S. is too reliant on Chinese-made technology, Sen. Marco Rubio says.

34 | Dust Storm Fever

Mega drought conditions on the West Coast are tied to the spread of an incurable disease.

44 | Baby Formula Crisis Manufacturers struggle with labyrinthine regulations written four decades ago.

45 | China Tariffs

Team Biden’s plans could make life more difficult for Americans.

46 | Consumer Spending Households are losing the wherewithal to keep up their spending.

47 | Farmer Sentiment

U.S. farmer sentiment takes a dive as farm input costs skyrocket.

48 | Global Food Crisis

Food shortages result from years of government intervention.

56 | Live Like a Sultan

Features 12 | Protecting Pension Funds State officials are taking on Wall Street’s progressive “environmental, social, governance” financial agenda.

THE LEAD

16 | Maine Shelters Overrun A flood of asylum-seekers, most of whom crossed the border illegally, has rattled Maine’s idyllic communities.

38 | Space Competition The U.S.–China race for military innovation in space will hinge on the commercial sector.

Federal Reserve Board Chairman Jerome Powell speaks during a news conference in Washington on June 15. The Fed raised the benchmark interest rate by 75 basis points, the largest rate hike since November 1994, as part of its effort to tame soaring inflation.

DREW ANGERER/GETTY IMAGES

If you seek an exotic home, consider this Moroccan estate.

58 | A Cup of Tradition

With more than 2,500 coffeehouses to choose from, it’s easy to find one you’ll love in Vienna.

60 | Beautiful

Investments Consider classic art as an investment to diversify your portfolio.

63 | Travel Fitness

A sampling of gear to keep you fit on business trips and vacations.

66 | High-Flying Pie

Combine taking a photo on Maverick’s bike with some great pie.

67 | Great Kids

Several suggestions to help young people gain respect.

I N S I G H T June 17–23, 2022 3

T H G IL T O P S ‘Strawberry Moon’ A FULL MOON, KNOWN AS THE “STRAWBERRY MOON,” behind the Temple of Poseidon at Cape Sounion, south of Athens, Greece, on June 14. The full moon was at its closest point to the Earth this orbit, allowing spectators to view the lowest full moon of the year.

PHOTO BY ANGELOS TZORTZINIS/AFP VIA GETTY IMAGES

4 I N S I G H T June 17–23, 2022

I N S I G H T June 17–23, 2022 5

SHEN YUN SHOP

Great Culture Revived.

Fine Jewelry | Italian Scarves | Home Decor

ShenYunShop.com

6 I N S I G H T June 17–23, 2022

Tel: 1.80 0.208.2384

NAT ION • WOR L D • W H AT H A P P E N E D T H I S W E E K

The Week

No. 24

A space shuttle intersects Earth’s horizon in space, in this file photo.

PHOTO BY NASA VIA GETTY IMAGES

US–China Space Race Heats Up A law that allows for the possession of heroin, cocaine, meth, and other drugs in Oregon has failed to stem a flood of addiction and death. 26

A lawyer saw New York’s system evolve from being too harsh to embracing rehabilitation.

Bail reform ruined it all. 28

38 Environmental, social, and governance ratings are battering states and choking off capital for the fossil fuel industry. 30

INSIDE I N S I G H T June 17–23, 2022 7

The Week in Short US

2u s e r a n e,gr dilr e h c r u O“ lat nem a ecaf e w dna ruo ni si rc ht laeh ” . yr t n u o c

$500,000 SETTLEMENT

Rep. Mary Miller (R-Ill.), on social issues that are driving individuals to commit mass shootings.

“An armed individual can be a citizen; a disarmed individual will be a subject.”

Retired Lt. Col. Allen West, on why the Founding Fathers created the Second Amendment.

John Hinckley Jr., who tried to assassinate former President Ronald Reagan 41 years ago, has been fully released from court oversight.

$1

BILLION President Joe Biden has announced that the United States will provide another $1 billion in aid to Ukraine’s military for advanced rocket systems, artillery, and coastal defenses.

21%

Sen. Ron Wyden (D-Ore.) has proposed a bill to punish U.S. oil companies by placing a 21 percent surtax on profits that exceed 10 percent.

23,000 ACRES — For the second time in less than two months, thousands of residents of Flagstaff, Arizona, have fled their homes in the face of yet another wildfire. The Pipeline Fire has so far destroyed nearly 23,000 acres, including a home and an outbuilding, northeast of Flagstaff.

8 I N S I G H T June 17–23, 2022

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41 YEARS

Seattle authorities have agreed to pay $500,000 to settle a lawsuit that pinned the 2020 shooting death of a man in the Capitol Hill Autonomous Zone on city officials who had allowed the zone to operate largely without a police presence.

The Week in Short US VACCINES

FDA Advisory Panel Recommends COVID-19 Vaccines for Babies, Toddlers A FOOD AND DRUG ADMINISTRATION

(FDA) advisory panel has unanimously voted to recommend the FDA give emergency authorization to the Moderna and Pfizer COVID-19 vaccines for children as young as 6 months of age. If the FDA accepts the panel’s recommendations, then the Centers for Disease Control and Prevention will take up the matter with its advisory panel.

Mayra Flores (C) speaks to supporters after winning the Texas 34th Congressional District special election, in San Benito, Texas, on June 14.

TEXAS

Republican Mayra Flores Flips Texas US House Seat in Special Election REPUBLICAN MAYRA FLORES has won the special election to fill the vacant

Texas Congressional District 34 seat, flipping a heavily Hispanic district to the Republican Party.

“I’m forever grateful,” Flores said in a victory speech, her voice breaking with emotion. “For 100 years, we have been taken for granted.”

The victory proves that Republicans have made significant inroads in the heavily Hispanic Rio Grande Valley, which Democrats have dominated for decades.

Flores will be the first Mexican-born woman to serve in Congress.

Flores, who is a legal immigrant from Mexico and is married to a Border Patrol officer, campaigned on the idea that Democrats have taken Latinos for granted. She ran as a pro-life and pro-Second Amendment candidate, blaming Democrats for soaring food and gas prices.

A vial of a children’s dose of the PfizerBioNTech COVID-19 vaccine at Hartford Hospital in Hartford, Conn., on Nov. 2, 2021.

CANNABIS

PRESIDENT JOE BIDEN’S administra-

Thin Evidence of Cannabis Pain Relief Benefits: Study A FEDERALLY FUNDED STUDY reviewing research on cannabis has found

very little concrete evidence of its benefits as a chronic pain reliever, despite popular media and academic coverage of its medicinal potential.

Cannabis has been marketed for years as a pain reliever and as a replacement for opioid drugs prescribed to chronic pain patients.

However, researchers examined more than 3,000 studies in the scientific literature and found only a total of 25 studies had scientifically valid evidence of its benefits for acute pain, with no valid studies supporting them A woman shops at a marijuana dispensary in Portland, Ore., on Oct. 4, 2015. as chronic pain analgesics.

POLICY

Biden Admin Plans to Extend COVID-19 Emergency, Official Suggests tion plans to extend the emergency declaration over COVID-19 before it expires, an official indicated.

Dawn O’Connell, the administration’s assistant secretary for preparedness and response, said on Capitol Hill during a Senate hearing that the administration is sticking with its promise to give states ample notice prior to terminating the public health emergency declaration.

“We will give 60 days’ notice before it comes down,” O’Connell told Sen. Richard Burr (R-N.C.), the top Republican on the Senate Health Committee.

Health Secretary Xavier Becerra last extended the emergency on April 12 for 90 days. That means it would expire in mid-July unless it were extended again.

I N S I G H T June 17–23, 2022 9

The Week in Short World AUSTRALIA

Study Shows Causal Relationship Between Vitamin D and Dementia AN AUSTRALIAN STUDY has found

Mechanics work at an assembly line at the Volkswagen plant in Hanover, Germany, on June 16.

EUROPE

Inflation Heats Up in Eurozone, Hitting Record High in May INFLATION IN THE 19 COUNTRIES that share the euro currency jumped

CHINA

China Abusing Interpol Red Notices to Track, Detain Overseas Dissidents: House GOPer

WORLD

Monkeypox Cases Around the World MORE THAN 30 COUNTRIES where

monkeypox isn’t endemic have reported outbreaks of the viral disease, as confirmed cases approach 1,900, most of them in Europe.

Monkeypox, which spreads through close contact and was first found in monkeys, mostly occurs in West and Central Africa and only very occasionally has spread elsewhere.

CHINESE OFFICIALS are using Interpol Red Notices to enlist other countries’

law enforcement resources in the regime’s international campaign to harass, intimidate, silence, and detain critics of the communist dictatorship who are living overseas, according to a Republican House member.

“China is using [Red Notices] for purposes of political suppression, getting people extradited back to China, again for the purpose of political suppression, and not necessarily because they’ve committed crimes that would be considered anything other than free speech,” Rep. Brian Mast (R-Fla.) said at a hearing of the Congressional-Executive Commission on China.

Mast was referring to the notices that are issued by Interpol, the international law enforcement cooperative, and which its 195 member countries use in order to share information about individuals being sought in criminal cases.

10 I N S I G H T June 17–23, 2022

Health workers screen passengers arriving from abroad for monkeypox symptoms, in Chennai, India, on June 3.

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to a record high in May, according to Eurostat, the EU’s statistical agency, with soaring energy prices driving the bulk of the uptick.

Eurostat said in a statement that inflation in the euro area jumped to an annualized 8.1 percent last month, up from 7.4 percent in April and the fastest pace on record.

The swell of easy money that flooded markets to bolster struggling European economies in the wake of pandemic shutdowns, along with various supply chain dislocations that drove up material and shipping costs, and now disruptions related to Russia–Ukraine conflict, have all factored into skyrocketing inflation.

that vitamin D levels have a causal relationship with the development of dementia, with both inadequacy and excessive levels of the vitamin associated with a smaller brain volume.

“Our findings have important implications for dementia risks,” professor Elina Hypponen from the University of South Australia said. “In this UK population, we observed that up to 17 percent of dementia cases might have been avoided by boosting vitamin D levels to be within a normal range.”

The findings indicate that individuals who are inadequate in vitamin D— having a level below 12 nanograms per milliliter—have a 54 percent greater risk of dementia, as compared to individuals with levels at around 20 ng/ml, the level recommended by the National Academy of Medicine.

World in Photos

1.

3.

2.

1. A resident throws a bottle of drinking water to her neighbor as sea water gushes into a residential area during high tide in Mumbai, India, on June 15.

2. A participant competes during the men’s Downhill Competition of the UCI Mountain Bike World Cup in Leogang, Austria, on June 11.

3. The colorful buildings of Bogota, Colombia, on June 14, just five days before the runoff presidential election to be held on June 19.

4. Staff members of the Royal National Lifeboat Institution help migrants to disembark from a lifeboat after they were picked up at sea while attempting to cross the English Channel, on the southeast coast of England on June 15.

4.

4.

I N S I G H T June 17–23, 2022 11

PENSION FUNDS

State Officials Take on Wall Street’s Progressive Push 23 states are taking action to prevent state pension funds from being used to support the ‘environmental, social, governance’ financial agenda

By Kevin Stocklin

The New York Stock Exchange on Jan. 28, 2021.

PHOTO BY SPENCER PLATT/GETTY IMAGES

12 I N S I G H T June 17–23, 2022

The Lead Investment

fter failing to advance their agenda by passing laws in Congress, progressives have found that they can impose their will on Americans just as effectively through our financial system. And while some state officials have recently started to fight back, they are heavily outgunned.

The world’s largest asset managers—BlackRock, State Street, and Vanguard—have signed on to the global Net Zero Asset Managers initiative, to together use the $20 trillion of other people’s money that they manage to pressure companies whose shares they own into pursuing environmental and social justice causes.

Progressive state pension fund managers in California, New York, Maryland, and even Texas are doing the same with the trillions in retirement funds that they manage.

The various elements of this ideology have come together under the umbrella of environmental, social, and governance (ESG) investing, and its advocates now include the world’s largest banks, asset managers, pension funds, rating agencies, and proxy agents, as well as numerous international corporate clubs including Climate Action 100+, the Global Investor Statement to Governments on the Climate Crisis, the Net Zero Asset Managers initiative, and the Glasgow Financial Alliance for Net Zero.

ESG ALSO HAS THE SUPPORT of the Biden admin-

istration’s Securities and Exchange Commission, which announced in March that it will require all listed companies to provide extensive reporting on their greenhouse gas emissions; the Department of Justice, which recently declared it would focus on “environmental justice”; and the Department of Labor, which announced it will no longer enforce a Trump-era regulation that barred private pension managers from including political causes, such as ESG, in their investment decisions.

The collective goal of these groups is to leverage their financial power to enforce the behavior that they want to see, targeting in particular fossil fuel producers and the gun industry. “Behaviors are going to have to change,” BlackRock CEO Larry Fink stated in a panel discussion in March. “You have to force behaviors and, at BlackRock, we are forcing behaviors.”

BlackRock is the world’s largest asset manager, with $10 trillion in assets under its management.

In his 2022 letter to CEOs, Fink wrote that “every company and every industry will be transformed by the transition to a net zero world.” Bloomberg News reported that ESG financial assets are growing exponentially and will reach $50 trillion by I N S I G H T June 17–23, 2022 13

The Lead Investment

2025, representing more than one-third of the $140 trillion in assets under management worldwide.

But some state officials see the ESG movement as a misuse of money that was entrusted to asset managers by pensioners. A study by Boston College’s Center for Retirement Research reported that ESG investing had reduced returns to pensioners by 0.7 to 0.9 percent annually, largely because ESG investment funds, which are actively managed, charge higher fees than nonmanaged index funds. This means higher profits for asset managers and less money for retirees.

And considering all the added costs, many are questioning whether ESG investing is doing much for the causes it claims to support. A research report by Columbia University and the London School of Economics stated that companies in ESG funds have “worse track records for compliance with labor and environmental laws, relative to portfolio firms held by non-ESG funds.”

TESLA CEO ELON MUSK recently called

14 I N S I G H T June 17–23, 2022

A BlackRock office in New York on Jan. 16, 2014. BlackRock is the world’s largest asset manager, with $10 trillion in assets under its management. laws restricting abortion in conservative states and has curtailed lending to gun makers and retailers—all of which are political causes that have nothing to do with running their businesses. The Wall Street Journal reports that activist asset managers are now putting pressure on Walmart, Lowe’s, and T.J. Maxx to take a stand against abortion restrictions.

But for all the headline-grabbing statements from CEOs on political and social issues, progressive asset managers have been content to operate quietly behind the scenes in boardrooms, shareholder meetings, and global conferences.

“If they were ever to admit what they’re really doing, they would be creating untold liability for themselves,” Fitzpatrick said. “It’s inviting lawsuits galore for people who can say, ‘You have violated your financial duty to us.’”

Utah State Treasurer Marlo Oaks said:

“As an asset manager, the only thing you have is trust. If you violate that trust, your business is gone. The investment managers that are pushing this agenda are ultimately risking the very franchise that they’re using to drive it.”

By colluding against fossil fuel companies, Oaks said, banks and asset managers “are actively implementing economic sanctions.”

“We need more capital going into oil and gas production, and there are great opportunities there to make money. Why isn’t the money going there? Why aren’t capital markets working, like they have in the past? It’s because of ESG,” he said.

One by one, conservative states are starting to push back through legislation and legal action. Kreifels said that 23 states have taken some form of action, 13 of which have introduced formal legislation, to prevent state money from

CLOCKWISE FROM L: ANDREW BURTON/GETTY IMAGES, LUDOVIC MARIN/AFP VIA GETTY IMAGES, JOE RAEDLE/GETTY IMAGES

ESG “an outrageous scam,” adding that it had been “weaponized by phony social justice warriors.”

Missouri State Treasurer Scott Fitzpatrick said: “If BlackRock has their own money and they want to be activist investors, I think people have the right to deploy their own capital as they see fit.

“The problem here is that it’s other people’s money they’re using, and people don’t want their retirement money used for political purposes.”

Increasingly, state officials are discovering how state pension money is being used to support “the religion of global climate change,” said Derek Kreifels, CEO of the State Financial Officers Foundation. “Now we’re seeing the veil drop on how they’re weaponizing it. Now they’re starting to include all these other [social] issues as well.”

Activist asset managers use their proxy authority over investors’ votes to influence corporate executives, and this explains to a great extent why Disney, a producer of family entertainment, now advocates for sex education in elementary schools; why Delta Air Lines, Coca-Cola, and Major League Baseball fought against Georgia’s voter ID law; and why Citibank has fought against

The Lead Investment

“You have to force behaviors and, at BlackRock, we are forcing behaviors.”

Larry Fink, CEO, BlackRock

money—to push their own political agendas and force social change.”

In December, Florida revoked proxy authority for asset managers, meaning they no longer have discretion to vote the shares that they manage for Florida pensioners. Gov. Ron DeSantis stated that this will “clarify the state’s expectation that all fund managers should act solely in the financial interest of the state’s funds.”

In November, Arizona Attorney General Mark Brnovich launched a formal investigation into progressive financial institutions’ “anticompetitive conduct,” accusing them of “intimidating and threatening companies if [those companies] do not comply with their leftwing agenda.” being used to support political causes.

This, The New York Times wrote, has had a “chilling” effect on progressive initiatives, though how much of an effect remains to be seen.

In May, Oklahoma passed the Energy Discrimination Elimination Act, modeled on laws that were passed in Texas last year, which bars the state from conducting business with banks or asset managers that discriminate against fossil fuel companies. A similar bill in Oklahoma does the same for those that discriminate against gun manufacturers.

Last week, Kentucky Attorney General Daniel Cameron issued a legal opinion stating that the use of state pension money for ESG was a conflict of interest and was “inconsistent with Kentucky law governing fiduciary duties.” Cameron criticized the “increasing trend among some investment management firms to use money in public and state employee pension plans—that is, other people’s

ALSO IN NOVEMBER, Louisiana barred

JPMorgan Chase from underwriting its municipal bonds because of its policies against gun manufacturers. West Virginia and Texas recently passed legislation that blocks finance companies that discriminate against fossil fuel producers from participating in municipal contracts.

“Next week, we’ll be sending out letters to financial institutions that are going to be put on a list that is going to bar them from contracts in the state of West Virginia,” said Riley Moore, West Virginia’s state treasurer.

“We’re an energy state and this is an existential threat to our economy.

“We need energy independence in this country.”

Countries in Europe are now realizing that their green energy policies have caused unaffordable price spikes for fuel, led to a risk of blackouts when the wind

doesn’t blow, created a dangerous dependence on countries like Russia, and, in many cases, actually increased the carbon footprint.

“It’s because they rushed into this ESG nonsense,” Moore said. “You can call it sustainable, but it can’t sustain a grid.”

In addition to what many see as a misallocation of state pension money, there are the bigger legal and societal issues around using the financial system to “force behaviors.”

“This seems to me to be using Wall Street to accomplish what the left was unable to accomplish through democratic means,” Nebraska State Treasurer John Murante said. If their policies had public support, progressives could enact laws democratically through Congress, he said. Instead, “they’re going around the democratic process and attempting to do indirectly what they were incapable of doing through persuasion and logic and reason.”

ESG investing would lose in the court of public opinion “because it’s incredibly unpopular.”

“ESG is the 2023 version of CRT,” Murante said, referring to critical race theory in schools. “It has been integrated into institutions without people knowing about it, but when they become aware of it, there is genuine national outrage.”

Going up against the world’s largest financial institutions and the Biden administration is a formidable task for state finance officials, however, and they have a long and difficult road ahead. But Murante says he’s feeling optimistic.

“We have three profound advantages on our side,” he said. “First, we’re right on the issues; second, we’re right on the law; and third, we have the people with us.”

“It’s a David and Goliath situation,” Kreifels said. “But David won.”

An oil pumpjack pulls oil from the Permian Basin oil field in Odessa, Texas, on March 14.

I N S I G H T June 17–23, 2022 15

Asylum-seekers Samantha (2nd L), Sylvie (C), and Landry (R) outside an overcrowded family shelter in Portland, Maine, on May 25.

MAINE

ASYLUM SEEKERS

OVERRUN SHELTERS IN PORTLAND Locals shaken by spike in crime TEXT AND PHOTOS BY STEVEN KOVAC 16 I N S I G H T June 17–23, 2022

I N S I G H T June 17–23, 2022 17

In Focus Immigration

P

ORTL AND, MAINE— Facing an impending humanitarian crisis, Portland Family Shelters Director Mike Guthrie has a simple message to anyone who will listen: “We need help!”

“Our family shelter facilities, our warming room, and even area hotel space is at capacity. We have maxed out our community resources,” Guthrie, a hands-on, frontline worker in the effort to feed, clothe, and house a continuous flow of foreign nationals arriving in Portland by airplane or bus from the U.S. southern border, told Insight.

“The time is coming when I’m going to have to look a dad in the face and tell him and his family that I don’t know where they’re going to sleep tonight.”

The Portland Family Shelter is a complex of four rented buildings in various states of renovation located in the heart of downtown.

Some of the structures are gradually being converted into small apartments where up to four families will share a single kitchen and bathroom.

All four buildings are overflowing their present capacity.

“The intake is greater and faster than we can process,” Guthrie said.

To accommodate the stream of new arrivals, the family shelter program has, in recent months, placed 309 families (1,091 people) in eight hotels located in five neighboring municipalities spread over three counties of southeastern Maine’s prime tourist and vacation region.

Those moves, with their attendant complications and problems, have resulted in some pushback from the local Mainers who fear that their prized relaxed lifestyle may never be the same.

And they resent not having a voice in any of it.

“It’s just part of the state government’s plan to bring the slums to the suburbs,” said a Mainer from the resort and tourist community of Kennebunkport, a small town about 28 miles down the Atlantic coast from Portland. “The United States cannot rescue Africa.”

Coming out of the Kennebunkport post office, long-time Mainers Virginia and Robert shared their opinions on what the locals see as the “invasion” of Maine by immigrants.

18 I N S I G H T June 17–23, 2022

“We have sympathy for the asylumseekers, but resources are over-extended and now it’s going beyond Portland.”

Virginia, local resident

“We have sympathy for the asylum-seekers, but resources are over-extended and now it’s going beyond Portland,” Virginia said.

Robert said, “Eventually, it’s going to impact our quality of life.”

Pressures on Portland’s homeless shelter capacity last year inspired a York County community action group

to obtain a federal grant to help house the city’s regular homeless population.

The plan included renting half a dozen large motels in a three-mile corridor in the heart of southeastern Maine’s Atlantic-shore tourist region.

Motels within walking distance of shopping opportunities were selected.

The motels close in the off-season, so it appeared to some people to be a win-win arrangement.

Included in the plan was the small, quiet resort town of Wells, located about six miles from Kennebunkport.

Although the program sheltered hundreds of people from the brutal Maine winter, the resulting wave of never-before-seen vandalism, burglaries, and other property crimes in the commercial district forced the City of Wells to evict every tenant for violations of several municipal ordinances.

Homeless Victimized and Intimidated According to Capt. Gerald Congdon of the Wells Police Department, the crimes weren’t committed by foreign

In Focus Immigration

(Left) A motel in Wells, Maine, that was used to shelter the homeless of Portland on May 26.

(Above) Mike Guthrie, director of the family shelter in Portland, Maine, on May 25. Guthrie said the state is footing 70 percent of the family shelter’s expenses, with the city making up the remaining 30 percent.

asylum-seekers, Wells residents, or the many legitimate, disadvantaged, and debilitated people housed in the motel.

The vast majority of asylum-seekers transferred from the southern border crossed the border illegally. In 2021, the United States rejected 63 percent of asylum claims, according to a tracker maintained by Syracuse University.

“The perpetrators arrested were mostly ‘couch-surfers’ spending time with homeless friends staying legally at the motel. However, the bulk of grant-qualified motel dwellers had drug problems,” Congdon said.

One small business operator, whose sweetshop was burglarized, told Insight “The thieves were druggies in need of a fix. They came in through a window, stole the cash from the register, and took our digital scales.

“These people were brought in around Christmastime. It was like an invasion.

We never had a crime at our store before they came in and ruined things.

“It’s not fair. We now think differently.

They changed the whole landscape of how we do business. We don’t want to

see them come back.”

Congdon told Insight: “There was shoplifting at the bigger chain stores and car break-ins going after loose change in the strip mall parking lot.

“A small bike shop was burglarized twice, losing thousands of dollars worth of high-end bicycles—never happened to them in 42 years of business.

“Our officers spent a lot of time on disturbance calls and enforcing warrants.

We made quite a few arrests and recovered some stolen property.

“The management of the area’s motels got tired of seeing us there. They were tired of their legitimate businesses being associated with crime.

“The nice tenants, many of whom are truly deserving of help, were being victimized and intimidated. They were afraid to call us.”

He said his department wasn’t consulted and was given no advance notice on the plan to bring hundreds of homeless people—including many known drug addicts—into their city.

The City of Wells wasn’t compensated for the additional hours of policing.

‘Feeder Sources’ On May 1, a hotel in the resort town of Old Orchard Beach, located about halfway between Portland and Kennebunkport, evicted all of its residents for a different reason.

This time, the asylum-seekers were evicted in order to make room for the arrival of legally permitted temporary seasonal workers to lodge there. These special visa holders make up the majority of the workforce needed by the region’s thriving hospitality industry.

The asylum-seekers were relocated to motels in three other southern Maine communities, according to Portland city officials.

In Portland, 500 single asylum-seekers are housed in a municipal shelter separate from the family shelter, according to a spokesperson for the city.

It too is at capacity.

Guthrie told Insight that city authorities have publicly notified what he calls “the feeder sources” at the southern border and in Washington about the immigration crisis unfolding in Portland.

The city administration asked I N S I G H T June 17–23, 2022 19

In Focus Immigration

Border Patrol, Health and Human Services, and participating nonprofits to stop sending asylum-seekers to Portland until sufficient resources become available to adequately care for them.

But the force of the city’s request was blunted when it announced immediately after the notification that it wouldn’t turn anybody away, Guthrie said.

He said the city asked Maine Gov. Janet Mills, a Democrat, to call out the National Guard to set up emergency shelters and feeding stations, but hasn’t yet received an answer.

On June 2, in remarks before the Portland Regional Chamber of Commerce, Mills committed the state to build a new emergency shelter in the city and said she was working to create additional housing for asylum-seekers in the area.

She also spoke of the desirability of in-migration as a source of labor to fill many existing job openings.

Speaking of the migrants, Mills said: “We need the workforce here. We want them to be available for work. Some of them come with incredible skills and experiences that we can employ.”

One long-time Maine resident who visited the Portland Family Shelter to see the situation for himself told Insight, “Mike Guthrie is like a man frantically trying to bail out a sinking rowboat while his superiors continue to drill holes in it.”

During the month of May, the family shelter took in 79 families consisting of 262 individuals with no slowdown in sight, Guthrie said.

“Two hundred and twenty-two people turned up in just 20 days. We’re trying to help anybody that comes to the door.

Guthrie said that Portland is often recommended to people enroute to the United States by relatives who are already living in the city.

Thus far, nobody coming to us has had to sleep outside but we can no longer guarantee shelter upon arrival,” he said.

“We need the state of Maine to step in and create safe places for these people.

We need a facility to be created and run like a FEMA camp.

“Our legislators are talking about buying and renovating older apartments throughout the region that could house 140 families. That’s great in the longterm, but the problem is now!

“At the rate things are going, we’d have those places filled in two months.

Then what?”

Portland’s pastors, church members, and citizens have been stepping forward to do what they can.

“Local churches and those in Cumberland are offering space for people to sleep and some Portland residents have even opened up their homes,” Guthrie said.

Where Are the Asylum-Seekers Coming From?

The vast majority of the new arrivals at the family shelter in Portland have come from Angola and the Congo in Africa, with some coming from Haiti in the Caribbean.

They make the arduous and often dangerous journey any way they can— largely on foot.

Guthrie told the story of a father and child who recently showed up at the shelter.

“The man said that his wife, the young child’s mother, died on the way. She was swept away while crossing a river.”

Guthrie said the route to Portland for most of the asylum-seekers begins in chaos-torn western equatorial Africa.

“They cross the Atlantic to South America. They go up through South America and then north through Central America, ending up in northern Mexico, from which they cross the southern border into the United States,” he said. “At that point, they present themselves to Border Patrol.

“A new arrival tells Border Patrol: ‘I am here to seek asylum. If I go back home, I will be killed. I fear for my life.’ That’s the difference between an asylum-seeker and an immigrant.”

Those three short sentences guarantee a person’s admission for a lengthy stay in the United States as his or her claim is adjudicated.

Guthrie said: “After some additional questioning, the individual is issued minimal paperwork by immigration authorities and told they will be contacted about a formal hearing on their asylum plea. They are then turned over to the U.S. Department of Health and Human Services.”

A beach in the tourist region of southeastern Maine on May 26. Portland Family Shelters has in recent months placed 1,091 people across three counties of the region’s prime tourist and vacation areas.

20 I N S I G H T June 17–23, 2022

In Focus Immigration

(Left) Samantha, a young Angolan mother, and her child outside a family shelter in Portland. “We are not happy. Conditions are not good! We really need help,” she said.

(Above) Sylvie with her son, who are seeking asylum in Portland. “I am not happy for how I am living here. I don’t feel welcome!” she said.

Most are given cellphones.

Public servants with the Department of Health and Human Services and representatives of various U.S. nonprofit, philanthropic organizations, ask the asylum-seekers where they want to go in the interior United States to await their asylum hearing.

For many, their answer is “Portland.”

“They are then put on buses or airplanes and sent on their way,” Guthrie said.

Why Portland?

Guthrie said Portland is often recommended to people en route to the United States by relatives who are already living in the city.

“Once they get here, the majority of the new arrivals want to stay in Portland. They tell their relatives and friends about us,” he said.

Jessica Grondin, the city’s director of communications and media, told Insight: “Portland is happy about and proud of our good reputation as a ‘Welcoming City.’ We presently have a large Somali population, as well as many Iraqis and Afghans who arrived here previously.”

Grondin said several busloads of asylum-seekers recently shipped off

to Washington by Texas Gov. Greg Abbott, a Republican, ultimately made their way to Portland.

She said that, along with the lack of housing, one of the biggest problems facing the city is a shortage of staff to care for the volume of new arrivals.

Guthrie said the influx of asylum-eekers has exceeded the city’s ability to offer basic services.

“As we outgrow our past limits, we are being forced to prioritize what we are doing for these people. We are no longer able to help them connect with local immigration attorneys, nor help them learn English,” he said.

Effective May 7, a policy change took effect forbidding the shelter’s staff from assisting asylum-seekers in finding an apartment.

“Instead, these folks, who are complete strangers to this community and speak no English, are being qualified for a state General Assistance housing voucher,” Guthrie said. “They are given a sample lease, a rental form, and an explanation of the GA process, and are then sent out on their own to find a place to live.”

While most of the new arrivals speak Portuguese, some speak French, Lingala,

or another tribal language. Many are bilingual, but none speak English.

Weary of waiting around, some of the French speakers asked to be sent to Quebec, but strict Canadian rules concerning COVID-19 prevented them from entering, according to Guthrie.

Condition and Needs of Asylum-Seekers Guthrie described the migrants’ situation.

“Understand, the majority of these people arrive here with no money. They spent their life savings during their trip and have to start over. They need everything,” he said. “They come from hot climates wearing summer clothes.

We have given away about 97 percent of our clothing stock to help them cope with the colder weather here in Maine.

“We have to keep many people outside during the day and then pack them into our warming room for the chilly Maine nights or on rainy days.”

Fathers, mothers, and their numerous small children are kept outside all day long. They stand on the sidewalk across the street from the shelter or sit in an alley between two old houses passing the time until the next meal.

I N S I G H T June 17–23, 2022 21

In Focus Immigration

The grimy concrete and stony gravel such as fufu (an African staple), goat of the alley serve as furniture. There meat, greens, chicken, and rice, he are no chairs or tables. They sit or re- said. cline on whatever is at hand or on the A lot of the accommodations don’t bare dirt. have kitchens.

The shade formed by the receding According to Guthrie, the cost per shadow of the walls of the surround- motel room is between $250 and $350 ing old buildings is their only com- dollars per night and is rising as tourfort. Antsy and bored small children ist season begins. have no toys with which to amuse MIRC is part of a network of 85 statethemselves, except for one little boy wide organizations involved in the who rides a plastic big-wheel tricycle care of the thousands of asylum-seekaround the alley. ers already there and those that are A small bathroom is available to peo- arriving daily. ple upon request in one of the shelter’s Guthrie said the state is footing buildings or at a nearby city-owned 70 percent of the family shelter’s singles’ shelter around the block. expenses, with the city making up “For showers, the remaining we team up with 30 percent. But a local church he said getting that comes by the children into with a bus and school is among offers showers the best assisto any of them tance that can be that want to go,” provided.

Guthrie said.

“The schools When asked if offer all kinds the asylum-seekof different proers are Christians, grams. They have Guthrie answered community rethat many ride a source officers. bus to church serThey keep the vices on Sunday kids busy while mornings. giving them two The she lte r meals a day,” he provides famisaid. lies with three More than 60 meals each day, different foreign prepared off-site languages are spoby “community ken by students Mike Guthrie, director, partners.” at Portland-area Portland Family Shelters “We pick up the schools, further meals and bring complicating evthem here and serve them indoors. ery task associated with education.

The food is decent. A typical lunch is When asked about the overall health a sandwich, salad, soup, granola bars, condition of the asylum-seekers, snacks, milk, and water,” he said.

Guthrie said: “They are exhausted and Guthrie told Insight that the fami- scared. They haven’t traveled a safe ly shelter is providing standard baby route. Though clearly traumatized, formula for young children, but one very few will talk about the details of baby is intolerant to it. their experience. Counseling is availThis infant requires a specialty able if requested.” brand that’s hard to get—a fact that’s Teams of health care workers are upsetting to the mother and her child. performing what he calls “health outThe Maine Immigrants’ Rights Coali- reach.” They’ve set up clinics at some tion (MIRC) is providing asylum-seek- of the motels to perform triage and ers residing in hotels and motels with make any necessary medical referrals. some culturally appropriate foods, The City of Portland has a busy public

“A new arrival tells Border Patrol: ‘I am here to seek asylum.

If I go back home, I will be killed. I fear for my life.’ That’s the difference between an asylumseeker and an immigrant.”

22 I N S I G H T June 17–23, 2022

Dock Square in Kennebunkport, Maine, on May 25. Some local residents from the resort and tourist community fear their prized relaxed lifestyle may never be the same after the arrival of asylum-seekers. health clinic helping to provide treatment, but some people with more serious conditions end up in emergency rooms.

To overcome the language barrier, the city provides interpreters, and health care workers make use of cellphone translation apps.

On the whole, Guthrie said most of the people under his supervision are physically “very healthy.”

“Pregnancy is the families’ most urgent medical concern, and their most pressing medical need is OBGYN (obstetrics and gynecology) care,” he said.

He also said there’s some sickle cell disease among them.

City Hall allowed Insight access to several families being warehoused out-

In Focus Immigration

doors, and a number of parents were eager to talk about their current plight.

Speaking through an interpreter provided by the shelter and in the presence of Guthrie, Samantha, a young Angolan woman with a 10-month-old baby on her hip and a toddler in tow, wasn’t shy about sharing her dissatisfaction.

When asked if her family’s basic needs were being met, Samantha said: “We just need a place to sleep. We stay outside in the sun and the elements because there is not enough space for us indoors. There are not enough clothes for my family.

“Being outside all day is not good for my baby. Some of us have caught colds. Some had fevers. Some were so sick they went to the hospital.

“My son eats a special baby formula.

I have to ration his feeding.

“What we are fed is very different than

what we are used to. We are receiving no culturally appropriate food. There was no way for us to take a shower for five days.

“We endured a seven-month journey to come to this! We are not happy. Conditions are not good! We really need help.”

When asked if she felt welcome, Samantha answered with a look of disbelief.

“No! I do not feel welcome,” she said.

“Look at us. We are outside.”

Landry, a house painter and electrician’s helper, brought his wife Sylvie, 2-year-old daughter, and 12-month-old son to Portland from the Congo.

When asked why he risked the journey, Landry said: “I left my country because of political issues and insecurity. There we could be sure of nothing.

Here, it’s different.”

Sylvie said: “We came from Texas unprepared for this Maine weather.

I am not happy with how I am living here. I don’t feel welcome!”

60

MORE THAN 60 DIFFERENT FOREIGN

languages are spoken by students at Portland area schools, further complicating every task associated with education.

Lobsterman Tucker Soule unloads a trap at Cape Porpoise near Kennebunkport, Maine, on May 23.

I N S I G H T June 17–23, 2022 23

24 I N S I G H T June 17–23, 2022

T H G IL T O P S Bundles of Joy THREE FEMALE LYNX CUBS AFTER their first medical examination, at the Sainte-Croix animal park in Rhodes, France, on June 15. The babies, soon to be 1 month old, weigh just under 2 1/2 pounds and are less than 16 inches long.

PHOTO BY JEAN-CHRISTOPHE VERHAEGEN/AFP VIA GETTY IMAGES

I N S I G H T June 17–23, 2022 25

OPIOID EPIDEMIC

Drug Legalization in Oregon Failed, Officials Admit as Overdoses Skyrocket Law that allowed possession of heroin, cocaine, meth, and other drugs failed to stem flood of addiction and death

M

By Scottie Barnes ore than a year after Oregon became the first state in the nation to decriminalize drugs, officials are admitting the pioneering experiment

has failed so far.

Overdoses in just one county have jumped by 700 percent.

Seizures of fentanyl, marijuana, and opioids have skyrocketed.

Funding for programs intended to provide drug users with treatment has not materialized.

And very few drug users are showing any interest in obtaining that treatment.

The experiment began when Oregonians passed Ballot Measure 110 in 2020, which decriminalized the possession of “personal amounts” of heroin, cocaine, methamphetamine, and other drugs.

Under the new law, which took effect in February 2021, those found in possession of drugs would receive a maximum fine of $100, which would be waived if they called a hotline for a health assessment to enter a drug treatment program.

SEIZURES OF DRUGS SKYROCKET IN 2021 Fentanyl 482,111 doses compared to 27, 282 in 2020

TREATMENT PROGRAMS WERE to be funded by

26 I N S I G H T June 17–23, 2022

Marijuana 966,328 pounds compared to 90,010 in 2020

Oxycodone More than 10,188 doses compared to 1,189 in 2020

ACCORDING TO THE NATIONAL SURVEY on Drug

Use and Health, Oregon has the worst drug addiction rate in the country, with 9 percent of residents admitting they are addicts and 12 percent acknowledging they are alcoholics.

“Our voters were fooled into believing this would be the answer to our behavioral health, homelessness, and crime issues,” Republican state Rep. Lily Morgan told Insight.

“Now fentanyl and other drugs are out of control and we’re finding that virtually no one is getting into treatment.”

The state was just not ready to implement the programs required by the law, according to testimony from the Oregon Health Authority (OHA).

Even as the requests from offenders to receive treatment have failed to materialize as expected, hundreds of applications for grants to provide those services have piled up at OHA, waiting for review and approval.

Steve Allen, OHA’s behavioral health director, testified to the Behavioral Health Committee that “Ballot Measure 110 has not been implemented without significant bumps along the way.”

“It’s a $300 million project that’s never been

CLOCKWISE FROM L: DON EMMERT/AFP VIA GETTY IMAGES, NATALIE BEHRING/ GETTY IMAGES, ANDREW CABALLERO-REYNOLDS/AFP VIA GETTY IMAGES

redirecting millions of dollars in tax revenue collected from the state’s legal marijuana industry.

From the onset, many of the state’s small cities were unhappy with this plan, as the new program reduced the amount of funding they had been promised when the state legalized recreational marijuana in 2015.

In the first year of the new law, an estimated 136 people entered treatment and just 13 percent of the $300 million budget for treatment was spent.

Meanwhile, Oregon State Police (OSP) troopers seized 482,111 doses of fentanyl in 2021, according to testimony by OSP Superintendent Terri Davie. That’s up from just 27,282 in the previous year, she told the Oregon House Interim Judiciary Committee on June 3.

Troopers also seized 966,328 pounds of marijuana in 2021, which is more than 10 times the 90,010 pounds seized in 2020 and eclipses the 20,509 in 2019, Davie said.

In addition, more than 10,188 doses of oxycodone were seized in 2021, compared with just 1,189 in 2020.

Secretary of State Shemia Fagan testified before the Oregon House Interim Committee on Behavioral Health on June 2. “When the voters of Oregon passed Measure 110,” she said, “we did so because it was a change of policy in Oregon to improve the lives of people, to improve our communities.

“Instead, in many communities in Oregon, we’ve seen the problem with drug addiction get worse.”

Oregon Policy

have overdoses increasing at drastic rates,” Morgan told Allen.

“In my community, we see a 700 percent increase in overdoses and a 120 percent increase in deaths. How long do we wait before we have an impact that we’re saving lives?”

ALLEN ACKNOWLEDGED THERE has been a “dra-

(Top) A marijuana dispensary sign in Sumpter, Ore., on July 2, 2017.

(Above) A customer buys a marijuana joint at a dispensary in Eugene, Ore., on March 22, 2016.

Overdoses in just one county in Oregon jumped by 700 percent after the state decriminalized drugs. done before. We’ve made some missteps at Oregon Health Authority,” he said.

Meanwhile, Morgan, who is a member of both the state Judiciary and Behavioral Health committees, said that lives are being lost.

“Director, you’ve mentioned a couple of times that you’re waiting to see, and yet we

matic” increase in overdoses and overdose deaths statewide, and he attributed much of the cause to the recent arrival of methamphetamine laced with fentanyl—a synthetic opioid that is so powerful that a tiny amount can kill—and illicit pills containing fentanyl.

“So clearly, if we were to do it over again, I would have asked for many more staff much quicker in the process,” Allen told the committee.

“We were just under-resourced to be able to support this effort, underestimated the work that was involved in supporting something that looked like this, and partly we didn’t fully understand it until we were in the middle of it.”

He said that his agency is now working to clear the backlog of applications for funding and will soon award approximately $280 million to more than 250 behavioral health organizations to fund drug treatment and recovery programs.

“In my community, we see a 700 percent increase in overdoses and a 120 percent increase in deaths.”

State Rep. Lily Morgan

I N S I G H T June 17–23, 2022 27

People vandalize a store in New York on May 31, 2020.

BAIL REFORM

Democrat Runs for NY Assembly to Reverse Progressive Trend

N

Lawyer saw state’s system evolve from being too harsh to embracing rehabilitation. Bail reform ruined it all

ew york criminal defense attorney James Magee, a Democrat, has seen firsthand how bail reform hurt the weak and vulnerable that his party vows to protect..

When his district’s state assemblywoman, Catherine Nolan, also a Democrat, announced her retirement in February, opening her seat up for the first time in more than three decades, Magee jumped into the race.

“A refusal to prosecute crime cannot be a part of this party’s platform. I am running to reverse this trend and show that the Democratic Party can govern sensibly on public safety,” he told Insight.

Magee was raised by a working-class family in Sunnyside, a neighborhood on the west side of

28 I N S I G H T June 17–23, 2022

By Cara Ding

“A refusal to prosecute crime cannot be a part of this party’s platform.

I am running to reverse this trend.”

James Magee, New York criminal defense attorney

Queens borough in New York.

After graduating from law school in 2006, he worked as an assistant district attorney at the city’s Brooklyn District Attorney’s Office for five years before opening his criminal defense practice.

During his years working in the New York criminal justice system, he saw how the system evolved from a heavy-handed punitive approach to one that embraces treatment and rehabilitation.

Yet, changes to the bail system just blew that up, he said.

In April 2019, five months after Democrats regained control of both legislative chambers and the governorship in New York, they crammed

New York Justice System

CLOCKWISE FROM L: STEPHANIE KEITH/GETTY IMAGES, COURTESY OF JAMES MAGEE, DAVID DEE DELGADO/GETTY IMAGES

major criminal justice changes into the annual state budget.

The overhaul is often called bail reform because it eliminates cash bail for most misdemeanors and nonviolent felonies. For those offenses, defendants are to be released without paying any money.

It also made big changes to the state’s discovery law, requiring that prosecutors automatically turn over a large amount of evidence to defense counsel much faster. If prosecutors fail to honor the timeline, they risk having their cases dismissed by judges.

“I was shocked when the bail reform was passed,” Magee said. “It was trying to fix something that wasn’t broken.

“If you must fix the criminal justice system, you should have fixed the archaic laws and punishments in the penal code itself, not the bail system or the discovery statutes.”

Even before the changes, bail was rarely set in misdemeanor cases that he handled, except where the suspects had a history of missing court dates. For these people, nine out of 10 had either mental illness or drug addiction. So a cash bail helped incentivize them to come back to court and get court-ordered treatment, he said.

As to the new discovery law, it became so burdensome for prosecutors to catch up with all the paperwork that many started to stop prosecuting misdemeanor cases altogether; others simply quit under the pressure, according to Magee.

“Petty crimes are no longer prosecuted, and people suffering from mental health and addictions are on the street.”

“Petty crimes are no longer prosecuted, and people suffering from mental health issues and addictions are on the street—that is why you are seeing an uptick in crime,” he said. “And the victims of petty crime are often small business owners and residents who don’t have a lot of money to begin with.”

When Nolan, the three-decade incumbent in Assembly District 37, announced her retirement, Magee and three other Democratic candidates jumped into the open primary. The primary election is set for June 28.

CRIME IS A MAJOR ISSUE in the race. Two can-

“PROSECUTORS ARE RACING against the clock

didates, Juan Ardila and Johanna Carmona, propose more restrictive gun laws to curb violent crime; another candidate, Brent O’Leary, suggests tweaking the bail reforms and stemming illegal gun trafficking.

Magee is the only candidate running to systematically fix bail reform.

He’s been knocking on doors every day, talking to residents in the district. They have complained to him about the graffiti in the park, drug dealing around the corner, thefts of Amazon packages, and occasional shootings in the neighborhoods.

Magee tried to convince them of the link between bail reform and rising crime.

“There are people now in my party who believe that in modern society, we do not need a criminal justice system. We should move toward a Utopia society,” he said. “I think while we should never stop addressing the root causes of crime, it is also a basic governmental responsibility to address crime once it is committed.”

just to keep the cases alive. They must focus on rapes, guns, shootings, and they just have no time to prosecute petty crime anymore,” he said.

That means many of Magee’s clients are falling through the cracks. A big chunk of his business is misdemeanor cases, for which mental illness and drug addictions are big drivers. About half of his clients are low-income minorities.

Prior to the reform, he placed two or three clients into court-ordered treatment programs every month. During the past two-and-a-half years, he has placed none.

“For many of them, criminal prosecution is often the only incentive to get treatment,” Magee said. “Plus, New York has a lot of leeways to behave whatever way you want, and a lot of people with mental illness had no access to treatment until they were caught with a petty crime.

“When that happens, it is a good opportunity for us to treat them, but all that is blown up now because their cases are not being prosecuted anymore.”

The law hurt not only his clients, but also victims.

Police officers sit in their patrol car next to a group of delivery workers gathering to cross the Willis Avenue Bridge in New York on July 15, 2021. Delivery workers gather to travel in groups to stave off muggings and assaults.

James Magee, New York criminal defense attorney

I N S I G H T June 17–23, 2022 29

GREEN NEW DEAL

StateTreasurers Treasurers Square Up Agai State Square Up Against

ESG’S ‘INVISIBLE

Piles of coal sit in front of Pacificorp’s 1440 megawatt coal fired power plant in Castle Dale, Utah, on Oct. 9, 2017.

PHOTO BY GEORGE FREY/ GETTY IMAGES

30 I N S I G H T June 17–23, 2022

inst

FIST’

Nation Energy

S

tate treasurers spoke out against the imposition of environmental, social, and governance (ESG) scoring on public money in a June 8 press conference, with one official comparing it to the social justice-driven push for universal homeownership that helped trigger the Great Recession.

“I would be very concerned about investing in green energy right now,” Utah State Treasurer Marlo Oaks said in response to a question from Insight.

He didn’t rule out the possibility of an ESG bubble similar to the housing bubble that burst during the late 2000s—an event that drove the nation’s worst economic downturn since the Great Depression.

That bubble was inflated, in part, by two government-sponsored enterprises, Fannie Mae and Freddie Mac. Beginning in earnest with the Clinton administration’s 1995 National Homeownership Strategy, which committed to “expanding creative financing” for home buyers, the firms continually reduced the requirements for loans.

By 2006, 43 percent of first-time homebuyers put down no deposit, according to a study from the National Association of Realtors.

In contrast to the “invisible hand”—Adam Smith’s metaphor for the operation of the free market— Oaks sees ESG as an “invisible fist.”

OAKS WAS ONE signatory to an April 21 letter

Environmental, social, and governance ratings batter states, choke off capital from fossil fuel industry

BY NATHAN WORCESTER

from Utah’s governor, senators, congressional representatives, and other public officials in response to S&P Global’s issuance of ESG ratings for U.S. states and territories.

“Considering recent global events, the current economic situation in the United States, and the unreliability and inherently political nature of ESG factors in investment decisions, we view this newfound focus on ESG as politicizing the ratings process,” the letter reads. “It is deeply counterproductive, misleading, potentially damaging to the entities being rated, and possibly illegal.”

Idaho officials sent a similar letter to S&P Global on May 18. They echoed the Utah letter’s concerns with the firm’s scoring of U.S. energy companies relative to some of their foreign counterparts.

For example, China’s state-owned Sinopec earned a 41 from S&P Global. ExxonMobil Corp., by contrast, received a 36, while Chevron Corp. received a 39.

Sinopec’s sub-scores on both “social” and “governance and economic” factors were significantly higher than the industry mean.

The results raise questions about the rankings’ reliability in light of the use of forced labor in China, as well as the Chinese Communist Party’s heavy I N S I G H T June 17–23, 2022 31

Nation Energy

A filling station of Sinopec, China Petroleum and Chemical Corporation, in Shanghai on March 22, 2018.

The international benchmark for a tonne of coal has shot up from less than $50 in September 2020 to roughly $400 today.

32 I N S I G H T June 17–23, 2022

Moore told reporters that those initial letters would likely be sent out at the end of that week. Six companies received such a letter on June 10, including BlackRock, Goldman Sachs, JPMorgan Chase, Morgan Stanley, U.S. Bancorp, and Wells Fargo.

He also suggested that ESG scoring could soon be incorporated into individuals’ credit scores—for example, through favorable mortgage rates for people who put solar panels on their homes.

In a follow-up interview with Insight on June 8, Moore cited a presentation from J. Michael Evans, president of China’s Alibaba Group, to the World Economic Forum.

Evans said his company is developing an “individualized carbon footprint tracker,” which he claimed would let consumers measure their travel, food consumption, and more.

“You’re going to come to a very logical conclusion if we continue down this path,” Moore told Insight.

He agreed that the economy could be facing an ESG bubble and argued that coal prices could be an indicator—the international benchmark for a metric ton of coal shot up from less than $50

JOHANNES EISELE/AFP VIA GETTY IMAGES

influence over corporate governance in the country.

In an analysis of executive-level shake-ups in China’s oil industry during 2011, experts from the Brookings Institution and Ian Bremmer’s Eurasia Group stated that the movement of leaders from one company to another is “a blatant reminder of the CCP’s control over China’s flagship firms.”

Another speaker at the June 8 press conference, West Virginia Treasurer Riley Moore, made headlines in January when the state divested from Blackrock over its ESG practices.

“In West Virginia, we’re an energy state. We produce coal, gas, and oil—and this ESG movement in its current form is really an existential threat to our jobs, our economy, and our tax revenue,” Moore told reporters.

A law passed by the West Virginia Senate on March 12 will exclude financial institutions from competitive bidding with the state if they’re boycotting fossil fuel companies.

Financial institutions slated for inclusion on West Virginia’s contracting blacklist will be sent letters, allowing them to appeal the decision. The full list will be published 30 days later.

Nation Energy

the movement of investments from the hydrocarbon sector, arguing that pressure in that direction is both ethically and financially sound.

“Getting lenders to choke off money to fossil fuel companies is the next needed move for the industry to address the material risks that the coal, oil and gas industry faces,” said Green Century Capital Management’s Leslie Samuelrich, as quoted in a February 2021 CNBC article.

In a February 2021 article for Forbes, “The Case for Fossil Fuel Divestment,” David Carlin wrote, “Fossil fuel mining, exploration, and extraction all are capital intensive activities that demand constant access to capital. If capital costs rise or the supply of capital is reduced, projects can become uneconomical and fossil fuel companies can see their valuations fall.”

He argued that coal, oil, and natural gas companies may face “a grim financial future” if their reserves remain untapped as a result of political or financial pressure, suggesting that divestment advocates are “making a savvy financial decision.”

While ESG has trended in a leftward direction, at least one fund appears to offer a more conservative alternative.

“This ESG movement in its current form is really an existential threat to our jobs, our economy, and our tax revenue.”

Riley Moore treasurer, West Virginia

THE EXCHANGE-TRADED FUND (ETF) Inspire In-

in September 2020 to roughly $400 on June 8.

“The coal producers are booked out through 2023.

They can’t produce any more than they are right now,” Moore said.

Kentucky State Treasurer Allison Ball also addressed reporters at the June 8 press conference, arguing that the application of ESG could violate her state’s laws.

Kentucky Attorney General Daniel Cameron agrees.

In a May 26 opinion prompted by an inquiry from Ball, officials from Cameron’s office concurred that ESG asset management practices run afoul of Kentucky law.

“This isn’t really about profitability. It’s not about retirement security. It’s not about your investments. It’s about political activism. And they’re doing it in a way that they could not do through the democratic process,” Ball told reporters.

Oaks said, “ESG today is misallocating capital, in that it’s not providing capital where it is desperately needed, in the traditional energy space—and it’s leading to higher gas prices.”

Left-wing activists and financiers have celebrated

vesting, which claims to offer “biblically responsible investing” in the vein of ESG, has bucked ESG trends by investing in the firearms companies Sturm Ruger & Company and Vista Outdoor, as reported by Bloomberg Law and confirmed

by Inspire’s Securities and Exchange Commission filing.

Yet speakers at the June 8 press conference told Insight that they reject the notion of pushing ESG to the right through state power over public pensions.

“We just want the politics to come back to a neutral base,” said Derek Kreifels, of the State Financial Officers Foundation, noting that the use of public pension funds to advance a political agenda was “the big offense with ESG.” “If you want to invest in some Second Amendment ETF, please feel free to do it. We don’t want to be forced to invest in that,” Moore said.

Robert Netzly, president and CEO of Inspire, told Insight, “We believe that the solution to gun violence is not removing firearms from law-abiding citizens, but strong law enforcement removing criminals from our streets.

“We believe state pensions should not be forced to invest along any particular ESG guidelines, but should have the freedom to do so if they decide that is in the best interest of their constituents.”

Representatives for S&P Global and Alibaba Group didn’t respond to requests for comment by press time.

I N S I G H T June 17–23, 2022 33

W E S T C OAS T

Spikes in Incurable Valley Fever Linked to Mega Drought Dust storms spread naturally occurring soil fungus

By Autumn Spredemann

34 I N S I G H T June 17–23, 2022

Nation Health

People take a stroll at a now-dry section of a lakebed at the droughtstricken Lake Mead in the Lake Mead National Recreation Area, Nevada, on May 10.

PHOTO BY MARIO TAMA/GETTY IMAGES

T

h e va st m ajor i t y of t h e American West is struggling with enduring “mega drought” conditions that some experts think will last until 2030 and that are creating perfect conditions for an incurable disease to spread.

A microscopic fungal organism in the soil called coccidioides is becoming more mainstream because of a rise in human infections resulting from airborne spores thrown aloft by winds in the arid terrain.

Coccidioides is a naturally occurring fungus found in the soils of Arizona, California, New Mexico, Nevada, Utah, Washington state, and Texas. When dust storms kick up spores into the air, people can inhale them and develop an infection known as coccidioidomycosis.

On the street, it goes by the name valley fever.

“It’s amazing, being in Arizona this long, how many people still don’t know about valley fever,” Malisa Grantham told Insight.

GR ANTHAM IS THE program manager at the

Valley Fever Center for Excellence in Tucson, Arizona, which sits at the epicenter of most outbreaks. More people fall ill because of the fungal pathogen in Arizona than in any other state.

Once inhaled, the spores can cause flu-like symptoms, including fever, cough, headache, fatigue, and muscle pain. In extreme cases, the fungus can migrate to other organs, which requires lengthy treatment. The disease is also known to have frequent relapses.

In highly endemic regions, such as Phoenix and Tucson, valley fever accounts for upward of 30 percent of community-acquired pneumonia cases, according to the Centers for Disease Control and Prevention (CDC). However, the organization admits that the figure is likely higher due to low testing.

Areas Endemic for Coccidioidomycosis

Highly Endemic

Established Endemic

Suspected Endemic

States that are endemic for valley fever.

(Source: Centers for Disease Control and Prevention) I N S I G H T June 17–23, 2022 35

Nation Health

Grantham is a born and raised rancher from Wyoming, and her husband’s family has a property close to the Arizona–Mexico border. In this arid stretch of land, exposure to airborne dust is just a way of life. Residents are accustomed to seeing dust trails from even the tiniest disturbances, such as small birds.

“It’s just so dry that even the quail kick up dust,” she said.

Despite the heavy exposure factor, Grantham said she’s not aware of any ranching families taking precautions to avoid the debilitating and potentially deadly fungus hiding in the dust.

“It doesn’t enter your mind until you get it. It’s kind of like COVID,” Grantham said.

Nevertheless, penetrating the human brain, spinal column, and other organs is what the fungus does in its most extreme form: disseminated coccidioidomycosis.

Between 1 and 5 percent of those who contract valley fever develop the disseminated version of the disease, which typically presents within two years of exposure to the pathogen.

“There’s no cure for this disease. The treatments we have inhibit the fungus, but they don’t get rid of it.”

Dr. John Galgiani, professor of medicine, University of Arizona College of Medicine

OVER ALL MOR TALIT Y FOR those infected

36 I N S I G H T June 17–23, 2022

An abandoned farmhouse near Bakersfield, Calif., in this file photo. Concern over valley fever has garnered more recent attention as drought conditions have intensified across multiple U.S. states and cases have begun to spike in waves.

GALGIANI NOTED THAT people who are immu-

nocompromised or are taking immunosuppressive drugs also run a higher risk of developing complications. He also said the number of deaths from valley fever infections is likely underreported, based on a published paper from the CDC. Mortality aside, a person who develops symptoms can suffer for months with lengthy treatments.

“The impact of this disease is not so much fatality. It’s morbidity,” Galgiani said. “Those patients [with valley fever] have weeks and many months of illness. With the discussion of long COVID, a lot of the symptoms that linger from valley fever are very similar to COVID.” Earlier this year, the National Institute of Health (NIH) awarded additional funding to multi-disciplinary research teams in Texas and California to further diagnostics, therapeutics, and a possible vaccine for the pathogen.

In February, the University of Texas–San Antonio announced the establishment of a research

CLOCKWISE FROM TOP L: COURTESY OF THE UNIVERSITY OF ARIZONA, MARIO TAMA/GETTY IMAGES, DAVID MCNEW/GETTY IMAGES

with valley fever is low—about 1 percent. Yet 40 percent of cases are severe enough to require hospitalization, according to an Arizona Department of Health Services study.

Infection from these spores isn’t a new phenomenon. Originally identified in Argentina in 1892, the name valley fever gained notoriety during the 1930s in the San Joaquin Valley of California, when a series of outbreaks sickened agricultural workers. The Central Valley area of California remains a hot spot for cases to this day.

Concern over valley fever has garnered more recent attention as drought conditions have intensified across multiple U.S. states and cases began to spike in waves.

Reported cases in the United States increased by 32 percent from 2016 to 2018, according to the CDC. The institute also estimates that at least 150,000 valley fever cases go undiagnosed yearly.

Health officials in Arizona noted a 23 percent increase in diagnoses in 2021 and confirmed more than 8,200 cases.

“There’s no cure for this disease. The treatments we have inhibit the fungus, but they don’t get rid of it,” Dr. John Galgiani told Insight.

Galgiani is a professor of medicine at the University of Arizona College of Medicine and the director of the Valley Fever Center of Excellence.

He said anyone living in an endemic region is at risk of inhaling the dangerous fungal spores

when there’s a lot of dust in the air.

Valley fever’s reach goes far beyond farmers, ranchers, and people who work closely with soil.

Regular city dwellers also suffer its effects. Much of this is from the spike in dust storms hitting populated areas, which have doubled in the past 20 years.

“Most of the data suggests that if you inhale the spores, you are at equal risk of getting infected,” Galgiani said.

That said, certain people run a higher risk of developing complications from valley fever.

“Clearly, there’s an age effect. So the older you are, the more likely you could get infected with valley fever here in Arizona,” he said.

Nation Health

center for valley fever with NIH funding to the tune of $6.8 million. The following month, California’s UCLA announced a five-year, $8.4 million grant with NIH money to study immune system responses.

Developing advanced treatment options is also a priority for researchers, some of whom are using out-of-the-box technology to attack a complex infection.

“My lab weaponizes copper as a therapeutic by matching it with different metal-binding compounds to promote their effect inside of a pathogen,” Dr. Michael D.L. Johnson told Insight.

JOHNSON WORKS IN immunobiology at the Uni-

versity of Arizona Health Sciences, where he’s making strides toward new treatment options.

“We’ve killed parasites, the fungus that causes valley fever, and streptococcus pneumoniae.

We’re excited to move this therapeutic forward to [also] kill antibiotic-resistant pathogens,” he said.

Progressive therapies are crucial since many who end up infected with valley fever either aren’t tested or are misdiagnosed early on. This

Local residents walk near a formerly sunken boat resting on a section of a dry lakebed along droughtstricken Lake Mead in Nevada on May 9.

40%

OF VALLEY FEVER cases are severe enough to require hospitalization, according to the Arizona Department of Health Services.

happened to Grantham’s father, who suffered from valley fever and was originally misdiagnosed with lung cancer.

“HE WAS A LONGTIME rancher in Wyoming and

spent many winters in Arizona working in his pistachio orchard in Cochise County. He went to the doctor in Wyoming, where they told him they saw a spot on his lung and suspected lung cancer,” Grantham said. “When I heard about it, I told my Dad to ask the doctors to do some research on valley fever, which they’d never heard of. It ended up that the lesions in his lungs were from a past case of valley fever.”

She maintains that many people who come to Arizona as visitors could go home with valley fever and be left to deal with doctors who know little to nothing about the disease.

Part of that is because the fungal contagion is what Galgiani calls an “orphan disease” that doesn’t offer much to entice pharmaceutical companies.

“It’s not a money maker for a commercial investment. It really requires public support if anything is going to happen at all,” he said.

I N S I G H T June 17–23, 2022 37

ANALYSIS

US–China Space Race Heats Up Commercial space technologies will define US–China competition for military innovation

By Andrew Thornebrooke

38 I N S I G H T June 17–23, 2022

China’s Tiangong 2 space lab is launched on a Long March-2F rocket from the Jiuquan Satellite Launch Center in the Gobi Desert, Gansu province, China, on Sept.15, 2016.

PHOTO BY -/AFP VIA GETTY IMAGES

China Military

I

NEWS ANALYSIS

N T H E E V E R - E X PA N D I N G arms race between communist China and the United States, few domains of competition are as high stakes as that of space.

Satellite architecture is required for everything from GPS to bank transactions to missile defense systems.

As such, it’s no surprise that both nations are investing heavily in their militaries’ space and counterspace capabilities.

What is often overlooked in this race, however, is just how each nation intends to win.

Indeed, over the past decade, China’s and the United States’ visions for the future of space have increasingly diverged, and the means through which each nation seeks to leverage its native space industry has evolved with those visions.

In China, a growing statist architecture is designed to organize and direct space industry as one part of the whole of society, in unison with the communist whole. The United States, meanwhile, is betting big on American corporations to innovate a new answer to secure peace in the final frontier.

What is certain is that the relationship between these two states and their respective space industries will determine the character of their militaries, and of war, for decades to come.

To understand that, however, it’s necessary to first understand just what the competition is about, and how it got here.

The State of US–China Space Competition Commercial and military competition between China and the United States has been accelerating for years as relations between the two nations have plummeted. Perhaps nowhere is this more true than in the space domain, which is critical to military and civilian technologies the world over.

The Pentagon is currently seeking to reduce uncertainty in space operations even as China is developing weapons to use against U.S. space assets. Defense experts have warned that China is building a comprehensive arsenal of space weapons, a stance apparently vindicated by recent comments from the Space Force’s Lt. Gen. Michael Guetlein and Air I N S I G H T June 17–23, 2022 39

China Military

40 I N S I G H T June 17–23, 2022

data collection, broadband communications, or something else entirely, the militaries of each nation are in a rush to acquire and field them before the other can.

To be sure, the CCP is currently behind in this race. The United States has about 2,700 satellites in orbit, while China currently has fewer than 500. Much of that satellite infrastructure is dated, however, and terribly prone to attacks that could cause cascading failures across a plethora of systems.

“Government[s] are getting to feed off all of that private industry, investment, and advances, and creating much more capability for nations.”

Peter Beck, CEO, Rocket Lab

“When a single U.S. communications satellite broke down in 1998, it was not only television and messaging systems that failed,” wrote James Black, a senior analyst for the Rand Europe think tank.

“Credit card systems stopped processing payments, weather radars went blind, and frustrated drivers found themselves unable to fuel their vehicles as automatic petrol station pumps seized up.”

As such, the No. 1 driving factor in assessing the weakness or strength of space-based systems is currently its resiliency as measured by the size of its satellite clusters. To this end, China and the United States are looking to the growing commercial space industry for scalable, affordable answers as to how they might get as many satellites up and running as quickly as possible.

SpaceX, for example, operates about 2,000 satellites, four times as many as the CCP. Moreover, its signature Starlink satellite constellation has already demonstrated itself capable of withstanding foreign military attacks in the ongoing war in Ukraine.

Likewise, a state-owned Chinese telecommunications company has announced plans to put 10,000 microsatellites in orbit by 2030.

What these companies are creating, then, and how governments can leverage it, is the central issue at the heart of the new space race, and will determine the success or failure of national and military strategies in the decades to come.

The methods that China and the United States are developing to leverage such technologies, however, are very, very different.

The New Statism: China’s Answer to Development While the Chinese space industry is managed by a complex array of military and civil organizations, the vast majority of the program is either directly organized or indirectly guided by the CCP’s military wing, the People’s Liberation Army (PLA), and specifically its Strategic Support Force (PLASSF), headquartered in Xi’an in western China.

In addition to space, the PLASSF oversees the integration of the CCP’s cyber, electronic, and psychological warfare capabilities, and has consistently sought to leverage all of these domains together in pursuit of China’s strategic goal of space dominance.

The PLA’s two primary entities for developing the space program are the state-owned China Aerospace Science and Technology Corp. (CASC) and China Aerospace Science and Industry Corp.

(CASIC), which used to be a single entity but were split up to promote competition.

CASC carries out most of the CCP’s research and overseas launches for the PLA, while CASIC develops all of China’s missiles.

Meanwhile, there are a growing number of private space companies in China, which are driving much of the CCP’s space innovation.

Those companies, however, largely receive their directives on what to develop from the PLA and its associated

FROM L: PHIL WALTER/GETTY IMAGES, JIM WATSON/AFP VIA GETTY IMAGES

Force Secretary Frank Kendall.

Guetlein said that the United States must act to develop capacities to defend itself in space, while Kendall said more specifically that the United States needs to develop new, offensive space weapons to defend itself.

Likewise, a 2020 report by the U.S.– China Economic and Security Review Commission (USCC) found that China’s ruling communist regime was implementing a long-term plan to systematically steal U.S. technologies in order to accelerate its own space-bound military programs.

“The Chinese Communist Party (CCP) is executing a long-term strategy to exploit U.S. technology, talent, and capital to build up its military space and counterspace programs and advance its strategic interests at the expense of the United States,” the report stated.

“China’s zero-sum pursuit of space superiority harms U.S. economic competitiveness, weakens U.S. military advantages, and undermines strategic stability. In short, it represents a threat to U.S. national security.”

Much of the current Sino–American space rivalry stems from the fact that the United States and China don’t collaborate on space development or space exploration. Since Congress passed the Wolf Amendment in 2011, NASA has been explicitly barred from cooperating with China on such issues.

Defense and security experts have said that China’s space program is a direct military threat to the United States. The Wolf Amendment was part of a larger effort to ban the unwanted transfer of technologies to China from the United States.

The intention of the amendment was ostensibly to block the CCP from U.S. technology in order to limit its rapid technological ascent. That plan didn’t work, however, and the CCP was able to forge ahead anyway by creating its own rival space systems in secret, which the United States doesn’t know enough about to adequately deter: last year’s hypersonic weapons test, for example.

All of this has created an imminent demand for next-generation space technologies in both China and the United States. Whether those technologies are rockets, image processing, weather

China Military

The SpaceX Falcon Heavy rests on Pad 39A at the Kennedy Space Center in Florida, on Feb. 5, 2018. Much of the U.S. satellite infrastructure is dated and terribly prone to attacks that could cause cascading failures across a plethora of systems. entities such as CASC and CASIC, which funnel monies and milestone goals to companies in order to meet the Party’s strategic objectives.

In this manner, according to one report by the Center for a New American Security, a Washington-based think tank, China’s state-owned enterprises are simultaneously separated from the innovation of private industry while also directing it. That’s because the PLA, as the primary end-user of space technology, manages the research and development programs for weapons and space systems while coordinating with the civilian defense community.

A separate report by the USCC noted that “Beijing consistently invests high levels of funding and political will to its space program, which has driven its steady progress in achieving important milestones.”

“In this role, Beijing aspires to lead international space-related innovation and exploration and establish an advanced system of infrastructure to

serve its space sector.”

In this way, the CCP’s model for space development is a form of statism not unsurprising to a communist nation, in which the innovation of private companies is commanded which direction to go and their labor is subsumed for the state good.

For the US, a New Commercialism To many, the CCP’s model for space development might appear as merely a heavy-handed version of the U.S. military’s traditional acquisition process, in which the defense bureaucracy lethargically invests increasingly large sums into a few dedicated defense corporations for custom technologies.

The United States is moving away from that model, however, and pursuing instead a commercial-first approach to tech development for its space-based assets.

While the United States has traditionally favored long and costly contracts

for bespoke projects, it’s now shifting its strategy, and opting to buy commercial-first technologies including satellites for analytics, broadband, imaging, and data collection.

Indeed, it’s the hope of the U.S. Space Force to co-opt readily available, and cost-friendly, commercial space technologies for all its endeavors except so-called no-fail missions such as missile defense.

Thus, even as the CCP appears to be taking a page from the United States’ old playbook in leveraging the state to purchase from a directed commercial sector, the United States is prioritizing the purchase of dual-use technologies that already serve a commercial market and aren’t entirely dependent on government funding.

According to the U.S. Space Strategy, the Pentagon “will leverage and bolster a thriving domestic civil and commercial space industry” to combat the Chinese challenges to “freedom of operation in space.”

I N S I G H T June 17–23, 2022 41

China Military

The Nasa Mission Control Center at the Lyndon B. Johnson Space Center in Houston on July 21, 2019.

42 I N S I G H T June 17–23, 2022

and launch vehicle interfaces in order to ensure that the military could use technology from any company it purchased from.

A ‘Gold Rush’ for Space Manufacturing This strategic need for commercial innovation may make the Pentagon much more dependent on the genius behind individual businesses, but has also led to something of a manufacturing boom among up-and-coming space companies in the United States, which are now seeking to have their products picked up for use by the U.S. military.

Peter Beck, CEO of aerospace manufacturing company Rocket Lab, said there’s a veritable “gold rush” among space companies to get assets on orbit to rake in lucrative government sales and contracts.

“Government[s] are getting to feed off all of that private industry, investment, and advances, and creating much more capability for nations,” he said.

“I grew up and it was only NASA that did amazing things. Now, commercial companies are doing amazing things and it’s not a rarified event.”

During a speech to the U.S. Chamber of Commerce, Beck said the push to put commercial technologies at the forefront of government initiatives was democratizing space by allowing

Space in the Age of Technospheres The heated efforts to accelerate and secure military and civil technologies, both in space and otherwise, are driving the United States and China to develop distinct and mutually unintelligible technologies, according to a new report by the Center for Strategic and International Studies, a security-focused think tank.

The decoupling of digital innovation, systems, and data flows between Western nations and China, the increased statism of the CCP and standardized corporate leadership of the United States, are compounding the trends that have been in place since the Wolf Amendment in 2011, and creating two very different and rival technospheres.

“The overall geopolitical rivalry between China and the West makes it unlikely that technology decoupling will decrease,” the report states. “Both see technology as a method to promote their respective worldviews while seeing each other’s efforts as focused on national security competition.”

What is left to be seen is how a centrally planned and authoritarian space architecture and an open and freely created one differ, and how they compete.

THIS PAGE: ALEXANDER HASSENSTEIN/ BONGARTS/GETTY IMAGES

U.S. Space Command considers this acquisition-through-collaboration approach to be necessary in an age of ever-evolving and ever-expanding space technologies that, if the government had to fund from scratch, would be out of date by the time they became operable.

“Commercial space activities have expanded significantly in both volume and diversity, resulting in new forms of commercial capabilities and services that leverage commoditized, off-theshelf technologies and lower barriers for market entry,” the strategy said.

“These developments are contributing to a burgeoning space industry driven by entrepreneurial innovation and investment, advanced technology, decreased costs, and increased demand for space-based services. The [Pentagon] has an opportunity to leverage innovation and cost-effective investments driven by the private sector, presenting opportunities for collaboration to develop game-changing capabilities with a more streamlined and responsive acquisition process.”

As such, the House Armed Services Committee’s subcommittee on strategic forces agreed on June 8 that commercial off-the-shelf technologies would be central to the U.S. space strategy, and that the military would play the role of setting standards for Western satellite

publicly traded companies to lead the innovation that would improve and protect the nation.

What’s more is that the initiative is already bearing some fruit.

While government agencies such as NASA have repeatedly struggled to compete with China in a new race to the moon, and even failed to create space suits on budget, private industry in the United States has soared to new heights.

Rocket Lab alone, for example, is planning unmanned missions to the moon, Mars, and Venus. And the industry is expected to reach $1.4 trillion in value by 2030.

To be sure, Beck said, those strides wouldn’t be possible without coordination and funding from the government, and particularly from the Defense Intelligence Agency and NASA. But in choosing to nurture industrial talent rather than develop from scratch, the United States has improved capacity.

P OL I T IC S • E C ONOM Y • OPI N ION T H AT M AT T E R S

Perspectives

No.24

A worker looks on as a cargo ship is loaded at a port in Qingdao, Shandong Province, China, on July 13, 2017.

PHOTO BY STR/AFP VIA GETTY IMAGES

TEAM BIDEN FACING STAGFLATION RISK

WEAKENING HOUSEHOLD FINANCES

Ending tariffs on China will worsen America’s economy. 45

Budget constraints will slow consumer spending growth.

MAIN CULPRIT OF FOOD SHORTAGES 46

Many nations around the world have a large deficit in cereal production. 48

INSIDE I N S I G H T June 17–23, 2022 43

THOMAS MCARDLE was a White House speechwriter for President George W. Bush and writes for IssuesInsights.com.

Thomas McArdle

Formula Foolishness

Baby formula makers have been regulated to the point of absurdity

s surreal as it may be to contemplate today, four decades ago, international regulators were unrelenting in their crusade to get baby formula manufacturers to cease dispensing free samples of their products to mothers.

What would millions of American parents not give today for some free formula for their infants, at a time when in sizable regions of the country more than 90 percent of formula products are only available sporadically, and stories abound of panicked mothers visiting store after store after store only to discover empty shelves.

During the Reagan era, baby formula was, to the left, the pediatric equivalent of crack cocaine being peddled by greedy multinational corporations out to sicken babies and bankrupt families. They had the audacity to encourage mothers to consider their carefully formulated product as a superior alternative to breast milk. After a 6 1/2-year international boycott organized by activists, leading formula maker Nestle agreed to, among other things, explicitly promote breastfeeding as superior to its own wares. That’s like Tesla telling you you should buy a Porsche.

One would imagine that baby formula disappearing from store shelves would be a cause for celebration to the industry’s critics, but instead, the same firms accused of force-feeding babies to death with their toxic brew are now accused of starving them.

Illinois-based Abbott Nutrition, which supplies as much as 40 percent of formula sold in the United States, went into full crisis 44 I N S I G H T June 17–23, 2022

communications mode, apologizing for a February recall over a rare bacterial contaminant. Rival manufacturers weren’t equipped to boost supply to swiftly make up the difference.

Labyrinthine regulations written four decades ago with the intention of enhancing safety have limited the market to big U.S. manufacturers with the resources to handle the Food and Drug Administration’s complex regulations, the most onerous formula rules in the world.

The real culprit in this, however, is government. Since baby formula makers are in essence child predators, they have to be regulated to the point of absurdity. The Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) federal assistance program is the largest purchaser of baby formula in the country, and uses sole-source contracting, in which the states buy formula far below retail prices. WIC recipients are severely limited in the brands of formula they can buy using the program. So when a shortage crisis occurs, the poorer Americans who use WIC are left unable to turn to alternative products.

Labyrinthine regulations written four decades ago with the intention of enhancing safety have limited the market to big U.S. manufacturers with the resources to handle the Food and Drug Administration’s

(FDA) complex regulations, the most onerous formula rules in the world.

Consequently, Abbott, Nestle, Reckitt, and Perrigo make up 90 percent of the market, with only 2 percent of the market filled by non-U.S. firms.

As Cato Institute trade economist Scott Lincicome points out, high tariffs for imported formula, typically 17.5 percent, are devised to protect our domestic dairy industry, with imports from Europe “subject to a complex system of ‘tariff rate quotas’” that “increase even further once a certain quantity threshold is hit.”

Foreign manufacturers are required to register with the FDA at least 90 days in advance and undergo annual inspections conducted by the agency thereafter. And the agency routinely seizes improperly labeled infant formula entering the country.

The European Union is the largest producer and exporter of infant formula in the world, and its products meet FDA nutritional requirements, yet they are routinely seized by the FDA. With much fanfare, President Joe Biden has invoked the Defense Production Act to commandeer commercial jets to bring in formula from abroad. But as Competitive Enterprise Institute senior fellow Ryan Young notes, the aircraft can only bring in formula that passes all FDA regulations—regs that were designed to keep foreign formula out. Far preferable would be simply to accept the approval of responsible foreign regulatory bodies.

Perfectly safe European formula is available now to fill U.S. shelves and nourish infants during the present crisis. We have the regulatory state, inept poverty programs, and politicians serving the vested interests of our domestic dairy industry to thank for it not being available to this country’s parents and their small children.

ANDERS CORR is a principal at Corr Analytics Inc., publisher of the Journal of Political Risk. He is an expert in political science and government.

Anders Corr

Team Biden Facing Stagflation Risk Ending China tariffs will worsen America’s economy

T

he biden administration is getting desperate about inflation, a rapidly declining stock market, and an impending recession.

They know America’s economic doldrums will hit the Democrats in the 2022 midterm and 2024 presidential elections. It will hit hard, just like it’s hitting American pocketbooks now. We’re paying more than $5 per gallon for gas, and summertime is hot at the pump. Heat tends to make people upset with their politicians.

So Treasury Secretary Janet Yellen is doing the air-conditioned talk show circuit to gab about inflation, minimize recession worries, and propose remedies.

They include, most prominently, the U.S. Federal Reserve raising interest rates. That actually increases the risk of a stock market crash and recession.

Yellen is also advocating for removing China tariffs as an anti-inflation measure. Removing the tariffs is a misguided remedy that soft-on-China politicians already wanted. They’re throwing the inflation card to revive a lousy plan.

Even Goldman Sachs, which is typically soft on China and anti-tariff, concedes that removing the tariffs would only decrease prices by about 0.25 percent.

That would be as little as a 25cent savings on your next $100 trip to Kmart.

“Our U.S. Economics team estimate that the Trump administration’s tariffs increased the core price level by 0.25% cumulatively,” reads research published by Goldman Sachs on June 8. “The actual impact on prices would be even smaller when considering partial tariff reductions.”

And removing China tariffs will do nothing against the impact of gas prices. In fact, the opposite could result. If tariff removal results in another flood of cheap Chinese products that again drives out U.S. companies, it could decrease U.S. manufacturing and wages, making it even harder for Americans to fill their wallets and gas tanks.

Removing China tariffs will do little against inflation north of 8 percent, and could make life for Americans more difficult.

So removing China tariffs will do little against inflation that’s currently north of 8 percent, and doing so could make life for Americans more difficult. That’s especially the case considering that one of the main drivers of inflation is Russia’s invasion of Ukraine—caused, in part, by too much European reliance on Russian gas.

If China invades Taiwan, we can expect inflation to increase again.

China will invade Taiwan if the United States again becomes too dependent on the country for cheap goods. Dependency fuels disrespect, and if Beijing disrespects Washington, it will think (such as Moscow wrongly did) that it can get away with murder.

Yellen is wrong about China tariffs, just as she was wrong about her prediction not long ago that inflation was “transitory.”

The Federal Reserve increasing interest rates is also a bad idea. It will make more people want to lend money to the government and suck

money out of the private economy. Sellers will be forced to lower their prices to unload stock.

That’s a short-term inflation fix.

But at what cost?

Sellers will lose money, and there will be less money for investment and jobs. They won’t be able to replenish their stock, which will raise prices—a recession and inflation at the same time, which is called “stagflation.”

Yellen is already trying to calm American nerves by saying a recession is unlikely. A recession is defined as two successive quarters with negative gross domestic product growth. In the first quarter of 2022, there was minus 1.5 percent growth. One more quarter like that and we’re in a recession. This isn’t a good time to increase interest rates.

Enduring the small amount of inflation from China tariffs for a short while may not be as bad as some say, if higher prices incentivize investment and a reorientation of trade toward other markets, including our allies and friends globally, as well as American communities themselves.

Draconian measures that hurt the economy, such as half-percentage point interest rate rises in the context of supply-driven inflation, are a bad idea and could bring a recession and more pain for stock markets. If moderate inflation is allowed, the market could correct itself.

Higher prices signal to investors that there are good opportunities, to workers that they need to work more, and to business owners that they need to pay more in salaries. That’s all good for employee pocketbooks—and for the economy.

I N S I G H T June 17–23, 2022 45

MILTON EZRATI is chief economist for Vested, a contributing editor at The National Interest, and author of “Thirty Tomorrows” and “Bite-Sized Investing.”

Milton Ezrati

Weakening Household Finances

Budget constraints will slow consumer spending growth

U

.s. consumers— the backbone of the post-pandemic recovery—are losing the wherewithal to keep up their spending. Signs were already evident in the uneven pace of spending growth during recent months.

Matters have become crystal clear in the income data reported by the Commerce Department. Households are already sacrificing savings flows just to keep up with current rates of spending, much less to expand them. The future can’t help but see spending slowdowns and likely cutbacks that will slow or halt the overall pace of economic growth.

To be sure, the top-line income figures still look good. A continuing robust pace of hiring and decent wage growth has so far this year pushed up paycheck income by 9 percent at an annual pace. That tops even the unconscionably high rates of inflation plaguing the country.

Proprietors’ incomes have lagged, growing at only a 3.5 percent annual pace. Evidently, rising costs have eaten away any gains these businesses might have enjoyed from increasing prices.

Farmers have seen their incomes boom at an astronomical 373.4 percent annual rate because of the general rise in food prices and, of course, the special price boost brought on by the shortfall of Russian and Ukrainian grain shipments.

Of course, this has a negligible impact on the overall income tally, as farmers are a small part of the total.

On these bases, consumer spending would seem capable of just rolling on, but this is far from the whole story. Investment income has taken a hit. The Commerce Department reports that it has grown at only a 3 percent annual rate so far

46 I N S I G H T June 17–23, 2022

this year, far behind inflation.

Despite the impulse to dismiss such a shortfall as a problem for the (undeserving) “rich,” investment income mainly concerns retirees who count on it for the necessities of life. It usually constitutes between 13 percent and 15 percent of all household income, so the shortfall here matters on both accounting and human grounds.

Transfers from the government, usually between 18 percent and 20 percent of total household income, have also lagged.

Households are already sacrificing savings flows just to keep up with current rates of spending, much less to expand them.

To be sure, payments under Social Security, Medicare, and Medicaid continue to grow close to the pace of inflation. But dollar flows from unemployment insurance have slowed, happily because of job growth, while COVID-19 emergency payments have fallen by more than half.

And taxes have cut back a great deal on what households have for spending. With the surge in hiring and wages, payroll tax collections have increased disproportionately, rising at a 10 percent annual rate so far this year and taking quite a chunk out of how much gross income people have at their discretion. At the same time, income taxes have also increased disproportionately since this country’s progressive tax system takes at an increasing rate from each additional dollar of income.

Taking all these considerations into account, overall after-tax household income—what the Commerce Department refers to as disposable income—has grown at only a 5.8 percent annual rate so far this year. And since that pace of expansion trails the rate of inflation, real disposable income has declined at something close to a 2 percent annual rate. This isn’t the stuff of a continued consumer spending boom of the sort that has typified the economy for the past 18 months or so.

The strain is already evident: Just to sustain even the recently slowed pace of consumer spending, households have begun to sacrifice savings flows. These have fallen off precipitously. At the end of 2021, for example, households added to their savings at an annual pace of $1.5 trillion, setting aside about 8.4 percent of their total income. As of the latest data, that pace has dropped to $1.2 trillion, only 6.2 percent of income, a 67.5 annualized rate of cutback. People can’t continue in this way for long.

They’ll have to slow or cut back on their rates of spending.

Anticipated cutbacks should be less draconian than experienced during the 2008–09 great recession of painful memory. But the negative direction is nonetheless clear. Spending will slow and at times decline as inflationary pressures will likely persist for some time.

Even if the economy gets lucky, avoids recession, and experiences what the financial media likes to call a “soft landing,” the impressive pace of the post-pandemic recovery to which all have grown accustomed will slow dramatically during the second half of this year and into 2023.

Emel Akan

EMEL AKAN is a senior reporter for The Epoch Times in Washington. Previously, she worked in the financial sector as an investment banker at JPMorgan.

US Farmer Sentiment Plummets Rise in production costs signals more food inflation ahead

ANDREW CABALLERO-REYNOLDS/AFP VIA GETTY IMAGES

D

espite strong commodity prices, farmer sentiment in the United States deteriorated sharply in May, as producers are anxious about their farm’s financial health and prospects.

Last month, farmer sentiment dropped to its lowest level since April 2020, down by 22 points, according to the Purdue University/CME Group Ag Economy Barometer sentiment index.

The rapid rise in production costs and uncertainty regarding the direction of input prices have been important contributors to the drop in sentiment. About 44 percent of farmers cited input costs as their biggest concern for the coming year, according to the monthly survey.

Nearly 6 out of 10 farmers predict farm input prices to be at least 30 percent higher this year compared to 2021.

The increase in input prices has been substantially larger than the general inflation seen in farm products so far, according to Michael Langemeier, professor at the department of agricultural economics at Purdue University and co-author of the Ag Economy Barometer report.

That’s why farmers “certainly think that general inflation is going to persist for the next 12 months,” Langemeier told Insight.

On top of this year’s massive price hikes, nearly four out of 10 farmers estimate input prices to rise by 10 percent or more in 2023, according to the survey.

The two most important farming inputs are diesel and fertilizer. Prices of both have risen significantly in the past year and the Russian invasion of Ukraine has further disrupted both markets. Hence, farmers aren’t expecting price relief anytime soon, according to Langemeier.

U.S. farmers are highly concerned about the possibility of experiencing

Nearly 6 out of 10 farmers predict farm input prices to be at least 30 percent higher this year compared to 2021. a price-cost squeeze in the coming years, which refers to the situation in which costs remain high while output prices decrease.

Farmers currently have a strong balance sheet, Langemeier noted, but “they could be facing a price-cost squeeze, particularly in 2023.”

The university conducted the survey with 400 agricultural producers from around the nation who are typically small farms, sole proprietors or partnerships, or small family-owned businesses.

About 21 percent of respondents cited climate, environment, and farm policies as their biggest concerns, according to the survey. Some farmers also cited the availability of inputs (19 percent) and lower crop or livestock prices (18 percent) as top concerns.

Land Values Soar Despite the negative sentiment, there’s a lot of optimism when it comes to the value of farmland.

Respondents who anticipate an

increase in farmland values over the next five years regularly cite nonfarm investor demand as the leading factor, followed by inflation.

In recent years, billionaires, global firms, and investment funds have been aggressively purchasing farmland. Microsoft co-founder Bill Gates has quietly amassed approximately 270,000 acres of farmland across the United States, according to media reports.

Langemeier believes there are numerous reasons for the high demand for investment in farmland, one of which is that “farmland returns are not correlated with stock returns,” making them attractive assets.

It’s especially intriguing for investment funds because they’re similar to dividend-paying stocks in that they get a cash rent every year, as well as the possibility of land appreciation, he noted.

“The return on farmland has been pretty good over a long period of time,” Langemeier said.

However, the survey revealed a worrying trend in capital expenditures, which has the potential to reduce agricultural productivity in the coming years.

Despite having high cash flow, the vast majority of farmers (78 percent) believe that it’s a bad time to invest in things such as machinery and buildings.

Wheat prices, up 60 percent over the past year, present an opportunity for U.S. farmers. The invasion of Ukraine has threatened the global wheat supply in recent months, and many experts have warned that the shortage might trigger a global food crisis.

Part of the issue with all agricultural commodities is that farmers only produce one crop per year, according to Langemeier, making it difficult for U.S. producers to swiftly react to rising prices.

However, he believes that farmers will plant more wheat this fall in response to the increased prices.

I N S I G H T June 17–23, 2022 47

DANIEL LACALLE is chief economist at hedge fund Tressis and author of “Freedom or Equality,” “Escape from the Central Bank Trap,” and “Life in the Financial Markets.”

Daniel Lacalle

Main Culprit of Food Shortages

Many nations around the world have a large deficit in cereal production

M

48 I N S I G H T June 17–23, 2022

If there’s a risk of food shortages, it comes from years of limiting the possibilities for farmers and continuously making their production costs rise with unnecessary direct and hidden taxes. $231, and $39 per hectare, respectively). ... German farms had the highest direct cost, operating cost, and overhead cost per hectare ($535, $573, and $506 per hectare, respectively).”

As such, German farms were also uneconomical.

While most average farms yielded a loss even in pre-pandemic periods, the highest economic profit earned was $68 per acre ($167 per hectare) for the typical Russian farm.

The rising cost of production came from increasing administrative burdens, environmental pressures, and raising taxes on farmers in the middle of challenging weather periods, as we’ve seen throughout Europe. In Europe, farmers have seen rising minimum wages and increasing direct and indirect taxes on top

of a soaring cost of energy driven by the cost of CO2 emissions multiplying even before oil and natural gas prices rose due to the war. The average direct and indirect cost has increased even in the periods when inflation in the energy input was low. This has made the marginal producers react less rapidly to price changes, and many farms simply gave up.

In any other circumstance, the partial collapse of supply from Ukraine and Russia wouldn’t have a significant impact, as analyst Aaron Smith points out: “How common are market shocks of this magnitude? Russian and Ukrainian wheat exports were 7.3% of global production in 2020. Wheat production declined 6.3% in 2010, in part due to a drought that [reduced] Russian production by 20 million metric tons.

Similarly large declines also occurred in 1991, 1994, 2003, and 2018.”

This may prevent a global food crisis, although countries such as Egypt, Lebanon, Sudan, and other Middle Eastern and North African countries may have a very difficult time as Ukraine and Russia account for between 60 to 90 percent of their supply.

Governments around the world should have learned from these previous experiences and eased the administrative and tax burdens on farming to allow the market to provide flexibility in times of supply concerns from one or two nations. Instead, we’ve seen more rigidity, more taxes, and higher restrictions that have limited the possibility of easing supply chain issues.

The Ukraine war or tough weather changes wouldn’t cause a global food shortage in a normal environment of free trade and ease of doing business for farmers. If there’s a risk of food shortages, it comes from years of limiting the possibilities for farmers and continuously making their production costs rise with unnecessary direct and hidden taxes.

SEAN GALLUP/GETTY IMAGES

any have read that there’s a food crisis looming and that there are significant concerns about grain shortages. The main reason for this possible crisis is the Russian invasion of Ukraine. However, this isn’t the full picture.

Many countries around the world have a large deficit in cereal production, which is essential to feed livestock. The main culprit is rising government intervention that has made costs soar even in periods of low energy prices and an unsustainable level of restrictions that have made it impossible for farmers to continue planting and producing grain.

In 2020, Ukraine produced 3 percent of the world’s wheat, and Russia produced 11 percent. Together, they produce almost as much wheat as the entire European Union, but the reason for this is that the EU has made it impossible to produce wheat in an economical way.

According to the EU website, the main costs (categories of expenditure) for cereal production are seeds, fertilizers, crop protection products, and machinery and infrastructure.

According to the EU cereal farms report, the EU average total operating cost for cereals was 635 euros ($679) per hectare in 2017. In terms of crops, the EU admits that maize production has higher costs at all levels except for crop protection, which is higher for common wheat production.

Typically, cereal farms in economies with high levels of government intervention were already loss-making in 2019, according to the Center for Commercial Agriculture at Purdue University: “Average losses for the typical farms from Argentina, Australia, Indiana, and Kansas were $46, $1, $94 and $16 per acre, respectively during the five-year period [2013–17] ($114, $1,

Fan Yu

FAN YU is an expert in finance and economics and has contributed analyses on China’s economy since 2015.

No ‘Silver Bullet’ to Lower Gas Prices

SAUL LOEB/AFP VIA GETTY IMAGES

Biden and years of anti-energy policy have left the US with few options

s the national average price of gasoline tops $5 per gallon, there are few reasons for optimism that gas prices will decline any time soon.

President Joe Biden, despite his recent remarks, has no good solution at his disposal to temper the rise in gasoline prices.

There are many culprits, some economic and others political. Longstanding Democratic policies against the energy industry have crippled U.S. producers, while Western decisions to sanction Russia have created an acute supply crunch. And unless the Biden administration undoes its entire energy policy, there are few levers available to the U.S. government within the current framework to mitigate gas prices.

The reason for high gasoline prices is supply and demand. But several constraints were self-created. Let’s dive in.

According to the American Petroleum Institute, 50 to 60 percent of the price of gasoline is derived from the price of crude oil. That’s the biggest driver of gas prices.

Oil prices are set by the market.

Anyone can look up what the spot oil is trading at on a given day.

The argument that the oil producers are “price gouging” is overly simplistic. They can theoretically sell their oil below market price, but that’s an ill-advised decision that wouldn’t make a dent unless the entire industry—all oil producers—can be persuaded to do the same.

And experts are warning that oil prices will likely go up, not down.

So what can be done to lower the price of oil? Economics 101 suggests that there are two ways to reduce the price of a product: Either supply has to increase or demand has to decrease.

To increase supply, the United States has been releasing barrels of oil from the nation’s strategic

The argument that the oil producers are ‘price gouging’ is overly simplistic. reserves. It has an effect, but not enough to move the market.

OPEC+, which includes Russia, recently agreed to boost crude oil output in July and August by 648,000 barrels per day, or 50 percent more than previously discussed.

That should also bring more oil to the market, and the price of oil temporarily decreased when the decision was announced. But it won’t be enough to offset the ban on Russian oil.

What about domestic producers? The Biden administration, the United Nations, and prevailing anti-fossil fuel bias from banks and lenders over the past several years have limited the oil industry’s access to capital and financing.

The Keystone XL Pipeline was canceled. The U.N.’s “Net-Zero Banking Alliance” effectively forced global banks to restrict lending to the oil and gas industry.

Lifting these longstanding “sanctions” on the domestic oil industry can ultimately solve the issue.

However, the Biden administration, as well as left-wing bias within the

banking and business establishment, are unlikely to suddenly undo years of policy evolution.

The other solution is to decrease demand.

Various factors have caused demand to increase recently. Employers have compelled workers to go back to the office, fueling the demand for gas used in commuting. The return of travel—especially jet travel—has increased demand for jet fuel, which takes up capacity at oil refineries that otherwise could be used to refine gasoline for cars.

Besides the price of crude oil, the next biggest price component of gasoline (at 15 to 20 percent) is the cost of refining. Refining costs don’t move much, but the costs of some refining inputs have also increased, such as wages (labor) and the cost of ethanol (an additive made from corn, the price of which has also gone up).

Next, at 10 to 20 percent, are the costs of distribution, such as pipelines and transportation. Transportation costs also went up because of higher wages and diesel prices.

And lastly, also at 10 to 20 percent, are federal, state, and local taxes.

Taxes vary depending on state and municipality. California has the highest state gas tax, while Alaska has the lowest.

What would actually stem the demand for oil? An economic recession.

A downturn will cause businesses to cut back on investing and spending, consumers to cut back on travel and purchases, and overall economic activity to slow.

So what would the U.S. government do to combat high gas prices— choosing to undo years of anti-energy industry policy to increase supply or waiting for a recession to drive down demand?

It’s fairly clear the choice was the latter.

I N S I G H T June 17–23, 2022 49

JEFF MINICK lives and writes in Front Royal, Va. He is the author of two novels, “Amanda Bell” and “Dust on Their Wings,” and two works of nonfiction, “Learning as I Go” and “Movies Make the Man.”

Jeff Minick

Making Criticism Positive

Well-intentioned suggestions can lead to great improvements

E

verybody’s a critic.

The shopper in the produce department of the grocery store gently squeezes an avocado, testing for ripeness. The 5-year-old wants his dad to read “Winnie-thePooh” at bedtime instead of “Where the Wild Things Are.” We bring a critical eye to all sorts of stuff every single day, usually without much thought and with no harm done.

It’s when we deal with people that criticism gets sticky.

Recently, an acquaintance told me her son was called to his coach’s office, where the coach told him his bad play on the field was hurting the team. The coach offered no examples of this young man’s failures and no suggestions for improvement, nor did he attempt to soften his accusation. Instead, he threw a figurative bucket of cold water on the kid and sent him on his way, very much, I hardly need to add, confused and down in the dumps.

That kind of critique, if it can be called that, not only stinks, but is just plain worthless. The coach lowered the morale and confidence of a good player without any compensating gains.

This is criticism at its worst.

On the other hand are those thinskinned people who, having received some kind and well-intended appraisal from an employer, a friend, or even a spouse, practically blow a gasket over what they deem a personal attack. For whatever reason—an oversized ego, an interior insecurity—they simply can’t handle having their flaws pointed out. They resent constructive criticism, no matter how valid or how mildly it is delivered.

For the past three years, I’ve written articles and book reviews for six

50 I N S I G H T June 17–23, 2022

Offer the honey of encouragement along with the vinegar of critique. editors of five different publications.

They often offer me suggestions or request changes in the pieces I submit.

In each instance, I listen and consider what they have to say. Why? Because I understand that both my editor and I want the best article we can put together for our readers. It’s as simple as that. We share the same goal. We want cogent arguments, precise language, and words that shine.

The point in assessing someone’s performance is to convince that person to improve. That goal is best achieved when the critic acts with finesse, as do my editors, offering the honey of encouragement along with the vinegar of critique, and while making clear why such changes would be helpful. An example: Instead of badgering her husband, John, for the umpteenth time to help with the dishes after supper, or

worse, tromping around the kitchen boiling over with silent resentment, Anne might invite John to join her for a glass of wine on the deck that evening and then explain to him without rancor how much she’d appreciate his assistance.

And John? Rather than getting his hackles up and resenting Anne’s request, he might try listening to her and then asking himself some questions. Would it kill him to spend 15 minutes after dinner giving his wife a hand with these chores? Might not that time together even act as one more bond in their marriage?

“Criticism may not be agreeable,” Winston Churchill said in a 1939 interview, “but it is necessary. It fulfills the same function as pain in a human body; it calls attention to the development of an unhealthy state of things.”

A good point. But I would add that we can make criticism agreeable, or at least carry less of a sting, and that those being critiqued can play their part by listening and asking questions. Pursue these goals, and that “unhealthy state of things” can be treated and made well again.

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Nation Profile

THOUGHT LEADERS

China’s Leverage US reliance on Chinese-made pharmaceuticals and critical technology could help hand Taiwan to the regime, Sen. Marco Rubio says

W

hat everybody needs to understand,” Sen. Marco Rubio (R-Fla.) said, “is that the day China takes Taiwan without the U.S. being able to stop them will be a linchpin moment in human history.”

In a recent episode of “American Thought Leaders,” host Jan Jekielek sat down with Rubio to discuss how the Chinese regime has been systematically co-opting our elites for decades and leveraging the American system against us— from our innovations to our laws to our free markets.

JAN JEKIELEK: As the

SEN. MARCO RUBIO: The

purpose of these hearings is to shine a public light on something that a lot of people are unaware of: that there are all sorts of technologies and industries critical to the direction of the 21st century. They’re developing very fast, whether 52 I N S I G H T June 17–23, 2022

SEN. RUBIO: Let’s say

you’re an American company headquartered in the United States, but you view yourself as a global company. Your job is to make as much money as you can this next quarter so your shareholders will be happy and your board will give you a new contract. It doesn’t matter if the way you’re doing it is bad for America.

That’s what a lot of companies have decided to do.

MR . JEKIELEK: What

about the left-wing radicalism you mentioned?

SEN. RUBIO: These are

Tourists visit the anti-landing spikes on the coast of Kinmen, the front line islands of Taiwan, on Oct. 20, 2020. it’s quantum computing or artificial intelligence.

Whichever nation or nations have the high ground and are dominant in those fields will benefit geopolitically, militarily, and economically across the board.

America needs to be competitive in those fields, and we face an adversary in China that is investing heavily in them, but is also stealing the advances we’re making.

The fear is that we’ll find ourselves in a world where China has established technical dominance in a number of critical fields.

There’s no American alive today that has ever lived in a world in which America has been in second place

in global technology. The world looks very different when your country isn’t the world leader in technology, and an adversary is.

It’s important for us to understand that if we think we’re going to “free market” our way through this, that’s not going to work, because China isn’t playing by free market rules. They are playing by mercantilist rules where their companies get to cheat and steal, but ours do not. They expect us to live up to the rules, but they also expect us to allow them to continue to violate them.

MR . JEKIELEK: You’ve

said, “Public policy toward China has been held hostage by left radicalism on one

the American corporations that decide they’re going to boycott the state of Georgia over an election law or boycott Florida over what kids are being taught in the classroom. But they have no problem doing business in China—where there are no human rights, where people are jailed without trial, and where Uyghur Muslims are put into work camps.

MR . JEKIELEK: How do

you view the strategic threat of China versus Russia?

SEN. RUBIO: They’re not

comparable. There’s no doubt Russia has strategic and tactical nuclear weapons. They also have some conventional capabilities, although clearly not as many as they had two months ago, when they suffered atrocious losses at the hands of the Ukrainians.

China is on a completely different scale. China is a

FROM L: SAM YEH/AFP VIA GETTY IMAGES, ANNA MONEYMAKER/GETTY IMAGES

vice chairman of the Senate Intelligence Committee, you recently chaired a hearing about the Chinese Communist Party’s (CCP’s) plans for economic and technological dominance. What are the most important findings of this hearing?

side or a lack of corporate patriotism.”

Nation Profile

technological, commercial, biomedical, geopolitical, military, and industrial competitor. I think on a scale of 1 to 10, China is a 10 and Russia is a 3. And the Chinese are watching Russia and the Ukraine very carefully.

What happens when you invade a neighboring country? How does the world respond? What leverage do they have on us, and what leverage do we have in return? They’re taking notes and learning lessons from this invasion of Ukraine for their future aspirations, both in the South China Sea and in places like Taiwan.

MR . JEKIELEK: What

leverage do they have on us?

SEN. RUBIO: Our sup-

ply chains are disrupted because of a pandemic.

Imagine if they decide to deny us the same things— not because of a pandemic, but because they want to threaten us. Ninety percent of the most important antibiotics we rely on in this country are made in China.

Seventy-something percent of the elements involved in batteries, lithium, and the like are from China. And 80-something percent of our generic pharmaceuticals are made in China.

They have the ability to disrupt our economy right now, because we depend way too much on them for both basic raw materials and the finished production of goods. And I don’t think we’ll finish this decade without something happening with Taiwan. So, just imagine we’re getting to that point, and China

says to America, “If you get involved with Taiwan, we are going to cut you off from these things.”

MR . JEKIELEK: Are you

suggesting that within this decade, you expect the Chinese regime to take action on Taiwan?

“I don’t think we’ll finish this decade without something happening with Taiwan.”

Sen. Marco Rubio (R-Fla.).

SEN. RUBIO: I don’t think

we’ll finish this decade without that happening.

They will prefer to have the Taiwanese say: “The Americans are not going to come to our aid. They don’t have the ability. So even if America wanted to come to our aid, they’re not going to, because they’re afraid of the impact that’s going to have on their economy.”

And once Taiwan makes that decision, then they have no choice but to cut the best deal they can with the Chinese government. I think that is Plan A for China. That’s what they would prefer to see happen.

Plan B is to take Taiwan by force—a rapid military engagement that allows them to secure [Taiwan] before there can be any foreign engagement, be it from the United States or our allies in the region.

I N S I G H T June 17–23, 2022 53

Nation Profile

“Whichever nation or nations have the high ground and are dominant in those fields will benefit geopolitically, militarily, and economically across the board.”

MR . JEKIELEK: This has

incredible implications globally. I don’t know if all of our viewers are aware that Taiwan is the production hub for the most technologically advanced chips made for all sorts of important devices, including military devices.

SEN. RUBIO: Yes, [pos-

sessing] Taiwan’s semiconductors would give China tremendous leverage over the world.

But what everybody needs to understand is

that the day China takes Taiwan without the U.S. being able to stop them will be a linchpin moment in human history. That will be the moment when the world will conclude that the United States and the West are no longer the most powerful countries in the world. The whole world order will change to a China-centric world order at that moment. We’re hoping that day will never come.

MR . JEKIELEK: I want

to pivot to human rights.

You’ve been involved in the issue of Chinese human rights for a long time.

SEN. RUBIO: They want

to become the world’s most powerful country. If the world’s most powerful country is willing to do these sorts of atrocities to its own people, imagine what they would do to you or the people around the world. So, first and foremost, you have to understand who these people are, and the best way to understand them is to see how they treat their own people.

You don’t put people into death camps. You don’t have slave labor to help your industries. If the most powerful country in the world thinks those things are acceptable, that is going to influence what happens around the world.

MR . JEKIELEK: I recently

had Nury Turkel [vice chair of the U.S. Commission on International Religious Freedom] on the show, talking about the Uyghur genocide and the genesis of it. He

said that nothing was done when credible reports were coming out about organ harvesting from Falun Gong practitioners. Now it’s happening to the Uyghurs as well.

SEN. RUBIO: I think the

Chinese have calibrated the world’s reaction to everything—from their intrusions in the South China Sea to these atrocious practices.

They believe that society is too busy around the world to care too much about these things and [people] aren’t going to walk away from the benefits they gain by having a relationship with China.

So they’ve learned how to play this game.

MR . JEKIELEK: What are

the key things that America and other nations must do to counter the CCP threat?

SEN. RUBIO: We need to

This interview has been edited for clarity and brevity.

People have their faces scanned as they arrive for the World Artificial Intelligence Conference in Shanghai on Aug. 29, 2019.

54 I N S I G H T June 17–23, 2022

THIS PAGE: HECTOR RETAMAL/AFP VIA GETTY IMAGES

identify the critical industries for national security in the 21st century. We must have either an American or an allied capability to produce those things.

If it comes from China, we should assume it will be weaponized against us in the future. I think that is by far the most important thing.

We should also ramp up our military capabilities to be able to defend against what China is developing, including investments in space defense.

T R AV E L • F O O D • L U X U R Y L I V I N G

Unwind

No.24

Housed in the tiny beachfront cottage from “Top Gun,” this is the best place to enjoy great pie and have fun in Oceanside, California.

PHOTO BY JAKOB LAYMAN

Feel the Need for Pie! THE FIRST LICENSE TO serve coffee in Vienna was issued in 1683, and now there are an estimated 2,400 coffeehouses, making the city a must-visit for java fans. 58

BECAUSE A COMMITMENT to staying healthy doesn’t end when you’re away from home, consider this collection of gear to help you keep the flab at bay. 63

66

AIMED AT OUR YOUNGER readers, this installment of “Polite Society” provides advice on becoming a respectable, admirable teenager or young adult. 67

INSIDE I N S I G H T June 17–23, 2022 55

RED CITY Masterpiece This noteworthy and exotic oneof-a-kind property affords the rare opportunity to truly live like royalty

By Phil Butler

The centerpiece of this extraordinary property is a 200-foot-long swimming pool wrapped in a private park and palatial grounds.

56 I N S I G H T June 17–23, 2022

Lifestyle Real Estate

F

COURTESY OF MOROCCO SOTHEBY'S INTERNATIONAL REALTY

or those who seek a bit of the grandiose and especially definitive uniqueness, nothing could be more tempting than this palace in Marrakech.

Located in Bab Atlas, not far from the city center, the 23,000 square-foot architectural masterpiece occupies the middle of an 11-acre garden paradise.

Surrounded by its own botanical park and landscaped gardens, this six-bedroom, sixbath palatial villa is a Greco-Roman revival showplace, sure to wow all visitors. The home’s designers succeeded with their goal to retain Moroccan tradition and materials while creating a sumptuous and noble residence.

The main house’s more notable features include a triple living room with two fireplaces, formal dining and reception rooms, a concert hall/conservatory, five suites with their own private gardens, and a palace-worthy 1,640-square-foot master suite with its own library and private swimming pool.

Other spectacular features of the home include a cinema room, a wine cellar, a large library, and multiple reception/sitting rooms. Fitness facilities abound; the triple living room overlooks a fabulous 200-foot-

long swimming pool, and there’s also a truly expansive spa equipped with a hammam Turkish bath, a massage room, a resting room with a library and fireplace, and a wellequipped gym.

Outside, lush gardens envelop the home, its private lake, its estate outbuildings, and a productive vegetable garden. A separate house offers seven additional bedrooms, a kitchen, living room, and baths for staff. There’s also a two-bedroom caretaker’s house, a laundry, tennis courts, and parking for a dozen cars.

Once the capital of the Almoravid Empire, Marrakech is also known as the “Red City” because of the red sandstone walls of the ancient imperial city. One of the four imperial cities of Morocco, it’s the capital of the Marrakesh-Safi region. Situated in the western foothills of the Atlas Mountains, this famous city’s name means “country of the sons of Kush,” after the great-grandchildren of Noah. Steeped in history, myth, and lore, Marrakech is unmistakable, unique, and a world treasure.

Phil Butler is a publisher, editor, author, and analyst who is a widely cited expert on subjects ranging from digital and social media to travel technology.

BAB ATLAS PALACE MARRAKECH, MOROCCO PRICE ON REQUEST • 6 BEDROOMS • 6 FULL BATHS • 7,000+ SQUARE FEET • 11 ACRES (4.5 HECTARES) KEY FEATURES • PALATIAL FEATURES • IMMACULATE GARDENS • REMARKABLE MASTER SUITE • EXCLUSIVITY AGENT Sotheby’s International Realty | Morocco Carolina Montilla +212 6 21 87 21 87 cm@sothebysrealty.ma

A massive outdoor living space capable of easily accommodating 100 or more guests.

Exuding a Greco-Roman vibe, the 23,000-squarefoot main residence offers every possible convenience and luxury to satisfy every whim.

All throughout the main house, views of nature outside abound. It’s obvious no stone was left unturned to create a royal chamber fit for a sultan.

I N S I G H T June 17–23, 2022 57

Travel Austria

The elegant CaféRestaurant located under the dome of the Kunsthistorisches Museum Vienna.

A Cup of Tradition

Coffeehouses are ubiquitous in Vienna, a legacy of its imperial past

By Janna Graber

I

58 I N S I G H T June 17–23, 2022

CZECH REPUBLIC

VIENNA

AUSTRIA

Vienna is close to the Czech Republic, Slovakia, and Hungary.

SLOVA

HUNGA

FROM TOP L: COPYRIGHT GOURMET, THE EPOCH TIMES, WIENTOURISMUS/PETER RIGAUD, WIENTOURISMUS/CHRISTIAN STEMPER

t’s almost 2 p.m. and i’m on a mission. The afternoon sun is beginning to wane as I make my way down the cobblestone streets of Vienna’s 1st district, heading to one of my favorite coffeehouses.

The air is filled with the rich smells of dark coffee and sweet cakes that are being served up all over the city. While coffee is usually a morning drink, in Vienna, the afternoon is the perfect time to stop and have a coffee and a thick piece of torte. It’s a tradition that has survived since Vienna’s imperial days.

For nearly 640 years, Vienna served as the heart of the mighty Austro-Hungarian Empire.

The Hapsburgs family ruled from Austria to Hungary, and even into what is now the Czech Republic. The royal family built beautiful palaces, ordered court composers (including

Mozart) to write music, and ate royal pastries that were invented just for them.

When the empire fell after World War I, the remnants of this imperial past remained as part of Vienna’s culture. A visit to the city’s famous coffeehouses is a revealing window into that royal past.

This thriving coffeehouse culture is deeply engrained in Viennese life. From the incredibly elegant to the everyday, each coffeehouse serves its fare with a touch of class.

There are many revered coffee drinks, from the ever-popular Melange, an extended expresso with frothy milk, to a Fiaker, a double espresso with rum, cream, and a cocktail cherry, to an Einspänner, a mocha topped with whipped cream.

When I lived in Vienna as an exchange student, I quickly learned that coffeehouses are the living rooms of Vienna. It’s common to

Travel Austria

meet friends at coffeehouses for stimulating conversation and nice company.

Others prefer to enjoy their coffee alone, relaxing with a good book or local newspaper, which is often displayed on a reading stick for ease of use. Coffee is often served with flair on a silver tray, along with a small glass of water and sometimes a tiny piece of chocolate.

If you’re looking for Vienna, you will find it in a coffeehouse. With that in mind, I head into Café Landtmann, which has been a coffeehouse since 1873. I take a seat on an original Thonet chair that dates back to the imperial age and glimpse my reflection in mirrors from the 1920s.

A waiter in a crisp white shirt, black bow tie, and coat brings my coffee on a silver tray, along with a slice of my favorite poppy seed cake. My friend and I linger for more than an hour, chatting about the day, and enjoying the setting.

Vienna has more than 2,500 coffeehouses to choose from, so it’s easy to find one you like. Café Central is among the most beautiful.

Housed in a small palais that reflects Venetian and Florentine architecture, it was once a meeting place for famous artists, writers, and thinkers, including Franz Kafka.

Café Sperl is much more Bohemian. Founded in 1880, its marble tables and parquet floors still retain their original charm. The café has been in several movies, including “Before Sunrise” and “A Dangerous Method.”

The Café-Restaurant at the Kunsthistorisches Museum Vienna (Art History Museum) is another beautiful coffeehouse. The museum building itself is a stunning art piece, and the

coffeehouse is no exception. The plush red seating under a stately dome hall feels almost regal, and diners have a breathtaking view of Vienna through its tall windows.

Café Diglas on Wollzeile is just steps from St. Stephen’s Cathedral, the heart of Vienna. A true traditional Viennese coffeehouse, it offers a huge selection of coffee and cakes. The city’s bakers must be busy, for every restaurant and coffeehouse has its own creations.

Sacher Torte is among the most famous of the city’s cakes. It was created at the grand Hotel Sacher in 1832 by 16-year-old Franz Sacher, who made the special dessert for Prince Metternich. Today, Hotel Sacher bakes more than 360,000 hand-made Original Sacher Torte each year. I’ve even had it shipped to my house in the United States.

In even the most modest coffeehouses in Vienna, you can find delicious coffee and pastries. On my last morning in Austria, two friends and I stop at Kleines Café, a tiny establishment with a few outdoor tables in a square next to a Franciscan monastery.

The restful soundtrack of Vienna—footsteps on cobblestone, shopkeepers unloading their wares and children laughing at a nearby table—plays in the background as I listen to my friends talk. I sip slowly on my coffee, wanting to make the moment last. Then I sit back and soak it all in. It feels good to be in Vienna.

Janna Graber has covered travel in more than 55 countries. She is the managing editor of Go World Travel Magazine.

OVER

2,500

COFFEEHOUSES are spread throughout Vienna.

If You Go When to Visit: Vienna is a year-round destination, with comfortable weather in the spring, summer and fall. The winter season attracts travelers to its magical Christmas markets.

Accommodations: I recommend the Grand Ferdinand, a boutique hotel with an enviable location on the Ringstrasse in the First District.

From there, you can walk to many of the city’s top attractions and coffee shops.

The luxury hotel has quiet, comfortable rooms, and offers an extensive breakfast served with amazing views from its rooftop restaurant.

AKIA

ARY

It is said that the young Emperor of Austria Franz Joseph A melange at Café Sperl, consisting of Treats at Café Diglas. was fond of Café Demel, and in particular its violet sorbet. brewed coffee, steamed milk, and cream.

I N S I G H T June 17–23, 2022 59

CLASSICAL ART as an Investment

Masterworks rarely depreciate, making them viable candidates for a portfolio

By Bill Lindsey

60 I N S I G H T June 17–23, 2022

Bought wisely, classical art can be a sound investment and a way to preserve wealth for future generations.

Lifestyle The Business of Art

rt has the ability to stir our emotions, not unlike music, creating reactions that may be universal as well as uniquely personal. Great art has been celebrated, enjoyed, and even coveted, but could it also have a more practical purpose? For many investors seeking to diversify portfolios for financial or personal reasons, the answer is “yes.” Traditional investment portfolios are often associated with stocks, bonds, and real estate. And, as covered in an earlier article, wines are also present in some investment portfolios. Artwork is another candidate for those hoping to see gains. The trick is to develop a plan and follow it faithfully.

The first step is to determine why you want to acquire artwork. If viewed strictly as an investment, asset appreciation would be an expected goal; this would also be a positive outcome for artwork collectors, beyond the pleasure of owning the art.

Because art created by the masters rarely depreciates in value, it can also represent a tempting way to “store” cash, compared to stocks. Another motivator could be a desire to preserve and protect great works of art for the enjoyment of future generations.

LEFT PAGE: DIANE PICCHIOTTINO/UNSPLASH; THIS PAGE FROM TOP: REDCHARLIE/UNSPLASH, EMKA74/SHUTTERSTOCK

PAINTINGS ARE SUBJECT to decay

and damage from UV exposure, the elements, and irrational people. As an example of the care routinely exercised to protect these works when they are open to viewing by the public, the “Mona Lisa” is protected by a sheet of bulletproof glass, which precaution proved very beneficial when a madman recently attempted to deface da Vinci’s 16th-century masterwork by applying a handful of cake. The painting had previously been stolen by a museum staffer in 1910, and was subjected to an acid attack in the 1950s.

Artwork can also be acquired for personal use in the hopes it will grow in value, but it’s important to recognize that tax laws are quite different for collectors than they are for dealers or investors. To the Internal Revenue Service (IRS), an artwork dealer is a person who actively buys and sells pieces of art. This status is subject to how much

art is purchased, the motivation for the purchase, and the person’s overall sales efforts and activity.

THE IRS DEFINES an investor as a

person acquiring artwork for the express purpose of, and a documented history of, reselling the items at a profit. To the IRS, a collector is a person who acquires art for personal enjoyment, making it a bit of a hobby. In other words, you can’t buy a Rembrandt, hang it on the wall for the next 20 years for your personal pleasure, and have the IRS allow you to treat it as an investment.

Unlike dealers or investors, a collector can’t typically deduct expenses incurred in the acquisition or the maintenance of the art, but they may be able to enjoy some tax benefits in the event they donate the art or when it is sold. There may also be advantages available to an individual loaning a masterwork to a museum or other institution for exhibition in terms of security and preservation, but in this and all other instances, always refer to a qualified, experienced tax adviser for specific advice and information prior to purchasing artwork as an investment.

While some investors may prefer to specialize in the works of a particular artist, there is certainly no reason not to have a diverse portfolio. When viewed strictly as an investment,

Some art investors allow their works to be exhibited on the condition that the museum provide appropriate security and insure the artwork.

Many auction houses will publish catalogs of the artwork to be offered, allowing you to devise your bidding strategy, keeping the auction premium in mind.

It’s important to recognize that tax laws are quite different for collectors than for dealers.

I N S I G H T June 17–23, 2022 61

Lifestyle The Business of Art

LIFESTYLE

WALLMOUNTED TREASURE

Acquiring artwork as an investment requires a very special mindset

Before finalizing a purchase, have experts carefully examine the piece to confirm its authenticity. the acquisition cost and potential for appreciation should be among the primary motivators. Investment-grade artwork can be acquired via auctions such as those organized

by Sotheby’s and Christie’s, or from museums, universities, corporate owners, or private owners.

62 I N S I G H T June 17–23, 2022

1 Is There a Masterworks ‘R’ Us? Sources of classical art include auctions, private collections, and museums. Be aware that masterworks are illiquid; they cannot be quickly converted to cash.

2 Share It—Carefully If the art will be displayed, it must be secured against theft and damage, and also protected against atmospheric and UV exposure.

3 The Real Deal

Sotheby’s and other well-established auction houses allow online bidders to participate.

It rarely happens, but not every seemingly perfect artwork is authentic; have all pieces closely examined by experts to avoid forgeries.

THIS PAGE FROM TOP: SEVENTYFOUR/ SHUTTERSTOCK, CASIMIRO PT/SHUTTERSTOCK

HOWEVER, WHEN ACQUIRING a masterwork, care must be taken to ensure its authenticity; just as is the case for high-end watches, in the art world so too do forgeries abound.

Buying from a reputable auction house provides some level of reassurance, but in the 1990s, British artist John Myatt used his considerable skills to create hundreds of forgeries of works, some of which were sold

by Sotheby’s, whose very knowledgeable personnel were completely unaware the art was forged.

A happier example is that of da Vinci’s “Salvador Mundi” painting.

Acquired for a mere $60 in 1958 under the assumption it was a forgery, it later proved to be authentic, selling for $450 million at auction. Accordingly, prior to completing a purchase of a masterwork, it’s strongly advised you have an expert or two examine the artwork. Another reason to have it examined is to avoid inadvertently purchasing stolen art, which could

result in the asset being seized and returned to its rightful owner.

Just as is the case with fine wines, masterworks must be protected, which may involve storage in a vault, UV and atmospheric exposure countermeasures, and security systems. Insurance is also a must, working with a provider with extensive knowledge of artwork and its valuation.

Investing in art is not for everyone, but when approached with knowledge and a bit of judiciously applied skepticism, it can be a fruitful way to preserve masterworks while preserving and possibly enhancing one’s net worth in the same stroke.

Luxury Living On-the-Go Fitness

WAYS TO STAY FIT ON VACATION OR BUSINESS TRIPS Because well-equipped hotel gyms can be crowded, or there are times you’d prefer to exercise in your room, here are several very portable yet effective suggestions

By Bill Lindsey

Slide to Fitness

Burn Fat, Not Rubber

SKLZ SLIDEZ

THEFITLIFE RESISTANCE BANDS

$29.99

$24.68

This virtual gym in a bag is an effective way to burn off calories and fat while providing up to 150 pounds of resistance to improve muscle tone without bulky weights. A wide variety of routines lets you work the entire body as well as specific areas.

Jumping Jack Flash

CROSSROPE GET FIT BUNDLE

These convert a hotel room floor into a gym, using your body weight to deliver a very thorough resistance training experience. Designed to work on virtually any surface, including carpeting, it provides a high-intensity, low-impact routine to burn calories, build core strength, improve flexibility, and provide cardio benefits.

FROM TOP L: THEFITLIFE STORE, SKLZ, CROSSROPE, GAIAM

$288

Prior to a fight, boxers use jump ropes to amp up their cardiovascular systems and improve stamina, which are two important health benefits for anyone.

This high-tech set includes four progressively heavier quick-connect ropes and two handle sets to ensure a full-body workout.

Instant Agility

SKLZ QUICK LADDER $29.99

This is the in-room equivalent of the running drills through truck tires used by athletes, without the danger of tripping and falling.

It’s an ideal way for tennis and hockey players—and everyone else—to train for improved acceleration, more lateral speed, and greater balance.

Get A-Round to Exercise

GAIAM RESTORE STRONG BACK STABILITY BALL $24.98

Stability balls are perfect for low-impact training; all you need to use them is the included hand pump and a bit of open floor area. This is ideal for beginners or hard-core fitness buffs to do sit-ups, push-ups, and many other routines to strengthen your back and improve balance.

I N S I G H T June 17–23, 2022 63

Epoch Booklist RECOMMENDED READING FICTION

‘Shores of Tripoli’

By James L. Haley

An American Naval Adventure Packed with naval battles and marine heroism, this work of historical fiction is the first of the “Bliven Putnam Naval Adventure Series.” Set against the ongoing threat of the Barbary pirates and full of history, it recreates the earliest years of the U.S. Navy.

G.P. PUTNAM’S SONS, 2016, 464 PAGES

‘The Caine Mutiny’

By Herman Wouk

The Moral Complications of Command and Obedience It’s World War II in the Pacific, and some officers and crew of the minesweeper U.S.S. Caine are convinced that their commander isn’t only incompetent, but also possibly mentally ill. When a typhoon forces them to act, they relieve by-the-book Capt.

This week’s selection features a potent biography on Sam Houston’s late career, and a perfect Father’s Day gift on life lessons from a golf champion.

Queeg of duty. They survive the storm, but now face charges of mutiny.

The climax of this modern classic comes during the court martial and its aftermath. Wouk’s study of leadership and the limits of obedience remain as pertinent today as when it was written.

BACK BAY BOOKS, 1992 560 PAGES

SCIENCE

‘Drunk Flies and Stoned Dolphins’

By Oné R. Pagán

The Weird World of Intoxicated Animals Only humans get drunk and stoned on drugs; animals know better, right? Not true. Not only do animals use drugs and alcohol, but many animals seek them out.

The author shows how chemistry, zoology, and botany work and how they all come together.

Pagán tells this story with humor and language accessible to those who made it through remedial science classes with a gentleman’s “C.” Even if you hated science in school, odds are you’ll love this informative, entertaining, and witty book.

BENBELLA BOOKS, 2021 320 PAGES

64 I N S I G H T June 17–23, 2022

Are there books you’d recommend?

We’d love to hear from you. Let us know at features@epochtimes.com

HISTORY

‘Exiled’

By Ron Rozelle

Sam Houston’s Political Sunset Most biographers concentrate on Houston’s early career, but Rozelle takes a different tack. He presents the end of Houston’s public life, as Texas’s first U.S. senator and governor of the new state of Texas.

Rozelle depicts Houston as a complex, threedimensional, yet very human character—a giant despite great flaws.

This portrait is of a man standing athwart history, as the tides of public opinion turn against him.

TEXAS A&M UNIVERSITY PRESS, 2017, 232 PAGES

SPORTS

‘Best Seat in the House’

By Jack Nicklaus II and Don Yaeger

Lessons from the Golden Bear As a youngster, Jack Nicklaus II followed his

father on many golf courses. At 14, he was asked to caddie and took on the role. To honor his father, a record-holding PGA golf champion, businessman, and philanthropist, he shares 18 valuable life lessons inherited from a rich legacy that extends beyond the greens.

FOR KIDS

‘A Child’s Garden of Verses’

THOMAS NELSON, 2021 224 PAGES

By Robert Louis Stevenson

CLASSICS

Beauty and Innocence

‘The Leopard’

With Stevenson’s poems and illustrations

by Tasha Tudor, this slim volume evokes the magic of childhood.

“The world is so full of a number of things, I’m sure we should all be as happy as kings.” Perfect for the littles at bedtime.

By Giuseppe di Lampedusa

SIMON & SCHUSTER, 1999 67 PAGES

A Prince’s End The 19th-century forces of democracy and political change are sweeping aside Sicily’s ancient aristocracy. Regarded by many as one of the world’s great historical novels, “The Leopard” follows the decaying status and fortunes of Don Fabrizio Corbèra, an aristocrat caught between the revolutionary forces of his time and his devotion to tradition and the Church.

Some of the book’s themes include human frailty and the hold of the past on the present.

The book begins slowly, but read on. Many readers have found riches in these pages.

PANTHEON REPRINT EDITION, 2007, 336 PAGES

‘Ten Little Monkeys Jumping on the Bed’

By Tina Freeman

And the Doctor Said …

This recognizable rhyme inspires counting, recitation, and lots of giggles as, one by one, despite Mother’s and Doctor’s orders, monkeys fall, heads bump, and 10 monkeys learn the perils of jumping on the bed. This is a fun child’s read.

CHILD’S PLAY, 2001, 14 PAGES

Ian Kane is a U.S. Army veteran, filmmaker, and author.

He enjoys the great outdoors and volunteering.

MOVIE REVIEWS

Epoch Watchlist

This week, we feature a biblical epic from the 1950s and a powerful documentary that chronicles the explosive trend of homeschooling.

NEW RELEASE

INDIE PICK

‘In a World ...’

(2013)

‘The Homeschool Awakening’ (2022) This eye-opening documentary follows the journey of more than a dozen homeschooling families and shares their responses to common misconceptions about this practice. Learn why there’s a massive homeschool awakening sweeping across our nation.

Award-winning actor Kirk Cameron not only points out the many glaring problems with today’s public school systems—breeding grounds for far-left agendas such as critical race theory, sexual depravity, and confusion— but also provides a how-to guide to starting one’s own homeschooling program.

DOCUMENTARY

Release Date: June 13, 2022 Director: Caleb Price Running Time: 1 hour, 40 minutes MPAA Rating: Not Rated Where to Watch: Theaters

ADVENTURE | DRAMA | FAMILY

him: liberating the Jewish people from slavery and taking them out of Egypt.

This is an incredibly rousing biblical epic with a star-studded

COMEDY

Release Date: Aug. 9, 2013 Director: Lake Bell Starring: Lake Bell, Fred Melamed, Michaela Watkins Running Time: 1 hour, 33 minutes MPAA Rating: R Where to Watch: DirecTV, Redbox, Vudu

‘Can’t Hardly Wait’ (1998) cast and was one of the great director Cecil B. DeMille’s final films.

A must-see cinematic extravaganza.

Raised as an Egyptian prince, Moses (Charlton Heston) learns of his secret Hebrew roots. He then discovers God’s divine mission for

it moves from one hilarious situation to the next. It’s a highly entertaining, quirky comic gem.

A CLASSIC ’90S COMING-OF-AGE MOVIE

A RIVETING BIBLICAL EPIC

‘The Ten Commandments’ (1960)

Carol Solomon (Lake Bell) is an underachieving vocal coach whose work has always been overshadowed by her boisterous father, Sam Sotto (Fred Melamed).

He has long been a mainstay of voiceover actors in Hollywood productions. Can she find her own voice and step out from under her father’s shadow?

This is a charming little indie film that pleasantly surprised me. It has a superb cast that exchanges some refreshingly earnest dialogue as

Release Date: Oct. 5, 1956 Director: Cecil B. DeMille Starring: Charlton Heston, Yul Brynner, Anne Baxter Running Time: 3 hours, 40 minutes MPAA Rating: G Where to Watch: Vudu, Redbox, DirecTV

The graduating class of Huntington Hills High School converges at a wealthy classmate’s house for a big graduation party. Creative outsider Preston Meyers (Ethan Embry) has a big-time crush on Amanda Beckett (Jennifer Love Hewitt) and plans to reveal his affection for her. But will he be successful?

Despite a few flaws, this John Hughesstyle teen romantic comedy is charming in its own way and manages to evoke some light-hearted

laughs. It captures the quintessential ’90s high school experience.

COMEDY | ROMANCE

Release Date: June 12, 1998 Director: Harry Elfont, Deborah Kaplan Starring: Jennifer Love Hewitt, Ethan Embry, Charlie Korsmo Running Time: 1 hour, 40 minutes MPAA Rating: PG-13 Where to Watch: Redbox, DirecTV, Vudu

I N S I G H T June 17–23, 2022 65

Food Restaurants

CRUISE IN FOR DESSERT: THE HISTORIC ‘TOP GUN’ HOUSE GETS A NEW LIFE AS A PATRIOTIC PIE SHOP Just in time for the sequel, the quaint beach house from the original movie has been re-imagined as Maverick’s favorite pie place—complete with his Kawasaki out front

By Bill Lindsey

F

THE HIGH-PIE

66 I N S I G H T June 17–23, 2022

saki Ninja ZX900 is parked outside.

It’s locked in place so you can’t actually ride it, but with a paint scheme and decals identical to the motorcycle Cruise rode in the film, visitors are encouraged to hop on and create unforgettable photos and videos.

Stepping inside the house, visitors are greeted by interiors adorned with “Top Gun” movie photos and posters signed by the film’s cast, as well as retro signage, antique knick-knacks, Victorian-era panels, an upholstered fireplace, vintage furniture, and one-of-a-kind needlepoint installations from artist Mary Lou Marks. Observant movie fans will spot the phone board in the back, featuring Goose, Iceman, and Maverick’s phone numbers. A

brass chandelier overhead provides a homey feel as customers place their orders at the counter.

The menu is short and quite literally sweet: individual apple or cherry fried hand pies, with or without housemade mascarpone ice cream centers, served on popsicle sticks.

Cheese, chocolate, lemon curd, and sea salt caramel dips can be added on. The fruits are all locally sourced, and seasonal options (currently strawberry and rhubarb) accompany the staple flavors when available.

In keeping with the sweets shop theme, beverages include a fizzy cherry pop, coffee (yes, it’s $1), kombucha, and Buzz the Tower, a New Orleans-style cold brew coffee sweetened with condensed milk.

ALL PHOTOS BY JAKOB LAYMAN

ew pie shops have the provenance of the “Top The renovated Gun” House. Built in 1887 as interior leans into nostalgic the 500-square-foot oceanAmericana. front summer cottage for Dr. Henry Graves in what is now Oceanside, California, it rose to fame as the home of Charlotte “Charlie” Blackwood in the 1986 The namesake HIGH-Pies blockbuster “Top Gun.” are made with It later fell into disrepair, but thanks to the efforts of S.D. Malkin local fruits and served in 1950’s Properties and the Oceanside His- military-inspired torical Society, among others, it packaging. has been reborn.

After being carefully moved from its original location at Pacific Street A creative take on pie and Seabreeze Drive to the courtyard of the Mission Pacific Hotel, over- a-la-mode fills fried-to-order looking the Oceanside Pier, it was hand pies with painstakingly restored and redechouse-made orated inside and out. Now known mascarpone ice cream. as the “Top Gun” House, it’s the new home of The HIGH-Pie, the latest project of chef and restaurateur Tara Lazar, bringing together fans of the original movie and dessert aficionados looking for a beachside treat.

Lazar, the founder of Palm Springs-based hospitality group Most Popular F10 Creative, wanted the place to be Pie: Carlsbad a nostalgic setting where a sweets Strawberry and shop meets really good pies.

Rhubarb “I envisioned the ‘Top Gun’ Chef Tara’s Pick: House as a place where the old soda Apple Pie with fountains used to be,” she said. ​”A Government place to walk to after a day at the Cheese dipping beach, a fun stop before heading sauce and a fizzy home after dinner, a first, and very cherry pop sweet, first date, the place the Little Location: 250 League team goes after a great win, N. Pacific Street, or even a place grandpa goes to get Oceanside, Calif. a $1 dollar cup of really good coffee Hours: after his walk on the pier.”

Wed. to Mon., The Victorian-style cottage wears 12 p.m.–8 p.m. a coat of bright sky blue and crisp Website: white paint to celebrate its ocean- FamousHighPie. front setting. In a nod to Tom Cruise’s com character, Maverick, a pristine Kawa-

Painstakingly restored, the “Top Gun” House in Oceanside, Calif., greets visitors with its original blue Victorian cottage exterior.

How to Be a

Great Young Person A bit of advice for those going through their teen and young adult years

We all learn many valuable life lessons as we grow up, but wouldn’t it have been great if someone had given us a few tips along the way? With that in mind, here’s some advice for our younger readers that we wish we’d learned sooner.

By Bill Lindsey

4 Be Appreciative

1 Listen Listening more than you speak is an interpersonal skill that will pay great dividends for your entire life.

Sometimes it may be difficult to not interrupt or to even keep paying attention. Resist the temptation to tune out, which is incredibly rude and only hurts you.

None of us are born knowing everything, so we learn as we go. Listening and valuing what’s being said is a huge part of the learning process.

CSA IMAGES/GETTY IMAGES

2 Respect Your Elders Those now older than 21 can remember when they weren’t.

Many can also recall how, at that stage of life, they were certain that they were quite possibly the smartest person on the planet— and definitely smarter than those around them. With age comes the realization that this assumption isn’t always correct. Recognize when you’re being mentored by someone who knows what they’re talking about and cares enough about you to share their wisdom.

It’s easy to take for granted the loving support and assistance you receive from family. Realizing that this is a gift of valuable time and effort usually occurs when you discover friends who don’t have a similar support system. When you do, take a moment and make it clear to those who are there for you that you value them and are grateful.

5 Pass It Along 3 Seek Advice Recognizing when you need help and knowing how to request it are two related and very valuable skills. Being open and honest when asking for assistance or advice shows respect to the person being approached and shows that you respect their time and help. If you don’t fully understand what they tell you, say so right away. Coming back hours or days later seeking clarification suggests that you didn’t pay full attention or respect their efforts.

If you have younger siblings, be a mentor to them or at least be aware when they need your help, from assisting them with homework to learning how to get along with others. Not all young people have the benefit of an involved adult, which may well be the cause of many of our society’s current issues, so step in to be there for them.

This should also be applied to your friends, fellow students, and co-workers.

I N S I G H T June 17–23, 2022 67

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