High Electricity Prices Have Europe Facing Deindustrialization; Don’t Let It Happen Here 

• After years of misguided energy policies, Europe’s electricity has become so expensive that trade unions have started warning of the threat of deindustrialization. 
• After soaring to 10 times their 2019 levels a year ago, Europe’s electricity prices have settled at triple their pre-pandemic levels. They are projected to remain at this level for some time. 
• When electricity prices rise, production costs soar along with inflation in virtually every sector, negatively affecting trade and investment across the economy. 
• Deepening Europe’s crisis, the Biden administration has announced a pause in liquefied natural gas export license approvals. 
• With global demand increasing, and Europe particularly desperate for more liquified naLNG since Russia’s invasion of Ukraine, a restriction in U.S. exports anywhere will raise LNG prices for all importers.  
• Making matters worse, Biden’s proposed electric vehicle mandates would significantly add to electricity demand, and his new power plant rules would force many coal and natural gas plants to shutter. If implemented, the new rules would wreck America’s electricity grid and make American electricity prices even more expensive than Europe’s. 
• U.S. policymakers should heed warnings from Europe, and embrace a policy of making American electricity once again the most reliable and affordable on Earth. 

Schedule an Interview: Mario Loyola 

64 Million Americans Risk Losing Work Under New Biden Administration Rule

• Whether working full time for themselves or part time as contractors, picking up occasional gig work, or having a side hustle, an estimated 64 million Americans performed some sort of independent work in 2023.
• But now, their ability to be their own boss is in jeopardy. A Department of Labor rule, scheduled to take effect March 11, would significantly restrict the right to work as an independent contractor instead of being treated as an employee.
• Why does this rule eliminate so many jobs? Because being an employee—including a prescribed schedule and reporting to a boss—isn’t possible for everyone. Freelancing in America reports that more than half of independent workers surveyed say they can’t work for a traditional employer because of their caregiving duties or their personal health conditions.
• Moreover, even independent workers who can work as employees are likely to be worse off because they overwhelmingly choose independent work over traditional employment. In fact, nearly half of independent workers say that no amount of money would cause them to go back to traditional employment.
• Congress should protect independent workers and provide much needed clarity on the issue by passing a law, such as the 21st Century Worker Act, which establishes a bright-line test, consistent across all federal laws, to determine who is an “employee” and who is an “independent contractor.”

Schedule an Interview: Rachel Greszler

The Defense Department’s China Military Power Report: The Threat Is Worse Than Advertised 

• The Defense Department’s latest annual “China Military Power Report” accurately identifies the scope of China’s global ambitions and many of the structural changes being implemented by Chinese leader Xi Jinping to make China the preeminent military power in Asia and the Pacific.  
• Even so, the report appears to undersell the threat posed by China and what will be required from the U.S. to counter it. 
• The report focuses correctly on the extent of China’s military buildup and modernization program: The Chinese navy continues to beef up what is already the world’s largest fleet and the Chinese air force continues to modernize and produce increasingly advanced, domestically built manned and unmanned aircraft.  
• Perhaps most worrying, the report documents that, over the last 12 months, China built 100 new nuclear weapons—making it the fastest growing nuclear power on the planet.  
• While these developments are all legitimate cause for concern, particularly for defense planners seeking to bolster America’s capabilities, the report errs by relying on China’s official defense budget topline of $230 billion. 
• As the paper acknowledges, China’s real defense budget is likely far higher: European think tanks have estimated that real Chinese defense spending is at least 30%-40% higher than the official budget. 
• During the Cold War, the Defense Department drew on its enormous quantitative and intelligence resources to accurately assess the Soviet defense budget. It should do so now, to better understand the actual Chinese defense budget and how it spends its financial resources in comparison with the United States. 

Schedule an Interview: Robert Peters and Wilson Beaver