1) Investment In Venture Capital Got Crushed In 2022
Venture capital markets are essential for turning small start-up companies into large, profitable firms. They are the seed corn for future economic growth, innovation, and a prosperous U.S. economy.
So it’s bad news that, according to Pregin, an asset market data firm, in 2022 venture capital financing suffered its worst drought in at least a quarter century.
Bloomberg reports that this year’s sharp declines in VC funding “surpassed the nadirs of the early 2000s when the DotCom bubble burst and the 34% collapse after the 2008 financial crisis.”
Why is it happening? VCs are the latest victim of Bidenflation of 7% and the related sharp rise in interest rates- which make bonds a relatively more attractive investment and require higher returns on at-risk capital. The tech sector's financial implosion was also a big factor in the funding retreat. A related problem: higher inflation raises the real tax rate on capital gains, which sucks more of company returns into the coffers of the IRS and less into the bank accounts of investors.
2) America’s Worst Performing School System – Detroit – Removes Dr. Ben Carson’s Name From Science High School
Only one in six middle school students in the Detroit Public School System tested at or above the proficient level for reading. That’s a heartbreakingly tragic number, but instead of fixing the schools, the Detroit school bureaucrats decided last month that a higher priority was to remove former HUD Secretary Ben Carson’s name from a high school science center named after him. Ben Carson, of course, is black. And he is also one of the top brain surgeons in the world. His sin was working for Donald Trump to try to fix the dysfunction of cities like Detroit.
We thank our friend David Sokol for calling attention to this insulting and absurd decision.
Dr. Carson is famous for his pioneering work with conjoined twins and pediatric neurosurgery.
Former school board member LaMar Lemmons justified the decision of having Dr. Carson’s name on the school on the grounds that it is "synonymous with having Trump’s name on our school in blackface."
Really? This is the same man who launched the “Opportunity Zone” initiative, in nearly 9,000 districts across the country reducing taxes and regulations, which raised $75 billion in capital for underserved communities in the first two years alone. It is estimated to have lifted hundreds of thousands of mostly minorities out of poverty.
Whatever one might think of Carson’s politics, it seems to us that this great man and mind (who grew up in poverty himself) should be proudly held up as a role model to minorities across the country.
After promising it would happen "in the near future" back on September 16, the Biden administration today officially ended its forced child-masking order on 3- and 4-year-olds in federal Head Start programs. This is something no country in Europe ever imposed, had no health benefit, and likely imposed developmental harms on many children.
Senator John Thune led the effort to end the toddler mask mandate, including a successful bipartisan 55-41. We thank him for his leadership.
4) Yes, Lower Tax Rates Mean Stronger Growth And More Tax Revenue
Our co-founder Arthur Laffer’s new book Taxes Have Consequences is out and we will be holding events in Washington, DC (Jan 31), New York (Feb 1), and Palm Beach (Feb 15) to celebrate this important book’s arrival. If you would like to attend one of these events, please contact us.
Here’s the concise one-paragraph executive summary of the book:
“When the top tax rate has been high, as in the late 1910s, the 1930s, 1940s, 1950s, and 1970s, the response of those with money and capital has been to curtail real economic activity in favor of protecting assets and income streams. Huge declines have come to the economy in these circumstances. The most brutal example was the Great Depression itself. When the top tax rate has been cut and held at reduced levels—as in the 1920s, the 1960s, in the long boom of the 1980s and 1990s, and briefly in the late 2010s—astonishing reversals have occurred. The rich have brought their money out of hiding and put it to work in the economy. The huge swings in the American economy since 1913 have had an inverse relationship to income tax rates.”
Here is the evidence of rising revenues from the Reagan and Trump tax cuts. The green line is the tax share paid by the top 1% and the orange line is the top federal income tax rate.
The Electric Power Research Institute’s report titled 'Net-Zero 2050: U.S. Economy-Wide Deep Decarbonization Scenario Analysis'" issued in September 2022:
"Today the United States derives 84% of its primary energy from fossil fuels. In the net-zero scenarios, between 9% and 53% remains fossil-based by 2050….”
No amount of wind turbines, solar panels, hydropower, nuclear power, battery power, electrification of fossil-fuel technologies or energy-efficiency technologies will get us to net zero by 2050.”
