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B-3 Tuesday, November 30, 2021 South Gibson Star-Times Thanks to the communist side of the Strait, awareness of the threats facing Taiwan is higher than at any time in the last 50 years. It's an op- portunity to educate the world about all the country has to offer, from pub- lic health and disaster relief to en- trepreneurship and democratic gov- ernance. One of Taiwan's greatest strengths—its semiconductor in- dustry—however, is also potential- ly a terrible political liability. Taipei and friends of Taiwan should be care- ful how they wield it. The idea that China could shut down large swaths of the glob- al economy with an attack on the center of 60 % of the world's micro- chip manufacturing, including 92 % of the world's most advanced chips, has captured the imagination of for- eign policy types. Here are just a few recent headlines: "The World Relies on One Chipmaker in Taiwan, Leav- ing Everyone Vulnerable" (The Wall Street Journal); "The World is Dan- gerously Dependent on Taiwan for Semiconductors" (Bloomberg); "Why threats to Taiwan are a night- mare for tech" (A xios). An industry-destroying Chinese invasion is not the only scenario be- ing spun. Some envision the PL A seizing control of fab shops and forc- ing them to continue manufacturing at gun point. To say this is highly un- likely is an understatement. These are sophisticated workplaces, not iron mines. Yet another, more plausible sce- nario is a longer-term pressurizing of the Taiwanese political environ- ment that eventually yields accom- modation of China. The way things are headed in cross-straits relations, though, this would necessitate a sea change in the politics of both coun- tries, as well as both of their rela- tionships with the U.S. For exam- ple, if China were to apply pressure by seizing one of Taiwan's outlying islands—say, Pratas or Kinmen or Taiping—it would certainly not make Taiwan more pliable. Not only would Taiwan's resolve stiffen, but so would the resolve of its ma- ny friends around the world. At the end of the day, the threat to the global supply of semiconduc- tors is only as great as the general threat of an invasion. And at that point, we've got big- ger problems than the price of electronics. Meantime, the nar- ratives around the threat to glob- al supply chains play into another very powerful current in U.S. poli- tics. Disruptions in the supply of per- sonal protective equipment during the COVID-19 pandemic sensitized Americans to the security of supply chains across the board. The cur- rent chip shortage has trained this concern most intensely on semicon- ductors. And where Americans see crisis, American politicians and companies see opportunity. Already, lawmak- ers have proposed legislation to of- fer subsidies to chipmakers, and in- dustry reps are fanning out on Cap- itol Hill to nail down support. One American tech CEO summed up the situation by repeating the advice of- fered by then-White House Chief of Staff Rahm Emmanuel at the height of the 2008 financial crisis: "Never let a good crisis go to waste." Only the most intrepid defender of economic freedom dares stand athwart this surge yelling "Stop." A similar push is underway in Ja- pan and Europe and, perhaps most consequentially, in South Korea. South Korea already leads the world in the memory chip side of this in- dustry. Its effort to catch Taiwan in the production of microprocessors is very credible—as well as curious- ly unburdened by the security con- cerns posed by the active threat out of Pyongyang. The downside for Taiwan in all of this is obvious. A global effort is co- alescing around the need to move semi- conductor produc- tion out of Taiwan. This cannot be good for Taiwan's economy in the long run. Not only does it constitute an assault on Taiwan's industrial crown jew- els, but the ultimate and inevitable crash in prices certain to follow so many countries pursuing self-sufficiency is going to hurt, too. Twenty years ago, Craig Addison coined the term "silicon shield" to describe the deterrent effect that Taiwan's role in the semiconductor industry has on China's dreams of unification. "China will have to think long and hard," he said, "before tak- ing any military action to disrupt or destroy Taiwan's economy." The cur- rent consensus around the threat to Taiwan has turned this assessment on its head. The concentration of mi- crochip production capacity in Tai- wan is coming to be seen more as provocation of China than deter- rent. More importantly, if defense of Taiwan becomes primarily a mat- ter of global supply chain security, then once it is no longer so central to the world's supply of semiconduc- tors, the world will have less stake in its fate. The defense of Taiwan is important to the world for many reasons. Chi- nese belligerence gives its support- ers a good opportunity to advertise them. Overemphasizing Taiwan's role in the global supply of electron- ics, however, could backfire in a ma- jor way. Those who care about Tai- wan's security should be very care- ful with how we talk about it. Walter Lohman is Director of The Heritage Foundation's Asian Studies Center. He oversees the think tank's oldest research center. Omarova shouldn't be overseeing our banks It is ironic when Democrats com- plain about sensational use of lan- guage. Thanks to progressives, practical- ly every white person in America has been labeled a racist. But now Democrats are screaming because Republican Sen. John Ken- nedy suggested that Saule Omarova, whom President Joe Biden has nomi- nated to head the Office of the Comp- troller of the Currency — the nation's top banking regulator — might be a communist. Kennedy opened his questioning of Omarova at her Senate Commit- tee on Banking, Housing and Urban A ffairs confirmation hearing ask- ing if he should call her "professor or comrade." Distinct from the labels and charges we regularly hear from pro- gressives, there is substance to the senator's suggestion about Omaro- va's proclivities. No, it's not that she was born in So- viet-controlled Kazakhstan, or that her degree is from Moscow State University, or even that her doctoral thesis is entitled "Karl Marx's Eco- nomic Analysis and the Theory of Revolution in the Capital." It is about how she views the world. This is someone who will oversee our nation's banking system that wants to "end banking as we know it" and transfer vast parts of it to gov- ernment control. Maybe we must read Omarova's doctoral dissertation to get a han- dle on the fine points of what we call communism. But if turning our financial ser- vices system over to government con- trol is not communism, suffice it to say it certainly is not what America is supposed to be about. She proposes that the Federal Re- serve, the least accountable entity in the federal government, take over a vast swath of private banking func- tions, with private banking accounts being replaced by accounts run by the Fed. If there is a microsecond where you might think this is a good idea, look at what's happening now to pric- es at the gas pump and at the super- market, where we see inflation at a 30 -year high. Consider where this is coming from. Yes, the Federal Reserve. Journals and newspapers burst with warnings from private economists over recent years that Federal Reserve monetary policy will lead to inflation, and Fed Chairman Jerome Powell has been poo-pooing these warnings. Now it's happening. And this is who professor/comrade Omarova thinks should be taking over the full scope of our financial lives. If you think turning over your fi- nancial security to the wise steward- ship of the Federal Reserve is a good idea, consider that the Federal Re- serve was created in 1913 with moti- vations not that different from those of Omarova. The whole idea then was that giving a government entity con- trol over our monetary system would bring stability. Under this great government sta- bilizing influence, we have been through the Great Depression of the 1930s, double-digit inflation and in- terest rates in the 1970s, and, most recently, a severe financial meltdown in 2008. Since the Fed's creation in 1913, per economist and blogger Mark Per- ry, the consumer price index has in- creased by "27.25 times which has caused the U.S. dollar to lose 96.3% of its value/purchasing power." The 1913 dollar is today worth 3.67 cents. There are notable other areas where Omarova wants much more government power, such as giving government planners vastly more power over climate control policy — to the extent of intentionally driving small oil and gas businesses to bank- ruptcy. Maybe why so many Democrats, including our president, take offense at Kennedy's communist labeling is because they take his accusations personally. The Wall Street Journal calls the Build Back Better multi-trillion dol- lar spending frenzy, just passed in the House, "the biggest expansion of Not long ago, President Joe Biden made an offhanded comment that "Milton Friedman isn't running the show anymore." This president has seldom spoken more valid words. And that's where the trouble has begun. If you were to rate the three most influential economic minds of all time, you'd be hard-pressed to come up with a better trio than Ad- am Smith, John Maynard Keynes and Friedman. I'm a little too young to have known Keynes or Smith, but I am old enough to have gotten to know Fried- man, and I'm proud to have called him a friend. I used to have dinner with Fried- man and his wife, Rose, a great econ- omist in her own right, and a few oth- er of his close confidantes once or twice a year up in San Francisco during the last years of his life. Few academics have done more to advance human freedom than Fried- man. He was the leading apostle for the free enterprise system. He had a profound impact on major policy de- cisions, including the case for paren- tal choice in education, expansion of free trade and even abolition of the military draft. He was forever suspicious of gov- ernment power — and for a good rea- son. His two masterpieces were "Free to Choose" and "Capitalism and Freedom." If you haven't read them, why not? Biden should. They were economic masterpieces written for the common man — and hence read by millions. I remember that when Friedman would travel to places such as China, Mexico and India, he often got a cold reception from the political leaders, but he was treated like a rock star by the masses. They loved him. It reminded me of the line from the old rock song, "People ev- erywhere just want to be free." So what does this remembrance of Uncle Milton, as he was sometimes called, have to do with the myri- ad problems that beset our current economy? Runaway spending and debt. A welfare state that is bank- rupting our country. The ever-wors- ening rise in consumer prices. I know with relative certainty what he would advise to get America back on track. I asked him near the end of his life what is the one thing he would recommend to grow the econ- omy faster. He replied, "Cut govern- ment spending." Then he empha- sized the point by adding: "As much as possible." Friedman was also famous for say- ing that inflation is too many dollars chasing too few goods. He warned that when nations devalued their currencies, this could lead a nation down the road to ruin. Now we have policies that are an exact reversal of what Friedman taught us. They are also a reversal of basic street smarts and common sense. So, raise your hand if you really be- lieve passing a new $ 3 trillion spend, tax and borrow bill will reduce inflation, even though the spending blitz un- der Biden has already tripled the inflation rate. Even more absurd is the idea that raising tax rates to the high- est in the world will increase output and the economy's health. On the contrary, this will make America less productive and reduce the pro- duction of goods and services, which will raise prices at the cash register. Just look at what has happened to the gas price due to Biden's anti-fossil fu- els policies. Bill McGurn of the editorial board of the Wall Street Journal recently wrote a must-read piece noting that "Milton Friedman may get the last laugh" due to Biden's reckless pol- icies. Friedman will be again vindi- cated. But a lot of us are not laughing at the damage to our country and our finances. We are crying. Stephen Moore is a senior fellow at FreedomWorks and a co-founder of The Committee to Unleash Prosperi- ty. His latest book with Arthur Laffer is "Trumponomics." race for the Cure By Star Parker Heritage viewpoint By Walter Lohman Taiwan's semiconductor dilemma Give me a break By John Stossel Eye on the Economy By Stephen Moore We need a little more Friedman right now Thank private property Happy Thanksgiving! But beware the "tragedy of the commons." It almost killed off the pilgrims. Now, via Washington, D.C., it's probably coming for us. Tragedy of the commons is a con- cept from an essay by ecologist Gar- rett Hardin. He wrote how cattle ranchers sharing a common parcel of land soon destroy that land. That's be- cause each rancher has an incentive to put cattle on the common. Soon, the extra animals eat all the grass. Shared grazing space is destroyed because no rancher has an incentive to conserve. If the ranchers put up a few fenc- es and divide the land, each rancher has an incentive to limit grazing. That saves the grass and the cattle. Sharing things and "public" prop- erty sound nice, but only private own- ership reliably inspires people to con- serve and protect. No one washes a rental car. I bring this up now because the Democrats' new multi-trillion dollar spending bills are all about expanding the commons: more free highways, free health care, free day care, free money for parents, housing subsidies, tax credits for electric vehicles, etc. All these handouts discourage re- sponsibility by making it easier to take from the "commons." Save for retirement? Why? The government will cover it. Save up for college? Why? Government will give you grants and loans and then forgive those loans. I bring this up now because this same sort of thinking nearly killed the pilgrims. When they came to America, the pilgrims decided to share everything. The governor of Plymouth Colony, William Bradford, wrote that the pil- grims thought "taking away of proper- ty and (making it communal) ... would make them happy and flourishing." Food and supplies were distribut- ed based on need. Pilgrims would not selfishly produce food for themselves. In other words, they, like Sen. Ber- nie Sanders and many American young people today, fell in love with the idea of socialism. The result was ugly. When the first harvest came, there wasn't near- ly enough food. Many pilgrims died that winter. If the Wampanoag Amer- ican Indians hadn't helped them, all might have starved. It was the tragedy of the commons. No individual pilgrim owned crops they grew, so no one had an incentive to work harder to produce extra to sell to others. Since even slackers got food from the communal supply, they had no incentive to work hard. Many didn't. Strong men thought it was an "in- justice" that they "had no more in di- vision of victuals and clothes than he that was weak and not able to do a quarter the other could." Women had to cook and clean for other women's husbands, and they "deemed it a kind of slavery." The shared farming, Bradford con- cluded, "was found to breed much confusion and discontent and retard much employment that would have been to their benefit." When the Pilgrims ran out of food, they "began to think how they might raise as much corn as they could, and obtain a better crop ... that they might not still thus languish in misery." Their solution was private proper- ty. They split up the collective farm and gave every family a plot of land. That was a big success. "It made all hands very industrious, so as much more corn was planted than other- wise would have been," wrote Brad- ford. "The women now went willingly into the field, and took their little ones with them to set corn." Before, they "would allege weakness and inability." Thanks to individual plots of land, food shortages turned into a surplus that became the feast we now call Thanksgiving. "All men have this corruption," Bradford observed. In a common, ev- eryone wants to take as much as they can. Private property created prosper- ity. This Thanksgiving, I'm thankful for private property. It's why I can eat turkey. John Stossel is author of "Give Me a Break: How I Exposed Hucksters, Cheats, and Scam Artists and Became the Scourge of the Liberal Media." See BANKS on page 5