Global Trend

In response to the COVID19 pandemic, the World Economic Forum has floated an agenda referred to as the “Great Reset”. And importantly, Joe Biden and John Kerry are clearly on board with most of it. How do these proponents of “the Great Reset” define it? What is the rationale behind it? And how are events likely to evolve? We’ll provide the answers you need.

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The Great Reset is an “umbrella concept” coined by the leadership of the World Economic Forum (or WEF). According to the WEF website, “There is an urgent need for global stakeholders to cooperate in simultaneously managing the direct consequences of the COVID-19 crisis.  - To improve the state of the world, the World Economic Forum is starting The Great Reset Initiative.” In essence, the Great Reset represents the WEF’s opportunistic response to 2020’s crisis-driven chaos which we’ve been analyzing since February.

Under “The Context” header, WEF describes the alleged “necessity” of its grand plan as follows, “The Covid-19 crisis, and the political, economic and social disruptions it has caused, is fundamentally changing the traditional context for decision-making. The inconsistencies, inadequacies, and contradictions of multiple systems - from health and financial to energy and education - are more exposed than ever amidst a global context of concern for lives, livelihoods, and the planet. Leaders find themselves at a historic crossroads, managing short-term pressures against medium-and long-term uncertainties.”

Putting aside the platitudes, the statement begs several questions, including:

- Is the coronavirus actually “changing the traditional context for decision-making?” And,

- Why does the WEF believe that COVID-19 rendered our brains incapable of making decisions the way humans have for thousands of years?

Even more questionable is the assertion about “multiple systems” being “more exposed than ever amidst a global context of concern for lives, livelihoods and the planet.”

Consider the facts.

First, the world has been exposed to many events far more dangerous and disruptive than the coronavirus just since the United States became a country; these include other pandemics, a Civil War, two world wars, massive famines, and the great depression.

Second, the empirical evidence clearly shows that humanity persevered through these horrible disruptions largely because multiple competing systems were constantly testing a variety of solutions, not in spite of that competition. In fact, as Chris Talgo of the Heartland Institute observes, “most of our recent wars, which have killed hundreds of millions, were fought to save our “multiple systems” from one monolithic system such as fascism or communism.

And that realization brings us to the question that lies at the heart of our discussion: “What does the Great Rest seek to do? Under the header labeled “The Opportunity,” the architects of the Great Reset state the following: “As we enter a unique window of opportunity to shape the recovery, this initiative will offer insights to help inform all those determining the future state of global relations, the direction of national economies, the priorities of societies, the nature of business models and the management of the global commons. Drawing from the vision and vast expertise of the leaders engaged across the Forum’s communities, the Great Reset Initiative has a set of dimensions to build a new social contract that honors the dignity of every human being.”

Clearly, this set of platitudes is written in order to be as opaque and reassuring as possible to the general public. It tells us almost nothing about the objectives, mechanisms, or policies involved. In fact, the public face of the Great Reset remains nothing more than a mishmash of global calls for social justice. However, that does not mean it should be taken lightly. In fact, given the powerful organizations and prominent people who are supporting it so strongly, the Great Reset could influence policy decisions more and sooner than most analysts think.

This is especially true if Joe Biden is in the White House. Based on his past comments, Biden seems to be “chomping at the bit” to jump onboard the Great Reset bandwagon. Once he does, he’ll be joining the Prince of Wales and UN Secretary-General António Guterres among others.

At a November virtual event hosted by the WEF designed to promote the “Great Reset,” John Kerry - who Biden recently named as his “climate czar” - provided insight into what a Biden administration has planned for the American people. During a panel discussion about the Great Reset led by WEF President Borge Brende, Brende asked Kerry whether those calling for a “great reset” of global capitalism and dramatic changes to society and national economies are “expecting too much too soon from the new president, or is he going to deliver on this topic on the first day?”

After a few brief introductory statements and greetings, Kerry responded, “And yes, it [meaning the Great Reset] will happen. And I think it will happen with greater speed and with greater intensity than a lot of people might imagine.”

How does the incoming Biden administration plan to usher in this promised Great Reset, and what would it mean for Americans? Biden’s platform included several major Great Reset policy reforms covering three important public policy areas: the economy, energy and climate change.

Let’s start with the economy. Although Biden’s economic plans include numerous proposed changes - including tax increases for individuals earning more than $400,000, enhancing “buy American” rules for government agencies, and expanding the power of public-sector unions - the core parts of Biden’s platform are large tax increases on businesses and increasing regulations so that government has greater control over economic activity.

Biden’s tax plan would raise corporate tax rates by 33%, from 21% to 28%, as well as create a new 15% minimum tax on corporations that earn $100 million or more. Biden has also proposed doubling the tax rate on income earned overseas by U.S. corporations, to 21%, and creating a Social Security payroll tax for those earning more than $400,000.

Together, these so-called “reforms” would impose one of the largest tax increases on corporations in American history, encouraging businesses to flee the country in droves, thus driving down economic growth.

According to the non-partisan Tax Foundation, Biden’s plan would

- reduce capital stock by 3.75%, damaging retirement accounts;

- slow total economic growth, reducing the long-term GDP by 1.62%;

- lower wages by 1.15%, hurting tens of millions of working families; and

- reduce the number of projected jobs by 542,000.

Biden has also signaled that he will significantly increase regulations on corporations, warning businesses in July that he plans to “put an end to the era of shareholder capitalism.”

Although Biden spends most of his time talking about taxes and regulations aimed at large corporations, some of his proposals would cause significant damage to small businesses too. For instance, perhaps Biden’s most important regulatory change would be to increase the national minimum wage to $15 per hour.

Although a national minimum wage increase would undoubtedly benefit some workers, the $15 wage mandate would cause a lot more harm than good.

The Congressional Budget Office (or CBO) noted in a 2019 analysis that a $15 minimum wage would eliminate 1.3 million jobs nationwide, although CBO analysts also stated the number of lost jobs could be millions higher.

The CBO further estimated the total gains made by families from the wage increases would be outweighed by economic losses. According to CBO, “the $15 option would reduce total real (inflation-adjusted) family income in 2025 by $9 billion, or 0.1 percent.”

Now let’s consider the implications for energy and climate change. Some of Biden’s most radical proposals are those that align with the Great Reset’s goal of stopping the alleged “climate crisis” by transforming the world’s energy industries and infrastructure systems.

For example, Biden has repeatedly promised to push the United States back into the Paris Climate Agreement, which would require the United States by 2030 to reduce its carbon-dioxide emissions by nearly 30 percent below 2005 levels. This move alone would force the entire country to depend significantly more on much less reliable, much more expensive wind and solar energy.

Nick Loris at The Heritage Foundation estimates that meeting the Paris targets would cost the average American family of four $30,000 in higher energy costs and cost the economy 400,000 jobs, about half of which would be in manufacturing. Loris also projects it would cause an aggregate U.S. GDP loss of over $2.5 trillion.

But that’s just the beginning.

Biden’s radical climate plan would spend at least $2 trillion in his first term trying to put the country on the path toward having the entire U.S. electric grid be 100 percent carbon-dioxide-neutral by 2035, an extremely expensive plan that could potentially leave millions of Americans in the dark.

In the pursuit of less-stringent goals, California suffered rolling blackouts in August because the solar panels they depend on to power the state do not work when the sun goes down. Adding insult to injury, Californians already pay some of the highest costs for the privilege of having unreliable energy.

If the average American were to pay the same price for electricity as the residents of California do now, total national electricity costs would increase by $295 billion annually.

Even more stunning, according to estimates by Isaac Orr at the Center of the American Experiment, if 80% of electricity were to come from wind and solar, a projection more closely aligned with Biden’s plan, total electricity costs would increase by more than $1.8 trillion per year.

Biden has also called for a global trade war with any nation that refuses to adopt similar energy policies, including China.

Biden’s climate plan says, “As the U.S. takes steps to make domestic polluters bear the full cost of their carbon pollution, the Biden Administration will impose carbon adjustment fees or quotas on carbon-intensive goods from countries that are failing to meet their climate and environmental obligations.”

When coupled with Biden’s proposed corporate tax increases and the rising energy costs associated with his renewable energy requirements, Biden’s proposed trade war would crush countless businesses across the United States, especially energy-intensive industries like manufacturing. Hundreds of thousands of additional jobs, if not millions, would almost certainly be lost over the next two decades.

So, what’s the bottom line? In June, just as the World Economic Forum was launching its Great Reset initiative, the head of WEF, Klaus Schwab, wrote an article about the reset in which he said “the world must act jointly and swiftly to revamp all aspects of our societies and economies, from education to social contracts and working conditions. Every country, from the United States to China, must participate, and every industry, from oil and gas to tech, must be transformed. In short, we need a ‘Great Reset’ of capitalism.”

Based on Biden’s far-left platform and the comments made by the incoming climate czar, John Kerry, it seems pretty clear the Biden administration is committed to doing their part to bring about the Great Reset. Those who support free markets and personal liberty must be equally committed to stopping it.

Given this trend, we offer the following forecasts for your consideration.

First, in hindsight, we will all recognize that the Great Reset amounted to nothing more than an opportunistic repackaging of core elements of the Green New Deal.

As we heard during the Great Financial Crisis of 2008, activists “never let a crisis go to waste.” There is nothing new or innovative here. It’s the same globalist, socialist environmentalism that has produced such extraordinary results for the people of California over the past decade.

Second, despite having a Biden/Harris administration, only fragments of the Great Reset will be implemented by January 2025. Both Obama and Trump had control of Congress and Trump had a friendly Supreme Court.

Unless Democrats win both Senate run-offs in Georgia on January 5, 2021, a Biden/Harris administration is likely to have an uncooperative Senate, a tiny majority in the House, and a hostile Supreme Court. As such, it will have difficulty reversing Trump’s executive orders, a total inability to overturn regulations in court, and no ability to enact new enabling legislation. Better yet, history tells us this analysis will be even truer after the 2022 mid-term elections. And,

Third, despite successful resistance by those advocating for the MAGA agenda in the United States, the Great Reset will have short-term impacts on perceptions and policies here and abroad.

The battle over real borders, fair trade, personal responsibility, low taxes, minimal regulation, public safety, and freedom of expression will intensify. As in 2009 to 2010, the left will have the upper hand administratively, but it will be on the defensive, electorally. That means the battle for a new “social contract will intensify, but little progress will be made.

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