Senator Toomey pushes SEC Chair Genzler what constitutes a “security”

Senator Pat Toomey asks SEC Chairperson Gary Genzler what determines whether a cryptocurrency is a security or not.

On the issue of stable coins, Toomey points out that stable coins like USDC, which is a coin that is privately pegged to the dollar fail point # 3 of the Howie test — the expectation of profit.

  1. An investment of money
  2. In a common enterprise
  3. With the expectation of profit
  4. To be derived from the efforts of others

He pushes Genzler to publically announce what the standards are but Genzler avoids answering.

This leads many to suspect that Genzler is trying to protect the banks rather than investors.

Breaking from GOP orthodoxy, Trump increasingly deciding winners and losers in the economy

President Trump is increasingly intervening in the economy, making decisions about corporate winners and losers in ways that Republicans for decades have insisted should be left to free markets — not the government.

.. On Friday, citing national security, Trump ordered the Energy Department to compel power-grid operators to buy from ailing coal and nuclear plants that otherwise would be forced to shut down because of competition from cheaper sources.

.. The order came one day after the president imposed historic metals tariffs on some of the country’s strongest allies and trading partners. Now the Commerce Department is further picking winners and losers as it weighs thousands of requests from companies for waivers from the import taxes.

“It replaces the invisible hand with the government hand,” said Mary Lovely, a Syracuse University economist. “You’re replacing the market with government fiat.”

.. The president has chastised individual companies, second-guessed the U.S. Postal Service’s business arrangement with Amazon and put pressure on Boeing and Lockheed Martin over the cost of their products.

.. Of course, Trump isn’t the only one to tinker with market forces. President Barack Obama backed subsidies for wind and solar power. And about 30 states have adopted laws mandating minimum purchases of renewable energy.

Obama also won passage of a health-care reform package that created winners and losers. Republicans criticized the Affordable Care Act at the time for forcing people to make purchases through the individual mandate.

.. Sen. Patrick J. Toomey (R-Pa.) said that he and Sen. Mike Lee (R-Utah) would co-sponsor legislation “to rein in the executive branch’s power to impose unilateral tax increases like these.”

.. “One of the reasons tariffs are not good policy in general is that it is a form of corporate welfare,” said Stephen Moore, an economist at the Heritage Foundation. “You’re saying consumers will have to pay more so this auto company or steel company or aluminum company stays in business. It’s the ultimate form of picking winners and losers.”

Trump Alienates Allies Needed for a Trade Fight With China

China’s predatory trade behavior is threatening sectors much more vital than steel and aluminum

“Beijing has doubled down on its state capitalist model even as it has gotten richer,” Kurt Campbell and Ely Ratner, who both served in foreign-policy roles under former President Barack Obama, write in the current issue of Foreign Affairs. “Cooperative and voluntary mechanisms to pry open China’s economy have by and large failed.”

.. But Mr. Trump has consistently rejected collective action in favor of going it alone. His officials downgraded multilateral efforts to reduce steel overcapacity. In January 2017, Mr. Obama’s administration launched a case at the WTO against China for subsidizing aluminum, but Mr. Trump has failed to follow up.

.. since 2003 China has four times promised to address overcapacity in steel production, as its actual capacity quadrupled to roughly half the world total.

.. Yet China exports little steel to the U.S. because of existing duties and accounts for just 11% of its aluminum imports, far behind Canada. The Commerce Department argued for a global remedy because Chinese production depresses global prices and drives foreign producers out of third markets, and they then ship to the U.S.

This means the pain of Mr. Trump’s tariffs will fall not on China but on actors that play by the rules, including Canada, Japan and the European Union. When the EU threatened to retaliate, Mr. Trump said he would escalate by raising duties on European cars.

Chinese misbehavior has thus brought the U.S. to the brink of trade war with its own economic and strategic allies, echoing how Russian meddling has served to fuel internal strife in Europe and the U.S.

.. Chinese forced technology transfer, commercial espionage and intellectual-property theft, all aimed at creating Chinese champions in key industries by 2025.

These pose a far greater threat to U.S. technological leadership and the enormous value it adds to U.S. exports than do growing imports of steel and aluminum which, while vital to some communities, are commodities.

.. The U.S. is preparing a sweeping penalty against China, but it would be more effective if done jointly; otherwise, Beijing may simply persuade others to hand over their technology in exchange for Chinese sales or capital.

.. Most of all, though, it requires Mr. Trump to understand where leverage comes from.

“Chinese misbehavior with respect to intellectual property and economic espionage is a real problem that requires a response,” Patrick Toomey, a Republican senator from Pennsylvania, said in an interview. “We are much more likely to get our allies to work with us if we aren’t punishing them for selling us steel that our consumers want to buy.”