Sound Economic Policy at Full Employment

I am tired of ranting, although if Congress decides to go back to an assault on Health Insurance, I will be writing Congresspeople about my views of that.

Today, I thought I would state something that I learned in Economic 45 years ago.  When an economy is at full employment you do not need deficit spending, you need a budget surplus to pay down the debt you ran up during the period of higher unemployment.  Yet, the U.S. still has a $500 billion or so budget deficit.  I would say most of that is probably defense spending for the War on Terror, that has never been given a dime of current funding by the Congress.  Yet, that is only 2.5% of GDP which is about what the gross (real growth plus inflation) growth rate has been.

It would be better with unemployment below 5% and baby boomers retiring by the millions every year if we were currently in a budget surplus paying down our debt which is roughly 100% of GDP.

But what does this GOP Congress want to do?  Cut taxes, but not spending.  They are dressing up tax cuts as tax reform, but there is no reform if you don't change the structure of tax expenditures (tax breaks for special interests), and there is no sign that the GOP wants net tax changes to = changes in spending.  The GOP Congress wants to increase the deficit by $1.5 trillion over the next 10 years.

How irresponsible can they be?  Apparently, very irresponsible.

The one thing I thought I could count on the GOP for was responsible stewardship of the economy.  Instead, we have gotten laws being written to favor wealthy campaign contributors and little else.

Meanwhile, a tax cut that benefits the wealthy in California, Texas, Illinois, New York, New Jersey, Connecticut and Massachusetts is not going to create jobs in Appalachia or the rural midwest.

Meanwhile, David Brooks has identified something I have felt but did not have adequate words to message.  He does.  Trump's success in the election was not Russian influence but rather his creation of an American myth. Make America Great Again.  The Democrats had no answer for that and still do not.  That is there challenge heading into 2018 and 2020.

Link to Brook's column on the importance of Myths

The Trump Thing That Drives Us Bonkers

RSL came into the living room last Friday and stated that the thing that Trump does that drives her nuts more than anything else is his trivial bullying.  I had to agree with her.  If it was just Conservative policies being implemented, I might be upset but it wouldn't effect my inner being the way it does.  After all, I went through 8 years of Bush II and never hated him the way I do Trump.   Bush II policies, which I didn't agree with in certain key ways, did not cause me to rant and vent anger in a manner like this in an effort to restore my inner calm.

Michael Gerson's column today identifies the Trump behavior that generates this difference and postulates that it is destroying the GOP.  It is the Trump preference for bullying and postulating falsehoods that ignore facts and truths.  He says it better than I ever could, but it will take time to see if it is really destroying the GOP.  This is the GOP that supports Mitch McConnell's and Ted Cruz's lies and deceit about the effect GOP policies will have on real people.

Anyway, here it the link.

Link to Gerson column

!@#$%^&*()

WE CANNOT RID OURSELVES OF THIS !@#$%^&*() ADMINISTRATION SOON ENOUGH.  I HAVE NO IDEA HOW MUCH DAMAGE THEY WILL DO TO THE GLOBAL ECONOMY.

FREE TRADE DOES NOT CAUSE INFERITILITY.  FREE TRADE DOES NOT CAUSE SPOUSAL ABUSE.  FREE TRADE DOES NOT CAUSE ABORTIONS.  IN FACT, ABORTIONS ARE LOWER TODAY THAN THEY HAVE BEEN FOR YEARS AND THAT HAS NOTHING TO DO WITH FREE TRADE.  IT HAS TO DO WITH ECONOMIC OPPORTUNITY AND EDUCATION.

Real news reveals the idiots in the White House

Sunday Musings 10/15/17 or Democrats Have One Huge Hurdle

There is a long article in the NY Times today that I plowed through because I thought I should.  It discussed something I am very familiar with from my business career.  It even focused on a factory that was owned by a company I worked for when I worked for that company.  And within that article is the essence of the challenge the Democrats face.

The Democrats need an economic message that is compelling to rural workers in order to get the rural workers who do not care deeply about social issues to vote for Democrats.  And they do not have one for a simple reason.  Bill Clinton moved the Democrats to the center on economics and I supported him 100% in doing that.  But in the process the Democrats signed onto the following covenant that is central to economic policy (again what I believe is proper economic policy):  the capitalist central thought that Return on Capital is the most efficient measure by which drive an economy forward.

Now that works for you if you are employed in a way that puts your activity in an advantageous position vis a vis your competition for employment.  But within that covenant is also the assumption that labor will migrate to find employment and that labor can be retrained if their activity is not well positioned in the global competition for work.  But that involves turmoil and angst for the people whose work migrates to a lower cost pool of labor.  That turmoil and angst creates anger within the people effected.  Donald Trump captured that anger with words and is in all likelihood going to disappoint those people with his failure to make a difference for them.

But that does not mean those people will vote for Democrats unless there is a Democratic policy that they can believe in.  The conundrum for the Democrats is many of their voters believe, as do I, that capitalism is central to Democracy and we all benefit from letting our economy be driven by return on capital.  So any policy the Democrats come up has to have sufficient believability to get Trump economic voters to vote Democratic, but not upset the Democrats who believe in capitalism.

There is not much to like about Trumpism, but he did identify a real issue that neither the Democrats nor Republicans have addressed since the JFK/LBJ administration developed the Great Society.

As a free trader, I am generally supportive of lowering and leaving low all tariff barriers.  Our society benefits from free trade in myriad ways.  But if there were a way within the international trade treaty construct to tax all imports in favor of exports, I think the U.S. should pursue such a policy.  Now figuring out what that would look like takes real expertise in the specifics of trade treaties and what levels of tax/tax reduction would do to inflation/employment/factory location.

No government can direct companies to locate a factory in any specific place.  All government can do is generate a policy that will guide events in a general direction.  But those policies are what people who need employment must believe in when they decide who they will vote for.  That does not translate to sound bites and has to be conveyed in sound bites but be implemented in a sound way and have an effect by the next election (hopefully).

That is a tall order, but that is also the challenge for the Democrats if they want to be competitive in the rural vote.  Obama didn't have a message for those people after 2008 and that is why Trump won those voters despite his many faults.  Hillary Clinton was just offering the voters more of what Obama did and it didn't work for those people.  Democrats need a snappy sound bite that represents a real change in policy that will make a difference for rural employment.

Link to Link-Belt Employment Article

Thank Goodness the Yankees and Cubs Won

There will be at least 6 more days when baseball can distract me from the chaos in Washington.

And thank goodness I am golfing today, so I will not focus on today's chaos, although that will not stop me from ranting about it here.

So Trump wants to renegotiate a treaty that a bunch of Countries signed with Iran and all agree Iran is complying with.  Since it took years to get all those countries to agree to the global sanctions that took years for Iran to feel the pain and years to negotiate the treaty, why does Trump think he can get a better deal in a matter of months?  He has had 8 months to find a peace treaty between the Palestinians and the Israeli's and how is that going?  Last time I read anything, Israel was ready to build another zillion settlements on the West Bank.  Nice way to try and not anger some desperate people who just might become terrorists.

And Trump wants so badly to have his name on a Healthcare bill he is using executive orders to change it around the edges.  Thank goodness I go on Medicare in 9 months.  And thank goodness I live in NY.  The one thing about all this is that Trump doesn't seem to understand health insurance is regulated by the states and the Affordable Care Act.  He can get Congress to change the Affordable Care Act, but the states will still determine what will happen within there own state. And if NY, continues with the law it had in place before the Affordable Health Care Act, insurance companies will not be able to exclude those with pre-existing conditions and all of Trump's efforts to harm people with pre-existing conditions will wash over NY with no effect other than the fact that the end of Federal subsidies for lower middle income people will cause them to lose their health insurance because they can't afford it without the subsidy.  Of course, a lot of them voted for Trump, so maybe they don't care about Health Insurance; although what I really think is that they believed Trump would be a man of his word and give them the best health insurance ever.  Fools!!!

Well, if Trump stops the subsidies, ObamaCare will become TrumpCare because Trump is in charge now and the buck stops at his desk.  No name is permanent when it comes to HealthCare.  After all, the Heritage Foundation (Republicans) developed the concepts of ObamaCare.  George Romney (Republican) implemented those Concepts in Massachusetts.  and now it is called ObamaCare, but once Trump makes his changes, it will be TrumpCare, no doubt.

So much chaos, I ran out of anger before I got to my main point.  You may have seen Trump tossing 8 rolls of paper towels at a Puerto Rico FEMA event when Trump visited.  He thinks that solved the problem so now he can bring FEMA home.  Meanwhile, there is little water and electricity in Puerto Rico.  Puerto Rico is now in the state of a 3rd World poverty ridden country and those people are American Citizens living on land governed by the USA.  Trump is either the President of the whole country or he is not and should be impeached.  Trump is a disgusting greedy narcissistic individual and the fact that he has such an impact on so many people is a stunning testimony to our failure as a nation.  If I lived in another country, I would not respect us.  Because as a Nation, we are who we elect as a President.  It may not be me, but it is we!

Off to Queens and a falafel sandwich.  I hope I play better than yesterday.

The News is Exhausting and Depressing

I suppose it all stems from two bases in global history:  (i) Greed and a hunger for power is the paramount driver for people who shape history and (ii) religion can be co-opted to support those who want to shape history in their vision.

The west has been fighting global jihad for over 20 years now.  I see us as being no closer to defeating it now than we were then.  We are perhaps safer because of vigilance, but no amount of vigilance can protect 100% of the people 100% of the time.  And the root cause of that jihad is based in faulty societies of the areas outlined in a great book about the rotten leadership wherever Islam abuts Christianity and Judaism.  It didn't have a solution and I see no solution until leaders in Africa, the Middle East and Middle Asia figure out a way to lead fair societies that treat everyone fairly.  It is a lack of fairness that creates people willing to be terrorists, although we have yet to see why the man in Las Vegas thought he was being treated unfairly.

So the NRA doesn't want bump stocks, but they still want everyone to own a semi-automatic gun.  And now I have seen people actually justifying the 2nd Amendment as a Constitutional Right to have fun with guns, not hunt or defend the country.   Well, I have fun driving 100 miles per hour in rural areas on interstate highways, but I will get a ticket if I do that.  Should I seek a Constitutional Amendment allowing that?

Meanwhile, the GOP Congress has to deal with their failure of leadership and lies to the base that the things they said would happen cannot happen because they were based upon lies.  And the reaction of the base is to elect even crazier people into office.

I saw an article today that the Christian Right will not give up on Trump because they truly believe that their religious beliefs give them a Constitutional right not have to sell products or treat people fairly if they are gay or transgender.  And they see Trump and his people, Sessions/Gorsuch as protecting those rights.  I cannot for the life of me understand how anybody who wants to be treated fairly for their beliefs would see that right as allowing them to treat others unfairly by not dealing with them in business transactions.  And it is that fundamental thought that drives these religious people to support Trump irrespective of all his other Un-Presidental actions.

Meanwhile, the GOP doesn't see income inequality and a fiscal deficit as an issue for them.  Rather they prefer to pursue policies that increase income inequality and the fiscal deficit.

It's enough to make me want to get highly intoxicated each night but I have decided alcohol is the reason I cannot lose weight, so I am cutting back on my imbibing.

The GOP is corrupted by its alliance with the NRA

The NRA is really a corrupt racket now.  All they really shill for is the gun industry.

The following two columns nail the NRA to their true being and the GOP for their failure to protect people from Domestic Terrorism.

Link to Freidman column on GOP disconnect between Islamic and Domestic Terrorism


Call to activism by Roseanne Cash

I think Johnny Cash would agree with his daughter.  Guns that can be modified to be automatic weapons do not protect anyone and do harm to many people.

Tuesday Musings on what would have been my father's 95th Birthday

My father was typical of the challenges Politicians face when figuring out how to carve out a winning coalition of voters.

His instincts were New Deal, but he was prone to believing the powerful manipulated the system to their advantage.  While I do not believe he would have voted for Donald Trump if he were alive, I don't know.  His thought process definitely deteriorated as he aged and he did see the usefulness of owning guns (Through his window, he shot woodchucks messing with his garden while sitting in his wheelchair) and in his younger days enjoyed a walk through the woods looking to harvest a deer.  I have no doubt that my younger father would have seen in the idiocy in allowing people to own automatic and semi-automatic weapons of mass destruction.

And exactly why isn't what happened in Las Vegas terrorism?  Is it because the perpetrator was a white guy who was not a Muslim.  Since when did terrorism become only a Muslim thing.  Anybody who commits random acts of death causing violence is a terrorist!!!

David Brooks really highlights the problems politicians face.

"The Trump story is that good honest Americans are being screwed by aliens. Regular Americans are being oppressed by a snobbish elite that rigs the game in its favor. White Americans are being invaded by immigrants who take their wealth and divide their culture. Normal Americans are threatened by an Islamic radicalism that murders their children."

"This is a tribal story. The tribe needs a strong warrior in a hostile world. We need to build walls to keep out illegals, erect barriers to hold off foreign threats, wage endless war on the globalist elites".

"Somebody is going to have to arise to point out that this is a deeply wrong and un-American story. The whole point of America is that we are not a tribe. We are a universal nation, founded on universal principles, attracting talented people from across the globe, active across the world on behalf of all people who seek democracy and dignity."

"The core American idea is not the fortress, it’s the frontier. First, we thrived by exploring a physical frontier during the migration west, and now we explore technological, scientific, social and human frontiers. The core American attitude has been looking hopefully to the future, not looking resentfully toward some receding greatness."

But that is a complicated message in today's sound bite world.  But is one that Democrat's need to co-opt to bury the GOP in the mess of lies they are caught in.   Link to another Krugman column calling out GOP Lies

"The Republican Party is supposed to be the party that stokes dynamism by giving everybody the chance to venture out into the frontier of their own choosing — with education reform that encourages lifelong learning, with entitlement reform that spends less on the affluent elderly and more on the enterprising young families, with regulatory reform that breaks monopolies and rules that hamper start-ups, with tax reform that creates a fair playing field, with immigration reform that welcomes the skilled and the hungry."

"It may be dormant, but this striving American dream is still lurking in every heart. It’s waiting for somebody who has the guts to say no to tribe, yes to universal nation, no to fences, yes to the frontier, no to closed, and yes to the open future, no to the fear-driven homogeneity of the old continent and yes to the diverse hopefulness of the new one."

Link to today's Brooks Column