Friday, April 29, 2016

The Background to Clinton vs. Trump

I have been pondering what I could say about Donald Trump's speech on foreign policy.  On the surface to anyone who hasn't thought about foreign policy as something that needs a coherent core, many things he said sounded reasonable.  But then again, his whole instinct is insulting and demeaning people.  Foreign policy is the art of getting people, whom you have little to no power over, to do things that you want them to; with whatever persuasive arguments you have to show what you want is in their best interest.

And as an individual from the Hoover Institution (a conservative think tank) pointed out, Trump was promising to make nice with Putin while arguing and insulting our friends in NATO and our southern neighbor, Mexico.  And lest you think the Wall is going to be a productive infrastructure project, I will point out that the criminal elements already favor digging tunnels under what is already there and using submarines to get the really high priced contraband around whatever impediments we try to put into place.

My mental logjam was broken by reading today's insightful columns covering old ground.  Both David Brooks and Paul Krugman discuss the fact that a substantial set of white voters are angry at what they perceive as the government not working for them.  On the Democratic side that comes out in the form of populism and support for things that stick it to the wealthy and help the poor/young.  On the Republican side, that comes out in a dislike for anything to do with the GOP establishment that promised Supply Side Economics would benefit everyone and wants to dismantle the safety net that helps people when they reach retirement age.

Paul Krugman analyzes why Clinton could successfully manage this anger.  His theory is that Democratic leaders have sufficiently delivered on their promises and the base is sufficiently satisfied with their leadership to support them.  GOP leaders, instead have focuses on anger and shutting down the government and not offering solutions to issues that their supporters, like the Democratic's supporters, are having to deal with in their everyday lives.  When globalization has been causing your community problems for 30 years, you perceive a problem with political process.  And that is why they are supporting Trump, even though he is also a supporter of tax cuts for the rich.  What Trump doesn't support is paying for those tax cuts by cutting services to the people. I don't know how he will balance the budget?  Perhaps he plans to get China to give the U.S.A. foreign aid to pay for it all.

David Brooks acknowledges that he doesn't have an answer to problems that he probably doesn't completely understand because he lives in the high income bubble.  But he recognizes that the anger driving this election needs to be understood and policies developed to address it.  I am sure that Brooks as a card carrying Republican wants balanced policies that do not disrupt things that are working broadly for the benefit of society.  I would have to agree with that.  In his mind, there are places in the U.S. where balanced policies have worked to address the problems and they need to be studied so ideas on how to spread them broadly across the landscape can be discussed.

I would start with health insurance.  Paul Ryan wants to help fix the main problem with Obamacare which is that the cost of health insurance for all is being driven up by insuring those with pre-existing conditions.  If the 5% or 10% of the population with pre-exisitng conditions had access to high risk pools subsidized by someone unidentified (why not put them into Medicare?), then the other 90% to 95% could enjoy the cost of health insurance for the relatively healthy.  Of course, he still needs to address the working poor who cannot afford health insurance without assistance even if the cost does come down.

It seems to be there are many points that can generate they type of anger we see in this election cycle.  That is David Brooks desire to identify them and see what can be done to address them.  It is his belief that if people can have hope restored to their psychology they will be more rational and less radical voters.

I have long recognized that rural areas have been suffering economically for a long time. What is interesting in this long primary cycle, is that is where Bernie Sanders and Trump/Cruz run up their largest voting percentages.  The U.S. rural areas are fired up with anger with no good solutions for their most fervent desires.


Link to Brook's column

Link to Kurgman column


Tuesday, April 26, 2016

I Didn't Realize How "Wrong" I Was on Globalization

Long time readers know I have recognized that U.S. Factory workers have suffered economically from globalization.  What I didn't realize until a New York Times article this morning was how much it was influencing the outcomes for this primary election season.

I have been focused on Trump's birtherism against President Obama and all his other crude remarks towards various peoples.  But it is really his anti-trade agreement stance that is fueling many of his supporters who are angry at the GOP establishment for not doing anything to protect their jobs.

This mistrust of trade agreements is also fueling some support for Bernie Sanders, including one Verizon workers (currently on strike) who says if Bernie isn't a candidate in November, he will probably vote for Trump.  Now I can make a case that free trade has no effect on that Verizon workers employment prospects.  His industry is a purely domestic one that is being buffeted by changes in technology, and he benefits from the lower cost of goods that globalization brings.

And overall, trade and globalization provide the revenues and profit margins that allow many companies to pay their workers very well.  But the benefits of trade are spread across the whole population in a diffuse manner while the costs are concentrated in the lives of workers who lose their jobs.

Where I have been really really wrong is in my belief that people who have been sucking up their disappointment with what has happened to their livelihood without disrupting the overall trend would continue to do so, and allow time to equalize wages, at which point jobs will migrate back to the U.S. when it makes competitive sense for that to occur.  And it is happening in some ways already.

But what Trump and Sanders have tapped into is that exact disappointment and there may be a sufficient numbers of votes for that concentrated issue that Congress will feel compelled to do something that I believe would be very dangerous to the overall health of the global economy.

And what is most interesting to me is that when the North lost these jobs to the South, the focus was on the roll of Unions in the North and the weakness of Unions in the South with costs being lower in the South.  Now these Southern workers have lost their jobs and they are angry about it.  And those workers in the North who are left are angry about it.

My tendency based upon my education in economics is to let the market and time force adjustment on capital and labor so that we have an efficient market economy.  But individual people don't have the luxury of time as too much time just ends up with them being dead.  And now they are rising up!

Will the people based in the global economy be able to protect the global economy?  We shall see over the next 7 months.  And it is no wonder the conservative blogosphere is so silent on this, this problem is not a point on the partisan spectrum so it is out of their framework.  It is a bipartisan problem in need of a bipartisan solution.

I think the solution is some movement minimum wage increases (with different urban and rural levels) and infrastructure spending.  With unemployment at 5%, you wouldn't need to export the 11 mm immigrants, you would need them to fill jobs.  One benefit of that would be the Fed could raise interest rates and savers could return to the bond market with their investment capital.

Link to NYT article that motivated this blog

Monday, April 25, 2016

Conservative Blogosphere Illustrates Why Trumpies Have Abandoned the GOP Establishment

I have been waiting for my friend RedStateVT to enlighten me on how conservatives are going to respond to the desires of the Trump supporters for health insurance that works for them, protecting Social Security and Medicare and doing something besides cutting taxes to support economic growth.

Instead, all he can do is write about how liberals want more income redistribution. I don't deny that Bernie Sanders, his Senator, whom I know he has never voted for (nor did I) is running his campaign to do that, but Hilary's moderate supporters understand there are limits to income redistribution and just want a government that funds itself to meet its promised obligations while creating and maintaining a well regulated playing field.

That in essence is what the Trumpies want too and what Donald Trump is promising them, although in his case, he would also destroy international trade to get his way.

But in any case, I would have thought the conservative blogosphere would be looking for conservative solutions that address people's problems.  Like affordable health insurance.  Health insurance was a mess before Obamacare, which was designed by the Heritage Foundation (a GOP think tank) as a way to expand the number of insured while keeping the private sector involved.  But instead, the conservative blogosphere is just criticizing Bernie supporters for wanting a free college education and more income redistribution.  Where is the critical introspection for dealing with the fact that Ted Cruz and all the other establishment conservatives have been rejected by a majority of the voting GOP.

Conservatives have been so busy criticizing everything Obama, they forgot they needed to have ideas that the voting population can believe in.  And now that they are losing, they are blaming the voters for wanting a government that works and seeing liberal instincts in that.  Every GOP President since Eisenhower, except maybe Bush II, believed in making government work for the people who vote them into office.

The conservative blogosphere does not acknowledge that as a lesson of this primary season.


Friday, April 22, 2016

Character Flaws vs Personality Flaws

Donald Trump's political machine is making a case to the RNC that his issues are personality flaws that can be fixed while Hillary's problems are character flaws that cannot be fixed.  I will come back to my view of Hillary's problems, but I fail to see the distinction that Trump's people are making.

What is the desire to uproot the lives of 11 million people?  What is the desire to carpet bomb innocent people just so you can kill some terrorists?  What is the desire to torture people to get them to lie to you?  What is the desire to use shell companies to protect your wealth from your risky decisions that don't work out?  What is the desire to tear up our constitution and discriminate based upon religion?  What is the desire to denigrate people who don't agree with you?  While some of those may be based upon personality they are representative of character also.  Personality and character cannot be separated.  So Trump's flaws are not fixable in the words of his own political machine.

Hillary's problems are two fold: (i) she has been on the national political scene for 24 years already and the only person in modern times who can claim such longevity is Richard Nixon and people were certainly tired of him; and (ii) like all administrative politicians, Hillary has made some decisions that were not the best, so her decision making is open to criticism.  That is why I supported Martin O'Malley initially.

But I can also make the case that for a woman to be nominated and win the Presidency she needs a surplus of experience to convince people that she can be voted for.  and Hillary has a surplus of experience.


Wednesday, April 20, 2016

Post NY Primary Musings

I don't think there is a perfect way to construct a primary electorate.  Both Frank Bruni and Bernie Sanders think independent voters should be allowed to pick a party on election day and vote in a primary.  A radical thought within me in response to that is why not allow everyone to vote in both primaries?  If done honestly and with thought, it might help move the parties toward the middle and govern with compromises to the other side with the goal of clean efficient government.  But with our current state of partisanship it could also lead to mischief voting which might well not be useful.

I have never had a problem with the parties saying only registered voters can vote in a primary.  That made sense to me.  If people want to vote in a primary, they register as members of the party by a deadline.  They have to anticipate that and comply with the deadline.  And the deadline has to be early enough for voter lists to be transmitted to each polling location.

Meanwhile Ted Cruz said Sarah Palin like comments after losing in NY.  I would never say they had similar IQ's, so it must be something in the bitterness that passes for conservatism today.

"You may have been knocked down, but America has always been best when she is lying down with her back on the mat, and the crowd has given the final count ... It is time as us for a nation to shake it off and be who we were destined to be.”

NY is the 3rd largest populated state in the U.S.  If you have been rejected by a state's voters, you would think you would contemplate what motivated those people to vote for the other guy rather than dismiss the whole state for rejecting you and vowing to continue on your path to force the state to comply with your view.  But that is why NY rejected Ted Cruz.  I am not sure why the NY GOP rejected John Kasich, although he did win somewhere in NYC and maybe Albany.

Meanwhile, Donald Trump is flying in a plane he owns which had its registration expire in January.  Thus, he is flying a plane that is illegal to fly.  Similar behavior to an undocumented worker crossing the border to work in the U.S. because he wants and needs to be somewhere to achieve what he wants to achieve. You would think Trump would be more sympathetic to such behavior since he exhibits such behavior.

And last but not certainly not the least.  Newsmax.com, an extremely right wing website that I click on occasionally through Yahoo, is flat out for Trump now, saying if a contested convention steals it from Trump, it will show the evils of the party elders, who in their mind are the Bush neoconservative wing of the party who in their words, led us into the disaster of Iraq and all its fallout.  Unfortunately, their prescription (Trump's positions) of securing the borders, tossing all the undocumented over the wall and tearing up trade treaties will only generate a massive recession with higher inflation.

Friday, April 15, 2016

The Problems With All the Candidates for President

I watched the Democratic Debate last night.  Funny, how an election that you can participate in focuses the mind on watching these intense people work to convince us that we should vote for them. I would not want to have a beer with any of them, I don't think any of them drink.  How could you pop a few back and then go out and campaign?  Raise money?  Think about critical issues?

Anyway, I came away with an understanding of every candidates weakness as a candidate.

Hillary can be attacked from the left and the right because (i) she has a long track record of centrist policies and (ii) decisions which might have been better than the alternative, but are still open to attack because things did not work out well.  And she has been on the national scene for 24 years and many people are tired of her.  The national attention span does not tolerate anyone being acceptable for 24 years, except for possibly a rock star or a movie star, but they get to disappear when not touring or promoting a film, unlike politics which is 24/7.

Bernie does not do details.  He is a big picture guy with some knowledge of things he is interested in. But he does not understand the complexity of the economy and his economic policies cannot be implemented because even centrist Democrats would not support some of his proposals, let alone the GOP.  And how is he going to pay for public college education for all?  He is going to have the states pay 1/3 of it.  I have no idea how states which are cutting spending for k-12 education because they prefer to cut taxes or at least contain taxes (even NY is doing that) are going to find the funds to pay for all this free college.  This stuff fires up the young voters, but it is not practical.  And I cannot believe how pro-palestinian Bernie was in the debate.  I may think Israel has to go down a different path which includes a two state solution because a one state solution is not a peaceful solution, but I disagree strongly with Bernie that only Israel did bad things in Gaza.  Hamas started the whole thing and is a terrorist supporting government.  And that is the beauty of a two state solution, even terrorist governments have to govern well if they want a happy population and they can be held accountable for their terrorist actions which deny's the population happiness, and, hopefully, they hold their government responsible changing that government's behavior.  That is my pipe dream.  But Bernie would be a failed President because he does not do details.

John Kasich does not have a coherent plan for health insurance, but he might if he were running as a Democrat.  Unfortunately for him, he is what passes for a centrist Republican now, which is a RINO to some and he is part of the establishment GOP which has lied to so many of the GOP rank and file that everyone, whether they did that or not, is subject to the anger that the GOP rank and file feel.

What is amazing is Ted Cruz has promulgated many of those positions that lead to the lying that has disillusioned the rank and file, and even formulated some of his own original positions (shutting down the government as a strategy when you cannot get what you want the normal way) that feed that disillusioning.  And some 65% of the population does not like him.  He did 2 days in NY and then fled to California where I doubt he is spending much time in L.A. or S.F.  And I doubt we will see him in NY again.  If he won the Presidency, would he even come to speak at the U.N.?  Does anyone else find his voice grating?  Ted Cruz is very scary.

There are many problems with Donald Trump and it all rolls up into 70% of the population not liking him.  Donald Trump is HUGELY SCAREY.

And I cannot remember, whether it is Trump or Cruz, but one of them is feuding with the Drudge Report.  Maybe the conservative spin Dr's are consuming themselves.  That would be a positive.

Well that runs through all the candidates, and I will be voting for Hillary Tuesday because she is qualified and 4 years of Hillary will absolutely have the Talk Radio Right and Pundit Class fuming at the GOP's ineptitude.

Wednesday, April 13, 2016

Nothing is Ever as Simple as a Politician Desires

There are so many examples of this in today's news, I'm not sure where to start, so I shall see where we go.

Donald Trump Claims the Convention Delegate appointment process is rigged against him.  Sorry Donald, you use shell companies and the legal code to isolate your properties from each other so that lenders can only look to each property for repayment.  You were able to figure that out, why can't you figure out how to get your people appointed as convention delegates?  You have only yourself to blame because you didn't bother to figure out the process and if you can't do that, how are you going to manage the country well?  I don't think you have the intelligence or sufficient ability to grasp the complexity that managing the country requires.  And you are an unworthy human being who uses their name to take advantage of other people to enrich yourself.  That may be marketing genius, but when you don't pay your debts, you are unworthy of admiration.

But Trump is only gathering the anger that a substantial percentage of white America reflects.  Steven Rattner follows up one of my earlier posts that Congressional opposition to all things Obama created this anger at the GOP establishment.  Helping people who lose their job to globalization and technology is complicated and not every possible path will be a good expenditure of public funds.  But President Obama proposed various things and the GOP Congress shot them down.  Now they are paying the price in the form of Donald Trump.

Link to Rattner Column

 Meanwhile, drought in Africa, war like conditions in Pakistan, Afghanistan, Iraq, Syria, Yemen, the NE corner of Nigeria have created a complex source of migration by people who want to live somewhere safe.  One example of that is described by Thomas Friedman who was in Niger.

"Says the U.N.’s Barbut, “Desertification acts as the trigger, and climate change acts as an amplifier of the political challenges we are witnessing today: economic migrants, interethnic conflicts and extremism.” She shows me three maps of Africa with an oblong outline around a bunch of dots clustered in the middle of the continent. Map No. 1: the most vulnerable regions of desertification in Africa in 2008. Map No. 2: conflicts and food riots in Africa 2007-2008. Map No. 3: terrorist attacks in Africa in 2012."  

Bombing them to smithereens is not going to solve desertification, conflicts and food riots which cause the desperation that leads to migration and radicalization.  Solving this problem is very complex.

Link to Friedman column


And I cannot let John Kasich off the hook today.  While he is the most reasonable GOP candidate left, I saw an interview of him yesterday.  When asked about Health Insurance, he said of course we need to repeal Obamacare, but he added, we will protect people with pre-existing conditions.  

How do you make such insurance affordable if the healthy people are not required to buy health insurance?  

How do you make the health insurance companies profitable if people with pre-existing conditions can just buy health insurance when they need to?  

And how do you keep the hospitals and clinics financially viable if the uninsured, who cannot afford health insurance, are showing up there when they are sick?  

And what about the economic costs of people not maintaining their health because they don't have heath insurance.  

Health care is complex and his simple answer was loaded with followup questions which were not asked.

I almost forgot Bernie.  He is running ad's here in NY saying he will break up the banks, make college free and end income inequality by ending the rigging of the system.  Yet, when asked for details on how he would accomplish any of that. he says that has to be worked out in the future.  Well, none of that is simple, any paths have complex side effects and little of it is politically practical.  That is not the basis for running the government effectively and I will not vote for him this time, just as I never voted for him when I lived in Vermont.  I don't disagree with his policy goals, but I believe in effective and well managed government.