Trump Selected A Radical Choice For Healh and Human Services

Over the last five decades including both Republican and Democratic administrations, the goal has been to make healthcare more accessible to families with low incomes.  It has also implemented systems to improve the quality of healthcare delivery.  The New England Journal Of Medicine does not typically publish politically motivated articles.  The changes in healthcare policy advocated by Trump's new Secretary of Health and Human Services are so radical that the journal published a critique of the changes advocated by Tom Price.  A summary is provided below:

In sum, Price’s replacement proposal would make it much more difficult for low-income Americans to afford health insurance. It would divert federal tax dollars to people who can already buy individual coverage without subsidies and substantially reduce protections for those with preexisting conditions. The end result would be a shaky market dominated by health plans that offer limited coverage and high cost sharing.

Tom Price is also an orthopedic surgeon.  His plan does more than make affordable healthcare less obtainable, it also enables physicians to charge higher fees for Medicare services; it also allows them to bargain collectively with insurance providers for fees.  Furthermore, it puts an end to programs designed to improve the quality and value of healthcare services.

Tom Price shares a quality that has been common among Trump's selections for cabinet positions.  He failed to disclose important information during his senate hearing.  He did not reveal the use of a private email server that he used for much of his communication on important issues.  Democratic discovered the secret server too late to use the information during his hearing.

Why Sessions' Recusal Is Not The End of The Story

Trump's attorney general lied, or at least misled his fellow senators, during his confirmation hearing.  Consequently,  since he is now a target in the investigations on Russian interference into the election he can't also be part of the investigation.  Some critics have called for his resignation because the nation's top law enforcement officer is not supposed to lie or mislead under oath.  The Washington Post argues that Sessions is only a player in a broader story.  We know that Russia used a variety of tactics to help Trump win the election.  We still don't know why two of Trump's cabinet appointees, and perhaps other Trump associates, were in contact with Russian's during the campaign, and why they attempted to cover up their contacts.  There has been a lot of smoke suggesting a closer link between Trump's campaign and Russian officials.  Where there is so much smoke there is likely to be a fire.  Trump and his enablers in Congress will do what they can to block government efforts to   uncover the fire.  Jeff Sessions will not be able to use his authority in the Justice Department to prevent a deeper investigation.  Each stop in this investigation makes it more likely that we will learn more about the relationship between the Trump campaign and his friends in Russia.

The New Cold War And The Use Of Cyber Warfare

This article in The Atlantic ought to be required reading for those who want to understand how the Cold War has changed in the last decade.  It also provides much more detail about the current problem that is being investigated about Russia's successful effort to intervene in the presidential election./

Russiagate Won't Go Away For Trump

Donald Trump acted more like a president in his address to Congress.  However, things just got worse for him and Jeff Sessions.  His Attorney General lied about whether he had met with anyone from Russia during the political campaign.  He was asked, under oath, whether he had met with Russian officials and he said NO.  It turns out that he had met with the Russian ambassador twice.  Sessions claims that he does not recall the content of his meeting and that he was on the Senate Defense committee during that period. Therefore, it was proper for him to meet with the Russian ambassador in that capacity.  That may be true, but that does not explain why he made a false claim about Russian contacts during his confirmation hearing.  Many members of Congress are calling for Sessions to recuse himself from the investigation of Russian cyberattacks during the presidential campaign.  Some are even calling for his resignation.  Lying under oath is a criminal offense in the US.  It is certainly not very seemly behavior for America's top law enforcement officer.

How Fast Can The US Economy Grow?

This article provides a good primer on the factors that determine GDP growth.  One important measure is potential GDP.  Its a lot easier to grow an economy when there is a large gap between potential GDP and the current level of GDP.  The US fell well below its potential during the financial crisis and it has moved much closer to the current measure of its potential this year.  The implication is that either our measure of potential GDP is wrong or that it will be hard to grow the economy much faster than it is growing today.

Donald Trump argues that his policies will double our current growth rate.  That assumes that we have a large number of potential workers who could be made available to do the work needed to grow the economy faster.  The current unemployment rate is close to where it is when we have full employment.  There may be some workers who are not looking for work and are not counted in the unemployment rate calculation.  Its unlikely, however, that there are a large number of potential workers who could fill the kinds of jobs that may become more available.

Its also possible that the output that we get from each worker could be increased.  If US productivity were to increase substantially from its current rate we might be able to increase the GDP growth rate without increasing the size of the effective labor force.  However, the productivity growth rate has been stuck at its current rate for a long time.

We do have some slack in manufacturing capacity.  If demand for products increased we have some room for expansion.  We also have some slack in office space capacity.  However, we have not been adding office space fast enough to absorb substantial demand for offices space.

We have not touched upon the demand side of the equation.  If consumers, government and businesses increased spending that would put pressure on businesses to increase the output of goods and services.  The Trump administration argues that it can double the GDP rate by cutting taxes and regulations which are assumed to be constraining business expansion.  Government spending on infrastructure and the military can also increase the growth rate.  At present, there are no specific plans, approved by Congress, to pass the legislation that would be required to make substantial changes in tax policy or federal spending on infrastructure.  Moreover, our recent experience with tax cuts and deregulation have not lived up the expectations promised by previous administrations.  Democrats would support Republicans on the right kind of infrastructure spending but they are far apart on how that would be done.  Conservatives in the House are also wary of any increases in government spending and tax cuts which would expand the economy without producing budget deficits and adding to the national debt.

The bottom line is that we may be in for an extended period of slow growth and we are far away from any concrete proposals that might increase potential GDP.

Wow, Bill O'Reilly Admits Mistake

Bill O'Reilly has been criticized for billing a critic of Sweden's immigration policies who led Donald Trump to claim that Sweden experienced a terror attack.  I have to give O'Reilly credit for doing something that Trump never does.  He admitted that he falsely billed the critic as an important security adviser in Sweden.  However, he did not admit that part of his job is to find guests who support his political ideology and Donald Trump. 

Germany's Bernie Sanders Has Captured The Populist Movement

There are many Democrats who who believed that Bernie Sanders could have won the populist vote that catapulted Donald Trump to the White House.  Germany's Bernie Sanders is running close to Merkel in the polls.  He may not win but he has ruined the chances of Germany's right wing populist movement to threaten Merkel.