Wednesday, May 31, 2017

What History Tells Us About Trump's 3% Growth Rate Forecast

Larry Summers, along with most reputable economists, has been highly critical of the 3% growth forecasts made by the Trump administration.  He argues that it is inconsistent with US history.  His analysis of US history shows why the Trump forecast is highly improbable but it also provides a good lesson about the factors that drive economic growth.

Summers argues that GDP growth per adult is a critical factor.  We get more GDP growth when the number of adults producing output rises; we also get more growth when the output per person increases (productivity).  He then looks at GDP growth history in terms of those factors.

Between 1961 and 2000 GDP growth was driven by two factors.  The adult population grew at 7.4% and the percent of women in the workforce grew from 33% in 1960 to 62% in 2000.  The population growth rate will by only be 0.2% between 2021 and 2027.  Moreover, the percent of women in the workforce has been constant at 62% since 2000.  There will be no boost to the GDP growth rate over the Trump forecast period from population growth or the entry of women into the workforce.

The Trump forecast is for 2.8% growth per adult between 2021 and 2027.  We have seldom had a seven year period with that kind of growth per adult.  That is because the business cycle always includes downturns or recessions over a seven year period.  Even if the underlying growth rate was 3% we can't assume a business cycle with no downturns or recessions.

We had three periods of 2.8% growth per adult since 1961.  They were all driven by a tailwind from the business cycle.  That is, we moved from a period of high unemployment to a period of lower unemployment.  Reductions in the unemployment rate led to a faster growth rate. The Trump forecast is for a 2.8% growth rate from a period of low unemployment.  It will not be driven by a business cycle tailwind like our other periods of 2.8% growth rates over seven years.

Summers concludes that the Trump growth forecast ignores what we have learned from US history.  He then asks why Trump's team of investment bankers made such an aggressive growth forecast?  They would not have invested in business with that kind of forecast when they worked on Wall Street.  The answer is pretty simple.  It was necessary to support Trump's boast that he would "Make America Great Again".  Moreover, it would not be possible for Trump to cut taxes without producing large budget deficits unless they produced unprecedented economic growth.  Ronald Reagan made huge tax cuts that did increase the growth rate but they were boosted by a business cycle tailwind as we recovered from recession.  The growth rate was also boosted by the Fed which cut interest rates substantially.  Interest rates can't be reduced much more today.  We expect that the Fed will begin to raise interest rates.  Trump's economic team has given Trump what he needed, but it do so at the cost of its credibility.  We are not surprised when Trump makes false claims; it is disappointing that his economic team cannot be trusted to make honest forecasts.

Tuesday, May 30, 2017

Why Trump Is A Bullshitter And Not A Liar

This article instructs us on the difference between a liar and a bullshitter.  A liar knows the difference between a lie and the truth.  That is why a liar attempts to prevent disconfirming facts from becoming public.  A bullshitter does not care about the truth.  The truth is anything that is useful at the moment.  If things change the bullshitter will seem to contradict himself.  There is no contradiction because nothing is true; it changes with circumstances.  Ignorant people tend to be bullshitters.  They don't know the subject matter so they resort to a random stream of nonsense.  They don't expect others to see it as ignorance and incoherence.  Bullshit is also used as a loyalty test by Trump.  He makes a bullshit statement and then he observes whether members of his staff repeat the bullshit.  His communication staff have to deal with this all of the time.  Sean Spicer passed his test of loyalty when he repeated Trump's bullshit about the size of his inauguration crowd, his electoral college landslide, and why he lost the popular vote.  He proved his loyalty but he lost his credibility with the media.  Trump then blamed his communication people for not convincing the press to believe the bullshit.  The bottom line is that Trump has created a world in which bullshit dominates much of our discussion and some media outlets produce bullshit on a regular basis.

Is Trump King Lear, Richard lll, Or 1984?

This article is for Shakespeare fans.  It argues that we have avoided 1984 and settled into the tragedy of King Lear.  One of the commentators explained why Richard lll was a more apt comparison.  In any case Trump is a recognizable character who was understood by great writers. Our tragedy is that our electoral system failed to do its job.  Too many did not recognize this king for who he is.  It is our tragedy.

Monday, May 29, 2017

Trump Claims That He Hit A Home Run On His Trip: It Was Not For The Home Team

Donald Trump is his own favorite cheerleader.  He announced that he hit a proverbial "home run" on his trip.  It doesn't get any better than that in baseball.  But he did not hit a home run for the home team.  The relationship between the US and Europe has been the key component of US foreign policy since the end of WWll.  He weakened that relationship during his trip.  He scolded our partners in Europe about not paying their fair share for NATO.  His real audience for that message is his political base in the US.  They don't like anything foreign.  He was also critical of our trade policy with Europe.  In particular, it was directed at Germany for selling lots of cars to US consumers.  He suggested that the US and Germany would have to work out a new trade plan.  That only showed his ignorance.  Trade policy between the US and Germany is dictated by our trade policy with Europe.  Angela Merkel spent two days in the presence of The Donald and she told an audience in Germany that its partnership with the US had been tarnished.  She got a standing ovation for one minute after that comment.  The audience knew who she was talking about.  Trump is considered a clown in much of Europe.

So what team did Trump's home run count for?  It was great for his relationship with his "America First" base and it could not have been better for Putin.  Anything that weakens NATO and the US relationship with Europe is consistent with his foreign policy objectives.  Our clown prince will not change his spots.  The damage that he has done, and will continue to do, will damage the US along with the rest of the world.

Sunday, May 28, 2017

Why Don't We Give Americans What They Want?

What Americans want differs by income level.  Noah Smith tells what Americans want by income level and he tells us how to give them what they want.  The only problem is that our political system makes it difficult for us to do simple things.  Perhaps we should concentrate and doing what people want and push our politicians it directions that many of them will not take.  That leads to the next problem.  We need to push the right kind of people into running for office.  We also need a political party to put these things into their platform.

How Public Education In Oklahoma Has Suffered From State Budget Policies

Politicians in Oklahoma have forced many school districts to move to four day weeks.  Changes in the state budget started in 2008.  Since that time spending per student has declined by 14% and there has been no increase in teacher salaries since 2008.  Oklahoma spends $8,000 per student.  Only Arizona, Utah and Idaho spend less.  To make matters worse federal spending on public education has been reduced in Trump's budget proposal.  This is how he, and state legislatures, intend to make America great again.  The jobs of the future will demand higher levels of cognitive skill.  Children from Oklahoma, and other red states which have adopted similar policies, will have a severe disadvantage in the labor market.  Ignorance is also bad for a democratic society.  Perhaps that is what right wing politicians want.  They don't get their campaign funding from low income citizens and they manage to convince them to vote for policies which are against their self interest.

Saturday, May 27, 2017

Why Scientists Disagree About Global Warming???

The Heartland Institute published a book (pamphlet) called "Why Scientists Disagree About Global Warming".  They are sending this pamphlet to all of the science teachers in the US.  They have also sent it to elected officials and other groups.  One of the teachers who received the pamphlet from Heartland decided to have her students do a little bit of research on Heartland and the NIPPC which provided the content.  Unknowingly,  Heartland provided a great opportunity for students to learn about how to research propaganda.  I have summarized some of the their findings below.  I would encourage other science teachers to have their students do a similar study.  It is very easy to do for most students who know how to use google and their computers.  Heartland has provided teachers with a great opportunity to participate in the debunking of propaganda on global warming.

The Heartland Institute is a non-profit "think tank" it is designated by the IRS as a 501(c)3 entity.  Donors to Heartland are not required to be identified and donations are tax deductible.  Heartland describes itself as a promoter of freedom.  It promotes free market solutions to social and economic problems.  Its goal is to limit government in order to promote personal liberty.  Exxon has provided several million dollars to Heartland over a number of years.  It is not surprising that Heartland has taken the position that government intervention into the energy industry, in order to mitigate global warming,  violates the freedom of energy producers and consumers of energy.  It sponsored an organization called the Non-government International Panel on Climate Change (NIPCC) to produce the pamphlet which argues that there is no scientific consensus about human contribution global warming.

The NIPCC consists of a around 23 authors from 15 nations.  They are not all scientists.  It opposes the Intergovernmental Panel on Climate Change (IPCC).  The IPCC consists of several hundred scientists from around the world who produce research that is published in peer reviewed scientific journals.  IPCC research has led to the conclusion that global warming is real, and that the emission of carbon dioxide and other greenhouse gases is responsible for global warming.  NIPCC claims that there is no consensus among scientists about human contributions to climate change.  It produced the pamphlet funded by Heartland to attack the consensus of climate scientists.

The forward to the NIPPC pamphlet was written by Marita Noon.  She started her career as a Christian motivational speaker under the name of Marita Littnauer.  She is now the director for Energy Makes America Great Again and a companion organization called Citizens Alliance for Responsible Energy (CARE).  CARE receives its funding from the New Mexico Oil and Gas Industry.  It claims that it promotes freedom and the American way of life by educating the public and policy makers regarding energy.  Noon has been a columnist for Breitbart and other far right organizations.

Marita Noon's forward in the pamphlet starts out with an attack on President Obama for placing a priority on mitigating global warming.  She argues that this was done instead of dealing the threats from ISIS which is engaged in global acts of terror.  That sets the tone for a forward produced by a motivational speaker and not a scientist.  She goes on to argue, among other things, that the alarmist view of global warming is at the core of renewable energy subsidies that transfer wealth from the general public to a "small politically connected cabal of climate profiteers.  That sets the stage for her to thank the producers of the pamphlet which proves that there is no scientific consensus on climate change.

The pamphlet published by the Heartland institute was written by three authors who have been critical of human contributions to climate change for many years.  Craig Idso has a PhD in geography and like his father Sherwood Idso he has argued that carbon dioxide provides more good than it does harm.  He has received an $11,000 per month stipend from Heartland.  He is an Adjunct Scholar at the Cato Institute, which like Heartland, is a think tank that promotes limited government, free markets and personal liberty.

S. Fred Singer is a 93 year old physicist from Austria who has been a critic of global warming for many years.  He has received $5,000 monthly stipend from Heartland for his contributions.  Robert Carter, who recently passed away, is the third author of the NIPPC pamphlet.  He is a marine geologist  from Australia.  He served on the Institute for Public Affairs in Australia.  All of its directors serve on the boards of fossil fuel businesses.  He once claimed that coral reefs are in no danger from global warming.  It is common knowledge today that coral reefs are in serious danger from climate change.  Some the damage may be irreversible.

The name given to the organization that produced the pamphlet is similar to that of IPPC in only one respect.  It calls itself the Non-Governmental IPPC.  The implication is that IPPC is a government organization and that NIPPC is free from government imposed requirements on its operation.  That is absurd to begin with.  The hundreds of scientists that participate in IPPC research and its conclusions do not work for government.  On the other hand,  the Heartland Institute receives much of its funding from Exxon and other organizations that are affected financially by government sponsored efforts to reduce greenhouse gas emissions.  Heartland, and a number of other right wing think tanks such as Cato, The American Enterprise Institute, Heritage, etc. etc. claim to be defenders of freedom.  Their defense of freedom is also a defense of fossil fuel industry financial performance.  Heartland's critique of the IPCC is that it is motivated by the incentive to promote government funding for research on climate change.  No evidence is provided to support the conclusion that hundreds of dedicated scientists are willing to fudge their data in order to maintain government funding.  There are lots of reasons why firms in the energy industry fund organizations like Heartland and other think tanks that are devoted to promoting the freedom of businesses and less interference from government in the market system.

The producers of the pamphlet are correct when they argue it is very difficult to reach consensus in science.  There will always be debates about research findings.  Its also true that new studies will provide better answers to important questions.  The IPPC process for reaching conclusions among hundreds of scientists is not easy.  It has taken many years of research and debate to get agreement about the conclusions that have been reached.  The NIPPC starts out with the premise that climate change is a function of natural phenomena and that human contribution is not important.  They have not proved that point in their pamphlet. Instead they have tried to discredit the efforts of hundreds of scientists that came to a conclusion that Heartland and its funding organizations dislike.

Friday, May 26, 2017

Can Conservatism and Republicanism Be Saved?

Michael Gerson has been a loyal conservative and Republican for many years.  He served as a speech writer for George W. Bush.  He is appalled by what he calls a disease of conservatism.  The prominent use of conspiracy theories in conservative media, as well as by Donald Trump.  He is concerned that the disease will destroy the ideology that has loved and supported during his career.

Jennifer Rubin has similar concerns.  She has been a loyal Republican for her entire career as journalist.  She did not support Donald Trump in the GOP primaries but she hoped that she could support President Trump.  She no longer holds on to that hope.  This may the obituary for the Republican Party that she once loved.  It has been transformed into a monster that she no longer recognizes.

These are personal losses for two respected conservative Republicans.  It is also a loss for America and the rest of the world. 

Why Did Trump Win West Virginia By 40%?

Paul Krugman and I are a lot alike.  We both analyzed Trump's budget; his tax policy; his healthcare plan and we concluded that Trump's  populism was a scam.  He has taken traditional Republican policies further to the right.  They will be good the kind of people who he put on his cabinet, and who play golf at one of the clubs that he owns.  They will be terrible for the majority of people in West Virginia who voted for him.  We both believe that they voted against their economic interest.  The question is whether  they would vote for him again if they read this article.  The answer is probably yes.   The comments that follow Krugman's article provide many of the reasons why they would vote for Trump again.  Taken together they define the appeals that have worked for demagogues throughout history.  Trump used most of them to perfection.  He was also assisted by an extensive communication network that has been developed to inform exactly the kind of people that voted for Trump.  We no longer live in a world in which the folks in West Virginia get their information from one of the three major news networks.  Few of them read the New York Times either.  Moreover, people tend to vote against candidates, and for candidates for very personal reasons.  Clinton campaigned against Trump's qualifications for the presidency.  Trump portrayed himself as powerful change agent "who told it like it is".  He could be considered one the guys that you might meet in a bar.  The folks in West Virginia never see anyone like Clinton in a bar.  Trump also took advantage of the extensive efforts that have turned liberal into a bad word over the last few decades.  It was easy to run against Clinton's liberalism.  She ran as  a classic liberal.  That did not work in most of the red states or in some of the economically distressed blue states. 

Thursday, May 25, 2017

Watch How Fox News Educates Trump Supporters About Trump And Russia

This video shows how Fox News, which argues that it is the "fair and balanced" news network,   serves up fair and balanced news to its audience.  Fox has successfully marketed its news to the segment that tends to vote for Republicans in general and to Trump in particular.  Its easy to see why 40% of viewers who voted for Trump get their news from Fox.  This is what they regard as fair and balanced news.

For example, they support many of the arguments that Trump has made.  The media are providers of fake news which is unfair to Trump. There is no reason for the media to inform the public about any connections between the Trump campaign and Russia.  They make no effort to explain why the House and Senate are investigating possible connections between the Trump campaign and Russia, or why the Justice Department empowered a Special Counsel to conduct an investigation.  Its all because the "liberal news media" are after Trump for no good reason.  They have also invented a number of other specious arguments to defend Trump. They have taken the usual step of shifting attention away from Trump by raising questions about the real criminals that should be investigated.  Of course, the usual subjects are the Clinton's and Obama who should be investigated instead of Trump.  That would be real fair and balanced news.

The good news for American, and the bad news for Trump and Fox News, is that Trump's support has floundered dramatically. Republicans in Congress will go down with the ship if they stick to Trump.

Why Republicans Can Not Produce A Better Healthcare Plan

The Republican House failed to pass its first effort to replace Obamacare because it was not supported by a handful of ultra conservative Republicans.  It made some changes in the bill to appease Freedom Caucus members and it passed a bill that it sent to the Senate.  The CBO just scored to new bill and it found that 23 million Americans would lose coverage under the new bill.  The Speaker of the House, Paul Ryan praised the bill for two reasons: He said that it would lower premiums and that Obamacare was failing on its own.  The most important things we need to know about the Republican plan is that it cuts Medicaid spending by around $800 billion.  The cuts in Medicaid were necessary to fund the tax cuts in the plan for citizens with high incomes.  There is no way that a less costly healthcare plan can be produced without reducing access to healthcare and/or reducing benefits.  The Republican Senate will make an effort to fix some of the flaws in the House bill.  They have an impossible task.  They can't fill the holes in the House plan without increasing federal funding.  Its all about money.  Any plan that reduces funding will provide less access and fewer benefits.

Paul Ryan and Trump both claim that Obamacare is failing on its own.  That is wrong.  Ever since the Obama administration passed the Affordable Care Act.  Republicans have undermined the bill.  It was not a perfect bill but it was the best bill that Obama could get out of Congress.  If Republicans really wanted to increase access to healthcare it would be easy.  They could do that by reversing the steps that they have taken to sabotage the ACA.  They can't do that for a couple of reasons.  In the first place, they promised their base that they would repeal the ACA and they renamed Obamacare.  It was renamed because a large part the Republican base did not like Obama's skin color.  Moreover, they resented the fact that many of the needy Americans who benefited from ACA had the same skin color.  They have also hated Medicaid since it was passed by the Johnson administration in 1965.  The ACA is totally dependent upon Medicaid.  Its impossible to cut Medicaid by $800 billion and produce a plan that does not reduce coverage and benefits.  Donald Trump's proposed budget plan makes things even worse.  It cuts Medicaid by an additional $650 billion.  Again the cuts in Medicaid are necessary to provide more tax cuts for high income Americans.

The battle over healthcare reflects fundamental values in our society.  The Republican Party is driven to reduce the non-defense side of the federal budget because the bulk of that side of the budget is consumed by public welfare programs.  Paul Ryan also would like to cut taxes and balance the federal budget.  Its pretty clear that this can't be done without defunding public welfare programs.  Healthcare, education and social security will always be at risk from the Republican Party.

Wednesday, May 24, 2017

Trump's Budget Team Fails Economics 101

Much of the discussion about Trump's budget proposal has been about proposed cuts in popular programs.  Those discussions are important but Larry Summers looked at the numbers and he found that they don't add up.  The plan that his team put together would get a failing grade in an introductory economics course according to Summers.  This is the kind of team we get when an ignorant and dishonest CEO recruits its members.  It all begins with Trump. 

The President’s personal failings are now not just center stage but whole stage. They should not blind us to the manifest failures of his economic team. Whether it is Secretary Mnuchin’s absurd claims about tax cuts not favoring the rich, Secretary Ross’s claim that the small squib of a deal negotiated last week with China was the greatest trade result with China in history, NEC Director Cohn’s ludicrous estimate of the costs of Dodd Frank, or today’s budget, the Trump administration has not yet made a significant economic pronouncement that meets a minimal standard of competence and honesty.

Trump's team is trying to sell its budget by claiming that it will produce a budget surplus by 2027.
In other words, the budget will satisfy two of the wet dreams that Republicans have had since Reagan.  They can taxes, substantially for the rich, and increase federal tax revenue.  That, along with cuts in federal spending will balance the federal budget.  The tricks employed to satisfy the Republican wet dream are described in this article.  A number of assumptions that are full of holes were used to show that taxes can be cut and also balance the federal budget.

Tuesday, May 23, 2017

Trump Reportedly Asked Intelligence Agency Officials To Refute FBI Statement On Russian Investigation

It is an abuse of presidential authority to ask intelligence officials to get involved in domestic politics.  Trump apparently does not care about any limit on his power.  His request was not followed by the agency heads that he asked to intervene.  They know what the rules are.  Trump does not know, or he ignores any limits on his authority.  The intelligence officials may be asked to testify in the investigations that underway.  They did think it was proper to confirm or deny the reports.

Trump's Policy Proposals Will Not Be Good For His Populist Base

In the article below this post,  David Brooks argues that Trump will not make good on the promises that he made to his populist base.  Brooks blames it on incompetence.  The better explanation is that Trump's promises were made to win the election.  President Trump's budget and tax proposals serve a very different purpose.  Trump's proposals will increase income and wealth inequality instead of reducing them.  Moreover,  Trump's budget cuts federal spending by $3.6 trillion over the next 10 years.  Safety net programs that help the poor will be reduced by $1 trillion.   Trump's budget for 2018 shows large cuts in Medicaid and other anti-poverty programs.  It also makes huge cuts in medical research and disease prevention.  The Environmental Protection Agency budget will be cut by 31%.  Much of the EPA spending is on programs which promote clean air and clean water.  Cuts in those programs will be most harmful to low income American's who are stuck in areas that suffer most from air and water pollution.  Trump's cuts in the Medicaid budget will also create problems for our public schools.  Many of the special education programs are paid for through Medicaid.  Cuts in Medicaid will force states and local school districts to make hard choices.  They will either have to cut spending on regular educational programs or reduce spending of special education unless they raise state and local taxes. 

How Do We Go Beyond Trump?

David Brooks used to have an easy job.  He could observe the political issues in the US and explain why the Republican Party had a better set of answers than the other guys.  He has not been able to do that since we elected Donald Trump and he saw how his favorite party failed to respond to his takeover of the party.  He offers his views on what we learned and how we should respond below.

Brooks suggests that we have learned something important from the Trump election.  In the first place, we learned that there are a lot of Americans who feel that they have been left out of our society in many ways.  They are not doing well economically and they are afraid of the future.  They blame an undefined "elite" for their problems.  Trump told them that he would crush the "elite" and restore the nation that they have lost.

Four months of Trump shows the shortcomings of populism.  We elected a terrible president who will not fix their problems.  Moreover, he explains why political movements fueled by alienation are bound to fail.  We have smashed the system but there is no plan for fixing it.  The atmosphere is filled with conspiracy theories which target perceived enemies.  Nothing positive comes from that.  Trump has made things worse.

Instead of Trump and his appeal to populism, we need an elite that is really sensitive to the problems faced by many Americans.  He argues that we need a social welfare system that is responsive to their concerns but also one in which they have greater participation in developing.  We also have to deal with the failure of our party system.  Allegiance to party has become stronger than our concern for the national welfare and the health of our democratic system.  The Republican Congress has responded to the election of Republican president by behaving as if the other party no longer exists.  That is a path to autocracy.

After four months of Trump we have a broken system and perhaps we will impeach the president.  Whether Trump is impeached or not, he has destroyed his opportunity to govern.  The public and Congress will have to respond to a broken system of governance.

Brooks describes the problem pretty well.  It will not be an easy problem to fix. The first order of business will be up to Republicans in Congress.  The post above describes Trump's budget and tax policy proposals.  They will be terrible for Trump's populist base as well as for America.  Unless Republicans behave like adults, something more drastic will be required to deal Trump.

Sunday, May 21, 2017

A Primer On The Grounds For Impeachment

Donald Trump's behavior has raised the possibility of impeachment.  This article reviews the grounds for impeachment.  It is not about a criminal offense.  It requires Congress to determine that Trump has been guilty of high crimes and misdemeanors which are threats to democracy and the Constitution.  Ultimately, it depends upon politics.  The Republican House impeached Clinton for lying about a sexual episode.  The Republican Senate decided that he was not guilty of high crimes and misdemeanors that threatened the Constitution and the rule of law.  The investigations that are underway in Washington are still in their preliminary stage.  The likelihood of impeachment will depend upon popular opinion.  House Republicans will be more influenced by the potential for losing control of Congress than the legal nuances of the grounds for impeachment.

Washington Post Editorial On Presidential Crisis

The Washington Post Editors argue that it will take time for the investigations into Trump's situation to bear fruit.  Therefore, it is time to get back to running the country while the investigations proceed.  They go through a list of things that need to be done and the poor ways in which they have been dealt with thus far.  The Post editorial is similar to the NYT editorial just posted.  They remain critical of Trump and failed efforts to deal with critical legislative issues.  However, both editorial boards appear to be concerned about disabling the governance system while the investigations proceed.

Trump Has Many Problems But We Are Not At Watergate Yet

The case against Trump has been growing over time and his situation is being compared to Nixon's problems with Watergate.  This editorial argues that Watergate was about a real crime that was ordered by the president.  The break in of the Democratic National Committee's headquarters was a simple crime that everyone understood.  Obstruction of justice, and collusion, are more subtle forms of criminal behavior.  Moreover, Democrats controlled both houses of Congress during Watergate.  They are the minority in both houses today.  Perhaps the most successful way to deal with Trump is to beat Republicans at the polls and capture control of Congress.

Are Establishment Elites Out To Thwart Trump's Populist Agenda?

Ross Douthat is one of the conservative journalists for the NYT.  Some of his conservative friends, and the usual subjects like Sean Hannity, have risen to Trump's defense.  They claim that Trump campaigned against the "establishment elite" which is attempting to undermine his populist agenda.  The short answer to that defense is that Trump does not have a populist agenda.   Douthat believes that populists deserve more consideration than they have been given, but that Trump is not really interested in them.  He is primarily interested in himself.  Douthat goes through the populist list of items that Trump espoused on the campaign trail and he gives Trump a failing grade.  The so called establishment elite is not after Trump because of his populist agenda.   He doesn't have one.  He is being attacked because of problems that he has created as a result of incompetence and moral failure.

Saturday, May 20, 2017

The Circle Is Closing Around Donald Trump

The Russian investigation, until now, has focused on Trump associates who are no longer close to him or his current staff.  That has changed.  A new report indicates that a current member of his White House staff is now a "person of interest" in the Russian investigation. Trump could also become a "person of interest"  as people close to him are brought into focus.  Trump also has to worry about Comey's testimony to the Senate Intelligence Committee.  Comey will describe the efforts that Trump made to influence his investigation.  Trump has made it very clear that he fired Comey because he was not happy with the directions that his investigation has taken. Trump did not help himself when he told Russian officials that he reduced threats from the Russian investigation by firing Comey. Many Democrats and more Republicans view Trump's behavior as obstruction of justice.

The Man Who Turmed Conservatism Into Populism

Roger Ailes died from an accident at age 77.  He helped several Republican presidents,  including Nixon, Reagan and Bush,  to make better use of television to deliver their messages.  He also built Fox News into a cable news powerhouse.  This article describes the path that Ailes took in his career that earned him great wealth and power but ended sadly for him when Fox News was forced to fire him.  More importantly, it describes how Fox News became the voice of populism.  It started out as the voice of conservatism but Ailes had the ability to adapt Fox News to changes in its target audience.  It quickly attached itself to Donald Trump during his campaign.  Over 40% of citizens who voted for Trump claimed  Fox News as their major source of information. It is an older audience with an average age of 70, and not very diverse.  At one time its audience was greater than CNN and MSNBC combined.  It was the voice of anti-liberalism and a major source of the polarization that we have seen in the US.  More recently, it has lost its attractiveness to advertisers who prefer a younger audience.  It has also lost market share to CNN and MSNBC which have taken advantage of Trump's fall from grace by reporting extensively on his multiple mistakes and political problems.

There is a telling example in this article of the transformation of Fox News, from the voice of conservatism, to a populist network.  George Will, who many regard as the voice of conservatism, got into a heated argument with Bill O'Reilly.  Will argued that conservatism was not based upon selling false information and promoting ignorance.  Will is not unique in that outlook.  Leading conservative journalists on the Washington Post and the New York Times have abandoned Trump, and perhaps the Republican Party, if it continues to follow Trump away from conservative ideals and intellectual debate into a political party dependent upon misinformation and ignorance.

The Royal Family Visits The Saudi Royal Family

King Donald, landed in Saudi Arabia.  He was greeted by the Saudi royal family which will have a hard time matching the beauty of Trump's royal family.  He was accompanied by Queen Melania, Princess Ivanka and her husband Jared Kushner who orchestrated the meetings in the Mid East.  He also brought along his secretary of state and several members of his staff which included Steve Bannon and Steve Miller who will help him with his speeches.  This is an important opportunity for King Donald.  He has a chance to demonstrate his ability to develop chemistry with foreign leaders.  If he is successful, he might be able to divert attention away from the problems that he has created back home.  He has a lot of experience selling real estate developments to foreign business people.  It may be a challenge for him to avoid mistakes in his capacity as the US President.

Gail Collins wrote a column about Trump's opportunity and his challenges.  She hopes that he does not make comments like he has made in the past, such as calling Belgium a beautiful city.  He is likely to do better than that if he follows the script that he has been given.  It will be a real challenge for Trump if he has to respond to questions from the media.

Friday, May 19, 2017

Trump's Kiss Of Death On James Comey

The FBI director was very concerned about Trump's efforts to woo him.  He was invited to a Trump meeting of law enforcement officials and he did not want to be signaled out by Trump for attention.  After all, he was in charge of the investigation into Trump's campaign and its connections with Russian hackers.  We have all seen the video.  Trump held out his hand to Comey and he went a step further by providing him with an unwelcome hug.  This article describes the many video episodes in the White House that could make a funny movie.  Comey did not think it was funny and he had good reasons resisting the embrace.  I did not think it was funny either.  It reminded me of a scene in The Godfather when the God Father gave his brother a fatal kiss.  His execution had already been ordered.

Why Did Trump Win In US While Le Pen Lost In France?

Paul Krugman is not a fan of the Republican Party.  It is held together by a few central policy positions for a long time which have enforced by very very very rich supporters.  He also argues that both of our political parties are led by professional politicians.  His view is that Republicans are worse than Democrats because they represent less diverse set of constituents.  Those are old arguments that did not interest me.  There were two related points that did interest me,

We have all watched Donald Trump's performance in the White House.  Its hard for many people to imagine a person less fit to be our president.  He was an accident waiting to happen and it happened.  The first step for Trump was to win the GOP nomination.  He captured the constituents that had belonged to Ted Cruz along the way while calling him "lying Ted".  He also left Jeb Bush in the dust early in the contest even though he had raised much more money, and started out as the favorite.  That left "little Marco Rubio" to compete against him.  That was no contest.  Trump had wiped out the cream of the Republican crop on his way to victory.  That was a big surprise, but what surprised many people, including Paul Krugman was how the Republican Party accepted and welcomed the intruder who had captured their party.  Even "lying Ted" and "little Marco" have rallied around the Republican president during his latest crisis.  The leader in the House, Paul Ryan, has worked hard to support Trump's agenda even though he had once been critical of his morality.  In politics winning is everything.  Party loyalty is more important than the national interest.

That leads us the most interesting question in Krugman's article.  Trump's campaign was very similar to Le Pen's campaign in France.  She lost the election to Macron, who did not represent any of the traditional political parties in France by a wide margin,  Why did Le Pen lose the election while Trump won the election in the US?  The answer is pretty simple.  The Conservative Party in France did not support her in the run off election.  Trump won in the US because he was welcomed into the Republican Party with open arms after winning the primary.  He had captured the Le Pen portion of the GOP constituency and that was no problem for the rest of the party.  The Republican brand was granyed to Trump/Le Pen.  Trump won the election because we have a two party system.  He is still supported by 87% of registered Republicans.  Party identity in the US reigns supreme.

Why The Trump Agenda Has Collapsed

In order to get anything done in Washington it is essential to get leadership from the White House.  David Brooks argues that the White House is broken.  He does not know where the investigation will go, but Trump has not staffed the White House with enough quality people.  He has also failed to establish a positive and productive culture. It is a culture of selfishness. The damage has been done.  Top people will leave, and it will be impossible to recruit talent to the White House.  That means that it will be impossible to get any major legislation through Congress.  In less than six months Trump's presidency has been destroyed.

Its probably a good thing that Trump's agenda will not go anywhere, but four years is long time for the government be in a state of paralysis.   It is also not surprising that this happened.  Trump ran an organization of around 100 people and many of them were part of his family or loyalists.  He was able to run that organization essentially by himself.  He has the kind of personality that helped him to establish the Trump brand.  He also bullied his opponents with threats of lawsuits.  In other words, he was not the kind of person that should have been in the White House.  Large organizations do not operate like the businesses that Trump owns. The most important job of the chief executive is to put talented people in key positions and to build a positive culture.  That can only happen when the person at the top of the organization has qualities that Trump does not possess.

Thursday, May 18, 2017

Would You Let Trump Run Your Company?

I have taken the position that Trump oversold himself as a business leader who could transfer his skills to running our government.  This article makes the same point.  It compares Trump's performance in the White House with the way in which an accomplished CEO would handle each issue.  A corporate board would have fired him quickly.  I would go a step further.  He would have never been asked to apply for a top job with his background.  If invited to interview for a top job he would have flunked the interview.  Our problem is that our electoral system made a terrible mistake.  The Republican senate has not performed its job as a corporate board would have done.

Deputy Attorney General Appoints Special Counsel To Lead Investigation

The Constitution grants great power and authority to the president.  It also established a system of checks and balances to contain that power within a system of law.  The election of Donald Trump has tested that system of checks and balances.  The weakest link in the system is Congress.  Members of Congress belong to political parties.  That puts them in a bind.  They are often torn between party loyalty, their own self interest, and the national interest.  The appointment of a Special Counsel has provided us with a valuable lesson about the wisdom of our founders.

The press plays a valuable, and essential role, in our system.  The president did what he could to muffle the press.  No president is fond of the press, especially when it is critical of the president and his policies.  Donald Trump went to the extreme by attempting to delegitimize media sources that he could not silence.  He told his followers that institutions like the Washington Post and the NY Times provide "fake news".  His strategy did not work.  They provided valuable information to the public despite Trump's efforts to silence them.  We would not have learned about many of Trump's falsehoods, or his interference into an investigation, that he calls a hoax, without the protections provided to the media by the Bill of Rights.  That protection does not exist in many nations.

The judicial system provides another limit to abuses by authoritarian presidents.  Trump has been critical of the judicial system, but he has not been able to keep it from doing its job.  The Deputy Attorney General appointed the Special Counsel instead of the Attorney General appointed by Trump.  The Attorney General was forced to recuse himself from the Russian investigation because his failure to disclose contacts with the Russian Ambassador made him a potential target of the investigation.  Trump was furious when his appointed Attorney General recused himself but the law required him to do so.  The Special Counsel can conduct his investigation wherever it takes him.  The president cannot interfere with his investigation.

Our founders understood many of the problems in any electoral system.  The rules can be altered by corrupt legislatures but the weakest link is in the system itself.  It is easily turned into a popularity contest that is supported by expensive marketing campaigns.  We elected a demagouge to the presidency for two reasons:  Our economic system has not functioned well for many Americans.  Neither political party offered them a way out of their problems.  Trump made promises to them that they believed. He also demonized his opponent and attacked many of the enemies of his base.  That is standard procedure by demagogues.  His opponent in the election also had flaws that forced many voters to choose the lesser of two evils.  Many of her flaws were the result of relentless attacks on her performance as our Secretary of State.  Republican investigations into her performance failed to show that she was responsible for a failure to protect the US embassy in Benghazi from a terrorist attack.  However, they discovered that she had used a private email server during their investigation.  They turned that into an effective weapon during the election cycle.

We will have to see how the investigation into Trump's potential obstruction of justice turns out.  The same is true of the Russian investigation.  No matter how it turns out, the system of checks and balances is working but we need to look at ways to improve the electoral system.  A system that put a totally unqualified demagogue in the White House is an obvious failure.


Wednesday, May 17, 2017

The Beginning Of The End For Donald Trump

The NYT reports that FBI Director James Comey wrote memos after his private discussions with Trump.  One of the memos provides a record of Trump asking Comey to "go easy" on Michael Flynn.  FBI memos of events are usually regarded as statements of fact in a court of law.  The implication is that Trump may be guilty of the obstruction of justice.  It also suggests that Trump fired Comey because he refused Trump's request that he take a pledge of loyalty to him, which is confirmed in a separate Comey memo.

This Washington Post editorial puts pressure on Republican leaders to call for a special prosecutor to investigate Trump's apparent efforts to obstruct justice.  They have to decide how they can minimize the damage to their party after these revelations.  A prominent conservative journalist for the NYT even suggested that the 25th Amendment should be used to remove Trump from office.  A president can be removed from office without going through impeachment proceedings if 2/3 of cabinet members claim that a president is not fit to carry out the duties of the office.  He makes a claim that others have made after observing Trump's campaign and his performance in office.  Ross Douthat has concluded that Trump has demonstrated incompetence as a manager of the Executive branch.  He echoes a point that I have made in previous posts.  If a corporate CEO mismanaged a company, in the ways that Trump has mismanaged his presidency,  he would have been fired.  We should not have to wait four years to remove an incompetent president.  That will not happen, but Trump will not easily escape from the trap that he set for himself.  The dam of support from Republican leaders has been leaking.  The Comey episode may be the beginning of the end.  Senior Republican senator John McCain said that Trump's scandals are reaching Watergate levels and scale.  He does not support appointing a  special prosecutor just yet but his advice to Trump will not be followed.  He must have kidding when he suggested that Trump should just get everything out in the open.  He might of well have asked him to get rid of his wig.

Tuesday, May 16, 2017

The Growth Of Employee Non-Compete Clauses Has Big Impact On Labor Market

This article (via Manan Shukla) describes the increased use of non-compete clauses and their impact on the labor market and on new business formation.  In 2014 around 20% of employees were bound to a non-compete clause. That is a huge change from their former use to restrict the options of top managers or key technical personnel.  That is another signal about the direction of the US economy.  It has become a knowledge intensive economy.  Its understandable why employers would take legal actions to retain valuable employees.  Moreover, they make the labor market less competitive.  That is not so good for employees.  They restrict their options in the labor market. That reduces growth in wages while increasing business profits.  It also has the effect of reducing new business start ups.  Employees restricted by non-compete clauses are less likely to leave their employer to start up new businesses which are usually more innovative than mature firms and more likely to hire new workers.

"And A Child Shall Lead Us"

David Brooks nailed it in this article on our childish leader.  We have elected a president who behaves like a child who can't get enough attention and praise.  He behaves exactly like others who have the same personality disorder.  Brooks provides numerous examples of Trump's behavior that are characteristic of narcissists.  Trump was successful in his career as a TV personality, and as a real estate developer.  He frequently got into trouble, but he found ways to use "trouble shooters" to get him out of the jams that he created on his way to fame and power.  His creative use of lawyers and other enablers is legendary.  This time it is different.  He is no longer running a family business.  He is in charge of a large and complex government that he does not understand.  That makes him dangerous to himself; to our nation; and to the rest of the world.  David Brooks describes Trump's meeting with two top Russian officials in the Oval Office.  Trump boasted about the intelligence that he receives daily due to his position as our president.  He decided to provide them with an example of the information that he receives from US intelligence sources.

One of our allies provided us with information about an ISIS plan to turn laptop computers into weapons that could be used by jihadists to blow up commercial airlines.  The information that he provided, on his own authority, had been given our highest security classification.  Trump did not understand why he should not have done this.  The information that he provided will be reverse engineered by Russian intelligence.  They will be able to identify the ally that provided us with the intelligence.  That will have all kinds or repercussions that are potentially harmful to US security.  A normal president, who did not have Trump's personality disorder, would have understood why that should not have been done.  Trump did not have that understanding, and he could not resist the opportunity that he had to impress the Russian leaders with his access to intelligence and power.

It is obvious to many Americans that Trump is not fit to be our president.  He has the lowest approval rating of any US president during the normal "honeymoon period" in which our elected president is given the benefit of doubt by the electorate.  Moreover, the majority of Americans strongly disapprove of his performance.  One would think that Republicans in Congress would do more to contain the dangerous person that they helped to elect.  That has not happened.  The simple reason that this has not happened is that 87% of registered Republicans approve of Donald Trump.  Every Republican in Congress has to worry about how their reaction to Trump's performance will affect their next election campaign.  They can't afford to alienate Republicans who voted for Trump, or those who typically fund Republican campaigns.  However, they also have to be concerned about how independents will vote.  Only 37% of registered independents approve of Trump.

David Brooks and a number of other Republican opinion leaders have decided to abandon Donald Trump.  They don't want to be led by a dangerous childThey hope that their friends in Congress will decide that Trump is dangerous, and that they will decide to contain him, or replace him with a more reliable Republican like Vice President Pence who will act more like a president in promoting the same Republican policies that Trump has been struggling implement.

Sunday, May 14, 2017

Another Prominent Journalist Pokes Fun At The Donald

Its one thing when late night TV makes fun of The Donald.  Its quite another thing when he becomes a subject of ridicule by Maureen Dowd.  She is not an enemy that any politician should choose. This op-ed by a master of satire is another dagger that goes straight to Trump's heart.

How Trump Has Failed As A Chief Executive

Donald Trump sold himself during his election as a business leader.  He argued that the nation would be better if he drained the swamp in Washington and replaced government officials with business leaders like himself.  If Trump had been appointed by corporate board to run a major corporation he would not have to be impeached to save the corporation from mismanagement.  Trump would not have survived an episode of mismanagement as serious of that described in this article.  He not only lacks experience in government, he could not manage a major corporation.  He was successful in running a family business but that is nothing like running a major corporation.  Its doubtful that he would have been hired to run a major corporation if he wished to do so.  Anyone who has seen his TV interviews would understand why he would not get through the interview process. 

Why Trump Should Be Impeached For Obstruction Of Justice

The Republican Party impeached Bill Clinton because he lied under oath about having sex with a White House intern. That was a pretty low bar for impeachment.  Lawrence Tribe is a professor of constitutional law at Harvard.  He argues that Donald Trump has admitted to obstructing justice even though he does not know enough about the Constitution to realize what he admitted.  Republican's defended Richard Nixon when he faced impeachment for a serious crime.  They gave up on their defense when Nixon, and officials in his administration, made things worse during the investigation of his crimes.  Evidence of Nixon's behavior became available when secret tapes were discovered.  Republican leaders told Nixon that he had lost their support and that he would be impeached.  Nixon decided to resign in order to avoid impeachment.

Lawrence Tribe's argument is based upon his definition of the obstruction of justice.  He claims that Trump's firing of the FBI is a clear example of the obstruction of justice.  Trump also violated the law when he asked the FBI director to tell him the status of an ongoing investigation in which he and his campaign were potential targets.  He also may be guilty of demanding loyalty from the FBI director who he invited to dinner in the Oval Office (Trump claims that Comey invited himself to plea for being retained in his job).

The Republican leadership will not impeach Trump because a constitutional lawyer from Harvard has accused Trump of obstructing justice.  They realize that Trump's supporters could care less about how a Harvard law professor defines the obstruction of justice.  Clinton's lie about having sex with an intern is another matter.  The public understands what that is.

The ongoing investigation into the relationship between Trump's campaign associates and Russian interference in the US election will continue.  Trump will obviously attempt to replace Comey with a loyalist.  They are easy to find.  For example, the senator from Texas demonstrated his loyalty during a Senate public hearing by accusing Sally Yates of wrongly refusing to defend a Trump order that she believed to be unlawful.  He also made an effort to shift the discussion in the hearing from the Russian investigation to the issue that Trump wants to be investigated.  That is, leaks from government officials to the press.  He is one of the candidates on Trump's short list.

Republican Guide To Presidential Behavior

Donald Trump has set a new standard for presidential behavior.  It is defined in this editorial.  Some things may have been left off, and more will likely need to be added.  It will be hard for any Republican president to live up to this standard in the future.  Donald Trump has lowered the bar to a level never before seen in our history.  As the standard bearer for the Republican Party he has redefined what it means to be a Republican.  His cheerleaders in the Republican Party have aided and abetted him, either actively or passively.  It has been a team effort to lower the standard of presidential behavior.

The new presidential standard described in this editorial has not only re-branded a once credible political party it has re-branded America.  Trump's Herculean efforts to "Make America Great Again" has set a lower standard for our nation.  He has redefined democracy and the ideals that have we have  worked for centuries to establish.  Our brand as a global leader has also been re-defined.  Nations that have trusted us, and have relied upon our leadership in global affairs, have been confused about our direction as we adjust to Trump's new standards of presidential behavior.

Other presidential hopefuls will have difficulty repeating Trump's success in capturing the presidency. Trump understands the motivations and thinking of millions of Americans.  He speaks to them every day by sending out tweets to 29,000,000 followers.  They believe that Trump will fulfill the promises that he made to them.  They also believe that Trump's efforts are thwarted by elites who he has defined as the enemy of the people.  He cannot fail.  He can only be prevented from achieving his goal of "Making America Great Again" by the actions of elites who have ganged up on him and lie about the real direction of his policies which favor the elites that they despise.

The Republican Party leadership faces a difficult problem as Trump lowers standards for the presidency.  They can't win elections without the votes of Trump true believers.  While he is president they have a rare opportunity to make America even greater for the nastiest segment of America's elite.  That combination, of the worse segments of American society, may be a winning combination.  After all, what good is a political party that does not win presidential elections?  The risk that Republicans take with that strategy is very high.  Its success requires the party to reject the ideals that  appeal to Americans who have a higher standard for the presidency.  A political party that bases its strategy on appealing to the lowest common denominator in society will eventually collapse.  A political party that is led by a president who has become the butt of jokes on TV in America and in Europe faces a dim future.  It cannot endure.

Saturday, May 13, 2017

Trump The Job Creater Is Mostly Talk And No Real Action

Trump has been using Twitter to announce all of the jobs that have been saved through deals that he has made with corporations.   Many of the saved jobs had nothing to do with new corporate decisions.  Trump took credit for corporate moves that were planned well before he became president.  Trump has had almost zero affect on corporate decisions to keep jobs in US.  Each of the tweets about Trump job creation are examined in this article.  Trump has not told the truth about his influence on jobs.

How come I am not surprised by the data in this article?  Trump is all talk and no action on jobs.

Friday, May 12, 2017

If There Is No Crime, Why Is Trump In Coverup Mode?

This article rehashes a lot of information that has already been reported.  However, I posted it because it ended by posing a good question.  Trump has been acting like someone who is worried about something that might be uncovered in the FBI investigation.  He is doing a lot of the things that Nixon did when he was being investigated about Watergate.  Nixon announced that he is not a criminal.  Trump just announced that he is not a subject in the Russian investigation. He claims that the investigation is pointless.  "Me thinks he protests too much"  Why kill an investigation if there is nothing to fear?  He should be supporting the Russian investigation so that we can prevent a recurrence. He may be worried about a weak link among his associates who have been asked to provide information to a federal prosecutor.  In a typical investigation of this sort the weak link gets flipped and makes a deal to incriminate someone higher in the chain.

Trump Makes Life Tough For Republican Journalists

Jennifer Rubin has been defending Republican ideals her entire career.  Now she has a president who makes life tough for her because she can't support a Republican president who does not espouse Republican ideals.  He seems to have no ideals and he is incompetent to boot.  She has been told by her fellow GOP thinkers that Trump is setting himself up for failure.  Each mistake he makes gets closer to bursting the dam that keeps him in office.  She describes the weak support he is getting from many GOP leaders that encourages her to be hopeful, but she is also aware of Republicans who care only about leaving him in office so that he can cut their taxes.

Trump Just Can't Stop Killing Himself

Trump blasted out a tweet threatening Comey that he "may have tapes" of their private conversations.  Apparently, he is worried that Comey may be tempted to lie about their conversations.  That is a very strange threat.  He either has taped their conversations, which has not been a practice in the White House since Richard Nixon, was used them to his great disadvantage, or has not taped the conversations.  Why would he say that he "may" have taped the conversations?  The only reason that I can imagine is that he may be asked to release the tapes in the future. In that case he can say that the tapes do not exist.

Trump became a celebrity during his reality TV show in which apprentices competed for jobs.  The competition ended when Trump uttered his most famous phrase "You're fired" to the losing apprentice.  Trump's behavior as an apprentice in the White House is missing an important player.  There should be some one on the show who can utter his famous phrase.  He has demonstrated nothing but incompetence during his apprenticeship.  It gets worse daily.

Everyone Needs A Score Card To Keep Track Of Trump's Mess

This is a good link to multiple stories about the rapid pace of events in Washington following Trump's tragic mistake of firing the FBI directer.  It begins with Paul Ryan's belated support for Trump's decision to fire Comey.  Ryan simply stated the obvious point that Trump had the authority to take an action that has been seldom taken in US history.  Ryan's most important concern is that Republicans have an opportunity to reform taxes and healthcare until Trump derailed those opportunities by shifting attention to the Russia investigation.  Washington is now totally focused on the whiplash from Trump's decision.  Much of the reporting on the whiplash is reported in this link.

This score card also provides a lesson to the rest of the world.  Trump has little control over the media outside of Fox News and other aligned sources.  The free press in the US may make things more difficult for the government but it also provides an important protection against government corruption.  We will always have corruption when we have disparities in wealth and power, but we are lucky to have a system that limits corruption.  The free press has been a major source of public welfare in US throughout our history.

Is ThisThe Real Reason Why Comey Was Fired?

The Trump administration has offered two reasons for Trump's decision to fire Comey.  The first reason, that came from his PR staff, made it seem like Trump simply followed a recommendation from Comey's supervisors in the Justice Department.  Anyone who believed that story has a mental disorder.  Trump decided to tell a different story after the first story created laughter.  It was also designed more carefully to protect him from potential legal problems.  He told NBC that he fired Comey because he had been doing a bad job.  He also described three meetings with Comey in which he was told that he was not a subject in the Russian investigation.  He took pains to mention that three times because it would have illegal for him to fire Comey if he was under investigation.  He also described one of his meetings with Comey in the White House as a meeting requested by Comey.  In other words, Comey was sucking up to him to save his job.  Another story has surfaced which refutes Trump's version of his meeting with Comey.

Sources close to Comey claim that Comey told them a very different story.  They were told that the meeting was requested by Trump.  During that meeting Trump asked Comey whether he would be loyal to the president.  Comey responded by saying that he would be honest.  Trump subsequently asked Comey whether he would be "honestly loyal".  That was not the answer that Trump was looking for.  He demands total loyalty from his foot soldiers like any Mafia boss would do.  Comey believes that his downfall with Trump began in that meeting.  Trump watched Comey carefully during his interviews in public meetings with congressional committees.  He was displeased with Comey's version of honest loyalty.  The FBI director was in a powerful position which could be harmful to him if he did not get complete loyalty.  Trump has been caught telling lies or providing misleading statements hundreds of time since he was elected.  If we have to choose between a story told by Trump or one coming from Comey it would be a "no contest decision". 

The real reason my be something like this:

Recounting his decision to dismiss Comey, Trump told NBC News, “In fact, when I decided to just do it, I said to myself, I said, ‘You know, this Russia thing with Trump and Russia is a made up story, it’s an excuse by the Democrats for having lost an election that they should have won.’”

Thursday, May 11, 2017

The Toughest Job In The World: Communication Manager For Trump

The article tells us what three of Trump's spokespeople said about the decision to fire the FBI director.  Their stories were not taken seriously by many people but they tried as hard as they could to make the story seem plausible.  Trump just threw them under the bus in an interview with NBC today. He claimed that he would have fired Comey without the fiction about the role of the Justice Department in his decision.  Its no wonder that his press handlers are the target of late night comedy shows. Its very difficult to justify much of what Trump does or tweets about.  Its even a tougher job when Trump turns around and changes the story that they have been trying to sell to the media.  Trump's experience running a family business has not prepared him for a job in which he has to manage a large organization of advisers and communication professionals.  He wants to do everything himself and he is uncomfortable with anyone else doing jobs that prefers to do himself.

Did Jeff Sessions Break His Recusal Ageement When Trump Fired Comey?

Donald Trump's explanation for firing Comey implied that he was responding to the chain of command in the Justice Department.  The Assistant Attorney General, who was Comey's immediate supervisor,  did an evaluation of Comey which was given to Attorney General Sessions.  Sessions then gave the evaluation of Comey to Trump who then decided to fire him.  Few believed that Trump fired Comey for the reasons that were initially provided by the White House.  This article argues that if Session participated in firing Comey as described by the White House he would be in violation of his recusal which prevents him from participation in the Russian investigation.  Trump may also have legal issues if he interfered with an ongoing investigation by firing Comey.

Trump may have been appraised of the legal issues following the White House description of the process.  He announced today that his decision was not based upon the evaluation he received from the Attorney General.  He declared that it was entirely his decision and that he would have made the same decision without the Justice Department evaluation of Comey. He even accused Comey of being a loud mouth and an attention grabber. (like himself?). Few believed the initial story that was provided by the White House.  Trump now claims total responsibility for the decision to fire Comey. Perhaps that is why he claims that Comey told him that he was not a subject of the investigation three times in his current explanation for firing Comey.  He could not do that if he was a potential target in the investigation.  Comey publically announced that potential collusion between the Trump Campaign and Russian intervention in the election was part of the investigation.  Trump's involvement could not be excluded from any investigation of his campaign and associates without knowledge about findings that might be found later in the investigation. 

The story will probably change again tomorrow after it is tested with a focus group and more lawyers.

The Complicated Relationship Between Politics And The Media

There has been a lot of discussion about the media and politics in the last few years.  We have learned about the so called fake media, like Breitbart News.  Donald Trump has gotten into the act by claiming that media sources that are critical of him are the really fake media.  The relationship between the media and politics is discussed in this article by economists.  It turns out that our traditional media sources are much more important to politicians than fake media.  The recent acquisition of Tribune Media by Sinclair Broadcasting illustrates the issue between media concentration and politics.

After its acquisition of Tribune Media, Sinclair's ownership of local TV channels puts it in contact with 70% of US households.  That has been very good for its shareholders and it has been very good for Donald Trump.  Sinclair's stock increased by 38% in six months.  That is a 24% greater increase in value than S&P 500 index over the same period.  Donald Trump assisted Sinclair in extending its household coverage to 70% because it appointed the Chairman of the FCC who removed a rule that restricted coverage to 39%.  21st Century Fox is currently at 37%; it also competed with Sinclair for the acquisition of Tribune Media.

Donald Trump's son-in-law Jared Kushner is reported to have struck an interesting deal with Sinclair (which they both deny.  Since Donald Trump is a celebrity, TV ratings usually improve when Trump is part of the news content.  Kushner promised greater access to Trump interviews in exchange for a promise not to comment on Trump's statements.  Sinclair's coverage of Trump has been measurably more positive about him and his policies than a neutral rating.  That was particularly helpful to Trump because of Sinclair's access to the Ohio and Florida TV markets.

Trump's celebrity status has been particularly good for cable news networks like CNN, CNBC and Fox News as well.  Trump creates controversy and that attracts viewers.  That is important for broadcasters because the prices that it charges for advertising slots is positively related to audience size. Donald Trump is boon for television networks.  Much of the coverage is critical of Trump but that still enables him to control the news cycle.  He doesn't even have to be interviewed.  A simple tweet will do the trick.

When we think about the relationship between the media and politics we tend to focus on government efforts to influence the media.  It is really more complicated than that.  Business considerations have a powerful effect on the media.  Bill O'Reilly was a star performer at Fox News.  He had been the subject of law suits by women who accused him of harassment for several years.  Fox paid millions to his accusers for several years because he had a huge audience.  Fox decided to fire O'Reilly when advertisers decided not place their ads on the O'Reilly show. They did not want their products or firms to associated with O'Reilly after his behavior with women was  exposed.  Advertisers pay for most of media services that we consume.  The business interests of advertisers and media firms have a powerful affect on what appears on TV and other media sources.  This issue becomes more acute as media ownership becomes more concentrated.


Former CIA Director Gives His View On Comey Dismissal

A former CIA Director does not believe the Trump explanation for firing Comey.  He would have fired him right after assuming office if he was critical of Comey's handling of the Clinton investigation.  It smells like a cover up to someone who knows a lot about this kind of thing.  This article was reported on Yahoo Finance which mentioned that Trump's decision had a chilling effect on the stock market.  The market does like uncertainty in Washington.

How And Why Trump Decided To Fire Comey

There aren't many sane people who believe Trump's explanation for his decision to fire the FBI Director.  This article describes some of the events that led to his rash decision.  Some Republicans had urged him to fire Comey because he chose not to prosecute Clinton for her use of a private email server.  Trump had been concerned that the FBI gave preference to the Russian investigation over the investigation of leaks that worried him.  Most of the leaks were not about classified information.  Its the kind of thing that happens in Washington every day.  Reporters typically use sources that they have cultivated to learn more about issues on which the report.  Kellyanne Conway, gave the case away when she attempted to defend Trump on CNN.  She accused CNN of saying Russia, Russia, all of the time instead of reporting on leaks.  She clearly understood what bothered her boss.

Trump's behavior confirmed much about what we already know about his temperament and his need for constant approval.  But we also learned a lot about his management style.  He tried to divert attention from his role in the evaluation of Comey.  He turned that over to his Attorney General and the Assistant AG who was asked to evaluate Comey's handling of  the Clinton investigation.  The AG provided a criticism that lined up pretty much like the critique that Democrats made.  The  Assistant AG was surprised when that was used to justify firing Comey.  Trump and Sessions expected that this explanation would prevent criticism from Democrats.  That was really stupid.  However, it was not what really worried Trump.  Comey had requested more resources to pursue the Russian investigation and he told a TV audience that the Trump campaign was a target for collusion.  Associates of Michael Flynn had also been told to that they were under investigation.

Reactions From The Rest Of The World About Comey Firing

This article provides a sample of press reactions to Trump's decision to fire the FBI director who was leading the investigation of Russian interference in the US election and possible collusion with the Trump campaign.  Outside of Russia, few believed Trump's explanation for firing Comey.  On the other hand, the reaction was mixed in parts of the US that voted for Trump.  Its interesting that Hillary Clinton's campaign invested heavily in ads suggesting that Trump was too impulsive to act rationally as our president.  Many of Trump's supporters applauded his "decisiveness".  They want the president to behave like they imagine that business leaders behave by making snap judgements.  Its also clear that the Republicans, with a little help from a friend, succeeded in undermining Clinton's campaign by focusing attention on her misuse of a private email server. 

The election is over but the damage done to US democracy, and to our credibility as world leader, has been badly damaged by Trump's presidency.  Trump has shown how democracy can be subverted even in the world's leading democratic nation.  The Republican Party has also demonstrated how the party system can distort democracy. Most of its leaders have shown that they place their party above the interests of the nation.  They have witnessed the dysfunction of their president for three months but they seem powerless or too corrupted to alter his bizarre behavior.

Wednesday, May 10, 2017

The LA Times Provides A Series Of Reasons Why It Opposes Trump

I typically cite the Washington Post and the NY Times when I make a political post.  Unfortunately, I have been making more political posts than economic posts since Trump assumed office.  Since Comey was in LA when he learned that he was fired, I went to the LA Times to view its response to Trump's decision to fire Comey.  Its editorial on the decision was very similar to those on Post and the NYT.  The LA Times had been a Trump critic and it published a series of articles about Trump that documents each of several reasons for its opposition to Trump.  It is one of the most comprehensive descriptions of our 45th president that has been published. 

Trump Fires Comey And Lies About The Reason

The Donald fired the Director of the FBI who is investigating possible collusion between his administration and Russian interference in his election.  He continues to believe that we are all as gullible, or self serving, as those who voted for him.  That is the only way that anyone could accept the reason he offered for dismissing Comey.  He had praised Comey during his campaign for his investigation of Hillary Clinton's use of her email account.  Now he expects us to believe that he fired Comey because of the way he handled the Clinton investigation.  There is only one explanation for his action, and the ugly way in way in which he handled it.  He fired Comey while he was in California speaking to an audience of FBI agents.  That disrespectful action was taken because he did not believe that he could control the investigation with Comey at the head of the FBI.  We can not let Trump get away with this. Congress should demand a special prosecutor to lead the investigation into possible collusion between Trump associates and Russian agents who influenced the election. Unfortunately Republicans cannot be counted on to make that demand.  This is the most serious problem that we have faced since Richard Nixon was forced to resign from office after he fired the special prosecutor investigating his illegal activities.

Tuesday, May 9, 2017

South Korea Elects Liberal President

South Korea has elected a new president who would like to improve its relationship with North Korea.  The new president also wants to maintain good relations with the US.  That could be difficult while the Trump administration is taking a hard line on North Korea's nuclear build up.  President Moon will also be hampered by a legislature that has been dominated by other political parties.

Why Households With Income Below $75,000 Lose Insurance

A new study of the Massachusetts healthcare plan, that is similar to the ACA, shows why House plan is even worse that we thought.  The Massachusetts plan is segmented by income levels.  It shows that enrollment in the plan is very price sensitive.  Low income families have little excess income to pay for health insurance.  Instead they rely upon going the hospital emergency rooms for care.  Applying the price sensitivity information to Republican plan showed that families with incomes below $75,000 would not enroll in the Republican plan.  That conclusion is even more damaging than the findings of the CBO which made a more conservative estimate of the millions who would lose coverage under Trumpcare without knowledge of the price sensitivity that was discovered by the analysis of the Massachusetts plan.

The Republicans were ecstatic during their celebration when the House plan finally passed.  They passed a plan that would make insurance unavailable to families with incomes below $75,000 in order to cut taxes for high income families by $880 billion over 10 years.  The Senate will not pass the House plan as it was written but Republicans in the Senate are having conversations with members of the House Freedom Caucus to determine what they require in order to pass a plan revised by the Senate.  They won't get much support from the Freedom Caucus for any plan increases access for poor families.  The Freedom Caucus is married to the idea that people should only buy what they can  afford.  They want the price system to perform its rationing function.

The Republicans are not really as heartless as they seem.  They really do care about their fellow citizens.  They were brought to tears when they understood that households with $1 million of income had to pay $50,000 in taxes under Obamacare.  The worked endlessly to eliminate that tax in order to restore their lost income.  What we really need in America is a political party that will eliminate the loopholes in our tax system that are exploited by those who can afford to hire lawyers who are more familiar with the loopholes than most Americans,  Donald Trump told his supporters that he was the best person to do that because he understood the tax code.  His tax proposal increases the loopholes available for struggling billionaires.  They are reported in the press but it will take more than that to increase public awareness.  It will take a political party that makes that a priority.