Friday, June 30, 2017

The Road To Collusion With Russian Hackers May Go Through Mike Flynn

The Wall Street Journal published an article that raises important questions about Michael Flynn's role in the Trump campaign.  Donald Trump made no secret about his desire to find the emails that Hillary Clinton deleted from her private server.  One of Trump's supporters who had no formal connection to the Trump campaign set out to uncover the deleted emails which Trump could use against Clinton in his campaign.  Trump's supporter contacted Russian hackers to determine whether they had access to the missing Clinton emails.  He used Michael Flynn's name to lend credibility to his communications with Russian hackers.  Flynn was Trump's chief foreign policy advisor during his campaign.  He also had close connections with top Russian officials.  Trump awarded Flynn with the top national security job after his election.  Flynn was forced to resign after it was disclosed he lied about his connections with foreign officials in his required disclosures.  Flynn had become a target in the FBI investigations and Trump asked the Director of the FBI to bury the investigation.  Trump fired the FBI Director when he failed to obey Trump's request and he refused to take a loyalty pledge to Trump.

The investigation into Michael Flynn is still underway.  Its quite possible damaging information about Flynn's role in the Russian hacks will be discovered.  That takes the investigation back to Donald Trump's connection to Flynn's role in support of the Russian efforts to undermine Clinton.

What Does The Fake Time Magazine Cover With Trump On It Say About President Trump

Donald Trump's organization operates numerous golf courses in the US and elsewhere.  A fake Time magazine cover with The Donald on the cover is prominently displayed in many of Trump's private clubs.  The fake cover with his picture on it also includes banners about ratings for his TV show.  The use of a fake Time cover in Trump's golf clubs was not newsworthy before he was elected as president.  It became newsworthy after his election because it speaks loudly about the character of our 45th president.  Trump bragged about being on more Time covers than anyone else during his campaign.  That was not close to the truth.  He was only on a single Time cover before he won the presidential election.  His lies about Time magazine covers is similar to his lies about the size of the crowd at his inauguration.  Donald Trump has an insatiable need to be admired (not loved).  He will place those needs above anything else when he makes important decisions.  When it comes to important bills being legislated in Congress Trump is more concerned about winning than he is about the public impact of a bill.  Trump celebrated the passage the House healthcare bill with a victory party in the White House.  He did so even though he stated that it was a "mean bill".  The Senate is negotiating a revised bill to send back to the House for approval into law.  Trump tweeted a falsehood about the Senate draft of the bill in order to promote its passage.  He stated that it did not cut spending on Medicaid.  That was misleading because Medicaid spending over the next 10 years will be much less than federal spending on Medicaid that is in the ACA bill that it would replace.  Moreover,  Medicaid spending over the remainder of the 20 year period that is part of the CBO analysis of proposed bills would cut federal spending on Medicaid even more.  The CBO concluded that 22 million Americans would lose insurance coverage in the Senate bill.  Trump will place a higher value on passing ANY healthcare bill, so that he can celebrate a win, than he does on its impact on 22 million needy citizens.  We can expect that his approach to other bills will be influenced more about how it affects his image as winner than how it affects our nation.  We have placed an individual who cannot be trusted to tell the truth, and is only interested in ego gratification, in the White House. 

Thursday, June 29, 2017

Why Are Republicans Trying To Pass A Bill That Few Like?

The Republican Senate is pushing as hard as it can to pass a bill that few outside of Trump's base support.  This survey shows that the healthcare bill and Trump's approval ratings are not popular with independents.

The survey data raises an interesting question about the Republican Congress.  Why are GOP politicians insensitive to public opinion?  Do they believe they can win elections without support from independents?  For many Republicans in the House who represent safe districts, many of which are only safe due to gerrymandering, the answer is yes.  They can be reelected without votes from independents.  They worry more about facing a more conservative candidate in a GOP primary than they do about beating a Democrat in the election.  Its a different story in the Senate.  Republican senators can't rely on gerrymandering to protect their seats.  That is especially true in swing states where senate races are often very close.

Another explanation for the Republican effort in the Senate to repeal Obamacare is that the proposed replacement for Obamacare is consistent with GOP ideology.  It cuts taxes for the rich and it cuts funding for entitlement programs.  Its hard for any Republican to take a position that runs counter to an ideology that has been successful for many years. Moreover, many hard core libertarians, who want to shrink government, can't agree on a replacement for Obamacare because any replacement bill is inconsistent with libertarian ideology.  Libertarians are a small but powerful part of the GOP base.  They provide funding for Republican campaigns, and they fund conservative think tanks which have a role in shaping opinion within the Republican base.  Repealing Obamacare has created big problems for moderate Republican senators.  Its easier to prevent the passage of liberal bills in Congress than it is to take away benefits from millions of citizens by killing a liberal bill that provides essential services like healthcare for needy citizens.  Moderate Republican senators have been put in a bind.  They are getting a lot of negative feedback back home from voters and from Republican governors who don't want the burden of dealing with the aftermath of large cuts in Medicaid in the Republican bill.  Party loyalty and ideological purity has made life more difficult for moderates who face elections in 2018.  It would be lot easier for them to fix the flaws in Obamacare than to promote a bad healthcare bill.  That is not a likely option for them.

Tuesday, June 27, 2017

Google Fined $2.7 Billion In EU Anti-Trust Suit

This article describes how Google's search engine was misused in the EU.  I used to enjoy using Google's search engine because it provided me with useful sites.  It is less useful to me now because search results are often dominated by ads which are triggered by the search.  Since Google is the dominant search engine it can make deals with advertisers which give them a favored position is searches.  The EU calls that an abuse of monopoly power.  Google is not alone in this kind of practice.  It was possible to get useful information from sites like Webmd and the Mayo Clinic.  Now they are dominated by ads which offer remedies for the health issue in one's search.  Useful information on these sites has been reduced in favor of generating advertising revenue.  Some of the sites even give a satisfaction rating to advertised remedies.  My guess is that favored positions are sold and not earned.

Trump's America First Agenda Has Hurt Him And US Global Reputation

It is not surprising that Donald Trump's "America First" election campaign has been harmful of our reputation in most of the world.  The US reputation improved only in two countries.  Russia and Israel like us better under Trump.  In the rest of the world, according the Pew survey,  the US reputation has crashed along with Donald Trump's rise to the presidency.  The reputation of the US also suffered during the Bush administration.  The Iraq war, and the lies contrived by the Bush administration to build support for the way were very damaging.  It took eight years of Bush to damage the US image abroad.  It took only six months of Trump to produce a similar result.

Trump supporters might argue that our reputation abroad does not matter.  I guess that depends upon whether the moral and political values that were built up over 70 years are considered to be important to our welfare.  No business would be happy with a destruction of its image.  Moreover,  Trump's reputation will continue to deteriorate over the next 3.5 years.  Few will follow his leadership.  Germany and other nations will pick up the slack produced by Donald Trump.  He is not only disliked; he is regarded as unqualified for the job that he holds.  The statistics in the Pew survey should be alarming to all of us.  Our reputation recovered under Obama after the disaster of George Bush.  It did take long for Trump to destroy the reputation built up under Obama.  We may not be as luck next time.  Trump will ignore this study and place the blame on Obama and the Democratic Party for out lost prestige.  That is one of his big problems.  He never accepts blame for anything.  That is why he never learns from his mistakes.  The only thing that matters to Trump is winning.  That is why he is pushing as hard as he can to sell a healthcare bill that violates all of his campaign promises and is terrible for our society.  He wants a win no matter what it costs.  If he does not get a win, he will blame others for its defeat.  His base will applaud his courage and his energy.  Many of them don't know how the bill will affect them.

David Brooks Divorces Conservatism From Republicanism

David Brooks believes in some form of conservatism which is hard to define.  However, he believes that it includes some vision of a desirable society.  Government plays a role in that society.  It organizes itself around that vision.  For most of his career David Brooks has been an opinion leader in the Republican Party.  He now understands that Republicanism is not Conservatism.  The Republican Party is only concerned about governing but it is not guided by a vision of a conservative society.

Brooks has come to the realization that there is a structural flaw in modern capitalism.  The structural flaw has led to rising inequality which is tearing society apart. Donald Trump was elected to remedy the problem of rising inequality.  He seems to have given up on the promises that he made to his supporters.  He is the leader of a political party that has no social vision.  It is wedded to a system of governance which accepts rising inequality and social decay.  There are two conflicting governing divisions in the Republican Party which are somewhat aligned.  One group is intent upon making the tax system less progressive and lowering the level of taxation.  That plays well with those who want to diminish the role of government in society.  Libertarians are happy with lower taxes because it blends in with their idea of a very limited government.  The internal debate within the Republican Party over the healthcare bill reflects that division.  Moderate Republicans and libertarians can't agree on the extent of government involvement in the healthcare system.  They only seem to agree on eliminating the progressive tax in Obamacare.  In either case,  the GOP bill is a social disaster.  It exacerbates the problem of rising income inequality.

Brooks attended a conference in Aspen that included representatives from the leading conservative think tanks.  Brooks is more comfortable around conservative intellectuals because he believes that they share a vision of conservative society.  They recognize the structural flaw in modern capitalism and they have come to accept income redistribution as one of the remedies.  It is a conservative view of income redistribution that is decentralized and incorporates the market mechanism in its solutions.  They would fix the healthcare system by using market mechanisms to redistribute income those who cannot afford to purchase healthcare.  They have a vision of a consumer driven healthcare system that would offer near universal coverage,  They would probably reject the best liberal inspired version of healthcare which would be a single payer system like Medicare for everyone that prevails in Canada.  That system could solve two major problems in our healthcare system.  Healthcare costs continue to rise faster than general inflation and faster than GDP.  Conservative intellectuals can't really give up on the idea that healthcare is a commodity that responds well to market mechanisms.  Kenneth Arrow, who is regarded as one of our greatest economists destroyed that idea many years ago,  Conservatives have not come to grips with Arrow's argument.  Consumers with limited funds can't purchase many desirable commodities which everyone would like.  Those who are unable to afford insurance, or other means of obtaining healthcare,  will get sick and die without access to healthcare. We accept the idea that everyone cannot own a Mercedes.  Are we ready to accept that low income citizens in the world's richest nation should be left to get sick and die?

Tom Price, who Trump appointed to fix our healthcare system, presented at the Aspen conference.  According to Brooks he was a flop.  He had no real ideas and no vision of a better society.  He spent most of his time trying the sell the Republican healthcare bill.  Price is an example of the problem that Brooks would like to change.  He would like more involvement by conservative intellectuals in government who share a social vision.  What we have instead is Republican Party selling a healthcare bill that has no vision of how it relates to a social vision which Brooks would like to see in our government.  I would go a step further than Brooks.  Our government is being led by individuals who have no social vision but also reject intellectuals and the need for new ideas.

I always learn a lot by reading the comments that follow many of the op-eds written by David Brooks.  There are a lot of smart people who read his articles and they raise good questions.  I also read articles in the Washington Post written by smart people who raise good questions.  The comments that appear after good articles in the Washington Post are nowhere near the comments that follow a typical article Brooks article in the NYT.  It seems like the Post attracts a lot of readers who have no interest in debating ideas.  Many seem to read them as trolls who want to expel liberal ideas from public discussion.  That probably reflects the location of the Post that is also a local paper in an area which has little interest in intellectual debate.

Monday, June 26, 2017

What Is Wrong With US Democracy?

Donald Trump's rise to the presidency has led many people to examine their views about how democracy really works and what can be done to move closer to the ideal that our founders had in mind.  This interview with two political scientists suggests that Donald Trump was not an anomaly.  Democratic elections are essentially battles between constituencies and identities formed within those constituencies. It is shaped by political elites who provide the issues to which voters respond. Donald Trump and Hillary Clinton played the same game and Trump eked out a razor thin majority in swing states that produced the unexpected result.  Donald Trump won the election but his lack of government experience, among other things, has produced unusual consequences.  It should not make us cynical about democracy; instead, it should encourage us to better understand how it really works and to create more balance between constituencies, and political elites, than presently exists in our system.  Winston Churchill defended democracy by claiming that it was the least bad system of governance.  Our founders also understood the many problems that any form of democracy would have to overcome.  They attempted to create institutions that protect the system from an egregious failure.  The move from monarchy to democracy has been difficult but it is not the kind of democracy that is presented in Fourth of July speeches.  The better we understand the problems that were well understood by out founders, and how it is working today, the more able we will be to bring it closer to our ideals.  The political scientists interviewed in this article helped me to better understand what needs to be done to make the real system work better.

How Is Our Former EXXON CEO Doing As Secretary Of State?

I recently had a conversation with a woman who started as an intern in the State Department and has worked her way up to an important position in the department.  When I asked her how things were going under Tillerson she shook her head and unloaded her views on his performance. I had wondered about how a powerful CEO, with global experience, would adapt to his new role. Her views were similar to those expressed in this article.

The conservative Heritage Foundation recommended Tillerson for the job, and Trump's son-in-law Jared Kushner said that Tillerson was "in another league" compared to other candidates that he had interviewed.  Tillerson also fit well into Trump's preference for business experience over government experience.  It also must have pleased him to have the CEO of one of the world's largest corporations work under him.  Trump's business experience is minor league compared to Tillerson's.  Unfortunately, it looks like Tillerson was a bad choice for the job.  His experience as a powerful CEO did not prepare him well for his position of Secretary of State.

Tillerson must have been good at working with the Board at Exxon which appointed him as CEO, and which was responsible for monitoring his performance.  It turns out that he not been good at managing his Board in the White House.  Jared Kushner has played a more important role than Tillerson in the Mid-East.  Kushner picked the right horse in Saudi Arabia and Tillerson did not want the government to get between Saudi Arabia and Qatar during its current dispute over Qatar's role in supporting terrorism.  Trump, as Chairman of Tillerson's Board, has publically sided with Saudi Arabia along with other Board members like Kushner and Bannon who operate out of the White House.

Tillerson has not only lost the support of his Board in the White House,  he seems to have been missing-in-action in the State Department.  One of his priorities has been to reduce the head count in the State Department and cut costs.  That is a popular move by new CEO's in business.  They often take steps to cut costs and improve profits.  Tillerson's cost cutting operation, taken before he had gained experience with his new organization, has not been well received internally or externally.  It has also badly harmed the moral of professionals in State who are rarely consulted prior to Tillerson's decisions in areas where he has no experience.  He seems to have isolated himself in his office along with a small team of his admirers.

The Washington Post's report card for Tillerson does not auger well for him.  Whether we like it or not the Washington Post provides critical information about government performance.  Tillerson seems to have also failed to establish a relationship with reporters who can make or break political leaders in Washington.  When Tillerson retired from EXXON he was rewarded by his Board with a package typical of those received by retiring lords of major corporations.  Its unlikely that his retirement from his current job will be a pleasant experience.  His inability to manage his Board in the White House will eventually end his brief experiment in government.

Saturday, June 24, 2017

Koch Network Claims That Senate Health Bill Is Not Conservative Enough

The Koch Brothers spend tens of millions fund Republican campaigns through its American's for Prosperity organization.  They are libertarians who want to minimize the role of government in society.  They have many supporters in the House and quite a few in the Senate.  Most of the criticism about the Senate health bill is that it cuts benefits and access to healthcare for millions of needy Americans.  The Koch Brothers and their minions in Congress call the Senate bill Obamacare Light.  Instead of shrinking Medicaid and other government entitlements they would prefer to eliminate them.  The Senate has to navigate a path between Koch's minions and more moderate Senators who prefer a more generous health bill.  The Koch Brothers may be more successful at sinking the bill than moderate Republican senators.   

Its rather amazing how a single family with billions to spend purchasing politicians  and opinion makers in conservative "think tanks" can have such a major impact on our government. This is not the kind if democracy our founders had in mind.  We don't need much help from Putin to weaken our democracy.  Hierarchy based on wealth and democracy are antithetical to each other.

Trump's Vice President Sells A Non-Church Goer To Evangelical Christians

Evangelical Christians are a big part of the Republican base.  Donald Trump has no history of church attendance and many of his values are consistent with the focus on family values that plays a major role with evangelicals.  Mike Pence did his duty as a loyal VP and told this group of evangelicals that Trump was on their team.  The President has been married three times and he has a long history of womanizing.  That might have been a hard sell for Pence but he knows all of the tricks of the trade.  His political career was based upon support from evangelicals.  He may be one of them but selling Donald Trump to them should be a challenge.  Pence was up to the challenge.

All The President's Lies In A Single Article

Donald Trump started his move into politics by telling a big lie.  He entered the political arena by telling his believers that President Obama was not an American.  He joined the chorus of those who demanded that Obama show his birth certificate.  He did this as thoughtfully, and as provocatively, as he resisted revealing his income taxes.  "Show your birth certificate" morphed into "lock her up" during his presidential campaign.  He didn't wait long after winning the election to lie about the size of the crowd at his inauguration and how he lost the popular vote because of the votes by illegal immigrants.  A compendium of his lying history is contained in this article.  It provides a good start on a list that will grow rapidly over his career in the White House.  That may be valuable in some sense, but it is very disturbing in a more important way.  Donald Trump has proved that a prolific liar can be elected as the President of the United States.  His supporters have become immune to his lies and Republican leaders make excuses for them.  They tell us that it is part of his unique management style.  We may need to revise our MBA curriculum to bring it up to date with a superior form of management through deception.  In any case, Trump's lack of concern for the truth is not what our founders had in mind when they struggled to create a new form of government.  George Washington became our first president because a divided nation respected his honesty and his integrity.  We have come a long way from our first President who "never told a lie",  to a president who seldom tells the truth.  Lying has been turned into a virtue and many of our citizens shrug their shoulders when his lies are revealed in the "fake news" media which have been the backbone of our democracy.  We have to do better than this.  Donald Trump has sent us an important signal.  We can no longer take our democracy for granted and we may even be losing our respect for science which imposes a system of protection against false claims. 

Donald Trump's Role As A Republcan President Is Very Constrained

The battle over the repeal of Obamacare has produced a bill from the House and bill from the Senate that is diametrically opposed to promises made by Donald Trump in populist campaign for the presidency.  Trump's promises of no cuts to Medicaid and Medicare have been ignored by the Republican Congress.  In doing so, the Republican Congress has clearly defined Trump's role as a Republican president.  Trump is like a "barker" who plays a critical role in a carnival.  The barker convinces the crowd to engage in a particular activity.  During the activity the experts at running the "games of chance" separate the suckers from their money.  He also plays another critical role as the president.  Trump will not veto the replacement for Obamacare as Obama did when he was in the White House.  In fact, Trump is now praising the healthcare bill that cuts Medicaid and Medicare.

Now that we have a "barker" as our president the Republican Party may achieve several of it's most precious goals.  Medicaid was created 52 years ago under a Democratic president.  Republicans hated Medicaid just as they despise most entitlements.  The Senate healthcare bill goes well beyond repealing Obamacare.  It systematically destroys Medicaid.  It does so by putting the states in charge of Medicaid and by reducing federal funding systematically over time.  It was important to make the cuts in Medicaid over time so that they would not impact the midterm elections in 2018.

Republican policies also have a fundamental goal of cutting taxes for individuals and organizations that fund their election campaigns.  As political campaigns become more expensive to run both parties are constrained by the need to raise larger sums for each subsequent campaign.  The Republicans enjoy doing this.  Democrats try to go in the other direction more gently.  For example,  Obamacare expanded the role of Medicaid in the ACA.  It paid for Medicaid expansion by taxing ordinary income over $200,000 by 0.9%.  It also taxed certain forms of investment income with a 3.8% surcharge (which compensates for the low tax rate on investment income compared to wage income).  Warren Buffet, who receives most of his income as investment income said that the healthcare bill, which eliminates the taxes in ACA, will cut his taxes by over $600,000.  Buffet opposes the huge cut in his tax bill because he believes that citizens who are served by Medicaid need the money more than he does.  Buffet, of course, is not typical of billionaires who fund Republican campaigns.  Many of them, like Donald Trump, worry more about their position in Forbes annual listing of the wealthiest Americans.  Trump argued that Forbes understates his wealth just like he argued the crowd at his inauguration was understated by the media.

The bottom line from this analysis is that we have a carnival barker in the White House who will help the Republican Party achieve several of its most important goals.  Cutting entitlements, cutting taxes for the super rich, and reducing the role of the federal government in favor of state rights, are within sight with Trump in the White House.  Populism is just another name for Republicanism under Trump.

It is also important to understand importance of Donald Trump's role as the populist barker.  Many who voted for Trump will be disappointed when they are hit with the reality of the GOP healthcare bill.  They will continue to fall for fake populism, however, because of the clever ways in which Republicans have divided Americans with low incomes.  Instead of being united against politicians who fleece them, Republicans have successfully turned groups of low income Americans against each other.  Divided they will fall and Republicanism will prevail.

Why The General Should Not Be In Charge Of Foreign Policy

Our fearless leader announced that we should not worry about foreign policy because he has turned it over to General Mattis.  Many will feel relieved that a president who refuses to read intelligence briefings is not in charge of foreign policy.  This article explains why it is harmful to put a competent and well meaning general in charge of foreign policy.  This well reasoned argument is summarized by the following quote from the article:

Once again, I respect Mattis and am glad that he’s there. But let’s not pretend that his leadership can substitute for the void in the White House, the absence of strategy, tactics and rational thought in the foreign policy apparatus in the Trump administration.
Applebaum understands how good foreign policy decisions are made and how mistakes have been made, for example in Iraq, when the Defense Department was placed in charge of the occupation.

Friday, June 23, 2017

Putin Authorized The Political Crime Of The Century And It Worked

The CIA determined that Putin had authorized the Russian attacks on the US election system.  Putin was determined to punish Hillary Clinton.  Hacking into critical email accounts and leaking information that was harmful to her campaign was useful to the Trump campaign.  Trump praised the leaks and even asked for more leaks during the election campaign.  The Russians also used the social media and fake news sites to spread information that was harmful to the Clinton campaign.

That is the first part of this story.  It is now clear that Putin authorized the attacks on our election system.  The rest of the story is about how the Obama administration responded to the Russian attacks.  For a variety of reasons, Obama acted with caution.  Among other reasons, he did not want to give the appearance that his administration was attempting to influence the election.  Key members of Congress were informed about the Russian attacks but Republicans and Democrats responded to the information in predictable fashion.  The US election system is highly decentralized.  States control the voting systems and it is further decentralized into local voting systems.  That provided some degree of protection from efforts to attack the voting system but it also made it more difficult to protect the system.  Many states resisted federal warnings about attacks because they were jealous of state authority and feared federal intervention.

The information in this article helps us to understand the risks that nations face in the era of cybersecurity threats.  It also reveals a lot about our vulnerabilities.  Trump still denies that the Russians interfered in the election despite having been fully briefed by US intelligence agencies.  Moreover,  we learn that Michael Flynn, who Trump appointed as his Director Of Intelligence, had to fired because he had discussed ending US sanctions with the Russian ambassador during the transition period.  It was not because he lied about this to to Vice President Spence;  his conversations were captured by US intelligence.

Its hard to determine with precision how the Russian attacks contributed to the election returns.  It will also be hard to determine how our political system will respond to the investigations that are still underway. 

The Republican Unaffordable Care Act

The healthcare bill passed by the Republican House was not acceptable to the Senate.  Even Donald Trump said it was too mean.  The Senate version of the bill was just released.  It is even meaner than the House bill.  The basic difference between the two Republican bills is that Senate bill gets meaner on the installment plan.  Medicaid, which pays for much of the care is turned over to the states and federal payments to the states falls over time.  The fact that $1 trillion in federal funding is eliminated in the bill makes it inevitable that healthcare becomes more unaffordable over time.

Like its House counterpart, the Senate bill would also hurt millions of non-Medicaid beneficiaries of Obamacare, those who buy insurance on federal and state marketplaces. It would greatly reduce federal subsidies that help low-income and middle-income families buy health coverage, while allowing insurers to increase deductibles, forcing people to pay more for medical services. It would let states waive rules that now require insurers to cover essential health services like maternity care, cancer treatment and mental health care, which is likely to happen because this will be the only way that states can lower premiums. In sum, it will make health insurance more expensive and less useful, to the great misfortune of the poor, elderly and sick.
 One might ask why the Republican Party would attempt to sell this plan to the public.  The answer is simple: They promised their base that they would repeal Obamacare and they feel obliged to make good on their promise.  The bill also eliminates the tax in the Affordable Care Act that only affects very high income households.  The only to pay for the tax cuts was to reduce benefits and access to healthcare for those who need it most.  Robinhood stole money from the rich to provide it to the needy.  The Republican Party prefers to take money from the needy to give it to those who do not need the money.

This editorial in the Washington Post provides a similar analysis of the Senate Bill. It exposes another of the tricks in the Republican effort to repeal Obamacare.  It avoids doing anything that affects the availability of insurance for the middle class. Many who get their information from Fox News and similar sources resent paying taxes to provide healthcare to the "wrong kind of people".  They are also information poor.  They don't realize how children with learning disabilities and the elderly depend upon Medicaid

Thursday, June 22, 2017

Creative Destruction Versus Social Destruction From Bloomberg

Michael Bloomberg is one of our successful billionaires who who cares about more than his own well being.  In this article he talks about a very important problem and offers some suggestions about how to survive creative destruction.

Creative destruction is built into capitalism.  It has many benefits, according to Bloomberg, but it has consequences that require solutions to social disruptions.  Bloomberg starts out with a good example of creative destruction in the coal industry.  We are producing about the same amount of coal today as we produced in the 1920's with 10% of the workforce required to produce that output in the 1920's.  Automation has eliminated 790,000 jobs.  That has been a disaster in the coal mining regions of America but it is an essential feature of capitalism which drives producers in the direction of efficiency and lower production costs.  The good news is that a large number of jobs have been created in producing cleaner energy.  We are left, however, with the problem of dealing with the disruptions in our coal producing regions.

One way to deal with creative destruction is for government to redistribute income to those who have lost their jobs through progressive tax policies.  Bloomberg is OK with that idea as long as the money is well spent by government.  That separates Bloomberg from most Republicans who are committed to cutting taxes for those who can afford to help out the coal miners.  They want to take an ax to government programs that redistribute income in order to provide tax cuts.  On the other hand, that leaves us with the problem of making good use of the funds provided by taxpayers.  It also fails to satisfy another problem.  Most people would rather have a job instead of collection paychecks from government.

Bloomberg did a good job of describing the problem of creative destruction.  He then turns his attention to some of the areas that need attention like healthcare and education.  The thrust of his comments in these crucial areas is to argue that each of them has flaws based upon their place in history.  Healthcare should not be dependent upon receiving benefits from employers, and education is mired in the dark ages when the school year was determined by the need for young people to work in the farms in the summer.  He also has problems with community colleges which are too expensive and leave poor people with excessive debt.

Bloomberg is a more defensible billionaire than Donald Trump and his friends.  However, he did a much better job of describing the problem of creative destruction than he did on solutions to the problems that have become highly visible.  That is because the problems are evident and the solutions are less evident.  They will require changes that are difficult to perceive and hard to manage in a divided political system.  We have president with a 36% approval rating and a Congress with an even lower approval rating.  That may be an even bigger problem than creative destruction.  The people that we elect to office are better at winning elections than they are at solving critical problems.

Wednesday, June 21, 2017

What Is The Democratic Party's Agenda?

The Democratic candidate in the Georgia election lost a tight contest in a Republican district.  The shattered hopes for Democrats in this election raised an interesting question.  What is the Democratic agenda?  The Democratic candidate in this election ran a bland campaign based on winning the Anti-Trump vote in the district.  Apparently, that was not enough.  The lack of an agenda made him vulnerable to nonsense attacks which argued that he was an "outsider".  Voters did not know what he was for.  This quote from the article frames the issue very well:

Still, it should be sobering to Democrats that a CBS News poll released Tuesday morning filled with devastatingly bad approval numbers for the Trump administration found that only 31 percent of voters thought a Democratic takeover of Congress would make their lives better.
If your opponents are unpopular enough, it’s certainly possible to win elections this way. But especially for the party that has a more difficult time inspiring its supporters to turn out to vote, that’s an ominous sign. Right now on health care and many other issues, Democrats suffer from a cacophony of white papers and a paucity of unity around any kind of vision or story they want to paint of what is wrong with America today and what is the better country they want to build for the future. And until they do, they’re going to struggle to mobilize supporters in the way they need to win tough races.
 Most of us understand that the Republican agenda is terrible for many who voted for Trump.  They won't benefit from the typical Republican agenda offered by Trump.  Drastic reductions in social welfare spending, in order to pay for tax cuts that benefit the super rich, is not what Trump's supporters need.  It may not be enough to rub their noses in their mistaken belief in Trump's "populist" agenda.  What is on offer from the Democratic Party?  The party has lots of good ideas but there is little agreement on the agenda.  The Republican Party has been winning for years with a bad economic agenda that is buffered by attacking the cultural agenda of the Democratic Party. 

It looks like there is a lot of room for progress in the US.  This study shows that the US is a second tier nation in its social progress measure.  There is more to social welfare than the size of our GDP.

Tuesday, June 20, 2017

What Are The GOP Alternatives To Trumpism?

Conservatives are not happy with Donald Trump after only 150 days as their president.  A conservative from the Bush administration restates the obvious problems with Trump's administration; he considers some of the possible solutions available to conservatives but they are all messy.  If conservatives are displeased with Trump's performance its understandable why many Americans are alarmed about eight years of destruction to our democracy.  He is not only a threat to conservatives and the Republican brand; he is has no respect for our democratic institutions.  He also diminishes US global leadership which has served a good purpose 70 years. 

There does not seem to be a realistic alternative to eight years of Trump.  The Republican Party still hopes for the potential benefits from a Republican in the White House.  That outweighs the real concerns that many Republicans share about Trump's leadership.  The only hope for Democrats is the 2018 election.  They may be in an position to reduce the damage from Trump if they can do well in the election.  However, despite public concerns about Trump, gerrymandering has made many Republican seats in the House noncompetitive. Democrats have a better chance in the Senate but it will be an uphill battle.  Moreover, that is not an alternative that appeals to moderate Republicans.  They still believe that Trump is a better choice than "socialism" from the Democratic Party.

In the last analysis, without help from Republicans,  our only hope is that Trump continues to self destruct.  He has a real talent for that.  Several of his businesses ended up in bankruptcy.  Unfortunately, that solution is not available to our government.

A Market Based Proposal For Cutting Carbon Emissions

The law of supply and demand suggests that the demand for a product falls as the price rises.  It follows that a tax on carbon would raise the price of carbon and reduce the demand.  There has been a lot of support for a carbon tax as weapon to mitigate climate change.  This proposal adds a dividend to the package.  The revenue collected from the carbon tax would not be used for any purpose by the government.  It would not be used to increase spending and it would not be used to fund tax cuts for the rich.  The dividend would be distributed equally to every household.  Low income households consume less carbon than high income households but both households would receive an equal dividend.  In a sense, high income households would pay a higher tax on carbon.

There are other features in this plan that should appeal to conservatives.  The carbon tax would increase the price of fossil fuels relative to green energy sources.  The government would not need to determine which source of green energy to subsidize. It would also accelerate the substitution of low carbon fossil fuels for less desirable fossil fuels like coal.  The government could also reduce programs that manage energy consumption if the carbon tax did its job.

This proposal was developed by an elite group of citizens who were unhappy with Trump's decision to exit the Paris accord.  It would also tax carbon products imported into the US.  In that sense, it would have an international impact on carbon emissions.  It will also be regarded as a serious proposal by many who have resisted government efforts to fight climate change.

Sunday, June 18, 2017

Political Polarization Is Closely Related To Geography In The US

The US has been experiencing a dramatic rise in political polarization in recent years.  It seems like we live in two different political universes.  Media organizations have tailored their information services to expand their share in these markets.  That may have contributed to political polarization but this study shows that our politics are uniquely distributed by geography.  Rural America is totally different from Urban America,  and US suburbs are somewhere in the middle.  Donald Trump's margin over Clinton in rural counties were much greater than other Republicans had achieved in previous elections.  Clinton defeated Trump handily in urban areas but she did not do as well as Obama had done.  The surge in Trump's rural votes would have required a similar increase in Clinton's urban vote to compensate for Trump]s rural margin.

There are also important differences within rural areas that are interesting.  It means different things to be a Republican or a Democrat in rural areas than it does outside of rural America.  Democrats feel like a minority group in rural areas.  They are also more likely to vote Republican than Democrats in Urban areas.  Its also the case that rural voters are much more pessimistic about the future than low income Americans in urban areas.  They believe that Trump is trying to help them but they don't expect that he will be able to do much about their economic fears.  Trump's policies will make things worse for them but but their low expectations set a low bar for Trump's policies.  More importantly, Trump's campaign against immigrants was his most powerful weapon in rural areas.  That was not an important issue in urban areas which are more diverse to begin with.  Rural Americans don't have much contact people who are much different than themselves and they don't want to have anything to do with ethnic or cultural diversity.

Why Donald Trump May Have Wanted To Protect Michael Flynn

There are several Trump surrogates who are under investigation in the Russia investigation.  Trump's campaign has tried to distance them from any important role in the campaign, but Trump has not said much about them.  Michael Flynn is the exception.  Trump asked the FBI director Jim Comey if he could do something to contain the Flynn investigation.  He claimed that Flynn was a good guy.  Perhaps a better reason for Trump's efforts on Flynn's behalf is that he had important contacts with Russian intelligence agencies and with cybersecurity firms that could easily have been used in Russian hacking attacks.  For example, Flynn had relationships with Kaspersky Lab which has expertise in cybersecurity as well as relationships with Russian security organizations.  Flynn also had connections with GRU which is the Russian military intelligence organization.  Nobody in the Trump campaign would have been better equipped to collude with Russia than Flynn.

Flynn argued that he cultivated his relationships with Russia during the campaign to develop Russia as an ally in US efforts to defeat Islamist militants.  Trump made the same argument.  Perhaps there were other reasons for allying with Russia that were more germane to the Trump campaign.

Trump was forced to fire Flynn soon after his election.  He claimed that it was because Flynn lied to Vice President Pence about contacts he had with the Russian ambassador.  That explanation does not pass the smell test.  Lying to Pence is not the kind of thing that would bother Donald Trump.  The more reasonable explanation is that Trump knew why Flynn may become a liability to him personally.  It took 18 days after Flynn lied to Pence for Trump to fire him.  He may have used that time to work things out with Flynn if he believed that the Flynn investigation might lead back to him. That would be a good reason for Trump to have exposed himself to risk by attempting to influence the Flynn investigation.  If there was collusion with Russia during the Trump campaign, Michael Flynn would have been at the center of it.  He was in the cybersecurity business as a consultant.  He was also connected to expertise in the US and in Russia, along with his connections to Russian intelligence agencies. Flynn offered to testify in the Russia investigation if he were granted immunity.  He must have reason for requesting immunity.  There is also a good reason why his request from immunity was not granted.  Investigators must expect that the case against Flynn will be further developed.  The more severe the charges against Flynn, the more likely he can be flipped.  That may be what keeps Trump awake at night during his Twitter splurges.

Saturday, June 17, 2017

How A New Kind Of Mass Deportation Can Save America

Donald Trump and much of his base want to deport immigrants to make "America Great Again".  This article is a parody of Trump's anti-immigration tweets.  It argues for a very different kind of deportation plan to make America Great Again in nation of immigrants. 

Trump Found A Way To Get What He Did Not Want

Trump wanted FBI director James Comey to announce that he was not under investigation.  He made a failed effort to get Comey into his camp and he fired him when his demand for loyalty was rebuffed.  That gave Comey an opportunity to reveal things to a Senate Committee that he could not have done in his capacity as the Director of the FBI.  Comey testified under oath that he was fired because Trump was unhappy with the FBI investigations that Trump calls a "witch hunt".  He, and his campaign, had done nothing wrong, but he did not want the investigation to continue so that it could prove that he and his campaign had done nothing wrong.  Trump is now blaming the Deputy Attorney General for his problems.  He hired a special counsel to take over the investigation.  The special counsel has placed Trump under investigation for obstructing justice.  Trump cannot understand how his firing of Comey, led to a special counsel who may accuse him of obstructing justice.  He does not understand the difference between running his family business and being the president of the US. He regrets his loss of freedom to fire anyone who displeases him.

Marco Rubio And Donald Trump Cut A Deal

Marco Rubio, who Donald Trump called "little Marco", during the Republican primaries when they were rivals,  responded to Trump's insult by referring to Trump's small hands.  Trump now needs Rubio on his side during the investigations that are underway.  Rubio, who is the son of Cuban immigrants, wanted Trump to give something to his Cuban immigrant base in Miami.  Trump likes nothing better than making a good deal.  He flew Rubio to Miami on Air Force One and Rubio genuflected to his majesty in his introduction of Trump to an audience of Cuban immigrants who welcomed Trump's get tough policy on Cuba.  Rubio will be nicer to Trump during his ordeal with pesky investigators, and Rubio cemented his position with his Cuban base in Miami. Personal loyalty is valuable commodity to both of them.

How Eight Republican Senators Explain Their Healthcare Bill

The Republican Senate wants to pass its healthcare bill before the July 4 recess.  A reporter asked eight Senators to describe the goals of the Senate bill and how the bill will achieve those goals.  That was a brilliant idea, but the answers he got were not very brilliant.

There was universal agreement about one thing.  They all claim that Obamacare is failing.  According to the GOP senators,  Obamacare is failing because premiums are rising.  Therefore, they are trying to cobble a plan together that will keep premiums from rising.  Its hard to understand how they can craft a bill that will keep premiums from rising while they are also cutting federal spending enough to pay for eliminating the tax on wealthy households that is part of Obamacare.

Of course, there is a way to cut federal spending, and keep premiums from rising, but they don't want to talk about that solution.  They must reduce the number of people who will have access to insurance and/or reduce the benefits that insurers can afford to pay in response to lower premiums.

It would take a genius to solve the problem that Republican senators face as they try to pass a healthcare bill that fixes the problems in Obamacare without talking about the loss of coverage or the reduction in benefits.  The eight Republican senators in this interview put their genius on full display.

John McCain probably came closer to describing the objective than anyone else.  He said that the goal was to get 51 votes in the Senate and pass the bill.  The problem according the McCain, and several others, is that there is a lot of disagreement about how that can be done.  The Republican senate has a political objective to show that it can repeal Obamacare but they can't figure out how to do the impossible without making a lot of voters unhappy.  The Senators, who think they know what they are doing,  are comfortable talking about the problems in Obamacare, which can be easily fixed, but They are unable to describe a replacement for Obamacare that provides superior coverage at lower cost.  McCain has it right.  Their goal is to get 51 votes.  They could not care less about the consequences.  The shame of the Republican Party is that only three Senators could keep the bill from passage but it would take courage to vote against the bill.  Courage is a scarce commodity in the Republican Party.

Thursday, June 15, 2017

Republican Talking Points About The Trump Investigations

The Republican Party, along with its friends at Fox News, has been using a set of talking points to trivialize government investigations of the Trump campaign and now about Trump himself.  The Washington Post published the talking points with annotations which counter them.  The talking points were in full display during the public hearings.  Each of the Republicans used one of more of the talking points.  They are all being used on Fox News, and by Trump surrogates who are interviewed by the media.  They may influence Trump supporters but they won't hold up as the investigations lead to new information that will overwhelm the talking points.

Republicans May Pave The Way To Medicare For All

President Obama preferred a single payer system to the hybrid system that depended upon subsidies to private insurers and a weak mandate to force healthy people to enter the system.  He decided to structure ACA like the conservative system, implemented in Massachusetts by Mitt Romney, because he thought that it was more doable in our political system.  This article suggests that the Republicans are so eager to repeal ACA that they will push a very unpopular bill through the Congress that they control.  The fall out from its eventual failure will increase the political conditions for a single payer system that is less complicated than ACA and easier for the public to understand.  "Medicare for all" will sound good to a public that is familiar with Medicare.  The hybrid system being developed by the Senate will be forced to cut benefits and enrollments because it will cut funding by $600 billion in order to eliminate the tax built into ACA to pay for its subsidies. The GOP seems willing to risk its future in order to cut taxes for wealthy Americans.

How MNC Profit Shifting Understates US Productivity Growth

Productivity growth in the US has been slowing down over the last decade.  Since output per person determines the rate of GDP growth, estimates of GDP growth have also been downward shifted.  This study shows that profit shifting by multinational corporations has contributed to the productivity slowdown, and ultimately to GDP growth rate in the US.

MNC's have an incentive to shift their profits from the US to affiliates in lower tax nations.  They do that in many ways.  Since intellectual capital is highly mobile they shift their intangible intellectual capital to low wage countries.  They retain most of the return on intellectual capital in the low tax nations.  That systematically understates US GDP and US productivity.  That is especially evident in capital intensive industries which invest heavily in intellectual capital.  Foreign MNC's with affiliates in the US also shift their earnings from the US to low tax nations for a similar reason.  That also reduces US GDP and US productivity.  This may explain why the rapid expansion of technology in the US does not appear to have had a positive effect on productivity growth.  Some argue that it takes time to deploy the technology efficiently but it may also be determined by MNC profit shifting to low tax nations.

Wednesday, June 14, 2017

Thomas Piketty On Trumpism And Similar Trends In Europe

Thomas Piketty, whose book, Capital in the 21st Century, was one of the most popular books ever written on economics, describes his concerns about Trumpism and recent events in Europe. He understands that Trump is a unique personality but he also understands American history. Trump's policy proposals are consistent with a trend that began with Reagan in the 1980's.  Reagan made the tax system much less progressive and he tainted social welfare programs with racism with his famous description of the "welfare queen" who drove a Cadillac.  Richard Nixon's "southern strategy" was also based upon racism.  Lyndon Johnson's civil rights bill and his "Great Society" programs were skillfully exploited by Nixon.  The Democratic South was transformed into the Republican South.  The only thing new about Trumpism is that he added illegal Mexican's and concerns about Islamic terrorism to his bag of tricks.  He also exploited concerns about globalization but Piketty argues that Trumpism can't be explained by globalization.  Trump is merely an extension of Reagan and Nixon with a few frills.

The main question remains: how does a programme which is so clearly pro-rich and anti-social succeed in appealing to a majority of Americans as it did in 1980 and again in 2016? The classical answer is that globalisation and cut-throat competition between countries leads to the reign of each man for himself. But that is not sufficient: we have to add the skill of the Republicans in using nationalist rhetoric, in cultivating a degree of anti-intellectualism and, above all, in dividing the working classes by exacerbating ethnic, cultural and religious divisions.
In the meantime, the Democrat electorate focussed increasingly on the most highly educated and the minorities, and in the end, in some ways resembled the Republican electorate at the end of the 19th century (upscale Whites and Blacks emancipated), as if the wheel had turned full circle and the Roosevelt coalition uniting the working classes over and above racial differences had ultimately only been a parenthesis.
Let’s hope that Europe, which in some ways is threatened by a similar development with the working classes having greater faith for their defence in the anti-immigrant forces, than in those who describe themselves as progressive – will be capable of learning the lessons of history. And that the inevitable social failure of Trumpism will not lead our “Donald” into a headlong nationalist and military rush, as it has done others before him

Tuesday, June 13, 2017

You Won't Like What We Learn About America From Google

A Harvard PhD student wrote a book about what he learned by studying searches on Google Trends.  He argues that Google searches tell us more about what people really worry about than surveys or focus groups.  In the privacy of their computer they ask Google for information that they would not reveal to friends or family.  His research told him that Trump would win the election because the quantity of searches on race and Islam tracked strongly with  Trump's progress in the primaries and afterwards.  They were particularly strong in rust belt states that went to Trump in the general election.  He concluded that our society is more racist and distrustful of minorities that would be picked up in surveys.

One of the trends that concerns him is the huge increase in questions about abortion. Those questions tend to be more frequent in states that have made it more difficult to have an abortion.  Many women must be seeking other ways to end a pregnancy. Americans are also very concerned about their appearance.  One of the most popular searches is about ways to deal with obesity.  Moreover, men tend to share the same concerns about their weight as women. 

Republican's "Secret" Plan To End Medicaid On Installment Plan

A handful of Republican senators have crafted an Obamacare repeal plan that will win every GOP vote in the senate which will be enough to pass the bill.  It has also been set up so that it cannot be filibustered by Democrats in the senate.  Since Republicans did not want to face constituents who have lost their coverage under the new bill, they have crafted a plan that cuts Medicaid over a seven year period.  It is death on an installment plan for millions of Americans.  There are two reasons for the cuts in Medicaid.  Republicans have never liked Medicaid, so killing it on the installment plan enables them to kill Medicaid without making it visible.  The other reason for killing Medicaid in the health bill is that it is funded in Obamacare by a tax on wealthy Americans.  The new GOP plan was developed so that they could pay for the tax cuts  by spending less on Medicaid.  Many of them do not really like Trump, but they can only get this bill passed, without a presidential veto, with a Republican in the White House. 

Why Trump's Budget May Not Be Dead

I posted an article below which argued that Trump's budget proposal was dead.  That argument was based upon the problems that Trump faces from a variety of sources.  It was also considered dead because of it's sheer savagery.  Trump's plan would cut federal spending by $4.3 trillion over 10 years. Around 60% of the cuts would reduce spending on programs that affect people with low to moderate incomes. 

There are many reasons why Trump's budget may be passed by Congress.  In the first place, Republicans hate Medicaid and SNAP which provides food stamps for the poor.  Trump's budget cuts those programs considerably.  Secondarily, the GOP seems ready to approve a healthcare bill that is similar to the House bill that would reduce coverage for millions of Americans.  The senate bill makes the cuts more gradual.  It also requires states to take more responsibility for Medicaid which cuts the federal contribution to Medicaid dramatically.  The states would also assume more financial responsibility for SNAP.

Since Trump is in the White House,  Republicans do not have to worry about a presidential veto.  They are also likely to structure the bills so that they can be passed with a simple majority.  Democrats in the senate would not be able to use the filibuster to kill the bills.

Despite all of the problems in the White House, Republicans control the House and the Senate.  They have an opportunity to kill programs they have always hated.  They are likely to take advantage of this opportunity.  Apparently, it does not matter that 59% of Americans disapprove of Trump.  We have a one party government at present and the GOP will take advantage of that situation.

Monday, June 12, 2017

New York Attorney General Investigating Eric Trump Foundation

New York's Attorney General sued Donald Trump's for-profit college for fraud.  Trump settled the suit for $25 million after boasting that he would not settle the suit.  An article in Forbes about the Eric Trump Foundation has led to an investigation into its operation as charity.  It started as a fund raiser for St.Jude's hospital which provides care to children with cancer.  It held fundraisers at one the Trump golf courses.  The foundation told donors the use of the Trump golf course was free.  Trump was livid when he learned that his son's charity was not billed for the services of his golf course.  He demanded payment for the services, which may have been excessive, and the board of the Eric Trump Foundation was stacked with members of the Trump Organization.  The expenses of the foundation increased rapidly after the board was restructured.  Most of the additional expenses ended up in the Trump Organization.

The Donald Trump Foundation, which was recently closed, was also involved in questionable transactions with the Eric Trump Foundation.  Funds from the Trump Foundation found their way to Eric Trump Foundation which began to provide funds to charitable causes other than St Judes.  The new charities had relationships with the Trump Organization.  They held fund raisers at Trump golf courses.  The Trump Foundation is still under investigation for misuse of funds.

The Attorney's general for DC and Maryland have just filed suit against the Trump Organization for a failure to separate Trump's business interests from his position as the US President.  Its hard to see how Trump can avoid being bogged down in legal issues that continue to multiply against him.  He also just lost another appeal against his travel ban that singled out Muslim nations.  Time Magazine just reported that Trump's disapproval rating has risen to 59%.  Only 36% of voters approve of his performance as president.  That, of course, represents his base that he uses to hold Republican's in Congress hostage to him.  The Republican Party cannot survive without Trump's base.

Trump's Legal Team Is As Ignorant As Trump Is About HIs Job

Trump's legal team has no experience in government.  His legal team is the one that he used to litigate his legal problems when he ran his family business.  His legal team displayed its ignorance by tweeting that federal attorney's and FBI personnel work for the president.  That is why he can demand loyalty from them and fire those who he does not like.  The president can fire them as they claim.  On the other hand, they take an oath to support the Constitution and the separation of power in the Constitution that was established to prevent the president from using federal employees for his own personal advantage.  They are public employees who do not work for the president as his employees did in the Trump Organization.

Trump made a similar mistake when he ran a public corporation.  In effect, he worked for his shareholders but he ran his public company exclusively for his own purposes.  The company failed and his shareholders lost their investment.  On the other hand, Trump paid himself well as the CEO.  He made millions while his shareholders lost their investment.  The directors that they let him appoint did not serve the shareholders very well.  We also elected a president who cares little about the people who elected him to office.

Trump's Economic Agenda Is Dead

I just returned from trip which kept me away from the Internet.  Its hard to add much new information to the collapse of the Trump administration but we can continue to learn from the president who never stops giving us new reasons for concern.  Donald Trump was given an opportunity much like the opportunity that Reagan exploited to his advantage.  Trump wasted that opportunity.  In particular, he failed to use the advantage that he had with a Republican congress to move the economy forward.  Its unlikely that he will be able to get anything done domestically and his foreign policy mistakes are of his own making.  He has not learned how to be a president and he seems incapable of learning how to stop running the presidency like he ran his family business.  Some of the consequences of his failures are described very well.  His opportunity to be another Reagan has been wasted.  The only remaining questions about his administration have to do with the nature of his death spiral.

There is a good following article about his failures during his trip to the Mid-East. He created an unwelcome conflict that was inspired by his poor understanding of the politics in the Mid-East which led to rookie mistakes.  He makes no efforts to use the resources available to him to make informed decisions. 

Wednesday, June 7, 2017

Kansas Legislature Overturn's Brownback's Tax Cut Theory

Governor Brownback sold the state legislature on one of conservatism's fairy tales.  He convinced them to cut state taxes in order to stimulate economic growth.  That experiment has been ongoing for six years.  The tax cuts did not work as they were supposed to work according to the fairy tale.  State deficits grew, and funding for important state programs, like education, had to be cut.  After many years of this game the Kansas public has asked state legislators to end the game.  They voted to raise taxes in order to fund critical programs.  Brownback was not ready to give up on his fairy tale.  He vetoed the tax increase.  The legislature then overturned Brownback's veto.  Game over for Brownback.  The legislature responded to citizen discontent with Brownback's experiment.  It also was getting tired of being laughed at by critics who have been using Kansas as another example of the failed strategy of cutting taxes in order to increase state revenue.  The Trump administration might learn something from the failed experiment in Kansas.  Trump has adopted a similar strategy.  Anyone who thinks that Trump might learn anything from reality is sadly mistaken.  Fairy tales are hard to give up.  "Alternative facts" will be invented to preserve it.

What Happens After Comey Testifies?

Trump will deny that he did what Comey said he did.  Trump's surrogates will also try to change the subject during Comey's testimony.  They try to pin other things that Comey did, or did not do, in order to discredit his testimony.  It then becomes Trump's word versus Comey's word.  That will not work very well.  Comey's testimony will be supported by his memoranda from his meetings with Trump.  FBI agent memoranda from meetings with suspects is usually regarded as credible evidence by prosecutors and courts.  If Coats also confirms that Trump asked him to influence Comey's investigation of Flynn, Trump's defense falls apart.  It would be two trusted officials versus The Donald who has repeatedly demonstrated a strong indifference to the truth.

If the public witnesses the testimony, and reacts they way most normal people would react, it will put pressure on Republican leaders to abandon its failed president.  They will have to decide what is better for their Party, and for their reelection prospects.  Self interest works better than an appeal to the public interest for most Republicans.  Trump will have made the same mistake that sunk Nixon.  It would have been difficult to prove collusion between Trump's campaign and Russian agents.  Trump's crude attempt to influence a FBI investigation will seem like obstruction of justice to the public.  That is what sunk Nixon.  His efforts to cover up his crime were exposed to the public and the leaders of his Party told him that they could no longer support him.

Tuesday, June 6, 2017

Republican Congress And Our Chief Tweeter Do Not Have A Platform

The Republican Party spent eight years opposing everything President Obama did.  Now they control Congress and the White House but they are at ground zero.  They have no replacement plan for Obamacare; they cannot agree on tax policy; they reject the Paris accord; they have no infrastructure plan, and they do not agree on a budget plan for 2018.  They only thing that they agreed about for eight years was that anything Obama did was bad.  They look longingly back at Ronald Reagan but we can't go back to the 1980's.  Instead of a platform they make promises without a way to fulfill the promises they have made.  Their false promises extend to foreign policy as well.  They are against most of our trade polices, which they promise to renegotiate, and they have questions about most of our international alliances.  The following quote sums things up very well:

Trump’s most brazen bluff, of course, dates back two years, when he bragged about his “secret” plan to defeat the Islamic State, a plan so potent and powerful that it would reveal he knew more than the generals.
“All I can tell you is that it is a foolproof way of winning, and I’m not talking about what some people would say, but it is a foolproof way of winning the war with ISIS,” he promised, declaring that his plan would achieve “total victory.” Secrecy was paramount, he insisted, not only because he didn’t want the Islamic State to find out but also because he didn’t want his political rivals to steal his brilliant scheme and claim credit. (America First, indeed.)
Two years later, there’s still no “foolproof” new plan, no “total victory” — on the Islamic State, health care, taxes, trade, infrastructure or any other major issue. Yet we keep being told a game-changing policy package is but a few weeks away.
This bluffing has gone on long enough. Maybe it’s time for Republicans to show us their cards.

Monday, June 5, 2017

Trump's Twitter War Angers Brits

Trump showed his concern for the victims of the London terror attack by ignoring the victims.  Instead he chose to take advantage of the terror attack by pushing his own agenda with his Twitter account.  This is the way in which he conducts foreign policy.  He can ignore intelligence briefs and avoid reading briefs from his advisors.  Its all about where he is at any moment in time.  It was not very popular in the UK.  Prime Minister May and others turned their noses up after reading tweets.

Social Media Election In UK

There are restrictions on the traditional media in the UK.  This article describes the new normal in the UK.  The social media have taken over.  They are better at targeting ads to their target supporters.

How Can We Counter America's First Post-Rational President?

Larry Summers believed that senior members of Trump's foreign policy team would prevent him from doing stupid things.  The statements made by two of Trump's senior advisors following Trump's decision to exit the Paris accord have convinced him otherwise.  They have defined Trump's Post-Rational world which defines his presidency. 

Until last week, they had a reasonable argument. No longer. We may have our first post-rational president. Mr Trump has rejected the view of modern science on global climate change, has embraced economic forecasts and trade theories outside the range of reputable opinion, and relied on the idea of alternative facts rather than evidence-based truth.

They advance a theory of international relations not unlike the one that animated the British and French at Versailles. On this view, the objective of international negotiation is not to establish a stable peaceful system or to seek co-operation or to advance universal values through compromise but to strike better deals in “an arena where nations, non-governmental organizations, and businesses compete for advantage.”
Summers applauds the CEO's who resigned from Trump's economic advisor group after his Paris decision.  He asks that others follow suit.  It is up to the adults in our society to undo that damage that our post-rational president is capable of.  CEO's need a more rational world to build the long range plans than Trump provides.  He changes his positions regularly depending on what he observes on cable news shows.

Sunday, June 4, 2017

Larry Summers Still Worries About Secular Stagnation

Four years ago Larry Summers argued that the economy was suffering from secular stagnation.  That is, a relatively long period of slow economic growth.  He doubles down on that argument today.  We are now in period of full employment, with stable inflation, but economic growth remains very low.  Low interest rates, which ordinarily stimulate growth, have not done much to increase the growth rate.  That, of course, defines secular stagnation.  The neutral rate of interest remains low but economic growth has stagnated.  Since interest rates no longer work to grow the economy Summers argues for an expansion of fiscal policy to increase the growth rate.  That is the best way to deal with secular stagnation in the industrialized world according to Summers.  Some economists criticize him for focusing on the demand side of the equation instead of a supply side shock to the economy.  Summers argues that a supply side shock would raise prices while demand shocks lower prices.  Low inflation rates are more consistent with a demand shock.

Summers supports Trump's proposal to stimulate the economy with infrastructure investments.  However, he argues that Trump has taken the wrong approach in his proposed policies which place the emphasis on private investments in infrastructure.

How Republican Leaders Became Climate Change Skeptics

Only 17% of Republicans have serious concern about climate change.  Republicans running for office don't have to worry about voter reaction to climate change skepticism.  On the other hand, they have to worry about the Koch Brothers, and their Americans for Property organization, which funds political campaigns and pays think tanks to dispute the claims of climate scientists.  Donald Trump put climate change skeptics on his transition team and he put an attorney general who sued the EPA 18 times in charge of the EPA.  This article describes the evolution of climate change skepticism in the Republican Party.  The process was aided and abetted by the Citizens United decision by the Supreme Court which enabled unlimited funding of political campaigns by corporations and activists like the Koch Brothers.  The Republican Party has become the "Preservation of the fossil fuel industry party".  Paul Ryan who is the GOP leader of the House, and the Senate Majority Leader Mitch McConnell,  supported Trump's decision to exit the Paris accord.

Saturday, June 3, 2017

Letter From 22 Republican Senators Telling Trump Why He Should Exit Paris Agreement

This is a copy of the letter sent to Trump by Republicans in the Senate who told him that remaining in the Paris agreement would make it more difficult for the administration to roll back regulations on US power plants that are supported by environmentalists.  Trump did not act alone when he made his decision about the Paris agreement.  Republicans in the Senate, whose campaigns are extensively funded by the energy industry, helped him to make his decision.  Our problems in the US are not totally related to our child president.  As long as we continue to elect Republicans to Congress our problems will continue.  

Mike Pence Mimics Trump's Rationale For Exiting Paris Accord

This post contains a one minute video clip of Trump's Vice President praising his decision on Fox News.  Trump selected Pence as his running mate because of his reputation among evangelicals and far right conservatives during the Republican primaries.  Pence was his defense against "Lying Ted Cruz" who based his campaign on securing the far right conservative base.  Now that Pence is our Vice President his job is to help Trump hang on to that base.  His defense of Trump's decision to exit the Paris Accord shows that he still has that role in the Trump administration.  Pence argues that the Paris Accord is part of global liberal conspiracy that will destroy the US economy.  He understands that his base hates liberals as well as anything suggesting global conspiracies. The science behind global warming is irrelevant. It is sufficient to give it a liberal label.  Of course, Fox News provides the best platform to reach that base.

Pence echoes much of what Trump said about the Paris Accord but he is much slicker.  He actually connects sentences together in a much more coherent fashion.  He seems to relish that job as Trump's Vice President.

Friday, June 2, 2017

Cities, States, University Presidents and CEO's Will Assume Climate Leadership

The White House has turned into a cesspool; it provides no positive leadership on any issue.  Michael Bloomberg, the billionaire former Mayor of NYC, has assumed a leadership role on climate policy that was vacated by our immoral and brainless president.  He is forming a coalition of forward looking leaders who will fill the vacuum in the White House and in the Republican Party.  Much of the work that needs to be done can happen outside of the cesspool in the White House.

Why Romney Republicans May Vote Democratic

Jenifer Rubin loved the Pre-Trump Republican Party.  She argues that Trump, and his followers in the GOP,  have deserted the GOP.  She explained why the right kind of Democrats might be able to win the votes from Republicans who detest Trump and his ilk.  If they could win Rubin's vote that would be a big step forward.  She has no desire participate in a Party that is dependent upon people that pay any attention to Sean Hannity, Rush Limbaugh and and the cognitively challenged.

Trump Leaves Paris Accord In Order To Make America Great Again

This is a transcript of Trump' announcement that the US would exit the Paris Accord.  He was introduced by his Vice President who continues to play the role of his cheerleader in chief.  His speech is full of misinformation about global warming and the cost of mitigation.  However, it is  really about Trump's efforts to hold on to his base.  He targeted voters in the rust belt states that handed him the election.  He understands that support from his base is his greatest asset.  Republicans who don't go along with his policies will have to deal with the wrath of his political base.  In a sense, his announcement was more like one of his campaign rallies than anything else.  He prefers campaigning to his adoring base to running the country.  He will "Make America Great Again"  by adopting an "America First" platform.  He also tells his base that he is the "Great Negotiator" he may revisit his decision by renegotiating a new deal.  He argues that the existing agreement favors other nations who intend to take advantage of US generosity.  He would only negotiate a deal that gives the US an advantage.  As our president he will represent Pittsburgh rather than Paris.  What he doesn't say is that Pittsburgh gave 80% of its votes to Clinton and that it has become a great city again by building its economy around the knowledge industries.  It is also a city in which the air is fit to breath again.

David Brooks takes a different slant against Trump's decision.  He argues that Trump's world, and that of two of his top advisors, is a world in which morality does not exist.

In the essay, McMaster and Cohn make explicit the great act of moral decoupling woven through this presidency. In this worldview, morality has nothing to do with anything. Altruism, trust, cooperation and virtue are unaffordable luxuries in the struggle of all against all. Everything is about self-interest.
We’ve seen this philosophy before, of course. Powerful, selfish people have always adopted this dirty-minded realism to justify their own selfishness. The problem is that this philosophy is based on an error about human beings and it leads to self-destructive behavior in all cases.
Of course Trump's world, and that of many Republicans, is world in which self interest is central.  The Freedom Caucus in the Republican Party holds that the economy should be driven by self interest and the forces of the invisible hand of the market system.  Government efforts to mitigate the destructive aspects of our high carbon economy represent an unholy violation of free market ethics.

This NYT editorial takes the position that Trump has signaled to the rest of the world that he does not believe in science; he prefers a world of "alternative facts" in which his views are supreme.

Trump clings to the same false narrative that congressional Republicans have been peddling for years and that Mr. Trump’s minions, like Mr. Pruitt at the E.P.A. and Ryan Zinke at the Interior Department, are peddling now (Mr. Pruitt to the coal miners, Mr. Zinke to Alaskans) — that environmental regulations are job killers, that efforts to curb carbon dioxide emissions will hurt the economy, that the way forward lies in fossil fuels, in digging still more coal and punching still more holes in the ground in the search for more oil.
Trump also ignores another reality.  Around 70% of Americans are concerned about climate change and they favor government efforts to mitigate its affects on our planet.  That is a telling statistic.  Trump's base represents the 30% of Americans who are largely ignorant of climate change and the details of the Paris Accord.  Republicans cannot win elections without that base of poorly informed citizens.  Our electoral system has become hostage to the lowest common denominator in America.  Trump represents ignorance and the profound danger of demagoguery.  This is exactly what worried our founders.  They understood the risks associated with democracy.  They set up a system to counter those risks which has worked well over the years.  Changes in our communication systems, and in the financing of elections,  represent a peril that our founders did not anticipate. Donald Trump is the consequence of those changes in our system.

Thursday, June 1, 2017

Manufacturing Was Not The Reason Why Trump Won

This study of manufacturing counties showed the election was not won by Trump's appeals to voters in manufacturing counties.  Trump won in counties that were predominantly white largely because Democrats failed to turn out.  Trump lost in more diverse manufacturing counties because Republicans did not turn out.  The paragraph below argues that Trump did not win manufacturing votes.  Clinton did not turn out the Democratic vote.

When other factors are eliminated, the data show that the rise in the Republican share of votes in white manufacturing counties was largely due to a drop in Democratic votes; while the rise in the Democratic share in non-white manufacturing counties was driven by a relatively higher drop in Republican votes.  In addition, on average across counties, as compared with 2012, relatively low voting rates among Democratic voters was a bigger contributor to the results than high voting rates among Republicans. Put differently, Trump did not win the white working class, Clinton lost it.