Thursday, August 31, 2017

America's Most Valuable Export Is Intangible And At Risk

A prominent economist reminds us about our most valuable export.  We export political stability and the rule of law by being a beacon to the rest of the world.  That gives us a quasi-monopoly on the production of safe assets.  The US treasury can sell bonds at extremely low interest rates because they are regarded as a safe asset.  The demand for safe assets is very high, and the US is has become a haven for safe assets that are demanded by central banks and global investors.  That has been called an "exorbitant privilege" for a good reason.  It can be a temptation that encourages the government to spend more than it raises in taxes.  Therefore, we must manage our fiscal policies with care in order to maintain our "exorbitant privilege".  We must also maintain our political stability and respect for the rule of law.  The direction of our fiscal policy is uncertain and at risk and our president shows little respect for the rule of law.  His political strategy is also based upon dividing the country.

Wednesday, August 30, 2017

Trump Plans To Sell Tax Cuts For The Rich To His Populst Base

Trump will give a speech today that he will sell to his base the same way Republicans have sold their tax cuts for the rich to their uniformed base.  Its the same old version of trickle down economics.  Cutting taxes for corporations will encourage them to hire more workers in the US.  We can also cut the tax rate without increasing the budget deficit because the tax base will expand in response to the tax cuts.  The plan will throw a few crumbs to the middle class so that Trump can argue that everyone benefits from the plan.  His base will welcome the crumbs because they have no idea about the distribution of the tax cuts.  Trump the huckster can do this with the conviction of a snake oil peddler.  His base has believed in this magic since Reagan.

Cutting The Corporate Tax Rate Will Not Create Jobs

The current tax plan proposal includes cutting the corporate tax rate on profits from 35% to 20%.  Trump wants the tax rate cut even further to 15%.  The rationale for the tax cuts is that it will create jobs.  The CEO of AT&T made that argument in a recent speech to his employees and told the them to send supporting letters to Congress.  The CEO lied about its tax rate and job creation.

*  AT&T's effective tax rates after taking advantage of deductions was only 8% 2008-2015 
*  During that period with an effective rate of 8% AT&T reduced its labor force by 80,000
*  AT&T used $34 billion of its profits to buyback its own stock instead of investing in capital
*  Much of the CEO's compensation is in the form of stock options which benefit from buyback

AT&T was not the exception. 92 corporations with profits 2008- 2015 paid less that 20% effective tax rate:

* The median job growth in the 92 companies was -1% compared with median of rate of 6% by companies that paid more than 20% tax rate
*  The 92 companies with tax rate below 20% cut 483,000 jobs during that period

Don't pay any attention to arguments about the 35% tax rate in the US.  The effective tax rate is well below the top rate.  Some corporations, like GE, have not paid any taxes for several years because they take advantage of deductions.  More importantly, it is a myth that cuts to the corporate tax rate will create jobs.  It may increase profits for some firms but they may not invest those those profits in new capital or create new jobs.  Investments in new capital may increase productivity and reduce job growth.  Moreover, the primary motivation for new investments has little to do with the tax rate.  It is all about the market opportunity provided by the investment.

Tuesday, August 29, 2017

David Brooks Is Not Happy About The Division Within The GOP

David Brooks knows the Republican Party very well.  He describes how Donald Trump has divided the party and he describes the likely consequences.  The party is divided between Republicans whose loyalty to the party is based upon white identity and more traditional conservatives.  He argues that many of his friends are traditional conservatives who do not want to belong to a party with a large base of white identity members.  Friendships have been destroyed between members who are on opposite sides of that division.  Brooks also argues that Donald Trump will continue to do what he does well.  He will stoke the flames of white identity that connects that base to him personally.  That will encourage traditional conservatives to look for a new home.  It will not be good for our nation either.  Trump will encourage his base to be more aggressive and that will enrage others to respond with aggression.  We are only witnessing the beginning of this process of division within the GOP and our nation.   We are even seeing that division within Trump's cabinet and in Congress.  We can live with a divided Republican Party.  It will be more difficult to govern a more divided nation.  Hopefully,  enough Republicans in Congress will be encouraged to get rid of the maestro who is fanning the flames that divide the party and our nation.  If they continue to support Trump the party will continue to unravel  and Trump's authority will grow rapidly enough to make Congress less relevant versus a more powerful president.

The Goldman Sachs Bankers Selling Trump's Tax Overhaul

Not too long ago, Wall Street bankers were worried about federal budget deficits and the growing level of government debt.  The world was going to come to an end unless the government cut entitlement spending and took actions to reduce the debt to GDP ratio.  That tune has predictably changed with Trump in the White House. 

Donald Trump needs a legislative victory and he has a Republican Congress.  Republicans worry a lot about budget deficits when a Democrat is in the White House.  They seem to worry less about budget deficits when a Republican is in the White House.  The bankers heading up Trump's tax overhaul team, which they call tax reform to give it a positive spin,  have been working with Congress to make steep cuts to corporate taxes among others.  The problem with tax cuts is that they reduce federal tax revenue.  That forces the government to cut spending to avoid budget deficits which increase the debt to GDP ratio.  The process then becomes difficult for a variety of reasons.  One way to pay for the tax cuts is to eliminate some of the deductions that are used to reduce taxable income.  As one might imagine that becomes a questions of  "whose ox do you want to gore".  The other way is to reduce spending but we have a president who wants to increase military spending  and build a $20 billion wall between the US and Mexico.  Its also the case that tax cuts and budget deficits tend increase the economic growth rate.  Consumers have more money to spend and the government is borrowing in order to increase its spending.

The other problem with budget deficits, and the expansion of government debt,  is that Senate Democrats can use the filibuster to block a tax bill if it increases the level of government debt over a ten year period.  In order to pass a tax bill with a simple majority, without the threat of a filibuster,  the tax bill must avoid an increase in government debt at the end of ten years.  That means that some the tax cuts must be temporary or some magic must used to argue that the tax cuts will expand the economy enough to compensate for lower tax rates.  Consequently, a difficult process becomes even more difficult.  This would be fun to watch if it were not so serious.  Government is essentially about how much the government raises from taxes and where it comes from.  It is also about what the government spends it money on.

Monday, August 28, 2017

What Is The Democratic Economic Message For Trump Voters?

Steve Bannon said that Trump won the election because he made a promise to address the economic concerns of many Americans.  He claimed that Democrats will continue to lose elections if they stick to identity politics as Hillary Clinton did in the last election.  Like most of my friends, I support Clinton's message of inclusiveness.  However, despite a 4.3% unemployment rate, many American's are having difficulty paying their bills, which include lots of interest payments to their creditors, and they are uncertain about their economic future.  FDR provided the economic message that Americans wanted to hear during the Great Depression.  I agree with this article.  The Democratic economic message is hard to discern.  It can't be series of policy statements either.  It has to have broader message which provides a framework for the policy proposals.  Clinton offered a number of policy proposals but they fell on deaf ears. 

Trump's Secretary Of State's Comments On Trump's Values

Rex Tillerson responded to a question about the values implied by Trump's comments on Charlotteville,  in an interesting fashion.  He said that he does not share those values, and they are not the values of the State Department that he manages.  Apparently, he feels that he can do his job without interference from a President whose values he does not share.  Trump's chief economic adviser has a similar problem.  He wrote a resignation letter after Trump's comments following Charlotteville, but he decided to stay on board in order to protect our national economic interests. 

What Does Trump Really Want?

This article, written by a Republican, refers to Trump as our "child King".  He does not believe that Trump is fit to be our president and he explored ways in which the Republican Party can deal with our child king.  Our child king is not only a threat to the Republican brand, he is a threat to our system of government and to our position in the world.  Trump really wants to run our country the way that he runs his business in which he is essentially a sole proprietor.  He is attacking all of the institutions that limit his authority in order to realize that objective.

Trump derives his power from several sources.  A substantial portion of the Republican base support his presidency.  For example, only 28% of Americans approved of his response to the Charlotteville protest.  On the other hand, 68% of Republicans approved of his response.  Trump's position on the protest was nearly identical to the position taken by Fox News which is the number one source of information for Trump's base.  Talk radio and alt-right news organizations are also aligned with Trump.  That is real power, and it empowers Trump's attacks on Republicans in Congress who are not totally loyal to him and to his interests.  Republicans in Congress are not just afraid of being personally attacked, they understand that Trump will go along with most of the policy issues that they support.  That gives them an incentive to go along with their Republican president despite their concerns.  The bottom line is that the Republican Congress will only watch why Trump makes them less relevant in containing his power grab.

Trump also has contempt for the judicial system that has the potential to limit his authority.  His recent pardon of Sheriff Joe, who was convicted of crime for abusing the power of his office, had two objectives.  It was a gift to his base who approved of Sheriff Joe, and it will encourage other government officials to violate laws that are not supported by the president.  That is only Trump's most recent attack on the independence of our judicial system and the rule of law.

Our free press is another of our key institutions, protected by the Constitution, in order to protect our democracy from a tyrant.  President's have always had issues with the media when they are the subject of criticism.  Unlike Trump, who has told his base not to pay any attention to our major sources of news,  no presidents in our recent history have have gone as far as Trump has to discredit the free press.  Many in his base believe Trump when he claims that they provide "fake news".  The only credible news sources  for them are Trump's twitter feed, Fox News and right wing talk radio.

American Style Facism

Paul Krugman puts it in a nutshell.  He also raises the most important question.  That is will Trump's collaborators let him complete the takeover of their political party.  David Brooks, who has been a loyal Republican opinion leader for most of his career, raised the same question on the PBS news hour last Friday.  He said that most of his Republican friends don't want to be members of a political party that has the same values and disrespect for our democratic system as Donald Trump.  Some of them may support Trump because he will sign a Republican tax bill that is good for them.  That leaves a large number of Republicans with a tough choice.  Will they remain in a political party led by Donald Trump/

Thursday, August 24, 2017

White Identity And Support For Donald Trump

White supremacists are at one extreme of white identity.  Social scientists developed a measure of white identity and they found that support for Donald Trump is strongly correlated with the degree of white identity.  His support ranges from white supremacists at the high end of the scale to a much larger group of Americans with moderate scores on the white identity scale.  White identity scores are also correlated with other factors such as immigration and political party affiliation.  It is much stronger among registered Republicans.  That process began with Richard Nixon's Southern Strategy which capitalized on Lyndon Johnson's civil rights legislation.  Donald Trump was much more explicit about exploiting white identity than his predecessors in the Republican Party.  White identity is at the core of his political base. Trump understands its importance and he knows how to take advantage of it.  He is the most effective demagogue in our recent history.

Donald Trump does not seem to have any clear vision of governance.  His presidency is all about maintaining his political base.  He has attacked Republican leaders in Congress but not about policy issues.  They have not provided him with the legislative victories that he needs to maintain his image as a powerful leader with a winning record.  He also expects them to put an end to the Russian investigations.  He seems to believe that he can secure his position within his base by holding campaign rallies and force Republican leaders to do whatever he wants.  He is more powerful than Congress and they should do his bidding.

Wednesday, August 23, 2017

A Weak Defense Of Charter Schools

Charter schools are losing public support.  The editors of Bloomberg made a weak defense of them.
Some charter schools are performing better than some public schools, especially in urban areas with underperforming public schools.  Some are not doing better.  Especially, for -profit charter schools that are favored by Trump's Secretary of Education.

What is ridiculous about this defense is that it is meaningless to point out that some have been successful and that the primary opposition comes from teacher unions.  There is no magic recipe for charter schools that succeed.  Nor is there an explanation for charters that have failed.  We can say the same thing about public schools.  Some do very well and other do not.  When we try to understand the difference between successful public schools and low performing schools there is no clear explanation.  Its hard to separate what is delivered by the teachers and the many social factors which are at work in particular schools.  One of the factors that have contributed to the success of some charter schools is that parents are given the opportunity to select a charter school for their children.  Highly motivated parents are a contributing factor to success in any school.

The bottom line is that it is pointless to talk about the advantages of charter schools or the failures of some public schools.  Neither of them are well defined.  Is there any reason to expect that charter schools will provide superior administration or superior teachers than public schools at the same or less expense?  Some charter schools attract motivated teachers but the turnover is very high because the work is hard and they are not paid very well.  The same criticism can be made of charter school administrators.  Why should they be able to attract and retain top performers?  There is no discussion about these important variables.  The implication is there is a systemic failure in some public schools that is only explained by the fact that they are bound by rules that may not apply to charters, and that they are stuck with poor performing teachers that have been awarded tenure and are protected by unions.  That leaves us with no explanation for the success of high performing public schools.  I normally do not read any articles about the pros and cons of public and non-public schools in the press.  There is little helpful detail and a lot of garbage.  Its a lot easier to explain why Alabama and Ohio State have good football teams.  They have highly paid coaches who are also good recruiters.  Teams with excellent coaches and top recruits are bound to be successful.  Its also easy to keep score of the performance of their teams.  We don't know why some charters succeed and others fail.  We also don't have a real good way to measure their results.

Trump's Imitation Of A Football Coach Divides His Team And Our Nation

On Monday Donald Trump made a speech, which may have been designed to change the subject from his speech about events in Charlotteville, to announce that he was sending 5,000 more troops to Afghanistan.  He promised his fans that he would provide them with a victory.  His fans probably do not know that we had 100,000 more troops in Afghanistan, before they were withdrawn, and that was not enough to declare a victory over the Taliban.  His Secretary of State knows that the additional troops will not defeat the Taliban.  He said that they would prevent the Taliban from winning.  It was a warning to the Taliban that a victory was beyond their grasp.  Tillerson hopes to bring the Taliban to the negotiating table.  Trump's speech, as the head coach of the team, was inconsistent with the game plan announced by his Secretary of State who is only an assistant coach.  Trump knows that perfectly well.  However, he also understands that his fans want a victory and nothing less.  He promises his fans nothing less than winning, winning, winning even though it divides his team.  His fans have been living on promises of victory that have not been achieved, but Trump blames it on the media who don't tell them the truth, or he blames it on his assistant coaches who failed to deliver the promised victory.

Trump promised his fans that he would repeal Obamacare and give them the best healthcare plan that they could imagine.  He failed to repeal Obamacare, and his team did not deliver the great healthcare plan that he promised his fans.  He left that battle up to his assistant coaches in Congress.  He did not understand the healthcare plan that being negotiated, and his interference in the negotiations was harmful to the process.  This was another lost victory but it was not the head coach's fault.  He blamed the defeat on his assistant coaches in Congress.

When Trump gets tired of losing he decides to hold a pep rally for his patient fans.  Last night he held a pep rally in Phoenix.  He promised his fans that he would build the wall between the US and Mexico that he promised but has failed to deliver.  He also praised the divisive sheriff that broke many laws in the actions that he took against Hispanics.  He is a hero to Trump's fans in Phoenix. 
He blamed the "fake media" for his defeats.  Apparently, he is winning but the media are not reporting the correct score.  Trump will build the wall, especially not a wall that Mexico will pay for as he promised.  He also may use his authority as the head coach to pardon the sheriff who is scheduled to go to jail.  That promise gave his fans something to cheer about.  It was also a promise that the Mayor of Phoenix asked him to not to make because it would be divisive.  Fights between Trump's fans and their opponents followed predictably after the pep rally.

Trump was not satisfied with sparking a battle between residents of Arizona.  He also used the occasion to attack two Republican senators from Arizona who have been critical of him.  They are members of the Republican team but they have not given the head coach the support and worship that he craves.  Apparently, the head coach believes that he can force key members of his team to play the game according to his game plan.  He apparently, does not appreciate the need to have a united team behind him.  The head coach can win without his team.

Trump's contract as America's head coach provides him with protections that are not available to losing football coaches.  They are also unavailable to military leaders.

Monday, August 21, 2017

The Elites Strike Back At Trump's Phony Populism

Trump ran his campaign as a populist who promised a war against the elite establishment.  He has not none anything beyond running more campaign rallies for his base and he has angered the elite establishment whose respect he really desires.  Some of their responses to his performance are in this article.  A deluge of magazines and newspapers from around the globe are running humiliating covers and stories that are the last thing that he expected when he won the election.  It is ruining his brand as well as his ability to maintain the fiction of his presidency.  He failed his audition as a president miserably.  Unfortunately, our government was set up to give a lot of power to the president and it is more difficult to get rid of a failed president than in the parliamentary systems in most European nations.  Perhaps it was critical for our founders to establish a strong national government with a powerful president when the Constitution was written.  In any case, we are stuck with a pretender for the time being.

Are We Ready For The Late Stages Of Capitalism?

Many of us are familiar with a story that pits capitalism versus socialism.  The Cold War was about that battle.  This article is about a totally different story.  It paved the way for Donald Trump to win an election in the US, and it encouraged populists and nationalists in Europe.  The new story is interesting and it is summarized here.  It describes the institutions that worked well in the early stages of capitalism and it argues that those institutions will need to change as we move into a later stage of capitalism which is being altered significantly by technology and a lower rate of growth.

The early stage of capitalism benefited from several coincidences.  For example, the industrial revolution provided tools which increased the marginal product of labor.  That enabled workers to receive wages that increased their marginal ability to consume at a socially appropriate level.  Governments were able to tax a large amount of  private goods and services that enabled them to pay for a smaller amount of public services.  Young people could acquire a level of education and training that produced reliable skills and knowledge which could be repeated with small variance throughout their lifetime.  That led to careers and professions which are familiar to us today but that process is not tied to a fundamental law.  It is undergoing important changes.

The industrial revolution moved workers from low value added repetitive activities to higher value added repetitive activities.  These activities are cyclical.  Technologies are being created today which replace cyclical repetitive activities but they are not being replaced by high value repetitive activities as they were during the industrial revolution.  The main opportunity to produce high value added activities today is from one-off activities that are not being done by computers.  For example, hedge fund managers make lots of money by finding unique opportunities for profitable investments.  One could also argue that talented athletes, and other individuals with unique skills that can be sold for high value in the market, benefit from one-off activities.  They are not subject to the intrusion of technology into the market for cyclical repetitive activities.  Our social problem is to find a way to provide a socially appropriate level of consumption for people who provide one-off skills that are immune from technological development, but are not sold in the market for high prices.

The other major change in our economy is that it differs from the economy that we experienced in earlier generations.  We had a high growth economy that was primarily affected by the business cycle.  Today we have a lower growth economy that is making changes in our institutions that we are just beginning to experience.  For example, in a law firm that is rapidly growing, a partner may have five associates working to support his wage.  The associates have an incentive to work long hours to become a partner.  That changes when the growth slows down. A partner in a low growth firm may only need a single associate to produce the revenue was anticipated in fast growing firm.  That has an impact on the demand for lawyers and on the incentive for associates to move up the ladder.

If we assume a lower growth economy, and the replacement of repetitive cyclical activities by computers, some changes will be required to maintain our society.   Wealthy capitalists, particularly in the technology industry, are aware of the need for change. Some believe that we need a universal wage system to survive the impact that is underway.  That understanding needs to spread beyond the technology industry.  That will not be easy because the super rich have little contact with those who are being most affected by the changes.  For example, airplane travel used to be a luxury.  Wealthy individuals could travel first class, or perhaps in business class, but they shared their trips with ordinary people.  The super rich today travel in private planes.  They may not even use the same airports that are used by the airlines which serve ordinary people.

The concluding argument is that we need a hybrid form of capitalism that increases opportunities to develop the economy by those with one-off skills, but provides individuals with lower paying one-off skills to consume at a socially appropriate level.  The super rich may have to decide between the evolution of capitalism or social revolt that damages our institutions.  Trump may have given us our first taste of that challenge in the US.  He won an election by promising economic changes that he will not make.  He and many in his administration do not fly on commercial airlines.

Whats Left Of Trump's Populist Agenda?

Donald Trump fired Steve Bannon but he praised him on his way out of the White House.  He acknowledged that Bannon's populist rhetoric helped him to defeat Hillary Clinton.  Now that Bannon is back to Breitbart News he can resume his populist rhetoric that had been muted by his critics in the White House.  Trump discovered that some aspects of Bannon's Alt-Right agenda were harmful to his presidency when he incorporated them into his disastrous Charlotteville press conference.  Paul Krugman argues that Trump never had a chance to get a populist economic agenda through a Republican Congress and he never gave it much of a chance.  He allowed Republicans to repeal the taxes in Obamacare, that were primarily paid by wealthy Americans.  The loss of tax revenue would have increased the federal budget deficit unless it was coupled with spending cuts.  Republicans always hated Medicaid, so their replacement  bill made drastic cuts to Medicaid.  That did no go over well with the public, and a single vote from a Republican senator defeated a healthcare bill that would have been disastrous for Trump's populist base.

Trump and the Republican Congress are now working tax policy.  The current version of the plan is consistent with traditional Republican ideology.  It includes tax cuts for corporations and for wealthy Americans.  There will be modest cuts for the middle class which will be used to sweeten the tax cuts for the wealthy.  They will also argue that the tax cuts will pay for themselves by growing the economy and the tax base.  That story goes back to Ronald Reagan.  It is not economic populism, and will be easy to attack by Democrats who are familiar with the story and its failures.

It is important to understand the need for Republicans to restore the Reagan agenda.  In 1980 the top 1% paid 33% of their income in taxes.  Under Reagan it dropped to 25% but it returned to 33% by 2013.  Only 7% of Americans were covered by Medicaid in 1980.  21% are covered by Medicaid today.

Trump sold his economic populism to many Americans because changes have occurred in the economy that have been harmful.  Globalization and technology have been part of the problem but there is more to that story.  Real wages for truck drivers are around 33% lower today than they were in the 1970's most of that loss occurred in the 1980's under Reagan.  There is a shortage of truck drivers but that has not driven up wages.  The wage loss was driven by government agencies that reduced the bargaining power of truck drivers through unions.  Firms that were not unionized were also more competitive than unionized firms which had to cut wages or go out of business.  Government agencies have a powerful impact on labor markets which under the radar. 

Deregulation of the financial industry also had an important impact on wages and the economy.  New products were developed which increased profits and wages.  When the new products, made possible by deregulation, led to financial crisis everyone suffered from the consequences.

Krugman's conclusion is that Trump's legislative agenda, which is the reverse of economic populism, may be defeated but he still controls powerful federal agencies which are busy changing regulations that will be harmful for most of the Americans who voted for him and for the middle class.

Sunday, August 20, 2017

The Vacant US Presidency

This article describes the expectations that most Americans have about the presidency.  It argues that Trump has not met the key expectations.  Therefore, we have not had a real president in the White House.  Trump does not need to resign because he has never assumed the role of the president.  The presidency is vacant.

Of course, we do have a person who regards himself as the president of his base which includes white supremacists and neo- Nazi's among others who hope that he will "drain the swamp".   Many Americans who believe that Trump has filled the swamp with inexperienced and poorly motivated officials, hope that he will be impeached.  Frankly, I would not be totally surprised if he decided to resign.  The Special Counsel, who is investigating any connections between Trump's campaign and Russian interference in the election,  is likely to uncover unsavory financial connections and deals that could have a profound affect on Trump's brand and his business empire.  He may decide to resign in order to protect his business interests in return for ending the investigations if he is given that opportunity.  Even if that does not happen, his performance in office has already badly damaged his brand.  Many of Trump's real estate holdings are not performing as well as they did before he assumed office.  Most of them are heavily leveraged with loans.  It will be more difficult for Trump to service his debt obligations under conditions of declining revenue.

Friday, August 18, 2017

Was Russian Intervention In US Election Good For Russia?

This article argues that covert intelligence operations suffer "blowback" if they are discovered.  US intelligence agencies have uncovered enough information to determine that Russian agents had been involved in covert activities during the 2016 election.  It also lists many of the responses in the US and in Europe that are part of the blowback.  However, it remains to be seen whether the covert operation was good or bad for Russia.  They helped to keep Hillary Clinton out of the White House and they got the guy they wanted in the White House.  They may have wanted Trump to be in position to end sanctions that have been harmful to Russian economy.  That will not happen.  Trump has given them some things, however, that they may not have anticipated.  He has inspired hate groups in the US that had been dormant for many years.  We will be forced to deal with the resulting divisions in our society for years to come.  Trump's performance has also disrupted the normal operation of the federal government.  Trump has lost the confidence of many Americans whose support he will need to make important decisions that might arise in the future.  He is no longer trustworthy.  It is also apparent that the relationship between Trump and members of Congress has been seriously impaired.  He is not trusted by many Republicans as well as almost all of the Democrats in Congress.  Congress has important duties to perform that normally require a respected president in the White House.  Trump is no longer an effective president who is able to work with Congress.  If Russia's primary goal was to disrupt the US government and the operation of our democratic system they can declare victory.

Trump May Stop Bragging About Being On The Cover Of Time Magazine

Donald Trump has boasted about the number of times that Time magazine had placed him on its cover.  Of course, he lied about the frequency of his appearances, but that is not news for most Americans.  The current cover of Time magazine will not make Trump happy.  Trump boasted about his appearances on the cover for a good reason.  It is an important symbol of one's importance in our nation, and the world.  It won't help Trump's image with most Americans to be depicted as a promoter of ideologies that many consider to be anti-American.  He has endeared himself to a radical cult in his base at great expense. 

An Interview With Steve Bannon

Steve Bannon endeared himself to Donald Trump by helping him to win the presidential election.  He focused the Trump campaign on economic populism.  That turned out to be very helpful in the Rust Belt states that had voted for Obama in the last two elections.  Trump won Wisconsin, Michigan and Pennsylvania by a very narrow margin.  Hillary Clinton would have won those states if she had received 50,000 more votes out of the 13 million total votes caste in those states.  Many of the voters in those states were influenced by Trump's simple populist message.  He promised to bring manufacturing jobs back to the area by ending bad trade agreements with China and other nations.  His anti-immigration messages also promised to reduce competition from low wage immigrants in the labor market.

This interview delves more broadly into Steve Bannon's current position in the White House.  He and his supporters in the White House remain advocates for economic populism.  Bannon believes that Trump will also be reelected in 2020 with that message.  He argues that it is much more effective than the identity politics message that have been dominant in the Democratic Party.  I ignored most of the gossip about Bannon's current status in the White House.  The real issue is whether the economic populism messages that Trump is still using, by claiming credit for millions of jobs, will remain powerful in 2020.  The unemployment rate can't really go much lower, and many of Trump's promises will not be realized.  Its also not clear what the Democratic Party will offer to voters beyond personal identity messages.  Of course, Trump may not be any position to run for office in 2020 if he continues to self destruct.  He may resign from the presidency if he determines that his Trump brand is being eroded by his performance in office,  or by investigations that may uncover damaging information about financial relationships that harm his family businesses.

CEO Of 21st Century Fox Criticizes Trump On Charlotteville Statements

The CEO of the corporation that owns Fox News criticized Trump's positions on white supremacy and neo-Nazi's.  He donated $1 million to the Anti Defamation League and asked his friends to also make donations to ADL.  That may relieve him of some form of guilt, but it is small change for James Murdoch.  He could do much more for our nation by changing the mission of Fox News which defends almost everything Trump says or does.  He won't do that because it would not be a good business decision.   Fox News targeted the market segment that supports politicians like Trump when it was established by James Murdoch's father who knew what he was doing.  Fox News contributes millions in profits to the parent company managed by James Murdoch.  He father responded to critics of Fox News by referring to its success as a business.  He simply targeted a market segment that was largely ignored by the major news networks.  Fox News has been marketed as the alternative to the mainstream media which it denounces for having a "liberal bias".  Trump has taken Murdoch's marketing segmentation a step further.  The so called "liberal bias" has now become "fake news". 

Thursday, August 17, 2017

The Liberation Of Donald Trump

This article describes the turmoil within the Trump administration created by Trump's unplanned comments about the protests in Charlotteville during his news conference.  Trump had been advised to follow the script at the press conference and to confine his remarks to his infrastructure plan.  His daughter and his son-in-law are both Jewish, and so are several of his top aides.  Neo-Nazi's participated in the protest along with the white supremacists.  They chanted anti-Semitic insults along with their allies among the white supremacists.  Racism and ethnic purity was an essential component of Nazi ideology.  Trump claims that he is not anti-Semitic and one of his defenders supported him by saying that "in his heart he is not anti-Semitic.  That may be true.  However, Trump was extremely bothered by the criticism that he received after his first comments about the protests in Charlotteville. He does not handle criticism well.  The quote below may explain why he deviated from the script that he was supposed to follow:

In contrast, the president told close aides that he felt liberated by his news conference. Aides said he seemed to bask afterward in his remarks, and viewed them as the latest retort to the political establishment that he sees as trying to tame his impulses.
 Impulse control is not consistent with Trump's need to do battle with the "political establishment" that does not give him the respect which he demands. Despite his wealth he was never accepted into the real estate elite in Manhattan as well.  This aligns him with many of his supporters who cherish fantasies and conspiracy theories about those above them.

"That's What Friends Are For" Fox News Attempts To Resue Trump

All of the major TV networks provide "fake news" along with the major newspapers in the US.  There is only one cable news show that tells the truth.  One of Donald Trump's great achievements is that he has persuaded many of his supporters that Fox News tells the truth, and that the rest of media (with the exception of talk radio) tell lies about His Majesty.  In case you are interested in "truthful" news coverage you may want to read this article by a journalist who watched three hours of "Fox and Friends" as they attempted to clean up the mess he created by equated white nationalists and Nazi's with those who protested their march in Charlotteville.  Rupert Murdoch, who owns the Fox Network and other sources of "yellow journalism" in the UK and Australia,  has marketed Fox News as the alternative to the liberal mainstream media.  Donald Trump followed Murdoch's lead when he told his supporters that mainstream media are providers of "fake news".   Trump does not need a state network like those in autocratic states.  He uses Fox News and talk radio to spread his propaganda.

Wednesday, August 16, 2017

Tom Friedman's Ariticle Should Be Required Reading For Trump

Donald Trump is our president and the commander in chief of our armed forces.  Tom Friedman is in the Mid-East and traveling with the US military command.  The military force that he describes is representative of America.  It is pluralistic.  Donald Trump has spent the last few days defending white supremacists who voted for him in the last election.  They look nothing like the soldiers under his command.  We have a pluralistic military and a pluralistic society.  Donald Trump seems to believe that he is the president of his political base.  He is not fit to be our president, or the commander in chief of our military.

Friedman also points out that many of the nations in the Mid-East are like the kind of America that he tends to promote.  They are not inclusive.  Muslims who belong to different segments of Islam are at war with each other.  We might be better off using the talent and financial resources expended in this futile effort on rebuilding our cities and providing more opportunities in our pluralistic society.

Trump Forced To Disband His Business Council

Donald Trump sold himself to many Americans by claiming that his business experience enabled him to improve the business environment and stimulate the economy.  He created a business council of CEO's from several of America's leading corporations soon after winning the presidency.  Following his initial comments about the tragic events in Virginia, several CEO's resigned from the council.  He moderated his comments after that mistake, but his impromptu comments yesterday exacerbated his problems with corporate leaders.  After several additional CEO's resigned in protest over his remarks he concluded that it was best to disband the CEO council.  Corporate CEO's are not willing to equate white nationalists and neo-Nazi's with those who protested their torch lit march in Virginia as Trump had done.  Trump's business experience did not prepare him well for working with corporate CEO's who operate in more inclusive global market.  They don't rely on votes from the white nationalists and neo-Nazi's who were cheered by Trump's remarks.

Meet The President Of A Rapidly Shrinking Political Base

Donald Trump equated white supremacists and neo-nazi's with demonstrators who opposed their torch lit march in Virginia.  He claimed that these groups were equally guilty of the ensuing violence. For some reason he referred to those who opposed the torch lit march "the far left". The implication is that citizens who oppose white nationalism and neo-nazi's are left wing extremists.  In other words, people who did not vote for him in the election.  His political base includes white supremacists and neo-nazi's.  Trump did not praise them, but their leaders were pleased that he argued that taking down the statue of Robert E. Lee, who led a war against the national government,  was on par with the founders of our country because they also owned slaves.  He asked whether monuments to Washington and Jefferson should also be taken down.  Those were encouraging words for less extreme voters in confederate states who oppose taking down monuments of confederate military heroes.  They are a far bigger part of Trump's base.

Trump's response to the violence in Virginia is consistent with much of his behavior since he won the election.  He cannot tolerate personal criticism and he constantly pursues opportunities to win approval.  He has held "campaign rallies" exclusively in red states since his election.  They respond to the slogans that he used in his election campaign with predictable cheers.  He avoids states that did no vote for him in the general election.  Unfortunately for Trump, his base is shrinking.  A recent poll shows that his approval rating has fallen to 34%.  A growing percentage of Republicans no longer approve of his performance in office.  There are almost as many Independents in the US as there are members of either political party.  His support from Independents has fallen into the mid 20's.  Trump's efforts to appeal exclusively to his shrinking base is a doomed strategy.  It is not good for him or his political party.  It is also bad for the rest of our nation.  It will continue to drive him into extreme positions in order to satisfy his need for approval and his intolerance of critcism.

Tuesday, August 15, 2017

David Brooks Explains Fanaticism And Offers Modesty As A Remedy

David Brooks used to spend most of his time writing articles about politics.  The policy issues were usually conservative ideas supported by Republicans and Liberal polices promoted by Democrats.  Those days are over for David Brooks.  He is worried about the rise in fanaticism that has been the consequence of increased anxiety in our society.  That inspires conspiracy theories that surface to ease anxiety.  He intends to define and promote intellectual modesty as the remedy for fanaticism.  He starts out by rejecting intellectual purity.  Fanaticism and anxiety cannot be countered by a war between pure ideas.  Modesty begins with that realization.  He hopes to more fully describe modesty and explain how it will reduce fanaticism in subsequent opinion pieces.

I can sympathize with David Brooks.  There is not much more that one can say about Donald Trump and his failures as our president.  He as done more to increase anxieties and promote fanaticism than anyone might have thought possible.  Trump exacerbated a problem that has lied dormant in our society for a long time.  Hopefully, intellectual modesty, as it is fleshed out by David Brooks will be part of a solution.  I doubt that it will be sufficient.  Fanaticism was dormant in our nation for many years because there were few institutions to promote and organize it.  It is much easier to do that today with the rise of alt-right media,  the use of social media to facilitate communication and by the divisions within each of our major political parties. A modest solution to a growing problem may not exist.

Emmanuel Macron Is About As Popular As Trump After Winning French Election

Most observers of the French election were pleased that Macron defeated Le Pen in his battle for the presidency.  He was not well known, but Le Pen, and her version of right wing populism,  was a real concern for many Europeans and Americans.  Macron won 65% of the presidential vote.  That was much better than Donald Trump did in the US election;  Hillary Clinton won the popular vote by several million.  Macron and Trump have not fared well since the elections.  Recent polls show that that their popularity has dropped since being elected to around 36%.  Most Americans understand why Trump's apprenticeship as president has eroded his popularity.  Macron, who is the youngest president in French history, has not performed well in his apprenticeship.  He may have won the election as a vote against Le Pen, but he has made several mistakes that have not been well received during his first view months in office.  He made a mistake by offering his wife a position in government that was similar to a mistake made by his predecessor.  He also decided to cut the military budget which led to the resignation of France's top military officer.  He has also attacked the French labor code which is being vigorously defended by union leaders.  He may have over played the hand that was dealt to him with his popular vote in the election.  Trump continues to attack Hillary Clinton,  Obama,  the Republican Congress and the media to maintain the support of his base.  He has not done anything positive for his populist base.  He would lose many more of them if they understood his budget and his tax policies which favor his wealthy supporters.  Macron does not have the luxury of attacking Le Pen as he pushes his neoliberal agenda during his first months in office.   

Sunday, August 13, 2017

The Rise In Russian Income Inequality Since 1990

Thomas Piketty has written extensively about the rise in income inequality in the US and other capitalist nations in recent years.  Piketty and his colleagues have turned their attention to the rise of income inequality in former communist nations since 1990.  They found that income inequality in Russia is similar to, or greater than income inequality in the US.  Inequality in Russia is also  greater than it is in China and former communist nations in Eastern Europe.  They also found that much of wealth held by Russia's richest citizens is held offshore.  The offshore financial assets held by rich Russians is about equal to total household financial assets held in Russia.  Money laundering in Russia must be a big business.  (It may also have provided a boom for real estate developers in the rest of the world.  A lot of the money has been invested in real estate)

What Should We Do About North Korea?

There are no easy solutions to pursue in North Korea.  This article describes the problem and it offers a solution that might work in the long term.  It argues that the US should spend more on programs that raise consciousness in North Korea in order to promote an internal revolution against the repressive regime.  US sanctions have been harmful to North Korea's economy.  The population suffers from the sanctions but its leaders do not.  We should make it more difficult for the leaders to use the funds that they have accumulated through corruption.

In theory, the sanctions which primarily punish the citizens of North Korea,  should create the conditions for regime change.  The repressive regime has responded by becoming more repressive.  It has also used Trump's threat of a military attack as a weapon to bolster the regime.  Its leaders, and access to nuclear weapons,  provides assurance against military intervention by the US.

The US has been following a strategy for many years that has not worked.  It has made bargains with the regime that have been broke .  They did not prevent the development of missiles and nuclear capability.  North Korea now holds South Korea and Japan as hostages against a US preemptive attack.  North Korea would unleash nuclear attacks against them if they were attacked.  China has also taken a position against a preemptive attack.  It has declared that the first nation to use nuclear weapons would become their enemy.

The Trump administration seems to be promoting a good cop versus bad cop strategy that might give Trump enough leverage to strike a better deal with North Korea.  Trump is the bad cop who threatens a military attack and Tillerson is the good cop who will offer a deal that saves them from the bad cop.
Trump can then boast about the better deal that he made.  North Korea will give up its nuclear development in response to Trump's threats.  Thus far, that strategy has primarily worked in favor of the repressive regime which defends the population from a new devil.

The dilemma for the US, and other nations, is that the risk of nuclear war has been elevated and bargaining with North Korea has not curtailed its nuclear build up.  The long term strategy, advocated in this article, does little to reduce the elevated risk and it may not lead to an internal revolution against the repressive regime.

Friday, August 11, 2017

The Art Of The Bluff Is Trump's Real Art Form

Trump claims that he has perfected the art of deal making.  In his business career he was better at bluffing than he was at deal making.  Trump operated his business using bluffing as a primary mode of operation.  This article describes his use of bluffing in his business career.  Trump's political career is also based more on bluffing than on deal making.  Trump is running the executive branch of our government exactly like he operated his small business. That is why he thanked Putin for sending hundreds of US diplomats back to the US.  He said that it cut his payroll.  He is now engaged in a bluff with another bluffer who runs North Korea.  The world is in peril because two major nations are led by individuals who have relied upon bluffing in their rise to power.  Hopefully, there are enough adults around both them to prevent one of the bluffers from calling the bluff of the other.  The primary purpose of their bluffing is political.  They bluff to inflate their image of power.  Their political bases welcome their show of power.  They want "real men" as their political leaders.

The Three Forces Of Climate Science Denial

Paul Krugman, like most scientists, is concerned about the compelling evidence which worries him about the future of civilization as we know it today.  The concentration of greenhouse gases produced by human behavior is responsible for many of the extreme weather events we observe today, and it will be responsible for the changes in our planet that will make life more difficult for our grand children.  Governments across the globe, have banded together, to make very difficult decisions about how to respond to the warnings provided by climate scientists.  The Trump administration has taken steps that will make it more difficult to respond to the warnings from climate scientists. Paul Krugman argues that there are three pillars of support for climate science denial in the US:

* The most obvious source of denial comes from the energy industry.  The Koch brothers have led the efforts by the energy industry to pour money into the climate science denial industry.  Most of the money that funds the denial industry comes from the energy industry.  It also comes from politicians who happen to live in energy producing states.

* Outside of the energy industry, there are a lot of libertarians who have a strong distaste for any form of government intervention into the economy.  Market forces should fix all of our problems.  Free  market economists accept the idea the consumption of fossil fuels produces externalities that should be paid for by putting a price on energy consumption or production.  Libertarians, however, are not willing to pay for the largest externality in human history.  That is, the weather catastrophe that awaits us.

* There are always questions about any scientific idea.  The function of science is to continuously reject one idea for a better idea in response to evidence.  Some skeptics about the impact of green house gases are scientists.  A small fringe of these skeptics take great pleasure, and in some cases financial rewards, from rejecting the conclusions by 97% of the climate science community.  There will always be odd ball skeptics about any idea.  Ordinarily, the scientific community responds to the force of compelling evidence.  The climate science skeptics reject the available evidence.

* In the US, the Republican Party has become the center of climate science denial.  Under Trump, it goes even further than global warming denial.  Science itself is the enemy of Trump and many Republicans.  Ignorance is bliss in Trump's base.  They reject climate science and the basic of idea of science which insists upon the need for supporting evidence to win any form of argument.  The truth is whatever Trump claims, except when he changes his mind.  Faith in Trump, or other forms of faith, have replaced the fundamental concept of science and its role in society.

Wednesday, August 9, 2017

Rex Tillerson May Be In The Wrong Job

Rex Tillerson,  praised Trump's strong comments about his ability to use our nuclear force to wipe out North Korea.  He claims that this is just the kind of message that might alter their behavior.  Of course, it is not the kind of message that a Secretary of State would usually use to support diplomatic negotiations that are underway.  North Korea's leadership is building its military capability because it is aware of America's military, power and it believes that America will use its military power in pursuit of regime change in North Korea.  Trump's comments did little to reduce the leadership's concerns about regime change.  Trump's strong words about his ability to use extraordinary force against North Korea was intended for another audience.  He has consistently attempted to boost his image as powerful leader to his political base.  This is just another example of Trump being on the political campaign trail.  In any case, it will not make Tillerson more welcome in negotiations that have been underway with North Korea.  They have even more reason to be concerned about the US commitment to regime change in North Korea,  and Tillerson seemed to believe that diplomacy has not been working and that it may not work.  That leaves us at ground zero.  North Korea will only respond to a military threat that has encouraged North Korea to develop a similar military threat,

A Comparison Of Income Growth By Percentile In US For Two 34 Year Periods

There has been a lot of discussion about the topic on income inequality in the US.  Conservative economists have criticized some of the data that fail to account for government transfers to the poor and other factors.  Those criticisms are described in this article.  A graph towards the end of the article shows that income distribution in the US in the 34 year period from 1946 and 1980 was much more equal than it was in the 34 year period between 1980 and 2014.  We lived in two different worlds during those 34 year periods.

The distribution of income across income percentiles in the early period tended to favor individuals with lower incomes.  For example, the average income growth for those in the 5th percentile was over 3% in the early period.  There was zero income growth for low income Americans in the 5th percentile in the later period beginning in 1980.  The trend line across income income percentiles was downward sloping in the early period.  That is, annual income growth tended to fall as one's income income increased.  Moreover, annual income growth for Americans in the 50th percentile in the early period was 2%.  That was double the 1% growth rate for those in the middle percentile in the later period.

The trend line during the later period showed that annual income growth sloped upwards as one moved to high income percentiles in contrast to the earlier period.  The most dramatic change, however, did not occur until we reached the 95th percentile.  Even more revealing was the huge disparity in income growth as one move upwards within the 99th percentile. Americans who made it to the top 1% did much better than those in lower income brackets, but the level of inequality within the top 1% is huge.  The annual growth in income skyrocketed as we move upwards within the top 1%.  Fortunate Americans who made it to the top 1% are paupers compared to those at the top of the 99th percentile.

Its important to recognize that we had a market economy during both of these periods.  This implies that we can't attribute the difference to market forces.  Its pretty clear that markets worked differently beginning in 1980.  Some of that difference may be the result of government tax policies.  The top marginal tax rate was very high in the early period.  It was reduced substantially in the 1980's.  That may have encouraged top executives to campaign for larger salaries.  Executive salaries grew rapidly during the later period.  It would be hard to attribute their salary increases to growth in executive productivity.  Economist's like to relate income to worker productivity but executive productivity, which is difficult to measure, could not have improved as fast as the increases in executive compensation.  Factors, other than executive productivity, must account for most of the changes within the top income brackets and for the lack of income growth below the top 95th percentile.

Tuesday, August 8, 2017

Japan's Disinflationary Boom Is Hard To Explain With Economic Theory

Interest rates in Japan are close to zero, and there is virtually no unemployment.  Economic theory suggests that wages should rise with low unemployment.  That should drive up the cost of goods and services and produce price inflation.  The inflation rate in Japan is close to zero.  It looks like the Phillip's curve, which shows a positive relationship between the unemployment rate and the inflation rate,  does not apply to Japan.  The government has been unable to hit its 2% inflation rate target.  Japan appears to be in a disinflationary boom.

The central bank has been keeping interest rates low to sustain a reasonable level of economic growth without producing inflation.  This enables the government to replace higher interest debt with lower interest rate debt as notes become due.  Consequently, the central bank is forced to maintain low interest rates.  Japan is in a period of fiscal policy dominance as a consequence. 

Japan can enjoy its disinflationary boom for some time but primary government spending, which does not include interest payments,  is growing faster than government revenue.  The government will have to worry about the primary budget deficit because mandatory spending on entitlements is growing faster than government revenue.  That will put pressure on the ratio between government debt and GDP which will continue to grow.

US Government Report On Climate Change Is Frightening

Thirteen government agencies contributed to a report on climate change.  It concluded that many of the severe weather events across the globe in recent years are the result of carbon emissions produced by human activities.  It warned that unless something is done to reduce carbon emissions we will soon reach a point where catastrophic weather events are unavoidable.   The scientists who contributed to the report are concerned that the Trump administration will not release the report.  There is a link in this article to a draft of the report that was made available to the NYT.  Since it may not be released by the Trump administration, it is important to circulate the draft of the report made available by one of our legitimate sources of news.  Right wing media, which are intent upon keeping the public misinformed,  will continue to suppress, or distort scientific information about human contribution to climate change.  It will get much worse if we do nothing, but many extreme weather events today are due to rising carbon emissions.

Monday, August 7, 2017

What Should Progressives Do?

There is hardly anything left to say about Donald Trump.  He is a terrible person and probably the worst president in our history. I only qualify the last point because he has only had six months to demonstrate his incompetence and his personality disorders in the White House.  The good news is that Trump has taught us a couple of important lessons.  We can't take our democracy for granted.  The election of an unqualified misfit into the presidency proved that our electoral system has many flaws.  We need to fix them.  Trump's takeover of the Republican Party was only possible because the GOP cultivated the base that continues to support him.  A political party that depends upon votes from the lowest common denominator in our nation has been corrupted in the process. Consequently, Paul Krugman has turned his attention to issues that face the progressive wing of the Democratic Party.

The first issue is healthcare.  Krugman likes the idea of a single payer system like Medicare for all.  He would push for that if we were starting from scratch.  He recognizes, however, that 136 million Americans get their health insurance through their employers.  Most of them are happy about that system and they would not be enthusiastic about leaving it.  He reminds us that there are other good ways to provide universal healthcare coverage.  The Dutch system is much like Obamacare and it works well.  The government provides the means so that everyone is able purchase health insurance from private vendors.  He argues that it might be easier to fix the flaws in Obamacare than to push for Medicare for everyone.  Even with its flaws, Obamacare works pretty well in states that have not attempted to undermine it.

The next issue is support for families with children.  The US lags other wealthy nations in the support that the government provides for children.  The cost of daycare for families with both partners working is prohibitive.  Preschool is also expensive for families who don't qualify for government support.  These are real problems that progressives should get behind.  It would help them to win back many middle class voters who feel abandoned by both of our political parties.

Sunday, August 6, 2017

One Week Of Trump News Inspires Hope For Adult Republicans

Harper's Weekly published one week of Trump antics that were published by the "fake media" last week.  If Trump is good at one thing, this is it.  He controls the news cycle.  Almost everything he does or tweets is newsworthy because they are things that a normal person, especially the POTUS, would not have done or said.  He is even good for the "real media" like Fox News.  He provides them with countless opportunities to explain away his unpresidential behavior and criticize the "fake news" provided by the media who do not live in a world of alternative facts.  Trump is so good at being unpresidential that he has started a stampede by prominent Republicans who don't expect him to be an opponent in the 2020 presidential election.  It usually takes longer than six months for that to happen.  Trump broke another record.   William Kristol, the editor at large for The Weekly Standard, wants to prevent Trump's renomination in order to "liberate the Republican Party from Trump" and also to liberate conservatism from Trumpism.  Traditional Republicans don't want Trump, and neither do traditional conservatives.  The only problem that traditional Republicans and conservatives face is that Trump has captured a substantial segment of their base.  They can't win elections without them.

The disarray created by Trump's takeover of the Republican Party may create an opportunity for Democrats in 2018 and in 2020.  They won't be able to sell liberalism to Trump conservatives, but they may have an opportunity to attract disaffected Republicans by offering them a return to sanity.

Saturday, August 5, 2017

Conservatives Debate The Survival Of The Repulican Party

Jennifer Rubin and George Will are two of the most prominent conservative opinion leaders in America.  Both of them have been repelled by the Republican Party's embrace of Donald Trump after he won the GOP primary and the presidential election.  Jennifer Rubin offers her version of conservatism  in this article.

George Will describes the primary battle in Alabama for the Senate seat vacated by Jeff Sessions.  He also refers to a potential Republican contender in Michigan to show that the problems in the Republican Party go beyond regionalism.  The battle in Alabama, however, is his major concern.  He favors a conservative candidate but the debate is not about ideas.  His candidate is being attacked because he said some bad things about Donald Trump during the GOP primary in Alabama.  He is also being compared to much despised liberal Democrats in Alabama. False accusations of liberalism and insufficient admiration for Donald Trump may doom the only candidate that Will respects in Alabama.  The likely winner of the primary will use the same arguments in the general election against the Democratic candidate.  He will not be a Trump supporter and he will be compared to Nancy Pelosi and Elizabeth Warren who have two strikes against them.  They are powerful women who are also symbols of liberalism.

Jennifer Rubin concludes her plea for the rejection of Trumpism, from her favored political party, by making a wish.  She hopes that Republicans in Congress will do what is necessary to eliminate Trumpism before it damages the brand beyond recognition.  The Democrats might help the party to get rid of Trumpism by running against Trumpism in the 2018 elections.  Rubin would rather see the Republican Party step up to the plate and throw the bum out.  That may be the least likely outcome.  The Trump base has become a necessary, but not a sufficient constituency, for a political party inspired by conservative ideas. 

Wednesday, August 2, 2017

Trump Regretfully Signs Congressional Bill That Punishes Russia

Congress sent a bill to Trump that limits his authority to conduct foreign relations with Russia.  A large majority in the House and the Senate voted for the bill.  Congress has enough votes to overturn a  potential Trump veto.  The bill prevents Trump from preventing new sanctions or eliminating existing sanctions.  Trump is smart enough to realize that Congress has taken steps to limit his power to conduct foreign policy.  On the other hand, he incorrectly argues that our founders intended to give the president total power over the conduct of foreign policy.  The Constitution was designed to provide checks and balances that limit presidential power.  His Republican Congress just showed him how Congress can intervene in the conduct of foreign policy.  He is going to learn much more about our system of checks and balances during his presidency.  He is dependent upon the good will of Republicans in Congress.  He continues to erode the good will by demonstrating his inability to run the executive branch of government and by blaming Congress, among others, for his failures.

Trump's Divide And Conquer Strategy Begins Attack on Affirmative Action

The Trump administration has set up a group in the Justice Department to go after universities who use affirmative action in their admission policies.  It contributes to the anxieties of many white Americans who believe that minorities have a better chance of getting into colleges than they do.  White resentment helped Trump to win the election and Jeff Sessions shares many of their resentments.  They exploited Obamacare in a similar fashion.  Fox News and right wing media have been telling this story for a long time.  Minorities, who represent a large portion of Americans in low income brackets,  qualify for Medicaid and federal subsidies.  Many white Americans would rather deny access to healthcare for low income white Americans than contribute to programs that also benefit minorities.   In any case,  the Trump administration intends to use a variety of tactics that are described in this article that are based upon a divide and conquer strategy that seems to work for them.  The strategy not only helps them in elections, but it paves the way for tax cuts that go primarily to white Americans in the top income brackets.  They pay for the tax cuts by cutting federal spending on social welfare programs.  Poor white Americans help to pay for the tax cuts by voting against their economic interests,

Trump Is Trying To Restore The Past By Ignoring Our Future

Tom Friedman explains why our politicians need to reverse the direction taken by Trump.  He argues that climate change is not just about the weather.  We may already be late in dealing with changes in the weather.  Deforestation in the Amazon, for example, may be irreversible.  However, there are two other important climate shifts that demand a responsive and prepared government.  We live an interdependent world.  The failure of one of our friendly states will be harmful to our future.  Moreover, the failure of one our rivals may be more dangerous than their success.  We also live in world with rapidly changing technology.  He describes the rapid changes underway and why it is critical to be on top of those changes. Governing is all about preparing for the climate shifts that are underway and cushioning ourselves from the worse of those climate shifts.

The US has prospered because our government prepared the soil so that the dynamic private sector can prosper and be successful.  Governing in the US today is entertainment.  It provides fodder for the late night TV shows and cable news shows.  Even worse, the Trump administration is cutting investments in science, technology and education that prepared the rich soil that enabled our prosperity.  Instead of preparing for the climate shifts that are underway Trump is trying to restore the past.  He does not understand the interdependent shift.  He believes that we prosper when other nations fail.  "America first" is a symptom of that disease.  Moreover, we can not make America great again without a government that invests in preparing the soil that will prepare us for the future.

We have all been entertained by the folly in Washington.  Friedman argues that we need to get rid of the entertainment and prepare for a rapidly advancing future.  Hopefully,  some of our politicians who can think beyond the next election will understand Friedman's warning.  We did it before.  Maybe we  can do it again.  

Tuesday, August 1, 2017

Donald Trump Senior Made Up Russian Meeting Story For Junior Trump

Donald Trump learned about the leaked meeting between his son, his campaign manager and his son-in-law while he was returning from Europe on Air Force One.  He proceeded to make up the story about the content of the meeting that was given to Junior.  His son used his father's description of the meeting in response to requests from reporters.  He told reporters that the meeting was about the adoption of Russian children by US citizens.  That was the same story that The Donald used when he was asked about his meeting with Putin in Europe.  He told reporters that it was a coincident that both Putin,, and the Russian lawyer that met with Junior, were so interested in the adoption issue.  It is not a coincidence when the same person makes up both stories.  The Donald chuckled about the "coincidence" when he offered the story to reporters upon his return to the US during a taped interview.  He also told the reporters that he had advised his son to be transparent and that he was proud of his son's transparent and honest response to reporters.  It turns out that The Donald was advised to be transparent by his team during discussions on Air Force One.  He dismissed that advice, but he thought it might be a good way to describe his son's response to reporters.  Its always a good thing to claim transparency about lies.

One of The Donald's lawyers appeared on the Sunday TV news shows and claimed that The Donald was not involved in creating the statement used by his son.  He was either uniformed about his clients participation in drafting his son's statement or he lied about it.