Saturday, September 8, 2018

The Republican Strategy For Mid-Term Elections Is Not About Policy

The Republican Party passed a tax bill that primarily benefited wealthy voters.  They intended to run their election campaign on the tax bill by arguing that it was designed to help the middle class.  That strategy has worked for many years.  The GOP has learned that it is not working this year.  They have moved to a new strategy.  The Congressional Leadership Fund (CLF),  has raised $100 million to spend on the mid-term elections.  This article describes the thrust of their ad campaign.  They have switched to misleading and false personal attacks on Democratic candidates. 

Paul Ryan has used his position as the House majority leader to raise funds for the CLF.  He is retiring from a Republican Congress this November that he had led on the traditional GOP policies of cutting taxes for the rich which increased the federal budget deficit.  He then proposed cuts in social welfare programs to pay for the tax cuts.  His last goodbye from his leadership position is to bless the CLF strategy that worked for Donald Trump.  The basic idea is to get voters at GOP rallies to shout "lock them up" at Republican rallies.

Thursday, September 6, 2018

Is There Enough Resistance To Trump?

By now we all know what has been printed in numerous articles about Trump before he was elected and after he took over the White House.  Bob Woodward's pulled most of them into a single book that describes how many White House officials have attempted to prevent Trump from doing more damage than he would have done without their resistance.  Donald Trump is not much different than the Trump who ran the Trump Organization.  This article argues that the resistance to Trump may have prevented Trump from doing more damage than he might otherwise have done but that was not enough.  Trump continues to attack our institutions and divide our nation every day that he is control of the White House.  He is not fit to be in the position that he holds and Republican leaders have done little to contain him.  They put party loyalty over our national interest.

Saturday, September 1, 2018

They Came To Honor McCain And Bury The Republican Party

Donald Trump has taken command of the Republican Party by capturing a substantial portion of the Republican base.  They can't win primary elections if Trump turns his base against candidates that do not bow down before him.  They also depend upon votes from Trump's base in general elections.  They can't win general elections either without a big turnout from dedicated Trumpians.  Trump's dominance of the Republican Party was put on full display by the senator from South Carolina who once had a backbone with support from John McCain.  The new Lindsey Graham appeared on Fox News to demonstrate his loyalty to his new boss.  He only needed to study Trump's tweets to answer the questions that he was asked.  Three Republican leaders were invited to speak at the ceremony for John McCain.  Trump, of course, was not invited to attend, or to speak at the ceremony, however, the three Republican leaders who spoke at the ceremony have aligned themselves, and the Republican Party, with the demagogue who controls a substantial portion of the Republican base as well as many of the major donors to Republican campaigns.  The Republican Party exists only in name.  It is not your father's Republican Party; it is Donald Trump's party. 

Wednesday, August 29, 2018

What Would Happen If Trump Really Shot A Person On Fifth Avenue?

I returned home from a trip to Europe just in time to read Tom Friedman's description of how Trump's people would deal with the murder.  Trump once claimed that his base would stick with him even if he did shoot a person on Fifth Avenue in NYC.  Of course, Trump would not really shoot anyone on Fifth Avenue, but Friedman described how Fox News,  Republicans in Congress and other Trumpians might handle the event.  His description was meant to be funny but it was also meant to be serious.  We have probably come  to place where truth does not exist and institutions that were designed to protect our democracy are under a serious attack elsewhere in the western world.  Trump's role model is Vladimir Putin and Trump would love to run the US like Putin runs Russia. Friedman argues that the "Russianification" of the US is underway and that it will be difficult to stop that process.  Unfortunately, the only way to stop that process is to defeat Republicans in the coming elections.  The Republican Party appears to be perfectly happy with the destruction of our democracy as long as they can retain their jobs in Congress.  A one party system is what they have been after for a long time.  Trump has given them the opportunity to make that happen.  Many old fashioned Republicans may not believe this but Friedman describes how Republican leaders are moving into the Trump camp Republican donors are happily funding the process.  They will do very well operating as oligarchs under the Trump political party.

Monday, August 13, 2018

Who Benefitted From Trump Tax Cuts?

Trump gave the Republican Party what it really wanted after he was elected.  The GOP's priority has always been tax cuts for their wealthy donors.  Trump gave it to them in spades.  Corporations got huge tax cuts that they mostly used to buyback their own stocks.  That was great for corporate executives and large stock investors because it led to higher stock prices.  However, it was sold to the public as a way to increase corporate capital investment.  That would expand the economy and raise wages for ordinary Americans who don't own large amounts of corporate stock.  That did not happen.  Real wages, corrected for price inflation, have not grown as promised despite a fully employed labor market.

Republicans have also sold their party to the public as the fiscally responsible party.  They claim that Democrats are fiscally irresponsible because they tend to raise taxes in order to provide expensive social welfare benefits to "the wrong kind of citizens".  That discourages them from working and it also forces the government to borrow money to pay for the expensive social welfare programs.  However, it turns out that the Trump tax cuts were fiscally irresponsible.  Trump increased spending, primarily on defense, as the corporate contribution to federal tax revenue plummeted.  Not surprisingly, government borrowing has skyrocketed and federal budget deficits have risen dramatically.  Trump has responded by claiming that "debt is good".  He became a billionaire by borrowing millions to fund his business investments.  His government, however, has not borrowed money to fund investments.  It has been forced to borrow money in order to fund tax cuts for its wealthy donors.

The Trump administration has also deviated from Republican ideology in another way.  It has always supported free trade.  Trump has turned this around by using tariffs as a weapon to reduce US trade deficits.  We are still waiting to see the impact that this will have on the US and the global economy. The role of the dollar in international transactions plays a powerful role. The dollar has been increasing in value relative the foreign currencies.  That will make US exports more expensive and imports less expensive. Trump even argued that the revenue that we receive from tariffs will help to pay for his tax cuts.  No serious economist believes that will happen.  But he understands that his base not does include many voters who understand economics.  

Thursday, August 9, 2018

How Trump Turns Defeat Into Victory

Dana Milbank provides an excellent list of losses that Trump reports as victories.  Its a good thing that Trump is not in charge of keeping score in sporting events.  His teams would never lose.  Milbank's article is informative for most readers of the Washington Post.  On the other hand, Trump will continue to win victories with his base as long as he tells them what they want to hear.  Unfortunately for Trump, and for his political party,  many Republicans, and most Independents, don't trust him to keep score.

Wednesday, August 8, 2018

Is Apple The Future Of Capitalism?

This article provides an excellent description of Apple's financial strategy.  It also explains why Apple is in a position to effectively deploy a financial strategy that is the envy of many corporations.  The implication is that Apple is not the future of capitalism.  Most corporations are not in a position to deploy its financial strategy.  On the other hand,  Apple may have deployed an ideal financial strategy that sets the gold standard for corporations.

One of the key ingredients of Apple's financial strategy is its focus on cash flow which is greater than its high profits.  It does not borrow money to finance its operations like most businesses.  It passes this burden onto its suppliers.  They carry the inventory for Apple's hardware products and Apple pays them after 100 days of the receipt of an invoice.  That helps to create a highly positive cash flow that other firms might envy.  Apple also receives cash quickly from sales through its retail stores and from its many subscription services. Apple does borrow money, but it is used to finance the return of capital to its shareholders.  Most of that that comes from share buybacks. 

A large number of corporations have borrowed money to buyback their stock and to pay dividends to their shareholders.  That may be good for executives who are compensated with stock options.  On the other hand, they may under invest in assets and R&D that may have a negative impact on their growth rate.

Tom Friedman Explains Why The International System Is At Risk

Tom Friedman reports from Italy where he has learned about the risks that we face in Europe and elsewhere.  He argues that Italy's new government came to power because of a very serious mistake by NATO.  A dictator was removed from Libya, but NATO did nothing to restore order in Lybia.  Consequently, there is no effective government in Libya. Instead it is run by a number of competing tribes.  As a result,  Italy has been overwhelmed by an unmanageable number of immigrants.  The second largest segment of Lybia's economy is moving immigrants to Europe via Italy.  Moreover, that situation has been made worse by the refusal of some governments to accept immigrants flowing into Europe via Italy.   Italians are unhappy with the flow of immigrants and they also blame the EU for not assuming more of the responsibility for accepting the immigrants.  Anti EU, and anti-immigration sentiments opened the door for the right wing coalition government in Italy.

Italy is only one of the problems that Friedman is concerned about.  Russia, of course has been active in supporting Brexit in the UK and it has fueled discontent with the EU by supporting nationalist political parties that have also taken advantage of popular concerns about the flow of immigrants and refugees from troubled nations outside of Europe.  Donald Trump's rise to power in the US has also been harmful.  He has been critical of the EU and NATO.  He imagines that he can create a new world order in which he negotiates better deals between thFriee US and individual nations. 

Friedman is also concerned about demographics.  The population of Africa, which is larger than the population of the EU, will double in size while the population of the EU is shrinking,  Unless governments in Africa become more able to deal with their economic and social problems there will be more pressure on developed nations to deal with the flow of immigrants and refugees from Africa. Friedman is also worried about the consequences of our inability to deal with global warming.  He did not have much to say in this article about global warming because he did not want to ruin you dinner, lunch and breakfast with bad news.  I suspect that his enjoyment of the great food in Italy has also been diminished by his concerns about our future.

Tuesday, August 7, 2018

Apple And Other Social Media Platforms Remove Alex Jones

Apple removed Alex Jones from several of its platforms; Facebook and others followed suit.  Its about time that the social media took some responsibility for providing a megaphone to conspiracy theorists like Alex Jones.  Apple justified its action by claiming that Jones violated its rule about distributing hate mail.  Conservatives reacted as one might expect.  They claimed that the social media violated Jones' right to free speech.  In other words, publishing fake conspiracy theories that have been harmful to others is protected by the Constitution.  That is utter nonsense.  Newspapers and  other media outlets are not required to provide a platform that liars like Jones can use to become rich.  Conservative media like Brietbart News and Fox News are obviously selective about whose views they make available to their  conservative market.  Moreover, only a small subset of conservatives follow Alex Jones.  It makes no sense to view the Jones decision as a battle between conservatives and liberals.  It should make most conservatives happy that they are not defined by predators like Alex Jones.

Saturday, August 4, 2018

Why Its Hard To Prevent Disinformation Programs On Social Media

Russian disinformation campaigns continue to make extensive use of the social media to divide our nation and to weaken democratic institutions in the US and elsewhere.  This article illustrates one the problems that make it hard to block Russian disinformation programs.  Twitter was aware of several Russian disinformation programs and they shut them down.  Many of those programs were also operating on Facebook but they were not blocked by Facebook.  That is because security personnel at Facebook claim that it is too difficult to precisely determine whether the Russian Twitter operators were  identical to similar operators on Facebook.  In other words, Facebook, and perhaps other social media firms, do not have the technical ability to do their job.  Security executives at Facebook also claim that that they have an obligation to promote free speech.  That concern seems to override the importance of protecting their users from disinformation campaigns. 

This will be an ongoing "arms race" between the social media platforms and the Russians in charge of the disinformation programs.  The Russians have demonstrated the ability disguise their operations faster than the social media can identify them.  The Russians may have a more powerful incentive to win that battle than the social media firms.  The payoff from their disinformation programs is large relative to the expense.  That is not true for the social media firms which have a very different incentive system.

Facebook and the other social media firms are actually in the advertising business.  Their revenue comes from advertisers.  Moreover, the price that they charge for ad placements is directly related to the size of their user base and the amount of activity within their user base.  Provocative placements get more attention than mundane placements.  Its also the case that providing security from disinformation operations is an added expense for the social media firms.  These are some of the reasons why Facebook suffered the largest stock market decrease on one day after they reported their quarterly results.  They reported a large decline in their user base and their profit margin declined as they added thousands of employees to their security force.  Facebook was a much more attractive investment before it became a vehicle for disinformation campaigns. Its defense of free speech is also spurious.  Newspapers make most of their money from advertising.  However, they don't permit everyone to publish unedited articles and they even monitor the comments on their opinion pages.  Protecting free speech on Facebook and other social media is less important than enabling disinformation programs that go well beyond meddling in our elections.  The more general goal of the Russian disinformation campaigns is to exploit cultural and racial issues that divide our society and weaken our democratic institutions.  That extends as well to the "world order" that we have created since WW ll.  They found the perfect tool in Donald Trump.

Thursday, July 26, 2018

Why Will The US Budget Deficit Hit $1 Trillion?

If a business suffers a steep decline in revenue it must find a way to increase its revenue or borrow money.  The US Treasury faces that problem today.  It made huge cuts to corporate taxes and it made other changes in corporate expense accounting which has been great for corporate profits and for shareholders.  However, the tax cuts have not produced the economic growth that was supposed to compensate for the corporate tax cuts as promised by the Trump administration.  Some in the administration still argue that the economic growth it promised is still coming.  On the other hand, several economic forecasters don't believe that will happen.  They expect US budget deficits will continue to grow in response to the huge drop in corporate tax payments.

A Simple Explanation For Trump's Lies

This article describes several of Trump's most recent lies.  The lies are so obvious that they cannot be defended by "alternative facts".  The reason the Trump makes such frequent use of lies is not hard to explain.  He lies about almost everything because a lie is not a lie if his base believes it.  However, Trump faces a problem that is beginning to affect many of his true believers.  Recent polls show that Trump's base of true believers in shrinking.  It is becoming harder and harder for Fox News to convince its market of true believers that obvious lies are not truthful.

Facebook Suffers 24% Drop In Stock Price

Facebook lost $150 billion in market value yesterday.  The shares fell 24% after Facebook's revenue growth did not meet investor expectations.  It reported $13.23 billion in revenue for the  quarter and profit of $5.1 billion but its stock price had been bolstered by Google's report of accelerating revenue growth.  They are in the same market for advertising revenues on their social media platforms.  However,  Facebook lost 3 million users in Europe and user growth in the US and Canada was flat for the quarter.  Facebook expects user growth on several of its other social media platforms but they do not generate the advertising revenues that are produced by Facebook which has suffered from reported abuses of Facebook by Russia and others who have used the platform to spread fake news.  In addition to declining revenue growth, Facebook has been forced to increase its workforce to reduce the abuses of its platform that have been widely reported.

How Trump's Trade War Is Crushing Farm Communities

Rural Americans love Donald Trump.  They voted him into office because rural farm communities have been dying a slow death.  This article describes how Trump's tariff policies are accelerating the death of rural farm communities in the Mid-West.  The Trump administration has provided a $12 billion subsidy to farmers who have been suffering from the loss of export markets.  That may help Republicans in the mid-term election but it won't help farm communities over the longer term.  Other nations have already taken over the export markets that the farmers have depended upon.  Small farmers will be unable to survive and pass on their farms to family members.  Large corporate farms will buy their farms at auction and the communities that supported the small farmers will erode rapidly.  The corporate farms will not use the small community banks that are a pillar of the community and other services that supported the community will evaporate because the market for their services will be too small. 

Unfortunately for the small farmers and many farm communities in the Mid-West Trump does not understand how his tariffs are doing the opposite of what he had promised.  He understands how to run a political campaign that is based upon promises that cannot be realized but he has unleashed a devil for the voters that put him in the White House.  They cannot survive on promises or on federal subsidies. 

Wednesday, July 25, 2018

The Wall Street Journal Has Abandoned Trump's Trade War

WSJ editorial staff has a long history of supporting Republican economic policies and Republican presidents.  After this editorial on his $12 billion payout to farmers, who have lost access to foreign markets in response to US tariffs on imports,  he may have lost the WSJ.  We have an extremely efficient agricultural industry that produces more food than we can consume in the US.  It has depended upon exports to sell off its excess production.  The losses faced by farmers in the Mid-West will be harmful to Republicans in the mid-term elections.  Consequently, the Trump administration provided a $12 billion subsidy to the affected farmers.  A Trump administration official referred to the $12 billion subsidy as "rounding error" in the federal budget.  The affected farmers don't want subsidies, they want to export their products.  The WSJ doesn't like government subsidies either, it would like the  market to operate without government intervention.

The editorial staff of the WSJ will not support US tariffs and the abandonment of free trade by the Trump administration.  It may face of the risk of joining rest of the mainstream media that Trump refers to as "fake news".  The Republican Party has had a long term relationship with the WSJ that it will not like to lose.  It is a major source of ideas and input to the business community that typically votes for Republicans.  The GOP may become dependent on Fox News to support its policies.

Monday, July 23, 2018

How Maria Butina Became A Trump Republican

The Justice Department accused Maria Butina of being a Russian spy.  This article describes how she aligned herself with the NRA and the Christian Right to serve Russian interests in the US.  Russian interests align well with Trump's form of nationalism in the US.
                    In documents filed in Butina’s case, the U.S. Department of Justice wrote: "Moscow seeks to create wedges that reduce trust and confidence in democratic processes, degrade democratization efforts, weaken U.S. partnerships with European allies, undermine Western sanctions, encourage anti-US political views, and counter efforts to bring Ukraine and other former Soviet states into European institutions."

Sunday, July 22, 2018

The Fundamental Contradiction In Trump's Economic Policy

Trump cut corporate and individual taxes to stimulate the economy.  This is a common use of fiscal policy to stimulate economic growth during a recession.  Lower corporate taxes encourages businesses to increase capital spending which stimulates the economy.  Cutting personal taxes also encourages consumer spending.  Capital spending and consumer spending are two of the major components of GDP.  Trump also understand that trade deficits shrink GDP.  He has been using tariffs to reduce imports in order to shrink US trade deficits.  What Trump does not understand is that there is a fundamental contradiction in his economic policies.

One of the contradictions is that tax cuts reduce government revenue.  The government has been forced to pay for rising budget deficits by borrowing more money.  That increases the demand for dollars which raises the value of dollars relative to foreign currencies.  That makes US products less competitive in foreign markets which must be paid for in more expensive dollars.  Consequently, US exports have not grown fast enough to shrink the US Trade deficit. 

The other problem with Trump's policies is that the Federal Reserve uses monetary policies to set interest rates.  The Fed raises interest rates when it wants to slow the economy down in order to deal with the threat of price inflation.  It has been raising interest rates in slow steps and it plans to continue using monetary policy to push interest rates upward.  That has a depressing effect on economic growth because businesses and consumers will borrow less money as the cost of borrowing increases. 

Trump sold his tax cuts and his use of tariffs as a plan to stimulate economic growth.  That plan has not worked as well as he hoped because it has put pressure on budget deficits and it has made US exports more expensive.  He has been using his Twitter account to criticize the monetary policies that are controlled by the Federal Reserve.  This is consistent with his usual practices.  He never takes responsibility for decisions that don't work.  He is setting the stage to blame the Fed for the failure of his tax and tariff policies to stimulate economic growth.  Ordinarily, US presidents might dislike the monetary policies that are being implemented by the Fed.  However, the usually do not publically criticize the Fed which was set up to be independent from the government.  Trump is not a typical president.  His attacks on the Fed are just the beginning.  He will maintain that his policies were the greatest use of fiscal policy in US history.  The Fed will have to take responsibility for their failure.

Wednesday, July 18, 2018

George Will Is Not Happy With The Unfit Pretender In The White House

George Will is a nationally syndicated conservative columnist. His description of Donald Trump in today's Washington Post is not the kind of description that one expects from a conservative columnist who usually defends Republican policies.  George Will is only one of many conservative opinion leaders who has abandoned a man who is embarrassing to him and to our nation.  Fox News may be the only reliable major source of propaganda supporting Trump after George Will's exit. 

Tuesday, July 17, 2018

What It's Like Being Led By A Genius In America

Donald Trump has a very simple explanation for the problems that he believes we have in the US.  We have lots of problems because we are stupid.  Trump's cure for our stupidity is to rely upon his genius.  Dana Milbank lists all of the dumb things that Trump blames for our problems.  He then offers his genius to guide us towards deliverance.  Trump's son-in-law Jared Kushner supports Trump's claim to genius, but it may not be as strong as Trump would have liked.  Kushner stated that Trump is a political genius and he may be correct.  He has sold himself as a genius to his base.  More Republicans support Trump than they have for any previous US president with the exception of George W. Bush following 9-11.  Trump may pass Bush's record if he continues to put his genius on display by behaving like the narcissist that he is.  His base loves him when he is at his narcissist best like he was on his TV show.  They want him to fire everyone like he did on his TV show and run the country with his genius.

David Brooks Writes The Obituary For The US Aliance With EU

The president is not all knowing.  They depend upon members of their staff to inform and advice them.  Donald Trump is not that kind of president.  He does not need them because he is primarily driven by his self-interest.  Unfortunately, his self-interest is not aligned with the preservation of the US alliance with Europe and the liberal world order that was led by the US following WW ll.  Moreover, it is pretty clear that Putin has information about Trump that could destroy his presidency  which he hopes to transform into a dictatorship.  He ran his business empire as a dictator and he is extremely uncomfortable with the institutions that were put in place by our founders who understood many of the risks inherent in a democracy.  He spends more of his time in office nurturing his populist base with tweets and campaign rallies because that is his most valuable asset.  The Republican Congress is dependent upon that base and Trump uses it against Republicans who defy him.  The Republican Congress has no interest in acting as one of the checks and balances that was put in place to protect our system against demagogues.   Even worse, many Republican candidates for office are running their campaigns as mini Donald Trumps.  Trump is a featured speaker at their rallies.

David Brooks has been an influential conservative Republican for most of his life.  He has tried hard to make excuses for Trump's weaknesses and focus on some his strengths in many of the opinion pieces that he publishes in the NYT.  Trump's meeting with Putin was the last straw for David Brooks.  Trump ignored the conclusions of his intelligence agencies about Russian meddling in the 2016 election and accepted Putin's denial.  He claimed that he could not understand why Putin would help him to win the election.  David Brooks' obituary goes well beyond Donald Trump.  He describes the important role that European ideas and values played in the development of democracy in the US and the important role that the US has played in defending and nourishing its European heritage.  He argues that Trump exploited several of the flaws that have been harmful to the EU and to liberal ideals in the US.  He does not seem hopeful about our ability to deal with the monster that we created.

Sunday, July 15, 2018

The Russian Organization That Is Responsible For Cyber-Warfare

Mueller indicted 24 Russians who managed the GRU organization that successfully interfered in the US election that put Donald Trump in the White House. The GRU is not even well known in Russia but It has been a critical part of Russian efforts to implement  foreign policy objectives for many years.  Intervention in the US elections has increased awareness of the GRU, but it has been actively involved in implementing Russian foreign policy elsewhere as well.  It encouraged Brexit in the UK and it was active in several recent European elections.  Closer to home, it has been active in Ukraine and in other former USSR republics that border Russia.  Russia has suffered huge losses in several wars from foreign powers that marched through its border states.  It is also not happy with NATO states that defend many of its border states.  Undermining NATO is also one its cyber- warfare objectives.  It is not surprising the Russia used cyber warfare in the US to elect  a president who is not a fan of NATO or the European Union.  Russia's economy is also based upon the export of gas and oil to energy hungry states.  Trump has been a key ally to the Russian economy by supporting the fossil fuel industries in the US and by removing the US from the Paris accord.  Putin helped to put a ally into the White House who shares many of his national interests. 

The Art Of Deception And Donald Trump

Most of us have learned a lot about Donald Trump by watching his performance on the world's greatest stage in the White House.  This video features the author of a book that describes the real Donald Trump.  It was written by a Pulitzer Prize winning journalist before Trump won the GOP primary and eventually the presidency.  He predicted that Trump would present the greatest threat to the Constitution in our recent history because he cannot tolerate bounds on his ability to do whatever he pleases.  He also predicted that he would fill his government with "yes men" because that is how he ran his businesses.  Both of these predictions have been borne out during his presidency.  He wanted to call his book "The Art Of Deception" because he believed that this was Trump's real skill.  The lawyers for his publisher nixed that title to avoid law suits that were sure to come from Trump. Unfortunately, we have learned that it is possible for a master of deception to win a presidential election in the US and that Trump has used this skill to capture an important segment of the voter base that the GOP has cultivated for decades.  Trump is now able to neutralize the Republican controlled congress by turning that base against GOP legislators who are not "yes men".

The video is well done and quite lengthy.  However,  there is more to learn about Trump in this video that will surprise even will informed Trump critics.  For example,  Trump has sold himself as a successful billionaire with a Midas touch.  He has certainly earned a lot of money but his financial success had more to do with the art of deception, and the threat of law suits, than to Trump's business acumen.  The book provides many examples of Trump businesses that were mismanaged because Trump did not really understand how to operate many of his businesses.  He made it worse by putting loyalists in key management positions as he has done during his presidency.  Many of Trump's businesses failed because poor management led to financial ruin.  The US government cannot go out of business like several of Trump's businesses.  However, the damage to our economy, and to our system of governance has been set in motion by many of Trump's policies.  Moreover, the two greatest threats to our existence are nuclear warfare and global warming.  Trump has increased the risk that we face from both of these catastrophes in less than two years in office.

Thursday, July 5, 2018

Who Wrote Trump's Best Selling Book?

Trump claims that he has written several best selling books.  The "Art Of The Deal" is by far his best selling book.  The writer who actually wrote the book for Trump has a different story to tell.  He said that Trump is incapable of even reading a book.  He went on to say that Trump did not write a single word in his best selling book.  One of Trump's biographers makes a similar claim.  Trump's tweets are not very helpful in supporting his boasts about his writing skill.  He frequently misspells simple words.  For example he wrote "pour" when he meant "pore" in a tweet intended to support his claims about writing skill.

Wednesday, July 4, 2018

All Time Global Heat Records Set While Trump Ignores Problem

This article describes the heat records that have been set across the globe.  While some of the individual records may not be due to global warming, the global pattern of heat records is a consequence of global warming.  This is only the beginning of what we can expect as emissions build up in our atmosphere.  Of course, Republicans led by a president who does not know the difference between the Celsius and Fahrenheit metrics, have placed a global warming denialist, who represented the oil industry interests in his home state of Oklahoma, in charge of dismantling the EPA.  Trump also warmed the hearts of fossil fuel donors to him and the Republican Party by removing the US from the Paris Accord.  He will "Make America Great Again" by doing what he can to destroy our planet.  That is consistent with his efforts to destroy democracy in the US and to lead the populist movement in Europe.  His legacy will be fixed if he can complete his destruction of democracy in the US and accelerate the destruction of our planet.  Unfortunately, his base of true believers will remain on his side.

Tuesday, June 26, 2018

David Brooks Argues That You Can't Be A Conservative And A Republican

David Brooks joins a growing number of conservative opinion leaders who have divorced themselves from the Republican Party.  Many Trump supporters call themselves conservatives.  Brooks explains why Donald Trump is the arch enemy of conservatism.  He does this by defining the central concepts of conservative thought.  Neither Trump, or most of his supporters, adhere to the basic principles of conservatism.  They are members of a tribe that defines itself by its opposition to members of an alien tribe. The Republican Party has also been an advocate for market fundamentalism which also divides communities rather than building them.  This leads Brooks to a sad conclusion.  He can no longer be a conservative and a member of the Republican Party.  He is now a man without a political party

Donald Trump probably cares little about conservative opinion leaders like David Brooks, George Will, Jennifer Rubin and others.  However, they played an important role in the Republican Party by providing it with an ideology that has been attractive to many members of the party.  It is now a party without an ideology that is compelling to a growing number of thoughtful Republicans.  Donald Trump has created his own political party that is based upon himself and the personality of power that he has tried to establish in his base.  In the process he has exposed the Republican Party for what it has become.  A party without a compelling ideology, and support from intellectuals like David Brooks and others, will not have a long half life in the US.

Saturday, June 23, 2018

George Will Tells His Readers To Vote Democratic In Novermber

George Will is regarded as Mr. Conservative by the millions of readers who read his syndicated column in the Washington Post.  He has finally realized that Trump is not a conservative and that the Republican congress has been unwilling to carry out its duty to defend the Constitution.  That failure led him to tell his readers not to vote for Republicans in midterm elections.  He can't bring himself to tell his readers to vote for Democrats this fall, but they have no other choice if they agree with Will's description of Trumpism and Trump's contempt for truth and the rule of law.  Will is highly respected among traditional conservatives.  Many of them will find it difficult to vote for Republicans who have abandoned conservatism, and who are unwilling to defend the Constitution against Trump's efforts to consolidate his political power at the expense of congressional authority.  Of course,  many  Republicans are not really traditional conservatives like George Will.  They are better described as anti-liberals than anything else. 

Tuesday, June 19, 2018

The End Of The American Empire And American Exceptionalism

Paul Krugman reminds us about the ideals that led to the creation of the American empire following WW ll.  They have been replaced by a new set of ideas that mark the end of American exceptionalism as well as the end of the liberal order that it had created.  Donald Trump is doing what he can to undermine the world order that we helped to establish.  He wants to make "America Great Again" by adopting a set of values that made America a great nation.  Unfortunately, he is being supported by a political party that has based its political future on a set of values that may destroy the world order along with our economic well being.  They are the values that may make it possible for Trump to establish an autocracy that give his the power and adoration that he desires.

David Brooks Claims That Amnesty Has Become A Cruel Word Under Trump

David Brooks provides examples of how Trump supporters respond to all efforts to deal with the problems of illegal immigrants by shouting "amnesty".  Amnesty must be avoided at all costs because all violations of the law must be punished.  He argues that this is a departure from conservative philosophy which has been opposed to statism  because reality it more complex than state bureaucrats can imagine.  He concludes that Trump's political party has become a party of liberal trolls.  His base rallies against every idea that can be connected to liberalism.  The Republican Party has lost its moral base in the process. 

Brooks is correct.  The Republican Party is not a conservative party.  Conservatism has been diluted into anti-liberalism.  The implication is that the Republican Party was a conservative party before the arrival of Donald Trump.  In my view, Trump's takeover of the Republican Party tells a different story.  It has not been a conservative party for a long time.  It cultivated the base that Trump has exploited since he assumed the presidency.  Trump just made a process that has been underway for decades more visible.  David Brooks, and many of his friends in the GOP, may be conservatives but they have not been representative of the Republican Party since Richard Nixon adopted his "Southern Strategy".  It captured the South but it lost its conservative soul along the way.

Tuesday, June 12, 2018

The US Trade Surplus That Trump Does Not Discuss

We normally look at trade balances by comparing US exports with US exports.  Indeed, the US imports more than it exports.  However, if we look at the sales of US subsidiaries in foreign countries we get a different story.  For example, GM sells more cars in China than it does in the US.  US corporations have a $1.4 Trillion surplus with the rest of the world.  That is great for them but its impact on US jobs is ambiguous.

Monday, June 11, 2018

Trump's Russia First Rants In Quebec Do Not Align With America First Slogan

Paul Krugman nails it.  He explains why Trump promoted Putin and Russia and advocated trade polices which do little for most Americans.  Both of them have a contempt for democracy; they both prefer autocracy to democracy.  My guess is that Putin could also end Trump's presidency if he chose to release information that he has about Trump and his campaign.  He is in the catbird seat.

Krugman points out all of the economic ignorance displayed by Trump and his top economic advisers.  They can get away with this nonsense because most of Trump's base has little understanding  about these issues.  They enjoy watching Trump act powerful and they may believe that his trade policies are in their best interest.  They are primarily campaign slogans for an endless Trump campaign.  He prefers campaigning to running our government

Cuts In US Corporate Taxes Fails To End Use Of Tax Havens

This article lists the largest tax haven nations that are used by global corporations.  They tend to have a small number of employees in relation to their taxable profits.  That is, they add very little value to the products produced for sale in those nations.  We live in a world with global corporations that organize their accounting to serve their own purposes. Nation states seem unable e their efforts to reduce taxation since they are not organized to control globally organized entities.  The net effect is to shift the tax burden to local residents.

Wednesday, May 30, 2018

Tom Friedman Does What Conservative Commentators Should Have Done

David Brooks, and many conservative opinion leaders, are not happy with Donald Trump in the White House.  Since they can't do their normal job of supporting a Republican president, they have turned to sociology or political philosophy in their opinion pieces.  This is not a time for abstract ruminations.  It is a time for action.  Tom Friedman knows what we should be doing.  Our only objective is to elect a Congress that will block Trump's efforts to destroy our democracy and perhaps the global economy.  His argument is compelling.  He is not a Democrat arguing for liberal policies; he is a citizen who understands the peril we face with Trump in the White House along with a Republican congress.

Tuesday, May 29, 2018

David Brooks Argues That The Professional Class Created Populism and Trump

This is the third article that I have read in the last week which attacks the upper middle class for the rise of populism and Trumpism.  Brooks, and other conservative commentators, are making a case for an enlightened aristocracy which has the proper values that are absent in our professional class that is based upon meritocracy.  That critique is the foundation of Trumpism.  He promised to drain the swamp of the educated elite and replace it with officials who care about the less educated class.  It turns out that he has populated his swamp with billionaires who cut their taxes which will be paid for by cutting social programs, and the public education system which produced the meritocracy.  The billionaire class in the Republican Party is also responsible for making our elected officials dependent upon their generosity.  The cost of running political campaigns has been rising dramatically since the Supreme Court opened the gate for unlimited contributions to political campaigns.  Its impossible to run for congress, or the presidency, without funding from the billionaire class.

I attended several protests this year which attacked Trumpism.  The bulk of the protesters came from the "educated elite" which Trump, and now conservatives like David Brooks,  are blaming for our problems.  The "educated elite" are also leading the defense of our institutions that protect our society from demagogues like Trump.  A social hierarchy based upon merit has its faults.  On the other hand, it has served us better than the aristocracy that preceded it.  There is probably no better example of a meritocracy than the graduating class from Harvard's school of Medicine and Dentistry.  The students selected to speak at the ceremony, as well as the deans,  focused their attention upon better serving a public that does not have sufficient access to healthcare.  The graduating class was heavily populated with women and minorities as well.  One speaker reminded the audience that the aristocrats that managed Harvard's medical school in its early years led a protest movement to reject a black student who had been admitted.  Several of the key speakers at the ceremony were black and many were from other nations that will benefit from the leadership in healthcare that will be provided by the Harvard graduates.  Most of the Harvard graduates will earn a good living.  Their children will also have advantages that will enable many of them to get a good education.  However, they will better serve our nation and the healthcare system that requires their leadership than the aristocracy that they have replaced.  Ever since the publication of Thomas Piketty's book, which focused our attention about the relationship between capitalism and inequality,  conservatives have stepped up their attack on the liberalism that they see in our education system.  They have joined Donald Trump in blaming our "educated elite" for the rise in inequality.

Sunday, May 27, 2018

Can The US Economy Grow At 3% Rate?

The Wall Street Journal editorial team invited four participants to debate whether the US economy can grow at 3%.  Two of the debaters were on the positive side and the other two were skeptical about reaching a 3% growth rate.  This video of the debate provides the details of the arguments that were made.  The audience, which was invited by the WSJ editorial team, gave a narrow margin of victory to the negative team.  That result is rather meaningless.  Its unlikely that members of the invited audience changed their minds as result of the debate.  That is because economic debates are generally influenced more by ideology than they are by facts.  I have provided an overview of the issues discussed in the debate by both sides.

The pro 3% growth team consisted of an economist who believes that the Trump tax cuts, which he advocated, will deliver a 3% growth rate.  He was joined by a member of the WSJ editorial staff who argued that the private sector could reach the 3% growth rate as long as the government let market forces work their magic.  She argued that government welfare programs give workers an opportunity to avoid work and that innovations in public education would do little to improve human capital.  Private industry could do a better job than government.  She also argued that government regulations discourage capital investment by private industry.

The other side of the debate was taken by an economist from Brookings and an economist who has been an economic advisor to Democratic presidents.  They argued that the economic growth rate is determined by a number of factors which are very difficult to alter.  Demographics are important because the number of workers in the workforce have a huge effect on the potential output of the economy.  Another important factor is the productivity growth rate because that affects the output per worker.  The demographics are not positive; the population growth rate is lower than in was during our periods of higher economic growth, and current policies will lower the number of immigrants entering the workforce.  The productivity growth rate has been stuck at a relatively low rate in recent years and it would be difficult to substantially alter that growth rate.  The labor force participation rate in the US has also been falling.  That is, a smaller portion of a shrinking labor force is entering the job market.  Fewer men are participating in the workforce, and the female participation rate which had promoted growth earlier, has begun to decline.  Both of the debaters on the negative side believe that government programs might improve the labor force participation rate as well as labor force productivity but they don't expect big changes on either of these important factors.

I think that most economists would share the views expressed by the negative team.  Their views are also shared by the bulk of the economic forecasting community.  In my opinion, the cheer leaders on the positive side either believe that tax cuts will perform magic, despite the demographics and stagnant productivity growth,  or that the market will perform miracles if we could get government out of the way.  That is also the typical position advocated by the liberatarian WSJ editorial staff.

Friday, May 25, 2018

What Should Be Done About Trump's World Which Is Looking More Like Turkey?

David Brooks has not figured out what to do about Trump.  He, and many of his Republican friends are frustrated by Trump.  They don't like him but he, and other Trump bashers, are like puppets on strings controlled by Trump.  He argues that Trumpism is celebrity consuming governance.  Commentators like Brooks have tried to refute Trump by pointing out discrepancies between Trump's claims and the facts.  That has not worked because Trump is a marketer who is skilled at creating images.  It is hard to refute images with facts.  Many choose to believe in his images.  Consequently, Trump wins the game because he monopolizes attention.  If one of the goals of fascism is to monopolize attention, Brooks and others are playing a losing game in which refutation by illustrating Trumpian fallacies  does not work.

Brooks is probably right about how Trumpism works.  He seems to have given up.  Perhaps he should focus more attention on Trump's enablers in his favorite political party.  The best way to end Trumpism is to encourage his friends in Congress to do their jobs.  They believe that they can win elections and retain their jobs by supporting Trump.  They don't seem to understand that they are turning themselves into puppets in the process.  Trump will humiliate them with tweets whenever they attempt to do what they are supposed to do.  Some of them might decide to do what they were elected to do if Brooks and others help them to resist being turned into Trump enablers.  There is no middle ground in that war.  The only answer is to focus on his enablers in Congress and in the alt-right media.  Turkey has enabled an autocrat.  Turkey is now facing an economic crisis and it will find it very difficult to correct its course.  Good governance is primarily important during a crisis.  We are not Turkey, but weak governance in the US may lead to a crises that requires good governance.

Tuesday, May 22, 2018

What's The Matter With Europe?

Paul Krugman provides his analysis of the economic and political problems in Europe.  The common currency, and the mistaken imposition of austerity by its leadership, were the primary economic problems.  It was held together, however, by a commitment to democracy by its elite.  That commitment is now withering away in Italy, Hungary and Poland.  Communism is no longer a threat to democracy in Europe but fascism may be its true passion.  Poland did not adopt the common currency and its economy escaped the damage created in many nations by common currency.  However, its democracy is being systematically replaced by an autocracy fueled by ethnocentrism.

The US economy has recovered from the financial crisis but Trump has been systematically attacking the institutions established by the Constitution to limit his power and authority.  He is being aided and abetted by the Republican Party which he has captured by assuming control over the far right base which is now the core of the radicalized party.  The radicalization of the Republican Party has been underway for decades.  The process was largely ignored by the central media which adopted a false equivalence policy towards our two major parties.  They are being rewarded now by Trump who has convinced his base that they provide "fake news".  They get their news from sources that might just as well be housed in the White House.  Krugman is not very positive about the outcome of this process.  The Republican Party has redefined conservatism.  It is closer to fascism than the form of conservatism that once defined the Republican Party.

Tuesday, May 15, 2018

The Elections In India Are Clouded By Fake News From Social Media

WhatsApp is owned by Facebook.  This article describes how it has become the vehicle for distributing fake news during the election cycle in India.  Some argue that the social media provide an outlet for information that enhances democracy.  It provides an inexpensive way to distribute information that reduces the influence of the "mainstream media" in elections.  That is true, but the mainstream media are constrained by journalistic standards and laws that make it much harder to distribute false and misleading information.  We have not figured out how to prevent fake news from the social media from totally distorting democratic elections.  

David Brooks Is Trying Hard To Be Positive About America

David Brooks is a conservative who had been comfortable as a Republican until The Donald captured the Republican Party.  In this article he describes himself as an old fashioned Whig which had an ideology similar to his own.  He claims that the Whig ideology is alive and well at the local level, and he provides several examples in which local communities have been revived by citizens with a community spirit.  He does not believe that localities, acting alone, can restore our nation in the Whig tradition.  He suggests that we can arrest the decay that has been underway for several years by nationalizing the efforts that are underway at the local level in many parts of our nation.  I would like to believe that Brooks can inspire the hopefulness that he finds at the local level to the national level.  However, that is more easily said than done.  Donald Trump's takeover of the Republican Party was not an accident.  He exploited the divisions in America that had become the foundation of the Republican Party.  There may be some Whigs left in the GOP but most have been silent as the Trump base has been organized into a position of power within the party.  Trump spends most of his time trying to retain control of his base and positioning himself as their powerful leader.  We will have to see whether the Democratic Party can deal with the divisions within its party and win enough seats in the mid term elections to loosen Trump's control of the national government.  There are no Whigs running for election in 2018.  The Republican Party must be thrown out of power in order to contain Donald Trump.  They have been too willing to give Trump what he wants in order to retain whatever power they think they might have in a Party controlled by Trump.

Saturday, May 12, 2018

Trump's "America First" Plan To Reduce Drug Costs Is Underwhelming

The Trumpster announced his plan to cut drug prices that brought cheers from drug companies which had been concerned that he might be serious about cutting drug prices and their profits.  Instead of doing what he promised on the campaign trail he bragged about changes that will have little impact on drug prices. Wall Street reacted to his announcement by bidding up drug industry stock prices by 2.7%.  Most importantly, he did not give Medicare the authority to use it use its purchasing power to negotiate directly with drug companies on drug prices as he had promised on the campaign trail.  Other nations typically do what Trump decided not to do.  They negotiate directly with drug companies to get lower prices than they charge US customers.  Trump's plan calls for a end to that practice.  He wants to raise the prices that they pay for the same drugs.  It is unlikely that they will oblige the Trumpster.

Saturday, May 5, 2018

Donald Trump Gives Thanks To God In Jest

Dana Milbank provides us with the prayer that Donald Trump might have given at the National Prayer Meeting.  He decided to recite several of his tweets instead of saying much about prayers.  Milbank could have had a career as a comedy writer if he had not decided to become a journalist.

Friday, May 4, 2018

Our Place In The Universe Is Not Very Special But It May Be Understood

I posted this article which has nothing to do with economics, politics or with the behavior of our government that has declared a war on objectivity, when facts do not confirm the falsehoods of our president and his followers, because it describes an effort to demonstrate that the universe is understandable.  We may not be able to understand institutions and systems created by flawed human beings but we might be able to understand the universe.  I welcomed this distraction.

One of the things that we have learned about the universe is the concept of "cosmic inflation".  That is, the universe is growing so fast that there are regions of light that will never reach observers on earth.  Moreover, there may be multiple universes.  If the number of universes is infinite it may spell the end of science as it is understood by physicists.  The implication is that there are phenomena which can never be tested or directly observed.  This article reviews a paper by Steven Hawking which suggests that the number of universes may not be infinite.  Moreover, our universe remains special and is discoverable by scientific method.  It would be nice to believe that even if we don't understand our universe completely,  it is knowable and subject to scientific discovery.

After reading the article I stepped back from the problem of infinite universes, and the end of science, and reflected on the universe which we think we understand.  Our earth is in a galaxy that contains billions of stars like our sun.  Each of these stars has planets in orbit around them and some of them might have the conditions that make life as we know it possible.  Moreover, there are billions of galaxies like the Milky Way which also contain billions of stars.  This means that our planet and the forms of life on it are not unique.  There must be life elsewhere in the universe.  Our planet, and the wars that we have endured during our brief history, have often been about the gods which we have invented to reserve a special place for humans who follow their favorite god, or their favorite version of history and the institutions that we have created.  We lack the humility which physicists and most scientists have about our ability to understand what we don't know.  This gives me some respite from spending too much of my time trying to figure out how we can preserve some of the institutions that have worked better than others over time.  They will prevail despite the attacks against them that we see in Washington and elsewhere.

Thursday, May 3, 2018

Corporate Net Profits Highest Since 2011

Corporate net profits expanded dramatically in the last quarter.  Net profits increased because of rising profits and a cut in the corporate tax rate from 35% to 21%.  Fifty percent of the increase in net income for 200 large corporations was due to the cut in the corporate tax rate.

The increase in net income led to a big increase in earnings per share (EPS).  Stock prices are directly related to EPS.  Consequently, shareholders became wealthier due to rising stock prices;  they also benefited from corporate stock buybacks which makes each share more valuable, and from an increase in corporate dividend payouts.  Dividends and capital gains on stock sales are also good for shareholders.  They are taxed at much lower rate than earned income.

Its very clear how shareholders benefited from Trump's tax plan.  Its less evident that middle class taxpayers did nearly as well as shareholders.  Of course, the tax bill was sold as a middle class tax plan by the huckster in the White House and his allies in congress.

Wednesday, May 2, 2018

Mike Pence Call's Sheriff Joe A Defender Of The Rule Of Law

Sheriff Joe was declared guilty of violating the rule of law for many of the illegal things he did to prisoners under his charge by a court in Arizona.  He also refused to obey a court which demanded that he cease and desist from illegal acts.  Donald Trump pardoned Sheriff Joe during a campaign event in Arizona.  Vice President Pence gave a speech in which he called Sheriff Joe a defender of the rule of law.  Apparently, Trump and Pence both believe that law enforcers who violate the rule of law deserve praise as long as their illegal acts are supported by Trump's base.  The top two officials in our government have no respect for the rule of law if the law does not serve their political and personal purposes. 

Apple Announces Plan To Buyback $100 Billion Of Its Stock

The Trump tax bill provided Apple with access to over $200 billion in profits that have been held tax free in Europe.  Apple announced that they will use $100 billion to buyback their own stock.  That will be great for shareholders since it will increase the value of their stock.  Like many Apple shareholders I will be a bit wealthier.  However,  I won't spend the money that Apple decided to return to me; nor will most Apple investors.  We will all be a bit wealthier, but the buyback will do nothing for the economy, or for most of the people that expected to benefit from Trump's tax bill. Moreover, the loss of tax revenue to the government from the tax bill will increase federal budget deficits.  That will put pressure on government social welfare programs that they depend upon for support.  That includes many who voted for Trump.  Some of them would rather lose their benefits as long as they will also be reduced for citizens who they don't like.

Tuesday, May 1, 2018

Paul Krugman Explains Why Tax Cuts Don't Raise Wages

The major thrust of the Republican tax bill was to cut taxes for US corporations.  Of course, that does not excite most voters who want something for themselves.  Republicans always promise their voters that tax cuts will produce more jobs and increase their wages.  They defended the corporate tax cuts by claiming that corporations would increase investment spending.  That would stimulate economic growth and raise their wages.  Paul Krugman describes how that process would work if indeed corporate executives increased business investment.  So far, however, corporations have not used the influx of cash to increase business investment.  Consequently, the tax cuts have not had much of an impact on job growth or wage increases.  Corporations have used most of their cash influx to buy back their own stock and to increase dividend payouts.  That has been good for shareholders and corporate executives, who are also large shareholders, but it has not done much for most Americans who are not large shareholders.

Most economists are not surprised by this result.  Corporations tend to make capital investments when the expected return on investment exceeds the interest rate.  Interest rates have been low and corporate profits have increased retained earnings which might also be used to fund investment. They were not waiting for extra cash from tax cuts to make capital investments. They could also fuel growth through mergers and acquisitions instead of making capital investments. 

Friday, April 13, 2018

Senators Who Still Own VCR's Put Tech Ignorance On Display

One of the outcomes of the senate hearings on Facebook is that they are trying to figure out how to regulate a Facebook that they don't understand.  This article contains a handful of the dumbest questions that exploded on Twitter.  Its really hard to believe.

Wednesday, April 11, 2018

This Is Your President

The people who should be reading this editorial by the NYT will be reading Breitbart News, watching Fox News and listening to hysterics on talk radio.  They have been insulated from information provided by media sources that have guided our nation for decades.  The real fake new services in our nation have convinced them that news which must pass editorial reviews, and is produced by trained journalists,  only tells them lies about our liar- in- chief who creates chaos in the White House.  However, the newspaper of record in the US continues to do its job in this editorial.  It offers a brief history of the person that we put in the White House.  It is not at all surprising that his tainted character and his personality disorder has followed him to the White House where he has been trying to run our nation with his Twitter account.  This was not an easy decision by the editors.  I can't recall another time in our recent history when reputable news sources like the NYT and the Washington Post have called a sitting US president a liar who is unfit to be in the White House.  This may not affect those who support this president but it serves an important purpose.  It sets the historical record straight and it will be read by future generations who will be studying an era in which a tyrant was provided with the powers of the presidency.  They will also learn about the real fake news sources that aided and abetted Donald Trump; the cowardice of the Republicans in congress and the billionaires who fund the fake news and the campaigns of both political parties.

Tuesday, April 10, 2018

Asymmetric Polarization And Economic Reporting By Paul Krugman

Paul Krugman just invented a new term that describes a problem that has bothered him for a long time.  Our major news organizations, including the NYT and the Washington Post would like to give equal time to conservative economists so that they can balance liberal and conservative ideas in their reporting.  That should be easy because there are lots of respected conservative economists to choose from.  Unfortunately, they have only been able to come up with sycophants who are not respected in the profession.  He gave us a few examples of the duds who have recently been given the opportunity to display their ignorance in the service of balance.  He invented a new term for this problem: He calls it "asymmetric polarization".

We have asymmetric polarization for two reasons.  In the first place, there is no problem finding liberal economists who make an honest effort to analyze and describe economic policy issues.  The other side of the problem is that conservative politicians are not interested in ideas from conservative economists that do not validate their policy proposals.  Their reporting would have no influence on the policy debate within the Republican Party.  Consequently, the media are forced to provide a platform to "economists" who will sing the praises of Republican economic policies that never die. Krugman calls them zombie ideas for that reason.  Like zombies they are immortal.  Its always a good idea to cut taxes for the rich, and its always a good idea to cut regulations that donors to the Republican Party don't like etc. etc.  Unfortunately, Donald Trump's plan to implement tariffs to balance US trade deficits with China creates a real problem for the Republican Party.  It runs counter to the free trade ideology that has been embraced by the great majority of economists and by both political parties.  Its been interesting to watch conservative economists attempting to put a positive spin on Trump's trade policies.  We do have a trade imbalance but tariffs are not the best way to balance US trade.  The stock market has spoken on this problem.  The market does not like chaos.

Wednesday, April 4, 2018

Tom Friedman Disputes Putin's Leadership Of Russia

David Brooks argued, correctly, that Trump has been a terrible leader of the US and the Western world.  He then contrasted Trump with Putin's leadership of Russia and its Eastern allies who are spreading autocracy in Europe.  Tom Friedman would agree with Brooks about the failures of Donald Trump, however, he is not willing to put the crown of successful leadership on Putin.  In the first place, he disagrees with Brooks about the Russian economy.  In particular, he argues that Russia has done little to promote human capital development and that Russia has discouraged entrepreneurs; the judicial system does not protect them from oligarchs who ignore their patents and assume control of their businesses.  Friedman believes that the Russian economy is dependent upon the oil and gas resources that will become less valuable as the rest of the world battles global warming,  He also claims that Putin's foreign policies have been harmful to Russia's economy because they have led to Western sanctions that reduce Russian access to foreign capital.

In a more general sense, Friedman accuses Putin of behaving a lot like Donald Trump.  Both of them try to portray themselves as strong leaders; both of them exploit the religious beliefs of their base, and they are in continuous campaign mode.  That is, self glorification is more important than anything else.

Tuesday, April 3, 2018

David Brooks Explains Why Putin Is The World's Most Influential Leader

With Donald Trump in the White House there is an absence of leadership in Western democracy.  Vladimir Putin is an intelligent and powerful leader of Russia;  his 80% approval rating in Russia is based upon his economic performance since assuming power.  Putin inherited a terrible economy that had been destroyed by a failed effort to transform the communist state into a market economy.  Life has gotten better for most Russians since Putin came to power.  He has also been a successful advocate of authoritarian leadership in many parts of the world.  Donald Trump's rise to power in the US, and his performance in the presidency, has demonstrated the flaws in democracy.  We elected an ignorant and psychologically challenged president who has exploited divisions in our nation to secure his position.  The US, under Donald Trump, has defaulted on the position that it earned by its leadership in the aftermath of WW ll.  It must have been very hard for David Brooks to make the case that he made for Putin.  Donald Trump, with a lot of help from the Republican Party, has made his decision easy. 

Why Poor States In US Are Getting Poorer

Paul Krugman explains why poor rural states have been getting poorer while rich urban states are getting richer.  The convergence process in which poor rural states, like Mississippi, had been gaining on rich states, like Massachusetts, has been reversed.  The reversal is partially due to broad economic changes; the richer states have been getting richer because the high paying jobs require an educated work force.  On the other hand, government policies in poor states like Oklahoma and Kansas have exacerbated their relative impoverishment.  They have cut taxes and reduced spending on education and other programs that would have increased opportunities for the poor.  They have even refused to take federal funds for healthcare services because they have an anti-government bias.  In other words, Republican ideology is partially responsible for their economic decline.  Trump promised to improve their economic circumstances but he has taken steps which will accelerate their economic decline.

Thursday, March 29, 2018

Is Facebook A Frankenstein?

The Frankenstein monster was an unintended consequence.  The intent of his creator was to make humans immortal.  One could say the same thing about Einstein's discoveries that led to the atomic bomb.  Facebook may also be a potential Frankenstein.  It was developed at Harvard so that students could learn more about other students that might be dating material.  It quickly spread from Harvard to other colleges.  Today it is a business provides free services to users so that Facebook can turn the information, that users provide with every click, into information that makes it easier for advertisers to target the ads that they place on Facebook. That is what Facebook's business is all about.  Providing a free service to users produced $20 billion of net revenue to Facebook.  That has been good for Facebook but it may not be good for its users or for society.

Facebook understands that it may have violated individual privacy rights by selling information about you to potential advertisers.  It has a hard time dealing with a different problem: it has created a monster that is harmful to society.  In a sense, Facebook and other social media, which have a similar business model, have been harmful to the democratic process as well.  It has been used to suppress voting by minorities in our recent elections, and it has provided an inexpensive way to distribute fake information to potential voters whose clicks on Facebook are used to target them. 

Facebook claims that it is taking actions to protect the privacy rights of its users. This flies in the face of its business model.  It is in the business of selling user data to advertisers.  Actions that it takes to restrict access to user data makes it less attractive to advertisers.  Actions that it might take to limit disinformation programs runs against its defense of freedom of expression.  Facebook does not want to devote the resources that would be required so that it can behave like our major media which have to protect their reputation for being honest brokers of information.  It is being used as weapon by autocrats use it in surveillance and as a disinformation tool.

Why Repealing The Second Amendment Is Not The Solution

The second amendment to the Constitution does not limit the ability of government to regulate the distribution and type of guns.  The NRA has convinced some of our citizens that efforts to regulate the guns violates their constitutional rights.  That is nonsense and the protesters who marched against guns understand that.  They said nothing about the second amendment.  They focused on the real problem.  The NRA and other super rich supporters of NRA have prostituted many of our politicians. The only workable solution is to vote the prostitutes out of office.

This article, by a constitutional lawyer,  describes government regulations that have been used to regulate guns and that the second amendment does not protect the rights of citizens to possess military weapons like those that have been used in many mass shootings.  Moreover,  many citizens enjoy using guns for hunting and other forms of recreation.  Their rights should be protected while government deals with the use of weapons that are socially harmful.

How Donald Trump Won The Election

The answer to the above question is that Trump's policies were more appealing to working class whites than Hillary Clinton's policies.  Clinton won the majority of votes from college educated whites, especially among women.  However, there are fewer college educated whites in the electorate than whites without college degrees.  Moreover, the strong anti-immigrant sentiment among non college educated whites was a critical factor that allowed Trump to win very close elections in several rust belt states that typically vote for democrats.  College educated whites are more supportive of immigration and Clinton campaigned to win their votes.  She won their votes but her policies were diametrically opposed to those of non college educated white voters. Republicans are losing college educated white voters while Clinton lost the votes of the larger non- college educated white segment of the electorate.

The social media also played a powerful role in the 2016 election.  It made it easier to target angry white voters without college degrees; it also facilitated the use of disinformation programs that focused on cultural issues in addition to economic issues that worry less educated white voters. 

This article also makes a powerful case against the use of exit polls to analyze the results of elections. Political scientists never use them because they do not accurately account for the results.

Wednesday, March 28, 2018

How Facebook Helps Crooked Merchants Find The Suckers

The social media are receiving a lot of unwanted attention because firms like Cambridge Analytica exploited Facebook's system to find suckers in US elections.  This article describes the system that crooked merchants use to find suckers for products that don't work.  Facebook receives around $40 billion per year from ads placed on Facebook. Most of the ads are from legitimate firms who sell real products.  However, many of the ads placed on Facebook are for products that make false promises about products.  Most users of Facebook do not fall for the ads, but smart crooks have found ways to use Facebook's algorithms to locate potential suckers for their ads.  One example is described in this article.  It shows an ad that features Elon Musk.  The ad claims that Musk uses a pill that makes him smart.  Suckers who fall for the ad usually sign up for one months supply, but the agreement also includes a recurrent monthly payment on their credit card.  The pill, of course does not make them smarter but their credit card company will honor the charges for recurring monthly charges.  Facebook is full of ads from marketing affiliates who create the ads and receive a share of each purchase.  Facebook makes an effort to discover and suspend crooked marketing affiliates.  However, the marketing affiliates have learned how to work around Facebook's security measures.  They reappear with new names.  There is an useful graphic in this article that illustrates how merchants sell fake products through crooked marketing affiliates by using Facebook's algorithms to locate the suckers.  A very successful operator summed up his operation succinctly: He said that he got rich sucking money out of the pockets of poor Facebook users.

Saturday, March 24, 2018

Two Views On Triump's National Security Team And A Search For An Explanation

Donald Trump selected John Bolton as his National Security Adviser.  He teams up with Mike Pompeo who replaced Rex Tillerson as the head of the State Department.  They are both hawks.  Two analysts on PBS debate Trump's selection of Bolton on this video.  One analyst explains why Bolton is the worse possible choice and the other explains why Bolton was a good choice for Trump.  It is a fairly straight forward debate between two analysts who have different views about the key role the national security adviser.  One believes that he should be an advocate, the other argues that he should help the president to choose between a variety of options that are available to him.  It is an interesting discussion but it may be off point.  Trump has been devoting much of his attention to defusing the Mueller investigation which could lead to impeachment.  Trump could easily end that threat by deciding to use military force to reduce a perceived threat from abroad.  Mueller's investigation of President Trump may not affect Trump's position as our commander in chief during a military engagement.  That could become Trump's last resort if he perceives the knot tightening around his neck from the Mueller investigation.  Trump has a history of using extreme solutions to many of the threats that he has faced in the operation of his businesses and in his personal life.  Nothing is beyond him when he feels threatened.

Friday, March 23, 2018

John Bolton's Super PAC Was Client Of Cambridge Analytica

Trump's nominee to replace McMaster as National Security advisor operated a  PAC in 2014 that was funded by the billionaire Robert Mercer.  Bolton hired Cambridge Analytica, which was also funded by Mercer, to develop voter profiles for his PAC in the 2014 elections.  Mercer also was a major contributor to Trump's presidential campaign which also employed Cambridge Analytica for its digital marketing campaign under Jared Kushner.  The Mercer family, along with a list of billionaire contributors with a far right agenda, had a major role in electing Donald Trump who presented himself as president who would serve the interests of ordinary citizens. My guess is that the Mercer family will be better served by Trump than his populist base.  Bolton was an excellent choice for Mercer who operates behind the curtain in Trump's wonderland.  He will work well with Pompeo who replaced Tillerson as Secretary of State,  They are both far right hawks.

Thursday, March 22, 2018

An Insiders Account Of How Cambridge Analytica Influenced Elections

Christ Wylie, the researcher director of SCL tells his story about how Cambridge Analytica (CA) evolved from SCL to provide it with an American brand.  Rebeca Mercer, the daughter of the billionaire hedge fund operator Robert Mercer, was the president of CA, and Steve Bannon was the vice president.  Richard Nix was the COO.  Mercer was particularly pleased with the results of the 2014 mid term elections in which Republicans, using information provided by CA,  did very well.  Many of the themes, were eventually used in the Trump campaign under Steve Bannon who became Trump's campaign manager in 2016.

CA hired a Russian American psychologist, Aleksandr Kogan, to use his personality test on Facebook users.  270,000 Facebook users took the test.  They also, unknowingly, provided CA with information on tens of millions of their Facebook friends. The data from Kogan's personality test were used by the Trump Campaign.  The data may also have found its way into Russia.  Kogan made regular trips to Russia and CA had briefed the Russian oil company Lukoil on the results of its research on American voters.

The rest of this article is about the issues that Wylie has had with Facebook about the use of user data that Facebook had asked him to delete.

Wednesday, March 21, 2018

The Creation Of Donald Trump By The Mercer Family And Steve Bannon

The Mercer family used part of its billions to create Donald Trump.  During the GOP primaries it supported Ted Cruz.  It switched its support to Trump after Cruz lost important state primaries.  The Mercer family invested in a British data firm that became known as Cambridge Analytica in order to build a populist political organization.  Steve Bannon, who became Trump's campaign manager during the general election, was in charge of using Cambridge Analytica to test populist messages that would appeal to young white conservatives in the US.  They identified the ideas of "the deep state" and the "drain the swamp" message which became central to the Trump campaign.  They also found that anti-immigration messages, anti globalism messages, and certain types of racist messages, appealed to white Americans with a populist leaning.  Donald Trump rode those messages to the White House.

The messages that Trump used to win the election were primarily campaign messages for his base.  He liked them as long as they worked with his base, but he ended up filling the swamp with establishment Republicans who are more interested in cutting taxes for the rich, deregulation, and cutting spending on social welfare programs.  Steve Bannon became an outsider in the White House and he was eventually removed from his powerful position.  He returned to his position as the head of Breitbart News.  He eventually made the mistake of criticizing Donald Trump and the Mercer family, which owns Breitbart News,  replaced him with a Trump loyalist.  Bannon is now promoting his populist ideology in Europe.

Fox News Analyst Resigns From "Progaganda Network"

Fox News is our largest cable news network.  It has built its market share by presenting itself as a conservative network which distinguishes itself from the "liberal" mainstream media.  A retired US Army colonel who has had long history as a Fox commentator on foreign policy and military issues resigned from his position.  In his letter, which was obtained by the NYT, he said that Fox is no longer a conservative news network.  He said that it has become a propaganda network for the Trump administration.  It has joined with the Trump administration in attacking institutions that he has worked with for many years and which he supports.  The Fox attack is against a fictitious "deep state" which includes the FBI, along with US intelligence agencies and other democratic institutions.  The intent is to insulate Trump from evidence and findings which may implicate him in wrong doing.  Fox does this by ignoring evidence from respectable sources and by helping Trump to construct a misleading counter narrative by selecting guest speakers who share Trump's conspiracy theories.

Most of us are not surprised by his views on Fox News and its popular crew which are expert at building an audience by advancing conspiracy theories which are attractive to its target market.  It was somewhat surprising that this critique of Fox News came from a conservative hawk who has been with the network for many years.  He has witnessed the transformation of Fox News from a conservative network to its present state as part of the Trump administration.