Archive for the ‘The Economy’ Category.

WTF Friday

As we normalized President DFF, it is also how we normalize WTF moments. In fact they just become news tidbits among all the news tidbits. But still we have them. The biggest one is those fiscal conservative Republicans just passed a massive spending bill that raises our debt massively. If you are not confused by the propaganda machine you will note that that has been their modus operandi since Ronald Reagan. It is kind of hard to be the party of big military spending, tax cuts, and the magical supply side economics and do anything but blow up the budget. Not sure how they got the reputation of fiscal hawks other than they cried loudest about deficit spending but did the most to ensure it.

The next WTF moment will come when we hit the debt ceiling, the amount we have agreed is the debt we will pay for (we already spent it, see above). We will see if the hypocrisy reins supreme if they start pounding their chests on this one. This is one of those things we should have changed a long time ago, if you authorized the spending then you authorized the raising of the debt ceiling to pay our bills. I have argued before that Republican’s fixation on debt and trying to make the micro economy the same as the macroeconomy of our economy equal is disingenuous, but there is an element of truth to it in the details:

As we learned from John Maynard Keynes, deficit spending should be countercyclical. When economic growth goes down, deficits should go up, and vice versa. The idea is that the government can pick up the slack when private demand lags (as was the case back in 2009).”

But they are doing just the opposite here. Here is the thing. In a economy we should be raising taxes right now if we really need all this spending. Now I am all for a strong military, but President DFF and his cohorts confuse a strong military with a strong country as if bullying is the only tactic of power. We are becoming weakened in the world, not because we got the biggest baddest weapons, but because we are becoming economically and ethically weak under President DFF and his boys. Note he now wants a military parade to show off our shiny weapons while we withdraw from the stage of economic deals to strengthen our power and influence in the rest of the world.

And here is really a WTF moment for conservatives if they want to admit it. Here in California under the leadership of a very pragmatic liberal, Jerry Brown, we are putting money away for a rainy day.  Yes there are Californians who don’t like the gas tax or the higher taxes, but they are the next wave of fools that vote Republican, and they are a minority.  When things got better we did not “give the money back to all those hard working rich people,” we started putting it away for when the economy turns south as it may be doing now. It is because Democrats have always been the party of more careful budgeting. The best way to talk about debt is a percentage of GDP and here are the facts:

Republican presidents after Eisenhower have increased the federal debt as a percentage of gross domestic product by a total of 60%. Democratic presidents have reduced the debt as a percentage of GDP by a total of 9%.

President Obama is the only Democratic President during whose time in office the debt has risen relative to GDP. The data extends to the end of FY2014 (September 2014). President Obama’s bar will almost certainly drop by the end of his presidency, as GDP growth is relatively high and the deficit is relatively low. 2/5ths of the increase during President Obama’s presidency occurred during the first year while the country was still in the midst of the Great Recession.

Of course President Obama inherited a failed economy in 2009 and safety net, stimulus, and war spending (from the Bush War) did not help. But the bottom line when you look at numbers and you care about debt and deficits, you are better off under Democrats.

We need to be raising taxes right now, not cutting them. Gas tax should go up to pay for improvements to our transportation systems. The recent tax cut should be repealed so that the wealthy pay their fair share, and we should be investing in infrastructure improvements. In fact, there is a bigger picture here if we are willing to look at it. Economic inequality. We need to more fairly share our gains so our citizens have the buying power to keep our economy self sustaining. But I am spitting into the wind. People who believe in sounder budgets vote for Republicans because they make the most noise about it, but never deliver. WTF.

Well we will have another disaster like the Bush years and then Democrats will regain power. Hopefully this time they won’t think the answer is to reach across the aisle to find middle ground solutions that fail and put the fools back in power. They should just turn away from that approach and leave them in the dust of history’s failed lessons. I can hope.

Flim Flam Man

I believe it was Abraham Lincoln who said, “You can fool some of the people all of the time, and all of the people some of the time, but you can’t fool all of the people all of the time.” Enter President DFF. That 32% base is some of the people all of the time. Back in 2016 he was approaching that all of the people some of the time, but his all was still not a majority of voters. But now I think reality, who like Mother Nature, is a bitch, is going to demonstrate to the flim-flam man and his party that you can’t fool all of the people all of the time.

Remember on Monday when President DFF went to somewhere where like in the State of the Union took credit for the high stock market (while stock prices were plunging), the amazing jobless rate, rising wages from the tax cut, and his new infrastructure plan? Wow, what a man, except it is all flim-flam. Let’s start with rising wages. He trotted out some anecdote who had got a raise and all is wonderful. Okay, I am about facts and data and here is a fact check from the Washington Post:

Egged on by the White House, corporate America has spent the past few weeks touting how it is sharing its big Trump tax cut with employees in the form of bonuses and pay increases — an apparent validation of the trickle-down approach to economics espoused by the president and his Republican allies.

But when we look at the numbers, we see the opposite: The nation’s workers are getting woefully little, at least relatively speaking. Peeking beyond the PR, our analysis finds that major corporations are planning to spend more than 30 times what they are putting in the wallets of employees on buying back their own stock — a practice solely meant to lift the fortunes of shareholders.

To get a sense of how the pie is being divided, we collaborated with Emre Gomec of the Academic-Industry Research Network to tally the sums of commitments from the 44 companies in the S&P 500 stock index that, according to Americans for Tax Reform, are giving their employees a bonus or a raise because of the new law. When you add it all up, you get about $5.2 billion — $3.7 billion in one-time bonuses and an estimated $1.5 billion in annual wage increases.

But that total pales in comparison with the $157.6 billion in stock buybacks announced by 34 S&P 500 companies since early December, when the tax bill passed the Senate. Companies typically purchase their own shares in a bid to bump up the price — a move that tends to please Wall Street and swells the compensation of chief executives, who are paid largely in stock.

Oh and let us not disregard what has not been tallied yet on the expenditures from the tax savings in automation. But it gets better. President DFF said the following in his speech last Monday: “Something that I’ve been talking about for two years — campaigning, and everyone said, ‘You’ll never do it’ — after years of wage stagnation, wages — so what happened two days ago and a month ago — wages are now, for the first time in many years, rising. In fact, more companies are pursuing pay increases right now than at any time in the last long period of time — they actually say, ’in the 21st century.’ Can you imagine that? It’s amazing what people with some good ideas can do. It’s amazing what we’ve all done together.”

Except again it is a big lie. Again from the Washington Post:

According to The Fact Checker’s database of Trumpian claims, the president in his first year eight times falsely suggested that wages were finally rising because of his policies. He also made a similar claim in the State of the Union address.

But there is little dispute among economists that wage growth — after being essentially being flat for years — started to pick up again in 2014, after reaching a post-Great Recession low. In other words, Trump is simply blowing smoke when he claims that when he was campaigning that people thought it was impossible for wages to rise again. Wages were already increasing, though the increases were lower than what would be expected in a mature recovery and the impact was uneven, as shown by this chart from the Hamilton Project at the Brookings Institution.

For the purposes of this fact check, real wage growth for most workers in 2017, Trump’s first year as president, actually lagged the last four years of Barack Obama’s term. “Real wage growth in 2017 for production nonsupervisory workers in 2017 was 0.2 percent, the lowest since 2012,” Shambaugh said. “For the bulk of workers, purchasing power did not rise very much in 2017.”

Okay, let’s move on to the wonderful infrastructure bill that I have told you before is a sham. First he gave away all the money we needed to infrastructure improvements in the Great Tax Gut. Now here is the plan as it now looks, again from the Washington Post:

Despite calling for a $1.5 trillion boost in infrastructure spending, Trump is proposing just $200 billion in federal funding. The remaining $1.3 trillion is expected to come from a combination of state and local governments and the private sector. Yet in most places with the greatest need for new infrastructure, cash-strapped governments won’t be able to pay for it without raising taxes. Meanwhile, the private equity firms and foreign sovereign wealth funds that are likely fill the void will undoubtedly demand guaranteed returns in the form of, say, new tolls. The reliance on private investment also creates, as Paul Krugman writes, the potential for “an orgy of crony capitalism.”

You know, toll roads everywhere and instead of taxes to pay for it, you will just get bills for flushing your toilet. And we won’t own any of it. The ultimate flim-flam man can full some of the people some of the time and all of the people some of the time, but he can’t fool all the people all of the time and when they finally feel all this in their pocket book, well then things will change. Reality, facts, and data are a bitch.

Well, I Told You So

Global markets are tumbling this morning and that will be reflected today in our stock market. Now the reasons for this are many, but the reality is the stock market is a creature of fallible human expectation and herd mentality (animal spirits). Either a company is solid, and growing or it is not. Its stocks should be a reflection of that. But when the market gets over heated, which is a term for over optimism for the economy, prices get out of line with reality. So what shakes investor confidence? Well, the fear of inflation and rising deficit. Hey, guess what. The Republicans and President DFF have added to the deficit by the massive tax cut and that 1% with all their extra cash drive inflation. Don’t see wages going out of sight do you?

But while, and yes if you can believe it, Fox (Hannity) blamed all this on Obama, a little reality was thrown on Hannity’s bull shit”

Jay Carney, Obama’s former press secretary, wrote on Twitter on Monday: “Good time to recall that in the previous administration, we NEVER boasted about the stock market — even though the Dow more than doubled on Obama’s watch — because we knew two things: 1) the stock market is not the economy; and 2) if you claim the rise, you own the fall.”

There is so much is this little statement. The first one, “the stock market is not the economy,” is really important to understand. Republicans have been using it as a metric to measure the economy and it has nothing to do with Main Street. When the reality of the last tax cut sinks in (no flow down), middle America will get the message. And all that money they just pissed away to the wealthy is what we needed to invest in infrastructure, education, healthcare, R&D, and our safety nets. It is the foundation that then makes the economy run.

The second one is taking responsibility for good things, not understanding as economists (not partisan hacks) that there is a cycle, and then trying to blame a down cycle on someone else. The reality in America right now is that people don’t really think things through and if they have a job and their income is rising, well hell yeah the President is great. This is what you might call the beginning of the fall. President DFF has been riding a wave and claiming he created it. It just broke on the shore and may leave him face down on the beach. If people sense a malaise in 2018, out go the Republicans. Note yesterday President DFF was out touting his tax cut, using anecdotal examples and claiming the magnificent stock market was his creation.

Then he said something true. Democrats will tax you. Yes we will. We will as a nation need to decide what programs we want and won’t pretend tax cuts will pay for everything. There is a real systemic problem with the world economy in that it is growing economic inequality. That inequality makes the world economy unsustainable and America’s economy is the leader in that. Systemic changes have to be made so that economic growth is shared by all and it is done in a way that does not destroy our future. The problem with implementing those changes is that those who benefit from the present system are in charge or buy those who are. That is why growing inequality is so dangerous. There is a breaking point where revolution breaks out.

One last thing as everyone who has a portfolio checks it. Economists have recognized the cycle of the market as unavoidable. But they instituted policies and procedures to ensure that these variations were not severe like the Great Depression. Yet Republicans have tried to circumvent these measures to bring back the unregulated market place. The thinking of John Maynard Keynes and others is still operative today if we care to learn from history. But in today’s world, corporations underwrite economic think tanks and universities so that group think can decide none of that is operable, then we have a crash. See 2008 and the Great Recession where all the economist who got it wrong never admitted they got it wrong.

We can hope that this fluctuation in the market is not too bad, but bad enough to wake people up to the film-flam artists of President DFF, Paul Ryan, Mitch McConnell and the hordes they lead. There is no free ride, we have to pay our way, and you think conservatives would understand that. The Stock Market is a place where people place bets on expectations, and in most cases it is a herd mentality game instead of a rational bet placing. So no it is not the real economy, but it tells you something about how secure people feel. This is the beginning of the reckoning for the fools we put in office.

Hypocrisy in Spades

I am one who has never been afraid of he debt. You know one of those crazy liberal tax and spend. The operative word in that statement is TAX. Increasing the debt in times when we need investment whether in a recession or when we need to upgrade our infrastructure for the future is quite normal and what we should care about is that it does not overly raise interest rates or spur inflation if we print money. Our present debt has done neither and with corporations fat with cash, borrowing, government versus the private sector, is not an issue. So debt is a relative term, and a necessary evil of investment in the future. The question is how much debt and remember debt is meaningless as a number until you compare it to GDP.

Okay, but our Republican friends who claim that debt is the devil just cut massive taxes for the wealthy. The Stock market is quite happy and President DFF waves the flag of how he, the biggest DFF in the room, has finally given us an economy that can grow (it already was and has been since 2009). But here is the thing, just like in the Bush days before the big crash, we got lower taxes and spend, spend, spend. Then we had the crash in 2008. Well here we are again. This is the Treasury Departments forecast for this year on our deficit because of the decreased tax revenues of the tax cut:

Now there are several things to note here. In 2009 it really spiked after who again wrecked the economy? Republicans. All that spending was to save the banks, activate the safety nets for all those who lost their jobs, and a small stimulus package to try to get the economy going again. Do you remember where the Stock Market Dow Jones was then, the Holy Grail of Republican metrics? $6500±. Note also that our deficit has steady dropped and then the spike for the Tax cut. Funny President DFF did not mention this in his State of the Union. Where is all the supply side new revenue? Non-existent. Sadly running up the debt to make rich people richer is a much different thing than running up our debt to invest in our future (infrastructure, education, healthcare). Oh and on that liberal tax and spend thing. Yeah, if you want to spend, and a tax cut is spending, you have to tax to afford it. You go there Tax and Spend liberals/progressives. Meanwhile the fear the debt Republicans are historically famous for running it up.

It’s The Economy Stupid Again

I have written before that our current metric for success is a tape measure used to measure our money pile. Everything from success as a human being to our confidence in our future is based upon money. And in the world we live in, in some cases, at least our own security, that is the world we have built. But even at Davos, they are starting to worry:

Just days ahead of the confab, Larry Fink, chief executive of the $6 trillion-plus asset management firm BlackRock and prototypical Davos attendee, made clear his own doubts about our economic future. “Popular frustration and apprehension about the future simultaneously have reached new heights. We are seeing the paradox of high returns and high anxiety,” Fink declared in his annual letter to thousands of top business leaders. Noting the low wage growth, dimming retirement prospects and other financial pressures that squeeze too many across the globe, he said, “I believe that these trends are a major source of the anxiety and polarization that we see across the world today.”

Fink made some recommendations: “Society is demanding that companies, both public and private, serve a social purpose. To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society.”

The BlackRock letter suggests that the current economic system, which has come to prioritize corporate gains and private growth above all, sees trouble ahead and is looking for ways to save itself. That animating worry is visible in the titles of sessions on the Davos schedule (Day 1 panels: “How Is Rentier Capitalism Aggravating Inequality?” and “Why Is Our World Fractured?”). And the same realization has threaded the pronouncements of the other industry and political leaders in attendance.

I found this discussion enlightening and hopeful. We see stock market gains everywhere and yet we are fearful. Said another way which I have been hammering at now for years, the economic inequality created by “rents” only benefits a few and cuts out the rest. A big argument against capitalism is its pure selfishness. I got mine screw you. That was in fact seen as a benefit that drove competition, innovation, and new jobs, except it doesn’t any more. That is where the concept of rents comes in. “Rent refers not to the monthly check you send your landlord but to the excess payment made to any factor of production (land, labor, or capital) due to scarcity.”

Scarcity can be created in many ways, but the one that is most troubling is by government. If corporations capture government and then have them rewrite the rules to favor certain industries or rents (without creating jobs or innovation), we have a transfer of wealth to the wealthy, less and less competition, and no real growth in jobs. While the stock market is at record highs and the GDP is looking good, ask yourself as Mr. Fink did, why is there so much unrest and apprehension about the future. It is not being shared, it is based mostly on rents, and most of us barely see any benefit.

I am reading an interesting book right now, The Captured Economy: How the Rich Enrich Themselves, Slow Down the Growth, And Increase Inequality, which argues that the problem is not too much competition, but not enough. The rules have been rewritten to increase the value of rents, while hindering others entry into the market to take advantage of innovation and change to create jobs and wealth for everyone. It is an interesting argument because it takes on both conservative and liberal approaches to growing the economy. I think (I am still in the first third of the book) that the argument is flow down works if the economy was not rigged by government controlled by the wealthy to redirect the flow down to themselves.

The authors clearly recognized that government has a role to play in the government, but it is fraught with the ability of those who have money to rig the system, as they have.  They point to the slowdown in growth and the fact that this economy does not act like any before to make their point. They point out the conservative idea that many rules and regulations favor those already in the market place and shut out others.  Monopolies simply grow.  They argue that it is capitalism that is the engine of wealth, but it is one we all have to be able to play in.

I have called this leveling the playing field.  It will be interesting to see if they recognize that while capitalism is a great way to spark innovation (if we get rid of a lot of intellectual property and monopolies), in some areas, its model just does not work, like healthcare insurance.  It will be interesting to see where they go with social programs like social security (guaranteed retirement), single payer healthcare, and access to higher education for all.  These and investments in infrastructure in my mind allow for human capital to then take advantage of a more competitive and open market place.  Well you see where my prejudices lies.  I will update you when I have read more.

It would be really interesting if we could take the ideas of both sides and apply them within a framework where they really did work.

It’s Always About the Money

No, today is not about our “stable genius” who is neither.  Just as an aside, most of us know we are way smarter than he is (don’t equate being a successful salesman and crook with being smart, i.e. acquiring money) because we know we would never be smart enough for the job of president.  But that is again a sign of how we use the acquisition of wealth as a sign of intelligence and success.  Seeing and listening to most of the billionaires that back President DFF, their one identifying characteristic is not intelligence, but an outlook on life and facts through the lens of greed and selfishness.  Maybe a dash of lack of compassion for their fellow-man necessary to their greed and selfishness.

But I get side tracked.  Look at Iran today and the real root cause of the unrest there is their financial insecurity as their expectations have not matched reality (and the failure of many of their financial institutions).  What got them out in the streets is not the Bill of Rights, but money or the lack thereof.  What will get Americans into the streets and probably finally end President DFF’s reign will not be that he is destroying the Constitution or a danger to our national security, but when the economy turns south as it inevitably will.

Money has become the currency of freedom and choice.  Maybe it always has been.  Think about the roots of the economic inequality we see today.  Money equates power and that power provides the method to acquire more money and tilt the playing field in your direction. And you can never have enough.  Money in a capitalist society like ours is security.  And hence we measure everything from success to intelligence in terms of money.

One off shoot of that is how many (dumb) Americans feel confident in President DFF because we now have a “businessman” with the reins of government.  A Trump fool commented the other day to look at the job growth under trump.  The economy is humming and Wall Street has never been higher according to them as a measure of his success.  If that were measures of our feelings of security (and it is for the 1%) then Trump is all set for a second term.

But let me burst a few bubbles.  Let’s take on the businessman assumption first.  A successful business man makes money (see, the ultimate metric for success and intelligence) and increases the value of the company for shareholders.  He does it in a way that out does his competition, not work with them.  In fact, as we watch the big guys, they do things that try to stifle their rivals.  It is called microeconomics and monopolies.  But the country’s success is based upon how we do in the aggregate, all businesses, not just one or two big ones.  It is called macroeconomics.  A business person is one who is least equipped to understand and facilitate that.  The competition is the enemy in their little minds and you can see that in President DFF’s idea about winners and losers.

Second on job growth, all we are seeing is a continuation of the job growth curve that was established under Obama.  We seem to forget (clouded by the security of our money today) that Republicans wrecked the economy and under Obama, both the stock market rebounded in giant leaps, but employment under Obama actually rose faster than it is under Trump.  To say it another way, all the “great business man” has done is not upset the Wall Street apple cart yet.  And that is a big yet.

And on that Wall Street thing, yes, if you own stocks and your income is dividend driven, happy days are here again, but what of the workers?  Is that wealth flowing down?  Are wages rising at the same rate as profits?  We still use the wealth of Wall Street to measure our wellbeing when the reality for most working Americans is that it has no measurable effect.  Sure if it crashed there would be an impact, but the wild profit taking on the ballooning price of shares may just be a troubling sign that a correction is coming.  Some measure.

So the key to upending both the Republicans and Trump is about money.  When enough Americans feel the pinch, only then will they go to the streets.  They may say it is about our Constitution or our rights, but it is their feeling that they are losing their security (read money in our society) under these nitwits.  I don’t mean to demean the Women’s march because it really did give us hope.  I am simply saying that until enough Americans feel their security threatened through their financial security, nothing really changes.

Here is the problem with all that.  Economies grow and contract.  Cycles are the universal accepted norm in a capitalist society.  Our approach to smoothing out these so we don’t have the Great Depression or the recent Great Recession was regulation (Glass Segal) coupled with monetary policy (interest rates and the supply of money), and thanks to the great economist John Maynard Keynes, government spending when private enterprise has rolled up into a fetal ball.  The later one is almost dead because Republicans are loath to spend on anything except themselves (tax cuts).

But they still happen and they have little to do with who is in office, only how we try to respond to them.  Thus, we swing back and forth between Democratic or Republican control of our government seeking security meaning a roaring economy that serves us all.  Sadly, we are focusing on the wrong thing, money instead of security because we equate the two.  Note that both parties have become “the party of business” as though this will solve anything.  Republicans are the Party of the big businesses, and Democrats got lost in entrepreneur politics to save us.  It offered no solution for middle America except move and get and education, neither realistic for the middle aged industrial worker. And neither solution, Democratic or Republican will ever solve the underlying problem, real security in a capitalist world.

Think about it.  In recent history we careened from George H. Bush to Bill Clinton to George W. Bush to Barack Obama, and now to President DFF, and when you step back, none of them solved the underlying problem of security and a better life for our children.  Economic inequality just kept increasing. All the solutions proposed simply tinkered with the existing system that favors the wealthy, one more compassionate than the other, but still tied to the big banks and Wall Street as the measure of success.

There is a glimmer of hope.  Bernie got it.  It’s not about the money, it is about the security.  Many European countries get it. Sure capitalism is the engine of prosperity, but not uncontrolled.  Uncontrolled it damages everything around us while it produces money for the few. It is simply a tool and one of many.  Let capitalism be capitalism constrained only when it hurts us (economically, socially, or environmentally), but then more fairly share the profits toward building security and a better tomorrow.  That would be a guaranteed healthcare system, retirement system, safety net, and advanced education.  That would be infrastructure investments for our future that allows that constrained capitalism to grow and prosper, not for the few, but for all of us. That would be a government who invests in R&D, and takes science and data seriously.  That would be a complete rewiring of our economy.

Our economic system is presently wired to increase economic inequality, which then produces a distribution of power to affect that economic system unevenly in favor of those that have. The gross economic inequality we see today drives so many of our problems like unaffordable cities, politics controlled by money, stagnation of wages, and the lack of inertia to change the system.  Racism whose power to hurt comes from the economic disadvantages of those it is used against gets nullified.  It goes on and on.  Right now the Republicans, in their belief that fewer restrictions on a system already grossly unfair to us will work better for all of us, are in charge. See the latest tax bill and its consequences for who it really helps.

Soon the reckoning will occur and the Democrats will have the government again.  But if we fail to recognize that it is about security and how government can establish that baseline security for all of us, that levels the playing field where the truly exceptional can be exceptional, we will just keep pinging back and forth between parties while our future just gets dimmer and dimmer.  That is really what it is all about.  We don’t need to just throw out the Republicans in 2018, but to throw out those Democrats who are still too wedded to the old system.  Yeah, change, real change, is very, very hard.

Note: Republicans believe self-servingly that the best way to help everyone and grow the prosperity for all (that is not the same as growing the economy) is an unrestrained market place.  That is their whole flow down approach to the economy.  Make me rich you will be too.  It is also informed by the view of mankind where there is a level playing field out there so if you are suffering you deserve it.  Then throw in that they are basically fearful people, resist change, and underlying all of it is I got mine, fuck you (selfishness breed by fear), and you get a world viewed through lenses that filter out reality.  Of course it is hidden underneath hammocks for the poor and removing regulation and freeing the market place will make us all better off.

But the market place already operates by rules or their would not be a market place, just chaos.  And the important thing for you to note here is that those rules favor the wealthy.  So when you hear don’t regulate the market place, it is smoke and mirrors for don’t change the rules that favor me.  It really is that simple.

Discussing Politics with a Republican

Well there are Republicans and Republicans.  In general Trump supporters already have hardening of the arteries in the brain and you can kiss that one off as an exercise in futility. Nothing will happen.  You can present facts and data and they will be called “Fake News” and go on their way, surrounding themselves in the bubble of their fellow Trumpees and Fox News.  No point.  What we need to do is confront and shame those Republicans because they are enabling a world of ignorance and stupidity.  Also it is all they will respond to.  But what about the “old” Republicans who say Trump hijacked their party, Republicans who still might be rational?

Now I happen to think that Republicans have almost everything wrong, from economics (primarily economics) to social policy, global warming, and immigration, maybe even defense.  Now the first thing you will note is the Republican I am talking about gets social policy, global warming, and maybe immigration. They still like to blame problems on the lazy and see hard work as a solution in a world whose playing field is badly tilted, but they are susceptible to facts.  So facts and data are getting through.  On the military spending thing, we could argue whether it should consume so much of our budget.  So with that kind of Republican in mind, how do you debate?

Well, the answer to that is to take a “problem”, say immigration, and define the problem in a way that we can both agree what that problem is.  For immigration, what is the issue?  Is it masses flowing across the border running drugs?  Well, the data does not say that.  You both have to arrive at the same set of facts and data or we will never get off the ground.  President DFF said their was a drug epidemic in America when justifying the wall, but that “drug epidemic” is from opioids that are not coming across the border, but from big Pharma.  This kind of conflation is why we can’t solve problems.

So are immigrants taking jobs?  We are almost at full employment and the jobs they are taking are jobs that can’t be filled (see Puerto Ricans (I know they are citizens, but in effect immigrants based on our response to their hurricane disaster, a moral outrage) taking turkey processing jobs in South Dakota).  So what exactly is the immigrant problem?

The point is if we can finally identify the real problem, then we could argue solutions based upon facts and data.  The problem is we never have an agreement on the problem, so we are talking past one another.  If you are going to change a Republican’s mind, or for that matter, they are going to change yours, we have to have agreement on what the problem is, a common set of facts and data, not a word like immigration that could mean a million things.

So you ask them what the problem is in their mind (in the great tradition of Socrates) and then question their assumptions about what supports that view of the problem.  The easy one is global warming.  Rational Republicans know it is a problem and generally believe all the science.  So if we can agree weather patterns are changing with extreme storms and rising sea levels, what can we do?  Then we can explore infrastructure hardening, protection of our coast line, and limiting its effect through alternate energy solutions.  We can disagree on the details or the effectiveness of certain solutions, but at least then we are working off common basic assumptions. Note that this debate will bled over into economics.  “We can’t afford it.”

The economy is the hard one.  Most rational Republicans are basically moderate Democrats in that for most social issues they are liberal, but fiscally very conservative.  You know, that balanced budget thing because they confuse the microeconomics of a home or business budget with the macroeconomics of government spending.  So what is the issue with the economy?

Wall Street is booming.  Our deficit seems to have no impact on interest rates and inflation is nowhere to be seen.  Well I will tell you what I think is the problem, but they might not totally agree.  It is less and less of the pie being shared with the workers.  In a word, economic inequality that is making the majority feel that the future will not be as bright for their children (that just a fact).

We are not investing in our future and giving our treasury away (which will cause more debt if this is a Republican who thinks the debt is a problem) to the wealthy that will pay small dividends at best.  So if we could agree that economic inequality is the one of our big problems, then we could argue about the efficacy of supply side economics and how to make a more equitable distribution of the profits.  OMG! Taxes!

Well you get the drift.  As a general approach to discussing things with a Republican, use the Socratic method.  Ask questions which makes them examine their underlying assumptions that they really haven’t examined against facts and data.  But here is a caution.  David Brooks is a rational Republican, but only so far.  Somewhere in his smart brain is this fog when it comes anything Democratic. While he sees President DFF as a DFF, and he saw the tax cut as too much for the wealthy, in his heart he still is terrified of debt and government doing anything.  That should start a whole other discussion about whether government is the problem or not.  It never ends but at least it is a starting point.

Intellectual Friday

No, I am not claiming to be an intellectual (I wish I was, but I struggle), but I do like to dive a little deep sometimes. She who must never be mentioned here calls me the charter member of the boring book club. But hey, it is the 21st century so instead of WTF Friday and listing how, as Paul Krugman calls the Trump Administration, the Apocalypse, is progressing, let’s discuss a wonderful podcast I came across. I am a fan of Vox.com because if you are looking to understand issues, that is the place to go. Ezra Klein runs the place and Ezra is an intellectual and I came across this recent podcast (The Ezra Klein Show) of him interviewing Paul Krugman (Economist and NYT columnist) called “An orgy of serious policy discussions” with Paul Krugman.

Now their topics ranged from such proposals as a guaranteed basic income (UBI), to robots taking jobs, monopolies, healthcare, the tax bill, taxes and if they help or hurt the economy, and it was amazing. Now before you go all left-wing nut jobs on me, let just say that these are two people who have thought about these things deeply, with Paul more grounded in the politics of today and what is possible than you would think. So it was a real discussion, not a left-wing hedonist fest. I would strongly recommend you listen to it, but the best part was at the end when Ezra asked this question:

What is the role of policy journalism and policy analysis, be it from us, from think tanks, from wherever, in an era when the decision-makers do not actually seem to care if the weight of the evidence is that they’re getting policy wrong?

Now I am totally paraphrasing here, but there were three parts to his question:

  • You and I are work as political analysts and we provide analysis of policy looking at possible impacts to different policy decisions. I am beginning to wonder it we have a job anymore.
  • Those in power (Republicans) are not interested in analysis of policy anymore, just confirmation they are right. The tax bill is an example where we can provide detailed impacts to help them craft smarter policy and they don’t care.
  • Generally, Republicans and Democrats are very much alike as opposed to very different, but Democrats are still open to looking intellectually at policy outcomes and modifying their policies to achieve better ends. Why is that?

Here is how he phrased It:

You and I both get, I’m sure, a lot of emails from extremely intense liberals, and I do not find those emails to be all that different from the emails I get from extremely intense conservatives. I don’t think individual liberals and conservatives are different in what they’re willing to believe, and I think a lot of research supports that.

But liberal institutions — the Democratic Party is one, but much more broadly the think tank community, the academic community, which leans liberal, the journalistic community that is left of center — has been much more resistant to some of the bullshit that has infected the conservative community. There seems, to me, to be an asymmetry in the responsibility of the core mediating institutions.

Now on the first and second point Ezra and Paul were in agreement. It is that cliché, facts don’t matter any more to most of the Republican Party. While they were both loath to say it, ideology had totally captured them. I call it faith-based thinking. President Trump, who is a symptom of their malaise, is a pathological liar* and most of his policies, thus theirs, are based upon false data. You remember cigarettes don’t cause cancer? Well flow down exists and global warming is just variations of nature, nothing to worry about. While they did not mention it, the attack on the press, they call “Fake News,” is an attempt to stifle real analysis. So there was agreement here.

There was a sidebar discussion here about how some fairly reasonable economists have gone over to the dark side to support that tax cuts will pay for themselves utilizing either non-existent data (Mnuchin), or data that has been thoroughly debunked. It had to do with who was paying your bills. It is easy to believe something if your paycheck depends on you believing it, and Paul pointed out that Republicans are much more controlled by big money contributors than Democrats.

But the real question of why liberals have not gone down the rabbit hole of ideology and faith-based thinking while Republicans have troubled them both and I don’t think either found a satisfactory answer. It is hard to understand why seemly intelligent people, ignore facts and data. This idea that Liberals are just as ideologically stunted as Republicans and data and facts does not shift their positions is the false equivalency argument so often pushed by the media to seem fair and balanced when the Right has gone off the cliff.

Paul argued that Republicans are more hierarchical and follow the leader, and Ezra, in his words, pushed back saying the party fractured this year as the base rejected the establishment. Paul countered with there is still the hierarchical structure, it just moved away from the establishment Republican Party to the Right wing media machine. Democrats on the other hand have always been a coalition of interest groups with a diversity of ideas.  They have to be flexible.

You can listen or read these arguments at your convenience, see the link above, but since it is my blog, I have some thoughts here. They are not new or original, but may better explain the difference and why conservatives will fail if they haven’t already.

First in answer to Ezra’s question about whether political analysts have any value anymore, of course they do. The why of failure is part of the recovery process. The downfall of conservatism is the political process, which is why they are trying so hard to stifle the vote and control the news. No matter how sure they are of their policies, when they fail to deliver, sooner or later there will be a revolt. We are already starting to see that.

Remember better cheaper healthcare and yet they have no plan? The tax cut bill which is their other major thrust will hurt, not help the economy and again, eventually this will be felt at the base level and then they are dead meat. As long as they were a minority party, they could blame the other side, now with failure as a metric assured and they holding all the levers of power, who do you blame? Right now the economy is soaring (in Wall Street) but that will end as economic inequality does more and more to suppress demand. Then what. Oh, and if you are a person who actually looks at facts and data, that soaring economy is simply the continuation of the growth from the Obama Administration.

Now on the issue of why conservatives had a tendency to reject policy analysis, I will ask you this: Why is the Republican Party the home of conservative Christians? Said another, way, what does the word conservative mean? Studies have shown that conservatives tend to be more fearful people. They don’t like change. Liberals by their very nature are more willing to try new things. Conservatives want to hold on to what they think has worked. In evolution this may have helped the race survive. But today it is a liability in a world-changing very fast and adaption is critical to our survival.

They like simple answers because simplicity makes the world controllable.  Complexity is terrifying because it provides more choices and drives them into a defensive crouch.  So the market place solves all problems, flow down works, tax cuts pay for themselves, and morality is defined by the Bible not informed by science and data.  And to keep it that way, you have to have a system to reject countervailing ideas and analysis.

Add to that a media structure that is little more that a reinforcing propaganda machine (Fox News and Right wing radio), with real news’ (corporate owned and for profit media) real weakness not challenging false assumptions with facts and data because it would seem to make them biased, and you have world where you have created an alternate reality where you don’t need policy analysis anymore.  You have all the answers you need. Oh, and it explains why the conspiracy theory phenomenum is much more prevalent with Republicans.

All the rest that Ezra and Paul identified are true, but you do really have to understand their psychology and need for total control.  That is why conservatism leans toward order and finally tyranny so evident in Donald Trump. Racism comes from fear.  Nativism comes from fear.  Misogyny comes from fear (women in control???)Watching the Roy Moore election was a case in point of denial to stymie any change.

One last thing as I have to do some real work.  Many people including myself have argued that we need a two-party system.  As the argument goes, one party balances out the other, and through debate, better solutions are arrived at.  All that goes in the toilet when one party is not longer susceptible to policy analysis.  The Republican Party is not longer a political party in that sense.  But here is the amazing thing, the Democratic Party is way more than a single party.  Real debate goes on using real policy analysis to decide how to proceed.  Think about the arguments between Hillary and Sanders on healthcare or paid for advanced education.  Welcome to real political discussion again.

The only hope for the country is to recognize that the Republicans are no longer salvageable and we need to put them out of their misery.  2018 would be a good time.  Have a good weekend and I will post from the North Shore of Hawaii next week.

 

Alabama

Happy days are here again… Really? Are we not reading way too much into this. Write-ins decided the race. Half the state wanted Roy Moore a guy who is an alleged pedophile, and has made statements so antithetical to our basic understanding of personnel freedom and rights that he was off the spectrum. Roy Moore was the epitome of theocracy and yet Democrats squeaked one? Now happy days are here again? The reason a Democrat won was not on the issues. It was on the abhorrent nature of Roy Moore. What we learned is there are limits, but they are already off the charts.

I listened to Chris Hayes on MSNBC get it totally wrong and of all things was set straight by an old retired Republican. Chris was launching on this was all about Trump as though all Democrats have to do is run against Trump. The ex-Moderate Republican stopped him and pointed out this was about not Trump, but just maybe the rejection of the degradation of the Republican Party which they had brought upon themselves. Trump is not the problem, but a reflection of the problem that the Party with no values now represents. Yes, he actually said that.

Wiser words could not have been spoken. While all the happy days are here again nonsense was going on, the House Intelligence (oxymoron) Committee was grilling Deputy Attorney General Rod Rosenstein about a witch hunt that there is bias in the Trump-Russia investigation. If you are a Democrat you should not be allowed within 100 miles of investigating anything Republican. By the way, there was no evidence of actual bias impacting the investigation, just wild accusations that since some FBI personnel were Hillary supporters or they did not like Trump, the whole investigation should be stopped.

Um, does anyone remember the leaks out of the FBI against Hillary during the election? Do we think FBI Director Comey was a Hillary fan? Does anyone remember that Special Counsel Mueller is a Republican? Should judges be selected on their party allegiance? Should jurists be asked their party affiliation? Oh, and if you are awake, isn’t it a Republican led investigation of Trump in Congress that has by all accounts failed? No, Trump is not the root problem, he is just the manifestation of what has become of this Republican Party that seeks power through any methods necessary. At least Alabama voters did reject that.

And let me ask you this, what were the issues in Alabama? What does Democrat Doug Jones stand for. Or was that less important than Roy Moore was a pervert? Rhetorical. So a Democratic win may not change anything, especially if as some media outlets are saying, it is reach across the aisle time. Mitch and even Donald called him to congratulate him because they might need him for their failed agenda. If Democrats go down that road of once again being Republican lite, what have we gained except a seat at the captain’s table on the Titanic? That is how we got here.

I guess what concerns me most is that the country is going in the wrong direction. While President DFF is a danger to the country and is doing untold damage destroying agencies that protected American citizens, he is not the real problem, the Republican agenda is. He is just their bag man, maybe a less effective one after this. That agenda is not only a disastrous economic plan (see the Tax Gut), but it really does look to starve the beast, greatly reducing Medicare and Social Security, while increasing economic inequality. And what is a response from the Democrats for jobs and a way forward to bring back our infrastructure, fight global warming, and address economic inequality? Be against Trump?

I guess what I am trying to say is that had the Republicans run Luther Strange, who clearly dropped investigations to help the sitting governor in order to buy his appointment, he would have won hands down. Trump is right when he said he was right about Moore. His cravenness at then supporting Moore was just a reflection of the total Republican demise. Nothing has fundamentally changed that will move this country in a different direction. Maybe that is all you can expect in the deep South, but we will know we are out of the woods if some young progressive Democrats with fresh ideas to try to solve our problems get elected 2018, then maybe I will start singing happy days are here again.

There is a little good news here in that momentum for Democrats is important. Also we may have seen the start of the real civil war in Republican circles. Clearly one lesson is that all politics are local, within some boundaries. One Alabamian told us that the abortion issue was really not all that important to Alabamians, but healthcare was.

The Party, or more simply what Democrats stand for has to have some basis. Donald Trump is for cheaper, better healthcare, but the issue is what is the plan? To Doug Jones’ credit, he did not cave on the abortion issue, and he will be a vote against destroying Obamacare (which may already have a stake in its heart in the fine print of the tax gut. Thank you Susan Collins). But what is the Democratic healthcare plan or vision? Obamacare was a Rube Goldberg approach. Now what? Fix it?  How and what is the end goal?

To gain traction, government and Democrats has to be effective. If Democrats can win in 2018, they have to be for effective policies that not only thwart Donald Trump, but move the country forward. It is that vision thing. That was the failure and lesson of the Obama Administration. The economy crashed under the Republicans and then they were successful at limiting Obama’s effectiveness in repairing it, which he did manage to do, while blaming Democrats. See the election in 2010 after the Republicans were decimated in 2008. Democrats were not smart enough to understand the battle and effectively push back. Bernie Sanders and Elizabeth Warren have some great ideas and what Democrats need to do is to put those ideas in play in the next election.

One last thing. There is this narrative rising up again about listening to the other side and working together. Depends on what you mean. Clearly in the last election establishment Democrats were tone deaf about what was going on in middle America and had to some extent become part of the problem. So listening to understand their problems is important. But that is where it ends.

Solutions come from facts, data, science, and innovation. Listening to someone tell you global warming does not exist, or when corporations are flush with money, a tax cut is just what we need, that the market place will solve healthcare, and we need more drilling in our National Parks is futile. It is futile because they do not care about facts, data, science, or innovation. Facts don’t matter, that is what we have learned. Listening to this nonsense legitimizes their lies and makes facts appear political. We have to be able to see the difference and many do not. Try to focus on their whole concept of Fake News. How do you listen to that?

The critical example is that there are not two sides to most of these issues once we consider the facts. In their race to the bottom, the Republican Party learned from the Tobacco companies on how to obfuscate science and data for their greed and political ideology. They created whole think tanks to do just that and the media fell right in line trying to be fair and balanced presenting both sides as viable points of view when the science and data were clear. They refused their responsibility to be honest brokers of facts, not opinions.

Alabama, listening to Roy Moore voters equivocate about their support and disbelief in the pervert he is, tells you how easy people can lie to themselves to believe what they want to believe. It is time to stop the lying and start the tough love. Part of that is to understand their concerns, but not tolerate their misbegotten ideas that don’t stand the test of reason and facts. No Virginia, the world is not flat and that is not a valid alternative opinion. More to the point, no Virginia, the world was not created 4000 years ago. We evolve over millions of years. The science is certain. To say otherwise is religious mystic nonsense.

Two Reflections of the Country that Tells Us Everything

There were two stories this morning that tell you really where we are and all you need to know about why America does not work anymore. The first is a story about the upcoming election in Alabama where the real issues got lost in the Roy Moore saga. But the real issues show what a mess “Red” Alabama is. Here are a few facts from the article:

  • In Halleyville Alabama the one and only hospital in the country is set to close for lack of funds
  • 17 percent of Alabamians live in poverty — the fifth-highest rate in the country
  • The state’s violence-wracked prisons are jammed to 159 percent of their intended capacity.
  • With budget troubles a chronic fact of life, spending on Medicaid, which has not been expanded, lags.
  • Standardized test scores are among the nation’s lowest.
  • Heart disease and diabetes are endemic.
  • Last year, Marion, a rural city in central Alabama, suffered a tuberculosis outbreak so severe that its incidence rate was worse than that of many developing countries
  • The infant mortality rate for 2016 rose to 9.1 deaths per 1,000 live births, the highest rate the state has seen since 2008. (The national rate was 5.9 deaths per 1,000 live births in 2015, the most recent year for which federal data is available.)
  • The mortality rate was more than twice as high for black infants as white ones, and in some parts of the state, like Perry or Pickens Counties, the rate was 25.6 and 30.3.
  • Minimum wage is $7.25/hour, not enough to pay rent or feed a family
  • Areas like Huntsville depend on federal spending for our rocket and missile programs yet they support Republicans slashing the budget
  • Even with major companies like Airbus, Mercedes-Benz, Hyundia, and Honda relocating there for low wages and few regulations, Alabama’s median household income lagged the national median by about $7,800. Today, Alabama lags behind the national median by more than $11,000.

Yep, a Red state paradise and yet these issues went undiscussed and they are leaning to voting for someone who will continue that trend above, making America great again. What a cesspool. Yeah, I pay high taxes in California. It is worth every penny.

The second on is the story of how Susan Collins got duped into voting for the tax bill by Republicans “willing to compromise.” As the NYT tells us:

A couple of weeks ago, Collins made a classic Collins deal. It tried to split the difference between Democratic and Republican positions….Collins said that she would vote for the recent Senate tax bill so long as Republicans leaders promised to pass other legislation — in the near future — that would reduce the bill’s knock-on damage to health care programs.

She laid out three conditions. She wanted her colleagues to pass two separate bills that would shore up insurance markets for people who weren’t covered through their job. And she wanted congressional leaders to promise to undo the Medicare cuts automatically triggered by the deficit increase from the tax cut.

Her colleagues assured her they would pass the bills she wanted — not immediately but soon after the tax bill had passed. Collins decided that was good enough, and on Dec. 2, she became one of 51 yes votes on the tax bill.

Now she is being screwed. They got their bill and now Ryan is making attacks on Medicare to fund the shortfalls in funding for the tax bill (the goal all along), and the house Republicans are thumbing their nose at her other conditions. She looks like an idiot and may pay a very heavy price for that vote at the polls. But that is not the point. The point is that is what compromise with Republicans looks like. It took President Obama eight long years to figure that out as he tried to work with them and the foolish press kept calling for them to have drinks together. That is the lesson to all those who claim we just need a middle road and both sides need to work together. There is no both sides and this is what compromise looks like with one of their own.

So there in two stories tells you everything about a Red America. It is headed for the dumper, and yet so many Americans listening to Fox news or talk radio are clueless. But there it is exposed in all its glory. Alabama, the armpit of the nation, and Republican values on full display. Will anyone notice? But hey, Alabama has football. That counts for something, right? Oh wait, more brain-damaged kids, the perfect voter for Republican politics.