Archive for the ‘Economy’ Category

Waffle House Economy

Tuesday, March 6th, 2018

The difference between fantasy and reality is that in the real world real stuff actually happens to real people.  If you live in a fantasy world, you have lost touch with reality.  You have not, however, escaped reality.  Reality will, sooner or later, assert itself.  At that point, you will suffer a rude awakening.

Our country is poised to experience several rude awakenings as we discover that our President and those supporting him have lost touch with reality.

We now know that the Russians have been and are continuing an effort to disrupt our democracy.  We know the who, the why, and even the where.  Some of those who worked on disrupting the 2016 election, have since come forward to provide detailed accounts of what they did and how they did it.  Facebook and twitter have identified the accounts that they used.  Mueller has the evidence and indicted some of the perpetrators.  Our intelligence community has documented the hacking that occurred to voter records and electronic voting machines.  Our intelligence community continues to sound the alarm that these attacks are expanding and becoming more sophisticated.

Our President and the party that supports him live in the fantasy world that the whole Russian effort is a partisan witch hunt intended to discredit Trump’s election.  They attempt to deflect blame to Clinton, the Democrats, or the media.  The REALITY is that concerted efforts by the President and his supporters to discredit the media left us vulnerable to Russian spreading REAL fake news.  Conservatives were eager to spread whatever stories they read that confirmed their fantasies about Clinton and the Democrats even though they were fantasies.

The reality is that we have been attacked in no less a real way than we were attacked on 9/11.  Why hasn’t our President and our government responded?

According to Tom Friedman, there can only be two answers.  Either Trump is simply delusional or the Russians DO have something on him that he does not want others to know.  Neither choice bodes well for the country.

Tax Cuts and Government Spending and Economic Growth
We have never provided this large a stimulus to an economy that was this robust.  We are in completely new territory as far as what is going to happen.  The tax cut and the associated budget bill killed off the “Trump” stock market rally because of concerns about the Fed raising interest rates to combat inflation.  More concerning is this massive reduction in government revenues is happening at the same time as costs for Social Security, Medicare, and Medicaid are rising because of the baby boomer retirement.  The fantasy is that the tax cuts will pay for themselves, but even the Trump budget shows they don’t believe it.  The claim is that we will see 3% growth as far as the eye can see.  The reality is that there aren’t enough workers to support that sort of growth.  The worker situation grows worse each day that we actively discourage immigrants from coming here to work.  The second fantasy is that corporations will invest the tax cut in higher wages.  Wages are going up, but it’s because unemployment is so low.  Corporations have spent $6B in bonuses and wage increases.  They have spent $170B in stock buy backs.  That’s reality.

This is a terrible idea.  It based in Trump’s fantasy that trade is some sort of mano-a-mano wrestling match.  It’s not.  Even if other countries don’t retaliate, which the very likely will.  It will be a net looser for the economy.  Just like the tax cuts, nobody has tried to impose tariffs at time of very low unemployment.  That’s because the whole design of the tariff is to use price to replace imported products and services with domestic products and services.  The problem is that we do not have the employees to ramp up domestic production of much of anything.  How are steel producers and aluminum producers going to expand, if they can’t find skilled workers?  The result instead will be more pressure on wages AND more pressure on prices.  What’s that spell? INFLATION.  What happens when inflation goes up?  The dollar goes up.  What happens when the dollar goes up? Exports go down.  That’s why tariffs went out with the cold war.  The news suggests that Trump’s about face on tariffs was driven more by his frustration with his administration than a careful analysis of the subject.

So where does this leave us?

SNL said it best.  We hired a businessman to run the economy, and he’s running it like a Waffle House at 2AM.

The State of the Union is Fantastical

Wednesday, January 31st, 2018


President Trump’s first state of the union speech was just as remarkable as his first year in office.

David Graham from the Atlantic had a good summary.

The reality is somewhat less rosy: By a wide margin, Americans believe that the nation is on the wrong track, and the president’s approval rating is historically low. Trump has struggled to push his agenda through Congress, just squeaking a big tax cut in at the end of last year. That presents three challenges for the president, and his speechwriters: How do you boast about victories you haven’t had? How do you present new proposals when many of the old ones are still on the table? And how do you handle the Russia story that seems to consume most of politics each week?

The answer from Trump was simply to conjure his own reality, outlining a set of some accomplishments, delivering the standard list of policy proposals, and ignoring the Russia probe altogether.

This president is not often good at hiding his emotions, but he did so Tuesday. As a result, not only was the picture he painted of America removed from reality, but Trump himself was also practically unrecognizable. The speech somehow managed to render Trump the one thing he almost never is: boring.

One has to go no further than his claims of economic success to reveal the gulf between reality and fantasy that exists in the White House.

Since the election, we have created 2.4 million new jobs, including 200,000 new jobs in manufacturing alone.

Only 1.8M new jobs were created since he took office according to the Bureau of Labor Statistics. Instead of citing the real figure, he chose to cite a figure that included three months where jobs could only be attributed to Obama.  It’s also because during his first full year in office, the 1.8M new jobs was the slowest job growth since 2010. The reason is that employers are having a hard time finding workers, which is what he also could have said.  Instead he left the impression that this was an extraordinary accomplishment.

Of those jobs created during his time in office, 184,000 were in manufacturing which would also been a good number compared to the 16,000 jobs lost in 2016. But that doesn’t mean that manufacturing is in good shape. Total manufacturing employment is still down by more than 1M workers compared to 2007.

After years of wage stagnation, we are finally seeing rising wages.

Wages did grow from 2014 through the third quarter of 2017, but the rate of growth has slowed and in Q4 wage growth actually declined (from $353/wk to $345/wk)  So why didn’t he mention that?

African American unemployment stands at the lowest rate ever recorded, and Hispanic American unemployment has also reached the lowest levels in history.

During Trump’s campaign, he claimed that more than half of African American youth were unemployed. The real number was 19.2%. African American unemployment fell from a high of 16.8% in 2010 to 7.7% last January. Since then it has fallen to 6.8%.  Why didn’t he just say that?  It is still really good news, and given his past campaign exaggerations, would have indicted a new respect for the facts.

Unemployment claims have hit a 45-year low.

That statement was true on January 13th. Last week the number went up. That’s still a good number, but it is only a six week low, not a 45-year one.  Why not simply say that they hit an 45-year low two weeks ago.

The stock market has smashed one record after another, gaining $8 trillion in value. That is great news for Americans’ 401(k), retirement, pension and college savings accounts.

Only about 50 percent of Americans own stocks directly or through retirement funds, according to a Gallup survey. And most of the value in stocks is held by the top 10 percent. And the bull market in the US is actually weaker than market gains in the rest of the world. So the truth is that the US markets are just part of a larger global trend, and if anything Trump has discouraged investment in US markets rather than encouraged it.

BTW, the markets fell more than 1% on Monday as money moved from stocks to bonds. This is generally an indication that at least some traders think that this market may be near its peak. Almost $360B is stock market wealth (using Trumps calculus) disappeared as a result.

Just as I promised the American people from this podium 11 months ago, we enacted the biggest tax cuts and reform in American history.

This claim is just wrong and has been widely debunked. Depending on how you count, it ranks 8th in terms of size. Both of Obama’s tax cuts were larger.

Our massive tax cuts provide tremendous relief for the middle class and small businesses

More wrong. This tax plan benefits large corporations and wealthy people. According to Moody’s, three-quarters of the $1.1T in individual cuts go to people earning more than $200K/year in taxable income. Those represent only 5% of all taxpayers. The same report warns that this plan will have negative consequences on federal and local government finances.

We slashed the business tax rate from 35 percent all the way down to 21 percent, so American companies can compete and win against anyone in the world. These changes alone are estimated to increase average family income by more than $4,000.

More voodoo math. As points out, if every household averaged a $4,000 increase in income, that would add up to $500B/year. Corporate taxes collected last year only totaled $300B. Even if all corporate taxes were eliminated and all of that money flowed directly into individual income, it still couldn’t add up to the increase Trump claimed.

The real numbers, according to the Tax Policy Center, are closer to $1,610. That’s $135/mo. Most people are smart enough to realize that they are not the ones getting a big break.

Since we passed tax cuts, roughly 3 million workers have already gotten tax cut bonuses — many of them thousands of dollars per worker.

Less than 2.5% of the work force have received one-time bonuses.  That’s why the remaining 97.5% know that this wasn’t a good deal for them.

Since we passed tax cuts … Apple has just announced it plans to invest a total of $350 billion in America, and hire another 20,000 workers.

Apple DID give workers bonuses because of the tax plan. They do plan to repatriate $38B in overseas profit as a result of the plan. They did not say that their $350B five-year investment plan was the result of the tax plan. The capital part of that plan seems in line with past levels of annual investment.

The foundation of REAL economic growth is productivity. Productivity requires a large percentage of the population to be employed in doing things that make money. It is very difficult to increase productivity when you have a large growing retirement population. The only way to do that is to add as many new workers through immigration as you have retiring. You can’t simultaneously support lowering immigration, increasing retirement, and have a high growth economy. Japan already proved that it can’t be done.

The other end of productivity is businesses investing in new plants, new technologies, etc. That’s how you increase productivity without adding new workers. That investment is also NOT currently happening because businesses are able to make money without making those investments.

Another gauge of a healthy economy is the saving rate. Savings rates go up when people have more disposable income. The rate of savings is going down, which suggests that households are strapped for cash or they are drunk on spending. Neither is good. The first suggests that the cost of living is rising more rapidly than wages. The second suggests that any boost that the economy may be getting from consumer spending is short lived.

Finally, the government has a role in economic development too. That’s to stimulate the growth of new emerging industries. Trump is failing there too. That’s because of the stake in the ground that Trump planted regarding coal. First he has failed to keep the promise that he made to coal workers. Second his wrongheaded tariffs on solar panels is costing jobs in a rapidly growing sector of the industry while failing to make any difference in the coal industry which is in decline.

The problem with short term incentives like tax breaks and repatriation is that they are candy rather than substance. Bringing $38B of profits back to this country from Apple will make it appear as if something got made in this country. Unless Apple invests that money in making more stuff in the United States than it may have otherwise made, it will not be reflected in any increase in either jobs or productivity. If Apple just uses the money to buy back their stock and increase their dividends, any economic boost will be short lived and perhaps make the next stock market correction that much more severe.

When the President bases policy on false beliefs, the country will pay the price.

Adding $1.5T in additional debt now is a REALLY bad idea according to the IMF.

The I.M.F. warned against assuming that the current economic cycle would go on indefinitely, however, particularly given the towering debt of the United States and other countries. By borrowing so much, the government can crowd out other investors and drive up interest rates. At the same time, giant deficits crank up pressure to cut government spending on health care and housing, policing and schools. With less money to go around, spending dries up and consumer demand — the economy’s primary engine — slows.

This was the SAME warning that Republicans used during the Recession. It turned out not to be true, because that’s when the government SHOULD be spending money to get the economy going again. That deficit spending worked. The economy recovered. And NOW is the time to increase taxes in order to make investments in the future industries that will support the next generation of businesses and employment. That’s because a growing economy can support a higher tax rate.

Cranking down on immigration at a time of low unemployment and baby boomer retirement is another REALLY bad idea.

A single immigrant can bring in unlimited numbers of distant relatives

This was Trump’s big lie from his speech.  Politifact labeled is Mostly False.

We should be welcoming immigrants AND their families. New family formation is the bedrock of the consumer economy. Immigrants who bring in family members provide their own support system for those immigrants.  That means they will have places to live, jobs, churches, mosques, and people like them who will help them make the peaceful transition to becoming citizens. This family process that includes a path to citizenship is why we don’t have the same problems with domestic terrorism that we’ve seen in England, Germany, and France.  There is no good reason to scrape the family immigration system.

Trading citizenship for 1.8M Dreamers for cutting LEGAL immigration in half (from $2.1M to $1M) is a bad deal for the economy.  Dreamers are already here and already have jobs.  Reducing the ability for immigrants to bring in their family members will just reduce the number of legal immigrants.  I have no problem making our immigration system more merit-based, but the number of legal immigrants should be set by the number of unfilled jobs in the economy.  Right now that number is 6M.  What is wrong with expanding the H1B program which is merit and employer based until the number of unfilled jobs is reduced?

The only reason we can’t do that is because Trump has told the country that immigrants are dangerous.  He did that again last night.  Canada on the other hand has built their economy on merit-based immigration and has already told the world that if the US doesn’t want you, you are welcome to come to Canada where their political culture realizes the economic value of skilled immigrant workers.

The REAL problem we are dealing with in this country is the disconnect between reality and fantasy.

Until we have a government willing to tell the truth, we are going to struggle for any sort of reliable and unified plan for growth and stability.

Pants On Fire

Wednesday, January 10th, 2018


Trump is liar.

It isn’t that he is just a liar. He is a liar of historic proportions.  The NYT has a complete list and a couple of charts comparing Trump’s lies (repeats excluded) and Obama’s lies.


In our political system, public officials normally pay a price for lying.  That’s because a candidate makes promises to voters in order to secure their votes.  While most voters are sophisticated enough to realize that even a President can’t do everything that they promise, our system does include an expectation that whomever holds the office will in fact respect the office and the power voters have put in his/her trust.  Breaking that trust may be just another example of Trump “shaking up Washington”, but according to the polls, most voters don’t like it.

This post is about an upcoming scenario where Trump may finally pay that price.

Obstruction of justice is a very difficult charge to prove because it relies on intent.

There is plenty of smoke to suggest that Trump had intent to obstruct the FBI investigation into Russian interference in the 2016 election.

That smoke does not need to include any evidence that the 2016 election results were altered by Russian activity. The charge isn’t that Trump made the Russian efforts more or less effective. The charge is that he interfered with the investigation into Russian efforts.

The smoke also doesn’t need to include any evidence of collusion with the Russians. Whether or not there was collusion is a separate charge. The obstruction charge is that he interfered with the investigation into whether or not there WAS any collusion. Trump could be cleared of the collusion charge and still be liable for the obstruction of justice charge.

Finally that smoke doesn’t need to include any evidence that Mueller somehow overstepped his authority. He was given broad authority by Dept. AG Rosenstein to follow whatever threads he found that would lead to evidence of criminal activity. When he finally presents his case, Trump supporters are going have a hard time convincing the public that Trump’s crimes were outside the scope of what Mueller was originally supposed to investigate.

Here’s the short list of the things that support a potential obstruction of justice charge.

  1. Trump and his staff put a lot of pressure on Sessions NOT to recuse himself from the Justice Department investigation BECAUSE Trump expected Sessions to protect him from that investigation. This speaks to a state of mind that suggests that Trump felt that he needed protection.
  2. Trump drafted a letter to Comey suggesting that Russian investigations were “fabricated and politically motivated”. Comey was later fired because he refused to stop the investigations even though Trump’s initial public statements were that he was fired because of the FBI’s handling of the Clinton email inquiry. This also speaks to state of mind regarding a cover-up.
  3. The Wolff book claims that Trump and his lawyers concocted a misleading statement on Air Force One regarding DTjr’s Trump Tower meeting with Russians. They did that in “an explicit attempt to throw sand into the investigation’s gears”. Wolff also claims that a staffer (Mark Corallo) quit over the incident because of the obvious obstruction of justice implications. This alone would meet the standard for prosecution.  It should not be too hard for Mueller to find out from Mark Corallo whether or not Wolff quoted him accurately.
  4. NYT reports that Mueller has substantially corroborated Comey’s notes regarding his dealings with Trump. That corroboration includes notes kept by other WH staffers that Mueller has obtained.

If these Wolff claims are true, that means that other staffers on the flight DID knowingly participate in obstructing justice. Mueller will have the opportunity to interview them under oath for their version of events.

Trump’s defenders continue to suggest that Trump can’t be prosecuted for taking actions that are within his legal authority. That misses the question of intent. The courts have clearly ruled that legal authority does not immunize a government official from abusing that authority with corrupt intent.

But that ultimately isn’t going to be the issue.

The issue will be that at some point in the not too distant future, a sitting President will again be summoned to testify in front of a grand jury. This is a man who doesn’t read, doesn’t have the patience to sit through policy briefings that last more than a few minutes, admittedly didn’t prepare for campaign debates, lies regularly to inflate his own accomplishments, has an overinflated view of his own capabilities, and seems to have only a tenuous grasp on facts. How is this man going to perform when confronted with a detailed discussion of his actions as described by the sworn testimony of others?

This will be a situation where his usual strategy of bending the truth will not work. This is also situation where inexperience, “negotiation”, or even delusion are unacceptable excuses for failing to tell the truth. He won’t be able to deny that he said things because government lawyers and the grand jury will have the transcripts. He won’t be able to deny that he was present at a meeting when the sworn testimony of others who were there confirmed his presence. His experience as a performer will not help him. He won’t be able threaten. He won’t be able to settle. He won’t be able to leave after ten minutes. He will just have to answer the questions to the best of his ability. The recent NYT interview is a perfect example of the sort of disaster that this President is facing.

This is a minefield of Trump’s own making. It is hard to believe that he will be able to navigate it without stepping on at least a few of them. When he does, Mueller won’t need to prove intent to get an obstruction of justice claim to stick. He will have Trump on tape lying to a Grand Jury.

It is also ironic that a deeply flawed book that contains a lot of misinformation may end up being the publication that takes down a president who has a similar disregard for the truth.


At the time of this posting, two more Republican members of the house have announced their retirement (Issa and Royce). That brings the number retiring to 32 (compared to 15 Democrats). 20% of the 23 House Republicans running in districts won by Clinton in 2016 are not seeking re-election to those seats. Since 1962, an average of 40 house seats have been lost in midterm elections by the president’s party when the president’s approval rating fell below 50%. Trump says that polls don’t matter, but a lot of Republicans appear to be acting as if they do. Democrats only need 24 seats to regain a majority in the House.

When the Levee Breaks

Saturday, December 30th, 2017

With appropriate attribution to Led Zepplin, we find ourselves less than a year from the 2018 elections in a moment when it appears that there is a Democratic wave election building.

First let’s look at the evidence.

Then let’s speculate on why.

Harry Enten of the FiveThirtyEight blog printed an excellent analysis of where the two parties are today and how that compares to past off year elections.

A new CNN survey released this week showed Democrats leading Republicans by an astounding 56 percent to 38 percent on the generic congressional ballot. That’s an 18 percentage point lead among registered voters — a record-breaking result. No other survey taken in November or December in the year before a midterm has found the majority party in the House down by that much since at least the 1938 cycle (as far back as I have data).

These results are reflected in the larger aggregated poll that FiveThirtyEight produces.

What does that mean?

At this same point in time in 2006, Republicans were in the majority in Congress and Bush II was in his second Presidential term mired down in the Iraq war. Republicans trailed Democrats in the generic ballot poll by 10%. The Democrats gained control of the House and the Senate. That year they won 31 net seats. In 2018, they only need to win 24 seats to regain a majority.

We’re still nearly a year away from the midterm elections, however. And voter preferences at this point can change dramatically by election day; the average difference between the congressional ballot at this point and the final result is about 9 percentage points. But most large shifts on the generic ballot from this point onward have occurred against the party that holds the White House. Once you take into account who holds the White House, the generic ballot at this point is usually predictive of the midterm House result.

Here’s some of the why.

63% of voters think that the economy is good or excellent. Less than 40% of voters give Trump credit for that.

73% think the world will become more dangerous in 2018 because of Trump.

A majority of voters blame Trump for a deterioration in race relations. Only 13% blamed Obama for a deterioration in race relations at this point in his presidency.

52% of voters say they will probably or definitely vote for the Democratic nominee for President in 2020.

For the first time in history a past president was selected as the most admired man in the country versus the sitting first term president.

In Alabama, African-American voters over performed. They cast 29% of the vote while representing only 27% of the electorate. They also voted 96% for the Democrat. Given the history of voter suppression in Alabama, these numbers could be even better in the rest of the country.

According to a NYT opinion piece, here’s what that means for the rest of the country.

By emphasizing turnout in 2018 — especially of voters of color — Democrats can take control of the Senate, the House of Representatives and at least five statehouses. Republicans’ margin in the Senate has now slipped to just a two-seat advantage, and the Senate contests in Arizona, Nevada and Texas are all winnable if there is a robust turnout of voters of color. Texas may be considered as conservative as Alabama, but its actual demographics are much more favorable: Only 53 percent of Texas eligible voters are white (and a quarter of the whites are strong Democrats). Mr. Trump won Texas by 800,000 votes, but there were four million eligible, nonvoting people of color in 2016, three million Latinos alone.

Finally there is the enthusiasm gap. Voters opposed to Trump in particular and Republicans in general are just a lot angrier about it. As a result, they are more determined to vote.

Here’s a quote from a CNN article about the Virginia election.

In Virginia’s 2017 election, Democrats comprised 41% of the overall electorate as compared to just 30% for Republicans, according to exit polling. Almost half of the electorate (47%) said they strongly disapproved of Trump, and Democratic nominee Ralph Northam won 95% of those voters.

It is certainly possible that Trump could pivot in a different direction, but that seems unlikely.

Instead all signs point to yet another wave election where the incumbent party loses their majority. There are much more significant implications to this loss of majority for Trump because of the ongoing investigations into the actions of his administration.

Cryin’ won’t help you, prayin’ won’t do you no good,
Now, cryin’ won’t help you, prayin’ won’t do you no good,
When the levee breaks, mama, you got to move.


Above The Law

Tuesday, December 5th, 2017

On May 1, 1977 David Frost had the interview of his career. This was three years after Nixon resigned. Nixon was working on his memoirs and his publicist believed that these interviews would boost his popularity. Frost was able to get Nixon to admit that he DID cover up the Watergate burglary but that it wasn’t obstruction of justice because, in Nixon’s opinion, the President can’t do anything illegal.

Trump’s lawyer just floated the same defense for Trump.

This argument was first proposed by Alan Dershowitz this summer after the Comey firing. That argument has been dismissed by many legal scholars since including the Brookings Institute. In their document entitled “Presidential Obstruction of Justice: The Case of Donald J. Trump” they make the case that even if Trump had this authority (which is highly suspect) he cannot exercise it for corrupt purposes. Stopping an investigation into crimes committed by those in the White House is corrupt.

The problem is that Trump’s claim isn’t just for past actions. His attorney was asserting his ability to intervene in “any case” that may come up in the future. If the Mueller investigation is able to turn up credible evidence linking Trump to the crimes of others, Trump is asserting his right to “express his view” by firing everyone associated with the investigation.

Dowd is basically arguing that as the chief law enforcement officer, Trump has the authority to block investigations into himself, his allies and into his friends, and nothing he does can be construed as obstruction of justice,” Matthew Miller, a former Justice Department spokesman, told me this morning. “The logical extension of all this is that Trump can try to remove Mueller and it would be entirely legitimate.

But this ultimately won’t be a legal issue. It is a political one. That’s why the authors of the constitution gave Congress broad authority to hold the executive and judicial branches accountable for actions that were damaging to the country, even if they weren’t illegal.

Which brings us to the current problem.

Trump feels as though he can largely act with impunity because no matter what he does Republican Party leaders stand with him.

Here’s a brief list of his actions over the past couple of weeks.

  • Disputed the validity of the Hollywood Access tapes – No Republican response
  • Distributed inflammatory European anti-Muslim videos – British respond. Mild Republican response
  • Calls Sen. Warren Pocahontas at a meeting with American Indians – no Republican response
  • Piled on the sexual assault claims of celebrities and Democrats while ignoring accusations against himself and other Republicans – no Republican response
  • Wrongly claimed that the tax plan doesn’t benefit him – no Republican response
  • Endorses Roy Moore – Republican leaders (including McConnell) back off of their previous condemnations

He may be right when he says, “Hey look, I’m President. I don’t care. I don’t care anymore.”

He understands that he has the Republican Party right where he wants them. They need the passage of a tax bill (any tax bill) to support their campaign in 2018. They are not going to abandon Trump and risk fracturing the party when they are on the cusp of winning. He’s how EJ Dionne characterized it.

Don’t count on Republican politicians abandoning Trump quickly now that their tax victory is in sight. They and the president have a lot more in common than either side wants to admit. The primary loyalty they share is not to God or country or republican virtue. It is to the private accumulation of money, and this is a bond not easily broken.

The reality is that sexual assault and pedophilia are now acceptable as long as you are a Republican.

You need no more evidence than the tax plan to understand that the Republican Party does not care about the white working class voters that put them in office. When questioned about the faulty math in that bill Chuck Grassley said, we’re not talking about math here, we’re talking about philosophy. That philosophy is that what is good for business and good for the wealthy is good for the country.

What is happening instead is that Trump is remaking the Republican Party in his own image. By their silence, they are allowing Trump to define what the party stands for.

The Moore election in Alabama is a perfect example. Trump’s argument is that voters should ignore the claims of pedophilia because it is more important to have a key Republican vote in the Senate. Moore’s own defense is that his pro-life position should be all voters care about. Senate Republicans have now said they will accept whatever choice Alabama voters make.

If this is true, is there anything that Trump (or Moore) could do to cause the Republican Party to turn against him?

At this point I doubt that even video supporting the Steele Dossier Russian orgy claims would damage Trump’s core support.

Would invading North Korea and putting US territory at risk of a nuclear attack be a problem?

How about bombing Iran in an effort to destroy their nuclear facilities?

Trump is obsessed with testing the limits of his support. That has been true in his personal life. Now it is being demonstrated in his political life. The difference is that it is now our constitution and the fabric of our democracy that he is testing rather than the fidelity of his spouse or the loyalty of his employees. The only thing we can be sure of, is that as long as he is in office, this will continue. He will systematically break every taboo and challenge every social and political norm in order to prove that he is the most powerful man in the world. History tells us that these people always fail eventually. He is in the process of taking the Republican Party down with him. It will be interesting to see what the final straw will be for the rest of the country.

Same Poison Different Bottle

Saturday, September 23rd, 2017



Every time Republicans regroup in an attempt to repeal and replace the Affordable Care Act, the proposed legislation gets worse.  That in itself should tell you something about the nature of the politics at play here.

The proposed Cassidy-Graham bill is the same poison in a different bottle.  It shifts health care costs including Medicaid to the states.  At the same time, it perversely cuts funding to support Medicaid and subsidize insurance premiums.  Worse yet, all federal funding disappears in 10 years.

It hard to fathom how Republicans could come up with a plan that would be worse than repealing Obamacare without a replacement, but they succeeded.

What is even harder to understand is that even though the bill is widely opposed by healthcare experts, industry groups, AND 85% of the population, it almost became law.  At this point it appears that the bill will fall a few votes short of passing in the Senate.  It would almost certainly have passed in the House, and President Trump would have signed it.

We can no longer afford to trust the Republican Party with healthcare.  It’s too important to be the subject of this sort of politics.  Healthcare accounts for 20% of our economy.  12.5% of Americans work in the healthcare industry.  More than 32M people would lose coverage under Cassidy-Graham.

Republicans were willing to vote on this without a CBO score, committee hearings, or testimony from experts and those affected.  They were willing to vote without any input from Democratic Senators even though Senate Democrats represent a majority of voters.

Instead they were willing to pass this bill, as bad as it was, because they thought they could.  They were more concerned about their base, their ideology, and the next election; than what was best for the rest of the country.

Please hold Republicans accountable in the upcoming elections for this cowardly act.



Should I Stay or Should I Go?

Monday, June 5th, 2017

Why is Trump so unpopular?

His supporters claim that a biased media and the “sore loser” Democratic Party are to blame.  While Trump supporters may draw some comfort from those excuses, the real cause is much more obvious.

Trump has lost a third of his support since taking office based on his actions.

  1.  He passed a bill that broke his promise to replace the ACA with something which provides better coverage to more people for less money.  His bill covers 23M fewer people, raises costs for the sick and elderly, removes pre-existing conditions protections, gives a huge tax break to the wealthy, and saves no more money than the ACA.  73% of voters oppose it.
  2. His admitted Muslim travel ban was poorly implemented and struck down by the courts.  Most polls show that the public supports the courts and opposes the ban.
  3. 78% of Americans support an independent investigation of the claims of Russian involvement in the election and Trump’s potential obstruction of justice.
  4. 62% of voters want to stay in the Paris Accords.  Trump announced the US was leaving based on an economic argument that was widely criticized by the fact checkers.
  5.  A majority of Americans (53%) want Trump to release his tax returns.
  6. Finally a majority (54%) of Americans believe President Trump is abusing his powers.

Trump’s historically low approval ratings are his own fault.  Neither the media nor the Democrats forced him to take these actions.  Hopefully his current supporters will also eventually hold him accountable.

For those Trump supporters who aren’t there yet, allow me to share the thoughts of Ray Dalio.  He is a billionaire hedge-fund manager who has been a vocal Trump supporter until recently.

His concern is that he hasn’t seen the pivot that he was expecting from Trump.  That was a pivot from seeking confrontation to implementing policy.  Trump won.  He has an historically unique moment for the conservative movement – Congressional and Judicial majorities.

Instead Trump has spent his time in office seeking out conflict.  Instead of making the fundamental changes in the way that government operates that he promised, Trump continues to drive the world to the brink of disaster environmentally, militarily, and financially.

Here’s how Dalio is evaluating his choice.

It seems to me people who are trying to figure out whether or not to support him are faced with three big questions: 1) what exactly is the part he’s trying to optimize for (e.g., American manufacturing workers) and at the expense of whom, 2) am I more aligned with that part he is trying to protect (e.g., American manufacturing workers) or more aligned with those who will lose out (e.g., immigrants, those who will lose benefits from his budget changes), and 3) will his path of conflict rather than cooperation be effective or harmful?

The rest of us are looking forward to 2018 when we plan to use the ballot box to vote out those who supported his plans.

The Perils of Trump

Monday, February 13th, 2017

Trump nation-tracker-overall-1

Trump has become one of the most unpopular President’s in history in the shortest time on record.

Because he lost the popular vote by such a wide margin, he didn’t enter office with much support outside his party. That support is now gone.

Whether Trump’s approval rating will drop further depends largely on independents and Republicans — he has almost no support to lose among Democrats. If those voters do sour on him, that could pose a threat to Republicans in the midterm election in 2018. The incumbent president’s approval rating historically serves as a good predictor of how many seats his party will lose at midterm.

Based on recent studies, we can make some predictions of where future erosion could occur.

His core support represents about 22% of the population. These folks are going to support Trump no matter what.

The next group are going to support him based on what he delivers. These represent another 22% of the population. These first two groups, the “believers” and the “conditionals” make up the 44% of the population (more or less) that approve of Trump’s performance so far.

The “conditionals” are interested in an improved economy, cleaning up Washington corruption, defeating ISIS, and building the wall in that order. If he fails to do any of those things, he will lose their support.

Let’s look at the challenges that Trump has with this group of “conditionals”.

Trump’s economic plan has a big problem. There aren’t enough workers to support the growth that he has promised. Worse than that, Trump is also expected by this group to put a tough immigration plan in place. Immigration is the easiest place to find the workers that Trump’s economic plan REQUIRES.

Here’s the math. We currently employ 152M people. Trump wants to add 25M more jobs. He needs that job growth in order to deliver the 4% a year GDP growth that he has promised. He’ll get 8M from population growth. If we are able to return to historical highs in workforce participation, he’ll get another 8M. That still leaves him 9M short.

There are only two places he can find those extra jobs. Either immigrants are going to fill them or he’s going to have to figure out how to convince baby boomers to come out of retirement.

The problem is that he can’t fill them with immigrants because one of the other things that the conditionals are going to hold him accountable for is keeping immigrants out and deporting those who are here illegally. That leave seniors. 19% of those 65 and over, work today. In order to hit his numbers, that percentage has to increase to 32%. Even that won’t get the job done, because 7M jobs are filled today by undocumented workers. If you deport all of those workers in addition to keeping new workers out, Trump’s plan adds only 9M new jobs. That’s not nearly enough to hit his GDP numbers. It barely keeps up with the jobs that population growth will require.

Trump is left between a rock and a hard place. Investments to grow the economy without increases in both productivity and workforce are going to spike inflation as demand exceeds supply. That’s going to lose him the support of the conditionals who will have a harder time buying a house, paying their adjustable mortgage, buying a car, and paying their bills. If he reneges on his immigration plan, he will lose the support of the conditionals even if it does help him keep his economic promise.

Trump has already lost the last two groups (curious and resister). He won’t get them back because their views are diametrically opposed to his base and the conditionals. They don’t want a wall.  They want to keep Obamacare. etc.

The only logical result is a continued erosion of the “conditionals” as Trump fails to deliver on his promises.

Most presidents lose ground during their first two years. The average decline since World War II is just short of eight points, according to a compilation by Marquette University political scientist Charles Franklin. If Trump follows that pattern, he could end up with an approval rating in the high 30s — perilous territory for congressional candidates running in swing districts.

If he survives all of the other challenges that currently seem to surround his administration, the historic patterns leave him in very dangerous territory. Bush II lost control of both the house and the Senate in 2006 because the country was tired of the Iraq War. His approval ratings were in the 30’s.

House members are already dealing with tea-party-like disruptions at their local town halls. Republicans are already backing away rapidly from any immediate action on Obamacare replacement because of fears of the impact that might have on the 2018 elections. Trump hasn’t even started to try to get his agenda through Congress, and the news cycles are dominated by stories of disarray, conflict, and foreign intrigue.  By way of comparison, by the third week of the Obama administration stimulus legislation was already being debated.

The closer that we get to the 2018 elections, the less likely it will be that at least House Republicans are going to be willing to take controversial votes. If healthcare reform remains undone, some voters are going to hold him accountable for NOT making the healthcare changes he promised. Other voters are going to vote for Democrats to PREVENT him from making the changes that he promised.

There is no clear path for Trump to improve his situation.

There are only many opportunities for it to get worse.

What Happened?

Tuesday, December 20th, 2016



We elected Trump president.

He is by all objective accounts the least qualified person ever elected to this office.  Yes he is a businessman and by all appearances a very wealthy person.  We have elected business people to this office in the past, but never one with absolutely no government experience.  We have also elected wealthy people to this office in the past, but never one who claims to be as wealthy as this guy.  As a result, we have no idea how he will perform because we have no previous history to use as comparison.  The closest we can come is Herbert Hoover, and that didn’t work out so well.

In as a dispassionate way as possible, I’d like to figure out why and then perhaps lay out just a few of the challenges that he and we will face.


Republicans began this race with a significant advantage.  US voters simply don’t like to give any particular party more than 8 years in the White House.

The Clinton campaign understood this challenge.  As it became clear that Trump would be the Republican nominee, they crafted a strategy to highlight the risks of electing someone with so little government experience.  They framed this election as a choice between change and risk.

Here’s an example of how Clinton discussed this choice.

Donald Trump’s ideas aren’t just different – they are dangerously incoherent. They’re not even really ideas – just a series of bizarre rants, personal feuds and outright lies.

He is not just unprepared – he is temperamentally unfit to hold an office that requires knowledge, stability and immense responsibility.

As proof of how effective her message was, Clinton won these points.

  • Just 38 percent of voters said that Trump was “qualified” to be president (52 percent said the same of Clinton).
  • Just 35 percent said Trump had the “temperament to serve effectively as president” (55 percent said Clinton had the right temperament to be president).
  • One in three voters said Trump was honest and trustworthy (36 percent said the same of Clinton).

But she still lost the popular vote in the key states of Wisconsin, Michigan, Pennsylvania, Ohio, and Florida.  That’s because the desire for change was stronger than the perceived risks associated with that change.  Four in 10 voters said the most important character trait in deciding their vote was a candidate who “can bring needed change” to Washington. Of that group, Trump won 83 percent to Clinton’s 14 percent.  In effect, all that Trump had to do is demonstrate that he was NOT part of the establishment in order to win this election.  For the change voters, particularly in the key battleground states that I listed, all of his objective weaknesses were strengths.


I had thought that the Obama victories spelled the end of white angry male politics.

I was wrong.

Clinton still did well with emerging demographics.  The white male voter segment is getting smaller in every election including this one.  That vote increased 2% from 2012-2016.  In comparison the black vote increased 6%.  The Asian vote increased 16% and the Hispanic vote increased 17%.  The problem for Clinton was that most of those votes were in states like California rather than the battleground states where Trump was able to eke out narrow victories.

Clinton won 55% of the young vote, but they weren’t as large a percentage of the total vote in 2016 as they were in 2008 or 2012.  Clinton also improved as a percentage of 65+ voters over those who voted for Obama in 2012, though Trump won that demographic by roughly 10%.


The country continues to become more liberal as demographics change.

The vote on immigration this election was almost evenly split.  That is a dramatic improvement over the negative view of immigration a decade ago.  74% of Americans now believe that there should be a path to citizenship for undocumented workers.  61% oppose building a wall.

Large majorities of all voters support more aggressive actions on gun control including expanded background checks, keeps guns out of the hands of those with mental health issues, barring those on no-fly lists from purchasing guns, tracking gun purchases in a national database, banning the sale of high capacity ammunition clips, and even restricting the sale of assault-type weapons.

65% of voters are concerned about climate change and believe it is a real issue.

60% support same sex marriage and LGBT rights.  A majority also oppose “Freedom of Religion” laws.

Where We Go From Here

There are a number of issues that could easily derail a Trump presidency.  The basic challenges remain that he is deeply inexperienced AND that he has chosen to surround himself with others who can only be generously classified as outsiders.

He was certainly elected to “shake up” Washington.  But Washington isn’t going to welcome change.  The same is true with the rest of the world.

So here’s my list of the challenges that Trump is going to have to navigate to survive his first term and get re-elected in 2020.

China, Russia, Iran, Israel, and ISIS

The One China policy has allowed Taiwan and China to peacefully coexist for decades.  Trump upset that policy with one phone call.  China’s response was to grab some of our stuff.  Escalation is not a good formula here.  Trump is already talking about killing the TPP.  That agreement was crafted to provide the other Pacific Rim countries an alternative to accepting China’s trading rules.  If China controls the rules of trade in the Pacific, they will also have tremendous economic leverage over those countries.  That will make it more difficult for the US to oppose Chinese aggression in the region.  What will Trump do if China threatens Taiwan?

It would be great to have better relations with Russia.  But Russia has been aggressively expanding its sphere of influence in border countries by intervening in their elections and annexing territory.  What is Trump going to be willing to give (or take away from) Russia that will cause them to change their behavior?  Trump is in dangerous territory if it turns out that there were contacts between his campaign and Russian hacking during the election.  Trump is also in dangerous territory if ongoing Russian hacking expose the inner workings of the Trump administration in the same ways that it exposed the inner workings of the Clinton campaign.  What leverage does this give Russia?  Russian reactions to the assassination in Turkey could lead to a military escalation early in Trump’s administration.  Turkey is our NATO ally.  How will the Trump administration respond?  Trump also has real estate holdings in Turkey.  How will Trump respond to actions that threaten some of his properties?

Trump has said that he will move the US embassy to Jerusalem.  That move would signal the end of any two-state solution.  It will also give Israel free reign to continue their economic and military persecution of Palestinians.  How will the Trump administration respond to an Israeli crack down on a Palestinian uprising that resulted in a large number of Palestinians being killed?  How will a Trump administration respond to an increase in military actions by Israel’s neighbors in reaction to a brutal military crackdown of a Palestinian uprising?

That leads naturally to Iran.  Israel has every right to fear Iran, and Iran has every right to fear both Israel and the US.  Iraq used to be the balance to Iran, but our invasion of Iraq upset that balance and caused Iran to start their nuclear weapons program.  They’ve stopped that development because of their interest in joining the global economy.  But if Trump figures he can get a better deal and is also seen as a close ally of Israel, this whole deal could come apart.  What will Trump do to prevent Iran from getting a nuclear weapon?  What will Russia, Iran’s close ally, do if the US or Israel take some aggressive action against Iran because of their resumed nuclear program?

ISIS will continue to attack around the world.  He has been curiously silent, for example, after the Berlin attack.  After Trump’s inauguration, I predict that his named properties will become targets.  This isn’t planned, but random.  How is Trump going to respond?  The reality is that there is little he can do.  He can attempt to bomb them, but if anything that will only increase the domestic terrorism that is now the bulk of ISIS action.  He will fail to be effective and ultimately voters will hold him responsible.

Conflict of Interest, Deal Making, Obamacare, Infrastructure, Tax Reform, and Republicans

Trump has a serious conflict of interest problem.  There are no indications that he is going to take steps to effectively insulate his business and his family from the potential benefits that would accrue to those businesses from his office.  Even worse, he also needs to insulate himself from the APPEARANCE of conflict regarding foreign contributions.  Just one example is the fact that he owns hotels.  Every time someone employed by a foreign government stays in one of his hotels, he is in potential violation of the constitution.  Congress and the American people will let him slide for a while, but he is taking grave risks against some future event that will paint him as corrupt.  I’m not sure how many of those events he is going to be able to survive, since he was elected to clean up the corruption.

Deal making is also going to be very difficult for him because that’s not how government business is done.  Deals are done politically, not financially.  It is ok to trade influence.  It is not ok to trade money.  There are a large body of regulations which prohibit favoritism in government contracting.  Trump could easily run afoul of these laws in his attempts to personally negotiate the country’s business.  The difference here is that, rather than a political backlash, he will get sued by whatever corporations felt that they were disadvantaged by one of Trump’s deals.  How many of those suits will have to occur before Congress decides that they have had enough?

It is going to be very difficult to replace Obamacare.  Collin Powell famously said of Iraq, “if you break it, you own it.”  The same is true of Obamacare.  If Republicans repeal it without a plan to replace it, even if that repeal is delayed until after the 2018 elections, the exchange structure could easily collapse.  If that happens, millions of people will either lose their insurance, or see their premiums rise dramatically.  This could easily turn into a daily drip-drip-drip of bad news, much like the financial collapse of 2008.  That bad news and the inability of the Trump administration to do anything about it, will result in a big 2018 backlash and the beginning of the end for Trump.  He will say that he did what the voters elected him to do, but voters are going to blame him because he promised to make it better.

Trump hired a budget hawk for his OMB director.  This budget hawk is going to have to figure out how to fund the massive infrastructure bill that is the foundation for Trump’s jobs program.  It is going to be very interesting to see how this plays out.  The infrastructure bank idea is an invitation to crony capitalism and will only work in big urban areas where investors have an opportunity to monetize their projects.  It isn’t going to help those vast under served rural areas where many Trump voters live.  The cuts to other federal spending that would be required to pay for this, if it isn’t financed through debt, will result in MORE job loss and hardship for those rural voters rather than less.  Their life will get harder, unemployment will go up, and they will vote for a different change in 2018 and 2020.

Tax Reform will be another give away to the rich.  This may turn out to be the least controversial of the programs that Trump takes on.  But it is also fraught with danger for Trump.  If Trump voters weren’t already sensitive to a cabinet filled with billionaires all getting big tax cuts, they will be.  If Trump hasn’t divested himself from his businesses, you can bet that the benefits that his family gets from Tax reform will be front page news and Trump’s hypocrisies will dominate social media.

Republicans are the most interesting piece of this puzzle.  Just as they rallied around Trump as it became obvious that he was going to win, they will abandon him if he appears to falter.  They will determine if they can mold him in their image.  When that fails, they will see if they can maneuver him politically to carry out their agenda.  When that fails, they will see if they can trip him up and get him out of the way, so that they can replace his agenda with theirs.


I will be surprised to see Trump complete his term.  I think that foreign intrigue will reveal his fundamental weaknesses and terrify voters.  Hopefully, we will avoid a conflict.  If not, it will go badly.  If he avoids foreign conflict, he will fumble Obamacare and the repercussions will cost him at least his senate majority in 2018.  The house will eventually impeach him for conflicts of interest and the post 2018 senate will confirm that impeachment making him the third president to go through an impeachment trial, and only the second one to lose.

I would prefer that this not be the script for the next four years, but Trump is sowing the seeds of his own destruction as we speak.  He is not taking the steps to insulate himself from potential conflicts of interest.  He is secretive and combative rather than transparent.  He trusts in his own ability to communicate with the public directly, but the public will soon be able to see for themselves whether the results match his promises.  He is picking fights with his intelligence agencies which makes him even more vulnerable to bad information.  His cabinet of outsiders will likely agree with him rather than oppose him.

We will face a challenge as a country too.  That’s because Trump will try to blame his failures on others.  We have to be vigilant to prevent Trump and his followers from using domestic turmoil to distract us from his administration’s failures.  He should have every opportunity to prove me wrong, but if he fails, he alone should be held responsible for the consequences of his failures.


Trump’s Swamp Fever

Sunday, November 13th, 2016


One of Trump’s closing arguments was his promise to “drain the swamp”.

Less than a week after winning the election in dramatic fashion and preparing to move into the White House, he appears to have caught a serious case of swamp fever.

He may have been infected from the whole set of Washington insiders that he has invited to help him plan the transition.

He may have caught it from President Obama himself. After what he described as very cordial meeting for which he appeared genuinely grateful, he described Obama as a very good man.

That wall that he promised to build on day one? Newt Gingrich admitted that Trump probably can’t get Mexico to pay for the wall, but that it was a “great campaign device”.

Instead of appointing a special prosecutor to investigate Hillary Clinton and Barak Obama, in an exclusive interview with the WSJ, Trump said, “It’s not something I’ve given a lot of thought, because I want to solve health care, jobs, border control, tax reform.”

Instead of making the repeal of Obamacare his first priority, instead he is talking about a series of amendments to improve it.

Oh and that Iran nuclear deal, one of the worst deals in the history of the world? He kinda likes it. He’s going to talk with the Iranians about a couple of his concerns, but he isn’t going to tear it up.

Moving or embassy to Jerusalem (a big issue for Sheldon Adelson)? Trump’s campaign said that any move would come only after there was a consensus by all parties. The Palestinians have been and are seriously opposed to the move.

That waterboarding stuff? Mike Rodgers representing the Trump campaign said it was just “campaign talk”.

Instead of supporting Paul Ryan’s call to privatize Medicare and Social Security, Trump has been curiously quiet.

Those mass deportations? They are history too. Instead Trump has said he is only going to deport those illegal immigrants who commit violent crimes. This is pretty much what the Obama administration has been doing for the past 8 years.

Those nasty late night tweets? Even they appear to have moderated. After sharply criticizing the #notmypresident demonstrations, he quickly released another tweet celebrating their passion and their right to express their opinion.

What happened to this guy?

Who kidnapped Donald Trump and replaced him with a thoughtful moderate?

Here’s my take.

We already know that he is not an ideologue and his main principle appears to be his own self-interest.

What we may be discovering is that he is more of a narcissistic Zelig chameleon than anyone thought.

We also may be discovering that he understands that he has to start working now to win the midterm elections in two years. Those who didn’t vote for him are just waiting for his first misstep to turn the next two years into an Occupy Washington protest.

We are now 7 years into this economic expansion cycle. We are starting to see some inflation and finally a little wage growth. We are well overdue for a recession.

The best thing that Trump could do to protect his Congressional majorities in 2018 is pump a lot of money into the economy as quickly as possible in the form of infrastructure improvements. We know from Obama’s attempts to do the same thing on a MUCH smaller scale that it takes a while to get this going. Obama may have warned Trump about how long it will take to get anything done in Washington. We also know that big spending bills provide plenty of opportunities for back seat driving and second guessing. The last thing Trump needs is a fight over this. The best way to get spending bill passed quickly is to make sure that the Democrats are on board too. He may need their help to overcome the fiscal conservatives and small government ideologues that still dominate his party.

By narrowing his focus to jobs, securing the boarder, amending Obamacare, and passing his tax plan; he can gain enough good will with the public to gain a little momentum. If he can find a way to work with the Democrats rather than poking them in the eye, he can continue to keep the Republican establishment off balance. Perhaps Obama also warned him that the Republicans in Washington are not his friends.

Since he doesn’t have the votes to over override a Senate veto, he would be wise to take small steps that will make it through the Senate. Otherwise, he runs the risk of the Democrats running out the clock on his first two years in much the same way that Republicans tied up Obama.

If he can find a way to get government working again by pivoting to the center, while still retaining the support of his base, he may prove to be a better politician than anyone imagined. If so, it may turn out that swamp fever isn’t so bad after all. If, however, this is really honeymoon fever, and the old combative Trump returns, it could be a bumpy two years.