Month: June 2017

A Modest Proposal on Healthcare

/ ontheoutside / 1 Comment

Seems like we’re making things too hard on healthcare.

Both sides should remember what they really care about:

Republicans have already amply proven that the only part of ACA they care about is the surtax.   They don’t have to keep proving it anymore.  They’d also like to save some money if they can.  They only make a mess when they pretend they want to do healthcare.

Democrats either want ACA to continue in its current form or they want it to evolve to a single payer system.

Further Trump has made this simpler in two ways:

  • His tax proposal greatly diminishes the need for rich people to pay for any part of the federal budget.
  • His budget goes far beyond anything Dick Cheney dreamed of when he said deficits don’t matter.

So the solution is right there before our eyes:

Keep ACA.   If you want to pay for some part of it, put it in the general budget, so rich people get a huge break in any case.

And if you want to save money, go to single payer.

All done.  Everyone can go home happy!

Our President of China

/ ontheoutside / 7 Comments

There has been a lot of talk recently about China’s growing presence on the world stage and how the US as predominant power should react to it.  With that in mind we go to China, just outside the Forbidden City, where the Chinese are planning their strategy…

Xi Jinping: There are many factors we need to consider, economic and political.  Today we are an economic servant to the West, building their iPhones and other toys.  We need to learn to take their place.

Planner: The Americans have many advantages.  They have excellent universities and their pick of talent from all over the world.  They have an interlocking system of university, government, and private research labs.  It’s hard enough to catch up, much less to lead.

Xi: We have to go step by step.  I’ve heard that many of their new companies are led by foreigners.  We can cut into that and certainly lure our own people home–a little xenophobia would help.   As for education and research, we know that government money is critical both in government labs and in the universities.  We have to find a way to slow down that money and then duplicate their system here.

Planner: Sounds like a lot of work, but we’ll start on it.  They’ve been working for decades to get where they are.

Xi: We need to get more specific now.  What are the lead technologies we can use to establish our dominance?

Planner: It’s hard to answer that question.  Software is always there; the particular new twist seems to be Artificial Intelligence.  That ties in with robotics.  Biotech.  Probably the biggest thing is energy–climate change means the whole world will have to convert.

Xi: The Americans are big players in all of those, but progress is very international.  If we can get them to isolate their people we can win.  Energy is too big–we need to limit their role.

Planner: They were a driving force behind the Paris Climate Agreement.  Maybe we can sabotage that.

Xi: Great.  Good first step!

Xi: The next subject is politics.  The Americans have been leading the so-called ‘free world’ forever.  Everybody works with them; no country wants to be left out.  All major international agreements of any kind go through them.  They’ve done very well that way–they are the richest, most dominant country in the world.  Our presence is tiny compared to theirs–how can we match their influence?

Planner: The only way I can think of is to get them just to quit. Get out of our way so we can take over.

Xi: I don’t understand.

Planner: It seems that over the years the Americans have come to believe their own propaganda–that all of their international agreements and institutions were setup out of pure beneficence!  Nothing to do with remaining the richest, most dominant country in the world.  They even think that about foreign aid.

Xi: You’ve got to be kidding.  No one else thinks that.

Planner: All we’ve got to do is push them over the brink:  No international institutions, no foreign aid–all unaffordable charity and a foreign plot.

Xi: You really think you can pull that off??

Planner: Well, just a minute.  We need some kind of slogan.  Something catchy…

Planner: I’ve got it!!  AMERICA FIRST.

Xi: Welcome to the Chinese Century.

 

Trump and Jobs

/ ontheoutside / 1 Comment

No one should ever underestimate Trump’s skill as a salesman. He has made a lot of money with that talent, but it’s hard to imagine anything that ranks with his sale of the promised land of jobs.

Start with the basics:
– Trump is opposed to unions and any increase in the historically low minimum wage .
– In his own enterprises he has used foreign manufacture and imported foreign employees on a continuing basis
– His treatment of contractors and investors in his huge bankruptcies was both devastating and deliberate.
– He is opposed to regulatory protections for working conditions.
– In his budget he has proposed a complete dismantling of the safety net to protect people who lose jobs.

All told one can say without exaggeration that Trump’s attitude toward workers is that government should do everything possible to weaken their position in dealing with management.

The promised land of new jobs is supposed to counterbalance that.

What stands behind all those jobs? Only two items:

– Removing any regulation that any businessman doesn’t like.
– Cutting taxes on corporations and rich people.

The only thing that is guaranteed about those items is that they will make people like Trump richer. The connection to jobs is so problematical that it is hard to believe that he ever cared enough to look at it:

– Reducing personal income taxes on rich people has a long track record of failure to produce growth.
– Deficit-based stimulation at this stage of the business cycle is at best risky. The most likely scenario is inflation leading to job losses, but it even invites another 2008-like crash.
– Neither corporate tax cuts nor deregulation has a history of increasing jobs. Corporate tax cuts tend to get passed through to investors.  Level of regulation is not necessarily even correlated with jobs.   One can even argue that states with more regulation perform better economically.

– We are moving ever faster into a two-tiered society with participants and (increasingly many) non-participants in the technology-driven economy–none of which is addressed or even recognized in this picture.

 

Trump’s jobs proposal isn’t one–it’s just a shopping list of what’s good for him.

Trump is the same Trump he has always been: lead salesman for his businesses.  The most you can say is that he probably believes that what’s good for himself is good for everyone–but that’s as far as the thought goes.

Six bankruptcies (among other things) have shown the consequences of believing him.

But he’s sure a hell of a salesman!

This is the Richest Country in the World

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The title of this piece is a fact.  By itself the statement is not controversial, but it shows the deliberate misinformation we’re surrounded by every day.

There is a good example from Trump’s speech exiting the Paris Accords: “cash-strapped cities cannot hire enough police officers or fix vile infrastructure.”  The statement is perfectly true, and there is a reason why that statement is true for the richest country in the world.   It is that Trump himself and people like him have taken more and more of that wealth for themselves–and out of the public sector.

For the past six years the Republican Congress has blocked essentially all new expenditures for the public good.  And Trump’s proposed budget will make that a full-scale assault on states and cities.   He is both reducing current aid and also pushing more and more responsibilities for services their way.  The story also includes the Republican-led scandal of education, where reduced state government support for education since the 2008 crisis has contributed to a whole generation trapped with student debt.  (In Trump’s budget the coming DeVos nightmare is its own story–since there is no guarantee what will be paid for by voucher, good education will be sold to the bidder in the brave new world.)

This is the richest country in the world, but the fact that many people don’t feel it doesn’t mean there is no money.   The money has been taken out of the system for the benefit of people like Trump, and they are now proposing to take more of it.

Trump says he is preparing an economic nirvana, where all those who are currently left out will be saved.  More on that pipe dream in a minute, but focus on the explicit reality first:  upper-income tax payers like Trump will make trillions of dollars on it.   There is even a brand new big “pass-through” loophole for rich tax payers like Trump personally. There will be scant benefit for the middle class, and even that may be eaten up by the added costs imposed on the states.  The poor will be slammed on all fronts.

As to the nirvana:

  1. The economy is close to full employment in the sense that good new jobs require specific skills, so most of the current unemployment is structural—due to skill mismatch, not the level of economic activity.  Job training programs are actually cut in Trump’s budget.
  2. Few economists believe that anything close to Trump’s proclaimed 3-4 % growth is going to happen, or even that such growth would prevent a deficit. The deficit itself is inflationary, and would ultimately cause job loss rather than growth.
  3. Stimulus deficit spending at this stage in the business cycle is so foolhardy, that no previous President–Republican or Democrat–has ever wanted to do it. At the very least it invites inflation and the possibility of another 2008-like crash.

This is not Trump’s “genius” at work, it is something far simpler.   Trump believes what he is says, because he is still Trump the salesman looking out for himself:  taxes are bad, regulations are bad, unions are bad, minimum wage is bad, research is a waste.  As a salesman Trump has always had a particular gift for believing what he sells.   And what he is selling is simple:

“What’s good for me is what’s good for the country.   Stop bothering my companies and cut my taxes and everything will be just great. “

There is nothing else here but that.

As the saying goes: if you want to know what is going on–follow the money.  And it is clear where it is going in the richest country in the world.

What the Paris Accords Decision Tells Us

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This note is not specifically about climate change.   It is about Trump’s decision to abandon the Paris Accords and his speech to defend it.   Even after all that had come before it, the Paris Accords decision was a watershed.   The picture is stark.

  1. Trump feels no responsibility for the ultimate consequences of his decisions.

As we noted before, Trump’s speech never even raises questions about the significance of climate change.   He doesn’t bother to dispute it.   Instead everything in that speech is about deliveries to his targeted constituencies.  This is the Mafia Don who has eliminated the opposition and is out to provide spoils to his supporters.   (It is relevant that Trump’s supporters have caught that message—a  NY Times reporter quotes them asking when the “winning” will start.)  There is no other layer of concerns.

This is not just a matter for climate change, important as that is.   It is equally relevant for economic policy, where he is proposing huge deficit-supported stimulus to an economy near full employment while removing the safeguards added to prevent another 2008 crash.  And—with the constant discussion of military buildup but no specified objective—it is also relevant for the very real threat of war.

  1. Trump ignores all demonstrations or other inputs outside of his immediate circle.

The enormous outpouring of opinion on the subject of climate change and the Paris Accords is unacknowledged in Trump’s speech.  The speech didn’t even address the substance of the issues raised.  All we got was blatantly falsified economic statistics, a personal commitment to the coal industry, and a secret world-wide conspiracy again US competitiveness.

Trump’s belief in his own genius is such that other expertise or expressions of concern simply don’t exist.  Other Presidents of course have had advisors and inner circles, but most have recognized they are Presidents of the United States and have at least had an interest in what gets said.  With Trump we have the closed world of a dictator.   We on the outside have no way in.

  1. There is no check on Trump’s impulsiveness and self confidence

That is perhaps the most concerning of all.  It doesn’t bother Trump to go at cross purposes with the vast majority of reasoned opinion.   From his point of view that is courage, but there is a difference between courage and foolhardiness.  Courage is doing everything possible to understand the situation and taking a decision that may be unpopular.

Here we’re talking about “I’m a genius, everyone else is an idiot, so fuck them.”  That is what produced six major bankruptcies including the spectacular ones at Atlantic City.  There Trump built three big casinos as prevailing opinion was deciding the party was over—and they were right.  Trump is perfectly capable of leading this country and the world into predictable disaster without a second thought.  He has done it before—six times.  That is of course what is behind the whole Russian story—banks in the US wouldn’t deal with him anymore.

Trump himself has always moved on to the next project, leaving the investors and contractors to suffer.  But we have only one world and nowhere to hide.

Terrorist in Chief

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What is most remarkable about Trump’s speech exiting the Paris Climate agreement is what he doesn’t say.

There is no actual denial of climate science or of the consequences of doing nothing.  And there is no alternative proposal to address any of it.

Instead there is a bunch of economic nonsense from National Economic Research Associates–who specialize in producing alarmist numbers for the coal industry–and some elaborate misinformation about asserted unfairness of an agreement that was negotiated over years with pluses and minuses for everyone.  (When he ends by talking about “other countries laughing at us”, it’s hard not to think of the Saudis after they snookered him with their sword show and got everything they wanted with no concessions in return.)

Basically all he says is that he is entitled to ignore all consequences of climate change for this country and every other country in the world in order to make good on a campaign promise to the coal industry (it remains to be seen if miners will benefit).   He can’t claim ignorance of the consequences for the earth and the US economy, because he received clear indications of what he was doing from an astonishing collection of major business groups throughout the country.

On that basis Donald Trump stands to be responsible for more death and damage than all other terrorist groups combined.

So Trump has finally earned one of his superlatives–he is Terrorist in Chief.