An Economic Genius: Part One
July 9, 2019
Donald John Trump was one of 366 student members of the class of 1968 who was awarded a Bachelor of Science degree in Economics from the Wharton School of Finance and Commerce at Pennsylvania State University (Penn State).
Other than his bachelor’s degree and some experience working in the family real estate business, there is no evidence that Mr. Trump has pursued additional education, credentials or capabilities in the field of economics.
Trump’s paucity of bona fides in the world of economic theory and practice has not deterred him from taking an active role in testing new economic concepts.
From an economic perspective, the presidency of Donald Trump will likely be remembered primarily for his America First posture, which has influenced immigration, tariff and tax policies.
Immigration: Trump administration policy decisions focused on immigration have dramatically hurt domestic agriculture, food processing, hospitality, tourism and other low-wage, entry-level service occupations.
Tariffs: Tariffs imposed on imported goods and materials are nothing more than a tax paid by the end user, in many cases, the American consumer.
Tariffs can be effectively used as a component of a strategic long-term plan to reposition the competitive position of American manufacturers on the world stage.
There is no known evidence that tariffs have ever brought any long-term value-added when arbitrarily and capriciously applied.
Trump administration subjective tariffs on imported steel and aluminum (justified as a means to “protect our country and our workers”) have proven to be a financial burden on several high-wage value-added U.S. industries, including: Automotive; Aerospace; Construction; and Manufacturing.
Tax Cuts: The signing of the Tax Cuts and Jobs Act in December 2017 was lauded as landmark legislation which would: (a) lower taxes on businesses and individuals; (b) stimulate higher wages and more jobs; and (c) result in a larger and more dynamic economy as a result of dramatically increased domestic business investment in plant and equipment.
Almost two years after the passage of TCJA, it seems clear that some near-term economic stimulation was achieved, but the long-term impact on gross domestic product (GDP) will be modest, if at all. The impact will be smaller on gross national product (GNP) than on GDP because the law generated net capital inflows from abroad that must be repaid in the future.
The expectation touted by elected officials in their frenzy to pass the TCJA envisioned some $4 Trillion being repatriated, generating new and potent investment and jobs in the U.S.
Most recent estimates reflect $3 Trillion (or more) in profits that U.S. companies have left parked overseas, with about $465 Billion in “repatriated” cash returning to the U.S. to enjoy a tax rate of 15.5% (vs. the 35% prior tax rate) on profits returned to the U.S. from overseas.
A good outcome? Sure, in the short term. Capital investments? Plant and equipment? Not so much. There is virtually no evidence that any of the repatriated cash was invested in job creation. It was invested in executive bonuses; stock buy-backs; debt repayments; and some dividend enhancements.
Please stay tuned, there is more to come…..
The Grim Reaper?
June 18, 2019
The U.S. Senate consists of 100 members – 2 elected from each state — independent of population. Under the Constitution, our elected Vice President serves as the President of the Senate, and presides over the Senate’s daily proceedings, and only the Vice President has the authority to cast a tie-breaking vote.
Over the past 2 decades, I’ve become more and more befuddled, baffled and bewildered by the apparently bad behaviors of some of those elected to represent us in the U.S. Senate.
Currently, it seems that one of the 2 Senators elected from Kentucky – Senate majority leader Mitch McConnell – has acquired extraordinary power over the operation and functionality of this key part of the legislative branch of our federal government!
While it is perfectly clear that McConnell has usurped extraordinary power over the functionality of the Senate, he could have only acquired this power from the spineless reptiles who worship at his feet.
How can it be possible that one person – elected from the great state of Kentucky – has the arbitrary and singular power to schedule — or not schedule – votes on bills by the Senate?
How can it be possible that one person – in this case, the Senate Majority Leader – has obtained the power to fully obstruct a government of the people, by the people and for the people?
The arbitrary and unilateral power of the Senate Majority Leader is not derived from the Constitution, from any law, or from formal rules of the Senate.
Instead, it is entirely based on informal, colloquial and unwritten rules established over time by a collection of precedents, beginning with an informal ruling by then-Vice President John Garner in 1937 which created a “right of preferential recognition”.
Vice President Garner – serving in his Constitutional role as Senate President – may have been trying to create order within a body of highly assertive and opinionated elected officials from very diverse geographic and economic backgrounds.
Regardless of intent or motivation, the Garner precedent continues to serve as the foundation upon which Majority Leader power is based in the Senate today.
Today, there is one person — elected by some voters in Kentucky — who has the power to obstruct a government of the people, by the people and for the people.
Very recently, Mitch McConnell proclaimed that no issues which he objects to would be voted on in the Senate. He said, “So think of me as the Grim Reaper” — the guy who is going to make sure that we fully support the agenda of our current President.
Is this what the American people really want?
We Have a Winner!
May 24, 2019
Competition for the coveted “Horse’s Patootie” award this week was fierce, almost resulting in a hung jury.
Rep. Chip Roy (R-Texas), a member of the freshman congressional class of 2019, narrowly emerged as this week’s winner.
Following Senate passage (85 to 8) of a long-awaited $19+ billion disaster aid bill, Mr. Roy refused to grant his accord for the House to pass a unanimous consent resolution to move the bill to POTUS for his signature into law. (President Trump had already agreed to approve the bill as passed in the Senate.)
Although new to Congress, Roy served for several years as chief of staff to Sen. Ted Cruz (R-Texas), including that period in 2013 when Cruz led a campaign which led to a 16-day government shutdown as a symbolic means to force repeal of the Affordable Care Act.
Most ironic, perhaps: Even Cruz voted in favor of this 2019 disaster aid bill citing its importance to Texas, as about 20% of the $19 Billion in aid is destined to parts of Texas prone to hurricane damage.
It has been reported that Mr. Roy will be staying in D.C. over the Memorial Day holiday to avoid a “Tar & Feathers” party promised by his Texas constituents.
The Untouchables
April 23, 2019
The Untouchables television series debuted in 1959 loosely based on a memoir written by Eliot Ness, chronicling his career as a federal Treasury enforcement agent in the 1930’s.
The TV series starred Robert Stack (as Eliot Ness) as the leader of a team of Prohibition Agents employed by the U.S. Department of the Treasury following their efforts to bring down the bootleg empire of “Scarface” Al Capone.
The team of agents was nicknamed “The Untouchables” because of their courage, moral character, and incorruptibility; legend said they could not be bribed or intimidated by the Mob.
The Untouchables was a landmark television series that spawned numerous imitators over the decades, including S.W.A.T.; The F.B.I.; Crime Story; the original Hawaii Five-O; and countless more.
Those were the days when the American public proudly looked up to…
- Our elected leaders in Washington;
- Their appointed cabinet heads; and
- The career public servants who signed on to protect our country against rascals, scoundrels and scofflaws.
Today (April 23, 2019), U.S. Treasury Secretary Steven Mnuchin failed to meet a final congressional deadline for turning over President Donald Trump’s tax returns to lawmakers, setting the stage for a possible court battle between Congress and the Trump Administration.
Last week, we witnessed William Barr — the current Attorney General of the United States – in a nationally televised press conference deliver a fully fabricated introduction to a 400+plus page summary of a Special Counsel independent investigation (“The Mueller Investigation”) into allegations of Russian government efforts to interfere in the 2016 presidential election.
We have a sitting President who has frequently and publicly besmirched, criticized and/or called into question the abilities, intentions and loyalty of the entire U.S. intelligence community, including the FBI, CIA, Treasury Department and National Intelligence Agency,
Trump’s decision to revoke the security clearance of former CIA director John Brennan in August 2018 – apparently in retaliation to Brennan’s comments that Trump was incapable of managing the office of POTUS – is cast in complete juxtaposition to the forced security clearances for Jared and Ivanka.
Make America Great Again?
Yeah.
Let’s go back to the time when Eliot Ness and his team of Untouchables were revered by virtually all Americans, and when we were willing and able to unite against Mobsters and Criminals who threatened the very essence of our Constitutional Republic.
World Economic Forecast Pared Back
January 21, 2019
Monday, January 21, 2019: The International Monetary Fund pared back its world economic growth forecasts for 2019 and 2020 due to sustained economic weakness in Europe and some emerging markets. They also said looming trade tensions and the longer-term ramifications of the U.S. government shutdown could further destabilize a slowing global economy.
“After two years of solid expansion, the world economy is growing more slowly than expected and risks are rising,” IMF Managing Director Christine Lagarde said.
In addition to other forces, IMF economists pointed to: (a) challenges to German auto manufacturers due to new fuel emission standards; (b) uncertainty in Italy where a newly elected coalition government has clashed with EU leadership over a budget proposal which would dangerously increase the Italian sovereign deficit, combined with limp domestic demand; and (c) the uncertainty of fallout from a less-than-smooth exit from the European Union by the U.K. a.k.a. ‘a no-deal Brexit’.
Fears of a global slowdown began to jinx financial markets in early November 2018 as investors began to worry about increasingly weak signs in China.
The ripple effect of Sino-U.S. trade frictions over the past year apparently has exacerbated the slowing of China’s official growth rate to its weakest level since 1990, attributed to a combination of diminishing domestic demand and damaging U.S. tariffs.
Each of these issues is important, and they generally share a common theme: bad policy decisions made by incompetent and/or uninformed people, some of whom are voters; some private-sector executives; and some unconstrained elected officials.
On Day 30 of the 2018-19 U.S Shutdown: It is becoming increasingly evident that this partial federal government shutdown is taking an increasingly negative short-term toll on consumer and business confidence, and by extension, the overall US economy. The White House’s Council of Economic Advisors recently updated their estimate that the shutdown will reduce current economic growth by 0.13% for every week that it lasts. Doesn’t sound like much, you say?
We can look back to the “Ted Cruz Green Eggs & Ham” shutdown of 2013 – a mere 16 days – to see estimates of negative economic impact:
- $24 billion in lost domestic economic output;
- $2.1 billion in non-productive government costs (primarily the cost of paying furloughed workers for hours they didn’t actually work);
- $2.4 billion in lost travel spending (based on a combination of estimated reductions in business travel for federal contractors and federal employees, plus cancellations of discretionary travel by tourists);
- $7.2 Million in lost revenue at National Parks (based on an average collection of $450,000 per day);
- Most alarming? While we can estimate current economic effects, there really is no valid means to estimate long-term economic – and societal – effects of an extended shutdown.
The message? Political decisions made by unqualified and/or inexperienced individuals can and do have long term negative consequences. A comprehensive system of checks and balances is a critical ingredient in the long-term viability of any institution. In the public sector, a key ingredient seems to be the involved and active participation by a well-educated and well-informed body of citizens who are able and willing to vote.
Compromise on Federal Government Shutdown?
January 19, 2019
What is there about the simple concept of separating day-to-day operations from long-term planning that our elected federal officials seem unwilling or unable to comprehend?
Our current federal budgetary process was set into law by the 1974 Budget Control Act, based on a federal fiscal year which runs from October 1st to September 30th. Thus our current Federal Fiscal Year — known as FY 2019 — runs from October 1, 2018 until September 30, 2019.
In February 2018, President Trump – through the Office of Management and Budget – submitted a proposed budget to Congress for FY 2019. The operating budget for FY 2019 was discussed, deliberated and adopted, and it needs to be funded.
There just isn’t any room in the process for the President – or any other elected official — to demand modifications to the current FY budget prior to approving ongoing funding for current government operations.
While it is unfortunately true that Congress doesn’t always follow the schedule as proscribed in the 1974 Budget Control Act, the proper time for the President to present new spending initiatives to Congress is during the annual federal budget deliberations process which typically begins in January when the OMB presents a proposed FY budget to the President.
President Trump’s current demands are only legitimately appropriate as a component of a proposed FY 2020 federal budget proposal.
PLEASE: Let’s get the federal government back into its day-to-day operation by providing necessary current funding, and bring the debate over additional border funding where it belongs – in the discussions and deliberation toward a FY 2020 federal budget.
Where’s Mitch McConnell?
January 17, 2019
Where’s Mitch is a question many people are asking.
There are 800,000 federal workers and their families who are going without pay right now – including thousands of Kentuckians.
Here in Florida, we have about 5,000 Coast Guard members doing their jobs to protect our 1,350 miles of Gulf and Atlantic coastline, and they are not currently being paid.
The new Democratic House, on its first day in office, passed two bills funding and reopening the government.
McConnell has refused to allow a vote on any of those bills in the Senate. He’s even twice blocked a bill reopening the government from coming to the floor that he himself voted for back in December.
Despite the fact that Majority Leader McConnell has the ability to end this shutdown right now, Mitch is seemingly nowhere to be found.
I’m angry that this one man who has the power to stop this absurd drama has refused to do his job.
If you are nearly as angry as I am, perhaps you will consider donating $15 – or what you can afford – to the Ditch Mitch movement. Let’s shine a bright light on McConnell’s irresponsible behavior.
Supreme Court Nominee Kavanaugh
September 17, 2018
I have reviewed some of Judge Brett Kavanaugh’s judicial decisions; I’ve read some of his legal opinions; and I listened to some of the testimony he gave to the Senate Judiciary Committee in early September.
My limited research led me to conclude that Judge Kavanaugh supports highly subjective views on the 2nd Amendment; on women’s reproductive rights; and on the executive power of the presidency.
Judge Kavanaugh’s testimony to the Senate Judiciary Committee shed new light on his published positions, as well on his devotion to President Trump and Trump’s political agenda.
Judge Kavanaugh is quite personable and well-spoken, yet I believe his positions are not in keeping with the mores of American society. His responses to many of the difficult but seemingly fair questions from members of the Senate Judiciary Committee were evasive and ambiguous.
Kavanaugh was nominated by President Donald Trump in July 2018, drawn from a carefully vetted list of conservative jurists compiled by the Federalist Society, following Trump’s campaign promise that his judicial nominees would all be picked by the Federalist Society, an ultra-conservative legal organization.
Our nation is currently at a crossroads, possibly at or near a similar state which preceded the Civil War.
It is not slavery that divides us today. What divides us today is petty political divisiveness, exacerbated by special interest groups which operate behind the curtain, seeking to gain economic and political power over their opponents.
Our next Supreme Court Justice ought not to be an ultra-liberal or ultra-conservative individual. People who lean heavily left or right might attempt to institute abrupt changes to our legal order.
Abrupt change is both dangerous and disruptive, and has the potential to create political paralysis, or worse.
We recently began to hear talk of the ‘Deep State’ – an invisible but powerful alliance of career bureaucrats; officials who sit in powerful positions; and who serve through multiple presidential administrations.
Candidates for elected positions in the U.S. seem to often campaign on the abrupt and transformational changes they will institute on “Day One.”
Conspiracy theorists whisper innuendo accusing career public servants of creating obstacles to enact abrupt change, turning career public servants into natural enemies of those officials who are elected on their “Day One” promises.
Conspiracy theorists whisper innuendo accusing these career public servants of creating obstacles to enact abrupt change.
Career public servants often advocate for research and planning; for using historic data and experience to predict future outcomes; for upgrades to systems and infrastructure to improve data security and data integrity.
In the end, Presidents come and go, every 4 years, or so. Supreme Court justices serve a lifetime appointment.
Supreme Court justices should be politically neutral, above the fray of partisan politics. The future of our nation is at stake.
Change is both necessary and inevitable. Abrupt and unplanned change could result in a good outcome; history tells us that it is much more likely to result in catastrophic result.
“We Fed an Island”
September 15, 2018
While U.S. President Trump continues to blame the people of Puerto Rico and their elected local leadership for delays, inefficiencies and various failures in the response to the aftermath of Hurricane Maria (2017), Trump is lavish with praise for the wonderful response by his administration.
“I think that Puerto Rico was an incredible, unsung success,” Mr. Trump said. “I actually think it is one of the best jobs that’s ever been done with respect to what this is all about.”
Meanwhile, other sources do not agree with President Trump’s assessment.
One of the true unsung heroes involved in the Island’s recovery from Hurricane Maria is José Andrés, a chef and restaurateur who helped organize others from the food industry to form a veritable army comprised of both professionals and volunteers to feed residents, medical professionals and other disaster response workers.
A year after the initial response to Maria began, José Andrés has released a book reflecting on his experiences and lessons learned from the disaster response.
This article from the Washington Post describes his passion and introduces the book in a manner I wish I was able:
Congressional Inquisition of FBI agent Peter Strzok
July 12, 2018
Today, I watched and listened to a significant portion of the Congressional hearing involving FBI agent Peter Strzok.
I believe this Spanish Inquisition model was perfected by Rep. Trey Gowdy during his multi-year ‘Joseph McCarthy-inspired’ Benghazi investigation.
I also believe that the needs and rights of the American people are being completely ignored by members of Congress who follow this Model, seemingly fully deaf and blind to the needs and rights of the American people.
Trey Gowdy gained a national stage when he took charge of the Benghazi committee in the spring of 2014, prior to which there had already been seven (7) previous House and Senate investigations (plus an internal review by the State Department) into the conditions surrounding the terrible attack on the U.S. diplomatic outpost by members of the Islamic militant group Ansar al-Sharia.
The Benghazi incident took place in September 2012 when attacks on the U.S. consulate in Libya resulted in the deaths of U.S. Ambassador Christopher Stevens and 3 other Americans.
Gowdy’s Select Committee on Benghazi consumed significant amounts of American resources, yet it yielded nothing that was not already known.
Today’s performances by House Judiciary Chairman Bob Goodlatte (backed up by Rep. Trey Gowdy) would be worthy of Tony Award nominations had they taken place within a Broadway show.
Although they were not performing on Broadway, they did help to inspire a vicious and highly partisan attack on Mr. Strzok, both professionally and personally.
I am an American citizen, property owner and voter who has become completely disillusioned by the increasingly malignant infestation of our legislative bodies by individuals who seem to be motivated by evil intent, and who further seem to be unwilling and unable to adhere to the commonly acknowledged rules of decorum.
This charade — publicly attacking Peter Strzok, a man who has an exemplary 20+ year history of service protecting and supporting the U.S. Constitution — is completely out of context.
If Strzok is a traitor or is guilty of some heinous crime, that should be determined behind the scenes, perhaps by a Grand Jury.
There is no excuse for a committee of the Congress to attempt to publicly eviscerate and excoriate a sworn federal agent who has proven his willingness and ability to protect the best interests of American citizens while upholding the U.S. Constitution.
walrus51 