Trump-en-omics
May 13, 2019
Trump has formally signaled his mastery of global economics and some of the ways he believes U.S. trade policies will help guide the world economy toward optimum performance.
Some have said our president seems to be really out of control, that he must have skipped all of the courses on economics and finance when he was in school (he did go to school, right?).
I believe some further research is in order.
Although Trump continues his infatuation with Twitter where he openly shares classified information with the world, he also has his thumbs on the Tariff Buttons.
Most alarming? He apparently has the nuclear codes.
Meanwhile, since mid-April, the actions of our president have cost me a significant amount of my accumulated and hard earned savings. And, it could be worse! If I was fully invested in traditional equities, it would have been even more painful!
But, enough about me.
The most recent abrupt and unjustified increase of U.S. tariffs on $200 Billion of Chinese goods from 10 percent to 25 percent triggered a response from China which predictably exacerbates continued economic damage to the U.S. agricultural sector, and compounds spillover impacts to related industries.
The Trump Trade War has been extremely harsh on farmers. Over time, our farmers learned to deal with unpredictable weather; wind storms; disease outbreaks; hordes of locusts; crop loss during storage; and wildly fluctuating prices of both inputs and crops.
It seems clear they never anticipated having a White House which would use them as sacrificial pawns to engage in quixotic battles against imaginary foes.
Longer term and behind the curtain, tariff increases on Chinese imports will drive up domestic prices on a broad array of consumer products, finished goods, and intermediate goods – even some raw materials used in basic manufacturing in the U.S.
The good news: the effects of these most recent tariff increases probably won’t show up for 90 days, or so.
The bad news: the costs of the these tariff increases will be fully borne by U.S. consumers, and the effects of tariff increases will result in price increases which will temper domestic economic growth while concurrently sending signals of an increase in core inflation, likely resulting in interest rate increases by the Fed.
And, it just gets worse from there…..
The Sport of Tax Avoidance
May 11, 2019
Let’s be clear: the terms ‘tax evasion’ and ‘tax avoidance’ are often used interchangeably. However, only those activities which occur in a tax avoidance scheme are considered lawful.
Plenty of reliable media sources have carefully examined and reported on the awful legacy of Donald Trump’s multiple bankruptcies on a myriad of small businesses: architects, carpet suppliers, lighting and electrical distributors, even custom cabinet-makers.
A recent expose published by The New York Times focused on Trump’s taxes and revealed a previously unexposed nuance: many of his unpaid bills were essentially ‘double counted’ through the magic of accrual accounting. Thus, Trump and his Organization underpaid many vendors, while concurrently creating a paper loss for Trump which translated into a ‘tax loss carryforward’ good to shield future profits from future taxation.
If people had been able to look at this bad behavior as a base line, and project it forward, they might have been able to see how much damage The Donald has already done to families and communities in the U.S.
Following his inauguration in January 2017, Trump’s operating principles haven’t changed at all.
A direct result of the introduction of Trump operating principles into the Executive Office has become an oblique assault on moderate and small family-owned businesses across the U.S. — in the manufacturing sector; in retail; agriculture; mining; ranching; hospitality; media; transportation; entertainment; food; construction; business services; technology; and more.
The foundation of success epitomized in the American Dream is entrepreneurial — hard work, focus and sacrifice oriented to a long term view.
The minority of small business operators who operate like Trump — those who operate at the margins and take advantage of honest business people who operate on the platform of honesty and honor — get put out of business quickly.
Tax avoidance – using any and every loophole to avoid paying taxes – is legal, even when some of the activities involved may be considered by some to be morally repugnant.
Somehow, Trump has been able to use his unique combination of charisma and showmanship to fool a rather sizeable segment of American adults into believing his shtick.
How very sad…
An example of world leadership, released by Donald J. Trump on Sunday, May 5 at 9:08 AM ET:
“For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods. These payments are partially responsible for our great economic results. The 10% will go up to 25% on Friday. 325 Billions Dollars….” “…of additional goods sent to us by China remain untaxed, but will be shortly, at a rate of 25%. The Tariffs paid to the USA have had little impact on product cost, mostly borne by China. The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!”
Impulsive? Impetuous? Misinformed? – OR — Calculated? Intentional? Willful?
However you slice it, when the President of the United States threatens — on a Sunday morning in May — to further disrupt world markets through his personal vision of how the world should behave, the predictable short term outcome is a stock market rout.
{One of the reasons it is predictable is that we have witnessed several similar episodes over the 2+ years Trump has occupied the Oval Office.}
Both Market Manipulators and Inside Traders know that when the Stock Market is confronted with unanticipated news, the Stock Market generally reacts with an abrupt and unexpected increase (or decrease) in value. And, Long-sellers (or short-sellers) get enriched (or damaged) as a result of their positions.
If they went long (or short) because of access to confidential information (known as “Insider Trading”) they have committed a white-collar crime that is often prosecuted as a felony, punishable by severe fines and prison terms of up to 20 years.
The Questions:
- Has Trump, his family, any of his cabinet members, advisors, their families and colleagues benefited by taking a long (or short) position in advance of one of Donald Trump’s unexpected and abrupt announcements?
- Is Trump a willful Market Manipulator?
- Are there any foreign (off-shore) entities which have left a trail indicating a prior knowledge of Trump Tweets?
Congressional Oversight Mandate
April 25, 2019
I live in Clearwater, FL and my elected Congressional representative is Charlie Crist. Here is a copy of my letter to Rep. Crist regarding the obfuscation by Steven Mnunchin:
April 25, 2019
No law requires presidential candidates to release their tax returns, but historical precedent does.
In November 1963, then-presidential candidate George Romney started this trend when he released 12 years of tax returns, a full year prior to the 1964 election.
When George’s son Mitt ran for president in 2012, he released his own tax returns.
According to PolitiFact, only 7 presidential or vice president candidates since 1976 have not released any tax returns. (Jerry Brown, Pat Buchanan, Mike Huckabee, Steve Forbes, Rudy Giuliani, Richard Lugar, Ralph Nader, none of whom were elected to the position they sought.)
When Donald J. Trump voluntarily announced (June 2015) his candidacy to run for the office of President of the United States, he voluntarily left a sequestered world of privacy to become a public figure.
Americans have come to rely on full transparency from Presidential candidates, including voluntary public release of federal tax returns.
Since June 2015, Trump has been asked many times to release his tax returns, and he has often replied in specious and vague generalities, frequently citing “under audit” as a primary barrier.
Fast forward to April 2019: Ways and Means Committee Chairman Richard Neal (D-MA) sent a written request to Internal Revenue Service (IRS) Commissioner Charles Rettig seeking six years of President Donald J. Trump’s personal and business tax returns.
Chairman Neal issued a concurrent statement explaining his request: “Congress, as a co-equal branch of government, has a duty to conduct oversight of departments and officials. The Ways and Means Committee in particular has a responsibility to conduct oversight of our voluntary Federal tax system and determine how Americans – including those elected to our highest office – are complying with those laws. It is also our duty to evaluate the operation of the Internal Revenue Service in its administration and enforcement of the tax laws.
“The IRS has a policy of auditing the tax returns of all sitting presidents and vice-presidents, yet little is known about the effectiveness of this program. On behalf of the American people, the Ways and Means Committee must determine if that policy is being followed, and, if so, whether these audits are conducted fully and appropriately. In order to fairly make that determination, we must obtain President Trump’s tax returns and review whether the IRS is carrying out its responsibilities. The Committee has a duty to examine whether Congressional action may be needed to require such audits, and to oversee that they are conducted properly.”
U.S. Treasury Secretary Steven Mnuchin failed to ensure that IRS Commissioner Rettig met a final congressional deadline of April 23 for turning over President Donald Trump’s tax returns to lawmakers, the second time the Trump administration missed a House deadline for the tax returns since Neal requested them on April 3.
After the deadline lapsed, Mnuchin released a letter to Neal in which he pledged to make “a final decision” on whether to provide Trump’s tax records by May 6 by which date Mnuchin expected to receive a legal opinion from the Department of Justice on the propriety of Chairman Neal’s request.
Mnuchin further stated he was concerned that the efforts by Democrats to release the president’s tax returns were ‘politically motivated’.
The powers delegated to the Chairman of Ways and Means under IRS code are clear.
Steven Mnuchin and Charles Rettig are violating the laws of our country and ought to be charged as such; arrested; and imprisoned until such time they comply with this legitimate Congressional request.
If Congress fails to act quickly and assertively to take control of this situation, then Congress is complicit in the continued efforts of the Trump administration to usurp the very essence of our Constitutional Republic.
Thank you for making time to consider my opinions on how our federal government could better serve the best interests of the people.
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.
More on: Tax Cuts & Jobs Act
April 16, 2019
Paul Ryan retired from Congress in January 2019 after 20 years of service culminating in his 3+ years of service as Speaker of the House.
Ryan was the chief cheerleader for the Tax Cuts and Jobs Act, and he left D.C. touting it as the greatest accomplishment of his political career.
Ryan repeatedly exclaimed how this new legislation (TCJA) would unleash unprecedented U.S. economic prosperity, by providing:
- Tax relief for middle-income families;
- Simplification of the tax code for individuals;
- Economic growth; and
- Repatriation of $3+ Trillion of profits U.S. companies have parked overseas would generate more investment and jobs in the U.S.
16 months after passage of the TCJA, it should be crystal clear that:
- Almost none of the tax cut benefits have reached the low- and middle income Americans who were promised tax relief;
- The TCJA legislation is some 1,097 pages itself, and it states very clearly that it is an Amendment to (the existing) Internal Revenue Code of 1986 (not a simplification);
- Economic Growth? The jury is still out on this one, but there seems to be no evidence of growth above or beyond the existing growth trend line which began in mid-2009;
- American companies have returned some (+/- $500 Billion) of their profits held overseas as a result of the tax holiday which was part of TCJA. Much of that money was used for stock buy-backs and debt reduction.
In fact, 16 months following the passage of the TCJA, U.S. companies are still waiting for final guidance from the Treasury Department on many of the final rules relative to repatriation.
And, despite continued U.S. economic growth and record corporate profits, a record 60 Fortune 500 companies avoided paying any federal income tax in 2018.
Federal tax revenues have declined during a period of economic expansion and our government spending has increased, thus the verifiable result from Paul Ryan’s signature accomplishment – the TCJA — is an increase in our federal deficit, an extra-special gift to our children and grandchildren.
The Treasury Department announced in March 2019 that the deficit for the first four months of the 2019 budget year (which began Oct. 1, 2018) totaled $310.3 Billion, up from a deficit of $175.7 Billion in the same period the year prior.
The Congressional Budget Office is projecting that the annual federal deficit between revenues and expenses will hit $897 Billion in fiscal year 2019, up 15.1 percent from the $779 Billion deficit recorded in FY 2018.
The end result: Our total federal debt will reach $22 Trillion this year – about 105% of GDP.
Why is that important? A comprehensive study by the World Bank examined economic data from 100 developing and developed economies spanning a time period from 1980 to 2008, concluding that a public debt/GDP above 77% begins to create a drag on economic growth.
The World Bank analysis concluded that for each additional percentage point of debt above the 77% threshold costs 0.017 percentage points of annual real growth.
If the World Bank study is correct, we are currently missing about 0.5% of our economic growth potential due to misguided public policy decisions, in addition to the future burden of repaying federal debt which was incurred unnecessarily.
Paul Ryan achieved his personal goal of shepherding record tax reform through Congress resulting in the passage of TCJA.
Although his personal goal was achieved at the expense of American society, Paul Ryan clearly is a winner. So, please join me in sending a note of thanks and congratulations to Paul Ryan. He left us a legacy.
Paul Ryan & Tax Cuts
April 16, 2019
Dear Paul Ryan,
In 1998 – at the age of 28 – you were first elected to the House of Representatives to represent the 1st District of Wisconsin. You were re-elected a number of times, and you served for 20 years in Congress.
After John Boehner announced his intention to resign from the House and the Speakership in 2015, you were selected by your colleagues to become Speaker of the House.
You were involved in some very positive legislative accomplishments during your 20 year tenure as a Congressman representing the 1st District of Wisconsin, and during your tenure as Speaker of the House.
Unfortunately, your legacy will forever be connected to the Tax Cuts and Jobs Act (TCJA) which was passed into law at the end of 2017.
Although the TCJA provided the Trump Administration with an accomplishment relative to their campaign platform, it is a highly flawed piece of legislation which was created on a foundation of fictitious and inaccurate assumptions.
Just 16 months following the passage of TCJA, we can clearly see the adverse impacts.
Business and corporate tax cuts have resulted in: stock buy-backs; excessive executive compensation and bonuses; acquisitions and consolidations resulting in plant closings and layoffs. All of these have been enabled by tax cuts which have resulted in 60 major corporations paying zero federal income taxes in 2018.
Whereas in times of economic expansion, the great majority of economists advise public sector entities to reduce deficits and aim for balanced budgets, the TCJA does just the opposite.
Some of the loss of tax revenue from business and corporate entities has been replaced by increased federal tax liability on individuals (like me), the majority of the lost tax revenue has been made up through deficit spending.
The annual federal budget deficit is expected to reach $900 Billion in fiscal 2019 and to equalize in the range of $1 Trillion annually for the next decade, up from $779 Billion in 2018.
Mr. Ryan: over the course of your service in Congress, you achieved national recognition as a conservative policy wonk and as a relentless critical observer of our federal budget. You seemed to be a relentless critic of federal deficits, winning acclaim from centrists for your detailed charts showing the dangers that fiscal shortfalls posed to America’s future.
You slipped out of Washington in January 2018 knowing that you led the American people down a dangerous and dead-end road.
In your defense, we can acknowledge that you reluctantly took on the role of Speaker knowing that it was an impossible responsibility to fulfill. Despite this, we must hold you fully accountable for failing to disclose to your constituents – and the entire U.S. population – that the TCJA was a sham – a complete flim-flam designed to create a false reality.
Paul Ryan: Let us hope that your family, your wife, your children – and your neighbors – are willing and able to forgive you for selling out the interests of the people of Wisconsin — as well as the people of the United States – for whatever benefits you personally gained from your treachery toward the end of your tenure in Congress when you became the champion of the fictitious Tax Cuts and Jobs Act.
Mr. Ryan: Good luck to you, and God bless.
President Trump & Puerto Rico
March 27, 2019
Dear President Trump:
It has been reported that you don’t want to see any additional federal aid directed to Puerto Rico.
The government debt crisis in Puerto Rico started in 1973 when the government began to operate on a deficit budget (i.e. spend more than what it collected). To cover the annual budget shortfall, the government issued bonds.
The impact of that decision had long range impacts, beginning with reduced capital spending resulting in deferred maintenance of public sector infrastructure (roads, bridges, public utilities, hospitals, electric power grid, ports, airports, etc.).
The practice of deficit spending in Puerto Rico continued for 4 decades!
In 2014 three major credit agencies downgraded several bonds issued by Puerto Rican government entities to “junk status” after the government was unable to demonstrate that it would be able to pay its debt from sustainable current cash flows. That action precluded Puerto Rico from access to the public debt markets, and forced them into the shadowy world of hedge funds and high-yield debt issuers.
I think you are punishing Gov. Ricardo Rosselló — and the people of Puerto Rico — for a situation which they inherited.
Meanwhile, there is a long-term lesson to be learned from the current Puerto Rico situation.
House Oversight Committee: 2/27/19
February 27, 2019
I was looking forward to hearing the testimony of Michael Cohen before the House Oversight Committee, particularly interested to learn more about some of the ‘behind the scenes’ actions and activities which took place during Cohen’s ten year stint as a lawyer for Donald Trump, and as an executive of The Trump Organization.
It is clear that Michael Cohen is guilty of multiple frauds and felonies.
Cohen pleaded guilty to eight charges in August 2018, including several counts of tax fraud and campaign finance violations. He also pleaded guilty in November 2018 to a charge of lying to Congress from Special Counsel Mueller’s office.
Said Cohen, “I take full responsibility for each act that I pled guilty to: The personal ones to me and those involving the President of the United States of America.”
In December 2018, Cohen was sentenced to a term in federal prison for the eight criminal counts he pleaded guilty to in August. The judge gave him an additional two months for the special counsel charge.
Despite pending imprisonment for his acknowledged bad behavior, Cohen agreed to provide public testimony to the House Oversight Committee on February 27, 2019.
It was my expectation that – during this public hearing – committee members would politely hear testimony from Mr. Cohen, followed by a question and answer session which might provide us with a broader understanding of the issues.
Upon completion of the public hearing, I anticipated that members of the committee would meet sometime in the near future to study, discuss and debate the findings of the hearing.
At a future date, I expected that I would learn from traditional media sources about next steps: Further investigation? Criminal referral(s)? Case closed?
I appreciate and covet freedom of speech, and I am cognizant of special protections afforded to Members of Congress to ensure they are not censured for statements made in their official capacity.
That said, today I witnessed two members of the House Oversight Committee go off course early in the proceedings, and they continued to cloud and obfuscate the intended purpose of the hearing almost to the very end.
The behavior and demeanor of Rep. Jim Jordan (R, OH) and Rep. Mark Meadows (R, NC) on 2/27/19 (as displayed on national television) was unprofessional; inappropriate; and absolutely unacceptable coming from elected Members of Congress.
I am a citizen and registered voter in the United States.
As such, I am entitled to all of the protections afforded by the Constitution of the United States, including the expectation that elected Members of the House will (1) behave at all times in a manner that shall reflect creditably on the House; (2) adhere to the spirit and the letter of the Rules of the House and to the rules of duly constituted committees thereof; and (3) not receive or accept compensation, favors or other benefits from any source which would occur by virtue of influence improperly exerted from their elected position in Congress.
It is my belief that both Rep. Jordan and Rep. Meadows repeatedly violated their basic duties of comportment and professionalism during their activities today as members of the House Oversight Committee.
I do hope the House Ethics Committee will hold each of these individuals fully accountable for their unprofessional, inappropriate, and unacceptable public behavior, and I encourage others to demand accountability from Congress.
Border Security
February 15, 2019
I’ve been looking into the border situation. My goal is to reach an understanding of what’s really going on, because the political rhetoric has my head spinning. Here is what I found:
Depending on which source(s) you are comfortable with, you may agree that the 1,900+-mile border between the United States and Mexico is the most heavily crossed – both legally and illegally – international boundary in the world.
Today – mid-February 2019 — barriers which block people and vehicles along 650 miles of the U.S.-Mexico border are in place and operational. These barriers include stretches of steel and barbed wire, fortified with infrared cameras, imposing watchtowers, and blinding floodlights, and it is patrolled by thousands of guards. These 650 miles represent a four-fold increase over 2005, when there were 120 miles.
About 1,300 miles of the U.S.-Mexico border lacks fencing because the Rio Grande forms a natural border along most of those miles. Remaining sections are in rugged, inhospitable terrain, where building a barrier would not only be impractical, but fail the most rudimentary cost-benefit analysis.
The legislation President Donald Trump needs to build his promised wall along the U.S. southern border with Mexico was passed in 2006 and remains on the books.
The Secure Fence Act was introduced in Sept. 2006 by Rep Peter King (R-NY) and was quickly passed by Congress on a bi-partisan basis. The House passed the Fence Act 283 to 138 on September 14, 2006; the Senate passed the Fence Act 80 to 19 on September 29, 2006; and the Act was signed into law by Pres. George W. Bush on October 26, 2006.
The goals of The Secure Fence Act of 2006 envisioned helping to secure America’s border with Mexico to decrease illegal entry, drug trafficking, and security threats by building about 700 miles of physical barriers along the Mexico-United States border. Additionally, the law authorized more vehicle barriers, checkpoints, and lighting as well as authorizing the Department of Homeland Security to increase the use of advanced technology such as cameras, satellites, and unmanned aerial vehicles to reinforce infrastructure at the border.
The initial concept imagined in the King-sponsored law anticipated a continuous barrier of double-layered fencing with a sufficient gap that a vehicle could be driven between the layers.
Once it became clear that the geographic and topographic diversity along the border could not accommodate a simple double-layered fence, Senator Kay Bailey Hutchison (R, TX) worked with the Department of Homeland Security to propose an amendment to give DHS discretion to decide what type of fence was appropriate in different areas.
The law was subsequently amended to read,
“Nothing in this paragraph shall require the Secretary of Homeland Security to install fencing, physical barriers, roads, lighting, cameras, and sensors in a particular location along an international border of the United States, if the Secretary determines that the use or placement of such resources is not the most appropriate means to achieve and maintain operational control over the international border at such location.”
By mid-2011, the Department of Homeland Security reported that fencing for 649 miles of border had been completed. As described in the 2007 Hutchinson amendment, much of the total fence reported by DHS consists of vehicle barriers and single-layer pedestrian fence, deemed most appropriate at those locations by DHS.
Purists looked back to the original King-sponsored bill and decried the type of fencing DHS was counting as “completed”. They said that vehicle barriers and single-layer pedestrian fences can’t meet the amended letter of the law.
Yet, according to Customs and Border Patrol reports at that time, the border barriers they included in their report include: ‘Post on Rail’ steel set in concrete; Steel Picket-style fence set in concrete; Vehicle Bollards similar to those found around federal buildings; ‘Normandy-style’ steel beam vehicle barriers; and concrete ‘Jersey Walls’ reinforced with steel mesh.
I don’t know much about barriers, but these sound pretty substantial and imposing to me.
Many people will take exception to something President Obama said in 2011 when addressing the issue of border security. I include this here because it is emblematic of the political discourse we seem to have devolved toward in the past decade or two:
“We have gone above and beyond what was requested by the Republicans who said they supported broader reform as long as we got serious about enforcement. All the stuff they asked for, we’ve done. But even though we’ve answered these concerns, I’ve got to say I suspect there are still going to be some who are trying to move the goal posts on us one more time.”
“They’ll want a higher fence,” Obama said. “Maybe they’ll need a moat. Maybe they want alligators in the moat. They’ll never be satisfied. And I understand that. That’s politics.”
Political rhetoric is to be expected, and most of us prefer it to be witty, sharp and to the point.
There really is no place in a civilized society for the sort of caustic and unforgiving political hate speech and outright lies we all too frequently seem to encounter in 2019.
walrus51 