I Don’t Love Joe Biden
October 20, 2022
But should we blame him for our current economic malaise?
When I was a young pup, I remember Uncle Cal frequently referring to certain elected officials as “a Horse’s Ass”. Back then, I didn’t know what he was trying to infer, but it sure sounded good!
Uncle Cal is long gone, but it seems the supply of Horse’s Ass elected officials has expanded significantly and I’m frustrated, angry and simply miserable as I watch and listen to ‘broadcast journalists’ and various political pundits who seem to have no grasp of economics as they explain current economic conditions to an audience of [potentially] economic illiterates. Thus, the origin of my current ‘rant’:
Stock Prices, Inflation, Recession & Economic Cycles
Economic cycles – also known as business cycles — are a reality, and they can be tracked over time.
They generally are predictable, although not in precise time frames. Economic cycles consist of four identifiable phases or stages: (a) Expansion; (b) Peak; (c) Contraction; and (d) Trough.
Every economic cycle includes a period of euphoria and exuberance marked by a sustained period of economic growth; followed by a period of uncertainty and lethargy linked to a period of economic decline.
The Great Recession officially ended in June 2009. By the time Donald Trump took office in January 2017, he inherited an economy in its 91st month of economic expansion.
That expansion continued into 2020, becoming the longest period of expansion on record, peaking at 128 months in February 2020.
Donald Trump has never failed to speak his mind. During the campaign leading to the 2020 presidential election, Trump proclaimed, “If (Joe Biden) is elected, the stock market will crash!”. [In 2018, Trump said, “When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win.” In late January 2020, Trump also said, “We have it (coronavirus) totally under control. It’s one person coming in from China. It’s going to be just fine.”]
Facts are facts:
- Five years ago (October 20, 2017) the S&P 500 closed at 2,575; it closed today (10/20/2022) at 3,666, an overall 5 year gain of 42%; an average of 7.3% per year.
- Ten years ago (October 2012), gasoline sold for $3.62 per gallon in Florida. AAA shows the current Florida price per gallon at $3.38.
- Case-Shiller reported a ten year 288% price increase for housing in the Tampa Bay area (where I currently live) from Mid-2012 to Mid-2022. This is partly due to (1) recovery from the Great Recession; (2) stimulus due to artificial below market interest rates (Fed Policy); and (3) supply/demand imbalance primarily due to local and regional housing policy decisions over time.
- The most recent CPI-U release from BLS reflects an annual inflation rate of 8.2 % through September 2022, the highest in four decades. Yet, if we look back to 2012, we can see the average annual rate over that decade computes to about 2.5% annually, with near zero periods during the Pandemic.
What’s really going on? There are a number of pieces to this puzzle, including:
- The lingering effects of a Pandemic;
- The Russian invasion of Ukraine;
- Aftershocks (direct and indirect) from draconian tariffs enacted beginning in 2018;
- Ongoing ripple effects from the 2017 Tax Cuts and Jobs Act (TCJA); and
- Various supply chain issues, both domestic and international.
The root cause of our current intersection of inflation and stock market volatility likely traces back to 2010, when the Fed launched “QE2” – quantitative easing – essentially increasing liquidity in the domestic economy to stimulate economic growth. One of the outcomes from QE is a decrease in bond prices due to falling interest rates, combined with a run-up in stock prices as investors search for yield.
When the Fed announced its QE2 plan in November 2010, 30-year mortgages were at 5%; and the S&P 500 index was 1,200. Over the course of the next few years, rates on 30-year mortgages dropped as low as 3.3%, while the S&P 500 index inched toward 2,010 (which it reached in September 2014).
Meanwhile, the CPI from 2010 to the end of 2020 remained relatively calm, reflecting the lagging effects of the economic recovery which began in mid-2009.
It is relatively easy to look into the rearview mirror now to observe that the Fed’s responses to (a) the Great Recession; and then (b) impacts of Covid on our economy helped to create an environment which fueled the inflation we are facing today.
In March 2020 — in addition to a promise to inject a Trillion dollars into the U.S. banking system — the Fed cut the federal funds rate to a range of 0% to 0.25%.
The rapid and aggressive response by the Fed likely saved our economy from implosion, but also helped inspire a dramatic run-up in both stock prices and home prices: The S & P 500 index rose from 3,000 in early March 2020 to reach 4,700 in November 2021 as investors chased phantom returns on investment. (Stock prices were further bolstered by massive stock buybacks inspired by the 2017 TCJA).
Home mortgage interest rates are a critical determinant of purchasing power for most borrowers. As far back as 1971, 30 year fixed-rate mortgages had never been offered below 7%; they moved up to 9% in 1974; climbed to 11% in 1979; and reached a peak of 16.6% in 1981.
Our economy is a long game. The few months when home mortgage interest rates were at or below 5% is an aberration enabled by Fed policy. Now that long-term mortgage rates have settled into the 7% to 9% range [which seems rationale and appropriate based on history], home prices will also stabilize.
It seems convenient for some to blame Joe Biden for (a) high gasoline prices; (b) rapidly rising consumer prices; (c) a stock market ‘meltdown’; and (d) even for supply chain dysfunctions.
A quick look at history confirms that there is a rather significant lag between the point when policy is affirmed and enacted; and the future point when we begin to see and experience results from those actions.
The Biden White House has pledged to fight against inflation, and has stubbornly refused to blame the Fed for our current economic symptoms.
Although there seem to be plenty of contributing factors, the real truth is: We relied almost entirely on monetary policy to steer the ship for more than a decade, and that approach brought us to this moment, not 24 months of Democratic control in the White House.
And, if the Fed would just slow down their relentless and uncompromising initiatives to raise interest rates to the point of choking off the economy as they attempt to rein in inflation, we might experience a smooth correction, and a gentle return to the economic expansion phase we all want to see.
Financial Literacy & Student Loans
September 6, 2022
Dear Senator Cotton:
One of the most recent national events which amplified the chasm between political party affiliations in the U.S. was the August 24, 2022 announcement by President Biden of a plan to wipe out significant amounts of student loan debt for tens of millions of low- and moderate-income Americans.
Sen. Tom Cotton (R, Ark) was on the rapid response team to counter the Biden announcement, saying:
“There is no such thing as student loan forgiveness—this is a bailout, paid for by the large majority of Americans who never went to college or who responsibly paid off their debts. President Biden’s plan ignores the true culprit: bloated, self-serving colleges. I’ll be introducing a bill to hold these colleges accountable for debt, lower tuition, support non-college career paths, and save the taxpayers billions.”
Cotton’s comments strike me as purely partisan, at best, and likely incendiary and divisive.
Meanwhile, some on the ultra-progressive side have dismissed this initiative as ‘too little, too late’’, while others on the far right have said, ‘It’s just not fair to those who sacrificed to pay off their student loans; and to those who are more deeply in debt”.
I must confess: I’m not convinced that broad-based blanket cancellation of student loan debt is an optimum solution to the real problem at hand. But, based on current conditions in the world of student loans, it’s probably a necessary step toward creating a new paradigm for educating the future workforce in America.
My personal preference is to look at a problem not just at the surface, but right down to root causes.
[i.e., ‘I don’t like this situation. How can it be fixed?’].
So: What is the real problem, and where do the root causes lie?
I am sympathetic with Sen. Cotton’s sentiment: ‘this plan ignores the true culprit: bloated, self-serving colleges’.
What Sen. Cotton fails to mention is that – beginning in the late 1950’s, and codified by the passage of the federal Vocational Education Act of 1963 — our elected officials created and sustained an environment which enabled an acrimonious socio-economic division between:
- those who go to college to earn a 4-year degree, intending to pursue a ‘white collar’ career;
- those who pursue the training, experience and credentials needed to become a ‘blue-collar’ professional (electrician; plumber; carpenter; auto mechanic; machinist; etc.); and today
- those who opt into a ‘new-collar’ career in a middle-skill job which requires some tech skills, but not a 4-year degree. Some examples include: I-T support; coding; cyber security; and developing web applications.
Passage of The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 marked an expanded view of the value of ‘occupational education’ and the various pathways along career ladders in a wide variety of occupations which would likely lead participants to family wage jobs and careers. Missing from the 1996 legislation was a roadmap to help parents understand, encourage and support their children to pursue their dreams and passions within the framework of economic and financial reality.
Many parents continued to encourage their children to attend a 4-year college to pursue a college diploma in any major, including Art History; Religious Studies; Philosophy; Music Studies; Sociology; Archaeology; English Literature; Film; and myriad other fields, rather than pursue a potentially lucrative vocational education.
College degrees are important and admirable, yet they can result in credentials not valuable or important to employers. From a potential income perspective, some majors are terrible for those who need to borrow – and subsequently repay — loans for tuition and ancillary college expenses.
Some simple interventions which might help transform our currently broken student loan system:
- Mandatory Financial and Economic Education: A critical and logical step to enhance Student Loan Debt Relief is to mandate successful completion of a comprehensive financial and economic education program prior to any student loan borrowings;
- Develop an “income rating system” informed by U.S. Department of Labor projections on salaries and future job openings which would limit the amount of eligible student debt based on major. (See addendum).
- Realistic oversight of private colleges and private lenders: The Financial Crisis of 2007 opened our eyes to private and unregulated ‘shadow bankers’ which originated predatory mortgage loans. There is current evidence that our student loan crisis has been enabled by similar private, lightly regulated lenders which prey on uninformed borrowers, frequently those who are first generation college students and/or those who are enrolled in for-profit colleges.
Dear Senator Cotton: We have identified a few ideas which we think deserve deep and thorough investigation, hopefully leading to appropriate regulatory oversight: a truly honest and valuable use of your time and position. Instead of offering partisan, incendiary and divisive commentary which serves no useful purpose at all, you are invited to use any and all of these ideas to embark on a positive and affirmative journey to make durable and favorable changes to our entire post-secondary system.
An existential threat to America
September 5, 2022
September 2022 Fallout From Philadelphia
President Joe Biden addressed our nation on September 1 to express his deep concerns that American equality and democracy are under assault. He said, “There is no place for political violence in America. Period. None ever.”
“Too much of what is happening in our country today is not normal… There’s no question the Republican Party today is dominated, driven and intimidated by Donald Trump and the MAGA Republicans, and that is a threat to democracy… Donald Trump and the MAGA Republicans represent an extremism that threatens the very foundations of our republic”.
Many of us have been concerned about this very issue for several years now.
We have witnessed firsthand some alarming dangerous attitudes and behaviors by far-right “MAGA” radical groups beginning around 2016.
One of the shibboleths of the current MAGA movement occurred on June 1, 2020
when then-President Trump orchestrated a near-riot in Washington, D.C. After walking from the White House, across Lafayette Square, to St. John’s Church, he staged a photo-op with a Bible in front of the Church, inspiring those who prefer fear, hate and anarchy to reject honest debate.
These most recent alarming attitudes and dangerous behaviors have much in common with:
- The second “Red Scare” which began in 1947, and reached its peak between 1950-54 under the leadership of U.S. Sen. Joe McCarthy;
- A period of extreme antisemitism which emerged in the 1930’s, inspired by Father Charles Coughlin (and others) who spread various conspiracy theories, creating a robust underground movement which spread fear that Jews were working for the destruction or replacement of white Americans and Christianity in the U.S., together with (false) allegations which accused “the Jews” of dominating Franklin Roosevelt’s administration, of causing the Great Depression, and of dragging the United States into World War II.
- The ‘race riots’ of the late 1960’s, which included Birmingham (1963); Harlem (1964); Watts (1965); Chicago (1966); Newark (1967); MLK, Jr. Riots, 125 cities (1968); and the list goes on and on….
- Post 9/11/01, we witnessed an irrational groundswell of anti-Muslim sentiment. The al-Qaida terrorists who attacked the Twin Towers and the Pentagon represent a very rare and extremist sect of Islam. Despite that reality, many Muslims, as well as other Arab Americans, became the targets of anger, racism and hate crimes, continuing to this day.
Biden’s recent remarks ring true. He loudly and clearly reminded us that not all Republicans are MAGA Republicans.
Look back to the early 1930’s when Father Charles Coughlin’s radio show was extraordinarily popular, with a weekly audience estimated to be around 30 Million. His theme centered on an isolationist, anti-Semitic and conspiratorial viewpoint that resonated with many listeners at that time.
Yet, we know that not all Catholics were Isolationist or anti-Semitic. Sound familiar?
The Big Question remains: Who or what is creating false narratives today? Who is spreading hate speech, nurturing and encouraging intolerance in the U.S., empowering the narcissistic blamers who feel marginalized to go off on a compound rage comprised and triggered by: anti-Semitism, Islamophobia, skin color, nationality, gender, sexual orientation, religion, and an unidentifiable myriad of other perceived irritations?
Think of the last time you attended an orchestra performance. The orchestra Conductor led and guided the various sections to complement each other resulting in a rich and complex sound which was pleasing to the audience.
Now, imagine if that orchestra performance was infiltrated by some musicians who refused to allow the conductor to lead.
Within the wind section, the brass instruments would play out of sync with the woodwinds.
Although the string musicians are mostly in harmony, the harpist occasionally takes his lead from the woodwinds, creating periods of discord.
The percussion instruments are off in a zone of their own, just doing what they want, totally out of touch with the conductor or any of the other musical sections, angry that they aren’t in charge.
- Although relatively small in number, the renegade percussion section has sufficient noise to create complete and destructive cacophony, driving off the audience as well as the other musicians.
A recent report from AdWeek (TVNewser) shows Fox News – in particular, Tucker Carlson at 8 PM – leading the networks in viewership in both total viewers, and in the coveted 25-54 Demographic.
Translation: Tucker is a money machine. Advertisers are begging to support his daily hour of glory.
The Wednesday, August 31, 2022 Tucker Carlson show on Fox News began with a review of negative allegations against Joe Biden, including: a sly attack on son Hunter; recall of Joe showering with his daughter Ashley when she was a child; and how his wife currently knows he has Dementia.
Then, a rather long diatribe on the eve of Biden’s 80th birthday and how this is a sign of incompetence; that Joe is fixated on trivial and meaningless issues such as climate change, diversity and trans rights; that he is devoid of any ‘vision’; purely a partisan seeking advantage in the upcoming elections, leading into further emphasis on the negative aspects of Biden’s age.
Carlson continued with more passion, focusing in on recent Biden public commentary related to those individuals in America who have crossed the line into realm of ‘semi-Fascism’. Mr. Carlson managed to inject a critique blasting Biden saying he is, “…the same politician who had the FBI raid the home of the man who is running against him in the next election”.
Carlson segued into a commentary on the White House Press Office. Says Carlson, “… would have been better (for the Press Office to say) that Biden had a stroke, apologize and then move on.” Carlson further denigrated the intelligence, experience and abilities of the White House communications team, stating, “Biden’s history-making publicist, the single dumbest person to ever hold that job, explained that her boss had spoken intentionally and with precision” then reinforcing the notion that Biden had made a blanket statement that Republicans are Fascists.
Those who may be interested in watching and listening to the entire broadcast are directed here: https://www.fox.com/watch/46d7f725b815fd5a7c10e1a1128558a3/
Meanwhile, enough Walrus commentary on the Tucker Carlson show of August 31.
Tucker is just one of many catalysts working on a base of angry white Christian men, keeping them stirred up by constantly reminding them that external forces have conspired to disenfranchise them.
Joined by his colleagues at Fox News, NewsMax, OAN, various podcasts and conspiracy driven social media groups, they continue to use Donald Trump as their demagogue by echoing and amplifying the ranting and raving of the Monarch of MAGA Americans toward an inevitable second Civil War.
Wind Farms in the North Atlantic
August 26, 2022
Electric Power Generation v. Commercial Fishing
On August 26, 2022, Fox News (Jesse Watters Primetime) produced and broadcast over public airwaves an attack piece on offshore wind farms. It alleges that Democrats have conspired against the private commercial fishing industry to decimate historic fishing grounds; deprive them and nearby port communities of their legacy commercial activities; and potentially destroy entire regional economies.
Background:
Wind is one of the cleanest energy sources available, and some scientists insist the U.S. is sitting next to a gold mine. A study published in 2009, “Global potential for wind-generated electricity” (PNAS: Proceedings of the National Academy of Sciences of the United States of America) firmly established wind power as the most effective and efficient means to generate sufficient electrical power to meet both present and future needs.[1]
A subsequent study conducted in 2017[2] found that wind speeds over the oceans could allow offshore turbines to generate far more energy than land-based wind farms – with the North Atlantic, in particular, theoretically able to provide enough energy for all of human civilization.
In tapping into wind as an energy source, the U.S. has lagged behind the U.K. and Europe for decades. Two of the largest offshore wind farms in the world are the London Array and the Netherlands’ Gemini wind farm.
The U.S. is beginning to catch up. The first offshore wind farm in the U.S. began generating electricity in late 2016. It consists of five, 6-MW (megawatt) Haliade-X turbines supplied by GE Renewable Energy linked through a submarine transmission cable into the New England grid. Located about 3 miles off the coast of Block Island, RI, this wind farm will generate enough electricity to power 5,000 homes on the island and to meet around 90 percent of its total electricity demand. [3]
The Current Domestic Situation: The Bureau of Ocean Energy Management was created in 2011, and it is poised to review at least 16 offshore wind plans for potential approval in the next three years, up from two total approvals since the agency was created.
The Biden administration apparently has ambitious plans to open up vast swaths of coastline in order to generate 30 gigawatts of offshore wind energy by 2030. Energy companies are stepping up: Six leases off the New Jersey and New York coasts sold for $4.3 Billion in February 2022, the most lucrative wind lease sale in U.S. history.
Among other cases, Oregon officials are asking BOEM to delay a planned lease sale next year over concerns about its potential impacts on commercial fishing.
The commercial fishing industry has real and legitimate concerns which need to be investigated and addressed, honestly and thoroughly.
Interim Conclusion: This is a very complex issue which needs input from cool heads; full transparency; and no further publicly broadcast emotional diatribes. Like most issues today, we need to allow real experts to develop and distribute a solid strategy which achieves optimum current and future outcomes for our society as a whole.
[1] This 2009 study was supported by National Science Foundation Grant ATM-0635548; the authors represent an international multidisciplinary team of scholars.
[2] “Geophysical potential for wind energy over the open oceans”; Carnegie Institution for Science, Stanford, CA 94305.
[3] Block Island Wind Farm has a peak capacity of 30 MW (megawatts) and is expected to produce around 125,000 MWh (megawatt-hours) of electricity annually.
Senator Sinema and Carried Interest
August 17, 2022
Political Malfeasance in Action
I grew up in the 1960’s in Buffalo, NY where it seemed that candidates for election to public office couldn’t get nominated until they could prove their ability to attract illegal political contributions. Over my professional career, I spent significant time in other northeast states, counties and cities where political corruption was often the norm.
Most of the corrupt elected officials I observed were guilty of getting their driveway paved; their house painted; maybe a new roof. Not good, not appropriate, and certainly, not acceptable.
The recent behavior of Sen. Kyrsten Sinema (D-AZ) relative to the Carried Interest federal tax loophole puts the actions and behaviors of these historic elected officials in NY and CT into the category of ‘fixing parking tickets’.
The despicable and nefarious posturing by Sen. Sinema has blessed Carried Interest, sometimes known as ‘the cockroach of tax breaks’, allowing it to survive another potential assault by Congress.
The proposal to increase the holding period requirement to qualify certain income paid to investment bankers for the lower Carried Interest tax rate was removed from the landmark ‘Inflation Reduction Act’ of 2022 (H.R. 5376) recently passed by both the Senate and the House and signed into law by President Joe Biden on August 16, 2022.
The “compromise” to remove Carried Interest was demanded by Sen. Kyrsten Sinema (D-AZ) which she justified on a complex and convoluted set of criteria, and which potentially might be related to the $1 Million in campaign contributions she received over the past year from private equity professionals, hedge fund managers and venture capitalists whose taxes would have increased exponentially under the original plan.
The concept of Carried Interest dates back to the 16th century, when ocean-going ship captains would often take a 20 percent “interest” of whatever profits were realized from the cargos they carried. This approach is logical and defensible on the risks to life, property and personal capital undertaken by ship captains.
In 21st century America, the meaning of Carried Interest has evolved to describe a tax loophole — an income tax avoidance scheme — which allows some private equity and hedge fund investment bankers to classify large amounts of their compensation related to performing services (i.e. managing and/or investing other people’s money) as investment gains, which substantially lowers the amount they are required to pay in taxes.
Today’s Carried Interestis essentially a payment (bonus or commission) for investment services that is taken out of the profits of the money managed for investors. Private equity firms use pooled money from large institutional investors (pension funds, college endowments, ultra-high net worth individuals, etc.) to acquire controlling interests in struggling, underperforming or undervalued companies. When the investment are made, these acquired entities agree to pay the private equity firms Carried Interestout of the investment profits on top of management and other fees.
Under our current tax law, when the carried interest income is paid out of the private equity firm to individual partners, directors, etc. it is taxed at the preferential (‘capital gains’) rates granted to investment income, even though the income represents compensation for services. In all other contexts, compensation income – salaries, bonus, commissions, etc. – is taxed everywhere else as ordinary income.
Investment professionals often are required to contribute capital if they are eligible to receive carry, although it varies by firm and by position in the hierarchy (from 23% of associates/senior associates to 71% of managing partners). Essentially, the Carried Interest tax loophole acts as a magic wand to turn ordinary compensation income into preferentially-taxed capital gains income for a few thousand specially entitled individuals each year.
Private Equity (“PE”) is a $4.5 Trillion industry which tends to follow a predictable model: Use very high levels of debt to take control of underperforming (or undervalued) companies and then extract as much value as possible over a short- to intermediate time frame.
One of my favorite movies, “Other People’s Money” (1991: Warner Brothers [directed by Norman Jewison]; starring Danny DeVito and Gregory Peck) almost perfectly illustrates the potentially powerful impact of leveraged debt strategically deployed against a weak management team. In the film, the end result is: (a) closure and liquidation of New England Wire & Cable Company, a boring multi-generational family manufacturing business; (b) the loss of hundreds of decent jobs in a small American city; and (c) millions of dollars of ‘pirated booty’ transferred to anonymous private equity investors, with a mighty fine Carried Interest reward paid to Danny DeVito (the investment banker).
Zero value added to the overall U.S. economy.
Devastating value lost to a small American city, its residents and the regional economy.
Sure, the investment banker (Danny DeVito) took home a fine bonus. He probably was able to buy a nice airplane and maybe a vacation home in the Hamptons.
Meanwhile, the wire and cable products formerly supplied by the now defunct domestic company now are being sourced from a foreign firm. The American city where the former Wire and Cable business was located lost tax revenue which had formerly been used to support local schools and public works. And, local families abruptly lost their incomes, and their homes potentially went into foreclosure.
Most alarming: U.S. taxpayers subsidized the whole mess because of this crazy, foolish and irrational tax break known as Carried Interest.
Some will say that the movie, “Other People’s Money” is a 1991 dinosaur which has no relevance in 2022.
Yet, the devastation continues. In our current environment, retailers are particularly vulnerable to leveraged buyouts, and they provide the most visible examples of companies which have been acquired, pillaged and wrecked by private equity firms.
In January 2020, the New York grocery chain Fairway filed for its second bankruptcy in less than four years and announced plans to sell off its stores, due to several efforts by PE firms to extract value from the franchise. The Fairway failure joins a long list of casualties that includes: Sears; Toys R Us; Payless ShoeSource; and Sports Authority, among many others.
< ==== >
In theory, PE firms snap up underperforming companies using ‘patient capital’; they bring in professional managers to revamp current operations; and then sell the companies through a Public Offering to generate a healthy return.
In practice, the PE industry revolves around deals known as leveraged buyouts, where the PE investors put up a small amount of their own money to purchase a company and borrow the rest. The acquired business becomes responsible for repaying the debt, which puts an immediate strain on cash flows.
In their quest to generate cash and improve operational efficiency, PE firms often: lay off workers, and cut pay and benefits to remaining workers; they sell off owned real estate and lease back; they sell trademarks and other ‘off balance sheet assets’.
PE firms sometimes extract cash using “dividend recapitalizations” where they use the acquired company to borrow additional money which is then used to pay investors. Beyond that, they often charge the businesses they acquire millions in ‘management fees’.
< ==== >
Shifting the treatment of so-called Carried Interest income from capital gains to ordinary compensation income could raise between $1.4 Billion and $18 Billion annually from income tax on a very small number of investment bankers.
Most informed Americans refer to the lower tax rate on Carried Interest as a loophole that allows already wealthy private equity, hedge fund and other investment managers to pay a lower tax rate than the majority of their employees and other American workers. Once they are fully informed, a significant majority of voters across the political spectrum support legislation that would close this loophole.
“It’s a real rich benefit for the wealthiest of Americans,” said Steve Rosenthal, a senior fellow at the Urban-Brookings Tax Policy Center. “Why should a private-equity manager be able to structure his or her compensation with low-taxed gains? That seems wrong.”
Sen. Sinema was elected to the U.S. Senate by voters in Arizona to represent their interests. It’s hard to see how continuing this awful Carried Interest loophole is in the best interest of anyone in Arizona, other than to Sen Sinema herself because it seems to provide a rich and reliable source of political contributions to help ensure her continued reelection.
And that also seems wrong.
Remember the 2020 Recession?
August 11, 2022
I don’t either.
Just because you and I don’t remember the 2020 Recession, that doesn’t mean it didn’t happen.
The official arbiter of recessions — the Bureau of Economic Research — says there was one.
When Donald Trump took office in January 2017, he inherited an economy in its 91st month of economic expansion following the end of the Great Recession in June 2009. That expansion continued into 2020, becoming the longest on record, peaking at 128 months in February 2020.
The National Bureau of Economic Research officially recognized the Recession of 2020 as the shortest on record at just 2 months, with the trough of that recession occurring in April 2020.
One milestone which helps to mark the 2020 recession is the price of oil. During the month of April 2020, the price of a barrel of West Texas Intermediate was absolutely erratic, actually closing Negative at (Minus $37/bbl) on April 20, 2020. [Was gasoline free that day? I don’t recall.]
Back to January 20, 2017, Trump’s Presidential Inauguration Day.
Paul Ryan, a Republican from Wisconsin, was serving as Speaker of the House. Mitch McConnell, a Republican from Kentucky, was the Senate Majority leader.
Ryan was first elected to the House in 1998 at age 28. He developed a reputation as a no-nonsense deficit-hawk fully focused on reducing entitlements and reducing taxes. Ryan had been serving as Speaker of the House since 2015.
The 2017 Tax Cuts and Jobs Act (TCJA) was Paul Ryan’s swan song, eagerly supported by Trump and most congressional Republicans.
Unfortunately, it was exactly the wrong time to enact this complex piece of legislation, primarily because it relied on untested assumptions at a point in time when the U.S. was riding the tail end of the longest economic expansion in history. It created massive increases in our national debt; it favored investment increases in oil and related industries (which to some appeared to be a means to curtail pending increases in oil prices); and exuberant expectations that repatriation of corporate profits parked offshore would be used to create domestic jobs turned into a massive stock buyback across the market.
In early February 2018, Paul Ryan began to reflect on the true consequences of the TCJA. He tweeted, “Julia Ketchum, a secretary at a public high school in Lancaster, Pennsylvania, said she was pleasantly surprised her pay went up $1.50 a week. She didn’t think her pay would go up at all, let alone this soon. That adds up to $78 a year, which she said will more than cover her Costco membership for the year.”
In April 2018, Ryan announced his intention to retire from Congress on January 3, 2019 — the end of his current term — thus ending a 20-year career representing his constituents in Wisconsin — so that he could spend more time with his family.
Left to its own devices, the 2017 TCJA may have created an unchecked economic calamity.
Then came the Covid-19 Pandemic which turned into an unforeseen international societal and economic tragedy – and clearly was the trigger which caused the 2020 recession. Yet, the impacts of Covid didn’t begin to surface until 1st quarter 2020, so there is a 24 month period following the January 2018 introduction of the TCJA which economists are now examining to help create real context around current (mid-2022) economic uncertainties.
Even a neophyte like me can add the 2022 Russian invasion of Ukraine to: (a) the long-term economic damage created by the TCJA; (b) the Covid wild card; and (c) the economic devastation of Trump’s tariffs, particularly on our agriculture sector. When we spread the numbers, we can begin to see an almost perfect recipe created under Trump’s watch sufficient to decimate any economy.
Despite the open hostility and recalcitrance of elected Republicans currently serving in Congress, I must give Joe Biden and the Democrats a 5-Star rating for refusing to capitulate, and for keeping the ball moving forward.
The Insidious Impact of Cults on Society
August 9, 2022
The American Psychological Association (APA) associates Cult Leaders with those who exhibit narcissistic psychopathy in their actions and behaviors.
Cult leaders usually are psychopaths with a desire for power who often take ideas from politics, religion and psychology to fulfill their purpose. Through mind control, they are able to filter their thoughts and behaviors into “fanatical faith and belief” among followers.
According to a number of APA-approved research studies, “a destructive cult is an authoritarian regime, which uses deception when recruiting as well as mind-control techniques to make a person dependent and obedient.”
Some have said that the Church of Scientology resembles a cult, perhaps generally benign rather than overtly destructive.
L. Ron Hubbard founded the Church of Scientology in 1954, and he struggled for many years to gain recognition for it as a legitimate religion. He was often at odds with tax authorities and former members who accused the church of fraud and harassment. Hubbard died in 1986, yet he created an infrastructure which is more powerful and resolute today than any time prior.
Al Qaeda was founded in 1988 by Osama bin Laden using a decentralized organizational structure which has survived his death. Most agree that Al Qaeda generally fulfills the criteria for a destructive cult, and a priority within the war on terrorism should focus on application of what we know about destructive mind-control cults.
Experts advise that the best strategy to stop cults from expanding and taking control of large segments of world population is to develop a deep understanding of the psychological aspects of how people are recruited and indoctrinated so that recruitment can be impeded and ultimately stopped.
History tells us that Adolf Hitler and the Nazis were a destructive political cult, led by a man with an extreme case of malignant narcissism, defined by a ferocious sense of ‘self’.
Malignant narcissists – sometimes described as Narcissistic Psychopaths — exhibit no empathy. They believe they are above the law; they frequently make threats or speak of committing violence. They’re often paranoid; they demand complete loyalty; and they rarely trust anybody.
Adolf Hitler, Vladimir Putin, Jim Jones and Sun Myung Moon are often cited as malignant narcissists, some more a threat to the continuation of the human race than others.
The most recent reactions to the FBI raid on Mar-a-Lago from Fox News and among Donald Trump’s followers confirm that Donald J. Trump must be a cult leader.
“These are dark times for our Nation, as my beautiful home, Mar-a-Lago in Palm Beach, Florida, was raided, and occupied by a large group of FBI agents,” Trump complained in a statement sent out via email by Trump’s Save America PAC. Never bashful in his quest to amass the largest political action fund in world history, his statement concluded with a request for donations: “Please rush in a donation IMMEDIATELY to publicly stand with me against this NEVERENDING WITCH HUNT.”
Almost immediately, Trump’s followers – ignoring the possibilities that Trump was flaunting U.S. laws and regulations – began to circle the wagons, claiming Trump is being unfairly persecuted by the Biden administration and other hard-left liberals. Alina Habba, one of Trump’s lawyers, spent time on August 9 with Jesse Watters on Fox News claiming that the entire FBI operation essentially was ‘illegal, immoral and perfidious’.
We only need to look back to the early morning of September 11, 2001, when 19 terrorists from the religious extremist cult Al Qaeda hijacked four commercial aircraft and crashed two of them into the North and South Towers of the World Trade Center complex in NYC. Then, a third plane crashed into the Pentagon in Arlington, VA. Passengers on the fourth hijacked plane, Flight 93, fought back, and the plane was crashed into an empty field in western Pennsylvania about 20 minutes by air from Washington, D.C.
Nearly 3,000 people died. It was the worst attack on American soil since the Japanese attacked Pearl Harbor in 1941.
The terrorists from 9/11/2001 failed to destroy the foundation of U.S. society by force. Undeterred, it seems that these and other external forces have focused on indoctrination as a means to destroy our nation.
The growth of the Trump Cult – estimated to be as large as 35% of the U.S. population today – is proof that constant and focused messaging can be a powerful tool to alienate people who feel disenfranchised, and a majority of those people look like me.
I’m now retired; an over-65 white male who fought it out for 4+ decades to survive and prosper in an ever-changing workplace environment. It would have been easy for me to give up and blame the changes and challenges on women; people of color; immigrants; or ‘government over-reach’.
In fact, most GOP effort over the past several years has consisted mostly of new state and local election laws that have restricted voting in ways that often place a disproportionate burden on Black and Latino voters.
The Trump Terrorists have been programmed to zero in on racial, ethnic, religious and gender differences on the notion that entitled white men could be deprived from their rightful legacy.
The very origin of the Trump campaign is “Let’s Make America Great Again” referencing back to the 1956-57 era when virtually every white male high school graduate could transition into a family wage job – with GM or Ford; in government; mining; agriculture; transportation; construction; or a myriad of other industries. Those were the days when a typical CEO made 20 times the salary of the average worker.
In 2021, S&P 500 CEOs averaged $18.3 Million in compensation — 324 times the median worker’s pay.
This inequity is the foundation of the real American dilemma. It has nothing to do with ‘deep state’ or a ‘swamp’ in D.C. It is really grounded in the Dark Money culture which pervades our elections. Trump has plenty to say, but he has never addressed the real issues which haunt American workers.
Meanwhile, the Cult of Agent Orange is alarming, and it threatens to annihilate our entire nation.
We can do better, folks, and we must do better if we intend to survive as a nation.
An Intolerable Affront on My First Amendment Rights
July 28, 2022
I’m really juiced by the recent Dobbs v. Jackson decision by SCOTUS.
The First Amendment protects each U.S. resident – even me — from the whims, passions, and/or tyranny of a few.
It states, “Congress shall make no law respecting an establishment of religion or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.”
The recent decision in Dobbs v. Jackson[i], rendered by the U.S. Supreme Court on June 24, 2022, is an egregious example of horrible judicial judgment, likely resulting from an apparent violation of our First Amendment.
The census of 2020 reveals an America much different from 1787 when the U.S. Constitution was ratified, and when our enumerated U.S. population was >3 Million people residing in 13 states (colonies).
Today, we have fifty states hosting a population of >329 Million people.
Many Americans today seem to believe that our nation was established under a Christian doctrine—that we are a “Christian nation” and that we should operate accordingly.
Yet, it seems quite clear today that the founding fathers were prescient in their observation(s) about religion.
The collective wisdom of our founding fathers likely derives from their disparate – yet harmonious – spiritual beliefs. Some of our founding fathers — Washington, Jefferson, Franklin, Madison, Monroe and others — practiced a faith called Deism, a philosophical belief that human reason is a reliable means of solving social and political problems. Deists generally believe in a supreme being who created the universe to operate by natural laws. This belief in reason over dogma helped guide the founders toward a system of government that respected faiths like Christianity, while purposely isolating Church and State from encroaching on each other.
The evidence is abundant: Our founders were adamant that a person’s faith should not be intruded upon by government, and that religious doctrine should not be written into governance. They had no intent to found our nation according to Christian doctrines, yet it seems quite clear that this exclusion was not intended to devalue the importance of the Christian religion itself.
Christianity – in many iterations — continues to thrive in America, as does Judaism, Islam, Hindu, Buddhism, and dozens of other religions. And, according to our 2020 Census, about 25% of Americans affiliate with no religion at all.
I’ve read and heard reports from some media sources that no honest religion could permit or encourage the termination of a pregnancy, leading me to believe that the continuing evolution of religious practice and belief in America may have been missed or ignored by some media sources.
A few media sources seem to assume that members of all religions endorse the views of a small minority of ultra-conservative Christians who are fixated on a theory that life begins at conception, rendering abortion akin to murder. But this isn’t the consensus of all Christians, and very few Jewish or Muslim congregants share this belief. A majority of leaders within all three religions affirm the ethics of abortion in controlled and objective situations.
In fact, Jewish law requires abortion in some situations, most consistently in cases where a pregnancy endangers the life of the person carrying the embryo.
Dr. Thomas E. Dobbs III, the man whose name became synonymous with the Supreme Court decision to let states ban abortions, had virtually nothing to do with the landmark case.
Ironically, the case began in 2018 when the Jackson Women’s Health Organization filed a lawsuit against the State of Mississippi challenging a state law banning abortions after 15 weeks of pregnancy[ii]. The original lawsuit named the Mississippi state health officer as a defendant, and at the time the lawsuit was filed, that health officer was Dr. Mary Currier.
When Dr. Currier retired in late 2018 after 34 years of service, she was replaced by Dr. Dobbs, who then became the Mississippi state health officer, and the individual in charge of regulating the only abortion clinic in Mississippi, Jackson Women’s Health Organization.
Dobbs himself has distanced himself from the case. He is an infectious diseases physician, working at the intersection of public health and patient care, with specific expertise in HIV, tuberculosis and health equity.
Alliance Defending Freedom {ADF} [EIN 54-1660459] is a not-for-profit 501(c)(3) organization based in Scottsdale, AZ which was instrumental in defending the Dobbs case, leading to the overturn of Roe V. Wade. ADF primarily is a well-funded legal organization with annual revenues of $65 Million, and net assets of $42 Million, employing 319 individuals, 69 of whom earn in excess of $100,000.
- According to a 2020 analysis from the Southern Poverty Law Center, the ADF was “Founded by some 30 leaders of the Christian Right (as) a legal advocacy and training group that has supported the recriminalization of sexual acts between consenting LGBTQ adults in the U.S. and criminalization abroad; has defended state-sanctioned sterilization of trans people abroad; has contended that LGBTQ people are more likely to engage in pedophilia; and claims that a “homosexual agenda” will destroy Christianity and society.”
- Apparently, the ADF has now expanded its focus to help support several other ultra-conservative Christian positions.
Whenever people bring their personal religious beliefs or values into any public debate, they risk imposing illegal, unwanted or restrictive religious practices and beliefs on others who have been granted the Constitutional right to pursue their own — perhaps different — beliefs.
The great majority of published public opinions opposed to open unrestricted access to comprehensive reproductive health care over the past 4 decades — including both contraception and abortion — center on personal ethical, moral or religious issues, with the loudest voices opposing open access emanating from a small minority of predominantly college educated white evangelical Christians.
Facts confirm that restrictions imposed on open access to comprehensive reproductive health care services have disproportionate adverse economic impact — and direct deprivation of human rights — on:
- Young women (<25 years of age);
- Low-income women; and
- Women of color.
These are socially and economically disadvantaged women, frequently members of a protected class.
The longitudinal negative social and economic impacts on women who are denied access to a voluntary abortion — and onto the children who are born as a result — are devastating. The spillover of these social and economic impacts into our larger society is chilling.
I’ve read the U.S. Constitution several times. Each time, I have seen clear evidence that our Founders intended to follow the core foundations of our Declaration of Independence: Ensuring equal rights and equal treatment to all individuals regardless of their address or other socio-economic variables.
Somehow, the current Religious Right – enabled by this tax exempt entity known as Alliance Defending Freedom together with other undisclosed dark money sources — has bamboozled the U.S. Supreme Court, allowing a small but very vocal minority to impose their religious morality on the rights of all women residents in the U.S., depriving them of unfettered access to comprehensive reproductive health care, regardless of current residency; education; economic status; age; disability; religion; national origin; pregnancy; race/color; sex, sexual orientation and/or gender identity.
I believe – as a nation and as a society — we can and should do better.
The Judge Alito opinion in this case is flawed, and the consenting opinions of Justices Thomas, Gorsuch, Kavanaugh and Barrett must be recognized as religiously and politically tainted.
[ii] The fight against a woman’s right to choose continues to be highly political. The Gestational Age Act is a Mississippi law that purports to ‘protect unborn children, the health of pregnant mothers, and the integrity of the medical profession by protecting life after 15 weeks in gestational age’. The Act apparently was inspired by false prophets and funded by dark money contributions from Christian Nationalist sources. The 15-week marker has no footing in scientific research, yet it tends to evoke a highly emotional response among skeptics. The highly regarded American College of Obstetricians and Gynecologists (ACOG) continues to maintain its position that “Safe and legal abortion is a necessary component of woman’s healthcare; is one of the safest medical procedures, 14 times safer to the patient than undergoing childbirth.”
[i] The full name of the Supreme Court case overturning Roe v. Wade is “Thomas E. Dobbs, State Health Officer of the Mississippi Department of Health, et al., Petitioners v. Jackson Women’s Health Organization, et al.“
First Amendment Rights
June 26, 2022
Hey, SCOTUS!
You just imposed the religious will of a small group of Fundamentalist Christians onto our entire nation.
Did you not know the First Amendment to the U.S. Constitution says that everyone in the United States has the right to practice his or her own religion, or no religion at all?
Nightmare at One First StreetWashington, D.C.
June 25, 2022
The Supreme Court of the United States (“SCOTUS”) was established in 1789 by Article Three of the U.S. Constitution, and defined in the Judiciary Act of 1789.
There are no explicit requirements in the U.S. Constitution for a person to be nominated to become a Supreme Court justice. No age, education, job experience, or citizenship rules exist. There is no requirement in the Constitution for a Supreme Court justice to have a law degree.
Supreme Court justices are nominated by the sitting President, and confirmed by the sitting Senate for a life appointment to the court.
None of this has been a concern to the viability of our nation until now.
We’ve recently witnessed some absolutely surreal SCOTUS decisions.
On 6/23, they gave permission for anyone and everyone to ‘pack heat’: Open season on concealed carry.
Then on 6/24, a majority of our Supreme Court judges eliminated what most of us believed was a Constitutional right to obtain an abortion, casting aside 49 years of precedent that began with Roe v. Wade.
The vote to overturn Roe v. Wade was 5-4, on a decision written by Justice Samuel Alito.
Justices Clarence Thomas, Neil Gorsuch, Brett Kavanaugh, and Amy Coney Barrett joined Alito’s opinion. Chief Justice John Roberts did not join the opinion. He agreed with the majority that the Mississippi abortion restriction at issue in the case should be upheld, but in a separate opinion, he argued that the court should not have overturned the Roe v. Wade decision.
This decision employed fully twisted logic claiming the Roe decision was wrong ‘because the U.S. Constitution makes no specific mention of abortion rights.’
That’s not surprising. Back at the end of the 18th century — when we had just 13 states and the only people who had voting rights were White Men who were land owners — the Constitution also made no mention of television, airline travel or record-high gasoline prices.
And then, on the following day, June 24, 2022, “in a concurring opinion that raised concerns the justices might roll back other rights, conservative Justice Clarence Thomas urged the court to reconsider past rulings protecting the right to contraception, legalizing gay marriage nationwide, and invalidating state laws banning gay sex.”
Yet, Justice Thomas made no mention of a revisit to the controversial Loving v. Virginia decision?
Clarence Thomas has proved beyond a shadow of a doubt that he is a Genuine Sanctimonious Prick.
Only Franz Kafka could do this story justice.
walrus51 