Month: December 2016

Anyone who watches “The Voice” on a regular basis knows that, all else being equal, America will vote for a male country singer who looks and sounds like the male country music stereotype.  However, if more than one performer is in the male country “lane,” the votes will be split, and someone else will win.  That is what is going to happen during the finals next week.

The analogy to the GOP primaries in 2012 and 2016 is obvious.  In 2012, Mitt Romney had the “moderate” (what I call the “Romney Coalition”) lane all to himself, and he prevailed.  In 2016, the Bush “shock and awe” fundraising campaign failed to drive out the other contenders in his lane, and Trump won. The electorate didn’t change that much between 2012 and 2016, but their choices did.

Just think:  if either Bush or Rubio had decided to stay out of the race, one of them probably would be the President-Elect today.  Both of them would make lousy Presidents, but at least I wouldn’t wake up in the middle of the night trying to figure out how to create a fallout shelter in a state where you can’t have a basement.

Given his personality and his background in development, it only stands to reason that Trump would support a huuuuuge infrastructure spending program. Since private sector investors obviously will insist on the creation of a substantial revenue stream, however, Trump’s plan to use public/private partnerships in lieu of public money means that either:  (a) there will be no funds to improve public facilities that are in dire condition, but which do not currently generate revenue; or (b) public facilities that are owned by entities other than the federal government–the vast majority of them–will have to be completely or partially privatized.

The latter approach sounds like something that would appeal to a Russian oligarch.  Given Trump’s enthusiasm for Putin and Russia in general, maybe that makes sense.

Most of the attention, of course, will be paid to their views on abortion.  Trump has promised to appoint pro-life justices.  While nothing he says should be taken seriously until he signs on the dotted line, there is no particularly good reason for him to lie about this, so for once, I will take him at his word.

The more interesting question is whether he will nominate judges with strong views supporting federal, and particularly executive, power.  Will he be able to identify people who will give him all the authority that he wants?  Does he even understand that will be an issue?  How will the Republicans in the Senate who have fought Obama so hard on “caesarism” justify changing their positions?  To be honest, I have no answers to these questions at this time, and neither does anyone else.

In the past, I have wondered how our new man on golf cart will react when his plans go awry and times get tough.  What happens when a strong man simply can’t get the job done?

Fortunately, on that subject, he can rely on the example of his buddy Putin and other failed dictators.  The recipe is as follows:

1.  Attack and muzzle the press to the maximum extent possible.  Of course, that is more difficult here than in other countries, but the threat of libel suits, regulatory harassment, and the use of Twitter and internet trolls should do the trick.

2.  Drape yourself in the flag.  Make it clear that your foes aren’t just critics of your administration–they hate America.

3.  Identify the enemies and blame them for your failures.  There are plenty of scapegoats available, both foreign and domestic.  Illegal immigrants, minorities, Mexico, China, whatever–it doesn’t matter, as long as it works.

The best way to combine all of these approaches, of course, is to go to war.  Don’t be surprised if he wags the dog at some point in his term.

I speak of the man they call Mitt.

With Trump he’s not really a fit.

I don’t really know why

He would work for the guy.

Trump will treat him like warmed-over sh__.

Trump’s neo-mercantilist ideas about foreign policy are out of the mainstream, even within the GOP, so it isn’t surprising that he is having trouble finding a suitable Secretary of State.  As far as we know, the leading contenders are:  (a) a nasty old guy with no diplomatic experience or talent, and with lots of conflicts of interest; (b) an otherwise decent guy who knowingly disclosed classified information to a third party, a more serious sin than the one for which Trump repeatedly lashed Hillary Clinton; and (c) another decent guy who called Trump a fraud and a phony during the campaign.

So far, so bad.  May I make a suggestion here:  Ivanka would make a great choice! She’s bright, smooth, and polished, and she has more experience translating and spinning her father’s inanities than anyone in the world.

Seriously–don’t you think she would do a better job than Rudy?

From the perspective of the new Secretary of Education, the GOP’s position on education contains two mutually exclusive threads:  first, to limit the authority of the federal government on lower education to the maximum extent possible; and second, to compel state and local governments to use vouchers and charter schools.  Given the obvious conflict here, and given that the federal government has a very limited role in education even under the best of circumstances, it is unlikely that the Trump Administration will go down in history as having accomplished much in this field,  either for good or for ill.

The more interesting question relates to the cost of higher education.  Clinton and Sanders wanted to throw billions of dollars at the problem to make public education free, at least for most people.  Obama has focused more on making the market accountable and transparent.  What will the proprietor of Trump University have to say about soaring student debt?  My guess is nothing.

There are basically two kinds of negotiators.  One type identifies a reasonable position up front and sticks to it, with minor modifications, throughout the discussions;  the other takes a maximum position up front, yells and screams a lot, repeatedly threatens to walk away from the negotiations, and only caves, as necessary, at the last minute.

Trump, who views negotiations as a way of proving his manhood, is clearly in the latter category.  It is in that light that you should view his overtures to Taiwan.  This approach can work, but it also results in crises that can easily spin out of control.  It also fails if the other party identifies it as a standard negotiating tactic and disregards it (think North Korea).

We’re about to enter into a dangerous era with the Chinese.  If you like drama, you won’t be disappointed.

You will recall that Trump campaigned as a real life Batman, claiming that “he alone” could solve the problem of rampant crime in the streets even though:  (a) crime has fallen dramatically from the levels of 20 years ago; (b) the federal government has very limited authority over issues of criminal justice; (c) he has no experience dealing with criminal justice matters; and (d) he has no ideas on the subject, or he would have shared them with us during the campaign.

What can you expect on this subject?  Lots of hot air.  He will repeatedly talk tough about criminals, throw gas on the fire whenever there is an unjustified police shooting, and give lots of publicity to the deportation of a few violent criminals who are also illegal immigrants.  That’s it.  The nonexistent problem will remain unsolved.

The new Trump adviser named Flynn.

I don’t know where I should begin.

He’ll be a crusader:

A true Muslim hater.

The battle I fear we won’t win.

When I was in Tuscany about a month ago, it appeared to me that the referendum was likely to go down, and now it has.  Another victory for the peasants with pitchforks!  This one is likely to have serious consequences, as well.

Oh, well.  At least my Christmas trip to Germany just got cheaper.

The market crash that I (and others) predicted after the election has not yet come to pass, mostly because investors are seeing with their hearts and not their heads. The recession will arrive sooner or later;  it is just a matter of time.  How severe the “Trump Slump” will be will depend on which of his campaign promises are jettisoned after he takes office.

I can imagine three different scenarios:

1.  Funhouse Reaganism:   The Reagan tax cut was approved in a recession largely caused by large interest rate increases engineered by the Fed in order to break the back of inflation.  While the tax cut caused the deficit to balloon, it in some respects mitigated the impact of the interest rate increase, and when the Fed relented, it was Morning in America.

There is no doubt that there will be a huge, and hugely regressive, Trump tax cut in 2017.  Unlike the Reagan legislation, it will be approved at a time when the Fed is already worried about the economy overheating.  In this scenario, I also assume large spending increases on defense and infrastructure, and minimal spending cuts.  As a result, interest rates will unquestionably go up substantially, the dollar will rise, emerging countries will struggle, and exports and real estate will slump.  Most of the tax cut will increase the size of the pre-existing cash mountains instead of being spent. Before long, the economy will heave into a recession, and Trump will no longer spout the current GOP line that interest rate increases are a good thing.

2.  Reverse Robin Hood:  In this scenario, the size of the regressive tax cut is largely offset by cuts to anti-poverty and entitlement programs, so the deficit does not balloon as much, and interest rates peak at a lower level.  The reduction in demand caused by the federal spending cuts still causes a recession, but its impacts are more chronic than dramatic.

3.  Trade Warrior:  Unlike the other two scenarios, in this one I assume that the regressive tax cut is accompanied by the promised trade wars with China and Mexico.  Prices rise; supply chains are disrupted; and businesses relying heavily on exports are crushed by retaliatory tariffs.  The Fed, faced with stagflation, jacks up interest rates to deal with the price increases.  This recession is by far the worst of the three.

So which will it be?  We’ll have to wait and see.

 

Though we enjoyed our trip to Florence,

Bad news seemed to fall in torrents.

The state shut my wife’s office down;

The President’s an evil clown.

 

Bowie, Prince, and then Glenn Frey:

Why must all our heroes die?

Tim’s retired, and Arnie’s gone.

The Demon Deacs will soldier on.

 

Our politics have gone insane.

At least there was no hurricane.

We don’t have time to bitch and moan;

We’re spending Christmas in Cologne.

 

We send our love to all our friends.

The bad times, like the good ones, end.

It’s just four years until he goes,

So keep the faith and hold your nose.

The American welfare state is financed primarily by exactions on employers and employees.  This has the following results:  first, it artificially drives up the cost of labor, and thus encourages offshoring and automation; and second, it imposes costs that should logically be borne by all of society on a relatively small group of people.

The biggest problem with changing the system is breaking the relationship between payments and benefits on an individual basis.  For that reason, some form of the payroll tax is bound to endure.  It could be cut and replaced in large part by a VAT or a carbon tax, however.

After the Brexit vote, the new government of the UK repudiated the neo-Thatcherism of George Osborne and moved to the center in order to win votes from whatever remains of the Labour Party.  As a result, it is a virtual certainty that the Conservatives will win a huge majority at the next general election.

 Faced with a reasonably analogous situation, the French Republicans, on the other hand, have embraced a hard right candidate.  Will French workers vote for him over Le Pen and the possibility of Frexit?  I have a lot of doubts.