Month: August 2019

When asked if he would continue Trump’s use of tariffs, Bernie Sanders said that he would, but only in a “rational” way. He didn’t make any effort to explain what he meant by that. So what could we expect from President Sanders?

Here is my best guess:

1. Trade agreements, such as the TPP, are significant for geopolitical as well as economic reasons. Sanders is oblivious to that fact. Do not anticipate any new agreements during his administration.
2. Historically, from a purely economic perspective, the point of trade agreements has been to improve access for American companies and to reduce costs for consumers. Sanders ignores their benefits and thinks they just make money for giant corporations, who are the enemy, regardless of where they are located. That’s another reason for him to oppose them.
3. To the extent that there is a discernible rationale for Trump’s tariffs, it is the traditional one of increasing access and profits for American companies. Sanders, on the other hand, would probably use tariffs as a lever to drive up wages for both American and foreign workers. He would also, in all likelihood, attempt to use them as a device to improve human rights in authoritarian countries.
4. Sanders’ tariffs would increase costs to American consumers and reduce corporate profits without having any visible effect on wages or the behavior of foreign governments. They would be as miserable a failure as Trump’s, and would further damage America’s image overseas.

Try, if you can, to divorce the filibuster from the current ideological context. Is it really necessary for the workings of our system? I would say no.

We already have plenty of checks and balances in place without it. The House and the Senate may well be held by different parties. Leaving the effects of gerrymandering aside, the House will generally be controlled by urban interests, while the Senate gives disproportionate power to rural populations. Both houses create a check on the executive, and on each other. The presidency checks them both. The judiciary, as long as it remains truly independent and has the support of the American people, is another check. The states have their own powers. Finally, there are a variety of independent bodies, such as the Fed, which play important roles in our system and which cannot be controlled by Congress or the president, Trump’s obnoxious tweets notwithstanding.

I heard a joke once to the effect that it would be impossible to seize power in America because you would have to find it first. The filibuster only makes things worse; it leads to legislative paralysis, and then to dangerous executive overreach to fill the vacuum. And so, there is a strong conceptual case to get rid of it, particularly in a world in which information moves at the speed of light.

The problem, of course, is that it is actually practically impossible to divorce the issue from the present context. It may well be safe and sensible to abolish the filibuster after the largest cohort of reactionaries has left the scene, and millennials are in complete control. Now? No.

Mitch McConnell wrote an op-ed in the NYT about a week ago in which he argued that: (a) while the filibuster isn’t mentioned in the Constitution, it is an implicit part of it; (b) the Democrats have been the aggressors on Senate procedure, not him; and (c) they had best beware, because what goes around comes around. Is he right?

On (a) and (b), not really. There are plenty of checks and balances already built into the Constitution, and the Founders never discussed the filibuster, so the notion that it is an integral part of the system is unfounded. Mitch also doesn’t give himself nearly enough credit for being an aggressor on Senate procedure, as Merrick Garland would be happy to tell you. On (c), however, he is unquestionably correct. If the filibuster is eliminated, and the GOP ever wins control of the presidency and both houses of Congress, God help us all.

In the final analysis, that is the only good reason to keep the filibuster. Its critics have never presented a convincing rebuttal; they appear to believe that the combination of demographic change and constant fighting will guarantee a progressive majority in the country, which is a doubtful proposition at best, at least for the next ten years or so.

There has always been plenty of protectionism in the EU’s DNA, but it has been kept in check in recent years. There were several reasons for that, including the EU’s enthusiasm for a rules-based system, benefits to European consumers, the importance of exports to the German economy, and the influence of free traders in the US and the UK.

But that was then, and this is now. The US has joined China as an openly mercantilist nation. The UK is leaving. The German economy is slipping into recession, largely as a result of Trump’s trade war. The WTO is starting to break down under the constant assaults from Trump. Most importantly, embracing protectionism would be a great way for the establishment to deal with right-wing populism. It will hurt European consumers, and some producers, but under these fairly dire circumstances, that is a price the establishment will find acceptable.

And so, it will happen, and when Trump screams about it, they can just say, “Europe First!”

It turns out that writing off half the electorate isn’t a winning tactic, after all.

Call it Franken’s revenge.

President Donald Trump announced today that he had sold California to the People’s Republic of China for the price of $10 trillion. The purchase price also included a $1 trillion commission for him as the selling broker.

Trump hailed the unprecedented sale, stating that a small portion of the proceeds would be used to buy Greenland. He complimented Xi, the buyer, indicating that the Chinese negotiating team was “Tough. Very tough. But what did you expect, after they gunned down all of those people in Hong Kong! You can’t get things done in this world by being soft and weak!”

When asked how the residents of California felt about the deal, Trump replied “Who cares? They’re all leftists, anyway. None of them voted for me. They might as well be part of China. They’ll feel more comfortable with Xi as their leader–and good riddance!” The economic prospects for Greenland, in his eyes, were much brighter, particularly in light of the helpful effects of climate change.

Governor Newsom has already filed suit to block the sale, but the Supreme Court is expected to defer to Trump in this matter, as with all issues related in any conceivable way to national security. In the meantime, Los Angeles, San Francisco, and Disneyland are already being occupied by Chinese tourists. The PLA is expected any day.

The most recent issue of The Economist asks “What are companies for?” and predictably finds that they are, or at least should be, profit-making machines. Outsourcing social policy to corporate leaders, rather than the government, leads to confusion and a lack of transparency and accountability. Let businesses make money, and leave the difficult process of balancing of shareholder, worker, and community interests to the public sector.

Readers of this blog will recognize these arguments, because I agree with them. Elizabeth Warren clearly does not; she believes in stakeholder, not shareholder, capitalism. I suspect her response would be something to the effect that corporations benefit from a rigged political system that runs largely on their money, that the inevitable result is regressive tax cuts, imprudent deregulation, and the loss of worker rights, and that changing the rules for corporations is the only way to get them under control. To which I would say, the Obama years show that the system is not as rigged as you say, and that killing the goose by driving up its costs and forcing it to create inferior products is not likely to lead to golden eggs.

On the Democrat candidate Warren.

It’s Biden’s ox she’ll soon be gorin’.

She’ll take him to school.

Make him look like a fool.

It’s depressing, yes, but it’s not borin’.

____________

But is this really inevitable? Is Biden really that vulnerable to the arguments of the female version of Professor Kingsfield?

Not necessarily, in spite of the obvious differences in intellect. Biden is weakest on identity issues; Warren has no advantage there. He has simple answers available to him on realo vs. fundi questions: we can’t afford it without massive tax increases on the middle class; the public doesn’t want that much change so fast; you don’t have a viable way to make it happen, given the composition of the Senate and the judicial system; do we really want to further divide the nation by arguing 24/7/365 over plans that are out of the ideological mainstream and can’t be approved without dramatic changes to our political and legal systems?

Warren will respond by calling these “Republican talking points.” In reality, they are perfectly legitimate fears shared by a large percentage of the electorate, and for the Democrats to simply dismiss them as obstacles that can be overcome by constant fighting with Republicans would be a big mistake.

Assume, as I do, that Boris wins the election and rams through no-deal. What challenges will he face in making Britain great again?

Four, in particular:

1. LEGAL COMPLICATIONS WITH THE EU IN THE TRANSITION: It’s possible that all of the talk about shortages and such will turn out to be another Y2K situation, and that everyone will muddle through just fine. We don’t know. There will be issues on a million fronts, however, and some of them are likely to be serious.
2. THE AMAZING SHRINKING POUND: The pound is going to fall after no-deal. A conventional Tory politician would cut spending and accept a degree of temporary austerity in order to protect the pound and the savings of his constituents. I don’t think Boris will do that, at least not consistently; I suspect he will continue to cut taxes and spend massively and hope that the collapsing pound will ultimately increase exports and tourism. It’s a cycle familiar to countries run by strongmen, and it’s going to be painful for consumers and savers, particularly the elderly.
3. NORTHERN IRELAND: As I’ve noted before, I anticipate that Boris will pretend to create a harder border, but actually do nothing.
4. SCOTLAND: The Tories are going to be wiped out in Scotland in the upcoming election. Support for independence will run high. Boris will refuse to consider a second referendum. Don’t be surprised if we see some violence, and even a general strike.

Show some sympathy for the poor British businessman, who will soon have to choose between a man who openly dismisses any concerns about the economic impacts of Brexit and a man who just hates capitalists, period. My guess is that there will be lots of votes and contributions for the Liberal Democrats among this crowd.

Assuming, as I do, that no-deal eventually occurs, there is likely to be a run on the pound, as money moves out of the UK and into safer havens. New investment, already meager, is likely to shrink even further as business interests try to figure out what happens next. Even if the immediate concerns about shortages and the like turn out to be overblown, there are going to be major adjustment problems. How will Boris handle them?

Through nonstop jawboning–both boosterism and threats. On the one hand, you can expect him to be the cheerleader-in-chief for the economic prospects of his new UK in order to boost morale and investment; on the other, I’m guessing you’re going to hear plenty of talk about capital controls and other new regulations on business to maintain stability during the transition period. In the end, don’t be surprised if Boris winds up sticking his nose deeper into British business than a pro-Remain government led by Corbyn ever would have. How’s that for irony?

History gives us two models for dealing with Afghanistan. The Korean model requires us to keep troops in the country indefinitely in order to maintain a stalemate; the Vietnam precedent is to negotiate a face-saving settlement and then get out as quickly as possible. Which will Trump choose?

It is clear at this point that he prefers the Vietnam model. It will lead to the demise of the current Afghan government and Taliban rule at some point in time. Trump will undoubtedly attempt to structure the deal so that he gets the maximum political benefit before the election, and only runs the risk of looking like the man who lost Afghanistan afterwards. If it occurs on his watch, he will blame Obama, Pakistan, and anyone else who happens to be around, and then we will move on.

Donald Trump lies all the time, but rarely to deceive. Typically, it is for the purpose of remaining unpredictable. Unpredictability brings with it several advantages: it gives him more freedom of action; makes him the center of attention; and keeps his adversaries guessing about his ultimate objectives. In the end, it’s a dominance thing.

The problem is that real businessmen, as opposed to large-scale grifters, crave stability and predictability. Business by and large blew off Trump’s eccentricities until now because they assumed that he would ultimately behave in a manner consistent with their interests; after all, he was one of them, wasn’t he? On trade issues, however, they are no longer sure that is the case. Hence, the decline in investment and all of the speculation about a recession, which would put his pathetic presidency to an end.

Ironic, but fair, don’t you think?

Suppose you could devise American gun regulations from scratch, without having to worry about whether they were legally or practically possible. How would you do it?

I would do it by breaking them down into categories and reviewing their social utility. Here are the results:

1. RIFLES: Rifles are used almost exclusively for sport. They aren’t typically used in suicides, or to commit crimes, or even for personal protection. RESPONSE: Permit them with limited regulation, mostly focusing on use training.
2. ASSAULT WEAPONS: Assault weapons are only useful for committing extremely violent crimes, including mass murder. They aren’t used for personal protection or hunting. RESPONSE: Ban them.
3. HANDGUNS: This is the tough category, because it is where the gun violence action really is, the attention given to mass shootings notwithstanding. Handguns aren’t used for hunting. They are usually the weapon of choice for crimes and suicides. They are, however, used for recreation at gun ranges, and they are also used legitimately for personal protection. RESPONSE: Impose extensive regulations on their ownership and use. In most jurisdictions, where crime is not much of a problem, they could be completely banned. In areas in which personal protection is more of an issue, background checks, real training programs, and gun security measures would be required, and enforced rigorously.

Bernie Sanders has a problem; Elizabeth Warren has been embracing his policies and stealing his voters. She is essentially portraying herself as a more reasonable, intellectual, and electable version of Sanders. It’s working; he’s stuck in the mud. What can he do?

He has two choices. The first is to make a genuine effort to bring about the “revolution” by moving to the center on social issues and thus strengthening his appeal to reactionary white workers. The second is to move even further to the left, hope that Warren won’t follow him, and argue that Liz is just a lefty-come-lately.

It’s fairly clear that he is choosing Option B. Logically, it makes a certain amount of sense in the short run. In the long run, however, it will alienate moderate voters and put the nomination, let alone victory in a general election, out of reach.

Barack Obama was careful to avoid associating himself too closely with the pro-democracy movement in Iran because he was afraid that the protesters would be unfairly portrayed as American agents by the regime. He was severely criticized by the right for this alleged display of cowardice.

Donald Trump is saying little or nothing in support of the pro-democracy protesters in Hong Kong. How is the GOP responding to this failure by a right-wing president to promote liberal democratic values? Do you hear a roar of anger from the base?

Of course not. As with stimulus and hard money, that was then, and this is now.