Month: March 2020

The next time Bernie Sanders accuses Joe Biden of being in the pocket of billionaires, he should respond in the following fashion:

1. He agrees with Sanders that billionaires have too much political influence in this country. That is why he supports a constitutional amendment mandating public funding of political campaigns.
2. He also agrees with Sanders that billionaires are undertaxed as the result of a series of misguided GOP tax cuts over the last 40 years. He supports higher taxes on the wealthy in order to fund programs that will benefit struggling workers and the middle class.
3. Finally, he agrees with Sanders that measures should be taken to eliminate billionaires who do not earn their wealth. He consequently believes that the estate tax should be increased substantially, and that capital gains taxes should be reformed, as well.
4. He does not agree that a wealth tax is an appropriate mechanism to tax billionaires, as it is both unconstitutional and impractical.
5. He does not agree that the existence of billionaires is an inherent threat to the operation of the economic and political systems. We need to maintain adequate incentives to promote excellence and innovation in this country. Would the country be better off today without the innovations provided by, for example, Bill Gates and Jeff Bezos? They are billionaires for a good reason. They need to pay their fair share, but no more.

A recession is typically caused by a sudden drop in consumer confidence. The point of a stimulus package is to generate additional private economic activity by filling in gaps and rebuilding confidence. A quarantine, on the other hand, is essentially a temporary government-mandated recession for public health purposes; the whole point is to stop economic activity for a greater good. The last thing the government wants is to stimulate additional activity under those circumstances.

As a result, a conventional stimulus package is inappropriate, and tax cuts would be wasteful and even counterproductive. The objective should be to provide compensation for the temporary losses that everyone will suffer while economic life has been suspended. A national bailout, as it were, with direct cash payments to everyone is what is required.

Who will pay for it? Trump has obviously made the deficit worse with his regressive and unnecessary tax cut. The national bailout will drive the deficit even higher. Interest rates are so absurdly low at the present time, however, that concerns about the deficit would be misplaced. This is a time for action, not conventional thinking.

The virus obviously spreads most easily in urban areas. That means its impact will be felt most strongly in blue states.

How will people in the red states react? Relatively safe in their rural environments, and prompted by Trump and a few of his Fox News apostles, some of them will continue to treat the virus as a hoax generated by Trump’s enemies to defeat him in November. Some will come to realize that anything affecting their customers, both here and abroad, will also negatively affect them, and will respond accordingly. Finally, we are bound to hear stories about fundamentalist preachers who claim that this is God’s punishment for opposing Trump and legalizing gay marriage. Bet on it.

Some transactions will go on as normal regardless of the intensity of the virus; these include many services that can be provided remotely and the sale of some goods, such as food and medicine. Other transactions will be deferred, including the purchase of some manufactured goods (cars would be a good example) and some tourist activities. Finally, some transactions will be terminated altogether, and the losses will be permanent. The coffee you didn’t buy from Starbucks today will not be made up at some time in the future.

As you can see, the impacts do not break down neatly on a services vs. goods basis. How severe will the coming recession be? It depends on the size of the last group of transactions, and the extent to which the federal government fills in the gaps with bailouts.

The leader did everything he could to minimize the impacts of the virus in its early stages. His people, however, understood perfectly that he was far more interested in protecting his own political position than in their well-being. His efforts to control the narrative consequently failed.

Later on, he completely changed course and portrayed himself as a fearless virus buster. When the crisis passed, he inevitably took the credit for the “victory,” even though he was not entitled to it, and the economic impacts of the virus continued to linger.

Is it Trump or Xi? You decide.

Lincoln-Douglas, that wasn’t.

Bernie Sanders is a man with one speech. Ask him a question about fighting the virus, and he will talk about billionaires and M4A. That’s who he is, and what he does. To criticize him for it at this point is a waste of breath.

Biden had two objectives coming into the debate. The first was to avoid looking like a blithering idiot; here, he succeeded quite nicely, so the impact of the debate on Tuesday’s primaries will be minimal. On the second one, to win over Sanders supporters, he was uneven at best. He missed several obvious opportunities to minimize differences between himself and Bernie, and actually picked fights on a few occasions for no apparently good reason. That was a mistake.

Anyone with Biden’s decades of experience in public life is going to have a record full of nuance. The two-man format offers him enough speaking time to explore the nuances. Instead, for the most part, he is making statements about his evolving positions that make him sound dishonest. He needs to fix that ASAP.

In the meantime, because the candidates did little to heal the chasm between fundis and realos, the real winner was Donald Trump. Fortunately for the Democrats, there is so much attention on the virus at this point that hardly anyone will care.

Essentially all sports shut down. Theaters, museums, and schools closed. Cafes shuttered in Paris. Gatherings of virtually any size banned. We’re in the no fun zone, for sure.

It’s only appropriate that this is happening during Lent. Let’s hope it’s over by Easter.

The panel decision in the McGahn subpoena case has been vacated, and the case will be heard en banc. The original decision would have left Congress without enforceable executive oversight powers. This is a big deal, for now and the future, although the Supreme Court will probably have the last say on the matter.

Bernie Sanders thinks the American dream leaves too many people behind. He wants America to look more like Denmark, with a far more robust welfare state, higher taxes, and a tiny army.

Denmark is a nice country; it always scores highly on indices of national happiness. So why isn’t the dream resonating here? The one word answer is fear, of the following:

1. That the government simply isn’t capable of managing such a large segment of the economy competently;
2. On the part of the millions of Americans who are comfortable, but not billionaires, that the value of the new public services they receive will not justify their higher tax burden;
3. That Xi, Putin, and other international bad guys can’t be kept under control by the Danish army;
4. That the US would turn into a haven for illegal immigrants looking for welfare benefits paid for by American workers; and
5. That an America that does not reward excellence will be less vibrant—the mediocre society.

With the possible exception of #4, these are all reasonable concerns. Hence the imminent demise of the Sanders campaign, which has done nothing to address any of them.

Anything that House Democrats do to ease the crisis will inevitably aid the Trump re-election campaign—not that he’ll give them any credit for it. The needs of the American people, however, take precedence over party politics. At least they do for a respectable adult party.

Would Mitch McConnell return the favor? Of course not. Remember 2009?

Bret Stephens says that even William F. Buckley would have supported increasing the size and power of the state to protect the public from dangerous diseases. He’s probably right; but what, you ask, distinguishes the virus from climate change? Why isn’t it also appropriate to expand the state to protect the public from fires, monster hurricanes, and the like?

I suspect the difference, in the eyes of so-called “conservatives,” is that the battle against climate change has no obvious end point, so the expansion of the state is more or less permanent. Do you find that line of reasoning persuasive? Me, neither.

If the crash of 2008 had occurred six months later, John McCain might well have won the election; if six months earlier, Hillary Clinton would have been viewed as a safer choice than Obama. In a similar vein, if the markets had crashed six months ago, and recovery was not in sight, socialism would have a lot more appeal than it does now. In the middle of a crisis, the experienced hand will prevail. That’s Biden.

We couldn’t bring ourselves to watch the speech live, but I caught it on YouTube, and it was everything I feared it would be. Reading from a TelePrompTer in his usual weird monotone, he boasted about his mostly nonexistent accomplishments, minimized the problems, took gratuitous shots at the EU, and misstated parts of his own travel ban. The markets are going to respond accordingly.

The fact is that Trump would be happy to see a million American deaths if they were all Democrats. Unfortunately for him, most of them will be his elderly supporters.

I was depressed, but never scared, after 9/11. Today, I’m both.

Donald Trump directly confronts the virus for the first time. As you would expect, he reaches into his usual bag of tricks.

T: Nice to finally meet you, Mr. Virus. What should I call you? Corona?

V: Please allow me to introduce myself. I’m a man of wealth and taste.

T: Hey, I love that song, too! Where did you hear it?

V: Everywhere. You know the rest of it.

T: Well, let me just say you’re the biggest, baddest virus on the planet. You’re way bigger than SARS or Ebola. They’re saying you’re even bigger than the Spanish flu. You remind me of myself.

V: I appreciate the compliment, but your flattery doesn’t even work on Kim. It sure won’t work on me.

T: The bottom line is that it’s time for you to go.

V: Why? I just got here.

T: You’re messing up my campaign. I can’t allow that. Surely you understand.

V: I couldn’t care less about your campaign.

T: You know I’m a very stable genius. You can’t compete with my awesomeness.

V: I’ll take that chance. The markets aren’t too impressed with you so far.

T: I’ll take you as a hostage. Your friends will have to give up to save you. Nothing personal, of course.

V: There are zillions of germs like me out there. Like you, I’m dispensable.

T: I can pay you off. Wouldn’t you rather hang out in some African country? I could arrange it, and the weather would be warmer.

V: Not a chance. I like it right here.

T: Isn’t there something I can do to make you go away?

V: Why don’t you just leave me alone and pretend you’ve solved your problem? That’s what you usually do.

T: Hey, great idea! I should have thought of that before!

Trump leaves in triumph.

Apparently determined to avoid a repetition of the Clinton e-mail pseudo-scandal, the MSM have given Biden a free pass on Ukraine to date. They rarely say anything about it, and when they do, it always comes with a big disclaimer about the lack of any evidence of wrongdoing. Can Biden continue to rely on their restraint?

He would be wise not to take it for granted. The GOP Senate and the administration will do their best to fabricate news stories out of Ukraine that will be difficult for the MSM to ignore. Simply approaching the issue as something that is beneath his contempt is not going to be a winning strategy.

Given the difficulties of his upbringing, it should be easy to portray Hunter as a completely sympathetic figure who has periodically lost his way. Biden needs to work on that in the next few months. It could well be the difference between winning and losing in November.