Author: hamilton1788

Good evening, America! Remember me? I’m your Uncle Joe. I’ve been gone the past few years, but I’m back, and I’m running for president.

You might be wondering why an old guy like me would run for the most difficult job in the world. Well, there are two reasons. First, I’m better qualified than anyone else in the country, and if you’ve been watching the last few years, you understand that competence matters. Second, and perhaps even more important, I understand what the American people want, and don’t want, from their government.

During the 2016 election, it became fashionable to say that America was “rigged.” Bernie Sanders started it, and he meant it. Donald Trump picked it up, and it helped him to get elected. Apparently he had a different definition of “rigged” than you and I do, because he decided to solve what he viewed as the problem by making racist remarks, supporting a huge tax giveaway to rich people, sucking up to Putin and other dictators, obstructing justice, and dismantling all of the agencies that protect us from unhealthy substances and activities, just among many other things. He thinks his job is to divide America every day he’s in office. I guess that was his idea of how to make America great. Well, it’s not mine.

Some people in our party have picked up the “rigged” idea and called for a “revolution” to fix a country that is flawed beyond all recognition. They’re right about one thing–we do have problems that need to be fixed. But America isn’t “rigged.” We don’t need Donald Trump, or any “revolutionary,” to make America great again. America is already great. It just needs a change of leadership to get back on the right track, and in spite of Trump, we’re not that far off.

How will we do that? By building on the legacy of Barack Obama. By rolling back most of the egregious Trump tax giveaway to the rich and using the money to help struggling working and middle-class people. By expanding Obamacare through the use of Medicare for More. By enacting ethics legislation. By finding a reasonable compromise on immigration. By not sucking up to dictators anymore, and standing up to Putin and Xi. By putting an end to a stupid trade war. By acknowledging climate change is a really serious problem, and using legislation, regulations, and subsidies to fight it. By rejoining the Paris and the Iran Agreements. And by fighting racism in the criminal justice and political systems.

I know there are candidates in my party who think that President Obama was a failure, and that we should throw out his work and start from scratch. I’m here to tell you that they’re wrong, and that many of the programs they’re advocating will never pass in our system, or cost way too much, or infringe on the freedoms of Americans in a way that they won’t accept. It’s not enough to have good intentions. It doesn’t do any good to make promises you can’t keep. You have to be able to deliver.

And so, I will be asking for your vote during the primaries this year, and in November of 2020. God bless you, God bless America, and good night.

On the Democrat candidate Cory.

He has quite the interesting story.

He sounds like Barack.

No, that isn’t a crock.

Can he find the same pathway to glory?

The Democrats, as you would expect, see inequality in economic terms. It occurred to me this morning, however, that the Republicans see it in social and intellectual terms. The class enemy for them isn’t the rich car dealer who, like you, worked hard all his life to get where he is today; it’s the snooty professors, doctors, and lawyers who went to elite schools and think they’re smarter than you. Leave the rich folks who are just like you alone–crush the elitists and globalists who want to tell you what to do!

And so, Donald Trump, with his strange syntax and pedestrian tastes, is on our side regardless of his wealth, while Barack Obama, with his cool, urbane style, was not.

There is a lesson for the Democrats in that; if they nominate someone who comes across as being too professorial, their chances of flipping reactionary white workers are going to disappear.

THE ROAD TO VENEZUELA

We’re on the road to Venezuela

If the left should win.

They’re bound to bring Maduro here

So vote for Trump again.

_______________

Sure, he’s stupid and corrupt.

He’s narcissistic, too.

But if you put the left in power

Here’s what’s in store for you.

_______________

Inflation ravaging the land.

Your money’s worthless now.

The government’s without a plan.

You’ll struggle through–but how?

___________________

Rioters will fill the streets.

The government fights back.

Left-wing thugs will loot and kill.

Your rights under attack.

________________

Criminals will rule the land.

The border’s been erased.

White folks’ time has come and gone.

Our culture’s been replaced.

________________

Standing in an endless line

To buy a crust of bread.

The president won’t care a fig.

She’ll blame the right, instead.

____________

This nightmare land is yours to choose

So ponder hard and well.

For this is true: if Trump should lose

It’s all going to hell.

Kamala Harris looks and sounds like a winner. She’s smart, telegenic, and tough. Her campaign rollout was, with one exception, a great success. That exception, however, is worthy of discussion.

Harris, like virtually every other Democrat, supports Medicare for All–whatever that means. When she was asked about the role of private insurance in her plan during a CNN town hall, she went the full Bernie and said that it would have to go. Later, when faced with plenty of public opposition, she walked part of it back. Her communications director explained that she wanted a burrito (the Sanders version of MFA), but for tactical reasons, might be willing to settle for a taco (Medicare for More).

There isn’t anything obviously wrong with saying that you will keep your powder dry and your tactics flexible. I suspect most of the other candidates will ultimately handle the issue the same way. The point is that this is one of the most important questions the candidates will be addressing between now and November, and she should have been better prepared for it.

I write largely to explain that, in this case, a taco is unlikely, in the long run, to get you a burrito. The full Bernie version of MFA provides universal coverage with no co-pays through a tax-supported payment system; there is no role for private insurance in this system. Medicare for More is a voluntary system that does not get you to universal coverage, is paid for largely by individual consumers rather than taxpayers, has co-pays, and does not impact the interests of people who have private insurance; that is a completely different model. Medicare for All, in my opinion, is a political disaster waiting to happen in 2020; Medicare for More, on the other hand, is not.

Elizabeth Warren tells us we can restore the integrity of our political system and fund vital new social programs, without damaging our economy, by adopting her plutocrat tax. Right-wingers, on the other hand, are rending their garments and screaming that the next stop is Venezuela. Who’s right?

In my opinion, none of the above. The legal and administrative problems associated with the tax make it a less desirable alternative for soaking the rich than, say, the Sanders estate tax increase. The adoption of the tax will do little to improve the workings of our political system. On the other hand, the economic impacts of the tax have been vastly overstated by the right; whether it helps or hurts depends on how the proceeds are invested by the government.

In reality, the likelihood that the proposal will ever become law is quite small. Its real impact will be as a campaign tactic, and a symbol of genuine populism. Will it succeed on those terms? We’ll know for certain no later than next November.

Sanders has proposed a dramatic increase in the estate tax. It doesn’t raise constitutional issues and it wouldn’t create administrative problems that the IRS hasn’t seen before. It would, over the long run, help to eliminate plutocrat dynasties, and thus reduce inequality, without doing much damage to work incentives. It would also raise money for the expensive new social programs that are being tabled by a variety of candidates.

The Sanders legislation is more reasonable and moderate than the Warren wealth tax. Who would have imagined it?

It’s fair to say that the American economy is hooked on low interest rates. If you need evidence, look at what the stock market and the bond market do when the Fed raises rates.

Rates have been extremely low since 2008. Some Democrats clearly view this as an immutable new normal and argue that blowing up the deficit with expensive new programs won’t damage the economy. Are they right? Not really.

Interest rates are the product of a number of factors, including the following:

1. CONFIDENCE IN THE FUTURE: This cuts different ways. If you assume that the American government will always be predictable and competent (i.e., it will not create catastrophes or default on its bills) and that growth will remain slow but steady, you will bet on low rates. If you don’t believe in both of those things, you will demand higher returns on your money.
2. INFLATION: The little-publicized up side to automation and globalization is low inflation. Given the state of American politics, can you safely assume that inexpensive Chinese products will continue to flood our markets and keep prices down?
3. THE FED: The Fed wants additional ammunition to deal with future recessions. That, to a large extent, has driven the most recent interest rate increases. It also wants to maintain its credibility as an inflation-fighter with the markets, even in the face of criticism from Trump. Those motivations aren’t going away.
4. FOREIGN INVESTMENT: Japan has a very high debt relative to GDP, but it also has high levels of domestic saving, so the debt is held by Japanese citizens. That is not true here. Foreigners could raise interest rates by refusing, for either economic or political reasons, to buy American debt.

The fact is that the investor class is likely to freak out if the 2020 election is won by a Democrat who promises lots of new expensive programs and doesn’t have a plausible way to pay for them. Investors prefer incompetent right-wing bozos who speak their language to left-wingers. That may be unfair, but it’s a fact of life. And so, while there is certainly some room to expand the deficit for overriding public purposes, I cannot agree that it does not matter; the possibility of significant increases in interest rates still exists.

As we all know, Donald Trump ran as a populist, but chose to govern as a traditional Republican–at least on economic issues. Warren clearly intends to run as a genuine populist, not a faux one. What does that mean for the Fox News crowd? You have to wonder what they think when they hear Sean Hannity attack her tax and defend the GOP by talking about how vital the yachting industry is to our economy.

Warren is effectively making a bet with her wealth tax plan, as well as other parts of her program, that the additional white working votes she wins will more than offset the potential votes and contributions she loses from socially liberal millionaires. The bet presumes that, for a large number of the white workers who voted for Trump in 2016, economic interests prevail over cultural concerns. Personally, I think she’s wrong about that, and the bet will fail, but I could be wrong. We’ll see next year.

Warren has made it clear that the motivation behind her tax is not primarily economic; she thinks that the levels of inequality in this country are now damaging democracy. Is she right?

On its face, she definitely has a case. Today, as a result of two unenlightened Supreme Court decisions equating campaign funds with free speech and some ongoing sabotage of the electoral regulation system by the GOP, you have a flood of unaccountable money in the process and the phenomenon of self-financing campaigns. In addition, you have national campaigns that are kept alive solely by sugar daddies like Sheldon Adelson and Foster Friess. It is not unreasonable to view this as a threat to the system.

On the other hand, billionaires don’t have a very good record of actually winning elections. Donald Trump was outspent in 2016 by Hillary Clinton. Santorum and Gingrich didn’t win, in spite of the best efforts of their patrons, in 2012. Rick Scott would appear to be an exception, but his margin of victory last year was the same as DeSantis’, which suggests that his spending didn’t really make much of a difference in the long run.

My conclusions are as follows:

1. There are plenty of billionaires in America, and some of them are liberals. The likelihood that one of them, or a very small number, can dominate politics is consequently pretty minimal. Madison’s view of the role of factions in large countries is relevant here.
2. You could argue that one of the positive elements of our intense partisan divide is that campaign money doesn’t matter much in national elections, because most of the voters simply can’t be reached by commercials.
3. I think money really comes into play in two situations, neither of which can be touched by the Warren tax. First, large corporations can afford to pay lobbyists to tweak legislation and regulations to get what they want; second, politicians of both parties are more sympathetic to the concerns of people of their own class than to the poor. There really isn’t an obvious way to address these concerns; certainly, the Warren tax won’t.

And so, like the economic case against the tax, I consider the political case for it to be unproven.

A brief history of the Brexit negotiations:

1. May tells the world that no deal is better than a bad deal.
2. May predictably negotiates a bad deal with the EU, which has most of the leverage. The deal mitigates some of the damage from Brexit at the cost of turning the UK into a vassal state. Everyone is appalled.
3. Notwithstanding #1, May tells the Commons that her bad deal is better than no deal. She also tells the Brexiteers that the EU won’t negotiate a better deal.
4. Parliament overwhelmingly rejects her deal.
5. Notwithstanding #3 and numerous statements from the EU, May tells Parliament that the EU is willing to concede a better deal on the Irish backstop if they know it will be approved by the Commons. Parliament sends her back out to make the promised better deal with the clock ticking.
6. What do you think happens next? This is theater of the absurd.

The right, of course, is screaming that the Warren wealth tax is the first step to Venezuela. Are they right? Here is my analysis:

1. REDUCED INCENTIVES: The tax only applies to a very small number of people. You would have to assume that the average person could somehow calibrate his willingness to work to a very high income threshold. That doesn’t seem very plausible–or significant.
2. REDUCED INVESTMENT: The very wealthy can’t possibly consume all of their income, so the rest is obviously invested. Is their investment exceptionally productive? Sure, some of them made their money as entrepreneurs, but is it likely that the majority of them continue to put their fortunes at risk? I haven’t made a study of this, but I doubt that the average plutocrat takes many chances with his money. On the other hand, the tax proceeds might, or might not, be used for productive investments in infrastructure, education, and the like. The bottom line here is that the relative value of plutocrat and public expenditures depends on how each party spends the money; you can’t say categorically that one approach is better than the other.
3. REDUCED PHILANTHROPY: There is no doubt that the Warren tax would reduce philanthropy. Would that matter much to the average American? As far as I can tell, a disproportionate amount of plutocrat philanthropy either goes to high culture vanity projects or to improve the lot of suffering people in Africa. The latter is admirable, but you can understand why American working people are not overly impressed.

The better arguments against the wealth tax are the legal and administrative concerns that I discussed in my last post. The economic case against the tax is unproven.

In 2000, it was Ralph Nader, who bears (in spite of his denials) some responsibility for hundreds of thousands of deaths in Iraq. In 2016, it was Jill Stein, who insisted against all appearances that there was no real difference between Hillary Clinton and Donald Trump. In 2020, it seems, it may be Howard Schultz, who has the brilliant idea that what we really need now is a successful outsider businessman to clean things up in Washington. Where have I heard that before?

tI assume that Schultz takes his inspiration from Macron’s success as an independent centrist. Unfortunately for him, the American political system differs from that of France, as follows:

1. The left in France was dispirited and exhausted at the time of the election. That will emphatically not be the case with the Democrats in 2020.
2. The French system has a runoff. Ours doesn’t. In France, he could hope to win the support of the left if he could get into a runoff against Trump. Here, that can’t happen; he would have to win outright in November.

The fact is that the red and blue bases constitute about 70 to 80 percent of the electorate. Schultz could only hope to compete for the remaining 20 to 30 percent. That’s not enough, realistically speaking, to get elected.

And so, if he decides to go where Michael Bloomberg wisely chose not to, he can only be a spoiler in 2020.

Mark Knopfler is the exception to the rule: a songwriter who has improved with age. He has a great sense of history, an eye for detail, and clear sympathy for the struggles of outsiders and working people. And, of course, he has always been a wonderful musician.

His new record, “Down the Road Wherever,” is consistent with its predecessors, with two notable exceptions. First of all, it is more musically adventurous; it has about as many horns as guitars, and features, among other things, piano jazz and a song that sounds like something Steely Dan recorded in the seventies. (It’s true–I’m not kidding.) Not all of these experiments are successful, largely due to his vocal limitations, but he’s entitled to credit for trying. Second, some of the lyrics aren’t as sharp as usual; two of the verses on “One Song at a Time” don’t work for me, and the irascible old guy in “Bacon Roll” sounds like the character in “Mighty Man,” but without the pathos that made the latter song so effective.

Still, it’s well worth a listen. The highlight is “Back on the Dance Floor,” which would have been a big hit 30 years ago. Unfortunately, the music world has moved on, and hardly anyone will notice today.

Leaving the policy merits of the proposal aside, the Warren wealth tax is a brilliant tactical decision that could help her win the nomination. Why? Because it destroys any plausible rationale for a Bernie Sanders candidacy. Sanders already had issues with his age and his past associations; now he has been outflanked on the left by the wealth tax, which is a simpler, bolder measure than anything he has ever proposed. He can’t compete with it; he would be wise not to try.

Warren should have the fundi/class quadrant locked up at this point. She could still be defeated by a more charismatic candidate who emphasizes identity over class (probably Harris or Booker) or a realo candidate who calls for national unity against Trump and presents a more moderate, realistic agenda (Biden). Will that happen? At this point, I have no idea.