Cromwell

As originally envisioned by the man on golf cart, the proposed payroll tax cut made no sense, because it was an effort to stimulate economic activity at a time when the government was mandating business closures in the name of public health. The idea clearly hasn’t gone away, however, and conditions are somewhat different. Would it make sense today?

No–not unless and until the public health problem has been brought under much better control, and a conventional stimulus would be appropriate. We’re not there yet; we’re still in compensation for restrictive regulations mode. We should welcome the proposal for one reason, however; GOP efforts to deplete the Social Security and Medicare trust funds will be difficult to explain to the elderly in November.

Why hasn’t the vaccine just leaped out of the awesome scientific brain of the Very Stable Genius on its own accord? Based on his self-promotion, he alone should be able to solve this problem!

As we know, Trump won the 2016 election in spite of losing the popular vote by running the table in the swing states. How do the Democrats reverse that?

There are basically two ways to get to 270, assuming that Michigan will be flipped, as seems likely:

1. WIN FLORIDA OR TEXAS: Trump is going to be in trouble in Florida, as Biden will appeal to the elderly population, and the economic and public health effects of the virus will be particularly horrendous. I’m much more skeptical about Texas, but it isn’t impossible.
2. WIN TWO FAIRLY BIG SWING STATES: Pennsylvania, Ohio, Arizona, Wisconsin, and North Carolina are in play. Biden has strong historic ties to Pennsylvania; I think that one is his best bet. The others could go either way.

Here are the three scenarios, and the results:

1. A GOP SWEEP: Trump and the Republicans spike the football by cutting taxes for the wealthy, shredding the safety net, and repealing Obamacare, even in a pandemic. This is exactly the wrong approach for the times, and the recovery slows to a crawl, even with a vaccine. They don’t care. It’s the fruits of victory, you know.
2. A DEMOCRATIC SWEEP: The Democrats push through an expansionary budget that includes massive investments in green infrastructure and public health. The recovery accelerates.
3. MIXED GOVERNMENT: There is no meaningful legislation of any kind. The lights are kept on through agreements that reflect the spending priorities of both parties. As such, the budget is mildly expansionary, and the recovery continues at a reasonable pace.

Here’s what I think I know about November:

1. BIDEN IS GOING TO WIN THE POPULAR VOTE. His margin on a national basis is too high and stable for Trump to overcome, even under significantly different circumstances.
2. THE DEMOCRATS ARE GOING TO HOLD THE HOUSE: That was likely even before the pandemic and the ensuing recession. There will be no dramatic recovery, and the GOP will be blamed to some extent.
3. THE DEMOCRATS SHOULD WIN SEATS IN THE SENATE: That’s just a matter of math. The GOP is defending far more seats.

Here’s what I don’t know:

1. WHO WINS IN THE ELECTORAL COLLEGE? Trump is going to have to run the table in the swing states again to win. The odds are against it, but it certainly isn’t impossible; he proved that in 2016.
2. CAN THE DEMOCRATS TAKE CONTROL OF THE SENATE? There are enough seats in play to make that a realistic possibility. The balance of probabilities is against it, though. We will need a wave election for it to happen.

There are three scenarios for what happens to the nation in 2021: a GOP sweep; a Democratic sweep; or mixed government. I will discuss each of those in my next post.

If you’re looking at the world through Trump’s eyes, you undoubtedly think that the emergency is over, and that it is time to start the rebound that will assure your re-election. According to Politico, he is meeting with his advisers at Camp David this weekend to formulate the plan that will accomplish just that. What will it look like?

The GOP tool kit consists of two items: tax cuts and deregulation. That approach isn’t designed to deal with the impacts of a pandemic; cutting taxes doesn’t help when businesses can’t generate income, and deregulation only endangers the lives of workers and consumers. The real problem is consumer and worker confidence; tax cuts aren’t going to make people risk their lives to go to restaurants and bars again. The situation won’t really improve until the public perceives that the health issue is under control.

Nevertheless, because the GOP is what it is, the answer will be tax cuts. Cutting the payroll tax at least makes a tiny bit of sense, even though it is hardly the most efficient way to encourage employers to maintain the workforce. The real question is whether Trump will go further and suggest income, capital gains, and corporate tax cuts, as well. That would absolutely make no sense whatsoever under the current circumstances, so expect him to try it.

And when the House shows no interest, he will have someone else to blame for his failures.

Unlike its neighbors, Sweden has adopted a relaxed regime of distancing in the hope of acquiring earlier herd immunity. This approach inevitably has led to a much larger death toll in the short run. The government is betting on the following:

1. The number of added hospitalizations will not overwhelm the country’s medical resources;
2. There will be no vaccine in the foreseeable future, so herd immunity is the only ultimate solution;
3. The virus is not particularly lethal, on a percentage basis;
4. Immunity, once acquired, will remain indefinitely; and
5. Apart from the elderly and others at high levels of risk, the population will feel comfortable engaging in economic and social activity at normal levels of distancing.

So how is it working? Some of it is TBD. However, according to The Economist, notwithstanding the images you see on TV of Swedes congregating in parks and taverns, GDP is down almost as much as it is in Denmark. As to the last criterion, the gamble is not paying off.

The Chinese are predictably flooding the zone with fake news about the origins of the virus and the brilliance of their response to it. How should we react?

Any normal administration would rely on its reputation for telling the truth. Trump, however, sees the world in the same manner as the Russians and the Chinese; for him, the truth is anything that serves his purposes. Everyone knows that. Why, then, should anyone find him more credible than the Chinese?

In previous posts, I opined that what people call “character” is not indivisible; that “character” is only an issue to the extent that the individual in question is an embarrassment to the public, or cannot do his job properly; that it is a mistake to “believe women” in all cases, including Biden’s; and that even if the Reade allegations were true, they did not meet the standard for disqualification, particularly considering the quality of the alternative. Biden has now firmly denied the allegations, and I will make no further comment on that score. But what about Bill Clinton? Did he meet the standard?

Once Clinton had been re-elected, the embarrassment standard was superseded by the constitutional “high crimes and misdemeanor” test. Arguably lying under oath about sex in a private lawsuit was a “low crime and misdemeanor” that, in my opinion, did not meet the test. Prior to the election, however, the standard was very much in play. I think Clinton’s behavior did, in fact, make it difficult for him to represent the country properly. That’s a big reason why I voted for Dole in 1996.

Republicans want to force people who have reasonable fears about catching the virus to go back to work or starve. Republicans are complaining that the unemployment compensation provided by the second “stimulus” is too generous. Republicans are apparently going to demand pro-business, anti-worker language in the next round of “stimulus”. Republicans are responsible for the shambles of an unemployment compensation process in some swing states.

Not to mention, of course, their opposition to unions and a higher minimum wage, various new anti-worker Trump regulations, and the regressive tax cut. It’s an opening, Democrats. Don’t let it pass you by.

To what extent has the Republican Party devolved into the Party of Trump? Let’s look at the scorecard:

1. The GOP believes in free trade. The POT, not so much.
2. The GOP believes in limited, predictable government. The POT supports blustering, arbitrary government.
3. The GOP sees Russia as an enemy. The POT thinks Russia is a natural ally and gratefully accepts its support in elections.
4. The GOP at least says it worries about deficits. The POT couldn’t care less.
5. At least parts of the GOP are sympathetic to immigration. The POT, of course, isn’t.
6. The GOP believes in liberal democracy and supports it at home and abroad. The POT thinks right-wing dictators are our best hope of stability in a dangerous world and expresses contempt for democratic leaders and principles.
7. The GOP believes in legislative and judicial oversight of the executive branch. The POT thinks the executive is only accountable to the electorate.
8. The GOP says that character is important in a president. The POT thinks scruples and support for the rule of law are weaknesses.

It’s not a pretty picture, is it?

On the GOP leader named Mitch.

He’s Robin Hood, but for the rich.

He’s turning the screws

So the Democrats lose.

If they don’t, well, then, karma’s a bitch.

It’s October, and the economy is struggling. Unemployment is still in double digits, and there is no improvement in sight. The polls show Biden and the Democrats winning a smashing victory. Fortunately for the health of our system, Trump refuses to believe them, and has no plans to cancel the election; after all, he wasn’t supposed to beat Hillary, was he? The polls are just more fake news!

GOP candidates for Congress have a dilemma. If they continue to identify with the man on golf cart, they stand to lose support from angry swing voters that they desperately need to stay in office; if they don’t, they know a Twitter blast is coming from their increasingly paranoid leader, and the base may stay home. What do they do?

Let’s hope we find out.

The country is starting to reopen. This represents an implicit judgment that a level of deaths that is appallingly high by historical standards is acceptable for the near future as long as our health care system is not overwhelmed. What does this mean for the next year or so, and are there any alternatives?

Without a vaccine or a much more rigorous regime of testing and contact tracing, distancing will remain the order of the day, whether it is officially mandated or not. Large segments of our economy can adjust to that, but parts of it can’t. Many, perhaps most, restaurants will not survive at lower levels of capacity, regardless of whether they are driven by regulations or a lack of consumer confidence. Tourism will continue to be moribund. Sports will take place in empty stadiums. Cultural events will be cancelled. The unemployment that will result will perpetuate the current recession, albeit at higher levels of activity that we see today, until we have a vaccine. There will be no V-shaped recovery.

There are two alternatives. One of them is a total Chinese-style lockdown, to include closing the borders, until we have a vaccine. That would result in fewer deaths, but far less economic activity. The second is the Swedish solution: trade more deaths today for less economic impact and the hope of herd immunity in the future. In this country, only a few Republicans support that approach, mostly in the hope that it would get Trump re-elected.

Are these alternatives preferable to what amounts to a middle way? From my perspective, no. It would be better, however, if we debated them openly, rather than using the current approach as a default.

Trump loves to take hostages, but so does Mitch McConnell. His MO is to threaten an outcome that is obviously inconsistent with the national interest (e.g., defaulting on the national debt) and to leverage that threat into a substantive concession that is consistent with GOP ideology. This negotiating tactic only works because McConnell (again, like Trump) comes across as a credible madman who actually would kill the hostage without the concession. It’s completely irresponsible, and it needs to stop.

As you would expect, McConnell and Trump have signaled that they will demand concessions on sanctuary cities, or employer liability, or something to be determined later in exchange for assistance to state and local governments. It’s time for the Democrats to say no, because the failure of the legislation will deepen the recession and thereby damage the GOP in November. In other words, the hostage is a potential Republican victory; if they want to shoot him, so what?