Cromwell

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.

Elizabeth Warren isn’t a Marxist, but she has certainly read her Piketty. Her wealth tax is completely consistent with the Piketty book, and her two principal advisers on the subject are, as I understand it, collaborators of his.

The wealth tax proposal has far-reaching consequences that I will address in three separate posts in the future. The first will focus on the tax as a campaign tactic; the second will talk about the political premises of the proposal; and the third will discuss its economic impacts, if implemented.

For today, however, I will limit myself to the legal and administrative problems with the tax, which are as follows:

1. IT WOULD PROBABLY BE FOUND TO BE UNCONSTITUTIONAL: There is a fairly lively debate among the commentators as to whether a wealth tax would survive legal scrutiny. I am more persuaded by the no side, but the merits of the arguments really don’t matter much, because the decision would ultimately be made by the Roberts Court, and how do you think that would turn out?
2. IT WOULD BE AN ADMINISTRATIVE NIGHTMARE: Warren is no fool, and she knows that the people who are potentially subject to the tax will do everything possible to avoid it, so part of her proposal is money for increased enforcement. The principal issues would be valuations, the movement of money overseas, and more or less fraudulent conveyances. It would take a small army of lawyers and accountants assigned to each taxpayer to make the tax work. Basically, the country would be treating every person who is potentially subject to the tax as a quasi-criminal, or a dangerous animal at a zoo. Does that sound fair to you?

I would agree with Warren that the extremely wealthy should pay more taxes, as they have benefited disproportionately from globalization and automation, and that inequality has reached levels that are making our economy unnecessarily unstable. The best way of dealing with these problems, however, is not a wealth tax, but higher marginal rates of income tax at the top levels and a beefed-up estate tax without stepped-up basis. These measures would address 80 percent of the issue at close to zero percent of the cost and risk.

Don’t think the Chinese didn’t notice. It bodes well for a face-saving end to the trade war–for a fundamental change in the Chinese system, not so much.

There should be no partisan division on one point: Nicolas Maduro is a singularly inept tyrant. He has trashed his country’s constitution and driven its economy into the ground. The exodus that inevitably followed is causing great hardship for Venezuela’s neighbors. Everyone except the Russians, Chinese, and Cubans would be better off if he left, and who cares about them?

But still, he clings to power, and he clearly has the public support of the higher levels of the military. So what happens now? Here are my thoughts:

1. The Trump administration has limited itself to public statements of support for the opposition up until now, which was wise.
2. Now, however, we have taken concrete action by recognizing the head of the opposition as the legitimate Venezuelan head of state.
3. That, in effect, is a red line. We can’t let Maduro stay in power without embarrassing ourselves at this point.
4. Brazil and Colombia have ideological issues with Maduro and have been impacted by the influx of refugees. If they aren’t willing to take military action to displace him, we should not have created the red line.
5. We could refuse to buy Venezuelan oil. That would have a very significant impact on the government (and American consumers) in the short run. Trump has no obvious legal right to take that step, however, and in a matter of weeks, the world oil markets would adjust, and supply chains would be changed. If the embargo didn’t cause the government to collapse immediately, therefore, it probably wouldn’t work at all.
6. We could impose a blockade on oil tankers leaving Venezuela. That would probably work, but it would be an act of war without congressional approval.
7. We can provide moral and material support to an invading force from Brazil or Colombia. If those countries aren’t willing to take military action, however, that obviously won’t work.
8. Given our checkered history in South America and the obvious analogy to Putin in Ukraine, direct military involvement on our part would be a disaster.

What does Trump have in mind? Honestly, I have no idea. Let’s just hope his plan is better than the one for the shutdown.

So much winning! Are you tired of it yet?

So the government shutdown goes on.

All those federal workers are pawns.

So how does it end?

It’s when Trump and his friends

See their hopes of a win are now gone.

We already know what it will take to decarbonize our utilities: cheaper and more efficient sources of renewable energy; better batteries; and a smarter grid. We also know how to get there: technology-forcing regulation and subsidies.

When you are relying on innovation, however, there are no guarantees. The real policy question on this issue, therefore, is whether nuclear power will be part of the equation.

On the plus side, nuclear plants don’t emit greenhouse gases, they create energy very efficiently, and they use technology that is already available today. On the down side, of course, are concerns about accidents, fuel storage, and terrorism.

It’s a balancing act. To me, the negatives of nukes outweigh the positives, but reasonable people can disagree on this point. If you don’t accept nukes as part of the solution, you have to be prepared to water down your decarbonization objectives to some degree. I believe that is what will happen.

Jonathan Chait reminds us in today’s New York Magazine that Trump didn’t invent hostage taking as a legislative tactic; the GOP used the threat of shutdowns and debt ceiling crises to force spending cuts during the slow recovery from the Great Recession. He’s right, of course.

While the wall crisis is largely about the symbolism of the wall, it is also about the legitimacy of hostage taking; the Democrats know Trump will do it again if they concede any kind of a “win” over the wall. The question for today is, would he try it over the debt ceiling? Would he really risk the credit of the United States for something stupid that would please his base? And if he did, would the GOP congressional leadership step in to save the interests of the donor class?

The answer to the first and second questions is almost certainly yes; for Trump, anyone and anything can be a hostage if it serves his purpose. Nothing is sacred to him except his own self-image. As to the third question, McConnell would have to choose either to buck his president or his donors. Since he typically takes a long view, I’m guessing that he would support the donors, but that remains to be seen.

Imagine that you are AOC and you have finally succeeded in selling the GND to enough people to make it happen. Now the question is, how do we pay for it?

You start with the premises that climate change is an international emergency and that its costs are inescapable, whether you take action to limit it or not; the only question is whether the burden will be distributed fairly or not. Furthermore, there is no plausible scenario in which a large part of the cost will not be borne by individuals as private agents–property owners or consumers–rather than taxpayers. Nevertheless, the subsidies that will have to be part of the program will be paid for with a government check. How will the money be raised?

There are obvious choices: roll back the Trump tax cut or use the proceeds from a carbon tax. The issue then becomes your other spending priorities; there is only so much money to go around. Can you really afford to fund both your red and your green program?

AOC, with some support from prominent figures such as Paul Krugman, apparently believes that the deficit can be ballooned dramatically without increasing interest rates. I don’t agree. Interest rates are a function of investor confidence in the government. A sweeping left-wing program that blows up the deficit is going to provoke a very negative response from the investing public. We may not be Greece or Venezuela, but we won’t be America, either.

And so, I think the GND supporters, in the end, will have to make choices between the red and green parts of their program. Either both will be watered down somewhat, or one will have to be sacrificed.

Fair or not, and regardless of her many undoubted talents, Hillary Clinton always came across to me as an elementary school teacher telling me to eat my vegetables. There was an air of hauteur and entitlement about her that I didn’t really appreciate. Obviously, a lot of other people felt the same way.

In spite of their surface similarities, I don’t get the same feeling from Warren. I think her issues relating to people revolve around her ability to read the room and find the right words to fire up her audience. In that respect, she’s the opposite of Trump.

Warren has everything else she needs to be a successful presidential candidate. She knows policy inside and out; she has a compelling biography, if she can figure out how to feature it; she appears to be able to integrate both class and identity concerns in a single package; and I think she passes the Putin’s dog test. She is a capitalist reformer, not a socialist wannabe, which is another plus.

Can she find her voice during the campaign, or will she just look like a white bread old lady next to the other candidates? I make no predictions. That’s the point of campaigns.

Obama’s cap-and-trade legislation was killed by the combination of energy state Democrats, opportunistic Republicans, and the filibuster. AOC and her friends will face the same obstacles if the Democrats win the 2020 election. How can they be overcome?

Here are some suggestions:

1. SKIP THE HAIR SWEATER: Jimmy Carter’s gloom and doom message about energy consumption only drove the American people to vote for Reagan. Climate change should be discussed as a challenge and an opportunity, not just a source of unavoidable future suffering.
2. TALK LIKE AN ECONOMIST: Many GOP members will argue that the GND will impose costs that will wreck our economy. On the contrary: the costs are already being imposed by nature, and cannot be avoided, so the real question is whether they will be borne systematically, or randomly and after the damage is done. You can also emphasize the number of jobs that already exist in clean energy, and how many more could be created in the future.
3. PROPOSE MARKET-FRIENDLY MEASURES TO ATTRACT REPUBLICANS: No elaboration is needed.
4. TALK ABOUT TODAY, NOT TOMORROW: One of the problems with climate change is that most of its effects will be felt by posterity. Many Americans simply don’t care what happens after they are gone. Deal with that by showing recent footage of hurricanes, rising sea level, and wildfires. The first wave of problems is already here.
5. DON’T BE AFRAID TO WAVE THE FLAG: Is it really safe to concede leadership in clean energy to the Chinese?
6. BE OPTIMISTIC: If the message is that we’re all screwed in the long run, why not party today? The public needs to be told that viable solutions do exist, and everything we can do to help, even now, matters immensely.

All of the putative top tier Democratic presidential candidates except Bernie Sanders have a legal background, which caused me to do some research on past nominees. Do you know who the last Democratic nominee without a legal education was? It was . . . Jimmy Carter. I thought it would be Mondale, but my guess was wrong. Gore attended law school, but didn’t graduate.

With the Republicans, it is a totally different story. Bob Dole was the last GOP nominee with a legal background. The last GOP president who attended law school was Gerald Ford. Republicans prefer businessmen, military men, and over-the-hill actors, it seems.

What does this mean? It makes perfect sense. Democrats like intellectual types, and put a high priority on communications and legislative skills, probably because they believe in an activist government. Republicans see the world more in terms of money and power; they want tough, practical guys who kick butt and make business deals. Trump is only the most obvious example of that.

All lawyers are not the same. Most of the Democrats who are currently running look and sound more like professional politicians than lawyers. Harris is the exception; with her, you’re always aware of her legal background.

How will this play out on stage during the debates? I don’t know, but it will make for interesting viewing. In any event, at a time when the rule of law is under threat, the notion of an attorney president is somewhat comforting.

Thomas Friedman, who apparently coined the phrase “Green New Deal” years ago, believes that the GND can and should occur within a capitalist economy. AOC and her friends, on the other hand, have hitched a social democratic agenda, including a jobs guarantee and a massive increase in the minimum wage, to the GND. Who’s right?

From the perspective of an economist and a historian, Friedman is. The GND depends on innovation; a rigorously capitalist country provides both the incentives and the wealth for that kind of innovation. Just ask yourself: how many innovative products came out of the Soviet Union, as compared to the US? That’s what I thought.

From a political perspective, the story is a bit mixed. Obviously, a version of the GND which includes a large expansion of the welfare state is a harder lift in red states, assuming the typical electorate, than the Friedman version. On the other hand, you could argue that even the Friedman GND can’t get through the system without the “revolution,” and the “revolution” is implausible without social democratic economic measures. As a result, there is a case of sorts to be made for the AOC approach.

For me, the “revolution” is a fairy tale. The electorate in 2020 is not going to be dramatically different than the electorate in 2016, or any previous election. The mixture of regulation, subsidies, and legislation that is necessary for the success of the GND is perfectly compatible with our current economic system; Obama’s green program included the first two, and almost the third. The winner of the debate, therefore, is Friedman.

If there is one thing that Democrats and Republicans agree on, it is that the 2016 election was a mandate for radical change. And so, the Republicans have offered overt white nationalism and protectionism in addition to their usual mix of regressive tax cuts and regulation in order to appease their base, while the Democratic candidates for president in 2020 will apparently be proposing massive new spending programs and tax increases in an effort to win the white workers back.

The reality of 2016 is far more prosaic:

1. Trump won the GOP nomination because he was unopposed in the white nationalist lane;
2. Trump actually received fewer votes than Mitt Romney in the general election, and lost the popular vote to Clinton;
3. Trump’s reactionary base didn’t succeed in electing McCain or Romney, and they weren’t responsible for his victory, either; and
4. Clinton lost in the Electoral College because swing voters in a handful of states were tired of Democrats after eight years of Obama, and because she was uniquely unpopular, largely due to the e-mail issue.

The key to a Democratic victory in 2020 is not, therefore, to satisfy some huge pent-up demand for expensive new federal programs, but to win back the swing voters who held their noses and voted for Trump in the forlorn hope that he was the brilliant businessman he played on TV. The best way to lose the election is to force those voters to choose between a corrupt, inept narcissist and a wannabe socialist. Based on what I’ve seen of the programs of the Democratic candidates, that is a very real possibility.