Cromwell

A real conservative, as I’ve stated many times, is suspicious of change.  When he is forced to deal with it, he assumes the worst, and plans accordingly.  He does his best to make sure that any mistake he might make won’t damage the interests of future generations.

The GOP’s reaction to climate change is precisely the opposite.  Instead of taking small measures now to address a potential future worst case scenario, the GOP believes in living for today, and simply hoping that everything will work out in the long run.

That is their attitude on tax cuts and the deficit, too.  And that is why the GOP cannot be called a “conservative” party under any meaningful definition of the word.

 

The physics of climate change have been understood for a very long time.  The temperature data are unequivocal.   The policy implications are fairly clear and are being felt even today.  The only remaining questions are the precise amount of the temperature increase in the future and the extent to which human activity is responsible.

Climate change imposes costs, whether central government chooses to acknowledge that or not.  They will be borne;  the real issue is, by whom?  From an economist’s perspective, the correct answer would be by the people who cause climate change, and benefit from it.

The following questions are pertinent:

1.  Who benefits from climate change?  The most obvious winners are the owners and workers of fossil fuel industries.  The fact is, however, that everyone who drives a car or uses electricity also benefits substantially.

2.  Who are the parties who will be most affected by climate change?  Residents of areas abutting the Atlantic and the Gulf of Mexico, due to increased hurricane activity;  farmers; residents of the southwestern states, which may become uninhabitable; and residents of western states with major fire issues.

3.  Who currently bears the burdens of climate change?  Taxpayers throughout the country pay for most FEMA operations.  Individual coastal property owners pay for flood insurance, although the taxpayer picks up some of the tab.  Individual property owners also pay for retrofits, sometimes with the help of insurance.  Local governments pay to retrofit threatened infrastructure.

With these facts in mind, it is clear that, if nothing changes, individuals living in the specified areas and local governments will wind up bearing most of the costs, although FEMA operations will become more and more expensive over time.  GOP dogma notwithstanding, therefore, federal taxpayers will be increasingly burdened with these costs whether they are fully aware of it or not.

If the objective is to allocate costs roughly in proportion to benefits, as it should be, the federal contribution should be larger and more transparent.  The obvious way to spread the costs would be through a federal carbon tax.

If you ask Bernie Sanders how he can get his ambitious legislative program through a Congress which is currently controlled by the GOP, and which is institutionally inclined to inertia regardless of who is in power, his answer is “the revolution.”  What he means by that is that the program will have so much appeal to the poor and dispossessed, millions of previous non-voters will register and vote for their economic self-interest, and the blue wave will swamp everything in its path.

Right.  It’s a great theory, but it never actually works.  If you don’t believe me, just ask Bernie why Hillary beat him in 2016.  The millions of new blue voters simply never materialize.

There is an analogous train of thought within the more extreme elements of the GOP, as was demonstrated when Steve Bannon and the RNC started to blast the Koch brothers.  Bannon’s grand strategy for hanging on to power appears to be as follows:

1.  Pump up the base, which consists of the Reactionary plurality within the GOP and any PBPs who are grateful for the tax cut and deregulation.  Everyone else, including independents and disgruntled Republicans, can jump in a lake for all he cares.

2.  Suppress the opposition vote through state legislation, clever gerrymandering, and negative ads.

3.  Hope the Democrats implode and make everything much easier.

That sounds more like a wish list than a strategy.  In addition, it relies on creating and sustaining divisions within the country that are extremely unhealthy.

The fact is that, while Trump’s white working class base gets all of the attention, he won in 2016 because millions of GOP voters who were suspicious of him voted for him, anyway, because they disliked Hillary even more.  Those are the voters who will decide the 2018 and 2020 elections.  Base mobilization, by itself, is not enough to win national elections.

 

I’ve never interviewed Barack Obama, and I probably never will.  If I did, however, it would probably run something like this:

I enter his office, where he is waiting.

C:  Good morning, Mr. President!  Thanks for agreeing to meet with me.

O:  It’s always good to talk with a fellow lawyer.

C:  It’s interesting that you say that, because the thrust of one of my posts was that you approached foreign policy issues in the manner of a litigation attorney–you were always looking for the fastest, cheapest, and least risky way to deal with them.

O:  There’s probably something to that.

C:  My plan is to handle this in two parts.  In the first part, I’ll be asking questions about domestic politics.  Then we’ll take a break, and then come back and talk about foreign policy and the current state of the country.

O:  OK.

C:  I’d like to start by asking you a deceptively simple question:  why did you run for president in 2008?  You certainly don’t come across as someone who needs power to boost his ego, and there were other candidates in the race with better paper qualifications.

O:  Chuckles slightly.  I thought the country needed me.  I thought I had a unique ability to bring the parties together.  I thought Hillary, for all of her good qualities, was a divisive figure, and I figured I had a better chance to bring the country together.

C:  At the risk of sounding like Sarah Palin, how’s that working out for ya?

O:  With a wry smile.  Obviously, my efforts to bring the country together were a failure.  There’s nothing about my presidency that I regret more than that.

C:  Why do you think that happened?  Was there anything you could have done, but didn’t?

O:  Well, a few of my comments, like the “bitter” line, were a mistake.  Mostly, however, I underestimated the cynicism of my opponents, and how hard the job was.

C:  My theory is that everything about you–and I don’t just mean being an African-American–didn’t play well with rural America.  You were cool, well-educated, and cosmopolitan.  You liked Jay-Z.  You were quintessentially urban.  There was nothing you could do about that.

O:  There’s probably something to that, too.

C:  Did you perceive that you had any major policy differences with Hillary?

O:  No.  On the one issue we did have, the individual mandate, I wound up agreeing with her.  It was all a matter of personalities and approaches to government, not policy.

C:  If she had been elected in 2008 instead of you, do you think the country would be very different today?

O:  Probably not, although our approaches to foreign policy were somewhat different.

C:  Let’s move forward to 2009.  I have always thought that the auto company bailout had to be one of your most difficult decisions, because it didn’t touch anything that you discussed during the campaign, and there was no template for it.  Do you agree?

O:  Absolutely.   All of my instincts told me not to do it.  On the other hand, it was clear that if the car companies failed, millions of jobs were going to disappear, and if we learned one thing from FDR, it was that you had to throw away the rulebook and be willing to try unusual things to keep the country afloat in a crisis.  That’s what we did, and I don’t regret it.  The recession might have turned into a genuine depression if we had taken the easy route and done nothing.

C:  I personally view the bailout as a huge accomplishment.  The country didn’t even lose much money on it.  Do you agree?

O:  Yes, absolutely.  Although it just encouraged Fox News to call me a socialist.

C:  Then there’s the stimulus.  You know that people like Paul Krugman are critical of you for not advocating a much larger stimulus.  How do you respond to that?

O:  If we had had better information about the state of the economy in real time, and if we had had GOP support for a greater stimulus, then he would have a point.  Neither of those things was true.  We did the best we could under the actual conditions we had.

C:  Were you surprised at the lack of GOP support for your agenda?

O:  Yes.  I knew about McConnell’s statement about making me a one-term president, but I really thought the Republicans would learn something from the election and work with me to solve our problems.  Obviously, that didn’t happen.

C:  In retrospect, should you have been tougher with them earlier on?

O:  Not in 2009.  My brand, as it were, was to bring the country together.  It would have been hypocritical of me to turn into a partisan before I tried everything else.  Besides, I actually believed what I said in the campaign.  You can make a case that I should have been tougher on them after 2010, though.

C:  What do you think about the process of approving ACA, in retrospect?  Could it have been done more smoothly?

O:  I’m sure we made some mistakes, but the bottom line is that passing important legislation is an inherently messy business.  Just look at the mess that the Republicans have made on health care and tax reform.

C:  Is there anything you would like to change about the legislation itself?

O:  It would have been better with a public option, but that wasn’t possible.  The votes weren’t there.

C:  Some critics have suggested that it was a mistake to spend so much energy on health care so early in the process.  Do you agree, in retrospect?

O:  No.  Health care was, and is, a huge issue for working and middle class people in this country.  The Democratic Party has been determined to fix it since Truman was president.  I don’t regret making it such a high priority.  It made a difference in the lives of lots of people.

C:  Any regrets about cap-and-trade?

O:  I’m afraid it’s a problem without a practical solution.  The GOP won’t vote for it because it’s a regulation, and it affects the financial interests of their core supporters.  Democrats from energy-producing states won’t vote for it, because it would be political suicide.  The two put together are an unbeatable force.

C:  My guess is that you’re proud of what you did with energy investments and regulations.  Am I right about that?

O:  In the big picture, I’m afraid we didn’t do nearly enough to deal with climate change.  That said, I pushed the envelope as far as I could, and I think the investments and regulations helped.  I don’t think Trump can reverse that, no matter how hard he tries.

C:  Were you surprised by the outcome of the 2010 election?

O:  Mildly, yes.  But change is hard, and the economic improvement was slower that we wanted.  In retrospect, it wasn’t really surprising at all.

C:  Let’s talk about the Grand Bargain.  The current theory is that the deficit doesn’t matter, and that the whole idea of entitlement reform was a big political mistake, because it demoralized the base.  Do you agree?

O:  People say that today because the Social Security and Medicare trust funds aren’t broke yet, and because interest rates are still low.  We’re not paying a price for the deficit yet.  That won’t last forever, and then what?  The issue may be sleeping, but it’s not dead.  Plus, we would have gotten some badly-needed infrastructure improvements out of the deal.  I would try it again.

C:  Did anything about the 2012 election surprise you?

O:  I wasn’t surprised that Romney was the nominee.  I admit that I was taken aback when I called him out for lying about his tax plan during the first debate, and it didn’t work.  Other than that, no.

C:  If Romney had won in 2012, we would probably be in his second term today, instead of Trump’s first.  Would the country be better off?

O:  Much as I hate to admit it, you could make a case for that.  Romney would have been competent, and he wouldn’t have tried to split the country apart.

C:  Your second term was characterized mostly by unilateral action in the face of legislative gridlock and inaction.  You have been criticized for Caesarism for doing that.  How do you respond?

O:  I learned two things from my first term.  One, the only way you could get Republicans to do anything positive was to create leverage.  And two, doing nothing just demoralized my supporters–it didn’t win any goodwill from the other side.  And so I pushed the envelope as far as I could.  But we always tried to stay within the limits of the law.

C:  Are you concerned today that those efforts helped open the door for the right-wing equivalent?

O:  Yes, but what else was I supposed to do?  Watch the dream wither and die?  Be Herbert Hoover?  That’s not me.

C:  With that, it’s time to take a break.

On the ex-campaign manager Paul.

It appears that he should have called Saul.

Will Trump pardon him then?

What’s a crime among friends?

Will he end up just taking the fall?

It has been widely reported that the Europeans have a scheme in dealing with the White House in which Macron plays the good cop and Merkel, the bad cop.  It clearly doesn’t work in the real world, but at least it makes sense in theory.

The question for today is, if the Trump administration wants to try the same game, how does it work?  There is no shortage of candidates for the bad cop role, but who in this government can plausibly play the good cop?  Trump?  Pompeo?  Bolton?

So Trump has a friend known as Paul.

They’re a match with corruption and gall.

“Lock her up!” they both cried.

So it’s just, in my eyes.

He’s the one who’s behind the eight ball.

I wish someone would tell Trump that this phrase makes no sense.  The word “rigged” is only intended to apply to some sort of a competition whose outcome has been unlawfully predetermined.  A “witch hunt” is not such a competition.

The Mueller investigation could in theory be a  “witch hunt,” but it can’t be a “rigged witch hunt.”  The revelations and the guilty pleas that have arisen from it prove my point.

To the average person, “draining the swamp” means reducing the access and power of lobbyists, and eliminating corruption in government.  To Trump, it clearly means no such thing;  lobbying activity in Washington, by all accounts, has increased, and the amount of inappropriate self-dealing by Trump and his officials has reached levels never before seen in my lifetime.

So what did he mean by “draining the swamp?”  In retrospect, we can see that he meant the destruction of prevailing political and ethical norms, and the firing of anyone who dares to use the law to stand in his way.

Trump maintains that the Manafort trial has nothing to do with him, which, on its face, is completely true.  He also argues that Manafort was only his campaign manager for a very short period of time, which isn’t.

If you accept his statements as true, then why is he going ballistic about the case and demanding that Sessions immediately fire Mueller–something he knows isn’t going to happen, given that Sessions’ one slightly redeeming quality is his sense of professional ethics?  Why doesn’t he just ignore the trial if it has no legal implications for him?

It’s a question with significant ramifications.  One hopes Mueller answers it for us.

There are obvious similarities between the American election of 2016 and the outcome of the Brexit referendum.  In both cases, right-wing populists raging against technological changes, globalization, and immigration prevailed over a more cosmopolitan establishment.  In both cases, chaos has ensued, just as the establishment predicted.

The difference is that the British government is trying to ride out the chaos, with very limited success.  Trump, on the other hand, revels in being a chaos agent.  America is now an unapologetic force for instability throughout the world.

Neither will end happily.  It’s just a question of how well the damage can be contained between now and then.

Predictably, Brexit is turning into an economic and political disaster for the UK.  Economically, it has led to uncertainty, a loss of investment, and reduced growth; politically, it is likely to result in the demise of the government sometime between now and the 2019 deadline, and could ultimately put Corbyn in Downing Street.

The paradox is that right-wing populist victories elsewhere in Europe are moving the EU away from “ever closer union” and back to a looser coalition of nation-states with different values and political systems.  When it is all said and done, Brexit may well prove to have been unnecessary as well as damaging.

As the saying goes, you campaign in poetry, but govern in prose.  Both the balance and the sequence are important.  If you can’t master the poetry part, you turn into Hillary Clinton:  an uninspiring candidate with a laundry list of modest ideas who can’t win an election.  If, on the other hand, you can’t deal in prose, you wind up like today’s GOP;  having made unrealistic, contradictory, and essentially dishonest promises to the electorate, you have no idea of how to keep them once in power, and you accomplish very little.

The key for the Democrats in 2020, therefore, is to nominate someone with sound and politically possible ideas who can nonetheless inspire the voting public.  What would such a platform look like?  Here are some ideas:

1.  Medicare for More:  Obamacare has helped with the cost of health insurance and co-pays, but not nearly enough for many middle- and working-class people.  An actuarily sound program permitting people to buy into Medicare, with higher subsidies, could help a lot.  As I’ve noted before, Medicare for More doesn’t create the same political objections as single-payer, it is based on an existing and popular program, and it doesn’t have the same impacts on the budget.  It has a reasonable chance of passage.

2.  Increase the EITC:  A working class tax cut would have some support from the GOP, and would help to reduce inequality.

3.  A modest increase in the minimum wage:  The EITC is a better way of improving the lives of struggling workers than the minimum wage, since it doesn’t require any interference with the market, but a modest increase, based on the available data, wouldn’t cost jobs, and would be popular.

4.  Greater antitrust enforcement:  Stagnant wages may be tied in some cases to an increase in market power on the part of a handful of firms.

The first two could be paid for by increasing the corporate tax from 21 to 25 percent, and by getting rid of the egregious pass-through entity deduction that serves no obvious economic purpose.  It would not require the complete repeal of the Trump tax cut.

If you think this list is too modest, remember one other thing:  one of the benefits of having such an obnoxious president is that it should be possible to inspire the base in a colorful way without having an irresponsible platform.

Steve Bannon apparently has been ripping the Koch brothers–telling them to get with the program, or else.  The Kochs do not seem overly impressed.  Why is that?

You shouldn’t be surprised.  The Kochs are CLs; they believe in a radically smaller state, which excludes tariffs and stronger immigration controls.  That is obviously in their economic self-interest, but, to be fair, they have also shown strong concerns about issues such as criminal justice reform that have no direct impacts on their bottom line.  Bannon, for his part, is a Reactionary; he wants a swaggering, more powerful state that showers benefits on white native-born Christians and kicks everyone else’s butt.

The two mix like oil and water.  They are only part of the same party because they both hate and fear the libs.

The following statements are, I believe, demonstrably true:

1.  The EU’s tariffs on American goods are, on the whole, roughly the same as American tariffs on EU products;
2.  American trade deficits with EU countries are due, not to disparities in tariffs, but to other economic factors–most notably, differences in savings rates; and
3.  One of the few consistent and genuine (albeit extremely stupid) ideas Trump has espoused throughout the years is the notion that countries with large trade surpluses with America got them by stealing our money.

Some commentators and members of the administration are taking the position that Trump is using thuggish, but justifiable tactics to advance a radical free trade agenda with the EU.  If my premises are true, completely free trade will not in any way eliminate trade deficits and thereby accomplish Trump’s ultimate objective of returning ill-gotten wealth to the US.  As a result, I can only conclude that the argument about Trump being a free trader is false, and that his objective must really be managed trade, not free trade.