Cromwell

As I’ve noted previously, Netanyahu had an opportunity to crush Hezbollah while it was engaged in Syria, but he turned it down, presumably in the belief that a war involving two enemies only worked to his advantage.  However, Assad and his friends have broken the stalemate and won the war.  As a result, Hezbollah is now more of a threat than ever.

The latest odd events involving the Lebanese government have made it clear that Saudi Arabia is perfectly willing to provide diplomatic cover for an Israeli invasion of Lebanon in the Sunni world.  There is nothing to stop the Israelis from using all of Lebanon as a battlefield.  The Trump Administration presumably can keep Iran from intervening directly by promising fire and fury. That means the way is clear for a fight to the finish with Hezbollah.

Will Netanyahu take the bait?  He has the reputation of being a human steamroller in the US, but he has preferred to limit his military actions to the gnat that is Hamas and to use political influence to force the US to solve his Iran problem.  This would be a completely different ball game.   Having said that, south Lebanon is a bit like the West Bank in reverse;  the facts on the ground don’t favor Israel, and are getting worse.  Sooner or later, something will have to be done;  it’s just a question of time.

I’m back.  I will resume normal blogging tomorrow, but I thought I would reflect on my trip for everyone’s benefit while it’s still fresh in my mind:

1.  The Japanese are quiet and obsessively polite.  The Chinese are much more boisterous and have no trouble telling you what they think.
2.  It is actually easier to find fluent English speakers in China than in Japan.
3.  There is a vending machine about every 100 feet in Japan.
4.  American ATM cards reputedly only work in 7-11s in Japan.  Fortunately, they’re everywhere.  On the other hand,  using American credit cards can be an adventure in China.
5.  It’s easier to find a vending machine than a trash can in Japan.  You are apparently expected to carry your trash with you, which is ridiculous.
6.  Chinese taxis are dirt cheap, but you get what you pay for.  Japanese taxis aren’t, and again, you get what you pay for.
7.  Both Chinese and Japanese bullet trains are excellent.
8.  Chinese people in urban areas typically live in cookie-cutter high rises that look like dominoes from the air.  Japanese people in most areas live in single-family homes on tiny lots with no lawn.  I have no idea how they handle surface water management, given the amount of impervious surfaces.
9.  Green space in Japan outside of the mountains typically consists of tiny rice farms near the railroad tracks.
10.  As you would expect, the Chinese have far better ancient history museums.  The Japanese, on the other hand, do a much better job of juxtaposing glass and steel buildings with landscaping.  Their modern buildings are absolutely gorgeous. We could learn a lot from them.
11.  Both Chinese and Japanese businesses are, by American standards, grossly overstaffed.  In China, this manifests itself in lots of people in uniforms looking bored and doing nothing in particular.  In Japan, the excess workers are there to provide a very high level of service.
12.  The beef in Japan is excellent.
13.  You can’t read the NYT in China, and a CNN story on a Chinese dissident resulted in a black TV screen for several minutes.  Otherwise, you don’t really feel the government at all.
14.  Chinese people will occasionally stare at you.  The Japanese don’t.
15.  I’m a giant in Japan, but not in China.
16.  Both countries have high tech toilets.  Simple American toilets are better.

As you would expect, I don’t listen to right-wing radio or watch Fox News. However, it is my understanding that right-wing commentators, by and large, are spending far less time defending Trump than attacking his critics.  That makes sense, from a commercial perspective, because Trump can obviously be difficult to defend, and because the Reactionary train runs on anger, not hope.  There are always plenty of liberal villains to attack, and it keeps the base excited.

Trump governs pretty much in the same way.  Instead of reaching out to his critics and providing a message of hope and unity, he openly bashes everyone who isn’t completely loyal to him and shows his solidarity with his base.

The problem, of course, is that attacking Hillary Clinton a year after the election doesn’t exactly help you get anything done on health care and taxes.  Beating up on cuckservatives and liberals isn’t a governing philosophy;  it’s just a way to divide the country and blow off steam.  And so, the fate of the tax cut will ultimately rest in the hands of GOP senators whom he has gone out of his way to insult.  No one rooting for the tax cut can feel very comfortable about that.

I will be out of the country until November 25.  Regular posting will resume when I return.

Winners

1.  Plutocrats:  True, the top individual rate remained at 39.6 percent, but the overall changes to the tax brackets still result in a cut, and the big picture items are the corporate tax cut, which will enrich shareholders, and the phased abolition of the estate tax.
2.  Upper-middle class people in red states:  The increased standard deduction and the new 12 percent bracket will help.  The 401(k) escaped the chopping block, at least for now.  The SALT and mortgage interest deduction limitations won’t matter much here due to relatively low property values and state taxes.

Losers

1. Upper-middle class people in blue states:  Elimination of most of the SALT deduction and the capping of mortgage interest may result in an overall tax increase for some of these people.
2.  The real estate and development industries:  Demand for expensive housing will be reduced by the SALT and mortgage interest changes.

There is no economic rationale for rewarding upper-middle class people in red states and punishing the same people in blue states;  that’s all about trying to turn blue states red.  I addressed that in a previous post.  I’m sure the decisions to phase in the estate tax repeal and keep the 39.6 bracket will be spun as a preference for middle-class people over the wealthy.  Don’t believe it, because it simply isn’t true.

I don’t know Ross Douthat, but he seems to have a gift for pulling my chain.  His latest provocation was a column in yesterday’s NYT in which he attributes anomie and totalitarianism to the peace of exhaustion and the strengthening of the state which followed the Reformation.

Here are my comments:

1.  Thomas Cromwell was a committed Protestant, not a secular figure who worshiped the state.  His ultimate political failure came when he got too far ahead of Henry VIII on doctrinal issues.
2.  The argument that Catholic imperialism was more benign for the subject people than the Protestant version doesn’t even pass the straight face test.
3.  Douthat believes that the Church, in time, would have found a way to accommodate the political and scientific advances of the Enlightenment.  That conclusion is based on . . . what?  The Church had fought all sorts of heretical movements ferociously and successfully long before Luther;  why would anyone believe that would change in the future?  There was no indigenous Enlightenment among the Sunnis within the Ottoman Empire;  why would a universally Catholic Europe have been any different?
4.  While you can fairly say that Communism is the product of the Enlightenment, it is worth noting that it first took root in a country that didn’t experience the Reformation–Eastern Orthodox Russia.
5.  Today’s international institutions are very limited and purely pragmatic measures that were created to deal with the aftermath of World War II.  They are in no way analogous to the Church, and are not its tepid replacement.
6.  Would you rather live in 13th century Europe than America in 2017?  Would the benefits of an undivided Christendom outweigh the lower standard of living?  I think not.

 

 

Macron developed a center-right program outside of the existing party system and succeeded in blowing the system up.  Could that happen here?

It’s easy to imagine how it could work.  GOP members appalled by Trump and Democrats concerned about the potential costs of a Sanders presidency could come together with a program based on relatively open borders (no protectionism), acceptance of current law on abortion and gay rights, no significant tax increases or decreases, support for climate change regulation, increased infrastructure spending to boost growth, and moderate cuts to entitlement programs.

Is it realistic?  Probably not, for two reasons.  First, the party system is far more entrenched here than it is in France, where the conservatives change their name about every five minutes.  To my knowledge, there is no French equivalent of Fox News or our beloved right-wing talk show hosts.  Second, in order to win, the new grouping would have to coax almost all of the PBP voters away from the GOP without promising them big tax cuts.  I can’t see that happening in the absence of a complete Trump Administration meltdown.

According to the GOP, American businesses are being strangled by high taxes and regulations.  If only we could create a more business-friendly environment, investment and growth would take off, and the benefits would trickle down to hard-pressed working people.  All boats would be lifted by the rising tide.

The story is not conceptually absurd.  It is not difficult to come up with examples of political entities with lots of taxes and regulations that do stagnate in this manner.  It is also relatively easy to imagine yourself in the position of a would-be entrepreneur who just doesn’t think that the benefits of an investment are worth the hassle and the risk in a highly-regulated state.  In other words, it could be true.

There are two problems with the story, however.  First of all, the GOP believes it regardless of the circumstances;  even if the facts don’t bear it out at any particular time and place, they push the narrative anyway.  Second, there are plenty of examples of fast-growing political entities with lots of regulations.  Is China a laissez-faire paradise?  Are the blue states in America growing much more slowly than the red states?  Is there a Mississippi Miracle?  Obviously not.

The bottom line is that you have to view these issues on a case-by-case basis, and there are plenty of factors that affect growth outside of taxes and regulations.  My personal judgment is that the story is largely true as applied to the French economy, but not in the US in 2017.

 

As I’ve noted previously, requiring people to pay taxes on money that legally belongs to someone else makes no sense from an economic perspective.  You might as well tax them on the number of unicorns they own.  The GOP plan to eliminate the deduction has a different basis, however: first, it provides offsetting revenues for their huge regressive tax cut; and second, it is an attempt to impose a small government ethic on blue states.

Assume, for purposes of argument, that the tax cut passes with the SALT deduction either eliminated or highly limited.  What happens next at the state and local level?

1.  Who takes the fall?  There can be little doubt that small government “conservatives” in blue states will be emboldened, and that politics in these states will become more polarized and toxic.  Given that the tax cut can only pass with a razor-thin margin, will the voters respond by trying to remake their systems, or will they simply look to replace any GOP members of Congress in the hope of overturning the tax cut at the federal level?  The latter would be much easier, and is more likely.

2. What gets cut?  Assuming that the GOP plan works and that the blue states start turning red, there will have to be enormous cuts in state and local spending. Notwithstanding the fantasies of some GOP voters, this will not result in a significant reduction in the size of the welfare state, which is driven primarily by federal spending.  Instead, based on what happened during the Great Recession, the cuts will come from:  (a) infrastructure spending (particularly maintenance); (b) the education budget; (c) pensions; and (d) employee salaries and benefits. The first two will damage economic growth, and the third will have a major impact on a large cohort of GOP voters.

There is nothing in the indictment that has any direct link to Trump, his campaign, or collusion with Russians.  On its face, all it proves with regard to Trump is that he has really bad taste in campaign managers.  We knew that already.

The pertinent questions to be answered are:

1.  Does Manafort know anything about collusion that he is willing to sell for a better deal?  I know of no evidence of that, but we’ll see.
2.  Will Trump overreact and do something really stupid, like fire Mueller?  His lawyers will tell him to brush this off, but he isn’t exactly famous for taking good legal advice.

Trump’s victory has caused a power shift within the GOP.   While the Trump tax plan is clearly PBP-friendly, the rest of his agenda is tilted towards the Reactionaries.  Can this situation be reversed in the foreseeable future?

The Reactionaries are clearly the largest faction within the party, although probably not a majority.  I can only see two scenarios in which the PBPs regain control of the party:

1.  A catastrophic failure on the part of the Trump Administration, resulting in a resounding Democratic victory in 2020; or
2.  A proliferation of Trump wannabes run against a single PBP presidential candidate, and lose, in the GOP primaries in 2024.

Both are reasonably possible, but neither is by any means assured.

 

Don’t declare independence over the known opposition of the central government unless you are ready, willing, and able to fight for it.

On the one hand, Ross Douthat despises Donald Trump for all of the reasons that I do.  On the other, he sees a Democratic Party that is unquestionably becoming more secular, and less responsive to religious people like himself, over time. What is he to do?

I don’t agree with Douthat on very much, but you can’t help sympathizing with someone who is left with these two unappetizing choices.  It’s enough to make you look for a political Benedict Option.

How should the Democrats respond to people like Douthat?  Keeping Trump in check is the overriding priority.  For now, at least, it should be all hands on deck.

Our dog Marlowe passed on today.

We loved him more than we can say.

He lived as our child

But for just a short while.

With dogs, that’s the price that you pay.

Bittersweet

We chanced to meet

No point in asking why.

I’m sure you’d say

A better day

Awaits you when you die.

 

You’re here; you’re gone.

We’ll carry on.

We have no other choice.

The house is still

A bitter pill

To never hear your voice.

 

Bittersweet’s

No trick-or-treat.

I know it’s time to go.

But what we’d pay

For you to stay.

Dear God, we’ll miss you so!

The Reactionaries and the PBPs were all in for all of the Obamacare repeal bills: the Reactionaries because it meant taking benefits away from the undeserving poor; and the PBPs because it was a tax cut and deregulation measure. Ultimately, the bills were sunk by an alliance of Democrats, CDs, and CLs;  the first two didn’t think that taking insurance away from millions of Americans was a great idea, and the last didn’t think the bills went far enough in that direction.

Could the same thing happen again with the tax cut?  If the tax cut were part of a budget bill that included massive spending cuts, yes, but that will not be the case. Rand Paul will vote for a tax cut bill that is decoupled from spending issues, and, I suspect, so will Susan Collins, who will be under pressure to prove she isn’t a RINO.

The real issue with the tax cut is whether the GOP can finesse the state and local tax and 401(k) issues to the point where they can get enough votes to pass the bill.  A tax cut bill which actually raises the taxes of millions of GOP voters for the benefit of plutocrats will be a hard sell.  My guess is that the analysis behind the bill will contain enough magic asterisks to permit compromises on these issues, and the bill will ultimately be approved, thereby creating the “Funhouse Reagan” economic scenario I predicted at the beginning of the year.