Richard Milhous Trump

The political commentariat has spilled a lot of ink trying to understand what the Trump phenomenon is all about. But no one has come up with a convincing story about why it is that candidate, and then President Trump has managed to break every rule in the book with near impunity. Perhaps it is because the rules he breaks with such obvious delight were designed for a very different day and age, with very different sensibilities.

I submit the Trump phenomenon is not primarily about politics; it is about culture. He is, unfortunately, representative of the current damaged state of American culture. Consider for a moment, Mr. Trump’s behavior and his policy agenda and think about when we have seen this before.  Most recently it was the backlash against the cultural revolution of the 1960s that propelled Richard Nixon into the White House. 

Trump’s behavior is routinely crude, juvenile, narcissistic and authoritarian. It is Manichean; driven by class consciousness, complete ignorance of economics  and a whole-hearted disdain for political and social norms. His “America First” policy agenda champions exclusion rather than assimilation. It rests on the delusion that building physical, financial and administrative barriers between the United States and the rest of the world will bring back the mythical America of the 1950s.  It is a zero-sum game. The Sharks versus the Jets. Differences are solved with fists. 

The America First urge is nothing new in American politics; it has always lurked a bit under the surface. There are however two differences this go around. First, during previous bouts of isolationism America was a bit player on the world stage. Second, Donald Trump has managed to do what no other politician has done before. He built a coalition that capitalized on populism and isolationism. He combined the Midwestern prairie populism of South Dakota’s George McGovern with the Southern populism Alabama’s George Wallace. By combining the two he captured the electoral college (although not the popular vote) without the votes of upmarket coastal elites and ethnic minorities, both of which are concentrated in urban enclaves. 

 

Barring some catastrophic political error (to which Trump seems strangely immune) it will be difficult for someone to upend his coalition. His backers have made an emotional and class based commitment, not a policy based one. This makes them difficult to dislodge, particularly when the opposition keeps on insisting that Trump voters are Neanderthals. Deplorables as Mrs. Clinton put it. Consequently the 2020 Presidential election is starting to shape up like the 1972 contest between George McGovern and Richard Nixon. 

When George McGovern won the 1972 Democratic nomination, he led his party sharply to the left, and then went on to carry Massachusetts, losing the other 49 states to Richard Nixon. McGovern’s capture of the Democratic Party with his call to “Come Home America” led it into the political wilderness for 2 decades until Bill Clinton captured the White House for the Democratic Party in 1992. Note that Jimmy Carter’s narrow 1-term victory was an aberration, the result of disgust with President Ford’s pardoning of Richard Nixon. 

As President, Nixon extended Lyndon Johnson’s welfare state, created affirmative action, imposed wage and price controls, and made detente with the Soviet Union a core element of U.S. foreign policy. At the same time he derisively referred to William F Buckley and California Governor Ronald Reagan as right wing troublemakers and elitist idealogues. Sound familiar?

Nixon co-opted Wallace’s blue collar populists and appealed to the patriotism of middle class voters. These were the voters he called the “Silent Majority”; voters who were not necessarily political conservatives, but who resented what they saw as the condescension of liberal elites. That ought to sound familiar as well. 

Meanwhile, like before, the Democratic Party is veering sharply left. And like before the Republican Party is either supporting or remaining silent about Presidential policy initiatives (like tariffs, deficit spending and industrial policy) that it had previously professed to abhor. Which is to say that both parties have turned sharply left in favor of more central planning; the question is one of degree, not direction. Just as under Nixon.

What separates Trump from Nixon is Trump’s ignorance as well as his outlandish and typically boorish public behavior. In fact, his profanity laced stream-of-consciousness speeches may be one factor that cements the tie between Trump and his fans. He talks like them; he is one of them. He is not a “suit”. Far from being a liability, his coarseness may be a political asset, at least in the short term. 

For some reason or other a lot of conservatives who used to quote Toqueville and Burke about the importance of the pursuit of virtue to the political health of a society seem to have lost their old speeches. Not that progressives are much better; quite a few including Kamala Harris, Tom Perez and Kirstin Gilibrand deliberately use profanity to develop “street cred” with the base. Bill Clinton’s town hall discussions about his underwear preferences now seem positively demure. So it should be no surprise that public discussions of policy issues are often fact free affairs framed in language designed to appeal to the prejudices of the audience. 

But the sloppy (at best) and often vulgar language used by politicians is detrimental to the health of civil society, social order, decency and compromise. It is also an indicator of sloppy thought. And it leads to bad policy, which often produces awful results. In this regard it is worth taking a trip down memory lane to recall some of Nixon’s policy making, which bears more the a passing resemblance to Trump’s.  

It is, for instance, well worth remembering that Nixon’s economic policies which included wage and price controls and attacks on the independence of the Fed, produced the runaway inflation of the 1970s. It ultimately resulted in severe stress in the financial system, a recession in 1973 – 1975, a severe stock market downturn, stagflation and commodity shortages. In fairness, it wasn’t entirely Nixon’s fault; he had plenty of help from successors Jerry Ford and Jimmy Carter who followed the same types of awful policies. 

With their protectionism, unrestrained spending and redistributionism, both major parties are planting the seeds for a return to the 1970s.  It is (or ought to be) clear that, while Trump is a problem, he is not the problem. He is symptomatic of a damaged culture that is infecting our political and civic institutions. The problem will last beyond Trump’s exit from center stage, just as it did with Nixon’s. 

The challenge is to rebuild the culture. That is a lot more difficult than winning elections. 

 

JFB

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SCOTUS Watch

The Federalist Society, scourge of the “living Constitution” and defender of liberty, provided in 2016 a list of 25 candidates it preferred as nominees for the Supreme Court. Whereupon candidate Trump announced, with a lot of fanfare and a little wiggle room, that he would select nominees from that list were he to be elected. His first nominee, Neil Gorsuch, was on that list and he now sits on the high court. 

Now that Justice Kennedy has announced his resignationTrump has another nomination to make. Reportedly his top 5 potential choices are all from the same list. At the top of the list is Brett Kavanaugh, who has a 47% chance of being selected according to Predict It, a political futures market. That the Federalist list dominates the selection process is cause for relief, and not just because the jurists on the list are first rate. It is also clear that the President, left to his own devices, lacks the capacity to make an informed selection. 

Nominee Prediction Markets

 

To the surprise of no one, the Senate vote counting has begun and progressives are already howling. They appear to be afraid of three things. First, that Roe v. Wade may be overturned (it should be). Second, that the Court will continue along its present path of defending the First Amendment, which is under relentless attack by progressives. Third, that the Court will begin to rein in the Administrative State by eliminating the judicial doctrine of Chevron deference when adjudicating disputes over the interpretation of regulations.    

Let us take a brief look at each of these policy areas. 

Roe v. Wade

In the matter of Roe, it is almost universally understood that the case was wrongly decided. The Court basically decided that women ought to have a right to abortion and set about creating that right out of whole cloth. In so doing it dispensed with democratic processes, imposed an abortion rights regime on the entire nation by judicial fiat and set the stage for the culture wars of the last 5 decades. The United States now has the most radically permissive abortion regime in the West. 

Note too that Roe was based on the idea of a right to privacy, which was first discovered in Griswold v Connecticut. In that case the Court voted 7 -2 that Connecticut’s Comstock law violated the “right to marital privacy”. That’s right: marital privacy.  By 1972 in Eisenstadt v. Baird, the Court extended the right to unmarried couples. In 1973, Justice Potter Stewart cited Griswold and Eisenstadt in support of Roe. By 1992, in Planned Parenthood v. Casey, the Court found a liberty right to abortion under the 14th amendment, holding that states could not regulate abortion if it created an “undue burden”. Using this test, the court invalidated the requirement of spousal notification. 

All along the way, the Court continued to shift the decision criteria until we arrived at where we are today, which is abortion on demand at any time. Note too that while Griswold began with the right to marital privacy, the Court wound up invalidating a requirement of spousal notification of the intent to procure an abortion. Moreover the ever changing rights granted in the abortion regime are rights created by government, unlike the rights in the founding documents which are based on natural law, not positive law. 

And therein lies the rub. In the progressive universe, positive rights are created and dispensed by government. There is nothing sacrosanct about them. They are rooted in fashion, not philosophy. Which leads us to the First Amendment, now under assault.

The First Amendment 

The assault on the First Amendment is most visible in the Universities where speakers who espouse unpopular points of view are shouted down, ostracized and sometimes assaulted for expressing (or attempting to express) those points of view. And it extends to Trump, who has encouraged the use of violence to silence his critics. So what is the genesis of all this?

A good way to get a read on it is to refer to an article published by the New York Times on Saturday, June 30, 2018, titled “How Conservatives Weaponized the First Amendment”. A link to the article is here. 

The intemperate language of “weaponization” comes from none other than Justice Kagan in her recent dissent in Janus v. AFSCME. In her dissenting opinion she referred to her colleagues as “black-robed rulers overriding citizens’ choices”. It is difficult to ignore the irony of Kagen’s reference to “citizens’ choices” when, on First Amendment grounds, the Court held that public sector union members could not be compelled to financially support policies with which they disagreed. But, Kagan said, “the First Amendment was meant for better things.” 

Perhaps unwittingly, Justice Kagan revealed her preference for conferring command and control powers on an unfettered bureaucracy when she went on to say that the Court’s majority “…Weaponiz[ed] the First Amendment in a way that unleashes judges, now and in the future to intervene in economic and regulatory policy.” Well, judges have been intervening in economic and regulatory policies for at least a century. But more importantly, Kagan reveals an instrumental view of the First Amendment. She is perfectly willing to abandon free speech and free association (which includes the right not to associate) in support of compelled speech as long as doing so leads to her preferred outcome. 

On the progressive left, this is now becoming a fashionable way of thinking.  Consider this remark byProfessor Lewis Michael Seidman as reported by the Times in the above referenced article. 

“When I was younger, I had more of the standard liberal view of civil liberties,” said Louis Michael Seidman, a law professor at Georgetown. “And I’ve gradually changed my mind about it. What I have come to see is that it’s a mistake to think of free speech as an effective means to accomplish a more just society.”

Again we have the instrumental view. Free speech is just swell as long as it produces a “more just society”. The obvious question is: who will be the arbiter of what constitutes a “more just society”? And who will decide what speech advances the cause? How will the speech police punish malefactors? And how, exactly, does that protect minority rights? And not to make too fine a point of it, according to the founding documents of the U.S., speech rights inhere to the individual having been endowed by the Creator. There is a reason why the First Amendment is the first amendment. The government’s responsibility is to secure those rights, not pick and choose who exercises them. 

Which leads us to the doctrine of Chevron deference. 

Chevron deference essentially says that agencies, not the courts, are the primary interpreters of the meaning of statutes administered by agencies. Chevron deference requires the courts to accept an agency’s disputed reading of a statute, even if that reading differs from what the court believes to be the proper reading. The theory is that agencies—not the courts—have the necessary expertise to do so across the federal bureaucracy. Moreover, it is argued, by leaving this responsibility with professionals in the bureaucracy the Chevron doctrine reduces partisan political behavior by judges. 

In a paper published by the Federalist, Christopher J. Walker finds some evidence that suggests this last point may be correct. (Here is a link to the article). By restraining judicial discretion, Chevron may have reduced partisan political behavior by judges. Then again, it may have succeeded in simply relocating that partisan behavior to the bureaucracy. That aside, Chevron undoubtedly transferred significant power to the bureaucracy at the expense of the Congress. And it also increased Presidential regulatory power at the expense of the Congress—witness both the Obama and Trump administration’s reliance on governance by executive order. 

The maintenance of a vast bureaucracy (with some agencies having police power) that acts at the order of the President is the essence of a command and control framework that is central planning in everything but name. Not only are the individual agencies vulnerable to capture; the system invites corruption in part because it lacks meaningful oversight and accountability. The agencies themselves are easily co-opted by partisans to be used as means to partisan ends; not only that—sometimes the staffing at an agency makes it a de facto lobbying group for outside interests.  These are not easily correctable flaws; they are baked into the architecture of the Administrative State. 

This is simply untenable; the Administrative State has to be cut down to size. One way to do that is to substantially weaken (if not eliminate) Chevron deference as judicial doctrine. The likely result would be a more accountable (or less unaccountable) federal bureaucracy; a reduction in executive power, and an increase in legislative power and accountability. All to the good.

In short, cases in three important issue areas are almost certainly going to come before the court before too long. One will be a challenge to the constitutionality of Roe v Wade. Another will include cases likely to challenge First Amendment rights respecting freedom of speech, freedom of association and the practice of religion. A third will call into question the Chevron doctrine and the relative power of the bureaucracy vis-a-vis the elected  branches and the Judiciary. A strict constitutionalist would find that Roe was wrongfully decided; that the First Amendment means what it says, and that the United States is a Republic in which laws are written by duly elected legislators, not the bureaucracy. Finally, a strict constitutionalist would be one who understands that the government is charged with securing the rights specified in the Declaration of Independence, using powers granted by the Constitution, and only those powers.  

A constitutionalist approach to these issues is a dagger pointed at command and control—the beating heart of modern progressivism. We shall soon see if Trump appoints a constitutionalist and what measures the left will take to torpedo such a nomination, if it occurs. 

JFB

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Unending Hypocrisy

To say that, in general, politicians are hypocrites is both incontestable and trivially true. Hypocrisy describes a behavior engaged in by almost all human beings, politicians among them. A more interesting question concerns specific instances of hypocritical behavior; instances that have the potential to provide deeper insight into the offenders. For that we turn to the case of Gina Haspel who was nominated by President Trump to be the new Director of the CIA. 

Needless to say #The Resistance is ablaze with outrage over the nomination. Haspel, they say, condoned torture, making her uniquely unfit to be CIA Director. 

Let us put this in context for a minute. Nancy Pelosi as ranking member was informed about what the CIA prefers to call “harsh interrogation methods” a full 3 months before Haspel even knew about them. One can search the record in vain to find objections to the program by Pelosi at the time (September 2002). Pelosi’s objections came years later after the public turned against the Iraq war and the existence of the program was leaked to the New York Times. Moreover the Congresswoman who objected to the program did so on the record and in writing when she found out about it. That Congresswoman was California Democrat Jane Harman whom Pelosi subsequently pushed out of Congress. 

And then there is the case of John Brennan, now a resistance icon who was running the CIA when all this was going on. (Error correction: John Brennan ran the CIA from 2013 until the end of the Obama Administration. That said, during the Bush years he support the rendition of terror suspects to other countries like Egypt where they were tortured. And, interestingly enough, in 1976 he voted for Gus Hall for President. Gus Hall was the nominee of the American Communist Party). Somehow or other the taint from all this doesn’t apply to him. Or to his buddy James Clapper over at the NSA who perjured himself before Congress at least twice. Brennan probably committed perjury only once. But they are full fledged members of the resistance and they both probably, almost certainly, had their hands in the corruption of law enforcement and intelligence agencies in order to serve domestic political goals. 

Last but not least let us consider the case of the most sanctimonious of the lot. That would be President Obama. He did not order or condone torture; his tool of choice was summary execution. Every day, as reported by the New York Times, President Obama was presented with a “kill list” of terrorist subjects that included American citizens. And Obama would give the OK for the ones to be executed by drone attack. No indictment, no trial. Just a hellfire missile. 

It took a filibuster by Rand Paul (R. KY) on the Senate floor to persuade the Obama Administration to concede that the President lacks the legal authority to order the summary execution of American citizens on American soil. But the Administration never did concede that it lacked authority to launch drone attacks on American citizens on foreign soil. Which makes the outrage over Vladimir Putin’s various assassinations of Russian citizens (and ex-citizens) on foreign soil kind of puzzling. It would seem the objection is not to summary execution per se, but to who is doing the killing. 

Remember that the next time the #Resistance drones on about the Rule of Law; their devotion to the concept appears to be rather opportunistic and selective.

JFB

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Trade Wars

In the wake of Donald Trump’s decision to impose tariffs on “foreign” aluminum and steel products, Gary Cohn decided to resign his post as head of the National Economic Council. In that position, he was nominally the President’s top economic advisor. Reportedly Cohn, a Democrat and free-trader, had argued strenuously against the tariffs. Opposite Cohn was Peter Navarro, also a Democrat, who staunchly opposes free trade. In the end Trump decided to make the lunge toward protectionism that he promised during the campaign.

With the exit of Cohn, Peter Navarro is the undisputed architect of Administration trade policy. By way of background, Navarro is a professor emeritus of economics and public policy at the University of California, Irvine. Navarro, who earned his PhD from Harvard, has called for increasing the size of the U.S. manufacturing sector, setting high tariffs and repatriating global supply chains. Most importantly, he doesn’t want you to buy anything from China. Ever.

In 2006, he wrote the “Coming China Wars” which Donald Trump lists as one of the most important books he has read on China. (Permit me to be skeptical about a Trump claim to have read anything more advanced than a Marvel comic book, let alone a policy book without pictures). In 2012 Navarro published the next installment of his anti-China series with “Death by China”. He is considered by mainstream economists to be “heterodox”, which is a polite way in academia to call someone a crank. Which indeed he is, making him perfectly qualified to be a Trump economic advisor.

Economists across the political spectrum understand the power of trade to improve peoples’ lives through efficiencies gained from comparative advantage. That idea was first developed by the English economist David Riccardo in 1817. Basically, the law of comparative advantage posits that in international trade countries should produce and export goods in which they have an efficiency (comparative) advantage. Further, they should import goods from other countries where those countries have a comparative advantage. Doing so makes both countries winners because land, labor and capital are used to their best advantage. As a result, each country produces and consumes more than it ordinarily would have had each chosen to go it alone.

Time and again international trade has been shown to be a powerful force for improving peoples’ lives by expanding markets and opportunities. And time and again, politicians and demagogues have railed against free trade, believing, or professing to believe, that it is a zero-sum game. Some politicians may actually believe this for some reason or other. More likely, they have been bought off by constituent groups and other special interests looking to be protected from market competition.

It is true that Mr. Trump campaigned as a trade restrictionist, so no one should be surprised at his tariff announcement. Then again, he promised to do a lot of stupid things and this is just one of the lot. On that score, it is worth taking note that Mr. Trump’s trade policies are indistinguishable from those espoused by Bernie Sanders (D. VT), Sherrod Brown (D. OH), and Hillary Clinton (D. who won’t leave). It is also at odds with 30 plus years of Republican orthodoxy.

It is always dangerous to assume that underlying a Trump policy pronouncement there is some coherent set of beliefs. This time Trump may have convinced himself that it is possible to simultaneously (1) de-regulate the domestic economy, (2) re-regulate international trade, (3) run large budget deficits and (4) keep inflation under control without sending interest rates soaring, the dollar reeling, (5) all the while maintaining solid  economic growth. Unfortunately for Mr. Trump, it is not even remotely possible to do this. We already tried it once. It didn’t turn out well.

The attempt was made to do something like this in the aftermath of World War 2 with the adoption of the Breton Woods agreement. But for the system to work, it had to have a guarantor. That guarantor was the U.S. But the whole system came crashing down in August of 1971, weighed down by its own contradictions, when the U.S. slammed the gold window shut and refused to continue on as the system guarantor. The net result of this gargantuan policy failure was a decade of very high interest rates, soaring inflation, sagging stock prices, a collapsing dollar, long lines at the gas pump, wage and price controls, and high rates of unemployment, just to name a few of the less than charming events of the era.

Donald Trump is flirting with creating the same conditions that led to the disaster of the 1970s. Except that last time, we didn’t have the huge budget deficits and accumulated debt we have now. Nor did entitlements and debt service consume 70% of federal spending. Perhaps now the Congress will awaken from is slumber and assert itself before it is too late. It could start by restricting Presidential power to impose tariffs without a vote by Congress.

JFB

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The EU Again

In a remarkably destructive bit of policy making, the EU announced that it will not sign any agreements with countries that are not party to the Paris Climate Accords. That includes free trade agreements. And of course, the country in the EU’s gunsights is none other than the United States. Which means that the EU has told the U.S. in no uncertain terms that in order to trade with Europe, America must surrender its sovereignty to the central planners that populate the EU bureaucracy.

Fat chance.

Issue linkage is a tool commonly used by diplomats to get to agreements that might not otherwise be reached. The log rolling inherent in this sort of thing allows each side of a negotiation to come out claiming victory, thus greasing the skids. This however is something entirely different. It is an ultimatum. As such, it sets up a test of wills that structurally resembles a game of chicken in which each side has an incentive to escalate rather than resolve the conflict.

In this, the EU is rather obviously overplaying its hand, and the consequences could very well be catastrophic. Consider the fact that various forms of nationalism are sweeping the globe, so that very few politicians have an incentive to be seen as neo-liberals to begin with. Britain has already had its Brexit vote; Macron has conceded that if France had a referendum on the EU, French citizens would vote to withdraw; Scotland is once again making noise about exiting the UK, and Spain only managed to keep the Basque region from seceding by the use of police truncheons.

Also consider what the U.S. response to all this may be. Donald Trump for one has already made clear that he has little use for either free trade or NATO. Suppose his response is to escalate further and say that the U.S. is just fine without a trade agreement with the EU, and by the way, the U.S. is going to begin withdrawing troops from Germany in preparation for leaving NATO. Without benefit of the U.S. nuclear umbrella, Europe can feel free to devise its own foreign policy for dealing with the Russian Bear, a prospect that Vladimir Putin would surely relish. That this would be a geopolitical catastrophe is an understatement.

The irony of all this is that it probably has little to do with the purported issue of climate change. Over the last several years the U.S. has become the largest energy exporter in the world, largely due to fracking. The U.S. is now largely “energy independent” in that it exports more than it imports. And because of fracking U.S. manufacturing has developed significant energy cost advantages over European firms. The EU’s latest gambit probably represents old fashioned protectionism gussied up as concern over the never quite defined issue of climate change.

Regardless of motive, the EU’s announcement was reckless in the extreme and could very well have far reaching consequences whose deleterious effects are likely to fall most heavily on the Europeans themselves, and stay with us for a long time. That, after all, is the story of European colonialism, and World Wars I and II. Perhaps they should give up playing empire and mind their own back yard which is in serious need of repair.

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The Great Washing Machine Threat of 2018

Donald J Trump, certified stable genius, has launched his trade war. He has done so to protect America from the clear and present danger posed by foreign made washing machines and solar panels. To this end he has decided to impose added taxes on their purchase. The result is that the prices of washing machines and solar panels will be higher than they would otherwise be, thus reducing the quantity sold. Effectively, the tax will be paid by consumers in the form of higher prices and by workers who lose their jobs as a result of reduced consumption.

What is fascinating about this particular piece of policy idiocy is that it runs exactly opposite the (correct) economic reasoning that went into the recently passed reduction in the corporate tax rate. Which is to say that corporations do not pay taxes; they merely collect them. Consequently, a reduction corporate taxes benefits the corporation’s owners (stockholders), workers and customers in the forms of higher returns to capital, increased wages and lower prices. About this there is little dispute among economists; the only question is the distribution of the benefits.

In the process of making America great again by saving us from the scourge of foreign washing machines the Trump Administration has apparently forgotten the logic of its own tax bill. Increasing taxes on washing machines and solar panels will simply raise prices and costs while reducing consumption, thus punishing workers, consumers and stockholders.

The Trump Administration has barreled ahead with this because it views trade as a zero-sum game (which it manifestly is not). Trade is a plus-sum gain in which each side benefits. After all these are voluntary transactions. People and firms do not continue to engage in transactions that make them worse off. Only governments do that. Moreover there are positive spillovers from trade in the form of faster economic growth coming from increased efficiency in the allocation of capital.

What is especially striking is Republican silence in the face of this. In the very recent past Republicans were ardent free traders. That apparently has gone by the boards, as has the Republican insistence that character matters. Perhaps the Republican Party is reverting to its prior preference from the 19th century for tariffs designed to protect domestic businesses from foreign competition. Back then it was the Democratic Party that had adopted the more hands-off approach, at least until FDR and the New Deal arrived on the scene.

And to boot, Treasury Secretary Steve Mnuchin has now decided to start talking down the dollar in FX markets. This is simply the beginning of an attempt to lower the prices of American goods in foreign markets, at the cost of raising prices for American consumers. To pull a stunt like this at a time when the U.S. government owes trillions of dollars to foreign investors, including foreign governments, simply mixes ignorance with incompetence.

That said it seems unlikely that free-traders are going to make a serious appearance in the Democratic Party of 2018. That is a shame because such a development would at least slow down the gallop toward more central planning and bureaucratic control over the U.S. economy. (Apparently the Trump Administration suffers from the delusion that it can loosen regulations on business conducted inside the U.S., but tighten regulations on external trade coming into the U.S. and never the twain shall meet.) So, we are faced with the unappetizing prospect of a bipartisan consensus in favor of using the police power of the state to attempt to impose higher prices on consumers and lower returns on investors. All at a time of enormous budget deficits and accumulated public debt.

Tired of winning yet?

JFB

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A Giveaway to the Rich they Say

The reaction of progressives to the passage of the recent tax bill tells you all you need to know about what progressivism is really all about. The tax bill is, they repeat endlessly “a giveaway to the rich and to big corporations”. Let’s think about that for a moment.

It is, or ought to be, glaringly obvious that to give something away you have to own it to begin with. So, what progressives are really saying is that the state owns all of your income except for what it allows you to keep. And let’s not kid ourselves about this. It is what they truly believe.

The point of taxation is supposed to be about financing legitimate government activities—like the production of public goods, the classic being defense. And there are other public goods like the highway system, public health, and the courts to name a few. But by and large, that is not where the federal government concentrates its efforts. The focus of the federal government is on income redistribution. The numbers are published by the Office of Management and Budget. They can be accessed at this link:

https://obamawhitehouse.archives.gov/omb/budget/Historicals

Progressives can pretend all they like that they can achieve some sort of optimal income distribution, but it is impossible. It simply denies human nature, not that it has ever stopped them before. They can reduce income inequality, though. All they have to do is adopt the policies that are working so well in Venezuela. Otherwise they will simply continue on with their traditional vote buying operation,the time tested modus operandi of welfare state politicians.

Something like 72% of FY 2017 federal spending was budgeted for Human Resources, which as a practical matter means Medicare, Medicaid, Social Security, Social Services and other welfare payments. Net interest on the debt is another 7 percentage points. Medicare and Social Security are gargantuan programs that (largely) benefit those over 65 and are funded by the current generation of taxpayers. (The Trust fund is simply an accounting fiction; it has no actual money). Since wealth is highly and positively correlated with age, these programs redistribute money to the relatively well-off (older people) from the relatively less well-off (younger people).

For perspective consider this. In 1980 defense spending accounted for 22.7% of the budget and 4.8% of GDP. Today defense spending has shrunk enough so that it accounts for only 14.7% of the budget and 3.2% of GDP. On the other hand, Human Resource outlays soared from 53% of outlays to 72% today. In 1980 it was 11.2% of GDP; now it is 15.4% of GDP. So over the years, the federal government has essentially become a giant check writing operation, paying the most to the most powerful and politically well-connected people. That is the nature of progressivism.

And then there is the argument about the deficit. When the deficit exploded something like $9.3 trillion over the Obama years, progressives were strangely silent. But the prospect of an extra $1.5 trillion over 10 years provokes hysterical caterwauling, never mind that they want to spend even more on Social Security. All of which suggests that they believe they can tax their way out of the fiscal nightmare that is the welfare state.

In McCulloch vs. Maryland (1819) Daniel Webster argued that “The power to tax is the power to destroy”. Chief Justice John Marshall agreed, saying “That the power to tax involves the power to destroy…[is] not to be denied”.

We are clearly at the point where the tax burden, which is properly measured in terms of outlays and promised future outlays rather than collections, is destructive. The present value of promised future outlays for Social Security, Medicare, Medicaid and debt service is estimated to be between $100 and $200 trillion. This with a GDP of $20 trillion. It is obviously not sustainable, and the only way to get it under control is to reform entitlements. Which is what progressives simply refuse to do, preferring instead to yammer on about taxing the rich to squeeze $100 trillion in taxes from a $20 trillion economy. Quite a trick that would be.

JFB

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Asides…About North Korea

In October of 2002, North Korea admitted to having a clandestine nuclear weapons program. About 2 years later, in 2004, former Secretary of State Madeline Albright caught on and admitted that North Korea had cheated on the “Agreed Framework” negotiated during the Clinton years. In October of 2006 North Korea successfully performed its first nuclear test, after having successfully tested some short-range missiles. In so doing North Korea became a nuclear state, or at the very least, a nuclear threshold state. By September of 2016 the Obama Administration was busy insisting that the U.S. would “never accept” North Korea as a nuclear state, even though it already was one, and had been for quite some time.

 
North Korean Rocket Launch

Fast forward a year later to the present. North Korea has successfully tested both a hydrogen bomb and an ICBM capable of hitting anywhere in the United States. You would think that this would cause policy experts to reconsider their assumptions, but you would be wrong. The U.S. still gamely claims that it will not tolerate a nuclear North Korea. Moreover, the bipartisan group of North Korea policy makers who presided over this fiasco, one of the most spectacular U.S. foreign policy failures of the last 50 years, is now urging that we find ways to accommodate North Korea as a nuclear state.

 

And let’s not forget that foreign policy with respect to Iran is largely built on the assumptions of the North Korean model.

 

JFB

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Asides…

One of the favorite progressive hobby horses is to wail about voter turnout, or the lack thereof. And so periodically we are treated to assertions that Republicans systematically suppress the vote, especially of minorities, as an electoral strategy. Needless to say, there is zero evidence that this is actually the case. But it helps to whip up the base.

 

Given the professed concern over voter turnout you would think that there would be progressive angst over the results of New York’s recent mayoralty race in which progressive hero Bill de Blasio cruised to re-election. In that race, slightly under 22% of registered voters actually showed up to cast their ballots. But somehow or other that turnout didn’t seem to bother progressives, perhaps because turnout is not the real concern. The real concern is progressive turnout.

 

And then there is the case of Judge Roy Moore, social warrior, Steve Bannon acolyte and Republican Senate nominee for a special election that will be held December 12, 2017. To refer to Moore as “Judge” is a bit of a stretch since he was twice removed from the court for refusing to follow the orders of superior courts. As if that isn’t enough, it seems that when he was in his 30s one of his favorite pastimes was (allegedly) cruising the malls to pick up teenage girls, some as young as 14. The National Republican Party, with the notable exception of faux Republican Donald Trump, has essentially disavowed his candidacy. Both Mitch McConnell and John Thune have publicly called for Moore to step aside so that the party can get behind a write-in candidate. Not surprisingly, Roy Moore has shown no inclination to do so.

 

In the meantime, Senator Al Franken, past and current comedian, has been credibly accused of the “unwanted groping” of at least 5 women, as if there were a such thing as wanted groping. In the event, the oh so progressive defender of women’s rights has been on an apology tour, but has indicated that, like Moore, he has no intention of stepping down. To be sure, Franken’s behavior is not as grotesque as Moore’s, inasmuch as Franken apparently restricted his assaults to women over 21.

 

When the story about Franken first broke, the conventional wisdom was that he might survive the scandal if no other stories of assault turned up. After the second story turned up, the third would be deemed dispositive. After the third, it would be the forth. We are now at 5 and counting.

 

Now it turns out that fresh from settling sexual harassment complaints against him in 2014 with taxpayers paying the bill, Representative John Conyers is at it again, defending himself against a complaint filed in 2015. He, like Moore and Franken, indicated that he has no intention of stepping down. On “Meet the Press” Nancy Pelosi ducked and weaved as she attempted to defend the indefensible in the Conyers case, calling him an Icon. A clip from the show is below.

 

 

In Washington, they call this leadership.

 

JFB

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