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The Wrongologist

Geopolitics, Power and Political Economy

Sunday Cartoon Blogging – May 21, 2017

On Friday night in Cologne Germany, Wrongo and Ms. Right had the chance to see a great young female duo who play classical music. Sophie Moser (violin) and Katja Huhn (piano) played selections for a mostly American audience. They perform under the name Duo Moser-Huhn. Here they are playing the Romanian Folk Dances by Bartok, composed in 1915. Sophie was a child prodigy, and plays an Amati violin built in 1743. They have few YouTube performances, so hopefully, you will enjoy this:

On to cartoons. Der Donald is on his first overseas tour as president. He is in Saudi as this is written, before his big speech on Islamic Terrorism. So you will already know just how well that was received by the 50 or so heads of state in the audience.

Trump prepares for landing:

Opinions on his Middle East visit vary:

John Fugelsang called Trump’s meeting with the Pope “His Holiness meets His Assholiness”:

Trump hints at having secret tapes of Comey:

Will Trump be dropped?

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About the American Dream

The Daily Escape:

Calf born on Tuesday, May 16, Kuiper’s dairy, Giessenburg, Netherlands – photo by Wrongo

Wrongo visited an artisanal cheese business in The Netherlands. The farm’s owners have worked and owned the land for six generations. Jan and Thera Kuiper, the current generation, have been running the business for 31 years, since shortly after they married. When they were just starting out, milk prices were falling, and there was a surplus of dairy cows in The Netherlands. They decided to move up the value chain, and begin producing cheese. Today the farm produces 4000 pounds of cheese a week, and sells throughout the EU. They have completed the preliminary work to sell their product in the US, and could begin exporting to America soon.

Because their roots are in a dairy farm, the main raw material cost for their product is quite low, particularly compared to many artisanal cheese makers in the US who have to purchase milk as they expand and become more successful.

Like all family businesses, a huge question is who from the next generation will take over the business when it is time for the current owners to retire. One of their three kids is interested and able to take over, while the others have assumed urban-based careers.

It was inspiring to talk with them about daily life in the business of artisanal cheese-making, and it is another lesson that fulfilling a version of the American Dream can happen anywhere.

Speaking of the American Dream, What’s Your American Dream Score? This Quiz Will Tell You (via Fast Company). The higher your score, the more difficult your time achieving the American Dream has been. Take the test here. Wrongo got a 60:

 Your score of 60 shows you’ve had more factors working in your favor, but still some you’ve had to overcome. To see what your score means compared to others, click here.

What about you?

With all of the news about a Special Counsel, this article about Mueller and Comey is a valuable insight. Forged Under Fire—Bob Mueller and Jim Comey’s Unusual Friendship is from the Washingtonian Magazine in May 2013. It is a longer piece, but well worth the time to understand Robert Mueller and why he might be sympathetic to Jim Comey.

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Light Reading

The Daily Escape:

Amsterdam – photo by Wrongo

Quote: “In wartime, truth is so precious that she should always be attended by a bodyguard of lies.” – Winston Churchill

This quote somehow seems appropriate, after the “I’ve got a secret” game that the Orange Overlord just played with the Russians.

Anyway, here are a few links that you may have missed as the press ganged up on the Pantload:

Bees are still struggling to avoid colony collapse worldwide. US beekeepers can tolerate up to 15% losses of colonies over winter, but we lost 28.1% of colonies over the 2015-16 winter.

New data shows that golfers of all abilities think they hit the ball farther than they do. They also think their clubs are the best.

The US made a deal with ISIS fighters that they would let the fighters go if they would leave the Tabqah Dam untouched. ISIS kept its side of the deal, and didn’t blow up the dam. As soon as they departed, the US attacked them in open country. It is doubtful that ISIS will make that kind of deal again.

Congress is considering changing the National Flood Insurance Program, which has a $25 billion debt that its director says cannot be repaid. But, members of Congress disagree over how much homeowners should be forced to pay for flood insurance if the program is to become solvent.

Several big-name hedge funds trimmed their holdings in financial companies in the first quarter. Could they know something you don’t?

Bonus photo from Amsterdam:

The Hash, Marijuana and Hemp Museum – Photo by Wrongo

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Sunday Cartoon Blogging – May 14, 2017

(Wrongo and Ms. Oh So Right are heading to Europe today. We will be gone for 10 days, so blogging may be sparse. Please keep America great while we are away.)

Happy Mother’s Day to all. A few more thoughts about BLOTUS (Big Liar of the US): Not only does he have the worst approval ratings of any president at this point in his term, but he’s also incapable of moving the needle of public opinion toward his positions. Ironically, for all of Trump’s sycophants’ talk that Trump’s words ARE his actions, his tweets and public pronouncements are making his positions more unpopular.

What matters most to Wrongo is his non-adherence to basic rules and norms, and here, there’s a lot to be concerned about. His fear of an investigation into possible Russian influence, and his refusal to release his tax returns probably mean he’s hiding something. Now we learn that Trump’s law firm, Morgan Lewis, which wrote a statement saying Trump’s tax returns showed no significant business ties to Russia, itself has extensive ties to Russia, and received a “Russia Law Firm of the Year” award in 2016. The swamp is reaching flood stage. On to cartoons.

Trump wanted a different dog:

Comey’s resume shows poor reviews by former employer:

McConnell plans to protect The Donald:

Trump thinks any negative story about him is made up:

Trump creates new versions of the truth faster than his team can spin them:

Trump hears from a guy inside the White House that he doesn’t know:

 

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Saturday Soother – May 13, 2017

The Daily Escape:

Bluebells, Brussels Belgium April 2017 photo by Francois Lenoir

In many ways, it is too easy to criticize Donald Trump. While we can have differing opinions on matters of policy, they only account for a few of the issues Wrongo has with Trump. Most are his unfathomable attempts to avoid telling the truth. Consider his interview with The Economist which posted the entire transcript on Thursday. Let’s focus on this excerpt:

The Economist: Another part of your overall plan, the tax reform plan. Is it OK if that tax plan increases the deficit? Ronald Reagan’s tax reform didn’t.
Trump: Well, it actually did. But, but it’s called priming the pump. You know, if you don’t do that, you’re never going to bring your taxes down.

[Snip]

Economist: But beyond that it’s OK if the tax plan increases the deficit?
Trump: It is OK, because it won’t increase it for long. You may have two years where you’ll…you understand the expression “prime the pump”?

Yes.
We have to prime the pump.

It’s very Keynesian.
We’re the highest-taxed nation in the world. Have you heard that expression before, for this particular type of an event?

Priming the pump?
Yeah, have you heard it?

Yes.
Have you heard that expression used before? Because I haven’t heard it. I mean, I just…I came up with it a couple of days ago and I thought it was good. It’s what you have to do.

Ok, so how did the guy from the Economist keep a straight face? The reporter is thinking John Maynard Keynes, the great British Economist, who came up with the idea of “priming the pump” in the 1930’s. By the way, Keynesian pump-priming is temporary government spending to boost temporarily weak demand. It is designed to boost growth, (and jobs) during a downturn, but we can’t assume that it will boost the economy’s growth rate.

Trump’s idea for pump-priming is more tax cuts. He’s following classic trickle-down economics, and claims that his tax cuts will boost investment, productivity growth, and labor supply, and thus raise the long-term growth rate of the economy. In this regard, Trump conflates Keynes, who’s been proven right, with Arthur Laffer, who wasn’t.

But, didn’t Trump graduate from Wharton with a business degree? Nobody gets out of Wharton without knowing that Keynes was the “pump primer”. And his saying that he coined the phrase ‘prime the pump’ a few days ago? Unfortunately, there are only two explanations: first, Trump is 70 years old and his cognitive skills are starting to desert him. Or second, he is a pathological liar.

Wrongo wants to go with #2.

He just wants to sell America something with his name stamped on it. But since America isn’t buying a hotel, he’s trying to sell Trumponomics, Trumpcare, etc. He does not really care about the details, he just wants to pass it, and to claim it is a success. That’s America’s tragedy.

So with Comeygate, Trumpcare and pump-priming, we all need to unplug and try, just try to relax on Saturday. We had a full moon and clear skies over the fields of Wrong on Thursday, so today we listen to “Claire du Lune” by Claude Debussy. It is the third movement of “Suite bergamasque”. Its name comes from Verlaine’s poem Clair de Lune, “moonlight” in French. Here it is played by Dame Moura Lympany, British pianist, who died in 2005:

Those who read the Wrongologist in email can view the video here.

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Some Thoughts on L’affaire Comey

The Daily Escape:

Cathedral Cove, New Zealand – photo by Niels Holm

For the past few days, it has been “All Comey, all the time”, both in America and around the world.

You can count Wrongo as one of those who thinks that Comey made some huge mistakes trying to position himself after his take-down of Hillary Clinton, and her self-inflicted email disaster. You can also count Wrongo as thinking that Hillary’s loss was mostly her own fault. That means that you can also count Wrongo as agnostic regarding whether the Russians were behind the hack into the Democratic National Committee, or that their intervention was because they wanted to help Trump win the election.

Democrats argue that Trump and/or members of his administration are “soft on Russia”. Democrats have adopted a neo-con worldview that just a few years ago, they would have hated: That policies are either pro-America or pro-Russia. And, it’s in that pro-Russian box that Democrats are trying to stuff The Donald.

This makes Democrats blind to the possibility that people (even Trump!) could genuinely believe that it’s in America’s interest to be friendlier to Russia. That we could cooperate on certain issues without being agents of Putin. Perhaps you remember that Obama said just that in his first term.

So let’s turn to Comey’s firing. Thursday’s NYT had a complete listing of members of the House and Senate and their reaction(s) to the firing. And yes, if you went back a few years to Republican calls for special prosecutors to examine Democrats, the script was flipped, with most Dems then taking the position that Republicans are taking today.

It’s the kind of game that has become acceptable in today’s Washington swamp.

Wrongo isn’t happy with Comey’s performance as FBI director, but we now stand on the edge of a precipice without him. He ran into trouble because AG Loretta Lynch had to recuse herself during the Clinton email investigation. That led to his free-lancing, and his inexplicable testimony. Then AG Sessions had to recuse himself from any Russia-related investigation. And shortly thereafter, the tempo of the investigation changed, and Comey needed someone to approve additional resources for the Russia investigation. The WSJ reported:

Comey started receiving daily instead of weekly updates on the investigation, beginning at least three weeks ago…Comey was concerned by information showing possible evidence of collusion.

Now, the firing of Comey opens up the FBI and the DOJ, by custom and tradition an agency that is independent from politics, to outside political control, to a new director forcing a reduction in funding or other resources critical to the investigation.

Ostensibly, the issue isn’t the fact that Comey was fired. It’s about the timing. In turn, that is directly linked to the fact that the FBI is investigating Trump. Most think that the FBI Russia operation was breathing down the neck of the Trump campaign and their operatives. They think that the Comey firing is an effort to slow down, or wind down, the investigation prematurely.

The question is, will the new FBI director do either of those things? Wouldn’t the FBI agents involved in the investigation revolt/go public if a new director defunded the effort, and/or reduced the commitment to it? And the FBI is not running the investigation by itself. Their investigation is overseen by prosecutors. We heard this week that there is a grand jury. We hear that they’re issuing subpoenas. That’s not being done by the FBI. It’s being done by prosecutors in the DOJ.

And that’s where the ball sits. The American people have to rely on AG Jeff Sessions, who may be recused, but who guarantees that? Or it rests with Deputy AG Ron Rosenstein, who is in the job for a couple of weeks. Or it rests with a to-be-appointed FBI Director. Bloomberg is reporting that Trump is considering former Congressman and former FBI agent Mike Rogers, who is far too political, or former New York City Police Commissioner Ray Kelly, who is all hat and no cattle.

There are hundreds of thousands of stories and millions of words being written about this. Trump shouldn’t expect this to go away.

In fact, he should publicly support getting to the bottom of it, rather than acting like Richard Nixon. That didn’t end well.

Some music: Here are the Waifs, an Australian blues/rock band formed in 1992, fronted by two sisters, doing “Crazy Train”. It’s the train America is on right now:

Those who read the Wrongologist in email can view the video here.

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Buffett: Focus on Lower Health Care Costs, Not Corporate Taxes

The Daily Escape:

Ribbon Chapel, Onomichi Japan – photo by Koji Fujii

Andrew Ross Sorkin wrote about Warren Buffet and the Berkshire Hathaway annual meeting in Omaha. Thousands of people attend these meetings, which are known as “Woodstock for capitalists.” Sorkin reports that Buffet made this comment:

The tax system is not crippling our business around the world.

Sorkin said that Mr. Buffett, was blunt and pointed, implicitly rebuking his fellow chief executives, who have been lobbying the Trump administration and Washington lawmakers to lower corporate taxes. Buffett said that those who have been single-focused on seeking relief from their tax bills would be smart to shift their attention to health care costs, which are growing and swallowing evermore corporate profits. The Kaiser Family Foundation reports that 49% of Americans, about 156 million, are insured by their employer. More from Sorkin:

The need for corporate tax relief has become the lodestar of the corner office, with CEOs rhapsodizing  over President Trump’s plan to try to stimulate growth by cutting tax rates for businesses.

But as Mr. Buffett pointed out, these chief executives are missing the bigger issue: As a percentage of our GDP, the cost of maintaining our American health care system is rising at an alarming rate. And Corporate America pays a big (and growing) chunk of that bill.

Buffett wasn’t talking about the cost of health insurance, which is a fraction of the total cost of health care. He suggests that today’s corporate tax rates are a distraction, not a true impediment to growth:

If you go back to 1960 or thereabouts, corporate taxes were about 4% of GDP…And now, they’re about 2 % of GDP.

While tax rates have fallen as a share of gross domestic product, health care costs ballooned:

About 50 years ago, health care was 5% of GDP, and now it’s about 17%.

Buffett is a smart guy. He raises an argument for focusing on the underlying costs of our health care system, something that goes far beyond the debate around the Affordable Care Act, or what will replace it. Buffett says that our global competitiveness has fallen largely because our businesses were paying far more for health care — a tax by another name — than those in other countries.

As Buffett said: (brackets by the Wrongologist)

When American business talks about [corporate taxes] strangling our competitiveness, or that sort of thing, they’re talking about something that as a percentage of GDP has gone down…While medical costs, which are borne to a great extent by business, have swelled.

Here are the facts:

  • In 1960, corporate taxes in the US were about 4% of GDP. The percentage fell steadily, reaching a bottom in 1983 before rising slightly over the last few decades. Today, it is 1.9%.
  • In the meantime, health care costs as a percent of GDP have skyrocketed. Today our health care costs are 17.1% of GDP, up from 13.1% in 1995.
  • Germany’s cost is 11.3%, up from 9.4% during the same period. Japan’s is 10.2%, up from 6.6%. Britain’s health care costs are 9.1% of GDP, up from 6.7% percent in 1995.

That makes our health care cost disadvantage far greater than our tax differential. It harms American companies in particular, since they bear such a large share of those costs, which firms in our competitor countries do not. US Corporations spend $12,591 on average for coverage of a family of four, up 54% since 2005, according to a study by the Kaiser Family Foundation.

But Congress avoids the issue, and CEOs don’t talk about it. A final quote from Warren:

It’s very tough for political parties to attack it…it’s basically a political subject…

In fact, Buffett’s partner, Charlie Munger, is the rare Republican (Buffett is a Democrat) who has advocated for a single-payer health care system. Under his plan, the US would enact a sort of universal type of coverage for all citizens — perhaps along the lines of the Medicaid system.

Which brings Wrongo to his final point: Medicaid expansion is the one part of Obamacare that can be said unequivocally to work. It’s a single payer program funded by the Federal government. So it’s bitterly ironic that the Republican’s reaction to Obamacare is to assault and roll back an existing Federal program, from LBJ days.

Of course, kicking poor people who benefit from Medicaid will always be popular with Republicans. So, Republicans, by making Medicaid worse, will try to restore their natural order of things.

Lazy, uninformed voters = Lazy, uninformed legislators = Lazy, uninformed policy.

It’s that simple.

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Russia’s Growing Influence With North Korea

The Daily Escape:

Lanterns lit last week for Buddha’s Birthday, Samgwangsa Temple, Busan, South Korea – photo by Jason Teale

Yesterday, Wrongo mentioned that Russia might prove helpful to Donald Trump in his efforts to deal with a nuclear-capable North Korea (NK). Today, Stratfor has a column about Russia’s relationship with NK. Rather than quote extensively from a long article, Wrongo has condensed from it, particularly about the history of Russia/North Korean relations.

History gives perspective: The Soviet Union and the US were the actors that split North and South Korea at the end of WWII. In the 1950s, both Koreas became a proxy battleground, pitting the communist North against the US-aligned South. After China and North Korea agreed to an Armistice with the UN and South Korea in 1953, the Soviets helped to build up the military and security forces in NK, ensuring its stability. Some Soviet-era military equipment is still in use today.

The Soviets were a key NK economic partner throughout the Cold War. They accounted for nearly half of NK’s foreign trade in the 1970s and 1980s. After the collapse of the Soviet Union, trade dropped off. China now accounts for 90% of NK’s imports, but about a third of that is Russian-sourced.

Putin saw the strategic value of good relations with NK, including how Russia could manipulate its influence in the region to pressure NK, or to put pressure the US and South Korea. Russia has criticized NK’s nuclear weapons tests and ballistic missile programs, and participated in the six-party nuclear disarmament talks along with China, the US, Japan and North Korea and South Korea.

In 2014, Russia joined in levying sanctions against NK, halting supplies of ships, helicopters and minerals in response to its continued nuclear tests. But, neither China nor Russia has cut their economic or military ties with NK. And both governments have opposed expanded sanctions or regime change.

Russia and NK have improved ties since the breakdown in Russia’s relations with the West over Crimea and Ukraine. In 2014, Moscow officially settled NK’s Soviet-era debt of $11 billion, forgiving most of it. NK granted Russian business executives long-term multiple-entry visas for the first time. In addition, Russia has provided millions of dollars’ worth of food aid to NK in recent years, including nearly half of the country’s grain imports.

One way that the two countries have expanded their cooperation is through the employment of temporary NK workers in Russia. Nearly 50,000 North Koreans were granted Russian work permits in 2015. In April, Russia’s parliament passed a bill allowing NK workers to travel visa-free to Vladivostok. Russia estimates that North Korea receives $170 million in remittances from its workers in Russia.

No doubt, Russia sees its relationship with NK as small potatoes. But Russia is not small potatoes for NK. While it will not replace China as NK’s primary partner, Russia has the capacity to play spoiler to the US plans to control NK’s nuclear ambitions. Today, Russia has its hands full with Syria, Crimea and Ukraine. But, its influence on the North Koreans can give it leverage, in the event that America’s Orange Negotiator needs help making a deal on the Korean peninsula.

Putin could add weight to China’s effort to lean on NK, forcing NK to come to the table. In return, His Orangeness might be persuaded to go easy on Putin’s goals in Ukraine or Syria, in addition to whatever he will owe China, if the pressure succeeded.

Russia can’t solve our problem with NK, but it might be able to move the dial enough either to play the spoiler, or to be an ally in any American efforts to defuse the Korean problem.

Here is a martial song from North Korea: “Leader, Just Give Us Your Order!” Don’t you just wonder what that order will be?

Those who read the Wrongologist in email can view the video here.

Warning! Don’t scroll through the comments, it weakens the mind. A recent one says:

“Comrade Kim Jong Un, just give us the order to wipe out all imperialists and to reunificate Korea!”

Reunificate!

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Monday Wake Up Call – May 8, 2017

The Daily Escape:

Canada Warbler

Last Thursday, Iran, Russia and Turkey signed a memorandum on the creation of “de-escalation” zones in Syria. This represents the beginning of a new phase in the Syrian civil war. If the agreement and the cease-fires it envisions hold up, it could become a de facto partition of the country into zones of influence, some based on religious sect, and a recognition that at this point, neither the regime nor the rebels can win this conflict.

A glance at the placement of the proposed “de-escalation zones” shows that they are jihadi dominated areas under the protection and support of foreign sponsors; Saudi Arabia, Israel, Turkey, the Gulf States and possibly, the US.

The text of the agreement says the de-escalation zones allow for an improvement of the humanitarian situation and to “create favorable conditions to advance a political settlement of the conflict.” In the zones mapped out under the agreement, the use of weapons, including “aerial assets, shall be ceased.”

The agreement was not signed by the Syrian regime, which is interesting. This means that Iran, Turkey and Russia are the guarantors of the facts on the ground post-agreement, and it shifts the conflict from one between the regime and the various opposition rebel groups, to one between the powerful foreign proxies that have sent weapons and in some cases, their armed forces into the country.

The US was not a direct participant in the negotiations for the agreement, but was present as an observer during the discussions. US Secretary of State Tillerson and his Russian counterpart, Sergei Lavrov, stayed in touch during the discussions.

The agreement shows the degree to which Russia has outmaneuvered the US and is dictating terms in Syria. This sends a clear message to Trump that while the Americans are putting down roots in northeast Syria with the Kurdish YPG, the US role is not formally recognized by Turkey, Iran or Russia despite the fact that the area is de facto under US protection.

It remains to be seen if this agreement is the beginning of the map for a new Syria or just breathing space before the next round of war.

This is a gift for Donald Trump. He consistently called for safe zones while campaigning, so he can easily support this move. Also, Putin and Trump seem to be tacitly co-operating to keep Turkey out of parts of northern Syria. A question is whether the US will go along with the plan. The US plans to stay in Syria to finish off ISIS, while the other powers prefer to finish off the rebels fighting the Assad regime first.

Despite that, ISIS still controls much of the land mass of Syria, albeit not its population centers.

The answer may depend on how much the White House wants to take at least some of the credit for bringing peace to Syria, and Thursday’s agreement may be the best shot America’s got.

Clearly, Putin is thinking in terms of a “grand strategy”, where the Syria situation is one of a number of critical elements of a possible US-Russia relationship. If the US-Russia relationship can be genuinely reset in a better direction, then it will impact many fronts: Perhaps Putin can get Trump to agree to Putin’s land grab in Crimea and the Donbass region of Ukraine. Perhaps they can work together to end the civil war in Syria, defeating ISIS along the way.

Notably, when Tillerson and Lavrov spoke last week, Syria and North Korea were two topics on their agenda. Maybe Russia could prove to be a more important factor in the North Korea situation than most realize.

So wake up Trump administration! Take that baby step forward by supporting the de-escalation agreement. If it fails, the other guys are to blame. If it succeeds in stabilizing the refugee situation while leading to a political solution in Syria, the credit will partially accrue to America. To help them wake up, here are the Rolling Stones with “Start Me Up” from their 1981 album “Tattoo You”:

Those who read the Wrongologist in email can view the video here.

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Sunday Cartoon Blogging – May 7, 2017

The House Republicans’ passage of the Trumpcare Bill dominated the news last week. Sometime later today we will learn the results of the French presidential election, but the hacking of Mr. Macro’s servers and emails sounds depressingly familiar.

America’s “unsolvable problem” with health insurance led us to Obamacare, and now, to the botched GOP effort to replace it. We should remember that this unsolvable problem has already been solved in dozens of countries.

Trumpcare is an event of domestic terrorism:

GOP will need a different pitch to the public:

How the GOP defines “pre-existing”:

Preexisting conditions also include political health:

 

GOP thinks health insurance is only for people who make good choices – like being born rich:

Stay unhealthy my friends:

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