Author: wrongologist

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?

https://www.youtube.com/watch?v=UICK5ZiPdVg

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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Saturday Soother – May 6, 2017

The Daily Escape:

Tulips, Lisse Netherlands, April 2017 – photo by Peter Dejong

We ended the week with Republicans in the House passing the latest version of Trumpcare by a vote of 217-213. All Democrats voted against it, with 20 Republican members defecting to join them. The changes Republicans made to get this version of bill through the House will not be what passes in the Senate. It’s up to Mitch McConnell to craft a bill that can get through the Senate using the budget reconciliation process, which will require 51 votes to pass.

That will most likely be the “real” bill, and then the negotiations between the House and Senate versions will begin.

The problem for America is that the Senate has to pass something awful enough that the House will still vote for it. We are a long way from replacing Obamacare, but Republicans now own the process whereby tens of millions of Americans losing health insurance.

If that isn’t enough to worry about, Buzzfeed has a long read about tiny drones that can be used in a swarm to kill people:

A very, very small quadcopter, one inch in diameter can carry a one- or two-gram shaped charge. You can order them from a drone manufacturer in China…A one-gram shaped charge can punch a hole in nine millimeters of steel…You can fit about three million of those in a semi-tractor-trailer. You can drive up I-95 with three trucks and have 10 million weapons attacking New York City. They don’t have to be very effective, only 5 or 10% of them have to find the target.

The concept is achievable, while the potential consequences are unthinkable:

There will be manufacturers producing millions of these weapons that people will be able to buy just like you can buy guns now, except millions of guns don’t matter unless you have a million soldiers. You need only three guys to write the program and launch them. So you can just imagine that in many parts of the world humans will be hunted…This is the ever-present cloud of lethal autonomous weapons.

They could be here in two to three years.

— Stuart Russell, professor of computer science at the University of California Berkeley

They are called lethal autonomous weapons systems (LAWS); weapons that have the ability to independently select and engage targets once a human releases the machine to perform: no supervision, no recall, and no stop function.

Can we prevent them? Nope, they already exist. Many countries including the US already have (much larger) systems with autonomous modes that can select and attack targets without human intervention: Israel’s Harpy and second-generation Harop, can enter an area, hunt for enemy radar, and kamikaze into it, regardless of where they are set up, as long as the radars are operating.

The Pentagon now is testing drone swarm technology: Weapons moving in large formations with one controller somewhere far away on the ground clicking computer keys. Think hundreds of small drones moving as one, like a lethal flock of bees. You can see a YouTube video of a US drone swarm test here. 103 mini drones were released from two US fighter jets during the test. The drones operate autonomously and share a distributed brain. These drones will make it economical to target people (troops?) in other countries, en masse, without having to send in our own soldiers, or declare war.

Why are we wasting even more human potential devising even more ways to kill each another?

Sorry, this story adds to your stress levels after a tough week, but Wrongo thought you should know. OTOH, with all that is going on, you really need soothing. Wrongo is going for some Stumptown Colombia El Admirador coffee and a listen to “Spring”, from Vivaldi’s Four Seasons, arranged for four pianos.

The pianos are played by Yuja Wang, Emanuel Ax, Nelson Goerner, and Julien Quentin. The performance was recorded at the Salle Médran in Verbier, Switzerland, in 2009:

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

Bonus video in honor of Trumpcare: Jimmy Reed singing “Get Your Insurance” from 1959:

Those who read in email can view the video here.

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Trump’s “Religious Freedom” Executive Order

The Daily Escape:

Cinco de Mayo parade in Puebla Mexico, where Mexico defeated France in 1862

Happy Cinco de Mayo! At the Mansion of Wrong, its ahi ceviche with mango, jalapeno, cilantro, ancho chili, lime juice and tequila in toasted won-ton wrappers. And Don Julio Anejo to wash it down. Not bad.

But among yesterday’s depressing news regarding the House passage of the Obamacare Repeal and (not) Replace, was the Orange Overlord signing yet another Executive Order (EO) touted by the Trump administration to protect “Religious Liberty”:

 

The EO directs the IRS not to enforce the Johnson Amendment. The Johnson Amendment is a part of the tax code that forbids 501(c)(3) organizations (including churches) from participating “directly or indirectly” in political campaigns.

Churches have historically been free to discuss and promote any issue or idea. So, they can address things like civil rights, reproductive rights, police violence, or the sanctity of law and order. They can also urge people to get out and vote on Election Day.

In other words, they can push and prod about all kinds of civic issues and engagement, in order to get their members to cast their votes.

The red line for the Johnson Amendment is actually endorsing a candidate. Churches can give a sermon about the evils of abortion, and let the attendees connect the dots to a candidate, but it’s a violation of the Johnson Amendment for the church to connect the dots directly, and tell the members to vote for a specific candidate or party.

Trump’s EO removes that red line. It will let churches give full endorsements so they can tell their congregants that God wants them to vote for Candidate X, and if they fail to do so, He will be angry and the baby Jesus will cry.

Trump’s EO leaves the decision whether to enforce the Johnson Amendment in the hands of the IRS. That means the IRS could pick and choose which institutions to penalize, and it might be your church, and not your neighbor’s.

In February, Trump promised to “destroy” the Johnson Amendment. But, presidents can’t “destroy” laws with EOs; that takes an act of Congress. Republicans may try repealing the Johnson amendment as part of their tax reform package.

Nancy LeTourneau thinks that:

The executive order the president will sign today isn’t really so much about “religious freedom,” as it is being framed by Trump and the religious right. This is actually designed to further erode one of the remaining restrictions on campaign finance.

LeTourneau points to the “indirect” efforts by Franklin Graham to elect Trump last fall, and offers him as an example: (brackets by the Wrongologist)

To the extent that the IRS ignores this statute, Graham will be able to accept tax-free donations to Samaritan’s Purse [Franklin Graham is president] (or another non-profit he might set up) that will go towards endorsing and advocating for the political candidates of their choice. That will likely make Franklin Graham a major player on par with the Super PACs in American politics.

LeTourneau thinks the EO has little to do with “Religious Freedom”, but instead opens a path for professional evangelists like Franklin Graham to become king-makers in our politics.

This turns “no taxation without representation” into “representation without taxation”, a Republican wet dream that could undermine whatever remains of our campaign finance regulations. Where is the lack of religious freedom here? Churches don’t have to apply for tax-exempt status, and they could then say (or do) anything they want.

They just would have to pay taxes like everyone else.

OK, here’s some music for Cinco: Here is “Oye Como Va” by Santana. It was written by Tito Puente in 1963, and popularized by Santana in 1970 on his album Abraxas:

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

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Monday Wake Up Call – May 1, 2017

The Daily Escape:

Interior of the Oculus, NYC – photo by Timothy A. Clary

On Saturday, Wrongo scoffed at David Brooks, who said that Donald Trump’s foreign policy moves:

…have been, if anything, kind of normal…

Another part of US foreign policy that is FAR from normal is our effort to square the circle between our NATO ally Turkey, and our Kurdish allies in Syria and Iraq, who are fighting with us to eliminate ISIS as a force in Syria.

Last Tuesday, Turkey triggered a crisis when it launched airstrikes on US-backed YPG Kurdish fighters. The YPG is a Syrian sister organization of the Kurdish PKK Party in Turkey. Turkey believes the YPG and the PKK are terrorist groups whose goal is to destabilize Turkey.

Within Syria, US Special Forces are embedded with the YPG and are coordinating YPG’s moves against ISIS around Raqqa. The Turkish airstrikes killed at least 18 people, destroying the group’s headquarters. The airstrikes triggered heavy artillery and mortar exchanges between Turkish troops and Kurdish forces along the border, raising concerns that Turkey might send its forces into Syria, something the US opposes.

The YPG wants to divert forces from the attack on Raqqa to protect against further Turkish adventures, something the US doesn’t want. Now we learn that the US has placed some of its very limited military resources in Syria between the Turks and the Kurds in an effort to calm the hostilities. From the WSJ:

American forces have started patrolling the Turkey-Syria border to prevent further clashes between Turkish troops and Kurdish fighters, which could undermine the fight against Islamic State, U.S. officials said Friday.

This is the second time we had to break up the fight between the Turks and the Kurds in Syria. We made a similar move last month in Manbij, a northern Syrian town at the epicenter of a fight between Kurdish forces, Syrian government troops and Turkish-backed militants.

We have become our own UN-style peacekeeping force between Turkey and our Kurdish allies in the midst of our very real effort to take Raqqa from ISIS.

So, where are we going with Turkey, the Kurds and Syria? In the ME, the Kurds are one of the few groups the US can trust to perform militarily. They have fought alongside our troops in this region for years. In the past, we have sold them out in favor of Iraqi and Turkish geopolitical desires more than once.

OTOH, Turkey is a NATO ally, one who is the enemy of our Kurdish allies. We have several Airbases in Turkey which help with the fight against ISIS in Iraq and Syria. If the Turks asked us to leave, our military effectiveness in the ME would be seriously weakened.

More than 25 million Kurds live in the region straddling the borders of Turkey, Iraq, Syria, and Iran. They are the fourth-largest ethnic group in the ME, but they do not have a permanent nation-state. The Kurds can see that a state could be created from the NE portion of Syria, and the region they already control in Iraq, if the Turks, along with Syria and its allies would allow it to happen.

Where does the US stand on this? Would we back the Turkish aspiration to control a Syrian buffer area between the Kurds to the East in Syria and in Iraq, and the Kurds in the West in Syria?

Would Russia, Syria, and Iran allow Turkey to succeed at that? What would happen if Russia and Iran moved against Turkey, if the Turks established a foothold in Northern Syria? Would the US come to Turkey’s defense?

Turkish President Erdogan is visiting Trump in DC in mid-May. Last Friday, Mr. Erdogan said he would personally urge Mr. Trump to stop working with the YPG, but Trump plans to directly arm them. What will the US response be to Erdogan, who looks more like a dictator controlling our only Islamic NATO ally?

Time for Trump and the State Department to wake up and solve the complex issues in Syria. Who knew being president would be so hard? This is not a time for shooting from the hip, or for deal-making, but for establishing principles for the end game in Syria with our most difficult NATO partner.

To help Trump and Tillerson wake up, here is the progressive rock band Yes, Rock And Roll Hall Of Fame inductees. The ceremony was broadcast Saturday night on HBO. The band’s co-founder, Jon Anderson, reunited for a performance of “Roundabout” from 1971. He’s here with bassist Geddy Lee, guitarist Steve Howe, keyboardist Rick Wakeman, guitarist Trevor Rabin and drummer Alan White:

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

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Sunday Cartoon Blogging – April 30, 2017

It only took 100 days for Donald Trump to reduce the office of the presidency to the point of near-zero credibility. Unfortunately, it appears as though his base and Republicans in Congress remain very accepting of him as president. In Twitter speak, #So Sad.

Back to the administration’s one page tax plan: The plan works if we assume 6% annual GDP growth for the full 8 years of a Trump presidency. Since the end of the Great Recession, annual GDP growth has been about 2%. More to the point, we now have a 3.5% (of GDP) budget deficit, and we are at the top of the current business cycle, with a 75% debt-to-GDP ratio.

Republicans used to refer to that as being broke.

Mostly, what has been accomplished in the last 100 days are a blizzard of executive orders and proclamations. We all remember when executive orders like Trump’s were considered tyranny by Fox News. On to cartoons. The GOP walks out on its long-term companion, the deficit hawks:

Trump’s first 100 days did NOT include tons of winning:

The clown show about trickle-down economics continues:

Trump explains his new tax brackets:

Arkansas needs help after botching another execution:

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Saturday Soother – April 29, 2017

The Daily Escape:

Welcome to spring, which has brought a dandelion horror show to the fields of Wrong. Apparently, these are mutant dandelions, completely immune to the weed killer we put down three weeks ago.

But that is far from the only horror show underway in the lives of average Americans. The Trump 100-day roasting or celebration, depending on your viewpoint, is underway today. The NYT’s David Brooks has a perceptive look at the Trump presidency so far: (emphasis by Wrongo)

I wish we had a president who had actual convictions and knowledge, and who was interested in delivering real good to real Americans. But it’s hard to maintain outrage at a man who is a political pond skater — one of those little creatures that flit across the surface, sort of fascinating to watch, but have little effect as they go.

Hard to maintain outrage? Brooks, (not a Wrongo fave) elsewhere minimizes the real and potential damage that the country will face with our Orange Overlord. He still is commander-in-chief and, as such, has his (figurative) finger propped on the (figurative) nuclear button, and can order military action at a moment’s notice. Yesterday, Trump said that

There is a chance that we could end up having a major, major conflict with North Korea. Absolutely…

That should have made David Brooks cringe, but it didn’t, Brooks opined that:

His foreign policy moves have been, if anything, kind of normal…

Really? Trump says whatever is on top of his mind, words that North Korea’s Kim Jong-un just might take as a pre-invasion threat. That could lead to war with millions of South Koreans, Japanese, or American citizens paying the price for Trump’s bellicosity.

Think about how the Trumpets created a nuclear scare in mid-April: NBC News reported that they were considering a pre-emptive nuclear strike:

EXCLUSIVE: US may launch preemptive strike if North Korea reaches for nuclear trigger, intelligence officials say http://nbcnews.to/2owFmep

After some hysteria, including the false (inaccurate?) reporting of the location of our Aircraft Carrier Carl Vinson, which wasn’t steaming toward a North Korea confrontation, cooler heads have prevailed, and we are now talking about direct talks with the NK’s. Not much of this is new. Consider this from 2010 by Mark Landler of the NYT:

President Obama’s patience with China had been fraying for months, and by November 2010 he was fed up. Meeting with President Hu Jintao in Seoul, South Korea, Mr. Obama warned that if China did not do more to curb North Korea’s bellicose behavior, he would have to take steps to shield the United States from the threat of a nuclear missile attack from the North.

Sounds like where we are today, although the GOP likes Trump’s mas macho ways better than it liked Obama’s.

Once we are done insisting that China will fix this problem for us, and it turns out there’s no real Plan B, Trump will have to consider what it takes to strike a bargain with the North Koreans, or we’ll learn to live in the same dangerous situation that Japan and South Korea already face.

Onward to something that both calms and soothes. Wrongo is going for Chai Latte this morning, along with his Saturday music. Your mileage may vary.

Edward Elgar composed the Enigma Variations between October 1898 and February 1899. It is an orchestral work comprising fourteen variations on a theme. The “Nimrod” is variation IX. This variation is sometimes used at British funerals, memorial services, and other solemn occasions, like your review of Trump’s first 100 days in office. Here is Daniel Barenboim conducting the Chicago Symphony at Carnegie Hall in 1997 in Elgar’s “Nimrod” variation:

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

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Trump’s Tax Proposal Silences the GOP’s Deficit Hawks

The Daily Escape:

African Elephants – photo from Nature Photography

African Elephants clearly are not deficit hawks. But, neither are most Republicans in Congress, despite all their complaining about spending that adds to the deficit. Trump’s tax proposal is out. It’s interesting that the administration decided it was a good idea to put a vague blueprint laying out big tax cuts on a single sheet of paper.

It could take some time to process Trump’s “proposal”, but as the NYT says, it will bring a reckoning for Republican deficit hawks:

As President Trump’s top economic advisers faced a barrage of questions on Wednesday about the tax plan they had just unfurled, there was one that they struggled most to answer: how to keep the “massive tax cuts” they proposed from ballooning the federal deficit…Republican budget hawks will need to decide whether they want to stick to the arguments of fiscal responsibility that they used to bludgeon Democrats during the Obama era.

More from the NYT: (emphasis by the Wrongologist)

Mick Mulvaney, director of the Office of Management and Budget, who was a fierce critic of deficits when he was a member of Congress, offered a glimpse of the rationale his former colleagues might embrace. “As a conservative, that bothers me a little bit,” he said Tuesday on CNN of the possibility that Mr. Trump’s tax plan would increase the deficit. “But we also look at deficits through sort of a different lens.”

While we haven’t yet seen definitive estimates of the cost of Trump’s one-pager, it will certainly add to the deficit, and the negative numbers range up to an additional $6 Trillion over the next 10 years.

And when Treasury Secretary Mnuchin says that Trump’s tax plan “will pay for itself,” he isn’t credible. He also told ABC News that he couldn’t guarantee that middle-class families wouldn’t pay more under the proposal:

I can’t make any guarantees until this thing is done and it’s on the president’s desk. But I can tell you, that’s our number one objective in this…

Word salad. Helping the middle class is the furthest thing from their minds. Trump, Mnuchin, Ryan and the rest want to give a targeted stimulus to the rich and corporations.

They disguise tax cuts by calling them “tax reform”. Whatever they call it, they want the biggest tax cut for rich people that they can push through the House and Senate. Calling it “tax reform” is useful because “yuuge tax cuts for the rich” won’t be all that popular politically.

It’s inevitable that “middle class families” will end up paying more. Somebody’s got to pay for that massive military buildup. And the GOP cries of deficit piety are a shell game. Here is Kevin Drum:

When does this nonsense stop? Republicans aren’t deficit hawks. They haven’t been since the Reagan era. Republicans used to be deficit hawks, but the whole point of the Reagan Revolution was that tax cuts were more important than deficits. Their only concern about the deficit these days is as a handy excuse for opposing any increase to social welfare programs.

Trump’s tax plan is the same old Republican orthodoxy that has been around for decades.

Wrongo recommends this article from Fortune Magazine in 1955: “How Top Executives Live”. The GOP constantly says that if the 1% are forced to pay high taxes, they won’t work as hard to innovate and create jobs. This article, from the time when personal tax rates went from 40%-75%, shows they didn’t need low taxes back then to work hard:

The successful American executive, for example, gets up early–about 7:00 A.M.–eats a large breakfast, and rushes to his office by train or auto. It is not unusual for him, after spending from 9:00 A.M. until 6:00 P.M. in his office, to hurry home, eat dinner, and crawl into bed with a briefcase full of homework. He is constantly pressed for time…

Wrongo is cranky about the GOP’s desire to always shift the tax burden downward, and about their success in doing it. What Trump will get passed is another round of debt-financed upper-class tax cuts.

That will suit Trump and Ryan just fine.

Let’s go out with some music that references the life and times of Jonathan Demme, director of “Silence of the Lambs” and “Philadelphia”, who died on Wednesday. Demme also directed the best Rock movie ever made, “Stop Making Sense” featuring the Talking Heads. Here is “Life in Wartime” live, and that’s Parliament – Funkadelic’s Bernie Worrell on keyboards. This isn’t the first time Wrongo has posted this video:

https://www.youtube.com/watch?v=obAtn6I5rbY

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

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