GOP Attacks ESG Investing Rule

The Daily Escape:

Lake Sammamish, Issaquah, WA – February 2023 photo by Everything Washington

Are you following the Republican war on ESG? ESG stands for Environmental, Social, and Governance, key criteria that may impact a company’s market valuation and its business behavior. ESG has become a red line for Conservatives, who argue that companies that follow it are failing to live up to their fiduciary duty to maximize profits for investors.

The jury is still out on whether ESG investing delivers the same, better, or worse returns. But, despite any definitive evidence, Republicans hate ESG investing. From Semafor’s Liz Hoffman:

“Last year, Republican-controlled legislatures began passing laws blacklisting state investment funds from doing business with money managers that pushed what they deemed to be liberal agendas, like boycotting gun manufacturers and mining companies. BlackRock, run by Larry Fink, an outspoken supporter of so-called ESG principles, has taken the brunt of the pressure, with at least 10 states pulling their money from his firm or threatening to.”

For the many Republican state governors, treasurers, and attorneys-general who joined in, it’s turned out that several hadn’t done their financial homework before joining the culture war. Some failed to calculate the financial cost of their ideological stance. Semafor cites a few examples:

  • Indiana’s budget office found that a bill forcing state pension funds to divest from “woke” money managers would cost $6.7 billion over the next decade in lower-than-market returns. That also would force retirees to increase their paycheck contributions.
  • Executives in one of Kentucky’s retirement funds argued with the state’s treasurer that a recent law requiring them to pull money from BlackRock and 10 other firms seen as hostile to the energy industry would violate their duty to get the highest returns for pensioners.
  • A 2021 Texas investment blacklist cost municipalities an additional $303 million to $532 million in bond interest, according to a study by University of Pennsylvania. JPMorgan, Citigroup, and other banks left the state after the law was passed, leaving less competition for bond underwriting. That raised interest rates about 40 basis points.
  • North Dakota voted down, 90-3, a Texas-style bill that would have required the state treasurer to prepare a blacklist of financial firms that have committed to reducing carbon emissions, but would have stopped short of banning state investment funds from doing business with them.

Hoffman concludes that:

“Owning the libs turns out to be expensive.”

There are always trade-offs between principles and profits. Whether Republican politicians decide the political value of the fight offsets the lost profits is another question. This will at some point become a question for voters, who are the taxpayers and pensioners effected by these decisions.

In one way the GOP has already won a battle in the culture war on ESG. BlackRock has changed its marketing to tout its investments in fossil fuels. It also deployed new technology that allows investors to cast their own ballots in corporate elections instead of outsourcing their votes to the firm. Black Rock hopes these moves may blunt criticism that they are pushing a progressive agenda.

But the GOP isn’t giving up on fighting ESG. Politico is reporting that Sen. Mike Braun (R-IN) has offered a joint resolution under the little-known Congressional Review Act  (CRA) to overturn the Department of Labor’s recent rulemaking on ESG investing. The new rule took effect on January 30.

The rule allows fiduciaries to take ESG factors into consideration when choosing retirement investments. It potentially impacts the retirement savings of 152 million American workers whose accounts are governed by the Employee Retirement Income Security Act, or ERISA. From Braun:

“You cannot direct funds…to ESG. You’ve gotta go for whatever is going to give you the best financial return….That doesn’t mean that someone couldn’t choose to tell their broker to invest in ESG.”

Braun has 60 days to gather a majority in the Senate to overturn the rule. His has all 49 Republican Senators and Democrat Sen. Joe Manchin. If Braun can get 51 votes in the Senate, and given that the House is controlled by Republicans, the new rule would go away.

OTOH, a study by Penn State found that 70% of registered Republicans surveyed opposed government interference in ESG investments, higher than Democrats with the same position (57%). From Forbes:

“This exposes an irony at the heart of the ESG culture war: right-wing critics are seeking to actively interfere in decisions made by investment professionals about how to safeguard their clients’ money. In any other context, they’d be up in arms about the very thing they’re doing here.”

How silly to expect consistency from the GOP. We’ll see if Braun can find another Democrat in the Senate to join the Republican culture war on ESG.

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Republican Purity: Who’s Good Enough For Them?

The Daily Escape:

Walker River, NV – February 2023 photo by TheOsideBish

According to the GOP, your organization has to toe the line or else you could be banished or investigated. CNBC is reporting that House Speaker Kevin McCarthy (R-CA) and House Majority Leader Steve Scalise (R-LA) are set to banish the US Chamber of Commerce from Capitol Hill for endorsing Democrats in some 2020 and 2022 House races.

CNBC quotes Mark Bednar, a spokesman for McCarthy:

“The priorities of the US Chamber of Commerce have not aligned with the priorities of House Republicans or the interests of their own members, and they should not expect a meeting with Speaker McCarthy as long as that’s the case…”

CNBC says Scalise also won’t meet with them either, quoting his spokeswoman Lauren Fine: (brackets by Wrongo)

“[the Chamber headquarters in] Washington has radically shifted away from the pro-business philosophy of most local Chambers across America….unless the Chamber gets back to their traditional pro-business roots, they should not expect to have any engagement with Majority Leader Scalise’s office.”

This all started in 2020, when the Chamber endorsed 23 House Democrats in swing districts, a sharp break from the past practice of endorsing a nearly exclusive slate of Republicans, with one or two Democrats thrown on the list for a patina of bipartisan perception. And Republicans failed to regain the majority. The Chamber then reportedly endorsed 23 House Republican candidates and just four Democrats during the 2022 election. But that hasn’t made them “pure” enough for Kevin McCarthy, despite the Chamber providing $3 million to Mehmet Oz in his losing effort for a Senate seat in Pennsylvania.

Wrongo met often with the US Chamber of Commerce during his days at the big bank. They are far from being anti-GOP. On Monday, Tim Doyle, a spokesman for the Chamber, told CNBC:

“The Chamber’s priorities include lower taxes, reduced spending, fighting over regulation and numerous other issues, and we are aligned with House Republicans on many of the issues that are important to American businesses of all sizes,”

That sounds to Wrongo like it’s aligned with the Republicans. Doyle did go on to say:

“We do disagree with those who believe the Chamber should become a single-party partisan organization….”

The Intercept is reporting that the new House Republican majority wants to investigate the Chamber over its commitment to ESG regulations. ESG stands for environmental, social, and governance, key criteria that can impact company market valuations and its behavior. But ESG has become a red line for Conservatives, who argue that companies that follow it are failing to live up to their fiduciary duty to maximize profits for investors.

Apparently, Republicans in the House are also questioning the Chamber’s own conduct, including reportedly allowing former Chamber CEO Thomas Donohue to use the organization’s corporate jet for personal trips.

Look, the Chamber can be pretty terrible. They’re planning to sue the Securities and Exchange Commission if it goes forward with a climate change-related disclosure rule. But forcing them to only give money to Republicans is a new low, even for these nihilists.

Separately, Florida’s Governor DeSantis is set to take over Disney’s special Reedy Creek tax district in order to force the company to cough up $1 billion. Wrongo reported on DeSantis’ fight with Disney in April 2022 here and here. Targeting Disney became a thing after the company spoke out about Florida’s “don’t say gay” law.

Back in April, DeSantis pushed lawmakers to dissolve the Reedy Creek Improvement District, which for 55 years effectively gave Disney control of the land around its Florida properties. Republicans complied, and the district was scheduled to sunset on June 1, 2023.

But on Monday, Republican lawmakers unveiled a bill to turn over control of Disney’s special taxing district to a five-member board to be chosen by DeSantis. The proposal also comes with a rebrand; Reedy Creek would become the “Central Florida Tourism Oversight District.”

This gives DeSantis a new form of control over Disney, the state’s largest employer. And the opportunity for extorting collecting an additional $1 billion from a company that is on the DeSantis enemies list (which will ultimately be paid by the park’s patrons) is totally on brand for DeSantis.

Anyone else getting really tired of Republicans telling us we can’t say certain words, we can’t read certain books, we can’t teach certain things, we can’t talk about certain history, or we can’t donate to a few Democrats?

What’s Conservative about any of that?

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China’s Spy Balloon

The Daily Escape:

Zion NP in snow – January 2023 photo by Rich Vintage Photography

What is it about the Chinese balloon story? Why did the media and politicians go totally nuts about it? Here’s what  Damon Linker thinks:

“Degraded American public life”. This is another example of Wrongo’s column yesterday about how we’re all living in our virtual vertical communities. The Republican political vertical immediately locked in, like a cat watching a laser pointer, to this mostly low-risk intrusion into US airspace by China. From Forbes:

“Talking heads on cable TV are up in arms about the Chinese spy balloon that was floating across the continental US, before it was shot down Saturday afternoon. Conservative commentators have insisted President Joe Biden should’ve ordered the balloon be shot down earlier and that a foreign balloon flying over US territory never would’ve happened under President Donald Trump. But it did happen under Trump…”

It happened under Trump at least three times.

The Pentagon says it was definitely a surveillance balloon and that China had the ability to maneuver it using external propellers. OK, if you’ve ever sailed a boat even in a moderate breeze, paddled a canoe across a windy lake, or bicycled on a windy day, you know maneuvering in high winds is very difficult. So how will a balloon generate enough power to overcome the prevailing winds at 60,000’? And the balloon doesn’t have an aerodynamic shape. So bottom line, you aren’t controlling the path of a balloon in any sizable wind.

A balloon actually sucks for spying. A quick look at earth.nullschool.net shows that the current winds at the specified latitude are running between 50-100 mph. No balloon with a propeller can plow through that. It’s likely that the propellers aren’t for propulsion, but for changing the direction that the antenna is pointing, so that it can phone home.

It’s possible that as the Pentagon says, the deceased balloon was gathering data on our defenses, but all nations do that all the time. So where’s our politicians’ and the media’s common sense? Their hysterical reaction is totally on brand, but as always, very depressing.

We have to hope the politicians and generals who control America’s nukes have better minds than our GOP politicians.

Let’s deal with the question about why Biden didn’t shoot it down over land. One issue was that the debris field when the balloon remains hit the ocean was seven miles long. One advantage of knocking it down where they did is that the ocean is only about 50’ deep off the Carolina coast. Imagine a seven-mile debris field spread across any American state: It would be a fantastic opportunity for souvenir hunting.

Back in 1945, before WWII ended, Japan sent thousands of bomb-carrying paper balloons via the jet stream towards North America. Only a small percentage of the balloons reached land. But six people, five of them children, were killed by one balloon that landed in Oregon.

There’s a (possibly apocryphal) story about a US Navy ship firing on a suspected Japanese balloon until they finally realized that they were shooting at Venus.

Bottom line, Biden and the US military showed professionalism and caution in tracking and attacking the balloon. The US military was able to jam the balloon’s instruments as it crossed America, while collecting information about Chinese intelligence gathering capabilities. They shot it down when and where the risk to civilian casualties and property damage was deminimis. From Robert Hubbell:

“But the ‘spy balloon’ did allow the Chinese military to glean one significant piece of intelligence about America—that Republicans are clowns who cannot be trusted to run the US military again.”

One Republican said Biden should be impeached. Several wanted to “SHOOT IT DOWN NOW”. Consider this tweet from Rep. Joe Wilson (R-SC):

Does anyone believe the balloon threatened the lives of millions of American families? Or that Biden and Harris should resign? Wilson forgets to say that resignation would make House Speaker Republican Kevin McCarthy president. It’s just awesome how serious the Republican Party has become.

All of the hostile one-upmanship aimed at China over the balloon served to show that there is no downside to an American politician taking a hawkish stance towards China.

China remains a crucial trading and economic partner and competitor, but both Republicans and many Democrats are happy to take a battering ram to our relationship with China. And the media decided to work the Chinese balloon story rather than spend time talking about Friday’s blockbuster jobs report, or how unemployment reached a 50-year low.

That news wasn’t important or exciting enough when there was a Chinese balloon on the horizon.

America’s relationship with China has always been fraught. If you’re as old as Wrongo, you remember 1971’s Ping-Pong diplomacy, one of the first official contacts between the countries since before the Cold War.

You may ask, what’s happened since then? Well, the balls have gotten bigger.

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Sunday Cartoon Blogging – February 5, 2023

Everybody was talking about the Chinese balloon: It’s spying on us, and if Biden had balls he’d shoot it down. Well, on Saturday, Biden did just that. The Airforce shot it down in the Atlantic off of the Carolina coast. Wrongo is sure that our military will recover the important parts of the balloon. Once we take a look at the technology that the Chinese are using, we’ll know why the balloon was sent over the US, and confirm whether it is a device for spying or not.

We need to view the balloon saga in the larger context of our relationship with China. John Dean has a good observation:

“I’m starting to see China as an enemy. I type those words, of course, on my Chinese-made HP laptop. I watched news reports of the balloon on my Chinese-made TV. The chair I’m sitting in may even be Chinese. The only thing I’ve bought recently that isn’t Chinese, I’m sad to say, is the Chinese food I had for dinner last night, but I could be wrong.”

Our current relationship with China is complicated by our dependence on them for much of our manufacturing. They also are a huge export market for US commodities. As China has flexed its muscles, they have become an economic and geopolitical competitor with the US. Our relationship with them will become much more difficult in the coming years as we wrestle to contain them geopolitically in Asia, while blunting their advances in the rest of the world.

Dean points out that our trade with China has provided them with the resources it is using to build its military force. We need to wake up and wean ourselves off of Chinese goods. Otherwise, we’re paying for two militaries, ours, and theirs. On to cartoons.

One plan for the Chinese balloon:

The new DeSantis school library:

Revised College Board AP course seems fine:

Economy’s too good for GOP:

Sad truth:

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There Are No Partisan Facts

The Daily Escape:

Roaring Mountain, Yellowstone NP – January 2023 photo via Yellowstone NP. The steam vents are called fumaroles. With a limited water supply, the water in steam vents turns to steam and makes noise before reaching the surface.

Today let’s delve into the right-wing mind. Sadly we can’t go in too deep, because you know. Wrongo will try to connect the dots on a few ideas that three interesting people wrote about last week, First, the headline in Phillip Bump’s piece in the WaPo:

“There’s actually only one conspiracy theory: Democrats are evil.”

He’s writing about all of the online conspiracy theories surrounding the hammer attack on Paul Pelosi, and then generalizes from the specific:

“Last year, Pew Research Center found that 1 in 8 Republicans (12.5%) liked it a lot when their leaders called Democratic leaders “evil.” Another 16% said they liked it a little.”

So, 28.5% of Republicans think Dems are mostly evil. Bump offers the long laundry list of Democrat conspiracies propounded by Republicans.

  • For example, the 2020 stolen election shows that Democrats are dishonest and will do anything to retain power.
  • The “deep state” is out to get Trump and the Republicans. This leads to demonizing the FBI and CIA as liberals out to get Trump. This year, we can add the National Archives who just wanted their secret documents back.
  • These conspiracies have led the new Republican House majority to create a committee to look at weaponization of the FBI, DOJ and other agencies against Republicans.

Next, let’s look at recent polling on the economy. Matt Yglesias provides two charts that show the US partisan divide on the economy. First is how Democrats view their family’s economic situation over the past 8 years:

On Election Day (ED) 2016, 50% of Democrats said their family’s situation was about the same. On ED 2020, 50% said it was the same. After two years under Biden, it was 52%, so no change. On ED in 2016, about 32% of Dems said their financial situation had gotten better. That fell to about 10% by ED 2020 and is now about 23%.

Contrast that with what Republicans think now and what they thought on Election Day 2016:

From ED in 2016 when Trump won the White House until ED 2020 when he lost it, the percentage of Republicans who thought their financial situation was about the same went from 45% in 2016 to 55% on ED 2020, meaning that they were pretty satisfied with the state of the overall economy. But with Biden, that dropped precipitously to 21% in just two years.

Republicans who thought their personal financial situation had gotten worse stood at 47% in 2016, and just 10% in 2020. But in January of 2023, after two years of Biden, 74% say their financial situation has gotten worse!

But what really happened with the economy? Paul Krugman has thoughts about what we learn from watching only cable news: (brackets by Wrongo)

“Would you know that real gross domestic product has risen 6.7% under President Biden, that America gained 4.5 million jobs in 2022 and that inflation over the past six months, which was indeed very high last winter, was [growing at] less than 2% at an annual rate?”

How does Krugman explain the disconnect between actual economic data and perceptions? More:

“Partisanship is clearly part of the story….. 90% of Republicans said the national economy was poor. A longer view, from the Michigan Survey of Consumers, finds Republicans rating the current economy worse than they did in June 1980, when unemployment was above 7% percent and inflation was 14%.”

Welcome to the United States of Cognitive Dissonance.

There always has been cognitive dissonance in the world. It’s part of being human. But today, people sincerely love to complain and persist in wanting to see the bad side of everything. Egg prices are up? This economy sucks. All that Americans seem to be capable of seeing is the downside.

The country Wrongo grew up in is still here, but its culture has changed. As a member of the Silent Generation, Wrongo and most others wouldn’t have bet against the USA, or its people. But today, we can’t be certain. This dumbing down of American citizens has happened in rapid and spectacular fashion, and the fact-free perception divide is weakening our institutions. This will be extraordinarily difficult to bridge.

Wrongo has no silver bullet for fixing this, but a very basic way to start is to read up on the big problems. Speak up whenever you hear bullshit spewing. That takes courage, but it can’t go uncontested.

Attend your town meetings. Join groups that sponsor educational exchanges on issues. And vote. Vote in every election no matter how trivial.

Wrongo lives in a semi-rural town. When he overhears political talk, it can be staggering to learn what some otherwise smart people believe.

We don’t have to convert all of them, maybe getting 10% to land on the side of the actual data would create a permanent change in our politics.

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Sunday Cartoon Blogging – January 29, 2023

By now, everyone has heard about the killing of Tyre Nichols at the hands of five former Memphis police officers. Some of you may have also viewed the video of Nichols’s beating by those officers. We won’t be linking to it on this blog, ever.

Wrongo will have more to say about this during the week. But for now let’s understand that this is due in large part to the US failing to get police reform.  There was a comprehensive package of legal reforms, called the George Floyd Justice in Policing Act that passed the House in 2021 but could not break the Senate filibuster. On to cartoons.

Never forget that there are two Americas:

Congress is useless:

What we should mean when we say “Everything everywhere”:

What threatens school kids more?

Soon it will be on milk cartons:

Making good news into Fox News:

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What’s The GOP Plan For Negotiating On The Debt Limit?

The Daily Escape:

Dream Lake, Estes Park CO – January 2023 photo by Rick Berk Photography

(Wrongo and Ms. Right send healing thoughts to friend and blog reader Gloria R.)

We’re all aware that House Republicans are refusing to lift the debt ceiling unless Biden gives them well, something? And Republicans still haven’t decided what they want. The GOP also wants a balanced budget, but they can’t say what should go, or what should stay.

From the WaPo: (Brackets by Wrongo)

“They [GOP] say they want to reduce deficits — but meanwhile have ruled out virtually every path for doing so (cuts to defense, cuts to entitlements, wiping out nondefense discretionary spending, or raising taxes).”

The fact that Republicans are up in the air about what to do highlights the likely Democratic strategy is against their threats about the debt ceiling. Again, from the WaPo:

“Sensing Republicans are on the verge of a blunder in their schemes to use the debt ceiling to hold the economy hostage and try to extract draconian spending cuts, the White House has developed a two-part response strategy.

Part 1: Lay out the simple argument that Republicans are recklessly inviting an economic meltdown even by talking about a possible default.

Part 2: Force House Republicans to put forward a plan on the table and watch as they struggle with the fallout.”

The Democrats along with Senate Minority Leader McConnell (R-KY) are daring Republicans to put forward a plan. Senate Majority Leader Schumer (D-NY) said:

“If House Republicans are serious about taking the debt limit hostage in exchange for spending cuts, the new rules that they adopted require them to bring a proposal to the floor of the House and show the American people precisely what kind of cuts they want to make….”

Everyone who follows politics knows that Republicans never take much interest in fiscal sobriety when their Party is in control. They agreed to raise the debt limit three times while Trump was in power.

It seems that Republicans are doing the Democrats’ job for them. They are asking for an economic catastrophe and seeking draconian cuts that their base doesn’t want.

Consider the Republican desire to reduce our deficits. They have pledged to balance the budget (that is, to have a zero annual budget deficit) within 10 years. But they haven’t laid out any plausible mathematical path for getting there. And of the current debt ceiling, 90% of it was committed before Biden took his job.

Some Republican House members want to cut military spending, an idea that both Speaker Kevin McCarthy (R-CA) and Rep. Jim Jordan (R-OH) are on board with. But others, including House Appropriations Chair Kay Granger (R-TX), have said defense spending cuts aren’t on the table. Rep. Michael Waltz (R-FL) said:

“We’ve got to get spending under control, but we are not going to do it on the backs of our troops and our military,”

Waltz thinks Republicans should focus on “entitlements programs,” such as mandatory spending programs like Social Security, Medicare, and Medicaid. But the bi-partisan popularity of these programs makes them hard to cut.

And last Sunday, Rep. Nancy Mace (R-SC) was asked to name one thing she was willing to suggest as a spending cut. She instead stated things she wouldn’t put on the table:

“Well, obviously no cuts to Medicare or Medicaid or Social Security….That’s a nonstarter for either side.”

Wrongo has repeatedly suggested tax increases which would help lower deficits, but Republicans have ruled that out.

Instead they’ve changed the House rules so tax cuts will be much easier to pass, and tax increases harder to pass. The House’s rules package now says that any increase in taxes would require a three-fifths vote (60%) rather than a simple majority as previously.

They’ve also proposed doing away with income taxes, payroll taxes, estate taxes and even the IRS itself in favor of a supersized sales tax that would provide most revenue to the government. Republicans would substitute a 30% sales tax on all purchases and in exchange, do away with income, Social Security and Medicare taxes.

That means workers would keep the gross amount of their paychecks. But it also means that buying everything from groceries to automobiles would be hugely more expensive. It also provides a big tax cut for the wealthy and businesses.

The result is a smaller tax burden for the highest earners and a bigger one for people in the middle.

Once you reject trimming entitlements or defense spending and bake in the cost of the GOP’s proposed tax cuts, you’re left with an additional $20 trillion hole in the Federal budget over the next decade.

OTOH, the White House is expected to release its detailed budget in early March. It will build on budgets it has released previously. Republicans want Biden to negotiate on what to do about money we’ve already spent.

Try doing that with YOUR creditors.

 

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Monday Wake Up Call – January 23, 2023

The Daily Escape:

Near Government Camp, OR – January 2023 photo by Mitch Schreiber Photography

Everyone is talking about the national debt and/or about increasing the nation’s debt limit. Congress should increase the debt limit because it’s the right thing to do. But there are many in the “very serious” media who are concerned that the Fed can’t continue to hike interest rates to 5.0% or higher because the government can’t afford to pay such high interest rates on our gargantuan debt.

Some pundits are pushing the idea that the Fed must cut interest rates or else. Or else what? The US government won’t go broke, regardless of how high interest rates rise.

While it’s true that the government’s cost of borrowing rises when interest rates rise, what these pundits are missing is that US tax receipts (which are used to pay that interest expense) have also spiked. They’re also missing the fact that interest expense as a percent of tax receipts was at a historic low in Q1 2022. And while it has moved up, it remains quite close to historic lows. Interest expense as a percent of tax receipts is one primary measure of whether the government can afford the interest expense or not. Wolf Richter of Wolf Street provides us with a chart:

As you can see, while the percentage of interest/tax receipts has “spiked” in 2022, it was at a historic low in 2021. And compare that to when the ratio hovered around 50% in the 1980s and early 1990s. In Q3 2022, it was 22.9%, still very near a historical low.

One reason for this was that inflation helped to increase tax receipts thereby lowering the government’s burden for paying interest on our existing debt.

Between the Trump and Biden administrations, the government’s debt spiked by 34%, or by $8 trillion, in the past three years. That additional debt quickly added a lot of interest expense for the government, as we see with the spike above on the chart in 2022.

As older Treasury securities mature, and assuming the national debt doesn’t go down, they are replaced by new Treasury securities with today’s higher interest rates, and the higher interest costs of those new securities are starting to show up in the government’s interest expense. Richter says that total interest expense in Q3 2022 spiked by 24% from a year ago and by 43% from two years ago. This spike in interest expense looks like this:

And this scary chart is what the GOP will be presenting as their reason to cut the debt. When you omit the spike in tax receipts and the historically low level of interest expense as a percent of tax receipts, as we saw in the first chart, you’re not presenting the whole picture.

Another way to look at the situation is Government interest payments as percent of nominal GDP. This is a classic measure of the cost of government debt compared to the overall economy. Richter offers us another chart:

As you can see, by this measure, interest on our national debt remains lower than it was at any time between 1977 and 2003. And it has remained in a narrow band from 2004 to today.

Without question, we should reduce our national debt. But unless and until interest expense on our debt returns to the level of 50% of tax receipts as it was in the 1980s, we shouldn’t expect much to change in Washington. If it starts to get near those highs, maybe we’ll see action by Congress to increase revenues and reduce spending. And despite all the GOP’s screaming, the Federal Reserve is doing the right thing: Hiking interest rates to stem inflation.

Time to wake up, Congress! The Fed is trying to gently nudge you into thinking that the country needs to raise revenues while also cutting expense. You need to consider the revenue side of the equation more seriously, if for no other reason than what will happen to our currently high tax receipts whenever the coming recession strikes.

To help you wake up, listen to the late David Crosby’s song “Laughing” from his first solo album, 1971’s “If Only I Could Remember My Name. Crosby wrote it for the former Beatle George Harrison, who never used it, so Crosby used it instead:

Several legendary musicians appeared on this recording, including Graham Nash and Joni Mitchell on background vocals; Jerry Garcia on pedal steel guitar, and Bill Kreutzmann on drums. Garcia is magical.

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Sunday Cartoon Blogging – January 22, 2023

There’s a difference between America’s national debt and our debt limit. Without question, our national debt must be reduced. That can happen only two ways, or by a combination of the two. We can increase taxes, or reduce future spending, or do both.

The debt limit is how much in total the US government can borrow. It uses borrowing (issuing treasury notes and bonds) to meet obligations for previously contracted goods and services. This is what must be increased as soon as possible by both Houses of Congress.

But Republicans say they won’t agree to increase the debt limit without action to reduce the national debt. The national debt is the accumulation of all the annual deficits (and any surplus – thanks, Bill Clinton!) that various administrations have racked up. It currently sits at $31.4 trillion.

The four Republican presidents from Reagan to Trump are responsible for more than half of that debt; they added $17.46 trillion to it by running whopping deficits each year. Trump was responsible for nearly half of that, $8.2 trillion, in just four years. About $3.9 trillion was pandemic relief and $2 trillion was the big tax cut he gave to the wealthy.

Republicans can’t explain why they voted to increase the debt ceiling every year of Trump’s administration. Even as he was racking up trillions of dollars of debt by increasing the annual budget deficit from the $665 billion he inherited from Obama, to a whopping $2.1 trillion deficit in just four years  ̶   the highest in US history.

But in the past two years, Biden has cut that $2.1 trillion deficit by 33%, to $1.4 trillion. That isn’t stopping the GOP from screaming that spending has to be curbed because there’s a Democrat in the White House. On to cartoons.

A high-stakes game of chicken:

Their plan is to never have a plan:

Alec Baldwin’s on line one Mr. Speaker:

Truth is always in the eye of the beholder:

Floods in California have people looking for new places to stay:

David Crosby would be spinning in his grave:

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Citizen GenĂȘt

The Daily Escape:

Sunrise, after 10 inches of snow, Haywood County, NC – 2023 photo by Todd Roy

Over the holidays, Wrongo read “Dr. Benjamin Rush: The Founding Father Who Healed a Wounded Nation” by Harlow Giles Unger. Rush was a signer of the Declaration of Independence. And he was a social reformer almost before America had a unified society.

Rush treated both the poor and Blacks, even while struggling to attract paying patients. He was the first American physician to treat mental illness as a disease rather than as criminal behavior. And he served as surgeon-general of the Continental Army’s so-called Middle Department that included Pennsylvania. So he got to see Washington’s army at Valley Forge in the worst of times.

Today, let’s focus on an important moment in American history that occupies only a few pages of Unger’s book. You may have heard of Edmond-Charles (Citizen) GenĂȘt. He became France’s ambassador to the US during George Washington’s second term.

On February 1, 1793, the French Revolutionary government ordered the execution of King Louis XVI and then declared war on Britain. Britain responded by blockading French ports and seizing American and other country’s ships heading for those ports. Britain also impressed hundreds of American seamen, forcing them to work on British ships.

France responded by blockading British ports and seizing American ships trying to deliver goods to those ports.

Americans were immediately divided into two camps, those who were outraged by the British impressing our seamen, and those who were angry at the French for killing a King who had helped us overthrow the British a dozen years earlier. Half sided with their ancestral motherland, while the other half demanded that the US support France.

Washington was among the few who espoused neutrality.

Americans increasingly defined their domestic politics either by their solidarity with the French Revolution or their aversion to it. The French Revolution served to both consolidate the two parties in American politics and deepen the ideological gulf between them.

On April 8, 1793, France’s new ambassador, Edmond-Charles GenĂȘt arrived in Charleston with two sets of instructions: Publicly, he was offering a new treaty that would amalgamate the commercial and political interests of both nations into a “mutual nationalization of French and American citizens” (pg. 133 of Unger’s book), a kind of national alliance that would separate the US from England.

Unger says that GenĂȘt’s secret instructions were to foment revolution and bring the US under the political control of France.

GenĂȘt, aided by newspapers in Boston, New York, Philadelphia, and other cities, whipped up Francophilia among average people. GenĂȘt said Washington was pro-British. He organized a fleet of privateers to prey on Anglo-American commerce.

Anti-federalist governors in the south saw GenĂȘt as a means to weaken presidential power and restore the supremacy of the individual states over the national government, so they aided him. Genet soon had a fleet of 80 vessels patrolling American waters.

In the summer of 1793, GenĂȘt wrote to the French foreign minister:

“I have prepared the revolution of New Orleans and Canada…I have destroyed the maritime commerce of the English in these waters” (pg. 134)

He then made his way towards Philadelphia to present his credentials  to Washington, gathering support from Americans along the way. Unger writes:

“…when he arrived at the outskirts of Philadelphia…500 coaches filled with ardent Francophiles waited to escort him into the city…”

Vice President John Adams described:

“…the terrorism excited by GenĂȘt…when 10,000 people in the streets…threatened to drag Washington out of his house and effect a revolution in the government…”

Washington made plans to send his wife Martha and grandchildren to Mount Vernon and demanded that France recall GenĂȘt. But GenĂȘt left Philadelphia on the French flagship for New York, where more than 5,000 French sailors and marines joined welcoming NY crowds. This immediately led to violence, with Tory families fleeing the city. GenĂȘt then went ashore to mobilize the cheering Americans, who chanted (pg. 137):

“Down with Washington…”

On August 15, 1793, GenĂȘt was preparing to raise the French flag over New York  and proclaim that the US and Canada were French. But, no one marched in the streets supporting him, because yellow fever had struck Philadelphia, New York, and Boston. Most people became afraid to leave home for fear of dying from the disease.

In a way, the yellow fever epidemic of 1793 “saved” America from a second revolution. The army had been largely mustered out, so there was little that stood in the way of GenĂȘt’s ambitions. In the summer through the fall of 1793, 5,000 people (10% of the population) died of yellow fever in Philadelphia, and 730 died in New York. As a result, support for GenĂȘt  crumbled.

The yellow fever epidemic continued through November, when cold weather killed off the mosquitoes. GenĂȘt’s crew then mutinied, sailing back to France without him.

The French sent a new ambassador who arrived in December with a warrant for GenĂȘt’s arrest and execution. But Washington wouldn’t comply. Although the French were upset, Washington allowed GenĂȘt to stay in America, where he became an American citizen. He married Cornelia Clinton, the daughter of NY Governor George Clinton and settled on his own farm in Jamaica, Long Island.

A significant proportion of Americans have always been receptive to a charismatic leader with bad intentions, like GenĂȘt. In early American history, just as now, people responded to crisis not by uniting, but by doubling down on factionalism.

These things are still true today. Think about the factionalism surrounding Covid that killed many that shouldn’t have died. While, back then, perhaps the Republic was saved by an epidemic.

Think about the mob who tried to overthrow our elected government on Jan. 6. Their GenĂȘt still lives with us.

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