Monday Wake Up Call – February 11, 2019

The Daily Escape:

The Piedmont Kilns, Wyoming. They were built in 1869 to supply charcoal for the iron smelting industry in Utah. Part of a ghost town, three remain.

A wave of bankruptcies is sweeping the US Farm Belt, and Trump’s trade disputes are adding to the pain. The primary cause is low commodity prices that American farmers have experienced for the past few years. Throughout much of the Midwest, US farmers are filing for Chapter 12 bankruptcy protection at levels not seen for at least a decade.

From the WSJ:

“Bankruptcies in three regions covering major farm states last year rose to the highest level in at least 10 years. The Seventh Circuit Court of Appeals, which includes Illinois, Indiana and Wisconsin, had double the bankruptcies in 2018 compared with 2008. In the Eighth Circuit, which includes states from North Dakota to Arkansas, bankruptcies swelled 96%. The 10th Circuit, which covers Kansas and other states, last year had 59% more bankruptcies than a decade earlier.”

Those states accounted for nearly half of all sales of US farm products in 2017, according to USDA data. Since 2000, China’s share of our agricultural exports has increased from two percent to about 19% in 2017. China has become our largest agricultural trading partner.

The rise in farm bankruptcies tracks a multi-year slump in prices for corn, soybeans and other farm commodities caused by a world-wide glut. Prices for soybeans and hogs further declined after Mexico, along with China, retaliated against US steel and aluminum tariffs by imposing duties on our AG products, and then slashing purchases.

Farmers generally supported Trump’s tariffs when he started the trade war in 2018. China’s retaliation was to virtually cease purchasing American agricultural products. As an example, China moved the sourcing of soybeans from the US to Brazil. When a low margin business like farming loses 20% of sales, only those who aren’t in debt can survive. And most US farmers owe quite a bit to their bankers.

The Trump administration recognized the potential problem, and approved funding to bridge farmers across the decline in Chinese purchases, but the trade war has gone on for longer than anticipated.

Now, bankruptcies are way up, and exports to China are way down:

Source: Econbrowser

Unfortunately, we keep importing from China. But in the past year, the Chinese have stopping buying as much of our goods. Clearly, the bull our farmers got isn’t in their barn, but in the White House.

Republicans are saying that the surge in farm bankruptcies isn’t Trump’s fault, that the problem with the farm product glut started years ago. But, if Republicans want to give Trump credit for the good employment numbers, and a still-robust stock market, they have to blame him for the bad as well.

Time to wake up America! Disruption without a strategy brings chaos. And think back to the SOTU, when Trump said how he stood between us and socialism. But Trump’s picking winners and losers with his trade wars. He’s using tax-payer money to subsidize farmers damaged by his self-imposed trade wars. That sounds eerily like socialism to Wrongo.

Wake up to the fact that farmers are pawns in Trump’s capricious tantrums against China. Those who have played chess know that most of your pawns are gone by the end of the game.

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Sunday Cartoon Blogging – February 10, 2019

We start the new week as we ended it. Plenty of politics, not much in the way of progress for the country. Trump’s Friday physical didn’t go as planned:

Girl talk after the SOTU:

Executive time is seen as a good thing:

Trump hates House investigations, pledges to go another way:

VA governor Northam seeks place where moonwalking is OK for his political career:

Plutocrats favor the green deal we have, not the one we need:

Socialism for the rich is perfectly fine:

Trump announced North Korean summit, God shakes his head:

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Saturday Soother – February 9, 2019

The Daily Escape:

Coyote in Litchfield County CT – February 2019 photo by Sharon Shea

For more than 30 years, the Intermediate-Range Nuclear Forces Treaty (INF) has been one of the cornerstones of the international security system. But, on February 1st, Trump announced that the US would suspend its obligations under the INF Treaty. Shortly thereafter, Russia’s President Putin announced that Russia will also officially suspend its treaty obligations.

Trump swings another wrecking ball! Defense One reported that Trump said that the US:

“Will move forward with developing…its own military response options and will work with NATO members and other allies to deny Russia any military advantage from its unlawful conduct.”

This means that Trump will start the development, production and deployment of formerly INF-banned weapons.

Until the treaty took effect in 1988, the US had hundreds of nuclear-tipped ground-launched cruise missiles, or GCLMs all over Europe. Today, all cruise missiles are either air or sea-launched. New GCLMs are likely to be returning soon. Contenders include converting the sea-launched Tomahawk cruise missile, and the air-launched Joint Air-to-Surface Standoff Missile, or JASSM.

Walking away from the INF Treaty opens the door to both sides building land-based nuclear capable missiles with a range beyond 300 miles.

There are two things to think about: Cost, and Strategic necessity. Kingston Reif, a policy director at the Arms Control Association, said the cost of the new missile systems would be much higher than the $6 billion or so it cost in the 1980s.

On the subject of necessity, he says:

“The United States can already…threaten the same Russian targets that new ground-launched missiles prohibited by INF Treaty would….In addition, no European nation has agreed to host such a missile, which could take years to develop. And even if one in Eastern Europe did, such a deployment would be a significant source of division within the alliance—one Russia would be eager to try and exploit—be hugely provocative, and put missiles in a place where they would be especially vulnerable to Russian preemption…”

The downside to the US withdrawing from the treaty is that we currently have no strategy to prevent Russia from building and fielding even more and new intermediate-range missiles.

Since Russia already announced it will now build these new missiles, our NATO allies in Europe have decisions to make. They will have to pursue options to defend themselves, to mitigate the damage done by the collapse of the treaty.

We’re entering a new Cold War with Russia.

Some believe that the INF treaty is obsolete, because many nations are developing effective missiles and launching capabilities that will be outside the limitations of the INF. Since we all will continue to develop these technologies, maybe the best we can hope for is to negotiate new treaties that address this increasing lethality down the road.

OTOH, Trump and his neocons are doing everything they can to encircle Russia with missile bases while claiming the moral high ground. We should expect them to utilize Poland, the Baltic states, and possibly Ukraine (if they can get away with it), as forward missile bases.

They figure that since geography favors them, why negotiate if you can win? Russia already called our bluff. For this strategy to work, the US must threaten Russia from Europe while simultaneously putting Europe under our new missile thumb. It might work, but there are many moving parts.

Republicans of course supported Trump, cheering about the breakup of a treaty signed by Ronald Reagan. When Wrongo grew up, the threat of nuclear annihilation was real. We drilled for it in school. He then ran a nuclear missile unit in Europe at the height of the Cold War. These were formative experiences that implied very dangerous consequences.

And think about our domestic politics: If someone were to run in 2020 as anti-Cold War II, they would have to say we need to work with the Russians to find a peaceful way out of this mess. Trump will then run to their right, saying Russia must be stopped.

Scared yet? A presidency based on disruption will do that to you.

Time for your Saturday Soother. Try to unplug from all the data that are streaming into your life for a few minutes. Start by brewing up a strong cuppa Hula Daddy Kona Coffee ($45.95/half pound) from the Big Island of Hawaii. You can see their plantation here.

Now settle back and listen to Abba’s “The Winner Takes It All” performed as a guitar instrumental by Gabriella Quevedo:

For those who may have forgotten the lyric, it includes this:

The winner takes all

It’s the thrill of one more kill

The last one to fall

Will never sacrifice their will

Think there will be winners in the new Cold War?

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

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Another Lie From Trump

The Daily Escape:

The Cuernos del Paine in Chile – photo via Live Science. The 4,300-mile-long Andes, the longest continuous mountain range in the world, didn’t form slowly by one geologic plate sliding under another. They grew in two growth spurts helped by volcanic action. (Hat tip to Ottho H.)

What Trump said about El Paso in the SOTU:

“The border city of El Paso, Texas, used to have extremely high rates of violent crime—one of the highest in the country, and (was) considered one of our nation’s most dangerous cities. Now, with a powerful barrier in place, El Paso is one of our safest cities,”

Local politicians weren’t happy with Trump’s false claims that the city was violent and dangerous before a border wall was built. Trump was repeating bogus information from Texas Attorney General Ken Paxton. And, he had made the same claim at the American Farm Bureau convention in mid-January.

Here is an example of the local outrage. Jon Barela, the chief executive officer of the Borderplex Alliance, which leads economic development efforts in the El Paso region, tweeted:

Texas Monthly reports that El Paso has made lists of the nation’s safest cities for almost two decades. But what are facts when you have a wall to build on the back of a racist narrative?

Wrongo lived in El Paso for a time when he was in the military (Vietnam era), back before there was talk of a wall, before the Maquiladora factories became a part of NAFTA, when Ciudad Juarez was probably far more dangerous than it is today. But back then, El Paso couldn’t be considered dangerous for someone who went to college in Washington DC, and lived on the outskirts of NYC.

One state over in New Mexico, Governor Michelle Lujan Grisham, a Democrat, has ordered the withdrawal of the majority of National Guard troops stationed at the US state’s southern border, denouncing as “a charade” President Donald Trump’s warnings about migrants swarming the border, saying:

“I reject the federal contention that there exists an overwhelming national security crisis at the southern border, along which are some of the safest communities in the country,”

Are you getting the theme here? Two of the states closest to “the problem” say there isn’t a problem.

Kevin Drum at MoJo gathered the El Paso statistics. He shows that Trump cherry-picked the data, looking at 2005-2009. There was a spike from 400 crimes/100,000 people in 2005 to 450 crimes/100,000 people in 2008. Here is a chart showing the same statistics from 1993 to 2013:

Do you see the big reduction that came with the Wall? The Wall had almost no effect on crime in El Paso. It’s also important to remember that crime rates have come down throughout the US since the 1980’s.

The most damning fact about crime on the southern border is that it is way down. American Progress reports that:

  • Border cities are among the nation’s safest: Phoenix and other large border (and near-border) cities have some of the nation’s lowest crime rates, including San Diego, El Paso, and Austin
  • Border counties have low violent crime rates: Counties along the southwest border have some of the lowest rates of violent crime per capita in the nation. Their rates have dropped by more than 30% since the 1990s.
  • There’s no evidence of “spillover” of violence from Mexico: El Paso, Texas, has three bridges leading directly into Ciudad Juarez, Mexico, a city which has suffered a significant percentage of the national death toll brought on by the Mexican war on drug cartels, which approaches 23,000 today.
  • El Paso experienced only 12 murders in 2009, which was actually down from 17 in 2008. San Diego, California saw 41 murders in 2009, down from 55 in 2008, and Tucson, Arizona experienced 35 in 2009 a significant decrease from the 65 murders committed in 2008.

We should remember that Trump is from Queens, an outer borough of New York City. He lived there during the 1970s and 1980s, so he knows first-hand what living in a high crime city feels like. He also knows that the high crime he (and Wrongo) experienced, wasn’t caused by immigrants. That was when the Guardian Angels were founded in NYC. Trump lived there the whole time, he probably even took the subway.

His argument is false, and is clearly purely political. He’s playing to the fears of those suburbanites too intimidated to visit NYC, even if they live less than 25 miles away. His audience is suburbanites in the Midwest and Northern states.

These same people believe European cities like London and Paris are full of Muslim “no-go” zones. You can show them evidence that those cities are safer than their own suburbs, but that’s not the point.

Maybe “safe” really means “white”, so any place with too many non-whites is just too dangerous.

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SOTU: Boring Like the Super Bowl, But Without the Snacks and Beer

The Daily Escape:

The sleeping kid is Joshua Trump. He was bullied for sharing the same last name as, you know. The kid is one Trump who has already mastered “Executive Time”.

 Young Trump kinda sums up the SOTU, along with this:

Certainly looks like an “FU” clap from Nancy Smash. Photo by Doug Mills/The New York Times/Getty Images

Wrongo thinks the best part of the 1 ½ hour Trumpshow were the shout outs to people in the audience. They took up about 1/3 of the time, and provided some interest, even if most were ham-handed efforts to represent administration policy. These introductions of citizens in the SOTU audience have been around since Ronald Reagan in 1982, and usually give us a bit of a break from the eternal SOTU spewing.

Other than that? Vox makes a good point:

“There were two truly well-done sections of the speech. One was the troll of the Democrats present around the divisive term ‘socialism.’ The other was a series of moments on the stories of Holocaust survivors and World War II veterans.”

Most of the speech was either recycled campaign themes from 2016, or possible 2020 themes being screen-tested for the Republican faithful. Republicans in the room were very happy to see that Dems wouldn’t clap for the war on abortion, or for Trump’s pledge that America would never be a socialist country.

Wrongo thought that Trump’s review of the economy was effective. It is surprising that he doesn’t reference America’s late-stage economic recovery from the Great Recession more often. That, along with abortion, marauding immigrants, and socialism are setting the stage for what we can expect from Republicans over the next two years.

Why did Trump threaten Democrats about investigations? He said:

“If there is going to be peace and legislation, there cannot be war and investigation. It just doesn’t work that way!”

He’s saying that he will obstruct legislation unless Democrats stand down on investigating him. Fat chance. He also said this:

“An economic miracle is taking place in the United States — and the only thing that can stop it are foolish wars, politics, or ridiculous partisan investigations…”

Nobody should threaten America’s economy for personal reasons. That prompted some boos from Democrats. Even Republicans greeted Trump’s threat to economy with near-silence. And the GOP weren’t totally craven yes boys for Trump elsewhere in the speech. The part about trade was poorly received by GOP members. The part about pulling troops out of Afghanistan and Syria was also met with near-silence.

Nancy Pelosi said afterwards that even though Trump spoke of the honor of being in the House chamber to deliver the State of the Union:

“He threatened the United States Congress not to exercise its constitutional responsibility of oversight.”

The SOTU was as boring as Sunday’s Super Bowl, but without the uncertainty of knowing who would win or lose.

Even before Trump opened his mouth at the SOTU, it was clear that America would be the loser.

 

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Should America Intervene in Venezuela?

The Daily Escape:

Bald Eagle on the Housatonic River, CT – February, 2019 photo by JH Clery

On Sunday’s Face the Nation, Trump was asked about Venezuela and whether he’d negotiate with President Maduro to convince him to exit. Trump put military intervention squarely on the table:

“MARGARET BRENNAN: What would make you use the U.S. military in Venezuela? What’s the national security interest?

DONALD TRUMP: Well I don’t want to say that. But certainly it’s something that’s on the- it’s an option.”

This seems to be part of a larger Latin American plan. The WSJ reports that the Trump administration’s plans include regime change in Venezuela, Nicaragua and eventually Cuba. This is a multiyear neocon project that has at least some bipartisan political support. It may require military force, as Trump indicated to CBS that he’s willing to consider. One thing that the WSJ reports is this:

“US law-enforcement officials say they have evidence Mr. Maduro directed state resources to create what they allege has become one of the most powerful international narco-trafficking operations in the world, and with links to Hezbollah, the Lebanese group designated by the US as a terror organization.”

So, there you have the first Western Hemisphere argument to “fight them over there, rather than fight them here”.

As we said on Saturday, nothing unites a country like a sovereign enemy on its borders. Venezuelans may hate Maduro, but they also hate the US. China and Russia may be worried about the $50 billion and $17 billion Venezuela owes each respectively. Turkey has also supported Maduro. Although they all are Maduro’s allies, it is unclear if they would be willing to help, should the US intervene.

The consequences of all of our former interventions should be screaming at us. But, John Bolton, Mike Pompeo and Donald Trump seem deaf to the messages. Bolton said:

“We think stability and democracy in Venezuela are in the direct national interests of the United States right now…The authoritarian regime of Chávez and Maduro has allowed the penetration by adversaries of the United States, not least of which is Cuba.

Some call the country ‘Cubazuela’, reflecting the grip that Cuba’s military and security forces have on the Maduro regime. We think that is a strategic significant threat to the United States and there are others as well, including Iran’s interest in Venezuela’s uranium deposits.”

Maduro is no prize. The Economist reports: (brackets by Wrongo)

In the past five years GDP has fallen by half. Annual inflation is reckoned to be 1.7m%…which means that Bolívar savings worth $10,000 at the start of the year [will] dwindle to 59 cents by the end….People are malnourished and lack simple medicines, including antibiotics. Hospitals have become death traps for want of power and equipment. Blaming his troubles on foreign conspiracies, Mr. Maduro has rejected most offers of humanitarian aid.

Juan Guaidó, head of the Maduro opposition, and President of the National Assembly, has support from the EU, and the Lima Group of 12 Western Hemisphere countries (including Argentina, Brazil and Canada). The US recognized Guaidó early.

The question is, should we intervene at all? And if the answer is yes, how should we intervene?

The US is still Venezuela’s main trading partner. Last week, we imposed curbs on purchases of the country’s crude oil, and a ban on imports from the US of the diluents that must be blended with the extra-heavy oil from the Orinoco Belt to allow it to flow through domestic pipelines. The first hits Venezuela’s oil exports, while the second curbs their production. This will reduce revenue from oil exports by more than $11 billion.

By ordering that payments for Venezuelan oil be put in bank accounts reserved for Guaidó’s government, the US hopes to asphyxiate the regime, expecting that the armed forces will then switch sides to Guaidó.

Venezuelans face the dreadful task of having to topple their own government. This primarily means persuading their army to change sides. Other nations can pledge moral support to Juan Guaidó. But sanctions and US threats may prove counterproductive.

Venezuela poses no threat to US security. Since GW Bush, we’ve found excuses to attack Iraq, Afghanistan, Libya and Syria. We’ve imposed economic sanctions on Russia, Iran and Myanmar. The gain for our security has been negligible.

Military intervention has become an occupational disease of America’s leaders.

The urge to help Venezuelans in need is natural. Doing nothing is painful and seems callous. But will intervening really help? Even states with despotic leaders are sovereign. They must make and correct their own mistakes, and ultimately, be strengthened by doing so.

Regime change in Caracas is one possible outcome of our intervention. Civil war is another.

It is a certainty is that American lives and money will be lost.

Trump must choose wisely if intervention is on the table.

Any bets on that?

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Saturday Soother – February 2, 2019

The Daily Escape:

Hoggar National Park, Algeria – 2015 photo by Amri Mohammed

The blog Political Violence @ a Glance posted an article, “Three Lessons from the History of Foreign-Imposed Regime Change” by Melissa Willard-Foster, an assistant professor of political science at the University of Vermont.

She puts the Trump Administration’s support of Venezuela’s opposition leader, Juan Guaidó, in perspective. Despite the fact that while Trump was running for president, he promised to “stop racing to topple foreign regimes,” he’s now saying Venezuela’s president Maduro must go.

According to Willard-Foster, there is a long tradition by American presidents of attempting Foreign-Imposed Regime Change, or FIRC. She lays out three FIRC lessons from our history:

Lesson #1

The more fragile a leader’s political power is, the less likely that leader will cave in to foreign pressure. Weak leaders are difficult to coerce. If a foreign power demands change, the more the incumbent fears an attack by domestic enemies. The incumbent becomes very difficult to coerce.

But politically weak leaders often seem relatively easy to overthrow, and their domestic enemies are more than happy to help the foreign power take them out. Willard-Foster’s research shows that the probability of FIRC rises by 112% for leaders with at least two predecessors taken out by a coup, or rebellion in the past ten years.

Lesson #2

America’s overthrow of Panama’s Manuel Noriega demonstrates what happens when the domestic politics in the foreign power’s country make it politically feasible for the foreign power to take military action. Like Maduro in Venezuela, Noriega railed against US imperialism and broke off relations with the US. When crises escalate, a single incident can lead to military action, and that happened in Panama. When a US service member died in December 1989 after an encounter with Noriega’s forces, the Bush administration had the domestic political cover it needed. Chairman of the Joint Chiefs Colin Powell, made the case for intervention. He argued: (brackets by Wrongo)

“There will be a few dozen casualties if we go [in]…If we don’t go, there will be a few dozen casualties over the next few weeks, and we’ll still have Noriega.”

The US decided that coercing Noriega wasn’t changing anything, but regime change by force could.

The risk of a US military escalation may explain why Maduro offered to negotiate with the opposition—he wants to avoid giving Trump justification for military force.

Lesson #3

The third lesson from the history of FIRC is that no matter how disastrous the last FIRC attempt was, policymakers still believe it will work this time. From Willard-Foster:

Whatever approach failed last is usually what policymakers avoid the next time. When George H.W. Bush and Bill Clinton’s indirect approach to toppling Saddam Hussein failed, George W. Bush capitalized on the post 9/11 public mood for war to launch an invasion. The lesson Obama drew from the costly Iraq occupation was to avoid using troops to oust Libyan leader Muammar Qaddafi. The fallout in Libya then convinced Obama to avoid using military force in Syria, where he reluctantly funded the Syrian opposition.

Trump’s current Venezuelan approach is an indirect strategy, relying on economic and diplomatic pressure. Whether Maduro stays in power largely depends on the Venezuelan military. If Russia and China can blunt Trump’s economic pressure, Maduro may keep the military’s loyalty.

If China and Russia succeed in propping up Venezuela’s economy, Trump will have two options: Continue calling for regime change, while doing nothing about it, (as he’s doing with Iran) or employ military force. If protests grow, this will suggest Maduro’s position is weakening, which could cause Maduro to lash out, and possibly provide political cover for Trump choosing military force.

In supporting Guaidó, it’s unclear what path Trump will take. If, like Noriega, Maduro believes caving in to US demands will imperil his political (and personal survival), he’ll dig in.

But, a weakened Maduro appears, and still digs in further, the more likely it becomes that Trump will continue the tradition of forcibly toppling foreign regimes.

Time to move on from another week of “All Trump, all the time” to the anticipation of gorging ourselves during the halftime show of Sunday’s Super Bowl. You need to prepare for the chili, nachos, dips, chips and alcohol by relaxing today with a Saturday Soother.

Start by brewing up a strong cup of Honduras Las Flores Parainema ($22/12oz.). It is sourced by the Brooklyn NY-based Café Grumpy, an aptly-named vendor for our times.

Now settle back in a comfy chair, and take a few minutes to listen to Sarah Chang play Elgar’s888 composition, “Salut d’Amour, Op.12”, accompanied by Andrew von Oeyen, on piano. Chang is American, born in US, and raised in New Jersey:

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

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It’s Time to Raise Taxes

The Daily Escape:

Autumn in Hunza Altit Valley Pakistan – 2017 photo by Nasr Rahman. This shows that beauty can exist in very difficult places.

In 1785, Thomas Jefferson called for a geometric progression in taxes on assets of property holders as a way of lessening inequality. People with more assets would pay much higher taxes. Today, we’re still in search of policies that will do the trick. From The Fiscal Times:

Democratic Sen. Elizabeth Warren and Rep. Alexandria Ocasio-Cortez have sparked intense debate this month by proposing higher taxes on the rich, with Warren calling for a wealth tax and Ocasio-Cortez proposing a 70% top marginal tax rate.

But, Senate Republicans are moving in the opposite direction. Three GOP senators reintroduced legislation to permanently repeal the federal estate tax. The 2017 GOP tax overhaul has already reduced the number of estates subject to the tax by roughly doubling the value of assets that can be excluded from the tax. For 2019, this tax will only be paid by 1,700 families, but that’s all too much for Republicans.

Axios just reported on what Americans think about taxes:

Polling has found tax increases on the wealthy to be popular. A survey earlier this month by The Hill and HarrisX found that 59% of registered voters, including 45% of Republicans, support increasing the top income tax bracket to 70%. A Fox News poll released last week found that 70% of voters favor tax increases on families making over $10 million a year and 65% favor tax hikes on incomes over $1 million annually. Paying taxes is a complicated and controversial issue. What is not controversial is the need for people to take advantage of tax services that can help ensure they pay the right tax and thus appease the ever-lurking IRS. Going to http://daveburton.nyc/tax-services-nyc/ will provide more detail on this.

Those numbers suggest that a complete repeal of the estate tax might be about as popular as the polar vortex.

This shows how vast the gulf is between Republicans and Democrats on taxes. A poll by Axios, along with SurveyMonkey, ironically presented at Davos, showed that 70% of Americans think the economic system is skewed toward the wealthy and the government should do more to fix it. It further showed respondents are ready to vote for a 2020 candidate who agrees.

  • 58% of people surveyed say that “unfairness in the economic system that favors the wealthy” is a bigger problem than “over-regulation of the free market that interferes with growth and prosperity
  • Among 18-24 year-olds, that gap is a chasm: 76% to 21%
  • Among those 65 and older, it’s a very narrow 51% to 46%
  • 89% of Democrats agree
  • 68% of independents agree
  • But 77% of Republicans say over-regulation of the free market is a bigger problem than economic unfairness
  • A huge majority of Democrats (90%) said they would be excited to vote for a candidate who promises to reform the economic system, with 71% of independents saying the same.

(SurveyMonkey’s online poll was conducted January 16 through 18, 2019 among a national sample of 2,277 adults.)

After WWII, America had very high marginal tax rates, and one result was corporate income was reinvested in the company, rather than given to top management or shareholders. Why give 70% of every dollar to the government?

Back then corporations, in exchange for limited liability, assumed they had fiduciary duties to the public and to their employees as well as shareholders. But the Right got behind the doctrine that a corporation’s only duty was to their shareholders. CEO’s became significant shareholders through stock options.

Then, Reagan and Bush lowered taxes on corporate and personal income, and dividends.

Our basic political issue in America has become: “Does the economy exist to serve the nation, or does the nation exist to serve the economy?”

Our affirmative vote must be for the economy to serve the nation. Over the past 40 years, we have reduced taxes for high earners and corporations. We’ve added loopholes that subsidize corporations, but our need for infrastructure spending hasn’t declined, and our military spending has grown dramatically.

Over the past forty years, the share of income taxes paid by corporations has declined. It is now only 9% of US government tax revenues. It was about 24% in 1960.

We’ve financed the tax cuts for high earners and corporations with ever growing budget deficits. The golden age for these policies must end now.

We need to go back to the days of socially responsible capitalism, not the predatory capitalism we have today. High marginal income tax rates will help. In addition, taxing dividends at the same as ordinary income is a good idea.

Let’s raise the capital gains tax above its current 20% rate.

Let’s find a Constitutional way to tax wealth as Elizabeth Warren suggests. Add a very small transaction tax on sales of stock on all public markets.

It’s time to move past the politics of “What can America do about inequality without corporations and rich people actually giving anything up?

This isn’t an anti-corporate, anti-wealth assault, it is a necessary corrective to bad tax policy from the 1970s to today.

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Intelligence Chiefs Contradict Trump

The Daily Escape:

Edworthy Falls, Elbow Pass, Kananaskis, Alberta, CN – 2018 photo by sluis0717

Just when Wrongo was beginning to think we would make it to 2020 alive and in one piece, testimony by the US Intelligence Chiefs had quite a bit to say about how the world could still blow up. This from Booman: (Brackets by Wrongo)

“In a written report and [subsequent] congressional testimony before the Senate Intelligence Committee on Tuesday, the senior members of the United States intelligence community had some interesting things to say. The most important arguments they made directly contradicted their boss, the president.”

They said that North Korea is unlikely to give up their nuclear program, and that Iran is not currently pursuing their nuclear program. Trump is holding a second summit with North Korean leader Kim Jong Un in late February. Last week, Trump said that the two sides are making progress in efforts to fully denuclearize the Korean peninsula.

The Intelligence Chiefs assess that Russia will continue to interfere in our politics and our elections. They think that ISIS is far from defeated. They reiterated what a report released to Congress last week by the Pentagon said, that climate change is a national security threat.

Now, the intelligence community doesn’t always get it right, but Trump is on the opposite side of each of these assertions. More from Booman:

“We’re supposed to have a chief executive and commander in chief who is a customer for this kind of intelligence. Our president is supposed to be the primary customer for these types of assessments.  But that’s not the situation we have in this country right now. At the moment, our president has taken public positions contrary to every one of the assessments…and he’s simply not interested in contrary evidence. He is certainly not interested in being contradicted.”

It’s a huge problem when Trump, who makes the final decisions on what we’re doing geopolitically, is fact-free when it comes to threats to our security. Fortunately, the Intelligence Chiefs seem willing to provide honest threat assessments, and testify about them before Congress.

But, there are people within the administration who support whatever Trump wants. Some are even willing to slant the information they provide to the press and to Congress if it supports the president’s stated position. Trump’s position has been that disruption is at the heart of his geopolitics.

In just the past few weeks, we’ve gotten quite a few things wrong. (h/t Arms Control Wonk)

  • On December 6th, the United Nations General Assembly rejected a US resolution to condemn the Islamic militant group Hamas for violence against Israel. The embarrassing vote, which required a two-thirds majority, was 87 in favor to 58 opposed, with 32 abstentions.
  • On December 12th, Secretary of State Pompeo blasted Iran at the UN Security Council and received no support from US allies for walking away from the nuclear deal. In fact, US allies Britain, France and Germany praised Iran for holding up its end of the bargain.
  • On December 21st, the US barely rounded up more votes than Russia on a Russian resolution at the UN calling for the preservation of the Intermediate-range Nuclear Forces Treaty. The vote was 46 against to 43 in favor, with 78 abstentions.
  • On January 10th, Pompeo, speaking in Cairo, declared, “Let me be clear, America will not retreat until the terror fight is over.” The next day, the front-page headline in the New York Times was “U.S. Begins Syria Withdrawal, Amid Uncertainty Over Strategy.”
  • On January 14th, en route to Saudi Arabia, Pompeo declared he was “confident” and “optimistic” that he was nearing a deal with Turkey on a mutually agreeable exit plan from Syria. Later, Trump tweeted that he would “devastate Turkey economically if they hit Kurds.”

On January 22nd Pompeo spoke to the assembled billionaires at Davos:

“Is this pattern of disruption a force for good or not? I’d argue this disruption is a positive development.”

Most of us would say that’s crazy talk.

The Intelligence Chiefs have done everything except sound an air raid siren about this administration’s foreign policy bungling. There’s no indication that the Senate Republicans have mustered the gumption to act on their alarm.

And now, John Bolton tells everybody that Trump wants to send 5,000 troops to Columbia as part of its failing Venezuela strategy.

In another ominous sign, Pompeo added Elliott Abrams, a neocon who was an actor in the Iran-Contra mess, as a Trump administration special envoy overseeing policy toward Venezuela. Maybe you remember that Abrams was pardoned for his Iran-Contra role.

Just two more neocons, completely lacking in principle, but flush with Trump’s authority to disrupt another part of the world.

Read the report, and then think about how it squares with Trump’s policy.

You’ll agree that this will all end perfectly.

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