Congress – Page 48 – The Wrongologist

September 11, 2016

(There will be no cartoons today. Instead, Sunday cartoon blogging will be tomorrow, Monday 9/12.)

wtc-idealized

After 15 years, some of the sharp pain of the events of 9/11 have faded, and an idealized view of the towers like this one, is all we need to take us back to that point in time when American invincibility ended. We remember the tragedy, but perhaps we now have enough distance from it to begin to put 9/11/2001 in a context for today.

Tom Englehardt makes the point that on 9/11, al-Qaeda launched a four-plane air force against the US, and now, 15 years later, the air war still has not ended. Englehardt states that the costs have been staggering. Pentagon figures show that just since 2014, the cost of the air war to the taxpayers has been $8.4 billion.

The point behind these numbers is that America’s air war in the Greater Middle East and Africa has become institutionalized, and is now a part of our politics. No future president will end our drone programs. In fact, both The Pant Suit and The Pant Load are essentially committed to continuing the US air war for at least their first term in office.

Mohammad Atta, the kingpin hijacker, pursued a master’s degree in city planning at the Hamburg University of Technology, where he wrote his thesis on urban planning in Aleppo, Syria. Slate’s Daniel Brooks traveled to Hamburg in 2009 to read the thesis and try to get a sense for how Atta saw the world:

The subject of the thesis is a section of Aleppo…Atta describes decades of meddling by Western urban planners, who rammed highways through the neighborhood’s historic urban fabric and replaced many of its once ubiquitous courtyard houses with modernist high-rises. Atta calls for rebuilding the area along traditional lines, all tiny shops and odd-angled cul-de-sacs. The highways and high-rises are to be removed —in [Atta’s] meticulous color-coded maps, they are all slated for demolition. Traditional courtyard homes and market stalls are to be rebuilt.

We see Atta’s commitment to the culture of Islam:

For Atta, the rebuilding of Aleppo’s traditional cityscape was part of a larger project to restore the Islamic culture of the neighborhood, a culture he sees as threatened by the West…In Atta’s Aleppo, women wouldn’t leave the house, and policies would be carefully crafted so as not to “engender emancipatory thoughts of any kind,” which he sees as “out of place in Islamic society.”

As a student, Atta called for demolishing the western-style high rise buildings in Aleppo. He then got the assignment to crash a plane into America’s tallest and most famous high-rise.

The circularity is striking. The decision to attack America led to the US decision to invade Iraq. That led to the Shia takeover of Iraq, which led to a Sunni exodus into Syria. The Sunni exodus, along with the Arab Spring, led to the on-going anti-Assad revolution in Syria, which led in time to the destruction of the rebel-held parts of today’s Aleppo.

Atta’s demolition plans have been wildly successful.

Finally, we have spent $1 trillion since 9/11 to protect the homeland from terrorists. Are we safer? On the positive side of the ledger, the 9/11 attack killed almost 3,000 people, while the total deaths by jihadists on US soil since 9/11 is 94 people. On the negative side, it remains questionable if we are safe from future terrorist attacks.

We are safer from the 9/11-style orchestrated attack. It’s harder for terrorists to get into the country, and harder for them to pull off something spectacular. But, as the Orlando massacre reminds us, the world is populated by lone wolves, and those living among us can easily obtain military-grade weapons. This makes their attacks much more lethal, and harder to detect in advance.

Our defenses are stronger, but we are trying to defend against more and different threats.

Again, focus on the political: We live in an America where one terrorist slipping through the armor is deemed to be total failure politically. Sooner or later, we must accept that we can’t continue a “zero terrorist events” policy, and Congress can’t use “zero events” as an excuse to make everything a top priority.

Politicians won’t prioritize among the programs for anti-terrorist funding, because they fear looking weak on terror. They also want to keep getting PAC funds from defense contractors. That means our political leaders will declare everything a top priority. In fact, 119 Congressional committees or subcommittees assert some kind of jurisdiction over the Department of Homeland Security (DHS).

Everybody has a finger in the pie.

We need to start making better decisions and fewer enemies. Let’s start by asking the presidential candidates:

What have you learned from our 15 years of unsuccessful wars in the Middle East, and how would you apply those lessons in your administration?
Do you agree with the Obama administration’s plan to spend a trillion dollars modernizing our nuclear weapons?
What is your strategy to protect against cyber warfare?
How will you address the on-the-ground complexities of the Syrian civil war and of the Greater Middle East?
Is China, Russia, or ISIS our greatest threat?

At 15 years post-9/11, these questions should be answerable by ANY prospective US Commander-in-Chief. (Sorry, Gary Johnson)

Insist on better answers.

Congress Returns to Do (Not) Much

From Roll Call:

After the longest summer break in modern times, lawmakers are required to accomplish a single legislative task before leaving again. But it’s a job far more politically fraught than it is procedurally simple: Assuring normal government operations continue through the end of this budgetary year and into the new one.

That’s right, once again, it’s time to fight about funding the government. And as Booman says,

This ridiculous election season would not be complete without the threat of another government shutdown, and how much money would you be willing to risk betting on Mitch McConnell and Paul Ryan to find a way to pass a continuing resolution that either the majority of their own caucus would support or that relies (again) on mostly Democratic votes?

The potential stalemate over spending is a headache for Senate Majority Leader Mitch McConnell (R-KY) and House Speaker Paul D. Ryan (R-WI) who would like to avoid a shutdown threat just weeks before the election.

The Tea Party and GOP conservatives want to kick the can ahead for six months with a temporary resolution. But Democrats and some Republicans want to finish the annual budget work in the lame duck session after the election.

Both sides are digging in for a fight.

This could become an object lesson on why Republicans shouldn’t be in the majority. The party with the majority in the House is supposed to produce the bills and along with the Senate, supply the votes to pass appropriations. But, John Boehner couldn’t do it, because the Freedom Caucus and the other conservative R’s wouldn’t work as a coalition with other Republicans and/or Democrats to actually pass spending bills.

Ryan was able to do it last time, but it isn’t looking like those Republican factions will roll over again.

If Ryan and McConnell want to buck their own members on the length of the continuing resolution, the Dems are free to refuse to provide any votes. And the Democrats do not have to protect the sitting president, so they can watch as the GOP twists in the wind.

Fun times on Capitol Hill!

Here are a few links to news you may have missed over the holiday:

Experimental new opioid blocks pain without being addictive or deadly in primates. In monkeys, the drug is a highly effective pain reliever without downsides. It needs more trials, including in humans. Meanwhile, the DEA is attempting to ban a natural, safe herb which has been used for thousands of years to do the same thing.

Holy Labor Day: On Friday, an estimated 150 million workers refused to show up for work in India and instead took to the streets to demonstrate against labor conditions. The unions involved issued 12 demands to Prime Minister Modi, including raising the minimum wage, introduction of universal social security, and a minimum pension.

Is an end to the Asian sweatshop in sight? A recent report from the International Labor Organization found that more than two-thirds of Southeast Asia’s 9.2 million textile and footwear jobs are threatened by automation. Here are the numbers: 88% of those jobs in Cambodia, 86% in Vietnam, and 64% in Indonesia. Will this be good for the workers? Doubtful.

13 Tips for reading election polls like a pro. After Labor Day, the polling deluge will begin. A guide to making sense of it all.

Boeing gets $2B in bonuses for flawed missile-defense system. From 2002 through early last year, the Pentagon conducted 11 flight tests of the nation’s homeland missile-defense system. The interceptors failed to destroy their targets in six of the 11 tests — a record that has prompted independent experts to conclude the system can’t be relied on to foil a nuclear strike by North Korea or Iran. Yet the Pentagon paid Boeing, the prime contractor, $1,959,072,946 in performance bonuses for a Job? Well? Done?

Maybe we shouldn’t complain: The US government is spending money. Money = jobs. Of course, money also = corruption. And isn’t it a good deal if Boeing’s shit doesn’t work?

Monday Wake Up Call – Rule of Law Edition

While America celebrated the Labor Day weekend, we overlooked an extremely important decision by a three-judge panel of the US Court of Appeals for the Ninth Circuit.

Last week, they issued a sweeping decision in the Federal Trade Commission v ATT, that drastically restricts the Federal Trade Commission’s (FTC) consumer protection authority over companies that offer “common carrier” services (e.g., telephone services, mobile data, and internet services) whether or not these services comprise their core business. Moreover, since no other federal agency has the necessary scope of regulatory authority over this area, if this decision stands, significant activities of such companies would become largely unregulated.

As the WaPo reports:

The ruling could wind up giving Google and Facebook — not to mention other companies across the United States — the ability to escape all consumer-protection actions from the FTC, and possibly from the rest of government, too, critics claim, unless Congress intervenes.

A little history: The FTC had brought an action against ATT over the adequacy of the company’s consumer disclosures regarding its data throttling plan, by which ATT intentionally reduced the data speed of customers to whom it had sold unlimited mobile data plans:

In 2007, ATT became Apple’s sole wireless provider for iPhone.
In 2011, ATT began reducing the speed at which unlimited data plan users received data on their smartphones.
Under ATTs data throttling program, unlimited data plan customers were throttled for the remainder of a billing cycle once their data usage during that cycle exceeded a certain threshold.

So the FTC filed suit against ATT. The FTC’s argument was that ATT was not providing an “unlimited” service, which is what subscribers thought they were buying. After signing up the initial subscribers, ATT changed to tiered plans, under different contracts. And ATT neglected to inform the original customers – the ones who thought they’d purchased an unlimited plan – that they weren’t getting what they paid for.

But the FTC lost. To understand the complicated legal issues and why the FTC lost, you can read all about it here.

The implications are huge. The decision means that any company that creates or purchases either a phone company or an internet service provider (ISP) can escape federal consumer protection regulations entirely. This is particularly important for individual privacy and security matters, since the FTC currently is trying to impose comprehensive privacy and data security regulations on ISPs, and this decision may hamper that effort. After all, big data has been collecting for years now and there is so much data on millions, if not billions of people, the population are starting to understand the risks of their data security with many big companies.

The court decided that the FTC lacks authority to regulate common carriers. So, no matter how egregious the company’s conduct– even for false, deceptive, misleading practices, the FTC would be unable to do anything about it. Nor, at the moment, can any other federal agency.

The ATT case concerned regulation of advertising. But, since the court’s decision rejected outright the FTC’s claim to be able to regulate any activities of companies deemed to be common carriers, it is not limited to deceptive advertising alone. Facebook and Google already gorge themselves on your personal data and the decision prevents the FTC, the agency that has a track record of regulating privacy issues, from exercising any oversight of these activities (provided that Facebook and Google make the appropriate acquisitions or otherwise position themselves to qualify as common carriers).

So it’s time to wake up America! The steady erosion of your privacy and consumer protection rights continues under the flag of “the rule of law”. In the REAL world, the wealthy and powerful are often above the law. The Wall Street banking cartels committed mortgage fraud, foreclosure fraud, and securities fraud. They laundered money for terrorists and drug cartels. They rigged interest rates. Aside from stockholders paying token fines, no human was prosecuted for these massive, organized criminal activities.

Let’s groove to “I Fought the Law”, written in 1958 by Sonny Curtis of the Crickets, and later popularized by the Bobby Fuller Four who had a top-ten hit with it in 1966. It was also recorded by the Clash in 1977, and Green Day in 2004. In 1989, during the US invasion of Panama, the US military blasted loud rock music—including the Clash’s version of “I Fought the Law“, to pressure Manuel Noriega to surrender.

The guitar riff in this Bobby Fuller version sounds positively Hollyesque:

After this decision against the FCC, maybe in 20 years, instead of saying “he got railroaded”, we’ll be saying “he got telecommed”.

For those who read the Wrongologist in email, you can view the video here.

Happy Birthday to our National Park Service

100 years ago yesterday, Woodrow Wilson signed the bill that created the National Park Service (NPS). The National Parks are truly a great American resource, showing us nature in a near-pristine form, much as it might have been thousands of years ago. The parks also give us insight into places that are an important part of our national heritage, such as battlefields, or landmarks, like the Statue of Liberty.

There was a time in America when protecting our heritage through preserving open space was thought to be a civic duty. Alas, that is no longer considered a responsibility by recent Congresses. Obama has used the Antiquities Act as a way around the stasis in Washington, creating several national monuments.

The most recent is the Katahdin Woods and Waters National Monument in northern Maine. There have been calls for a national park in northern Maine for a very long time, but the lack of federally controlled land and the hostility of local residents who believe the timber industry is going to make a comeback, made it impossible to get a park designation. But Roxane Quimby, founder of Burt’s Bees, gave almost 90,000 acres of pristine land to the government to help make something happen.

Opinions in Maine were mixed. There are more than a few folks who want the land to remain available to the paper mills, should the paper industry ever return to Maine. Republican Gov. Paul LePage denounced Quimby’s donation:

That’s one way to get out of paying taxes to the state of Maine…It’s also an ego play for Roxanne Quimby and Senator Angus King. It’s sad that rich, out-of-state liberals can team up with President Obama to force a national monument on rural Mainers who do not want it.

Last time we checked Quimby and King were in-state liberals, and the land was given to America, not to Mr. Obama.

Of course, the NPS faces major problems on its 100^th birthday. An NPR report indicated that the service is facing challenges like climate change, overcrowding, underfunding and relevancy. Regarding climate change, the parks are having to adapt to rapid changes as we saw in Glacier National Park, where most glaciers could be gone by 2030. The parks are trying to educate the public about climate change, despite continued hostility from Republicans who refuse to fund it.

Relevance is a big issue. Surveys show that the average park visitor is 41 years old and white, not the future of a young, diverse majority America that will be here about the same time as the glaciers disappear.

Finally, the number of sites managed by the NPS has grown from 35 in 1916 to 400 sites today. That has led to substantial deferred maintenance, and given that Congress is unlikely to come up with additional funding, the NPS is seeking corporate funding, and possibly sponsorship.

Imagine Yellowstone: brought to you by Coca-Cola…

This brings into question of the very meaning of the commons: If we sell sponsorships, who owns the Grand Canyon? Who decides how Glacier National Park should be managed?

But, in a world where the GOP won’t agree to fund the parks, that’s what you should expect.

On a happier note, here are photos taken on our final days in Banff National Park in Alberta, Canada. Here is Moraine Lake, a small, jewel-like glacier-fed lake, created by gigantic rock slide:

DSCN5657

The distinctive color is from the sunlight reflecting off of dissolved particles of finely ground rock called “glacial flour”. And here is a photo of Lake Louise in Banff:

DSCN5694

Lake Louise was named after Princess Louise Caroline Alberta (1848–1939), the fourth daughter of Queen Victoria. Apparently, the Province of Alberta is named after her as well. She never visited.

Here is a close-up of the Louise Glacier above the lake:

DSCN5676

The glacier is 300’ thick at the edge of the cliff wall.

Trump’s Same ‘Ol GOP Tax Plan

Neil Irwin at the NYT compared the Clinton and Trump tax plans. Hillary’s raises taxes on the rich, and adds ~$1.1 Trillion to federal tax revenues over the next 10 years. The Pant Load’s plan is under revision (again), but, his old plan reduced revenues by ~$9.5 Trillion over the same period, and while his new plan will probably cost less, it will still create red ink.

Jared Bernstein had a few points which you might not have picked up on:

…the plan is pure, old-fashioned, supply-side, trickle-down orthodoxy. How that squares with Trump’s play for disaffected working class voters hurt by globalization is left as an exercise for the reader.

Bernstein’s best point is about the “pass-through” income loophole Trump creates. His new plan sets the top income tax rate at 33% but creates “a much lower rate than 33% for a substantial number of very-high-income households by allowing people to pay a new low rate of 15 percent on “pass-through” income (business income claimed on individual tax returns). According to the Tax Foundation, pass-through businesses now earn more net income than traditional “C” corporations (like GE or Ford). So of course, Republicans want to lower their tax rates. More from Bernstein:

More than two-thirds of all pass-through business income flows to the top 1 percent of tax filers.

And it will probably get worse: When you can pay a lower rate on a particular type of income, you will visit with a tax lawyer and set up a Limited Liability Corporation (LLC). Then off you go to the boss and say, as Bernstein points out:

“I’m no longer Joe Paycheck, I’m Joe Paycheck, LLC. Pay me the same salary but call it a consultant’s fee for services provided by my limited liability corporation”. Joe then passes that income through from the business to the personal side of the tax code and pays 15% on it.

Where Joe might have formerly paid as much as 39.5%. This will allow the hedge fund and private equity guys to move from paying a mere 24% that they pay on earnings today to 15%, if Trump gets the GOP-led Congress to go along.

Trump also wants to repeal the estate tax. Like the prior “improvement”, this one will benefit the Donald personally. The estate size that must pay estate taxes today is $10.9 million. So if a couple has an estate smaller than that, they pay no estate tax. How many are paying it? Only 0.2% of estates (that’s 2 in a 1,000) pay it today.

So none of these are the “small family businesses” and “family farms” that Republicans whine about. If you have the better part of $11 million in assets, you ain’t that small.

A minute more on the LLC: LLCs were created by Congress to give owners of businesses the ability to avoid “double taxation” on taxable income they receive from their businesses. The theory is, business income from a C corporation is taxed twice: once at the corporate level and again at the personal level when dividends are paid to owners. Businessmen could have avoided double taxation by simply operating their businesses as proprietorships or general partnerships. But then they would lose the limited liability protection from creditors that C corporations and limited partnerships provide.

So Congress created the LLC hybrid to enable businessmen to have their limited liability cake and eat it too. But you don’t get the same deal: Wrongo and Ms. Right have paid into Social Security for over a combined one hundred years. Along the way, we could not deduct our yearly SS contributions, which means we paid income taxes on the income that we used to make our contributions. Now that we are receiving Social Security payments, we pay federal and state income taxes again on the payments we receive.

If we use some of our Social Security income to buy gas, we are taxed again in federal and state motor fuel taxes. Same when we buy goods and services, and pay state sales taxes.

Double, triple and quadruple taxation are pervasive throughout our economy, but it’s only the average Joes that pay them. So no tears for Mr. Trump, the Kochs and “job creators” who say they need a break from double taxation.

Or maybe ask your Congressperson for a similar break for you.

Trump is cutting taxes for the rich. If you think he is gonna help the middle class, he is hoodwinking you. You may see a few pennies in tax cuts while the rich take in extra millions to buy bigger, better penthouse apartments.

Meanwhile, the roads and bridges that you use to get to work will crumble even further, because he’s planning to give away the store. Paying your taxes is extremely important and new rules will mean a new way of getting this done, so before you worry, take a look at a tax planning Winnipeg lawyer or one in your state to discuss on how you can plan out your taxes better and keep up to date with any changes.

Words Have Meaning

This captures where we are:

COW Hill's Threats

People are debating whether Donald Trump suggested violence against Hillary with his comment about how “the Second Amendment People” might be the only group capable of stopping Hillary Clinton from appointing liberal judges if she is elected president.

The Trump comment was in the context of what happens after Hillary is elected, and that there was nothing anyone could do about Hillary appointing Justices, except for…Second Amendment people.

He said, “If [Hillary Clinton] gets to pick her judges, nothing you can do, folks.” There’s “nothing you can do” in this situation because Trump is talking about a time after the 2016 election is over, and Clinton is president.

If he wasn’t talking about after the election, why would he say there was “nothing you can do?” During the election, there’s something pretty obvious you can do: Get out the vote and prevent her from becoming president in the first place.

Then Trump immediately follows it up by saying, “But I tell you what, that’ll be a horrible day.” Again, this suggests the time frame he’s talking about is when she’s already in the White House. Otherwise, both the “horrible day” comment and the “nothing you can do” comment that bookend his Second Amendment remark are total non-sequiturs.

So no, this isn’t about the NRA organizing their members to get out the vote. His comments were about doing something AFTER the election. Why would it be a “horrible day” if all he was talking about was getting out the vote, his vote? It is totally illogical.

There is no ambiguity here.

This seemed to Wrongo to be another effort at a joke by the Pant Load. The WaPo reported that Paul Ryan said:

It sounds like just a joke gone bad. I hope he clears it up very quickly. You should never joke about something like that.

It’s highly unusual for the Wrongologist to agree with Paul Ryan, but that’s probably the best defense for Trump’s words. But when faced with an outcry after his controversial comments, Trump never admits error and never backs down — no matter how strained the defense.

Why should this time be any different?

Trump knew exactly what he was doing, and he did so in the same manner he has been using throughout the campaign. A suggestion, an inference, a little birdie told him, it is what people are saying. The dog whistle, the wink, the nod. Some ambiguity to the comment, delivered in a veil of coyness.

Maybe we should remember the very bright line that Sarah Palin crossed a few years ago when she took out an ad that deliberately placed Gabby Giffords in crosshairs, just before Giffords was shot and critically wounded by a gunman. This is different, but really, how different is it?

On ABC’s Good Morning America, Rudy Giuliani gave Trump’s words the real test: How did they play with Trump’s audience? Getting Hillary couldn’t be what Trump meant, Rudy observed, because if Trump had actually called for Hillary to be killed, the crowd would have gone wild.

Imagine being Giuliani: So invested in Trump’s campaign that you’re contorting yourself into a pretzel to translate the candidate’s Wingbat-ese into English.

And once again, defending the indefensible.

Words matter, especially when delivered by someone who aspires to be POTUS.

Capitalism, It’s Not You, It’s Me

There is a meme that has gone global since the early days of the Occupy movement. Here it is as a wall graffiti from Greece that uses the same meme we first saw in NYC in 2011:

Capitalism Lotek

Just kidding capitalism, it really is you.

The artist is a Greek who styles himself as Lotek. The name Lotek is derived from the short story (and later, a film) by William Gibson called Johnny Mnemonic. The story is set in 2021, in a world ruled by corporations. An anti-authoritarian gang that are called Lo-Teks, fight the power. They are in fact not low tech at all, but are high tech hackers. Sound familiar?

Greece is surely a place at war with neoliberalism and free market capitalism. So is it also time for us to reconsider capitalism?

Consider this from Mark Blyth in Foreign Affairs:

An inherent tension exists between capitalism and democratic politics since capitalism allocates resources through markets, whereas democracy allocates power through voting.

The compromises both systems have struck with each other over recent history shapes our contemporary political and economic world. Blyth observes:

In the three decades that followed World War II, democracy set the rules, taming markets with the establishment of protective labor laws, restrictive financial regulations, and expanded welfare systems.
Starting in the 1970s, a globalized, deregulated capitalism, unconstrained by national borders, began to push back.

And today, capital markets and capitalists are setting the rules, and democratic governments follow them.

Some background: Cutting taxes in the 1980s caused government revenues to fall. Deficits widened, and interest rates rose as those deficits became harder to finance. At the same time, conservative governments, especially in the UK and the US, dismantled the regulations that had reined in the excesses of the financial service industry since the 1940s.

The financial industry began to grow unchecked, and as it expanded, investors sought safe assets that were highly liquid and provided good returns: the debt of developed countries.

This allowed governments to plug their deficits and spend more, all without raising taxes.

But the shift to financing the state through debt came at a cost. Since WW II, taxes on labor and capital had provided the foundation of postwar state spending. But, as governments began to rely more on debt, the tax-based states of the postwar era became the debt-based states of today.

This transformation had profound political consequences. The increase in government debt has allowed capitalists to override the preferences of citizens:

Bond-market investors can now exercise an effective veto on policies they don’t like by demanding higher interest rates when they replace old debt with new debt.
Investors can use courts to override the ability of states to default on their debts, as happened recently in Argentina
They can shut down an entire country’s payment system if that country votes against the interests of creditors, as happened in Greece in 2015.
Citizens United dictates who runs for office in the US, and in many cases, who wins.

Now that the financial industry has become more powerful than the people, should we blindly follow capitalism’s meme as the only way forward?

Free-market rhetoric hides the dependence of corporate profits on conditions provided for, and guaranteed by, governments. For example:

Our financial institutions insist that they should be free of meddlesome regulations while they depend on continuing access to cheap credit from the Federal Reserve.
Our pharmaceutical firms have resisted any government limits on their price-setting ability at the same time that they rely on government grants of monopolies through our patent system.

To use a sporting metaphor, it’s as if the best football team purchased not only the best coaches and facilities, but also bought the referees and the journalists as well. Those responsible for judging economic competition have lost all authority, which leaves the dream of ‘meritocracy’ or a ‘level playing field’ in tatters.

In our country, the divide between the business oligarchs, the political class and “the people” increasingly appears unbridgeable, marked by hostility and deep distrust. When people are told for a generation that government mustn’t make decisions that interfere with free markets, it is inevitable that people will lose faith in democratic governance, and in government’s capacity to help them solve their problems.

Capitalism in its current form no longer works for the people. We have seen a reaction in the start of movements by Occupy, by Bernie, and by others in Europe.

Remember that the greatest prosperity in living memory in the US came during the brief social democratic moment, in the 1950s and 1960s, when the constraints on business were the greatest.

More democracy and more economic justice are the necessary foundations for the path to a more prosperous, and sustainable economy.

A reformed capitalism must be a part of what emerges from that fight.

The Pant Suit vs. The Pant Load – Budget Edition

Now that both presidential conventions are history, the real discussion about the merits of the candidates and their programs begins. The first question to answer is: What are the costs of the promises made to America by Donald Trump and Hillary Clinton?

Both candidates have made political promises that, if implemented, have both costs and benefits to the nation. While the analysis of benefits may be difficult to assess, the costs are not.

The Committee for a Responsible Budget (CRB) has issued a report, “Promises and Price Tags: A Fiscal Guide to the 2016 Election” that estimates how our national debt would rise under the programs of both presidential aspirants. It shows that gross debt held by the public would rise from about $19 trillion today to $23.9 trillion by 2026 under Hillary Clinton’s plan and to $35.2 trillion under Donald Trump’s plan.

They based the estimates on the public positions taken by each campaign as of June 24, 2016. They also generated a low, central, and high cost estimate of the fiscal implications of Trump’s and Clinton’s proposals.

We need to stop and say that our gross debt will rise no matter who is elected, since under existing law, gross debt is projected to rise from about $19 trillion today to about $29.1 trillion by 2026, about a 50% increase. With that in mind, here is CRB’s summary of the impacts of both candidate’s plans on the national debt:

Debt Under Candidates Proposals

Donald Trump has expressed concern about the dangers of our current $19 trillion debt. Yet his plan would increase that number significantly. Under CRB’s central estimate of Trump’s plan, gross debt would more than double from $19 trillion today to $39.5 trillion by 2026.

The increase in gross debt under Clinton’s plan would be smaller but still significant. Under the central estimate of Clinton’s plan, gross debt would rise by more than 50%, from $19 trillion today to $29.6 trillion by 2026, in line with the current law. So, her promise to pay for new spending seems to be true.

Digging a little deeper, here is CRB’s breakdown of both candidates’ plans by revenue, costs and spending. Most of Hillary Clinton’s increased costs come from spending in non-health, non-retirement programs:

She would spend $350 billion more on college education, $300 billion more on infrastructure, another $300 billion on paid family leave, and nearly $500 billion on a variety of other initiatives.
Clinton would also make several health-related changes that would cost about $150 billion.
To offset these costs, Clinton proposes a variety of tax increases – mostly on higher earners and businesses – totaling $1.25 trillion.

The largest share of Trump’s deficit impact comes from his proposed individual and business tax reforms, which would reduce revenue by about $9.25 trillion:

His plan to reform the veteran’s affairs system and increase veterans’ access to private doctors would cost about $500 billion.
And his plans to repeal and replace the Affordable Care Act and reduce illegal immigration would cost about $50 billion each.

So, what happens to the total amount of our national debt?

Donald Trump wants to dramatically reduce taxes for most Americans while maintaining spending relatively near its current levels. As a result, under CRB’s central estimate, he would add $11.5 trillion to the debt through 2026.

Hillary Clinton wants to increase both spending and taxes, adding about $250 billion to the debt over 10 years under CRB’s central estimate. Under their low cost estimate, Clinton’s plan would reduce 10-year deficits by $150 billion.

Increases in debt are not always a bad thing, particularly in times of economic slack, if the debt accumulation is driven by stimulative fiscal policy. But a 40 percentage point of debt to GDP increase, from 87% of GDP to 127% of GDP, seems unlikely to give us a positive outcome.

But, if we elect The Pant Load, that’s what we will get. Trump said to the WaPo in May:

I am the king of debt. I do love debt. I love debt. I love playing with it.

This should worry you. Trump went on to say:

Look, I have borrowed, knowing that you can pay back with discounts. And I have done very well…I would borrow, knowing that if the economy crashed, you could make a deal, and if the economy was good, it was good, so, therefore, you can’t lose.

So, Trump would stiff the nation’s creditors. Haven’t we had enough of Republican mis-leadership on the nation’s finances?

Haven’t we had enough of Republican tax cuts for the most comfortable among us at a cost to the least comfortable among us?

Remember that it was the GOP-led Congress that threatened not to raise the debt ceiling in 2011. That led to the Standard & Poors rating agency’s lowering of the US credit rating.

Think carefully about what Trump’s glib plans imply for America.

Make America Safe?

Wrongo has tried hard not to write again about the murderous and divisive actions taken against police over the past few weeks, but it seems impossible. From the NYT:

The twin attacks — three officers dead Sunday in Baton Rouge, five killed on July 7 in Dallas, along with at least 12 injured over all — have set off a period of fear, anguish and confusion among the nation’s 900,000 state and local law enforcement officers. Even the most hardened veterans call this one of the most charged moments of policing they have experienced.

Never one to let bad news pass without blaming, the Pant Suit criticized President Obama’s response:

FireShot Screen Capture #104 - Trump

Monday kicked off the GOP Convention. The theme for the first day is “Make America Safe Again”. In case you thought that despite the recent spate of cop killings, you live in one of the safest places on earth, the Trump team is out to scare you up good.

The central theme of Trump’s campaign is that he plans to protect you: From scary Islamic terrorists, from scary immigrants who steal jobs, rape and pillage, and from scary black men with guns.

This resonates with many Republicans who are in the grip of overpowering nostalgia for the1950’s. Republicans see this as a time of stable marriages, respect for authority and economic dynamism. They are not alone: Democrats see it as a time when most men could leave high school and walk into a well-paid job, with pension and health-care benefits, which would allow them to support a family and retire comfortably.

There was much to like about this era of 25₵ gallons of gas, sport coats and cars with tail fins, but it is far from the whole story. It forgets the specter of nuclear annihilation that was ever-present. It forgets that women had little chance of a career beyond the typists’ pool, or that society forced African-Americans to the back of the bus.

Feminism, the civil-rights movement and economic progress in other countries swung a wrecking-ball at the society of the 1950s. But, to regret its collapse, as many Tea Partiers and Republicans do, is also to wish those improvements had never happened, which is absurd. Life was NOT good for the working person in the 1930s and 1940s. Even in the halcyon days of the 1950s -1970s, life was not good for women, people of color, gay people, and others.

Republicans see our politics and our culture decaying, so we see the sharpening Trump “law and order” rhetoric, and the success of the Tea Party in setting our national political agenda.

An alternative view to Trump’s is that Obama’s eulogy for five Dallas police officers a week ago was an eloquent plea to Americans to acquire “a new heart” – a new empathy toward others across the racial divide. And rarely has a president talked so bluntly about the limits of his ability to bring about the changes he seeks. Mr. Obama:

It is as if the deepest fault lines of our democracy have suddenly been exposed, perhaps even widened…Faced with this violence, we wonder if the divides of race in America can ever be bridged…We must reject such despair…I’ve seen how inadequate words can be in bringing about lasting change. I’ve seen how inadequate my own words have been…I confess that sometimes I, too, experience doubt.

In an era of partisan polarization, the problem isn’t merely a deficit of leaders capable of binding us together; it’s a shortage of citizens willing to listen. According to the Pew Research Center, only 14% of Republicans approve of Obama’s conduct, compared with 80% of Democrats. That’s a record high in polarization – except that the previous record held by George W. Bush, who was supported by only 23% of Democrats. Trump is exploiting that.

When we zoom out from the “Make America Safe Again” meme, we remain in a competition between divergent views. We will not even start on the road to consensus until two conditions are met:

Our solutions strive for the preservation of a value called “the greater good”.
Our solutions rely on the preservation of a value called “in good faith”.

We have never changed ethics by legislation, although we can impact behavior. What we have to change is whether or not we as a society will accept the greater good and good faith as inextricable parts of our society.

But as long as there are those among us who can defend the rights of people to use a weapon of war to kill policemen and children, or people who threaten the careers of the elected representatives who stand up to them, we will be seeing this happen again and again, and we’ll be stuck asking the same questions over and over.

How Not to Cut the Deficit

Congress returned from the Independence Day break on Monday. They will leave again on Friday, and won’t return until after Labor Day. From The Hill:

Congress is poised to leave Washington…without passing funding to combat the Zika virus or completing work on spending bills to avoid a government shutdown.

One bill that might get passed is the re-authorization for Federal Aviation Administration programs that expire on Friday. Since Congress likes to fly, most think they will pass an extension that will last through September 2017.

If you’ve taken a flight this summer, you’ve likely been tied up in long TSA security lines. But you may not have focused on the real reason: Funding for the TSA has been sliced by 8.5% over the past five years, leading to a 5.5% drop in the number of screeners.

Yet, in the same period, the number of air travelers has increased by more than 15%. And those business wizards in Congress should be forced to tell the rest of us how a labor-intensive business can successfully process increasing numbers of customers with a smaller work force.

Steven Rattner in the NYT:

This year, discretionary spending — which encompasses airport security, infrastructure, education, research and development and much more — will be lower than it was in 2005. (Adjusted for inflation.

The discretionary portion of the federal budget, including education, research, infrastructure and other programs, has been falling, while spending on mandatory programs (including Social Security, Medicare and Medicaid) has been going up. Rattner reports that total government spending is up by 23% since 2005, while mandatory spending is up 45% in the same period, and discretionary spending is down 3%.

Here are some examples:

Since 2003, the National Institutes of Health (NIH), have seen their funding fall by 23%, forcing an 8% reduction in grants to researchers even as grant applications were rising by 50%.
In the past 10 years, spending on all education has fallen by 11% percent.
Since 2010, the IRS’s budget has been slashed by about 18%, even as the IRS was given new duties in connection with the passage of the Affordable Care Act. The result: The enforcement staff has shrunk by 23%, leading to a similar reduction in the number of audits. Fewer audits have meant additional uncollected taxes, estimated at $14 billion over the past two years. And almost a million pieces of unanswered correspondence from taxpayers need responses.
The EPA’s budget has been cut by an enormous 27% — about $3 billion since 2010. As a result, the agency had to eliminate more than 2,000 workers, bringing its staffing to the lowest level since 1989.

Last fall, a bi-partisan group added $80 billion in new discretionary spending over the next two years. Then, Congress doubled the cost of the deal by giving more money to the military and to Medicare, taking the deal to $154 billion while paying for about half the tab with legitimate savings.

A few months later, Congress retroactively extended a raft of expired tax provisions — without even a pretense of paying for them.

As a result of Congress’s fudging, the projected 2017 deficit rose to $561 billion, from the $416 billion that was estimated just six months earlier.

We shouldn’t expect that Congress will make any big decisions involving taxes or spending in an election year. But at the least Republicans need to stop using the appropriations tool to take aim at agencies such as the IRS and the EPA, whose missions they reject.

In the case of the TSA, Republicans want it privatized. Not because privatizing will save any money or make the TSA more effective, but to help a few of their corporate sponsors have another feed at the government trough. Republicans want to see schools, prisons, and the postal service privatized. The people who are employed by these private, profit-making companies will not be paid as well, and will not receive benefits they have today.

This is what you get when you believe that government should be “run like a business.” Certainly, we need a more efficient, better managed bureaucracy, but the deficit-cutting value of their fix is peanuts compared with the simple act of generating revenue.

You know, that would be raising taxes sufficient to pay for the critical tasks we require of the government.

The GOP would like you to think that Donald Trump represents a threat to Republican tax and deficit-cutting orthodoxy. To the extent Trump has revealed his thinking on tax policy, it looks consistent with the Republican Party. Trump’s grand accomplishment is to create an alliance between the true economic interests of the Republican Party and that segment of the American electorate largely marginalized and displaced by the actions of that same elite.

Welcome to the Republican paradise.

The Wrongologist

Geopolitics, Power and Political Economy

Category: Congress