A week that was so filled with head-snapping news, the cartoonists couldnât catch up!
The GOP will never quit the Donald:
The GOP tax cut plan hasnât been written, but itâs really great:
What the GOP chooses to attack says everything:
Dr. Feelgood at your service:
RIP Fats:
Our scariest Halloween clown:
The Daily Escape:
Naiman Nuur (Eight Lakes) National Park, Mongolia. The lakes are just 22 miles from the Orkhon waterfalls, but are accessible only by hiking, or by horse. You can get to it with 4 wheel drive vehicles, but it is 80+ miles one way, 160 if there are heavy rains. You are probably never coming here.
Rick Perry heads Trumpâs Department of Energy, (DoE). With the Russians, nuclear war with North Korea, ditching the Iran deal, and hurricanes, we have ignored Perry. But Perry hasnât ignored the coal industry Trump hired him to protect. The DoE has asked the Federal Energy Regulatory Commission (FERC) to begin the rule-making process to subsidize coal and nuclear plant operatorâs costs and profits. From Vox:
Perry wants utilities to pay coal and nuclear power plants for all their costs and all the power they produce, whether those plants are needed or not.
This takes a brief unpacking. The DoE did a study of power grid reliability that said:
The loss of coal plants had not diminished grid reliability; in fact, the grid is more reliable than ever. Reliability can be improved further through smart planning and a portfolio of flexible resources.
Then the DoE said to FERC: Address a crisis we determined doesnât exist. They are asking FERC to adopt a rule forcing utilities in competitive energy markets to pay the full cost of plants that have 90 daysâ worth of fuel on-site. Perryâs argument is that the levels of renewable energy produced from wind and solar is variable. And since backup is needed for days with calm winds or cloudy skies, we need to preserve the aging coal and nuclear plants to protect the power grid from dips in availability, because they alone among electric power sources, have 90-days of fuel on hand.
Perryâs contention is that coal and nuclear stored fuel is necessary for grid reliability, and, that these plants are unfairly being driven out of business by subsidies to renewable energy. This is patently false. It is cheap natural gas that is driving coal out of business.
Having fuel on-site does little for grid resilience. No one expects energy outages if coal and nuclear plants continue closing. But, letâs have more corporate welfare for the least useful part of the energy industry!
Perryâs alleged problem isnât real, and his solution, subsidizing coal and nuclear plants, is a form of theft. A transfer from the most deserving, clean renewable and safe plants, to the least deserving, most polluting and dangerous coal and nuclear plants.
And people will be taxed through artificially higher electricity rates to subsidize coal and nuclear plants. More from Vox:
Itâs hard to overstate how radical this proposal is. It is wildly contradictory to both the spirit and practice of competitive energy markets. It amounts to selective re-regulation, but only for particular power sources, which wouldnât have to compete, theyâd just have to have piles of fuel.
So does FERC have to do what DoE asks? No, but consider this: FERC has three commissioners (a quorum), two of which, including the chair, are Trump appointees. The chair is Neil Chatterjee, who was a staffer for Sen. Mitch McConnell, the Senate’s champion of coal. Chatterjee recently said:
I believe baseload power should be recognized as an essential part of the fuel mix. ⌠I believe that generation, including our existing coal and nuclear fleet, needs to be properly compensated to recognize the value they provide to the system.
So, this market-wrecking plan to Make Coal Great Again is likely to happen.
This is an old-school Ayn Rand-style looter giveaway from a bunch of self-described free-market âconservativesâ trying to rescue a dinosaur industry that is choking the world.
Just another issue that raises our anxiety level. Itâs Saturday, and we need to dial it back, relax and stop thinking about how these Trump termites are quietly undermining everything. Grab a hot, steaming cup of Mystic Monk Paradiso Blend coffee ($15.99/lb.), find a quiet corner, put on the Bluetooth headphones and listen to Telemannâs âConcerto in D major for Violin, Cello, Trumpet and Stringsâ, TWV 53:D5. Here performed by the Bremer Barockorchester, recorded in a November, 2015 live performance at the Unser Lieben Frauen Church, Bremen, Germany:
Note the valveless trumpet played by Giuseppe Frau. It is an Egger (three-hole system) Baroque trumpet.
Those who read the Wrongologist in email can view the video here.
The Daily Escape:
Talking Heads Decision Wheel
Itâs time to question how we pay for disasters. The estimated costs of Harvey and Irma are $290 billion. That might turn out to be high or low, it is still early days in assessing total costs. The insurance industry says that they expect to take a $70 billion combined hit for Irma and Harvey.
That leaves $220 billion to be funded by individuals, or taxpayers. Where will that money come from?
The president and his GOP buddies want to cut taxes on corporations and the wealthy, but they call it tax reform. Theyâll throw some chump change at the middle class, so that their base feels they got something for their vote last November, but at best, their tax plan will be revenue-neutral. That will provide nothing new for the rebuild of Texas and Florida.
We shouldnât accept the usual ârevenues canât be increasedâ mantra when we know cities and people may not be able to afford rebuilding on their own. There are many costs that need to be considered, for example victims of the flood will have to contact some of the roofing companies austin has to offer in order to get their roof fixed, or they will have to find a roofing service closer to their home. They will also have to pay for all new furniture, and decorating services. Getting their lives back on track will be extremely difficult and costly, but with the help of donations they’ll get there. We could also raise revenues. Itâs time for a specific and time-limited National Recovery Tax. And everybody has to chip in. This can be a unifying moment. Nobody wants to pay more, but the job must be done.
Think for a second about the Hand In Hand benefit. The idea was that celebrities would induce the average person to donate to disaster relief. The minimum donation that Hand In Hand asked for on their web site is $25. The average US Net worth for 45-54 year olds is around 84k. $25 is .0003% of the average US familyâs net worth.
Celebrities should ask us to open our wallets, but that canât be the way we raise the billions necessary to fund this recovery. And we canât count on the corporations. Apple gave $5 million, thatâs nice. Apple is worth about $850 billion; $5 million is .0000058% of Appleâs net worth. They gave less proportionately than the average American. Apple pays very little tax relative to their profits, most of which are kept overseas. Here is a link to how Appleâs income is sheltered.
Think about where Appleâs money comes from. You bought the iPhone, iPad and maybe a MAC computer. You were the source of their money. The same is true for Michael Dellâs $36 million donation to Harvey relief. He gave a heroic amount, but itâs a pittance when we need $220 billion.
Disasters happen. We need a fund to make people whole, and it has to come from increased revenues. Some could be from state-level taxation in the states impacted, but other states wonât do that voluntarily. That assessment has to come from a new federal tax assessment. Congress should work out the details.
We need to wave off any discussion of additional tax breaks for corporations or for the wealthy, until we rebuild Texas and Florida.
We are all beneficiaries of living in America, including those companies that keep their money offshore. We all should be in this together. If we don’t look out for each other, we’re screwed.
There are other questions, such as, should we be rebuilding in the âbathtubâ parts of Houston or Florida? Should we continue allowing coastal homeowners access to federal flood insurance when they tap into it every few years? Maybe we shouldn’t build on waterfront. The NYT had a piece about St. Augustine, FL. They routinely have sunny day flooding caused by rising sea water. What do we need to do to protect historic sites like St. Augustine? Should we protect them?
Can we even ask these questions? Can we agree to do a study? Views differ. But the truth doesn’t travel far in America, because the truth hurts. So, we never ask the big questions, or seek answers to them. We just occasionally donate a little to the disaster of the moment in order to feel a little better.
How can we keep America great if we fail to fund the recovery from disasters? A temporary tax on everyone is the best answer to what just happened in the South.
Here are the Talking Heads with âOnce in a Lifetimeâ from their 1980 album, âRemain In Lightâ:
https://www.youtube.com/watch?v=I1wg1DNHbNU
Those who read the Wrongologist in email can view the video here.
Takeaway lyric:
Letting the days go by, let the water hold me down
Letting the days go by, water flowing underground
Into the blue again after the money’s gone
Once in a lifetime, water flowing underground
And you may ask yourself
What is that beautiful house?
And you may ask yourself
Where does that highway go to?
And you may ask yourself
Am I right? Am I wrong?
And you may say to yourself, “My God! What have I done?”
The Daily Escape:
Depression Bread Line by George Segal, 1999, at the NJ Grounds for Sculpture â 2017 photo by Wrongo
There are two political imperatives facing America by the end of September: The House, Senate and the president must extend the Federal borrowing limit, and pass a budget. When Obama was president, extension of the borrowing limit was a dicey thing, as was passing a budget. From 2008-2016, we largely avoided government shutdowns, we passed spending bills, but not an entire budget.
And we never even considered tax reform, but itâs the third item on the GOPâs 2017 to-do list.
In some sense, everything except increasing the debt ceiling is optional. As of now, there are only twelve days in September when the House and Senate are jointly in session. The Senate has a few more legislative days on their schedule than the House, but itâs unclear how theyâll use them.
Republicans and Wall Street used to have concerns about the consequences for America if we didnât get our finances under control. They said that the growing federal debt could eventually drag down the economy, burden future generations, and even threaten national security. CEOs of corporations and the biggest banks joined a campaign called Fix the Debt, arguing that the size of our debt was our most pressing issue.
But now these same people are all in on Trumpâs plan to cut taxes for corporations and high earners, saying it is the way to fuel economic growth. That, despite estimates that Trumpâs plan could reduce federal revenue by $3.9 trillion over 10 years, thereby increasing the debt that CEOs used to hate. From Bloomberg:
Goldman Sachs Group Inc. CEO Lloyd Blankfein, a Fix the Debt supporter…in 2012 told CNBC heâd be for higher taxes if they helped mend the fiscal gap. After the 2016 election, Blankfein told colleagues…that Trumpâs proposals, including tax reform, âwill be good for growth and, therefore, will be good for our clients and for our firm.â
Hmmm. Aren’t Treasury Secretary Steve Mnuchin and Trump’s Economic Adviser Gary Cohn both from Goldman?
Dean Baker, co-director of the Center for Economic and Policy Research sees the policy shift clearly: (brackets by the Wrongologist)
They [CEOs] were yelling, Deficits, deficits, deficits… [and] as soon as George W. Bush gets in the White House? Oh, weâll have a big tax cut.
The same thing is happening now. Bloomberg reports that according to Seth Waugh, chairman of wealth adviser Alex. Brown, many in finance have moved on from the debt: (brackets and emphasis by the Wrongologist)
Itâs not a fun, sexy thing to talk about…Waugh, another Fix the Debt member, recalls playing golf with a private equity executive…Waugh told his friend it would be nice if Congress addressed deficits… [but]…The private equity executive said nobody was talking about that. It was a dead issue, and they should take the good news: Paying less in taxes, the friend reminded him, means getting richer.
Itâs probably a distant dream. The GOPs plan for tax reform involves using the budget reconciliation process, which allows them to pass it with just 51 votes, that is, without Democrats. Otherwise, they face a filibuster. Reconciliation starts with passing a budget resolution for the coming fiscal year. In that budget resolution, they need to include special budget directives or instructions:
To start the reconciliation process, the House and Senate must agree on a budget resolution that includes âreconciliation directivesâ for specified committees. Under the Congressional Budget Act, the House and Senate are supposed to adopt a budget resolution each year to establish an overall budget plan and set guidelines for action on spending and revenue.
So they need to pass a budget, but before that, Republicans need to vote to raise the borrowing authority of the government. That may be impossible without support from Democrats.
Weâll know very soon if Dems are willing to get on board with Paul Ryan and Mitch McConnell on any of this.
Itâs Saturday again, and despite the brief three-minute respite from politics brought by the solar eclipse, Trump had another successful week. (If success is his continued destruction of what remains of Americaâs psyche).
We are now in desperate need of something soothing to kick off next weekâs war for truth. So grab a couple of Trader Joeâs Cold Brew Latte Dessert Bars (40 calories and 7 grams of sugar each), put on your best Bluetooth headphones, and listen to the late guitarist John Abercrombie, who died this week. Here is Abercrombie with Dave Holland on bass, and Jack DeJohnette on drums doing âHomecomingâ live in 1995. Letâs hope itâs not the best few minutes of your week:
Pay attention to Abercrombieâs remarkable and airy technique.
The Daily Escape:
Missouri Breaks, MT – photo (via)
US Interior Secretary Ryan Zinke announced that there would be no change for the Missouri Breaks National Monument. Zinke is from Montana, so saving one for his peeps isnât a big surprise.
Missouri Breaks is one of 27 monuments established during the previous 20 years by presidents using the Antiquities Act. The Antiquities Act allows presidents to set aside objects of historic or scientific interest to prevent their destruction. The law was created in 1906 to guard against looting of sacred American Indian sites.
In April, Trump ordered the Department of the Interior to review the status of every national monument designated since 1996. As a result of the review, these cultural and/or natural treasures could be significantly reduced in size or even eliminated, and the Antiquities Act itself could be severely limited. The land would remain owned by the federal government, but might lose its protected status, and be contracted to private enterprises. When you allow corporations to ‘lease’ land for oil, fracking, mining, ranching, etc. fences go up, private police forces are hired to keep people out for their ‘safety’.
Not everyone agrees that Trump has the authority to do what he wants. From the Washington Times:
If President Donald Trump or any successor desires the authority to revoke national monument designations, they should urge Congress to amend the Antiquities Act accordingly. They should not torture the plain language of the Act to advance a political agenda at the expense of regular constitutional order.
Indeed, those who claim that the Antiquities Act does not grant a reversal power cannot find a single case in another area of federal law that supports that contention. To override the norm, legislators have to clearly limit reversal powers in the original law; the plain text of the Antiquities Act includes no such limits.
Who knows? Next, Der Donald will lease the Grand Canyon to China for use as a landfill.
But the bigger picture is that behind the smoke and mirrors of Trumpâs pathological lying and the mediaâs obsession with Russia, his cabinet appointees are working like industrious termites, eating away much of the support beams of our nationâs rules-based edifice.
Consider Attorney General Jeff Sessions. From the New Yorker: (brackets and editing by the Wrongologist)
He [Sessions] has reversed the Obama Administrationâs commitment to voting rights…He has changed an Obama-era directive to federal prosecutors to seek reasonable, as opposed to maximum, prison sentences for nonviolent drug offenders…he has revived a discredited approach to civil forfeiture, which subjects innocent people to the loss of their property. He has also backed away from the effort…to rein in and reform police departments, like the one in Ferguson, Missouri, that have discriminated against African-Americans.
Although candidate Trump promised to protect LGBT rights, President Trump last week vowed to remove transgender service members from the armed forces, and Sessions…took the position in court that Title VII, the nationâs premier anti-discrimination law, does not protect gay people from bias. Most of all, Sessions has embraced the issue that first brought him and Trump together: the crackdown on immigration…
All across the government, Trump appointees are busy chewing through the existing regulatory edifice, ending not just Obama-era rules, but others that have been in place for decades.
Another truly damning thing is Trumpâs surrogatesâ efforts to undermine foreign policy. The WaPo reports:
Trump signed off on Iran’s compliance with profound reluctance, and he has since signaled that when Iran’s certification comes up again â as it will every 90 days, per a mandate from Congress â he intends to declare Iran not in compliance, possibly even if there is evidence to the contrary.
According to the New York Times: (brackets by the Wrongologist)
American officials have already told allies they should be prepared to join in reopening negotiations with Iran or expect that the US may [unilaterally] abandon the agreement, as it did the Paris climate accord.
It is difficult to see how this ends well for the US. Imagine, Iran and North Korea both pursuing nuclear weapons to deploy against the US. Why would we want to engage on two fronts, when one (North Korea) is already so problematic?
What is the Trump agenda? Are there any articulated goals? What are the strategies to achieve them?
Have we heard a concrete proposal for any of his big ideas (health care, tax reform, or infrastructure)?
We have not, but his termites keep chewing, and soon, our whole building will be compromised.
The Daily Escape:
Via: Naked Capitalism
He said he would make America great again. He was elected on a messianic platform, to reform DC from the outside, to create jobs, to drain the swamp, all while saving the social safety net, and ending our foreign adventures.
He promised all of those things. He actually said he would do them â in many places and at many times, and in differing contexts.
The dissonance should be hitting his supporters very hard about now.
In the nearly six months Donald Trump has been in power, he has accomplished only the dismantling of major parts of Obamaâs agenda. For example, the EPA announced that it will delay implementation of an Obama-era chemical safety rule for nearly two years while it reassesses the necessity of the regulation: (parenthesis by the Wrongologist)
(Obama administration) Officials moved to overhaul chemical safety standards after a 2013 explosion at a chemical plant in Texas killed 15 people. Their rule would require companies to better prepare for accidents and expand the EPA’s investigative and auditing powers.Â
Trump and Scott Pruitt will MAGA by ensuring more workers die on the job from unsafe working conditions. Of course, like 90% of Trumpâs agenda, this is just standard Republicanism.
Couldnât the GOP just âlead by exampleâ on the whole âgetting killed at workâ thing?
Just in case anyone is interested, here is a link to the White House’s list of all legislation signed since the Orange Flake took office. If it weren’t for things like approving the name change for an outpatient VA clinic in Pago Pago, his big agenda items like passing a budget, replacing Obamacare, reforming taxes, or rebuilding our infrastructure remain aspirational.
So, where is the plan to make America great? As Derek Thompson said in the Atlantic:
There is no infrastructure plan. Just like there is no White House tax plan. Just like there was no White House health care plan. More than 120 days into Trumpâs term in a unified Republican government, Trumpâs policy accomplishments have been more in the subtraction category (e.g., stripping away environmental regulations) than addition. The president has signed no major legislation and left significant portions of federal agencies unstaffed, as U.S. courts have blocked what would be his most significant policy achievement, the legally dubious immigration ban.
The simplest summary of White House economic policy to date is four words long: There is no policy.
Republicans are held hostage by campaign promises that they cannot fill. The White House is hostage to the presidentâs perpetual campaign, a cavalcade of promises divorced from any effort to detail, advocate, or enact major economic legislation.
Trump uses public policy as little more than a photo op, and that isnât going to make anything great.
Letâs turn to poetry. Lawrence Ferlinghetti turned 98 in March. Here is âPity the Nationâ, a poem he wrote in 2007:
Pity the nation whose people are sheep,
and whose shepherds mislead them.
Pity the nation whose leaders are liars, whose sages are silenced,
and whose bigots haunt the airwaves.
Pity the nation that raises not its voice,
except to praise conquerors and acclaim the bully as hero
and aims to rule the world with force and by torture.
Pity the nation that knows no other language but its own
and no other culture but its own.
Pity the nation whose breath is money
and sleeps the sleep of the too well fed.
Pity the nation â oh, pity the people who allow their rights to erode
and their freedoms to be washed away.
My country, tears of thee, sweet land of liberty.
That was written in 2007 folks.
Here is a video of Ferlinghetti reading âPity the Nationâ in 2007:
Those who read the Wrongologist in email can view the video here.
The Daily Escape:
Ribbon Chapel, Onomichi Japan – photo by Koji Fujii
Andrew Ross Sorkin wrote about Warren Buffet and the Berkshire Hathaway annual meeting in Omaha. Thousands of people attend these meetings, which are known as âWoodstock for capitalists.â Sorkin reports that Buffet made this comment:
The tax system is not crippling our business around the world.
Sorkin said that Mr. Buffett, was blunt and pointed, implicitly rebuking his fellow chief executives, who have been lobbying the Trump administration and Washington lawmakers to lower corporate taxes. Buffett said that those who have been single-focused on seeking relief from their tax bills would be smart to shift their attention to health care costs, which are growing and swallowing evermore corporate profits. The Kaiser Family Foundation reports that 49% of Americans, about 156 million, are insured by their employer. More from Sorkin:
The need for corporate tax relief has become the lodestar of the corner office, with CEOs rhapsodizing over President Trumpâs plan to try to stimulate growth by cutting tax rates for businesses.
But as Mr. Buffett pointed out, these chief executives are missing the bigger issue: As a percentage of our GDP, the cost of maintaining our American health care system is rising at an alarming rate. And Corporate America pays a big (and growing) chunk of that bill.
Buffett wasnât talking about the cost of health insurance, which is a fraction of the total cost of health care. He suggests that todayâs corporate tax rates are a distraction, not a true impediment to growth:
If you go back to 1960 or thereabouts, corporate taxes were about 4% of GDP…And now, theyâre about 2 % of GDP.
While tax rates have fallen as a share of gross domestic product, health care costs ballooned:
About 50 years ago, health care was 5% of GDP, and now itâs about 17%.
Buffett is a smart guy. He raises an argument for focusing on the underlying costs of our health care system, something that goes far beyond the debate around the Affordable Care Act, or what will replace it. Buffett says that our global competitiveness has fallen largely because our businesses were paying far more for health care â a tax by another name â than those in other countries.
As Buffett said: (brackets by the Wrongologist)
When American business talks about [corporate taxes] strangling our competitiveness, or that sort of thing, theyâre talking about something that as a percentage of GDP has gone down…While medical costs, which are borne to a great extent by business, have swelled.
Here are the facts:
That makes our health care cost disadvantage far greater than our tax differential. It harms American companies in particular, since they bear such a large share of those costs, which firms in our competitor countries do not. US Corporations spend $12,591 on average for coverage of a family of four, up 54% since 2005, according to a study by the Kaiser Family Foundation.
But Congress avoids the issue, and CEOs donât talk about it. A final quote from Warren:
Itâs very tough for political parties to attack it…itâs basically a political subject…
In fact, Buffettâs partner, Charlie Munger, is the rare Republican (Buffett is a Democrat) who has advocated for a single-payer health care system. Under his plan, the US would enact a sort of universal type of coverage for all citizens â perhaps along the lines of the Medicaid system.
Which brings Wrongo to his final point: Medicaid expansion is the one part of Obamacare that can be said unequivocally to work. Itâs a single payer program funded by the Federal government. So itâs bitterly ironic that the Republicanâs reaction to Obamacare is to assault and roll back an existing Federal program, from LBJ days.
Of course, kicking poor people who benefit from Medicaid will always be popular with Republicans. So, Republicans, by making Medicaid worse, will try to restore their natural order of things.
Lazy, uninformed voters = Lazy, uninformed legislators = Lazy, uninformed policy.
It’s that simple.
The Daily Escape:
African Elephants – photo from Nature Photography
African Elephants clearly are not deficit hawks. But, neither are most Republicans in Congress, despite all their complaining about spending that adds to the deficit. Trumpâs tax proposal is out. It’s interesting that the administration decided it was a good idea to put a vague blueprint laying out big tax cuts on a single sheet of paper.
It could take some time to process Trumpâs âproposalâ, but as the NYT says, it will bring a reckoning for Republican deficit hawks:
As President Trumpâs top economic advisers faced a barrage of questions on Wednesday about the tax plan they had just unfurled, there was one that they struggled most to answer: how to keep the âmassive tax cutsâ they proposed from ballooning the federal deficit…Republican budget hawks will need to decide whether they want to stick to the arguments of fiscal responsibility that they used to bludgeon Democrats during the Obama era.
More from the NYT: (emphasis by the Wrongologist)
Mick Mulvaney, director of the Office of Management and Budget, who was a fierce critic of deficits when he was a member of Congress, offered a glimpse of the rationale his former colleagues might embrace. âAs a conservative, that bothers me a little bit,â he said Tuesday on CNN of the possibility that Mr. Trumpâs tax plan would increase the deficit. âBut we also look at deficits through sort of a different lens.â
While we havenât yet seen definitive estimates of the cost of Trumpâs one-pager, it will certainly add to the deficit, and the negative numbers range up to an additional $6 Trillion over the next 10 years.
And when Treasury Secretary Mnuchin says that Trumpâs tax plan âwill pay for itself,â he isnât credible. He also told ABC News that he couldnât guarantee that middle-class families wouldn’t pay more under the proposal:
I can’t make any guarantees until this thing is done and itâs on the president’s desk. But I can tell you, thatâs our number one objective in this…
Word salad. Helping the middle class is the furthest thing from their minds. Trump, Mnuchin, Ryan and the rest want to give a targeted stimulus to the rich and corporations.
They disguise tax cuts by calling them âtax reformâ. Whatever they call it, they want the biggest tax cut for rich people that they can push through the House and Senate. Calling it âtax reformâ is useful because âyuuge tax cuts for the richâ wonât be all that popular politically.
Itâs inevitable that “middle class families” will end up paying more. Somebody’s got to pay for that massive military buildup. And the GOP cries of deficit piety are a shell game. Here is Kevin Drum:
When does this nonsense stop? Republicans arenât deficit hawks. They havenât been since the Reagan era. Republicans used to be deficit hawks, but the whole point of the Reagan Revolution was that tax cuts were more important than deficits. Their only concern about the deficit these days is as a handy excuse for opposing any increase to social welfare programs.
Trumpâs tax plan is the same old Republican orthodoxy that has been around for decades.
Wrongo recommends this article from Fortune Magazine in 1955: âHow Top Executives Liveâ. The GOP constantly says that if the 1% are forced to pay high taxes, they wonât work as hard to innovate and create jobs. This article, from the time when personal tax rates went from 40%-75%, shows they didnât need low taxes back then to work hard:
The successful American executive, for example, gets up early–about 7:00 A.M.–eats a large breakfast, and rushes to his office by train or auto. It is not unusual for him, after spending from 9:00 A.M. until 6:00 P.M. in his office, to hurry home, eat dinner, and crawl into bed with a briefcase full of homework. He is constantly pressed for time…
Wrongo is cranky about the GOPâs desire to always shift the tax burden downward, and about their success in doing it. What Trump will get passed is another round of debt-financed upper-class tax cuts.
That will suit Trump and Ryan just fine.
Letâs go out with some music that references the life and times of Jonathan Demme, director of âSilence of the Lambsâ and âPhiladelphiaâ, who died on Wednesday. Demme also directed the best Rock movie ever made, âStop Making Senseâ featuring the Talking Heads. Here is âLife in Wartimeâ live, and thatâs Parliament – Funkadelic’s Bernie Worrell on keyboards. This isnât the first time Wrongo has posted this video:
https://www.youtube.com/watch?v=obAtn6I5rbY
Those who read the Wrongologist in email can view the video here.
The Daily Escape:
(Iowa State Law Library)
Trumpâs first budget proposal was released on Thursday, and it hews closely to both Trumpian and Republican orthodoxy:
Trumpâs first budget…would increase defense spending by $54 billion and then offset that by stripping money from more than 18 other agencies. Some would be hit particularly hard, with reductions of more than 20% at the Agriculture, Labor and State departments and of more than 30% at the Environmental Protection Agency.
The White House blueprint does not address major safety net programs such as Social Security and Medicare, which the Overlord has promised to protect. While there are too many deep cuts to detail fully, here are a few from the WaPo:
It would also propose eliminating future federal support for the National Endowment for the Arts, the National Endowment for the Humanities and the Corporation for Public Broadcasting. Within EPA alone, 50 programs and 3,200 positions would be eliminated.
Trumpâs budget will eliminate thousands of government jobs, and that is a serious problem for Washington, DC. Moodyâs chief economist, Mark Zandi, estimates that Trumpâs proposed cuts would impact the Washington area bigly. It will reduce employment in the region by 1.8%, slash personal income by 3.5% and lower home prices by 1.9%.
Zandi reasons that cuts in non-defense spending would fall disproportionately hard on the Washington region, while the increase in military spending would be spread across the nation. Good paying defense jobs in your district, mostly non-union, and a defense contractor who kicks back to your campaign fund while building weapons that kill the baddies. Whatâs not to like?
The budget chops funding for the NIH by $5.8 billion, or close to 20%, and low income Americans will also lose:
And the Trump administration proposed to eliminate a number of other programs… [Including] the Low-Income Home Energy Assistance Program, which disburses more than $3 billion annually to help heat homes in the winter. It also proposed abolishing the Community Development Block Grant program, which provides roughly $3 billion for targeted projects related to affordable housing, community development and homelessness programs, among other things.
Some of this represents Trumpâs campaign agenda. Office of Management and Budget Director Mick Mulvaney explained on Wednesday:
In fact, we wrote it using the president’s own words. We went through his speeches. We went through articles that have been written about his policies…and we turned those policies into numbers.
You know, things like cuts to the State Department, because diplomacy is for wimps.
But most of Trumpâs budget is just a Republicanâs wet dream of a “drown the government in a bathtub” program. Having said that, Trump’s recent executive order to restructure the entire executive branch means the White House has broad latitude to make these huge cuts effective by simply shifting priorities of what to actually do with the money.
This budget represents fundamental change. Medicine, education and defense have received the lion’s share of government spending in the past. Any town with a hospital, a college, or a defense contractor had a stable income base upon which to grow their local economy.
Now, the Republican Party no longer believes the government has any role in the first two, so defense contractors will become the only Keynesian game in town.
This will be a terrible new baseline for Democrats to work from, assuming they ever get back into power. Trump means to end all of the New Deal era programs, and growing the tax base to support a return to higher levels of government spending will take decades.
Now, another Irish musical selection for St. Patrickâs Day. Calling modern Irish music âpunkâ sounds redundant, but there are quite a few punkish Irish bands. Black 47 is Wrongoâs favorite, but today we feature Thin Lizzy with âWhiskey in the Jarâ, a traditional Irish song that they updated in 1972.
Phil Lynott was the front man for Thin Lizzy. He was once asked how it felt to be black and Irish, and he answered: âLike a pint of Guinnessâ. Lynott lived fast, and died at 36 from heart failure in 1986. Here is âWhiskey in the Jarâ:
This makes Wrongo want a bottle of Bushmills 21 year old single malt. Oh wait, here’s one!
Those who read the Wrongologist in email can view the video here.
The Daily Escape:
(Slot canyon with dust devil â photo by Angiolo Manetti)
Yesterday, the Dutch voted in an election pitting mainstream parties against Geert Wilders, a hard-right, anti-Islam nationalist whose popularity is seen as a threat to politics-as-usual across Europe, and possibly, as an existential threat to the EU.
Wilders, who wants to “de-Islamicize” the Netherlands and pull out of the EU, has little chance of governing, as all of the mainstream parties have already said they won’t work with him. Given Hollandâs complicated form of proportional representation, up to 15 parties could win seats in parliament, and none are expected to win even 20% of the vote. OTOH, polls show that four in 10 of the Netherlands’ 13 million eligible voters were undecided a day before voting, and there is just 5 percentage points separating the top four parties, so Wilders could surprise everyone.
As Wrongo writes this, the Dutch election results are not known, but PBS NewsHour coverage on Tuesday surfaced a thought about taxing robots. PBS correspondent Malcolm Brabant was interviewing workers in Rotterdam:
Niek Stam claims to be the countryâs most militant labor union organizer. He says the working class feel insecure about their prospects because of relentless automation and a constant drive to be competitive. The union is campaigning for robots to be taxed.
Brabant then interviewed a worker:
Robots do not buy cars. Neither do they shop for groceries, which leads to a fundamental question: Whoâs going to buy all these products when up to 40% of present jobs vanish?
This isnât an entirely new idea. Silvia Merler, blogging at Bruegel, says:
In a recent interview, Bill Gates discussed the option of a tax on robots. He argued that if today human workersâ income is taxed, and then a robot comes in to do the same thing, it seems logical to think that we would tax the robot at a similar level. While the form of such taxation is not entirely clear, Gates suggested that some of it could come from the profits that are generated by the labor-saving efficiency…and some could come directly in some type of a robot tax.
The main argument against taxing robots is made by corporations and some economists (Larry Summers), who argue that it impedes innovation. Stagnating productivity in rich countries, combined with falling business investment, suggests that adoption of new technology is currently too slow rather than too fast, and taxing new technology could exacerbate the slowdown.
It can be argued that robots are property, and property is already taxed by local governments via the property tax. It might be possible to create an additional value-added tax for robots, since an income tax wouldnât work, as most robots are not capable of producing income by themselves.
Noah Smith at Bloomberg argues that the problem with Gatesâ basic proposal is that it is very hard to tell the difference between new technology that complements human work, and new technology that replaces them. Shorter Noah Smith: Taxation is so hard!
Why are Western economies stagnant? Why has wage growth lagged GDP growth? Automation is certainly a key factor, but rather than point the finger at the corporations who continually benefit from government tax policies, letâs just assign blame to an object, a strawbot, if you will. That way, we wonât look too carefully at the real problem: The continuing concentration of economic and political power in the hands of fewer and fewer corporations.
Automation isnât the issue, tax laws that allow economic treason by corporations in their home countries are the issue.
Why is nationalism on the march across the globe? Because fed-up workers see it as possibly the only answer to the neoliberal order that is destroying the middle class in Western democracies.
Letâs find a way to tax robots. Something has to offset Trumpâs tax breaks for the rich.
Now, a musical moment. Did you know that âpre-St. Patrickâs Dayâ was a thing? Apparently, some dedicated celebrators prepare for the day itself by raising hell for up to a week beforehand. With that in mind, here is some pre-St. Patâs Irish music, with Ed Sheeran singing âNancy Mulliganâ a love song about his grandparentâs marriage during WWII, against the wishes of her parents, and despite their Catholic/Protestant differences:
Those who read the Wrongologist in email can view the video here.