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The Wrongologist

Geopolitics, Power and Political Economy

Monday Wake Up Call – December 18, 2017

The Daily Escape:

Sunrise, Island Park ID, November 2017

The WSJ’s Weekend Edition had an article about the cultural and economic split between small towns and big towns in America. In “One Nation, Divisible”, Michael Phillips follows a young woman, Caity Cronkhite, who left rural Indiana for San Francisco. Caity recalls:

All growing up, if we were too smart or too successful or too anything, there was always someone ready to say, ‘Don’t be so proud of yourself’…

Caity was smart. She bucked the system to graduate from high school a year early, but the school would not let her be named valedictorian, because she had skipped a grade. She left town, got a scholarship to Carnegie-Mellon, graduated and became a technical writer for SalesForce.com.

Still, she remained attached to her home town. She wrote an online 5000+ word essay about Kingman IN. It brought thousands of hateful responses from Kingman, including:

So keep your elitists’ rear ends in your little office cubicles while we handle the tough, physical things that keep you and your perfect friends alive…

That anger about town vs. city brought to mind Merle Haggard’s 1969 tune, “Okie from Muskogee”. Haggard and the band were on a bus outside of Muskogee when a band member joked that the citizens in Muskogee probably didn’t smoke marijuana. In about 20 minutes, Haggard had the song. The band played it the next night at the Fort Bragg, NC officers club. And after the verse:

We don’t burn our draft cards down on Main Street,
We like living right and being free.

The officers stood and gave huge applause. They had to play the song four times to get offstage. The song later went to number one on the Billboard country music charts. At the time, Reuters reported: (emphasis by Wrongo)

Haggard has tapped, perhaps for the first time in popular music, into a vast reservoir of resentment against the long-haired young and their underground society.

So in 2017, a young woman worries about being accepted in her small home town after finding success while living in San Francisco. While 48 years earlier, “Okie” was telling small town America to have pride, and that it was ok to be for the Vietnam War, and against student protesters.

These two events made Wrongo think about the roots of today’s fractious sociopolitical divide in America.

People in small towns have to fit in, the place is too small to look different, or subscribe to ideas that are outside the main stream in their town’s culture. If they do, the local hierarchy has ways of enforcing conformance with the dominant ethos. People insist that you should fit in. They think that everybody should fit in, and they don’t understand why there are places in America that don’t operate that way.

Haggard’s hit brought small-town America self-identification and pride. And it galvanized the “us” vs. “them” attitudes in small-town USA that were opposed to the growing counter-culture of the 1960’s, and the student opposition to the Vietnam War.

Americans always gather into relatively small groups. People in cities have misconceptions about small town life, just like rural Americans have them about cities.

The nature of today’s politics, and the nature of group identity in America pushes us into sparring camps. You can call it your “tribe”, your “people”, or your “team”, but groups in small-town America have a well-defined sense of identity. It is different from the identity politics in big-city America, where there are hundreds of examples of people of many different groups. Large metropolitan areas are much more diverse, but they are also knitted together by a transcendent identity with place.

Ms. Cronkhite’s parents planned on selling the farm and retiring, but Caity wasn’t ready to let it all go:

If I ever have kids, they’re never going to understand this huge part of me…I want there to be a reminder of where I come from and who I am.

Her parents sold her about 10 acres for the per-acre price her father had paid in 1972. Caity plans to build a small house. She said:

I’m still a rural American.

But she doesn’t plan on moving back just now. Fewer and fewer of us are rural Americans, and while those societies shrink, no dominant identity is replacing it.

But the sometimes-toxic sociology of small groups, or Merle Haggard’s sentiments, can’t be allowed to destroy what America has in common. In fact, appropriation of culture and patriotism by one tribe is a threat to our common good. Thus when Haggard says:

We still wave Old Glory down at the courthouse,

He’s misappropriating, since every town has always flown Old Glory at the courthouse, and wouldn’t dream of taking it down.

Time to wake up America! Fight the appropriation of our symbols and ideals. To help you wake up, here is Merle Haggard with “Okie from Muskogee”:

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Saturday Soother – December 16, 2017

The Daily Escape:

Central Park NYC, December 12th – 2017 photo by Rommel Tan

Long-time readers know that Wrongo has a very low opinion of Speaker of the House Paul Ryan (R-WI), who he considers an intellectual joker. He is often given a pass by the main stream media, who suggest that he is a thoughtful and principled Republican. But once again, he looked like a partially-informed hack on Thursday when he said that Americans need to have more babies or risk a collapse of Medicare and Social Security.

His concern is about the declining US birth rate. The Boston Globe reports that:

Ten years ago, the typical American woman had about 2.1 children. Today, it is about 1.77, representing a collapse in fertility on par with the declines in other countries that yielded Japan’s rapidly graying population in the 1990s, or Canada’s massive present-day demand for immigrants.

From Ryan’s news conference: (parenthesis by Wrongo)

People — this is going to be the new economic challenge for America. People…I did my part, (Ryan has three kids) but we need to have higher birth rates in this country. Meaning, baby boomers are retiring, and we have fewer people following them in the work force…We have something like a 90% increase in the retirement population in America, but only a 19% increase in the working population in America…

It is true that birth rates in the US have declined, but that’s not necessarily bad news. For example, birth rates for teenagers hit a record low last year. Also, Wrongo recently described McKinsey’s report on jobs lost to automation that showed 75 million jobs are at risk in the US by 2030.

Perhaps we already have too many workers for the jobs revolution that is occurring all around us.

And there’s an obvious solution to the problem that Ryan ignores: Allowing more immigrants into the country, either to fill the jobs being vacated by retiring baby boomers, or as necessary to meet tomorrow’s job requirements. But Ryan shows that he’s all in with Trump’s hard line anti-immigration positions.

Should American women become brood mares? This isn’t a new concept. The fear of being outnumbered by racial and ethnic minorities is the driving force behind today’s alt-right, and the view was around in earlier white nationalist movements. HuffPo interviewed Kelly J. Baker, author of “Gospel According to the Klan”. Baker says that the need to ensure that white women were having more white babies was a key part of the Ku Klux Klan’s platform during its resurgence in the 1920s: (emphasis by Wrongo)

Baker said that the 1920s Klan was “nervous” about the possibility of widespread birth control for white women…To push back against the rising availability of effective birth control, the Klan told white women that having as many white children as possible is your job and it matters for your family and your race and for America.

And now, Ryan makes this a mainstream GOP idea. For all of the political empowerment of women in today’s headlines, the Ryan argument lands in the same place as today’s alt-right, and yesterday’s KKK.

Ryan and the GOP want to see more babies, but they won’t support young kids with health insurance through the Children’s Health Insurance Program (CHIP). Quartz reports that next month, 600,000 American children will lose their CHIP coverage. CHIP has been instrumental in ensuring health care coverage of children in US families that aren’t poor enough to qualify for Medicaid, but cannot afford any other form of insurance.

Republicans talk a lot about the cost of healthcare. The cost of not providing healthcare to children in an America with failing schools is impossible to calculate. It is very high, it lasts lifetimes and possibly, generations.

Yet, Ryan is saying that American women need to have more babies to Make America Great Again.

And we know that he’s asking for more white babies.

OK, it’s Saturday, and we need a break from toxic politics, and maybe from obsessing about shopping for gifts. Hanukkah began this week, so Wrongo looked for a soothing piece of music that was inspired by the celebration of the Festival of Lights. Here is “Hanukkah Overture for String Orchestra and Clarinet” by Adam Shugar.

If you look at the YouTube video, you will see that it has just 5,000 views. It should have many more. You should watch it because the music is good, and unlike most orchestral pieces, this string orchestra performs while standing. The video is shot from a high angle, and looking down allows you to see them all as they play together, almost like a choreographed dance. Here is “Hanukkah Overture for String Orchestra and Clarinet” played by the Orchestre Nouvelle Génération under the direction of Airat Ichmouratov, with Mark Simons on clarinet:

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

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Trump Signs Bill Containing Warning on Climate Change

The Daily Escape:

The Fuego Volcano in Guatemala erupts under the Milky Way, Antigua, Guatemala – photo by Albert Dros

While we were all focused on the Alabama senate election, on Tuesday, Donald Trump signed the National Defense Authorization Act (NDAA), a bill that sets spending limits for the US military in the coming fiscal year.

Buried in the bill is a discussion of climate change. The NDAA contains a provision making clear that “the sense of Congress” is that:

Climate change is a direct threat to the national security of the United States.

The provision cites statements from Defense Secretary Jim Mattis, former defense secretary Robert Gates, Chairman of the Joint Chiefs of Staff Gen. Joseph F. Dunford Jr. and the Office of the Director of National Intelligence (DNI).

This creates an interesting moment for Trump, who signed the bill knowing this was in its language. He did not add a signing statement disavowing the provision, so he’s placing the climate change provisions of the NDAA directly opposite his stance on climate change, and his disavowal of the Paris Agreement.

By signing the bill, Trump also ordered a report on “vulnerabilities to military installations” that climate change could cause in the next 20 years. More from the bill:

As global temperatures rise, droughts and famines can lead to more failed states, which are breeding grounds of extremist and terrorist organizations…In the Marshall Islands, an Air Force radar installation built on an atoll at a cost of $1 billion, is projected to be underwater within two decades. A three-foot rise in sea levels will threaten the operations of more than 128 United States military sites, and it is possible that many of these at-risk bases could be submerged in the coming years…

Lawfare reports that the bill’s climate change provision is as important for what it doesn’t require as for what it does. The bill doesn’t require that Gen. Mattis develop a policy to solve the problems that it acknowledges climate change poses. Instead, it merely requires that he provide an explanation of its “effects.”

This was Congress’s way of dealing with an earlier contentious debate about including the climate provision at all. The amendment to deny its inclusion failed by 185-234. Also, the military is not the agency responsible for regulating carbon emissions, so the impact of its requirements on policy may be small.

While the requirement that Mattis produce a report on the “mitigations” that will ensure “resiliency” could be construed as creating a policy response, the fact remains that there is no explicit direction that he implement any of the mitigations on which he’ll be reporting.

More from Lawfare: (brackets and emphasis by the Wrongologist)

According to the Congressional Research Service, as of 2012, the Department of Defense was ‘the largest organizational user of petroleum in the world.’…And the thousands of [military] aircraft…accounted for 22% of all jet fuel used by the US as of 2008.

The bill includes money to buy 30 more planes than the military asked for (24 reliable old F/A-18s instead of 14, and 90 of the newer lemon, the F-35, instead of 70). The US Navy asked for one new Littoral Combat Ship. The NDAA budgets for three.

Translation: $Billions for the aerospace and ship-building government contractors. This year, the Defense expenditures tab will come to about $2,160 for every man, woman and child in the US.

Feel like you’re getting your money’s worth?

 

A quick note about Rock and Roll Hall of Fame nominee Sister Rosetta Tharpe. Most haven’t heard of her, but she was an innovator on the electric guitar. She preferred to play a Gibson SG, and she was among the first to use heavy distortion. In 1947, Sister Rosetta put the then 14-year-old Little Richard on stage. Johnny Cash said that she was his favorite singer, and biggest inspiration. When she plays, you understand where Chuck Berry got his big guitar ideas. Here is Sister Rosetta Tharpe doing “That’s All” from 1964’s “Live in Paris “album:

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

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Rising Interest Rates Will Add $233 to Monthly Household Expenses

The Daily Escape:

Snoqualmie Falls, WA

We are in the middle of the holiday shopping frenzy, so it may be a bad time for Wolf Richter to mention this:

Outstanding “revolving credit” owed by consumers – such as bank-issued and private-label credit cards – jumped 6.1% year-over-year to $977 billion in the third quarter, according to the Fed’s Board of Governors. When the holiday shopping season is over, it will exceed $1 trillion.

If that’s not bad enough, WalletHub points out that the Federal Reserve is planning on raising interest rates, and that will make credit card debt a lot more expensive, since credit card rates move with short-term interest rates:

The Fed’s four rate hikes since Dec. 2015 have cost credit card users an extra $6 billion in interest in 2017. That figure will swell by $1.46 billion in 2018 if the Fed raises its target rate again in December, as expected.

Everyone expects the Fed to raise rates today. This would bring the incremental costs of five rate hikes so far to $7.5 billion next year. So how do these rate hikes translate for households with credit card balances? Finance charges are concentrated in households that do not pay off their balances every month. Many of these households are among the least able to afford higher interest payments. More from Wolf: (emphasis by the Wrongologist)

195.9 million consumers had a revolving credit balance at the end of Q3, with total account balances of $1.35 trillion. This equals $6,892 per person with revolving credit balances. If there are two people with balances in a household, this would amount to nearly $14,000 of this high-cost debt. If the average interest rate on this debt is 20%, credit-card interest payments alone add $233 a month to their household expenditures.

Economists are assuming that the Fed will hike interest rates three times in 2018. The Fed thinks that the “neutral” rate (the target at which the federal funds rate is neither stimulating, nor slowing the economy) is between 2.5% to 2.75%. Since today’s rate is 1.25% to 1.50%, that is a long way up from the current target range. Again, from Wolf:

Interest rates on credit cards would follow in lockstep. These rate hikes to “neutral” would extract another $8 billion or so a year, on top of the additional $7.5 billion from the prior rate hikes.

But there is a double whammy, because credit card balances will also continue to rise. Rising credit card balances combined with rising interest rates on those balances will produce sharply higher interest costs to people who already can’t pay off their monthly credit card balances.

For many card holders with poor credit, this will eventually lead to default. Credit card delinquencies have started to tick up, from 2.16% in Q1 2016 to 2.53% in Q3. That is a low overall level of delinquency, but we need to look at to losses in the subprime segment (those with the lowest credit scores) and at the lenders that specialize in subprime lending. And there, delinquency rates are jumping.

Debt is not always a choice. A catastrophic medical debt, the death of the primary breadwinner, or loss of employment with no new job for an extended period of time can destroy a lifetime of savings in as little as a few months to a few years.

Since the crash of 2007, a great many people have be unable to find employment that is enough to support a family. And they have taken multiple jobs to try to make ends meet. Or any job that they can find.

And this is in what economists and politicians say are the best of times, with the lowest unemployment rate since 2000.

Increased costs for consumer credit coupled with increased delinquencies could become a third point reason for populist economic anger. Tax cuts for corporations and the wealthy, and the coming GOP attack on Medicare and Medicaid are also justifiable reasons for economic anger.

Where will voters turn for a solution?

After all, governance has ceased to be a part of the job description of our political parties.

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Iran: Our New Enemy in the Forever War

The Daily Escape:

Mt. Hood at sunset as seen from Trillium Lake, OR – photo by Steve Schwindt

We are opening a new front in the Forever War. The WSJ reports:

The Pentagon plans to keep some US forces in Syria indefinitely, even after a war against the Islamic State extremist group formally ends, to take part in what it describes as ongoing counterterrorism operations…

There are approximately 2,000 US troops in Syria, along with an unspecified number of contractors supporting them. Last month, the US withdrew 400 Marines from Syria.

The Pentagon has said the forces will target parts of Syria that aren’t fully governed by either Syrian or rebel forces. US defense officials stressed there would be no large, permanent bases in Syria like we maintain in Germany and South Korea. Instead, troops will be assigned to smaller bases and outposts. These small unit forts are usually called Forward Operating Bases (FOB).

The US will now have FOBs in Syria, just like we have in Afghanistan. Anyone familiar with our Afghani FOBs can tell you that this can be a road to defeat. These bases are usually undermanned and difficult to resupply, or defend. We rely on air support to assist when these bases are attacked. That becomes difficult or impossible in bad weather, and if they are attacked with overwhelming force. Time is of the essence, but our jets and helicopters are at best, usually 10-30+ minutes away.

And our decision to remain in Syria is actually worse than that. Turkey, Iran and Russia are already on the ground in Syria, along with Hezbollah and the Syrian army. According to Reuters, CIA Director Pompeo sent a letter to Major General Soleimani of Iran’s elite Revolutionary Guards (IRG) warning him not to attack US or Coalition forces in Syria or Iraq. According to Pompeo, Soleimani refused to open the letter.

Elijah J. Magnier, a long-time Middle East analyst, reported that Soleimani replied in a verbal message via Russia to the head of the US forces in Syria, advising him to pull out all US forces, “or the doors of hell will open up”:

My message to the US military command: when the battle against ISIS…will end, no American soldier will be tolerated in Syria. I advise you to leave by your own will or you will be forced to it…

Given that many Arabs in the ME are very angry at Trump’s Jerusalem declaration, our troops might become tempting targets for pro-Syrian forces on the ground near our FOBs.

As they used to say in English Lit, compare and contrast the Trump administration’s message with what Putin is doing in Syria: On Monday, Putin visited Syria to announce that a “significant” number of Russian soldiers are going to be withdrawn.

We are staying indefinitely, and Russia is withdrawing a “significant” portion of their Syrian forces. Everyone knows that Russia will be there indefinitely, but they are staying with the full consent of the Syrian government.

In business, you sign the agreement and put it away. If you have to read it again, generally, you are screwed, and dialing up your lawyers. We had an agreement with the Russians to be in Syria while ISIS was viable. Now, they are largely defeated. We seem to think we can tear up whatever agreement we want, whenever we want to.

We are becoming the party nobody wants to have an agreement with. Here is how our current plan will operate:

  • We keep our troops in a country where they’re not wanted
  • Since they’re not wanted, they will eventually be attacked
  • Once attacked, we will have to reinforce them, to fight the “terrorists”

Trump is hoping that Iran’s reaction to our forces in Syria can be a pretext for an expanded conflict with Iran. Finding common cause with Iran is the key to peace in the Middle East. The US is needlessly fanning the flames of anger and violence. Cooler heads must prevail in Washington to prevent an utter disaster.

We should dismiss General Soleimani’s threats, since the last thing Iran wants is war with the US and Israel. If they attack US forces, they risk just that, and they will drag Syria into a new war.

OTOH, our troops will be attacked, and opinions will differ on who conducted the attack.

The Global War on Terror is a fraud that benefits only a few. A lot of money is changing hands. Hundreds of billions of dollars. One group that benefits are the Republicans.

They want to gut Medicare.

But the sacred defense budget must be expanded.

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Saturday Soother – December 9, 2017

The Daily Escape:

Fall in Sugar Hollow 2017, near Charlottesville, VA

Wrongo doesn’t have much Christmas spirit this year. Maybe the fractured state of US politics has something to do with his grumpiness. But, it’s Saturday, and we need something positive as we face the start of the gift-buying and gift-giving season, so let’s focus on Iceland: (editing and brackets by the Wrongologist)

Icelanders have a beautiful tradition of giving books to each other on Christmas Eve and then spending the night reading. This custom is so deeply ingrained in the culture that it is… [called] the Jolabokaflod, or “Christmas Book Flood,” when the majority of books in Iceland are sold between September and December in preparation for Christmas giving.

Imagine sitting around with the family on Christmas Eve and everyone reading by the fire. That sounds positively subversive in our consumer-driven culture. OTOH, in Iceland, all the restaurants are closed on the 24th and only a few open on the 25th, so the incentive to stay at home is greater than in the US.

Treehugger points out that Iceland, with a population of only 329,000 people, is an extraordinarily literary country where people love to read and write. And according to the BBC:

The country has more writers, more books published and more books read, per head, than anywhere else in the world…One in 10 Icelanders will publish [a book].

Icelanders receive a free catalog of new books called the Bokatidindi in the fall. They then pore over the new releases and choose which ones they want to buy. Baldur Bjarnason, Icelandic book industry researcher says:

It’s like the firing of the guns at the opening of the race…It’s not like. this is a catalog that gets put in everybody’s mailbox and everybody ignores it. Books get attention here.

And people prefer physical, paper books. A bookstore manager told NPR:

The book in Iceland is such an enormous gift, you give a physical book. You don’t give e-books here.

Now, at The Mansion of Wrong, physical books are always on the Christmas gift menu. This year, Wrongo intends to give multiple copies of two books to family:

  • American Wolf” by Nate Blakeslee is the biography of a single female wolf in Yellowstone. But the story is told from many sides, including those ranchers who opposed the re-introduction of wolves into the park, the wildlife biologists that worked to help wolves flourish in Yellowstone, and the hunters looking for their next trophy. It shows the best, and the pettiest of our society in a microcosm.
  • Spy of the First Person” by Sam Shepard tells Shepard’s story of facing death from ALS. This isn’t for everyone, but Wrongo’s brother died of ALS in 2016, and this first-person account of what an ALS victim goes through has meaning for Wrongo, his sisters, and all who loved Kevin.

Reading on a winter evening is something everyone ought to incorporate into their family’s celebration of Christmas. At the Mansion of Wrong, we celebrate physical books. They are among the few things we collect, that we read, and occasionally re-read, that we pass on to family and friends. Remember: 30 minutes of reading per day equals about 2.2 million words a year. And you could learn a few things!

So, for at least a few minutes we have forgotten politics and toxic personalities. Keep it going by brewing a fresh cup of Redbeard Blue Collar Coffee: ($16.95/lb.). With its “notes of milk chocolate and salted caramel and a smooth body at a medium roast level”, it’s kind of a Christmas blend. Sit by the window and watch the last few leaves fight to remain on the trees, and listen to The Chamber Music Center of NY perform a flash mob of chamber music at the Bank of America Tower:

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

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You Say You Want a Revolution

The Daily Escape:

Waimea Canyon, Kauai Hawaii

Wrongo has suggested many times that America needs a revolution. He thinks that the US political process has been so captured by large corporations and the very rich that the average person no longer can have any impact on policy. In many states, the average person isn’t even totally confident that he/she will be permitted to vote the next time they go to their local precinct.

We are in the midst of a political crisis: The people have lost faith in systems which they feel don’t respond to real people and in representatives that won’t represent us, or the society at large. Rather than debate issues thoughtfully, we are whipsawed by the appeals to emotion launched daily into the ether by the tweeter-in-chief.

Two current issues demonstrate the danger. First, Jerusalem. It turns out that Tillerson and Mattis opposed the president’s decision to recognize Jerusalem as the capitol of Israel, and move our embassy there. You know from the headlines that Trump wouldn’t listen to anyone who told him this would be a very bad idea. The State Department’s response was to issue a worldwide travel alert for those Americans who think they’re still welcome around the world. The WaPo reported that a Trump confidant said:

It’s insane. We’re all resistant…He doesn’t realize what all he could trigger by doing this.

Second, North Korea. Maybe you read this headline: North Korea says war is inevitable as allies continue war games.

Martin Longman asks the pertinent question:

The so-called adults in the room utterly failed on the Jerusalem issue, so are we supposed to put our trust in them to steer a sane course on the Korean peninsula?

What are we talking about here? Can we wait out Trump, and just work like hell to replace him with a better president in 2020? Would nuclear war get him re-elected?

What about the GOP’s control of both houses of Congress? On Thursday, Speaker Ryan told us what we face next year: the GOP will tackle the budget deficit and national debt by cutting Medicare and possibly Social Security, now that the GOP’s donor class has their tax cuts.

Things have to change, and there are only two options, neither very good. First, we can try and excise the moneyed influence via the ballot box. That is the “democratic revolution” that Bernie championed in 2016. The definition of democratic revolution is:

A revolution in which a democracy is instituted, replacing a previous non-democratic government, or in which revolutionary change is brought about through democratic means, usually without violence.

Since we no longer have a functioning democracy, a “democratic revolution” to bring it back is what we require. Is it the only way to right the American ship of state?

The second option is a coup of some kind.

  • It could be via impeachment, assuming there were high crimes and misdemeanors that Trump had committed, and assuming a Republican House would impeach him, and a Republican Senate would convict him.
  • It could come via a 25th Amendment action, which might be marginally more acceptable to Republicans, but is as unlikely as impeachment.
  • Least desirable, and least likely would be a true coup, where the “adults in the room” (in the oval office, or the Pentagon) get leverage over the Commander-in-Chief. Could a real coup stay bloodless? That seems highly doubtful, and Wrongo would rather trust Trump than a junta.

Removing Trump won’t fix what’s wrong with the Republican Party. We need to prioritize and triage this situation, focusing first on taking back the House and Senate before 2020.

Who can we count on to right the ship?

Not today’s Democrats. They are led by Chuck Schumer who approves of Trump’s Jerusalem decision. The Democrats must fire Pelosi and Schumer, or die.

What about America’s largest voting bloc, Millennials? Can they step up to the challenge?

What about America’s women? In 2016, women supported Clinton over Trump by 54% to 42%, while Trump carried non-college educated white women 64% to 35%. The #metoo movement promises to become much more than the outing of bad guys: It could weaken both male privilege, and their power.

Firing a few slime balls isn’t revolutionary, but voting them out of office would be a paradigm shift.

The stock market is in the stratosphere, and consumers are happily clicking on Amazon’s “place order” tab.

Measly tax cuts will trickle down to rubes like us, while the plutocrats will die of laughter.

Can women and millennial voters look beyond the GOP’s messaging that the Muslims are always to blame, and Israelis suffer the most?

Will they care enough about whatever Mueller turns up on Trump to go out and vote?

Revolution is in the air. Why should the right have all the fun?

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What Will Dems Do When The GOP Says: “The Deficit Matters”?

The Daily Escape:

Big Ben being cleaned. In order to clean the four clock faces, every 5-7 years, skilled climbers hang down from the belfry on ropes, and they clean the front of each clock face. There is one removable panel of glass on each face, which is removed during the cleaning so that the clock maintenance staff can talk to the cleaners while they’re working. (“you missed a spot?”) Hat tip to Wrongo’s friends at the Goodspeed Opera House!

Yesterday we pointed out that there is a very large program that the country needs to fund if we are to maintain our position in the global superpower competition. The issue at hand is the stunning thought that we might lose up to 75 million jobs to automation in the next 13 years, and that we need to train the out-of-work unfortunates for new jobs in a different economy.

It’s highly unlikely that we would need to train that many, but it could be 25 million Americans. And we have no idea where the money would come from to accomplish that. After all, the Republicans now plan to reduce tax receipts bigly, thus adding to the deficit and thereby, to the total debt of the country.

We know that as soon as the new tax cuts begin accruing to their patrons, the GOP will start talking about reducing the budget deficit by cutting non-military expenses. Ron Brownstein conceives the Republican tax plan correctly:

Gaius Publius observes: (brackets and editing by the Wrongologist)

As they did in the 1980s, Republicans are laying a “deficit trap” for Democrats. As they did before, they’re blowing up the budget, then using deficit [fear] to force Democrats to “be responsible” about cutting social programs — “because deficits matter.”

In the 1980s Republicans ran up the deficit, then insisted that Democrats work with them to raise taxes on the middle class to over-fund the Social Security (SS) Trust Fund. This converted SS from a pay-as-you-go system that increased revenues as needed via adjustments to the salary cap, to a pay-in-advance system. That allowed any excess SS money to be loaned back to the government, partially concealing the large deficits that Reagan was running up.

Today, Republicans are expanding the deficit again, and are already starting to talk about deficits to argue for cuts in what they call “entitlements” — Medicare, Medicaid, and eventually Social Security, even though Social Security can be self-funding.

Fear of deficits is the go-to Republican ploy to try to maim or kill the FDR and LBJ-created social safety net. To the extent that Democrats are willing to accept the GOP’s argument that both parties need to be responsible to decrease the deficits, they will support cuts in social services. Even Obama was willing to consider doing just that in the name of “bipartisanship”. More from Gaius:

The reality — Deficits aren’t dangerous at all until there’s a big spike in inflation, which is nowhere near happening and won’t be near happening for a generation…

Do we want the US government to shrink the money supply year after year after year, by running budget surpluses, or do we want to grow the amount of money in the private sector, making more available for use by the middle class?  The trillions spent on the current GOP giveaway to the already-rich could have been given to college students in debt, or people still underwater in their mortgages since the Wall Street-created crash of 2008. It could have been used to build better roads, airports, seaports or a national high speed internet backbone.

What would be the effect of that re-allocation of money?

Back to Gaius Publius for the final words. Which of these three options would you rather the government choose:

  • Spend money on the already-rich?
  • Spend money on you and the country’s needs, ignoring the pleas of the already-rich?
  • Hoard as much money as possible in a vault and spend the least possible?

The first is the GOP’s current tax plan. The second is a plan for the many, an FDR-style economic policy. The third is the GOP’s wet dream, one that they will ask Democrats to help them accomplish once the already-rich have banked their share of our tax money.

Wrongo’s fear is that at some point down the road, a compromise will be offered up: Cuts to social programs in exchange for a repeal of some of the more onerous tax cuts. The only issue will be the extent of the cuts to social programs.

It will be celebrated as bipartisan sanity returning to Washington.

Our system is revolting. Why aren’t we?

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Automation Will Cost 75 Million US Jobs By 2030

The Daily Escape:

Torres Del Paine National Park, Patagonia, Chile. Torres Del Paine is known for its mountains, glaciers and grasslands that shelter rare wildlife like Guanacos.

Wrongo has written many times about automation taking jobs that will not be replaced onshore. McKinsey & Co. has a new study that finds that job losses due to automation will take out anywhere from ten to twenty percent of the current global workforce by 2030:

As many as 800 million workers worldwide may lose their jobs to robots and automation by 2030, equivalent to more than a fifth of today’s global labor force.

The report covers 46 countries and more than 800 occupations. The McKinsey Global Institute study found that even if the rise of robots is less rapid than they expect, 400 million workers could still find themselves displaced by automation and would need to find new jobs over the next 13 years. McKinsey said that both developed and emerging countries will be impacted. Machine operators, fast-food workers and back-office employees are among those who will be most affected if automation spreads quickly through the workplace. Bloomberg made a chart summarizing the jobs lost by country:

Source: Bloomberg

This implies that some 75 million jobs are at risk in the US by 2030, to be replaced by…something.

The bottom line is that many of the unemployed will need considerable help to shift to new work, and as a result, starting salaries will continue to flat line. McKinsey paints a rosy picture about the future jobs market post-automation. They say that the economies of most countries will eventually replace the lost jobs, but are a little unclear on what the new jobs will be. They mention health care, infrastructure, construction, renewable energy and IT as likely job areas.

But the challenge is how the displaced workers learn the new skills necessary by 2030. Axios quotes Michael Chui, lead author of the report on the needs for retraining:

We’re all going to have to change and learn how to do new things over time…It’s a Marshall Plan size of a task…

How will America fund a Marshall Plan for retraining 75 million of us, particularly when we’ve just given the very corporations who are automating our jobs even more of a break on their tax bills? It’s unlikely that the Republican-controlled Congress will have any desire to fund the necessary comprehensive re-training effort. If Congress had any foresight, they could have made their new corporate tax cuts conditional on these same firms paying for the job retraining that their automation will cause for American workers.

But, it will be our job to figure out where these new training funds will come from, right along with the funds we have already given to the job creators Republican donors.

And what if you don’t have the money or learning aptitude to acquire these new skills? Well, you are likely to be both unemployed and poor. And that mean tens of millions more Americans will not have the resources to stay out of poverty.

Perhaps CEOs and Congresscritters ought to remember that there are enough guns for every man, woman and child in this country, and many are in the hands of the very people who would be hurt most by automation.

We can’t hold back the tide of automation, but we can be smart about how we, as a country make the transition to fewer very highly-skilled workers and many narrowly-skilled workers. There are questions to ask, and solutions to craft for the post-2030 world.

How will America’s forgotten workers survive in a society that is led by people who don’t care if they have a job?

How will America’s forgotten workers survive if the political establishment tries to unwind the social safety net while celebrating the progress of technologies that cost jobs?

That could lead to torches and pitchforks.

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Monday Wake Up Call – December 4, 2017

The Daily Escape:

Old railroad tracks near Folsom, CA – December 2017 photo by Merrill Dodd

This will be Wrongo’s last column discussing the tax bill. Here is a chart describing the differences between the Senate and House tax bills:

Source: WSJ

The big question is will the tax bill really go through reconciliation, or can Paul Ryan convince House Republicans to vote for it essentially as is? The three factions Ryan has to deal with inside his own party might make a straight agreement a hard sell. Will a successful reconciliation happen? Odds seem to be in its favor. However, things could go sideways. There’s plenty in the bills to anger just enough of the three Republican House factions, and they’re more exposed to a potential 2018 wave election than the Senators. State and local tax deduction are a sticking point, and what about the deficit? It will be an interesting and stressful next few weeks.

Returning to yesterday’s David Stockman’s analysis: The standard deduction is doubled in both bills to $24,000 per household, costing $737 billion while changing the tax brackets from seven to four (in the House bill) costs $1.17 trillion.

When all the puts and takes are finished on the personal income tax side, what America gets from 2018-2027 is a $1.20 trillion net reduction in personal income taxes. But, as we showed in yesterday’s chart, dead people and rich people stand to benefit the most.

So, what’s left is a tiny $352 billion tax cut for rest of America’s 145 million tax filers over the entire next decade. On average, that’s about $242 per person per year!

Couldn’t $1.4 trillion been better spent on refurbishment of our infrastructure rather than in giveaways to corporations? Do corporations really need more government aid at a time when they are recording near-record profits, and hold huge cash reserves that they are not spending on hiring, wage increases or investment in the USA?

It’s long past time for America to wake up!! Whether you support the tax bill or hate it, it’s also past time to clean out the sewer that is Congress. It will take about six years of organizing, finding progressive candidates, and GETTING OUT THE VOTE, to deliver mostly new faces in DC.

We must break up the “old thugs club” that Congress has become. To help us wake up and start on political renewal, let’s listen to George Harrison’s “Taxman”. This was the Beatles’ musical complaint about how much they were paying in taxes in the UK. “Mr. Wilson” and “Mr. Heath” are mentioned in the lyrics. They are former British Prime Ministers Harold Wilson and Edward Heath, who contributed to writing English tax laws that at one point had a 95% marginal tax rate.

There are no high-def video recordings of the tune available online by the Beatles (it was released in 1966 on “Revolver”), so here is Joe Bonamassa performing “Taxman” live at Liverpool’s Cavern Club, in June 2016. It’s his bluesy take on the Beatles’ pop sensibilities:

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

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