Daily Escape – Page 96 – The Wrongologist

Monday Wake Up Call – April 1, 2019

The Daily Escape:

Racka Sheep, Hungary, April 2017 – photo by Laszlo Balogh.

The Trump legacy keeps on giving. Forbes reports that when Trump’s tax bill passed in late 2017, it included:

“A new tax on litigation settlements: no deduction for legal fees…..That means many plaintiffs must pay taxes even on monies their attorneys collect. Of course, the attorneys must also pay tax on the same money.”

Robert W. Wood, a Forbes contributing writer who follows taxes, cites the case of Edwin Hardeman who won $80.5 million in a suit against Monsanto’s Roundup. From Forbes:

“Hardeman was awarded a bit over $5 million in compensatory damages, and $75M in punitive damages. The combined contingent fees and costs Mr. Hardeman pays his attorneys might total as much as 50%. If so, the plaintiff would get to keep half, or $2.5 million of the $5 million compensatory award. Since it is for his…non-Hodgkin’s lymphoma, that part for physical injuries should not be taxed. Then, of the $75 million punitive award, $37.5 million goes to legal fees and costs, and $37.5 million to Hardeman. So before taxes, the plaintiff’s take home is $40 million.”

But because of Trump’s new math, Hardeman’s $75 million punitive damages award is fully taxable, with no deduction for the fees he pays to his lawyer. Between federal taxes of 37% and California taxes of about 13.3%, Hardeman could lose about 50% to the IRS and California Franchise Tax Board. He would still owe another $37.5 million to his lawyers, so his after-tax take from an $80 million verdict only $2.5 million.

A $2.5 million award isn’t chump change, but this is another effort by corporations and Republicans to discourage law suits seeking punitive damages by plaintiffs. Notably, compensatory damages for physical injuries or physical sickness are still tax-free, but not punitive damages.

Doesn’t paying taxes on money you don’t receive seem un-American? The reach of corporate interests into our laws cannot be overstated. It will take a generation to reverse all of the inroads corporate lobbyists have made into our tax laws alone.

So, wake up America! It’s time to change capitalism so that it works for the people, not just for the owners and managers of corporate America. Bill Maher had a great discussion on his show “Real Time“. He echoed FDR’s “Four Freedoms” while commenting on how countries with a higher socialism-to-capitalism mix rank as happier than the US in the recent World Happiness Report. Maher says;

“Happiness isn’t only about what you have. It’s also about what you don’t have to worry about,”

Maher recommends rebranding Capitalism Reform as “Capitalism Plus.” Because, “It’s a plus when you get sick and you can focus on getting better instead of not going broke“. Or, ending up sleeping under an overpass.

Maher ends with:

“Does pure unbridled capitalism work? I guess that depends whether you’re on the board of Boeing, or onboard a Boeing.”

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

Don’t Call Warren a Wonk

The Daily Escape:

Bryce Canyon, Utah – 2019 photo by AccountexpiresSept10

(Wrongo has been a little distracted by the Barr Letter and the aftermath of Russiagate. He’s spent a ton of time checking out who is recanting their positions, and who is doubling down. That explains the lack of daily posting. Also, there will be no Saturday Soother this week as Wrongo and Ms. Right take advantage of Broadway and NYC’s nightlife. There will be cartoons on Sunday, though.)

Wrongo is beginning to place Pete Buttigieg near the head of the 2020 class of presidential candidates. He’s smart, an intellectual, and most important, someone who thinks and speaks with nuance about our politics. Wrongo also likes Elizabeth Warren. She’s turning out ideas at a higher rate than any of her competitors. This, from Charlie Pierce: (brackets by Wrongo)

“The Senator Professor Warren Policy Shop and Idea Factory continues to operate at full capacity. First, a little something-something from the Des Moines Register: Warren has not shied away from confronting those affected by her policies, delivering them directly to those industries’ doorsteps. Just as she announced her plan to break apart the nation’s largest tech companies before heading to one of the [agricultural] industry’s largest gatherings…”

Warren announced her plan to take on corporate agriculture just before traveling to Iowa to speak at a rural issues forum. The companies she names in her plan — Tyson, Dow-DuPont and Bayer-Monsanto — are all key players in Iowa’s economy. More:

“Warren argues small farmers are unable to get ahead ‘because bad decisions in Washington have consistently favored the interests of multinational corporations and big business lobbyists’ over their own. Warren said during a recent interview with the Register ‘The number of purchasers of soybeans or hogs has shrunk dramatically….The number of seed providers has shrunk dramatically, and the diversity of the seeds (offered) has shrunk. Concentration in those industries has put a real squeeze on small- and medium-sized farms in Iowa.”

But Warren is being concern-trolled as an unlikeable, wonkish professor, while Buttigieg gets praise for learning Norwegian in order to read a favorite author. More from Pierce:

“The temptation will be great for people to hang the deadly Wonk label on her, an especially painful tag for a woman. But to do so is to ignore the fundamental theme that all of these proposals have in common: a multi-front attack on…monopoly power as an enemy of the poor and middle class….”

Bias remains in all of us, even as we try to ignore it. Wrongo wonders if non-MAGA males will view a smart female candidate like Warren differently than a male competitor.

Buttigieg is impressive. He may be young, but he’s serious, intelligent, and well-versed in the issues.

Warren, a college professor and US Senator, is every bit the intellectual equal of Buttigieg and, like Mayor Pete, is light-years smarter than Donald Trump.

Here’s the problem: When men listen to Buttigieg, they hear intelligence, humility, and a willingness to learn. When they listen to Warren, do they hear something different, and maybe, less likeable?

That was true in 2016. Hillary Clinton was held to a higher standard than Donald Trump. Her negatives were far higher than would have been true for a male candidate with similar strengths. Despite more than three decades of public service, Clinton lost to the most unqualified and unfit Presidential candidate in our nation’s history.

Can Democrats nominate another woman so soon? If so, should Warren be the one?

Warren is an intellectual force who wants capitalism reform. She articulates real policies, and attacks the class war waged by the rich. Like Mayor Pete, she has the ability to present complex ideas in ways that are both accessible, and actionable.

Maybe, “wonk” won’t stick to her as it did to Hillary. “Wonk” implies focusing on technicalities that ordinary people find boring, or beyond their understanding. The wonk tries to describe a small world, while the rest of us mostly try to focus on the big picture.

Warren seems the opposite of a wonk. She is more like Teddy Roosevelt than Paul Krugman. No one would call Theodore Roosevelt, a demonstrated reformer with anti-plutocrat chops, a wonk. It should be difficult to portray Warren that way.

Warren has found a way to merge an economic agenda and Democratic voters’ deep concern about our political system. She says, “rebuild democracy.” Accountability, reform, oversight, anti-corruption brings it all together.

But there are those in the media who think Warren is wonky. There also are men who, in 2019, still have trouble listening to a smart woman.

Clearly, as a society, we haven’t made nearly the progress we like to give ourselves credit for.

Warren needs to avoid the media painting her into a corner. Her message is resonating.

Plenty of Fallout From Mueller’s (Non) Findings

The Daily Escape:

Monument Valley – photo by Nathan Fitzgerald

How comfortable will Americans be with Trump in the White House, now that they have learned that he did nothing prosecutable while he was trying to get the job?

Larry Sabato at University of Virginia, says that the fate of the Trump administration is now in the hands of the voters in November 2020:

“Democrats only control who they nominate and what they emphasize in the campaign….On policy, Democrats have a wide variety of subjects that could allow them to make a favorable contrast with Trump: climate change, health care, and economic fairness, just to mention three. The message and the messenger will be critical.”

Sabato points out that the Democrats did not run on the Mueller probe in the 2018 mid-terms, and that for the most part, the announced 2020 candidates haven’t really been doing much of that either.

The biggest fallout from the Mueller investigation is that Trump gets to say he’s an undeserving victim for the next two years. No matter what negative things may come out in the next two years, Trump has been inoculated against real political harm. He can always say it’s the same people who were wrong about him during the Russia investigation. He’s certain to keep saying the media’s coverage of him is “Fake News”.

One victim of Mueller’s non-findings is the main stream media. They were largely anti-Trump and anti-Russia throughout the Russia investigation. Now, they look biased in exactly the manner that Trump has been saying they were for the last two years.

Matt Taibbi has an article, “It’s official: Russiagate is this generation’s WMD” in which he says:

“Nobody wants to hear this, but news that Special Prosecutor Robert Mueller is headed home without issuing new charges is a death-blow for the reputation of the American news media.”

He means most of the mainstream media. It’s a long read in which Taibbi highlights several media outlets including the NYT. He starts with Monday’s Times editorial: “We don’t need to read the Mueller report”. Taibbi says they make that point because: (brackets by Wrongo)

“We [the NYT] know Trump is guilty, Baker at least [NYT’s Peter Baker] began the work of preparing Times readers for a hard question: “Have journalists connected too many dots that do not really add up?”

He compares the media’s coverage of Russiagate to their coverage of whether Iraq had weapons of mass destruction (WMD) when we were making the decision to invade during GW Bush’s administration. In hindsight, the media was badly compromised then when they dutifully reported what the administration wanted them to report.

Finally, the Democrats have to deal with their own fallout. They can continue investigating Trump, looking for some fire behind all the smoke. Or they can move forward, and focus on building a winning campaign for 2020. It’s possible that the ongoing House investigations of Trump may bear fruit, and provide some campaign fodder.

Journalism in 2019 appears to have returned to the way it was in America’s early history. It’s become another partisan element in our politics. And, as the process of journalism has decayed, somehow, people’s ability to contextualize facts seems to have decayed right along with our journalists.

The reputation of the American media as free, independent and truth-seeking was always a myth. Think about our unjustified Spanish-American war (“Remember the Maine”) was more than 100 years ago and it was promoted by the press (Hearst papers).

Then there was that pesky Vietnam War, which the US press supported for years. Back then, we had music, like Country Joe’s “(1, 2, 3, 4) What are We Fighting For”, Arlo Guthrie’s “Alice’s Restaurant” and Neil Young’s “Four Dead in Ohio” as our alternative news media.

We do know that Russia conducted a sophisticated information operation to influence the 2016 election. Mueller’s investigation firmly established this. But Wrongo still doesn’t see anything to say their efforts upended the 2016 electoral results.

The various Congressional and DOJ investigations will continue, just as sure as the sun will rise in the east. What is uncovered is likely to be more of the same, and not advance the ball towards the goal line.

Hopefully soon, we’ll see a press conference by AG Barr and Mueller. That will be must-see TV.

Monday Wake Up Call – March 25, 2019

The Daily Escape:

Ice climbing remnant glaciers on Mt. Kilimanjaro, Tanzania – 2018 photo by Christian Pondella. The climber, (upper right) Will Gadd, said: “We were climbing ice that is easily 10,000 years old and isn’t going to be there next week….We camped up on top of Kilimanjaro for about five days, and some of the things we climbed on, we came back and they had fallen over.”

Now that the key non-findings of the Mueller Report are known, the first thing we are hearing is that Mueller found no conspiracy with Russia. Unless the House committees turn up something that Mueller didn’t, there won’t be any legal consequences for Trump, his spawn, or what remains of his inner circle.

The Attorney General’s conclusions are that the Mueller report says Trump neither colluded with Russia, nor obstructed justice. This will help Trump and the GOP, who are already crowing, “EXONERATION!”

Like many others, Wrongo is disappointed that Muller didn’t give us a quick, clean end to the horror of this administration. This disappointment marks the third time in the past 20 years that Wrongo has felt the country was wobbling on its axis because of the GOP.

The first time was in 2000 when the Supreme Court gave the presidency to Bush II. That was a terrible outcome for our democratic process, one that led to a gigantic strategic error, as Bush 43 took us into war in the Middle East.

The second was Trump winning the presidency in 2016. Everything that has happened since that November night was predictable, and again, we are a weaker, and a more divided country as a result.

Now, the Mueller report represents the third time that America has been divided by our anachronistic system. Now, we’ve had three occasions where we trusted that our system would make crucial decisions that had enormous impact on our democratic system, and in each case, our trust was misplaced.

Today’s news was the worst case scenario. While Wrongo has never believed that Russian election interference changed the outcome of the 2016 election, he thinks there was a quid pro quo with the Russians regarding a possible Moscow Trump Tower in 2016.

We all hoped AG Barr might rise to the occasion. Instead, Barr (and not Mueller) made the call on obstruction. Instead, Barr (not Mueller) cast the lack of proof on collusion by narrowing it to solely collusion with “the Russian government.” Apparently, the Trump Tower quid pro quo wasn’t on the table.

That said, we have to hope that all of this may turn out for the best.

Barr’s letter may not be the final aria sung by the metabolically challenged diva. She may return to the stage in due time. The Mueller/Barr punt says this is now Congress’s job to sort out.

Wake up America! Now we must acknowledge that we’re in a war to reclaim our system of government. To win the fight requires America to take control of the Congress and the White House away from the GOP in 2020.

And it can’t be by razor-thin margins, or there’s a decent chance the Democrats will be outplayed again.

This is a necessary battle. If it isn’t won, our country will continue to spiral out of control. It isn’t just about getting Trump out of office through the democratic process. This is a fight to reaffirm who we are as a country.

This is a battle we have to fight.

Let’s go.

Saturday Soother – March 23, 2019

The Daily Escape:

Milford Sound, New Zealand – photo via The Travel Guys

You know leadership when you see it. In the US, we are chronically short of inspiring leaders. But there is a great model of leadership on view in New Zealand, their Prime Minister Jacinda Ardern. Now 38, she was the world’s youngest female head of government, when she took office at age 37.

We’ve seen her response to the Mosque killings. In lieu of texting thoughts and prayers, she donned a black head scarf and led a group of politicians to visit victims’ families. She went to a high school that had lost two students in the attack, and told the children they need to fight prejudice:

“Let New Zealand be a place where there is no tolerance for racism….That’s something we can all do.”

She announced a ban on military-style assault rifles and ammunition on Thursday. She has hammered social media companies for allowing and amplifying extremism. Ardern has called capitalism a “blatant failure” due to the extent of homelessness in New Zealand.

She has spent her political capital to unite her country, not to divide it.

None of those things could have been accomplished by Trump. And none will ever be accomplished by him. He’s too politically and ideologically conflicted to give a full-throated denouncement of extremism from the right.

He doesn’t have the empathy to sit with relatives of the dead and comfort them. He’s not capable of leading us through a teachable moment. He can’t move our government to action, except to pass unnecessary tax cuts and hire right-wing Supreme Court Justices. He can’t be a role model for any positive behaviors, and is a terrible communicator to the general public.

So, look clearly at America’s politicians, and find someone who has the ability to lead like Ms. Ardern. Wrongo doubts that you will find many. Ms. Ardern is a politician not a saint, but her actions prove that politicians exist who can be effective thought and cultural leaders.

Remember that she’s just 38 years old!

Does this imply we shouldn’t be thinking that America necessarily needs an older politician driving the bus of state?

By the time you’re reading this, you’ll already know that the Mueller Report has been submitted to the Attorney General. Where we go from here depends to a great extent on the leadership of the Attorney General, the House and Senate, and the president.

Sadly, there’s no Jacinda Ardern in sight.

Time to unplug and get as soothed as we can under the current circumstances. Start by brewing up some Eaagads Estate Kenyan small batch coffee ($19/12oz.) from Austin Texas’s Greater Goods Coffee. The roaster says it pairs well with blackberry scones and citrus fruit.

Now, get to your favorite chair, put on your headphones and listen to Roxane Elfasci play “Clair de Lune” by Claude Debussy, on guitar. This 2016 live performance was in Paris. “Clair de Lune” is the third movement of “Suite Bergamasque” by Claude Debussy, from a poem by Paul Verlaine. It was written for piano, and here it is arranged for guitar by James Edwards. This is a wonderful performance of a well-known piece which is incredibly difficult to play on solo guitar:

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

Biden?

The Daily Escape:

Azulik Hotel, Tulum Mexico, – 2019 photo by Phoebe Montague

A long-time friend of Wrongo and Ms. Right who is also a reader of the Wrongologist, emailed that a friend who is a well-placed Democrat in DC, said the Party plans to push Joe Biden for a single four-year term “to bring us together in healing”. He would also appoint a younger VP who would appeal to Millennials.

After a little digging, it seems that may be the plan. CNN reports that Biden is considering:

“The early selection of a running mate, which one aide said would help keep the focus of the primary fight on the ultimate goal of unseating Trump.”

If Biden would commit to one term, selecting his VP candidate early would lay hands on that person as the presumptive Democratic nominee in 2024. It sounds like a really bad idea, one that also would preclude Biden’s selecting one of the existing candidates for the 2020 nomination.

This strategy would have precluded Biden getting the VP nomination in 2008. Obama couldn’t have picked Biden early, because Biden was also running for president. And even once Biden dropped out, he wasn’t prepared to immediately back Obama over Hillary Clinton for the nomination.

Biden has tons of history for his primary opponents and the Republicans to pick through. Ryan Cooper, writing in The Week, said:

“Joe Biden is about to ruin his reputation….The most immediate problem for Biden personally is that he has #MeToo written all over him…..there are already vast compilations of footage of him being far too handsy with women in public settings.”

Who’s Electable?

The Daily Escape:

Valley of Fire State Park, Nevada – 2019 photo by trolleg

Ultimately, that question will be about Donald Trump vs. whichever Democrat is chosen as the Party’s nominee in 2020. Today, it’s a way to try to make a cut from among the 15+ Democrats that have announced their intention to seek that 2020 nomination.

Wrongo talked last week about the landscape of the 2019 primaries, saying:

“The internet is full of comments about which of the 14 are most worthy, and plenty of hot takes on who can’t win vs. Trump.”

We know that in past presidential elections, a few candidates always emerge early as having the ability to “excite the voters”. The press starts to say that “this one might have a chance”. It works out sometimes, as it did for Bill Clinton vs. Paul Tsongas and Jerry Brown, or Barack Obama vs. Hillary Clinton. Both Clinton and Obama had charisma, which their opponents lacked. What hasn’t worked so well is being a policy wonk or having a bulletproof resume. Every candidate has a resume, a story to tell about themselves, but some try to parlay long careers in politics to the winner’s circle.

Think about Nixon and his resume squeaking past Hubert Humphrey, also with a long resume in politics. GHW Bush took his long resume to the White House for one term. The idea is that you can’t ask voters to look ahead while looking backwards at the same time. For Baby Boomer politicians, there are things in the rear-view that aren’t pretty, or even relevant today.

This is Joe Biden’s problem: When you’re challenging the status quo, ahead is the only winning direction. For another Boomer, Elizabeth Warren, her political resume is short, so less baggage in the 2020 primaries, and more new ideas.

It isn’t totally clear how the electability equation works. The media’s biases have a lot to do with deciding who gets the early buzz. It should be pretty simple to sort them into electable/not-electable categories, but think about Obama in January 2008: (emphasis by Wrongo)

“Senator Barack Obama’s victory in Iowa has improved his standing within the party on a critical measure: his electability. The percentage of Democrats who say he would be the strongest candidate against the Republicans has more than doubled in a month, to 35% from 14% in December.”

So today, we have no idea who is electable, and probably won’t know until after Super Tuesday (March 3rd), when 54% of Democratic primary votes will have been cast.

And does anyone have a reliable metric for “electability”? We can’t really say that John Kerry was un-electable. Hillary was chosen FOR her (supposed) electability, as opposed to the (supposedly) “un-electable” Bernie Sanders.

The GOP have usually played the most electable hand. That gave them Bob Dole, George Bush 43, John McCain and Mitt Romney as candidates. Only one winner among them.

Ultimately, are we capable of analyzing “electability”? We want it to be useful and true, but is it? The media and the pundits think that moderate political views make a candidate electable, but it’s really more like charisma and authenticity.

At this point Wrongo wants to give a brief plug to Pete Buttigieg. He’s met the Democratic National Committee’s threshold of 65,000 individual donors, which means he’ll be included in the Democratic primary debates. He’s 37 and gay. He’s a Harvard and Oxford grad who served in Afghanistan and speaks Arabic. All of that probably signals to Establishment Democrats that he’s un-electable.

Wrongo thinks he has charisma and authenticity, along with very rare smarts. Here’s a quote from a Buttigieg profile in the New Yorker:

“If you thought in terms of the effects of public policy on millennials, he said, you began to see generational imbalances everywhere. The victims of school shootings suffered because of the gun liberties given to older Americans. Cutting taxes for the richest Americans meant that young people, inevitably, would have to pay the bill. Climate policy, he said, was the deepest example of the imbalance…”

Buttigieg may be strong in the Mid-West, and may be able to bring out non-voters. Non-voters were the biggest cohort in 2016. Many don’t vote because they don’t believe any of the candidates will make things any better. America needs a candidate that is committed to meeting increasingly desperate needs. Maybe Buttigieg would bring non-voters to the polls.

And haven’t Baby Boomers done enough to screw up both America and the planet?

Maybe we should give a Millennial a shot. At least for Vice-President.

Monday Wake Up Call – March 18, 2019

The Daily Escape:

View from Angel’s Landing, Zion NP – 2019 photo by ducc517

Sen. Elizabeth Warren (D-MA) says that she favors “capitalism with serious rules.” David Leonhardt wrote in Sunday’s NYT:

Her platform aims to reform American capitalism so that it once again works well for most American families. The recent tradition in Democratic politics has been different. It has been largely to accept that big companies are going to get bigger and do everything they can to hold down workers’ pay. The government will then try to improve things through income taxes and benefit programs.

Warren is trying to treat not just the symptoms of inequality, but the underlying disease. Warren also called for an annual wealth tax, for people with assets greater than $50 million. She has proposed a universal child-care and pre-K program. She favors tougher guidelines on future mergers, and also a breakup of the giant tech companies (Google, Facebook) that resemble monopolies.

Of the current crop of Democrats, she’s the reform capitalism candidate. But one idea that Warren hasn’t espoused is the Financial Transactions Tax, (FTT). Wrongo first wrote about a FTT in March 2013.

Sen. Brian Schatz, (D-HI) and Rep. Peter DeFazio (D-OR) introduced a tax of one-tenth-of-one-percent, or 10 basis points (100 basis points equals 1 percentage point), on securities trades, including stocks, bonds, and derivatives. The CBO estimates that the FTT would raise $777 billion over 10 years. Sens. Chris Van Hollen (D-MD), Jeff Merkley (D-OR), and Kirsten Gillibrand (D-NY) are co-sponsors of the bill.

For the math-challenged, 10 basis points on a $1,000 trade equals one dollar. Jared Bernstein says:

FTTs exist in various countries, including the UK and France, with Germany considering the tax (also, Brazil, India, South Korea, and Argentina). The UK is a particularly germane example, where an FTT has long co-existed with London’s vibrant, global financial market.

More from Bernstein: (brackets by Wrongo)

Because the value of the stock holdings is highly skewed toward the wealthy, the FTT is highly progressive: The TPC [Tax Policy Center] estimates that 40% of the cost of the tax falls on the top 1% (which makes sense as they hold about 40% of the value of the stock market and 40% of national wealth).

Vox also reports that an FTT would mostly affect wealthy Americans, because an estimated 84% of the value of stocks is owned by the wealthiest 10% of households. Schatz isn’t the first Democrat to suggest an FTT, Bernie Sanders ran on a similar idea in the 2016 Democratic primary. He pitched it as a way to pay for free college.

Globally, there is plenty of experience with FTTs. In the UK, a 0.5% “stamp tax” is charged when someone buys shares on the stock market, and the UK market is fine. France in 2012 introduced a tax on financial transactions, and a study from the European Commission found that trading volumes declined slightly, but share prices and volatility weren’t meaningfully changed. France and Germany have pushed for a European Union-wide FTT.

Opponents include the high-frequency traders, who note that even a small FTT could upend their extremely low margin business model. Although a dollar on a $1,000 trade doesn’t sound like much, if the industry is making 4 billion trades a day, it can add up.

Time to wake up and support an FTT, America. Sens Warren and Sanders support this idea, and you should too. Those who think that the government should use the tax code to ensure that everyone has an equal opportunity to get ahead, and that we should do more to ensure the well-being of our citizens aren’t socialists.

If that makes us socialists, then Eisenhower, who presided over a 90% top tax bracket, was also a socialist.

To help you wake up, here’s Steely Dan with “Any World That I’m Welcome To” from their 1975 album “Kay Lied”. This tune gives you the benefit of hearing the late, great, Hal Blaine on drums. Blaine may have been the most recorded drummer in pop music history. From the late 50s through the mid-70s, Blaine did sessions with Sam Cooke, Ray Charles, The Righteous Brothers, Henry Mancini, Ike & Tina Turner, The Monkees, Nancy Sinatra, The Fifth Dimension, The Byrds, Sonny & Cher, Mamas and the Papas, and The Grass Roots.

The famously picky Steely Dan only used Blaine for this one tune:

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

Saturday Soother – March 16, 2019

The Daily Escape:

More California poppies – March, 2019 photo by West Coast Aerial Photography

The horror in New Zealand, Manafort’s sentencing, and both Houses of Congress voting to end Trump’s emergency declaration. The vote tally was 59-41, not enough to override a veto. Moments after Thursday’s vote, the president tweeted a single word: “VETO!”, and has now he’s done just that.

We head into the weekend with 13 Democrats declared as running for the Party’s nomination. Another, Joe Biden, may announce this weekend. The internet is full of comments about which of the 14 are most worthy, and plenty of hot takes on who can’t win vs. Trump.

Wrongo’s hot take is that the 2020 presidential election will be determined by a handful of states. Michigan, Ohio, Pennsylvania and Florida were all lost last time around. Any Democratic candidate can win the same states as Hillary won last time. We need to be asking ourselves is: “Who has the best chance to win in those four states?”

Your choice may be different from Wrongo’s, but this must be a prime consideration. We all know that the presidential election isn’t about who wins the most votes. It’s about who accumulates the necessary number of electoral votes, and that path leads through the four states above.

So the challenge for the Democratic Party nominee is: How are you going to convince people in the above states to vote for you?

In the meantime, pundits are talking about a brokered convention. They’re assuming that no single candidate will garner a majority of votes through the primary process. The Democratic National Committee (DNC) has set the system up so it’s difficult to win an outright majority if there is a large field of candidates, since there are no winner-take-all contests.

Instead, the delegates are awarded proportionately by congressional district and statewide vote. That means in a large field, the first place winner is unlikely to get close to 60% of a state’s delegates. To get any delegates at all, a candidate must receive at least 15% of a state’s votes.

It’s too complicated to go deeply into this, but there are lots of votes up for grabs in the early primaries. Brookings has this:

“Fifty-four percent of all pledged delegates will be chosen in the first five weeks of the primary season, mostly from four states — California, Texas, Ohio, and Michigan. An additional 10 percent of pledged delegates will be chosen one week later — nearly all from Florida and Illinois. One candidate with a big lead in name recognition or with a small band of intense supporters could wrap up the Democratic nomination based on the votes of a tiny share of voters and do so before primary voters have had much time to get acquainted with the candidates.”

This means that, assuming Kamala Harris will win California, and Beto O’Rourke will win Texas, catching them could be difficult. And if no one else breaks the 15% barrier in either state, it could be a pitched battle between just them all the way to the convention on July 13-16 2020 in Milwaukee.

Wrongo thinks Bernie will break 15% in a few states, and possibly be the spoiler for these two new faces of the Party.

Some think that if no one gets a majority before Milwaukee, that favors Biden, who will most likely, hold the majority of the DNC’s Super delegates, who can vote after the first ballot. OTOH, Biden has to prove he has the ability to get more than 15% in several states to merit their votes on the second ballot of the convention.

These primary contests used to reduce the field quickly, since it was very difficult to raise money from the big donors if you lost Iowa and New Hampshire. But, money is easier to raise via social media than it used to be. And social media can keep a candidate in the news even without huge TV expenditures.

There are now 485 days left until the Democrat’s convention, and a lot will happen between now and then. Buckle up!

Time for your Saturday Soother. In honor of St. Patrick’s Day tomorrow, we break from our usual format of coffee and classical music. Let’s start by getting into a comfy chair, and listen to the Hooligans (the Irish Hooligans, not the Bruno Mars band) perform the Bluegrass classic, “Whiskey for Breakfast”:

As we all know, breakfast is the most important drink of the day. Now pour a nice snifter of Irish whiskey. Wrongo has 8 different Irish whiskeys in the pantry, and recommends Bushmills 21 Single Malt (~$230/750 ml). Enjoy its notes of toffee, honey, spiced fruit and dark mocha.

Sample Lyric:

Lord preserve us and protect us,
We’ve been drinking whiskey ‘fore breakfast

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

The Long Battle to Reform Capitalism

The Daily Escape:

Poppies in bloom, Southern California – March 2019 photo by Leslie Simis. This annual explosion of color is enhanced this year by extraordinary rainfall

You can call the period in US history from FDR to Nixon “America’s social democratic era”. A collection of politicians had hammered out the policies and regulations that became FDR’s New Deal in America. It became a period of post-war prosperity during which inequality narrowed, economic growth boomed, and optimism reigned.

The characteristics these policies shared were reciprocity and generosity. For the citizen, there was some form of social support that grew from Social Security in 1935 through the 1960’s with Medicare and Medicaid. In 1970, Nixon implemented the Environmental Protection Agency. There was also a willingness to care for the disadvantaged. Our Marshall Plan and our commitment to foreign aid are both great examples. The success of social democracy in the postwar era weakened the market’s power to act independently within our society.

But then things changed. Our government’s role became a helpmate for corporations, financial institutions, and their lobbyists. The result has been growing inequality between suppliers of capital and the suppliers of labor, even of highly educated labor, like teachers and professors. Economic growth slowed, and we have developed a permanent underclass that seems impervious to repair.

Yesterday, we talked about Economic Dignity, and how focusing on it might help solve inequality. Today’s market economics is partly based on the ideas of Jeremy Bentham and John Stuart Mill, economists who viewed human beings as supreme over the state. As individuals who would make rational decisions to maximize utility. It turned out to be incomplete, since it left out key dimensions of human psychology, like the individual’s need for social esteem or respect. In other words, they ignored economic dignity.

Couple that with Milton Friedman’s idea, that the mission of the firm is to solely maximize profits, that any responsibilities to its employees, consumers, or society should be ignored. Profit maximization at all costs has done great damage to American society. And conservatives and free marketers have married the ideas of these three economists, making the removal of government from markets their primary mission.

But what they call “the market” is really a bundle of regulatory (and non-regulatory) rules by which market activities operate. The mix of free and regulated market activities can be changed, even though capitalists say we shouldn’t change the rules, because it adds uncertainty to markets.

Just because in baseball, three strikes and the batter is out, or with four balls, there is a free pass to first base, doesn’t mean it has to be that way. It could be five strikes and you’re out, or three balls is a walk.

As an example, we tend to fight unemployment with “trickle-down” solutions. That means we bribe the rich and corporations to hire more. But, the bribe is always bigger than the payrolls that are generated.

We could fight unemployment with fiscal policy, such as infrastructure spending by the government. It would employ many, possibly hundreds of thousands, and there would be no need to pay any entity more than was warranted by the tasks at hand.

America needs a return to what economist Paul Collier calls the “cornerstones of belonging”— family, workplace, and nation, all of which are threatened by today’s market driven capitalism. That means capitalism has to return to the ethics of the New Deal. Joseph Stiglitz, Nobel laureate in economics, says: (parenthesis and emphasis by Wrongo)

Over the past half-century, Chicago School economists, (including Milton Friedman) acting on the assumption that markets are generally competitive, narrowed the focus of competition policy solely to economic efficiency, rather than broader concerns about power and inequality. The irony is that this assumption became dominant in policymaking circles just when economists were beginning to reveal its flaws.

Stiglitz says we need the same resolve fighting for an increase in corporate competition that the corporations have demonstrated in their fight against it. We’ll need new policies to manage capitalism.

It means higher taxes on profits.

It means paying workers more.

It means rebuilding public assets like roads.

It means teaching students to be both technically capable, and grounded in their values.

Speaking of needing to teach our students, if you think we’re not in a rigged game, think about one “USC student” who is part of the admissions fraud scandal, Olivia Jade Giannulli. She was on the yacht of the Chairman of USC’s Board of Trustees when she heard about it.

The Wrongologist

Geopolitics, Power and Political Economy

Category: Daily Escape

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