The Wrongologist

Geopolitics, Power and Political Economy

Saturday Soother – February 10, 2018

The Daily Escape:

Lighting the Olympic torch – photo by Chang W. Lee

Did anybody see the bus that ran over Wrongo’s 401k?? It was a tough week on the retirement savings front for anyone who uses the capital markets to bolster their net worth. Retail investors are trapped – they can’t sell their holdings quickly, and there doesn’t seem to be a safe haven for their cash if they manage to get out of the markets only slightly bruised. Fear seems to be guiding Mr. Market.

Also, Washington finally passed a bi-partisan budget deal, but only after a brief shutdown. Sadly, it adds more than $1 Trillion to the national debt. It’s hard to square the Republicans’ deficit hawk ideology with their sudden willingness to spend whatever it takes to give the military whatever it wants.

During the recession, (Obamatime) the Republicans argued that responsible people tighten their belts when times are bad, just like people do with their household expenses. Now, we really shouldn’t use that argument for governments who can create their own currency. Despite that, if you really think the government should be run like a household, wouldn’t a responsible family increase their savings and pay down their debts when times are good? That would give them a “rainy day” fund that they could dip into when times were bad. Or, they could then go back into debt to get through the rough patch.

But today’s Republicans are saying: “Times are great! Let’s max out the credit card”. This will soon be followed by: “Oh shit, now I have to starve the kid so I can make the payments on my student loans”.

They won’t even follow their own dumb rules.

That was the week that was. A stomach-churning, no sleeping, hot steaming pile of anxiety. You need a real break.

To help you forget about your financial losses and your government’s foolishness, settle into a comfortable chair with a Vente cup of Volcanica Coffee’s Blue Mountain Peaberry coffee from the Clydesdale estate in Jamaica (only $89.88/lb.). You can’t afford it after what happened on Wall Street, but like Congress, you have a credit card. So go for it!

The Clydesdale coffee region is near the center of Jamaica’s Blue Mountain coffee area. The Clydesdale Estate was founded in the 1700’s.

Now, listen to a throwback to the 2012 Olympics in London. Here is the London Symphony Orchestra conducted by Sir Simon Rattle with a performance of “Chariots of Fire”. The performance includes physical comedy by Mr. Bean (the British comedian Rowan Atkinson):

This isn’t high art, but it is fun, and tangentially relevant to the Olympics.

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


Monday Wake Up Call – January 22, 2018

The Daily Escape:

Atrium of Zeitz MOCAA, Cape Town South Africa – 2017 photo by Ian Baan. A grain silo is reborn as South Africa’s answer to London’s Tate Modern

Why are we trying to maintain the illusion that our political system functions? The press would have us believe that the shutdown is simply the result of one unfortunate Senate vote. From the BBC:

This is the first time a government shutdown has happened while one party, the Republicans, controls both Congress and the White House. The vote on Friday was 50-49, falling far short of the 60 needed to advance the bill. With a 51-seat majority in the Senate, the Republicans do not have enough votes to pass the bill without some support from the Democrats. They want funding for border security – including the border wall – and immigration reforms, as well as increased military spending. The Democrats have demanded protection from deportation of more than 700,000 undocumented immigrants who entered the US as children.

But, the NYT reports:

In fact, it was Mr. Trump who opted not to pursue a potential deal that he and Senator Chuck Schumer of New York, the top Senate Democrat, had hashed out over lunch at the White House on Friday. The proposal would have kept the government open, funded a border wall and extended legal status to undocumented immigrants brought to the US as children, while including disaster aid funds and money for a federal children’s health insurance program. Mr. Kelly later called Mr. Schumer to say the agreement lacked sufficient immigration restrictions.

What a wonderful way for Trump to start his second year in office. He and his staff have proven that they are absolutely terrible at presidential leadership. It’s not just that they have no desire to govern, it’s that Trump and his cabinet think all that matters is making his Republican base happy.

There have been possible bipartisan deals in the run-up to shutdown that would have passed the Senate and House with both Republicans and Democrats voting for them. But clearly, Trump’s and the GOP’s strategy is to force the Dems to eat a shit sandwich, and when they refuse, to blame them for the shutdown.

That’s not how the “both sides ballet” is supposed to work: The plotline is that the Republicans go crazy, take a few hostages, and the Democrats (the adults in the room), negotiate the release of some of the hostages in exchange for the Republicans getting to shoot a few, and also getting a fully-fueled getaway plane, and a sackful of tax cut money.

Schumer held up his end of the bargain; he offered Trump a deal that was friendly to his racist agenda in exchange for the Republicans keeping the lights on for a few weeks.

No dice from the Orange genius.

It’s interesting how the 60-vote requirement in the Senate in order to end a filibuster, and bring a floor vote, became normalized. When McConnell started filibustering damn near everything Obama wanted, the media accepted it uncritically as part of the political process. It was clear that once the Democrats were in the minority, the filibuster would suddenly become an extreme act once again, and the Dems would be excoriated for using McConnell’s normal legislative tool.

And that’s exactly what’s happening. The Republicans “need” Democratic votes in the Senate to get past a filibuster. And now, we are seeing Trump and Fox News, along with plenty of Republicans talking about how the filibuster has to die.

It isn’t clear who the current impasse will help or hurt in November. But America needs to wake up to the fact that our politics no longer work. Fewer Right Wing ideologues in the House and Senate is the only thing that will turn the ship around.

America has to wake up, and vote them out in November.

To help America wake up, let’s listen to Texas singer-songwriter James McMurtry’s December 2017 song “State of the Union”, in which he takes aim at fascism and racism. The song is a satire. It doesn’t just point fingers as much as it outlines our contentious politics:

Sample Lyrics:

My brother’s a fascist, lives in Palacios,
Fishes the pier every night
He holsters his Glock in a double retention.
He smokes while he waits for a bite.
He don’t like the Muslims. He don’t like the Jews.
He don’t like the Blacks and he don’t trust the news.
He hates the Hispanics and alternate views.
He’ll tell you it’s tough to be white.

It’s the state of the union I guess

It’s always been iffy at best

We’ll do all we’re able

With what we got left

It’s the state of the union I guess

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


Tillerson: We’re Staying In Syria

The Daily Escape:

Coquina Rock outcropping, early morning, Flager Beach FL – 2017 photo by sir_oki

(By the time you read this, you may know if the US Congress has willfully kicked another own goal by allowing another government shutdown. If it has happened, it will be because Republicans couldn’t keep their factions in line in the House, and that the Democrats wouldn’t help the GOP in the Senate. As Wrongo writes this, there’s no sign that either are in place, but Wrongo thinks they will avert a shutdown.)

Secretary of State Tillerson visited Stanford University, and spoke about our threadbare geopolitical strategy. From the Guardian:

The US intends to maintain an open-ended military presence in Syria, not only to fight Isis and AL-Qaeda but also to provide a bulwark against Iranian influence, ensure the departure of the Assad regime and create conditions for the return of refugees…

This is laughable. Think about the results to date on our Syrian strategy: US-backed jihadis along with the Assad regime have wrecked Syria, and changed the politics in Europe because of massive refugee migration. And the politics on the ground in Syria are unchanged.

Tillerson’s speech was more of the same old, same old about challenges and threats, some of which are unrelated to a grand strategy of US in the Middle East. But the most basic question, why the US remains in Syria, (and in the Middle East in general), were not addressed, much less answered.

It doesn’t take a 6’3” 239-pound geopolitical genius to figure out that the Trump administration’s prime ME directive is the containment and roll back of Iran’s influence in the region. But our partners are unreliable, and in some cases, disagree with this strategy. Wishful thinking is a bad basis for strategy, it is really a recipe for yet another ME disaster.

The hidden hands enabling America’s obsession with Iran, a country that presents zero military threat to us, are Israel and Saudi Arabia. Israel wants Iran-friendly Hezbollah neutralized in Syria and Lebanon, and is willing to fight to the last American in pursuit of that objective. The Saudis are fighting Iran for dominance in the region.

By carving out territory in Syria, we are creating a fundamentally weak situation, both militarily and politically. Over the next few months, Assad will prevail, and that will be the end of the Syrian civil war. Then, something entirely new will emerge. The Northeast of Syria, the Kurdish-controlled areas where we are placing our 2,000 ground troops, will become a main focus for Syria, Turkey and Syria’s allies, Russia and Iran.

And here, we enter uncharted political territory. We have no legal right to occupy a portion of Syria, and we must expect that at some point, Syria and Russia will call us on that. What will be our response? Is Trump willing to head-to-head with them, and possibly see US troops killed? For what?

Tactically, we have aligned with the Syrian Kurds to try and check a regional grouping who will surround our position. Worse, our policy is opposed by our ally, Turkey, who wants us to stop helping (and arming) the Kurds.

We are engaging in more superficial thinking about the ME, once again attempting to reshape the region. And to help us, we are counting on a rapprochement between Saudi-Arabia and Israel. It also requires them to commit military support to American efforts to block the combined interests of Russia, Iran, Iraq, Syria and Turkey.

When you listen to Tillerson, you would think that the US had defeated ISIS, and our troops are there for the mop-up, that the Syrians, Russians and Iranians were hardly involved. Little of that is true.

Tillerson’s Syrian manifesto requires that Assad step down, now by losing an election, because evicting him by force proved impossible. Yet, it seems probable that Assad would win a fair election.

Isn’t Tillerson’s plan just more neo-con regime change? Think about Iraq. The US wanted Saddam out, and thus handed the country to Iran. In Syria, the goal was to oust Assad. Now, Assad is staying, and Russia has an unprecedented footprint in the region.

Under Trump, we have no end-game in Syria, or in Afghanistan. We choose to sit in the middle of a divided region: Arab vs. Persian, Kurds vs. Turks, Sunni vs. Shia, Saudi Arabia vs. Iran, Israel vs. Palestine, and remnants of ISIS vs. everyone else.

It is a powder keg waiting to go off.

Has Tillerson come up with a sound strategy? Definitely not.


Sunday Cartoon Blogging – Christmas Eve 2017

(The Wrongologist is taking a brief holiday break. Blogging will resume on Wednesday, 12/27. In the meantime, Merry Christmas!)

The Daily Escape:

Jingle Bell Jog – Ft. Lauderdale FL, 2017. Better for ya than SantaCon.

A final Christmas Eve word about the unwanted gifts the Trump tax cut is foisting on us. In the short term, it will stimulate consumer demand. The economy may “grow”, but our tax receipts cannot.

Soon, these tax cuts will place our government on a fiscally precarious footing. Expect the credit rating agencies (Moody’s, Standard & Poors) to start wagging their tongues, warning of their concerns about the country’s overall debt levels. It is possible that the repatriation of some of the massive off-shore profits that American firms have hoarded may come home. To the extent that they return, and some taxes are paid on them, this (one time) tax receipt will likely make the 2018 and 2019 annual budget deficits somewhat smaller than the colossal ones to follow.

After that, the government’s income will fall, and we will hear bi-partisan calls for deficit reduction, and lower spending targets will be the norm. The effects of tax legislation can take a long time to shake out, and there often are unintended effects.

But make no mistake, the GOP will start talking about the Coming Debt Apocalypse next month.

On to a few cartoons. Here is the difference between the parties:


Trump’s year in review:

War is the answer to any question:

Trump’s touting of something terrific slides downhill:

Congress flies home for Christmas:

Congress gives empty present to our kids:


Saturday Soother – August 26, 2017

The Daily Escape:

Depression Bread Line by George Segal, 1999, at the NJ Grounds for Sculpture – 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 it’s the third item on the GOP’s 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 it’s unclear how they’ll use them.

Republicans and Wall Street used to have concerns about the consequences for America if we didn’t 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 Trump’s plan to cut taxes for corporations and high earners, saying it is the way to fuel economic growth. That, despite estimates that Trump’s 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 he’d be for higher taxes if they helped mend the fiscal gap. After the 2016 election, Blankfein told colleagues…that Trump’s proposals, including tax reform, ‘will be good for growth and, therefore, will be good for our clients and for our firm.’

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, we’ll 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)

It’s 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.

It’s 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 “reconciliation directives” 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.

We’ll know very soon if Dems are willing to get on board with Paul Ryan and Mitch McConnell on any of this.

It’s 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 America’s psyche).

We are now in desperate need of something soothing to kick off next week’s war for truth. So grab a couple of Trader Joe’s 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 “Homecoming” live in 1995. Let’s hope it’s not the best few minutes of your week:

Pay attention to Abercrombie’s remarkable and airy technique.


IMF Reports US Standard of Living is Falling

The Daily Escape:

Haleakala Crater, Maui

Is it the best of times or the worst of times? This is no longer a partisan discussion. We have an economy in the midst of a long expansion, the third longest since 1850. The statistics say we are close to full employment. But, our mortality rate is moving in the wrong direction, and we have an opioid epidemic that is serious enough to cause jobs to go unfilled. The NYT reports that in Youngstown Ohio, middle class factory jobs go begging:

It’s not that local workers lack the skills for these positions, many of which do not even require a high school diploma but pay $15 to $25 an hour and offer full benefits. Rather, the problem is that too many applicants — nearly half, in some cases — fail a drug test.

The Fed’s regular Beige Book surveys of economic activity across the country in April, May and July all noted the inability of employers to find workers able to pass drug screenings.

So the best of times? Probably not. Bloomberg reports that the International Monetary Fund (IMF) looked at the US economy. This is what they see:

For some time now there has been a general sense that household incomes are stagnating for a large share of the population, job opportunities are deteriorating, prospects for upward mobility are waning, and economic gains are increasingly accruing to those that are already wealthy. This sense is generally borne out by economic data and when comparing the US with other advanced economies.

The IMF then goes on to compare the US with 23 other advanced economies in the Organization for Economic Cooperation and Development (OECD) in this chart:

The chart is a bit of an eye test unless it’s viewed on a big monitor, but its overall point is that the US has been losing ground relative to its past OECD reports by several measures of living standards. 35 countries make up the OECD. The members include all of Western Europe, Russia, Japan, Australia, and several developing nations like Korea and Panama.

This from Bloomberg:

And in the areas where the US hasn’t lost ground (poverty rates, high school graduation rates), it was at or near the bottom of the heap to begin with. The clear message is that the US — the richest nation on Earth, as is frequently proclaimed, although it’s actually not the richest per capita — is increasingly becoming the developed world’s poor relation as far as the actual living standards of most of its population go.

This analysis is contained in the staff report of the IMF’s annual “consultation” with the U.S., which was published last week. The IMF economists haven’t turned up anything shocking or new, it’s just that as outsiders, they have a different perspective than what we hear from our politicians and economists.

For example:

Income polarization is suppressing consumption…weighing on labor supply and reducing the ability of households to adapt to shocks. High levels of poverty are creating disparities in the education system, hampering human capital formation and eating into future productivity.

What is to be done? Well, the IMF report concludes:

Reforms should include building a more efficient tax system; establishing a more effective regulatory system; raising infrastructure spending; improving education and developing skills; strengthening healthcare coverage while containing costs; offering family-friendly benefits; maintaining a free, fair, and mutually beneficial trade and investment regime; and reforming the immigration and welfare systems.

In other words, they suggest substantial reform. It’s doubtful that America can take care of these things anytime soon.

The subtext to most of their suggestions is that other affluent countries have found ways to improve in these areas, while the US has not. We don’t have to look too far into the past to see when those countries were modeling their economies on ours. But today, on all sorts of issues, like taxation, labor markets, health care, and education, the opposite is now true.

One major difference between the US and the rest of the developed world is ideological: Voters and politicians in the US are less willing to raise taxes to finance a better life for our citizens.

Other wealthy countries have figured out how to raise revenue, provide quality education, help the the unemployed, reduce poverty, and keep their citizens healthier than America has.

We must catch up, or admit our time as the world’s indispensable economy is over.

Today’s music (dis)honors the turmoil in the White House. See ‘ya Mooch! Remember that in just six months, Trump has gone through two National Security Advisers, two Chiefs of Staff, two Communications Directors, two Press Secretaries, and two Directors of the FBI.

Here is “Disorder in the House” by the late Warren Zevon and Bruce Springsteen:

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


Monday Wake Up Call – April 24, 2017

The Daily Escape:

Bald Eagle with Great Blue Heron – photo by Bonnie Block

(The Wrongologist site was hit by a Denial of Service attack on Sunday, April 23. If you had difficulty accessing the site, Wrongo apologizes. We are working with the hosting company to sort it out, but the problem may continue until the end of day today.)

Congress returns today. They will try to pass an increase to the Debt Ceiling before the April 28th funding deadline. After that, at least a partial government shut-down looms.

The Republicans are not in agreement about their stance on the extension. The Orange Overlord complicated the negotiations by saying that he wouldn’t sign a Debt Ceiling increase unless it contained funding for the Wall that Mexico was supposed to pay for.

Consider the exchange between Chris Wallace of Fox News Sunday and Trump Budget Director Mick Mulvaney. Mulvaney said that it was the Democrats who are guilty of “stunning” obstructionism because they will not negotiate on a bill to repeal the Affordable Care Act. Wallace noted that President Trump had offered Democrats a deal: If you fund the border wall, payments to Obamacare would not be cut. Wallace:

You are holding hostage health insurance for millions of lower-income Americans.

Mulvaney replied:

Actually, what I would say is they’re holding hostage national security…

Then he brought up obstructionism by Democrats:

The Democrats will oppose everything that this president wants to do, which is stunning to us, especially when we are offering them something they want in return.

Wallace countered:

You’re saying, ‘give us what we want. And if you don’t, we’re going to cut off funding that would provide health insurance for millions of lower income Americans’.

The laugher was that Mulvaney’s logic is that Trump is trying to build a border wall to protect millions of low income Americans who may lose their health care benefits in the trade-off.

So Mexico won’t pay for the wall, and Republicans don’t want to pay for the wall either. They would prefer that Democrats agree to pay for Trump’s wall to give the GOP cover for those Republicans who won’t fund Trump’s ghastly promise of a wall.

On the obstructionist claim, everyone knows that the Republicans made obstructionism an eight-year strategy when Obama was president. Now, Mulvaney’s pearl-clutching about obstructionism can’t possibly sound legitimate to anyone other than people who watch Fox News. We need to remember that it was the Republicans who picked the 100th day of the (now Trump) administration for last year’s Continuing Resolution that funded the government, to expire. The idea was to make Hillary Clinton look bad after she won, and then couldn’t get a Debt Ceiling increase passed without Republican help.

It never occurred to them that if the Republican nominee won, that he wouldn’t be able to get much done without support of Democrats.

So it’s time for Republicans to wake up, and pass a Debt Ceiling increase. After all, they control the House, Senate and White House. It is their job to avoid a government shutdown.

To help them wake up, here is the UK group Stone Foundation, a modern UK soul band with a tune from their new album, “Street Rituals”. The song is “Your Balloon is Rising”, featuring Paul Weller formerly of the punk rock group The Jam, and later, Style Council.

Here is “Your Balloon is Rising”, a blue-eyed soul tune that allows Weller to show all of us that he still has it:

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