Divided Government – Page 12

Focus on the Doughnut

(There will be limited blogging until 7/26, as Wrongo and Ms. Right spend an extended weekend in Philadelphia)

The first night of the Republican National Convention ended dominated by one bizarre question: Was Melania Trump’s convention speech plagiarized from a Michelle Obama convention speech from 2008?

OK, she probably would have gotten an “A” from Trump University, but pulleez, people! This isn’t a big deal.

Melania Trump is not a major figure in the GOP, and plagiarism of parts of a speech doesn’t have the same connotation in political speeches that it does in academia. So she stole a few lines from a Michelle Obama speech. So what? She isn’t running for anything, and the statements were largely clichés. If you are hoping to show the incompetence and dishonesty of the Trump campaign, there are bigger more important examples.

Why should anyone care about this? If Melania Trump has one interview with the press, and says she liked the ideas in Michelle Obama’s speech, this is over. Why is the media so focused on this? Why are they not focusing on the things of substance that were said in Cleveland yesterday, things that are legitimately terrifying because they could actually become policy?

They could have focused on Rep. Steve King (R-IA) going full white supremacist.

Or, Rudy Giuliani going off about the imminent (?) terrorist threat facing America, saying:

You know who you are, and we are coming to get you.

Or, the extended poutrage about “The Battle of Benghazi”.

Or, convention speaker actor Antonio Sabato Jr. who questioned Obama’s religion, saying the president is “absolutely” a Muslim.

Or, if they were truly interested, they could analyze the GOP 2016 Platform, its most socially conservative platform ever.

But our media wants to keep it simple: Everything else spoken from the stage last night requires explaining something complex, like matters of policy. That’s hard work for the reporters, and maybe for the people to understand. But when a candidate for first lady steals parts of the opposing party’s speech, that’s easy to report and to understand.

It appears that the media is incapable of making the sort of deep, factual critique of policy that we need from them. Wrongo can be annoyed about it, but that’s how it is.

The press should focus on the doughnut, and not the hole, particularly when the hole isn’t a policy speech.

OTOH, when a goofy low-stakes gaffe like this one gets the media saying negative things about Trump, we’ll just have to go with it.

Make America Safe?

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

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

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

FireShot Screen Capture #104 - Trump

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

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

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

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

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

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

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

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

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

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

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

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

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

How Not to Cut the Deficit

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

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

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

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

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

Steven Rattner in the NYT:

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

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

Here are some examples:

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

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

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

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

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

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

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

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

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

Welcome to the Republican paradise.

July 4, 2016

Independence Day 2016. And 240 years later, where are we?

COW Our Sad Fourth

Our founders were willing to die for an idea. They wanted home rule, not a local dictatorship run by a representative of an English King. There were spirited debates around the ideas that founded our Republic, and there were those who worked hard to keep the rule of the King in place.

So are the contentious debates of today just more of the same? Here is a small taste of Sebastian Junger’s new book, “Tribe”: (pg. 124)

Today’s veterans often come home to find that, although they’re willing to die for their country, they’re not sure how to live in it.

He goes on:

It’s hard to know how to live for a country that regularly tears itself apart along every possible ethnic and demographic boundary.

On the front lines, GI’s know their buddies are different in all sorts of ways, but they set aside their differences and form units that transcend differences, often heroically. Yet, in 2016 America, on a different set of front lines, our politicians amplify differences, going so far as to regularly accuse rivals of deliberately trying to harm their country.

Our society is at war with itself. Depending on their ideology, people speak with complete contempt about the rich, the poor, the educated, or the foreign-born. They express the same contempt for the president, and again, depending on their ideology, the entire US government.

That’s a level of contempt we have usually reserved for enemies in a time of war. But now, we apply it to our fellow citizens. Contempt is particularly toxic because it implies that the attacker has a position of moral superiority, and through that, has the agency to attack another.

So, on our most patriotic day, put down that hot dog, and ask the question: How do we unify a secure, wealthy country that is now playing a zero-sum political game?

Time to wake up, America! And to help with that, let’s dance around the room with a little rockabilly by Elvis Presley. Elvis was treated with contempt by some in the 1950s, but it was mostly silent, and by the Silent Generation, who thought they were protecting their kids from rock & roll.

Take a listen to “Good Rockin Tonight”, and remember Scotty Moore, the original guitarist for Elvis, who died last Tuesday. He was not just our last living link to the King (assuming the King is really dead), he was the force behind Elvis’s early singles. Scotty is in the Rock & Roll Hall of Fame.

His reverb-drenched rockabilly guitar was the driver in the originally drummer-less trio of Elvis, Scotty and bassist Bill Black:

COW Elvis and Scotty

Rolling Stone ranks Scotty Moore No. 29 on its list of the 100 greatest guitarists of all time, saying “The playing was so forceful that it’s easy to forget there was no drummer.”

Keith Richards has said:

Everyone else wanted to be Elvis. I wanted to be Scotty.

Here are Elvis, Scotty and Bill on “Good Rockin Tonight”:

Sunday Cartoon Blogging – July 3, 2016

The presidential choices for 2016 are Clinton or Trump. You could write-in Bernie, or Jill Stein, or one of the fringe candidates, but not all write-in votes are counted for Electoral College purposes. 43 states, representing 494 electoral votes, count write-in votes, although the candidate has to have registered electors in some of those states to be counted. So you could be throwing your vote away by writing in someone.

And this year, we can’t afford any wasted votes. If you doubt that, check out this rockin ‘n rollin’ week.

SCOTUS redefined “Undue Burden” for Texas:

COW Undue Burden

Scalia opined from beyond the grave:

COW Scalia in Hell.gif

The GOP Benghazi strategy focused on the wrong fire:

COW Benghazi Fire

The non-event called the Benghazi Congressional Report was issued:

COW Benghazi Mud

Why can’t the GOP move on from Benghazi? Please don’t say it’s because 4 people died. Think about how many have died from shootings in America since Benghazi, without any GOP interest in holding hearings on Gunz. We deserve better from these birds we elect.

Loretta Lynch knew better than to meet with the Big Dog:

Schmooze 2

Loretta Lynch used to be a prosecutor. She knows better than to speak with the spouse of someone under an active investigation. As an officer of the court, she should have told Bill that talking together was improper, and had someone else on her staff speak with him. She has tarnished the credibility of the investigation and should resign. OTOH, Mr. Bill drop kicked his wife’s good news on the Benghazi investigation to the curb, making her the story again. And he is (was) a lawyer, and ought to know the protocol as well as Lynch.

Of course, Bill denied it:

COW Bills Denial

More Political Lessons From Brexit

There is a neoliberal aspect to Brexit that has many Brits in the 1% quietly (and tentatively) quite happy. Fraser Nelson, editor of the Spectator and a columnist for the Daily Telegraph, writing in the WSJ, said the Brexiteers:

…think the vote for Brexit was about liberty and free trade, and about trying to manage globalization better than the EU has been doing from Brussels.

Neoliberalism at its finest. You could substitute “No Obama” for “Brexit”, and “Washington” for “Brussels”, and think it was the GOP talking.

Mr. Nelson says that a major problem was that the EU’s centralized, command-type structure makes local issues difficult to manage. He says that regulations issued at the European level, rules promulgated by officials whose names Brits didn’t know, people they never elected and cannot remove from office, became law in the UK. More from Mr. Fraser: (emphasis and brackets by the Wrongologist)

Mr. Cameron has been trying to explain this to Angela Merkel…He once regaled the German chancellor with a pre-dinner PowerPoint presentation to explain his whole referendum idea. Public support for keeping Britain within the EU was collapsing, he warned, but a renegotiation of its terms would save Britain’s membership…Mr. Cameron was sent away with a renegotiation barely worthy of the name. It was a fatal mistake [by the EU] not nearly enough to help Mr. Cameron shift the terms of a debate he was already losing.

The EU took a gamble: That the Brits would not vote to leave. A better deal—perhaps aimed at allowing the UK more control over immigration, a top public concern in Britain—might have stopped Brexit. But the absence of a deal sent a clear message: The EU isn’t interested in reform.

The EU apparently needs fixing, but it won’t be the UK who does it. Cameron tried in a lukewarm way to fix Europe a little around the edges, and failed. A final point from Mr. Fraser:

The question is not whether to work with Europe but how to work with Europe. Alliances work best when they are coalitions of the willing. The EU has become a coalition of the unwilling, the place where the finest multilateral ambitions go to die.

Perhaps. It IS clear that not all regulations are created equal, some are inefficient, and some are just stupid. But, a business environment with fewer government regulations is the wet dream of most business owners, while it often harms consumers. It is also true that the Brexit supporters were able to conflate in the minds of voters all the discontent with UK austerity, benefit cuts, poor quality job creation and wage stagnation along with the EU’s hegemony, into a big ball of emotion.

And it worked.

The inside-the-bubble UK neoliberal view is that the EU was the problem, and the British voters solved that. America doesn’t have an analogue. We could leave NAFTA, but that has none of the earth-shaking possibilities. We could fail to pass the TPP. That would be a yuuge anti-neoliberal event.

There is an economic malaise in blue collar UK. Once an industrial powerhouse, it has become service driven, with finance and lawyering representing a significant portion of its economy. Sounds just like America in 2016.

Let’s link all of this up with our domestic political economy:

Income inequality has grown in the US since at least the 1980s.
Real median income is the same as in 1996.
Our Labor Participation Rate (the share of American civilians over the age of 16 who are working or looking for a job) is about where it was in the 1970s.
Despite a rosy headline unemployment rate of 4.7% (which counts only people without work seeking full-time employment), the U-6 rate (includes discouraged workers and all marginally attached workers, plus those workers who are part-time purely for economic reasons) is much higher at 9.7%. In human terms, that is 15.3 million souls who need a job.

Donald Trump and Hillary Clinton both see these things. The candidate who convinces voters that s/he will really address them will win.

Trump is correct when he says if there are millions out of work, how can we permit immigration? He wrongly focuses on Mexicans, but he’s right: We need fewer people pursuing the fewer jobs we will have until at least until 2025, when finally, all the Baby Boomers retire.

America is in a class war, but it’s the working class versus the middle class rather than workers versus billionaires, as Bernie talks about. Joe Six-pack doesn’t hate the billionaire class. Therefore, Trump is acceptable.

The Pandering Pant Load sees this, and has moved to exploit their anger.

How Brexit Informs The Pant Suit’s Strategy

We are told that the Pant Suit is the candidate of the status quo, while the Pant Load is a wild card who will bring about change, possibly change that causes immediate remorse if he is elected. That’s just what the UK is experiencing. After a weekend facing the realities of Brexit, 3.5 million Brits have signed a petition for a do-over vote on “Remain vs. Leave”.

The pundits say Clinton can’t be the candidate of change because she supports President Obama, and the common view is that her first term would be Obama’s third term. But, if Brexit has relevance for the American election, she must avoid appearing to be the candidate of the status quo.

If the Pant Load can make the election about any kind of change vs. more of the same, Clinton will be vulnerable.

She should run against Trump’s fitness to govern, and the fitness of the Republicans in Congress to govern as well. After all, Republican Congressional leaders decided not to govern in January 2009, and so far, they have not paid a political price for their obstructionism. Of course, Mr. Obama tried to run against the do-nothing Congress in 2014, and the result was that the GOP took control of both houses.

Maybe it would be different this time for the Pant Suit. As Steve Waldman said about this strategy at the WaMo:

But if it could ever work, it’s now. The most recent Economist/YouGov poll reported a 9% approval for Congress among registered voters. It is literally the most unpopular Congress in the history of polling. Clinton can make the attack more effectively than Obama, because it won’t sound as much like blame-shifting.

And she could make running against Congress sound like change. She needs to shift some of her focus away from declaring the Pant Load unfit for office. That is, unless he keeps making more mistakes like his inexplicable PR disaster in Scotland. If he does that, her speeches will write themselves, and he will keep sliding in the polls.

She should run to enact specific things that Congress has blocked – infrastructure spending, ending tax breaks for corporate off-shoring, and universal background checks for gun ownership. But she needs to distance herself from more from Obama on global trade deals. Consider this from the Detroit Free Press:

CNN’s exit poll, which surveyed 1,601 Michigan Democratic voters as they left their precincts Tuesday, showed that 58% of them believed trade with other countries costs jobs, compared to 30% who believe they create them. And among those who believe trade costs jobs, Sanders won by a large margin, 58%-41%.

Michigan is a key state for Clinton, and she needs to build a firewall in a few other states that Obama won in 2012, but where she now has some trouble, if the June 21 Quinnipiac polls for Florida, Ohio, and Pennsylvania are correct. The polls show Clinton with a clear lead in Florida (47%-39%), but locked in ties in Ohio (40%-40%) and Pennsylvania (42%-41%).

She has to keep the Pant Load from winning both Ohio and Pennsylvania, which right now, look to be toss-ups, meaning Trump could win both. Pennsylvania also has a number of swing House districts and an important Senate race, so Clinton must work hard there, even if it were completely in the bag for her. OTOH, PA elected a Democratic governor in the 2014 Republican landslide, and hasn’t gone red in a presidential election since 1988. This, from Booman:

For starters, Obama won in 2012 with 332 Electoral College votes to Mitt Romney’s 206. If we keep everything the same and award Ohio and Pennsylvania to Trump, the result is 294-244.

So, winning Ohio and Pennsylvania would be a start for the Pant Load, but without Florida, it’s hard to get from 244 to the 270 votes needed to win. In fact, without Florida, Trump would have to win Ohio, Pennsylvania, Virginia, New Hampshire and Michigan, while losing Iowa in order to garner a 277-261 victory.

It’s a long way to November, and who knows who will win? It’s difficult to believe it will be close, but we lived through two Nixon wins, so electing someone you dislike and distrust is nothing new for America.

Brexit: Better for the Pant Load or for the Pant Suit?

Around here, Monday means a wake-up tune. We should have Brexit breakup music, but instead of song, we need to watch this video by Mark Blythe, a Scottish political scientist, and a professor of international political economy at Brown University, about the logic behind voting for Brexit:

Blythe makes more sense in 5 minutes about the EU, why Brexit happened, and some implications for the US, than the entire journalistic class has said using millions of words over the past few days. At 4:01, he says, “As I like to say to my hedge fund friends, the Hamptons is not a defensible [military] position.”

Let’s take a quick look at a few conclusions of the Brexit vote:

Rust cities and towns largely voted to Leave
Wealthy cities favored Remain
Rural areas that have not seen much immigration had seen a lot of austerity
Older voters wanted to return to the prosperous 1970s-1980s, regardless of whether that is realistic

Demographically, the most striking difference in voting was between young people and older people. A YouGov poll showed:

18-24: 75% voted for Remain
25-49: 56% voted for Remain
50-64: 44% voted for Remain
65+: 39% voted for Remain

So younger voters wanted to keep the option to be citizens of a larger economic unit, where they might find more and better job opportunity, while older voters wanted out of the EU for a variety of fact-based and fear-based reasons. On either side of the Atlantic, it’s a mistake to think that people know all the facts before they decide. From Seth Godin:

There are two common causes of uninformed dissent…The second (quite common in a political situation), is the tribal imperative that people like us do things like this. No need to do the science, or understand the consequences or ask hard questions. Instead, focus on the emotional/cultural elements and think about the facts later.

Our first Brexit lesson is that America has a huge base that is angry, scared, and possibly, more than willing to jump into the abyss. Sober analysts warned Britons that pulling out of the EU would be an economic and security debacle. But, as Matthew d’Ancona of The Guardian observed:

They heard the warnings, listened to experts of every kind tell them that Brexit meant disaster, watched the prime minister as he urged them not to take a terrible risk…And their answer was: Get stuffed.

Our second Brexit lesson is that nativism, anti-immigration fervor, and elite-bashing are potent tools.

There was a definite scent of “Make Britain Great Again” running through the Leave campaign. The Leavers urged Britain to “take control” of its borders. While we point at Mexico, they pointed at Turkey, which they said would flood the UK with immigrants, even though Turkey may never be a member of the EU.

You can call it racism, you can blame it on the “market” or, you can blame it on the economic circumstances created by the political elites steering the ship.

This resonates in the US because foreigners are a source of marginal cheap labor that corporations use to bludgeon our working class. That anger is partly justified. However, it is misdirected, because people only believe what they want to believe, and because it’s easier for working people to blame foreigners than to blame themselves for repeatedly electing an economic elite that just keeps playing them over and over.

Brexit is an important wake-up for the US presidential election. Britain’s uprising against the European Union is the sort of populist victory over establishment politics that could easily happen here. As the NYT said on Sunday:

Mrs. Clinton shares more with the defeated “Remain” campaign than a similar slogan — her “Stronger Together” echoing its [Remain’s] “Stronger In.” Her fundamental argument, much akin to Prime Minister David Cameron’s against British withdrawal from the European Union, is that Americans should value stability and incremental change over the risks entailed in radical change and the possibility of chaos if Donald J. Trump wins the presidency.

Hillary urges potential voters to see the big picture, while promising to manage economic and immigration upheaval, just as Mr. Cameron did. She is also a pragmatist battling against nationalist anger, cautioning that the turmoil after the Brexit vote underscored a need for “calm, steady, experienced leadership in the White House.”

But we are not the UK, and today, the ABC/WaPo poll has Hillary is up by 12 points, although we still have miles to go before 2016’s election night.

We will have future columns covering our neo-liberal policies, their impact on the American people, and their implications for 2016, over the coming days and weeks.

Sunday Cartoon Blogging – June 26, 2016

Sunday cartoons return! Sorry for the hiatus, but it was unavoidable.

Quite the week. Did the sky just fall on the UK? We will have more over the next few days. There is still left-over emotion about Orlando. We had a sit-in by Dems, or as one wag said, it was the first time in years that Democrats stayed up past 10:00pm. But, did it achieve much? And of course, there is the 2016 presidential campaign.

Europe and the UK worked for nearly 70 years to put the EU together, and it is undone in an evening:

COW Brexit 2

The conventional economists’ view of what Brexit means:

COW Brexit 3

UK Prime Minister David Cameron misreads the people, pays the price:

COW Brexit 4

Orlando led to sit-ins, political and otherwise:

COW Sit In

Loyalty oaths were on display after Orlando:

COW Loyalty

Trump has less campaign dough than expected, but there was a benefit:

COW Bigger Hands

Republicans vs. Yellen

Federal Reserve Chairwoman Janet Yellen appeared before Congress on Wednesday for her semi-annual testimony. This, from the NYT:

Ms. Yellen’s final appearance before the presidential election in November was a master class in how many members of Congress have allowed real debate about the country’s economic challenges to be subsumed in the broader political din.

The way the kabuki play works, the Fed Chair starts with prepared remarks that all committee members already have in their hands. On Wednesday, she flagged long-run headwinds to economic growth, and said considerable uncertainties remain for the economic outlook, including risks from China and the so-called Brexit vote in the European Union. Still, she offered a dose of optimism, noting a considerable step-up in second-quarter growth and strong consumer spending in recent months.

Then the Kabuki play moved to questions by Congresspersons. More from the NYT:

It probably tells you everything that you need to know about the current state of the Federal Reserve and monetary policy that in the first ten minutes of Yellen’s Q&A, much of the questioning revolved around issues such as bank regulation/capital requirements and the diversity hiring policies of the Federal Reserve System.

It seems that Congresspersons can’t be bothered drilling down about what the Fed is really thinking about the economy. Based on yesterday’s evidence, they cannot even be bothered learning what Fed policy actually is!

House Financial Services Committee Chairman Jeb Hensarling, (R-TX), said in his opening statement that the Fed is “complicit” in the failure of the Obama administration’s economic policies and the inability of the economy to grow above a 3% annual rate. (FYI, we have hit 3% or more just nine times in the past 16 years)

It got worse:

Bill Huizenga, (R-CA), said he’s worried the Fed has itself become a too-big-to-fail financial institution. Remember folks, the Fed can issue all the money it might require, so it is difficult to come up with a scenario where the Fed fails.
Representative Scott Garrett, (R-NJ), accused Ms. Yellen of unfairly aiding Wall Street and worsening income inequality. From the NYT:

“Why do you see a need to benefit Goldman Sachs?” he asked.

“I’m sorry, we are not trying to benefit the rich,” Ms. Yellen responded, before trying to interject that more than 14 million jobs had been created since the recession ended in 2009.

“Excuse me, I have the floor,” said Mr. Garrett,

Huizenga, (R-MI), said the Fed should also have to undergo a “stress test” like a big bank because of its $4.5 trillion balance sheet. Huizenga said he is worried the Fed is insolvent.

Yellen said the Fed has already undertaken this sort of exercise. Our balance sheet is very different…The Fed is very different from a commercial bank.

Then came the “excess regulations are holding the economy back” questions from Republicans:

Randy Neugebauer, (R-TX), says there has been a “buffet” of new rules put on banks with little thought of the overall impact. Yellen replies that the Fed is trying to “reduce the odds” that banks get in trouble, and that most banks are profitable.
Blaine Luetkemeyer, (R-MO), asks why no new banks are being chartered, again stressing burdensome regulation. Yellen says the challenging economic environment, not regulation, is the likely culprit.
Steve Stivers, (R-OH) says that Fed regulations have held down private investment.

Yellen says Fed regulations are not out of line with international standards and the safety and soundness of the banking sector has improved.

Sean Duffy, (R-WI) asked if government regulation was a headwind to growth, saying that businesses cite regulation as a headwind. Yellen replies: “Are you referring to our regulations?” (emphasis and brackets by the Wrongologist)

I’m talking about government regulations…Why don’t you cite it as a headwind?

It’s very hard to quantify the extent to which regulations… [are] headwind[s], she said.

After a fruitless attempt to get Ms. Yellen to call health insurance costs for Wisconsin manufacturers a headwind, Mr. Duffy gave up in a fit of pique.

I’ll accept that as a non-answer, he said.

This hearing is an object lesson in why average people hate Congress. Committee members had a chance to drill down on the country’s economic challenges, but see only another talking points opportunity.

Imagine what similarly ill-informed Congress critters might ask witnesses in front of a different committee, say, at the Judiciary Committee:

Is it really appropriate to hold confirmation hearings when your term ends in four years? Do we really want to saddle America with a Supreme Court justice nominated by a potential lame duck president?

The Wrongologist

Geopolitics, Power and Political Economy

Category: Divided Government