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The Wrongologist

Geopolitics, Power and Political Economy

Saturday Soother – March 18, 2017

The Daily Escape:

(Ancient Pagoda in Myanmar – photo by Steve McCurry. McCurry is best known for his iconic 1984 National Geographic magazine photograph “Afghan Girl”.)

This isn’t the millennium we thought we’d have. The 21st century was supposed to be a time of enhanced social justice, and a push toward further global integration. We thought that the arc of history bent unmistakably toward a bright Information Age.

Instead, where are we? Lurching forward towards the second decade of the century with the reins of government in the hands of an ultra-nationalist, someone who wouldn’t shake hands with Angela Merkel, the Chancellor of Germany at the close of their meeting. We also learned more about the tin ear that Republicans have when it comes to enacting a health insurance program. Here is the topper: In a conversation with the National Review’s Rich Lowry, Speaker of the House Paul Ryan (R-WI) bragged about how conservatives now have a once-in-a-generation opportunity to take health coverage away from the most vulnerable Americans:

So Medicaid…sending it back to the states, capping its growth rate. We’ve been dreaming of this since I’ve been around — since you and I were drinking at a kegger…I’ve been thinking about this stuff for a long time. We’re on the cusp of doing something we’ve long believed in.

Not the college experience that most of us had, but for Ryan, it was a time to dream about how, someday, he would take health care away from millions of poor people. The media thinks that this guy is the best and brightest that the Republicans have, and cover him like a serious, sober policy wonk focused on reducing deficits and poverty in market-oriented ways. They refuse to believe that a major elected official would devote his life to the Randian belief that the poor deserve what’s coming to them because they lack the brilliance of a John Galt. It’s one thing to have these thoughts at 20, and an entirely different thing to still have them at 47 years old.

To reiterate what we talked about earlier this week, Speaker Ryan’s health bill, if enacted, would lead to 24 million fewer people having health insurance by 2026, according to the Congressional Budget Office. Of those 24 million, 14 million would lose health coverage because of the changes Ryan wants to make to the Medicaid program.

No wonder Charlie Pierce calls Ryan the “zombie-eyed granny starver”. Many Americans voted for this. Perhaps they now understand buyer’s remorse.

Time to get soothed, if it is possible this week. Grab a cup of Hula Daddy Kona Coffee (just $100/Lb. via the web), sit in the sun room with Wrongo, and watch the 20” of snow melt on the fields of Wrong.

We’ll listen to Dvořák’s “Romance for Violin and Orchestra” performed by Tanja Sonc with the Slovenian Philharmonic, conducted by Keri-Lynn Wilson. Dvořák originally composed this in September and October 1873 as the slow movement of a string quartet in F minor. He re-scored it for violin and orchestra sometime before December 1877. Here is Romance of Violin and Orchestra, Opus 11:

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

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Trump’s Defense Budget

(The Wrongologist is heading to Florida today. The next column will be Sunday’s Cartoons)

The Daily Escape:

(Water Buffalo at night – Zimanga Private Game Reserve, South Africa)

Wrongo did not watch Donald Trump’s latest reality show. Many are giving him some credit, saying that “it’s the most presidential he’s ever been”. What a low bar.

We should ignore the tone, and focus on the content. Today let’s discuss Trump’s aspirations regarding defense spending, cuts in non-defense discretionary spending and Trump’s tax reduction plans. In his speech, Trump repeated his commitment to increasing defense spending by $54 billion.

The Budget Control Act caps military spending at $549 billion for 2018. Trump’s proposed increase would bring military spending to $603 billion. He indicated that would mean getting rid of the Sequester spending cap agreement. But, he didn’t address how the spending caps would be overturned (it requires 60 Senate votes). And there was also nothing said about the rest of the budget, including the subject of what programs will be cut to fund the defense increase.

The problem is math. Trump’s plans require solving simultaneous equations: It may be impossible to cut discretionary spending by enough to fund the defense increase. It will be difficult to give a big personal and corporate tax cut while spending $1 Trillion on infrastructure. As Bryce Covert at Bloomberg said:

To increase defense spending, cut taxes, spend money on infrastructure and the border, protect entitlements, and balance the budget, almost everything else must go.

Neither Trump nor Congressional Republicans had a better idea about how to accomplish that after the speech than they had before it.

Trump in particular, has no idea. In a Fox interview on Tuesday, Trump argued that his increase in defense spending could be covered not by severe spending cuts elsewhere, but by an increase in economic growth. He said:

I think the money is going to come from a revved up economy…

He promised on TV to grow GDP by 3% or more each year, not something that is all that easy to do. The economic concept behind his thinking is the Laffer curve, which says that an optimal level of taxation will assure high economic growth. It’s a discredited theory.

If Trump and Congress can’t get Sequestration eliminated and they still want to spend the $54 billion, non-defense spending would be 25% below what it used to be, bringing spending on these programs to the lowest level ever recorded. The historical low point of Discretionary non-defense spending was 3.09% of GDP in 1962; Trump’s proposal could bring it below 3%.

Military spending increases are never justified to Americans by what the money will be used for. Instead, we hear vague arguments about how we need to be “stronger”, or laundry lists of the various kinds of new hardware we need to buy, without any focus on the strategic rationale for the new hardware. For example, how do new aircraft carriers help defeat ISIS?

More military spending has an opportunity cost: If we spend on defense, that’s money we can’t spend on education, healthcare, or rudimentary things, like the State Department.

It can’t be enough to say that larger numbers will make us safer.

We need a geopolitical rationale for why additional defense spending is necessary. Trump hasn’t offered that argument. He and the GOP say that President Obama “neglected” the military, but in truth, Obama left our military stronger than it was under Reagan: If we look at total military spending by China, Russia and the US in 2015, the US accounted for 68% of that total, while Russia accounted for 8% and China for 24%

Under Reagan the totals were: US, 62%, Russia, 36% and China 2%. So we are up from 62% to 68% under the Kenyan Muslim.

We should be thinking about cutting defense spending, not increasing it.

Take a break and listen to guitar hero Joe Bonamassa playing “Further on Up the Road” live in 2009 at Royal Albert Hall with his hero, Eric Clapton:

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

 

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January 20, 2017 – Trump Inaugural Edition

Today is the Trump Inaugural. So many preparations, and so much detail for the transition team to worry about. From the no stone left unturned department, comes this from the WSJ:

 Workers preparing for the Trump Inaugural have taped over the name of the company — “Don’s Johns” — that has long supplied portable restrooms for major outdoor events in the nation’s capital…Virginia-based Don’s Johns calls itself the Washington area’s top provider of portable toilet rentals. But the name apparently strikes too close to home for inaugural organizers.

Too close to Donald John for Donald John Trump? Of course. Somebody placed blue tape over the company name on dozens of portable restrooms installed near the Capitol for the inauguration. The company says they didn’t do it. But, the company’s name is clearly blocked from the TV cameras:

Once Donald J. Trump becomes the 45th president of the US, he will certainly push the agenda that got him elected. We all will need a way to sort the signal from the noise that we will hear from both his partisans and his opposition (which includes the Wrongologist). When you hear people raising reasoned questions and objections to Trump’s proposed policies, odds are that you’re listening to the kind of dissent that’s essential to our democracy, and you ought to take it seriously. For the kinds of arm-waving, emotional, knee-jerk support (or criticism) that you will hear every day, feel free to ignore that. You will know the knee-jerk stuff, since it will be sung in harmony by all the other partisans. And the media will repeat it often for your consideration.

Wrongo has serious problems with Trump, but is hopeful that his administration will:

  • Live up to his populist domestic promises, and
  • Simplify our country’s confusing foreign policy

If he normalizes relations with Russia, extracts us from the messes in Iraq and Syria and if he encourages domestic jobs growth, Wrongo will likely sign up for all of that. If he pushes through a big infrastructure bill that isn’t a wealth transfer to corporations, Wrongo will probably go along with that as well.

Wrongo does not trust Trump or the GOP on health care insurance. He worries that Republicans will throw a number of Americans under the bus, causing a great deal of unnecessary pain.

You can be sure that Trump is going to try to do some terrible things over the next four years, such as appointing ideologues to the Supreme Court. But, Congressional Republicans will clearly attempt far worse things than will The Overlord.

So the terrible fact is, we have to count on Trump to rein in the worst of the GOP’s ideas and instincts.

Needing to trust Donald Trump is enough to frighten anyone.

Trump tweets continually to rally his supporters while simultaneously manipulating the media. It’s unnerving. Saying that Trump is terrifying, while correct, is useless. The most obsessive of his opponents focus on worst-case scenarios that are designed to rally (and raise money from) the anti-Trump troops among us. Sadly, that strategy largely guarantees that the opposition will look disorganized and fragile. It also causes the American center-left to be fragmented issue by issue, and therefore, unable to broadly challenge the GOP, at least in the short run.

The Dems need to coalesce around only the potentially win-able issues. Otherwise, they should “just say no” to any Trump legislation intended to weaken or break our social contract. Sen. Schumer is correct when he says that the GOP needs to own 100% of the pain they cause the average person, whenever they break the contract. Any Democrat that breaks ranks to support issues like cuts to Medicare or privatization of Social Security must be challenged from the left in the next primary.

Democrats did not believe they would be in this political mess. They are trying to find their footing, but establishment Democrats want to simply tweak the message, and stay the course.

However, the battle against Trump and the GOP majority must move from “Republican Lite” to a fight to put social justice and progressivism back on the table as viable options for all Americans.

Otherwise, it will be a precipitous fall from political relevancy for Democrats.

Establishment Democrats who profit from the status quo, have no incentive to come up with an agenda that appeals to people who are suffering because of that status quo. The great weakness of Hillary Clinton’s campaign was that she aimed her appeals at the minority of voters who would benefit from the established neoliberal order, while largely ignoring those who suffered under it.

That decision could cost the Dems for a generation.

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Make Social Security Great Again

A senior House Republican is circulating a proposal that would make major cuts and changes to the Social Security system.

Insiders think this is a move to contravene President-elect Trump’s vow to leave the retirement program for 61 million retirees and their families untouched.

The proposal was drafted by Rep. Sam Johnson (R-TX), chair of the subcommittee on Social Security of the House Ways and Means Committee. It was formally introduced as a bill last Thursday. It includes two measures that might attract some interest from Democrats. One would increase retirement benefits for lower-income workers, and another would increase the minimum benefit for low-income earners who worked full careers.

OTOH, other provisions put in place a series of highly controversial measures long debated by both parties. Those measures include:

  • Gradually raising the retirement age for receiving full benefits from 67 to 69.
  • Adopting a less generous cost of living index than the current one.
  • Inaugurating means testing by changing the benefits formula to reduce payments to wealthier retirees.
  • Eliminating the annual COLA adjustments for wealthier individuals and their families.

Democrats think that Johnson’s plan, if adopted, would cut current benefits. From Nancy Pelosi:

Slashing Social Security and ending Medicare are absolutely not what the American people voted for in November…Democrats will not stand by while Republicans dismantle the promise of a healthy and dignified retirement for working people in America.

Rep. Johnson is 86 and has both a military pension and a congressional pension, so Social Security is far less important to him than it is to you.

For Republicans, Johnson’s bill is the opening salvo in a much larger conversation about Medicare and Medicaid in the coming year. Speaker Paul Ryan (R-WI) and House Budget Committee Chair Tom Price (R-GA), who will be the next secretary of health and human services, are both on record as wanting major changes to Medicare and Medicaid.

Democrats see the 2017 GOP plans as a frontal assault on the nation’s social safety net.

The argument has been that the Social Security trust fund will run out of money, but it is not in imminent danger. The Trustees Report in March warned that the fund will begin running out of money in 2034 when beneficiaries will have to face a 21% benefit cut.

Last week, Rep. Tom Cole of Oklahoma, a House Republican, and Rep. John Delaney of Maryland, a Democrat, renewed their support for a plan to create a bipartisan, 13-member panel to recommend to Congress ways to prevent the massive trust fund from running out of money while extending its solvency for another 75 years.

They envision that the new commission would operate along the lines of one created 35 years ago, in the Reagan administration. That commission helped pave the way for legislation that extended the life of Social Security by 50 years. Some possible proposals, such as raising the retirement age, increasing federal payroll tax revenues or altering the cost of living adjustments to save money will trigger strong opposition from the AARP, progressive activists and Democrats.

It’s long been a GOP theme that since Social Security needs a fix by 2033, we need to cut benefits now. Never mind that a minor upward adjustment to the income limit for the Social Security tax would resolve the problem with no cuts to benefits.

We’ll see if President Donald J. Trump supports this bill, after saying very loudly during the campaign that he was against touching Social Security.

Maybe the J stands for “just kidding.”

Since we’re on the verge of becoming “great” again, or, at the very least, having the trains run on time, maybe El Jefe can get the GOP to leave Social Security alone?

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