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The Wrongologist

Geopolitics, Power and Political Economy

Saturday Soother – May 13, 2017

The Daily Escape:

Bluebells, Brussels Belgium April 2017 photo by Francois Lenoir

In many ways, it is too easy to criticize Donald Trump. While we can have differing opinions on matters of policy, they only account for a few of the issues Wrongo has with Trump. Most are his unfathomable attempts to avoid telling the truth. Consider his interview with The Economist which posted the entire transcript on Thursday. Let’s focus on this excerpt:

The Economist: Another part of your overall plan, the tax reform plan. Is it OK if that tax plan increases the deficit? Ronald Reagan’s tax reform didn’t.
Trump: Well, it actually did. But, but it’s called priming the pump. You know, if you don’t do that, you’re never going to bring your taxes down.

[Snip]

Economist: But beyond that it’s OK if the tax plan increases the deficit?
Trump: It is OK, because it won’t increase it for long. You may have two years where you’ll…you understand the expression “prime the pump”?

Yes.
We have to prime the pump.

It’s very Keynesian.
We’re the highest-taxed nation in the world. Have you heard that expression before, for this particular type of an event?

Priming the pump?
Yeah, have you heard it?

Yes.
Have you heard that expression used before? Because I haven’t heard it. I mean, I just…I came up with it a couple of days ago and I thought it was good. It’s what you have to do.

Ok, so how did the guy from the Economist keep a straight face? The reporter is thinking John Maynard Keynes, the great British Economist, who came up with the idea of “priming the pump” in the 1930’s. By the way, Keynesian pump-priming is temporary government spending to boost temporarily weak demand. It is designed to boost growth, (and jobs) during a downturn, but we can’t assume that it will boost the economy’s growth rate.

Trump’s idea for pump-priming is more tax cuts. He’s following classic trickle-down economics, and claims that his tax cuts will boost investment, productivity growth, and labor supply, and thus raise the long-term growth rate of the economy. In this regard, Trump conflates Keynes, who’s been proven right, with Arthur Laffer, who wasn’t.

But, didn’t Trump graduate from Wharton with a business degree? Nobody gets out of Wharton without knowing that Keynes was the “pump primer”. And his saying that he coined the phrase ‘prime the pump’ a few days ago? Unfortunately, there are only two explanations: first, Trump is 70 years old and his cognitive skills are starting to desert him. Or second, he is a pathological liar.

Wrongo wants to go with #2.

He just wants to sell America something with his name stamped on it. But since America isn’t buying a hotel, he’s trying to sell Trumponomics, Trumpcare, etc. He does not really care about the details, he just wants to pass it, and to claim it is a success. That’s America’s tragedy.

So with Comeygate, Trumpcare and pump-priming, we all need to unplug and try, just try to relax on Saturday. We had a full moon and clear skies over the fields of Wrong on Thursday, so today we listen to “Claire du Lune” by Claude Debussy. It is the third movement of “Suite bergamasque”. Its name comes from Verlaine’s poem Clair de Lune, “moonlight” in French. Here it is played by Dame Moura Lympany, British pianist, who died in 2005:

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

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Buffett: Focus on Lower Health Care Costs, Not Corporate Taxes

The Daily Escape:

Ribbon Chapel, Onomichi Japan – photo by Koji Fujii

Andrew Ross Sorkin wrote about Warren Buffet and the Berkshire Hathaway annual meeting in Omaha. Thousands of people attend these meetings, which are known as “Woodstock for capitalists.” Sorkin reports that Buffet made this comment:

The tax system is not crippling our business around the world.

Sorkin said that Mr. Buffett, was blunt and pointed, implicitly rebuking his fellow chief executives, who have been lobbying the Trump administration and Washington lawmakers to lower corporate taxes. Buffett said that those who have been single-focused on seeking relief from their tax bills would be smart to shift their attention to health care costs, which are growing and swallowing evermore corporate profits. The Kaiser Family Foundation reports that 49% of Americans, about 156 million, are insured by their employer. More from Sorkin:

The need for corporate tax relief has become the lodestar of the corner office, with CEOs rhapsodizing  over President Trump’s plan to try to stimulate growth by cutting tax rates for businesses.

But as Mr. Buffett pointed out, these chief executives are missing the bigger issue: As a percentage of our GDP, the cost of maintaining our American health care system is rising at an alarming rate. And Corporate America pays a big (and growing) chunk of that bill.

Buffett wasn’t talking about the cost of health insurance, which is a fraction of the total cost of health care. He suggests that today’s corporate tax rates are a distraction, not a true impediment to growth:

If you go back to 1960 or thereabouts, corporate taxes were about 4% of GDP…And now, they’re about 2 % of GDP.

While tax rates have fallen as a share of gross domestic product, health care costs ballooned:

About 50 years ago, health care was 5% of GDP, and now it’s about 17%.

Buffett is a smart guy. He raises an argument for focusing on the underlying costs of our health care system, something that goes far beyond the debate around the Affordable Care Act, or what will replace it. Buffett says that our global competitiveness has fallen largely because our businesses were paying far more for health care — a tax by another name — than those in other countries.

As Buffett said: (brackets by the Wrongologist)

When American business talks about [corporate taxes] strangling our competitiveness, or that sort of thing, they’re talking about something that as a percentage of GDP has gone down…While medical costs, which are borne to a great extent by business, have swelled.

Here are the facts:

  • In 1960, corporate taxes in the US were about 4% of GDP. The percentage fell steadily, reaching a bottom in 1983 before rising slightly over the last few decades. Today, it is 1.9%.
  • In the meantime, health care costs as a percent of GDP have skyrocketed. Today our health care costs are 17.1% of GDP, up from 13.1% in 1995.
  • Germany’s cost is 11.3%, up from 9.4% during the same period. Japan’s is 10.2%, up from 6.6%. Britain’s health care costs are 9.1% of GDP, up from 6.7% percent in 1995.

That makes our health care cost disadvantage far greater than our tax differential. It harms American companies in particular, since they bear such a large share of those costs, which firms in our competitor countries do not. US Corporations spend $12,591 on average for coverage of a family of four, up 54% since 2005, according to a study by the Kaiser Family Foundation.

But Congress avoids the issue, and CEOs don’t talk about it. A final quote from Warren:

It’s very tough for political parties to attack it…it’s basically a political subject…

In fact, Buffett’s partner, Charlie Munger, is the rare Republican (Buffett is a Democrat) who has advocated for a single-payer health care system. Under his plan, the US would enact a sort of universal type of coverage for all citizens — perhaps along the lines of the Medicaid system.

Which brings Wrongo to his final point: Medicaid expansion is the one part of Obamacare that can be said unequivocally to work. It’s a single payer program funded by the Federal government. So it’s bitterly ironic that the Republican’s reaction to Obamacare is to assault and roll back an existing Federal program, from LBJ days.

Of course, kicking poor people who benefit from Medicaid will always be popular with Republicans. So, Republicans, by making Medicaid worse, will try to restore their natural order of things.

Lazy, uninformed voters = Lazy, uninformed legislators = Lazy, uninformed policy.

It’s that simple.

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Sunday Cartoon Blogging – April 30, 2017

It only took 100 days for Donald Trump to reduce the office of the presidency to the point of near-zero credibility. Unfortunately, it appears as though his base and Republicans in Congress remain very accepting of him as president. In Twitter speak, #So Sad.

Back to the administration’s one page tax plan: The plan works if we assume 6% annual GDP growth for the full 8 years of a Trump presidency. Since the end of the Great Recession, annual GDP growth has been about 2%. More to the point, we now have a 3.5% (of GDP) budget deficit, and we are at the top of the current business cycle, with a 75% debt-to-GDP ratio.

Republicans used to refer to that as being broke.

Mostly, what has been accomplished in the last 100 days are a blizzard of executive orders and proclamations. We all remember when executive orders like Trump’s were considered tyranny by Fox News. On to cartoons. The GOP walks out on its long-term companion, the deficit hawks:

Trump’s first 100 days did NOT include tons of winning:

The clown show about trickle-down economics continues:

Trump explains his new tax brackets:

Arkansas needs help after botching another execution:

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Trump’s Tax Proposal Silences the GOP’s Deficit Hawks

The Daily Escape:

African Elephants – photo from Nature Photography

African Elephants clearly are not deficit hawks. But, neither are most Republicans in Congress, despite all their complaining about spending that adds to the deficit. Trump’s tax proposal is out. It’s interesting that the administration decided it was a good idea to put a vague blueprint laying out big tax cuts on a single sheet of paper.

It could take some time to process Trump’s “proposal”, but as the NYT says, it will bring a reckoning for Republican deficit hawks:

As President Trump’s top economic advisers faced a barrage of questions on Wednesday about the tax plan they had just unfurled, there was one that they struggled most to answer: how to keep the “massive tax cuts” they proposed from ballooning the federal deficit…Republican budget hawks will need to decide whether they want to stick to the arguments of fiscal responsibility that they used to bludgeon Democrats during the Obama era.

More from the NYT: (emphasis by the Wrongologist)

Mick Mulvaney, director of the Office of Management and Budget, who was a fierce critic of deficits when he was a member of Congress, offered a glimpse of the rationale his former colleagues might embrace. “As a conservative, that bothers me a little bit,” he said Tuesday on CNN of the possibility that Mr. Trump’s tax plan would increase the deficit. “But we also look at deficits through sort of a different lens.”

While we haven’t yet seen definitive estimates of the cost of Trump’s one-pager, it will certainly add to the deficit, and the negative numbers range up to an additional $6 Trillion over the next 10 years.

And when Treasury Secretary Mnuchin says that Trump’s tax plan “will pay for itself,” he isn’t credible. He also told ABC News that he couldn’t guarantee that middle-class families wouldn’t pay more under the proposal:

I can’t make any guarantees until this thing is done and it’s on the president’s desk. But I can tell you, that’s our number one objective in this…

Word salad. Helping the middle class is the furthest thing from their minds. Trump, Mnuchin, Ryan and the rest want to give a targeted stimulus to the rich and corporations.

They disguise tax cuts by calling them “tax reform”. Whatever they call it, they want the biggest tax cut for rich people that they can push through the House and Senate. Calling it “tax reform” is useful because “yuuge tax cuts for the rich” won’t be all that popular politically.

It’s inevitable that “middle class families” will end up paying more. Somebody’s got to pay for that massive military buildup. And the GOP cries of deficit piety are a shell game. Here is Kevin Drum:

When does this nonsense stop? Republicans aren’t deficit hawks. They haven’t been since the Reagan era. Republicans used to be deficit hawks, but the whole point of the Reagan Revolution was that tax cuts were more important than deficits. Their only concern about the deficit these days is as a handy excuse for opposing any increase to social welfare programs.

Trump’s tax plan is the same old Republican orthodoxy that has been around for decades.

Wrongo recommends this article from Fortune Magazine in 1955: “How Top Executives Live”. The GOP constantly says that if the 1% are forced to pay high taxes, they won’t work as hard to innovate and create jobs. This article, from the time when personal tax rates went from 40%-75%, shows they didn’t need low taxes back then to work hard:

The successful American executive, for example, gets up early–about 7:00 A.M.–eats a large breakfast, and rushes to his office by train or auto. It is not unusual for him, after spending from 9:00 A.M. until 6:00 P.M. in his office, to hurry home, eat dinner, and crawl into bed with a briefcase full of homework. He is constantly pressed for time…

Wrongo is cranky about the GOP’s desire to always shift the tax burden downward, and about their success in doing it. What Trump will get passed is another round of debt-financed upper-class tax cuts.

That will suit Trump and Ryan just fine.

Let’s go out with some music that references the life and times of Jonathan Demme, director of “Silence of the Lambs” and “Philadelphia”, who died on Wednesday. Demme also directed the best Rock movie ever made, “Stop Making Sense” featuring the Talking Heads. Here is “Life in Wartime” live, and that’s Parliament – Funkadelic’s Bernie Worrell on keyboards. This isn’t the first time Wrongo has posted this video:

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

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How Trump Exploited NYC’s Financial Crisis

The Daily Escape:

Iceberg floating near Ferryland Newfoundland, April 2017 – photo by Greg Locke

The Intercept has an interview of Kim Phillips-Fein by Naomi Klein about how Donald Trump made his first big deal during the New York City financial crisis of the mid-1970s. Phillips-Fein’s book is “Fear City”, which describes the NYC fiscal crisis of the 1970s that brought it to the verge of bankruptcy. The WSJ reports:

By June 1975, New York faced default on $4.5 billion in outstanding short-term debt owed to a few big banks and to thousands of unidentifiable small investors. Not only did the city have no way to repay $4.5 billion, it could not meet its routine, daily operating expenses, including payroll.

The WSJ says that between 1970 and 1980, more than 823,000 city dwellers left for (literally) greener pastures.

Ultimately the city did not go bankrupt. The banks and the city’s unions were willing to buy enough of the city’s (otherwise unsalable) debt to avoid bankruptcy. Important to the mix was the creation of the Municipal Assistance Corporation (MAC) run by Felix Rohatyn, who became chief negotiator between the city, its labor unions and its creditors. A new type of agency, The New York State Financial Control Board, that controlled the city’s budget, became the model for the type of emergency city managers that we saw last year in Flint and Detroit Michigan.

The NYC financial crisis helped Donald Trump emerge as a New York deal-maker. Trump convinced New York to let him take over the Commodore Hotel, which we now call the Grand Hyatt, just east of Grand Central station. Trump modernized and renovated it, it was his first construction project in Manhattan. Phillips-Fein picks up the story:

…the Commodore Hotel was a previously very fancy hotel from the early 20th century. I think it opens in 1919 at 42nd Street and Lexington Avenue. And it’s owned by the Penn Central Railroad. And the hotel kind of falls into disrepair and near collapse after Penn Central itself goes bankrupt in 1970.

The Commodore had stopped paying city property taxes and was for sale. The city was terrified that if the Commodore Hotel closed, the blight in Times Square would spread east, into the area around Grand Central Terminal. Trump saw an opportunity, while the city government saw a potential disaster. Together they hatched a plan for Trump to purchase the Commodore Hotel: (parenthesis by the Wrongologist)

What he actually wants to do is buy it and sell it to a state agency, the Urban Development Corporation (UDC)…And then the UDC will lease it back to Trump, [who was] working with the Hyatt organization.

The UDC leased it back to Trump and Hyatt. And this arrangement enabled them to pay substantially lower property taxes than usual. Phillips-Fein:

The New York Times reported that as of 2016, this tax arrangement with the Hyatt had cost New York City about $360 million in uncollected taxes in the years since the development.

Naomi Klein:

So I just want to pause there, because what you’re saying is…Trump and the Hyatt put down $9.5 million…They come up with this…sweetheart deal, a tax dodge. And that $9.5 million outlay translates back into roughly $360 million in tax savings…

The Trump/Hyatt tax deal set the stage for a wholesale change in the city. The fear of bankruptcy was central to understanding NYC politics at that moment: They feared an apocalyptic future. That fear created a need for a savior, and it found two in Donald Trump and Felix Rohatyn.

The NYC government decided that working with the business community was the bail-out it needed. It set the stage for the city’s luxury developments, for using different kinds of tax breaks that stimulated the development of properties primarily dedicated to the needs of corporations and the rich. It set the stage for a wholesale change in city politics from New Dealism to Neoliberalism. And it set the stage for Trump’s political career. Phillips-Fein: (brackets by the Wrongologist)

…you can see the straight line, really, from the Commodore to this skating rink [Wollman Rink in Central Park] to the presidential bid…”I’m not a politician. Washington is corrupt. I know how to do this better…”

Fear makes things that should be impossible suddenly feel as though they’re the only answer. Klein concludes by saying we should be very wary of the political exploitation of our fears, of political exploitation of an atmosphere of crisis.

It is clear that Donald Trump’s career and his fortune were really forged by doing just that.

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Thoughts on Tax Day

The Daily Escape:

Tu Lien Bridge (design, to be built) – Hanoi, Vietnam

Today is officially the day our federal income tax returns are due. That’s because April 15 was a Saturday, while Monday is a holiday in Massachusetts. And as the Bay State goes, so goes America when it comes to filing taxes. Wrongo appreciated the extra time.

Americans shouldn’t mind paying their taxes. We live in a great country, and if you want to fly first class, you gotta pay the fare (unless, of course, you’re flying Air Force One).

The process of filing taxes could (and should) be simplified, but reducing taxes would be a mistake. America has deferred spending for social needs and for infrastructure, and not just on the federal level. Wrongo sits on his town’s Roads Committee. If we were to continue to fix our local roads at the same rate going forward as we have for the past few years, it will take us 40 years to fix just the roads that are rated “poor” quality or worse. Still, many in town think we should spend less, so they could be taxed less. As Justice Oliver Wendell Holmes noted in a dissenting opinion in a 1927 Supreme Court case:

Taxes are the price we pay for a civilized society.

Some of us are still learning that.

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Democrats Have Failed

The Daily Escape:

Lavender in Provence – 2017 Photo by Fabio Antenore

This week, Wrongo wrote that 50% of US births are paid for by Medicaid, and how worry about hunger and homelessness has never been higher among Americans. Both of these issues are symptoms of how our economy fails low-income and lower middle class Americans, and neither political party is truly interested in addressing the problems.

Trump won because he led people who used to vote for Democrats to believe that they had nothing to lose if they voted for him. Below-median income voters had long ago lost faith that Democrats, and Hillary in particular, would ever do anything to change their plight.

Trump said he would look out for them. Whether he does or not, remains an open question, but even before Trump, Democrats had already lost a big swath of America. From the American Prospect:

In the race for the White House, the Democratic presidential candidate has won…fewer US counties with average incomes under the national median and with populations that are more than 85% white in every general election since 1996. Concentrated in the Midwest, Appalachia, and the upper Rocky Mountains, there are 660 such counties today. Hillary Clinton won two of them.

Think about that: The Democratic Party’s influence in mostly white, lower-income America has eroded to nearly nothing since Bill Clinton was president. This chart documenting their fall is stunning:

 

 

 

 

 

 

 

 

 

 

 

 

The Parties basically split below-median income counties that were 85% white in 1996. Over a 20-year period, the erosion of the Democrats’ control was steady, and complete. This isn’t just the result of a poor 2016 presidential candidate, it is an indictment of the Democratic Party, its leadership, and its strategy.

The American Prospect article is about Montana’s Democratic Governor, Steve Bullock, who won his state by 4 points while Trump was beating Clinton by 20. Bullock is a rural populist in a party of technocrats. Obama lost Montana by 2 points in 2008. Bill Clinton won Montana in 1992.

But, the electoral failure of Democrats is worse than its showing in these below-median income white counties. The following graphically illustrates the abject failure of Democrats to be competitive in political contests at all levels:

Nothing that Barack Obama did by holding on to the White House for that entire period compensates for these terrible losses.

Democrats remain divided about their Party strategy, many clinging to the thought that if Hillary could have turned about 80k voters in Michigan, Pennsylvania, and Wisconsin, where white working-class people are abundant, she would be president.

But she would not control either legislative branch, and she would have had to propose Supreme Court Justices similar to Neil Gorsuch to get one confirmed by the Senate.

The question is where will the DNC be taking the Party in 2018? In a 2018 mid-term election where the president has a historically poor approval rating with independents and Democrats, like Trump has now, victory is possible.

If Democrats want to win back Congress, and the White House in 2020, they need to field candidates who believe in jobs and economic growth first. The candidates need to be authentic people, who listen more than they talk. And when they do speak, they should use PIE as a metaphor for America’s economy, as in: (H/T Seth Godin)

  • How big is the pie?
  • Is the pie growing?
  • What will my share of the pie be tomorrow?
  • Who allocates the slices of pie? Can they be trusted?

When voters think the economy isn’t growing, things begin to feel zero-sum. People begin to think that they may permanently lose their place in our society.

If the Democrats want to win back Congress, they need to describe concretely what they plan to do when they say they support their working-class constituents, regardless of color.

They need to get to be better than Trump on jobs, economic growth and finding a peace dividend.

All of that, and Medicare for all. In Wrongo’s Thursday column, Gallup found that health care concerns ranked highest across all income cohorts.

Shouldn’t these principles be credible with working-class people—including whites?

A song about pie: Here is D’Angelo with “Devil’s Pie” from 1998. It’s a dystopian vision of capitalism, where everybody’s fighting for more of the tasty, materialistic dish. All is fair in pursuit of a bigger paycheck:

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

Takeaway Lyric:

Fuck the slice we want the pie
Why ask why till we fry
Watch us all stand in line
For a slice of the devil’s pie

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Paul Ryan: You Must Be Free to Get Sick With No Insurance

The Daily Escape:

(Stranded bull shark found after flooding from Cyclone Debbie in Australia – photo from Reuters)

In an interview with “CBS This Morning” House Speaker Paul Ryan says he doesn’t want to negotiate with Democrats on health care. Ryan, speaking to co-host Norah O’Donnell:

I don’t want that to happen. You know why? I want a patient-centered system, I don’t want government running health care…The government shouldn’t tell you what you must do with your life, with your health care. We should give people choices.

Ryan centers his defense of the failed Trumpcare bill on the notion of individual freedom. He said he fears that Trump might move to work with Democrats so that he can make good on campaign promises to redo Obamacare, and “that’s not, that’s hardly a conservative thing.”

Ryan’s idea of freedom for the American people is the right to choose whether to have health insurance or not, and if they choose health insurance, to be free to choose expensive or cheap insurance.

But he sees life as a monetary transaction. In this appearance on Face The Nation March 12, 2017: (hat tip Ed Walker)

DICKERSON: How many people are going to lose coverage under this new —

RYAN: I can’t answer that question. It’s up to people. Here — here’s the premise of your question. Are you going to stop mandating people buy health insurance? People are going to do what they want to do with their lives because we believe in individual freedom in this country. So the question is, are we providing a system where people have access to health insurance if they choose to do so…We’re not going to make an American do what they don’t want to do. You get it if you want it. That’s freedom.

Ryan’s freedom will get rid of the Essential Health Benefits that are mandated under the ACA in his Trumpcare bill. The Essentials set the minimum coverage for any policy offered on the exchanges. They include lab tests, drugs, maternity care, treatment for substance abuse and mental illness, and others.

If insurance companies can issue policies that don’t cover these mandated benefits, policies will be cheaper. That will increase the number of people with policies that won’t cover treatment they suddenly need.

So when Ryan says “freedom” he means: You have the freedom to give money to an insurance company to buy any policy you can afford; you can shop around for a policy that may or may not provide the coverage you eventually need; or you can take the risk of bankruptcy and/or denial of health care when you get sick.

But, in Ryanworld, individual freedom to choose doesn’t extend to abortion, despite it being the law of the land.

Ryan assumes that if the government were involved, it couldn’t negotiate better drug prices. He assumes government wouldn’t regulate against the predatory excesses of health insurers, health care providers, and drug companies. Government involvement does violence to his Randian wish for a perfect and omniscient free market. He assumes that people with limited resources would choose to forego rent, food, or education to buy inadequate health insurance.

Let’s give Paul Ryan the benefit of the doubt: Say he knows that this is horseshit, but he needs to legislate. The alternative is that he is the worst kind of ideologue.

Conservatives spill the word “socialism” like beer at a frat party. They think it coats everything and makes everything smell, at least politically.

It’s hard to believe that the GOP has a true notion of what socialism is, or how it works.

It’s all around us, and Republicans are expert practitioners. Their negative talk about socialism is another example of their constant projection onto Democrats and progressives. Is it socialism when Ivy League admissions favor the rich? Or when the rich help other rich people get into the country club? Or when they all appoint the same people to corporate boards?

They despise it when the rest of us use collective action; when voters get their government to combat anti-labor and anti-monopoly practices, when voters work together for better schools, safer foods, clean water and safe working conditions.

That’s bad socialism, not the good socialism practiced in Boston’s Back Bay or on NYC’s Upper East Side.

It’s good socialism when companies work together in the US Chamber of Commerce, share information, and spend millions influencing government to increase their bottom lines.

Its bad socialism when people fight for practical affordable access to health insurance.

Paul Ryan’s vision of freedom has a lot in common with Kris Kristofferson’s “Me and Bobby McGee“:

Take away lyric:

Freedom’s just another word for nothin’ left to lose,

Nothin’ ain’t worth nothin’ but it’s free.

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

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Is Taxing Robots a Solution to Fewer Jobs?

The Daily Escape:

(Slot canyon with dust devil – photo by Angiolo Manetti)

Yesterday, the Dutch voted in an election pitting mainstream parties against Geert Wilders, a hard-right, anti-Islam nationalist whose popularity is seen as a threat to politics-as-usual across Europe, and possibly, as an existential threat to the EU.

Wilders, who wants to “de-Islamicize” the Netherlands and pull out of the EU, has little chance of governing, as all of the mainstream parties have already said they won’t work with him. Given Holland’s complicated form of proportional representation, up to 15 parties could win seats in parliament, and none are expected to win even 20% of the vote. OTOH, polls show that four in 10 of the Netherlands’ 13 million eligible voters were undecided a day before voting, and there is just 5 percentage points separating the top four parties, so Wilders could surprise everyone.

As Wrongo writes this, the Dutch election results are not known, but PBS NewsHour coverage on Tuesday surfaced a thought about taxing robots. PBS correspondent Malcolm Brabant was interviewing workers in Rotterdam:

Niek Stam claims to be the country’s most militant labor union organizer. He says the working class feel insecure about their prospects because of relentless automation and a constant drive to be competitive. The union is campaigning for robots to be taxed.

Brabant then interviewed a worker:

Robots do not buy cars. Neither do they shop for groceries, which leads to a fundamental question: Who’s going to buy all these products when up to 40% of present jobs vanish?

This isn’t an entirely new idea. Silvia Merler, blogging at Bruegel, says:

In a recent interview, Bill Gates discussed the option of a tax on robots. He argued that if today human workers’ income is taxed, and then a robot comes in to do the same thing, it seems logical to think that we would tax the robot at a similar level. While the form of such taxation is not entirely clear, Gates suggested that some of it could come from the profits that are generated by the labor-saving efficiency…and some could come directly in some type of a robot tax.

The main argument against taxing robots is made by corporations and some economists (Larry Summers), who argue that it impedes innovation. Stagnating productivity in rich countries, combined with falling business investment, suggests that adoption of new technology is currently too slow rather than too fast, and taxing new technology could exacerbate the slowdown.

It can be argued that robots are property, and property is already taxed by local governments via the property tax. It might be possible to create an additional value-added tax for robots, since an income tax wouldn’t work, as most robots are not capable of producing income by themselves.

Noah Smith at Bloomberg argues that the problem with Gates’ basic proposal is that it is very hard to tell the difference between new technology that complements human work, and new technology that replaces them. Shorter Noah Smith: Taxation is so hard!

Why are Western economies stagnant? Why has wage growth lagged GDP growth? Automation is certainly a key factor, but rather than point the finger at the corporations who continually benefit from government tax policies, let’s just assign blame to an object, a strawbot, if you will. That way, we won’t look too carefully at the real problem: The continuing concentration of economic and political power in the hands of fewer and fewer corporations.

Automation isn’t the issue, tax laws that allow economic treason by corporations in their home countries are the issue.

Why is nationalism on the march across the globe? Because fed-up workers see it as possibly the only answer to the neoliberal order that is destroying the middle class in Western democracies.

Let’s find a way to tax robots. Something has to offset Trump’s tax breaks for the rich.

Now, a musical moment. Did you know that “pre-St. Patrick’s Day” was a thing? Apparently, some dedicated celebrators prepare for the day itself by raising hell for up to a week beforehand. With that in mind, here is some pre-St. Pat’s Irish music, with Ed Sheeran singing “Nancy Mulligan” a love song about his grandparent’s marriage during WWII, against the wishes of her parents, and despite their Catholic/Protestant differences:

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

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CBO and Ides of March UPDATE

Further to the column below, Bloomberg has a nice chart that puts the CBO report on Trumpcare in a better context. It compares the number of uninsured in CBO’s future forecast for Obamacare (if it remained in place) with their future forecast for Trumpcare. The difference is staggering, particularly if you think America shouldn’t cast aside its people for profits:

The difference between 10% of Americans uninsured and the 19% uninsured under the GOPocalypse Plan must be made clear to voters. Importantly, the GOP version will insure even FEWER people than were uninsured before we had Obamacare!

New HHS secretary Tom Price joined the parade of Republicans who tried to discredit the CBO report. He told reporters that the CBO didn’t analyze the entire plan for health care, including regulatory changes that can be made by HHS:

We disagree strenuously with the report that was put out…We believe that our plan will cover more individuals at a lower cost and give them the choices that they want, the coverage that they want for themselves and their families.

This is hilarious, considering that Price, in his previous role as House Budget chairman, helped to pick the current CBO director. Do you believe for a moment he picked someone who didn’t see things his way?

Finally, hidden in the CBO report on page 33, footnote f, is an assumption that should be headlined around the media today. It states that more people will die if Trumpcare is enacted. TPM reports:

Approximately 17,000 people could die in 2018 who otherwise would have lived if a House Republican health proposal endorsed by the Trump administration becomes law. By 2026, the number of people killed by Trumpcare could grow to approximately 29,000 in that year alone.

You might think that a CBO report showing that your plan will kill thousands of people a year and inflict physical and financial misery on countless more in order to pay for another tax cut for the wealthy would scare the GOP leadership, and some cracks are starting to show.

But, these are people who think that freedom requires that toddlers and those with schizophrenia be allowed to have access to guns, so very few are likely to be moved by the CBO’s forecast.

The disingenuousness of the GOP is to tout that the CBO estimates $935 billion in spending reductions via smaller tax credits and Medicaid cuts.  All this mostly affects the working poor who will pay for its $599 billion in tax cuts, mostly going to the wealthy.

That’s not a winning argument to take to voters in 2018.

It’s a point of theology with Republicans. The market can’t fail, it can only be failed. They have never accepted the concept, widely shown to be correct, that healthcare is not a commodity good like other goods and does not conform to their free market religion.

Read on below.

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