The Wrongologist

Geopolitics, Power and Political Economy

Monday Wake Up Call – May 4, 2020

The Daily Escape:

Flathead River with Mission Mountains in background, MT – photo by Jay Styles

Can the Republicans force the economy to open? Bill Barr thinks so.

“Justice Department officials have spoken on conference calls with leaders of conservative groups, who have flagged individual cases as worthy of the department’s review. Some cabinet officials have signaled that they back the effort by participating in private calls with conservative allies, according to multiple people involved with the calls.”

The COVID-19 outbreak sparked many states and municipalities to order their citizens to stay at home and businesses to close in order to slow the spread of the illness, and to protect the public, but do the states have the authority to do it?

According to the Incidental Economist:

“Terms like isolation and quarantine have legal meaning, and relate to the government’s powers to act in the public’s interest. Isolation is a targeted approach for individuals already diagnosed with a disease while quarantine restricts the movement of individuals or groups exposed to an illness, some of whom may not be sick.

Both strategies restrict the movement of individuals and are considered a severe deprivation of liberty.”

Last Friday, New Mexico Gov. Michelle Grisham (D) quarantined the town of Gallup, at the request of the city’s mayor, because the city is a COVID-19 hotspot. Grisham invoked New Mexico’s Riot Control Act. The order shuts down all roads to and from Gallup.

We can expect that this will lead to legal battles over whether governors can close individual American cities.

Last week, AG Barr issued a memorandum directing an effort to monitor state and local shutdown policies. Barr wrote: (emphasis by Wrongo)

 “We do not want to unduly interfere with the important efforts of state and local officials to protect the public…But the Constitution is not suspended in times of crisis.”

Actually, it has happened many times before.

  • Both GW Bush and Abraham Lincoln suspended habeas corpus.
  • John Adams helped pass the Alien and Sedition Acts of 1798, those four laws “restricted the activities of foreign residents in the country and limited freedom of speech and of the press”.
  • FDR built internment camps and imprisoned Japanese Americans.
  • Woodrow Wilson presided over the passage of the Espionage Act followed by the Sedition Act. People couldn’t say anything: “…insulting or abusing the US government, the flag, the Constitution or the military.” Violators could receive 20 years in prison.

And now, Barr barges in. Since Wrongo isn’t a lawyer, we’ll have to leave the arguments to those who are qualified. But it seems that in the past, all the Constitution-breaking has been done by presidents, not governors. What we have is a federal vs. state powers question.

So far, the DOJ has intervened in only one case, a “religious freedom” complaint, a lawsuit by a Baptist church in Greenville, MS.

Conservatives are perfectly willing to be inconsistent. They are champions of “states’ rights” until the state in question happens to lean blue. Speaking of inconsistency, remember that it was Trump who when asked why he wasn’t going to issue a nationwide ‘shelter in place’ order, said that it was up to the states.

The Trump administration delegated responsibility to the states with one hand, yet allows the DOJ to threaten governors with legal action. We also have religious conservatives who seem to forget the basis of Christianity, and are willing to put their neighbors at risk. Finally, there is a worrying increase in right-wing civil disobedience (while carrying weapons) that could easily ignite a real civil problem.

Once again, shopping is patriotism. Legitimate fear is unconstitutional. This isn’t unprecedented. After 9/11, GW Bush told everyone to go out and shop. Shopping is apparently how Republicans show their love of country.

Taken together, we as a nation have truly lost our way.

Wake up America! Insist that by November, the states have prepared well enough that it is safe to vote in huge numbers to get these birds out of office.

To help you wake up, let’s listen to Bruce Springsteen and his wife, Patty Scialfa playing two songs from their home studio, “Land of Hope and Dreams” and “Jersey Girl”. This was part of the Jersey 4 Jersey benefit for the New Jersey Pandemic Relief Fund.

This is dedicated to daughter Kelly, a former Jersey girl who can use a pick-me-up. Remember, dreams will not be thwarted!

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


Which Candidate’s Dirty Laundry Loses The Election?

Mark Twain said: “If you don’t read the newspapers you are uninformed. If you do read them you are misinformed.”

The media are having a field day reporting about the candidates’ dirty laundry.

The Pant Suit’s problem is her dirty laundry. The relationship between the Clinton Foundation and Hillary Clinton’s role as Secretary of State seems a bit unseemly. Yet, isn’t this basically “how things work” in the real world?

Given Wrongo’s 40+ years in corporate life, including a stretch where lobbying the White House and Congress was part of his job description, there doesn’t seem to be much that’s different in the Clinton Foundation’s efforts to link up like-minded people.

The Pant Suit’s email problem is another issue. You can take a deep dive into the web’s feast on Clinton’s private servers and emails. It takes you to a series of questions about what was classified and when, her gone-missing mobile devices and what she said in email, or to the FBI. Nothing Wrongo has seen undermines the FBI’s judgment that Clinton was grossly irresponsible in handling classified information but still did nothing warranting prosecution.

The question is whether bad judgement undermines her chances to be president.

The problem with the Pant Load is his dirty laundry. Among his multiple scandals, is what appear to be payoffs to state attorneys general to back off investigating Trump University.

It might surprise you to learn that Trump has a charitable organization, since he personally gives almost no money to charity, but the Donald J. Trump Foundation does in fact exist, and it was fined by the IRS this year for making an illegal political contribution to Florida Attorney General Pam Bondi. At the time, Bondi’s office was investigating claims that Trump University was a fraudulent organization designed to bilk people out of their money. After receiving the contribution (which she had solicited), Bondi decided to do nothing.

HuffPo reports that after Bondi dropped the Trump U. case, the Pant Load hosted a funds-raiser for her at Mar-a-Lago. They also say that the Trumps collectively (foundation, Donald and Ivanka) donated $125,000 to the Florida Republican Party, which was the largest donor to Bondi. Was that solicitation of a bribe? That’s a crime. Offering a bribe? A crime. Accepting a bribe? A crime. Acting on a bribe? A crime.

This happened in 2013, but few media covered it until this week. Nobody pretends that Donald Trump is a paragon of honesty, but it’s hard to escape the impression that he’s being graded on a curve when compared to Hillary Clinton, if press coverage is the yardstick.

So, why the focus on dirty laundry?

The fairest viewpoint is that the continued airing of dirty laundry is the media’s effort to offer a case against both candidates. A skeptic would say they are chasing ratings, trying to follow the money. They play up the Clinton scandals, and downplay the “ridiculous man running a ridiculous campaign” meme.

And the result is that the polls seem to be tightening.

The continuing avalanche of negative and unflattering press is probably going to accelerate that process, and some of the press are punting: Chris Wallace, one of the upcoming presidential debate moderators, is on record as saying that his job as the moderator does not include calling out bullshit when he hears it.

Who knows what the possible consequences will be for the nation and the world?

Charlie Pierce gets the important role of the media just right: (emphasis by the Wrongologist)

More than anything else, and more than any other election in my lifetime, this election will go one way or the other based on how well-informed the electorate is that ultimately turns out.

NPR reported that Hillary Clinton spent 20 minutes answering reporters’ questions on a wide variety of topics on the campaign plane, but “her answers didn’t make news”, while her coughing fit did.

So that’s become the new standard. Trump’s utterances are minimized, yet Hillary’s coughing is a thing to discuss incessantly, while her answers to press pool questions are not worth reporting.

The press is desperate to report foibles, or scandals. What else an we do but to listen to “Dirty Laundry” by Don Henley, which was #1 on the Billboard chart in 1982:

The song’s theme is that TV news coverage focuses too much on negative and sensationalist news; in particular, deaths, disasters, and scandals, with little regard to the consequences, or what is important.

Partial Lyrics:

I make my living off the evening news
Just give me something-something I can use
People love it when you lose,
They love dirty laundry

Dirty little secrets
Dirty little lies
We got our dirty little fingers in everybody’s pie
We love to cut you down to size
We love dirty laundry

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


Where Republicans Are Coming From – Monday Wake Up Edition

(There will be limited blogging until 8/25, as Wrongo and Ms. Right visit Glacier National Park. Keep your tray tables in the upright and locked position while we are away.)

One of Wrongo’s earliest memories, a fragment, was riding in the car with my parents. When I asked where we were going, my mother said: “To elect Mr. Dewey president.” That was 1948. And here is a graphic example of what civic-minded Republicans were doing in Pittsburgh in 1949:

Vote Republican

The photo was taken by Charles “Teenie” Harris, and is in the archives of the Carnegie Museum of Art. It is part of a show of his work that opened on Aug. 13. Pittsburgh was Harris’s home town.

Note the predator’s clutching fingers. Note the long nails that Americans imagined that their Japanese enemies had in WWII. Note the blackface doll carried by the little white girl. While many Blacks in the north still voted for the Party of Lincoln in 1949, this billboard was in many ways a “dog whistle” for the white community of Pittsburgh.

The billboard was part of the Republican Party’s “informed debate” in Pittsburgh’s mayoral election in 1949. Their message was that the streets were not safe for women and children. This, at a moment in American history when we were not suffering lots of crime. In fact, there was a drop in homicides in the immediate post-war period.

There was pushback against the billboard, even among Republicans, in fact, the Pittsburgh Outdoor Advertising Co. refused to honor their contract to put up 100 copies of the image once they saw it. They had to be forced to do so by a local judge, who called the picture “a shocking example of bad taste.” Within a week of the billboard’s appearance, however, the Republicans themselves decided to replace it with a less offensive image. From Blake Gopnick at Artnet:

Back then, at least, a Republican candidate could realize he’d crossed a line and decide to step back from it.

That’s much too much to ask in 2016. Of course today, the Republicans would say the way to make that child safe would be to give her a gun and tell her to lock and load.

So another Monday morning wake-up for the GOP. To help them join the rest of us in the real world, here are Belle and Sebastian with “Olympic Village, 6am”. As we start the second week of the Olympics, the focus shifts to track and field, and so does this video:

For those who read the Wrongologist in email, you can view the video here.

(H/T: LGM)


Sunday Cartoon Blogging – August 14, 2016

Apparently, President Obama makes a playlist every year for his summer fun time on Martha’s Vineyard. Playlists by politicians are common, and usually are big nothingburgers. Obama has a “Day” playlist and a “Night” list. This year, The Atlantic approves of Mr. Obama’s night playlist, and thinks the day list is a snooze. Guess critics gotta criticize.

Make up your own mind: here is the Obama “Night” playlist.

It was a big week in manufactured news. Trump dominates, but Politico speaks about the Trump campaign thusly: (emphasis by the Wrongologist)

What’s bothering people on the [Trump] campaign is that they feel like they’re doing all the right things, but they’re losing every news cycle to Hillary and there’s nothing they can do about it.

It’s doubtful that Clinton has won a news cycle since the convention, but what the Trump campaign is trying to say is that Clinton doesn’t need to win a news cycle as long as Trump “misspeaks” every day. From Karoli Kuns at C&L: (brackets by the Wrongologist)

I think that’s precious, don’t you? Considering that Trump dominates the news for every cycle with his intentional demonization of President Barack Obama and [his] opponent, Hillary Clinton, it’s hard to imagine Republicans wringing their tiny little hands over losing news cycles to her.

Ok, the GOP should keep explaining Trump’s gaffes until America is tired of all the winning.

On to cartoons. Simone Biles gave us a feel-good moment:

COW Americas Great Again

This is the one Burka that Trump likes:

COW Tax Returns

With all of the “resets” and “mansplaining”, the GOP could lose its balance:

COW Balance Beam

This is as understandable as any other explanation by Monsieur big mouth:

COW Trump Backs Up

Trump’s new tax policy is same old, same old. It’s a reconstitution of the standard Republican trickle-down economics that benefits big corporations and a wealthy few:

COW Trump Tax Plan



Hillary Should Grab Populism and Run With It

The biggest change in our politics in the past 20 years is the rise of populism on the left and right. The populists believe that we are led by a selfish elite that cannot—or will not—deal with the problems of ordinary working people, and there is ample evidence that they are correct.

Trump and Clinton say they will bring back jobs that corporations have shipped offshore. They make China the scapegoat for lost economic opportunity, while the real causes are automation and the triumph of the spreadsheet in corporate strategy.

Those jobs are never coming back, and a candidate who says they can negotiate with foreign governments to bring jobs back demonstrates either their naiveté about the true cause of job loss, or a simple desire to BS the American public.

Voters can see through that.

Economic and cultural insecurity are the bedrock causes for populists. Unemployment and stagnant wages hurts working-class whites, while cultural issues are a top issue for older white Americans. The first group sees their jobs threatened by automation and globalization. They join with older whites in seeing immigrants as scroungers who work for less, grab benefits and if you believe Trump, commit crimes.

Both groups also believe that American society is being undermined by diversity and foreign-born citizens.

This is the battle line of the 2016 presidential election. The mediocre economy that has been with us for nearly 20 years has caused real harm. We remain a wealthy country, but certain groups now see their opportunity slipping away. Slow growth, or no economic growth, means only a few elites will do well, and most voters see the self-serving political class as siding with the elites.

So can a candidate unify an electorate that now plays a zero-sum political game?

  • The Pant Load has the better position in this game, since he can exploit pre-existing fears that are based in fact.
  • The Pant Suit must carefully calibrate her message, but she cannot be a “maintain the status-quo” candidate and win.

Clinton would do well to consider what William Berkson said in the WaMo:

If there is one national goal that Americans can agree on, it is opportunity for all.

Berkson makes the point that since President Reagan, Republicans have advocated a simple theory of how to grow the economy: The more you reduce government involvement in the economy and the more efficient markets become, the more the economy grows.

Sorry, but the simplistic theory of free market economics has been drowned in a tsunami of fact in the past 35 years. Berkson says:

Both Democratic administrations since Reagan—that of Bill Clinton and Barack Obama—have raised taxes, and under them, the economy grew more rapidly than under the tax-cutters Reagan and George W. Bush.

This opens a path for the Pant Suit. In order to win, she must assure voters that she will deliver more and better jobs. Family income must go up. But how to achieve this?

By advocating a policy of economic opportunity through public investment in infrastructure. It fulfills the promise of opportunity for all, a populist message that has proven to work throughout America’s past. And it allows Clinton to hammer the GOP Congress and Paul Ryan about the lack of any track record for laissez-faire policies, since they have never worked, not even once, as a miracle cure for jobs and income inequality. This would be an open return to Keynesian economics. Here is Eduardo Porter in the NYT:

The Keynesian era ended when Thatcher and Reagan rode onto the scene with a version of capitalism based on tax cuts, privatization and deregulation that helped revive their engines of growth but led the workers of the world to the deeply frustrating, increasingly unequal economy of today.

And led to the low growth economy that drives today’s populist anger.

How to fund that infrastructure expense? More revenue. For the last 40 years, Democrats have been unwilling to counter the conservative argument that higher taxes are a redistribution of wealth between classes. Clinton should argue that current tax policy is really a transfer of resources from tomorrow’s generation to today’s. This is a strong populist message.

Younger Millennials understand this clearly. They already believe Social Security will not be there when they need it. She can win them over if she makes a case for new jobs and new revenues.

When conservatives say that it is unfair for people in their highest earning years to pay more taxes on that income, Clinton can point out that this is a past-due bill that they need to pay just as their elders paid higher taxes that supported the current earners when they were starting out. It was that investment in public resources such as public education and infrastructure, and in research, technology and industry that enabled today’s peak earners to get where they are.

While the strategy opens Clinton to criticism from Grover Norquist and the right about fiscal irresponsibility, it pits Trump against the Tea Party and the GOP. He would need to choose between being a populist or a doctrinaire fiscal conservative. Either way, it will bleed votes from some part of his base.

The strategy could work in down ballot races as well, particularly in the Rust Belt. Maybe working class conservatives will hear her, and not vote against their economic interests for once.

We’ll see if she will move from status quo, to “let’s go” as a campaign strategy.


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.


Will Take-Home Pay Grow?

One of the big questions that we must force Hillary Clinton and Donald Trump to address is: Where will growth in take-home income come from?

If we look at pay, despite recent improvements, real average hourly earnings have declined since the 1970s:

Real Hourly Earnings 2016


At the same time, the average hours per week have trended down from around 39 hours per week in the mid-1960s to a low of 33 hours at the end of the last recession. It is 33.7 hours today. After eight years of economic recovery, it is only up by 42 minutes.

So, take-home pay has stagnated (or worse) for the average American since the Nixon administration. People have coped by having both spouses work, by borrowing under a Bank of America heloc, and by refinancing mortgages when interest rates declined.

But, by 1995, spousal participation in the job market had peaked, at about 60%. Borrowing under home equity lines of credit peaked in 2005 at $364 billion. These loans that were used to pay for remodeling, education costs, or new Ford F-150s were less than half of that amount in 2015, at $150 billion.

After the Great Recession, The only remaining way to boost household cash was mortgage refinance. There were windows to refinance a mortgage in 2009, and again in 2013. The reason was that mortgage interest rates stayed very low. In fact, US 10 year treasuries were at a 60 year low in 2013 at 1.50%, and mortgage rates are tied to the treasury rate. Refinancing mortgages can happen to many people, this is where companies like Polar Mortgage come in to help homeowners out. Homeowners also have the ability to get financial help from the government through the use of federal credit union home loans in order to refinance their homes.

As an example, a 1.5% decline in a mortgage payment on a $250,000 house would save $3750 a year, or a little over $300 a month added to the pockets of the average hourly worker. Taking income tax into consideration, it would take an additional 17.5 hours of work at the $21.45 rate to equal that amount. But that’s not practical. It would require a 52% increase in hours, if you are working the national average number of hours, which isn’t going to happen.

So, if the Federal Reserve raises interest rates, as they seem set to do this month or next, mortgage refinance will no longer be helpful to the vast number of working people. CoreLogic tracks the interest rates on outstanding mortgages, collecting data from mortgage servicers. Their data track the volume of outstanding mortgages by interest rate level for both the number of mortgages, and the unpaid principal balance on those mortgages (UPB).

Their analysis says that few mortgages will be refinanced if rates go up: Most borrowers have mortgages with rates below 4.50%, with 62% of mortgages and 72% of UPB in this range. There are an additional 14% of borrowers and 13% of UPB with mortgage rates between 4.5 and 5.0%.

Since refinancing has costs (legal, title search and insurance, and points), a simple rule of thumb is to add 1% to the current mortgage rate to get a rate at which borrowers would have a financial incentive to refinance. The current Freddie Mac mortgage rate is 3.57%, so the point of indifference for a borrower would be ~4.5%. CoreLogic estimates that only about 28% of the UPB of America’s outstanding mortgage loans are worth refinancing today. And should the Fed live up to their plan, and increase rates by ½% in 2016, an additional 5.5 million borrowers will lose their incentive to refinance.

So, if mortgage rates rise in 2016 as predicted, refinancing won’t improve the financial situation for very many of us.

New Deal Democrat sees all of this and says:

So the bottom line is, we are already in a period…where real gains by average Americans won’t be available from financing gimmicks, but must come from real, actual wage growth. At the moment I see little economic or political impetus to make that happen, even though average Americans understand via their wallets the issue all too well.

We’ve killed our economy.

You’d think after 8 years where most US job growth was in part-time jobs, where hourly income is at the same level as in the Ford administration, where we have the most people ever in poverty, where student debt exceeds credit card debt and automobile debt, people would catch on.

Maybe, but not unless we demand real answers of Hillary Clinton and Donald Trump, and not let the candidates say the plan is to rearrange the deck chairs on the Titanic.


Memorial Day 2016

Thank You Armed Forces

Every year, the Wrongologist reminds blog readers that Memorial Day was called Decoration Day for more than 100 years, ending in 1971. It was established by an order issued by Gen. John Logan, the national commander of the Grand Army of the Republic. This is from Gen. Logan’s order:

The 30th of May, 1868, is designated for the purpose of strewing with flowers, or otherwise decorating the graves of comrades who died in defense of their country during the late rebellion, and whose bodies now lie in almost every city, village and hamlet churchyard in the land…

Back then, it was our most solemn holiday. It was first observed on May 30, 1868, when flowers were placed on the graves of Union and Confederate soldiers at Arlington National Cemetery, a tradition we still follow today.

The Civil War claimed more lives than any conflict in US history, requiring the establishment of the country’s first national cemeteries. Drew Gilpin Faust’s book, The Republic of Suffering-Death and the American Civil War (2008) reminds us just how deadly the Civil War was: 620,000 dead soldiers, (2% of the US population at the time), at least 50,000 dead civilians, and an estimated 6 million pounds of human and animal carcasses to deal with on battlefields.

When the Civil War began, neither army had burial details, graves registration units, means to notify next of kin, or provisions for decent burial. They had no systematic way to identify or count the dead, and until 1867, no national cemeteries in which to bury them. In an ironic twist, in 1866, after the assassination of Abraham Lincoln, the Union Army opened an office in Ford’s Theater to record deaths, house the war records and assist families to find lost loved ones. In 1893, the building collapsed, killing 22.

The mortality rate in the South exceeded that of any country in WWI. In addition, the South lost nearly 2/3rds of its wealth in the War.

Decoration Day became Memorial Day when Congress passed the National Holiday Act of 1971, which made us observe national holidays on Mondays, creating three-day weekends for We, the People. So, along with parades, picnics and mega-sales on the web and in the malls, many think that the holiday celebrates the start of summer.

Instead, please stop and remember the people who died in our wars. Do that irrespective of whether you “believe” in a particular war.

Memorial Day is a time to meditate on the difference between right and wrong wars. Mr. Obama spoke in Japan last Friday, walking a fine line, remembering the atomic weapons dropped on Hiroshima and Nagasaki, but not calling WWII and our actions against Japan “wrong”.

Another thing to remember is that our government owes our all-volunteer military policies and policy decisions that are worthy of their sacrifice. But, our government rarely makes decisions that are completely worthy of such sacrifice.

Let’s also give some thought to this quote from Andrew Bacevich:

With its military active in more than 150 countries, the United States today finds itself, if anything, overextended. Our principal security challenges — the risks to the planet posed by climate change, the turmoil enveloping much of the Islamic world and now spilling into the West, China’s emergence as a potential rival to which Americans have mortgaged their prosperity — will not yield to any solution found in the standard Pentagon repertoire. Yet when it comes to conjuring up alternatives, the militarized history to which Americans look for instruction has little to offer.

Ask Trump and Clinton what will be different if they become Commander-In-Chief. Which one will address climate change, the rise of China, or the near-civil war in the Greater Middle East?

Finally, when you think about policies worthy of sacrifice, here is a Memorial Day tune from Warren Zevon: “The Envoy”, from the album of the same name. The song was written in 1981, back when we thought our issues in the Middle East were rare. It was inspired by Philip C. Habib, who was President Reagan’s special envoy in the Lebanon crisis.

That was the start of something that hasn’t achieved much. The US currently has 48 Special Envoys, but you can’t see any peace from where we sit.

OK, the song isn’t “Roland the Headless Thompson Gunner” or, “Werewolves of London,” but Zevon was one of the best and brightest. Here is “The Envoy”:

These 34 year-old lyrics about the Middle East could be tomorrow’s headlines. Is there a threat to world peace? Oh yeah, us.

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


Sunday Cartoon Blogging – May 29, 2016

Californians will be pleased to know that when Donald Trump becomes president, he can stop their drought overnight. California just went through the driest four-year period on record.

But Trump isn’t sold. He told supporters in Fresno, CA that the dry spell is bogus. Trump said the state was denying water to Central Valley farmers to prioritize the Delta smelt, a native California fish nearing extinction — or as Trump called it: “a certain kind of three-inch fish.” He told the crowd:

We’re going to solve your water problem. You have a water problem that is so insane. It is so ridiculous where they’re taking the water and shoving it out to sea…

At least we know where Trump stands on the issue:

If I win, believe me, we’re going to start opening up the water so that you can have your farmers survive.

Never mind that this is a state, not a federal issue, because Trump will win on the environment too.

In other news, Hill’s email problem gives her a few hurdles:

COW Hillarys Hurdles

So far, we’ve heard what we already knew, she broke a rule that others had broken before her. Of course, to Republicans, breaking an agency rule is proof she’s broken the law. Maybe, but rules ain’t the same as the law. She needs to put this behind her, or face death by a thousand cuts.

We got our first look at Hill’s emails:

COW Hills Emoticon

Bill & Hill feel the Bern in CA:

COW kids in car

Trump and Bernie wanted to debate. You know who the target was:

COW Trump Bernie

Apparently, we have no antibiotic for the Superbug:

COW Superbug












The GOP plans to make the transgender toilet rule a centerpiece in the campaign:

COW Toilet