Monday, May 29, 2017

John and Mary

This week saw the release of the Trump budget plan. I was disappointed by the coverage of its likely outcomes in the media sources I go to for this kind of story. The budget assumes that the economy will grow at a rate of 3% as a result of the changes proposed. It is assumed that the extreme tax cuts in the American Health Care Act and the further tax cuts Trump wants Congress to afford in a separate bill that we do not have yet will bring about this growth, and that the increased tax revenues from this economic growth spurt will pay for the impact of the Trump budget on the deficit, that the deficit will in fact be reduced. Critics in my media sources have ranged from calling this “unlikely” to “overly optimistic”. It is nothing of the sort. Pardon my French, but this assumption is complete bullshit. I explained part of why in my last post. Tax cuts for the wealthy will go not into the economy, but rather into the financial markets. The rise in the markets that will result will not be sustainable without economic improvements to support it. But it’s much worse than that. To understand why, I would like you to meet John and Mary.

John and Mary are my creations. They are not real, in the sense that I am not talking about actual people I know. But I have named them John and Mary, not, say, Zeb and Lu-Ann, because I want you to take them seriously. John and Mary voted for Trump. They live in western Kentucky, because I wanted to put them in a deep red state that had approved Medicaid expansion. They both work, but they can only afford one used car between them, and hope nothing ever happens to it. So Mary works days at Walmart, while John works the night shift. During the week, they see each other during the time John drives Mary to work. Then John sleeps as much as he can while the kids are at school, and then gets up to be there for them when they get home. John and Mary have two boys. John and Mary work hard, but they rely of SNAP to have enough to feed their family. Mary sometimes has to work on Saturday, so Sunday is the only time the whole family can be together. They go to church in the morning, so only the afternoon is truly theirs. Mary gets human contact during the week from her customers, but for John, church provides a vital lifeline to the outside world. Most of the people they know are coal people. Their families and the families of almost everyone they know had someone who used to make a good living working in the mines. Hillary Clinton, they feel, never cared about those jobs, while Donald Trump spoke to the anger they felt over their loss.

Now we have the new budget proposal. John and Mary don’t have time to try to understand all of the details. They do know that it cuts SNAP, so they will have to make up the difference by doing without something else. They already know that they may need more money from somewhere to cover increased out-of-pocket expenses for their healthcare. Sure, they are basically healthy, so their premiums will go down. But they realize they will not only pay less; they will also get less coverage. But they have not considered the impact on people they know, and what that means to them. Everyone they know will have less money to spend, and will cut back wherever they can. This includes members of their congregation who have pre-existing conditions from the time they spent working in the mines. That means they will spend less at Walmart. John’s job also is in retail, so there will be reduced spending there is well. Although John and Mary have not thought about it, it is possible that one or both of them will be laid off because their employer needs less staff to handle the drop in sales.

So there you have it. 3% growth is not simply overly optimistic or unlikely. The budget cuts at least $1.5 trillion from consumer spending over ten years, and that will mean job losses for people like John and Mary. Those job losses in turn mean even further drops in consumer spending, causing more job losses, and so on. People in Congress, and certainly in the White House, have never lived in John and Mary’s world. They do not understand that the Johns and Marys of the world far outnumber them, and gain nothing from the tax cuts that provide more play money for Wall Street. Our lawmakers call that cut of $1.5 trillion “entitlement reform”, and they believe that the people who will suffer those cuts do not matter to the health of the economy. The budget basically says that John and Mary are expendable, and there are all kinds of rationalizations to explain how anyone who needs public assistance isn’t trying hard enough. John and Mary can’t try any harder. They have already had to sacrifice so much.

People like John and Mary used to reliably vote for Democrats. They or their families remembered the Great Depression, and how Roosevelt worked so hard to help the working man. They saw labor unions as a positive force in their lives, especially if you were a miner. But the Republicans seized on the corruption that afflicted unions to begin a campaign of vilifying organized labor. They also promoted a narrative that life was a fierce competition for finite resources, and that every dollar that went to someone with skin darker than yours came out of your pocket. Now they are positioned to blame the economic downturn that would result from the new budget on people who “just want handouts.” John and Mary don’t want handouts, but they will take whatever help they can find if it means their children are fed. It is long past time to find the Johns and Marys of the world, and make sure their stories are being told. For progressives, it could be the beginning of a new narrative, one that Roosevelt knew well, but has since been lost. More importantly, for John and Mary, it would let them know that they are not alone, and that the desperate circumstances they find themselves in are not their fault. The United States is still among the wealthiest nations on Earth. It is time John and Mary got to see some of that wealth in their own lives.

As it happens, I found this week’s song quite a while ago for my music video page on Facebook. But it certainly fits here as well:

Wednesday, May 24, 2017

The Fun House Mirror

I often see people using the performance of the stock market as a way of evaluating the success the political climate of the time. A meme made the rounds last year that included the rise of the S & P stock index during his presidency as a measure of Barack Obama’s success. If that is an accomplishment that one should be proud of, then Donald Trump must be the best president we ever had. You only need to look at how the stock market has performed since Election Day to see this. There are indeed some people who believe this. Even the sharp drop in the stock market last Wednesday does not dissuade them. That drop came as a special counsel was appointed to investigate the Trump campaign and the possibility of obstruction of justice within the administration, but the market has rallied in the following four sessions and regained most of what it lost as the news cycle quieted. This is a fine example of what I like to call a “just kidding rally”, and it points out how the stock market is not reality.

That said, Wall Street does mirror our political scene in bizarre ways. There is a battle of two different ideologies that mirrors our partisan divide. One side has more real world facts on its side, but the other has the better marketing for its positions. There is a blurring of who is on which side that serves to confuse matters, and strengthen those who eschew real world evidence. The two schools of thought combine in ways that do not always stand up to close inspection or analysis.

Wall Street is divorced from the real world in the first place because it is a game for the wealthy. You have to be able to afford the buying and selling of individual stocks, as well as more esoteric and speculative investments, to have an influence on how the market moves. You live in a world where your personal spending is not affected by increases at the pump in the price of gas. The jobs that are lost in mergers and acquisitions are not real to you. Drastic cuts in programs for the poor are seen in the light of deficit reduction, while the impact on consumer spending, and therefore ultimately on jobs, is conveniently ignored. The majority of the members of the House and Senate also live in this world, which makes it easier for them to evaluate the laws they pass in terms of how the market responds. Massive tax cuts for the rich do not go into the economy and create jobs; instead, they are invested for long- and short-term profits in the market, boosting the portfolios of many who voted for them. Market growth is not economic growth, and eventually even investors pay the price for this dichotomy, but too many policy makers can not see this. I just referred to “investors”, and thereby illustrated part of the problem. Wall Street is actually divided into investors and traders, and this is also reflected in our politics. Traders are looking to buy and sell stocks and other financial instruments rapidly, a year being a long time frame for them. They are looking for positions they can take for short term gains. Real world reasons why a stock should do well over time, such as the viability of the product or the soundness of the company, do not interest them. Instead, traders have developed an esoteric method of analyzing price charts to predict near term price movements of a given financial instrument. This type of analysis has become so involved that there is a tendency to lose track of the real world reasons for these price movements. Often, these reasons come down to mob psychology. A stock may have already risen to a level that is appropriate to the company’s worth by the time an analyst recommends it, but a trader’s charts measure the effects of new buyers piling in as the price of the stock rises to unsupportable levels. Traders hope to take advantage of this rise, and get out before the inevitable return to hard reality. Traders also know that their approach often fails, but they seek to balance their losses with a few big wins, so they need to exit their losing positions quickly. Donald Trump is a trader. His bankruptcies do not matter; they were just him monetizing the quick losses, while pursuing the next big win. In this game, it does not matter who gets hurt on the other side of a trade.

Investors are different. The real world matters to them, even if they don’t exactly live in it. They seek to find investments that are worth more than their current market price, and then hold them for as long as it takes for reality to catch up. The viability of a product and the financial health of a company are important to them. Peter Lynch once made investors in his Fidelity Magellan fund very happy with this approach, and Warren Buffet has become very wealthy this way. In politics, investors understand that safety net programs are vital to the long term health of the country. Where a trader sees the people of this country as competitors for a finite set of resources, investors see each person as representing a long term value to the nation, even if it takes a generation or more to unlock that value.

In a political campaign, traders offer short term solutions that may seem wonderful if you don’t look at them too closely. They can vilify political investors, knowing that they offer an easily visible quick fix, in contrast to a slow developing investing approach that solves nothing in the near term. In eight years, the full benefits to society of Obamacare had not had time to play out, making it easy for the Republicans to run against it. Political investors such as Hillary Clinton can also lose track of the fact that most Americans do not and can not actively participate in the market at all. To her, the status quo established under Obama was fine, just needing more time to play out. She could not appeal to those who needed not just health insurance but health insurance they could actually afford to use. She was asking for patience, while Trump was offering someone to blame for the time things were taking to get better.

It comes down to this. Would you rather buy a stock that should be worth twice its current price, but may take years to get there? Or would you rather buy a stock that a star analyst says will double in six months, even if it currently sells for more than the company is worth? It is the job of corporate Democrats to sell us the first stock instead of the second. It is the job of Republicans like Paul Ryan to get us to ignore any misgivings and buy the first stock. There is hardly anyone in Washington who will speak for those who can’t afford to actively play the market at all. That is actually most of us, and our laws would look very different if we were also considered. Ironically, the times when we have been considered, with policies such as the New Deal and the Great Society, have been very good times for the stock market. There many good reasons for this, but they may be the subject of a future post.

I really could only see one choice for this week’s song:

Monday, May 15, 2017

The Big Man

This week, the comparisons of Donald Trump to Hitler had to take a back seat to comparisons to Richard Nixon. But I would like to make a different comparison, one that I think has much to tell us about the unique threat that having Donald Trump in the White House poses to our nation. Allow me to present Donald Trump, mob boss.

In fact, we know that Trump has had dealings with mob figures in the past. This was waived off during the campaign by some who pointed out that anyone who wanted to build something in New York City in the 1970s had to deal with the fact that the mob controlled the local concrete market. But Trump also had such figures as honored guests in his casinos, even enforcing their wishes not to be served by black employees on at least one documented occasion. More disturbing to me was a case that emerged during the campaign that resulted in statutory rape charges being brought and then dropped against Trump. The story goes that Trump attended a series of sex parties in the 1990s organized by Jeffrey Epstein. Epstein was convicted of similar activities, and is now a registered sex offender. Trump admitted to his friendship with Epstein in the 90s, but he was not a party to the charges that led to Epstein’s conviction. During the campaign, a “Jane Doe” emerged who said Trump raped her at these sex parties, and that he knew she was thirteen at the time. She had a witness, identified as “Tiffany”, who worked as a procurer of underage girls for these parties. The judge in last year’s case ruled that the charges could be brought even though the statute of limitations had expired, because he found credible the claim by Jane Doe that she had received death threats to her and her family, and it had taken her this long to feel safe. Jane Doe told a story, backed up by Tiffany, of a girl she called Maria, who was going to bring charges of her own back in the 90s until she disappeared one day.

All of this must be regarded as hearsay. Jane Doe dropped her case abruptly last year, saying she was once again receiving death threats. So the case was never tried, and the evidence was never weighed in court. Around the same time, the fraud case against Trump University was settled out of court. We never learned the extent of Trump’s involvement in that one. This speaks to a perverse kind of privilege that Trump has known all his life. He is the son of a man who made his fortune in part by surrounding himself with cleaners, men who could make any story that could have damaged his reputation go away. Trump the son has always had his own cleaners as well, and now some of them are in the House and the Senate. Mitch McConnell, Devin Nunes, and Paul Ryan come to mind. It’s not hard to see that Trump hoped James Comey would become one of these cleaners as well. That would be why he tried to get Comey to swear loyalty to him at that dinner in January. If you grow up believing that the laws of this land only apply to those who don’t know how to make them go away, this would seem to be a natural role for the FBI, and it gives us an idea what qualities Trump will be looking for in a new FBI director.

Cleaners know the job they have to do. Bad stories must be made to disappear, and no knowledge of how it was done must ever be traceable to the boss. The boss makes statements that, for example, the investigation into Russian meddling in the election is over, and the cleaners make it so by whatever means necessary. People who say, or worse insist, otherwise get silenced, and sometimes vanish. A phrase we learned during the Watergate case does apply here. The boss must at all times have plausible deniability. This week, we crossed a line in the chronicle of alleged misdeeds by Trump. First with the testimony of Sally Yates, and then with the events surrounding the firing of James Comey, we learned of attempts at damage control that occurred since Trump took office. If this turns out to be the first hints of an illegal cover up, this will matter because only illegal actions that occur while a president is in office are impeachable offenses. So Trump’s cleaners now have their hands full.

With so much of a protective shell around them, what can bring down men like Donald Trump? For Al Capone, it was income taxes. A more spectacular downfall can come from a stool pigeon. One guy sings, and suddenly the whole structure begins to collapse. That is what happened in the Watergate case. Our best hope now lies with the planned testimony of Michael Flynn. This also made it easy to pick this week’s song:

Tuesday, May 9, 2017

Great Irresponsibility

Peter Parker’s Uncle Ben tries to teach him that, ”With great power comes great responsibility.” During Spiderman’s origin story, after Parker gains his powers and Uncle Ben dies in his arms, these words become the guiding principal that makes Spiderman a hero. But, after fifty issues, that responsibility becomes so great a burden that Peter Parker considers giving it all up, and trying to have a normal life instead. The image above is from that fiftieth issue. There is no supervillain, just a young man battling the words of his uncle, and those words finally win.

This past week, anyone who did not already know learned that Donald Trump and the Republicans in the House do not have any sense of responsibility to anyone to go with the power they wield over all of our lives. How else can you explain the passage in the House of the atrocity known as the American Health Care Act? Despite the late addition of an amendment to provide political cover for moderate Republicans, this was not a serious effort to improve health care for anyone. Instead, there was the actual goal of making savage benefit cuts in order to try to pave the way for huge permanent tax cuts for the wealthy. There was a mad rush to get the bill passed for several reasons. For Donald Trump, the fact that his first one hundred days in office passed with no major legislative victories was galling. His ego demanded the passage of something to brag about, no matter what its merits. For Paul Ryan, the bill is his greatest victory in his nearly religious crusade against the safety net. For the Republican leadership in general, two deadlines were looming that meant they had to get the votes, even if no one had so much as read the bill they were voting for. They knew the bill was doomed if the Congressional Budget Office had a chance to score the AHCA, giving precise details of how much harm it would do. And the Republican leadership also didn’t dare let their members leave on recess, and face their constituents in town halls, with the AHCA vote pending on their return. There was to be no epiphany, no chance for anyone to wake up and realize that the nation needed them to do what is right.

The greatest danger we face now is complacency. We must not assume that the ACHA will die in the Senate. We assumed that Donald Trump could not possibly win the Republican nomination, and I like so many others wrote about that. Then we assumed that he could not possibly win last November, and again, I am as guilty as anyone else, having written about how we should handle a Hillary Clinton presidency. Finally, we assumed it was time to move on to other issues, with the AHCA dead in the House without a vote in March. Now we have a last chance to prevent this atrocity from becoming law. We must pressure Senators of both parties to craft a much better, and substantially different bill. But our job does not end there. We must then make sure that the House and Senate can not reconcile the two and pass anything that even remotely resembles the AHCA. We have the majority of the American people on our side, despite the result last November. But, as Peter Parker discovered, we have a power, and with it the responsibility to use it for the greater good. Like him, we must not walk away again until the job is done.

My song choice this week may seem to have nothing to do with this post. But Luka is about what happens when someone misuses the power they have over another person. I always interpreted the song as being about a woman, but the video suggests that Luka is a child. Either way, I am calling out Trump and the House Republicans for abusive behavior towards the American people, and I stand by that:

Monday, May 1, 2017

A Toxic Environment

I wish Donald Trump, Scott Pruitt, and Interior Secretary Ryan Zinke could be made to take a hike on one of the trails near my house, through the woods of central New Jersey, with a guide to help them understand what they are seeing. In the air, they might observe a large bird with a mostly black body, but having beautiful white markings on the undersides of its wings. They might also come upon young holly bushes growing in the wild. I go hiking with a good friend who serves as such a guide. He has explained to me that the bird is the black vulture, a species that has not been known to range this far north until just recently. Likewise, the holly bushes grow very well here when planted on people’s lawns, but they only just become viable in the wild. It is one thing to blame a string of warm days in March on climate change, but it is observations of changing ranges of plants and animals that really make the case. Anyone can observe these changes if you know what you are seeing. Once you confirm with your own eyes that climate change is real, there is a large body of research to draw upon to explain why it is happening.

Of course, taking Trump and his cohorts on such a hike might not be enough to change the disastrous course they have set for environmental policy. The closest thing Donald Trump has to an ideology is a pathological need to undo any policy that was implemented by Barack Obama. An overview of this administration’s actions on the environment shows this quite clearly. In addition, there is Trump’s bizarre obsession with “saving” the coal industry through deregulation. So the mining industry now has permission again to release their toxic waste into our waterways, poisoning both wildlife and human beings unfortunate enough to live downstream. Trump has also signed off on measures to allow oil drilling in formerly protected forests and fisheries.

There is, unfortunately, very little that we as concerned citizens can do to stop this. Here is where Trump’s use of executive orders has been most effective. Some can be challenged in court, but the president has a great deal of latitude regarding the environment, and many of Trump’s actions here simply reversing executive orders that were signed by Obama. So, since no legislation is needed, protests at town halls of moderate Republicans will not win this fight. Trump has also practiced action by neglect here. Simply by refusing to appoint the necessary staff, Trump has hampered the ability of the federal government to enforce even those regulations that he can not eliminate.

One cause for optimism comes from a source that certainly surprised me: Michael Bloomberg. Bloomberg has a new book out, written with former Sierra Club chairman Carl Pope. The book is a reminder that the words conservative and conservation have the same root. A conservative, in the old meaning of the word from before the hostile takeover of the Republican Party by the Tea Party, used to be someone we could count on as an ally on environmental issues. Indeed, Bloomberg and Pope lay out the capitalist case for sound environmental policy. Coal is dying for market driven reasons, not because of overregulation. Bloomberg and Pope make the case that stewardship of the environment is not only good for the planet but also smart business. Bloomberg was the mayor on New York City for two terms, so it is not surprising that he sees solutions as coming from cities, especially at a time when the federal government is so misguided about the environment. To be fair, I have read about the book, but I have not read it yet. But it seems to me that these are arguments that can only help our cause. As activists, we should be making arguments that help us attract the widest possible backing. We stand in opposition to a president whose positions are far from the mainstream. On the environment, as on so much else, we need to draw support from everywhere, and press the advantage we have. The majority of Americans agree with us. We don’t even need to take them into the woods to help them see it.

For my musical selection, a bit of irony felt appropriate: