Archive for the ‘economy’ category

Head To Tail Thinking, Oops, And Wrong Again

August 3, 2017

President Trump joined Senators Cotton and Perdue at the White House in announcing his support for a change in US immigration law. The proposed legislation would sharply reduce the total number of immigrants allowed to enter each year and completely alter the mix of immigrants. The President boasted that this plan would dramatically improve US economic competitiveness and quickly put even more countries in the US rear view mirror. Hmmm.

The essence of the proposed legislation was to reduce the total number of immigrants, and to select immigrants based upon economic, educational, and sought after skills (a meritocratic policy). Current US immigration policy favors family and friends of current immigrants without regard to any special qualifications. So what’s wrong with this approach since most of the rest of modern wealthy countries use a system similar to what Senator Cotton and Perdue have suggested?

The President offered a clue when he said the lucky immigrants would have to already speak english. Of course there is nothing wrong with welcoming immigrants who speak english but farm laborers and hospitality workers (maids, janitorial, etc) most often speak Spanish or some Eastern European tongue.  The President was more interested in looking to bolster his white only, english only view of America.

That is not what is really wrong with this proposal. Rather, it is the total number of immigrants (guest workers) is set far below what the economy needs. While trying to bump up programmers and other technical employees is a good idea, shorting the manpower needed to harvest crops or process foods or keep hotels clean will not lead to a desired outcome.

The absence of any mention of “comprehensive immigration reform” confirms that the President is far from serious about immigration. But the President is serious about using whatever dog whistles he can find which communicate to his political base the same message, “I care about you and the other side doesn’t”.

Dog whistles are effective political tools. These euphemisms and half baked policy statements mislead the base and set the stage for a crashing disappointment when these policies come home to roost.

Repeal, Not Replace, Hmmm

July 18, 2017

The Senate Republican effort to pass “repeal and replace” legislation which would be the successor to Obamacare, ended yesterday with whimper. Pundits have said there were as many as 15 Republican Senators who would have voted against the bill but until yesterday there were only two announced. Following a meeting with President Trump, two more Senators (Jerry Moran and Mike Lee) announced they could not support the Republican Senate bill.

End of story?

Not quite. Senate Leader Mitch McConnell announced he would offer a “repeal” only alternative and expected Republican Senators to pass this bill as they had in 2015. The “repeal” only option has a two year delayed implementation ostensibly designed to allow time for the Senate to find a compromise which could pass.

Does unbelievable come to mind?

What does anyone think is so hard about passing a repeal only bill? Admittedly, passing a replace bill does bring into focus what various factions within the Republican Party and the public think about healthcare. Since there is no consensus (without paying a price at the polls), Republicans will have a tough time finding common replacement ground.

Hmmm.  So why try repeal only?

The fundamental and unstated issue, the elephant in the room so to speak, is whether Republicans think healthcare is a right and they are searching for the most cost effective way to deliver, or whether Republicans see healthcare as a privilege and are seeking the least costly manner to provide minimal coverage and still be able to boast to voters that they are for healthcare.

Hmmm.

An old adage teaches when you are stuck in a hole, the first rule is stop digging.

Republicans are showing in bright, red, white and blue colors that as a Party they are not aligned on principles. Even more so, Republicans are showing that both the President and the Republican controlled Congress, while able to be verbally effusive, are still unfit to lead.

Close To Greatness

July 14, 2017

Republicans are running the ship. The GOP controls the Presidency and both Houses of Congress. What more could any party want if they wished to leave their imprint upon America. Each day, however, Americans are observing a President and a Congress aim at greatness but suddenly swerve away, missing the mark by a mile.

  • The “Healthcare” train went off the tracks quickly. Instead of focusing on premium and drug costs, the GOP struck up the “repeal and replace” band only to find they possessed no consensus on “replace”. The one attempt at attacking cost was instead diverted to bait and switch. The GOP offered to sell “stripped down” policies, as if they were Obamacare quality, for lower price. That was their version of cost reduction. Would you buy a car with no passenger or back seat (just the open space) just because the price was slightly lower?
  • Even more obvious as a ripe target is the cost of prescription drugs. What other country in the world makes drugs and sells these patented compounds in other countries for less than they sell the exact same materials in the US? The GOP could have seemed genuinely interested in the well being of Americans had they not taken the “repeal and replace” course.
  • The “Tax Reform” train, on a different track, seems destine for a similar miss. Anyone who prepares their own taxes knows full well how complicated a reasonably straight forward process can be. But “tax reform” is political code for “tax cuts”. And if you are wondering how much you might realize, don’t waste your time, the GOP tax cuts are about those who don’t need them, the wealthy.
  • Infrastructure investment, like building roads, bridges, harbors, and airports, is a time proven method to improve productivity by modernizing shared means necessary for economic growth (read jobs). Infrastructure investment is also a popular method to just put people to work regardless of whether the work produces any economic return. Under certain circumstances, even just employing people can be a good thing.
  • Not, apparently, with this Administration. Infrastructure investment means privatization and transferring more wealth from tax payers to private investors.
  • Along these same lines, the growing crisis around student loan debt is viewed as another opportunity to use private enterprises to assist the financial needs of students seeking higher education… at a substantial profit.
  • If training skills and higher education are needed to make workers more employable and more productive, then why would government add a layer of profit from loan administrators? Why would government treat student loans differently in bankruptcy cases than if someone bought too much house or too many cars?

Americans may have been frustrated with these situations in 2016, and decided Hillary Clinton and the Democrats were not the route to fixing them, hence Donald Trump became the 4 5th President and the Republican Party got control of both Houses of Congress. With seven months of this new Administration, Americans instead are seeing “greatness” by-passed in favor of wealth transfer from the average American to the wealthiest Americans. Hmmm.

The Smell Of Coffee

July 5, 2017

Six months does not make a year, and a year does not make a four year term. President Trump (and his advisors), however, are waking up to the reality of governing. Much of President Trump campaign’s boastful rhetoric have already been exposed as misguided myths. Too little time has passed to fairly pass judgement upon what President Trump has done or what he has not. A quick look is not encouraging, however.  Maybe his staff and advisors are saying “pass the coffer”.

On the domestic front, President Trump has continuously blustered about both creating and retaining American jobs. There is little evidence of either, and as important, his budget proposals have circled thousands of current Federal jobs for elimination. I wonder whether the President is using “new math”?

And just in case the Administration has not been looking, internet giants such as Amazon have been marching forward with “job eliminating” new efficiencies. If Trump’s advisors are honest with themselves they should marvel at how resilient the economy they inherited really was.

The Obamacare “repeal and replace” has not turned out to be a “walk in the park”, done, and mark that one off the list type of initiative. Funny but most Americans want the benefits of Obamacare. Further, once fact checked, Republican criticisms melt under a healthy dose of facts and transparency. And best of all, voters have seen what was always there. Republicans are only interested in the tax cut which will accrue for the wealthy. The specific American Health Care Act benefits, if enacted, will be the bare minimum necessary to pass the AHCA.

The campaign’s vitriolic immigration slogans have also been shot full of holes. The top priority Mexican border wall has gone no where after just about everyone involved has declined to endorse the efficacy of addition fencing. Congress has twice chosen not to appropriate money. And, more telling is that there are no indications that illegal immigration has increased.   Even more telling is that business leaders are calling for more temporary labor since they cannot find enough American citizens to fill jobs ranging from technology to agriculture to domestic occupations.

Foreign affairs, probably, best characterizes the Trump Administration ineptness. Trump’s shoot from the hip style has proven to be grossly ineffective. Foreign leaders who possess much less power (ships, soldiers, and planes), have learned to survive employing long term strategies and short term diplomacy. Countries such as Germany, France, Japan, China, and India have over the years cleverly closed large parts of their economies to American companies. These leaders are not going to concede these advantages to President Trump’s taunts and threats.

The President’s decision to withdraw from the TPP and the Paris Climate Accord, both actions were designed to appeal to Trump supporters domestically, simply convinced leaders around the world to say little, work together, and forget about the US until it regains its senses.

His claims of “bombing the S**t out of ISIS and quickly ending the conflict has been shown bogus, but what will he do with what follows ISIS? In Afghanistan, the Trump Administration appears on the verge of increasing troop strength with no known strategy for ending the conflict.

North Korea was to have melted away after President Trump became “buddy-buddy” with China’s President Xi. Today, after North Korea demonstrated ICBM capability President Trump looks to more people, simply a king with no clothes.

There is, of course, plenty of time for future world events to prove President Trump’s blustering prescient.  I wonder whether his staff will up their coffee intake in order to get a real grip on reality?

A Big Fat Nothing Sandwich

July 4, 2017

On this “Independence Day” holiday, Americans are taking stock of their blessings. Through the years, other Americans have sacrificed much, often their lives, in order to defend the liberties we too often take for granted. This year, Americans do not have to rely upon memories of past valor to appreciate the deeds of past generations. Instead, we can open our eyes and witness a President Trump and Republican Party’s attack on what has made America Great.

The President ran on the campaign promise to Make America Great Again, and most Republicans ran on the idea of “taking back their freedom”. President Trump’s slogan pre-supposes Americans agree that America has slipped or that Donald Trump’s vision is greater than our past.   The Republican Party’s charge of taking back their freedoms similarly supposes that whatever constitutes a “freedom” was theirs to take back. It might be more appropriate to say “take the average person’s freedom and give it to the wealthy”.

The Trump White House’s first six months have marked a bazaar chapter in American history. President Trump’s advisors seem set upon the appearance of keeping campaign promises regardless of whether any of them are in the best interest of the average American.

  • Lower healthcare insurance costs sounds attractive but some 20+ million fellow Americans must lose their coverage while the top earners pocket a huge tax reduction.
  • The world is currently awash in oil. Yet, the President has moved to “drill, baby drill”, no matter what the cost. Could this policy be for the benefit of the average American, or maybe just for the fossil fuel industry barons who stand shoulder, wallets open, for Trump in 2020?
  • President Trump has not restricted himself to just domestic issues. His “bull in the china shop” approach to trade and international relations is poised to sell out most all Americans. Either his naivety or his incompetent has the US ready to begin trade wars on many fronts. In trade wars there are no winners, especially the average American consumer.
  • America is a land of immigrants as most Americans can realize if they research their family tree. Making immigrants the enemy is completely out of touch with our history, not to mention our current economic needs. Without a growing population (immigrants plus birthrate), GDP growth must be low or potentially even negative.
  • But by far the greatest danger facing Americans on this 4th of July is President Trump’s child-like assault upon free speech and the freedom of the press. The President’s endless streak of demonstrably false statements will have the effect of trivializing all public officials speech.  Meanwhile, President Trump’s invocation of “fake news”, while patently unprovable, never the less poisons his supporters thinking and increases the odds that real data and facts won’t interfere with their prejudges and false beliefs. History has shown that free speech and freedom of the press are the first casualties of a budding authoritarian regime.

President Trump demonstrates each day that our Country’s best days are behind us.

So, as Americans celebrate July 4th, and gather around the barbecue grill, the President is sending you “a big fat nothing sandwich”.

 

Democracy’s Message

June 20, 2017

When Donald Trump was elected President, the US democratic process spoke loudly. Americans had elected someone inexperienced, uninformed, and some said unqualified emotionally to become President by a narrow electoral college margin (Trump lost the popular vote by 3 million votes). What was democracy’s message?

American democracy approximates one man, one vote but it actually reflects the popular vote in each State times the number of House and Senate members apportioned to that State. Therefore it is possible to win the popular vote but lose in the electoral college. So is that why Donald Trump is President?

There’s more. Along with electing Donald Trump, voters returned the Republican Party to majorities in both the House and the Senate. And with these majorities, GOP leaders feel a mandate to roll back much of what constitutes “entitlements” and “excessive regulations”.

Republicans favor less healthcare coverage, less Medicaid spending, and have proposed large changes to Medicaid and even Social Security. On the regulatory front, Republicans are pro-fossil fuels, less regulations on banking and industry, and anti-labor. How can this type of negative, past looking policies appeal to a majority of Americans regardless of which State they reside in?

As usual, there is another way to see life. Republicans claim that best government policy is that which is originated closest to the people (State and local levels). Therefore by definition, healthcare, tax levying, and regulations should be done at the lowest government level which is practical.  Since the governing process is complicated, this simple explanation has appeal. Hmmm.

Traditionally, two key Republican Party segments have been the wealthy and business/banking leadership. Not surprisingly, lower taxes, more fossil fuels, more dependence upon healthcare insurance companies, and anti-labor policies directly benefit these groups. But strangely Republican policies put far more regular people at risk. So, once again, how did American democracy elected a Republican majority and a President of questionable ability?

Hmmm.

  • Could there have been too many litmus issues? Like is a woman’s right to choose, or the protection of individual rights of other Americans regardless of sex, gender preference, or gender identity.  Are these considerations more important than healthcare, a progressive tax code, or reasonable controls (checks and balances) on banking and industry?
  • Could it be that many Americans choose to believe what their elected officials tell them and do not fact check their assertions?
  • Could it be that too many Americans want it all but do not want to do the hard work of paying for what they receive?

Democrats lost the 2016 election mainly because they could not, and would not tell the voter what the voter needed to hear. Democrats equivocated on the big issues and pander on the social issues.

And by the narrowest of majorities, Americans have gotten what democracy delivers, this time an incompetent President who harbors no agenda, a Congress with a shameful agenda currently split along serious fault lines but teetering on choosing the darkest options, presenting the average America with no reasonable outlook for good jobs, more discretionary income, or hopes for a secure future.

Democrats need to wake up. Rather than stand by and watch Republicans promise the moon and deliver dirt, Democrats need to tell voters what is realistic to expect and why Americans can expect a Democrat to deliver.  That was democracy’s message in the 2016 election.

The French Message

April 24, 2017

Yesterday France held the first step in electing its next President. In the French system all candidates run in round 1 and if one candidate receives more that 50% of the votes, that person becomes President. If not there is a round 2 between the two top finishers. The results were: the top finisher Emmanuel Macron, about 24% and Marine Le Pen, about 21%. Said differently, a centrist, not aligned with either of the two major parties and a far right (formerly fringe) candidate will meet in the run-off.

Macron, is a new comer who has never held a major elected position, garnered more votes than all the other 10 candidates. Early pundit predictions say Macron should win the run-off and become France’s next President. Le Pen, however, has been attempting to steer her far right party back towards the middle and may take advantage of unexpected events over the next month.

So what should Americans take as the message from this election?

For France, jobs and border security were key concerns of the electorate. As in America, jobs are a spotty issue. For those unemployed, it is a big deal while those with jobs don’t see the urgency.

Le Pen cites globalism (France First) as the unemployment problem’s root. For Le Pen the answer is leaving the EU and enacting protectionist measures. Macron, on the other hand, sees the world as global and that France must become more competitive in order to lower unemployment.

Border security is another matter. Le Pen used this term to explicitly call for restriction on Muslims including deportation of French Muslim citizens (two passport holders) under certain situations. Le Pen also paints these mainly North African Muslim immigrants as job takers and social services sponges. Macron is relatively silent on this issue reflecting the majority of French citizens (live and let live) attitudes.

France, population-wise is a bi-modal country with one large, densely populated city (Paris) and all the rest. Paris which most tourist flock to is also the center of banking and business. The rest of France is mainly agrarian and in certain cities home for large factories (like auto and air industries).

France has a strong socialist history featuring today the 35 hour work week and a highly developed set of regulations around work rules (pay, benefits, transfer, lay-offs, and firing). In short, it is easier (and often less costly) for a French company to not hire when demand increases. Consequently, even when times are good, one should expect less hiring in France.  The French social contract is well appreciated by French citizens and proposals to change it present a large challenge.

Blaming the EU misses entirely the point and returning France to the French franc will only acerbate the economic situation (where will investment come from?) and open the door for economic policies convenient to the ruling party but ruinous to the country.

So what are the messages relevant to the US?

  • Muslim baiting is not a sure winner. North Africans and other Muslims have had a difficult time fitting into French society.  They look and act differently than the traditional French population. It is true that unemployment and economic distress are higher amongst these Muslim groups but connecting these residents to the overall French malaise is not self evident. (Hmmm, do you think undocumented US residents from Mexico have anything to do with the employment rate in the coal industry?)
  • Jobs is a complicated subject. The idea that closing borders will increase employment is a tough sell (what about exports or reprisals from other countries?). Proposals to increase specific sectors present risk to other sectors. French citizens realize this. (Hmmm, do you think rhetoric will return jobs to the coal mining industry, or tax cuts for the wealthy will translate into lower unemployment?)
  • Voters lack confidence in their legislators. The rejection of the left and right traditional national parties confirms the lack of confidence that traditional leaders can improve the overall French life. (What do Americans think of a Congress which has voted almost 50 times to repeal Obamacare and cannot agree now on what to replace Obamacare with, even though Republicans have control of both houses of Congress and the Presidency?)

One must be careful to not read too much into the French first round election results. French voters have traditionally been volatile people living amongst general apathy. At this point, the French seem to have acted prudently.

Vive La France.