Trump's Tax Cuts Add $18,600 in Debt for each Taxpayer per Year

A social media post comparing the Biden plan with the Trump tax cuts notes a lot of middle income families paid somewhat less under the Trump plan compared to the Obama years.  I presume the goal of the comparison is to help in figuring out for whom to vote. The posting computed how much taxes a regular family would pay over a couple years before and after the Trump tax cuts. 

The post neglected to consider the National debt. Considering the National Debt exposes how the Trump tax cuts were crassly aimed at buying votes now with total disregard for future generations.  

The bottom line:  For each year the Trump Tax cuts have been in effect $18,600 in debt has been added per taxpayer.  Here is the data (and a website to help with your own computations - don't take my word for it).

In 2017 (the latest year for which the internet has data) around 144 million people filed Federal Income tax returns.  If you divide the National Debt by the total number of taxpayers here is what you get. 

The current National debt is approaching $27 Trillion.  (https://www.usdebtclock.org/ ).  When the Trump Tax cuts were enacted in 2017 the debt was $20 trillion.  At $20 Trillion the share of the debt for each of the 144 million taxpayers was about $158,000.  With the debt currently at $27 trillion each taxpayers share of the debt has increased to about $215,000.

So in the three years the Trump tax cuts have added $56,000  to each taxpayers share of the debt, about $18,600 per year, vastly more than the short term tax savings realized by any hypothetical middle income taxpaying family.  

This isn't just about Donald Trump, he is just playing out of the Republican party playbook.  Here are some historical facts:  

Between 1933 and 1981 the wealthiest taxpayers paid an average of 70% tax on that portion of their yearly income that was far beyond what the average taxpayer made.  In those years GDP growth averaged nearly 3% per year, and in 1981 the National Debt was the same as it was in 1933 - no net growth, even after funding WW II, the Korean War and the Vietnam War and sending folks to the Moon.  This period also saw middle class incomes peak in the decade before Reagan.  

In 1981 when Ronald Reagan became President the National debt stood at about 30% of GDP.  Keeping taxes low on the wealthy was a top priority for Reagan and every Republican since, as Republican's have dominated Congress and government policy since Reagan.  The National debt has increased every year while GDP growth has been mediocre and middle class buying power has deteriorated. 

The net result is since Reagan the National Debt, as a percentage of GDP, has grown faster than GDP.  As a country we have gone backwards in economic development. 

Republican tax cuts for the wealthy (trickle down economics) are an abject failure.  Globalization hid the extent of the failure, the shrinking wealth of the middle class in the United States was offset by big corporations selling stuff to people all over the world so GDP was at least mediocre.  Wall Street did great, Main Street did badly.  

Forget Donald Trump and all his...quirks.  To get this country back on a sustainable fiscal path voters need to realize the problem has been and is Republican economics.

P.S. - Don't be confused by folks talking about a lower National Debt figures.  About 20 years ago Republicans who wanted to finance more tax cuts borrowed money from the Social Security Trust Fund.  The debt to the Social Security Trust Fund is often excluded (since it is the Fed owing money to the Feds) and only debt owed to the rest of the world is counted as the "National Debt".  Ironic in that the Social Security Trust fund is working folks retirement money - by borrowing from the Social Security Trust Fund Republicans managed to put workers on the hook for paying the interest on their own retirement funds.

Will the Protests Help or Hurt the Racial Justice Cause?

Been engaged in a long discussion on Facebook with various members of younger generation who basically excuse all the violence over George Floyds death for various historical and emotional reasons.  I tried to make the point if they want to make progress on racial justice they have to distinguish between non-violent protest and violent protest.  Didn't feel like I made much progress so decided to do some research.

Since the 2014 events in Ferguson Missouri seemed to offer a recent similar sequence of events, I decided to see what happened in the 2016 Presidential election.  Interestingly, in an election that saw very low voter turnout in many states, in Missouri the turnout was unusually high, around 70%.

Then the question becomes who did the Ferguson events motivate to vote.

In the 2016 election in Missouri Hillary Clinton got the lowest vote percentage (just under 38%) for a Democrat since 1972.   Donald Trump got 56.4%.

It seems to me to suggest that the outrage at the violence sent more people to the polls than outrage at the original shooting.  

Be happy if someone can find some other statistics to explain this result. 

Why Are Republicans so Prone to Conspiracy Theories?

During Obama's era there were always lots of conspiracy theories floating about, like the one that Obama was born in Africa that Trump promoted for years.  But it used to be the conspiracy theories came from outside government.  Since Donald Trump arrived in the White House the conspiracy theories seem to often begin in the White House.

I ask myself - why are Republicans currently so prone to conspiracy theories.  Perhaps some of it is just calculated political expediency - such as the theory Michael Flynn was somehow set up by the Obama administration working in collusion with the FBI.

But then I started wondering if it could be because a some Republicans think that in ideological battles the ends justify means.  So they cut corners and cheat to win.  And since they do it they suspect other people must also be doing it - hence they always look for hidden conspiracies.

That led me to a really interesting wikipedia website that lists all the federal officers convicted of crimes back through history:

https://en.wikipedia.org/wiki/List_of_American_federal_politicians_convicted_of_crimes

I did some computations starting from 2009. 

Six of the folks listed on the Wikipedia list I classified as non-political crimes so did not include in the below computation - drugs or sex/relationship items.  They include 1 Independant, 1 Democrat and 4 Republicans - most the Republicans were Judges.

During the Obama years members of Congress convicted of politically related crimes were pretty evenly split, 5 Republicans and 4 Democrats.  During the Trump years the only listed Democrat convicted is, ironically, Michael Flynn.  Three Republican members of Congress have been convicted, but no Democrats.  (As a passing note of interest we also now have another Republican member of Congress under investigation for insider trading for allegedly using information from Congressional hearings to decide to sell all his stock right before the crash.)

Including all the convictions on the list we have 1 Independent, 7 Democrats and 10 Republicans.

I am certainly not arguing this proves my theory, just throwing it out there because is interesting.  Particularly that Michael Flynn was evidently a registered Democrat?

Climate Change Hysterics and Deniers -Who to Support

The scientific notion burning of fossil fuels is accelerating global temperatures at an extraordinary rate that will cause massive disruption in our climate and life on this earth is, even to my unscientific mind, hugely complicated.  Some are absolutely convinced the theory is true, others are equally convinced it is not.  Our vote will determine which direction policy proceeds.

Who are we normal folk to believe as we decide how to vote?  

Is Burning Fossil Fuels Causing Unprecedented Global Warming?

The fact that the majority of the scientific establishment supports the theory burning fossil fuels is contributing CO2 to the atmosphere at a rate that will change the climate rapidly is compelling.  But history has demonstrated the scientific establishment sometimes is prone to groupthink that hinders advancing knowledge.  You become a member of the establishment by building strong credentials, and often building strong credentials may be accomplished by adopting the theories of your mentors rather than challenging them.  So we cannot blindly accept majority scientific views.

On the other hand the news reports of polar ice caps rapidly disintegrating, small pacific islands preparing to move their entire populations away because of rising sea levels, and New York city subways being filled with water after Hurricane Sandy, all seem consistent with the theory.

But the "Climate Deniers", folks who poo poo the theory, point out the earths climate has always been changing, getting warmer, then colder.   A true fact.  They argue what is happening is simply a natural process unrelated to burning fossil fuels.

So how do I make a decision if choosing for vote for one position or the other?  

This problem is too complex to confidently predict the outcome.  It would seem the best course is to be conservative.  Look at the possible outcomes and choose the least catastrophic if we pursue the wrong course.

What happens if the climate deniers who poo poo the notion burning fossil fuels is overheating the planet, win the political argument so we continue relying on fossil fuels for energy?   If down the road it becomes obvious the climate deniers were wrong the planet will be much hotter, the sea levels will have risen more rapidly, the climate in different parts of the planet will have changed to a degree it causes massive population dislocation and could undermine food production but the process will be so accelerated we will not be able to turn it around and change direction.

What happens if the folks who believe we need to stop overheating the planet win the argument and in the end are wrong?  We will end up with a climate much more similar to what currently exist.  We will pay more for energy in the meantime, and will need to be pretty clever about finding energy sources to replace fossil fuels.  It will be an economic inconvenience, but it will reduce air pollution worldwide.  It may slow development in the poorest countries for some period of time, but it may not as the poorest countries are finding ways to bypass old technology with new technology.  It will probably not be a planet wide disaster.

Climate change is a vastly complex topic, but politics has turned it into a binary choice   The world is not binary - both sides are making educated guesses.  The consequences of being wrong seem much more dire if we chose the climate denier approach. We should be conservative and avoid the possibility of a more catastrophic outcome. 




       

The "Deep State" - Reminds Me of a Scary Story That You Tell Around the Campfire.

You never hear Democrats talking about the "Deep State."  It is always Republicans. I was thinking about how odd that is given the political history of our country the last 40 years.

Facts:

Republicans have controlled both the Presidency and Congress 8 years, Democrats 4.

We have had Republican Presidents for 24 years compared to 16 years of Democratic Presidents.

Republicans have controlled both houses of Congress 18 years compared to 10 years by Democrats.

Republican Presidents have worked with 1 house of Congress controlled by Republicans 6 years.  Democratic Presidents have worked with 1 house of Congress controlled by Democrats 4 years .

By every measure Republicans have dominated government for the last 40 years.  It seems if a deep state exists I have to conclude they have either created it or have been incompetent to deal with it. 

Here is a link to an earlier blog that speculated about why Republicans speak ominously of the "deep state" so often.

https://motrvoter.blogspot.com/2019/11/the-deep-state.html

What Should US Financial Policies Be After Covid-19

Since the US began reshaping the tax law under Ronald Reagan to accord with the fantasy of trickle down economics the increase in our National Debt has exceeded the increase in economic growth.  Now we have a pandemic that has exposed virtually the entire US corporate sector as financially naked.  They have no financial reserves.  They have been too busy borrowing at cheap rates, often simply to fund stock buy-backs or executive bonuses.  Something like 40% of the bank bail out after the 2008 economic collapse ended up going to stock buy-backs and executive bonuses.

Now we are piling on trillions of dollars of  Federal Government debt to hand out money to every kind of business and virtually every consumer to combat the limitations imposed by the Covid-19 virus.  Our fantasy economic policies in the past make this bail out essential to avoid another Great Depression.  

But once Covid-19 is gone and we can get back to some semblance of economic normalcy we need to make a serious course correction in our financial theories.

For decades tax policy, and the policies of the Federal Reserve, have encouraged rampant incursion of debt, mosty to funnel money into the hands of people that don't need to consume much while stripping it away from people who spend almost every dollar on consumption.  

Every time the economy so much as hiccup's the Federal reserve has cut interest rates.  Historically low interest rates have become the norm.

We have taxed Capital Gains at lower rates than what working folks pay so we have cultivated a whole generation who learned the road to success was in trading assets back and forth instead of producing goods or services.  They have magnified their profits by borrowing because interest rates are so low that the profits they can make after paying Capital gains taxes can still make them wealthy, and their mutual overconfidence (the Fed will always bail us out) made them discount the fact that borrowing can also magnify losses.

Regular folks who spend a large part of their income on consumption pay the same or higher tax rate as people who make more in a year than they could spend in a lifetime.

Will Covid-19 be a catalyst for smarter economic policy making?  Of just lead to more of the same, or a pendulum swing back to policies that impoverish everyone but the heads of State?

The Myth of Voter Fraud?

Wisconsin got caught in the unfolding Corona Virus shut-downs that have turned the entire country inside out, so wanted to allow people more voting options to adapt to stay at home orders, absentee ballots being late due to government shutdowns from stay at home orders and the other Covid issues that have turned normal routines upside down.  The Republican dominated legislature challenged the idea in court and won, alleging it would create opportunities for voter fraud.  So all the voters in Milwaukee, a city that normally has about 175 polling places, had to vote in 5 polling locations.  That's the stuff of comic satire, not reality.

The studies I find on the internet that are not commissioned by partisan Republican think tanks suggest that voter fraud is vanishingly rare, although clerical errors by bureacrats are more common.  One comprehensive look at voter fraud found that fraud occurs in about .00003 to .00025 percent of the cases.  Another study found 31 cases of confirmed fraud in 1 Billion ballots cast.  Your chances of getting struck by lightening are higher than the chance of voter fraud occuring.

What tips me toward being pretty confident this cure is far worse than the disease is that the Republican leaning think tanks such as the Heritage foundation focus on anecdotal anecdotal instances of fraud, and then suggest that since they only found these few cases there must be way more.  They make no attempt to figure out if fraud actually changes elections, they just raise suspicions.

Also, curiously I couldn't find much of anything on the internet suggesting the bureacrats who handle voting believe fraud is a big problem, even bureacrats in deeply Red States.

Based on the data I have seen it seems to me fraud is so vanishingly rare making it harder to vote benefits no one but a minority party who wants to depress the vote.

Claims of fraud are pretty common after elections - poor losers sure that voters couldn't have picked another candidate over them. Verified fraud is very rare.  But the President of this country and the Republican party see voter fraud as such a big issue that piles of bills the House sent to the Senate sit unvoted on in the Senate while they rail about voter fraud.

I just wish those Republicans who actually value Democracy would step up and object to their parties blatent win at all costs strategy's.  Republicans have a majority on the Supreme Court and probably will have for some time.  They can take run to the Supreme Court if there are real instances of fraud affecting Republicans and be assured of winning.  The don't need to cheat to win.

Trump, Putin and Avoiding Reponsibility

I have been a little baffled about why President Trump seems so determined to make States the primary responsible parties for responding to Covid 19.  All the experts, and common sense, say it makes much more sense to have a coordinated response from the Federal Government that has far more resources that the States. 

Then a news item from the Economist this morning noted that as the cash-starved hospitals across Russia braced for the exponential growth of Covid cases, Mr Putin transferred responsibility for dealing with the epidemic to the regions, which have been starved of resources for much of Putin's presidency.

Of course Trump is pointing the finger the States.  Effectively managing the Covid 19 is not Trump's (or Putin's) top priority.  Top priority is minimizing the damage from their policies that have crippled the response.

Put somebody else in charge so you can blame them.  

It will work for a lot of voters.  It is probably the reason Trump actually experienced a bump in popularity after Covid 19 hit.  He is on TV every single day being comforting because that's what many voters see, not the obscure news stories chronicaling administration bumbling.  

He is seeking to win hearts so folks won't actually look at the facts when it comes time to assess who screwed up.  He will point at the States.  A lot of folks will buy it.  

Maybe not enough to save his Presidency since a lot of Red State governors are those complaining.  But it seems to be his best option for avoiding the fallout from his administrations documented bungling.

You have to give the man his due.  President Trump is an incompetent executive, but he is a master at stroking and reinforcing peoples emotional ideas about what they would like to be true.

Covid and the Sanctity of Life

One can't help but ponder the odd quirks in Conservative Christian views on the sanctity of life.

Many politicians who owe their political success to Conservative Christians, including President Trump and the Governer of Texas, have suggested we should not be allowing Covid 19 to seriously impact our economy.  After all Covid 19 mostly kills the weak and the old.  They should be willing to take the risk for the sake of the young and the healthy (those who make good workers).

These same politicians would usually deny those who are ill and old the right to choose to die comfortably, on the grounds life is sacred.  

They would also deny women the right to chose not to take on the burden of a child they don't feel they could handle, again on the grounds life is sacred, even though data suggests forcing a mother who is overwhelmed by the responsiibility to have the child will often end up with both the mother and child impoverished, prone to substance abuse and early and unpleasant death.

Yet when those Conservative Christian's wealth threatened it is just fine to let those weak and old people die to protect businesses and investments.  Life is not so sacred when it might impact their wealth (or for that matter their ability to enjoy a steak for dinner - only certain human lives are sacred, certainly not a cow).  It seems like life is sacred only when it doesn't affect their life choices.

Rather like the Conservative Christians in the South who convinced themselves for generations they were doing people a favor by enslaving them.

Makes no sense to me, but it clearly does to them.

Eliminating Capitalism - A Discussion Invitiation

If we want to eliminate capitalism what does that mean exactly?  To me Capitalism isn't a thing, it is a theory to explain human behavior.  The exact nature of Capitalism has varied from from culture to culture and even within cultures over time.  Capitalism in the United States was a lot different in the 1950's and 1960's from the Capitalism we have today.  So I would like to understand exactly what it is folks want to eliminate.  

First a couple caveats - I think government should regulate the private sector to prevent exploitation or excessive speculation.  I also absolutely think Government should manage healthcare.  Healthcare and the profit motive are fundementally incompatible.  

But beyond health care I have alot of questions about what folks anticipate if we eliminate Capitalism.  Here are some that spring to mind.

1.  If I want to start a business, can I do it?  Do I have to get government approval?

2.  If I want to get other people to invest to give me the capital to get the business up and running can I do it?  Or do I have to go to government to get funding?

3.  Will there be a stock market?  If not what becomes of all the money people have invested in the stock market?

4.  Will government decide who runs major industries?  Will Elon Musk still run Tesla?  Or will running Tesla become a poltical perk of some bureacrat who helps the adminstration get elected?

5.  Are there other industries besides health care government should manage?  

6.  With healthcare and other economic activities we decide government should manage, what should governments role be?   Micromanaging from top to bottom?  Or carrots and sticks (incentives and prohibitions) to guide organizations run by private citizens?

Developing a Corona Virus Cure

In the development of drugs to treat pandemics we are at the mercy of the private drug companies who have consistently demonstrated profits are more important the people.

Current news reports say the Federal government is going to pay enormous amounts to fund research to help Johnson and Johnson try to develop a Covid Virus cure.  Johnson and Johnson says it will be a "non-profit" venture during the pandemic.  My question is, who owns the patent after the pandemic is over?  I'm pretty sure it won't be the Federal Government.  When the next pandemic comes along will Johnson and Johnson use the knowledge and data they develop to negotiate the next big contract while the Federal Government stumbles along in the dark?

We saw the negative impact of profit driven medical research with the ventilator scam recently reported in the news.  The Federal government  paid a lot of money a decade or so ago to small ventilator company to develop an inexpensive and portable ventilator.  The company had delivered a couple of working prototypes. then the company got bought out by a bigger company who demanded more money - probably to cover the costs of them buying out the small company.  The Feds paid them more but still the big company evidently just pushed the project onto a back burner - industry insiders say they just wanted to kill a cheaper ventilator that would undermine their products.  Why didn't the Federal government sue for breach of contract?  Might relate to the fact we have an administration that believes the pursuit of money is sacred.  If that contract had been completed under contract we would have a lot more ventilators available today.

I'm no starry eyed believer in governments competence.  Bureacracy is always a problem in any big enterprise, particularly government.  But our model for drug development, and medical preparedness really needs an overhaul.  We are much too accomodating to private enterprises profit ambitions.

When the Federal Government hands out money to pursue a particular project, they should retain the rights to all the work product, including any patents involved, and enforce those rights.  It is not a novel concept, the private sector does that routinely.   

I'm sure the CEO's of big companies will say they would never agree to work under those circumstances.  I say fine.  There are a lot of bright, innovative people out there not working for giant multinationals.  The Federal Government should be developing a core medical technology competency to manage healthcare in this country, to outsource and manage development of new drugs and technology, by controlling the work product produced from the funds paid to hire research and development. 

Partisanship - Don't Become What You Despise

Democracy is fundementally rooted in compromise - it is the ability to protect what we perceive to be our own interest while acknowledging the validity of other interests.  It is seeking a win-win solution to legislative problems - where the solution probably doesn't give every viewpoint everything they want, but it strikes a balance that protects all interests as much as possible.

Our two party politics makes that sort of solution really hard.  Most voters are busy with their lives with little time for the intricacies of finding a public policy that serves all Americans.  Ambitious politicans find it much easier to cultivate votes by criticism.  If voters don't feel compelled to pay close attention a politican with no real understanding of the complexities of public policy who is aggressive with criticism will usually beat a politican who tries to speak truthfully about the complexities.

But even beyond the issues arising from incentives to aspiring politicians that run counter to good decision making, there are more basic issues that, if we do not all keep in mind, undermine by-partisan action.

We all have no problem accepting that people are vastly different physically.  There are tall people, not so tall people, stout people, skinny people, black people, white people, a wide variety of eye colors, hair colors.  We see it and experience it every day.

We have much more difficulty not falling into the trap of thinking that everybody's brain should work just like ours.

Our Brains Are As Different As Our Bodies:

We all have in our brains various levels of messenger chemicals - nuerotransmitters.  Each individuals mix of brain chemicals shapes their view of the world.

Science has not yet figured out how to study variations in the the chemical nature of the brain in living people.  Brain scans only detect gross electrical activity.  They cannot distinguish between different chemical messenger systems using the same nueral pathways.  However, science has known for over 100 years the amount of many nuerotransmitters in the brain fluctuate over the course of a day, the monthly moon cycle, a calender year.  We all know Melotonin. We buy Melotinin at the drug store to help us sleep.  Melotonin is high at midnight and low mid-day, low in Summer, high in Winter.  Some nuerotransmitter levels fluctuate in opposition to melotinin, others appear to run in cycles not directly related to melotonin.

At this point we can only speculate about the impact on belief differences in nuerotransmitter levels may lead to given sciences inability to directly study the impact of those fluctuations in a living brain.  But it seems almost self evident that, given how quickly a developing embryo's brain develops, the relative level of each particular nuerotransmitter at conception will have a strong influence on the balance between different nuerotransmitters systems in adulthood.

One of the brains messenger chemicals (Oxytocin) is linked to a community outlook, to balancing, or even choosing community over individual interests.  Animals that live in communties usually have way more Oxytocin than animals of the same species that live a solo existance. 

Another of the brains messenger chemicals, Vasopressin, the levels of which some evidence suggests seems to fluctuate in a cycle in opposition to Oxytocin - tends to make people more likely to be loners, to be focused on their own well-being. 

Sounds suspiciously like folks with more Oxytocin than Vasopressin are more inclined to be comfortable in the Democratic party, and folks that see the world from the Republican viewpoint are folks with more Vasopressin than Oxytocin.  Oddly this correlates with gender data.  Women generally have more Oxytocin and less Vasopressin and are more likely to be Democrats, men tend to have more Vasopressin than Oxytocin and are more likely to be Republicans.

We can only speculate at this point because science is woefully ignorant about the impact on our thinking of nuerotransmitter variation in living humans.  But the point to take away is we do not all think the same, and our differences are not because anyone knows some absolute truth, they stem from biological differences in our brains.

Avoiding Partisanship

Partisanship is rampant when one or both political parties make decisions based primarily on ideological notions rooted in the particular individuals emotional belief system, in turn rooted at least in part on their particular mix of nuerotransmitters, and dismiss facts that do not fit with their world view.

It seems to me that at the moment we are reaping the harvest of 40 years of Republican ideologically based problem solving that puts the individual above the community in all things.  We are now going through our second financial collapse in little over a decade.  In the 40 years of Republican ideological dominance growth in the National debt has outpaced economic growth.  

The rest of us need to keep our perspective.  We need to recognize that other people see the world differently through no fault of their own, they just have a different mix of brain chemicals.   We must laser focus on facts, not ideological notions and emotional outrage.  Having the pendulum swing far to the left is not in the long term interest of our country.  We need to bring it back to a balance that respects individual rights while recognizing the benefits and needs of community.

Buy Backs and Student Loans - We Can Do Better

The Stock Market reached all time highs a month or two ago.  Most of the increase over the last couple years hasn't been because investors thought corporations were a good investment. For years the stock market has been driven to new high after new high not by extra investor interest, but by corporations using their profits to buy back their own stock. 

Wall Street and CEO's promoted stock buy backs as a way to "add to shareholder value."   

Where is all that shareholder value now?  The only folks whose profit was not wiped out by the stock market crash were the CEO's who got paid more because of the increase in stock price, and Wall Street folks who collected trading fees for the transactions.  

Since 1996 Republicans have controlled both houses of Congress 14 years, Democrats 2.  Republicans have controlled Congress and economic policy ever since Ronald Reagan.  They sit by complacently and do nothing but encourage whatever Wall Street wants.  We are now in the midst of the second major economic collapse in the last 24 years, and for that period growth in the national debt has exceeded growth in the economy. 

Now the Fed wants to start buying bundled student loans to address the economic collapse.  What it will accomplish is protect all those loan sharks that buried students in unaffordable education debt, and Wall Street, who then bought the loans to bundle groups of loans into investment vehicles.

Its 2008 all over again.  In 2008 it was bundled mortgages from all those fly-bynight lenders who sold houses to people who couldn't afford them by pitiching it as a surefire investment that would increase in value.  Wall Street bought those mortgages and bundled them into investment vehicles to sell.  Waves of foreclosures caused the financial world to freeze up with fear over who was going to have to take the loss.

Voters need to figure out that Republican economic theories are stupidly simple - business - any way people can figure out to make a buck- is good, government is bad.  It is almost criminal complacency rooted in the idea if someone is making money by exploiting other peoples situational fears or difficulties - more power to them. 

Share this, don't just like it.  Republicans get away with their stupid ideas because voters generally don't understand markets - polls consistently say voters think Republicans are better at managing the economy.  

Education about how Republican economics actually plays out will insure a better future for our kids and grandkids.  

Bailouts, CEO Pay & Stock Buybacks

Many huge Corporations in this country are facing almost immediate bankruptcy as a result of the Corono virus.  Letting them go bankrupt would torpedo our economy for years, maybe decades.

But if these companies had been using their profits to build up a rainy day fund they wouldn't need goverment intervention.  Apple has enough cash stuck away to finance operations for something like three years.  The problem is so many companies have been using their profits for stock buybacks - going into the financial markets to buy their own stock - instead of funding an emergency operations fund.  

The airlines are the poster boys for this practice, 96% of their profits over the last decade went into buying back their own stock instead of socking money away for a rainy day.  But buy backs have been endemic across publicly traded corporations in almost all industries.

From an operational standpoint it makes no sense for a big company to buy its own stock back.  But it makes sense for enriching CEO's.  Part of CEO pay is tied to the companies stock price - so even though using corporate funds to buy the companies own stock makes the corporation a little poorer (although not on paper because it drives the stock price up briefly) it makes the CEO paycheck bigger.

From World War II up until 1980 CEO pay averaged about 20% higher than the pay of the average worker.  Since then CEO Pay has increased nearly 1000% percent while worker pay has increased 11%.  

This vast CEO pay increase has little relation to increasing the value of the corporations CEO's run.  Since 1980 CEO pay has grown 70% faster than the value of the corporations CEO's run.  The extraordinary rise in CEO pay is a direct result of corporate directors who set pay, and CEO's who appoint directors, effectively scratching each others backs to advance their own interestes rather than the corporations.   (see footnote 1)

The House Democrats want to link Corporate bail-outs to eliminating Corporate stock buybacks, and limiting CEO pay while the corporations are operating on government money.

Should be a no-brainer, but the Republican Senate and President believe business can do no wrong - their policies over the last 40 years created the CEO pay boom and the mediocre economy that has accompanied it - and the the exploding national debt that is about to go into warp speed debt accumulation with trillion dollar bail outs.

(Footnote 1) - “The CEO Pay Machine” by Steven Clifford, a former CEO.  Blue rider press/Penguin Random House LLC, published in 2017.

Making America Great Again - Virus Testing

At a press conference this morning the President was again disdainful of the media hysteria about the corona virus, and essentailly bragging he got tested although he didn't want to and didn't have the virus, and people should not worry about getting tested unless their Doctor tells them they need to.

This was wrong on so many levels.  

Three months into this Corona virus outbreak and the President of the United States still fails to comprehend that people can carry this virus around for long periods of time, spreading it to others, without showing symptoms.  He fails to understand that where test kits are scarce doctors don't want to test until they see symptoms, but that isn't because that is the best protocol - it is because we have an inability to test as many people as we should.  

He seems clueless about the fact many Americans don't have a personal doctor at their disposal at a moments notice, and maybe can't afford a personal consultation.  Like George Bush's moment of confusion at a supermarket counter it illuminates how out of touch our current President is from the life of everyday folk. 

He ignores the fact individual doctors can make mistakes and do frequently.  Given President Trump's history of surrounding himself with marginally competent yes men I can't help but wonder about the quality of his doctor's medical advice.  

The President consistently says what supports his ego and re-election prospects rather than what the country needs to hear.  

His ignorance is a dragging anchor on an effective response to the virus and is and will aggravate the gravity of the economic downturn into which we are sinking.

Bailout. Again.

Sunday the Fed cut it's interest rates down to near 0%.  They are buying Treasury bonds at a furious pace, and taking other steps to hand out money to banks and financial institutions. 

I don't quibble with these short term actions.  At a certain point when past decisions are threatening chaos, they have to address the chaos.   But the fed has become the enabler in chief for stupid economic policies.  

For nearly 40 years Republican tax and regulatory policies have favored speculation over production.  They use debt to pay government bills so they can cut taxes on the wealthy so our National debt has nearly tripled.  The result has been grossly excessive speculation fueled by cheap debt that is all but guaranteed by the Fed.  So rich folk sell assets back and forth for ever higher and higher prices even as worker incomes stagnated and our consumption base has been shrinking.  

It stems from the warped view of the world Republicans promote where business is the highest human value and all other considerations give way to supporting business.   When Republicans promoting that view have controlled the country we regularly plunge into recessions or depressions because Republicans believe folks pursuing their own greedy ambitions can do no wrong. 

In a free market people that don't have to bear losses for bad decisions don't learn to make better decisions.  Everytime there is an economic wobble in the last couple decades the fed steps in, so investors become complacent about sensible risk taking.  They take risks and rely on the Fed to bail them out.  What happened in 2008 and what is now happening is the Fed's constant interference in the market lets problems balloon out of control.  

The Fed would likely say their hands are tied - they can only aim at the targets Congress sets for them - maybe true but the fact they have never really complained about what is going on suggests they were pretty clueless - effectively they see no problem with an economy built on debt fueled speculation.

It is looking more and more like the Democrats may sweep up the Presidency and both houses of Congress this November.  Will they do any better?   Or, as with Bill Clinton and Barack Obama, just continue with a slightly more moderate version of Reaganomics? 

Simple Fact About Why We are Behind the 8 Ball On the Coronavirus

Here is a quote from the current issue of the economist examining why America is doing so poorly in responding to the Corono Virus.
( https://www.economist.com/united-states/2020/03/12/covid-19-is-spreading-rapidly-in-america-the-country-does-not-look-ready?utm_campaign=the-economist-today&utm_medium=newsletter&utm_source=salesforce-marketing-cloud&utm_term=2020-03-12&utm_content=article-link-1 )

"You can’t have surge capacity if you’ve already been cut to the bone,” says Scott Burris, director of the Centre of Public Health Law Research at Temple University. In 2010 the CDC budget was $12.7 bn in current dollars; today it is $8bn."

Donald Trumps current budget proposes further cuts to the CDC.  News reports quote Trumps Budget director as saying they were still looking for those cuts to the CDC as part of their budget.  https://www.salon.com/2020/03/12/trumps-budget-director-stands-firm-on-plan-to-cut-cdc-budget-by-15-percent/

Are Our Primary's Making Us More Partisan?

As the ongoing tally in the Washinton State Democratic Primary highlights, early voting by mail has thrown a wrench into primary voting.  Bernie Sanders and Joe Biden, the two remaining candidates, are splitting about 75% of the vote.  25% of the vote has been largely disenfranchised by voting for a candidate that subsequently dropped out of the race.

The same thing happened here in California.  

In 2016 the majority of Republicans did not support Donald Trump in the primary.  He got a consistent 30+%, yet he ended up the with the nomination because there were so many other candidates more moderate voices could not sort themselves out to support a single candidate, so Trump won enough primarys to lock up the nomination.

The current primary system on both the Republican and Democratic side favors ideologically pure candidates at the far ends of the political spectrum.  In large states where folks can vote by mail people vote days or even weeks before election day, often before candidates start dropping out.  The ideologically pure candidates have their following but more moderate candidates tend to be splitting votes with a number of other joderate candidates.

The Democratic and Republican party should use ranked choice voting in primaries.  That will make it more likely everyones vote will count even if some candidates drops out, and it probably would produce a more cooperative and less partisan politics.

Flash: Donald Trump Confirms Republican Plans to Kill Social Security

About a month ago I blogged about my perception that the reason Republicans have run up the National Debt from 30% of GDP to around $110% of GDP is because they want to use the debt to justify killing social security - on the basis we can't afford it.

https://motrvoter.blogspot.com/2020/02/will-social-security-survive-our_9.html

Yesterday President Trump proposed cuts in the Payroll Tax (which supports Social Security) as a mechanism to fight the current economic downturn. 

Wow.  How transparent.  Out of the hundreds of ways the President could inject a little cash into the pockets of consumers to give a little caffiene jolt to the economy, he thinks the best choice is to take money from the payroll tax that funds social security.

Cutting payroll taxes will provide a boost to the amount of some workers paychecks small enough that probably many will hardly notice.  It will do nothing for the folks sent home from work, or not working.  But it serves the super-rich desire to undermine the Social Security tax trust fund that pays for Social Security.  Somewhere between 30% to 40% of our National debt is already owed to the Social Security trust, borrowed by Congress to fund tax cuts for the wealthy.

President Trump must think working folks are stupid.

Are we?

Is A Good President a CEO? Or an Arbitrator?

Last night a friend described Joe Biden as an empty vessel.  It struck me immediately as an apt description, and along with it came a negative connotation I immediately linked to Joe Biden.

But as I think about it I realized maybe the negative connotation had more to do with the politics bequethed on us by ambition of politicans than what our founding fathers sought in our constitution.

Should we be looking for a President who is more like a CEO shaping the country to his/her vision?  Or an arbitrator who applies common sense to strike a balance between those committed to advancing particular ideas who are perhaps in too much of a hurry to implement their ideas to consider unintended consequences?

Certainly in reality a President needs to the capacity to wear both hats, so the question becomes one of which way a candidate might tilt.  Both views have their weaknesses.  

A president who is a committed advocate for a particular change will have a hard time not dismissing opposition rather than considering whether they have a good point.  I think of Viet-nam - Eisenhower, fundementally more of an arbitrator, limited our involvement in Viet-nam.  Kennedy, the idea man, the visionary, responded to the hyperbolic anti-communism of the time by pushing us too deep into the Vietnam to extract ourselves. 

An arbitrator on the other end may lean too far toward maintaining the status quo in the absence of overwhelming evidence. 

Our Constitution made Congress the body that makes law, not the President.  A powerful President sounded too much like it could evolve into a new King like the one they had just fought the Revolutionary War to get out from under.  George Washington was chosen as the first President because everybody respected him and he didn't advocate for any particular policy other than finding a way to preseve the new union.  Many Republican candidates in the 1800's who got elected routinely pledged to serve only one term and did step down at the end of the term.

To me there is no right answer.  But it is worth reminding ourselves as voters of the pluses and minuses of the two approaches to being President.  A President that can wear both hats is perhaps ideal.  But I do think Congress should be the initiator of change.  

At this time where we have a President who routinely fires anyone who questions what he thinks or says I would not be unhappy to see Bernie and Elizabeth remain in Congress to advocate for their positions and have a President perceived as more nuetral.

Will Democrats End Up Falling Back on Failed 19th Century Ideas?

Many of the Democratic Presidential candidates who seemed less ideological and more about solving problems are now out of the race.  Most of the remaining candidates are those stuck in the ideological battle between Capitalism and Socialism that bedeviled the 19th and 20th Centuries.

I like most of the policies Bernie, Elizabeth and Joe advocate.  But I believe, as James Carville famously said, "its the economy stupid."  If we choose a candidate who cannot stabilize and increase long term economic growth as they level the playing with all their other proposals, Democrats could cede control back to the folks that caused all the problems they want to fix.

Bernie seems the most worrying.  Elizabeth at least professes to be a Capitalist.  Joe seems to have no particular economic ideas that aren't broadly held by all the Democratic candidates. 

From his campaign rhetoric Bernie seems incapable of thinking beyond the brand of socialism that ignores incentivizeing production in a favor of top down regulation by supposedly wise government regulators.  That was all the rage in Scandanavia in the 1970's.  But in the end they have retained a basic Capitalist model.  They have more humane models of capitalism but they are based primarily on private ownership of business, the state has a stake in relatively few companies.  

One of Bernies signature economic issues, requiring companies to provide stock to employees, was proposed and rejected in Scanadanavian countries.  Bernie  (and Elizabeth) want to tax corporations, financial transactions and create special taxes on wealth, all ideas that raise money by making life hard on entreprenuership and production, or tax static wealth easily hidden or moved out of the country.  

Scandanavians tend to follow the model the US followed from the 1930's to 1980 or so - they impose high taxes of wealth coming out of business into peoples pockets, less on the business and static wealth.  Why does Bernie want to flirt with Socialism when his own party has a highly successful history of economic performance rooted in graduated income tax rates?   

But there is another factor that suuggests what works in Scandanavia may not work here.  Social science research suggests that small countries that are dominated by one ethnic group are happier and more willing to support government programs for general public welfare.  Since the wave of immigrants began washing up on Scandanavian shores the last couple years even Scandanavian versions of social democracies are fraying at the seams.

Probably no country in the world is such a hodge-podge of ethnic and religious groups as we are.  Add a large population of citizens whose ancestors endured generations of slavery as our Constitution looked the other way and we have the polar opposite of scandanavian society.  Is Bernie the kind of unifying figure that can bridge all those gaps?  

Can he move beyond his fundemental (apparent) belief that rich folks are bad and need to be taxed and ignored?  Those nutcases that work 16 hour days to try to make a bajillion dollars provide much of the energy that drives our economy.  Sure we need better rules, but we should develop rules that channel their energy, not distract or frustrate it.

Campaign Issues Dems Can Do Better On - Medicare For All

Medicare for all would be a vast improvement on our existing health care system.  I've been blogging about the insanity of Medical Care in our country for years. Here are two of the 14 or fifteen blogs on the topic:

https://motrvoter.blogspot.com/2010/02/economics-101-and-health-care.html\

https://motrvoter.blogspot.com/2011/09/americas-socialized-medicine-system.html

The big problem with Medicare for all is how do we get from where we are to where we need to go without creating serious political and economic problems.  The insurance part of the equation is a 24 billion dollar industry, the care part of the equation is a 90 billion dollar a year industry.  That is a 114 billion dollar chunk of our economy.

As Medicare for all has been presented by some of the candidates in this campaign suggests an overnight conversion, at least that is the impression the folks building their platforms around the issue leave.  Never a word of caution about what a difficult transition it will be.  

Millions of voters in this country owe their jobs and livelyhood to the for profit medical care industry, in addition millions of folks are perfectly happy with their existing health care arrangements.  Add that to the folks who buy into slogans about socialized medicine and you have a formidible stumbling block to success.  When you fire up your base by promising Medicare for all right now you are also firing up the folks that will be hurt by it.  Donald Trump probably owes his election to the mess that grew out of Obamacare (although kudo's to Obama for breaking the logjam to get us at least moving forward).  

Overpromising a radical change now could be a gift to Donald Trump and would certainly be a gift to any Republican running in 2024.  If you actually want to get it done in an efficient manner it has to be acknowledged as a long term goal of easing us from for-profit to Medicare for all.  The idea of allowing existing for profits to continue, but opening up Medicare to all to compete with existing for profits makes a lot more sense to me.  Better to underpromise and overdeliver.  

Campaign Issues Dems Can Do Better On - Capital Gains Taxes

Virtually every Democratic candidate advocates some increase in the Capital Gains Tax.  

Is just tinkering with the rules rich folk made that primarily  benefit themselves really the best we can do?  Is it so important for them to pad their wealth quicker we tolerate working folks paying often twice as much tax on their income?

I want to hear a candidate say "income is income, we are abolishing the special rate for Capital gain.  You can adjust your gain for inflation, but what is real gain is taxed just like any other income."

Background:  

A capital gain occurs anytime you buy an asset, then turn around and sell it at some later point and make a profit. 

When our income tax was enacted in 1913 it made no distinction between Capital Gains and other forms of income.  That changed in 1921 when Republicans had control of both houses of Congress and we had a Republlican President.  They competely revised the 1913 income tax law, dropping the top tax rate from 73% to 25%.  But they also created a special catagory for taxing capital gain, setting the rate a 15%.

The justitification for creating a special rate for Capital Gain was a fundemental difference between wages and capital gains.  Wages are paid for work right now.  But capital gains are gains accumulated over time. For example if I bought a farm 40 years ago for $300 and sell it today for $3000, that extra $2700 might be in part, or all, simply inflation.  When corrected for inflation there really is no income, I'm just getting back what I paid for it so I shouldn't be taxed.

The logical solution in 1923 would have been to create inflation tables so when you sell something you do a little math to figure out what percentage of the gain is inflation and then the rest would be treated like your other income.

But Congress didn't go that route.  Instead they created a seperate tax, with rates much lower than what folks pay on wages.  Often there has been two rates, one lower rate that applys when you hold the asset more than a year, and a higher rate when you flip it in under six months.

This was, in 1923. essentially one a companion gift to the wealthy to go along with dropping the top tax rate from 75% to 25%.  Now if there income just flowed to them through their accumulated wealth they only had to pay 15%.  

It was a real boon to Wall Street, it made speculative investment vastly more profitable.  I don't think it was an accident the 1929 stockmartket crash came along 6 years later.

In the intervening 90 or so years since the 1920's the Capital Gans tax rate has fluctuated, going down when Republican's are running the show, and going up when Democrats run the show.  But the disparity between taxes on wage income and taxes on Capital Gains has remained.  The Capital Gains tax rate has never been higher that 28%, and that was when the tax rate on wage income was over 70%.  

The low Capital Gains tax rate has played a big part in the boom and bust nature of the housing market and wall street over the last 30 years.

I've heard my whole life the low capital gains rate incentivizes investment.  

Seems to be baloney to me.  I sometimes trade stocks for myself.  When I make a profit and sell my stocks it's not incentivizing anybody to start some new enterprise.  It doesn't create new wealth, it simply reallocates a little bit of existing wealth.  In most circumstances its hard to distinguish from winning a bet when you are gambling.

In the last couple decades I've known a lot of smart people who stopped making things or offering services for things because they sit at home and trade stocks.  They might make more money if they were working, but because their income is capital gains they pay less taxes.  In my experience low capital gains rates often incentive productive people to divert their energy into speculation.

I believe we would have a stronger, fairer, more productive economy if we stopped incentivizing speculation with low capital gains taxes.  I would welcome any data folks have that contradicts my view.

Is it Delusional to Reject Money from Billionaires?

Gunpowder, tanks, airplanes all changed the rules of engagement in warfare.  Folks that didn't adapt got slaughtered.

In the same way Citizens United and the Internet have changed the rules of engagement in Presidential Elections.

It's not just billionaire Republicans Democrats need to keep up with, it is other countries around the world trying to influence our elections.   We rail against social media for not controlling false ads but setting the rules for censorship based on content is exactly what former Communist states do to create fake democracies.

The current uproar among Democrats about Michael Bloomberg, an extremely wealthy New Yorker is particularly ironic.  The single Democratic President who did the most for the Democratic party and folks at the lower end of the economic spectrum was FDR, another extremely wealth New Yorker.  FDR created a scheme of government that dominated for nearly 50 years, a period when we could win WW II, fight wars in Korea and Vietnam, fund Social Security, and Unemployment Insurance, have a consistently growing economy with living standards of workers and the middle class higher than at any time since, and still end with the National debt exactly where it started.

Citizens United started the change in the rules of engagement.  As long as Republicans have some semblance of power in Washington nothing is happening on Citizens United. To overturn Citizens United the Democrats need benevolant billionaires like FDR.

But even reversing Citizens United is not going to really resolve the problem.  It does not address the problem of other countries, who could care less what our law says, using the Internet to spread disinformation.

We need to require any political ad reveal the actual people behind it.  Not the PAC, or the Corporation.  The names of the actual people.  If its a lot of donors working together they can post a website with the list of names.  But every single individual must be identified.

That will give Social Media a mechanism to draw distinctions, not based on content, but based on non-disclosure.  They can reject based on failure to disclose or false disclosure.  It is then up to us as voters to monitor and identify folks trying to pedal false information.

History is littered with the cultures obliterated because they were unable to adapt to changes in the rules of engagement.  Will Democrats be added to that list?

If this makes sense to you, don't just like it - share it.  We don't have a lot of time to figure this out if we want to be prepared to counter the inundation of falsity that will occurs this summer and fall.