rmildner46

[rmildner46]

Mueller Spoke and Everyone Lost

Finally, Special Prosecutor Robert Mueller appeared to testify publicly before the House Oversight and Intelligence Committees with predictable results.  Republicans attacked Mueller and his findings, Democrats claimed vindication, Mueller rarely strayed from the stark content of his report and the public yawned. There were few surprises, yet everyone involved managed to be diminished by the event.  Some more than others.

The public was treated to the spectacle of Republican members of both committees eating one of their own as they attacked the credibility and motives of a decorated ex US Marine who served courageously in Vietnam and was appointed to important posts in the last four  Republican administrations dating from  Ronald Reagan, with Fox News conspiracy fantasies.  Though hardly surprising, the visual was made more unsettling by images of an obviously diminished Mueller refusing to defend himself against superficially ridiculous attacks, that included legal citations I have been assured that a serious first year law student would deflect without difficulty. More importantly, Republicans lost another opportunity to allow the facts to come to light that would enable them to break with the con man who stole and corrupted their party leaving them without moral or political bearings.  This of course, was hardly a surprise.

These hearings presented Democrats with their best and maybe their last chance to raise public awareness of the significance of and criminal nature of the President’s actions.  Despite careful preparation, some well formulated questions and the ability to cite chapter and verse of the report in pressing their case they came across as futile in their apparent inability to stop a lawless President who routinely ignores processes and precedents that have served as checks against undue executive power since the formation of our democracy.  Despite Mueller’s willingness to affirm the most damming aspects of the report in this very public setting and even break new ground in asserting that the President arguably committed obstruction of justice and even perjury in providing insufficient, misleading and untrue answers in his sworn written responses to the prosecutors questions, Democrats failed to move public sentiment toward impeachment and therefore lost this important battle.

The hearings gave the American public the opportunity to do something it hadn’t done since the release of Mueller’s report, learn first-hand what might be in it.  Less than 3% of voters have read the report and less than 10% profess to understand it in its entirety, so the hearings could have greatly broadened its exposure and informed the public.  But apparently the public was not that interested.  According to Nielsen surveys an average of 13 million viewers tuned in to the hearings compared with more than 21 million the Brett Kavanaugh confirmation hearings last September, 19.5 million  for James Comey hearings  and 16 million for Michael Cohen.  Most of those who did watch, tuned in to Fox, Fox News or MSNBC apparently looking for reinforcement of already held opinions.  Those who did watch got a good, but incomplete exposure to the findings of the report detailing several examples of possible criminal activity by the President and multiple examples of inappropriate behavior.  However, in the absence of easily communicated sound bites, the hearings were dubbed a failure by the mainstream media and got little traction with the public after the fact.  Unfortunately, even after the hearings the public remains largely unaware of what exactly is in the  final report.

Robert Mueller’s distinguished public career was widely described when he was appointed to the position of special prosecutor and, in the weeks, leading up to the hearings.  As the Director of the FBI, he was so highly regarded that Barack Obama initiated legislation to extend his ten year term by two more to enable him to continue the important anti-terrorism initiatives he had begun after his appointment by Obama’s Republican predecessor.  However, that wasn’t the Robert Mueller who appeared on TV screens. The one who did was halting, disorganized, frequently hard of hearing and occasionally disoriented, looking like a 74 year old man who was in over his head.  It is unfortunate that this will likely be the last public’s last impression of him.  More unfortunate is his ultimate failure to complete the task he was assigned.   The original task for the special prosecutor was to investigate Russian interference in the 2016 Presidential Election. He was also tasked with investigating any potential illegal activity he uncovered over the course of his work. On the surface he was spectacularly successful with the indictment and/or conviction of 34 individuals and 3 corporations and the seizure of more than $40 in assets.  Yet his work was incomplete.  Over the course of his investigation, he uncovered at least 10 material instances where the President tried unlawfully to thwart, obstruct  and ultimately terminate the investigation.  He encountered a President who refused to cooperate with his investigation, who lied and encouraged others to lie, who refused to be interviewed in conjunction with the investigation and provided untruthful sworn answers to written questions instead, a President who was all but named an indicted co-conspirator  to criminal activity by the president’s former attorney.  But in the end, the former head of the FBI chose blind subservience to specious protocol over prosecuting or even identifying a dangerous criminal. Mueller became noticeably agitated during questioning about Russian interference, confirming that it continues and chiding the President who encouraged it, but he refused to make any damming statement in reference to 10 instances of possible criminal obstruction of justice, presumably laying it off to an impeachment proceeding  by an irreparably damaged political system.  He didn’t even appear angered by it. Robert Mueller, preeminent law enforcement official of our time, had an opportunity to take  a stand and at least identify a dangerous criminal. He chose not to.  Robert Muller failed in his last and maybe most important assignment.  He let the bad guy get away.

[rmildner46]

I accept the AG findings.  Still...

The Mueller Report us complete and we now know that President Trump did not conspire or collude with Russians to affect the results of the of the 2016 Presidential Election.  Mueller made no decision on the question of whether Trump subsequently obstructed justice, but this finding is without significant consequence.  We know that under DOJ rules, he could not have been indicted even if he had, and practically he would never have been removed by impeachment for obstruction of justice where there was no underlying crime.  I accept these findings and am relieved that a potential constitutional crisis relating to a President being found to having been fraudulently elected has been averted.  Still, after almost two years and $25 million,  it is difficult to call the Mueller investigation a failure, a waste or a witch hunt.

It is easy to forget that the Special Prosecutor was originally appointed to investigate Russian attempts influence the 2016 presidential election and any criminal conduct uncovered as a result of the investigation.  It did not mention, nor was it directed toward Trump or any other specific individual, although Trump’s conduct would rightfully be considered a part of it as would anyone else involved in the election.  The investigation was spectacularly successful in fulfilling its original purpose, uncovering a Russian network that provided an extraordinary amount of disinformation and successfully spread it on social media networks.  Thirteen Russians were indicted, their pictures were published, the address of the building where they worked  was revealed and the specific IP Addresses of the computers they used were detailed.  A total of 34 individuals were indicted and seven of them have either pled or been found guilty of multiple crimes.  A total of $46 million has been recovered by the government in the form of fines or civil forfeitures.  Still, there are unanswered questions.

Before the Inauguration total of 102 contacts between Russian officials and people associated with the Trump campaign, including the Campaign Manager, the campaign National security Advisors, the future AG and Trumps son in law have been documented.  Almost all of these people falsely denied these contacts when questioned about them.  Why did they did they lie about them?  Not just a couple here and there.  All of them. During the early stages of his campaign, Trump took the extraordinary step of siding with Russia and praising Vladimir Putin, upsetting 70 years of US foreign policy.  No presidential candidate much less a Republican candidate had ever done such a thing.  At roughly the same time, Trump expressed reservations about the US commitment to NATO and since taking office he has continued to criticize NATO and pick very public fights with many  of the leaders of NATO countries.  He has had unprecedented public and very private one on one meetings with Putin, even going to the extent of collecting the translator’s notes at the end of one of them.  What does all this mean? Is it really just about a hotel deal in Moscow?

It was Trump himself who made it look as though he had something to hide by attacking Mueller and the investigation. He made the investigation about himself.  Did he set an elaborate trap for the Democrats, knowing that they would get hysterical and that ultimately Mueller would find nothing? Or was that just another example of Trump the demagogue needing something to attack in addition to Hilary and fake news?  And what about reports out of the White House that he was worried about the content of the Mueller Report.  Is a man who knows that there was no collusion worried?

Yes, I accept the findings. Still…

[rmildner46]

2018 Midterms - Everybody Lost

The much anticipated 2018 Midterm Elections are finally over.  Actually, not quite.  Several key races remain undecided and the analysis on state legislature races is incomplete. Certain outcomes however, are clear.  Everyone appears to have something to cheer about…and even more to regret.  The negatives outweigh the positives for both sides.

The most obvious respective positives: Republicans retain the Senate and Democrats now control the House. The good news for Americans of all persuasions is that Democrats and Republicans now must work together on legislation to address issues and solve problems.  The bad news is that Democrats and Republicans now must work together on legislation to address issues and solve problems.

Obamacare is another big winner.  The residents of deep red Idaho, Nebraska and Utah approved the expansion of Medicaid by referendum after their state governments repeatedly refused to take action. Maine elected a Democratic governor  who will implement a previously passed referendum and deep red Kansas elected a Democratic governor in favor of Medicaid expansion.  This would bring the total number of states enrolled in the expanded Medicare program that is 90% funded by the federal government to 36.

Democratic control on the House will serve as a check on the legislative initiatives of the  Trump administration, including tax policy and further attacks on Obamacare.  It could also affect Trump’s ability to wage his trade war.  It will ensure that the findings of the Mueller investigation, whatever they may be, will not be hidden from public view.  Overall however, the newly won Democratic investigative powers are a two-edged sword and are as likely to result in  self-inflicted wounds as a fatal blow to Trump, if they are not used with great care. Newt Gingrich discovered this in his dealings with Bill Clinton before the 1998 presidential election when his harassment of the President and his decision to close down the government in a battle over the budget actually raised Clinton’s standing with the public.  Nancy Pelosi now must exercise discipline in using  House Committee investigative powers strategically to weaken the President while avoiding the appearance of a full-on partisan attack that will likely backfire.  Any  attempt to impeach the President without demonstrative proof of serious “high crimes and misdemeanors”,  and support in the Senate is also likely to end badly for the Democrats.

The outcome will also have some important long-term implications.  With a solid majority in the Senate, the Republican Party will accelerate the appointment of extremist conservative judges throughout the federal court system. The backlog of vacancies caused by Republican inaction on Obama appointees for the last two years of his presidency  plus normal attrition from retirements will result  in a disproportionate influence on the federal judiciary by the Trump administration for a generation or more.  Issues like voting rights, abortion rights, LGBT rights, access to medical services, affirmative action, employee rights, immigration rights and the separation of church and state could face 25+ years of retreat, dramatically reshaping the structure and  direction of our society.

The election pushed elected Republicans farther to the right while it moderated elected Democrats.  In the Senate, Heller, Corker and Flake are all gone. The newly elected Republicans are much farther to the right and more in the Trump mold.  Meanwhile despite the attention given to candidates like Alexandra Ocasio-Cortez of New York, who replaced a progressive representative, most of the Democratic pickups were  moderate Democrats replacing the few moderate Republicans left in the House.  They won by addressing issues like health care and tax policy without advocating for free college and a single payer healthcare system. In fact, the progressive young rock stars of this election, Andrew Gillum, Beto O’Rourke and Stacey Abrams all lost close races that might have gone their way if they had been able to appeal to more moderate Republican voters.

The starkest outcome of the election is the increased geographic polarization it demonstrates.  Democrats now dominate the northeast, the upper Midwest, the west coast and urban areas throughout the country.  Republicans own everything else.  The big news of this election is the extension of Democratic influence into the suburbs of major metro areas throughout the country and their resurgence across the upper Midwest.  Both of these effects complicate Trump’s re-election bid. He was elected  in 2016 because he won Pennsylvania, Michigan and Wisconsin by the narrowest of margins.  If he can’t carry those states,  he has to find the electoral college votes somewhere else.  If he loses the urban and suburban areas of Texas by wide margins even that state may not be winnable, and he won’t be able to replace those votes with anything.

Worst of all, the divided result signals the start of the 2020 Presidential Race and everything that happens between now and then will be forced through that prism.  Potential Democratic candidates will posture on every issue, measuring the appeal of positions and messages to the party faithful who will select the nominee.  Democrats have some distinct advantages.  Urban and suburban areas are adding population and experiencing economic growth.  Rural areas are doing neither.  Minority populations are growing while rural populations are aging. However, any Democratic candidate must be selected by the primary electorate which could nominate a candidate who can’t win the general election .  

Meanwhile, Republicans must either adapt themselves to the future electorate, or shape that electorate itself. They have repeatedly chosen the latter course and as  a result, we are likely to see increasingly sophisticated and aggressive efforts to suppress the potential Democratic vote and curtail immigration, aided and abetted by a cooperative judiciary.  At the same time, facing a diminished electoral opportunity Trump will likely perceive that his  hysterical approach  to a manufactured  immigration issue and his divisive racial comments successfully defended the Senate for Republicans, and he will naturally incline toward tripling down on this rhetoric for his own re-election campaign. We should expect that this past election will prove to be a mere warmup for a coming firestorm that will be the most divisive, acrimonious, bitter, hate filled and irrelevant political race that has ever taken place on American soil, because Trump will make it so.

God help us all.

[rmildner46]

Does It Matter How We Win?

For many years I have enjoyed golf and tennis, two individual sports that rely heavily on the tradition of deeply ingrained  honor systems.  Both depend on individual integrity (and maybe just a little fear of disapproval of fellow competitors)  for the continuation of their traditions.  In fact, being accused of just suspicious behavior is likely to result in shunning by fellow competitors in both sports.  Golf is particularly notorious for having players call penalties on themselves for infractions that only they could possibly have seen.  And in tennis, until players get to top level tournament play, they are responsible for calling the lines for the shots of their opponents that fall on their side of the court.  Both sports rely totally on the character of individual players, opponents, competitors, to validate the legitimacy of their sport.  When matches are played well, they are played hard, and according to the traditions that guide each, they end with a smile, a congratulatory handshake and the sharing of a pint or two at a nearby establishment. But sometimes traditions break down.

Many years ago while living in Atlanta, I was involved in an ALTA team match in the season ending single elimination tournament.  I was playing the 5th and final match that was tied at 2-2.  My opponent was a steady and methodical player who I had beaten earlier in the year. I played an attacking style of sharp angles and down the line winners, knowing that if the ball went over the net more than 5 times during a point, I would likely lose it.  I won a close first set after starting slowly by taking the last three games.  During the second set, my opponent started calling any shots that landed close to the line on his side out.  He won that set, and by the end of it  he was calling shots that were clearly inside the line out.  Several times I stopped play to ask him if he was sure of his call. He was.  My teammates on the sidelines were outraged and admittedly I was too.  What to do? During his first service game of the 3rd set, he was serving for the game and he spun an easy serve into the middle of the service box.  Clearly good. I caught it in my hand and yelled “Out!” “What?”, he yelled as he ran to the net in protest.  Before he could even get there, I called back, “you know I might have missed that one, play two.”  He did serve again, but clearly rattled, he lost that game and all the rest of the 3rd set.  We won that match, but it was hard to feel good about it.  There was no handshake.  Yes, we had won that match, but the game lost.

This experience was a life lesson for me and I have applied it often through the years, relating the story as a manger, a CEO, a father and as a coach to illustrate that as important as winning is, playing the right way is more important.  Playing the right way means playing by agreed upon rules, but also according to the foundational traditions of the game.  And playing the game fairly.  Because, winning is not enough, being a legitimate champion is also necessary.  But now as I look at what is going on around me, I wonder, have I been wrong.  Does anyone really care how they win anymore? Did they ever? Does it matter?

I believe that for many years, principals guided many of our elected officials as they went about doing the people’s business.  I recall stories of senators who abstained from voting on a crucial piece of legislation when someone on the other side was unexpectedly prevented from being present and able to vote.  I remember John McCain gently telling a woman at a town hall that “no, Barrack Obama is a Christian and a good family man.  I just disagree with him.”  I remember hearing that President Ronald Reagan and his polar opposite, Speaker Tip O’Neil frequently ended a week of contentious politics, sharing conversation and beverages on Friday evenings in the White House.  That President George H.W. Bush became close friends with Bill Clinton,  the man who defeated him.  Did they worry about how they won, as much as they did about winning itself?

 Over the past several days, Republicans have celebrated a series of favorable Supreme Court verdicts, all decided by a narrow 5-4 majority that included the most recently appointed justice, Neil Gorsuch.  Does it matter to any of them that Justice Gorsuch is only on the court because Majority Leader Mitch McConnell defied traditional norms and refused to even grant a hearing to a candidate properly nominated by the sitting President in accordance with his constitutional authority?  Does it matter to anyone that the decisive vote on each of these decisions was cast by a justice who would not be there except that someone in a position of power chose to bend the system to get a “win”?  Of course, Senator McConnell justified his actions by claiming that with a Presidential election less than a year away, we should “let the people decide” on the next supreme court justice.  The problem with that, is with Trump having lost the popular election by more than 3.5 million votes, it is difficult to argue that the “people” made that decision, or that, having legitimately elected Barrack Obama, the “people hadn’t already spoken.

Some years after my unfortunate tennis match, I was involved in another competition, this time in the finals of the golf club team match play championship.  We were on the next to last hole and the match was all even. Both of our opponents were on the green in one on the par three, I was about 25 feet from the hole in two shots, and my partner was in a greenside bunker in one.  His next shot sounded funny, but flew out of the bunker and ran up to about 2 feet from the hole, a sure par.  However, he immediately called a penalty on himself for a double hit on his bunker shot.  I didn’t see it happen but knew the shot hadn’t sounded right.  Our opponents who had been watching it said that they didn’t notice a double hit and asked my partner if he was sure.  My partner answered that he had felt the club hit the ball twice. We lost the hole and the match, all shook hands and congratulated each other on a match well played.  It had been a tense, well contested match that included some great shots and some missed opportunities.  And that one reason why I have loved the game as I have. I never again contended for a club championship and have no regrets about the outcome of this one.

I don’t know whether Mitch McConnell plays golf, but I do wonder what his response would have been on that 17th hole if he had been my partner, with the outcome of the match in the balance. Would he have made me proud to be his partner in a losing cause?  Or would his need to win have overcome his respect for the game I love?  I think we’ve already seen how he would choose to call the lines in an important match.

[rmildner46]

The Coming Jobs Crisis

The United States is a nation of workers.  We worship work and extol its virtues while routinely excoriating laziness.  We respect overworking and frequently seek to punish those who don’t work at all or even enough regardless of the circumstances. At the same time, we seem to recognize that not all work is created equal and for the most part have watched silently as some work is rewarded with riches almost beyond measure while others work two or even three jobs to barely support a family.  But now everything we believe about work and our lives is about to be turned upside down.  We face a grave threat and this time it’s not because of Donald Trump.  Not ISIS.  Not Russia. Not the alt-right or white nationalists.  It’s not coming from a cyber-attack mounted by an unseen enemy but is happening in plain sight.  It is not the product of malicious efforts, but is happening by design, as part of a seeming natural process and with our acquiescence.    Nonetheless, we are on the edge of an existential crisis.  It’s not that our taxes are too high or too low, or that our government oppresses us with too much regulation. It’s not that Facebook shares our personal information.  It’s not that we don’t pay teachers enough or support families as a matter of policy.  No, these are all issues we talk about ay least a little.  We don’t often get them right, but we know that they are out there. No, the elephant in our room, the one threatening to suck up our oxygen and trample our world at the same time, is plainly visible, but seemingly ignored.  But, the beast has a name.  It’s AI, artificial intelligence, robots, computers, and he…she…it…them, is about to take our jobs and leave us with…we don’t really know.

This is not about a robot apocalypse, the invasion of the machines or AI overthrowing the regime that made it, turning former masters into servants.  It is much, much more sinister.  It’s about forced leisure, freedom from the work that defines us and gives us purpose and provides a living for us.  It is about what happens when there is no longer enough work left for humans to fully occupy even a majority, let alone all the working age population.  How do we allocate the work that is left, and the value created by vast armies of robots and computers that replace the labor force?  What happens when Capital no longer needs Labor because it can create its own.  Smarter, quicker, more durable and reliable labor, and much, much cheaper.

You don’t have to be a science fiction reader to see this one coming.  It’s actually not fiction of any kind.  We see its effect in the populist rage that brought Donald Trump into office.  He railed against the decline of manufacturing and the export of jobs that left our Midwest a hollowed-out shell.  Unemployed and underemployed blue-collar workers reinforced the point, cheering him on at standing room only rallies.  But the candidate and the crowds missed the real point, confusing a symptom with the disease itself.  In fact, our manufacturing sector has never been stronger and is producing more product than ever in our history.  Many manufacturing plants have dozens of high paying openings that they can never completely fill.  But the jobs are different than before and overall far fewer.  The manufacturing sector has lost many more jobs to automation than export and many of those that remain, while high paying, require ever increasing education and skill levels.  Our manufacturing industry has not eroded so much as it has evolved.  But the lack of opportunity among displaced blue-collar workers that has resulted in a sense of hopelessness and despair is real.  In no small way it has fed the opioid crisis that is now gripping rural America and it serves as a chilling warning of dramatic changes to come in our collective way of life.  Advances in computer science, automation, robotics and now artificial intelligence presage a new age of job replacement technology that now threatens livelihoods on a mass scale.  Imagine the public mood when most can no longer find a job.

Any repetitive process is susceptible to replacement by automation.  That includes most manufacturing, manual labor, and even white-collar positions. Even complex repetitive activities are being taken over by mechanical robots as demonstrated in our automotive industry.  We have already seen stenographers and secretaries all but disappear, replaced first by word processors and then by individual laptops. Professions are also vulnerable.  College classes have moved online.  Tax form preparation has been taken over by computer programs. Accounting itself involves many repetitive and predictable activities and is being increasingly automated, and a single laptop can now do the work of dozens of clerks while improving the work product.  Much legal work, especially contracts involves cut and paste around minimal inputs. Litigators already use computer simulations to test likely outcomes various approaches and legal theories, thereby replacing human legal researchers.  Doctors use computers for research, diagnosis and the development of treatment plans, functions previously performed by highly trained and well compensated people. All this has happened before the advent of computers that can replicate human neural activity and actually learn from experience.  This new artificial intelligence will greatly increase the pace and scope of job replacement.  It makes it now possible to foresee a world where machines can do most of the work that previously occupied humans replacing millions of workers with highly skilled programmers, operators and maintenance personnel.  Analysts tell us that that emerging technology will create many new jobs.  They are right, but it will replace many, many more and those new jobs will require highly specialized skillsets and educational background.

There is a very real danger that our entire economy will come to mirror our current manufacturing sector with soaring outputs produced by a much smaller and more highly qualified workforce.  This could turbo charge existing trends toward income inequality into a full blown social crisis with “haves’ being redefined into those among us fortunate enough to have a job, leaving the remainder to face under or even un-employment and a greatly diminished sense of purpose.  Record levels of GDP and unemployment at the same time.  The best case would mirror the industrial revolution, when new machines produced dramatic increases in human productivity and a militant organized labor movement demanded and got labor’s fair share of the pie.  But even this case would leave millions of obsolete workers without jobs and with no means of support.

There is no indication that that these dramatic future developments are being given any consideration at any level of our government.  In fact, our contentious democracy, with large factions that are suspicious of social programs, common purpose, science and even knowledge, may be poorly equipped to deal with the coming economic and social disruption.  Many of us can’t accept the reality of global warming, are suspicious of Common Core and don’t understand the need for universal access to medical care.  Our politicians can’t make the relatively minor adjustments to Social Security and Medicare that would ensure their future solvency under very optimistic employment projection scenarios.  A substantial group of them believe that the solution to every problem is a tax cut.  More homogenous democracies with greater sense of common purpose and countries with more centrally controlled economies may well prove better able to adapt under these coming circumstances.

This exciting, emerging technology doesn’t have to end the American Century, but unless we recognize its coming and prepare to meet its effects head on, it just may.

[rmildner46]

It’s the Economy Stupid

It has been another tough week for the president.  Son in law and presidential advisor extraordinaire, Jared Kushner, lost his top-secret security clearance amidst allegations of blurred lines between official and personal business dealings, leading one pundit to remark that in lieu of the president’s daily intelligence briefing, Jared is now given a redacted copy of USA Today. And Trump whisperer, amateur psychologist, former fashion model and sometime White House Communications Director, Hope Hicks, announced that she would be leaving the White House, but not before telling the House intelligence committee that she sometimes told “little white lies for the president”.  Meanwhile, the president flipped himself on immigration reform, placing the future of the Dreamers at risk, and signaled his imminent flop on gun control, leaving all of us at continued risk.  He also surprised his closest advisors, including his Secretary of Treasury and top economic advisor that he intended to put tariffs in place on imported steel and aluminum.  Meanwhile, the director of the National Security Agency (NSA) revealed in testimony before the Senate Intelligence Committee that he has not been directed to take action against Russia for interfering in our elections.  Almost lost amongst all the chaos was his announcement of his 2020 presidential campaign manager, apparently signaling his intention to run for re-election.

Trump has given us ample cause to doubt his judgement, not just this last week, but throughout his time in office.  But over the past several weeks he has made several questionable decisions that could deal a fatal blow to his chance at re-election even if the Mueller inquiry finds nothing to incriminate him.

Most presidents embark on a tricky balancing act after they are elected, taking diverse and contradictory actions that on the one hand satisfy the demands of the base that the president relied on for his election, and on the other attempting to unite the country and expand that base in anticipation of the next election.  Trump has excelled at the former and has gone out of his way to avoid the former.  As a result, his support has stabilized at 35-40% of the voting public, including about 85% of Republicans.  Meanwhile, 59% of the voting public consistently tells pollsters that they disapprove of the job that the president is doing and roughly 40% of those do so strongly.  These are not re-election type numbers and even worse for the president’s chances, they are hardening.  While it is true that for roughly 35% of the voting public there is nothing Trump can do to turn them against him, there is about 40% of the voting public that will never support anything the President does.  Trump’s future election chances lie with the group in between these two. That’s where actions to expand the base usually come in, but since Trump refuses to do this his path to victory is more narrow, so narrow in fact that it relies on a single thing.  The economy.

The one thing that has seemingly gone well throughout the Trump presidency is the economy.  The stock market has soared, employment has grown consistently, and consumer confidence has risen to levels not seen since the Clinton administration.  It can be argued that Trump has simply benefited from positive fundamentals put in place during the Obama administration and the economy has not performed equally well throughout the country.  For example, coal jobs have not grown significantly, manufacturing jobs have continued to move overseas and the growth that has taken place is concentrated in urban and suburban areas, skipping the rural blue-collar areas that fueled Trump’s electoral victory.  Nevertheless, whether justified or not, presidents are most notably judged by the public on the performance of economy during their terms in office.  Herein lies Trump’s path to re-election:  an economy that is doing so well that those in-between voters just won’t take the risk of choosing change.

Trump’s biggest obstacle in this regard is, well…Trump.  Specifically, several decisions the President has made over the past couple of months may well end his chances at a 2nd term.  These decisions have nothing to do with the Russia probe, his bi-polar approach on gun control or his several positions on immigration.  They have everything to do with his singular success to date.  The economy.

Our current economic expansion is now 103 months long, making it the 3rd longest of 10 in the post-World War II.  During that period the average expansion lasted 49 months.  Critics will argue that our rate of growth has been below average for an expansion, but growth rates have generally moderated over the post war period, limited by lower population growth, inconsistent productivity gains and close management by the Federal Reserve.  In any event, we should be anticipating a downturn anytime now.

It is popular to say that “expansions don’t die of old age but are murdered by the Fed” with interest rate increases, but this is to confuse cause and effect.  As expansions mature over time, they bump up against shortages of raw materials, labor and capital, causing cost increases that then lead to increases in consumer prices.  Left unchecked, these forces will strangle an economy. The Federal Reserve has a mandate to manage inflation within the very narrow range of 2-2.5% per year.  When the Fed sees prices heading above this narrow range it increases interest rates to slow economic activity and limit inflationary pressures.  If growth has been moderate and small increases are made early enough, inflation can be controlled, and the disruption of a major recession can be avoided. But only if these monetary measures are coordinated with fiscal policy.  However, over the past several months the Trump administration has taken actions that will likely lead to an artificial extension of the expansion but could also lead to a sudden and untimely end.

In January, Trump signed into law the Tax Cuts and Jobs Act.  An effort that had begun with corporate tax reform, culminated in a fiscal giveaway that provided unneeded tax relief to Trump’s best friends, not to mention Trump himself, and will result in more than $1.5 trillion in increased budget deficits over the next ten years.  Economists have likened this effect to pouring gasoline on an existing fire. Then in February, Trump released his budget outline for FY 2019 and beyond, including an additional $1.5 trillion deficit over the next ten years, triggered primarily by increases in defense spending.  Previously, the administration announced a reduction in legal immigration quotas that will reduce the supply of immigrant labor available to businesses at a time when shortages are already appearing.  And then finally just this past week, Trump announced his plans to impose tariffs on steel and aluminum imports, abruptly increasing raw material costs that will ripple through the economy.  Individually, and out of context of the state of the current expansion none of these actions make good economic sense but neither could they be expected to disrupt an $18.6 trillion economy in the short term.  Taken together and taking into account the age of the current expansion, they very likely will result in the demise of the current long running, moderate growth, job creating economic cycle over the next two years. That would be just in time to effectively close Trump’s narrow path to re-election.

Trump has long demonstrated little understanding of basic economic concepts despite his alleged success as a businessman.  He is the self-proclaimed “king of debt” and heartily endorses default as a business strategy.  He also refuses to heed the advice of those around him who know better, preferring instead to rely on uninformed biases and naked self-interest.  To call his thinking childlike is to disparage children. A child’s intellect is still developing, Trump’s is locked in an unformed state.  In this case his ignorance will result in lasting damage to our economy and likely prevent the perpetrator’s re-election. It’s a case of not just being “it’s the economy stupid”, but stupid is as stupid does as well.

[rmildner46]

A Modest Proposal on Guns

“A well regulated militia being necessary to the security of a free state, the right of the people to keep and bear arms shall not be infringed”

So reads the Second Amendment to the Constitution of the United States of America as ratified on December 15, 1791.  Somewhere in those words, 21st century judges have found a justification for the establishment of a right to carry guns in public and have them in the home.  I don’t see it, and it wasn’t always so. In 1876 in the Cruikshank decision the Supreme Court held that “The right to bear arms is not granted by the Constitution...”  In 1939 the Supreme Court ruled that the Second Amendment did not protect weapon types not having a “reasonable relationship to the preservation or efficiency of a well regulated Militia.”  In fact, it was not until the 2008 Heller decision that the Supreme Court “discovered” that the 2nd Amendment really protects an individual’s right to possess and carry firearms.  Decisions in 2010 and 2014 extended these individual rights further.  It took us 223 years, but we finally figured out what the words of the 2nd Amendment really mean.  Of course, the justices who figured it out had help along the way from the NRA.

If gun ownership is a right for a few, it’s not working for the rest of us.  As guns have proliferated, becoming readily available to even troubled teenagers, gun violence has overwhelmed us, turning previously safe places into killing fields.  We as parents have a right to send our children to school in the morning with the reasonable expectation that they will not be gunned down during the day.  We have the right to go to public concerts without fear of becoming the victims of gun violence.  We have the right to worship in peace.  We have a right to peace and prosperity unrestrained by the fear of becoming a gun fatality statistic.

In fact, the statistical link between the number of guns in circulation in a society and the level of gun violence is irrefutable. Americans own over 290 million guns.  We make up 4.4% of the global population, but own 42% of the world’s guns.  We not only have far more mass shootings, but we have the 2nd highest rate of mass shootings per citizen (Yemen, with the 2nd highest rate of gun ownership wins that one!)  Across the board, countries with fewer guns experience lower rates of gun violence.  And it’s not a mental health issue.  Only 4% of American gun deaths can be attributed to mental illness.  Make no mistake, it is the guns themselves that kill our children.

Based on these findings, it appears that the only permanent solution is the dramatic reduction in the number of guns in circulation in our country.  This of course is anathema to our gun culture.  However, if the gun culture is willing to help solve our problem, let’s agree on a goal of reducing gun violence and cooperate on the implementation of a series of incremental steps that limit access to guns and reduce the lethality of those available:

1.      Universal background checks with 30 day waiting period for all gun sales, public and private;

2.      No gun sales to anyone:

a.       Under 21;

b.      With mental health issues;

c.       With a history of domestic violence;

d.      On the federal “no fly” list;

e.      A felony conviction of any kind

3.      Ban on assault type weapons, “bump stocks”’ and magazines holding more than 8 bullets;

4.      Make the violation of any gun law or the commission of any crime with a gun, a serious felony with a minimum 5-year sentence.

If these measures are approved, implemented and the level of gun violence in the U.S. goes down to some reasonable level, then gun ownership can continue unabridged except for these limitations.  If the gun culture refuses to cooperate, or these measures fail to reduce gun violence in a meaningful way, then additional incremental measures aimed at reducing the availability and lethality of guns will be sought.  And if they don’t work, all guns must go.  Work with us to solve the problem of gun violence in our schools, our churches and everywhere else in our lives or we will come after all of your guns by any means possible.

[rmildner46]

The Economic Imperative of Immigration

Our immigration policy is a mess.  It has been for years.  Historically, our land borders were virtually uncontrolled but that was largely by design since we wanted people to cross them and help fill our vast unpopulated wilderness.  Even today we have no effective way of enforcing the length of stay on tourist visas. As a result, we currently have an estimated 11.8 million undocumented individuals living in the U.S., including an estimated 1.8 million who came here as children with their parents.  And we are about to make it much worse than it is, because our politicians are going to “fix” it.  From the very beginning of his campaign Donald Trump improbably understood the Democrats’ vulnerability on immigration and he rode   this issue along with its ideological companion, the off shoring of manufacturing jobs, to the slenderest of electoral victories.  The issue enabled the Republican party to pry enough of the blue-collar workers from the Democratic candidate to elect a billionaire who has gone on the reward his fellow plutocrats with riches while leaving his hard-won blue collar supporters with a trickle-down tax cut.

Now a year into his presidency, the immigration issue remains polarized and unresolved, splintering us and our politicians into factionalized battle lines that are largely at war with the underlying philosophies of their respective parties.  Logically the Democratic Party should be against the illegal immigration that has displaced blue collar workers and suppressed wage growth among existing minority citizens for the last three decades.  And Republicans should be in favor of retaining the lower cost supply of labor that illegal immigrants provide to business.  Immigration, legal and illegal is driven by economics.   Immigrants come seeing economic opportunity, and business wants a lower cost labor supply.  The willingness of business to hire undocumented workers created the “pull” that drew illegals to our shores and created the problem we have today. If they had not been hired, they would not have come.  Meanwhile, American consumers reap the benefits in the form of lower priced goods.  Unemployed and under employed lower skilled citizen workers were victimized in the process.

My own experience is a case in point.  Building homes in the Atlanta area in the early 1990’s we relied largely on labor from rural Georgia and northern Alabama.  These workers were relatively expensive, not particularly reliable and dwindling in supply.  It was hard to get a house built during deer season.  When Mexican crews appeared on the scene, they proved to be less expensive and more reliable than the crews they replaced.  We didn’t ask about citizenship, they showed up every day and they worked hard. We only needed an Employer Identification Number (EIN) and a place to send the check.  Soon, more Mexican crews showed up and in they became the construction worker market in the Atlanta metro area.  We didn’t ask, but we knew they weren’t citizens.  If we hadn’t hired that initial wave of crews, there wouldn’t have been a second, and a third, and so on.  Our new work force broke the law in coming here the way that they did, but we were complicit in the crime by employing them.

Donald Trump did a masterful job of tapping into the resentment of underutilized lower skilled workers from largely rural areas that had seen their manufacturing jobs go overseas while illegals supposedly filled the jobs that opened up.  Never mind that far more manufacturing jobs were lost to automation than ever moved overseas. Or that thousands of manufacturing jobs requiring technical skills went unfilled.  Or that the openings that were occurring didn’t happen to be where they lived. Or that the unemployed blue-collar workers wouldn’t do the jobs that immigrants did, and certainly not for what they were paid.  Resentment over illegal workers is real and it is justified. How the Democratic Party allowed the issue of illegal workers to come between it and blue-collar workers who had been a core constituent for the last 75 years is one of the mysteries of contemporary politics.  But it took Donald Trump to move it from an economic issue to a social issue to a defining political issue.  Sadly, immigration policy is far too important to leave to the politicians.

First, let’s establish that we should control immigration, in quantity and quality.  Our government should determine who gets to come here.  It just shouldn’t be our elected officials. Second, people who have come to our country years ago, built lives, contributed to their communities and have not committed crimes other those necessarily connected to their illegal status, should be encouraged to stay and be given a path toward citizenship.  After that it gets complicated.  Immigration is a complex economic issue, and Congress can’t even do simple very well, much less complex.

Our continued prosperity as a nation depends on the consistent growth of our economy.  We also happen to need it to have any hope of funding our existing future obligations to social security recipients. Gross Domestic Product (GDP) is the measure of our economic output that we use to measure our economic growth. It is the simple product of two numbers: total employment and average productivity.  The growth of our economic output depends on the growth of one or both of these factors. Growth in productivity tends to come in fits and starts and is difficult to predict.  It depends largely on education, experience and innovation. Employment is simple, more workers generally leads to higher output.  The natural increase of our population (births minus death) is about 1.6 million per year, or about one half of one percent.  If we assume a constant labor participation rate, we would have to increase our average productivity by 2.5% per year (vs. the 1.2% average post WWII) to achieve consistent 3% annual growth in GDP. For all of 2016, productivity increased by 0.5% and in 2017 it increased by 1%.  Most economists agree that there is no basis currently to project long term productivity growth rates in excess of 1.5% under any reasonable circumstances, particularly as we approach full employment (which usually has a negative impact on average productivity.)

To get to our target economic growth rate we must either have immigration to make up the difference, or to increase our native birth rates…by a lot, not just to make up for the original difference but also to make up for the workers who would withdraw from the workforce to care for larger families.  So, immigration must make up the difference if we are ever to achieve our economic growth objectives.  How much immigration?  Depends on native birthrates and labor participation rates.  Who should we be letting in?  Depends on what skills and education the economy needs and will need in the foreseeable future.  These are issues of demographics and economics and they should be addressed by demographers and economists who have the knowledge to do so, not our politicians who have no such knowledge and have given us no indication that they will put in the effort to acquire it any time soon.  

Here are some radical ideas. First stop illegal immigration. Track visitors in the U.S. on tourist or other temporary visas who overstay and punish employers who hire undocumented workers. (We don’t need a wall, we need to address the pull factor.) Second, take decisions on immigration away from our elected officials and put them in the hands of a board of experts serving staggered 5-year terms who are selected by Republicans and Democrats.  Let them make rational decisions about our economic needs.  Finally, beg those here already to stay if they have built productive lives, raised families and contributed to their communities.  This is not only just under the circumstances but makes economic sense for us all.  Think of the disruption to our economy of the loss of approximately 3.5% of our population and 8 million workers heavily concentrated in labor intensive occupations that most U.S workers don’t want.  Think of the loss of $11 billion in annual tax revenue.  Let them all live their dream with us.

[rmildner46]

End Games

I was recently asked what I thought was going to happen with the Mueller investigation.  I had to think about it.

The news these days has the breathless feel of the final pages of a thriller with the challenge of three-dimensional chess.  The bad guy was clealy identified 300 pages ago and it’s tempting to assume that we know how this story ends.  Surely Trump has something to hide and Mueller either has it or is really close.  Trump has to get rid of Mueller, but this isn’t the family business.  He can’t fire him, and he can’t tell just anyone to do it.  It must be someone with the legal authority to fire the special prosecutor tasked with investigating the President.  Trump has likely never encountered an adversary quite like Mueller   and a process so out of his control.  And Mueller has likely never pursued a criminal as ruthless as Trump. It’s a page turner!

It is still possible that there is nothing there, that there was no collusion with Russia before during and after the campaign.  If we were talking about anyone else his behavior alone would indicate that he is guilty of the something.   But this man is so insecure, so thin skinned, so apt to lash out at even implied slights that it is possible that he would act as he has even without having something to hide.  Maybe his campaign was simply so inept and his staff so naïve that they couldn’t collude with Russia.  Maybe Russia got so frustrated with them that they just decided to go it alone.

Of course, this would require a bunch of improbable coincidences.  For starters, Trump would have a genuine affinity for Russia and truly admire Vladimir Putin.  Roger Stone would have had to not tell Trump about the coming Wikileaks email dump that he clearly knew about in advance, despite talking with him regularly.  The Russian lawyer would have really wanted to talk about adoption with Don Jr.  The Russian oligarchs who bought Trump properties for ten of millions above market over the years would have had to not understand real estate values in the U.S.  Paul Manafort going from working for the Russian government to managing Trump’s campaign foe no compensation happened because he wanted a change of scenery.  The WikiLeaks dump would have had to occur in the afternoon of the morning that the Access Hollywood tape dropped by pure coincidence.  And all of the secret contacts with Russia that everyone forgot to disclose would have really been about improving the relationship.     However improbable, all these coincidences are possible.  

Another reason to doubt the existence of a crime is that no one, not Hillary, not the Democrats, not the Republicans, not Trump, not even the Russians expected him to actually win. Why collude, why lend support if he can’t win?  The obvious answer is that Russia wins even if Trump doesn’t if the objective is to weaken democratic institutions, sow discord and increase divisiveness in the world’s leading democracy.  In this case, Trump is Russia’s useful fool.  But why would Trump do it?  Well, he’s the fool.  Or Russia has something on him.  Or both. Mueller’s  persistence leads us to believe that there is something.

Mueller and his team have worked largely in silence, punctuated by occasional tidbits attributed to “knowledgeable sources”.   It is safe to assume that these releases are part of a well-orchestrated plan by the special investigation team and that each has a purpose.  It is also safe to assume that given Mueller’s prior experience in government, he recognized that Trump might fire him from the very beginning and has contingency plans in place to deal with such an outcome.  It also seems likely that Trump’s lawyer knows this, and even if he doesn’t know exactly what they are it is clear that he doesn’t want Trump to fire Mueller.  What is Trump going to do?

The much-discussed memo from the majority of the House Intelligence Committee is widely seen as a step toward replacing Rosenstein with someone who will either rein in the investigation or fire Mueller. To accomplish this, Trump must either get Rosenstein to resign (preferably in disgrace) or give Sessions cause to terminate him.  The memo may get him there, or Trump may be playing a longer game.  He may instead be simply trying to cast enough doubt on the investigation itself to give the Republicans in the House justification to ignore Mueller’s findings and refuse to impeach Trump.  To date these Republicans have proven to be reliable allies to a man they would find to be despicable under any other circumstances, and it is extremely likely that will prevent a majority of the House from impeaching the President. For this strategy to work, the investigation must be complete and the vote in the House must be timed to take place before the new Congress takes over in January of 2019, since the Democrats could become the majority party at that time.  If the vote doesn’t take place by then or if Mueller’s findings include smoking gun evidence of crimes so serious that Republicans cannot ignore them, then Trump will be impeached by the House and tried in the Senate.

Given this set of facts it would appear that the memo will be released despite the factual errors it contains and the damage it will do to the FBI and the CIA.  After a reasonable amount of back and forth Trump will agree to meet with Mueller and answer questions under oath.  Mueller will not be satisfied with written answers to questions and he doesn’t have to be. However, despite his chronic looseness with the truth, Trump has performed well in testifying on his own behalf in previous litigation and apparently avoided perjuring himself.  Of course, this time he doesn’t know what his adversary knows and cannot fully anticipate what directions the questioning might take. It is not likely to be focusing entirely on obstruction of justice in the Mike Flynn affair.

Trump likely knows that he will never be convicted of obstruction of justice absent a serious underlying crime.  Asking Comey to “let it go” with Flynn won’t qualify.  Nor will writing a false statement for Don Jr. on the reason for the meeting with the Russian lawyer.  But both of these could be useful decoys and serve as cover for the true thrust of the investigation.  If this is the case, Trump might not know what was going to hit him until it was way too late for him.  

This story boils down to a battle between a ruthless street fighter and a three-dimensional chess master. The street fighter may not fully understand the game until checkmate, but even if he loses, we can count on destroyed reputations, tarnished institutions and the intact survival of the Trump base. And rest assured, Trump doesn’t have the character of a Richard Nixon.  He won’t resign to save the country the agony of impeachment and he won’t go quietly into retirement.  He will bruise and break everything he can reach on his way out the door.  And tweet until someone pulls his phone from his cold dead hand.

Or he may just fire Mueller and take his chances.  The end games are be underway but ending has not yet been written.

[rmildner46]

So Now We Know

On Thursday we “learned” that President Trump would rather attract immigrants from places like Norway than a group of “shithole” countries in Africa or Latin America that happen to have poorer and darker residents.  And we learned that despite all that has happened before, Trump cam still shock us and talking heads can still explode on national TV.  Or maybe he didn’t say it after all.  Maybe Senator Durbin was lying (along with Senator Graham).  Maybe Senators Perdue and Cotton are not mealy-mouthed Trump apologists.  Maybe it was actually “shithouse countries”. And maybe it doesn’t make any difference one way or another.

What is it that we supposedly learned from this?  That Trump will express vile racist thoughts?  That our President uses foul language?  That he doesn’t want dark skinned immigrants?  We already knew those things and so did Dick Durbin.  We also already knew that our President would say things that most racists know not to say, at least not in public.  We learned this when our future President assumed leadership of the birther movement.  It was affirmed in his carefully staged candidacy announcement and re-affirmed more times than we can count during the campaign.  Let’s be honest, this past week we learned nothing about our President that we did not already know, and we are only pretending to be shocked.  We also learned that our Democratic Party has learned nothing from its 40 days in the wilderness.

Let’s assume that the obvious is true.  The President made a vile comment categorizing vast parts of the globe as inhabited by undesirable people, or led by bad governments.  What did Durbin think was going to happen when he left that meeting and announced to the world that Donald Trump was a racist?  Did he believe that this would be a tipping point and Republicans would rush to his side in united opposition to their leader? Did he think that in light of this “news” that they would unite behind the Democratic plan for the Dreamers and immigration reform?  Or did he think that this was another chance to embarrass Trump and his Republican coconspirators?  Did he think at all?

If he had, he might have wondered how he could use this incident to help secure permanent residency status for the 800,000 or so immigrant Dreamers currently threatened with deportation. If so, he probably would have decided that publicizing this comment was not likely to get him what he wanted.  I personally have never found embarrassing the other party to be a particularly effective way of winning concessions during a negotiation.  What it tends to do is to drive the other party from the table, which it appears to have done in this case.

Where are we now? Trump has been exposed.  Again.  Thirty five percent of the public supports the him and it likely is not despite the comments, but because of them.  Republicans in Congress have rallied to the President’s side and the Dreamers face deportation.   In every negotiation, you have to decide whether you would rather be right or get what you want.  To get what you want. You must be prepared to let the other guy “win”, especially against an ego driven adversary like Trump.  Sometimes, if you won’t lose, you can’t win.

A good “loss” might look like this.  The Dreamers stay and can work towards full citizenship.  The Haitians stay.  The Salvadorans stay.  Quota immigration program goes.  Chain immigration is replaced by family reunification (same thing of course!). And Trump’s wall is approved over a five-year period, subject to annual budget approvals.  That’s a win.  That chance may now be gone, but don’t you feel better knowing that our President has been exposed?

[rmildner46]

Finally we’re having fun again...

I have to admit, I haven’t had this much fun since the wee hours of November 8th of 2016 when I was still able to cling to the remote possibility that Donald Trump would not be elected President.  Then of course Pennsylvania fell, and glimmers hope gave way to the depths of despair. That funk has more less stayed with me over the past almost 14 months, rising and falling some, depending on just how bad the day’s news was.  Inauguration speech, the pits; Supreme Court Justice approved, downer; ACA repeal vote failure, ray of sunshine; Susan Collins criticizes tax bill, hope; Susan Collins remembers who she really is and tax bill approved, bummer.  Then yesterday afternoon the pall lifted, and expressions of pure joy were felt again.  Who knew that a book I hadn’t even read could be this life altering.  Enough to cause long sufferings, suicidal liberals to step back from that 47th floor window, take a deep breath and laugh joyously…again.

We are warned of course that the contents of the book have not been verified and much if not all of it may not be true.  I don’t want it to be true.  I don’t want my President to be ill informed and unwilling to learn the basic facts necessary for him to do his job.  I don’t want to know that his most important advisors consider him to be a moronic nincompoop.  I would prefer not to believe that the (former) leader of the free world refuses to read even one-page briefing papers and that he has no grasp whatsoever of the policy principals involved in legislation that affects millions.  I don’t want my image of my President to be of a bloated pile of lard lying around at night in his bathrobe watching 6 news programs and eating cheeseburgers while the free world burns.  I don’t want to hear that his daughter and son in law, trusted white house advisors, are dumb as a post and an entitled spoiled brat respectively. And I don’t want to know that his son, not the dumb one, is guilty of treason. Alright, maybe I am OK with the children stuff, but I don’t want any of the rest to be true.

So why is it that I am so encouraged by the reported contents of a book that hasn’t even been published yet?  Well for one thing, there is the sardonic pleasure in seeing the passengers and crew of this ship of fools turn on each other with such alacrity, loyalty to the master and each other not being one of their apparent strengths.  And then there is my confirmation bias.  I admit to taking enormous pleasure in learning that what I had feared and known to be true in my heart, has been confirmed by someone else, even as weak a source as Michael Wolf has proven to be in the past.  The book must be true because it is consistent with everything we have come to know about our buffoon in chief the sycophants around him.

I just don’t want it to be so.

[rmildner46]

No Collusion, No Collusion

The news that former senior campaign advisor and Director of National Security, Mike Flynn will plead guilty to Lying to the FBI could have been devastating to the administration, but President Trump (Is that still as hard for you to hear as it is for me to say?) was quick to calm the roiling waters tweeting “No Collusion, No Collusion”.  Of course, his efforts could have been more successful if he had not assured us too many times to count that his campaign had had “no contact with Russia”, and we now know that people within his campaign had too many contacts for us to count.  And of course, he also might have been better off if he hadn’t admitted in a subsequent email that he knew that Flynn had lied to the FBI at the time.  But still, we are assured that there was no collusion.  So, what was there?

In April Flynn’s attorney in a statement to the press said that his client “had a story to tell, if he ever got the chance.”  It looks now as though he got that chance and has told at least part of that story.  Of course, we don’t know what it was, but apparently it was good enough for Mueller to at least temporarily forgo potentially more serious charges in favor of two counts of lying to the FBI.  We can assume that his story involves someone farther up the campaign food chain and that is a very limited universe, that includes members of the Trump family and maybe Attorney General Jeff Sessions.  There isn’t anyone else.

The great unanswered question is, why was Russia even an issue in this presidential campaign?  It hasn’t been for many, many years, except for when Mitt Romney named Russia as our greatest international threat in the 2012 campaign, a statement that we now grudgingly concur with.  But Trump made improving relations with Trump and personal praise for Putin (???) a central part of his campaign from the beginning, before he had a foreign policy advisor much less a foreign policy.  Why?

Other campaign themes had a defined constituency.  His rants against illegal immigrants, Muslims, Mexicans in general, trade agreements and even the Obama birther claims were directed at specific groups of disaffected voters.  What group supports Russia or likes Putin?  Where did this come from?

We do know that Trump does have a certain economic affinity with Russia.  Russian oligarchs bought numerous overpriced condominium units in the Trump Soho Tower when it teetered on the verge of failure during the early 2000s, and Trump made a multimillion dollar profit flipping a Palm Beach estate to a member of the Russian mafia around the same time.  We don’t know who provided equity for Trump’s new deals after his disastrous Atlantic casinos creditor settlement (his tax returns would likely be helpful here), but we do know that Deutsche Bank for some mysterious reason provided debt and as recently as this last summer was under investigation by DOJ for money laundering in conjunction with the Russian national bank, and in violation of sanctions against Russia.  And we now know that in the early stages of his campaign, the Trump organization was actively pursuing a development deal in Moscow.  Could this economic interest be the source of Trump’s affection for Putin and all things Russian?

Beyond lying to the FBI, Flynn has been revealed to be venal and money grubbing, willing to serve any master for the sake of a buck.  Along with Paul Manafort, and Donald Trump.  Looks like a thread.   The central tenant of the Watergate investigation was “follow the money”, and ultimately the money trail led to the oval office.  Is this Flynn’s “story”?  If so, you can bet that Mueller is all over it.  The only question now is, which Trump/Kushner gets left holding the bag.  Donald is betting it’s not him.  I’m not so sure.

[rmildner46]

Tax Reform?  Of Course! Current Proposals?  Not So Much.

It is hard to argue with the idea of tax reform, but much more difficult to agree on what that means.  Seems that one man’s “egregious loophole” is someone else’s “reasonable deduction”.  There is even a difference of opinion about how long the tax code is.  Critics complain that it is over 74,000 pages long, but that number includes all past provisions, whether still in effect or not, and all case law on past as well has current provisions.  The effective code is just over 2600 pages (vs. 1200 in the Bible) though and it does contain a dizzying array of social and economic engineering, loopholes and special interest giveaways.  It has been used to guide consumer choices (home ownership, solar energy and electric cars for example) and corporate investment (depreciation rates and the oil depletion allowance), encourage charitable giving, education, healthcare consumption, support specific industries and reward special interests on both side of the aisle

The current effort started with the stated goal of simplifying the code, closing loopholes, lowering the corporate tax rate and leaving more money in the pockets of individual tax payers.  And oh yeah, adding no more than $1.5 trillion to the national debt over the next 10 years, so that it could be done through the budget reconciliation process without a single Democratic vote.  This approach differs with that taken by Ronald Reagan the last time a major tax reform was enacted in 1986.  Then the President asked for simplification of the tax code and an across the board reduction in tax rates across all income levels with the stipulation that the result was to be “neutral” with no net loss in total tax revenue. The final bill passed through a Democrat controlled   Congress through a process that lasted 75 days, included more than 40 public hearings and involved the testimony of over 500 witnesses.  It achieved its objectives by closing over $60 billion in corporate tax loopholes and shifting another $24 billion in tax burden from individual to corporate tax payers.

That increase in corporate taxes is one of the main features to be addressed with this new tax reform.  Advocates for reform point out that the U.S. has one of the highest corporate tax rates in the world, at 35%.  But this is misleading. The 100 largest public corporation pay an effective rate of around 11% and the average for the Fortune 500 companies is 18.2%.   Many large and familiar companies pay much less.  Boeing pays 4.5%, Amazon 4.3%, Carnival Cruise Lines pays 2.8% and most energy companies pay less than that.  The average actual rate for all U.S. corporations is 29% and the average for all corporations in the seven largest economies in the world is 28%.

When Ronald Reagan outlined his tax reform plan, he defined “loophole” as “the avoidance of the payment of tax due to an unintended gap in the tax code.”  Today’s reformers have extended the term to include such important middle class deductions state and local taxes, interest on education loans, job change moving expenses, home mortgage interest and out of pocket chronic condition healthcare expenses, adoption costs and even the personal expenses of teachers in buying supplies for the classroom while failing to address the many corporate loopholes that have materialized since the 1986 reform effort, and resulted in the extremely low tax rates paid by many businesses.  One egregious loophole is the special treatment granted to “carried Interest” income.  This is income to the owner or manager of an investment fund which is treated as capital gains income at a preferential rate of 15% even though the fund manager has no money invested.  The current reform eliminates this preferential treatment for income received during the first three years of the life of an investment fund, but leaves it intact for all income after that.  A total of about 75% of the income that currently receives preferential treatment will be unaffected by the reform.

Key provisions of the reform bills eliminate the Alternative Minimal Tax (AMT) which is designed to ensure that high earners pay a minimum amount of tax, no matter what deductions they may have, and the Estate Tax.  The AMT generally applies to the highest earning 3% of households and the Estate Tax only effects the top 1% of estates, and even these can easily avoid the payment of tax through the creation of a living trust.

Meanwhile, there does not appear to much that would benefit middle class tax payers who currently itemize deductions, particularly those living in high local and state tax jurisdictions, those paying off college loans, those moving to take a new job, or those with extremely high out of pocket medical bills among others.  Of course, advocates claim that the reduction in the corporate tax rate will result in higher wages and the increase in economic growth resulting from lower taxes for all will lift all boats.  Detractors cite the lack of empirical evidence to support these claims and point out that it will help yacht owners, if no one else.

True tax reform is an idea whose time has come, but it is difficult to see the current proposed legislation as anything close to reform. Instead it appears to be a cynical giveaway to the wealthy, riding on the shoulders of middle class taxpayers and future generations, and concocted in a terrible rush without deep thought or planning, to pass some legislation, any legislation, during Trump’s first year in office   Some criticized Democrats for passing healthcare legislation that affected 20% of our economy without a single Republican vote.  Well this legislation will affect 100% of the economy and it is unlikely to attract a single Democratic vote, especially given that no Democratic input has been allowed.

Is the Grand Old Party stupid enough to pass an anti-middleclass tax bill that adds at least $1.5 trillion to the national debt, on top of the “Obamacare repeal” debacle and recent off year election results? Never underestimate the will of irrational desperation.

[rmildner46]

Imagine Tom Price thinking he can abuse taxpayers with wasteful travel costs. That's my job#realdonaldtrump

[rmildner46]

Trump's Very, Very Good Week

An unusual thing has happened, President Trump had a very good week. Previously he had sometimes given one good speech in a row.  On occasion, he has had a good morning, or a good afternoon.  Entire days have been rare.  Usually his streaks have been summarily interrupted by self-inflicted injuries caused by his weapon of choice, Twitter. But now an entire week, even more really, of positive actions and he has failed to self-destruct. His good moves over  roughly a week’s time stand as monuments to his political wisdom and self-control.  I must admit that this is a sentence I never thought that I would construct in reference to Mr. Trump!  What you might wonder could possibly prompt it.

Well, to begin with, he did not attack North Korea, and has even stopped talking about it to a degree.  This is good, because keeping that issue at the forefront on the world stage reinforces bad behavior.  Best to ignore and re-direct.  But more significantly he has taken three positive actions and not screwed them up with stupid distracting tweets.

It began with the federal branch response to Harvey that has continued with Irma.  By all accounts FEMA, under the direction of a Trump appointee, prepared well for both storms and the response to Harvey has appeared to thorough and professional so far.  The President ultimately struck the right tone in his comments and the visuals that came out of his trips.  Let’s face it, when the biggest criticism that comes out is the first lady’s choice of footwear, you’re doing OK.  Our President has even appeared Presidential in his response to these storms. 

His second big win was his action on DACA.  Yes, he got a lot of initial criticism, but to be honest it was a clever move politically and will likely prove to be good for the beneficiaries of the program as well.  At one time, he managed to satisfy his core supporters by terminating the Obama executive order and shift the responsibility for its ultimate fate to congress, where it belonged in the first place.  And this is good for those previously protected under the program.  In fact, the executive order provided thin protection that was only intended to be temporary.  Beneficiaries of the program holding valid work permits have been deported under the current Attorney General’s hostile attitude and the pending challenge to the order’s constitutionality stood a reasonable chance of success given the venue chosen by the litigants and the current composition of the Supreme Court.  Now the Congress will be forced to act by the crisis that Trump has created for them, and given the overwhelming popularity of the Dreamers, the outcome is extremely likely to be positive for them and may even include an eventual path to citizenship.  When that happens, Trump will rightfully claim credit for something that Obama was unable to accomplish.

Trump then concluded his very, very good week with an act of bipartisanship highlighted by a photo op with Nancy Pelosi and Chuck Schumer that sent a shiver through the collective Republican spine and won wide spread approval from the public.  By agreeing to the combination of linking the hurricane aid to the 3-month extension of the debt ceiling, Trump solved his immediate political problem and signaled to the Republican Party, that given their lack of progress on his legislative agenda, he really didn’t care about theirs.  Never mind the potential future complications to his agenda, the people liked it and the press, especially the fake news, responded favorably.  Could a Pavlovian response to this positive reinforcement lead to more cooperation with the Democrats on the legislative agenda?  Maybe tax reform? Or infrastructure?  Or could legislation that reinvigorates the private insurance markets deliver the repeal and replace the Republicans couldn’t achieve?

More very, very good weeks, or a return to self-immolation in 140 characters or less? Stay tuned.

[rmildner46]

North Korea:  the Hard Truth

North Korea is dominating the news.  Ominous threats from the government of North Korea and outrageous responses from our President including unprecedented threats in 140 characters or less, cast a pall over an already tense world.  Is a North Korean attack imminent? Will there be war?  Will the U.S. strike first? Behind these questions and the headlines lies the intractable relationship between North Korea and the U.S. and the rest of the western world.  This long simmering crisis was born in a conscious policy of neglectful indifference punctuated by hostile policies that continued across the decades, nurtured by multiple administrations across party lines.  And now they have nukes.

During the 1990’s the Clinton administration engaged the North Koreans and the forged a pact known the Agreed Framework that included food aid and a path toward the normalization of relations in return for North Korea’s abandonment of its nuclear weapons program.  Around the same time, South Korea announced its Sunshine Policy, which also included the normalization of relations with North Korea.  Once that agreement was signed however, the U.S. exhaled, moved on as it does, and North Korea surreptitiously continued its nuclear program.  In 2001, the Bush administration declared North Korea “a rogue state”, part of the “axis of evil” and adopted a policy of encouraging regime change.  In 2006 North Korea conducted its first nuclear weapons test.  Now North Korea has successfully tested an ICBM capable of reaching the continental U.S. and our intelligence sources tell us that they have produced a miniaturized nuclear device that could be mounted on that missile. North Korea is just a few short steps from joining the U.S., Russia, Great Britain, France, China, India, Pakistan and Israel as the world’s 9th nuclear power.

We are alarmed and our leaders have declared this outcome to be unacceptable.  In January of this year President Trump said it “will never happen”. After the U.N. passed new sanctions with the unlikely support of both China and Russia and North Korea appeared to threaten Guam, Trump announced that “any threat to the U.S will be met with fire and fury like the world has never seen.”  North Korea’s young leader, Kim Jong-un, is irrational, unpredictable and mentally unstable.  Our President is impulsive and untested.  The threat of war with North Korea has never been higher.  Or maybe not.

Kim Jong Un is certainly ruthless even by historical precedents set by other totalitarian leaders. And while he is no doubt cruel and even barbarous, he is likely not mentally unstable, irrational or even paranoid. In fact, every official act taken by multiple leaders of North Korean over the last 60 years has been guided by the three primary goals.   First and foremost is protecting North Korea from foreign invasion and occupation, followed closely by the preservation of the governing regime and the leader himself.  Finally, they crave respect on the world stage.   And all three are irrevocably intertwined; a threat to any is a threat to all.  And conspicuously absent from the list is any reference to the people of North Korea.

All three leaders of North Korea have pursued these three ends through one primary means:  build military strength.  And they have done so.  The Korean People’s Army is the largest in the world with over one million active duty soldiers and over 8 million trained reservists, equipped with over 3700 tanks, 2100 armored personnel carriers, 17,900 artillery pieces, 11,000 anti-aircraft guns, and over 10,000 anti-tank missiles.  At 1000 vessels it has the largest navy in the world, including the largest submarine force and its air force has over 1600 planes. Any technological deficiencies are clearly overcome by sheer volume.  It also has an advanced cyberwarfare capability, as shown by its penetration of the Sony server along with other lower profile efforts.  And now it has a well-publicized nuclear and emerging ICBM capability.  Not your average banana republic.

All of this weaponry is intended to prevent foreign governments from even thinking about invading the country.  And while we may think this reflective of extreme paranoia, the history of the Korean peninsula is one invasion and occupation after another, beginning in the 6th century and culminating in the cruel Japanese occupation before and during WWII.  Then after the war, as a client state the North Korean economy was directed by and totally dependent on the Soviet Union, until the Soviet dissolution in 1989. Beginning around 1990, North Korea picked up the pace of its military buildup and began to aggressively pursue nuclear weapons.  But until those nuclear weapons materialized, the intent was clearly defensive, and even now, with the exception of South Korea, they are clearly focused on discouraging potential invaders.  Even those nuclear weapons are likely intended as a deterrent.  

So, if the objective is to get North Korea to ultimately give up its nukes and ICBMs, threats are unlikely to work, since they just serve to reinforce the fears.  Think about a dog that has been mistreated by previous owners.  Tough love isn’t going to bring him around.  The only option you have is to shower the beast with love and affection, an approach that is understandably difficult when he is snarling at you the whole time. Even that may not work.  But lest you think putting the animal down is an option in this case, you need to consider reality.

In fact, there is no realistic offensive military option for the U.S.  Any strike against North Korea will put South Korea in extreme jeopardy and expose Japan.  While South Korea is a potent power with a large standing army, a substantial navy and almost as many planes as its northern neighbor, Seoul, a city of over ten million is less than 20 miles from the border, well within range of thousands of artillery pieces and missiles. Unless the U.S. initiated a massive nuclear first strike, North Korea could literally destroy Seoul without ever leaving the country.  Even that nuclear strike would not totally destroy North Korea’s ability to land destructive blows in South Korea and Japan.  Everyone involved knows all this, including Donald J. Trump.

North Korea will become a sustainable nuclear power and it is difficult to see what would cause them to give it up. Bombast will not work.  Threats are empty.  We would have offer them something more desirable than their security.  It is possible to reduce tension and the risk of confrontation, but that would require accepting them and their nuclear capability.  That doesn’t play well to anyone’s base.  The good news is that they will never use their nukes while we maintain an effective deterrent capability against them.  As long as we have the capacity and the will to wipe them out, they will keep the nukes in their silos, just as the same threat has prevented them from attacking South Korea for more than 60 years.  So North Korea will continue to misbehave and we are likely to respond with combative threats and little else.  The language out of North Korea will become increasingly annoying, jarring and even unnerving, but will otherwise be inconsequential.  Unless we do something stupid.

[rmildner46]

Its What We Don’t Know

What a start.  There has been so much day to day drama that it is hard to believe that Trump has been in office less than four months, much less anticipate what might be in store for the rest of this term.  Beginning with his utterly stupid public argument about the size of the crowd at his inauguration, Trump has demonstrated a bewilderingly diverse array of personal inadequacies ranging from dishonesty though petulance, anger, immaturity and vindictiveness.  But more than anything else, he has shown himself to be ignorant and incompetent, perhaps the two worst qualities any manager of anything could have. What he has not yet demonstrated is any apparent grounds for impeachment.

The hurried release of the Muslim ban, apparently drafted without competent legal advice and his obvious shock at the intervention of the courts was an early indicator.  But the show had really aldready started behind closed doors, when acting Attorney General Sally Yates came to White House to tell staff that Mike Flynn had lied to the Vice President.  He could have eliminated the problem in two simple steps: (1) tell Yates that he knew about the call to the Russian ambassador and Flynn would no longer be subject to blackmail by the Russians; and (2) tell the VP that Flynn had done so at his direction and misled the VP to keep his overture to the Russians secret.  Meanwhile tell Sally Yates that the Russian initiative is classified.  Case closed. I’m not saying that we would be better off, we wouldn’t be, but if either Trump or someone on his staff had half a brain, Flynn would still be National Security Advisor and Yates wouldn’t be able to open her mouth about it.

Same thing with the FBI Director.  Comey had demonstrated his unfitness for the position on three separate occasions: (1) in August when he inappropriately went public with the findings of the FBI investigation into Hillary’s emails and called her “extremely careless”; (2) at the end of October when he notified Congress that he was re-opening the investigation without any knowledge that the new evidence was in any way significant; and (3) on May 3rd in his testimony in Congress when he placed more importance on his own reputation then the integrity of the presidential election Of course we’re still not sure why Trump wanted to fire him, but we we’re sure this isn’t it.  Never mind,  if you want to get rid of a high ranking government official there are time honored ways of doing it.  First you call your allies in Congress and you start the whisper mill.  After the whispers surface, you call the official in and tell him that he has lost the confidence of members of Congress and suggest that he should consider resigning.  If that doesn’t work you raise the volume until it does.  What you don’t do is publically humiliate him in front of a roomful of potential FBI recruits in LA.  That goes beyond vindictiveness to stupidity, both of which appear to be in abundant supply with our president.

Of course, Comey’s firing began what may be the most dizzying week in the history of presidential politics.  Almost immediately after the firing, one of Comey’s aides apparently leaks a report of a dinner with Trump at which the president asked the FBI Director for his loyalty and Trump fires back on Twitter threatening to expose him with his tapes. Before we can even process this exchange we learn that Trump with his childlike need for the approval of those around him exposes TOP Secret (Codeword) material to the Russians of all people.  The classification means that not only is the material itself highly classified, but the release of it could place a very important and potentially perishable intelligence source at risk.  This is the biggest no-no in the intelligence community.  Seemingly this is not a crime since classifying material is a responsibility of the executive branch and the President as chief executive can de-classify anything at any time.  However, news media has since been warned against publishing or broadcasting the actual information, so seemingly it is still classified.  But never mind, it shows incredible ignorance. Still reeling, we learn two days later through yet another leak, that on February 14th, at the end of briefing on terror threats, Trump met privately with Comey and asked that he “let this Flynn thing go”, because “he’s a good guy”, and that Comey wrote a contemporaneous memo to the file describing the conversation.  This demonstrates again why you give someone the opportunity to gracefully resign, but Trump apparently thinks The Apprentice is real life and that’s how you fire people.

Of course there is more. Accusing Obama of wiretapping him was just gratuitous stupidity.  Did he really think this was going to be like the birther thing where you just throw out a big lie and let the media run with it?  Does he not know that he is President now?  Of the United State of America?  People actually pay attention!  And those cabinet picks.  Apparently he believes that any knowledge of the mission of the department you are going to run is not just unnecessary, but actually undesirable.  And double bonus points if you are fundamentally opposed to the mission of the department you are running.   It goes on and on a justifiable impeachable offense.  What they reveal is an incompetent President. For there to be obstruction of justice there needs to be an underlying crime, and so far we don’t have one.  The stuff we know about Flynn so far doesn’t work because it doesn’t go deep enough or touch Trump directly.  His request of Comey can be seen as just looking out for a loyal associate.  We need more, and it all seems to point to Russia. We don’t have any hard evidence of a possible crime, but why is he trying so hard to divert attention from it?  If there is nothing, why not just tell everyone there is nothing there and encourage them to investigate?   Why would multiple members of his administration lie about contacts with the Russian government?  This whole Putin obsession is strange.  Every other issue he plays on has a political purpose, but what possible benefit could cozying up to Russia have with is core supporters? And now Deputy Attorney General Ron Rosenstein has appointed a Special Counsel.  Abundance of caution, or has he seen something really suspicious?

We now know that there are many anonymous sources within the government trying to protect us from something. We also know that our President is ignorant, insecure, jealous, petulant and dishonest above all else.  But most frightening of all is what we don’t know…yet.