Sunday, May 28, 2017
Without massive government direct investment in infrastructure, scientific research and education, without a “quality first” nation jobs priority, the American “good paying jobs” picture is bleaker than a burned down forest. Even the Trump vectors towards infrastructure are heavily dependent on the private sector given the right to implement usage fees (such as highway and bridge tolls) that will slam ordinary people traveling or just going to work. Thus the net economic benefit enhances the builder/investor corporations, sustains tax reductions for the rich and makes life simply more expensive (a new indirect regressive tax) for most Americans. The infrastructure jobs created will be more than offset by the increased cost of living to the rest of us.
The rising nations (like China) and smart net exporters (like Germany) are doubling down on direct government support for infrastructure, scientific research and education. Anyone can go to top German universities, virtually for free. Even Americans just dropping in for that free education. We get public education cuts and staggering student loans. And as new U.S. patents are falling almost in direct proportion to the withdrawal of governmental support, patents in those rising nations are skyrocketing. In case you don’t see the obvious, in a technologically-driven world, the countries that push the technology envelope prosper, while those who rely on a stellar past without investing in the future fade into oblivion. It has been that way throughout history. No exceptions. Ever. Oh, and fewer and fewer good “jobs, jobs, jobs.”
Tax-incented “job creators” are also motivated to use newfound expansion money – where they project economic opportunity – to invest in automation… not labor. So the money that used to be paid to those displaced workers is now paid to those who own the machines. And where labor is necessary, increasingly, it is for short-term contract labor, a harsh reflection of the new “gig” economy where workers have no benefits. Accelerating polarization, economic inequality.
That most permanent workers demand some form of a healthcare package – in a nation with far and away the most healthcare-cost nation on earth – is a further disincentive for companies to expand their workforce. This little factor led American car manufacturers to move tons of manufacturing plants to Canada where the hourly rates were the same, but healthcare was covered by a very effect government single-payer governmental healthcare system. $1,500 a car back then. A big deal.
True, we are at a disadvantage in healthcare. When healthcare became a governmental benefit, Canada was then really a part of the UK, and generally, Europe’s healthcare grew in a period of low economic, post WWII growth (rebuilding from the damage)… so prices for doctors and hospitals were comparably moderate. U.S. healthcare grew up, without WWII damage, in a period of extreme prosperity, strong unions, where medical costs escalated accordingly. So while most nations keep their healthcare costs under 10%+ of their GDP, we spend 20% of our GDP. Thus, a 10% reduction in our healthcare costs becomes a 2% slam to our GDP. But you can clearly see how lack of affordable healthcare makes the United States that much less competitive and how our cost-history make solving our healthcare issues “very complicated.” Little wonder that a 20% sector is attracting the most job growth.
Yet almost every major corporate focus, driven to increase efficiencies and hence profitability, is on using technology to replace labor. In the early years, the first jobs to go are those requiring the least skills – those requiring a high school or less education. Routinized manufacturing, low level bookkeeping and data tracking/storage, even retail sales (do you use Amazon?)… soon to move on to any job requiring driving a car or truck. As Donald Trump purges undocumented workers from construction and agriculture, do not be surprised as sophisticated “picking machines” and “drywall installation robots” take over. Consumer prices will soar; job creation, not so much. sIn time, artificial intelligence will also slowly slam higher level jobs, from financial analysts rising to doctors and lawyers.
Most of us grew up enamored of cars. Love ‘em. Fast, sleek or just plain practical. But as younger generations enter the job market, where inflation-adjusted pay ain’t what it used to be, increasingly they are moving closer to the center of cities (where the jobs are), using mass transportation… and where customized transport that used to be provided by car ownership, turning to Uber and Lyft instead. Owning a car is just too expensive when your pay is low and rent is high. When cars do become driverless, which is inevitable, the thrill of driving a car will slide farther down the scale of “I need that.” But try and pry a smart mobile phone from the hands of Y and Z generation-people and watch them fight! A different world.
So you will get a polarization in labor that reflects and exacerbates income inequality to politically unsustainable. Sooner or later the American body politic will understand that a populist pledge for new and better jobs is a manipulative sham. We have absolutely no near-term or long-term realistic plan on how to deal with a world where most jobs have been or will be replaced by self-teaching automation. Socialism? Taxing the automated machines as if they were workers? Universal basic income? Really? In the United States? But sooner or later…
So now we come to perhaps the most egregious jobs-pledge in recent politics: deregulating job safety, financial and environmental regulations in the name of reinstating “King coal” as the nation’s primary energy source. Nobody who can see the obvious has the slightest belief that this will work, only desperate coal miners grasping at non-existent straws from truly lying politicians. As international pressures mount – note how G-7 leaders pressed the president to honor the Paris climate change accords – and global demand for coal plummets (driving the price to levels where it will soon be uneconomic to extract), coal is, you should forgive the expression, toast… burnt toast, but toast nonetheless. And the notion of “clean coal” – a euphemism for shoving coal-processing and burning effluents into deep underground spaces for future generations to deal with – is a great big lie.
Where coal is being mined in high labor-cost countries like the U.S., it is subject to the same implementation of labor-saving technologies applied to the mining and oil/gas industry in this modern era. “With much of the low-lying fruit already picked with respect to global resources, the current generation of miners is facing the prospect of having to drill deeper in more remote areas while also processing ore bodies of lower concentrations. This often means having to operate in more dangerous situations while creating more waste.
“The new generation of automation and control (A&C) technologies is expected to play a key role in helping mining companies tackle these new challenges… ‘Automation and control for leading companies is seen as a major differentiator,’ says Bill Ellerton, mining expert with Siemens Ltd. A&C can give companies greater control over levels of granularity for what they're managing, and, as Ellerton points out, ‘smart mines are more competitive from the start.’” Mining-Technology.com (May 2008).
A January 25th report from Brookings fills in the details: “automation has been eating into coal jobs over a long period of time—years before concerns about climate change led to the environmental regulations that President Trump solely blames for the industry’s decline. Nationwide, employment in the coal mining industry peaked in 1920, when it employed roughly 785,000 people. The more recent decline started in 1980, when the industry employed approximately 242,000 people. By 2000, 15 years before the Environmental Protection Agency first proposed the Clean Power Plan and released new pollution guidelines to cut toxic emissions from power plants, industry employment had dropped to 102,000. By 2015, coal mining had shed 59 percent of its workforce, compared to 1980…
“In the next decade, the coal mining industry will likely lose even more jobs to automation. According to a report from the International Institute for Sustainable Development (IISD) in Winnipeg, Canada, the mining industry is primed for automation. It is highly capital intensive, pays relatively well, and buys expensive equipment. The industry has already adopted various automated technologies, including autonomous haul trucks and loaders; autonomous long-distance haul trains; semi-autonomous crushers, rock breakers, and shovel swings; automated drilling and tunnel-boring systems; automated long-wall plough and shearers; autonomous equipment monitoring; and GIS and GPS technologies. All of these technologies are already in use, and their deployment will be ramped up in the next 10–15 years…
“The IISD report concludes that automation is likely to replace 40–80 percent of workers in a mine, with newer mines and those with many years of life left most susceptible to automation.”
What’s worse, industry-leaders have seen the handwriting on the wall; they know that consumers want clean industry in their neighborhoods, that those who smear the environment will get massive bad publicity if not massive lawsuits. So notwithstanding our government’s new climate-change-denying-deregulating mantra, coal is over and not coming back. “The pressure to shift more of the country’s electric supply to renewable sources is not just a rallying cry for environmentalists. Some of the power industry’s biggest customers, like General Motors and Microsoft, have made a commitment to clean energy. And to help them meet it — and keep them from taking their business elsewhere — utilities are changing their ways.
“West Virginia, where coal is king, is no exception… Appalachian Power, the leading utility there, is quickly shifting toward natural gas and renewable sources like wind and solar, even as President Trump calls for a coal renaissance. Appalachian Power still burns plenty of coal, but in recent years it has closed three coal-fired plants and converted two others to gas, reducing its dependence on coal to 61 percent last year, down from 74 percent in 2012.” New York Times, May 26th.
Meanwhile, companies now feel free now to dump industrial waste into public waterways and into the atmosphere. Changing weather patterns, insect/disease migration and encroaching seas continue to wreak global havoc. Is it worth it to support a false and unsustainable jobs-pledge against decimating our environment?
Oh, and did you note how this blog didn’t even address the impact of globalization – which may have positive benefits for most of us but always displaces some of us? How our raising tariffs to protect uncompetitive industries will generate trade wars that will hurt all of us? All part of the stark mythology of “jobs, jobs, jobs.”
I’m Peter Dekom, and I wonder how many of these inane and self-destructive policies are irreversible.
Saturday, May 27, 2017
As the last presidential election reflects, a conservative Republican candidate can almost never win an election based on a popular vote. The same is true for state offices and Congressional districts in most of the states with large urban populations. Simply put, the majority of America is no longer comprised of white traditionalists… the bulwark of the Republican constituency. If popular voting were the rule (it’s clearly not), they would have to sway Democrats to their side to win that popular vote. As we shall later, the upcoming battleground just might be the 2020 U.S. Census – the legal determinant of Congressional districting – where Republicans are figuring out how to negate the obvious.
But as we know, Congressional and state districts are not determined by mandatory objective criteria, rather by state legislative bodies. The Census may provide a determination of how many representatives-per-state get allocated towards the House, but the state gets to determine how those votes are implemented by defining district borders. The Constitution specifically provides “the times, places and manner of holding elections for senators and representatives shall be prescribed in each state by the legislature thereof.” That the vast majority of states are dominated by Republican legislatures and most with GOP governors has led to so many conservative states’ adopting laws that very specifically focus on maximizing white traditionalists and minimizing any demographic that would likely vote Democrat.
The acceptance of this long-standing political manipulation, repeatedly evident with recent presidential elections where the popular vote was usurped by the Electoral College (which is based on those districts), was first labeled “Gerrymandering” in an 1812 Massachusetts election. A political cartoon noted that the artificially-drawn district, favoring incumbent Governor Elbridge Gerry and his anti-Federalist cronies, looked a lot like a salamander. The right to redistrict has long been held as the reward for victorious parties to perpetuate their victory. Just garden-variety American politics. But in this era of out-spoken anger, crude personal attacks in so many of our elections, fury at the “mainstream media,” white backlash and what seems to be irreconcilable polarization, the GOP is hell-bent on taking every step it can to disenfranchise non-white, non-traditionalist voters. They cannot let popular, one person-one vote take effect.
Here’s how gerrymandering works (reflected in the above map): “The party in power typically wants to remain in power and keep the opposing party from winning seats. In many areas, this has led to bizarrely shaped electoral districts. Some are ‘packed’ with voters from that state's minority party, to prevent voters in an area from winning more than one seat. Elsewhere, deliberately ‘cracked’ voting blocs are spread across multiple districts to diffuse their influence and make their party less competitive.” NPR.com, November 22, 2016. But until fairly recently – citing both the above constitutional mandate and the fact that courts are ill-equipped to supervise and implement redistricting – courts have been loath to usurp state-determined electoral districts.
But the rather consistent efforts of Republican conservatives to marginalize non-GOP voters has ignited a new level of judicial review. Republicans tried, and failed under such scrutiny, to declare as unconstitutional, non-partisan voter-elected redistricting commissions. Later, North Carolina got slammed twice in such judicial reviews.
First, the Supreme Court let stand (refused to hear the case) a federal appeals court that struck down that state’s voter ID requirements saying that the law targeted “African-Americans with almost surgical precision.” The N.C. legislative leaders pledged they would pass new ID laws until they got their way. Then came the second slam. On May 22nd, “[isn Cooper, Governor of North Carolina vs. Harris, the] U.S. Supreme Court … ruled that Republicans in North Carolina unlawfully took race into consideration when drawing congressional district boundaries [specifically the 1st and 12th districts depicted in the above map], concentrating black voters in an improper bid to diminish their statewide political clout.
“The justices upheld a lower court's February 2016 ruling that threw out two majority-black U.S. House of Representatives districts because Republican lawmakers improperly used race as a factor when redrawing the legislative map after the 2010 census.” TheFiscalTimes.com, May 22nd. But again, the N.C. legislature claimed that this decision clearly usurped the constitutional mandate that states determine their own districts. The court did not, however, suggest it would itself redraw those districts.
And it’s not as if we no longer have an objective measure of how to draw Congressional districts. For example, Moon Duchin (an associate professor of Mathematics at Tufts University in Medford, Massachusetts) has defined a geometrically-based algorithm that can plot physical distances within a proposed district, factoring in relevant Census data, and objectively determine whether such district is in fact gerrymandered. Will the GOP-dominated legislatures get the message? Probably not.
“The Supreme Court's refusal to breathe new life into North Carolina's sweeping voter identification law might be just a temporary victory for civil rights groups… Republican-led states are continuing to enact new voter ID measures and other voting restrictions, and the Supreme Court's newly reconstituted conservative majority, with the addition of Justice Neil Gorsuch, could make the court less likely to invalidate the laws based on claims under the federal Voting Rights Act or the Constitution.” Associated Press, May 16th.
Obsessed with having lost the popular vote, and despite overwhelming evidence that voter fraud is almost non-existent in this country, Donald Trump appears to be focused on repressing non-GOP voters under the fraudulent cry of “voter fraud.” “Voter fraud has been an issue the president has evidenced some interest in. As a candidate, Trump began questioning election results back in the fall of 2016. He repeatedly claimed the 2016 presidential election was ‘going to be rigged’ months before voters hit the polls, and after questioned whether he would have won the popular vote ‘if you deduct the millions of people who voted illegally.’ (Based on most reliable sources, Trump lost the popular vote by more than 2.8 million votes.)” Christopher Coble on blogs.findlaw.com, May 15th.
So in early May, Donald Trump signed an executive order “creating the Presidential Advisory Commission on Election Integrity to investigate voting processes and registration for federal elections. Ostensibly, this commission will root out past voter fraud and advise the Oval Office on measures to prevent it in the future.” Coble. Effectively, this commission has been charged to find fraud and sustain the president’s view. Presumably, such findings – unsustainable in any objective sense – will undoubtedly be used to support new minority-restrictive voter ID efforts that are plainly focused on enhancing Republican voting power.
But all of the above pales in comparison to a much bigger effort: to hamper the ability of the U.S. Census to make an accurate count of demographic reality… by seriously underfunding the Census Bureau. The Census is also the basis for the allocation of federal funds to the states. Based on numerous and credible academic studies, we know what the 2020 results should be.
But, by cutting off the necessary Congressional budgetary support for the Bureau, it is very like that too many non-GOP people will of necessity be under-counted. Frustrated with the Trump administration’s defunding, thirty-year Census Bureau veteran, Director John Thompson, resigned without explanation effective at the end of June. In April, Congress rejected the Bureau’s request for much of its requested increased funding to implement software systems upgrades.
Donald Trump, who has consistently challenged government statistics (calling them “fake” numbers), gets to appoint Thompson’s successor. Further, just think how a simple tweet from the president denigrating any Census data that countered his imagined and desired result would seriously undermine that agency’s credibility, particularly with Trump’s “fake news”-obsessed base.
It seems that reaching out and identifying the poor and lower-on-the-economic-ladder ethnic and racial minorities is far more labor intensive (read: expensive) than tallying the much-easier-to-reach-and-identify white mainstream.
Add that to the possible impact of that new Trump appointee: “There are concerns that whoever is tapped may politicize the Census, says Bruce Bartlett, a former aide to Ronald Reagan and George H.W. Bush. It’s up to the director, after all, to decide how much effort should be put into tracking down hard-to-find populations. And if he or she makes choice that wind up, say, excluding minorities, that could unfairly ‘shift representation and money from blue states to red states,’ Bartlett says.” Time, Volume 189, No 20, May 2017 at page 18. Could this one simply pass and slip under our radar? I guess it’s up to all of us to raise a cry for fairness and equal voter access for all Americans.
And if Democrats think this will all work out in their favor, without a serious recalibration of their priorities, they need a reality check. Even after admittedly body-slamming a pretty innocuous reporter for a British newspaper the day before a special election to replace Montana’s only representative in the House, Republican Greg Gianforte crushed his Democratic opponent, Rob Quist, by seven percentage points. I should mention that Steve Bullock, Montana’s governor, is a Democrat who, in 2012, won 87% of the vote. Read the tea leaves, Dems!
I’m Peter Dekom, and if you think you are living in a representative democracy, think again!
Friday, May 26, 2017
In late May, Mr. Diplomacy, Donald “the Charmer” Trump took his show on the road in his first foreign trip as president. After basking in the glow of his “adoring” Middle Eastern sycophants (both of which are heavily-dependent on American arms) – Saudi Arabia and Israel (the U.S. is its only major ally) – then spinning as positive a rather obviously disastrous meeting with the Pope at the Vatican, Donald Trump turned his rippling-muscle-charm offensive towards his European allies in Brussels (NATO) and then in Sicily (G-7 meeting). Zero press conferences. Wonder why? A litany of awkward handshakes and even more awkward body language.
It was stunning to watch our President, attending the NATO summit in Brussels, literally shove the Prime Minister of Montenegro aside without even acknowledging his existence (pictured above) and to watch the smirks on the faces of major world leaders at that same meeting as he chastised them for insufficiently funding that organization’s budget.
As allegations of deeper levels of involvement of Trump’s inner circle with Russian operatives raged through the American press and as yet another federal appellate court sustained an injunction against his travel ban, the Donald applied his domineering, take-charge bullying tactics against nations that are purportedly on our side of so many global issues. He clearly treats Russia and Vladimir Putin – rather obviously serious long-term foes – better, a reality not lost on global leaders. Sicily was even less successful.
In the wake of tensions emanating after the horrific carnage in Manchester, bully-Trump kept up the attacks on his European allies (?). His next target was Germany, most notably their biggest industry: automotive. Notwithstanding a rather large presence of German manufacturing that actually takes place at German car plants here in the United States, Trump took on Germany’s Angela Merkel – clearly the most powerful leader in post-Brexit Europe – rather directly on the issue of car exports. Too bad that U.S. car-makers have been unable to match the values that too many Americans see in German cars. We need trade barriers because American car companies cannot deliver the same level of quality? Huh? That Europeans really don’t think American cars can match the German counterparts? Americans scared of competition? Really?
“‘The Germans are bad, very bad,’ Trump told EU officials in a closed-door meeting, [German journal] Der Spiegel reported, citing unidentified attendees. ‘Look at the millions of cars that they sell in the U.S. Terrible. We’re going to stop that.’…
“German carmakers found themselves at the receiving end of renewed attacks by President Donald Trump, who reportedly chided them for selling too many vehicles in the U.S., contributing to a lopsided German trade surplus that’s hurting the U.S. economy…
“Trump has repeatedly criticized Germany’s high trade surplus with the U.S. In a Bild newspaper interview in January, he luxury-car maker with a 35 percent import duty for foreign-built cars sold in the country. ‘If you go down Fifth Avenue everyone has a Mercedes Benz in front of his house,’ he told Bild, while lamenting the lack of Chevrolets in Germany. has withdrawn the brand from Europe for some years.Bottom of Form
“German carmakers like , and BMW have responded to the attacks with a mix of defiance and mollification. BMW Chief Executive Officer Harald Krueger, one of a small group of business leaders to accompany German Chancellor Angela Merkel on her first trip to visit Trump at the White House, has defended the importance of free trade and noted that BMW’s biggest plant worldwide is in Spartanburg, South Carolina -- making the manufacturer the biggest exporter on a net basis from the U.S.” Bloomberg.com, May 26th.
Unfortunately, a trade war with Germany, given the construction of the European Union (uniform and unified trade and tariff policies), is literally a trade war with the entire E.U. And guess what happens to the U.S. economy in a trade war with Europe? That mainstream media that Trump hates so much is just as anti-Trump “over there.” Der Spiegel, that prestigious German periodical (www.spiegel.de, May 19th) responded that “the EU side was horrified at the extent of the Americans' lack of awareness of trade policy. Apparently, it was unclear to the guests that the EU countries concluded trade agreements only jointly.”
The magazine goes on to call for an end to Trump – the title of the article is A Danger to the World; It's Time to Get Rid of Donald Trump. The piece notes that (i) since his resignation, (ii) impeachment, or (iii) declaration of mental incompetence are unlikely given Republican dominance and (iv) that the possibility of a Democratic victory would not even happen for 18 months, it is time that (v) “the international community [needs to make up and find] a way to circumvent the White House and free itself of its dependence on the U.S. Unlike the preceding four options, the fifth doesn't directly solve the Trump problem, but it is nevertheless necessary - and possible…
“Trump has to be removed from the White House. Quickly. He is a danger to the world… Trump is a miserable politician… The U.S. elected a laughing stock to the presidency and has now made itself dependent on a joke of a man.” Whoa! Really strong stuff. The other members of the G7 pressed Trump on the Paris climate change accord, but the best they got was a Trump waffle. Nothing.
Trump’s recent intelligence leaks have also created an atmosphere of distrust among those of our allies who gather and share vital intelligence (particularly in the battle against global terrorists) with us. As Donald Trump slams international leaders, threatens to dismantle long-standing trade agreements, his cabinet officers often follow-up with a then “he really didn’t mean what he said exactly” explanation. The international global community is not particularly attuned to Trump’s proclivity to tweet and shoot from the hip, usually taking our nation’s chief executive officer at his word… underplaying his high-level advisors’ attempts to mollify their concerns.
Much of the damage that Donald Trump has done to our standing in the world and our credibility will be exceptionally difficult to undo. Think about it. If a rational and solid partner for decades can reverse those policies in an instant, if a populist leader is electable in what used to be the greatest democracy on earth, if a more moderate, realistic American president succeeds Mr. Trump, do you really think Europe will simply dismiss Mr. Trump’s presidency as a once-in-an-era fluke? Or worry that no matter what a realistic and well-versed American president might agree to, another extreme replacement can reverse all those efforts in just 100 days?
France seems to appreciate that reality, after watching what a far-right populist candidate did in the United States after winning the presidency. On May 7th, France’s far right populist Trump-clone, Marine Le Pen, was soundly defeated by novice centrist, 39-year-old Emmanuel Macron, by a stunning 65.5%-34.5% margin of victory. Unfortunately for Democrats – who have yet to enunciate a coherent economic policy counter to Trumpism – the GOP itself appears to be in no immediate danger of being usurped by their counterparts across the aisle.
I’m Peter Dekom, and Donald Trump’s bull-in-china-shop style may well have a permanent negative effort on America’s ability to foster its global interests and defend its borders.
Thursday, May 25, 2017
Just about every financial path endorsed or proposed by the Trump/Pence administration is projected to cause that under-employed/unemployed bulwark of their political base to suffer dearly. The overriding explanation to this rob the poor to incentivize the rich is to bring manufacturing back to these shores and create millions of new jobs or reignite those jobs purportedly extinguished by over-regulation. Some fictional notion of massive growth, which is clearly contrary to the reality of any mature economy. But slashing and burning are coming. Like financial and environmental regulation. Stuff like allowing oil and mining companies to stop worrying about stopping leaks or dumping effluents into the air or local waterways. Or saving “taxpayer first” money by taking down the entire Consumer Protection Agency, which is clear a pain in the butt to corporate America but a saving grace for the consumer with no real power to address being ripped off by big companies otherwise.
This new notion of “taxpayer first” is a pretty obviously blessing to those who pay taxes at the highest brackets. Rich people and very profitable companies. For those who rely on nasty stuff like Social Security and public schools, who are struggling to make ends meet, hoping for a better life for their kids through college or trade school ($$$$$$$), who work for a living, they’re not on the dole, not on welfare, not overtaxing the system… just trying to live, well, their benefits are going down and their costs are going up. For those less fortunate, they simply will lose benefits that keep them alive, from food stamps (Supplemental Nutrition Assistance Program) to medical care. If the Trump/Pence budget submitted on May 23rd is implemented to any significant extent, we will have a lot fewer economically disadvantaged Americans to deal with. They will simply die off. Gratefully, revulsion to this budget is roiling through Congress on both sides of the aisle. Still this Trump/Pence budget betrays its core constituency like no other.
The proposed $1.7 trillion dollar cut to social support systems, even amortized over a decade and part of a reduction in domestic spending by a third, is the death sentence. You can skip over the elimination of the National Endowments for the Arts/Humanities, PBS, etc., and just drill down on the cost of healthcare, especially for those with preexisting conditions (most excluded from care without substantial likely premium increases making such policies unaffordable for the millions of people with serious issues), and you can see how those unable to afford the new, “taxpayer first” healthcare system, will either be moved to the economic edge of paycheck-to-paycheck existence… or over it. If they even have jobs. Vastly lower levels of healthcare at vastly higher costs to the consumer, kind of the opposite of The Donald’s campaign pledges.
“That [$1.7 number above] includes $616 billion from Medicaid, an entitlement program that [Trump] vowed as a candidate not to touch, and the Children’s Health Insurance Program, another entitlement… Other reductions include $142 billion over a decade from federal college loan programs and $72 billion from disability assistance…
“Yet many beneficiaries of the targeted programs are working-class Americans from whom Trump drew so much political support. The scale of proposed Medicaid cuts would probably lead to widespread coverage losses, according to independent experts, some state officials and advocates for children, the elderly and others who rely on the 52-year-old program.
“The House bill to roll back Obamacare — which Trump enthusiastically backed — would lead to about 10 million poor people losing insurance, according to the nonpartisan Congressional Budget Office.
“Medicaid is a pillar of the health law’s expansion of insurance coverage and has helped drive a historic drop in the nation’s uninsured rate. Nationwide surveys suggest at least 20 million previously uninsured Americans have gained coverage since 2014.
“The law makes hundreds of billions of dollars of federal aid available to states to extend Medicaid coverage, including to low-income childless adults, a population that had been largely excluded from the program. Historically it was limited to poor children, pregnant women, the elderly and people with disabilities.” Los Angeles Times, May 23rd.
While it is clear that the Senate will make major changes, “A [GOP] bill to dismantle the Affordable Care Act that narrowly passed the House this month [May] would leave 14 million more people uninsured next year than under President Barack Obama’s health law — and 23 million more in 2026, the [non-partisan] Congressional Budget Office said Wednesday [5/24]. Some of the nation’s sickest would pay much more for health care…
“In many states, insurance costs could soar for consumers who are sick or have pre-existing conditions, while premiums would fall for the healthy, the new estimate concludes… In states that obtain waivers from certain health insurance mandates, ‘premiums would vary significantly according to health status and the types of benefits provided, and less healthy people would face extremely high premiums,’ the budget office said…
“‘Unless you’re a healthy millionaire, Trumpcare is a nightmare,’ said Senator Chuck Schumer of New York, the minority leader. ‘This report ought to be the final nail in the coffin of the Republican effort to sabotage our health care system.’… Insurance is, by definition, a pooling of risks, but the budget office said the House bill could cause a fragmentation of the market.” New York Times, May 24th.
But defense spending will add half a trillion dollars over ten years, and the very notion of having an economy swell from his incentives to the rich is little more than political propaganda. Bringing manufacturing back to America? It will line the pockets of those who own the mechanisms of automation – labor-saving devices – and most definitely not workers such machines were designed to replace. By privatizing infrastructure development, Trump enables some very well-heeled companies to charge decades of tolls and other user fees to ordinary Americans using roads and bridges just to get to work. And seriously, he will not make much in the way of creating demand for much-maligned coal… so those workers will wait for a return to those jobs… in vain.
Donald now courts his conservatives, at the expense of his constituency, with deficit reduction as a major plank, along with tax cuts that will go well over 90% to those in the highest income brackets. The rich get richer and the poor and middle class live with the cuts to benefits and services as well as a sharp increase in the cost of living. But, claims Mr. Trump, a booming economy will float all boats… eventually. Nevertheless: “Drastic cuts to programs, from agriculture to Medicaid, have drawn blowback from lawmakers in districts whose constituents would stand to be affected by the slashes.” AOL.com, May 23rd. Dems as well as Republicans.
“In its inaugural budget, the Trump administration projected that booming economic growth would allow the president to keep a wide range of expensive campaign promises while eliminating federal deficits in 10 years… It is wishful thinking.
“The budget promises a deep tax cut for businesses and consumers that would not reduce federal revenue. An increase in military spending would be offset by trillions of dollars of unspecified or loosely sketched reductions in federal spending… And it all works because the budget assumes an acceleration of economic growth to an annual pace of 3 percent a year, much higher than the post-recession average of 2 percent.
“‘I see no way that’s going to remotely happen,’ said David A. Stockman, the budget director under President Ronald Reagan. He noted that the White House is depending on the continuation of an economic expansion that is already among the longest in American history. ‘It assumes you’re going to go 206 months without a recession, which has never happened,’ he said. Not in the United States, at least.
“Presidential budgets are political statements — wish lists that Congress never grants in full, and sometimes rejects completely. A preliminary version of President Trump’s plan already got a frosty reception on Capitol Hill even though Republicans control both houses of Congress. Many Republicans share the Democrats’ wariness about large-scale cuts to the social safety net. And increased military spending would require Democratic support to lift the caps imposed by the Budget Control Act of 2011, giving the minority party valuable leverage.
“Strikingly, Mr. Trump’s budget would increase the share of the nation’s economic output the federal government collects each year. The Congressional Budget Office projected in January that under current law the government would collect 18.37 percent of gross domestic product in 2027. Mr. Trump’s budget projects that the government would collect 18.43 percent — even after a proposed tax cut. Because the White House also projects faster economic growth, the combined effect would increase federal revenues over the 10-year period by an estimated $2.7 trillion.” New York Times, May 22nd. Yeah, even Republican economists have serious doubts.
But there is more of a direct dollar payback to those who need that extra cash the least, people who don’t hire waves of well-paid workers without a clear business plan to make more money. And if consumers have even less discretionary income to spend because life will be that much more expensive under all such changes… And if we have to replace all those undocumented workers to the other side of a wall Mexico will never pay for, exactly what do you think will happen to food prices and construction costs? Tax cuts for the rich do not address any of these issues.
“Even less specificity was offered on the tax plan, which Mr. Trump’s economic team has promised will become law by the end of this year. [Mick Mulvaney, director of the Office of Management and Budget] said Monday [5/22] that the budget projected that the proposed tax cuts would not increase the federal debt because they would produce offsetting economic growth.
“That assertion is disputed by a wide range of economists, both liberal and conservative. The Committee for a Responsible Federal Budget estimated last month that the ideas presented by Mr. Trump, including cutting the corporate tax rate to 15 percent from 35 percent and doubling the standard deduction for individual taxpayers, could reduce tax revenues by $7 trillion over 10 years.” NY Times.
Trump math gets even worse when you really look at it… counting numbers twice to get the desired result. “Former Treasury Secretary Larry Summers, in a Washington Post column on Tuesday [5/23], said that the idea was a ‘logical error of the kind that would justify failing a student in an introductory economics course.’
“‘Apparently, the budget forecasts that U.S. economic growth will rise to 3.0 percent because of the administration's policies — largely its tax cuts and perhaps also its regulatory policies,’ Summer wrote. ‘Fair enough if you believe in tooth fairies and ludicrous supply-side economics.’… The administration is saying the tax cuts will not only pay for themselves, but also earn the country enough to make up the deficit. Essentially, what they billed as a revenue-neutral tax plan will now evidently be revenue positive.
“As Summers put it this math does not work ‘in a world of logic… This is a mistake no serious business person would make,’ Summers said. ‘It appears to be the most egregious accounting error in a presidential budget in the nearly 40 years I have been tracking them.’ Maya MacGuineas, president of the Committee for a Responsible Federal Budget, also took issue with the apparent double-counting in a statement Monday [5/22].’ AOL.com, May 23rd.
Money lies seem to be everywhere you look, even in the little things: “Just before taking office, President Donald Trump promised to donate all profits earned from foreign governments back to the U.S. Treasury… But MSNBC has learned the Trump Organization is not tracking all possible payments it receives from foreign governments, according to new admissions by Trump representatives. By failing to track foreign payments it receives, the company will be hard-pressed to meet Trump's pledge to donate foreign profits and could even increase its legal exposure.
“The Trump Organization does not ‘attempt to identify individual travelers who have not specifically identified themselves as being a representative of a foreign government entity,’ according to a new company pamphlet. The policy suggests that it is up to foreign governments, not Trump hotels, to determine whether they self-report their business.” NBC News, May 24th.
Democrats may press non-economic issues to the fore, but perhaps they just don’t understand their own country well enough. While the pursuit of Russian collusion with the Trump campaign is clearly important to the survival of democracy, as equal treatment under the law is a basic American premise that must be sustained, and as humanitarian values and gender/ racial/religious equality are Western standards… in the end, “it’s the economy stupid.” If the Democrats are dumb enough not to prioritize that reality, knowing that until their economic world is stabilized, most Americans won’t care about much else, the Trump/Pence-Republicans will endure and triumph with their policies that almost always favor the wealthiest in the land.
I’m Peter Dekom, and Trump’s entire view of American wealth and how most Americans live and work is nothing more than Easter Bunny economics elevating the rich at every major decision threshold… at the expense of everybody else.