Public Policy and Governance – Page 158

Those Tax Cuts: Take Two

Reactions to the Trump/GOP tax bill have mostly focused on the domestic consequences of that fiscal abomination: the steeply rising deficits and national debt; the “no show” economic boost; the unconscionable further enrichment of the already obscenely rich; and Mitch McConnell’s stated intent to address that newly massive national debt by cutting programs that benefit the poor and elderly, notably Medicare and Social Security.

What hasn’t been widely reported is what Paul Krugman calls “foreign aid.”

Donald Trump often complains that the media don’t give him credit for his achievements. And I can think of at least one case where that’s true. As far I can tell, almost nobody is reporting that he has presided over a huge — but hidden — increase in foreign aid, the money America gives to foreigners. In fact, the hidden Trump program, currently running at around $40 billion a year, is probably the biggest giveaway to other nations since the Marshall Plan.

Unfortunately, the aid isn’t going either to poor countries or to America’s allies. Instead, it’s going to wealthy foreign investors.

The 2017 Tax Cut and Jobs Act–which, as Krugman reminds us, is the only major legislation Trump can claim thus far– cut taxes on corporations. Significantly. As credible economists predicted, it led to a drastic reduction in tax revenues. Krugman pegs the shortfall at $140 billion just the past year.

Supporters of the bill claimed that the benefits would be passed on to workers in the form of higher wages, and they made a big deal over a flurry of corporate bonus announcements in early 2018. But those bonuses weren’t actually very big, and they didn’t continue.

In fact, at this point it’s clear that the bonus surge, such as it was, was all about tax avoidance: By moving up payments they were going to make anyway, corporations got to deduct the expense at the old, higher tax rate. Now that this option has expired, bonuses have dropped back to their normal level, or even a bit lower.

Job creation? Investments in the business? Nah.

The benefits of the tax cut have gone almost entirely to corporate shareholders, in the form of increased dividends and capital gains from corporations using their windfall to buy back their own stocks.

And a big share of these gains to shareholders has gone to foreigners.

Over all, foreigners own about 35 percent of the equity in corporations subject to U.S. taxes. And as a result, foreign investors have received around 35 percent of the benefitsof the tax cut. As I said, that’s more than $40 billion a year.

Krugman compares Trump’s gift to foreign investors with the amounts we expend on foreign aid.

In 2017, the U.S. spent $51 billion on “international affairs,” but much of that was either the cost of operating embassies or military assistance. The Trump tax break for overseas investors is considerably bigger than the total amount we spend on foreign aid proper.

Now, the U.S. economy is almost inconceivably huge, producing more than $20 trillion worth of goods and services every year. We’re also a country that investors trust to honor its debts, so the tax cut, irresponsible as it is, isn’t causing any immediate fiscal stress.

So Trump’s giveaway to foreign investors isn’t going to make or break us, although it’s probably enough to ensure that the tax cut will be, over all, a net drain on economic growth: Even if the tax cut has some positive effect on the total income generated here (which is doubtful), this will probably be more than offset by the increased share of that income accruing to foreigners rather than U.S. citizens.

Still, even in America, $40 billion here, $40 billion there, and eventually you’re talking about real money. Furthermore, it does seem worth pointing out that even as Trump boasts about taking money away from foreigners, his actual policies are doing exactly the opposite.

I seriously doubt that Trump understands any of this. After all, it’s abundantly clear that he hasn’t the foggiest notion how tariffs work (or don’t). Or how government works, for that matter.

We shouldn’t be shocked to discover that the President is an economic ignoramus.

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When Someone Tells You Who They Are, Believe Them

In the wake of the horrific mass shootings in El Paso and Dayton (ahem–not Toledo), President Trump robotically read the sort of statement Presidents are supposed to issue in such situations.

When questioned, Trump denied that his rhetoric had anything to do with the increase white nationalist violence, despite the fact that his language was echoed in the “manifesto” posted by the El Paso killer. According to media reports, Trump’s reelection campaign has run 2,199 Facebook ads referring to immigration along the US-Mexico border as an “invasion,” the same word used in the manifesto.

The massacres have re-ignited efforts to pass sensible gun regulations, regulations that are critically needed. They have also highlighted the connection between gun violence and the white supremacy this administration encourages.

The Guardian recently reviewed a book describing that link.

Why does the United States refuse to pass new gun control laws? It’s the question that people around the world keep asking.

According to Dr Jonathan Metzl, a psychiatrist and sociologist at Vanderbilt University, white supremacy is the key to understanding America’s gun debate. In his new book, Dying of Whiteness: How the Politics of Racial Resentment is Killing America’s Heartland, Metzl argues that the intensity and polarization of the US gun debate makes much more sense when understood in the context of whiteness and white privilege.

According to Metzl, white Americans are attempting to defend their status in the racial hierarchy by opposing gun control, healthcare expansion or public school funding. Of course, to sane people, that makes no sense; those are positions that end up injuring white guys as much or more than they hurt people of color.

The majority of America’s gun death victims are white men, and most of them die from self-inflicted gunshot wounds. In all, gun suicide claims the lives of 25,000 Americans each year.

In an interview, Metzl explained the link.

So many aspects of American gun culture are really entwined with whiteness and white privilege.

Carrying a gun in public has been coded as a white privilege. Advertisers have literally used words like “restoring your manly privilege” as a way of selling assault weapons to white men. In colonial America, landowners could carry guns, and they bestowed that right on to poor whites in order to quell uprisings from “Negroes” and Indians. John Brown’s raid was about weapons. Scholars have written about how the Ku Klux Klan was aimed at disarming African Americans. When African Americans started to carry guns in public – think about Malcolm X during the civil rights era – all of a sudden, the second amendment didn’t apply in many white Americans’ minds. When Huey Newton and the Black Panthers tried to arm themselves, everyone suddenly said, “We need gun control.”

When states like Missouri changed their laws to allow open carry of firearms, there were parades of white Americans who would carry big long guns through congested areas of downtown St Louis, who would go into places like Walmart and burrito restaurants carrying their guns, and they were coded as patriots. At the same time, there were all the stories about African American gun owners who would go to Walmart and get tackled and shot.

Who gets to carry a gun in public? Who is coded as a patriot? Who is coded as a threat, or a terrorist or a gangster? What it means to carry a gun or own a gun or buy a gun – those questions are not neutral. We have 200 years of history, or more, defining that in very racial terms.

Metzl noted that the period after a mass shooting is often very telling; if a white man was the shooter, the narrative focuses on the “disordered” individual. When the shooter is black or brown, the disorder is cultural and the narrative is about terrorism or gangs.

Or invasions and “caravans.”

Trump and his voters have told us who they are in no uncertain terms. The 2020 election will tell us how numerous those voters are–and how many of the rest of us are sufficiently concerned to vote.

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Automakers Are More Responsible Than Trump

Trump’s war on science and the environment was recently dealt a setback in the form of an agreement between a group of American, Japanese and European automakers and the State of California.

As The Washington Post reported,

Four automakers from three continents have struck a dealwith California to produce fleets that are more fuel-efficient in coming years, undercutting one of the Trump administration’s most aggressive climate policy rollbacks.

The compromise between the California Air Resources Board and Ford, Honda, Volkswagen and BMW of North America came after weeks of secret negotiations and could shape future U.S. vehicle production, even as White House officials aim to relax gas-mileage standards for the nation’s cars, pickups and SUVs.

California’s head air pollution regulator invited the Trump Administration to join the agreement. I don’t know whether she was being tactful or naive. To no one’s surprise, the Administration instead doubled down on its proposal to roll back mileage regulations.

Interestingly, the automobile companies approached California, not the other way around.

In a joint statement, the four automakers said their decision to hash out a deal with California was driven by a need for predictability, as well as desires to reduce compliance costs, keep vehicles affordable for customers and be good environmental stewards.

“These terms will provide our companies much-needed regulatory certainty by allowing us to meet both federal and state requirements with a single national fleet, avoiding a patchwork of regulations while continuing to ensure meaningful greenhouse gas emissions reductions,” the group said.

The deal comes as the Trump administration is working to finalize a huge regulatory rollback that would freeze mileage requirements for cars and light trucks next fall at about 37 miles per gallon on average, rather than raising them over time to about 51 mpg for 2025 models — the level the industry and government agreed to during the Obama administration. The proposal also would revoke California’s long-standing authority to set its own rules under the Clean Air Act, a practice the federal government has backed for decades.

It is hard–no it is impossible–to defend the rollback that the Trump Administration is intent on pursuing. Requiring cars to be more fuel-efficient is self-evidently a desirable goal: it would improve public health, combat climate change and save consumers money at the gas pump, all without compromising safety or inordinately burdening manufacturers.

The companies that are party to the agreement with California represent approximately 30% of the market, but that share could grow significantly if other automakers join, as observers anticipate. The Post reports that just last month, Canada pledged to align its gas-mileage targets with California rather than with the Trump administration.

The idiocy of that administration becomes clearer every day.

The transportation sector has emerged as the single-largest source of greenhouse-gas emissions in the United States, and the future gas mileage of the auto fleet will have a profound effect on the nation’s carbon footprint. According to the State Energy and Environmental Impact Center at the New York University School of Law, the Trump administration’s plan to freeze mileage standards between 2020 and 2026 would increase greenhouse-gas emissions by between 16 million and 37 million metric tons in that period. That is the equivalent of adding between 3.4 million and 7.8 million cars on the road.

Trump officials have consistently rejected the idea that the federal government should adopt policies aimed at weaning Americans off fossil fuels. NHTSA’s own analysis of its proposed mileage freeze projected that the increased greenhouse-gas emissions from the move would not make a major difference, because the world was on track to warm by seven degrees Fahrenheit by the end of the century anyway. (Emphasis supplied)

We’re dying anyway, so let’s allow our donors to make money now.

Words fail.

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Climate Insanity

In Trump’s America, and especially in the wake of the increasing white nationalist mayhem he is encouraging, it’s easy to lose sight of the other damage being done by this utterly corrupt administration.

Take the administration’s wholesale rejection of science.

As Europe tightens restrictions on herbicides and pesticides found to be harmful to humans, the EPA rolls back similar restrictions. The panel of scientists that used to advise policymakers about such threats has been replaced by former lobbyists and industry hacks. Worse still, the administration refuses to admit that climate change is real. It has buried reports from reputable scientists, including those working for the Pentagon.

Last month, The Guardian carried a column by a scientist fired by the administration for insisting on reporting the facts.

The Trump administration’s hostility towards climate science is not new. Interior climate staffer Joel Clement’s reassignmentand the blocking of intelligence aide Rod Schoonover’s climate testimony, which forced both federal employees to resign in protest, are just two of the innumerable examples. These attempts to suppress climate science can manifest themselves in many ways. It starts with burying important climate reports and becomes something more insidious like stopping climate scientists from doing their jobs. In February 2019, I lost my job because I was a climate scientist in a climate-denying administration. And yet my story is no longer unique.

This is why on 22 July I filed a whistleblower complaint against the Trump administration. But this is not the only part to my story; I will also speak to Congress on 25 July about my treatment and the need for stronger scientific integrity protections.

I have worked at the National Park Service (NPS) for a total of eight years. I started out as an intern during the Bush administration, where I experienced nothing like this. I returned in 2012 after earning my PhD, when the NPS funded a project I designed to provide future sea level and storm surge estimates for 118 coastal parks under different greenhouse gas emissions scenarios. This kind of information is crucial in order for the NPS to adequately protect coastal parks against the future effects of the climate crisis.

I handed in the first draft of my scientific report in the summer of 2016 and, after the standard rigorous scientific peer review process, it was ready for release in early 2017. But once the new administration came into power, publication was repeatedly delayed, with increasingly vague explanations from my supervisors. So for months, I waited. And waited. I was still waiting when I went on maternity leave almost a year later in December 2017.

While she was on her maternity leave, she received an email from an NPS colleague, warning her that “senior leadership” was changing her report without her knowledge, eliminating all references to the human causes of the climate crisis. As she points out in her column, this went far beyond normal editorial adjustment. It was climate science denial, and she initiated a months-long battle over her findings.

Senior NPS officials tried repeatedly, often aggressively, to coerce me into deleting references to the human causes of the climate crisis from the report. They threatened to make the deletions without my approval if I would not agree, to release the report without naming me as the primary author, or not release it all. Each option would have been devastating to my career and for scientific integrity.

She stood firm. The NPS was forced to publish the report as written–and then the retaliation began. There were pay cuts. Her research funding was terminated. She eventually joined the growing exodus of scientists from federal agencies.

I think it was Neil DeGrasse Tyson who said “Reality doesn’t care if you believe in it.” While this administration protects the bottom lines of its donors, sea levels continue to rise, the planet continues to warm, and life on earth gets more precarious.

Trump and his “best people” aren’t just corrupt and inept; they are insane–and our children and grandchildren will suffer the consequences.

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Canada Benefits From Our Asinine Immigration Policies

For those who asked: the Kindle version of Living Together is now available.

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Between the tariffs that are destroying the markets of America’s farmers and raising the price of consumer goods in the United States, and an insane and racist approach to immigration that is making it difficult for businesses to hire the people they need , Donald Trump has managed to vastly improve the economy… of Canada.

As Time Magazine has recently reported,

On a recent Tuesday, Neal Fachan walked down a dock in Seattle’s Lake Union and boarded a blue and yellow Harbour Air seaplane, alongside six other tech executives. He was bound for Vancouver to check on the Canadian office of Qumulo, the Seattle-based cloud storage company he co-founded in 2012. With no security lines, it was an easy 50-minute flight past snow-capped peaks. Later that day, Fachan caught a return flight back to Seattle.

Fachan began making his monthly Instagram-worthy commute when Qumulo opened its Vancouver office in January. Other passengers on the seaplanes go back and forth multiple times a week. Fachan says his company expanded across the border because Canada’s immigration policies have made it far easier to hire skilled foreign workers there compared to the United States. “We require a very specific subset of skills, and it’s hard to find the people with the right skills,” Fachan says as he gets off the plane. “Having access to a global employment market is useful.”

Half of America’s annual growth in GDP has been attributed to increasing innovation. While the media and politicians are focused on Trump’s crisis at the southern border, tech executives and economists warn that the growing delays and backlogs for permits for skilled workers at America’s other borders are a more significant challenge. The risk of losing both skilled workers and the companies that employ them to Canada and other more welcoming countries are arguably a bigger problem for our economic future than a flood of refugees–even if those refugees were the problem Trump and his white nationalist base insist they are.

“Increasingly, talented international professionals choose destinations other than the United States to avoid the uncertain working environment that has resulted directly from the agency’s processing delays and inconsistent adjudications,” testified Marketa Lindt, president of the American Immigration Lawyers Association, at a House hearing last week about processing delays at U.S. Citizenship and Immigration Services (USCIS). Lindt’s organization finds that USCIS processing time for some work permits has doubled since 2014, a fact cited in a May lettersigned by 38 U.S. Senators on both sides of the aisle asking USCIS to explain the processing delays.

The backlogs in processing have particularly benefited our neighbor to the north. Canada has adopted an open-armed embrace of skilled programmers, engineers and entrepreneurs at the same time the U.S. is tightening its stance. Research shows that high-skilled foreign workers are highly productive and innovative, and tend to create more new businesses, generating jobs for locals. So each one who winds up in Canada instead of America is a win for the former, and a loss for the latter. “Really smart people can drive economic growth,” says Robert Atkinson, president of the Information Technology and Innovation Foundation, a think tank in Washington, D.C. funded in part by cable, pharmaceutical, television, and tech companies. “There are not that many people in the world with an IQ of 130, and to the extent that we’re attracting those people rather than the Canadians doing so, we’re better off.”

This is what happens when voters resentful of “smarty pants elitists” elect an intellectually-challenged President who is equally threatened by people who actually know what they’re doing, and consequently refuses to appoint competent people to important government positions.

We live in a complicated world. If the Trump Administration has demonstrated anything, it is that appointing ideologues, crooks and simpletons to manage that complexity is a recipe for disaster.

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