Trashing The Economy

Schadenfreude would be appropriate if real people weren’t being hurt.

Recent business news included the planned overseas move by that icon of Americana, Harley-Davidson. Although a quote attributed to the CEO to the effect that Trump is a moron who knows nothing about either trade or economics turned out to be bogus, the  decision to move production offshore sends a not-dissimilar message.

As Paul Krugman noted in a recent column, Harley-Davidson may be an icon, but it isn’t really a big economic player.

Nonetheless, I think the Harley story is one of those anecdotes that tells us a lot. It’s an early example of the incentives created by the looming Trumpian trade war, which will hurt many more American companies and workers than Trump or the people around him seem to realize. It’s an indication of the hysterical reactions we can expect from the Trump crew as the downsides of their policies start to become apparent — hysteria that other countries will surely see as evidence of Trump’s fundamental weakness.

No President can be an expert on all of the subjects on which a President must make consequential decisions. Most of those who have occupied the Oval Office have compensated for that reality by surrounding themselves with credentialed, expert advisers. But then, most of Trump’s predecessors were mentally stable enough to recognize that a need for advice about a highly technical area isn’t tantamount to an admission of inferiority.

There’s a reason the Trump Administration is filled with incompetents and sycophants–increasingly from Fox News–and even then, has seen unprecedented turnover.

And what Trump’s alleged experts have to say about the controversy offers fresh confirmation that nobody in the administration has the slightest idea what he or she is doing.

About that trade war: So far, we’re seeing only initial skirmishes in something that may well become much bigger. Nonetheless, what’s already happened isn’t trivial. The U.S. has imposed significant tariffs on steel and aluminum, causing their domestic prices to shoot up; our trading partners, especially the European Union, have announced plans to retaliate with tariffs on selected U.S. products.

And Harley is one of the companies feeling an immediate squeeze: It’s paying more for its raw materials even as it faces the prospect of tariffs on the cycles it exports. Given that squeeze, it’s perfectly natural for the company to move some of its production overseas, to locations where steel is still cheap and sales to Europe won’t face tariffs.

Opposition to tariffs used to be a hard-and-fast position of (what used to be) the Republican Party. It was a position I heartily endorsed, for reasons that Krugman alludes to and all Americans will soon begin to appreciate. That Harley and other companies would choose to move in reaction to those tariffs was entirely predictable.

But while it’s what you’d expect to see, and what I’d expect to see, it’s apparently not what Trump expected to see. His view seems to be that since he schmoozed with the company’s executives and gave its stockholders a big tax cut, Harley owes him personal fealty and shouldn’t respond to the incentives his policies have created….

So what do Trump’s economists have to say about all of this? One answer is, what economists? There are hardly any left in the administration. But for what it’s worth, Kevin Hassett, the chairman of the Council of Economic Advisers, isn’t echoing Trump’s nonsense: He’s uttering completely different nonsense. Instead of condemning Harley’s move, he declares that it’s irrelevant given the “massive amount of activity coming home” thanks to the corporate tax cut.

That would be nice if it were true. But we aren’t actually seeing lots of “activity coming home”; we’re seeing accounting maneuvers that transfer corporate equity from overseas subsidiaries back to the home corporation but in general produce “no real economic activity.”

As real economists and business reporters have documented, those tax reductions have once again failed to “trickle down” to the workers they were supposed to benefit. Most have been used in corporate stock buy-backs. Meanwhile, Congressional Republicans are voting to rob Social Security and Medicaid and make access to other social welfare programs more difficult–just as the Administrations uninformed trade war policy threatens to tank the economy. We are already seeing a weakening in consumer spending.

There is a (very unattractive) part of me that is watching this train wreck as vindication–this is what happens when you turn government over to people who ignore history and evidence and scorn the “effete elites” who actually know what they’re doing.

Schadenfreude.

But then I think of all the people who will suffer needlessly thanks to this clown and his circus…

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Our Very Own Pravda

Tom Wheeler headed the Federal Communications Commission during the Obama Administration. From all indications, he took his responsibilities seriously; he was a vocal defender of Net Neutrality, for example, unlike his replacement, a former Verison executive whose decisions have been reliable wins for big telecom companies.

So when Wheeler sounds an alarm, that alarm is worth heeding.

Wheeler has indeed sounded an alarm. In a report for The Brookings Institution, he highlights a recent, blatant effort at propaganda from Sinclair Broadcasting (aka the Fox News of “local” television–or, as John Oliver dubbed it, “the most influential media company you never heard of”).

“Many members of the media and opponents of the president have used this issue [separation of children from immigrant families] to make it seem as if those who are tough on immigration are somehow monsters. Let’s be honest: while some of the concern is real, a lot of it is politically driven by liberals in politics and the media.”

The above is the conclusion of a two-minute “must run” that Sinclair Broadcast Group forced its over-100 local television stations to air. Read by Sinclair political director (and former Trump White House advisor) Boris Epshteyn, the attack on the media and those who might disagree with the president is no great surprise.

Wheeler has been following the activities of the agency he headed, and he reports that under Trump,  the Commission has been diligently working to assure that Sinclair is able to expand the reach of its partisan political messaging.

By rewriting the rules governing local broadcasting, the Trump FCC is allowing Sinclair to turn supposedly “local” television operations into a coordinated national platform for the delivery of messages such as the one cited above.

When television was a relatively new communications medium dependent upon use of publicly-owned airwaves, the licenses of locally owned and operated stations were conditioned on undertakings to operate in the public interest, as local outlets for local news and information. In order to protect that localism, the law forbid national media companies from acquiring them.

However, the Trump FCC effectively allows a company to exceed the ownership limit. The agency replaced the rule prohibiting “sidecar agreements,” where a company claims not to own a station’s license despite collecting all the revenue, making all the hiring and programming decisions, and forcing the station to carry “must-run” content. Sinclair lawyers originally conceived these legal fictions to skirt the rules protecting localism, and the FCC rubber-stamped the charade.

While ordinary Americans are responding–haphazardly–to the White House’s daily, highly visible assaults on democratic norms and the rule of law, Trump’s appointees are working behind the scenes to dismantle the rules and regulations that have been put in place to keep plutocrats from raping the rest of us. What gets lost in all the anti-regulatory rhetoric is the fact that we owe clean air and water, safe food, and honest news reporting, among other important things, to good regulations.

Good regulations ensure that “level playing field” we all claim to support. I’ll be first to concede that not all regulations are good, but the answer is not a wholesale dismantling of the rules–if a regulation is outdated, or counterproductive, that particular regulation can be changed. That, of course, takes work–not to mention subject-matter knowledge and a commitment to the common good.

It is impossible to overstate the damage that has been done by propaganda arms like Fox News and Sinclair Broadcasting. There are plenty of other propaganda outlets on both the Left and Right, preaching to their respective choirs, but none have the reach and influence of Fox and Sinclair. Sinclair’s propaganda is particularly potent because it is unrecognized– cloaked in the pretense of independence and localism.

When Mike Pence was Governor of Indiana, he made a much-derided attempt to establish an “official” state news bureau. Genuine news sources immediately dubbed it “Pravda on the Prairie.”

Thanks to Sinclair and Trump’s FCC, we now have Pravda for the whole country.

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He Probably Shouldn’t Have Run For President…

If there is one thing we have learned about Donald Trump during and since the election, it is that his ego is massively bigger than his IQ. A smarter man would have realized that a spotlight comes with the Presidential territory–and that past criminal activity would eventually be uncovered.

About that spotlight:

The Washington Post, especially, has done significant work uncovering misuse of the Trump Foundation and various other Trump scams. Now, McClatchy’s Washington Bureau has weighed in with itemized evidence of the way Russian oligarchs bailed Trump out of financial difficulties with (many anonymous) cash purchases of real estate, often for dramatically inflated prices.

Aleksandr Burman, a Ukrainian who engaged in a health care scheme that cost the federal government $26 million and was sentenced to a decade in prison, paid $725,000 cash for a condo at a Trump Tower I in Sunny Isles Beach, Fla. in 2009.

Leonid Zeldovich, who has reportedly done extensive business in the Russian-annexed area of Crimea,bought four Trump units outright at a cost of more than $4.35 million, three of them in New York City between 2007 and 2010.

And Igor Romashov, who served as chairman of the board of Transoil, a Russian oil transport company subject to U.S. sanctions, paid $620,000 upfront for a unit at a building adorned with the future U.S. president’s name in Sunny Isles Beach in 2010.

Buyers connected to Russia or former Soviet republics made 86 all-cash sales — totaling nearly $109 million — at 10 Trump-branded properties in South Florida and New York City, according to a new analysis shared with McClatchy. Many of them made purchases using shell companies designed to obscure their identities.

Rep. Adam Schiff of California, the top Democrat on the House Intelligence Committee and a former federal prosecutor, has called evidence of these transactions “deeply troubling.” He also noted that there have been credible allegations of money laundering by the Trump Organization for many years. If these allegations are true, it could pose a real threat to the United States, because Russia would be able to “leverage” evidence of illicit financial transactions against the President.
“Leverage” is a polite word for blackmail.

The all-cash buyers include Alexey Ustaev, founder of a private bank based in St. Petersburg, Russia; Igor Zorin, a government official who runs a state-owned broadcasting company; the wife of hockey player Viacheslav Fetisov; pop star Igor Nikolaev; Roman Sinyavsky, a luxury real estate broker who was one of the first to sell units at a Trump’s South Florida building and Evgeny Bachurin, who Russian President Vladimir Putin fired as head of Russia’s Federal Air Transport Agency before becoming a donor to a political action committee supporting Trump, according to American Bridge….

“We’ve long suspected that Donald Trump’s businesses were a front for money laundering and our research suggests it could be true,” said Harrell Kirstein, communicators director for the Trump War Room at American Bridge. “The millions of dollars in previously unreported, all-cash real estate deals we discovered raise troubling questions about who is funding his businesses, why, and what they’re getting in return.”

The linked article has much more detail, including descriptions of several more unsavory buyers, and the extent to which those buyers paid considerably more than market value for the properties.

Anyone who has worked for government at any level–a cohort that excludes Trump, whose ignorance of the most basic premises of governance and law never fails to astonish–knows that public office brings a level of scrutiny with it. Even in our current media environment, where investigative journalism sometimes seems to be on life support, Presidential candidates understand that they will be targets for searching investigation, because citizens have a right to know what sorts of people govern them. (Actually, that curiosity tends to extend well beyond what we’re entitled to know–but it legitimately includes information about dishonest personal behaviors and illegal business practices.)

Trump’s refusal to make his tax returns public whetted that public appetite.

Subsequent revelations, the indictments of multiple campaign functionaries, and more recently, news of the long, cozy relationship between Justice Kennedy’s banker son and the Trump organization, have raised further concerns. (When Justin Kennedy  headed the real estate capital markets division of Deutsch Bank, he apparently authorized huge loans to Trump at a time American banks would no longer touch him).

I don’t know whether proof of Trump’s probable criminal conduct will be emerge before the midterm elections, or whether members of the cult that is today’s GOP will believe even ironclad evidence if it does. Voters can’t depend on that, or on Mueller. But there’s one thing we can depend upon: thanks to that spotlight he constantly craves, reporters will continue to investigate the multiple, credible  accusations against him.

If Trump and his family end up in prison, he’ll have only his ego and ignorance to blame.

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Telling It Like It REALLY Is

Paul Krugman, who never shies away from telling it like it really is, has summed up the “conservatism” of today’s GOP in the first paragraphs of a recent column:

News item #1: The Trump administration is taking thousands of children away from their parents, and putting them in cages.

News item #2: House Republicans have released a budget plan that would follow up last year’s big tax cuts for corporations and the wealthy with huge funding cuts for Medicare and Medicaid.

If you think these items are unrelated, you’ve missed the whole story of modern American politics. Conservatism – the actually existing conservative movement, as opposed to the philosophical stance whose constituency is maybe five pundits on major op-ed pages — is all about a coalition between racists and plutocrats. It’s about people who want to do (2) empowering people who want to do (1), and vice versa.

For a long time–especially when I was still a Republican–I was sure that the two wings of the GOP were headed for a split. The genuine fiscal conservatives I knew–people who defined fiscal conservatism as economic prudence and “pay as you go,” not as favoring the wealthy at the expense of the poor–were as appalled as I was by the hypocritical piety of the self-identified “Christian” wing, which even then was willing to turn a blind eye to very unChristian behavior so long as it cemented their privileged status and their right to impose their beliefs on everyone else.

I utterly failed to realize what Krugman points out: once you separate genuine fiscal conservatives from apologists for the greedy, and once you rip off the false facade of “policy differences” from the racists, the two wings actually complement each other.  Genuine fiscal conservatives departed the GOP some time ago; Trumpism has removed the facade from racism.

Until Trump, the ugliness of this deal was cloaked in euphemisms. As Lee Atwater famously put it,

You start out in 1954 by saying, “Nigger, nigger, nigger.” By 1968 you can’t say “nigger”—that hurts you, backfires. So you say stuff like, uh, forced busing, states’ rights, and all that stuff, and you’re getting so abstract. Now, you’re talking about cutting taxes, and all these things you’re talking about are totally economic things and a byproduct of them is, blacks get hurt worse than whites.

But the reality was always there. The conservative economic agenda has never been popular, and it is objectively against the interests of working class voters, whatever their race. In fact, whites without a college degree are the biggest beneficiaries of the social safety net. Nonetheless, these voters supported the GOP because it spoke to their racial animosity.

For a while, what Krugman calls “this bait-and-switch” worked; racism was used to motivate the base, but once elections were over, it was mostly shoved back in the closet. As he notes, however, that tactic was ultimately unsustainable. “Sooner or later the people who voted for white dominance at their own economic expense were going to find a champion who would deliver on their side of the bargain.”

Now, many in the plutocrat wing of the GOP seem to be genuinely dismayed by where this is going. They aren’t themselves racists, or at least they aren’t crude racists. But so far they’ve been unwilling to go beyond hand-wringing. Remember, just two Republican senators could stop all of this by saying that they’ll refuse to support Trump judicial appointments and legislation until the cruelty stops; they could bring all the evil to a dead halt by threatening to caucus with Democrats. But not one has stepped forward – because taking such a step would endanger conservative economic policies, and those are evidently more important than human rights.

When members of the “plutocratic wing” decry child separation at the nation’s border, when they join the rest of us by protesting that “this isn’t who we are,” it’s hard to argue with Krugman’s response:

It is who you are: you made a deal with the devil, empowering racism and cruelty so you could get deregulation and tax cuts. Now the devil is having his due, and you must share the blame.

I was wrong to see the two wings of the Republican Party as incompatible. They’re locked into their very own Faustian bargain, and unless and until American voters demand payment, they will both continue getting the benefit of that bargain.

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What Now?

The last week or so has been an absolute tsunami of disappointments, bad news and terrifying omens.

The Supreme Court punted on gerrymandering, and issued several horrifying decisions: it upheld Trump’s travel ban, required public sector labor unions to represent non-member workers  who don’t pay for that representation, and upheld Ohio’s draconian voter purge program, among others.

Every one of those decisions will benefit the GOP in the midterms, and every one of them was 5/4.

Mitch McConnell undoubtedly feels very proud of himself, but the price of those legal victories–won with a “stolen” seat– was the legitimacy of the United States Supreme Court. Americans simply don’t know what a dispassionate Court composed of properly appointed, nonpolitical jurists would have decided, and they are convinced that the Court is now ideological rather than judicial.

Then, of course, we got the news of Justice Kennedy’s (long-rumored) retirement, and McConnell’s gleeful promise to seat a replacement (who will have passed the litmus test) before the midterms.

All this is on the heels of the humanitarian crisis at the border–an entirely unnecessary blot on our national honor (assuming we have any left) brought on by our racist President.

So what now? What should we expect?

Perhaps I’m wrong–I so frequently am–but I think we are heading for a period of civic disturbance that will make the 60s pale in comparison.

I just don’t think good Americans–and I remain convinced that good Americans are the majority–are going to passively watch their country taken down the road to fascism (as Madelyn Albright recently warned). We aren’t going to watch children being separated from desperate parents, Social Security and Medicare being raided in order to fund tax breaks for the already obscenely rich, or an economy that had finally recovered being trashed by tariffs imposed by a petulant and ignorant blowhard.

Americans aren’t going to sit still while that blowhard continues to embarrass the country, insult our allies, cozy up to (and probably collude with) our enemies, and divide Americans from each other with an unremitting barrage of racist, misogynistic rhetoric.

Trump’s constant (and ungrammatical) self-glorifying tweets may play well with his base, but they nauseate the rest of us.

The midterm elections will be critically important, but even if a “blue wave” materializes, we will in all likelihood no longer have a court system that defends stare decisis and the rule of law. We will still have the pent-up anger of hardworking Americans who have watched an already inadequate social safety net eviscerated in order to bestow extra dollars on people who don’t need those dollars. We will still experience the fury of women who are being told that they are less than equal, and that the government controls their bodies. And we will still have to deal with the frustration of citizens whose votes are suppressed, aren’t being counted, or are being discounted.

Those and multiple other civic frustrations are already beginning to erupt.

I don’t pretend to know how this will all play out, but I’m pretty sure it is going to get ugly before it gets better. America is in one of those periodic struggles for its soul–a struggle between the “good guys” who care about the common good and their fellow Americans, on the one hand, and the Trumpers who care only about themselves on the other. My bet is on the eventual victory of the good guys–but I know that a hell of a lot of people are going to get hurt in the meantime.

We need to just hang on. The next few years are going to be rough. And dispositive.

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