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Monday, June 17, 2019

2020: As Yet Unclear

The picture for 2020 is hardly clear. But I for one am happy there are so many Democrats running for president. Let there be a fierce contest of ideas. Let the contestants refrain from personal attacks. Expect the president to be rattled that for now people are paying much less attention to him. Expect him to throw temper tantrums to shift attention away from the contesting Dems to himself. Expect him to make pointed personal attacks.

Elizabeth Warren is the only person in the Democratic field who might go toe to toe with Trump on attacks. When they go low, you go high, yes. But going silent is not going high. Not fighting is not going high. Warren will deliver fierce rebuttals when it is time.

There were entire stretches in the Fall of 2016 when Hillary was missing in action. For weeks she utterly refused to defend the Clinton Foundation to which she had attached her own name earlier that year. If you can't even defend something like the Clinton Foundation, what can you defend? Unless there is an evolution to a more enlightened political culture, the rules of the game are you fight back.

Nancy Pelosi is doing the Hillary thing right now. She is like, we need to investigate. What do you think Mueller was doing? He completed his work. He investigated.

Obama's contribution to Hillary's defeat in 2016 was that he refused to fight Mitch McConnell on the Supreme Court justice question. The Senate owes a presidential nominee for the Supreme Court a yes or no vote. So says the constitution. Obama refused to defend the US constitution.

Trump inviting any and all foreign governments to hand him dirt on his 2020 political opponents is the kind of behavior you enable when you don't bring him to book on his 2016 behavior. He likewise asked Russia if "you are listening" in 2016. It was not a hidden act. It was from the pulpit. Had he done so in a private meeting with the Russian ambassador, would that have been collusion? Russia responded. And Russia got duped. Russia thought Trump will end the US sanctions in February 2017. Just like there were people who thought Trump will build a wall on the Mexico border, Trump will bring back all the lost manufacturing jobs. Duped and duped.

If you believe a bullshitter, shame on you. Shame on the bullshitter maybe later, but first shame on you.



The many 2020 polls are telling a pretty clear story Sen. Bernie Sanders has plateaued, and Sen. Elizabeth Warren is surging ...... Biden’s and Sanders’s support have flagged, Warren is on the rise, with Buttigieg and Harris a cut above the rest of the field.......some erosion for Biden and Sanders, while others like Warren and Buttigieg are growing in voters’ estimation. ...... the polling for Trump continues to look bad. ....... he’s underwater in the key battleground states that were key to his victory last time. His approval rating is still low. His internal polling keeps leaking and keeps looking terrible. And while head-to-head polling is of limited value this early in the game, he appears to be losing to every Democratic candidate in a potential 2020 matchup.



Elizabeth Warren Is Completely Serious About income inequality. About corporate power. About corrupt politics. And about being America’s next president. ...... and canisters of tea. She drinks many cups a day ...... ..to propagate policy proposals that she has been thinking about for decades ....... We’ve moved the Overton window” — the range of ideas deemed to merit serious consideration — “on how we think about taxes. And I think, I think we’re about to move it on child care.”....... Her plan, announced in January, would raise $2.75 trillion in revenue over 10 years through a 2 percent tax on assets over $50 million and a higher rate for billionaires. Warren wants to use some of that money to pay for universal child care on a sliding scale....... (she tries to record six miles a day on her Fitbit), and sometimes she comes across as a little frenetic, like a darting bird. ........ For her entire career, Warren’s singular focus has been the growing fragility of America’s middle class. She made the unusual choice as a law professor to concentrate relentlessly on data, and the data that alarms her shows corporate profits creeping up over the last 40 years while employees’ share of the pie shrinks. ........... in the 1980s, politicians began reworking the rules for the market to the specifications of corporations that effectively owned the politicians. ....... the wealthiest top 0.1 percent of Americans now own nearly as much as the bottom 90 percent. ....... On the trail, she says “I have a plan for that” so often that it has turned into a T-shirt slogan. Warren has plans (about 20 so far, detailed and multipart) for making housing and child care affordable, forgiving college-loan debt, tackling the opioid crisis, protecting public lands, manufacturing green products, cracking down on lobbying in Washington and giving workers a voice in selecting corporate board members.

Her grand overarching ambition is to end America’s second Gilded Age.

.........“Teddy Roosevelt.” Warren admires Roosevelt for his efforts to break up the giant corporations of his day — Standard Oil and railroad holding companies — in the name of increasing competition. ......... trustbusting was helpful, not hostile, to the functioning of the market and the government. ....... if you get the structures right, then the markets start to work to produce value across the board, not just sucking it all up to the top.” ...... Far too often, Democrats have been unwilling to get out there and fight.” ........ and sharp criticism from the Cherokee Nation, who faulted her for confusing the issue of tribal membership with blood lines. ........ Sanders has been leading Warren in the polls, but his support remains flat, while her numbers have been rising, even besting his in a few polls in mid-June........ (Warren also favors ending the filibuster in the Senate.) Warren wants to prevent companies that offer an online marketplace and have annual revenue of $25 billion or more from owning other companies that sell products on that platform. In other words, Amazon could no longer sell shoes and diapers and promote them over everyone else’s shoes and diapers — giving a small business a fair chance to break in......... Income rose along with union membership, and 70 percent of the increase went to the bottom 90 percent. That shared prosperity built, in Warren’s telling, “the greatest middle class the world had ever known.”......Warren criticizes government as “a tool for the wealthy and well connected,” while asking voters to believe that she can remake it to help solve their problems ...... Workers often turn on other workers rather than their bosses and the shadowy forces behind them. ...... Oklahoma, the childhood home that shaped her and where her three brothers still live and her family’s roots are multigenerational. If you include Texas, where Warren lived in her early 20s and for most of her 30s, she spent three formative decades far from the Northeast....... In 1981, she added a bankruptcy class and discovered a question that she wanted to answer empirically: Why were personal bankruptcy rates rising even when the economy was on the upswing?......... At first, Warren accepted the assumption that people were causing their own financial ruin....... Warren, Westbrook and Sullivan found that 90 percent of consumer bankruptcies were due to a job loss, a medical problem or the breakup of a family through divorce or the death of a spouse.......The banks and lenders paid people to go to the hearings, wrote campaign checks and employed an army of lobbyists. People who went bankrupt often didn’t want to draw attention to themselves, and by definition, they had no money to fight back. ....... Warren wanted feminism to be wider in scope and centered on economic injustice. She urged students to take business-law classes....... Her main point was that a family’s additional income, when a second parent went to work, was eaten up by the cost of housing, and by child care, education and health insurance. ......

Warren is framing child care as a collective good, like public schools or roads and bridges.

....... Warren called out Timothy Geithner, Obama’s Treasury secretary, for focusing on bailing out banks rather than small businesses and homeowners. ....... Stewart leaned forward and told Warren she had made him feel better than he had in months. “I don’t know what it is that you just did right there, but for a second that was like financial chicken soup for me,” he said. ....... Warren was an unusual political phenomenon by then: a policy wonk who was also a force and a symbol. ......

“You built a factory out there?” Warren said, defending raising taxes on the wealthy. “Good for you. But I want to be clear: You moved your goods to market on the roads the rest of us paid for; you hired workers the rest of us paid to educate; you were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did.”

........ among white voters, perceived racial or global threats explained their shift toward Trump better than financial concerns did. ...... the period from 1935 to 1980, she’s talking about a time of greater economic equality — but also a period when people of color were excluded from the benefits of government policies that buoyed the white middle class ....... the federal agency created during the New Deal drew red lines around mostly black neighborhoods on maps to deny mortgage loans to people who lived in them. ......Redlining contributed to the racial wealth gap, and that had consequences Warren saw in her bankruptcy studies — black families were more vulnerable to financial collapse. Their vulnerability was further heightened by subprime and predatory lending. ...... “Realize that into the 1960s in America, the federal government was subsidizing the purchase of homes for white families and discriminating against black families.” ...... she supported a “national full-blown conversation” about reparations for slavery and Jim Crow....... “Today in America — because of housing discrimination, because of employment discrimination — we live in a world where the average white family has $100 and the average black family has about $5.” ...... She talked about women expressing to her their distress about sexual harassment and assault. “Well, yeah,” Warren said. “No kidding that a woman might be angry about that. Women have a right to be angry about being treated badly.” ....... by waging trade wars that hurt farm states and manufacturing regions more than the rest of the country, Trump has punished his base economically ..... “She’s lecturing,” he said. “There’s a lot of resistance, because people feel like she’s talking down to them.” ......... a double bind for professional women: To command respect, they have to prove that they’re experts, but once they do, they’re often seen as less likable. ....... the two candidates who defeated Berlusconi treated him as “an ordinary opponent,” focusing on policy issues rather than his character. ....... He now thinks that Warren is positioned to mount that kind of challenge. “I think so,” he said, “if she does not fall for his provocations.” ........


The US Economy Is In Trouble

The numbers are rosy. The unemployment rate is officially the lowest it has been in 50 years. The stock market is riding high. The growth rate last year was approaching 4% and even now is fairly solid. What could go wrong? Those numbers hide the fragility.

The unemployment numbers are so low because a lot of people have simply stopped looking for work. The actual unemployment rate in the US might be more like 12% or 15%. Nobody really knows. The numbers for low employment are structurally cooked.

The stock market is riding high just like in 2007 the real estate market was riding high. This is the sugar high from stock buyback programs. The super rich, flush with cash, finding no productive use for the money, are simply buying back stocks. The corporate interests are in this vicious cycle. That is further exacerbating inequality.

It feels like the US and the world simply kicked the can further down the road when 2008 happened. No lasting solution was put into place.

The US deficit and debt are real problems. In the depth of 2009, Obama struggled to put together a trillion dollar stimulus package. I think he asked for more but got only 700 billion. These days the US runs a trillion dollar deficit as a matter of fact. What was thought of a big deficit in 2009 these days is simply routine. A massive budget deficit has become business as usual.

The debt is so big and getting bigger, it is not even talked about. It has been archived in the denial file.

No, I am not talking about Trump. He never was the solution. A lot of people who have stopped looking for work were people who thought Trump was it. And then they realized they have been duped. And in shame, they stopped simply looking for work. It is not a good feeling to realize you have been duped.

I am talking about economic theorists and political theorists and thinkers in general. Where are the economic theorists at? Abstract thinkers like Paul Krugman and Raghuram Rajan do show up in the mainstream media. But I don't see them offering solutions. The very paradigm needs to shift. Big thoughts are needed. The band-aid remedies are as misleading as Trump's demagoguery. There is a poverty of imagination.

Maybe it is time to delink the global economy from the dollar. Just like there was a time to delink the dollar from gold. The place of the dollar in the global economy is the very reason why the US runs such large deficits and debts. And those large deficits and debts come up with a price paid for by ordinary Americans. The current arrangement is not a healthy arrangement perhaps. For a national currency to also serve as the global currency is perhaps too much of a burden on that national currency.

Perhaps the WTO needs a new round of negotiations. Trade is a good thing. There is sound economic theory behind trade, still largely undisputed. But maybe the WTO cannot act holier than thou about the resulting inequality. People are not abstract. People are real. Trade perhaps can no longer be delinked from the inequality it creates. Rises in productivity are good. But the resulting inequality is existential. There is a need for a redesign. People are hurting for lack of jobs in the US. People are hurting for jobs in India. Neither the ruling party nor the opposition party, in either case, seem to have any real solutions. In such a scenario the very democracy will get questioned given enough time.

Trump is but the American Boris Johnson who argues for a "hard Brexit." That hard Brexit will turn Britain into the new Greece. But Boris Johnson trades in anger. He does not care. Those who trade in anger and feast on that anger simply want more people angrier. The best case scenario is self-destruction. A bad scenario is large scale destruction. The world avoided a Great Depression in 2008. This time it might be harder to do the same. Back then the leaders were at least talking. This time that "talk" is missing. Irrationality holds sway.

Elizabeth Warren is the only one with a plan. Her wealth tax is that plan. She has not yet linked that to the idea of a Universal Basic Income. Andrew Yang talks about UBI. But that UBI does not stand on sound financial footing yet. He has not linked it to some kind of a wealth tax. Not yet. But even the wealth tax is mere tinkering. It is sound tinkering. It is a start. But a real solution is a much more ambitious redesign. Where are the thinkers at?

Should there be a 2008 style meltdown, and you never know with Trump playing with fire, the US central bank has little to no option left. When the interest rate is already near zero, how do you further cut it? My thought is the Fed will be forced to do a UBI, a quantitative easing for the people. It will be forced to issue new money and simply give it to every American in the form of a direct deposit each month. The Fed will have nowhere else to go. There is no room for interest rate cuts. The banks are already flush with cash, as are the corporations. So it is not lack of cash that is hurting the economy. There is no room for quantitative easing for the banks. The only option left is a quantitative easing for the people.

But that can only go for a few years. A real UBI will have to be designed and implemented as a conscious choice made by elected leaders. The crisis might force the introduction. But there will be a need for a conscious second act.