Homeowners, Businesses and Farmers Begin to Suffer from Trump Shutdown

As the last post noted, some congressional Republicans are beginning to feel pressure from their constituents to vote to end the Trump created shutdown crisis.  A piece in the New York Times looks at the sectors of the economy that are beginning to suffer real harm and the forecasts that economic growth will be curtailed - all so Trump can please his hideous base.  What is in my view most sad is that Trump cares noting about those being harmed.  All that matters is boosting his ego and telling his racist, knuckle dragging base that he's "winning." The man is evil.  Here are article highlights:

The impact of a partial government shutdown began to ripple across the economy as it stretched into Day 17, with mortgage applications delayed, public companies unable to get approval to raise capital and thousands of Secret Service agents expected to show up for work without pay.

President Trump and congressional Democrats have made little progress in negotiations to end a shutdown that has affected about 800,000 federal workers, many of whom will miss their first paycheck this week, and who owe a combined $249 million in monthly mortgage payments, according to the online real estate firm Zillow.

The standoff is beginning to inflict pain on Americans, whose lives are affected, in one way or another, by the federal government. It is already the second-longest shutdown in history, behind the one that started in December 1995 and lasted 21 days.

The effects of a prolonged shutdown have some Wall Street economists predicting a hit to the United States economy.

The effects extend from the president’s inner circle, to Wall Street to farm country.

Virtually every employee with the Secret Service involved in investigations, security and the protective division, which protects Mr. Trump and dozens of other current and former government officials and their families, is required to work during the shutdown. And 6,000 of the organization’s roughly 7,000 employees will not be paid.

The same is true at the Securities and Exchange Commission, which has come to a standstill with “only an extremely limited number of staff members available to respond to emergency situations,” according to a shutdown plan posted on the commission’s website.

[C]raft brewers cannot get approval from the Bureau of Alcohol, Tobacco, Firearms and Explosives for new beer labels. And the Commerce Department has stopped processing requests from auto suppliers and other manufacturing companies seeking an exemption from Mr. Trump’s metal tariffs, leaving them uncertain over the price they will need to pay for key materials this year.

Farmers who planned to apply for subsidies to help mitigate the effect of Mr. Trump’s trade war must wait to get paid until the Agriculture Department’s Farm Service Agency offices reopen. And in neighborhoods across the country, as many as 39,000 federally backed mortgage applications may have already been delayed because of reduced staffing in federal agencies, according to Zillow estimates.

Several nonprofit organizations, including the Federal Law Enforcement Officers Association, are trying to aid Department of Homeland Security workers who need immediate help with a limited pool of cash and other resources, an officer with the group’s charitable foundation said. The Navy Federal Credit Union is offering no-interest loans to service members who face the prospect of missed paychecks.

Secret Service agents are growing increasingly anxious and angry about the shutdown, according to several current and former agents. . . . . “They are asking you to put your life on the line and not paying you — it’s ridiculous,” said Donald Mihalek, 49, a 20-year Secret Service veteran whose own retirement paperwork has yet to be processed because of the shutdown.

[C]orporate America will now have to wait for the government to reopen in order to move ahead with things like initial public offerings and pending corporate mergers that need approvals from regulators. . . .  A dearth of those deals could create financial hardships for midsize public companies that have fewer financial resources to draw upon.

The biggest and most far-reaching effect of the shutdown looms on Feb. 1. Trump administration officials say that funding for the Supplemental Nutrition Assistance Program, or SNAP, which provides food benefits for about 40 million people, will run out of cash by the end of the month.

Other food assistance programs are facing a more immediate cash crunch. The Special Supplemental Nutrition Program for Women, Infants and Children, known as WIC, has already been cut off, with state funds filling the gap as the shutdown drags on. WIC provides aid to an additional seven million low-income Americans who are considered to be at “nutritional risk.”

What Really Makes Trump Scary

Stocks Suffer Worst Year Since 2008 Banking Crisis.

Just hours ago Americans across the country welcomed in the new year with thoughts and wishes of peace, good health and happiness for the year ahead for themselves and others.  Yet at 1600 Pennsylvania Avenue, the principal occupant cares nothing about the nation or its population.  Instead, it is all about him - protecting his corrupt business empire, milking his position to enrich himself, and stamping out investigations that could well expose him as a traitor. Trump is a metastasizing cancer on the USA and the future of millions of Americans is fraught with danger from the impulsive and dangerous actions of a malignant narcissist who cares nothing for anyone but himself.  If pushed, I suspected he'd throw his own children under the bus.  The question circles back to when and under what circumstances Congressional Republicans, particularly those in the U.S. Senate will belatedly decide that Trump is a danger that must be eliminated by whatever means necessary.  A piece at CNN looks at just a portion of the damage being wrought against Americans.  Here are excerpts:

And so it continues. With no end in sight to the government shutdown, President Donald Trump, who rightly said a government shutdown should be blamed on the White House, now seems unwilling to accept responsibility.

As a result, hundreds of thousands of innocent government workers -- Democrats, Republicans and Independents -- are being forced to go without the paychecks they need to feed, house and clothe their families. (These are government workers who, by the way, Trump decided will not receive any pay raise in 2019.) And millions of citizens nationwide are being forced to go without some of the government services on which they may depend. It increasingly appears he is acting in his own, putting America and Americans second.  Let's take a look at a few recent examples of this "Trump first" approach at play: Withdrawal of US troops from SyriaNo one likes the idea of putting US troops in harm's way, especially in the midst of what seems like an unwinnable war thousands of miles away. That said, our armed forces are in Syria for a good reason: to eradicate an avowed enemy that seeks to destroy us -- ISIS.  Trump made a unilateral choice, which shocked our political and military establishment, as well as our allies abroad -- but delighted our chief international adversary, Russian President Vladimir Putin. Given that the threat of ISIS still remains, it appears Trump's decision is more motivated by a desire to fulfill a campaign promise than to ensure the safety of the American people at large. Also, if the United States leaves, ISIS could well be able to reactivate with few, if any, interruptions from enemy forces, and that certainly will not be in America's national security interests. Intentionally undermining pillars of democracy
Trump's incessant criticisms of the press and our system of justice are so frequent that some may be getting numb to their poisonous effects. But a democracy cannot exist without these two pillars.  Trump does not seem to care. A muzzled press and a corrupt justice system are hallmarks of authoritarian regimes. That Trump seeks to intimidate and corrode public confidence in these pillars of democracy is -- to use one of his favorite words -- a disgrace.
 But Donald Trump knows both institutions are devoted to pursuing the truth about him, his businesses and his presidential campaign. That seems to scare him, so his attacks are unlikely to let up any time soon. His personal interests are best served by a lack of public confidence in the press and in the justice system. The heck with what is best for the country.
 Endangering the smooth working of free marketsAdd Wall Street to the list of institutions Trump appears to no longer respect. In his sights is the very essence of our economic system: the stock market. He is making it virtually impossible for anyone to know in what to reliably invest.
 [H]e has taken the highly unusual step of publicly criticizing his hand-picked chairman of the independent Federal Reserve, Jerome Powell, whom he appointed just last year -- saying he was "not even a little bit happy" with him. In fact, according to CNN sources, Trump has even asked about the legality of firing Powell, which only adds to instability and uncertainty in the marketplace. No one should be surprised at Trump putting himself first. After all, he campaigned on being a disruptor, and clearly much of the country welcomed that approach. He and his supporters seem to relish his eschewing of "presidential norms." But this pattern of Trump putting his interests before the country's could not be more at odds with what a president is supposed to do.  Indeed, the one norm to which every president must adhere is putting the American people first.
 That means supporting -- not seeking to destroy -- what makes our country great, even if doing so is at his own expense. Recent actions by Trump provide legitimate reason to question if, whenever the government comes back to full strength, that will be his priority. On that there can be no compromise. Ever. Our survival depends on it.

Time for GOP to Fire Trump

One has to wonder how bad and debased things in the White House need to become before Congressional Republicans reach the point of telling Donald Trump "you're fired."  Some have conjectured that this will happen only when the financial interests of the very wealthy and big business become significantly harmed.  With the stock market plunging and trade uncertainties rising, that point may be near at hand.  Add to this the rapid degrading of the United States' position in the world, and a perfect economic storm may be on the horizon - a storm that can be averted by restoring sanity and stability to the White House. I have absolutely no desire to see Mike Pence in the White House - hopefully Mueller will implicate him in Trump's treason with Russia - but something must be done to end the rampant chaos and criminality that define the Trump regime.  A column in the New York Times argues why Republicans need to accept the fact that  Trump needs to be removed, preferably sooner than later.  Here are column excerpts:

Up to now I have not favored removing President Trump from office. I felt strongly that it would be best for the country that he leave the way he came in, through the ballot box. But last week was a watershed moment for me, and I think for many Americans, including some Republicans.

It was the moment when you had to ask whether we really can survive two more years of Trump as president, whether this man and his demented behavior — which will get only worse as the Mueller investigation concludes — are going to destabilize our country, our markets, our key institutions and, by extension, the world. And therefore his removal from office now has to be on the table.

I believe that the only responsible choice for the Republican Party today is an intervention with [Trump] the president that makes clear that if there is not a radical change in how he conducts himself — and I think that is unlikely — the party’s leadership will have no choice but to press for his resignation or join calls for his impeachment.

It has to start with Republicans, given both the numbers needed in the Senate and political reality. Removing this president has to be an act of national unity as much as possible — otherwise it will tear the country apart even more. I know that such an action is very difficult for today’s G.O.P., but the time is long past for it to rise to confront this crisis of American leadership.

Trump’s behavior has become so erratic, his lying so persistent, his willingness to fulfill the basic functions of the presidency — like reading briefing books, consulting government experts before making major changes and appointing a competent staff — so absent, his readiness to accommodate Russia and spurn allies so disturbing and his obsession with himself and his ego over all other considerations so consistent, two more years of him in office could pose a real threat to our nation.

The damage an out-of-control Trump can do goes well beyond our borders. . . . Donald Trump has proved time and again that he knows nothing of the history or importance of this America. That was made starkly clear in Secretary of Defense Jim Mattis’s resignation letter.

Trump gloats at the troubles facing the European Union, urges Britain to exit and leaks that he’d consider quitting NATO. These are institutions that all need to be improved, but not scrapped. If America becomes a predator on all the treaties, multilateral institutions and alliances holding the world together; if America goes from being the world’s anchor of stability to an engine of instability; if America goes from a democracy built on the twin pillars of truth and trust to a country where it is acceptable for the president to attack truth and trust on a daily basis, watch out: Your kids won’t just grow up in a different America. They will grow up in a different world.

But this is not just about the world, it’s about the minimum decorum and stability we expect from our president. If the C.E.O. of any public company in America behaved like Trump has over the past two years — constantly lying, tossing out aides like they were Kleenex, tweeting endlessly like a teenager, ignoring the advice of experts — he or she would have been fired by the board of directors long ago. Should we expect less for our president?

That’s what the financial markets are now asking. For the first two years of the Trump presidency the markets treated his dishonesty and craziness as background noise to all the soaring corporate profits and stocks. But that is no longer the case. Trump has markets worried.

The instability Trump is generating — including his attacks on the chairman of the Federal Reserve — is causing investors to wonder where the economic and geopolitical management will come from as the economy slows down.

We are now left with the B team — all the people who were ready to take the jobs that Trump’s first team either resigned from — because they could not countenance his lying, chaos and ignorance — or were fired from for the same reasons.

I seriously doubt that any of these B-players would have been hired by any other administration. Not only do they not inspire confidence in a crisis, but they are all walking around knowing that Trump would stab every one of them in the back with his Twitter knife, at any moment, if it served him. This makes them even less effective.

If America starts to behave as a selfish, shameless, lying grifter like Trump, you simply cannot imagine how unstable — how disruptive — world markets and geopolitics may become. We cannot afford to find out.

Trump's Likely Costly Tariff Blunder

America's modern day version of Nero likes to boast about the highs on the stock market, yet seemingly knows little about economics (his only understanding appears to be of real estate deals propped up with underworld and Russian oligarch funding) and yesterday gave the stock markets a big jolt that led to a sell off.  The cause was Trump's announcement of steel and aluminum tariffs based seemingly on ads on Fox & Friends and a desire to appear to give something to thrill his knuckle dragging white nationalist base.  Then, of course, there may have been a desire to change the media conversation - at least temporarily - from Russiagate and the travails of Jared Kushner.  As a piece in The Atlantic notes, the  parallels between Trump and Nixon continue to grow with average Americans being the big losers in the long term.  Here are article excerpts:

Trump just raised the price of cars, beer, vacations, and apartment rentals. 

That’s not what most headlines say. Those headlines say that Trump will raise tariffs on steel and aluminum. Higher tariffs mean higher prices for those inputs—and therefore for the products ultimately made from those outputs. Automotive and construction top the largest users of steel in the United States. Aluminum is heavily used to make airplanes, cars and trucks, and beverage containers, and also in construction.

The last time the U.S. imposed steel tariffs, back in 2002, the project was abandoned after 20 months. A 2003 report commissioned by industries that consumed steel estimated that the Bush steel tariffs cost in excess of 200,000 jobs—or more than the total number of people then employed in the entire steel industry at the time.

This time the cost-benefit ratio is likely to skew much worse. There are fewer steel jobs to protect this time. Auto sales growth has stalled. The first warnings of consumer price inflation are appearing.

Even by Trump standards, the decision-making process was a chaos. As late as 9 p.m. last night, it remained undecided whether there would be an announcement today at all—never mind what that announcement would be. Key congressional committee chairs were unconsulted and uninformed.

 

The president [Trump] as so often relied on junk information. . . . Industries seeking protection reportedly bought commercials on Fox & Friends. Apparently a decisive event in the debate was the firing of staff secretary Rob Porter, after revelations that he had engaged in spousal abuse. Porter had also chaired the weekly trade debate, forcing the president to confront the costs and harms of protectionism. His removal also empowered Trump’s worst instincts.

 

The Department of Defense intervention in the debate shredded the logic of protectionists like Commerce Secretary Wilbur Ross, himself a former steel man.

U.S. military requirements for steel and aluminum each only represent about 3 percent of U.S. production. Therefore, DoD does not believe that the findings in the reports [of harm to domestic steel and aluminum producers from foreign competition] impact the ability of DoD programs to acquire the steel or aluminum necessary to meet national defense requirements. What did alarm the Department of Defense about proposed steel and aluminum tariffs was potential harm to vital U.S. alliances.

Trump’s unpredictability and threatening language have not only jolted U.S. financial markets, but have done further damage to the U.S.-led alliance system. European Union trade ministers agreed earlier this week to retaliate if the U.S. imposes steel tariffs, further degrading a U.S.-EU relationship already badly damaged by Trump’s hostility to NATO and deference to Russia.

Donald Trump is often compared to Richard Nixon in his disdain for law and ethics. The parallel applies to economics too.

Nixon governed not according to what would work in the long term, but according to “the prevailing mood of the two-thirds of the country he called the ‘constituency of uneducated people.’”

Nixon did indeed win in 1972. He also bequeathed his country not only the worst political scandal in its history to date, but a decade of stagflation that bore most heavily upon the very people Nixon claimed to champion. We’ve been there before; it looks like we’re returning there again.

Trump's rust belt and hill billy supporters will likely cheer their "dear leaders" move without realizing that yet again they are seeing a result directly against their own best economic interest.  Feeling good about "punching back" on someone will not make up for the economic pain.  Sadly, Trump supporters are too stupid to grasp this reality. 

Vladimir Putin - Investor of the Year

Donald Trump - or Der Trumpenführer, if you prefer since I will never use the title "president" in conjunction with his name - continually boasts about the record high stock market and how well investors have done over the last eleven months.  He, of course, ignores the way the market had been soaring under Barack Obama and the role that Obama played in setting the stage for future market increases.  And as foreign affairs columnist Thomas Friedman, points out, Forbes or some other financial publication will likely be naming an "investor of the year" for 2017.  But the man who has likely reaped the biggest return on his investment made in 2016 and into 2017 is likely Vladimir Putin.  Putin, who has an ego as big as Trump's, and who views himself as Russia's new Tsar, wants to return Russia to its lost glory days on the international arena and to check America's power.  For his investment in meddling in the 2016 presidential election (by some estimates it was a paltry investment of $500,000), Putin has seen America diminished on the global stage and torn asunder domestically by Trump and the GOP Congress who seem obsessed with plundering the nation environmentally and financially to benefit 1% of the population.  None of this will make America great again.  Here are highlights from Friedman's column:

At the end of this banner stock market year, you can bet that major business publications will be naming their investor of the year. You can stop now. I have the winner, and nobody is even close when it comes to his total return on investment: Vladimir Putin, the Russian president.

A recent report in The Washington Post, quoting intelligence sources, said Putin may have spent less than $500,000 to hack our last election and help (though Hillary helped much more) Donald Trump become president. And Putin’s payoff is Trump’s first year: a president who is simultaneously eroding some of our most basic norms, undermining some of our most cherished institutions and enacting a mammoth tax bill that will not make America great again.

If you assume, as I do, that Putin wants to see an America that is not an attractive model for his own people or others to emulate, and that he wants an America run by a chaos president who cannot lead the West, then Trump is his dream come true, whether or not there was any collusion between them.

Just do the math:

On norms, we’ve grown numb to a president who misleads or outright lies every day. Different newspapers measure this differently. The Washington Post says Trump has averaged 5.5 false or misleading claims every day in office, putting him on pace for 1,999 in his first year. According to The Times, Barack Obama told 18 “distinct falsehoods” over his entire eight-year presidency, while Trump, in his first 10 months in office, “has told 103 separate untruths, many of them repeatedly.”

[I]t’s chilling to imagine what four years and 8,000 lies or misleading statements from Trump will do to trust in government in America — and how deeply that will filter into society, giving permission to anyone and everyone to lie with impunity.

In terms of institutions, Trump has personally disparaged the F.B.I., the C.I.A. and the Justice Department. His head of the Environmental Protection Agency has turned the E.P.A. over to the fossil fuel industry. Ditto at Interior. His I.R.S. is being starved of funding to do its job. And his secretary of state is gutting the State Department, shedding our most experienced diplomats and replacing them with … no one.

The Treasury secretary’s economic “analysis” of the G.O.P. tax bill consisted of a one-page — fewer than 500 words — assessment, claiming that the $1.5 trillion plan would more than pay for itself, assuming a whole set of perfect circumstances come true. Your kid’s third-grade book report was longer than the Treasury’s analysis of our biggest tax overhaul in 30 years.

And then there’s the future: Putin never could have dreamed up this deformed Trump-G.O.P. tax bill, but it is precisely how you don’t make America great again. . . . .

First, we’ve always educated our citizens up to and beyond whatever the main technology of the day was — when it was the cotton gin, that meant universal primary education; when it was the factory, that meant universal high school; and now that it is the computer and artificial intelligence, it should be some form of postsecondary education for all — and then lifelong learning. . . . . Instead, this bill will spend money preserving unfair tax breaks for hedge fund billionaires and shrinking the inheritance tax on their heirs.

Second, we invested in the best infrastructure — roads, rail, ports, airports, telecom. This tax bill not only makes no provision for that, it actually erodes such investments in many states.

Third, we had the best rules to incentivize risk-taking and to prevent recklessness. I am all for cutting corporate taxes — and payroll taxes — but I’d offset them with a carbon tax that would simultaneously combat climate change and stimulate renewable energy, the next great global industry, to make us more resilient and innovative. It never occurred to Trump.  Trump and his allies actually tried to get rid of all the regulatory subsidies to stimulate wind, solar and electric car production . . . .

On health care regulations, though, the whole G.O.P. bought into Trump’s nonsense, eliminating the Obamacare requirement that all individuals buy health insurance. It means we are returning to socialized medicine. Now lots of healthy young people, and others, will forgo health care, and when they get sick, they’ll go to hospital emergency wards to get treated — and those of us with health insurance will pay for their care through higher premiums or higher hospital bills. That’s called socialism.

Fourth, we had, in the last century, the most open immigration policy to attract the most high-I.Q. risk-takers, the people who often start new business, as well as high-energy lower-skilled workers. I don’t have to tell you where Trump is on that.

Fifth, we had the most government-funded research to push out the boundaries of science so our companies could pluck the best ideas — witness the internet and GPS — to start new industries. The surge in the deficit created by this tax bill will curtail precisely such research.

So there you have it: a tax “reform” bill that defies all five principles that made us great for two and half centuries.

Even Putin surely could not have imagined that Trump would be this foolish and the G.O.P. this cynical. It’s just the extra dollop of caviar on Vladimir’s Christmas blini.

Is China the New Spanish Empire?

One thing that politicians seem to rarely do is look at and learn from history - much of America's Middle East debacle could have been avoided had any serious thought been given and delusions of "American exceptionalism" not blinded both military and media leaders not to mention George W. Bush, idiot-in0chief- and Emperor Palapatine Cheney.  A piece in Politico makes the case that the current market instability in China might well be understood through the lens of history if westerners - and the Communist leadership - were to learn lessons from the past.  Most specifically, that a centralized dictatorship over times cannot control the economy and events despite huge efforts to do so.  Here are highlights that suggest that China's future could be quite different that what some expect:

The Chinese turmoil roiling markets right now presents a fresh and profound challenge to the world economy: For the first time, a giant, non-European superpower threatens world financial stability and the powers that be seem at a loss.  If the IMF and World Bank have stumbled with Greece, how are they going to get a hold on the stock market travails of Communist China? What tools do we even have to affect how it plays out?

But if the particulars are novel, in the bigger sense this is a movie we’ve seen before. Though China has been the global economic star of the last low-growth decade, it remains a totalitarian dictatorship, with its economy shrouded in state secrecy.  What we’re encountering in this crisis is the spectacle of a closed society colliding with the forces of complex, free-market capitalism. If we look beyond China, we can find a long history of these collisions, dating back hundreds of years, as both closed societies and capitalism evolved and became more complex. And the history has a clear but unsettling lesson to offer: When such a collision happens, it’s a moment to genuinely worry.

Since the dawn of capitalism, closed societies with repressive governments have—much like China—been capable of remarkable growth and innovation. Sixteenth-century Spain was a great imperial power, with a massive navy and extensive industry such as shipbuilding and mining. One could say the same thing about Louis XIV’s France during the 17^th century, which also had vast wealth, burgeoning industry and a sprawling empire.

But both countries were also secretive, absolute monarchies, and they found themselves thrust into competition with the freer countries Holland and Great Britain. Holland, in particular, with a government that didn’t try to control information, became the information center of Europe—the place traders went to find out vital information which they then used as the basis of their projects and investments.  The large empires, on the other hand, had economies so centrally planned that the monarch himself would often make detailed economic decisions.  As these secretive monarchies tried to prop up their economies, they ended up in unsustainable positions that invariably led to bankruptcy, collapse and conflict.

In Spain, the result was a slow collapse, which has left it and its former empire suffering from perpetual economic crisis and political instability. In France, an open society would eventually be born through monarchial bankruptcy that pulled down banks around Europe, and ended in violent revolution and the vastly destructive Napoleonic wars.

More recently, Germany long struggled with the mix of modern industry, capitalism and authoritarianism.  Throughout the 19^th century, and into the 20^th, Germany experienced massive economic growth under the hand of Bismarck’s central political authority; the result was a period of great strength, followed by crisis, war, political upheaval and the geopolitical and moral catastrophe of WWII. 

And though we tend to forget this now, the Soviet Union experienced massive economic expansion for half a century.  America feared it not only for its m military, but for the industrial might, expanding GDP and technological achievements that added heft to its ideological challenge around the world.  Only after the collapse of the USSR in 1991 did we fully understand what was really going on behind the curtain. In financial terms, Soviet secrecy was very effectively shrouding the massive liabilities of the state. 

China is a new case, for it has mixed capitalism and totalitarianism in a unique way.  Unlike the USSR, there are privately owned companies and public investment.  And yet behind banks, companies and the stock market still lies the heavy hand of the state.  The Chinese government forces investment in the stock market and bolsters banks, companies and state entities with secretive cash infusions; it and hides toxic assets in its enormous and completely secretive sovereign wealth funds.

As in imperial Spain, or Cold War Russia, there is neither transparency nor trust.  There is no question that China has massive growth potential until its population curve starts to turn, but what we are seeing in this current financial crisis is likely to be only the beginning of the political and societal crisis brought about by a dictatorship’s efforts to simulate the performance of a capitalist economy—but one that only grows.  The stock market is not real; government financial statistics are fake and obscured.

There is no historical example of a closed imperial economy facing large capital-driven, open states and sustainably competing over the long term. That is not to say that China isn’t an economic powerhouse and a remarkable site of energy and potential. It is certainly both. But we also know Chinese debt—as secret as the state likes to keep it—is enormous, and that its financial system is like any other bubble. 

The great “Beijing Consensus,” China’s absolute commitment to showing 8% growth every year, is unsustainable, at least through legitimate means. And without it, China is beginning to look like an enormous totalitarian ponzi scheme—a phenomenon common enough in world history, but extremely dangerous to be near in the long run.

It’s tempting to look for quick policy solutions, or—for some political candidates—to wave around threats as a way to gain leverage. But almost by definition, a society like China is immune to our efforts . . . In the short term, the best goal to push for is more transparency, in the hope that sunlight helps mitigate whatever shock is still coming. And until then, a healthy skepticism might be the best protection we can offer ourselves.

The GOP's Blindness to Objective Reality

Ever since Barack Obama's election in 2008 Republicans have done nothing but predict doom and gloom and then do all in their power, especially in Congress, to make the dire predictions come true regardless of the consequences inflicted on average Americans.  Behind much of it was the unspoken racism that motivates much of the Republican Party base, a base that is terrified of losing its white privilege and outraged that a non-white occupies the White House.  Yes, the economy needs to improve much more to benefit many Americans, but as a piece in Blue Virginia notes, things are far better now than when Barack Obama took office despite the constant GOP efforts at obstruction and economic sabotage.  What's most frightening is the blindness of many in the GOP due to their racism and bigotry.  Just think what could have been accomplished if the GOP had put the nation and average Americans ahead of destructive partisanship.  Here are some article excerpts:

[C]heck this out: six years into the presidency of Barack Obama, it turns out the U.S. economy is booming, the stock market is in record territory, wages are rising...etc. Or, as a headline today in the Washington Post put it: The boom is here: the economy just grew 5 percent, and it's not going to stop. Oh yeah, and let's not forget that we're in the midst of an energy boom, with falling gasoline prices, plummeting crude oil imports and booming wind and solar output. All this, by the way, just six years since the economy collapsed under President George W. Bush, and not even six years since President Obama inherited one of the worst economic situations since FDR took over from Herbert Hoover in 1932. 

For any observer not blinded by partisanship, right-wing ideology and/or animosity towards our nation's first African-American president, this is beyond impressive. It's also striking to consider the contrast between what Republicans predicted would happen and what actually happened. A few examples of the many ways in which Republicans have been (wildly) wrong the past 6 years include: 

*Republicans and Tea Partiers asserted, over and over and over again, that the Recovery Act of 2009 would not work. They were completely wrong. In fact, as it turns out, the Recovery Act ended up doing almost exactly what it was intended to do: provide classic Keynesian, counter-cyclical "stimulus" to an economy in desperate need of it. The only problem, frankly, was that it wasn't big enough, particularly in terms of aid to the states, and for that we have Republicans and a few conservadems to blame. If it weren't for them, we almost certainly would have come out of the recession earlier and stronger than we did. In short, the current economic recovery has come about in SPITE of Republicans (and a few conservadems). 

*Republicans and Tea Partiers called President Obama every name in the book, with "socialist" and even "communist" or "Marxist" being several of their favorites. Yet, just as in the case of Bill Clinton, the economy has boomed under this supposed "socialist," with the stock market - not exactly a bastion of "to each according to his need" types - now at record-high levels. 

*Repblicans and Tea Partiers claimed that the Affordable Care Act, aka "Obamacare," would be a disaster, the ruination of America, blah blah blah. In fact, it's been nothing of the sort. Instead, we're getting constant headlines like US uninsured rate heads toward new low and O-Care premiums stable nationwide and U.S. Experiences Unprecedented Slowdown In Health Care Spending. So much for Republicans predictions of doom on all those fronts. As for "Obamacare" being a "job killer," which we heard about a gazillion times from right wingnuts the past few years, let me simply refer you to the headlines and first couple paragraphs of this post, about the booming economy, soaring stock market, plummeting unemployment rate, etc.

*Republicans and Tea Partiers were also wildly wrong about the U.S. energy situation, from absurd claims that President Obama was causing higher gasoline prices to claims that he was stifling U.S. energy production. Instead, what we're seeing is an energy boom in the U.S. on all fronts, combined with low energy costs (including plunging costs for clean energy sources like solar and wind).

*Republicans and Tea Partiers ranted and raved about the deficit, ignoring a few important facts, like: a) President Obama inherited a deficit of $1.2 trillion from Bush/Cheney; and b) the deficit for 2014 was just $483 billion -- far less than half what President Obama inherited from Bush/Cheney. Of course, if Republicans really cared about the deficit, which they obviously don't based on their records when they were in the White House (see Reagan's and Bush's huge deficits, compare and contrast to Clinton's surpluses and Obama's sharp cuts in the deficit he inherited), they would have voted to repeal most of the Bush tax cuts. 

Just imagine how much more we could have made with a Republican party willing to work together for the good of the country, as opposed to working for President Obama to "fail?" It boggles the mind.

This list really could go on all day, getting into foreign policy as well (e.g., so much for right-wing claims that Vladimir Putin was kicking Obama's butt or whatever), but I think the point is clear by now. Bottom line: Republicans have been wrong on basically everything the past 6 years. Will they admit that they were wrong? Apologize for their overheated rhetoric and counterproductive actions during Barack Obama's presidency? Of course they won't!

When one considers the objective facts rather than being motivated by racism, bigotry and fear of others with different skin colors or sexual orientation, one has to wonder why anyone would vote Republican.  

Romney Campaign’s Attempts to Deny Paul Ryan’s Insider Trading Don't Add Up

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We already know that Mitt Romney will resort to almost any tactic to make a buck and avoid paying taxes to the fullest extent possible - hence the Swiss bank accounts and accounts in offshore tax havens.  But it seems that Paul Ryan may also have a similar devotion to making a buck.  In fact, some continue to believe that Ryan may have used insider trading tips to benefit in his investment decisions.  Yep, the same sort of thing that landed Martha Stewart in prison.  A story broke over a weekend about Ryan's investment possible insider investment advantage and the Romney campaign sought to explain it away.  However, a piece at AlterNet makes the case that the purported explanation doesn't add up.  The piece clearly implies that Ryan lied on his disclosure statements or he's lying now.  You decide for yourself.  Here are story excerpts:

Over the weekend, the Richmonder blog broke what looked like a whopper of a story: that Republican vice-presidential hopeful Paul Ryan had lined his pockets from information he had obtained from a now-legendary meeting that took place on September 18, 2008. On that day, Fed Chairman Ben Bernanke and then-Treasury Secretary Hank Paulson broke the news to congressional leaders that they would have to approve a bailout to avert a complete meltdown of the financial system.

America was lurching toward catastrophe. But some folks were apparently thinking about their stock portfolios. 

Checking through Ryan’s financial disclosure reports, the Richmonder discovered that Ryan had sold the stocks of several major banks that day, while purchasing – surprise! – stock in Paulson’s old firm Goldman Sachs. The story quickly circulated through the media.

The Romney campaign rapidly issued denials, based on three separate -- and clearly false -- claims: 1) the trades were not individual stock trades, but trades made as part of an index that trades big blocs of stocks according to preset formulas; 2) the meeting took place in the evening, after markets were closed, so the meeting could not have played a role in Ryan’s trading decisions; and 3) the stocks traded within a trust over which Ryan had no direct authority.

First of all, the Romney campaign’s claim that the transactions were index trades is not consistent with what’s in the original disclosure reports. AlterNet discussed the controversy with money and politics expert Thomas Ferguson, who has written extensively on the bailout. He explained, “Ryan did own some index-based securities, but they stand out in the summaries. They are different from the many trades Ryan was making in individual stocks. It is perfectly obvious that he sold shares in Wachovia, Citigroup and J. P. Morgan on September 18 and he bought shares in Paulson’s old firm, Goldman Sachs, on the same day. If these were index trades, what’s on the form is nonsense.”

While it’s not possible to pinpoint exactly what Ryan knew and when he knew it, the whole episode becomes more disturbing the deeper you look into it.  .   .   .   .  Since Ryan is a Republican, he may well have gotten word from the [Bush] White House about the gravity of the situation even earlier. If you knew that Hank Paulson and Ben Bernanke were coming to brief you as stock markets fell around the world, that’s really all you needed to know to do the trades in Ryan’s portfolio.

If  you swallow the idea that Ryan just happened to buy Goldman stock that day -- a day he just happened to have a meeting with Hank Paulson, the firm’s former CEO, well, then I have some unicorns I’d like to introduce you to. 

Sometimes you win, sometimes you lose. But if you’re a member of Congress, the odds are curiously in your favor. As I reported on AlterNet several months ago , in-depth research undertaken in 2004 considered to be the baseline work in the field revealed that from 1993-1998, US senators were beating the market by 12 percentage points a year on average. Corporate insiders only beat the market by a measly 5 percent. Typical households, in contrast, underperformed by 1.4 percent. 

And as to the Romney campaign’s claim that Ryan was not legally in control of his investments, let’s just say that this idea gives the notion of the “Invisible Hand” new meaning.

What’s most disturbing is the notion of a man like Paul Ryan focusing so heavily on his portfolio while his country was in peril. Ryan’s surely a guy who would answer the phone at 3am – provided it's his stockbroker calling. 

As has been the case with Romney, the more I discover about Ryan, the less I dislike him, both as a politician and a person.

Is Eric Cantor Trying to Kill the Congressional Insider Trading Ban?

Living in Virginia we have many embarrassing politicians. Indeed, the entire GOP delegation to the Virginia General Assembly largely qualifies as knuckle dragging Neanderthals with a penchant for mindlessly following the dictates handed down by the Christofascists at The Family Foundation. But when one factors in sleaze, the Congressman Eric Cantor has few rivals when it comes to being an embarrassment to Virginians. I've often speculated that Cantor would sell his own mother for the right price - which would likely be an amount equal to pocket change. As readers may recall, when the nation was on the brink of defaulting on its obligations, Cantor had invested in funds that would have sky rocketed in value if a default had occurred. Thus, it's little surprise that some believe that Cantor is working to kill a bill that would bar members of Congress from engaging in insider trading. A practice that would any of the rest of us - even the real Martha Stewart, not the boyfriend - in prison. Here are highlights from Think Progress on Cantor's latest ethically challenged agenda:

During his State of the Union address, President Obama said “send me a bill that bans insider trading by members of Congress; I will sign it tomorrow. Let’s limit any elected official from owning stocks in industries they impact.” The remark stemmed from a 60 Minutes investigation showing that House Financial Services Chairman Spencer Bachus (R-AL) profited from information he received in private briefings during the economic crisis of 2008.

The Senate, in a rare display of bipartisanship, opened debate on an insider trading ban by a vote of 93-2. However, the bill has since become bogged down under a sea of unrelated amendments.

Over in the House, meanwhile, House Majority Leader Eric Cantor (R-VA) — who reportedly blocked Bachus from bringing up a ban on congressional insider trading in committee — wants to expand the legislation to include bans on other sorts of transactions, such as land deals. UCLA Law Prof. Stephen Bainbridge notes that this is likely an attempt by Cantor to kill the bill by making it so overly broad that no one will vote for it:

[Cantor's] now trying to extend the STOCK Act “so it includes land deals and other types of transactions and not just stock trades.” Classic taking a good idea too far. The problem is insider trading in stocks, not insider trading in land deals. Cantor obviously hopes that including a vast array of economic activity within the bill, exposing members of Congress to disclosure obligations and other restrictions, as well as increasing their liability exposure, will make the bill sufficiently unpopular so as to prevent its passage.

Cantor is a despicable sleaze. One has to wonder what's in the water in his district that causes his constituents to vote for someone who, in my opinion, is such a douche bag.

Why the Financial Markets Are Melting

After my divorce, I was wiped out financially and had little reason to follow the stack market gyrations (chart above is from the New York Times). Now, with my parents gone and a modest inheritance, I find myself worrying that the herd earned results of my parents labors will be wiped out by the irresponsible behavior of Congress, the White House and Wall Street. The Daily Beast has an article that looks at possible reasons and part of the problem is the lack of structural controls that will act as circuit breakers if you will to control and moderate panics. The supposed reforms of the last go round of supposed regulatory revitalization has in reality done little. As a result, program trading and people acting like lemmings continue to drive the markets towards instability. Here are some highlights:

No one can say precisely when or why this will end. Its triggers we know: a flawed debt deal in the United States, renewed sclerosis in the European Union about peripheral debt issues in Greece and Italy, a downgrade by Standard & Poor’s of U.S. sovereign debt (oh, the irony of S&P downgrading debt leading to a precipitous decline in the S&P index), and then a wave of global selling. No market has been immune; not one.

Since global markets bottomed in March 2009, there has been an uneasy calm, the capitalistic version of the “Phony War” period between the fall of Poland to Germany in September 1939 and the fall of France in May 1940. None of the reforms passed in the wake of the financial crisis create any breakers against synchronous global financial panic. Yes, there is less leverage and more capital in financial institutions, which is a vital difference between now and then and augurs against a repeat of what happened two years ago, but there are no circuit breakers that prevent the rolling flash-crash of the past week.

These moments create ripples of fear that build like tsunami waves until they crash with destructive force against the shoals of investor confidence, institutional balance sheets, and collective investing psyche. And more than ever, they race around the world unimpeded by national boundaries and uncontainable by central banks.

[A]t times, I also watched in fascination as stock after stock sold off without any consideration of the intrinsic strength of the underlying businesses, even discounting for a possible global recession. Even though such a recession seems highly unlikely, stocks sold off well beyond whatever consequences such a global contraction might have.

If we are October 1987, it’s time to buy; if it is December 2008, watch out. We will only know the answer to this in retrospect, but this feels more like a crash than a new trend, and like any flash fire, these burn quickly, intensely, and then they stop. You don’t want to be in these markets when this is happening, but you also don’t want to be out of these markets when they reverse.