US Politics: Let's Discuss US Politics

[denstorebog]

6 hours ago, lokisnow said:

Just saw this headline,  it’s still very Halloween and dodgers on the west coast. If the perpetrator is Arab, Trumps approval rating will skyrocket and every mainstream media outlet will 100% forget about any mueller news while gushing about how wonderful trump is.

I've said this before, but I don't see how this is possible. Of the ~60% of people who dislike Trump, almost all of them have very strong feelings about it. They're not going to suddenly like him now, or ever. He is not a president who can capitalize on symbolically bringing people together, both because he's psychologically incapable of projecting empathy, but also because people have him figured out at this point, one way or another.

After 9/11, people needed a uniter and a leader. If a 9/11 or a new Korean war happened, people will look at Trump and realize that he's definitely not a comforter-in-chief or the guy they want at the helm of a nuclear war.

I think the potential for a war boost is way overrated with this particular president.

[LongRider]

 

From NBC:

Quote

WASHINGTON — Former Trump campaign aides Paul Manafort and Rick Gates posed a "serious risk of flight" because of their wealth and connections abroad, special counsel Robert Mueller argued in newly filed court papers.

A federal judge granted Mueller's request for substantial bail and travel restrictions on the pair, who face a 12-count criminal indictment alleging money laundering and bank, tax and lobbying disclosure violations..........................................................In the memo, Mueller's office calculated the possible maximum sentences under federal sentencing guidelines if Manafort and Gates were convicted. Gates could serve up to 12 years and seven months and Manafort is facing up to 15 years and eight months in prison, the prosecutors said.

"The possibility of prison sentences in these ranges alone establishes a risk of flight as to both defendants," the filing says.

Both men have pleaded not guilty. Manafort's bail was set at $10 million, Gates's at $5 million. Both are confined to their homes by court order.

https://www.nbcnews.com/news/us-news/manafort-gates-pose-serious-risk-flight-says-mueller-n816246

From CNN:

Quote

Manafort currently has three US passports, each under a different number. He has submitted 10 passport applications in roughly as many years, prosecutors said.

* This year, Manafort traveled to Mexico, China and Ecuador with a phone and email account registered under a fake name. (The name was not disclosed in the filings.)...........................

Currently, Manafort and Gates' house arrest conditions mean they can only leave their homes to meet with lawyers or appear in court, or for medical and religious reasons, and they must check in with authorities daily.

Their next court appearance is scheduled for Thursday afternoon. They face sentences of more than 10 years if convicted on all charges. Both say they're not guilty.

http://www.cnn.com/2017/10/31/politics/manafort-3-passports/index.html?sr=twCNN103117manafort-3-passports0952PMVODtop

[OldGimletEye]

But, wait! You mean “lazy” young and brown people are not at fault?

Could it be that old conservative white guys that put the blame on “lazy” young and brown people are at fault?

Gasp!!!!!

No, no, no. Not the party of business!!!! It couldn’t possibly be to blame!!!

https://www.washingtonpost.com/news/wonk/wp/2017/11/01/worse-than-the-1930s-americas-great-recession-and-not-so-great-recovery/

Quote

Policymakers like to say that they kept the financial crisis from causing the type of economic damage that the Great Depression did, and they're right — but maybe only for another year.

That, at least, is the sobering conclusion of a recent paper by former International Monetary Fund Chief Economist Olivier Blanchard and former Treasury Secretary Lawrence Summers. They point out, as you can see above, that while the economy never experienced the type of complete collapse in 2008 that it did in 1929, the recovery has been so much slower this time around that it won't be long until our total growth since the start of the crisis will be worse than it was at this point of the Great Depression. In other words, the economy has grown less in the 2010s than it did in the 1930s. That's even accounting for the fact that you'd expect growth to be a little more sluggish today now that so many baby boomers are hitting retirement. They're not comparing gross domestic product, you see, but gross domestic product per working-age adult. That strips out how much of the economy's growth is solely due to the population's growth, and gives you an idea of the underlying strength — or weakness — of things.

If old conservative white guys had heard the term “liquidity trap” or internalized any of the lessons from the 1930s we might not have been in that situation. But, you know, they chose to blame “lazy” young people, I guess ie millennials. Or as I like to call them “The people that bore the brunt of Dubya’s crazy ass military adventures.”

Quote

So you need policies that do something about both. Going off the gold standard did that during the Great Depression by increasing inflation enough to help people who owed a lot of money and spurring the well-to-do to put their cash to use before it lost its value. This was what's called a “regime shift,” and, as economist Scott Sumner points out, it helped kick-start an almost immediate recovery. Industrial production actually rebounded 57 percent between March and July of 1933 alone.

I’m not the biggest fan of Sumner, as he’s a little too the right for my taste. But, at least, he doesn’t or didn’t operate in batshit crazy land, like most of the Republican Party. And he’s right that shortly after FDR took office industrial production took off. FDR was not an economist and he certainly wasn’t able to internalize what Keynes was saying or writing, but FDR did at least have some sort of intuitive grasp of what was wrong, like his constantly saying the need to return to the pre-1929 price level. In short, FDR was doing forward guidance before forward guidance was cool. As a result, inflation expectations changed, pushing down the real rate of interest. It would have been nice if people like Kevin Warsh or John Taylor (or the bulk of the Republican Party generally) would have kept this in mind, as they were doing their inflation fear mongering.

Just skimming through Summers and Blanchard’s paper, a couple of comments:

Quote

We also take up two other issues. First, whether and how monetary policy should concern itself with financial stability; we conclude that monetary policy can be of little help, and that financial stability should be left to financial policies, as imperfect as they might be…..

I concur. Also, I’ll add that I feel like the people that started warning about using monetary policy to tamp down asset bubbles, like Kevin Warsh or John Taylor, were not acting in good faith, once it became apparent that their inflation fear mongering was utter horseshit.

Quote

Indeed, this has raised an old but fundamental issue of whether market economies naturally return to potential (as we saw earlier, a potential which might itself be moving, but this is a different issue). One of the first formal discussions was given by Patinkin (1948): in response to low output, the price level would decrease, leading to an increase in the real value of money, and an increase in demand. This mechanism was at the core of the aggregate demand/aggregate supply model of textbook fame: Lower output would lead to a lower price level, which in turn would lead to a higher real money stock, which in turn again would lead to a lower interest rate, which finally would increase aggregate demand and output. This never felt like a very convincing stabilizing mechanism, especially in a world where central banks increasingly ignored the money supply and focused on the interest rate instead.

I’m pretty sure even Pigou came to believe that the real balance effect was nonsense.

Patinkin is interesting because in many ways he is the father of non-Walrasian equilibrium, who inspired people like Clower, Malinvaud, and Leijonhufvud. In short, price and quantity adjustments matter, and simple price clearing is RBC, Robert Lucas, horse shit. There is a lot to be done to fix macro models, like say more direct modelling of the financial sector, but for me I think we need better models of how prices and quantities adjust, so we can rid ourselves of the Calvo Fairy.
.....................................................................

Well, it looks like, Trump is keeping a Trump tradition alive: Appointing really rich guys to important post.

Quote

In 2011, when Republicans were threatening to force the government to default on its debt if the party's policies were not adopted, they found support in a flashy, wealthy businessman: Donald Trump. “The Debt Limit cannot be raised until Obama spending is contained,” he tweeted.

But, I guess Trump's deficits are okay? How convenient.

Quote

If he gets the job, Powell would be the richest Fed chair since banker Marriner Eccles, who held the position from 1934 to 1948, according to Washington Post reviews of former Fed chair financial disclosures and former Fed historian Gary Richardson.

On a historical note, Eccles was actually one of FDR’s better advisers. And he was a Republican too, amazingly enough. But, I guess that was back in the day when you had sane Republicans, which seemed to have gone the way of the dinosaur.

............................................................................

Yes, I think compromise is great, but not with a bunch of idiots or idiocy.

http://www.msnbc.com/rachel-maddow-show/tuesdays-campaign-round-103117

Quote

Trump’s re-election campaign unveiled a new 30-second television ad this morning, attacking the “radical left,” and demanding that Democrats stop “obstructing” and start “working with our president.” In reality, congressional Dems have been blocked from participating in most major policy talks this year.

How do you compromise with people that go out of their way to destroy decent access to healthcare for everyone? You don’t.

How do you compromise with people that blame our economic troubles on young or brown people? You don’t.

How do you compromise with people that think women should become basically free indentured domestic labor because of “family reasons”. You don’t.

How do you compromise with people who are determined to cut taxes for the rich and make pie-in-the sky or horseshit promises how that will benefit everyone on else. You don’t.

How do you compromise with people that are willing to look the other way where the alt right or Nazis are concerned? You don’t.

Whether the Democratic Party is or isn’t compromising with the Republican Party, it matters not, in my opinion. There is little to compromise with these days.
 

[Morpheus]

Trump is on twitter blaming Chuck Schumer, so yeah, don't expect him to bring people together behind him. He is distinctly lacking in leadership skills.

[LongRider]

18 minutes ago, Morpheus said:

Trump is on twitter blaming Chuck Schumer, so yeah, don't expect him to bring people together behind him. He is distinctly lacking in leadership skills.

Jr. is on the twitter blaming Dems too.  That rotten apple didn't fall far from the tree/.

[Morpheus]

That family is a cesspool

[LongRider]

6 minutes ago, Morpheus said:

That family is a cesspool

LOL!  The cesspool has combined with the swamp!  

[OldGimletEye]

On 11/1/2017 at 9:11 AM, Nasty LongRider said:

LOL!  The cesspool has combined with the swamp!  

Well, I guess Republican's little Rienzi fantasy isn't quite panning out. Or maybe it is and they just speak a different lingo. For instance when they say the word "elitist" they don't mean elitist in the way we imagine, but mean somebody that dared to disagree with Rush Limbaugh.

[Mlle. Zabzie]

So, House tax reform bill has been delayed by at least a day.  Swirling rumors continue to say that it is the SALT deduction that is the hold up.  Senate hasn't given a day for certain, but suggests November 6.  One interesting thing - looks like we are going to have 4 brackets - they are keeping 39.6%, but will have it kick in at a higher rate.  Another interesting thing - looks like the 20% corporate rate is intended to kick in immediately (but perhaps not retroactively).  They are also talking about a temporary 5 year full expensing program.  That is a huge boost, potentially, for manufacturers and infrastructure, but (1) it's temporary, (2) I see this as giving rise to more automation not to more jobs (i.e., you can basically build fully deductible robots) and (3) it's also potentially a kick in the teeth for service based businesses.  

Separately, there was a trend in the hot M&A market over the past 3 or 4 years where buyers of businesses in asset or flow through form were asked to pay for the basis "step-up" or the value of deductions delivered by C corps in connection with a deal.  Well advised folks with leverage, if they agreed, agreed to pay only as and when realized and at the then-prevailing rate.  Some, however, paid up front, or locked themselves into a rate.  So, you know, will be interesting to see what happens to those deals.

[OldGimletEye]

On 11/1/2017 at 9:32 AM, Mlle. Zabzie said:

 (2) I see this as giving rise to more automation not to more jobs (i.e., you can basically build fully deductible robots)

Interesting observation.

Just for the sake of argument, lets just say the additional capital will eventually raise productivity.

But, the adjustment process make take a very long time and as such may not mean much to the average worker.

This is sort of like Krugman’s two equation dynamical system that has returns and exchange rates that takes a very long time to adjust to a new equilibrium condition.

[Mlle. Zabzie]

9 minutes ago, OldGimletEye said:

Interesting observation.

Just for the sake of argument, lets just say the additional capital will eventually raise productivity.

But, the adjustment process make take a very long time and as such may not mean much to the average worker.

This is sort of like Krugman’s two equation dynamical system that has returns and exchange rates that takes a very long time to adjust to a new equilibrium condition.

Interesting - meaning that the effects of a temporary provision like this, if any, would be generational from an average worker perspective, but immediate from a corporate entity perspective.

Also, the energy sector loves this.

[Mr. Chatywin et al.]

1 hour ago, Morpheus said:

Trump is on twitter blaming Chuck Schumer, so yeah, don't expect him to bring people together behind him. He is distinctly lacking in leadership skills.

Modern day presidential! 

42 minutes ago, Nasty LongRider said:

LOL!  The cesspool has combined with the swamp!  

Seems like we need to workshop a new term.

24 minutes ago, Mlle. Zabzie said:

So, House tax reform bill has been delayed by at least a day.  Swirling rumors continue to say that it is the SALT deduction that is the hold up. 

From a whip standpoint, why is this still an issue? Didn’t they have the votes before even if all the Republicans from NY, NJ and CA voted no?

[Morpheus]

1 minute ago, Tywin et al. said:

Modern day presidential! 

Seems like we need to workshop a new term.

The Trumpdump

[aceluby]

15 hours ago, Kalbear said:

There will not be a trial in that case. Trump almost certainly will not go to any trial and will go to major lengths to avoid a trial, and his lawyers will advise him heavily to avoid anything resembling a trial. 

My suspicion is that Flynn, not Manafort, will be the first to be pardoned. And Flynn will likely be the next one on the bingo card. 

My question for this though, is that if they are pardoned, can they still legally take the 5th since they can't legally self-incriminate?

[Mlle. Zabzie]

5 minutes ago, Tywin et al. said:

Modern day presidential! 

Seems like we need to workshop a new term.

From a whip standpoint, why is this still an issue? Didn’t they have the votes before even if all the Republicans from NY, NJ and CA voted no?

I don't think they do.  There are currently 433 members of Congress, I believe (taking into account effective resignations that haven't been replaced).  So they need 217.  I will assume that all Democrats will oppose.  I believe there are 194 Democrats, so I think they can lose 22 votes.   New York and California alone are 23.  Now, they won't lose all of either delegation.  But there are 5 from NJ, and you also have to think that Pennsylvania and Illinois are in the discussion, both of which have several Republican Congressmen.  So yes, it is an issue.

[Maithanet]

7 minutes ago, Mlle. Zabzie said:

I don't think they do.  There are currently 433 members of Congress, I believe (taking into account effective resignations that haven't been replaced).  So they need 217.  I will assume that all Democrats will oppose.  I believe there are 194 Democrats, so I think they can lose 22 votes.   New York and California alone are 23.  Now, they won't lose all of either delegation.  But there are 5 from NJ, and you also have to think that Pennsylvania and Illinois are in the discussion, both of which have several Republican Congressmen.  So yes, it is an issue.

I wouldn't think Washington or Oregon would be too happy with it either.  NY, CA, NJ, PA, IL, WA and OR account for 51 Republican House votes.  So less than half of those delegations would be sufficient to torpedo removing the SALT deduction. 

[OldGimletEye]

On 11/1/2017 at 9:53 AM, Mlle. Zabzie said:

Interesting - meaning that the effects of a temporary provision like this, if any, would be generational from an average worker perspective, but immediate from a corporate entity perspective.

Yes, basically if we are just looking at the process of adjustment to a new equilibrium and not counting other issues like corporate concentration, which calls into question, whether they need higher returns, the labor insurance role corporate taxes can play, or whether those who invest will change their behavior all that much, or the long term fiscal drag these cuts will create.

And without too much thought, we probably can create some kind of welfare function, showing that even if a future generation will be better off once the adjustment process completes, it may not be all that welfare improving, if we discount the welfare of future generations and realize whether we do or don't do corporate tax cuts, the marginal utility of future generations is likely to be higher anyway because of future technological improvements.

[Mlle. Zabzie]

10 minutes ago, Maithanet said:

I wouldn't think Washington or Oregon would be too happy with it either.  NY, CA, NJ, PA, IL, WA and OR account for 51 Republican House votes.  So less than half of those delegations would be sufficient to torpedo removing the SALT deduction. 

Yup - if I had to guess, it will stay, in toto, but with some sort of phase out.

6 minutes ago, OldGimletEye said:

Yes, basically if we are just looking at the process of adjustment to a new equilibrium and not counting other issues like corporate concentration, which calls into question, whether they need higher returns, the labor insurance role corporate taxes can play, or the long term fiscal drag these cuts will create.

And without too much thought, we probably can create some kind of welfare function, showing that even if a future generation will be better off once the adjustment process completes, it may not be all that welfare improving, if we discount the welfare of future generations and realize whether we do or don't do corporate tax cuts, the marginal utility of future generations is likely to be higher anyway because of future technological improvements.

Yup.  And, btw, the huge gift here is the pass through rate of 25%.  Now, they claim it won't apply to professionals (doctors, lawyers, etc.), but that's basically a gift to real estate and private equity.  The pass through rate, together with the repeal of the estate tax, is functionally appalling.

[Mr. Chatywin et al.]

39 minutes ago, Mlle. Zabzie said:

I don't think they do.  There are currently 433 members of Congress, I believe (taking into account effective resignations that haven't been replaced).  So they need 217.  I will assume that all Democrats will oppose.  I believe there are 194 Democrats, so I think they can lose 22 votes.   New York and California alone are 23.  Now, they won't lose all of either delegation.  But there are 5 from NJ, and you also have to think that Pennsylvania and Illinois are in the discussion, both of which have several Republican Congressmen.  So yes, it is an issue.

Hmm, I wonder if something changed since they passed the budget blueprint. Here’s the last thing I saw regarding the budget and potential tax cuts:

Quote

WASHINGTON — The Republican race to overhaul the tax code broke into a sprint on Thursday, with House members narrowly clearing a budget blueprint that would allow a tax bill to pass Congress without any Democratic votes, and Senate leaders signaling that the bill could be introduced, debated and approved in both chambers by the end of November.

Those ambitions are already complicated by difficult math, both in terms of tax revenues and vote counts. The budget vote put those competing factors on display, with 20 Republicans defecting and the resolution narrowly passing, 216 to 212, in part over concerns about the possible elimination of a tax break that disproportionately benefits residents of high-tax states. A potential reduction in contribution limits for 401(k) retirement accounts also appears to be stoking an intraparty fight.

Neither the retirement issue nor the squabble over the deduction for state and local taxes was resolved on Thursday, but party leaders vowed to push ahead at an even faster pace than they had previously outlined. Representative Kevin Brady, Republican of Texas, the chairman of the House Ways and Means Committee, said his committee would introduce a bill on Nov. 1 and begin amending it on Nov. 6.

https://www.nytimes.com/2017/10/26/us/politics/house-budget-blueprint-tax-cut.html

Perhaps more Republicans are getting cold feet. It’s easy to say from the back benches what you’d do if you had power, but it’s a lot harder to govern.

[The Wedge]

1 hour ago, Mlle. Zabzie said:

But there are 5 from NJ, and you also have to think that Pennsylvania and Illinois are in the discussion, both of which have several Republican Congressmen.  So yes, it is an issue.

I can guarantee you my Rep from Illinois 6 is all in for debilitating tax reform.  It's all his mealy-mouth can talk about (when anyone can get him to talk at all in a safe-space open-only-to-his-donors event). 

Same for the district next to ours, IL-14.  It's the ONLY thing they care about, besides destroying the ACA.