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All budget busters are welcome

Two years ago it seemed extreme when Bernie Sanders proposed free state college tuition for everyone. He guessed it would cost $75bn and most people wrote it off as the loose talk of a socialist. It was just Bernie being Bernie.

Last year the Repubs passed a corporate tax cut that has created $1trn budget deficits as far as the eye can see and that assumes solid growth. If we get any weakness in GDP (tax revenue) then this will really get interesting. No one seems to pay attention to these figures and they talk as though the better growth figures came out of the blue. There is no cost. Apparently budget deficits have fallen completely off the radar. Bernie’s tuition plan suddenlt seems cheap.

The new trove of Democratic Presidential candidates has taken note. Many now support Medicare for all and some have endorsed the “Green New Deal”. Everyone supports free community college and most accept free state college as a given. This has led to the accusation that the Democratic party has lurched to the left (which isn’t the same as becoming socialists). They have and so have the budget busting Republicans.

Somehow we reached a point where providing free services to the people is leftist or socialist whereas cutting corporate taxes is noble or at least a beautiful free market gesture. Please let’s eliminate the word socialist from the conversation – they believe that the government should own certain industries or at least companies in key industries – like a national phone or oil company. So far I haven’t heard any Democrat advocating for a government takeover of any industry. Bernie wants to offer cheaper or free services to the middle class; Elizabeth Warren wants to increase government oversight.

It is now true to say that the Republican tax cuts have pushed the Dems away from fiscal rectitude. So-called moderates look for ways to pay for some of these goodies which makes their pitch decidedly less attractive than a Republican platform with no budget concerns at all. Progressives have no qualms about budget deficits since Paul Krugman told them not to worry. How can moderates win?

We have entered a race to outspend or out-cut taxes. Keynes is rolling over in his grave. What’s the difference between $1trn and $1.5trn? Will millenials ever wake up to the fact that the bill is coming to them? Alexandria Ocasio-Cortez is a millennial but no one seems to have ever explained government finance to her.

Someone should set up a meeting between Alexandria and David Stockman.

Why did Jerry Seinfeld go to jail?

Do you remember why the Seinfeld cast were put on trial in the final episode? They watched someone get robbed and did nothing (in fact Kramer filmed it). They all decided that a person in distress wasn’t their responsibility. The cast were arrested for violating the Good Samaritan laws of Massachusetts. Normally Such laws protect you from liability in case you injure the perpetrator of the crime.
In England the laws are more aggressive (Seinfeld style):
In instances where there has been an assumption of responsibility by the bystander, a dangerous situation was created by them, or there is a contractual or statutory duty to act, criminal liability would be imposed on the bystander for their failure to take action.”

England already has the solution to terrorism!

All they have to do is enforce this law with new vigor. Anyone with knowledge of a person’s plans or desire to kill innocent people would be guilty as an accessory to murder. Yes, that would include girlfriends, Imams, parents, and roommates. If you don’t inform on suicide bombers then their sentence will also be yours. One of the men in the last British attack was in a video about the glories of Jihad. All the people who were in the movie with him and the director should be arrested. Call it aiding and abetting, or involuntary manslaughter if you like. We want every citizen to be an informant.
If a girl can be put in jail in the US for involuntary manslaughter because she told her boyfriend to kill himself, then an Imam can certainly put be put in jail for telling people to wage Jihad. He would have to be very sure that no one in the crowd would ever do anything violent.

It’s very hard to prepare to commit suicide while killing as many people as you can and stay totally silent during the planning (or contemplation) stage. We don’t need to find accomplices we just have to put the fear of God into the perpetrator’s friends and family. This could trigger a lot of false positives but it would also produce a lot of serious conversations with the prospective Jihadist about how he is putting all his friends and family in jeopardy. People would have to choose their friends carefully.

You may say this is too extreme and would create a society overloaded with informers like in East Germany during the cold war. The test question to ask is – If you knew someone who told you he was planning such an attack would you keep quiet? I wouldn’t.

So why can’t I demand the same level of civic duty from every citizen?

A Reply to the Madison Initiative

Last week I went to a talk by Larry Kramer, a lawyer at the Madison Initiative – a subsidiary of sorts of the Hewlett Foundation. I struggled with his balanced assessment of blame regarding the dysfunction of Congress so I wrote him this letter as a retort:

The Problem: Congressional Dysfunction

The Madison Initiative: The objective is to find solutions to congressional dysfunction so that government works as it should for the benefit the country as a whole. You argue that unwillingness to compromise has spread evenly throughout both parties and therefore we cannot blame either party for this dysfunction.

This is a false assumption/belief.

If we can show that one party has moved significantly away from its traditional position in the political spectrum, then it naturally follows that both parties will become unwilling to compromise. For example, if the Democratic Party becomes a Marxist party, it will dig in and only accept legislation that promotes or advances its new radical ideology. Similarly, the Republican Party will find this new agenda to be completely unacceptable, so it too will try to veto every Democratic initiative. The fact that both have become intransigent is not a sign that both are equally to blame. One has completely stepped away from representing the American people and so it is solely to blame.

The Republican Party over the last 30 years has become dominated by media ideologues. The Democratic Party has no equivalent set of influencers. There is no one on the left as extreme as Michael Savage or Rush Limbaugh on the right. It is an easy task to show that the Republicans have moved to the right in lockstep with the demands of their entertainers ( The Democrats have responded appropriately with intransigence.

This means we have a new task. If we are to improve functionality, then we must make sure that congressional representatives are voted in that represent the views of the population [more or less). The problem with a radical party is that it may pass laws that are completely out of sync with the beliefs of the country (See NSDAP in Germany) even, or especially when, they are elected in disproportionately large numbers.


  1. The Democratic Party could finance a more extreme left wing [radio or Internet] media program to energize its own base. This may help offset the influence of “hate” radio.
  2. A legal battle must be made to eliminate Gerrymandering at all levels of government. Proportionality is critical to any democracy. (I shall dodge Hamilton’s apprehension about mob power.)
  3. Term limits must be enacted. This will prevent old and famous politicians from gathering too much power.

Final Thoughts

The intransigence of Democrats during the Bush II years was an appropriate response to a government that was engaged in radical policies. One would expect and demand such inflexibility from the opposition. It does not prove that Democrats are equally responsible for dysfunction unless you can show that Bush’s wars, support for torture and warrantless wiretapping (to name 3 easy cases) were well reasoned and consistent with American values.

Greater proportional representation may not prevent stalemates. These will still occur when no significant polarization exists on a specific issue in the voting population. The goal must be to prevent majority power accruing to a radicalized few – that is far worse than dysfunction.

History is replete with examples.

If you are against immigration, are you a racist?

History is replete with periods of economic weakness where workers stood against immigration because jobs were so hard to find. You may say that you know that all those unemployed people were really just racists looking for any excuse to keep out “the others”. If you do then you need a lot of evidence. It is true that if I have a good economic reason to want to keep people out then it’s easy to demonize nonwhite immigrants. It serves a purpose. In fact their desire to come here and take your job may make you into a racist but it all began with economic insecurity.

I have no evidence to support the assertion that Donald Trump is a fascist or a racist. He is against immigration just like his constituents and immigrants tend not to come from England. There is no hate speech about Jews, African Americans or Chinese people. There is no assertion that the real America is just made up of people from Western Europe. That’s what a fascist would be saying.

If Hillary looks to attack him by conflating an anti-immigration stance driven by anemic wages, with fascism – she will fail. David Duke may like Trump but the people that have nominated him are not a bunch of David Dukes. America is not that evil.

The 100th Anniversary of Sykes Picot!

Yes it’s 100 years since those two guys helped draw country borders in the Middle East – with the help of Churchill and T.E. Lawrence. Every challenged historian wants to denounce them as fools who didn’t understand the region. If it weren’t for them we wouldn’t have all these problems … really? Let’s say you wanted to draw those lines today – where would you put them? Is Syria one or two countries? Is Iraq a country at all? Do the Kurds get their own borders? If anything we should be able to look back at their herculean task with a little humility and give them credit for trying. No matter where they drew those lines, even if they did it today, we could easily say they were wrong.

Bernie Sanders is becoming toxic, and you’re surprised??

Bernie refuses to stop campaigning even though he has no chance to win. Every day is a new attack by this fellow Dem. against the presumptive nominee. Oh, sorry – he’s not a Democrat. He was always a malcontent independent, socialist, obsessively repeating his talking points. He doesn’t know how to stop and he doesn’t care about the team. He deliberately chose not to be on the team.

If you like his message then I have good news – it will be repeated ad nauseam throughout the election cycle and well after. The Clintons pulled the party to the center and abandoned the working class. That left a huge hole to be filled. The party’s base has been craving such a leader for almost twenty years. Now that they found him they should recognize their own party has utterly failed to provide such an instrument of change.

The lesson of this election cycle is that the two party system we backed into, is desperately lacking.



We need to reclaim the word conservatism.

As Rand Paul contemplates his candidacy he must contend with the growing conviction among Republican party primary voters that we must make war – with everyone. Rand is a libertarian/isolationist who has voted at times against expanding the defenses budget. To run he must pivot, Romney style, and pretend to be someone or something he is not.

Conservative is a buzzword that has been successfully taken over by Republican entertainers and primary voters. Every time I hear the word it occurs to me that many people would see me as conservative. I dress conservatively. I have a successful monogamous marriage. I don’t swear (much) or drink. I appear to be so classically  Republican that I am approached to join racially pure golf clubs and to hear racially tinged jokes. My conservative-ness means restrained or conformist. It correctly implies that I don’t react to taunts. I don’t show my hand and I have no desire to engage in bar room brawls.

Here’s the definition from


disposed to preserve existing conditions, institutions, etc., or to restoretraditional ones, and to limit change.

cautiously moderate or purposefully low:

a conservative estimate.

traditional in style or manner; avoiding novelty or showiness:

conservative suit.

(often initial capital letter) of or relating to the Conservative party.

(initial capital letter) of, relating to, or characteristic of ConservativeJews or Conservative Judaism.

having the power or tendency to conserve or preserve.

Mathematics. (of a vector or vector function) having curl equal to zero; irrotational; lamellar.

In the Republican party the word means two things:

  1. A Christian
  2. Scared or angry war lovers

I am neither.

Recent polls show a rise in the desire of Republicans to invade Iraq (again), Syria (to get ISIS) and Iran (because they might have “the bomb”). They look at Obama’s recent deal to eliminate Iran’s bomb building program as utterly bizarre since they were studying war plans. To not be OK with re-invading the Middle East is to be liberal (?). They support freedom of religion laws and ten commandment carvings outside of every state courthouse.

We characterize ISIS as radical Islamists because they want war and are dying to revive their civilization back to its peak of a thousand years ago. They can never be too pious. Our war mongering radicals want to resurrect America back to its pinnacle of 60 years ago but they are not called radicals – they’re called conservatives. The word’s true meaning gives them and their ideas a respectable feel as though all the ideas were well thought out by cautious, judicious intellectuals who normally never advocate foreign invasions. They learn through prayer that Jesus supports their positions. Anyone, including Rand Paul, who doesn’t want to grow and deploy our army – everywhere, must not be a patriot – and he sure can’t be a true conservative.

I end up rooting for the libertarian, anti-government nut-bar who wants to prevent the government from testing my water, food and air. After I die from food poisoning the company that made the beef will get what it deserves – bankruptcy. I shall cheer from my grave. Unfortunately I have to look to this wing of the Republican party for thoughtful restraint with regard to foreign policy and defense spending. Rand needs the cover of the word so badly that he is already abandoning many of his beliefs. He was an atheist who mocked religion and he is an isolationist but the primaries make candidates conform to the tea party definition.

Perhaps Mr Paul can hand out dictionaries during his campaign tours.

The Beyonce Economy

As labor becomes free (along with information), our most productive skilled laborers and capital owners are rendered freer to perform their craft. Let’s take a look at Beyonce.

Given our willingness to allow in an unlimited number of illegal aliens she can now hire a bevy of dirt cheap personal assistants to take care of her baby, clean all her residences and chauffeur her around at a far lower price than in the old days. She can employ skill-less university graduate interns to tweet, post on Facebook, handle Instagram and produce an unlimited number of photo-shopped pictures for distribution. She can hire an army of free security guards and hair stylists. All her computers, phones, children’s toys and clothes are made overseas so to her, they’re almost all free.

All this gives her more time to perform which is where the real money is in music. Her productivity has exploded. The interns who do her tweeting might be able to afford a ticket if they save for a month. The key to her success is that she sells a lot of small stuff to many underpaid fans (like her security guards) since they could never afford anything expensive. Free labor has allowed her expenses to sink to zero while increasing her free time to generate more and more revenue. The same can be said of any corporate titan, CEO or foreign plutocrat.

At the end of the week she wonders what she can do with all that cash. There are only so many clothes she can wear, cars to drive, or food to eat, little of it gets sprinkled out into the general economy. And then she gets an idea – buy great gobs of luxury real estate. In so doing she drives up the price of land and diverts builders away from producing low or middle income housing. All those interns and security guards will have to commute for two hours to get to her.

The bid she puts in for that Manhattan skyscraper condo will have to be high enough to compete with freaked out Russian and Chinese oligarchs who need a place just in case their world collapses. Ever wonder why so many apartment/condo buildings in Manhattan (or LA, London, Miami, or Toronto) are dark at 8:00 pm on Wednesday night? It’s because Beyonce can only be in one place at a time. The next time you get a tour of NYC and see all the new condos going up at huge prices, consider – the population of Manhattan has risen by a measly 7% over the last 25 years! There are NOT more people chasing less real estate. There is actually far more real estate per person. The new mayor (a liberal Democrat) is freaking out and has no idea how any of this happened.

Beyonce could explain it all to him.

What would Keynes do?

President Obama released a new budget plan last week that raises taxes on the wealthy to pay for infrastructure. It does nothing to reduce the current budget deficit In fact he predicted it would rise by 20% next year). The President continuously believes that one more magical fiscal push will get us over the hill. He also thinks that allowing in more poor immigrants, who would easily find work, would boost social security tax revenue enough to offset big increases in spending from entitlement programs. (Is he serious?)

The US budget deficit has shrunk from $1.4 trillion in 2009 to a mere $480 bn now so everyone is relieved. The fall in interest rates has reduced the cost of servicing the outstanding debt. I guess I should be happy but I have a problem…

The recession ended in 2009 so we have had six years of growth and the deficit is still about 3% of GDP. The entire logic of running active fiscal policy (Keynsianism) is that a country must run surpluses in good times to pay for stimulus in bad times. We have forgotten the first part. Politicians seem very sensitive to the flawed recovery since median incomes are not growing and the proper measure of unemployment (U6) still shows that good jobs are scarce. This rather unsatisfying bounce-back has kept them in spending/borrowing mode.

We have record levels of tax revenue and a steady 3% growth rate so politicians need to adjust government spending to suit our current state. Yes, wages are stagnant so  revenue will persistently fail to cover poverty programs caused by lingering un and under-employment: Medicaid, Foodstamps, UIC, and low taxable income. There is only one way to fix this huge (circular) mess (free the Yuan!) and neither Obama nor the Republicans have any intention of doing it. Yet they apparently can’t reconcile themselves to the economic climate that they have created. Every day they whistle on their way to work in a state of denial as though magic will intervene. Perhaps we will grow forever at a faster and faster rate in spite of the economic stagnation in the rest of the world.

If a Democrat is a believer in active fiscal policy he must buy into counter-cyclical budget adjustments, not perpetual stimulation and the buildup of debt. If he can’t then he must become a Republican and advocate a balanced budget – even during horrible recessions. Our anemic economy did not come from tax policy or (too) big government and it won’t be fixed by loose fiscal policy or smaller government.

Keynes had a reasonable idea and exchanging debt for Chinese-made clothes was not part of it.


A Mannequin for President

I never did understand why the Republicans chose John McCain in 2008 instead of Mitt Romney. Mitt just looked so much more presidential. They finally did the logical thing in 2012, ignoring all of his past sins against “conservative principles”. They ignored his flip flopping and his weird cult. They rationalized his rather questionable business practices and tried to overlay their values onto his blank slate.

Romney could have been engineered by a Hollywood casting director. He is very tall ,very handsome, very rich, and very … flexible. He smiles easily and is willing to tell every audience whatever it wants to hear.  If he needs statistics to support his argument of the day, he just creates some and then obfuscates when the fact checkers come knocking. His sunny optimism allows supporters to believe him when he says he will create 12,000,000 new jobs [without any plan whatsoever].

Continue reading A Mannequin for President

If I were the moderator…

I would establish some simple ground rules or facts that are indisputable so as to preclude pandering and stupidity:

  1. Medicare is going broke so neither candidate is allowed to say that leaving it just the way it is a good idea.
  2. The defense budget is so huge that even the military itself realizes that it can be cut. Both sides of the aisle agreed to cut it to solve, at least partially, our budget nightmare. Neither candidate is allowed to say that they would never reduce the military budget.
  3. The decline of the middle class has nothing to do with tax policy. Lowering their taxes further will have just as little impact on their welfare as the previous five tax cuts in the last 10 years. Neither candidate is allowed to claim that tax policy will save them. [Their taxes are already extremely low]
  4. Continue reading If I were the moderator…

Can Chinese peasants referee football games?

I wax on constantly about the impact of a billion new Chinese laborers being tacked on to our labor force. The problem is not as simple as outsourcing by itself. It's what's in the head of every employer when they hire a new worker: the knowledge that there is a virtual ocean of nearly free labor available online or offshore.

This understanding is so widespread that even NFL football owners won't yield to the demands of a union – any union. The NFL has annual revenue of $9bn and the referees aren't even asking for a raise – they just want to keep their current pension benefits. The league wants to cut them by $3mm/yr.  

That's 0.33% of revenue.

Scott Walker and David Koch must be advising the NFL. Union busting has become a part of our culture – just listen to talk radio. Yes, organized labor went way overboard thirty years ago but now the pendulum has swung so far that we have officially entered a race to the bottom verses the Viet Namese – there will be no winners. 

Pinkerton guards enforce a lockout at Carnegie Steel

Peasants can't afford football tickets… or iPhones.