Reading the tealeaves on the Trump end game

The Thinker by Rodin

If it’s true that thirty Senate Republicans would convict Trump in an impeachment trial (if a secret vote were allowed), then perhaps what’s needed is a plausible reason they could openly vote to convict Trump. The obvious reasons don’t appear to be enough. Senate Republicans don’t seem to be bothered by his grifting, and likely won’t be the least bit fazed that he’s decided to host the next G-7 meeting at his money-losing Miami resort either. It appears that in general Republicans are on board with using public office for private gain.

They also probably won’t be bothered by what Trump’s chief of staff, Mick Mulvaney, openly confirmed today: that aid was withheld from Ukraine specifically to force Ukraine to look into possible Democratic misdeeds there, misdeeds that only appear in the fevered imaginations of the rightmost of the right wing. That’s open lawbreaking, but is most likely wholly excusable by Republicans.

But Trump’s decision to abruptly withdraw our special forces from Northern Syria, in the process abandoning allied Kurdish separatists who were instrumental in neutering the Islamic State, well, that might do it. Hard to say yet but as bad as this is, it keeps getting worse. Turkish president Erdogan wasted no time in sending in paramilitary forces when our troops started to withdraw, and had them throw some volleys near our troops too for good measure too. The House voted 354-60 to condemn Trump’s actions in Syria. Senate Majority Leader Mitch McConnell is holding up a similar vote in the Senate, which would likely attract an even higher share of Republicans.

Trump is basically saying to Congress: Impeach me! I dare you!

His lawbreaking is open; the case irrefutable, and it will rest entirely on whether Republicans will put country over party. Right now that looks like a losing bet. However, this Kurdish mistake might be the fig leaf Republicans need. The scope of this disaster is just starting. It’s likely to get much worse.

For example, it looks like we have nuclear weapons in Turkey, a disclosure we only know about because Trump has seemed to confirm it, a breach of long-standing policy. We rent these bases from Turkey, but Turkey essentially control our forces there. Which means that Turkey might grab our nuclear weapons. Oops.

So it’s possible that Turkey would seize these weapons and once seized who knows where they might end up? Presumably it would be very hard to trigger one of these weapons. I hope all sorts of specially encrypted codes would be required, but who knows? They could probably be disassembled and, worse, reengineered. It’s not clear if there is anyone left in the Defense Department agile enough to get these weapons out of Turkey.

There is that plus a whole host of other bad things there that are underway. The Kurds were one of our few allies in the region, and now they are aligned with Syria and Russia simply to survive. There are already atrocities being committed against Kurdish fighters and civilians by Turkish paramilitary forces, if not the Turkish army itself. Hitherto, national security has been the Republican Party’s strong suit. Trump is rapidly making our country less secure. From this vote in Congress, it’s clear Republicans are deeply worried by Trump’s actions.

Trump gets more Captain Queeg-like every day. His latest meeting with Congressional Democrats was described as a Trump meltdown. Trump is pretty obviously cracking, if he hasn’t cracked already. I wonder if like Richard Nixon during Watergate he is talking to a portrait of Abraham Lincoln. Not likely. If talking to any portrait, it would be one of Andrew Jackson.

As Gallup pointed out, when a majority of Americans polled said Nixon should be impeached and removed, Nixon resigned. Trump has already met that milestone. This suggests that Trump’s resignation should also be forthcoming. Like Nixon, there would be no doubt that he would be impeached. It’s much less likely he would actually be removed from office, but that may be changing.

Our genius president would be wise to seriously consider resigning. That’s what most geniuses would do, looking at the bad hand of cards he has served himself. Many believed that Nixon made a secret deal with his then vice president Gerald Ford to pardon him for his offenses before resigning, which Ford did sometime later. A more rational Trump would be looking for a similar exit strategy. It’s really his best hope as his prospects for winning a second term diminish.

Why? Because of that darn U.S. Constitution, which he obviously hasn’t read. Article 2, Section 2 says that the president’s pardon power is unconditional, except in the case of impeachment. So a President Pence could not pardon a former President Trump who is impeached, convicted and removed from office by Congress. This means that after his trials for his many misdeeds are over, Trump would likely spend the rest of his life in prison.

Trump’s vanity and boundless ego probably won’t entertain such a suggestion, and it’s doubtless anyone on his staff has the spine to suggest something pragmatic like this. Nixon was rational enough to know when to resign. It’s unlikely Trump will ever see the bad hand he dealt himself.

Turning of the tide on Trump’s impeachment?

The Thinker by Rodin

Having recently written that there was no bottom for Republicans, I can’t help but wonder now if the tide is finally turning against Donald Trump.

I don’t mean his impeachment. I don’t see how that’s not going to happen now. I mean his removal from office. As I noted in the last post, it’s a high hurdle, since it takes 67 votes, which means 20 of 53 Republicans have to vote to remove him, along with all Democrats and independent senators. It’s never been done successfully before, but then arguably we’ve never had a president who is so chronically a liar and lawbreaker before. And that says a lot because if you study Andrew Jackson’s presidency, you can see why Trump is so busy emulating him.

I believed from the start that if Democrats opened impeachment hearings, the public would come along. And they are coming. The most recent omen that should scare Republican senators: a Fox News poll that 51% of Americans want to see Donald Trump impeached and removed from office. 45% are opposed, but that’s a nine-point shift since July.

It’s hard to see how this gets better for Trump. Not only is he our most reckless president, he’s also our stupidest. He admits lawbreaking that proves the Democrats’ points, making calling witnesses pretty pointless except as a means to add more charges. When you trust your gut more than you trust professionals who are supposed to manage your problems, expect to fall flat on your face. Trump does many times a day. Republicans keep looking for a way to excuse his behavior, but they can’t. Republicans in Congress are now largely running from the press. They don’t want to be pinned down by either the press or voters.

The thing is, there are apparently enough votes to convict Trump already … if senators could hold a secret vote. Maybe in the end, that’s how it will go: they’ll create some mechanism where they put their vote secretly in a box and have it counted. This is likely as brave as these senators will get, since they seem otherwise wholly intimidated by Donald Trump. But the loonier it gets, the easier it may be to summon the political courage required. There is, for example, this tweet by Donald Trump:

That’s right: no one has more wisdom than Donald Trump. How do we know? He says so!

Cracks are appearing all over his ship of state. It’s not just whistleblowers, but also the courts that are beginning to smack him down. Those summoned to testify in front of Congress are starting to come forward, particularly those that no longer work for him. Of course Trump and his Justice Department want to claim executive privilege over those they no longer employ. The real Trump toadies seem to agree, but people are coming forward and testifying anyway.

His stonewalling of Congress isn’t helping him either. First, it gives those who don’t like him more incentive to go against his will: whistleblowers are coming out of the woodwork. Second, the truth is coming out anyhow: there is too much to control, and it doesn’t help when your administration is wholly inept at it. It keeps getting uglier and more egregious. Our ambassador to the European Union was ordered to work with Ukraine, even though Ukraine is not part of the E.U. Our former ambassador to the Ukraine was abruptly fired when she wouldn’t do Rudy Giuliani’s bidding. Giuliani is not a federal employee and has no delegated responsibility. And then there’s Rudy himself, who seems as equally unhinged as Trump. He claims he is Trump’s personal lawyer, but it appears that Trump isn’t actually paying him. Trump loves to get something for nothing. In this case, Giuliani is more like a deadweight dragging him down.

Trump simply doesn’t understand that grifting is bad. He’s surrounded himself with sycophants who agree: the whole point of government is apparently to loot it. There’s no magic document out there that is going to clear him. Instead, day by day, the accumulating evidence will get worse as more grift is exposed.

Things will really hit the fan when his tax records are exposed. He’ll try to keep it bottled up in the courts, but this strategy won’t last forever. As for obstructing Congress, it’s not even slowing down impeachment hearings that much anymore. Trump likes to think he can control what the House can do, but he can’t. He’s impeached already; it’s just a matter of time.

What does it take to get at least 20 Republican senators to vote to convict this guy? It’s not so much finding their backbone, as finding their constituents have turned against him. Now 20% of Republicans support Trump’s impeachment and removal. By nine points, independents favor it as well. These numbers will only continue to grow. In this case though Nixon’s crimes and obstructions look relatively minor. The case against Trump is overwhelming. If there is enough of a political price to pay, Trump can be removed.

The job for the rest of us, particularly those represented by these Republicans, is to let them know they will pay a price. I’m not saying that enough Republicans will summon the necessary courage, but if it happens it’s likely to come like a torrent. The cracks have appeared. At some amorphous point I think it’s likely to come tumbling down.

Here’s hoping.

Trump is unraveling in plain site

The Thinker by Rodin

The governing phase of the Trump presidency is effectively over. Donald Trump is unraveling in plain site. As a result there is basically nothing he can get done between now and the election, assuming he survives that long. I am very skeptical now that he will make it that long.

You know what people care about by how they spend their time. Right now, all Trump cares about is impending impeachment hearings. He has no time to govern because most of the time he is tweeting, and mostly he is tweeting about Democrats having the audacity to hold impeachment hearings against him. There has been 36 tweets today so far, and it’s only 9:15 PM. The first one was at 5:00 AM. And most of them were related to the impeachment investigation. So far that’s nine more than the 27 tweets yesterday, again mostly impeachment related. It’s hard to find a waking hour when our president is not tweeting.

When you tweet all the time, it squeezes out the time you need to actually govern. To govern, you have to make decisions and take actions. You need to talk with your aides, consult with foreign leaders, heck, consult with your own party. Instead his presidency is now largely a series of multiple tweets an hour, mostly full of rage and hurt.

This self-professed extremely stable genius is proving he is none of these things. He is also proving himself awfully damned stupid, or perhaps just incredibly incurious. The main reason Nancy Pelosi approved an impeachment investigation was due to the “transcript” (actually, a bunch of Cliff Notes) of a call he had with the president of Ukraine back in July. It says right on it: declassified and released on authority of the President. And the notes say explicitly that he wanted political favors from Ukraine:

I would like you to do us a favor though because our country has been through a lot and Ukraine knows a lot about it. I would like you to find out what happened with this whole situation with Ukraine, they say Crowdstrike … I guess you have one of your wealthy people… The server, they say Ukraine has it. There are a lot of things that went on, the whole situation. I think you’re surrounding yourself with some of the same people. I would like to have the Attorney General call you or your people and I would like you to get to the bottom of it. As you saw yesterday, that whole nonsense ended with a very poor performance by a man named Robert Mueller, an incompetent performance, but they say a lot of it started with Ukraine. Whatever you can do, it’s very important that you do it if that’s possible.

This is against the law: compromising our national security for political purposes. It’s not an ambiguous matter. But Trump denied he did this. So he either did not read the “transcript” he declassified or (perhaps because he is functionally illiterate) didn’t understand what he was reading. Most likely he had no idea that what he did was illegal, or felt that it shouldn’t be because his intent was pure somehow in his own mind. According to the still-anonymous whistleblower, someone figured it out, and moved these notes into a more secure electronic vault specifically for code word classified information, another likely violation of our classification laws.

Just today Trump publicly said China should investigate Joe Biden and his son too. It’s like he wants to be impeached. There are two incontrovertible egregious violations of our law right there.

No one is left in the White House to say no to him. Those who did are gone. All he has left are lackeys, who are easily disposed. His trusted source of news is the Fake News … no, not CNN and the Washington Post, but Fox News and right wing websites that are feeding him fake news, such as that Ukraine has an email server that contains the missing Hillary Clinton emails, or something.

Trump is worried about impeachment because it makes him look bad, which reduces the likelihood that he will win reelection. His chances of actually being removed from office are still slim, although I continue to be astonished that Republicans in Congress are still mostly sitting on their hands and biting their tongues while this Captain Queeg roams around the White House. Trump actually believes the fake news being fed to him. More worrisome (but not surprising) are that his aides do too … they actually believe this crap, or they are too timid to say they know better. Trump won’t brook any dissent. Oh the irony: Trump is being undone by the fake news he consumes because, well, it’s fake, instead of the “Fake News” which his actually real news. His fake news can’t be empirically proven. But his case of cognitive dissonance is so severe he can’t admit to himself that it could possibly be fake; or that his “friends” have been faking him out all this time simply so they could wield political power.

Obviously, this isn’t going to end well. The logical me knows what a more logical Trump should do: simply resign at some point, after getting a promise of a pardon from Mike Pence, as I mentioned in my last post. But Trump is severely mentally ill and is not playing with a full deck. Above all, he can’t acknowledge to himself that he is not the glorious image of himself that he sold to himself and to voters. And with an administration full of sycophants, they apparently mostly believe this stuff too, or simply are in it to the bitter end, like our so-called Attorney General Bill Barr.

My wife is expecting that Trump will bust a blood vessel or something and keel over dead. Given his obesity, his chronic lack of sleep, his refusal to exercise and his dangerously disordered mind, she may be right. He is clearly feeling the gates closing. It’s all he cares about.

His days of governing though are plainly over.

Promises of a Pence pardon is now the key to getting Trump out of office

The Thinker by Rodin

Maybe it was my last post that did it. After waiting all year for Democrats to open up impeachment hearings over a clearly lawless president, House Speaker Nancy Pelosi has finally decided to open impeachment hearings, or rather an impeachment inquiry, which amounts to the same thing.

It sure is curious though. Mueller’s report has been out since March and it documented ten episodes of obstruction of justice by Trump. The report technically wasn’t needed. There was plenty of impeachable conduct prior to its release that was illegal if true, along with a trail of Trump detritus-charged or convicted of crimes committed at Trump’s behest.

Trump’s former attorney Michael Cohen is sitting in jail right now for his offense, but his un-indicted co-conspirator “Individual-1” isn’t because, well, he’s the President of the United States, and the U.S. Justice Department has decided justice is deferred for presidents until they are out of office. Impeachment though is a political judgment, not a criminal one. There was no reason to wait other than cowardice, unless you believe in game theory.

Why is it that Trump’s attempt to strong arm Ukraine to help his reelection seems to be the straw that broke the camel’s back? After all, during the campaign Trump invited Russia to hack the Democratic Party, and they thoughtfully obliged. But our political wags didn’t see this offense as impeachable. It’s clear that Trump has crossed many big blue lines. I just thought any obstruction of justice allegation would be a big blue line too.

While no one is breathing a sigh of relief, this is the first truly hopeful sign that Trump won’t finish his term. It suddenly feels different, simply because it’s causing quakes in Congress that weren’t manifested before, mostly among Republicans.

Pelosi probably would not have opened an impeachment inquiry at all had it not been for these whistleblower’s charges, which we can finally read online. I’m convinced though that Trump feels truly victimized. He has no idea that his conduct could be illegal because, well, he is profoundly ignorant on matters of the law and avoids being educated. As far as he is concerned, ignorance is an excuse. Moreover, when his people tried to make him act adult-ish, he fired them. So now he has an administration full of sycophants.

He spent his life breaking the rules and largely getting away with it, so this is normal for him. You can often do that if you can afford to throw teams of lawyers at your problems. It’s the way he has always done business: running them like a criminal syndicate and ripping off anyone foolish enough to partner or work with him. He must have figured Republicans in Congress would keep him from facing any consequences. When Democrats won the House in 2018, that illusion was shattered. But he still has the Senate, its Republican majority and control of the 67 senators he needs to avoid conviction.

Is this still true? The Senate has 53 Republicans so at least 20 would have to be persuaded to convict him for him to go. I certainly thought so in my last post, but political friends are rarely true friends. Basically Trump has no friends. I don’t believe there is one Republican senator that wakes up and thinks, “Gosh, Trump and me have so much in common. I wish I could spend more time with Donald Trump.” He certainly has plenty of sycophants like Lindsey Graham that are ready to kiss up to him. Graham used to hate Trump until it was in his political interest to like him, i.e. when his voters voted for Trump. It’s an open secret that Senate Majority Leader Mitch McConnell dislikes him. He’ll join Trump to advance goals of mutual interest, like getting more conservative jurists on our courts. I don’t think he has ever joined Trump for eighteen holes of golf.

Impeachment and conviction then are ultimately political decisions. That’s how it worked for Richard Nixon. So if a senator up for reelection determines he will pay a political price for not convicting Trump, he might bale on Trump. Trump’s running in 2020 is supposed to help his reelection, not hurt it.

As I noted though, Trump’s approval rating in many red states are tipping negative. Those senators up for reelection that clearly affected by Trump’s unpopularity include Susan Collins (ME), Joanie Ernst (IA), Thom Tillis (NC), Martha McSally (AZ) and David Purdue (GA). Right there that’s five seats that could go to Democrats, which would give Democrats the majority in, even if Doug Jones (AL) loses.

There are a number of red states where Trump’s net approval is at zero or only a few points above. I am using a Morning Consult Poll to track Trump’s approval by state, which is about a month old. This is potentially a concern for Steve Daines (MT, +0 Trump approval), John Cornyn (TX, +4), Ben Sasse (NE, +2) and Pat Roberts (KA, +4). If Trump turns toxic in these states, rather than riding his coattails, they could be pulled down with him.

There are other Republican senators up for reelection who are unpopular but haven’t gotten the memo. Take Senate Majority Leader Mitch McConnell. Just 18% of Kentuckians approve of the job he is doing, so he has less than half the national approval rating of Donald Trump. In a wave election, and with a good Democratic challenger, next year could be his last in the Senate, not to mention as majority leader.

Trump’s impeachment will be the dominant story for months, and probably all of 2020. If it goes to a trial in the Senate, each senator will be making their own political calculation and may decide they have better prospects if they vote to convict him. The Ukraine evidence is damning. There is no way to say it isn’t. All senators can say is that although it’s damning, they won’t convict Trump anyhow.

Still, getting 67 senators to convict is a huge problem. But will a vote ever be taken? Republican consultant Mike Murphy says 30 Republican senators would vote to convict Trump if the vote was secret. It’s not hard to see Mitch McConnell going to the White House to tell Trump that the votes to convict him are there, so he should resign. That might do it. It worked with Richard Nixon. More importantly, for Trump, resignation would be preferable to actual conviction, a distinction Donald Trump’s fragile ego could not endure.

But there’s another reason Trump should prefer to resign. Presumably Trump would require some conditions for his resignation: a promise from Vice President Pence to pardon him for all related crimes. Because what Trump is scared of the most is not his impeachment, or losing his reelection, but going on trial for his crimes. When he is out of office for any reason, at least before 2023, he’s fair game for prosecutors.

If he wins reelection, he’s golden: he can wait out the statute of limitations. But this is a huge and problematic bet for him, particularly with his unfavorables, a recent impeachment dogging him and a possible recession arriving. Doubtless there is some thought that by being exonerated by the Republican Senate he can claim innocence and ride that to a reelection victory. But look at it from Trump’s perspective: do you want to hope you can win reelection despite the unfavorable odds? Or do you want some assurance that you won’t ever go to jail, if you can be assured of a bunch of Pence pardons? Trump is mostly bluster. I think he’ll go with saving his own skin.

Ultimately, he’ll prefer the golden prison of Trump Tower to the bare metal one with cinder blocks in a federal penitentiary.

Democrats in Congress are proving pathetic

The Thinker by Rodin

The only thing sadder than Donald Trump and the current state of the Republican Party and our democracy may be the current state of the Democratic Party.

I’m reading Hillary Clinton’s book What Happened. It’s not particularly interesting or insightful, but I felt a duty to read it since it was a Christmas present from my daughter. I read it where I read most stuff I don’t want to read: when sitting on the john and in snippets.

I’m reading the chapter where she talks about “those damned emails” (as Bernie Sanders put it). It was such a nothing-burger. There was no rule requiring the Secretary of State to use a @state.gov email address. In fact, her successor John Kerry was the first SoS to use one. Nonetheless, Republicans in Congress and Donald Trump turned this nothing-burger into the major topic of the 2016 election. They used it to create unwarranted mistrust against her.

Arguably, James Comey (former FBI Director) threw the election to Donald Trump by reopening the issue just before the election. So if you can inflate a story that is basically nothing and go at it relentlessly, you can apparently win elections. Donald Trump has obviously used this tactic profitably and is busy repeating it relentlessly. Notice that when anything comes up that makes him look bad he makes up some other phony smear against someone else or some group and promotes it relentlessly. And stupidly, the media usually goes along. The latest one is to complain about homeless people in California. You don’t see the press looking a conditions at our border detention facilities anymore. They’ve moved onto something newer and fresher, and Trump has an infinite supply of bait.

Contrast this with what the Democratic Party is doing with regards to Donald Trump’s many misdeeds. The most recent one is the most egregious of all: an allegation by a whistleblower that is likely that Donald Trump asked the government of Ukraine to investigate Joe Biden’s son for potential misdeeds in his work for Ukraine. Donald Trump has relentlessly been using his office for private gain since becoming president. It should not surprise us that he is also using it to undercut a potential opponent in the 2020 campaign.

If this was a quid-pro-quo arrangement with Ukraine, as in “I won’t release our aid to your country until you do this for me” (and Ukraine’s funds have been suspiciously held up), it would be a clearly illegal act, a national security issue and about the highest crime possible relevant to removing a president from office. No wonder this whistleblower felt compelled to blow the whistle. Compared to Hillary’s “crime”, it’s at least a thousand times worse.

So you would think Congress would be doing something to hold Trump accountable. House committees hold sporadic hearings where subpoenaed witnesses rarely show up. The Trump Administration simply stonewalls all Congressional subpoenas and witnesses. Trump claims powers that he doesn’t have. For example, Corey Lewandowsky never even worked for the White House, but Trump claimed executive privilege over his testimony. Lewandowsky did testify, sort of, but revealed little new and was rude and snide the whole time to the committee. The others didn’t bother to show up.

The obvious response by Democrats should have been to call the Sergeant at Arms and put Lewandowsky in the clink. The House has such a cell in the Capitol basement. They could let him out after he pays a fine TBD until he truthfully answered all their questions. The House has done this in the past for those showing contempt of Congress. Naturally, Democrats did nothing.

House Speaker Nancy Pelosi is convinced that impeaching Trump is bad politics. She fears a backlash that will strip Democrats of their majority in the house. This is despite polls consistently showing Trump deeply disliked, even in red states like Arizona. Whereas Republicans proved in its endless Benghazi – Clinton email investigations that going after someone relentlessly is good politics, regardless of whether it turns up anything. It’s Congress doing its job: oversight. Unlike Hillary Clinton though, Democrats have a mountain of credible crimes and misdemeanors against Trump. Any one of them done by Barack Obama would have resulted in impeachment by Republican House of the time.

By doing nothing of consequence, Democrats in Congress are basically enabling a bully. Bullies though just keep getting stronger until they are stood up to. They have to be faced down. If they get away with it, they try even more outlandish stuff. The sky is the limit for Donald Trump. Most recently he had his lawyers make the outlandish claim that he can’t be prosecuted for any federal or state crimes while in office. This is clearly false, but Trump makes his own reality. He’ll keep making his own reality until he is stood up to.

Yes, if impeached by the House he likely will not be thrown out of office because at the moment there are not 67 senators with the spine to do so. Nonetheless, the House should impeach his ass. First, if Congress doesn’t take action in these situations, God help the next Congress that tries to hold a president accountable. Second, keeping aides from testifying alone is impeachable conduct. A Congress that can’t perform its oversight role cannot function. It’s like expecting Congress to write laws without having access to any information. Third, there has never been a case of a president who deserved impeachment more. The legal and political case against Trump is overwhelming.

Also, the optics are changing. The country is now evenly divided about whether Trump should be impeached or not. A majority of House Democrats also favor impeachment hearings. It’s changing because more people are paying attention. The more that do, the more they realize it is not only justified, but necessary.

Democrats can look at history for perspective. Polls showed that Richard Nixon maintained good favorability ratings until shortly before he resigned, and Trump’s are much worse already. Calling attention to his misconduct, as relentlessly as attention was paid on Hillary Clinton’s emails, makes it newsworthy and draws attention.

But at some point, Congress simply needs to draw some boundaries. Simply obstructing Congress’s duty to conduct oversight is impeachable because he is thwarting the intent of the constitution he swore to uphold. It’s quite possible that by taking steps to open impeachment hearings that Trump will cave and start providing witnesses. Bullies after all are more smoke than actual power. Their power diminishes quickly when they are called to account.

Congress should be using every tool in its toolbox if for no other reason than to keep it relevant. The only power it is exercising so far filing lawsuits, which Trump wait it out until they are moot. He’ll probably ignore rulings he doesn’t like anyhow. This minimal oversight seems to be what Nancy Pelosi wants as well. She wants an election to impeach Donald Trump. Hopefully that will work in keeping him from getting a second term, but it does nothing to restore the rule of law and the proper balance of power within government. It’s the latter than is the worse threat in the long term.

The negatives of negative interest rates

The Thinker by Rodin

Donald Trump wants the Federal Reserve to drop interest rates to zero or to even allow them to go negative. It’s pretty obvious why: so he can avoid being at the wheel if a recession inconveniently hits before Election Day. He’s clearly freaking out about the election still more than a year away, as also evidenced by his decision to suspend some tariffs on Chinese goods.

Why should negative interest rates matter to you? It’s not like you can set up a Federal Reserve bank account. The Fed Funds Rate is currently 2.25%. This is the interest rate the Fed requires that one bank charges another bank to park its funds in their bank. It usually parked there only overnight. Any excess reserve a bank has on hand is money they cannot earn interest on. So parking it overnight at another bank allows them to make some money on it.

So what does this mean if the reserve rate is set to 0%? It effectively means there is no reason for a bank to park its excess reserves because it will not earn the bank any money. They might as well lend it. What happens if it’s a negative number, say -1%? Then effectively a bank takes a hit to park its money elsewhere. It would be stupid not to lend it.

A bank could pass its lower profitability from these lower rates onto its depositors. This happens routinely when the Fed Funds Rate changes. We bank at Ally Bank. When the Fed cut its rate by .25%, my savings and money market interest rates were cut by this amount too. Anticipating a rate cut, we at least did one thing smart: we took out a certificate of deposit for one year, which locked in our rate. We’ll earn 2.47% on it after one year, but not before. In general though most people don’t like to tie up their cash like this, so when the Fed Funds Rate drops, they will lose interest income. Better to take that money and risk it on investments is the hope.

Banks could in theory charge depositors’ negative interest rates, i.e. charge them for holding their money. (Considering all the bank fees we pay, some of us in effect already are!) They probably won’t, but accounts that effectively draw little to no interest at least one advantage: safety. Or do they?

Most accounts are fully insured because they don’t pass the threshold of $250,000 per depositor per bank. So yes, if a bank goes under you are likely to get your money back. But since the Glass-Steagall law (passed as a result of the Great Depression) was repealed in 1999, things have loosened. Banks can now invest in speculative investment with depositors’ money. This resulted in the Great Recession when banks loaded up on toxic assets to chase their bottom line. For them, the worst thing that can happen is they declare bankruptcy, which is what happened to so many banks in the Great Recession. The government got to clean up the mess and shoulder any financial losses, i.e. you and me assumed the risk.

Now, as the economy improved and Republicans controlled government again, these financial rules were loosened even further. In 2018, Trump signed into law new regulations that eased oversight on the largest banks, by raising the criteria for what comprises a very large bank. This results in less regulator oversight.

Add in low or negative interest rates though and we add a lot more risk to our financial system. Trump of course is hoping these low rates will incentivize banks to loan money, pumping up the economy. (It might also save him boatloads of money, if he can renegotiate interest rates on his loans.) But by incentivizing banks, we are in effect incentivizing risky loans. In short, we risk another Great Recession, or possibly another Great Depression by doing this.

Some countries are trying negative interest rates to stem deflation or deflation fears. Deflation occurs when money you have today is worth more tomorrow. In that case, there is no incentive to invest the money. Rather, you want to hold onto it, which means it’s not available for others to use. By making savers pay negative interest, it encourages them to loan out the money to stimulate the economy instead.

As a tactic for stopping deflation, maybe it has some merit. It’s working marginally in Japan, which has experienced years of deflation. But the United States is not in a deflationary environment. Hopefully though the Fed is instead trying to prevent deflation from happening in the first place.

Negative interest rates don’t have to lead to financial calamity, at least if they are properly overseen and regulated. But in this country it would be a very nervy thing to do at present. The Fed’s toolset though is very limited and well tried. The Fed’s policy of quantitative easing (imitated by lots of central banks) was one tactic of desperation after the Great Recession when the economy was still a mess even after virtually zero interest rates. Quantitative easing is essentially the Fed buying up investments others don’t want to buy with money the Fed creates out of thin air. They control the money supply, and can create money willy-nilly. That and low interest rates are about all the tools they have left.

A negative interest rate policy looks like the next and more desperate step to keep an economy from sinking into depression. It is basically a tool to use for deflation, which is what happened in the Great Depression. It’s like a fire extinguisher alarm: break glass only in case of emergency.

If investors though figure deflation is going to happen, they have an option: take the money out of the banking system and figuratively put it in the mattress. That way no one can use it but at least it’s safe, unless someone looks in the mattress. It’s more likely though they will move it to currencies and economies that are not deflating.

So hopefully the Fed will take a pass on Trump’s idea. In reality, the problems of our economy are structural and these tactics of the last ten years are basically stopgap measures. The Fed should have been doing more modest increasing of interest rates instead, as our economy, at least if it’s not in a recession, should be able to handle it. Mostly our economy is showing every sign of being over-leveraged and fragile again. If your economy is truly strong, you don’t need to even think about using these tools.

If this house of cards collapses again, it will be felt the way it was last time: soaring unemployment, wiped out savings. A lot of it will be due to risky investments, just like the Great Recession. If you are looking for a true revolution, another Great Recession or Great Depression is a good way to start one.

No bottom for the Republican Party

The Thinker by Rodin

It looks like I have been giving Republicans too much credit. I assumed there was some core group of Republicans who could agree, “This time Trump has gone too far” and bring him down. Apparently, there is no bottom for the Republican Party.

That’s because I assumed that there were some sane Republicans out there. But it looks like when push comes to shove, sanity takes a back seat to subservience and fealty. Republicans apparently love to take orders. They love authoritarians. I’m guessing it gives them some feeling of comfort that somewhere a Big Daddy is taking care of things. Having decided to get on the Trump train, they can’t seem to find a reason to get off, no matter how surreal and ridiculous it gets.

Signs are pointing to a huge train wreck for Republicans in the 2020 election. Some years back I pointed out that Trump would kill the Republican Party. To severely maim the party, Republicans have to lose both the presidency and the Senate. Barring some massive election fraud, Trump is destined to be defeated in 2020. He’s never polled over 50% and most of the time his approval ratings have been mired in the low 40s or lower. Winning with these sorts of negatives is possible only with massive voter fraud or a third-party candidate that siphons off a lot of Democratic votes. Both the 2000 and the 2016 elections likely would have elected Democratic presidents had it not been for the third-party spoiler effect. It’s not Trump’s base that will win him reelection, but Democratic fragmentation.

Winning the Senate requires flipping three Republican seats, which is a bit of a long shot but not impossible in a wave election. Aside from his base, Trump has managed to piss pretty much everyone off. But even among his base, he is bleeding supporters. White men support him, but according to polling he’s recently lost white women without a college education. Trump is losing farmers from his trade wars, and truckers are seeing major layoffs plus the latest tax law raised their taxes by doing away with a lot of their deductions. Meanwhile, Senate Majority Leader Mitch McConnell is deeply loathed in his home state, with only 33% approval. He can’t even be bothered to pump up a pension fund for coal miners. Yes, in deep red Kentucky, McConnell may lose reelection next year.

Rather than face criticism, Trump does the only thing he knows how to do: reshuffle the deck. This means changing the subject, generally by saying things or posting comments on his Twitter feed that are increasingly outrageous. This is effective but it doesn’t actually fix the issues that got him in trouble in the first place.

Moreover, his pattern never varies. When he decided not to put those 25% tariffs on Chinese goods so people could enjoy nice presents under their Christmas tree mostly made in China, then of course when China added new tariffs on U.S. products as they promised it all went out the window. New tariffs were back on and markets plunged about three percent yesterday. They were doing fine until his announcement.

But just when you thought Trump couldn’t possibly get any wackier, he doubles down on the stupid. Just this week Trump:

  • Said he was the Chosen One, implying he was the King of the Jews
  • Said any Jew voting for Democrats was disloyal and un-American because they should put Israel first … uh, what? And how is putting Israel before the United States showing you are an American patriot? Oh wait, because Trump says so. Gotcha.
  • Ordered U.S. companies to leave China, even though he can’t
  • Decided he could issue an executive order to end birth right citizenship, as if he could unilaterally override the 14th Amendment
  • Blamed the chairman of the Federal Reserve for his economic woes because he wouldn’t cut interest rates fast enough, while apparently absolving himself of the blame of nominating Jerome Powell in the first place
  • Said he wanted to buy Greenland and canceled a summit with Denmark, which manages the island, in a huff because they wouldn’t consider it. Actually, Denmark couldn’t even if it wanted to. Residents of Greenland would have to decide. Oh, and he called their female prime minister “nasty”, his word of choice when acting like the obvious misogynist that he is.

We have a president that is, quite frankly, totally nuts and bonkers. Just one of these by a Democratic candidate like Joe Biden would sink their candidacy. But Republicans so far show nothing but increased fealty to a president who by any objective standard is mentally ill and could not be trusted to even competently manage a child’s savings account.

Moreover, a recession is clearly on the way and every action Trump takes seems to be designed to make it worse. It was tariffs that brought us the Great Depression. Doubling down on tariffs simply increases the odds that a recession will turn into a depression. And if there is a recession, there’s not a single adviser to the president who has either the smarts or the wherewithal to help lead the US out of a recession. The closest we have is Jerome Powell, and only because the Fed is independent of the executive and he can’t be fired. When you surround yourself by incompetent sycophants, well, you get incompetent sycophants. Hell of a way to run a “government” … don’t bother to actually govern!

I was thinking yesterday that the tanking stock market might finally be the straw that broke the Republicans’ back. Moneyed capitalists ultimately hold up Republican power. Yesterday, three percent of their wealth vanished because Trump’s ego was hurt. Likely a lot more of it will vanish soon.

The obvious remedy is the 25th Amendment and twisting Vice President Pence’s arms to get a majority of the cabinet to declare our president is too mentally ill to serve. I’ve been waiting more than two years for this intervention, assuming cooler heads in the Republican Party could prevail. While I still hope for it, increasingly it looks like I misjudged the nerve and sobriety of the Republican leadership. They are wholly captured by their captain, and appear ready to go down with his ship.

Real estate investing is exacerbating income inequality

The Thinker by Rodin

Have you met Kevin? Kevin, i.e. Kevin Paffrath, has a YouTube channel, says he’s a millionaire and will help you get started in real estate investing so you can be a millionaire too. He’s handsome, reasonably young and looks overly caffeinated. The same is true of Graham Stephan who while being a millionaire still lives like a miser. He’s subsisting on a lot of oatmeal according to his many YouTube videos. Both are rich and made their millions buying, selling but mostly renting out their properties. And both are glad to help you do the same, as well as coach you on the secrets that made them rich too, for free if you watch only their YouTube channels but also for money if you want to attend their lectures, get their books or DVDs, and get online with them for semi-private chats.

The YouTube algorithm decided I am interested in real estate investing. I’m not interested enough to actually do what these guys are doing, but I do have a friend locally who is making most of his money through renting out rooms in houses that he owns. Maybe that’s what got me curious. This gives him time to do what he really likes: some IT consulting fixing and maintaining computers, servers and such; and coaching at the local high school which pays much less than the minimum wage.

I’m guessing though that he didn’t get all this property by chance. I’m betting he inherited a significant amount of money that let him get started in this business. I don’t know for sure because I’m too shy to ask him. But Kevin and Graham aren’t that shy, and proudly state that they made their fortune the old-fashioned and new-fashioned way. The old-fashioned way is to buy properties on borrowed money on fixed 30-year mortgages, rent them out and use the rent to maintain the properties and pay the property taxes. The new-fashioned way is to use the tax laws that make it possible for them to pay little in the way of capital gain taxes. It’s the latter that really irks me about Kevin and Graham.

Anyhow, they are happy to try to convince you to get into real estate investing too. It’s also clear from watching their videos that they are more than a little obsessed about real estate and money in general. It’s unclear if they have any time to enjoy their money and seem obsessed with acquiring more and more of it. They figure you are too so why not try to monetize their talent? And to be fair, both men don’t appear to be bamboozling anyone. They qualify themselves as just some guy on the Internet, tell you to get your own independent advice, and that making money in real estate can be profitable if you do it right, but it’s not easy.

I was watching Kevin’s recent video yesterday on why he’s not a fan of Roth IRA’s. It’s definitely a perspective I would not get from my personal financial adviser. He shows you how you could use some of the money you set aside to invest, above the amount you would lose over the years with a Roth IRA (by paying taxes on the money upfront) to buy real estate instead. And conceptually, it sounds great. When you save enough to buy one home, rent it and maintain it and ten years later use its profits to go buy another one.

But it all depends on whether you have the time and energy to commit to buying other properties, maintaining them, and being a landlord. For me, being a landlord runs about dead last on the sorts of things I would do willingly. I might sell used cars first. Basically, I’m bad at confronting nasty people. Not all tenants are bad and making sure you have the right tenant is important to keep an income stream going. But there’s bound to be some nastiness. I don’t want to deal with it. You could contract it out to someone else, but that makes it all less profitable.

Like most homeowners, I discovered that the cost of maintaining houses for over thirty years is considerable. We owned a property in Virginia for 22 years. It was bought for $192,000 in 1993, sold in 2015 for $505,000 but we also spent about $120,000 maintaining and improving it. And of course we paid lots of money in interest payments and other fees. In short, maintaining a house is not for the timid or financially challenged. If you are going to get into this game, make sure you can get cheap loans or have a whole lot of working capital.

I was so busy with my regular job that just maintaining our house was more than enough extra work, and it took 22 years to realize the gain on the property, which was transferred to buying our next property. Fortunately we own it free and clear. If you get into real estate investing, the income may appear to be “passive” but you will probably be working your ass off maintaining these properties and dealing with the hassles of investing in real estate and being a landlord.

In short, real estate investing is not for everyone, and it’s not an easy way to riches. But goodness! I’m learning from Kevin and Graham that there are some real tax advantages to it. And that part had me seeing red. It’s not that I can fault Kevin and Graham for getting these perks, but essentially they delay forever paying taxes on all the appreciation of their properties. Moreover, they can effectively escape ever paying taxes on these gains if you never sell them or don’t use the sale to buy something else. You can, for example, bequeath your properties to your posterity, and they can keep this scheme going indefinitely too.

This is in fact how Donald Trump has made his wealth. It’s why he says he loves debt. Rest assured he is deeply indebted, but if he can sell one property purchased largely with borrowed money and buy another one with the proceeds, he can pocket a lot of cash while deferring gains on them too. This is one of the reasons Trump is pulling all stops to keep his tax returns from getting released. If people discover he pays little to no taxes while they do, they are going to be furious.

When Elizabeth Warren talks about a wealth tax, this is exactly the sort of wealth I want to see taxed. You should too. These are all legal schemes, but they drive wealth inequality, exacerbate deficits and in general keep the government from having the revenue it needs to give us a first-class society.

I’m betting Kevin and Graham would grumble a little, but they definitely owe the rest of us a heap of money in the form of higher taxes. Mostly, we need to tax their capital and property gains. We should not feel the least bit guilty to go after it.

Religion is failing us, Part One

The Thinker by Rodin

We just finished Season 2 of NBC’s series The Good Place, which we are watching on Netflix. It’s a comedy of sorts on the afterlife, more specifically on our views of the afterlife. In this version, pretty much everyone ends up in “The Bad Place”, i.e. Hell. Four clearly flawed not so good people end up in The Good Place, or do they? I won’t spoil the plot if you haven’t watched it. Despite some flaws, the show keeps you reasonably engaged, and manages to be reasonably funny while gently lampooning our common notion here in the West about the binary nature of being “good” or “bad” with no allowance for ambiguity.

Here in Northampton, Massachusetts, where I live now, at the Bridge Street Cemetery, sits the grave of someone who would recognize these versions of Heaven and Hell. Our progressive city used to have strongly Calvinist roots. Anyhow, we have the remains of Jonathan Edwards, a colonial Calvinist theologian whose sermon Sinners in the Hands of an Angry God you may have read when studying American history. Northampton has since gone all-progressive with (I’m not kidding you) rainbow colored striped crosswalks. We have probably the highest number of lesbians per capita in the country. If Edwards could arise from the grave, he’d probably figure he was in hell with all the same-sex couples here walking around holding hands.

For the most part though, Northampton is a very peaceful, civil and charming place, which is why we retired here. I’m inured to all the rampant homosexuality around me. That’s because while we have a disproportionate number of LGBTQA folks, the majority remains happily heterosexual. We quickly learned that same sex couples holding hands were no threat to us. But you don’t have to drive too far out of Northampton to find plenty of Trump voters. It’s the furthest thing from Sodom and Gomorrah around here.

I can’t say the same thing about El Paso or Dayton, Ohio. Both cities suffered mass shootings recently in less than twenty-four hours. Twenty were killed in or around an El Paso Walmart yesterday by what looks like a 21-year-old white guy from Dallas with a rifle, trying to save White America somehow. Naturally he’s a Trump supporter. Around 1 a.m this morning, a gunman killed nine people and injured 26 others in Dayton. He had a 223-caliber magazine and body armor, which let him unleash mayhem quickly. Fortunately, police were nearby and managed to kill him pretty quickly. We don’t know yet this shooter’s age, race or motives, but there’s an excellent chance he is young, white and a Trump supporter too.

It’s American carnage, Trump-style. Trump is pushing all the buttons to unleash these horrors by his most unhinged supporters.

Religion is supposed to give us a way to not just cope with life, but to improve it. It’s clearly not keeping pace with the pace of change all around us. The response of many religions is to double down on their articles of faith, but doing so seems to unleash only more of the crazy.

America is rife with “Christianity”, but for the most part doesn’t actually practice Christianity. Frankly, religion is failing us. A belief system oriented around a world where most of us were serfs and reported to a lord doesn’t work well in the 21st century. Watching The Good Place, it’s hard not to ask why so many of us still believe these antiquated notions of heaven and hell.

What passes for Christianity these days is largely crazy and destructive. A majority of Christians in our country are clearly Trump supporters. They clearly approve of most of his policies, including separating families at the border and keeping children in cages and people in crowded, inhumane conditions. These days you can only act as a Christian to someone who is a member of your church. All others can be other-ized as not quite human. These “Christians” find “salvation” (comfort) in conformity and closed-mindedness. They want religion to impose order on a world when in fact doing so makes it worse. Christianity is breeding hatred and intolerance. It is making us less Christian every day.

No wonder so many Millennials are giving up on religion altogether. It’s not improving things, and it’s obviously phony and it’s hypocritical. But also Christianity is a very hard religion to practice, at least as Jesus taught it. It requires an open heart and love toward everyone, particularly those most unlike you. It’s clear that most Christians simply cannot and will not go there. It requires giving your treasure to the least of us. It requires you to act contrary to your nature. It requires you to constantly summon your better self and step outside your boundaries and prejudices. Most of us simply can’t, which simply drives cognitive dissonance that charlatans like Donald Trump are using for their own purposes. It feeds that chaos, the narrow-mindedness and the bigotry that is all around us.

Religion needs to be redefined for modern times. Perhaps we are better without it. Making the present try to fit the ideas of a far past is destroying us.

Future generations are going to loath Republicans

The Thinker by Rodin

The Republican Party has been reaching something of a zenith lately. For a brief while they controlled Congress. They still control the White House and arguably they control the courts, at least the Supreme Court, the one that matters most. They control 33 governorships, the most since at least 1990 and have 22 trifectas: where they control both houses of state government and the governorship (Democrats have 13 trifectas.)

But it’s going to really suck to be a Republican in the future. Republicans will be loathed and it’s not hard to see why. The most obvious reason is that they did almost everything possible to not address climate change. Donald Trump will be the most loathed of the bunch, but anyone that supported his agenda will be (at best) hissed at. Fortunately, most of these prominent Republicans are wealthy enough to move to the Cayman Islands. I’d say they’d best move there ASAP. But having been to the Cayman Islands, I discovered it’s not far above sea level. As islands in the Caribbean and Gulf of Mexico go, it’s going to be one of the first to be mostly underwater as sea levels rise.

People will be looking for someone to blame, and you can basically indict the entire Republican Party. Moreover, they don’t seem to learn. In Oregon, a few Republican legislators are not showing up for work. They are trying to prevent a bill from passing that will help the state address climate change through lack of a quorum. Yes, they want Oregon to keep worsening the climate crisis. The optics of this already looks bad. Imagine how bad it will look like in ten years.

They are much worse than the No-Nothings of the 19th century. They either deny undeniable facts or believe them and simply don’t care to address them. It’s hard to say which is worse. Just not caring about the climate crisis is bad enough, but they actively support policies that will make our future even chancier and bleaker is much worse. A migration crisis is already underway, but it’s only 1% as bad as it’s going to get. Republicans are actively making it even worse.

We could be working to contain these crises, by doing things like investing in Central America so its governments are less oppressive and their citizens can have some hope for the future. Instead, to punish them we are taking away what little money we give them. And since at least Reagan, Republicans have been supporting dictators down there. The political repression in places like Honduras, Venezuela and Guatemala are driving the crisis.

Finally, the concentration camps we are creating along our border with Mexico are getting some attention. From a party that almost universally wants to force mothers to carry children to term, even if impregnated by rape or incest, they systematically abuse children in these camps. A Trump spokesman actually went to court to tell the court that these children don’t need soap or showers. It’s not just children who are being treated inhumanely, but most of the other adults too. Putting too many people into “camps” not sized for their population in the definition of a concentration camp. Yet many Republicans are aghast that some are calling them what they really are. No, they are not death camps, at least not yet, although apparently influenza and other preventable diseases are widespread within them, and many migrants have died under our custody. Still, it’s not hard to see a Donald Trump in his second term feeling empowered to turn them into death camps as yet another “final solution”.

Then of course was their rape and pillage of the rest of us: the obscene tax cuts for the wealthy, the constant cutting of benefits like food stamps and Medicare, mostly unsuccessful efforts to kill Obamacare, the dumping of more pollution into our atmosphere and waterways and the ensuing health affects they cause that are already underway. Trump apparently thinks if you can’t see the pollution, it doesn’t count: as if someone suffering from asthma won’t have worse asthma when more of these pollutants are thrown into the atmosphere. Worldwide, 6.5 million death occur annually from poor air quality. In the United States, it kills about 200,000 people a year, and those are 2013 figures. This is far more people than are killed in auto accidents annually (about 37,000 people). These numbers are likely on the rise. All this from the so-called Party of Life!

The Republican Party will be seen as the selfish death and greed party who were predominantly responsible for making our country a poorer and increasingly problematic place to live. They ignored all evidence that suggested they were wrong. Since Trump, they have labeled anything of this evidence as “fake news”, claiming it can’t possibly be correct and were deliberately faked. No one will want to be a Republican and at some point no one will admit to being a Republican because it will be too dangerous.

They are likely to get a comeuppance, and it will probably be in the form of radical income redistribution as we try, probably futilely, to save our nation and our planet. They will be lucky if people don’t come after them with pitchforks. So now would be a good time for Republicans to have sudden change of hearts, but it probably won’t make much difference to future generations that will try to cope with the wreckage they mostly caused.

Republicans, move to the Cayman Islands while you can but it’s unlikely that the citizens there will treat you any more kindly.